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'Fraught With Risk'

Broadcasters: Foreign-Sponsored Content Draft Could Loop in Political Ads

A draft order on circulation that would update the FCC’s foreign-sponsored content rules in response to a July 2022 U.S. Court of Appeals for the D.C. Circuit ruling against the agency could be interpreted to require that entities buying political issue ads must first show broadcasters they aren’t foreign agents, broadcast and FCC officials told us. That language could change before the item is approved, although when it will be voted on is unclear, FCC and industry officials said. The draft item “just creates more questions,” said Gray Television Senior Vice President Robert Folliard.

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The draft order tracks closely with proposals from the October 2022 NPRM and would require standardized certifications from broadcasters and program lessees on whether a lessee is a foreign governmental entity, and possibly accompanying filings in broadcaster online public files, FCC and industry officials told us. The current foreign-sponsored content rules require broadcasters to disclose foreign sponsorships to viewers and keep records about programming lease agreements in their public files. The rules also originally required broadcasters to check federal databases for each entity leasing time on their stations to see if they are registered foreign agents, but the D.C. Circuit struck down those provisions.

The order's language that could loop in political issue ads is a response to a petition from broadcaster affiliate station groups seeking clarification on whether the existing foreign-sponsored content rules applied to advertisements. The original 2021 foreign-sponsored content order said in places that advertising doesn’t fall under the rules, but also that rules didn’t apply to “traditional short-form advertising.” That led broadcasters to raise concerns that short-form advertising wasn’t defined and that ads can have varying lengths, including multi-hour infomercials. The affiliate petition asked the agency to exempt all advertising from the foreign-sponsored content rules, but the language in the draft order instead exempts programming already covered by Section F of the FCC’s sponsorship ID rules, which applies only to “broadcast matter advertising commercial products or services.” Political advertising is covered by a different section of the law, and so could be interpreted not to fall under the exemption. An FCC official told us it should be possible for the FCC to add language that makes it clear political ads aren’t treated differently from other ads.

Advertisements are clearly not leases of time and are not considered ‘programming,’” said NAB, the Multicultural Media, Telecom and Internet Council, and several broadcasters including Fox, Gray Television, NBCUniversal, Paramount, TelevisaUnivision and Urban One in an ex parte filing earlier this month. “An overlay of new diligence and disclosure rules on top of the existing political broadcasting regime and/or the treatment of PSAs or any advertising" as leases goes beyond what was mentioned in the NPRM and could violate the Administrative Procedure Act, the broadcasters said. NAB and MMTC challenged the original foreign-sponsored content order.

Broadcasters widely oppose additional foreign-sponsored content requirements. In ex parte filings, NAB and others also raised concerns that the public file requirement for leases will be unduly burdensome and deter locally originated programming, contrary to a recent FCC proceeding on prioritizing it (see 2403120071). “The draft order would make airing such content infinitely more burdensome and fraught with risk of potential enforcement actions for broadcasters who air such programming,” said a joint filing from NAB, MMTC and others.