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

87-1510

No.

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1987

NATIONAL ASSOCIATION OF BROADCASTERS,

Petitioner,

Ye

CENTURY COMMUNICATIONS CORP., et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR

THE DISTRICT OF COLUMBIA CIRCUIT

Of Counsel:

MICHAEL S. HORNE*

HENRY L. BAUMANN STEVEN F. REICH

BENJAMIN F.P. IVINS COVINGTON & BURLING

NATIONAL ASSCCIATION OF 1201 Penn. Ave., N.W.

BROADCASTERS P.O. Box 7566

1771 N Street, N.W. Washington, D.C. 20044

Washington, D.C. 20036 (202) 662-6000

Attorneys for Petitioner

National Association of

Broadcasters

* Counsel of Record

March 10, 1988

QUESTIONS PRESENTED

The Federal Communications Commission (‘‘FCC’’)

began requiring cable systems to retransmit the sig-

nals of local television broadcast stations in the mid-

1960s. Its statutory authority to impose such require-

ments was upheld by this Court in 1968. Thereafter

the agency’s rules were consistently upheld on chal-

lenges on First Amendment grounds until 1985, when

the lower court held the must carry rules unconstitu-

tional. Two years later, in the decision this Court is

now asked to review, the lower court held unconsti-

tutional new and much more limited must carry rules

adopted by the FCC in an effort to meet the stric-

tures of the 1985 decision.

The questions presented are:

1. Do federal regulations requiring cable television

systems to retransmit the signals of local television

broadcast stations constitute an incidental or an even

more serious burden on the First Amendment inter-

ests of cable television operators?

2. On judicial review of an administrative agency

rulemaking decision to adopt regulations that consti-

tute an incidental burden on freedom cf speech, what

degree of deference, if any, should be accorded to

the agency’s judgments that the regulations serve a

substantial governmental interest and are narrowly

tailored to serve that interest?

LIST OF PARTIES

The decision below was rendered on consolidated

petitions for judicial review of an administrative

agency rulemaking decision. The petitioners below

were Century Communications Corp. and 13 other

cable television operators! and Richard S. Leghorn,

all of whom contended that the new rules unconsti-

tutionally infringed the First Amendment rights of

cable television operators, and Hubbard Broadcasting,

Inc., which claimed that the new rules unlawfully dis-

criminated against certain broadcast facilities. The in-

tervenors aligned with petitioners were United Church

of Christ, which claimed that the FCC’s decision was

arbitrary and capricious, and National Independent

Television Committee, Spanish International Com-

munications Corporation and Univision, Inc., which

argued that the rules deprived certain broadcast sta-

tions of must carry rights. Respondents were the Fed-

eral Communications Commission and the United

States of America. Intervenors aligned with

respondents were the National Association of Broad-

casters, the Association of Independent Television

Stations, Corporation for Public Broadcasting, the Na-

tional Association of Public Television Stations and

the Public Broadcasting Service. Appearances were

entered for Lincoln Broadcasting Co. and the National

Cable Television Association and certain of its cable

‘The 13 other cable operators were Chasco Cablevision, Ltd.;

Clearview Cabievision Associates II; Columbia Associates, L.P.;

Daniels & Associates, Inc.; Landmark Cablevision Associates:

Monmouth Cablevision Associates; Masada Communications. Inc.:

National Cablesystems, Inc.; OCB Cablevision, Inc.; Ocean As-

sociates; Riverview Cablevision Associates; St. Charles CATV,

Inc.; United Cable Television Corp.

television members, but these parties did not file

briefs.

iv

TABLE OF CONTENTS

Page

STON: RN pec derctig ea eet tae acres radios

RINNE suokschtea sa cnciattaauiiicassrcscisnauscctioncanaseeents 2

AGENCY REGULATIONS INVOLVED .......cc..ccceecececeeees 2

PP OMe ON RN aroha cet entcdeceaaensceusicccans 2

REASONS FOR GRANTING THE WRIT o......cccccceeceeeeee 11

1. The Lower Court’s Ruling That Content-Neu-

tral Must Carry Rules For Cable Television

Implicate Serious First Amendment Con-

cerns Is Inconsistent With Prior Decisions Of

This Court, Conflicts With Other Lower

Court Decisions And Has Profound Implica-

tions For The Regulation Of Electronic Com-

IN cc tectncrcastsassanmntinatsdavaaecenancse 1]

2. The Lower Court Has Misapplied O'Brien,

Principally By Refusing To Accord Any De-

ference To The Agency Findings And Con-

clusions, And This Approach Is In Conflict

With The Decisions Of This Court And Var-

ious Lower Federal Courts ........0000cccccceeeeee. 21

to

COG 5 eee 30

TABLE OF AUTHORITIES

CASES

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

EAP RIED cictatcdnndasanchivs dccemsdlauaeiuaianmbatain ne

Buckeye Cablevision, Inc. v. FCC, 387 F.2d 220

A. SAEs TD citescccincseeee eee

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

(FEMMES stsvicncasdiecansinnssensscaniuesaseabaeieendnecauaeneiaal

Carter Mountain Transmission Corp. ¥. FCC, 321

F.2d 359 (D.C. Cir.), cert. denied, 375 U.S. 951

CTDIOD svsrinitiiciisinersechcissseiseaeee

Citizens to Preserve Overton Park vy. Volpe, 401

US. GS GP) ciscknsccumosueeneee ae

City of Los Angeles v. Preterred Communications,

S70 U.S. 208 CSS isin

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

BE CIGD nscnsccacscnceacnsktisccncioasanettaanas ede

Clark v. Community for Creative Nonviolence, 468

US. Sa CIR csisstisemsntisnn caine

Conley Electronics Corp. v. FCC, 394 F.2d 620 110th

CORE. BOEIDD cconinnssscsncshicvcteansabedtigastaasaancnencasataeaay

FCC v. Midwest Video Corp., 440 U.S. 689

(TOTDD us iciciseusinsaittnitiassindnaeindduatomateedataaa ian

First National Bank of Boston v. Bellotti, 435 U.S.

TOO CETED cccskstivieuctoteecniig anes

Fortnightly Corp. v. United Artists Television, Inc.,

S56 UB. Bee Ce stint Rectan

Heffron v. International Society for Krishna Con-

sciousness, Inc., 452 U.S. 640 (1981) ........0..0..

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

cert. denied, 434 U.S. 829 (1977) ...................

Lewis Publishing Co. v. Morgan, 229 U.S. 288

CRED ivcicccicsiccscatescieibisacaueianuniaamtaaaan aaa

Loveday v. FCC, 0707 F.2d 1443 (D.C. Cir.), cert.

denied, 464 U.S. 1008 (1983) ..........................

Page

13,

Table of Authorities Continued

Page

Members of the City Council of Los Angeles v. Tax-

payers for Vincent, 466 U.S. 789 (1984) ........ 24

Miami Herald Co. v. Tornillo, 418 U.S. 241

CRG EE :cnsccccrstempintntnensonngsnaammamnmamel 13,14

National Ass'n of Regulatory Utility Comm'rs v.

FCC, 533 F.2d 601 (D.C. Cir. 1976) .............. 18

National Broadcasting Co. v. FCC, 319 U.S. 190

(IDG n:neccissittinsenmnmenaaane 13

Pittsburgh Press Co. v. Human Relations Commis-

otet, 413 UF. SIO COG CO istssctinsasinditnteabnecns 14

PruneYard Shopping Center v. Robins, 447 U.S. 74

CABO ctincsceevsnnencsisssiacdgnensoceamsaneaaamee amas 14

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

Cir. 1985), cert. denied, 476 U.S. 1169

CARED sncessonésaescsssstensencennasidueaneiausanhmals passim

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

BEE CEOS ccoscsccsncietnetintrensheiatiaaaneiaada 13

Schad v. Borough of Mount Ephraim, 452 U.S. 61

(RDB ED <cscsevvsssisisnincanasiatnnaden dane eae 24

Teleprompter v. Columbia Broadcasting System,

Ene., G35 UO. BG CRP e cccavtecnsoncistntiacteans 16,17

The Ent ise, Inc. v. United States, 833 F.2d 1216

COE CAPs. TBED xceccncssccescusacsesinscsenaaen 25

Titusville Cable TV, Inc. v. United States, 404 F.2d

LEST GG Cab. TAGE crsessencteevsiesscsmeenacenan 4

United States v. Albertini, 472 U.S. 675 (19835) .... 23

United States v. Martinez-Fuerte, 428 U.S. 543

CRBTGD <cccevscsicssctuninnesnseanstaninaeeccionniaeasaaeean 25

United States v. Midwest Video Corp., 406 U.S. 649

(RBTED snvesssssessssinisianiaenaiapiateaiigaaanae 3,17,18,19

United States v. O'Brien, 391 U.S. 367 (1968) .... passim

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

BET CRDED ccccnrcceintstatksddedscsiasedaee 2,15,16,18,27

Table of Authorities Continued

Res wa? es De Ter rpre Coune Tne 135 | > 51%

CRUG cocvisanses

if COO? \ J rior 64 { al 2d 2935 $11 P 2d so

14 Cal Ry tr 537 (Cc il } ‘ere fepeie a 385 L s

S44 (1966)

J

Cable Communications | Act of 1984. Section

> a - 24 =

H24(T), 44 i ee » O44(1) (Sul i)

= = 5 = =

‘ mmunications Act 2 15-4 +i Ls. yy 10 f

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Omnibus Copyright Act of 19.6. Sector 1] .

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mended. 17 U.S.C. § 111 (1Y 1 Sup}

v4

iwsi)

FCC DEcISsIONS

F rst Re port and (Jrdaer hi Docket No 1,895, 3s

F.C.C. 683 (1965) ..... s caienmiediaanad

ly qi ri Into the Econon ic Re lationsi iD Bet ite

Broadcasting and Cable Te ervision. 71 F.C.C 2d

GD CIDE) caccoccccccccccccccsseccoccesccccncsesocscescoccsencces

Ve morandum (pinion and Order in Docket No S-

136. 55 Rad. Reg. 2d (Pike & Fischer) 1365

CAGED .nncoccecccssconcccsecscascncscecsncnssssensosessessosonsoseess

Re port a? a Orde rsew Docket No R7-J07 (November

20. 1987) ....... eee Re aes

Vili

Table of Authorities Continued

LEGISLATIVE HISTORY

H.R. Rep. No. 94-1476, 94th Cong., 2d Sess.

TEE aeibebstlaisndighesinenbadsensininiéadehtdcenbesasateubineninndeses

H.R. Rep. No. 98-934, 98th Cong., 2d Sess.

UUETEE dauciatsaninuinsbiididicdeneusiubiniadiindusisdencnisinssuisedéon

S. Rep. No. 94-473, 94th Cong., Ist Sess. (1975) .

S. Rep. No. 98-67, 98th Cong., lst Sess. (1983) ...

MISCELLANEOUS

S. Barnett, Franchising of Cable TV Systems to Get

Airing at Supreme Court, Nat’] L.J. (Apr. 21,

SITIITE schahiiduiieieashDiedsdionablnismitshindtnienadneaniabmenistesinensanss

Cabinet Committee on Cable Communications, Ca-

ble: Report to the President (1974) .................

Comment, Berkshire Cablevision v. Burke: Toward

a Functional First Amendment Classification

of Cable Operators, 70 Iowa L. Rev. 524

SUNT sieticctndesdiihddiesessddiedasdiatbsasemiadeiiiammeasnie i Eetnake

I. Pool, Technologies of Freedom 106 (1983) ..........

Reply Comments of Bell Atlantic Telephone Com-

panies in FCC Docket No. 87-266 (December

EA) UIT scinipnennainbanindentiniendindakeeiemainaanatbaauinsesenios

Reply Comments of BellSouth Corporation, South-

ern Bell Telephone & Telegraph Co. and South

Central Bell Telephone Co. in FCC Docket No.

87-266 (December 16, 1987) ..............ccccceeceeeeee

Sloan Commission on Cable Communications, On

the Cable: The Television of Abundance

SUININEEY inicaidubdcho tied iicatiacsiaesdiaemmicediaiaetabidmbedindiaietaalistn

Standard & Poor’s Industry Surveys, Computer &

Office Equipment 91 (Oct. 1, 1987) ................

Standard & Poor’s Industry Surveys, Computer &

Office Equipment, Leisure Time 26-27 (March

Say SEITE aecianshsnbasidibelsaiicactlnasbaetaiistsbsonnibiaibianaalicdoieaaibiis

28

28

IN THE

Supreme Court of the United States

OCTOBER TERM, 1987

NATIONAL ASSOCIATION OF BROADCASTERS,

Petitioner,

V.

CENTURY COMMUNICATIONS CORP., et al.,

Respondents.

PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR

THE DISTRICT OF COLUMBIA CIRCUIT

Petitioner National Association of Broadcasters

(“NAB”), an intervenor below, is a nonprofit trade

association representing more than 5,000 radio sta-

tions, 940 television stations and the major commer-

cial broadcast networks.

OPINIONS BELOW

The opinion of the U.S. Court of Appeals for the

District of Columbia Circuit is reproduced in the sep-

arately bound Petitioners’ Appendix (‘‘App.’’) at pp.

la-28a and is reported at 835 F.2d 292. A January

29, 1988 order by the Court of Appeals granting a

motion for clarification is reproduced in the Appendix

at pp. 29a-3la. The underlying agency decision is re-

ported as Report and Order in Docket No. 85-349, 1

FCC Red 864 (1986), and is reproduced in the Ap-

pendix at pp. 32a-204a. The agency’s decision on re-

consideration of that decision is reported as

Memorandum Opinion and Order in Docket No. 85-

349, 2 FCC Red 3593 (1987), and is reproduced in

the Appendix at pp. 205a-330a.

JURISDICTION

The opinion and judgment of the Court of Appeals

was entered on December 11, 1987. The jurisdiction

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

AGENCY REGULATIONS INVOLVED

The FCC rules held unconstitutional by the court

below are reproduced in Appendix B to the FCC’s

decision (App. 177a-88a) and are codified at 47 C.F.R.

§§ 76.56, 76.58, 76.60 and 76.62.

STATEMENT OF THE CASE

The FCC began to regulate community antenna tel-

evision, or “CATV” systems as they were then

known, in the mid-1960s. The FCC’s jurisdiction to

regulate CATV use of broadcast signals was promptly

upheld by this Court as being reasonably ancillary to

the agency’s statutory duties and responsibilities with

regard to over-the-air television broadcasting. United

States v. Southwestern Cable Co., 392 U.S. 157 (1968).

The rules at issue in Southwestern required cable sys-

tems, as a condition to any use of broadcast signals,

(1) to retransmit the signals of nearby or “‘local”’

broadcast stations, (2) to refrain from duplicating the

network programs of local stations by retransmitting

the signals of other stations that were broadcasting

those network programs and (8) in certain circum-

stances, to refrain altogether from bringing in distant

broadcast signals from other markets. These rules,

including the first or so-called ‘“‘must carry’’ element,

were subsequently found to be valid under the First

Amendment.!

Cable systems offer two distinct services: (1) en-

hancement of the technical quality of signals of local

broadcast stations, and (2) distribution of programs

or signals not otherwise available in the cable com-

munity. The former is a reception service that typi-

cally provides clearer pictures than viewers can obtain

with their own antennae.” The latter service in the

early years of cable development consisted largely of

distant broadcast signals. But with the advent of com-

munications satellites in the mid-1970s, cable televi-

sion systems have increasingly offered access to

various program services created specifically for dis-

tribution over cable television systems. Many of these

cable program networks are supported by advertising

(as well as by subscriber charges) which is sold by

both the cable networks and by cable operators. In

theory, a wire television service could operate com-

pletely independent of over-the-air broadcasting by

distributing only programs originated by cable oper-

' Black Hills Video Corp. v. FCC, 399 F.2d 65 (8th Cir. 1968).

See also, United States v. Midwest Video Corp., 406 U.S. 649,

659 n.17 (1972) (plurality opinion) (observing that Black Hills

“correctly upheld’ must carry regulations).

? Hills, mountains or even large man-made structures between

the station transmitter and the viewer can interfere with re-

ception of some or all local stations even when a top-quality

roof-top antenna is employed. Moreover, many viewers cannot

use roof-top antennae due to restrictive zoning ordinances or

simply because they live in apartment buildings or other multiple

dwelling units.

ators or their networks. Cf. Weaver v. Jordan, 64

Cal. 2d 235, 411 P.2d 289, 49 Cal. Rptr. 537 (Cal.),

cert. denied, 385 U.S. 844 (1966). But in practice all

known cable systems since at least the early 1960s

have offered and provided broadcast service.

In 1985, in the precursor to the decision below, the

lower court held that then current must carry rules,

which were significantly broader than those at issue

here, were unconstitutional. Quincy Cable TV, Inc. v.

FCC, 768 F.2d 1434 (D.C. Cir. 1985), cert. denied,

476 U.S. 1169 (1986) (hereinafter “Quincy’’). A series

of circuit court precedents upholding the constitu-

tionality of the FCC’s must carry and other rules

regulating cable television use of broadcast signals*

was dismissed as unsound because they mistakenly

treated cable as indistinguishable from broadcast tel-

evision. In selecting the appropriate ‘“‘standard of re-

view” for First Amendment purposes, the Quincy

panel noted cable television systems theoretically have

the technological capacity to distribute 200 or more

channels over a single wire, and concluded that reg-

ulation of cable television could not be justified under

the so-called spectrum-scarcity rationale sometimes

relied on to justify regulation of the content of broad-

cast programs. 768 F.2d at 1443-44, 1447-50. The

panel conceded that the must carry rules do not forbid

speech by the cable operator. It nevertheless thought

that, in light of the many newer non-broadcast ser-

3 Black Hills Video Corp. v. FCC, 399 F.2d 65 (8th Cir. 1968);

Titusville Cable TV, Inc. v. United States, 404 F.2d 1187 (3d

Cir. 1968); Conley Electronics Corp. v. FCC, 394 F.2d 620 (10th

Cir. 1968). Buckeye Cablevision, Inc. v. FCC, 387 F.2d 220 (D.C.

Cir. 1967); Carter Mountain Transmission Corp. v. FCC, 321

F.2d 359 (D.C. Cir.), cert. denied, 375 U.S. 951 (1963).

vices cable systems could distribute relative to the

rather limited channel capacity at which many sys-

tems were operating (see generally 768 F.2d at 1451-

53), cable television could no longer be regarded as

merely a passive conduit for broadcast signals and

that must carry requirements therefore ‘‘severely im-

pinge on [the] editorial discretion” of cable operators

to select program material to exhibit over their wire.

Id. at 1458.

The Quincy panel considered but backed away from

declaring the rules presumptively unconstitutional,

concluding it was unnecessary to resolve that issue

because the rules were unconstitutional even if re-

garded as no more than an “‘incidental burden’’ on

speech within the meaning of United States v.

O’Brien, 391 U.S. 367 (1968). See generally id. at

1454-62. Stressing that it was addressing only what

it regarded as the overly broad must carry rules then

before it, the panel observed that the FCC was free

to craft new must carry rules that would be more

responsive to the court’s First Amendment concerns.

Id. at 1463. Four months later, while a petition for

review of the Quincy decision was pending before this

Court, the FCC started a rulemaking proceeding to

explore whether new must carry rules were necessary

and what sort of rules would satisfy the Court of

Appeals.

NAB and many others urged the FCC to adopt new

rules. Without such rules cable systems were likely

to refuse to carry some local stations or to place

burdensome conditions on carriage; and indeed, this

had already begun to occur.‘ Many cable viewers

‘In addition to instances in which cable systems refused to

would be effectively denied access to the program

services of any local stations not available on the

cable due to the cost, inconvenience and in some in-

stances the impossibility of receiving acceptable sig-

nals without cable. Even when the over-the-air

alternative was feasible, cable subscribers would be

forced to buy and install both their own antennae

(and would in many cases need a relatively expensive

outdoor antenna) and input selector devices or “‘A/B

switches,’ to change back and forth between cable

and over-the-air reception. Moreover, those switches

were inconvenient and to some extent unreliable.

NAB’s survey evidence demonstrated that only about

one percent of current cable subscribers are equipped

to receive signals over-the-air and many others are

forbidden by local zoning ordinances and other re-

strictions from installing outdoor antennae. The sur-

vey also indicated that better reception of local signals

was seen as one ‘‘very important” reason for buying

cable service by some 64 percent of the responding

subscribers.

The net result of the inconvenience of reverting to

over-the-air reception and of the fact that cable sub-

scribers rarely have the option of buying cable service

from a competing company was to bestow on each

cable operator ‘‘gatekeeper”’ status over the television

service available to its subscribers. The increasing de-

begin carrying newly operational local stations or dropped some

newer stations that had been carried only briefly, some systems

attempted to charge broadcasters for carriage or shifted local

stations to less desirable positions on the cable dial. Such ‘‘chan-

nel repositioning’ seems to be aimed at enhancing the viewing

of the cable program networks within which cable operators sell

advertising on their own behalf.

gree to which cable operators directly compete for

advertising revenue with broadcast stations creates

an incentive to use that status to deny carriage to

some competing broadcast stations. Noncarriage also

frustrates the basic allocations policy of the Com-

munications Act of insuring the availability of local

broadcast service.

In its Report and Order, the FCC accepted the

Quincy decision’s characterization of cable television

as a “full-fledged video’’ service that offers alterna-

tive program services and that exercises ‘‘broad ed-

itorial control over content.’’ App. 93a. The FCC

nevertheless found that some must carry regulation

would further a substantial federal interest. It noted

first what it characterized as a widespread public mis-

conception that subscribers did not need to install or

maintain the capability to receive broadcast signals

over-the-air. That misconception was attributed to the

former must carry rules and to cable operators who

may offer to remove, free of charge, the new cus-

tomer’s “‘unsightly antenna.’ The agency also took

into account the facts that cable penetration and the

sales of cable-ready television receivers had greatly

increased in recent years, while sales of both outdoor

and indoor antennae were dropping significantly. App.

98a-100a. Further, the FCC cited and relied on evi-

dence indicating that, even in the brief period follow-

ing the Quincy decision, cable systems were ceasing

to add some new local stations and starting to drop

some others, particularly newer independent and pub-

lic television stations. App. 55a-57a, 104a-05a. If un-

checked, the confluence of these perceptions and

trends could deprive millions of cable subscribers of

the program diversity which access to all local sta-

tions as well as cable programming could provide.

The FCC reasoned that the federal interest in max-

imizing program diversity would be best served if

viewers had the ability to receive both cable services

and, via over-the-air reception, whatever broadcast

signals cable systems chose not to carry. To achieve

that end, and to comply with what it thought Quincy

required, the FCC adopted a new regulatory scheme

consisting of (1) substantive must carry rules that

were very limited in scope; (2) requirements that cable

operators (a) offer input selector devices (A/B

switches) to new and existing subscribers free of

charge and (b) distribute ‘‘consumer education” state-

ments describing how to receive local signals not car-

ried by the cable system and listing any local stations

that were not being carried; and (3) a ‘“‘sunset pro-

vision’ to terminate the new substantive must carry

rules in five years’ time in the hope that by then the

public would no longer be accustomed to relying on

cable operators to provide reception of local broadcast

signals. Cable systems with fewer than 21 activated

channels were virtually exempt from must carry ob-

ligations under the new substantive rules. Other cable

systems were required to devote no more than a rel-

atively small portion (generally 25 percent) of their

channels to must carry signals. Cable systems were

also free to carry no more than one local affiliate of

the same network and to drop stations that, after

being on the air for a full year, attracted only a

negligible amount of viewing in noncable homes.

Appalled at the prospect of having to purchase and

install millions of ‘‘A/B switches,”’ cable industry rep-

resentatives petitioned for reconsideration of that re-

quirement, supporting their claims’ with an

engineering study showing that the existing input se-

lector devices were unreliable, that even for cable

industry technicians, installing the devices was diffi-

cult, particularly where other equipment such as a

videocassette recorder was attached to the television

receiver, and that the cost to cable operators of com-

plying with the FCC switch requirements could be as

high as a billion dollars. App. 211la-213a, 215a-217a.

NAB and other broadcast representatives sought re-

consideration of the sunset provision, arguing that the

major obstacles to over-the-air reception by cable sub-

scribers were not likely to disappear in five years and

that there were sound policy reasons for maintaining

must carry obligations indefinitely.” The FCC largely

granted the relief sought by the cable industry, but

otherwise adhered to its original decision.®

* Among viewers accustomed to changing stations with hand-

held remote control tuners, and particularly among viewers who

are not technically inclined or are physically handicapped, a sta-

tion that can be received only after finding and changing an

‘‘A/B switch" located behind the television set to switch from

a cable to a noncable source of signals is at a distinct competitive

disadvantage in terms of picking up audience from those who

are sampling the readily available channels. Prior to Quincy the

FCC repeatedly recognized that the inconvenience of using

A/B switches, even if they functioned properly, would put stations

not carried on the cable system at a serious competitive dis-

advantage vis-a-vis the stations the system did carry. See, e.g.,

First Report and Order in Docket No. 14895, 38 F.C.C. 683,

702-03 (1965); Memorandum Opinion and Order in Docket No.

84-136, 55 Rad. Reg. 2d (Pike & Fischer) 1365, 1367 (1984).

* NAB did not petition for judicial review of the FCC’s ‘‘sun-

set’’ rule since it was at least arguably not ripe for immediate

review and the agency itself recognized that it might have to

10

In its decision below, the Court of Appeals struck

down the FCC’s new and far less intrusive must carry

rules. Treating Quincy as binding precedent, the lower

court first concluded that any must carry rules con-

stitute at least an incidental burden on the First

Amendment rights of cable operators. Like Quincy,

the panel declined to reach the question whether must

carry rules were per se unconstitutional because the

new rules could not pass muster under United States

v. O’Brien, 391 U.S. 367 (1968).

The panel began its O’Brien analysis by holding

that the substantial deference normally accorded to

administrative agency decisionmaking “‘has little rel-

evance when first amendment freedoms are even in-

cidentally at stake.’ App. 16a. The FCC’s judgment

on the need for must carry regulation was rejected

as resting ‘“‘not upon substantial evidence but rather

upon several highly dubious assumptions of the FCC”’

(App. 18a) that (1) consumers are not aware and can-

not be expected to become aware within five years

that an A/B switch will suffice to insure access to

local signals (App. 19a-24a) and (2) in the absence of

must carry requirements cable systems would discon-

tinue retransmitting local stations. App. 25a-26a. The

lower court also thought that five years of regulation

was unnecessary so that the agency’s rules were not

“narrowly tailored’’ to achieve their stated objective.

The panel was ‘‘unpersuaded’”’ that five years was

appropriate largely because of ‘“‘our perceptions about

consumer aptitude ....’’ App. 27a. The panel rejected

what it characterized as the FCC’s “sluggish profile

of the American consumer” because

revisit the need for substantive regulation before the five-year

period expired. See App. 110a.

11

‘{iJn a culture in which even costly items like

the video-cassette recorder, the cordless tele-

phone, the compact disk-player and the home

computer have spread like wildfire, it begs

incredulity to simply assume that consumers

are so unresponsive that within a span of five

years they would not manage to purchase an

inexpensive hardware-store switch upon

learning that it could provide access to a con-

siderable storehouse of new television sta-

tions and shows.”

(App. 24a (footnote omitted). See also App. 27a.)

The panel later clarified its decision by explaining

that it only held the substantive must carry rules

unconstitutional, not the FCC’s consumer education

and remaining A/B switch requirements. App. 3la.

This and other petitions followed.

REASONS FOR GRANTING THE WRIT

1. The Lower Court’s Ruling That Content-Neutral Must

Carry Rules For Cable Television Implicate Serious

First Amendment Concerns Is Inconsistent With

Prior Decisions Of This Court, Conflicts With Other

Lower Court Decisions And Has Profound Implica-

tions For The Regulation Of Electronic Communi-

cations.

The result below frustrates adoption and enforce-

ment of even a greatly watered-down version of

agency regulations of many years standing. Yet (1)

every judicial decision prior to Quincy had upheld

those regulations, (2) the cable petitioners below failed

to present the lower court with a single concrete

instance in which the new, limited must carry rules

12

would prevent a cable operator from distributing some

other program service, (3) only three years ago this

Court relied upon the FCC’s must carry requirements

as embodying ‘‘a strong and substantial’ federal in-

terest requiring preemption of inconsistent state law,’

and (4) Congress took special care not to disturb the

long-established must carry policy in the course of

adopting comprehensive cable television legislation in

1984."

Tens of millions of American households currently

rely on cable television for both broadcast and other

television services. By reading the First Amendment

as giving cable operators the power to be the sole

arbiters of the broadcast as well as nonbroadcast ser-

vices distributed over cable, the lower court has made

the television choices that are available to these homes

largely dependent on the economic and political pre-

dilections of the only cable operator to provide cable

service in any given neighborhood.

The lower court’s conclusion that must carry rules

seriously impinge on First Amendment values rests

on an explicit discussion in Quincy of the appropriate

“standard of First Amendment review’’ for cable tel-

evision and on a more or less implicit assumption in

both lower court opinions that cable television oper-

ators function in much the same manner as news-

paper editors in the sense that they exercise wide

latitude or “editorial discretion”’ in selecting the pro-

gram services to retransmit over their cables.

’ Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (1984).

* See Section 624(f), Cable Communications Policy Act of 1984,

47 U.S.C. § 544(f) (Supp. 1987); H.R. Rep. No. 98-934, 98th

Cong., 2d Sess. 70 (1984); S. Rep. No. 98-67, 98th Cong., Ist

Sess. 11-12 (1983).

13

On the first of these matters, Quincy reasons that

the ‘‘more forgiving’’ First Amendment standard said

to be applicable to the regulation of broadcasting is

inappropriate for cable television, and for that reason

the ‘“‘print model’’ of First Amendment jurisprudence

more nearly applies to cable television. 768 F.2d at

1450. Must carry rules are therefore highly suspect

because the print model—and more particularly Miami

Herald Co. v. Tornillo, 418 U.S. 241 (1974)—teaches

that ‘‘compulsory speech’ requirements are highly

suspect under the First Amendment. 768 F.2d at

1453. But this either-broadcasting-or-print-model di-

chotomy must be regarded as suspect on at least three

grounds.

First, the cases relying on the so-called spectrum

scarcity rationale do so to justify either highly intru-

sive content-based regulation’ or a complete barrier

to entry into the business through a licensing re-

quirement.'® But must carry regulation does not limit

entry into the business of cable television.'' Similarly,

the obligations must carry rules impose on cable op-

‘E.g. Red Lion Broadcasting Co., Inc. v. FCC, 395 U.S. 367

(1969). NAB takes issue with the scarcity rationale, believing

that it is entirely unjustified under present day circumstances.

See generally Loveday v. FCC, 707 F.2d 1443, 1458-59 (D.C.

Cir.), cert. denied, 464 U.S. 1008 (1983). But that question is

not presented by this case. Regulation of the use of broadcast

signals by cable television does not rest in the soft sand of the

scarcity rationale.

“E.g., National Broadcasting Co. v. FCC, 319 U.S. 190 (1943).

'' Must carry rules are for that reason not in any way akin

to an allegedly artificial restriction on the number of cable op-

erators. Cf. City of Los Angeles v. Preferred Communications,

476 U.S. 488 (1986).

14

erators turn on such content-neutral factors as the

distance between the cable system and the broadcast

station, the radiated power of the station, whether

there is evidence that some people are able to receive

the station without the aid of cable, and (in the FCC’s

most recent version) the channel capacity of the cable

system. The ideological content of the station's pro-

grams is irrelevant.

Second, First Amendment constraints on ‘‘compul-

sory speech’ requirements for print and other non-

broadcast media are not nearly as sweeping as the

lower court assumes. See, e.g., PruneYard Shopping

Center v. Robins, 447 U.S. 74 (1980); Pittsburgh Press

Co. v. Human Relations Commission, 413 U.S. 376

(1973); Lewis Publishing Co. v. Morgan, 229 U.S. 288

(1913) (upholding duty of second-class publishers to

file and publish statements regarding circulation and

to label all paid editorial content as advertising). In

Miami Herald the obligation to publish someone else’s

speech was triggered by a newspaper's decision to

publish its own “‘personal attack’’ on a politician, the

antithesis of content-neutral regulation.

Third, the lower court’s print/broadcast dichotomy

ignores yet another First Amendment ‘‘model,”’ one

which holds that content-neutral regulation of the ac-

tivities of passive carriers or conduits that retransmit

the communications of others does not raise substan-

tial First Amendment concerns. No doubt all opera-

tors of communications by wire, including telephone

and telegraph companies, enjoy First Amendment

rights. Cf. First National Bank of Boston v. Bellotti,

435 U.S. 765 (1978). Moreover, as with cable televi-

sion, the transmissions of telephone and telegraph

companies are largely over wire and contain or consist

EE

15

of constitutionally protected ‘‘speech.’’ Yet the quite

stringent ‘“‘must carry’ requirements of those com-

panies—embodied in their obligations to operate as

common carriers—to transport the messages of many

millions of other ‘‘speakers’’ surely are not vulnerable

under the First Amendment on the theory that those

obligations interfere with a telephone company’s ‘‘ed-

itorial discretion’ to pick and choose what messages

it wants to deliver."

Several decisions of this Court indicate, albeit out-

side the First Amendment context, that cable tele-

vision is a passive carrier insofar as its retransmission

of local broadcast signals is concerned. In United

States v. Southwestern Cable Co., 392 U.S. 157 (1968),

for example, this Court concluded that cable systems,

like telephone and telegraph businesses, were engaged

in electronic communication by wire and were there-

fore subject to regulation under the Communications

Act of 1934, 47 U.S.C. §§ 151 et seg. (1962), even

though cable was neither a broadcast user of the spec-

trum nor a common carrier within the meaning of

Title II of the Act. See also FCC v. Midwest Video

Corp., 440 U.S. 689, 706-07, n.16 (1979) (describing

must carry rules as analogous to but far less onerous

than full-tledged common carrier access rules which

‘But see Reply Comments of Bell Atlantic Telephone Com-

panies in FCC Docket No. 87-266, at 9-13 (December 16, 1987)

(relying on Quincy and the decision below to contend that be-

cause cable television is a First Amendment business, telephone

companies cannot constitutionally be prohibited from offering

cable television services wherever they operate telephone facil-

ities); Reply Comments of BellSouth Corporation, Southern Bel!

Telephone & Telegraph Co. and South Central Bell Telephone

Co. in FCC Docket No. 87-266, at 6 n.9 (December 16, 1987).

NN ANA'”C '

16

would require cable operators to hold out their facil-

ities indifferently for public use).

Only one week after Southwestern, this Court held

that, insofar as their broadcast signal activities were

concerned, cable operators do not “perform” copy-

righted works in the way in which a broadcaster per-

forms televised programs for copyright purposes.

Fortnightly Corp. v. United Artists Television, Inc.,

392 U.S. 390 (1968). The Court reasoned that, like

the viewer who does not ‘‘perform’’ for copyright

purposes when he watches television or changes chan-

nels, the cable operator is a ‘“‘passive beneficiary”’ of

the broadcast service; although “‘CATV equipment is

powerful and sophisticated, ... the basic function the

equipment serves is little different from that served

by the equipment [antenna and television set] gen-

erally furnished by a television viewer.” 392 U.S. at

399.

Modern cable systems, of course, typically transmit

a myriad of nonbroadcast program services unlike the

relatively primitive systems of 1968. In Quincy the

lower court attached great significance to this evo-

lutionary change (768 F.2d at 1452), but failed to

explain why (or when) it altered cable television’s pas-

sive conduit role with respect to broadcast retrans-

mission. A similar blurring of the distinct functions

of cable television was rejected by this Court when

it revisited the copyright issue in Teleprompter v.

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

(1974). Although cable operators in that case were

electing to retransmit some broadcast signals over

very great distances by means of radio microwave

relay facilities, or were originating some program-

ming on cable channels not used for the retransmis-

nee

17

sion of broadcast signals, these facts did not change

the passive role of cable television with respect to

broadcast signals because

‘in none of these [other] operations is there

any nexus with defendants’ reception and re-

channeling of the broadcasters’ copyrighted

materials. As the [Second Circuit] Court of

Appeals observed ... ‘we cannot sensibly say

that the system becomes a “performer’’ of

the broadcast programming when it offers

both origination and reception services, but

remains a nonperformer when it offers only

the latter.’ ”’

415 U.S. at 405 (citation omitted).!* Although the

lower court previously recognized that the different

functions of cable television may call for different

regulatory treatment,'* it has now created the very

nexus this Court rejected in Teleprompter.

'3 The subsequent copyright legislation accorded cable televi-

sion a compulsory copyright license to retransmit broadcast sig-

nals upon payment of nominal fees fixed by the government and

upon compliance with certain conditions (simultaneous retrans-

mission without deletion or alteration of program content or

commercials) that preclude “‘editorial discretion.’”’ Section 111,

Omnibus Copyright Act of 1976, as amended, 17 U.S.C. § 111

(1977 and Supp. 1987). This preferential copyright treatment was

thought appropriate in light of such factors as the FCC’s must

carry rules. See H.R. Rep. No. 94-1476, 94th Cong., 2d Sess.

92-93, 99 (1976); S. Rep. No. 94-473, 94th Cong., lst Sess. 78-

79, 83 (1975).

14 Home Box Office v. FCC, 567 F.2d 9, 45 n.80 (D.C. Cir.),

cert. denied, 434 U.S. 829 (1977) (concluding that there is ‘‘no

evidence” that cable distribution of nonbroadcast cable networks

and broadcast signal retransmission ‘‘are not completely separate

18

There is also reason to question Quincy’s rather

cavalier dismissal of the ‘‘early’’ cases upholding the

constitutionality of the must carry rules.'* Southwest-

ern concluded that must carry regulation was appro-

priate not because cable used scarce spectrum, but

because the FCC had reasonably concluded that such

regulation was essential to achieving the goals and

objectives of the Communications Act for broadcast

service. Likewise, the “early’’ cases rejected by

Quincy seem to rest on the rather straightforward

premise that cable operators who elect to enmesh

themselves in the distribution of broadcast service

cannot complain about reasonable conditions on their

use of that service. As Chief Justice Burger observed

in voting to uphold a highly intrusive FCC-imposed

“compulsory speech’’ requirement for cable television,

“Those who exploit the existing broadcast

signals for private commercial surface trans-

mission by CATV—to which they make no

contribution—are not exactly strangers to the

stream of broadcasting. The essence of the

matter is that when they interrupt the signal

and put it to their own use for profit, they

take on burdens, one of which is regulation

by the Commission.”

and distinct activities. . .”’).

See also National Ass’n of Regulatory Utility Comm’rs v. FCC,

533 F.2d 601, 608 (D.C. Cir. 1976) (finding unlawful FCC’s at-

tempt to preclude state regulation of cable television as a com-

mon carrier for purposes of some activities, reasoning that ‘‘it

is clearly possible for a given entity to ... be a common carrier

with regard to some activities but not others’’).

6 See supra at 3 n.1, 4 n.3.

—<—= tt

19

United States v. Midwest Video Corp., 406 U.S. 649,

676 (1972) (Burger, C.J. concurring in the result).

The lower court’s less explicit assumption about the

“editorial discretion’’ of cable operators may have

some merit insofar as the cable channels not devoted

to must carry obligations are concerned. Thus, an

outright prohibition on owning or operating cable fa-

cilities that bestows a legal monopoly on a single fran-

chised operator would seem to raise First Amendment

concerns. City of Los Angeles v. Preferred Commu-

nications, supra, 476 U.S. at 492-93.

Similarly, a cable operator willing to forego car-

riage of any broadcast signals, preferring to act as

the “programmer’”’ of all of its channels, might have

a sound basis for objecting to being conscripted into

serving as a reception service for broadcasting, with

the attendant loss of ‘‘editorial discretion’’ to control

the flow of programs over its channels. But that is

not this case. All the cable parties below—and all

other cable operators for that matter—function as a

reception service for broadcast signals, and none has

indicated a desire to discontinue carrying broadcast

signals. Far from being an unwilling conscript, cable

television has become a multibillion dollar business

largely, albeit not solely, because the public desires

convenient and enhanced reception of broadcast sig-

nals. The lower court’s assumption about editorial dis-

cretion, as applied to must carry, is no more than a

tautology: must carry obligations for those cable op-

erators who choose to retransmit broadcast signals

raise serious First Amendment issues because cable

operators have “editorial discretion’’ to pick and

choose among broadcast signals.

20

Unlike the usual distribution chain, in which the

contractual arrangements associated with the normal

workings of a free marketplace operate to give some

assurance that downstream distributors will not ex-

ercise their ‘editorial discretion’’ to jeopardize the

interests of their suppliers, cable television is immune

from the limitations that normally govern retail ven-

dors. This anomaly stems from cable television's

unique status under the copyright laws. Recognizing

that anomaly, the FCC has acted since 1966 to fill

the breach with reasonable limitations on cable tele-

vision use of broadcast signals. And in reliance on

the FCC’s regulation, the copyright anomaly has been

perpetrated. But the lower court, refusing to pay any

heed to the complex interrelationship between regu-

lation and copyright (see Quincy, 768 F.2d at 1452

n.39, 1454 n.42) now insists that cable television must

be treated as an active programmer or “‘editor’’ for

all of its channels.

This quixotic result ignores the warnings of many

thoughtful commentators that First Amendment val-

ues dictate regulation of at least some aspects of cable

television as a passive conduit or common carrier ser-

vice.'® It also casts grave doubt on the Congressional

16 See, e.g., Comment, Berkshire Cablevision v. Burke: Toward

a Functional First Amendment Classification of Cable Operators,

70 Iowa L. Rev. 525, 535-43 (1985); I. Pool, Technologies of

Freedom 106 (1988); S. Barnett, Franchising of Cable TV Sys-

tems to Get Airing at Supreme Court, Nat’] L.J. (Apr. 21, 1986)

at 44 n.20, col. 3 (describing as “‘perverse,’’ an outcome that

permits the cable operator “‘in the name of the First Amend-

ment, to stand astride the cable gateway and prevent .. . [other]

speakers from reaching the public except at his pleasure’’).

Quincy relies on ‘‘[t]wo influential commissions” to construct

21

policy of fostering some third-party access require-

ments for cable television.’ By blurring and ignoring

the distinct functions of cable television, the lower

court has turned cable television into a communica-

tions chameleon that changes its colors to fit the co-

pyright, First Amendment or other legal issue of the

day.

2. The Lower Court Has Misapplied O’Brien, Princi-

pally By Refusing To Accord Any Deference To The

Agency Findings And Conclusions, And This Ap-

proach Is In Conflict With The Decisions Of This

Court And Various Lower Federal Courts.

Quite apart from the broader First Amendment is-

sue, the lower court’s application of the O’Brien test

warrants review by this Court. The question of the

degree of judicial deference to be accorded to admin-

istrative agency judgments in support of regulations

that constitute “incidental” burdens on First Amend-

ment freedoms is an important one, affecting a wide

range of cases. Moreover, the lower court’s resolution

its First Amendment analogy even though both commissions

urge the sort of common carrier regulation of cable television

that Quincy jeopardizes on First Amendment grounds. Compare

768 F.2d at 1450 with Cabinet Committee on Cable Communi-

cations, Cable: Report to the President, 20, 51-52 (1974) (urging

that cable operators should be relegated to being passive carriers

for other programmers when cable reaches 50 percent penetra-

tion nationwide) and Sloan Commission on Cable Communica-

tions, On the Cable: The Television of Abundance, 146-48 (1971)

(suggesting that common carrier treatment of cable television is

appropriate when cable achieves maximum penetration).

7 See, e.g., H.R. Rep. No. 98-934, 98th Cong., 2d Sess. 30-37

(1984) (concluding that such access requirements are constitu-

tional and indeed foster First Amendment values).

ts

22

of that question appears to represent a serious de-

parture from the prior decisions of this Court.

The lower court held that the ‘‘substantial defer-

ence”? which it normally would accord to administra-

tive decisionmaking has “‘little relevance when First

Amendment freedoms are even incidentally at stake”

(App. 16a) and proceeded to overturn the FCC de-

cision based on the panel’s different judgments on

matters of predictive fact. This approach stands in

stark contrast to the norm for judicial review of

agency rulemaking decisions. Time and again this

Court has pointed out that a reviewing court “‘is not

empowered to substitute its judgment for that of the

agency.’ Citizens to Preserve Overton Park v. Volpe,

401 U.S. 402, 416 (1971). Such ‘‘Monday morning

quarterbacking”’ is prohibited because it ‘‘fundamen-

tally misconceives the nature of the standard for ju-

dicial review of an agency rule.’”’ Vermont Yankee

Nuclear Power Corp. v. Natural Resources Defense

Council, Inc., 485 U.S. 519, 547 (1978). Yet, that is

precisely what the lower court avowedly did here.

Although O’Brien and its progeny may not artic-

ulate the precise degree of deference to be accorded

to the judgments of an administrative agency or leg-

islative body, this Court’s decisions provide clear in-

dications that considerable deference is required. For

example, in City of Renton v. Playtime Theaters, Inc.,

475 U.S. 41 (1986), a zoning ordinance prohibiting

the operation of so-called adult theaters in all but a

small portion of the community was upheld as con-

stitutional even though another municipality, on the

basis of the same evidence of the harmful secondary

effects of such theaters, had adopted a solution which

was virtually the opposite of the ordinance before the

23

Court. Far from condoning a court’s substituting of

its judgment for that of the agency, this Court held

that it was not the function of the judiciary to ap-

praise the wisdom of the choice of means selected by

the municipality.

In Clark v. Community for Creative Nonviolence,

468 U.S. 288 (1984), U.S. Park Service regulations

prohibiting ‘‘camping,”’ including ‘“‘sleeping,’’ in cer-

tain core parks in Washington were upheld as a rea-

sonable incidental burden on the First Amendment

rights of advocates of the homeless who wished to

engage in symbolic speech/protest through ongoing

demonstrations in those parks. In language that could

readily be applied to the instant case, this Court took

the lower court to task for basing its decision on what

was

‘no more than a disagreement with the Park

Service over how much protection the core

parks require or how an acceptable level of

preservation is to be attained. We do not

believe, however, that either United States v.

O’Brien or the time, place, and manner de-

cisions assign to the judiciary the authority

to replace the Park Service as the manager

of the Nation’s parks or endow the judiciary

with the competence to judge how much pro-

tection of park lands is wise and how that

level of conservation is to be attained.”’

468 U.S. at 299 (footnote omitted).

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

the respondent had successfully challenged regulations

that prohibited persons holding a military bar letter

for having previously engaged in unlawful activity in

24

the course of a demonstration from returning to the

military base even when the general public was in-

vited to the base and the respondent did not threaten

to engage in any inappropriate conduct. In reversing,

this Court held that O’Brien was satisfied when the

content-neutral regulation promoted a substantial gov-

ernment interest ‘‘that would be achieved less effec-

tively absent the regulation.”’ 472 U.S. at 689. The

First Amendment issue does not ‘‘turn on a judge’s

agreement with the responsible decision-maker con-

cerning the most appropriate method for promoting

significant government interests.”’ Jd.

Ignoring these three cases, which were discussed

at length in the briefs and in the FCC decisions, the

lower court asserted that

“the Supreme Court has often noted that the

substantial deference due in the administra-

tive context has little relevance when first

amendment freedoms are even incidentally at

stake.”’

App. 16a. It then went on to discuss three cases that

provide very little support for this rather sweeping

proposition.’

‘8 In Members of the City Council of Los Angeles v. Taxpayers

for Vincent, 466 U.S. 789, 815-16 (1984), this Court upheld an

ordinance prohibiting all political signs and posters on public

property despite its conclusion that the city might have drafted

an ordinance consistent with its aesthetic goal that would have

permitted more opportunities to exercise First Amendment

rights. In Schad v. Borough of Mount Ephraim, 452 U.S. 61

(1981), the Court struck down an ordinance prohibiting any live

entertainment in the community, as applied to nude dancing in

bars, because the municipality offered no justification whatsoever

for singling out live entertainment for restriction. The lower

25

If allowed to stand, the decision below is likely to

cause considerable confusion among the circuit courts

with respect to the proper scope of the O’Brien test.

Even within the D.C. Circuit there are now two seem-

ingly contradictory lines of cases. In contrast to the

decision below there is White House Vigil for the ERA

Committee v. Clark, 746 F.2d 1518, 1534 (D.C. Cir.

1984) (“[w]e are not at liberty, however, to replace

the agency’s judgment with our own. It is sufficient

that the means selected be ‘narrowly tailored’: that

they lie within the range of feasible options the agency

was constitutionally permitted to consider’’). But see

id. at 1542 (Wald, J. concurring in part and dissenting

in part). See also The Enterprise, Inc. v. United States,

833 F.2d 1216 (6th Cir. 1987).

Even if it were writing on a clean slate, the D.C.

Circuit’s most recent interpretation of the O’Brien test

is at best debatable. Although by definition important

constitutional interests are at stake, that would not by

itself seem to call for a standard of judicial review

which puts the courts in the business of micro-man-

aging matters otherwise entrusted to administrative

agencies. Compare United States v. Martinez-Fuerte,

428 U.S. 543 (1976) (Fourth Amendment rights). More-

over, although protection of First Amendment inter-

ests is certainly a matter of the highest order and

concern, cases from administrative agencies in which

court’s only other citation is to Justice Brennan’s opinion con-

curring in part and dissenting in part in Heffron v. International

Society for Krishna Consciousness, Inc., 452 U.S. 640, 658 (1981),

in which the majority upheld crowd control regulations that pro-

hibited any solicitations, sales or distribution of printed or writ-

ten material on State Fair grounds other than from specified

fixed locations.

26

regulations are perceived as imposing an incidental

burden on protected speech are no less likely than any

other administrative agency case to involve complex

technical issues that are most appropriately entrusted

to an expert agency.

Indeed, the instant case clearly illustrates the haz-

ards of second-guessing of administrative agency de-

cisionmaking by courts which do not deal with those

matters on a day-to-day basis. Here, for example, the

lower court condemned the agency’s solution largely

because it apparently misunderstood the nature of the

problem. The opinion below assumes that the threat

which prompted the FCC. decision was the possibility

that, without must carry rules, cable systems would

abruptly drop all or nearly all of the local broadcast

signals they have historically carried. So defined, the

panel saw the threat as remote, and thought that, if

it occurred, cable subscribers would be quick to make

other arrangements in order to continue receiving

such an important element in their present package

of television service.

In fact, however, the FCC was addressing a much

more immediate albeit less apocalyptic problem: As

the FCC found, and as the evidence before it amply

demonstrated, the threat is one of gradual erosion:

initially, newly operational stations that have had no

opportunity to build audiences among cable subscri-

bers would not be added to the systems and stations

that had been carried only briefly would be dropped.

The absence of new stations from the cable system

is not likely to send subscribers scurrying to their

hardware stores to buy A/B switches in order to re-

gain access to stations they have been accustomed to

watching for many years. Simply put, the lower

ee

27

court’s assumptions that cable operators would not

foolishly alienate their subscribers—and that subscri-

bers will react promptly if cable operators were that

foolish—may have intuitive appeal but are not rele-

vant to the real issue."

Perhaps the lower court’s most glaringly incorrect

assumption, which is apparently based on no more

than the personal perception of the panel, involves

the rapid public acceptance of new technologies. Over-

looking the fact that A/B switches hardly qualify as

a new technology, having been discussed in an FCC

decision some 22 years earlier,”’ the panel opinion

ridicules the FCC’s judgment with the observation

that the way in which home computers and other new

technologies have “‘spread like wildfire’ indicates con-

sumers will quickly adjust to buying, installing and

'* If the panel below had expertise in communications matters,

it might have recognized the parallel between the actual threat

to local broadcast service in the absence of must carry regulation

and the history of UHF television development. When UHF

stations initially came on the air in the 1950s, viewers owned

television sets that generally could receive only VHF channels.

Because viewers did not race out to buy new sets or inexpensive

hardware to convert their existing sets in order to gain access

to one or two new UHF stations in addition to the several VHF

signals they already received, many of those early UHF stations

languished and died. This prompted Congress to pass the all

channel receiver legislation prohibiting the shipment in interstate

commerce of television sets that cannot receive UHF as well as

VHF signals. Although that law took effect in 1962, see South-

western, supra, 392 U.S. at 175 n.42, more than a decade later

UHF stations continued to suffer from various competitive

“handicaps”’ vis-a-vis VHF stations. See, e.g., Inquiry Into the

Economic Relationship Between Broadcasting and Cable Tele-

vision, 71 F.C.C.2d 632, 646 (1979).

* See First Report and Order, supra, 38 F.C.C. at 702-03.

28

using A/B switches and private antennae. App. 24a.

If the panel’s perception about the acceptance of new

technologies stems from observations among house-

holds in which at least one adult earns upwards of

$100,000 per year and has a post-graduate degree, it

proves an apt illustration of the risks of generalizing

from so atypical a sample.*! The panel’s predictive

judgment also seems to stem from a misreading of

the record.”

“’ By March 1987 only 16 percent of all U.S. homes had home

computers, according to Standard & Poor’s Industry Surveys,

Computer & Office Equipment 91 (Oct. 1, 1987), despite the

“boom days” of the early 1980s “‘when home computers were

the big rage.”” Jd. By year-end 1986 no more than 5 percent of

U.S. households had compact disk-players. Standard & Poor's

Industry Surveys, Computer & Office Equipment, Leisure Time

26-27 (March 26, 1987). After being on the market for well over

five years, VCRs were expected to reach 50 percent penetration

of U.S. households by the end of 1987. Jd. at 24. But if the

VCR acceptance rate is indicative of the extent to which cable

subscribers would make adjustments to receive local signals over-

the-air, the implication is that, even if A/B switches and outdoor

antenna “spread like wildfire," over 20 million American homes

(some 50 percent of all cable homes) would not make those

adjustments and thus would not be able to receive the noncarried

stations.

22 The panel thought that adequate antennae could be acquired

for $50 (App. 10a), citing a portion of the record describing the

average initial cost of antennas purchased in 1973 (12 years

before the 1985 survey was conducted). The panel also assumed

that adequate switches were readily available and could be pur-

chased for a mere $7.50. It also neglected to note that the FCC

in a separate proceeding has concluded that the technical spec-

ifications for existing switches had to be upgraded. See Report

and Order in Docket No. 87-107 (November 20, 1987) (setting

technical performance standards for A/B switches).

29

The lower court also overlooked the de minimis

nature of the incidental burden of the new must carry

rules. The rules found overbroad in Quincy required

cable systems to carry all “‘local’’ signals and defined

“local” quite expansively so that there were some

instances in which cable systems with very limited

channel capacity could not retransmit any cable net-

works until they invested in improvements to increase

channel capacity. The post-Quincy rules largely ex-

empt all systems with fewer than 21 useable channels

from any must carry obligations, define stations en-

titled to must carry rights much more narrowly than

the former rules, and impose a cap of generally 25

percent on the amount of cable channel capacity that

any cable system would have to devote to must carry

signals. The very modest burden of the new rules no

doubt explains why not one cable network program-

mer and only 14 cable operators challenged the new

rules in the lower court, and why those 14 companies

(which own over 200 separate cable systems serving

2.5 million cable subscribers) failed to cite even a

single instance in which a cable system had been com-

pelled to drop or was unable to add some other pro-

gram service as a result of the new must carry rules.

When courts of general jurisdiction attempt to sub-

stitute their judgment for that of an administrative

agency, glitches and errors of this sort are inevitable.

These glitches and errors frustrate legitimate gov-

ernment regulation without advancing First Amend-

ment values.

30

CONCLUSION

The petition should be granted.

Of Counsel:

HENRY L. BAUMANN

BENJAMIN F.P. IvINS

NATIONAL ASSOCIATION OF

BROADCASTERS

1771 N Street, N.W.

Washington, D.C. 20036

March 10, 1988

Respectfully submitted,

MICHAEL S. HORNE*

STEVEN F. REICH

COVINGTON & BURLING

1201 Penn. Ave., N.W.

P.O. Box 7566

Washington, D.C. 20044

(202) 662-6000

Attorneys for Petitioner

National Association of

Broadcasters

* Counsel of Record