Eight days ago, the Supreme Court's long-awaited corporate campaign spending ruling in Citizens United v. Federal Election Commission struck the law of political broadcasting with lightning. What are the potential changes and what does the ruling mean for television and radio stations and their management?

The five-justice bare majority opinion reverses more than 100 years of bans on corporations' use of their own funds for ads and other communications that expressly advocate the election or defeat of a candidate for federal elective office. The opinion also frees labor unions from more than 60 years of those limits. Similar laws in 24 states are also expected to fall.

The next day, editorial headlines in the New York Times and Wall Street Journal captured the strong polarization about the opinion both within the court itself (there was a ringing 90-page dissent by four justices) and in the public reaction. The Times headline was "The Court's Blow to Democracy;" in the Journal, it was "A Free Speech Landmark."

The controversy is sparking efforts to scale back some predicted effects of the opinion through legislation or other means (see below). In the meantime, the old limits are void at least for federal campaigns. The effects could be felt as soon as the Illinois primary election next Tuesday.

What does the ruling mean for television and radio stations and their management?

I focus here -- preliminarily because rule or other changes are likely in the wake of the decision -- on what the decision does and doesn't do; questions the ruling leaves open -- and how they may be resolved; what happens next; steps stations should take; and pitfalls to avoid between now and the Nov. 2 general election.

What the Supreme Court Opinion Does

Fundamentally, the decision is about where the money can come from to pay for certain political advertising on broadcast TV and radio, cable and satellite.

Specifically, the opinion does four main things:

1. Overrules prior Supreme Court decisions upholding federal law bans on corporate, and labor union, use of their own general treasury funds for ads not coordinated with candidates ("independent expenditures") that expressly support or oppose named candidates for federal elected office (president and Congress).

Previously, corporations and unions could finance such "independent expenditures" only through political action committees (PACs). PACs are funded by voluntary donations from individuals such as corporate employees and union members. Who can contribute and how much are regulated by the IRS and FEC. Now, there is no limit on the sources or amounts of funds that a corporation or union itself can spend on "express candidate advocacy" independent ads. Corporations and unions can also spend freely on independent "issue ads" that do not name candidates.

2. Strikes down the federal ban on corporate and union use of their own funds to pay for "electioneering communications." These are defined as "any broadcast, cable or satellite communication" that "refers to a clearly identified candidate for federal office," is made within 30 days of a primary election or 60 days of a general election, and is "publicly distributed" (i.e., the communication can be received by at least 50,000 people in a state within the 30- or 60-day period.)

Previously, corporations and unions could contribute to electioneering communications only through PACs. Now they can finance the communications directly at any time, including within 30 and 60 days of elections and right up to Election Day.

3. Upholds the validity of existing federal law disclosure and disclaimer requirements applicable to election-related advertising by corporations and unions. Specifically, these provisions continue in effect indefinitely and apply to advertising newly permitted as a result of the opinion (but note that they are subject to change):

* Disclosure. Corporations/unions spending more than $10,000 per year to produce or air election-related ads must report, to the FEC, the names and addresses of anyone contributing $1,000 or more to the ads' preparation or distribution.

* Disclaimer. Any third-party "independent" ad that refers to a federal candidate and is not authorized by a candidate or candidate's committee must include in the ad the statement: "[Full name] is responsible for the content of this advertising," and state the paying party's permanent street address, telephone number (or Web address) and that the communication is not authorized by any candidate or candidate's committee. The statement must be spoken clearly and be displayed in text on the screen for at least four seconds. In addition, if the paying party is a corporation, the station should require that a list of the corporation's chief executive officers or members of the executive committee or board of directors be placed in the station's public file.

4. By 1 and 2 above, the court opens the door to substantial additional demand for election-related air time by any form of corporation or union, including trade associations, for-profit and nonprofit incorporated groups, and advocacy organizations from all over the political spectrum.

By definition, the opinion applies to independent, third-party expenditures, meaning not by candidates or their authorized committees. Time requests that flow from the opinion therefore do not trigger lowest unit charge, which must be provided only to legally qualified candidates or their authorized committees.

What the Opinion Doesn't Do

1. Affect any broadcaster obligations to legally qualified candidates -- federal, state and local -- under the Communications Act and the FCC's political broadcast rules.

2. Explicitly, the opinion does not decide whether foreign-owned corporations, including subsidiaries doing business in the U.S. or owned by or affiliated with foreign governments, qualify for the liberalized spending to influence U.S. federal elections. Proposed legislation is already addressing this (see below).

3. Affect PACs and their regulation.

4. Affect the bans on direct corporate/union contributions to candidate campaigns.

5. Affect disclaimer and disclosure requirements for any type of political ad other than the ones allowed now by the opinion.

6. Address directly the impact of the ruling on state and local campaign spending laws, some of which parallel the provisions just struck down.

Montana, for instance, has had a corporate electioneering law since 1912, and 26 states joined in a brief seeking to uphold the now-voided federal law bans. All states are affected in that none can adopt new laws that are in conflict with the Supreme Court opinion. Repeal or modification of state law provisions will occur state by state, and there may be legal challenges to laws not repealed.

It is likely that the opinion invalidated state and local laws that are equivalent in language or intent to the voided federal law provisions. That would mean that a corporation or union could fund ads or other communications not coordinated with a candidate and support or oppose election of a candidate for state or local office in the ad. The dissenting opinion said that "the court unleashes the floodgates of corporate and union general treasury spending in these [state] races."

What Happens Next?

The FEC says it "is considering the impact of the opinion on its existing regulations, as well as its ongoing enforcement processes, and will be providing guidance to the public as soon as possible regarding what steps will be taken to comply fully with the opinion."

In states with early primaries, corporations and unions may start requesting ad time of stations soon. Some may have done so already.

As noted above, reaction to the opinion runs from high praise to high condemnation.

In his State of the Union address Wednesday night President Obama said, "I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities. And I urge Democrats and Republicans to pass a bill that helps correct some of these problems."

Possible remedies could include, among others:

* New legislation banning corporate treasury expenditures by companies that receive government funds, collect most of their revenue abroad or hire lobbyists.

* Strengthening rules against coordination between campaigns and outside groups, such as prohibiting them from hiring the same advertising and consultant firms.

* Requiring shareholder approval of political ad expenditures, and/or requiring CEOs to appear in corporate ads financed by their companies, similar to the requirement for candidates.

* Adopting bans or limits on foreign corporate spending to influence U.S. elections. Sen. Al Franken (D-Minn) introduced a bill on Jan. 27. In the House, Rep. John Hall (D-N.Y.) introduced legislation that would ban political ads by corporations if more than 5% of their shareholders are foreign nationals.

Do's and Don'ts for Stations

Stations should:

* Be alert to changes from the FEC, Congress and possibly other court decisions.

* Plan in advance for upcoming primaries and the general election. That includes accommodating opinion-generated ad buys while assuring enough available ad inventory to meet station obligations to candidates. Those haven't changed.

* Make sure that all public file obligations are met for various types of political ads, candidate and non-candidate.

Federal candidates continue to have a personal right of access to air time in connection with their campaigns. Candidates for state and local offices lack that right and stations must exercise reasonable judgment as to which, if any, of those races merit the sale of time.

All opposing candidates, federal, state and local, have rights to equal opportunities when an opponent buys time, and all are entitled to lowest unit charge.

Note that the opinion may lead to increased ad demand particularly late in campaigns, when electioneering communications were prohibited. Also, the FCC's rule 73.1944(b) requires licensees to make their facilities available to federal candidates on the weekend before an election if the station has provided similar access to commercial advertisers during the year preceding the election period.

Corporations and unions, in contrast, are not entitled to buy time at the lowest unit charge. To maximize revenue opportunity from the newly unrestricted groups, and meet candidate requirements in a year with many highly contested races, may require more advance planning than for prior campaign seasons.

Broadcasters, of course, still have the general obligation to operate in the public interest. Stations should assess what that means in the new campaign context on an ongoing basis. Good faith, reasonable licensee judgments about political time during election campaigns are usually deferred to by the FCC.

In allocating political ad time, stations should factor in the public interest standard. For example, is it reasonable or in the public interest to run corporate ads that heavily and lopsidedly support or oppose a given candidate, without selling time for the opposing view? Section 315 of the Communications Act still requires broadcasters to afford reasonable opportunity for the discussion of conflicting views on issues of public importance, which include elections.

This column on TV law and regulation by Michael D. Berg, a veteran Washington, D.C., communications lawyer and the principal in the Law Office of Michael D. Berg, appears periodically. He is also the co-author of FCC Lobbying: A Handbook of Insider Tips and Practical Advice. He can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 202-530-8560. Read more of Berg's Legal Memos here.

Note: This article provides general guidance only and is not a substitute for individualized legal advice for particular situations.

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