Campaign Groups File Complaints Alleging Trivial Violations of TV Broadcaster Disclosure Regime

May 1, 2014. The Campaign Legal Center (CLC) and the Sunlight Foundation (SF) announced that they filed eleven complaints with the Federal Communications Commission's (FCC) Enforcement Bureau (EB) against eleven TV broadcast stations licensed by the FCC "for letting political advertisers flout federal disclosure requirements". See, May 1, 2014 CLC release and similar May 1, 2014 SF release.

Introduction. A review of the relevant statute, implementing rules, and complaints reveals that the TV broadcasters targeted by these complaints are filing the required disclosure statements regarding political ads, the filings are mostly complete and appear to be made in good faith, and the alleged violations are mostly trivial.

The complaining groups are nitpicking. They seek to pressure the FCC to enlarge its mission as a federal election campaign regulator.

In addition to the underlying insignificance of the complaints, two other matters cloud these proceedings.

First, the underlying regulatory regime is fundamentally flawed, for several reasons. It flies in the face of the First Amendment rights of broadcasters. It imposes a substantial record keeping burden upon TV broadcasters, which is unreasonable in light of the fact that many of these broadcasters are small businesses with small budgets. It discriminates against TV broadcasters, because it does not also burden others who sell campaign and issue advertising, including radio, newspaper, magazine, cable and internet businesses. Finally, since it only affects TV broadcasters, it is ineffective.

Second, the FCC is a particularly inappropriate forum for adjudication of these complaints. The complaints allege a lack of transparency in federal election and issue campaigning. Yet, the Chairman of the FCC owes his position to having been a campaign fundraiser for President Obama in the 2008 and 2012 election cycles. He was a fundraising intermediary -- a bundler in campaign vernacular -- who has yet to disclose from whom he raised money. He is an exemplar of campaign intransparency. Of course, his actions were legal. Moreover, there are weighty reasons why anonymity and privacy ought to be protected under the First Amendment in campaign fundraising.

But, it would create an appearance of impropriety if an agency headed by a man who obtained office by secretly bundling hundreds of thousands of dollars in contributions from people associated with some of the largest companies regulated by that agency were to preside over the punishment of some of the smaller companies regulated by that agency for trivial violations of its flawed political transparency regime.

The National Association of Broadcasters' (NAB) Dennis Wharton stated in a release on May 1 that the "NAB takes seriously the political file rules, and will continue working with broadcasters to ensure compliance. We also intend to educate political advertising agencies to enlist support for more accurate information on the disclosure requirements for political ads. Our goal is 100 percent compliance with both the statutory requirements and the FCC rules."

Summary of the Complaints. The eleven complaints have many things in common. All were filed on the same day. All name the same complainants. All are signed by the same attorneys (Eric Null, Angela Campbell, and Andrew Schwartzman). All allege violation of the same statute and regulation. All allege violations by TV broadcasters. All pertain to 2014 Congressional elections (and most pertain to Senate races). All allege that the underlying ads are issue ads. All allege that the broadcaster failed to correctly name the issue.

Most of the ads underlying these complaints pertain to one or several issues that are not easily described, such as a candidate's position on insurance company coverage for pre-existing conditions under the Patient Protection and Affordable Care Act (PPAACA). But, most of the issues relate in some way to the merits of, tax consequences of, implementation of, or coverage under, that PPAACA, or "Obamacare".

It may be the case that some advertising employees of broadcasters have simply found it difficult to accurately and fairly attach a name to the issues, and have therefore listed the candidates instead, or simply left that item blank.

These complaints allege violation of 47 U.S.C. § 315 and 47 C.F.R. § 73.1212. The most relevant subsections are set out below.

Consider, for example, the complaint against WCNC-TV, which broadcasts in Charlotte, North Carolina.

The complaint does not allege that WCNC-TV is not filing disclosures. The complaint focuses on just one ad run by WCNC-TV. The complaint does not allege the failure to file for this ad. Rather, the complaint is based solely on the alleged failure to disclose a single item.

The statute requires that the broadcaster disclose "the name of the candidate to which the communication refers and the office to which the candidate is seeking election" or "the issue to which the communication refers". The ad at issue pertains to a particular election contest, and names one of the candidates. But, the complaint alleges, this is an issue ad, and therefore WCNC-TV had an obligation to name the issue. The ad is about one candidate's position on a health care issue. WCNC-TV's disclosure form states that this is an issue ad, but in the place for naming the issue, the person filling out the form listed the name of the candidate, rather than the name of the issue.

This error -- if it is an error -- is trivial. Moreover, this is the sole basis for complaining to the FCC about WCNC-TV.

In another complaint, against KMGH-TV in Denver, Colorado, the alleged violation again goes to only one ad. Again, the disclosure was made, and the complaint concedes that it is almost entirely in compliance. But, the complaint alleges failure to list the name of the issue. It also alleges failure to disclose the "board of directors or chief executive officers".

The disclosure form at issue lists the names of the candidates instead of the issue. The disclosure form lists the name and title of the treasurer, rather than a full list of directors. The complaint relies solely on two minor errors on a single ad disclosure by a broadcaster making a good faith effort at full compliance.

FCC Procedural History. On April 27, 2012 the FCC adopted a Second Report and Order [81 pages in PDF]. That order is FCC 12-44 in MM Docket Nos. 00-168 and 00-44. See especially, former Commissioner Robert McDowell's separate statement.

That order did not change the rules regarding what TV broadcasters must disclosure. Rather it mandated where that disclosure must be made -- into a public FCC online database. The FCC imposed the obligation first upon broadcasters affiliated with ABC, NBC, CBS, or Fox and located in one of the top 50 markets.

All other TV broadcasters must come into compliance by July 1, 2014. The FCC released a Public Notice (DA 14-464) on April 4, 2014 reminding broadcasters of their new record keeping burden.

For more on the positions of the CLC, SF, and other allied interest groups, see August 26, 2013 comment [31 pages in PDF] filed with the FCC by the CLC, SF, Free Press (FP), and others. See also, December 20, 2013 notice [13 pages in PDF] of ex parte communication filed with the FCC by the CLC, SF, FP and others.

The FCC receives comments, and issues orders, notices, and other items regarding this matter, in MM Docket Nos. 00-168 and 00-44.

47 U.S.C. § 315(e).

(e) Political record
  (1) In general
  A licensee shall maintain, and make available for public inspection, a complete record of a request to purchase broadcast time that—
    (A) is made by or on behalf of a legally qualified candidate for public office; or
    (B) communicates a message relating to any political matter of national importance, including—
      (i) a legally qualified candidate;
      (ii) any election to Federal office; or
      (iii) a national legislative issue of public importance.
  (2) Contents of record
  A record maintained under paragraph (1) shall contain information regarding—
    (A) whether the request to purchase broadcast time is accepted or rejected by the licensee;
    (B) the rate charged for the broadcast time;
    (C) the date and time on which the communication is aired;
    (D) the class of time that is purchased;
    (E) the name of the candidate to which the communication refers and the office to which the candidate is seeking election, the election to which the communication refers, or the issue to which the communication refers (as applicable);
    (F) in the case of a request made by, or on behalf of, a candidate, the name of the candidate, the authorized committee of the candidate, and the treasurer of such committee; and
    (G) in the case of any other request, the name of the person purchasing the time, the name, address, and phone number of a contact person for such person, and a list of the chief executive officers or members of the executive committee or of the board of directors of such person.
  (3) Time to maintain file
  The information required under this subsection shall be placed in a political file as soon as possible and shall be retained by the licensee for a period of not less than 2 years.

47 C.F.R. § 73.1212(e).

(e) The announcement required by this section shall, in addition to stating the fact that the broadcast matter was sponsored, paid for or furnished, fully and fairly disclose the true identity of the person or persons, or corporation, committee, association or other unincorporated group, or other entity by whom or on whose behalf such payment is made or promised, or from whom or on whose behalf such services or other valuable consideration is received, or by whom the material or services referred to in paragraph (d) of this section are furnished. Where an agent or other person or entity contracts or otherwise makes arrangements with a station on behalf of another, and such fact is known or by the exercise of reasonable diligence, as specified in paragraph (b) of this section, could be known to the station, the announcement shall disclose the identity of the person or persons or entity on whose behalf such agent is acting instead of the name of such agent. Where the material broadcast is political matter or matter involving the discussion of a controversial issue of public importance and a corporation, committee, association or other unincorporated group, or other entity is paying for or furnishing the broadcast matter, the station shall, in addition to making the announcement required by this section, require that a list of the chief executive officers or members of the executive committee or of the board of directors of the corporation, committee, association or other unincorporated group, or other entity shall be made available for public inspection at the location specified under § 73.3526. If the broadcast is originated by a network, the list may, instead, be retained at the headquarters office of the network or at the location where the originating station maintains its public inspection file under § 73.3526. Such lists shall be kept and made available for a period of two years.

(Published in TLJ Daily E-Mail Alert No. 2,652, May 2, 2014.)