Section III

A. Current State of Play

More than a decade ago, the Supreme Court in the Citizens United decision held that labor unions and corporations (including trade associations, tax-exempt organizations, and LLCs and other business entities) can make unlimited “independent expenditures” at any point in an election cycle to advocate for the election or defeat of a federal candidate. (Note that the Court’s decision rendered invalid the portion of Ohio’s Electioneering Communications statute (O.R.C. § 3517.1011) that prohibits any person or entity from making a broadcast, cable, or satellite communication that refers to a clearly identified candidate during the 30 days preceding a primary or general election if the communication is financed in whole or in part by contributions received from a corporation or labor organization.)

Since the Citizens United decision, many corporations and unions have chosen to make contributions to third-party organizations that, in turn, purchase broadcast or Internet advertisements supporting or opposing federal, state, and local candidates. The most popular of these “independent expenditure” organizations (i.e., the organizations receiving the independent expenditures from unions and corporations and then spending them) are known as “SuperPACs” or “IE Committees.” In addition, many trade associations and certain Section 501(c)(4) tax-exempt organizations also receive significant, unlimited independent expenditure contributions for use in federal and state elections from corporations and unions.

It is important to remember that although these independent, third-party organizations may purchase advertisements that expressly advocate for the election or defeat of a candidate — and that such ads often “look like” candidate ads — such advertisements are not treated as candidate ads under the political broadcasting rules for purposes of the “lowest unit charge” requirement, the reasonable access rule, and the no-censorship provision. However, these third-party advertisements remain subject to the FCC’s sponsorship identification and record retention rules applicable to all candidate and issue advertisements (which are discussed immediately below) and may — depending on their content — trigger “equal opportunities” requirements. And perhaps most importantly, stations are not immune from liability for the content of such third-party advertisements. Given that third parties are now permitted to expressly support or oppose a candidate in broadcast and Internet advertisements, the content of these advertisements can be aggressive, increasing the likelihood that their content could result in a defamation claim against a station.

In light of the evolving, fact-specific issues that may arise when third-party advertisements expressly advocate for the election or defeat of a candidate, stations should consult with FCC counsel to resolve any specific questions or concerns regarding these advertisements.

B. Issue Advertising Generally

“Issue advertising” is advertising that concerns any “controversial issue(s) of public importance” and, generally, is purchased by third parties — i.e., someone other than a candidate or his or her campaign committee.

An issue advertisement may refer to political candidates or elections, as such subjects are generally “controversial issues of public importance.” As described above, because SuperPACs, trade associations, tax-exempt organizations, and other groups funded by corporations or unions can purchase advertisements to support or oppose a legally qualified candidate or otherwise address matters relating to an election, many third party “issue” advertisements expressly support or oppose a candidate.

At the same time, a significant amount of issue advertising does not involve or reference political candidates, elections, or ballot issues. An issue qualifies as a “controversial issue of public importance” if resolution of the issue will have a significant impact on the community and if substantial elements of the community are engaged in vigorous debate over the issue. Examples of “controversial issues of public importance” could include whether gambling or medicinal marijuana should be legalized, whether a public works project should be approved, or whether local property taxes should be increased.

Different Legal Treatment for Issue Ads vs Candidate Ads
Because issue advertising is different from candidate commercials, it is subject to several distinct rules and disclosure requirements. As a threshold matter, issue advertising is not subject to the following political broadcasting rules and protections applicable to candidate advertisements:

• No “Lowest Unit Charge”. General managers and sales managers should remember that if an issue advertisement is purchased by someone other than a candidate or his or her authorized committee (or, in limited circumstances, a third-party entity authorized to purchase advertising on behalf of the candidate), the advertisement is not subject to the rules concerning “lowest unit charge.”

• No “Equal Opportunities” if Not a Use. If an issue ad is not considered a “use” by a legally qualified candidate, the advertising does not trigger an obligation for the station to comply with the rules concerning “equal opportunities.”

• No “Reasonable Access” if Not a Federal Candidate Commercial. If an issue ad is not a candidate commercial for a federal candidate, the advertising does not trigger an obligation for the station to comply with the rules concerning “reasonable access.”

• No Immunity from Defamation. It is important to remember that stations are not insulated by law from liability for the content of issue advertising purchased by someone other than a candidate or his or her campaign committee. These ads may and should be censored or rejected by a station if they contain defamatory or other matter that may subject the station to legal liability. Stations would be well advised to consider pre- broadcast review of issue advertising by legal counsel.

Some Similarities in Legal Treatment Between Issue Ads and Candidate Ads
Notwithstanding the differences between issue advertising and candidate commercials, there are also several important legal similarities that stations need to understand — many of which are discussed further in other sections of this guide. The most important of these are:

• Sponsorship Identification Rule: As with candidate ads, when a station broadcasts any material concerning a “controversial issue of public importance” in exchange for money or services — or when other valuable consideration is directly or indirectly paid, promised, charged, or accepted by the station — the station must comply with FCC rules and Ohio sponsorship identification requirements discussed in Section IV.

• Sponsorship List Retention: Whenever a station broadcasts matter involving a “controversial issue of public importance” and a corporation, committee, association, or other unincorporated group or entity pays for or furnishes the broadcast matter, the station must upload to its online public inspection file a list of the chief executive officers, members of the executive committee, or members of the board of directors of the entity that is paying for or furnishing the broadcast matter. This requirement is further discussed in Sections VI.B and C.

• Federal Issue Ads: Note that the record-keeping requirements are expanded for issue advertising that concerns any “political matter of national importance.” The determination of when an issue ad addresses any “political matter of national importance” may not always be clear. Although broadcasters are given discretion in making this determination in good faith, where it is not clear whether a particular ad addresses any “political matter of national importance,” stations may, out of an abundance of caution, wish to comply with the expanded recordkeeping requirements. Please see Section VI.B for a discussion of these requirements.