Source: http://www.techlawjournal.com/alert/2009/04/28.asp
Timestamp: 2019-04-20 14:11:09+00:00

Document:
TLJ Daily E-Mail Alert No. 1,932, April 28, 2009.
April 28, 2009, Alert No. 1,932.
4/28. The Supreme Court issued its divided opinion [72 pages in PDF] in FCC v. Fox., reversing the judgment of the U.S. Court of Appeals (2ndCir). This is a broadcast profanity case involving the Federal Communications Commission's (FCC) regulation of fleeting expletives.
The FCC issued an order that fined broadcasters for fleeting expletives. The Court of Appeals vacated and remanded, on the grounds that the FCC's new fleeting expletives policy is arbitrary and capricious under the Administrative Procedure Act (APA) for failing to articulate a reasoned basis for the change in policy. The Supreme Court reversed, by a 5-4 split, on the basis APA does not preclude unexplained shifts of long standing policy.
Notably, neither court issued a holding as whether the FCC's policy or order violate the First Amendment. Although, the Court of Appeals majority wrote that "we are skeptical that the Commission can provide a reasoned explanation for its ``fleeting expletive´´ regime that would pass constitutional muster". Also, while the Supreme Court majority decided not to decide the constitutional issue, it appears that in a future case the majority would find the FCC's fleeting expletives policy, if not its entire broadcast speech regulatory regime, is unconstitutional.
The FCC's fleeting expletives policy has won a fleeting reprieve. The case is remanded to the Court of Appeals. It may now take up the constitutional issue, and vacate the FCC order on First Amendment grounds. The Court of Appeals cannot, however, overturn the Supreme Court precedent relied upon by the FCC.
Background. 18 U.S.C. § 1464 provides in full that "Whoever utters any obscene, indecent, or profane language by means of radio communication shall be fined under this title or imprisoned not more than two years, or both."
In 1978, the Supreme Court issued its opinion in FCC v. Pacifica Foundation, 438 U.S. 726, upholding the FCC's order penalizing the broadcast of a dirty words monologue by a comedian, George Carlin.
The Supreme Court wrote that "We have long recognized that each medium of expression presents special First Amendment problems. ... And of all forms of communication, it is broadcasting that has received the most limited First Amendment protection. Thus, although other speakers cannot be licensed except under laws that carefully define and narrow official discretion, a broadcaster may be deprived of his license and his forum if the Commission decides that such an action would serve ``the public interest, convenience, and necessity.´´"
The Supreme Court has offered various rationales for heightened regulation of broadcast speech, including scarcity of spectrum (see for example, 1969 opinion in Red Lion v. FCC, 395 U.S. 367), and pervasiveness of broadcast media (Pacifica). In Pacifica, the Supreme Court cited the rationale that "the broadcast media have established a uniquely pervasive presence in the lives of all Americans".
FCC Order. On November 6, 2006, the FCC adopted and released an Order [36 pages in PDF] regarding complaints that four broadcast television programs contained indecent and/or profane material within the meaning of § 1464. This order is FCC 06-166.
Court of Appeals. Fox, CBS, and ABC filed petitions for review of the FCC's order.
On June 4, 2007, the U.S. Court of Appeals (2ndCir) issued its divided opinion [53 pages in PDF] finding that "the FCC's new policy sanctioning ``fleeting expletives´´ is arbitrary and capricious under the Administrative Procedure Act for failing to articulate a reasoned basis for its change in policy. Accordingly, the petition for review is GRANTED, the order of the FCC is VACATED, and the matter is REMANDED to the agency for further proceedings consistent with this opinion."
The Court, relying on precedent from the 2nd Circuit and the DC Circuit, wrote that the FCC violated the APA by changing its policy, without offering an explanation for the change.
The Court of Appeals did not decide any of the Constitutional issues. However, it wrote in extensive dicta that "we are skeptical that the Commission can provide a reasoned explanation for its ``fleeting expletive´´ regime that would pass constitutional muster".
The Court wrote, in dicta, that "Whatever merit these arguments may have, they cannot sway us in light of Supreme Court precedent. ... Nevertheless, we would be remiss not to observe that it is increasingly difficult to describe the broadcast media as uniquely pervasive and uniquely accessible to children, and at some point in the future, strict scrutiny may properly apply in the context of regulating broadcast television."
It added that "The proliferation of satellite and cable television channels -- not to mention internet-based video outlets -- has begun to erode the ``uniqueness´´ of broadcast media, while at the same time, blocking technologies such as the V-chip have empowered viewers to make their own choices about what they do, and do not, want to see on television."
It concluded that "technological advances may obviate the constitutional legitimacy of the FCC’s robust oversight."
See also, story titled "2nd Circuit Vacates and Remands FCC Profanity Order" in TLJ Daily E-Mail Alert No. 1,590, June 4, 2007.
The majority ruled solely on the APA issue. Scalia wrote, "We decline to address the constitutional questions at this time."
Scalia wrote that the APA "sets forth the full extent of judicial authority to review executive agency action for procedural correctness". He continued that previous Supreme Court opinions have made clear that a court is not to substitute its judgment for that of the agency.
Scalia noted that the 2nd Circuit "relied in part on Circuit precedent requiring a more substantial explanation for agency action that changes prior policy." These cases were New York Council, Assn. of Civilian Technicians v. FLRA, 757 F. 2d 502, and NAACP v. FCC, 682 F. 2d 993 (1982).
He concluded, "We find no basis in the Administrative Procedure Act or in our opinions for a requirement that all agency change be subjected to more searching review. The Act mentions no such heightened standard."
He elaborated, "And of course the agency must show that there are good reasons for the new policy. But it need not demonstrate to a court’s satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates. This means that the agency need not always provide a more detailed justification than what would suffice for a new policy created on a blank slate. Sometimes it must -- when, for example, its new policy rests upon factual findings that contradict those which underlay its prior policy; or when its prior policy has engendered serious reliance interests that must be taken into account. ... It would be arbitrary or capricious to ignore such matters. In such cases it is not that further justification is demanded by the mere fact of policy change; but that a reasoned explanation is needed for disregarding facts and circumstances that underlay or were engendered by the prior policy."
Then, applying these standards, Scalia concluded that the FCC did not act in an arbitrary or capricious manner.
Scalia also rejected the argument that the FCC's fleeting expletive policy will harm small and local broadcasters. He offered the flippant argument that small town broadcasters cannot afford "foul-mouthed glitteratae from Hollywood".
Finally, Scalia declined to address the First Amendment issue. "The Second Circuit did not definitively rule on the constitutionality of the Commission's orders, but respondents nonetheless ask us to decide their validity under the First Amendment."
He wrote that the Constitutional issues "will be determined soon enough, perhaps in this very case. ... We see no reason to abandon our usual procedures in a rush to judgment without a lower court opinion. We decline to address the constitutional questions at this time."
Thomas Concurrence. Justice Clarence Thomas wrote that he concurred as to the interpretation of the APA.
He wrote his concurrence, however, to disclose and explain his intent, once the First Amendment issue is properly before the Supreme Court, to abandon the Supreme Court's acquiescence to FCC regulation of broadcast speech in a manner that is greater than, and inconsistent with, regulation of other speech.
Justice Thomas appears ready and anxious to pound wooden stakes through the hearts of both Red Lion and Pacifica.
"I write separately, however, to note the questionable viability of the two precedents that support the FCC's assertion of constitutional authority to regulate the programming at issue in this case. ... Red Lion and Pacifica were unconvincing when they were issued, and the passage of time has only increased doubt regarding their continued validity."
Thomas reviewed the scarcity and pervasiveness rationales, and concluded that these opinions expound a "legal rule that lacks any textual basis in the Constitution", and that they possess "logical weakness" as well as "doctrinal incoherence".
He continued that "even if this Court's disfavored treatment of broadcasters under the First Amendment could have been justified at the time of Red Lion and Pacifica, dramatic technological advances have eviscerated the factual assumptions underlying those decisions. Broadcast spectrum is significantly less scarce than it was 40 years ago."
Moreover, wrote Thomas, "traditional broadcast television and radio are no longer the ``uniquely pervasive´´ media forms they once were. For most consumers, traditional broadcast media programming is now bundled with cable or satellite services. ... Broadcast and other video programming is also widely available over the Internet. ... And like radio and television broadcasts, Internet access is now often freely available over the airwaves and can be accessed by portable computer, cell phones, and other wireless devices. ... The extant facts that drove this Court to subject broadcasters to unique disfavor under the First Amendment simply do not exist today."
He concluded that "These dramatic changes in factual circumstances might well support a departure from precedent under the prevailing approach to stare decisis", and that "I am open to reconsideration of Red Lion and Pacifica in the proper case."
Other Justices' Views on the First Amendment. Justice Breyer wrote a dissent joined by Justices Stevens, Ginsburg, and Souter. He wrote that "I would not now foreclose, as the majority forecloses, our further consideration of" the Constitutional issues.
Justice Ginsburg wrote a dissent "only to note that there is no way to hide the long shadow the First Amendment casts over what the Commission has done. Today's decision does nothing to diminish that shadow."
Justice Kennedy, part of the majority, wrote that "I agree with the Court that as this case comes to us from the Court of Appeals we must reserve judgment on the question whether the agency's action is consistent with the guarantees of the Constitution."
Breyer Dissent. Justice Breyer wrote a long dissent on the APA issue. He concluded that the FCC "failed adequately to explain why it changed its indecency policy from a policy permitting a single ``fleeting use´´ of an expletive, to a policy that made no such exception. Its explanation fails to discuss two critical factors, at least one of which directly underlay its original policy decision. Its explanation instead discussed several factors well known to it the first time around, which by themselves provide no significant justification for a change of policy. Consequently, the FCC decision is ``arbitrary, capricious, an abuse of discretion.´´"
Stevens Dissent. Justice Stevens also wrote a dissent on the APA issue. First, he wrote that "the Court espouses the novel proposition that the Commission need not explain its decision to discard a longstanding rule in favor of a dramatically different approach to regulation."
He also wrote that the FCC is essentially "an agent of Congress" to which the Congress delegates legislative authority.
He continued that "The FCC, like all agencies, may revise its regulations from time to time, just as Congress amends its statutes as circumstances warrant. But the FCC is constrained by its congressional mandate. There should be a strong presumption that the FCC's initial views, reflecting the informed judgment of independent commissioners with expertise in the regulated area, also reflect the views of the Congress that delegated the Commission authority to flesh out details not fully defined in the enacting statute."
He continued that the rules adopted after Pacifica "have been in effect for decades and have not proved unworkable in the intervening years".
He added that "broadcasters have a substantial interest in regulatory stability; the threat of crippling financial penalties looms large over these entities. ... The FCC's shifting and impermissibly vague indecency policy only imperils these broadcasters and muddles the regulatory landscape. It therefore makes eminent sense to require the Commission to justify why its prior policy is no longer sound before allowing it to change course."
Reaction. FCC Chairman Michael Copps stated in a release that "Today's Supreme Court decision in Fox is a big win for America's families. The Court recognized that when broadcasters are granted free and exclusive use of a valuable public resource, they incur enforceable public interest obligations. Although avoiding the broadcast of indecent language when children are likely to be watching is one of those core responsibilities, few can deny the blatant coarsening of programming in recent years. The Court's decision should reassure parents that their children can still be protected from indecent material on the nation's airwaves."
Adam Thierer, of the Progress & Freedom Foundation (PFF), stated in a release that "While the Court decided this case on purely procedural grounds, its failure to address the constitutional issues at stake will leave the First Amendment freedoms of both media creators and consumers in this country uncertain until another case winds its way up to the court, which could take years."
"Practically speaking, as Justice Thomas noted, what's the point of continuing to apply a censorship regime to one of the oldest mediums -- broadcast TV and radio -- when kids are flocking to unregulated mediums in large numbers? At this point, we're doing little more than protecting adults from themselves and destroying over-the-air broadcasting in the process."
Thierer added that "Although new media technologies and platforms are not covered currently by FCC content controls, the specter of regulation now haunts all media as platforms continue to converge and broadcast content gets repurposed on other platforms."
Finally, what makes the Court's ruling even less sensible is that all parents have an extensive array of tools and strategies at their disposal to control media in their homes and in their lives of the children. That is especially the case for broadcast television programming, which is easier to control than ever before. The Court has held that user empowerment and private blocking solutions should shield the Internet from content regulation. Why shouldn't the same principle apply to broadcasting?
Harold Feld, of the Public Knowledge, wrote in a release that this opinion "should have significant impact on the pending Comcast/BitTorrent case now pending in the DC Circuit."
This case is FCC, et al. v. Fox Television Stations, Inc., et al., U.S. Supreme Court, Sup. Ct. No. 07-582, a petition for writ of certiorari to the U.S. Court of Appeals for the 2nd Circuit, App. Ct. Nos. 06-1760-ag, 06-2750-ag, and 06-5358-ag. The Court of Appeals heard petitions for review of a final order of the FCC. See also, Supreme Court docket.
4/27. The Supreme Court denied certiorari in Golden Bridge Technology v. Motorola, an antitrust case. See, Orders List [9 pages in PDF] at page 7.
This lets stand the October 23, 2008, opinion [9 pages in PDF] of the U.S. Court of Appeals (5thCir).
Golden Bridge Technology (GBT) develops wireless communications technology for cellular networks. It is a member of standard setting organization, Third Generation Partnership Project (3GPP).
It filed a complaint in the U.S. District Court (EDTex) against Motorola, Ericsson, Panasonic, Qualcomm, and others alleging violation of 15 U.S.C. § 1, in connection with an alleged conspiracy to exclude GBT's patented technology from the 3GPP standard. The District Court granted summary judgment to the defendants.
This case is Golden Bridge Technology, Inc. v. Motorola, Inc., et al., Supreme Court of the U.S., Sup. Ct. No. 08-1072, a petition for writ of certiorari to the U.S. Court of Appeals for the 5th Circuit, App. Ct. No. 07-40954. Chief Justice John Roberts took no part in the consideration or decision of this petition.
4/28. Sen. Arlen Specter (D-PA) switched his party affiliation from Republican to Democrat.
Sen. Patrick Leahy (D-VT), the Chairman of the SJC, stated that "I had the impression that Senator Specter had a feeling that the Republican Party, a great party in this country, had left him -- not the other way around."
Sen. Specter is up for re-election in 2010. He faced the prospect of losing in the Republican primary.
Sen. Specter had been the ranking Republican on the Senate Judiciary Committee (SJC). Sen. Orrin Hatch (R-UT) has already served six years as Chairman and Ranking Republican. Sen. Charles Grassley (R-IA), another SJC member, is the ranking Republican on the Senate Finance Committee. Sen. Jeff Sessions (R-AL) and Sen. Jon Kyl (R-AZ) are possible replacements for Sen. Specter as ranking Republican. Sen. Tom Coburn (R-OK) was designated as the ranking Republican for the April 29, 2009, full committee nominations hearing.
Whoever the next ranking Republican is, he is likely to be more conservative, and more confrontational with the Obama administration. However, as before, Sen. Hatch is likely to play a leading role among Republicans on intellectual property issues. There is no IP Subcommittee in the 111th Congress.
There will also likely be considerable turnover in Republican SJC staff, which will delay consideration of some matters. The SJC cancelled it weekly executive business meeting, which has been scheduled for 10:00 AM on April 30.
With Sen. Specter's switch, and the seating of a Minnesota Democrat, the Democrats would have 60 members. This is the minimum number to override a Republican filibuster. Democrats during the Bush administration used the filibuster to block judicial appointments. This tactic now appears out of reach of Republicans. Although, they had not yet faced the decision of whether to employ it.
The House will meet at 10:00 AM for legislative business. It will consider several non-technology related items. See, Rep. Hoyer's schedule for the week of April 27.
The Senate will meet at 9:30 AM. It will begin consideration of S 896 [LOC | WW], a bill regarding mortgage lending.
9:00 - 10:30 AM. The Information Technology and Innovation Foundation (ITIF) will host an event titled "Progress and Innovation: Can We Restore Faith in the Future?". The speaker will be novelist David Brin. See, Amazon web page listing his books. See, notice. Breakfast will be served. Location: ITIF, Suite 200, 1250 Eye St., NW.
9:30 AM - 1:00 PM. The Institute for Policy Innovation (IPI) will host an event titled "The Role of Intellectual Property in the Global Recovery". The first panel is titled "The Role of IP in a Struggling Economy". The speakers will be Andre Carter (Irimi, Inc.), Mark Esper (U.S. Chamber of Commerce), William Hulsey (Hulsey Intellectual Property Lawyers), and Jonathan Zuck (Association for Competitive Technology). The second panel is titled "Insider Forum: IP and the Future of Innovation". The speakers will be Dan DiDio (DC Comics) and Mark McKinnon (Arts and Labs). The third panel is titled "The Future of Intellectual Property and Trade". The speakers will be Kira Alvarez (Office of the U.S. Trade Representative), Shaun Donnelly (National Association of Manufacturers), David Thomas (House Ways & Means Committee), and Chris Israel (IPI). The keynote speakers will be Rep. Marsha Blackburn (R-KY) and Michael Gallagher (Entertainment Software Association). Lunch will be served. RSVP to Erin Humiston at 972-874-5139 or erin at ipi dot org. Location: 5th floor, Reserve Officers Association (ROA), 1 Constitution Ave., NE.
10:00 AM. The House Judiciary Committee (HJC) will hold a hearing on HR 1260 [LOC | WW], the "Patent Reform Act of 2009". See, notice. Location: Room 2141, Rayburn Building.
CANCELLED. 10:00 AM. The Senate Judiciary Committee (SJC) may hold an executive business meeting. Location: Room 226, Dirksen Building.
10:00 AM. The Senate Homeland Security and Governmental Affairs Committee (SHSGAC) will hold a hearing on the nomination of Ivan Fong to be General Counsel of the Department of Homeland Security (DHS). See, notice. Location: Room 342, Dirksen Building.
1:00 PM. The House Armed Services Committee's (HASC) Strategic Forces Subcommittee will hold a hearing on "space system acquisitions and the industrial base". Location: Room 2212, Rayburn Building.
2:00 PM. The Senate Judiciary Committee (SJC) will hold a hearing titled "Comprehensive Immigration Reform in 2009, Can We Do It and How?". The SJC will webcast this event. Sen. Charles Schumer (D-NY) will preside. See, notice. Location: Room 226, Dirksen Building.
2:30 PM. The Federal Trade Commission's (FTC) Bureau of Economics (BOE) will host a seminar conducted by Amalia Miller (University of Virginia) on her paper titled "Electronic Discovery and Electronic Medical Records: Does the Threat of Litigation Affect Firm Decisions to Adopt Technology?". Location: FTC Conference Center, 601 New Jersey Ave., NW.
8:30 AM - 4:30 PM. The U.S.-China Economic and Security Review Commission will hold a hearing titled "China's Propaganda and Influence Operations, Its Intelligence Activities that Target the United States, and the Resulting Impacts on U.S. National Security". See, notice in the Federal Register, April 13, 2009, Vol. 74, No. 69, at Pages 16916. Location: Room 485, Russell Building, Capitol Hill.
Rep. Hoyer's schedule for the week of April 27 states that "no votes are expected in the House".
1:00 PM. The House Commerce Committee's (HCC) Subcommittee on Communications, Technology, and the Internet will hold a hearing titled "Cybersecurity: Network Threats and Policy Changes". The witnesses will be Greg Nojeim (Center for Democracy and Technology), Dan Kaminsky (IOActive), Larry Clinton (Internet Security Alliance), and Rodney Joffe (Neustar). See, notice. Location: Room 2322, Rayburn Building.

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