While most of us are enjoying our 4^th of July holidays, we thought it important to publish this article, stemming from a Supreme Court decision last week, right away as broadcasters in many states are or soon will be dealing with the issues it discusses.  Enjoy the holiday, but be sure to consider these issues as soon as you return to work. 

It is unusual for Supreme Court decisions to have a direct day-to-day impact on regulations affecting broadcasters.  But this past week, there were not one but two cases that are likely to have such a direct impact.  One was the case confirming the President’s virtually unfettered power to fire Commissioners at agencies such as the FCC, the impact of which we plan to write about next week.  The second was the decision allowing political parties to coordinate spending with their candidates – a decision that, unless pending challenges to a recent FCC Media Bureau Notice are successful, will likely bring far more political spending under the “lowest unit rate” (aka lowest unit charge) obligations of broadcasters.  Because this change could have a significant effect on the bottom line of broadcasters in states with competitive federal political races, and as many questions remain unanswered about the FCC’s Notice, we need to look closely at the issues that arise from the interplay of the Media Bureau Notice and the Court’s decision.

The FCC Public Notice was released in March and purported to simply remind broadcasters about their lowest unit rate obligations to political candidates in the 45 days before a primary and the 60 days before a general election.  But, in giving that reminder, it set out two policies that had never before been articulated by the FCC.  While Section 315 of the Communications Act says that lowest unit rates apply only to candidates, the Notice says that the LUC rates in fact apply to other political committees when the ads are “authorized” by the candidate.  The Notice also says that joint fundraising committees and ads by political parties, when authorized by candidates, are also entitled to LUC.  In reaching this decision, the Media Bureau relies on the Federal Election Commission’s definitions of authorized committees, concluding without discussion that once a committee is authorized under FEC rules, it is entitled to LUC even though the committee is not the “candidate” – and even though Section 315 limits LUC rights to “candidates,” not authorized committees as defined by the FEC.  How did the Bureau reach this decision?

The Bureau looked to the language of Section 315(b)(2) of the Act, and specifically at subparagraph (F) which defines “authorized committee” through reference to the FEC rules.  The Bureau did analyze in detail how “authorized committee” is used in the rest of Section 315.  That phrase is not used in Section 315(b)(1), which defines who is entitled to lowest unit rates – that section referring only to uses “by any person who is a legally qualified candidate.”  It says nothing about authorized committees being subject to those rules.  The phrase “authorized committee” is only used in two places – (1) saying that the certification that federal candidates must give stations to be entitled to lowest unit rates (certifying that, if their ad mentions an opposing candidate, they will use the stand-by-your ad tag – I’m John Smith and I approved this message) can be provided to stations either by the candidate or by their authorized committee, and (2) in saying that TV sponsorship identification announcements must say that the candidate’s authorized committee paid for the ad (curiously, the statute’s sponsorship identification language on radio ads does not mention authorized committees at all). 

When one looks at the FEC rules on what is an “authorized committee,” the language of those rules says that the candidate’s own committee is generally to be considered the authorized committee of the candidate.  Political parties are not listed as being authorized committees, other than in the limited case where a Presidential candidate names the party as being that candidate’s authorized (obviously, a situation not in play in 2026 mid-term elections).  The Public Notice does not claim that the FEC rules say otherwise, but instead simply says that uncited past Commission precedent says that parties are entitled to LUC when their spending can be coordinated with the federal candidate.  It is interesting to note that this Administration, through the brief of the Department of Justice supporting the rights of parties to coordinate with their candidates, made a passing reference to LUC rates and said that, in the DOJ’s opinion, that coordination did not necessarily mean that parties would get LUC.  The DOJ reference was not cited in the Bureau’s Public Notice.

But the Public Notice’s conclusion that coordinated buys are subject to LUC takes on new significance now that the Supreme Court has announced that all spending of party money can be coordinated with federal candidates.  As individual donations to candidates are limited to a few thousand dollars, and contributions to parties are not so limited, it is anticipated that substantial additional spending will flow through parties to candidate-authorized and coordinated ads that are, according to the FCC’s Public Notice, subject to LUC. 

The Bureau’s Public Notice ignored several important questions raised by its treatment of party ads and those from joint fundraising committees.  One is the question of how this extension of LUC applies to the other political rules that govern the treatment of ads in an election season.  For instance, as we have written extensively before (see, for instance, our articles here, here, and here), broadcasters “have no power of censorship” when a legally qualified candidate uses a station.  Because broadcasters cannot censor a candidate ad, the broadcaster (under Supreme Court precedent) has no liability for the content of the ad.  The language prohibiting censorship of candidate uses is in Section 315(a) of the Act, not Section 315(b) where authorized committees are defined “for purposes of this paragraph” (as opposed to “for purposes of this section” which might extend the definition to other parts of Section 315).  Section 315(a) makes no mention of uses by “authorized committees” or political parties.  So, broadcasters are left to wonder if an ad bought by a party in coordination with a candidate is covered by the no censorship provision.  Is the act of coordination sufficient to make the ad a “use” by a candidate?  Perhaps, but that question has not been addressed.

Similarly, federal candidates are entitled to a right of reasonable access to commercial broadcast stations (see our articles here and here) – meaning that stations cannot refuse to sell advertising time to these candidates.  But that right is not in Section 315 at all, but it is instead set out in Section 312 of the Communications Act.  Of course, the language setting out the right of reasonable access makes no mention of political parties or authorized committees – only candidates.  So, do broadcasters have an obligation to provide reasonable access to political parties even when those parties are coordinating their spending with candidates?  Again, the Public Notice is silent.

Will we get clarification of these ambiguities?  There is an application for review pending which asks the full Commission to review the Public Notice.  That request was filed by several Democratic political candidates (the Democrats have generally opposed the extension of LUC to anyone other than to candidates, and they also opposed the Supreme Court petition seeking the right of political parties to coordinate with their candidates, while Republicans have sought the broader participation of parties in this process.  This is because Democratic candidates have generally been more successful in fundraising from individuals contributing directly to candidates, while Republicans have been more successful with big-money donors to political parties). 

The same Democratic candidates have also asked the US Court of Appeals for the Fourth Circuit to reverse the impact of the Public Notice.  They have requested expedited consideration by the appeals court given how close we are to the election and the period in which LUC will apply to ads for that election.  The Court ordered expedited briefing of the issues – with the brief of the parties seeking review due on July 6, the FCC due to respond by July 20, and a final reply brief from the petitioners on July 27.  An oral argument will follow.  The FCC has already filed papers with the Court asking that the case be dismissed, as it is usually the case that the full Commission must rule on a matter before it can be taken to Court and, as the application for review of the Media Bureau decision is still pending, the full Commission has not yet ruled.  Thus far, the Democratic filings have concentrated on the question of whether anyone but a candidate is entitled to LUC – not the related issues of no censorship and reasonable access. 

What’s a broadcaster to do other than hope that there is some further clarification of these issues in the near future?  Right now, the Public Notice is the only official document that we have that purports to reflect how this FCC administration views the extent of the LUC obligations.  So, it appears that a broadcaster is either going to follow that advice and give coordinated buys by political parties LUC or risk adverse consequences from the FCC if a complaint is filed when the broadcaster ignores the Public Notice.  If there were adverse FCC consequences, there would be the opportunity to appeal any penalty (but that can be a long and costly process with uncertain results).  Given the issues and risks involved, broadcasters need to be consulting with their legal counsel to get advice on all aspects of these issues and how to deal with them.

But, with the confluence of the Public Notice and the Supreme Court decision, it appears that more money will be flowing into political races at lower prices if political parties coordinating with their candidates demand LUC during the political windows.  How much of a difference will this make in political ad buying?  In many swing states, in recent years, we have seen so much demand on TV station advertising inventory that it seems hard to believe that any more ads can be purchased, as there simply is not the inventory to allow for additional ads.  Will that mean broadcasters will just receive less money for the inventory that they do sell?  In some cases, that will no doubt happen.  In some cases, we may even see fewer ads as duplicative ads are culled.  We have seen many TV station ad breaks in the weeks before election day in competitive states filled with political ads – many times containing multiple ads for the same candidate, one from the party or some third-party group, and one from the candidate themselves.  In a universe where the parties can coordinate with their candidates on ad buys, perhaps some of these duplicative ads will be eliminated.  We have also seen in recent years the rise of political ads on digital platforms including various digital television services begin to siphon off broadcast spending.  Perhaps, if less is spent on TV broadcast ads, more will flow into these services, or perhaps into radio which has rarely had the inventory issues of TV. 

In many states where primaries have already passed, this will not be a significant issue until early September when the LUC window opens for the November election.  Perhaps we will have some greater clarity on the issues by then.  But discuss these issues with your lawyers now to be sure that you are ready for the ad political ad spending in your market in the coming election.