Broadcasters: Foreign-Sponsored Content Updates Exceed Authority, Burden Stations

The FCC’s proposed updates to its foreign-sponsored content rules would exceed the agency’s authority, increase burdens for broadcasters, and are unnecessary, said NAB, Gray Television, network affiliate groups, and the Multicultural Media, Telecom and Internet Council in comments this week in docket 20-299. Enacting “unnecessary, burdensome regulations” to “protect against something that from all indications has never happened does not reflect a sound approach to rulemaking,” said the affiliate groups. If such rules are enacted, the agency should carve out exceptions for advertising and religious and local programming, as well as grandfather existing agreements, the broadcasters said.

The foreign-sponsored content NPRM was unanimously approved in October and sought comment on updates to the rules in the wake of the July U.S. Court of Appeals for the D.C. Circuit ruling for NAB and MMTC against some of the original requirements. The NPRM proposed requiring standardized certifications from broadcasters and program lessees on whether a lessee is a foreign governmental entity, along with online public file obligations. It also asked for comment on an earlier petition from broadcasters seeking clarification on how the foreign-sponsored content rules apply to advertising. Legislation seeking to restore the portions of the rules knocked down by the D.C. Circuit has been introduced in the House and Senate (see 2210170065).

The proposals to require broadcasters and lessees to certify they aren’t foreign agents or being compensated by them would again require more of broadcasters than the law allows “by mandating more than the reasonable diligence required by the statute,” said Gray. The proposals are “beyond the FCC’s statutory authority” and place “unjustifiable -- and even unconstitutional -- burdens” on broadcasters, said NAB and MMTC in a joint filing. “Congress did not intend for the Commission to regulate program providers,” said the joint filing. “The Commission simply has no statutory power to require lessee certifications.”

“Thousands of lessees -- including small entities without counsel, such as local houses of worship and high school football programs -- would have to train themselves to navigate” the Foreign Agents Registration Act databases, said NAB and MMTC. “Not only is this regulatory overkill, but the risk of error is high.”

The new rules would create a substantial burden for broadcasters, especially coming so close on the heels of the original foreign-sponsored content rules, the commenters said. “If the proposed new rules are adopted, many local station groups would be developing and implementing a new diligence system for the third time in less than two years,” said NAB and MMTC. Broadcasters would have to return to lessees they had already queried about foreign relationships and require additional certifications from them, the commenters said. That could have a chilling effect on future business relationships, NAB and MMTC said. Proposals to require such certifications in broadcaster online public files would further burden stations, broadcasters said. If the FCC does require certifications in public files, it should do so only when an entity has certified that it's a foreign agent, NAB and MMTC said. If the agency requires broadcasters to also file certifications that entities aren’t foreign agents, the amount of such filings would make the records largely useless, NAB and MMTC said.

The FCC could reduce the burden on broadcasters by clarifying that the foreign-sponsored content rules don’t apply to paid ads for goods and services, the broadcasters said. The FCC has proposed a carve-out for content that's less than two minutes long, but that would still loop in many advertisements, the affiliate groups said. “Programming containing propaganda could be delivered through leases of two minutes or less,” said the affiliate groups, saying paid ads for goods and services are “frequently sold in blocks of time that are longer than two minutes.” Commercial advertising ”has never presented any issues with respect to targeting the foreign propaganda that is the goal of this proceeding,” the affiliate groups said. If the agency seeks to target paid advertising, it should open a new proceeding, the groups said.

NAB and other commenters also asked the FCC to exempt faith-based programming and locally produced programming such as sporting events. The agency “should avoid sweeping tens of thousands of agreements involving infomercials, local houses of worship, and local small businesses into its extensive diligence regulatory regime.” The FCC should also clarify that the updated rules -- like the original foreign-sponsored content rules -- don’t apply to noncommercial educational broadcasters, said a joint filing from America’s Public Television Stations, National Public Radio and PBS. “It is our understanding that the proposals in the Second NPRM do not alter the Commission’s previous conclusions that these rules are inapplicable to NCEs.”