Opinion ID: 185147
Heading Depth: 2
Heading Rank: 1

Heading: The Subscriber Limits Provision

Text: 5 Time Warner argues that the subscriber limits provision is a content-based restriction of its ability to communicate with its audience, and as such is subject to strict scrutiny. See Turner Broadcasting System, Inc. v. Federal Communications Comm'n (Turner I), 512 U.S. 622, 642 (1994) (Court has applied the most exacting scrutiny to regulations that suppress, disadvantage, or impose differential burdens upon speech because of its content). The Government denies that the subscriber limits provision is content-based, and argues for an intermediate level of scrutiny. See id. 6 In order to determine the applicable standard of review, then, we must decide whether the subscriber limits provision is content-based. In general, the principal inquiry in determining content neutrality ... is whether the government has adopted a regulation of speech because of [agreement or] disagreement with the message it conveys. Id. (quoting Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989)). A law that singles out speech based upon the ideas or views expressed is content-based, whereas a law that confer[s] benefits or impose[s] burdens on speech without reference to the ideas or views expressed is most likely content-neutral. Id. at 643; see also id. at 661 (law that does not pose ... inherent dangers to free expression, or present ... potential for censorship or manipulation, [will not] ... justify application of the most exacting level of First Amendment scrutiny). 7 As a cable operator, Time Warner exercises editorial discretion in selecting the programming it will make available to its subscribers. Time Warner argues that the congress limited its ability to speak by restricting the number of subscribers--and therefore potential viewers--it may reach with the programming it has selected. That this limitation is content based, according to Time Warner, is evident from the Senate Report that accompanied the final version of the 1992 Cable Act. See H.R. Conf. Rep. No. 102-862, at 81-82 (1992), reprinted in 1992 U.S.C.C.A.N. 1133, 1133, 1263-64 (adopting provisions of Senate Bill, as described in Senate Report, S. Rep. No. 102-92, at 32 (1991) [hereinafter S. Rep.]). 8 That Report indicated the Congress was concerned about increasing concentration of ownership and control in the cable industry: 9 ... First, there are special concerns about concentration of the media in the hands of a few who may control the dissemination of information. The concern is that the media gatekeepers will (1) slant information according to their own biases, or (2) provide no outlet for unorthodox or unpopular speech because it does not sell well, or both........ 10 The second concern about horizontal concentration is that it can be the basis of anticompetitive acts. For example, a market that is dominated by one buyer of a product, a monopsonist, does not give the seller any of the benefits of competition.... 11 S. Rep. at 32-33. 12 Time Warner contends that the Congress's concern that media gatekeepers would slant information or fail to provideoutlets for unorthodox speech reflects a preference for one type of content and an intent to suppress another, namely, the speech of cable operators. The Company likens the Congress's efforts to limit its speech to the restraints the Supreme Court held unconstitutional in Buckley v. Valeo, 424 U.S. 1 (1976), and First National Bank of Boston v. Bellotti, 435 U.S. 765 (1978). Buckley involved a federal campaign finance law aimed at equalizing the relative ability of individuals and groups to influence the outcome of elections by limiting their political expenditures. Id. at 48. The Court rejected the concept that government may restrict the speech of some elements of our society in order to enhance the relative voice of others [as] wholly foreign to the First Amendment. Id. at 48-49. Bellotti similarly involved a state statute that prohibited certain types of businesses from making contributions or expenditures for the purpose of influencing particular ballot initiatives. The Court reiterated the point it had made in Buckley: A state's effort to control some voices in order to enhance the relative voices of less influential speakers contradicts basic tenets of First Amendment jurisprudence. Bellotti, 435 U.S. at 791 n.30 (noting exception in the special context of limited access to the channels of communication and citing Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969)). 13 The expenditure limit at issue in Buckley, like the prohibition at issue in Bellotti, was content-based because it was concerned with the communicative impact of the regulated speech. Turner I, 512 U.S. at 658. As the Supreme Court made quite clear in Turner I, however, making way for some speakers, in the cable context where that necessarily means limiting the speech of others, is not inherently content-based. Id. at 643-45. There the Court determined that the mustcarry provision of the 1992 Cable Act, which required cable operators to carry the signals of a specified number of local broadcast television stations, id. at 630, was not content-based, and applied intermediate scrutiny in its review of that provision. Although the must-carry obligation restricted cable operators' speech by limiting the number of channels they could program at will, it did so in a content-neutral fashion and for a content-neutral reason, namely, to protect the interests of non-cable subscribers in maintaining the viability of the television broadcasting industry. Id. at 646. 14 According to Time Warner, the subscriber limits provision expresses a hostility to the content of large cable operators' speech that did not underlie the must-carry obligation: The subscriber limits are meant to restrict large cable operators from presenting information in accord with their own biases, in order thereby to promote a diversity of views in cable programming. Increasing the diversity of programming is not, Time Warner argues, among the ends the Supreme Court deemed content-neutral in Turner I. 15 Time Warner is correct that the Court's acceptance of the must-carry obligation as content-neutral rested in large part upon the Court's understanding that the purpose of the statute was to maintain the availability of broadcast television for those without cable; that does not render Turner I wholly inapplicable, however. The Court also identified the bottleneck monopoly power of the cable operator, arising out of the operator's control over most (if not all) of the television programming that is channeled into the subscriber's home, as the threat to broadcast television. 512 U.S. at 656-57, 661.In enacting the subscriber limits, the Congress was concerned that cable operators might use that same bottleneck power to exclude other providers of cable programming. As with the must-carry obligation, its concern was not with what acable operator might say, but that it might not let others say anything at all in the principal medium for reaching much of the public. See id. at 657 (The First Amendment's command that government not impede the freedom of speech does not disable the government from taking steps to ensure that private interests not restrict, through physical control of a critical pathway of communication, the free flow of information and ideas). The must-carry obligation and the subscriber limits provision both preserve for consumers some competition in the provision of programming. The must-carry obligation preserves competition between broadcasters and the cable operator, while the subscriber limits preserve competition between the cable operator and its affiliated programmers on the one hand and unaffiliated providers of cable programming on the other. By placing a value upon diversity and competition in cable programming the Congress did not necessarily also value one speaker, or one type of speech, over another; it merely expressed its intention that there continue to be multiple speakers. 16 Finally, Time Warner argues that the subscriber limits provision improperly singles out for regulation the cable medium, as opposed to other video programmers such as Direct Broadcast Satellite (DBS) operators. Here it refers us to Turner I, 512 U.S. at 659, where the Court observed, Regulations that discriminate among media, or among different speakers within a single medium, often present serious First Amendment concerns. According to Time Warner, with the subscriber limits the Congress targeted a small number of [the various] speakers capable of purchasing and providing video programming, id. at 660, without providing any justification for limiting the regulation to the cable medium. 17 In Turner I, however, the Court rejected Turner Broadcasting's claim of discrimination, stating that [i]t would be error to conclude ... that the First Amendment mandates strict scrutiny for any speech regulation that applies to one medium (or a subset thereof) but not others. Id. at 660.Indeed, the same unique characteristic of the cable medium that justified the imposition of the must-carry obligation is also invoked by the Government to justify the subscriber limits, namely, the bottleneck monopoly power exercised by cable operators. Id. at 661. In Turner I this bottleneck power was seen to jeopardize the viability of broadcast television; in this case, it arguably threatens diversity and competition in the provision of cable programming. As the Government notes, other video programmers such as DBS lack the bottleneck power of cable operators; nor do they reach nearly as many households as does cable. 18 In sum, upon examination of the statute, the Senate Report that accompanied it, and the Supreme Court's analysis of the must-carry provision at issue in Turner I, we conclude that the subscriber limits provision is not content-based. In order to determine whether it is constitutional, therefore, we apply intermediate, rather than strict scrutiny. Id. at 662.
19 A content-neutral regulation of speech will be sustained under the First Amendment if it [1] advances important governmental interests unrelated to the suppression of free speech and [2] does not burden substantially more speech than necessary to further those interests. Turner Broadcasting System, Inc. v. Federal Communications Comm'n (Turner II), 520 U.S. 180, 189 (1997) (citing United States v. O'Brien, 391 U.S. 367, 377 (1968)). If a regulation on speech is intended to redress an actual or an anticipated harm to an important governmental interest, then the Government must demonstrate that the recited harmsare real, not merely conjectural, and that the regulation will in fact alleviate these harms in a direct and material way. Turner I, 512 U.S. at 664. Our review of the Congress's predictive judgments is deferential; we ask only whether, in formulating its judgments, Congress has drawn reasonable inferences based on substantial evidence. Turner II, 520 U.S. at 195. Finally, we will uphold a regulation if the important governmental interest in question would be achieved less effectively absent the regulation and the regulation does not burden substantially more speech than is necessary to further that interest. Id. at 213-14 (quoting Turner I, 512 U.S. at 662). 20 As to advancing an important governmental interest, the Congress enacted the subscriber limits based upon two stated concerns: that cable operators would impose their own biases upon the information they disseminate, and that a few dominant cable operators might preclude new programming services from attaining the critical mass audience necessary to survive. See S. Rep. at 32-33. Time Warner does not argue that the Congress failed to identify an important governmental interest, but rather faults the Congress for having acted without having made findings, and without having evidence upon which it could have made findings, that either of these problems is a real one. See, e.g., Reno v. American Civil Liberties Union, 521 U.S. 844, 117 S. Ct. 2329, 2348 (1997) (invalidating portion of Communications Decency Act in the light of the absence of any detailed findings by the Congress, or even hearings addressing the special problems of the CDA). 21 According to Time Warner, cable operators in fact can neither bias the flow of information nor obstruct the expression of unpopular speech because other statutory provisions require them to carry independent programming, including public, educational, and governmental (PEG) programming, and the programming on leased access channels and local broadcast stations. See 47 U.S.C. SS 531, 532, 534 & 535. As for the concern that cable operators might erect barriers to the entry of new programming services, Time Warner argues that the Congress did not establish either that cable operators have attempted to exclude new cable programmers, or that they have an incentive to do so. 22 The Government responds that the promotion of diversity in ideas and speech, as well as the preservation of competition, are important governmental interests, and that the Congress reasonably viewed increased concentration in the cable industry as a threat to both diversity and competition. The Government acknowledges that the 1992 Cable Act requires cable operators to carry PEG and several other types of local programming, but argues that these requirements were not meant directly to preserve competition, nor do they promote diversity in the sources of cable programming at the national level. 23 The Senate Report accompanying the 1992 Cable Act noted that concentration of ownership had increased dramatically: by 1990, the five largest cable operators served nearly half the country's cable subscribers. S. Rep. at 32. Witnesses testified that as a result of this increase in concentration the large MSOs [multiple system operators] have the market power to determine what programming services can 'make it' on cable. S. Rep. at 33. Based upon this and related evidence, the Congress found that [t]he potential effects of ... concentration [in the cable industry] are barriers to entry for new programmers and a reduction in the number of media voices available to consumers. 47 U.S.C. S 521(a)(4).It also found that [t]here is a substantial governmental and First Amendment interest in promoting a diversity of views provided through multiple technology media. Id. § 521(a)(6). We conclude that the Congress drew reasonable inferences, based upon substantial evidence,that increases in the concentration of cable operators threatened diversity and competition in the cable industry. See Turner II, 520 U.S. at 195-96 (discussing deference due to Congress's findings). 24 As to burdening more speech than necessary, Time Warner argues that subscriber limits will not increase the diversity of information sources available to the public in any locale. Nor, we are told, are subscriber limits necessary in order to promote competition; the antitrust laws, as well as the anti-discrimination provision of the 1992 Cable Act, see 47 U.S.C. S 536(a)(3), provide a sufficient check upon any potentially anticompetitive conduct by cable operators. 25 Although we cannot say that a national ownership cap will surely increase the diversity of programming available at the local level, neither are we required to do so in order to uphold the statute as constitutional. See, e.g., United States v. Albertini, 472 U.S. 675, 689 (1985) (The validity of [a] regulation[ ] does not turn on a judge's agreement with the responsible decisionmaker concerning the most appropriate method for promoting significant government interests). It is enough that, having determined that [c]oncentration has grown dramatically in the cable industry, S. Rep. at 32, the Congress reasonably concluded that this concentration threatened the diversity of information available to the public and could form a barrier to the entry of new cable programmers. That is hardly an unreasonable inference. See Federal Communications Comm'n v. National Citizens Committee for Broadcasting, 436 U.S. 775, 780 (1978); Phillip E. Areeda et al., Antitrust Law p 420a (1995). 26 Nor is it a fatal flaw that the subscriber limits provision focuses upon behavior already arguably proscribed by other laws. In the subscriber limits provision the Congress took a structural approach to the regulation of cable operators, whereas the anti-discrimination provision of the 1992 Cable Act and the antitrust laws are behavioral prohibitions. As a structural limitation, the subscriber limits provision adds a prophylaxis to the law and avoids the burden of individual proceedings to remedy particular instances of anticompetitive behavior. Cf. Turner II, 520 U.S. at 222-23 (dismissing petitioner's suggestion that antitrust enforcement or an administrative complaint procedure is an adequate alternative to must-carry obligation: Congress could conclude ... that the considerable expense and delay inherent in antitrust litigation, and the great disparities in wealth and sophistication between the average independent broadcast station and average cable system operator, would make these remedies inadequate substitutes). In sum, Time Warner has not demonstrated that the subscriber limits provision is on its face either unnecessary or unnecessarily overburdensome.