FCC Clarifies Political Ad Disclosures

New edict: Stations and MVPDs must identify all candidates, issues and sponsoring officials

Why This Matters

WHY THIS MATTERS
Broadcast and cable operators will have to do more political ad vetting per new FCC “clarification.”

The FCC’s Media Bureau has clarified what TV and radio stations—and cable and satellite outlets—have to disclose about the political advertising that fills their election-cycle coffers.

But whether that 11th-hour move in an exiting administration holds remains to be seen.

In a decision issued on Jan. 6, the FCC’s Media Bureau resolved complaints about political ad disclosures, and complaints facilitated by the FCC’s decision under former chairman Julius Genachowski, to require TV and stations to upload public files, including political files, to a searchable, FCC-administered online database.

The bureau said those outlets must identify all candidates, all issues of importance and all sponsoring officials, though whether that is officials of Super PACs or gets to the underlying funders remains open to interpretation in the clarification.

The bureau decision was progress, said one of the complainers, and even more important in the wake of the rise of “fake news” and the Russian hacks of the political system.

FCC chairman Tom Wheeler had been pushed by various groups and Capitol Hill Democrats to tighten TV and radio ad disclosures in the wake of the Citizens United Supreme Court decision that allowed corporations and unions to fund TV and radio ads in the run-up to the elections. Democrats had also pushed for tighter rules as one way to help them counter the flood of so-called “dark” money expenditures by third-party groups; and they’d complained that stations were violating the FCC disclosure rules already on the books.

The FCC levied no fines, but admonished one station (a black mark in their file) and put the others on notice of its new disclosure advisory.

If Republican commissioners are unhappy with what they saw as an 11th hour decision on delegated authority (the commissioners did not get to vote), they could reverse, or more likely revise it, after Jan. 20.

“These orders purport to resolve many questions of statutory interpretation that are not appropriately addressed on delegated authority,” said Republican commissioners Ajit Pai and Michael O’Rielly. “As a result, we requested that they be brought to the commissioners for a vote. Given that we agreed with much of the substance of the orders as written, we were optimistic that the commissioners would have been able to reach consensus on these items, providing certainty to the interested parties going forward. Sadly, we were never given that chance, and these orders thus will need to be revisited in the new administration.”

The complaints were targeted at TV stations, but the clarification and new obligations apply to cable and satellite providers and satellite radio licensees, the FCC was quick to point out in a footnote in the decision.

The FCC requires some types of complaints—on indecency, for example—to come from viewers in the market where the TV station targeted with the complaint is located. But the Commission said that does not have to be the case with the political files that are now easily available online at the FCC to anyone nationwide.

Alex Howard, deputy director of the Sunlight Foundation, one of the groups that filed the complaints, would have preferred even more tightening and action before the recent election. “It is suboptimal to put it out on a Friday afternoon after the election,” he said. “I would have liked to see a different kind of approach,” which he said would be “an even stronger statement regarding the right of the public to know who originated any political ads,” which he said should be disclosed “in machine-readable format on the internet as soon as those ads are filed.”

Ideally, he added, “you would be able to have your phone listen to an ad and identify who funded it.”

Howard said that, theoretically, the clarifications by the bureau could mean that the funders of PACs would be identified, but he adds that depends on how much the structure of those groups “is used to obfuscate ownership.”

As to how a Republican FCC would treat the item, he said: “I don’t think there is a strong public interest argument for why individuals who are paying to place political advertising throughout the quite-significant new media ecosystem shouldn’t be identified in an age when shadowy influence and so-called fake news has created more vectors for different players to try and shift our politics. This goes directly to a strategic concern: Do we really want to loosen disclosure requirements and give people more ability to obfuscate when we have reasonable evidence that a foreign national power was trying to weaken our Democracy?”

He said the same goes for a corporation trying to shape the national dialogue.

NEW RULES OF POLITICAL ADS ROAD

In resolving complaints against a number of other stations, the FCC took no enforcement action, but provided clarification going forward about how political ads need to be disclosed:

■ ”For each request to purchase broadcast time that triggers disclosure… licensees must include in their political files the names of all candidates (and the offices to which they are seeking election), all elections and all national legislative issues of public importance to which the communication refers.”

■ ”Licensees must disclose all of the chief executive officers or members of the executive committee or board of directors of any person seeking to purchase broadcast time...In cases where a station initially is given the name of a single official of a sponsoring entity, or otherwise has a reasonable basis for believing that the information initially provided is incomplete or inaccurate, the station is obligated to inquire whether there are any other officers or members of the executive committee or of the board of directors of such entity.”

■ ”We will consider context in determining whether an advertisement constitutes a ‘political matter of national importance’ that triggers record-keeping obligation....A broadcast message must be ‘political’ in nature and must be of ‘national importance’ to trigger a licensee’s record-keeping obligations. [An] issue need not be subject to pending or proposed legislation in order to be considered a ‘national legislative issue of public importance.’ This term also encompasses other political issues that are the subject of continuing controversy or discussion at the national level.”