While most of us are enjoying our 4th 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?

Continue Reading More Political Ads at Lowest Unit Rates?  – Supreme Court Allows Candidates and Parties to Coordinate, and an FCC Media Bureau Notice Says Coordinated Ad Buys Should be Given LUC

In the 45 days before a political primary and the 60 days before a general election, ads by political candidates (federal, state, or local) airing on a broadcast station or inserted by a local cable system into the programming it transmits to the public are entitled to “lowest unit rates” (LUR).  That means that candidates get the best rate offered or sold to a commercial advertiser whose ads are of the same class of time and running in the same daypart or on the same program.  This includes getting the benefit of all volume discounts given to commercial advertisers without having to buy in the volume that the commercial advertiser would need to qualify for the discount.  We have written more about the details of some of the issues with computing lowest unit rate (or “lowest unit charge”) many times before (see, for example, our articles here, here, and here). 

In a request for declaratory ruling filed by the Florida Association of Broadcasters, an interesting question has been posed to the FCC – can other political advertisers who buy time during the LUR period be entitled to these low rates if they are “authorized” by the political candidate?  Normally, such non-candidate political ads (usually referred to as issue ads) are charged much higher rates than those charged to candidates.

Continue Reading Are Issue Ads By Non-Candidate Groups Entitled to Lowest Unit Rates Just Because a Candidate Approves the Ad?  The FCC Is Asked for Its Opinion