FCC Doubles Down on Foreign Sponsorship ID Rules with Second Rulemaking; Congress Introduces Related Legislation

This past summer, after the DC Circuit overruled the FCC’s attempt to require broadcasters to check foreign entity/agent federal databases as part of new foreign sponsorship identification rules, the FCC Chairwoman circulated a follow-up rulemaking in lieu of challenging the decision.  That Second Notice of Proposed Rulemaking has now been adopted and published for comment and actually expands the originally adopted rule (most of which the DC Circuit did not overturn).

While the originally adopted and now effective rule requires stations to exercise reasonable diligence in determining whether a program is sponsored by a foreign government, entity or agent, it did not specify how a station was to do so but did impose the now overturned obligation to fact-check two federal databases as a backstop if a programmer claimed it was not foreign-sponsored.  The only time something needs to be made public is if a programmer confirms it is foreign-sponsored, in which case the station has to include an on-air announcement with the program and, on a quarterly basis, disclose details about those programs in its online public inspection file.

In the new rulemaking, the FCC wants to specify exactly how a station must perform its diligence by mandating that the station obtain a signature from the programmer to a series of precisely worded certification statements specified in the new rule.  For every lease of airtime where the signed questionnaire is obtained, the station must upload it along with the airtime lease agreement into the station public file.  If a programmer won’t provide the signature, the FCC wants to know and has proposed that the station email the FCC to report the non-signature.  The FCC wants comments on that, as well as whether the station should allow the program to air in such circumstances.  Then, as an alternative, the FCC proposes a possible checking of the federal foreign entity/agent databases by the programmer itself and a follow-on certification, all of which appears to be a work-around to what the DC Circuit prohibited the FCC from requiring stations to do.

The Second NPRM does help shed some light on the applicability of the foreign sponsorship identification rules to NCE stations; we’ll have more on that in an email to clients.

Just days after the Second NPRM release, a bill introduced in both the House and Senate entitled Identifying Propaganda on our Airwaves Act seeks to amend the Communications Act to specifically allow the FCC to require that stations check the foreign entity/agent federal databases as part of their diligence – a direct response to the DC Circuit’s decision.  But the legislation goes beyond the two databases the FCC originally wanted checked, and allows the FCC to add any additional outside sources for stations to check as well.  Whether the legislation has a chance of success is unknown at this point, as is whether the legislation will affect the scope or timing of a Second NPRM decision.  Chairwoman Rosenworcel did quickly issue a statement in support of the legislation.

Comment deadlines have not yet been announced. In our view, the Second NPRM tilts toward additional/higher compliance burdens, and unfortunately does not seek to further define “lease of airtime” to rule out shorter programs.  Stations that have already taken actions to comply with the new rule as of September 15, 2022 do not need to take further actions or change what has already been accomplished.