Political Disclosure Statements

Although the 2018 midterm political season is nearly over, a few still remain and campaign advertising will be getting really hot as we close in on the November mid-term general election. Disclosure statements may be more important than ever and questions are coming in fast and furious regarding what information must be disclosed to candidates and other political advertisers seeking to buy political time. The FCC has always emphasized that stations must fully disclose their selling practices to political advertisers.

Treat All Political Time Buyers as Novices

Regardless of their expertise, FCC rules presume political advertisers to be novices who can easily be steered toward premium-priced fixed or non-preemptable time when their needs might have been served by lower priced classes of time and are due a full disclosure by the broadcaster. The current political rules were written shortly after the 1990 election when many candidates complained they were not aware that they could have bought spots without paying for non-preemptable time. Accordingly, the Commission now requires that stations must disclose all discount privileges available to commercial advertisers as well as all other features of their time classes.

Remember, the burden of disclosure is on the station! And, the burden of disclosure is not limited to the 45-day and 60-day period preceding primaries and general elections. Rather, it applies to all requests on behalf of a legally qualified candidate and regardless of the complexity of the station's rate structure.

Some Examples

So, it's essential that each station disclosure form accurately describe its selling practices. An otherwise innocent attempt at compliance, however, can lead to danger when the broadcaster designing its advertising guidelines disclosure statement is not fully aware all implications in the rules. For example, a recent review of a disclosure statement submitted for review revealed several statements that required modification. Here are some examples. The original statement read:

Political candidates may purchase 30 or 60-second ads at "lowest unit charge" as long as they meet the political advertising guidelines to obtain "LUC". The current LUC rates are $8.75 net for a :30 ad and $14 net for a :60 ad. These ads will run at "best time available" from 6a to 7p ROS "bonus ads" are available based on ad purchase volume as they are for non-political advertisers. Issue advertisers are charged the appropriate rate based off of our rate card.

A well-meaning attempt, but the statement does not reveal the class of time or other classes of time that could be available, the rates may change during different seasons of the year, or depending on what other ads run in the same week as the candidate's ad. Also, volume discounts do not comply with LUC rules. Here's a better way:

A better way to say that might be political candidates may purchase ads at "lowest unit charge" for the class of time slot, provided they meet the requirements of a "legally qualified candidate" as defined by the Federal Communications Commission, the ad is authorized by the candidate's committee and the ad scheduled to run inside the FCC defined "political window."

At another point, the broadcaster said:

Political advertisers are able to purchase guaranteed time advertising for an additional $2 per ad.

The problem with that is determining whether the additional $2 actually comports with the lowest unit charge for the broadcaster's fixed position classes of time and does not relate to a specific base plus time.

A better way:

Political advertisers may purchase guaranteed time advertising at our next lowest advertising category under our fixed position rate plus an additional $2 per ad.

What about prior review?

This station only accepts political advertising from registered candidates, committees for registered candidates or qualified organizations. Political ad copy will be reviewed in advance. If, after the first airing, the ad does not have the appropriate disclaimer, we will add it to the spot in the time purchased even it overrides some of the ad. Be advised that if ads air without the proper disclaimer, candidates risk losing "lowest unit charge" for the entire race on all broadcast stations.

That statement is "sort of" true but a better way to put it would be:

This station only accepts political advertising at lowest unit charge from "legally qualified candidates" and their official committees as defined by the FCC, or qualified organizations. Political ad copy is requested for review prior to airing for the purpose of determining whether it contains proper sponsorship ID and disclaimers required by the Bi-Partisan Campaign Reform Act ("BCRA"). If after the first airing, the ad does not have the proper sponsorship ID, we will add it to the spot in the time purchased even if it overrides some of the ad. Be advised that if an ad airs without the proper BCRA disclaimer, the candidate will lose the right to lowest unit charge for the entire race on all broadcast stations.

The change makes clear that the station can only request a review prior to airing, but cannot require it, since it has no right of censorship with respect to legally qualified candidates. The "first airing" statement reflects the Commission's "one bite" rule; a broadcaster otherwise required to make sure that all matters have proper sponsorship ID is entitled to air a legally qualified political candidate ad at least one time without that proper sponsorship ID, since censorship is not permitted and you cannot demand that the ad be provided for prior review. After one airing, however the broadcaster is deemed to have knowledge of the content of the ad and will be required to make sure that there is proper sponsorship ID.

Here's another one that broadcaster had in a guideline.

We will be happy to put one of our "in-house" voices on the disclaimer information for any candidate on a non-discriminatory basis, if requested. If you need assistance or guidance with your advertising message, we will be happy to assist you.

That statement could lead to demands for your recognizable talent voices that the station may not want to offer and does not state the basis for any charges that might be imposed. Lowest unit charge does not extend to such additional services, but once made, the charges must be offered on a nondiscriminatory basis. A better statement might be if assistance is requested for your advertising message, we will be happy to consult, but specifically disclaim any responsibility or liability for any assistance.

How about: "This station will only allow the purchase of :30 or :60 radio ads. We will not vary from the choice of those two ad lengths." Is that full-disclosure if the station sells other length ads to its regular commercial advertisers? What if a federal candidate wants a 20-minute program? The access rights of candidates for federal elective office will require the station to negotiate for a non-standard program length, so that statement could lead to trouble if the station salespersons are unaware of that requirement.

Credit Policies

Credit policies can also be a problem. Suppose the station states: "All political advertising must be paid for in advance. Payment is expected before the start of the contracted ad schedule." That can be a problem if the station normally provides credit to a similar commercial advertiser, the candidate or agency has established credit relationship with the station and the candidate or agency assumes responsibility for payment. Under those circumstances, the station must extend credit.

A Disclosure List

When designing your disclosure statement, here's a useful list of the information required to be included:

• A description and definition of each class of time available to commercial advertisers that is complete enough to permit candidates to identify and understand the specific attributes of each class of time.
• A complete description of the lowest unit charge and related privileges (such as priorities against preemption and make goods prior to specific deadlines) for each class of time offered to commercial advertisers.
• A description of the station's practices with regard to selling preemptible time based on advertiser demand (including "current selling level" or "street rate") with the assurance that candidates will be able to purchase time at these demand-generated rates on the same basis as commercial advertisers.
• An approximation based on current experience of the likelihood of preemption of each class of preemptible time. This is designed to protect candidates from being steered to higher-priced fixed or non-preemptible time when there is an acceptable probability that a certain level of preemptible time would air. If a station has a practice of selling preemptible time to a high-volume advertiser with an understood assurance that the station will see to it that the spot will run, that same privilege must be accorded to the political advertiser even if the candidate is purchasing only a single spot.
• If the station has any sales practices based on audience delivery (such as no-charge bonus spots if the promised audience is not delivered), these practices must also be made known and made available to the candidate.

The purpose of the disclosure is both to inform potential political advertisers and to protect the station against accusations of deceptive selling practices. The best way to assure this result is to phrase it in simple, non-technical language. Remember, the candidate advertiser and its agents are presumed to be neophyte broadcast advertisers, so it should be understandable even by those with no prior experience.

Once the initial disclosure is made to a candidate, it need not be repeated each time the candidate purchases additional time. However, the obligation remains to update or modify all previous information as often as necessary to ensure its accuracy.

While the disclosure is not required to be written, since a candidate cannot be compelled to heed the disclosure, it should be in writing and either attached to the contract or note made and signed as to when it was provided. Only non-federal candidates may be required to sign a written acknowledgement of receipt of the disclosure as a condition of initial access to a broadcast station. Because of their right to station access, federal candidates cannot be required to sign a receipt of the disclosure, but if a candidate or candidate's representative refuses to sign a receipt, a notation to that effect should be placed in the political file.

This column is provided for general information purposes only and should not be relied upon as legal advice pertaining to any specific factual situation. Legal decisions should be made only after proper consultation with a legal professional of your choosing.