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The Role of the Federal Communications Commission, Congress and the Courts in the Battle between Commercial Broadcasters...

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Title: The Role of the Federal Communications Commission, Congress and the Courts in the Battle between Commercial Broadcasters and Cable Television Operators Must-Carry, The Digital Transition and Beyond
Physical Description: 1 online resource (215 p.)
Language: english
Creator: Deeley, David
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2010

Subjects

Subjects / Keywords: broadcasting, cable, carry, digital, fcc, law, must, regulation
Journalism and Communications -- Dissertations, Academic -- UF
Genre: Mass Communication thesis, Ph.D.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Abstract of Dissertation Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy THE ROLE OF THE FEDERAL COMMUNICATIONS COMMISSION, CONGRESS AND THE COUTS IN THE BATTLE BETWEEN COMMERCIAL BROADCASTERS AND CABLE TELEVISION OPERATORS: MUST-CARRY, THE DIGITAL TRANSITION AND BEYOND By David Joseph Deeley December 2009 Chair: David H. Ostroff Major: Mass Communication The competitive nature of the relationship between commercial broadcast television and cable television (CATV) and how to manage and control it has been a focus of the Congress, the Federal Communications Commission (FCC), and the courts for more than fifty years. The FCC s early view of CATV as a technology of convenience for use until broadcasters took advantage of the ultra-high frequency (UHF) channel allotment proved to be short sighted. As CATV began to develop its own identity as a video content provider the FCC sought to restrict its growth in order to protect broadcasters. Through must-carry rules, market restrictions and signal importation limits, the FCC attempted to tip the competitive scales in broadcasting s favor. These efforts did not hinder, only slowed, CATV s growth. This study examines the history of this important regulatory relationship between the federal government, broadcasters and CATV operators. It attempts to identify lessons to be learned from this complex and evolving relationship. Advances in technology now allows consumers to access traditional broadcast or cable content through new platforms that do not easily fit into the existing regulatory framework. This dissertation also explores the challenges of applying policies designed for an analog telecommunications infrastructure to an emerging digitally dominated world that is replacing it.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by David Deeley.
Thesis: Thesis (Ph.D.)--University of Florida, 2010.
Local: Adviser: Ostroff, David H.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2010
System ID: UFE0041185:00001

Permanent Link: http://ufdc.ufl.edu/UFE0041185/00001

Material Information

Title: The Role of the Federal Communications Commission, Congress and the Courts in the Battle between Commercial Broadcasters and Cable Television Operators Must-Carry, The Digital Transition and Beyond
Physical Description: 1 online resource (215 p.)
Language: english
Creator: Deeley, David
Publisher: University of Florida
Place of Publication: Gainesville, Fla.
Publication Date: 2010

Subjects

Subjects / Keywords: broadcasting, cable, carry, digital, fcc, law, must, regulation
Journalism and Communications -- Dissertations, Academic -- UF
Genre: Mass Communication thesis, Ph.D.
bibliography   ( marcgt )
theses   ( marcgt )
government publication (state, provincial, terriorial, dependent)   ( marcgt )
born-digital   ( sobekcm )
Electronic Thesis or Dissertation

Notes

Abstract: Abstract of Dissertation Presented to the Graduate School of the University of Florida in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy THE ROLE OF THE FEDERAL COMMUNICATIONS COMMISSION, CONGRESS AND THE COUTS IN THE BATTLE BETWEEN COMMERCIAL BROADCASTERS AND CABLE TELEVISION OPERATORS: MUST-CARRY, THE DIGITAL TRANSITION AND BEYOND By David Joseph Deeley December 2009 Chair: David H. Ostroff Major: Mass Communication The competitive nature of the relationship between commercial broadcast television and cable television (CATV) and how to manage and control it has been a focus of the Congress, the Federal Communications Commission (FCC), and the courts for more than fifty years. The FCC s early view of CATV as a technology of convenience for use until broadcasters took advantage of the ultra-high frequency (UHF) channel allotment proved to be short sighted. As CATV began to develop its own identity as a video content provider the FCC sought to restrict its growth in order to protect broadcasters. Through must-carry rules, market restrictions and signal importation limits, the FCC attempted to tip the competitive scales in broadcasting s favor. These efforts did not hinder, only slowed, CATV s growth. This study examines the history of this important regulatory relationship between the federal government, broadcasters and CATV operators. It attempts to identify lessons to be learned from this complex and evolving relationship. Advances in technology now allows consumers to access traditional broadcast or cable content through new platforms that do not easily fit into the existing regulatory framework. This dissertation also explores the challenges of applying policies designed for an analog telecommunications infrastructure to an emerging digitally dominated world that is replacing it.
General Note: In the series University of Florida Digital Collections.
General Note: Includes vita.
Bibliography: Includes bibliographical references.
Source of Description: Description based on online resource; title from PDF title page.
Source of Description: This bibliographic record is available under the Creative Commons CC0 public domain dedication. The University of Florida Libraries, as creator of this bibliographic record, has waived all rights to it worldwide under copyright law, including all related and neighboring rights, to the extent allowed by law.
Statement of Responsibility: by David Deeley.
Thesis: Thesis (Ph.D.)--University of Florida, 2010.
Local: Adviser: Ostroff, David H.

Record Information

Source Institution: UFRGP
Rights Management: Applicable rights reserved.
Classification: lcc - LD1780 2010
System ID: UFE0041185:00001


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5 TABLE OF CONTENTS page ACKNOWLEDGMENTS .................................................................................................. 4 ABSTRACT ..................................................................................................................... 8 CHAPTER 1 INTRODUCTION .................................................................................................... 10 Purpose .................................................................................................................. 19 Literature Review .................................................................................................... 20 Broadcast and Cable History ............................................................................ 21 First Amendment .............................................................................................. 33 Public Interest ................................................................................................... 36 Must-Carry ........................................................................................................ 38 Research Questions ............................................................................................... 44 Methodology ........................................................................................................... 44 Primary Sources ............................................................................................... 45 Secondary Sources .......................................................................................... 45 Dissertation Outline ................................................................................................ 46 2 THE BIRTH OF BROADCASTING ......................................................................... 48 Introduction ............................................................................................................. 48 Congress Cuts the Cord: The Early Regulation of Wireless ................................... 49 ........................................... 52 The First National Radio Conference (1922) .................................................... 54 The Second National Radio Conference (1923) ............................................... 55 The Third National Radio Conference (1924) ................................................... 57 The Fourth National Radio Conference (1925) ................................................. 58 Intercity Radio and Zenith ..................... 61 Congressional Regulation ....................................................................................... 63 The Radio Act of 1927 ...................................................................................... 64 The Communications Act of 1934 .................................................................... 66 Broadcasting with Pictures: The Technology of Television ..................................... 68 Reeling in Network Power ................................................................................ 68 ................................................... 72 The Early Development of Television ............................................................... 75 Conclusion ........................................................................................................ 82 3 BROADCASTING BLOSSOMS AND CABLE COMES OF AGE ............................ 84 Introduction ............................................................................................................. 84 Community Antenna Television (CATV) Fills the Broadcast Gap ........................... 86 Growing Pains: Cable Extends its Reach and Broadcasters Push Back ................ 89

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6 The National Association of Broadcasters (NAB) ............................................. 91 The National Cable & Telecommunications Association (NCTA) ..................... 92 Modeling the Broadcast/Cable Regulatory Process ......................................... 93 The FCC places Cable on the Road to Regulation ........................................... 95 1959 Report and Order ..................................................................................... 96 Carroll Broadcasting v. FCC (19 58) ................................................................ 99 Carter Mountain v. FCC (1963) ...................................................................... 100 The FCC Regulates Cable and Makes the Move to Must-Carry ........................... 101 ......................................................................... 102 ................................................................... 106 U.S. v. Southwestern Cable Co. (1968) .......................................................... 108 Fortnightly Corporation v. United Artists Television, Inc. (1968) ..................... 110 84) ...................................................... 111 Commission Proposals for Regulation of Cable Television (1971) ................. 112 Cable Television Report and Order (1972) ..................................................... 113 HBO, Satellites and Copyright ........................................................................ 115 Cable Act of 1984 ........................................................................................... 117 Must-Carry Goes to Court ..................................................................................... 119 Quincy Cable TV, Inc. v. FCC (1983) ............................................................. 120 FCC Report and Order (1986) ........................................................................ 122 Century Communications Corporation v. FCC (1987) .................................... 123 1992 Cable Act ............................................................................................... 124 Conclusion ...................................................................................................... 129 4 TURNER AND THE TEST OF TIME AND TECHNOLOGY .................................. 132 Introduction ........................................................................................................... 132 Must-Carry Becomes Law ..................................................................................... 134 Turner v. Federal Communications Commission (1997) ................................ 136 The Majority Plus Breyer ................................................................................ 138 ............................................................................ 140 Must-Carry and Direct Broadcast Satellite (DBS) ........................................... 143 The Digitalization of Broadcast Television ............................................................ 144 The Promise of DTV ....................................................................................... 145 Telecommunications Act of 1996 ................................................................... 147 DTV Implementation ....................................................................................... 147 Must-Carry Goes Digital ........................................................................................ 151 DTV Must-Carry Order ................................................................................... 152 Petitions for Reconsideration .......................................................................... 154 CATV and Public Television Reach Agreement ............................................. 156 .................................................................................. 159 The Martin Era (2005 2009) ........................................................................ 159 The Genachowski Era (2009 Present) ......................................................... 163 Conclusion ............................................................................................................ 164 5 CONCLUSION ...................................................................................................... 166

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7 Introduction ........................................................................................................... 166 Research Questions ............................................................................................. 169 Why have Congress and the FCC historically protected the interests of broadcasters over those of cable television? .............................................. 169 Wireless to Broadcast .............................................................................. 172 Radio Turns into Television ...................................................................... 175 Cable Television: A Friend and Foe to Broadcasters ............................... 177 The DTV Transition .................................................................................. 179 Does the majority opinion i n Turner II when applied to the current media landscape, allow broadcasters to seek an expansion of the must-carry rules in DTV to include multicast carriage? ................................................. 180 The First Amendment and Must-Carry ..................................................... 181 The Numbers Game ................................................................................ 185 The FCC and Digital Must-Carry .............................................................. 187 Discussion ............................................................................................................ 189 A History of Broadcast Protection ............................................................ 190 FCC Reform and the Move from Broadcast to Broadband ...................... 195 Future Research ................................................................................................... 198 Conclusion ............................................................................................................ 200 Primary Sources ................................................................................................... 206 Cases ............................................................................................................. 206 Congressional Hearings and Reports ............................................................. 207 Federal Statutes ............................................................................................. 207 FCC Administrative Documents ..................................................................... 207 Secondary Sources ............................................................................................... 209 Books ............................................................................................................. 209 Journal and Magazine Articles ....................................................................... 211 Newspaper Articles ........................................................................................ 213 Websites ......................................................................................................... 214 BIOGRAPHICAL SKETCH .......................................................................................... 215

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10 CHAPTER 1 INTRODUCTION FCC Chairman Dennis Patrick 1 The not too distant future Chairman Patrick made reference to regarding the transition from analog to digital broadcast television (DTV) in the United States proved to be overly optimistic. Instead, this important transition turned out to be one of considerable length. The implementation of DTV in the United States proved to be quite challenging for regulators, industry participants and consumers. 2 The conversion from analog to digital was originally scheduled for completion in 2006. 3 However, Congress and the Federal Communications Commission (FCC) determined this date to be overly optimistic and delayed the move until February of 2009 because consumers and broadcasters were not on track to meet deadline criteria. 4 ion was just weeks away when Congress again intervened and passed the DTV Delay Act and pushed the final transition to June 12, 2009. 5 The transition to DTV offered a new twist to the often contentious competitive connection between commercial broadcasters and the cable television (CATV) industry 1 Statement of FCC Chairman Dennis Patrick on Advanced Television, Tentative Decision and Further Notice of Inquiry in MM Docket No. 87-268, 3 FCC Rcd 6548 (1988). 2 Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service, Fifth Report and Order, 12 F.C.C.R. 12809 (1997) (hereinafter Fifth Report and Order ). 3 I d. at 12850-51. 4 Deficit Reduction Act of 2005, S. 1932, 109 th Cong. 3002 (2006). 5 DTV Delay Act, S. 352, 111th Cong. (2009) (enacted).

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11 This attempts over 50 years to enact and enforce must-carry rules on cable operators. 6 The FCC justified must-carry as essential to protecting the long term viability of broadcasters to serve citizens who relied solely on over-the-air (OTA) reception. 7 The mustcarry/retransmission rules require cable operators to make available their system resources, in the form of bandwidth, to OTA television broadcasters for the carriage of their programming either through must-carry or retransmission consent. 8 The must-carry rules require CATV operators to distribute the broadcast signal of any full-power commercial television station operating within the same television market as the cable system. 9 Must-carry can only be triggered by the local broadcaster and requires the CATV operator to honor the request. 10 A broadcaster can choose to waive its must-carry rights and instead enter into negotiations on a retransmission consent 6 See Television Broadcast Signals by Community Antenna Television Systems, Second Report and Order, 2 FCC 2d 725 (March 4, 1966); Cable Television Report and Order, 36 F.C.C. 2d 141 (Feb. 2, 1972); Cable Communications Policy Act of 1984, Pub. L. 98-549, 98 Stat. 2779; Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460. 7 Id. 8 See 47 U.S.C. 325 (2005) (section of the Communications Act of 1934 allowing commercial television broadcasters to decline must-carry and instead elect to negotiate a carriage agreement with cable operators). 9 47 U.S.C. 534 (2009) (section of the Communications Act of 1934 covering the mandatory carriage requirements for local commercial television signals by local cable systems); See generally 47 U.S.C. 535 (2009) (section of the Communications Act of 1934 codifying the mandatory carriage requirements for the carriage of local noncommercial television signals by local cable systems) 10 Id.

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12 agreement. 11 If retransmission consent negotiations reach an impasse and prove unsuccessful, the broadcaster can withhold its signal from the cable system. 12 When a segment of any industry, in this case the electronic something that directly benefits a competitor within the same marketplace, it is safe to assume that such a requirement will be challenged vigorously rather than followed voluntarily. 13 The cable industry successfully resisted the FCC s attempts to impose must-carry regulations on it beginning in the 1960s. 14 After this series of failed attempts to enforce various incarnations of must-carry, the Supreme Court in Turner Broadcast System v. FCC (1997) (Turner II) narrowly ruled in favor of the Commission and determined the must-carry rules were constitutional. 15 Turner II gave the National Association of Broadcasters (NAB) a much sought after victory over an increasingly competitive cable industry and has ruled the broadcast/cable relationship for more than a decade. However, the transition to DTV in general and the addition of multicasting in particular creates a series of new challenges that require the original rules to be amended in order to remain relevant and effective. 11 47 U.S.C. 325 (2005) (Section of the Communications Act of 1934 that allows commercial television broadcasters to decline must-carry and instead elect to negotiate a carriage agreement with cable operators). 12 Id. 13 See Quincy Cable TV, Inc. v. FCC, 248 U.S. App. D.C. 1 12 (1985); Century Communications Corp. v. FCC, 835 F.2d 292 304 (1987); Turner Broadcasting System, Inc. v. FCC 520 U.S. 180 (1997). 14 Broadcast Signals by Community Antenna Television Systems, Second Report and Order, 2 FCC 2d 725 (March 4, 1966). 15 Turner Broadcasting System, Inc. v. FCC 520 U.S. 180 (1997) (hereinafter Turner II ) (held that the must-carry provisions under the 1992 Cable Act were consistent with the First Amendment because the rules furthered an important governmental interests and did not burden cable operators speech more than necessary to further those interests).

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13 Unfortunately the regulatory answers to the multicasting challenge have not emerged with the clarity of a high definition television (HDTV) picture. For more than a decade the relationship between cable operators and commercial television broadcasters has been defined by the Turner II. 16 The Court held that the must-carry rules as written in the Cable Television Consumer Protection Act of 1992 (1992 Cable Act) were an acceptable infringement on the First Amendment rights of cable o 17 The must-carry rules are codified in section 534 of the Communications Act of 1934 and require all cable operators with a system capacity in excess of twelve channels to carry the signals of all local television stations as long as these local signals do not occupy more than one-third of the cable systems total channel capacity. 18 The Court agreed with Congress and the Federal Communications Commission (FCC) that this First Amendment violation was necessary rving the future viability of OTA broadcasting for households that did not subscribe to a multi-channel video provider such as cable. 19 16 Id. 17 Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (codified in various sections of 47 U.S.C.) (hereinafter Cable Act of 1992 ). 18 See 47 U.S.C. 534 (2009) (section of the Communications Act of 1934 covering the mandatory carriage requirements for local commercial television signals by local cable systems); See generally 47 U.S.C. 535 (2009) (section of the Communications Act of 1934 codifying the mandatory carriage requirements for the carriage of local noncommercial television signals by local cable systems) 19 Id (Congress specified in the Cable Act of 1992 a trio of government interests that are to be served by the must-carry laws: (1) preserving the benefits of local television service; particularly OTA television service; (2) promoting the widespread dissemination of information from diverse sources; and (3) promoting fair competition in the video marketplace).

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14 This significant victory for broadcasters marked a reversal of fortune in more ways than one. First, it ended thirty years of cable industry successes in keeping must-carry from becoming law. 20 Second, and more importantly, must-carry as written at the time of the Turner II decision includes the added element of retransmission consent. 21 The Cable Act of 1992 codified this by amending section 325 of the Communications Act of 1934. 22 In addition to must-carry, Congress also required a cable operator to gain retransmission consent from the commercial broadcasters in its market to determine whether or not the broadcaster wished to opt for must-carry or instead preferred to negotiate a retransmission agreement. 23 Broadcasters that chose to forgo must-carry and instead opted to negotiate carriage terms with cable operators could now seek benefits that could include cash payments for giving cable systems permission to carry their broadcast signal. 24 Retransmission agreements last for three years before they expire and are subject to renegotiation. 25 The latest round of renegotiation is proving to be contentious in many media markets as broadcasters seek to maximize the cash 20 See, e.g. Quincy Cable TV, Inc. v. FCC, 248 U.S. App. D.C. 1 12 (1985) (held that musthout compensation, to transmit to their subscribers every over-theAmendment); Century Communications Corp. v. FCC, 835 F.2d 292 304 (1987) (held that the FCC must-carry rules were invalid as unjustified and unduly sweeping and were not justified by the FCC to further a substantial government interest that outweighed the incidental burden on cable operators First Amendment rights). 21 See 47 U.S.C. 325 (2005) (Section of the Communications Act of 1934 that allows commercial television broadcasters to decline must-carry and instead elect to negotiate a carriage agreement with cable operators). 22 Id. 23 47 U.S.C. 325 (3)(A) (2005). 24 47 U.S.C. 325 (4) (2005). 25 47 U.S.C. 325 (3)(B) (2005).

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15 aspect of retransmission. 26 With broadcasters eying tens of millions of dollars in new revenue through retransmission agreements the cable industry is now preparing to 27 However, this latest battle between these two long standing foes is also complicated by the transition to Digital Television (DTV). 28 When this historic moment came to pass on June 12, 2009 broadcast television i n the United States experienced k and white turned to color over fifty years a go 29 This notable moment was the culmination of a process 26 See generally Robert Marich, Broadcasting & Cable, July 7, 2008, available at http://www.broadcastingcable.com/index.asp?layout=articlePrint&articleID=CA6575703 (the author sites research that predicts broadcast station revenue derived from retransmission fees is expected to grow from 1.5% today to 10% by 2012); Mike Farrell, Sinclair Counts Retrans -For-Consent Push Pays off in 2007, With More Gaines Forecast Multichannel News, Feb. 18, 2008 available at http://www.multichannel.com/index.asp?layout=articlePrint&articleID=CA6533121 (Sinclair retransmission revenue tops $67 million in 2008, up 14%); Nicholas J.C. Pistor, St. Louis Television Station and Charter at Impasse St.. Louis Post-Dispatch, Dec. 21, 2008 available at http://www.stltoday.com/stltoday/news/stories.nsf/stlouiscitycounty/story/917A1A632D7934D38 62575260003F1D6?OpenDocument (last visited Feb. 14, 2009) (Belo Corporation owned station KMOV sought to negotiate a retransmission consent agreement with Charter Cable that would have the cable company pay a penny per day per subscriber or $1.6 million annually). 27 Harry A. Jessell, NCTA Declares War Over Retrans TV Newsday, Sept. 19, 2008 available at http://www.tvnewsday.com/articles/2008/09/19/daily.8/ (National Cable & Telecommunications President Kyle McSlarrow says his organization is preparing to challenge retransmission in response to some broadcasters demanding as much as a 500% increase in fee demands). 28 Ted Hearn, Lawmakers Troubled by Cable, LIN TV Spat: Claim Dispute Could be Confusing Consumers Ahead of DTV Transition Multichannel News, Oct. 22, 2008 available at http://www.multichannel.com/article/87526-Lawmakers_Troubled_By_Cable_LIN_TV_Spat.php (Congress worries that broadcasters and cable operators involved in contested retransmission negotiations that leads to a station being temporarily dropped could confuse viewers and lead them to see unnecessary DTV converter box coupons). 29 See FCC Consumer Facts: Digital Television, at http://www.fcc.gov/cgb/consumerfacts/digitaltv.html (last modified Feb. 8, 2009)(the Commission provides answers to frequently asked questions including: what is digital television, why the switch is taking place, what the difference between analog and digital broadcasting is, and what consumers will need to receive digital television).

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16 considerable in both length and complexity. 30 The major advantage of the transition to Digital Television (DTV) for the public is improved picture and sound quality. 31 Additionally, broadcasters can now choose to multicast and simultaneously provide multiple video streams of programming to viewers over a single channel over their transmitters. 32 Instead of the one channel equals one program limitation of analog broadcasting, a single broadcast station transmitting digitally could choose to multicast and offer as many as five separate Standard Definition (SD) programs to viewers. 33 The Federal Communications Commission (FCC) identified the new features o f DTV and their successful implementation as important to the public interest. 34 These features include increased programming choices and improved picture quality. 35 It can (FCC) Chairman Newton Minnow described broadcast television as in 1961 is now growing vaster. 36 30 2 FCC Rcd 5125 (198 7) 31 See P ETER B. S EEL & M ICHEL D UPAGNE Digital Television, in C OMMUNICATION T ECHNOLOGY U PDATE 104, 108 (August E. Grant & Jennifer H. Meadows eds., 2004) (standard definition -definition television (HDTV) begins with 32 Id. television signals (SDTV) instead of one high-definition (HDTV) signal within the allocated 6 33 Id. at 105. 34 Fifth Report and Order supra note 2. 35 Id. at 12811. 36 Newton N. Minow, Chairman Interest, Address at the National Association of Broadcasters Annual Convention (May 9, 1961) (transcript available at www.americanrhetoric.com/speeches/newtonminow.htm ).

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17 The ability to multicast offers broadcasters a unique opportunity to innovate and reinvent themselves in order to retain their long-term relevance in a quickly evolving and increasingly competitive mass media field. 37 During the transition from black and white to color, local affiliates of the big three broadcast networks dominated the ratings and faced no threat in the form of non-broadcast video competition. 38 The competitive landscape today is much different. Multichannel Video Program Distributors (MVPDs) have evolved in the form of cable operators, Direct Broadcast Satellite (DBS) providers, and telephone companies to complete with broadcasters for viewers. 39 Today more than 86 percent of U.S. television households access hundreds of non-broadcast channels through subscriptions to these various MVPDs. 40 This competition, while currently robust, was -long FCC regulatory agenda centered on the protection of local broadcast television through restrictions on the 37 Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, Thirteenth Annual Report MB Docket No. 06-189, 56, (rel. Jan. 16, 2009) (hereinafter 2006 Video Competition Report) (Multicasting allows a television broadcaster the ability to process and deliver multiple streams of digital television programming simultaneously over a single 6MHz broadcast channel). 38 C HRISTOPHER H. S TERLING & J OHN M ICHAEL K ITTROSS S TAY T UNED : A H ISTORY OF A MERICAN B ROADCASTING (Lawrence Erlbaum Associates, Mahwah, New Jersey, 3 rd ed. 2002). 39 20 06 Video Competition Report at 5. (Approximately 95.8 million of the 110.2 million TV households in the United States, or almost 87 percent, subscribe to an MVPD service). 40 Id. at sion ensees. We also initiated commercial services using copper-based, fiber, and hybrid-fiber coaxial cable distribution technologies for video programming; open vi 40 and electric and

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18 growth of cable television. 41 broadcast agenda has started to show signs of erosion. In February of 2005, the FCC seemed to have put the DTV must-carry issue to rest when under the Chairmanship of Michael Powell it released its Second Report and Order and First Order on Reconsideration (DTV Must-Carry Order) 42 According to the Commission the rules as applied in Turner II failed to address several important issues relevant to this transition including dual carriage, multicast must-carry, and the definition The Commission attempted to resolve these issues in the DTV Must-Carry Order by determining digital must-carry would be similar to the current system and would not add additional carriage requirements on cable systems. 43 The transition to DTV and how the must-carry/retransmission rules will be applied opens a new chapter in the often adversarial relationship between television broadcasters and cable operators. It also provides an excellent opportunity to examine rd in an era of rapid technological change. The FCC regulates both OTA television broadcasting and the cable industry Must-Carry DTV Order is still in effect now that the transition to DTV is complete broadcasters can be expected to 41 L UCAS A. P OWE A MERICAN B ROADCASTING AND THE F IRST A MENDMENT 216 (University of television fit into the scheme of broadcasting, but when it did its attitudes were clear: fear and loathing"). 42 Id. 43 Id.

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19 continue to pressure Congress and the FCC to expand them to include additional programming streams. 44 Purpose Change is nothing new when it comes to the technologies that power the delivery of media content in the United States. However, the framework governing such technologies has remained relatively static in its evolution as broadcast radio and television and to a lesser degree cable dominated the marketplace for decades. Innovation is proving to be a threat to this domination as new devices that connect to content through high-speed wired or wireless networks combine with increased competition in the MVPD market from direct broadcast satellite services and the entry of telephone providers into the distribution of video content. This study will examine the competitive relationship between commercial broadcast television and the cable industry, focusing on the issue of must-carry as it relates to the overall governance of the mass media in the United States. We have enjoyed a period of regulatory tranquility that can be attributed to the more than fifty years of dominance of broadcast radio and television. This stability of core transmission technology, along with the long standing influence of the industry players on 44 See 47 U.S.C. 534 (2005) (section of the Communications Act covering the mandatory carriage requirements concerning the carriage of local commercial television signals by local cable systems); 47 U.S.C. 535 (2005) (section of the Communications Act covering the mandatory carriage requirements concerning the carriage of local noncommercial television signals by local cable systems). And See Carriage of Digital Television Broadcast Signals: on Reconsideration, CS Docket No. 98-120, 3 n.10 (rel. Feb. 23, 2005) (hereinafter DTV MustCarry Order ) (citing 47 U.S.C. 534 broadcast television signals, such as the authorization of broadcast high definition television (HDTV), it shall conduct a proceeding to make any changes in the signal carriage requirements of cable systems needed to ensure that cable systems will carry television signals complying with such modified standards in accordance with the objectives of this section).

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20 government policies has led to little contention. There is a close relationship between industry organizations such as the National Association of Broadcasters (NAB) and Congress, the FCC, and the courts, and these players have embraced the status quo. The recent switch from analog to digital broadcast television provides a prime example of how long standing regulations and analog solutions fail to meet the challenges posed by digital technologies. This research will explore the roles of the FCC, Congress and the courts in the regulation of cable and broadcast television. It will also examine how the must-carry rules translate into DTV and could be expanded to include the carriage of additional digital broadcast programming. Noticeably absent from this study is the role of the president The influence of the president on broadcast and cable regulatory policy is dwarfed in comparison to the roles played by the legislative and judicial branches. and designate the chair, the executive branch has largely been a passive bystander to the FCC, Congress and the courts in the areas central to this study Literature Review Many scholars have written about the laws and regulations that govern telecommunications. The literature talks about how these regulations developed historically, how they are created politically, and what effect they have. Different works have looked at the economic perspectives of the businesses, the scientific developments of the different technologies, and the competing interests of the different media. Literature evaluated for this research includes general writings on the history of broadcast and cable, analysis of the First Amendment implications in communication

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21 laws, definitions and studies of the evolution of the public interest standard, and works specifically addressing the must-carry rules. Broadcast and Cable History A great deal of research on the history of broadcast regulation has been done. However, much of the analysis begins with the Radio Act. There is much less attention paid to the preThe Beginning of Broadcast Regulation in the Twentieth Century A Tower in Babel: A History of Broadcasting in the United States, Volume 1 to 1933 45 Both authors provide detailed histories of the pre-Radio Act of 1927 era. A major focus of both books is the impact of World War I on radio, the role of Herbert Hoover and the National Radio Conferences, and the legislative debate leading to the passage of the Radio Act of 1927. The difficulty in obtaining much of the primary documentation of the legislative history of the Radio Act of 1927 was aided greatly from the citations contained in these two books. While not as widely cited, Bensman is able to draw a useful parallel to early radio and the current Internet regulatory debate. 46 45 M ARVIN R. B ENSMAN T HE B EGINNING OF B ROADCAST R EGULATION IN THE T WENTIETH C ENTURY (McFarland & Co. 2000); E RIK B ARNOUW A T OWER IN B ABEL : A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME 1 TO 1933 (Oxford University Press 1966) (Barnouw authored two more volumes in his history of broadcasting in the United States, The Golden Web Volume II 1933 to 1953 and The Image Empire Volume III from 1953). 46 B ENSMAN supra note 45 at 222 (looked at the role of Hoover in early radio his concerns about the impact of radio on society is equally relevant to the Internet in the 21 st century).

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22 Freedom of the Air and the Public Interest: First Amendment Rights in Broadcasting to 1935 the enactment of the Communications Act of 1934. 47 Benjamin makes numerous 48 Her earlier essay, Working it Out Together: Radio Policy from Hoover to the Radio Act of 1927 is even more on point. 49 Annual Radio Conferences and the high level of consultation between Hoover and the radio industry. Yet, there is not specific mention of localism. In Clarence C. Dill: The Life of a Western Politician, Kerry Irish documents the role of Senator Dill in the drafting of the Radio Act. 50 Irish devotes an entire chapter of and his leadership that led to the balancing business and government concerns into legislation that helped define the role of broadcasting in American society for decades to come. 51 47 L OUISE B ENJAMIN F REEDOM OF THE A IR AND THE P UBLIC I NTEREST : F IRST A MENDMENT R IGHTS IN B ROADCASTING TO 1935 (Southern Illinois University Press, 2001). 48 Id. -industry protection of its economic survival and the promotion of technological advancement. Eventually there would be 49 Louise Benjamin, Working It Out Together: Radio Policy from Hoover to the Radio Act of 1927 Journal of Broadcasting & Electronic Media, Spring 1998. 50 K ERRY E. I RISH C LARENCE C. D ILL T HE L IFE OF A W ESTERN P OLITICIAN (Washington State See Also Donald G. Godrey, Senator Dill and the 1927 Radio Act, 23 Journal of Broadcasting 477 (1979). 51 Id. at 82.

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23 Several books proved useful in providing a business perspective of the emerging radio industry during its rapid growth during the 1920 RCA 52 Looking Ahead 53 The General: David Sarnoff and the Rise of the Communication Industry 54 and Big Business and Radio 55 by Gleason Archer. Journal writings from Philip Napoli 56 Erwin G. Krasnow and Jack N. Goodman 57 Steven Phipps 58 C. M. Jansky Jr. 59 and Robert Corn-Revere 60 offered multiple voices 52 R OBERT S OBEL, RCA (Stein and Day 1986) (a comprehensive history of RCA from its formation through the mid53 D AVID S ARNOFF L OOKING A HEAD : T HE P APERS OF D AVID S ARNOFF (Dr. Jerome B. Wiesner ed., McGraw-Hill 1968) (while Sarnoff in able to present himself in the best possible light, the opportunity to view a body of work that parallels the history of broadcasting in the United States is still valuable). 54 K ENNETH B ILBY T HE G ENERAL : D AVID S ARNOFF AND THE R ISE OF THE C OMMUNICATIONS I NDUSTRY (Harper & Row 1986) (Bilby classified this work as an unauthorized biography of 55 G LEASON A RCHER B IG B USINESS AND R ADIO (Arno Press 1971) (this is a broader analysis of the radio industry beyond Sarnoff and RCA). 56 Philip M. Napoli, The Localism Principle in Communications Policymaking and Policy Analysis: Ambiguity, Inconsistency, and Empirical Neglect Policy Studies Journal, September He briefly touches on early radio before devoting most of his article to post 1934 broadcasting.) 57 Erwin G. Krasnow & Jack N. Goodman, Holy Grail, 50 F ED C OMM L.J. 605 (1998)(the authors begin their chronological view of the public interest standard with the Radio Act of 1912, but the focus of the article is after the Radio Act of 1927 and concludes with the view that while successful, the public interest standard is 58 of the Historical Basis for the Scarcity of Channels Concept, 45 J. of Broad. & Electronic Media 57 (2001) (Discussing the preference of high-powered stations to see the elimination of low-powered stations to lessen interference during the chaotic period prior to the Radio Act of 1927. The influence of the major radio companies on the government is also examined). 59 C. M. Jansky, Jr., The Contribution of Herbert Hoover to Broadcasting, 1 J. of Broad. 241 (1956-1957) (These are remarks made by Jansky on behalf of Hoover when he accepted the 1957 Award for Distinguished Service from the National Association of Radio and Television

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24 of analysis of this era of broadcasting without specific mention of localism prior to the passage of the Radio Act of 1927. This review also included a series of newspaper articles that parallels the period leading up to the passage of the Radio Act. 61 Several websites provided access to a variety of useful material from the era of radio history covered in this project. 62 wide broadcasting system). 60 Broadcasting and the Public Interest: Hearing Before the S. Commerce, Science and Transportation Comm., 108 Cong. (2003) (statement by Robert Corn-Revere) (Corn-Revere begins his testimony on future recommendations regarding the history of the public interest regulatory model with a brief history that includes the terms origins from the Interstate Commerce Committee). 61 W ALL S T J., Feb. 28, 1922 at 10 (quotes Hoover as realizing the use of radio for communication between single individuals was a No Danger of a Radio Monopoly, W ALL S T J., Mar. 26, 1924 at 10 (AT&T interested in protecting its patents and was not interested in creating a radio monopoly); Secretary Hoover Broadcasts His Views on Radio Situation, N.Y. T IMES Apr. 13, 1924, at XX17 (Hoover commented on preventing monopolies, censorship of the airwaves and trying to prevent Interference); For Control of Radio: Representative Seller Says He Will Urge Regulation of Broadcasting, N.Y. T IMES Sep. 5, 1924 at 16 ( of radio is becoming more and more a public utility, and the public must have a definite voice in i largely uncontrolled.); Coolidge Favors Federal Control of Air for Radio, N.Y. T IMES Oct. 8, 1924 important to maintain government control.); Hoover Opposes U.S. Full Radio Control, W ASH P OST Dec. 7, 1924, at EF6 (Hoover told Congress he was withdrawing his support of radio regulation because of rapid change in the industry. He said federal regulation should not be Hoover Wants New Check on Radio Stations, C HRISTIAN S CIENCE M ONITOR Sep. 16, 1925, at 8 (Hoover expressed interest in developing a way to determine how a radiocasting station is serving the public interest.); Congress Expected to Pass New Bill Regulating Radio, N.Y. T IMES Dec. 6, 1925, at XX16., Coolidge Opposes More Commissions, N.Y. T IMES Apr. 28, 1926, at 24 (President Coolidge was opposed to the creation of an independent commission to regulate radio.); Radio Control Bill Action Forecast by Senator Dill, C HRISTIAN S CIENCE M ONITOR May 8, 1926, at 2 (reports on the difference between the dependent commission). 62 See generally http://www.fcc.gov/mb/audio/decdoc/engrser.html (the section on early radio offers access to ion to Broadcasting, http://www.fathom.com/feature/2219/ (provides access to the transcript and audio of an interview with Herbert Hoover discussing his view of broadcast history)., United States

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25 The Politics of Broadcast Regulation is a book that takes an analytical approach to regulation of broadcast. The authors created their own model of the broadcast regulatory process and identified five key participants in the process: the FCC, the broadcast industry, the courts, the public, and the White House. 63 Their purpose in creating this model was to create a construct to help explain how telecommunications policy is created and the role of politics in the process. 64 At the time of publication, little work had been done looking at the political background of telecommunication regulation and this work filled that void. Though the book does not directly address the must-carry rules or digital television, the research is still invaluable in showing how the different players come together to establish communications law. In TV or CATV? A Struggle for Power Attorney Edward V. Dolan examines the role Congress and the FCC played in the early development of broadcasting and eventually cable television. 65 He describes a very favorable regulatory climate for the initial commercialization of the airwaves and the successful promotion of the interests of the corporate broadcasting pioneers. 66 This trend continued as television arrived and became the dominant source for entertainment and news in the United States. 67 In his view, the relationship between regulators and the industry focused almost exclusively Early Radio History, http://earlyradiohistory.us/sec023.htm (access to html versions of the reports from the four National Radio Conferences). 63 E RWIN G. K RASNOW & L AWRENCE D. L ONGLEY T HE P OLITICS OF B ROADCAST R EGULATION 23 64 Id. at 2. 65 E DWARD V. D OLAN TV OR CATV? A S TRUGGLE FOR P OWER (National University Publications Associated Faculty Press, Inc. 1984). 66 Id. 67 Id.

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26 on serving the private interest of profit at the expense of the public interest. 68 Dolan evolution into a competitive threat to broadcast television s massive audience. 69 He -way communication services and the favorable legislative and regulatory treatment from Congress and the FCC. 70 In Cable Television and the FCC, Don R. Le Duc provides an historical overview of the relationship between cable and broadcast television. 71 He begins with the Radio Act of 1927 and proceeds through the advent of broadcast television, and later cable. 72 The author identifies cable as the first threat to the broadcast regulatory structure. 73 He further notes that the justifications for broadcast regulation cannot be applied to cable because cable is unlicensed and does not utilize public airwaves to deliver its content. 74 Le Duc makes the argument that cable should be freed from the repressive regulatory fairly compete in the marketplace. 75 tten in 1973, it is 68 Id. 69 Id. 70 Id. 71 D ON R. L E D UC C ABLE T ELEVISION AND THE FCC (Temple University Press 1973). 72 Id. 73 Id. at 1. 74 Id. at 72. 75 Id. at 187-88.

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27 the problems that this competition would produce. Le Duc followed up with a second book, entitled Beyond Broadcasting: Patterns in Policy and Law i n which he raises broad questions about the role of regulation in broadcasting. 76 In his introduction, Le Duc says he hopes to look at what different communications regulations have achieved, and to also consider how regulation has limited competition or hindered the industries that are regulated. 77 Le Duc studies a broad range of regulations from the licensing process to content control. 78 The author points out that regulation has had both negative and positive effects within the market, but seems to conclude that some degree of regulation is necessary. 79 Gary S. Lutzker is a telecommunications analyst with the New York City Department of Telecommunications and Energy. In his 1994 article, The 1992 Cable Act and the First Amendment: What Must, Must Not, and May Be Carried, the author -carry rules. 80 The article provides a history of must-carry dating back to the 1960s and ng the must-carry rules on 76 D ON R. L E D UC B EYOND B ROADCASTING : P ATTERNS IN P OLICY AND L AW (Longman Inc. 1987). 77 Id. at 2. 78 Id. at 43-50 and 57-66. 79 Id. at 149 and 161. 80 Gary S. Lutzker, The 1992 Cable Act and the First Amendment: What Must, Must Not, and May Be Carried, 12 Cardoza Arts & Ent., L.J. 467, (1994).

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28 constitutional grounds. 81 The article was written during the time when the 1992 Cable Act was facing major legal challenges and on the eve of the Turner I decision. 82 Must Carry and the Courts: Bleak House, The Sequel is an analysis of the System over the must-carry retransmission consent rules of the 1992 Cable Act. 83 The author, Nicholas W. Allard, an attorney and former advisor to the United States Senate Judiciary Committee, concludes that, regardless of the outcome of the legal challenges to the 1992 Cable Act, the failure of Congress to pass comprehensive reform legislation for the telecommunications media was distressing. 84 This lack of regulation was detrimental to the transition from a monopoly dominated model of media markets to one of competition by multiple sources. 85 Allard wrote this article prior to the passage of the Telecommunications Act of 1996 which would address many of the concerns raised in the article. Though now outdated because of significant changes in the law, the article is a well reasoned argument for congressional legislation promoting competition. 86 Lawrence H. Winer, an Arizona State University Law professor, addresses his perceived failure of the Court to adequately define the First Amendment rights of cable operators in comparison with previous decisions which outlined those rights for the print 81 Id. 82 Id. 83 Nicholas W. Allard, Must Carry and the Courts: Bleak House, The Sequel, 13 Cardoza Arts & Ent., L.J. 139 (1994). 84 Id. 85 Id. at 155. 86 Id.

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29 industry and for broadcasters. 87 His article, The Red Lion of Cable, and Beyond? Turner Broadcasting v. FCC, is a review of the Turner and an argument for clear definitions of the rights of cable operators. 88 The article discusses how Congress learned from Quincy and Century and carefully tailored the language used in the 1992 Cable Act to protect it from similar successful legal challenges. 89 The author concludes however, that beyond congressional word choice, cable technology needed the Court to give cable and future technologies the same First Amendment protections given to print media. 90 was one where technology was rapidly developing and the law was failing to develop at a comparable rate. 91 The Erosion of First Amendment Protections of Speech a was written in 1995 and attacks the must-carry provisions of the 1992 Cable Act. 92 The author, Michael W. Maseth, contends that must-carry rules were unconstitutional because they were contentbas ed restrictions that infringed on the First Amendment rights of cable operators. 93 some consumers may be unable to afford cable television, this economic disparity 87 Lawrence H. Winer, Red Lion of Cable, and Beyond? Turner Broadcasting v. FCC, 15 Cardoza Arts & Ent., 1 (1994). 88 Id. 89 Id. at 17. 90 Id. at 68. 91 Id. at 67. 92 Michael W. Maseth, The Erosion of First Amendment Protections of Speech and Press: The 24 Cap. U. L. Rev. 423 (1995). 93 Id.

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30 argument is based on the faulty premise that the public can receive information only 94 Instead, the author suggests that cable is but one option in a multiple media world. 95 Taking a historical perspective, The Cable Communications Policy Act of 1984: A Balancing Act of the Coaxial Wires, reviews the first amendment of the 1934 Communications Act to include cable-specific regulation. 96 The article, written by Michael I. Meyerson, is valuable because it discusses the initial response to the emerging technology and the challenges that the advent of cable presented. 97 Meyerson, a law professor at the University of Baltimore School of Law, was among the first to conclude that cable was a unique entity in communications and must be considered separate from broadcasters and common carriers. 98 Jerome A. Barron, a professor at the George Washington University School of Law, analyzed the Turner II to competing First Amendment interests. 99 He supports Justice Breyer that new technologies will have new participants, each with their own First Amendment interests. 100 The author agrees with Breyer that the various stakeholders in any First 94 Id. at 434. 95 Id. 96 Michael I. Meyerson, The Cable Communications Policy Act of 1984: A Balancing Act of the Coaxial Wires, 19 Ga. L. Rev. 543 (1985). 97 Id. 98 Id. at 545. 99 Jerome A. Barron, The Electronic Media and the Flight From First Amendment Doctrine: Justice B 31 U. Mich. J.L.Ref. 817 (1998). 100 Id.

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31 Amendment debate should each have a voice and, although some freedoms may be infringed, the overall result should be one that balances all interests. 101 Much has been written about the evolution of the cable industry. Pioneers of Cable Television talks about the birth of cable technology in the hills of Pennsylvania and profiles the ten men who forged the new technology and their entrepreneurial spirit. 102 Cable Cowboy documents the growth of cable as a competitor in the media marketplace thanks to the vision of John Malone. 103 Malone took a small western Texas cable company called TCI and through his aggressive acquisition of additional cable systems, turned TCI into a leader in the cable industry and turned cable into a recognized force in media. 104 Similarly, Comcasted, tells the story of Ralph and Brian Roberts who built Comcast, the largest cable operator existing today. 105 Finally, The Rise of Cable Programming discusses how cable programming has evolved and how, in the beginning, it simply mirrored or reran broadcast television, but eventually came to make its own, unique contribution to content. 106 Perhaps the most exhaustive study of the cable industry is Blue Skies: A History of Cable Television, written by Patrick R. Parsons. 107 Parsons provides a historical 101 Id. 102 B RIAN L OCKMAN & D ON S ARVEY P IONEERS OF C ABLE T ELEVISION (McFarland & Company 2005). 103 M ARK R OBICHAUX C ABLE C OWBOY (John Wiley & Sons, Inc. 2002). 104 Id. 105 J OSEPH N. D I S TEFANO C OMCASTED (Camino Books Inc. 2005). 106 M EGAN M ULLEN T HE R ISE OF C ABLE T ELEVISION (University of Texas Press 2003). 107 P ATRICK P ARSONS BLUE S KIES : A H ISTORY OF C ABLE T ELEVISION (Temple University Press 2008).

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32 study of the development of the cable industry. 108 Parsons documents the key players, the major technological developments and the public responses to cable in a chronological order that spans from the 1930s with the beginnings of the technology to the present cable dominated marketplace. 109 This book is essentially an encyclopedia of cable, going so far as to document how and when different channels and programs were introduced. 110 In the view of many scholars, the seminal examination of broadcast history in the United States from its inception through the late 1960s is a three volume chronology authored by Erik Barnouw. 111 In volume one A Tower in Babel the former Columbia University professor looks at broadcasting from its humble beginnings through 1933. 112 Barnouw writes about the development of broadcast technologies, their evolution and the eventual rise of the commercial broadcast model. 113 He focuses on the people behind the innovation and those seeking to regulate them. 114 He effectively uses historical events to illustrate the impact of broadcasting on American society. 115 108 Id. 109 Id. 110 Id. 111 E RIK B ARNOUW A T OWER IN B ABEL : A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME 1 TO 1933 (Oxford University Press 1966): E RIK B ARNOUW T HE G OLDEN W EB: A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME II 1933-1953 (Oxford University Press 1968 ); E RIK B ARNOUW T HE I MA GE M AKERS : A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME III F ROM 1953 (Oxford University Press 1970). 112 A T OWER IN B ABEL at 45. 113 Id. 114 Id. 115 Id.

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33 Volume two, The Golden Web chronicles a very active period of growth for network radio that included the passage of the Communications Act of 1934, World War II, and the beginning of broadcast television. 116 In his final volume, The Image Empire Barnouw compared the American radio and television broadcast system to the human nervous system. 117 He said broadcasting was capable of provoking the spectrum of human emotion as well as inciting people to action. 118 He concludes his study with concern that the dominance of the commercial broadcast model on American culture and offers suggestions for strengthening public television as counter balance. 119 First Amendment Cable Television and the First Amendment, also written by Patrick R. Parsons, examines what relationship cable television has with the First Amendment. 120 In one of the first books to explore this topic, Parsons begins by discussing the development of 121 The author then goes on to look at the different First Amendment issues in the regulation of cable including unauthorized retransmission, and 122 He then looks at different media and different ways or models of how the First Amendment could apply to cable 116 THE G OLDEN W EB supra note 111 at 34. 117 THE I MAGE M AKERS supra note 111 at 3. 118 Id. 119 Id. at 342-344. 120 P ATRICK P ARSONS C ABLE T ELEVISION AND THE F IRST A MENDMENT (Lexington Books 1987). 121 Id. 122 Id. at 30-32.

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34 television. 123 Parsons argues that the print model is best suited to the cable industry but acknowledged that it was unlikely that the government would eliminate all of the regulations already in place. 124 In Red Lions, Tigers and Bears: Broadcast Content Regulation and the First Amendment former FCC Chairm an Charles D. Ferris and Terrence J. Leahy look at the First Amendment as it relates to broadcasting. 125 The article looks at the legal arguments for and against The Fairness Doctrine and why this contentious policy was upheld by the Supreme Court in Red Lion 126 The authors reach the interesting conclusion that broadcasters pick and choose when to claim First Amendment protection based on when it best suits their interests. 127 The authors point out that Turner is an excellent example of how broadcasters do not care about the First Amendment rights of other media such as cable, when the exercise of those rights 128 C. Edwin Baker writes in Media Concentration: Giving Up on Democracy that media concentration laws have significantly changed in the last two decades. 129 Baker defines this change in three areas including the reduction in legal restrictions on 123 See P ARSONS supra note 120 (The author considers the Broadcast Model, the Print Model, the Public Forum Model, the Public Utility Model, and the Equitable Protection Model). 124 Id. at 150. 125 Charles D. Ferris & Terrence J. Leahy, Red Lions, Tigers and Bears: Broadcast Content Regulation and the First Amendment, 38 Cath. U.L. Rev. 299 (1989). 126 Id. 127 Id. at 326. 128 Id. at 32627 129 C. Edwin Baker, Media Concentration: Giving Up on Democracy, 54 Fla. L. Rev. 839 (2002).

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35 ownership concentration, the change in criteria used to define objectionable concentration, and a shift in perspective that now has courts viewing media entities as 130 Baker concludes that these changes are focused on improving the economic success of the various media and do not necessarily reflect policy that is of benefit to public interest. 131 American Broadcast Regulation and the First Amendment: Another Look, written by Charles H. Tillinghast, is an argument for the return of the Fairness Doctrine or a similar policy. 132 Tillinghast suggests that broadcasters will always be licensees of the government and that therefore they are subject to increased regulation. 133 Tillinghast argues that regulations such as the Fairness Doctrine benefit the viewing public. 134 While his thesis fails to address the argument that other technologies do not have the same licensee status and therefore should not be subject to the type of regulation Tillinghast suggests, this book is particularly valuable for its history of broadcast regulation in America. 135 In The Rise and Demise of the Technology Specific Approach to the First Amendment, Christopher S. Yoo reviews how the Court developed a special 130 Id. at 841-42. 131 Id. at 875-76. 132 C HARLES H. T ILLINGHAST A MERICAN B ROADCAST R EGULATION AND THE F IRST A MENDMENT : A NOTHER L OOK (Iowa State University Press, 2000) 133 Id. 134 Id. 135 Id.

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36 perspective on the First Amendment to be applied only to broadcast technology. 136 Yoo looks at the spectrum scarcity rationale and the argument that broadcast technology reasons are no longer persuasive to support a unique First Amendment standard for broadcast technology. 137 of technological innovations such as digital television, the Vpossible to convey virtually any type of communication through virtually any means of transmission. 138 Yoo concludes that a technology driven approach to the First Amendment like the broadcast model can no longer be applied. 139 Public Interest In Public Interest Regulation in the Digital Age, Daniel Patrick Graham looks at the applicability of the longstanding public trustee model of media regulation as we transition to digital television. 140 The author points out that the FCC made a conscious choice to allow broadcasters to be the focus of the move to digital programming because of their saturation in the market and because the upgrade of broadcasters would enable them to remain a competitive force in the digital age. 141 This article was 136 Christopher S. Yoo, The Rise and Demise of the Technology Specific Approach to the First Amendment, 91 Geo. L.J. 245 (2003) 137 Id. 138 Id at 355. 139 Id at 356. 140 Daniel Patrick Graham, Public Interest Regulation in the Digital Age, 1 CommLaw Conspectus 97 (2003). 141 Id. at 100.

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37 particularly valuable for its discussion of transition to digital transmission and why the transition was mandate d. 142 Television and the Public Interest was written in March of 2000 and is Cass in the new media world where broadcasters hold less and less of an elite position. 143 As th e role of broadcasters diminishes, Sunstein questions whether digital broadcasters should have public interest obligations. 144 Sunstein concludes that while some regulation is necessary, it should be guidance as opposed to mandate. 145 In the authors, Erwin G. Krasnow and Jack N. Goodman review the history and evolution of the Public Interest standard and attempt to use statutes, case law and regulatory activity to define the indefinable. 146 The authors note that scarcity is becoming less and less of a legitimate rationale for content based regulation such as the Fairness Doctrine. 147 They the government to ensure that individual broadcast stations serve particular 148 In examining the role of the Public Interest standard in the digital age, the 142 Id. 143 Cass R. Sunstein, Television and the Public Interest, Calif. L. Rev. 499 (2000). 144 Id. 145 Id at 563-64. 146 Erwin G. Krasnow & Jack N. Goodman, Holy Grail, 50 Fed. Comm. L.J. 605 (1998). 147 Id. at 63435 148 Id. at 635

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38 why it will continue to work and apply in the new media landscape. 149 Must-Carry Thomas W. Hazlett, the former Director of the Program on Telecommunications Policy, Institute of Government Affairs at the University of California at Davis, wrote a prescient article on the potential dangers of extending must-carry rights of broadcasters to digital television. 150 In he notes that the decision in Turner does not address whether must-carry will apply when the transition to DTV is complete. 151 -carry rules should apply to. 152 Hazlett -carry rules are imposed and su 153 To illustrate this, the author points to the convergence of technologies such as cable wireless, satellite and wireline telephone systems in the delivery of video content. 154 In I Want My MTV: The Debate over Digital Must-Carry, Harris Aaron talks about the transition to digital television and the ability of the government to apply must-carry 149 Id. at 630. 150 Thomas W. Hazlett, 8 Sup. Ct. Econ. Rev. 141 (2000). 151 Id. 152 Id. at 202. 153 Id. at 201. 154 Id. at 201-02.

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39 rules to DTV. 155 Aaron focuses on the difficulties of applying old laws to new technologies. 156 The rules as defined in Turner he argues, do not apply to the technological realities of DTV because they do not account for the multi-casting capability, the quality of signal carriage, or any number of other differences between analog and digital broadcasting. 157 process; his work argues for the FCC to proactively prepare for the coming of DTV and to look carefully at whether must-carry rules should apply. 158 Written well in advance of the transition, this article serves as a precursor to the current research questions. Primary Video and its Secondary Effects on Digital Broadcasting: Cable Carriage of Multiplexed Signals Under the 1992 Cable Act and the First Amendment was written in 2004 by Michael M. Epstein. 159 Epstein advocates a broad definition of what primary video is, as written in The Cable Act of 1992 that would require cable operators to carry multiple streams of programming. 160 He argues that without this broad interpretation of primary video, broadcasters that choose to offer additional programming would have no guarantee that such programming would be carried. 161 The author expresses concern 155 Harris Aaron, I Want My MTV: The Debate over Digital Must-Carry, 80 B.U.L. Rev, 8985 (2000). 156 Id. at 906. 157 Id. at 888-89 158 Id. 159 Michael M. Epstein, Primary Video and its Secondary Effects on Digital Broadcasting: Cable Carriage of Multiplexed Signals Under the 1992 Cable Act and the First Amendment 87 Marq. L. Rev. 525 (2004). 160 Id. at 566. 161 Id. at 56264

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40 about a potential chilling effect, and the impact that a limited definition could have on the long term economic viability of broadcasting. 162 In Broadcast, Cable and Digital Must Carry: The Other Digital Divide Joel Timmer examines the constitutionality and practicality of expanding must-carry during the DTV transition to include dual carriage, total carriage and the carriage of program-related content. 163 While Timmer dismisses the first two, he does advocate flexibility regarding how program-related content is defined moving forward. 164 While total carriage of multiple streams of broadcast programming would not require cable operators to fully take advantage of advances in technology. 165 In spite of this, the author does advocate a compromise approach to the expansion of the definition of program-related content. 166 He offers several examples of what the FCC could potentially consider program-related content such as multiple camera angles at sporting events, interactive games, and viewer chats. 167 He concludes that encouraging the development of such examples would serve the public interest. 168 In Analog and Digital Must Carry Obligations of Cable and Satellite Television Operators in the United States Rob Frieden provides a thorough and detailed history of 162 Id 163 Joel Timmer, Broadcast, Cable and Digital Must Carry: The Other Digital Divide 9 Comm. L 164 Id. at 146-48. 165 Id 166 Id. at 148. 167 Id. at 12122 168 Id at 148-49.

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41 the must-carry rules, the legal challenges they faced, and how the courts have balanced First Amendment rights and public policy goals. 169 The article describes how these rules have been applied to digital and satellite television and the possible changes that could be made. 170 The article discusses the Satellite Home Viewer Improvement Act (SHVIA) which required satellite services to follow must-carry and retransmission consent rules similar to those governing cable. 171 Frieden concludes that must-carry rules must continue to be applied to cable and satellite providers because the mustsymbiotic relati 172 Much has been written about the landmark decision in Turner Broadcasting Inc. v. FCC One such article is a note written by Toni Elizabeth Gilbert, Economic Regulation of the Cable Television Industry: Reigning in a Giant at the Expense of the First Amendment 173 Gilbert provides a brief study of the basis for First Amendment protections and how they are applied to different media, comparing content neutral and content based regulation, and strict, intermediate and relaxed scrutiny standards. 174 The note goes on to describe how the Court reviewed must-carry rules and the 169 Rob Frieden, Analog and Digital Must Carry Obligations of Cable and Satellite Television Operators in the United States, 235 (2006). 170 Id. at 237. 171 Id. at 241. 172 Id. at 246. 173 Toni Elizabeth Gilbert, Economic Regulation of the Cable Television Industry: Reigning in a Giant at the Expense of the First Amendment, 45 Cath. U. L. Rev. 615 (1996). 174 Id.

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42 level of scrutiny. 175 Gilbert concludes by arguing that Congress and the FCC were premature in predicting the demise of broadcasters and networks, and argues that without a strong economic rationale of protecting the broadcast industry, the must-carry rules are unjustified and should not withstand a constitutional challenge. 176 R. Matthew Warner also calls for a reevaluation of Turner in his note, Reassessing Turner and Litigating the Must-Carry Law Beyond a Facial Challenge. 177 Warner describes the mustrs. 178 The note describes the objections and challenges to must-carry regulations including the First Amendment arguments raised by the cable industry in several legal battles. 179 Warner proceeds to analyze the legal issues that could allow must-carry rules to be challenged again and potential arguments that could be made. 180 He notes that the decisions in Turner I and Turner II were in the context of facial challenges which only required that the law be shown to be constitutionally valid under some scenario. 181 If challenged in certain specific markets which are shown to have sufficient levels of competition, Warner argues that the must-carry rules would not be upheld. 182 175 Id at 647. 176 Id. at 650. 177 R. Matthew Warner, Reassessing Turner and Litigating the Must-Carry Law Beyond a Facial Challenge, 60 Fed. Comm. L.J. 359 (2008). 178 Id at 362-63. 179 Id at 364-76. 180 Id. at 376-87. 181 Id. 182 Id. at 389.

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43 Much of the must-carry legal debate focused on the First Amendment rights of CATV operators. Justin Brown and Nissa Laughner expand the must-carry constitutional debate to include a Fifth Amendment argument in their article, Cable th Amendment Claims Applied to Digital Must-Carry. 183 The Fifth Amendment defense against must-carry has previously been utilized by CATV operators only to have the issue decided solely on First Amendment grounds. 184 The 185 They anticipate over time as the CATV industry continues to expand and bundle its services cable operators Fifth Amendment claims will be more clearly defined by the courts. 186 Commercial broadcast television is the focus of this study. However, the mustcarry rules also extend to public television (PTV). Justin Brown advanced the debate over how must-carry rules should apply to PTV following the digital transition in his article Digital Must-Carry & The Case for Public Television 187 Brown recognized the regulatory and legal difficulty in creating a must-carry advantage for PTV stations over their commercial broadcasting competitors. 188 educational value of viewer access to all programming streams offered by PTV through 183 Nissa Laughner & Justin Brown, Must-Carry 58 Fed Comm. L.J. 281 (2006). 184 Id. at 282. 185 Id. at 321. 186 Id. at 320. 187 Justin Brown, Digital Must-Carry & the Case for Public Television 15 Cornell J.L. & Pub. 188 Id. at 108.

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44 their CATV operator the need to advance the cause through Congressional or FCC action was negated when the CATV industry reached agreement with public broadcasters to carry multicast programming. 189 Research Questions This dissertation will attempt to answer the following research questions: Why have Congress and the FCC historically protected the interests of broadcasters over those of cable television? Does the majority opinion in Turner II when applied to the current media landscape, allow broadcasters to seek an expansion of the must-carry rules in DTV to include multicast carriage? The examination of these research questions is important in order to explore how the regulatory lessons learned by Congress and the Federal Communications Commission throughout the history of broadcast and cable regulation in general and the must-carry dispute in particular. Prior legislative and regulatory decisions may offer guidance in addressing future regulatory challenges as technology evolves. This will be addressed in detail within the discussion section of Chapter 5. Methodology To answer the research questions posed by this study, the author will rely on legal research methodology. Primary resources utilized in this analysis include federal court decisions, federal statutes, legislative histories, administrative law and the United States Constitution. Secondary resources of importance include scholarly legal 189 See Press Release, National Cable & Telecommunications Association, Boards of APTS, NCTA, and PBS Approve Public Television Digital Cable Carriage Agreement (Feb. 4, 2005) (on file with author); Press Release, National Cable & Telecommunications Association, Public Television and Cable Ratify Digital Cable Carriage Agreement (Apr. 14, 2005) (on file with author).

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45 research and periodicals dedicated to specific coverage of issues germane to the regulation of the broadcasting and cable industries. Primary Sources Major primary sources utilized for this research include legal decisions, administrative rules, FCC reports and orders, congressional hearings, federal statutes, and legislative histories. Key laws such as The Communications Act of 1934 and The Cable Act of 1992 were located and the legislative history, committee reports, and congressional debates were found using LexisNexis and print and online versions of the Congressional Record. Legal decisions were found using LexisNexis and Westlaw. Shepardizing key cases such as Turner I, Turner II, and Quincy, showed the evolution of laws surrounding the public interest standard, broadcast and cable regulation, and must-carry rules. The FCC website was also an invaluable tool, and most of the administrative rules that are promulgated are accessible for downloading. The website also publishes writings and statements made by the commission, notices of proposed rulemakings, and reports and orders. Secondary Sources To identify relevant journal articles, the author accessed the LexisNexis electronic database. A search of the Secondary Legal section limited specifically to Law Reviews and Journals was conducted utilizing a series of search strings. Search stings included various comb To find additional secondary sources, including news coverage of broadcasting and cable regulatory issues, the author accessed the online database search function

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46 from the University of Florida Libraries website. A database search limited to the subject of broadcasting and telecommunication produced a list of twenty-one databases of which three were utilized. Using the previously mentioned search terms the Communication & Mass Media Complete, ABI/INFORM, and ProQuest Dissertations and Theses databases were searched. Dissertation Outline Chapter 2 of the dissertation, titled the Birth of Broadcasting, examines the broadcasting, in developing a regulatory framework that remains largely intact to this day. This chapter addresses the funda several examples of incumbent broadcasters preserving their dominant market positions through successful lobbying efforts aimed at both Congress and the FCC. Chapter 3 of the dissertation, titled Broadcasting Blossoms and Cable Comes of Age, discusses the origins of what was then referred to as Community Antenna Television (CATV) in the United States and its evolution from broadcast ally to imbalance between broadcasters and cable operators that favors broadcasters to mask several past FCC policy shortcomings. This section also addresses the b the dominant role the must-carry issue plays from the start. It focuses on the process of in 1934 and how the FCC views the relationship between cable and broadcasters. It

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47 also discusses the cable industries early successes in resisting must-carry through a series of judicial victories. Chapter 4 of the dissertation, titled Turner and the Test of Time and Technology addresses -carry rules. It examines the Supreme Court First Amendment analysis of the cable industry in Tu rner II and the Court s affirming of the must-carry rules. It discusses the Court s majority opinion and dissent within the context of the present day media marketplace. It also addresses the impact of the DTV transition on must-carry and the judicial questions it raises regarding the application of an analog opinion in an emerging digital world. preceding four chapters as related to the research questions. Also, a new nonbroadcast centric regulatory model for re-defining the broadcast/cable relationship in an evolving digital world is presented. Finally, areas for future research are discussed.

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48 CHAPTER 2 THE BIRTH OF BROADCASTING commercial, educational, social and political point are inconceivable. Its power for House Committee on Merchant Marine and Fisheries 1 Introduction and daunting. 2 Broadcasting as we now know it was just assuming its identity as a had not yet been realized. The impact of the decisions made during these formative years still serve as the regulatory bedrock for what became the American broadcasting industry. The focus of this study is on issues germane to television, must-carry and the digital transition H owever, to understand the business of broadcast television and its ascension into the predominant video delivery system, we must begin with an understanding of the history of early radio. The leaders of the radio industry, particularly were able to amass great power over the broadcast industry through the programming networks they created and controlled and the commercial business model they refined. 3 Both men also realized that radio 1 H.R. R EP. N O 69-464, at 33 (1926). 2 See FCC Wireless Telecommunications Bureau, http://www.wireless.fcc.gov/organization/ (For broadcasting. The now defined as wireless include, amateur radio, cellular, paging, broadband PCS and public safety). 3 See generally D AVID S ARNOFF L OOKING A HEAD : T HE P APERS OF D AVID S ARNOFF (Dr. Jerome B. Wiesner ed., McGraw-Hill 1968) (while Sarnoff in able to present himself in the best possible

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49 was not an end for broadcasting, just a beginning. They both possessed the vision to see a picture driven version of broadcasting that would incorporate the already developed business model for radio and build upon it. The broadcast regulatory model developed for radio in the Radio Act of 1927 and carried over into the Communications Act of 1934 wo uld also transcend to television. 4 The controlling powers in radio from ownership, programming, equipment manufacturing and technological innovation became the same dominant players in television as would the regulations they were governed by. Congress Cuts the Cord: The Early Regulation of Wireless Broadcasting began as a wireless extension of telegraphy centered on a future of maritime and international communication. 5 It proved valuable to the shipping industry not only for general communications, but also for safety. The Wireless Ship Act of 1910 was the first attempt by Congress to regulate radio. I t required any ocean-going steamer light, the opportunity to view a body of work that parallels the history of broadcasting in the United States is still valuable); K ENNETH B ILBY T HE G ENERAL : D AVID S ARNOFF AND THE R ISE OF THE C OMMUNICATIONS I NDUSTRY (Harper & Row 1986) (Bilby classified this work as an years); R OBERT S OBEL RCA (Stein and Day 1986) (a comprehensive history of RCA from its formation through the mid1979); Sally Bedell Smith, In All His Glory: The Life of William S. Paley, the Legendary Tycoon and his Brilliant Circle (Simon and Schuster 1990); Lewis J. Paper, Empire: William S. Paley 4 See Radio Act of 1927, Pub. L. No. 69-632, 44 Stat. 1162 (1927); Communications Act of 1934, 47 C.F.R. 151 (1934). 5 The technological advancement radio added to communication centered on the ability to communicate wirelessly. Radio revolutionized communication because of its pointto -multipoint properties. Originally the application of this technology focused on creating a wireless telephone system, but its limitations in this regard led to the realization that one voice reaching a mass audience with limited competition for the airwaves was the most efficient use of radio spectrum.

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50 to be equipped with a working radio and a competent radio operator. 6 The lasting impact of the 1910 Act can be found i Secretary of Commerce and Labor to make such regulations as may be necessary to secure the proper execution of this Act. 7 The passage of this section was the first time government exercised authority over the airwaves. Congress amended The Act of 1910 just two years later when it passed the Radio Act of 1912. 8 The 1912 Act was the first regulation to acknowledge that radio technology had uses beyond those of the military. 9 The law reserved larger frequencies for government use and restricted personal use to smaller frequencies of 200 meters or less. 10 The 1912 Act provided for a licensing system, which eventually proved problematic because Congress failed to grant the Secretary of Commerce the specific authority to establish and enforce additional regulation. 11 The 1912 Act, with its many shortcomings, regulated the radio industry for the next 15 years under the authority of the Secretary of Commerce. However, the growth of broadcast radio came to a grinding halt during World War I. A presidential proclamation turned all commercial radio over the United States Navy. 12 The government also mandated the emergency pooling of the patent rights for radio 6 Wireless Ship Act of 1910, Pub. L. No. 61-262, 36 Stat. 629 (1910). 7 Id. 8 Radio Act of 1912, Pub. L. No. 62-264, 37 Stat. 302 (1912). 9 See id. 10 Id 11 M ARVIN R. B ENSMAN T HE B EGINNING OF B ROADCAST R EGULATION IN THE T WENTIETH C ENTURY 8-9 (McFarland & Co. 2000). 12 Id. at 11-12.

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51 technology. 13 This action placed patent disputes on hold and allowed for a government controlled and coordinated period of great technological advancement in radio. 14 Following the War, the Navy recommended the government maintain control of radio. 15 Instead, Congress voted to return radio stations to their original owners. 16 Many of the technological improvements in radio developed during World War I remained dormant because of concerns over patent infringement. 17 The dividing of the patents and the returning of them to their original owners became more difficult with the passage of time and the advancement of technology. 18 The government also maintained an interest in the United States securing a leading role globally in this emerging industry. 19 These factors led to the creation of the Radio Corporation of America (RCA) and set the stage for the evolution of wireless communication into radio as we know it. 20 The formation of RCA led to cross-licensing agreements between General Electric, Western Electric and Westinghouse involving almost 1,200 radio tized boom in commercial radio. 21 13 Id. 14 E RIK B ARNOUW A T OWER IN B A BEL : A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME 1 TO 1933 47 -48 (Oxford University Press 1966). 15 Id. at 52-56. 16 Id. 17 B ENSMAN supra note 11 at 12-13. 18 Id. at 15-16. 19 L OUISE B ENJAMIN F REEDOM OF THE A IR AND THE P UBLIC I NTEREST : F IRST A MENDMENT R IGHTS IN B ROADCASTING TO 1935 12 (Southern Illinois University Press, 2001). 20 Id. 21 B ENSMAN supra note 11 at 15-16.

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52 The Acts of 1910 and 1912 granted the authority to regulate radio to the Secretary of Commerce. In the years following World War I that power rested squarely with Herbert Hoover. Hoover became Secretary of Commerce on March 4, 1921. He would serve under both Presidents Harding and Coolidge before being elected president himself in 1928. Hoover played a prominent role in the formulation of broadcast policy with the radio industry until Congress eventually passed the Radio Act of 1927. 22 His broadcasting legacy would be shaped largely by a series of four National Radio Conferences that he hosted from 1922 through 1925. The years following the Radio Act of 1912 also were a time of great expansion. During this time, amateur radio operators became the leading users of radio. 23 Between 1920 and 1922, the number of wireless radio receivers owned by the public jumped from just 50,000 to between 600,000 and one million sets. 24 Similarly, in 1920 there were only three radio stations broadcasting regularly, but by 1925 the number had grown to 578. 25 This rapid growth led to great confusion and a sense of chaos in broadcasting. 26 22 Louise Benjamin, Working It Out Together: Radio Policy from Hoover to the Radio Act of 1927 Journal of Broadcasting & Electronic Media, Spring 1998. 23 C HARLES H. T ILLINGHAST A MERICAN B ROADCAST R EGULATION AND THE F IRST A MENDMENT : A NOTHER L OOK 41 (2000). 24 Id 25 S TEVEN J. S IMMONS T HE F AIRNESS D OCTRINE AND THE M EDIA (1978). 26 TILLINGHAST supra note 23.

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53 Congress made 19 unsuccessful attempts to pass new legislation to update the Radio Act of 1912. 27 The inability of Congress to pass new radio legislation left broadcasting. 28 The legislative failures can be traced to inconsistent support from Secretary Hoover and an active radio industry lobby interested in keeping the statusquo while it attempted to secure its dominant position in radio. 29 With the airing of the first radio advertisement in 1922 on WEAF in New York, the business of broadcasting started to evolve into its modern, commercial form. 30 With radio rapidly changing and no new radio legislation from Congress in more than a decade, Hoover turned instead to the industry itself for guidance. 31 According to Marvin Bensman, Hoover was in favor of self-regulation for the radio industry during this period. 32 Though the National Radio Conferences were slow to develop regulation, it is here that we see the beginnings of the theories that are used to regulate the public airwaves today. It is during these conferences that we first hear about localism, the public interest, and retransmission. 33 27 B ENJAMIN supra note 19 at 69 See Also Id. 256-57 n.1 (lists in detail the legislative history of the nineteen failed attempts in Congress to pass a new law to replace the Radio Act of 1912). 28 Id. 29 B ENSMAN supra note 11 at 19. 30 B ENJAMIN supra note 19 at 48, 117-118. 31 Id. at 13 (The Radio Act of 1912 did not anticipate broadcasting. It was designed to regulate pointto -point communication). 32 B ENSMAN supra note 11 at 19. 33 Id.

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54 The First National Radio Conference (1922) In 1922, Hoover, at the request of President Harding held the first of what became four annual National Radio Conferences. 34 The First Radio Conference featured 13 invited guests including Rep. Wallace H. White (R-Maine). 35 White eventually led the effort to pass a new radio act in the House of Representatives although his efforts would prove unsuccessful until 1926. 36 Issues discussed during the First Radio Conference included frequency overcrowding, interference, and the pursuit of new legislation to meet the changing needs of the industry. 37 Hoover, in his opening remarks to the conference stated th becomes of primary public interest to say who is to do the broadcasting, under what 38 After the conference, RCA submitted as such should be regulated by the federal government in the public interest. 39 Hoover hoped to reach a consensus on new legislation during the First Radio Conference. 40 While much was discussed and agreed to, ultimately it was the industry 34 Report of Department of Commerce on Radio Telephony R ADIO S ERVICE B ULLETIN May 1, 1922, at 22-3 0. 35 Id. 36 B ENSMAN supra note 11 at 3536 37 Report of Department of Commerce on Radio Telephony supra note 33 at 2230. 38 B ENSMAN supra note 11 at 51. 39 Memorandum of RCA on First Radio Conference HHPL 1-I/53, April 17, 1922, at 3. 40 Report of Department of Commerce on Radio Telephony supra note 33 at 2230.

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55 that resist bill in 1922. 41 Interference remained a problem as more stations sought space on the airwaves to broadcast. The 1912 Act did not authorize the Secretary of Commerce to reject an otherwise-qualified application for a broadcast license. 42 Participants at the First Radio Conference agreed that any new legislation should provide more regulatory power to the Secretary of Commerce. 43 The interference problem derived from simple supply and demand. More people were interested in broadcasting than there were frequencies to accommodate them. The failure of Congress to pass a new law to limit this 44 A second attempt to reach consensus between the government and radio industry on a future course of action would take place less than a year later. The Second National Radio Conference (1923) During the First National Radio Conference the participants agreed the airwaves should serve the public interest. The public interest discussion continued during the Second Radio Conference, but so did the legislative delays. 45 The development of a 41 Benjamin, supra note 22. 42 Hoover v. Intercity Radio Co., 283 App. D.C. 339 (1923) (held that the Radio Act of 1912 did not give the Secretary of Commerce the authority to use discretionary power over the issue of licenses). 43 Report of Department of Commerce on Radio Telephony supra note 33 at 2230. 44 unregulated airwaves as overcrowded to the point of ineffectiveness during the years leading up to the Radio Act of 1927. See Generally B ENSMAN supra note 11 at 49, 104, 129, 139. 45 Report of Department of Commerce on Radio Telephony R ADIO S ERVICE B ULLETIN April 2, 1923, at 9-13.

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56 national broadcasting capability, a prelude to our current network-based broadcast system, turned out to be a more important issue. 46 Westinghouse executives brought their case to the people in a series of radio addresses prior to the Second National Radio Conference. 47 During these broadcasts, the company said that the public would best be served by powerful stations in metropolitan areas that could take full advantage of the talent and resources available. 48 Lower-power stations would serve rural areas. 49 Louise Benjamin noted a similar plan would eventually be adopted by the Federal Radio Commission (FRC) in 1928. 50 Hoover held a slightly higher view of the value of smaller broadcasters, but he ultimately recognized the ability to underwrite experimentation and advance radio nancial where-with51 He realized the larger radio corporations provided the key to the continued growth of radio. 52 his own recommendations. 53 He willingly withheld support of proposed legislation not 46 Benjamin, supra note 22. 47 Id. 48 Id. 49 Id. 50 Id. 51 Id. 52 Id. 53 B ENSMAN supra note 11 at 9799 Representative regarding H.R. 7357 and his reasons for withholding support of the bill).

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57 consistent with his view of how best to regulate radio. 54 Continued growth in radio, absent new congressional authority, paved the way for a third conference the following year. The Third National Radio Conference (1924) 55 Radio started to show traits of its current form. Stations now supplemented the playing exhortation. 56 Much of this programming originated locally, but the Secretary did not think it was enough to maintain the interest necessary for the continued support of the industry. 57 Instead, Hoover proposed that local stations must have the capability to deliver important national programming. This national programming should include matters of entertainment of the nation. 58 The national programming would then be supplemented with matters of local interest. 59 Hoover presented a blueprint for what soon became a network-dominated radio system. 54 Id. 55 Recommendations for Regulation of Radio Adopted by the Third National Radio Conference, October 6-10, 1924 at 2 available at http://earlyradiohistory.us/1924conf.htm (last visited November 21, 2009). 56 Id. 57 Id. at 3. 58 Id. 59 Id.

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58 To illustrate his point as he made it, his opening remarks aired live over an interconnected network of radio stations. 60 on radio programming and serving the public interest. 61 recommendations related to the issue of interference and other technical issues. 62 After three national conferences the radio industry continued to evolve into a network dominated business model. The time for new legislation grew closer, but not before one final meeting between government and industry. The Fourth National Radio Conference (1925) The rise in popularity and importance of radio in American society could be tracked simply by looking at the attendance figures of the Four National Radio Conferences. Fewer than 30 people attended the first radio conference in 1922. 63 The attendance in 1925 at the fourth and final National Radio Conference exceeded 500. 64 mention localism, but did outline his view of the broadcasting business in the United States. While many foreign governments opted for total control of its airwaves funded 60 Benjamin, supra note 22. 61 Recommendations for Regulation of Radio Adopted by the Third National Radio Conference, October 6-10, 1924 available at http://earlyradiohistory.us/1924conf.htm (last visited November 21, 2009 ). 62 Id. at 8-23. 63 Benjamin, supra note 22 at 9. 64 Proceedings of the Fourth National Radio conference and Recommendations for Regulation of Radio, November 9-11, 1925 at 8 available at http://earlyradiohistory.us/1925conf.htm (last visited November 21, 2009 ).

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59 iated with government control and in the process preserved free speech over radio. 65 66 st retain the ownership of the otherwise be lost in private monopolies. 67 Hoover continued to champion interconnection of stations. 68 The interconnection of stations referred to the ability of centralized programming to be distributed through telephone lines to stations for retransmission within their communities of service. This was a precursor to what became the delivery mechanism of network radio programming. In just a giving us universal broadcasting of nation-wide events. 69 Hoover illustrated his point by 70 He called the broadcast of t 71 Hoover believed radio to be a public medium that must be used for public benefit. 72 65 Id. at 4. 66 B ENSMAN supra note 11 at 19-20, 208. 67 Proceedings of the Fourth National Radio conference and Recommendations for Regulation of Radio, supra note 63 at 4. 68 Id. at 6. 69 Id. 70 Id. 71 Id. at 7. 72 Id.

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60 benefit. 73 He referred to the listening public and defined its relationship with 74 The primary overbalance private desire. 75 Paul B. Klugh, executive chairman of the National Association of Broadcasters (NAB) 76 advocated the organization s preferences for future broadcast legislation to the conference. 77 He proposed a nonbinding resolution giving full authority to the Secretary of Commerce for licensing. 78 broadcasting privilege based upon the needs of the public served by the proposed station. 79 combined wit stations. 80 All discussion of the concept of localism at the four radio conferences airwaves and the availability of high quality network programming. 73 Id. 74 Id. 75 Id. at 9. 76 The National Association of Broadcasters, http://www.nab.org (last visited Dec. 10, 2009) The National Association of Broadcasters (NAB) was created in 1923 to help broadcasters mount an organized front in dealing with music licensing disputes. The organization evolved into an important political organization central to the promotion of broadcaster interests in Washington, D.C.). 77 Id. 78 Id. 79 Id. 80 Id.

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61 Conference participants took great pride in the fact that the radio industry had been largely self-regulating during the preceding four years. 81 Regardless of any success coming this arrangement, the period of self-governance in radio would soon end. A pair of judicial rulings and a push from Hoover would soon usher in a new era of broadcast regulation. Intercity Radio and Zenith Momentum for a new radio act was slow to build during the National Radio Conferences. The major radio companies enjoyed the freedom to consolidate power and influence developments in the industry 82 They took full advantage of the current system to help ensure their long-term success. 83 After four conferences, the radio legislation to protect their investment by limiting the access of potential competitors. Hoover knew change needed to occur for the long-term success of radio. 84 The system of awarding broadcast licenses to every applicant who had enough money to erect a station created the potential for an excessive demand on a limited supply of broadcast frequencies. 85 A pair of cases highlighted the lack of actual power granted to the Secretary of Commerce in the Radio Act of 1912 to regulate a rapidly changing industry. 81 Id. at 21. 82 Benjamin, supra note 22 at 5. 83 Id. 84 Proceedings of the Fourth National Radio conference and Recommendations for Regulation of Radio, supra note 63 at 8. 85 Id.

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62 Government losses in Hoover v. Intercity Radio (1923) 86 and U.S. v. Zenith (1926) 87 served to expedite the need for a new regulatory construct for broadcasting. The Court of Appeals for the District of Columbia Circuit ruled in Intercity Radio (1923) that the Radio Act of 1912 did not give Secretary Hoover the power to deny any application for a broadcast license not otherwise specifically barred by the Act. 88 In this case, Secretary Hoover denied Intercity Radio a new or renewed license on the grounds that there was not a frequency available that did not interfere with other government and private stations. 89 The court held that while the Radio Act of 1912 did grant authority to the Secretary of Commerce to assign frequencies, it did not give authority to deny a frequency. The court noted [T]he duty of naming a wave length is mandatory upon the Secretary. The only discretionary act is in selecting a wave length, within the limitations prescribed in the statute, which, in his judgment, will result in the least possible interference. The issuing of a license is not dependent upon the fixing of a wave length. It is a restriction entering into the license. The wave length named by the Secretary merely measures the extent of the privilege granted to the licensee. 90 Intercity and more administrative. In the Zenith case, the U.S. District Court for the Northern District of Illinois ruled 91 The 86 Hoover v. Intercity Radio Co., supra note 41. 87 United States v. Zenith Radio Corp., 12 F. 2d 614 (1926) (held the Radio Act of 1912 did not give the Secretary of Commerce the authority to establish regulations). 88 Hoover v. Intercity Radio Co., supra note 41 at 1007. 89 Id at 1004. 90 Id at 1007. 91 United States v. Zenith Radio Corp., supra note 85 at 10.

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63 court held that the Radio Act of 1912 did not permit the Secretary of Commerce to regulate radio beyond the specific duties found in the Act. 92 In this case, the Secretary issued Zenith a license that only allowed him to broadcast from ten until midnight on Thursdays. 93 The court held that Congress did not grant the Secretary of Commerce the power to establish such regulations. 94 95 Following the Zenith authority to protect the listening public against utter chaos in the service upon which it has come to rely. 96 Hoover put pressure on Congress to provide relief when he discontinued the enforcement of all radio regulation. 97 Hoover purposely allowed chaos, including the overlapping of signals, in order to illustrate to Congress a need for greater regulatory power. Relief would soon follow. Congressional Regulation by his role in four National Radio Conferences. 98 Yet, to reach his goal of new legislation to guide the radio industry he needed Congress to act. Much of the delay 92 Id. 93 Id 94 Id. 95 Radio Act of 1912, supra note 8 at 4. 96 B ENSMAN supra note 11 at 171. 97 Id. at 173-175. 98 See Benjamin, supra note 22.

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64 can be attributed to the lack of consensus among industry and government interests. Once both sides reached agreement, the path cleared for the passage of new radio regulation. 99 The Radio Act of 1927 Sen. Clarence C. Dill (D-Wash.) and Rep. Wallace H. White (R-Maine) provided the necessary leadership that would eventually lead to the passage of the Radio Act of 1927. White attended the four radio conferences and sponsored the major radio legislation in the House of Representatives from 1922 through 1927. While Dill did not attend the radio conferences, his interest in radio matters evolved from his sponsorship of a Senate bill that would exempt non-profit broadcasters from having to pay copyright royalties. 100 The major difference between the Senate and House versions of the Radio Act of 1927 centered on whether a new agency should be created to independently oversee communications policy. 101 President Coolidge previously expressed his preference that the oversight of radio be delegated to an already existing cabinet position. 102 The House version of the Radio Act sponsored by Rep. White followed this recommendation and proposed to keep radio under the auspices of the Secretary of Commerce. 103 99 B ENSMAN supra note 11 at 208. 100 Id. at 70. 101 K ERRY E. I RISH C LARENCE C. D ILL T HE L IFE OF A W ESTERN P OLITICIAN 75 (Washington State University Press 2000). 102 B ENSMAN supra note 11 at 190. 103 Id. at 185.

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65 The Senate bill sponsored by Sen. Dill proposed the creation of a separate authority to oversee radio. 104 During conference committee debate, Rep. White agre ed to the creation of a new agency, but only on a trial basis. 105 This provision became part of the Radio Act of 1927 and created the Federal Radio Commission (FRC). 106 President Coolidge signed the bill into law on February 24, 1927. 107 In addition to creating the FRC, the Radio Act of 1927 gave the FRC the authority 108 Among the powers granted to the FRC was the power to regulate frequencies, to establish areas or zones to be served by a given station, and to prescribe the nature of services to be rendered by any given station. 109 Congress codified the importance it placed on localism in Section 9 of the Radio Act, which provided: The licensing authority, if public convenience, interest, or necessity will be served thereby, subject to the limitations of this Act, shall grant to any applicant therefore distribution of licenses, bands, of frequency of wave lengths, periods of time for operation, and of power among the different States and communities as to give fair, efficient, and equitable service to each in the same. 110 The passage of the Radio Act of 1927 certainly met the basic needs of the industry. However, it is important to note that many elements of the Radio Act were part 104 Id. at 192(S. 4156)). 105 Id. at 199 (H.R. 9971 otherwise known as the Dill-White Bill). 106 Radio Act of 1927, Pub. L. No. 69-632, 44 Stat. 1162. 107 B ENSMAN supra note 11 at 199. 108 Radio Act of 1927, supra note 104. 109 Id 110 Id. at 9.

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66 111 As Barnouw noted, because of the lengthy existed. 112 The radio industry of 1927 differed greatly from what radio resembled in effort. 113 The Communications Act of 1934 In 1934 Congress revisited the regulation of broadcasting. Seven years following the enactment of the Radio Act of 1927 it was clear that the commercial interests of the medium were dominating the market. 114 The success of commercial radio was a cause of contention for those seeking a viable non-commercial voice on radio. 115 Non-profit voices seeking access included educational, religious and agricultural interests. 116 After much debate Congress opted not to deal with this issue directly, avoiding the possibility of revoking commercial licenses to create spectrum space to expand non-profit radio, and instead decided to keep much of the Radio Act of 111 B ARNOUW A T OWER IN B ABEL su pra note 14 at 199-200. 112 Id. at 200. 113 See Communications Act of 1934, 47 C.F.R. 151 (1934). 114 R OBERT W. M C C HESNEY R ICH M EDIA P OOR D EMOCRACY : C OMMUNICATION P OLITICS IN D UBIOUS T IMES 192 (The New Press 2000) (1999). 115 Id. at 189. 116 Id at 190 (The National Committee on Education by Radio (NCER) and the National Advisory Council on Radio in Education (NACRE) were both formed in 1930. The NCER sought structural reform of broadcasting while the NACRE sought to work with NBC and CBS to establish and incorporate public interest ideals into their business models during this formative period for the two major networks); See also B ARNOUW A T OWER IN B ABEL supra note 14 at 264 (The NCER and NACRE were both founded to achieve similar objectives in championing education interests in broadcasting, but the two organizations sought to do this through different means and this would polarize the organizations followers and lead to public confusion).

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67 1927 intact with the passage of the Communications Act of 1934. 117 With the exception of adding jurisdiction of the telephone industry and replacing the Federal Radio Commission (FRC) with the Federal Communications Commission (FCC), the business of broadcast regulation was unchanged. 118 With the business model in place, broadcasting moved into the 1930s. Radio emerged as a primary medium for entertainment. 119 News/political content would become more prevalent as President Roosevelt took advantage of the airwaves to 120 The radio networks (NBC and CBS) each formed news organizations. Professor Paul Starr, in his book The Creation of the Media points to the Lindbergh kidnapping as an example of early radio news coverage. 121 As radio began to increase news coverage it posed a threat to newspapers. 122 Newspapers unsuccessfully tried to keep radio in check by exclusively controlling access to the Associated Press. 123 117 Communications Act of 1934, supra note 111. 118 Id. at 151 (States the Congressional purpose of the creation of the FCC was to regulate interstate and foreign commerce by both wire and ratio); Id. at 154 (Describes the organization and operational guidelines set forth by Congress for the FCC including the method of appointment and approval of commissioners and other administrative functions). 119 B ARNOUW A T OWER IN B ABEL supra note 14 at 272-274 (Profits remained high for NBC and programming expanded to add vaudevillian comedy and variety fare to successful serial programs like ). 120 P AUL S TARR T HE C REATION OF THE M EDIA 374 (Basic Books 2004). 121 Id. at 376. 122 Id. at 377. 123 Id.

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68 Broadcasting with Pictures: The Technology of Television With commercial radio now an important part of everyday American life and the regulatory framework f or government firmly established, major broadcast corporations entered the late 1930s with the opportunity to develop a new technology, television. While the technology changed, the players remained the same. Because the Communications act of 1934 sought to unify all telecommunication media under one administrative agency it was clear that as television developed this new medium would be bound by the same rules as radio. Reeling in Network Power With television developing in the background, the business of radio into the early 1940 s was booming At the core of its success was the popularity of nationally distributed network programming. 124 Network-originated shows could reach as much as 90-percent of the country through their simultaneous airing on affiliated stations located throughout the nation. 125 The National Broadcasting Company (NBC), the Columbia Broadcasting System (CBS), and the Mutual Broadcasting System (MBS) each entered into affiliation agreements with local stations to maximize their individual national reach. 126 These affiliation agreements between the networks and local stations governed the terms of 124 E RIC B ARNOUW T HE G OLDEN W EB: A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME II 1933 TO 1953 111 (Oxford University Press 1966); A LAN B. A LBARRAN & G REGORY G. P ITTS T HE R ADIO B ROADCASTING I NDUSTRY 30-33 (Allyn and Bacon 2001). 125 Id. 126 Report on Chain Broadcasting Commission Order No. 37; Docket No. 5060 34-44 (May, 1941).

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69 the network-station relationship. 127 The FCC already had concerns this relationship was heavily tilted in favor of the networks and began examining regulatory methods to equalize the relationship in 1938. 128 Three years later, the FCC released its Report on Chain Broadcasting containing relationship between broadcast radio stations and network programming sources. 129 130 The Commission sought to position of NBC and CBS in chain broadcasting and the nature of the contracts between the broadcast networks and their affiliated stations. 131 While Congress did not grant the FCC specific regulatory authority over the broadcast networks, the Commission achieved its goals indirectly by regulating its will through the local stations it had issued licenses to. 132 The reaction to the proposals made in the report by the networks was 127 Id. 128 Federal Communications Commission, Order No. 37 (March 18, 1938). 129 Report on Chain Broadcasting at 9192 130 Communications Act of 1934, supra note 111 at 3 (9). 131 Report on Chain Broadcasting at 30. 132 Id. at 91-92 (The order contained a total of eight regulations that: (1) allowed a station to program from multiple networks without punishment; (2) allowed stations to carry network programming in their market if the regular network affiliate serving the market opts to not carry a particular program; (3) limited network affiliation contracts to one year in length; (4) allowed stations to not be forced by networks to preempt previously scheduled programming in order to accommodate last minute network time requests; (5) networks were prohibited from preventing local stations from rejecting or refusing to air programming on public interest grounds or substituting programming of local or national interest; (6) limited station ownership to a single station within a market; (7) prevented stations from being affiliated with a network organization

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70 predictably mixed. 133 Both NBC and CBS were quick to file suit in response while the weakest of the networks, MBS, approved. 134 NBC and CBS may have been united in their disdain for the report, but each was motivated by different elements of the proposal to file suit. 135 As previously mentioned, NBC operated two broadcast radio networks: its flagship NBC-Red network and the NBC-Blue network. 136 With two networks, NBC was able to occupy powerful stations with NBC-Blue affiliation that may have otherwise been open to affiliating with a network like MBS at the cost of more direct competition to NBCRed. 137 The FCC sought to limit this monopolistic-like activity by prohibiting broadcast stations from affiliating with a network that operated more than one network. 138 If allowed to stand, NBC, as the only multi-network operator, would be forced to divest itself of one of its two networks. that operated more than one network; (8) gave stations the ability to set local advertising rates for non-network programming without network interference). 133 B ARNOUW T HE G OLDEN W EB, supra note 122 at 168. 134 See Columbia Broadcasting System v. United States, 316 U.S. 407 (1942); National Broadcasting Co. v. United States, 316 U.S. 447 (1942). 135 Id. 136 Report on Chain Broadcasting at 44re often indistinguishable. NBC affiliation contracts did not specify a Red or Blue affiliation and programming often overlapped. Organizationally, the two NBC networks were not separate business entities and shared resources with the exception of sales) 137 B ARNOUW T HE G OLDEN W EB, supra note 122 at 170. 138 Report on Chain Broadcasting at 70-73 (The report listed advantages multi-network ownership afforded NBC including its use of the Blue network to serve as a buffer to protect its more commercial Red network from competition by occupying station frequencies that would otherwise be available to affiliate with other networks like Mutual. Many markets were served by three of fewer stations leaving Mutual without a potential affiliate).

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71 As part of the CBS network affiliation contract the network retained the right to take over an affiliate s schedule during any time period of its choosing. 139 This practice of a network having the option of disrupting a local station s schedule was looked upon by the FCC as a detriment to the development of local programming and the Commission viewed such control as a violation of the terms of the broadcast licenses it issued to stations. 140 The new proposal did not eliminate a network from exercising options but it did limit the practice to a single daypart. 141 The FCC also gave local affiliates the right to preempt network programming in order to broadcast other programming in the public interest. 142 The Report on Chain Broadcasting also marked the beginning of broadcast station ownership limits. 143 The proposal prohibited networks from owning more than one station in a market while leaving a national ownership cap still to be determined. 144 The separate NBC and CBS cases against the proposals contained in the Report on Chain Broadcasting would be litigated, appealed, remanded and eventually 139 Id. at 62-65 (While NBC focused on challenging the network ownership restriction, CBS was most concerned with changes to the optionalthe whole broadcast day and allowed the network with 28 days notice to stations require them to carry a network program regardless of its air time. NBC did not add time option language to its affiliation contracts for seven years and did so only to counter a perceived competitive advantage for CBS). 140 Id. at 65 (The FCC felt local stations should maintain sufficient power to meet the broadcast needs of their local communities free through coverage of local events of interest). 141 Id. at 92. 142 Id. 143 Id. at 66-69. 144 Id.

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72 combined for examination by the United States Supreme Court. 145 The Court s majority opinion in the case not only decided the legal merits of the FCC proposals, it also gave birth to one of one of the most important elements of broadcast media law, the scarcity doctrine. 146 NBC and CBS quickly in the Report on Chain Broadcasting on numerous legal grounds including their ultimate constitutionality. These issues were ultimately settled by the United States Supreme Court in National Broadcasting Co. v. United States (1943). 147 NBC and CBS built their case before the Court on around a series of legal arguments. First, the networks asserted that the FCC exceeded the legislative authority it was granted by Congress in the Communications Act of 1934 in enacting the rules. 148 Second, even if the Communications Act of 1934 did grant the Commission proper authority, the FCC misinterpreted the scope of the Act. 149 Third, the chain broadcasting 150 Fourth, the rules were an 145 National Broadcasting Co. v. United States, 319 U.S. 190 (1943) (held that the FCC had the regulatory authority to enforce rules governing the relationship between broadcast networks and their local affiliated stations). 146 Id. at 214 (Writing for the majority, Justice Frankfurter introduced the scarcity rationale into broadca enough to accommodate everybody. There is a fixed natural limitation upon the number of 147 National Broadcasting Co. v. United States, 319 U.S. 190 (1943). 148 Id. 149 Id. 150 Id.

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73 151 Finally, the rules violated the free speech rights of network as protected by the First Amendment of the Constitution. 152 The Court was left to determine whether Congress had granted the FCC the power to regulate chain broadcasting and if such power is permitted by the Constitution. 153 In the majority opinion Justice Frankfurter admitted that the Communications Act of 1934 did not explicitly grant the FCC the authority to regulate network practices. 154 However, the Commission did have the authority to issue broadcast licenses and regulate licensees in a manner consistent with protecting the 155 The FCC argued that its chain broadcasting rules were designed to address actions it determined were detrimental to 156 The Court noted that Congress provided the FCC with broad authority to insure the maximum benefit of radio in the Communications Act of 1934, citing section 303 as an example. 157 Section 303 of the 151 Id. 152 Id. 153 National Broadcasting Co. v. United States, 319 U.S. 190 (1943). 154 Id. at 219. 155 Id. at 216. 156 Id. at 217. 157 Id.

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74 engaged in chain broadcastin prescribe such restrictions and conditions, not inconsistent with law, as may be 158 The Court believed this to provide the FCC with sufficient authority to lawfully enact its chain broadcasting rules. 159 The Court also addressed the constitutionality of the chain broadcasting rules as challenged by the networks. 160 NBC and CBS argued that the rules abridged their First Amendment right of free speech. 161 It is here that Justice Frankfurter introduced the scarcity doctrine to broadcasting by pointing out radio, by its very nature, abridges free speech. 162 Radio is not available to all who may wish to use it and is thus subject to government regulation. 163 The process of granting or denying a broadcast licenses is served. 164 The loss not only changed the network-affiliate relationship contractual ly ; it also motivated NBC to divest from one of its two networks before being forced to do so. 165 NBC-Blue was sold to Edward J. Noble of Lifesavers Candy fame. 166 Noble paid 158 Communications Act of 1934, supra note 111 at 303 (g), (i), (r). 159 National Broadcasting Co. v. United States, 319 U.S. 190, 225 (1943) 160 Id. 161 Id. at 226. 162 Id. 163 Id. 164 Id. 165 Gayle Noyes, American Broadcasting Company The Museum of Broadcast Communications, http://www.museum.tv/archives/etv/A/htmlA/americanbroa/americanbroa.htm 166 S TERLING Q UINLAN I NSIDE ABC: A MERICAN B RO ADCASTING C OMPANY S R ISE TO P OWER (Hastings House, 1979).

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75 NBC $8 million dollars for the network and went on to name his new entity the American Broadcasting Company (ABC). 167 While the decision in National Broadcasting Co. v. United States (1943) specifically addresses network practices in radio, its holding would soon be applicable to a new broadcast technology poised for a post-World War II implementation, television. Decades in development, television was forced into a war-induced hibernation that would soon end and mark the beginning of a new chapter for broadcasting in the United States. The Early Development of Television Though invention of the television cannot be attributed to any one person, Philo Farnsworth is regularly credited as the Father of Television. In 1922 at his local high school, he stunned his science teacher by asking for advice about an electronic television system he was working on. 168 He completed his first successful television transmission in 1927, airing various images including a dollar sign. 169 While Farnsworth apparatus for the RCA. Also in 1927, Bell Telephone Labs transmitted both pictures and sound from Washington D.C. to New York. 170 Farnsworth applied for a television patent and RCA attorneys were quick to challenge the patent application but in August of 1930 Farnsworth was granted the patent. 171 167 Id. 168 B ARNOUW T HE G OLDEN W EB, supra note 122 at 39. 169 Id. 170 Television Now Reality; Device Demonstrated T HE T ROY R ECORD Apr. 8, 1927, at 1. 171 B ARNOUW T HE G OLDEN W EB, supra note 122 at 39.

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76 A major reason for the success of commercial broadcasting in the United States was organization. At the center of this effort was the National Association of Broadcasters (NAB). 172 Founded in 1922, the NAB played an important role in championing commercial interests during broadcasting s formative years prior to the passage of the Radio Act of 1927 and in 1928 successfully lobbied the newly created Federal Radio Commission to pass General Order 40. 173 This order preserved the most desired frequencies for commercial broadcasters and effectively reduced the competitive threat of non-profit interests seeking to gain entry for their non-commercial agendas and programming. 174 commercial broadcasting agenda becoming law with the eventual passage of the Communications Act of 1934. 175 The NAB originally was formed to provide a unified front for broadcasters in negotiating with the American Society of Composers Authors and Publishers (ASCAP) and future licensing organizations for determining rights fees broadcasters would pay for the use of music and other copyrighted material. 176 In 1930, David Sarnoff became President of RCA. Sarnoff was obsessed with television and certain that it was the future of broadcasting. 177 He knew that in order to 172 B ARNOUW A T OWER IN B ABEL supra note 14 at 120-121. 173 -10 (This is a reprinting of Federal Radio Commission General Order 40 issued on Aug. 30, 1928. The FRC reallocated the commercial bro radio into underserved areas of the country. The reallocation of channels sought to equally serve the nations five geographic zones as defined by the Radio Act of 1927). 174 Id. 175 Henry A. Bellows, Report of the Legislative Committee NAB R EPORTS Nov. 15, 1934, at 618. 176 B ARNOUW A T OWER IN B ABEL supra note 14 at 120. 177 B ARNOUW T HE G OLDEN W EB, supra note 122 at 38.

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77 make television marketable nationwide a standard system would need to be developed. 178 It turns out that RCA had such a standard for transmission and reception of signals. 179 In April of 1935 Sarnoff pledged that RCA would spend a million dollars to improve television technology and make it accessible to the public. 180 Sarnoff was determined to have television make its big debut at the 1938 World Fair. 181 That vision first televised presidential statement. 182 Televisions went on sale to the public the next day. Prices of televisions ranged from two hundred to six hundred dollars and screen sizes were between five and twelve inches. 183 On July 1, 1941 the first television commercial aired, a ten second spot showing the face of a Bulova watch. 184 The network made a seven dollar profit on a nine dollar sale. 185 Other networks would soon follow with their own commercial advertising. 186 As the technology of television began to evolve so too would the role played by the National Association of Broadcasters (NAB). The NAB continued to solidify its role 178 Id. 179 Id. 180 Id. 181 Id. at 125. 182 Id. at 126. 183 Id. 184 Bulova, About Us, http://www.bulova.com/about/about.aspx#history.aspx (last visited Sept. 11, 2009). 185 Id. 186 R.W. Stewart, Imagery For Profit, N EW Y ORK T IMES July 6, 1941, at A10.

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78 187 With the FCC preparing to make major decisions regarding the future of television in the United States, the NAB countered by hirin g its first paid president in 1938. 188 Television was poised for a rapid rise only to be derailed by World War II. When the United States entered the war, all production of television sets was immediately halted. 189 But, unlike in World War I where there was a substantial decrease in radio advertising, television advertising continued to grow during World War II. 190 After the war, however, production and sales boomed. 191 At first, television faced competition for spectrum allocation from emerging FM technology. 192 RCA and Sarnoff saw television as the future, urging its affiliates to apply for television licenses as soon as possible, and eventually successfully lobbied the FCC to move FM to a higher part of the spectrum, making way for TV. 193 The FCC began issuing television licenses and soon television activity exploded. 194 CBS was behind the times because it was preparing a new technology that would allow for color television, but the method they had developed was incompatible with currently available black and 187 B ARNOUW T HE G OLDEN W EB, supra note 122 at 36. 188 Id. at 114. 189 Id. at 127-128. 190 Id. at 176. 191 Id. at 243. 192 Id. at 242. 193 Id. 194 Id. at 243.

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79 white sets. 195 Sarnoff promised the FCC he would have a color system, compatible with black and white sets, within six months. 196 When RCA delivered on this promise, the FCC approved the system, pushing the CBS model aside. 197 By July of 1946, the FCC had issued twenty four new licenses for television. 198 In that same year, networks began working on programming and fighting to attract an audience. 199 Networks used radio profits to pay for television developments. 200 Network programming ranged from sports broadcasts to drama serials. 201 Networks were quick to steal profitable programs from each other. 202 By 1948, there were one hundred and eight television stations broadcasting, but interference problems combi ned with a shortage of available Very High Frequency (VHF) channel spectrum caused the FCC to announce a moratorium on the issuing of licenses. 203 204 This 1952. 205 During the freeze existing stations were able to continue programming, but the number of stations who were ready to broadcast 195 Id. 196 Id. 197 Id. 198 Id. at 244. 199 Id. 200 Id. 201 Id. 202 Id. at 245. 203 Id. at 285. 204 Report and Order, FCC 48-2182, Sept. 30, 1948. 205 B ARNOUW T HE G OLDEN W EB, supra note 122 at 285.

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80 remained small. 206 the many shortcomings of its initial VHF allocation and determine standards for color television. 207 At the same time, the freeze allowed the major networks (NBC and CBS), the only ones truly prepared to broadcast, to strengthen their dominant hold on the television medium and grow their VHF stations free from additional competition. 208 In 1952, the FCC released its Sixth Report and Order which was an omnibus television package. 209 The Sixth Report and Order declared that television would now broadcast on both existing VHF channels as well as new U lt ra High Frequency (UHF) spectrum. 210 The Commission determined expanding the VHF spectrum to provide enough available channels was not practical because it would displace other forms or radio already occupying that portion of the spectrum. 211 The FCC also considered and rejected a proposal that would have forced existing VHF stations to abandon their frequencies and migrate to UHF channels. 212 Instead the Commission decided to take 206 Id. 207 Id. at 295. 208 Id. at 290. 209 Television Assignments, Sixth Report and Order 41 F.C.C. 148 (Apr. 11, 1952). 210 Id. at 168-169 211 Id. at 154 (To make additional VHF channels available would require the removal of frequencies from other radio services already occupying them. Lacking formal proposals or technical evaluations of such a policy the FCC concluded there was no basis for pursuing an expansion of televisions VHF allocation. The Commission only sited testimony stating a desirability of such a move). 212 Id. at 155 (Statements were filed with the FCC proposing that the VHF band be abandoned for television and all stations be allocated frequencies in the UHF band. The statements claimed by only allocated television stations in the UHF band serious economic, technological and competitive problems of pursuing a dual band policy could be mitigated. Citing a lack of evidence and a concern that the UHF band alone would not provide enough frequencies the FCC rejected the idea).

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81 213 Channels two through thirteen in the VHF (very-high frequency) band would be joined by seventy new channels in the UHF band. 214 This was a controversial move because thousands of television sets in the United States were not capable of receiving UHF signals. 215 With the additional UHF spectrum, the FCC was able to develop a Table of Assignments that provided 2,053 channels to 1,291 communities throughout the nation. 216 The FCC attempted to meet a pair of objectives with the creation of its Table of Assignments, provide television service to as many people as possible and assign frequencies to the states and communities. 217 In developing its Table of Assignments the FCC utilized a prioritized list of five principles: (1)To provide a least one television service to all parts of the United States; (2) To provide each community with at least one television broadcast station; (3) To provide a choice of at least two television services to all parts of the United States ; (4) To provide each community with at least two television broadcast stations; and (5) Any channel which remain unassigned under the foregoing principles will be assigned to various communities depending on the size of the population of each community, the geographical location of such community, and the number of television services available to such community from television stations located in other communities. 218 frequencies available for television the decision was based on the assumption that UHF 213 Id. at 205-209. 214 Id. at 153-155. 215 Id. at 583. 216 Id. at 168. 217 Communications Act of 1934, supra note 111 at 1, 303 (b). 218 Television Assignments, supra note 207 at 167.

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82 stations would become competitive with their VHF counterparts. 219 Commissioner Jones called this assumption channel spacing protection to VHF stations without providing the same to UHF stations. 220 Jones illustrated the difficulties facing UHF stations in markets already served by VHF stations. 221 Not only would the UHF station owners be facing the standard capital costs of equipping and operating the station; they would also be burdened with the additional expense of audience acquisition through the purchase of UHF converters to gain access to the VHF-only-set owning portion of the potential audience. 222 Echoing a similar tone, Commissioner Hennock also pointed to the lack of UHF tuners in existing sets and additional technological shortcomings that disadvantaged UHF stations. 223 According to Hennock, UHF stations wo uld be forced to overcome reception problems l portion of the with VHF stations. 224 Conclusion blueprint for broadcast television in the United States was in place. While the success 219 Id. at 208 (The FCC was convinced the UHF stations could eventually achieve parity with 220 Id. at 628. 221 Id. 222 Id. 223 Id. at 582-584. 224 Id

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83 of television over the coming decades is difficult to deny the broadcast model was far from perfect. Television s inability to duplicate the same level of reception as radio, address it, provided an opening for a new service to emerge to bridge the reception gap. The development of cable television may have started on the top of a mountain, but it would take the industry many decades to reach equivalent heights due to the FCC distributor of video content and the increasing power and influence of the NAB to protect broadcast interests. The next chapter will chronicle the growth of the cable industry and its often adversarial relationship with broadcasters.

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84 CHAPTER 3 BROADCASTING BLOSSOMS AND CABLE COMES OF AGE [I]f over-the-air television is to fall victim, in some degree or another, to technological change, it is in no different position from any other possesses no greater right than other industries to protection from technological change. Sloan Commission on Cable Communications 1 Introduction While television broadcasters did not have the power to protect themselves from competition from other technologies, the United States Congress and Federal Communications Commission (FCC) were more than happy to provide the industry with just such considerations when it came to restricting the development of cable television as a competitor to broadcasting. 2 The government viewed over-the-air television, just like radio, as worthy of special protection in order to insure was served. 3 This policy of broadcast favoritism continues to play a role in the business of broadcasting as it transitions into digital television (DTV). Exploring the origin and evolution of the special relationship between Congress, the FCC and broadcasters and its role in the development of cable television service in the United States will be the focus of this chapter. Sixth Report and Order in 1952, the business of commercial broadcast television in the United States found itself 1 S LOAN C OMMISSION ON C ABLE C OMMUNICATIONS O N THE C ABLE : T HE T ELEVISION OF A BUNDANCE 81, (McGraw-Hill, 1971). 2 See L UCAS A. P OWE A MERICAN B ROADCASTING AND THE F IRST A MENDMENT 216 (University of 3 Id. at 219.

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85 perfectly positioned to dominate the delivery of video content. 4 Just as they did in radio, the National Broadcasting Company (NBC), Columbia Broadcasting System (CBS) and to a lesser extent the American Broadcasting Company (ABC) controlled the distribution of popular programming through a national network of broadcast affiliates. 5 In the case of both NBC and CBS, ownership of desirable very-high frequency (VHF) stations in many of the largest U.S. cities, added to their power and influence. 6 Protecting this preferred position went largely unchallenged for decades, but while established broadcasters were focused on limiting direct competition in the form of new broadcast stations an indirect rival literally grew from the hilltops. In response to the freeze and reception issues unique to television when compared to radio, entrepreneurs in mountainous areas of Pennsylvania and Oregon searched for ways to bridge not only the lineof -sight reception gap, but the station gap created by the freeze. 7 Their answer would be a wired one as cable interconnection to a common elevated community antenna allowed areas otherwise unable to receive television signals to now view broadcast programming. 8 4 Television Assignments, Sixth Report and Order 41 F.C.C. 148 (Apr. 11, 1952). 5 See Alan Pearce, The Economic and Political Strength of the Television Networks in N ETWORK T ELEVISION AND THE P UBLIC I NTEREST 3-8 (Michael Botein & David M. Rice eds., Lexington Books 1980) (illustrates the dominance of network television programming in attracting the largest audiences and the greatest share of advertising revenue). 6 Id. at 4 (describes the corporate organization of NBC, CBS and ABC and the significant reach 7 P ATRICK R P ARSONS B LUE S KIES : A H ISTORY OF C ABLE T ELEVISION 1-2 (Temple University Press 2008) (Introduces the efforts of George Gardner and his associates to receive television blocked by topography). 8 Id. at 77-90 (The origins of cable began as a series of individual entities seeking the same solution, but doing so without much collaboration. Most narrowly focused on simply receiving

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86 Community Antenna Television (CATV) Fills the Broadcast Gap The greatest motivator for the development of cable service turned out to be as simple as people located outside of television s coverage area not wanting to miss out on the experience broadcast television offered to those in the cities in which it was available. 9 the footprint. 10 Communities not fortunate enough to have been granted a television license or be located close enough to a locale that did literally took matters into their own hands and invented Community Antenna Television (CATV). 11 At least that was the case in Pennsylvania, Oregon and Arkansas. 12 Before cable television became a multi-billion dollar industry and offered hundreds of channels to tens of millions of households in the United States, it would first be used to extend the reach of broadcast television across miles and over mountains. 13 television signals and failed to see beyond their local communities and cables applicability and potential). 9 B RIAN L OCKMAN & DON S ARVEY P IONEERS OF C ABLE TELEVISI ON 3 (McFarland & Company 2005) (Television received positive coverage from the national press in national magazines like Time and as those unable to receive a signal read about what television had to offer they wished to see it for themselves). 10 Id 11 Id (Many veterans from World War II returned home with training and experience in radar and radio that would prove extremely useful in developing early cable television systems). 12 Id at 5, 14 (The authors focus on the history of cable in Pennsylvania with only a brief mention of parallel activities taking place in Oregon and Arkansas). 13 See generally J OSEPH N. D I S TEFANO COMCAST ED: H OW R ALPH AND B RIAN R OBERTS T OOK O VER A MERICA S TV, O NE D EAL AT A T IME (Camino Books 2005) (a detailed history of Comcast Cable from its humble beginnings to its eventual ascension to become the largest cable provider in the United States); M ARK R OBICHAUX C ABLE C OWBOY : J OHN M ALONE AND THE R ISE OF THE M ODERN C ABLE B USINESS (John Wiley & Sons 2002) (a chronology of the career of cable television pioneer John Malone from his early days with what would become Tele-

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87 humble beginnings as a community antenna service did not initially foretell its eventual role as competitor to broadcast television. 14 CATV was viewed simply as a complementary service to broadcasting that would only be necessary until broadcasting grew into the national service Congress envisioned. 15 However, it did not take long for cable operators to see a future beyond community antenna service and broadcasters were quick to defend themselves from the threat. 16 The stories of the early pioneers in cable television are surprisingly similar in that they all sought to extend the reach of television to locations it was not yet serving. 17 These pioneers included John Walson of Mahoney City, Pennsylvania. 18 Walson worked full-time as a lineman with Pennsylvania Power and Light and owned an appliance store. 19 He claimed himself to be the builder of the first cable system in the United States in 1948. 20 is disputed by some. Communications, Incorporated (TCI) through his selling of the company to AT&T for $48 billion and his eventual founding of Liberty Media). 14 P OWE supra note 2, at 219, 225 (the FCC realized it needed to enter the business of cable 15 Id. 16 P ARSONS supra note 7, at 377-392 (A chronology of major, post-HBO, cable programming including WTBS, CBN, MSG/USA, C-SPAN, ESPN and SIN). 17 L OCKMAN & S ARVEY supra note 9. 18 Id. at 9. 19 Id. at 10-11. 20 Id. at 11.

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88 Whether Walson was first or not does not diminish from his successes as a cable pioneer and his story is still compelling. 21 Walson added televisions to the product line of his appliance store in 1947 and soon realized a substantial obstacle stood between him and the sale of his new inventory of televisions in the form of a mountain range. 22 Without lineof -sight to the transmitters from the stations in Philadelphia reception was impossible in his valley location. 23 To begin selling $500 black and white television sets Walson needed to solve the reception problem and he eventually did. 24 He started bringing customers to the top of the mountain to see television at work. 25 He soon tired of this laborious chore and eliminated the trip by leaving his antenna atop the mountain and running a cable down into town. 26 Eventually the cable would weave its way through town giving residents wishing to subscribe to the service the ability to receive broadcast signals from transmitters roughly 70 miles to the southeast licensed to serve the city of Philadelphia. 27 Broadcasters in Philadelphia or any other city would be happy to see their signal reach extended and potential audience grow because of the availability of cable 21 P ARSONS supra note 7, at 69o be first is called into question by the historical record not supporting his claim to have established his cable system in 1948). 22 L OCKMAN & S ARVEY supra note 9, at 11 23 Id. 24 Id 25 Id. at 11-13 (Walson built a portable antenna in the back of a truck and would drive the truck with a generator and television on board to the top of the mountain to demonstrate television to his customers). 26 Id. 27 Id. at 16-18 (Walson charged customers a $300 installation fee to access his cable service at first, then reduced it to $100 with a $2 monthly fee. He waived the monthly fee for a year if you bought your television set from his store); See also blue skies

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89 television, but there would be a cost. The ability of many CATV systems to receive television signals located beyond their closest stations provided cable operators with their first opportunity to provide additional programming choices to subscribers. 28 These programming choices were ones broadcasters preferred cable subscribers not to be able to make at the expense of stations located in closer proximity. 29 Before must-carry become the issue of contention it is today, broadcasters aggressively pursued the exact opposite when it came to cable, a must not carry agenda. Growing Pains: Cable Extends its Reach and Broadcasters Push Back levision included the importation of distant broadcast signals not necessarily intended to directly serve the local community in which the cable system was located. 30 master antenna location was not only capable of receiving stations from Philadelphia but from New York City as well. 31 Any CATV operator located near multiple television markets could do the same. The ability to import distant signals and potentially roviders. 32 Broadcasters worried about the fragmentation imported signals would cause to the audience and the resulting loss of advertising revenue to local stations. 33 Programmers 28 Id. at 20. 29 P ARSONS supra note 7, at 217 (The FCC protected broadcasters local market position by implementing carriage and non-duplication regulations on cable systems). 30 L OCKMAN & S ARVEY supra note 9, at 20. 31 Id. 32 P ARSONS supra note 7, at 212distant markets while skipping over a signal from a station closer to the cable system). 33 Id. at 211 (ABC, the weakest of the three networks, was the most aggressive in seeking help from the FCC to limit signal importation).

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90 were also interested in collecting performance and copyright fees from cable operators for their distribution of imported signals. 34 Early signal importation was confined to the reception of over-the-air (OTA) broadcast signals for distribution over a cable system. 35 New technologies such as microwave repeaters and satellites would eventually complicate the relationship between broadcasters, cable operators, program providers and government, particularly the FCC. 36 the Communications Act of 1934 did not specifically address cable television. 37 Determining how to regulate a wired technology that did not easily fit into the telephone FCC. 38 Complicating the issue was a belief that CATV was simply a temporary fix to surmount broadcast television s early shortcomings, 39 shortcomings the FCC thought it 34 Id. at 221-227 (The issue of copyright and the rights of cable operators to use broadcast signals without permission or providing compensation created an alliance between broadcasters and content providers like United Artists). 35 Id. at 212. 36 Id. at 197 (The use of microwave repeaters to import broadcast signals was particularly popular in the Western U.S. where there was no other alternative to provide cable customers with programming from all three broadcast networks). 37 Id. at 123 (The Communications Act of 1934 gave the FCC the power to regulate broadcasting and common carrier services. The process of determining whether cable could be classified within either category allowed the Commission to avoid entering the battle between broadcaster and cable operators for more than a decade). 38 Id. at 123 (The FCC staff thought the commission could regulate cable as a common carrier, but not as broadcasters). 39 P ARSONS supra note 7 at 124 (describing the FCC preoccupation with the Sixth Report and Order and its belief that the broadcasting system successful development would make services like CATV disappear); P OWE supra -1970 view that once UHF reached its an unnecessary and uneconomical adjunct to

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91 solved with the release of its Sixth Report and Order 40 The Commission believed as broadcasting matured and the UHF spectrum became fully utilized cable would become unnecessary. 41 This was an entirely plausible assumption to make in the early 1950s, but one based on two fallacies. First, that broadcast television would achieve its legislative mandate and mirror radio as a truly national service. 42 The second, and more important, assumed that the cable industry would sit idly by, fail to innovate, and allow local broadcast television stations a clear path to market dominance. 43 Neither proved true and led to a very inconsistent early history between the cable industry and the FCC. The National Association of Broadcasters (NAB) industry has been complicated since its inceptions and often influenced by a powerful 40 Television Assignments supra note 4 41 Id. at 208 (the FCC was convinced UHF stations could achieve parity with their VHF 42 See Communications Act of 1934 Television Assignments supra note 4 at 167 (the plan the FCC adopted in its Sixth Report and Order in assigning television frequencies followed five principles: (1)To provide a least one television service to all parts of the United States; (2) To provide each community with at least one television broadcast station; (3) To provide a choice of at least two television services to all parts of the United States; (4) To provide each community with at least two television broadcast stations; and (5) Any channel which remain unassigned under the foregoing principles will be assigned to various communities depending on the size of the population of each community, the geographical location of such community, and the number of television services available to such community from television stations located in other communities. With three major broadcast networks (NBC, CBS and ABC) seeking a national audience reception of only one station meant viewers would be unable to access all available national programming). 43 P ARSONS supra note 7, at 186 (The development of large scale pay-TV offerings and its potential to generate revenue for cable operators was openly discussed as early as 1957).

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92 third party, broadcasters. 44 With a thirty year head start on the cable industry, the National Association of Broadcasters (NAB) established itself as a powerful lobby in Washington D.C. with Congress and the FCC for the interests of broadcasters. 45 The Radio Act of 1927, the Communications Act of 1934 and the preservation of the VHF television band after the freeze with the release of the Sixth Report and Order This influence would be utilized by the NAB to protect broadcasting from competition from cable. The National Cable & Telecommunications Association (NCTA) The ca in Washington, D.C. was a polar opposite journey when compared to broadcasters. Broadcasting was born of the federal government, dominated by centrally produced network programming and given the Congressional mandate to promote localism. Cable television, on the other hand, started as a decentralized local service in small towns in states like Arkansas, Oregon and Pennsylvania. 46 To overcome this disadvantage in Washington, the industry countered with what is today known as the National Cable & Telecommunications 44 Id. at 210 (An NAB determined for every 1000 subscribers to a cable system a broadcast station could lose between 10 and 50 percent on net profits). 45 National Association of Broadcasters, http://www.nab.org (Dec. 10, 2009) The National Association of Broadcasters (NAB) was created in 1922 to help broadcasters mount an organized front in dealing with music licensing disputes. The organization evolved into an important political organization central to the promotion of broadcaster interests in Washington, D.C.; See also The Museum of Broadcast Communications, National Association of Broadcasters History http://www.museum.tv/archives/etv/N/htmlN/nationalassob/nationalassob.htm (last visited Aug. 1, 2009). 46 P ARSONS supra note 7, at 176 (As late as the mid-1960s almost 90 percent of cable systems served communities with fewer than 25,000 residents).

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93 Association (NCTA). 47 A second trade organization, the Community Antenna Television evolution into an organization of influence came from learning through direct competition with the NAB and a slow and steady expansion into new markets. Both the NCTA and NAB have and continue to play a significant role in the legislative and regulatory process regarding telecommunications policy. The actions of both organizations will be an important piece to the historical overview of cable regulation that follows. Modeling the Broadcast/Cable Regulatory Process The NAB, NCTA, Congress, FCC and the courts each play an important role in the development and implementation of telecommunications policy. The understanding of the role each plays in the process and its significance is the subject of considerable study. Erwin Krasnow, Lawrence Longely, and Herbert Terry authored one of the most thorough studies of the regulatory process as it pertains to mass communication. 48 Their analysis of the broadcast regulatory process identified six major policy determiners. 49 Their list includes Congress, the FCC, industry, the courts, citizen 47 National Cable & Telecommunications Association, http://www/ncta.com (last visited Aug. 1, 2009) The National Cable & Telecommunications Association (NCTA) was formed in 1952. It was then known as the National Cable Television Association. The mission on the NCTA is to provide a strong national presence through a coordinated effort to influence issues of interest to the cable industry. 48 E RWIN G. K RASNOW & L AWRENCE D. L ONGLEY T HE P OLITICS OF B ROADCAST R EGULATION (St. 49 Id.

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94 groups, and the White House. 50 The actions, influences, agendas and biases of each of these participants are central to understanding the process involved in creating much of the law and policy impacting broadcasting and cable. Philip Napoli expanded the Krasnow model by elevating the determiners into private sector, judicial, political, and bureaucratic tiers from which they interact with one another. 51 He also categorized the relationship between each as either that of principle or agent. 52 These determiners are the main players in this study of the must-carry issue and the transition to digital television (DTV). One theory associated with the regulatory process worthy of further discussion is regulatory capture. 53 This theory is applicable to any government regulatory agency and has been applied to the FCC and its relationship to the industries it regulates. 54 Krasnow touches on the concept of regulators, in this case FCC representatives, becoming so close to the entities they regulate they reach a 55 recognized the importance of regulators possessing the necessary understanding of the 50 Id. at 33. 51 P HILIP M. N APOLI F OUNDATIONS OF C OMMUNICATION P OLICY : P RINCIPLES AND PROCESS IN THE R EGULATION OF E LECTRONIC M EDIA (Hampton Press 2001). 52 Id. at 227-229. 53 K RANSOW supra note 48 at 48-50. 54 Id. 55 Id ; See also Glen O. Robinson, The Federal Communications Commission: An Essay on Regulatory Watchdogs, 64 V A L. R EV. L AW R EVIEW 192, (1978)

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95 industries they regulate. 56 The kind of understanding that can only come from industry experience. 57 prior to the passage of the Radio Act of 1927 and the creation of the Federal Radio Commission (FRC). 58 Industry participation in the radio conferences was extensive and led to a significant advisory role in legislative process that created the Radio Act of 1927. 59 As a newer industry, it took cable decades to develop relationships with regulators equal to those of broadcasting. The FCC places Cable on the Road to Regulation CATV growth into the mid-1960s remained steady as the number of cable systems exceeded 1500 and served in excess of 1 million subscribers. 60 As broadcasters sought to protect their dominant position in the video delivery market, cable operators were the easiest target to vilify, often by complaining of an alleged economic harm caused to broadcasters by cable. 61 The FCC believed that CATV 56 Id. 57 Id. 58 See Report of Department of Commerce on Radio Telephony R ADIO S ERVICE B ULLET IN May 1, 1922, at 22-30; Report of Department of Commerce on Radio Telephony R ADIO S ERVICE B ULLETIN April 2, 1923, at 9-13; Recommendations for Regulation of Radio Adopted by the Third National Radio Conference, October 6-10, 1924 available at http://earlyradiohistory.us/1924conf.htm (last visited November 21, 2009); Proceedings of the Fourth National Radio conference and Recommendations for Regulation of Radio, November 911, 1925 at 8 available a t http://earlyradiohistory.us/1925conf.htm (last visited November 21, 2009). 59 Id. 60 P ARSONS supra note 7, at 175. 61 Id. at 140 (Broadcasters complained that cable would fragment the audience by offering more choice to viewers and placing local stations in economic harm as a result).

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96 threatened the development of UHF television and broadcasters were more than happy to echo that sentiment. 62 While the FCC successfully avoided direct regulation of the cable industry Congress, the Commission and the courts did deal with issues that were relevant to cable s interests and future development. However, the FCC did offer its most comprehensive view to date of its potential regulatory role in CATV in 1959 with the release of its inquiry on the impact of CATV on the development of television broadcasting. 63 1959 Report and Order By 1959 broadcasters, with help from the NAB, had effectively made known to and o 64 The Commission responded to the concerns of broadcasters when it adopted its Report and Order in docket 12443 in April of 1959. 65 As part of the 1959 Report and Order the FCC offered four legislative recommendations. Two of the recommendations were specifically directed at CATV. 66 The first would require CATV systems to obtain retransmission consent from originating 62 P ATRICK P ARSONS C ABLE T ELEVISION AND THE F IRST A MENDMENT 16 (Lexington Books 1987) (Parsons also points out critics claimed UHF broadcasters had a bigger threat to success than cable, their more powerful VHF broadcast counterparts). 63 and Order, 26 FCC 403, 18 RR 1573 (1959). 64 Id. repeaters or boosters). 65 Id. 66 Id.

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97 stations before offering them to subscribers. 67 The second sought to require CATV systems to transmit the programming of locally assigned broadcast stations at the station s request. 68 In April of 1959 the Commission officially introduced the framework for the broadcast/CATV relationship and from the beginning it included elementary versions of must-carry and retransmission consent. 69 stations, but what potential obstacles CATV could pose to the success of future stations as well. 70 At the time of the release of this Report and Order there were 509 commercial broadcast stations in operation providing service to more than 95 percent of United States households. 71 The number of CATV systems was estimated at 550 with up to 2 million subscribers. 72 Broadcasters were united in their assertion that without FCC intervention the adverse effect of CATV on broadcasting would be severe. 73 Broadcasters feared the loss of numerous small market stations due to economic hardship caused by CATV. 74 In the view of broadcasters the additional programming choices offered cable 67 Id. 68 Id. 69 Id. 70 Id. at 405. 71 Id. at 406. 72 Id. at 408. 73 Id. at 411-412. 74 Id. at 412.

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98 subscribers were a secondary concern over the position of importance of the local broadcast outlets. 75 cal stations and CATV could simultaneously flourish and that free competition should be allowed to prevail. 76 In the attempt on their part to maintain their monopoly status. 77 In analyzing the impact of auxiliary services like CATV on broadcasters the record did very little to substantiate the fears of broadcasters. 78 Of the 96 broadcast television stations that had gone off the air in the preceding seven years only three were located in communities with CATV competition. 79 While the FCC was still unsure of its regulatory authority over CATV the Commission still concluded that there was an impact on broadcast stations from competition from auxiliary services and the Commission sought to offer broadcasters protection from it. 80 While still unregulated by the FCC the cable industry would get an indication of things to come on the federal level as the Commission took to the courts in a pair of 75 Id. 76 Id. at 412-413. 77 Id. 78 Id. at 415. 79 Id. 80 Id. at 426, 441 (The FCC identified three legal questions regarding cable regulation and its potential role in it: (1) what basis is there under present law, if any, for our (FCC) assumption of licensing and regulatory powers over CATV systems; (2) would it be legally valid for us to deny authorization for common carrier facilities for transmission of programs to CATV systems on the ground of adverse competitive impact on an existing local or nearby television station; and (3) whether economic injury to a television station can be a valid public-interest justification for denial of authorizations to auxiliary services which compete with such station).

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99 cases that each offered insight into a future of increasing FCC interest and oversight in cable. -off approach to cable regulation were number the 1959 Report and Order was just a preview of what CATV could expect in the future. Carroll Broadcasting v. FCC (1958) The issue of economic harm and the role of the FCC in preventing it were examined by the court in Carroll Broadcasting v. FCC (1958) 81 The Commission believed Congress created an environment of free competition within the broadcasting industry. 82 The FCC also argued that the Communications Act of 1934 did not require it to analyze the impact of legally conducted competition among broadcasters. 83 In this case an existing radio broadcaster appealed to the FCC to reject the application of a second station seeking to transmit within twelve miles of its location. 84 Carroll Broadcasting argued the FCC failed to analyze the harm a second station would do to its station s ability to continue to serve the public interest. 85 The court held that the FCC should allow an existing licensee the opportunity to prove the negative economic impact a new station would cause it. 86 The court acknowledged the competitive nature of broadcasting, but gave more weight to the protection of the public interest and the potential harm additional competition could do 81 Carroll Broadcasting Company v. Federal Communications Commission, 258 F.2d 440 (1958). 82 Id. at 442. 83 Id. 84 Id. at 442. 85 Id. at 440. 86 Id.

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100 it. 87 Television broadcaster would seek to use this decision to compel the FCC to aggressively protect them for economic harm due to competition with CATV. 88 Carter Mountain v. FCC (1963) As previously mentioned, the use of microware repeaters to receive broadcast stations and redistribute them over a cable system was becoming more popular. 89 This application of microwave technology allowed cable operators to expand their channel offerings and provide subscribers with programming not otherwise available through local broadcasters. 90 Broadcasters believed this practice to be a threat to the success of local television stations. 91 The FCC agreed and sought to curb the practice by denying the application of Carter Mountain Transmission Corporation to construct a microwave facility for this purpose in Wyoming. 92 Carter Mountain challenged the 93 In Carter Mountain v. FCC (1963) the FCC successfully argued that it was within its power to deny the application on the grounds that if granted the application would not serve the public interest, convenience, and necessity. 94 The Commission believed, and 87 Id. at 443. 88 prepared for the Senate Committee on Interstate and Foreign Commerce, 85 th Cong.,2 nd sess., December 26, 1958, Committee Print. 89 P ARSONS supra note 7, at 197. 90 Id. at 198. 91 Id. at 199. 92 Carter Mountain Transmission Corporation v. FCC, 321 F.2d 359 (1963). 93 Id. 94 Id. at 95.

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101 the court affirmed, by its microwave application denial it was protecting the public interest by protection to the local station from outof -market completion. 95 Carter Mountain based its unsuccessful argument before the court on two main 96 Second, the FCC denial was an unlawful attempt to censor public communications in violation of the First Amendment. 97 In the court s opinion the FCC was correct to assume that if it awarded the application there would be serious consequences should the local station cease operations. 98 Following Carter Mountain the days of the FCC ignoring the cable industry were numbered. The Commission viewed cable as a threat to the successful implementation of its national broadcast television plan outlined in its Sixth Report and Order 99 The FCC would protect this objective and begin to extend its regulatory oversight into cable for the first time in 1965. The FCC Regulates Cable and Makes the Move to Must-Carry Carter Mountain it did not take long for the Commission to try and more widely apply the Court s ruling. The FCC would attempt to expand its power over CATV with the adoption its First Report and Order in 1965. 100 95 Id. at 99. 96 Id. at 97. 97 Id. at 98. 98 Id. at 99. 99 P ARSONS supra note 7, at 153 (Broadcasters complained about economic harm, CATV theft of broadcast property, FCC indifference and the destruction of broadcast localism). 100 FCC First Report and Order, 38 F.C.C. 683 (April 22, 1965).

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102 The Commission s views on must-carry and retransmission consent contained in the 1959 Report and Order would also continue to be part of the CATV regulatory process. official. The FCC adopted a Notice of Proposed Rulemaking that according to Commissioner Loevinger was ill timed. 101 Loevinger believed the Commission had already formed its opinion on the subject of CATV regulation and the prevailing view was that CATV occupied a subordinate place in mass communications. 102 With Carter Mountain as a catalyst the FCC expanded its regulatory power over CATV in its First Report and Order. 103 The Commission sought to deal with two issues of concern in the competitive balance between television broadcasters and CATV operators. 104 The first was to insure the carriage of local broadcast stations by CATV systems. 105 The second was to prevent the duplication of local programming through the importation of distant signals through microware systems by CATV. 106 The FCC determined that it could act on these matters because it possessed proper authority through the Communications Act of 1934 to regulate all CATV systems, including nonmicrowave systems. 107 The Commission also recognized the narrow scope of this 101 Notice of Inquiry and Proposed Rulemaking Re All CATV Systems, 1 FCC 2d 453 at 485486, FCC Docket No. 15971. 102 Id. 103 First Report and Order, Supra note 92, at 683. 104 Id. at 685. 105 Id. 106 Id. 107 Id.

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103 Report and Order and acknowledged there were a variety of issues involving CATV beyond carriage and nondu plication that it would need to gather information to address them in the future. 108 The NAB and NCTA both submitted extensive factual studies as part of their respective comment efforts. 109 The NAB, on behalf of broadcasters, continued to harbor the economic adversity caused broadcasters by CATV particularly in smaller markets. 110 The NAB expressed concern competition from CATV would lead to broadcast audience loss and directly result in lower revenue potential for stations. 111 The NAB believed CATV would prevent UHF expansion in the smaller communities it was designed to serve. 112 Citing the Fisher Report, the NAB claimed there was a direct correlation between the reduction of audience size and lower station revenue when the audience fragmentation caused by CATV was taken into account. 113 The NCTA, if one was to believe Commissioner Loevinger, was fighting an uphill battle against an FCC that had already made up its mind. 114 The NCTA complained 108 Id. 109 Id. at 684. 110 Id. at 688. 111 Id. at 689. 112 Id. at 690. 113 Id. at 691 (Dr. Franklin Fisher, Massachusetts Institute of Technology, conducted this statistical study for the NAB to try and provide a measurement of the impact of CATV systems on broadcast television stations). 114 Id. at749 (Loevinger complained that the FCC approach to the CATV problem was simply the wrong problem. Loevinger added that it was time to determine what the function of CATV should be and how to develop the ultimate mode and system that would provide the best service to the most people).

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104 he competitive impact CATV posed to broadcasters. 115 As evidence the NCTA pointed out that of the 129 television stations to go off the air in the preceding 12 years only three cited CATV as having an impact. 116 easonable competition in the marketplace between broadcasters and CATV, the Commission could not ignore its responsibility to protect the public interest served by broadcasters. 117 Even if a serious harm to broadcasters by CATV was yet to be documented, the FCC believed there was a potential for such harm and it could not afford to wait until serious harm had already been done before acting. 118 The first formal must-carry rule as written in the First Report and Order required CATV systems receiving microwave service to carry all local broadcast channels within the stations predicted grade-A contour. 119 CATV unsuccessfully requested that the must-carry rule and not the entire broadcast market. 120 The FCC was cognizant of the limited channel capacity of many CATV systems. 121 The Commission considered an expanded rule 115 Id. at 693. 116 Id. at 694. 117 Id. at 706. 118 Id. 119 Id. at 716. 120 Id. 121 Id. at 716-717.

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105 requiring CATV systems to carry all grade-B signals, too, but with limited channel capacity in mind, instead opted to require gradeA only. 122 The nonduplication rule prohibited CATV systems from carrying programming on imported stations that duplicated what a local broadcaster was airing. 123 The FCC sought to preserve broadcast station s program exclusivity within its grade-B coverag e area for a 15-day before-and-after period local broadcast of a program. 124 One area of the duplication debate contained in the First Report and Order providing a color version of a program only available locally in black and white. 125 The allowance is of particular significance for this study when considering the lack of high definition (HDTV) programming available in some markets currently raises similar questions. 126 After staying out of the cable regulation business since the birth of the industry it did not take the FCC long to build upon its initial regulatory effort with the adoption its Second Report and Order less than five month later. 127 This time the Commission would seek to expend its control to include all CATV systems. 122 Id. 123 Id. at 719. 124 Id. 125 Id. at 735. 126 Id. 127 Broadcast Signals by Community Antenna Television Systems, Second Report and Order, 2 FCC 2d 725 (March 4, 1966).

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106 The scope of the First Report and Order was limited to only those CATV systems that used microwave facilities or only about 17 percent of systems nationwide. 128 In its Second Report and Order the FCC expanded its regulatory authority to include all CATV systems whether or not they utilized microwave facilities. 129 The major impact of the Second Report and Order was to expand the must-carry and nonduplication requirements from the First Report and Order, but the Commission also sought to protect UHF stations in the top-100 media markets from increased competition by prohibiting CATV systems in those markets from importing distant signals. 130 The FCC attempted to balance economics and competition between CATV and UHF television stations. 131 The Commission feared CATV operations in major markets would provide unfair competition and adversely impact the establishment of new UHF stations and the growth of already operating UHF stations. 132 133 The Commission also started to pose questions relevant to the development of cable in the future. 134 The Commission sought additional comment on the impact of CATV on UHF independent 128 Helen Shaffer, Community Antenna TV E DITORIAL R ESEARCH R EPORTS Dec. 16, 1964 at 935. 129 FCC Second Report and Order at 725. 130 Id. at 769. 131 Id. at 770. 132 Id. at 781. 133 Id. at 725-726. 134 Id.

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107 stations in major cities, signal extension limits, leapfrogging and the potential of CATV systems as program originators. 135 The issue of color duplication was left undecided in the First Report and Order, but this time citing favorable comment fr om both broadcasters and CATV, the FCC decided to allow color duplication of local black and white programs. 136 This allowed outofmarket color broadcast signals to be imported if the local station was not yet capable of broadcasting its programming in color. The Commission sought the wider distribution of color programming and this was one way to achieve that goal. 137 The support for the Second Report and Order among FCC commissioners was far from unanimous. 138 Commissioner Bartley did not believe the Communications Act gave the FCC the authority to regulate cable. 139 He opposed the top-100 market limit on CATV, but also wanted to limit CATV systems ability to offer pay-TV services. 140 In his view cable should limit itself to the community antenna role it was built on. 141 s regarding cable regulation and was also opposed to the top-100 market limit. 142 On the other hand, Commissioner Cox thought the FCC was 14 135 Id. at 726. 136 Id. at 750-751. 137 Id. 138 Id. at 808. 139 Id. 140 Id. 141 Id. at 819-820. 142 Id.

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108 years too late in assuming its role as cable regulator. 143 Cox was still hopeful the Commission was acting in time to 144 His view of the potential of cable programming was nothing short of the-air mode. 145 Regardless of the reluctance of some commissioners to regulate CATV without express Congressional authority, the question of FCC power would soon be answered not in Congress, but in the courts. U.S. v. Southwestern Cable Co. (1968) The FCC was now active in the business of cable regulation, but the Commission had not yet received direct legislative authorization from Congress to do so. Instead the FCC acted on its own to regulate CATV under its existing power to oversee any interstate communications over wire. This extension of FCC regulatory power was challenged on grounds that the Commission had exceeded its authority. The Supreme Court agreed to hear the case of U.S. v. Southwestern Cable (1968) after the Court of Appeals for the Ninth Circuit ruled that the Communications Act of 1934 did not grant the FCC regulatory authority over cable. 146 At issue in this case was the distribution of Los Angeles television signals on a San Diego CATV system. 147 Midwest Television, owner of a San Diego station, contended that allowing signal 143 Id. at 808. 144 Id. 145 Id. at 809. 146 United States v. Southwestern Cable Co., 392 U.S. 157 (1968) 147 Id. at 160.

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109 importation in this manner negatively affected the station and was inconsistent with the public interest. 148 The Court identified two functions performed by CATV systems. 149 They aid broadcasting by providing adequate reception of local station signals where such reception would be difficult or impossible. 150 CATV systems also can receive and transmit broadcast signals from stations outside of local market. 151 In exploring its regulatory function regarding CATV the Commission had previously concluded that cable is not a broadcaster nor is it a common carrier and therefore was not within the power granted by Congress within the Communications Act of 1934. 152 The Court too unwillingness to enact cable specific legislation, suggesting that the FCC already had the necessary regulatory authority over CATV and had instead chosen not to use it. 153 The Court also echoed the long standing FCC belief that CATV posed a serious threat to the success of UHF and educational broadcasting through audience and revenue fragmentation. 154 necessary in this case to allow the Commission to perform its other responsibilities 148 Id. at 161. 149 Id. at 163. 150 Id. 151 Id. 152 Id. at 164. 153 Id. at 170-171. 154 Id. at 176.

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110 effectively. 155 The Court, while holding the FCC could regulate cable in this manner, did 156 Fortnightly Corporation v. United Artists Television, Inc. ( 1968) Seven days later the Supreme Court would once again decide a case involving CATV and add another piece to the emerging regulatory puzzle of how the cable industry fit into the mass communications infrastructure of the United States. This time the issue was copyright and whether or not CATV systems were in violation of copyright law when retransmitting broadcast programming, particularly motion pictures. The Supreme Court in Fortnightly v. United Artists (1968) held that CATV systems, unlike broadcasters, simply carried programming without editing for delivery to their subscribers. 157 In this instance, Fortnightly Corporation operated CATV systems in Clarksburg and Fairmont, West Virginia. 158 Fortnightly provided its subscribers with five stations, three from Pittsburgh and one each from Steubenville, Ohio and Wheeling, West Virginia. 159 United Artists argued that the retransmission of broadcasts programming protected by copyright law counted as a performance and was a violation. 160 United Artists sought damages and injunctive relief. 161 155 Id. at 178. 156 Id. 157 Fortnightly Corporation v. United Artists Television, Inc., 392 U.S. 390 (1968); See also Teleprompter Corporation v. Columbia Broadcasting System, 415 U.S. 394 (1974)(The Supreme Court extended the holding in Fortnightly to apply to programming retransmitted by microwave link from farther distances). 158 Id. at 391. 159 Id. at 392. 160 Id. at 393. 161 Id.

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111 The Court also determined that CATV had no role in sponsorship or program content. 162 In the Court s view CATV systems were more like viewers than broadcasters in that the only active role they played in the process was making the reception of a broadcast station possible. 163 This process was not much different from what a viewer could perform for themselves by installing their own equipment to receive broadcast signals. 164 s the Court s challenge in applying copyright law written in 1909 to a technology that did not exist until the late 1940s. 165 The Court concluded that CATV systems had little in common with broadcasters and carry without editing the content they receive and distribute to their subscribers. 166 Cable s Slow Rise and Reinvention (1970-84) The 1970s would offer the CATV industry new FCC regulations, program restrictions that would slow growth, copyright clarification and the game changing introduction of satellite program distribution. 167 In spite of a difficult start to the decade 162 Id. at 401. 163 Id. at 399. 164 Id. 165 Id. at 396. 166 Id. at 400. 167 History of Cable Television, http://www.ncta.com/About/About/HistoryofCableTelevision.aspx?source=Resources (last visited Aug. 1, 2009).

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112 CATV entered the 1980s with almost 16 million subscribers and was poised for exponential growth. 168 In the early 1980s government deregulation was a priority for President Ronald Reagan, and the CATV industry benefited greatly from this initiative. 169 The Cable Act of 1984 ushered in an era of growth and expansion in CATV that would offer increased programming options and catapult the industry into the post community antenna television era. 170 However, the changes were slow in coming as the FCC continued to tinker with CATV and cable operators figured out how to successfully harness the power of satellite distribution to expand their programming beyond the retransmission of broadcast signals. 171 Commission Proposals for Regulation of Cable Television (1971) In 1971 the FCC offered a glimpse of its regulatory plans for cable moving forward. 172 With carriage, duplications and top-100 market UHF station protections in place the Commission change potential to serve the public without undermining broadcasting. The FCC sought to restrict the carriage of distant signals to a much smaller number of systems. 173 The aim was to still protect broadcast stations where needed from CATV competition. At the same time the Commission wanted to accelerate the 168 Id. 169 Id. 170 Id. 171 Commission Proposals for the Regulation of Cable Television, 31 F.C.C. 2d 115 (Aug. 5, 1971). 172 Id. 173 Id. at 116.

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113 174 The FCC also cited evidence that UHF broadcasters were likely to be helped by cable because CATV allowed UHF station to overcome reception problems. 175 The Commission also introduced the idea of requiring CATV to provide channel capacity to serve the local public interest of the franchise location. 176 The FCC proposed opening these new outlets of local expression through a dedicated channel that would be available at all times at no cost to the messenger. 177 Cable Television Report and Order (1972) released its Cable Television Report and Order in early 1972. 178 The FCC once again stated it would be wrong to stunt the development of CATV based on its affect on UHF stations. 179 The Commission believed clearer UHF picture delivery and wider distribution through CATV would counter any concerns. 180 The relaxing of the signal importation restrictions on CATV systems was the most important aspect of this FCC action. 181 However, the Cable Television Report and Order signaled an expansion of FCC oversight of cable in several areas worth 174 Id. at 1 21-122. 175 Id. 176 Id. at 128. 177 Id. 178 Cable Television Report and Order, 36 F.C.C. 2d 141 (Feb. 2, 1972). 179 Id. at 147. 180 Id. 181 Id. at 173-176..

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114 mentioning. 182 CATV systems would now be required to provide the FCC with annual record keeping and provide local access channels. 183 The FCC also imposed its broadcast rules on local CATV originated programming and required all new cable systems to have a capacity to distribute at least 20 channels among other new technical requirements. 184 early 1970s did not meet with much success. 185 The factors contributing to the slowing owth were largely economic as the cost to bring cable to major cities proved great in spite of the FCC attempt to open up such markets to CATV expansion. 186 The easing of signal importation also did little to encourage growth. 187 s not going to be giving subscribers more of the same in the form of broadcast programming. 188 A new plan was needed. The fortunes of CATV would soon take a turn to the better as the industry literally launched into the satellite era. 182 Id. at 147. 183 Id. at 217-219; See also FCC v. Midwest Video Corporation, 440 U.S. 689 (1979) (The Court held the FCC exceeded its legislative authority and without specific direction from Congress the Commission was not authorized to impose the access rules requiring CATV systems to make available a channel for public access programming free from its editorial oversight). 184 Id. at 189-190. 185 P ARSONS supra note 7, at 267. 186 Id. at 298. 187 Id. at 301. 188 Id.

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115 HBO, Satellites and Copyright The number of broadcast signals for a CATV to import was finite and more importantly so was the variety of programming being offered by those stations. 189 To expand its programming base CATV needed to start thinking beyond broadcasting and that process started in the 1972 with the launch of Home Box Office (HBO). 190 Launched as a premium subscription based channel with uncut and commercial free movies, HBO overcame its initial struggles to provide CATV with a satellite-delivered revenue-generating, cable-exclusive channel. 191 The birth of the channel signified an important shift in the cable programming model that proved essential in allowing CATV to evolve into the video content provider it is today. 192 The arrival of HBO and its airing of feature films on a subscription basis were not without objection. 193 The FCC thought broadcasters would be economically harmed by the showing of movies on pay cable rather than broadcast television. 194 In response the prevented CATV operators from offering feature films less than three years old on pay services such as HBO. 195 HBO objected to the rules and sued the FCC. In Home Box Office v. FCC (1978) the Court held that the FCC did not have the authority to issue th 189 Id. at 282-283. 190 Id. 191 Id. 192 History of Cable Television, supra note 159. 193 Home Box Office v. FCC, 567 F.2d 9 (1977), cert. denied, 434 U.S. 829 (1977). 194 Id. at 39. 195 Id. at 25 (siphoning refers to the airing on pay cable of a program that was previously

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116 rules, and the Commission offered no evidence of actual economic harm to broadcasters in order to justify the rules. 196 The victory for HBO served as a catalyst for the addition of similar pay channels to be introduced. The news was not copyright came to an end with the passage of The Copyright Act 1976. 197 The first update to copyright law in nearly 60 years required CATV to pay a compulsory license for the airing of all broadcast signals. 198 The fee varied depending on the number of subscribers and market size of each CATV system. 199 According to University of Texas Law Professor Lucas Powe, Jr., cable was rs. 200 By the 201 The Commission believed that le industry undermine the regulatory framework already established for ordinary broadcast 202 196 Id. 197 P ARSONS supra note 7 at 351-352. 198 Id. 199 Id. 200 P OWE supra note 2, at 195. 201 Id. 202 Quincy Cable TV, Inc. v. FCC, 248 U.S. App. D.C. 1 12 (1985) (held that must-carry rules their subscribers every over-theAmendment).

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117 The development of original cable programming sources like HBO, ESPN, CNN and MTV, distributed via satellite, helped cable enhance its broadcast offerings and evolve into the dominant multi-channel video programming distributor (MVPD). This enabled the industry to grow out of the shadows of broadcasting and slowly erode its second class status. Extensive growth during the mid-1980s through late 1990s allowed th e cable industry to enter the new century as a significant player in the media business, but not without a few more setbacks in its battle with broadcasters. grow unfettered, the Commission feared, cable might well supplant ordinary broadcast television. A necessary consequence of such displacement would be to undermine the public inter 203 Cable Act of 1984 The Cable Communications Act of 1984 (Cable Act of 1984) amended the Communications Act of 1934 to officially include federal regulatory oversight of the CATV industry. 204 The Act served CATV well as a growth catalyst, and was particularly helpful in the area of rate deregulation. 205 The Act marked the return of public access channel requirements that allowed local franchising authorities to negotiate to require CATV operators provide channel capacity for public, educational, or government use. 206 203 Id. at 13. 204 Cable Communications Policy Act of 1984, Pub. L. 98-549, 98 Stat. 2779. 205 Id. at 47 U.S.C. 543 206 Id. at 47 U.S.C. 531.

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118 In addition the Act capped the yearly franchise fee amount a CATV system could be 207 Previously, the FCC, in 1972, had required CATV operators in the top 100 markets to allocate three channels for public, educational and local government use. 208 Th is requirement was overturned by the Supreme Court in FCC v. Midwest Video Corporation (1979) 209 and was acting beyond the legislative authority granted to it by Congress. 210 Th ese channels are commonly referred to as PEG channels. growth as it expanded its wired web over an increasingly larger percentage of U.S. television households. 211 Basic cable subscribership increased 60-percent in the eight year period between the passage of the Cable Act of 1984 and the enactment of the C able Television Consumer Protection and Competition Act of 1992 ( Cable Act of 1992 ) from 32.8 million subscribers in 1984 to 54.3 million in 1992. 212 The number of programming channels exclusive to cable and in competition with broadcasters for 207 Id. at 47 U.S.C. 542. 208 Cable Television Report and Order, 36 F.C.C. 2d 141 (Feb. 2, 1972). 209 FCC v. Midwest Video Corporation, 440 U.S. 689 (1979) (The Court held the FCC exceeded its legislative authority and without specific direction from Congress the Commission was not authorized to impose the access rules requiring CATV systems to make available a channel for public access programming free from its editorial oversight). 210 Id. at 708-709. 211 Basic Cable Subscribers, Kagan Research, LLC, Broadband Financial Databook 2006, available at http://www.ncta.com/Statistic/Statistic/BasicSubs.aspx (last visited April 2, 2009 ). 212 Id.

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119 viewers also continued to multiply, increasing from just 28 in 1980 to 139 in 1995. 213 This expansion paralleled a significant increase in the rates cable customers were being charged. 214 While the cable industry defended its rising rates as justified to offset years of artificially low rates due to regulation and the cost of acquiring additional programming options, Congress took note and began to rethink its deregulatory approach to cable. 215 Must-Carry Goes to Court It would be 1992 before Congress and the FCC would bring CATV back into a more regulated reality, particularly with regard to subscriber fees. In the interim, the spotlight would focus squarely on -carry rules. This conflict was waged between the FCC, advancing a pro-broadcasting must-carry policy, a -carry rules endured a series of revisions and court defeats before finally passing judicial review in 1997. 213 The History of Cable Television, http://www.ncta.com/About/About/HistoryofCableTelevision.aspx?source=Resources (last visited April 1, 2009). 214 Average Monthly Price for Expanded Basic Programming Packages: 1986-2007, http://www.ncta.com/Statistic/Statistic/AverageMonthlyPrice.aspx (last visited April 1, 2009) (the average monthly cost of expanded basic programming nearly doubled from 1986 to 1992 from $10.67 to $19.08. Expanded basic service consists of basic service (this is also known as lifeline service and only includes local broadcast stations and PEG channels) and additional basic cable channels ). 215 See Lisa M. Hamm, Cable Defends Cost Rise, T HE R ECORD Aug. 4, 1989 at 35 (the cost of basic cable service rose 29 percent since deregulation, but the industry countered with the cost per channel offered actually decreased due to an increase in the number of channels available); Cable TV Prices Rise, But Viewers Get More T ULSA W ORLD Aug. 4, 1989 at C4; Mary Lu Carnevale, Danforth Proposes Bill to Re-Regulate Cable-TV Rates W ALL S T J. Nov. 16, 1989 at 1(this was one of more than a dozen congressional attempts are cable reregulation leading up to the passag -carry rules).

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120 Quincy Cable TV, Inc. v. FCC (1983) Cable must-carry rules date back to the 1960s and went unchallenged in court until Quincy Cable TV, Inc. v. FCC (1985). 216 In this case, the court held the must-carry rules were unconstitutional as written. 217 The FCC had recently revised the must-carry rules to require the mandatory carriage of all local stations by CATV rather than the previous carry one-carry all policy. 218 219 This case enjoined two petitions. The first petition was filed by a Quincy, Washington, cable system. 220 nel capacity was limited to 12channels and included broadcast stations from both Seattle and Spokane. 221 Quincy decided to drop the Spokane stations in order to provide a trio of specialized cable channels. 222 Fearing a subsequent request for carriage by the dropped Spokane and after it failed to return the Spokane stations to its system the FCC placed a $5000 forfeiture upon them in response to Quin he must-carry rules. 223 216 Quincy, supra note 194. 217 Id. at 94. 218 FCC Report and Order, FCC 85-179, (Apr. 11, 1985). 219 Quincy, supra note 194 at 1462. 220 Id. at 1446. 221 Id. 222 Id 223 Quincy Cable TV, Inc., 89 FCC 2d 1128 (1982).

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121 The second petition was filed by cable programmer TBS. TBS argued that the must-carry rules created unfair competition for channel space on cable systems. 224 broadcast signals that required carriage TBS would be unable to compete fairly for access to viewers and would be forced to endure economic hardship. 225 The court concluded that the First Amendment speech rights of CATV systems were violated by the must-carry rules as written by the FCC. 226 The court did not extend its holding in this case to cover amended versions of the must-carry rules should the FCC choose to revise them. 227 The court faulted the FCC for failing to document over the 20-year history of mustrules. 228 In addition, the court pointed out the must-carry rules as written applied to all broadcasters whether or not the station truly provided adequate local content of value to their community of license. 229 In the court s view, without an adequate record to cite, the question of whether or not CATV was a threat to broadcast television or not remained unanswered. 230 T -carry rules as written 224 Quincy, supra note 194 at 1445. 225 Id. 226 Id. at 1462. 227 Id. 228 Id. at 1463. 229 Id. 230 Id.

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122 ly tailored to justify their substantial interference with First Amendment 231 FCC Report and Order (1986) With the court s encouragement, the FCC issued redrafted must-carry rules in late 1986. 232 In the Report and Order the FCC modified the rules to address some of the concerns raised by the court in Quincy 233 The Commission attempted to tailor the new must234 The new rules included limits on the number of broadcast stations a CATV was required to carry based on its total number of available channels. 235 The FCC added an input selector switch rule. 236 This device is commonly referred to as an A/B switch. 237 The purpose of this device is to allow cable subscribers to switch from cable programming to over-the-air broadcasters. 238 The new rules were to be in effect for a five-year transition period at the end of which the FCC believed consumers would have adequate time to adopt direct off-the-air reception capability for the continued reception of broadcast stations regardless of their availability on a CATV system. 239 231 Id. 232 FCC Report and Order, 1 FCC Rcd. 864 (Nov. 28, 1986). 233 Id. at 1. 234 Id. at 56. 235 Id. at 43. 236 Id. at 40. 237 Id. 238 Id. 239 Id. at 39.

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123 Century Communications Corporation v. FCC (1987) In spite of the FCC -carry rules would meet a similar judicial fate just a year later. In Century Communications Corp. v. FCC (1987) the court examined the revised musthe government must be able to pro [d] 240 The court in Century examined competing First Amendment scrutiny arguments. 241 Th e CATV industry viewed the must-carry rules as a significant burden on speech and sought the same editorial control protections granted in Miami Herald Publishing Co. v. Tornillo (1974) 242 The FCC argued that its must-carry rules were a developed in 243 While the court recognized t he determination of the level of First Amendment protection due to CATV operators was an important issue, within the confines of this case. 244 Instead the court issued what it referred to as that lacking a record of evi -carry rules the rules neither furthered a substantial government interest nor were narrowly tailored to satisfy the 240 Century Communications Corp. v. FCC, 835 F.2d 292 304 (1987) (held that the FCC mustcarry rules were invalid as unjustified and unduly sweeping and were not justified by the FCC to further a substantial government interest that outweighed the incidental burden on cable operators First Amendment rights). 241 Id. 242 See Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974) 243 Century, at 298. 244 Id.

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124 test. 245 The must-carry rules lacke 246 nt attempts to institute mustQuincy and Century were far from permanent. 247 -carry rules on First Amendment grounds, the court made it clear that its decisions were specific to the must-carry rules as written in each case and that the concept of must-carry itself was not necessarily unconstitutional. 248 keep trying. 249 1992 Cable Act The 1992 Cable Act provided a comprehensive update to the cable communications section of the Communications Act of 1934. 250 One of the stated 245 Id. at 304. 246 Id. 247 Quincy Cable TV, Inc. v. FCC, 768 F.2d 1434 (1985) (held that must-carry rules requiring subscribers every over-theted the First Amendment); Century Communications Corp. v. FCC, 835 F.2d 292 304 (1987) (held that the FCC must-carry rules were invalid as unjustified and unduly sweeping and were not justified by the FCC to further a substantial government interest that outweighed the incidental burden on cable operators First Amendment rights). 248 Quincy Cable TV, Inc. v. FCC, 768 F.2d 1434, 1463 (1985) (the government failed to [governme court] do not suggest that must249 Century, 835 F.2d at 304. 250 47 USC 521 (in addition to retransmission consent and must-carry the 1992 Cable Act also revised sections Title VI of the Communications Act of 1934 covering rate regulation, video programming distribution, carriage agreements, consumer protection and customer service, overbuilds, leased access, ownership restrictions, anti-trafficking restrictions, technical

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125 objectives of the bill was to promote the continued viability of free over-the-air broadcast television. Congress viewed the competition for advertising dollars between cable operators and broadcasters as an economic incent reposition, or not carry local broadcast signals. 251 It was left to Congress and the FCC to develop must-carry rules that would survive First Amendment judicial scrutiny. Sections 614 and 615 of the Act require must-carry of commercial and noncommercial signals respectively. 252 Congress specified in the Act a trio of government interests that are to be served by the must-carry laws: 253 (1) preserving the benefits of local television service; particularly OTA television service; (2) promoting the widespread dissemination of information from diverse sources; and (3) promoting fair competition in the video marketplace. 254 Congress gave an additional benefit to commercial broadcasters in the form of required cable operators to first receive prior consent from a broadcaster before retransmitting their signal. 255 By adding this provision to the Act, a commercial broadcaster was allowed to forego must-carry in favor of a negotiated carriage agreement with a cable operator. 256 This was done by Congress to recognize standards, consumer equipment compatibility, indecent programming, subscriber bill itemization 251 Id. 252 47 U.S.C. 534, 535 (2005). 253 ust-Carry, 80 B.U.L. R EV 885, 895 (2000). 254 See S. Rep. No. 102-92, at 58 (1991), reprinted in 1992 U.S.C.C.A.N. 1133, 1191. 255 47 U.S.C 325(b)(3)(B) (2002). 256 Id.

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126 257 Broadcasters were equally interested in seeing the cable industry reregulated, but for a different reason. 258 After decades of failed FCC regulatory attempts to create mustcarry rules capable of surviving First Amendment judicial scrutiny, it appeared Congress was committed to finally getting it right. 259 During hearings on new cable regulation before the Senate Subcommittee on Commerce, Science and Transportation in late 1989, Committee Chairman Daniel Inouye (D-Hawaii) made clear his goals for a legislative process what would end up taking nearly three years to complete. 260 Inouye sought to develop must-carry legislation that responded to the challenges of the modern mass media while serving the public interest and withstanding judicial review. 261 Both the National Association of Broadcasters (NAB) and National Cable & Telecommunications Association (NCTA) lobbied Congress extensively during this time. NCTA President James P. Mooney position in Senate post257 S. Rep. No. 102-92, 102d Cong., 1 st Sess. 35 (1991). 258 See Laura Landro, Airing Grievances: As Cable-TV Industry Keeps Growing, Rivals Demand Reregulation Broadcasters and Others Call the Competition Unfair W ALL S T J, Sept 17, 1987 at 1; Metzenbaum Vows to Tighten Reins on Cable B ROADCASTING & C ABLE Jan. 23, 1989, at 139. 259 -Carr Committee on Commerce, Science and Transportation, 101st Cong., 1st Sess. 1 (1989) [hereinafter Hearing of October 25, 1989 ] (statement of Sen. Daniel Inouye, Chairman S. Comm. on Commerce, Science and Transportation). 260 Id 261 Id.

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127 and increased programming costs. 262 On the issue of must-carry, Mooney pointed out that the record was clear. Local cable systems were already carrying nearly all broadcast signals without a federal mandate. 263 Sen. Robert Packwood (R-Oregon) saw no need for the reregulation of cable and opposed the bill. 264 cable programming like CNN and C-SPAN served the public interest in ways television broadcasters did not. 265 Telecommunications Inc. (TCI) Chairman John Malone reminded the committee during his testimony that prior to the Cable Act of 1984, cable prices increased at just two-thirds the rate of inflation as the industry adhered to highly politicized local regulation. 266 NAB President Edward O. Fritts countered by equating the unfair competitive 267 According to Fritts, musta voice in who carries our signals, and on 262 Oversight of the 1984 Cable Telecommunications Act: Hearings before the Subcommittee on Communications of the Committee on Commerce, Science, and Transportation 101 st Congress, 1 st Sess. 10-11 (1989) [hereinafter Hearings of Nov. 16-17, 1989 ] (statement of James P. Mooney, President, National Cable Television [& Telecommunications] Association). 263 Hearings of Oct. 25, 1989 supra note 259, at 5. 264 Cable TV Protection Act of 1991: Hearings before the Subcommittee on Communications of the Committee on Commerce, Science, and Transportation on S.12 102 nd Congress, 1 st Sess. 104 (1991) [hereinafter Hearings of Mar. 14, 1991] (statement of Sen. Robert Packwood, Member, Sen. Comm. on Commerce, Science, and Transportation ). 265 Id. 266 Hearings of Nov. 16-17, 1989, supra note 262, at 9. 267 Cable Systems Broadcast Signal Carriage Survey Report FCC, Policy and Rules Division, Mass Media Bureau, Sept. 1988, 34-36 (statement of Edward O. Fritts, President, National Association of Broadcasters).

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128 what terms 268 Broadcasters were simply seeking the right to control the retransmission of their signals s omething Fritts argued every other player in the video marketplace already had. 269 Sen. Al Gore (D-Tenn.) blamed the rise in cable rates 270 This legislative effort concluded with the passage of the Cable Television Consumer Protection Act of 1992 (Cable Act of 1992). 271 The bill became law on October 3, 1992 as the United States Senate and House of Representatives voted to override, for the only time during his presidency, the veto of President George W. Bush. 272 The National Cable & Telecommunications Association (NCTA) successfully oppo sed reregulation in previous congressional sessions, but the NCTA did not have 268 Id. 269 Id. 270 Hearings of Nov. 16-17, 1989, supra note 262, at 4. 271 C able Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992) (codified in 47 USC 521). 272 Presidents Message to the Senate Returning Without Approval the Cable Television Consumer Protection and Competition Act of 1992, 2 P UB P APERS 1751-52 (Oct. 3, 1992) (the unfairly requ retransmission consent and must-carry). See generally Edmund L. Andrews, President Set to Veto Cable Bill N.Y. T IMES ision, one added to gain the support of broadcasters, as retransmission consent); Edmund L. Andrews, Bush Rejects Bill That Would Limit Rates on Cable TV N.Y. T IMES October 4, 1992 at 1(President Bush faces long odds in sustaining veto of cable bill after is passes both houses of Congress by veto proof margins); Cable Bill Vetoed By President White House Facing Tough Override Fight L.A. D AILY N EWS Oct. 4, 1992 at N1 (quoting Sen. Al Gore (D[President Bush] is standing square with the big cable operators, the monopolies that have been

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129 Cable Act of 1992. 273 Sen. Inouye predicted that given the prevailing negative public opinion of the cable industry, future legislation would be even tougher on the cable industry. 274 Chairman Inouye proved to be correct, as not only was must-carry a prominent part of the Cable Act of 1992, the new law also gave commercial television broadcasters the additional right to forgo must-carry and instead opt for retransmission consent and negotiate compensation from cable operators for their signal carriage. 275 The cable industry quickly challenged this latest version of must-carry in court, but unlike prior efforts judicial relief would prove difficult Conclusion le industry was an evolutionary process. When CATV first appeared in the late 1940s, the Commission chose to largely ignore it. 276 The FCC viewed cable as a temporary fix to problems with broadcast television it expected to solve with the introduction of UHF channels to fill the gaps created by the lack of adequate space in the VHF spectrum to adequately serve the nation in the same manner broadcast radio did. 277 Over time as the CATV industry began to create its own identity beyond that of a simple broadcast signal delivery service the FCC still left cable oversight largely to the local municipalities that negotiated the individual franchise 273 Mary Lu Carnevale, Senate Blocks Bid to Regulate Cable Television W ALL S T J., Oct. 1, 1990 (quoting Consumer Federation of America Legislative Director Gene Kim -Col.) was a slap on the wrist for 274 Id. 275 47 USC 536 (contains the regulation of carriage agreements legislation and required the FCC to establish regulations within one year of enactment of the Cable Act of 1992). 276 Television Assignments, supra note 4 at 208. 277 Id.

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130 agreements with cable operators. However, during this period the Commission did seek to protect broadcasters from economic harm from signal importation from adjacent markets and the use of microwave relay systems to bring in broadcast signals from hundreds of miles away. 278 The CATV industry enjoyed nearly a decade of deregulation following the enactment of the Cable Act of 1984. 279 The Act not only brought the industry under FCC oversight it also deregulated rates. 280 As previously mentioned in this chapter, the rapid rise in cable rates during the late 1980s and early 1990s played a significant role in the debate leading up to the after the passage of the Cable Act of 1992. 281 In spite of all of the attention given to rising cable rates the reregulation would be short lived. The NCT A successfully lobbied Congress to leave cable rates largely unregulated in the Telecommunications Act of 1996. 282 Rate deregulation has paid big dividends to CATV operators as the average price of expanded basic service has more than doubled from $22.35 to $49.65 from 1995 to 2008. 283 This represents a nearly 84 percent increase in the cost of expanded basic cable service over the general inflation rate. 284 While the 278 P ARSONS supra note 7, at 217 (The FCC protected broadcasters local market position by implementing carriage and non-duplication regulations on cable systems). 279 Cable Communications Policy Act of 1984, Pub. L. 98-549, 98 Stat. 2779 280 Id. at 47 U.S.C. 543. 281 C able Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992) (codified in 47 USC 521). 282 Id. 283 In the Matter of Implementation of Section 3 of the Cable Television Consumer Protection and Competition Act of 1992 (Report on Cable Industry Prices), MM Docket No. 92-266, at 39 (Rel. Jan. 16, 2009). 284 Id.

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131 NCTA successfully protected CATV operators against rate regulation must-carry would continue to be a point of contention. In Chapter 4 the focus of this st -carry Supreme Court victory in Turner II and its First Amendment implications for CATV. The origins, development and implementation of digital television (DTV) in the United States will be examined as a precursor to the exploration of the digitization of the must-carry rules and the applicability of the Turner II decision within this new technological standard. Chapter 4 will conclude with an overview of the to digital must-carry and the future implications of the Commissions current view for both CATV and broadcasters.

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132 CHAPTER 4 TURNER AND THE TEST OF TIME AND TECHNOLO GY -carry is narrowly tailored to preserve a multiplicity of Turner v. FCC (1997) 1 Introduction The cable industry (CATV) entered the 1990s on the cusp of emerging from its long standing second class status to broadcast television The deregulation of the 1980 s created a ripe environment for consolidation and growth in CATV. 2 The Cable Act of 1984 sought to encourage the development of CATV and it did. 3 CATV also continued to redefine itself beyond its original role as broadcast signal provider by increasing the number of cable originated channels it offered to subscribers. 4 The addition of CNN, ESPN, Nickelodeon, The Weather Channel and slow cannibalization of broadcasting television s audience. 5 The number of communities and homes served by cable grew significantly as did the number of channels offered. 6 The number of cable programming networks 1 Turner Broadcasting System, Inc. v. FCC 520 U.S. 180 (1997) (hereinafter Turner II ) (held that the must-carry provisions under the 1992 Cable Act were consistent with the First Amendment because the rules furthered important governmental interests and did not burden cabl e operators speech more than necessary to further those interests). 2 Cable Communications Policy Act of 1984, Pub. L. 98-549, 98 Stat. 2779. 3 1990 Cable Report, 5 FCC Rcd at 4964-4968 (1990). 4 Id. 5 Id. 6 In the Matter of Implementation of Section 19 of the Cable Television Consumer Protection and Competition Act of 1992 (Annual Assessment of the Status of Competition in the Market for

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133 increased from 61 at the end of 1990 to 72 just three years later. 7 Cable service was also available to over 96 percent of television households in the United States. 8 The decade would not pass without some good news for broadcasters. With less few red flags with members of Congress as well as the FCC. 9 Cable rates increased almost three times as much as the Consumer Price Index (CPI) between 1984 and 1989. 10 The FCC also noted that while the 1984 Cable Act promoted many successes in the growth of CATV new concerns were emerging. 11 The Commission was worried that CATV operators were growing increasingly more powerful, almost monopolistic, in a marketplace that largely lacked relevant competition. 12 As previously discussed these concerns led to ne w regulation in the form of the Cable Television Consumer Protection Act of 1992 (Cable Act of 1992). 13 the Delivery of Video Programming), First Report, CS Docket No. 94-48, 9 FCC Rcd 7442 (1994). 7 Id. at 7566; See also History of Cable & Pay TV Subscribers & Revenues, C ABLE TV I NVESTOR Mar. 31, 1994, at 9. 8 Id. at 7568 (information obtained from Appendix C, Table 4). 9 1990 Cable Report, supra note 3. 10 C able Television Consumer Protection and Competition Act of 1992 (Hereinafter Cable Act of 1992), Pub. L. No. 102-385, 106 Stat. 1460 (1992) (codified in 47 USC 521). 11 1990 Cable Report, at 4972-4973. 12 Id. 13 Cable Act of 1992, supra note 10.

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134 The Cable Act of 1992 attempted to curb the rise of CATV rates and examine the potential for the development of non-broadcast competition for cable. 14 It also introduced a new incarnation of the must-carry rules designed to protect broadcasters from CATV domination. 15 After decades of mounting a successful defense to the implementation of must-carry, end. 16 Turner v. FCC (1997) (Turner II) will be discussed historically as well as analyzed within the context of the evolving electronic media landscape of the past twelve years. The must-carry rules will also be revisited for their applicability to digital television (DTV) following the successful completion of the transition from analog broadcasting. Must-Carry Becomes Law The CATV industry in 1997 continued to prosper and expand. However, competition to cable was developing on two fronts. 17 First, direct broadcast satellite (DBS) services led by DirecTV and EchoStar served almost 10 percent of the total subscribers to multichannel video program distributors (MVPDs). 18 Significant upfront satellite receiving equipment costs to new DBS subscribers of as much as $400 did 14 47 U.S.C. 543 (6)(b)(1) (absent competition the FCC can insure the rates subscribers pay diversity in multichannel video programming through competition). 15 47 U.S.C. 534. 16 Turner II, supra note 1. 17 Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming CS Docket No. 97-141, (rel. Jan. 13, 1998) (hereinafter 1997 Video Competition Report ). 18 Id. at 9.

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135 slow the growth of this emerging technology. 19 Second, the Telecommunications Act of 1996 removed the regulatory restraints barring telephone companies from offering video programming to their voice customers. 20 While not very active in 1997 many of these companies would eventually take advantage of the opportunity to offer video programming to their customers. 21 In spite of the additional competition in the MVPD marketplace CATV continued to dominate. CATV controlled 87 percent of the 56 million MVPD household subscriber base. 22 billion. 23 The number of cable networks grew to 126 as CATVs continued to siphon viewers away from broadcasters. 24 Over a nine year period ending in 1997, CATV 87.7 percent to 65.5 percent. 25 In spite of added competition and shrinking share of the audience the business of broadcasting continued to prosper. The number of stations on the air in 1997 grew by 11 to a total of 1561. 26 Advertising revenue for commercial broadcast television also 19 Id. at 40. 20 Pub. L. 104-104, 110 Stat 56 (1996). 21 1997 Video Competition Report supra note 17 at 8. 22 Id. at 5. 23 Id. at 19. 24 Id. at 18. 25 Id. 26 Id. at 9.

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136 grew by 12 percent to more than $31 billion. 27 The Supreme Court also brightened the broadcast picture with its approval of the must-carry rules in its Turner II decision. Turner v. Federal Communications Commission (1997) The new must-carry rules in the Cable Act of 1992 were quickly challenged by Turner Broadcasting and reached the U.S. District Court the following year. The court upheld the rules only to have them vacated and remanded by the Supreme Court in Turner Broadcasting System v. FCC (1994) (Turner I) Three years the later the Supreme Court reexamined the case and held the must-carry rules were constitutional in Tu rner II. 28 In a 5-4 decision, the Court in Turner I focused on whether the constitutionality of must-carry was subject to strict scrutiny as a content-based regulation or intermediate scrutiny under the test as a content-neutral regulation. 29 While the Court determined the appropriate level of First Amendment scrutiny to apply to the must-carry ru les was intermediate, it still decision and remanded the 27 Id. at 58. 28 Turner Broadcasting System v. FCC, 819 F. Supp. 32 (D.D.C. 1993). (held the must-carry rules as a content neutral economic regulation that promoted a significant government interest and were narrowly tailored because cable systems retained control over most of their channel spectrum); Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622 (1994) (hereinafter Turner I ) (held the Cable Act's must-carry rules were content-neutral in application, but vacating and remanding because the government must show that the economic health of local broadcasting was in genuine jeopardy and in need of the protections afforded by the must-carry rules); Turner II, supra note 1. 29 Brien, 391 U.S. 367 (1968) (held the government can infringe on conduct otherwise protected by the First Amendment if (1) it is within the constitutional power of the government; (2) it furthers important or substantial government interest; (3) that interest is unrelated to the suppression of free expression; and (4) the restriction of freedoms is no greater than is essential to the furtherance of that interest).

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137 case so both sides in the dispute could develop and submit to the court a more 30 The standard of First Amendment scrutiny applied in Turner II is the less stringent intermediate rather than strict. 31 The Court determined the requirements of mu st-carry to be content-neutral and subject to intermediate scrutiny, rather than a content-based speech restriction that would have required a strict scrutiny analysis. 32 The plurality concluded the must-carry rules did not specify a specific type of broadcast programming be carried by cable operators. 33 Citing Tuner I the Court believed the must-carry rules did not promote a particular type of speech, but preserved access to free over-the-air regardless of its content. 34 In 1997 the Court revisited the must-carry issue in Turner II and this time the rules were deemed constitutional and upheld in a fiveto -four decision. 35 The Court identified two potential sources of interference with the protected speech of cable operators. First, the provisions of the mustdiscretion in creating programming packages by limiting the number of channels in which the CATV owner could exercise editorial control. 36 Second, the must-carry rules 30 Joseph Russomanno, Speaking Our Minds: Conversations With the People Behind Landmark First Amendment Cases 346 (Lawrence Erlbaum Associates 2002). 31 Turner II, supra note 1 at 385. 32 Id. 33 Id. at 385. 34 Id. at 386 (citing Turner I, at 649). 35 Id. 36 Id. at 403 (citing Turner I, at 637).

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138 make it more difficult for new cable networks to compete for carriage on a cable system s limited remaining channel space. 37 The Majority Plus Breyer Justice Kennedy authored the opinion of the Court. Kennedy was joined by Chief Justice Rehnquist and Justices Stevens and Souter in-full and Justice Breyer in-part. Much of the opinion was based on significant portions of its early decision in Tu rner I The Court in Turner I had already held that the must-carry rules as written in the Cable Act of 1992 were a content-neutral restriction on the speech of CATV operators. 38 As content-neutral speech the must-carry rules were then subject to intermediate First Amendment scrutiny under the test developed in 39 With that point already decided, the Court in Turner II sought to determine whether or not the must-carry rules were narrowly tailored in order to promote a substantial government interest. 40 In Turner I the Court noted the must-carry rules were intended to serve three -the-air (OTA) broadcast television, (2) promoting the widespread dissemination of information from a multiplicity of sources, and (3) 41 In order to justify the need for must-carry rules to meet the above interests, the Court focused on data indicating that forty percent of United States television households relied on OTA 37 Id 38 Turner I, supra note 28. 39 en, supra note 29. 40 Turner II, supra note 1 at 185. 41 Turner I, supra note 28 at 662.

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139 broadcast reception as their only source of television programming. 42 In analyzing the must-carry rules the Court gave deference to the legislative powers of Congress and focused on determining whether or not Congress had based the rules on substantial supporting evidence. 43 Justice Kennedy framed much of the evidence in support of must-carry not on any immediate danger facing OTA television broadcasting, but instead focused on the order to expand its audience and revenues. 44 As noted in the record the vast majority of broadcast stations were economically sound and already being carried by CATV. 45 Justice Stephen Breyer joined the Court during the interim between the two Turner decisions when he replaced Justice Blackmun. Bre mustendment interests of cable, broadcasters and citizens. 46 Breyer conceded that must-carry extracts a serious First Amendment price. 47 choose their own programming; it prevents displaced cable program providers from obtaining an audience; and it will sometimes prevent some cable viewers from watching 42 Turner II, supra note 1 at 190. 43 Id. at 195. 44 Id. at 191, 196-197. 45 Id. at 205. 46 See generally Jerome A. Barron, The Electronic Media and the Flight from First Amendment U. M ICH J.L. R EF 817 (1998). 47 Joel Timmer, Broadcast, Cable and Digital Must Carry: The Other Digital Divide, 9 C OMM L. & P OL Y 101 126 (2004).

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140 48 The Court, in held that must-carry was narrowly tailored to preserve a multiplicity of over-the-air (OTA) broadcast stations for American households without cable. 49 Breyer focused his opinion on the preservation of over-the-air broadcasting and the important source of information it represents to those households that do not subscribe to CATV. 50 Breyer ignored the economic and competitive arguments in the principal opinion pertinent to its analysis of the third government interest: the promotion of fair competition in the delivery of television programming. 51 He instead concluded the First Amendment rights of viewers without CATV to have access to a variety of broadcast programming options outweighed any potential loss of programming CATV subscribers might experience. 52 ssent Just as she did in Turner I, opinion in Turner II 53 Ginsburg. 54 t it 48 Turner II, at 226 (Breyer, J., concurring in part). 49 Id. at 215-16. 50 Id. at 226. 51 Id. 52 Id. at 228-229. 53 Id. at 229. 54 Id.

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141 -carry decision. 55 questioned the continued validity of much of the data the plurality relied on based on the fact that it was prepared some six years before the enactment of must-carry. 56 suggesting the broadcast industry was indeed quite healthy. 57 The number of stations in the period prior to the enactment of must-carry increased by 263 and broadcast advertising revenue was growing. 58 In 499 of the 504 media markets the number of commercial broadcast stations in 1992 equaled or exceeded those broadcasting in 1987. 59 -carry rules to be narrowly tailored; neither did she understand Justice Breyer to in his concurring opinion. 60 She criticized the plurality an issue of constitutional law. 61 The dissent criticized the plurality for analyzing mustcarry data on a national basis rather than marketby -market in order to determine the actual threat must-carry presented to the dissemination of information. 62 According to a cable operator was unlikely to remove a popular broadcast station from its 55 Id. at 246. 56 Id. at 245. 57 Id. at 249. 58 Id. 59 Id. at 248. 60 Id. at 251. 61 Id. at 232. 62 Id. at 232-233.

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142 channel lineup because doing so would negatively impact the largest source of a cable 63 second appellant, cable programmers. 64 The Court u and cable operators. 65 the threat to broadcasters and im properly attributing the results of that threat to the anticompetitive behavior of cable operators. 66 Given the data as analyzed by the Court it is impossible to conclude whether Congress was addressing an actual problem or one of conjecture in implementing the must-carry rules. 67 With Turner II the must-carry rules were now law, but passage of time and the development of technology would challenge both their relevancy and applicability. The precedential value of the plurality decision in Turner II has yet to be tested, but appears to be weakened by the failure of five justices to agree on a united legal analysis. Justice Breyer chose competition and economic concerns. 68 he issue of fair competition o be the only one fully developed and explained in the principal opinion. 69 63 Id. at 239. 64 Id. at 257. 65 Id. at 249. 66 Id. at 258. 67 Id. 68 Id. at 226. 69 Id. at 258.

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143 Instead, Breyer based his opinion on the preservation of over-the-air television and importance of the widespread dissemination of information to non-cable television viewers. 70 Must-Carry and Direct Broadcast Satellite (DBS) Turner II decision Congress sought to extend the must-carry rules to the emerging Direct Broadcast Satellite (DBS) industry. The Satellite Home Viewer Improvement Act (SHVIA) allowed DBS operators to become more competitive with CATV by allowing them to carry local broadcast stations within their individual markets. 71 Congress achieved this by granting DBS operators a royaltyfree statutory copyright license to carry local stations. 72 However, the SHVIA also required DBS operators like DirecTV and Dish Network to obtain consent in the form of retransmission consent or mandatory carriage from local broadcasters whose signals they sought to carry. 73 Rather than require DBS operators to carry local broadcast channels, the SHVIA instead gave them the option to provide local stations in the markets of their choosing. 74 -into70 Id. 71 The SHVIA was enacted as Title I of the Intellectual Property and Communications Omnibus signals by satellite carriers, codified in scattered sections of 17 and 47 U.S.C.), Pub. L. No. 106113, 113 Stat. 1501, Appendix I (1999). 72 47 U.S.C.A. 325(b). 73 Id. 74 See http://www.fcc.gov/mb/shva/

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144 broadcast channels in a market once it chooses to begin offering a ny local station in that specific market. 75 In 2004 Congress passed the Satellite Home Viewer Extension and Reauthorization Act. (SHVERA). 76 SHVERA extended and revised the provisions of the SHVIA. DBS has proven to be a very capable competitor to CATV within the multichannel video programming distributor (MVPD) market. Currently only cable giant Comcast serves a larger subscriber base than DirecTV and Dish Network. 77 DirecTV and Dish Network are second and third in MVPD subscribers served. 78 The CATV industry has responded to the increased competition from DBS and other MVPDs by expanding channel offerings and offering additional services like high-speed Internet and telephone. 79 The Digitalization of Broadcast Television The must-carry rules were written for broadcasting in its analog form and that form at the time of Turner II in 1997 was already in the process of being phased out. Broadcasting was in the early stages of what would be a lengthy move to digital television (DTV). Many of the challenges broadcasting faced during its analog development discussed in C hapter Two would be revisited during the DTV switch. 75 Id. 76 Satellite Home Viewer Extension and Reauthorization Act ("SHVERA"), Pub. L. No. 108-447, Appropriations Act, 2005). 77 Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, Thirteenth Annual Report, MB Docket No. 0-6-189 (Rel. Jan. 16, 2009) (hereinafter 2006 Annual Report ). 78 Id. at 5, 39 (DBS accounted for 29.2 percent of total MVPD subscribers and served 27.97 mi llion U.S. households). 79 Id. at 4.

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145 Technical standards, frequency allocation, licensing, and transition concerns were all part of a debate that started in 1988. 1988 for the arrival of what was then referred to as advanced television (ATV) turned out to be a twenty-one year odyssey. 80 Several delays postponed the final transition from analog broadcasting to DTV until the summer of 2009. 81 The Promise of DTV The FCC began to seriously examine how to transition broadcast television into a higher definition format in 1987. 82 The digital aspect of the transition would be incorporated later. The earliest ideas considered included improving the current NTSC standard to correct interlaced and color defects within the signal that would only be exaggerated in higher resolution. 83 Bell Labs developed an HD system that required twice the bandwidth utilized by analog broadcasting. 84 The Columbia Broadcasting System (CBS) experimented with HDTV delivery via DBS services. 85 One early idea that did turn out to be part of the transition was the utilization of the current VHF and UHF spectrum for what would eventually become DTV. 86 80 Statement of FCC Chairman Dennis Patrick on Advanced Television, Tentative Decision and Further Notice of Inquiry in MM Docket No. 87-268, 3 FCC Rcd 6548 (1988). 81 Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service, Fifth Report and Order, 12 FC.C.R. 12809 (1997) (hereinafter Fifth Report and Order). 82 Notice of Inquiry in MM Docket No. 87-268, 11 FCC Rcd 5125 (1987). 83 Id. at 5127 84 Id. at 5129. 85 Id. 86 Id. at 5130.

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146 The FCC followed up in 1988 by determining that due to the scarcity of spectrum, allocating more that the current 6MHz of spectrum to broadcasters would not be practical. 87 The Commission identified several goals for what was still being referred to as advanced television (ATV). 88 (1) The public would benefit from terrestrial use of ATV techniques. 89 (2) This benefit would be realized most quickly if this technology was implemented by existing broadcasters. 90 (3) The new system would utilize the same spectrum already allocated to broadcast television. 91 (4) During the transition NTSC analog service would have to continue. 92 (5) It would not be in the public interest to restrain the benefits of ATV through non-broadcast services like cable and DBS. 93 Over the next eight years Congress and the FCC continued to examine DTV standards and implementation methods. 94 The plans for implementing Digital Television (DTV) began to crystallize in Telecommunications Act of 1996 (Telecom Act of 1996). 95 87 Tentative Decision and Further Notice of Inquiry in MM Docket No. 87-268, 3 FCC Rcd 6520 (1988). 88 Id. at 6521. 89 Id. 90 Id. 91 Id. 92 Id. 93 Id. 94 See First Report and Order in MM Docket No. 87-268, 5 FCC Rcd 5627 (1990); Notice of Proposed Rule Making in MM Docket No. 87-268, 6 FCC Rcd 7024 (1991); Second Report and Order/Further Notice of Proposed Rule Making in MM Docket No. 87-268, 7 FCC Rcd 3340 (1992); Second Further Notice of Proposed Rule Making in MM Docket No. 87-268, 7 FCC Rcd 5376 (1992); Fourth Further Notice of Proposed Rule Making/Third Notice of Inquiry in MM Docket no. 87-268, 10 FCC Rcd 10541 (1995). 95 Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 (1996).

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147 In the Act it was decided that only existing broadcasters would be eligible for the initial DTV licenses. 96 Telecommunications Act of 1996 The Telecommunications Act of 1996 represented the first major revision of communications law in the United States since the enactment of the Communications Act of 1934. Within the Telecom Act of 1996 was a section that provided guidance for the implementation of advanced television services. 97 Congress codified a transition that would limit initial participation to existing broadcasters. 98 The Act permitted licensees to offer addition services to the point as to not derogate their primary television service, including high definition television (HDTV) broadcasts. 99 Broadcasters upon the receipt of a second channel for digital broadcast also agreed to return either one of their two channels upon the completion of the transition. 100 DTV Implementation By 1997 the goals and promise for digital television (DTV) began to mirror what the technology would eventually deliver. 101 The delivery of high-definition programming, 96 Id. at 336 (a) (1). 97 Id. advanced technology). 98 Id. at 336 (a) (1). 99 Id. vertical and horizontal resolution of analog technology). 100 Id additional license (DTV) or original license (analog) held by the licensee be surrendered to the Commission for reallocation or reassignment (or both) pursuant t 101 In the Matter of on the Existing Television Broadcast Service, MM Docket No. 87-268, 2 FCC Rcd 12809 (Apr. 3, 1997).

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148 the simultaneous delivery of multiple programming streams over a single digital channel, and additional services including data transfer were all identified by the time the FCC adopted its Fifth Report and Order 102 The Commission identified several subscription television, computer and data distribution and transmission, audio programming and other interactive services. 103 The only limit the FCC placed on broadcasters was that any additional services not interfere with their delivery of free over-the-air (OTA) television at an acceptable resolution. 104 The Commission viewed these additional services as important business opportunities for broadcasters to remain viable to continue providing the public with free programming services. 105 106 Complicating this strategy was t order to allow the public to still use television sets that would not be compatible with DTV without an external converter box. 107 While the FCC previously consider a 15-year transition window for the move to DTV the Commission in its Fifth Report and Order decided to accelerate the process and set a 2006 target date for the end of analog television. 108 102 Id. at 12811. 103 Id. at 12821. 104 Id. at 12820. 105 Id. at 12834. 106 Id. at 12811. 107 Id. 108 Id. at 12851.

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149 Just a few weeks after the Supreme Court issued its ruling in Turner II upholding the must-carry rules the FCC began to consider how must-carry and retransmission consent should work in DTV. 109 Tu rner II did not address must-carry in digital television and the FCC decided to seek comment on DTV must-carry in order to start multi-year examination of the issue. 110 The FCC allocated current television channels 2 through 51 to serve as the spectrum for DTV service. 111 replication with each station continuing to broadcast its original analog signal while at th e same time starting to provide viewers with digital televisions DTV service. 112 The pace that stations were starting to broadcast in DTV was slower than the FCC had hoped. 113 The Commission instituted a 6-month waiver policy for stations that would not be able to meet the May 2002 deadline. 114 While the waivers were to only be granted to hardship cases, this stumble in the process would be indicative of how difficult the transition to DTV would be particularly in smaller markets or for those stations with li mited financial resources. 115 109 Id. at 12852. 110 Id. 111 Memorandum Opinion and Order on Reconsideration of the Sixth Report and Order, 13 FCC Rcd 7418 (1998). 112 Television, MM Docket No. 00-39 at 9 (Rel. Nov. 15, 2001). 113 Id. at 40. 114 Id. 115 Id.

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150 The broadcast side of the DTV transition is only part of the equation. Just as challenging were issues of reception in general and receiver standards in particular. The FCC sought to resolve of these issues in August of 2002. 116 The FCC adopted a new standard to replace analog NTSC broadcasting for DTV. 117 The ATSC standard for DTV was developed by the Advanced Television Systems Committee. 118 By selecting the ATSC standard the FCC was left to figure out DTV tuner requirements, converter options to allow ATSC signals to be viewed on existing NTSC televisions and setting a schedule requiring set manufacturers to deliver for purchase televisions capable of DTV reception. 119 V transition was pushed back to February 17, 2009. 120 As of April 2007 more than 93 percent of commercial television stations were broadcasting a digital signal. 121 FCC Commissioner Michael J. 116 Television, Second Report and Order and Second Memorandum Opinion and Order, MM Docket No. 00-39 at (Rel. Aug. 9, 2002). 117 Id. at 3. 118 Id. 119 Id. at 56. 120 Reduction Act of 2005, Pub. L. No. 109-171, 120 Stat. 4 (2006) ( codified at 47 U.S.C. 309 (j)(14) and 337 (e)) ( DTVAct 3002(a) amends Section 309(j)(14) of the Communications Act to establish February 17, 2009 as a new hard deadline for the end of analog transmissions by fullsuch actions as are necessary to terminate all licenses for full-power television stations in the analog television service, and to require the cessation of broadcasting by full-power stations in the analog television service, by February 18, 2009). 121 Third Periodic Review Digital Television, Notice of Proposed Rulemaking, MB Docket NO. 07-91 at 8 (Rel. May 18, 2007).

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151 Copps identified two keys to DTV transition success. 122 Broadcasters had to be successfully transmitting digital signals, and consumers needed to have the capability to receive them. 123 providing all parties a single opportunity to get it right. 124 This long stand pushed the final transition to June 12, 2009. 125 This time the transition took place as scheduled and stations turned off their analog transmitters to usher in the DTV only era for broadcasting in the United States. 126 The digital television transition was delayed -carry rules and how they would be applied to DTV was ready to go in 2005. Must-Carry Goes Digital After several years of comment and debate on the issue of digital must-carry the FCC released its Second Report and Order in February of 2005 In this report, the 122 Id. at 88 (Statement of Commissioner Michael J. Copps). 123 Id. 124 Id. 125 DTV Delay Act, S. 352, 111th Cong. (2009) (enacted). 126 See Press Release, Federal Communications Commission, FCC Chairman Hails New Era in Broadcasting (June 12, 2009) (available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-291377A1.pdf (last visited Sept. 4, 2009)); Statement of Commissioner Jonathan S. Adelstein on The Digital Television Transition (June 13, 2009) (available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC291389A1.pdf (last visited Sept. 4, 2009)); Remarks of Acting FCC Chairman Michael J. Copps in the Wake of the Digital Television Transition (June 13, 2009) (available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-291388A1.pdf (last visited Sept. 4, 2009)).

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152 127 The FCC was interested in answering the following questions: (1) whether cable operators are required to carry both the digital and analog signals of a station during the digital carriage limitations for commercial and non-commercial broadcasters under the 1992 Cable Act if a broadcaster chooses to broadcast multiple digital television streams (also 128 DTV Must-Carry Order The FCC conducted a statutory and constitutional analysis of both dual carriage and multicast must-carry. In reviewing dual carriage within the statutory context of the with 129 The FCC believed that mandating dual carriage was identified by Congress in the Act that were upheld in Turner II 130 In the Commission s view a dual carriage requirement would also likely violate the cable operators First Amendment rights. 131 127 Carriage of Digital Television Broadcast Signals: Amendments to Part 76 of the CS Docket No. 98-120, 3 n.10 (rel. Feb. 23, 2005) (hereinafter DTV Must-Carry Order ) (citing 47 U.S.C. on signals, such as the authorization of broadcast high definition television (HDTV), it shall conduct a proceeding to make any changes in the signal carriage requirements of cable systems needed to ensure that cable systems will carry television signals complying with such modified standards in accordance with the objectives of this section). 128 Id. at 23. 129 Id. at 7. 130 Id. at 8. 131 Id. at 3.

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153 Broadcast interests had sought reconsideration on the grounds that since the Act made no distinction between qualifying analog and digital signals, all local television signals must be carried. 132 They argued that if Congress intended to exclude DTV signals from carriage during the transitional period, it would have so indicated in the Act. 133 Broadcasters also believed that dual must-carry would help advance the which in turn, will convince consu 134 The NAB argued 135 The FCC decision on multicasting was based on its interpretation of the meaning -carry provisions were not intended to 136 The Commission held that if a broadcaster elected to split 137 The Commission cited a filing by Professor Laurence H. Tribe submitted on behalf of the NCTA in which the constitutional scholar wrote: 132 Id. at 6-7. 133 Id. 134 Id. at 30. 135 Id. at 14. 136 Id. at 15. 137 Id. at 15-16.

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154 [F]orcing cable operators to carry multiple video streams of digital broadcasters would abridge the editorial freedom of cable operators, harm cable programmers, and invade the rights of audiences to choose what they want to view al l without promoting any of the government interests contemplated by Congress in enacting the must-carry rules, or any of the interests approved by the Supreme Court in Turner I and Turner II. 138 Petitions for Reconsideration The National Association of Broadcasters (NAB) filed a Petition for Reconsideration I with the FCC after the DTV Must-Carry Order was released. 139 The port of its must-carry position. 140 Petition I also applied the capacity issue to multicasting. Broadcasters argued that the 6MHz currently required to carry each analog channel on a cable system is all the capacity that would be needed to carry the full DTV multicast content. 141 In 2004, eighty-six percent of cable systems had upgraded to a system capacity of 750 MHz or higher. 142 138 Id. at 17. See also NCTA Ex Parte Letter in CS Docket No. 98-120 (Files July 9, 2002). See Cable Carriage of Multiplexed Signals Under the 1992 Cable Act and the First Amendment, 87 M ARQ L. R EV. 525, 552-67 (2004) (discussion of the Tribe Memorandum). 139 See Carriage of Digital Television Broadcast Signals: Amendments to Part 76 of the and the Association for Maximum Service Television, Inc., CS Docket No. 98-120 (rel. Apr. 21, 2005) (hereinafter Petition for Reconsideration I). 140 Id. at 12. 141 Id. at 14. 142 2006 Video Competition Report, supra note 77, at 17, (according to the report Channel capacity is bandwidth dedicated to video use. Video channel capacity can be increased or decreased on any given system simply by using more or less bandwidth for other services, such as high-speed Internet access services or cable telephony).

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155 Broadcasters appear ed to have a multicasting ally in soonto be FCC Chairman Kevin J. Martin. In his remarks following the release of the DTV Must-Carry Order, then 143 His argument was -carr 144 The NAB in its Petition for Reconsideration I provided several examples of what broadcasters plan ned to do with multicasting that it claims the Commission failed to mention in its DTV Must-Carry Order Among the examples the NAB cited: The ABC affiliate in Fresno, CA aired full screen election results on its second channel during the gubernatorial recall election. The CBS affiliate in Toledo, OH is exploring opportunities for multicasting state legislative debates, mayoral press conferences, city council hearings, and school committee hearings. KTVB-DT, the NBC affiliate in Boise, Idaho, offers 24-hour local news on a multicast channel. NBC affiliates want to multicast weather channels, as well as local alerts and traffic-related information. contingent on mandatory multicasting carriage. 145 Commissioner Adelstein illustrated the opposing side of the must-carry issue when he presented the findings of a 2003 study by the Alliance for Better Campaigns in 143 DTV Must-Carry Order, supra note 117, at 35 (Separate Statement of Commissioner Kevin J. Martin). 144 Id. 145 Petition for Reconsideration I, supra note 139, at 22-24.

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156 his DTV Must-Carry Order statement. 146 The study found community public affairs pr ogramming accounts for less than half of one percent of local TV programming nationwide compared to 14.4 percent for paid programming. 147 Paid programming 148 In a separate filing, ABC, CBS and NBC affiliated stations claimed the Co DTV Must-Carry Order and 149 that included: using the wrong legal framework; 150 not adequately considering the importance of multicast carriage to advance important government interests; 151 the burden on cable systems would be negligible; 152 and not acknowledging the extensive evidence in the record that private negotiations will not result in adequate carriage of valuable multicast programming. 153 CATV and Public Television Reach Agreement As commercial broadcasters continued their aggressive pursuit of a legislative remedy that expands must-carry rules to include more than just a single stream of 146 DTV Must-Carry Order, supra note 117, at 41, (Separate Statement of Commissioner Jonathan S. Adelstein). 147 Alliance for Better Campaigns, available at http://www.bettercampaigns.org/reports/display.php?ReportID=12 148 PAX TV, 2003 A NNUAL R EPORT available at http://www.sec.gov/Archives/edgar/data/923877/000100515004000854/000100515004 000854.txt 149 Carriage of Digital Television Broadcast Signals: Amendments to Part 76 of the CS Docket No. 98-120, at 24 (rel. Apr. 21, 2005) (hereinafter Petition for Reconsideration II). 150 Id. at 36. 151 Id. at 6-15. 152 Id. at 15-16. 153 Id. at 1619

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157 the cable industry and non-commercial broadcasters reached an agreement on a more inclusive must-carry policy. 154 A few weeks before the FCC released its DTV Must-Carry Report the Boards of Directors of the NCTA, APTV and PBS jointly announced they had approved a new digital mustallow U.S. cable customers to enjoy the high155 The Public Television Digital Carriage Agreement (PTDCA) has since been ratified by Public Television 156 Public Television stations digital programming will be carried on cable systems serving 157 The agreement included three major terms: (1) during the transition when both analog and digital signals are being broadcast, upgraded c non -commercial digital broadcast programming and associated materials from at least upgraded ca -commercial digital 154 See generally, Andrew D. Cotlar, The Road Not Yet Traveled: Why the FCC Should Issue Digital Must57 Fed. Comm. L. J. 49 (2004) (published prior to the PTDCA, this article provides a thorough analysis of the benefits of benefits of digital must-carry for Public Television). 155 Press Release, National Cable & Telecommunications Association, Boards of APTS, NCTA, and PBS Approve Public Television Digital Cable Carriage Agreement (Feb. 4, 2005) (on file with author ). 156 Press Release, National Cable & Telecommunications Association, Public Television and Cable Ratify Digital Cable Carriage Agreement (Apr. 14, 2005) (on file with author). 157 Press Release, supra note 155.

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158 programming of each local must-carry Public Television station. This may include four streams of free non-commercial digital programming and associated material, subject to reasonable pro -only before the DTV market transition my choose to have its 158 Commenting on the PTDCA, FCC Commissioner Kathleen Q. Abernathy applauded the negotiated agreement as proof that negotiated carriage can occur and would significantly interest their subscrib 159 Commissioner Jonathan S. Adelstein debate, [because] the public stands to benefit in very tangible ways from this 160 Petition for Reconsideration II offered an analysis of the PTDCA from commercial broadcasters. 161 They claim that the agreement did not provide an adequate model for cable operators to use to negotiate similar deals with commercial broadcasters. 162 The competition for advertising dollars between cable operators and commercial broadcasters creates a financial incentive for cable operators that would likely lead to a 158 Id. 159 DTV Must-Carry Order, supra note 110, at 31, (Separate Statement of Commissioner Kathleen Q. Abernathy). 160 Id. at 37, (Separate Statement of Commissioner Jonathan S. Adelstein). 161 Petition for Reconsideration II, supra note 149, at 19. 162 Id.

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159 denial of multicast carriage the digital signals of commercial stations. 163 The NAB would soon gain a powerful ally in Michael Powell Martin. Martin not only favored multicast must-carry for broadcasters but a general reregulation of the CATV industry. The Federal Communications Commission (FCC) has been an evolving entity since its inception in 1934. 164 The political party in control of the White House is able to advance its agenda. 165 However, in some cases the party line is blurred and this was the case following the resignation of FCC Chairman Michael Powell and the decision by President George W. Bush to replace him with Republican commissioner Kevin Martin. 166 Martin would seek to advance a regulatory agenda for CATV not only at odds wi th his predecessor but his political party as well The Martin Era ( 2005 2009 ) As previously discussed, Kevin Martin voiced strong support for the extension of the must-carry rules to include multicas contrary in the DTV Must-Carry Order 167 Martin believed that without cable carriage of broadcasters additional programming there would be a lack of financial incentive for 163 Id. 164 See Federal Communications Commission, About the FCC, http://www.fcc.gov/aboutus.html (last visited Sept. 16, 2009). 165 Id. 166 See Federal Communications Commission, Biography of Kevin J. Martin, http://www.fcc.gov/commissioners/previous/martin/biography.html (last visited Sept. 16, 2009). 167 DTV Must-Carry Order, supra note 110, at 35.

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160 broadcasters to develop these new services to their potential. 168 He concluded that absent a multicast carriage requirement the public would not fully benefit from the expanded programming opportunities made possible by digital signal transmission. 169 by CATV oper broadcasters would be reluctant to deliver additional free programming options to viewers. 170 provided a precursor to a series of policy objectives regarding CATV he would pursue during his tenure as FCC chairman. 171 In addition to an expansion of the must-carry rules to include all programming streams contained within a broadcasters digital signal, he also aggressively attempted to promote a la carte programming options for cable subscribers and advance the reregulation of CATV through tactics found to be questionable in a Majority Staff Report issued by the U.S. House of Representatives Committee on Energy and Commerce. 172 2006 Annual Report assessing the status of competition in the delivery of video programming for 2006 was delayed for more than a year after it 168 Press Release, Press Statement of Commissioner Kevin J. Martin on Decision to Deny Multicast Carriage Rights to Broadcasters, (Feb. 10, 2005) (on file with author). 169 Id. 170 Id. 171 See Jim Puzzanghera, L.A. Times, Dec. 10, 2007; John Eggerton, B ROADCASTING & C ABLE Apr. 1, 2008; Ted Hearn, Stevens to Martin: Drop A La Carte Effort M ULTICHANNEL N EWS Apr. 8, 2008. 172 M AJORITY S TAFF OF H. C OMM ON E NERGY AND C OMMERCE 110 TH C ONG ., D ECEPTION AND D ISTRUST : T HE F EDERAL C OMMUNICATIONS C OMMISSION U NDER C HAIRMAN K EVIN J. M ARTIN (Dec. 2008) (hereinafter Majority Staff Report) of purchasing individual cable channels rather than the current model of CATV operators bundling tiers of channels for purchase in mass.

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161 was adopted in November of 2007. 173 The Majority Staff Report found that Chairman Martin withheld data from the 2006 Annual Report in order to trigger a rule allowing the FCC to expand cable regulation. 174 The report also suggested Martin manipulated data regarding a Commission report on a la carte and claimed that his leadership style did 175 The Majority Staff Report claims Chairman Martin omitted data and relied on a single source in preparing the 2006 Annual Report in order to trigger the 70/70 Rule that would allow significant new regulation of the CATV industry. 176 The full Commission voted not to adopt the 2006 Annual Report without concluding that the 70/70 Rule threshold had not been reached. 177 Martin included data on the cable industry from a single source, Warren Communications, to determine if the 70/70 Rule had been met. 178 According to Commissioner Robert M. McDowell, the author of the Warren Communications analysis said the data were not intended to provide a basis for 179 McDowell, when 173 2006 Annual Report, supra note 77 at 189. 174 Majority Staff Report, at 11-14 (The 70/70 Rule is a statutory threshold that allows the FCC to impose new regulations on CATV operators if cable service with 36 channels or more becomes available to at least 70 percent of all U.S. households and if 70 percent of those See Section 612(g) of the Communications Act of 1984, 47 U.S.C. 532(g). 175 Id. at 2. 176 Id. at 12. 177 Id. at 13. 178 Id. 179 2006 Annual Report, supra no te 77 at 206 (Statement of Commissioner Robert M. McDowell Approving in Part, Dissenting in Part).

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162 taking other sources of data relevant to the CATV industry that were omitted in the 2006 Annual Report, found cable subscription well short of the 70/70 Test. 180 Commissioner Jonathan S. Adelstein was critical of Chairman Martin when he order to advance a political agenda. 181 He also voiced concern over the suppression of the FCC data relevant to the percentage of homes passed by cable. 182 Adelstein cited the effort by the Chairman to advance such controversial findings without providing adequate notice to all Commissioners as a major concern relevant to the effectiveness and credibility of the FCC as an agency. 183 Martin defended his actions in the formulation of the 2006 Annual Report 184 According to the Chairman the data from Warren Communications showed that cable penetration and subscription had surpassed the 70/70 threshold. 185 He justified the use directly from the CATV industry and had been used by the FCC in previous annual reports. 186 180 Id. 181 Id. at 201-203. 182 Id. at 201. 183 Id. at 203. 184 2006 Annual Report, supra note 77 at 198-199. 185 Id. 186 Id.

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163 Chairman in both style and substance. 187 While the FCC chairman may lack significant additional powers in comparison to the remaining commissioners, the chairman is both 188 According to Krasnow and Longley, the chairman of the FCC can accumulate power through exceptional personal abilities and sheer determination as well as deference from the other commissioners. 189 The lack of deference from the remaining FCC commissioners to data in the 2006 Annual Report ambitions. 190 The Genachowski Era (2009 Present) The FCC entered a new era on June 29, 2009 when Julius Genachowski was sworn in as FCC Chairman. 191 In addition to Genachowski, Mignon Clyburn and Meredith Atwell Baker also joined the FCC as new commissioners. 192 Genachowski previously served the Commission as a staffer fr om 1994-97 and has private sector 187 Majority Staff Report, supra note 172. 188 E RWIN G. K RASNOW & L AWRENCE D. L ONGLEY T HE P OLITICS OF B ROADCAST R EGULATION 44 189 Id. 190 See 2006 Annual Report, supra note 77 at 200-208 (Statements critical of lack of openness and access from the Chairman regarding data relevant to the formulation of the 2006 Annual Report ). 191 See Federal Communications Commission, Biography of FCC Chairman Julius Genachowski, http://www.fcc.gov/commissioners/genachowski/biography.html (last visited Sept. 18, 2009). 192 See Federal Communications Commission, Biography of FCC Commissioner Mignon Clyburn, http://www.fcc.gov/commissioners/clyburn/biography.html (last visited Sept. 18, 2009); Federal Communications Commission, Biography of FCC Commissioner Meredith Atwell Baker, http://www.fcc.gov/commissioners/baker/biography.html (last visited Sept. 18, 2009).

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164 experience in the technology industry. 193 With three new faces out of five the FCC is positioned for reorganization and redirection. With the successful completion of the transition to DTV for full-power television broadcasters the FCC and Congress have shifted attention to the development and implementation of a national broadband policy. 194 Chairman Genachowski outlined his strategy for a formulating a National Broadband Plan in testimony before the U.S. House of Representatives Subcommittee on Communications, Technology and the Internet. 195 challenge for the United States that rivals railroads, the interstate highway system and telephone in scope and importance. 196 While the CATV industry is heavily integrated into the broadband industry, it will be interesting to see how the business of broadcasting fits into an FCC where the priority is focused on broadband issues. Conclusion The must-carry debate remains settled in the short-term in large part because broadcasters have failed to take advantage of multicast opportunities to serve the public. According to FCC Commissioner Michael Copps, the opportunity for broadcasters to develop content to serve their local communities on digital subchannels 193 Federal Communications Commission, supra note 191. 194 See Broadband.gov, http://www.broadband.gov/ (last visited Sept. 18, 2009). 195 Oversight of the Federal Communications Commission, Hearing Before the Subcomm. On Communications, Technology, and the Internet of the H. Comm. On Energy and Commerce, 111 th Cong. (2009) (statement of Julius Genachowski, Chairman of the Federal Communications Commission). 196 Id.

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165 has largely gone untapped. 197 Should broadcasters innovate and create content that serves and attracts an audience the issue of CATV carriage of these services might once again become a priority for Congress and the FCC. The relationship between Congress, the FCC, the courts, broadcasters and the CATV industry discussed in this chapter is one with a rich and dynamic history. Looking ahead to the future this relationship is poised to become even more dynamic as new technologies emerge as competition in the delivery of video content to consumers. In the near term, commercial broadcasters appear to be focused on maximizing revenue generated from the negotiation of retransmission fees from CATV operators. 198 The Na on retransmission consent and introduce a legislative initiative to change the rules to ones more favorable to cable interests. 199 197 Oversight of the Federal Communications Commission, Hearing Before the Subcomm. On Communications, Technology, and the Internet of the H. Comm. On Energy and Commerce, 111 th Cong. (2009) (statement of Michael J. Copps, FCC Commissioner). 198 Robert Marich, B RO ADCASTING & C ABLE July 7, 2008 available at http://www.broadcastingcable.com/index.asp?layout=articlePrint&articleID=CA6575703 ; Mike Farrell, Sinclair Counts Retrans Rewards, M ULTICHANNEL N EWS Feb. 18, 2008 available at http://www.multichannel.com/index.asp?layout=articlePrint&articleID=CA6533121 ; Ted Hearn, Lawmakers Troubled By Cable, LIN TV Spat, M ULTICHANNEL N EWS Oct. 22, 2008 (on file with author); Nicholas J.C. Pistor, St. Louis Television Station and Charter at Impasse S T L OUIS P OST -D ISPATCH Dec. 21, 2008 (on file with author); Executive Session with Perry Sook, High Hopes for Cash Retrans, Round II TVN EWSDAY Nov. 25, 2008 (on file with author); Harry A. Jessell, Sook To Nets: No Free Retrans Money TVN EWS C HECK Sept. 10, 2009 available at http://www.tvnewscheck.com/articles/2009/09/10/daily.9/ 199 Harry A. Jessell, NCTA Declares War Over Retrans TV N EWSDAY Sept. 19, 2008 available at http://www.tvnewsday.com/articles/2008/09/19/daily.8/ (National Cable & Telecommunications President Kyle McSlarrow says his organization is preparing to challenge retransmission in response to some broadcasters demanding as much as a 500% increase in fee demands).

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166 CHAPTER 5 CONCLUSION Introduction igital will do for television what it has done for every other communications technology it touches make it better, more efficient, more interactive, more win for consumers and for the long-t Acting FCC Chairman Michael J. Copps 1 The long-term health of the broadcast industry that Commissioner Copps refers to is certain to involve change and its continued success will be measured much differently than it was domination of the video delivery market. Currently both broadcast television and cable (CATV) remain the primary choice among viewers for video programming, as well as being significant revenue producers. However, increased competition and new technologies are poised to redefine the media landscape. Broadcast television share of the viewing audience continues its slow erosion to competition from nonbroadcast channels. For the 2005-2006 television season broadcasters accounted for a 45 share of the prime time viewing households with nonbroadcast channels increasing their share to 55. 2 Almost 87 percent of television 1 Michael J. Copps, Acting Television Transition (June 13, 2009), available at http://www.fcc.gov/commissioners/copps/statements2009.html (last visited Sept. 24, 2009). 2 Nielsen Media Research, Broadcast Calendar (TV Season) Share of Audience Report, Prime Time and Total Day, Dec. 2006. A share is the percent of all households using television during the time period that are viewing the specified station(s) or network(s). Due to simultaneous multiple-set viewing, Nielsen reports audience shares that exceed 100 percent when totaled. We have normalized the reported audience shares by recalculating them on a base (or denominator) equaling 100 percent, and adjusting the numerators accordingly.

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167 households in the United States subscribe to a multichannel video programming distributor (MVPD) like CATV or direct broadcast satellite (DBS). 3 The advertising revenue for commercial broadcasters and CATV is trending in opposite directions. Traditional broadcasting still accounted for $44.5 billion in advertising revenue in 2007, but this represented a 5 percent decline from the previous year. 4 CATV share of the advertising revenue grew by more than 5 percent to $26.3 billion from 2006 to 2007. 5 In addition to advertising the CATV industry also generates revenue through subscription fees for programming tiers, Internet, telephone and other enhanced services. When taken in combination CATV revenue exceeds $80 billion. 6 In advancing the competition between broadcast television and CATV, broadcasters appear to be at a severe disadvantage. Broadcasting s reliance on advertising as its most significant revenue source creates an incredible challenge for the industry moving forward. Continued loss of audience share only exacerbates the problem. This study has examined the history of commercial broadcasting and cable television (CATV) in the United States and the role the Federal Communications Commission (FCC), Congress and the courts have played in defining the contentious relationship between the two. The recently completed transition from analog to digita l 3 Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, Thirteenth Annual Report MB Docket No. 06-189, 5, (rel. Jan. 16, 2009) (hereinafter 2006 Video Competition Report). 4 Television Bureau of Advertising, Historical Cross-Media Ad Expenditures for 2007, at http://www.tvb.org/nav/build_frameset.aspx (last visited Sept. 24, 2009) 5 Id. 6 2006 Video Competition Report, supra note 3 at 23.

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168 broadcast television (DTV) and the evolution of the Internet and other technologies as competition to broadcasting and CATV have created a strain on long-defined roles and established regulatory and judicial constructs. This chapter will begin with an examination of the protective nature of Congress communications technologies and competition mandated by the Telecommunications Act of 1996. 7 It will then offer a historical summary of must-carry as decided in Turner v. FCC (1997) and the applicability of the Courts holding to DTV and multicasting. 8 From there, the overall regulatory history between broadcasters and cable operator will be analyzed for forward guidance i digital media environment that extends beyond broadcasting and CATV. This chapter will answer the Research Questions presented in Chapter One: Why have Congress and the FCC historically protected the interests of broadcasters over those of cable television? Does the plurality opinion in Turner II when applied to the current media landscape, allow broadcasters to seek an expansion of the must-carry rules in DTV to include multicast carriage? Chapter Five will conclude with discussion on how the regulatory lessons learned by the actions of Congress and the Federal Communications Commission throughout the history of broadcast and cable regulation in general, and the must-carry dispute in particular, may offer guidance in addressing future regulatory challenges as technology 7 Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 (1996). 8 Turner Broadcasting System, Inc. v. FCC 520 U.S. 180 (1997) (hereinafter Turner II ) (held that the must-carry provisions under the 1992 Cable Act were consistent with the First Amendment because the rules furthered an important governmental interests and did not burden cable operators speech more than necessary to further those interests).

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169 evolves. The chapter will then offer suggestions for future research and a summary of Research Questions By using legal research methodology, this dissertation will attempt to answer the following research questions: Why have Congress and the FCC historically protected the interests of broadcasters over those of cable television? The growth of broadcasting in the United States is a success story that took place with significant oversight from the federal government. The passage of the Radio Act of 1927 created a regulatory framework designed to insure the success of broadcasting as a national service that remains in use. 9 Congress clarified this mandate further in the Communications Act of 1934 when it created the Federal Communications Commission (FCC) and charged it with providing the people of the United States with a pid, efficient and Nation10 Congress did not extend this mandate to include what would become cable television (CATV). Unlike broadcasting, CATV began in rural communities in Pennsylvania, Oregon and Arkansas as the answer to major shortcomings in the reception of broadcast television signals. 11 Overcoming its small town roots to complete 9 Radio Act of 1927, Pub. L. No. 69-632, 44 Stat. 1162. 10 Communications Act of 1934, 47 C.F.R. 151 (1934) (In Section 1 of this Act Congress and foreign commerce in communication by wire and radio so as to make available, so far as possible, to all the people of the United States a rapid, efficient, Nation-wide, and world-wide 11 See B RIAN L OCKMAN & DON S ARVEY P IONEERS OF C ABLE TELEVISION (McFarland & Company 2005); P ATRICK R P ARSONS B LUE S KIES : A H ISTORY OF C ABLE T ELEVISION 1-2 (Temple University Press 2008).

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170 with broadcasting as an economic equal would take the CATV industry decades to achieve and the FCC, political parity would be just as difficult to realize. The relationship between the FCC, as regulator, and the industries in oversees is a complex one Erwin Krasnow, Lawrence Longely, and Herbert Terry authored one of the most thorough studies of the regulatory process as it pertains to mass communication. 12 Their analysis of the broadcast regulatory process identified six major policy determiners. 13 Their list includes Congress, the FCC, industry, the courts, citizen groups, and the White House. 14 The actions, influences, agendas and biases of each of these participants are central to understanding the process involved in creating much of the law and policy impacting broadcasting and cable. Philip Napoli expanded the Krasnow model by elevating the determiners into private sector, judicial, political, and bureaucratic tiers from which they interact with one another. 15 He also categorized the relationship between each as either that of principle or agent. 16 These determiners are the main players in this study of the must-carry issue and the transition to digital television (DTV). 12 E RWIN G. K RASNOW & L AWRENCE D. L ONGLEY T HE P OLITICS OF B ROADCAST R EGULATION (St. 13 Id. 14 Id. at 33. 15 P HILIP M. N APOLI F OUNDATIONS OF C OMMUNICATION P OLICY : P RINCIPLES AND PROCESS IN THE R EGULATION OF E LECTRONIC M EDIA (Hampton Press 2001). 16 Id. at 227-229.

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171 One theory associated with the regulatory process worthy of further discussion is regulatory capture. 17 This theory is applicable to any government regulatory agency and has been applied to the FCCs and its relationship to the industries it regulates. 18 Krasnow touches on the concept of regulators, in this case FCC representatives, 19 t also recognized the importance of regulators possessing the necessary understanding of the industries they regulate. 20 The kind of understanding that can only come from industry experience. 21 Broadcasters have enjoyed an inclusive relationship with the federal government since the radio conferences predating the passage of the Radio Act of 1927. Robert in the broadcast licensing process Federal Radio Commission (FRC) in the late 1920s. 22 Curre broadcast satellite (DBS), broadband providers, wireless carriers, and telephone companies. 17 K RANSOW supra note 12 at 48-50. 18 Id. 19 Id ; See also Glen O. Robinson, The Federal Communications Commission: An Essay on Regulatory Watchdogs, 64 V A L. R EV. L AW R EVIEW 192, (1978) 20 Id. 21 Id. 22 R OBERT B RITT H OROWITZ T HE I RONY OF R EGULATORY R EFORM : T HE D EREGULATION OF A MERICAN T ELECOMMUNICATIONS 166-168 (Oxford University Press 1989).

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172 Wireless to Broadcast wi reless communication can be traced back to 1910, more than a decade before radio would discover its potential as a commercial endeavor. The Wireless Ship Act of 1910 required any ocean-going steamer to be equipped with a working radio and a competent radio operator. 23 Within the Act of 1910 Congress also granted the Secretary of Commerce and Labor the power to create the necessary regulations to support it. 24 Two years later, Congress passed the Radio Act of 1912. The 1912 Act provided for a licensing system, but failed to give the Secretary of Commerce the specific power to establish and enforce the additional regulation necessary during the rapid expansion of broadcast radio in the mid1920s 25 During World War I all radio stations were turned over to the control of the United States Navy. 26 The government also mandated the emergency pooling of the patent rights for radio technology. 27 After the war the Radio Corporation of America (RCA) was created and the network driven broadcast business model that is still in use today was born. 28 23 Wireless Ship Act of 1910, Pub. L. No. 61-262, 36 Stat. 629 (1910). 24 Id. 25 Radio Act of 1912, Pub. L. No. 62-264, 37 Stat. 302 (1912). 26 Id. 27 M ARVIN R. B ENSMAN T HE B EGINNING OF B ROADCAST R EGULATION IN THE T WENTIETH C ENTURY 11-12 (McFarland & Co. 2000). 28 Id.

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173 Despite numerous attempts by Congress to pass new legislation to update the Radio Act of 1912, fifteen years would pass before new legislation would be enacted. 29 In the interim, Secretary of Commerce Herbert Hoover was in charge of the federal radio conferences were held between 1922 and 1925. 30 Absent new legislation the participate as a government equal during these conferences and exert influence and consolidate power. After doing so, these major broadcast powers sought legislative protection to limit the access of potential new competitors. The Radio Act of 1927 created the Federal Radio Commission (FRC). 31 The FRC was granted the convenience, interest, or necessity 32 This power was extended and expanded by Congress with the passage of the Communications Act of 1934. 33 With commercial radio prospering and television in development the Act of 1934 remained in effect 29 L OUISE B ENJAMIN F REEDOM OF THE A IR AND THE P UBLIC I NTEREST : F IRST A MENDMENT R IGHTS IN B ROADCASTING TO 1935 69 (Southern Illinois University Press, 2001). 30 See Report of Department of Commerce on Radio Telephony R ADIO S ERVICE B ULLETIN May 1, 1922, at 22-30; Report of Department of Commerce on Radio Telephony R ADIO S ERVICE B ULLETIN April 2, 1923, at 9-13; Recommendations for Regulation of Radio Adopted by the Third National Radio Conference, October 6-10, 1924 available at http://earlyradiohistory.us/1924conf.htm (last visited November 21, 2009); Proceedings of the Fourth National Radio conference and Recommendations for Regulation of Radio, November 911, 1925 at 8 available at http://earlyradiohistory.us/1925conf.htm (last visited November 21, 2009 ). 31 Radio Act of 1927, Pub. L. No. 69-632, 44 Stat. 1162. 32 Id. 33 Communications Act of 1934, 47 C.F.R. 151 (1934).

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174 without major amendments until Congress passed the Telecommunications Act of 1996. 34 The history of broadcast regulation is rooted in a series of concepts that were developed for radio and would also extend to television. The first was for broadcasting to provide the country with a robust national service. 35 While largely achieved in radio it would prove more elusive in television. Broadcasters are also expected to serve the public interest, convenience and necessity through regulation designed to promote a series of principles that include localism, competition and diversity. 36 Often the regulation designed to promote these principles involves restrictions to broadcasters. Examples include ownership limits, cross-ownership restrictions, broadcast content regulations limiting indecent content and requiring educational programming targeted at children, and the equal time rules requiring broadcasters to provide federal candidates 34 E RIK B ARNOUW A T OWER IN B ABEL : A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME 1 TO 1933 272-274 (Oxford University Press 1966)(Profits remained high for NBC and programming expanded to add vaudevillian comedy and variety fare to successful serial programs like ). 35 See ommunities); Television Assignments supra note 5 at 167 (the plan the FCC adopted in its Sixth Report and Order in assigning television frequencies followed five principles: (1)To provide a least one television service to all parts of the United States; (2) To provide each community with at least one television broadcast station; (3) To provide a choice of at least two television services to all parts of the United States; (4) To provide each community with at least two television broadcast stations; and (5) Any channel which remain unassigned under the foregoing principles will be assigned to various communities depending on the size of the population of each community, the geographical location of such community, and the number of television services available to such community from television stations located in other communities. With three major broadcast networks (NBC, CBS and ABC) seeking a national audience reception of only one station meant viewers would be unable to access all available national programming). 36 Radio Act of 1927, Pub. L. No. 69-632, 44 Stat. 1162 at 4 (1927); Communications Act of 1934, 47 C.F.R. at 303 (1934) (both statutes grant the Commission general powers that t

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175 with access to commercial time at favorable rates. 37 Broadcasters have also benefitted from regulation, especially in matters of competition for licenses, and from entry by new industries. Radio Turns in to Television The economic success of broadcast radio allowed the same companies to conduct research and development in the technology of television and position themselves to take advantage of it. 38 As radio began its transition into television, the FCC sought to protect local broadcasters, in this case radio, from restrictive network affiliation contracts that left program providers like NBC and CBS with significant control over the schedules of local stations. 39 i n this manner in the courts and while the Communications Act of 1934 did not directly grant the Commission the authority to regulate broadcast networks the Supreme Court National Broadcasting Co. v. United States (1943 ) 40 licenses and then regulate those licensees in a manner consistent with protecting the 37 See Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 (1996); FCC Consumer Facts, Obscene, Indecent, and Profane Broadcasts, http://www.fcc.gov/cgb/consumerfacts/obscene.html Educational Television, http://www.fcc.gov/cgb/consumerfacts/childtv.html ; Communications Act of 1934, 315; codified at 47 U.S.C. 315. 38 E RIC B ARNOUW T HE G OLDEN W EB: A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME II 1933 TO 1953 244 (Oxford University Press 1966). 39 Report on Chain Broadcasting Commission Order No. 37; Docket No. 5060 34-44 (May, 1941). 40 National Broadcasting Co. v. United States, 319 U.S. 190 (1943) (held that the FCC had the regulatory authority to enforce rules governing the relationship between broadcast networks and their local affiliated stations).

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176 41 Justice Frankfurter also introduced the scarcity doctrine in broadcasting when he wrote that radio was not available to all who wished to use it and because of that radio abridged free speech. 42 Aiding the success of the transition of radio network model into television was the s decision to stop issuing new broadcast television licenses in 1948. 43 many network ownedand -operated and most at least network-affiliated, already broadcasting to solidify their competitive standing absent new competition. 44 Sixth Report and Order 45 To overcome the shortage of Very High Frequency (VHF) channels to meet the needs of broadcast television the FCC opened the Ultra High Frequency (UHF) to provide enough available channels to meet demand. 46 The UHF spectrum would prove to be troublesome for the FCC and viewers for many years to come. The most critical reason came from UHF reception issues. In 1952, new television sets were not yet required to have a UHF receiver and would not be until the passage of the All-Channel Receiver Act in 1962. 47 UHF stations also were unable to equal the transmission reach of their VHF competition making it more difficult for viewers to receive a quality picture. 41 Id. at 219. 42 Id. at 226. 43 Report and Order, FCC 48-2182, Sept. 30, 1948. 44 B ARNOUW T HE G OLDEN W EB, supra note 38 at 285. 45 Television Assignments, Sixth Report and Order 41 F.C.C. 148 (Apr. 11, 1952). 46 Id. 47 All-Channel Receiver Act of 1962, Pub. L. No. 87-529, 76 Stat. 150 (codified at 47 U.S.C. 303 (s)).

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177 Cable Television: A Friend and Foe to Broadcasters communities unable to receive television signals from some or any network affiliates These numerous holes in the broadcast television reception map created an opportunity for the growth of Community Antenna Television, the forefather of what is now known as cable television (CATV). At first, CATV was viewed as a complementary service to br oadcast television that could temporarily help extend the reach of broadcast signals to communities without stations until UHF could develop and reach its potential. This policy may have succeeded If only the CATV industry subscribed to this subservient role to broadcasters and did not begin pursuing the expansion of programming beyond local stations. Congress gave the FCC the authority to ensure broadcasting would provide the American people with a national service that would serve the public interest The FCC was not yet specifically authorized by Congress to oversee the CATV industry and was reluctant to do so. Instead the Commission relied on its special regulatory relationship with broadcasters to address any threats to broadcasting from CATV whether real or perceived. Issues broadcasters were concerned with regarding their early relationship with CATV operators included signal carriage, the use of large antenna towers or microwave relay systems by CATV systems to import out of market distant signals and protecting their market exclusive programming from duplication from imported stations. 48 The FCC viewed cable as a threat to the successful implementation of the Sixth Report and Order 48 See Carter Mountain Transmission Corporation v. FCC, 321 F.2d 359 (1963).

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178 and would go to increasing lengths to protect local broadcast stations from any harm posed by cable. In its First Report and Order (1965) dealing with cable the FCC focused on two important issues of concern to broadcasters, signal carriage of local stations by CATV operators, more commonly known as must-carry, and the prevention of program duplication by imported signals. 49 The Commission would continue on this regulatory track a year later with the release of its Second Report and Order (1966) 50 The Commission extended and expanded the must-carry and nonduplication rules. The FCC also added what it viewed as additional protection to UHF stations in top-100 markets by prohibiting CATV operators in those markets from importing distant signals. 51 As the FCC began to recognize the potential of CATV and its role as something greater than a simple retransmission provider for broadcast signals, the Commission began to take a more active role in regulating the industry. 52 Congress eventually provided the FCC with the legislative power to regulate cable with the passage of the Cable Act of 1984. 53 The CATV industry emerged from the shadow of broadcast 49 FCC First Report and Order, 38 F.C.C. 683 at 685 (April 22, 1965). 50 Broadcast Signals by Community Antenna Television Systems, Second Report and Order, 2 FCC 2d 725 (March 4, 1966). 51 Id. at 769. 52 See Commission Proposals for the Regulation of Cable Television, 31 F.C.C. 2d 115 (Aug. 5, 1971); Cable Television Report and Order, 36 F.C.C. 2d 141 (Feb. 2, 1972). 53 See Cable Communications Policy Act of 1984, Pub. L. 98-549, 98 Stat. 2779 ; See also C able Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (1992) (codified in 47 USC 521); Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 (1996).

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179 television by first offering non-broadcast programming that would eventually erode nearly half of the primebusiness model includes telephone service and high-speed Internet access. The latter service seems to position the CATV industry for the future in a way broadcasters will not be able to duplicate. Throughout this period of CATV growth Congress and the FCC continued to try and impose must-carry rules requiring the carriage of local stations on CATV systems. CATV successfully Turner II affirming must-carry as necessary to insure the preservation of over-the-air (OTA) broadcasting for those households not subscribing to cable. 54 The Turner II decision will be addressed in more detail in the next section of this chapter. The DTV Transition The process of moving from analog to digital television (DTV) followed a similar path to what radio did as television developed. Incumbency once again had its privileges. Just as radio successfully expanded its power base to include television in the 1930s and 1940s, Congress and the FCC insured that existing television broadcast licensees would lead the way into DTV. 55 The allocation of new frequencies for digital broadcasting was limited to those already licensed to broadcast in analog. 56 While this did make a great deal of sense in terms of future continuity and the preservation of what was a successful broadcast industry, failure to allow minimal entry of new entrants into 54 See Turner Broadcasting System, Inc. v. FCC 520 U.S. 180 (1997); See also Quincy Cable TV, Inc. v. FCC, 248 U.S. App. D.C. 1 12 (1985) ; Century Communications Corp. v. FCC, 835 F.2d 292 304 (1987) 55 See Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 (1996). 56 Id. at 336 (a) (1 ).

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180 DTV was an opportunity missed to infuse much entrepreneurial spirit into a legacy technology in need of innovation. Does the majority opinion in Turner II when applied to the current media landscape, allow broadcasters to seek an expansion of the must-carry rules in DTV to include multicast carriage? The history of must-carry regulation has paralleled a relationship of mutual dislike between commercial broadcasters and CATV operators. At one time the relationship was much easier to define. Broadcasters provided programming and cable operators provided audience via a clear signal over coax. The emergence of cable-exclusive networks like HBO, CNN and ESPN helped cable strengthen its economic position to the point that it now commands over fifty percent of the daily television audience. Cable no longer offers just audience access to broadcasters, but serious competition as well. If the government is going to expand mustnecessary for Congress and the FCC to infringe upon the First Amendment rights of broadcasters too and set guidelines for what would constitute a must-carry multicast stream. Co statement following the release of the Second Report and Order when he wrote: If broadcasters want to be treated as an integral public square in our modern-day digital platforms, then they must realize the public has a right to be squarely involved in that endeavor. To grant multicasting carriage without any protection for the public would test the willingness of the broadcasting industry to serve the public ends as never before. 57 that Commissioner Adelstein 57 Carriage of Digital Television Broadcast Signals: Amendments to Part 76 of the r and First Order on Reconsideration, CS Docket No. 98-120, 43 (Separate Statement of Commissioner Jonathan S. Adelstein) (rel. Feb. 23, 2005) (hereinafter DTV Must-Carry Order).

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181 mentions may provide the CATV industry with its most effective defense against expansion of the must-carry rules to include multicast carriage. The First Amendment and Must-Carry s media specific approach has led to various degrees of First Amendment protection for print, broadcasting, cable and the Internet. 58 The level of First Amendment protection afforded CATV was decided by the Court in Turner v. FCC (1997)(Turner II) in a 54 plurality that held that enforcement of must-carry rules to insure the viability of broadcasting television in the future. 59 The Court determined the must-carry rules were content-neutral and thus subject to intermediate scrutiny under 60 The plurality agreed the must-carry rules passed the test and were narrowly tailored and advanced two substantial government interests: (1) the preservation of free over-the-air broadcast television, and 58 See Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974) (Court held that the editors of a publication control all decision making regarding content and there is no First Amendment ri ght for a citizen, even with government legislation or policy, to have his/her views published); Red Lion v. Federal Communications Commission, 395 U.S. 367 (1969) (Court held that because broadcasting utilized scarce public airwaves the Fairness Doctrine did not violate the First Amendment rights of broadcasters); Federal Communications Commission v. Pacifica Foundation, 438 U.S. 726 (1978) (Court held the FCC could restrict indecent speech on broadcast stations during certain times during the day because the broadcast signal is held that the Internet w Communications Decency Act (CDA) except the ban on obscene materials). 59 Turner II, supra note 8. 60 otherwise protected by the First Amendment if (1) it is within the constitutional power of the government; (2) it furthers important or substantial government interest; (3) that interest is unrelated to the suppression of free expression; and (4) the restriction of freedoms is no greater than is essential to the furtherance of that interest).

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182 (2) the widespread delivery of information to the public from a variety of sources. 61 A third interest, the promotion of fair competition in television programming, while agreed was ignored by Justice Breyer in his separate concurring opinion. 62 Breyer ignored the economic factors of fair completion between broadcasters and CATV and instead focused on the importance of preserving over-the-air television and the diversity of voices it represents to those viewers without CATV service. 63 Breyer determined the potential loss of over-the-air broadcast programming for non-cable viewers posed a greater threat than any loss of cable originated programming would to cable subscribers 64 As discussed in Chapter Four, in her dissenting opinion, did not agree that the must-carry rules were content-neutral and instead believed them to be content-based and subject to strict First Amendment scrutiny. 65 believe the must-carry rules to be narrowly tailored; neither did she understand Justice Breyer to believe that in his concurring opinion. 66 She criticized the plurality for issue of constitutional law. 67 The dissent criticized the plurality for analyzing must-carry data on a national basis rather than marketby -market in order to determine the actual 61 Turner II, supra note 8 at 189. 62 Id. 63 Id. at 228. 64 Id. at 229. 65 Id. at 229. 66 Id. at 251. 67 Id. at 232.

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183 threat must-carry presented to the dissemination of information. 68 According to r was unlikely to remove a popular broadcast station from its channel lineup because doing so would negatively impact the largest source of a cable 69 The precedential value of the plurality decision in Turner II has yet to be tested, but appears to be weakened by the failure of five justices to agree on a united legal competition and economic concerns. 70 f fair competition to be the only one fully developed and explained in the principal opinion. 71 Instead, Breyer based his opinion on the preservation of over-the-air television and importance of the widespread dissemination of information to non-cable television viewers. 72 The expansion of must-carry in any form beyond rules as affirmed in Turner II would likely trigger an immediate judicial challenge from the CATV industry and non -broadcast channels owners. The FCC examined how applicable the mustcarry rules affirmed in Turner II would be regarding multicast must-carry when it DTV Must-Carry Order 73 68 Id. at 232-233. 69 Id. at 239. 70 Id. at 226. 71 Id. at 258. 72 Id. 73 DTV Must-Carry Order, supra note 57 at 15.

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184 The Commission concluded that the must-carry rules as written by Congress did not ment would apply to multicasting. 74 The Commission also analyzed a multicast must-carry requirement through the two interests the Court sought to advance in Turner II : (1) preserving the benefits of free, over-the-air local broadcast television for viewers, and (2) promoting 75 -carry to include multicasting would not advance either goal. 76 The analog argument that the viability of free over-the-air broadcasting required carriage on CATV did not translate into multicast carriage. 77 The Commission also concluded the record did little to advance the idea that multicast mustrom a multiplicity of 78 Regardless of the impact of the fractured plurality in Turner II on the pre ce dential weight of the Court s decision the applicability of its logic when applied do digital broadcast television creates some potential conflict. Multicast broadcast programming -neutral argument in Turner II. While the Court determined must-carry to provide over-the-air programming to viewers regardless to content, broadcast 74 Id. at 18-19. 75 Turner II, supra note 8 at 189-190 (quoting Turner v. FCC, 512 U.S. at 662); see id. at 225226 (opinion of Breyer, J., concurring in part). 76 DTV Must-Carry Order, supra note 57 at 19. 77 Id. 78 Id. at 20.

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185 weather and shopping programming that may be viewed as content-based and in direct completion to cable programming. The media-specific First Amendment cases remain, but the reality is the dividing lines utilized to differentiate each platform constitutionally whether it be print, broadcast, cable or the Internet are blurring. For example, the scarcity of broadcast spectrum, while still true, rings hollow in a world that affords people a variety of new options, not subject to the scarcity argument, to acquire the same content. Maintaining an antiquated understanding of broadcasting from the 1940s mirrors the inability of the recording industry to embrace the digital distribution of music. Just as the consu wishes eventually prevailed in music, the same will be true with video content that was with the American people has passed. The perpetuation of policies that place the industry at a competitive disadvantage against new technologies immune from such oversight may be constitutional, but no longer in the public interest. Congress will have to join the FCC in evolving to reflect changes in the industry that require a broader understanding of broadcast television s place in a technology-driven, changing and highly competitive marketplace. The Numbers Game The Turner II opinion, relied on data to justify the affirmation of the must-carry rules that failed to directly address the potential harm broadcasters would face without the protection of must-carry. 79 79 Turner II, supra note 8 at 233 (the Court provides some raw data on adverse carriage decisions, but it never connects that data to markets and viewership. Instead, the Court

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186 criticized in Turner I only to cite as evidence of adverse carriage examples faced by broadcasters. 80 She added that the FCC study failed to indicate if any of the stations denied carriage would qualify for carriage under must-carry. 81 The plurality placed great emphasis on the fact th at 40 percent of television households did not subscribe to CATV. 82 The Court used data from the 1992 Cable Act in which Congress found that 60 percent of television households subscribed to CATV 83 While 40 percent of television households may have relied solely on over-the-air broadcast television in 1992, five years later, at the time of the Turner II decision, this number had significantly changed. Nine months after the decision 1997 Annual Report showing the percentage of television households that relied entirely on over-the-air television fell to 23 percent, well below the 40 percent figure the Court cited so prominently in its decision. 84 Any attempt to quantify the importance of broadcast television moving forward is not only going to have to take into account competition from CATV, DBS and other Commercial broadcasting remains an important technology in the distribution of video proceeds from the assumptions that adverse carriage decisions nationwide will affect broadcast markets in proportion to their size; and that all broadcast programming is watched by viewers. Neither assumption is logical or has any factual basis in the record). 80 Id. at 240-241; see Cable System Broadcast Signal Carriage Survey, Staff Report by the Policy and Rules Division, Mass Media Bureau (Sept. 1, 1988) (app. 37). 81 Id. at 241. 82 Id. at 190. 83 See H.R. Rep. No. 102-862, at 2 (1992). 84 Annual Assessment of the Status of Competition in the Markets for the Delivery of Video Programming, Fourth Annual Report, CS Docket No. 97-141 (Rel. Jan. 13, 1998) (hereinafter 1997 Annual Report).

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187 based information and entertainment, but it is a shell of its former self and a return to its former dominant state is highly unlikely. The FCC and Digital Must-Carry The problem with the broadcast argument for multicast carriage is that commercial broadcasters have yet to prove that their multicasting content will be worthy of mandated carriage. As the Public Television Digital Carriage Agreement (PTDCA) demonstrated, the negotiation of multicast carriage between broadcasters and cable operators can work. As previously noted in Chapter 4, commercial broadcasters were critical of the agreement in Petition for Reconsideration II, but they did concede the agreement may provide a model for a requirement that cable carry their multicast programming and suggested any such multicasting carriage arrangement needed to be codified in a Commission regulation. 85 Another difference between digital and analog must-carry, as the Court in Turner II found, is that the result of analog must-carry on cable operators was minimal. 86 Most cable systems did not have to add a single broadcast channel because of analog mustcarry. 87 The Court also noted the must-car 88 Scarcity of bandwidth is no longer an issue. This is now strictly a question of access. 85 Carriage of Digital Television Broadcast Signals: Amendments to Part 76 of the CS Docket No. 98-120, at 19 (rel. Apr. 21, 2005) (hereinafter Petition for Reconsideration II). 86 Turner II supra note 8 at 188. 87 Id. 88 Id.

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188 The dilemma for commercial broadcasters is that without expanding must-carry to include multicast, the onus is on them to create new programming that warrants carriage. If new DTV program streams offer consumers content of value, there will be a demand for it. Cable systems will seek to carry high-demand programming in order to satisfy their subscribers. A free pass for broadcasters is not the answer. Without an incentive to create quality programming in order to justify carriage, we could be left with what former NCTA President Robert Sachs feared home shopping channels and low89 In analyzing the digital mustinte posturing by both broadcasters and cable operators to maximize profits. One of the stated goals of the Court in Turner II was to insure the viability of OTA broadcasting for thos e households unable to afford cable television and instead had to rely on broadcasters for their television viewing. 90 In 2006 less than 14 percent of television households fell into this category. 91 This represents a 65 percent reduction from the 40 percent of television households that were limited to OTA television viewing in 1992 as cited in Turner II There are must-carry issues for broadcasters that extend beyond competition with cable operators. Direct Broadcast Satellite (DBS) has already established itself as an important player in the MVPD market, and many telephone companies are investing in 89 Edmund Sanders, TV Firms Split Over Multicasting, L.A. T IMES Dec. 14. 2003, at C1. 90 Turner II supra note 8 at 189. 91 2006 Video Competition Report, supra note 3 at 8.

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189 fiber optic networks that could be used to deliver video programming similar to cable. 92 Thomas W. Hazlett is the Director of the Program on Telecommunications Policy, Institute of Government affairs at the University of California, Davis. He cautions Congress and the FCC to take a more expansive view of the must-carry issue and how ill expand the video delivery market. 93 Through both hardware and software innovations, the Internet is even beginning to take shape as a cable system. 94 Discussion Congress and the Federal Communications Commission have spent more than 80-years exercising a hands-on approach to the oversight of broadcasting and cable. This history is now explored in order to identify possible lessons to be learned that may be applicable to the current and future challenges posed by technological changes that may not fit into existing regulatory models. The most significant change facing the FCC is the speed of technological change. The introduction of broadcast television and CATV equated to regulatory stability that could be measured in decades. Moving forward, the FCC will be challenged to adapt and properly oversee rapid change to existing technologies as well as innovation and the implementation of new ones. 92 Id. at 6, (As of June 2006, approximately 28 million U.S. households subscribed to DBS services. This represents an increase of 7.1 percent over the previous year. DBS comprised approximately 29 percent of all MVPD subscribers). 93 Thomas W. Hazlett, adcasting v. FCC (1997), 8 S. C T E CON R EV. 141 201-02 (2000). 94 Id. at 202.

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190 The FCC has protected broadcasters throughout much of its existence First, the Commission shielded incumbents from increased competition from those seeking access to the broadcast spectrum, then it provided broadcasters with decades of protection from outside competition like CATV. 95 This was a rather natural instinct for the Commission when one factors in that Congress, with input from the industry, established the regulatory structure that allowed the commercial broadcasting model to flourish. 96 It also created the regulatory agencies responsible for the oversight of broadcasting; first the Federal Radio Commission, then the FCC. 97 Each operated under the mandate to insure broadcasting reached its potential to ser interest, convenience and necessity. 98 A History of Broadcast Protection States Congress and is subject to federal oversight from the FCC. Broadcasting also benefited from the powerful vision and leadership of David Sarnoff and William Paley 99 The development of CATV followed a much different 95 See generally M ARVIN R. B ENSMAN T HE B EGINNING OF B ROADCAST R EGULATION IN THE T WENTIETH C ENTURY 8-9 (McFarland & Co. 2000); Louise Benjamin, Working It Out Together: Radio Policy from Hoover to the Radio Act of 1927 Journal of Broadcasting & Electronic Media, Spring 1998. 96 Id. 97 Radio Act of 1927, Pub. L. No. 69-632, 44 Stat. 1162 at 3 (1927); Communications Act of 1934, 47 C.F.R. at 4 (1934) (the Federal Radio Commission was composed of five commissioners, while the original Federal Communications Commission included 7 commissioners). 98 Radio Act of 1927, Pub. L. No. 69-632, 44 Stat. 1162 at 4 (1927); Communications Act of 1934, 47 C.F.R. at 303 (1934) (both statutes grant the Commission general powers that 99 See generally D AVID S ARNOFF L OOKING A HEAD : T HE P APERS OF D AVID S ARNOFF (Dr. Jerome B. Wiesner ed., McGraw-Hill 1968) (while Sarnoff in able to present himself in the best possible

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191 path than that of broadcasters. The CATV industry began in rural areas unable to receive broadcast signals without the benefits of a community antenna service. 100 Unlike Sarnoff and Paley, the early pioneers of cable operated in isolation from one another and were more interested in concentrating on individual system success than the politics of Congress. 101 This disconnect among early CATV operators in organizing gave broadcasters an advantage that was maximized through the efforts of the National Association of Broadcasters (NAB). 102 During the 1920s, then-Secretary of Commerce Hoover followed a policy of self-regulation for radio and the industry embraced it. 103 Radio broadcasters did not seek formal federal regulation until increased competition began to crowd the airwaves light, the opportunity to view a body of work that parallels the history of broadcasting in the United States is still valuable); K ENNETH B ILBY T HE G ENERAL : D AVID S ARNOFF AND THE R ISE OF THE C OM MUNICATIONS I NDUSTRY (Harper & Row 1986) (Bilby classified this work as an years); R OBERT S OBEL RCA (Stein and Day 1986) (a comprehensive history of RCA from its formation through the mid1979); Sally Bedell Smith, In All His Glory: The Life of William S. Paley, the Legendary Tycoon and his Brilliant Circle (Simon and Schuster 1990); Lewis J. Paper, Empire: William S. Paley 100 See B RIAN L OCKMAN & DON S ARVEY P IONEERS OF C ABLE TELEVISION 3 (McFarland & Company 2005); P ATRICK R P ARSONS B LUE S KIES : A H ISTORY OF C ABLE T ELEVISION 1-2 (Temple University Press 2008) (Introduces the efforts of George Gardner and his associates to broadcasting to places blocked by topography). 101 Id. 102 The National Association of Broadcasters, http://www.nab.org (last visited Dec. 10, 2009 ) The National Association of Broadcasters (NAB) was created in 1923 to help broadcasters mount an organized front in dealing with music licensing disputes. The organization evolve d into an important political organization central to the promotion of broadcaster interests in Washington, D.C.). 103 B ENSMAN supra note 27 at 19.

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192 104 Th e Radio Act of 1927 did not only require those that wished to broadcast to acquire a license, the Act also provided a barrier to future competition for those already in the industry. 105 Examples of incumbent broadcasters exercising power over policy continued as television also derailed the development of FM as competition to the AM empires of NBC and CBS. 106 -high frequency (VHF) band proved to be grossly inadequate to the development of a national television broadcasting service that would rival radio. 107 Incumbent broadcasters not only successfully lobbied Congress and the FCC to not have to vacate VHF and move to the more expansive ultra-high frequency (UHF) band they also benefited from the four year titors from entering the business. 108 This appeasement of VHF broadcasters created a chasm between VHF and UHF stations that limited the growth of UHF and permitted major market VHF stations to dominate the network driven era of television. 109 104 unregulated airwaves as overcrowded to the point of ineffectiveness during the years leading up to the Radio Act of 1927. See Generally B ENSMAN supra note 27 at 49, 104, 129, 139. 105 Radio Act of 1927, Pub. L. No. 69-632, 44 Stat. 1162 (1927). 106 E RIC B ARNOUW T HE G OLDEN W EB: A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME II 1933 TO 1953 242 (Oxford University Press 1966). 107 Report and Order, FCC 48-2182, Sept. 30, 1948. 108 Television Assignments, Sixth Report and Order 41 F.C.C. 148 (Apr. 11, 1952). 109 Id. at 155 (Statements were filed with the FCC proposing that the VHF band be abandoned for television and all stations be allocated frequencies in the UHF band. The statements claimed by only allocated television stations in the UHF band serious economic, technological and competitive problems of pursuing a dual band policy could be mitigated. Citing a lack of evidence and a concern that the UHF band alone would not provide enough frequencies the

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193 While CATV may have helped UHF compete with VHF by providing subscribers with UHF reception and signal quality equal to that of VHF the relationship between broadcasters and CATV operators would not significantly improve. Broadcasters early concerns with CATV centered on signal importation and carriage issues and they had allies in Congress and the FCC to promote a pro-broadcast agenda. 110 technology that would be of little use once UHF prospered and filled the gaps VHF alone could not. 111 The potential of CATV to not only compete with broadcasters, but to offer enhanced services beyond television was discussed by the Sloan Commission in the early 1970s. 112 It just took time for the industry to realize this potential. The development of nonbroadcast channels to compete directly with broadcasters and provide CATV with exclusive content allowed the industry to evolve into the powerful media player it is today. Consolidation, rate deregulation and expanded services like broadband and telephone have positioned CATV to be a major factor in the electronic media moving forward in ways broadcasters are not equipped to be FCC rejected the idea); See also Alan Pearce, The Economic and Political Strength of the Television Networks in N ETWORK T ELEVISION AND THE P UBLIC I NTEREST 4 (Michael Botein & David M. Rice eds., Lexington Books 1980) (describes the corporate organization of NBC, CBS ip of valuable VHF stations in major markets provided). 110 See and Order, 26 FCC 403, 18 RR 1573 (1959). 111 See L UCAS A. P OWE A MERICAN B ROADCASTING AND THE F IRST A MENDMENT 219, 225 (University of California Press, 1987) (the FCC realized it needed to enter the business of cable regulation in order to protect broadcasters from competitio 112 See S LOAN C OMMISSION ON C ABLE C OMMUNICATIONS O N THE C ABLE : T HE T ELEVISION OF A BUNDANCE (McGraw-Hill, 1971).

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194 The affirmation of the must-carry rules in 1997 by the Supreme Court in Turner II provided broadcasters with a long awaited victory, but at what cost? 113 As Justice the plurality set a rather low bar for affirming the must-carry rules considering the constitutional considerations in question. 114 In her view, infringing on the constitutionally guaranteed First Amendment rights of CATV operators should require more compelling evidence than a concern for what might happen. 115 The transition to DTV included additional examples of policies favorable to existing allocation of DTV frequencies was limited to existing broadcasters. 116 In addition, the the space for additional frequencies to be assigned in the largest markets and densely populated regions of the nation. Given the current trends in technology and economics it is highly unlikely that there would be great demand for increased capacity within the broadcast television spectrum, but it is important to note that the technological means exists for each station to be allotted less spectrum and still provide a HD broadcast signal to viewers. Broadcasters have benefited from their special relationship with Congress and the FCC, especially in restricting the growth of CATV as a competitor. However, this 113 Turner II, supra note 8. 114 Id 115 Id. 116 Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 at 336 (a) (1) (1996).

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1 95 relationship has also resulted in disadvantages. While the Fairness Doctrine is no longer enforced, broadcasters are still subject to content regulation limiting indecent programming as well as rules mandating the airing of certain amounts of educational relaxed as a result of the Telecommunications Act of 1996, still restrict broadcasters from exceeding certain caps and prohibit the cross-ownership of broadcast stations and newspapers in the same market. Broadcasters were also required to make the transition into digital television whether they wanted to or not. In spite of these disadvantages, the benefits enjoyed by broadcasters have so far exceeded their regulatory burden. However, the future of this relationship in its current form is much more difficult to predict. The more important argument in favor of releasing broadcasters from the shackles of the scarcity doctrine going forward is to develop a holistic approach to telecommunications regulation that recognizes that consumers are no longer limited to broadcast television as their only source of video programming or their living room television set as the only platform from which to access it. The means to acquire content are expanding and for broadcasters to remain relevant and competitive it may be necessary to release the industry from its protective regulatory cocoon and insist that it innovate to insure its future success. FCC Reform and the Move from Broadcast to Broadband With the digital transition in broadcast television complete the FCC is shifting its focus to reforming itself and developing a national broadband policy. Broadcasters should be concerned this change in emphasis may indicate a permanent shift in the

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196 audience the future points to an Internet driven distribution model that services various devices over multiple platforms. According to FCC Chairman Julius Genachowski, the Commission seeks to insure broadband connections. 117 In addition to the obvious business opportunities, the Internet also for speech and democratic engagement. 118 Protecting the latter from the former is a paramount concern for the Commission as it looks ahead to formulating a comprehensive national broadband policy. The FCC identified four principles from which to develop operators cannot prevent users from accessing the lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching non-harmful 119 Genachowski proposed two additional principles, nondiscrimination of applications and content by broadband providers and transparency by broadband providers regarding their network management practices. 120 In dom of 121 117 Institution: Preserving a Free and Open Internet: A Platform for Innovation, Opportunity, and Prosperity (Sept. 21, 2009) available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-293568A1.pdf,%20Acrobat%20Format 118 Id. at 45. 119 Id. 120 Id. 121 Id. at 7.

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197 The issue of net neutrality, while being championed by the FCC, is a point of contention for broadband providers, like CATV operators, that seek more content control over their broadband networks. The National Cable & Telecommunications Association (NCTA) wishes to keep the government out of the network management business. The NCTA argues government intervention in network management will slow broadband innovation. 122 Instead, the NCTA wants Congress to leave broadband providers with the power to manage their individual networks as they see fit. 123 While broadcasters are positioned to utilize the Internet to distribute content, the CATV industry is a major player in its development, implementation and management. CATV is in a similar position to broadcasters during the transition from radio to television. The industry enjoys a significant stake in the distribution of video content to television viewers, while also being situated to prosper in the broadband sector as well. However, unlike the transition to from radio to television, CATV will face competition from telephone and wireless providers that broadcasters did not. Advancing the broadcast-centric regulatory framework of the past eighty-years at the expense of taking full advantage of the potential the Internet is something the FCC seems determined to avoid under the chairmanship of Julius Genachowski. In addition, the Commission appears to recognize it must also look within and reform itself to meet the challenges of providing oversight to a technology based communications industry. 122 The Future of the Internet: Testimony Before the Committee on Commerce, Science and Transportation, 110 th Cong. 3 (Apr. 22, 2008) (testimony of Kyle McSlarrow, President and CEO National Cable & Telecommunications Association) available at http://www.ncta.com/DocumentBinary.aspx?id=730 123 Id. at 11.

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198 The regulatory foundation for broadcasting was built in the 1920s to oversee an industry created in large part by the government itself. The for this largely passive platform broadcast/cable relationship. However, a new culture of change is taking root at the FCC and moving forward priorities are changing and so will the way the Commission responds to them. Chairman Genachowski envisions a reformed Commission that is retooled to encourage and facilitate participation by all stakeholders and engages in decision 124 The Court in Turner II and the FCC under Chairman Martin regarding CATV and the 70/70 rules could have been more diligent in this area. Future Research This dissertation summarized the regulatory and judicial history of broadcasting and CATV with a focus on must-carry, the digital transition and new technology. These issues stemmed from a long standing pro-broadcast agenda advanced by Congress and the FCC. Limitations of this study include the difficulty in projecting the findings of this study into the future and predicting how technology will evolve, how such evolution will change the way the public accesses and distributes content and what the legislative, regulatory and judicial response to these changes will be The need to create and advance a more inclusive multiplatform approach to telecommunications regulation 124 Oversight of the Federal Communications Commission, Hearing Before the Subcomm. On Communications, Technology, and the Internet of the H. Comm. On Energy and Commerce, 111 th Cong. (2009) (statement of Julius Genachowski, Chairman of the Federal Communications Commission).

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199 creates several areas for future research and raises additional research questions including: How does commercial broadcasting adapt and succeed should the programming networks opt for a nonbroadcast delivery option? How does the new role of the individual citizen as both media consumer and How does the participation of the individual in new media impact issues of privacy, access and control? What are the implications of current media ownership and cross-ownership restrictions on a technologically converging industry? What are the First Amendment implications of expanding broadcast style content regulations to CATV, DBS and the Internet? Internet access and phone service affect market competition within each individual service? Is it possible to adapt the broadcasting to meet the challenges of new communication technologies like the Internet and wireless? These questions can be answered using a variety of research methods. While this dissertation relied on legal research, future scholarship could utilize both quantitative and qualitative methods to expand Beyond law and regulation there are social and cultural elements of mass media development and usage worthy of further study. A historical analysis of economic data relevant to the financial health of commercial broadcast stations could be useful in determining the presence of actual economic harm to stations due to competition from cable. Such an analysis could also prove useful in examining the impact of ownership change on the financial health of a station This could include looking at financial records before and after the sale of a station from a single station owner to a group owner or holding company. Quantitative studies could utilize content analysis of relevant court decisions for examination. Qualitative methods

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200 might include focus groups to measure media consumer behavior to better understand media usage beyond traditional television ratings. Also, in -depth interviews of FCC officials, lawmakers and legal experts who participated in the regulatory and legislative process could be conducted to provide a better understanding of the historical development of broadcast and cable policy, particularly during the DTV transition This study identified several instances where Congress and the FCC followed probroadcast policies at the expense of the development of new technologies like CATV. In the future, without robust study and discussion of the issues raised above these mistakes can be repeated. Conclusion Once upon a time broadcast television delivered what everyone wanted to watch. Absent competition this victory by broadcasters was largely by default. The current viewers also pay a monthly subscription fee for the opportunity to watch. Congress and t industry largely absent of innovation, particularly during the transition to DTV. Commercial broadcasters seem more interested in maximizing retransmission consent revenue and holding out for an eventual, but so far unlikely, expansion of the must-carry to include multicast carriage. This strategy may provide short term revenue from CATV retransmission agreements to help offset the loss of network compensation, platforms like the Internet and wireless. The success of broadcast television in the future goes well beyond continuing to fi ght against cable. The industry requires a reigniting of the entrepreneurial spirit it

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201 radio can no longer be counted on to provide broadcasters with mass appeal programming indefinitely. Network programming is now available from network websites, online services like hulu and nonbroadcast channels like USA and TNT. 125 How does broadcasting respond to this challenge? The industry seems content to fade into irrelevance and without a seminal change in direction irrelevance it shall find. Requiring the CATV industry to preserve the viability of broadcasting through expanded must-carry and retransmission consent without requiring broadcasting itself to face an equal increasingly ineffective strategy. The delivery of video content extends beyond broadcasting, CATV and DBS and now includes platforms and devices that are multipurpose and difficult to classify using past regulatory structures. Must-carry for full power commercial broadcast signals is largely a moot issue. The vast majority of CATV systems have the excess capacity to continue to carry broadcast signals without having to deny carriage to nonbroadcast channels. Retransmission consent amounts to a success tax on the CATV industry for the benefit of popular broadcast stations. The vast majority of the audience broadcasters seek to reach subscribes to CATV. Must-carry gives broadcasters access to this audience and that should be enough. Unlike nonbroadcast channels CATV operators have no 125 See generally National Broadcasting Company, http://www.nbc.com/ (last visited Oct. 6, 2009); Fox Broadcasting http://www.fox.com/ (last visited Oct. 6, 2009); hulu http://www.hulu.com/ (last visited Oct. 6, 2009); USA Network http://www.usanetwork.com/ (last visited Oct. 6, 2009);Turner Network Television http://www.tnt.tv/ (last visited Oct. 6, 2009) (each website offers visitors the ability to watch full episodes of broadcast network programming. In addition, USA and TNT air recently broadcast episodes within weeks of their original broadcast airdate).

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203 elimination of cross-ownership restrictions and the development of equitable and fair indecency and content rules are just three areas Congress and the FCC can act to assist broadcasters in remaining competitive moving forward. If blame need be assigned for the failure of broadcast television to achieve the same effectiveness as radio as a national service the FCC, Congress and broadcasters themselves would head the list. Frequency allocation issues from the very beginning allowed UHF to flourish rather than protected incumbent VHF broadcasters created the chasm that CATV filled and did so with great success. However, the CATV industry has grown into a dominant position of power from its once small town underdog status and is not immune from criticism CATV enjoys a dominant position in the delivery of video content as well as broadband services. This accumulation of corporate and technological power requires government oversight. Network neutrality is just one example where the CATV industry is opposed to the policy direction the FCC has taken. Challenges to ownership limits and the potential for further media consolidation will create new challenges Congress and the FCC will need to face in a way that is timely and takes into consideration the increased reliance on Internet and wireless services the public is incorporating into daily life for information, entertainment and personal interaction. To begin to apply the implications of this research one needs to look no further than the pending purchase of NBC-Universal by Comcast Should this transaction take USA, Bravo and The Weather Channel to its portfolio, but the NBC television network

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204 and its ten ownedand-operated broadcast stations as well. This consolidation of distribution and content not only has implications for the viewing public, but competing media companies too. Providing oversight to a cable operator that would also own a television network and broadcast stations could provide the FCC with market challenges that create competitive imbalances that are difficult reverse Simultaneously the Commission is transitioning its focus from broadcasting to broadband. Trying to extend broadcast content regulation to the Internet has already failed judicial review. 126 This should push Congress and the FCC to instead focus on ensuring all Internet communication remains equal through net neutrality regulation. The Internet is positioned to not only continue its rapid growth as an important avenue of political speech, but its role as a pillar to future economic growth cannot b e such as Comcast and AT&T already enjoy a privileged position that largely protects them from the development of any new types of Internet content would raise serious First Amendment issues for individual citizens as well as Internet-based business interests. longstanding top-down regulatory structure in order to meet new challenges unique to new technologies. However, much of what has been learned over the last century of electronic media regulation can serve as an important guide to Congress and the 126 Court overturned all aspects of the Communications Decency Act (CDA) except the ban on obscene materials).

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205 Commission as they attempt to meet a future that extends beyond broadcasting and cable.

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206 LIST OF REFERENCES Primary Sources Cases Carroll Broadcasting Company v. FCC, 258 F.2d 440 (1958) Carter Mountain Transmission Corporation v. FCC, 321 F.2d 359 (1963) Century Communications Corp. v. FCC, 835 F.2d 292 304 (1987) Columbia Broadcasting System v. United States, 316 U.S. 407 (1942) FCC v. Midwest Video Corporation, 440 U.S. 689 (1979) Fortnightly Corporation v. United Artists Television, Inc., 392 U.S. 390 (1968) Home Box Office v. FCC, 567 F.2d 9 (1977) Hoover v. Intercity Radio Co., 283 App. D.C. 339 (1923) National Broadcasting Co. v. United States, 316 U.S. 447 (1942) National Broadcasting Co. v. United States, 319 U.S. 190 (1943) Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974) Quincy Cable TV, Inc. v. FCC, 248 U.S. App. D.C. 1 12 (1985) Red Lion v. Federal Communications Commission, 395 U.S. 367 (1969) Reno v. ACLU, 521 U.S. 844 (1997) Teleprompter Corporation v. Columbia Broadcasting System, 415 U.S. 394 (1974) Turner Broadcasting System v. FCC, 819 F. Supp. 32 (D.D.C. 1993) Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622 (1994) Turner Broadcasting System, Inc. v. FCC 520 U.S. 180 (1997) United States v. Southwestern Cable Co., 392 U.S. 157 (1968) United States v. Zenith Radio Corp., 12 F. 2d 614 (1926)

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207 Congressional Hearings and Reports the Senate Committee on Interstate and Foreign Commerce, 85 th Cong.,2 nd sess., December 26, 1958, Committee Print Federal Statutes Cable Communications Policy Act of 1984, Pub. L. 98-549, 98 Stat. 2779 (1984) Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102385, 106 Stat. 1460 (codified in various sections of 47 U.S.C.) (1992) Communications Act of 1934, 47 C.F.R. 151 (1934) Deficit Reduction Act of 2005, S. 1932, 109 th Cong. 3002 (2006) Digital Television and Public Saf Deficit Reduction Act of 2005, Pub. L. No. 109-171, 120 Stat. 4 (2006) DTV Delay Act, S. 352, 111th Cong. (2009) Radio Act of 1912, Pub. L. No. 62-264, 37 Stat. 302 (1912) Radio Act of 1927, Pub. L. No. 69-632, 44 Stat. 1162 (1927) Telecommunications Act of 1996, Pub. LA. No. 104-104, 110 Stat. 56 (1996) Wireless Ship Act of 1910, Pub. L. No. 61-262, 36 Stat. 629 (1910) FCC Administrative Documents Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service, Fifth Report and Order, 12 F.C.C.R. 12809 (1997) Annual Assessment of the Status of Competition in Markets for the Delivery of Video Programming, CS Docket No. 97-141, (rel. Jan. 13, 1998) Annual Assessment of the Status of Competition in the Market for the Delivery of Video Programming, Thirteenth Annual Report, MB Docket No. 06-189, 56, (rel. Jan. 16, 2009) Cable Television Report and Order, 36 F.C.C. 2d 141 (Feb. 2, 1972) Carriage of Digital Television Broadcast Signals: Amendments to Part 76 of the Reconsideration, CS Docket No. 98-120, 3 n.10 (rel. Feb. 23, 2005)

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208 Carriage of Digital Television Broadcast Signals: Amendments to Part 76 of the Rules, Petition for Reconsideration of the ABC Television Affiliates Association, CS Docket No. 98-120, at 24 (rel. Apr. 21, 2005) Carriage of Digital Television Broadcast Signals: Amendments to Part 76 of the ion of the National Association of Broadcasters and the Association for Maximum Service Television, Inc., CS Docket No. 98-120 (rel. Apr. 21, 2005) Commission Proposals for the Regulation of Cable Television, 31 F.C.C. 2d 115 (Aug. 5, 1971) FCC First Report and Order, 38 F.C.C. 683 (April 22, 1965) FCC Report and Order, FCC 85-179, (Apr. 11, 1985) FCC Report and Order, 1 FCC Rcd. 864 (Nov. 28, 1986) FCC Second Report and Order, 2 FCC 2d 725 (March 4, 1966) First Report and Order in MM Docket No. 87-268, 5 FCC Rcd 5627 (1990) Fourth Further Notice of Proposed Rule Making/Third Notice of Inquiry in MM Docket no. 87-268, 10 FCC Rcd 10541 (1995) In the Matter of Advanced Television Systems and Their Impact Upon the Existing Television Broadcast Service in Docket No. 87-268, 12 FCC Rcd 12809 (1997) Memorandum Opinion and Order on Reconsideration of the Sixth Report and Order, 13 FCC Rcd 7418 (1998) Notice of Inquiry and Proposed Rulemaking Re All CATV Systems, 1 FCC 2d 453 FCC Docket No. 15971 Notice of Inquiry in MM Docket No. 87 -268, 11 FCC Rcd 5125 (1987) Notice of Proposed Rule Making in MM Docket No. 87-268, 6 FCC Rcd 7024 (1991) Report on Chain Broadcasting Commission Order No. 37; Docket No. 5060 3444 (May, 1941) cies Affecting the Conversion to Digital Television, MM Docket No. 00-39 at 9 (Rel. Nov. 15, 2001) Second Further Notice of Proposed Rule Making in MM Docket No. 87-268, 7 FCC Rcd 5376 (1992) Second Report and Order/Further Notice of Proposed Rule Making in MM Docket No. 87-268, 7 FCC Rcd 3340 (1992)

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209 Television Assignments, Sixth Report and Order 41 F.C.C. 148 (Apr. 11, 1952) Tentative Decision and Further Notice of Inquiry in MM Docket No. 87-268, 3 FCC Rcd 6520 (1988) Third Periodic Review of the Commiss To Digital Television, Notice of Proposed Rulemaking, MB Docket NO. 07-91 at 8 (Rel. May 18, 2007) 2 FCC Rcd 5125 (1987) Secondary Sources Books G LEASON A RCHER B IG B USINESS AND R ADIO (1971) E RIK B ARNOUW A T OWER IN B ABEL : A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME 1 T O 1933 (1966) E RIK B ARNOUW T HE G OLDEN W EB: A HISTORY OF B ROADCASTING IN THE UNITED S TATES V OLUME II 19331953 ( 1968 ) E RIK B ARNOUW T HE I MAGE M AKERS : A H ISTORY OF B ROADCASTING IN THE U NITED S TATES V OLUME III F RO M 1953 (1970) L OUISE B ENJAMIN F REEDOM OF THE A IR AND THE P UBLIC I NTEREST : F IRST A MENDMENT R IGHTS IN B ROADCASTING TO 1935 (2001) M ARVIN R. B ENSMAN T HE B EGINNING OF B ROADCAST R EGULATION IN THE T WE NTIETH C ENTURY (2000) K ENNETH B ILBY T HE G ENERAL : D AVID S ARNOFF AND THE R ISE OF THE C OMMUNICATIONS I NDUSTRY (1986) JOSEPH N. D I S TEFANO C OMCASTED : HOW R ALPH AND B RIAN R OBERTS TOOK O VER A MERICA S TV, O NE D EAL AT A T IME (2005) E DWARD V. D OLAN TV OR CATV? A S TRUGGLE FOR P OWER (1984) K ERRY E. I RISH C LARENCE C. D ILL T HE L IFE OF A W ESTERN P OLITICIAN (2000) E RWIN G. K RASNOW & L AWRENCE D. L ONGLEY T HE P OLITICS OF B ROADCAST R EGULATION ( 1982) D ON R. L E D UC B EYOND B ROADCASTING : P AT TERNS IN P OLICY AND L AW (1987) D ON R. L E D UC C ABLE T ELEVISION AND THE FCC ( 1973)

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210 R OBERT B RITT HOROWITZ T HE I RONY OF R EGULATORY R EFORM : T HE D EREGULATION OF A MERICAN T ELECOMMUNICATIONS 166-168 (Oxford University Press 1989) B RIAN L OCKMAN & D ON S ARVEY P IONEERS OF C ABLE T ELEVISION (2005) R OBERT W. M C C HESNEY R ICH M EDIA P OOR D EMOCRACY : C OMMUNICATION P OLITICS IN D UBIOUS T IMES ( 2000) M EGAN M ULLEN T HE R ISE OF C ABLE T ELEVISION ( 2003) P HILIP M. N APOLI F OUNDATIONS OF C OMMUNICATION P OLICY : P RINCIPLES AND PROCESS IN THE R EGULATION OF E LECTRONIC M EDIA (2001) P ATRICK P ARSONS B LUE S KIES : A H ISTORY OF C ABLE T ELEVISION (2008) P ATRICK P ARSONS C ABLE T ELEVISION AND THE F IRST A MENDMENT (1987) A LAN P EARCE T HE E CONOMIC AND P OLITICAL S TRENGTH OF THE T ELEVISION N ETWORKS IN N ETWORK T ELEVISION AND THE P UBLIC I NTEREST (Michael Botein & David M. Rice eds.,1980) L UCAS A. P OWE A MERICAN B ROADCASTING AND THE F IRST A MENDMENT (1987) S TERLING Q UINLAN I NSIDE ABC: A MERICAN B ROADCASTING C OMPANY S RISE TO P OWER (1979) M ARK R OBICHAUX C ABLE C OWBOY : JOHN M ALONE AND THE R ISE OF THE M ODERN C ABLE B USINESS ( 2002) JOSEPH R USSOMANNO S PEAKING O UR M INDS : C ONVERSATIONS W ITH THE P EOPLE B EHIND L ANDMAR K F IRST A MENDMENT C ASES (2002) D AVID S ARNOFF L OOKING A HEAD : T HE P APERS OF D AVID S ARNOFF (Dr. Jerome B. Wiesner ed. 1968) P ETER B. S EEL & M ICHEL D UPAGNE D IGITAL T ELEVISION IN C OMMUNICATION T ECHNOLOGY U PDATE (August E. Grant & Jennifer H. Meadows eds ., 2004) S TEVEN J. S IMMONS T HE F AIRNESS D OCTRINE AND THE M EDIA (1978) S LOAN C OMMISSION ON C ABLE C OMMUNICATIONS O N THE C ABLE : T HE T ELEVISION OF A BUNDANCE (1971) P AUL S TARR T HE C REATION OF THE M EDIA (2004) C HRISTOPHER H. S TERLING & JOHN M ICHAEL K ITTROSS S TAY T UNED : A H ISTORY OF A MERICAN B ROADCASTING (3 rd ed. 2002) R OBERT S OBEL RCA (1986)

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211 C HARLES H. T ILLINGHAST A MERICAN B ROADCAST REGULATION AND THE F IRST A MENDMENT : A NOTHER L OOK (2000) Journal and Magazine Articles Nicholas W. Allard, Must Carry and the Courts: Bleak House, The Sequel, 13 Cardoza Arts & Ent., L.J. 139 (1994) Harris Aaron, I Want My MTV: The Debate over Digital Must-Carry 80 B.U.L. Rev, 8985 (2000) C. Edwin Baker, Media Concentration: Giving Up on Democracy 54 Fla. L. Rev. 839 (2002) Jerome A. Barron, The Electronic Media and the Flight From First Amendment Doctrine: 31 U. Mich. J.L.Ref. 817 (1998) Louise Benjamin, Working It Out Together: Radio Policy from Hoover to the Radio Act of 1927 Journal of Broadcasting & Electronic Media, Spring 1998 Justin Brown, Digital Must-Carry & the Case for Public Television 15 Cornell J.L. & Andrew D. Cotlar, The Road Not Yet Traveled: Why the FCC Should Issue Digital Must57 Fed. Comm. L. J. 49 (2004) Michael M. Epstein, Primary Video and its Secondary Effects on Digital Broadcasting: Cable Carriage of Multiplexed Signals Under the 1992 Cable Act and the First Amendment, 87 Marq. L. Rev. 525 (2004) Mike Farrell, -For-Consent Push Pays off in 2007, With More Gaines Forecast Multichannel News, Feb. 18, 2008 Ro b Frieden, Analog and Digital Must Carry Obligations of Cable and Satellite Television Operators in the United States Toni Elizabeth Gilbert, Economic Regulation of the Cable Television Industry: Reigning in a Giant at the Expense of the First Amendment 45 Cath. U. L. Rev. 615 (1996) Donald G. Godrey, Senator Dill and the 1927 Radio Act, 23 Journal of Broadcasting 477 (1979) Daniel Patrick Graham, Public Interest Regulation in the Digital Age, 1 CommLaw Conspectus 97 (2003) Thomas W. Hazlett, 8 Sup. Ct. Econ. Rev. 141 (2000)

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212 Ted Hearn, Lawmakers Troubled by Cable, LIN TV Spat: Claim Dispute Could be Confusing Consumers Ahead of DTV Transition Multichannel News, Oct. 22, 2008 C. M. Jansky, Jr., The Contribution of Herbert Hoover to Broadcasting 1 J. of Broad. 241 (1956-1957) Harry A. Jessell, NCTA Declares War Over Retrans TV Newsday, Sept. 19, 2008 Erwin G. Krasnow & Jack N. Goodman, he Search for the Holy Grail, 50 F ED C OMM L.J. 605 (1998) Nissa Laughner & Justin Brown, Digital Must-Carry 58 Fed Comm. L.J. 281 (2006) Gary S. Lutzker, The 1992 Cable Act and the First Amendment: What Must, Must Not, and May Be Carried 12 Cardoza Arts & Ent., L.J. 467, (1994) Robert Marich, Broadcasting & Cable, July 7, 2008 Michael W. Maseth, The Erosion of First Amendment Protections of Speech and Press: t, 24 Cap. U. L. Rev. 423 (1995) Metzenbaum Vows to Tighten Reins on Cable B ROADCASTING & C ABLE Jan. 23, 1989 Michael I. Meyerson, The Cable Communications Policy Act of 1984: A Balancing Act of the Coaxial Wires 19 Ga. L. Rev. 543 (1985) Philip M. Napoli, The Localism Principle in Communications Policymaking and Policy Analysis: Ambiguity, Inconsistency, and Empirical Neglect Policy Studies Journal, September 22, 2001 Steven Phipps, ination of the Historical Basis for the Scarcity of Channels Concept 45 J. of Broad. & Electronic Media 57 (2001) Report of Department of Commerce on Radio Telephony R ADIO S ERVICE B ULLETIN May 1, 1922 Helen Shaffer, Community Antenna TV E DITORIAL R ESEARCH R EPORTS Dec. 16, 1964 Cass R. Sunstein, Television and the Public Interest, Calif. L. Rev. 499 (2000) Joel Timmer, Broadcast, Cable and Digital Must Carry: The Other Digital Divide 9 R. Matthew Warner, Reassessing Turner and Litigating the Must-Carry Law Beyond a Facial Challenge 60 Fed. Comm. L.J. 359 (2008)

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213 Lawrence H. Winer, Red Lion of Cable, and Beyond? Turner Broadcasting v. FCC 15 Cardoza Arts & Ent., 1 (1994) Christopher S. Yoo, The Rise and Demise of the Technology Specific Approach to the First Amendment 91 Geo. L.J. 245 (2003) Newspaper Articles Cable TV Prices Rise, But Viewers Get More T ULSA W ORLD Aug. 4, 1989 Mary Lu Carnevale, Danforth Proposes Bill to Re-Regulate Cable-TV Rates W ALL S T J., Nov. 16, 19 89 Congress Expected to Pass New Bill Regulating Radio N.Y. T IMES Dec. 6, 1925 Coolidge Favors Federal Control of Air for Radio N.Y. T IMES Oct. 8, 1924 Coolidge Opposes More Commissions N.Y. T IMES Apr. 28, 1926 For Control of Radio: Representative Seller Says He Will Urge Regulation of Broadcasting N.Y. T IMES Sep. 5, 1924 Lisa M. Hamm, Cable Defends Cost Rise, T HE RECORD Aug. 4, 1989 Hoover Opposes U.S. Full Radio Control W ASH P OST Dec. 7, 1924 Hoover Wants New Check on Radio Stations CHRISTIAN S CIENCE M ONITOR Sep. 16, 1925 Laura Landro, Airing Grievances: As Cable-TV Industry Keeps Growing, Rivals Demand Reregulation Broadcasters and Others Call the Competition Unfair W ALL S T J, Sept 17, 1987 No Danger of a Radio Monopoly W ALL S T J., Mar. 26, 1924 Nicholas J.C. Pistor, St. Louis Television Station and Charter at Impasse St. Louis Post-Dispatch, Dec. 21, 2008 Radio Control Bill Action Forecast by Senator Dill C HRISTIAN S CIENCE M ONITOR May 8, 1926 ers, W ALL S T J., Feb. 28, 1922 Edmund Sanders, TV Firms Split Over Multicasting, L.A. T IMES Dec. 14. 2003 Secretary Hoover Broadcasts His Views on Radio Situation N.Y. T IMES Apr. 13, 1924 Television Now Reality; Device Demonstrated T HE T ROY R ECORD Apr. 8, 1927

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214 Websites http://www.fcc.gov/cgb/consumerfacts/childtv.html FCC Consumer Facts: Digital Television, http://www.fcc.gov/cgb/consumerfacts/digitaltv.html (last modified Feb. 8, 2009) FCC Consumer Facts, Obscene, Indecent, and Profane Broadcasts, http://www.fcc.gov/cgb/consumerfacts/obscene.html http://www.fcc.gov/mb/audio/decdoc/engrser.html History of Cable Television, http://www.ncta.com/About/About/HistoryofCableTelevision.aspx?source=Resourc es The National Association of Broadcasters, http://www.nab.org National Cable & Telecommunications Association, http://www/ncta.com Gayle Noyes, American Broadcasting Company The Museum of Broadcast Communications, http://www.museum.tv/archives/etv/A/htmlA/americanbroa/americanbroa.htm Proceedings of the Fourth National Radio conference and Recommendations for Regulation of Radio, November 9-11, 1925 at 8 available at http://earlyradiohistory.us/1925conf.htm (last visited November 21, 2008). Recommendations for Regulation of Radio Adopted by the Third National Radio Conference, October 6-10, 1924 at 2 available at http://earlyradiohistory.us/1924conf.htm (last visited November 21, 2008). United States Early Radio History, http://earlyradiohistory.us/sec023.htm