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Political broadcasting decision for non-comms causing heartburn, uncertainty

The April 12 Ninth Circuit U.S. Court of Appeals decision in Minority Television Project v FCC has rocked the public broadcasting and political worlds.

Attorney Gregg Skall of TAB Associate Member Womble Carlyle Sandridge & Rice, LLP said the decision upheld that the law prohibiting public broadcasters from political advertisements and accepting advertisements addressing issues of public importance constituted a prohibited content-based ban on speech that violated the First Amendment to the United States Constitution.

Skall said the court also held the portion of the law, Section 399(b) of the Communications Act, that prohibits public broadcasting stations from transmitting normal commercial advertising was justified and constitutional.

Minority Television Project is a California nonprofit that operates non-English language television in San Francisco.

It does not receive funding from the Corporation for Public Broadcasting (CPB). Minority contended that the entire statute is an unconstitutional content-based restriction because it bans all paid public issue and political speech while permitting paid promotional messages by non-profit advertisers.

The government contended that Section 399(b)’s restrictions on advertising are necessary to preserve the educational nature of public broadcasting programming, arguing that the mass-market appeal of advertiser-supported television would fatally encourage public broadcasters to modify their mission by replacing niche programming with mass-appeal-type programming reaching the mass-market audiences that serve most advertisers.

Broadcast lawyers, public broadcasters and industry associations immediately reacted with questions over the implications of this decision for upcoming primary and general elections.

Will public broadcasting now become a major medium for political advertising?

Does a public station have a lowest unit rate?

If it does, how does this ruling affect a public station’s lowest unit rate?

Will candidates now demand access to public broadcasting stations?

With many states are facing primaries in a month or two, it is important to recognize that this decision is unlikely to become effective anytime soon.

At minimum, the court mandate implementing the decision cannot issue until seven days after the denial of a petition for rehearing by the full panel, or a motion for stay.

The government has up to 45 days to file its petition.

Further, the court did not implement its own decision; rather, it remanded the case to the District Court for further proceedings, which would also take some time.

So, it is likely that political advertisers will be able to take advantage of the case only after the District Court has finished its further proceedings.

The betting is that the government will request a rehearing or appeal the case and obtain a further stay of the Court’s decision, particularly in light of the well-reasoned dissent of Judge Paez taking issue with the majority’s reliance on commercial broadcaster advertising cases.

In Judge Pasz’s view, the government produced sufficient evidence to conclude that political advertising does indeed present a greater harm to public broadcasting than non-profit advertising, arguing that public stations could easily be swamped by the very large market for political advertising.

Even a casual observer of the broadcast advertising market can see that more money is being amassed for the 2012 election year, both by candidates and SuperPACs, than Skall said he has ever seen before.

The majority declined to apply First Amendment strict scrutiny to the case, presenting instead an elaborate discussion of the standard of review and how it applies to the case, and concluding that the correct standard was intermediate scrutiny.

Under intermediate scrutiny standard, the government must prove only that a challenged statute is “narrowly tailored to further substantial government interests.”

Referring to two cases known as “the Turner Cases,” where the requirement for cable systems to carry local broadcast stations was challenged, Judge Bea wrote that the guiding principle under the “narrowly tailored” standard of intermediate scrutiny is that the government must “demonstrate that the recited harms” to the substantial government interest “are real, not merely conjectural, and that the regulation will, in fact, alleviate those harms in a direct and material way.”

The majority concluded that Congress’s decision that paid promotional messages by for-profit entities pose a threat to public broadcast stations’ niche programming mission was supported by substantial evidence including substantial evidence in the record before Congress.

However, it believed the outcome to be different in the case of public issue and political advertising, finding no evidence in the record to connect the ban on such speech to the government’s interest in maintaining certain types of educational programming.

It concluded that such advertising was unlikely to encourage public broadcast stations to dilute their noncommercial programming.

If this ruling goes into effect, two issues of immediate concern are the consequences for mandatory access and lowest unit rate. First, it is important to recognize that Section 312(a)(7) of the Communications Act and its requirement of mandatory access for legally qualified candidates for federal elective office was not before the court. The court did not consider or rule on that issue or section. 312(a)(7) was amended to specifically exclude non-commercial educational broadcasting stations and that exclusion still stands. Federal candidates are not entitled to mandatory access of public broadcasting stations.

Given the financial dire straits of some public broadcast stations, however, it is not hard to imagine that more than a few may be interested in this new potential source of revenue.

Should that be the case, the question then becomes how they would be affected by the lowest unit charge requirement of Section 315.

While the answer to that question is by no means certain, it is worth noting that the Commission has always protected a broadcaster’s right to determine its own classes of time and apply separate lowest unit charge rates to each properly-constructed class, so long as that class of time criteria is not based on quantity.

Since public broadcasters’ underwriting messages have all been limited to messages that do not contain a “call-to-action,” or institutional messages, it might be reasonable to conclude that issue advertising and political candidate advertising would be considered a logical separate class of time distinct from underwriting, institutional-styled messages.

Therefore, as a separate class of time, not based on quantity, issue advertising relating to political issues and political candidate advertising could be deemed an entirely separate class of time for which there is no comparable precedent at any public broadcasting station.

The lowest unit rate for it, then, would be set by the rate at which a public broadcasting station sold its original political advertising.


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