Identifying TV Political and Issue Ad Sponsors in the Digital Age

Identifying TV Political and Issue Ad Sponsors in the Digital Age

Identifying TV Political and
September 9, 2020
Issue Ad Sponsors in the Digital Age
Dana A. Scherer
Since the 1930s, both Congress and the Federal Communications Commission (FCC) have
Specialist in
imposed specific requirements on the transmission of political and issue advertising by
Telecommunications
broadcasters. These rules, which now apply to broadcast radio and television stations, cable and
Policy
satellite television distributors, and satellite radio services, mandate that the sponsors of political

and issue ads be clearly identified within each announcement and that media organizations
maintain files of political advertisers’ requests for advertising time and make those files available

for public inspection.
Pursuant to Section 507 of the Communications Act (47 U.S.C. §508), any party who pays to insert, or accepts payment to
insert, covert promotions has an obligation to report this arrangement to the next party in the chain and ultimately to the
broadcast licensee so it can air an announcement. The provision expressly covers broadcast licensees’ employees as well;
they must “disclose the fact of such acceptance or payment or agreement to” their employers.
Two presumptions underlie the sponsorship identification laws and rules pertaining to political candidates and issue
advocates. The first is that the electronic media regulated by the FCC are the distributors of advertisements and programs on
viewers’ television sets. The second is that employees of the regulated media entity, via human interaction with political
campaigns and issue advocacy organizations or their advertising agencies, have ultimate control over the chain of advertising
distribution.
However, both of these presumptions may no longer be valid. An increasing share of television viewing, and advertising,
occurs on video services delivered over the internet by entities that are not subject to FCC regulation. At the same time,
technological changes have enabled buyers and sellers of television advertising to complete their transactions without human
interaction, using software to perform such tasks as planning advertising placements and delivering and airing the
advertisements. This method of buying and selling advertising, known as “programmatic,” may replace the roles of
employees who, under law, are required to disclose sponsorship by political or is sue advertisers.
Increasingly, advertisers are making use of addressable advertising, which enables different ads to be seen by different people
who are watching the same program. So long as addressable advertising is sold via cable and satellite operators’ connections
to viewers’ set-top boxes, this form of political and issue advertising is covered by current laws. However, when an entity
other than an FCC licensee or cable operator delivers targeted political and issue advertising to TVs connected to the internet
(“connected TVs”), sponsors need not disclose their identities to viewers.
Foreign interference during the 2016 election cycle—and widely reported to be an ongoing threat—has renewed
congressional attention to campaign and election security and raised new questions about the nature and extent of the federal
government’s role in this policy area. In an April 2020 report the Senate Select Committee on Intelligence recommended that
Congress examine legislative approaches to ensuring Americans know the sources of online political advertisements. While
the House of Representatives passed some of the suggested approaches in March 2019 as part of the For the People Act of
2019, H.R. 1, the Senate has not considered similar legislation.
With respect to public policy, many political and issue commercials delivered over television are more akin to online
advertisements, which are not subject to FCC oversight, than to broadcast, cable, and satellite advertisements. To ensure that
sponsors of political and issue advertisements who target television viewers disclose their identities, Congress would need t o
enact legislation applying disclosure laws to media and advertising technology entities that are not currently regulated by the
FCC.
Several bills introduced in the 116th Congress address the sponsorship of political and issue advertisements in the digital age.
Some of them would amend the Federal Election Campaign Act. Whether or not the sponsorship requirements for political
and issue advertisements online might also explicitly cover connected TVs and advertising-supported online video services
depends on whether those media are covered in the bills’ definitions of “digital communicat ions” or “online platform.”

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Contents
Overview ....................................................................................................................... 1
Political and Issue Advertising on Regulated Electronic Media............................................... 2
Sponsorship Laws General y ....................................................................................... 2
Laws and Rules for Broadcast Radio and Television Stations ...................................... 3
Rules for Cable .................................................................................................... 3
Political Candidates ................................................................................................... 4
On-Air Sponsorship Identification in Political Candidate Advertisements...................... 4
Political File Requirements .................................................................................... 6
Issue Advertising ....................................................................................................... 6
On-Air Sponsorship Identification in Issue Advertisements ......................................... 7
Public File Requirements....................................................................................... 8
Disclosure in Targeted Television Advertising ................................................................... 12
Targeted Television Advertising ................................................................................. 13
Addressable Advertising...................................................................................... 14
Connected TVs and AVODs: New Unregulated Entrants .......................................... 15
A Different Advertising Sales Process ......................................................................... 16
Implications for Congress............................................................................................... 19
Media Outlets Covered ............................................................................................. 20
Programmatic Advertising Supply Chain ..................................................................... 20
Monitoring by the Members of the Public.................................................................... 21
Related Bills Introduced in 116th Congress ........................................................................ 21
Expanded FCC Involvement in Disclosure Requirements .............................................. 22
Disclaimer Requirements for Online Media ................................................................. 22
Limitations on Targeted Political and Issue Advertising ................................................. 24

Figures
Figure 1. Forecasted 2020 Federal Political Campaign Advertising Spending by Medium ........ 13
Figure 2. Daily Hours and Minutes of Usage ..................................................................... 15
Figure 3. Direct Television Advertising Sales Process ......................................................... 17
Figure 4. Programmatic Television Advertising Sales Process .............................................. 18

Tables
Table 1. Political and Issue Sponsorship Identification Requirements by Type of Media ........... 11

Table A-1. Key Dates Regarding Sponsored Content Laws and Regulations ........................... 26

Appendixes
Appendix. History of Sponsorship Laws and Federal Regulations......................................... 26
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Contacts
Author Information ....................................................................................................... 29

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Overview
For more than 200 years, beginning with the first major postal law enacted in 1792, Congress
has considered the availability of news to be crucial to an informed public, and enacted laws to
encourage the dissemination of news sources.1 Sometimes, however, interests promoting
political candidates or ideas prefer to mask their identities in order to enhance the apparent
credibility of their messages. To maximize transparency, both Congress and the Federal
Communications Commission (FCC) have required the traditional electronic media—broadcast
radio and television stations, cable and satel ite television distributors, and satel ite radio
services—to distinguish content supplied and paid for by third parties from content created by
media organizations themselves.2 In particular, electronic media outlets must identify and
maintain records listing sponsors of advertisements for political candidates and advertisements
concerning controversial issues of national importance. Table A-1 provides a historical timeline
of these laws and regulations.3
Traditional broadcast television, with prescheduled programs available for viewing on television
sets, remains the most popular medium for political advertisements. Over the last 10 years,
however, fewer people have been watching scheduled television programs. Instead, consumers
have shifted their attention to programming streamed over the internet and available for listening
or viewing at a time of the user’s choice. Advertisers on behalf of candidates and issue
advertising sponsors are increasingly purchasing spots on these newer media.
Although these nontraditional sources of video programming are available on television sets
connected to the internet, they are general y not subject to communications laws and FCC
regulations. This report examines how changes in television viewing and advertising sales
practices are making current advertising disclosure rules, which are grounded on the federal
government’s authority to regulate the airwaves and cable operators, increasingly less effective.4
It does not cover campaign finance policy and legal issues that also could be relevant for
advertising that refers to federal candidates or elections.5

1 U.S. Postal Service, “Postage Rates for Periodicals: a Narrative History,” https://about.usps.com/who-we-are/postal-
history/periodicals-postage-history.htm#1.
2 In addition, the Federal Election Commission and Federal Election Campaign Act (52 U.S.C. §§30101-30145)
govern disclosure by political candidates and organizations. For additional information, see
CRS In Focus IF10758, Online Political Advertising: Disclaim ers and Policy Issues, by R. Sam Garrett .
3 Table A-1 includes sponsorship identification laws for advertisers generally, of which political and issue advertisers
are a subset. It also includes laws related to identification of sponsored content in print media, since they formed the
basis for sponsorship laws covering electronic media.
4 For information about disclosure requirements enforced by the Federal Election Commission, see CRS In Focus
IF11398, Cam paign Finance Law: Disclosure and Disclaim er Requirem ents for Political Cam paign Advertising , by
L. Paige Whitaker, and CRS Report R41542, The State of Cam paign Finance Policy: Recent Developm ents and Issues
for Congress, by R. Sam Garrett .
5 For additional discussion, see, for example, CRS In Focus IF10758, Online Political Advertising: Disclaimers and
Policy Issues, by R. Sam Garrett ; CRS In Focus IF11398, Cam paign Finance Law: Disclosure and Disclaim er
Requirem ents for Political Cam paign Advertising , by L. Paige Whitaker; CRS In Focus IF11034, Cam paign Finance:
Key Policy and Constitutional Issues, by R. Sam Garrett and L. Paige Whitaker; CRS Report R41542, The State of
Cam paign Finance Policy: Recent Developm ents and Issues for Congress, by R. Sam Garrett; and CRS Report
R45320, Cam paign Finance Law: An Analysis of Key Issues, Recent Developm ents, and Constitutional
Considerations for Legislation, by L. Paige Whitaker.
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Political and Issue Advertising on
Regulated Electronic Media
The FCC has regulatory authority over media organizations that need its permission to use
spectrum, that is, airwaves. These include broadcast radio and television licensees, satel ite
digital audio radio services (SDARS), and direct broadcast satel ite (DBS) television operators.6
In addition, the FCC has jurisdiction over cable operators.7 The FCC requires such media
organizations to include on-air disclosures of sponsorship when they transmit content sponsored
by commercial, political, or issue-oriented entities. “Sponsored,” in this context, means “matter
broadcast by any [traditional electronic media outlets] for which any money, service or other
valuable consideration is directly or indirectly paid, or promised to or charged or accepted by,
the [traditional electronic media outlets].”8
Sponsorship Laws Generally
Commercial sponsors are business entities, including political campaigns, which market
products and services or promote candidates or issues. The Communications Act of 1934, as
amended, and FCC rules require broadcast radio and television stations to disclose commercial
sponsors on air, and cable operators to disclose commercial sponsors under limited
circumstances.9 As discussed in “Political Candidates” and “Issue Advertising,” the
Communications Act also permits the FCC to create more stringent sponsorship identification
rules for political and issue advertisements or programs.
According to the FCC, two policy goals of the sponsorship identification laws and regulations
are (1) preventing sources of programming from deceiving viewers and listeners, and (2)
protecting competition among advertisers by preventing sponsors from gaining unfair advantage
by paying stations to present promotional messages as news or editorial content without
appropriate disclosures.10

6 SiriusXM is an example of a satellite digital audio radio service. DISH Network and AT &T Corp.’s DirecT V are
examples of DBS operators.
7 As described in CRS Report R46147, The Cable Franchising Authority of State and Local Governments and the
Com m unications Act, by Chris D. Linebaugh and Eric N. Holmes, before Congress gave the FCC direct authority to
regulate cable television operators in 1984, the U.S. Supreme Court held in 1968 that the Communications Act gave
the FCC indirect aut hority to regulate what was “ reasonably ancillary” to its responsibilities for regulating broadcast
television under T itle III. For more information about the FCC’s authority to regulate cable operators, see CRS Report
R46077, Potential Effect of FCC Rules on State and Local Video Franchising Authorities, by Dana A. Scherer.
8 See Section 317(a) of the Communications Act of 1934, as amended, 47 U.S.C. §317(a). While this statutory
definition of “sponsor” applies only to broadcast radio and television stations, FCC rules with similar definitions of
“sponsor” apply to cable television operators, as well as SDARS and DBS operators. In addition, while this portion of
the statute refers to “any radio station” in its description of media, subsequent interpretations by the FCC and
Congress, in response to post -1934 technological developments, broadened the scope to include television stations,
cable operators, and satellite television and radio operators.
9 47 U.S.C. §317.
10 Federal Communications Commission, “Sinclair Broadcast Group, Order, FCC 20 -59,” May 20, 2020, p. 9 at
https://www.fcc.gov/document/sinclair-pays-48-million-and-settles-all-pending-investigations.
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Laws and Rules for Broadcast Radio and Television Stations
While origins of the federal statute date back to the 1927 Radio Act, in 1960 Congress
broadened the FCC’s authority to determine when broadcasters must disclose commercial
sponsorship.11 P.L. 86-752 gave the FCC discretion to develop or suspend rules in cases when it
determines that the public interest, convenience, or necessity does not require the broadcasting
of sponsorship announcements.12 In April 2020, the FCC used this discretion to waive the
sponsorship identification requirement for commercial entities donating commercial advertising
time that they can no longer use for the broadcast of public service announcements related to
Coronavirus Disease 2019 (COVID-19).13
At the same time, Congress extended the legal obligation to disclose covert promotions beyond
the broadcast licensees to parties involved in production, while requiring each licensee to
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.14
To assist stations in exercising “reasonable diligence,” Congress added a new Section 507 to the
Communications Act (47 U.S.C. §508), imposing the disclosure requirement on anyone involved
in placing promotions in broadcast programs. Violators are subject to criminal penalties—a
maximum $10,000 fine and/or a maximum one-year prison term.
Section 507 encompassed the entire chain of program production and distribution; any party who
pays to insert, or accepts payment to insert, covert promotions has an obligation to report this
arrangement to the next party in the chain and ultimately to the broadcast licensee so it can air an
announcement.15 The provision expressly covers employees as wel ; they must “disclose the fact
of such acceptance or payment or agreement to” their employers.
Rules for Cable
FCC regulations related to content on cable systems distinguish between programming subject to
the “exclusive control” of the cable operator, which the agency cal s “origination cablecasting,”
and programming that the cable operator does not control.16 According to the treatise
Telecommunications and Cable Regulation,
While at first glance it appears that these rules are relevant only where the cable
operator itself originates local programming, the definition of “origination cablecasting”
in the FCC’s rules is ambiguous.
Any programming carried on a cable channel other than retransmitted broadcast signals
or access channel programming, including pay channels such as Showtime or Home Box

11 Richard Kielbowicz and Linda Lawson, “Unmasking Hidden Commercials in Broadcasting: Origins of the
Sponsorship Identification Regulations, 1927 - 1963,” Federal Com m unications Law Journal, vol. 56 (March 2004),
pp. 327, 354. [Hereinafter “Kielbowicz and Lawson.”]
12 47 U.S.C. §317(d).
13 Federal Communications Commission, “Sponsorship Identification Requirements, Order, DA 20 -376,” April 3,
2020 at https://www.fcc.gov/document/fcc-waives-sponsorship-id-requirements-covid-19-psas.
14 47 U.S.C. §317(c).
15 Kielbowicz and Lawson, p. 361.
16 Henry Geller and Donna Lampert, “Cable, Content Regulation, and the First Amendment,” Federal
Com m unications Law Journal, vol. 32, no. 3 (Spring 1983), pp. 603, 605. [Hereinafter “ Geller and Lampert.”]
47 C.F.R. §76.5(p).
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Office, or cable news networks such as CNN, could conceivably be deemed subject to the
“exclusive control” of the cable operator and therefore within the definition of “originated
programming” to which the rules apply.17
The FCC’s sponsorship identification rules pertaining to cable operators “engaged in origination
cablecasting” are similar to the FCC’s sponsorship identification rules for broadcasters. Cable
operators must identify the sponsors of programming for which a cable operator has received
consideration at the time of the cablecast, and must exercise reasonable diligence to obtain
information to make the required announcement of sponsorship.18
The requirement to disclose sponsorship does not apply to cable operators under the four
circumstances under which federal law prohibits them from exercising editorial control: (1) use
by public, educational, or local government entities;19 (2) use by persons who lease access to a
cable channel;20 (3) use by commercial broadcast television stations that opt for mandatory
carriage;21 and (4) use by noncommercial educational broadcast television stations.22
Political Candidates
The Communications Act and FCC rules contain detailed provisions governing requests for time
by political candidates. The FCC’s political programming obligations fal within four basic
categories: (1) requiring sponsorship identification; (2) maintaining a political file; (3) charging
candidates no more than the lowest price (“lowest unit rate”) for political advertising; and (4)
providing equal opportunities to opposing candidates.23
On-Air Sponsorship Identification in Political Candidate Advertisements
Both FCC rules and the Communications Act have on-air disclosure requirements pertaining to
advertisements for political candidates. The FCC rules, dating to the 1940s, make broadcast
stations and cable operators responsible for airing the disclosures. The statute, which Congress
enacted in 2002, makes political candidates responsible for including these disclosures in

17 Womble Bond Dixon LLP, “Ch. 8.07 Fairness Doctrin e and Political Broadcasting,” in Telecommunications
Regulation: Cable, Broadcasting, Satellite, and the Internet, vol. 1 (New York: Matthew Bender & Company, 2020).
18 47 C.F.R. §76.1615.
19 47 U.S.C. §531(e). A cable operator may refuse to transmit any public access program or portion of a public access
program that contains obscenity, indecency, or nudity. For additional information about these types of programs, see
CRS Report R46077, Potential Effect of FCC Rules on State and Local Video Franchising Authorities, by Dana A.
Scherer.
20 47 U.S.C. §532(c)(2).
21 47 U.S.C. §534(b)(3). For additional information about this option for commercial broadcast television stations, see
CRS Report R46023, Copyright Act and Com m unications Act Changes in 2019 Related to Television , by Dana A.
Scherer.
22 47 U.S.C. §535(g)(1).
23 T he FCC’s rules regarding equal access for candidates apply to broadcast radio and television stations (47 C.F.R.
§73.1941), cable operators (47 C.F.R. §76.205), DBS providers (47 C.F.R. §75.2701(b)), and SDARS (47 C.F.R.
§75.2702(a)). Likewise, the FCC’s rules requiring media organizations to charge political candidates the lowest unit
rate for political commercials during specified periods apply to broadcast radio and television stations (47 C.F.R.
§73.1942), cable operators (47 C.F.R. §76.206), DBS operators (47 C.F.R. §75.2701(c), and SDARS (47 C.F.R.
§75.2702(a)).
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advertisements in order to be eligible to demand the lowest price available from broadcast
stations, cable operators, and satel ite operators.24
FCC Regulations Governing Broadcast Stations and Cable Operators
The FCC first adopted rules specifical y requiring AM broadcast radio stations to include the
identification of sponsors of political advertisements in 1944, as part of its general
implementation of Section 317 of the Communications Act.25 As described in Table A-1, the
agency extended those requirements to broadcast television stations in 1945.26 It extended the
rules to cable operators “engaged in origination cablecasting” in 1972.27
Statute Governing Broadcast Stations and Cable Operators
Section 315(a) of the Communications Act, which dates back to 1934, directs broadcast stations
to provide opposing candidates with equal access to their facilities. In 1972, Congress added
Section 315(b), requiring broadcast stations to charge political candidates the lowest unit rate of
the station for the same class and amount of time for the same period for advertising during the
45 days preceding the date of a primary or primary runoff election and during the 60 days
preceding the date of a general or special election in which such person is a candidate.28 In 1974,
Congress further amended Section 315 to require that cable operators, then known as
“community antenna television systems,” provide advertising time to candidates at the lowest
unit rate.29
In 2002, the Bipartisan Campaign Reform Act (P.L. 107-155) further amended Section 315 by
limiting candidates’ eligibility to receive the lowest unit rate for political advertisements.
Specifical y, a candidate for federal office must certify to the station or cable operator that the ad
wil not directly refer to an opponent unless it includes a photo of the candidate sponsoring the
ad (on television) and a statement of the candidate’s approval displayed on television and spoken
by the candidate on radio. Both items must appear in the ad for no less than four seconds.30

24 In addition, federal campaign finance law sets forth disclosure and disclaimer requirements for certain types of
political campaign advertisements. In the context of campaign finance, the term disclosure refers to periodic reporting
to the Federal Election Commission (FEC) of funds received and spent, and the term disclaim er refers to an
attribution statement that appears on a campaign-related communication. See CRS In Focus IF11398, Cam paign
Finance Law: Disclosure and Disclaim er Requirem ents for Political Cam paign Advertising , by L. Paige Whitaker.
25 Federal Communications Commission, “Rules Governing Standard and High Frequency Broadcast Stations:
Announcement of Sponsored Programs,” 9 Federal Register 14734, December 19, 1944.
26 1945 Supplement to the Code of Federal Regulations of the United States of America (1946). [Codified at that time
as §3.289 (for FM stations) and §3.689 (for broadcast television stations).] T he FCC did not explain its rationale for
expanding the applicability of these rules. In 1946, Congress enacted the Administ rative Procedure Act (P.L. 49-404)
to increase the transparency and predictability of agency rulemaking. CRS Report RL32240, The Federal Rulem aking
Process: An Overview, coordinated by Maeve P. Carey.
27 Federal Communications Commission, “Cable T elevision Report and Order, FCC 72-108,” 36 FCC Reports, 2nd
Series 143, 195, 239, February 3, 1972 (1972 Cable Order).
28 P.L. 92-225. 47 U.S.C. §315(b).
29 P.L. 93-443, §402(c) (“Federal Election Campaign Amendments of 1974”).
30 47 U.S.C. §315(b)(2).
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FCC Rules and Statutes Governing Satellite Television Operators
In 1992, Congress enacted the Cable Television Consumer Protection and Competition Act of
1992 (P.L. 102-385). That law created a new Section 335 of the Communications Act, which
directed the FCC to impose public interest requirements on DBS operators.
The FCC adopted rules accordingly in 1998.31 In 2016, the FCC stated that because of Section
335, the 2002 amendments to Section 315 setting conditions under which candidates can
demand the lowest unit rate for advertisements from broadcasters and cable operators apply to
SDARS and DBS operators as wel .32
Political File Requirements
The FCC first required broadcast radio stations to maintain public records of political
candidates’ requests for advertising time in 1938.33 That initial rule is essential y identical to the
agency’s current political file regulation. The FCC requires stations to make the file available for
public inspection and include both candidate requests for time and stations’ handling of those
requests, including amounts paid for the broadcast time.34 The FCC extended the political file
requirements to FM radio and broadcast television stations in 1945.35
In 1974, the FCC adopted a public inspection file requirement for cable, including a requirement
to retain political file material.36 The agency imposed political advertising requirements on
SDARS licensees in 1997, concluding that the rationale behind imposing these requirements on
broadcasters applies also to satel ite radio. It adopted political advertising file requirements for
DBS operators, including public inspection requirements, in 1998.37
Issue Advertising
Groups advocating ideas have sometimes preferred to conceal their identities in order to enhance
the apparent credibility of their messages. For example, in 1943 hearings before the Senate
Committee on Interstate Commerce, labor union leaders contended that sponsors of news
programming airing on radio stations routinely influenced news analysts’ commentaries.38 In

31 Federal Communications Commission, “ Implementation of Section 25 of the Cable T elevision Consumer Protection
and Competition Act of 1992, Direct Broadcast Satellite Public Interest Obligations, FCC 98 -307, Report and Order,”
13 FCC Record 23254, 23274, November 25, 1998. (“ FCC 1998 DBS Public Interest Order.”) See also Federal
Communications Commission, “Direct Broadcast Satellite Public Interest Obligations, Sua Sponte Reconsideration,
Second Order on Reconsideration of First Order,” 19 FCC Record 5647, March 25, 2004.
32 Federal Communications Commission, “ Expansion of Online Public File Obligations to Cable and Satellite T V
Operators and Broadcast and Satellite Radio Licensees,” 31 FCC Record 526, 528-529, 2016, January 29, 2016. (2016
FCC Public File Order)
33 Federal Communications Commission, “Rules Governing Standard Broadcast Stations, Broadcasts by Candidates
for Public Office,” 3 Federal Register 1691, July 12, 1938.
34 Federal Communications Commission, “ Expansion of Online Public File Obligations to Cable and Satellite T V
Operators and Broadcast and Satellite Radio Licensees,” 31 FCC Record 526, 528-529, 2016, January 29, 2016. (2016
FCC Public File Order, pp. 528-529)
35 1945 Supplement to the Code of Federal Regulations of the United States of America (1946) . [Codified at that time
as §3.290(d) for FM radio stations and §3.290(d) for television stations.]
36 Federal Communications Commission, “Amendment of Part 76, of the Commission’s Rules and Regulations,
Report and Order FCC 74-831,” 48 FCC Reports, 2nd Series 72, August 8, 1974.
37 FCC 1998 DBS Public Interest Order.
38 T estimony of R.J. T homas, president, United Auto Workers, in U.S. Congress, Senate Committee on Interstate
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addition, the FCC had received complaints about political organizations supplying programs to
radio stations—at no charge—that misrepresented themselves as “citizens committees” in on-air
sponsorship identifications.39 Since then, the FCC has sought to require disclosures related to
sponsorship of issue advertising, but has been inconsistent in specifying what types of issues fal
within its regulations.
On-Air Sponsorship Identification in Issue Advertisements
With the goal of increasing transparency, the FCC in 1944 adopted rules requiring stations to
identify sponsors of
any political broadcast matter or any broadcast matter involving the discussion of a
controversial issue for which any film, record, transcription, talent, script, or other
material or service of any kind is furnished, either directly or indirectly, to a station as an
inducement for broadcasting such matter.40
The FCC’s 1944 sponsorship identification rulemaking stemmed partly from general
developments in the industry. In the broadcast radio industry, wartime advertisers, in an effort to
save money, shifted from sponsoring and producing entire programs (e.g., “Lux Radio Theater”)
to sprinkling shorter advertisements in and around programs, thereby making the responsibility
for the content of the programs less apparent to listeners.41 The FCC did not define the term
“controversial issue” in 1944, but in its 1975 amendments to the rules it used the phrase
“controversial issue of public importance.”42
The 1975 sponsorship identification order cross referenced43 a 1974 FCC decision in which the
agency declined to provide detailed criteria for defining “controversial” or “public importance,”
deferring to the “reasonable, good faith judgments of our licensees in this area.”44 Nevertheless,
in the 1974 order, FCC stated that
The principal test of public importance, however, is not the extent of media or
governmental attention, but rather a subjective evaluation of the impact that the issue is
likely to have on the community at large.45

Commerce, To Am end the Com m unications Act of 1934, and for Other Purposes, hearings, S. 814, 78th Cong., 1st
sess., November 18, 1943 (Washington: GPO, 1943), pp. 270 -74. Testimony of Irving Richter, publicity director,
Congress of Industrial Organizations, Senate Committee on Interstate Commerce, To Am end the Com m unications Act
of 1934, and for Other Purposes, hearings, S. 814, 78th Cong., 1st sess., December 2, 1943 (Washington: GPO, 1943),
p. 584.
39 “FCC Would Label Program Sources,” Broadcasting, October 9, 1944, p. 24.
40 Federal Communications Commission, “Rules Governing Standard and High Frequency Broadcast Stations:
Announcement of Sponsored Programs,” 9 Federal Register 14734, December 19, 1944.
41 Geller and Lampert, p. 341. See also T emple University Libraries, “Lux T heater Scripts,” at
https://library.temple.edu/finding_aids/lux-radio-theatre-scripts, and Jeff Suess, “ Our History: P&G Put the ‘Soap’ in
‘Soap Opera,’” Cincinnati Inquirer, October 4, 2017, at https://www.cincinnati.com/story/news/2017/10/04/our-
history-p-g-put-soap-soap-opera/732149001/.
42 Federal Communications Commission, “Amendment of the Commission’s ‘Sponsorship Identification’ Rules,” 52
FCC Reports, 2nd Series, p. 701, April 25, 1975. (1975 Sponsorship Identification Order).
43 Ibid., p. 710.
44 Federal Communications Commission, “ Handling of Public Issues under the Fairness Doctrine and Public Interest
Standards of the Communications Act ,” 48 FCC Reports, 2nd Series, 1, 11, July 12, 1974. (1974 Fairness Doctrine
Order).
45 Ibid., pp. 11-12.
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Thus, rather than limiting identification requirements to ads about issues of “national
importance,” the FCC emphasized that they particularly applied to issues of “local importance.”
Likewise, the FCC stated that with respect to whether an issue is “controversial,
[I]t is highly relevant to measure the degree of attention p aid to an issue by government
officials, community leaders, and the media. The licensee should be able to tell, with a
reasonable degree of objectivity, whether an issue is the subject of vigorous debate with
substantial elements of the community in opposition to one another.46
The FCC requires broadcast radio and television stations to identify the sponsors at the start and
end of a sponsored program or commercial, whichever is applicable. If the broadcast matter,
such as a commercial, lasts less than five minutes, then broadcast stations need only air one such
identification announcement. Thus, even if a sponsor does not directly pay a broadcaster, but
instead provides programming or announcements involving an issue of a controversial nature or
of public importance, the broadcaster must stil identify the sponsor. This rule, now codified at
47 C.F.R. §73.1212(d), remains in effect for broadcast stations. The FCC extended these rules to
cable operators engaged in origination cablecasting in 1972.47
Public File Requirements
Over the years, the FCC has adjusted the requirements for FCC licensees to maintain records
concerning sponsorship of issue advertising and to make such records available to the public.
In 1975, the first FCC rules on this subject mandated that broadcast licensees and cable
operators maintain public files regarding sponsors of programming related to “controversial
issues of public importance.”48 The agency stated that
The list retention requirement is fundamental to the objective of preserving the
audience’s right to know by whom it is being persuaded…. With respect to a
controversial issue, if it is not part of the political campaign, the public often lacks
knowledge of the true identities of the protagonists. The lis t retention requirement is
designed to make information available about the sponsor’s identity at the source of the
broadcast, should someone desire it, while at the same time minimizing the amount of
time that need be used for identification.49
In 2002, in the Bipartisan Campaign Reform Act, Congress limited the public file requirement
pertaining to issue advertising, applying it only to records of requests to purchase broadcast time
that “communicates a message relating to any political matter of national importance.”50 The law
required broadcast licensees and cable operators to maintain such records for two years.
In 2003, the U.S. Supreme Court upheld this provision in McConnell vs. Federal Election
Commission, stating
These recordkeeping requirements seem likely to help the FCC determine whether
broadcasters are carrying out their obligations under the FCC’s regulations to afford
reasonable opportunity for the discussion of conflicting views on issues of public

46 Ibid., p. 12.
47 1972 Cable Order, pp. 195, 239.
48 1975 Sponsorship Identification Order.
49 Ibid., p. 711.
50 47 U.S.C. §315(e). In addition, as described “ Political File Requirements,” these entities must maintain publicly
available records of requests to purchase time by or on behalf of a legally qualified candidate for public office.
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importance, and whether broadcasters are too heavily favoring entertainment,
discriminating against broadcasts devoted to public affairs.... 51
FCC Interpretation of Issue Advertising Filing Requirements
The wording of the rules related to filing of requests for issue advertising differs slightly from
those of Section 315. Section 315 requires media organizations to maintain files related to issues
of “national importance,” whereas the FCC’s rules require broadcasters and cable operators to
maintain files related to issues of “public importance.” In its “clarification” of the filing
requirements released in October 2019, the FCC focused on the language in Section 315.
The FCC’s rules for broadcasters and cable operators state that
Where the [cable origination] material broadcast is political matter or matter involving
the discussion of a controversial issue of public [emphasis added] importance and a
corporation, committee, association or other unincorporated group, or other entity is
paying for or furnishing the broadcast matter, the station shall, in addition to making the
announcement required by this section [§76.1615], require that a list of the chief
executive officers or members of the executive committee or of the board of directors of
the corporation, committee, association or other unincorporated group, or other entity
shall be made available for public inspection…. Such lists shall be kept and made
available for a period of two years.52
The FCC’s rules for SDARS and DBS operators are more general, stating that
Each … licensee shall maintain a complete and orderly political file [and that]
(1) The political file shall contain, at a minimum:
(i) A record of all requests for SDARS origination time, the disposition of those requests,
and the charges made, if any, if the request is granted. The “disposition” includes the
schedule of time purchased, when spots actually aired, the rates charged, and the classes
of time purchased; and
(ii) A record of the free time provided if free time is provided for use by or on behalf of
candidates.
2) … [L]icensees shall place all records required by this section in the political file as
soon as possible and shall retain the records for a period of two years….53
In October 2019, and in April 2020, the FCC issued clarifications of its rules related to political
file requirements for issue advertising.54 With the clarifications, the FCC intended to
apply a standard of reasonableness and good faith decision-making with respect to
efforts of broadcasters in: (a) determining whether, in context, a particular issue ad
triggers disclosure obligations under section 315(e)(1)(B) of the Communications Act of

51 McConnell v. FEC, 540 U.S. 93, 240-41 (2003) (internal quotations omitted), overruled in part on other grounds,
Citizens United v. FEC, 558 U.S. 310 (2010).
52 47 C.F.R. §§73.1212(d) (for broadcast radio and television licensees), 76.1701(d) (for cable operators).
53 47 C.F.R. §§25.702(b) (for SDARS licensees), 25.701(d) (for DBS licensees).
54 Federal Communications Commission, “ Complaints Involving the Political Files of WCNC-T V, Inc., et al., FCC
19-100, Memorandum Opinion and Order,” 34 FCC Record 10048, October 16, 2019 (“2019 FCC Political File
Order”). Federal Communications Commission, “ Complaints Involving the Political Files of WCNC-T V, Inc., et al.,
FCC 20-49, Order on Reconsideration,” 35 FCC Record 3846 April 21, 2020 (“ 2020 FCC Political File Recon
Order”).
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1934, as amended (Act);55 (b) identifying and disclosing in their online political files all
political matters of national importance that are referenced in each issue ad; 56 and (c)
determining when it is appropriate to use acronyms or other abbreviations in their online
political files when disclosing information about issue ads.57
The FCC stated that licensees must disclose in their political files58
1. all political matters of national importance, including the names of all legal y
qualified candidates for federal office (and the offices to which they are seeking
election), all elections to federal office, and all national legislative issues of
public importance, to which the communication refers.
2. all of the chief executive officers or members of the executive committee or
board of directors of any person seeking to purchase political advertising time.
In cases where the station has a reasonable basis for believing that the
information provided appears to be incomplete, for example, where the name of
only one official has been supplied, the station wil be deemed to have satisfied
this obligation by making a single inquiry to either the organization sponsoring
the ad or the third-party buyer of advertising time acting on the organization’s
behalf as to whether there are any other officers or members of the executive
committee or of the board of directors of such entity.
The FCC also stated that it would consider context in determining whether an advertisement
constitutes a “political matter of national importance” that triggers record-keeping obligations.
The FCC interprets the term “legal y qualified candidate” to mean legal y qualified candidates
for federal office, and the term “national legislative issue of public importance” to include issues
that are the subject of federal legislation that has been introduced and is pending in Congress at
the time a request for air time is made. In addition, the FCC stated that the term “political matter
of national importance” encompasses political issues that are the subject of controversy or
discussion at the national level, regardless of whether such issues relate to a legal y qualified
candidate, an election to federal office, or a national legislative issue of public importance.
According to the FCC, “[B]y using the term ‘national’ to qualify the type of legislative issues
involved, we believe Congress contemplated only federal legislation, not State or local
legislation.”59
Table 1 summarizes the applicable rules and laws regarding political and issue sponsorship
identification requirements. In some instances, the FCC also requires media organizations to
disclose the identity of sponsors in their online public files, which the FCC maintains on its
website, while in other instances no such disclosure is required. Detailed explanations of each
type of disclosure appear below the table.

55 47 U.S.C. § 315(e)(1)(B).
56 See 47 U.S.C. § 315(e)(2)(E).
57 2020 FCC Political File Recon Order, p. 3846.
58 2019 FCC Political File Order, pp. 10050-10051.
59 Ibid., p. 10064.
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Table 1. Political and Issue Sponsorship Identification Requirements
by Type of Media
In FCC Regulations and Communications Act
Type of
Broadcast Radio
Identification
and Television
SDARS
Requirement
Stations
Cable Operators
Operators
DBS Operators
Political Candidates
Must media disclose
Yes. For any
Yes, but applies
No.
No.
sponsorship of
political candidate.
only to “origination

commercial or
47 C.F.R. §73.1212
cablecast”
program segment?
(a)(2)(i ).
programming. For

any political
candidate. 47 C.F.R.
For federal
§76.1615(a).
candidates who
directly reference

chal engers and
For federal
seek lowest unit
candidates who
rate. [“Stand by
directly reference
your ad”
chal engers and
disclaimer.] 47
seek lowest unit
U.S.C. §315(b)(2).
rate. [“Stand by

your ad”
disclaimer.] 47
U.S.C. §315(b)(2)
Must media disclose
Yes. Must disclose
Yes. Must disclose
Yes. Must disclose
Yes. Must disclose
sponsorship in FCC
requests for
requests for
requests for
requests for
file for public
advertising time and advertising time and advertising time and advertising time and
inspection?
how handled. 47
how handled.
how handled. 47
how handled. 47
C.F.R. §73.1943.

C.F.R §25.702(b)
C.F.R. §25.701(d)

Must list CEOs,

Must list CEOs,
board members, or
47 U.S.C. §335(a)
board members,
executive
[cross-referencing
executive
committee
47 U.S.C. §315(e)]
committee
members of any
members of any
entity that has paid
entity that has paid
for matter that is
for matter that is
political or involves
political or involves
discussion of
discussion of
controversial issues
controversial issues
of public
of public
importance. 47
importance. 47
C.F.R. §§
C.F.R. §73.1212(e),
76.1700(a),
47 C.F.R.
76.1701(d).
§73.3526(e) 47
47 U.S.C. §315(e).
U.S.C. §315(e).
Issues
Must media disclose
Yes. 47 C.F.R.
Yes. 47 C.F.R.
No.
No.
sponsorship of
§73.1212 (d).
§76.1615(c).
commercial or
program segment?
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Type of
Broadcast Radio
Identification
and Television
SDARS
Requirement
Stations
Cable Operators
Operators
DBS Operators
Must media disclose
Yes. Requests for
Yes. Requests for
Yes. Requests for
Yes. Requests for
sponsorship in FCC
advertising time and advertising time and advertising time and advertising time and
file for public
how handled
how handled
how handled
how handled
inspection?
requests. 47 U.S.C.
requests. 47 U.S.C.
requests. 47 C.F.R.
requests. 47 C.F.R.
§315(e).
§315(e).
§25.702(b).
§25.701(d)

47 U.S.C. §335(a);
Same requirements
Same requirements

47 U.S.C. §315.
as for candidates
as for candidates

per 47 C.F.R.
per 47 C.F.R.
§§73.1212(e),
§§76.1700(a),
73.3526(e).
76.1701(d).
47 U.S.C. §315.
47 U.S.C. §315.
Source: https://publicfiles.fcc.gov/about-station-profiles/.
Notes: This table does not include requirements enforced by the Federal Election Commission.
a. In the case of want ads, which are not subject to on-air disclosure rules, stations must maintain a list of
advertisers, including contact information, for two years, and provide the list “to members of the public
who have a legitimate interest in obtaining the information contained in the list.” 47 C.F.R. §73.1212(g).
b. “For purposes of this section, the term ‘broadcasting station’ includes a community antenna television
[cable] system.” 47 U.S.C. §315(c).
Disclosure in Targeted Television Advertising
Television is the most popular medium for political advertising. Kantar Media, a consulting firm,
estimates that campaigns and organization wil spend about $7 bil ion on political advertising
during the 2019-2020 federal election cycle. In 2019, when the firm projected somewhat lower
spending, it estimated that more than 70% would go to advertising viewed on television sets,
including $3.2 bil ion to broadcast television advertising and $1.2 to cable television advertising,
as il ustrated in Figure 1.60

60 Kantar Media, “Kantar Forecasts $6 Billion in Political Ad Spending for 2019 -2020 Election Cycle,” press release,
June 27, 2019, at https://www.kantarmedia.com/us/newsroom/press-releases/kantar-forecasts6-billion-in-political-ad-
spending-for-2019-2020-election-cycle (Kantar). In July 2020, Kantar updated its projection of federal campaign
spending in 2020, estimating a combined $7 billion for television and online spending, but it did out break out its
estimates for spending on each medium. Gabriel T . Rubin, “How Man y Political Ads Does $7 Billion Buy? We’re
About to Find Out,” Wall Street Journal, July 10, 2020.
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Figure 1. Forecasted 2020 Federal Political Campaign Advertising Spending
by Medium
Figures in $ Bil ions

Source: Kantar Media, Political Advertising Trends: What to Expect in 2020, New York, NY, June 27, 2019,
available at https://www.kantarmedia.com/us/newsroom/press-releases/kantar-forecasts6-bil ion-in-political-ad-
spending-for-2019-2020-election-cycle.
Notes: Estimates as of June 2019. In the context of Kantar Media’s survey, “online” includes “spending on paid
digital [advertisements] or ads delivered by a platform that are sponsored by a candidate or campaign.”
Two presumptions underlie the sponsorship identification laws and rules pertaining to political
candidates and issue advocates. The first is that that the electronic media regulated by the FCC
are the distributors of advertisements and programs on viewers’ television sets. The second is
that employees of the regulated media entity, via human interaction with political campaigns and
issue advocacy organizations or their advertising agencies, have ultimate control over the chain
of advertising distribution.
Technological changes, however, have enabled sel ers of television advertising to use computer
software in lieu of human interaction to deliver commercials to distinct voter segments,
potential y making Section 507 more difficult to enforce. In addition, several companies, or
divisions of companies, that sel advertisements that appear on voters’ television sets, and thus
appear to be television advertisements, are not subject to sponsorship disclosure laws and
regulations.
Targeted Television Advertising
Over the last decade, both traditional and nontraditional sel ers of “television” advertising have
promoted the availability of “targeted television advertising” to political and issue campaigns. In
this report, the phrase “targeting television advertising” refers to the ability to serve one ad to a
specific television household as opposed to broadcasting the same ad to al households that are
watching a particular program or are located in a particular geographic area. Targeted television
advertising can reach consumers through a variety of formats, each with different implications
for regulation of political and issue advertising. Two characteristics distinguish targeted
television advertising from traditional television advertising: (1) the advertising is served to
viewers based on data collected from the viewers, and (2) the process of buying and sel ing the
advertising is automated, or “programmatic,” and takes place over the internet, and/or private
communications networks.
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In some instances, the sel ers of targeting advertising are the same entities covered by current
political advertising laws, while in other instances they are not. In addition, the complex supply
chain involved in the buying, sel ing, and distribution of targeted television advertising over the
internet could make enforcement of laws more difficult than in the traditional process, which
involves more human interaction.
Addressable Advertising
Addressable advertising enables advertisers to show different ads to different people who are
watching the same program via cable and satel ite operators’ connections to viewers’ set-top
boxes.61 The Video Advertising Bureau estimates that as of 2019, about 54% of households with
television sets, or 64 mil ion households, are reachable via addressable advertising.62 According
to press reports, political and issue campaigns are increasingly turning toward addressable
television advertising.63 In 2018, for example, political activist Tom Steyer used addressable
advertising when promoting his position on an issue.64 Also in 2018, i360, a data firm owned by
activist Charles Koch reached an agreement with D2 Media, a joint venture of DBS providers
DISH and DIRECTV, to offer addressable advertising services to campaigns seeking to reach
conservative voters.65
By combining voting records, data on such topics as home ownership and job history that can be
purchased from commercial brokers, and the set-top box addresses of cable and satel ite
subscribers, a campaign can show a custom-made ad only to households that fal within targeted
groups. A marketing brochure for Comcast, the largest U.S. cable operator, states that
Addressable advertising also enables candidates to deliver variations of their messages to
different audiences.… For example, candidates can deliver one message to audiences
with members of their political party, and another message to an audience of swing
voters.66
Because cable and satel ite operators are the sel ers of addressable advertising and are regulated
by the FCC, this form of political and issue advertising is covered by current laws. The process
of buying and sel ing the advertisements, however, is governed by software and computers. As
described in Figure 4, this process could complicate the enforcement of the laws.

61 Gartner, Inc., “Information T echnology Glossary: Addressable T V Advertising,” at https://www.gartner.com/en/
information-technology/glossary/addressable-tv-advertising. See also Dish Media, “ Addressable T V: Why Advertisers
Need it Now,” June 2019, at http://adage.com/d/resources/resources/whitepaper/addressable-tv-why-advertisers-need-
it-now?utm_source=AA1&utm_medium=AA&utm_campaign=AAweb.
62 Steve Ellwanger, “VAB Projects $2.1 Billion in 2019 Addressable T V Spend: ‘It’s Mature,’ Says CEO
Cunningham, Beet.TV, March 26, 2019, at https://www.beet.tv/2019/03/sean-cunningham-3.html.
63 Shereta Williams, “Why Political Advertisers Double Down on Local T V and What Brand Media Pros Can Learn
from T hem,” MediaPost, January 8, 2020, https://www.mediapost.com/publications/article/345329/why-political-
advertisers-double-down-on-local-tv.html.
64 Hiawatha Bray, “With New T echnology, T V Election Ads Get Personal,” Boston Globe, November 6, 2018,
https://www.bostonglobe.com/business/2018/11/05/with-new-tech-election-ads-get-personal/
NuPUy32veySgi4PC3ZN0pI/story.html.
65 Mike Reynolds, “DirecT V, DISH, Proffer New Means to Address GOP Voters,” Multichannel News, March 29,
2018, https://www.multichannel.com/news/directv-dish-proffer-new-means-address-gop-voters-375401. T he DBS
providers formed D2 Media Sales in 2014 to focus on political and issue advertisers. Meg James, “DirecT V, Dish
Network to Vie for Political Cash with Customized Ads,” Los Angeles Times, August 19, 2014.
66 Comcast, Politics 2020: Making an Impact with Cross-Screen TV Advertising, p. 10, 2020, at
http://www.effectv.com/industries/political.
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Connected TVs and AVODs: New Unregulated Entrants
While traditional broadcast and cable television remain the most popular media for political
advertising, connected TVs are increasing in popularity. A “connected TV” is a
television set that is connected to the internet via streaming devices, Blu -ray players and
gaming consoles or has built-in internet capabilities (i.e., a Smart Television) and is able
to access a variety of long-form and short-form web-based content. 67
Because connected TVs, are by definition, connected to the internet, they offer advertisers,
including political and issue advertisers, a means of using online advertising to reach viewers on
their television sets. Thus, many political and issue commercials that may appear similar to the
broadcast, cable, and satel ite advertisements governed by FCC rules are in fact a subset of
online political and issue advertisements, which are not subject to FCC oversight. In addition,
similar to addressable advertising, connected TV advertising is general y bought and sold
programmatical y.
Advertisements can appear on connected TVs on the home screens (designed by the television
set or streaming device manufacturer) or within advertising-supported online video-on-demand
services (AVODs). 68 Many device manufacturers offer both types of advertising placements.
Industry and Consumer Trends
Data from Nielsen indicate how quickly viewing habits are changing: the amount of time young
adults spent watching traditional television fel by 40 minutes per day between 2017 and 2019,
while average daily viewing of connected television increased by 15 minutes per day (Figure 2).
Figure 2. Daily Hours and Minutes of Usage
Adults 18-34

Source: 2020 and 2019 Nielsen Total Audience Reports.
Notes: As of first quarter of each year. In this survey, Nielsen defines “Live + Time-Shifted TV” as “Live usage
plus any playback viewing within the measurement period,” including playback of encoded content from video
on demand 2020 Nielsen Total Audience Report, p. 34.

67 IAB, “Digital Video Advertising Glossary: Connected T V (CT V),” https://www.iab.com/insights/digital-video-
advertising-glossary/#index-52.
68 In addition some subscription video on demand services, known as SVODs, offer subscribers reduced fees in
exchange for viewing advertisements.
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It is likely that spending on political and issue advertising wil mirror this shift in viewing
patterns
According to the consulting firm Kantar Media Group,
Another focus in the 2020 election cycle is the [AVOD]/connected TV space. The issues
of scale that hindered the use of th[ese] platform[s] in previous cycles is now in the past.…
Accordingly, political advertisers will be able to air more spots on these platforms and
thus extend the reach of their messaging and better connect with younger audiences.69
Investment research firm MoffettNathanson Research projects that between 2020 and 2024,
television advertising revenues wil decline from $61 bil ion to $56 bil ion, with most of the
losses coming from cable networks.70 The firm forecasts that this ad spending leaving traditional
television wil shift to AVODs, with AVOD ad revenue growing from $3 bil ion in 2019 to $14
bil ion in 2024. Thus AVODs, which are unregulated with respect to sponsorship identification
of political and issue advertising, represent an increasingly significant medium for political and
issue advertising.
Many AVODs, such as CBS Viacom’s Pluto TV and Comcast’s Peacock, are owned by
corporations that also own broadcast stations, broadcast networks, or cable networks. Some of
these companies have integrated the advertising sales departments of their traditional television
services and their AVODs. The integration means that the parent companies are simultaneously
sel ing advertising inventory for media properties subject to regulation by the FCC with those
that are not. In addition, the parent companies are merging two different sales processes: direct
sales negotiated among advertising experts and automated sales conducted via algorithms and
software, known as “programmatic advertising.”71
A Different Advertising Sales Process
Traditional y, as Figure 3 il ustrates, political campaigns and issue advertisers, either through in-
house marketers or outside media buyers at agencies, purchase television ads by entering into
contracts with representatives of broadcast television stations, cable and satel ite services, and
broadcast and cable networks. Political campaigns and issue advertisers seek to advertise during
programs popular with demographic groups likely to vote or take actions. Such decisions are
based on data from the research firm Nielsen, which uses a sample of households with television
sets to estimate the number of people of various characteristics watching particular programs.
Media planners at advertising agencies identify television programs most popular among a
targeted demographic group based on historical viewing data, or, in the case of new shows,
projections from media salespeople, and then book commercials on those shows. Campaigns and
issue advertisers, agencies, and media organizations purchase data from Nielsen in order to make
those estimates. An account executive, an individual employed by the broadcast station or cable
or satel ite operator, solicits potential advertisers and arranges the sale of advertising time.

69 Kantar Media, Political Advertising Trends: What to Expect in 2020, New York, NY, p. 9, June 27, 2019, at
https://www.kantarmedia.com/us/newsroom/press-releases/kantar-forecasts6-billion-in-political-ad-spending-for-
2019-2020-election-cycle.
70 Colin Dixon, “Market Conditions Remain Ripe for Migration of T V Ad Revenue to Digital,” nScreen Media, July
20, 2020, at https://nscreenmedia.com/tv-ad-revenue-migration-to-digital/.
71 “Why is Programmatic T V Advertising So Confusing?” Media Radar (blog), April 10, 2019, at
https://mediaradar.com/blog/why-is-programmatic-tv-advertising-so-confusing/.
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Figure 3. Direct Television Advertising Sales Process

Sources: CRS analysis of data from S&P Global and IAB, “Advanced TV Matrix: a Market Snapshot,” June 2019,
https://www.iab.com/insights/advanced-tv-matrix-a-market-snapshot/. USA DUBS, “TV Ad Distribution FAQs,”
https://www.usadubs.com/tv-ad-distribution-faq.html. Vincent Flood, “So How Does a Video Ad Server Work?,”
Video Ad News March 13, 2014, https://videoadnews.com/2014/03/13/nick-reid-managing-director-uk-tubemogul-
leading-enterprise-software-digital-branding/. National Association of Broadcasters, Liz Chuday, NAB’s Guide to
Careers in Television, Second Edition, National Association of Broadcasters, Baltimore, MD, 2008, p. 12
(explanation of “account executive”). TV Technology, “What is ... Ingest?,” January 13, 2004, at
https://www.tvtechnology.com/news/what-is-ingest.
Notes: “Traffic” refers to the scheduling of advertisements. “Ingest” refers to the process of bringing new
program elements, such as advertisements, into a studio or facility where they are stored on a server to be
ready for broadcast. An ad server is a web server dedicated to the delivery of advertisements.
Sel ing and purchasing television advertising programmatical y is a very different process.
Technological advancements have automated advertising transactions, such that computer
software, rather than humans, may perform such tasks as targeting audiences, forecasting
viewership, transacting, delivering the advertisements, and measuring viewership. Figure 4
il ustrates the most commonly automated advertising technologies and participants involved
within the programmatic advertising sales process. Note that unlike Figure 3, the advertising
transactions depicted in Figure 4 general y do not require human intervention.
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Figure 4. Programmatic Television Advertising Sales Process

Sources: CRS based on infographic from Jason Poras, “Understanding the Basics of Programmatic Advertising,”
(blog), PMG Worldwide, LLC, April 24, 2018, and Jack Marshal , “WTF is Programmatic Advertising?,” Digiday,
January 30, 2014. Internet Advertising Bureau, “Glossary of Terminology,” at https://www.iab.com/insights/
glossary-of-terminology/#index-16.
Notes: An ad exchange is a digital marketplace that enables advertisers and publishers to buy and sel
advertising space, often through real-time auctions. A demand side platform (DSP) is a piece of software that
provides centralized and aggregated media buying from multiple sources, including ad exchanges and supply side
platforms, enabling advertisers to purchase advertising in an automated fashion. A supply side platform (SSP) is a
piece of software used to sel advertising in an automated fashion; media outlets use SSPs to help them sel
inventory.
The programmatic television sales process makes it difficult for the ultimate sel ers of
advertising to disclose the sponsors of political and issue ads in a timely manner. This is true
even if, as in the case of cable and satel ite operators and broadcast stations, they are required to
do so. For example, as communications attorney David Oxenford has noted,
Some of the programmatic systems let advertisers use computerized systems to essentialy
buy any advertising time that is available in a station’s inventory. Advertisers can in effect
have access to a station’s traffic system and schedule their own advertising schedules, and
can pick and choose among the rates available to advertisers in a station’s traffic
systems.... As disclosures of political ad buys often require more information than that is
received from the typical ad buyer (especially for third -party political ad buyers from
whom information about their principal officer and directors is required, as is the
identification of the political issue being addressed), the systems must be able to provide
that information.72

72 David Oxenford, “Political Broadcasting and Programmatic Buying: Issues to Consider,” Broadcast Law Blog,
December 2017, https://www.broadcastlawblog.com/2017/12/articles/political-broadcasting-and-programmatic-
buying-issues-to-consider/.
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Because AVODs and Connected TV device manufacturers are not subject to political and issue
advertising disclosure laws, sponsors of ads can more easily hide their identities on these
platforms than on regulated media.73
In contrast to the direct buying process, in which buyers and sel ers rely on Nielsen data as
currency, in the programmatic process buyers and sel ers use data from various parties involved
in transmitting programming to define audiences. For example, cable and satel ite operators can
offer data collected from set top boxes; television manufacturers can offer data collected from
television sets; and streaming device manufacturers can offer data collected from users of their
devices.74
Other programmatic sel ers of targeted advertising, such as Premion, which operates a data
management platform and is jointly owned by the broadcast television group owners TEGNA
Inc., and Gray Television, Inc., partner with device manufacturers to col ect viewer data.75 In
July 2020, 10 Members of Congress wrote the Chairman of the Federal Trade Commission,
requesting that the agency investigate whether companies involved in sel ing consumer data
collected from connected TVs, among other devices, have violated federal laws prohibiting
unfair and deceptive business practices.76
Implications for Congress
Foreign interference during the 2016 election cycle—and widely reported to be an ongoing
threat—has renewed congressional attention to campaign and election security and raised new
questions about the nature and extent of the federal government’s role in this policy area.77 The
House of Representatives addressed political advertising in the For the People Act of 2019, H.R.

73 T ony Romm, “Political Ads Are Flooding Hulu and Roku, Revealing Loopholes in Federal Election Laws,”
Washington Post, February 20, 2020, at https://www.washingtonpost.com/technology/2020/02/20/hulu-roku-political-
ads-streaming/.
74 In order to sell data from consumers with personal identifiable information, however, the organizations must obtain
consumers’ consent. In 2017, a manufacturer of television sets, VIZIO, Inc., agreed to pay $2.2 million to settle
charges by the Federal T rade Commission and the Office of the New Jersey Attorney General that it installed software
on its T Vs to collect viewing data on 11 million consumer T Vs without consumers’ knowledge or consent. Federal
T rade Commission, “VIZIO to Pay $2.2 Million to FT C, State of New Jersey to Settle Charges It Collected Viewing
Histories on 11 Million Smart T elevisions without Users’ Consent,” press release, February 6, 2017, at
https://www.ftc.gov/news-events/press-releases/2017/02/vizio-pay-22-million-ftc-state-new-jersey-settle-charges-it.
For more information about current data protection and privacy laws, see CRS In Focus IF11207, Data Protection and
Privacy Law: An Introduction, by Stephen P. Mulligan and Chris D. Linebaugh .
75 T EGNA, Inc., “T EGNA’s Premion Launches Premion Audience Selects Data Management Platform for
Advertisers,” press release, April 9, 2018, at https://www.businesswire.com/news/home/20180409006028/en/
T EGNA%E2%80%99s-Premion-Launches-Premion-Audience-Selects-Data. Gray T elevision purchased a minority
stake in Premion in February 2020. T EGNA, Inc., “T EGNA and Gray T elevision Strike Strategic OT T Partnership,”
press release, Februry 9, 2020, at https://www.businesswire.com/news/home/20200226005675/en/T EGNA-Gray-
T elevision-Strike-Strategic-OTT-Partnership.
76 Letter from Senator Ron Wyden, Senator Bill Cassidy, and Senator Maria Cantwell, et al., to T he Honorable Joseph
J. Simons, Chairman, Federal T rade Commission, July 31, 2020, at https://www.wyden.senate.gov/news/press-
releases/wyden-cassidy-and-bicameral-coalition-request-ftc-investigate-advertisers-tracking-americans-at-places-of-
worship-and-protests.
77 CRS Report R46146, Campaign and Election Security Policy: Overview and Recent Developments for Congress,
coordinated by R. Sam Garrett . T his report also describes additional legislation introduced by Congress in the 116 th
session related to campaign and election security.
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1, which it passed in March 2019. Also, in a report released in April 2020, the Senate Select
Committee on Intel igence recommended that
Congress examine legislative approaches to ensuring Americans know the sources of
online political advertisements. The Federal Election Campaign Act of 1971 requ ires
political advertisements on television, radio and satellite to disclose the sponsor of the
advertisement. The same requirements should apply online. This will also help to ensure
that the [Russia-based Internet Research Agency] or any similarly situated actors cannot
use paid advertisements for purposes of foreign interference.78
In the context of the report, “online” refers to websites, search engines, and social media
platforms that reach consumers over the internet, such as Google, Facebook, and Twitter.
However, as discussed in “Connected TVs and AVODs: New Unregulated Entrants,”
advertisements delivered to the TVs via the internet, and shown on TVs connected to the
internet, either on program guides and menus or within AVODs, are also a form of online
advertising. The following are additional potential issues for Congress’s consideration.
Media Outlets Covered
As the “television” advertising sold by regulated media outlets converges with advertising sold
by unregulated media outlets, advertisers, including political and issue advertisers who may be
seeking to conceal their identities, have additional opportunities to do so.79 In some instances the
unregulated media outlets are divisions of corporate owners that cross-sel political advertising
with divisions that are covered by the laws. In other instances the outlets are stand-alone entities.
To ensure that that sponsors of political and issue advertisements who target television viewers
disclose their identities, Congress would need to enact legislation applying disclosure laws to
media and advertising technology entities that are not currently regulated by the FCC.80
Programmatic Advertising Supply Chain
In addition, as Figure 4 il ustrates, the complexity of programmatic TV advertising sales and the
potential lack of transparency with respect to sponsorship could make the identification of
sponsors difficult even for media outlets covered by such laws. According to Jeff Chester, the
Executive Director of the Center for Digital Democracy, and Kathryn Montgomery, Professor
Emerita of the School of Communication at American University,

78 U.S. Congress, Senate Select Committee on Intelligence, Russian Active Measures Campaigns and Interference in
the 2016 Election, Vol. 2: Russia’s Use of Social Media, with Additional Views, committee print, 116th Cong., 1st sess.,
October 8, 2018, 116-XX (Washington: GPO, 2019) p. 80.
79 For example, in August 2020, the Office of the Director of National Intelligence issued a statement warning,
“Ahead of the 2020 U.S. elections, foreign states will continue to use covert and overt influence measures in their
attempts to sway U.S. voters’ preferences and perspectives, shift U.S. policies, increase discord in the United States,
and undermine the American people’s confidence in our democratic process.” Office of the Director of National
Intelligence, “Statement by NCSC Director William Evanina: Election T hreat Update for the American Public,” press
release, August 7, 2020, at https://www.dni.gov/index.php/newsroom/press-releases/item/2139-statement-by-ncsc-
director-william-evanina-election-threat -update-for-the-american-public.
80 While Congress has not enacted legislation focused specifically on online campaign activ ity, elements of existing
Federal Election Commission rules address internet communications. CRS Report R46146, Cam paign and Election
Security Policy: Overview and Recent Developm ents for Congress, coordinated by R. Sam Garrett .
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Because all of these systems are part of the opaque and increasingly automated operations
of digital commercial marketing, the techniques, strategies, and messages of the upcoming
campaigns will be even less transparent than before.81
As programmatic advertising becomes more common, compliance with the current provisions of
Section 507 of the Communications Act (47 U.S.C. §508) may become more difficult for media
organizations. In 1960, the House Committee on Interstate and Foreign Commerce noted a
similar phenomenon with respect to broadcast licensees’ responsibilities for disclosing sponsored
broadcast matter, in recommending amendments to Section 317 of the Communications Act.
Our quiz show hearings demonstrated beyond dispute that imposition of legal
responsibility upon the individual licensee for the quality and balance of program content
and its freedom from deception has not worked and is not likely to work in the future….
Section 317 should be amended to require announcement of payments made not only to
licensees but also to any other individuals or companies for advertising “plugs” on behalf
of third parties on sponsored programs…. Criminal penalties should be imposed on any
person or company who violates this section as amended.82
Similarly, increasing the responsibility of intermediaries involved in programmatic advertising to
comply with sponsorship identification laws could further enable Americans to know the sources
of political advertisements shown on set-top-boxes, connected TVs, and AVODs.
Monitoring by the Members of the Public
As the Government Accountability Office (GAO) reported in 2013, both the FCC and Federal
Election Commission rely on public complaints to alert the agencies of potential violations of
sponsorship identification laws.83 With addressable TV advertising, different audience segments
watching the same television programs may see completely different commercials. In this new
environment, fewer members of the public would be in a position to monitor and spot potential
violations of sponsorship identification laws based on what they see on television. In such an
environment, political files on the FCC’s website may become the primary source for the public
to monitor compliance.
Related Bills Introduced in 116th Congress
Several bil s introduced in the 116th Congress address the sponsorship of political and issue
advertisements in the digital age. The bil s discussed below contain sections to enhance the
transparency of sponsors of such ads, some of which would amend the Federal Election
Campaign Act. Legislation that proposes changes unrelated to sponsorship identification is not
described in this report.

81 Jeff Chester and Kathryn Montgomery, “The Digital Commercialisation of U.S. Politics—2020 and Beyond,”
Internet Policy Review, vol. 8, no. 4 (December 31, 2019), p. 8, at https://policyreview.info/articles/analysis/digital-
commercialisation-us-politics-2020-and-beyond.
82 U.S. Congress, House Committee on Interstate and Foreign Commerce, Subcommittee on Legislative O versight,
Investigation of Regulatory Com m ission and Agencies, Interim Report, committee print, prepared by the Government
Printing Office, 104th Cong., 2nd sess., February 9, 1960, 1258 (Washington: GPO, 1960), pp. 16, 39.
83 U.S. Government Accountability Office, Broadcast and Cable Television: Requirements for Identifying Sponsored
Content Should Be Clarified, 13-237, January 31, 2013, pp. 20, 25, at https://www.gao.gov/products/GAO-13-237.
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Expanded FCC Involvement in Disclosure Requirements
The Fair Elections Now Act of 2019 (S. 2257), introduced by Senator Richard Durbin, would
direct the FCC to initiate a rulemaking proceeding to establish a standardized form to be used by
each broadcast station to record and report the purchase of advertising time by or on behalf of a
candidate for nomination for election, or for election, to federal office. Because the bil would
use Section 315 of the Communications Act to define a “broadcast station,” it would cover cable
and satel ite operators as wel (see “Statute Governing Broadcast Stations and Cable
Operators”).
The Fair and Clear Campaign Transparency Act (H.R. 5016), introduced by Representative Ben
Ray Luján, would direct the FCC to promulgate regulations requiring material in the online
public inspection file of a covered entity to be made available in a format that is machine-
readable. The term “covered entity” includes a television broadcast station, AM or FM radio
broadcast station, cable operator, direct broadcast satel ite service provider, or satel ite digital
audio radio service provider. The bil finds that “[m]achine readability is a critical component of
open government and provides interested parties with the necessary access to evaluate data in a
more comprehensive way.”
Disclaimer Requirements for Online Media
Connected TV and AVOD advertisements are a form of online media advertising. Therefore,
bil s which would amend the Federal Election Campaign Act to create new disclaimer
requirements for political and issue advertisements online might also cover connected TV and
AVOD advertisements explicitly, depending on whether those media are covered in the bil s’
definitions of “digital communications” or “online platform.” Otherwise the bil s could
potential y exclude increasingly popular but unregulated channels for political and issue
advertisements. S. 1356 (and its companion H.R. 2592), H.R. 4054, and H.R. 4617 (along with
its companion S. 2699) each define an “online platform” as
any public-facing website, web application, or digital application (including a social
network, ad network, or search engine) which—
(A) sells qualified political advertisements; and
(B) has 50,000,000 or more unique monthly United States visitors or users for a majority
of months during the preceding 12 months.
In January 2019, Representative Kathleen Rice introduced H.R. 679, the Political Accountability
and Transparency Act. Among other provisions, the bil would revise requirements for political
communications. Specifical y, the bil would apply disclaimer requirements for electioneering
communications to “qualified internet or digital communications” and would require persons
paying for political communications to make their best efforts to determine the true source of the
funds used.84 The bil defines a “qualified internet or digital communication” as

84 Currently, the term “electioneering communication” means any broadcast, cable, or satellite communication which
(1) refers to a clearly identified candidate for federal office; (2) is made within (a) 60 days before a general, special, or
runoff election for the office sought by the candidate; or (b) 30 days before a primary or preference election, or a
convention or caucus of a political party that has authority to nominate a candidate, for the office sought by the
candidate; and (3) in the case of a communication that refers to a candidate for an office other than President or Vice
President, is targeted to the relevant electorate. [52 U.S.C. §30104 (f)(3)(A).]
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a communication which is placed or promoted for a fee on any public-facing website,
Web application, or digital application (including a social network, ad network, or search
engine).85
In May 2019, Senator Amy Klobuchar introduced S. 1356, the Honest Ads Act. The bil would
require online political advertisements to have the same transparency and disclosure
requirements as advertisements sold by broadcast radio and television stations, cable operators,
and satel ite operators. In addition, the bil would require websites with at least 50 mil ion
monthly viewers to maintain a public file of al electioneering communications purchased by a
person or group who spends more than $500 total on ads published on the websites’ platforms.
Representative Derek Kilmer introduced the companion legislation, H.R. 2592.
In July 2019, Representative David E. Price introduced H.R. 4054, the Stand by Every Ad Act.
The bil would require the sponsors of certain political advertisements to include information on
the financing sources within the commercials. The bil would amend the definition of a “public
communication” in the Federal Election Campaign Act covered by disclosure requirements to
include “paid internet, or paid digital communication.”86 The bil defines “qualified internet or
digital communication” as “any communication which is placed or promoted for a fee on an
online platform.”
In October 2019, Representative Zoe Lofgren introduced H.R. 4617, the Stopping Harmful
Interference in Elections for a Lasting Democracy (SHIELD) Act. Among other provisions, the
bil would apply existing requirements related to disclosures for political advertisements and
electioneering communications to internet and digital advertisements, including disclosure
requirements and contributions. Additional y, large online platforms would be required to
maintain a public database of certain political advertisements. Senator Amy Klobuchar
introduced the companion legislation, S. 2669.
Also in October 2019, Representative Rodney Davis introduced H.R. 4736, the Honest Elections
Act. Among other provisions, the bil would amend the Federal Election Campaign Act of 1971
to clarify the application of disclaimer rules for political advertisements that are disseminated
online. The bil defines a “media outlet” as any one of the following:
(1) Any newspaper, magazine, or periodical.
(2) Any broadcast, satellite or cable television or radio station.
(3) Any Internet-based website, application, or platform.
The term “covered Internet communication” means
any communication which is required to include information under this section and which
is any of the following:
(A) Any electronic mailing of more than 500 substantially similar communications which
is disseminated by a political committee.

85 Ad networks are companies that act as brokers between a group of advertisers and a group of publishers. See
https://www.smartinsights.com/internet -advertising/ad-networks/tcomplex-digital-advertising-ecosystem-explained/.
In the context of online advertising, a “publisher” is an “an individual or organization that prepares, issues, and
disseminates content for public distribution or sale via one or more media.” IAB, “Glossary of T erms,”
https://www.iab.com/insights/glossary-of-terminology/#index-16.
86 Currently, the term “public communication” means a communication by means of any broadcast, cable, or satellite
communication, newspaper, magazine, o utdoor advertising facility, mass mailing, or telephone bank to the general
public, or any other form of general public political advertising. See 52 U.S.C. §30101 (22).
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(B) Any communication disseminated on a publicly available website of a political
committee.
(C) Any communication placed for a fee on another person’s website or Internet-based
application or platform.
Limitations on Targeted Political and Issue Advertising
As discussed in “Targeted Television Advertising,” two characteristics distinguish targeted
television advertising from traditional television advertising: (1) the advertising is served to
viewers based on data collected from the viewers, and (2) the process of buying and sel ing the
advertising is automated, or “programmatic,” and takes place over the internet, and/or private
communications networks. Two bil s would limit the ability of sponsors of political and issue
commercials to engage in targeted advertising. Such bil s could potential y affect cable and
satel ite operators, which offer addressable advertising on their set top boxes, as wel as sel ers
of advertising on connected TVs and AVODs, depending on eventual interpretations of the
definitions. Moreover, one of the bil s would cover companies that serve the intermediary
functions in the programmatic buying and sel ing process il ustrated in Figure 4.
In May 2020, Representatives David Cicil ine introduced H.R. 7012, the Protecting Democracy
from Disinformation Act. H.R. 7012 would prohibit online platforms and certain intermediaries
from targeting the dissemination of political advertisements to a specific group of individuals on
the basis of online behavioral data or on the basis of demographic characteristics shared by
members of the group. It would also require online platforms and certain intermediaries to
maintain public records of certain political advertisements. The term “covered intermediary”
means a digital advertising platform or advertising system (including an ad server, ad network,
ad exchange, and any other advertising technology intermediary) which participates in the
delivery of 100 mil ion advertisements that can be viewed in the United States for a majority of
months during the preceding 12 months. The term “covered online platform” means
any public facing website, web application, or digital application (including a social
network or search engine) which sells qualified political advertisements and has
50,000,000 or more unique monthly United States visitors or users for a majority of
months during the preceding 12 months, except that such term does not include a website
or application that displays qualified political advertisements solely pursuant to an
arrangement entered into with a covered intermediary between the website or application
and the sponsor of the qualified political advertisement.
Also in May 2020, Representative Anna Eshoo introduced H.R. 7014, the Banning
Microtargeted Political Ads Act. The bil would prohibit online platforms from disseminating
political advertisements that are targeted to an individual or to a group of individuals on any
basis other than the recognized place in which the individual or group resides. The bil would
also apply disclosure requirements for electioneering communications to internet or digital
communications, and amend the definition of a “public communication” in the Federal Election
Campaign Act covered by disclosure requirements to include “paid internet, or paid digital
communication. In this bil , the term “covered online platform” means
any website, web application, mobile application, smart device application, digital
application (including a social network, or search engine), or advertising network
(including a network disseminating advertisements on another website, web application,
mobile application, smart device application, or digital application) that receives payment
to disseminate political advertisements, except that such term does not include a website,
application, or network (in combination with any subsidiaries and affiliates of such a
website, application, or network) that, during the 12-month period ending on the date of
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the dissemination of the political advertisement involved, collected or processed personal
information pertaining to fewer than 50,000,000 individuals.
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Appendix. History of Sponsorship Laws and
Federal Regulations
Table A-1. Key Dates Regarding Sponsored Content Laws and Regulations
1879
Congress limited eligibility for low second-class postal rates to periodicals
“published for the dissemination of information of a public character, or devoted
to literature, the sciences, arts, or some special industry, and having a legitimate
list of subscribers: Provided, however, That nothing herein shal be so construed as
to admit to the second class rate regular publications designed primarily for
advertising purpose.... ” 20 Stat. 359.
1912
The Newspaper Publicity Act requires publishers benefiting from the second-
class postal rate to label “al editorial or other reading matter published in any
such newspaper, magazine, or periodical for the publication of which money or
other valuable consideration is paid, accepted, or promised” as an
“advertisement.” Violators may be fined. 37 Stat. 539, 554. Current version of
law now codified as 39 U.S.C. §3626(a)(4).
1913
U.S. Supreme Court upholds the Newspaper Publicity Act.a
1914
The Federal Trade Commission Act of 1914 creates the Federal Trade
Commission (FTC). At that time, the act gave FTC jurisdiction over antitrust
laws, but did not grant specific jurisdiction over advertising and marketing
practices.b
1927
The Radio Act of 1927 creates the Federal Radio Commission to regulate
broadcast radio stations. It conditions private broadcasters’ use of the public
airwaves on abiding by laws and regulations.
Section 18 provides that licensees may choose not to al ow any candidate to use
their stations, but that if they provide access to candidates, they must offer equal
access to al legal y qualified candidates. Licensees may not censor the candidates’
messages.
Section 19 states, “Al matter broadcast by any radio station for which service,
money, or any other valuable consideration is directly or indirectly paid, or
promised to or charged or accepted by, the station so broadcasting, from any
person, firm, company, or corporation, shal , at the time the same is so
broadcast, be announced as paid for or furnished by, as the case may be, by such
person, firm, company, or corporation.” 44 Stat. 1162.
1934
Congress enacts the Communications Act of 1934, repealing the Radio Act of
1927 and creating the Federal Communications Commission to regulate
broadcast stations.
Section 315 retains the provisions of Section 18 of the 1927 Act.
Section 317 states, “Al matter broadcast by any radio station for which service,
money, or any other valuable consideration is directly, or indirectly paid, or
promised to or charged or accepted by, the station so broadcasting, shal , at the
time the same is so broadcast, be announced as paid for or furnished, as the case
may be, by such person.” 48 Stat. 1064, 1089.
1938
With enactment of Wheeler-Lea Act (also known as the “Advertising Act”),
Congress amends Section 5 of FTC Act by adding a prohibition against “unfair or
deceptive acts or practices in commerce.” 52 Stat. 111. (15 U.S.C. § 52).
With respect to political advertising disclosure, the FCC requires broadcast radio
stations to “keep and permit public inspection of a complete record of al
requests for broadcast time made by or on behalf of candidates for public office,
together with an appropriate notation showing the disposition made by the
licensee of such requests, and the charges made, if any, if request is granted.”c
(Political inspection file rules.)
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1943
Senate Committee on Interstate Commerce holds hearings regarding
sponsorship of news programs and commentaries on radio stations and
networks. The FCC Chairman contends that companies are paying for programs
labeled as “news commentaries” that promote their point of view without
disclosing their sponsorship.d
1944
FCC adopts first set of detailed administrative rules related to Section 317.e
Rules apply mainly to broadcasts about politics or public affairs on AM radio
stations. Stations receiving anything of value for such programming, including
production assistance, must identify the nature of the support at the end and
beginning of the program. (Programs lasting less than five minutes only require
one announcement.) Programs supplied by a corporation, committee, association,
or other group must identify the source. Stations must maintain files of sponsors
available for public inspection. 47 C.F.R. §§73.1212(d)-(g).
1945
FCC extends sponsorship identification and political file requirements rules to
FM radio stations and broadcast television stations. 1945 Supplement to the
Code of Federal Regulations of the United States of America (1946).
1959-1960
Congress, the Federal Trade Commission, the U.S. Department of Justice, and
the FCC investigate al egations of “payola” in which radio station employees
al egedly failed to publicly disclosing the receipt of payments from record label
executives to play their labels’ records on broadcasts. The agencies also
investigate the practice of “plugola,” in which record label executives al egedly
paid station employees to promote or “plug” certain songs on the radio.
In addition, Congress investigates the practices of production companies
receiving money from retailers to include the retailers’ employees as contestants
on network television quiz shows, without publicly disclosing the payments.
Congress holds hearings on proposed revisions to the sponsorship laws.
1960
In the Communications Act Amendments, 1960, Congress bars the FCC from
requiring broadcast stations to disclose routine use of records, props, or other
services supplied by third parties free or for a nominal charge. Congress permits
the FCC to retain the option to mandate disclosure for goods or services
(including recordings, transcriptions, talent, or scripts) supplied to stations for
free or nominal charge, as an inducement to air a public affairs program (P.L. 86-
752).
Any party who pays to insert, or accepts payments to insert, covert promotions
must report this arrangement to the next party in the chain of program
production and ultimately to broadcasters so they can air announcements.
FCC may waive sponsorship announcement requirements in any case or class of
cases with respect to which it determines that the public interest, convenience,
or necessity does not require the broadcasting of such announcement.
(47 U.S.C. §317).
Violators are subject to a maximum $10,000 fine and one-year jail term. (47
U.S.C. §508).
1962
The FCC admonishes stations to transmit sponsorship identification
announcements when broadcasting political material provided by foreign
governments. The FCC states that Section 505 of the Communications Act
obligates stations to “exercise reasonable diligence” in discovering the principals
responsible for the material, and that announcing the identity of the principals’
agents is insufficient.f
1963
The FCC adopts additional sponsorship identification regulations, and provides
36 “il ustrative interpretations” of when sponsorship identification rules may or
may not be required, depending in part on the amount of consideration involved,
and the extent of on-air promotional identification.g 47 C.F.R. §73.1212(i)
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1965
The FCC requires broadcast radio and television licensees to maintain political
files within their communities of licenses and make them available for members
of the public to inspect.h
1971
Congress enacts the Federal Election Campaign Act (FECA), mandating reporting
requirements similar to those in place today, such as quarterly disclosure of a
political committee’s receipts and expenditures. P.L. 92-225 [52 U.S.C. §30101].
1972
The FCC extends sponsorship identification rules to “origination cablecasting” by
cable operators.i Currently codified as 47 C.F.R. §76.1615. The FCC defines
“origination cablecasting” as “programming (exclusive of broadcast signals)
carried on a table television system over one or more channels and subject to
the exclusive control of the cable operator.” 47 C.F.R. §76.5(p). While the rules
reflect the broadcast provisions of Section 317 of the Communications Act, they
do not reflect Section 507 of the Communications Act.
1974
Congress includes “community antenna television systems” in the definition of
broadcast stations for the purposes of Section 315, thereby including cable
operators as entities covered by this section. P.L. 93-443 §402(c).
The FCC extends political inspection file rules to cable operators.j 47 C.F.R.
§76.1700.
Congress establishes the Federal Election Commission to administer and enforce
the federal campaign finance law. The FEC has jurisdiction over the financing of
campaigns for the U.S. House, Senate, Presidency and the Vice Presidency. k P.L.
93-443.
1975
The FCC amends sponsorship identification rules for broadcast radio and
television licensees and cable operators. Cable operators must maintain files of
sponsors available for public inspection.l The FCC defines the term “sponsored”
as “paid for.” Licensees and cable operators must exercise “reasonable diligence”
to obtain true sponsorship information from employees or third parties. If, after
exercising reasonable diligence, licensees and cable operators learn identity of the
person or persons on behalf of whom an agent is acting, they must identify the
ultimate sponsors, not the agent.
1992
P.L. 102-385 establishes public interest obligations for direct broadcast satel ite
(DBS) operators.
1997
The FCC requires satel ite digital audio radio service (SDARS) licensees to
comply with Section 315 of the Communications Act, which provides legal y
qualified candidates equal access to a licensee’s facilities.m Licensees may choose
not to al ow any candidate to use their facilities. Licensees may not censor the
candidates’ messages.
1998
The FCC extends political file rules to DBS operatorsn [now codified as 47 C.F.R.
§25.701(d)].
2002
The Bipartisan Campaign Reform Act (P.L. 107-155) amends of Section 315 of
the Communications Act, providing that candidates have the right to receive the
lowest unit rate charged for advertisements airing on broadcast radio stations,
broadcast television stations, and cable systems on the condition that if they
directly refer to their chal engers, they include on-air disclosures meeting certain
requirements. (“Stand by your ad.”) Broadcast radio and television stations and
cable operators must maintain publicly available files containing records of
requests by legal y qualified political candidates to purchase airtime.o
2012 and 2016
The FCC adopts new rules requiring broadcast radio and television licensees,
cable operators, DBS operators, and SDARS operators to post the contents of
political files and, when applicable, sponsorship identification files, online. Now
codified as 47 C.F.R. §§73.1212, 73.1943, 73.3526 (commercial broadcasters), 47
C.F.R. §76.1700 (cable), 47 C.F.R. §25.701 (DBS), and 47 C.F.R. §25.702(SDARS).p
Sources: U.S. Postal Service, “About, Postage Rates for Periodicals: A Narrative History,”
https://about.usps.com/who-we-are/postal-history/periodicals-postage-history.htm#4. Richard Kielbowicz and
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Linda Lawson, “Unmasking Hidden Commercials in Broadcasting; Origins of the Sponsorship Identification
Regulations, 1927 – 1963,” Federal Communications Law Journal, vol. 56 (March 2004), p. 329.
a. Lewis Publishing Company v. Morgan Postmaster in New York City, 229 U.S. 288, 315 (1913).
b. David C. Hil iard, Janet A. Marvel, and Joseph N. Welch, II; “Ch. 14.01 The Federal Trade Commission,” in
Trademark and Unfair Competition Deskbook, vol. 1, New York: Matthew Bender & Company, Inc., 2019.
c. Federal Communications Commission, “Broadcasts by Candidates for Public Office,” 3 Federal Register
1691, July 12, 1938.
d. Testimony of FCC Chairman James Lawrence Fly, in U.S. Congress, Senate Committee on Interstate
Commerce, Hearings on S. 818, a Bil to Amend the Communications Act of 1934, and for Other
Purposes, 97th Cong., 1st sess., November 4, 1943 (Washington: GPO, 1944), pp. 52-53.
e. Federal Communications Commission, “Rules Governing Standard and High Frequency Broadcast Stations:
Announcement of Sponsored Programs,” 9 Federal Register 14734, December 19, 1944.
f.
Federal Communications Commission, “FCC Warns About Broadcast of Controversial Foreign Matter
Without Indicating Foreign Sponsorship, Public Notice, FCC 62-281,” 40 FCC Reports 136, August 1, 1962.
g. Federal Communications Commission, “Applicability of Sponsorship Identification Rules, Public Notice,
FCC 63-409,” 40 FCC Reports 141, May 6, 1963.
h. Federal Communications Commission, “Amendment to Commission’s Rules Related to Inspection of
Records, Report and Order, FCC 65-783” 45 FCC Reports 2206, 2214, April 5, 1965.
i.
Federal Communications Commission, “Amendment of Part 74, Subpart K, of the Commission’s Rules and
Regulations, Cable Television Report and Order FCC 72-1089,” 36 FCC Reports, 2nd Series 143, February 3,
1972.
j.
Federal Communications Commission, “Amendment of Part 76, of the Commission’s Rules and
Regulations, Report and Order FCC 74-831,” 48 FCC Reports, 2nd Series 72, August 8, 1974.
k. Federal Election Commission, “Mission and History,” https://www.fec.gov/about/mission-and-history/.
l.
Federal Communications Commission, “Amendment of the Commission’s ‘Sponsorship Identification’
Rules, Report and Order FCC 745-417,” 52 FCC Reports, 2nd Series 701, April 25, 1975.
m. Federal Communications Commission, “Establishment of Rules and Policies for the Digital Audio Satel ite
Service, Report and Order FCC 97-70,” 12 FCC Record 5754, 5791-5792 March 3, 1997.
n. Federal Communications Commission, “Implementation of Section 25 of the Cable Television Consumer
Protection Act and Satel ite Service, Report and Order FCC 98-307,” 13 FCC Record 232544, 23258, 23274
November 28, 1998.
o. Section 315(c)(1) of the Communication Act [47 USC §315(c)(1)] includes a “community antenna
television system,” which includes cable television, in its definition of the term “broadcasting station.”
p. Federal Communications Commission, “Standardized and Enhanced Disclosure Requirements for
Television License Broadcast License Public Interest Obligations, Second Report and Order FCC 12 -44,”
27 FCC Record 4535, 4572 April 27, 2012. Federal Communications Commission, “Expiration of Online
Public File Obligations to Cable and Satel ite TV Operators and Broadcast and Satel ite Radio Licenses,
Report and Order, FCC 16-4,” 3 FCC Record 526, 537-538, 545-546 January 29, 2016.

Author Information

Dana A. Scherer

Specialist in Telecommunications Policy

Congressional Research Service
29

Identifying TV Political and Issue Ad Sponsors in the Digital Age

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Congressional Research Service
R46516 · VERSION 1 · NEW
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