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Federal Register / Vol. 86, No. 115 / Thursday, June 17, 2021 / Rules and Regulations
other entities. The record indicates that such contractual arrangements present the most prevalent instances of undisclosed foreign government programming to date. It also appears that it is through such arrangements that foreign governmental entities have commonly aired programming on U.S.
broadcast stations, whether directly or indirectly, without necessarily disclosing the origin of the programming. Accordingly, the Commission believes that the foreign governmental source of this programming should be disclosed in such circumstances.
26. Moreover, the Commissions action will serve to ensure greater transparency to the public, and prevent foreign governments and their representatives, which are barred from owning a U.S. broadcast license, from leasing time on a station unbeknownst to the public or the Commission.
Notably, Section 310a of the Act outright bars any foreign government or the representative thereof from holding a broadcast license. In addition, Section 310b limits the interest that a foreign corporation or individual can hold in a U.S. broadcast license, either directly or indirectly. While the Commission has revised its rules in recent years to permit a greater degree of ownership in U.S. broadcast stations by non-governmental foreign entities or individuals, acquisition of such interests requires Commission approval following proper consideration and public review and may also be subject to prior review and consideration by the relevant executive branch agencies.
Despite these longstanding restrictions, and particularly the complete prohibition on a foreign government or its representatives holding a U.S.
broadcast license, some foreign governmental actors or their agents appear nonetheless to be programming stations that they otherwise would not be able to own, as detailed in the NPRM.
When they do so, the American public and the Commission may not be aware that a foreign governmental entity has leased the time on the station and is programming the station.
27. As proposed in the NPRM, the disclosure requirements the Commission adopts in this document apply to leasing agreements, regardless of what those agreements are called, how they are styled, and whether they are reduced to writing. The Commission recognizes that leasing agreements within the broadcast industry may be known by different designations. The terms time brokerage agreement TBA
and local marketing agreement LMA
are used interchangeably to describe
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contractual arrangements whereby a party other than the licensee, i.e., a brokering party, programs time on a broadcast station, oftentimes also selling the advertising during such time and retaining the proceeds. Such leasing agreements may be for either discrete blocks of time for example, two hours every day from 4 p.m. to 6 p.m. or for the complete broadcast capacity of the station i.e., 24 hours a day, seven days a week. The agreements can be for the duration of a single day or for a term of years. Regardless of the title, terms, or duration of such an agreement, the purpose of such a contractual agreement is to give one partythe brokering party or programmerthe right and obligation to program the station licensed to the other partythe licensee or broadcaster.
In this manner, the programmer is able to program a radio or television station that it does not own or hold the license to operate. A time brokerage agreement, also known as a local marketing agreement or LMA, is the sale by a licensee of discrete blocks of time to a broker that supplies the programming to fill that time and sells the commercial spot announcements in it.
28. For the purposes of applying the foreign sponsorship disclosure requirement, a lease constitutes any agreement in which a licensee makes a discrete block of broadcast time on its station available to be programmed by another party in return for some form of compensation. Thus, a licensee makes broadcast time available for purposes of the rule any time the licensee permits the airing on its station of programming either provided, or selected, by the programmer in return for some form of compensation. In describing a lease of time, however, the Commission does not mean to suggest that traditional, short-form advertising time constitutes a lease of airtime for these purposes. The Commission notes that such advertisements, whether they appear in programming aired by the licensee or provided by a third-party programmer pursuant to a lease, remain subject to the Commissions existing sponsorship identification rules under 73.1212f and must contain a clear indication of the sponsor of the advertisement. The Commissions action in this document is focused on agreements by which a third party controls and programs a discrete block of time on a broadcast station. Ultimately, the Commission believes that requiring a disclosure to inform the audience of the source of the programming whenever a foreign governmental entity provides programming to a station for broadcast
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pursuant to the lease of time is wholly consistent with sections 317a1 and 2 of the Act.
29. The Commission finds that its focus on situations where there are leasing agreements between a station and a third party will narrow the application of the disclosure rules appropriately, and ensure that the new disclosure obligations do not extend to situations where there is no evidence of foreign government sponsored programming. For example, the record does not demonstrate that advertisements; archival, stock, or supplemental video footage; or preferential access to filming locations are a significant source of unidentified foreign sponsored programming. In addition, given limitations on the ability of noncommercial educational NCE
stations to engage in leasing arrangements, the Commission expects that NCE stations will rarely, if ever, face the need to address the foreign sponsorship disclosure rules, largely assuaging the concerns of NCE
commenters. Therefore, the Commission finds that limiting the application of its disclosure requirement to the context of leasing agreements obviates a number of issues and suggestions put forth by commenters concerned that the Commission would inadvertently sweep in additional programming that does not carry the same concerns with foreign influence as the unidentified lease of programming time.
30. Programming Aired in Exchange for Consideration Under 317a1 of the Act. As discussed in the NPRM, section 317a1 of the Act requires the licensee of a broadcast station to disclose at the time of broadcast if it has received any form of payment or consideration, either directly or indirectly in exchange for the broadcast of programming. While there is no minimum level of consideration required to trigger the disclosure requirement under this section, the statute does permit the exclusion of services or property furnished without charge or at nominal charge in certain circumstances. One notable exception to the exclusion, however, is the provision of certain material furnished free of charge or at nominal cost as an inducement to air the program and that is related to any political program or program involving the discussion of any controversial issue, as discussed further below. Thus, consistent with the statute and current sponsorship identification rules, the foreign sponsorship identification rules the Commission adopts in this document will be triggered if any money, service, or other valuable consideration is directly or indirectly paid or promised to, or
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