Election Ad Ruling: What's It Mean To TV?

What the Opinion Doesn't Do

1. Affect any broadcaster obligations to legally qualified candidates -- federal, state and local -- under the Communications Act and the FCC's political broadcast rules.

2. Explicitly, the opinion does not decide whether foreign-owned corporations, including subsidiaries doing business in the U.S. or owned by or affiliated with foreign governments, qualify for the liberalized spending to influence U.S. federal elections. Proposed legislation is already addressing this (see below).

3. Affect PACs and their regulation. 

4. Affect the bans on direct corporate/union contributions to candidate campaigns.

5. Affect disclaimer and disclosure requirements for any type of political ad other than the ones allowed now by the opinion. 

6. Address directly the impact of the ruling on state and local campaign spending laws, some of which parallel the provisions just struck down.

Montana, for instance, has had a corporate electioneering law since 1912, and 26 states joined in a brief seeking to uphold the now-voided federal law bans. All states are affected in that none can adopt new laws that are in conflict with the Supreme Court opinion. Repeal or modification of state law provisions will occur state by state, and there may be legal challenges to laws not repealed.

It is likely that the opinion invalidated state and local laws that are equivalent in language or intent to the voided federal law provisions. That would mean that a corporation or union could fund ads or other communications not coordinated with a candidate and support or oppose election of a candidate for state or local office in the ad. The dissenting opinion said that "the court unleashes the floodgates of corporate and union general treasury spending in these [state] races."

What Happens Next?

The FEC says it "is considering the impact of the opinion on its existing regulations, as well as its ongoing enforcement processes, and will be providing guidance to the public as soon as possible regarding what steps will be taken to comply fully with the opinion."

In states with early primaries, corporations and unions may start requesting ad time of stations soon. Some may have done so already.

As noted above, reaction to the opinion runs from high praise to high condemnation.

In his State of the Union address Wednesday night President Obama said, "I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities. And I urge Democrats and Republicans to pass a bill that helps correct some of these problems."   

Possible remedies could include, among others:

• New legislation banning corporate treasury expenditures by companies that receive government funds, collect most of their revenue abroad or hire lobbyists.

• Strengthening rules against coordination between campaigns and outside groups, such as prohibiting them from hiring the same advertising and consultant firms.

• Requiring shareholder approval of political ad expenditures, and/or requiring CEOs to appear in corporate ads financed by their companies, similar to the requirement for candidates.

• Adopting bans or limits on foreign corporate spending to influence U.S. elections. Sen. Al Franken (D-Minn) introduced a bill on Jan. 27. In the House, Rep. John Hall (D-N.Y.) introduced legislation that would ban political ads by corporations if more than 5% of their shareholders are foreign nationals.
  

Do's and Don'ts for Stations 

Stations should:

• Be alert to changes from the FEC, Congress and possibly other court decisions.

• Plan in advance for upcoming primaries and the general election. That includes accommodating opinion-generated ad buys while assuring enough available ad inventory to meet station obligations to candidates. Those haven't changed.

• Make sure that all public file obligations are met for various types of political ads, candidate and non-candidate.

Federal candidates continue to have a personal right of access to air time in connection with their campaigns. Candidates for state and local offices lack that right and stations must exercise reasonable judgment as to which, if any, of those races merit the sale of time. 

All opposing candidates, federal, state and local, have rights to equal opportunities when an opponent buys time, and all are entitled to lowest unit charge.

Note that the opinion may lead to increased ad demand particularly late in campaigns, when electioneering communications were prohibited. Also, the FCC's rule 73.1944(b) requires licensees to make their facilities available to federal candidates on the weekend before an election if the station has provided similar access to commercial advertisers during the year preceding the election period.  

Corporations and unions, in contrast, are not entitled to buy time at the lowest unit charge. To maximize revenue opportunity from the newly unrestricted groups, and meet candidate requirements in a year with many highly contested races, may require more advance planning than for prior campaign seasons.

Broadcasters, of course, still have the general obligation to operate in the public interest. Stations should assess what that means in the new campaign context on an ongoing basis. Good faith, reasonable licensee judgments about political time during election campaigns are usually deferred to by the FCC.