Petition for Writ of Certiorari — Office of Communication of the United Church of Christ v. Federal Communications Commission

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1987

OFFICE OF COMMUNICATION OF THE

UNITED CHURCH OF CHRIST,

Petitioner,

Me

FEDERAL CQMMUNICATIONS COMMISSION and

UNITED STATES OF AMERICA, ef. al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

HENRY GELLER

Counsel of Record

Of Counsel: DONNA LAMPERT

ANDREW J. SCHWARTZMAN DANIEL R. OHLBAUM

Media Access Project 1776 K Street, N.W.

2000 M Street, N.W. Washington, D.C. 20006

Washington, D.C. 20036 (202) 429-7360

Counsel for Petitioner

PRESS OF BYRON S. ADAMS, WASHINGTON, D.C. (202) 347-8203

QUESTIONS PRESENTED FOR REVIEW

Two issues rest on the outcome of this case: (1)

whether, in regulating the carriage of television

broadcast signals by cable television systems, the Fed-

eral Communications Commission has impermissibly

discarded the Congressional policy of preserving free

local off-the-air television service and (2) whether reg-

ulation of cable systems’ use of broadcast signals in

a manner reasonably related to the achievement of

goals decreed by Congress in the Communications Act

of 1934 is valid under the First Amendment.

PARTIES BELOW

The petitioner here, Office of Communication of the

United Church of Christ, was an intervenor below.

Respondents Federal Communications Commission

and United States of America were respondents be-

low. Century Communications Corporation, Richard S.

Leghorn, Hubbard Broadcasting Inc., Chasco Cable-

vision, Ltd., Clearview Cablevision Associates II, Co-

lumbia Associates, L.P., Daniels & Associates, Inc.,

Landmark Cablevision Associates, Monmouth Cable-

vision Associates, Masada Communications, Inc., Na-

tional Cablesystems, Inc., OCB Cablevision, Inc.,

Ocean Associates, Riverview Cablevision Associates,

St. Charles CATV, Inc., and United Cable Television

Corp. were petitioners below. Also intervenors below

were: Independent Television Stations, Inc., Spanish

International Communications Corp., Univision, Inc.,

The National Association of Broadcasters, Lincoln

Broadcasting Co., National Cable Television Associ-

ation, et al., Corporation For Public Broadcasting,

National Association of Public Television, Public

Broadcasting Service, National Broadcasting Co., Inc.,

and Spanish International Communications Corp.

iil

TABLE OF CONTENTS

QUESTIONS PRESENTED FOR REVIEW ..........0..c0eeceeee

PI OE MRRTREEEUIND cn cccsccccccssccestscccssassccccacncseses

OPINIONS BELOW ......... icckatiitinkh dat aihthinissnceneaebedesentabhs

en. cc ciudespasonsannusiisacsuss

CONSTITUTIONAL PROVISION AND STATUTES

Sr a oe aspaladansabnsdube en

IRN OO” TUN GAB io occevcdvovescncccicccseccncecessaoses

REASONS FOR GRANTING THE WRIT ..........ccccce. -cceoe

1. The Court below erred in not finding that

the Commission's new policy contravened

the Communications Act ..............:cceeeeeee

2. The constitutional premises of the Com-

mission’s action are incorrect and, unless

reversed, render infeasible any must carry

rule to fulfill the Congressional

ee ees a ccecesdenenesiesunedas

a UES Hs Re PO

APPENDIX (separately bound)

Opinion of the United States Court of Appeals for

the District of Columbia Circuit .....................

Supplemental Order of the Court of Appeals of Jan-

EER LR SR TR

Report and Order of the Federal Communications

EE RET cE a

Memorandum Opinion and Order of the Federal

Communications Commission denying

Neen iced, osscclasnnsauncncsepienans

Judgment of the Court of Appeals .....................0.

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10

1]

32a

205a

33la

iV

TABLE OF AUTHORITIES

CASES: Page

Black Hills Video Corporation v. FCC, 399 F.2d 65

cele LA EOE I RE RIA 18-19,23

Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691

CREE Sphhtuicaisubiiiattatiaptiniinsicietaiar tk Lane cat. 23

Carter Mountain Transmission Corp. v. FCC, 321

F.2d 359 (D.C. Cir. 1963), cert. denied, 375

Sieh. MR NN ihend cnc stdentdiaandi arsine. - 4,8,15

City of Los Angeles v. Preferred Communications,

BMC., 106 SICL. BOBS (DDG) nnccccccccanocecacenssanesess 7,22

City of Renton v. Playtime Theaters, Inc., 475 U.S.

Ee: QO siiicunansnssbeutinseninscamaciutabenns neu 21

Clark v. Community for Creative Non-Violence, 468

SAS, SE NE i ccicchns egestas ches den oe sent 21

FCC v. League of Women Voters of California, 468

Us See ee ee ee ea A 21

FCC v. Pottsville Broadcasting Co., 309 U.S. 134

SRN nA Rie LAR LS a el Te TMT 16

FCC v. RCA Communications, Inc., 346 U.S. 86

ERIE snrsdostiindashesseeanicinvacetnersaauacuccscausetatacicisd 14

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

Pe MN iaieaaldicctccesubbadeatanintie nt 6,20

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

Cir. 1978), affd on other grounds, 440 U:S.

DE CUPID ecsniicinicsscseisisnicaacttalagi tn tA - 19

National Broadcasting Co. v. United States, 319

Rois UN SIE ccapcttitiniccteduncstite in bats 18

Quincy Cable TV, Inc. v. FCC, 768 F.2d 1434 (D.C.

Cir. 1985), cert. denied sub nom. NAB v.

Quincy Cable TV, Inc., 106 S.Ct. 2889

GIINEN sncanhecliciunidedenmnsinanecianadciataaads 6-7,15-16,20-21

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367

GOT scrashsonsemgusscesibiciiioacabeamateet tenet taoe- 18,19-20

United States v. Albertini, 472 U.S. 675 (1985) .... 21

United States v. O'Brien, 391 U.S. 367 (1968) ... 6,20-21

Table of Authorities Continued

Page

United States v. Southwestern Cable Co., 392 US.

157 (1968) ..........sssccccsscerceesseecensereeeeeees 11,15,16,18,23

STATUTES:

17 U.S.C. § LIMCML) ..cccceeeccceeeeeeeeeeeeeeeeeeeeenneseeneeeees 4

Cable Communications Policy Act of 1984, 98 Stat.

2780, 47 U.S.C. § 521, et. seq.:

Section 531 ...........cccccccsssssssccecccceeeeesssscnscscseceoncssosecs 22

Section 532 ......cccssssesssssssseseseecceecceceeceuaeanennennsessoosees 22

Section 544(f2) ......ccceeseeeeesssseeeeeeeeeeeeeeeeneneeeaserseens 11

Communications Act of 1934, 48 Stat. 1064, as

amended, 47 U.S.C. § 151 et. seq.:

Section 303(S) .....cccccsessssecccceeessseeeeeeeeeeseseeeeeterenaeeesees 11

Section 307(b) .....ccccccccessesssserseeeeeeeeeeseeseeeeaaaeesseesenes 11

Section 330(a) .......cceccsesccccceessseeeeeeeeseeeesseeneesaaeeesenens 11

FEDERAL COMMUNICATIONS COMMISSION REGULATIONS:

AT CFR § 76.56 ......csccccsssscsesrscesssceessreessensesssnesacsnees 12,17

AT CFR § 76.64 ou...ccceccccssssseceseseeceeessseseessnaneserereeenes 12

AT CFR § 76.66 .......:cssssccsssecssseesesseseseseseseesssneees 13

AGENCY DECISIONS AND REPORTS:

Cable Television Report and Order, 36 F.C.C. 2d

143 (1972), reconsideration denied, 36 F.C.C.

2d 326 (1972), aff'd sub nom. American Civil

Liberties Union v. FCC, 523 F.2d 1344 (9th

Cir. 1975) .........ccccsserccsssssscceeresssscossrcssssnecssenseess 4-5

First Report and Order in Docket No. 14895, et al.,

38 F.C.C. 683 (1965) ........ccceeeeessseereeeeeeeeeeeeeees 5

Memorandum Opinion and Order, 55 Rad. Reg. 2d

(Pike & Fischer) 13865 (1984) ....--.s:ssseseeseeees 6

Notice of Inquiry and Notice of Proposed Rulemak-

ing, 50 Fed. Reg. 48232 (19GB) ...2.cnccaceoreaceeees 7

vi

Table of Authorities Continued

Page

Second Report and Order in Docket No. 14895, et

al., 2 F.C.C. 2d 725 (1966) o...cccccccccccoseeeses,.... 5

MISCELLANEOUS:

Broadcasting Mag., January 11, 1988, ay ‘ensieuasane 22

Communications Daily, Jan. 12, 1988. Ds Te neudsecsacs 16

H.Rept. No. 98-934, 98th Cong., 2d Sess.. p.70 ... 1]

S.Rept. No. 98-67, 98th Cong., Ist Sess.. pp.11-

EID scevieveosenssansechensanseidanieras te teen ae cae 1]

IN THE

Supreme Court of the Anited States

OCTOBER TERM, 1987

No.

OFFICE OF COMMUNICATION OF THE

UnIteED CHURCH OF CHRIST,

Petitioner.

We

FEDERAL COMMUNICATIONS COMMISSION and

Unitep STATES OF AMERICA, ef. al.,

Respondents.

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

OPINIONS BELOW

The opinion of the Court of Appeals (App. la) is

reported at 835 F.2d 292. The Report and Order of

the Federal Communications Commission (App. 32a)

is reported at 1 F.C.C. Red 864, 61 Rad. Reg. 2d

(Pike & Fischer) 792. The Commission’s Memorandum

Opinion and Order denying reconsideration (App.

205a) is reported at 2 F.C.C. Red 3593, 62 Rad. Reg.

2d (Pike & Fischer) 1251.

to

JURISDICTION

The judgment of the court of appeals was entered

on December 11, 1987 (App. 331a).* The jurisdiction

of this Court is invoked under 28 U.S.C. §§ 1254(1)

and 2350(a).

CONSTITUTIONAL PROVISION AND

STATUTES INVOLVED

First Amendment to the Constitution of the United

States:

Congress shall make no law .. . abridging the

freedom of speech, or of the press; ...

The pertinent portions of the Communications Act

of 1934, 48 Stat. 1064, as amended, 47 U. S.C. § 151

et. seg. are as follows:

Section 303(s) (47 U.S.C. § 303(s)):

Have authority to require that apparatus de-

signed to receive television pictures broad-

cast simultaneously with sound be capable of

adequately receiving all frequencies allocated

by the Commission to television broadcasting

when such apparatus is shipped in interstate

commerce, or is imported from any foreign

country into the United States, for sale or

resale to the public.

Section 307(b) (47 U.S.C. § 307(b)):

In considering applications for licenses, and

modifications and renewals thereof, when and

* The court of appeals had jurisdiction pursuant to section

402(a) of the Communications Act of 1934, as amended, 47 U.S.C.

§ 402(a), and 28 U.S.C. § 2342.

OO

insofar as there is demand for the same, the

Commission shall make such distribution of

licenses, frequencies, hours of operation, and

of power among the several States and com-

munities as to provide a fair, efficient, and

equitable distribution of radio service to each

of the same.

Section 330(a) (47 U.S.C. § 330(a)):

No person shall ship in interstate commerce,

or import from any foreign country into the

United States, for sale or resale to the public,

apparatus described in paragraph (s) of sec-

tion 303 of this title, unless it complies with

rules prescribed by the Commission pursuant

to the authority granted by that subsection:

Provided, That this section shall not apply to

carriers transporting such apparatus without

trading in it.

STATEMENT OF THE CASE

This petition involves questions of the statutory and

constitutional standards governing regulation by the

Federal Communications Commission (Commission) of

the carriage of broadcast signals by cable television

systems. Cable television today is a hybrid service.

Cable systems deliver to their subscribers the signals

of television broadcast stations, both local and dis-

tant.! The modern cable system also distributes non-

‘Cable systems obtain local signals off-the-air with a high

antenna. They obtain distant signals through use of tall towers,

microwave radio relay facilities or, most commonly today, a com-

munications satellite. Congress in 1976 gave cable television sys-

broadcast cable programs, usually obtained from a

distant source via a communications satellite, and en-

gages in some local program origination. This case

deals with cable’s first and traditional role of distrib-

uting television broadcast signals.

1. The must carry rule; its origin.

Until 1975, cable’s function was almost entirely to

bring television broadcast signals to its subscribers.

This supplied added diversity, particularly in the

smaller television markets. However, the Commission

found that if a cable system failed to carry the local

station in such markets, it would imperil local service,

and the public interest would be adversely affected.

In the lead case, Carter Mountain Transmission Corp.

v. FCC, 321 F.2d 359 (D.C. Cir. 1963), cert. denied,

375 U.S. 951 (1963), involving the sparsely populated

Riverton, Wyoming, area, the Commission was sus-

tained in refusing to grant a microwave relay license

to serve a cable system (then called community an-

tenna television) unless it carried the sole local sta-

tion. The Commission had concluded that the cable

system’s failure to carry the local station would result

in 438,000 rural homes (out of 74,000 homes in the

market) being left without any television service at

all.

Upon the basis of this and other experience, the

Commission adopted rules directly applicable to cable

systems requiring them to carry local stations—the

must carry rules. The main basis of the rules is thus

to assure that local stations ‘“‘... are not denied ac-

tems a compulsory license, at rates fixed by law, to retransmit

broadcast signals they are authorized by the Commission to carry.

See 17 U.S.C. § 111(cX1).

999

cess to the audience they are licensed to serve....

This protects the economic viability of local stations

and the availability to the public of local service; it

also insures that no local station is placed at a con-

petitive disadvantage vis-a-vis distant signals or such

local stations as the cable system voluntarily carries.°

2. Must Carry in the period 1975-1985; the Quincy case.

The must carry rules continued in force through

the 1970s and the early 1980s. The nature of cable

changed. Cable capacity increased and, in addition to

the carriage of broadcast signals, cable systems now

presented a substantial number of non-broadcast pro-

grams delivered to the cable system by the new sat-

ellite technology (e.g., Home Box Office, Cable News

Network). This resulted in explosive cable growth,

especially in the major markets, by systems with much

> Cable Television Report and Order, 36 F.C.C. 2d 143, 173

(1972), reconsideration denied, 36 F.C.C. 2d 326 (1972), affd

sub nom. American Civil Liberties Union v. FCC, 523 F.2d 1344

(9th Cir. 1975).

3 See First Report and Order in Docket No. 14895, et al., 38

F.C.C. 683, 700-1, 705-06, 713-15 (1965) (First Report); Second

Report and Order in Docket No. 14895, et al., 2 F.C.C. 2d 725,

734-37, 770-78 (1966). The Commission rejected the notion of

relying on an input selector, or ‘‘A/B’’, switch in order to assure

local station access to the cable audience. The Commission

pointed out that even assuming people retain and maintain out-

door antennas necessary for good reception of the off-the-air

signal, ‘the sheer inconvenience of switching is an obvious de-

terrent to its use by the subscriber.’’ First Report, supra, 38

F.C.C. at 702-03.

The A/B switch is installed at the VHF terminals of the

television receiver, enabling the subscriber to receive channels

2-13; cable facilities are not attached to the UHF terminals at

the back of the receiver.

greater channel capacity. But systems continuing to

operate with limited capacity could not carry all the

new cable programmers if they were required to carry

too many local signals.

In 1984 the Commission denied petitions to elimi-

nate the must carry rules, holding that the increased

number of cable subscribers made the potential con-

sequences of non-carriage more significant and that

the increasing cable capacity rendered compliance with

the rule less burdensome.’

Ur on review, the D.C. Circuit concluded that the

Commission had failed to meet its “‘heavy burden”’ of

justifying the constitutionality of the must carry rules

under the First Amendment. Quincy Cable TV, Inc.

v. FCC, 768 F.2d 1434, 1462-63 (D.C. Cir. 1985), cert.

denied sub nom. NAB v. Quincy Cable TV, Inc., 106

S.Ct. 2889 (1986) (Quincy). The court held that broad-

cast First Amendment standards are inapplicable to

cable since the latter does not use the radio spectrum.

The court suggested that the must carry rules may

well come within the stringent standard applicable to

print of Miami Herald Publishing Co. v. Tornillo, 418

U.S. 241 (1974), but asserted that it need not decide

whether the rules are more than an “‘incidental re-

striction’”’ on speech within the terms of United States

v. O’Brien, 391 U.S. 367, 376-77 (1968), because the

rules also failed the O’Brien test in that they had not

* Memorandum Opinion and Order, 55 Rad. Reg. 2d (Pike &

Fischer) 1365 (1984). As to reliance instead on the A/B switch,

the Commission again said that its “‘extensive experience” in-

dicated that ‘‘even relatively minor receiver/tuner obstacles to

reception may create significant impediments to viewing of sta-

tions and thus have substantial impact on their economic via-

bility.” Id., at 1367.

been shown to serve a substantial governmental in-

se6

terest and were “ ‘grossly’ overinclusive.”’ Id., 768

F.2d at 1460. The court concluded, however, that its

decision did not foreclose the agency from adopting

new must carry rules consistent with the O’Brien

requirements.

A petition for a writ of certiorari filed by the Na-

tional Association of Broadcasters (NAB) was held by

the Court until one week after its decision in City of

Los Angeles v. Preferred Communications, Inc., 106

S.Ct. 2034 (1986),° and then denied.

In 1985, the Commission commenced a rulemaking

proceeding on must carry.® During the proceeding,

the NAB reached an agreement with the National

Cable Television Association,’ and submitted it to the

Commission. Petitioner opposed the agreement as not

serving the public interest, and urged that, so long

as cable made use of broadcast signals, the Commis-

sion could, and indeed must, impose certain basic car-

* This case presented the issue of whether a city franchising

authority could, consistent with the First Amendment, grant a

de facto exclusive cable television franchise. The Court held that

each medium must be assessed for First Amendment purposes

by standards suited to it, and that there was a need to resolve

the constitutional issues in the Preferred situation in a concrete,

full factual setting. On this ‘‘narrower ground”’ (/d., at 2036),

it remanded the case to obtain such full facts.

* Notice of Inquiry and Notice of Proposed Rulemaking, 50

Fed. Reg. 48232 (1985).

* The agreement exempted all cable systems with 20 or fewer

channels from must carry requirements; other systems would

have to devote up to 25% of their capacity to such requirements,

but with complete discretion as to the signals to be carried.

Report, par. 92 (App. 81a).

riage requirements in line with clear Congressional

mandates: (1) carriage of local stations in sparsely

populated areas (the Carter Mountain situation); (2)

in other markets, where cable has limited channel

capacity, only those stations in need of carriage (i.e.,

the local noncommercial station(s), community sta-

tions, and UHF independent stations); and (8) where

cable has no channel capacity problem, all local signals

on a non-discriminatory basis.

In its 1986 decision,* and 1987 opinion denying re-

consideration,’ the Commission rejected the approach

urged by petitioner.'® It ignored the critical consid-

eration that cable is enmeshed with the broadcast

system, carrying both distant and local signals.'! In-

stead, it said that it was adopting a wholly new ap-

proach in light of cable’s tremendous growth—‘“‘that

it is no longer appropriate ... to protect local broad-

cast television service from competition with [the co-

equal] cable service.’’ Report, par. 119 (App. 97a). The

Commission also relied heavily upon the constitutional

considerations set out in Quincy. Indeed, it stated

that cable is akin to print and found that “‘stringent’”’

First Amendment standards apply rather than the

standards applicable to broadcasting. Report, pars.

120, 171, 184 (App. 97a, 131a, 141a). The Commission

therefore stated that it would afford maximum dis-

* Report and Order (Report), 1 F.C.C. Red 864. (App. 32a.)

* Memorandum Opinion and Order (Reconsideration), FCC 87-

105, 2 F.C.C. Red 3593, summary in 52 Fed. Reg. 17574 (May

11, 1987). (App. 205a.)

Report, par. 177 (App. 135a); Reconsideration, pars. 40-49

(App. 228a-233a).

11 See Report, at notes 123, 134, 143 (App. 136a, 139a, 141a).

cretion to the cable operator to choose programming

of the greatest interest to its subscribers. See, e.g.,

Report, pars. 119, 120, 128, 177 (App. 97a-98a, 102a,

135a).

However, in light of the perceived expectations of

subscribers of continued cable carriage of all local

signals, an expectation the Commission said was built

up under the prior must carry regime, and the record

before it showing that some local broadcast signals

had been, and would be, dropped,'* the Commission

decided upon an interim policy. It adopted must carry

rules based largely on the industry agreement, but

‘“‘sunset’’ the requirement after five years. Further-

more, during that period and continuing thereafter,

the cable operator is to engage in a ‘‘consumer ed-

ucational program”’ as to the sunset and the possible

need for an ‘‘A/B”’ switch and an antenna to receive

local signals not carried by the cable.!* The switch

was the focus of the new program to ‘“‘maximize con-

sumers’ viewing choices.’ Report, pars. 121-134, 136,

140-42, 160-68 (App. 98a-105a, 109a, 112a-114a, 125a-

130a).

Several cable operators sought review of the new

rules, arguing that they also were unconstitutional.

Petitioner intervened, urging reversal and remand for

the failure of the Commission to follow its approach.

The lower court, in an opinion by Chief Judge Wald

joined by Judges Mikva and McGowan, rejected

2 Report, par. 131, n. 159 (App. 104a, 149a); Reconsideration,

par. 59 (App. 239a).

'3 Report, par. 136 (App. 109a-110a). The Exhibit hereto re-

produces a non-record notice sent to its subscribers by a cable

system pursuant to the consumer education requirements.

10

petitioner’s position as foreclosed by Quincy. (See

App. 16a, n.4.) The court held that the interim must

earry rules still failed to meet the O’Brien require-

ments because the need for tne rules “‘... is more

speculative than real,’’ and the new regulations, in

view of their lengthy (five year) duration, are too

broad. (App. 18a, 28a.) In a supplemental Order of

January 29, 1988 the court made clear that it was

striking down only the interim must carry rules and

not the Commission’s consumer education program

(App. 29a).

REASONS FOR GRANTING THE WRIT

With its rapidly increasing penetration of American

television households (i.e., over 50% today), cable tel-

evision is becoming the gateway for television pro-

gramming. Cable thus remains enmeshed with

television broadcasting, extensively carrying both lo-

cal and distant television signals. Indeed, cable, in

effect, tells its subscribers that they are getting what

is most popular in television. If the cable operator

fails to carry a local television station, such as one

in a rural area or a new UHF independent or public

broadcasting station, it drastically affects those sta-

tions. It also skews the clear Congressional goals: the

maintenance of local off-the-air service and promotion

of UHF and public television. Yet the Commission

has now proclaimed that it is indifferent to these

goals.

The Commission is much influenced in its decision

by constitutional concerns for allowing the cable op-

erator maximum discretion, erroneously holding that

regulation of cable television’s carriage of broadcast

signals does not come within established constitutional

1]

standards applicable to television. The court below

refused to correct the agency’s errors on these two

issues, both of which warrant review by this Court.

1. The court below erred in not finding that the Com-

mission’s new policy contravened the Communica-

tions Act.

Cable television systems uniformly utilize the sig-

nals of television broadcast stations as the core of

their program offerings, making cable an indivisible

part of an interstate stream of communication. The

Commission, therefore, has authority to regulate cable

in a manner “reasonably ancillary to the effective

performance of the Commission’s various responsibil-

ities for the regulation of television broadcasting.”’

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

157, 178 (1968). In doing so, the Commission has the

responsibility, inter alia, to exercise its regulatory

authority so as to preserve ‘‘a system of [free] local

broadcasting stations. ... Jd., at 174-75. The must

carry rules have been the keystone of the exercise of

the Commission’s attempt to preserve the access of

local stations to their full potential audience and to

enable them to compete on equal terms. Must carry

requirements are particularly critical to the Congres-

sional goals of promoting the development of the UHF

portion of the spectrum (necessary for a nationwide

television broadcast system) and the use of television

for noncommercial purposes. Jd., at 174-75."

14 See 47 U.S.C. §§ 303(s), 307(b), 330(a). Congress has re-

cently reaffirmed its dedication to local television service. See

S.Rept. No. 98-67, 98th Cong., 1st Sess., pp.11-12; H.Rept. No.

98-934, 98th Cong., 2d Sess., p.70, on the Cable Communications

Policy Act of 1984, 47 U.S.C. §544(f)2).

12

Paradoxically, the Commission now cites “‘the

changed structure of the overall video market re-

sulting primarily from the emergence of the cable

industry as a means for distributing new program

services ...’’ Report, par. 119 (App. 97a),’° as justi-

fication for a new “‘assessment of the federal inter-

est’”’ and the conclusion that “it is no longer

appropriate ... to protect local broadcast television

service from competition with cable service.” Jbid.

Instead, the agency has adopted a new policy de-

signed to maximize cable subscribers’ program choices.

Report, pars. 119, 161 (App. 97a, 126a).

The new “‘policy,”’ aside from limited ‘“‘interim”’ (five

year) must carry rules designed to preserve stability

while cable subscribers were informed of the new pol-

icy,’ consists entirely of a mandated ‘‘consumer ed-

ucation”’ program to be undertaken by cable systems.

Report, pars. 135-39 (App. 109a-112a). The essence of

this program is a requirement that cable systems no-

tify their subscribers that the system will not be re-

quired to carry any broadcast signals beyond five

years, that subscribers may purchase and _ install

(through the cable system or otherwise) an A/B switch

on their television receivers to receive off-the-air sig-

nals not carried by the cable systems (the expense to

be borne by the subscriber except for the installation

‘5 The Commission found that from 1972 to 1986, cable sys-

tems had more than doubled, from 2841 systems, passing 17%

of homes, to 6844 systems, passing 76% of the nation’s homes.

Subscribers numbered 22,000,000. Table 1 (App. 106a). Cable

penetration by 1986 was 47% of homes, Jbid. (App. 106a), rising

by 1984 to as much as 57.9% in smaller communities. Table 2

(App. 107a).

6 Rule §§ 76.56, 76.64 (App. 180a, 3l4a, 184a).

13

charge for new subscribers),'’ and that “‘[iJt may be

necessary to use an antenna, in conjunction with an

input selector switch, to access broadcast signals

available off-the-air and not carried by the cable sys-

tem. ...”’ Rule § 76.66 (App. 316a).

The emphasis throughout the Commission’s often

murky discussion of its new policy is upon the choice

offered cable subscribers; indeed, if:

a competitive market [does] not lead cable

operators to carry all of the television signals

that can be received off-the-air in their com-

munities ... such a result furthers the public

interest if cable systems are able to replace

an off-the-air signal with a signal from an-

other source for which their subscribers

would have a greater preference. Moreover,

as long as cable subscribers are aware that

they can receive the signal off-the-air, their

overall program choices are maximized. (Par.

128, App. 102a.)

While the Commission stated that ‘‘[nloncable sub-

scribers’ viewing choices also will be substantially en-

hanced to the extent that cable subscribers use input

selector switches to access all off-the-air broadcast-

ing,’ Report, par. 162 (App. 126a), the Commission

‘7 The Commission, at the urging of the cable industry, re-

moved requirements adopted in its primary Report that cable

systems supply and install switches for new subscribers without

charge and offer switches to existing subscribers with oniy an

installation charge. Rule § 76.66 (App. 185a, 316a), largely be-

cause of the ‘‘substantial financial burdens on cable operators.”

Reconsideration, par. 81 (App. 257a). This left the financial bur-

den upon the cable subscribers.

14

found that ‘‘cable subscribers in general currently do

not have the antennas in place to provide satisfactory

reception of off-the-air broadcast stations that are not

carried on cheir cable systems.” Report, par. 125 (App.

100a). But the Commission professed no prediction,

based upon data before it or anything in its experi-

ence as an expert body, that any substantial number

of cable subscribers could be expected to pay a some-

times considerable sum for switches and antennas to

receive off-the-air stations dropped by a cable sys-

tem.'* See FCC v. RCA Communications, Inc., 346

U.S. 86, 96-7 (1953).

The stations which are most likely to be dropped

are those which are most in need, i.e., new UHF

independents, community, and noncommercial §sta-

tions. Without cable carriage, the Congressional policy

of insuring the viability of these needy stations will

be in serious jeopardy.

* Nor does the sudden reliance on the A/B switch excuse this

failure to follow Congressional mandates. The Commission sev-

eral times, and as recently as 1984, stressed that the switch

was not effective because of its experience that even minor

inconvenience caused major problems for viewers in receiving

signals. (Supra, note 4, p. 6.) Indeed, the Commission frankly

acknowledged that it was now turning to the switch because of

its perception of serious constitutional concerns with a perma-

nent must carry rule. Report, par. 163 (App. 127a). Most sig-

nificantly, as stated above, the switch is often useless without

an antenna, and the Commission never put itself in a position

to know whether cable subscribers, given the usual large ‘‘menu”’

of television signals on the cable, will go to the trouble and

expense not only of purchasing and maintaining a switch but

also of obtaining the outdoor antenna so often needed for re-

ception of UHF stations like Channel 50 or Channel 32 in Wash-

ington, D.C., or the VHF station in Riverton.

easement

15

The Commission is now saying that if in the Carter

Mountain situation (supra, p. 4) the cable system car-

ries only distant television stations from Denver and

not the local Riverton, Wyoming, station, even though

that may well leave over 40,000 people without tel-

evision service, such a result is permissible under the

public interest standard of the Communications Act.

Or, in Washington, D.C., under the Commission’s ap-

proach, it is consistent with the Act to have the cable

system carry distant television signals and all local

stations except, for example, the new UHF station

on Channel 50 or the public broadcasting station of

Howard University on Channel 32. But this clearly

frustrates Congressional goals of promoting UHF and

public broadcasting, upon which Congress has spent

hundreds of millions of dollars to maintain as an al-

ternative service. See Southwestern Cable, supra, 392

U.S. at 174-75."

The court of appeals recognized that the ‘‘most sa-

lient feature of the new rules was that the Commis-

sion substantially altered its stated justification for

imposing must-carry rules at all. ...”” (App. 9a.) The

lower court erred in accepting the Commission's basic

change of policy as valid.’ The Commission’s new

'* Thus, if a cable system with limited capacity chooses to

become enmeshed with television broadcasting, it must meet the

Congressional directive as to needy rural local service, public

television, and UHF independent service, and then it can carry

all other broadcast signals it desires (expanding capacity if nec-

essary). Similarly, a modern system with no capacity problems,

when it drops any local station, is simply discriminating against

the station, and putting it at a competitive disadvantage.

* The court below thought that its earlier decision in Quincy

Cable TV. Inc. v. FCC, supra, 768 F.2d 1434, foreclosed any

16

policy baldly repudiates the Congressional policy of

preserving and promoting free local service recog-

nized by this Court in Southwestern Cable, supra, 392

U.S. at 174-75.2!

argument that must carry rules are “permanently needed to

safeguard the diverse programming generated by protecting lo-

cal broadcasts,”’ and stated that the Commission had “conceded”’

that A/B switches and antennas will ultimately insure such di-

versity. (App. 16a-17a, n.4.) But Quincy foreclosed nothing; in-

deed the Quincy panel merely found that the Commission, in

adopting its earlier must carry rules, had “ ‘failed to put itself

in a position to know’ ” the need for protection of local broadcast

signals (/d., at 1457), and it specifically stated that “‘it is for

the Commission and not this court to ascertain which broad-

casters or classes of broadcasters are sufficiently at risk to war-

rant protection.’ Jd., at 1462. The Commission was necessarily

left free by the Quincy panel to do so. FCC v. Pottsville Broad-

casting Co., 309 U.S. 134 (1940). And, of course, the Commission

could not “concede” that its new policy would insure diversity

for the non-cable subscribing public.

*! The D.C. Circuit also found it purely speculative that local

stations will not be carried. (App. 25a.) But not all local public

television or new UHF stations are carried. Thus, the Commis-

sion found, on the basis of “evidence in the record[,] that some

cable systems have ceased to carry individual broadcast stations,

refused to carry new stations, and/or requested payment for

carriage of stations."’ Report, par. 131 (App. 104a); Reconsider-

ation, par. 59 (App. 239a). The Commission further took into

account that many cable operators ‘‘thus far may have been

hesitant to act” as to carriage of local stations because of appeals

and Congressional interest. Jbid. The Commission specifically

noted the appeal of NCTA leaders to members that they con-

tinue to carry local signals until the matter is settled. Jbid. That

attitude continues today. See Washington Post, December 12,

1987, at A7 (‘Noting that the decision [in Century Communi-

cations] might be appealed, [NCTA] advised members to behave

for the time being as if the rule were still in effect’’). And

Communications Daily, Jan. 12, 1988, p. 3, reported that 196

aaa |

17

In sum, the Commission, jettisoning the bedrock

Congressional goal of protecting local television ser-

vice, has put free local television service in the hands

of its chief competitor. No claim: of agency discretion

will support this flouting of Congress’ will. The im-

portance of this issue would be apparent even if this

Court had not already declared that the Commission’s

responsibility ‘“‘for the orderly development of an ap-

propriate system of local television broadcasting’’ was

a matter whose ‘“‘significance ... can scarcely be ex-

aggerated. ...’’ Jd., at 177.

2. The constitutional premises of the Commission's ac-

tion are incorrect and, unless reversed. render in-

feasible any must carry rule to fulfill the

Congressional mandates.

The Commission’s decision to abandon must carry

requirements was largely impelled by concern “‘that

the First Amendment rights of cable operators not

be abridged,”’ rights it saw as akin to those of pub-

lishers of print media. Report, par. 120 (App. 97a).

Thus, the Commission stated that no permanent rules

are ‘‘sustainable”’ (Report, par. 138, App. 1lla), and

turned to the much rejected A/B switch because of

constitutional concerns. Report, pars. 163-64 (App.

127a). Even as to the interim rule, the Commission

afforded no must carry relief for needy local service

in rural areas” because of “the strong constitutional

concerns. ...” Jd., at par. 171 (App. 181a). It found

that there must be maximum discretion to the cable

noncommercial stations have been dropped by cable systems since

the must carry rules were deleted.

*2 These are areas where there are systems with 20 or fewer

channels, and thus exempted from all interim must carry re-

quirements. See Rule § 76.56 (App. 180a).

18

operator to choose programming, including broadcast

signals, of the greatest interest to its subscribers,

despite considerations of the needs of UHF or public

television stations as against powerful VHF stations.

Most important, the Commission found, contrary to

the urging of petitioner, that the regulation of cable

carriage of broadcast signals does not come within the

constitutional First Amendment standards applicable

to broadcast regulations, and the court below failed to

reverse this critical holding.

It is true today as it was forty-five years ago that,

‘{ujnlike other modes of expression, radio inherently

is not available to all. That is its unique characteristic,

and that is why, unlike other modes of expression, it

is subject to governmental regulation” which, if valid

under the Communications Act, is not a denial of free

speech. National Broadcasting Co. v. United States,

319 U.S. 190, 226-27 (1948). See Red Lion Broad-

casting Co. v. FCC, 395 U.S. 867, 388 (1969) (sus-

taining the right of the government to require that

broadcasters open their facilities to divergent view-

points on public issues). Thus, no First Amendment

issue was even raised in United States v. Southwestern

Cable Co., supra.

As the eighth circuit said in Black Hills Video Cor-

poration v. FCC, 399 F.2d 65, 69 (8th Cir. 1968),

sustaining must carry rules against attack under the

First Amendment:

The Commission’s effort to preserve local

television by regulating CATVs [as cable was

originally called] has the same constitutional

status under the First Amendment as regu-

lation of the transmission of signals by the

19

originating television stations. It is irrelevant

to the Congressional power that the CATV

systems do not themselves use the air waves

in their distribution systems. The crucial con-

sideration is that they do use radio signals

and that they have a unique impact upon,

and relationship with, the television broad-

cast service.

Must carry rules simply hold that cable, if it chooses

to become enmeshed with the broadcast system, must

not—in its carriage of broadcast signals—undermine

Congressional goals by destroying or crippling large

parts of the broadcast service it feeds upon. ‘‘The

public interest in preventing such a development is

manifest.” Black Hills Video Corporation, supra, 399

F.2d at 69.

Nor do must carry rules limit the cable operators’

free expression of ideas.** This Court’s characteriza-

tion of fairness requirements applicable to broadcast-

ing, which it sustained against constitutional attack,

is pertinent here

There is no question here of the Commis-

sion’s refusal to permit the broadcaster to

carry a particular program or to publish his

23 Black Hills, supra, deals directly with must carry rules. In

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

on other grounds, 440 U.S. 689 (1979), the eighth circuit ex-

pressed doubts on, without deciding, the constitutionality of rules

requiring access on cable systems’ channels not used to transmit

television broadcast signals.

24In adopting interim must carry rules the Commission rec-

ognized that must carry requirements are content-neutral, Re-

consideration, pars. 64-66 (App. 243a-245a).

20 wa

own views; of a discriminatory refusal to re-

quire the licensee to broadcast certain views

which have been denied access to the air-

waves; of government censorship of a par-

ticular program contrary to § 326; or of the

official government view dominating public

broadcasting.

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 396

(1969). Indeed, a cable system can carry any broad-

cast signals it desires, simply by expanding its channel

capacity. It was plainly erroneous, therefore, for the

Commission to term must carry rules “a stringent

form of regulation that intrude on cable operators’

free speech rights,’’ and to proceed on the basis that

“cable's First Amendment rights are subject to a

stringent review. ... Report, pars. 138, 184 (App.

110a-llla, 141a).

The Commission’s refusal even to consider per-

manent must carry rules because of its misjudgment

of First Amendment concerns was apparently prem-

ised largely upon the decision of the D.C. Circuit in

Quincy, supra. That decision refused to follow the

‘“‘broadeast’’ mode of review of First Amendment

claims, 768 F.2d at 1448-50, and strongly suggested

that the exacting standard of Miami Herald Publish-

ing Co. v. Tornillo, 418 U.S. 241 (1974), adopted for

review of infringements of newspapers’ editorial judg-

ment, should be applied to must carry rules. See 768

F.2d at 1452-54. The Quincy court believed that cable

‘“‘shares attributes of the more traditional press,’’ 768

F.2d at 1450, and doubted that the burden on speech

of must carry rules is “‘incidental’’ and thus review-

able under United States v. O’Brien, 391 U.S. 367

(1968). 768 F.2d at 1450-54. Thus, while it nonetheless

21

purported, and no doubt intended, to apply O’Brien,

the Quincy court struck down the must carry rules

as constitutionally infirm by repeatedly referring to

a “heavy burden’”’ of justification which the 1ules failed

to meet, 768 F.2d at 1457, 1459, 14638, a test nowhere

appearing in O’Brien, which required only that an

incidental burden on speech be shown to further an

important or substantial governmental interest, 391

US. at ST7.*

We believe the Commission’s judgment was skewed

by the above dictum and by this ‘‘toughening”’ of the

O’Brien standard in Quincy. Certainly the Commis-

sion rejected permanent must carry rules out of hand

as ‘“‘unsustainable’’ not only because of its disincli-

nation to preserve free television in the face of grow-

ing cable service but also because it tended to view

cable as akin to the printed press. But properly

founded and limited permanent must carry rules” are

sustainable under the “‘broadcast’”’ standard which, we

urge, is properly applicable and which the Commission

and the court of appeals both refused to adopt.*’

*> See also City of Renton v. Playtime Theaters, Inc., 475 U.S.

41 (1986); Clark v. Community for Creative Non-Violence, 468

U.S. 288 (1984); United States v. Albertini, 472 U.S. 675 (1983).

°° See supra, at 7-8, for the rules urged by petitioner.

7 In FCC v. League of Women Voters of California, 468 U.S.

364 (1984), the Court, after noting that it traditionally followed

a different approach in evaluating First Amendment issues in

the broadcast field, did assess a provision of the Communications

Act suppressing speech (i.e., proscribing editorializing by non-

commercial stations) under a “substantial interest’ and ‘‘nar-

rowly tailored” test. See particularly Jd., at 374-381.

The rules suggested by petitioner v ould clearly pass muster

under this analysis also. Such rules, along the lines suggested,

22

The court below is plainly wrong in stating that its

ruling is ‘‘narrow’’ and that the Commission remains

free to try again to devise a sound must carry rule.

(App. 28a.) The Commission’s incorrect constitutional

holding will continue to control this situation, and no

permanent must carry rules are permissible under that

ruling.’ Clearly, only by resolving the First Amend-

ment issue will it be practicable to fashion policy in

this important area consistent with Congressional de-

sires in the Act.

The constitutional issue is limited to this one facet—

cable’s carriage of broadcast signals and whether the

Commission can impose reasonable regulation as to

priority of such carriage to meet specific Congres-

sional goals in the broadcast field. This case does not

present the constitutional issue of the First Amend-

ment’s applicability to the non-broadcast aspects of

cable’s operation—de facto exclusive franchising; re-

quirements of public or leased channel access under

local franchises or the Cable Communications Policy

Act of 1984.°° This issue remains for another day and

case, on the concrete factual record required by City

would be within the agency’s authority, serve an important and

substantial governmental interest, have only incidental impact

on speech (readily remedied by expanding the system’s capacity),

and be narrowly tailored to accomplish the governmental inter-

est.

** It could not be seriously argued that a newspaper could be

required to set aside a substantial portion of its capacity for a

governmentally prescribed purpose. Significantly, the Chairman

of the Commission has just stated his doubt that any rules are

constitutionally permissible. See Broadcasting Mag., January 11,

1988, p.37.

22 See 47 U.S.C. §§ 531, 532.

23

of Los Angeles v. Preferred Communications, Inc.,

supra.

Correspondingly, however, resolution of the above

issue will not control this case. Assuming that the

newspaper model does govern cable franchising or

access requirements, that still would not mean that

the First Amendment broadcast regulatory standard

does not govern as to cable’s carriage of broadcast

signals. That issue thus stands on a different footing

and is fully ripe for resolution now.

CONCLUSION

The decision below, failing to reverse the Commis-

sion action, undermines clear and important Congres-

sional goals, only recently stressed by the Congress.*°

It renders nugatory the decisions of this Court in

Southwestern Cable, supra, and Capital Cities Cable,

Inc. v. Crisp, 467 U.S. 691 (1984) and conflicts with

the correct decision of the eighth circuit in Black

Hills, supra. The petition for certiorari should be

granted.

3° See note 14, supra, p. 11.

31 The Court there held that state rules requiring cable op-

erators to delete alcoholic beverage commercials from broadcast

signals they were carrying were invalid under the supremacy

clause, because the Commission’s regulation of broadcast signal

carriage by cable systems, and specifically its must carry rules,

established the existence of an ‘‘important and substantial’ fed-

eral interest justifying preemption. Jd., at 713-16.

Respectfully submitted,

HENRY GELLER

Counsel of Record

Of Counsel: DONNA LAMPERT

ANDREW J. SCHWARTZMAN DANIEL R. OHLBAUM

Media Access Project 1776 K Street, N.W.

2000 M Street, N.W. Washington, D.C. 20006

Washington, D.C. 20036 (202) 429-7360

Counsel for Petitioner

March 1988

EXHIBIT

EXHIBIT

TELEVISION SIGNAL AND INPUT SELECTOR SWITCH

AVAILABILITY NOTICE

The FCC, in 1986, adopted new requirements concerning

cable system carriage of local television broadcast stations.

Beginning June 10, 1987, a cable system has been required

to carry one or more local broadcast stations, but not

necessarily all such stations, until June 10, 1992. After

that date, carriage of local broadcast stations will be at

the discretion of the cable operator. As a result, at this

time or at a later date, you may not be able to receive

all local television stations over your cable system. At this

time, MetroCable is not carrying the following local broad-

cast stations; WTTX Ch.-66, WFTY Ch.-50 and WNVC

Ch.-56.

To ensure that you will retain the capability of receiving

all of the broadcast stations that are available off the air,

which might not be carried on the cable system, either

now or in the future, it may be necessary to use an input

selector switching device in conjunction with an antenna.

This device, which connects both to your cable service and

your antenna, will enable you to select between cable ser-

vice and off the air television signals. You may already

have such switching capability either in a separate device

or as a built in feature of your television receiver. If you

already have this capability you do not need an additional

switch. However, if you do need the switch, Arlington

Cable Partners (MetroCable TV) will install one at a cost

of $39.95 or will provide you a switch with written self-

installation instructions at a cost of $14.95. Such switches

are also available from other local suppliers. A wide range

of switching options is available, including, but not limited

to, mechanical, electronic, multiple input, and remote con-

trol switches which can be adapted to fit most needs.

Please direct any questions to the MetroCable Customers

Service manager at 841-7700.

COREE EEE EERE EERE EERE EEE EEE EEE EEE EEE EERE HEHEHE EEE EEE OH

If you wish to obtain an input selector switch, check the

appropriate box below and return to our business office

at 2707 Wilson Blvd., Arlington, Virginia 22201.

{ ] I wish to have an input selector switch installed.

I understand that I will be charged $39.95 for

this service.

{ ] 1 wish to receive an input selector switch with

installation instructions. I understand that I will

be charged $14.95 for this service.

Please print your name, address and phone num-

ber in the space provided below.