Advertising and Marketing

Court Rules Noncoms Can Accept Paid Issue and Political Ads

Ninth Circuit overturns FCC ban on noncoms running paid political and issue ads; ban on commercial spots remains 4/12/2012 03:10:28 PM Eastern

A federal appeals court has ruled that noncommercial broadcasters can accept paid issue and political ads, but not commercial, for-profit spots.

The decision could give commercial broadcasters some new competition for election ad dollars. NAB was reviewing the decision at press time, said a spokesperson.

That came in a decision in the Ninth Circuit Court of Appeals in a challenge to the FCC's noncom ad ban by Minority Television Project, owners of KMTP-TV San Francisco, for airing paid promotional announcements. The station accepts no government money from CPB.

"Applying intermediate scrutiny, we uphold the ban on the transmission of advertisements for goods and services by for-profit entities, but we strike down as unconstitutional the ban on public issue and political advertisements," said the court.

The decision overturns a lower-court ruling that the ban on all three categories -- political ads, issue ads, and commercial spots - -were "narrowly tailored to the government's interest in preserving the educational programs on public broadcast stations," and arguments the Justice Department had made in defending the congressional ban and the FCC's enforcement.

The Ninth Circuit agreed with that assessment for commercial spots, but not for the political and issue ads. "There is no evidence in the record -- much less evidence which was in the record before Congress -- to support Congress's specific determination that public issue and political advertisements impact the programming decisions of public broadcast stations to a degree that justifies the comprehensive advertising restriction at issue here," said the court in ruling the political and issue ad ban unconstitutional under intermediate scrutiny.

The court also said that the fact that the government allows paid promotional announcements from nonprofits on noncoms was "fatal" to its defense of the ban.

One of the government arguments for the ban on ads was that it would drive noncoms from their non-ratings-driven niche programming to the lowest common denominators, essentially defeating the purpose of the niche programming the government is trying to promote. The court accepted that defense for commercial, for-profit spots, but not for political and issue ads.

"We accept Congress's conclusion that commercial advertisers seek the largest audience possible, and that, were public broadcast stations permitted to transmit commercial advertisements without restriction, such stations would seek to make themselves more attractive to advertisers by broadcasting programs with mass-market appeal. But neither logic nor evidence supports the notion that public issue and political advertisers are likely to encourage public broadcast stations to dilute the kind of noncommercial programming whose maintenance is the substantial interest that would support the advertising bans."

But the court argued that nonprofits paying for commercial messages would also be seeking a wide audience, but the government was allowing that.

Before 1981, noncoms could air no advertisements. In 1981, Congress modified the restrictions to allow for airing nonpaid ads, and paid ads for nonprofits, while continuing to band the above three categories as a threat to noncom's niche status.

The court offered Congress a chance to take another shot at a defensible position on its ban. "If there truly is evidence that broadcast of public issue and political advertisements would cause substantial harm-that their broadcast would change program content as directly and substantially as would for-profits' advertising," concluded the court, "Congress could compile a record to show as much, and perhaps pass a law restricting such speech. That record would contain evidence, not mere conjecture and anecdote. It is evidence of harm to a substantial governmental interest-not mere conjecture-which the First Amendment requires."

The FCC had no comment on the decision.

"This is a very disturbing development," said Andrew Schwartzman, senior VP and policy director for Media Access Project. "The decision threatens to undermine the very character of non-commercial broadcasting by subjecting it to political influence.  There are fewer and fewer places in the public sphere where deep pocketed interests cannot drown out meaningful public discourse."

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