Broadcasters Accuse FCC of Overreach with Rules on Foreign Disclosures

WASHINGTON — The Federal Communications Commission is defending itself in court against allegations from U.S. broadcasters that the agency exceeds its authority with new rules on business transactions with foreign governments.

The rules approved by the FCC last spring require broadcast stations to disclose when their programming is sponsored by foreign government entities.

They also must investigate whether purchasers of their program time represent any foreign government or affiliated organizations. The program time typically refers to ads or infomercials.

The National Association of Broadcasters calls the rules a heavy-handed governmental intrusion chasing after a phantom problem. The industry association also says they violate First Amendment free speech rights of the media.

“The new rules are contrary to statutory provisions on sponsorship identification, as well as unduly onerous and vastly overbroad, unreasonably burdening local stations, including smaller and diverse broadcasters least able to bear those additional costs, while failing to materially advance the FCC’s goals,” a recent NAB court filing says.

The FCC and broadcasters are scheduled for a hearing April 12 in the U.S. Circuit Court of Appeals for the District of Columbia. The FCC regulates broadcasters and can fine, suspend or remove the licenses of stations that violate its rules.

The agency’s authority is limited by the federal Administrative Procedure Act, which requires the FCC to use the least restrictive means of regulating broadcasters and only when it represents a compelling governmental interest.

The new rules coincide with concerns in Congress heightened by evidence the Russian government tried to influence the 2016 presidential election in favor of Donald Trump. The Russians allegedly used the U.S. media to discredit his Democratic opponent, Hillary Clinton.

Congressional investigators said that if it happened once, it might happen again by foreign agents posing as legitimate businessmen buying media campaigns.

The risks of undue influence would continue if broadcasters do not investigate the political connections of their advertisers, according to the FCC.

The FCC accused the NAB in a court filing last month of complaining unnecessarily about a small procedural change.

Broadcasters could fulfill their duties in minutes by running the names of companies seeking to lease airtime through two government databases that track foreign companies, the FCC says. If the names do not appear, they don’t need to do anything else.

The FCC filing says “the added burden of the new rule is minimal, and the rule serves a substantial governmental interest. The rule therefore complies with the First Amendment and the Administrative Procedure Act.”

Rather than violating free speech rights, the FCC says its new rules promote them by protecting the public’s right to know about sponsorships.

The National Association of Broadcasters says the FCC underestimates the oppressiveness of the rules.

Radio and television broadcasters would need to “make specific inquiries of and independently investigate every lessee that it currently or will in the future have a lease agreement with,” the NAB argues in a court filing.

Its member stations would be compelled to spend hundreds of thousands of dollars in legal fees and employee man-hours to revise their lease agreements with advertisers, the NAB says.

Joining the NAB in the lawsuit are broadcast organizations Multicultural Media; the Telecom and Internet Council; and the National Association of Black Owned Broadcasters.

The case is National Association of Broadcasters et al. v. FCC et al., case number 21-1171, in the U.S. Court of Appeals for the District of Columbia.

Tom can be reached at [email protected]