HomeMy WebLinkAboutCivil Action 92-2494 Time Warner Entertainment Company LP against Federal Communications Commission and United States of America AUNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
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TIME WARNER ENTERTAINMENT )
COMPANY, L.P., )
75 Rockefeller Plaza )
New York, N.Y. 10019 )
Plaintiff, )
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against- )
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FEDERAL COMMUNICATIONS COMMISSION, )
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Washington, D.C. 20554
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and )
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UNITED STATES OF AMERICA, ).
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Defendants. )
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Civil Action 1 — c9L19 y
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
1. Time Warner Entertainment Company, L.P.
("TWE") seeks declaratory and injunctive relief
(i) preliminarily and permanently enjoining the -defendants
from enforcing Sections 3, 4, 5, 6, 7(b)(4)(B) and (c), 9,
10(d), 11, 15, 19, 24 and 25 of the Cable Television
Consumer Protection and Competition Act of 1992 ("1992 Cable
Act") (which either add or amend §§,325, 335, 612, 613, 614,
616, 621, 623, 624, 628, 635A and 638 of the Communications
Act of 1934 ("1934 Communications Act")), and Sections 611
and 612 of the Cable Communications Policy Act of 1984
("1984 Cable Act"); and (ii) declaring Sections 3, 4, 5, 6,
7(b)(4)(B) and (c), 9, 10(d), 11, 15, 19, 24 and 25 of the
1992 Cable Act and Sections 611 and 612 of the 1984 Cable
Act to be unconstitutional, void and of no effect.
Introduction
2. The printed word is no longer the only, or
even the primary, means of mass communication. The past
50 years have witnessed the development of vast new networks
of electronic media for the dissemination of news, informa-
tion and entertainment via television. In the first wave of
the video revolution, broadcast television made possible
instantaneous communication between broadcast television
stations distributing their signals from terrestrial
transmitting antennas and anyone within the station's
transmitting range who owned a television set. In that era,
most Americans had no more than three broadcast networks and
a handful of independent stations to choose from, which
provided homogeneous programming. The programming was
developed to suit the broadest cross-section of America.
Indeed, a former FCC chairman termed television in this
first wave the "Vast Wasteland".
3. In the second wave of that revolution, cable
television systems, which transmit from approximately 12 to
150 channels of video programming by means of coaxial and
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fiber optic cable, have made it possible to communicate a
vast array, of news, information and entertainment
programming to persons within the system's service area who
pay a fee to subscribe.
4. As part of the cable revolution, a large
number of new programming services have been developed.
These are typically distributed by means of satellite to
cable operators and others, who in turn distribute such
programming services to their subscribers. The cable
revolution has made possible the development of both general
entertainment programming services and more specialized
services that present programming on such subjects as news,
religion, financial information, government, law, education,
music and minority affairs. Many individual cable systems
also create their own programming services. For example,
TWE's cable systems in the New York City area produce and
offer to their subscribers a 24-hour local news service
called New York 1.
5. In addition to cable, a number of other tech-
nologies, including home satellite dishes, videocassettes,
video disks, satellite master antenna television systems and
multichannel multipoint distribution systems, have been
developed that compete with both broadcast and cable in
communicating news, information and entertainment.
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6. Because cable operators and programmers are
engaged in the communication of news, information and
entertainment, courts have long recognized that cable
communications are protected under the First Amendment of
the United States Constitution. . As the Supreme Court has
stated, communications via cable "plainly implicate First
Amendment interests". Los Anaeles v. Preferred Communica-
tions. Inc., 476 U.S. 488, 494 (1986). In creating
programming and in selecting programming to offer to their
subscribers, cable operators exercise editorial discretion
similar to that of newspaper editors in determining what to
print. The exercise of that discretion is protected under
the First Amendment. Preferred Communications, 476 U.S. at
494; FCC v. Midwest Video Corp., 440 U.S. 689, 707 (1979);
Ouincy Cable TV. Inc. v. FCC, 768 F.2d 1434, 1452 (D.C. Cir.
1985), cert. denied, 476 U.S. 1169 (1986) ("Quincy").
7. The provisions of the 1992 Cable Act and the
1984 Cable Act that TWE challenges through this action
single out cable operators and affiliated programmers for
restrictions on their ability to communicate that would be
patently unconstitutional if applied to traditional print
media. Among other things, the challenged legislation:
(a) requires cable operators to deliver to their
subscribers the programming of certain commercial and
noncommercial broadcast television stations, regardless
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of whether the operators wish to offer or their
subscribers wish to receive such programming;
(b) requires cable operators to set aside a
substantial portion of the channels that constitute
their communicative capacity for "public, educational
and governmental" ("PEG") programming and to lease
other channels to unaffiliated programmers, without
regard to the operator's willingness to convey or to be
associated with the views expressed or material
included in such programming;
(c) forbids cable operators to exercise editorial
discretion with respect to the broadcast, PEG and
leased access programming it requires them to carry;
(d) specifies the content of cable operators'
lowest -price or "basic" service offering and enables
municipal officials and/or defendant Federal Communica-
tions Commission to set the price of other non -premium
services;
(e) purdens cable operators' exercise of
editorial discretion by requiring them to notify their
subscribers in advance of free previews of certain
programming;
(f) singles out those programmers that have
ownership affiliations with cable systems for special
regulations requiring them, with very limited
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exceptions, to sell their programming to all
distributors on the same terms and conditions and
specifying the terms and conditions on which they may
sell, abrogating their ability to maintain exclusive
relationships with cable operators and, potentially,
requiring them to.provide their programming to
essentially any distributor; and
(g) requires the FCC to consider the "necessity"
of placing limits on the ability of cable operators to
engage in the production and creation of programming.
8. The 1992 Cable Act, through many of its
provisions, makes these unprecedented intrusions into the
constitutionally -protected editorial discretion of cable
operators and cable programmers for the purpose of placing
special burdens upon a narrow class of speakers who own both
cable television systems and cable programming services, and
for the purpose of favoring traditional broadcast interests
over the more technologically -advanced cable operators and
programmers.
9. Congress explicitly stated that one principal
purpose of the Act was to maintain "[t]he economic viability
of free local broadcast television" (1992 Cable Act
§ 2(a)(16)) in view of the "marked shift in market share
from broadcast television to cable television services" (id.
§ 2(a)(13)). Congress thus intended the 1992 Cable Act to
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favor traditional broadcasting interests over cable
operators and cable programmers, and to secure for the
broadcasting interests patronage and viewership that they
have been unable to garner when competing with cable
operators and programmers in the economic marketplace and in
the marketplace of ideas. Congress has no authority to
vitiate the rights of new speakers simply to save the old
ones from the march of technology.
10. As justification for these intrusive measures,
Congress has proffered various "findings" that are palpably
contrary to fact. For example, § 2(a)(4) of the 1992 Cable
Act states that "the cable industry has become highly
concentrated", with such "potential effects" as "barriers to
entry for new programmers and a reduction in the number of
media voices available to consumers". In fact, however, the
cable industry is not "highly concentrated" by any customary
economic measure (the ten largest multiple system operators
account for fewer than 55% of all cable subscribers), and an
effect of the increasing size of larger cable operators has
been to enhance their ability to finance new programming
ventures and thus increase the number of "media voices" that
are available. Since cable television prices were
deregulated by the 1984 Cable Act, no fewer than 40 new
programming services have been launched, many of them
financed in whole or part by cable operators.
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11. In a strikingly Orwellian touch, Congress has
sought to justify its sweepinginterference with the First
Amendment rights of cable operators and cable programmers by
invoking the First Amendment itself. For example, the
legislation assertedly rests in part on the "First Amendment
interest in promoting a diversity of views provided through
multiple technology media" (1992 Cable Act § 2(a)(6)), and a
"First Amendment interest in ensuring that cable subscribers
have access to local noncommercial educational stations"
( § 2(a) (7)).
12. Our Constitution does not work that way. The
First Amendment is not a source of legislative power,
enabling Congress to penalize eme group of speakers in order
to benefit another in the name of First Amendment "values"
such as "diversity". On the contrary, the First Amendment
limits Congress's power to legislate, and it prohibits
legislation such as that at issue here.
Jurisdiction and Venue
13. This action arises under §§ 3-7, 9-11, 15, 19,
24 and 25 of the 1992 Cable Act, §§ 611 and 612 of the 1984
Cable Act, and the First and Fifth Amendments to the United
States Constitution. This Court has jurisdiction over this
action pursuant to 28 U.S.C. § 1331.
14. Venue is proper in this Court under 28 U.S.C.
§ 1391(e) .
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15. This Court has power to provide declaratory
and other necessary and proper relief under 28 U.S.C.
§§ 2201 and 2202.
16. Convening of a district court of three judges
is required by Section 23 of the 1992 Cable Act (adding
§ 635(c)(1) to the 1934 Communications Act), and 28 U.S.C.
§ 2284.
Parties
17. Plaintiff TWE is a limited partnership
organized under the laws of the State of Delaware. TWE's
principal place of business is located at 75 Rockefeller
Plaza, New York, New York.
18. Defendant Federal Communications Commission
("FCC") is an independent agency of the United States
Government created under the Communications Act of 1934, as
amended, 47 U.S.C. § 151, et seq. The FCC has its principal
place of business in Washington, District of Columbia.
19. Defendant United States of America is'also a
Party.
Background
I. THE FIRST AMENDMENT FRAMEWORK
20. The First Amendment provides that "Congress
shall make no law . . . abridging the freedom of speech, or
of the press". U.S. Const. Amend. I.
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21. Cable operators and programmers, like news-
papers and magazines, are First Amendment speakers entitled
to Constitutional protection. The Supreme Court recently
reaffirmed that "[c]able television provides to its
subscribers news, information, and entertainment. It is
engaged in 'speech' under the First Amendment, and is, in
much of its operation, part of the 'press.'" Leathers v.
Medlock, U.S. , 111 S. Ct. 1438, 1442 (1991).
22. The freedom to exercise editorial discretion
to determine what news, information and entertainment to
disseminate --and what not to disseminate --is central to the
freedom of the press that the First Amendment protects. The
Supreme Court has held that under the First Amendment, a
newspaper cannot be compelled to publish information that it
does not wish to publish. The Court explained its rationale
as follows: "A newspaper is more than a passive receptacle
or conduit for news, comment and advertising. The choice of
material to go into a newspaper, and the decisions made as
to the limitations on the size and content of the paper, and
treatment of public issues and officials --whether fair or
unfair --constitute the exercise of editorial control and
judgment." $iami Herald Publishina Co. v. Tornillo,
418 U.S. 241, 258 (1974) (footnote omitted).
Similarly, the
Court has repeatedly held that, under the First Amendment, a
speaker cannot be compelled to disseminate views that it
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does not wish to disseminate. pacific Gas & Elec. Co. v.
Pud is Utils. Comm'n, 475 U.S. 1 (1986); Wooley v. Maynard,
430 U.S. 705, 716-17 (1977).
23. Cable operators select which programming
sources to include in the array of programming they offer
their subscribers. For example, cable operators must choose
from among a vast array of programming services devoted to
such subjects as news and political developments (C -SPAN I
and II, Cable News Network, Consumer News and Business
Channel), law (Courtroom Television Network), religion
(National Jewish Television, VISN), music (MTV, Video
Hits -1, The Nashville Network), minority interests (Black
Entertainment Television, Galavision), education (The
Discovery Channel, Mind Extension University), sports (ESPN,
Sportschannel) and general entertainment programming (USA
Network, WTBS, TNT). In making such choices, cable
operators exercise editorial discretion --the same type of
discretion employed by newspaper editors in determining the
content of a daily newspaper.
24. Similarly, cable operators often develop their
own distinctive programming for distritution to their
subscribers. For example, many of the programming services
that characterize contemporary cable communications,
including Home Box Office, Showtime, MTV and C -SPAN, were
initially developed or substantially capitalized, in whole
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or in part, by cable operators, who created such services,
in part, to enhance their ability tw compete with
traditional media such as broadcast television stations. In
addition, individual cable systems often create their own
distinctive local programming, as TWE has done with its New
York 1 news service in New York City and with its local news
services in other locations, including Ithaca and Rochester,
New York.
25. The Supreme Court has stated that cable
operators exercise "a significant amount of editorial
discretion regarding what their programming will include".
Midwest Video Corp., 440 U.S. at 707. Similarly, it has
stated that "through original programming or by exercising
editorial discretion over which stations or programs to
include in its repertoire, [a cable operator] seeks to
communicate messages on a wide variety of topics and in a
wide variety of formats". Preferred Communications, 476
U.S. at 494. As the Court of Appeals for the District of
Columbia Circuit has noted, it is now "clearly established"
that in selecting or creating programs and program sources
to offer to their subscribers, "cable operators engage in
conduct protected by the First Amendment". Quingy, 768 F.2d
at 1444.
26. Cable programmers are also First Amendment
speakers. Many programmers produce their own programming,
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devoted to such diverse subjects as news and political
events, religious subjects, education, music and general
entertainment. Such programming reflects its originator's
distinctive approach and point of view. In addition, when
they make use of programming created by others, programmers
exercise substantial editorial discretion in determining
what to include --and what not to include --in the programming
services that they offer. Cable programmers also decide, as
any speaker does, where, when, by what means, to whom and on
what terms they wish to communicate the news, information
and entertainment that they offer.
II. TWE ENGAGES IN CABLE COMMUNICATIONS THAT ARE
PROTECTED BY THE FIRST AMENDMENT
27. TWE is a partnership, the majority of which is
indirectly owned and fully managed by Time Warner Inc.,
which is a publicly traded Delaware corporation. TWE is
comprised principally of three unincorporated divisions:
Time Warner Cable ("TWC"), which operates cable television
systems; Home Box Office ("HBO"), which operates pay
television programming services; and Warner Bros., which
produces and distributes motion pictures and television
programs. TWE also owns, directly or indirectly, interests
in various other cable television programming services, some
of which it manages. Each of its divisions engages in
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communicative activity that is protected by the First
Amendment.
A. TWE's Communicative Activities as a Cable
Operator
28. Through TWC, TWE owns and operates cable
systems in approximately 1000 franchise areas throughout the
United States, which have a combined book value of
approximately $8.2 billion, and which reach approximately
6.9 million subscribers. TWE and its predecessors built and
acquired these costly assets with the expectation that they
would have the ability to use those capacities without
government interference, like any other speaker. TWC's
cable systems have channel capacities that generally range
from 30 to 70 channels. TWC's cable system in one test area
in Queens, New York, which uses advanced fiber optic
technology, has the capacity to provide up to 150 channels
of programming to its subscribers.
29. TWC and its local divisions exercise editorial
discretion in determining which program services should be
offered to its subscribers. In making such determinations,
TWC personnel choose from among the entire array of
programming services that are available. They take into
account such factors as local tastes; local demographic
characteristics, including such variables as age, household
size and composition, income levels, occupational
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characteristics and educational attainments; the quality of
programming; the needs and interests of identifiable
segments of the local population, including minority and
ethnic groups; system channel capacity; and the availability
of news, information and entertainment to cable subscribers
from non -cable sources, including broadcast television
stations, movie theaters, video cassettes, cultural and
sporting events and non -electronic media. The content of
programming services is often decisive in making such
determinations. For example, a TWC cable system located in
a conservative "middle American" community may choose to
offer subscribers a greater array of Christian religious
programming, while a TWC system located in an ethnically
diverse urban center might place greater emphasis upon
program services, including those oriented to persons who
speak languages other than English, that would have appeal
to large segments of the local population. For example,
TWC's cable system in Queens, New York, a community rich in
ethnic diversity, offers a Greek, Korean and Hindi channel,
among others.
30. TWC cable systems continually refine their
channel line-ups to increase subscriber satisfaction and
appeal. Over 55 different program services are carried by
at least one TWC cable system; it is estimated that there
are no more than three program services that are carried by
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all TWC cable systems. Where a particular program service
is carried in all or virtually all TWC systems, it is
because that.service has demonstrated broad appeal to United
States television audiences and is an economically
attractive choice.
31. In addition to deciding which services to
carry, TWC systems also decide how services are to be
"packaged" in offerings to subscribers. In most TWC
systems, subscribers can choose from among two or more
packages or "tiers" of services, for which different prices
are charged, and can also elect to purchase premium and
pay-per-view services, for which an additional charge is
made. TWC systems typically c`fer a "basic" tier of
services and a "standard" tier, with the latter including a
large array of satellite -delivered programming services, and
subscribers are usually required to purchase the "standard"
tier in order to purchase premium or pay-per-view services.
Premium services are often offered in discounted packages to
subscribers.who wish to purchase more than one such service.
TWC personnel structure such programming tiers and packages
based on judgments about local preferences similar to those
described above with respect to the choice of individual
program services.
32. TWC cable systems also exercise editorial
discretion in determining the channel numbers on which
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particular programming will be offered. Channel positioning
decisions take into account such factors as subscriber
convenience, popularity of the service and the operators'
marketing goals. Operators sometimes place a particular
service on a particular channel in order to standardize the
channel line-ups of systems in a particular locality for
purposes of maximizing subscriber convenience and
satisfaction.
33.. TWC cable systems are also active in the
production of original programming that is offered to their
local subscribers. The New York 1 service recently launched
in TWE's New York City cable systems offers continuous
24-hour coverage of local news and events in New York City -
The TWC systems located in .Ithaca and Rochester, New York,
also produce and offer local news programs to their
subscribers. Many of TWC's other cable systems engage in
the creation and production of their own original
programming to some extent.
34. TWC's cable systems compete with a wide
variety of alternate sources of news, information and
entertainment.. In particular, TWC's cable systems compete
with broadcast television stations, which, unlike cable
systems, offer their programming without direct charges to
viewers.
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35. Although TWC's cable systems compete with
broadcast television stations, the cable industry is
different from the broadcasting industry. There are no
physical limitations on the ability to construct
multichannel video distribution systems equivalent to the
physical scarcity of the broadcast spectrum.
36. TWC's cable systems also compete with other
means of delivering video programming to consumers, includ-
ing satellite master antenna television ("SMATV") systems,
in which apartments in a multiple dwelling unit ("MDU") are
connected to antennas capable of receiving satellite -
delivered program services that are located on the premises
(some SMATV systems use microwave relays to connect multiple
MDUs to a single satellite receiving antenna); multichannel
multipoint distribution systems ("MMDS"), often called
"wireless cable", which deliver one or multiple channels of
programming to subscribers by means of terrestrial microwave
antennas; home satellite dishes ("TVROs"), which enable
their owners to receive a vast array of programming services
that are transmitted by satellite, either thrcugh a
subscription agreement that is arranged directly with the
programmers or indirectly through any of a large number of
program packagers, or, in many instances, free of charge;
and video cassettes and video disks, which consumers may
rent or buy for viewing on video cassette players.
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37. TWC's cable systems also compete with the
tra'itional print media, part.cularly newspapers and
magazines, especially in the provision of news. Cable
television, as an electronic publisher, has become a vital,
if not primary, source for the public of news, opinion and
other information. TWC's cable systems also compete with
radio, especially in the provision of music, and with all
these media and broadcast television stations for
advertising.
B. TWE's Communicative Activities as a Cable
Programmer
38. TWE operates as a cable programmer principally
through its HBO division ("HBO"). 'HBO operates two
programming services known as Home Box Office (the "HBO
Service") and Cinemax. HBO also owns and operates, through
a joint venture with Viacom International Inc., a
programming service known as Comedy Central. TWE or its
affiliated entities also have interests in various other
programming services, including E! Entertainment Television,
which HBO manages; QVC Network; Sunshine Network; Black
Entertainment Television ("BET"); Courtroom Television
Network; The Travel Channel; and, through an investment in
Turner Broadcasting, Cable News Network ("CNN"), Headline
News, WTBS, TNT and The Cartoon Network.
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39. Both the HBO Service and Cinemax are premium
television programming services, i.e.,, they are sold to
subscribers on a per -channel basis for a monthly
subscription fee that is incremental to the monthly fee for
the programming tier the subscriber has selected. HBO has
recently introduced "multiplexing", in which its program
services are offered on two or three channels, using
differentiated schedules so that each channel offers
different types of programming at any given time in order to
appeal to various audiences.
40. The HBO Service and Cinemax are offered to
subscribers by cable operators and MMDS and SMATV system
operators. They are also offered on a subscription basis to
owners of C -band home satellite dishes, both directly by HBO
and by packagers of satellite programming, such as Superstar
Connection, Consumer Satellite System and the National Rural
Telephone Cooperative, which HBO has authorized to act as
distributors.
41. The HBO Service offers a wide variety of
programming, including motion pictures, sporting events,
concerts and documentaries. Cinemax consists primarily of
motion pictures. HBO exercises editorial discretion in
determining which programs to include in its program
services. In making such determinations, it takes into
account such factors as the nature, content and quality of
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the programming, its acceptance by audiences in other media,
its timeliness in relation to current events and issues, and
other factors.
42. Since its inception, HBO has produced (or
others have produced for it) its own programs for exhibition
on its programming services, particularly on the HBO
Service. Such programs often address issues that are
controversial or have great social or political
significance; in recent years, for example, abortion (A
Private Matter; The Becky Bell Story: Public Law 106;
Abortion: Desperate Choices), gun control (Without Warning:
The James Brady Story; Guns: A Dav in the Death of
America), AIDS (AIDS: Everything You and Your Family Need
to Know . . .; Common Threads: Stories from the Quilt;
First Love Fatal Love) and children's advertising (Buy Me
That!; puv Me That Too!). HBO has also produced (or others
have produced for it) programs that are critical of -major
U.S. corporations and of the U.S. government as well, such
as jfterburn (criticizing the U.S. Air Force and General
Dynamics in the handling of the death of a pilot in an F-16
test flight) and The Tragedy of Flight 103 (which was
critical of the Federal Aviation Administration and Pan
American World Airways). HBO also produces programming for
others, including broadcasters.
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43. Comedy Central, a non -premium service in which
TWE owns a 50% interest, offers comedy programming,
including political satire such as Indecision '92 and State
of the Union Undressed. Court TV, a non -premium service in
which TWE owns a one-third interest, provides coverage of
notable, and often controversial, judicial proceedings.
Both Comedy Central and Court TV are relatively new
services. Comedy Central was established in April 1991,
Court TV in July 1991.
C. TWE's Communicative Activities as a Program
Creator
44. Warner Bros. is a major producer of theatrical
motion pictures and televisicn programs. It licenses its
motion pictures for exhibition in movie theatres, on video
cassettes and video disks and by video programmers,
including pay-per-view services, premium services, basic
services and network and independent television stations.
Among other things, Warner Bros. produces topical and
sometimes controversial' films that generate national debate
including, most recently, ,TRK and pew Jack City.
The Challenged Legislation
and Its Effects on TWE
45. In a patently unconstitutional abuse of
federal legislative power, certain provisions of the
1992 Cable Act and the 1984 Cable Act vastly circumscribe
the editorial discretion of cable operators and cable
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programmers and program creators who produce programs and
films for television and cable distribution. Among other
things, the challerged legislation:
(a) overrides the editorial discretion of cable
operators to determine which programming they will --or
will not --offer to their subscribers by requiring them
to (i) exhibit specified commercial and noncommercial
broadcast television stations, (ii) offer so-called
"public, educational and governmental" or "PEG"
channels, which are often programmed by municipal
franchising authorities; (iii) make a significant
portion of their channel capacity available for lease
to unaffiliated programmers, expressly forbidding
operators to exercise any editorial control over the
content of such programs; and (iv) undertake the
burdensome and expensive process of giving notice to
subscribers thirty days in advance of offering any free
programs, regardless of the content of the programs;
(b) gives certain especially influential and
powerful broadcast television stations the option to
force cable operators to pay to retransmit their
programming; and
(c) overrides the editorial discretion of cable
operators to choose the channels on which they will
carry particular programming services.
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46. The 1992 Cable Act also singles out for
special treatment a narrow class of cable speakers who, like
plaintiff, are vertically integrated in that they own both
cable systems and cable programming services. The Act
applies to such speakers numerous restrictions on their
speech that do not apply either to cable speakers that are
not vertically integrated or to non -cable speakers. For
example, the Act:
(a) subjects cable programmers in which a cable
operator has an "attributable interest" to federal
regulation of the price, terms and conditions on which
they may disseminate their programming, and may
(through FCC regulations) _equire such programmers to
sell their programming to any distributor, without
regard to whether the programmer wishes to communicate
to or through such a distributor; similar restrictions
are not imposed on competing programmers that are not
affiliated with a cable operator;
(b) forbids programmers in which a cable operator
has an "attributable interest" to distribute their
programming services through cable operators on an
exclusive basis unless permitted to do so by the FCC,
thus potentially impairing the ability of such
programmers to select their audiences and limiting
their ability to gain distribution in situations in
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which a cable operator for legitimate reasons desires
exclusive distribution rights; this burden is not
imposed on competitive services that lack cable
affiliations; and
(c) limits the ability of cable operators to
offer to their subscribers any program service in which
a cable operator has an "attributable interest", thus
denying subscribers access'to certain services as well
as impairing the ability of cable operators to engage
in protected speech; such restrictions are not imposed
on other programmers.
47. The 1992 Cable Act and the 1984 Cable Act
contain additional provisions that'limit or burden the
ability of cable operators and/or cable programmers to
communicate with their audiences that are not imposed upon
other speakers. These include provisions that:
(a) specify the content of cable operators' basic
service offerings and subject cable operators' rates
for those offerings and other non -premium services to
municipal and/or federal regulation;
(b) chill and threaten to limit cable operators'
abilities to create their own programming;
(c) require the FCC to promulgate regulations
that limit the number of subscribers a cable operator
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may have, and thus the size of the audience with which
a cable operator may communicate; and
(d) authorize the same municipal authorities that
regulate private cable operators to own and operate
cable systems without a franchise regulating their
conduct and with immunity from liability in damages for
any misconduct in which they may engage.
III. DIRECT INTERFERENCE WITH CABLE OPERATORS'
EDITORIAL DISCRETION: THE MUST CARRY, RETRANSMISSION
CONSENT AND FREE REVIEW RESTRICTION PROVISIONS OF THE 1992
CABLE ACT AND THE PEG AND LEASED ACCESS PROVISIONS OF THE
1984 CABLE ACT
A. The Statutory Scheme
1. The Must Carry and Retransmission Consent
Provisions of the 1992 Cable Act
48. Sections 4 and 5 of the 1992 Cable Act amend
the 1934 Communications Act by adding, respectively,
Sections 614 and 615 (the "must carry provisions"). The
1992 Cable Act imposes upon cable operators onerous "must
carry" obligations which compel operators to provide to
their subscribers certain commercial and noncommercial
broadcast television stations, regardless of whether
operators wish to carry such stations or their subscribers
wish to receive them. Thn 1992 Cable Act also empowers
broadcast television stations to withhold consent for
-26-
retransmission of their signals unless the cable operator
pays them a fee. The Act thus dictates a significant part
of the content of the news, information and entertainment
that cable operators must provide to the 60% of American
households that they serve. The must carry provisions of
the 1992 Cable Act are even more intrusive than the FCC's
former must carry rules, which the federal courts have
repeatedly struck down as unconstitutional. Century
Communications Corp. v. FCC, 835 F.2d 292, 304-05 (D.C. Cir.
1987), cert. denied, 486 U.S. 1032 (1988); Quincy, 768 F.2d
at 1454.
a. Commercial Station Must Carry Obligations
49. Section 614(a) provides that "[e]ach cable
operator shall carry, on the cable system of that operator,
the signals of local commercial television stations and
qualified low power stations as provided by this section".
50. Section 614(b)(1)(A) provides that operators
of cable systems with 12 or fewer channels "shall carry the
signals of at least three local commercial stations".
(Section 614(b)(1)(A) exempts a cable system having fewer
than 300 subscribers from its requirements, but only "so
long as such system does not delete from carriage by that
system any signal of a broadcast television station".)
Section 614(b)(1)(B) provides that operators of cable
systems with more than 12 channels "shall carry the signals
-27-
of a number of local commercial stations, up to one-third of
the aggregate number of usablc activated channels".
Section 614(h)(1) defines "local commercial television
station" as "any full power television broadcast station,
other than a qualified noncommercial educational television
station within the meaning of section 615(1)(1) . . . that,
with respect to a particular cable system, is within the
same television market as the cable system".
51. Section 614(b)(2) provides that if the number
of local commercial television stations "exceeds the maximum
number of signals a cable system is required to carry" under
Section 614(b)(1), then the operator "shall have discretion
in selecting which such stations shall be carried on its
cable system", but the Act further provides that "under no
.circumstances shall a cable operator carry a qualified low
power station in lieu of a local commercial television
station", and, if the operator chooses "an affiliate of a
broadcast network", then the operator "shall carry the
affiliate of such broadcast network whose city of license
reference point . . . is closest to the principal headend of
the cable system".
52. Section 614(b)(3)(A) requires the operator to
carry the program signals of each commercial broadcast tele-
vision station that it is obligated to carry under the must
carry provisions "in its entirety". Section 614(b)(3)(B)
-28-
further requires the operator to "carry the entirety of the
prcjram schedule of any television station carried on the
cable system unless carriage of specific programming is
prohibited, and other programming authorized to be
substituted", under FCC regulations.
53. Section 614(b)(6) provides that "[e]ach signal
carried in fulfillment of the carriage obligations of a
cable operator under this section shall be carried on the
cable system channel number on which the local commercial
television station is broadcast over the air, or on the
channel on which it was carried on July 19, 1985" --the day
the FCC's original must carry rules were struck down as
unconstitutional --"or on the channel on which it was carried
on January 1, 1992, at the election of the station".
54. Section 614(b)(10) provides that a cable
operator "shall not accept or request monetary payment or
other valuable consideration in exchange either for carriage
of local commercial television stations in fulfillment of
the requirements of this section or for the channel
positioning rights provided to such stations under this
section".
55. Under Section 614(c), if there are not enough
signals of "full power local commercial television stations"
to "fill the channels set aside" under Section 614(b), an
operator having 35 or fewer "usable activated channels" is
-29-
required to carry one qualified low power television
station, and an operator having more than 35 "usable
activated channels" is required to carry two qualified low
power television stations.
56. Under Section 614(d), the FCC is given
authority to order a cable operator to carry, or to
reposition, a commercial broadcast television station in
accordance with the other provisions of Section 614 upon
complaint of the station.
b. Noncommercial Station Must Carry Obliaations
57. Section 615(a) provides that "[i]n addition to
the carriage requirements set forth in section 614, each
cable operator of a cable system shall carry the signalsof
qualified noncommercial educational television stations in
accordance with the provisions of this section".
58. Under Section 615(b)(2)(A), operators of cable
systems with 12 or fewer channels "shall be required to
carry the signal of one local noncommercial educational
television station". Section 615(b)(2)(B) provides that, if
there is no such station locally available, the operator
"shall import and carry on that system" the signal of such a
station from another community.
59. Under Section 615(b)(3), operators of cable
systems with 13 to 36 channels must carry the signals of at
least one, and as many as three, local noncommercial
-30-
educational television stations. Section 615(b)(3)(B)
provides that, if no such station is locally available, the
system "shall import and carry on that system" the signal of
such a station from another community.
60. Section 615(c) provides that "all cable
operators shall continue to provide carriage to all
qualified local noncommercial education television stations
whose signals were carried on their systems as of• March 29,
1990", even if that means carrying a greater number of local
noncommercial stations than the cable operator would
otherwise be required to carry under Section 615.
61. Section 615(g)(1) requires a cable operator to
transmit the signal of local noncommercial educational
television stations "in its entirety".
62. Section 615(g)(5) provides that "[e]ach signal
carried in fulfillment of the carriage obligations of a
cable operator under this section shall be carried on the
cable system channel number on which the qualified local
noncommercial educational television station is broadcast
over the air, or on the channel on which it was carried on
July 19, 1985," --the day when the FCC's original must carry
rules were struck down as unconstitutional --"at the election
of the station".
63. Section 615(i)(1) provides that a "cable
operator shall not accept monetary payment or other valuable
-31-
consideration in exchange for carriage of the signal of any
qualified local noncommercial educational television station
carried in fulfillment of the requirements of this section".
64. Section 615(j) gives the FCC authority to
order a cable operator to offer the signal of a qualified
noncommercial educational television station in compliance
with the other provisions of Section 615.
c. The Retransmission Consent Provisions
65. Section 6 of the 1992 Cable Act amends
Section 325 of the Communications Act of 1934 (codified
at 47 U.S.C. § 325) (the "retransmission consent
provisions").. Under Section 325(b)(1), as amended, "no
cable system or ether. multichannel video programming
distributor shall retransmit the signal of a broadcasting
station, or any part thereof, except . . . with the express
authority of the originating station; or . . . pursuant to
Section 614, in the case of a station electing, in
accordance with this subsection, to assert the right to
carriage under such section". If a station elects
retransmission consent treatment under Section 325(b)
instead of must carry treatment under Section 614, a cable
operator may not carry that station's signal without the
station's permission.
-32-
66. Upon information and belief, stations electing
retransmission consent treatment will withhold their consent
unless the cable operator pays them a substantial fee.
67. Upon information and belief, only the most
popular, influential and powerful stations will be in a
position to elect retransmission consent treatment. Upon
information and belief, such stations will attempt to
extract substantial payments from cable operators, including
plaintiff, for the right to retransmit their programming.
On information and belief, cable operators will generally be
unwilling to pay a fee for less popular stations, leaving
those stations no choice but to opt for must carry
treatment.
2. The PEG Provisions of the 1984 and 1992 Cable
Acts
68. Section 611 of the 1984 Cable Act permits
municipal franchising authorities to require the cable
operators they regulate to set aside channel capacity for
public, educational or governmental ("PEG") uses (the "PEG
provisions"). Section 611(b) provides, inter alia, that "a
franchising authority may in its request for proposals
require as part of a franchise . . . that channel capacity
be designated for public, educational, or governmental use".
There is no statutory limitation upon the number of PEG
channels that a franchising authority may require.
-33-
69. Section 7(b) of the 1992 Cable Act amends
Section 621(a) of the 1984 Cable Act. As amended, Section
621(a)(4)(B) provides that a franchising authority "may
require adequate assurance that the cable operator will
provide adequate public, educational, and governmental
access channel capacity, facilities, or financial support".
70. Section 611(e) of the 1984 Cable Act also
provides, inter Alia, that "a cable operator shall not
exercise any editorial control over. any public, educational,
or governmental use of channel capacity".
71. Section 25 of the 1992 Cable Act expressly
limits the portion of channel capacity that a direct
broadcast satellite ("DBS") service must reserve for
educational or informational use. While 4 to 7 percent of a
. DBS service must be reserved for such uses, cable operators,
in contrast, are subject to potentially limitless
requirements. Section 25 of the 1992 Cable Act, in
conjunction with Section 611 of the 1984 Cable Act, targets
cable operators and dimihishes their ability to speak while
favoring the speech of DBS services.
72. The PEG requirements imposed on DBS operators
by the 1992 Cable Act are less onerous than the requirements
the Act permits municipal authorities to impose upon cable
operators. In addition, no PEG or similar requirements are
-34-
imposed upon other providers of video programming, including
SMATV and MMDS systems and broadcast television stations.
73. By requiring DBS operators to dedicate from 4
to 7 percent of their channel capacity to noncommercial
programming of an educational or informational nature,
Section 25 limits opportunities of programmers, like HBO, to
communicate to or through DBS operators by limiting the
number of DBS channels available. DES services may not have
sufficient channel space to offer HBO.
3. The Leased Access Provisions of the 1984 and
1992 Cable Acts
74. Section 612 of the 1984 Cable Act requires
cable operators to set aside a substantial portion of their
channels for lease to unaffiliated programmers (the "leased
access provisions"). Section 612(b)(1) of the 1984 Cable
Act provides, inter alia, that "a cable operator shall
designate channel capacity for commercial use by persons
unaffiliated with the operator".
75. Section 612(b)(1)(A)-(C) of the 1984 Cable Act
requires cable operators to designate their channels for
leased access use as follows:
A. "an operator of any cable system with 36 or
more (but not more than 54) activated
channels shall designate 10 percent of such
channels which are not otherwise required for
use (or the use of which is not prohibited)
by Federal Law or regulation";
-35-
B. "an operator of any cable system with 55 or
more (but not more than 100) activated
channels shall lesignate 15 percent of such
channels which are not otherwise required for
use (or the use of which is not prohibited)
by Federal Law or regulation"; and
C. "an operator of any cable system with more
than 100 activated channels shall designate
15 percent of all such channels".
76. Section 612(c)(2) of the 1984 Act also
provides that with respect to leasing channels: "A cable
operator shall not exercise any editorial control over any
video programming provided pursuant to this section or in
any other way consider the content of such programming,
except that an operator may consider such content to the
minimum extent necessary to establish a reasonable price for
the commercial use of designated channel capacity by an
unaffiliated person."
77. The challenged legislation does not impose
leased access requirements upon SMATV and MMDS systems,
C -band distributors, DBS operators or other providers of
video programming.
78. As originally. enacted, Section 612(c)(1) of
the 1984 Cable Act permitted the cable operator to establish
the price, terms and conditions upon which it would lease
channels. Section 9 of the 1992 Cable Act amends
Section 612(c) of the 1984 Act by adding Section 612(c)(4).
Section 612(c)(4)(A) authorizes the FCC to "determine the
maximum reasonable rates that a cable operator may
-36-
establish . . . for commercial use". As amended,
Section 612(c)(4)(A) also authorizes the FCC to "establish
reasonable terms and conditions" for commercial access
carriage agreements.
79. As originally enacted, Section 638 of the 1984
Cable Act exempted cable operators from criminal and civil -
liability with respect to obscene matters that they were
compelled to carry on PEG or leased access channels.
Section 10(d) of the 1992 Cable Act amends Section 638 so as
to eliminate this exemption from criminal and civil
liability if a program "involves obscene materials".
80. Thus, under Section 638, as amended, a cable
operator is exposed to criminal prosecution or civil
liability as to obscene programming created by others that'
the PEG and leased access provisions require the operator to
carry. Section 10(a) of the 1992 Cable Act purports to
resolve this problem with respect to leased access
programming by amending §612(h) of the 1984 Cable Act to
permit a cable operator to prohibit or restrict indecent
matter on leased access channels. This power does not
extend to PEG programming. As to leased access programming,
it requires the cable operator to risk civil liability to an
aggrieved leased access programmer, or criminal or civil
liability under obscenity laws, if its decisions should
later be determined to have been incorrect. As to PEG
-37
programming, the operator cannot even attempt to protect
itself from such liability.
81. Neither the 1992 Cable Act nor any other law
imposes leased access requirements upon SMATV or MMDS
systems, DBS operators or other providers of video
programming.
4. The Free Preview Restriction Provision of the
1992 Cable Act
82. Section 15 of the'1992 Cable Act (the "free
preview restriction" provision) provides, inter alia: "If a
cable operator provides a premium channel without charge to
cable subscribers who do not subscribe to such premium
channel, the cable operator shall, not later than 30 days
before . . . notify all cable subscribers when the cable
operator plans to offer a premium channel without charge."
83. Section 15 defines the term "premium channel"
as "any pay service offered on a per channel or per program
basis, which offers movies rated by the Motion Picture
Association of America as X, NC -17, or R."
84. By its terms, Section 15 is unconstitutionally
overbroad in that it requires cable operators to give notice
when free programming of a premium channel will be offered,
whether or not the movies or programs intended to be offered
free of charge in the preview to the subscribers include
materials rated X, NC -17 or R. Likewise, the Joint
-38-
Explanatory Statement of the Committee of Conferences
contains no reference to any prerequisite that those
programs in fact contain indecent or offensive material in
order for cable operators to be precluded from providing
free previews without first giving notice.
85. The free preview restriction provision
impermissibly sweeps into its ambit all speech--the type
that Congress may have a legitimate interest in keeping from
certain viewers, such as children, and the type it most
certainly does not. The provision is further overbroad on
its face by requiring cable operators to "notify All cable
subscribers that the cable operator plans to provide a
premium channel without charge" (emphasis added), without
regard to whether those subscribers already subscribe to the
premium channel.
86. The challenged legislation does not impose the
same requirements upon SMATV and MMDS systems, C-band
distributors, DBS operators or other providers of video
programming.
B. Irreparable Injury to TWE as a Result of the
Must Carry. Retransmission Consent and Free Preview
es
ov s
o s
Leased Access Provisions of the 1984 Cable Act.
1. Irreparable Iniury•to TWE as a Cable Operator
87. Individually and together, the must carry,
retransmission consent and free preview restriction
provisions of the 1992 Cable Act and the PEG and leased
access provisions of the 1984 Cable Act unconstitutionally
infringe the plaintiff's First Amendment rights as a cable
operator to exercise editorial discretion in determining
which programs to offer to its subscribers. Because these
provisions, individually and t...dether, abridge plaintiff's
First Amendment rights, irreparable injury is presumed under
law.
88. The must carry provisions of the 1992 Cable
Act abridge plaintiff's First Amendment rights by forcing it
to serve as a "passive conduit" for the speech of others.
The must carry provisions completely eliminate plaintiff's
constitutionally protected editorial discretion to determine
which broadcast stations to offer to its subscribers. Like
the must carry rules promulgated by the FCC that were struck
down by the United States Court of Appeals for the District
of Columbia Circuit in Quincy, 768 F.2d at 1454, the must
carry provisions of the 1992 Cable Act "coerce speech; they
-40-
require the operator to carry the signals of local
broadcasters regardless of their content and irrespective of
whether the operator considers them appropriate programming
for the community it serves". Ouincy, 768 F.2d at 1452.
The must carry provisions of the 1992 Cable Act are far more
intrusive and draconian than the unconstitutional FCC rules.
89. Implementation of the must carry provisions,
which are self-executing, will cause irreparable injury to
TWE in its capacity as a cable operator in at least the
following additional respects:
(a) The provisions will require cable systems of
TWC to carry an average of approximately 8 commercial
and noncommercial broadcast stations, some of which t!2
cable systems certainly do not wish to carry. For
example, in its Canton, Ohio system, TWC may be
required to carry a religious broadcast station that it
does not currently carry and does not wish to carry.
And, in its Staten Island, New York system, TWC will be
required to carry approximately 17 commercial stations,
two of which are based in Bridgeport, Connecticut
(which is located 70 miles away and has very little, if
anything, in common with Staten Island). And in its
Keene, New Hampshire System, TWC will not only be
required to add 7 broadcast channels, but to accomplish
-41-
this, it would also have to purchase and use expensive
converter boxes, which it is not now required to use.
(b) Because much of the channel capacity of TWC's
cable systems is already in use for other programming
services, the must carry provisions will require TWC to
displace a substantial number of existing services in
favor of commercial and noncommercial broadcast
stations that TWC systems would not otherwise carry.
In addition, TWC will be inhibited from offering new,
innovative services such as the Cartoon Network, which
began operating October 1, 1992 and Sci-Fi Channel,
which began operating on September 24, 1992. TWC's
cable service will be madam less competitive with other
media thereby, and the consumer appeal of and
subscriber satisfaction with TWC's cable service will
be diminished.
(c) There are no noncommercial educational
television stations operating in several of the
communities served by TWC cable systems. In each of
these communities, TWC will be required to import
distant signals from other localities, regardless of
whether local subscribers have any interest in
receiving such programming and regardless of TWC's
judgment concerning the desirability or appeal of such
programming.
-42-
(d) The must carry provisions will also place TWC
cable systems at a disadvantage in competition with
other providers of multichannel video programming
services that are not constrained by must carry
obligations. Under the must carry provisions, TWC will
be forced to carry the programming of commercial and
noncommercial broadcast television stations regardless
.of its appeal to or suitability for audiences in the
areas served by TWC cable systems, and other, more
popular programming may be displaced. Because
individual cable systems have a limited number of
channels available, these provisions take channels from
the cable operators that they could otherwise use in
their best editorial judgment. Competitors such as
SMATV, MMDS and DBS operators and C -band distributors
will not be constrained by the must carry provisions.
Because viewership of broadcast television programming
has steadily eroded in recent years, TWC's cable
systems will be placed at a substantial competitive
disadvantage compared to multichannel competitors not
bound by those provisions since they will have lost
channels that could have provided programming
specifically released for their audiences.
90. The PEG provision of the 1984 Cable Act
irreparably injures TWC's cable systems by enabling a
-43-
franchising authority to require those systems to surrender
channel capacity fcr such uses without setting any limit on
the number of channels that the authority can so designate
and by enabling municipal authorities to require
"assurances" that such PEG requirements will be complied
with. For example, in Ithaca, New York, the franchise
authority requires TWC's local system, which has
60 channels, to offer up to 9 PEG channels. The PEG
provisions give the franchising authority control over the
content of the programs thus exhibited and expressly
displace TWC's editorial discretion. Further, because the
PEG provisions enable municipal officials to require TWC to
carry governmental channels, they force TWC to carry
government speech that TWC may not wish to carry to
subscribers who may not wish to receive it, and they enable
government officials to displace TWC's chosen messages with
their own messages.
91. In addition, by subjecting providers of DBS
service to far less stringent PEG requirements than cable
operators are subjected to under the 1984 Cable Act, the
1992 Cable Act causes irreparable injury to TWC's cable
systems by placing them at a competitive disadvantage by
favoring DBS speech over that of TWC.
92. The leased access provisions compel plaintiff
to publish the speech of others, expressly abrogating the
-44-
editorial discretion of plaintiff's cable systems and
forcing plaintiff to be identified with messages it does not
}
wish to convey.
93. By compelling plaintiff to yield control of a
substantial portion of its channel capacity to unaffiliated
programmers, the leased access provisions irreparably injure
plaintiff by impairing its ability to offer programming
created by others or by itself that it would prefer to
convey and that plaintiff believes its viewers would prefer
and by limiting its ability to offer its own programming.
94. By permitting the FCC to regulate the price,
terms and conditions of channel leases, Section 9 of the
1992 Cable Act irreparably injures plaintiff by subjecting
it to regulation from which its non -cable competitors are
exempt and by placing business control of its communications
assets in the hands of government officials.
95. Taken together, the must carry, retransmission
consent, PEG and leased access provisions of the challenged
legislation irreparably injure plaintiff by requiring it to
relinquish editorial and business control of a substantial
portion of the cable channels that enable it to communicate.
The average TWC system has approximately 45 channels, is
located in an area having approximately 8 local commercial
and noncommercial broadcast stations and is required by
franchise to provide approximately 2 PEG channels. The
-45-
Cable Act, therefore, would require TWC to relinquish
editorial and business control of over 30% of its channels
(approximately 8 must carry channels, approximately 2 PEG
channels and approximately 4 leased access channels).
96. The provision of Section 10(d) of the 1992
Cable Act that repeals the immunity from criminal and civil
liability with respect to obscene programming carried on PEG
and leased access channels, causes irreparable injury to TWC
by subjecting it to the risk of criminal and civil liability
for programming created by others that it does not wish to
carry but is required by law to carry. The provisions of
Section 612(h) of the Cable Act permitting TWC to prohibit
or restrict indecent programming does not alleviate such
injury in that they compel TWC to determine obscenity and
similar questions that even Federal courts regard as
exceedingly difficult, and TWC remains exposed to criminal
or civil liability if a court later disagrees with its
determination. Further, these provisions provide no
protection whatever as to obscene programming TWC may be
required to carry on PEG channels. At least one TWC cable
system has already been obligated to hire employees to
screen programs for obscenity, even though it did not choose
to offer these programs, and would prefer not to do so.
97. The free preview restriction provision of the
1992 Cable Act burdens TWC's First Amendment right to use
-46-
editorial discretion to select which programs or stations to
include in the array of programming it offers to its
subscribers.
98. Implementation of the free preview restriction
provision, which is self-executing, will cause irreparable
injury to TWE in its capacity as a cable operator, in at
least the following additional respects:
(a) The provisions of Section 15 infringe upon
TWC's editorial capacity by directly limiting when TWC
may provide a certain type of programming. By
requiring TWC to give 30 days' notice before it can
provide a premium channel to a nonsubscriber of that
channel, Section 15, in effect, places a waiting period
on TWC's speech. The restrictions of Section 15 will
also make it more costly for TWC to offer free previews
of premium services. It will be very expensive to
block such previews from objecting customers. The
practical result of the mandated waiting period will be
to discourage if not prevent cable operators from
providing free premium programming. TWC provides free
previews of premium channels such as HBO, among other
reasons, to attract those TWC customers that do not
subscribe to those premium channels. Because of the
imposition in Section 15 of onerous, expensive and
overbroad notice requirements, TWC will not likely
-47-
offer the free premium channels as a promotional tool.
TWC's customers are less likely, therefore, to
subscribe to TWC's premium channels, which they
otherwise may well have wanted to receive. This effect
appears to be created by the statute whether or not the
previews contain any objectionable material so long the
premium service carries R-rated material at another
time.
(b) Because Section 15 does not apply to other
competitors such as SMATV and MMDS systems, C -band
distributors or DBS operators, TWC's non -cable
competitors would apparently be free to provide free
premium channels to their subscribers without the
burdensome notice requirements. Cable programmers are
likely to want to deal with those operators, rather
than TWC, to TWC's competitive disadvantage. Other
cable operators that do not provide "premium channels",
as that term is defined in Section 15, will likewise be
placed at a competitive advantage over TWC.
(c) In addition, by not subjecting TWC's
competitors to free previ=w restrictions to which TWC
is subjected, the 1992 Cable Act causes irreparable
injury to TWC's cable systems by favoring the speech of
TWC's competitors over that of TWC.
2. Irreparable Injury to TWE as a Proarammer
-48-
99. The must carry, retransmission consent, PEG
and leased access provisions also cause irreparable injury
to plaintiff in its capacity as a programmer in the
following respects, among others:
(a) By compelling cable operators to devote
channel capacity to broadcast, PEG and leased access
programming that they would not otherwise carry, these
provisions sharply diminish the number of cable
channels on which TWE programming can be carried.
These restrictions therefore sharply curtail
opportunities to communicate information and
entertainment that would otherwise be available to HBO
and to other programming services such as Comedy
Central and Court TV. These restrictions also curtail
Warner Bros. ability to syndicate its television
programs or to gain access to channels for pay-per-view
performances of its motion pictures.
(b) HBO is currently introducing "multiplexing"
of its program services. With multiplexing, the HBO
Service is exhibited to subscribers on two or three,
and the Cinemax Service on two, different channels,
generally at no additional charge, using differentiated
scheduling so that different types of programs appear
on each of the channels at any given time.
Multiplexing is an innovative technique, pioneered by
-49-
HBO, that is intended to enhance viewing options,
increase subscriber satisfaction and enhance HBO's
ability to compete with other sources of programming.
The ability of cable operators to make additional
channels available is crucial to the success of
multiplexing. By diminishing such available channel
capacity, the challenged legislation impairs HBO's
ability to engage in multiplexing, thereby diminishing
the viewing options available to HBO subscribers,
reducing subscriber satisfaction and impairing HBO's
effectiveness as a competitor.
100. Individually and together, the must carry,
retransmission consent, PEG and leased access provisions
threaten especially severe and irreparable injury to Comedy
Central, Court TV and other recently developed non -premium
program services in which TWE or an affiliate has an
interest. Such services obtain revenues from license fees
paid by distributors such as cable operators for the right
to exhibit the programming to their subscribers and from
fees paid by advertisers who sponsor programs on the
service. Because license fees and advertising revenues
depend upon the number of persons who are able to view the
service, it is crucial to the viability of such a service
that it persuade as many operators as possible to offer the
service to their subscribers.
-50-
101.. Since they were launched in April and July
1991, respectively, Comedy Central a.zd Court TV have
attracted approximately 22 million and 6.2 million
subscribers, respectively. Each needs millions of
additional subscribers to attain economic viability. By
requiring cable operators to devote to must carry broadcast
stations, PEG channels and leased access programming channel
capacity that would otherwise be available to Comedy
Central, Court TV or other non -premium programming services
in which TWE has an interest, the challenged legislation
deprives such services of vital opportunities to gain
additional distribution. By giving broadcast television
stations preferred status both as to carriage and as to
channel position, the must carry provisions will also
deprive such services of opportunities to gain additional
advertising revenues, and they will instead divert such
revenues to broadcast interests.
IV. PROVISIONS THAT DISCRIMINATE AGAINST A NARROW
CLASS OF VERTICALLY INTEGRATED CABLE SPEAKERS: THE
STANDARDIZED TERMS AND CONDITIONS, EXCLUSIVE LICENSE AND
VERTICALLY INTEGRATED SERVICE PROVISIONS
A. The Statutory Scheme
1. The Standardized Terms and Conditions
provisions
102. Section 19 of the 1992 Cable Act amends the
Communications Act of 1934 by adding Section 628 (the
"standardized terms and conditions provisions"). Among
other things, Section 628(b) purports to require the FCC to
establish regulations to govern the licensing of programming
by programmers in which a cable operator has an attributable
interest. These standardized terms and conditions
provisions and the regulations they require do not apply to
other programmers.
103. Section 628(c) prescribes certain minimum
requirements that the FCC regulations must satisfy.
Section 628(c)(2)(B) requires the FCC regulations to
"prohibit discrimination by a satellite cable programming
vendor in which a cable operator has an attributable
interest or by a satellite broadcast programming vendor in
the prices, terms, and conditions of sale or delivery of
satellite cable programming or satellite broadcast
programming among or between cable systems, cable operators,
or other multichannel video programming distributors, or
-52-
their agents or buying groups", with certain limited
exceptions.
104. Section 628(d) authorizes the FCC to
adjudicate actions brought by m[a]ny multichannel video
programming distributor aggrieved by conduct that it alleges
constitutes a violation" of Section 628(b) or the
regulations promulgated thereunder.
105. Section 628(e) authorizes the FCC, in an
adjudicatory proceeding commenced pursuant to
Section 628(d), "to establish prices, terms, and conditions
of sale of programming to the aggrieved multichannel video
programming distributor" and to order other "appropriate
remedies".
106. The regulations to be promulgated by the FCC
pursuant to Section 628 would deprive cable programming
vendors that are affiliated with cable operators of the
ability to determine freely the prices, terms and conditions
on which they will disseminate their programming, will
subject such prices, terms and conditions to extensive
federal regulation and could potentially require such
programmers to sell their services to cable operators and
other distributors even if they do not wish to sell their
services to, or offer their services to subscribers through,
such persons.
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107. Neither Section 628(b) nor the regulations
that the FCC is directed to promulgate thereunder apply to a
satellite cable programming vendor that is unaffiliated with
a cable operator.
2. The Exclusive License Provisions
108. Section 19 of the 1992 Cable Act adds
Section 628 to the Communications Act of 1934. Section 628
contains various provisions that limit the ability of
programmers that are vertically integrated with cable
operators to enter into exclusive licenses with cable
operators (the "exclusive license provisions").
109. Section 628(c)(2)(C) directs the FCC to
promulgate regulations that will "prohibit practices,
understandings, arrangements, and activities, including
exclusive contracts for satellite cable programming or
satellite broadcast programming between a cable operator and
a satellite cable programming vendor or satellite broadcast
programming vendor, that prevent a multichannel video
programming distributor from obtaining such programming from
"any satellite cable programming vendor in which a cable
operator has an attributable interest for distribution to
persons in areas not served by a cable operator as of the
date of enactment of this section".
110. Under the regulations required to be
promulgated under Section 628(c)(2)(C), a satellite cable
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programming vendor in which a cable operator has an
"attributable interest" will be prohibited from entering
into an exclusive license agreement with any cable operator
if the effect of the exclusivity feature of such agreement
would be to bar the programmer from distributing its
programming in any area "not served by a cable operator" as
of October 5, 1992. Such regulations would also abrogate
all existing exclusive licenses to the extent they confer
exclusive rights with respect to uncabled areas. Satellite
cable programming vendors that are not affiliated with a
cable operator would not be subject to such restrictions.
. 111. As added by Section 19 of the 1992 Cable Act,
Section 628(c)(2)(D) also directs the FCC to promulgate.
regulations that will, "with respect to distribution to
persons in areas served by a cable operator, prohibit
exclusive contracts for satellite cable programming or
satellite broadcast programming between a cable operator and
a satellite cable programming vendor in which a cable
operator has an attributhble interest or a satellite
broadcast. vendor in which a cable operator has an
attributable interest, unless the Commission
determines . . . that such contract is in the public
interest". Under Section 628(h), certain existing exclusive
contracts will be "grandfathered" and thus exempt from such
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regulations, but other existing contracts will be subject to
them.
112. Section 628(c)(4) directs that in determining
"whether an exclusive contract is in the public interest",
the FCC "shall consider" the following factors "with respect
to the effect of such contract on the distribution of video
programming in areas that are served by a cable operator:
"(A) the effect of -such exclusive contract on the
development of competition in local and national
multichannel video programming distribution markets;
"(B) the effect of such exclusive contract on
competition from multichannel video programming
distribution technologies other than cable;
"(C) the effect of such exclusive contract on the
attraction of capital investment in the production and
distribution of new satellite cable programming;
"(D) the effect of such exclusive contract on
diversity of programming in the multichannel video
programming distribution market; and
"(E) the duration of the exclusive contract."
113. Under Section 629(c)(2)(D), a satellite cable
programming vendor in which a cable operator has an
"attributable interest" will be able to enter into an
exclusive license agreement with a cable operator as to any
"areas served by a cable operator" only with the permission
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of the FCC. Satellite cable programming vendors that are
not affiliated with a cable operator will not be subject to
such a restriction.
114. Exclusive licensing agreements are important
in the distribution of news, information and entertainment.
Each media speaker, whether a newspaper, a broadcast
television station, a satellite cable programming network or
a cable operator, strives to differentiate itself from other
sources of news, information and entertainment by entering
into exclusive license agreements to ensure that the
material it offers will not be duplicated by other outlets.
Exclusive arrangements are also valuable in spurring the
development of new program services.
115. Section 628(c)(2)(C) and (D) deny to satellite
cable programming vendors in which a cable operator has an
"attributable interest" the benefits of exclusive licensing
arrangements that are freely available to other
disseminators of news, information and entertainment,
including satellite cable programming vendors in which a
cable operator does not have an "attributable interest",
with which the class of speakers that Congress has singled
out compete.
3. The Vertically Integrated Service Provisions
116. Section 11 of the 1992 Cable Act amends
Section 613 of the Communications Act of 1934 (codified at
-57-
47 U.S.C. § 533) by adding subsection 613(f)(1).
Sec.:ion 613(f)(1)(B) directs the FCC to conduct a proceeding
"to prescribe rules and regulations establishing reasonable
limits on the number of channels on a cable system that can
be occupied by a video programmer in which a cable operator
has an attributable interest" (the "vertically integrated
service provision").
117. Section 613(f)(1)(B) does not specifically
require the FCC to limit the number of channels that may be
occupied by•a vertically integrated service only with
respect to those cable operators with which the service is
affiliated. The provision arguably permits the FCC to
prescribe limits on the extent to which any cable operator
may carry any vertically integrated service.
118. The rules and regulations required to be
promulgated pursuant to Section 613(f)(1)(B) would not limit
the ability of a cable operator to offer to its subscribers
the programming of programming vendors in which a cable
operator does not have an "attributable interest".
119. However ultimately framed by the FCC, the
rules and regulatthns required to be pr'mulgated would limit
the ability of cable operators to offer particular
programming services to their subscribers merely because a
cable operator --and, under Section 613(f)(1)(B), not
necessarily the cable operator that is offering the
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service --has an "attributable interest" in such programming
service.
120. However ultimately framed, the rules and
regulations to be prescribed by the FCC pursuant to
Section 613(f)(1)(B) would limit the ability of cable
programming services in which a cable operator has an
"attributable interest" to disseminate their program
services to cable operators and their subscribers who would
otherwise be willing and able to receive such
communications.
121. Programmers in which a cable operator does not
have an "attributable" interest will not be subjected to any
such restrictions.
B. Irreparable Injury to TWE as a Result of the
Standardized Terms and Conditions. Exclusive License and
Vertically Integrated Services Provisions
122. TWE is a vertically integrated programmer in
that it owns both cable systems and programming services.
The standardized terms and conditions provisions, the
exclusive license provisions and the vertically integrated
services provisions would therefore apply to TWE.
123. Many of TWE's principal competitors in the
production and distribution of video programming are not
vertically integrated. For example, The Disney Channel,
Arts & Entertainment, CNBC, ESPN, Fox Net, The Nashville
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Network, the Playboy Channel, and USA Network are all
popular programming services owned by companies which, on
information and belief, do not have any corporate
affiliation with any cable operator within the meaning of
the Cable Act. Such programmers will be -able to compete
with the program services that TWE owns or in which it or an
affiliate has an interest (including the HBO Service,
Cinemax, E! Entertainment Television, Sunshine Network,
Comedy Central, Courtroom Television Network, BET, CNN,
Headline News, WTBS and TNT) free of the challenged
restrictions and will thereby stand to gain great
competitive advantages over such services, irreparably
injuring TWE.
124. The standardized terms and conditions
provisions will irreparably injure plaintiff by depriving
programming services in which TWE has an attributable
interest of the power to determine the prices, terms and
conditions on which they will disseminate their programming
and, potentially, depriving such services of the power to
choose to which distributors and, ultimately, to which
audiences they will communicate their programming.
125. The standardized terms and conditions
provisions will irreparably injure plaintiff to the extent
that they are construed to enable DBS, SMATV and MMDS
operators, C -band distributors and other distributors of
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video programming to offer programming of vertically
integrated cable programmers that they might not otherwise
be able to obtain, thus diminishing TWC's ability to
differentiate its service offerings from those of such
competitors.
126. The exclusive license provisions will deprive
HBO of the ability to enter into exclusive licensing
agreements for its existing or new program services. HBO
will thereby be deprived of the ability to enhance the
value, reputation and consumer appeal of its program
services through exclusive licenses, to its irreparable
injury.. This will diminish HBO's ability to communicate
with the public.
127. The exclusive license provisions will also
impede the creation of new programming services by cable
operators like TWC, who have historically been among the
most important creators of such programming. Any new
programming created by cable operators will, by definition,
have attributable cable 'interests, and therefore be subject
to the exclusive license and standardized terms and
conditions provisions of the 1992 Cable Act. Operators will
be reluctant to embark on the financial risks of new program
service creation when their ability to control the
distribution of such services is subject to such intrusive
regulation.
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128. The exclusive license provisions also threaten
irreparable injury to Court TV and other fledgling
programming services in which TWE or an affiliate has an
interest. Exclusive licenses, often used as a means of
spurring the development of a new programming service,
assure a prospective distributor that others will not "free
ride" on the distributor's efforts to promote and sell the
new service. They also encourage distributors to make a
greater investment in promotional and sales efforts by
holding out the possibility of greater returns that
exclusive distributorship of a popular product may permit.
The exclusive license provisions, particularly the
requirement of FCC approval, will impair Court TV's ability
to use exclusive licenses, and the exclusive license
provisions may abrogate some of its existing contracts, all
to its and TWE's irreparable injury.
129. The exclusive license provisions will
irreparably injure plaintiff by rendering it difficult or
impossible for TWC to enter into exclusive licenses with
cable -affiliated programmers, thus impairing TWC's ability
to differentiate itself from non -cable competitors who,
under the Act, remain permitted to have exclusive licenses.
130. The vertically integrated services provisions
will irreparably injure plaintiff (i) by creating
uncertainty, pending the conclusion of the mandated FCC
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rulemaking, as to the extent to which cable operators,
including those that do not have any corporate affiliation
with TWE, may carry HBO and other TWE services simply
because they are offered by a vertically integrated
programmer; (ii) once FCC rules are promulgated, by limiting
the ability of cable operators to continue offering, or to
add to their channel line-ups, the programming services
offered by HBO and other TWE -affiliated program services;
(iii) by creating uncertainty, pending the conclusion of the
mandated FCC rulemaking, as to the extent to which
plaintiff's cable systems may do business with vertically
integrated services (whether or not such services have any
corporate affiliation with plaintiff); and (iv) once FCC
rules are promulgated, by limiting the ability of
plaintiff's cable systems to continue offering, or to add to
their channel lineups, services of vertically integrated
programmers, including program services of or affiliated
with TWE.
131. The vertically integrated services provisions
threaten irreparable injury to plaintiff by (i) constraining
TWC's ability to carry vertically integrated programming
services, which are often among the most popular services
offered; and (ii) requiring TWC to eliminate from the
channel line-ups of certain of its cable systems vertically
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integrated programming services that have proven extremely
popular with subscribers in such systems.
V. PROVISIONS OF THE 1992 CABLE ACT THAT SINGLE
OUT AND DISCRIMINATE. AGAINST CABLE SPEAKERS AND OTHERWISE
IMPINGE ON SPEECH: RATE AND SERVICE CONTENT REGULATION,
LIMITATION OF CABLE OPERATORS' ABILITY TO CREATE
PROGRAMMING, LIMITATION ON NUMBER OF CABLE SUBSCRIBERS AND
EXEMPTION OF GOVERNMENT-OWNED CABLE OPERATORS FROM FRANCHISE
REQUIREMENTS AND DAMAGE AWARDS
A. The Statutory Scheme
1. Rate and Service Content Regulation
132. Section 3 of the 1992 Cable Act amends
Section 623 of the 1934 Communications Act. As amended,
Section 623 submits cable operators to municipal regulation
of the rates they may charge for their basic service
offerings and prescribes the content of certain basic
service offerings (the "rate and service content regulation
provisions").
133. Section 623(a)(2) provides, inter alia, that
if the FCC finds that a cable system is "not subject to
effective competition", then (A) "the rates for the
provision of basic cable service shall be subject to
regulation by a franchising authority, or by the Commission
if the Commission exercises [its] jurisdiction . in
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accordance with the regulations prescribed by the
Commission", and (B) "the rates for cable -programming
services shall be subject to regulation by the Commission".
Section 623(1)(2) defines "cable programming service" to
mean "any video programming provided over a cable system,
regardless of service tier, including installation or rental
of equipment used for the receipt of such video programming,
other than (A) video programming carried on the basic
service tier; and (B) video programming offered on a per
channel or per program basis".
134. Section 623(1)(1) defines the term "effective
competition" to mean that:
"(A) fewer than 30 percent of the households in
the franchise area subscribe to the cable service of a
cable system;
"(B) the franchise area is --
"(i) served by at least two unaffiliated
multichannel video programming distributors each
of which offers comparable video programming to at
least 50 percent of the households in the
franchise area; and
"(ii) the number of households subscribing to
programming services offered by multichannel video
programming distributors other than the largest
multichannel video programming distributor exceeds
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15 percent of the households in the franchise
area; or
"(C) a multichannel video programming distributor
operated by the franchising authority for that
franchise area offers video programming to at least
50 percent of the households in that franchise area."
135. On information and belief, the great majority
of cable systems in the United States, including those
operated by TWC, will be found to lack "effective
competition" under the definition contained in
Section 623(1)(1). As a result, under Section 623(a)(2),
the rates for basic cable service of the great majority of
cable systems in the United States, including TWC's, will be
subject to rate regulation by local franchising authorities
or by the FCC, and the rates for all cable programming
services (as defined) offered by such cable systems will be
subject to FCC regulation.
136. Section 623(b)(1) requires the FCC to
promulgate regulations that will "ensure that the rates for
the basic service tier are reasonable"..
137. Section 623(b)(8) provides that "[a] cable
operator may not require the subscription to any other tier
other than the basic service tier required by
[Section 623(b)(7)] as a condition of access to video
programming offered on a per channel or per program basis",
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and that "[a] cable operator may not discriminate between
subscribers to the basic service tier and other subscribers
with regard to the rates charged for video programming
offered on a per channel or per program basis"..
138. Section 623(c) requires the FCC to promulgate
regulations to establish "criteria" to be used in
"identifying, in individual cases, rates for cable
programming services that are unreasonable", and "procedures
to be used to reduce rates for cable programming services
that are determined by the [FCC] to be unreasonable".
139. Section 623(d) provides that "[a] cable
operator shall have a rate structure, for the provision of
cable service, that is uniform throughout the geographic
area in which cable service is provided over its cable
system".
140. Section 623(b)(7) requires each cable operator
to provide "a separately available basic service tier" which
"shall, at a minimum, consist of" all must carry signals
-required to be carried tinder Section 614 and 615, all PEG
channels required by franchise and "any signal of any
television broadcast station that is provided by the cable
operator to any subscriber", except a station retransmitted
by satellite.
141. Neither Section 623 nor any other law purports
to prescribe the service cfferings or regulate the rates of
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SMATV, MMDS or DBS operators, C -band distributors or cable
systems that have "effective competition" or other
distributors of video programming. Section 623(a)(1) also
exempts from any rate regulation the service offerings of
cable systems that are owned or operated by municipal
authorities. Moreover, the FCC, has only specifically
delegated to state and local authorities the power to impose
such regulations on cable.
2. Limitation of Cable Operators' Ability to
Create Programming
142. Section 11 of the 1992 Cable Act amends
Section 613 of the 1984 Cable Act to add new Section 613(f).
Section 613(f)(1)(C) requires the FCC to consider the
"necessity" of "imposing limitations on the degree to which
multichannel video programming distributors may engage in
the creation or production of video programming".
143. Section 613(f)(1)(C) gives the FCC authority
to limit the creation and production of new programs and
programming services by multichannel video programming
distributors, including cable operators. On information and
belief, cable operators are at present the only multichannel
video programming distributors that engage in production and
creation of programming to any significant degree.
Accordingly, the proposed FCC regulations would, in fact,
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apply only to program creators affiliated with cable
operators.
144. No other program creators in the United States
are subject to such a prospective blanket limitation on
their ability to create and produce news, information or
entertainment.
3. Limitation on Number of Cable Subscribers
145. As added by Section 11 of the 1992 Cable Act,
Section 613(f)(1)(A) directs the FCC to establish
"reasonable limits on the number of cable subscribers a
person is authorized to reach through cable systems owned by
such person, or in which such person has an attributable
interest".
146. Under Section 613(f)(1)(A), the FCC is
obligated to limit the number of subscribers that can
receive information from a given cable operator. Whatever
limitation the FCC ultimately adopts will prevent cable
operators subject to the limit from disseminating
information to additional prospective viewers.
147. The mandated limitation of the number of
subscribers a cable operator may serve will prevent cable
operators and programmers from reaching willing audiences
and will prevent subscribers who wish to receive the
services and programming of cable operators that are subject
to the limit from obtaining them.
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148. The provision concerning limitations on cable
operator size discriminates against cable operators because
of the means of communication they have chosen. There are
no comparable limitations on the number of persons who may
receive or subscribe to newspapers, magazines or other
traditional media vehicles. Limitations on the number of
television stations that can be owned by a given entity have
been upheld only because the electromagnetic spectrum over
which broadcast television signals are transmitted
physically can accommodate only a very limited number of
speakers. There are no similar limitations on the number of
persons who may communicate by means of cable or other
multichannel distribution technologies.
4. exemption of Government -Owned Cable Operators
from Franchise Requirements and Damage Awards
149. Section 7(c) of the 1992 Cable Act amends
Section 621 of the 1934 Communications Act by adding Section
621(f). Section 621(f)(1) provides that nothing in the Act
"shall be construed to prohibit a local or municipal
authoritythat is also, or is affiliated with, a franchising
authority from operating as a multichannel video programming
distributor in the franchise area, notwithstanding the
granting of one or more franchises by such franchising
authority". Section 621(f)(2) provides that nothing in the
Act shall be construed to "require such local or -municipal
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authority to secure a franchise to operate as a multichannel
video programming distributor".
150. By exempting municipally owned cable systems
from franchising requirements, Section 621(f)(2) enables
municipal authorities to compete with the very private cable
operators whom they regulate, and to do so free of the
burdensome terms and conditions that municipal franchises
commonly entail, including the imposition of franchise fees.
Under this provision, municipal authorities may
regulate --and, through the franchise fee, tax --their private
competitors.
151. Section 24 of the 1992 Cable Act amends the
1934 Communications Act by adding Section 635A.
Section 635A(a) provides that "[i]n any court proceeding
pending on or initiated after the date of enactment of this
section involving any claim against a franchising authority
or other governmental entity", including government
officials, "arising from the regulation of cable service or
from a decision . . . with respect to a grant, renewal,
transfer, or amendment of a franchise", the relief "shall be
limited to injunctive relief and declaratory relief". This
provision exempts franchising authorities and their
personnel from any liability in damages for misconduct in
regulating privatecable operators under their jurisdiction.
-71-
152. Sections 621(f) and 635A discriminate in favor
of government speech against private speech, create a grave
risk that government officials will retaliate against
private cable operators for political stances such operators
may take and place government officials in a position to
impair the value of private competitors' business assets for
economic or political purposes with impunity.
B. Irreparable Injury to TWE as a Result of the
Provisions Concernina Rate Regulation. Program Creation,
pumber of Subscribers. and Exemption of Government -Owned
Cable Operators from Franchises and Damages
153. Individually and together, the rate and
service content regulation provisions, the limitation of
cable operators' ability to create programming, the
limitation on the number of cable subscribers, and the
exemption of government-owned video distributors from
franchise requirements and damage awards discriminate
against private cable operators, including plaintiff, simply
because they communicate news, information and entertainment
by means of cable. Such discrimination against a speaker
because of its chosen means of communication violates the
First Amendment. Irreparable injury is, therefore, presumed
under law.
154. The provisions of Section 623(a)(7) which
specify the contents of each cable operator's basic service
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tier override plaintiff's editorial discretion to determine
the contents of such tier, in violation of the First
Amendment. Under law, irreparable injury is presumed. Such
provisions will also irreparably injure plaintiff by
requiring it to offer basic service offerings that it would
not otherwise offer and that do not maximize subscriber
satisfaction.
155. The provisions of Section 623(b)(8), which
prohibit cable operators from structuring their rates for
their premium and pay-per-view services in relation to the
non -premium services that a subscriber purchases, also
impinge on plaintiff's editorial discretion because they
interfere with plaintiff's editorial judgment in valuing
different forms of speech. Government control of the price
a speaker may charge for his speech directly contravenes the
values underlying the First Amendment. That type of
intrusion infringes on the content, quality and quantity of
the speaker. Such provisions also place cable operators,
including plaintiff, at a competitive disadvantage as
against the non -cable distributors of news, information and
entertainment with whom they compete.
156. The provisions of the 1992 Cable Act which
subject essentially all cable operators to extensive rate
regulation as to their lowest -priced and other non -premium
service offerings discriminate against cable operators,
-73-
including plaintiff, simply because they communicate news,
information and entertainment by means of cable. Such
provisions place cable operators, including plaintiff, at a
competitive disadvantage as against the non -cable
distributors of news, information and entertainment with
which they compete. Such provisions place business control
of plaintiff's communications assets in the hands of
government officials.
157. Authorizing local franchise authorities to
regulate rates is especially threatening to plaintiff and
other cable operators because franchise authorities are
given broad discretion in determining what rates are
acceptable for their speech. This broad discretion empowers
franchise authorities with jurisdiction over plaintiff's
cable system to retaliate against systems for political
stances and positions that they have taken or may take by
lowering the system's rates or refusing to permit needed
increases. Such rate regulation will certainly chill cable
operators exercise of their First Amendment right to
criticize local government officials; no matter what regime
of rate regulation the FCC ultimately adopts, local
officials will be left with considerable discretion in
applying those rules. It is simply unrealistic to expect
that a local news channel produced by a cable operator would
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vigorously criticize the very officials who determine the
prices it may charge.
158. By threatening to limit the ability of cable
operators, including plaintiff, to produce and create their
own programming, the program creation provisions of the 1992
Cable Act impermissibly burden and chill plaintiff's First
Amendment right to create and disseminate programming
reflecting its own distinctive point of view.
159. By threatening to limit the number of
subscribers that plaintiff may serve, the provisions of the
1992 Cable Act directing the FCC to prescribe limits on the
number of cable subscribers a given operator may serve will
prevent plaintiff from disseminating information to
prospective viewers, to its irreparable injury. In
addition, those provisions will irreparably injure potential
subscribers to plaintiff's cable service, whom the provision
will bar from receiving it.
160. Plaintiff currently operates cable systems in
at least 10 localities where municipal authorities have
established or have expressed an interest in establishing
municipally owned cable systems. The provisions of Sections
621(f) and 635A will likely encourage other municipalities
in which plaintiff has cable systems to establish such
systems. In such localities, the provisions of Sections
621(f) and 635A threaten plaintiff with irreparable injury
-75-
by subjecting it to regulation, including taxation through
the imposition of franchise fees, by municipal authorities
who are competitors and who are exempt from any damages
remedy for regulatory misconduct. Such provisions confer
upon government officials the power to abuse regulatory
authority for purposes of censoring the communications of
private cable operators or punishing them for stances they
have taken or may take.on political issues, including
franchising issues. Such provisions also cause irreparable
injury to plaintiff by'favoring government officials, and
disfavoring private cable operators, including plaintiff, as
competitors.
Causes of Action
FIRST CAUSE OF ACTION
161. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 160 above as though
fully set forth herein.
162. The must carry and retransmission consent
provisions of the 1992 Cable Act interfere with.the
editorial discretion of plaintiff's cable systems and will
force them to carry stations that they do not wish to carry.
Those provisions will inevitably force cable systems owned
by plaintiff to retransmit programming of a religious,
political, or other nature that is offensive to them or that
they simply do not wish to carry.
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163. The must carry and retransmission consent
provisions of the 1992 Cable Act compel all cable operators
to transmit the signals of local broadcast -television
stations in accordance therewith. Such provisions have the
purpose and effect of discriminating against cable operators
and cable programmers, including plaintiff, in favor of
traditional broadcasting interests.
164. Cable systems have a finite number of channels
available. Many cable operators currently have few or no
channels available for purposes of adding new programming
services.
165. As a result of the must carry provisions,
local broadcast -television stations are likely to occupy
more of the few remaining channels than they would otherwise
occupy, making it more difficult for cable operators to
offer plaintiff's programming services to their subscribers.
Thus, the must carry provisions have the effect of
discriminating in favor of some speakers (local broadcast -
television stations) and against plaintiff in its capacity
as a cable programmer.
166. The channel -positioning provisions of the 1992
Cable Act compel plaintiff to retransmit the signals of a
variety of local broadcast -television stations on channels
on which they would not otherwise retransmit them. As a
result, the channel -positioning provisions interfere with
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the editorial discretion of cable operators, including
plaintiff. Such provisions have the purpose and effect of
discriminating against cable operators and cable
programmers, including plaintiff, in favor of traditional
broadcasting interests.
167. The channel -positioning provisions will
require cable operators to displace cable programming
services, including plaintiff's, from their present channel
positions to less attractive channel positions. Such
provisions have the purpose and effect of discriminating
against cable operators and cable programmers, including
plaintiff, in favor of traditional broadcasting interests.
168. The must carry and retransmission consent
provisions have the purpose and effect of discriminating
against cable operators and cable programmers, including
plaintiff, in favor of traditional broadcasting interests.
169. There is no permissible governmental interest
in favoring one category of speakers, the broadcast -
television industry, over another category of speakers,
cable operators and programmers, that enjoys substantial
First Amendment protection. Alternatively, any permissible
government interest in protecting the broadcast industry is
insufficient to warrant the abridgment of plaintiff's First
Amendment rights entailed by the challenged provisions.
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170. Any permissible governmental interest in
favoring the broadcast television industry can be served by
more narrowly tailored measures that would not abridge
plaintiff's First Amendment rights.
171. Accordingly, the must carry and retransmission
consent provisions violate plaintiff's rights under the
First Amendment to the United States Constitution.
172. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
SECOND CAUSE OF ACTION
173. Plaintiff repeats and realleges the
allegations of paragraphs 1 th�Jugh 172 above as though
fully set forth herein.
174. The must carry and retransmission consent
provisions apply solely to cable operators, including
plaintiff, and not to other multichannel video programming
distributors, including $MATV and MMDS systems, DBS
operators and other providers of programming to owners of
home satellite dishes, all of which compete with cable
operators, including plaintiff. Such provisions therefore
selectively burden cable operators because they have chosen
to exercise their Constitutional rights through the medium
of cable.
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175. The must carry and retransmission consent
provisions operate solely to the benefit of broadcast
television interests and solely to the detriment of cable
operators, including plaintiffs.
176. There is no permissible governmental interest
in discriminating against one category of speakers, cable
operators and programmers, in favor of another category of
speakers, SMATV and MMDS systems, DBS operators, C -band
distributors and other providers of video programming.
There is no permissible governmental interest in favoring
one category of speakers, the broadcast television industry,
over another category of speakers, cable operators and
programmers. Alternatively, any permissible government
interest in such discrimination or such favoritism is
insufficient to warrant the abridgement of plaintiff's First
Amendment rights entailed by the challenged provisions.
177. Any permissible governmental interest in
discriminating against cable operators or in favoring the
broadcast television industry can be served by more narrowly
tailored measures that would not abridge plaintiff's First
Amendment rights.
178. Accordingly, the must carry and retransmission
consent provisions violate plaintiff's rights under the
First Amendment to the United States Constitution.
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179. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
THIRD CAUSE OF ACTION
180. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 179 above as though
fully set forth herein.
181. The retransmission consent provisions of the
1992 Cable Act cannot be severed from the must carry
provisions of that Act, which violate plaintiff's rights
under the First Amendment to the United States Constitution.
Accordingly,.the retransmission consent provisions are also
null and void.
182. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
FOURTH CAUSE OF ACTION
183. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 182 above as though
fully set forth herein.
184. The retransmission consent provisions of § 6
of the 1992 Cable Act will operate solely to the benefit of
a limited class of influential and powerful broadcast
television stations, to the detriment of cable operators and
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other multichannel video programming distributors, including
plaintiff. The purpose and effect of the retransmission
consent provisions is to favor traditional broadcast
interests over cable operators and other emergent
technologies.
185. There is no permissible governmental interest
in favoring one category of speakers, the broadcast -
television industry, over another category of speakers,
cable operators, that enjoys substantial First Amendment
protection. Alternatively, any permissible government
interest in protecting the broadcast industry is
insufficient to warrant the abridgment of plaintiff's First
Amendment rights entailed by the challenged provision.
186. Any permissible governmental interest in
favoring the broadcast television industry can be served by
more narrowly tailored measures that would not abridge
plaintiff's First Amendment rights.
187. Accordingly, the retransmission consent
provisions violate plaintiff's rights under the First
Amendmentto the United States Constitution.
188. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
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FIFTH CAUSE OF ACTION
189. Plaintiff repeats and realleges the
allegations of paragraph 1 through 188 above as though fully
set forth herein.
190. The PEG provisions, of the 1984 Cable Act
unconstitutionally abridge the editorial discretion of cable
operators, including plaintiff, by forcing them to carry PEG
programs, including government speech, that they would not
otherwise carry.
191. The PEG provisions of the 1984 Cable Act
condition plaintiff's right to communicate via cable upon
compliance with PEG requirements imposed by municipal
authorities, and they empower municipal authorities to deny
to plaintiff the right to communicate by cable if plaintiff
declines to offer to its subscribers the PEG programming
messages selected by those authorities. The PEG provisions
therefore impermissibly regulate the content of the news,
information and entertainment that plaintiff may offer to
its subscribers and constitute a standardless, and therefore
impermissible, scheme for licensing speech.
192. By permitting franchising authorities to
require cable operators to dedicate a potentially limitless
part of their channel capacity to PEG uses, Section 611 of
the 1984 Cable Act limits opportunities of programmers,
including plaintiff, to communicate to or through cable
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operators by limiting the number of cable channels
available.
193. There is no permissible governmental interest
served by the PEG provisions that is sufficient to justify
the limitations upon plaintiff's communicative activities
that they entail.
194. The PEG provisions impose far greater
restrictions upon plaintiff's communicative activities than
are necessary to achieve any permissible government
interest.
195. The PEG provisions therefore violate
plaintiff's rights under the First Amendment.
196. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
SIXTH CAUSE OF ACTION
197. Plaintiffs repeats and realleges the
allegations of paragraphs 1 through 196 above as though
fully set forth herein.
198. The leased access provisions of the 1984 Cable
Act unconstitutionally abridge cable operators' editorial
discretion by forcing operators, including plaintiff, to
carry programming they would not otherwise carry.
199. The leased access provisions also
impermissibly burden the First Amendment rights of cable
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operators, including plaintiff, by subjecting the prices
operators may charge for channel leases to government
regulation.
200. By requiring cable operators to set aside a
substantial portion of their channels for lease to
unaffiliated persons, Section 612 of the 1984 Cable Act
limits opportunities of programmers, including plaintiff, to
communicate to or through cable operators by limiting the
number of cable channels available.
201. There is no permissible governmental interest
served by the leased access provisions that is sufficient to
justify the limitations upon plaintiff's communicative
activities that they entail.
202. The leased access provisions impose far
greater restrictions upon plaintiff's communicative
activities than are necessary to achieve any permissible
government interest.
203. The leased access provisions therefore violate
plaintiff's rights under'the First Amendment.
204. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
SEVENTH CAUSE OF ACTION
205. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 204 above as though
fully set forth herein.
206. By requiring DBS operators to dedicate from 4
to 7 percent of their channel capacity to noncommercial
programming of an educational or informational nature,
Section 25 of the 1992 Cable Act limits opportunities of
programmers, including plaintiff, to communicate to or
through DBS operators by limiting the number of DBS channels
available.
207. No permissible governmental interest is
furthered by Section 25. Alternatively, any permissible
governmental interest furthered by Section 25 is
insufficient to warrant the abridgment of plaintiff's First
Amendment rights entailed thereby.
208. Any permissible governmental interest served
by Section 25 can be served by more narrowly tailored
measures that would not abridge plaintiff's rights under the.
First Amendment to the United States Constitution.
209. Section 25 therefore violates plaintiff's
First Amendment rights.
210. Such violation of plaintiff's constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
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EIGHTH CAUSE OF ACTION
211. Plaintiff repeats and realleges the
allegations of paragraph 1 through 210 above as though fully
set forth herein.
212. The must carry and retransmission consent
provisions of the 1992 Cable Act in combination with the PEG
and leased access provisions of the 1984 Cable Act (the
"forced speech provisions") require plaintiff to cede
beneficial use and control of a substantial portion of the
channel capacity that enables plaintiff to communicate to
persons other than plaintiff who are effectively selected by
government officials.
213. The forced speec" provisions result in a
taking of plaintiff's property without just compensation in
violation of the Fifth Amendment to the United States
Constitution.
214. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
NINTH CAUSE OF ACTION
215. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 214 above as though
fully set forth herein.
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216. The free preview restriction provision of the
1992 Cable Act impermissibly prevents cable owners from
providing free to their subscribers without notice premium
channel programs, without regard to whether or not those
programs in fact contain indecent or other offensive
material.
217. The free preview restriction provision of the
1992 Cable Act impermissibly requires burdensome
notification to all cable subscribers, even those that in
fact already subscribe to the premium channel.
218. The free preview restriction provision has the
purpose and effect of eliminating certain cable operators'
First Amendment right to use editorial discretion to select
which programs or stations to offer.
219. There is no permissible governmental interest
in protecting cable subscribers from programs that are not
offensive. Alternatively, any permissible government
interest in so protecting the cable subscribers is
insufficient to warrant the abridgement of plaintiff's First
Amendmentrights entailed by the challenged provisions.
220. Any permissible governmental interest in
protecting cable subscribers from offensive programs can be
served by more narrowly tailored measures that would not
abridge plaintiff's First Amendment rights.
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221. The free preview restriction provision applies
only to cable operators. The provision has the purpose and
effect of discriminating against cable operators, including
plaintiff in favor of all other communications media.
222. There is no permissible government interest in
favoring the speech of other communications media over that
of cable operators.
223. Any permissible governmental interest in
favoring all other communications media can be served by
more narrowly tailored measures that would not abridge
plaintiff's First Amendment rights.
224. Accordingly, the free preview restriction
provision violates plaintiff's rights under the First
Amendment to the United States Constitution.
225. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
TENTH CAUSE OF ACTION
226. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 225 above as though
fully set forth herein.
227. The provisions of Section 10(d) of the 1992
Cable Act which eliminate the former immunity from criminal
and civil liability with respect to obscene programming
required to be carried on PEG and leased access channels
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subject plaintiff to a substantial risk of criminal or civil
liability for engaging in conduct in which other provisions
of law compel plaintiff to engage.
228. The provisions of Section 10(a) of the 1992
Cable Act that permit plaintiff to enforce a policy against
carrying indecent programming on leased access channels do
not adequately alleviate such risk as to leased access
channels and do not alleviate it at all as to PEG channels.
229. By threatening plaintiff with such risk,
Section 10(d) of the 1992 Cable Act impermissibly burdens
and interferes with plaintiff's exercise of its First
Amendment rights as a member of the press.
230. There is no permissible governmental interest
served by compelling plaintiff to speak against its will and
subjecting plaintiff to such liability for communications
that it would prefer not to carry and over which it has no
meaningful control.
231. Any permissible governmental interest served
by such provisions can be served by more narrowly tailored
measures that would not abridge plaintiff's First Amendment
rights.
232. Accordingly, such provisions violate plain-
tiff's rights under the First Amendment to the United States
Constitution.
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233. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury. Plain-
tiff has no adequate remedy of law.
ELEVENTH CAUSE OF ACTION
234. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 233 above as fully set
forth herein.
235. The standardized terms and conditions
provisions of the 1992 Cable Act subject the dissemination
of news, information and entertainment by a small group of
vertically integrated programmers, including plaintiff, to
regulation of the manner in which, including the price,
terms and conditions on which, such persons may disseminate
their products. The standardized terms and conditions
provisions therefore selectively burden the communicative
activities of vertically integrated programmers, including
plaintiff.
236. The standardized terms and conditions
provisions of the 1992 Cable Act may potentially require
vertically integrated programmers, including plaintiff, to
sell their programming on equal terms to all cable operators
and other multichannel video distributors. The standardized
terms and conditions provisions would thus compel such
programmers to engage in speech in instances in which they
would prefer not to.
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237. The standardized terms and conditions
provisions do not serve any permissible governmental
interest sufficient to warrant such selective treatment of
vertically integrated programmers, including plaintiff. The
standardized terms and conditions provisions do not serve
any permissible governmental interest sufficient to warrant
the interference with the right of vertically integrated
programmers, including plaintiff, to determine the persons
to or through whom they will communicate.
238. Any permissible governmental interest served
by the standardized terms and conditions provisions could be
adequately served by more narrowly tailored measures that
would not abridge plaintiff's First Amendment rights.
239. Accordingly, the standardized terms and
conditions provisions violate plaintiff's rights under the
First Amendment.
240. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
TWELFTH CAUSE OF ACTION
241. Plaintiff repeats and realleges the
allegations of paragraph 1 through 240 above as though fully
set forth herein.
242. The exclusive license provisions subject a
small group of vertically integrated programmers, including
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plaintiff, to restrictions on their freedom to disseminate
news, information and entertainment through cable operators
as they see fit, without applying such restrictions to other
speakers.
243. To the extent they require FCC approval of
exclusive license agreements entered into by vertically
integrated programmers, the exclusive license provisions
subject a small group of vertically integrated programmers,
including plaintiff, to an essentially standardless scheme
for licensing speech, to which other disseminators of news,
information and entertainment, including other cable
programmers,. are not subject.
244. There is no permissible governmental interest
that would warrant selective restriction of the ability of
vertically integrated programmers, including plaintiff, to
select the persons or conditions to or through whom they
will distribute news, information and entertainment.
245. Any permissible governmental interest served
by the exclusive license provisions could be adequately
protected by more narrowly tailored measures that would not
infringe plaintiff's First Amendment rights.
246. The exclusive license provisions therefore
violate plaintiff's rights under the First Amendment.
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247. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
THIRTEENTH CAUSE OF ACTION
248. Plaintiff repeats and realleges the
allegations of paragraph 1 through 247 above as though fully
set forth herein.
249. The vertically integrated service provisions
of the 1992 Cable Act threaten to impose limitations upon
plaintiff's ability to disseminate its programming services
that will not be imposed upon speakers that are not
vertically integrated. Those provisions selectively target
a small group of vertically integrated speakers for
restrictions upon their ability to communicate that are not
applied to other speakers.
250. By requiring cable operators to limit the
number of vertically integrated program services that they
carry, the vertically integrated services provision impairs
the ability of plaintiff's programming services -to
disseminate news, information and entertainment to willing
recipients.
251. By limiting the number of vertically
integrated services that plaintiff's cable systems can offer
to their subscribers, the vertically integrated services
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provisions override plaintiff's editorial discretion in
determining its service offerings.
252. As a result of the vertically integrated
service provisions, cable programmers owned by plaintiff
will be unable to speak through .cable operators owned by
plaintiff.
253. The vertically integrated service provisions
do not serve any government interest sufficient to warrant
the burdens upon plaintiff's ability to communicate with
willing audiences that they entail.
254. Any permissible governmental interests served
by the vertically integrated service provisions can be
adequately served by more narrowly tailored measures that do
not abridge plaintiff's First Amendment rights.
255. The vertically integrated service provisions
violate plaintiff's rights under the First Amendment.
256. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
FOURTEENTH CAUSE OF ACTION
257. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 256 above as though
fully set forth herein.
258. The rate and service content regulation
provisions of the 1992 Cable Act override the editorial
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discretion of cable operators in determining what services
to offer to their subscribers. Those provisions also
subject cable operators to rate regulation from which other
speakers are exempt.
259. The rate and service content regulation
provisions do not serve any permissible government interest
sufficient to warrant the interference with plaintiff's
communicative activities that they entail.
260. Any permissible governmental interest served
by the rate and service content regulation provisions can be
adequately served by more narrowly tailored measures that do
not abridge plaintiff's First Amendment rights.
261. The rate and service content regulation
provisions violate plaintiff's rights under the First
Amendment.
262. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
FIFTEENTH CAUSE OF ACTION
263. Plaintiff repeats and realleges the
allegations of paragraph 1 through 262 above as though fully
set forth herein.
264. The program creation provision of the 1992
Cable Act threatens to bar cable operators, including
plaintiff, from producing or creating video programming.
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This threat of naked restraint upon plaintiff's ability to
produce or create programming is intended to, and does,
chill plaintiff's production, creation and dissemination of
news, information and entertainment.
265. Although facially applicable to all program
creators that are affiliated with any multichannel video
programming distributors, the provision will in fact apply,
and was intended by Congress to apply, only to program
creators that are affiliated with cable operators.
266. There is no permissible governmental interest
sufficient to warrant such an interference with the ability
of cable operators, including plaintiff, to produce and
create video programming. There is no permissible
governmental interest sufficient to warrant preventing cable
operators, but not others, from producing or creating
programming.
267. Any permissible governmental interest served
by such limitation can be adequately served by more narrowly
tailored measures that would not violate plaintiff's First
Amendment rights.
268. The limitation on the ability of cable.
operators to create programming violates plaintiff's rights
under the First Amendment.
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269. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
SIXTEENTH CAUSE OF ACTION
270. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 269 above as though
fully'set forth herein.
271. The limitation an subscriber numbers
provisions of the 1992 Cable Act will limit plaintiff's
ability to disseminate news, information and entertainment
to persons willing to receive such communications from
plaintiff.
272. Such provisions have.the effect of censoring
the views of cable operators and programmers owned by
plaintiff by prohibiting their speech from reaching a
certain segment of the public.
273. There is no permissible governmental interest
sufficient to warrant restricting the number of subscribers
with which plaintiff can communicate.
274. Any permissible governmental interest served
by such a limitation can be adequately served by more
narrowly tailored measures that do not infringe plaintiff's
First Amendment rights.
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•
275. The provisions of the 1992 Cable Act
concerning limitation of the number of subscribers violate
plaintiff's rights under the First Amendment.
276. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
SEVENTEENTH CAUSE OF ACTION
277. Plaintiff repeats and realleges the
allegations of paragraphs 1 through 276 above as if fully
set forth herein.
278. The provisions of the 1992 Cable Act exempting
municipal authorities that operate multichannel video
programming distributors from franchise requirements and
from damage awards enable such authorities to retaliate
against plaintiff's cable systems for positions they have
taken or may take on political matters or issues, including
franchising matters and issues. Such provisions also
discriminate in favor of such government speakers and.
against private speakers such as plaintiff.
279. No permissible governmental interest is served
by conferring such powers upon such authorities or by
discriminating in their favor.
280. Any permissible governmental interest served
by such provisions could be adequately served by more
narrowly tailored measures.
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•
281. Such provisions violate plaintiff's rights
under the First Amendment.
282. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury.
Plaintiff has no adequate remedy at law.
EIGHTEENTH CAUSE OF ACTION
283. Plaintiff repeats and realleges the allega-
tions of paragraphs 1 through 282 above as if fully set
forth herein.
284. Plaintiff's First Amendment rights as a member
of the press are fundamental rights.
285. Individually and together, the provisions of
the 1992 Cable Act and of the 1934 Communications Act that
are challenged herein were intended to discriminate, and
have the purpose and effect of discriminating, against
plaintiff, and in favor of traditional broadcasters and/or
other non -cable media speakers, merely because plaintiff has
elected to exercise its First Amendment rights as a•member
of the press through the operation of cable television
systems and cable programming services.
286. Any permissible governmental interest served
by the challenged provisions of law, either singly or
together, is insufficient to justify the imposition of such
discriminatory burdens upon plaintiff's exercise of its
fundamental First Amendment rights.
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287. Singly and together, the challenged provisions
violate plaintiff's right to equal protection under law, as
guaranteed by the Equal Protection component of the Due
Process Clause of the Fifth Amendment of the United States
Constitution.
288. Such violation of plaintiff's Constitutional
rights threatens plaintiff with irreparable injury. Plain-
tiff has no adequate remedy at law.
prayers for Relief
WHEREFORE, TWE respectfully requests the following
relief:
1. That the Court issue a declaratory judgment
that Sections 3, 4, 5, 6, 7(b)(4)(B) and (c), 9, 10(d), 11,
15, 19, 24 and 25 of the 1992 Cable Act and Sections 611 and
612 of the 1984 Cable Act violate the First Amendment to the
United States Constitution and that therefore these
provisions are void and of no force or effect.
2. That the Court issue a declaratory judgment
that Sections 4 and 6 of the 1992 Cable Act are not
severable, and that because Section 4 of that Act violates
the First Amendment to the United States Constitution,
Section 6 is void and of no force or effect.
3. That the Court issue a declaratory judgment
that Sections 3, 4, 5, 6, 7(b)(4)(B) and (c), 9, 10(d), 11,
15, 19, 24 and 25 of the 1992 Cable Act and Sections 611 and
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•
612 of the 1984 Cable Act violate the Equal Protection
component of the Due Process Clause of the Fifth Amendment
to the United States Constitution and that therefore these
•
provisions are void and of no force or effect.
4. That the Court issue a declaratory judgment
that Sections 4, 5 and 6 of the 1992 Cable Act in
combination with Sections 611 and 612 of the 1984 Cable Act
violate the Takings Clause of the Fifth Amendment to the
United States Constitution and that therefore these
provisions are void and of no force and effect.
5. That the Court issue a preliminary injunction
enjoining defendants from enforcing or implementing in any
fashion Sections 3, 4, 5, 6, 7(b)(4)(B) and (c), 9, 10(d),
11, 15, 19, 24 and 25 of the 1992 Cable Act and Sections 611
and 612 of the 1984 Cable Act pending a final decision by
the Court.
6. That the Court issue a permanent injunction
enjoining defendants form enforcing or implementing in any
fashion Sections 3, 4, 5, 6, 7(b)(4)(B) and (c) , 9, 10(d),
11, 15, 19, 24 and 25 of the 1992 Cable Act and .Sections 611
and 612 of the 1984 Cable Act.
7. That the Court award TWE its attorney's fees
and costs incurred in maintaining this action.
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8. That the Court award such further and other
relief as it deems just and proper.
Washington, D.C.
November 5, 1992
WILLKIE FARR & GALLAGHER
is/ /3.4A4,
Brian Conboy, Esq.
(D.C. Bar No. 152025)
Three Lafayette Centre
1155 21st St., N.W., 6th Floor
Washington, DC 20036-3384
(202) 328-8000
Attorneys for Plaintiff
Time Warner Entertainment
Company, L.P.
Of Counsel:
Robert D. Joffe, Esq.
Stuart W. Gold, Esq.
Stephen S. Madsen, Esq.
- CRAVATH, SWAINE & MOORE
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
(212) 474-1000