Since the column below was written on free time and political lowest unit charge, the FCC has informally clarified that current clients who are now on the air can be given free time under the FCC’s current political time policies. There just cannot be any connection between a paid schedule and the free time.
(By John Garziglia) In response to COVID-19, the FCC’s Media Bureau issued a Public Notice with the subtitle “Free Advertisements Need Not Be Included in Lowest Unit Charge.” The FCC issued this guidance in response to an informal inquiry from broadcasters asking whether free advertisements must be included in the calculation of the political lowest unit rate charge.
The kicker to this is that for the free time not to impact the political lowest unit rate, the free air time must not be “associated with an existing commercial contract for paid time or otherwise considered bonus spots”.
Predictably, radio broadcaster enthusiasm for this political lowest unit charge clarification is less than overwhelming. Basically, broadcasters are able to give away time to those who are not otherwise current clients. An existing loyal advertiser cannot be encouraged to stay on the air with its current spot load during the pandemic with an offer of free or bonus time, even with spots that give helpful community information, without the broadcaster suffering a significant hit to its political rate.
The FCC should have tried harder. The Communications Act requires that broadcasters selling advertising time to legally qualified candidates for political office charge no more than the lowest unit rate for the same class and time during the same period.
The FCC has given radio stations the ability to fairly categorize advertising availabilities into various classes of time such as fixed and non-fixed, pre-emptible or not, and day-parts. The FCC could have extended its recognition of classes of time to encompass a class of any free time given to existing advertisers who were on the air at the time of the declaration of this national emergency, with only a political candidate likewise on the air both prior to the national emergency declaration being entitled to similar free time.
As the FCC noted, the pandemic is a rapidly evolving situation with market conditions changing rapidly. Possibly the FCC will revisit this policy and allow for broadcasters to better serve their existing advertisers, rather than force broadcasters to suffer a potential diminishment of revenue from political candidates, simply for trying in these difficult times to keep existing advertisers on the air.
John Garziglia is a communications attorney at Womble Bond Dickinson and can be reached at (202) 857-4455 or [email protected]