Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
October 13, 2006
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
Marc E. Elias, Esq.
Ezra W. Reese, Esq.
Perkins Coie LLP
607 Fourteenth Street, N.W.
Washington, D.C. 20005
RE: AOR 2006-31
Dear Mr. Elias and Mr. Reese:
This letter responds to your letter received on
September 19, 2006, requesting an advisory opinion on behalf
of the Bob Casey for Pennsylvania Committee.
On October 11, 2006, the Commission released for public
comment two alternative draft advisory opinions (Drafts A
and B) responding to your request. For your convenience, we
have enclosed copies of the two drafts. The Commission was
unable to approve either of these drafts by the required
affirmative vote of four members. See
2 U.S.C. 437c(c) and 437d(a)(7).
Accordingly, pursuant to Commission regulations at 11
CFR 112.4(a), you are hereby advised that with this letter
the Commission has concluded its consideration of Advisory
Opinion Request 2006-31.
Sincerely,
(signed)
Ellen L. Weintraub
Commissioner
Enclosure
STATEMENT
OF
CHAIRMAN MICHAEL E. TONER AND COMMISSIONERS
HANS A. von SPAKOVSKY AND DAVID MASON
ON
ADVISORY OPINION REQUEST 2006-31
On September 19, 2006, the Federal Election Commission
("Commission") received a request from the Bob Casey for
Pennsylvania Committee ("Casey Committee") for an advisory
opinion on the issue of whether a broadcast station makes a
prohibited in-kind contribution under the Federal Election
Campaign Act of 1971 ("FECA") if the station provides, and
the political committee accepts, the lowest unit charge
("LUC") for advertising airtime when the political committee
is not "entitled" to the LUC under the Communications Act of
1934.1 Two alternative drafts were made available to the
public for comment on October 11.2 We supported Draft A
which properly applied FECA and Commission regulations and
afforded the appropriate deference to the Federal
Communications Commission ("FCC") to interpret and enforce
the Communications Act. On October 13, the Commission
issued a letter to the Casey Committee informing it that the
Commission was unable to respond to the request because
there were not four votes to approve either draft.
The Commission's statutory jurisdiction does not extend
to the Communications Act. The FCC, which does have
jurisdiction over the Communications Act, has taken the
position that broadcast stations may offer the LUC on a non-
discriminatory basis to all candidates, regardless of
whether a political committee is "entitled" to the LUC under
the Communications Act. In this context, as long as a
broadcast station offers the LUC to all Federal candidates
on an equal, nondiscriminatory basis, the LUC constitutes a
discount offered in the ordinary course of business and is
not an in-kind contribution to a political committee.
Providing the LUC in this manner does not violate FECA.
I. BACKGROUND
A. Facts
The facts of this matter are based on the Casey
Committee's letter to the Commission of September 19, 2006,3
requesting an advisory opinion, as supplemented by its
emails of September 20, 2006.
The Casey Committee is the authorized committee of Bob
Casey, a candidate for election to the United States Senate
from the Commonwealth of Pennsylvania. Mr. Casey's opponent
in the general election is incumbent Senator Rick Santorum.
KDKA Television has informed both federal candidates
that it is prepared to offer them the LUC for their
political television advertisements regardless of whether
the disclaimers in the advertisement meet the requirements
of the Bipartisan Campaign Reform Act, Pub. L. No. 107-155,
116 Stat. 81 (March 27, 2002) ("BCRA"). The Communications
Act of 1934 generally requires broadcasters to provide
candidates the LUC for a candidate's political
advertisements in the 45 days preceding a primary election
and the 60 days preceding a general election. See 47 U.S.C.
315(b)(1)(A). However, BCRA amended the Communications
Act, 47 U.S.C. 315(b), to provide that a Federal candidate
"shall not be entitled to receive" the LUC if any of the
candidate's television advertisements makes a "direct
reference" to the candidate's opponent and fails to contain
a "clearly readable printed statement [] identifying the
candidate and stating that the candidate has approved the
broadcast and that the candidate's authorized committee paid
for the broadcast." Additionally, this statement must be
accompanied by a "clearly identifiable photographic or
similar image of the candidate," and appear "at the end of
[the] broadcast" for at least 4 seconds. BCRA sec. 305, 116
Stat. at 101, codified at 47 U.S.C. 315(b)(2)(C).
On September 20, KDKA amended its Political Disclosure
Statement, which sets forth the station's policies regarding
the sale of time to candidates for public office, to provide
as follows: "It is not presently clear whether a station
may, as a matter of its own discretion, continue to afford
the lowest unit charge to a candidate who has caused the
broadcast of an ad that does not comply with the above
disclaimer requirements [i.e., does not contain a proper
disclaimer statement under Section 315 of the Communications
Act]. Pending further guidance from the Federal Election
Commission or the Federal Communications Commission, the
Station will continue to afford the lowest unit rate to
candidates in these circumstances." See Amendment to
Political Disclosure Statement of KDKA, included in Advisory
Opinion Request of Bob Casey for Pennsylvania Committee.
The FCC has jurisdiction over the Communications Act,
but has not yet promulgated regulations implementing the
BCRA amendments to the Communications Act. Informal
conversations between Commission staff members and FCC staff
members confirm, however, that the FCC staff interprets the
BCRA amendments to the Communications Act to allow a
television station to offer the LUC to a candidate whose
advertisements do not contain the proper Communications Act
Statement, as long as the station treats all Federal
candidates in a consistent, non-discriminatory manner.4 The
Casey Committee informed the Commission that FCC staff
members have further confirmed this interpretation in
informal conversations with KDKA and other television
stations. The FCC has not made a formal determination as to
whether any of the advertisements at issue contain a proper
Communications Act Statement.
B. Lowest Unit Charge
While the Commission lacks authority to implement or
enforce the LUC provisions of the Communications Act, it is
important to understand what the LUC is and how a broadcast
station calculates it when considering how it interacts with
FECA's corporate contribution prohibition.
The Communications Act requires broadcasters selling
time to candidates during specified periods before elections
to charge them the station's "lowest unit charge" for the
same classification of advertising. See 47 U.S.C.
315(b)(1)(A) (charges may not exceed "during the forty-five
days preceding the date of a primary or primary runoff
election and during the sixty days preceding the date of a
general or special election in which such person is a
candidate, the lowest unit charge of the station for the
same class and amount of time for the same period")
(emphasis added).5 In other words, "[a] candidate shall be
charged no more per unit than the station charges its most
favored commercial advertisers for the same classes and
amounts of time for the same periods." 47 CFR
73.1942(a)(1)(i).6 "By adopting the lowest unit charge
requirement, Congress intended to place candidates on a par
with a broadcast station's most-favored advertiser."7 "The
lowest unit charge rule was intended to prevent broadcasters
from exercising their market power to extract additional
profits from candidates and to maintain the availability of
the broadcast forum."8
The "[l]owest unit charge may be calculated on a weekly
basis with respect to time that is sold on a weekly basis,
such as rotations through particular programs or dayparts.
Stations electing to calculate the lowest unit charge by
such a method must include in that calculation all rates for
all announcements scheduled in the rotation, including
announcements aired under long-term advertising contracts.
Stations may implement rate increases during election
periods only to the extent that such increases constitute
`ordinary business practices,' such as seasonal program
changes or changes in audience ratings." 47 CFR
73.1942(a)(1)(viii).
II. QUESTION PRESENTED
Would the Casey Committee receive a prohibited in-kind
contribution if an incorporated television station charged
Mr. Casey the LUC for advertising time when Mr. Casey is not
"entitled" to the LUC under the Communications Act?9
III. LEGAL ANALYSIS AND CONCLUSIONS
No, the Casey Committee would not receive a prohibited
in-kind contribution if an incorporated television station
charged Mr. Casey the LUC for advertising time for its
proposed advertisements. As long as the television station
offers the LUC to all Federal candidates, the LUC is a
permissible discount offered in the ordinary course of
business, and not an in-kind contribution under FECA.
The Commission does not have any jurisdiction over the
Communications Act and the question of whether or not a
disclaimer in an advertisement meets its requirements. The
Commission only has jurisdiction over whether a disclaimer
in an advertisement meets the requirements of the FECA.
Because the Commission does not have the authority to
determine whether a disclaimer meets the requirements of the
Communications Act, the Commission cannot determine if any
given ad is or is not "entitled" to the LUC. Furthermore,
the Commission does not have the jurisdiction to determine
the consequences of non-entitlement under the Communications
Act, particularly the continued availability of the LUC.
However, for the purposes of this matter, we assume that the
ads in question do not meet the disclaimer requirements of
the Communications Act and thus are not guaranteed, or
"entitled" to, the LUC.
Under FECA, a corporation makes a prohibited in-kind
contribution to a political committee when it offers that
committee a discount outside of its normal course of
business. In these circumstances, the difference between
the usual and normal, fair market price and the discounted
price paid is an in-kind contribution. See 11 CFR
100.52(d)(1). FECA prohibits corporations from making any
contributions or expenditures in connection with a Federal
election. See 2 U.S.C. 441b(a). The Act and Commission
regulations define the terms "contribution" and
"expenditure" to include any gift of money or anything of
value for the purpose of influencing a Federal election.
See 2 U.S.C. 431(8)(A)(i) and 431(9)(A)(i); 11 CFR 100.52(a)
and 100.111(a); see also 2 U.S.C. 441b(b)(2) and 11 CFR
114.1(a)(1) (providing a similar definition for
"contribution and expenditure" with respect to corporate
activity). "Anything of value" is defined to include all in-
kind contributions and, unless specifically exempted under
11 CFR 100.71(a), the provision of any goods or services
(including advertising services) without charge, or at a
charge that is less than the usual and normal charge for
such goods or services, is an in-kind contribution. See 11
CFR 100.52(d)(1); 11 CFR 100.111(e)(1).
The Commission has held that discount prices that are
less than the usual and normal charge are not contributions
if such discounts are offered in the ordinary course of
business. See, e.g., Advisory Opinions 2004-18 (Friends of
Joe Lieberman), 1996-2 (CompuServe), and 1989-14 (Anthony's
Pier 4 Restaurant). Since the LUC is a statutorily-
guaranteed discount that must be provided to all candidates
whose advertisements satisfy Section 315 of the
Communications Act, it is by definition a discount offered
in the ordinary course of business to candidates.
Additionally, because the LUC itself is based on the rates
available to certain commercial advertisers, and it is being
offered on a nondiscriminatory basis to all federal
candidates, it is also by definition a rate provided to
other customers in the ordinary course of business.
Accordingly, the provision of the LUC to the Casey
Committee would not result in a prohibited in-kind
contribution, regardless of whether the Casey Committee's
advertisements comply with Section 315 of the Communications
Act Statement, so long as the television station provides
the LUC to all Federal candidates. When the LUC is provided
to all candidates on an equal basis, it is necessarily the
usual and normal charge provided to candidates in the
ordinary course of business.
In comments received in response to Drafts A and B, the
National Association of Broadcasters, the North Carolina
Association of Broadcasters, the Ohio Association of
Broadcasters, the Virginia Association of Broadcasters, the
Arizona Broadcasters Association, the California
Broadcasters Association, the Illinois Broadcasters
Association, the Louisiana Broadcasters Association, the
Michigan Broadcasters Association, the New Jersey
Broadcasters Association, the Oregon Association of
Broadcasters, and the Washington State Association of
Broadcasters all urged the Commission to adopt Draft A. As
one group of these commenters noted, broadcasters "find
themselves as the political football in an often vicious
game played by political candidates."10
The broadcast association commenters support the FCC's
interpretation of Section 315 and agree that section permits
broadcasters to "voluntarily charg[e] the LUC to any
candidate who has lost his entitlement to the LUC" (emphasis
in original). Furthermore, "[u]nlike other corporate
contributors, FCC licensees have an independent statutory
obligation to treat all candidates alike with respect to
what otherwise might be deemed in-kind contributions.
Congress recognized that furnishing discounts for campaign
advertisements would be consistent with a broadcast
station's obligation to operate in the public interest and,
therefore, would not constitute in-kind contributions.
Consequently, the only restriction on broadcaster discounts
in the Communications Act is that they must be furnished to
all candidates for the same office."
IV. CONCLUSION
It is unfortunate for the regulated community and the
many broadcasters who submitted comments to the Commission
that we were unable to provide a response to the Advisory
Opinion Request due to the split in opinion among the
Commissioners on an issue that to us seems very clear. The
FCC has already informally advised both the Requestor and
the Commission that the Communications Act is not violated
when a broadcaster provides the LUC to Federal candidates on
an equal, nondiscriminatory basis. Our colleagues'
approach, as reflected in Draft B, relies on a different
interpretation of the Communications Act. This
interpretation, however, is beyond the Commission's
jurisdiction to make. The regulated community can take
comfort in the fact that three Commissioners interpret
FECA's requirements consistently with the conclusion reached
by the FCC. In light of the foregoing, we are confident
that a broadcaster or political committee that adheres to
this approach will not be subject to liability under FECA.
October 24, 2006
________(signed)_______________
Michael E. Toner
Chairman
________(signed)________________
David M. Mason
Commissioner
________(signed)_________________
Hans A. von Spakovsky
Commissioner
Advisory Opinion 2006-31
Statement for the Record
Vice Chairman Robert D. Lenhard
Commissioner Steven T. Walther
Commissioner Ellen L. Weintraub
The Bob Casey for Pennsylvania Committee (the "Casey
Committee"), the authorized committee of Bob Casey, a
candidate for election to the United States Senate from the
Commonwealth of Pennsylvania, requested an Advisory Opinion
addressing whether it would be a prohibited in-kind
corporate contribution under the Federal Election Campaign
Act ("FECA") for a television station to sell advertising
time to the Casey Committee at the Lowest Unit Charge
("LUC"),11 if the Casey Committee was not "entitled" to
receive the LUC under section 315 of the Communications Act,
47 U.S.C. 315(b).
Following the Commission's longstanding precedent for
analyzing discounts offered to Federal candidates, we
concluded that providing the LUC to the Casey Committee in
these circumstances would be a prohibited in-kind corporate
contribution, unless the LUC was provided to the Casey
Committee as a discount offered in the ordinary course of
the television station's business on the same terms and
conditions offered to the station's non-candidate customers.
If the LUC was provided as a discount in the ordinary course
of business, the LUC would not be an in-kind contribution,
even in an instance in which a committee such as the Casey
Committee was not "entitled" to the LUC under the
Communications Act. Unfortunately, we were unable to obtain
the support of a fourth Commissioner for our opinion, and
consequently the Commission was unable to approve an
Advisory Opinion by the required affirmative vote of four
members.
Background
The Communications Act generally requires broadcasters
to provide candidates the LUC in the 45 days preceding a
primary election and the 60 days preceding a general
election. 47 U.S.C. 315(b). The Bipartisan Campaign Reform
Act ("BCRA") amended the Communications Act to provide that
a Federal candidate "shall not be entitled" to the LUC if
any of the candidate's advertisements makes a direct
reference to the candidate's opponent, but fails to contain
a statement both identifying the candidate and stating that
the candidate has approved the communication (the
"Communications Act Statement"). See 47 U.S.C. 315(b).
KDKA Television, an incorporated television station,
informed both the Casey Committee and the authorized
committee of Casey's opponent that it would make the LUC
available for advertisements run by either candidate,
regardless of whether the advertisements included the
required Communications Act Statement. Several other
incorporated television stations also assured the Casey
Committee that they, too, would make the LUC available to
the Casey Committee regardless of whether the advertisements
included the proper Communications Act Statement.
The Casey Committee asked the Commission for its
opinion as to whether the Casey Committee could accept the
offers it received from KDKA and other television stations
to provide airtime at the LUC, regardless of whether the
advertisements included the proper Communications Act
Statement. The Casey Committee represented in its Advisory
Opinion request that it would like to produce and broadcast
advertisements that would satisfy the disclaimer
requirements of FECA, see 2 U.S.C. 441d(d)(1)(b), but not
contain the required Communications Act Statement.
The Federal Communications Commission ("FCC") has
jurisdiction over the Communications Act, but has not yet
promulgated regulations implementing the BCRA amendments to
the Communications Act and has not made a formal
determination as to whether any of the advertisements
proposed by the Casey Committee would or would not contain
the proper Communications Act Statement. The FCC's
determination of whether a station may provide the LUC to a
candidate not entitled to it under the FCC's access and non-
discriminatory rules is, of course, separate and distinct
from the Commission's determination of whether providing the
LUC to a candidate not entitled to it is an in-kind
contribution under FECA.
Legal Analysis and Conclusions
Following the Commission's longstanding precedent for
analyzing discounts offered to Federal candidates, it is our
opinion that providing the LUC to the Casey Committee in
these circumstances would be a prohibited in-kind corporate
contribution, unless the LUC was provided to the Casey
Committee as a discount offered in the ordinary course of
the television station's business on the same terms and
conditions offered to the station's non-candidate customers.
First, we must note that the Commission does not have
jurisdiction over the Communications Act and whether or not
a disclaimer meets it requirements. The Commission has
jurisdiction over both the issue of whether a disclaimer
meets the requirements of FECA and whether a corporation has
provided an in-kind contribution by providing the LUC to a
candidate not "entitled" to receive it. However, for the
purposes of this Advisory Opinion, the Casey Committee
represented that the ads in question would not meet the
disclaimer requirements of the Communications Act and thus
would not be "entitled" to the LUC.
Under Commission regulations, a corporation makes a
prohibited in-kind contribution to a political committee
when it offers that committee a discount outside of its
ordinary course of business. 11 CFR 100.52(d)(1). FECA
prohibits corporations from making any contributions or
expenditures in connection with a Federal election. See 2
U.S.C. 441b(a). FECA and Commission regulations define the
terms "contribution" and "expenditure" to include any gift
of money or anything of value for the purpose of influencing
a Federal election. See 2 U.S.C. 431(8)(A)(i) and
431(9)(A)(i); 11 CFR 100.52(a) and 100.111(a); see also 2
U.S.C. 441b(b)(2) and 11 CFR 114.1(a)(1) (providing a
similar definition for "contribution and expenditure" with
respect to corporate activity). Commission regulations
further define "anything of value" to include all in-kind
contributions and state that, unless specifically exempted
under 11 CFR 100.71(a), the provision of any goods or
services (including advertising services) without charge, or
at a charge that is less than the usual and normal charge
for such goods or services, is a contribution. See 11 CFR
100.52(d)(1); see also 11 CFR 100.111(e)(1).
If a broadcaster provides the LUC to a Federal
candidate who is not legally entitled to receive it, the
broadcaster's sale price would constitute a discount. The
Commission has held, however, that "the purchase of goods or
services at a discount does not result in a contribution
when the discounted items are made available in the ordinary
course of business and on the same terms and conditions to
the vendor's other customers that are not political
committees." Advisory Opinion 2004-18 (Friends of Joe
Lieberman) (emphasis added). The Commission has
consistently analyzed discounts in this manner. In Advisory
Opinion 1996-02 (CompuServe) the Commission stated that:
"The Commission has permitted a number of the proposed
transactions on the basis that the discount or rebate
is made available in the ordinary course of business,
and on the same terms and conditions (e.g., business
volume), to the company's other customers that are not
political committees or organizations. Such
transactions have included a publisher's sale of books
to the author's principal campaign committee at a `bulk
rate' purchase price, subject to certain conditions,
where such a rate is a standard price available for
large purchasers who agree to those conditions; a
bank's grant of fee waivers on loans to candidates
where it has provided waivers, based on similar
business considerations (e.g., estimated profitability
of an account), to commercial customers; the offer of
catering and reception services to political committees
at a reduced rate available on equal terms to other
customers; and the offer by a hotel corporation of
discount or complimentary rooms and other amenities to
campaigns that reserve a certain number of rooms at the
appropriate rate where the same offer is made to other
customers satisfying the same conditions." (emphasis
added).
- Citing Advisory Opinions 1995-47 (Representative
Underwood), 1994-10 (Franklin National Bank), 1989-14
(Anthony's Pier 4 Restaurant), and 1987-24 (Hyatt Corp.).
See also Advisory Opinions 1978-45 (Representative Coleman),
1982-30 (Sunrise-Sunset Corporation), 1985-28 (Friends of
Lane Evans), 1986-22 (WREX-TV), 1988-25 (General Motors
Corp.), 1995-46 (Friends of Senator D'Amato), 2001-08
(Senator Specter).
Despite the Commission's broad and consistent use of
this approach, our colleagues found it inapplicable to a
Federal candidate's purchase of television advertising. The
draft they supported argued that by creating a special
discount to which only Federal candidates are eligible, the
BCRA amendments to the Communications Act established
Federal candidates as a separate class of television
advertising customers. Draft A at fn. 5. Accordingly, they
found the inquiry of whether similarly situated non-
candidate customers would have received the LUC irrelevant
to the determination of whether a Federal candidate could
receive the LUC. Under their analysis, if a station chose
to provide the LUC to all Federal candidates regardless of a
disclaimer, the LUC could be permissibly provided to any
Federal candidate, disclaimer or not, and regardless of
whether the LUC would be provided to non-candidate
customers.
If our colleagues' interpretation is correct, then the
practical effect of BCRA's passage was explicitly to entitle
the LUC to Federal candidates that include a disclaimer, and
implicitly to entitle the LUC to Federal candidates that do
not. In our opinion, this result is contrary to the plain
language of the BCRA amendments to the Communications Act.
The statute provides, "In the case of a candidate for
Federal office, such candidate shall not be entitled to
receive the [LUC] for the use of any broadcasting station .
unless such reference [contains the Communications Act
Statement]." 47 U.S.C. 315(b)(2)(A) (emphasis added).
Moreover, this interpretation is contrary to the intent of
the amendments, as expressed by their co-sponsors, Senators
Wyden and Collins. In introducing the provision, Senator
Wyden stated, "It says, if you want that lowest unit rate
provided for in this law that we are guaranteeing to you,
then you must put your name and your face at the end of this
ad for a few seconds so people know who is paying for this
ad. . It is a very reasonable kind of requirement in
exchange for that lowest unit rate." Cong. Rec. S2694
(daily ed. March 22, 2001). He further stated, "This is a
proposal that makes it clear that to get that lowest unit
rate, you have to be held personally accountable." Id. at
S2697. Senator Collins, the provision's co-sponsor, stated,
"Under our proposal, the candidate's picture would appear at
the end of the ad and the candidate would have to have a
statement saying he or she approved the ad in order to get
the lowest broadcast rate." Id. at S2695.
In accord with the Commission's longstanding precedent,
and the plain language and legislative history of the BCRA
amendments to the Communications Act, we concluded that
providing the LUC to the Casey Committee would result in a
prohibited in-kind corporate contribution, unless the LUC
was otherwise provided as a discount offered to all
similarly situated advertisers that are not authorized
committees of Federal candidates (i.e., the discount is
ordinarily offered to any customer purchasing the same type
and volume of advertising as the Federal candidate). If
provided to all similarly situated advertisers that are not
Federal candidates, the LUC would not be an in-kind
contribution to the Casey Committee, regardless of whether
the Casey Committee has complied with Section 315 of the
Communications Act.12
The Commission received several comments from
broadcasters stating that this construction of the
Communications Act could place stations in the difficult
position of evaluating whether a certain advertisement did
or did not contain a proper Communications Act disclaimer.
These commenters stated that stations would likely be forced
to make these determinations in response to complaints
received in the limited time period immediately before
elections. We are sympathetic to these commenters'
concerns, and note that under Section 315 of the
Communications Act, a candidate or candidate committee must
provide a certification at the time of purchase stating
whether an advertisement requiring a disclaimer under
Section 315 contains a proper disclaimer. See 47 U.S.C.
315 (b)(2)(A); (E). A television station provided with
the proper certification would ordinarily provide the
candidate or candidate committee with the LUC under Section
315 of the Communications Act. Accordingly, provided the
station received a proper certification from the candidate,
we would have considered the LUC a discount offered to the
candidate pursuant to Section 315, and therefore, not an
impermissible in-kind corporate contribution by the station,
regardless of whether the disclaimer was or was not in fact
sufficient under the Communications Act. Under this
construction, however, the certification would not have
shielded the candidate or candidate committee from any
resulting FECA liability for receiving an impermissible in-
kind corporate contribution, or for failing to include a
proper FECA disclaimer in an advertisement. See, e.g., 2
U.S.C. 441d(d)(1)(b); 11 CFR 110.11(c)(3). This
determination would not have altered a television station,
candidate, or candidate committee's obligations under any
law or regulation outside of the Commission's jurisdiction.
We believe this construction would have sufficiently
addressed the commenters' concerns, while preserving the
Commission's ability to regulate impermissible in-kind
corporate contributions under FECA. Unfortunately, no
fourth Commissioner agreed.
____(signed)__________________
___10/25/06___
Robert D. Lenhard Date
Vice Chairman
_____(signed)__________________
___10/25/06_____
Steven T. Walther Date
Commissioner
_____(signed)__________________
___10/25/06______
Ellen L. Weintraub Date
Commissioner
_______________________________
1 The Commission faced this same question in Advisory
Opinion 2004-43 (Missouri Broadcasters Association), but
failed to reach a definitive result.
2 Available at http://www.fec.gov/aos/2006/aor2006-
31draft.pdf.
3 Available at http://www.fec.gov/aos/2006/aor2006-31.pdf.
4 It is not our intention to interpret the FCC's statute,
but we understand the FCC's informal advice to indicate that
the FCC has come to the same conclusion as Vice Chairman
Toner and Commissioner Smith in Advisory Opinion 2004-43
(Missouri Broadcasters Association), that the statutory
language in Section 315, "shall not be entitled to receive,"
is permissive, meaning broadcasters have the discretion to
provide the LUC to candidates who fail to include a proper
disclaimer statement, but are not legally required to
provide those candidates with the LUC under such
circumstances. This position was articulated by Justice
Stevens, who observed that BCRA "does not require broadcast
stations to charge a candidate higher rates for unsigned ads
that mention the candidate's opponent. Rather, the
provision simply permits stations to charge their normal
rates for such ads." McConnell v. FEC, 540 U.S. 93, 364
(2003)(Stevens, J., dissenting) (emphasis in original).
(Justice Stevens, Ginsburg, and Breyer would have upheld the
BCRA provisions now codified at Section 315 of the
Communications Act. The Court majority, however, dismissed
a challenge to those provisions on standing grounds.)
5 Recognized classes of time that broadcasters may employ
when determining the LUC are "non-preemptible, preemptible
with notice, immediately pre-emptible and run-of-schedule."
47 CFR 73.1942(a)(1)(ii). Additionally, "stations may
establish and define their own reasonable classes" within
these recognized classes, so long as these subclasses are
fully disclosed. 47 CFR 73.1942(a)(1)(iii) - (v). A
station may not, however, "establish a separate, premium-
period class of time sold only to candidates." 47 CFR
73.1942(a)(1)(vi). See Codification of the Commission's
Political Programming Policies, 7 FCC Rcd. 678, 690-692
(Dec. 12, 1991). "Amount of time" refers to the length of
time sold, such as 30 or 60 seconds. The term "period" (or
"daypart") refers to the time of day that an advertisement
is aired, such as prime time, late night, or drive time.
See also National Association of Broadcasters, Political
Broadcasting Catechism 16th ed. 33-45 (2004); The Campaign
Legal Center, The Campaign Media Guide 16-21 (2004)
available at
http://www.campaignlegalcenter.org/attachments/1121.pdf.
6 See also Reed E. Hundt, The Public's Airwaves: What Does
the Public Interest Require of Television Broadcasters?, 45
Duke L. J. 1089, 1103 n.53 ("The Lowest Unit Charge Rule is
intended to make available to the candidate who buys only
one or a few spots the same rate paid by the broadcaster's
best commercial customer, who buys in bulk.").
7 Codification of the Commission's Political Programming
Policies, 7 FCC Rcd. 678, 688 (Dec. 12, 1991).
8 Paul B. Matey, Abundant Media, Viewer Scarcity: A
Marketplace Alternative to First Amendment Broadcast Rights
and the Regulation of Televised Presidential Debates, 36
Ind. L. Rev. 101, 116 (2003).
9 Because the Commission's statutory jurisdiction does not
extend to the Communications Act, the Commission cannot
determine whether the proposed advertisements would comply
with section 315 of the Communications Act. However, this
Statement assumes that the proposed advertisements are not
entitled to the LUC, based on the requestor's assertion that
"none [of the advertisements] will meet the additional
requirements of 47 U.S.C. 315(b)(2)(C)." We reiterate,
however, that the FCC could find that the proposed
advertisements fully satisfy the requirements of the
Communications Act. Therefore, we take no position on the
merits of the Casey Committee's stipulation.
10 Broadcast stations cannot avoid this dilemma altogether.
While Section 315 does not require broadcasters to sell
advertising time to candidates for purposes of "equal
opportunities" and the LUC, under Section 312(a)(7) of the
Communications Act, the FCC may revoke a station's license
"for willful or repeated failure to allow reasonable access
to or to permit purchase of reasonable amounts of time fro
the use of a broadcasting station . . . by a legally
qualified candidate for Federal elective office on behalf of
his candidacy."
11 The LUC is the lowest advertising rate that a station
charges other advertisers for the same class and amount of
time for the same period. See 47 U.S.C. 315(b)(1) and 47
CFR 73.1942(a)(1).
12 The situation presented here differed materially from that
presented in Advisory Opinion 2004-43 (Missouri Broadcasters
Association), in which the Commission concluded that a
broadcaster's decision to offer a Federal candidate the LUC
did not result in an in-kind contribution when there was no
evidence of a violation of the disclaimer requirements. In
the present situation, the Casey Committee stipulated that
its advertisements will, in fact, not contain the proper
Communications Act Statement, and the Commission had no
basis for second-guessing that stipulation.