Now that the Democratic and Republican conventions are over and the candidates begin the final sprint to the November 6 elections, the political broadcasting season goes into overdrive. Effective last Friday, lowest unit rates are in effect. In this year which will probably break all records for political spending, is your station ready to comply with all of the political rules? We thought that we’d provide a series of articles on some of the basics of the FCC political broadcasting rules, to make sure that your station is prepared to deal with the most common issues that arise in a political season. Today, as the lowest unit charges have just kicked in, we’ll hit some of the common questions that we get about these rates. In coming days, we'll address other areas of the FCC's political rules.
Essentially, lowest unit charges guarantee that, in the 45 days before a primary and the 60 days before a general election, candidates get the lowest rate in any class of advertising time for a spot in that class that is then running on the station. Candidates get the benefit of all volume discounts without having to buy in volume – i.e. the candidate gets the same rate for buying one spot as your most favored advertiser gets for buying hundreds of spots of the same class. But there are so many other aspects to the lowest unit rates, and stations need to be sure that they get these rules right.
It is a common misperception that a station has one lowest unit rate, when in fact almost every station will have several – if not dozens of lowest unit rates. Even on the smallest radio station, there are probably several different classes of spots. For instance, there will be different rates for spots that run in morning drive and spots that run in the middle of the night. For each of these time periods with different rates, that class of time has a different lowest unit rate. On television stations, there are often classes based not only on daypart, but even down to the individual program. Each rotation on the station is its own class, with its own lowest unit rates (e.g. a 6 AM to noon rotation is a different class than a 6 AM to 6 PM rotation, which is different from a 24 hour rotator – and each can have its own lowest unit rate). Even in the same time period, there can be preemptible and non-preemptible time, each forming a different class with its own lowest unit rate. Any class of spots that run in a unique time period, with a unique rotation or having different rights attached to it (e.g. different levels of preemptibility, different make-good rights, etc.), has a different lowest unit rate.
One question on which we’ve written many times before, is one that still comes up with surprising regularity – that is whether these rates apply to state and local candidates, as well as Federal candidates. Indeed they do – so if your station is running advertising for candidates for mayor or city council; or for governor or the state senate; or even for the board of education, municipal court judge, or state attorney general – they and any other candidate in any public election gets lowest unit rates. See our past articles on this topic here and here.
In this season where PACs, Super PACs and other non-candidate interest groups are buying much political advertising time, broadcasters need to remember that these spots don’t require lowest unit rates. Stations can charge these advertisers anything that the station wants – no need to stick to lowest unit rates.
We are hearing that stations are facing the one exception to the above paragraph, where political parties are requesting lowest unit charges. In some cases, parties may in fact be entitled to these rates – but only where they are using specific types of donations subject to political campaign limitations, and where the advertising purchases are authorized and “coordinated” with a candidate (and, in Federal races, where the spots make that coordination clear with the “I approved this message tag”). Not all party spots are entitled to this treatment – only this special class of coordinated expenditures – and stations are entitled to get written confirmation from the party or the candidate that the expenditures are coordinated under the election laws. If not coordinated, the parties get charged the same as any other third-party organization.
Various advertising sales packages, and how they are factored into lowest unit rate calculations, also seem to lead to many questions by broadcasters. Candidates cannot be forced to buy packages on stations to get low unit rates. Instead, the package must be broken down by the station into a price per spot. That is done by allocating the package price to the various spots of each class that are contained in the package. Then the allocated rates, on a unit basis, are compared to other spots of the same class that have been sold on the station to determine if the spots from this package have any impact on the station’s lowest unit rates. This allocation is done in an internal station record, which does not need to go into the file, and does not need to be revealed to the candidate. Other than the station, only the FCC will see it should they do some sort of inspection. We wrote more about this process of allocating spots in a package here.
And these are just some of the myriad issues that arise in computing lowest unit rates. Stations need to be familiar with these rules, and apply them accurately through the remainder of the lowest unit rate window. Watch for our next installment on political broadcasting basics – when we write about equal opportunities.