Political Advertising 2012 - A Refresher Course for the Final Month

With Campaign 2012 heading for the finish line, here’s a quick recap of some of the rules with which broadcasters should be familiar as last-minute political buys start to flood in.

 As what promises to be one of the busiest and most contentious general election seasons in some time takes the turn and heads into the final 30-day lap, now is a good time for broadcasters to check their policies and procedures on political advertising to ensure that their stations remain in compliance down the stretch. The broadcast of political messages is covered by a complex set of laws and regulations and all station personnel involved with programming, sales and traffic should be aware that decisions about what ads to run, when to run them and how much to charge for them may have serious consequences for the station. 

A complete review of the federal political broadcasting rules is far beyond our scope here. Nevertheless, what follows is a crash refresher course highlighting a few issues that broadcasters should be thinking about, including a few new issues that are arising for the first time this year.

Who’s who?

One of the first things stations need to do is determine which elections are likely to generate requests for advertising time. On November 6, 2012, the general federal election will include races for the offices of the President, Vice President, all of the House of Representatives and one-third of the Senate. Numerous state and local offices also will be up for election on November 6. Your local board of elections should be able to give you a list.

Once you know which offices are up for election, you will need to decide which of those races will be permitted to buy time on your station. All candidates for federal offices are entitled to “reasonable access” to your station. That is, you must sell time (within certain limits) to the candidates for President, Vice President and the US House and Senate. 

By contrast, candidates for state and local office have no absolute right to reasonable access – stations can refuse to sell time for such races. If, however, a station sells ads to one candidate for a particular office, the FCC’s “equal opportunities” rule requires that station to sell ads to all qualified candidates for that particular office. Stations may pick and choose among the state and local races, however. For example, a station could choose to accept ads from state senate candidates but refuse them from county council candidates. 

Non-candidate advertising – advertising from groups (including “public interest” groups) or individuals other than candidates or their committees – are never entitled to access as a matter of right. Stations are free to accept or reject “issue ads” as they see fit, although certain liabilities and record-keeping requirements may be attached to accepting such ads. 

What’s what?

One of the most important things each station should have done prior to the election season was to prepare its political disclosure statement – a written statement to be provided to candidates that describes the station’s political ad rates, time classes, and sales practices. The disclosure statement is not technically required by the FCC’s rules, but it is vitally important that every station is clear, upfront and consistent about the types of advertising time it will sell, which races will be allowed to buy time and the rates the station will be charging for the time. Obviously, a written statement can be infinitely helpful to station personnel in this regard and can also serve to avoid disputes about what information may or may not have been relayed by station personnel in less formal, oral interactions.

The disclosure statement should be kept up-to-date throughout the campaign, and all personnel involved with the sale of advertising time should be familiar with the disclosure statement and adhere to the policies set forth in the disclosure statement at all times. Sophisticated political campaigns keep a close eye on how much time their opponents buy and how much they pay for the time. 

In addition to information on the classes of time that may be purchased and the rates that will be charged for each class, the disclosure statement should include information on how and when preemptions may be made, payment policies, and any other station policies that could reasonably affect political advertising buys.

Any discrepancies between the rates or access given to different candidates will almost certainly subject a station to complaints. For those stations already subject to the FCC’s new online political file rules – those would be the affiliates of the Big Four Networks affiliates in the top 50 markets – this is all the more true this year. With this information being posted online, it is more readily available than ever. Stations also may now be subject to complaints not only about the rates and access they are granting but also about the sufficiency of the information they are posting to their online political files.  

How much?

As part of preparing the disclosure statement, each station of course needs to determine the “lowest unit charge” (LUC) to which qualified candidates are entitled. Calculating the LUC can be tricky. Simply stated, the LUC is “the lowest rate of the station for the same class and amount of time for the same period.” Put another way, it is the rate for any given class of time granted to the station’s most favored advertisers once all discounts, bonuses and other considerations have been taken into account. Keep in mind that most stations will have several different LUCs because they sell several different classes of time (different day parts, preemptible/non-preemptible, etc.). 

Not all political advertising is entitled to LUC rates. As a threshold matter, LUC rates apply only during the “LUC windows”. For this year’s general election, the LUC window is currently open, and will run through the day of the general election (November 6, 2012). During the LUC rate window, the LUC rates must be offered to all qualified federal candidates and their authorized committees and all qualified state and local candidates and their authorized committees (assuming the station has decided to run ads for that particular state or local office). 

To qualify for the LUC rate, the advertising must include a “use” of the broadcast station by a qualified candidate (a “use” is defined as any “positive appearance of a candidate whose voice or likeness is either identified or is readily identifiable”). In addition, to qualify for LUC rates, federal candidates must meet the “stand by your ad” certification requirements described below. 

Advertising that is not sponsored by a qualified candidate (e.g., issue ads run by political action committees, “Super-PACs,” so-called 527 groups, or other organizations) is not entitled to LUC rates.  

The job’s not over until the paperwork . . .

At this late stage of the game it’s also important for stations to keep up with the paperwork burden involved with political advertising. Stations must keep a political file (which is an essential component of the station’s public inspection file) that includes records of all requests for political time made by or on behalf of any candidate. As noted above, starting this year, Big-4/Top 50 stations must maintain their political files online as part of the FCC’s new on-line public file system (other stations will not need to post the political portions of their files online until 2014). 

The political file records (whether maintained on paper or online) must include:

the name of the candidate and office involved;
whether or not the request was accepted;
the schedule of time provided;
the spot length;the classes of time purchased;
the rates charged;
the date and time the spots actually aired;
the name, address and telephone number of a contact person for the candidate/committee, along with the name of the authorized committee treasurer; and
the rebates paid to the candidate (if any). 

As the station is obligated to keep these records and make them available for public inspection, it must be certain that all relevant staff members are aware of the obligation to collect and keep this information starting when an inquiry for political advertising time is made (although mere rate inquiries do not need to be recorded). Moreover, these records must be continually updated as relevant information develops (e.g., when the spots are run, etc.).

In addition, broadcasters must now keep records of all paid political advertising that “communicates a message relating to any political matter of national importance.” This requirement applies to all political advertising, not just candidate advertising. Thus, even though non-candidate advertisements are not subject to reasonable access, equal opportunities or LUC rate requirements, they are subject to this recordkeeping requirement. 

The records of such ads must include: 

a record of each request to purchase time;
whether or not the request was accepted;
the rate charged;
the date and time the ads aired;
the class of time purchased;
the issue covered by the ad;the name of the candidate and office to which the ad refers (if applicable); and
the name of the purchaser, the name, address and telephone number of a contact person and a list of chief executive officers/board of directors. 

Again, relevant station personnel must be made aware of their responsibility to collect the relevant information when requests for air time are made.

Finally, candidates for federal office must provide to the station a particular written certification at the time the advertising time is purchased. In this “stand by your ad” certification, the federal candidate must certify whether or not the advertising will refer to another candidate for the same office. If the ad will refer to an opposing candidate, the certification must also state that at the end of the ad a statement will be included in which the candidate identifies himself or herself as well as the office being sought and affirmatively states that the candidate has approved the broadcast. Television ads also must include an image of the candidate and a printed statement that the candidate or the candidate’s committee paid for the broadcast, the name of candidate, and that the candidate approved the broadcast. The FCC has advised the stations may (but are not required to) deny LUC rates to federal candidates that do not meet the “stand by your ad” certification requirements.

Recent Developments

As discussed above, the most important recent development in political broadcasting, at least for those stations to which it applies, is the limited implementation of TV online public file requirements. Another issue that appears to raise its head every year is the issue of who is a “legally qualified candidate.” As noted above, stations must accept ads from such candidates and, important, they cannot edit or censor the content of these ads. A number of candidates in recent years have attempted to take advantage of these provisions to force stations to sell them time to air highly controversial advertisements. In a decision earlier this year related to advertising in the Super Bowl®, the FCC reiterated its policy that to qualify for “reasonable access,” a candidate must make a “substantial showing” that they are a legally qualified candidate. 

At this point, many states have their ballots already set, which may presumptively qualify a candidate, but stations should be aware of the requirements for legally qualified candidates, and, most importantly, should keep in mind that regardless of the content of those “legally qualified candidates” advertisements, they cannot censor or edit them (although they can run a disclaimer before and/or after the ad noting the station’s inability to edit it). Stations should also keep in mind that even for candidates who are not entitled to “reasonable access” (i.e., state and local candidates), the “no censorship” requirements apply, although the station in those cases may be free to refuse to run the ad entirely, subject to equal opportunities requirements.

Another recent development that probably will not have a significant impact this year but could in the future is a decision from the Ninth Circuit United States Court of Appeals, released in April, that overturned the longstanding ban on political advertising on non-commercial television stations. That decision, however, has not yet gone into effect, so non-commercial stations should still abide by the prohibition on advertising.  The ultimate resolution is also still up in the air, as the FCC and Justice Department have requested rehearing. Even if advertising is ultimately approved, non-commercial station should remember that they are not required to accept such advertising – the “reasonable access” requirements do not apply to non-commercial stations. If they ultimately do decide to accept political advertising, however, stations will need to familiarize themselves with the other myriad and complex rules governing such advertising. 

There’s more where that came from . . .

As mentioned above, the political advertising rules are notoriously complex and a station’s compliance with the rules typically depends on the specific facts at hand. Many of the areas discussed above give rise to their own subsets of particular questions which can generally be answered only with specific reference to specific factual settings. This summary of the station’s requirements is, necessarily, brief and superficial.   It’s intended to provide a mid-campaign reminder of the various considerations on the table when it comes to political advertising.

As stations’ managements and sales staffs review and implement their political advertising policies, disclosure statements, LUC rates, and political files, they should consult early and often with local election officials, your state broadcasters association, the NAB and, of course, their friendly neighborhood communications lawyers.

Political Broadcasting 2012: Things Change

Texas court decision moves LUC dates, may expand eligible candidate list.

We all know that the 2012 election season is in full swing, and has been for some time. But that doesn’t mean that the playing field for political advertising is static. To the contrary, a federal court in Texas has provided a reminder of why it is very important for all broadcasters to pay attention to developments that may affect elections in their service areas.

As a result of the 2010 Census, a number of states are still dancing at the Redistricting Disco, redrawing the boundaries of their Congressional districts. In Texas, this has led to a lengthy court battle. The latest development: a federal court in San Antonio has rescheduled the state’s primary elections, moving them back nearly two months, from April 3 to May 29, with runoff elections, if necessary, on July 31.  (The elections had already been pushed back from their original date of March 6.)  The court also re-opened the candidate filing window, which will now run from March 2 through March 9.

Under the FCC’s political broadcasting rules, candidates for federal office are entitled to lowest-unit-charge (LUC) rates during a window of 45 days before a primary or primary runoff. So Texas broadcasters who might have thought that their LUC period had already been set have another think coming. The court’s decision establishes a new 45-day window (starting April 14) in which the LUC requirements will apply, and it terminates the LUC window that had been started based on the April 3 date). So not only will broadcasters have to extend LUC rates for several weeks beyond their original expectation, but they will also to deal with political advertising contracts entered into for the previous LUC period. And for a further potential complication, the re-opening of the candidate filing window could also change the pool of qualified candidates.

While the Texas developments will obviously be felt most directly by stations in Texas, those developments still serve as a strong reminder to stations everywhere to stay on top of their local and national political scenes. As long as the political landscape remains unsettled, changes in that landscape can have a significant impact on broadcasters’ obligations under the political advertising rules.

[Blogmeister's note: Many thanks to our friends at the Texas Association of Broadcasters for alerting us to this late-breaking development.]

Lowest Unit Rate and Internet Streaming

[Blogmeister Note: The following piece, in a more compact form, appeared in Radio Ink magazine. We thank our friends at Radio Ink for allowing us to post this here as well.]

As we enter the political season, radio stations are being bombarded with reminders about the FCC’s political broadcasting rules – including, of course,  the lowest unit rate (“LUR”) requirement for many, but not necessarily all, political spots. 

LUR, of course, means that stations must provide all political candidates (federal, state and local) with the LUR for advertising bought during a statutorily-specified pre-election windows.  Those windows include the periods: (a) 45 days before a primary election, and (b) 60 days before a general election. 

In general terms, the LUR is the lowest rate of the station for a particular class and amount of time during a particular period.  “Lowest” means lowest.  Thus, candidates must get the benefit of all discounts, including those offered to the station’s most favored commercial advertisers for the same class and amount of time for the same period as that purchased by the candidate.  Note that only ads bought by candidates are entitled to receive LUR. Also, federal candidates must provide the “stand by your ad” certification in order to be entitled to receive the LUR. 

A spot “class is one that has particular rights and characteristics, such as morning drive,  afternoon drive, fixed position, ROS, etc.  In many instances calculating the LUR for different classes of time can be relatively simple. But in other instances – particularly when different classes are bundled into packages for non-political advertisers, the calculation can get tricky fast.  Unlike state and local candidates, federal candidates cannot be denied “reasonable access” to a station, which means that they are effectively entitled to any and all commercial opportunities as a standard advertiser. (State and local candidates can be limited to certain classes.) So for federal candidates, stations must determine the per-class LUR for each component of the package and make that rate available to the political advertiser, whether or not he/she buys the whole package

That process is already confusing enough – and it has gotten increasingly so as stations have expanded their streamed content on the Internet. How does Internet streaming of content – including political spots – affect LUR calculations?

First, you should know that the LUR requirement does not apply to Internet-only advertising time.  However, broadcasters operating websites should be careful to distinguish sales of Internet-only advertising time from sales of over-the-air advertising time. This is especially so if an advertising package includes broadcast spots as well as Internet-only advertising. Example: a candidate buying over-the-air spots receives, as part of a package, a banner ad on the station’s website.  Such packages may impose obligations on a station with respect to political advertising sales and the value of the Internet component may impact the station’s LUR. 

If a station offers a combined package of broadcast and Internet advertising, LUR rules will apply to the broadcast component.  Also, remember that the equal time requirements apply so if the station sells a package with broadcast spot time and Internet spots to one candidate, then the same should be made available to competing candidates for the same office. In short, be careful when selling combined broadcast and Internet advertising packages and be aware of how such bundling may impact the LUR and your bottom-line.