AO 2007-20: Free airtime to presidential candidates on satellite radio

XM Satellite Radio Inc. (XM) may offer free airtime to qualified Presidential candidates because XM qualifies as a press entity and would not be making prohibited corporate contributions or expenditures. Communications made by candidates through XM's free airtime offer must include all required disclaimers.

Background

XM has launched a 24-hour, commercial-free national radio channel exclusively dedicated to the 2008 Presidential election. The channel, called "POTUS '08," features news updates, candidate interviews, complete speeches and other campaign-related news, in addition to archival audio of historic moments from past Presidential campaigns. As a separate and distinct part of POTUS '08, XM will also air "Candidate Supplied Content" which will consist of free airtime for Presidential candidates or their representatives to speak to voters. Each Presidential candidate who has qualified for ballot access in 10 or more states will be eligible for the free airtime.

XM will devote up to one hour per day to the candidate supplied content. Each eligible candidate will be allowed to supply content of up to 5 minutes per day and will retain complete editorial control over the content of the communications he or she supplies to POTUS '08. However, XM will not air any advertisements that have been carried on a for-pay basis on any medium (including campaign commercials for a candidate) or otherwise fail to comply with its prescribed access guidelines.

Analysis

The Federal Election Campaign Act (the Act) prohibits corporations from making contributions or expenditures in connection with federal elections. 2 U.S.C. §441b(a). The Act and Commission regulations define the terms "contribution" and "expenditure" to include any gift of money or "anything of value" for the purpose of influencing a federal election. 11 CFR 100.52(a). However, any cost "incurred in covering or carrying a news story, commentary, or editorial by any broadcasting station" is excluded from the definitions of contribution and expenditure unless the facility is owned or controlled by any political party, political committee or a candidate. 11 CFR 100.73. The Act and Commission regulations also include a similar exemption with respect to "electioneering communications," which would otherwise be prohibited if made by a corporation. 2 U.S.C. §434(f)(3)(B)(i) and 11CFR 100.29(c)(2). This exclusion is commonly known as the "press exemption."

Applicability of the press exemption

The Commission has previously applied a two-step analysis to determine whether or not the press exemption applies in different circumstances. First, the Commission asks whether the entity engaging in the activity is a press entity; second, the Commission determines whether the entity is owned or controlled by a political party, political committee or candidate, and whether the entity is acting as a press entity in conducting the activity at issue.

The Commission concluded that XM qualifies as a press entity because XM is in the business of producing on a regular basis a radio program that distributes news stories, commentary and/or editorials. The Commission also concluded that XM is not owned or controlled by a political party, political committee or candidate and that by providing free airtime to qualified Presidential candidates, XM is covering or carrying a news story, commentary or editorial. Accordingly, the Commission determined that XM's broadcasts on the POTUS '08 channel, including the broadcast of Candidate Supplied Content, are exempt from the Act's prohibition on corporate contributions and expenditures under the press exemption. Such communications were also found to be exempt from the definition of "electioneering communications" because they meet the same criteria described above. 11 CFR 100.29(c)(2).

Disclaimers

All participating candidates must include disclaimers on any communications that are broadcast on the POTUS '08 channel, as required by the Act and Commission regulations. 2 U.S.C. §441d(a)(1) and 11 CFR 110.11(a)(1). The Commission provided a non-exhaustive list of three disclaimers that would satisfy the relevant requirements. Because participating candidates will make a disbursement by paying for the production costs of Candidate Supplied Content, the disclaimer must clearly state that the communication was paid for by the candidate's authorized committee. For instance, an acceptable statement would be, "Time for this message was provided free by XM radio to help inform the public about the current Presidential campaign, and other production costs were paid by X for President." Because the content will be a radio communication approved by a candidate, the disclaimer must also include an audio statement by the candidate that identifies the candidate and states that he or she has approved the communication. 11 CFR 110.11(c)(3)(i).

AO 2007-20: Date Issued: October 30, 2007; length: 6 pages.