FCC Adopts New Foreign Sponsorship Identification Rules
FCC Adopts New Foreign Sponsorship Identification Rules
In late April 2021, the Federal Communications Commission (FCC) adopted new rules that require on-air programming sponsored or furnished by a foreign government to contain a disclosure statement noting the foreign government sponsorship and identifying the foreign country involved. While U.S. law bars foreign governments from holding broadcast licenses directly, there are no limitations on their ability to enter into agreements with licensees to air programming. Much like the Foreign Agents Registration Act (FARA), the new FCC rules seek to ensure that audiences are aware when a foreign government seeks to influence the U.S. public. At the same time, the new rules go beyond similar disclosure requirements in FARA and place a significant diligence burden on U.S. broadcasters.
The new rules, which were released in an April 22, 2021 Report and Order, will take effect 30 days after the date of publication in the Federal Register.
The FCC’s prior disclosure rules only required broadcasters to disclose the name(s) of the individuals or entities paying for or furnishing paid programming, including paid political programming. As discussed in detail below, the new rules require a disclosure when a foreign governmental entity directly or indirectly provides material for a broadcast, regardless of whether such material is paid programming.
The FCC borrows key definitions from FARA and the Communications Act of 1934. In defining “foreign governmental entity,” the Report and Order references FARA’s definitions of “government of a foreign country,” “foreign political party,” and “agent of a foreign principal,” if that agent is acting as a registered agent of the foreign government or foreign political party (defined in 22 U.S.C. §§ 611(c)–(f)). Also borrowing from FARA, the FCC noted that disclosure is required when the foreign principal is directly or indirectly operated, supervised, directed, owned, controlled, financed, or subsidized by a foreign government.
The scope of the FCC disclosure rules is broader than FARA and the Report and Order also extends the definition of foreign governmental entity beyond the limits of FARA to include entities that would otherwise be exempt under FARA. Specifically, it includes any entity or individual subject to section 722 of the Communications Act that has filed a report with the FCC. Section 722 applies to any U.S.-based foreign media outlet that: (a) produces or distributes video programming that is transmitted, or intended for transmission, by a multichannel video programming distributor to consumers in the United States, and (b) would be an “agent of a foreign principal” but for an exemption in FARA.
The new rules apply to any agreement in which a broadcast licensee makes a discrete block of broadcast time on its station available for a foreign governmental entity’s programming in exchange for compensation. The rules also apply to political programs or programs discussing controversial issues if the broadcast material was furnished for free by a foreign governmental entity as an inducement to air the programming.
The FCC borrowed the definition of “political program” from the Communications Act, which defines it as any program “seeking to persuade or dissuade the American public on a given political candidate or policy issue.” After consideration, the FCC chose to keep this limited definition of political programming instead of expanding it to include all programming provided by a foreign government entity. The FCC will determine on a case-by-case basis whether an issue is “controversial.”
The new Report and Order’s disclosure requirements are focused on leasing agreements between a station and a third party and, therefore, do not apply to paid advertisements. Paid advertisements will, however, remain subject to the existing sponsorship identification rules in 47 C.F.R.
In what is likely to be a significant burden for broadcasters, the responsibility for disclosure rests with the licensee. Specifically, a broadcast station licensee must exercise “reasonable diligence” to determine if foreign sponsorship identification is required.
Reasonable diligence requires the licensee to:
Reasonable diligence is required not only at the time of initial agreement, but also at the time of any renewal(s). Additionally, because a lessee’s status may change during the course of an agreement, the Report and Order encourages licensees to include a provision in all lease agreements that requires a lessee to provide notification about any change in its status that would trigger the foreign sponsorship identification rules.
Further adding to broadcaster burdens, the new reasonable diligence requirements will apply both on a prospective basis and to existing lease agreements. Current lease agreements must comply with the new rules, including undertaking reasonable diligence within six months of the effective date of the rules.
The Report and Order provides the standard language that broadcasters must use if disclosure is required. For televised programming, the disclosure must be in letters equal to or greater than four percent of the vertical picture height and be visible for at least four seconds. For radio broadcasts, the disclosure must be audible. Broadcasters must make the disclosure at the beginning and end of a broadcast, unless the broadcast is less than five minutes long, in which case the disclosure at the beginning of the program is sufficient. If a broadcast is longer than one hour, broadcasters must make disclosures at regular intervals throughout the broadcast and at least once per hour.
The required language that broadcasters must use is:
The [following/preceding] programming was [sponsored, paid for, or furnished,] either in whole or in part, by [name of foreign governmental entity] on behalf of [name of foreign country].
The new disclosure requirements appear to be more demanding than FARA but if the licensee is also subject to FARA, FARA’s labeling requirements will satisfy the new requirements, provided that the FARA label includes the name of the foreign governmental entity’s country and adheres to the frequency requirements described above.
In addition to in-broadcast disclosures, the Report and Order requires broadcasters subject to these disclosure requirements to keep copies of the disclosures in their Online Public Inspection File (OPIF). The disclosures must remain in a folder labeled “Foreign-Government Provided Programming Disclosures.” The information on file in the OPIF must include the actual disclosure, as well as the date and time they aired the broadcast. If the broadcast aired multiple times, broadcasters must add each additional date and time to the OPIF. Broadcasters must update their OPIFs at least quarterly and there is a two-year retention period for disclosures related to the Report and Order.
The FCC’s new rules are likely the result of congressional pressure on the FCC to act in this area and they reflect the U.S. government’s increasing scrutiny of foreign government efforts to influence the American public. Similarly, the Department of Justice has sought to more aggressively enforce FARA’s registration and disclosure requirements for foreign media companies and U.S. companies that broadcast or disseminate information in the United States on behalf of foreign governments. This is evidenced by the DOJ FARA Unit’s issuance of several determination letters over the past three years requiring FARA registration of certain foreign media entities, including CGTN America, RIA Global, RM Broadcasting, and Xinhua News. In this way, the Report and Order adds to the complexity of an already crowded regulatory field related to foreign influence, adding detailed disclosure requirements that overlap but are not identical to analogous requirements in FARA. Critically, it also places a significant and ongoing diligence demand on broadcasters.