For nearly a century, Congress has required broadcasters to identify the sponsors or providers of broadcast programming airing on their stations.[1] Implicitly such identifications should be truthful and non-deceptive.  That imperative, truthful, non-deceptive identification of sources, is all the more critical to the extent that a program originates from a foreign governmental entity.  Or so the Federal Communications Commission (“the FCC”) believed.  See In Re Sponsorship Identification Requirements for Foreign Government-Provided Programming, Report and Order, FCC 21-42 (April 22, 2021)(adding subsection (j) to 47 C.F.R. §73.1212). 

But the D.C. Circuit has disagreed, in a remarkable opinion, National Assn of Broadcasters v. FCC, No. 21-1171 (July 12, 2022).  The D.C. Circuit’s decision displays an inflexible adherence to statutory text, and an unfamiliarity with the history critical to the statutory provision it was construing. In doing so, the D.C. Circuit panel has precluded the FCC from addressing changed circumstances that affect the relevant regulatory framework and undermined the country’s defense against foreign disinformation campaigns.

Section 317 and the Problem of Foreign Government Broadcast Matter

Section 317

Under the Communications Act of 1934, broadcast license holders have the responsibility for determining the content broadcast on their stations, with an eye toward serving the listening and viewing needs of the audience.  See, Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 389-90 (1969).[2] Section 317 of the Act, 47 U.S.C. §317, requires broadcasters to identify during the relevant broadcast, any unaffiliated persons or entities that provided money, services or other valuable consideration to induce broadcaster to air matter the unaffiliated person or entity provided.  In addition, when broadcast matter concerning public affairs is provided by a person or entity unaffiliated with the broadcaster, the FCC may require broadcasters to identify such persons or entities as the source when the material is broadcast, even if no money, services, or other consideration has been offered as an inducement to air the material.  The first identification provision, a requirement hinging on offering “money, service or other valuable consideration” appears in subsection (a)(1); the second, allowing the FCC to regulate and hinging on public affairs programming, appears in subsection (a)(2). 

Section (c) provides that to enforce section (a)(1) in particular the broadcaster must

exercise reasonable diligence to obtain from its employees, and from other persons with whom it deals directly in connection with any program or program matter for broadcast, information to enable such licensee to make the announcement required by this section.[3] (Emphasis added.)

Subsection (e) explicitly directs the Commission to prescribe appropriate rules and regulations to carry out the provisions of section 317.

Foreign-Government Provided Broadcast Material:  The FCC Acts

By 2020, the FCC had noticed an uptick in foreign governments’ provision of public affairs programming to broadcasters using entities not publicly associated with those governments.  Concerned that broadcasters were failing to fully inform their audiences of the true source of the programming, the Commission specified a six-step process for broadcasters to use in determining whether the broadcast matter offered to them originated from a foreign government. Aside from asking the entity that provided the public affairs programming to identify itself and any links it had to a foreign government, the broadcaster was to check two databases to verify assertion that the entity had no connection with a foreign government.  In particular, the broadcaster was to consult “the Department of Justice’s [Foreign Agents Registration Act] FARA website and the Commission’s [own] semi-annual U.S.-based foreign media outlets reports.”[4] Foreign Government Sponsorship Identification Report and Order, supra, at ¶35.

The National Association of Broadcasters (“the NAB”) objected to these steps, asserting that the Commission lacked authority to require broadcasters to seek information about any entity other than the entity “directly” providing public affairs material. Indeed, in its view the Commission lacked the authority to require broadcasters to take any steps beyond making inquiries of the entity submitting the broadcast matter and the broadcasters’ own employees.  The latter, of course, would know little about the links between the entity submitting the broadcast matter and a foreign government, and the former might not be entirely honest regarding their links to foreign governments.

The D.C. Circuit’s Opinion

The NAB sought review of the new foreign government “sponsorship” identification requirements, more particularly the verification requirement, in the D.C. Circuit.  A D.C. Circuit panel upheld the challenge, unanimously.

For the panel, the decision was oh so simple. It took a mere seven pages to conclude that the FCC simply lacked authority to impose a verification requirement that required broadcasters to do anything other than ask its staff and sponsors for information.  Congress had foreclosed even requiring broadcasters to consult two readily available government databases to determine whether programming content was being supplied by a foreign power.  The Court focused on section 317(c), concluding that its requirement that broadcasters exercise reasonable diligence in determining the source of broadcast matter as required by subsection (a), was expressly limited to ascertaining such information “from its employees, and from other persons with whom it deals directly.”  There was no “due diligence” requirement in general.[5] In its effort to impose a verification requirement, the FCC had simply ignored the limits that the statute places on broadcasters’ narrow duty of inquiry.

The Court rejected the argument “that verifying information’s accuracy is part of making a reasonably diligent effort to obtain that information from a source.”  Citing prior Circuit precedent, Loveday v. FCC, 707 F.2d 1443, 1450 (D.C. Cir. 1983), it opined that section 317(c) “imposes a duty of inquiry, not a duty of investigation” and “does not make broadcasters responsible for the truth of the information they obtain.”[6] 

The Commission pointed to the statutory authorization for it to “prescribe appropriate rules and regulations to carry out” section 317’s provisions, 47 U.S.C. § 317(e), to no avail.  The panel noted, “[a] generic grant of rulemaking authority to fill gaps, however, does not allow the FCC to alter the specific choices Congress made.”  And, as subsection (c) attests, Congress had chosen not only its statutory goal, but also the precise “means for broadcasters to obtain the information necessary to announce who paid for programming: Ask employees and sponsors.”

An Initial Critique

As we shall see in a later post, the panel abstracted statutory text from the statute’s context.  But the decision is problematic even on its own rather abstract terms.  Section 317 literally does not preclude the FCC from adopting additional means to ensure that broadcast licensees accurately identify sponsors.[7]  So it is essentially silent as to any supplemental means to reach the section 317’s basic goal, at least insofar as they do not conflict with the requirements specified.  Such silence can be interpreted in two ways.  The NAB v. FCC panel did not even acknowledge the dilemma.

The Court’s decision rests on the assumption that when Congress sets out a regulatory goal, accurate and non-misleading identification of sponsors of broadcast content, and specifies a means the agency must adopt to achieve that statutory goal, broadcaster inquiries to staff and sponsors, the Commission is limited to that specific means for attaining the goal.  In other words, it assumes that Congress affirmatively seeks to preclude the agency from using any other means to achieve that goal, whether then available or potentially available only in the future, and whether consistent and complementary with the statutory means set forth or not.  That is a highly contestable assumption, particularly in the modern administrative state and given modern congressional practice. [8] 

Indeed, such a mode of interpretation would confront Congress with an unenviable choice that could lead to more, not less, capacious delegations of quasi-legislative powers to agencies.  On the one hand, Congress could set forth both broad statutory goals and some of the means by which agencies are to further those goals.  But it would do so at the risk that courts will conclude that it has thus implicitly barred agencies from deploying any other means, even ones that are complementary and respond to un-envisioned regulatory realities or take advantage of new opportunities (such as the development or relevant databases).  Or Congress could do what critics so often lament,[9] merely set forth broad statutory goals, and thus avoid a court limiting the agency’s flexibility in crafting means to reach those statutory goals. Faced with such a dilemma, Congress might well have no choice but to opt for even more capacious delegations.  

But there is a competing assumption to the one the NAB v. FCC Court embraced.  Congress may specify at least one or more means of achieving a statutory goal because it is dissatisfied with the agency’s laxity (or fears future agency backsliding)[10] and wishes to ensure that the agency makes meaningful progress toward achieving the goal.  Congress may be concerned that simply specifying statutory aims, and leaving the means to be chosen to the agency, can allow the agency to entirely fail to pursue the statutory goals.  In other words, in specifying certain means, Congress may intend to establish not the maximum that the agency can do, but only the minimum, leaving the agency free to pursue other means for achieving the goal that are complementary or supplemental.

This is an all the more reasonable assumption when the congressionally specified means is subject to circumvention by regulatory entities, not to mention foreign governments bent of surreptitiously shaping public opinion, influencing elections, or creating chaos.  Relying on the veracity of sponsors (or fronts for foreign governments) is certainly a hazardous regulatory option. 

And then there is congressional practice.  Congress quite likely focuses on the challenge to the regulatory goal at hand, such as paying employees of licensees to select certain entertainment content, rather than on all conceivable challenges to the regulatory goal that exist presently or may arise in the future, such as foreign government surreptitious provision of broadcasting content.  The implicit Congressional intent to limit agencies only to the precise means expressly included in regulatory statutes would no doubt come as news to Congress.

The Court’s implicit, but largely unacknowledged, presumption is particularly inappropriate in the context of section 317 (especially with respect to the provision of public affairs programming by foreign governments).  First, section 317’s text explicitly states that the Commission shall prescribe “appropriate rules and regulations” to carry out the provisions of the section.  This certainly suggests that the Commission has the authority, and indeed a mandate, to adopt any supplementary means to obtain section 317’s statutory objective — truthful, non-deceptive identification of sponsors or providers of programming.  Many regulatory statutes use the same phraseology.  Reading similar statutes in the crabbed manner that the D.C. Circuit panel read section 317(e) would cripple the modern administrative state.

Second, the panel’s interpretive assumption is particularly odd and impractical in a dynamic field like telecommunications.  Broadcasting is an industry of rapidly changing technology, economics, and business relationships (even more so in 1960, when section 317 was last revised, than now).  Regulation of broadcasting must be nimble to ensure that constant and dynamic change does not render extant approaches to regulation, even those specified by Congress, either obsolete, ineffective, or meaningless.  Moreover, the complexity of the industry facilitates stratagems for intentional circumvention of extant legal requirements.  Supplemental rules may be necessary to combat such stratagems.

Third, regulations geared toward addressing foreign government efforts to influence and shape domestic public opinion, influence elections, or simply sow chaos and dissention in the body politic have major foreign policy and national defense implications.  In these areas, courts have consistently shown deference to the executive branch.[11] The Constitutional text and structure grant the Executive Branch greater powers with respect to such matters. Moreover, the courts suffer from a relative lack of competence in such fields.[12]  Indeed, in the areas of foreign policy and national security, “congressional silence is not to be equated with congressional disapproval.”  Haig v. Agee, 453 U.S. 280, 291 (1981).  Such considerations alone suggest a less wooden view of section 317 is appropriate when it comes to regulations directed at combatting foreign governments’ attempts to influence domestic public opinion by means of unattributed programming broadcast over U.S. airwaves.

A Broader Critique: Bringing in Context

There is a rich context relevant to the interpretive questions at issue in NAB v. FCC, a context which the panel largely abstracted away.  The context is interesting in its own right, encompassing a range of people from Dick Clark to Vladimir Putin.  But consideration of the context also provides the basis for a second, perhaps more devastating attack on the panel’s decision. 

As I will show in my next post in this series, subsection (c) was a response to a particular problem far afield from public affairs programming and foreign efforts to influence U.S. public opinion.  It was a response to music promoters offering money or other consideration to disc jockeys to play their records during the disc jockey’s radio programs — it was about influencing the country’s taste in music (toward “rock and roll” and away from more established kinds of music) rather than its political attitudes.  In short, subsection (c) was crafted to address the use of “payola” to influence the selection of entertainment programming.  Indeed, at the time it crafted subsection (c), Congress appears to have been quite aware of the different challenges posed by payments to station employees for content decisions on entertainment programming and provision of election-related and other public affairs content for free or at nominal cost. Thus, Congress distinguished section 317(a)(1)’s mandate with regard to the former from section 317(a)(2)’s grant of permission for the FCC to regulate with regard to the latter.

Lacking familiarity with that history, the D.C. Circuit panel has constrained FCC efforts to address one problem, foreign governments provision of public affairs programming designed to influence U.S. public opinion, by means targeted toward addressing an entirely different, and frankly less serious problem, “payola” to broadcasters programming employees that influenced their selection of entertainment content.

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[1] In Re Sponsorship Identification Requirements for Foreign Government-Provided Programming, Notice of Proposed Rulemaking, FCC 20-146 ¶¶4, 57 (Oct. 26, 2020) (describing “sponsor identification” as a “bedrock principle”); In Re Sponsorship Identification Requirements for Foreign Government-Provided Programming, Report and Order, FCC 21-42 ¶¶4-5 (April 22, 2021).

About this post’s title, “[f]or decades, first on radio and then on television, the phrase[] ‘And now a word from our sponsor’ was as commonplace as canned laughter.”  Stuart Elliott, And Now a Word From Our Sponsor. Our Only Sponsor, N,Y. TIMES, C13 (Dec. 5, 2005).

[2] For example, the FCC long maintained “chain broadcasting rules” limiting network-affiliation agreements so as to preserve network affiliated station’s programming discretion.  See HARVEY L. ZUCKERMAN, ET AL., MODERN COMMUNICATIONS LAW §14.4 at 1210-12 (1999): Note, The Impact of the FCC’s Chain Broadcasting Rules, 60 YALE L.J. 78, 78-79 & n.4 (1951)(available on JSTOR at https://doi.org/10.2307/793633).

[3] The identification obligation encompassed in subsection (a)(2) is not required by section 317, which merely permits the FCC to impose such a requirement. 47 U.S.C. §317(a)(2)(“[n]othing in this section shall preclude the Commission from requiring” (emphasis added)).

[4] “U.S.-based foreign media outlets” must periodically file reports with the Commission and, in turn, the Commission must provide a report to Congress summarizing those filings.  Foreign Government Sponsorship Identification Report and Order, supra, at ¶19, n.58.

[5] In other words there is no due diligence “in the air,” so to speak.  Palsgraf v Long Is. R.R. Co., 248 NY 339, 340 (1928).

[6] Loveday involved claims that an entity providing broadcast matter regarding smoking was related to a tobacco company.  The broadcaster received an undocumented report asserting the existence of such a link, the entity providing the broadcast matter provided an undocumented denial.  707 F.2d at 1445-46, 1449. Both the FCC and the D.C. Circuit concluded that no further inquiry was warranted.  Id. at 1447, 1449. The D.C. Circuit went on to say that in its view the FCC could not have come to a different conclusion.  Id. at 1449. There was, of course, no database for the broadcaster to check. Nor did the case involve a foreign government’s effort to influence American public opinion.

And from the perspective of interpretive technique, Loveday is a far cry from the NAB v. FCC panel’s a-contextual textualist approach.  Writing the Court in Loveday, Judge Bork takes a deep dive into the legislative history of section 317 and its subsequent amendment, the history of the FCC’s exercise of the authority conferred, practical considerations, and constitutional considerations to arrive at his interpretation.  Id. at 1449-57 (legislative and administrative history), 1457-59 (practical and constitutional considerations). This is not to say that Judge Bork arrived at the right conclusion.

[7] Indeed, the statute literally does not place any constraints on the FCC’s power to require broadcasters to take steps to fully and accurately the source of public affairs broadcasting matter offered by persons or entities unaffiliated with the broadcaster, see 47 U.S.C. §317(a)(2):

Nothing in this section shall preclude the Commission from requiring that an appropriate announcement shall be made at the time of the broadcast in the case of any political program or any program involving the discussion of any controversial issue for which any films, records, transcriptions, talent, scripts, or other material or service of any kind have been furnished, without charge or at a nominal charge, directly or indirectly, as an inducement to the broadcast of such program. (Emphasis added)

[8] The panel essentially adopted a strong form of the expressio unius est exclusion alterius canon of interpretation. See, WILLIAM D. POPKIN, A DICTIONARY OF STATUTORY INTERPRETATION 88-91 (2007)(describing and critiquing canon).  Such an approach might be appropriate for comprehensive statutes creating rights and obligations intended to be vindicated by the courts in adjudicating private rights of action.  It is far less appropriate for regulatory regimes committed to administrative agencies for implementation.

[9] See, e.g., Gundy v. U.S., 139 S. Ct. 2116, 2131, 2133-41 (2019)(Gorsuch, J., dissenting).

[10] See Sidney A. Shapiro & Robert L. Glicksman, Congress, the Supreme Court, and the Quiet Revolution in Administrative Law, 1988 DUKE L.J. 819 (noting a trend in statutes adopted in the 1980’s toward tightening statutory control over the content and timetable of administrative implementation).

[11] See, e.g., U.S. v. Curtiss-Wright Export Corp., 299 U.S. 304, 321-22 (1936)(delegation doctrine); Zemel v. Rusk, 381 U.S. 1, 17 (1965); INS v. Aguirre-Aguirre, 526 U.S. 415, 425 (1999)(Chevron deference); see generally, Harisiades v. Shaughnessy, 342 U.S. 580, 589 (1952); Trump v. Hawaii, 138 S. Ct. 2392, 2409, 2418-19 (2018).  For an in-depth discussion and critique of the particularly strong form of Chevron and other forms of deference applicable in the foreign affairs context, see Curtis A. Bradley, ‘Chevron’ Deference and Foreign Affairs, 86 VA. L. REV. 649 (2000).  To see how these issues have played out more recently, see Trump v. Hawaii, supra, at 2411-12 (discussing where statutory provisions did not implicitly limit the President’s powers under a broadly-worded authorization to act).

[12] See, e.g., Chicago & Southern Air Lines, Inc. v. Waterman S.S. Corp., 333 U.S. 103, 111 (1948)(decisions related to foreign policy and national defense “are decisions of a kind for which the Judiciary has neither aptitude, facilities nor responsibility and have long been held to belong in the domain of political power not subject to judicial intrusion or inquiry”); Eric A. Posner & Cass R. Sunstein, Chevronizing Foreign Relations Law, 116 YALE L.J. 1170, 1202 (2007).