Federal appeals panel rejects Time Warner’s challenge to 1992 cable-TV law

Monday, May 22, 2000

Two provisions of a 1992 federal law that restricts how cable companies operate do not violate the First Amendment, a federal appeals court panel has ruled.

Time Warner Entertainment Co. challenged two provisions of the Cable Television Consumer Protection and Competition Act of 1992, which Congress said would promote diversity and competition in cable television. The provisions challenged by Time Warner are the so-called subscriber-limits provision and the channel-occupancy provision.

The subscriber-limits provision directs the Federal Communications Commission to limit the number of subscribers that a cable operator may reach. The channel-occupancy provision directs the FCC to limit the number of channels that may be devoted to programming in which the operator has a financial interest.

Congress argued these provisions were necessary to prevent too much concentration of the market and to encourage a diversity of viewpoints over the cable medium. Time Warner, on the other hand, countered that the provisions were unconstitutional, content-based restrictions on its speech.

In 1993, a federal judge ruled the subscriber-limits provision constitutional and the channel-occupancy provision unconstitutional.

On appeal, a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia unanimously ruled that both measures were constitutional in Time Warner Entertainment Co. v. U.S.

“By placing a value upon diversity and competition in cable programming the Congress did not necessarily also value one speaker, or one type of speech, over another; it merely expressed its intention that there continue to be multiple speakers,” the panel wrote in its May 19 opinion.

Time Warner cited a 1992 Senate Conference Report, which said that Congress was concerned that “media gatekeepers will slant information according to their own biases or provide no outlet for unorthodox or unpopular speech because it does not sell well.”

However, the appeals panel said that Congress’ “concern was not with what a cable operator might say, but that it might not let others say anything at all in the principal medium for reaching much of the public.”

The appeals panel also examined the channel-occupancy provision. Time Warner argued that this provision was akin to “a law prohibiting newspapers from devoting more than a fraction of their columns to editorial content of their own.”

In pushing the newspaper analogy even further, Time Warner cited the U.S. Supreme Court’s 1974 decision in Miami Herald Publishing Co. v. Tornillo as evidence that cable operators have a constitutional right to favor their own speech. In Tornillo, the U.S. Supreme Court invalidated a state law requiring newspapers to give free reply space to political candidates the newspapers criticize. The court ruled that the right of newspaper editors to choose what they wish to print or not to print cannot be infringed to allow public access to the print media.

However, the appeals panel found a flaw in Time Warner’s newspaper analogy. “A cable operator is unlike a newspaper publisher … in the one respect crucial to the Congress’s reason for enacting the channel occupancy provision: A newspaper publisher does not have the ability to exclude competing publications from its subscribers’ homes,” the panel wrote.

According to the panel, “the legislative concern was not with the speech of a particular source but solely with promoting diversity and competition in the cable industry.”

Robert Joffe, attorney for Time Warner, declined comment on the ruling and said that no decision had yet been made on whether to appeal.

Calls to the Department of Justice were not returned.