Turner Broadcasting System, Inc. v. Fcc, 520 U.S. 180 (1997)

Turner Broadcasting System, Inc. v.

Federal Communications Commission
No. 95-992

Argued October 7, 1996
Decided March 31, 1997
520 U.S. 180

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

Syllabus

Sections 4 and 5 of the Cable Television Consumer Protection and Competition Act of 1992 (Cable Act) require cable television systems to dedicate some of their channels to local broadcast television stations. In Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622 (Turner), this Court held these so-called "must-carry" provisions to be subject to intermediate First Amendment scrutiny under United States v. O’Brien, 391 U.S. 367, 377, whereby a content-neutral regulation will be sustained if it advances important governmental interests unrelated to the suppression of free speech and does not burden substantially more speech than necessary to further those interests. However, because a plurality considered the record, as then developed, insufficient to determine whether the provisions would in fact alleviate real harms in a direct and material way, and would not burden substantially more speech than necessary, the Court remanded the case. After 18 months of additional factfinding, the District Court granted summary judgment for the Government and other appellees, concluding that the expanded record contained substantial evidence supporting Congress’ predictive judgment that the must-carry provisions further important governmental interests in preserving cable carriage of local broadcast stations, and that the provisions are narrowly tailored to promote those interests. This direct appeal followed.

Held: the judgment is affirmed.

910 F.Supp. 734 affirmed.

JUSTICE KENNEDY delivered the opinion of the Court with respect to all but a portion of Part II-A-1, concluding that the must-carry provisions are consistent with the First Amendment:

1. The record as it now stands supports Congress’ predictive judgment that the must-carry provisions further important governmental interests. Pp. 189-196, 208-213.

(a) This Court decided in Turner, 512 U.S. at 662, and now reaffirms, that must-carry was designed to serve three interrelated, important governmental interests: (1) preserving the benefits of free, over-the-air local broadcast television, (2) promoting the widespread dissemination of information from a multiplicity of sources, and (3) promoting fair competition in the television programming market. Protecting non-cable households from loss of regular broadcasting service due to competition from cable systems is important because 40 percent of American households still rely on over-the-air signals for television programming. See, e.g., id. at 663. Moreover, there is a corresponding governmental purpose of the highest order in ensuring public access to a multiplicity of information sources, ibid. and the Government has an interest in eliminating restraints on fair competition even when the regulated parties are engaged in protected expressive activity, ibid. The parties’ attempts to recast these interests in forms more readily proved -- i.e., the Government’s claim that the loss of even a few broadcast stations is critically important and appellants’ assertions that Congress’ interest in preserving broadcasting is not implicated absent a showing that the entire industry would fail, and that its interest in assuring a multiplicity of information sources extends only as far as preserving a minimum amount of broadcast service -- are inconsistent with Congress’ stated interests in enacting must-carry. Pp. 189-194.

(b) Even in the realm of First Amendment questions, where Congress must base its conclusions upon substantial evidence, courts must accord deference to its findings as to the harm to be avoided and to the remedial measures adopted for that end, lest the traditional legislative authority to make predictive judgments when enacting nationwide regulatory policy be infringed. See, e.g., Turner, 512 U.S. at 665 (plurality opinion). The courts’ sole obligation is to assure that, in formulating its judgments, Congress has drawn reasonable inferences based on substantial evidence. Id. at 666. Pp. 195-196.

(c) The must-carry provisions serve important governmental interests "in a direct and effective way." Ward v. Rock Against Racism, 491 U.S. 781, 800. Congress could reasonably conclude from the substantial body of evidence before it that attaining cable carriage would be of increasing importance to ensuring broadcasters’ economic viability, and that, absent legislative action, the free local off-air broadcast system was endangered. Such evidence amply indicated that: a broadcast station’s viability depends to a material extent on its ability to secure cable carriage, and thereby to increase its audience size and revenues; broadcast stations had fallen into bankruptcy, curtailed their operations, and suffered serious reductions in operating revenues as a result of adverse carriage decisions by cable systems; stations without carriage encountered severe difficulties obtaining financing for operations; and the potentially adverse impact of losing carriage was increasing as the growth of "clustering" -- i.e., the acquisition of as many cable systems in a given market as possible -- gave multiple system operators centralized control over more local markets. The reasonableness of the congressional judgment is confirmed by evidence assembled on remand that clearly establishes the importance of cable to broadcast stations and suggests that expansion in the cable industry was harming broadcasting. Although the record also contains evidence to support a contrary conclusion, the question is not whether Congress was correct as an objective matter, but whether the legislative conclusion was reasonable and supported by substantial evidence. Turner, supra, at 665-666. Where, as here, that standard is satisfied, summary judgment is appropriate regardless of whether the evidence is in conflict. Cf. , e.g., American Textile Mfrs. Institute, Inc. v. Donovan, 452 U.S. 490, 523. Pp. 208-213.

2. The must-carry provisions do not burden substantially more speech than is necessary to further the governmental interests they promote. See e.g., Turner, supra, at 662. Appellants say must-carry’s burden is great, but significant evidence adduced on remand indicates the vast majority of cable operators have not been affected in a significant manner. This includes evidence that: such operators have satisfied their must-carry obligations 87 percent of the time using previously unused channel capacity; 94.5 percent of the cable systems nationwide have not had to drop any programming; the remaining 5.5 percent have had to drop an average of only 1.22 services from their programming; operators nationwide carry 99.8 percent of the programming they carried before must-carry; and broadcast stations gained carriage on only 5,880 cable channels as a result of must-carry. The burden imposed by must-carry is congruent to the benefits it affords, because, as appellants concede, most of those 5,880 stations would be dropped in its absence. Must-carry therefore is narrowly tailored to preserve a multiplicity of broadcast stations for the 40 percent of American households without cable. Cf. , e.g., Ward, 491 U.S. at 799, n. 7. The possibilities that must-carry will prohibit dropping a broadcaster even if the cable operator has no anticompetitive motives or if the broadcaster would survive without cable access are not so prevalent that they render must-carry substantially overbroad. This Court’s precedents establish that it will not invalidate the preferred remedial scheme merely because some alternative solution is marginally less intrusive on a speaker’s First Amendment interests. In any event, a careful examination of each of appellants’ suggestions -- a more limited set of must-carry obligations modeled on those earlier used by the Federal Communications Commission; use of so-called A/B switches, giving consumers a choice of both cable and broadcast signals; a leased-access regime requiring cable operators to set aside channels for both broadcasters and cable programmers to use at a regulated price; subsidies for broadcasters; and a system of antitrust enforcement or an administrative complaint procedure -- reveals that none of them is an adequate alternative to must-carry for achieving the Government’s aims. Because it has received only the most glancing attention from the District Court and the parties, prudence dictates that this Court not reach appellants’ challenge to the Cable Act provision requiring carriage of low-power stations in certain circumstances. Pp. 213-225.

JUSTICE KENNEDY, joined by The Chief JUSTICE, JUSTICE STEVENS, and JUSTICE SOUTER, and by JUSTICE BREYER in part, concluded in Part II-A-1 that the expanded record contains substantial evidence to support Congress’ conclusion that enactment of must-carry was justified by a real threat to local broadcasting’s economic health. The harm Congress feared was that broadcast stations dropped or denied cable carriage would be at a serious risk of financial difficulty, see Turner, 512 U.S. at 667, and would deteriorate to a substantial degree or fail altogether, id. at 666. The evidence before Congress, as supplemented on remand, indicated, inter alia, that: cable operators had considerable and growing market power over local video programming markets in 1992; the industry’s expanding horizontal and vertical integration would give cable operators increasing ability and incentive to drop, or reposition to less-viewed channels, independent local broadcast stations, which competed with the operators for audiences and advertisers; significant numbers of local broadcasters had already been dropped; and, absent must-carry, additional stations would be deleted, repositioned, or not carried in an attempt to capture their local advertising revenues to offset waning cable subscription growth. The reasonableness of Congress’ predictive judgment is also supported by additional evidence, developed on remand, indicating that the percentage of local broadcasters not carried on the typical cable system is increasing, and that the growth of cable systems’ market power has proceeded apace, better enabling them to sell their own reach to potential advertisers, and to deny broadcast competitors access to all or substantially all the cable homes in a market area. Pp. 196-208.

JUSTICE BREYER, although agreeing that the statute satisfies the intermediate scrutiny standard set forth in United States v. O’Brien, 391 U.S. 367, 377, rested his conclusion not upon the principal opinion’s analysis of the statute’s efforts to promote fair competition, but rather upon its discussion of the statute’s other two objectives. He therefore joined the opinion of the Court except insofar as Part II-A-1 relies on an anticompetitive rationale. Pp. 225-229.

KENNEDY, J., announced the judgment of the Court and delivered the opinion of the Court, except as to a portion of Part II-A-1. REHNQUIST, C.J., and STEVENS and SOUTER, JJ., joined that opinion in full, and BREYER, J., joined except insofar as Part II-A-1 relied on an anticompetitive rationale. STEVENS, J., filed a concurring opinion, post, p. 225. BREYER, J., filed an opinion concurring in part, post, p. 225. O’CONNOR, J., filed a dissenting opinion, in which SCALIA, THOMAS, and GINSBURG, JJ., joined, post, p. 229.