Cable television giant Time Warner
Entertainment Co. lost a Supreme Court appeal Tuesday that tried to
keep the government from limiting the number of customers the
largest companies can serve.
The court, without comment, turned down the company's argument
that such limits — intended to preserve diverse cable TV
programming — violate the Constitution's First Amendment
free-speech protection.
The company had also challenged the government's authority to
limit the number of channels a cable system can fill with networks
in which it has a financial interest.
The provisions were part of the 1992 Cable Television Consumer
Protection and Competition Act. The law also allowed cable TV rates
to be regulated and barred cable companies from being granted
exclusive franchises.
In enacting the law, Congress found that cable operators had
"undue market power" over consumers and video programmers.
Congress also found that system operators often share ownership
with cable networks and have an incentive to include those networks
in their channel lineups. For example, cable operator Viacom owned
MTV, Showtime and Nickelodeon, cable operator TCI had a financial
interest in American Movie Classics, the Discovery Channel and QVC
Networks.
The actual limits set by the Federal Communications Commission
are being challenged in a separate case. The FCC said each cable
operator could serve no more than 30 percent of the nation's
subscribers, and cable systems could fill no more than 40 percent
of their channels with affiliated programming.
In Tuesday's case, Time Warner challenged Congress' authority to
set such limits.
The U.S. Circuit Court of Appeals for the District of Columbia
upheld them, saying Congress did not favor one type of speech over
another. "It merely expressed its intention that there continue to
be multiple speakers,"the court said.
In appealing to the Supreme Court, Time Warner's lawyers said
the limits "are textbook violations of free speech" similar to
limiting the number of copies a newspaper can print or limiting the
space a newspaper can fill with its own editorial content.
The limits should be subject to the strictest level of
free-speech inquiry, the company's lawyers said.
Justice Department lawyers said cable TV is a "dominant
nationwide video medium" and the rules were intended to keep
companies from exercising monopoly power.
In 1997, the justices upheld another provision of the 1992 law
that required cable systems to set aside up to one-third of their
channels for local broadcast stations. Cable companies had argued
the law violated their free-speech rights by forcing them to carry
stations they would rather drop.
The case is Time Warner Entertainment Co. v. Federal
Communications Commission, 00-623.
