Broadcasting (Update 1)

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BROADCASTING (Update 1)

From its inception in the early days of commercial radio, federal regulation of the broadcast industry has rested on three policies that are not always compatible: (1) competition among broadcasters; (2) a fiduciary duty to serve the public interest; and (3) the promotion of local needs and interests. From the fairness doctrine to the allocation of television licenses, broadcast regulation represented a conscious effort to maximize the public welfare by providing essential information and to encourage national diversity through the celebration of local uniqueness. In the name of the public interest standard of the communications act of 1934, broadcasters have been characterized as owing fiduciary obligations to their audiences—with the Federal Communications Commission (FCC) and then the courts as appropriate bodies to enforce the trust. The goal of assuring local, public-interest programming, however, is built on theoretical foundations that weaken significantly when it must confront the economic forces and consumer choices that underlie the policy of relying on competition.

The linchpin of broadcast regulation is limited entry by government license, reinforcing an idea of scarcity that has convinced decision makers that broadcasting is so different from the print media that it may be regulated in ways that would be unconstitutional if applied to a newspaper. From NBC v. United States (1943) to red lion broadcasting co. v. fcc (1969), to columbia broadcasting system, inc. v. federal communications commission (1981), the Supreme Court has concluded that the broadcast spectrum is an inherently limited resource. Because this conclusion justifies distinguishing broadcasting from print, the Court must implicitly conclude that newsprint, printing presses, and therefore the print media in general, are not inherently limited. Thus, the Court has noted that more people want broadcast licenses than can have them, without ever pausing to note that the reason for excess demand is that broadcast licenses are highly valuable yet given away free. If the facilities for publishing major newspapers were given away free, there would also be more individuals who wish them than could have them. Essentially the Court has seen broadcasters as competing only against other local broadcasters providing the same service, but print outlets as competing against every other print possibility in the world. After being the last bastion for the belief in broadcast scarcity, the Court signaled in FCC v. League of Women Voters of California (1984) that if Congress or the FCC would say that broadcasting was no longer scarce, it, too, would agree.

As notions of scarcity were losing their former intellectual force, the FCC ceased a variety of policies that limited direct competition with broadcasting. Beginning with a deregulatory period in the late 1970s, policies brought broadcasters under increasing competition, not only from UHF stations that had been marginal but, more important, from two other sources: (1) an unshackled cable industry that was able to exceed fifty percent household penetration by the late 1980s; and (2) videocassette recorders, which, being outside the jurisdiction of the FCC, rapidly became standard household items in the 1980s. Because of increased competition, broadcasters could no longer assume they could reap monopoly profits and then assert that they would use some of the excess revenues to air the sort of public-interest programming that appeals far more to the FCC than to local audiences. These changes in the marketplace brought many of the key assumptions about broadcasting into question. Nowhere was this more apparent than with the fairness doctrine, the talisman of broadcaster as fiduciary.

The fairness doctrine mandates that broadcasters give adequate coverage to significant public issues and ensure that such coverage fairly presents conflicting views on those issues. Held constitutional in Red Lion, the fairness doctrine encapsulates a journalistic code of ethics to which most reporters and publishers in all media profess allegiance. Nevertheless, as the Court unanimously held in miami herald publishing company v. tornillo (1974), in all other media the idea of fairness is enforced internally rather than by the legal system. For the nonbroadcast media the first amendment mandates that the government leave issues of fairness to editors and readers, not to judges.

The fairness doctrine allows legal challenges to broadcasters who present controversial programming. Even if the challenges ultimately fail, the questioning of editorial decisions (where the law mandates that the editor answer) not only imposes time and legal costs but also carries the dim possibility of loss of license. There are no similar costs for avoiding controversy, and everyone agrees that is what some broadcasters do. This is precisely the behavior that the chilling effect doctrine would predict. Red Lion had denied the existence of a chilling effect because the fairness doctrine fit so perfectly within the premises of broadcast regulation, but in the years following Red Lion, accented by President richard m. nixon's attitudes toward the networks as the most visible example of the hated media establishment, the chill became so obvious that it was a major part of the FCC's decision to repeal the doctrine in 1985.

The FCC's repeal was attacked on two fronts. Congress passed legislation codifying the fairness doctrine, but President ronald reagan's veto, on constitutional grounds, was sustained. Similarly the District of Columbia Circuit Court of Appeals, relying on the alternative that the fairness doctrine no longer served the public interest, affirmed the repeal and the Supreme Court denied certiorari in early 1990. Congressional Democrats, however, remain wedded to the fairness doctrine because they confuse its name with its effects and are pressured by constituency groups that view the potential of acquiring airtime as overriding any adverse effects the doctrine might have. As long as the majority party in Congress holds this position, it is likely that the fairness doctrine will be imposed legislatively and the Supreme Court will be forced to settle the constitutional question.

It is conceivable, although unlikely, that the Supreme Court could cling to scarcity as the explanation for the constitutional distinction between print and broadcasting. More likely, however, the Court would either concede there are no relevant constitutional distinctions or fashion a new one, as it did to sustain the regulation of indecency in federal communications commission v. pacifica foundation (1978). Pacifica concluded that broadcasting could be regulated differently because its unique pervasiveness made it an uninvited intruder in the home and in any event it was uniquely accessible to children. Pervasiveness could be the Court's echo of the more common, if unexplained, conclusion that broadcasting is too powerful a force not to be regulated. Although this explanation is antithetical to the First Amendment because of its similarities to the rationale for regulating the press under the English common law, power is nevertheless the most likely surviving rationale for treating broadcasting differently. The rationale might be made more platable by a suggestion that broadcasting had obtained its power because of its privileged monopoly status under federal law, so that continued regulation would be both essential and constitutional.

Whatever may be the answer to the constitutional question of the status of over-the-air broadcasting, the answer's importance, if and when it is given, may be largely historical, given the increasing dominance and penetration of cable with its more numerous viewing options. Once a poor stepchild whose growth was hindered by the FCC to benefit broadcasters, by the 1980s cable had become a major force in communications policy. The Cable Communications Policy Act of 1983, a compromise between the cable industry and the National League of Cities, has set the terms of the current debate by allowing cities to select their own (typically monopolistic) franchisees, but freeing cable from most regulations, especially rate regulation, to which it had formerly been subject. The result has been a predictable escalation in the price for cable service, which too often is accompanied by poor service. This combination has led to increasing calls for reregulation. This development places legislative compromises back at issue and makes it increasingly likely that the Court will have to decide where cable fits into the constitutional scheme of freedom of the press.

Franchising is the key issue in cable. Almost every city has preferred to grant an exclusive franchise to the operator of its choice, which thereafter enjoys a monopoly. Initially perceived as in the cities' interest by guaranteeing service (and as a patronage plum), the monopoly franchise is increasingly recognized as having the attributes of monopolies everywhere: a poor product at an excessive price. Yet fears remain that allowing unlimited entry may allow a cable company to skim the cream from the best areas (typically high-density residential areas with customers who can pay), leaving other areas of the city with little or no service.

The answer to exclusive franchises and to subsidiary issues such as rate regulation or requiring a cable system to dedicate a fixed number of no-user-cost access channels over which it has no program control will probably turn on how the Supreme Court chooses to conceptualize cable. In Los Angeles v. Preferred Communications (1986), the Court ducked a constitutional decision on exclusive franchising, but three options seem dominant: the broadcast model, the print model, and a hybrid of the two. The last, in keeping with recent jurisprudence that every medium is "a law unto itself," would allow the Court to make up rules that strike a majority as sensible as each case arises. The Court's confidence in its ability to tailor constitutional doctrine to the needs and attributes of a new medium of mass communication harkens back to similar ill-fated hopes for its constitutional treatment of broadcasting.

L. A. Powe, Jr.
(1992)