Bloomberg News

TV Stations Must Disclose Political Ad Buys on Internet

April 27, 2012

U.S. television broadcasters must disclose details on a public website of political advertising purchases, including rates paid, under rules approved by the Federal Communications Commission.

The requirement will apply initially to 200 stations that are affiliates of the four largest U.S. networks, the FCC decided today in a 2-1 vote, with the agency’s lone Republican saying he objected to posting rates paid for individual ads. The requirement was part of a broader disclosure requirement that passed 3-0.

“Our hope and expectation is it will take effect during this election,” William Lake, the FCC’s media bureau chief, said at a press conference in Washington.

The rule will take effect 30 days after it’s approved by the Office of Management and Budget, a White House arm, Lake said. It goes into effect for the other 1,800 U.S. broadcast stations in two years, he said.

Broadcast stations now keep records of political ads on paper at their offices, where they are open to public inspection. Today’s vote requires the records to made available on a website to be run by the FCC.

The new rule covers about 60 percent of all expected 2012 political advertising purchased locally or regionally, where the most televised political ads air, according to a note today by Ken Goldstein and Elizabeth Wilner of Kantar Media’s CMAG, which tracks election spending.

‘Apple Pie’

“The question in front of us is whether, in the 21st century, ‘available for public inspection’ means stuck in office filing cabinets or available online,” FCC Chairman Julius Genachowski, a Democrat, said. “Or as one person put it, ‘Who can be against mom, apple pie and the American way of transparency?’”

Republican Commissioner Robert McDowell said he agrees with more disclosure without posting “commercially sensitive” information.

“Posting rate information online may cause market distortions, including price signaling, which can lead to rates mysteriously rising in some markets,” McDowell said.

Stations must offer campaign advertisements low rates, and broadcasters are concerned that non-political ad-buyers will be able to look online and see cheaper rates and demand the same prices, Goldstein and Wilner said.

Competitive Standing

Buys for 45 percent of presidential campaign ads would have been disclosed online if the FCC’s requirement went into effect on this date in 2008, Goldstein and Wilner said. The others were made in smaller markets where stations wouldn’t have had to post the buys online, they said.

The National Association of Broadcasters, in an e-mailed statement, said it disagrees with the FCC’s move.

“By forcing broadcasters to be the only medium to disclose on the Internet our political advertising rates, the FCC jeopardizes the competitive standing of stations,” said Dennis Wharton, a spokesman for the Washington-based trade group. Members include the Walt Disney Co. (DIS:US)’s ABC, News Corp. (NWSA:US)’s Fox, Comcast Corp. (CMCSA:US)’s NBC and CBS Corp. (CBS:US)

Representative Henry Waxman, a California Democrat, praised the FCC’s move. “The American people have a right to know how the public airwaves are being used,” he said in an e-mailed statement.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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