# Amicus Curiae Brief — Preferred Communications, Inc. v. City of Los Angeles

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 1994
- **Citation:** 512 U.S. 1235

## Text

—_ *

4 | Gugrams Cou US
No. 93-1570 FiuULO

IN THE MAY 18 1994

Supreme Court of the Gnited Pitated: oc
October Term, 1993 oT

PREFERRED COMMUNICATIONS, INC.,

Petitioner,
v.

CITY OF LOS ANGELES and DEPARTMENT
OF WATER & POWER,
Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

BRIEF OF UNITED STATES TELEPHONE
ASSOCIATION AND BELL ATLANTIC
CORPORATION AS AMICI CURIAE IN SUPPORT
OF THE PETITION FOR WRIT OF CERTIORARI

MARY MCDERMOTT LAURENCE H. TRIBE

900 19th Street, N.W., Ste. 800 Counsel of Record
Washington, D.C. 20006 JONATHAN S. MASSEY
(202) 326-7247 1575 Massachusetts Avenue
Counsel for United States Cambridge, MA 02138
Telephone Association (617) 495-4621

JAMES R. YOUNG

JOHN THORNE

MICHAEL E. GLOVER

1710 H Street, N.W.
Washington, D.C. 20006
(202) 392-0895

Counsel for Bell Atlantic Corp.

May 18, 1994

BATEMAN & SLADE, INC. BOSTON, MASSACHUSETTS

TABLE OF CONTENTS

pe ii

INTRODUCTION AND SUMMARY OF ARGUMENT .. 1
REASONS FOR GRANTING THE WRIT .......... 5

I. THIS CASE OFFERS A VALUABLE
OPPORTUNITY TO CLARIFY THE FIRST
AMENDMENT PRINCIPLES APPLICABLE TO
ADMINISTRATIVE SCHEMES THAT LICENSE
THE DEPLOYMENT OF FACILITIES NECESSARY
FOR ELECTRONIC SPEECH .............. 5

Il. THIS CASE ALSO PROVIDES A VALUABLE
OPPORTUNITY TO DECIDE WHETHER THE
FIRST AMENDMENT PERMITS MUNICIPALITIES
TO SILENCE SPEECH AND REDUCE
COMPETITION BY GRANTING EXCLUSIVE
CABLE PRANCHISES ...........cccceee 12

IS, Tia al co pia ate an se ca 9 ps 19

TABLE OF AUTHORITIES

Cases Pages
Buckley v. Valeo, 424 U.S. 1 (1976) (per curiam) ........ 17
Chesapeake & Potomac Telephone Co. of Virginia v.

United States, 830 F. Supp. 909 (E.D. Va. 1993) ...... |

Chicago Cable Communications v. Chicago Cable Comm'n,
678 F. Supp. 734 (N.D. Ill. 1988),

GG, Sie me Bore CF CH, TOU) cg ce cece eeees 10
City of Cincinnati v. Discovery Network, Inc..,

Se EE SUR abcd pe bes ence nees 5,7
City of Ladue v. Gilleo, No. 92-1856 ................ 4
City of Lakewood v. Plain Dealer Pub. Co.,

ee 4. Pe ee ee 5-8
City of Los Angeles v. Preferred Communications, Inc..,

ae ne I a oa odo 0k a wh ace 44-0 1-2

Communications Co. v. City of Boulder,

660 F.2d 1370 (10th Cir. 1981), cert. dismissed,

a ee es ae os bce 0 os 14
Community Television of Utah, Inc. v. Wilkinson,

611 F. Supp. 1099 (D. Utah 1985), aff'd, 800 F.2d 989

(10th Cir. 1986) (per curiam), aff'd, 480 U.S. 926 (1987) . 14
Consolidated Edison Co. v. Public Service Comm'n,

OOF re he es re A ia Ss 17
Cox Cable Communications, Inc. v. United States,

774 F. Supp. 633 (M.D. Ga. 1991), remanded on

other grounds, 992 F.2d 1178 (1ith Cir. 1993) ........ 13
pa eK re 8
Edenfield v. Fane, 113 S. Ct. 1792 (1993) ............ 16
Erie Telecommunications, Inc. v. Erie,

kt OD Sr 9
FCC v. Florida Power Corp., 480 U.S. 245 (1987) ....... 17
Forsyth Cty. v. Nationalist Movement, 112 S.Ct. 2395 (1992) 3, 6
Freedman v. Maryland, 380 U.S. 51 (1965)............ 7
FW/PBS, Inc. v. City of Dallas, 493 U.S. 215 (1990) .... 6,7
Group W Cable, Inc. v. City of Santa Cruz,

669 F. Supp. 954 (N.D. Cal. 1987) ............... 13
Jones Intercable of San Diego, Inc. v. City of Lake Elsinore,

No. SACV 90-636-GLT (C.D. Cal. Apr. 4, 1991) ...... 13
Kovacs v. Cooper, 356 U.3. T7 (IGG) 0 wc ccc cree 5
Kunz v. New York, 340 U.S. 290 (1951) .............. 6
Leathers v. Medlock, 499 U.S. 439 (1991) ........... 1,9

TABLE OF AUTHORITIES (cont.)

Cases Pages
Lee v. International Soc’y for Krishna Consciousness, Inc.,

R52 BS. Ch. Bee Cee) OF GUM ave ec cc cece vces 4
McCullough v. Maryland, 4 Wheat. 316 (1819) ......... 9

Miami Herald Pub. Co. v. Tornillo, 418 U.S. 241 (1974) 11, 14
Minneapolis Star & Tribune Co. v. Minnesota

Comm '’r of Revenue, 460 U.S. 575 (1983) ........... 5
Nat’! Bank of Boston v. Bellotti, 435 U.S. 765 (1978) ..... 17
Niemotko v. Maryland, 340 U.S. 268 (1951) ........... 3

Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987)... 8
Omega Satellite Products v. City of Indianapolis,

IE, EE wo cco desc ce reer veces 14
Pacific Gas & Elec. Co. v. Public Utilities Comm'n,
En ee 16

Paragould Cablevision, Inc. v. City of Paragould,

930 F.2d 1310 (8th Cir. 1990), cert. denied,

EE ee eee 18
Police Dept. of Chicago v. Mosley, 408 U.S. 92 (1972) .... 17
Preferred Communications, Inc. v. City of Los Angeles,

754 F.2d 1396 (9th Cir. 1985), aff'd on narrower

grounds, 476 U.S. 488 (1986) ...............2006- 13
Quincy Cable TV, Inc. v. FCC, 768 F.2d 1434 (D.C. Cir.
1985), cert. denied, 476 U.S. 1169 (1986) ........... 14

Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969) ... 14
Riley v. National Federation of the Blind, Inc..,

a ES GE EE 8
Saia v. New York, 334 U.S. 558 (1948) .............. 5
Schneider v. State, 308 U.S. 147 (1939) ............. 4,5
Secretary of State of Maryland v. Joseph H. Munson Co.,

Se A eee wees ees ee eee 6

Shuttlesworth v. City of Birmingham, 394 U.S. 147 (1969) .. 6
Southwestern Bell Tel. Co. v. FCC, Nos. 91-1416, et al.
I ee ee 17
Telecommunications Research & Action Center v. FCC,
801 F.2d 501 (D.C. Cir. 1986), cert. denied,
ee ola an to a nes 6908 15
Turner Broadcasting System, Inc. v. FCC, Nos. 93-44/93-45 . 2
United States v. O’Brien, 391 U.S. 367 (1968) ....... 10, 16

iia ia ait ai

iv
TABLE OF AUTHORITIES (cont.)

Cases Pages
Vance v. Universal Amusement Co., 445 U.S. 308 (1980) ... 8
Ward v. Rock Against Racism, 491 U.S. 781 (1989) .... 6, 16
Warner Cable Communications, Inc. v. City of Niceville,

tee | of fk |) ee eo a ree 18
Statutes, Rules and Constitutional Provisions Pages
U.S. Constitution, First Amendment ............. passim
ED da 66 & 60-66 0 Bak OES 65 os seas ouen 12 |
Ee ee ee ee eee re ae 17 |
if Re ea ere a ses ee ae 12 |
LS, kod wn back 0-0 ade eee 12 |
Sr Raia '« 0 5 5 6 a'6.0 «0.40.6 Rew Ae 9 |
ga as go Su of aa are ae 8, 9, 18 |
er GEE 6a bso 0b Wd ea awed ee eee en 9
rs as 6 5.0 4.0.0. d. 0:0 aca. Heme oueeen 9
1992 Cable Act, 106 Stat. 1460, § 2(a) .............. 15
Miscellaneous Pages |
Bureau of the Census, U.S. Dept. of Commerce, Statistical |

Abstract of the United States 1992, (112th ed. 1992) ..... 14 |
J. Emord, Freedom, Technology, and the |

PR Seva cic sce eccccseces 11

Office of Plans and Policies, Federal Communications Comm'n,
Broadcast Television In a Multichannel Marketplace,

OPP Working Paper No. 26 (June 1990) ............ 14
Lee, Cable Franchising and the First Amendment,

pe EE 10
L. Levy, Emergence of a Free Press (1985)............ 11
Newspaper Ass’n of America, Facts About

Settee ewe 14

Report of the Federal Communications Commission

Regarding the President’s Regulatory Reform

Pe i Ss a ky 0 0 0 15-16
Saylor, Municipal Ripoff: The Unconstitutionality

of Cable Television Franchise Fees and Access

Support Payments, 35 Catholic L. Rev. 671 (1986) ...... 11
F. Siebert, Freedom of the Press in England: 1476-1776 (1965) 11

’
Pes

INTEREST OF AMICI CURIAE”

Amici curiae Bell Atlantic Corporation and the United
States Telephone Association submit this brief in support of
both the petition for certiorari filed by Preferred
Communications, Inc. and the cross-petition filed by the City
of Los Angeles.

Bell Atlantic provides telecommunications services and
products to the general public, including the carriage of voice,
data, and video services over its local telephone network
subject to regulation as a common carrier under state laws and
the federal Communications Act of 1934. In addition, Bell
Atlantic recently prevailed in a constitutional challenge to 47
U.S.C. § 533(b), which prohibits telephone companies from
providing “video programming” directly to subscribers within
their telephone service areas. Chesapeake & Potomac
Telephone Co. of Virginia v. United States, 830 F. Supp. 909
(E.D. Va. 1993), appeal pending, Nos. 93-2340, 93-2341 (4th
Cir.) (filed Oct. 15, 1993). Therefore, Bell Atlantic is an
electronic speaker in its own right, as well as a transporter of
the voice, video, data, and graphics messages of others.

The United States Telephone Association is a
membership corporation of over eleven hundred domestic local
exchange telephone companies. The association’s members
provide over 98% of the local telephone access lines in the
United States. Bell Atlantic, for example, is a member of the
United States Telephone Association.

INTRODUCTION AND SUMMARY OF ARGUMENT

This Court has already made clear that video
programming is constitutionally protected expression. See
Leathers v. Medlock, 499 U.S. 439, ___, 111 S. Ct. 1438,
1442 (1991); City of Los Angeles vv. Preferred

* Letters reflecting written consent of the parties to the submission
of this brief have been filed with the Clerk of the Court.

2

Communications, Inc., 476 U.S. 488, 494 (1986). This case
gives the Court the opportunity to clarify how the First
Amendment applies to speakers who use facilities along public
streets and rights of way to distribute information in electronic
rather than printed form.

In Turner Broadcasting System, Inc. v. FCC, Nos. 93-
44, 93-45, this Court is considering the constitutionality of the
"must-carry" rules contained in 47 U.S.C. §§ 534 and 535,
which require cable operators to transmit the programming of
commercial and noncommercial broadcast stations over their
cable systems. The instant case is a logical successor to
Turner. It provides an opportunity to apply the First
Amendment principles governing electronic speech to a
different array of regulatory activities: rules restricting the
deployment of facilities necessary to communicate information
from speakers to listeners.

There is enormous controversy regarding the power of
municipalities to impose conditions on, and otherwise to
regulate, the deployment of cable facilities. Lower courts are
divided over the proper First Amendment standard for
regulations of cable television and other emerging forms of
electronic communication. The instant case is a microcosm
illustrating the need for this Court’s review: the case began in
1983, has persisted for over a decade, and has already been
the subject of one plenary proceeding in this Court. Yet
Preferred Communications is still seeking the government
permit that will enable it to speak to its chosen audience. The
questions presented here will not go away. The need for this
Court’s guidance will only increase. And the constitutional
issues raised by this case have already been thoroughly aired
in many lower courts and are fully ripe for this Court’s
review.

I. The Court should grant the petition for certiorari
filed by Preferred Communications in order to clarify the
constitutional standards that apply to the distribution of
electronic speech. In particular, the Court should clarify that

three fundamental First Amendment principles developed in
the context of the distribution of print and other types of
speech should govern the distribution of information in
electronic form:

(1) Schemes providing for the administrative regulation
of speech must contain "‘narrowly drawn, reasonable and
definite standards’" to constrain the decisionmaker’s
discretion. Forsyth County v. Nationalist Movement, 112 S.
Ct. 2395, 2402 (1992) (quoting Niemotko v. Maryland, 340
U.S. 268, 271 (1951)).

(2) Such schemes must include reasonable time limits
within which the decisionmaker is required to act.

(3) Any restriction on the deployment of facilities used
for electronic speech must be both narrowly tailored to the
Government’s regulatory objective and possess an essential
nexus to the particular facilities in question.

The importance of articulating these principles is
underscored by the First Amendment abuses that are reflected
in the record of this case and that are a common characteristic
of the procedures by which local governments grant cable
franchises. The franchise process routinely imposes virtually
no limits on the discretion of local government officials and
no meaningful time limits for action. The result is that cable
operators can obtain the permits they need to speak only if |
they accept onerous conditions that are wholly unrelated to
any legitimate governmental interest. Common examples of
these conditions range from providing free services and
facilities for the use of local governments to providing local
officials a special channel over which they can transmit their
own chosen messages to voters — an information-age
equivalent of the franking privilege.

Moreover, this type of standardless administrative control
of protected expression is not limited to cable television. For
example, the FCC has asserted authority to regulate telephone
company facilities used to deliver video speech as required by

eT

4

"public convenience and necessity." Satellite technologies
used to distribute video programming are subject to a similar
standard. The breadth of this problem makes the need for this
Court’s review all the more acute.

II. The Court should also grant the cross-petition filed
by the City of Los Angeles in order to establish, once and for
all, that the First Amendment does not permit municipalities
to grant exclusive franchises to incumbent cable companies.
This Court’s review is necessary because the lower courts are
divided over the question, although the weight of authority
would hold that the First Amendment prevents municipalities
from banning a second speaker. While the 1992 Cable Act
limited the power of local officials to grant exclusive
franchises, it did not solve the problem — as illustrated by
Los Angeles’ refusal to consider another application for a
cable franchise until the intervention of the Ninth Circuit.

Moreover, this Court’s review is essential, because the
speech at issue is video programming — the most pervasive
form of communication in America today and _ the
contemporary equivalent of the handbill, newspaper, and live
entertainment source rolled into one. This Court should make
clear that regulations impairing the practical ability of
speakers and audiences to participate fully in such an
important medium properly trigger the most searching
constitutional scrutiny. See City of Ladue v. Gilleo, No. 92-
1856 (argued Feb. 23, 1994); Lee v. International Soc’y for
Krishna Consciousness, Inc., 112 S. Ct. 2709, 2710 (1992)
(per curiam); Schneider v. State, 308 U.S. 147, 162 (1939).
The justifications proffered by the City of Los Angeies and
other municipalities are woefully inadequate to warrant a ban

on competing speakers.

5
REASONS FOR GRANTING THE WRIT

I. THIS CASE OFFERS A VALUABLE
OPPORTUNITY TO CLARIFY THE FIRST
AMENDMENT PRINCIPLES APPLICABLE TO
ADMINISTRATIVE SCHEMES THAT LICENSE
THE DEPLOYMENT OF FACILITIES NECESSARY
FOR ELECTRONIC SPEECH

This Court has always subjected to full First Amendment
scrutiny laws that deprive speakers of the channels of
communication they need to deliver their messages to their
chosen audiences.’ This Court should do no less with respect
to cable television and other forms of electronic speech. The
wires and cables that carry electronic information are the
arteries of expression, without which speakers could not
communicate with willing listeners.

To be sure, we do not maintain that Government is
completely disabled from regulating the deployment of the
facilities necessary to transmit electronic speech — any more
than the Government is wholly disabled from regulating the
movement of sound trucks on public streets,” the placement

' For example, this Court has applied First Amendment scrutiny to
laws regulating publishers’ ability to distribute their newspapers,
Minneapolis Star & Tribune Co. v. Minnesota Comm’r of Revenue, 460
U.S. 575 (1983) (“use tax” on cost of paper and ink products consumed in
publishing process); City of Cincinnati v. Discovery Network, Inc., 113 S.
Ct. 1505 (1993) (regulation of newsracks); City of Lakewood v. Plain
Dealer Pub. Co. , 486 U.S. 750 (1988) (same); to laws prohibiting the use
of loudspeakers, Saia v. New York, 334 U.S. 558 (1948); and to laws
regulating the physical distribution of handbills. Schneider v. New Jersey,
308 U.S. 147 (1939).

2 See Kovacs v. Cooper, 336 U.S. 77 (1949).

6

newsracks on public sidewalks,’ the operation of sound
equipment in public parks,* or any other activities of special
First Amendment significance. But we do submit, and believe
it to be a fundamental proposition worthy of this Court’s
plenary consideration, that familiar First Amendment
principles should govern administrative schemes that license
the deployment of facilities necessary for electronic speech:

(1) Foremost among these free speech principles is the
precept that administrative discretion must be carefully
limited. The First Amendment forbids government from
"vest[ing] restraining control over the right to speak [in] an
administrative official where there are no appropriate
standards to guide his action." Kunz v. New York, 340 U.S.
290, 295 (1951).° Thus, in City of Lakewood v. Plain Dealer

> See City of Cincinnati v. Discovery Network, Inc., 113 S. Ct. 1505
(1993); City of Lakewood v. Plain Dealer Pub. Co., 486 U.S. 750 (1988).

* See Ward v. Rock Against Racism, 491 U.S. 781 (1989).

* See, e.g., Forsyth County v. Nationalist Movement, 112 S. Ct. 2395,
2402-03 (1992) (striking down assembly and parade ordinance that
permitted a government administrator to vary the fee to reflect the
estimated cost of maintaining public order, on the ground that there were
"no articulated standards either in the ordinance or in the county's
established practice"); FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 225-
226 (1990) ("a scheme that places ‘unbridled discretion in the hands of a
government official or agency constitutes a prior restraint and may result
in censorship’") (quoting City of Lakewood, 486 U.S. at 757); Secretary
of State of Maryland v. Joseph H. Munson Co., 467 U.S. 947, 964 n.12
(1984) (“a statute that requires ... a ‘license’ for the dissemination of ideas
is inherently suspect. By placing discretion in the hands of an official to
grant or deny a license, such a statute creates a threat of censorship that by
its very existence chills free speech."); Shuttlesworth v. City of
Birmingham, 394 U.S. 147, 150-151 (1969) ("in deciding whether or not
to withhold a permit, the members of the Commission were to be guided
only by their own ideas of ‘public welfare, peace, safety, health, decency,
good order, morals, or convenience.’ This ordinance as it was written,
therefore, fell squarely within the ambit of the many decisions of this

7

Publishing Co., 486 U.S. 750 (1988), the Court held invalid
on its face an ordinance that gave a mayor untrammelled
power to grant or deny applications for annual permits to
place newsracks on public property, even though such
newsracks necessarily burden the streets and other public areas
with clutter, litter, and other inconveniences. The Court
explained that, “[w]ithout ... guideposts, post hoc
rationalizations by the licensing official and the use of shifting
or illegitimate criteria are far too easy, making it difficult for
courts to determine in any particular case whether the licensor
is permitting favorable, and suppressing unfavorable,
expression.” Jd. at 758.°

In City of Cincinnati v. Discovery Network, Inc., 113 S.
Ct. 1505 (1993), this Court invalidated a city regulation of
newsracks on public property that permitted them to be used
for distributing newspapers but not commercial handbills.
Although the Court accepted that the city was "[m]Jotivated by
its interest in the safety and attractive appearance of its streets
and sidewalks," id. at 1507, the Court noted that the city’s
regulatory scheme raised the same concerns as the ordinance
struck down in Lakewood — in particular, that it did not
contain a clear and explicit limit on the scope of the
decisionmaker’s discretion. 113 S. Ct. at 1513 n.19.

(2) The second salient principle is what this Court has

Court over the last 30 years, holding that a law subjecting the exercise of
First Amendment freedoms to the prior restraint of a license, without
narrow, objective, and definite standards to guide the licensing authority,
is unconstitutional.").

* Even the dissenters agreed that “certain licensing laws that ‘[g]iv{e]
a government official ... substantial power to discriminate based on the
content or viewpoint of speech’ are unconstitutional on their face —
without any showing of actual censorship or discrimination, or even
without the potential licensee even making an application for a license.”
486 U.S. at 774 (White, J., joined by Stevens and O’Connor, JJ.,
dissenting) (quoting the majority opinion, 486 U.S. at 759).

described as "[tJhe core policy underlying" Freedman v.
Maryland, 380 U.S. 51, 56-57 (1965) — “that the license for
a First Amendment-protected business must be issued within
a reasonable period of time, because undue delay results in the
unconstitutional suppression of protected speech.” FW/PBS,
Inc. v. City of Dallas, 493 U.S. 215, 227 (1990).’

Thus, administrative schemes that license the deployment
of facilities for video programming and other electronic
speech must ensure that decisions are made within "a
reasonable period of time." There must be time limits within
which the decisionmaker is required to act, and applications
must not be allowed to languish for an indefinite period.

(3) Finally, any restriction on facilities needed for
electronic speech must, at an absolute minimum, be narrowly
tailored to the Government’s regulatory objective and must
possess a close nexus to the particular facilities that are the
object of regulation. See Nollan v. California Coastal
Comm’n, 483 U.S. 825, 837-38 (1987); Dolan v. Tigard, No.
93-518 (argued Mar. 23, 1994).

These three First Amendment principles are settled law
in the context of the distribution of written materials. This
Court should grant certiorari to clarify that the principles
extend as well to administrative schemes licensing the
deployment of facilities necessary for electronic speech.

’ See also Riley v. National Federation of the Blind, Inc., 487 U.S.
781, 802 (1988) (holding that scheme failing to provide for definite
limitations on the time within which administrative agency must act was
constitutionally unsound because the “delay compelled the speaker's
silence"); City of Lakewood, 486 U.S. at 771 ("Nowhere in the ordinance
is either [the mayor or the city council] required to act with reasonable
dispatch. Rather, an application could languish indefinitely before the
Council, with the Newspaper’s only judicial remedy being a petition for
mandamus"); Vance v. Universal Amusement Co., 445 U.S. 308, 316
(1980) (invalidating statute on ground that it restrained speech for an
"indefinite duration”).

eT

9

This case is a good vehicle to review that question.
Federal law provides that "a cable operator may not provide
cable service without a franchise." 47 U.S.C. § 541(b)(1).
Los Angeles acknowledges that its cable franchising process
"is similar in all material respects to the process by which

most municipalities and counties across the nation have

j granted cable franchises." Cross-Petition at 8. Yet, as
Preferred Communications explains, there are no guidelines
for, or limitations on, the exercise of the vast administrative
discretion afforded by the franchise process.

Although the 1992 Cable Act purports to limit the power
of cities and localities to grant exclusive franchises, it
nonetheless permits them to “refuse to award an additional
competitive franchise” unless refusal to do so would be
"unreasonable." 47 U.S.C. § 541(a)(1). In addition, federal
law grants local officials broad authority to require, as a
condition of holding a franchise, that cable operators pay a
special franchise fee, in addition to taxes, fees, and other
assessments of general applicability, id. at § 542(a);* “that
channel capacity be designated for public, educational, or
governmental use, and channel capacity or institutional
networks be designated for educational or governmental use,”
id. at § 531(b); and that cable operators comply with

* The power to tax is of course “the power to destroy,” McCullough
v. Maryland, 4 Wheat. 316, 431 (1819), and this Court has recognized the
First Amendment risk posed by laws that are not generally applicable taxes
but rather are special assessments singling out cable television for unique
| burdens. E.g., Leathers v. Medlock, 499 U.S. 439 (1991). Moreover, the
danger of the authority to levy fees is heightened by decisions such as Erie
Telecommunications, Inc. v. Erie, 659 F. Supp. 580 (W.D. Pa. 1987).
There, the court held that a cable television company was estopped from
arguing that the municipality’s fees exceeded those allowed by law, on the
ground that the company had "accepted" the terms of the agreement. The
court rejected the company’s argument that it faced a Hobson’s choice,
since failing to agree to the municipality's terms would have resulted in the
loss of the ability to use public rights-of-way, at least while litigation was

pending.

10

"requirements for facilities and equipment” for use by local
governments. Jd. at § 544(b)(1). Moreover, cities and
localities "may enforce any requirements contained within the
franchise (A) for facilities and equipment, and (B) for broad
categories of video programming or other services." Jd. at §
544(b)(2).°

The latitude afforded local franchising authorities, and
the absence of any meaningful time limits, has politicized the
process by which local governments determine what speech
their citizens will receive through the nation’s most important
medium of communication — a result that is anathema under
the First Amendment. As one expert has observed, "virtually
all franchising decisions are intensely political. . . . [and]
generally entail[{] subjective judgments that violate the first
amendment." Lee, Cable Franchising and the First
Amendment, 36 Vand. L. Rev. 867, 870-71 (1983).

More’ fundamentally, contemporary franchise
requirements quite plainly do not satisfy the familiar First
Amendment principles for the administrative regulation of

* Lower court decisions illustrate the risk of subtle content
discrimination that may be hard to detect but is real nonetheless and worthy
of First Amendment concern. For example, in Chicago Cable
Communications v. Chicago Cable Comm'n, 678 F. Supp. 734 (N.D. Ill.
1988), the district court held that a local cable television commission did
not violate 47 U.S.C. § 544 by fining a cable operator for failing to
comply with franchise requirements for local origination programming,
which demanded that the operator broadcast a certain number of hours of
programming per week developed specifically for viewers in Chicago. On
appeal, the Seventh Circuit sustained the local origination requirement
against a First Amendment challenge. 879 F.2d 1540 (7th Cir. 1989).
The court of appeals noted that this Court “has yet to determine the
applicable standard of review of a challenge to a municipal regulation of
cable television.” Jd. at 1548. Nonetheless, the court of appeals upheld
the local origination rule under the test of United States v. O'Brien, 391
U.S. 367, 377 (1968), concluding that “it is within the City’s rights,
arguably its responsibilities, to proffer some requirements guaranteeing that
the cable customers are, to the extent possible, accorded a range of
programming from the franchisee.“ 879 F.2d at 1550.

11

speech. For example, a municipality could not permissibly
license bookstores, newspapers, or magazines in the interest
of public convenience and necessity." A city could not
constitutionally mandate, as a condition of a newspaper’s
operation within city limits, that the newspaper turn over a
portion of its front page for use by the city officials, or that
the newspaper deliver each week self-serving bulletins from
the city’s mayor to the newspaper’s readers. See, e.g., Miami
Herald Pub. Co. v. Tornillo, 418 U.S. 241, 256 (1974).
Yet cable companies are routinely required, as a
condition of their franchises, to finance the construction of
municipally controlled television studios, to deliver free
production equipment to city officials and institutions, and to
give city officials absolute programming control over certain
channels.'' In addition, the "franchise fees" that cable
operators are required to pay almost never bear any relation
to the costs they might impose on public streets and rights-of-
way. This sharp departure from settled principles of free
speech reflects an unexplained, and disturbing, leap in First
Amendment logic and merits this Court’s plenary review.

© The history of the licensing of written expression only highlights the
need not to make the same mistake with respect to electronic speech.
Shortly after mechanical printing arrived in England, Henry VIII sought to
suppress it, fearing its persuasive power, and in 1530 established a
licensing system for printers. For the next century, at least, the system of
licensing with its monopoly rents gave the Crown considerable power to
promote the circulation of works favorable to his religious and political
policies and kept the press in England under the control of the monarch.
See J. Emord, Freedom, Technology, and the First Amendment 26 (1991);
F. Siebert, Freedom of the Press in England: 1476 ‘776, at 46 (1965); L.
Levy, Emergence of a Free Press 12-13 (1985).

" See, e.g., Saylor, Municipal Ripoff: The Unconstitutionality of Cable
Television Franchise Fees and Access Support Payments, 35 Catholic L.
Rev. 671, 672 (1986) ("The list of such obligations goes on, reflecting the
remarkable ingenuity of cities and their consultants in devising schemes for
pet ‘public interest’ projects out of cable companies’ and subscribers’
money").

12

The question is all the more important because municipal
cable franchise rules provide only one example of the
administrative schemes that regulate the distribution of
electronic speech. The Federal Communications Commission
(FCC), for instance, asserts authority under the
Communications Act to regulate the deployment of facilities
used to deliver video speech by requiring telephone companies
to obtain certificates of "public convenience and necessity."
47 U.S.C. § 214. The Act delegates to the Commission
sweeping discretion to grant or deny such certificates or to
impose essentially any “terms and conditions as in its
judgment the public convenience and necessity may require.”
Id. at § 214(c).

Similarly, direct broadcast satellite services — which can
transmit hundreds of channels of video speech to viewers —
must obtain government licenses pursuant to 47 U.S.C. § 301.
Yet the only "standard" governing the review of an application
is "whether the public interest, convenience, and necessity will
be served by the granting of such application." Jd. at §
309(a).

The breadth of the administrative control currently
exercised over the means of distributing electronic speech
emphasizes the need to clarify the requirements imposed by
the First Amendment on administrative schemes regulating
such expression.

II. THIS CASE ALSO PROVIDES A VALUABLE
OPPORTUNITY TO DECIDE WHETHER THE FIRST
AMENDMENT PERMITS MUNICIPALITIES TO
SILENCE SPEECH AND REDUCE COMPETITION
BY GRANTING EXCLUSIVE CABLE FRANCHISES

In its cross-petition, the City of Los Angeles asserts that
a municipality may deny would-be speakers the opportunity to
compete with the incumbent cable company by refusing to
grant needed franchises. We respectfully submit that the City
is wrong, but we wholeheartedly agree with Los Angeles that

13

the issue is an important one worthy of this Court’s review.

First, although the more recent and better-reasoned
decisions have concluded that the First Amendment precludes
municipal bans on additional competitive franchises, the lower
courts are nonetheless divided over the matter. We agree with
the City of Los Angeles that this Court’s review is urgently
needed

Several courts have agreed with the Ninth Circuit below
that "‘allowing only the single company selected through the
franchise auction process to erect and operate a cable system
in each region’ exacts too heavy a toll on the First
Amendment interests at stake here. Competition in the
marketplace of ideas — as in every other market — leads to
a far greater diversity of viewpoints (and better service) than
if a single vendor is granted a crown monopoly." A60-61
(quoting Preferred Communications, Inc. v. City of Los
Angeles, 754 F.2d 1396, 1406 (9th Cir. 1985) (Preferred I),
aff'd on narrower grounds, 476 U.S. 488 (1986)).'? Other

'? See Cox Cable Communications, Inc. v. United States, 774 F. Supp.
633, 637 (M.D. Ga. 1991) (invalidating exclusive franchise on First
Amendment grounds; explaining that “cable television is entitled to the
same first amendment protection as newspapers"; and holding that, while
*[c]oncerns about disruptions of the public domain do allow a government
to make reasonable restrictions on the time, place, and manner of the
disruptions,” a second provider could not be excluded automatically),
remanded on other grounds, 992 F.2d 1178 (11th Cir. 1993); Jones
Intercable of San Diego, Inc. v. City of Lake Elsinore, No. SACV 90-636-
GLT (C.D. Cal. Apr. 4, 1991) (ordering city to issue competing cable
company a franchise license, explaining that “[p)laintiff is a First
Amendment ‘speaker,’ entitled to a high degree of constitutional pro-
tection,” and that “[a}lthough the city has suggested that there will be
physical disruption of the public domain, there is insufficient showing to
suggest that plaintiff's franchise should be totally denied for this reason.
Reasonable time, place, and manner restrictions, together with appropriate
bond and insurance requirements, can remedy this potential harm"); Group
W Cable, Inc. v. City of Santa Cruz, 669 F. Supp. 954, 966-67 (N.D. Cal.
1987) (holding that First Amendment did permit city to adopt measures to
minimize disruption to public streets, but that First Amendment precluded
city from adopting regulation providing only for a single cable television

14

courts have disagreed.”

Second, this Court should grant review because of the
importance of the First Amendment rights at issue. For better
or worse, electronic speech, particularly in the form of video
programming, is the principal means by which most
Americans receive news, political opinion, entertainment, and
other forms of information. More households have televisions
than subscribe to newspapers." The average television
household watches television seven hours per day, whereas the
average newspaper receives only 45 minutes of attention.’

operator); see also Quincy Cable TV, Inc. v. FCC, 768 F.2d 1434, 1450
(D.C. Cir. 1985), cert. denied, 476 U.S. 1169 (1986) (noting that “the
Supreme Court has categorically rejected the suggestion that purely
economic constraints on the number of voices available in a given
community justify otherwise unwarranted intrusions into First Amendment
rights” (citing Miami Herald Pub. Co. v. Tornillo, 418 U.S. 241 (1974));
Community Television of Utah, Inc. v. Wilkinson, 611 F. Supp. 1099,
1112-13 (D. Utah 1985) (rejecting application of broadcast precedents like
Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969), to cable
television), aff'd, 800 F.2d 989 (10th Cir. 1986) (per curiam), aff'd, 480
U.S. 926 (1987).

" For example, in Community Communications Co. v. City of Boulder,
660 F.2d 1370, 1378-79 (10th Cir. 1981}, ceri. dismissed, 456 U.S. 1001
(1982), the Tenth Circuit vacated an injunction issued against a city’s
exclusive franchise policy. And in Omega Satellite Products v. City of
Indianapolis, 694 F.2d 119, 128 (7th Cir. 1982), the Seventh Circuit
upheld the denial of a preliminary injunction sought by a competing cable
company against a city’s exclusive franchise policy.

According to the Census Bureau, 92 million households (or 98
percent of all households) have a television, in contrast to a total daily
newspaper circulation of 62 million. Bureau of the Census, U.S. Dept. of
Commerce, Statistical Abstract of the United States 1992, Table 884 (112th
ed. 1992).

'S Office of Plans and Policies, Federal Communications Comm'n,
Broadcast Television In a Multichannel Marketplace, OPP Working Paper
No. 26, at 19, 107 (June 1990); Newspaper Ass’n of America, Facts About
Newspapers "92, at 25 (1992).

15

In addition, the "‘power to communicate ideas through sound
and visual images ... is significantly different from traditional
avenues of communication because of the immediacy of the
medium.’" Telecommunications Research & Action Center y.
FCC, 801 F.2d 501, 508 (D.C. Cir. 1986) (quoting FCC
Report and Order), cert. denied, 482 U.S. 919 (1987).

Thus, the First Amendment question here is not some
academic nicety. It is the very real question of whether a
multitude of willing speakers — and tens of millions of
potential viewers — will be prevented from fully participating
in the most important medium of communication today. In
enacting the 1992 Cable Act, Congress extensively
documented the harms to the system of free expression caused
by restrictive franchising practices and the lack of competition
in cable markets." Congress limited, but did not forbid,
exclusive franchises, see pp. 8-9, supra, and the 1992 Cable
Act did not solve the problem — as illustrated quite concretely
in the instant case by Preferred Communications’ inability to
secure even the opportunity to seek a needed franchise in Los
Angeles without the intervention of the Ninth Circuit. The net
result of restrictive franchising practices, in all their guises, is
that the market for speech is distorted, prices are too high,
and the introduction of new services is discouraged."’

'* Of the more than 10,000 communities served by cable in 1991, only
53 had two cable systems competing head-to-head. In the 1992 Cable Act,
Congress specifically found that cable has become the “dominant national
video medium” and that most cable operators "face{] no local competition, *
resulting in “undue market power for the cable operator as compared to
that of consumers and video programmers.” § 2(a)(2), 106 Stat. 1460. As
a result, according to Congress, cable rates have increased at three times
the rate of inflation since 1986. § 2(a)(1), 106 Stat. 1460.

"’ For example, the FCC has estimated that introducing competition
from telephone companies “would result in significant price savings for
consumers and stimulate provision of a range of new information services,”
with rates falling about 20 percent and subscribership increasing by 11.2
million households nationwide. Report of the Federal Communications

eal

Third, this Court should grant review because the City’s
justifications for its franchise system plainly cannot pass
muster under the “narrow tailoring” requirement of United
States v. O’Brien, 391 U.S. 367, 377 (1968), and Ward v.
Rock Against Racism, 491 U.S. 781, 800 (1989)." Los
Angeles contends that competing franchises must be denied to
conserve pole and conduit space. But the City conceded
below that the public utility infrastructure in Los Angeles
could accommodate at least one additional cable system. See
A60, Aé2.

Moreover, it is obvious that the District Court, see A90,
and the Ninth Circuit on two occasions, see A25, A27-A28,
A60-A61, A63 n.5, both correctly found that the City’s
franchise requirements are not narrowly tailored to its asserted
interests. Poles and conduit are owned not by cities, but by
telephone companies, electric utilities, and others,’ under

Commission Regarding the President's Regulatory Reform Program 16
(April 28, 1992).

'’ The narrow tailoring test requires that a law not “burden
substantially more speech than is necessary” to prevent the harms identified
by the Government. Ward, 491 U.S. at 800. This Court has made clear
that, under the First Amendment, the Government “must demonstrate that
the harms it recites are real and that its restriction will in fact alleviate
them to a material degree." Edenfield v. Fane, 113 S. Ct. 1792, 1800
(1993). This burden is not satisfied by “speculation or conjecture” or even
by weak evidence. /d. The law must serve the interest in a “direct and
effective” way. Ward, 491 U.S. at 800. If the restriction lacks a “close
and substantial relation to the governmental interests asserted,” it cannot
survive intermediate scrutiny. Edenfield, 113 S. Ct. at 1802.

'? Los Angeles claims that permitting a second cable company to lease
poles and conduit would effect “a Fifth Amendment taking of that
property.” Cross-Petition at 15. Los Angeles also argues that the poles
and conduit represent “nonpublic forums." /d. at 17-19. Both of these
arguments assume that the city owns utility poles and conduit. But the
properties are in fact privately owned by telephone companies and utilities.
See Pacific Gas & Elec. Co. v. Public Utilities Comm'n, 475 U.S. 1, 22-

a

17

terms regulated by the Pole Attachment Act of 1978, 47
U.S.C. § 224.”

For example, long distance telephone companies, like
AT&T, MCI, and Sprint, lease large quantities of pole and
conduit space from Bell Atlantic. So do ordinary businesses,
like retail chains that desire dedicated lines from one store to
another. Yet no municipal franchise is required to engage in
these activities. In fact, cable operators are the only potential
lessees of pole and conduit space who must secure a franchise
— a dramatically ill-fitting requirement if the franchise rules
are truly intended to conserve supposedly scarce pole and
conduit space.”!

Indeed, municipal governments are significant lessees of

23 n.1 (1986) (Marshall, J., concurring in the judgment); Consolidated
Edison Co. v. Public Service Comm'n, 447 U.S. 530, 534 n.1 (1980). In
addition, the Ninth Circuit explained below that, under California law,
public forum analysis does not help the City’s argument. A21-A28.

* Preferred Communications’ reference to pole attachment as a
“common carrier service” (Pet. at i) is a misdescription. Although
regulated to some extent by the 1978 Act, pole attachments are provided
pursuant to private contracts and are not “services” as that term is used in
public utility law. See FCC v. Florida Power Corp., 480 U.S. 245, 251-
52 & n.6 (1987); of. Southwestern Bell Tel. Co. v. FCC, Nos. 91-1416,
et al. (D.C. Cir. Apr. 5, 1994) (indicating that provision of “dark fiber”
— 4Le., provision of fiber optic lines without the necessary electronic
equipment to power the fiber — is not a common carrier service but could
be made available on a contractual rather than a common carrier basis).

* The fact that cable operators are singled out for the special burden
of a franchise requirement constitutes a form of speaker-specific
discrimination, which this Court has properly held triggers strict scrutiny
under the First Amendment and equal protection principles. See Buckley
v. Valeo, 424 U.S. 1, 18 (1976) (per curiam) (government may not
“discriminate among speakers or ideas"); Nat’! Bank of Boston v. Bellotti,
435 U.S. 765, 784-85 (1978) (“In the realm of protected speech, the
legislature is constitutionally disqualified from dictating . . . the speakers
who may address a public issue"); see also Police Dept. of Chicago v.
Mosley, 408 U.S. 92, 95 (1972).

18

pole and conduit space, as they increasingly provide cable
service of their own in competition with incumbent cable
companies — a trend that has been both approved by the
courts” and encouraged by Congress in the 1992 Cable Act,
which exempted local governments from having to comply
with their own franchise requirements.” All of this would
be rather curious if cities truly were, as Los Angeles says,
vitally concerned with “conserv[ing]" pole and conduit space
for "future uses,” Cross-Petition at 14, and if franchises were
the means by which municipalities achieved that end.
Therefore, Los Angeles cannot satisfy its burden under
the First Amendment of justifying its franchise restrictions.
But we fully agree with the City’s position that this Court
should accept certiorari and resolve the issue once and for all.

” See Warner Cable Communications, Inc. v. City of Niceville, 911
F.2d 634, 637-40 (11th Cir. 1990); Paragould Cablevision, Inc. v. City of
Paragould, 930 F.2d 1310, 1314-15 (8th Cir. 1990), cert. denied, 112 S.
Ct. 430 (1991).

® See § 7(c) of the 1992 Cable Act, 106 Stat. 1483, codified at 47
U.S.C. § 541(f).

eee

19

CONCLUSION
This Court should grant Preferred Communications’
petition for certiorari as well as the cross-petition filed by the
City of Los Angeles.

Respectfully submitted,

MARY McDERMOTT ' LAURENCE H. TRIBE
900 19th Street, N.W. Counsel of Record
Suite 800 JONATHAN S. MASSEY
Washington, D.C. 20006 1575 Massachusetts Avenue
(202) 326-7247 Cambridge, MA 02138
Counsel for United States (617) 495-4621

Telephone Association

JAMES R. YOUNG

JOHN THORNE

MICHAEL E. GLOVER

1710 H Street, N.W.
Washington, D.C. 20006
(202) 392-0895

Counsel for Bell Atlantic Corp.

May 18, 1994

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386005_1353%3A4. Public record. Not legal advice.