Opinion ID: 185147
Heading Depth: 2
Heading Rank: 2

Heading: The Channel Occupancy Provision

Text: 27 The channel occupancy provision requires the Commission to establish limits upon the number of channels on a cable system that can be occupied by a video programmer in which a cable operator has an attributable interest. 47 U.S.C. S 533(f)(1)(B). Time Warner likens this provision to a law prohibiting newspapers from devoting more than a fraction of their columns to editorial content of their own. That this restriction is content-based, it argues, is evident from the Senate Report: 28 Vertical integration in the cable industry .... gives cable operators the incentive and ability to favor their affiliated programming services. For example, the cable operator might give its affiliated programmer a more desirable channel position than another programmer, or even refuse to carry other programmers[The channel occupancy provision] is designed to in-crease the diversity of voices available to the public. Some [MSOs] own many programming services. It would be unreasonable for them to occupy a large percentage of channels on a cable system. 29 The intent of this provision is to place reasonable limits on the number of channels that can be occupied by each MSO's programming services. 30 S. Rep. at 25, 80. 31 Time Warner argues that because the Congress expressed concern that cable operators might favor their affiliated programming services the legislature's stated design was to suppress cable operators' speech, and to advance the speech of nonaffiliated programmers. Again analogizing itself to a newspaper publisher, see Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 255-56 (1974), Time Warner argues that a cable operator has a constitutional right to favor its own speech. By interfering with that right in order to alter the mix of programming available on cable, the Congress has impermissibly regulated the content of cable operators' speech. 32 A cable operator is unlike a newspaper publisher, however, in the one respect crucial to the Congress's reason for enacting the channel occupancy provision: A newspaper publisher does not have the ability to exclude competing publications from its subscribers' homes. The cable operator's bottleneck monopoly is a physical and economic barrier to such intra-medium competition. The channel occupancy provision responds in kind, without regard to the content of either the cable operator's speech or that of the unaffiliated programmer for which it secures an outlet. See Turner I, 512 U.S. at 656. 33 Nor does the Congress's wanting to ensure a multiplicity of voices on cable inherently bespeak a preference for or a bias against the content of any speech. That is why, in Time Warner, we upheld under intermediate scrutiny the leased access provision of the 1992 Cable Act. That provision requires cable operators to set aside a percentage of their channels for commercial use by unaffiliated programmers in order both to bring the widest possible diversity of information sources to cable subscribers and to promote competition in the delivery of diverse sources of video programming.93 F.3d at 968-69. In that case, we rejected Time Warner's argument that the leased access provision was a content based restriction, and therefore subject to strict scrutiny, because nothing in the statute favored or disfavored speech on the basis of its content: The statutory objective ... [is] framed in terms of the sources of information rather than the substance of the information. Id. at 969 (citing Associated Press v. United States, 326 U.S. 1, 20, 65 (1945)). 34 Time Warner now argues that whereas the objective of the leased access provision was to promote speech from various sources without regard to content, the channel occupancy provision is meant to limit speech from a particular type of source and therefore necessarily imposes a content-based restriction. Here it refers us to the statement in the Senate Report that cable operators may have the incentive and ability to favor their own or an affiliate's speech. S. Rep. at 25. In response, the Government explains, and we agree, that the legislative concern was not with the speech of a particular source but solely with promoting diversity and competition in the cable industry. Like the leased access provision, that is, the focus of the channel occupancy provision is upon the source of speech, not its content. See Time Warner, 93 F.3d at 969 (the qualification [of nonaffiliates] to lease time on [a cable operator's] channels depends not on the content of their speech, but on their lack of affiliation with the operator, a distinguishing characteristic stemming fromconsiderations relating to the structure of cable television). 35 We recognize, of course, the possibility that a seemingly neutral limitation may have been crafted in such a way as to single out for regulation the speech of some group that the legislature finds objectionable. See Minneapolis Star & Tribune Co. v. Minnesota Comm'r of Revenue, 460 U.S. 575, 580, 592 (1983) (noting that result in Grosjean v. American Press Co., 297 U.S. 233 (1936), may have been attributable in part to the perception on the part of the Court that the State imposed the tax with an intent to penalize a selected group of newspapers). There is not a shred of evidence, however, that such an illicit consideration underlies the channel occupancy provision, and indeed Time Warner stops well short of claiming otherwise. We are therefore confident that the channel occupancy provision is content-neutral and subject only to intermediate scrutiny.
36 In applying intermediate scrutiny, we inquire not whether Congress, as an objective matter, was correct that the channel occupancy provision is necessary to increase the diversity of voices available to the public via cable, but rather whether the legislative conclusion was reasonable and supported by substantial evidence in the record before Congress. Turner II, 520 U.S. at 211. Time Warner argues that the Congress's reason for enacting the channel occupancy provision--to prevent cable operators from favoring affiliated programmers and possibly even excluding others--addresses only a speculative harm because the Congress had no evidence that such exclusionary conduct actually had occurred. On the contrary, Time Warner contends, a cable operator has an incentive to contract with unaffiliated programmers to the extent that doing so will increase the attractiveness of the video programming packages it offers to subscribers; this incentive is reinforced by increased competition from DBS and other alternative providers of video programming. 37 Nothing in these protestations demonstrates that the Congress's legislative conclusion was either unreasonable or unsupported by substantial evidence. See Turner II, 520 U.S. at 211. The findings in the 1992 Cable Act document the Congress's concerns with affiliation between cable operators and cable programmers: 38 The cable industry has become vertically integrated; cable operators and cable programmers often have common ownership. As a result, cable operators have the incentive and ability to favor their affiliated programmers. This could make it more difficult for noncable-affiliated programmers to secure carriage on cable systems. Vertically integrated program suppliers also have the incentive and ability to favor their affiliated cable operators over nonaffiliated cable operators and programming distributors using other technologies. 39 47 U.S.C. S 521(a)(5). The Senate Report accompanying the Act discusses the evidence upon which the Congress based these conclusions. Time Warner is of course correct that a cable operator has an incentive to offer an attractive package of programs to consumers, but the company does not deny that a cable operator also has an incentive to favor its affiliated programmers; where the two forces are in conflict, the operator may, as a rational profit-maximizer, compromise the consumers' interests. Hence, the concern of the Congress is well grounded in the evidence and a bit of economic common sense. 40 Finally, Time Warner argues that the channel occupancy provision is unnecessary in light of the anti-discrimination provision of the 1992 Cable Act as well as the antitrust laws. As we noted earlier, however, a prophylactic, structural limitation is not rendered unnecessary merely because preexisting statutes impose behavioralnorms and ex post remedies. Cf. Turner II, 520 U.S. at 222-23.