The Supreme Court Does Not Want To Revisit Constitutionality of Broadcast or Cable Regulation, Get Over It And Get On With Life.

Remember how conservatives just could not get over the fact that neither Chris Christie or Mitch Daniels — or anyone else they liked better than Mitt Romney — would run for President? Remember how this collective fantasy actually acquired a factesque quality, so no matter how often and emphatically they said “I’m not running,”, hardcore true believers kept saying it would totally happen? As a result, this collective fantasy actually kept impacting reality, with Mitt Romney forced to spend real time and real money persuading potential supporters that their choices really were Mitt Romney, Rick Santorum, Newt Gingrich, or Ron Paul. Really.

I bring this up because we have our own version of this in telecom policyland. Here, a hardcore group of people in telecom policyland believe that the Supreme Court is positively lusting to overturn the two cases that form the mainstay of the FCC’s authority to regulate broadcasters and cable operators: Red Lion and Turner Broadcasting. The rock solid belief that the Supreme Court cannot wait to get its collective hands on these cases cases to overturn them is an article of faith among so many in the telecom world that it influences behavior. Those who favor regulation of things like media ownership and program access live in mortal terror of any change to the rules that might give rise to a cause of action. By contrast, broadcasters, cable operators, and other opponents of any regulation of Big Media keep trying to generate lawsuits so they can strike down what they see as a vile restraint on the First Amendment.

This past term, the Supreme Court had the opportunity to review both Red Lion and Turner. It opted not to do so.  In May, the Supreme Court quietly declined to hear an appeal by Cablevision that would have allowed the Court to revisit the Turner case. In June, the Court not only refused to reconsider Red Lion in the context of the Fox Broadcasting indecency case, they refused to hear the broadcaster appeal of the FCC’s media ownership decision. These cases presented the cleanest, most clear-cut opportunities for the Court to re-examine the constitutionality of either cable or broadcast regulation in years, and the most obvious opportunities for years to come. If the Court were lusting to take on either Red Lion or Turner, surely this presented the perfect chance for them to do so.

But they didn’t. And, just as even the most avid Romney-haters needed to wake up to the fact that Chris Christie wasn’t playing hard to get, folks in Policyland need to deal with the fact that regulation of media ownership and cable remains constitutional for the foreseeable future.

More below . . . .

Some Background On The First Amendment Stuff.

Normally, the regulation of business arrangements, such as how many widgets you can produce per year or whether you have to share access to raw materials with your competitors, doesn’t trigger any kind of First Amendment concern. We regard these as straightforward economic regulations. A law requiring airports to make facilities to competing airlines available on a neutral, non-discriminatory basis, or requiring airlines to offer their servies as common carriers, would not raise an eyebrow. You might dislike the policy, but it is hard to see the connection between limiting the number of runaway slots United can control at any given hub, or a requirement that Southwestern Airlines sell tickets to everyone and free expression.

Take this same economic regulation and move it to the business of speech, and things change. Obviously, an economic regulation can have profound influence on who gets to speak and how the press functions — core concerns of any democratic society. On the other hand, it is equally clear that simply being in the business of speech does not make all regulation an automatic First Amendment violation. A sales tax designed to target newspapers and make them uniquely more expensive may raise First Amendment concerns, but a generic sales tax that declines to exempt newspapers does not. The matter becomes even more complicated when we consider the electronic media. In the language of the Supreme Court and others, a democracy depends a “diversity of news and information sources” that “compete in the marketplace of ideas.” But whereas anyone can set up a newspaper (at least in theory), setting up a competing television or radio station or a competing cable system is not so simple. On the other hand, should that really make a difference?

Way back in 1943, the Supreme Court considered the question of whether the FCC could regulate the number of broadcast licenses any entity could own in NBC v. United States. In that case, the Court held that radio was “unique” because unless someone regulated radio to limit the number of people using the same frequencies in order to prevent harmful interference. If it violated the First Amendment for the FCC to limit the number of licenses it chose to give to any specific entity “it would follow that every person whose application for a license to operate a station is denied by the Commission is thereby denied his constitutional right of free speech. Freedom of utterance is abridged to many who wish to use the limited facilities of radio. Unlike other modes of expression, radio inherently is not available to all. That is its unique characteristic, and that is why, unlike other modes of expression, it is subject to governmental regulation.” — 319 U.S. at 226.

This has ever after become known as the “scarcity doctrine.” That is to say, because broadcast licenses are “scarce,” and the government regulates them, the government can impose regulations on their use that it could not impose on a newspaper. Although this dates back to 1943, everyone attributes the scarcity doctrine to Red Lion, which was decided in 1969. Red Lion dealt with the FCC’s “fairness doctrine,” and waxed very eloquent on how the general public still retains a First Amendment right in broadcast because the FCC required the licensees (under the fairness doctrine) to give those with opposing views a chance  to respond. What Red Lion really did was not invent scarcity, but emphatically endorse the “public trustee” model. i.e. That local licensees do not own licenses, they act as public trustees of the “public airwaves” held in trust for the benefit of the local community. But everyone talks about Red Lion as if it had invented the scarcity doctrine.

Fast forward to the age of cable and Turner Broadcasting v. FCC  in 1994.   Congress now wants to regulate the cable industry. In a rare nod to reality, the Supreme Court decides that cable is neither like a printing press and entitled to “strict scrutiny” under the First Amendment, but neither is it a “rational basis” test like regulating broadcast under Red Lion. In theory, reasons the Supreme Court, anyone can build a cable system so the “unique physical property of radio” that justifies licensing it does not apply. In reality, however, you are not going to see people building out cable systems all over the place. On top of that, the government interest in promoting “diversity of information sources” (i.e., regulating cable market power over the programming market) is “a compelling government purpose . . . of the highest order” and the cable interest in maintaining control of its programming line up is (according to the court) a “weak” First Amendment interest. So the Turner Court established “intermediate scrutiny” as the proper First Amendment analysis for cable.

Legal Scholars Totally Hate This.

The vast majority of legal scholars and advocates, even those sympathetic to the idea of limiting media ownership in some way or maintaining any of the regulations derived from scarcity and the “public trustee” model, HATE the “scarcity doctrine” and Red Lion (despite the fact that Red Lion did not invent scarcity). First Amendment purists hate the idea that we treat broadcast licenses differently than we treat printing presses. We ought to have just one First Amendment standard for everything, so there! Economists argue that “all goods are scarce, so that “scarcity” of paper ought to justify regulation of the press.

These critics generally elide over the fact that eliminating scarcity also eliminates exclusive licensing generally. This is why proponents of eliminating Red Lion focus on the availability of multiple sources of information rather than on what the Supreme Court actually describes as “scarce,” the number of exclusive licenses. This is where the analogy to printing presses invariably breaks down.  Somehow, if news is no longer “scarce” because you can turn on CNN as well as local Channel 5, we can still have a government-sanctioned monopoly on the number of licenses. But no one suggests that the government could set some arbitrary limit on the number of newspaper franchises, no matter how high such a limit might be.

For similar reasons, the same group of people HATE the intermediate scrutiny standard under Turner. Here, at least, the argument that cable operators do not exercise market power is relevant to the regulatory question. For my money it runs afoul of two problems. First, it’s actually not true. Broad generalities about how I can get my video on Youtube are no more reflective of reality than the printing press analogy the Supreme Court rejected in Turner. Second, cable operators (and MVPDs generally) try to sweep an awful lot of garden variety economic activity into the realm of First Amendment free expression.

An Article Of Faith

Regardless of the merits, it has been an article of faith for years now for just about everyone but yr hmbl obdn’t blogger that if the Supreme Court ever had the opportunity to reverse the “scarcity doctrine” and Red Lion, the Court that brought us Citizens United would pounce like a hungry lion on a gazelle without a leg to stand on. And doubly so for Turner. Half the timidity of the FCC (including some of its worst advocacy work on appeal) stems from the fact that FCC staff have been brainwashed into believing that Red Lion and Turner are virtually overturned and not really good law anymore. Mind you, if when I was in private practice I had publicly disparaged my client’s primary legal argument, made such pathetic half-hearted efforts to defend it before the courts, and generally carry on the way FCC staff do in any media regulation case (ownership or otherwise), I’d have been fired. But these guys are freaking incurable on the subject. You can hardly get them to cite Red Lion or Turner.

By contrast, the pro-consolidation crowd boldly assert that any proposed FCC regulation — even something as trivial as the requirement to put their public files online —  violates their First Amendment rights. And people who ought to know better cower and whimper and try desperately to avoid any kind of challenge because they are utterly convinced that the Supreme Court will overturn Red Lion and/or Turner and thus eliminate the existing rules, which they are too terrified to actually enforce.


Turns Out, Not So Much

This term, the Supreme Court had the opportunity to strike down either Red Lion or Turner, or both. On the broadcast side, the Supreme Court had the opportunity to strike down the indecency rules as unconstitutional. As indecency constitutes express censorship of protected speech, you would have thought the Supreme Court would have seized the opportunity with both hands to cast out the demon of broadcast regulation. Instead, the Supreme Court opted to decide the case (FCC v. Fox Broadcasting) on narrow procedural grounds. OK, that’s just the anti-naughty words social conservative thing, right? Surely when presented with a direct challenge to the ownership limits — just the situation to challenge the scarcity doctrine! — the Supreme court will pounce, right?

Except they didn’t. Tribune, Media General and a bunch of media companies begged the court to take their appeal from Prometheus Radio Project v. FCC, the case wherein the Third Circuit reversed the FCC’s decision to relax the newspaper/broadcast cross-ownership ban. This case represented the cleanest p0ssible challenge to the scarcity doctrine as a basis for restricting ownership. No naughty words, no social conservative values to offset First Amendment absolutism. This appeal was tailor made for a Court of First Amendment purists despising nuanced gradations of First Amendment analysis based on such things as the “unique physical characteristics of radio” and all set to undo nearly 70 years of rational basis analysis of broadcast regulation based on scarcity.

But they didn’t. Instead, without comment or dissent, the Supreme Court declined to grant the Petition for Certiori of the broadcasters, allowing Red Lion to remain good law.

Similarly, the Court had an unparalleled opportunity to revisit Turner and declare — as the cable operators have long prophesied and the FCC apparently believes in its heart — that the advent of all these other avenues for video programming such as DBS and teh interwebs has rendered Turner obsolete and that regulation of cable systems must now face “strict” scrutiny (or, as they like to say in First Amendment circles, “strict in theory, fatal in fact”). In Cablevision v. FCC, the FCC had required Cablevision to carry some broadcast stations that Cablevision did not wish to carry pursuant to the must carry statute. This case therefore created a perfect “as applied” challenge by which the Court could reverse Turner, in the same way that Citizens United presented a perfect “as applied” challenge to reverse previous holdings find such campaign finance restrictions constitutional.

But they didn’t. Once again, the Supreme Court quietly chose to deny the Petition for Certiori and let the despised Turner remain good law. Cable regulation still gets reviewed under the standard of intermediate scrutiny, as it has for nearly 20 years.


The Supreme Court Is Not About To Reverse Red Lion or Turner Broadcasting! Deal With It!

Why didn’t the Supreme court take cert on any of these? Perhaps the Court is not lusting to overturn either Red Lion or Turner Broadcasting. For one thing, these decisions don’t neatly break down into liberal v. conservative. Ginsberg ranks up there with Thomas for judges who have indicated they think having one First Amendment standard for broadcast, one for cable, and another for print is silly and ought to be overturned. But Kennedy actually wrote the majority opinion in Turner Broadcasting, and Roberts, Alito and Scalia seemed quite taken with the “public trustee” model in oral argument in the indecency case. For whatever reason, there do not appear to be even four justices looking for a clean shot at either Red Lion or Turner.

Which brings me to my final point. THE SUPREME COURT IS NOT ABOUT TO OVERTURN RED LION OR TURNER BROADCASTING. THIS STUFF REMAINS GOOD LAW! REALLY!Especially you guys at the FCC. Get over it!!! And double especially for you guys in OGC, who can’t even bring yourselves to cite Red Lion without shuddering in horror. Because if Red Lion or Turner were really about to get reversed, the Supreme Court would have done it by now. But they haven’t. And there is absolutely no indication that they will any time soon.

Not that I expect to persuade anyone. The death of Red Lion may be greatly exaggerated, but the belief that it has died remains utterly unshakable.


Stay tuned . . . .