D.C. Circuit Opinion Attacks Must-Carry; Decision Upholds FCC Sunset of ‘Viewability’ Rule

The court’s majority opinion, authored by Senior Circuit Judge Harry Edwards, rejected broadcaster arguments that ending the requirement was beyond the commission’s authority, but Judge Brett Kavanaugh also wrote a concurring opinion arguing that the viewability rule and the entire must-carry regime created by the 1992 Cable Act violate cable operators’ First Amendment rights. “When the cable operators’ monopoly collapsed, the constitutional foundation supporting the 1992 Cable Act’s program carriage and non-discrimination regimes collapsed with it,” said Kavanaugh. The concurring opinion “appears to be a not-very-subtle invitation to the cable industry to make another First Amendment run against must-carry,” said Fletcher Heald appellate attorney Harry Cole, in a blog post on the firm’s website (http://bit.ly/JxjQ18).

Both the viewability and must-carry requirements on cable operators are unconstitutional because they no longer have the market power they did when the 1992 Cable Act was passed, Kavanaugh said. “Cable operators today face intense competition from a burgeoning number of satellite, fiber optic, and Internet television providers -- none of whom are saddled with the same program carriage and non-discrimination burdens that cable operators bear.” Kavanaugh made similar arguments in his concurring opinion in Comcast v. FCC (CD May 29 p1), a program carriage case in which he voted against the commission, but also made a First Amendment case against must-carry. “As this Court has flatly stated, cable operators ‘no longer have the bottleneck power over programming that concerned the Congress in 1992,'” said Kavanaugh in his Agape concurrence, quoting from the Comcast decision.

Kavanaugh’s concurrence in Agape -- like his concurrence in Comcast -- puts the must-carry regime on shaky ground, several communications attorneys said Friday. The concurrences mean many of the mandates of the 1992 Cable Act and the foundation of must-carry are “suspect,” said one cable attorney involved in the Agape case. “Judge Kavanaugh’s concurrence lays out the unavoidable pathway for bringing legacy cable rules into conformity with today’s market and the First Amendment,” said Davis Wright cable attorney Paul Glist, who has represented Comcast. “It is time to recognize that rules built for an era long past have outlived their constitutional justification.” Kavanaugh’s concurrence is “a cable operator’s dream and a broadcaster’s nightmare,” said Cole.

However, not everyone agrees on the importance of Kavanaugh’s concurrence. The Agape concurring opinion is so similar to the points Kavanaugh raised in Comcast that it doesn’t raise any new issues, said public interest attorney Andrew Schwartzman, who filed a brief supporting the broadcaster’s side on behalf of the National Hispanic Media Coalition and other public interest groups. “Kavanaugh is on a personal crusade,” said Schwartzman. “This is basically judicial activism.” Senior Circuit Judge Harry Edwards’ majority opinion in Agape doesn’t raise any of the issues brought up by Kavanaugh, and no other judges signed onto his concurring opinion, Schwartzman pointed out: “This is one judge, and he’s citing his own prior opinion.”

The viewability rule at the center of the Agape case required cable operators that provide both analog and digital programming to provide analog signals for all must-carry stations to analog subscribers, said Friday’s D.C. Circuit decision. The rule was scheduled to sunset in 2012, and the FCC let that happen after issuing an NPRM floating the idea of a multiyear extension, the decision said. “The Commission reasoned that, with the increased number of digital subscribers and the availability of cheap or free conversion devices, it was no longer necessary or efficient to continue burdening cable companies with the obligation to downconvert broadcast programs,” said the majority opinion. Broadcasters, including the NAB, opposed the sunset of the rule, arguing that it was beyond FCC authority, ran counter to the statute’s language, and not enough notice of the possibility of sunsetting the law was provided. Public interest groups opposed the sunset because many of the stations affected serve largely minority populations, and the rule could affect their access to information, Schwartzman said. Time Warner Cable and NCTA filed briefs supporting the FCC’s decision.

All of the broadcaster arguments were rejected in the court’s majority opinion. “Petitioners’ argument effectively freezes time in the face of shifting technology and finds no support in the law,” said Edwards. As the rule currently stands, cable operators can satisfy the viewability rule by offering analog customers additional equipment to view the signal. Since the rule wasn’t stayed pending the decision, providers have already adjusted to following it, and the court’s stamp of approval should “have minimal effect,” Davis Wright’s Glist said. Time Warner Cable, the NAB, NCTA and FCC didn’t comment on Friday’s court decision.

The plaintiffs in the case can ask for a reconsideration before the full D.C. Circuit, or try to seek cert with the Supreme Court, said several communications attorneys. However, the unanimous court decision and the lack of constitutional issues related to the viewability rule make it unlikely that either strategy would succeed, said a cable attorney involved in the case. Kavanaugh’s concurrence might also serve as a deterrent to an appeal, said Cole. “It’s probably unlikely that the broadcast parties who took this case to the Circuit will be eager to seek Supreme Court review, since that could tee up the First Amendment issue sooner rather than later,” he said.