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Louisiana State Univ.

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Thursday, November 29, 2007

FCC Denies Cablevision's Application For Review; Grants Licensee WRNN Must Carry Request

Released today:

In a 3-2 vote, the FCC denied Cablevision's application for review in WRNN License Company, LLC (Memorandum Opinion and Order, 21 FCC Rcd 5952 (MB 2006)). It also ordered Cablevision to begin carrying licensee WRNN "within 60 days from the date on which WRNN provides the necessary specialized equipment to receive a good quality signal at Cablevision's principal headend."

Said the FCC, "In the WRNN-DT Modification Order, the Bureau applied the four factors set forth in Section 614(h)(1)(C) and concluded that all of the communities in Nassau County and certain communities in Suffolk County should be considered part of WRNN-DT’s local market. Cablevision’s application seeks review of the WRNN-DT Modification Order on the grounds that the Order is based on erroneous findings as to material questions of fact, does not consider Cablevision’s constitutional arguments, and conflicts with the Act and Commission precedent. Cablevision contends that the Bureau erred in its application of each statutory factor, and gave overwhelming weight to WRNN-DT’s signal coverage. WRNN opposed the application, arguing that the Bureau applied the four statutory factors properly and followed applicable Commission precedent.... Section 614(h)(1)(C) of the Act requires the Commission to include or exclude particular communities from a television station’s market to ensure that a television station is carried in the areas it serves and in its economic market.  We have reviewed the record in this proceeding, which need not be restated in detail, and we find that the Bureau correctly modified WRNN-DT’s market. "

With regard to WRNN's must carry request, the FCC said, "Turning to the specifics of Cablevision’s contentions, we first address Cablevision’s argument that mandatory carriage of WRNN-DT constitutes an as-applied First Amendment violation.  To the contrary, we find that Supreme Court precedent supports carriage of WRNN-DT’s signal.  In the context here – concerning a challenge to a content-neutral regulation – the intermediate scrutiny standard applies. Under that framework, the Supreme Court has sustained Section 614 of the Act’s mandatory carriage requirements against facial challenge, finding that the obligations further three important governmental interests unrelated to the suppression of free expression and that the statutorily imposed burden is no greater than necessary to further those interests. Even assuming a party may mount an as-applied First Amendment challenge to the carriage of an individual station in the face of this Supreme Court precedent, we find, applying that precedent to the facts at issue in this case, that Cablevision’s carriage of WRNN-DT furthers at least two of the three interests identified by the Court.  In particular, we find that carriage will help to ensure that the digital-only station (1) remains a viable option for viewers who rely on free, over-the-air television service in Nassau and Suffolk counties, and (2) continues to number among the multiplicity of information sources available to viewers in those counties. Moreover, compelled carriage of WRNN-DT does not burden substantially more speech than necessary because the obligation is no more extensive than is necessary to further the government interests identified above and is not more extensive than that occasioned by Cablevision's carriage of any other television broadcast station pursuant to section 614.... Second, we do not find that Cablevision has demonstrated that mandatory carriage of WRNN-DT would constitute a Fifth Amendment taking under either the “per se” or “regulatory” takings analyses. To qualify as a per se taking, the challenged government action must authorize a permanent physical occupation of property or result in the loss of all economically viable use of property. Per se takings are defined without regard to the public interest they may serve, the size of the occupation, or the economic impact on the property owner.  Contrary to Cablevision’s argument, we do not believe that a per se takings analysis applies here. The Supreme Court has advised that a per se taking is “relatively rare and easily identified,”and this is neither.  Mandatory carriage regulation effectuates no permanent physical occupation of a cable operator’s property, such as installation of the physical equipment at issue in Loretto v. Teleprompter Manhattan CATV Corp. Rather, a programming stream is transmitted in bits of data over cable bandwidth through electrons or photons at the speed of light while the cable operator retains complete control over its physical property (e.g., headend equipment).  Moreover, because carriage of a single station represents only a small fraction of available bandwidth, Cablevision has not shown a loss of all economically viable use of its property. Courts have rejected application of permanent physical occupation to the technological realm, and we believe these decisions to be consistent with the Supreme Court’s admonition that a permanent physical occupation of property is easily identifiable and “presents relatively few problems of proof.”

"As for its alternative takings claim, Cablevision presents virtually no substantive argument that requiring carriage of WRNN-DT would constitute a regulatory taking. A regulatory taking analysis is conducted under the multi-factor inquiry set forth in Penn Central Transportation Co. v. City of New York: (1) the character of the governmental action; (2) its economic impact; and (3) its interference with reasonable investment-backed expectations. Cablevision, however, addresses none of these factors.  Furthermore, in employing this test, we find no evidence in the record that requiring carriage of WRNN‑DT will have a significant economic impact on Cablevision or will interfere with the company’s reasonable, investment-backed expectations.  Indeed, based upon the statutory cap for commercial stations and the numerical limit for non-commercial stations, cable operators should reasonably expect to devote up to one-third of their capacity to carriage of local broadcast stations. Finally, we believe the governmental action at issue to be a modest attempt to “adjust the benefits and burdens of economic life to promote the common good,” in what traditionally has been and remains a regulated industry. Therefore, we reject Cablevision’s constitutional arguments, and for the above reasons deny Cablevision’s petition." [Footnotes omitted].

Read the entire Memorandum and Order here. 

Here's a link to the dissent of Commissioners Adelstein and Copps.

http://lawprofessors.typepad.com/media_law_prof_blog/2007/11/fcc-denies-cabl.html

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