The FCC last week released two decisions (here and here) addressing complaints from public interest groups against several TV stations alleging that the stations had not sufficiently disclosed in their online public files sufficient information about political issue advertising.  These decisions, as detailed below, will end up making life significantly more difficult for broadcasters running ads from non-candidate groups, as they will need to review each issue ad to come up with a list all of the issues of public importance discussed in the ad.  A perhaps unintended result may also be that there will be more disclosure in the public file of the cost of non-candidate political ads supporting or attacking state and local candidates when those ads mention Federal issues – as more and more ads dealing with state elections now do.  Watch as the ramifications of these decisions become clear in the coming months.

Background:  These decisions should not strike regular readers of this blog as particularly new, as these complaints were considered by the FCC’s Media Bureau in early 2017, under the former leadership of the FCC (see our article here).  When the new Republican-controlled Commission took over, the Media Bureau decisions were rescinded, as the new Commission felt that these issues should be considered by the Commissioners rather than at the Bureau level.  The decisions that resulted from this additional review come to much the same result as had the Media Bureau decision, though some of the explanations are more detailed.  In making the decision more detailed, the Commission may have made the acceptance of political ads from non-candidate groups even more troublesome for broadcasters than these ads have been in the past.  What do these rulings provide?
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The FCC this week issued a Notice of Apparent Liability proposing a $233,000 fine to Cumulus Media for violations of the sponsorship identification rules.  The fine illustrates not only how seriously the FCC takes its sponsorship identification rules (particularly in the context of political and issue advertising) but also the how aggressively the FCC can act for even the slightest violation of a consent decree involving a prior violation of its rules.  If the FCC catches you once in a rule violation, don’t get caught again for the same violation – and if you agree to the terms of a consent decree in connection with that first violation, by all means abide by the letter of that decree or the FCC will not hesitate to exercise its full enforcement power.

This case involves alleged violations by Cumulus Media.  Three years ago, Cumulus entered into a consent decree with the FCC agreeing to pay a $540,000 penalty after admitting that it did not include a full sponsorship identification disclosure on issue ads supporting government approval of an electrical utility project in New Hampshire (see our article here on that consent decree).  As part of the consent decree, the company agreed to a 3-year compliance program to educate its personnel about the FCC’s sponsorship identification rules, to appoint a compliance officer to oversee compliance with the rules and answer questions, and to report to the FCC within 15 days any violations of these FCC rules.  In the Notice released this week, the FCC alleged that Cumulus reported that it had in two instances aired ads without the proper identification – each set of ads running 13 times before the lack of a proper identification was caught and corrected.  In one instance, the violation was reported to the FCC within two weeks, but in the other case, it was not reported to the FCC for approximately 8 months.  Based on this instance of late reporting, and the 26 sponsorship identification violations, the FCC proposed the $233,000 fine.  How did they come up with that number?
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Earlier this week, the Campaign Legal Center and Issue One, two political “watchdog” organizations, filed FCC complaints against two Georgia TV stations, alleging violations of the rules that govern the documents that need to be placed into a station’s public inspection file regarding political “issue advertising” (see their press release here, with links to the complaints at the bottom of the release). FCC rules require that stations place into their public files information concerning any advertising dealing with controversial issues of public importance including the list of the sponsoring organization’s chief executive officers or directors. Section 315 of the Communications Act requires that, when those issues are “matters of national importance,” the station must put into their public file additional information similar to the information that they include in their file for candidate ads, including the specifics of the schedule for the ads including price information and an identification of the issue to which the ad is directed. The complaints allege that, while the stations included this additional information in their public file, the form that was in the public file stated that the sponsors of the ads did not consider the issues to be ads that addressed a matter of national importance, despite the fact that they addressed candidates involved in the recent highly contested election for an open Congressional seat in the Atlanta suburbs.

Section 315(e)(1)(b) states that an issue of national importance includes any advertising communicating any message directed to “any election to Federal office.” The stations against which the complaints were filed used the NAB form that asks political and issue advertisers to provide the information necessary for the public file, as do many broadcast stations. The FCC does not require that the NAB form be used but, as it is designed to gather the required information, many stations use it. Some simply take the form and place it into their public file with a copy of their advertising order form specifying the rates and advertising schedule and assume that their FCC obligation is complete. But, here, the complaints allege that the advertisers, in response to a question on the form that asks whether the advertising was directed to an issue of national importance, checked the box that said that the ad was not a Federal issue ad despite the fact that the ad addressed candidates or issues involved in the election for the open Congressional seat. The form was apparently then simply put into the public file in that way without additional notation or correction by the station.
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The FCC yesterday released, and trumpeted, a Consent Decree reached with Cumulus Radio for a violation at one of its New Hampshire stations where full sponsorship identification announcements were not made on issue ads promoting an electric company’s construction project in New Hampshire.  In the Consent Decree, Cumulus agreed to pay a $540,000 penalty to the FCC for the violations of the rules – plus it agreed to institute a company-wide compliance program to make sure that similar violations did not occur in the future.  In connection with the fine, the FCC released a press release highlighting the fine and the importance of identifying the true sponsor of issue advertising.  Travis LeBlanc, Chief of the FCC’s Enforcement Bureau stated “While failure to disclose these identities generally misleads the public, it is particularly concerning when consumers are duped into supporting controversial environmental projects.”  This fine is yet another example of the enhanced enforcement of all FCC rules by the new Enforcement Bureau, enforcement that has been controversial both among those being regulated and even among the FCC Commissioners themselves.  What was behind this extreme penalty, which probably dwarfs the profits that this radio station will make for the next several decades?

According to the FCC’s Consent Decree, the Cumulus station broadcast 178 announcements promoting the Northern Pass Project, a proposed hydro-electric project involving the construction of 180 miles of power lines in Canada and New Hampshire.  While the actual texts of the announcements were not provided in the FCC decision, and apparently included several versions of the ad, all supported the approval of the Northern Pass project, but none included the language “paid for” or “sponsored by” Northern Pass Transmission LLC, the full name of the company that paid for the ads and was behind the project.  Cumulus claimed that the station’s employees believed that references in the ads to the Northern Pass project were sufficient to inform the public of who was behind the ads, the FCC says that is not enough – the full name of the sponsor, making clear that it was the sponsor of the ad, is required.  This is not the first time that the FCC has, in the context of the Consent Decree, imposed a big penalty for a lack of a full sponsorship identification on broadcast programming but, outside of the context of “payola” violations, this may well be the largest fine imposed on a radio station for this kind of violation.
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The Campaign Legal Center and Sunlight Foundation filed FCC complaints against 11 major market TV stations across the country alleging that these stations had inadequate online political files.  The Center issued a press release about its filings, stating that these complaints “exposed widespread noncompliance with the disclosure requirements” of the law.  The press release went on to say “[w]ithout this information, viewers are denied important information about the organizations and individuals seeking to influence their vote through these ads.”  While the complaints ask that the FCC take appropriate action against these stations, including fines, and begin an education campaign to make sure that other stations don’t repeat these mistakes as the political file goes online for stations in smaller markets on July 1 (see our article here about the FCC’s reminder about this obligation), just how serious were the discovered deficiencies?  As discussed below, many of the issues raised seem to be minor, but they put stations on high alert that their online public files will be scrutinized and must be kept up to date with the utmost care. 

The complaints themselves (which are available through links in the press release) do not reveal widespread systematic violations of the FCC rules.  Instead, each complaints cites a single instance where the station named in the complaint in some way evidenced some noncompliance with the rules. And many of those instances of noncompliance are quite minor.  In each case, the complaints were about disclosures made about the sponsors of issue advertising.  The ads were from non-candidate groups.  In some cases, the ads named a specific political candidate, and alleged that they had voted the wrong way on some specific issue.  Other ads urged viewers of the station to call that Congressman to tell them to vote in a particular way on some issue of importance pending in Congress.  The complaints did not allege that the public file did not contain the names of the sponsors, or the amount that was spent on the ads, or the times at which the ads were to run.  Instead, the allegations in many of the complaints were that, in a single instance, the public file disclosures identified the candidates who were being attacked, but not the issue on which they were attacked.  Is this a violation of the rules?
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Last week, the FCC Commissioners appeared before Congress for an "oversight hearing." In such hearings, Congressmen often raise many different issues that may be on their mind – everything from issues about the administration of the FCC to detailed policy issues. In the hearing before the Senate Commerce Committee last week, one issue arose that broadcasters should monitor carefully to see what develops. During the course of the hearing, the FCC Commissioners were asked why the FCC had not taken steps to make sure that the sponsors of political advertisements were disclosed on the air. While the FCC rules already require disclosure of the sponsor of any ad, and enhanced disclosure for political ads or other "issue ads" on matters of public importance, what were the Senators after in this line of inquiry? 

It appears that the Senators were asking the FCC to ask for more information about the source of the money used by political action groups to buy television advertising time on election issues – including the money used by PACs, SuperPACs and the other types of advocacy groups that spent so much money in the last election cycle, and are already beginning to run ads in states that have Senate races that are likely to be hotly contested in 2014. What do the FCC rules currently require?


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With the President declaring his candidacy for reelection in 2012, broadcasters thoughts may be turning to that election and the expected flood of money that may come into the political process.  But visions of next year’s elections should not be distracting broadcasters from their current political broadcasting obligations.  I’ve received many calls this year about whether broadcasters need to provide lowest unit rates to candidates in the races that are going on in 2011 – including many municipal elections and some special elections to fill various political posts.  As we have written before, if a station decides to sell time to a political candidate in a local race, that sale must be at the lowest unit charge for the class of time sold during the 45 days before a primary and the 60 days before the general election.  While state and local candidates need not be afforded the "reasonable access" that applies to Federal candidates, that merely means that stations do not need to sell these candidates any advertising time at all, or that stations may limit the purchase by state and local candidates to only the dayparts during which the station has more inventory.  But once the time is sold to one candidate in a race, most other political rules – including lowest unit charges, equal opportunities and the no censorship rule, all apply to the local candidate’s spots.

With the President now filing to become a candidate, and many Republican candidates likely to be filing soon, what obligations are imposed on stations?  For the most part, there is no effect on the rates to be charged to candidates or their campaign committees – those rates only become effective 45 days before the primaries – so the lowest unit charges for Presidential campaigns likely will not kick in until very late this year, or early next, for the early Presidential primaries and caucuses in states like Iowa and New Hampshire. But, as candidates become legally qualified, there will be reasonable access and equal opportunities obligations that will arise.  Candidates for President can request reasonable access to all classes and dayparts – even outside the 45 and 60 day windows before a primary and general election, respectively.  In the case of a Presidential campaign, a candidate becomes legally qualified in all states once he has become legally qualified in 10 states. There may be few Democrats who are to likely to challenge the President, so equal opportunities will most likely be a major issue only on the Republican side.  And, as we’ve written before, the FCC has determined that most interview programs where the content is under station control – even those that have little news value on the normal day – are deemed "news interview programs" exempt from equal time rules.  Thus, equal time is normally only an issue in making sure that all candidates have equal opportunities to buy spot time, and in those rare circumstances where a candidate appears on a purely entertainment program (e.g. as a character on a scripted TV show) or where the candidate is themselves a host of a broadcast program – and usually stations ensure that the candidates are long gone from hosting programs once they formally declare that they are running for a political office


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Many broadcasters, both television and radio, have been running the NAB spots on the Future of Television.  Those spots contain a description of the service available from local television stations and the new technologies that over-the-air television are in the process of deploying, and end with the suggestion that the Future of Broadcast Television lies in "technology not regulation from Washington DC."  Obviously, these ads are geared to address some of the many legislative and administrative issues facing TV broadcasters – including the proposals to take back some of the TV spectrum for wireless broadband uses.  Given that these spots could be arguably be seen as addressing Federal issues, to be safe, they should be identified as issue ads in stations’ public inspection files, and appropriate information about those spots should be placed in the files.

The NAB, in announcing the availability of these spots, suggested this same precaution.  We’ve written before about issue ads, and the need to place notations in the public file about these ads. For instance, when stations ran ads on the broadcast performance royalty, we suggested that same treatment (and proponents of the royalty complained that broadcasters might not be making such notations).  What needs to go in the public file?  As the issues are Federal ones (as opposed to state and local issues that have lesser disclosure obligations), the requirements are similar to those that apply to political candidates. 


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In the last few weeks, I’ve been asked several times by broadcasters whether an ad should be considered an "issue ad."   Usually, the ad in question deals with some sort of faintly controversial issue, and the broadcaster seems torn about how to classify the ad.   In many ways, the answer is almost irrelevant as, other than some public file obligations, whether or not an ad is an issue ad has little practical significance.  Issue ads are not entitled to special rates – lowest unit rates are reserved for candidate ads.  They are not entitled to special placement in broadcast schedules.  As there is no Fairness Doctrine, there isn’t even a requirement that you treat both sides of an issue in the same fashion (except perhaps, where a Fairness obligation may still arise if the issue being discussed is a candidate in an election, when the last remnant of Fairness, the Zapple Doctrine, has not officially been declared dead).  So why worry about whether or not something is an issue ad?

The principal reason is the public file. Commission rules require that the sponsor of an issue ad be identified in a broadcaster’s public file, along with the sponsor’s principal officers or directors.  This is required for any ad dealing with a controversial issue of public importance.  The ad does not need to deal with a political issue, or one to be considered by a government body.  Any controversial issue of public importance merits the public file treatment.  For ads dealing with a "federal issue", one to be considered by the US Congress, any Federal administrative agency or any other branch of the United States government, additional disclosures need to be made in the file (which we have listed before), setting out all the information that you would need to provide with respect to a candidate ad – including the price paid for the ad and the schedule on which the ad will run. 


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