political advertising sponsorship

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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We usually think of the FCC as the agency that sets the details of the broadcast disclosure obligations for political candidate’s TV ads. But the Federal Election Commission has its own rules for political advertising that are binding on the candidates, rather than on the stations. But because these ads run on broadcast stations,

Even though the election is over, political broadcasting issues have not stopped.  Yesterday, the same groups (the Campaign Legal Center, Common Cause, and the Sunlight Foundation) that had previously objected to the sponsorship identification of issue ads funded by PACs with a limited donor base have struck again.  This time, they have filed a complaint with the FCC against a Chicago TV station claiming that it should have identified former New York City mayor Michael Bloomberg as the true sponsor of an ad run by a PAC. That PAC stated on its website that it had been formed by the former mayor and, from its FEC filings, it appears that it was 100% funded by Mr. Bloomberg.

The complaint differs from complaints filed earlier this year about similar ads in that, in this case, the station was given written notice by the Petitioner of the claim that the sponsorship identification should have included Mr. Bloomberg.  In previous cases, no such notice had been given to the station (the lack of such prior notice resulting in the FCC’s rejection of the initial set of complaints filed by this group, see our article here).  In addition, this is the first complaint where it appears that the PAC in question was 100% funded by a single individual.  See, for instance, our article here, where we asked in connection with previous complaints where the PACs in question were not 100% funded by a single individual how a station was supposed to know at what point the individual donor needed to be identified, and when there were a sufficient number of other donors that the identification of the groups as the true sponsor was proper.  Will these factual differences mandate a different result from the FCC?
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Just a month ago, the FCC denied complaints alleging that Washington DC  TV stations had not adequately identified the true sponsor of political ads sponsored by a political action committee.  When that decision came down – denied on procedural grounds by the Commission – we warned that it opened the door to more complaints in the current election cycle.  Sure enough, a new complaint has been filed against one of the same DC stations, contending that in the current election cycle, it should have gone beyond the sponsorship identification of the PAC itself as the sponsor of the ad, and instead identified the sponsor as the individual who contributed the majority of the PAC’s funding. 

The complaint, filed by the Campaign Legal Center, Common Cause and the Sunlight Foundation, the same DC public interest groups that filed the previous complaints, alleges that WJLA-TV failed in identifying the true sponsor of ads by the Next Gen Climate Action Committee as Tom Steyer, the individual who they allege (based on FEC disclosures) provided the majority of the funding for the PAC.  In last month’s decision, the FCC rejected a similar petition about the same PAC, deciding not to pursue the complaint as the station was not directly put on notice of the allegations raised in the complaints before the ads ran.  In the new petition, the petitioners don’t allege that they made any contact with the station to alert the station about their new complaints.  Instead, the complaint alleges that the TV station should have known about the issues because it is the same PAC that was named in last year’s complaint, and the station should have known about the petitioners allegations that the sponsorship tag is incorrect.  But is there a real issue here?
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Get ready for more challenges to issue ads that you may be receiving this election season.  The FCC’s Media Bureau today released a brief decision on the Sunlight Foundation’s complaint petition against two TV stations concerning the proper sponsorship identification for ads by Political Action Committees.  We wrote about those complaints when they were filed back in July, here.  The complaints, arising from elections that took place last year, targeted two PACs that each had single individuals who had donated substantially all of the money that was raised by the PAC.  Sunlight claimed that the stations should have tagged as the true sponsors of the ads the individuals who had provided virtually all of the money for the PACs.  Sunlight alleged that these stations should have known who the true sponsors of the ads were, based on news reports that were run on the stations talking about the individuals who had funded the PACs.  Instead, the stations had run sponsorship identifications identifying only the PACs as the sponsors of the ads. 

In today’s action, the Bureau dismissed the complaints.  However, the Bureau did not find Sunlight’s allegations to be incorrect.  Instead, the complaints were dismissed because Sunlight never went to the stations to ask that they change the sponsorship identification on the PAC spots during the course of the election.  The Bureau stated that it was using its “prosecutorial discretion” not to pursue these complaints, going so far as to say that the ruling might have been different had the request for a proper identification been made to the stations during the course of the election.
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