Opposition Brief — Office of Communication of the United Church of Christ v. Federal Communications Commission

| + Suprenvs Court, U.S.

, | \SIGED

MAY 9 1988

Nos. 87-1487, 87-1506, 87-1510, and B7-15

aR.

In the Supreme Court of the

OCTOBER TERM, 1987

OFFICE OF COMMUNICATION OF THE UNITED CHURCH

OF CHRIST, PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED

STATES OF AMERICA, ET AL.

CORPORATION FOR PUBLIC BROADCASTING, ET AL.,

PETITIONERS

Vv.

CENTURY COMMUNICATIONS CoRP., ET AL.

NATIONAL ASSOCIATION OF BROADCASTERS, PETITIONER

Vv.

CENTURY COMMUNICATIONS CORPORATION, ET AL.

ASSOCIATION OF INDEPENDENT TELEVISION

STATIONS, INC., PETITIONER

V.

CENTURY COMMUNICATIONS CORPORATION, ET ALL.

ON PETITIONS FOR WRITS OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

MEMORANDUM FOR THE FEDERAL RESPONDENTS

CHARLES FRIED

Solicitor General

Department of Justice

Washington, D.C. 20530

Bo heted vont: tue nne

TABLE OF AUTHORITIES

Cases:

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

Ws ay hig See ste we ero 8 a Oe eas ea dea kee

Clark v. Community for Creative Non- Violence, 468 U.S.

are ee ea etree ae wee 4-5 9

FCC v. WNCN Listeners Guild, 450 U.S. $582 (1981) .....

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

978), BITE, O00 U.S. GOP CISTI) nook ace cc cc cena.

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

1985), cert. denied, 476 U.S. 1169 (1986) .............

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

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

Constitution and statutes:

U.S. Const.:

tae wily taht gig ead gs gk pe ea oe

RN te coal cada ds ka bed ee et dee

Cable Communications Policy Act of 1984 (47 U.S.C.

Se OE ipa ss ks kaos doh CONS RE Kod

Communications Act of 1934, 47 U.S.C. (& Supp. III) 521

OO Se a SE LO eT Tee ee eT eee Ter oe

ee ee OE eae ee edad ed abate akbeai

Miscellaneous:

Notice of Inquiry, MM Dkt. No. 88-138 (FCC Mar. 24,

RT cs bee eats Walt pre aieen Jab aoss ees deo

(1)

Page

wn

‘na —l

Jn the Supreme Court of the Gnited States

OCTOBER TERM, 1987

No. 87-1487

OFFICE OF COMMUNICATION OF THE UNITED CHURCH

OF CHRIST, PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND

UNITED STATES OF AMERICA, ET AL.

No. 87-1506

CORPORATION FOR PUBLIC BROADCASTING, ET AL.,

PETITIONERS

Vv.

CENTURY COMMUNICATIONS CORP., ET AL.

No. 87-1510

NATIONAL ASSOCIATION OF BROADCASTERS, PETITIONER

Vv.

CENTURY COMMUNICATIONS CORPORATION, ET AL.

No. 87-1551

ASSOCIATION OF INDEPENDENT TELEVISION

STATIONS, INC., PETITIONER

V.

CENTURY COMMUNICATIONS CORPORATION, ET AL.

ON PETITIONS FOR WRITS OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

MEMORANDUM FOR THE FEDERAL RESPONDENTS

(1)

2

In this case, the court of appeals held unconstitutional

the interim “must carry” rules of the Federal Communica-

tions Commission (Commission or FCC). Under those

rules, cable television systems are required to retransmit

certain broadcast signals for a limited period while the

public learns that it can receive broadcast signals that are

not carried by a cable operator. Although the Commission

presented substantial arguments in support of the validity

of the rules in the court of appeals, we cannot say that that

court’s judgment striking down these particular interim

rules is of sufficient practical importance or legal

significance to warrant this Court’s review.

1. In the mid-1960s, the FCC adopted broad “must

carry” rules applicable to all cable operators in the country

(Pet. App. 36a-37a). Those rules required cable operators

to carry the signals of local broadcast television stations.

The Commission believed that the rules were needed to

protect local broadcasters from the competition of cable

companies (id. at 39a). In Quincy Cable TV, Inc. v. FCC,

768 F.2d 1434 (D.C. Cir. 1985), cert. denied, 476 U.S.

1169 (1986), the court of appeals held that the FCC’s

broad must-carry rules were invalid under the First

Amendment. The court stated that “in the particular cir-

cumstances of this constitutional challenge the Commis-

sion has failed adequately to demonstrate that an

unregulated cable industry poses a serious threat to local

broadcasting and, more particularly, that the must-carry

rules in fact serve to alleviate that threat” (768 F.2d at

1459).

In light of the Quincy decision, the Commission com-

menced a rulemaking proceeding to consider whether to

adopt new must-carry rules. In its Report and Order (Pet.

App. 32a-204a), the Commission announced that its

primary policy is to “maximize[ ] diversity and choice in

television service” (/d. at 94a). With this policy in mind,

the Commission reasoned that “it is no longer appropriate

or desirable to treat cable as an auxiliary video distribution

service and to protect local broadcast television services

from competition with cable service” (id. at 97a). Rather,

the Commission believed that consumer choice would be

maximized if cable companies are free to select their own

programs and cable subscribers are free to receive off-the-

air signals by means of an antenna (/d. at 102a). Accord-

ingly, the Commission concluded that “must carry regula-

tions are neither desirable nor sustainable as long-term

solutions to the problem of cable subscribers’ access to

broadcast signals” (/d. at 111la).

Nevertheless, the Commission believed that some short-

term regulation was needed to correct a consumer

“misperception” —/.e., that “their only means of access to

off-the-air signals is through their cable service” (Pet.

App. 99a). To remedy this problem, the Commission

adopted a rule requiring “cable companies to provide their

subscribers with input selector switches” — so-called “A/B

switches” — “that will enable reception of broadcast signals

by means of an antenna” (id. at 110a).' In addition, “out

of an abundance of caution and concern” (ibid.), the

Commission adopted interim must-carry rules. The Com-

mission concluded that these limited must-carry rules are

needed while cable subscribers learn that they can receive

any off-the-air signal by means of installing an A/B switch

and an antenna. Under these rules, which expire five years

after promulgation \ibid), cable systems with 21 channels

Or more must devote a portion of their channels (generally

25%) to local broadcast signals (id. at 120a).2 Cable

' The Commission also adopted a rule requiring cable operators to

“inform subscribers of the changes in the regulations concerning the

carriage of broadcast signals and of the need for input selector

switches” (Pet. App. 113a).

? Cable systems with 20 or fewer channels need carry only one

educational station (Pet. App. 119a-120a).

systems need not carry two stations affiliated with the

Same network nor stations that attract only a small

number of viewers (id. at 117a, 121a).

The Commission rejected constitutional and statutory

challenges to its interim must-carry rules. Analyzing the

rules under the test set forth in United States v. O’Brien,

391 U.S. 367 (1968), the Commission stated that the “rules

* * * satisfy the requirements of the First Amendment

(Pet. App. 154a; 158a). The Commission further con-

cluded that the interim must-carry rules are consistent with

the Cable Communications Policy Act of 1984 (47 U.S.C.

(Supp. III) 521 ef seq.), and “are not a ‘taking’ against

private property for public use without compensation”

(Pet. App. 158a).

2. On review, the court of appeals held that the Com-

mission’s interim must-carry rules violate cable operators’

rights under the First Amendment (Pet. App. 28a).’ The

Court scrutinized the rules under its reading of the con-

Stitutional test announced by this Court in O’Brien —

whether the rule advances a “substantial governmental in-

terest” with an incidental restriction on speech that “is no

greater than is essential to the furtherance of that interest”

(391 U.S. at 377).

For several reasons, the court of appeals concluded that

the record did not support a finding that the Commission’s

interim must-carry rules advance a substantial governmen-

tal interest. First, the court stated that there is “scant

evidence” for the FCC’s judgment that there is a

widespread misperception that the only means of receiving

off-the-air signals is through a cable system (Pet. App.

19a). Second, the court noted that the record did not sup-

port the Commission’s “assumption” that cable companies

would not carry local broadcasts without must-carry rules

* The court of appeals did not address the statutory and Fifth

Amendment challenges to the interim must-carry rules.

(id. at 25a-26a). Lastly, the court of appeals held that the

record did not justify a conclusion that the must-carry

rules are narrowly tailored (id. at 26a-28a). The court

observed that the “FCC adduces literally no evidence that

this [interim] period must last for fully five years” (id. at

26a).*

3. This case does not warrant further review. The c@urt

of appeals applied the constitutional test (O’Brien) ad-

vanced by the Commission. In applying that test, the court

of appeals may have imposed an excessively stringent

evidentiary burden on the Commission to justify its in-

terim must-carry rules. Compare United States v. Alber-

tini, 472 U.S. 675 (1985); Clark v. Community for

Creative Non-Violence, 468 U.S. 288 (1984). In the con-

text of this case, however, this limited legal dispute —

concerning deficiencies found by the court of appeals in

this particular administrative record—does not warrant

this Court’s attention. °

‘ The court of appeals did not invalidate the Commission's rules

concerning A/B switches and subscriber education. Pet. App. 3la

* Moreover, there is no relevant conflict in the circuits. As a prac-

tical matter, the court of appeals’ decision in this case has nationwide

effect by setting aside the Commission's interim must-carry rules for

the remainder of their intended five-year duration. And it is not clear

that any other circuit would have reached a different decision in this

case. Petitioners cite Black Hills Video Corp. v. FCC, 399 F.2d 65

(1968), for the proposition that the Eighth Circuit believes that the

First Amendment imposes virtually no constraints on the Commis-

sion’s regulation of the content of cable signals. But in Midwest Video

Corp. v. FCC, §71 F.2d 1025 (1978), aff'd, 440 U.S. 689 (1979), the

Eighth Circuit cast doubt on its Black Hills decision. The court stated

that “we have seen and heard nothing in this case to indicate a con-

stitutional distinction between cable systems and newspapers in the

context of the government's power to compel public access” ($71 F.2d

at 1056)

6

The Commission adopted the must-carry rules for the

sole purpose of ensuring access to local broadcasts while

cable consumers are informed that they may receive off-

the-air signals by installing an A/B switch and an

antenna.® The Commission, however, has very little data

indicating that consumers need years to gain this

knowledge. Moreover, there are certainly many cable

subscribers who also have television sets that are not con-

nected to the cable system; those subscribers can receive

broadcast signals simply by viewing their unconnected sets

without installing an A/B switch. In addition, there is

force behind the court of appeals’ suggestion (Pet. App.

27a) that cable subscribers will have greater incentive to

buy and install an A/B switch when there are no must-

carry rules and if cable companies actually stop carrying

local broadcast stations.’

There is also little basis, at this time, for concluding that

local broadcasters will suffer from the lack of must-carry

rules. As the Commission noted in its Report and Order,

* There is no basis for the suggestion of petitioner Office of Com-

munication of the United Church of Christ (87-1487 Pet. 11-17) that

the Communications Act of 1934 (47 U.S.C. (& Supp. IIL) 151 ef seg.)

requires the Commission to readopt broad must-carry rules to protect

local broadcasters from competition. The Communications Act

(which, of course, was enacted prior to the development of either

television or cablecasting) delegates to the Commission the task to

“make available * * * to all the people of the United States a rapid, ef-

ficient, Nation-wide, and world-wide wire and radio communication

service” (47 U.S.C. 151). In fulfilling that mandate, the Commission

has determined that broad must-carry rules are no longer desirable.

The Commission's judgment in this matter is entitled to “substantial

judicial deference.” FCC v. WNCN Listeners Guild, 450 U.S. §82, 596

(1981).

’ Indeed, while must-carry rules are in effect, the main incentive to

buy an A’B switch may be to have access to broadcast signals in the

event that cable service is disrupted.

“existing empirical data concerning the actual effects of

deletion of the must carry rules on signal carriage is

sparse” (Pet. App. 149a n.159). The one fact that “is clear

from the record” is “that cable systems do have incentives

to carry broadcast stations” (id. at 102a). Indeed, the

record indicates that, during the 16 months between the

court of appeals’ Quincy decision and the Commission’s

imposition of the interim must-carry rules, cable operators

generally did not stop carrying local broadcast signals (/d.

at 25a).

The court of appeals’ decision gives the Commission an

opportunity to observe how broadcasters and the cable in-

dustry will operate without must-carry rules. And the

Commission is taking advantage of that opportunity. The

Commission recently began an inquiry concerning the ef-

fects of the absence of must-carry rules. See Notice of In-

quiry, MM Dkt. No. 88-138 (Mar. 24, 1988). The Com-

mission is seeking data about whether cable operators

have stopped carrying broadcast signals and whether cable

operators are charging broadcasters fees to carry their

signals. The court of appeals did “not suggest that must-

carry rules are per se unconstitutional” (Pet. App. 28a).

Thus, if experience (as opposed to a prediction) proves

that must-carry rules are needed to advance valid public

interests, the Commission may build a record supporting

new must-carry rules and defend those rules in the courts.

In these circumstances, the question of the validity of the

Commission’s interim must-carry rules, which were

“adopted out of an abundance of caution” (Pet. App.

110a), does not warrant this Court’s review.

Respectfully submitted.

CHARLES FRIED

Solicitor General

MAY 1988

US GOVERNMENT PRINTING OFFICE 1988 — 202 937 60434