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The FCC has announced that the obligation for television broadcast stations to post their public inspection files online will become effective August 2, 2012, absent a stay requested by the National Association of Broadcasters (NAB), which has appealed the rule to the US Court of Appeals for the DC Circuit.

Absent a stay, the rule requires full power and Class A television stations to post any NEW public file documents online at an FCC-hosted website as of August 2nd.  Those broadcasters will have six months or until February 2, 2013 to post PRE-EXISTING public file documents online. 

The political public file, which is the subject of the NAB appeal, will be treated a bit differently.  NEW political public file documents must be posted effective August 2 by only the top four network affiliated stations (ABC, CBS, NBC and Fox) in the top 50 markets. There is no requirement to post pre-existing political file documents online.

All other TV stations (i.e. non-network affiliated stations in the top 50 markets and ALL TV stations outside of the top 50 markets), do not have to post political public file documents online until July 1, 2014.

While it remains to be seen whether the NAB's request for a stay of these requirements will be granted, the FCC plans to schedule user testing and educational webinars in the near future to ensure that users know how to upload documents to the FCC's website intended for this purpose, and perhaps to ensure that the website can handle the anticipated traffic. 

While TV broadcasters should begin preparing for this requirement, it would be wise to stay tuned for further developments.

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Does a broadcast station need to book a political ad buy for an agency purporting to be representing a candidate, but refusing to reveal who that candidate is? We’ve recently received this question from a number of broadcast stations in a number of states, as agencies seemingly are jockeying to tie up valuable commercial time in advance of what is likely to be a hotly contested election in November. This seems to be happening particularly with stations that have coverage areas that include parts of certain “swing states” in the Presidential election, or in states with crucial Congressional or Senatorial elections. It seems to us that, unless and until you know that there is a real candidate, there is no obligation for a station to book time for a hypothetical candidate or candidate to be named later.

Booking time for an unknown candidate raises numerous issues for a station. How can a station account for the sale of that time in its political file? If it doesn’t know who the candidate is, it can’t place the required information (which includes the candidate’s name) into the political file. Booking time for a political candidate gives rise to equal opportunities obligations, even outside the 45 and 60 days political windows. How can you determine to whom you owe equal time when the station itself doesn’t even know who the candidate is? And, if the agency even refuses to reveal if it is a Federal or state campaign for which it plans to buy time, making time available to an agency on behalf of an unknown candidate that turns out to be a state candidate may cause the station, through the application of equal opportunities, to have to sell time for a race to which it did not intend to provide access, or to open up dayparts to that state race when it did not intend to offer those dayparts to state candidates. In fact, without knowing the candidate, how can the station assess whether the candidate is legally qualified, or that the time is being purchased by an authorized candidate committee? 

A more difficult question involves giving out rates to agencies that don’t reveal the name of the candidate on whose behalf they are acting. Many stations may be willing to send out their political rate card and disclosure statement to an agency, even if they don’t know who the candidate is, in order to curry favor with the agency when the time actually comes for that agency to buy spots. Other stations may be more reluctant to do so as they don’t want to be sending detailed information about their least expensive rates to just anyone.  Of course, individual lowest unit rates may be available in the station’s public file (and soon, for TV stations, online). But that will reveal only specific rates for specific buys, not all rates for all of the station’s principal classes and dayparts as will be revealed in a full disclosure statement. The Commission has never declared the political rate card or a written political disclosure statement to be public documents that have to be provided to anyone who asks. In fact, the Commission has never even required that they be in writing – though most stations follow good practice and do put them in writing to ensure that they make the same disclosure to all candidates who ask, as required by the Commission.

Neither of these is an easy question, and these thoughts are just for stations to ponder in making decisions on these types of early political season calls. Stations should always check with their own counsel on questions like this – especially if faced with an insistent buyer who refuses to identify the candidate for whom they are buying.

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While rumors are flying that the FCC is rushing to adopt its proposals to require that TV stations put their public inspection files online (see our summary of the proposals here), both the FCC and public interest groups are targeting the public files of television stations - looking to copy some or all of those files.  Rumors are that the FCC inspected the public files of all television stations in at least one city - and asked for copies of the complete files to be produced at the FCC within a day or two, in some cases requiring the copying of several file cabinets worth of material very quickly.  Whether this inspection is a one-shot deal or the start of a program to audit the files of TV stations across the country is unclear.  At the same time, public interest groups have been urging their members to inspect TV station public files across the nation, to copy parts of those files, and to post the information that they collect online.  TV stations across the country need to be prepared for these inspections.

Why these actions now?  Some may think that the FCC is just conducting a random audit, while others may suggest that the demand for complete public files is just a fact-finding mission as part of its rulemaking process.  The more suspicious of broadcasters may think that this represents the FCC sending a message that the online public file is coming, and stations may find it easier to accept the online file rather than facing these demands for the instant reproduction of their entire files to be inspected at leisure in Washington. 

The most controversial part of the FCC's proposal has become the issue of putting the political file online - and that is also the part of the file that seems to be the principal target of the public interest groups.  In a story run in January on public radio's On the Media, Steve Waldman, who was in charge of the FCC Future of Media Report (which we summarized here when it was released as the report on The Information Needs of Communities), suggests that broadcasters' opposition - that there is too much information that comes in too fast during political season to be put online without substantial inconvenience and expense - somehow shows that broadcasters are not making the best use of technology, implying that the online public file should be viewed as a way of streamlining the stations' recordkeeping. Listen to that interview here.

But this completely misses the mark.  Few, if any, TV stations don't already use computerized sales and logging (i.e. scheduling) systems to manage their advertising sales and its insertions into broadcast programming.  TV stations are hardly the technological backwaters suggested in the interview.  The issue is not computerizing the station's business records.  Instead, the real issue is computerizing the records and making them available to the public in a format that the FCC dictates - a format that has not even been developed and will certainly not be the same format in which stations keep their internal records. 

The FCC several years ago asked for the online reporting on station ownership in a form redesigned by the FCC supposedly to allow it to be searchable by the public.  That public search function still has not been available well over two and a half years after the form first went online, and most stations find the system to be very user-unfriendly and time-consuming to prepare.  And Ownership Reports are filed only once every two years.  For reports that need to be updated daily - even hourly at the height of political season - it is simply unreasonable assume that there will not be a substantial burden on broadcasters to convert their information to an FCC-mandated format to report on the dozens of political buyers who are buying and running ads on a daily basis on many television stations in the weeks leading up to any election. 

While there have been some rumors that the FCC is thinking about backing off of the demand for a searchable database in which to upload these forms, even scanning and uploading the forms onto an FCC database of some description will require a whole new burden on broadcasters (see our article here about the FCC's obligation to evaluate that burden). 

Just what is the justification for this burden?  It does not seem to be one that is rooted in Communications laws, or in fact to have anything to do with the operations of television stations. Instead, public interest groups seem to be saying that the public has a right to know how much is being spent on broadcast advertising by candidates and third-party groups - right down to the amount that is spent by particular candidates on particular stations for a particular flight of advertising spots - and that these facts should be available nationwide. So, rather than focusing on facts that reveal how a broadcaster is serving its community, as most FCC regulations do, the justification for the online political file is one of looking at information about candidate and PAC spending in Federal races.  Is this a justification for imposing burdens on broadcasters?  Shouldn't these burdens instead be put on the candidates that these groups seem to want to regulate - the candidates and PACs?

While much of the focus on the effort to force broadcasters to put their public file online has been focused on the political file, that is not the only issue that could cause concern.  As we wrote when we summarized the proposal advanced by the FCC in its notice of proposed rulemaking, we are also concerned about the brand new requirement for broadcasters to post information about sponsorship identification in their online file.  The proposal for this information was not really spelled out in detail in the NPRM, and it is not information that is currently required in the public file (with the limited exception of sponsorship information for issue advertising).  What will this new obligation entail?

We may not have long to wait to find out.  Rumors had been that the FCC was trying to get the item ready for the March open meeting - a deadline that was obviously missed.  Now the target seems to be April.  So, as broadcasters head to Las Vegas for their annual convention in the middle of the month, they may well be facing new obligations so that the public can learn how much candidates are spending on their stations. 

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While the FCC is entertaining comments on its proposal to move the public inspection file for broadcast television stations online (see our article here), the existing physical public files of several New York area broadcasters came under examination by the New York Times, according to an article in Sunday’s paper. The article seemed to both make fun of the contents of the required public file, while at the same time noting that the people at several stations contacted by the reporter seemed to be unaware of the Commission’s requirements that the file be made available immediately to anyone who visits a station and asks to see it, and that requiring appointments is not an option. We've written in the past about stations that received substantial fines for requiring a visitor to make an appointment to see a station’s files (see, one case where a commercial TV station was fined $10,000, and another where a noncommercial FM was fined $8000 for a similar violation).  If the NY Times article is accurate, stations need to reexamine their policies and be sure that those dealing with the public know of the location of the file and the fact that it must be made available upon request – no questions asked. For more information about the public file requirements, see our Guide to the Basics of the Public Inspection File for Commercial Stations, here.

The second aspect of the report, poking some fun at some of the weird comments from the public found in the file, reinforces some of what I have been told by broadcasters. At a broadcaster meeting last week, I was told stories of station public files that have expanded exponentially since the FCC added a requirement that the file contain emails from the public, as well as letters. Broadcasters report that the letters from the public can now often take up several drawers of a file cabinet, while the remainder of the file fits in a single drawer. While the Commission has tentatively concluded that these letters would not be required to be included in the electronic online file, the recent rulemaking proposal did suggest that the letters be retained at the station, and that perhaps summaries of the written comments be made part of the online file. In addition, comments were requested as to whether social media posts about station operations be kept in some fashion – even though sites like Facebook and Twitter, by their very nature, keep most of what it posted on their sites for the public to view (see our summary of the proposals here). Broadcasters at my meeting last week were very concerned about the volume of paper that would generate, and the need for manpower to review Twitter feeds and Facebook posts almost around the clock to see if any needed to be placed into the file as they related to the station operations.

The fact that many major-market stations were unprepared for a request to view the public file seems, at first glance, incredible to those of us who deal with legal issues all the time. But what it instead may show is the utter lack of public interest in the contents of those files. Around the country, broadcasters tell me that their files are never visited – except for the political file at bigger stations in major markets. If a file is never visited, procedures may become lax or unfamiliar through lack of practice by the staff in dealing with requests. Broadcasters need to let the FCC know what they think about the proposal for an online file and the various new additions to that file proposed by the Commission, by the December 22 deadline. No doubt the Times story will figure in someone’s filing, so be sure to have your voice heard on these proposals by that deadline.

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The FCC has set the date for comments on the proposal for television stations to maintain an online public inspection file, including an online political file (see Federal Register notice here).  Comments are due on December 22.  Replies are due on January 6.  Happy Holidays from the FCC!  We summarized the FCC's proposals here and here.  While the proposed new rules will relieve stations from the burden of hosting the files themselves (as the FCC is proposing to host all of the files on its own servers), it still requires that stations upload their information - including all information that is put in their political file, into a new electronic reporting system to be devised by the FCC.  As we described in detail in our summary of the proposal for the online public file, the FCC is asking whether certain new public file obligations should be added to those currently in place.  These include possible posting of comments on programming that come from the station's social media efforts in addition to the letters and emails currently required; a proposed requirement to place in the public file information about sponsorship identification of all "pay for play" material that is broadcast on a station (currently only broadcast, not kept in any paper form); a requirement to provide information about shared services agreements and the programming that they provide to a station; and a requirement that all information about fines and other enforcement actions taken against a station be posted to the online file.  So how much does the FCC think that this will cost stations?

As we wrote yesterday, in adopting rules, the FCC is currently bound by the Paperwork Reduction and the Regulatory Flexibility Acts, both of which require some assessment of the impact of new regulations, particularly on small businesses.  In the Federal Register publication, the FCC's assessment of the regulatory burden of these proposed new obligations is broken down into several pieces.  The burden for the new online public file requirement, including the posting of the political file, is set forth as follows:

Respondents/Affected Parties: Business or other for-profit entities; Not for-profit institutions; Individuals or households

Number of Respondents and Responses: 25,422 respondents; 59,833 responses

Estimated Time per Response: 1 to 104 hours.

Frequency of Response: On occasion reporting requirement; Recordkeeping requirement; Third party disclosure requirement

 Obligation To Respond: Required to obtain or retain benefits. The statutory authority for this collection of information is contained in 47 U.S.C 151, 152, 154(i), 303, 307 and 308

Total Annual Burden: 2,158,909 hours

 Total Annual Costs: $801,150.00

Stations should look at and evaluate these numbers as part of their response, as the FCC has invited a cost-benefit analysis of the proposed new rules.  How is it that the FCC assumes that the regulatory burden would be over 2 million hours, but that the costs would be less than a million dollars?  How will this work be done and paid for?  It is also interested in that the number of respondents is listed as 25,422.  As there are only 1,782 full-power television stations and about 450 Class A stations according to the last FCC Report on station totals, who else is expected to report on this form?  The FCC, in its Notice of Proposed Rulemaking, specifically exempted radio from the obligations for an online public file - at least for the time being.

A separate assessment is made of the need to collect information to meet the new sponsorship identification.  The FCC expects 22,761 respondents and 1,831,610 responses, but expects each response to take only .0011 to .2011 hours (about a minute to 12 minutes).  This leads to an estimate of a total annual burden of 242,633 hours at a cost of $33,828.  Again, do these estimate seem realistic?  When has anyone even been able to log onto an FCC database and submit required information in one minute - much less to gather information about the sponsorships that may be included in each program that is broadcast and to get it organized for submission to the FCC's online public file system.

The comment date is not yet set for the related proceeding for a new FCC Form to replace the never-implemented Form 355.  As we wrote last week, this new form will require that television broadcasters (for now, with radio to be included at some later date) document very specific facets of their public interest service - for inclusion in the new online public file.  Watch for comment deadlines on the proposal for this new form shortly. And, perhaps while you are preparing for the holidays and preparing your comments, you can ask Santa for some help at your stations to upload your information to this new online public file, as it may be only by borrowing Santa's helpers that you'll be able to meet the burdens that the FCC imposes at the costs that it projects. 

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The full text of the FCC's Order overturning its 2007 decision on online public inspection files for TV broadcasters and the adoption of the Form 355 "enhanced disclosure form" has now been released.  This order, adopted at the FCC's open meeting this week (held on October 27, 2011, which we wrote about here), also contains a Further Notice of Proposed Rulemaking again suggesting an online public file, but this time it would be one hosted by the FCC.  In reading the full text, more details of the FCC's proposal become clear.  As set forth below, the Order suggests everything from a future application of these rules to radio once the bugs have been worked out, to an examination of whether a station needs to save Facebook posts and other social media comments in the same way that it preserves letters from the public and emails about station operations, to a proposal for stations to document in their files information about all "pay for play" sponsorships.  Comments on these proposals, and the others summarized below, which include a request for detailed information about the costs of compliance with the proposals, are due 30 days from when the order is published in the Federal Register, with Reply Comments due only 15 days thereafter.  The FCC, after sitting on these obligations for almost 5 years, now seems to be ready to move quickly. 

In reaching it's decision, the order first discusses some proposals that it was rejecting - some for the time being.  For radio broadcasters, the most important of the rejected thoughts was the extension of this rule to radio.  The Commission noted that there were proposals pending and ripe for action as part of the Localism proceeding (which we summarized here), to extend the online public file obligations to radio.  In this week's order, the FCC decided that it was not yet ready to apply these rules to radio.  The Commission noted that there might need to be differences in the rules for radio (implying that, at least partially, there might be resource issues making it difficult for radio broadcasters to comply with these rules), and also finding that it would be better to see how an online file works for TV before extending the rule to radio.  But, from the statements made in the Order, there is no question but that, at some point in the future, some form of the obligations that are proposed for TV will also be proposed for radio broadcasters. 

Also, it is important to note that the FCC's Localism proceeding is not dead yet.  While this week's Order stems from the FCC's Future of Media Report (renamed the Report on the Information Needs of Communities), and that report recommended that the Localism proceeding be terminated, this Order did not do that.  The Commission notes its plans to start a new proceeding designed to force broadcasters to complete a more comprehensive report on their public interest programming.  That proceeding may be where the looming Localism proposals are finally dealt with.  Statements at the meeting and passages in the Order make clear that the examination of the public interest obligations for broadcasters will begin with a Notice of Inquiry, which is a most preliminary stage of an FCC proceeding (which would be followed by a Notice of Proposed Rulemaking after the inquiry comments are reviewed) and then an Order.  So final resolution of these issues seem to be far down the road.  If that is the case, will the Localism proposals stay on the table until the Order in this new proceeding is adopted?  It is certainly unclear from the Commission's statements thus far.

Other proposals rejected by the FCC include one asking that access to the file be limited to local residents of a station's service area.  The reason for the rejection of this proposal seems to be based on the proposed adoption of the online file (that there would be no more burden on the station to make it available to all once it is online; that local residents could access the file when traveling; and that restricting the file to locals would create more, not less work) rather than on any philosophical reason that the file should be available to everyone.   There also seems to be no discussion whatsoever about the possibility of abolishing the public file, as some broadcasters suggested when the rule was up for review as part of the normal review of FCC rules under provisions of the Paperwork Reduction Act.

Another suggestion that the Commission considered and rejected was one that asked whether any new proposal should be phased in - with only new information placed online, and old information retained in paper form.  The FCC tentatively rejects that approach, finding that it would be too burdensome for the public to be forced to look in two places for information about station operations.  The Commission also suggests that the burden to move those portions of the public file not already online to an electronic form should not be too great.

Other specifics of the FCC's proposal include the following:

• While the FCC proposes to store the online file on its servers, and to use its site and bandwidth to make the information available to the public, the Commission also proposes that broadcasters keep an electronic back-up file in case there should be issues with the FCC's servers or other systems.
• The political file is proposed to be moved online. The Commission asks about the burden that would impose, as materials are supposed to be placed in the file "immediately" in most circumstances.  The Commission suggests that this should not be a burden as most political orders are taken electronically.  But it does not explain the connection with that fact and the ease of an electronic file.  In most cases, there is more to maintaining a file then simply placing an order into that file, and there is no indication that orders are in the same electronic format as will be the FCC's online file.  The FCC asks if it should provide forms that would make that process easier (though one wonders whether the FCC could come up with forms that are equally usable by all stations that each may have unique selling practices).  The Commission itself acknowledges that there is more to the issue, as it asks how an online political file can be organized so as to make it useful.  Should it be broken down by election, or in some other way?
• While, for privacy reasons, the FCC suggests that letters and emails from the public not be displayed on the online file, it asks a number of other questions about letters from the public:
  • Should all such correspondence continue to be maintained in a physical file, open for inspection, at the station?
  • Should broadcasters be required to report online about the number of letters received from the public, or to summarize their contents in the online file?
  • Are there other ways of making such documents available?
  • Should Facebook posts and other social media communications be made available to the public in some organized fashion as part of the public file obligation?
• Are contour maps generated by the FCC's own website sufficient for the online public file?
• The Public and Broadcasting Handbook is proposed to be eliminated from the public file obligation, as that handbook would simply be available on the FCC's website where all the files are stored
• The FCC proposes to maintain the obligation for TV stations to complete quarterly programs issues lists until any new form, more completely disclosing information about a broadcaster's public interest programming, is adopted.
• The FCC asks if, in the online file, it should post all orders dealing with sanctions imposed on a station for any rule violations, including forfeiture orders (i.e. fines), notices of violation, notices of apparent liability and other citations for violations.  Even though some of these documents are only preliminary findings of violations, which can be rebutted by a licensee, the FCC tentatively concludes that these documents would be important to the public to assess the performance of a broadcaster.
• The FCC proposes some new obligations for the public file, including:
  • An obligation to list the address and telephone number of the main studio and, for those stations operating pursuant to a studio waiver, a toll free phone number and the location of the local public file (one wonders, though, if the file is electronic, will there be any such location for the local file?)
  • An obligation to disclose in the online public file all information about "pay for play" sponsorship identifications.  The FCC notes that all that information is now required to be broadcast, but there is no way for the public to review that information after the program with which it is associated is aired.  The FCC notes that such information should already be in the file for sponsored political and controversial issue oriented program, but suggests that the public and "watchdog groups" should have a permanent, searchable database in which all such sponsorships are revealed.  The Commission notes that such on-air disclosures are, but their nature "fleeting", and that the public should be able to know who is trying to persuade them to buy something.  The FCC does not discuss how such disclosures would be made with respect to network or syndicated programming (e.g. if a network game show concludes with the tag "promotional considerations furnished by Hilton Hotels", how is the station supposed to find that information for inclusion in its file?  What if the promotional consideration was received by the producers of a movie aired by the station?  These questions were asked in the FCC's open proceeding on sponsorship identification and embedded advertising, but these difficult issues are ignored here).
  • Information about shared services agreements, including agreements where stations provide administrative support or news programming to another station, are proposed for posting on the new online file.  These agreements seem to be a particular target of public interest groups, and were characterized by Commissioner Copps as an "end run around our media ownership rules" (see our prior coverage, here). 
• Practical questions about the format in which such documents should be stored are asked.  The FCC is looking for a searchable format that will allow documents to be uploaded to the FCC site in the least burdensome manner possible.
• The FCC asks what notice of the existence of the online file should be required.  The Commission had, in 2007, suggested a twice a day announcement on the air about the file's electronic location, but now asks if a few announcements per week would be sufficient.  Should specific dayparts be mandated, the Order asks.
• The FCC also proposes that the URL of the Public File be on the homepage of the station's website, where is can be easily found by members of the public.
• The FCC proposes to eliminate the obligation on broadcasters to make the electronic file accessible to those with disabilities, as the FCC suggests that the database in which the files will be stored will be designed to be accessible, so that the burden would be on the FCC, not the individual broadcasters.

Obviously, there are many concerns for broadcasters, who already chafe at the burdens of maintaining a public file which is rarely if ever visited by the public.  New obligations to take that information, and perhaps compile more, and put it online, adds a new layer of worry to many TV broadcasters, especially smaller ones.  The FCC seems cognizant of that possibility, and asks for a full Cost/Benefit Analysis of the proposed rule.  The FCC wants broadcasters to determine the costs of complying with the various proposed obligations, and those in the public interest community to determine what the value of the benefits would be.  The FCC recognizes that the value of the benefits might be difficult to assess, so the Commission asks how the benefits to the public can be maximized while the burdens on the broadcaster are minimized.

There will no doubt be much more debate on these topics in the weeks to come.  But the FCC seems to be in a rush to get this proceeding done, as many public interest groups and Commissioner Copps have complained about the lack of action on the 2007 rules and the localism proposals.  So start preparing your comments now for filing once the FCC announces the dates for submission of comments.  We will certainly have more coverage of this important issue for broadcasters on these pages in coming weeks and months. 

 

 

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At its meeting today, the FCC vacated its 2007 Order mandating an online public file and the filing of the Form 355 “Enhanced Disclosure” form that detailed the public interest service of television broadcasters. But these requirements are not gone, as the Commission has adopted a Further Notice of Proposed Rulemaking asking to reinstate an obligation for an online public file, and a Notice of Inquiry is apparently circulating at the FCC that would propose a substitute for the Form 355. The proposal for the new online public file apparently also suggests including new information in the online file, including information about sponsorship identification and copies of shared service agreements. While the text of the FCC order is not yet out, from the information provided at the FCC meeting, the following matters appear to be on the table at the FCC:

• The FCC proposes that TV broadcasters will need to have an online public file, submitted to and maintained on servers at the FCC rather than on each individual station's website
  • Several Commissioners suggest that the Commission will develop a mechanism for accessible storage of online public files, which may be searchable by the public
  • The online public file form will automatically import other FCC filings that are required to be in the file
  • Until the FCC electronic database is perfected, the documents will be placed online in their current formats
• Letters from the public concerning station operations are proposed to be excluded from the online file out of privacy concerns, though broadcasters will still need to keep those letters in a public file at the station.
• The online public file is proposed to include the political file, which was exempt under the 2007 rule as it would be too burdensome to update that report rapidly during an election season
• The online file is proposed to include additional material not now required to be in the public file, including:
  • Copies of shared services agreements
  • Sponsorship identification information that is now only broadcast on air in connection with the program in which sponsored material is included
• The FCC is currently considering a Notice of Inquiry, a draft of which is apparently circulating among the Commissioners now, that proposes some form of enhanced disclosure form that will replace the Form 355 (and the current Quarterly Programs Issues list) to document the public service provided by TV broadcasters

Reactions of the Commissioners varied.  Commissioner Copps urged the FCC to not only require the compilation and accessibility of information about the public service provided by broadcasters, but also standards that would allow the public to complain if they did not believe that a station adequately served the needs of the local community.  Commissioner McDowell (who voted against the adoption of the Form 355) said that he feared that the FCC was again moving down the road toward burdensome regulation, and might even be facing constitutional issues about some of its proposals.  Commissioner Clyburn claimed that the public files of many broadcasters were in the deep recesses of broadcast stations, in dilapidated filing cabinets, and the materials in the files were prepared in small fonts – and visits to these files was time consuming and burdensome for those wanting to review this material.  Chairman Genachowski principally talked about the efficiencies of electronic documents, cataloging the many ways that the FCC has provided information online, including moving many other FCC obligations to online filings. 

This is obviously a very important issue for broadcasters, as the potential for new burdensome regulations clearly exists. We wrote about many of the problems with the Form 355 (see, e.g. our article here), and the new file may well impose similar burdens (especially in connection with the obligation to document sponsorship identification material, and at election time with respect to the political file). Moreover, while these proposals are for TV broadcasters only, one can expect that, if they are adopted, there will be proposals to extend them to radio at some point in the future. We will have more about this proposal once the text of the item is released, and will add links to this article once the statements of the Commissioners the FCC public notice are available.

Update - 10/27/2012, 1:15 PM - The Public Notice of the FCC action, which is not very informative, is available here. 

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In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

• An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
• Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
• Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
• Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
• Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
• Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
• Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
  • 6 of the Top 50 TV markets
  • 3 of the markets 51-100
  • 3 of the markets rates 101-150
  • 3 markets below 150
  • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
• Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

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Reading the trade press and the blogs, one would think that the Tim Tebow ad that will reportedly air during the Super Bowl presented novel, controversial legal issues.  In fact, while we haven't seen the ad, from what we've read, there do not seem to be significant legal issues - most particularly ones that arise from an FCC perspective.  The word is that this ad is pro-life, telling his mother's story of why she decided to have her child after a medical recommendation that she not, and how that child grew up to be a famous quarterback.  Where are the FCC legal issues?  Even were this ad to explicitly address a "controversial issue of public importance", like the abortion debate, and even were stations running the ad not willing to take ads from pro-choice groups (and there is no indication that this sort of rejection of opposing viewpoints has occurred), as the debates earlier this year on the airwaves and over cable channels made clear, there is no longer any Fairness Doctrine enforced by the FCC.  Thus, there is no FCC requirement for stations having to give equal time to competing sides of any particular issue (even when the Fairness Doctrine existed, there was never an obligation for strict equal time - a broadcast station just needed to, in some manner, present both sides of an  issue).

At most, were the ad to advocate some specific Federal action, there might trigger an FCC obligation for stations that carry the ad to place a note in their public file about the ad and the amount paid to run it (see our post here), but otherwise the issue seems to be a tempest in a teapot.  Since the abolition of the Fairness Doctrine, broadcasters have been assumed to be able to exercise their own editorial discretion to decide what serves their audience and what doesn't.  In the vast majority of cases, no one bats an eye.  But combine celebrity, the Super Bowl and a reference to a political hot-button issue, and you have a media controversy - even though there is no legal one.  So, unless the ad has some content that no one seems to be contemplating, the folks at the FCC should be able to relax and simply watch the game (assuming no clothing malfunctions or similar unexpected events - which we will leave to another post on another day...)

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On November 10, Davis Wright Tremaine's David Oxenford and Bobby Baker, the head of the FCC's Office of Political Broadcasting, conducted a webinar on the FCC's political broadcasting rules and policies.  The webinar originated from Lansing, Michigan, before an audience of Michigan Broadcasters, and was webcast to broadcasters in 13 other states.  Topics discussed included reasonable access, equal opportunities, lowest unit charges, and political sponsorship identification and public file rules. 

Seminar participants were provided with Davis Wright Tremaine's Political Broadcasting Guide, available here.  The PowerPoint presentation used in the seminar is available here.

 

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A story in today's Wall Street Journal discusses the significant amount of money being spent on television advertising for and against pending proposals for health care reform.  As we have written before, broadcasters are required to keep in their public file information about advertising dealing with Federal issues - records as detailed as those kept for political candidates.  Information in the file should include not only the sponsor of the ad, but also when the spots are scheduled to run (and, after the fact, when they did in fact run), the class of time purchased, and the price paid for the advertising.  Clearly, the health care issue is a Federal issue, as it is being considered by the US Congress in Washington.  So remember to keep your public file up to date with this required information. 

Section 315 of the Communications Act deals with these issues, stating that these records must be kept for any request to purchase time on a "political matter of national importance", which is defined as any matter relating to a candidate or Federal election or "a national legislative issue of public importance."  Clearly, health care would fit in that definition.  The specific information to be kept in the file includes:

• If the request to purchase time is accepted or rejected
• Dates on which the ad is run
• The rates charged by the station
• Class of time purchased
• The issue to which the ad refers
• The name of the purchaser of the advertising time including:
  • The name, address and phone number of a contact person
  • A list of the chief executive officers or members of the executive committee or board of directors of the sponsoring organization.

This information needs to be put into the public file as soon as possible, and maintained for a minimum of two years.  To avoid potential legal issues in dealing with these controversial topics, keep your file up to date. 

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In the last few weeks, I've received several calls from broadcasters about on-air employees who have decided to run for local political office, and the equal time obligations that these decisions can create.  Initially, it is important to remember that equal opportunities apply to state and local candidates, as well as Federal candidates.  And the rules apply as soon as the candidate is legally qualified, even if the spot airs outside the "political windows" used for lowest unit rate purposes (45 days before a primary and 60 days before the general election).  For more information about how the rules apply, see our Political Broadcasting Guide.  In one very recent example of the application of these rules, a situation in Columbia, Missouri has been reported in local newspaper stories concerning a radio station morning show host who decided to run for the local elective hospital board.  To avoid having to give equal time to the host's political opponents, the station decided to take the employee off the air.  This was but one option open to the station, as set forth in the article, quoting the head of the Missouri Broadcasters Association, who accurately set out several other choices that the station could have taken. 

These choices for the station faced with an on-air host who runs for office include:

• Obtain waivers from the opponents of the station employee allowing the employee to continue to do his job, perhaps with conditions such as forbidding any discussions of the political race.
• Allow the candidate to continue to broadcast in exchange for a negotiated amount of air time for the opponents
• Provide equal time to the opposing candidates equal to the amount of time that the host's voice was heard on the air (if the opponents request it within 7 days of the host being on the air)
• Take the host off the air during the election

Other situations have also arisen concerning non-employees, running for office, who may work for another local station, for ad agencies, or for advertisers, but whose voice or picture appears on spots that run on a station.

The Commission's rules require equal opportunities where a candidate's "recognizable voice or image" appears on a broadcast station.  So, if an announcer with a recognizable voice decides to run for office, commercials featuring that voice become subject to the equal opportunities doctrine.  If that voice is on a PSA or station promotional announcement, for which no consideration is received by the station,opposing candidates who request it within 7 days, get equal time for free - and they can use it in connection with their campaign.  If the voice is on a paid commercial, the opposing candidate will probably have to pay for the equal time, though the opponent would get lowest unit rates during political window periods (even though the initial candidate's spot for a commercial advertiser was for full commercial rates).  As the equal time obligation to respond to paid spots is not for free, but instead only gives the opponent the right to buy time, stations might seem to have no reason to object to the initial candidate's voice on a spot.  However, that spot could force the station to sell time to candidates in a race in which the station might have otherwise have determined not to sell time.  Only Federal candidates have a right of reasonable access to broadcast stations.  Stations can choose whether or not to give state and local candidates access to their stations but, once they make the station available to one candidate, they must make it available to all candidate for the same office.  Thus, a station may have decided, for inventory control or other reasons, not to sell time to candidates for an office like hospital commissioner but, if one candidate's recognizable voice appears on an ad for a local car dealer, the other hospital commissioner candidates can request time within 7 days, and be entitled to purchase such time.

Stations also need to make notes in their public file of all "uses" of a station by a political candidate.  All of these appearances by on-air personnel who become candidates would be considered a use by a political candidate (even though they never mention their campaign), so they must be noted.  Clearly, there are many political broadcasting issues that must be considered when an employee runs for office - so stations should take care of observing those rules.

 

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The FCC's political broadcasting rules can seem impenetrable and ever-changing, yet the same basic rules have been in place for well over a decade, with only minimal changes in the sponsorship identification and public file requirements mandated by the Bipartisan Campaign Reform Act of 2002. With a little attention, memorization, and a guide to the rules, the basics of the political rules can be deciphered.  We have put together a Guide to the Political Broadcasting Rules, to help explain these basics.  Our Guide presents information in a Question and Answer format, in Sections explaining various topics involved in the political broadcasting area.  These Sections are:

• The Basics—Speak the Language
• Preparing for an Election—What to Worry About in Pre-election Periods
• Reasonable Access—Deciding Which Candidates Can Buy Time
• Equal Opportunities—Treating Competing Candidates Alike
• No Censorship and Third-Party Ads—What Responsibility Do Stations Have for Content
• Lowest Unit Charges—How Much Money Can You Charge for Political Spots
• Sponsorship Identification and BCRA Requirements
• Public File and Disclosure Statements
• Conclusion—Questions and Resources

The rules essentially require broadcasters to sell rock-bottom priced spots to transient advertisers, who are often the least familiar with broadcast sales practices, yet demand the most time and attention from station sales representatives. Consequently, broadcasters end up getting the least money for spots that take the most time to sell.   And these spots often cause the most heartache, since there is always the threat of FCC enforcement action or  worries about the cost of attorneys to help avoid getting the rules wrong.   Our guide is meant to provide some basic guidelines to help broadcasters identify the most common issues that arise during the election season.  For the complete guide, click here.

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