Sponsorship Identification Requirements in the Age of COVID-19

If you want the FCC and its Enforcement Bureau to stay off your back for advertising, one cardinal rule is: always tell the audience who is speaking to them. Section 317 of the Communications Act of 1934, and its counterpart, 47 C.F.R. 73.1212, require that whenever a station broadcasts anything for which it is receiving compensation, it must be accompanied by an announcement that it has been paid for and by whom or on whose behalf such consideration was supplied. The law also requires that the announcement “. . . fully and fairly disclose the true identity . . .” of the advertiser. In other words, who the real party paying for the ad is.

This comes up most frequently in the period prior to an election, when there is a lot of issue advertising on the ballot, or when candidates are closely associated with particular issues. We should see even more of this advertising in the 30-day pre-election period, now that the Supreme Court has opened the way for issue group advertising right before election periods. In the landmark campaign finance decision Federal Election Commission v. Wisconsin Right to Life, the U.S. Supreme Court removed barriers on ads financed by corporations that mention a federal candidate and are run in the days before an election. This decision freed corporations – advocacy groups, trade associations, and for-profit businesses – to pursue more robust communications strategies, and many of them involve radio and television advertising.

Under Section 317 of the Communications Act of 1934 and Section 73.1212 of the Commission's Rules, a broadcast licensee is required to identify the sponsors of paid political advertising at the time those advertisements are broadcast and is under a duty to make a reasonably diligent inquiry to learn, in order to identify, the true sponsor of the advertisements when the licensee has reason to think that it is someone other than the apparent sponsor. The Commission will determine liability by looking at the particular facts and circumstances surrounding the licensee's effort to make a reasonably diligent inquiry.

The COVID-19 Exception

In early April, the FCC decided to make a special exception to the rule. In the Sponsorship ID Waiver Order, the Bureau waived the sponsorship identification requirements in the limited circumstances arising from the outbreak of COVID-19. As a result of the outbreak of COVID-19 and the associated social distancing requirements, suspension of regular business operations, and cancellation of events, many entities found they could no longer use the commercial advertising time that they had previously purchased from broadcast television and radio stations. Others found that the advertising they planned was no longer appropriate under the circumstances. Some of these entities sought to donate the time for the purpose of broadcasting public service announcements (PSAs) prepared by, or on behalf of, the Centers for Disease Control and Prevention (CDC), or other governmental agencies or public health authorities, regarding COVID-19.

The Bureau determined that donated PSA’s can provide critical public health information to viewers and listeners. However, they identify the CDC, or other governmental agency or public health authority, as the source of the announcement without mentioning the entity that had originally purchased and then donated the advertising time. Finding that the public interest, convenience, and necessity would be best served by encouraging such advertising time donations the Bureau granted a limited waiver of the sponsorship identification rules in such circumstances effective through June 30, 2020 and noted that they would continue to monitor this situation and address in a further order any necessary extension of this relief. That time has come.

Recognizing that the COVID-19 national emergency continues, notwithstanding phased reopening in many states, the Bureau has determined that the absence of material changes in the circumstances supporting the initial grant of waiver of the sponsorship identification requirements, an extension of the waiver is warranted. Therefore, on Friday, June 26, it extended the COVID-19 waiver of its sponsorship identification requirements for donated time through August 31, 2020 and that it will again evaluate the circumstances at that time. The full order can be read at this link: Sponsorship Identification Requirements

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.