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Delay Danger 'Diffuse'

Foreign Content ID Stay Request Has a Shot: Attorneys

The FCC could accede to a request to pause new foreign-sponsored content identification rules, and it's likely broadcasters otherwise will renew the request in court, said broadcast and appellate attorneys in interviews. A stay petition was filed last week by NAB, the National Association of Black Owned Broadcasters and the Multicultural Media, Telecom and Internet Council. They argue the new rules will affect all stations when relatively few air the content targeted by the regulations. The FCC “could easily have achieved its purported objectives and then some with a less burdensome approach,” said the stay request.

This one falls in the category where the request may be more likely to be granted than most,” said frequent broadcaster opponent Andrew Schwartzman, Benton Institute for Broadband & Society senior counselor. “The injury is rather clear, and the danger of delaying enforcement is diffuse.” The broadcaster arguments “are much more likely to receive a favorable audience before the D.C. Circuit,” said former FCC General Counsel Tom Johnson. “Case law strongly supports NAB’s view that the FCC’s independent investigation requirement violates the Communications Act.” The commission declined to comment Tuesday.

The agency is revisiting the rules by seeking comment on a petition for clarification from affiliate groups (see 2109030049), said broadcast attorney Joseph Chautin of Hardy Carey. If the mandates are to be altered, staff would likely rather do it as a whole rather than piece by piece, said Chautin. Replies on the clarification petition are due Friday in docket 20-299.

There also are reasons to think the agency won’t stay the regulations, which were approved unanimously earlier this year. The FCC would be undoing its own actions, said Foster Garvey broadcast attorney Melodie Virtue. The rule changes on foreign-sponsored content ID were a response to repeated requests from Rep. Anna Eshoo, D-Calif., and it's unlikely pausing them would get similar congressional backing due to “the optics” of opposing stiffer requirements on foreign government-sponsored content, Virtue said. If the agency doesn't stay the mandates, the broadcasters would likely ask the court to do so, but such requests are seldom granted, said Virtue. “The FCC and the D.C. Circuit are usually loathe to grant stays,” said Schwartzman.

The broadcast groups said staying the disclosure regime would leave viewers protected because of longstanding sponsorship ID rules, but keeping the new rules active will be extremely costly to stations. "Absent a stay," broadcasters "will be required to expend substantial resources (in some instances cumulatively amounting to hundreds of thousands of dollars in employee time and legal fees) to bring their leasing arrangements into compliance with the Order’s requirements," said the petition. “Initial compliance” within six months of the rules taking effect would cost Urban One 1,350 hours of employee time and $50,000 in outside legal fees, for a total of $78,498.56, said Chief Administrative Officer Karen Wishart in a declaration. Urban One reported net revenue of $376 million for 2020. The order is “dramatically overinclusive,” said the stay request.

Neuhoff Media CEO Beth Neuhoff estimated annual compliance would cost her company $7,000 a year, and said in her declaration the rules could affect relations with advertisers. “Making the required inquiries introduces an element of distrust into our longstanding relationships with our programming partners,” she wrote. It's hard to know how burdensome the rules would be because much depends on how they’re interpreted and enforced, said Chautin. It could be especially tough for smaller broadcasters, said Dawn Sciarrino, radio attorney with Sciarrino and Associates. “The small guys have trouble with compliance already.”