FCC Casts Doubt on Constitutionality of Leased Access

As expected, the FCC has proposed a major overhaul of its leased access rules, but it is also potentially taking a wrecking ball to the regs, asking for comment on whether the rules should be struck altogether given the First Amendment impact on cable speakers and the "dramatic changes in technology and the marketplace for the distribution of programming [that] cast substantial doubt on the constitutional foundation for our leased access rules."

That is according to a draft Report and Order and Further Notice of Proposed Rulemaking (FNPRM) posted on the FCC's website, as it does three weeks before items are scheduled to be voted on in a public meeting, in this case the June 6 meeting.

The R&O, which likely has three Republican votes for passage and thus will likely become the new law (make that rule) of the land--though perhaps only briefly--would, first off, vacate the 2008 leased access rules, which were challenged by cable operators, stayed by a court, and never went into effect anyway, in part due to ongoing Paperwork Reduction Act issues cited by the Office of Management and Budget, which must sign off on the reporting requirements in new regs.

Related: Pai Proposes to Ax Part-Time Leased Access

As chairman Pai signaled in his blog this week, it would also eliminate the requirement that cable operators provide channels for part-time leased access.

Currently, small systems are only required to respond to "bona fide" requests for time (as opposed to requests for information). The order would extend that to all systems. It would also extend the time frame for responding to such requests from 15 calendar days to 30 calendar days and from 30 to 45 days for smaller systems.

Cable operators would also be able to charge up to a $100 application fee per request and charge a security deposit of up to 60 days worth of the lease fee.

It declined to require cable operators to carry leased access in HD, or to limit the insurance cable ops can charge leased access programmers.

It would require cable operators to provide leased access programmers with contact info for the person handling leasing, and "adopt common-sense modifications to our procedures for resolving leased access disputes."

The FCC would not require cable operators to carry a leased access channel on only a portion of their system. The draft agrees with Charter that leased access was never meant to be implemented in that "piecemeal" fashion. "Indeed, if the Commission permitted every leased access programmer to...request a custom service area, the ensuing technical and operational burdens on cable operators easily could become unmanageable," the draft said.

The FNPRM proposes to modify the leased access rate formula so that it is specific to the tier on which it is carried and "the statutory leased access requirements or the Commission’s other leased-access rules continue to withstand First Amendment scrutiny in light of the market changes discussed in this order? If not, what discretion does the Commission have to reduce the burdens."

The order makes it clear that the FCC is skeptical that the rules can pass constitutional muster, laying it out in a summation that should be music to the ears of cable operators long arguing that leased access and other must-carry mandates impinge on cable's editorial discretion.

"The changes in the video marketplace...call into question whether our leased access rules are consistent with the First Amendment," the order said. "Specifically, while the leased access rules were originally justified as safeguarding competition and diversity in the face of cable operators’ monopoly power, the growth in available platforms to distribute programming seems to have eroded this justification...

"We agree that dramatic changes in technology and the marketplace for the distribution of programming cast substantial doubt on the constitutional foundation for our leased access rules. We recognize that we rejected similar constitutional arguments in the 2008 Leased Access Order, which we vacate today [the order is looking ahead to a June 6 vote].

"Our analysis has changed because the facts have changed: The growth in alternative outlets for programmers—particularly on the internet—has exploded in the decade since the adoption of the 2008 Leased Access Order. Given this proliferation of new distribution platforms, we now find that the First Amendment concerns raised by commenters provide additional reason to interpret the statutory obligations of Section 612 in a manner that reduces burdens on the speech of cable operators. We do so here by, among other things, eliminating the Commission rule requiring that cable operators make leased access available on a part-time basis.

"While our rule changes are independently and sufficiently supported by the policy justifications above, we note that constitutional concerns rely on the same premise: that changes in the video marketplace have substantially weakened the justifications for leased access."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.