On September 4, as we noted in our weekly update of regulatory activity of importance to broadcasters, the Supreme Court seemingly decided that Lowest Unit Rates for this year’s elections would be governed by the Media Bureau’s March Public Notice – the Public Notice announcing that ads from political parties and joint fundraising committees, when approved by a federal candidate, would get those rates. The Supreme Court stayed a decision of the 4th Circuit Court of Appeals that had found that ads from these groups did not get LUR, interpreting the law to say that those rates only applied to candidates themselves, not to other groups even if authorized by the candidate (see our article here about the 4th Circuit decision). As the Supreme Court decision was released on September 4, the first day of the LUR period for the November elections, many assumed that we heard the end of this dispute until the Supreme Court gets around to resolving the substantive issues, a decision unlikely to occur until sometime next year. But we were wrong, as there was a new flurry of activity this past week. Let’s look at the Supreme Court’s decision and the activity it triggered last week.
The Supreme Court’s decision never addressed the substance of the issue of whether ads from political parties and joint fundraising committees, when authorized by federal candidates, should get LUC. Instead, the decision stayed the 4th Circuit decision because the 4th Circuit had ruled on the issue before the full Commission had the opportunity to address challenges to the Media Bureau decision. As other courts have held that the Commission must first rule on a Bureau decision before a judicial appeal can be brought, the Supreme Court found that the 4th Circuit decision departed from the reasoning of those of other courts. That procedural conflict as to whether the controversy was ripe for court review had to first be resolved before the substance of the matter could be addressed. The Supreme Court decision thus stayed the effectiveness of the 4th Circuit decision until the Supreme Court can resolve this conflict. That resolution would determine whether the 4th Circuit had the power to review the substantive issues about LUC without the Commission having first ruled on challenges to the Media Bureau’s Public Notice.
The Democratic candidates that had brought the 4th Circuit appeal have now filed in the 4th Circuit for a “writ of mandamus” – asking the circuit court to order the full Commission to rule on their pending application for review seeking the Commission’s review of the Media Bureau’s Public Notice. Presumably, if the court ordered the Commission to resolve the application for review, and denied that application, the Democrats would then ask the 4th Circuit to reinstate its substantive decision, as the procedural issue that concerned the Supreme Court would have been mooted because the 4th Circuit would be ruling on a Commission decision, not that of the Media Bureau. The Democratic candidates noted that, before the 4th Circuit decision, an FCC brief filed with the Court admitted that the Commission had already drafted a decision that was planning to deny their application for review, so the candidates argue that it should be an easy matter for the Commission to simply release that already drafted decision.
More on the outcome of this mandamus request in a moment, as that was not the only action this past week. TVB, a group representing TV broadcasters on advertising matters, filed their own application for review seeking action of the full Commission on the Media Bureau decision denying TVB’s request that the Media Bureau reconsider or clarify its March Public Notice. TVB had raised some of the questions that we have raised here – like whether the reasonable access and no censorship provisions of the Communications Act apply to these “authorized” party and joint fundraising committee ads, and even more fundamentally asking if the entire LUR process is constitutional. Does LUR abridge broadcasters’ First Amendment rights by making them sell ads to candidates at low rates, and is that price setting some form of improper confiscation of the broadcaster’s property (i.e., their advertising inventory)?
Faced with two applications for review, surprisingly, the Commission through its Media Bureau last week decided to take its own action – issuing a Public Notice asking for public comment on the issues raised in the candidates’ application for review (though the Public Notice did not specifically ask for comments on the TVB application for review, it did ask for comments on all issues raised by the Media Bureau Public Notice which would, presumably, allow for the issues raised by TVB to be discussed). The Public Notice says that, as both Commissioner Gomez and the 4th Circuit noted that the Media Bureau Public Notice had been issued without first receiving any public comment, and as no comments had been sought on the candidates’ application for review, it was now appropriate to ask for that public comment. Interested parties have until September 25 to file such comments. Replies to those comments are due by September 30.
Where does that leave these issues? As the Commission has requested comment on the issues raised in the candidates’ Application for Review, it would appear that there will be no Commission decision on these issues until all the comments are received and analyzed. The Commission opposed the Mandamus request – mostly arguing that that request should have been filed before the appeal to the Court, but also noting that the Commission was now considering the applications for review, and that it had sought public input on its consideration – signaling to the Court that there was no reason to force the Commission to do anything until the comments are filed and fully considered in a decision on the applications for review.
The 4th Circuit at least partially agreed with the Commission, issuing an Order on Friday, putting the mandamus petition on hold until at least October 1, the day after public comments on the issues are filed. We think it unlikely that circumstances will have changed by October 1, as the Commission is unlikely to rule on anything the day after public comments are filed. The 4th Circuit decision on the mandamus request was by a 2-1 vote of the court, with the dissenting judge (who also dissented on the original 4th Circuit decision overturning the Media Bureau Public Notice) raising that same point – that it was likely nothing would change by October 1 as the Commission needed time to consider the public comments. That dissenting judge would have denied the mandamus petition outright as he did not see any reason to order the FCC to consider the issues in the application for review when it was already doing so. He also expressed concerns about the chaos that could be caused in the political advertising marketplace were the treatment of these “authorized” ads changed in the middle of the LUC window before the November election.
All of this action thus leads back to where we started – with the expectation that nothing will change until after the election. The Media Bureau’s March Public Notice remains in effect, signaling the Commission’s current interpretation as to who is entitled to lowest unit rates. A broadcaster unwilling to risk being penalized by the FCC for not following this interpretation will thus give ads purchased by political parties and by joint fundraising committees lowest unit rates when those ads are authorized by a federal candidate. But, with all these actions working their way through the system, we probably have not heard the last of this controversy, so stay tuned.