Fourth Circuit strikes down FCC order expanding broadcast ad discounts to political parties

The US Court of Appeals for the 4th Circuit issued a 2-1 decision on 26 August to set aside a Federal Communications Commission (FCC) order that was scheduled to take effect on 4 September. The ruling determines that only individual candidates are entitled to the “lowest unit charge,” or LUC, under US law, effectively blocking an expansion that would have extended these discounted rates to political parties and joint fundraising committees.

The decision was triggered by a challenge from four Democratic candidates: Sherrod Brown, Jon Ossoff, Roy Cooper, and Kristen McDonald Rivet. The court found that the FCC’s March 30 public notice, which asserted that parties and authorised committees could access the discounts, was not supported by the statutory text. The panel described the agency’s move as a “significant and unilateral expansion” of the LUC requirement, noting that US law mandates broadcasters offer the lowest ad rates to “any person who is a legally qualified candidate for any public office.”

Judge Robert King, who wrote the majority opinion, was joined by Judge James Wynn. The dissent was filed by Judge J. Harvie Wilkinson III. The court determined that the FCC’s failure to act on the candidates’ petition for over 100 days constituted a “constructive denial,” granting the court jurisdiction to review the matter. The judges noted that the public notice did not identify previous Media Bureau guidance to support its claim that political parties could be entitled to the LUC.

FCC Commissioner Anna Gomez, the only Democrat on the commission, stated that the decision would prevent a “flood of dark money” from entering broadcast advertising. She argued that the order would force broadcasters to slash prices and sell their most valuable inventory during their busiest season, even as the agency has argued that broadcasters need economic relief to compete with streaming services.

The National Republican Congressional Committee and National Republican Senatorial Committee had supported the FCC’s position during the court case. However, the 4th Circuit countered that a joint fundraising committee buying ads at the lowest rate would be spending money received in contributions to a “non-candidate committee.” The ruling also highlighted that a political party cannot be an authorised committee for a single candidate because each party supports multiple candidates.

The FCC has not yet confirmed whether it will seek a rehearing before the full court or appeal to the Supreme Court. An FCC spokesperson stated that the agency welcomes the dissenting opinion, which aligns with the FCC’s longstanding approach, and will continue to review the other opinions. The outcome remains significant for broadcast revenue, particularly as the FCC has simultaneously argued that broadcasters need economic relief to compete with streaming services.