Last year, Congress considered limits on direct to consumer (DTC) prescription drug advertising (about which we wrote here), but this effort stalled. A recent letter from two Congressional leaders of the Energy and Commerce Committee suggest that Congress is looking at these issues once again. This advertising has become important to television networks, and to drug
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.
As the dates for the first Presidential primaries draw near, more and more stories appear in the press about attack ads growing in importance. These ads are coming both from the candidates themselves trying to draw distinctions with their opponents, and from third party, supposedly independent, groups either attacking or supporting one of the candidates. See, for instance, the recent story in the Washington Post on the increase in third party ads. These ads have raised political issues on the campaign trail as to whether negative campaigns work, and as to how independent of the candidates the third party expenditures really are. They also raise legal issues for broadcasters. Whenever there are attack ads that are run on a broadcast station, there are complaints from the candidate being attacked about how unfair the criticism is. Broadcasters have to deal with these complaints, and the sponsor of the ads makes a huge difference in the broadcaster’s responsibilities to check the truth of the statements made. As we explain in our Political Broadcasting Guide, broadcasters may not censor the content of a candidate ad, and thus are exempt from any liability for the content of that ad. But attacks contained in third party ads may require the broadcaster to do some investigation into the claims being made to make sure that they avoid legal liabilities.
For ads run by a candidate or his or her authorized committee, the Communications Act forbids a broadcaster (or cable company that chooses to sell time to political candidates) from censoring the candidate’s message. Because of the no censorship rule, the Courts have ruled that broadcasters are immune from any sort of liability for defamation that may arise from the content of the ad. Thus, broadcasters cannot reject a candidate’s message based on its content (with the possible exception of cases where that content would violate a criminal law, as opposed to just creating some civil liability), and need not take any action in response to a complaint by an opposing candidate that the ad contains incorrect or distorted information.
The New York Times recently published an article about NBC’s owned and operated station in New York City acceptance of advertising for liquor. While ads for beer and wine have been a staple on broadcast stations (though see our discussion of the limits on that advertising, here), ads for other alcoholic beverages ads have been less frequent. Many broadcasters have for years believed that such ads were prohibited by the FCC or some other government agency. In fact, alcohol ads have not been prohibited by law, but instead by voluntary actions of trade associations representing broadcasters and the alcoholic beverage industry .
Until the early 1980s, the National Association of Broadcasters had a voluntary code of conduct for broadcasters, suggesting good standards and practices for broadcasters: limiting some broadcast content while encouraging broadcasters to air other programming perceived to be in the public interest. Among the conduct that the Code prohibited was the advertising of hard liquor. While the NAB Code was not mandatory for broadcasters, in filing many routine applications for new stations and for the acquisition of existing stations, the FCC in the past had requirements that the potential broadcasters explain how their programming would serve the public interest. Most applicants would shorthand their compliance plans by simply promising to abide by the NAB code, in effect binding themselves to the code through those representations made to the FCC. The Code was in place until the early 1980s, when the Department of Justice became concerned that code provisions suggesting maximum commercial loads and similar matters functioned as a restraint of trade in violation of the antitrust laws, and the NAB Code was abandoned.
At last Thursday’s Public Hearing on multiple ownership in Chicago, about which we wrote here, a statement was read by a spokesman for Presidential candidate Barack Obama. According to press reports, the statement expressed the candidate’s positions favoring shorter license renewal terms for broadcasters so that they would be subject to more public scrutiny, as well as criticizing the FCC for allowing broadcast consolidation. These thoughts essentially echo the comments of FCC Commissioner Copps, especially on the subject of license renewal terms, whose views we wrote about here. While many press reports have asked if this statement by Senator Obama foreshadows the broadcast ownership debate becoming part of the presidential campaign issues, we worry that it may signal a far broader attack on broadcasters during the upcoming political year. The statement by Senator Obama is but one of a host of indications that broadcasters may face a rash of legislative issues that are now on the political drawing boards.
Broadcasters make easy targets for politicians as everyone is an expert on radio and television – after all, virtually everyone watches TV or listens to the radio and thus fancies themselves knowledgeable of what is good and bad for the public. But those in Congress (and on the FCC) have the ability to do something about it. And, with an election year upon us, they have the added incentive to act, given that any action is bound to generate at least some publicity and, for some, this may be their last opportunity to enact legislation that they feel important. We’ve already written about the renewed emphasis, just last week, on passing legislation to overturn the Second Circuit’s decision throwing out the FCC’s fines on "fleeting expletives" and making the unanticipated use of one of those "dirty words" subject again to FCC indecency fines. Clearly, no Congressman wants to be seen as being in favor of indecency (look at the rise in the indecency fines to $325,000 per occurrence which was voted through Congress just before the last election), and First Amendment issues are much more nuanced and difficult to explain to the voter, so watch this legislation.