Opposition Brief — National Ass'n of Broadcasters v. Quincy Cable TV, Inc.

Suprame Court, U.S.

RFLiLLED

QCT 25 1985

No. 85-502 JOSEPH F. SPANIOL, JR.

a

| eed

IN THE Awe.

Supreme Court of the United States

OCTOBER TERM, 1985

NAs10ONAL ASSOCIATION OF BROADCASTERS, et al.,

Petitioners,

¥

QUINCY CABLE TV, INC., et al.,

Respondents.

On Petition for a Writ of Certiorari io the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR RESPONDENT

NATIONAL CABLE TELEVISION ASSOCIATION, INC.

IN OPPOSITION

BRENDA L. Fox

MICHAEL S. SCHOOLER *

1724 Massachusetts Ave., N.W.

Washington, D.C. 20036

(202) 775-5664

Counsel for National Cable

Televisiow Association, Inc.

* Counsel of record

October 25, 1985

AE ATEN LE NEA AEOLIAN ott PE SY: IS

WILSON - EPES PRINTING Co., INC. - 789-O0S6 - WASHINGTON, D.C. 26001

QUESTIONS PRESENTED

The court below held that the Federal Communications

Commission’s “must carry” rules, which required cable

television operators to carry on their systems all local

television stations, were “fundamentally at odds with the

First Amendment.” Although the FCC has decided not

to seek review of the decision, a number of broadcasters

and their representatives have petitioned this Court for

a writ of certiorari. The questions presented for review

are:

1. Do cable systems, in the production of program-

ming and the selection of broadcast signals, satellite-

delivered program services, locally originated program-

ming, and other program material to be offered on their

channels to subscribers, engage in editorial discretion

that is protected by the First Amendment?

2. Did the court below correctly conclude that—even

under the lenient First Amendment standards that ap-

ply to mere incidental restraints on protected speech,

and even assuming that the FCC’s asserted purpose for

the must carry rules was a substantial governmental in-

terest—the FCC had failed to demonstrate that the rules

in fact furthered their intended purpose and that the

rules were, in any event, “grossly overinclusive’ and

“insufficiently tailored to justify their substantial inter-

ference with First Amendment rights’’?

(i)

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED .....2.2.2..2.2.-.-2--cecceceeceeeeeeeees i

TABLE OF AUTHORITIES ...00202.00.2.22202..:-c:e-000- haauuiile iv

STATEMENT OF THE CASE 0.022222... ceeeeeeeeeeeeeeeeeeeees 2

it aisle nsltrcticncionbsinibientbianincennes 4

I. The Decision Below Properly Applies First

Amendment Principles and Standards Estab-

lished by this Court and Raises No Novel Con-

ESET SEE CS TE OTC 4

II. The Decision Below Is Not in Conflict with

Previous Decisions of this Court Regarding

SR TTR TI SL RE Oe EE : 11

III. There Is No Conflict Among the Circuits ............ 15

IV. The FCC Is Not Seeking Review of the Decision

Below 1a LAUER RE OIRO 18

ST ne ae 19

(iii)

iv

TABLE OF AUTHORITIES

CASES: Page

Black Hills Video Corp. v. FCC, 399 F.2d 65 (8th

Ce Be wicca Sastndeainei ce Ate eesene 15

Buckley v. Valeo, 424 U.S. 1 (1976) .........2200.0220..... 6

Capital Cities Cable, Inc. v. Crisp, 104 S. Ct. 2694

SITE siscacascgievsabsechsensnche ciceelabaenleciagtannsateiodsaition el 12, 13, 15

City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S.

RR RB ERRaaeaeneeeeNaniyemomeke mem se 12

Columbia Broadcasting System, Inc. v. Democratic

National Committee, 412 U.S. 94 (1978) ............ 5, 15

Community Communications Co. v. City of Boulder,

630 F.2d 704 (10th Cir. 1980), rev’d, 455 U.S. 40

I icles cotanaacicatcncieeddajen iii ce adaleamsaeniaiasamaneks 17

Community Communications Co. v. City of Boulder,

GOd Fie tare CGR Cat. B0GE) ace... 17

Cruz v. Ferre, 755 F.2d 1415 (11th Cir. 1985) _...... 17

FCC v. Midwest Video Corp., 440 U.S. 689 (1979) ..passim

Fortnightly Corp. v. United Artists Television,

RRR er ae eres 13

Great Falls Community TV Cable Co. v. FCC, 416

yf RRP nce eI 16

Home Box Office, Inc. v. FCC, 567 F.2d 9 (D.C.

Cir.), cert. denied, 434 U.S. 829 (1977) ............... 10, 17

Miami Herald Publishing Co. v. Tornillo, 418 U.S.

BO MI: ohciistcpesnisstcosssdcamanscteemnienenguneasieunmnceteed 5, 6, 15, 16

Midwest Video Corp. v. FCC, 571 F.2d 1025 (8th

Cir. 1978), aff’d, 440 U.S. 689 (1979) 16, 17

Omega Satellite Products v. City of Indianapolis,

Ob6 F.2d 119 (ie Cir. 1968) ............................ a 17

Preferred Communications, Inc. v. City of Los

Angeles, 754 F.2d 1396 (9th Cir. 1985), jurisdic-

tional statement filed, 54 U.S.L.W. 3170 (U.S.

Sent. 24, 1966) (No. 85-390) ................................ 16, 17

Tele-Communications of Key West, Inc. v. United

States, 757 F.2d 1415 (D.C. 1985) ..........0000000000.... 17

Teleprompter Corp. v. Columbia Broadcasting Sys-

Sas, Feet, GE TER. TG CITE) anccecienenennnscn cece. 18, 14

United States v. Midwest Video Corp., 406 U.S.

RRR niet AR rere ae eee es 11,12

Vv

TABLE OF AUTHORITIES—Continued

Page

United States v. O’Brien, 391 U.S. 867 (1968) ....6. 7, 9, 18

United States v. Southwestern Cable, 392 U.S. 157

SUID wehcnstasotcchpsoileciteieeeccatniusted ate ee 11, 12

CONSTITUTIONAL AND

STATUTORY PROVISIONS

i EET TR ST passim

Copyright Act of 1909, 17 U.S.C. §§1 et seg.

GA EIE : Seaaincishitincnpeieteestaicibandiuniaaa arene ee 13

Copyright Act of 1976, 17 U.S.C. § 111 _...0 14

Communications Act of 1934, as amended, 47

ae Ge Ree OF WOE eke eee 11

LEGISLATIVE MATERIALS:

H.R. Rep. No. 98-934, 98th Cong., 2d Sess. (1984) .. 15

IN THE

Supreme Court of the United States

OCTOBER TERM, 1985

No. 85-502

NATIONAL ASSOCIATION OF BROADCASTERS, ¢t al.,

‘ Petitioners,

QUINCY CABLE TV, INC., ct al.,

Respondents.

-

On Petition for a Writ of Certiorari to the

United States Court ef Appeals

for the District of Columbia Circuit

BRIEF FOR RESPONDENT

NATIONAL CABLE TELEVISION ASSOCIATION, INC.

IN OPPOSITION

The National Cable Television Association, Ince.

(“NCTA”), respectfuily submits this brief in opposition

to the Joint Petition for Writ of Certiorari filed by a

number of broadcasters and their representatives

(“Broadcasters”). NCTA is the principal trade associa-

tion representing cable television operators in the United

States. Its members operate more than 2,100 cable sys-

tems serving more than 70 percent of the nation’s ap-

proximately 40 million cable television subscribers.

NCTA was an intervenor in the proceedings below and

is, therefore, a respondent in this proceeding.

1 NCTA has no parent companies, subsidiaries or affiliates.

2

STATEMENT OF THE CASE

On July 19, 1985, a panel of the United States Court

of Appeals for the District of Columbia Circuit unani-

mously held that the Federal Communications Commis-

sion’s “must carry” rules, which generally required cable

television systems to retransmit the signals of all televi-

sion stations that were “significantly viewed” or other-

wise deemed “local” by the FCC, were “fundamentally at

odds with the First Amendment and, as currently

drafted, can no longer be permitted to stand.”* The

court found that the rules interfered with cable opera-

tors’ editorial discretion in the selection of the program-

ming to be transmitted on their channels and that, even

under the most lenient of First Amendment standards,

the FCC had completely failed to demonstrate that this

infringement was necessary or sufficiently tailored to

serve a substantial interest. Accordingly, in resolving

the two specific cases on review, the court reversed the

FCC’s orders (1) imposing a fine on Quincy Cable TV,

Inc. for failure to comply with the must carry rules and

(2) denying Turner Broadcasting System, Inc.’s petition

for a rulemaking proceeding to reconsider and delete the

existing must carry rules in light of their effect on First

Amendment rights.

On August 2, 1985, the FCC, “after much thought

about the role of the must carry rules in the mass media

marketplace today,” * decided not to seek rehearing or

Supreme Court review of the decision and indicated that

it would decline the Court of Appeals’ invitation to at-

tempt, sua sponte, “to redraft the rules in a manner more

sensitive to. . . First Amendment concerns.” * Its Chair-

* Slip Opinion, reprinted in Petitioners’ Appendix (“Pet. App.”)

at 8a (emphasis added).

3 Public Notice, Aug. 2, 1985 (Statement of Chairman Fowler and

Commissioners Dawson and Patrick), Pet. App. at 138a.

* Slip Opinion, Pet. App. at 60a.

3

man has made clear, however, that, the FCC “never in-

tended . . . to preclude any party from coming forward

with a proposal which would include a set of carefully

crafted mandatory carriage rules, and a clear justifica-

tion of the policy aims and constitutionality of such

rules.”5> The FCC would, according to the Chairman,

“carefully consider any such petition” in a full rulemak-

ing proceeding.* Several of the petitioners in this pro-

ceeding are among those who have subsequently filed pe-

titions asking the FCC to institute such a proceeding.’

Meanwhile, making no effort to obtain rehearing

either by the three-judge panel or by the full Court of

Appeals, the Broadcasters asked the Court of Appeals to

stay issuance of its mandate pencing disposition of the

petition for certiorari that they intended to file in this

Court. On September 3, 1985, the Court of Appeals de-

nied the Broadcasters’ motion. The Broadcasters were

similarly unsuccessful in obtaining a stay from the Chief

Justice,? and the Court of Appeals issued its mandate on

September 10, 1985.

\

5 Letter from Chairman Mark S. Fowler to Senator Barry Gold-

water (Septemer 24, 1985).

8 Id.

7 Three such petitions have been filed by: (1) the National Associa-

tion of Broadcasters, Association of Maximum Service Telecasters,

Station Representatives Association, American Broadcasting Com-

panies, Inc., CBS, Inc., National Broadcasting Company, Irk., ABC

Television Affiliates Association, Spanish International Communica-

tions Corporation, Bahia de San Francisco Television Company, the

Seven Hills Television Company, and National Religious Broadcast-

ers; (2) the Association of Independent Television Stations, Inc.;

and (3) the National Association of Public Television Stations, the

Public Broadcasting Service, and the Corporation for Public

Broadcasting.

8 Order (Sept. 3, 1985).

® Order (Sept. 9, 1985).

4d

ARGUMENT

This is not an appropriate case for review by this

Court. First, the decision below, which is carefully lim-

ited to the must carry rules “in their current form,” '

properly applies well-established First Amendment prin-

ciples and raises no novel constitutional issues. Second,

the decision is not, as the Broadcasters contend, “incon-

sistent with the result reached in several decisions of this

Court”; *' this Court has never upheld the constitution-

ality of the must carry rules or held that cable’s pro-

tected exercise of editorial discretion is limited to the

retransmission of non-broadcast programming. Third,

the decision below does not create a conflict among the

circuits.

Finally, the agency whose rule has been invalidated is

not seeking review of the decision below. While the

Broadcasters accuse the court below of second-guessing

the FCC’s supposed determination that the existing must

carry rules were “the minimum measures necessary” ”

to protect important policy objectives, the FCC has ob-

viously concluded that those rules are not at all crucial

to its task of furthering the public interest.

I. The Decision Below Properly Applies First Amend-

ment Principles and Standards Established by this

Court and Raises No Novel Constitutional Issues.

The Court of Appeals held that the must carry rules

infringe fundamental First Amendment rights because

they interfere with the editorial discretion of cable opera-

tors in selecting the programming to be transmitted to

subscribers on their systems. Moreover, the rules give

preferential treatment and, in some cases, “an over-

whelming competitive advantage’ to one group of

1 Slip Opinion, Pet. App. at 60a.

11 Petition at 12.

2 Petition at 20.

13 Slip Opinion, Pet. App. at 36a.

5

speakers—local broadcasters—at the expense of non-

broadeast cable programmers.

That such effects would be held by this Court to con-

stitute serious infringements of First Amendment rights

is indisputable. In cases involving both newspapers and

broadcasters. the Court has emphasized the fundamental

protection that the First Amendment affords to the exer-

cise of editorial discretion—the “selection and choice of

material” to be provided by the media.** And in FCC v.

Midwest Video Corp., 440 U.S. 689, 707 (1979), the

Supreme Court made clear that cable operators also ex-

ercise “a significant amount of editorial discretion re-

garding what their programming will include.” ™

The Court’s decisions generally indicate that intrusions

on the editorial discretion of the media are not merely

“incidental” restrictions on speech but constitute direct

suppression of speech. Such restrictions are generally

4 Columbia Broadcasting System, Inc. v. Democratic Nat’l Comm.,

412 U.S. 94, 124 (1973). See also Miami Herald Publishing Co. v.

Tornillo, 418 U.S. 241, 258 (1974) (“The choice of material to go

into a newspaper, and the decisions made as to limitations on the

size and content of the paper . . . constitute the exercise of editorial

control and judgment. it has yet to be demonstrated how govern-

mental regulation of this crucial process can be exercised consistent

with First Amendment guarantees of a free press as they have

evolved to this time.”)

1 The Court of Appeals accurately described the evclution of

cable’s editorial role:

Although in cable’s infancy cable operators served exclusively

as passive conduits of broadcast signals, their editorial role has

expanded dramatically over the course of the industry’s brief

history .... [O|jperators now select from “a rich variety” of

additional options, including locally originated cablecasts, and

the programming of over 40 independent cable networks, which

offer such diverse fare as movies, sports, news, live coverage of

public events, and specialized presentations aimed at individual

segments of the national audience.

Slip Opinion, Pet. App. at 37a-38a.

6

impermissible and can only be justified by a “compelling”

state interest, such as national secur‘ty. The so-called

O’Brien balancing test—under which a regulation that

has only an incidental impact on speech is permissible if

“it furthers an important or substantial governmental

interest and if the incidental restriction on alleged First

Amendment freedoms is no greater than is essential to

the furtherance of that interest” “—does not generally

apply to constraints on editorial discretion.

As the Court of Appeals pointed out,

[ijn Miami Herald [Publishing Co. v. Tornillo, 418

U.S. 241 (1974)], the Court faced a constitutional

challenge to a Florida statute that required news-

papers to grant a right to reply to political candi-

dates attacked in earlier editions. Without so much

as alluding to even the possibility of a subordinating

governmental interest, the Court invalidated the

statute. Forcing an editor to print that which he

otherwise would not, the Court held, was a restraint

the First Amendment simply would not tolerate.”

Therefore, the Court of Appeals had “serious doubts

about the propriety of applying the standard of review

reserved for incidental burdens on speech” * and would

have been well within the ambit of Supreme Court prece-

dents had it applied a more stringent standard.’ The

court did not, however, reach the fundamental question

16 United States v. O’Brien, 391 U.S. 367, «7 (1968).

17 Slip Opinion, Pet. App. at 39a-40a (emphasis added).

18 Td, at 39.

19 In addition to their intrusion on editorial discretion, the must

carry rules also infringe First Amendment rights insofar as they

favor one class of speakers (local broadcasters) over others (cable

programmers). This, too, is more than a mere incidental infringe-

ment. As this Court held in Buckley v. Valeo, 424 U.S. 1, 48-49

(1976), “the concept that government may restrict the speech of

some elements of society in order to enhance the relative voice of

others is wholly foreign to the First Amendment.”

7

of which standard to apply because it found that, even

under the less restrictive O’Brien test—and even assum-

ing that the FCC’s asserted interest in “preserving free,

locally-oriented television” *° was sufficiently substantial **

—the rules were clearly impermissible.

The Broadcasters argue that, in applying the O’Brien

test, the Court of Appeals acted as a “‘super-agency” and

“substitute[d] its judgment concerning the appropriate-

oo

ness of” the must carry rules.** But this is hardly a case

of the Court of Appeals second-guessing or encroaching

on the expertise of an agency. The court invalidated the

must carry rules because the FCC failed to make even a

minimal showing that those rules were necessary or effec-

tive in promoting their intended objective.

The court found, first, that the Commissicn had “failed

adequately to demonstrate that an unregulated cable in-

dustry poses a serious threat to local broadcasting and,

*” Slip Opinion, Pet. App. at 41a. In its brief in the Court of

Appeals, the FCC asserted that the “paramount public interest”

underlying the rules was “the preservation of free local television

service,” FCC Brief at 41 (July 25, 1984), and that their purpose

was “to insure that cable television systems distribute television

signals and other services to the American public without destroying

or endangering the basic television broadcast service which has been

developed under the Communications Act of 1934.” Jd. at 16

(emphasis added).

21 See Slip Opinion, Pet. App. at 41a-42a:

The Commission contends that the must-carry rules serve the

interest of preserving free, locally-oriented television. The

difficult question whether, taken as an abstract proposition,

that interest is sufficiently weighty to warrant the rules’ inter-

ference with First Amendment rights must await resolution in

another case. For even if we accept the common wisdom that

the goal of encouraging ‘localism’ qualifies as ‘important or sub-

stantial,’ United States v. O’Brien, supra, 391 U.S. at 377, we

would be unable to find that the FCC has carried its heavy

burden of justification.

22 Petition at 21.

8

more particularly, that the must carry rules in fact serve

to alleviate that threat.” ** This was not a close call. As

the court demonstrated, the FCC had mustered no evi-

dence at all to support the need for, or effectiveness of,

the rules:

In the two decades since the rules’ original promul-

gation, the Commission has never seriously exam-

ined any of the admittedly speculative links in the

chain of reasoning advanced in support of the rules.

In particular, it has never sought support for the

assumptions that are the linchpins of its analysis:

(1) that without protective regulations cable sub-

scribers would cease to view locally available off-the-

air television either because they would disconnect

their antennas or because the inconvenience of a

switching device would deter them; and (2) that

even if some cable subscribers did abandon local iele-

vision, they would do so in sufficient numbers to

affect the economic vitality of local broadcasting.**

23 Slip Opinion, Pet. App. at 51a.

+t Jd. at 48a. The court might also have added that the Commis-

sion never even demonstrated that, in the absence of must carry

rules, cable operators would be likely to drop a significant number

of local broadcast signals. Indeed, there is no reason to expect any

wholesale reordering of the status quo now that the rules are gone.

With or without the must carry rules, cable operators will continue

to carry most local bisadcast signals. Local broadcast signals

command a major share of cable subscriber viewership nationwide.

Therefore, cable operators have every economic incentive to continue

carriage of those signals and no incentive to undertake a restructur-

ing of the broadcast-cable relationship.

Although some broadcast stations undoubtedly will be removed

from cable systems, these will generally be stations that simply

duplicate network programming available on another local station

or that have little appeal to cable subscribers. This is most likely to

occur where the cable system’s channel capacity is fully utilized and

the cable operator chooses to replace the must carry station with

other programming that is more attractive to subscribers or that is

otherwise desirable, for non-economic reasons, in the operator’s

editorial judgment.

9

Second, the court found, with equal ease, that even if

the must carry rules could be viewed as furthering the

substantial governmental interest of preserving local

broadcasting, the rules, in their existing form, had a far

more extensive impact on protected speech than could

conceivably be justified or required by that interest. The

court “stress[ed] that ‘[w]e are not quibbling over fine-

tuning’. ... [I]t is difficult to imagine a less discrim-

inating or more overinclusive means of furthering the

Commission’s stated objectives.” ** As the court pointed

out,

[t]he rules indiscriminately protect each and every

broadcaster regardless of the quantity of local serv-

ice available in the community and irrespective of

the number of local outlets already carried by the

cable operator. The 18th station is entitled to car-

riage no less than the first even if its programming

is virtually duplicative of the viewing fare already

transmitted over the cable system. Indeed, it is en-

titled to carriage even if it carries no local program-

ming at al).

In sum, the Court of Appeals had no difficulty deter-

mining that, even under the O’Brien test—a test more

tolerant of First Amendment intrusions than that which

the Supreme Court typically applies in cases involving

interference with editorial discretion of the media—the

must carry rules could not be upheld. This was not; as

the Broadcasters suggest, a sweeping constitutional hold-

ing “extending Tornillo’s condemnation of ‘coerced speech’

to virtually any regulation affecting a cable television

operator’s control over the use of cable channels.” *" It

was simply a finding, with respect to these particular

rules, that the Commission had “failed entirely to deter-

25 Jd. at 53a, quoting FEC v. Nat'l Conservative Political Action

Comm., 105 S. Ct. 1459, 1471 (1985).

26 Jd. at 54a (footnotes omitted).

27 Petition at 16.

10

mine whether the evil the rules seek to correct ‘is a real

or merely a fanciful threat,” ** and that the rules in

any event, are “ ‘grossly’ overinclusive” *® and “insuffi-

ciently tailored to justify their substantial interference

with First Amendment rights.” *°

The Broadcasters do not attempt to rebut the court’s

dispositive findings. They do not point to any evidence

that the must carry rules are necessary to the viability

of local broadcasting, and they offer no answer at all as

to why the rules should provide guaranteed carriage to

all local broadcasters, “regardless of the quantity of local

service available in the community and irrespective of the

number of local outlets already carried by the cable op-

erators.” *

Indeed, in their recently filed joint petition for rule-

making at the FCC, the National Association of Bread-

casters, Association of Maximum Service Telecasters and

other broadcasters essentially concede that the FCC’s pol-

icy objectives could be achieved with rules that were

“more narrowly and flexibly drawn.” ** While seeking to

persuade this Court that the decision below leaves the

FCC “virtually helpless” ** in seeking to ensure that cable

television does not threaten the viability of local broad-

casting, the Broadcasters have assured the FCC that

“ltlhe Quincy Cable decision provides room for new rules

which satisfy the Court’s constitutional objectives while

accomplishing Commission aims, benefiting viewers and

28 Id. at 60a, quoting Home Box Office, Inc. v. FCC, 567 F.2d 9,

50 (D.C. Cir.), cert. denied, 434 U.S. 829 (1977).

29 Id. at 54a, quoting Home Box Office, Inc. v. FCC, supra, 567

F.2d at 50.

” Id. at 60a.

31 Jd. at 54a.

32 Petition for Rulemaking, supra note 7, at iv.

33 Petition at 12.

11

accommodating the essential concerns of broadcasters and

cabie operators.” ** If, as the unanimous court found, and

as the Broadcasters seem to concede, the rules were nei-

ther necessary nor narrowly tailored to achieve the FCC’s

asserted policy objectives, then their intrusion on editorial

discretion was unwarranted under the First Amendment

standards set forth by this Court.

It. The Decision Below Is Not in Conflict with Previous

Decisions of this Court Regarding Cable Television.

Instead of coming to grips with the fundamental! flaws

and excesses of the must carry rules, the Broadcasters

argue that the court’s decision somehow conflicts with de-

cisions of this Court. No such conflict exists.

The Broadcasters attempt, first, to show that this Court

has already found the must carry rules to be consistent

with the First Amendment. But in none of the cases

cited by the Broadcasters did the Court even consider the

constitutionality of the rules. As the Court of Appeals

correctly pointed out, the issue in the Supreme Court

cases cited by the Broadcasters was the scope of the

FCC’s statutory jurisdiction, under the Communications

Act of 1934, as amended,** to impose regulations on cable

television systems:

On several occasions the Supreme Court has ad-

dressed questions concerning the preadth of the

FCC’s jurisdiction over cable television. See United

States v. Southwestern Cable Co., [892 U.S. 157,

178 (1968) ] (generally approving FCC jurisdiction

over cable if ‘reasonably ancillary’ to its regulation

of broadcast television) ; United States v. Midwest

Video Corp., 406 U.S. 649 (1972) (Midwest 1)

(finding rule requiring cable operators to originate

local programming within FCC’s jurisdiction) ; FCC

v. Midwest Video Corp., 440 U.S. 689 (1979) (Mid-

34 Petition for Rulemaking, supra, at 18.

35 47 U.S.C. §§ 151 et seg.

12

west II) (striking down as beyond the FCC’s juris-

diction rules requiring cable operators to make chan-

nels available for local access). See also Capital

Cities Cable, Inc. v. Crisp, supra, 104 S. Ct. 2694

(discussing federal preemption of state laws regu-

lating cable) .**

The notion that this Court, in ruling on the FCC’s

statutory jurisdiction to adopt certain cable regulations,

was also implicitly deciding the constitutionality of the

regulations encompassed by that jurisdiction is wholly at

odds with the Court’s general policy of not deciding con-

stitutional issues whenever it can resolve a case on non-

constitutional grounds.** Indeed, the Court of Appeals

addressed and effectively rebutted the argument that, in

the cases cited by the Broadcasters, the Court found the

must carry rules to be constitutionally permissible:

In Southwestern Cable the Court explicitly dis-

claimed reaching any question concerning the valid-

ity of the FCC’s cable rules. 392 U.S. at 167. In

Midwest I the plurality opinion suggested in a foot-

note that the Eighth Circuit had correctly upheld the

validity of several cable regulations. 406 U.S. at

659 n.17. However, the context of the reference

makes clear that the plurality meant to suggest

merely that the Eighth Circuit had correctly held

that the particular rules at issue were within the

standard set out in Southwestern Cable for testing

the reach of the FCC’s jurisdiction. In any event, as

the Midwest II Court later acknowledged, the plural-

ity’s footnote in Midwest I was pure ‘dicta.’ 440

U.S. at 697 n.7. Inceed, the M’dwest IJ Court,

though not reaching any constitutional questions im-

plicated by the particular regulations before it, de-

36 Slip Opinion, Pet. App. at 18a-19a.

37 See, e.g., City of Mesquite v. Aladdin’s Castle, Inc., 455 U.S.

283, 294 (1982).

13

scribed those questions as ‘not frivolous.’ 440 U.S.

at 709 n.19.%*

Second, the Broadcasters argue that the Court of Ap-

peals’ holding that cable operators exercise editorial dis-

cretion in selecting program services to fill their chan-

nels is at odds with two copyright decisions of this

Court—Fortnightly Corp. v. United Artists Television,

Inc., 392 U.S. 390 (1968), and Teleprompter Corp. v.

Columbia Broadcasting Systems, Inc., 415 U.S. 394

(1974). Those two cases held that, for purposes of the

now obsolete Copyright Act of 1909, the retransmission

of broadcast signals by cable operators was not a “per-

formance” of copyrighted works and therefore was not

subject to copyright liability. Retransmission of broad-

38 Td. at 19a n.20. In Capital Cities Cable, Inc. v. Crisp, 104 S. Ct.

2694 (1984), the Court found that it was within the FCC’s jurisdic-

tion to regulate—and to preempt state and local regulation of—

signal carriage. Because an Oklahoma statute prohibiting carriage

of wine and liquor advertising had the effect of preventing cable

systems in Oklahoma from carrying certain out-of-state broadcast

stations (some of which were required to be carried by the must

carry rules) on their systems, the Court held that the prohibition

was in conflict with the FCC’s general preemption of signal car-

riage regulation and also with the must carry rules and was there-

fore invalid. The Court, however, specifically disavowed any impli-

cations regarding the constitutionality of the must carry rules:

Relying upon the Court’s decision in FCC v. Midwest Video

Corp., 440 U.S. 689 (1979), respondent contends that the FCC

rules and regulations reflecting the agency’s intent to pre-empt

all state regulation of cable signal carriage violate the First

Amendment rights of cable operators by depriving them of

editorial control over the signals they carry, and therefore

may not be invoked as a basis for pre-emption. We need not

consider the merits of this claim, however, since respondent

plainly lacks standing to raise a claim concerning his adver-

saries’ constitutional rights in a case in which those adversaries

have never advanced such a claim.

104 S. Ct. at 2761 n.6 (emphasis added).

39 See 17 U.S.C. $§ 1 et seq. (1976).

14

east signals did not have copyright implications, accord-

ing to the Court, because “{w]hen a television broad-

caster transmits a program, it has made public for

simultaneous viewing and hearing the contents of that

program.” “’ The Court rejected the argument that “(bly

choosing among alternative broadcasting stations,” cable

operators were exercising sufficient choice and selection

to become “performers” for copyright purposes."

The Broadcasters contend that these decisions consti-

tute a finding that cable operators, in selecting broadcast

signals for carriage, are “akin to a mere carrier or con-

duit of expression” * and do not exercise editorial dis-

cretion. But whatever the merits of such a contention at

the time of the Court’s decisions, any such interpretation

has, in light of the subsequent evolution of cable televi-

sion, been repudiated by this Court. By 1979, this Court

had concluded, in FCC v. Midwest Video, supra, that

cable operators do exercise a significant degree of edi-

torial discretion not only with respect to non-broadcast

j rogrammiyg but also with respect to the re*ransmission

of particular broadcast signals:

As the Commission, itself, has observed, ‘both in

their signal carriage decisions and in connection with

their origination functions, ceble television systems

are afforded considerable control over the content of

the programming they provide.’ *

409 Teleprompter Corp. v. Columbia Broadcasting System, 415 U.S.

394, 409 (1974).

41 7d,

42 Petition at 11.

43 440 U.S. at 707, quoting Report and Order in Docket No. 20829,

69 F.C. C.2d 1324, 1333 (1978) (emphasis added) (footnote omit-

ted). Indeed, Congress itself acted quickly to reverse any implica-

tion in this Court’s decision in Teleprompter that cable operators

should, for copyright purposes, be viewed as mere conduits for the

retransmission of broadcast signals. Under Section 111 of the

Copyright Act of 1976, 17 U.S.C. See. 111, the retransmission of

15

III. There Is No Conflict Among the Circuits.

The Broadcasters also contend that the decision below

“is in direct conflict with several decisions by other fed-

eral Courts or Appeals.’’** The only case cited by the

Broadcasters that specifically upheld the must carry rules

is Black Hills Video Corp. v. FCC, 399 F.2d 65 (8th Cir.

1968)—a case decided when, as the Court of Appeals

noted, “cable was in its infancy and apocalyptic visions

of its impact were common.” *

In 1968, the cable operator’s editorial function had not

yet developed or been recognized by the courts. It was

not until 1975 that Home Box Office “revolutionized the

¢’ si industry by launching the satellite delivery of its

programming service,” ** spawning the wide variety of

programming alternatives that now exist, and not until

1979 that this Court explicitly recognized the editorial

function performed by cable operators.** Indeed, it was

not until the 1970’s that this Court made clear that the

exercise of editorial discretion by all media required

strict First Amendment protection.”

It is difficult to imagine that the Eighth Circuit would,

in light of these subsequent developments, reaffirm its

decision in Black Hills Video Corp. v. FCC. Indeed, by

1978 the Eighth Circuit had recognized, in Midwest

broadcast signals is specifically treated as a public performance, for

which copyright licensing is required. See Capital Cities Cable,

Ine. v. Crisp, supra, 104 S. Ct. at 2705-06.

#4 Petition at 14.

45 Slip Opinion, Pet. App. at 19a.

6 Report of the Committee on Energy and Commerce, H.R. Rep.

No. 98-934, 98th Cong., 2d Sess. 21 (1984).

47 FCC v. Midwest Video Corp., supra, 440 U.S. at 707.

48 See, e.g., Columbia Brwadcasting System, Inc. v. Democratic

Nat'l Comm., supra; Miami Herald Publishing Co. v. Tornillo, supra.

16

Viedo Corp. v. FCC, 571 F.2d 1025 (8th Cir. 1978),

aff'd, 440 U.S. 689 (1979), that cable television had

evolved into a communications medium with First

Amendment rights approximating those of the print

media. Citing Miami Herald Publishing Co. v. Tornillo,

supra, the Court found that the FCC’s rules requiring

cable operators to set aside channels for public access

impermissibly infringed First Amendment rights be-

cause they

strip[ped] from cable operators, on four of their

channels, all rights of material selection, editorial

judgment, and discretion enjoyed by other private

communications media, and even by the ‘semi-public’

broadcast media.*

The Broadcasters’ argument that Black H's Wdeo

stands today as an indication of a conflict bh gee" the

D.C. Cireuit and the Eighth Circuit is, therefore,

groundless.”

49 571 F.2d at 1055-56.

% For similar reasons, the Ninth Circuit’s decision in Great Falls

Community TV Cable Co. v. FCC, 416 F.2d 288 (9th Cir. 1969),

which rejected, in summary fashion, a First Amendment c!jallenge

to FCC rules requiring cable operators to delete the signals of

distant broadcast stations whose network programming duplicated

the programming of local stations, does not evidence a conflict

between the circuits. In a recent decision, the Ninth Circuit spe-

cifically recognized that “cable technology has . . . evolved signifi-

cantly since the time of Black Hills Video” and that “Black Hills

Video, therefore, is a doubtful precedent today.” Preferred Com-

munications, Inc. v. City of Los Angeles, 754 F.2d 1396, 1404 (9th

Cir. 1985), jurisdictional statement filed, 54 U.S.L.W. 3170 (U.S.

Sept. 24, 1985) (No. 85-390). The Ninth Circuit’s current view of

cable’s First Amendment status echoes that of the D.C. Circuit:

In addition to originating their own programming, cable tele-

vision operators exercise considerable editorial discretion re-

garding what their programming will include . . . . Editorial

judgment is entitled to First Amendment protection ... .

Undeniably, cable operators do transmit programs produced by

others. To the extent an operator does so, however, we believe

17

Indeed, there is no longer any doubt or disagreement

among any of the circuits that cable is a medium whose

speech is protected by the First Amendment." There is,

to be sure, some disagreement as to the extent to which

their First Amendment status immunizes cable operators

from franchise regulations that do not directly affect

program content and editorial discretion.” But there is

no conflict with the decision of the Court of Appeals that

the must carry rules interfere with editorial discretion.

it would be treated for F «st Amendment purposes as would be

theater owners, bookse\iers, and concert promoters. Their

First Amendment protection is not diminished because they

distribute or present works create | by others.

Id. at 1410 n.10.

The Broadcasters’ assertion that “Black Hills was cited with

approval” by the Tenth Circuit in Community Communications Co.

v. City of Boulder, 630 F.2d 704, 718 (10th Cir. 1980), Petition at

14 n.15, is not simply misleading; it is false. What the Broadcasters

have cited is the dissenting opinion of Judge Markey. In that

opinion, Judge Markey does, indeed, note that the city had cited

Black Hills Video to support its argument that restrictions on a

cable operator’s right to expand his service area did not violate the

First Amendment. Judge Markey found the City’s reliance on

Black Hills Video to be misplaced. The majority, meanwhile, did

not reach the First Amendment issues and did not cite Black Hills

Video at all, much less “with approval.”

51 See, e.g., Preferred Communications, Inc. v. City of Los Angeles,

supra; Tele-Communications of Key West, Inc. v. United States, 757

F.2d 1415 (D.C. Cir. 1985); Cruz v. Ferre, 755 F.2d 1415 (11th

Cir. 1985); Omega Sateilite Products v. City of Indianapolis, 694

F.2d 119, 127 (7th Cir. 1982); Community Communications Co.,

Inc. v. City of Boulder, 660 F.2d 1870, 1876 (10th Cir. 1981);

Midwest Video Corp. v. FCC, 571 F.2d 1025 (8th Cir. 1978), aff'd,

440 U.S. 689 (1979); Home Box Office, Inc. v. FCC, supra.

52 Compare Preferred Communications, Inc. v. City of Los An-

geles, supra and Tele-Communications of Key West, Inc. v. United

States, supra, with Omega Satellite Products v. City of Indianapolis,

supra, and Community Communications Co., Inc. v. City of Boulder,

supra.

18

And there is no conflict with the court’s determination

that even under the O’Brien test, the rules could not sur-

vive because the Commission’s asserted rationale for the

rules had no support and because the rules suppressed

far more speech than was conceivably necessary to

achieve the Commission’s stated objectives. Given this

absence of evidentiary support and disparity of means

and ends, it is hard to imagine how the must carry rules

could have survived any court’s First Amendment scru-

tiny.

IV. The FCC Is Not Seeking Review of the Decision

Below.

This is not a case in which a longstanding rule that a

federal agency believes to be essential to its public inter-

est objectives has been invalidated. The FCC, in deciding

not to pursue review of the decision below, has recog-

nized that the specific must carry rules that it adopted 20

years ago are no longer necessary or appropriate. Even

if the court’s decision were to be reversed, it is improb-

able that the FCC would reinstate the rules without sig-

nificantly narrowing their scope and effect.

The FCC agreed with the Court of Appeals that the

rules had “displaced consumer choice in many cases and

so interfered with the marketplace.” The FCC also

endorsed the decision as “a positive step toward recog-

nizing full First Amendment protection for all forms of

electronic media.” ** And, while expressing its preference

that elimination of the must carry rules be aecompanied

by elimination of the compulsory copyright license for

retransmission of broadcast signals, the FCC’s majority

nowhere suggested that it still viewed the rules as nec-

essary to the preservation of local broadcasting. Indeed,

53 Public Notice, supra, Pet. App. at 138a.

54 Id,

19

even Commissioner Quello, in dissenting from the FCC’s

decision not to appeal the court’s decision, conceded that

the must carry rules should, in any event, “be revisited

to address legitimate concerns raised by the court,” and

he “favor[ed] a Notice of Proposed Rulemaking to do

just that.” *

Thus, whether or not the decision below is reviewed by

this Court, the likely outcome is the same—a rulemaking

proceeding aimed at reassessing whether must carry rules

are necessary to promote any public policy interest and,

if so, at revising the rules to ensure that their impact

on cable operators’ editorial discretion is no greater than

necessary to achieve the FCC’s objectives. In these cir-

cuinstances, review is unnecessary and inappropriate.

CONCLUSION

For the feregoing reasons, the Writ should be denied.

Respectfully submitted,

BRENDA L. Fox

MICHAEL S. SCHOOLER *

1724 Massachusetts Ave., N.W.

Washington, D.C. 20036

(202) 775-3664

Counsel for National Cable

Television Association, Inc.

* Counsel of record

October 25, 1985

% Dissenting Statement of Commissioner James H. Quello, Pet.

App. at 140a.