Minority Television Project Inc. v. Federal Communications Commission et al, No. 3:2006cv02699 - Document 80 (N.D. Cal. 2009)

Court Description: ORDER granting Defendant's motion for summary judgment and denying plaintiff's motion for summary judgment 65 MOTION for Summary Judgment, 72 Memorandum in Opposition,,, filed by Minority Television Project Inc.. Signed by Judge Laporte on 8/19/09. (edllc1, COURT STAFF) (Filed on 8/19/2009)

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Minority Television Project Inc. v. Federal Communications Commission et al Doc. 80 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 MINORITY TELEVISION PROJECT INC., Plaintiff, 9 United States District Court For the Northern District of California 10 11 No. C-06-02699 EDL ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT AND DENYING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT v. FEDERAL COMMUNICATIONS COMMISSION, 12 Defendant. 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 / Plaintiff Minority Television Project (“Minority TV” or “Plaintiff”), a non-profit California corporation, is the licensee of non-commercial educational television station KMTP-TV, San Francisco, pursuant to a license granted by Defendant Federal Communications Commission (“FCC”). First Amended Complaint (“FAC”) ¶ 5. As the operator of KMTP-TV, Plaintiff is subject to the restrictions on broadcasting announcements acknowledging donors and the prohibition against certain paid promotional announcements set forth in 47 U.S.C. § 399b and 47 C.F.R. § 73.621(e). FAC ¶ 17. Plaintiff challenges these restrictions as facially unconstitutional under the First Amendment. In particular, Plaintiff claims that the ban on paid advertisements relaying views on matters of public importance or supporting or opposing political candidates facially discriminates against non-commercial speech and favors certain types of commercial speech over non-commercial speech. Plaintiff also contends that the regulations restricting paid advertisements to promote services, facilities, or products are unconstitutionally vague. Plaintiff filed its original complaint on September 19, 2006, alleging numerous constitutional causes of action. Defendant moved to dismiss those claims. On March 13, 2007, the Court dismissed certain claims with prejudice, and the following claims with leave to amend: (1) the facial constitutional challenge to 47 U.S.C. § 399b (contained in the first claim) for violation of the First Dockets.Justia.com United States District Court For the Northern District of California 1 Amendment for imposition of greater restrictions on certain non-commercial speech than on certain 2 commercial speech; (2) the facial constitutional challenge to 47 U.S.C. § 399b (contained in the 3 third claim) for violation of the First Amendment for imposition of greater restrictions on certain 4 non-commercial speech than on other non-commercial speech; and (3) the facial constitutional 5 challenge to 47 U.S.C. § 399b (contained in the fifth claim) for violation of the First and Fifth 6 Amendments for unconstitutionally vague restrictions on protected speech. 7 Plaintiff filed an amended complaint on February 28, 2007, re-alleging the claims previously 8 dismissed with prejudice as well as the facial constitutional challenges. Defendant filed a motion to 9 dismiss. On December 21, 2007, the Court granted Defendant’s motion with respect to the 10 previously dismissed claims. The Court denied Defendant’s motion as to the remaining claims for 11 relief. The Court noted that while the prohibitions in Section 399b seemed to further the substantial 12 interest of insulating broadcasters from special interests and ensuring high quality programming, 13 dismissal would be premature without further development of the factual record. See Dec. 21, 2007 14 Order Granting in Part and Denying in Part Defendant’s Motion to Dismiss (“Dec. 21 Order”) at 13- 15 18. 16 The parties filed cross motions for summary judgment on the remaining claims. For the 17 following reasons, the Court grants Defendant’s motion for summary judgment and denies 18 Plaintiff’s motion for summary judgment. 19 I. BACKGROUND 20 A. 21 Pursuant to its statutory authority to “[c]lassify radio stations” and “[p]rescribe the nature of Regulation of Public Broadcast Stations 22 the service to be rendered by each class of licensed stations,” 47 U.S.C. § 303(a)-(b), the FCC has 23 set aside certain channels to be “licensed only to nonprofit educational organizations upon a 24 showing that the proposed stations will be used primarily to serve the educational needs of the 25 community . . . and to furnish a nonprofit and noncommercial television broadcast service,” 47 26 C.F.R. § 73.621(a). Such stations are referred to as noncommercial educational stations or public 27 broadcast stations. 47 U.S.C. § 397(6). 28 In regulating public broadcast stations, Congress and the FCC have sought to strike “a 2 United States District Court For the Northern District of California 1 reasonable balance between the financial needs of [those] stations and their obligation to provide an 2 essentially non-commercial broadcast service.” In re Comm’n Policy Concerning the 3 Noncommercial Nature of Educ. Broad. Stations, 90 F.C.C. 2d 895, 897 ¶ 3 (1982) (internal 4 quotations omitted) (hereinafter “Educ. Broad. Stations”). Congress enacted Section 399b as part of 5 the Public Broadcasting Amendments Act of 1981. To help fund programming, 47 U.S.C. § 399a(b) 6 allows non-commercial educational stations to identify their financial supporters in a manner that 7 does not promote the sale of goods or services. A non-commercial educational station may thus 8 “broadcast announcements which include the use of any business or institutional logogram and 9 which include a reference to the location of the corporation, company or other organization 10 involved,” so long as such announcements do not “interrupt regular programming.” 47 U.S.C. § 11 399a(b).1 12 Such stations may not, however, “make its facilities available to any person for the 13 broadcasting of any advertisement.” 47 U.S.C. § 399b(b)(2). The challenged statute defines 14 “advertisement” as follows: 15 For purposes of this section, the term “advertisement” means any message or other programming material which is broadcast or otherwise transmitted in exchange for any remuneration, and which is intended– 16 17 (1) to promote any service, facility, or product offered by any person who is engaged in such offering for profit; 18 19 (2) to express the views of any person with respect to any matter of public importance or interest; or 20 (3) to support or oppose any candidate for political office. 21 47 U.S.C. § 399b(a). Section 399b thus regulates both “commercial” speech (§ 399b(a)(1)) and 22 “non-commercial” speech (§ 399b(a)(2) and (3)), to the extent such programming material is 23 broadcast in exchange for remuneration. As this Court previously recognized, this statutory 24 framework strikes “a balance that affords broadcasters financing beyond federal appropriations, 25 while maintaining insulation from special influences, whether commercial or political.” Dec. 21 26 27 28 1 A logogram is “any aural or visual letters or words, or any symbol or sign, which is used for the exclusive purpose of identifying any corporation, company, or other organization, and which is not used for the purpose of promoting the products, services or facilities of such corporation, company, or other organization.” 47 U.S.C. § 399a(a). 3 1 United States District Court For the Northern District of California 2 Order at 12. The FCC promulgated 47 C.F.R. § 73.621(e) to implement the statute and has issued several 3 orders describing types of sponsorship announcements that do or do not violate the statute’s 4 prohibition on advertising. Donor acknowledgments may include: “(1) logograms or slogans which 5 identify and do not promote, (2) location information, (3) value neutral descriptions of a product line 6 or service, and (4) brand and trade name and product o[r] service listings.” In re Comm’n Policy 7 Concerning the Noncommercial Nature of Educ. Broad. Stations, 7 F.C.C. Rcd 827 (1992). Donor 8 announcements, however, may not include price information, calls to action, or inducements to buy. 9 Id. at 828. 10 B. 11 Minority TV is the licensee of non-commercial educational television stations KMTP-TV, 12 located in San Francisco. KMTP-TV is one of only a handful of non-commercial stations that are 13 not affiliated with the Public Broadcasting Service (“PBS”). Declaration of Roger Noll, Ex. A at 22. 14 In the course of its operations, Plaintiff has broadcast a number of announcements identifying its 15 donors. As a consequence of complaints from another broadcaster, the FCC commenced a 16 proceeding against Plaintiff for repeatedly going beyond the limited identification of donors 17 permitted under 47 U.S.C. § 399b. In 2002, the FCC’s Enforcement Bureau determined that 18 Minority TV violated Section 399b approximately 1,900 times by broadcasting promotional 19 advertisements on behalf of corporations such as State Farm and Chevrolet, among others. FAC, 20 Ex. A (Notice of Apparent Liability for Forfeiture, 17 FCC Rcd 15646 (2003)) (broadcasting, for 21 example, advertisements with phrases such as “highly regarded product”). FCC Proceedings Against Plaintiff 22 The FCC found “that Minority Television Project, Inc. (“Minority”), licensee of non- 23 commercial educational television station KMTP-TV, San Francisco, California, apparently violated 24 Section 399b of the Communications Act of 1934, as amended (“the Act”), 47 U.S.C. § 399b, and 25 Section 73.621 of the Commission’s Rules, 47 C.F.R. § 73.621, by willfully and repeatedly 26 broadcasting advertisements. Based on our review of the facts and circumstances of this case, we 27 conclude that Minority is apparently liable for a monetary forfeiture in the amount of Ten Thousand 28 Dollars ($10,000).” FAC, Ex. A. 4 United States District Court For the Northern District of California 1 The FCC followed with a Forfeiture Order for $10,000.00 for “willful and repeated broadcast 2 of advertisements over the station, in violation of Section 399b of the Communications Act of 1934, 3 as amended (“the Act”), and section 73.621(e) of the Commission’s rules.” FAC, Ex. B (Forfeiture 4 Order, 18 FCC Rcd 26661 (2003)). In doing so, the Forfeiture Order acknowledged that “the 5 Commission has recognized that ‘it may be difficult to distinguish at times between announcements 6 that promote and those that identify.’ Thus it defers to ‘reasonable, good faith judgments’ by 7 licensees and finds violations only where material is ‘clearly’ promotional as opposed to 8 identifying.” Id. 9 The FCC denied Plaintiff’s Petition for Review, specifically rejecting Plaintiff’s First 10 Amendment arguments and request that the Commission revisit its underwriting announcement rules 11 to make them clearer. FAC, Ex. C (Order on Review, 19 FCC Rcd 25116 (2004)). The FCC also 12 denied Plaintiff’s Petition for Reconsideration. FAC, Ex. D. 13 On December 23, 2005, Plaintiff filed a Petition for Review of the FCC orders in the United 14 States Court of Appeals for the Ninth Circuit. On April 18, 2006, the Ninth Circuit transferred the 15 case to this Court. See Docket No. 1 (Transfer Order). 16 The parties agree that the above material facts are undisputed. Minority TV has not 17 submitted evidence to support its constitutional challenge. Instead, it argues that neither the 18 evidence before Congress nor Defendant’s evidence before the Court supports the constitutionality 19 of the statute. 20 II. 21 LEGAL STANDARD Summary judgment shall be granted if “the pleadings, depositions, answers to 22 interrogatories, and admissions on file, together with the affidavits, if any, show that there is no 23 genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of 24 law.” FRCP 56(c). Material facts are those that may affect the outcome of the case. See Anderson 25 v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a material fact is genuine if there 26 is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. Id. The 27 court must view the facts in the light most favorable to the non-moving party and give it the benefit 28 of all reasonable inferences to be drawn from those facts. Matsushita Elec. Indus. Co. v. Zenith 5 1 Radio Corp., 475 U.S. 574, 587 (1986). The court must not weigh the evidence or determine the 2 truth of the matter, but only determine whether there is a genuine issue for trial. Balint v. Carson 3 City, 180 F.3d 1047, 1054 (9th Cir. 1999). A party seeking summary judgment bears the initial burden of informing the court of the United States District Court For the Northern District of California 4 5 basis for its motion, and of identifying those portions of the pleadings and discovery responses that 6 demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 7 323 (1986). Where the moving party will have the burden of proof at trial, it must affirmatively 8 demonstrate that no reasonable trier of fact could find other than for the moving party. On an issue 9 where the nonmoving party will bear the burden of proof at trial, the moving party can prevail 10 merely by pointing out to the district court that there is an absence of evidence to support the 11 nonmoving party’s case. Id. If the moving party meets its initial burden, the opposing party must 12 then set forth specific facts showing that there is some genuine issue for trial in order to defeat the 13 motion. See Fed. R. Civ. P. 56(e); Anderson, 477 U.S. at 250. If the nonmoving party fails to show 14 that there is a genuine issue for trial, “the moving party is entitled to judgment as a matter of law.” 15 Celotex, 477 U.S. at 323. 16 III. CROSS MOTIONS FOR SUMMARY JUDGMENT 17 A. 18 To demonstrate standing, a plaintiff “must allege (1) a ‘distinct and palpable’ injury-in-fact Standing 19 that is (2) ‘fairly traceable’ to the challenged provision or interpretation and (3) would ‘likely . . . be 20 redressed’ by a favorable decision.” Santa Monica Food Not Bombs v. City of Santa Monica, 450 21 F.3d 1022, 1033 (9th Cir. 2006) (internal citation omitted). Additionally, special standing principles 22 apply in First Amendment cases. In a facial challenge, a plaintiff seeking to vindicate his own 23 constitutional rights may argue that an ordinance “is unconstitutionally vague or . . . impermissibly 24 restricts a protected activity.” Alternatively, “an individual whose own speech or expressive 25 conduct may validly be prohibited or sanctioned is permitted to challenge a statute on its face 26 because it also threatens others not before the court.” Id. (citations omitted). 27 28 Defendant does not contest Plaintiff’s standing. Plaintiff plainly has standing to challenge Section 399b(a)(1), as the FCC has found it violated that section. Plaintiff maintains that it also has 6 1 standing to challenge Sections 399b(a)(2) and (3), noting that the FCC has conceded that it has 2 enforced Section 399b(a)(3) and admits that it will enforce both sections where appropriate. The 3 FCC has also issued at least one advisory opinion concluding that an underwriting announcement for 4 Planned Parenthood was permissible under Section 399b(a)(1) because Planned Parenthood was a 5 non-profit and under Section 399b(a)(2) because the announcement was not an expression of the 6 views of any person with respect to a matter of public importance or interest. See Diercks Affidavit, 7 Ex. A; Scheibel Depo. Ex. 18. The FCC has initiated enforcement pursuant to Section 399b(a)(3) at 8 least twice, and the FCC is not aware of any published decisions enforcing Section 399b(a)(2). Fed. 9 Mot. at 19 n.5 (citing Applications of WQED Pittsburgh, 15 FCC Rcd 202, 209 (1999); J.C. United States District Court For the Northern District of California 10 11 Maxwell Broadcasting Group, Inc., 7 FCC Rcd 3218 (1992)). Since the FCC is generally enforcing the provisions, Plaintiff has standing. In addition, 12 while Plaintiff has not introduced specific evidence that it has a real intention or desire to broadcast 13 announcements that would violate subsections (a)(2) and (a)(3) of Sections 399b, Plaintiff has 14 alleged such an intention, discovery has not shown otherwise, and Defendant has not contested 15 Plaintiff’s claim. 16 B. 17 As the Court has already determined, Section 399b is subject to review under intermediate Whether Section 399b Violates the First Amendment 18 First Amendment scrutiny and will be upheld if it is “narrowly tailored to further a substantial 19 government interest.” FCC v. League of Women Voters of California, 468 U.S. 364, 380 (1984) 20 (internal quotations omitted).2 Under this test, “the government may employ the means of its 21 choosing so long as the . . . regulation promotes a substantial government interest that would be 22 achieved less effectively absent the regulation, and does not burden substantially more speech than 23 is necessary to further that interest.” Turner Broadcasting Sys. v. FCC, 520 U.S. 180, 214-15 (1997) 24 (“Turner II”) (internal quotation omitted). The regulation need not be the least restrictive means to 25 achieve the government’s end. Id. at 217. “When the Government defends a regulation on speech 26 as a means to redress past harms or prevent anticipated harms, it must do more than simply ‘posit the 27 2 28 While Plaintiff halfheartedly argues that strict scrutiny should apply, FCC v. Fox Television Stations, Inc., __ U.S. __, 129 S. Ct. 1800 (2009), relied upon by Plaintiff, does not support Plaintiff’s conclusion. 7 United States District Court For the Northern District of California 1 existence of the disease sought to be cured.’ (citation omitted). It must demonstrate that the recited 2 harms are real, not merely conjectural, and that the regulation will in fact alleviate these harms in a 3 direct and material way.” Turner Broad. Sys. v. FCC, 512 U.S. 622, 664 (1994) (“Turner I”) 4 (citations omitted). Accordingly, the Court must consider the question of “whether the legislative 5 conclusion was reasonable and supported by substantial evidence in the record before Congress.” 6 Turner I, 512 U.S. at 665-66; Turner II, 520 U.S. at 211. Where the evidence in the record could 7 support opposite conclusions, “it [i]s for Congress to determine the better explanation,” and the 8 Court is “not at liberty to substitute [its] judgment for the reasonable conclusion of a legislative 9 body.” Turner II, 520 U.S. at 212; see also Turner I, 512 U.S. at 666 (citing Century 10 Communications Corp. v. FCC, 835 F.2d 292, 304 (D.C. Cir. 1987) (“When trenching on first 11 amendment interests, even incidentally, the government must be able to adduce either empirical 12 support or at least sound reasoning on behalf of its measures.”). See generally Dec. 21 Order at 8- 13 11. 14 Here, there are a few threshold issues which the Court must address before analyzing 15 whether or not the statute is narrowly tailored to further a substantial governmental interest. First, 16 the parties dispute whether or not the Court may consider facts outside of those considered by 17 Congress when it enacted the statute. The government has submitted a report by Roger G. Noll, a 18 Professor of Economics at Stanford University, and a declaration by Lance Ozier, the Vice President 19 for Planning and Policy of the WGBH Educational Foundation, neither of which was considered by 20 Congress. 21 As Defendant notes, in Turner I, the Supreme Court expressly permitted the government to 22 supplement the legislative record to support the constitutionality of a federal statute, and indeed 23 remanded the case for that very purpose. Turner I, 512 U.S. at 668 (“Because of the unresolved 24 factual questions, the importance of the issues to the broadcast and cable industries, and the 25 conflicting conclusions that the parties contend are to be drawn from the statistics and other 26 evidence presented, we think it necessary to permit the parties to develop a more thorough factual 27 record, and to allow the District Court to resolve any factual disputes remaining, before passing 28 upon the constitutional validity of the challenged provisions.”). In Turner II, the Court held: “We 8 United States District Court For the Northern District of California 1 have no difficulty in finding a substantial basis to support Congress’ conclusion that a real threat 2 justified enactment of the must-carry provisions. We examine first the evidence before Congress 3 and then the further evidence presented to the District Court on remand to supplement the 4 congressional determination.” Turner II, 520 U.S. at 196. The Supreme Court stated that the 5 evidence before Congress supported its conclusions, and “the reasonableness of Congress’ 6 conclusion was [also] borne out by the evidence on remand.” Id. at 200. In accordance with the 7 Turner decisions, this Court has considered both evidence before Congress and additional evidence 8 not before Congress in evaluating the reasonableness of Congress’ decision.3 9 Plaintiff also argues that the Ozier declaration should be stricken because the government 10 did not identify Mr. Ozier as an expert pursuant to Federal Rule of Civil Procedure 26(a)(2). Mr. 11 Ozier’s testimony qualifies as lay opinion testimony under Federal Rule of Evidence 701 if it is 12 rationally based on his perception, helpful to a clear understanding of the witness’ testimony or the 13 determination of a fact in issue, and not based on scientific, technical, or other specialized 14 knowledge. Most if not all of Mr. Ozier’s testimony is based upon his particularized knowledge that 15 he has by virtue of his or her position in a business, as opposed to training or specialized knowledge 16 within the realm of an expert, and is lay opinion. See Fed. R. Evid. 701 adv. comm. note (2000). As 17 the Vice President of a foundation that operates numerous noncommercial educational radio and 18 television stations, as well as the prior underwriting director of that entity, his opinions are based 19 largely on his role at WGBH. See Ozier Decl. ¶¶ 2-4. In addition, the Federal Rules of Civil 20 Procedure provide that a party that does not identify a witness may still use that witness if the failure 21 to disclose is harmless. See Fed. R. Civil Pro. 37(c)(1). Here, in February 2009, the government 22 identified Mr. Ozier in a Rule 26(a)(1) disclosure as having information regarding the effect that 23 airing of advertising or underwriting announcements from commercial, non-commercial or political 24 3 25 26 27 28 Plaintiff argues that the Court cannot consider evidence outside of the congressional record if that record revealed that Congress did not have substantial evidence before it supporting its conclusion. See Turner II, 520 U.S. at 211 (“question is whether the legislative conclusion was reasonable and supported by substantial evidence in the record before Congress”) (citing Turner I, 512 U.S. at 665-666 ). Because the Court finds that there was substantial evidence in the record before Congress, as discussed below, the Court need not reach this issue. Plaintiff also maintains that a plaintiff could successfully challenge a statute if overwhelming evidence contradicted the evidence before Congress. Again, however, Plaintiff has not submitted any significant contradictory evidence here, so the Court need not address this hypothetical scenario. 9 1 sources would have on public broadcast stations, and Defendant made him available for a 2 deposition, which Plaintiff declined to take. Consequently, the failure to disclose him as an expert is 3 harmless. The Court, therefore, has considered Mr. Ozier’s testimony, although it would reach the 4 same conclusion without it. United States District Court For the Northern District of California 5 As an additional threshold matter, the parties dispute whether or not, “[w]here the First 6 Amendment is implicated the tie goes to the speaker, not the censor.” Pl. Opp. at 3 (quoting FEC v. 7 Wisconsin Right to Life, 551 U.S. 449, 127 S. Ct. 2652 (2007) (“WRTL”)).4 Plaintiff claims this 8 principle should be applied here, at least to the extent political speech is involved, but the 9 government counters that WRTL is inapposite because there, strict scrutiny applied, requiring the 10 government to use the least restrictive means to achieve its goal. Here, by contrast, the Court must 11 give considerable deference to Congress in examining the evidence before it under Turner II, 520 12 U.S. at 199, rather than simply apply the “tie goes to the speaker” rule. The Court agrees that the 13 WRTL strict scrutiny test is inapplicable here, where the government need not choose the least 14 restrictive means to achieve its goal. 15 Turning to the constitutionality of the statute, the government argues that Section 399b’s 16 restrictions on the broadcast of political and issue advertisements for remuneration are a narrowly 17 tailored means of advancing the government’s substantial interest of insulating broadcasters from 18 special interests and ensuring high quality programming. Fed. Mot. at 6. The government maintains 19 that the allure of remuneration from special influences, whether commercial or political, would 20 undermine the touchstone of the noncommercial educational service – the independence of the 21 public broadcaster’s programming judgment. Id. In response, Plaintiff argues that Congress passed 22 the statute on an insufficient factual record, and that the statute does not pass intermediate scrutiny. 23 24 4 25 26 27 28 In WRTL, a nonprofit political advocacy corporation asserted that the organization's advertisements were not barred by the Bipartisan Campaign Reform Act of 2002 (“BCRA”). Id. at 460. The Court found that the BCRA unconstitutionally precluded the advertisements, but there was no majority consensus concerning the basis for the unconstitutionality. Two Justices found that the specific advertisements at issue were not the functional equivalent of express campaign speech, and that the BCRA was unconstitutional as applied to them, while three other Justices deemed the specific statutory prohibition to be facially unconstitutional, and would have overruled the Court’s prior holding that the BCRA was constitutional. Id. at 483, 504. 10 1 2 3 1. The Government’s Substantial Interest in Preserving Public Broadcasting as a Source of Programming Unavailable on Commercial Stations 4 Congress has recognized that “it is in the public interest to encourage the growth and 5 development of public radio and television broadcasting, including the use of such media for 6 instructional, educational, and cultural purposes.” 47 U.S.C. § 396(a)(1). The FCC first set aside 7 TV channels for the exclusive use of educational broadcasters on the basis of its conclusion that 8 “there is a need for non-commercial education stations” and that such stations can make “important 9 contributions … in the education of the in-school and adult public.” Television Assignments, 41 United States District Court For the Northern District of California 10 F.C.C. 148, 159-160 ¶¶ 36-38 (1952). The FCC dedicated these stations in this manner because of 11 the “high quality type of programming which would be available in such stations – programming of 12 an entirely different character from that available on most commercial stations.” Nat’l Pub. Radio, 13 Inc. v. FCC, 254 F.3d 226, 227 (D.C. Cir. 2001) (internal citations and quotations omitted). 14 Congress has recognized the unique programming niche filled by public television by 15 finding, in the Public Television Act, that “[i]t furthers the general welfare to encourage public 16 telecommunications services which will be responsive to the interests of people both in particular 17 localities and throughout the United States, which will constitute an expression of diversity and 18 excellence, and which will constitute a source of alternative telecommunications services for all the 19 citizens of the Nation.” 47 U.S.C. § 396(a)(5); see also 47 U.S.C. § 396(a)(6) (referring to the 20 public interest in seeking to “encourage the development of programming that involves creative 21 risks and that addresses the needs of unserved and underserved audiences, particularly children and 22 minorities”). To achieve these goals, Congress has appropriated substantial funds over the years for 23 non-commercial broadcasting. See, e.g., 47 U.S.C. § 396(k). It also created the Corporation for 24 Public Broadcasting (“CPB”) in order to “facilitate the full development of public 25 telecommunications” and make available “programs of high quality, diversity, creativity, excellence, 26 and innovation.” 47 U.S.C. 396(g)(1)(a). 27 The government submitted expert opinion regarding how public broadcasting addresses 28 certain programming voids that exist in commercial broadcasting due to its financial incentive 11 United States District Court For the Northern District of California 1 structure. Roger Noll, a Professor Emeritus of Economics at Stanford University and a Senior 2 Fellow at the Stanford Institute for Economic Policy Research, explained persuasively that public 3 broadcasting alleviates an “inherent ‘market-failure’ in commercial, advertiser-supported 4 broadcasting,” which “causes the nature and diversity of content in programs to fall short of the 5 social optimum.” Expert Report of Roger G. Noll (“Noll Report”) at 5; see also id. at 25-27 (citing 6 studies comparing program diversity and program content of commercial and non-commercial 7 stations). The market failure in commercial broadcasting results from the fact that commercial 8 broadcasters derive most of their revenue from advertising sales. Id. at 11. “Advertisers buy access 9 to viewers and are interested only in whether potential customers are watching,” and they “have no 10 interest in the size of the benefit that a program provides viewers as long as that benefit is sufficient 11 to keep them viewing.” Id. Commercial broadcasters therefore have an incentive to create and 12 broadcast programming that appeals to the largest possible audience because “[a]dvertising revenues 13 from for-profit advertisers depend upon the expected viewership of a particular program.” 14 Declaration of Lance Ozier (“Ozier Decl.”) ¶12; see also Turner II, 520 U.S. at 208 (“a television 15 station’s audience size directly translates into revenue – large audiences attract larger revenues, 16 through the sale of advertising time.”). The net effect “is that a competitive, advertiser-supported 17 television system leads to an emphasis on mass entertainment programming with insufficient 18 attention to programs that serve a small audience, even if that audience has an intense desire to 19 watch programs that differ from standard mass entertainment programs.” Noll Report at 5; see also 20 Ozier Decl at ¶15. 21 By contrast, public broadcasting’s increased diversity of programming is made possible by 22 different financial incentive structures, which “arise primarily from the prohibition against 23 advertisements on non-commercial broadcasting and the practice of making federal subsidies depend 24 on a station’s success in obtaining financial support from other sources.” Noll Report at 5. Unlike 25 commercial stations, non-commercial educational stations receive funding not from paid advertising 26 but from federal and state subsidies, individual donors, special events, foundation grants, and 27 corporate contributions that are primarily in the form of payments for underwriting announcements 28 that acknowledge the donation before or after a sponsored program. Noll Report at 16-17; Ozier 12 United States District Court For the Northern District of California 1 Decl at ¶6. The FCC’s interest in creating noncommercial channels is “to remove the programming 2 decisions of public broadcasters from the normal kinds of commercial market pressures under which 3 broadcasters … usually operate.” In re Comm’n Policy Concerning the Noncommercial Nature of 4 Educ. Broad. Stations, 86 F.C.C.2d 141, 142 (1981) (“Pub. Broad. Serv.”). Unlike commercial 5 stations, “non-commercial educational stations do not attempt to shape editorial content to maximize 6 viewership for the programs that they offer, but instead attempt to air programs with particular 7 qualities consistent with their educational mission.” Ozier Decl. ¶12. The relative absence of 8 advertising pressures allows the viewing public to rely on public television for “program content that 9 is unlike the content of commercial stations and networks, which in turn is the kind of content that is 10 of less interest to advertisers.” Noll Report at 29. For this reason, the FCC has recognized a 11 “compelling government interest in separating public broadcasting station programming decisions 12 from commercial considerations as much as possible.” Pub. Broad. Serv., 86 F.C.C.2d at 147. 13 Non-commercial programming differs from commercial programming in a number of ways. 14 In particular, non-commercial broadcasters provide more public affairs programming and children’s 15 and family programming, while showing significantly less violent programming. Noll Report at 25- 16 27. Studies have found the children’s programming on public stations better serve certain 17 educational and instructional criteria than children’s programming on non-public stations. Id. at 33- 18 34. 19 A strong example of public broadcasting’s special benefits is provided by children’s 20 programming, which continues to be largely absent from commercial stations. The Government 21 Accountability Office has determined that children’s programming accounts for 16 percent of all 22 program hours broadcast by public television stations and represents “over 40 percent of the 23 weekday programming schedule for many stations.” Id., Ex. B at 22 (Issues Related to the Structure 24 and Funding of Public Television, GAO-07-150 (Jan. 2007)). Commercial broadcasters, by contrast, 25 have been found to average about 3.32 hours per week of educational or informational children’s 26 programming. Id., Ex. C at 11 (Wilson, Barbara J., Kunkel, Dale, and Drogos, Kristin L., 27 Educationally/Insufficient? An Analysis of the Availability & Educational Quality of Children’s E/I 28 Programming, Children Now (November 2008)). According to a Senate report, public television is 13 United States District Court For the Northern District of California 1 “the primary source of educational children’s programming in the United States.” Children’s 2 Television Act of 1990, S. REP. NO. 101-66, at 3, reprinted in 1990 U.S.C.C.A.N. 1628, 1633. 3 Among other things, public broadcasting has served as an incubator for acclaimed children’s 4 programs such as “Mister Roger’s Neighborhood,” “Sesame Street,” “Electric Company,” “3-2-1 5 CONTACT,” “Square One TV,” and “Reading Rainbow” that educate and teach children specific 6 skills. Id. at 23-26, 1990 U.S.C.C.A.N. at 1631-33 (citing studies, that for example, show that 7 “viewing Mister Rogers Neighborhood leads to increased prosocial behavior, task persistence and 8 imaginative play” and that “[e]ven a skeptical interpretation of the data concluded that children 9 learned letter and number skills from unaided viewing”). 10 Therefore, the government notes that it has a substantial interest in maintaining the 11 educational programming available on public stations, which are heavily subsidized by the 12 government. Congress’s intent in amending sections 399a and 399b in 1981 was to insulate public 13 broadcasting from special interest influences, including political and commercial influences. 127 14 Cong. Rec. 13145 (June 22, 1981) (remarks of Rep. Gonzalez). Plaintiff has not even attempted to 15 refute this point. Rather, Plaintiff maintains that Section 399b does not further the asserted 16 governmental interest and is not narrowly tailored. 17 2. Whether § 399b Furthers the Government’s Interest and is Narrowly Tailored 18 19 In analyzing whether Section 399b furthers a substantial governmental interest, the 20 government must demonstrate that the recited harms are real, not merely conjectural, and that the 21 regulation will in fact alleviate these harms in a direct and material way.” Turner Broad. Sys. v. 22 FCC, 512 U.S. 622, 664 (1994) (“Turner I”) (citations omitted). Accordingly, the Court must 23 consider the question of “whether the legislative conclusion was reasonable and supported by 24 substantial evidence in the record before Congress.” Turner I, 512 U.S. at 665-66; Turner II, 520 25 U.S. at 212. 26 When the FCC established noncommercial television half a century ago, it found that the 27 “achievement of the objective for which special educational reservations have been established – 28 i.e., the establishment of a genuinely educational type of service – would not be furthered by 14 1 permitting [non-commercial stations] to operate in substantially the same manner as commercial 2 applicants .” Television Assignments, 41 F.C.C. 148, 166 ¶ 57 (1952). Thirty years later, the FCC 3 noted that “[p]ublic stations have relied primarily on government and private contributions; private 4 commercial stations have relied primarily upon revenue paid in consideration for the airing of 5 advertising to promote goods and services. So long as [that distinction] is maintained 6 …,programming broadcast in return for receipt of consideration and used to promote the sale of 7 goods and services is not appropriate for non-commercial broadcasting.” Pub. Broad. Serv., 86 8 F.C.C.2d at 147. United States District Court For the Northern District of California 9 Until shortly before Congress adopted Section 399b’s advertising restrictions, the FCC’s 10 existing regulations only allowed broadcasting of a sponsor’s name on a public station. In adopting 11 Section 399b, Congress struck a balance between the need to ensure that public broadcasting 12 remained financially viable in the face of substantial federal funding reductions and the need to 13 preserve its essential character as a non-commercial, educational service. Accordingly, Congress 14 allowed public stations to broadcast “logograms” identifying their corporate financial sponsors. See 15 47 U.S.C. § 399a. But Congress heard testimony that “to put direct advertising messages on the air . 16 . . would tend to blur the distinction between [noncommercial] and commercial stations.” Hearings 17 before the Subcomm. on Telecommns, Consumer Protection, and Finance of the H. Comm. on 18 Energy and Commerce on H.R. 3238 and H.R. 2774, 97th Cong. 1st Sess. 229 (1981) (testimony of 19 David Ives, president of WGBH-TV Boston) (1981 House Hearings).5 20 In other words, when Congress adopted Section 399b, Congress loosened somewhat the 21 existing limitations on public broadcasters. Congress had many years of experience behind it 22 regarding the benefits of public radio and television, which had existed with even greater advertising 23 24 25 26 27 28 5 Shortly before the 1981 House hearings on Section 399b, the FCC changed its regulations to allow non-commercial broadcasters to convey information that is informational, though not promotional, including the donor’s logo, location, and product lines or services. See Pub. Broad. Serv., 86 F.C.C.2d at 155. In enacting this change, which was ratified by Congress in Section 399a, the FCC hoped to “increase both the total contributions and the number of individual contributors to stations” in order to “reduce the ability of any single, private or public entity to affect programming decisions” and to “help ensure that public stations provide an alternative programming service to the commercial programming service.” 1981 House Hearings at 37 (testimony of FCC Commissioner Washburn). 15 1 restrictions. Congress did not write on a blank slate when it enacted Section 399b; rather, after a 2 half-century of experience with public broadcasting, the record before Congress showed that public 3 television and radio stations carry very different programming than do commercial stations. 4 Congress, therefore, was aware of the stark differences in programming which arose from 5 differences in funding between commercial and non-commercial stations, including the absence of 6 commercial pressures on public stations. United States District Court For the Northern District of California 7 Congress also heard evidence that the advertising prohibitions were necessary to preserve 8 the unique programming presented by public stations. For example, one witness testified that 9 “commercialization of public broadcasting” threatened to re-focus its programming toward the 10 “lowest common denominator,” rather than “diverse audiences,” including “minorities and women” 11 as well as “to the print handicapped.” 1981 House Hearings, at 129-130 (testimony of John C. 12 DeWitt, American Found. for the Blind). When asked about National Public Radio (“NPR”), Walda 13 Roseman, Senior Vice President of NPR testified that public radio allows “7 or 15 minutes to 14 explore an issue, rather than being confined to the 30-60- and 90 second snatches common to 15 commercial stations,” provides “the only network for the blind,” and “gives you jazz live” and 16 “theatre.” Id. at 323. Public radio also provides four hours of daily news of a different nature than 17 that provided by commercial stations, for example covering Congressional hearings live and 18 examining the Jonestown events in depth, among other things. Id. While Plaintiff contends that 19 NPR’s witness lacked support for her statement that allowing on-air advertising would not benefit 20 public radio, her statement was based upon NPR’s study of the issue. Diercks Decl., Ex. 1 at 212. 21 Similarly, when Congress later examined children’s programming after enacting Section 22 399b,6 its members found that “the marketplace has simply failed to produce [educational children’s 23 programming] on its own, in large part because the advertiser-driven television industry does not 24 find children’s programming to be a particularly lucrative venture.” 136 Cong. Rec. 18242 (daily ed. 25 July 19, 1990) (remarks of Sen. Wirth) (further noting that the need for a program to promote 26 educational children’s programming “has been clearly demonstrated over the years”); see also S. 27 28 6 The Court may consider evidence outside of the Congressional record, including testimony before Congress post Section 399b enactment, as noted above. 16 1 REP. NO. 101-66, reprinted in 1990 U.S.C.C.A.N. 1628, 1639 (“Commercial broadcasters have little 2 incentive to produce or carry [children’s educational] programming because of the high cost of 3 producing the programs and the low level of advertising revenue the programming generates.”). 4 “[P]ublic television is the primary source of children’s educational programming in the United 5 States.” Id. at 1633; see also 136 Cong. Rec. 18241 (daily ed. July 19, 1990) (remarks of Sen. 6 Wirth) (“[E]ducational [children’s] programs have literally disappeared from the airwaves on all but 7 PBS stations.”). 8 United States District Court For the Northern District of California 9 Subsequent testimony before Congress also confirmed that many children’s programs would not be broadcast but for non-commercial television. When asked whether the classic children’s 10 program “Sesame Street” would be “able to get a good time slot and get advertisers” if it “decided to 11 go commercial,” the President and Chief Operating Officer of Children’s Television Workshop 12 responded that “in the 20 years that we have been at Sesame Street, to my knowledge commercial 13 broadcasters have not expressed very much interest in wanting our show on a normal basis in terms 14 of advertising.” Hearing Before the Subcomm. on Communications of the S. Comm. on Commerce, 15 Science, and Transportation, 101st Cong., 1st Sess. 81-82 (1989) (testimony of David Britt). 16 Commercial broadcasters “certainly would not give us twice a day scheduling, because children’s 17 programming is the least profitable programming that they have. And in most public television 18 stations we get at least two hours a day in the time slot that we want.” Id. 19 20 21 22 23 24 Representative Wirth explained: If we get public broadcasting into the selling of time, how do we avoid then getting public broadcasting, as I believe somebody mentioned 3 weeks ago, into a very large commitment of their own to figure out what demographics they are touching or what the measurement is going to be of that particular population, and how much X program sells for and how much Y program sells for? And the minute you get into that … you are really threatening … the independence of public broadcasting, and you … then automatically get into the ratings game. And pretty soon people are going to be comparing PBS to CBS, NBC, and ABC. 25 1981 House Hearings at 71. See also id. at 149 (testimony of Association of Independent Video and 26 Filmmakers, Inc.) (noting that advertising will cause program choices to be made on the “basis of 27 the needs of the sponsor, not the public”). 28 Plaintiff argues that the evidence before Congress does not show that allowing 17 United States District Court For the Northern District of California 1 advertisements on public stations would eviscerate the distinction between commercial and non- 2 commercial stations. Pl. Mot. at 12. Plaintiff argues that Defendant’s admission that public stations 3 already carry advertisements under Section 399b in the form of logograms undercuts their argument. 4 But Plaintiff’s argument that advertisement is an all-or-nothing proposition is not supported by any 5 evidence. Rather, Plaintiff’s claim that Congress improperly adopted the theory that you can be “a 6 little bit pregnant” (see Pl. Reply at 6) when it enacted Section 399b and therefore must allow for 7 more advertising is an inapt analogy in this legislative context; enacting laws is not an all-or-nothing 8 proposition, but instead often involves weighing competing interests and striking an appropriate 9 balance. Plaintiff has submitted no evidence showing that allowing limited underwriting 10 announcements, product descriptions, or logograms has significantly altered the nature of public 11 programming. Yet, allowing full-blown advertising on commercial stations has been shown over 12 many years, both before and after Section 399b was enacted, to yield starkly different programming 13 on commercial stations than that on public stations. In other words, while Plaintiff argues that the 14 list of possible problems with permitting non-commercial stations to broadcast advertisements is 15 speculative, commercial station content is itself evidence of what programming could be expected to 16 look like if full-blown advertising were allowed. In addition, the testimony before Congress 17 included testimony of representatives of the Association of Independent Video and Filmmakers and 18 National Public Radio, all of whom had expertise in public broadcasting. 19 Plaintiff argues that Congress adopted Section 399b in an environment “full of speculation, 20 surmise and conjecture about possible problems if noncommercial stations were permitted to 21 broadcast advertising.” Pl. Mot. at 6. However, as noted above, Congress enacted Section 399b 22 after a half-century of experience in both public broadcasting and commercial broadcasting. 23 Testimony before Congress showed that public television stations have very different programming 24 than do commercial stations. This difference in programming arose in the absence of ordinary 25 commercial advertisements on public stations. Therefore, Congress’s conclusions were not based on 26 mere speculation and conjecture, but on reasoned legislative judgment. If hypothetically Congress 27 had instead arrived at the same conclusion without such experience, Plaintiff would have a stronger 28 argument requiring Congress to assemble a more extensive factual record on which to base its 18 1 conclusions. But Congress did have a long history on which to base its deductions and inferences, 2 and it reasonably predicted that advertising restrictions were necessary to preserve the unique 3 programming presented by non-commercial stations. United States District Court For the Northern District of California 4 As the Supreme Court has recognized, “[s]ound policymaking often requires legislators to 5 forecast future events and to anticipate the likely impact of these events based on deductions and 6 inferences for which complete empirical support may be unavailable.” Turner I, 512 U.S. at 665. 7 While Congress must base its conclusions upon substantial evidence, “deference must be accorded 8 to its findings as to the harm to be avoided and to the remedial measures adopted for that end, lest 9 [courts] infringe on traditional legislative authority to make predictive judgment when enacting 10 nationwide regulatory policy.” Turner II, 520 U.S. at 196. Moreover, Congress may enact 11 protective legislation to avoid foreseeable problems, and it need not “wait until the entire harm 12 occurs” and may act to prevent it. Id. at 212. 13 Plaintiff also argues that sponsors of noncommercial stations are still “free to give the money 14 to non-commercial stations and to attempt to ‘buy’ influence” in that manner, regardless of whether 15 they have paid for advertising. Pl. Mot. at 13. But the strict limitations on advertising exist to 16 insulate public stations from dependence on advertising dollars and to preserve the independence of 17 their programming decisions. Preserving diverse sources of funding helps insulate those same 18 stations from those who might attempt to buy influence. In any event, Plaintiff cites no facts or 19 evidence showing that the supposed ability of groups and individuals to “buy” influence in non- 20 commercial stations has affected the quality of public programming. 21 Furthermore, additional material before the Court demonstrates that the legislative 22 conclusions are supported by substantial evidence. The Temporary Commission on Alternative 23 Financing for Public Telecommunications (“TCAF”) was charged with examining the feasibility of 24 public broadcasting advertising through a limited advertising demonstration program after Congress 25 passed Section 399b. It explored financing options to maintain, enhance, and expand public 26 broadcast services to the American people, and as part of that task, it oversaw an experiment in 27 which some public television stations were permitted to broadcast advertisements under certain 28 restricted conditions. Pl.’s Mot., Ex. C at i. 19 1 The October 1983 report concluded that the benefit to noncommercial stations of 2 broadcasting commercial advertising “does not balance the potential risks identified in this report. 3 In sum, the demonstration program indicated that potential revenues from advertising are limited in 4 scope, while it did not show that significant risks to public broadcasting clearly would be 5 avoidable.” Id. at iii. TCAF therefore recommended continuing the advertising prohibition unless it 6 could be established that the overall benefits to public broadcasting would exceed the costs and that 7 stations that chose not to carry limited advertising would not share the risks associated with 8 advertising while not receiving direct benefits. Id. at iv. United States District Court For the Northern District of California 9 Plaintiff attacks TCAF’s October 1983 Report’s findings, arguing that the factual results of 10 the only experiment where public broadcasters actually aired paid commercials refute the conclusion 11 that paid advertising affects programming. Pl. Mot. at 12-13. Specifically, Plaintiff notes that 12 TCAF: 13 14 15 discovered no negative impact on viewing patterns, numbers of subscribers, or contributions except that the data did raise a question concerning a possible adverse impact on the average contribution per subscriber. Also, under the conditions of the experiment, the Commission found no advertising-related effects on programming. 16 Pl. Mot., Ex. C at ii. However, as the government notes, the conditions of the experiment were 17 artificial, involving agreements to freeze labor and copyright costs under the assurance that such 18 freezes would not constitute precedent if limited advertising were later allowed. Id. at 14, 37. 19 TCAF also noted that the risks associated with limited advertising could not be restricted solely to 20 the public stations who chose to advertise. Id. at 14. 21 Plaintiff criticizes TCAF’s ultimate findings as being conclusory and speculative, pointing to 22 a dissent to the TCAF’s recommendations which argued that the majority minimized quantitative 23 data regarding the benefits of advertising and stressed subjective and conjectural views. See 24 Separate Statement of National Telecommunications and Information Administration at 1-3. 25 However, Plaintiff ignores the fact that TCAF was not operating in a vacuum. It was charged with 26 exploring financing options that would help public radio and television maintain and enhance their 27 services to the American people. Id. at 1. Congress directed TCAF to “ensure that no proposed new 28 funding device would present an unacceptable risk of compromising the quality or content of public 20 1 broadcast programming.” In other words, the existing quality of public broadcasting under the 2 current diverse public broadcasting funding scheme depicted in the report is the factual background 3 underlying the report. 4 5 commercial educational stations to broadcast advertisements, including prohibitively higher labor 6 and union costs, id. at 27-30, increased payments to copyright owners, id. at 30-31, and reduced 7 funding from government, which then provided 36% of total public television income. Id. at 35. 8 Increased union and copyright fees themselves could lead to a “shift in the mix of programming 9 available to the public on public broadcasting.” Id. at 37. Accordingly, TCAF urged Congress to 10 United States District Court For the Northern District of California In addition, TCAF identified numerous problems that could result from permitting non- 11 continue the advertising ban. Furthermore, the government submitted evidence in the form of the Noll Report and Ozier 12 declarations that the commercial-free nature of public broadcasting furthers the government’s 13 interest because it “substantially increases the amount of certain kinds of programming that are 14 rarely provided by commercial broadcasters.” Noll Report at 5-6 (noting that “a great deal of 15 research” shows that an “advertiser-supported television system leads to an emphasis on mass 16 entertainment programming with insufficient attention to programs that serve a small audience,” 17 including educational programming; further noting prevalence of advertising of nutritionally 18 undesirable food and inclusion of violent content on commercial television); see also Ozier Decl. 19 ¶¶12-13; Yoo, Christopher S., Architectural Censorship and the FCC, Regulation, vol. 28, issue 1 20 (2005), at 24 (describing threat of consumer boycott of products advertised during a mini-series on 21 the Reagans aired on commercial television because of dissatisfaction with portrayal of former 22 president, as well as advertiser backlash resulting from NBC’s attempt to air a movie about Roe v. 23 Wade, 410 U.S. 113 (1973)). Furthermore, “[i]f non-commercial educational stations were 24 permitted to air paid advertisements from for-profit entities,” their other sources of funding would be 25 “jeopardized,” because viewers would be less inclined to support the activities of a station that they 26 do not perceive to be distinct from a commercial station, Ozier Decl. ¶¶ 7-9, constituencies would be 27 less likely to advocate for public funding, and underwriters would be less willing to pay for credits 28 to air alongside normal commercial advertisements. Id.; see also Noll Report at 7, 19 (noting that 21 1 the system of government subsidies is tied to the ability of stations to attract donations, and that 2 allowing advertising would “call into question the legitimacy of subsidies”). Moreover, if “non- 3 commercial broadcasters were permitted to transform corporate underwriting to commercial 4 advertising,” “non-commercial educational stations would become direct competitors of for-profit 5 stations,” which would end the distinction between commercial and public broadcasting. Noll 6 Report at 20; see also Ozier Decl. ¶ 10. United States District Court For the Northern District of California 7 Finally, the government’s interest would not be met by allowing paid advertising from 8 political candidates and advocacy organizations. As noted above, Congress’s goal was to insulate 9 public broadcasting from special interest influences, be they political, commercial, religious, or 10 otherwise. 127 Cong. Rec. 13145 (June 22, 1981) (remarks of Rep. Gonzalez). If non-commercial 11 educational stations were permitted to solicit underwriting from certain advertisers such as political 12 candidates, they would have a financial incentive to create non-controversial programs with mass 13 appeal, endangering the independence “that makes American public broadcasting the artistic and 14 journalistic prize that it is.” Id. at 13146. 15 As to whether or not Section 399b is narrowly tailored to further the government’s 16 substantial interest in preserving non-commercial broadcasting, the government notes that restricting 17 paid advertisements is the only way to ensure broadcast television programming free from undue 18 influence by paying advertisers on programming content. Thus, there is a reasonable fit between the 19 government’s goal and the restriction imposed. It is difficult to imagine another effective way the 20 government could carry out its goal of insulating public broadcasters from the pressures of 21 advertisers other than by restricting advertising. 22 Further, Section 399b restricts only paid speech that promotes a product or service offered by 23 a profit-seeking advertiser, expresses views with respect to a matter of public importance or interest, 24 or supports or opposes a political candidate. Stations may still carry programming that addresses 25 public issues and political candidates so long as they receive no remuneration for such 26 programming. 47 U.S.C. § 399b(a). They may also air advertisements from non-profit entities. 47 27 U.S.C. § 399b(a)(1). Meanwhile, the public maintains its unfettered access to paid advertisements 28 on the hundreds of other commercial broadcast stations. In addition, the number of commercial 22 1 cable stations without any advertising restrictions have dramatically increased in recent years due to 2 the growth of cable networks. United States District Court For the Northern District of California 3 As this Court previously recognized, the alternative advanced by Plaintiff of limiting the 4 length and frequency of political announcements or issue announcements would likely be 5 ineffective, because it would not protect broadcasters from the programming pressures resulting 6 from monetary incentives to accept paid advertising. See Dec. 21 Order at 13 n.3; Pl. Mot. at 16. 7 As WGBH Vice-President Ozier states in his declaration, “a noncommercial educational station 8 would be forced to change its programming if it were forced to rely on advertising from for-profit 9 sources . . . even if advertisements did not interrupt programming or if they were limited in length.” 10 Ozier Decl. ¶ 13; see also id. ¶ 16 (noting that even if a handful of noncommercial stations were to 11 air for-profit advertising, all public stations would face “consequences of a perceived deviation from 12 the public education mission” and hence “loss of funds from viewers, government, foundations, and 13 other sources,” as well as “favorable treatment for labor contracts, agreements with individual talent, 14 broadcast rights, and copyright privileges”). Such a restriction might partially mitigate, but would 15 not eliminate the same pressure. Significantly, the government’s choice need not be the least 16 restrictive means of achieving its goals. Turner I, 512 U.S. at 662. The government has 17 demonstrated that the statute is narrowly tailored to further a substantial government interest. See 18 League of Women Voters, 468 U.S. at 380. 19 3. Whether Section 399b Impermissibly Discriminates Between Types of Speech 20 Plaintiff’s first and third causes of action challenge the constitutionality of subsections (2) 21 and (3) of Section 399b(a), which prohibit broadcasters from broadcasting in exchange for 22 remuneration any program material intended to support or oppose any candidate for political office 23 or to express the views of any person on a matter of public importance. The challenged statutes, 24 while viewpoint neutral, are not content neutral. The statute does, however, allow unpaid speech 25 relating to political campaigns and issues of public importance. The statute also prohibits promotion 26 of “any service, facility, or product offered by any person who is engaged in such offering for 27 profit.” 47 U.S.C. § 399b(a)(1). But it allows identifications of donors and their services, including 28 “any aural or visual letters or words, or any symbol or sign, which is used for the exclusive purpose 23 1 of identifying any corporation, company, or other organization, and which is not used for the 2 purpose of promoting the products, services, or facilities of such corporation, company, or other 3 organization.” Id. § 399a. Plaintiff therefore maintains that the statute imposes greater restrictions 4 on certain non-commercial speech than on other types of commercial speech and non-commercial 5 speech. FAC ¶¶ 28-29, 34-35. United States District Court For the Northern District of California 6 Whether or not the statute impermissibly discriminates against non-commercial speech 7 presents a more difficult issue. Section 399b allows limited commercial speech, and in doing so 8 requires a content-based evaluation of advertisements. Specifically, the statute allows commercial 9 advertising in the form of logograms and identification of services, while prohibiting paid 10 advertising about views on matters of public importance and political candidates that lie at the core 11 of the First Amendment. Again, the statute allows unpaid core political speech, such as station 12 editorials. 13 As an initial matter, there is no evidence before the Court demonstrating that the statute 14 actually “imposes greater restrictions on noncommercial than on commercial” advertising. Cf. 15 Desert Outdoor Advertising v. City of Moreno Valley, 103 F.3d 814, 819 (9th Cir. 1996) (citing 16 National Advertising Co. v. City of Orange, 861 F.2d 246, 248 (9th Cir. 1988) (citing Metromedia, 17 453 U.S. at 513, 516)) (noting that ordinance is invalid if it imposes greater restriction on 18 noncommercial billboards or regulates those billboards based on their content). At the hearing, the 19 FCC pointed out that it has not yet addressed whether or not logograms may be used to identify 20 political donors. Consequently, it is not clear whether political candidates would be prevented from 21 running non-advocacy logograms on public television or radio. The Court cannot theorize about the 22 potential application of the statute to resolve Plaintiff’s facial challenge. 23 Assuming that the statute permits limited non-promotional paid commercial speech via 24 underwriting announcements but does not allow such paid announcements for political candidates, 25 the government argues that the latter announcements would be inherently promotional. The Court 26 agrees that political candidate announcements have an inherently promotional quality. “For 27 example, while an announcement identifying Exxon Corporation, producer of petroleum products 28 would be permissible, announcements identifying Exxon as the producer of ‘fine’ or the ‘best’ 24 United States District Court For the Northern District of California 1 petroleum products would be prohibited.” Pub. Broad Serv., 86 F.C.C. 2d at 155. But an 2 announcement identifying a particular politician’s campaign, for example, is of an inherently more 3 promotional nature. It would be difficult to distinguish identifying a candidate from promoting that 4 candidate. The candidate is what is being promoted, as opposed to a particular product or service 5 sold by a corporate sponsor.7 6 Congress reasonably determined that certain types of paid programming will undermine the 7 purposes of noncommercial programming, but that other types of paid programming will not. Paid- 8 for political, issue, and commercial advertisements were determined by the government to impact 9 programming decisions of noncommercial stations. By contrast, Congress determined that limited 10 underwriting announcements, which have now been used for nearly thirty years, would not threaten 11 programming. Similarly, Congress did not find that promotional materials sponsored by non-profit 12 organizations threatened the programming content of public stations. 13 Plaintiff relies heavily on the case Ballen v. City of Redmond, 466 F.3d 736 (9th Cir. 2006) 14 in support of its argument that Section 399b’s different treatment of types of speech 15 unconstitutional. Ballen was a First Amendment commercial speech case arising from a conflict 16 between a business’s use of outdoor advertising and a municipality’s signage ordinance. Id. at 740. 17 The city’s ordinance prohibited portable signs, such as sandwich boards, but carved out ten 18 exceptions, including allowing portable real estate and political signs. Id. The stated purpose of the 19 ban was to promote traffic safety and community aesthetics. Id. The Court struck down the 20 restriction because the exceptions to the ban, which discriminated between types of speech, 21 demonstrated that the ban was not reasonably tailored to fit the purposes it purportedly served. The 22 7 23 24 25 26 27 28 The government also relies on United States v. Edge Broadcasting Co., 509 U.S. 418, 434 (1993), noting that Congress may advance its interest in preserving the unique character of noncommercial broadcasting by limiting the types of messages for which non-commercial educational stations can receive remuneration, even if advertising is not completely eradicated. While this case only involved commercial speech, it supports the general proposition that Congress may validly limit the content of advertising on public broadcasting stations. In Edge, a broadcaster licensed in a state that prohibited lotteries brought an action against petitioners seeking a declaration that the Charity Games Advertising Clarification Act of 1988, 18 U.S.C. §§ 1304, 1307, violated its rights under the First Amendment. The broadcaster wished to broadcast lottery advertisements to its viewers in a state which sponsored a lottery, but such advertising was prohibited under the Act. Applying the four-factor test for commercial speech, the Court found that the statute directly advanced the governmental interest of supporting the anti-gambling law of one state, while not unduly interfering with the pro-gambling law of another, and that it was narrowly tailored. Id. 25 1 United States District Court For the Northern District of California 2 advertising sign appellant wanted to display contained purely commercial speech. The Court applied the four-part test of Central Hudson Gas & Elec. Corp. v. Public Serv. 3 Comm’n, 447 U.S. 557, 561-62 (1980), under which the validity of the restriction depends on: (1) 4 whether the expression is protected by the First Amendment, which requires the speech to concern 5 lawful activity and not be misleading; (2) whether the asserted governmental interest is substantial; 6 (3) whether the regulation directly advances the governmental interest asserted; and (4) whether the 7 regulation is not more extensive than necessary to serve that interest. Ballen, 466 F.3d at 742 (citing 8 Central Hudson, 447 U.S. at 566). The Court held that the regulation did not satisfy Central 9 Hudson’s fourth prong, which requires “that there be a reasonable fit between the restriction and the 10 goal” and that the regulation be narrowly tailored to achieve that goal, because the exceptions to the 11 sign ordinance were all content-based, and the city failed to show how the exempted signs reduced 12 “vehicular and pedestrian safety or besmirch[ed] community aesthetics any less than the prohibited 13 signs.” Id. at 743. In addition, the Court noted that, while the City chose to protect “ubiquitous real 14 estate signs,” which could “turn an inviting sidewalk into an obstacle course challenging even the 15 most dextrous hurdler,” its ordinance “unfairly restrict[ed] the First Amendment rights of, among 16 others, a lone bagel shop owner.” Id. 17 As the government notes, the situation here is very different from that in Ballen. The limited 18 broadcasting spectrum presents a significantly different context than do billboards. In Ballen, the 19 Ninth Circuit emphasized that the Supreme Court, in Metromedia, Inc. v. City of San Diego, 453 20 U.S. 490, 501 (1981), “cautioned that ‘[e]ach method of communicating ideas is a law unto itself 21 and that law must reflect the differing natures, values, abuses and dangers of each method.’” Ballen, 22 466 F.3d at 744. In Metromedia, the Court noted that the “law of billboards” was distinguishable 23 from the law of portable sandwich boards, since “billboards are fixed, permanent structures that are 24 more intrusive to community aesthetics.” Metromedia, 453 U.S. at 501. 25 Outdoor signage restrictions differ even more starkly from the public broadcasting 26 restrictions at issue here, which are intended to protect the quality, character, and benefits of public 27 broadcasting from the influence of market forces, in order to prevent it from becoming similar to 28 commercial television. If precedent regarding billboards is inapplicable to sandwich boards even 26 United States District Court For the Northern District of California 1 though both employ outdoor print media, then precedent regarding outdoor signs is even less 2 applicable to public broadcasting – a completely different method of communicating ideas. 3 Moreover, in Ballen, the Court found that the city failed to show how the exempted signs 4 reduced “vehicular and pedestrian safety or besmirch[ed] community aesthetics any less than the 5 prohibited signs.” 466 F.3d at 743. Similarly, in Metromedia, the Supreme Court noted that the city 6 did “not explain how or why noncommercial billboards located in places where commercial 7 billboards are permitted would be more threatening to safe driving or would detract more from the 8 beauty of the city.” 453 U.S. at 513. See also Berger v. City of Seattle, 569 F.3d 1029 (9th Cir. 9 2009) (where the City of Seattle’s rules required, in part, that street performers obtain permits for 10 performance at an entertainment center, the Court struck down the regulation, noting that the city’s 11 asserted interests in reducing disputes involving street performers and coordinating uses at a public 12 park were not promoted by the permitting requirements, because the permits were freely issued, did 13 not screen out hostile performers, and did not aid in coordinating multiple uses of the center’s 14 grounds); City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 425-26 (1993) (striking 15 down a content based regulation that favored non-commercial speech over commercial speech, 16 where the city did not establish a reasonable fit between its legitimate interests in safety and 17 aesthetics and its selective ban of commercial handbills, but not newspapers).8 By contrast, here, 18 there is a reasonable fit between the government’s purpose and the restriction imposed, since 19 commercial and political advertisements all yield similar commercial pressures on public stations, as 20 discussed below. 21 Plaintiff also argues that Ballen’s holding that “the City’s use of a content-based ban rather 22 23 24 25 26 27 28 8 In addition, this case is distinguishable from Desert Outdoor Advertising v. City of Moreno Valley, 103 F.3d 814, 820 (9th Cir. 1996), in which the court applied strict scrutiny. There, the applicable “exemptions require[d] City officials to examine the content of noncommercial off-site structures and signs to determine whether the exemption applies, [so] the City's regulation of noncommercial speech [wa]s content-based.” Here, in contrast, intermediate scrutiny applies. In addition, the Court held that “Moreno Valley Ordinance No. 133 [under which on-site structures and signs were limited to commercial structures and signs] unconstitutionally imposes greater restrictions upon noncommercial structures and signs than it does upon commercial structures and signs.” Id. As the government notes, the First Amendment permits more intrusive regulation of broadcast speakers than of speakers in other media. Turner I, 512 U.S. at 637. Furthermore, similar to the above cases, the Court in Desert Outdoor found that the City failed to show that it enacted its ordinance to further its articulated interests in aesthetics and safety. See 103 F.3d at 819. 27 United States District Court For the Northern District of California 1 than a valid time, place, or manner restriction indicates that the City has not carefully calculated the 2 costs and benefits associated with the burden on speech imposed by its discriminatory, content- 3 based prohibition” indicates that Section 399b is unconstitutional. 466 F.3d. at 743. The Ballen 4 Court noted that the city “could impose time, place, and manner restrictions on all commercial 5 signs.” Id. at 744. Here, however, it is not clear that limiting the number or length of 6 announcements, as Plaintiff suggests (Pl. Reply at 6), would further the governmental interest, as 7 noted above. Even allowing limited advertising would force public stations to divert a great deal of 8 resources into the market analysis that must accompany reliance on advertising income. Nor would 9 allowing paid political and issue advertisements serve the government’s purpose, as political and 10 issue advertisers, like commercial advertisers, generally want to reach as large an audience as 11 possible. While Congress did not undertake specific factual analysis to determine whether or not 12 issue and political advertisements specifically created commercial pressure on stations, Congress’s 13 determination that allowing such advertisements would create commercial pressures was a 14 reasonable, predictive legislative judgment that political advertisers would generally seek large 15 audiences. 16 Furthermore, broadcasters accepting money for paid political advertisements would also be 17 subject to pressure to tailor programming, since a great deal of money is spent on such advertising. 18 See Fed. Mot. at 15 (citing Appendix of Authorities, Tab 2 (AdWeek, Dec. 15, 2008 at 3) (noting 19 $2.2 billion spent on political advertisements in 2008). In addition, the government’s regulations 20 only apply to a small number of channels on television and radio. The public has access to paid 21 advertisements on the far more numerous commercial channels. In other words, the restriction itself, 22 by being limited to certain public stations, is somewhat analogous to a time, place, manner 23 restriction, if the Court were to apply the billboard and signage line of cases here. 24 Plaintiff also argues that the FCC’s allowance of promotional advertisements by non-profits 25 undercuts the government’s arguments that promotional issue and political advertisements “are . . . 26 dangerous to . . . non-commercial broadcasters.” Pl. Reply at 6. Specifically, Plaintiff points out 27 that Planned Parenthood was allowed to run a promotional advertisement, which Plaintiff seems to 28 equate with promoting abortions, a controversial topic. The underwriting announcement in question, 28 1 however, merely identified the organization Planned Parenthood, noting that it offers reproductive 2 health care services, including pregnancy testing and annual exams, among other things. The 3 announcement did not list abortion among those services. See Diercks Affidavit, Ex. A. The FCC’s 4 advisory opinion stated that the announcement was not an advertisement, because Planned 5 Parenthood was not a for-profit; did not violate Section 399b(1); and did not express views on 6 matters of public importance or interest in violation of Section 399b(2). In sum, the announcement 7 was neither specifically promotional nor expressive of a view on a matter of public importance. 8 This particular advisory opinion, therefore, does not support Plaintiff’s case. Finally, to the extent that Plaintiff claims that the statute impermissibly discriminates United States District Court For the Northern District of California 9 10 between different types of paid commercial speech, that claim fails. Section 399b allows paid 11 messages promoting products and services on behalf of non-profits, but does not allow other types of 12 paid advertising. Commercial speech may be content regulated. Cent. Hudson Gas & Elec. Corp. v. 13 Public Serv. Comm'n, 447 U.S. 557, 564 n.6 (1980) (“Two features of commercial speech permit 14 regulation of its content. First, commercial speakers have extensive knowledge of both the market 15 and their products. Thus, they are well situated to evaluate the accuracy of their messages and the 16 lawfulness of the underlying activity. In addition, commercial speech, the offspring of economic 17 self-interest, is a hardy breed of expression that is not particularly susceptible to being crushed by 18 overbroad regulation.”) (internal citations and quotations omitted). In addition, Congress reasonably 19 concluded that the broadcast of paid, promotional material for non-profit organizations did not 20 threaten the character and programming of public broadcasting, as viewers have not seen messages 21 from such entities as being inconsistent with the public education mission of public television, and 22 the small market for non-profit advertising is less likely to generate conflicts with a public 23 broadcaster’s educational mission and does not threaten traditional funding sources. See Ozier Dec. 24 ¶ 15. 25 C. Whether § 399b is Unconstitutionally Vague 26 “To pass constitutional muster against a vagueness attack, a statute must give a person of 27 ordinary intelligence adequate notice of the conduct it proscribes.” Dec. 21 Order at 15-16 (citing 28 U.S. v. 594,464 Pounds of Salmon, 871 F.2d 824, 829 (9th Cir. 1989)). Plaintiff claims that Section 29 1 399b(a)(1), which prohibits any paid message intended to promote any service, facility, or product 2 offered by any person who is engaged in such offering for profit, is vague because of the term 3 “promote.” Yet, as this Court previously noted, the general concept of promoting a product or 4 service is one that is easily grasped by a person of ordinary intelligence in this modern age of 5 commercial marketing and would appear to be a term of “common understanding.” Dec. 21 Order at 6 17 (citing Cal. Teachers Ass’n v. Board of Educ., 271 F.3d 1141, 1152 (9th Cir. 2001)). This Court 7 further stated: 8 9 United States District Court For the Northern District of California 10 11 12 The term is no less precise than the terms cited in California Teachers that survived facial vagueness challenges. In addition, it is not likely that any ambiguity in the terms of § 399b(a)(1) will chill any more than a negligible amount of commercial speech. See id. at 1151 (citing Bates v. State Bar of Arizona, 433 U.S. 350, 380-81 (1977) (commercial speech unlikely to be chilled because commercial entities have strong economic interest in engaging in such speech). 13 Dec. 21 Order at 17. 14 Assuming that the Court may “perhaps to some degree” consider the FCC’s interpretation of 15 the statute in evaluating whether the statute is vague, see Grayned v. City of Rockford 408 U.S. 104, 16 110 (1972), as Plaintiff urges the Court to do, arguable inconsistencies in a statute’s application in a 17 handful of cases do not condemn a statute. If such limited inconsistencies rendered statutes 18 unconstitutionally vague, the majority of statutes would probably not survive a vagueness challenge. 19 Rather, “uncertainty at a statute’s margins will not warrant facial invalidation if it is clear what the 20 statute proscribes ‘in the vast majority of its intended applications.’” California Teachers Ass’n, 271 21 F.3d at 1151 (quoting Hill v. Colorado, 530 U.S. 703, 733 (2000) (rejecting vagueness challenge) 22 (quotation marks omitted)). As in Grayned, the words of the statute here are marked by “flexibility 23 and reasonable breadth, rather than meticulous specificity,” and “it is clear what the ordinance as a 24 whole prohibits.” 408 U.S. at 110 (quoting Esteban v. Central Missouri State College, 415 F.2d 25 1077, 1088 (8th Cir. 1969)). 26 Plaintiff argues that the FCC has made numerous “admissions” by acknowledging that it is 27 difficult at times to distinguish between which announcements promote and which merely identify, 28 and that it only expects “public broadcast licensees to exercise reasonable, good faith judgments in 30 United States District Court For the Northern District of California 1 this regard.” See FAC ¶ 14 (quoting Memorandum Opinion and Order in Docket No. 21134, 90 2 F.C.C.2d 895, 911 (1982)). As the government points out, however, the fact that it may at times be 3 difficult to distinguish promotional announcements from identifying announcements simply 4 illustrates the utility of the Commission’s periodic guidance on its underwriting standards, and does 5 not mean that the statute is unconstitutionally vague.9 In fact, under the FCC’s rules, a station that is 6 unsure of whether a particular underwriting announcement would run afoul of the statute may seek 7 informal guidance or formal clarification from the agency. 47 C.F.R. § 1.2. Plaintiff also maintains 8 that the FCC’s statements show that the prohibitions are not set out “precisely,” but precision is not 9 constitutionally required. Finally, Plaintiff argues that the FCC’s amorphous and subjective 10 enforcement standards lead to arbitrary and discriminatory enforcement by the FCC. Plaintiff’s 11 examples, however, do not show that the FCC’s enforcement is arbitrary or discriminatory. 12 Plaintiff cites a handful of examples of FCC interpretations permitting broadcasters to run 13 underwriting announcements that Plaintiff contend are clearly promotional. See, e.g., Diercks 14 Affidavit, Ex. D & Brown Decl. ¶ 2, Ex. A (announcement run by Lakeshore Communications 15 stating “I wish there was a place to buy all the Christian music I hear on Q90. . .”); Ex. E 16 (announcement run by WESM-FM Radio reading “This hour of Rhythm and Romance is made 17 possible by a grant from Arista Records . . . . New this month from Arista, Lisa Stanfield’s All 18 Around the World . . .”). As the government notes, however, the FCC sent Lakeshore 19 Communications a warning letter about the Christian music announcements, stating that although 20 the announcements were not as egregious as some others, the FCC expected the station to better 21 conform its underwriting announcements to FCC guidelines in the future. Diercks Affidavit, Ex. D; 22 Brown Reply Decl., Ex. A. While Plaintiff disputes that this letter constituted a warning, it clearly 23 put Lakeshore on notice. The Commission issues warning letters in lieu of formal enforcement if it 24 appears that the violation complained of was minor or the licensee has an otherwise unblemished 25 26 27 28 9 The government also notes that the agency’s administrative guidance serves to further “narrow potentially vague or arbitrary interpretations” of the statute. Village of Hoffman Estates v. Flipside, Hoffman Estates, 455 U.S. 489, 504 (1982) (“In economic regulation especially, such administrative regulation will often suffice to clarify a standard with an otherwise uncertain scope. ”). However, the ordinance in Hoffman did not embrace non-commercial speech and only had an attenuated relationship to commercial speech, so it is not clear that this principal applies here. 31 1 record. See In re Commission’s Forfeiture Policy Statement & Amendment of Section 1.80 of the 2 Rules to Incorporate the Forfeiture Guidelines, 12 FCC Rcd 17087, 17102 (1997) (“We agree that 3 warnings can be an effective compliance tool in some cases involving minor or first time 4 violations.”). As the government notes, the second announcement by WESM-FM identifying Arista 5 Records is more in the nature of an identification than overt marketing. Diercks Affidavit, Ex. E. United States District Court For the Northern District of California 6 Plaintiff also cited two underwriting announcements from WETA FM, which apparently 7 violated the FCC Rules. See Pl. Mot. at 24-25; Diercks Affidavit, Ex. F at 84-85. But the agency 8 never received a complaint about the first announcement to which Plaintiff refers, and with respect 9 to the second underwriting announcement, the FCC dismissed the complaint on procedural grounds 10 without deciding whether or not the language contained a substantive violation. See Brown Reply 11 Decl. ¶ 3, Ex. B. 12 In any event, a handful of examples of FCC rulings and guidance that arguably tolerate some 13 promotional announcements does not suffice to show that the statute is unconstitutionally vague. 14 Plaintiff has failed to introduce evidence of FCC enforcement decisions sufficiently inconsistent as 15 to show that the statute is unconstitutionally vague on its face and not capable of giving notice of the 16 proscribed conduct. In sum, Plaintiff does not identify anything in Section 399b(a)(1) itself that is 17 unconstitutionally vague. 18 IV. 19 20 21 22 CONCLUSION For the foregoing reasons, the Court grants Defendant’s motion for summary judgment and denies Plaintiff’s motion for summary judgment. IT IS SO ORDERED. Dated: August 19, 2009 ELIZABETH D. LAPORTE United States Magistrate Judge 23 24 25 26 27 28 32

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