Editor’s note: On Thursday, November 21, 2019 from 3 – 5 p.m., the MAB will present a live webinar “Preparing for the 2020 Elections” with David Oxenford, Wilkinson Barker Knauer LLP and Bobby Baker, FCC. 2020 is bound to be a very active year for political broadcasting. Who do you have to sell advertising time to? How much can you charge? What paperwork do you need to retain? Who is watching what you do, and what issues are likely to arise in the coming election? These issues and more will be addressed in the webinar. The webinar is free to MAB members. Sign up here.
By: David Oxenford, Wilkinson Barker Knauer LLP
The FCC last week released two decisions (here and here) addressing complaints from public interest groups against several TV stations alleging that the stations had not sufficiently disclosed in their online public files sufficient information about political issue advertising. These decisions, as detailed below, will end up making life significantly more difficult for broadcasters running ads from non-candidate groups, as they will need to review each issue ad to come up with a list all of the issues of public importance discussed in the ad. A perhaps unintended result may also be that there will be more disclosure in the public file of the cost of non-candidate political ads supporting or attacking state and local candidates when those ads mention Federal issues – as more and more ads dealing with state elections now do. Watch as the ramifications of these decisions become clear in the coming months.
Background: These decisions should not strike regular readers of this blog as particularly new, as these complaints were considered by the FCC’s Media Bureau in early 2017, under the former leadership of the FCC (see our article here). When the new Republican-controlled Commission took over, the Media Bureau decisions were rescinded, as the new Commission felt that these issues should be considered by the Commissioners rather than at the Bureau level. The decisions that resulted from this additional review come to much the same result as had the Media Bureau decision, though some of the explanations are more detailed. In making the decision more detailed, the Commission may have made the acceptance of political ads from non-candidate groups even more troublesome for broadcasters than these ads have been in the past. What do these rulings provide?
The decisions set out two principal requirements that had not been clearly articulated in the past. First, the decisions require that broadcasters who accept ads on Federal issues of national importance must list in their public file disclosures about the ads all the Federal issues described by the ad – even if there are multiple issues which the ad discusses. As described in more detail below, this will be true even where the ad is one supporting or attacking a political candidate – if in doing so it also discusses Federal issues. If a third-party ad supports or attacks a candidate and mentions Federal issues, those issues need to be listed in the political file in addition to listing the candidate who is being supported or attacked. Second, the decisions require that the broadcaster, in disclosing the governing board of an organization sponsoring an ad, cannot accept a single name as making up that board without making an additional inquiry of the organization asking if there are in fact more officers or directors than the single person.
Disclosure of Political Matters of National Importance: Let’s look first at the decision requiring the disclosure of all of the issues raised by a third-party ad, and what that may mean for a broadcaster. The decision looks at the requirement that that the Bipartisan Campaign Reform Act back in 2002 added to Section 315 of the Communications Act requiring that, when there is an offer by a non-candidate group made to a broadcaster to buy an ad about Federal issues, the broadcaster must disclose in its public file all the same information that it discloses for a candidate ad (i.e., whether or not the offer was accepted, if accepted the class of time purchased, the schedule of spots that will run, the price paid for the spots and, after the spots run, the exact times at which they aired). In addition, for these issue ads, the public file disclosure must also report on the candidate or issue discussed in the ad. As discussed below in connection with the second aspect of last week’s decisions, there is also a separate requirement for all issue ads (state and Federal) that you provide information in the public file about the sponsoring organization, including the names of its chief executive officers, members of its executive committee, or members of its board of directors. As one of the decisions makes clear, make sure that the disclosure is of the legal name of the sponsoring organization, not just a set of initials that those in the political world might know, but which may be unfamiliar to the public.
Section 315, in discussing the ads that are subject to these requirements, says that disclosure will be required for any ad discussing a “political matter of national importance.” The statute gives three examples of what are considered political matters of national importance: (1) any discussion of any candidate for office; (2) any discussion of any election for a Federal office, and (3) any national legislative issue of public importance. Last week’s decisions made clear that, to trigger the obligation, the candidate who is mentioned needs to be a Federal candidate. The Commission also goes into detail to define a “national legislative issue of public importance” as an issue currently pending in legislation before Congress. The FCC goes into great detail in justifying that interpretation – and then says that even if an issue is not currently pending before Congress, it might still be a “political matter of national importance” that triggers the reporting obligations – as the three categories set out in the statute are illustrative, not definitive. So, the Commission notes, a debate over some tax ruling at the IRS, while not pending before Congress, could still be a political matter of national importance triggering the broadcaster’s disclosure obligation. Seemingly, matters already voted on, like the health care bills, or perennial Federal issues on which there may be no specific legislation pending before Congress (e.g., abortion, gun control, civil rights, etc.) would also trigger these obligations.
The importance of the broad nature of the definition becomes clear when coupled with the newly articulated requirement that all issues discussed in a third-party ad must be disclosed by the broadcaster. That means that the broadcaster needs to review the ad, and make sure that the disclosure documents to be placed in the public file disclose all the issues addressed in the ad. Even if the ad is about a Federal candidate, the disclosure placed into the public file needs to disclose not just the candidate being supported or opposed, but also any issues addressed in the ad. So if the ad attacks a Democratic candidate for Congress by saying he is weak on immigration and wants to raise your taxes, the public file disclosure would have to list the name of the candidate being attacked (and the office the candidate is running for), plus the fact that the ad discussed immigration and taxes. The FCC said that it did not think this would put a great burden on broadcasters – but it does mean that the broadcaster will have to review each ad that runs on its station and make sure that all of the issues are identified. While the Commission seemed to think that this would make disclosure more uniform, as each station running an ad would not pick a different issue to highlight, in fact, this will require many subjective judgments by broadcasters as to what ads are in fact being discussed and whether such issues are political matters of national importance. In talking to lawyers who practice in this area all the time, we are sure that there would be disagreement among us lawyers on how to characterize many issues – and are sure that those whose job is to sell broadcast ads will not have an easier time making such calls than those of us whose job it is to interpret the meaning of FCC rules and governing statutes.
While third-party ads supporting or attacking a state or local candidate do not normally trigger the obligations to disclose all of the price and schedule information, the rulings from last week indicate that there is the real possibility that ads about state and even local candidates could also discuss Federal issues – and would thus trigger obligations to include all the price and schedule information in the file at the same time as it requires the disclosure of the issues discussed. For instance, an ad attacking a candidate for governor who currently serves in Congress because he did not support the President’s pending judicial nominations, or an attack on a candidate because he favors the elimination of a woman’s right to choose, may well be seen as discussions of Federal issues that need to be disclosed, and trigger all of the obligations to disclose price information and scheduling that do not normally attach to third-party ads on state issues.
The difficulty in making these calls can be illustrated by a current ad running on TV in the Washington DC area for a candidate for the Virginia legislature. In it, the candidate attacks his opponent for being in the pocket of the NRA. If this ad had been from a political party or other third-party group and not a candidate, it would be a perfect illustration of the concerns about identifying issues. The ad talks specifically about laws dealing with how close a shooting range can be from residential properties or schools and playgrounds. But it goes on to state that the candidate is not afraid of the NRA and is for common-sense gun regulation. On first glance, that ad seems to be about a state issue – a state legislative election. Thus, no cost and scheduling disclosures would be needed in the public file. But, under last week’s ruling, if it mentions a Federal issue, public file details about price and schedule would be required. To make the determination whether a public file disclosure was required, the station would have to look at the issues and determine if the issues that it mentions – specific gun laws about the distance needed between a gun range and schools and houses, and support by the NRA – are issues of state or federal law. Even if the distance between a shooting range and homes and schools are matters of state law, is there a bigger issue involved – standing up to the NRA – a separate Federal issue? If so, would that make this a Federal issue and require public file disclosure? Who knows? We’ll have to wait to see what the FCC says in the coming months. But even if this case is not one that demands disclosure, there will be many ads dealing with state elections that will also implicate Federal issues – making full disclosure about the purchase details for those ads a requirement.
One interpretation that was helpful from the decision last week was the determination that the mere mention of these issues would not trigger a disclosure requirement, e.g. a car’s dealer mention of a Presidential election day sale would not trigger a disclosure obligation. To trigger the public file obligation, the ad must mention an issue in some political way. That does not simplify the consideration of real issue ads, but it does make clear that the mere mention of an issue or candidate (for instance, on an ad promoting the sale of a newspaper or magazine) does not necessarily trigger the disclosure obligations.
Disclosure of Executive Officers or Directors: The second aspect of the rulings, that stations need to ask about the chief executive officers or the members of the board of directors, or the members of its executive committee, is somewhat more straightforward. The FCC’s new requirement is that the station needs to ask more questions as to whether there are more officers or directors of an organization, when the station receives only one name listed in response to the question on the NAB Form PB-18 or similar documents used by the station asking for the officers or directors of the sponsoring organization. The FCC said that stations can ask the sponsoring organization or the advertising agency whether there are additional members of the governing board of the organization. The important thing under the FCC record is that a station must ask whether there are additional names to disclose when only a single name is provided or the station otherwise has reason to believe that the disclosure is inadequate. If the sponsor says that there are no other officers or directors, keep notes that you asked (not required to be in the public file – but to prove you asked if you are ever questioned).
These decisions give broadcasters plenty to think about – and it may give broadcasters plenty to do. Because of the additional burden being placed on broadcasters, it is possible that some will be asking the FCC to review some aspects of the decisions. But, for now, these are the new rules. So be sure to prep your sales force and the keeper of your public file about these new disclosure obligations – and start compliance now.
David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).
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