This past week's political news seemed to be all about Donald Trump and his possible run for the Presidency - and his plans to announce his intent to run on the season finale of The Apprentice.  When, a week ago, we wrote about the President declaring his candidacy, there was little interest in our post, and there seemed to be little news attention in general to that announcement.  But when Donald Trump started making noise about his possible Presidential run, and his plans to announce his intent on the season finale of The Apprentice in May, our phones started ringing, asking how can he do that?  My partner David Silverman was quoted in a Huffington Post article, while my analysis was misunderstood in a Hollywood Reporter legal blog (see why I was misunderstood below).  But the question remains - can Trump continue on The Apprentice while signaling his interest in running for President?

In fact, there is no FCC rule that prohibits a broadcaster from giving airtime to a political candidate on any kind of program, as long as they are willing to provide equal time to opposing candidates.  There may be other legal issues involved in giving time to a candidate as it may in effect be a deemed a campaign contribution to the candidate (an issue apparently for PACs as well, as explained by that legal scholar Steven Colbert, here), but the FCC's equal time rules don't prohibit the appearance of a candidate on an entertainment program, they only demand that the stations that broadcast the program give equal amounts of time to opposing candidates who ask for it - if the opponents ask for it within 7 days of the candidate's appearance.  And that is often the first issue - will the opposing candidate ask for it?  None of the Republicans asked when cable networks continued to run episodes of Law and Order featuring Fred Thompson, even after Thompson declared his candidacy for the Republican nomination.  Nor did other candidates request time after there was a parade of candidate appearances on Saturday Night Live during the last election (see our post on this pattern of candidates passing on their equal time rights).  But would a Trump declaration of a candidacy on The Apprentice even face that minimal risk?  Probably not.

For a broadcasters to be forced to honor a request for equal opportunities (or equal time as many call it), there must be a "legally qualified candidate" to make the request.  We'll look at that issue in a moment.  But even more fundamentally, there must be a legally qualified candidate who makes the appearance that triggers the requests for equal opportunity.  And, right now, Trump is not a legally qualified candidate, and one wonders whether he ever will be.  Years ago, when Howard Stern was the King of New York radio, he for weeks claimed that he was running for Governor of New York - and started aggressively campaigning for the job on his morning radio show.  Why did the opposing candidates (who were at the time, I believe, Mario Cuomo and George Pataki), not get equal time on the radio stations on which the Stern program was broadcast?  Because he never became a legally qualified candidate.  He talked on and on about running but, when the time came to file the necessary papers to qualify for a place on the ballot, he passed, and dropped his campaign.  That same ting seemed to happen with that aforementioned legal scholar, Mr. Colbert, and his intent to run in the South Carolina presidential primary in 2008 (see our post here).

In addition to Trump not being a legally qualified candidate, there may well be no other candidates yet ready to claim any equal opportunity rights, as there currently are no other declared candidates, who have filed papers with the FEC declaring their candidacy, to qualify as official candidates. There has been lots of discussion about exploratory campaign committees - but few if any real candidates.  What about the President you might ask?  Good question - but right now, we are, at most, in the run up to the primaries - not to the general election.  In the primaries, Mr Trump (who has indicated interest in running for the Republican nomination) would be opposed only by Republicans - not by the President.  So only the Republican candidates could request equal time during the primary season.

And even if some candidate officially declares between now and the last episode of The Apprentice, there still might not be an obligation.  Again, we are focused on equal time to candidates before a particular election.  And right now there is not a single election looming - but instead a series of primaries, each with their own filing dates and qualification requirements.  In fact, with many of the "primaries" actually being in the form of caucuses (which are subject to political rules), there might not even be formal, legal ways to register for a "place on the ballot" so to speak.  So it may come down to a subjective decision as to whether a candidate has done enough in a state to be considered a bona fide candidate.  While, once a Presidential candidate becomes legally qualified in 10 states, FCC rules deem him qualified for purposes of equal time, reasonable access and lowest unit rates, there is not much law on how a candidate gets to be qualified in some of these states - and it is likely the simple declaration that "I'm running" doesn't do it.  Usually some form of petition and filing fee may be necessary - which may or may not be accomplished at the same time as the declaration of candidacy.  If there are no formal papers to be filed, an active election effort in the state would be required to establish a candidacy - and it's unlikely that any quasi-candidate has done enough in any state (or certainly in 10 states) to meet that standard.

And what did the Hollywood Reporter blog get wrong?  They quoted me as saying that there were no cases deciding that a candidate appearance in an entertainment program triggered equal opportunities, when there have been such cases.  In fact, the FCC tried to change the rules to eliminate the need to offer equal time in such situations, soon after stations were forced to stop running Bedtime for Bonzo during the Reagan campaigns.  But the FCC backed down from that change when faced with a challenge filed in the Court of Appeals arguing that Section 315 of the Communications Act exempted from equal opportunities only very specific classes of broadcast programs (essentially news and news interview programs, an exemption that we've written much about, see, for instance, our post here), and entertainment programs were not among the exemptions.  So obviously there are cases that hold that candidate appearances in entertainment programs are covered by equal opportunities (including cases about comedian Pat Paulsen, who also became a legally qualified candidate, and the movie Storm Warning starring Ronald Reagan).  Perhaps they confused it with another issue which does remain unresolved -  which we also wrote about in connection with the Fred Thompson/Law and Order situation, whether cable television networks are covered by the rule, or only local origination by particular cable systems (certain FCC officials had said, at the time of the Fred Thompson situation, that the FCC was ready to extend the rule to cable networks, but no formal ruling to that effect has been issued).

All in all, the Donald appears to be able to go on making all the noise that he wants about running for President - perhaps in hope that it will not be just the Gary Busey fans who'll be watching the final episode of the Apprentice, but the political junkies as well.  Anything to drive ratings or the birth of the next political superstar?  Here, the old maxim "stay tuned" is quite appropriate.

With the President declaring his candidacy for reelection in 2012, broadcasters thoughts may be turning to that election and the expected flood of money that may come into the political process.  But visions of next year's elections should not be distracting broadcasters from their current political broadcasting obligations.  I've received many calls this year about whether broadcasters need to provide lowest unit rates to candidates in the races that are going on in 2011 - including many municipal elections and some special elections to fill various political posts.  As we have written before, if a station decides to sell time to a political candidate in a local race, that sale must be at the lowest unit charge for the class of time sold during the 45 days before a primary and the 60 days before the general election.  While state and local candidates need not be afforded the "reasonable access" that applies to Federal candidates, that merely means that stations do not need to sell these candidates any advertising time at all, or that stations may limit the purchase by state and local candidates to only the dayparts during which the station has more inventory.  But once the time is sold to one candidate in a race, most other political rules - including lowest unit charges, equal opportunities and the no censorship rule, all apply to the local candidate's spots.

With the President now filing to become a candidate, and many Republican candidates likely to be filing soon, what obligations are imposed on stations?  For the most part, there is no effect on the rates to be charged to candidates or their campaign committees - those rates only become effective 45 days before the primaries - so the lowest unit charges for Presidential campaigns likely will not kick in until very late this year, or early next, for the early Presidential primaries and caucuses in states like Iowa and New Hampshire. But, as candidates become legally qualified, there will be reasonable access and equal opportunities obligations that will arise.  Candidates for President can request reasonable access to all classes and dayparts - even outside the 45 and 60 day windows before a primary and general election, respectively.  In the case of a Presidential campaign, a candidate becomes legally qualified in all states once he has become legally qualified in 10 states. There may be few Democrats who are to likely to challenge the President, so equal opportunities will most likely be a major issue only on the Republican side.  And, as we've written before, the FCC has determined that most interview programs where the content is under station control - even those that have little news value on the normal day - are deemed "news interview programs" exempt from equal time rules.  Thus, equal time is normally only an issue in making sure that all candidates have equal opportunities to buy spot time, and in those rare circumstances where a candidate appears on a purely entertainment program (e.g. as a character on a scripted TV show) or where the candidate is themselves a host of a broadcast program - and usually stations ensure that the candidates are long gone from hosting programs once they formally declare that they are running for a political office

Another area where broadcasters need to pay attention is in connection with third party ads dealing with Federal issues.  Already, in many contested Congressional districts around the country, there are ad being run sponsored by various political action committees and other interest groups -targeting potential candidates for the House of Representatives or the Senate. Sometimes the ads are subtle digs at the positions that a potential candidate is taking ("call Congressman X and tell him that he should stop voting for bills that are bankrupting the country"), and sometimes they are more direct attacks on the potential candidate.  Sometimes they don't directly address a particular politician at all, but are instead directed at an issue being debated in Congress.  And sometimes, as reportedly happened just recently, they ask callers to tell a Congressman to vote in a particular way on an issue where he has already voted in the way the ad requests.  In any case, if the ads are dealing with Federal candidates or other issues being considered by the US House of Representatives or Senate, then they are Federal issue ads on which the station must maintain full public file information, similar to that which is kept for any candidate advertising - the full schedule of advertising that is to be run, the class of time sold, the sponsor of the ad, and even the price that was paid for the spots (see our post here on the public file requirements for Federal issue ads).

Finally, with the 2012 election fast approaching, stations should start planing for the election season.  Some stations are no doubt already selling long-term contracts that will still be in effect during the primary season.  Stations should be considering how to allocate the purchase price of these long-term contracts to reflect their actual seasonal value - rather than simply booking them as having a flat rate throughout the entire year - including the pre-election lowest unit rate periods. As we wrote in our Political Broadcasting Guide, the FCC allows you, in internal station documents, to allocate for lowest unit rate purposes, the purchase price of a long-term contract in a manner different than shown on invoices given to commercial clients, as long as that allocation more accurately reflects the seasonal value of the spots sold, adds up to the total purchase price of the package, and is not done simply to avoid the lowest unit rate periods.  Consult with your attorney to make sure that you properly apply this process, but it could save you money in the long term.  For other things that you should be thinking about in preparation for the election, check out our Political Broadcasting Guide. 

Many broadcasters, both television and radio, have been running the NAB spots on the Future of Television.  Those spots contain a description of the service available from local television stations and the new technologies that over-the-air television are in the process of deploying, and end with the suggestion that the Future of Broadcast Television lies in "technology not regulation from Washington DC."  Obviously, these ads are geared to address some of the many legislative and administrative issues facing TV broadcasters - including the proposals to take back some of the TV spectrum for wireless broadband uses.  Given that these spots could be arguably be seen as addressing Federal issues, to be safe, they should be identified as issue ads in stations' public inspection files, and appropriate information about those spots should be placed in the files.

The NAB, in announcing the availability of these spots, suggested this same precaution.  We've written before about issue ads, and the need to place notations in the public file about these ads. For instance, when stations ran ads on the broadcast performance royalty, we suggested that same treatment (and proponents of the royalty complained that broadcasters might not be making such notations).  What needs to go in the public file?  As the issues are Federal ones (as opposed to state and local issues that have lesser disclosure obligations), the requirements are similar to those that apply to political candidates. 

Specifically, when a station receives any request for time to address any issue dealing with a Federal matter (one to be considered by Congress, the President or any US government agency), the public file entry should include:

• If the request to purchase time is accepted or rejected
• If the ads are accepted, the dates on which the ad is run
• The rates charged by the station (or in the case of the NAB spots, that there was no charge but the ads themselves were furnished at no charge)
• 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.

Remember - issue ads don't implicate equal time or lowest unit rates - so taking these ads from the NAB should not be an issue for the station in terms of triggering any obligations for spots taking a contrary view.  But note the broadcast of these issue ads in your public file just to avoid any issues about whether "issue ad" obligations were met.

The Supreme Court issued its landmark opinion in Citizens United v. FEC one year ago today.  That case allowed corporations and labor unions to make independent expenditures for or against political candidates.  An editorial in today's Washington Post by the President of Citizens United and its lead counsel argues that the hysteria following that decision was unfounded because the amount spent by citizen groups in the last election paled in comparison to the amount spent by the Democratic and Republican parties and by the candidates themselves.  Rather, the authors argue, the primary political speech to come out of the Supreme Court's decision has been that of independents, and politicians are upset by this because they cannot control the speech of independents.

 As a reminder, the Supreme Court case arose as a result of a film directed against then Presidential candidate, Hillary Clinton.  Citizens United was a nonprofit corporation that produced the film, and there was debate whether this was a "documentary" or an "electioneering communication," as well as whether distribution via video on demand constituted "public distribution" of the film.  The Supreme Court found that the film was indeed an "electioneering communication" and that VOD was likewise a public distribution of the film.  Thus, Citizens United ran smack up against the FEC prohibition on independent corporate political expenditures.

As we blogged last year, the Supreme Court found that the prohibition on such corporate expenditures violated the First Amendment right of speech belonging to corporations and unions.  This decision was followed by a firestorm of critical comments, including those of President Obama in last year's State of the Union address.  The fear among many was that the money of big corporations would overwhelm the political messages of others who are less able to afford advertising time and that those corporations would therefore have a disproportional voice in future elections.

The editorial in today's Washington Post argues that those fears have not been realized, and that permitted corporate political expenditures are still vastly outspent by the major parties and candidates themselves.  While the editorial's authors are not unbiased, their point is well taken as to the first election since Citizens United was decided.

What we do not know, of course, is what effect Citizens United will have on a Presidential election, although we will find that out within the next two years for sure.  We also do not know whether corporate political expenditures will increase over time as those new First Amendment rights become realized.   However, most big corporations have directors and shareholders holding all sorts of political viewpoints.  It is unlikely that many publicly traded companies will want to risk offending investors by siding with a Democrat or Republican candidate. 

So, perhaps the fears that followed the Supreme Court's decision were indeed misplaced, and Citizens United was a true victory for the First Amendment, as today's editorial argues.  The future will ultimately reveal any yet unrealized impact of this decision.  Just as the Supreme Court made its decision a year ago in view of all the circumstances then existing, it can just as easily revise its holding in the future should different circumstances warrant correction.

My station received a cease and desist letter for a third party political ad.  What should we do?  This is a question we hear more than ever these days from both broadcasters and cable operators.  As we previously advised, this is not unexpected following the Supreme Court's decision in Citizens United, which allowed third party money to be used freely for political advertising on behalf of candidates for federal office.

Of course, if the ad is a "use," meaning that it contains the recognizable voice or image of the candidate sponsoring the ad, Section 315 of the Communications Act provides absolute immunity to broadcasters and cable operators for anything said in the ad.  But most of the cease and desist letters relate to third party ads attacking candidates that are not "uses" exempt from censorship under Section 315.  (The purely negative use of a candidate's voice or image is not a protected "use.")

Most of the cease and desist letters cite a 1961 FCC ruling titled Licensee Responsibility With Respect to the Broadcast of False, Misleading or Deceptive Advertising."  What those letters fail to mention is that this ruling concerned a Federal Trade Commission crackdown on false, misleading or deceptive commercial advertising.  It was unrelated to political advertising.

The cease and desist letter may also cite the 1950 Third Circuit opinion in Felix v. Westinghouse, which held that broadcast stations may be liable for defamation in the absence of a candidate "use."  There was nothing in that opinion hinting at media liability for political ads that are false and misleading but not defamatory.

Indeed, the FCC has actually made the following statement on multiple occasions:  "With respect to allegations of false and misleading statements by political candidates or their supporters, the Commission believes that the public interest will best be served through 'robust, wide-open' debate." citing the US Supreme Court decision in New York Times v. Sullivan.

Of course, the Commission has also been quick to point out that it "would be most concerned if substantial evidence were presented that a licensee had acted in bad faith or deliberately discriminated against a political candidate."

So, what is a broadcaster or cable operator to do with those cease and desist letters?  The best and safest course of action is to provide a copy of the letter to the ad's sponsor and ask for substantiation of the claims made in the ad.  That way, you have fulfilled your obligation to avoid having acted in bad faith or recklessly.

But do you need to pull the ad?  You might, but generally speaking, only if the ad is potentially defamatory.  Defamation is broadly defined as reputational harm, usually resulting from untrue statements alleging crime, fraud, dishonesty or immoral conduct.  Cease and desist letters arguing about a candidate's position on a particular bill or the effect of legislation are generally not alleging anything that would be considered defamatory, even if false.  These ads generally do NOT need to be pulled.  Similarly, cease and desist letters arguing that a political ad contains footage protected by copyright are likely to concern material protected by the law of fair use.

If, on the other hand, an ad alleges that a candidate committed a crime or other immoral act, it may be wise to consider pulling the ad pending receipt of substantiation for the claims made by the third party sponsor.  Truth is an absolute defense to defamation.  Broadcasters and cable operators face potential liability in running potentially defamatory ads, but only for for acting with actual malice or reckless disregard of the truth. 

The bottom line, however, is that most third party political spots do not make claims that are potentially defamatory.  The FCC and the First Amendment strongly support the airing of political viewpoints, even if those viewpoints are potentially false.  For the most part, there is no need to worry about threatening cease and desist letters regarding political ads, but it is always wise to get substantiation and to be more careful with ads that are potentially defamatory.

In the waning days before the mid-term election, we have received many questions about the applicability of the political broadcasting rules to state and local candidates.  In particular, we have seen a number of letters from attorneys representing candidates who are running for state and local offices (everything from Governor to county commissioner or school board representative), who claim that an attack by an opposing candidate is unfounded and that a broadcast station must pull that ad from the air.  Just as is the case with Federal candidates, ads by state candidates cannot be censored by a station.  Thus, except in certain very unusual situations (where the language of the ad would violate some Federal criminal statute, e.g. if it is obscene), a station must air the ad as it was created.  It cannot be rejected because the station disagrees with the content or the tone, and it cannot be pulled even if the opposing candidate believes it to be defamatory.  Because the station cannot censor a candidate's ad, they have no liability for the content of the ad, i.e. they cannot be held responsible for any defamatory content that it may contain, even if they are on notice of that content.  They cannot censor an ad by a candidate or a candidate's authorized campaign committee - whether that candidate is running for a Federal, state or local office.

Note that, as we have written many times, this is in contrast to those situations where a candidate complains about an attack ad sponsored by a non-candidate group.  In those cases, the station does have the option of whether or not to run the ad (the no censorship provisions of Section 315 of the Communications Act do not apply).  Thus, if the station is on notice that there is potentially defamatory content in an ad, it must do some investigation of that ad, and make an informed decision about whether or not to allow the ad to continue to run.  If it does not investigate, and continues to run an ad that is defamatory after receiving notice of that fact, in some extreme cases, it could face liability for that defamatory content.

Most of the other rules governing political broadcasting apply to state candidates as well as Federal candidates.  The requirement that candidate be charged lowest unit rates for the class of advertising time that the candidate purchases in the 60 days before the general election applies with equal force to state and local candidates as it does to Federal candidates.  And equal opportunities requires that a station sell comparable amounts of advertising time to competing candidates, or give free time to one candidate if their opponent appeared on a non-exempt program on the station, also applies to state and local as well as Federal candidates.  Public inspection file obligations - that a station put in its political file information about the amount of political time purchased by a candidate, the class of time sold, the price of the spots, and the schedule that will run - apply to state and local as well as to Federal candidates.

The principal political rule that does not apply to state and local candidates is the "reasonable access" provisions of the rules.  That is to say that stations need not sell time to candidate for all local races.  They can pick and choose in which races they will sell time, or they can restrict candidates for a specific race to buying time in particular dayparts in which the station has more inventory.  But once the decision to sell to candidate for a particular office is made, the other rules mentioned above apply.

More information about the political advertising rules can be found in the Davis Wright Tremaine Political Broadcasting Guide.

While most of the FCC's political broadcasting rules have remain unchanged for almost 20 years, each year there are a few new wrinkles that arise, and seemingly a few misconceptions that make the rounds among advertising agencies that work with political candidates.  One such misconception that seems to be circulating this year is that an ad for a state or local political candidate does not need to have their voice or picture to be a "use" under FCC rules.  Only "uses" are entitled to lowest unit rates and subject to the no censorship provisions.  For some reason, agencies in several states have tried to convince broadcasters that, as long as a spot has a sponsorship identification at the end (and, for television, a textual sponsorship identification 4% of screen height for 4 seconds), that spot is a "use."  But that is not correct.  A "use" requires that the recognizable voice or picture of a candidate be in the spot - and that is true even for spots for state and local candidates.  Some advertisers may be confused by the change in Federal laws (now itself almost a decade old) that required that Federal candidates identify themselves in their ads and personally state that they approved the message of the ad,  Perhaps some of the advertisers think that, because the law for Federal candidate is so detailed, and because it does not specifically cover state candidates (though several state laws now have imposed the same obligation on state and local candidates in their states), there is no requirement at all for state and local candidates to appear in their ads.  But they are not correct - for a spot to be a use, a candidate him or herself must have a recognizable voice or image in that ad.

While it is not illegal for a station to run a state or local candidate's ad when the ad does not have a candidates voice in it, there are important ramifications for the station if the spot is not a "use".  First, without the candidate's voice or picture, the ad is not entitled to lowest unit rates.  There has been some controversy, not settled by the Federal Election Commission and perhaps subject to interpretations under state election commission rules, about whether a station that charges a candidate lowest unit rates for a spot not entitled to such rates may be making a corporate campaign contribution to that candidate, which is prohibited under Federal law and in most states.  Most importantly for the stations, if the spot does not have the candidates voice or picture in it, the spot is not covered by the 'No censorship" provision of Section 315 of the Communications Act.  That provision prohibits a station from rejecting a candidate's ad based on its content.  But, because the station can't reject the ad based on its content, the station has no liability for the contents of the ad.  Conversely, if the ad does not have the appearance by the candidate in it, then the station is free to reject it based on its content, and thus the station could theoretically have liability for the content of the ad.  As we approach a heated election season where stations don't want the obligation to check the veracity of every claim made by one candidate about an opposing candidate in an attack ad, stations should be careful to insure that spots purchased by candidates are in fact uses, containing the recognizable voice or picture of the candidate - even for state and local candidates. 

We have written about this issue of potential liability for the content of spots many times before, most recently in connection with ads by non-candidate groups that are now allowed from corporations and labor unions following the Supreme Court's Citizens United decision.  Our most recent article on that case can be found here.  For more information about the FCC's laws and policies regarding political broadcasting, check out the Davis Wright Tremaine Political Broadcasting Guide, available here. 

In the last few weeks, I've been asked several times by broadcasters whether an ad should be considered an "issue ad."   Usually, the ad in question deals with some sort of faintly controversial issue, and the broadcaster seems torn about how to classify the ad.   In many ways, the answer is almost irrelevant as, other than some public file obligations, whether or not an ad is an issue ad has little practical significance.  Issue ads are not entitled to special rates - lowest unit rates are reserved for candidate ads.  They are not entitled to special placement in broadcast schedules.  As there is no Fairness Doctrine, there isn't even a requirement that you treat both sides of an issue in the same fashion (except perhaps, where a Fairness obligation may still arise if the issue being discussed is a candidate in an election, when the last remnant of Fairness, the Zapple Doctrine, has not officially been declared dead).  So why worry about whether or not something is an issue ad?

The principal reason is the public file. Commission rules require that the sponsor of an issue ad be identified in a broadcaster's public file, along with the sponsor's principal officers or directors.  This is required for any ad dealing with a controversial issue of public importance.  The ad does not need to deal with a political issue, or one to be considered by a government body.  Any controversial issue of public importance merits the public file treatment.  For ads dealing with a "federal issue", one to be considered by the US Congress, any Federal administrative agency or any other branch of the United States government, additional disclosures need to be made in the file (which we have listed before), setting out all the information that you would need to provide with respect to a candidate ad - including the price paid for the ad and the schedule on which the ad will run. 

It has been suggested to me that an issue ad needs to be identified so as to decide whether the ad needs to have a "paid for" or "sponsored by" tag at the end to identify its sponsor.  In fact, any ad where the sponsor of the ad is unclear - even a pure commercial ad needs to have a "paid for" or "sponsored  by tag."  For instance, a few years ago, a station was fined when a local chamber of commerce was buying time to promote all the businesses in its town, and the chamber was never identified in the ad - much less as the sponsor of that ad.  When the ad is for a product, and the maker of the product is that sponsor, the Commission considers the identification of the product to be sufficient sponsorship identification.  But where the actual sponsor is someone else, and it is not clear from the ad who the sponsor is, a broadcaster is required to identify that sponsor.

So, in considering whether a spot is an issue ad, why go through the trouble of worrying too much about it.  If it deals with something that looks controversial, err on the side of caution.  Consider it an issue ad, place notice in your public file, and go on with your business!

On May 27, 2010, David Oxenford spoke to the Vermont Association of Broadcasters annual meeting in Montpelier, updating the broadcasters on Washington events of importance, and discussing the FCC's political broadcasting rules.  A copy of Dave's PowerPoint on issues of importance to broadcasters will be posted here soon.  Broadcasters may want to refer to Davis Wright Tremaine's Political Broadcasting Guide for a discussion of the political broadcasting issues that may arise in this election season.  One of the political broadcasting issues that was discussed in detail was the issue of what a station should do when faced with a political ad that comes from a third party, attacking a political candidate, and the candidate tells the station that the ad is untrue and, if it continues to run on the air, it may subject the station to liability.

This issue may be coming up more in the coming months.  The recent Citizens United case signals the potential for more campaign spending by corporations and labor unions. This money would be spent directly by these organizations, not contributed to the candidates, as the case did not loosen the limits on corporate contributions directly to candidate’s campaign committees. Thus, as the ads will not come from candidates, they will not be subject to the “no censorship” rule that applies only to candidate ads. Because the no censorship rules prevent a broadcast station from rejecting a candidate’s ad based on its content, stations are protected from any liability for the content of those candidate ads. In contrast, broadcasters are free to reject ads from corporations, labor unions, or other non-candidate groups. Because they can choose whether or not to accept such ads, they can technically be held liable for the contents of those ads, should the ad be defamatory or otherwise contain legally actionable material. This should not be new to broadcasters as, even before Citizens United, stations were often faced with complaints from candidates about ads from third party interest groups (like the political parties' campaign committees, or so-called 527 groups like MoveOn.org) that were permitted to advertise even before the recent decision. Most broadcasters want to be able to accept these advocacy ads from non-candidate groups, but they also want to avoid potential liability. What is a station to do when it receives such an ad, or when an ad is already running and a candidate complains about its contents?

While there is no easy answer, and a broadcaster should always consult with their lawyer when one of these issues arises, the broadcaster can rely on the standard for judging potential liability in most cases is that used in a defamation case. This standard, set out by the US Supreme Court, requires a finding of “malice” before a party can be found to be liable for transmitting information about a “public figure,” which would include a political candidate. For liability to be found, the malice standard requires that the broadcaster ran the ad either knowing it to be false or with reckless disregard of its truth. Thus, if a broadcaster has actual knowledge that a claim made in an ad is false, or has a substantial reason to doubt its truthfulness, yet nevertheless runs the ad and it does in fact prove to be false, there is the potential for liability. But if the ad is the typical campaign rhetoric – that Candidate A votes for big government, or votes for spending bills that waste taxpayer’s money, or that he has not done enough for education – there is no reason for the station to be on notice that there is anything wrong with such a spot, and running it in the first instance is not likely to be a concern. 

What we have seen in many recent campaigns, however, is that candidates or their representatives object to such ads once they start running, and demand that a station cease running the ad and threaten to sue if no action is taken. Once one of these letters challenging an ad arrives, if the ad in indeed false, the letter could be seen as putting the station on notice of the potential untruth of the ad. Thus, the receipt of the letter heightens the station’s duty to investigate to determine if the spot may in fact present some basis for liability. In many cases, the ad’s sponsor will have ready substantiation that the station can review. If, after investigation, the claims appear to have a reasonable basis, it's unlikely that the broadcaster will get into trouble for airing those ads. But if the ads are baseless, the broadcaster needs to beware.

Should the broadcaster pull the ad while it investigates? That involves the broadcaster and its counsel in some risk assessment. The risk often depends on the nature of the ad and the kind of claims that it makes. If the ad is making those typical political claims that are subject to interpretation (“Candidate X is a big spending liberal ”or “candidate Y favors policies that will lessen your freedom”), it is less likely that a court would find these to be actionable claims – particularly where the claims cannot really be proved false. By contrast, if there are claims that directly address the character or integrity of the candidate (e.g. “he was having an affair with a city employee while in office” or “he used taxpayer funds for his own private use”), then, if these claims are proved false, there is much more risk for the station. These kinds of ads should be approached more cautiously. 

There is no easy way to just say take the money and run.  While there have only been a handful of cases where a station has been sued for the content of a third-party ad, and even fewer where they have had to pay any damages, the threat is always there. Thus, in dealing with these issues, stations need to be careful, and need to vet the ads with their attorneys.  But most ads probably will be able to be run.  So proceed - but proceed with care.  

And remember, these cautions apply only to ads by third party groups.  If the ad is by a candidate's authorized campaign committee, the station cannot censor the ad, and it cannot be held liable for its contents.  So if you get a letter from an opposing candidate challenging the content of the ad by a candidate, you can't censor the ad, and should not be pulling it for investigation or because of concerns about the truth of the ads.  So be careful about the contents of third party ads, but rest easy when a candidate ad is running. 

The DISCLOSE Act recently passed the Committee in the House of Representatives charged with dealing with it, without many of the provisions that most worried broadcasters and cable companies.  We recently wrote about the DISCLOSE Act legislation proposed in both the House and Senate in response to the Citizens United Supreme Court case (which freed corporations and labor unions to spend money during political campaigns to explicitly support or oppose the election of particular candidates).  When introduced, in addition to provisions mandating new disclosure requirements for corporations, labor unions and other third parties who decide to run political ads, the legislation had a section expanding the requirements for lowest unit rates and reasonable access - extending these rights to political parties (as opposed to being limited to the candidate's own campaign committees, who are the only ones eligible under current law) and mandating advertising rates even lower than the current lowest unit charges in certain circumstances.  That section of the original bill also required that the FCC conduct audits of broadcasters' compliance with the political rules, and seemingly expanded the FCC political advertising obligations of cable systems.  The House of Representatives Committee on Administration this week approved the bill, sending it on to the full House for consideration.  The DISCLOSE Act's sponsors want to have the bill approved and in place by July 4th so that it will have an impact on the November elections.  The approval without these provisions, which may well have caused broadcasters and other media companies to come out in opposition to the bill and delayed its passage, signals that the Act may in fact move on the rapid timeline that its sponsors envision.

Of course, this is not the end of the story.  The Senate still has to consider the bill in committee, and the full House and the full Senate have to vote on the legislation before it is adopted.  At any point, amendments can be offered that could have the impact of returning some of these provisions of concern.  But, at least for now, while imposing some additional disclosure requirements on political advertisers, the House version of the legislation is much more palatable to the broadcasting community.  But watch this bill as it progresses through Congress in the coming month to see what else may develop. 

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

• An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
• Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
• Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
• Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
• Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
• Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
• Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
  • 6 of the Top 50 TV markets
  • 3 of the markets 51-100
  • 3 of the markets rates 101-150
  • 3 markets below 150
  • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
• Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

• An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
• Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
• Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
• Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
• Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
• Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
• Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
  • 6 of the Top 50 TV markets
  • 3 of the markets 51-100
  • 3 of the markets rates 101-150
  • 3 markets below 150
  • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
• Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

• An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
• Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
• Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
• Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
• Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
• Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
• Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
  • 6 of the Top 50 TV markets
  • 3 of the markets 51-100
  • 3 of the markets rates 101-150
  • 3 markets below 150
  • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
• Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

• An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
• Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
• Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
• Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
• Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
• Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
• Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
  • 6 of the Top 50 TV markets
  • 3 of the markets 51-100
  • 3 of the markets rates 101-150
  • 3 markets below 150
  • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
• Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact. 

In reaction to the Citizens United Supreme Court decision invalidating restrictions on corporate spending on advertising and other messages explicitly endorsing or attacking political candidates (about which we wrote here), new legislation, called the DISCLOSE Act,  has just been introduced in both houses of Congress seeking to mitigate the perceived impact of the Court's decision.  While the announced goal of the legislation is aimed at disclosure of the individuals and companies who are trying to impact the political process, the draft legislation, if adopted would have significant impact on broadcasters and cable companies, including potentially extending lowest unit rates and reasonable access to Federal political party's campaign committees (and not just the candidates themselves).  The draft legislation also proposes lower Lowest Unit Rates in political races where there are significant independent expenditures, more disclosure by broadcasters through an on-line political file, and even mandates for audits by the FCC of the rates charged by television stations to political candidates.  The language could also be read as an expansion of the current applicability of the political rules to cable television - applying reasonable access to cable systems and lowest unit rates and equal opportunities to cable networks.  As Congressional leaders are proposing to move this legislation quickly (with votes before July 4) so that it can be in place for the coming Congressional elections, broadcasters and cable companies need to carefully consider the proposals so that they can be discussed with their Congressional representatives before the bills are voted on by Congress.

While much of the bill is intended to force disclosure of those sponsoring ads and otherwise trying to influence the political process, the portions of the bill that amend provisions of the Communications Act include the following:

• An extension of Reasonable Access to require that broadcasters give reasonable access not just to Federal political candidates, but also to Federal political parties and their campaign committees.  In recent years where the Democratic and Republican Congressional Campaign Committees have been big buyers of broadcast time.  The extension of reasonable access to these groups could put even greater demands on broadcast advertising time on stations in markets with hot races, as stations could not refuse to provide access to "all classes of time and all dayparts", as required by the reasonable access rules.  This could crowd out other advertisers, and even make it harder for ads for state elections (as state and local candidates have no reasonable access rights) in states where there are hotly contested races.
• Extends the Reasonable Access requirements to require reasonable access to "reasonable amounts of time purchased at lowest unit rates."  The purpose of this change is not clear, as all political time must be sold to candidates at lowest unit rates in the 60 days before a general election and the 45 days before a primary. 
• Extends the requirement for Lowest Unit Rates to Federal political parties and their campaign committees.  Currently, the lowest unit charges apply only to the candidate's campaign committees, not to political parties.  Under the proposed language, LUC rates would also apply to the parties, and to groups like the Republican and Democratic National Campaign Committees
• Extends the "no censorship" provisions to Federal political parties and their campaign committees.  This change may be a positive for broadcasters.  As we have written before, a broadcast station cannot censor a candidate's ad.  But, as they have no power to reject a candidate's ad based on its contents, they have no liability should that ad contain material that could potentially be defamatory or otherwise subject the station to liability.  This proposed language would extend the no censorship rule to cover ads from Federal political parties, so that stations would not have liability for those ads either.  As many of the hardest hitting attack ads often come from these committees, if this legislation were to pass, stations would not have to worry about evaluating the truth or falsity of the committee's ads, as they would have no liability for the contents of the ads as they would be forbidden by law from rejecting the ads based on their contents.
• Provides for a lower Lowest Unit Rate in races where there are independent expenditures by any group of more than $50,000.  If a corporation or other group spends $50,000 in any political race, then all stations would be required to charge all candidates in the race the lowest charge made for "the same amount of time in the last 180 days" - not just the lowest charge for the same class of time as is then currently running on the station.  First, this would force stations to look back 6 months to determine their lowest unit rates.  For a primary election in June or July, rates in the doldrums of January or February could set the June political rates.  Moreover, the legislation does not state that it would look at the lowest rate for the same "class" of time over the previous 180 days, but instead it talks only about the same "amount" of time.  It is unclear if this is an intentional attempt to make stations sell prime time spots at overnight rates, but the current language of the bill seems to avoid the traditional distinctions on spots being sold based on their class.
• Forbids the preemption of advertising by a legally qualified candidate or national committee except for unforeseen circumstances.  This provision may well be intended to force stations to sell candidates advertising at their lowest nonpreemptible rates, and then treat the spots as they would much more expensive non-preemptible fixed position spots
• Requires the FCC to conduct random audits during the 45 days before a primary and the 60 days before a general election.  Audits would have to be conducted as follows: 
  • 6 of the Top 50 TV markets
  • 3 of the markets 51-100
  • 3 of the markets rates 101-150
  • 3 markets below 150
  • Audits would be required of the 3 largest networks, 1 independent TV network, 1 cable network, 1 provider of satellite services, and 1 radio network.  The language here, too, seems odd, as the requirements for audits are for "networks" of broadcast, cable and radio stations, not for local operators, and for an "independent television network" which would seem to be an inherently contradictory term - if a station is truly an independent, it is not affiliated with a network, so how can the FCC audit an "independent television network"?  It is unclear of whether this provision is requiring audits of the networks themselves, or of affiliates of the networks in the markets in which audits must be conducted. 
• Requirements that stations keep on their website information about all requests for the purchase of broadcast time by candidates, political parties or other independent political groups. Right now, the rules specifically do not require that political files be kept online.

There is also a provision changing the definition section of the Section 315 of the Communications Act which sets out the lowest unit charge provisions of the Act, along with no censorship and equal opportunities, which currently apply to broadcasters and the operators of cable television systems.  The proposed changes would add to the definition of a broadcast stations the phrase "and a provider of cable or satellite television service", making clear that all such services are included in the lowest unit rate provisions of the rules - which might be read as an attempt to include cable television networks within the scope of the rules.  In fact, as provided above, the law requires an audit of a cable network, implying that they will be subject to the rules if this law is adopted.  The law also adds a reasonable access provision to Section 315, which would seem to extend the concept of reasonable access to cable as well as to broadcast. The clear intent is unstated, but given the definitional language used in the language of the bill, and the fact that this new provision dealing with reasonable access is added to Section 315 which applies to cable (as contrasted to the Section 312 reasonable access provisions which do not), the extension of reasonable access to cable is seemingly the impact of this language.

The bill also extends the "stand by your ad" provisions of the Federal Election law to ads by third party groups, so a spokesman for any third party group buying ad time in connection with a political campaign will be forced to appear on the ad and take "credit" for that ad.  Disclosure of the Top 5 contributors to non-candidate political committees would also be required by this bill.

It is clear that the DISCLOSE Act could fundamentally change the way that broadcasters and cable companies deal with political advertising during election periods.  With the push to decrease rates and increase access to the airwaves, there could well be a a significant reaction by those being regulated.  Given the more expansive reading of First Amendment rights from the Supreme Court in the Citizens United case which spurred this proposed legislation, it would be quite possible that some broadcast or cable group could choose to challenge the mandatory access rights given to political parties under these rules, or the very cheap rates for political ads that could be read into the provisions of this bill.  There will be much to debate on this legislation, and the language of the bill could very well change as it makes its way through the Congressional processes.  But there are many important issues to consider - and broadcasters need to be aware of their possible impact.