The question of whether ads from political parties and joint fundraising committees, when authorized by federal candidates, receive Lowest Unit Charge (LUC) from broadcasters and local cable systems has been a contentious one since early in this election year. We wrote about the FCC Media Bureau’s March Public Notice “reminding” broadcasters that these ads were entitled to LUC, and how that March Public Notice took on greater significance when the Supreme Court ruled in June that federal candidates were not limited in coordinating their spending with their political parties. Until that ruling, there was a relatively insignificant amount of spending that could be coordinated between parties and candidates, limiting the ability of candidates to authorize such ads. After the confluence of these decisions, a number of Democratic candidates have been pursuing various legal angles to get review of that Media Bureau Public Notice that is seen as favoring Republicans as the Republican party organizations have significantly more money to spend in coordination with their candidates. The Democrats did convince the Fourth Circuit Court of Appeals to rule that only candidates were entitled to LUC (see our article here), only to see that decision stayed by the Supreme Court which found that the Fourth Circuit’s decision appeared to be premature, as the Fourth Circuit had intervened before the full Commission issued any ruling on the validity of the Media Bureau’s Public Notice.
The Democratic candidates did not give up – asking the Fourth Circuit to issue an order granting “mandamus” – forcing the Commission to do what it is required to do. The candidates asked the Fourth Circuit to order the FCC to decide on the candidate’s application for review filed in April seeking full Commission review of the Media Bureau Public Notice. The Democrats’ theory seemed to be that, if the full Commission ruled on the application for review, the Supreme Court’s stay would be moot as the Fourth Circuit could apply its ruling to the full Commission decision, rather than to the Bureau action. As we noted last week, the Fourth Circuit did issue that mandamus order, only to see it stayed again by the Supreme Court. While the Supreme Court’s initial stay was temporary while they considered the matter further, in a further order this week, the Supreme Court has made the stay permanent – holding that the Fourth Circuit cannot force the Commission to act precipitously, and that the Commission has the right to be deliberative in their consideration of the matter. That Supreme Court decision thus puts the review back into the FCC’s court – and likely ends any meaningful litigation on this issue until well after the November election. So, the Public Notice remains in effect for the rest of this election cycle – but it does not resolve this issue forever.
The Supreme Court in all of its stays has never addressed the merits of the case – whether parties and joint fundraising committees, as well as candidates, get LUC when their ads are “authorized” by a federal candidate. While that issue remains to be resolved in the courts, an even more fundamental issue has also been put before the FCC, one that may well end up once again before the Supreme Court: i.e., whether the entire concept of a Lowest Unit Charge forced on broadcasters is constitutional.
To this point, the litigation has focused on whether the Communications Act, when it says that a “candidate” is entitled to LUC really means just the candidate is entitled to LUC (or, whether by “authorizing” the ad, the candidate somehow makes that authorized ad his or her own). But one of the issues that has been lurking in the petition for reconsideration of the Public Notice filed by TVB (the television advertising bureau) and in its subsequent application for review of the denial of its petition for reconsideration, but which has not had much publicity, is whether compelling broadcasters to sell cheap advertising to political candidates (and likely by extension whether forcing stations to sell time to federal candidates in the first place) is consistent with the First Amendment. In comments filed in response to the FCC’s request for comment on the TVB petition, several public interest or advocacy groups have filed briefs challenging that constitutionality.
These groups argue (see, for instance, the comments here, here, and here) that the requirement that broadcasters sell time to political candidates forces broadcasters to air content with which they might have a fundamental disagreement and, more than that, to air that content at a discount. In effect, they are forcing broadcasters to subsidize content from candidates. This kind of restriction on the price paid for advertising time would never be allowed if it was placed on newspapers or online platforms because of their First Amendment rights to transmit what they want to transmit. Yet, for decades, such restrictions have been permitted on broadcasters, at least partially based on the belief that broadcasting is different as it uses the public’s airwaves (and that cable uses public rights of way to reach homes). But, as these days so much online content uses these same pathways to reach consumers, and these competitive media now dominate the advertising world and compete on at least an equal basis for audience, is there really any constitutional basis for subjecting broadcasters to these rules so foreign to any other media outlet in the United States?
This issue is before the Commission in comments filed on TVB’s application for review. While the current Commission has been very vocal about enforcing public interest obligations of broadcasters (including the political rules) based on the premise that broadcasters are different than other media as Congress has specifically imposed these public interest obligations on them, expect that this issue will be litigated beyond the FCC. Also, any challenge to LUC and other political obligations of broadcasters on constitutional grounds could have broader ramifications on other unique programming and operational restrictions put on broadcasters that do not apply to other media companies.
This Supreme Court has taken a very expansive view of First Amendment rights in recent years, so this issue may well be one that will be of interest to them. Don’t expect this to happen overnight, as the Commission will need to decide the issue, and any Commission decision will need to be appealed to the Court of Appeals before it is ripe for Supreme Court review. Thus, it is an issue that will play out over the next few years. But it is one that all broadcasters should be watching.