FCC Votes to Require Online Public File for TV Stations - Rejects Compromise for Political File

by Davis Wright Tremaine LLP
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At its meeting today, the FCC voted to require that television stations maintain most of their public inspection files online, in a database to be created by the FCC (see the FCC's Public Notice here).  While the details about this obligation have not yet been released, from the comments at the FCC meeting, much is already evident.   All TV stations will have to post their files to an online server to be maintained by the FCC.  Proposals for new obligations to post information about sponsorship identification and shared services agreements have been dropped, at least for now.  Most documents not already online at the FCC will need to be uploaded within 6 months of the rule becoming effective.  And, in the most controversial action, broadcaster's political files will need to be posted to the new online database, though in a process that is to be phased in over time.

The political file obligation will apply at first only to affiliates of the Top 4 TV networks in the Top 50 markets.  And only new information for the political file will need to be posted.  Information in the file before the effective date of the order apparently will not need to be posted online, at least not initially.  The requirement for posting the political file online will be reviewed in a proceeding to begin one year after the effective date of the new rules.  As stations outside the Top 50 markets, and other stations in those large markets, will not need to comply with the political file obligations until July 2014, the FCC will be able to reexamine the impact of the disclosure obligations before the compliance obligation for the political file expands to all stations. 

Issues about the posting of the political file dominated the conversation.  Commissioner McDowell, the lone Republican Commissioner, suggested that the FCC missed an opportunity for compromise.  Broadcasters concerned about the burden of uploading hundred or thousands of documents in the days before an election, and about the specific disclosure of their lowest unit rates in an on-line database available to anyone, anywhere, offered a compromise proposal that would have had them creating a summary of the candidate's purchases on the station, but would not have given the actual rate information.  McDowell suggested that the FCC start with that level of disclosure, and examine in a further proceeding if specific information about lowest unit rates needed to be disclosed online. 

Commissioner Clyburn seemed to acknowledge the competitive concerns of broadcasters having to give out their lowest rate online, where everyone, everywhere, can see it.  From her days as a newspaper publisher, she stated that she knew how hard it was to negotiate with potential advertisers who were always looking for a better deal on rates.  But the Commissioner said that she thought that the public demand for information - whether it be from candidates, regulators, public interest groups, whistleblowers or just people "with too much time on their hands" - outweighed the burden put on broadcasters.  Commissioner Clyburn suggested that the review after the first year could determine if the publicity of the lowest rates really did cause problems.

FCC Chairman Genachowski was the least sympathetic to broadcaster's concerns, essentially saying that, as the information was already in the station's paper files, putting it online was just the modern way to do disclosure.  He dismissed any claims that it would present a burden to broadcasters - claiming that it will actually save broadcasters money in the long run (query why the broadcasters would be objecting so much if the proposal really would save them money).

In fact, the theme that online disclosure was the modern way of doing things, and that it would save broadcasters money, was repeated throughout the presentation.  The Media Bureau attorney who presented the FCC decision suggested that yearly compliance costs would be between $80 and $400 per station (a number that broadcasters I'm sure would find surprising).  This question may well become one that will be crucial to the effective date of the proposal as Commissioner McDowell suggested that a Paperwork Reduction Act analysis of the order might prove troublesome.

More details of the proposal will be available when the FCC releases the full text of its order.  We will update this summary when the text is out and we've had a chance to review it.

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Davis Wright Tremaine LLP
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