U.S. court says FCC cannot make broadcasters check sponsors' identities

By David Shepardson

WASHINGTON (Reuters) -A U.S. appeals court on Tuesday struck down a Federal Communications Commission (FCC) requirement that broadcasters check federal sources to verify sponsors' identities.

The court noted that the FCC had raised concerns "that the Chinese and Russian governments have been secretly leasing air time to broadcast propaganda on American radio." The FCC rules, which were finalized in April 2021, require foreign-government sponsorship disclosure at the time of a broadcast if a foreign governmental entity paid a radio or television station, directly or indirectly, to air material.

"The FCC cannot require radio broadcasters to check federal sources to verify sponsors' identities," Judge Justin Walker of the U.S. Court of Appeals for the District of Columbia wrote for the three-judge panel.

The rules took effect in March for new leasing agreements and needed to be implemented within about six months for existing agreements. Prior rules did not specify when and how foreign government sponsorship should be publicly disclosed.

FCC Chairwoman Jessica Rosenworcel said on Tuesday "the principle that the public has a right to know the identity of those who solicit their support is a fundamental and long-standing tenet of broadcasting ... Consumers deserve to trust that public airwaves aren't being leased without their knowledge to private foreign actors."

The National Association of Broadcasters challenged the FCC rule requiring independent checks, arguing it would result in "onerous requirements to ... conduct independent research on all the entities with whom broadcasters currently or will in the future have lease agreements."

Stephen Kinnaird, a lawyer who represented the National Association of Broadcasters, said the decision "vindicated the plain language of the statute, which limits the duty of broadcasters with regard to securing program sponsor information."

The issue took on new urgency in the aftermath of Russia's Feb. 24 invasion of Ukraine.

(Reporting by David Shepardson; Editing by Paul Simao)