C-Span v. Federal Communications Commission , 545 F.3d 1051 ( 2008 )

Notice: This opinion is subject to formal revision before publication in the
Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify the
Clerk of any formal errors in order that corrections may be made before the
bound volumes go to press.
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 15, 2008 Decided October 31, 2008
No. 08-1045
C-SPAN, ET AL.,
PETITIONERS
v.
FEDERAL COMMUNICATIONS COMMISSION
AND UNITED STATES OF AMERICA,
RESPONDENTS
ASSOCIATION FOR MAXIMUM SERVICE TELEVISION, INC.
AND NATIONAL ASSOCIATION OF BROADCASTERS,
INTERVENORS
On Petition for Review of an Order
of the Federal Communications Commission
Bruce D. Sokler argued the cause for petitioners. With him
on the briefs was Robert G. Kidwell.
Burt A. Braverman was on the brief for amici curiae Africa
Channel, et al. in support of petitioner.
2
Joseph R. Palmore, Deputy General Counsel, Federal
Communications Commission, argued the cause for respondents.
With him on the brief were Thomas O. Barnett, Assistant
Attorney General, U.S. Department of Justice, Catherine G.
O'Sullivan and Nancy C. Garrison, Attorneys, Matthew B.
Berry, General Counsel, Federal Communications Commission,
Daniel M. Armstrong, Associate General Counsel, and Joel
Marcus, Counsel. C. Grey Pash Jr., Counsel, entered an
appearance.
Jack N. Goodman argued the cause for intervenors
Association for Maximum Service Television, Inc., et al. in
support of respondent. With him on the brief were John A.
Rogovin, Jane E. Mago, Jerianne Timmerman, and David L.
Donovan. Dileep S. Srihari entered an appearance.
Before: ROGERS, TATEL and KAVANAUGH, Circuit Judges.
Opinion for the Court by Circuit Judge ROGERS.
ROGERS, Circuit Judge: In connection with the
congressionally mandated switch from analog to digital
broadcast television transmission on February 19, 2009, the
Federal Communications Commission promulgated regulations
requiring cable systems with analog-only subscribers either to
transmit, for three years after the date of transition, both analog
and digital signals of must-carry broadcast channels, or to switch
to an all-digital system. Carriage of Digital Television
Broadcast Signals, Third Report and Order, 22 F.C.C.R. 21064
(2007) (“Viewability Order”). Various cable programmers
challenge the regulations on statutory and constitutional
grounds. Because petitioners have not met their heavy burden
as non-regulated parties to show that they have Article III
standing, we must dismiss the petition.
3
I.
Under the Communications Act, cable operators with
twelve or more channels are required to devote up to one third
of their “usable activated channels” to “the signals of local
commercial [broadcast] television stations.” 47 U.S.C. §
534(b)(1)(B). The Act further provides that:
Signals carried in fulfillment of the requirements of
this section shall be provided to every subscriber of a
cable system. Such signals shall be viewable via cable
on all television receivers of a subscriber which are
connected to a cable system by a cable operator or for
which a cable operator provides a connection. If a
cable operator authorizes subscribers to install
additional receiver connections, but does not provide
the subscriber with such connections, or with the
equipment and materials for such connections, the
operator shall . . . offer to sell or lease . . . a converter
box to such subscribers at [regulated] rates.
Id. § 534(b)(7) (emphasis added). With regard to non-
commercial broadcast stations, the Act mandates that “each
cable operator of a cable system shall carry the signals of
qualified noncommercial educational television stations,” id. §
535(a), and that such signals “shall be available to every
subscriber as part of the . . . lowest priced service tier that
includes the retransmission of local commercial television
broadcast signals,” id. § 535(h). The commercial and non-
commercial transmissions that cable systems are required to
transmit are “must-carry” broadcast signals. The
constitutionality of the Act was upheld in Turner Broadcasting
System, Inc. v. FCC, 520 U.S. 180 (1997) (“Turner II”), and is
not at issue here.
4
Under the Digital Television Transition and Public Safety
Act of 2005,1 full power television stations, a category that
includes certain local commercial and noncommercial stations,
are required to switch their broadcast transmissions from analog
to digital format by February 18, 2009. The requirement that
broadcast television stations switch to all-digital signals does
not, however, extend to cable systems. These are generally free
to choose their own mix of analog and digital technology.
However, pursuant to 47 U.S.C. §§ 534(b)(4)(A), 535(g)(2),
which prohibit “material degradation” of the signals of must-
carry stations, the Commission has required cable operators to
transmit in high-definition (“HD”)2 any signals delivered to
them in HD by must-carry stations. Carriage of Digital
Television Broadcast Signals, First Report and Order, 16
F.C.C.R. 2598, 2629-31 (2001). As millions of cable customers
lack the equipment required to view digital cable transmissions,
these analog cable consumers would be unable to view local
broadcast stations transmitted in digital format only.
On May 4, 2007, responding to the prospect that some local
broadcast stations might not be available to analog cable
subscribers, the Commission issued a Notice of Proposed
Rulemaking (“NPRM”) “seek[ing] comment on the post-
transition obligations of cable operators.” Carriage of Digital
Television Broadcast Signals, NPRM, 22 F.C.C.R. 8803, 8803.
After receiving comments, the Commission, on November 30,
2007, issued the Viewability Order in which the Commission
adopted rules establishing a “viewability mandate,” requiring
1
See Deficit Reduction Act of 2005, Title III, Pub. L. No.
109-171, 120 Stat. 4, 21 (2006) (codified at 47 U.S.C. § 309 (2006)).
2
The Commission divides digital displays into two groups
based on resolution quality and aspect ratio: HD and Standard-
Definition (“SD”).
5
that “to the extent that [cable] subscribers do not have the
capability of viewing digital signals, cable systems must carry
the signals of commercial and non-commercial must-carry
stations in analog format to those subscribers, after
downconverting the signals from their original digital format.”
Viewability Order, 22 F.C.C.R. at 21071. Under separate
regulations promulgated in 2001 regarding material degradation,
47 U.S.C. §§ 534(b)(4)(A), 535(g)(2), where a must-carry
broadcaster delivers its signal to a cable operator in HD digital
format (as opposed to SD), the cable operator is required to
transmit the must-carry station in HD.3 Thus, the combined
effect of the material degradation regulations and the Viewability
Order is that cable systems with analog and digital subscribers
(“hybrid systems”) are effectively required to allocate two
channels to each must-carry HD broadcaster. Alternatively,
cable systems are permitted to become all-digital, with all
subscribers able to view digital signals; under this option, only
digital must-carry signals need be broadcast. The Commission
specified that “any downconversion costs will be borne by the
[cable] operator,” 22 F.C.C.R. at 21072, and further provided
that the viewability mandate would apply for an initial three-
year period following the February 2009 digital transition date.
The Commission, as relevant, found that “any incremental
increase of bandwidth devoted to must-carry stations [would] be
negligible,” 22 F.C.C.R. at 21076 (internal quotations omitted),
and that any concerns of individual cable channels about being
crowded out of cable systems were outweighed by
Congressional concern for broadcast channels. It further noted
3
Carriage of Digital Television Broadcast Signals, First
Report and Order and Further Notice of Proposed Rulemaking, 16
F.C.C.R. 2598 ¶ 73 (2001). See also Carriage of Digital Television
Broadcast Signals, Fourth Report and Order, FCC 08-193, 2008 WL
4092895 (Sept. 4, 2008), discussed infra.
6
that insofar as its requirements spurred a move to all-digital
cable systems, total channel capacity might actually be
increased. In concluding that the viewability provisions
survived intermediate First Amendment scrutiny, the
Commission noted that the all-digital option for cable systems
was “significantly less burdensome than the analog must-carry
mandate upheld by the Supreme Court in [Turner II] because
digital signals occupy much less bandwidth on a cable system
than do analog signals.” Id. at 21085. Finally, the Commission
underscored that its viewability provisions were “in line with the
approach already voluntarily planned by many cable operators.”
Id. at 21071.
II.
The cable operators themselves have not challenged the
Viewability Order. Instead, petitioners are cable programmers
who fear that access to cable operators’ systems will become
more difficult because of the viewability mandate. They
contend that the requirements of the Viewability Order are
contrary to the plain meaning of the Communications Act, are
arbitrary and capricious, and violate their First Amendment
rights. While the court would consider the familiar standard set
out in Chevron U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837 (1984),
in reviewing an agency’s interpretation of a statute that it is
required to implement, and review de novo a challenge to the
constitutionality of the regulations, Jifry v. FAA, 370 F.3d 1174,
1182 (D.C. Cir. 2004), the Commission has raised a threshold
challenge to petitioners’ standing under Article III of the
Constitution.
Article III standing is reviewed under the standard
established by Lujan v. Defenders of Wildlife, 504 U.S. 555(1992), and contains three elements. In order to establish
standing, a party must have suffered an injury-in-fact, by
7
showing “an invasion of a legally protected interest which is (a)
concrete and particularized and (b) actual or imminent, not
conjectural or hypothetical.” Id. at 560 (internal quotations and
citations omitted). In addition, “the injury has to be fairly
traceable to the challenged action of the defendant, and not the
result of the independent action of some third party not before
the court.” Id. (internal quotations and alterations omitted).
Finally, it “must be likely, as opposed to merely speculative, that
the injury will be redressed by a favorable decision.” Id. at 561(internal quotations omitted). “[W]hen the [petitioner] is not
[itself] the object of the government action or inaction
[petitioner] challenges, standing is not precluded, but it is
ordinarily substantially more difficult to establish.” Id. at 562(internal quotations omitted). In this latter situation “it becomes
the burden of the [petitioner] to adduce facts showing that . . .
choices [by parties directly affected by a regulation] have been
or will be made in such manner as to produce causation and
permit redressability of injury.” Id.Petitioners’ theory of standing is that by requiring increases
in the percentage of bandwidth devoted by hybrid cable systems
to must-carry channels, the Viewability Order ensures that
hybrid cable systems will have less bandwidth to devote to other
uses, including cable programming. This increases the
competitive pressure faced by cable programmers as they
attempt to sell their wares to cable systems, which have less
bandwidth to fill and can thus afford to drive harder bargains
with potential suppliers. In addition to immediate economic
injuries, they offer that the Viewability Order interferes with
their speech by removing further channel capacity from market
competition. While numerous factors affect cable systems’
decisions about bandwidth allocation, available space is an
absolute constraint. In the face of this limitation, purveyors of
cable content will face greater competitive pressures, and even
if the amount of content they provide does not change, the terms
8
on which they provide the content have the concrete possibility
of becoming worse. By definition, ending the directed
allocation of a portion of cable systems’ bandwidth will alleviate
this competitive impediment. While the cable industry itself
may well have made promises concerning carriage of broadcast
channels, petitioners contend, in effect, that removing
government compulsion from the equation opens up the
possibility that a particularly compelling cable content offering
for the “last slice of bandwidth” could convince individual cable
systems to abandon dual carriage of at least some broadcast
networks.
Petitioners rely on two court cases in support of their theory
of standing. In Turner Broadcasting System, Inc. v. FCC, 512
U.S. 622, 637 (1994) (“Turner I”), the Supreme Court, in
discussing mandatory carriage requirements generally, held that
these requirements regulate cable speech by “render[ing] it more
difficult for cable programmers to compete for carriage on the
limited channels remaining” after implementation of must-carry
requirements. See also id. at 645. In Quincy Cable TV, Inc. v.
FCC (“Quincy Cable”), 768 F.2d 1434, 1445 n.24 (D.C. Cir.
1985), this court expressly held that cable programmers had
standing to challenge the Commission’s must-carry rules.
However neither Turner I nor Quincy Cable stand for the
proposition that cable programmers will always have standing
to challenge must-carry rules, as petitioners appear to suggest.
In Quincy Cable, the primary basis for this court’s conclusion of
standing was a statement by cable systems that the must-carry
rules at issue would preclude carriage of at least one cable
programming petitioner that otherwise would have been
carried.4 768 F.2d at 1445 n.24. The opposite type of
4
Quincy Cable also suggested that “a plaintiff who has been
entirely deprived of any opportunity to compete has standing to
challenge the constitutionality of that deprivation.” 768 F.2d at 1445
9
statements exist in the present record, for cable operators have
publically stated through their association that they will, in any
event, voluntarily do what the Viewability Order requires.5 And
unlike in Quincy Cable, there is no indication in the record that
any cable operator that otherwise would have carried one of
petitioners’ cable programs will not do so because of the
Viewability Order. In Turner I, the Supreme Court noted that
the must-carry statute burdened cable programmers’ speech “by
reducing the number of channels for which they can compete,”
512 U.S. at 645, but did not conduct an analysis of
programmers’ standing.
Petitioners’ claim of standing, based on the assertion that
the Viewability Order necessarily means that they will suffer a
n.24 (citing Regents of Univ. of. California v. Bakke, 438 U.S. 265,
280-82 n.14 (1978)). Petitioners do not allege that they have been
“entirely deprived” of “any” opportunity to compete, only that it is
“more difficult” for them to compete. Pet’rs’ Reply Br. at 4-5 (citing
Turner I, 512 U.S. at 636-37 and Turner II, 520 U.S. at 214).
5
See Ted Hearn, NCTA Keeping Three-Year Dual Carriage
Vow: Operators Will Keep Promise Even if Court Challenge to FCC
Succeeds, MULTI-CHANNEL NEWS, Feb. 5, 2008 (Resps.’ Br. Appx.);
statement of Kyle McSlarrow, NCTA President and CEO, The Status
of the DTV Transition: 370 Days and Counting to the Subcomm. on
Telecomms. and the Internet of the H. Comm. on Energy and
Commerce, 110th Cong. 2-3 (2008), available at
http://energycommerce.house.gov/cmte_mtgs/110-ti-hrg.021308.M
cSlarrow-testimony.pdf; statement of Glen Britt, President and CEO
of Time Warner Cable, on The Status of the Digital Television
Transition, before the Subcomm. on Telecomms. and the Internet of
the H. Comm. on Energy and Commerce, 110th Cong. 5 (2007),
a v a i l a b l e a t
http://energycommerce.house.gov/cmte_mtgs/110-ti-hrg.032807.Br
itt-testimony.pdf . The NCTA represents cable operators serving more
than ninety percent of cable households.
10
First Amendment injury-in-fact as a result of less bandwidth
being available, falters. As petitioners’ asserted injury arises
from an allegedly unlawful regulation of others, under Lujan
they cannot meet their burden merely by virtue of their status as
programmers. Rather, the petitioners must “adduce facts
showing,” Lujan, 504 U.S. at 562, that the challenged regulation
will likely cause a concrete and imminent First Amendment
injury to at least one of them, and that a favorable decision by
this court would redress that injury. While petitioners ask the
court to assume that the Viewability Order will burden their
speech, the causal connection between the Viewability Order
and the claimed injury is tenuous at best.
Given cable operators’ pledge to follow the Viewability
Order whether or not it is upheld by the court, supra n.5,
petitioners’ proof of causation must rest on facts showing that at
least one petitioner competes for carriage on a cable system that
is a hybrid system bound by the Viewability Order, that will not
opt to switch to all-digital operations, that receives HD (as
opposed to SD) signals from must-carry stations, and that will
not voluntarily follow the Viewability Order anyway but is
operating at “full” capacity. Petitioners would then have to
show that the burden to them resulting from a decrease in
channel capacity for that cable operator will not be alleviated by
increases in capacity across cable systems as a result of the
incentives in the Viewability Order to go all-digital. See
generally Florida Audubon Soc’y v. Bentsen, 94 F.3d 658, 668-
72 (D.C. Cir. 1996) (en banc). As the record before this court
stands, petitioners have “failed to show how carriage of a
handful of must-carry channels would have any impact on cable
operators’ programming choices.” Intervenors’ Br. at 16.
To begin, the Commission found that “many [cable
operators] already have” chosen to operate or transition to all
11
digital systems, 22 F.C.C.R. at 21072,6 and cited record
evidence suggesting that “virtually all cable operators ultimately
will do so,” id. (quoting reply comments of National Association
of Broadcasters (“NAB”) and Maximum Service Television
(“MSTV”) at 5) (emphasis in original). Petitioners do not
dispute that digital technology frees up bandwidth creating
additional capacity usable for programming. See Consumer
Elecs. Ass’n v. FCC, 347 F.3d 291, 293-94 (D.C. Cir. 2003).
Comments in the rulemaking record referred to a study of cable
infrastructure projecting further expansion of capacity, and the
Commission observed that the Viewability Order, in providing
an incentive for cable systems to become all digital (to avoid
down-converting digital broadcast signals to analog), could have
a positive impact on petitioners by opening additional capacity
usable for programming. The Commission also pointed to
comments suggesting that the Viewability Order is unlikely to
have an impact on the carriage of most stations because the
“vast majority of broadcasters opt for retransmission consent,”
22 F.C.C.R. at 21076 (quoting comments of Time Warner), and
that “any incremental increase of bandwidth devoted to must-
carry stations will be ‘negligible,’” id. (quoting reply of the
NAB). Petitioners’ reliance on the Commission’s previous
statements7 that a duplicative carriage regime in aid of digital
transition would burden programmer speech by decreasing the
number of already limited channels for which they can compete
for carriage appears not to acknowledge either that the
Viewability Order affords an incentivized alternative – full
6
See Consolidated Requests for Waiver, 22 F.C.C.R. 11780,
11806 (Media Bureau 2007).
7
See NPRM, 13 F.C.C.R. 15092 ¶ 39 (1998); First Report
and Order and Further NPRM, 16 F.C.C.R. 2598 ¶ 9 (2001); Second
Report and Order and First Order on Reconsideration, 20 F.C.C.R.
4516 ¶ 22 (2005).
12
digital, which frees up bandwidth – or that the particularity of
injury to these petitioners is missing. As a result, the
Commission observes on appeal, “unlike [in] Quincy Cable,
there is no evidence (and it is very unlikely) that cable systems
with hundreds of channels are ‘saturated’ with must-carry
stations that deprive petitioners ‘any opportunity at all’ to
secure a channel slot.” Resps.’ Br. at 30 (quoting Quincy Cable,
768 F.2d at 1445).
Additionally, the Commission has since narrowed the scope
of the Viewability Order. On September 4, 2008, the
Commission ruled that small cable systems (i.e., unaffiliated
systems with 2,500 or fewer subscribers or with an activated
channel capacity of 552 MHz or less) are not obligated to
transmit must-carry stations in HD and that all cable operators,
regardless of size, need only transmit must-carry stations in
digital when those stations deliver their signal in HD, or when
digital customers would otherwise be unable to view analog
signals. Carriage of Digial Television Broadcast Signals,
Fourth Report and Order, FCC 08-193, 2008 WL 4092895(Sept. 4, 2008); supra n.3. Moreover, it is unclear whether
every cable system uses all of its allocated bandwidth. While
petitioners note in their brief that an extremely large number of
cable channels compete for space on networks that generally
have many fewer channel slots than there are channels, this is
not necessarily a perfect proxy for full use of bandwidth. When
pressed during oral argument, petitioners were unable to point
to any cable system using its full bandwidth, asserting instead
that it is clear that there are far more speakers than capacity.
Finally, judged against Quincy Cable, petitioners’ theory of
redressability is exceedingly vague. Cable operators have stated
that they will ensure viewability regardless of our decision here.
Moreover, because cable operators do have significant choice in
allocating their bandwidth capacity between different uses (e.g.,
13
pay-per-view, various content providers, telephone services,
etc.), it is unclear whether these petitioners will or will not be
offered channel space as a result of the Viewability Order.
Petitioners offer no particularized information in this regard. It
is unclear, in other words, whether any cable operator that
otherwise would have offered these cable programmer
petitioners channel space will deny them channel space because
of the Viewability Order. Petitioners fail to “adduce facts
showing,” Lujan, 504 U.S. at 562, that reversal of the
Viewability Order would result in additional capacity for which
they compete and thus redressability, like causation, remains
speculative.
Accordingly, we must dismiss the petition for review for
lack of Article III standing and we do not reach the merits of
petitioners’ challenges to the Viewability Order.