U.S. court clears way for political ad contracts to go online

Fri Jul 27, 2012 4:01pm EDT

* D.C. appeals court denies NAB's stay request

* Broadcasters must post political files online Aug. 2

* NAB says FCC's rules are unfair to local TV stations

By Jasmin Melvin

WASHINGTON, July 27 (Reuters) - A U.S. federal appeals court on Friday cleared the way for new rules to take effect next week that will force broadcasters to publish political advertising contracts online.

The court denied an emergency motion from the National Association of Broadcasters to stop the rules from taking effect during a larger judicial review.

The Federal Communications Commission adopted the rules in April to provide insight on campaign spending ahead of November's congressional and presidential elections. They will reveal who is paying for political campaign ads and just how much they are shelling out.

The NAB has said its members stand to lose millions of dollars in ad revenue because cable and Internet competitors, who are not subject to the rules, will get an unfair advantage for political advertising.

"We continue to believe it is fundamentally unfair for local TV stations to be the only medium required to disclose on the Internet sensitive advertising rate information," Dennis Wharton, NAB's executive vice president of communications, said in a statement.

The trade group filed its emergency motion with the U.S. Federal Court of Appeals for the District of Columbia Circuit earlier in the month. The D.C. appeals court said in a filing that the trade group had not met "the stringent requirements for a stay pending court review."

The four biggest TV broadcasters in the top 50 media markets will have to upload their political files to a database hosted on the FCC's website beginning Aug. 2.

TV stations have been making public their paper records of campaign advertising buys and other community-related issues since 1938 as part of their public interest obligation. But obtaining those files is currently a time-consuming, labor-intensive task.

The data broadcasters will post online includes detailed information on who paid for political ads, key personnel of the groups buying ads, when political ads aired and rejections of requests to buy air time.

The four biggest broadcasters are ABC, operated by Walt Disney Co, CBS Corp, News Corp's Fox, and NBC, controlled by Comcast Corp.

The NAB filed a petition for review in April with the D.C. appeals court, charging that the rules are arbitrary, capricious, violate free speech protections in the U.S. Constitution and go beyond the FCC's statutory authority.

That court challenge still stands, and will be debated on the merits, Wharton said.

The FCC declined to comment.

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