Summary
The D.C. Circuit reviews the Federal Communications Commission's 2024 rule requiring broadcasters to disclose programming paid for by foreign governmental entities. The National Association of Broadcasters challenged the rule on procedural grounds under the Administrative Procedure Act and substantive grounds under the First Amendment and statutory authority. The court denied the petition for review, holding that the FCC's rulemaking complied with notice-and-comment requirements, was not arbitrary or capricious, and satisfied constitutional scrutiny.
Topics
Practice areas
Questions Presented
- Whether the 2024 Rule was a logical outgrowth of the FCC's notice of proposed rulemaking and therefore satisfied the APA's notice-and-comment requirements.
- Whether the FCC's revised advertising exemptions and treatment of political-candidate advertisements were arbitrary and capricious.
- Whether the 2024 Rule's distinction between candidate and non-candidate political advertisements violated the First Amendment.
- Whether the FCC exceeded its statutory authority by requiring broadcasters to use certification or screenshot procedures to corroborate lessee information.
- Whether NAB's challenge to the requirement that broadcasters inquire about foreign entities involved in the production or distribution chain was timely under the Hobbs Act and reopening doctrine.
- Whether the 2024 Rule directly regulated lessees beyond the FCC's authority under section 317 of the Communications Act.
Holdings
- The 2024 Rule was a logical outgrowth of the Second NPRM because the NPRM identified multiple possible criteria for distinguishing leases from advertisements, including content and the nature of the contractual relationship. The FCC therefore satisfied the APA's notice-and-comment requirements.
- The FCC's revised advertising exemptions and distinctions between commercial advertisements, political-candidate advertisements, issue advertisements, and paid public-service announcements were not arbitrary or capricious.
- The political-candidate exemption is content-based because the Rule's application turns on the identity of the speaker and the content of the message.
- Assuming without deciding that exacting scrutiny applies, the 2024 Rule satisfies the First Amendment because it bears a substantial relation to an important governmental interest and is narrowly tailored to disclose foreign governmental involvement without restricting the underlying message.
- Section 317 permits the FCC to require broadcasters to use certification or screenshot procedures to establish that they made the required inquiries of lessees. The Rule requires broadcasters to ask appropriate questions, not to guarantee truthful answers.
- NAB's challenge to the requirement that broadcasters inquire about foreign governmental entities involved in the production or distribution chain was barred by the Hobbs Act's sixty-day filing deadline. The 2024 Rule did not reopen that settled portion of the 2021 Rule.
- The 2024 Rule does not directly regulate lessees; it regulates licensees' obligation to request information from lessees. NAB therefore failed to show that the FCC exceeded its statutory authority on this ground.
Key quotations
“Procedurally, the rule complied with the APA’s notice-and-comment requirements and did not exceed the Commission’s statutory authority. Substantively, the rule is neither arbitrary nor capricious and passes First Amendment muster.” (at 3)
“NAB’s members must ask the right questions, not require the right answers.” (at 43)
“Disclosing the messenger without trampling on the message.” (at 40)
Factual background
The FCC regulates broadcast programming under section 317 of the Communications Act, which requires sponsorship identification and reasonable diligence by licensees. Concerned that foreign governments were using U.S. broadcast stations to disseminate undisclosed propaganda, the FCC adopted a 2021 rule and later a 2024 amended rule. The 2024 Rule defined exemptions for commercial and political-candidate advertisements, retained disclosure requirements for leases and non-candidate issue advertisements and paid public-service announcements, and revised the methods by which broadcasters could demonstrate reasonable diligence. NAB challenged those provisions.
Procedural history
The FCC promulgated a 2021 foreign-sponsorship identification rule. In National Association of Broadcasters v. FCC, 39 F.4th 817 (D.C. Cir. 2022), the court vacated the portion of that rule requiring broadcasters to search federal databases. The FCC subsequently promulgated the 2024 Rule, which revised the lease-and-advertising exemption and modified the diligence requirements. NAB petitioned for review, challenging the rule under the Administrative Procedure Act, the First Amendment, and the Communications Act.