1

07-5553-ag

Cablevision Systems Corporation v. FCC

1 UNITED STATES COURT OF APPEALS

2 FOR THE SECOND CIRCUIT

3

4 August Term 2007

5 (Argued: April 7, 2008 Decided: June 22, 2009)

6 Docket No. 07-5553-ag

7 -----------------------------------------------------x

8 CABLEVISION SYSTEMS CORPORATION,

9

10 Petitioner,

11

12 -- v. --

13

14 FEDERAL COMMUNICATIONS COMMISSION, UNITED STATES OF

15 AMERICA, 

16

17 Respondents,

18

19 WRNN LICENSE COMPANY, LLC,

20

21 Intervenor.

22

23 -----------------------------------------------------x

24

25 B e f o r e : WALKER, CABRANES, and RAGGI, Circuit Judges. 

26

27 Petition for review of an order of the Federal

28 Communications Commission directing petitioner Cablevision to

29 carry the signal of television station WRNN pursuant to 47 U.S.C.

30 § 534(a)-(b) & (h)(1)(C). Cablevision argues that the

31 Commission’s decision contravenes the text and purpose of the

32 statute, and that the statute, as applied, violated Cablevision’s

33 First and Fifth Amendment rights.

34 PETITION DENIED.
2

1 HENK BRANDS (Allan J. Arffa and J.

2 Adam Skaggs, on the brief), Paul,

3 Weiss, Rifkind, Wharton & Garrison

4 LLP, Washington, D.C., and Howard

5 J. Symons and Tara M. Corvo (on the

6 brief), Mintz, Levin, Cohn, Ferris,

7 Glovsky and Popeo, P.C.,

8 Washington, D.C., for Petitioner.

9

10 JACOB M. LEWIS (Matthew B. Berry,

11 Joseph R. Palmore, and Nicholas A.

12 Degani, Federal Communications

13 Commission, and Thomas O. Barnett,

14 John J. O’Connell, Jr., Catherine

15 G. O’Sullivan, and Robert J.

16 Wiggers, U. S. Department of

17 Justice, on the brief), Federal

18 Communications Commission,

19 Washington, D.C., for Respondent.

20

21 ANDREW G. MCBRIDE (Todd M.

22 Stansbury and William S. Consovoy,

23 on the brief), Wiley Rein LLP,

24 Washington, D.C., for Intervenor.

25

26 Jane E. Mago, Marsha J. MacBride,

27 and Erin L. Dozier (on the brief),

28 National Association of

29 Broadcasters, Washington, D.C., for

30 Amicus Curiae National Association

31 of Broadcasters.

32

33 JOHN M. WALKER, JR., Circuit Judge: 

34 The must-carry provisions of the Cable Television Consumer

35 Protection and Competition Act (“1992 Cable Act” or “Cable Act”)

36 require cable operators to transmit, over their cable systems,

37 the signals of certain broadcast stations operating in the same

38 market. The statute also gives the Federal Communications

39 Commission (“FCC” or “the Commission”) authority to modify a

40 given broadcast station’s market, thus potentially changing the

41 universe of cable operators required to carry that station. In
3

1 this case, Cablevision, a cable systems operator, petitions for

2 review of the FCC’s decision to include certain Long Island

3 communities in the market of WRNN, a station broadcasting from

4 upstate New York, and the resulting order directing Cablevision

5 to carry WRNN on its Long Island cable systems. Because we find

6 no constitutional or legal error in the FCC’s decision, we DENY

7 the petition.

8 BACKGROUND

9 I. The 1992 Cable Act and Its Must-Carry Provisions

10 The must-carry provisions of the 1992 Cable Act require

11 “cable operators,” such as Cablevision, to carry the signals of a

12 number of “local commercial television stations.” 47 U.S.C. §

13 534(a). The statute caps the number of such stations that a

14 cable operator must carry at “up to one-third of the aggregate

15 number of usable activated channels” on that operator’s system. 

16 Id. § 534(b)(1)(B). For our purposes, a “local commercial

17 television station” is a broadcast station (i.e., a station that

18 transmits its signal over the airwaves) that, “with respect to a

19 particular cable system, is within the same television market as

20 the cable system.” Id. § 534(h)(1)(A). 

21 A broadcast station’s market “shall be determined by the

22 Commission by regulation or order using, where available,

23 commercial publications which delineate television markets based

24 on viewing patterns.” Id. § 534(h)(1)(C)(i). Currently, the
4

1 Commission relies on the commercial publications of Nielsen Media

2 Research that divide the nation into a series of coterminous

3 geographic “Designated Market Areas” (“DMAs”) based on viewership

4 patterns. 47 C.F.R. § 76.55(e)(2). For example, the New York

5 City DMA contains not only the five boroughs of the city, but

6 also neighboring areas of Long Island, Connecticut, New Jersey,

7 and upstate New York, as well as limited areas of Pennsylvania,

8 because people in those areas, in the aggregate, watch the same

9 television channels.

10 The upshot of the must-carry provisions is that, in general,

11 each cable operator is required to carry the signal of every

12 broadcast station in its DMA, until it has dedicated “one-third

13 of the aggregate number of usable activated channels” on its

14 system to such channels. 47 U.S.C. § 534(b)(1)(B); see also id.

15 § 534(a)-(b), (h)(1)(C). Both Cablevision and WRNN are located

16 within the New York City DMA, and Cablevision currently has fewer

17 than one-third of its channels dedicated to must-carry stations.

18 The only relevant exception to this must-carry rule occurs

19 under the statute’s market modification provision. Pursuant to

20 this provision, the FCC may, on written request, add certain

21 communities to, or exclude certain communities from, a given

22 broadcast station’s market “to better effectuate the purposes” of

23 the statute. § 534(h)(1)(C)(i). If a given community is

24 excluded from a station’s market, cable operators in that

25 community are no longer required to carry that station. If a
5

1 given community is added, cable operators in that community must

2 commence carriage of that station’s signal unless they already

3 devote one-third of their channels to local broadcast stations. 

4 See id. 

5 In considering market modification requests, the statute

6 instructs the FCC to 

7 afford particular attention to the value of localism by

8 taking into account such factors as--

9 (I) whether the station, or other stations located in the

10 same area, have been historically carried on the cable

11 system or systems within such community; [the “historical

12 carriage factor”]

13 (II) whether the television station provides coverage or

14 other local service to such community; [the “local service

15 factor”]

16 (III) whether any other television station that is eligible

17 to be carried by a cable system in such community in

18 fulfillment of the requirements of this section provides

19 news coverage of issues of concern to such community or

20 provides carriage or coverage of sporting and other events

21 of interest to the community; [the “other stations factor”]

22 and 

23 (IV) evidence of viewing patterns in cable and noncable

24 households within the areas served by the cable system or

25 systems in such community [the “viewing patterns factor”]. 

26

27 47 U.S.C. § 534(h)(1)(C)(ii)(I)-(IV). The FCC’s interpretation

28 and application of this provision lies at the heart of this

29 dispute.

30 II. The Turner Litigation

31 Shortly after the passage of the 1992 Cable Act, several

32 cable operators mounted a First Amendment challenge to the

33 legislation by claiming that the statute, on its face,

34 impermissibly burdened the rights both of cable programmers, who

35 produce television shows exclusively for cable distribution
6

1 (e.g., HBO, TNT), and of cable operators, who actually transmit

2 the programming to consumers via coaxial cable (e.g.,

3 Cablevision). In Turner Broadcasting System, Inc. v. FCC

4 (“Turner I”), 512 U.S. 622 (1994), the Supreme Court held that

5 the statute’s requirements were content neutral, and therefore

6 subject to intermediate scrutiny. The Court’s majority opinion

7 announced that, at least in the abstract, the statute served

8 three “important,” interrelated interests articulated by Congress

9 in the statute’s findings: “(1) preserving the benefits of free,

10 over-the-air local broadcast television, (2) promoting the

11 widespread dissemination of information from a multiplicity of

12 sources, and (3) promoting fair competition in the market for

13 television programming.” Id. at 662. The majority, however,

14 concluded that “deficienc[ies]” in the record prevented it from

15 determining whether the statute was sufficiently tailored to

16 further those interests without substantially burdening protected

17 speech and remanded for further proceedings. Id. at 667-68.

18 Significantly, the majority noted that the district court

19 had not addressed whether the language of the market modification

20 provision, with its references to “the value of localism” and to

21 stations “provid[ing] news coverage of issues of concern to such

22 community,” altered the content-neutrality of the statute. Id.

23 at 643 n.6 (quoting 47 U.S.C. § 534(h)(1)(C)(ii)). The Court did

24 not address this point. Id. In a dissent joined by three other

25 justices, Justice O’Connor, relying in part on the language of
7

1 the market modification provision, wrote that the must-carry

2 regulation was content-based, and thus subject to strict

3 scrutiny, such that it could only be justified by a compelling

4 governmental interest and would have to be narrowly tailored to

5 achieve its intended purpose. Id. at 680.

6 In 1997, with a more fully developed record before it, the

7 Supreme Court held that “the must-carry provisions further

8 important governmental interests” and that the provisions did not

9 violate the First Amendment because they did “not burden

10 substantially more speech than necessary to further those

11 interests.” Turner Broad. Sys., Inc. v. FCC (“Turner II”), 520

12 U.S. 180, 185 (1997). None of the opinions in Turner II

13 specifically mentioned or cited the market modification

14 provision.

15 III. Market Modification Decisions in the New York City DMA 

16 In 1996, Cablevision petitioned the FCC to exclude a number

17 of communities from the markets of several local broadcast

18 stations, including WRNN, a station licensed in Kingston, New

19 York that transmitted its signal from Overlook Mountain in

20 Woodstock, New York. The FCC’s Cable Services Bureau (the

21 “Bureau”) granted Cablevision’s request in part and denied it in

22 part, excluding communities in Long Island’s Nassau and Suffolk

23 counties from WRNN’s market, but declining to exclude communities

24 elsewhere, such as New York’s Westchester County and
1 “Area of dominant influence” (“ADI”) is the pre-2001 1

2 equivalent of the term “Designated Market Area” (“DMA”).

8

1 Connecticut’s Fairfield County. Cablevision Sys. Corp. (“1996

2 CSB Order”), 11 F.C.C.R. 6453 (1996). In making both decisions,

3 the Bureau noted that, in the New York DMA, reliance on the four

4 enumerated factors alone would not allow it to “take into account

5 the particular difficulties faced by these stations in light of

6 the purposes of the carriage rule.” Id. at 6475 ¶ 50. 

7 Accordingly, the Bureau also considered the station’s “Grade B

8 contour,” i.e., the area within which viewers can receive its

9 broadcast signal over the air, and the “geography and terrain”

10 separating the target communities from the broadcasting station. 

11 Id. at 6480-81 ¶ 67. In 1997, the FCC affirmed the Bureau’s

12 decision, noting that

13 Grade B contour coverage, in the absence of other

14 determinative market facts (i.e. where the four statutory

15 factors by themselves define the market, where there is no

16 clear proof that the contour fails to reflect actual

17 coverage, or where there is a terrain obstacle such as a

18 mountain range or a significant body of water) is an

19 efficient tool to adjust market boundaries because it is a

20 sound indicator of the economic reach of a particular

21 television station’s signal. 

22

23 Market Modifications and the New York Area of Dominant Influence

24 (“1997 FCC Order”), 12 F.C.C.R. 12262, 12271 ¶ 17 (1997) 1

25 (footnote omitted).

26 When WRNN and several other stations petitioned for review,

27 this court endorsed the agency’s reliance on Grade B contour in

28 particular and factors not enumerated in the statute in general. 
9

1 We approved of the view that “the four factors [enumerated in the

2 statute] are not exclusive,” and we held that “[t]he FCC and the

3 Cable Services Bureau, experts in the area of regulation of the

4 television industry, carefully and properly analyzed the

5 particular facts of the various petitions under the four factors

6 listed in the statute and under non-statutory factors.” WLNY-TV,

7 Inc. v. FCC, 163 F.3d 137, 141-42 (2d Cir. 1998).

8 IV. The Current Proceedings

9 Subsequent to the outcome of the 1996-98 proceedings, WRNN

10 moved its transmitter to Beacon Mountain, New York, some 50 miles

11 closer to Manhattan, and commenced digital-only broadcast

12 operations. In 2005, it petitioned the FCC to add back some of

13 the communities in the New York City DMA in its market so that

14 Time Warner Cable, which served the relevant communities, would

15 have to carry WRNN on its system. Relying primarily on Grade B

16 contour and local programming, the FCC’s Media Bureau (the

17 successor to the Cable Services Bureau) granted WRNN’s request. 

18 WRNN License Co., 20 F.C.C.R. 7904, 7911 ¶¶ 15, 16 (2005). Time

19 Warner Cable did not appeal the decision to the full Commission. 

20 In 2006, relevant to the present review, WRNN petitioned for

21 re-inclusion of several communities, this time served by

22 Cablevision, in Long Island’s Nassau and Suffolk Counties. The

23 Bureau denied the request as to a number of the Suffolk County

24 communities based on WRNN’s failure to comply with “standardized

25 evidentiary requirements.” WRNN License Co. (“2006 Bureau
10

1 Order”), 21 F.C.C.R. 5952, 5956 ¶ 9 (2006). WRNN does not seek

2 review of the Bureau’s decision as to these communities. As to

3 the remaining Nassau and Suffolk communities, which we will refer

4 to as the “Long Island communities,” the Bureau noted that the

5 enumerated market modification factors did not offer strong

6 support for WRNN’s position. The parties vigorously disputed the

7 amount of Long Island-specific programming WRNN offered, and the

8 Bureau ultimately concluded that the local service factor weighed

9 against carriage. As to the historical carriage factor, the

10 Bureau found it insignificant that both cable systems in

11 neighboring communities and digital broadcast satellite operators

12 in the Long Island communities carried WRNN. It also accorded

13 little weight to the fact that Verizon was scheduled to begin

14 carrying WRNN on its FiOS system, which delivers television

15 programming to subscribers over fiber optic phone lines, thus

16 competing directly with cable television service. Nonetheless,

17 the Bureau granted WRNN’s request to include the remaining Long

18 Island communities, noting that Commission precedent “instructs

19 us to give little weight to the level of viewership [that]

20 station[s] like WRNN achieve” and to treat Grade B contour as a

21 “very relevant factor” when “the other [enumerated] factors would

22 not add significantly to the analysis of a station’s market.” 

23 Id. at 5957 ¶ 10. In the Bureau’s view, Grade B contour weighed

24 decisively in WRNN’s favor.
11

1 On appeal, the FCC affirmed the Bureau’s order. WRNN

2 License Co. (“2007 FCC Order”), 22 F.C.C.R. 21054 (2007). It

3 disagreed with the Bureau’s analysis of the local service and

4 historical carriage factors, finding that those factors lent

5 additional support to the Bureau’s decision to include the Long

6 Island communities in WRNN’s market. Id. at 21056 ¶ 4 & n.15. 

7 The FCC also rejected Cablevision’s claims that the Bureau’s

8 application of the market modification provision violated the

9 First Amendment and the takings clause of the Fifth Amendment. 

10 Id. at 21057-59 ¶¶ 7-10. Cablevision filed a timely petition for

11 review in this court. 

12 DISCUSSION

13 In general, we will overturn an agency decision “only if it

14 was ‘arbitrary, capricious, an abuse of discretion, or otherwise

15 not in accordance with law.’” Cellular Phone Taskforce v. FCC,

16 205 F.3d 82, 89 (2d Cir. 2000) (quoting 5 U.S.C. § 706(2)(A)). 

17 “An agency’s factual findings must be supported by substantial

18 evidence,” which means “such relevant evidence as a reasonable

19 mind might accept as adequate to support a conclusion.” Id.

20 (internal quotation marks omitted). We review an agency’s

21 disposition of constitutional issues de novo. See Rural Tel.

22 Coal. v. FCC, 838 F.2d 1307, 1313 (D.C. Cir. 1988). 

23 In its petition for review, Cablevision argues that the

24 FCC’s order improperly analyzed the statutory factors, that its
12

1 decision contravened the “purpose” of the must-carry statute, and

2 that requiring Cablevision to carry WRNN violates the First and

3 Fifth Amendments. We address each of these arguments in turn.

4 I. The FCC’s Analysis of the Section 534(h)(1)(C) Factors

5 A. The Local Service Factor 

6 Cablevision claims that the FCC failed to adequately explain

7 its finding that WRNN provided significant programming targeted

8 to the Long Island communities. By insisting, however, that “at

9 a minimum, the FCC was required to explain” why Cablevision’s

10 arguments and evidence to the contrary were “unpersuasive,”

11 Cablevision Br. at 35, Cablevision overstates an agency’s duty to

12 account for its actions.

13 An administrative agency has a duty to explain its ultimate

14 action. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto.

15 Ins. Co., 463 U.S. 29, 43 (1983) (“[T]he agency must examine the

16 relevant data and articulate a satisfactory explanation for its

17 action.”). However, it need not explain each and every step

18 leading to this decision; it is enough “if the agency’s path may

19 reasonably be discerned.” Id. at 43 (internal quotation marks

20 omitted). Here, the reason for the FCC’s decision to affirm the

21 Media Bureau’s order is perfectly clear: it agreed with the

22 reasoning of the Bureau in most respects and disagreed in certain

23 others, but only in ways that strengthened the validity of the

24 Bureau’s decision. In such circumstances, we will not require
13

1 the FCC to sift through each piece of evidence offered by a party

2 and explain why it is more or less compelling than the counter3 evidence put forth by an opponent.

4 The fact that we review agency fact-finding for “substantial

5 evidence” supports our conclusion that the FCC’s explanation was

6 adequate. To determine whether substantial evidence supports a

7 finding, we need ask only whether “a reasonable mind might accept

8 [it] as adequate” support. Cellular Phone Taskforce, 205 F.3d at

9 89 (internal quotation marks omitted). Here, the agency found

10 WRNN’s evidence that it had significant Long Island-targeted

11 programming to be more persuasive than Cablevision’s evidence to

12 the contrary. We need not know the agency’s precise rationale in

13 order to conclude that it was reasonable for the agency to so

14 find. While such an explanation might have aided our

15 reasonableness inquiry, it is not indispensable. 

16 Both sides offered evidence regarding WRNN’s programming

17 content. According to Cablevision, its evidence showed that WRNN

18 broadcast less than an hour of programming covering “Long Island

19 issues” in a “representative week.” Cablevision Br. at 33. WRNN

20 pointed to evidence that it had aired over 4000 Long Island21 related items between June and November 2005. It would be

22 reasonable for the agency to resolve this conflicting evidence in

23 favor of WRNN and to conclude (as it obviously did) that

24 Cablevision failed to include some programming that should
14

1 properly be considered as local to Long Island, or that its

2 sample week was not actually representative. Thus, substantial

3 evidence supports the FCC’s finding on this factor.

4 We note that the Bureau, on its initial consideration of

5 this petition, made a contrary finding as to this factor. This

6 fact, however, does not alter our assessment of the FCC’s

7 ultimate determination. “An agency conclusion may be supported

8 by substantial evidence even though a plausible alternative

9 interpretation of the evidence would support a contrary view.” 

10 Robinson v. Nat’l Transp. Safety Bd., 28 F.3d 210, 215 (D.C. Cir.

11 1994) (internal quotation marks omitted). On questions of fact,

12 our task on review is not to “displace [the agency’s final]

13 choice between two fairly conflicting views.” Universal Camera

14 Corp. v. NLRB, 340 U.S. 474, 488 (1951). 

15 B. The Historical Carriage Factor

16 After the Bureau issued its 2006 Order, but before the FCC

17 affirmed it, Verizon began carrying WRNN on its FiOS system to

18 areas of Nassau and Suffolk Counties. 2007 FCC Order, 22

19 F.C.C.R. at 21056 ¶ 4 & n.15. The FCC concluded that this

20 “overlapping carriage provides support for WRNN-DT with respect

21 to the historic carriage factor.” Id. at ¶ 4 n.15. In a single

22 paragraph in its brief, Cablevision argues that this analysis is

23 “contrary to clear statutory language” because “[c]arriage

24 initiated in the past few months does not constitute historical
15

1 carriage.” Cablevision Br. at 36-37.

2 Cablevision, however, fails to supply a contrary, “correct”

3 definition of “historically carried,” and does not discuss

4 whether we should defer to the Bureau’s interpretation of the

5 term, in accordance with Chevron U.S.A., Inc. v. Natural

6 Resources Defense Council, Inc., 467 U.S. 837 (1984), as we did

7 with the must-carry statute generally in WLNY-TV, Inc. v. FCC,

8 163 F.3d at 142. Even if Cablevision could demonstrate error in

9 the sense that the Verizon carriage was not “historical,” they

10 have failed to show why such error would warrant vacatur given

11 that (1) Cablevision does not contest the propriety of

12 considering Verizon’s carriage as an unenumerated, non-statutory

13 factor, and (2) the Bureau decided to order carriage despite its

14 belief that WRNN had not been “historically carried” in the

15 relevant communities. Accordingly, we decline to vacate the

16 FCC’s order based on this asserted error in the FCC’s analysis of

17 the historical carriage factor.

18 C. Grade B Contour 

19 In its 1997 FCC Order involving Cablevision and WRNN, the

20 Commission stated that “Grade B contour coverage, in the absence

21 of other determinative market facts (i.e.[,] . . . a terrain

22 obstacle such as a mountain range or a significant body of

23 water), is an efficient tool to adjust market boundaries.” 1997

24 FCC Order, 12 F.C.C.R. at 12271 ¶ 17. Cablevision contends that
16

1 the Hudson River, the Long Island Sound, and the “skyline of New

2 York City” constitute such terrain obstacles, and it was

3 therefore inconsistent with the 1997 FCC Order for the FCC and

4 the Bureau to weigh Grade B contour in WRNN’s favor here. 

5 Cablevision Br. at 38. The 1997 FCC Order itself forcefully

6 rejects this reasoning, because it explicitly endorses the use of

7 Grade B contour as proof of market in the New York City DMA–the

8 same context in which Cablevision now contends that relying on

9 Grade B contour is inappropriate. Because the 1997 FCC Order

10 establishes, rather than refutes, the relevance of Grade B

11 contour in market modifications within the New York City DMA, the

12 FCC’s decision here is consistent with its precedent.

13 D. The Other Stations and Viewing Patterns Factors

14 Cablevision also alleges error in the FCC’s treatment of the

15 two remaining statutory factors. In the instant order, the FCC

16 stated that Congress did not intend “the ‘coverage by other

17 qualified stations’ factor to bar a request for extending a

18 station’s market when other stations could be shown to serve the

19 communities at issue.” 2007 FCC Order, 22 F.C.C.R. at 21055-56 ¶

20 4.

21 In essence, then, the FCC decided to give the factor

22 significant weight when a lack of coverage by other stations

23 favored including a community in a station’s market, but to

24 discount its importance when the existence of coverage arguably
17

1 cut against inclusion. Cablevision argues that this decision “is

2 directly contrary to . . . the statutory text.” Cablevision Br.

3 at 40. This argument is unavailing. The text of the statute

4 directs the agency to consider a number of factors, and it is

5 clear from the opinion that both the FCC and the Bureau did

6 consider this factor. Upon doing so, the FCC saw no reason to

7 depart from its normal policy, which is to discount the “other

8 stations’ coverage” factor when it tends to cut against

9 inclusion. Unsurprisingly, Cablevision cites no decision of this

10 court vacating a decision because we disagree with an agency’s

11 weighing of a statutory factor. The law is to the contrary. In

12 interpreting another provision of the 1992 Cable Act that directs

13 the FCC to undertake a factoral analysis, the D.C. Circuit

14 concluded that giving little or no weight to a statutory factor,

15 as long as the factor is expressly considered, does not violate

16 the statute:

17 [T]he statute by its terms merely requires the Commission to

18 consider the . . . factors . . . . That means only that it

19 must reach an express and considered conclusion about the

20 bearing of a factor, but is not required to give any

21 specific weight to it. Therefore, when the Commission,

22 after expressly considering the potential role of the . . .

23 factor, ultimately concluded that it should not be given any

24 weight, it did not violate the statute. 

25

26 Time Warner Entm’t Co. v. FCC, 56 F.3d 151, 175 (D.C. Cir. 1995)

27 (internal quotation marks and citations omitted). This sound

28 reasoning is equally applicable here. 

29 Cablevision also argues that the FCC improperly weighed the
18

1 evidence with respect to the viewership patterns factor. This

2 argument fails for the same reasons. 

3 II. The FCC’s Consideration of the Purposes of the Must-Carry

4 Statute

5 The market modification provision of the must-carry statute

6 provides that the FCC may add or remove communities from a local

7 broadcast station’s market “to better effectuate the purposes of

8 this section.” 47 U.S.C. § 534(h)(1)(C)(i). Cablevision argues

9 that the FCC’s inclusion of the Long Island communities in WRNN’s

10 market contravened the purposes of must-carry in two ways. 

11 First, expanding WRNN’s market in fact frustrates the goal of

12 “localism” by necessarily decreasing programming relevant to the

13 community WRNN has traditionally served (the Kingston community). 

14 And second, rewarding WRNN’s actions with broader must-carry

15 rights encourages gamesmanship which frustrates the purpose of

16 must-carry, which is to preserve, but not expand, a broadcast

17 station’s market. We reject the first argument because it

18 incorrectly presumes that WRNN cannot increase Long Island19 targeted programming without decreasing Kingston-targeted

20 programming. We reject the second because it rests on a

21 conception of the statute’s purpose that is overly narrow,

22 unsupported by precedent, and contrary to the language of the

23 statute.
19

1 According to Cablevision, the FCC’s decision defeats the

2 purposes of the must-carry statute because “[a]ny targeting of

3 other spokes [i.e., communities that are remote from ‘a DMA’s

4 metropolitan center’] necessarily comes at the expense of the

5 station’s community of license.” Cablevision Br. at 43. This

6 argument rests on the false premise that WRNN’s programming

7 consists entirely of either Kingston-specific programming or Long

8 Island-specific programming. As Cablevision reminds us

9 elsewhere, however, a great deal of WRNN’s content is “home10 shopping” programming that targets neither Kingston nor Long

11 Island specifically. See Cablevision Br. at 33 (claiming that

12 78% of WRNN programming in a representative week “consisted of

13 home shopping and infomercials”). It is entirely possible, and

14 Cablevision does not suggest otherwise, that WRNN could increase

15 its Long Island-targeted programming by decreasing its home16 shopping programming, leaving its Kingston-targeted programming

17 unaffected. And to the extent that a Kingston viewer might

18 prefer certain home-shopping programming to programming

19 concerning Long Island, we do not see how frustrating that

20 preference undermines localism.

21 Essentially, Cablevision’s claim is that, as a matter of

22 law, a cable company in a community that is outside a “DMA’s

23 metropolitan center,” such as Long Island, should not be required
20

1 to carry a station based in a different community that is also

2 remote from the center, such as Kingston: in Cablevision’s

3 parlance, a “spoke” cable company should not be required to carry

4 a station based in a different spoke. Congress, however, did not

5 share that view, and, as the FCC points out, the default rule is

6 that WRNN must be carried by cable operators throughout the New

7 York City DMA. See 47 U.S.C. § 534(a)-(b), (h)(1)(C).

8 Cablevision also contends that the FCC’s decision rewards

9 “gamesmanship” because WRNN moved its transmitter and changed its

10 programming simply to obtain must-carry privileges in other

11 communities. Cablevision Br. at 46. In other words, they

12 suggest that the FCC cannot award WRNN a regulatory benefit if

13 WRNN has changed its conduct in an attempt to receive that

14 benefit. This rule, applied universally, would run counter to a

15 central premise of the regulatory scheme that a regulated entity

16 will change its conduct in socially desirable ways to achieve a

17 regulatory benefit. Accordingly, we reject it.

18 Cablevision also argues that any decision that increases a

19 station’s market is contrary to the purpose of the statute,

20 because the purpose is “to return broadcasters to their ‘natural

21 market,’” Cablevision Br. at 47; thus, any FCC action which

22 augments a broadcaster’s market contravenes this purpose. The

23 purpose of the statute, however, is not to “preserve” a group of

24 broadcast stations, or a particular conception of a station’s
21

1 market, but, inter alia, to “preserv[e] the benefits of free,

2 over-the-air television,” and “promot[e] the widespread

3 dissemination of information from a multiplicity of sources.” 

4 Turner I, 512 U.S. at 662. We do not think that these purposes

5 are served only by granting broadcasters the minimum must-carry

6 coverage necessary for survival; or that these purposes are

7 frustrated by actions which result in a station’s greater

8 prosperity. Accordingly, we conclude that the FCC did not

9 violate the statutory admonition that market modifications should

10 be made “to better effectuate the purposes of this section.” 47

11 U.S.C. § 534(h)(1)(C)(i). The remainder of Cablevision’s

12 arguments on this point fail to persuade us otherwise. 

13 III. Cablevision’s First Amendment Challenge

14 Cablevision argues that “compelled carriage of WRNN on Long

15 Island violates the First Amendment on an as-applied basis.” 

16 Cablevision Br. at 51. We think that the Turner cases do not

17 foreclose the possibility of a successful as-applied First

18 Amendment challenge to the 1992 Cable Act’s market modification

19 provisions. In this case, however, Cablevision has failed to

20 demonstrate that the FCC applied the market modification

21 provision unconstitutionally. 

22 As a threshold matter, a party alleging violation of its

23 First Amendment rights must show that the challenged government

24 action actually regulates protected speech. Thus, in Turner I,
22

1 the Court found it necessary to establish, as an “initial

2 premise,” that “[c]able programmers and cable operators engage in

3 and transmit speech,” and that “the must-carry rules,” in

4 general, “regulate cable speech.” 512 U.S. at 636. Similarly,

5 Cablevision here must articulate how the FCC’s order “interferes

6 with [its] speech rights.” Time Warner Entm’t Co., 240 F.3d at

7 1129.

8 This threshold requirement serves two interrelated

9 functions. Identifying the “burden” imposed by government action

10 enables a court to undertake heightened scrutiny analysis:

11 without understanding how a regulation burdens speech, a court

12 cannot decide whether that burden is “no greater than is

13 essential” to further the goals of the regulation in question. 

14 See United States v. O’Brien, 391 U.S. 367, 377 (1968). And the

15 failure to identify the burden has an even more fundamental

16 consequence: without a plausible allegation that the offensive

17 conduct interferes with First Amendment rights or, put

18 differently, that the interaction between government and citizen

19 “bring[s] into play the First Amendment,” id. at 376, a reviewing

20 court has neither a reason nor the ability to subject the conduct

21 of the governmental actor to heightened scrutiny. 

22 The Turner I and Turner II Courts considered the First

23 Amendment implications of the “must-carry provisions” taken as a

24 whole, as distinguished from the market modification provisions
23

1 at issue here, and found that they posed two potential burdens on

2 speech rights:

3 First, the [must-carry] provisions restrain cable operators’

4 editorial discretion in creating programming packages by

5 reducing the number of cable channels over which they

6 exercise unfettered control. Second, the rules render it

7 more difficult for cable programmers to compete for carriage

8 on the limited channels remaining. 

9 Turner II, 520 U.S. at 214 (citation, alterations, and internal

10 quotation marks omitted); accord Turner I, 512 U.S. at 637. 

11 Cablevision raises a similar, but not identical, First

12 Amendment challenge to that raised in Turner I and Turner II. 

13 Cablevision presents an as-applied First Amendment challenge to

14 the FCC’s order modifying the market of WRNN, pursuant to the

15 provision of the must-carry statute on market determinations, 47

16 U.S.C. § 534(h)(1)(C)(ii). The challenged order threatens the

17 First Amendment interest of Cablevision in a similar manner to

18 that described in Turner I and Turner II. The order reduces the

19 number of channels over which Cablevision exercises editorial

20 control by forcing it to carry WRNN, see Turner II, 520 U.S. at

21 213, and it also makes it more difficult for the cable

22 programming arm of Cablevision to compete for carriage on the

23 remaining channels, id.

24 In order to apply the appropriate level of scrutiny, we must

25 first determine whether the order is content based or content

26 neutral. Turner I, 512 U.S. at 642. In Turner I, the Court

27 concluded that the burdens imposed on cable operators as well as
24

1 the benefits conferred on broadcast channels were content

2 neutral. See id. at 643-44 (“Although the provisions interfere

3 with cable operators’ editorial discretion by compelling them to

4 offer carriage to a certain minimum number of broadcast stations,

5 the extent of the interference does not depend upon the content

6 of the cable operators’ programming. The rules impose

7 obligations upon all operators, save those with fewer than 300

8 subscribers, regardless of the programs or stations they now

9 offer or have offered in the past.”); id. at 645 (noting that the

10 selection of broadcast channels that must be carried on the cable

11 systems was “also unrelated to content”).

12 The Turner I Court explicitly rejected the argument that

13 “the must-carry regulations are content based because Congress’

14 purpose in enacting them was to promote speech of a favored

15 content.” Id. at 646. Indeed, as the Court noted, when a cable

16 system is required to “make room for a broadcast station, nothing

17 would stop a cable operator from displacing a cable station that

18 provides all local- or education-oriented programming with a

19 broadcaster that provides very little.” Id. at 648. However,

20 separate from the must-carry provisions’ general requirements,

21 the Turner I Court expressly declined to decide whether a market

22 modification order motivated by a concern for localism would be

23 content based or content neutral. See id. at 644 n.6. The Court

24 suggested that such an order might confer “special benefits on

25 the basis of content.” Id.
25

1 However, we think the order before us now is content

2 neutral. WRNN’s presumptive DMA would have included Nassau and

3 Suffolk counties. It was Cablevision that first invoked the

4 market modification provision to exclude these counties from

5 WRNN’s market. It succeeded based on the FCC’s concern, in part,

6 that WRNN lacked a Grade B contour reaching Long Island. When

7 WRNN, after expanding its Grade B contour, returned to the FCC

8 seeking restoration of its presumptive DMA, Cablevision argued

9 that the station had failed to demonstrate that the various

10 factors outlined in the market modification provision, including

11 the local programming factor, weighed in WRNN’s favor. The

12 Bureau and the FCC reached different conclusions on this factor,

13 yet both agreed that the totality of circumstances no longer

14 justified excluding Long Island communities from WRNN’s

15 presumptive DMA. The FCC considered the amount of local

16 programming provided by WRNN only in this context, i.e., in

17 assessing the continued need to restrict a presumptive market

18 defined solely by geography. Moreover, WRNN’s local programming

19 was an inconsequential factor in the FCC’s ultimate decision. 

20 Additionally, Cablevision has not alleged, much less proven, that

21 the restoration of the Long Island communities to WRNN’s market

22 under these circumstances was based on some illicit content-based

23 motive. See id. at 652. We conclude, therefore, that the order

24 is content neutral and deserving of intermediate scrutiny.
26

1 We have no trouble in concluding that the order “advances

2 important governmental interests unrelated to the suppression of

3 free speech and does not burden substantially more speech than

4 necessary to further these interests.” Turner II, 520 U.S. at

5 189 (citing O’Brien, 391 U.S. at 377). The burden imposed by the

6 order - the loss of control over one channel - is no greater than

7 necessary to further the government’s interest in preserving a

8 single broadcast channel it found serves the local community.

9 In sum, we conclude that the application of the market

10 modification provision in this case does not violate the First

11 Amendment. While we cannot rule out the possibility that the

12 FCC’s order might interfere with speech rights in other ways,

13 Cablevision has presented neither factual support nor even a

14 theory of any such additional infringement.

15 IV. Cablevision’s Fifth Amendment Challenge

16 Finally, Cablevision asserts that by ordering it to carry

17 WRNN, the FCC effected a per se taking under Loretto v.

18 Telepromter Manhattan CATV Corp., 458 U.S. 419, 426 (1982). The

19 sine qua non of the takings analysis in Loretto, however, is

20 “permanent physical occupation.” Id. (emphasis added). This per

21 se takings rule is “very narrow,” id. at 441, and its touchstone

22 is “required acquiescence” to the occupation of the property by

23 an uninvited stranger or an “interloper with a government

24 license.” FCC v. Fla. Power Corp., 480 U.S. 245, 252-53 (1987);
27

1 see also Buffalo Teachers Fed’n v. Tobe, 464 F.3d 362, 374 (2d

2 Cir. 2006) (“Physical takings (or physical invasion or

3 appropriation cases) occur when the government physically takes

4 possession of an interest in property for some public purpose.”). 

5 Our own test for whether a regulation constitutes a permanent

6 physical occupation, set forth in Southview Associates, Ltd. v.

7 Bongartz, 980 F.2d 85 (2d Cir. 1992), looks to (1) the permanency

8 of the invasion, and (2) whether the invasion is an “absolute,

9 exclusive physical occupation.” Id. at 94-95. In turn, we must

10 examine the nature of the interference with “the bundle of rights

11 that constitute ownership,” id. at 95, such as the right to

12 possess and exclude, the right to control the use of the

13 property, and the right to sell the property.

14 The initial determination - whether the invasion is physical

15 - is primarily factual. Cf. John R. Sand & Gravel Co. v. United

16 States, 457 F.3d 1345, 1357 (Fed. Cir. 2006) (“[T]he

17 determination of whether government occupancy is ‘permanent’ is

18 highly fact-specific.”). The fact finder must determine, in the

19 first instance, whether any physical assets are involved. See,

20 e.g., Qwest Corp. v. United States, 48 Fed. Cl. 672, 689 (2001)

21 (“In determining whether plaintiff's property has been subject to

22 a physical taking, our initial inquiry must focus on the nature

23 of the property at issue. What are the physical assets

24 involved?”). The FCC found that the transmission of WRNN over
28

1 the Cablevision system did not require installation of any

2 equipment at Cablevision’s facilities. “Rather, a programming

3 stream is transmitted in bits of data over cable bandwidth

4 through electrons or photons at the speed of light.” 2007 FCC

5 Order, 22 F.C.C.R. at 21058 ¶ 8. It further found that

6 Cablevision “retains complete control over its property.” Id. 

7 We see no reason to disturb these findings or the conclusion that

8 the transmission of WRNN’s signal does not involve a physical

9 occupation of Cablevision’s equipment or property. And

10 Cablevision effectively conceded that this physicality is absent

11 here when it argued in its reply brief that “[t]he result [under

12 Loretto] should be no different when the occupation is not of a

13 physical pipeline but of an electronic one.” Cablevision Reply

14 Br. at 25.

15 The amorphous nature of the alleged “taking” suggests that

16 the takings claim here fits more comfortably within the Supreme

17 Court’s “regulatory taking” analytical framework. See Penn.

18 Cent. Trans. Co. v. City of New York, 438 U.S. 104 (1978). In

19 order to establish a regulatory taking, Cablevision was required

20 to show that the regulation had an economic impact that

21 interfered with “distinct investment-backed expectations.” Id. 

22 at 124. Cablevision has presented no such evidence despite its

23 “heavy burden” on this issue, Tobe, 464 F.3d at 375, and any

24 regulatory taking theory must therefore fail.
29

1 CONCLUSION

2 Because we find no abuse of discretion or constitutional

3 violation in the FCC’s decision to include the relevant Long

4 Island communities in WRNN’s market for must-carry purposes, we

5 DENY the petition for review. In accordance with our order of

6 March 14, 2008, the stay of the FCC order pending judicial review

7 is vacated, and the applicable deadline for Cablevision’s

8 compliance is one week from the issuance of the mandate in this

9 case.