Time Warner Entertainment v. USA.

• Decision Date: 19 May 2000
• Docket Number: No. 96-5272,96-5272
• Citation: 211 F.3d 1313
• Parties: (D.C. Cir. 2000) Time Warner Entertainment Co., L.P., Appellee v. United States of America, Appellant
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1313

211 F.3d 1313 (D.C. Cir. 2000)

Time Warner Entertainment Co., L.P., Appellee v. United States of America, Appellant

No. 96-5272

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 3, 1999

Decided May 19, 2000

Appeal from the United States District Court for the District of Columbia(No. 92cv02494) Robert D. Joffe argued the cause for appellee. With him on the briefs was Henk Brands. Stuart W. Gold entered an appearance.

Jacob M. Lewis, Attorney, U.S. Department of Justice, argued the cause for appellant. With him on the brief were David W. Ogden, Acting Assistant Attorney General, Mark B. Stern, Attorney, Wilma A. Lewis, U.S. Attorney, Christopher J. Wright, General Counsel, Federal Communications Commission, Daniel M. Armstrong, Associate General Counsel, and James M. Carr, Counsel. William E. Kennard, General Counsel, and C. Grey Pash, Jr., Counsel, entered appearances.

Andrew Jay Schwartzman, Angela J. Campbell and Randi M. Albert were on the brief for amici curiae Center for Media Education, Association of Independent Video and Filmmakers, National Association of Artists' Organizations, National Alliance for Media Arts and Culture, Consumer Federation of America, National Council of Senior Citizens, and Office of Communication, Inc. of the United Church of Christ.

Before: Ginsburg, Rogers and Tatel, Circuit Judges.

Opinion for the Court filed by Circuit Judge Ginsburg.

Ginsburg, Circuit Judge:

The Time Warner Entertainment Company and the United States appeal from portions of the judgment in Daniels Cablevision, Inc. v. United States, 835 F. Supp. 1 (D.D.C. 1993). At issue is the facial constitutionality of two provisions of the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992 Cable Act). The "subscriber limits provision" directs the Federal Communications Commission to limit the number of subscribers a cable operator may reach.47 U.S.C. S 533(f)(1)(A). The "channel occupancy provision" directs the Commission to limit the number of channels on a cable system that may be devoted to video programming in which the operator has a financial interest. Id. S 533(f)(1)(B). Time Warner argues that both provisions facially--that is, no matter how sensitively or sensibly they might be implemented--violate the First Amendment to the Constitution of the United States; the Commission argues the opposite. We conclude that both provisions are facially constitutional.

I. Background

Time Warner and other owners of cable television systems challenged the constitutionality of the subscriber limits, the channel occupancy, and various other provisions of the 1992 Cable Act in Daniels Cablevision. Upon cross-motions for summary judgment, the district court held that the subscriber limits provision is unconstitutional, see 835 F.Supp. at 10, but the channel occupancy provision is constitutional, see id. at 7 & n.11.^* The Government appealed the former ruling while Time Warner appealed the latter.

We consolidated both appeals with Time Warner's petition to this court for review of the regulations the Commission had promulgated to implement the two provisions. See Time Warner Entertainment Co., L.P. v. Federal Communications Comm'n (Time Warner), 93 F.3d 957, 979-80 (D.C. Cir. 1996).In September 1999, however, after the consolidated cases had been scheduled for oral argument, the Commission initiated further rulemaking proceedings with respect to the two provisions. Consequently, we severed Time Warner's statutory challenges from its petition for review of the regulations, held the latter in abeyance pending the completion of the further rulemaking, and heard oral argument on the constitutionality of the two statutory provisions that we address today.

II. Analysis

We review de novo the district court's grant of summary judgment. See, e.g., Aka v. Washington Hospital Center, 156 F.3d 1284, 1288 (D.C. Cir. 1998).

A. The Subscriber Limits Provision 1.The Standard of Review

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.

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").

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.]).

That Report indicated the Congress was concerned about increasing concentration of ownership and control in the cable industry:

... 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........

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....

S. Rep. at 32-33.

Time Warner contends that the Congress's concern that media gatekeepers would "slant" information or fail to provide outlets 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)).

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.

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...