The new rules require broadcasters to post their entire public files online, including political ad rates. Broadcasters had objected to posting political rates, arguing that it would interfere with their sales efforts. The new rules apply only to top four affiliates in top 50 markets for the first two years.
Rejecting a compromise advanced by broadcasters, the FCC this morning adopted new rules requiring TV stations to post their political advertising file online.
For now, file obligation will apply only to Big Four affiliates in the top 50 markets. Most other stations will have to comply in two years.
The posting of political files is part of a broader new requirement that stations start putting their paper public inspection files on the Internet for easier public access. The paper files, which are available to anyone who visits a station, contain a variety of information, much of which is already available on the FCC website.
But it is the posting of the political files that has caused the most alarm among broadcasters. The files include data on the advertising bought by candidates, PACs and advocacy groups.
Broadcasters say putting the files online gives rivals easy access to sensitive price information that could be used against them in selling spots to commercial advertisers.
In an effort to head off the political advertising requirement, a broad coalition of broadcasters, including the NAB, floated an alternate proposal that would have required stations to report online which candidates or groups are buying political spots on their air and how much they are paying in total, but not the price of the individual spots.
The compromise got no traction with FCC Chairman Julius Genachowski. At today’s open meeting, he and follow Democratic Commissioner Mignon Clyburn voiced strong support for putting public information, including poltical rates, online.
Genachowski said the FCC’s decision “not only enhances transparency and informs the public, it also drives efficiency and cost-savings, since our order would allow broadcasters to shift completely from paper to digital.”
The chairman also took issue with the broadcast industry’s complaints about moving the political file online. “Opponents have argued that the rates broadcasters charge for political advertising are commercially sensitive and should, in effect, be censored from the public file as it appears online,” he said. “But, 1) Congress explicitly requires broadcasters to disclose this information to the public; 2), broadcasters already do; and 3), competitors and customers already have access to this information and are already reviewing it where they have an economic incentive to do so.”
He also pointed out that after the Bipartisan Campaign Reform Act became law in 2002, the National Association of Broadcasters and others sued to invalidate the political file provisions. “They fought it to the Supreme Court, and they lost,” the chairman added.
Genachowski also knocked the broadcaster’s compromise proposal, saying that it would have censored “from online access information that Congress explicitly required to be made public. ”
And he insisted that the proposal would “be significantly more burdensome on broadcasters than the plan that opponents had earlier said was too burdensome — because it would require both the maintenance of paper files and the submission of separate newly created information. Our staff carefully analyzed this proposal and other proposals made, and concluded that they were not workable.”
In a slight bow to the broadcasters, the FCC said it would review the impact of the political file requirement to make sure it is doing no unintentional harm.
Robert McDowell, the lone Republican on the three-person commission, objected to including the rates in the online requirement. He voted for the rules, dissenting in part.
McDowell said putting rate info online could have all sorts of unintended consequences. “The record in this proceeding contains ample evidence that posting rate information online may cause market distortions, including price signaling, which could lead to rates mysteriously rising in some markets, or other unforeseen consequences in other cases,” he said.
Genachowski and Clyburn discount the effect that anti-competitive pricing activity could have on everyday consumers, he said.”By forcing broadcasters to do what would otherwise be illegal is simply surreal.”
The NAB hinted it might challenge the mandate in court with talk of “options.”
“By forcing broadcasters to be the only medium to disclose on the Internet our political advertising rates, the FCC jeopardizes the competitive standing of stations that provide local news, entertainment, sports and life-saving weather information free of charge to tens of millions of Americans daily,” said spokesman Dennis Wharton in a prepared statement. “We appreciate Commissioner McDowell’s thoughtful and compelling dissent, and we will be seeking guidance from our board of directors regarding our options.”
Genachowski was not deaf to the concerns of broadcasters. As adopted, the rules are less onerous than those originally proposed by the staff.
In addition to relieving stations outside the top 50 markets of the online obligation for two years, the rules do not require any stations to post any older political data online. Smaller stations will have the option of applying for a waiver from the rules based on hardship or technical reasons.
And the FCC decided it would require stations to upload files only in the PDF format rather than into a searchable, common database.
The agency also backed off earlier proposals to add new obligations for the online files such as including a list of all program sponsors and shared services agreements.
The FCC adopted rules requiring stations to post their public inspection files with the exception of the political data in 2007. The rules never went into effect. Broadcasters asked the FCC to reconsider. And the FCC never sent the rules to the Office of Management and Budget for its necessary approval.
Late last year, the agency revisited that decision and again decided that TV stations should post their paper public inspection files online. This time, however, it decided that the political files should be part of the requirement.
The non-political information in public inspection files includes FCC applications, FCC authorization and signal contour maps, ownership reports and related material, EEO reports, letters and emails from the public, FCC children’s programming reports, commercial limits certification, FCC consumer education quarterly report, quarterly issues/programs lists, DTV transition reports, a political file, joint sales agreements, time brokerage agreements and a station’s must-carry or retransmission consent election.
A driving force behind the FCC’s online initiative have been advocacy groups like Free Press. They are concerned about the money pouring into political campaigns and PACs in the wake of the Supreme Court Citizens United decision, which allowed unlimited political expenditures by corporations and unions.
“Today’s vote is a win for transparency, open access to information and the public,” said Free Press Senior Policy Counsel Corie Wright. “Television broadcasters stand to rake in more than $3 billion in political ads this year. Access to information about the money and special interests behind these ads will enable the public and journalists to track the political advertising flooding the airwaves,” he said. “Today’s vote will also help local communities assess whether broadcasters are using their government-granted monopoly to favor one side or another in electoral races and political debates. And it will give the public information not just about federal races, but state and local contests, ballot initiatives and issue ads.”