Section 399b of the Communications Act bans advertising for for-profit companies, as well as political and issue advertising, on noncommercial radio and television stations.  While Congress over 20 years ago loosened some restrictions on fundraising by allowing paid ads by nonprofit groups on noncommercial stations, and permitting commercial entities to provide some minimal information about their businesses (including their logos) on sponsorship underwriting on public TV, the ban has otherwise prohibited commercial and political ads containing qualitative claims, price information or calls to action.  In a recent decision, the US Court of Appeals for the Ninth Circuit affirmed a decision of a California District Court upholding the constitutionality of that ban against a challenge by a noncommercial TV station operator who contended that the rule was an unconstitutional abridgement of the First Amendment.  The case is particularly interesting not just for the analysis by the Court in upholding the ban, but perhaps more so for the dissenting opinion of the Court’s Chief Judge, who found that the Court’s analysis ignored modern realities of the broadcast world in adopting a reduced standard of First Amendment protection for broadcasters leading the majority to be too timid in questioning the justification for the ban advanced by the government.  Thus, the case has importance not just for noncommercial broadcasters looking for new sources of revenue, but also for other broadcasters concerned about intrusive government regulation of their industry and the standard of First Amendment review that would be applied to such regulation.

We had written about an earlier decision in this case here and here.  The case arose when a public television operator in the San Francisco area, Minority Television Project, Inc., was fined by the FCC for having run promotional ads for commercial and political advertisers, and decided to fight that ban in court.  A panel of the Court of Appeals determined that the fine was appropriate for running commercials for for-profit companies, but unexpectedly threw out the Section 399b restriction on ads on political or controversial issues, finding that the public good of speech on these topics outweighed the government’s interest in fostering public broadcasting.

In this week’s review of the panel’s decision, the majority decision of the Court was that the legislation was consistent with the promotion of a legitimate government interest – the preservation of public broadcasting which provides a unique programming source to the country, featuring more news and informational programming than that offered by the commercial media. The Court applied “intermediate scrutiny” in its First Amendment analysis, determining that, as the statute was rationally related to an important government goal – preserving public broadcasting – the statute should stand and all ads for for-profit companies and for political candidates and causes should be banned.

The determination to apply this level of “intermediate scrutiny” was a source of concern for the dissenting Judge.  In most First Amendment decisions, “strict scrutiny” is applied to any government regulation that imposes content-based restrictions on speech.  Under a strict scrutiny analysis, the Court must not only conclude that the regulation fosters an important government goal – but also that the regulation imposed is the least restrictive means of fostering that goal.  Here, as the law made distinctions between advertising by nonprofit and for-profit entities, the restrictions were clearly based on the content of the speech.  But the Court did not apply the strict scrutiny test.  Why?  Because broadcasting is considered to be different from most other speech.

Broadcasting, because of its reliance on limited public spectrum and the its intrusive nature, being able to reach people in homes or cars when they inadvertently tune to a radio or TV channel, has traditionally been accorded this reduced level of First Amendment protection – not requiring that theleast intrusive regulation be used to meet a legitimate government purpose, but instead that there only be a rational basis for the regulation.  The dissenting Judge felt that this intermediate scrutiny was too nebulous, seemingly allowing the government to come up with speculative conclusions to support its regulation of speech.  The judge claimed that this led to Courts finding that regulation was justified when the Court didn’t like the speech being regulated, and that it was not if the regulation was applied to speech that the Court liked. 

The dissenting Judge suggested that this was a lousy way to review regulation of the most important government protection – that of Freedom of Speech.  In his opinion, all speech regulation should be subject to strict scrutiny, and only allowed where the government could demonstrate that it had a compelling interest in the goal of the regulation, and that interest could not be achieved in any other way.  In the case of noncommercial broadcasting, the Judge concluded that the government could make sure that noncommercial stations continued to provide unique programming in other ways – by for instance, limiting the number of commercials, or requiring that they only be run during specified times (between different programs, rather than by breaking up programs themselves).  The very fact that the FCC required that noncommercial stations be owned by nonprofit groups would also serve to insure that these groups did not just run programming to maximize revenue. 

Technological change also, in this Judge’s opinion, undermined the special First Amendment standard that is applied to broadcasters.  With the Internet providing new competition, the need for this special regulation of broadcasters is unnecessary.  Thus, the Judge concluded, the different treatment of ads for for-profit and non-profit groups did not withstand First Amendment scrutiny, and it should be overturned.

The dissenting judge’s plea for a new standard for reviewing the First Amendment rights of broadcasters was rejected by the full Court, finding that the standard could have been rejected by the Supreme Court in its review of the FCC’s indecency rules, but it was not.  Thus, the Court felt powerless to change the standard of review on its own.  But we can expect that this kind of objection to a lower threshold for upholding regulation of broadcasters than of other First Amendment speakers will be raised again in the future.  Fox raised it in connection with the indecency case, and other broadcasters have questioned the basis for the unique First Amendment standard in light of the technical changes in the media landscape which undercut the scarcity argument, and where many competitors will be just as intrusive in coming years with more widespread wireless broadband.  While the dissenting judge may not have prevailed in this case, his arguments may well, in the future, win the day.