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Turner Broadcasting System v. Federal Communications Commission

Regulation Begins

As systems began to carry more and more stations, they began to set up subscriber "tiers." The lowest and least expensive tier usually offers subscribers a compliment of local broadcast stations plus a selection of specialty networks chosen by the cable system. For a higher monthly fee, the subscriber gets a larger and more diverse selection of cable stations.

In 1992, overriding the veto of President George Bush, Congress passed the Cable Television Consumer Protection and Competition Act of 1992. The act allowed the FCC to regulate the cable industry and set minimum technical standards for broadcast, prohibited an area from allowing cable franchise monopolies, imposed restrictions of programmers who are affiliated with cable operations, and required operators to carry a minimum number of local broadcast stations. This so-called "must-carry" provision required, for example, that a cable system with more than 12 channels and more than 300 subscribers, set aside up to one-third of the channel space for any local broadcast station that requested it. Any station that did not make an official request did not have to be considered and if more than the required number asked for space, the cable system could choose those stations that it wanted to air. Any station that it did choose to carry however, needed to be placed on the same numerical channel that they would be on if they were broadcasting. Similar rules were enacted regarding public television and educational broadcast channels.

This act was approved after three years of hearings during which Congress determined that the superior technical quality and financial strength of cable systems allowed the possibility that local stations were in danger of being economically ruined. Congress found that

most subscribers to cable television systems do not or cannot maintain antennas to receive broadcast television services, do not have input selector switches to convert from a cable to antenna reception system, or cannot otherwise receive broadcast television services . . . The result is undue market power for the cable operator as compared to that of consumers and video programmers.

Also at issue was advertising revenue. The more subscribers a system has, the higher their advertising rates. If everyone has cable and they are not carrying local channels, then advertisers have no motivation to advertise on those local channels which will put them out of business.

Very quickly, many cable programmers and operators filed suit in the U.S. District Court of the District of Columbia against the United States and the FCC on the grounds that the must-carry rules were a violation of the systems' free speech as stated in the First Amendment. In a summary judgement the systems lost. The Court found that these regulations kept competition in the industry balanced and that local broadcasters were realistically in danger of being run out of business. The Court's dissenting opinion was on the grounds that in telling the systems that they had to carry local stations, the government was potentially forcing the systems to broadcast stations with content that they did not support and would otherwise not carry. There was also the argument made that this act might work to the detriment of the local stations.

. . . because cable operators `now carry the vast majority of local stations' and thus, to the extent that the rules have any effect at all, `it will be only to replace the mix chosen by cablecasters--whose livelihoods depend largely on satisfying audience demand--with a mix derived from congressional dictate.

Cable operators felt the same way and lodged an appeal with the Federal Supreme Court. Justice Kennedy, writing for the majority who voted against the cable operators, agreed that cable systems were due some amount of First Amendment protection in light of their business of carrying speech. He admitted that

. . . the must carry rules regulate cable speech in two respects: the rules reduce the number of channels over which cable operators exercise unfettered control, and they render it more difficult for cable programmers to compete for carriage on the limited channels remaining. He went on to explain, however, that not every "interference" with free speech is contrary to the First Amendment.

The issue of content was at the heart of the Court's decision. The basic idea in the center of the First Amendment is that speech is free. One can choose to publish, broadcast or otherwise disseminate more or less whatever they choose as an individual. An entire government-regulated industry however can either print or not, broadcast or not. They can only discriminate due to content within very small parameters. "Laws that compel speakers to utter or distribute speech bearing a particular message are subject" to rigorous scrutiny whereas "regulations that are unrelated to the content of speech are subject to an intermediate level of scrutiny . . . because in most cases they pose a less substantial risk of excising certain ideas of viewpoints from the public dialogue."

The Court's first order of business then, became to determine whether the issues were based on content. As explained in the decision, laws can either be content-specific, such as those which ban individuals from handing out political statements too close to polling booths during elections although they would be free to hand out statements of other sorts, or content-neutral such as those prohibiting the posting of signs on public property regardless of what they say. Contrary to what cable operators thought, the court ruled that must-carry laws were content-neutral. "Nothing in the Act imposes a restriction, penalty, or burden by reason of the views, programs, or stations the cable operator has selected or will select. The number of channels a cable operator must set aside depends only on the operator's channel capacity." Likewise, the law says that every local channel has the opportunity to request to be carried, regardless of what the channel's message is or if it even has one.

The Court's findings went on to determine that "Congress' overriding objective in enacting must-carry was not to favor programming of a particular subject matter, viewpoint, or format, but rather to preserve access to free television programming for the 40 percent of Americans without cable." There was also the advertising revenue issue and in this too, the Court found that it would be too easy for cable operators to eliminate a major segment of their competition by simply not carrying local channels. The Court found that "the provisions are designed to guarantee the survival of a medium that has become a vital part of the Nation's communication system, and to ensure that every individual with a television set can obtain access to free television programming." It is important to note, that in his decision, Justice Kennedy noted that he did not feel that cable had been in the marketplace long enough to clearly judge the issue.

Additional topics

Law Library - American Law and Legal InformationNotable Trials and Court Cases - 1989 to 1994Turner Broadcasting System v. Federal Communications Commission - The History Of Cable Television, Regulation Begins, Back To District Court