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Federal Register / Vol. 86, No. 115 / Thursday, June 17, 2021 / Rules and Regulations charged or accepted by a broadcast station in the context of a lease of broadcast time in exchange for the airing of material provided by a foreign governmental entity.
31. While the Commission expects that such consideration received by the station directly will be apparent from the terms and exercise of any lease agreement, as discussed below, the Commission notes that under section 507 of the Act, parties involved in the production, preparation, or supply of a program or program material that is intended to be aired on a broadcast station also have an obligation to disclose to their employer or to the party for whom the programming is being produced or to the station licensee, if they have accepted or agreed to accept, or paid or agreed to pay, any money or valuable consideration for inclusion of any program or material.
Thus, as detailed further below, the Commission requires that licensees will exercise reasonable diligence to ascertain whether consideration has been provided in exchange for the lease of airtime or in exchange for the airing of materials directly or indirectly to the station, as well as whether anyone involved in the production, preparation, or supply of the material has received compensation, and that an appropriate disclosure will be made about the involvement of any foreign governmental entity. The Commission discusses what this obligation means for the licensee and lessee below.
32. Programming Provided for Free as an Inducement to Air Under 317a2.
In addition to the payment of monetary or other valuable consideration, section 317a2 of the Act establishes that a sponsorship disclosure may also be required in some circumstances, even if the only consideration being offered to the station in exchange for the airing of the material is the programming itself. As stated above, the Commission believes that, as a practical matter, leasing agreements will involve the exchange of money or other valuable consideration from the programmer to the licensee. It is not typical for a station to enter into an agreement for the lease of airtime in exchange solely for the promise of free programming to be aired on the station. However, to account for such a circumstance, and consistent with the discussion in the NPRM, the Commission finds it is equally important that the foreign sponsorship identification rules apply in that instance, should such a circumstance arise. Section 317a2 provides that a disclosure is required at the time of broadcast in the case of any political program or any program involving the
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discussion of a controversial issue if the program itself was furnished free of charge, or at nominal cost, as an inducement for its broadcast. The Commission has previously interpreted political program in the context of section 317a2 to generally involve programming seeking to persuade or dissuade the American public on a given political candidate or policy issue.
33. While the NPRM tentatively concluded that all programming provided by a foreign governmental entity should be treated as a political program pursuant to section 317a2
of the Act, and, thus, the provision of such programming in and of itself could be sufficient to trigger a disclosure, based on the record before us and upon further consideration, the Commission declines to expand the definition of political program in this context. Rather, consistent with the approach in this Order to narrow the scope of the rules to target more appropriately the reported instances of undisclosed foreign governmental programming, the Commission believes it is unnecessary to expand the interpretation of political program and elect to apply the existing interpretation of that term at this time. Similarly, for purposes of the foreign sponsorship identification rules the Commission will continue to interpret any program involving the discussion of any controversial issue under section 317a2 in a manner consistent with precedent. The Commission finds that applying the existing definition of political program consistent with long-standing Commission precedent in this area addresses many of the concerns raised by commenters about various types of programming that inadvertently might be swept into the ambit the new foreign sponsorship identification rules. The Commission also clarifies that its new rules do not override the guidance provided in the Commissions 1963
seminal order and accompanying public notice about what would be considered an inducement to broadcast programming.
34. Additionally, similar to the analysis above, the Commission finds that section 507 of the Act applies in this context as well. Specifically, the Commission believes it is reasonable to consider the provision of any political program or any program involving the discussion of a controversial issue by a foreign governmental entity to a party in the distribution chain for no cost and as an inducement to air that material on a broadcast station to be service or other valuable consideration under the terms of section 507. Accordingly, in the event that an entity involved in the
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production, preparation, or supply of programming that is intended to be aired on a station has received any political program or any program involving the discussion of a controversial issue from a foreign governmental entity for free, or at nominal charge, as an inducement for its broadcast, the Commission finds that under section 507 it must disclose that fact to its employer, the person for whom the program is being produced, or the licensee of the station and will require an appropriate foreign sponsorship identification. The Commission discusses what this obligation means for the licensee and lessee below.
35. Reasonable Diligence. The Commission adopts its tentative conclusion from the NPRM that the final responsibility for any necessary foreign sponsorship identification disclosure rests with the licensee in accordance with the statutory scheme. Accordingly, the Commission finds that a broadcast station licensee must exercise reasonable diligence to determine if an entity within the scope addressed abovei.e. an entity or individual that is purchasing airtime on the station or providing any political program or any program involving the discussion of a controversial issue free of charge as an inducement to broadcast such material on the stationis a foreign governmental entity, such that a disclosure is required under the foreign sponsorship identification rules. As explained below, the Commission concludes that such diligence requires that the licensee must, at a minimum:
1 Inform the lessee at the time of agreement and at renewal of the foreign sponsorship disclosure requirement;
2 Inquire of the lessee at the time of agreement and at renewal whether it falls into any of the categories that qualify it as a foreign governmental entity;
3 Inquire of the lessee at the time of agreement and at renewal whether it knows if anyone further back in the chain of producing/distributing the programming that will be aired pursuant to the lease agreement, or a sub-lease, qualifies as a foreign governmental entity and has provided some type of inducement to air the programming;
4 Independently confirm the lessees status, at the time of agreement and at renewal by consulting the Department of Justices FARA website and the Commissions semi-annual U.S.-based foreign media outlets reports for the lessees name. This need only be done if the lessee has not already disclosed that it falls into one of the covered categories and that there is no separate
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