Playboy Entertainment Group, Inc. v. US

• Decision Date: 07 March 1996
• Docket Number: Civil Action No. 96-94,96-107-JJF.
• Citation: 918 F. Supp. 813
• Parties: PLAYBOY ENTERTAINMENT GROUP, INC., Graff Pay-Per-View Inc., Plaintiffs, v. UNITED STATES of America, United States Department of Justice, Janet Reno, Attorney General, Federal Communications Commission, Defendants.
• Court: U.S. District Court — District of Delaware

918 F. Supp. 813

PLAYBOY ENTERTAINMENT GROUP, INC., Graff Pay-Per-View Inc., Plaintiffs, v. UNITED STATES of America, United States Department of Justice, Janet Reno, Attorney General, Federal Communications Commission, Defendants.

Civil Action Nos. 96-94, 96-107-JJF.

United States District Court, D. Delaware.

March 7, 1996.

A. Gilchrist Sparks, III, Katherine R. Witherspoon, of Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware. Robert Corn-Revere, Jean S. Moore, Ronald J. Wiltsie, II, of Hogan & Hartson L.L.P., Washington, D.C. Burton Joseph, of Barsy, Joseph & Lichtenstein, Chicago, Illinois, for Playboy Entertainment Group, Inc.

William D. Johnston, John W. Shaw, of Young, Conaway, Stargatt & Taylor, Wilmington, Delaware. Charles S. Sims, John Siegal, of Proskauer Rose Goetz & Mendelsohn L.L.P., New York City. Daniel Barsky, Jane Hatterer, New York City, for Graff Pay-Per-View Inc.

Frank W. Hunger, Assistant Attorney General, Gregory M. Sleet, United States Attorney, Patricia C. Hannigan, Assistant United States Attorney, of United States Attorney's Office, Wilmington, Delaware. Theodore C. Hirt, James J. Gilligan, Sarah L. Wilson, of United States Department of Justice, Washington, D.C. Christopher J. Wright, Deputy General Counsel, Daniel M. Armstrong, Associate General Counsel, of Federal Communications Commission, Washington, D.C., for Defendants.

OPINION

FARNAN, District Judge.

I. INTRODUCTION

Presently before the Court is the Application for a Temporary Restraining Order filed by Playboy Entertainment Group, Inc. ("TRO") (D.I. 3).¹ Pursuant to Rule 65 of the Federal Rules of Civil Procedure, Playboy seeks to prevent Defendants the United States, the United States Department of Justice, Attorney General Janet Reno, and the Federal Communications Commission ("FCC")² from implementing or enforcing Section 505 of the Telecommunications Act of 1996 (the "Act")³ pending a preliminary injunction hearing before a three-judge court.⁴ Playboy contends that Section 505 of the Act violates the First Amendment and the Equal Protection Guarantee of the Fifth Amendment of the United States Constitution. The Government opposes the granting of a TRO on the grounds that Playboy has failed to satisfy the TRO standards necessary to bar the enforcement of an Act of Congress. (D.I. 21 at 3.) As provided in the Act, Section 505 becomes effective on March 9, 1996, 30 days after it was signed by the President.

The Court has jurisdiction over this matter pursuant to Section 561 of the Act. This Opinion shall constitute the Court's Findings of Fact and Conclusions of Law.

II. BACKGROUND

A. Section 505 of the Telecommunications Act of 1996

Section 505 provides in its entirety:

SCRAMBLING OF SEXUALLY EXPLICIT ADULT VIDEO SERVICE PROGRAMMING.

(a) REQUIREMENT. In providing sexually explicit adult programming or other programming that is indecent on any channel of its service primarily dedicated to sexually-oriented programming, a multichannel video programming distributor shall fully scramble or otherwise fully block the video and audio portion of such channel so that one not a subscriber to such channel or programming does not receive it.

(b) IMPLEMENTATION. Until a multichannel video programming distributor complies with the requirement set forth in subsection (a), the distributor shall limit the access of children to the programming referred to in that subsection by not providing such programming during the hours of the day (as determined by the Commission) when a significant number of children are likely to view it.

(c) DEFINITION. As used in this section, the term `scramble' means to rearrange the content of the signal of the programming so that the programming cannot be viewed or heard in an understandable manner.

Section 505 requires a video programming distributor ("a cable operator") to scramble "sexually explicit adult programming or other programming that is indecent" which is transmitted on a channel "primarily dedicated to sexually oriented programming," often referred to as an "adult network." Section 505 requires that any such channel must be fully scrambled regardless of whether scrambling has been requested by the customer. If a cable operator does not or cannot comply with this "blocking requirement," it is prohibited from transmitting the adult channel programming during hours of the day when minors are most likely to view it. Section 505 provides that said hours shall be determined by the FCC.⁵ Cable operators must be in full compliance with the Section 505 blocking requirements by March 9, 1996, or risk exposure to possible enforcement by the Government and resulting penalties.

B. History of Section 505

The Telecommunications Act of 1996, enacted on February 9, 1996, resulted from a Congressional effort spanning several years to restructure the telecommunications industry. Extensive debates and hearings were held by both the United States Senate and House of Representatives on numerous issues addressed by the Act, although no hearings were held with regard to the provisions of Section 505.

During the final days of Congress' consideration of the Telecommunications Act, Senator Diane Feinstein of California, on her behalf and on behalf of Senator Trent Lott of Mississippi, introduced Amendment 1269 which ultimately became Section 505 of the Act. Although Senator Feinstein spoke at length about the amendment at the time of its introduction, no hearing or debate was held, and the amendment was voted upon and passed the same evening as its introduction. 141 Cong.Rec. S8167 (daily ed. June 12, 1995).

Senator Feinstein, in addressing the Senate, stated that the blocking requirements required by the amendment were "rather simple and direct ... and commonsense. . . ." The Senator asserted that such an amendment was needed despite other provisions of the Act that addressed similar concerns.⁶ In support of this assertion, Senator Feinstein cited a communication she received from a local city councilman from Poway, California, a suburb of San Diego, who told the Senator that 320,000 cable customers in the Poway area were receiving unscrambled and sexually explicit audio and video cable programming although they had not subscribed to it. Senator Feinstein observed that the Poway experience was not an isolated incident. The Senator noted that in Washington, D.C., unscrambled sexually explicit pornography had been transmitted to non-subscribing cable customers. Although the Senator acknowledged that the National Cable Television Association had adopted guidelines concerning such transmissions (see Aff. D. Brenner ¶ 4), the Senator found that these endeavors were insufficient:

The problem is that there are no uniform laws or regulations that govern such sexually explicit adult programming on cable television. Currently, adult programming varies from community to community, as does the amount and effectiveness of scrambling on each local cable system. Right now, it is up to the local cable operator to monitor itself. This is like the fox guarding the hen house.

... the voluntary guidelines simply recommend that local cable operators "block the audio and video portions of unwanted sexually-oriented premium channels at no cost to the customer, upon request." While this is a somewhat commendable effort on the part of the industry, I do not think it goes far enough.

....

I do not believe that sexually explicit adult programming should automatically be broadcast into a program subscriber's home. On the contrary, I believe that sexually explicit programming should be automatically blocked, unless a program subscriber specifically requests the programming.

In response to the cable industry's concerns about technology problems and extraordinary fiscal costs that the amendment would impose on them, Senator Feinstein advised:

The bottom line, however, is that fully scrambling both the audio and video portion of a cable program is technologically feasible.... With regard to their fiscal concerns, I have never been given any information from the industry to document what the actual costs to cable operators would be.

Senator Feinstein concluded that the amendment gave cable operators options, and the fact that the operators had 30 days to comply gave them ample time:

... the amendment leaves it up to the local cable operator on how and when to come into full compliance....

This amendment also does not become effective until 30 days after enactment, so cable operators will have plenty of time to either fully block the programming, or restrict access to certain times of the day.

Id.

Senator Lott, addressing the Senate after Senator Feinstein, emphasized that he did not "want to exaggerate what this amendment will do. It simply requires cable operators to fully scramble sexually explicit programming if someone has not subscribed for such programming." Id. at S8169.

Attached to the legislative record, although apparently not discussed on the floor, is a memorandum from a legislative attorney for the American Law Division of the Congressional Research Service, Library of Congress, which opined as to the constitutionality of the proposed amendment. Id. at S8168. The legislative attorney reviewed current legal standards concerning restrictions on cable television. He concluded that the amendment was constitutional; however, he cautioned that the phrase "during hours of the day (as determined by the Commission) when children are most likely to view it" could be found to be overly broad, noting that this provision might have to be modified to "prohibit such programming when the ratio of children to adults is significantly high." Id.

The amendment passed by a unanimous vote.

C. The Fundamentals of Cable Television Programming

Cable television is a service that presently can provide cable customers with a choice of over 100 channels of programming. Unlike broadcast television,⁷ cable television is available only...