Due to the ongoing pandemic caused by the novel coronavirus and COVID-19, the Federal Communications Commission (“FCC”) has issued guidance for broadcasters regarding the clarification or relaxation of certain rules, including recent guidance on calculation of lowest unit charge and on local sharing agreements. These actions are intended to help stations respond to the challenges that many face in the wake of the pandemic and the public health measures that have been undertaken in response.
Free Advertisements Do Not Affect Lowest Unit Charge
The Media Bureau clarified that, while the COVID-19 pandemic is ongoing, free advertisements generally will not have to be considered when calculating lowest unit charge.
As background, under the FCC’s political advertising rules, during the pre-election “windows,” legally qualified candidates are entitled to the lowest unit charge for a given class of time. In other words, candidates purchasing time are entitled to lowest rate extended to any commercial advertiser purchasing a comparable class of time. Typically, this means that offering free time to a commercial advertiser may result in a lowest unit charge of zero for a given class of time, and that “bonus” spots must be included when calculating lowest unit charge.
The Media Bureau reports that as a result of the pandemic, many stations’ commercial advertisers have cancelled their orders, resulting in excess inventory. To build goodwill, some stations have sought to offer commercial advertisers with free time, but were concerned that doing so would create a lowest unit charge of zero. To avoid dissuading such actions, the Bureau clarified that free time need not be included in the lowest unit charge calculation, if the free time is a stand-alone order, unconnected to an existing commercial contract for paid time. For example, the free time cannot be “bonus” spots related to a prior order.
Waiver Process and Clarification for News-Related Sharing Agreements
The Media Bureau announced that it would allow brokered television stations to seek temporary waivers of the Local Television Ownership Rule to allow for increased shared news coverage. As background, the FCC’s rules that govern local marketing agreements and shared services agreements generally require that the programming supplied through such agreements total no more than 15% of a brokered station’s weekly programming hours (exceeding this limit triggers attribution for ownership purposes).
To ensure that this limit does not discourage the production of local news while the pandemic is ongoing, the Media Bureau will permit stations to request a temporary waiver of the applicable FCC rules. Stations can request a waiver by emailing either David Brown, Deputy Chief of the Video Division, at david.brown@fcc.gov, or Barbara Kreisman, Chief of the Video Division at barbara.kreisman@fcc.gov. The e-mail request should explain how permitting the brokering station to provide the brokered station with additional news programming will facilitate local coverage of COVID-19.
Moreover, the Media Bureau also clarified that temporary news sharing agreements do not have to be filed in a station’s online public file. Generally, the FCC’s rules require that sharing agreements between television stations must be memorialized and placed in the stations’ online public file. But the rules include an exception for ad hoc or “on-the-fly” arrangements during breaking news coverage. The Media Bureau clarified that temporary or ad hoc sharing agreements arising from coverage of the pandemic qualify for this exception, which means they do not have to be memorialized in writing or placed in the online public file.
If you have any questions concerning the material discussed in this client alert, please contact the following members of our Communications and Media practice.
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