On November 10, Davis Wright Tremaine’s David Oxenford and Bobby Baker, the head of the FCC’s Office of Political Broadcasting, conducted a webinar on the FCC’s political broadcasting rules and policies. The webinar originated from Lansing, Michigan, before an audience of Michigan Broadcasters, and was webcast to broadcasters in 13 other states. Topics discussed included reasonable
A story in today’s Wall Street Journal discusses the significant amount of money being spent on television advertising for and against pending proposals for health care reform. As we have written before, broadcasters are required to keep in their public file information about advertising dealing with Federal issues – records as detailed as those kept for political candidates. Information in the file should include not only the sponsor of the ad, but also when the spots are scheduled to run (and, after the fact, when they did in fact run), the class of time purchased, and the price paid for the advertising. Clearly, the health care issue is a Federal issue, as it is being considered by the US Congress in Washington. So remember to keep your public file up to date with this required information.
Section 315 of the Communications Act deals with these issues, stating that these records must be kept for any request to purchase time on a "political matter of national importance", which is defined as any matter relating to a candidate or Federal election or "a national legislative issue of public importance." Clearly, health care would fit in that definition. The specific information to be kept in the file includes:
- If the request to purchase time is accepted or rejected
- Dates on which the ad is run
- The rates charged by the station
- Class of time purchased
- The issue to which the ad refers
- The name of the purchaser of the advertising time including:
- The name, address and phone number of a contact person
- A list of the chief executive officers or members of the executive committee or board of directors of the sponsoring organization.
A recent stir was created when a Midwestern television company was reported to have signed a contract with a state government agency, promising to market the agency and its programs throughout the state. This promotion was to include a segment in the company’s televised news promoting the effects of the work of the agency. Questions were immediately raised about whether this was prohibited by FCC rules. But, when the news pieces ran, the company was very careful to state after these segments that they were sponsored by the station and the state agency. As the FCC has no rules about what can be included in the "news" (and probably could not consistent with the First Amendment), the only real issue was one of sponsorship identification. As the licensee did here, if the sponsor of the story is identified, making clear to the public who was attempting to persuade them on the issue addressed, there should be no FCC issues.
This is different from the issues that have arisen previously at the FCC, where there have been fines levied against television stations and cable systems for airing programming that was sponsored, but for which no sponsorship identification was provided (see our posts here and here). This includes the video news release or VNR issues, where the FCC has fined stations for using news actualities provided by groups with a financial interest in the issue that was being addressed, but without identifying the fact that the material was provided by the interested parties. Where a program addresses a controversial issue of public importance, the disclosure rules are more strict, requiring that the station not only disclose that it received money to air a story – but to also disclose anything that it got from the interested party – including tapes or scripts.
We’re not even in what most would consider election season – except for the two states with off-year governor’s contests and those other states with various state and municipal elections. Yet political ads are running on broadcast stations across the country. Republican groups have announced plans to run ads attacking certain Democratic Congressmen who are perceived as vulnerable, while certain Democratic interest groups have run ads about the positions of Republicans on the Obama stimulus package and the President’s proposed budget. In addition to these ads targeting specific potential candidates, there are issue ads running across the country on various issues pending before Congress, or likely to be considered by Congress in the near term. These ads often have a tag line “write or call your Congressman and tell him to vote No” on whatever bill is being discussed. While these are not ads for political candidates that require lowest unit rates or specific equal opportunities, they do give rise to political file issues. Stations need to remember to observe these requirements and put the required information into their public file to avoid FCC issues.
Under provisions of the Bipartisan Campaign Reform Act, when a station runs an ad addressing a “Federal issue”, the station must keep in its public file essentially all the same information about the ad that it would maintain for a candidate ad. The station must identify the spot and the schedule that its sponsor has purchased, the identify of the sponsor (name, address and list of principal executive officers or directors), the class of time purchased, and the price paid for the ads. Federal issues are ones that deal with a Federal election or with any issue to be considered by Congress or any Federal government agency.
Last week, the FCC issued several fines to noncommercial broadcasters who had underwriting announcements that sounded too commercial. In these decisions, the Commission found that the stations had broadcast promotional announcements for commercial businesses – and those announcements did not conform to the FCC’s rules requiring that announcements acknowledging contributions to noncommercial stations cannot contain qualitative claims about the sponsor, nor can they contain "calls to action" suggesting that listeners patronize the sponsor. These cases also raised an interesting issue in that the promotional announcements that exceeded FCC limits were not in programming produced by the station, but instead in programs produced by outside parties who received the compensation that led to the announcement. The FCC found that there was liability for the spots that were too promotional even though the station itself had received no compensation for the airing of that spot.
The rules for underwriting announcements on noncommercial stations (including Low Power FM stations) limit these announcements to ones that identify sponsors, but do not overtly promote their businesses. Underwriting announcements can identify the sponsor, say what the business of the sponsor is, and give a location (seemingly including a website address). But the announcements cannot do anything that would specifically encourage patronage of the sponsor’s business. They cannot contain a "call to action" (e.g. they cannot say "visit Joe’s hardware on Main Street" or "Call Mary’s Insurance Company today"). They cannot contain any qualitative statements about the sponsors products or services (e.g. they cannot say "delicious food", "the best service", or "a friendly and knowledgeable staff" ). The underwriting announcements cannot contain price information about products sold by a sponsor. In one of the cases decided this week, the Commission also stated that the announcements cannot be too long, as that in and of itself makes the spot seem overly promotional and was more than was necessary to identify the sponsor and the business that the sponsor was in. The spot that was criticized was approximately 60 seconds in length.
According to numerous press articles, including this one in Multichannel News, the FCC has begun an investigation into several commentators on TV news programs to see if they were receiving payments or other consideration for presenting a particular viewpoint on military issues on which they were interviewed. According to press reports, the FCC has…
Failing to meet the obligations set out under the law for required sponsorship identification on Federal political ads could, theoretically, cost candidates significant amounts of money – if stations decide to hold the candidates to the letter of the law. Under the terms of the Bipartisan Campaign Reform Act (“BCRA”), Federal candidates airing television commercials that refer to a competing candidate must specifically state, in the candidate’s own voice, that he or she has approved the ad, while a full-screen image of the candidate appears on the screen. In addition, the name of the sponsoring candidate’s campaign committee must appear in text on the screen for at least 4 seconds at 4 percent of screen height, with sufficient color contrast to make the text readable. If the proper identification is not contained in an ad, the candidates forfeit their right to lowest unit rates for the entire pre-election period (45 days before a primary or 60 days before an election), even with respect to future ads that comply with the rules. In recent days, representatives of Democratic Congressional candidates have reportedly filed complaints that argue that Republican competitors have not complied with the rules in several cases, as their written disclosures did not air for the full four seconds. The challengers argue that television stations must take away LUR for these candidates. While the statute say that the candidates forfeit their rights to such rates, the law is unclear as to whether stations are obligated to deny that rate to candidates after the right has been forfeited – and these cases could resolve this issue.
Television stations undeniably have the power to charge full rates to candidates whose ads have not complied with the requirements of the campaign statute. However, many stations have been reluctant to do so for minor infractions such as the ones identified in this complaint. Why wouldn’t television stations want to charge more money? For several reasons. First, denying one candidate lowest unit rates will no doubt trigger a fly-specking of every commercial by the competitor who filed the complaint against the first candidate, to try to trigger a forfeiture of the second candidate’s right to Lowest Unit Rates, and adjudicating such complaints will no doubt make the station’s political sales process much more difficult and costly to administer. In addition, there is the question of whether, for a minor violation, a station really wants to give the other candidate a political advantage – especially if the candidate who gets charged more more wins the election and gets to vote on laws that may effect business in the future. But can stations legally continue to charge the lowest unit rate even when a candidate has not complied with the legal requirements for sponsorship identification?
The American Issues Project has recently started running a controversial new television ad attacking Barrack Obama for his connections to former Weather Underground figure William Ayers. The text of the ad is reported here. While reportedly some cable outlets (including Fox News) have refused to air the ad, numerous broadcast stations are also wondering what the legal implications of running the ad may be. We have already seen many other attack ads being run by third-party groups – including political parties, long-standing activist groups like Move On.org, as well as from new organizations like American Issues Project which have seemingly been formed recently. As the use of such ads will no doubt increase as we get closer to the November election, it is important that broadcasters understand the issues that may arise in connection with such ads under various laws dealing with political broadcasting. Legal issues that must be considered arise not only under FCC rules, but also potentially in civil courts for liability that may arise from the content of the ad. Broadcast stations are under no obligation to run ads by third party groups, and stations have a full right to reject those ads based on their content. This is in contrast to ads by Federal candidates, who have a right of reasonable access to all broadcast stations, and whose ads cannot be censored by the stations. As a candidate’s ad cannot be censored, the station has no liability for its contents. In contrast, as the station has the full discretion as to whether or not it will run a third-party ad, it could have liability for defamation or other liabilities that might arise from the content of such ads that it decides to accept and put on the air.
The standards for proving defamation (libel and slander) of a public figure are high, but if the ad does contain some clearly false statements, the standard could in fact be met. Basically, to have liability, the station needs to run an ad containing a false statement either knowing that the ad is untrue or with "reckless disregard" for the truthfulness of the statements made. This is referred to as the "malice standard." Essentially, once a station is put on notice that the ad may be untrue (usually by a letter from the candidate being attacked, or from their lawyers), the station needs to do their own fact checking to satisfy themselves that there is a basis for the claims made or, theoretically, the station could itself be subject to liability for defamation if the claims prove to be untrue. A few years ago, some TV stations in Texas ended up having to pay a candidate because they ran an ad by an attack group that was shown to contain false statements, and the ad was run even after the candidate complained that the statements were untrue. These determinations are often difficult to make as the ad’s creators usually have hundreds of pages of documentation that they say supports their claims, while the person being attacked usually has documentation to refute the claims. Thus, the determination as to whether or not to run the ad is a decision that each station needs to make after consultation with their lawyers, and after careful review of the spot and the backing documentation.
The Federal Election Commission ruled recently that it would not grant a waiver of the requirements for a verbal sponsorship identification on ads by an interest group, the Club for Growth, which wanted to run 10 and 15 second commercials opposing Federal candidates for Congress. Because of the abbreviated length of the commercials, the organization wanted the…
Last week, the FCC commenced its long anticipated proceeding to reexamine its sponsorship identification rules. This proceeding has been rumored for over six months, having appeared on an agenda for a Commission open meeting in December, only to be pulled from the agenda days before it was to have been voted on. The Commission has initiated this proceeding, to a great degree, at the urging of Commissioner Adelstein who has been vocal in his concerns that the broadcast and advertising industries, in adopting advertising techniques to respond to technological and marketplace changes, has been exposing the public to commercial messages without their knowledge. One of the principal practices of concern to the Commission, though not the only one, is embedded advertising (as the Commission refers to product placement and product integration into the dialog and/or plot of a program). While many of the trade press reports have focused on embedded advertising, this proceeding is wide-ranging and important to the broadcast, cable and advertising industries. Comments on the proceeding will be due 60 days after its publication in the Federal Register, with replies 30 days later. We have prepared an Advisory, summarizing the issues raised by the Commission in this proceeding, which can be found here.
According to trade press reports, this proceeding was initially planned as a Notice of Proposed Rulemaking (NPRM), which would have proposed rules which, after public comment, could have been immediately adopted. After significant lobbying from the advertising community, the Notice was released in two parts. First, there is a Notice of Inquiry (NOI), asking a series of questions about the current state of advertising on broadcast and cable outlets, and asking how the Commission should amend its rules to deal with new advertising techniques. Second, the Commission’s announcement contains an NPRM with respect to certain specific items, including proposing to clarify the type of sponsorship identification necessary in television advertising, the extension of the sponsorship identification rules beyond local origination cablecasting to cable network programming, and clarification of the rules with respect to live-read radio commercials. The specifics of the NOI and the NPRM are set forth in our Advisory.