FCC Amends and Clarifies Foreign Sponsorship Identification Requirements

In a long-awaited decision that followed a 2022 effort to impose new foreign sponsorship identification requirements on broadcasters, and a legal challenge that followed it, the FCC has now issued a Report & Order that amends and clarifies the existing rules. One clarification related to short-form advertising was not contemplated by the FCC in its rulemaking proceeding and will likely result in a new legal challenge to the rules.

The Order first addresses a ruling by the U.S. Court of Appeals for the District of Columbia Circuit that vacated the 2022 rule requiring broadcasters to check U.S. databases as part of foreign sponsorship identification requirements. That verification requirement has now been replaced with an approach that gives broadcast licensees two options for demonstrating that they have met their duty of inquiry in seeking to obtain the information needed to determine whether the programming being provided by a lessee is sponsored by a foreign governmental entity.  The first option is the use of FCC-provided short certification statements (or your own) that both stations and programmers would have to sign.  The second option is for the programmer to provide printouts of their own FARA database search showing that they are not registered.  While stations would have to maintain records of their inquiries, the FCC decided against adopting its earlier proposed requirement for stations to upload certifications of non-foreign status to the station online public file.

The FCC’s Order also took an unusual step in seeking to clarify its earlier use of the term “short-form advertising” as being exempt from foreign sponsorship ID requirements. Instead of leaving broadcasters with some discretion, it significantly narrowed exempt advertising by determining exemption based on whether an advertisement falls with another section of the general sponsorship ID rules (where the sponsor is clear from the use of the advertiser’s name or product). The FCC also clarified that political candidate ads would be exempt from foreign sponsorship identification requirements, but that issue ads and paid public service announcements would not be exempt.  The parts of the decision about advertising will likely draw a legal challenge, since the FCC had not forecasted in the rulemaking that it intended to narrow the types of advertising that are exempt from the rule.

The FCC also decided against creating a blanket exemption for religious programming or locally produced/distributed programming, but did clarify that programming on noncommercial educational stations is exempt because of the existing restriction prohibiting leased airtime on NCE stations (such stations are instead allowed to charge an amount to program providers based upon station operating costs).

The open question about this latest FCC Order is whether it will be legally challenged, and if so, whether some or all of the rule changes go into effect or are halted by a court.

Currently, based on earlier-adopted foreign sponsorship identification rules, commercial stations should be documenting inquiries to paid programmers to confirm that they are not foreign entities or sponsors, and retaining that documentation.  In the event a programmer is in fact foreign or foreign-sponsored, the program can still air, but an on-air and public file disclosure must be made. If your station has questions on what is currently required, please contact us.