Leased Access: Has the Cable Television Carriage Requirement Become Unconstitutional?

AuthorTimmer, Joel

TABLE OF CONTENTS I. INTRODUCTION 2 II HISTORY OF THE LEASED ACCESS REQUIREMENT 3 III. MARKETPLACE CHANGES 9 IV. FIRST AMENDMENT ANALYSIS 12 A. Level of Scrutiny 12 B. Intermediate Scrutiny: Importance of the 18 Government Interest C. Intermediate Scrutiny: Not Burdening Substantially More Speech Than Necessary/Narrow Tailoring 19 D. Intermediate Scrutiny: Promotion of 21 the Government Interest V. CONCLUSION 26 I. INTRODUCTION

Since the early days of the cable television industry in the 1980s, cable operators have been required by law to make a portion of their channel capacity available for leasing by programmers that are unaffiliated with the operator. (1) This leased access requirement allows programmers that do not share any common ownership with a cable operator a means of reaching the operator's subscribers with their programming, even when the cable operator otherwise refused to carry that programming. This requirement was imposed at a time when consumers had few choices to select as sources for television video programming, which meant that a programmer denied carriage by a cable operator may not have had another viable option for reaching consumers in that operator's geographic market. (2) Congress intended that the rule reduce the ability of cable operators, who faced little competition at the time, to control and limit the programming that was available to their subscribers. (3)

Today, however, consumers have a wide variety of sources of video programming, including satellite television services, streaming television services, and other online sources of programming available to them. (4) Thus, a programmer who is denied carriage by a cable operator today still has multiple means of making its programming available to consumers, unlike the conditions for programmers when the rule was first enacted in 1984. This fact undercuts the justifications for leased access, which is intended to promote diversity and competition in the sources of video programming. While the D.C. Circuit upheld the rule against a First Amendment challenge in 1996, (5) changes in the video marketplace since that time may have altered the application of that court's analysis and resulted in the leased access requirement becoming an unconstitutional infringement on the cable industry's First Amendment rights. In fact, the FCC has asked for public comment on this issue multiple times in recent years, (6) and expressed the view that the leased access requirement may no longer be consistent with the First Amendment. (7) Whether that is in fact the case is the primary focus of this article.

Part II of this article offers an overview of the history of the leased access requirement, examining the video programming marketplace as it existed at the time of the requirement's enactment, and how this contributed to the law's justification. Part III then examines the changes in the video programming marketplace since that time, which have created many new ways for video programmers to get their programming to consumers. Part IV discusses First Amendment issues with leased access, including the D.C. Circuit's reasoning in Time Warner Entertainment Co. v. FCC, a 1996 case upholding the constitutionality of the requirement, (8) as well as that of the U.S. Supreme Court in Turner Broadcasting System v. FCC, (9) a 1994 case considering the constitutionality of "must-carry," a similar cable carriage requirement. Finally, Part IV applies those cases and other precedent to the leased access requirement today, to determine whether the law could withstand a First Amendment challenge considering the current video programming marketplace. Because the leased access requirement is content neutral, intermediate scrutiny is the proper standard under which to evaluate the constitutionality of leased access. (10) The intermediate scrutiny standard requires that a law is intended to serve a significant government interest. Leased access is intended to promote diversity and competition, which fulfills this requirement. However, intermediate scrutiny also mandates that the law promotes, or is needed to promote, these government interests, which may not be accomplished by the leased access statute. Thus, the article concludes that the leased access requirement likely is no longer constitutional under the First Amendment.

  1. HISTORY OF THE LEASED ACCESS REQUIREMENT

    At the time that Congress initially considered adopting the leased access requirement in the early 1980s, consumers had limited options for watching video programming. They could watch their local broadcast television stations, which generally included the affiliates of the "Big Three" broadcast networks at the time--ABC, CBS, and NBC, as well as their local PBS station--and larger communities might have one or more independent stations as well. (11) Video cassette recorders (VCRs) were becoming more affordable for many consumers in the 1980s, allowing consumers to rent or purchase videocassettes to watch at home. (12) The cable television industry was also developing in the 1980s, allowing service to become more widely available in many communities in the 1980s. Cable television allowed consumers to view multiple channels of programming selected by the cable operator with the payment of a monthly subscription fee. (13)

    Most communities, however, were served by only a single cable operator; this was due in part to the need to obtain a franchise from a community in order to provide cable service and to the high cost of building more than one cable system in the same area. (14) These factors allowed cable operators to effectively maintain monopolies in many of the communities they served because consumers had only a single operator from which to subscribe for multiple channels of video programming. (15) In addition, other sources of subscription programming, such as direct broadcast satellite (DBS) service or Internet-provided video, were years in the future. (16) Because cable operators owned the facilities that connected subscribers' television sets to cable networks, cable operators were able to exercise "bottleneck control" over the programming services that reached their subscribers. (17) In other words, cable operators had the power to prevent certain programmers from reaching the operator's subscribers with their programming. (18) Programmers denied carriage by a cable operator did not, at that time, have other viable means of providing their programming to that operator's subscribers. (19)

    Congress recognized that cable operators had the incentive to provide a diverse range of program services, as a greater diversity of services would appeal to a greater number of consumers. At the same time, however, Congress observed that cable operators did not have the same incentive to offer a wide range of program sources, particularly when a program service competed with one already provided by the operator or when it offered content the operator did not wish to carry. (20) With this control exercised by cable operators over the channels of programming available to their subscribers, "Congress was concerned that programming networks unaffiliated with the cable operator, or that competed with channels already carried by the cable operator," might be unable "to gain carriage on the limited number of channels available on most systems, and that as a result, there would be a lack of diverse ownership in the programming offered to cable customers." (21)

    These concerns led Congress to enact the leased access requirement so that programmers denied carriage by cable operators would still have the ability to provide their programming to those cable operators' subscribers. (22) The leased access requirement was enacted as part of the Cable Communications Policy Act of 1984 (1984 Cable Act) (23) in order "to assure that the widest possible diversity of information sources are made available to the public from cable systems." (24) The leased access rule requires cable operators to set aside a portion of their channel capacity, generally up to 15% of their channels, for lease by programmers unaffiliated with the cable operator. (25) Because of this, programmers other than those selected by a cable operator have a means of reaching that cable operator's subscribers, thus contributing to the "diversity of information sources" available to cable subscribers. The law allows cable operators to use any unused channels set aside for leased access for programming of their own choice. (26) Cable operators are generally prohibited from exercising editorial control over leased channels. (27)

    Congress revisited the leased access regime when it enacted the Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable Act"), (28) a major purpose of which was "to remedy market power in the cable industry." (29) Congress remained concerned about the monopolies enjoyed by the vast majority of cable operators, (30) but now had an additional concern about how cable operators might abuse that monopoly position to the detriment of unaffiliated programmers. By the early 1990s, the cable industry had become vertically integrated to a significant degree, as cable operators owned many of the most popular cable networks. (31) Cable operators who also owned cable networks had the ability and incentive to give preferential treatment to those networks, such as by giving them a more desirable channel position than other networks, or by refusing to carry unaffiliated networks that competed with those owned by the operator. (32)

    Further, unaffiliated networks that were able to gain carriage often had no choice but to do so on terms dictated by the cable operator, which frequently required those networks to grant the cable operator an ownership interest in their program services as a condition of gaining carriage. (33) Consequently, cable operators' monopoly position provided them with leverage to obtain a financial...

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