With campaign spending essentially unlimited, 2014 is certain to be another record-breaking year for political advertising sales. Before the election season gets too hectic (if it isn’t already), we strongly recommend that all station staff handling political buys and/or maintaining the political file take some time to brush up on the key rules governing political broadcasting.
Given the complexity of the political broadcasting requirements, we could write a tome on the subject, but for those of you Very Busy People (we know your type), we offer you the following quick (relatively-speaking), high-level refresher course covering the basics. Although this guide certainly doesn’t cover everything, it should serve as a useful resource to help you spot the key issues and ask the right questions.
The following guide follows a simple Q&A format, and is split into two sections. The first section covers “candidate ads” – i.e., those sponsored by candidates (or their authorized campaign committees). The second section covers “third-party ads” – i.e., those that are sponsored by – you guessed it – a third party, such as an independent political action committee, a political party, a corporation or an advocacy group.
WHAT TYPES OF SPOTS/PROGRAMS TRIGGER THE FCC’S POLITICAL BROADCASTING RULES?
The FCC’s political broadcasting rules – e.g., reasonable access, lowest unit rate, equal opportunities, etc. – generally come into play only when a spot or program involves a candidate “use.” A candidate “use” is any appearance by a candidate – by identifiable voice or picture – that is positive in nature – regardless of what the candidate talks about. A typical “use” would be a candidate’s spot advocating his or her election; however, a “use” could also be a candidate’s positive appearance in, say, a local charity telethon or an old movie (think Ronald Reagan in “Bedtime for Bonzo”).
Keep in mind, however, that the FCC’s rules only apply to “legally qualified candidates” who have fulfilled all of the requirements to run for a particular office. Whether a candidate is legally qualified is usually pretty obvious; however, if you’re not sure, it’s okay to ask for proof. It is up to the candidate, not the station, to demonstrate that he or she meets the candidate requirements under applicable federal, state or local law.
HOW MUCH TIME DO I HAVE TO SELL TO CANDIDATES?
Federal candidates – i.e., candidates for President, Vice President, U.S. Senate, and U.S. House of Representatives – are entitled to “reasonable access” to buy spots on broadcast stations. Stations must sell time to federal candidates throughout their campaign and cannot set any predetermined limits on the spot inventory made available to federal candidates. The only exception is that stations can exclude federal candidates from news programs.
State and local candidates, on the other hand, do not have any right of access. Accordingly, stations can set limits on their inventory and/or accept ads only for certain races; or decline ads altogether. However, if you accept one candidate, you must treat all other candidates in the same race evenhandedly. Also, remember that if you afford time to state and local candidates, all other political rules apply, including lowest unit rate and equal opportunities obligations.
WHAT IS THE LOWEST UNIT RATE AND WHEN DOES IT APPLY?
During the 45-day period preceding a primary, primary run-off or caucus election and the 60-day period preceding a general or special election, all spots sold to candidates must be provided at the station’s “lowest unit rate.” The lowest unit rate (or “LUR”) is the amount that is offered or charged to the station’s most preferred commercial advertiser for the same class (e.g., immediately preemptible spot) and amount of time (e.g., 30 seconds) for the same period (e.g., 11:00 news or morning drive time). Outside the applicable LUR windows, stations can charge “comparable rates” charged other similarly-situated commercial advertisers.
Remember that the LUR does not apply to third-party ads or Internet advertising. The LUR only applies to authorized candidate “uses.” If necessary, you can request that the party buying the ad provide you with documentation confirming that the spot is authorized by the candidate.
HOW DO I VALUE SPOTS IN A PACKAGE, LONG-TERM OR BONUS BUY DEAL?
Spots sold in package plans, long-term contracts or bonus buy deals must be counted in the LUR calculation for relevant time periods even if the candidate does not choose to purchase in accordance with the terms of the deal. Candidates cannot be subject to volume purchase requirements and are permitted to “cherry pick” among the various components of the deal. This is the case with respect to multi-platform packages that stations increasingly are offering to advertisers, which may consist of spots on a station’s primary channel, one or more multicast channels and the station’s website. During LUR windows, candidates may choose among the various parts of such packages and cannot be required to purchase spots on any particular platform.
So what is a station to do? At the time the sales contract is entered, the station should create a separate internal memo that allocates the “true values” of each spot in the package, long-term contract or bonus buy deal (such that those spots with more value are accorded a higher rate), and these values (rather than the rates shown on the face of the contract) will be used to calculate the LUR for each individual component of the deal. This memo should not be placed in the station’s public file, but simply retained in its internal files for future reference.
And there’s one very important thing to remember when assigning values to bonus spots: THE VALUE OF BONUS SPOTS IS NOT ZERO! Rather, the station should use its reasonable, good faith discretion to allocate a portion of the contract price to the bonused ads. That value must be taken into account when determining the value of each spot that is part of the overall contract. For example, if a station charges $100 for 10 morning drive spots, and throws in 2 “free” overnight spots as a bonus, unless the station allocates separate values to the spots, the FCC will consider all of the spots to be equal (i.e., each of the 12 spots purchased for $100 would be valued at $8.33), thus decreasing the value of the morning drive spots for LUR purposes – which you would likely want to avoid.
HOW DOES THE BI-PARTISAN CAMPAIGN REFORM ACT (BCRA) AFFECT THE LOWEST UNIT RATE?
Under BCRA, to obtain the LUR, federal candidates must certify in writing to the station that (i) the spots they will air do not contain a reference to an opposing candidate or (ii) if there is such a reference, the spots will include the following additional disclosure:
- For TV: For at least 4 seconds at the end of the spot, a clear image of the candidate and a clearly readable printed statement identifying the candidate, stating that the candidate approved the spot and that the candidate or an authorized committee paid for the spot.
- For radio: An audio statement by the candidate identifying himself/herself and the office sought, indicating that the candidate has approved the broadcast.
If you run into a candidate who doesn’t meet the above requirements, you must still air the non-compliant spot; however, you have a few options for dealing with the situation, so we advise you to promptly consult your attorneys.
BCRA also requires that federal candidate-sponsored ads include so-called “Stand By Your Ad” disclosures – e.g., “I’m Joe Candidate and I approved this message” – whether or not the spot mentions an opposing candidate. Although the “Stand By Your Ad” requirements are very similar to the LUR-related disclosures specified above, they are a bit more detailed. However, any failure to comply with these requirements is the candidate’s problem, not the station’s, so broadcasters need only worry about the LUR-related disclosures specified above.
WHAT IS THE SPONSORSHIP IDENTIFICATION REQUIREMENT FOR CANDIDATE ADS?
All spots must include a sponsorship ID stating that the ad was “paid for” or “sponsored by” the entity actually paying for the time. The sponsorship ID must reflect the true identity of the party paying for the ad. For TV, the sponsorship ID must be visual, readable (i.e., equal to or greater than 4 percent of the vertical picture height) and on the screen for at least 4 seconds. Also, if a candidate’s spot is paid by someone other than the candidate, the spot must state whether that person or entity is authorized by the candidate.
WHAT IS A POLITICAL DISCLOSURE STATEMENT?
So that candidates can make informed buying decisions, the FCC requires that stations fully and accurately disclose to candidates information concerning the station’s current advertising sales practices and policies. This information usually takes the form of a station “Political Disclosure Statement.” Although the FCC does not require that the information be provided to candidates in writing, we strongly advise stations to prepare written disclosure statements to avoid disputes as to what information has been provided to candidates. Also, it’s very important that the disclosure statement be kept up-to-date throughout the election season.
At a minimum, the disclosure statement should include information concerning (i) the classes of time available for purchase; (ii) the rates that will be charged for each class; (iii) how and when preemptions may be made and the likelihood of preemption for each class; (iv) payment policies; and (v) any other selling practice that could reasonably affect political buying decisions (for example, make-good rights).
WHAT ARE EQUAL OPPORTUNITIES?
When there has been a “use” of a station by one candidate, legally qualified opposing candidates for the same office (whether federal, state or local) must be given an equal opportunity to “use” the station in a manner comparable to the first candidate. Stations are not required, however, to notify opposing candidates of their equal opportunities rights; instead, these candidates must make their equal opportunities claims within seven days after the triggering “use” – which is why it’s very important that information about political buys and other “uses” be placed in a station’s political file promptly.
For example, if Mayoral Candidate A buys a schedule of prime time spots, then the station must allow Mayoral Candidate B an equal opportunity to purchase the same amount and desirability of time, provided that Candidate B requests such time within seven days after Candidate A’s first spot airs. The equal opportunities obligation also applies where a free “use” is made. For example, if the station airs an old movie in which Candidate A appears, then Candidate B would have a right to request free comparable time on the station.
Please note, however, that candidate appearances on many news and public affairs programs are exempt from the equal opportunities requirements. These exempt “uses” include candidate appearances on bona fide newscasts, news interview programs, news documentaries and on-the-spot coverage of news events.
WHAT IS THE “NO CENSORSHIP” RULE?
Stations cannot censor or edit a candidate’s ad, except to provide the required sponsorship identification information (discussed above). Unless the spot is obscene or otherwise violates a felony statute or another FCC rule, a station must broadcast a candidate’s ad uncensored – no matter how offensive, distasteful or defamatory the ad may be. Because stations cannot censor candidate ads, broadcasters are immune from civil liability for the content of such ads. On the other hand, the “no censorship” rule (and, hence, the station’s shield against potential liability) does not apply to third-party ads, so stations may refuse to air such ads or demand edits if they’re uncomfortable with the ad’s content.
WHAT NEEDS TO BE IN THE PUBLICLY AVAILABLE POLITICAL FILE, AND WHERE MUST THAT FILE BE KEPT?
All stations must maintain and permit public inspection of a political file that contains specific information concerning all requests for broadcast time made by or on behalf of candidates and, thanks to BCRA, certain third-party ads (discussed in the next section below). For radio stations, this file is kept at the station’s main studio. Television stations, however, are subject to an online filing requirement. Specifically, top-four network-affiliated television stations in the top 50 markets must maintain an online political file. Effective July 1, 2014, all other television stations must upload their political files to the FCC’s online public inspection files website.
For ads by candidates or their authorized committees, the file should include:
- All requests for time (e.g., emails, availability requests, etc.)
- Nature and disposition of request (i.e., how did station respond)
- Name of candidate and office sought
- Candidate’s authorized committee
- Name of committee’s treasurer
- Schedule of time purchased (i.e., spot length, classes of time, rates charged)
- Dates and times pots aired
- Any other written information relevant to the order (e.g., makegoods, LUR rebates)
The information listed above can be provided on contracts and invoices, but should be placed in the political file as soon as possible. Also, if there is a non-advertising appearance by a candidate (e.g., a candidate appears on a program not covered by one of the news exceptions to the equal opportunities rule), information regarding that non-advertising “use” should be noted in the political file.
DO I HAVE TO ACCEPT THIRD-PARTY ADS?
No, a station can reject a third-party ad in its discretion if the ad is not sponsored or authorized by a candidate or his/her official committee.
WHAT CAN I CHARGE FOR A THIRD-PARTY AD?
Third-party ads are not entitled to lowest unit rates. Stations can charge prevailing rates charged other commercial advertisers.
WHAT IS THE SPONSORSHIP IDENTIFICATION REQUIREMENT FOR THIRD-PARTY ADS?
Just like any other commercial ad, the spot must include a sponsorship ID stating that the ad was “paid for” or “sponsored by” the person or entity actually paying for the time.
DO EQUAL OPPORTUNITIES APPLY TO THIRD-PARTY ADS?
Generally, no; however, if a third-party ad includes the favorable appearance of a candidate – and is therefore a “use” – opposing candidates can request equal opportunities rights.
WHAT NEEDS TO BE IN THE PUBLICLY AVAILABLE POLITICAL FILE FOR A THIRD-PARTY AD?
Except as noted below, data about third-party ads does not have to be placed in the political file:
- If the spot includes the favorable appearance of a candidate, it will be considered a “use,” and general information about the order should be placed in the file (e.g., spot length, dates and times spots aired, etc.).
- If the spot concerns a “controversial issue of public importance” (e.g., ballot propositions, referenda, constitutional amendments, etc.) and the sponsor is a corporation, committee or group, the file must also include a list of officers, directors or committee members of the sponsoring organization.
- Pursuant to BCRA, if the spot involves a “political matter of national importance” (i.e., relates to a candidate, a federal election, or a “national legislative issue of public importance”), the station must collect all information normally collected for a candidate spot, plus (i) the name of the candidate, if any, referred to in the spot; (ii) the election, if any, referred to in the spot; (iii) the issue, if any, referred to the in the spot; (iv) the name of the person purchasing the time; and (v) the name, address and phone number of a contact person for the entity sponsoring the ad.
With regard to this last bullet point, exactly what constitutes a “political matter of national importance” is as yet unspecified; however, the FCC has advised us that they will defer to a station’s “good faith” discretion.
WHAT IF SOMEONE COMPLAINS ABOUT THE CONTENT OF A THIRD-PARTY AD AND DEMANDS THAT THE STATION STOP AIRING IT?
The “no censorship” rule and a station’s immunity from civil liability do not extend to third-party ads. Accordingly, before airing third-party ads, station management should be sure that it is comfortable with the content (and it can demand that changes me made to the content as a condition to airing the spot), since the station is not immune from defamation suits or copyright infringement claims arising out of the content of such ads.
A situation that occurs with increasing frequency – and intensity – as election day nears is this: a station runs a third-party ad that attacks a candidate, and then the candidate tells the station that the ad is a pack of lies and threatens to sue the station if it doesn’t stop running the ad. So what is a station to do? First, if the station doesn’t already have it, you should immediately request that the sponsor of the spot provide you with documentation of its claims. Second, we strongly recommend contacting your attorneys to assess the risk of continuing to the run the ad while you investigate the matter and also to help you determine if the documentation provided is sufficient to support the claims made in the ad.
Keeping in mind that a broadcaster is always free to decline running a third-party ad if it is uncomfortable with it, we note that most political ads – albeit replete with nasty political hardball – generally do not rise to the level of defamation. More often than not, the alleged defamatory content proves essentially to be a matter of interpretation, rather than an outright falsehood. Moreover, although the target of an attack ad often will argue that the station is responsible for the truth or falsity of all material aired on the station – which is technically true – the FCC has been disinclined to saddle stations with the burden of examining and verifying the merits of every political claim. However, when a third-party ad veers from political issues into attacks on a candidate’s personal character or integrity – e.g., accuses him or her of having an affair, committing a crime, etc. – stations should be extra cautious.
AND IN CONCLUSION…
Well, don’t say we didn’t warn you. As we said at the beginning, the FCC’s political broadcasting rules and policies can be mind-numbingly complex…and even though we’ve spilled a lot of ink here, we’ve only covered the basics. Our hope, however, is that with this in hand, you can now recognize important issues as they arise and then intelligently discuss those issues with your attorneys.