NCTA -- The Internet & Television Ass'n v. Frey

• Decision Date: 03 August 2021
• Docket Number: No. 20-1431,20-1431
• Parties: NCTA -- THE INTERNET & TELEVISION ASSOCIATION, Plaintiff, Appellant, v. Aaron M. FREY, in his official capacity as Attorney General of the State of Maine, Defendant, Appellee, Town of Freeport, Maine ; Town of North Yarmouth, Maine, Defendants.
• Court: U.S. Court of Appeals — First Circuit

7 F.4th 1

NCTA -- THE INTERNET & TELEVISION ASSOCIATION, Plaintiff, Appellant,

v.Aaron M. FREY, in his official capacity as Attorney General of the State of Maine, Defendant, Appellee,Town of Freeport, Maine ; Town of North Yarmouth, Maine, Defendants.

No. 20-1431

United States Court of Appeals, First Circuit.

August 3, 2021

Jessica Ring Amunson, with whom Howard J. Symons, Elizabeth B. Deutsch, Joshua D. Dunlap, Jenner & Block LLP, and Pierce Atwood LLP were on brief, for appellant.

Christopher C. Taub, Deputy Attorney General, with whom Aaron M. Frey, Attorney General, was on brief, for appellee.

John Bergmayer and Sara Nolan Collins on brief for Public Knowledge, amicus curiae.

James N. Horwood, Tillman L. Lay, Jeffrey M. Bayne, and Spiegel & McDiarmid LLP on brief for the Community Television Association of Maine, Alliance for Community Media, and Alliance for Communications Democracy, amici curiae.

Before Lynch and Barron, Circuit Judges, and Burroughs, District Judge.^*

BARRON, Circuit Judge.

NCTA -- The Internet and Television Association ("NCTA") appeals from the denial of its request for declaratory and permanent injunctive relief from certain provisions of a Maine state law, "An Act to Ensure Nondiscriminatory Treatment of Public, Educational and Governmental Access Channels by Cable System Operators" ("the Maine Act"). The provisions in question concern both the way that cable system operators must treat channels that qualify as local public, educational, and governmental access channels, or, as they are better known in the world of cable regulation, "PEG" channels, and the obligations of such operators to make cable service available in rural parts of the state. Before the District Court, NCTA argued, among other things, that federal law facially preempts the provisions of the Maine Act at issue. The District Court rejected that contention and denied any relief on that basis. We affirm.

I.

A.

NCTA is a trade association for the cable television industry in the United States. NCTA -- The Internet & Television Ass'n v. Frey, 451 F. Supp. 3d 123, 129 (D. Me. 2020). Its members include operators of cable systems throughout the country, including in Maine. Id. at 129 & n.1.

In general, cable system operators must obtain "permission" from local governments "to install cables under city streets and to use public rights-of-way." Denver Area Educ. Telecomms. Consortium v. FCC, 518 U.S. 727, 734, 116 S.Ct. 2374, 135 L.Ed.2d 888 (1996) (plurality opinion). To do so, a cable system operator usually must first obtain a "franchise" from a "franchising authority" -- the state or local governmental entity that authorizes the construction of a new cable system or the operation of an existing one through a franchise agreement. 47 U.S.C. §§ 541(b)(1), 522(9) - (10).

Under Maine law, municipalities in the state serve as franchising authorities. See Me. Rev. Stat. Ann. tit. 30-A, § 3008. Accordingly, an individual municipality in the state may enter into a franchise agreement with a cable system operator that authorizes the franchisee to operate a cable system in that locality. See id.

NCTA's members have 307 franchises in Maine, each with its own franchise agreement. The terms of a franchise in Maine are generally in place for between ten and fifteen years, at which point the franchising authority and the franchisee may negotiate a renewal of the franchise.

NCTA member Charter has negotiated more than eighty franchise renewals in Maine in the past two years. At the time of the filing of this suit, it was involved in renewal negotiations with over fifty franchising authorities throughout the state.

In addition to the terms of the franchise agreement, a cable system operator in Maine may be subject to requirements that the State has imposed by statute. See, e.g., Me. Rev. Stat. Ann. tit. 30-A, § 3008(3), (5). For example, a Maine statute provides that "a cable system operator may not abandon service or a portion of that service without having given 6 months' prior written notice to the franchising municipality." Id. § 3008(3)(B). The state statutes may themselves establish the terms of the franchise agreements, as a separate Maine statute does in requiring that all franchise agreements in Maine must include "provision for access to, and facilities to make use of, one or more" channels that qualify as PEG channels. Id. § 3010(5).

There is a long history of states and local governments protecting PEG channels. The first cable systems were established in the United States in the 1940s and 1950s, see Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 627, 114 S.Ct. 2445, 129 L.Ed.2d 497 (1994) ; United States v. Sw. Cable Co., 392 U.S. 157, 162 & n.12, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968), and by the 1970s, it was common for local governments to require an operator to set aside capacity for PEG channel use as one of the terms of a franchise, Denver Area, 518 U.S. at 734, 116 S.Ct. 2374 (plurality opinion); Manhattan Cmty. Access Corp. v. Halleck, ––– U.S. ––––, 139 S. Ct. 1921, 1926, 204 L.Ed.2d 405 (2019).

In 1984, when Congress amended the Communications Act of 1934 in order to account for the development of the cable television industry, it codified local entities' ability to require operators to provide PEG channel capacity in exchange for granting a franchise. See 47 U.S.C. § 531(b) ; H.R. Rep. No. 98-934, at 19, 30 (1984), as reprinted in 1984 U.S.C.C.A.N. 4655, 4656, 4667. The House Report that accompanied the bill described these PEG channels as "the video equivalent of the speaker's soap box or the electronic parallel to the printed leaflet" because "they provide groups and individuals who generally have not had access to the electronic media with the opportunity to become sources of information." H.R. Rep. No. 98-934, at 30. The grant of authority to localities to require PEG channels was a key part of Congress's broader effort in the 1984 Act "to assure that cable systems provide the widest possible diversity of information services and sources to the public, consistent with the First Amendment's goal of a robust marketplace of ideas." Id. at 19.

In 2019, the Maine Legislature enacted the Maine Act, which amended the state statutes that regulate the provision of cable service in the state. See An Act to Ensure Nondiscriminatory Treatment of Public, Educational and Governmental Access Channels by Cable System Operators, 2019 Me. Laws 469 (codified at Me. Rev. Stat. Ann. tit. 30-A, §§ 3008(5), (7), 3010(5A), (5B), (5C) ); see also NCTA, 451 F. Supp. 3d at 129. A major focus of that legislation -- as its name suggests -- was the treatment by cable system operators of PEG channels in Maine, given concerns about certain practices by cable system operators regarding those channels. NCTA, 451 F. Supp. 3d at 131.

Specifically, cable system operators had begun moving PEG channels from low-numbered stations, where they had long been located, to the 1300 channel block. Id. The operators also transmitted PEG content in standard definition ("SD") only, notwithstanding the fact that PEG stations produced content in high definition ("HD"). Id. In addition, cable system operators listed PEG channels only as "LOCAL" on their electronic program guides. Id.

Four of the provisions of the Maine Act that took aim at these practices are at issue in this appeal. These four measures are:

"The Basic Tier Provision," which provides that:

A cable system operator shall carry public, educational and governmental access channels on the cable system operator's basic cable or video service offerings or tiers.

Me. Rev. Stat. Ann. tit. 30-A, § 3010(5-A) ; "The Channel Placement Provision," which provides that:

A cable system operator may not separate public, educational and governmental access channels numerically from other local broadcast channels carried on the cable system operator's basic cable or video service offerings or tiers .... A cable system operator shall restore a public, educational or governmental access channel that has been moved without the consent of the originator within the 24 months preceding the effective date of this subsection to its original location and channel number within 60 days after the effective date of this subsection.

Id.; "The HD Provision," which provides that:

A cable system operator shall retransmit public, educational and governmental access channel signals in the format in which they are received from the originator and at the same signal quality as that provided to all subscribers of the cable television service for local broadcast channels. A cable system operator may not diminish, down convert or otherwise tamper with the signal quality or format provided by the originator. A cable system operator shall deliver a public, educational or governmental access channel signal to the subscriber in a quality and format equivalent to the quality and format of local broadcast channel signals carried on the cable television service if provided as such by the originator. A cable system operator shall carry each public, educational or governmental access channel in both a high definition format and a standard digital format in the same manner as that in which local broadcast channels are provided, unless prohibited by federal law.

Id. § 3010(5-B); and "The Electronic Program Guide Provision," which provides that:

A cable system operator, when requested, shall assist in providing the originator with access to the entity that controls the cable television service's electronic program guide so that subscribers may view, select and record public, educational and governmental access channels in the same manner as that in which they view, select and record local broadcast channels. In addition, a cable system operator shall identify public, educational and governmental access channels on the electronic program guide in the same manner as that in which local broadcast channels are identified. This subsection does not obligate a cable

...