The FCC recently announced its new requirements for identifying “leased” programming that is sponsored by foreign governments or their agents. Such programming is subject to the FCC’s enhanced sponsorship ID requirements.
A key question has been the nature and scope of a station’s obligation to investigate whether a program has been sponsored by a foreign government. The foreign sponsorship ID requirements in the FCC rules require that licensees exercise reasonable diligence to obtain information:
(1) Inform the lessee of the foreign sponsorship disclosure requirement.
(2) Ask the lessee whether it falls into any of the categories that would qualify it as a “foreign
governmental entity.”
(3) Ask the lessee whether it knows if any individual/entity further back in the chain of
producing/distributing the programming to be aired qualifies as a foreign governmental entity and
has provided some type of inducement to air the programming.
(4) Memorialize the above-listed inquiries and retain such memorialization in its records for the remainder of the license term or for one year, whichever is longer.
There was an additional rule requiring stations to check federal databases to see if the entity was listed as a foreign entity. This requirement was struck down by the Court of Appeals which held
that section 317(c) imposes on licensees only “a duty of inquiry," not a duty of investigation.
Responding to the Court’s decision, last week the FCC replaced the “investigation” obligation with a verification requirement that gives broadcasters two options to comply with the rules:
Option 1: A station and the lessee must both execute written certifications using standardized language, with the lessee certifying that they are not acting on behalf of a foreign government and the licensee certifying that they explained this FCC requirement to the lessee; or
Option 2: A station must ask the lessee to provide screenshots of the search results for the lessee’s name in the Department of Justice’s Foreign Agent Registration Act database and the FCC’s most recent U.S.-based foreign media outlet report.
In effect, while the court ruled that the FCC cannot require stations to investigate, it believes it can require stations to ask if their program supplier is a foreign government or agent. The FCC adopted standardized templates to help with the certification process. Stations not wanting to use the FCC’s templates may develop their own that are consistent with the rules.
Importantly, the foreign sponsorship identification rules will not apply to sales of advertising for commercial goods and services to the extent that such programming would not otherwise be subject to the general sponsorship disclosure rules, as set forth in the FCC’s rules. The rules will not apply to political candidate advertisements.
However, in a significant reversal of its previous position, the FCC’s new rules will apply to issue advertisements and paid public service announcements. Moreover, programming lease agreements in existence at the time of the compliance date are grandfathered for the duration of the lease. Going forward, the new rules will apply to any extensions of the lease agreement. The rules will apply to locally produced programming as well as religious programs. The rules will apply regardless of whether the programming is paid for or supplied to the station “for free.”
Stations in the North Country that broadcast Canadian programs should consult their attorneys to determine whether the programming falls withing the scope of the rules. We are not convinced that the revised rule will pass court muster. We expect the most recent decision to trigger additional litigation.
You can access a copy of the FCC’s decision here.