DOJ: Don't Review Subowner Regs
By TED HEARN -- Multichannel News, 1/29/2001
WASHINGTON -Two federal laws purportedly designed to curb discriminatory conduct by cable operators should not be reviewed by the U.S. Supreme Court, the Justice Department urged in a Jan. 19 brief.
The DOJ told the court it wants a lower-court ruling from last May which said both laws were constitutional under the First Amendment to stand without further review-despite cable-system owner Time Warner Entertainment's objections.
"The decision of the [U.S. Court of Appeals for the District of Columbia Circuit] is correct and does not conflict with any decision of this court or of any other court of appeals," the Justice Department said in a 21-page brief. "Accordingly, further review is not warranted."
TWE, a partnership that's 75-percent owned by AOL Time Warner Inc. and contains most Time Warner Cable systems, is challenging provisions of the 1992 Cable Act. One caps the number of cable subscribers a single operator may serve. A second rule limits the number of channels an operator may occupy with programming that it owns.
If DOJ were to prevail, the Supreme Court would shut down a case that recently entered its eighth year in the federal court system.
The case was held up for years, mainly because the D.C. Circuit refused to act while FCC rules implementing both provisions were still before the agency. The commission adopted final rules in October 1999, which TWE and AT&T Corp. promptly appealed to the same court that upheld the underlying laws.
In the lower court, TWE argued that both laws were content-based restrictions on speech, akin to limiting the distribution of a newspaper or telling the paper's owner that a certain number of pages must be set aside for unaffiliated third parties.
TWE said such laws are routinely struck down under the most stringent test for judging the legality of federal laws that regulate speech.
In its brief, the DOJ said the provisions were closer to the laws requiring carriage of local TV stations, which the high court upheld in 1997. In that case, the court determined that must-carry obligations addressed cable's "bottleneck power." In other words, they were not meant to suppress cable speech, but to let the speech of others flourish.
In its rules, the FCC said a cable operator could serve no more than 30 percent of subscribers to cable, direct-broadcast satellite or other providers of multichannel video programming. It also said an operator could not fill more than 40 percent of its first 70 channels with affiliated programming.
The D.C. Circuit has reviewed the FCC's rules since oral arguments in October and could release a decision at any moment.
AT&T is especially interested in seeing whether the D.C. Circuit upholds the FCC's ownership-attribution rules, which AT&T has challenged as overly broad.
According to those rules, any company that has at least 5-percent voting interest in another cable operator is considered to have control of all of that operator's subscribers. AT&T owns the other 25-percent interest in TWE.
Because AT&T-owned cable networks sold programming to TWE, its 9.7 million subscribers were attributable to AT&T.
Since Dec. 15, the FCC has twice ordered AT&T to sell its interest in TWE by May 19 to comply with the 30-percent cap.
