Can Google-TV Help Liberate Cable-TV?

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Category: Business Regulation, Computer Law, First Amendment, Media & Journalism
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Tech nerds and media junkies have been buzzing lately about Google’s announcement that it will soon rollout Google-TV — a new device/platform that will turn people’s televisions into portals for online video and other web content.

Google representatives unveiled the project last week at a developers conference where they staged a Steve Jobs-like showcase that included animated demonstrations and bold statements about the end of TV as we know it.

Much of this was puffery, of course, but there is no denying Google’s determination to expand its dominion over the communications universe, nor the inevitability of the web’s eventual absorption of traditional television.

These two things terrify broadcast and cable executives. But the advent of web television might benefit traditional TV businesses –- particularly cable companies –- in one important category: First Amendment protection.

Even though the courts have long acknowledged that cable television is a First Amendment-protected medium, they have assigned it a kind of second-class constitutional status, based on the premise that cable markets are not sufficiently competitive.

In 1994, the U.S. Supreme Court held in Turner Broadcasting v. FCC that cable companies operate as effective monopolies, creating bottlenecks for the dissemination of video content in the communities where they operate. As a result, most government regulation of cable is subject to only an intermediate level of First Amendment scrutiny.

In Turner, the Court upheld the constitutionality of the must-carry rules, which require cable operators like Time Warner and Comcast to add the signals of local broadcast stations to their channel lineups. In addition, cable operators must set aside channels for leased-access by third parties, and they can be compelled to subsidize and disseminate public, educational and governmental (PEG) programming, among other things.

These regulations are constitutional only because of the lack of competition that existed when the laws were adopted in the early 1990s. But a lot has changed since then.

Phone companies, such as AT&T and Verizon, now offer cable service (which they were not allowed to do until 1996), DirecTV and Dish Network offer DBS service to nearly every home in the country, and video content is now ubiquitous on the web, even without the seamless packaging of Google-TV. The bottleneck, in short, has broken.

The disconnect between these policies and their underlying premises is not merely a public policy problem; it is a constitutional problem. All of these regulations interfere with the expressive autonomy of cable operators and put special burdens on them that are not imposed on newspapers, magazines or web communicators. (Imagine how quickly the courts would strike down a must-carry law requiring newspapers to set aside a few pages of each issue for use by competitors).

These problems are acute when the government moves from what are arguably structural regulations to more content-based restraints and mandates. There are several of these, most of which target the programming practices of the cable networks (e.g., Comedy Central, ESPN, Nickelodeon).

The federal courts have shot down attempts by the government to regulate indecent content on cable, applying something close to strict scrutiny in those cases. But there are many other content-based restrictions that remain in effect.

Cable networks cannot accept tobacco advertising. They must limit the amount of advertising time during children’s programs. They must provide equal opportunities to political candidates whose opponents appear on those networks in non-exempt programming. And they must abide by the payola rules, which prohibit non-disclosed payments made by third parties in exchange for airtime.

None of these restrictions would be tolerated if imposed on print or web communicators. Yet they continue to be enforced against cable communicators, despite the absence of a cogent regulatory rationale.

It is probably hard for most people to get exercised about the rights of giant cable companies, with their ever-expanding rates and outsourced customer service. But they are constitutionally protected speakers, and the claim that they are differently situated than their competitors using other media just isn’t credible anymore.

It is time for Congress and the FCC to scrap the current regulatory scheme and for the courts to reconsider cable’s constitutional status in light of the new technological and market realities.

Maybe Google-TV will provide the impetus for the end of cable regulation as we know it.

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