FCC Releases New Foreign Sponsorship Identification Requirements

On June 10, 2024, the FCC released a Second Report and Order adopting foreign sponsorship identification requirements which replaces the vacated verification requirement and clarifies the applicability of the rules to different advertisement and station types.

As you may recall, in 2021, the FCC amended the foreign sponsorship identification rules by adding a requirement that licensees disclose the identity of any foreign governmental entities that leased time on their stations.  In adopting that requirement, the FCC imposed a rule that required licensees to independently confirm the lessee’s status, when entering into the lease agreement and at renewal, by consulting several registries maintained by the Federal government.  This requirement was challenged in Court and the Court ultimately vacated the requirement for broadcasters to research the Federal registries. The FCC is now releasing the Second Report and Order to “address the gap left by the [Court’s] vacatur of the independent verification requirement.”

Under the Second Report and Order, broadcasters may comply with the verification requirement in one of two ways:

  1. Certification Option: The first option is a written certification agreement signed by the lessee (i.e. the programmer) and the lessor (i.e. the licensee). The certification language can be written by the parties or be taken from template language provided in Appendices C and D of the Second Report and Order. All agreements must confirm that the lessor:
    • informed the lessee of the foreign sponsorship disclosure requirement;
    • asked the lessee whether it falls into any of the categories that would qualify it as a “foreign governmental entity;”
    • asked the lessee whether it knows if any individual/entity further back in the chain of producing and/or distributing the programming to be aired qualifies as a foreign governmental entity and has provided some type of inducement to air the programming;
    • sought a written certification in response from the lessee; and
    • obtained the necessary information for a disclosure if one is required.
  1. Screenshot Option: The second option is for the lessee to provide screenshots of the search results for their own name from two federal government databases: the Department of Justice’s Foreign Agents Registration Act (“FARA”) database and the FCC’s U.S.-based foreign media outlet report. If the search for the name does not provide any results on both databases, no further search is needed.

The verification requirement applies to all lease agreements, defined as “any agreement, written or not, where a licensee grants to another party the right to program on its station in exchange for some form of consideration.”  Thus, the due diligence requirements apply regardless of the terms or duration of the agreement, and regardless of whether the parties view the agreement as a time brokerage agreement, a local marketing agreement, or something else. Parties also cannot avoid the verification requirement through informal, short term, and/or week-to-week type arrangements.  For short term leases, where the same licensee and lessee enter into recurring leases for the same programming over a one-year period, the licensee need only exercise the due diligence required by the rules once per year.

These rules apply to all programming, regardless of length. This includes short-form advertising, as well as issue advertisements, paid Public Service Announcements, religious programming, and locally produced and/or distributed programming. It also applies to programming by section 325(c) permit holders.

These rules do not apply to commercial advertising only if that programming would not otherwise be subject to general sponsorship disclosure rules (i.e. has the sponsor’s name identified in the advertisement in a manner that clearly shows that they are the sponsor, per section 73.1212(f)). This exception to the foreign sponsor identification requirement applies in the same way as in the general sponsor identification exception. The rules also do not apply to noncommercial and educational broadcast stations (“NCEs”), or to political candidate advertisements.

Because leases already in effect at the time of the compliance date will be grandfathered in, compliance is only required from new and renewed leases.

Please Contact Us if you have any questions.

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