It’s election season, and for the 60 days before any general election, broadcast stations are required to charge political candidates the “lowest unit rate” for comparable advertising time that runs on their stations. That means that, for each class of advertising time on any particular station, the candidate can only be charged the lowest
From time to time, questions come up as to whether it is acceptable for broadcast stations to air ads from a political candidate which do not feature the voice or, for TV, the image, of the candidate. Ads from Federal candidates should almost never be missing the recognizable voice or image, as there are Federal Election Commission rules that specifically put the requirement on the candidate to appear on the spots in the “Stand By Your Ad” disclaimer (“I’m John Smith and I approved this message”). But sometimes ads from state or local candidates, in states where the Federal requirements have not been extended to local elections by the state legislature, may be missing the voice or image of the candidate. What are the implications for stations in airing such ads?
The most important implication is in the potential liability of the station for the content of the political ad. When an ad is a “use” by a candidate, the station cannot censor its content. It must be run as it is delivered to the station. Because a station cannot censor the ad, the station has no liability for the contents of the ad. So if the candidate defames his or her opponent, or violates copyright law, the station cannot be held liable for the content of the ad. We have written many times about this “no censorship” rule. As we wrote here, that rule (and virtually all of the political rules but for reasonable access) applies to state and local candidates just as it does to Federal candidates. …
While many broadcasters’ thoughts are on holiday celebrations, the political process leading to the 2016 elections marches on. Last week, Bobby Baker, the head of the FCC’s Office of Political Programming and I conducted a webinar for broadcasters in 16 states on the legal issues that need to be considered in connection with the upcoming political season. The slides from that presentation are available here.
The week before last, I wrote about some of the issues that broadcasters should already be considering in connection with the 2016 election. With Lowest Unit Charge windows either open or to open this month in Iowa and New Hampshire, and windows opening in South Carolina and Nevada in the first week in January, stations need to be paying attention to their political obligations. Even though political windows are not yet open in other states, stations in these other states nevertheless need to pay attention to their political obligations. As I explained in the webinar, those windows apply only to Lowest Unit Rates. All other political obligations, including reasonable access for Federal candidates, equal opportunities, and the no censorship provisions of the rules apply once you have legally qualified candidates – not just during political windows. See our article here and here on that subject.…
With the broadcast and cable news (and the monologs of TV talk show hosts) already dominated by discussions of the 2016 elections, broadcasters thoughts may be turning to that election and the expected flood of money that may come into the political process. We are, after all, only two months away from the first ballots in Iowa and New Hampshire. But dreams of big political spending should not be distracting broadcasters from thinking about their political broadcasting obligations under FCC rules and the Communications Act, and from making plans for compliance with those rules. I’ve already conducted one seminar on political broadcasting obligations with the head of the FCC’s Office of Political Broadcasting, several months ago, for the Iowa Broadcasters Association, and we will be doing another, a webcast for about 20 state broadcast associations on December 17 (hosted by the Michigan Broadcasters, see their announcement here). Check with your state broadcast association to see if they are participating in the webcast, as we should be covering many of the political broadcasting legal issues of importance to broadcasters.
Stations in Iowa have been receiving buys from Presidential candidates and PACs and other third-party groups since this past summer, and that spending is sure to increase in these last few weeks before the 2016 start of the primaries and caucuses. What should stations in Iowa and in other states be thinking about now to get ready for the 2016 elections?…
In a Public Notice issued yesterday, the FCC asked for comments from the public on whether broadcast stations should be able to enforce “Last In, First Out” (“LIFO”) pricing against political candidates in election races. During the 45 days before a primary election or the 60 days before a general election, for advertising buys by a political candidate’s authorized campaign committee, a station cannot charge more than the lowest price charged to the station’s best commercial advertiser for that same class of advertising time. What the Commission asks in its Public Notice is whether the practice of stations of deciding that particular classes of advertising time are effectively sold out discriminates against candidates – as candidates routinely buy their advertising time late in an election cycle. These issues come up often, particularly late in any political window as demands on the advertising inventory of stations can become very tight as an election approaches.
So what does this petition ask? First, let’s take a step back and look at how lowest unit charges work in broadcast (and cable) political advertising. An easy example would be where a candidate wants to buy a fixed position advertisement on a radio station during its morning drive program. For that ad, a candidate can be charged no more than the lowest price that the station charged to any commercial advertiser for a similar fixed-position spot that runs in that same time period. Different classes of time have different lowest unit rates. That means that, in that same morning drive program, there might be a lowest rate for these fixed position adverting spots that are guaranteed to run at the time that they are scheduled, but a lower price for spots that can be preempted by higher priced spots. If there are different make-good rights associated with a class of preemptible time (e.g. one type of spot must be “made-good” by the station within a week if it is preempted, while another might just need to be made-good within the next month), both of those classes could have different lowest rates. See more about lowest unit rate here and here. …
With the lowest unit charge window for the November elections kicking into effect tomorrow (September 5), we thought that it was a good idea to review the basics FCC rules and policies affecting those charges. With each election seemingly breaking spending records from prior cycles, your station needs to be ready to comply with all of the FCC’s political advertising 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 for a spot that is then running on the station in any class of advertising time. 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 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 – one lowest unit rate for each class of time. 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. Each of these time periods with differing rates is a class of time that has its own lowest unit rate. On television stations, there are often classes based not only on daypart, but on the individual program. Similarly, if a station sells different rotations, 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, and both are a different class 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.), will have a different lowest unit rate.…
A new month in a new year, and a number of new regulatory dates are upon us for broadcasters – and important dates for webcasters also fall in this month. So now that the holidays are quickly becoming just a foggy memory, it is time to sharply focus on those regulatory obligations that you have to avoid legal issues as the year moves forward. January 10 brings one deadline for all broadcast stations – it is a date by which your Quarterly Issues Programs lists, setting out the most important issues that faced your community in the last quarter of 2013 and the programs that you broadcast to address those issues, need to be placed in the physical public inspection file of radio stations, and the online public file of TV broadcasters.
Full power TV and Class A TV stations by January 10 also need to have filed with the FCC their FCC Form 398 Children’s Television Reports, addressing the educational and informational programming directed to children that they broadcast. Also, by that same date, they need to upload to their online public files records showing compliance with the limits on commercials during programming directed to children.…
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.
At its meeting today, the FCC voted to require that television stations maintain most of their public inspection files online, in a database to be created by the FCC (see the FCC’s Public Notice here). While the details about this obligation have not yet been released, from the comments at the FCC meeting, much is already evident. All TV stations will have to post their files to an online server to be maintained by the FCC. Proposals for new obligations to post information about sponsorship identification and shared services agreements have been dropped, at least for now. Most documents not already online at the FCC will need to be uploaded within 6 months of the rule becoming effective. And, in the most controversial action, broadcaster’s political files will need to be posted to the new online database, though in a process that is to be phased in over time.
The political file obligation will apply at first only to affiliates of the Top 4 TV networks in the Top 50 markets. And only new information for the political file will need to be posted. Information in the file before the effective date of the order apparently will not need to be posted online, at least not initially. The requirement for posting the political file online will be reviewed in a proceeding to begin one year after the effective date of the new rules. As stations outside the Top 50 markets, and other stations in those large markets, will not need to comply with the political file obligations until July 2014, the FCC will be able to reexamine the impact of the disclosure obligations before the compliance obligation for the political file expands to all stations.
While the off-year elections of 2011 are not yet history, the Lowest Unit Rate period for the 2012 Presidential election will soon be upon many stations in the early primary and caucus states. Last week, Bobby Baker, the head of the FCC’s Office of Political Programming, and I conducted a webinar for 13 state broadcast associations to provide a refresher on the political broadcasting obligations of broadcasters. The webinar covered all the basics of the political broadcasting rules – including reasonable access, equal opportunities, lowest unit rates, the public file and sponsorship ID obligations, and the issues of potential liability of broadcasters for political advertising not bought by candidates but by PACs, unions and other interest groups. PowerPoint slides from the presentation are available here, and the video of the presentation can be accessed here by members of the state associations that were involved. Additional information about the FCC’s political broadcasting rules can be found in our Davis Wright Tremaine Guide to Political Broadcasting.
One particular issue came up in the webinar that warrants additional discussion and clarification. Rate issues are always the most difficult to explain, and the questions concerning package rates are among the most confusing. The FCC has said that stations cannot force a candidate to purchase a package of spots containing multiple ads of different classes. Instead, stations must break up the price of packages into their constituent spots and, if the package spots are running during a Lowest Unit Charge period (45 days before a primary or Presidential caucus or 60 days before a general election), determine if the spots in that package affect the lowest unit rates of the classes of time represented by advertising spots contained in the package. For instance, if you sell a package of 10 morning drive spots with a bonus of 2 overnight spots on your radio station for $100, you need to break up the package price and allocate it to the spots from the two classes of time in the package – the morning drive and the overnight spots. So some of that $100 package price gets applied to the 10 morning drive spots (say, for example, $96) and the rest (for example, $4) is assigned as the value of the 2 overnight spots. Thus, in this package using this allocation, the unit rate for morning drive spots would be $9.60, and the unit rate for overnights would be $2. You then take these rates, and see if you have sold spots for these classes of advertising time at lower rates. If so, the package has no effect on your LUR. If not, the spots in the package may reduce the LUR for one or both classes of time. In such cases, the determination of which classes’ LUC will be lowered may be affected by the allocation of the package price that you make.