A three-judge panel of the U.S. court of Appeals for the D.C. circuit has denied a broadcaster appeal of the FCC's 2012 decision to sunset the viewability rule, deferring to the FCC's judgment and saying it had violated no rules of procedure.
The sunset in question was of the 2007 rule (the viewability rule, as broadcasters see it; the "dual-carriage" mandate, as cable operators view it, that required MSOs to downconvert digital must-carry TV station signals to analog format for their analog customers, an increasingly small percentage of the cable universe.
The sunset did not mean cable operators no longer had to accommodate their analog customers, only that they could now do so by providing home conversion equipment for free or at an "affordable" cost, rather than being required to deliver both an analog and digital version of must-carry stations.
Cable operators had argued it was time to lift the dual carriage mandate and give them more capacity to offer other services consumers might want. Both sides were doing hefty lobbying in the run-up to the vote, but cable's arguments held sway in the FCC's final order.
The National Association of Broadcasters appealed the decision, saying it was arbitrary, capricious and does not square with congressional intent -- in the 1992 Cable Act -- that must-carry signals have to be viewable without added equipment, "not merely available in theory."
The three-judge panel--Brett Kavanaugh, Harry Edwards and Stephen Williams--did not agree.
The judges concluced that the appeal lacked merit because the rule had only been a stopgap measure. they pointed out that in 2012 there were more home conversion devices to display digital channels on analog sets (27 million) than there were analog cable customers left (12.6 million).
The panel did not agree with the broadcasters argument that the Cable Act requires the FCC to maintain the rules so long as there are any hybrid systems serving customers with analog sets. "Petitioners’ argument effectively freezes time in the face of shifting technology and finds no support in the law.
"The FCC’s new rule allowing cable operators to offer analog subscribers equipment in lieu of downconversion was within its authority under the statute, supported by reasoned decisionmaking, and properly promulgated pursuant to notice and comment rulemaking procedures in which interested parties should have anticipated that the change was possible," the court ruled. "We therefore deny the petition for review."
In both that case and the present one, Judge Kavanaugh argues that other Cable Act directives are premised on a monopoly marketplace that no longer exists and are ripe for review.
"[As] a matter of constitutional law and technological reality, the 1992 Cable Act’s various program carriage and non-discrimination regimes rest on a hollowed-out foundation," Kavanaugh said in a concurring opinion in the viewability rule decision. "The Commission was right to see the First Amendment problem in this case – and further cases like this no doubt loom on the horizon."
And in language the National Cable & Telecommunications Association should clip for its scrapbook, Kavanaugh said:"Because cable operators no longer wield market power, the Government can no more tell a cable operator today which video programming networks it must carry than it can tell a bookstore what books to sell or tell a newspaper what columnists to publish."
Broadcasters could ask for an en banc (full court) review of that three-judge panel decision.