Wednesday, February 24, 2010

Will the Supreme Court Decide "Must-Carry" Must Go?

Under the Cable Act of 1992, when certain TV broadcasters want their programming carried on cable networks serving the same geographical area, they can invoke federal communications law to force cable operators to carry their programming. These "must-carry" requirements are a relic of 90s-era claimed cable "bottlenecks." And they're a forced-speech mandate of dubious constitutionality. Must-carry makes no sense in the dynamic video marketplace of 2010, and it runs contrary to a clear and consistent application of First Amendment protections against forced speech mandates. Now the U.S. Supreme Court could finally lay must-carry to rest.

Late last month Cablevision filed a petition with the Supreme Court, seeking review of the U.S. Court of Appeals for the 2nd Circuit’s June, 2009 decision upholding the "must-carry" statute as well as the Federal Communications Commission's application of the statute to Cablevision. Cablevision v. FCC stems from an FCC ruling that Cablevision must carry the signal of a home-shopping station on Cablevision’s Long Island cable systems. In addition to its claims that the existing case law does not support the FCC’s ruling and that the FCC misapplied the statute, Cablevision has asked the Court to reconsider and overrule its prior Turner I and II decisions from the mid-1990s (barely) upholding the must-carry statute.

It is important that the Supreme Court agree to hear this case. As an initial matter, it would be extremely unfortunate for the Court to let stand the FCC's improper expansion of the must-carry regulatory regime. Whatever its merits or demerits, the must-carry statute was intended to protect free, local, over-the-air TV broadcasting. But WRNN, the broadcast TV station at issue in Cablevision v. FCC, is licensed to a community 195 miles away from the cable systems on which it demanded carriage. The station primarily offers home-shopping programming content, and has no over-the-air viewership. One can excuse the 2nd Circuit for not proclaiming that the Supreme Court's rulings in Turner I and II are no longer good law. But surely the 2nd Circuit got the law wrong by upholding the FCC's expansion of must-carry mandates beyond the statute's narrower confines.

More important still, the Supreme Court should agree to answer the big question posed by Cablevision v. FCC: "Whether the imposition of must-carry obligations is consistent with the Constitution now that the facts undergirding the Turner decisions have evaporated with the emergence of vibrant competition and other dramatic market and technological changes."

The current state of video competition renders the 1990s rationale for must-carry obsolete. Only a person who has spent the last decade or so living deep inside a cave with no video reception capabilities whatsoever could be excused for not understanding that the video marketplace has undergone drastic change since the 1990s. Significantly, direct broadcast satellite has proven a strong source of competition with cable. The U.S. Court of Appeals for the District of Columbia Circuit recently acknowledged this in its August, 2009 decision in Comcast v. FCC, striking down the FCC's cable subscribership caps. As I related in a prior blog post ("D.C. Circuit: Vindicating Video Competition"), that court expressly recognized the increasingly competitive and dynamic marketplace for video:

[T]he record is replete with evidence of ever increasing competition among video providers: Satellite and fiber optic video providers have entered the market and grown in market share since the Congress passed the 1992 Act, and particularly in recent years. Cable operators, therefore, no longer have the bottleneck power over programming that concerned the Congress in 1992. Second, over the same period there has been a dramatic increase both in the number of cable networks and in the programming available to subscribers.

In fact, the D.C. Circuit observed that "satellite television companies, which were bit players in the early '90s, now serve one-third of all subscribers." DBS subscribership growth over the last decade marks a dramatic change in the competitive video marketplace.

Moreover, cable operators also face growing competition from telecommunications providers offering new video services. Two large telco providers have spent the last few years rolling out IPTV services to challenge cable incumbents. AT&T, for instance, surpassed 2 million subscribers to its U-verse TV service in 2009. Verizon's FiOS service competes directly against cable incumbents in several markets, including Cablevision.

Because must-carry rules were justified in the 1992 Act and in the Turner decisions largely by the presence of a cable "bottleneck" (and the threat it posed to free, local over-the-air broadcast TV), the dramatic changes witnessed in video market conditions is highly significant for First Amendment purposes. With the claimed bottleneck rational rendered obsolete, the Turner decisions' application of intermediate-level scrutiny to the must-carry statute is thoroughly unsupportable.

Four of the nine Justices on the Supreme Court when Turner I & II were decided disagreed with the intermediate scrutiny that was applied to the must-carry statute. They would have subjected must-carry to strict scrutiny, requiring a compelling governmental interest and a narrow tailoring to uphold such a forced-speech mandate. And the Turner I & II majorities and concurrences conceded that factual conditions might require a scrutiny level reevaluation at a future time. That future time is now here, and the Supreme Court can build off of its own warnings against favoring or disfavoring different forms of speech media technologies in Citizens United v. FEC by extending strict scrutiny to must-carry mandates. (I discuss Citizens United's implications for future free speech cases in my FSF Perspectives piece, "What Citizens United Mean for Free Speech in the Digital Age.")

Many of the above considerations were well-summarized by FSF President Randolph May in his recent law review article Charting a New Constitutional Jurisprudence for the Digital Age. As predicted in that law review article, the Supreme Court passed up its earlier opportunity in last year's FCC v. Fox Television Stations to acknowledge the recent developments in the dynamic video marketplace, instead issuing a ruling on other grounds. (See the blog post "Constitutional Reckoning Still to Come.")

But the stage is set again in Cablevision v. FCC for the Court to acknowledge those developments. Hopefully, the Court will agree to take the case and make clear that the First Amendment's free speech protections consistently and evenly extend to electronic media.