Broadcasters Face New Foreign Sponsorship Identification Requirements

The FCC has amended its foreign sponsorship identification rules and is providing radio and television broadcasters two options to demonstrate compliance. The FCC also expanded the application of the rules to include short-form issue advertising and paid public service announcements. This expansion is likely to draw legal challenges from broadcasters, and was the subject of strong dissents from Commissioners Carr and Simington.

Background and History

The foreign sponsorship identification rules require broadcast licensees to disclose the identity of any foreign governmental entity that leases time on a radio or television station. When the FCC enacted the rules in 2021, it required licensees to search the Department of Justice’s Foreign Agent Registration Act (FARA) website and the FCC’s U.S.-based foreign media outlet list to independently determine whether a program lessee was a foreign governmental entity. The DC Circuit decided the FCC had overstepped its authority by requiring broadcasters to conduct these database searches, and struck down that part of the rules. Following the court’s decision, the FCC proposed revisions to the initial rules it had adopted in 2021.

New Due Diligence Options

Licensees will now have two options for determining if a foreign sponsorship disclosure is needed: a certification option and a screenshot option.

Certification Option. Under the certification option, the licensee and the lessee will each complete a one-page certification that covers the information in Section 73.1212(j)(3)(i)-(iii) of the FCC’s rules. The licensee certification states that the licensee informed the lessee of the foreign sponsorship identification requirement, asked the lessee whether it falls into any of the “foreign government entity” categories, asked for information about entities further back in the program production and distribution chains, requested a written certification from the lessee, and gathered the information for any required disclosure. The lessee certification contains similar statements. The FCC’s certification templates are available here, although the FCC said licensees and lessees do not have to use these templates if they have already developed their own certification language and confirmed their certifications contain the required information.

Screenshot Option. As an alternative to the certification option, the licensee can ask the lessee if it is a registered FARA agent or is listed in the FCC U.S.-based foreign media outlet report. If the lessee says “no,” the licensee then asks the lessee for screenshots of search results of the DOJ FARA and FCC U.S-based foreign media outlet report websites, showing the lessee is not listed.

If the lessee does not respond to the licensee’s request for a certification or screenshots, the licensee can continue to air the lessee’s programming, but the FCC might later conduct an inquiry to determine if the licensee exercised adequate due diligence. Accordingly, the licensee should retain copies of communications with a lessee regarding the foreign sponsorship identification rules. Documentation can be retained in internal station files.

Retention Requirements

The licensee is required to retain the certifications and/or screenshots for the longer of its license term or one year. The certifications or screenshots can be kept in the licensee’s internal files or, at the licensee’s option, uploaded to the station’s online public inspection file. Copies of the actual lease agreements and foreign sponsorship disclosures must be uploaded to the station’s online public inspection file.

Existing Leases and Frequency of Certification

Existing leases are grandfathered until the lease is up for renewal or the parties enter a new lease. Any new lease executed or renewed after the effective date of the rules must comply with the new rules. If a lease is renewed multiple times in a year (such as a week-to-week or month-to-month renewal), only one certification is required per year.

Application to Different Types of Programming

The FCC clarified that the foreign sponsorship identification requirements do not apply to:

· Advertising for Commercial Goods and Services. The rules are not applicable to traditional short form advertising for commercial products or services.

· Political Candidate Advertising. The rules are not applicable to advertising purchased by a legally qualified candidate or the candidate’s authorized committee.

· Programming on Noncommercial Educational Stations. The rules do not apply to noncommercial educational broadcast stations because these stations are prohibited from receiving compensation in exchange for broadcasting programming.

The FCC clarified that the foreign sponsorship identification requirements do apply to:

· Issue Advertising and Paid PSAs. The rules are applicable to issue advertising (paid political matter or matter involving the discussion of a controversial issue of public importance, regardless of the length of the advertising) and paid public service announcements.

· Religious and Locally Produced and/or Locally Distributed Programming. Religious programming and locally produced or distributed programming provided by lessees is not exempt.

· Programming on Stations with Section 325(c) Permits. A Section 325(c) permit is required when an entity produces programming in the U.S. but transmits the programming to a foreign station for broadcast back into the U.S. The foreign sponsorship identification rules apply to all programming provided by a Section 325(c) permit holder to a foreign station.

The new rules will take effect 30 days after publication in the Federal Register.

For more information about the foreign sponsorship identification rules, contact an attorney in our Media practice group.