Attorneys 'Murky' on Foreign Sponsored Content Rules
FCC disclosure requirements for broadcasters airing foreign sponsored content took effect Tuesday and several broadcast attorneys told us it isn’t totally clear how the requirements will be implemented. “In light of recent events, this effort -- which is all about transparency -- has taken on new importance,” said Chairwoman Jessica Rosenworcel in a release Tuesday, the effective date. “The FCC’s approach is not only unlawful but is woefully unnecessary to capturing only a handful of relevant agreements,” said an NAB spokesperson. NAB -- along with the National Association of Black Owned Broadcasters and the Multicultural Media, Telecom and Internet Council -- challenged the rule in the U.S. Court of Appeals for the D.C. Circuit, and oral argument in the case is April 12.
“It is essential that audiences know when a broadcast station has been compensated to air content coming from a foreign government,” Rosenworcel said in the release, which notes the rules were adopted unanimously. “Broadcasters support uniform disclosures of content provided by foreign governments or their agents,” said the NAB spokesperson. NAB asked members to stop broadcasting Russian state media last week (see 2203010067). “The challenge with the FCC’s new rules is that they encumber every single broadcast lease, despite a minute fraction of broadcasters leasing any time to foreign governments or their agents.” The Media Bureau also released a public notice making the effective date Tuesday, and the FCC via letter informed the D.C. Circuit the rules were in effect.
The D.C. Circuit rejected broadcasters’ request to stay the rules earlier this month. With rules now in effect, broadcasters will need to check all new entities seeking to lease broadcast time against Foreign Agents Registration Act and FCC databases to determine if they've registered as foreign agents. They will have six months to do the same for existing lease agreements -- until Sept. 15, the FCC said. “They’re going to have to call up people they know perfectly well and ask them if they’re foreign agents,” said Fletcher Heald broadcast attorney Anne Crump, who has clients that lease time. Outlets that air content sponsored by “any entity or individual that is a foreign government, a foreign political party, an agent acting on behalf of such entities, or a U.S.-based foreign media outlet” will be required to air disclosures at the beginning and end of the broadcasts and keep records in their public inspection files.
Crump said it isn’t clear how stiffly the FCC will enforce the new requirements or precisely what's expected, so she will advise her clients to document everything about the process. The rules appear targeted at broadcasters leasing entire channels to foreign-sponsored content providers like RT, but it's “murky” whether they apply to shorter chunks of leased time, said Hardy Carey broadcast attorney Joseph Chautin. He said he’s thankful for the six-month phase-in for existing agreements because it gives broadcasters more time to get a feel for what’s expected of them -- and time for a possible D.C. Circuit intervention.
When the order was approved in April, then-Media Bureau Chief Michelle Carey said the item was “a big initiative” for the agency and the FCC tends to be rigorous about enforcement in such cases. The rules don’t include specific base forfeiture amounts for violating the rule, which is similar to the sponsorship ID rules. The FCC in January 2021 fined Cumulus $233,000 for repeated sponsorship ID violations (see 2101140049).
Leasing agreements don’t often come up for the smaller broadcasters she tends to have as clients, said Dawn Sciarrino, radio attorney with Sciarrino and Associates. She said it’s unlikely that foreign governments would seek to target rural, sparsely populated counties with propaganda broadcasts. Small markets aren’t likely to be “terribly affected” by the new rules, though smaller stations that do have leasing arrangements will be the least equipped to handle the compliance burden, she said.