A Do-Over on Lowest Unit Rates? - Rescheduled Primaries May Result in New Political Windows

In the hotly contested Democratic Presidential nominating contest, the delegates from Michigan and Florida, which already held Presidential primaries which were labeled as meaningless by the Democratic Party, may become crucial in deciding a winner in the race.  Thus, there have been discussions, particularly in Michigan, of holding another Presidential primary or caucus to award the delegates, probably in early June.  Broadcasters have asked whether they would need to provide lowest unit rates yet again if such a primary is held, given that they have already had one lowest unit rate window for the Presidential primaries already this year.  It seems to me that the answer is yes, a new lowest unit rate window would again open for any rescheduled primary.

While some might contend that a second window for the same election is somehow unfair, it is not at all unprecedented.  In a number of states, such as Louisiana, candidates in some elections must receive a majority of the votes (50% plus one) to be declared the winner.  Thus, in an election, it is not uncommon for there to be no "winner" in the November election, with a run-off having to be held a month or two later.  In those cases, lowest unit rates apply to the run-off, just as they did to the initial election.  Of course, the window is only available to the candidates competing in the election at issue, so if Michigan were to reschedule a primary in June, only the Democratic presidential candidates would be entitled to the rate - while Senator McCain, the presumptive Republican nominee, could be required to pay full rates for any ads that he might choose to run in this same period.  For more information about political broadcasting issues, see our Political Broadcasting Guide, which can be found here.

The Run-Up to Super Tuesday - Rush, the Super Bowl, Union Ads and an Hour on the Hallmark Channel

In the last few days before the Super Tuesday series of presidential primaries, efforts are being made across the political spectrum to convince voters to vote for or against the remaining candidates.  With Obama buying Super Bowl ads in many markets, Clinton planning a one-hour program on the Hallmark Channel the night before the primaries, Rush Limbaugh and other conservative radio host attacking McCain, and third-party interest groups and unions running ads supporting or attacking various candidates, a casual observer, looking at this media blitz, may wonder how all these efforts work under the rules and laws governing the FCC and political broadcasting.

For instance, sitting here watching the Super Bowl, I just watched a half-time ad for Barack Obama.  Did the  Obama campaign spring for one of those million dollar Super Bowl ads that we all read about?  Probably not.  It appears, according to press reports, that instead of buying a national ad in the Fox network coverage, the campaign purchased local ads in certain media markets.  And with reasonable access requirements under the Communications Act and FCC rules, he could insist that his commercial get access to the program as all Federal candidates have a right of reasoanble access to all classes and dayparts of station programming.  Moreover, the spot would have to be sold at lowest unit rates.  While those rates are not the rates that an advertiser would pay for a spot on a typical early Sunday evening on a Fox program, they still would be as low as any other advertiser would pay for a similar ad aired during the game.  In this case, by buying on local stations, at lowest unit rates, his campaign apparently made the calculation that it could afford the cost, and that the exposure made it not a bad deal.

On Monday night, the Clinton campaign has purchased an hour long block of time on the Hallmark cable channel to cover a town hall meeting.  Cable, unlike over-the-air broadcasting, is not subject to reasonable access requirements , so there was no obligation for the channel to sell time to the campaign.  And for network cable, it is still an open question as to what other FCC political rules apply.  The Commission recently went out of its way to avoid answering whether the equal opportunities rules apply to network cable by deciding that CNN did not violate the equal time rules by denying Dennis Kuchinich an opportunity to participate in a recent debate (see our summary of the case here).  From the lengths that the Commission went to in avoiding providing a direct answer to the question of whether equal opportunities applies to network cable programs, it could almost be inferred that, if push came to shove, the FCC would ultimately apply these rules if it could not otherwise avoid the issue.  But even if the rules applied, the sale of the programming block to the Clinton campaign would just give the Obama campaign the right to buy an hour of time, which it may or may not want.  And what rates would apply?  Applying the rules used for broadcast stations, if hour long blocks of time are not customarily sold by a network, the network could charge a reasonable amount, including a mark-up for lost audience in following time periods, according to recent FCC statements about the sale of block programming.

Around the country, in anticipation of the voting, third party groups including labor unions and other advocacy organizations are running ads supporting or opposing candidates.  These ads are not entitled to lowest unit rates (which are for candidates only), and stations need not sell time to these groups if they do not want to (reasonable access also applies only to candidates).  If a station does sell time to these groups, is there a requirement that a station sell time to supporters of both sides?  That is an open question.  While the FCC did away with most of the "Fairness Doctrine" over a decade ago, there is still a last thread of that doctrine that has never been officially abolished - the "Zapple Doctrine."  That doctrine was essentially equal time for supporters of a candidate - if a station sold time to the supporters of one candidate, it had to sell that time to the supporters of the other.  While the doctrine has not been applied in the last two decades, it has not been explicitly overruled so, if a station refused to sell to supporters of one side, the FCC might be forced to deal with that issue.

In fact, would that doctrine come into play in connection with the radio talk show hosts that are overtly partisan on the air?  According to press reports, many of the conservative radio talk show hosts have been aggressively anti-McCain in their programs.  As there are usually no appearances by the candidates on these programs, there are no equal opportunities issues, as equal opportunities is triggered only by the actual appearance of a candidate.  But could the Zapple Doctrine apply?  Traditionally, that doctrine applied to the purchase of time.  However, four years ago, when certain television stations thought about airing the "documentary" from the Swift Boat veterans attacking John Kerry, the Kerry campaign argued that the supporters of the Kerry campaign were entitled to free time under the Zapple Doctrine.  That case never reached a decision as the stations dropped their plans to air the film, but it remains an open issue (though more than a bit of a long-shot as it would seemingly render the abolition of the Fairness Doctrine meaningless, and raise significant First Amendment issues).

For more discussion of the FCC rules regulating broadcasters and political broadcasting, click on the Political Broadcasting subject heading on the right of this page, and read our Political Broadcasting Guide.  And watch for more discussion of political issues, as they arise, here.

Broadcast Calendar for 2008 Available - Reminders on FCC Filing Deadlines, Lowest Unit Rate Windows, SoundExchange Royalty Payment Dates and More

Here we are, almost a full month into the new year, and a number of important dates for broadcasters are already upon us.  As we wrote here, for instance, the payment of a minimum fee to SoundExchange by radio stations streaming their signals on the Internet is due today.  Lowest unit rates are in effect in many states for upcoming Presidential and even some Congressional primaries (see our post announcing the beginning of the LUR period for Super Tuesday).  FCC filing deadlines for Annual Ownership Reports for a number of states are due on February 1, as are EEO Public File Reports for several states.  And, on February 18, full power television stations must file with the FCC a Form 387 Status Report detailing where they are in their transition to digital television in time for the February 2009 transition deadline.  How is a broadcaster to keep all these dates straight?  Check out our advisory on the Important Dates for Broadcasters in 2008, available here, which tracks many of the deadlines that will occur this year - including the dates of routine FCC filings, lowest unit rate windows for political broadcasting purposes, and digital television transition milestones.

And a reminder about February 1 deadlines.  Radio stations in Arkansas, Louisiana, Mississippi, New Jersey, and New York, and television stations in Kansas, Nebraska, and Oklahoma must prepare and file electronically an FCC Form 323 Biennial Ownership Report with the FCC.  Our Advisory on completing and filing the Ownership Report can be found, here.  And radio and television Station Employment Units in Arkansas, Kansas, Louisiana, Mississippi, Nebraska, New Jersey, New York, and Oklahoma must place in their Public Inspection File and post on their website, if they have a website, their FCC Annual EEO Public File Report.   In addition, radio stations in Arkansas, Louisiana, and Mississippi with eleven or more full-time employees must also prepare and file electronically with the Commission an FCC Form 397 Mid-Term EEO Report.  Our Advisory on these filing requirements can be found here.  Stay on top of all these deadlines with our advisory on Important Dates for Broadcasters for 2008.