By Scott Flick
Partner, Pillsbury Winthrop Shaw Pittman LLP
If trying to maintain the required paperwork for political advertising aired by your station gives you a headache, prepare for a migraine of biblical proportions.
With the departure of Commissioner Jessica Rosenworcel leaving the FCC in a 2-2 partisan split [until Chairman Tom Wheeler exits Jan. 20], there are really only two types of broadcast orders coming out of the FCC these days: those having the unanimous support of all four remaining commissioners, and those that can be done by the Media Bureau on delegated authority with or without the support of the two Republican commissioners.
That was evidenced twice last week.
The first was the Media Bureau’s rejection of various petitions seeking reconsideration of increased ownership reporting requirements for noncommercial stations. That action generated an immediate response from Republican commissioners Ajit Pai and Michael O’Rielly, who released a joint statement chiding the Media Bureau for taking the action right before the FCC changes control. They encouraged the rejected petitioners to appeal the decision to the full Commission for reversal.
We might now be headed down a similar path with the political file. [On Jan. 6], the Media Bureau released an Order expanding the record keeping associated with airing political advertising. Perhaps simply an error, but contributing to the appearance that the Order was rushed out to beat the change in administrations, the formatting and text of the Friday-night version deteriorates badly in the last third of the Order, with no text at all in the last 49 footnotes, the paragraph numbering changing, and the text of some paragraphs being in bold type and/or all capitals. An updated version was later released.
The Order responds to complaints filed by activist groups against 11 different stations owned by a Who’s Who of television broadcasters, with the FCC admonishing nine of the 11 stations for political ad recordkeeping violations. A separate order admonishing a twelfth station in response to a more recent complaint was also released Friday night.
But why would an order admonishing stations for alleged recordkeeping violations (which originated from complaints sitting at the FCC since mid-2014) need to be rushed out? Perhaps because it also “clarifies” that the admittedly vague rules on political ad recordkeeping require much more expansive political file records than most anyone has previously suggested (at least anyone who wasn’t trying to use the records for other than their intended purpose; for example, as a proxy for overall political ad expenditures).
The clarifications apply not just to broadcasters, but to cable, DBS, and satellite radio providers as well.
Read without an understanding of the current political ad landscape, the clarifications probably seem dryly mundane. They include the following:
- The political file must contain the names of all candidates (and the offices to which they are seeking election), all elections, and all national legislative issues of public importance mentioned in an ad.
- The political file must contain a list of all of the chief executive officers or members of the executive committee or board of directors of any person seeking to purchase broadcast time discussing a political matter of national importance (not just one person), even though the Federal Election Commission requires only a single name for its own purposes. In cases where a station is given the name of a single official of a sponsoring entity, or otherwise has a reasonable basis for believing the information provided to it is incomplete or inaccurate, the station must inquire whether there are any other officers or members of the executive committee or of the board of directors. If the entity responds that there are no other officers/members, then the station has met its obligation. If instead the entity refuses to disclose anyone else since the Federal Election Commission doesn’t require it (and I have seen this happen), it’s not clear what the station is supposed to do.
- The FCC also made clear that it will now seek to second-guess whether a political ad disclosure lists every “political matter of national importance” mentioned in the ad. To trigger the requirement, a message must be “political” in nature and must be of “national importance”. However, despite Congress specifically defining such an issue as one involving a candidate, an election, or “a national legislative issue of public importance”, the order clarifies that Congress didn’t actually mean that, noting that a matter “need not be subject to pending or proposed legislation in order to be considered a ‘national legislative issue of public importance’,” and that the “term also encompasses other political issues that are the subject of continuing controversy or discussion at the national level.” In the Internet Age, it’s hard to imagine many issues that are not “the subject of continuing controversy or discussion at the national level.” Many issues that used to be local routinely draw national attention and vice versa now. Congress’s use of the phrase “legislative” narrowed it to at least a somewhat reasonable level of paperwork, whereas the Order’s excising of that limit makes the obligation completely open-ended and therefore easily second-guessed by the FCC and complainants.
While some of the clarifications are not particularly new, the net result may be formidable. Under the Order, it will not be adequate to note a particular campaign committee sponsored an ad to promote its candidate to be a U.S. Senator. A station will also need to name every legally-qualified candidate mentioned in the ad (presumably to compare them to the sponsoring candidate), and list every issue discussed in the ad that is the the subject of continuing controversy or discussion at the national level. The Order then provides as an example two ads supporting a state attorney general candidate, one of which extolls the virtues of the candidate, and the other of which extols such virtues as they relate to “issues that are debated at the national level”. The Order indicates that the record keeping obligations would apply to the second ad, but not the first.
Listing all such issues referenced in an ad would perhaps have been less daunting in a prior era, but I have reviewed plenty of political ads over the years, often in the context of cease and desist letters from opposing candidates, and it has become common in our short-attention-span world for an ad to make a dozen different assertions in rapid-fire order. Don’t even ask what would be involved in trying to do the paperwork for a candidate’s long-form ads, particularly where they are aired live. Of course, all of this presumes that stations are able to review the ads and summarize them well in advance of airing, a luxury that rarely exists in a world where campaigns swap out ads daily to address minute-by-minute polling updates and Internet-driven issues. Indeed, at the time spots are purchased and the bulk of the paperwork is filled out, a station won’t even know everything the actual ads will mention.
The Order suggests that not only is it plausible for stations to do this, but not particularly burdensome:
We find that requiring stations to make all such information, as applicable, available to the public is reasonable and not unduly burdensome for licensees. We note that licensees already are obligated to review the content of programming covered by Section 315(e) to confirm that information furnished by advertisers is complete. Additionally, most advertisements, even those that cover multiple categories, are typically only 30 or 60 seconds in duration. Thus, reviewing the content of such ads for the purpose of identifying all candidates, elections, and issues, as applicable, would not be unduly burdensome for licensees.
If by this the Order means that the station has checked the ad to ensure that it has adequate sponsorship identification (a very brief and objective review), there is a big difference between that and reviewing every bit of information in the ad (audio and, in TV, visual) to (1) determine which individuals are named, (2) determine whether they are legally-qualified candidates, (3) determine which issues are referenced, (4) make the subjective call as to whether each relates to a “continuing controversy or discussion at the national level,” (4) summarize all of the above, and be at risk of FCC enforcement actions for missing any of it. Then, multiply the burden of reviewing this one hypothetical ad by hundreds or thousands of ads (and then write to each advertiser who provided the name of only a single FEC-disclosed officer and track their responses). With this context, you begin to understand the magnitude of the task.
But why the expansion? After the Supreme Court’s ruling in Citizens United opened the door to expanded corporate political advertising, Democratic members of Congress sought to counter the court’s ruling (which was based on the Constitution and therefore beyond the power of Congress to simply legislate away) by proposing the DISCLOSE Act (Democracy Is Strengthened by Casting Light On Spending in Elections). That legislation, among other things, would have required certain buyers of political ad time to file disclosure statements with the Federal Election Commission listing their donors. The bill failed in the Senate, but trying to find other ways of reaching a similar result remains a goal of many Democratic members of Congress as well as numerous political activists. It appears the Order is a last-minute effort to utilize the political ad rules (the principal purpose of which has been to ensure stations are meeting their obligations with regard to reasonable access, equal opportunity, and lowest unit charge) to instead make the broadcast political file a national monitoring system for political advertising.
The flaws in that approach are of course obvious. First, TV/radio advertising is only a segment of all political advertising, and is already the most visible and well-documented form of political advertising. Even after the crazy election season we just experienced, no one is talking about how the election may have been swayed by illicit TV and radio ads, but by fake news stories circulated on social media, an area lacking any such regulation. However, since no one has figured out how to regulate fake news on social media, the FCC has chosen to once again ratchet up broadcast regulation, a pattern that has become all too familiar and which I wrote about last year with regard to retransmission consent.
Partially because of this, besides being a lot of work for broadcasters, it’s questionable whether these changes will be all that helpful to anyone. Political disclosure forms listing multiple candidates and a dozen issues mentioned in the ad will more likely obfuscate rather than clarify what the principal purpose of the ad was. And, as the examples involving state attorney general ads discussed above make clear, activists attempting to track political activity based upon station political files will be generating some pretty random results. The paperwork for broadcasters will increase significantly, but the utility of the data generated may not.
Which brings us to an interesting fork in the road. Broadcasters are required to air federal candidate ads, cannot censor or request modification of any candidate’s ad, must sell the ads at below-market prices (providing volume discounts given a station’s biggest advertiser to candidates purchasing a single ad), and because of this, are legally prevented from recovering employee and other costs expended generating an ever-increasing amount of recordkeeping that has nothing to do with determining the quality of the broadcast licensee, or its compliance with the station’s reasonable access, equal opportunity or lowest unit charge obligations toward candidates.
While the lowest unit charge restriction does not apply to non-candidate ads, it’s not clear what cataloging each and every “national” issue in those ads actually accomplishes, as a station’s audience will, by definition, know what those ads contain, and because of the sponsorship identification requirements, will know who is seeking to influence them. If the identities of those named as sponsors are too murky, it is the domain of the Federal Election Commission to remedy that rather than forcing broadcasters to extract information the FEC itself doesn’t demand.
Asking for a list of issues discussed on-air might have made sense in the era of the Fairness Doctrine, which required stations to present competing views on issues, but that requirement was long ago found unconstitutional and abandoned by the FCC. It’s therefore not clear what the purpose of uniquely disfavoring broadcast stations by requiring them to collect and generate data on such political ads is at this point. Beyond burdening broadcasters with the additional paperwork and associated costs, it drives away advertisers, often into the arms of social media and other media not so regulated. The trend in every other sector of media is to simplify the process of buying ads, not complicate it. Driving such advertisers to unregulated media actual undercuts enhanced political disclosure while weakening local stations, one of the last sources of news content where the public actually can identify the source of its news.
In a world where the constitutional underpinnings for treating broadcasters differently than newspapers and all other media under the Supreme Court’s now-ancient Red Lion decision grow weaker by the day, the FCC’s Order provides not just an additional basis, but the opportunity for some of the nation’s most well-known broadcasters to challenge under the First Amendment (freedom of speech), Fifth Amendment (uncompensated takings), and Fourteenth Amendment (due process/equal protection) the constitutionality of political advertising laws that uniquely disfavor broadcasters. Of course, a court may never reach the broader constitutional issues if it determines these clarifications fail as simply being arbitrary and capricious under the Administrative Procedure Act.
Up to this point, broadcasters have been fairly content to live with the laws on airing political advertising, perhaps as much out of habit as anything. If last week’s order suggests that this detente between broadcasters and the FCC has been disrupted, that complacency may be at an end.