While most of us are enjoying our 4^th 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?