February 1973] BOOKS REVIEWED 465 It appears that the market, possibly with some Commission supervision, will provide the most fluent mechanism for reallocation of resource uses both in terms of reordering the present uses of spectrum and cable and, once reordered, in terms of determining what firms and institutions are to have access to each. This point is hardly new. It merely puts in broader context the longstanding arguments for replacing the present regulatory method of allocating spectrum use with one rooted in the market." Because it would enlarge and consequently enhance the market's operation, incorporation of cable in the communications resource gives the arguments added conceptual force. Their wisdom notwithstanding, the arguments for introducing market factors into spectrum allocation have consistently failed to attract the support of Congress or the FCC, and this suggests that, even invigorated by cable economics, they may not prevail through legislative or administrative decision. Absent legislative or administrative decisions favoring resource integration and introduction of a market basis, it is entirely possible that cable, unless its growth is sharply curtailed by government regulation, will on its own compel the evacuation of current VHF and UHF uses from the electromagnetic spectrum. A central consequence of spectrum scarcity and the presence in any locality of a restricted number of channels received is that, to survive competition, broadcasters must structure their message to appeal to the largest possible audience." This accounts, of course, for the orientation of television programming to what is often characterized as the lowest common denominator in the national audience but is, in fact, more in the nature of an average and, as such, probably reflects the precise program interests of relatively few: just as there are some television viewers who would prefer less violence on their sets, so there are some who doubtless would prefer more; for some the flurry of quiz and game shows is a glut, for others not nearly enough. Cable possesses the technical capacity to attract, through separate channels, the highly particularized interests of the many minorities that now make up over-the-air broad 47. See H. LEVIN, THE INVISIBLE RESOURCE: USE AND REGULATION OF THE RADIO SPECTRUM (1971); Coase, The Federal Communications Commission, 2 J. Law & Econ. I (1959); cf. PRESIDENT'S TASK FORCE ON COMMUNICATIONS POLICY, FINAL REPORT ch. 8, at 28-40 (1968); DeVany, Eckert, Meyers, O'Hara & Scott, A Property System for Market Allocation of the Electromagnetic Spectrum: A Legal-Economic Engineering Study, 21 STAN. L. Rev. 1499 (1969). 48. Prospects for program diversification by UHF broadcasting were stunted by the FCC's failure, at the new industry's outset, to posture it competitively with the entrenched VHF industry and, once the disabling effects for UHF of this posture became evident, by the Commission's temporizing, wholly inadequate interim solutions. See generally Note, The Darkened Channels: UHF Television and the FCC, 75 HARV. L. Rev. 1578 (1962). It has been persuasively argued that the AllChannel Television Receiver Law, 47 U.S.C. § 303(s) (1970), designed to bolster UHF use, has had few beneficial effects for the industry, and still fewer for the public and that, given the industry's present state, other diversification alternatives, such as those posed by CATV expansion, are more desirable. Webbink, The Impact of UHF Promotion: The All-Channel Television Receiver Law, 34 LAW & CONTEMP. PROB. 535 (1969). 466 STANFORD LAW REVIEW [Vol. 25: Page 449 casting's averaged majority. Given the prospects for national cable networking through use of domestic satellites, the storage and retrieval possibilities of electronic video recording, the interests of advertisers in exposure to more defined markets at a lower overali cost and, in many cases, the willingness of subscribers to pay directly for what they receive over the cable, the economic prospects also appear strong. If the role to be played by CATV in local and regional political and service programs is added to this," together with the critical constant of a finite number of hours of viewer time, the prospects for attenuation in the role of VHF and UHF broadcasting become clear.50 2. CATV: constitutional implications. It is evident also that the growth of cable, whatever the form and source of its eventual accommodation to the presently entrenched system, will at some early point require, first, reconsideration of the constitutional posture of a large area of FCC regulation and, second, consideration of the need for regulation in at least one presently untouched area. The first area involves the Commission's regulation of broadcast content: simply, the notion that has traditionally provided the constitutional premise for the Commission's actions in the area—that it is a scarce resource that is being regulated-no longer obtains. Second, as the amount of messages transmitted expands from a number bounded by the constraints of spectrum to one measured by the far more commodious ambit of cable, some aspects of the regulatory task will alter. While an objective of regulation will still 49. See text accompanying notes 101-02 infra. 50. PRESIDENT'S TASK FORCE ON COMMUNICATIONS POLICY, supra note 47, ch. 7, at 41-42, makes a more conservative appraisal of cable's impact, at least for the short term: "It is important, therefore, to determine the likely impact of cable development on our over-the-air system. Our studies do not indicate that there would be a serious competitive injury to affiliates of the major national networks, which carry the most popular programs, or to independent VHF stations which are, by and large, well established. The same should be true of UHF stations which obtain network affiliation, a development depending chiefly on the extent of UHF receiver penetration in the particular market. When speaking of expansion in this context, therefore, we mean primarily the continued development of independent (non-affiliated) UHF stations." The Report is not altogether clear, though, as to whether its findings presuppose a cable system engaged only in signal retransmission or one engaged in substantial program origination with advertiser or subscriber support. It seems likely that it contemplated the first sort of system, the impact of which would be considerably less than that of the second. See also Comanor & Mitchell, The Costs of Planning: The FCC and Cable Television, 15 J. LAW & ECON. 177, 183–88 (1972); Park, The Growth of Cable TV and Its Probable Impact on Overthe-Air Broadcasting, 61 Aм. Econ. Rev. 69 (1971). Although there is little information on the potential of over-the-air subscription television systems for siphoning programs and talent, and consequently audiences, from over-the-air "free" TV, there seems to be general agreement that siphoning will occur at some level. "Of the various arguments raised by STV opponents, we find that of so-called selective program siphoning most persuasive. It is at least conceivable that a successful nationwide STV system, even though possibly not having as much money as free TV to spend for program product, could, by directing its purchases at select programs, e.g., the World Series or professional football games, take them from free TV and require the huge audiences of those programs to pay to see them or not see them at all." Committee Report on STV, 10 P & F RADIO REG. 2d 1617, 1661 (1967). The committee apparently recognized that the siphoning effects of cable-based, as opposed to over-the-air, STV systems would be considerably greater. Id. at 1725-28. The Commission's 1972 rules tightly restrict CATV conversion to an STV basis. See 47 C.F.R. § 76.225 (1972). February 1973] BOOKS REVIEWED 467 be the public's reception of a socially useful range of information, the means for attaining the objective will have to change from rules designed to cram this range into a limited transmission capacity to rules designed to facilitate informed viewer choice of programs and services from among the multitude offered. The constitutional issue, though long ripe, has been consistently ignored. In another context, discussing the standards to be applied by the FCC in reviewing broadcast licenses, Commissioner Johnson noted that "the FCC is prohibited from censorship of broadcasters, and we have personally expressed our distaste for all forms of censorship many times," and asserted: If the broadcaster is to continue as a "trustee" of public property, he must be accessible to the community and reasonably responsive to its needs and wishes. He must be willing to motivate and inspire the public, as well as to entertain it. He must practice journalism that, while it is free, serves the community that supports it. To be responsible, a broadcaster in modern society needs to televise more than network reruns and old movies interspersed with countless appeals to the viewers' pocketbooks.51 53 Considerations of this sort, together with those that underlie the Commission's fairness doctrine" and the statutory equal time prescription," may appear to serve eminently worthwhile objectives. But this should not obscure the fact that, no less than censorship, they impose upon broadcasters a governmental judgment respecting types of subject matter appropriate for dissemination, a judgment that would not, for instance, easily be accepted in the context of newspaper or magazine publication." Justice Frankfurter stated the classic rationale for this imposition in NBC v. United States:55 "Freedom of utterance is abridged to many who wish to use the limited facilities of radio. Unlike other modes of expression, radio inherently is not available to all. That is its unique characteristic, and that is why, unlike other modes of expression, it is subject to governmental regulation." Fitting in the context of the then existing technology, the rationale has not been examined in the light of modern conditions. In Red Lion Broadcasting Co. v. FCC," for example, the 51. Johnson, Book Review, 23 STAN. L. REV. 173, 192-93 (1970). 52. See generally Editorializing by Broadcast Licensees, 13 F.C.C. 1246 (1949); Applicability of the Fairness Doctrine in the Handling of Controversial Issues of Public Importance, 29 Fed. Reg. 10416 (1964). 53. 47 U.S.C. § 315 (1970). 54. Cf. Weaver v. Jordan, 64 Cal. 2d 235, 411 P.2d 289, 49 Cal. Rptr. 537, cert. denied, 385 U.S. 844 (1966), in which the California supreme court struck down the state's "Free Television Act"which undertook to ban the business of home subscription television-as an abridgement of the free speech guarantees of the state and federal constitutions. 55. 319 U.S. 190 (1943). 56. Id. at 226. Even in its immediate context, the full logic of Justice Frankfurter's position was not the happiest. As Professor Kalven has observed, "[t]he passage catches a great judge at an unimpressive moment." Kalven, Broadcasting, Public Policy and the First Amendment, 10 J. LAW & ECON. 15, 43 (1967). 57. 395 U.S. 367 (1969). 468 STANFORD LAW REVIEW [Vol. 25: Page 449 Court gave the classic response to petitioner's argument that imposition of the Commission's fairness doctrine violated its first amendment rights: Otherwise, station owners and a few networks would have unfettered power to make time available only to the highest bidders, to communicate only their views on public issues, people and candidates, and to permit on the air only those with whom they agreed. There is no sanctuary in the First Amendment for unlimited private censorship operating in a medium not open to all.58 9959 With the observation that "[s]carcity is not entirely a thing of the past,' and couching its answer exclusively in terms of the spectrum resource, the Court specifically rejected petitioner's argument that “even if at one time the lack of available frequencies for all who wished to use them justified the Government's choice of those who would best serve the public interest by acting as proxy for those who would present differing views, or by giving the latter access directly to broadcast facilities, this condition no longer prevails so that continuing control is not justified." The Court's failure even to mention cable's implications for the scarcity predicate is particularly curious in view of its remarks in two decisions rendered the previous term on the new technology's bold prospects."1 The facts underlying United States v. Midwest Video Corp., a case decided just last term, moved one step closer to the center of the question of cable's implications for the continued vitality of the scarce resource rationale. Involved in Midwest Video was petitioner's challenge to an FCC rule that, to be permitted to retransmit broadcast signals, any CATV system with 3,500 or more subscribers must also, to.a significant extent, engage in "cablecasting." Sustaining the Commission's authority to require that cable systems undertake program origination, the Court came close to uncovering the scarce resource dilemma: To be sure, the cablecasts required may be transmitted without use of the broadcast spectrum. But the regulation is not the less, for that reason, reasonably ancillary to the Commission's jurisdiction over broadcast services. The effect of the regulation, after all, is to assure that in the retransmission of broadcast signals viewers are provided suitably diversified programming[,] the same objective underlying regulations sustained in National Broadcasting Co. v. United States . . . as well as the local carriage rule reviewed in Southwestern and subsequently upheld." Because, unlike Red Lion, Midwest did not directly involve Commission regulation of content, the Court was not forced to face the scarce resource 58. Id. at 392. 59. Id. at 396. 60. Id. 61. Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968); United States v. Southwestern Cable Co., 392 U.S. 157 (1968). 62. 406 U.S. 649 (1972). 63. 47 C.F.R. § 76.201 (1972). 64. 406 U.S. 649, 669 (1972). February 1973] BOOKS REVIEWED 469 issue squarely." In a case combining the context of Midwest with the issue of Red Lion-a case involving, for example, application of the fairness doctrine to cablecasting-the question would be hard to avoid." 67 None of this is to say that, with cable's emergence and the consequent erosion of the scarce resource rationale, both broadcasting and cablecasting will fall entirely beyond the Commission's constitutional reach. There remains considerable room for government regulation of other than content, regulation of the sort sustained in the context of newspaper publication and, in fact, in both the Midwest and Southwestern cases. Nor is this to suggest that the Commission will not continue to have an important role to play in encouraging the realization of first amendment objectives. The new fact of abundance in the transmission resource simply underscores the dwindling need for promotion of diversity at the source and the increasing need for filtration at the point of reception. The prospects for an information-rich transmission environment are now too distant, and the literature on the attendant needs for filtration. devices too sparse, for any prudent forecast to be made either about the procedures and programs that will or should be employed to encourage informed viewer choice, or about the mix of regulatory and market mechanisms that implementation will or should entail. The daily newspaper's television page, TV Guide, and program advertising broadcast throughout the day presently serve the former function and it is possible that, with some alterations in format, they will continue to serve it. One channel might, for instance, be devoted entirely to providing information on the programs and services available on the other channels. As noted in the discussion of privacy below, the more distant future may promise a computer 65. Although at one point in its opinion the Court acknowledged the content effects of the program origination rule, it finessed the issue by a comparison to rules aimed at technical quality: "In essence the regulation is no different from Commission rules governing the technological quality of CATV broadcast carriage. In the one case, of course, the concern is with the strength of the picture and voice received by the subscriber, while in the other it is with the content of the programming offered. But in both cases the rules serve the policies of §§ 1 and 303(g) of the Communications Act on which the cablecasting regulation is specifically premised . . . and also, in the Commission's words, 'facilitate the more effective performance of [its] duty to provide a fair, efficient and equitable distribution of television service to each of the several States and communities' under § 307(b)." Id. at 669-70. Justice Douglas, dissenting, dismissed this in a footnote: "In light of the striking difference between origination and communication, the suggestion that 'the regulation is no different from Commission rules governing the technical quality of CATV broadcast carriage' . . . appears misconceived," id. at 678 n.1. The dismissal was made without reference to the constitutional issue. 66. Close analogues of both the fairness and equal time requirements have been imposed by the FCC upon CATV systems engaged in cablecasting. 47 C.F.R. §§ 76.205, 76.209 (1972). “[T]he requirement that broadcasters present both sides of controversial issues of public importance-an obligation inherent in the public interest standard and properly imposed on broadcasters by the Commission to implement congressional policy (Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 379–86), would be grossly circumvented if the CATV subscriber receives both sides when he tunes his television set to a broadcast channel at a time when broadcast program material is being presented but only one side when he switches to a CATV origination channel or stays tuned to the broadcast channel at a time when CATV origination has been substituted for deleted broadcast material." Experimental, Auxiliary, and Special Broadcast and Other Program Distributional Services, First Report and Order, 34 Fed. Reg. 17651, 17658 (1969). 67. See, e.g., Citizen Publishing Co. v. United States, 394 U.S. 131 (1969). |