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What Every Station Should Know About Political Advertising What Every Station Should Know About Political Advertising

What’s New • Petition for Declaratory Ruling - Named State Broadcasters - Google/d. Marc, What’s New • Petition for Declaratory Ruling - Named State Broadcasters - Google/d. Marc, Bid 4 Spots and Softwave Media Exchange - Interim?

Wisconsin Right to Life • June 15, 2007 Supreme Court Decision FEC vs. Wisconsin Wisconsin Right to Life • June 15, 2007 Supreme Court Decision FEC vs. Wisconsin Right to Life, Inc. • Loosened restrictions on TV and Radio ads that corporations and labor unions can finance prior to an election • “No Other Reasonable Interpretation” Standard • Redefines Electioneering Communications

Electioneering Communications • Electioneering communications are any broadcast, cable or satellite programming that refer Electioneering Communications • Electioneering communications are any broadcast, cable or satellite programming that refer to a federal candidate, are aired within 60 days prior to a general election or within 30 days prior to a primary election and reach 50, 000 or more persons. • What this means for stations

Refresher Course • • • Reasonable Access Equal Opportunities Lowest Unit Charge Sponsorship ID Refresher Course • • • Reasonable Access Equal Opportunities Lowest Unit Charge Sponsorship ID and BCRA Public File

Reasonable Access • Stations must sell time to federal candidates • Applies during the Reasonable Access • Stations must sell time to federal candidates • Applies during the entire campaign • Stations cannot set up front limits on the amounts or type of time that candidates can buy • But, stations may reject unreasonable requests and negotiate with candidates

Carter-Mondale Factors Reasonable access requests must be evaluated using 4 factors: • How much Carter-Mondale Factors Reasonable access requests must be evaluated using 4 factors: • How much time the candidate has already bought • The amount of disruption the buy would create • The potential for equal opportunities demands from other candidates • The timing of the request

State & Local Candidates • State and local candidates have no right of access State & Local Candidates • State and local candidates have no right of access • Stations may exclude some or all state and local candidate ads

State & Local Candidates • Stations can take ads from some races and not State & Local Candidates • Stations can take ads from some races and not others • Stations can limit the number of ads • Stations can restrict the dayparts for state and local ads • But, stations must make “discount classes” available and equal opportunities and lowest unit charge rules apply

Equal Opportunities • Does not require equal time, just equal right (i. e. , Equal Opportunities • Does not require equal time, just equal right (i. e. , pay for pay and free for free) • Triggered by any non-exempt use • Applies only to candidates in the same race • Candidates must request equal opportunities within 7 days

What type of programs are exempt? • • Bona fide newscasts Bona fide news What type of programs are exempt? • • Bona fide newscasts Bona fide news interview programs Bona fide documentaries On-the-spot coverage of bona fide news events includes station-sponsored debates and some free time offers

Political Rates • Apply to all races – federal, state and local • Issue Political Rates • Apply to all races – federal, state and local • Issue ads do not receive political rates • Party ads are only entitled to political rates if the party is one of the candidate’s authorized committees - if a party or other ad supporting a candidate is an “independent expenditure, ” political rates are not required

Lowest Unit Charge • Since 1991, the most important requirement is disclosure • A Lowest Unit Charge • Since 1991, the most important requirement is disclosure • A station’s political rates are determined by the rates it offers commercial advertisers • Stations must tell candidates about all relevant information and rates offered to commercial advertisers

Disclosure Statement • Stations should have a written disclosure statement • It should be Disclosure Statement • Stations should have a written disclosure statement • It should be given to every candidate or agency requesting political time • Don’t just copy the disclosure statement you used last election – check to see if it still accurately describes your sales practices

What to Include in Calculating the LUC • All paid spots • All contracts What to Include in Calculating the LUC • All paid spots • All contracts in effect during the political window or available to commercial advertisers • Paid PSAs which are aired for commercial advertisers • The value of “bonus” spots must be included in the LUC; this includes bonus spots that air outside the window

What to Exclude from the LUC • • Spots for which no payment is What to Exclude from the LUC • • Spots for which no payment is received Pure barter spots Per-inquiry spots Bonuses for non-profit organizations and the government • De minimis value-added incentives or incentives that would imply a station endorsement

Packages • Candidates do not have to buy a package to benefit from the Packages • Candidates do not have to buy a package to benefit from the package rate • Every spot in every package must be valued • Package prices may be allocated on the contract or in a signed and dated internal memo • If a station does not allocate, FCC will assume all spots have an equal value

Calculating the LUC – Incentives • Non-cash merchandise and promotional incentives do not have Calculating the LUC – Incentives • Non-cash merchandise and promotional incentives do not have to be factored into the LUC • They must be offered to candidates on the same basis as to commercial advertisers • Incentives of de minimis value or which imply endorsement do not have to be offered to candidates

Preemptible Time • Stations which offer commercial advertisers separate levels of preemptible time may Preemptible Time • Stations which offer commercial advertisers separate levels of preemptible time may treat each level as a separate class • Stations may offer candidates “fixed time” so long as that class is offered to commercial advertisers • Stations which sell time on an auction basis have only one class of preemptible time

Candidate-Only Discount Class • Stations may create a non-preemptible class of time for candidates Candidate-Only Discount Class • Stations may create a non-preemptible class of time for candidates only • If occasional spots clear below the candidate discount rate, no rebate is required

Changes in Rates • If a contract with a commercial advertiser expires during the Changes in Rates • If a contract with a commercial advertiser expires during the window, the LUC may change • Rate changes which are part of a station’s “ordinary business practices” will affect the LUC • Rates may vary due to changed ratings, seasonal demand, etc.

Issue Ads • Do not qualify for political rates • Stations are liable for Issue Ads • Do not qualify for political rates • Stations are liable for defamation and may censor • Must have sponsor ID • No requirement to offer or give time to opponents

Issue Ads • Public file must show that station aired ads • May have Issue Ads • Public file must show that station aired ads • May have to show date and times aired and rates if the ad includes a “message relating to any political matter of national importance” • Must include a list of officers, directors, or committee members of sponsoring organization • Stations should be careful about misleading sponsor identifications

Sponsor Identification • All spots must have a sponsor ID • The ID must Sponsor Identification • All spots must have a sponsor ID • The ID must state that the ad is “paid for” or “sponsored by” the entity actually paying for the time • Candidate spots paid for by someone other than the candidate must state whether they are authorized by the candidate • Ads for federal candidates that refer to opponents have new BCRA ID requirements

Sponsor Identification • If a spot comes in without an FCC-required ID, the station Sponsor Identification • If a spot comes in without an FCC-required ID, the station must add it to the spot • A station-added ID may obliterate part of the ad • A spot that arrives without an ID may be aired once without penalty – the ID must be inserted for all subsequent airings

Sponsor Identification – TV • TV political spots must have a visual sponsor ID Sponsor Identification – TV • TV political spots must have a visual sponsor ID • It must air for at least 4 seconds • The ID must be in letters equal to 4% of the screen height or 20 scan lines • BCRA added additional requirements, particularly for ads that refer to opponents

Speaking of BCRA … • Bipartisan Campaign Reform Act • All significant provisions upheld Speaking of BCRA … • Bipartisan Campaign Reform Act • All significant provisions upheld by Supreme Court in December 2003 • Many provisions apply to candidates & stations are not obliged to enforce them • FCC will not adopt new rules; will not punish broadcasters who exercise good faith discretion

Stand by Your Ad • To obtain the LUC, federal candidates or their authorized Stand by Your Ad • To obtain the LUC, federal candidates or their authorized committees must certify in writing to stations that: the political programming they will air does not contain a reference to an opposing candidate, OR if there is a reference to an opposing candidate, the spots will contain additional disclosures

Example- Ref. Opposition But Not Advocating Election/Defeat (Radio) • At the end of the Example- Ref. Opposition But Not Advocating Election/Defeat (Radio) • At the end of the programming, an audio statement by the candidate identifying him or herself, the office being sought and that the candidate approved the broadcast • Sponsor ID Chart

“Stand by Your Ad” • Does it have to be a negative reference? • “Stand by Your Ad” • Does it have to be a negative reference? • How often should candidates certify? BCRA says “at the time of purchase” NAB suggests obtaining a certification for each buy • Do stations have to check the accuracy of candidate certifications?

What Happens if a Candidate Doesn’t Certify? • Loses LUC for the remainder of What Happens if a Candidate Doesn’t Certify? • Loses LUC for the remainder of the campaign • FCC staff says that if a candidate loses the LUC for the primary, he/she can get it back for the election • FEC Deadlock • BCRA suggests that candidates would lose the LUC on all stations, but no way to enforce that

Political File • Important because this is the only source of information for candidates Political File • Important because this is the only source of information for candidates about their opposition’s appearances • Stations may not respond to “blind” requests for avails or time • FCC excludes political file from telephone access rule and new enhanced disclosure rule

Political File Must Include • All requests for time (but not simple rate inquiries) Political File Must Include • All requests for time (but not simple rate inquiries) • The nature and disposition of the request (i. e. , how did the station respond? ) • The rates charged • The dates and times spots aired • Any other non-exempt uses

Political File • Information must be placed in the file “as soon as possible” Political File • Information must be placed in the file “as soon as possible” • Stations may provide exact times when spots aired upon request • Stations must keep information in the political file for 2 years

Resources • NAB Members can call the NAB Legal Hotline at 866 682 0276 Resources • NAB Members can call the NAB Legal Hotline at 866 682 0276 • Be Sure to Utilize Your Station Counsel • PB-16 and Political Broadcast Catechism are available at www. nabstore. com