# Petition for Writ of Certiorari — Office of Communication of the United Church of Christ v. Federal Communications Commission > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_1508%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1988 - **Citation:** 486 U.S. 1032 ## Text = IN THE Supreme Court of the GAnited States OCTOBER TERM, 1987 ASSOCIATION OF INDEPENDENT TELEVISION STATIONS, INC., Petitioner, CENTURY COMMUNICATIONS CORPORATION, et al., Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT J. LAURENT SCHARFF* JAMES M. SMITH ROBERT J. AAMOTH PIERSON, BALL & Dowp 1200 18th Street, N.W. Washington, D.C. 20036 (202) 331-8566 Attorneys for Petitioner March 10, 1988 *Counsel of Record QUESTIONS PRESENTED The resolution of this case will determine whether the American public will continue to enjoy unob- structed access to diverse, competitive local television broadcasts, or whether the public’s television viewing alternatives will instead be controlled by the single, monopoly cable television system operator in the com- munity. The questions presented are: 1. Whether the court of appeals erred in holding that the FCC’s must-carry rules, which required cable television systems which have larger channel capaci- ties and which serve as gatekeepers for their sub- scribers’ viewing of television broadcast signals to carry minimum numbers of qualifying local television broadcast stations, were invalid under the First Amendment on the ground that the rules did not reflect an important and substantial governmental in- terest despite several acts of Congress and numerous decisions of this Court which have found that FCC regulation of cable carriage of local television broad- cast signals, including the kind of mandatory-carriage rules in question here, was statutorily authorized and served the substantial governmental interest in pre- serving the system of free, local broadcast stations. 2. Whether the court of appeals incorrectly applied the First Amendment test in United States v. O’Brien, 391 U.S. 367 (1968), by requiring the Commission to prove affirmatively by substantial evidence that cable systems in the future would refuse to carry local broadcast signals to the detriment of local broad- casting absent the must-carry rules. 3. Whether the court of appeals erred by requiring the FCC to adduce ‘“‘substantial evidence” in the re- cord to support its findings in an informal rulemaking proceeding and by failing to defer to the expert pre- dictive judgments of the FCC based on the evidence in the record. ill LIST OF PARTIES In addition to the parties listed in the caption, the following were parties in the proceedings before the court of appeals: United States of America, Federal Communications Commission, Richard S. Leghorn, Hubbard Broadcasting, Inc., Chasco Cablevision, Ltd., Clearview Cablevision Associates II, Columbia Asso- ciates, L.P., Daniels & Associates, Inc., Landmark Cablevision Associates, Monmouth Cablevision Asso- ciates, Masada Communications, Inc., National Cable- systems, Inc., OCB Cablevision, Inc., Ocean Associates, Riverview Cablevision Associates, St. Charles CATV, Inc., United Cable Television Corp., Office of Communication of the United Church of Christ, Spanish International Communications Corp., Univision, Inc., The National Association of Broad- casters, Lincoln Broadcasting Co., National Cable Tel- evision Association, et al., Corporation for Public Broadcasting, National Association of Public Televi- sion, Public Broadcasting Service, and National Broadcasting Co., Inc. Petitioner Association of Independent Television Stations, Inc. has no parent companies, subsidiaries or affiliates to list pursuant to Rule 28.1 of this Court. TABLE OF CONTENTS Page SI EO ic 1 | NO AAS 1 ene Co a ee ee 1 CONSTITUTIONAL PROVISIONS, STATUTES AND REGULATIONS. .00........0cccceccsosccoscsseoseoee 2 STATEMENT OF THE CASE ........ccccccccccseccoceeees. 2 REASONS FOR GRANTING THE WRIT .......... 12 I. THE DECISION BELOW IS ESSEN.- TIALLY IN CONFLICT WITH DECISIONS OF THIS COURT AND IS IN DIRECT CONFLICT WITH A DECISION OF THE oe tcl | Sep M EET ETL TE 12 II. THE DECISION BELOW PRESENTS IM- PORTANT CONSTITUTIONAL AND STA- TUTORY ISSUES WHICH THIS COURT SHOULD RESOLVE .........cccccccccesscsessoseees, 16 A. This Court Should Grant Certiorari To Determine Whether The Court Below Was Correct In Its Application of The O'Brien Test And In Rejecting The Ex- pert Judgments Of The FCC ................. 16 B. The Quincy and Century Decisions Have Induced The Commission To Abandon The Public Interest Rationale For The Must- Carry Rules Which Has Been Approved By This Court In Several Decisions ...... 23 C. The Court Below Ignored The Interrela- tionship Between Commission Signal Car- riage Rules And The Federal Copyright Scheme For Carriage Of Such Signals .. 28 MEN wicca eo mek 30 SO EIT. eiceshiessttapacniiniatsnitasaAicccnncteeeiccasligateie sti: Al TABLE OF AUTHORITIES CASES Page Black Hills Video Corp. v. FCC, 39% F.2d 65 (8th Che, BBGBD ccnnececssccscccrscessnscsnsccasecsstscsoncenvesens 5,12-13,14 Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (1984) .....ccccccsssscssssscccssrcsscssccccssresscsscsssssenscesees 2,14,16 Century Communications Corp. v. FCC, 835 F.2d 292 (D.C. Cir. 1987) ......ccccccccsesssereceesessssereeeees passim City of Los Angeles v. Preferred Communications, Inc., 476 U.S. 488 (1986) ......cccecceereterereeeeeees 8 Clark v. Community for Creative Non-Violence, 468 U.S. 288 (1984) ........ccseccccccccccsscccssssssscncserssers 20-21 FCC v. National Citizens Committee for Broad- casting, 436 U.S. 775 (1978) ....cesscseesseereeeeees 20,21 FCC v. WNCN Listeners Guild, 450 U.S. 582 (1GB1) ..ecccrcccsesscesrerrssssscscsesensenssescsorosasosonssasnsanes 21 Home Box Office, Inc. v. FCC, 567 F.2d 9 (D.C. Cir.), cert. denied, 434 U.S. 829 (1977) .......... 3 Miami Herald Publishing Co. v. Tornillo, 418 U.S. PAL (1974) .......ccscrscrcrccovssssssrccecsssssnnonssnssessnnnace 6,16 Quincy Cable TV, Inc. v. FCC, 768 F.2d 1484 (D.C. Cir. 1985), cert. denied sub nom. National As- sociation of Broadcasters v. Quincy Cable TV, Inc., 476 U.S. 1169 (1986) .........ccccseceereerreeees passim United States v. Albertini, 472 U.S. 675 (1985) ..... 20-21 United States v. Midwest Video Corp., 406 U.S. GAD (1972) ncccccocccscecsnccscsssconscnccsesesenessasaees 13-14,21-22 United States v. O’Brien, 391 U.S. 367 (1968) ..... passim United States v. Southwestern Cable Co., 392 U.S. 157 (1968) ......00.....ccccccccssssesescerrrcsssossscsssesescns passim vi Page FEDERAL CONSTITUTIONAL PROVISIONS. STATUTES AND LEGISLATIVE MATERIALS U.S. Comst. amend. 1 oo.ccccccccccccocccccceseseeeeescceeeeeen.n. passim VT U.S.C. § UD occcccccscscescscsccsssessssessseeeeseeeces. passim 28 U.S.C. § 2844 oc cccccccceccscececsesssecseseseesecececs.. 11 AT U.S.C. § 151 oun... cccsccccscsescssessssssesesesscseeeeeseses-, 4,23 47 U.S.C. § 808(g) o...eccccccscccescssscesessesseseceeseseees... 4,23 47 U.S.C. § B08(h) ooeccecccccccccccccccsceccecsceseececeesececee.n. 4,23 AT U.S.C. § BO0B(S) oooceccccccccccccccececeeseeececeeseseeeccce. 4,23 AT U.S.C. § B07) oooeceeeccccccceccccscscecsesseeeeeceeeesececc... 4,23 47 U.S.C. § 4028) ooeeceecccccccccccccecesecseseeeececeeeeecceee.. 11 47 U.S.C. § 521 et DOG. sicnccrecctoccccecesssaccesensesenscesncs passim 47 U.S.C. § 588 oe cccccscscscsecersesceesesseeeseeseeccecen. 6 AT U.S.C. § 548 oc ccccccsccscecescecsetereseeseseccc. 6 47 U.S.C. § 544 oc ccccscscscsecessesssesesseseseseesc.. 6 AT U.S.C. § 546 occ cccccccscscscsceessesssesesseeeseseeen.. 6 AT U.S.C. § G11 on... ccccssccccessscecscsesesecessesesececseees.. 17 AT U.S.C. § 612 cocccccsccesssssssssossesssvesseeeeeeeeeeeesecc. 17 H.R. Rep. No. 934, 98th Cong., 2d Sess. (1984) .. 6,17 H.R. Rep. No. 1559, 87th Cong., 2d Sess. (1962) . 4 S. Rep. No. 67, 98th Cong., Ist Sess. (1983) ....... 6 FCC Decisions Amendment of Part 15 of the Commission’s Rules. FCC 88-27, Gen. Docket No. 87-107, rel. Jan. 28, 1988 (Order Granting Stay Request) ........ 28 Amendment of Part 76, FCC DA 87-1665, rel. Nov. 23, 1987 (Erratum) .0........ccccccccccccceseseeeeeecs-.... i) vil Cable Television Mandatory Signal Carriage Rules, 55 Rad. Reg. 2d (P&F) 1365 (1984) ............... 24 Cable Television Report and Order, 36 F.C.C.2d 143 (1972), affd sub nom. ACLU v. FCC, 523 F.2d a 29 CATV, 2 F.C.C.2d 725 (1966), aff'd sub nom. Black Hills Video Corp. v. FCC, 399 F.2d 65 (8th CAPs HU iiiniiciiviccssesacchdementabaneisilosancdnininibienidscaaia 5,14 CATV, BD. FACALBS BOE CGD ccccctctcccssscssnincssccsnses 3 CATV First Report and Order, 38 F.C.C. 683 ERIIED. cxncesidabsnculiscieecoianseiebanabnaamnals 5,21,22,24 CATV Syndicated Program Exclusivity Rules, 79 F.C.C.2d 663 (1980), affd sub nom. Malrite T.V. of New York v. FCC, 652 F.2d 1140 (2d Cir. 1981), cert. denied sub nom. National Foot- ball League v. FCC, 454 U.S. 1143 (1982) .... 5 Television Assignments, 41 F.C.C. 148 (1952) ....... 4 FCC REGULATIONS SS Gh OO cesticsceisititnineniinide 17 Be Sa: NE UU tavkeicincensencevinkenntadctuncenaeda 3 Oe Re er SD cetenenncnttisiecetinscnnnenineaindnpiiadeaen 9 Oe er cis Se ID cccntccectesnnnvncnesensdctensceiisistibinisintasatin 8,9 Be aie EY sassdinsicisincaseunnctecsanenctnsnibiniandimntaiine 10 Oe Cree Or SND ‘ciectitnicciadeiiniarcteatinneeieeeinnd 10 MISCELLANEOUS Affidavit of Muriel Henle Reis, submitted with Re- sponse to Petition for Rehearing, filed by As- sociation of Independent Television Stations, Inc. and National Association of Broadcasters _ March 3, 1988 in Nos. 86-1683, et al. (D.C. BaD cnnvtncencnieunstishieaianeiieannnasdanhaesiaemadimmumnaaianiiti 26 Vill Page Brief of National Association of Broadcasters and Association of Independent Television Stations, Inc., No. 86-1683, filed Aug. 25, 1987 (D.C. GU AD stscniaticencpunididlsikinstntaakdhiigsincnbiiadisusssmmmdiaalasidaniance 25 Brief of Office of Communication of United Church of Christ, No. 86-1683, filed July 20, 1987 (D.C. NPI pieeinaastnceab sania a 25 Broadcasting, Feb. 8, 1988 at 111 ...ccccccecccccccesceees 12 Broadcasting, Feb. 29, 1988 at 41 .o.c.ccccccccccceceeees 27 Comments of Association of Independent Television Stations, Inc., filed Jan. 29, 1986 ............... 17,25,27 Comments of National Association of Broadcasters. I 25 Comments of Pico Macom, Inc., filed Jan. 21, UOT | iccdsieabicalatsdiaisdiipetesitiiblciphiesamaubtasaekaediensesoceaise: ane 28 Comments of Television Overators Caucus, filed Sis NE SU oli sree ts ol Fe 25 Communications Daily, Dec. 14, 1987 at 1 ........... 12 Communications Daily, Nov. 25, 1987 at 7 .......... 26 Communications Daily, Nov. 10, 1986 at 3 .......... 27 Communications Daily, Aug. 21, 1986 at 2 .......... 3 Joint Petition for Reconsideration of National Cable Television Assocation, Community Antenna Television Assocation and National Association of Broadcasters (with attached NCTA Engi- neering Committee Report), filed Dec. 17, gp cD EE a ee AOR a, Pen 24 Letter from FCC Chairman Dean Burch to Senators Warren G. Magnuson, Chairman, Senate Com- merce Committee, and John O. Pastore. Chair- man, Senate Subcommittee on Communi- cations, dated March 11, 1970 ........................ 29 Letter from FCC Chairman Dennis Patrick to the Honorable John D. Dingell, dated Feb. 23. NEE cpcdasisdndeaninticsgeatgt ee Rt tl 23 Letter from Senator Barry Goldwater, Chairman, Senate Telecommunications Subcommittee, to FCC Chairman Mark S. Fowler, dated Sept. BD, ROD visctsciiiniscnsscsoscncsnsssessssetenccctocsessasssascsoacs Memorandum for the Federal Respondents in Na- tional Association of Broadcasters v. Quincy Cable TV. Inc., No. 85-502, filed Nov. 21, 1985 OB, CRD seicscninnsscsssnterscsnncsnatsosnnccnsinncssssconcnacsaracccs Multichannel News, Oct. 20, 1986 at 28A ............. Multichannel News, Apr. 14, 1986 at 48 .............. Multichannel News, Feb. 17, 1986 at 1 .............04 New York Times, Feb. 17, 1988 at D18 ............... Opposition of Corporation for Public Broadcasting, et al., filed Feb. 17, 1987 ........ccccccccsccoccrcerssses Petition for Reconsideration of Gill Industries, Inc., eee, Tie TET a. cadscocssntsansdntenomndnsanansatosnens Petition for Reconsideration of Adelphia Commu- nications, et al., filed Jan. 12, 1987 .............. Reply Brief of Office of Communication of United Church of Christ, No. 86-1683, filed Sept. 11, BGBT CDC. CHP.) ncccccccccccccccnsrecnssassesssscncvecscsseone Page PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT The Association of Independent Television Stations, Inc. (“INTV”’), by its attorneys, hereby petitions for issuance of a writ of certiorari to review the judgment of the United States Court of Appeals for the District of Columbia Cir- cuit in these consolidated cases. OPINIONS BELOW The opinion of the court of appeals, dated December 11, 1987, is reported at 835 F.2d 292 and reprinted in the Joint Appendix (“‘Jt. App.’’) at la-28a. On January 29, 1988 the court issued a clarifying Order, which has not been reported and which is reprinted in the Joint Appendix at 29a-3la. The Report and Order of the Federal Com- munications Commission (‘‘“FCC”’ or ‘‘Commission’’) which adopted the regulations at issue is reported at 1 FCC Red 864 and reprinted in the Joint Appendix at 32a-204a. The Commission’s decision on reconsideration of the Report and Order is reported at 2 FCC Red 3593 and reprinted in the Joint Appendix at 205a-330a. JURISDICTION The judgment of the court of appeals, reprinted in the Joint Appendix at 33la-32a, was entered on December 11, 1987. No party filed a petition for rehearing of the court’s opinion and the mandate issued on February 9, 1988. Sev- eral parties jointly filed a motion to stay the mandate on February 9, 1988, and the court issued an Order recalling the mandate on February 22, 1988. On February 23, 1988, several parties jointly filed a petition for rehearing of the court’s Order clarifying its opinion. The jurisdiction of this Court rests upon 28 U.S.C. § 1254(1). bho CONSTITUTIONAL PROVISIONS, STATUTES AND REGULATIONS The following constitutional provisions, statutes and agency regulations have been reprinted in the Joint Ap- pendix or in the Appendix (‘‘App.’’) attached to the instant petition: (i) the First Amendment to the Constitution of the United States (App., A1); (ii) Sections 1, 303(g)-(h) & (s), and 307(b) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 303(g)-(h) & (s), 307(b) (App., A1-2); (iii) Section 111 of the Copyright Revision Act of 1976, 17 U.S.C. § 111 (App., A2-19); (iv) Section 624 of the Cable Communications Policy Act of 1984, 47 U.S.C. § 544 (App., Al9-21); and (v) the regulations of the Com- mission which were at issue below, 47 C.F.R. §§ 76.5, 76.51-76.70 (Jt. App., 177a-87a, as modified at Jt. App., 318a-32a). STATEMENT OF THE CASE The Commission licenses television broadcast stations to use radio frequencies to serve the public interest by pro- viding advertiser-supported or public-supported ‘‘free’’ tel- evision services to local communities. Most communities are served by several competing local commercial television stations, including stations affiliated with the three tele- vision broadcast networks (ABC, CBS and NBC) and one or more independent stations,' as well as by non-commer- cial educational stations. Cable systems use coaxial cable to retransmit to their subscribers the signals of local television stations and other television program services which are not available to local viewers over the air. The non-local programming offered by cable systems consists primarily of the signals of distant television broadcast stations and other specialized program services. See Capital Cities Cable, Inc. v. Crisp, 467 U.S. ‘Petitioner INTV is an association of independent television stations, many of which are new, financially struggling UHF stations. 691, 700-01 (1984) (““Crisp’’). Cable television systems use FCC-assigned radio spectrum to receive program trans- missions via satellite circuits and to relay signals via mi- crowave frequencies.” Nevertheless, the systems themselves are not licensed by the Commission and are not subject to public interest program obligations as are broadcasters. The coaxial cable interfaces with a subscriber’s television set at the VHF antenna input. Because a subscriber’s VHF antenna must be disconnected from the receiver in order to accommodate the cable input, and because cable pro- vides clear signal reception, most television viewers dis- mantle their external antennas and rely entirely on the cable system to receive local television broadcast signals. Jt. App., 98a-99a.) In addition, many apartment and other multi-family dwellings employ a “master” cable input in lieu of an outdoor antenna, making cable the only prac- ticable means of access to local broadcast signals. The cable system thereby becomes the ‘‘gatekeeper’’ determin- ing which television stations and other program services gain access to the homes of cable subscribers.’ The Commission first asserted jurisdiction over cable television (or ‘““CATV’’) in the early 1960s because cable is a “closed’’ transmission medium which exploits and at the same time supplants over-the-air television reception. The Commission grounded its regulation of cable in its statutory duty to make broadcasting available ‘“‘to all the 2 See generally 47 C.F.R. Part 78 (Cable Television Relay Service). * Cable television has developed as a de facto intra-modal monopoly service. At present, fewer than one percent of the nation’s cable sys- tems experience competition from another cable system. See Commu- nications Daily, Aug. 21, 1986 at 2; see also CATV, 20 F.C.C.2d 201, 222 n.27 (1969), quoted in Home Box Office, Inc. v. FCC, 567 F.2d 9, 46 n.81 (D.C.Cir.), cert. denied, 434 U.S. 829 (1977) (‘‘cable television’s operations have developed on a noncompetitive, monopolistic basis in the particular areas served, with no instance, to our knowledge where a member of the public subscribes to more than one cable television service’’). people of the United States,’ 47 U.S.C. § 151 (App., AJ), to “encourage the larger and more effective use of radio in the public interest,” 47 U.S.C. § 303(g) (App., A1-2), to ‘‘establish areas or zones to be served by any station,”’ 47 U.S.C. § 303(h) (App., A2), and to ‘‘make such distri- bution of licenses ... among the several States and com- munities as to provide a fair, efficient and equitable distribution of radio service to each of the same,” 47 U.S.C. § 307(b) (App., A2). The Commission’s commitment to a policy of maximi- zation and localism of broadcast service is reflected in the television channel allocations which the Commission made in 1952 to “approximate the mathematical optimum”’ of television broadcast channels in communities throughout the nation. Television Assignments, 41 F.C.C. 148, 152 (1952). The Commission declared that ‘“‘as many commu- nities as possible should have the opportunity of enjoying the advantages that derive from having local outlets that will be responsive to local needs.” Jd. at 172. Congress expressly endorsed the Commission’s policy when it en- acted the All-Channel Television Receiver Act of 1962.' Congress declared that ‘‘[t]he goal which is being sought is a television system which will serve all the people, en- courage local outlets, foster competition—particularly in larger markets—and meet educational needs.’”® To assure the integrity and fulfillment of its local broad- cast channel allocation policy, the Commission first adopted regulations requiring cable systems to carry the signals of local television stations (hereinafter ‘‘must-carry rules’’) in 1965 and 1966. The Commission found that “the CATV system which fails to carry the local station on its system has in practical effect cut off the station from access to ‘Public Law No. 87-529, 76 Stat. 150 (1962), codified as amended at 47 U.S.C. § 303(s) (App., A2). > H.R. Rep. No. 1559, 87th Cong., 2d Sess. 3 (1962). on CATV subscribers.’ Because such a denial of access would threaten the economic foundation of over-the-air broad- casting, the Commission held that permitting cable systems to exclude local broadcast signals was inimical to the Com- mission’s statutory mandate to foster the general public’s access to local television broadcast services.’ The Com- mission concluded that it would be ‘“‘{in]Jcompatible with our responsibilities to permit persons willing and able to pay for additional service to obtain it at the expense of those dependent on the growth of television broadcast fa- cilities for an adequate choice of services.’’® This Court upheld the Commission’s statutory authority to regulate cable television in 1968. United States v. South- western Cable Co., 392 U.S. 157 (1968) (“‘Southwestern’’). Later the same year, the United States Court of Appeals for the Eighth Circuit expressly upheld the constitution- ality of the must-carry rules under the First Amendment. Black Hills Video Corp. v. FCC, 399 F.2d 65 (8th Cir. 1968) (‘Black Hills’’). Moreover, while the must-carry rules were in effect, Congress and the Commission adopted sev- eral measures designed to assist the development of the cable television industry. Among others, Congress created a compulsory copyright license in 1976 to permit cable systems to retransmit local television broadcast signals free of charge and to retransmit the signals of distant stations upon payment of a fixed royalty to the United States Copyright Office. 17 U.S.C. § 111 (App., A2-19). In 1980 the Commission permitted cable systems to import an un- limited number of distant television signals. Four years *CATV, 2 F.C.C.2d 725, 736 (1966), affd sub nom. Black Hills Video Corp. v. FCC, 399 F.2d 65 (8th Cir. 1968). *CATV First Report and Order, 38 F.C.C. 688, 702-03 (1965). *Id. at 699. * CATV Syndicated Program Exclusivity Rules, 79 F.C.C.2d 663 (1980), affd sub nom. Malrite T.V. of New York v. FCC, 652 F.2d 1140 (2d Cir. later Congress enacted the Cable Communications Policy Act of 1984, 47 U.S.C. § 521 et seg., which bestowed various privileges and protections upon cable operators while at the same time largely deregulating cable sys- tems.'” The 1984 Cable Act shielded cable systems from governmental ‘‘requirements regarding the provision or content of cable services’ except as provided under the Act,!! but it expressly retained the Commission’s must- carry rules.'* In Quincy Cable TV, Inc. v. FCC, 768 F.2d 1484 (D.C. Cir. 1985), cert. denied sub nom. National Association of Broadcasters v. Quincy Cable TV, Inc., 476 U.S. 1169 (1986) (‘Quincy’), the U.S. Court of Appeals for the Dis- trict of Columbia Circuit struck down 20 years of must- carry regulation as violating the First Amendment rights of cable operators. The court rejected the Eighth Circuit’s earlier affirmance of the rules under the First Amendment and distinguished this Court’s prior statements approving the rules and the substantial governmental interest they promoted. Addressing at length the question of what First Amendment standard governs cable television, 768 F.2d at 1447-54, the court strongly suggested that the most appropriate degree of protection is that accorded to the editorial discretion of newspapers under Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974) (“Miami Herald’’). 1981), cert. denied sub nom. National Football League v. FCC, 454 U.S. 1143 (1982). ° Fg., 47 U.S.C. § 533 (protecting incumbent cable operators from competition from telephone companies and others); §§ 543, 544 (generally prohibiting regulation of cable rates and services); § 546 (requiring renewal of cable franchises unless local communities undertake complex adminis- trative proceedings). 1 47 U.S.C. § 544(f) (App., A21). 247 U.S.C. § 544(f"2KA) (App., A21). See S. Rep. No. 67, 98th Cong., lst Sess. 11-12 (1983); H.R. Rep. No. 934, 98th Cong., 2d Sess. 70 (1984). ~] Despite its inclination to apply the Miami Herald stand- ard, the court rejected the Commission’s must-carry rules by purporting to measure them against the First Amend- ment standard set forth in United States v. O’Brien, 391 U.S. 367 (1968) (“O’Brien’’), for content-neutral regula- tions imposing incidental burdens on speech. The court held that O’Brien subjected the Commission to a “heavy burden of justification” for its predictive judgment that such rules were necessary to prevent a harmful diminution of local television service to the general public. 768 F.2d at 1462. The court then struck down the must-carry rules on the ground that the Commission had failed to prove that the rules reflected a ‘‘substantial or important gov- ernmental interest.’”’ Jd. at 1454-59. The Quincy court also held that the must-carry rules did not pass muster under the fourth requirement of the O’Brien test, 391 U.S. at 377, that “‘the incidental re- striction on alleged First Amendment freedoms is no greater than is essential to the furtherance of the [sub- stantial government] interest.’’ 768 F.2d at 1459-62. The court held that the rules were ‘grossly’ overinclusive’’ because they “‘indiscriminately sweep into their protective ambit each and every broadcaster, whether or not that protection in fact serves the asserted interest of assuring an adequate amount of local broadcasting in the commu- nity.”’ Id. at 1460, 1463. The Quincy court attached par- ticular importance to the view that “‘an inexpensive switch (the ‘A/B switch’) would enable a viewer to alternate be- tween cable and off-air VHF signals,’ thereby permitting ‘“‘a cable subscriber with little or no effort [to] view local broadcasts even without the benefit of the must-carry rules.”’ Id. at 1441, 1457 n.48. Several broadcast station licensees and associations petitioned this Court for a writ of certiorari to review the Quincy decision. Choosing not to file such a petition, the Commission—in response to the invitation of the court of appeals, to rulemaking petitions filed by commercial and public television interests, and to a request by several congressional leaders'*—instead instituted a proceeding in November, 1985 to consider adopting modified must-carry rules. Thereupon the Commission and the Solicitor General advised this Court that they viewed the new must-carry proceeding as obviating grant of certiorari in Quincy," and the Court later denied the outstanding certiorari petitions, 476 U.S. 1169 (1986). That denial came one week after the Court, in another case involving the issue of cable television’s First Amendment rights, declined to express any ‘‘detailed views on the proper resolution of the First Amendment question’”’ and remanded the case to the trial court for “‘a fuller development of the disputed issues in the case.” City of Los Angeles v. Preferred Communica- tions, Inc., 476 U.S. 488, 495 (1986). On August 7, 1986, the Commission adopted new, tem- porary and more narrowly drawn must-carry rules and “consumer education’’ requirements for larger cable sys- tems. (Jt. App., 32a-204a.) The new must-carry rules were largely modeled upon a “‘joint industry agreement’’ (see Jt. App., 48a) submitted by the principal associations of the cable and broadcast television industries. Both the in- dustry agreement and the Commission’s rules generally provided that: (1) the rules would apply only to cable sys- tems with 21 or more usable activated channels;'* (2) those cable systems would be required to devote no more than 25 percent of such usable channels to carriage of local television broadcast signals;'* (3) that in order to qualify '’ F.g., Letter from Senator Barry Goldwater, Chairman, Senate Tele- communications Subcommittee, to FCC Chairman Mark S. Fowler, dated Sept. 13, 1985. ‘* Memorandum for the Federal Respondents in National Association of Broadcasters v. Quincy Cable TV, Inc.,.No. 85-502, filed Nov. 21, 1985 (S. Ct.). ° 47 C.F.R. § 76.56(a) (Jt. App., 180a). ‘* Id. An exception to the 25 percent limit was that cable systems for carriage, a television station would have to be licensed to a community within 50 miles of the cable system, it would have to deliver a “high quality’ signal to the sys- tem,'® and, if it were a commercial station, it would have to demonstrate a significant level of viewership in non- cable households in the county served by the cable sys- tem.'® Even qualifying commercial stations would not be guaranteed carriage by the cable system, since the choice of commercial stations to be included in the 25%-of-chan- nel-capacity ‘‘quota’’ would remain in the sole discretion of the cable system operator.” Several elements of the Commission’s new rules de- parted from those proposed by the cable/broadcast industry agreement. The Commission adopted the rules only on a temporary basis and ordained an automatic “‘sunset’’ of all must-carry regulation after five years,”! although it re- solved to initiate a rulemaking prior to that time to con- sider situations where mandatory carriage rules might continue to be necessary. (Jt. App., 110a.) Further, car- riage of at least one or two public television stations was non-discretionary,”2 and new commercial stations were held exempt from the viewership standard for their first year of operation in order to permit them to establish an au- with between 21 and 27 usable activated channels were required to devote seven of those channels to must-carry signals. /d. 747 C.F.R. § 76.5(kk) (Jt. App., 178a). Further, a cable system was not required to carry any station if such carriage would subject the system to payment of distant signal copyright fees. See 47 C.F.R. § 76.56(cX2) (Jt.App., 181a). 47 C.F.R. § 76.56(cX3) (Jt. App., 181a). '° 47 C.F.R. § 76.5(d\1\ii) (Jt. App., 177a). 47 C.F.R. § 76.56(b) (Jt. App., 180a). 21 The expiration date of the must-carry rules was to be June 10, 1992. See Amendment of Part 76, FCC DA 87-1665, rel. Nov. 23, 1987 (Erratum). 247 C.F.R. § 76.56(aX1), (b) (Jt. App., 180a-81a). 10 dience base.” Finally, the Commission adopted “input se- lector switch’’ and ‘‘consumer education” provisions which required cable systems, inter alia, to inform their sub- scribers how to view broadcast signals that were not car- ried on the system by installing and using an “input selector” or “‘A/B”’ switch. Cable operators were required to offer to sell and/or install such a switch at the sub- scriber’s expense.” In response to the apparent holding of the court of appeals that broadcast localism had ceased to constitute a substantial governmental interest on the facts in Quincy, the Commission, while adhering to its former view that the must-carry regime “‘contributes toward [those] statu- tory goals” (Jt. App., 95a), justified the new, temporary rules as necessary to promote “the governmental interest in maximizing diversity of program choices and in fostering competition among program sources.” (Jt. App., 148a-49a.) The Commission found that the must-carry rules were nec- essary on an interim basis to “ensure that broadcasting has a fair opportunity to compete with cable.” (Jt. App., 147a.) At the same time, the Commission accepted the view that installing an inexpensive A/B switch would give cable subscribers full and direct access to over-the-air broadcast signals. The fact that cable subscribers do not believe they have that capability, the Commission held, is only a “‘mis- perception” of cable’s technological possibilities. (Jt. App., 105a.) The Commission recognized that it would take a considerable period of time to educate cable subscribers and to provide them a sufficient opportunity to acquire the A/B switch capability. (Jt. App., 109a.) Accordingly, the Commission ruled that the new must-carry rules would 247 C.F.R. § 76.5(d\1Mii) (Jt. App., 177a). «47 C.F.R. §§ 76.66, 76.70 (Jt. App., 185a-87a, 316a-19a & 320a- 21a). ‘ 1] be necessary only “until it can be assured that viewers have the knowledge and capability to receive off-the-air signals not carried on cable,”’ and that such assurance could be reasonably assumed in a period of five years. (Jt. App., 147a.) Although the principa! cable television industry associ- ations did not petition for review of the Commission’s new must-carry rules,” a group of cable television companies and a cable television investor filed such petitions on First Amendment grounds. One broadcaster appealed on the ground that the rules were too narrow. The court of appeals reviewed the Commission’s decision under 47 U.S.C. § 402(a) and 28 U.S.C. § 2344 in Century Communications Corporation v. FCC, 835 F.2d 292 (D.C. Cir. 1987) (“Century’’) (Jt. App., la-28a). Again purporting to use the O’Brien test, the court in Century rejected the Commission’s reasoning, found the evidence supporting the new must-carry rules to be unconvincing, and struck down those rules as violative of cable operators’ First Amend- ment rights.** The Century court seized upon the Com- mission’s new rationale for the must-carry regime and found that such a rationale, as it did the Commission's previous one of promoting broadcast localism, was not a substantial and important governmental interest. (Jt. App., 18a-26a.) It held that the substantial deference normally accorded to the Commission’s expert judgment has “little relevance when first amendment interests are even inci- dentally at stake’’ (Jt. App., 16a), and held that the Com- mission had not met its burden to adduce “substantial evidence” (Jt. App., 18a) to prove that the asserted gov- ernmental interest was substantial or that the new must- * The National Cable Television Association, et ai. (““NCTA"’), inter- vened but did not file a brief on the merits. * Upon a request by the Commission, the court issued an Order (Jt. App., 29a-3la) clarifying that its decision left the Commission's input selector switch and consumer education requirements in place. 12 carry rules were narrowly tailored to serve that interest. As in Quincy, the court rejected the Commission’s decision on the ground that “the need for a new saga of must- carry rules is more speculative than real.”’ (Jt. App., 18a.) Although the Century court sought to characterize its decision as a “narrow one”’ and disclaimed any interpre- tation of its decision as rendering must-carry rules per se unconstitutional, (Jt. App., 28a), the court’s opinion gave no reason for confidence that any future rulemaking effort by the Commission could ever meet with court approval. The Chairman of the Commission recently expressed his belief that the Commission had done all it could to craft constitutional must-carry rules, thus casting considerable doubt upon whether the Commission will undertake to de- vise new must-carry rules.” REASONS FOR GRANTING THE WRIT I. THE DECISION BELOW IS ESSENTIALLY IN CONFLICT WITH DECISIONS OF THIS COURT AND IS IN DIRECT CONFLICT WITH A DECISION OF THE EIGHTH CIR- CUIT The decision below virtually ignores and is in derogation of several decisions of this Court upholding the broad au- thority and duty of the Commission to regulate the car- riage of television broadcast signals by cable television systems, including mandatory carriage of local television signals. Moreover, the decision below is in direct conflict with a decision of another circuit and numerous decisions of this Court approving the Commission’s must-carry rules. The Quincy and Century decisions are squarely contrary to the decision in Black Hills, where the court expressly held that an earlier version of the must-carry rules was * See Communications Daily, Dec. 14, 1987 at 1; Broadcasting, Feb. 8, 1988 at 111. 13 permissible under the First Amendment. Its ruling was based on “the crucial consideratien . . . that [cable systems] use radio signals and that they have a unique impact upon, and relationship with, the television broadcast service.”’ 399 F.2d at 69. The rules upheid in Black Hills were, in essence, the same rules invalidated on First Amendment grounds in Quincy, and they were far more comprehensive and intrusive than the rules struck down in Century. It is undisputed that the court below used a more stringent First Amendment test than Black Hills, and this Court should grant certiorari to resolve the conflict between those decisions. Apart from its inconsistency with Black Hills, the de- cision below is essentially in conflict with the decisions of this Court, which have approved the must-carry rules in an uninterrupted line of decisions dating from 1968. In Southwestern, this Court upheld the Commission’s author- ity to regulate the carriage of television broadcast signals by cable systems. The Court stated “(t]he Commission has been charged with broad responsibilities for the orderly development of an appropriate system of local television broadcast- ing. The significance of its efforts can scarcely be exaggerated, for broadcasting is demonstrably a principal source of information and entertain- ment for a great part of the Nation’s population. The Commission has reasonably found that the successful performance of these duties demands prompt and efficacious regulation of [cable] sys- tems.” 392 U.S. at 177. That holding, while based on statutory rather than con- stitutional grounds, specifically recognized the substantial governmental interest promoted by the Commission’s reg- ulation of cable television. In United States v. Midwest Video Corp., 406 U.S. 649, 659 n.17. (1972) (plurality) (“Midwest’’), this Court went 14 further and recognized that Black Hills ‘‘correctly upheld’’ the must-carry rules. The Court stated that those rules were justified by the need ‘“ ‘to promote maximum tele- vision service to all people of the United States ..., both those who are cable viewers and those dependent on off- the-air service.’ ’’8 In Crisp, this Court again discussed the must-carry rules at length. 467 U.S. at 701-03, 705-06. The Court stated that ‘“‘[t]here can be little doubt that the comprehensive regulations developed over the past 20 years by the Com- mission to govern signal carriage by cable television sys- tems reflect an important and substantial federal interest.’’ Id. at 714. The Court emphasized that “ijn crafting this regulatory scheme, the Com- mission has attempted to strike a balance be- tween protecting non-cable households from loss of regular television broadcasting service due to competition from cable systems and ensuring that the substantial benefits provided by cable of in- creased and diversified programming are secured for the maximum number of viewers.” Id. The court of appeals discarded those rulings when it first invalidated the Commission’s must-carry rules in Quincy. Contrary to this Court’s consistent rulings, the court below found in Quincy that the rules did not reflect a substantial governmental interest. The court held that the Commission had “‘fall[en] far short’ of proving ‘‘the ** Id. at 666 (quoting CATV, 2 F.C.C.2d 725, 746 (1966)). As Chief Justice Burger wrote in his decisive concurring opinion, 406 U.S. at 676, ‘Those whe exploit the existing broadcast signals for private com- mercial surface transmission by CATV—to which they make no contribution—are not exactly strangers to the stream of broad- casting. 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.” 15 substantiality of the interest served by the rules.’ 768 F.2d at 1457. Indeed, the court of appeals went further to make a distinction—one never made by this Court for must-carry purposes—between Commission protection of local broad- casting and Commission protection of local broadcasters. Id. at 1460. Holding that the Commission’s only legitimate objective was the protection of local broadcasting, the Quincy court opined that it was not necessary for all local television signals to be carried by cable systems in order to serve “‘the asserted interest of assuring an adequate amount of local broadcasting in the community.” ZJd. at 1463. Thus, while paying lip service to Southwestern’s rec- ognition “‘that the elimination of local service is a ‘matter of real and immediate public concern,’ ’’*’ the court in Quincy eliminated 20 years of Commission must-carry reg- ulation which, as this Court repeatedly recognized, served that fundamental objective. The court in Century confirmed Quincy’s holding that the Commission’s must-carry rules did not promote a sub- stantial governmental interest. It embraced Quincy’s most extreme language, declaring unequivocally that must-carry regulation based on the need to ‘“‘safeguard the diverse programming generated by protecting local broadcasts ... was foreclosed by Quincy Cable TV... .” (Jt. App., 16a n.4.)°° The court went on to reject the Commission’s new ** Td. at 1454 n.43 (quoting Southwestern, 392 U.S. at 173 & n.38). * The Quincy court had said that it is “‘critical’’ that must-carry rules “seek to protect local broadcasting and not local broadcasters,’’ and that the purpose of the Communications Act is not to protect a licensee against competition but to protect the public. 768 F.2d at 1460 (em- phasis in original). Agreeing that the Act was not intended to protect a licensee against competition, broadcasters argued that mandatory car- riage of local stations is needed to assure competition among television broadcast stations and to assure competition between those broadcast stations and cable systems. The public interest in broadcasting, which exists concretely only in the form of broadcasters, is thus served by must-carry rules. 16 must-carry regime, which was substantially limited both in scope and duration, on the ground that the Commission, again, had ‘“‘not demonstrated that the new must-carry rules further a substantial governmental interest ... .”’ (Jt. App., 26a.) Thus, despite this Court’s articulation of the important and substantial federal interest in mandating carriage of local television signals in Southwestern, and its reaffir- mation only four years ago in Crisp that “‘[t]here can be little doubt’’ of the substantiality of that interest, 467 U.S. at 714, the court of appeals struck down two sets of must- carry rules on a finding that no such interest exists. This Court should grant certiorari to reassert and clarify the Commission’s now uncertain authority to adopt regulations governing cable television carriage of broadcast signals. Il. THE DECISION BELOW PRESENTS IMPORTANT CON- STITUTIONAL AND STATUTORY ISSUES WHICH THIS COURT SHOULD RESOLVE A. This Court Should Grant Certiorari To Determine Whether The Court Below Was Correct In Its Application Of The O’Brien Test And In Rejecting The Expert Judg- ments Of The FCC The court of appeals had doubts as to the propriety of using the O’Brien standard rather than the more elevated First Amendment test of Miami Herald. The result was that it applied a heightened form of O’Brien scrutiny that was close to being the functional equivalent of Miami Her- ald. Never has this Court subjected an “incidental” burden on speech to such intense scrutiny, or required it to have such an exacting empirical basis, as did the court of appeals in striking down the must-carry rules in Quincy and Cen- tury.) *\ Unlike newspapers, cable television has enjoyed no tradition of freedom from federal regulation. To the contrary, various aspects of cable operations have long been subject to regulation by the Commis- 17 When the Quincy court struck down the original, com- prehensive must-carry rules, it offered an olive branch by inviting the Commission to seek to ‘‘recraft the rules in a manner more sensitive to the First Amendment ... .” 768 F.2d at 1463. The court assured the Commission that if the agency ‘‘move[d] beyond its ‘more or less intuitive model’ ... we would be extremely hesitant to second-guess its expert judgment.” Jd. at 1459. In response, the Com- mission compiled a voluminous rulemaking record and, on the basis of record evidence, fashioned far narrower, less intrusive must-carry rules to satisfy the court’s First Amendment concerns. This evidence included showings that some cable systems had ceased to carry local stations and/ or demanded payments in return for carriage;** studies which showed that virtually no cable subscribers engaged in the practice or even possessed the capability of switch- ing between cable and off-the-air broadcast reception (Jt. App., 49a-66a); and the statistical fact that cable systems “affect almost one-half of the potential audience for broad- cast television service in communities nationwide’ (Jt. App., 100a). Based on this record, the Commission held sion, see 47 C.F.R. Part 76, and by Congress, see Cable Communications Policy Act of 1984, supra at 6. In the 1984 Cable Act, Congress mandated, inter alia, that cable systems set aside access channels for both public and commercial use, see 47 U.S.C. §§ 611-12, devoting a substantial amount of the legislative history of the Cable Act to ex- plaining its view that such requirements are consistent with and indeed promote the First Amendment. See H.R. Rep. No. 934, 98th Cong., 2d Sess. 31-36 (1984). — % Public television interests cited 185 cases of public stations being dropped by cable systems serving 3.2 million people. See Opposition of Corporation for Public Broadcasting, et al., filed Feb. 17, 1987 at 11 n.12. INTV’s Comments in the same proceeding cited numerous ex- amples of anticompetitive deletions of local signals by cable systems, including several where the stated purpose of the deletion was to rid the cable operator of a competitor for local advertising revenues or to persuade advertisers to patronize the cable system instead of a station that would not be seen by the system’s subscribers. See INTV Com- ments, filed Jan. 29, 1986 at 59-67. 18 that the new rules were ‘“‘necessary as interim measures to preserve the availability of the program choices to con- sumers, including broadcasters, and to ensure that broad- casting has a fair opportunity to compete with cable ....” (Jt. App., 147a.) It is undisputed that the new rules were tailored closely to the concerns expressed by the Quincy court. For ex- ample, while Quincy found “especially troubling’’ that the prior rules drew ‘“‘no distinction between cable systems that carry 100 signals and those that carry 12,’ the new rules provided that cable systems with limited channel ca- pacity (7.e., fewer than 21 channels) were free of any must- carry obligations. Moreover, the Commission generally did not require larger systems to devote more than 25 percent of their channels to local broadcast signals. (Jt. App., 180a.) Thus, the typical cable system of 54 channels would have absolute discretion over at least 40 of those channels. Another example is the Quincy court’s objection that the previous rules required cable systems to carry signals regardless of their importance to local broadcasting in the community and even when they showed duplicative pro- gramming. 768 F.2d at 1460. Under the Commission’s post- Quincy rules, cable systems were required to carry only stations with demonstrated popularity in the community, and they were not required to carry duplicative program- ming. See supra at 9. Thus, the Commission conscien- tiously tried to craft new rules in response to Quincy which preserved at least a substantial part of local broadcasting without the “‘undifferentiated sweep”’ of its previous rules, id. at 1461. The decision below shows the hollowness of the Quincy court’s purported guidance to the Commission. Where Quincy stated that the court of appeals would be ‘‘ex- tremely hesitant to second-guess [the Commission’s] expert 33768 F.2d at 1462 n.55; see also id. at 1451-52, 1460. 19 v judgment,”’ the court in Century noted peremptorily that deference to the agency’s expert judgment ‘“‘has little rel- evance when first amendment freedoms are even inciden- tally at stake.” (Jt. App., 16a.) In fact, the court completely disregarded the Commission’s expert judgment—and the record supporting it—in holding that must-carry rules are not needed to prevent cable systems from dropping local broadcast signals. The Commission found that while cable systems did not jettison all or even most of the broadcast signals they carried,‘‘there is 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.”’ (Jt. App., 104a.) In the Com- mission’s judgment, that conduct supported its decision to retain a limited version of the must-carry rules, particu- larly since the previous must-carry rules had been in abey- ance for only a short time, and since cable systems had been told to avoid the widespread dropping of signals while the Commission’s rulemaking was still in progress. Jd. In the guise of applying the O’Brien test, the court of appeals in Century rejected the Commission’s rationale on the ground that the existing evidence was insufficient to prove with certainty that cable systems would actually drop broadcast signals in the absence of must-carry rules. (Jt. App., 25a-26a.) The court seized upon the fact that many cable systems had not dropped local signals in the aftermath of Quincy and downplayed the extent to which that behavior was affected by the Commission’s pending rulemaking proceeding to consider new must-carry rules. The court particularly relied upon the positions of the Fed- eral Trade Commission and the Department of Justice that the must-carry rules were not necessary. Jd. The court below held the Commission to a “‘substantial evidence’ test even when making the threshold determination of whether 20 the governmental interest is important (Jt. App., 18a),** all the while giving no deference to the Commission's ex- pert evaluation of the record evidence. These crucial conclusions of the court of appeals are irreconcilable with the decisions of this Court applying the O’Brien test. In Clark v. Community for Creative Non- Violence, 468 U.S. 288, 298 (1984) (‘Clark’), this Court upheld the National Park Service’s prohibition on sleeping in public parks as a reasonable time, place or manner restriction. The Court noted that ““fijf the Government has a legitimate interest in ensuring that the National Parks are adequately protected, which we think it has, and if the parks would be more exposed to harm without the sleep- ing prohibition than with it, the ban is safe from invalidation under the First Amendment... .”’ Jd. at 297. The court below simply ignored that holding. As this Court has recognized on numerous occasions, local broadcasting clearly is “‘exposed’’ to more harm without must-carry rules than with them. Just as the Clark Court held that O’Brien does not “endow the judiciary with the competence to judge how much protection of park lands is wise and how that level of conservation is to be maintained,” id. at 299, neither does O’Brien permit courts to determine what measures are or are not necessary to preserve our system of local broadcasting in the United States. In United States v. Albertini, 472 U.S. 675 (1985) (‘‘Al- bertini’’), involving the constitutionality of military bar or- ders, this Court did not require proof that the harm to 4 The court’s use of the ‘‘substantial evidence’’ test was contrary to the well-established rule that informal rulemaking, such as the Com- mission’s must-carry rulemaking, is governed only by the more lenient arbitrary and capricious standard. See FCC v. National Citizens Com- mittee for Broadcasting, 436 U.S. 775, 803 (1978). 21 be prevented would necessarily occur without the chal- lenged regulation. The Court held that, ‘“{njothing in the First Amendment requires mil- itary commanders to wait until persons subject to a valid bar order have entered a military base to see if they will conduct themselves properly during an open house.” 472 U.S. at 675. Similarly, O’Brien does not require the Commission to wait until local broadcasting has actually suffered widespread injury, which the Century court required as proof of a substantial governmental interest, before acting to prevent the harm. Indeed, the original must-carry rules were prem- ised on the Commission’s judgment not to wait for the “bodies to pile up’’ before acting to address the problem.* The Clark and Albertini decisions are consistent with the general rule established by this Court (and applied in FCC cases) that the predictive judgments of an expert agency are entitled to substantial judicial deference, par- ticularly where ‘‘complete factual support in the record for the Commission’s judgment or prediction is not possible.’’** This Court has consistently held that the Commission may regulate cable television to the extent ‘‘reasonably ancillary to the effective performance of the Commission’s various responsibilities for the regulation of television broadcast- ing.’’*? Congress created the Commission to be the “‘single Government agency with unified jurisdiction and regula- tory power over all forms of electrical communication,” and it ‘“‘therefore gave the Commission a comprehensive * CATV First Report and Order, 38 F.C.C. at 701. See supra note 32. * FCC v. National Citizens Committee for Broadcasting, 436 U.S. 775, 814 (1978); see also FCC v. WNCN Listeners Guild, 450 U.S. 582, 594-96 (1981). 7 Southwestern, 392 U.S. at 178; Midwest, 406 U.S. at 649. 22 mandate with not niggardly but expansive powers.’’** More specifically, Congress expressly retained the FCC must- earry rules when it prohibited other forms of regulation in the 1984 Cable Act. See supra at 6. With particular reference to the must-carry rules, this Court in Southwestern observed that the Commission “could not predict with certainty the consequences of un- regulated CATV,” but nevertheless approved the Com- mission’s judgment that ‘“‘its statutory responsibilities demand that it ‘plan in advance of foreseeable events, instead of waiting to react to them.’ ’’* The Commission has never before been held to the “heavy burden’’*’ of affirmatively proving what will happen to the nation’s sys- tem of free, locally oriented television in the future if all regulation of television signal carriage by cable systems were removed, nor has the Court found that the Com- mission’s judgments could be undercut by less expert agen- cies. The burden placed on the Commission by the court of appeals under the O’Brien test—to prove positively that widespread serious injury to free local broadcasting will occur to a certainty if the regulatory checks in place to prevent such injury are removed—is an impossible one to -meet. Indeed, the Chairman of the Commission recently interpreted Quincy and Century to require the Commission to produce evidence showing that must-carry rules are nec- essary to prevent substantial harm to “the industry gen- erally’ before the Commission may regulate cable signal carriage. See supra note 27. Given the court’s unequi- vocal rejection of the sharply-limited interim rules in Cen- % Southwestern, 392 U.S. at 168, 173; Midwest, 406 U.S. at 660, 661 (footnotes and citations omitted). = %* 392 U.S. at 176-77 (quoting CATV First Report and Order, 38 F.C.C. at 701). * Quincy, 768 F.2d at 1462. 23 tury, its application of the O’Brien test is not just a hurdle to be overcome, it is a stone wall. B. The Quincy And Century Decisions Have Induced The Commission To Abandon The Public Interest Rationale For The Must-Carry Rules Which Has Been Approved By This Court In Several Decisions It is apparent that Quincy misled the Commission into altering its rationale for must-carry rules from one which this Court had consistently approved to the weaker, sub- stitute rationale that was rejected by the court below. In evident response to Quincy, the Commission’s rationale for more limited post-Quincy rules did not rely on the sta- tutory provisions mandating that the Commission foster and maximize locally oriented, free broadcast television services. Instead, while the Commission briefly alluded to Sections 1, 303 and 307(b) of the Communications Act and stated that its new regulatory scheme “contributes to [these] statutory goals’ (Jt. App., 95a), the agency stated that its ‘‘assessment of the federal interest ... is different from that relied upon by the Commission, i.e. Section 307(b), in initially adopting the former must carry rules.”’ (Jt. App., 96a-97a.)# Having abandoned the bedrock rationale for must-carry rules repeatedly endorsed by this Court, the Commission was left to justify its revised rules on the amorphous sub- stitute rationale of ‘‘the governmental interest in maxi- mizing diversity of program choices and in fostering competition among program sources.”’ (Jt. App., 148a-49a.) «| Thereafter, the Chairman of the Commission wrote to congressional committee chairmen: ‘‘With respect to the Commission’s ‘failure’ to rely upon the concepts of localism and Section 307(b), I must point out that these two theories did, in fact, form the basis of the Commission's original must-carry rules. But [Quincy] makes clear that the desire to protect local broadcasting alone does not justify must-carry’’ (first em- phasis in original; second emphasis supplied). Letter From FCC Chair- man Dennis Patrick to the Honorable John D. Dingell, Chairman, House Committee on Energy and Commerce, dated Feb. 23, 1988. 24 The Commission’s long-term vehicle for achieving such di- versity and competition after a five-year period of limited must-carry rules was the A/B switch which the Commission had only two years previously and for 20 years prior to Quincy steadfastly adjudged inadequate to assure cable subscribers effective access to local broadcast signals. However, the A/B switch had been elevated as a solution by the Quincy court, which based its invalidation of the prior must-carry rules in substantial part on the supposed availability of such a simple and effective switch.* In response, the Commission not only reversed its long- held view of A/B switches, but made the A/B switch the cornerstone of its new regulatory program. In so doing, the Commission frankly acknowledged the influence of Quincy (Jt. App., 127a). On reconsideration, the Commis- sion held fast to its new-found faith in A/B switches to equalize competition between cable and local broadcasting. The Commission disregarded the fact that the cable in- dustry’s principal trade associations and numerous cable system operators, which previously had championed the switches as obviating the need for must-carry rules, now shunned this solution, joined broadcasters in preferring must-carry rules to A/B switches, and filed voluminous studies which persuasively demonstrated numerous serious deficiencies in the switch. (Jt. App., 21la-15a.)* Unfazed 2 See, e.g., Cable Television Mandatory Signal Carriage Rules, 55 Rad. Reg. 2d (P&F) 1365, 1367 (1984) (“It is contended that the existence of an A/B switch would be a satisfactory substitute for the mandatory carriage rules .... Our extensive experience ... suggests otherwise; even relatively minor receiver/tuner obstacles to reception may create significant impediments to viewing of stations and thus have substantial impact on their economic viability’); CATV First Report and Order, 38 F.C.C. at 702 (“the sheer inconvenience of switching is an obvious deterrent to its use by the subscriber’). * See 768 F.2d at 1441, 1452-53, 1457 n.48. “4 See Joint Petition for Reconsideration of NCTA, Community An- tenna Television Association and National Association of Broadcasters eel 25 by the damning testimony concerning the inadequacy of A/B switches from both sides of the controversy,* the Commission noted again that the switch “was part of the Quincy court’s findings,’”’ stated that the A/B switch prob- lems cited by the industries were ‘“‘much overstated,’’ and affirmed its reliance on switches alone to assure even- handed competition between broadcasting and cable after the sunset of the limited remaining must-carry require- ments in 1992. (Jt. App., 233a-37a.) While the Commission’s conversion regarding the A/B switch was clearly designed to satisfy Quincy, the attempt backfired. The Century court accepted uncritically the Commission’s new faith in the switch and held that the Commission was unjustified in reinstituting even a limited and temporary must-carry rule. The court overlooked or disregarded the fact that the cable industry, which had convinced the Quincy court that the switch removed the need for must-carry regulation, had since repudiated the switch and presented evidence of its patent defects and inadequacies. These matters were brought to the court’s attention most forcefully in the briefs of intervenors.* (“NAB”) (with attached NCTA Engineering Committee Report), filed Dec. 17, 1986. The NCTA report found (at 20) that the switches are notoriously prone to mechanical failure, corrode rapidly, yield a seri- ously degraded signal quality and noticeable interference due to inad- equate “isolation” (i.e., separation of the cable signal input for the off- air signal input), and concluded that dependence on switches are “‘cer- tain to lead to frustration, confusion and dissatisfaction on the part of viewers.”” See also Petition for Reconsideration of Adelphia Commu- nications, et al., filed Jan. 12, 1987 (discussed in Jt. App., 215a-17a); Petition for Reconsideration of Gill Industries, Inc., filed Jan. 12, 1987. * See also, e.g., Comments of NAB, filed Jan. 29, 1986; Comments of INTV, filed Jan. 29, 1986; Comments of Television Operators Caucus, filed Jan. 29, 1986. “ See Brief and Reply Brief of Intervenor Office of Communication of the United Church of Christ, No. 86-1683, filed July 20,1987 and Sept. 11, 1987, respectively, (D.C. Cir.). See also Brief of NAB and INTV, No. 86-1683, filed Aug. 25, 1987 (D.C. Cir.) at 2 n.2, 5 & ni, 24 & n.19. 26 The inadequacy of A/B switches, and the judicial pres- sure that led the Commission to rely upon them, are es- pecially crucial because cable operators are intra-modal monopolies in almost every community in the nation. As such, these monopoly cable operators are ‘‘gatekeepers’’ of over-the-air television signals for their subscribers. See supra note 3. Typically the cable installer or the subscriber removes any external antenna for off-air broadcast recep- tion when the cable is connected to the subscriber's tel- evision receiver. Consequently, unless (1) cable subscribers maintain and reconnect their VHF and UHF off-air an- tennae or purchase new antennae, (2) they also purchase A/B switches to alternate between cable and antenna-as- sisted off-air reception, and (3) the switches actually work reliably, efficiently and without inconvenience to the sub- scriber to restore unimpeded broadcast station reception, subscribers will have inadequate access to local broadcast television news, information and entertainment program- ming which the gatekeeper cable operator, acting in its own economic self-interest, chooses not to carry. Indeed, many consumers who subscribe to cable in order to gain satisfactory reception of local signals will not be able to achieve such reception even with an effective switch.” As a practical matter, absence of carriage of a television station on a cable system is tantamount to non-reception of that station by subscribers of the cable system. And with cable television now serving more than half of the nation’s total television households,* it is clear that such non-carriage would be devastating and often lethal to a local advertiser supported station’s audience and advertis- ing revenue base, or to a local educational station’s au- dience and contributor base. * See supra at 17; see also Affidavit of Muriel Henle Reis, submitted uith Response to Petition for Rehearing, filed by INTV and NAB on March 3, 1988 in Nos. 86-1683, et al. (D.C. Cir.). “See Communications Daily, Nov. 25, 1987 at 7. 27 It is equally clear that cable operators have direct eco- nomic incentives to favor carriage of specialized cable pro- gram services, on which they sell local advertising spots,* and disfavor carriage of local free television stations (or relegate their carriage to channel positions distant from those of other popular program services), inasmuch as the local stations are seen as competitors for local advertising dollars.” Importantly, many of the nation’s largest cable cong!omerates own all or part of these cable services, and so have a natural and overriding proprietary interest in maximizing viewership of these services as against local broadcast services.” The situation today is one of total regulatory impotence, resulting from a bizarre case of the court of appeals and the Commission misdirecting each other—the court by in- dicating in Quincy (and declaring outright in Century) that must-carry rules based on the statutory goal of fostering and maximizing free, local broadcasting service are ‘“‘fore- ciosed”’ to the agency (Jt. App., 16a n.4); the Commission ” See, e.g., New York Times, Feb. 17, 1988 at D18 (describing in- creases in cable advertising, local commercial insertions in program services). ” See discussion supra at note 32. As one cable operator explained his deletion of a local station: ‘Of course, as an advertising medium, we are competitors with WTGS. And as a business, it doesn’t make sense to subsidize a competitor if you don’t have to.” INTV Comments at 60, quoting Island Packet (Hilton Head, S.C.), Aug. 30, 1985, p. 2- C. See also, e.g., Multichannel News, Feb. 17, 1986 at 1 (“once cable penetration exceeds 60 percent in a market, then the cable system can compete on an equal footing with local independent stations, ... ‘with no FCC license to worry about, no transmitter ... without all those things that go with an FCC license.’ "’); Multichannel News, April 14, 1926 at 43 (cable operator-owned channel ‘‘could compete for ad dollars very effectively with local broadcast stations, particularly if those sta- tions are denied carriage on the cable system or are relegated to less attractive channel positions at the high end of the dial’’). " See Broadcasting, Feb 29, 1988 at 41. See also Multichannel News, Oct. 20, 1986 at 28A; Communications Daily, Nov. 10, 1986 at 3. 28 by responding to its constricted options with a tortured rationale built around the Quincy-approved A/B_ switch, which, according to all but the agency and the switch man- ufacturers,” is woefully unsuited to its assigned task; and the court again, by using the Commission’s forced conver- sion to the dubious virtues of the A/B switch to invalidate the remaining must-carry element of the agency’s regulatory policy. Now, even as the Commission continues to grapple with the increasingly evident fact that the A/B switch is wholly inadequate as a substitute for signal carriage re- quirements,* the agency is reluctant to try yet again to fashion a rule that will satisfy the prohibitive standards of the court of appeals. Accordingly, this case presents an exceptionally important question of federal statutory and constitutional law which should be answered by this Court, lest the Commission ne- glect its congressionally mandated responsibility to preserve and foster the growth of free broadcast service and to as- sure a fair distribution of broadcast stations to communities across the nation. C. The Court Below Ignored the Interrelationship Between Commission Signal Carriage Rules and the Federal Copy- night Scheme for Carriage of Such Signals The court’s invalidation of the must-carry regulations in- volves another statutory conflict. The operation of those rules was an integral part of the predicate for the com- pulsory copyright license that Congress has bestowed on cable television retransmissions of television broadcast sig- “See Jt. App., 230a-3la, 235a-36a (citing comments of A/B switch manufacturer Pico Macom, Inc., filed Jan. 21, 1987). “The increasing uncertainty over the technical viability of A/B switches led the Commission to stay implementation of its previous adoption of technical standards for such switches. See Amendment of Part 15 of the Commission’s Rules, FCC 88-27, Gen. Docket No. 87- 107, rel. Jan. 28, 1988 (Order Granting Stay Request). 29 nals in the Copyright Revision Act of 1976.% Under Section 111 of the 1976 Act, 17 U.S.C. § 111 (App. A2-19), cable systems are entitled to retransmit an unlimited number of local television broadcast signals at no cost, while paying low, statutorily prescribed royalties into the U.S. Copyright Office for the right to carry distant television signals. Thus, cable operators are totally insulated from marketplace ne- gotiation, with an absolute, government-guaranteed right to exhibit the entire inventory of programs shown on television broadcast stations anywhere. As early as 1970, the Commission recommended that Con- gress “adopt a provision that a CATV system shall have a compulsory license for such signals as the Commission, by rule or order, may authorize the system to carry.” In late 1971, the broadcasting, cable television and program supply industries submitted to the Commission their negotiated agreement to an overall regulatory scheme for cable that included must-carry rules and support for cable copyright legislation establishing a compulsory license for cable system retransmissions of broadcast signals. The importance of the latter element and its interrelationship with the Commis- sion’s regulatory program for cable was emphasized by the Commission in incorporating the agreement without change in its comprehensive cable television regulations issued in 1972.% Now, post-Century, cable systems enjoy the enormous government-bestowed benefit of carrying unlimited amounts 54 Pub. Law No. 94-553, 90 Stat. 2541. % Letter from FCC Chairman Dean Burch to Senators Warren G. Magnuson, Chairman, Senate Commerce Committee, and John O.Pastore, Chairman, Senate Subcommittee on Communications, dated March 11, 1970. % See Cable Television Report and Order, 36 F.C.C.2d 143, 166 (1972), aff'd sub nom. ACLU v. FCC, 523 F.2d 1344 (9th Cir. 1975). See also id. at 147, 165-66, 260, 284-286. 30 of broadcast programming without the intended correspond- ing obligation to carry the locally-oriented free programming exhibited by local stations.*’ Absent must-carry rules, cable systems can effectively cut off the audience of some local television stations by carrying only those stations which they believe their subscribers will insist upon as a condition of maintaining their subscriptions, while refusing to carry those commercial and public television stations whose absence from the cable system will not drive subscribers to cancel their subscriptions. Absent review by this Court, the Commis- sion’s statutory mandate to determine the proper allocation of television broadcast signals in local communities nation- wide thus will pass from the agency to cable operators act- ing as gatekeepers of all television programming entering cabled homes. CONCLUSION INTV respectfully submits that this Court should grant a writ of certiorari to resolve the decisional conflicts and the important questions of federal constitutional and sta- tutory law set forth herein. * The Quincy decision summarily rejected the notion that must-carry regulation was integrally related to cable’s compulsory license to re- transmit local station signals without tompensation to the stations which must themselves negotiate and pay for their programming in the mar- ketplace. Instead, the court found that the must-carry rules were merely “a convenient reference point [in the Copyright Act] for determining where a local signal ends and a distant signal begins.” 768 F.2d at 1454 n.42. In light of the foregoing history, the court was clearly wrong. Respectfully submitted, J. LAURENT SCHARFF* JAMES M. SMITH ROBERT J. AAMOTH PIERSON BALL & Dowp 1200 18th Street, N.W. Washington, D.C. 20036 (202) 331-8566 Attorneys for Petitioner March 10, 1988 *Counsel of Record ‘ - ‘ Al APPENDIX The First Amendment to the Constitution of the United States: Congress shall make no law respecting an estab- lishment of religion, or prohibiting the free ex- ercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Gov- ernment for a redress of grievances. The pertinent provisions of the Communications Act of 1934, as amended, are as follows: Sec. 1. [47 U.S.C. § 151] For the purpose of regulating interstate and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States a rapid, efficient, Nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of the national defense, for the purpose of promoting safety of life and property through the use of wire and radio com- munication, and for the purpose of securing a more effective execution of this policy by cen- tralizing authority heretofore granted by law to several agencies and by granting additional au- thority with respect to interstate and foreign commerce in wire and radio communication, there is hereby created a commission to be known as the ‘‘Federal Communications Commission,”’ which shall be constituted as hereinafter pro- vided, and which shall execute and enforce the provisions of this Act. See. 303(g) [47 U.S.C. § 303(g)] [The FCC shall have authority to] |s]tudy new uses for radio, provide for experimental uses of frequencies, and A2 generally encourage the larger and more effective use of radio in the public interest; Sec. 303(h) [47 U.S.C. § 303(h)] [The FCC shail] {hjave authority to establish areas or zones to be served by any station; Sec. 303(s) [47 U.S.C. § 303(s)] [The FCC shall] {hjave authority to require that apparatus de- signed to receive television pictures broadcast si- multaneously with sound be capable of adequately receiving all frequencies allocated by the Com- mission to television broadcasting when such ap- paratus is shipped in interstate commerce, or is imported from any foreign country into the United States, for sale or resale to the public. Sec. 307(b) [47 U.S.C. § 307(b)] In considering applications for licenses, and modifications and renewals thereof, when and 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 communities as to provide a fair, ef- ficient, and equitable distribution of radio service to each of the same. Section 111 of the Copyright Revision Act of 1976 (17 U.S.C. § 111) provides as follows: (a) Certain Secondary Transmissions Ex- empted.—The secondary transmission of a pri- mary transmission embodying a performance or display of a work is not an infringement of co- pyright if— (1) the secondary transmission is not made by a cable system, and consists entirely of the relaying, by the management of a hotel, apart- ment house, or similar establishment, of signals transmitted by a broadcast station licensed by A3 the Federal Communications Commission, within the local service area of such station, to the private lodgings of guests or residents of such establishment, and no direct charge is made to see or hear the secondary transmis- sion; or (2) The secondary transmission is ~made solely for the purpose and under the conditions specified by clause (2) of section 110; or (3) The secondary transmission is made by any carrier who has no direct or indirect con- trol over the content or selection of the pri- mary transmission or over the particular recipients of the secondary transmission, and whose activities with respect to the secondary transmission consist solely of providing wires, cables, or other communications channels for the use of others: Provided, That the provisions of this clause extend only to the activities of said carrier with respect to secondary trans- missions and do-not exempt from liability the activities of others with respect to their own primary or secondary transmissions; or (4) the secondary transmission is not made by a cable system but is made by a govern- mental body, or other nonprofit organization, without any purpose of direct or indirect com- mercial advantage, and without charge to the recipients of the secondary transmission other than assessments necessary to defray the ac- tual and reasonable costs of maintaining and operating the secondary transmission service. (b) Secondary Transmission of Primary Trans- mission to Controlled Group.— Notwithstanding the provisions of subsections (a) and (c), the sec- ondary transmission to the public of a primary A4 transmission embodying a performance or display of a work is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506 and 509, if the primary transmission is not made for reception by the public at large but is con- trolled and limited to reception by particular members of the public: Provided, however, That such secondary transmission is not actionable as an act of infringement if— (1) the primary transmission is made by a broadeast station licensed by the Federal Com- munications Commission; and (2) the carriage of the signals comprising the secondary transmission is required under the rules, regulations, or authorizations of the Fed- eral Communications Commission; and (5) the signal of the primary transmitter is not altered or changed in any way by the sec- ondary transmitter. (c) Secondary Transmissions by Cable Sys- tems. — (1) Subject to the provisions of clauses (2), (3), and (4) of this subsection, secondary trans- missions to the public by a cable system of a primary transmission made by a broadcast sta- tion licensed by the Federal Communications Commission or by an appropriate governmental authority of Canada or Mexico and embodying a performance or display of a work shall be subject to compulsory licensing upon compli- ance with the requirements of subsection (d) where the carriage of the signals comprising the secondary transmission is permissible un- Ad der the rules, regulations, or authorizations of the Federal Communications Commission. (2) Notwithstanding the provisions of clause (1) of this subsection, the willful or repeated secondary transmission to the public by a cable system of a primary transmission made by a broadcast station licensed by the Federal Com- munications Commission or by an appropriate governmental authority of Canada or Mexico and embodying a performance or display of a work is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506 and 509, in the following cases: (A) where the carriage of the signals com- prising the secondary transmission is- not permissible under the rules, regulations, or authorizations of the Federal Communica- tions Commission; or (B) where the cable system has not re- corded the notice specified by subsection (d) and deposited the statement of account and royalty fee required by subsection (d). (3) Notwithstanding the provisions of clause (1) of this subsection and subject to the pro- visions of subsection (e) of this section, the secondary transmission to the public by a cable system of a primary transmission made by a broadcast station licensed by the Federal Com- munications Commission or by an appropriate governmental authority of Canada or Mexico and embodying a performance or display of a work is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506 and sections 509 and 510, if the content of the Ab particular program in which the performance or display is embodied, or any commercial ad- vertising or station announcements transmitted by the primary transmitter during, or imme- diately before or after, the transmission of such program, is in any way willfully altered by the cable system through changes, deletions, or ad- ditions, except for the alteration, deletion, or substitution of commercial advertisements per- formed by those engaged in television com- mercial advertising market research: Provided, That the research company has obtained the prior consent of the advertiser who has pur- chased the original commercial advertisement, the television station broadcasting that com- mercial advertisement, and the cable system performing the secondary transmissions: And provided further, That such commercial alter- ation, deletion, or substitution is not performed for the purpose of deriving income from the sale of that commercial time. (4) Notwithstanding the provisions of clause (1) of this subsection, the secondary transmis- sion to the public by a cable system of a pri- mary transmission made by a broadcast station licensed by an appropriate governmental au- thority of Canada or Mexico and embodying a performance or display of a work is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506 and section 509, if (A) with respect to Canadian signals, the community of the cable system is located more than 150 miles from the United States-Cana- dian border and is also located south of the forty-second parallel of latitude, or (B) with respect to Mexican signals, the secondary AZ transmission is made by a cable system which received the primary transmission by means other than direct interception of a free space radio wave emitted by such broadcast televi- sion station, unless prior to April 15, 1976, such cable system was actually carrying, or was specifically authorized to carry, the signal of such foreign station on the system pursuant to the rules, regulations, or authorizations of the Federal Communications Commission. (d) Compulsory License for Secondary Transmis- sions by Cable Systems.— (1) A cable system whose secondary trans- missions have been subject to compulsory li- censing under subsection (c) shall, on a semiannual basis, deposit with the Register of Copyrights, in accordance with requirements that the Register shall, after consultation with the Copyright Royalty Tribunal (if and when the Tribunal has been constituted), prescribe by regulation— (A) a statement of account, covering the six months next preceding, specifying the number of channels on which the cable sys- tem made secondary transmissions to its subscribers, the names and locations of all primary transmitters whose transmissions were further transmitted by the cable sys- tem, the total number of subscribers, the gross amounts paid to the cable system for the basic service of providing secondary transmissions of primary broadcast trans- mitters, and such other data as the Register of Copyrights may, after consultation with the Copyright Royalty Tribunal (if and when the Tribunal has been constituted), from time A& to time prescribe by regulation. Such state- ment shall also include a special statement of account covering any nonnetwork televi- sion programming that was carried by the cable system in whole or in part beyond the local service area of the primary transmitter, under rules, regulations, or authorizations of the Federal Communications Commission permitting the substitution or addition of signals under certain circumstances, to- gether with logs showing the times, dates, stations, and programs involved in such sub- stituted or added carriage; and (B) except in the case of a cable system whose royalty is specified in subclause (C) or (D), a total royalty fee for the period covered by the statement, computed on the basis of specified percentages of the gross receipts from subscribers to the cable service during said period for the basic service of providing secondary transmissions of pri- mary broadcast transmitters, as follows: (i) 0.675 of 1 per centrum of such gross receipts for the privilege of further trans- mitting any nonnetwork programming of a primary transmitter in whole or in part beyond the local service area of such pri- mary transmitter, such amount to be ap- plied against the fee, if any, payable pursuant to paragraphs (ii) through (iv); (ii) 0.675 of 1 per centrum of such gross receipts for the first distant signal equiv- alent; (iii) 0.425 of 1 per centrum of such gross receipts for each of the second, AY third, and fourth distant signal equiva- lents; (iv) 0.2 of 1 per centrum of such gross receipts for the fifth distant signal equiv- alent and each additional distant signal equivalent thereafter; and in computing the amounts payable under paragraph (ii) through (iv), above, any frac- tion of a distant signal equivalent shall be computed at its fractional value and, in the ease of any cable system located partly within and partly without the local service area of a primary transmitter, gross receipts shali be limited to those gross receipts de- rived from subscribers located without the local service area of such primary transmit- ter; and (C) if the actual gross receipts paid by subscribers to a cable system for the period covered by the statement for the basic ser- vice of providing secondary transmissions of primary broadcast transmitters total $80,000 or less, gross receipts of the cable system for the purpose of this subclause shall be computed by subtracting from such actual gross receipts the amount by which $80,000 exceeds such actual gross receipts, except that in no case shall a cable system’s gross receipts be reduced to less than $3,000. The royalty fee payable under this subclause shall be 0.5 of 1 per centrum, regardless of the number of distant signal equivalents, if any; and (D) if the actual gross receipts paid by subscribers to a cable system for the period covered by the statement, for the basic ser- Al0 vice of providing secondary transmissions of primary broadcast transmitters, are more than $80,000 but less than $160,000, the roy- alty fee payable under this subclause shall be (i) 0.6 of 1 per centrum of any gross receipts up to $80,000; and (ii) 1 per centrum of any gross receipts in excess of $80,000 but less than $160,000, regardless of the number of distant signal equivalents, if any. (2) The Register of copyrights shall receive all fees deposited under this section and, after deducting the reasonable costs incurred by the Copyright Office under this section, shall de- posit the balance in the Treasury of the United States, in such manner as the Secretary of the Treasury directs. All funds held by the Sec- retary of the Treasury shall be invested in in- terest-bearing United States securities for later distribution with interest by the Copyright Royalty Tribunal as provided by this title. The Register shall submit to the Copyright Royalty Tribunal, on a semiannual basis, a compilation of all statements of account covering the rel- evant six-month period provided by paragraph (1) of this subsection. (3) The royalty fees thus deposited shall, in accordance with the procedures provided by clause (5), be distributed to those among the following copyright owners who claim that their works were the subject of secondary trans- missions by cable systems during the relevant semiannual period: (A) any such owner whose work was in- cluded in a secondary transmission made by a cable system of a nonnetwork television All program in whole or in part beyond the local service area of the primary transmitter; and (B) any such owner whose work was in- cluded in a secondary transmission identified in a special statement of account deposited under clause (2)(a); and (C) any such owner whose work was in- cluded in nonnetwork programing consisting exclusively of aural signals carried by a cable system in whole or in part beyond the local service area of the primary transmitter of such programs. (4) The royalty fees thus deposited shall be distributed in accordance with the following procedures: (A) During the month of July in each year, every person claiming to be entitled to com- pulsory license fees for secondary transmis- sions shall file a claim with the Copyright Royalty Tribunal, in accordance with re- quirements that the Tribunal shall prescribe by regulation. Notwithstanding any provi- sions of the antitrust laws, for purposes of this clause any claimants may agree among themselves as to the proportionate division of compulsory licensing fees among them, may lump their claims together and file them jointly or as a single claim, or may designate a common agent to receive payment on their behalf. (B) After the first day of August of each year, the Copyright Royaity Tribunal shall determine whether there exists a contro- versy concerning the distribution of royalty fees. If the Tribunal determines that no such Al2 controversy exists, it shall, after deducting its reasonable administrative costs under this section, distribute such fees to the copyright owners entitled, or to their designated agents. If the Tribunal finds the existence of a controversy, it shall, pursuant to chap- ter 8 of this title, conduct a proceeding to determine the distribution of royalty fees. (C) During the pendency of any proceed- ing under this subsection, the Copyright Royalty Tribunal shall withhold from distri- bution an amount sufficient to satisfy all claims with respect to which a controversy exists, but shall have discretion to proceed to distribute any amounts that are not in controversy. (e) Nonsimultaneous Secondary Transmissions by Cable Systems. — (1) Notwithstanding those provisions of the second paragraph of subsection (f) relating to nonsimultaneous secondary transmissions by a cable system, any such transmissions are ac- tionable as an act of infringement under sec- tion 501, and are fully subject to the remedies provided by sections 502 through 506 and sec- tions 509 and 510, unless— (A) the program on the videotape is trans- mitted no more than one time to the cable system's subscribers; and (B) the copyrighted program, episode, or motion picture videotape, including The com- mercials contained within such program, ep- isode, or picture, is transmitted without deletion or editing; and Als (C) an owner or officer of the cable sys- tem (i) prevents the duplication of the vi- deotape while in the possession of the system, (ii) prevents unauthorized duplication while in the possession of the facility making the videotape for the system if the system owns or controls the facility, or takes rea- sonable precautions to prevent such dupli- cation if it does not own or control the facility, (iii) takes adequate precautions to prevent duplication while the tape is being transported, and (iv) subject to clause (2), erases or destroys, or causes the erasure or destruction of, the videotape; and (D) within forty-five days after the end of each calendar quarter, an owner or officer of the cable system executes an affidavit at- testing (i) to the steps and precautions taken to prevent duplication of the videotape, and (ii) subject to clause (2), to the erasure or destruction of all videotapes made or used during such quarter; and (E) such owner or officer places or causes each such affidavit, and affidavits received pursuant to clause (2)(C), to be placed in a file, open to public inspection, at such sys- tem’s main office in the community where the transmission is made or_in the nearest community where such system maintains an office; and (F) the nonsimultaneous transmission is one that the cable system would be author- ized to transmit under the rules, regulations, and authorizations of the Federal Commu- nications Commission in effect at the time of the nonsimultaneous transmission if the Al4 transmission had been made simultaneously, except that this subclause shall not apply to inadvertent or accidental transmissions. (2) If a cable system transfers to any person a videotape of a program nonsimultaneously transmitted by it, such transfer is actionable as an act of infringement under section 501, and is fully subject to the remedies provided by sections 502 through 506 and 509, except that, pursuant to a written, nonprofit contract providing for the equitable sharing of the costs of such videotape and its transfer, a videotape nonsimultaneously transmitted by it, in accord- ance with clause (1), may be transferred by one cable system in Alaska to another system in Alaska, by one cable system in Hawaii per- mitted to make such nonsimultaneous trans- missions to another such cable system in Hawaii, or by one cable system in Guam, the Northern Mariana Islands, or the Trust Ter- ritory of the Pacific Islands, to another cable system in any of those three territories, if— (A) each such contract is available for public inspection in the offices of the cable systems involved, and a copy of such con- tract is filed, within thirty days after such contract is entered into, with the Copyright Office (which Office shall make each such contract available for public inspection); and (B) the cable system to which the video- tape is transferred complies with clause (1A), (B), (C)i), (ii), and (iv), and (D) through (F); and (C) such” system provides a copy of the affidavit required to be made in accordance with clause (1)(D) to each cable system mak- Ald ing a previous nonsimultaneous transmission of the same videotape. (3) This subsection shall not be construed to supersede the exclusivity protection provisions of any existing agreement, or any such agree- ment hereafter entered into, between a cable system and a television broadcast station in the area in which the cable system is located, or a network with which such station is affiliated. (4) As used in this subsection, the term “‘vi- deotape’’, and each of its variant forms, means the reproduction of the images and sounds of a program or programs broadcast by a tele- vision broadcast station licensed by the Federal Communications Commission, regardless of the nature of the material objects, such as tapes or films, in which the reproduction is embod- ied. (f) Definitions.—As used in this section, the following terms and their variant forms mean the following: A “primary transmission” is a transmission made to the public by the transmitting facility whose signals are being received and further transmitted by the secondary transmission ser- vice, regardless of where or when the per- formance or display was first transmitted. In the case of a low power television station, as defined by the rules and regulations of the Federal Communications Commission, the “‘lo- cal service area of a primary transmitter’ com- prises the area within 35 miles of the transmitter site, except that in the case of such a station located in a standard metropolitan statistical area which has one of the 50 largest populations of all standard metropolitan statis- Al6o tical areas (based on the 1980 decennial census of population taken by the Secretary of Com- merce), the number of miles shall be 2 miles. A ‘secondary transmission’”’ is the further transmitting of a primary transmission simul- taneously with the primary transmission, or nonsimultaneously with the primary transmis- sion if by a “‘cable system’’ not located in whole or in part within the boundary of the forty- eight contiguous States, Hawaii, or Puerto Rico: Provided, however, That a nonsimulta- neous further transmission by a cable system located in Hawaii of a primary transmission shall be deemed to be a secondary transmission if the carriage of the television broadcast sig- nal comprising such further transmission is permissible under the rules, regulations, or au- thorizations of the Federal Communications Commission. A “‘cable system” is a facility, located in any State, Territory, Trust Territory, or Posses- sion, that in whole or in part receives signals transmitted or programs broadcast by one or more television broadcast stations licensed by the Federal Communications Commission, and makes secondary transmissions of such signals or programs by wires, cables, or other com- munications channels to subscribing members of the public who pay for such service. For purposes of determining the royalty fee under subsection (d)(1), two or more cable systems in contiguous communities under common own- ership or control or operating from one head- end shall be considered as one system. The ‘local service area of a primary trans- mitter’’ in the case of a television broadcast Al7 station, comprises the area in which such sta- tion is entitled to insist upon its signal being retransmitted by a cable system pursuant to the rules, regulations, and authorizations of the Federal Communications Commission in effect on April 15, 1976, or in the case ofa television broadcast station licensed by an appropriate governmental authority of Canada or Mexico, the area in which it would be entitled to insist upon its signal being retransmitted if it were a television broadcast station subject to such rules, regulations, and authorizations. The ‘“‘lo- cal service area of a primary transmitter’’, in the case of a radio broadcast station, comprises the primary service area of such station pur- suant to the rules and regulations of the Fed- eral Communications Commission. A ‘distant signal equivalent’”’ is the value assigned to the secondary transmission of any nonnetwork television programming carried by a cable system in whole or in part beyond the local service area of the primary transmitter of such programming. It is computed by as- signing a value of one to each independent station and a value of one-quarter to each net- work station and noncommercial educational station for the nonnetwork programing so car- ried pursuant to the rules, regulations, and au- thorizations of the Federal Communications Commission. The foregoing values for inde- pendent, network, and noncommercial educa- tional stations are subject, however, to the following exceptions and limitations. Where the rules and regulations of the Federal Commu- nications Commission require a cable system to omit the further transmission cf a particular program and such rules and regulations also Al8 permit the substitution of another program em- bodying a performance or display of a work in place of the omitted transmission, or where such rules and regulations in effect on the date of enactment of this Act permit a cable system, at its election, to effect such deletion and sub- stitution of a non-live program or to carry ad- ditional programs not transmitted by primary transmitters within whose local service area the cable system is located, no value shall be assigned for the substituted or additional pro- gram; where the rules, regulations, or author- izations of the Federal Communications Commission in effect on the date of enactment of this Act permit a cable system, at its elec- tion, to omit the further transmission of a par- ticular program and such rules, regulations, or authorizations also permit the substitution of another program embodying a performance or display of a work in place of the omitted trans- mission, the value assigned for the substituted or additional program shall be, in the case of a live program, the value of one full distant signal equivalent multiplied by a fraction that has as its numerator the number of days in the year in which such substitution occurs and as its denominator the number of days in the year. In the case of a station carried pursuant to the late-night or specialty programing rules of the Federal Communications Commission, or a station carried on a part-time basis where full-time carriage is not possible because the cable system lacks the activated channel ca- pacity to retransmit on a full-time basis all signals which it is authorized to carry, the val- ues for independent, network, and noncom- mercial educational stations set forth above, as Alg the case may be, shall be multiplied by a frac- tion which is equal to the ratio of the broadcast hours of such station carried by the cable sys- tem to the total broadcast hours of the station. A “network station” is a television broad- cast station that is owned or operated by, or affiliated with, one or more of the television networks in the United States providing na- tionwide transmissions, and that transmits a substantial part of the programing supplied by such networks for a substantial part of that station’s typical broadcast day. An “independent station” is a commercial television broadcast station other than a net- work station. A ‘‘noncommercial educational station’”’ is a television station that is a noncommercial ed- ucational broadcast station as defined in sec- tion 397 of title 47. Section 624 of the Cable Communications Policy Act of 1984 [47 U.S.C. § 544] provides as follows: (a) Regulation by franchising authority Any franchising authority may not regulate the services, facilities, and equipment provided by a cable operator except to the extent consistent with this subchapter. (b) Requests for proposals; establishment and enforcement of requirements In the case of any franchise granted after the effective date of this subchapter, the franchising authority, to the extent related to the establish- ment or operation of a cable system— A20 (1) in its request for proposals for a fran- chise (including requests for renewal proposals, subject to section 546 of this title), may es- tablish requirements for facilities and equip- ment, but may not establish requirements for video programming or other information ser- vices; and (2) subject to section 545 of this title, may enforce any requirements contained within the franchise— (A) for facilities and equipment, and (B) for broad categories of video program- ming or other services. (c) Enforcement authority respecting fran- chises effective under prior law In the case of any franchise in effect on the effective date of this subchapter, the franchising authority may, subject to section 545 of this title, enforce requirements contained within the fran- chise for the provision of services, facilities, and equipment, whether or not related to the estab- lishment or operation of a cable system. (d) Cable service obscene, indecent or other- wise unprotected by Constitution (1) Nothing in this subchapter shall be con- strued as prohibiting a franchising authority and a cable operator from specifying, in a fran- chise or renewal thereof, that certain cable ser- vices shall not be provided or shall be provided subject to conditions, if such cable services are obscene or are otherwise unprotected by the Constitution of the United States. (2A) In order to restrict the viewing of pro- gramming which is obscene or indecent, upon A21 the request of a subscriber, a cable operator shall provide (by sale or lease) a device by which the subscriber can prohibit viewing of a particular cable service during periods selected by that subscriber. (B) Subparagraph (A) shall take effect 180 days after the effective date of this subchapter. (e) Technical standards The Commission may establish technical stand- ards relating to the facilities and equipment of cable systems which a franchising authority may require in the franchise. — (f) Limitation on regulatory powers of Federal agencies, States, or franchising authorities; ex- ceptions (1) Any Federal agency, State, or franchising authority may not impose requirements regarding the provision or content of cable services, except as expressly provided in this subchapter. (2) Paragraph (1) shall not apply to— (A) any rule, regulation, or order issued un- der any Federal law, as such rule, regulation, or order (i) was in effect on September 21, 1983, or (ii) may be amended after such date if the rule, regulation, or order as amended is not inconsistent with the express provisions of this chapter; and (B) any rule, regulation, or order under Title 17. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_1508%3A1. Public record. Not legal advice.