FCC Adopts New Rules for Identifying Foreign Sponsors – Media, Telecommunications, IT, Entertainment

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At the end of April 2021, the Federal Communications Commission (FCC) enacted new rules requiring that on-air programming sponsored or provided by a foreign government contain a disclosure statement identifying the foreign government sponsorship and identifying the foreign country concerned. While US law prohibits foreign governments from directly holding broadcast licenses, there is no limit to their ability to enter into agreements with licensees to broadcast programming. Just like the law on the registration of foreign agents (FARA), the new FCC rules are intended to ensure that the public is informed when a foreign government seeks to influence the American public. At the same time, the new rules go beyond similar FARA disclosure requirements and place a significant due diligence burden on US broadcasters.

The new rules, published in an April 22, 2021 report and order, will come into effect 30 days after the date of publication in the Federal Register.

I. Disclosure required for foreign governments and their agents

Previous FCC disclosure rules only required broadcasters to disclose the name (s) of persons or entities paying or providing paid programming, including paid political programming. As discussed in detail below, the new rules require disclosure when a foreign government entity directly or indirectly provides material for broadcast, whether or not it is pay programming.

The FCC borrows key definitions from FARA and the Communications Act of 1934. In defining “foreign government entity,” the report and ordinance refer to FARA’s definitions of “government of a foreign country,” “ foreign political party ”and“ agent of a foreigner ”. principal ”, if that agent is acting as a registered agent of the foreign government or of a foreign political party (defined in 22 USC §§ 611 (c) – (f)). Also borrowing from FARA, the FCC noted that disclosure is required when the foreign principal is directly or indirectly exploited, supervised, directed, owned, controlled, funded or subsidized by a foreign government.

The scope of the FCC disclosure rules is broader than that of the FARA and the report and ordinance also extend the definition of foreign government entity beyond the limits of FARA to include those entities that would otherwise be exempt in under FARA. Specifically, this includes any entity or person subject to Section 722 of the Communications Act who has filed a report with the FCC. Section 722 applies to any United States-based foreign media that: (a) produces or distributes video programming that is transmitted, or intended to be transmitted, by a multi-channel video programming distributor to consumers in the United States. United, and (b) would be an “Agent of a Foreign Principal” but for a FARA exemption.

II. Foreign programming must be disclosed if paid or political

The new rules apply to any arrangement whereby a broadcasting licensee makes available a separate block of airtime on its station for the programming of a foreign government entity in return for compensation. The rules also apply to political programs or programs dealing with controversial issues if the material broadcast has been provided free of charge by a foreign government entity as an incentive to broadcast the programming.

The FCC borrowed the definition of “political program” from the Communications Act, which defines it as any program “seeking to persuade or deter the American public on a candidate or a given political issue.” Upon review, the FCC chose to retain this limited definition of political programming instead of expanding it to include all programming provided by a foreign government entity. The FCC will determine on a case-by-case basis whether an issue is “controversial.”

The new report and order disclosure requirements focus on rental contracts between a station and a third party and, therefore, do not apply to paid advertising. Paid advertisements will, however, remain subject to the sponsorship identification rules existing in 47 CFR
§ 73.1212 (f).

III. Broadcasters due diligence for new and existing agreements

In what is likely to be a significant burden on broadcasters, the responsibility for disclosure lies with the licensee. Specifically, a broadcasting station licensee must exercise “due diligence” in determining whether identification of foreign sponsorship is required.

Due diligence requires the licensee to:

  1. Inform the tenant at the time of the agreement and at any renewal of the foreign sponsorship disclosure requirement;
  2. Ask the tenant at time of agreement and at renewal if they fall into one of the categories that qualifies them as a “foreign government entity”;
  3. Ask the tenant at the time of agreement and renewal if they know if anyone higher in the programming production or distribution chain (a) qualifies as a foreign government entity and (b) has provided a some type of incentive to broadcast programming;
  4. If the lessee does not disclose that they fall into one of the categories covered, the licensee of the broadcasting station must independently confirm the lessee’s status at the time of the agreement and upon renewal by consulting the FARA website of the Department of Justice and US semi-annual FCC. – foreign media reports based on the search for the tenant’s name; and
  5. Document the inquiries and investigations listed above to track compliance.

Due diligence is required not only at the time of the initial agreement, but also at the time of any renewal. Additionally, since a tenant’s status may change over the course of an agreement, the report and ordinance encourages licensees to include a provision in all rental agreements that requires a tenant to provide notification. any change in status that would trigger the identification rules for foreign sponsorship. .

Further adding to the burden on broadcasters, the new due diligence requirements will apply both on a prospective basis and to existing rental contracts. Current leases must comply with the new rules, including performing due diligence within six months of the date the rules come into force.

IV. Disclosure requirements

The report and order provide the standard language broadcasters should use if disclosure is required. For television broadcasts, the disclosure must be in letters equal to or greater than four percent of the vertical height of the image and be visible for at least four seconds. For radio broadcasts, the disclosure must be audible. Broadcasters must disclose at the start and end of a program, unless the program is less than five minutes in length, in which case disclosure at the start of the program is sufficient. If a show is longer than an hour, broadcasters must make disclosures at regular intervals throughout the show and at least once every hour.

The required language that broadcasters should use is:

the [following/preceding] the programming was [sponsored, paid
for, or furnished,] either in whole or in part, by [name of foreign
governmental entity] on behalf of [name of foreign

The new disclosure requirements appear to be more onerous than FARA, but if the license holder is also subject to FARA, the FARA labeling requirements will meet the new requirements, provided the FARA label includes the name of the country of origin. foreign government entity and meet frequency requirements. described above.

In addition to the in-air disclosures, the report and order require broadcasters subject to these disclosure obligations to keep copies of the disclosures in their online public inspection file (OPIF). Disclosures should remain in a file titled “Disclosures of Programs Provided by Foreign Governments”. The information on file with the OPIF must include the actual disclosure, as well as the date and time of the broadcast. If the program has aired multiple times, broadcasters must add each additional date and time to the OPIF. Broadcasters must update their OPIFs at least quarterly and there is a two-year retention period for report and order related disclosures.

The new FCC rules are likely the result of Congressional pressure on the FCC to act in this area, and they reflect the growing US government control over efforts by foreign governments to influence the American public. Likewise, the Department of Justice has sought to enforce more vigorously FARA registration and disclosure requirements for foreign media companies and US companies that disseminate or disseminate information in the United States on behalf of foreign governments. . This is evidenced by the publication by the DOJ FARA Unit of several Letters of Determination over the past three years requiring FARA registration from certain foreign media entities, including CGTN America, RIA Global, RM Broadcasting and Xinhua News. In this way, the report and ordinance add to the complexity of an already crowded regulatory area related to foreign influence, by adding detailed disclosure requirements that overlap but are not identical to the analogous FARA requirements. Critically, this also places a significant and continuing due diligence requirement on broadcasters.

Due to the generality of this update, the information provided in this document may not be applicable in all situations and should not be implemented without specific legal advice based on particular situations.

© Morrison & Foerster LLP. All rights reserved

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