Section V

Disclosure Statement, in General

FCC regulations require broadcast stations to disclose to prospective political advertisers detailed information regarding the advertising policies, rates, and various sales packages and plans offered by stations to their commercial advertisers, including the “lowest unit charges” for advertising time and all value-enhancing discount privileges. The disclosure should be in the form of a written statement and should cover policies, rates, plans, and packages that are in effect both (1) during the “lowest unit charge” periods (i.e., 45 days before a primary or primary run-off election and 60 days before a general or special election), and (2) where relevant, during the period outside the “lowest unit charge” periods. It is acceptable for a station to supply this information in a single statement or two statements (one for during the “lowest unit charge” periods and one for the period outside the “lowest unit charge” window). The relevant information must be complete, thorough, and presented in a clear, orderly manner.

Documentation of Delivery

The fact that full disclosure has been made should be documented and signed by station personnel each time the station receives an inquiry regarding political advertising. Once a station has provided full disclosure to a regular purchaser (such as an agency), the station needs only to disclose any updated (i.e., changed) information to that purchaser for subsequent orders. The political disclosure statement is not required to be uploaded into the station’s online political file, and stations may wish to consult with legal counsel regarding whether to upload it there.

Cannot Require Acknowledgment of Receipt

A station may request, but federal candidates cannot, under any circumstances, be required to acknowledge receipt of the station’s political broadcast disclosure statement. It is advisable to attempt to obtain such written acknowledgment, but it cannot be a mandatory prerequisite. A station may require state and local candidates to provide such acknowledgments as a precondition to selling them time unless such a candidate is making an “equal opportunities” demand.

Record Keeping

Each station should develop an internal record-keeping system to document when it furnishes a disclosure statement to each prospective political advertiser. These records could prove invaluable if a candidate or time purchaser should later claim that the disclosure statement was not provided. Records made by station sales representatives indicating to whom they have given disclosure statements and the dates they were given would generally be sufficient.

What Must Be Included in Disclosure Statement

The FCC has declined to adopt a standard disclosure form or to provide a comprehensive list of information that must be disclosed. Nonetheless, the rules require that each station disclose the following minimum information to political candidates and to their time purchasers:

• A description of each class of time offered to commercial advertisers (including an explanation of preemption priorities) that is sufficient to allow candidates to understand the specific differences between various classes of time (even if the station has a special candidate-only non-preemptible rate that is lower than all other rates);

• A description of the “lowest unit charge” and related privileges (such as priorities against preemption and the availability of any make-goods prior to specific deadlines) for each class of time offered to commercial advertisers;

• A description of the station’s method of selling preemptible time based on advertiser demand — e., demand-driven “current selling level,” (auctions, fluctuating levels, grid, etc.) with an express notation that candidates are able to purchase time at these demand-generated rates in the same manner as the station’s most favored commercial advertisers;

• A current approximation of the likelihood of preemption for each class of preemptible time (a “percentage” estimate of chances for preemption is sufficient);

• An explanation of the station’s make-good policy(ies);

• An explanation of the station’s sales practices that affect rates, including arrangements based on audience delivery, with a notation that candidates will be able to purchase this class of time;

• An explanation of station rotations, together with a statement that other rotations and negotiated packages are available (if applicable); and

• An explanation of the station’s discount and value-added packages.

(Note: If a station has any long-term package contracts currently on the books, the station should immediately review those contracts to determine the value of the spots within the packages and their impact on the station’s “lowest unit charge” rate. If the prices listed on the face of the contracts do not reflect the real value of the spots, or if no allocation at all is set out between different classes of spots within the package, the station should contact legal counsel to discuss the allocation of the package purchase price.)

Note that these are minimum requirements. Disclosure is an explicit, mandatory requirement; failure to make proper disclosure could result in substantial penalties. Rate practices vary among stations, so disclosure requirements will vary. Stations should take care to include all relevant information in the disclosure statement based on the station’s specific sales policies, plans, and rates. Once the information is disclosed, stations must update the information to ensure that political time purchasers have the station’s most current information.

What Should Also Be Included in Disclosure Statement

The following is a checklist of recommended information to include in a station’s disclosure statement (if appropriate), in addition to the minimum requirements listed above:

• Heading: The heading should be typed on station letterhead and entitled: “Political Broadcast Advertising Disclosure Statement.” The statement should be dated and numbered.

• Introduction: The disclosure statement should contain a general introduction or summary explaining the various advertising rate classifications and sales plans available. This could be a generalized overview of the station’s sales policies and plans with an explanation that the specifics of each rate, policy, and plan are provided in detail below. The introduction should encourage those who have questions or seek additional information to contact designated persons at the station. One or more staff persons should be named and their title(s), mailing address(es) (including email), and telephone number(s) should be provided.

• “Lowest Unit Charge”/Comparable Charge Statement of Policy: The disclosure statement should contain an affirmative statement that it is the station’s policy and practice to extend the “lowest unit charge” to a “use” of the station’s facilities by any qualified candidate during the 45-day period prior to a primary or primary run-off election and 60-day period prior to a general or special election (i.e., the “lowest unit charge” period). The disclosure should include an affirmative statement that it is the policy and practice of the station to extend to any “use” of the station’s facilities by a legally qualified candidate outside the “lowest unit charge” period rates that are comparable to the rates extended to the station’s commercial advertisers. The disclosure should also contain a statement that makes clear that a BCRA “stand by your ad” certification will be required of all federal candidates for such candidates to be entitled to the “lowest unit charge.”

• Definition of “Use”: A statement should be included that defines “use” of the station as any broadcast of a candidate’s voice or picture, whether or not authorized by the candidate. Spots by an independent political group promoting a candidate, or even appearances of a candidate in old movies or TV shows, are considered “uses.” However, a hostile ad, even if it contains the candidate’s voice or picture, is not considered a “use” by the candidate being attacked.

• Good Faith Estimate of Charges: A statement should be included to indicate that the “lowest unit charge” and comparable charges reflected in the disclosure statement constitute the station’s best good faith estimate of the “lowest unit charges” and comparable charges for the various classes of time The statement should expressly state that often it is impossible to determine the “lowest unit charge” and comparable charge until after the ad has been broadcast and that, in such cases, the station will, upon request, provide all appropriate additional information.

• Classes of Time and Rates: In addition to the information required above, the disclosure statement should contain the rates charged for each class of time offered by the station. Further, the statement should also disclose: the length of available units; each time period; rotating schedules; fixed positions; any unique class characteristics (such as preemptible with notice, immediately preemptible, packages, ), that are offered by the station to its most favored commercial advertisers; and the lowest unit charge for each unit and class. If the station has multiple rotation schedules or rate plans, all of them must be disclosed. The Commission has stated that if the schedules or packages are voluminous, a summary may be provided in the disclosure statement with an explanation that a complete list of all rotations and package plans will be provided upon request.

• Comparable Charge: The disclosure statement should also contain a complete description of the comparable charges and related privileges (such as priorities against preemption, availability of any make-goods prior to specific deadlines, and volume discounts) available outside the “lowest unit charge” period for each class of time offered to the station’s commercial advertisers.

• Audience Delivery Guarantee: Further, the disclosure statement should explain that if a promised delivery of audience does not occur, the station will make available to the candidates make-goods, rebates, or credits to compensate for the difference. The statement should point out, if applicable, that in some instances, measurement of the audience delivered (i.e., ratings) may not be available until after the election, and, in that case, rebates or other compensatory alternatives will not be made available to the candidate.

• Separation Policy: Any station policy concerning separation of competitive announcements (i.e. “pod exclusivity”) should be disclosed.

• Sponsorship Identification: The disclosure statement should indicate that all political advertisements must include a sponsorship identification as required by law and that if an ad does not include the requisite sponsorship identification, the station will insert it in the spot even if the inserted identification blocks or obscures the picture or message.

• Ordering Deadlines: The disclosure statement should include information on ordering deadlines. The FCC has said that a station may generally apply the same ordering deadlines to candidates that it applies to commercial advertisers. However, the FCC has further explained that an ordering deadline cannot be invoked to deny “equal opportunities” to candidates during the days immediately prior to an election or to deny “reasonable access” to federal So, when an ordering deadline is stated, it should contain the following exception:

“The station’s regular ordering deadline may be waived, where appropriate, to provide equal opportunity to political advertisers or to ensure federal candidates reasonable access.”

• Contact Information: The disclosure statement should identify designated person(s) to be contacted about political advertising and provide an office mailing address and telephone number.

• Video and Copy Delivery: The disclosure statement should provide express instructions indicating to whom and to what station address (physical or, if applicable, email) the video files and copy are to be delivered.

• Video File Specifications: The disclosure statement should indicate any technical specifications for video or audio formats, standards, or requirements.

• Candidate Authorization: Some states have enacted laws that prohibit the media from accepting advertisements for candidates unless the time purchaser provides a written statement signed by the candidate authorizing that agency or individual to make the purchase on the candidate’s behalf. If this is applicable in the jurisdictions from which a station accepts political advertising, the station may wish to include such a requirement in its disclosure statement.

• Payment and Credit Policy: The FCC permits stations to require advance payment only if similar advance payment would be required of a comparable commercial advertiser. In addition, for federal candidates, stations can only require advance payment up to seven days before the broadcast of the political advertisement (i.e., stations can’t require payment more than seven days in advance). The disclosure statement should reflect the station’s credit policy and indicate to whom payment should be made and the address to which it should be A station may factor the candidate’s credit history into making its determination. See Section II.B.2, Credit and Advance Payment, for additional information.

• Reserved Right of Station to Recapture Time: On occasion, stations may find it necessary to cancel or modify a political sale after it is made to accommodate the “equal opportunities” demands of opposing candidates or to accommodate the “reasonable access” requirements for federal candidates. Therefore, a station should include in its political disclosure statement and in its political (and other commercial) advertising contracts the following statement:

“We reserve the right to cancel or modify any sale of time made or contract entered into for the sale of time on the station, pursuant to the Communications Act of 1934, to satisfy the ‘equal opportunity’ requirements for all legally qualified political candidates and the ‘reasonable access’ requirements for all legally qualified federal candidates. Where such cancellations or modifications are necessary, advertisers will be advised and rebates, schedule changes, or other adjustments will be made as may be appropriate.”

(Note: Again, a station should make sure such a statement is contained not only in its political disclosure statement, but in all of its advertising contracts — i.e., contracts with all commercial advertisers and all political advertisers. Stations should review their advertising contract forms to ensure that language to this effect is included. Or, if your station is no longer using paper confirmation contracts, steps need to be taken to communicate these terms and conditions to the advertiser.)

• Not an Offer to Sell: The disclosure statement should contain the following disclaimer:

“This document does not constitute an offer to sell time, nor is it a contract; rather, it is a statement of the policies that this station, in good faith, attempts to follow in connection with the sale and placement of political advertising. The terms of any actual sale of time are contained in our sale contracts, and none of the matters contained in this disclosure statement are incorporated by reference in the sale contract.”

• Further Information: We suggest that stations include a statement such as the following:

“We will be pleased to provide, upon request, further information about our rates, advertising policies, advertising packages, and advertising plans. We encourage prospective political time purchasers to inquire. It is our desire to furnish all appropriate information to those interested in purchasing political advertising on our station to enable you to make the most cost efficient and effective advertising decisions.”

Rep Firms

It is the responsibility of each licensee to make full disclosure to all candidates inquiring about time purchases. Therefore, stations must educate their rep firms about their political policies and rates and provide them with sufficient copies of their political broadcast advertising disclosure statement. Rep firms must be immediately notified of any changes in the statement when political sales are being made. Stations should maintain detailed records of attempts to keep the rep firm up to date, and obtain information from your rep firm about requests for political time and place that information in your public files. We suggest a weekly e-mail to your rep firm with attachments including the disclosure statement, current rate sheet, and current packages being offered.

Point of Emphasis with FCC

In many cases where the FCC has imposed fines on radio and television stations as a result of field office inspections, the inspections started with a review of the station’s “disclosure statement.” This is indicative of the FCC’s emphasis on disclosure and underscores the importance of thoughtfully preparing the station’s disclosure statement.