DC Circuit Rules Against FCC on Foreign-Sponsored Content
The U.S. Court of Appeals for the D.C. Circuit unanimously vacated the FCC’s requirement that broadcasters check federal databases to determine if entities leasing time on their stations are agents of foreign governments, said a seven-page opinion Tuesday. The court ruled against the agency because the language of the sponsorship ID statute limits the due diligence required of broadcasters to their employees and sponsors. “The FCC’s verification requirement ignores the limits that the statute places on broadcasters’ narrow duty of inquiry,” said the opinion from Judge Justin Walker. “That is not the law that Congress wrote.” “The FCC overreached,” said Multicultural Media, Telecom and Internet Council Senior Adviser David Honig. MMTC, NAB and the National Association of Black Owned Broadcasters were the petitioners in the case.
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“The principle that the public has a right to know the identity of those who solicit their support is a fundamental and long-standing tenet of broadcasting,” said Chairwoman Jessica Rosenworcel in a release. “It’s about transparency. Consumers deserve to trust that public airwaves aren’t being leased without their knowledge to private foreign actors.” Rep. Anna Eshoo, D-Calif., who repeatedly sought the foreign-sponsorship rules and was seen as an impetus for the FCC's action, didn't comment Tuesday.
The court’s decision leaves much of the FCC’s foreign-sponsorship rules in place, and broadcasters will still be required to disclose foreign sponsorship to viewers and keep records about programming lease agreements in their public file, numerous attorneys told us. Many broadcasters have been assembling such records and scrutinizing leases since the rules took effect for new agreements in March, said Joseph Chautin, broadcast attorney with Hardy Carey. Existing agreements would have had until September to be in compliance. Though NAB and several broadcast attorneys said the decision leaves disclosure rules in place, Rosenworcel in a tweet Tuesday described the court's decision as blocking the FCC from requiring foreign-sponsorship disclosures. "Transparency in broadcasting matters. That's why the FCC unanimously determined licensees must disclose when foreign governments or their representatives lease time on public airwaves. But a court halted this effort today so we'll look for new ways to address this going forward," she tweeted.
“Today’s decision ensures that the rules rightly continue requiring the handful of stations airing foreign government-sponsored programming to identify it as such, but removes the burden on the overwhelming majority of stations that never air foreign government-sponsored content,” said NAB President Curtis LeGeyt in a release praising the court decision. The FCC didn’t say whether it will appeal the decision, but numerous attorneys told us they don’t expect the agency to do so due to the narrow ruling and the unanimous decision. Honig said he would be “surprised” if the agency pursued an en banc appeal or petitioned the U.S. Supreme Court for certiorari.
The decision doesn’t prevent the FCC from acting against broadcasters that don’t disclose foreign sponsorship of leased programming, said University of Minnesota media law professor Christopher Terry. The agency still has authority under the sponsorship ID rules to go after broadcasters that aren’t disclosing their sponsors, he said.
The court’s decision was narrowly focused and isn’t likely to have much effect on other FCC rules, said Terry, who called the decision “Administrative Law 101.” The FCC “decreed a duty that the statute does not require and that the statute does not empower the FCC to impose,” said Walker in the opinion. The FCC argued it had authority to require the database searches based on reasonable expectations of what constitutes due diligence, and because of its general rulemaking authority. Walker and Senior Judge Raymond Randolph expressed skepticism about the FCC’s position, in oral argument in April (see 2204120059). In Tuesday's opinion, Walker said Congress set the limits of the sponsorship ID requirements in the statute by specifying employees and sponsors: “The FCC cannot alter Congress’s choice.”