Articles Posted in Political Advertising

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For those who follow my speaking schedule on our CommLawCenter Events Calendar… wait, no one follows my speaking schedule? Disappointing. Well if you had, you would have known I was speaking on a pair of regulatory panels at the Texas Association of Broadcasters’ convention yesterday (incidentally, another great show this year from Oscar Rodriguez and TAB’s excellent staff).

On the first of those panels, with Stephen Lee of the FCC’s Houston Enforcement Bureau office, we discussed the FCC’s July 1st expansion of the TV online political file requirement to all TV stations. During that discussion, an audience member asked whether radio stations would someday have to put their public inspection files online as well. I noted that when the FCC moved TV public files online in August of 2012, it had indicated that it was starting with TV, but anticipated it would eventually consider moving radio public files online as well. However, in the two years since, the FCC has focused on working the bugs out of the online public file software and has not mentioned expanding the online requirement to radio.

Unknown to most, that changed unexpectedly about two hours after the panel, when the FCC released a Public Notice rapidly responding to a petition for rulemaking filed just six days earlier by the Campaign Legal Center, Common Cause and the Sunlight Foundation. The petition asked that cable and satellite providers also be required to post their political files online. While broadcasters and those three organizations (who have filed more than a dozen complaints against TV stations for alleged online political file violations in the past few months) haven’t seen eye to eye on much in the past, this might be one requirement they can agree on, albeit for very different reasons.

While the original purpose of the political file was to ensure that candidates had the information needed to enforce their rights to equal opportunity and lowest unit rate for advertising, the Campaign Legal Center, Common Cause and the Sunlight Foundation have sought to use it instead to track political spending by PACs, since that information is not available, at least in real time, from the Federal Election Commission. To make it easier for them to access this information, they demanded the FCC require that TV stations post their political files online. They have also urged the FCC to require TV stations’ political files be posted in a machine-readable format to make aggregating the information easier.

Broadcasters opposed those efforts, noting the burden of keeping the fast-changing political file up to date online, and the competitive concerns with posting sensitive ad rate data online for all the world to see. In particular, they found it competitively unfair that broadcasters were required to post their ad rate information online when competing cable and satellite providers were not.

The FCC agreed, and when it decided to require that TV stations post their public files online, it originally excluded the political file from that requirement, finding that uploading and updating the political file online would be too burdensome. However, after a change in personnel at the FCC, the agency reversed course and concluded that posting the political file online wouldn’t be burdensome after all.

Television broadcasters therefore likely welcomed yesterday’s Public Notice seeking comment on at least leveling the information playing field with cable and satellite. However, buried in the middle of the Public Notice, and completely unrelated to the petition for rulemaking on cable and satellite political files to which the Public Notice responds, is a single sentence sending chills down the collective spines of radio broadcasters:

“We also seek comment on whether the Commission should initiate a rulemaking proceeding to require broadcast radio stations to use the online public file, and on an appropriate time frame for such a requirement.”

While the need to first launch a rulemaking means that a radio online public file requirement would take at least some time to implement, it appears that it is indeed (spontaneously) back on the FCC’s agenda. With staffs that are typically much smaller than those of TV stations, radio stations would undoubtedly find an online public file requirement to be far more burdensome than it was for TV (not that TV stations found it to be a picnic either). If they don’t want to find themselves facing that very burden in the not too distant future, radio licensees will need to speak up in what most would have assumed is a completely unrelated proceeding. To the broadcaster who asked that question at yesterday’s panel, the FCC has quietly changed my answer.

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May 2014

This Advisory provides a review of the FCC’s political broadcasting regulations.

More than ten years after adoption of the Bipartisan Campaign Reform Act (“BCRA”) of 2002, popularly known as “McCain-Feingold,” Congress’ and the FCC’s interest in political broadcasting and political advertising practices remains undiminished. Broadcast stations must ensure that a broad range of federal mandates are met, providing “equal opportunities” to all candidates using the stations’ facilities, affording federal candidates for public office “reasonable access” and treating all candidates for public office no less favorably than the station treats its most favored advertisers. Accordingly, it is imperative that broadcasters be very familiar with what is expected of them in this regulatory area, that they have adequate policies and practices in place to ensure full compliance, and that they remain vigilant in monitoring legislative, FCC, and FEC changes in the law.

In this environment, it is critical that all stations adopt and meticulously apply political broadcasting policies that are consistent with the Communications Act and the FCC’s rules, including the all-important requirement that stations fully and accurately disclose in writing their rates, classes of advertising, and sales practices to candidates. That information should be routinely provided to candidates and their committees in each station’s carefully prepared Political Advertising Disclosure Statement.

Many of the political broadcasting regulations are grounded in the “reasonable access,” “equal opportunities,” and “lowest unit charge” (“LUC”) provisions of the Communications Act. These elements of the law ensure that broadcast facilities are available to candidates for federal offices, that broadcasters treat competing candidates equally, and that stations provide candidates with the rates they offer to their most-favored commercial advertisers during specified periods prior to an election. As a general rule, stations may not discriminate between candidates as to station use, the amount of time given or sold, or in any other meaningful way.

It is also important to note that television stations affiliated with ABC, CBS, NBC, or FOX located in the top 50 markets must keep their political records in their online public inspection file located on the FCC’s website. Beginning July 1, 2014, all other television stations must commence placing new political file documents in the political file section of their online public inspection file as well. This requirement does not apply to radio stations at this time.

While this Advisory outlines some of the general aspects of the political broadcasting rules, there are dozens of possible variations on any one issue. Accordingly, stations should contact legal counsel with any specific questions or problems they may encounter.—Article continues.

A pdf version of this entire article can be found at Political Broadcasting Advisory.

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After Monday’s FCC meeting left television broadcasters facing higher expenses and lower revenues by restricting the use of Joint Sales Agreements and joint retransmission negotiations, broadcasters were due for some good news. Where the FCC is the bearer of bad news, it has often fallen to the courts to be the bearer of good news, generally by overruling the adverse FCC decision. Unfortunately, that process can take years, meaning that in Washington you have to take a very long term view of “the good outweighs the bad.”

This week, however, the FCC’s bad news was followed very quickly by the Supreme Court’s decision today in McCutcheon v. Federal Election Commission. In McCutcheon, the Court ruled that while limits on political contributions to individual candidates continue to be permissible, overall limits on contributions to candidates and party committees are unconstitutional. In other words, the government can limit how much you donate to an individual candidate or party committee, but cannot limit the number of candidates or party committees you support with your donations.

While campaign finance reform will continue to be a hot-button issue, a direct effect of today’s decision will be to increase the war chests of candidates and parties through greater political donations. Much of those increased funds will ultimately be used for political advertising, redounding to the benefit of media in general, but particularly to local broadcasters.

The Court’s 5-4 decision was not particularly a surprise, as many saw McCutcheon as the sequel to 2010’s Citizens United decision, in which the Court found restrictions on political expenditures by corporations and unions to be unconstitutional. When the Supreme Court released its decision in Citizens United, we all understood the immediate financial implications for media, but no one was quite sure just how great that impact would be. It turned out to be very substantial, completing the multi-decade transition of political advertising from being a “not worth the regulatory headaches” obligation of broadcasters to now being a highly sought after segment of the overall advertising market. Indeed, there is no stronger validation of this than the fact that cash flow multiples used in station acquisitions are based on two-year averages, balancing political year revenue with revenue from a non-political year.

As in 2010, the question is not whether today’s decision will result in more ad revenue for media outlets, but how much more. Given that in recent years the number of donors bumping up against the now-unconstitutional cap measured in the hundreds rather than the thousands, the economic impact of today’s decision is unlikely to match that of Citizens United. However, it may have a more interesting effect. The limit on overall donations effectively forced a political contributor to pick and choose a small number of candidates to support with the maximum ($2600 at the moment) donation, and to turn away others because of the cap. The practical result was that donors tended to focus their contributions on candidates in hotly contested races where the contribution could have the most impact.

With today’s elimination of the overall cap, a donor can make the maximum individual donation to every federal political candidate it wishes to support. The likely result is an increased flow of political contributions to candidates in races previously deemed to be lost causes, creating tighter races through the influx of political ad dollars.

From a political standpoint, this means the number of hotly contested races around the country will increase. From an economic standpoint, it means political ad dollars will flow on a more geographically diverse basis, ensuring that a larger number of local stations benefit, rather than just those in swing states and swing districts. This will be welcome news for stations that previously found themselves missing out on political ad dollars while candidates and parties flung large sums at stations in nearby swing districts. By itself, it may not entirely remove the sting of Monday’s FCC actions, but given enough time, the courts may eventually produce some good news in that regard as well.

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While most presidential candidates were concentrating yesterday on last minute campaign events aimed at swaying undecided voters, independent presidential candidate Randall Terry was instead focused on winning votes at the FCC, filing multiple election day political advertising complaints against broadcast stations.

I wrote last week of an FCC decision holding that a DC-area station had failed to provide Terry reasonable access to airtime as required by Section 312 of the Communications Act. According to the FCC, Terry, an independent presidential candidate known for seeking to air visually disturbing political ads prominently featuring aborted fetuses, was entitled as a federal candidate to purchase airtime because he was on the ballot in West Virginia. While Terry was apparently not on the ballot in DC, Maryland, or Virginia, the area primarily served by the station, the FCC concluded that the station’s Noise Limited Service Contour covered nearly 3% of the population of West Virginia, making Terry a legally qualified candidate for purposes of demanding airtime on the DC-area station.

Apparently buoyed by that success, Terry yesterday filed complaints against five Florida television stations arguing that he has once again been denied reasonable access rights. What makes these filings odd is that, although dated November 5th, they were not filed with the FCC until November 6th, election day. Even if Terry actually intended to file them on November 5th, that would still be too late for the FCC to take any meaningful action before the election was over. That means Terry has already begun the process of positioning himself for the next election, and is perhaps looking to establish friendly FCC precedent now that can be used against stations then.

What also makes Terry’s Florida filings notable is that he is not seeking reasonable access as a candidate for president (presumably because he was not on the presidential ballot in Florida). Instead, his reasonable access complaints are based upon being on the ballot as a candidate for the U.S. House of Representatives, representing South Florida’s 20th Congressional District. Terry alleges in his complaints that all five stations cited Section 99.012(2) of the Florida Statues as a reason for not accepting his ads. That Section provides that “No person may qualify as a candidate for more than one public office, whether federal, state, district, county, or municipal, if the terms or any part thereof run concurrently with each other.” Since Terry was on the ballot in a number of states running for president, the stations argued that the Florida Statute prevented him from also appearing on a ballot in Florida as a candidate for the U.S. House of Representatives. The stations’ argument is that Terry was therefore not a legally qualified candidate for federal office in Florida, and thus not entitled to reasonable access.

Terry’s response to that argument cites no caselaw, FCC or otherwise, but argues by analogy that stations did air Romney/Ryan ads in Florida despite Ryan also being on the ballot in Wisconsin to keep his House seat. That is not a particularly strong argument, however, as I suspect that stations in Florida were actually airing Romney ads, and Romney was unquestionably a legally qualified candidate on the ballot. If Ryan also appeared in those ads, that would not alter a station’s obligation to provide reasonable access to Romney for his ads, and the “no censorship” provision of the Communications Act means that Romney is free to present anyone else he wants in his ads without interference.

Since the FCC is not generally in the business of interpreting state election laws, the central question in these complaints is whether the FCC will defer to a licensee’s reasonable judgment as to who is a legally qualified candidate in the licensee’s own state. If not, broadcasters will find that once simple reasonable access analysis is growing steadily more complex and dangerous. As foreshadowed by last week’s post, reasonable access issues seem destined to become a growing part of future elections. Yesterday’s Terry complaints appear to be an effort to turn up the heat on stations, even where there is no useful remedy available to a candidate whose multiple campaigns have already concluded.

Copies of the Terry complaints can be found here.

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The FCC today released a political advertising decision that, while perhaps not surprising, will still alarm many broadcasters. Back in February, I wrote a pair of posts (here and here) about Randall Terry, who was then seeking airtime during the Superbowl to air ads featuring graphic footage of aborted fetuses, ostensibly in support of his effort to become the presidential nominee of the Democratic Party. It appears that the Democratic Party didn’t want him, as the Democratic National Committee sent stations a letter asserting that Terry was not a candidate for the Democratic nomination and was not entitled to the broadcast airtime benefits legally qualified federal candidates receive.

In my first post in February, I noted that Section 312 of the Communications Act, which requires broadcast stations to grant “reasonable access” to airtime for federal candidates, was growing increasingly susceptible to a First Amendment challenge, and that the situation presented by the Terry ads — broadcasters being forced to air visually repugnant material that they would otherwise never subject their audience to, regardless of their own political bent — represents just the kind of scenario that might motivate broadcasters to challenge this statutory requirement. It certainly gives a judge or Congress an appealing set of facts to consider overturning or reforming the current law.

It is also worth noting that broadcasters are not allowed to channel such ads into parts of the day when children are less likely to be in the audience. This inability to channel such ads away from children has always been curious, as a candidate can hardly complain about being unable to reach an audience that is too young to vote anyway (and the candidate is of course free to reach out to them with more age-appropriate ads in any event). Indeed, the FCC, which has done a respectable job over the years of applying the Communications Act’s political ad requirements in the real world, once held that broadcasters could choose to shift such ads away from kid-friendly hours. The FCC was rebuffed in court, however, in a decision that focused entirely on how such channeling could infringe upon a candidate’s freedom of expression, seemingly oblivious to the freedom of expression of stations unwilling to subject their child viewers to such content.

As I wrote in my second post, the FCC was able to avoid a confrontation over recent Terry ads for a bit longer when it ruled in February that Terry was not a legally qualified presidential candidate on the Illinois ballot (where the station being challenged was located). It also ruled that even had that not been the case, the station was reasonable in turning down a request for Superbowl ad time since it is a uniquely popular event in which the station might well find it impossible to accommodate ads from competing candidates demanding “equal opportunities” under the Communications Act to air their ads in the Superbowl as well.

Knowing how attractive the plum of guaranteed ad time at a station’s lowest unit charge is to anyone wishing to get their message out there, it came as no surprise when the Terry campaign, now running Terry as an independent candidate, filed another complaint, this time against Washington, DC station WUSA(TV). Terry sought access on the basis of being a legally qualified candidate in West Virginia, a small portion of which, he asserted, falls within WUSA(TV)’s signal.

The station rejected Terry’s ads, noting that Terry was not a legally qualified candidate in its DC/Maryland/Virginia service area. When challenged at the FCC, it submitted a Longley-Rice signal contour map, which takes blocking terrain (e.g., mountains) into account, and which indicated that the station’s actual coverage of West Virginia was slim to none (“de minimis” in FCC parlance).

In determining where reasonable access must be granted, the FCC looks at a station’s “normal service area”, and for TV, it has generally considered a station’s Grade B contour to be the “normal service area”. The transition to digital TV, however, has eliminated the analog concept of a Grade B contour. In reaching today’s decision, the FCC concluded that since the FCC considers a digital station’s Noise Limited Service Contour (NLSC) to be the equivalent of an analog Grade B contour in other FCC contexts, it is appropriate to use the NLSC as the appropriate “normal service area” for purposes of reasonable access complaints. While engineers readily acknowledge that Longley-Rice contour analysis is a more accurate predictor of actual signal reception than the NLSC, Longley-Rice analysis can be complex, and it appears the FCC opted for the simplicity and bright line certainty of using the NLSC. While the NLSC represents a somewhat hypothetical coverage area, NLSC coverage maps are widely available, including on the FCC’s own website, making it an easier tool for candidates to utilize in planning their media buys.

Since, according to the FCC, WUSA(TV)’s NLSC covers nearly 3% of West Virginia’s population, the FCC concluded in today’s decision that the station was unreasonable in rejecting Terry’s ads. While the FCC’s decision is a pragmatic one, it adds more kindling to the reasonable access fire, as stations are now forced to offend their audiences with content from candidates that are legally qualified in any area that is within their NLSC service area, whether or not actual TV reception exists. This not only increases the number of reasonable access requests stations may face, but will further antagonize their viewers, who might understand why a station has to air ads for a candidate that is on the ballot in their area, but will be particularly perplexed as to why a station is airing offensive content from a candidate they have never heard of and cannot vote for or against. When Congress drafted the reasonable access and “no censorship of political ads” provisions of the Communications Act, it probably assumed that extreme content would not be a problem since a candidate was unlikely to air such content if he or she wanted to be elected. However, that logic evaporates when the viewing audience doesn’t even have the opportunity to vote against such a candidate.

While the FCC appears to have been concerned that a more complex contour analysis could be gamed by a broadcaster, the result instead unfortunately encourages issue activists of every persuasion to game the system for their own gain. In the present case, it is pretty obvious that buying very expensive airtime in the nation’s capital is not a cost-effective way of reaching less than 3% of the voters in West Virginia, and that the real audience is the large DC-area population for which Terry was apparently unable to qualify to be on the ballot. That became even more obvious when WUSA(TV) provided the Longley-Rice contour map indicating that the station actually had little or no coverage in West Virginia, but the Terry campaign nonetheless continued to press for airtime on the station.

The obvious path for future issue activists is to declare their candidacy for federal office, but instead of doing the hard work of qualifying for the ballot in large population centers in order to be heard, taking the easier path of qualifying for the ballot in less populated surrounding areas that are just within the fringe coverage of a big market station’s predicted NLSC coverage. By following this formula, they get guaranteed access to airtime in front of a large market audience, and at much lower rates than commercial advertisers would pay, with the added benefit that the station cannot edit the ad or decline to air it no matter how offensive the content.

For those who make the not unreasonable argument that putting up with some questionable exploitation of the political ad rules is necessary to ensure that legitimate candidates can get their message out, consider the following: only federal candidates have a right of reasonable access. In this heated political season, particularly in the heavily contested large population centers, stations have been forced to preempt the spots of many of their normal commercial advertisers to make room for political spots for federal candidates (seen a car ad lately?), and local and state candidates have similarly suffered from having their ads pushed aside to make way for federal candidate ads. As a result, forcing broadcasters to air content that offends adult viewers, disturbs child viewers, and damages the relationship of trust between the broadcaster and its public harms more than just the broadcaster and its audience. It harms each and every local and state candidate that actually is on the ballot in a station’s market. They too would like to get their message out, but in their case, to people who can actually vote for them and that are affected by who is elected to represent them. To the extent that “all politics is local”, it make little sense to shunt aside these local and state candidates merely to guarantee access to those using the Communications Act’s “federal formula” to game the system for their own agendas.

While today’s decision is not one that will be welcomed by broadcasters, make no mistake, it is not the FCC’s fault that we have reached this point. The reasonable access requirements for federal candidates are encoded into the Communications Act, and there is only so much the FCC can do in applying the statute in a political landscape that is far more complex than those who drafted these provisions likely ever contemplated. With election season nearly over, and many stations sold out of airtime through the election, the immediate impact of today’s decision will be limited. It is a safe bet, however, that the underlying issue will continue to haunt future elections.

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In what seems to be the longest presidential campaign in history, tomorrow, September 7th, marks the beginning of the final stretch. That’s the first day of Lowest Unit Charge Season, the 60-day period before the November 6th, 2012 general election. During that time (which also occurs in the 45 days before a primary election), broadcast stations may charge no more than their lowest rate for each particular class of ad time purchased for a “use” by a legally qualified candidate.

Of course, while the concept sounds simple enough, its implementation at stations with dozens of different classes of ad time has proven to be a biennial headache for broadcasters. However, particularly for stations in political swing states, it can be a fairly profitable headache, and well worth the regulatory aspirin needed to get through it.

Contrary to a common misconception, Lowest Unit Charge applies to all legally qualified candidates during the LUC window, and not just to federal candidates. Also, keep in mind that the 60-day Lowest Unit Charge window is relevant only to the issue of rates. Other political broadcast rules, like the requirements for reasonable access for federal candidates and equal opportunities apply as soon as there are enough legally qualified candidates to trigger them (one in the case of reasonable access, and at least two in the case of equal opportunities, since there has to be a competing candidate to demand an equal opportunity in response to the first candidate’s airtime).

If the statements above have left you perplexed, confused, or questioning the very meaning of your existence, you should definitely take some time to look at the current edition of our Political Broadcasting Advisory. The Advisory fills in lots of detail on the matters discussed above, as well as myriad other issues created by the complexities of selling (or buying) political ad time in a regulated environment.

So, update the rate card attached to your Political Disclosure Statement, and get ready for the final stretch of a political season that has been excruciatingly long for viewers and listeners, but which will be over all too quickly for many broadcasters.

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By Lauren Lynch Flick and Paul A. Cicelski

As promised, yesterday morning the FCC conducted a public demonstration and webcast of the interface it has developed to host the online public inspection files for television broadcast stations. As we noted last week, the database is being developed in connection with the FCC’s recent Order requiring television broadcast stations to post their public inspection files online in a central, Commission-hosted database. These rules go into effect August 2, 2012. An archived version of the FCC’s webcast can be found here.

FCC Media Bureau Chief Bill Lake opened the demonstration by emphasizing that the FCC is focused on making it easier for broadcasters to use the system and for the public to access it than has been the case with the FCC’s legacy databases and paper-based public files. Greg Elin, the FCC’s Chief Data Officer, echoed Lake’s comments and demonstrated how the new interface brings together in one place items that have historically been stored in different locations on the FCC’s website, such as having the station’s contour map from the engineering database and its current authorization accessible from the main page for the station. The new system also replaces FCC Form numbers and abbreviations with plain English and will permit stations to upload documents in most major formats to make it more “user-friendly.” Elin also said that the FCC plans to use dedicated hardware for broadcasters to use to upload items so that surges in interest on the public side will not prevent broadcasters from managing their online file pages.

The FCC has been working on such issues for some time in connection with a planned Consolidated Licensing System (CLS) which it has demonstrated on a number of occasions over the past few years. The CLS is intended to consolidate and replace the FCC’s legacy filing databases, providing uniformity in electronic filing across all of the different Bureaus and types of authorizations. Media Bureau licensees are slated to be the first to use the new system when it’s ready. It appears that the FCC has integrated the public file interface with that on-going work, providing a uniform “look and feel” between the public file interface and what might ultimately become the sole online filing location on the Commission’s website.

It remains to be seen after watching the presentation the extent to which the interface will be ready to go by the FCC’s August 2 deadline. Lake and Elin each indicated that they expected that the interface would “evolve” over time as experience with its use is gained. Moreover, Elin stated that, while most issues for the August 2 launch have been ironed out for Mozilla and Firefox users, a number of applications associated with the interface do not yet function properly with Internet Explorer. It also appears that, although the database will be connected real-time to the FCC’s current Consolidated Database System (CDBS) allowing applications that are filed to be instantaneously included in the new database, the ability to effectively “search” the new database is still a way off. Finally, it was not clear how stations will be able to both (i) allow multiple employees, engineers and counsel to access the station’s page to upload and police the contents of the public file and (ii) monitor those various agents that might act on its behalf, especially if online electronic filing of applications is integrated with this interface.

Regarding the political file, which network affiliates in the top-50 markets must begin populating with newly created political documents beginning August 2, Elgin said that the FCC intends to establish a series of files and sub-files for stations to use based on data imported from the Federal Election Commission’s website. Specifically, the FCC’s database will include separate files for federal, state, and local election ad buys. Under those, FCC proposes to include sub-folders, such as one for each Congressional district, then further sub-folders for each candidate as well as for non-candidate specific issue ads. Stations will be given tools that will allow them to retain some flexibility when designing their individual online political files, but how much customization the new database will allow remains to be seen. The FCC will support file-sharing programs that can allow multiple employees at a station to upload information about ad buys, but stations will still have to address the issues regarding user identification noted above.

Given the FCC’s efforts to make the interface useable in a variety of ways, TV stations would benefit from the opportunity to test the system, to see which file formats work best for them, to learn and implement file sharing programs, and to set up internal controls for employee access to the station’s page. Unfortunately, while Elgin did indicate that the system would be up and running by August 2, he was unable to provide a date specific regarding when the database will be available for such testing. Remembering the difficulties encountered with the roll out of the new commercial ownership report, early testing will likely be key to the success of the new database.

Historically, each time the FCC has introduced an electronic filing form to replace a paper-based form, it has allowed broadcasters a significant transition time period to acclimate to the new form. Clearly, such a timeframe has not been contemplated here so far. Therefore, at a minimum, it would be appropriate if the FCC withheld all public inspection file enforcement activity against television stations until such a time as it is certain that the new interface is functioning smoothly and broadcasters have had an opportunity to familiarize themselves with the new system.

Of course, there is the issue of the NAB’s pending emergency request with the D.C. Circuit Court of Appeals to stay the August 2 effective date of the rules, which could have the same effect. Check back frequently for updates as there is sure to be plenty of additional news prior to August 2.

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As I reported last week, the FCC’s new rules requiring television stations to replace the public files they maintain at their studios with electronic files to be hosted online by the FCC are currently set to become effective on August 2, 2012. Since that report, a lot of events have occurred, and the focus of this proceeding has officially shifted from the FCC to the U.S. Court of Appeals for the D.C. Circuit.

To no one’s surprise, the FCC earlier today issued an Order denying the National Association of Broadcaster’s (NAB) Petition for Stay of the FCC’s new online public inspection file rules. In its Order, the FCC states it is denying the NAB’s request because the NAB was unable to satisfy any of the four factors factors supporting grant of a stay. According to the FCC, the NAB failed to show (1) that the new rules would cause irreparable injury; (2) that the NAB is likely to prevail on the merits in its appeal; (3) that other interested parties will not be harmed if a stay is granted; and (4) that a stay would serve the public interest. Essentially, the FCC regurgitated its prior findings in deciding to move full speed ahead with the new rules. However, TV broadcasters have been seeking relief from the new rules, which will, without question, increase compliance burdens on TV stations while needlessly duplicating records already required to be maintained online by the Federal Election Commission.

As a practical matter however, today’s action by the FCC is more of a procedural hurdle that had to be cleared by broadcasters on their way to court rather than a true substantive analysis of the merits of the court appeal. As I reported last month, the NAB has already filed a Petition for Review asking the U.S. Court of Appeals for the D.C. Circuit to vacate the FCC’s action “on the grounds that it is arbitrary, capricious, in excess of the Commission’s statutory authority, inconsistent with the First Amendment, and otherwise not in accordance with law.” Also, earlier this week, in anticipation of today’s denial by the FCC, the NAB filed a separate Emergency Motion with the court asking the court to hold the new rules in abeyance. The NAB is asking the court to stay the August 2 effective date of the rules until the court has had an opportunity to consider the NAB’s Petition for Review.

According to the NAB’s request for a stay, the FCC has “engaged in arbitrary and capricious decisionmaking by disregarding the competitive harm that is likely to result from the Order and departing from the provisions of the Bipartisan Campaign Reform Act (BCRA.)” The NAB also states that its “members will suffer irreparable harm absent a stay because the Order compels television stations to post the prices for specific advertisements to a public website immediately after the sales occur.” The NAB’s request also noted that the new rules “will place NAB’s members at a distinct disadvantage to their non-broadcast competitors, who will not be required to post rate information on the Internet.”

While all of this is going on, the FCC has announced that it will be conducting a public demonstration of its proposed online public inspection file database next Tuesday, July 17, 2012, at 10:00 a.m., only two weeks or so prior to the date the new rules are scheduled to go into effect. Those of you interested in participating online can do so by logging in to I will be posting a follow-up piece summarizing next week’s demonstration.

As the levels of activity on multiple fronts indicate, this proceeding is far from over. To be sure, obtaining a court stay is not an easy task. That said, this is the rare case where (despite the FCC’s contrary ruling), the irreparable harm to broadcasters is apparent, and the case on the merits is strong. While the court ponders the stay request, TV broadcasters need to be preparing themselves for the the process of uploading their public inspection files by the August 2 deadline. Whether or not a last-minute stay is granted, the next two weeks will be a white-knuckle ride for TV broadcasters.

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Earlier today, the FCC announced in the Federal Register that the Office of Management and Budget (OMB) has approved the FCC’s new rules requiring television stations to replace the public files that they maintain at their studios with electronic files that will be hosted online by the FCC. As a result of today’s announcement, the online file rules become effective on August 2, 2012. Included among the documents that must be made available online are stations’ ad sales records for political ads–a requirement widely speculated to be a response to the Supreme Court’s decision in the Citizens United case.

As I reported recently, what this means is that all full-power and Class A television stations will be required to upload any newly created public file documents to a not-yet-disclosed database managed by the FCC starting August 2. Stations will have until January 3, 2013, to post their current public file documents online, with the exception of letters and emails from the public which are not required to be uploaded.

With respect to political file documents, affiliates of ABC, CBS, NBC or Fox located in the top-50 television markets will have to begin uploading all newly created political file documents to the FCC’s database on August 2, 2012. The political file requirement will be phased in so that all other television stations must comply with the political file uploading requirement by July 1, 2014. Until July 1, 2014, stations not in the top-50 markets and all stations not affiliated with the top-four networks, regardless of the size of the market they serve, are exempt from the requirement. The FCC has stated that it plans to issue a Public Notice no later than July 1, 2013 seeking comments on the impact that the posting requirement has had on television stations to that point and to evaluate the effectiveness of the process. Items placed in a station’s political file prior to August 2 will not have to be posted online.

Whether any of these dates will hold remains to be seen.

First, the National Association of Broadcasters (NAB) has already filed a Petition for Review of the rules in the U.S. Court of Appeals for the District of Columbia Circuit, even though the deadline to do so is not until July 10. The NAB, along with 46 State Broadcasters Associations and others, had opposed the rules when the FCC proposed them, stating that they were riddled with omissions, greatly underestimated the burden on television stations, and were otherwise duplicative of reporting required by the Federal Election Commission (FEC). However, the FCC and the OMB rejected these claims, seemingly turning a blind eye to the voluminous record in the proceeding indicating that the proposed rules will increase burdens on television stations while merely duplicating records already required to be filed with the FEC. As a result, the NAB’s court challenge argues that the FCC’s action in adopting the rules “infringes on . . . First Amendment free-speech rights, exceeds statutory authority, and is arbitrary and capricious.” In addition, the NAB filed a motion for stay with the FCC earlier today asking the Commission to delay implementation of the rules until the court has had an opportunity to review the NAB’s Petition for Review.

Second, and of more practical concern, the FCC will now have to scramble to ready its online filing database and educate the public in its use before the August 2 effective date rolls around. The FCC has not yet announced when the database will be available for stations to “test” the system in advance of the rules going into effect as it claimed it would do when it adopted the new rules. The Commission did announce today that it will soon schedule user testing and educational webinars for the online public file to ensure that the uploading of materials by broadcasters can be done “smoothly and efficiently”.

Many will remember the chaos that occurred in 2009 and 2010 as a result of the FCC’s decision to adopt a new electronic Ownership Report filing requirement that increased both the amount of data to be collected and the number of reports to be submitted, but promised to mitigate the increased burden by making the data easy to copy into multiple filings. Repeatedly, the FCC’s system ground to a halt under the heavy load, precluding filers from working with the data they had painstakingly entered. As a result, the filing deadline had to be repeatedly extended until the bugs were worked out. Glitches such as this are inevitable with an untested system, which makes one wonder how the FCC believes it can make it all work before the August 2 deadline. It would be unfortunate if the combination of the Citizens United ruling and the impending November 6 election drove the FCC to once again implement a filing database that is not ready for prime time, forcing broadcasters to serve as beta testers.

Needless to say, given the NAB’s Petition at the court, the other likely court and FCC challenges to the rules, and the hurdles the FCC faces in implementing the online database, the odds are not high that stations will be fully uploaded by the August 2, 2012 deadline. Unfortunately, though, television stations can’t afford to wager on the speed with which the FCC will move in this case. Stations will therefore need to start moving now to ensure they are ready to post their files by August 2, 2012, and should remain alert to any FCC announcements informing them exactly how the new filing system will work.

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As I discussed last month, the FCC has adopted rules requiring television stations to replace their existing locally-maintained public inspection files with digital files to be placed online on an FCC-hosted website, including stations’ detailed political records. The majority of television stations will not be required to begin posting their political file documents online until July 1, 2014, but stations in the top-50 markets that are affiliated with ABC, NBC, CBS or Fox will be required to comply once the new regulations go into effect, assuming that the rules survive challenges made by TV broadcasters.

Broadcasters have launched a three-pronged attack against the FCC’s proposed new regulations with a series of recent filings with the U.S. Court of Appeals for the D.C. Circuit, the Office of Management and Budget (OMB) and the FCC. The core thrust of the broadcasters’ challenges are focused on the requirement that TV stations disclose online very sensitive rate information about political advertising. Broadcasters have assailed the proposed rules for dramatically increasing regulatory burdens on TV stations while at the same time failing to require similar online disclosures by cable TV systems or other competitors to broadcast television.

The first shot fired after the FCC adopted the new regulations was by the National Association of Broadcasters (NAB) in a Petition for Review filed with the U.S. Court of Appeals for the DC Circuit. In its Petition, the NAB is asking the Court to vacate the FCC’s action “on the grounds that it is arbitrary, capricious, in excess of the Commission’s statutory authority, inconsistent with the First Amendment, and otherwise not in accordance with law.” An NAB spokesman summed it up by charging the FCC with “forcing broadcasters to be the only medium to disclose on the Internet our political rates” and jeopardizing “the competitive standing of stations.”

A number of broadcast groups opened up a second front against the FCC’s new rules earlier this week, with filings asking the OMB to take a hard look at the FCC’s proposed regulations under the Paperwork Reduction Act of 1995 (PRA), and to invalidate the rules due to the FCC’s failure to comply with the PRA. On behalf of 46 State Broadcasters Associations, Dick Zaragoza and I filed comments in the proceeding arguing that the FCC violated the PRA by, among other things, failing to analyze the large burdens the proposed new regulations will have on television stations in general, and on small television station businesses in particular. We also advanced the argument of the NAB and others that the new rules are unnecessarily and impermissibly duplicative of the records already required to be maintained online by the Federal Election Commission under the Bipartisan Campaign Reform Act of 1992.

In the third salvo, a coalition of broadcast groups calling themselves the “Television Station Group” is fighting the adoption of the rules at the FCC. This group filed a Petition for Reconsideration with the FCC asking the Commission to modify the proposed rules due to concerns with the requirement that stations reveal online precisely how much they charge for political advertising. The law requires that broadcasters charge their lowest unit rate for political ads during a pre-election window, and the Television Station Group told the FCC that if those rates are widely and easily accessible on an FCC-hosted website (and not just to candidates), commercial advertisers may make requests for that same low rate. The unintended effect could be to force broadcasters to homogenize their rates so that every ad costs the same, eviscerating the current cost advantage to candidates of being charged only the “lowest unit rate”. In short, the Television Station Group argues that the disclosure of price information is anti-competitive and disrupts the commercial advertising marketplace because “stations’ political ad rates, by law, must be based on commercial advertising rates.”

Although the new rules are under fire on a number of fronts, it remains to be seen if broadcasters will be able to successfully block the FCC’s efforts. Before the FCC’s regulations can go into effect, at a minimum, they will have to be approved by OMB through the PRA process which, in this case, will not likely be the usual perfunctory rubber stamp the FCC often receives from OMB. Also, Court of Appeals challenges to the rules are not due until July 30, 2012, and, at some point, parties are likely to ask both the FCC and the courts to hold the effective dates of the rules in abeyance until the broadcasters’ multiple challenges can be heard. In other words, the battle over the FCC’s proposed online public/political file rules is far from over.

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