Three provisions in the 1992 Cable Act appear clearly unconstitutional, either because they overtly impose content-related burdens on speech, or because they do not serve any identifiable regulatory purpose of significance to justify even the incidental burdens they impose. These provisions are the direct broadcast satellite ("DBS") service obligations; the premium channel notice provisions; and the provisions placing quotas on the number of subscribers allowed per cable operator.
Direct Broadcast Satellite Service Provisions
Section 25 of the 1992 Cable Act directs the FCC to impose mandatory carriage requirements on providers of direct broadcast satellite ("DBS") services. DBS distributors transmit their signals via earth-orbiting satellites directly into subscribers' receivers through dish antennas, not over coaxial cable strung along public rights-of-way. As a condition to authorization or renewal of any DBS service license, the DBS provider must allocate four to seven percent of its transmission capacity to "noncommercial programming of an educational nature."
The federal defendants protest at the outset that the plaintiffs presently before the Court do not have standing to challenge section 25 because none of them happen to be DBS service providers. Some of the plaintiffs, however, are programmers who market their wares to DBS distributors, and who have alleged that because of the DBS set-aside for educational programming they will find themselves in competition for fewer channel positions. The asserted injury is traceable to section 25, and it clearly would by remedied by the declaratory relief the plaintiffs seek. Accordingly, the plaintiffs meet the requirements for Article III standing. See Allen v. Wright, 468 U.S. 737, 751-52, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984).
The plaintiffs contend that the DBS educational programming set-aside is content-based.
Cf. Buckley v. Valeo, 424 U.S. 1, 46 L. Ed. 2d 659, 96 S. Ct. 612 (1976); see also City of Cincinnati v. Discovery Network, Inc., No. 91-1200, slip op. at 18-20 (U.S. March 24, 1993). The DBS service provisions accord a preference to speakers whose ostensible mission is to enlighten rather than entertain, and therefore, have implicitly been judged by Congress to be more worthy of an audience. Nevertheless, the Court finds that it need not decide whether a preference for "noncommercial programming of an educational nature" is more content-related than, for example, the "local" broadcasting at issue in Must-Carry, because, to the extent it subsumes a content component at all, even under O'Brien/Ward scrutiny, the DBS provisions must fail.
There is absolutely no evidence in the record upon which the Court could conclude that regulation of DBS service providers is necessary to serve any significant regulatory or market-balancing interest. There is nothing in the record purporting to demonstrate that educational television is presently in short supply in the homes of DBS subscribers, nor is there a reason to conclude that section 25 was designed (or deemed necessary) by Congress to quell anti-competitive DBS provider practices. In the absence of a record identifying a valid regulatory purpose or some other legitimate government interest to be advanced by conscripting DBS channel space, there is no justification for any First Amendment burdens occasioned by section 25. Accord Quincy Cable TV, Inc. v. FCC, 248 U.S. App. D.C. 1, 768 F.2d 1434, 1457 (D.C. Cir. 1985), cert. denied, 476 U.S. 1169, 90 L. Ed. 2d 977, 106 S. Ct. 2889 (1986).
Premium Channel Notice Provisions
Section 15 of the 1992 Cable Act requires a cable operator to give notice to its subscribers, at least 30 days in advance, if it proposes to provide a free preview of a "premium channel" -- one offering movies rated X, NC-17, or R by the Motion Picture Association of America -- to entice those who do not ordinarily receive that channel to buy it. The plaintiff operators, and ENCORE, an intervenor-plaintiff offering pay-per-view movie programming services, contend that this provision is unconstitutional because it is indisputably content-related; because it burdens protected speech as well as suppressing obscenity; and because it does not survive the strict scrutiny to which such legislation must be subjected. The Court agrees.
Section 15 is content-based.
The section passes judgment on material on the basis of the ratings the motion picture industry assigns to the movies, which, of course, are determined in turn by the movies' content. Content-based "indecency" restrictions are constitutional only if they are a "carefully tailored" means of accomplishing a "compelling" interest. Sable Communications v. FCC, 492 U.S. 115, 126, 106 L. Ed. 2d 93, 109 S. Ct. 2829 (1989).
Section 15 also clearly burdens at least some protected speech.
The notice requirements make carriage of free previews less practicable and more costly, and cable operators are dissuaded from carriage of programmers like ENCORE on their systems.
The federal defendants assert that section 15 is necessary to protect unwilling viewers, especially children, from indecent television messages which, although possibly being a compelling interest, id.; see FCC v. Pacifica, 438 U.S. 726, 748, 57 L. Ed. 2d 1073, 98 S. Ct. 3026 (1978) (citing Rowan v. Post Office Dept., 397 U.S. 728, 25 L. Ed. 2d 736, 90 S. Ct. 1484 (1970)), section 15 is not, in any sense, "carefully tailored" to accomplish.
Congress has simply incorporated the Motion Picture Association's rating system as the measure of indecency; its failure to define indecency for itself, abdicating that responsibility to a trade association, is sufficient for invalidation of section 15 on overbreadth grounds.
The government has not and could not demonstrate that all movies rated R are indecent. See Action for Children's Television v. FCC, 271 U.S. App. D.C. 365, 852 F.2d 1332, 1339 (D.C. Cir. 1988) (citing City of Houston v. Hill, 482 U.S. 451, 96 L. Ed. 2d 398, 107 S. Ct. 2502 (1987)). It is simultaneously under-inclusive in failing to address identical uninvited indecency originating from non-cable television sources; the law does not apply to broadcasters that carry uncut R or NC-17 movies. Finally, it is not difficult to envision less onerous alternatives, short of continuous notice for 30 days, which would adequately alert sensitive or impressionable viewers (or their parents) to the forthcoming shock of sexually explicit material likely to offend.
Premium channels offered on cable are not "pervasive" in the Pacifica sense, i.e., in that questionable material ambient in the airwaves can be made to appear without warning on a television screen merely by turning on the set or throwing a channel selector switch. Like a subscription to a publication with "indecent" material or "900" telephone numbers, someone in the household must take affirmative steps to bring a premium channel into the home. See Sable, 492 U.S. at 127-28; Bolger v. Youngs Drug Products Corp., 463 U.S. 60, 73-74, 77 L. Ed. 2d 469, 103 S. Ct. 2875 (1983). The householder must subscribe to it, and thereafter retain it by paying the bill. Cruz v. Ferre, 755 F.2d 1415, 1420 (11th Cir. 1985). Parents also have the ability to block the reception of certain channels by use of "lock boxes" or similar devices which must be provided by cable operators on request. 47 U.S.C. § 544(d) (1988).
Numerical Limitations on Subscribers
A portion of section 11(c) of the 1992 Act directs the FCC to prescribe rules and regulations "establishing reasonable limits on the number of cable subscribers" a cable operator is authorized to reach through cable systems it owns or in which it has an attributable interest. The government contends that this provision is essential to promote competition in the cable industry; horizontal, no less than vertical, combination and expansion threaten to concentrate cable facilities in a few market-dominant entities. The plaintiffs challenge this provision on the ground that it directly interferes with the operators' ability to "speak" to as large an audience of their choice as possible. The Court holds that this provision is unconstitutional.
In Grosjean v. American Press Co., 297 U.S. 233, 80 L. Ed. 660, 56 S. Ct. 444 (1936), the Supreme Court struck down a sales tax imposed on newspapers with a circulation of more than 20,000 copies per week, holding that, although newspapers may not enjoy immunity from general taxation, a tax calculated to "limit the circulation of information to which the public is entitled" is wholly inconsistent with the First Amendment. Id. at 250. The plaintiffs contend that a numerical limitation on the quantity of subscribers a cable operator is permitted to enroll is constitutionally indistinguishable from a tax graduated upon the quantity of a newspaper's circulation.
The federal defendants counter that the subscription limitation statute is subject only to O'Brien/Ward scrutiny, serving content-neutral purposes as it does, namely, to stem horizontal concentration in the cable industry, as well as to promote diversity of speakers. Even if content-neutral, however, and O'Brien/Ward thus supplying the appropriate standard by which the provision is to be judged, there would appear to be no circumstances under which the FCC could adopt constitutionally compatible regulations. Even content-neutral regulations may not burden substantially more speech than necessary, and must leave open ample alternative means of reaching an audience. See Ward, 491 U.S. at 802-03. Any governmentally ordained quota on the number of subscribers a cable operator may reach leaves the operator with absolutely no intra-medium means of speaking to the remainder of its potential audience. The First Amendment protects the right of every citizen to reach the minds of any willing listeners and, thus, the speaker's opportunity to win their attention. Heffron, 452 U.S. at 655 (citations omitted).
Three of the provisions challenged by the plaintiffs fail, so far as this Court can discern, to implicate the First Amendment to any significant extent at all. These are the provisions abrogating the statutory immunity that private cable operators formerly enjoyed for liability for the transmission of obscenity; the provisions immunizing municipally owned cable operators from civil liability to private competitors for money damages; and the retransmission consent provisions. All of these provisions are compatible with the First Amendment.
Elimination of Immunity for Obscenity Carried on PEG and Leased Access Channels
As previously noted, cable operators may not exercise any editorial control over the PEG or leased access channels they are required to carry. The 1984 Act conferred immunity from state law liability upon cable operators who transmitted obscene material included in the obligatory PEG and leased access programming. 47 U.S.C. § 558 (1988). Section 10(d) of the 1992 Act removes all immunity for carriage of obscenity.
The plaintiffs, and the American Civil Liberties Union as amicus, contend that potential liability for obscenity carried on PEG and leased access channels impermissibly burdens speech by creating an unacceptable incentive to operator self-censorship. Without immunity, they argue, operators will be forced to screen their PEG and leased access programming for material that might be deemed obscene, and the more timorous among them will become so apprehensive that they will voluntarily refuse to carry controversial programming that might nevertheless enjoy full constitutional protection.
The danger of self-censorship induced by the ambiguity inherent in the concept of obscenity itself has never been held to mandate a constitutional requirement for general immunity from obscenity laws for anyone. In other words, no speakers -- cable operators included -- have a constitutional right to immunity to relieve them of anxiety about crossing the threshold from the risque to the obscene. Congress' earlier decision to provide cable operators with immunity was a matter of grace that it has always been free to rescind.
Municipal Affiliation with Operators and Immunity from Damage Liability
Section 7(c) of the 1992 Act permits municipally owned cable enterprises to compete with private operators, and relieves municipally owned systems of franchising requirements. Section 24 of the 1992 Act exempts municipalities from civil damages liability arising out of local regulation of cable services. The plaintiffs contend that section 24 is constitutionally suspect because it raises temptation for public cable operators to censor or punish their private competitors.
Section 7(c), on its own, is innocuous. Legislation authorizing the creation of municipal cable franchises to compete with private operators does not, by itself, violate the First Amendment or raise a free speech issue. Warner Cable Communications, Inc. v. Niceville, 911 F.2d 634, 635-40 (11th Cir. 1990), cert. denied, 115 L. Ed. 2d 1007, 111 S. Ct. 2839 (1991). The plaintiffs' real quarrel is with section 24's creation of damages immunity.
To sustain this as a facial challenge, however, the plaintiffs must demonstrate that section 24 creates such a likelihood of undetectable censorship that as-applied challenges to specific acts of suspected municipal persecution of private cable operators as they occur will be ineffective. Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750, 755-69, 100 L. Ed. 2d 771, 108 S. Ct. 2138 (1988).
Plaintiffs' premise is that immunity for civil damages alone makes censorship virtually inevitable; municipalities will view the absence of damage liability as a license to censor. The argument is suggested by the Supreme Court's disapproval of differential taxation schemes when imposed on the media, because "the press plays a unique role as a check on government abuse, and a tax limited to the press [or a small segment of the press] raises concerns about censorship of critical information and opinion." Leathers v. Medlock, 499 U.S. 439, 113 L. Ed. 2d 494, 111 S. Ct. 1438, 1443 (1991) (discussing Grosjean v. American Press Co., 297 U.S. 233, 80 L. Ed. 660, 56 S. Ct. 444 (1936); Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue, 460 U.S. 575 (1983); and Arkansas Writers' Project v. Ragland, 481 U.S. 221, 95 L. Ed. 2d 209, 107 S. Ct. 1722 (1987)).
The Court not only finds the hypothesis conjectural; it also concludes that the continuing availability of declaratory and injunctive relief is sufficient of itself to protect against municipal abuses of power if and when they should occur, and that municipal retaliation on the basis of content will be sufficiently apparent in the circumstances to ensure the effectiveness of "as applied" challenges.
Congress found that claims against municipalities for civil damage liability related to their regulatory activities of the cable industry were posing "a potentially crippling burden" on local governments and their ability to provide vital public services to their citizens. S. Rep. No. 92, 102d Cong., 1st Sess. 48-50 (1991). The legislative history of the 1992 Act makes clear that in delegating franchising authority to local governments in the 1984 Act, Congress never anticipated the extent of their exposure to the liability they now confront. Id. Elimination of that exposure is thus designed to preserve the municipal franchising and regulation scheme envisioned by the 1984 Act, a factor having nothing whatsoever to do with the operators' constitutionally vouchsafed right to criticize local authority. The differential taxation line of cases is inapposite.
Section 6 of the 1992 Act directs the FCC to implement regulations prohibiting cable operators from carrying broadcast signals without the consent of the originating broadcaster. In conjunction with the must-carry provisions of section 4 of the 1992 Act, section 6 thus provides broadcasters with the enviable election between demanding mandatory carriage of the programming they cannot sell, and negotiating a price for that which is in demand. Daniels Cablevision, Inc. ("Daniels") perceives the effect of section 6 as a "prior restraint" on cable operators' speech because it places a condition on their carriage of material that the broadcaster itself has placed in the public domain.
Congress has independent constitutional authority, however, to provide creative artists -- and broadcasters are arguably such -- with copyright protection for their work. U.S. Const. Art. I, § 8, cl. 8; see United Video, Inc. v. FCC, 281 U.S. App. D.C. 368, 890 F.2d 1173, 1191 (D.C. Cir. 1989). Daniels responds that while Congress might have extended copyright protection to broadcasters it has not done so, at least in so many words. Instead, Daniels argues, Congress has passed a separate law ostensibly having to do with telecommunications, never once adverting to its copyright powers.
Similar arguments were dismissed by the D.C. Circuit in United Video. Congress clearly could have amended the copyright law to provide infringement remedies for cable retransmission of broadcast material. But it is not constitutionally significant that Congress has done in the Cable Act what it otherwise could have done in the Copyright Act. Whatever title of the United States Code Congress chooses to place its law in, the law is still authorized by Congress' Article I power. United Video, 890 F.2d at 1191; see Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562, 53 L. Ed. 2d 965, 97 S. Ct. 2849 (1977).
For the foregoing reasons, it is, this 16th day of September, 1993,
ORDERED, that the plaintiffs' motions for summary judgment on the claims other than must-carry are granted in part and denied in part; and it is
FURTHER ORDERED, that the federal defendants' motion for summary judgment on the claims other than must-carry is granted in part and denied in part; and it is
FURTHER ORDERED, that judgment is entered in favor of the plaintiffs insofar as they have challenged as unconstitutional sections 15 and 25 of the 1992 Cable Act and that portion of section 11(c) of the 1992 Cable Act amending the Communications Act of 1934 to include new section 613(f)(1)(A); and it is
FURTHER ORDERED, that the plaintiffs' claims, insofar as they challenge sections 3, 6, 7(b)(4)(B), 7(c), 9, 10(d), 19 and 24 of the 1992 Cable Act, those portions of section 11 of the 1992 Cable Act not declared unconstitutional by this Court, and sections 611 and 612 of the 1984 Act, will be dismissed with prejudice; and it is
FURTHER ORDERED, the Court being of the opinion that controlling questions of law are involved herein as to which there is substantial ground for difference of opinion, and that an immediate appeal may materially advance the ultimate termination of this litigation, pursuant to 28 U.S.C. § 1292(b), that all further proceedings herein, including determination and imposition of the relief appropriate in the circumstances, are stayed pending completion of proceedings on any appeal permitted to be taken here from on application therefor made within 10 (ten) days; and it is
FURTHER ORDERED, that all other pending motions herein (except motions for intervention which are held in abeyance) are denied as moot; and it is
FURTHER ORDERED, that these cases are set for a status and scheduling call on December 17, 1993 at 9:30 am.
Thomas Penfield Jackson
U.S. District Judge