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At the end of April 2021, the Federal Communications Commission (FCC) enact new regulations that require broadcast programs sponsored or provided by a foreign government to include a disclosure statement stating the foreign government funding and the foreign country concerned. While US law prohibits foreign governments from directly owning broadcast licenses, there are no restrictions on their ability to enter into agreements with licensees to broadcast programs. Similar to the Foreign Agents Registration Act (FREE) The aim of the new FCC rules is to ensure that the public is informed when a foreign government tries to influence the US public. At the same time, the new regulations go beyond similar disclosure requirements in FARA and burden US broadcasters with considerable duties of care.
The new rules published on April 22nd, 2021 Report and order, comes into force 30 days after the date of publication in the Federal Register.
I. Disclosure Requirements for Foreign Governments and Their Agents
The FCC’s pre-disclosure requirements only required broadcasters to disclose the name (s) of the natural or legal person (s) who pay for or provide paid programming, including paid political programming. As discussed in detail below, the new regulations require disclosure when a foreign government agency directly or indirectly provides material for a broadcast, whether or not that material is paid for programming.
The FCC borrows key definitions from FARA and the Communications Act of 1934. When defining “foreign government agency,” the report and ordinance refer to FARA definitions of “foreign country government,” “foreign political party,” and “agent of a foreign “principal” if that agent is acting as the registered agent of the foreign government or foreign political party (defined in 22 USC §§ 611 (c) – (f)). The FCC also borrowed from FARA and determined that disclosure is required if 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 that of FARA, and the report and regulation also extends the definition of foreign governmental entities beyond the boundaries of FARA to entities that would otherwise be exempt under FARA. In particular, it includes any entity or individual subject to Section 722 of the Communications Act and who has filed a report with the FCC. Section 722 applies to any US-based overseas media company that: (a) produces or distributes video programs broadcast or intended for broadcast to consumers in the United States by a multichannel video program distributor; and (b) an “agent of a foreign client ”, but for an exception in FARA.
II. Foreign programming requires disclosure if it is paid or political
The new rules apply to all agreements in which a broadcasting licensee makes a discrete block of airtime from his broadcaster available for programming to a foreign government agency in return for compensation. The rules also apply to political programs or programs in which controversial issues are discussed if the broadcast material was made available free of charge by a foreign government agency as an incentive to broadcast the program.
The FCC borrowed the definition of “political program” from the Communications Act, which defines it as any program “that seeks to convince or dissuade the American public about a particular political candidate or issue.” After deliberation, the FCC decided to keep this limited definition of policy programming rather than extending it to all programs of a foreign government agency. The FCC will determine on a case-by-case basis whether an issue is “controversial”.
The disclosure requirements of the new Report and Order focus on leasing contracts between a broadcaster and a third party and therefore do not apply to paid advertisements. However, paid advertisements are still subject to the existing sponsorship identification rules in 47 CFR
Section 73.1212 (f).
III. The broadcaster’s duty of care for new and existing agreements
As this is likely to be a significant burden for broadcasters, the responsibility for disclosure rests with the licensee. In particular, a broadcaster licensee must exercise “reasonable care” to determine whether a foreign sponsorship card is required.
Appropriate care is required of the licensee:
- Inform the tenant at the time of the conclusion of the contract and each time the disclosure obligation for foreign sponsorship is extended;
- At the time of contract signing and renewal, ask the tenant whether they fall into one of the categories that qualify them as a “Foreign Government Establishment”;
- At the time of the agreement and upon renewal, ask the renter if they know if anyone further up the production or distribution chain of the program is (a) qualified as a foreign government agency, and (b) has provided some type of incentive to broadcast the program Has;
- If the renter does not indicate that they fall into any of the covered categories, the broadcaster licensee must independently confirm the status of the renter at the time of contract signing and renewal by consulting the FARA website of the Department of Justice and the FCC’s semi-annual US -based foreign media reports and searches for the tenant’s name; and
- Document the inquiries and investigations listed above to track compliance.
Appropriate care is required not only with the initial agreement, but also with each renewal. In addition, because the status of a lessee may change during the course of an agreement, the report and order encourages licensees to include in all leases a provision requiring a lessee to discourage any change in status that would trigger the foreign sponsorship identification rules, Report to .
The new requirements for appropriate due diligence will place an additional burden on broadcasters, both on a prospective basis and on existing rental agreements. Current rental agreements must comply with the new regulations, including performing reasonable care within six months of the regulations coming into force.
IV. Disclosure Obligations
The report and order contains the standard language broadcasters must use when disclosure is required. For television programs, disclosure must be in letters of at least four percent of the vertical picture height and be visible for at least four seconds. In the case of broadcasts, the disclosure must be audible. Broadcasters must disclose at the beginning and at the end of a broadcast, unless the broadcast lasts less than five minutes, in which case disclosure at the beginning of the broadcast is sufficient. If a broadcast lasts longer than an hour, broadcasters must provide information at regular intervals and at least once an hour throughout the broadcast.
The required language broadcasters must use is:
The [following/preceding] Programming was [sponsored, paid
for, or furnished,] in whole or in part, by [name of foreign
governmental entity] in the name of [name of foreign
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 meet the new requirements, provided the FARA label includes the name of the country of the foreign government agency and complies with the frequency requirements described above.
In addition to the broadcast disclosures, the report and order requires broadcasters subject to these disclosure requirements to make 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 stored in the OPIF must contain the actual disclosure as well as the date and time the program was broadcast. If the program was broadcast more than once, the broadcasters must add each additional date and time to the OPIF. Broadcasters are required to update their OPIFs at least quarterly and there is a two year retention period for disclosures related to the report and the 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 increasing scrutiny of the US government’s efforts by foreign governments 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 outlets and US companies that broadcast or disseminate information in the United States on behalf of foreign governments. This is evidenced by the issuance of several letters of assessment by the DOJ-FARA entity in the past three years, which require FARA registration of certain foreign media companies, including CGTN America, RIA Global, RM broadcasting, and Xinhua News. In this way, the report and regulation add to the complexity of an already overcrowded regulatory field related to foreign influence and add detailed disclosure requirements that overlap but are not identical to analogous requirements in FARA. It is also crucial that broadcasters have a substantial and sustained duty of care.
Due to the generality of this update, the information provided herein may not be applicable in all situations and should not be implemented in certain situations without specific legal advice.
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