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In late April 2021, the Federal Communications Commission
(FCC) adopted new rules that require on-air
programming sponsored or furnished by a foreign government to
contain a disclosure statement noting the foreign government
sponsorship and identifying the foreign country involved. While
U.S. law bars foreign governments from holding broadcast licenses
directly, there are no limitations on their ability to enter into
agreements with licensees to air programming. Much like the Foreign
Agents Registration Act (FARA), the new FCC rules
seek to ensure that audiences are aware when a foreign government
seeks to influence the U.S. public. At the same time, the new rules
go beyond similar disclosure requirements in FARA and place a
significant diligence burden on U.S. broadcasters.
The new rules, which were released in an April 22, 2021 Report and Order, will take effect 30 days
after the date of publication in the Federal Register.
I. Disclosure Required for Foreign Governments and their
Agents
The FCC’s prior disclosure rules only required
broadcasters to disclose the name(s) of the individuals or entities
paying for or furnishing paid programming,
including paid political programming. As discussed in detail below,
the new rules require a disclosure when a foreign governmental
entity directly or indirectly provides material for a broadcast,
regardless of whether such material is paid programming.
The FCC borrows key definitions from FARA and the Communications
Act of 1934. In defining “foreign governmental
entity,” the Report and Order references FARA’s
definitions of “government of a foreign country,”
“foreign political party,” and “agent of a
foreign principal,” if that agent is acting as a registered
agent of the foreign government or foreign political party (defined
in 22 U.S.C. §§ 611(c)–(f)). Also borrowing from
FARA, the FCC noted that disclosure is required when the foreign
principal is directly or indirectly operated, supervised, directed,
owned, controlled, financed, or subsidized by a foreign
government.
The scope of the FCC disclosure rules is broader than FARA and
the Report and Order also extends the definition of foreign
governmental entity beyond the limits of FARA to include entities
that would otherwise be exempt under FARA. Specifically, it
includes any entity or individual subject to section 722 of the
Communications Act that has filed a report with the FCC.
Section 722 applies to any U.S.-based foreign media outlet that:
(a) produces or distributes video programming that is transmitted,
or intended for transmission, by a multichannel video programming
distributor to consumers in the United States, and (b) would be an
“agent of a foreign principal” but for an exemption in
FARA.
II. Foreign Programming Requires Disclosure if Paid for or
Political
The new rules apply to any agreement in which a broadcast
licensee makes a discrete block of broadcast time on its station
available for a foreign governmental entity’s programming in
exchange for compensation. The rules also apply to political
programs or programs discussing controversial issues if the
broadcast material was furnished for free by a foreign governmental
entity as an inducement to air the programming.
The FCC borrowed the definition of “political
program” from the Communications Act, which defines it as any
program “seeking to persuade or dissuade the American public
on a given political candidate or policy issue.” After
consideration, the FCC chose to keep 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’s disclosure requirements are
focused on leasing agreements between a station and a third party
and, therefore, do not apply to paid advertisements. Paid
advertisements will, however, remain subject to the existing
sponsorship identification rules in 47 C.F.R.
§ 73.1212(f).
III. Broadcaster Diligence Required for New and Existing
Agreements
In what is likely to be a significant burden for broadcasters,
the responsibility for disclosure rests with the licensee.
Specifically, a broadcast station licensee must exercise
“reasonable diligence” to determine if foreign
sponsorship identification is required.
Reasonable diligence requires the licensee to:
- Inform the lessee at the time of the agreement and at any
renewal of the foreign sponsorship disclosure requirement; - Ask the lessee at the time of agreement and at renewal whether
it falls into any of the categories that qualify it as a
“foreign governmental entity;” - Ask the lessee at the time of agreement and at renewal whether
it knows if anyone further up the chain of the programming’s
production or distribution (a) qualifies as a foreign governmental
entity and (b) has provided some type of inducement to air the
programming; - If the lessee does not disclose that it falls into one of the
covered categories, the broadcast station licensee must
independently confirm the lessee’s status at the time of the
agreement and at renewal by consulting the Department of
Justice’s FARA website and the FCC’s semi-annual
U.S.-based foreign media outlets reports and searching for the
lessee’s name; and - Document the above-listed inquiries and investigations to track
compliance.
Reasonable diligence is required not only at the time of initial
agreement, but also at the time of any renewal(s).
Additionally, because a lessee’s status may change during the
course of an agreement, the Report and Order encourages licensees
to include a provision in all lease agreements that requires a
lessee to provide notification about any change in its status that
would trigger the foreign sponsorship identification rules.
Further adding to broadcaster burdens, the new reasonable
diligence requirements will apply both on a prospective basis and
to existing lease agreements. Current lease agreements must comply
with the new rules, including undertaking reasonable diligence
within six months of the effective date of the rules.
IV. Disclosure Requirements
The Report and Order provides the standard language that
broadcasters must use if disclosure is required. For televised
programming, the disclosure must be in letters equal to or greater
than four percent of the vertical picture height and be visible for
at least four seconds. For radio broadcasts, the disclosure must be
audible. Broadcasters must make the disclosure at the beginning and
end of a broadcast, unless the broadcast is less than five minutes
long, in which case the disclosure at the beginning of the program
is sufficient. If a broadcast is longer than one hour, broadcasters
must make disclosures at regular intervals throughout the broadcast
and at least once per hour.
The required language that broadcasters must use is:
The [following/preceding] 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
country].
The new disclosure requirements appear to be more demanding than
FARA but if the licensee is also subject to FARA, FARA’s
labeling requirements will satisfy the new requirements, provided
that the FARA label includes the name of the foreign governmental
entity’s country and adheres to the frequency requirements
described above.
In addition to in-broadcast disclosures, the Report and Order
requires broadcasters subject to these disclosure requirements to
keep copies of the disclosures in their Online Public Inspection
File (OPIF). The disclosures must remain in a
folder labeled “Foreign-Government Provided Programming
Disclosures.” The information on file in the OPIF must
include the actual disclosure, as well as the date and time they
aired the broadcast. If the broadcast 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 disclosures related to the
Report and Order.
The FCC’s new rules are likely the result of congressional
pressure on the FCC to act in this area and they reflect the U.S.
government’s increasing scrutiny of foreign government
efforts to influence the American public. Similarly, the Department
of Justice has sought to more aggressively enforce FARA’s
registration and disclosure requirements for foreign media
companies and U.S. companies that broadcast or disseminate
information in the United States on behalf of foreign governments.
This is evidenced by the DOJ FARA Unit’s issuance of several
determination letters over the past three years requiring FARA
registration of certain foreign media entities, including CGTN America, RIA Global, RM Broadcasting, and Xinhua News. In this way, the Report and
Order adds to the complexity of an already crowded regulatory field
related to foreign influence, adding detailed disclosure
requirements that overlap but are not identical to analogous
requirements in FARA. Critically, it also places a significant and
ongoing diligence demand on broadcasters.
Because of the generality of this update, the information
provided herein may not be applicable in all situations and should
not be acted upon without specific legal advice based on particular
situations.
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