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Needed: The Separation of Cable and State

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There is growing political manipulation of the information that the average American is allowed to receive. Americans long ridiculed the Soviet-bloc media for presenting absurdly self-serving images of their government. Yet, in this country, thanks to government controls over cable television, most American cable subscribers are forced to bankroll multiple television stations that exist simply to air local and state government propaganda.

While no local government would be likely even to attempt to grant a monopoly to a local newspaper, cable television systems routinely receive such preference. More than 99 percent of the cable markets in the United States are served by only one cable company. An FCC survey found that cable systems with monopolies charged an average of 65 cents a channel per month while those that faced competition charged only 48 cents per channel.

Why all the monopolies? Former FCC official Sol Schildhause wrote in Texas Lawyer that “local governments almost universally refuse to license second systems. The reason: Local politicians have cut deals, written and unwritten, with their chosen cable operator to keep out competition.” As lawyer David Saylor notes:

“Cable operators have even given city councils absolute programming control over certain cable channels. Such operators have been forced to finance the construction of municipally controlled television studios, to deliver free production equipment to city officials and institutions, and to provide free installation and program service to schools and other city designees.”

The monopoly power of local governments results in censorship — by intimidation. Schildhause notes, “With the exception of C-SPAN at the national level, local cable systems are noticeably chary about reporting on political wrongdoing. Why? Because cable operators are licensed members of the press, and licensees are usually nice to the local dispensers of licenses.”

Economist Thomas Hazlett noted:

“The Florida Cable TV Association opened a space-age studio just across from the state legislature. The Sunshine Channel will not only air such snappy shows as ‘The Governor Meets the Press’ and ‘The Florida League of Cities'; it will give state legislators full editorial control of their own program. Don’t expect them to feature a segment on their 1987 passage of a law protecting cable operators from upstart competitors.”

In 1984, Congress explicitly sanctioned the granting of local cable monopolies. Between 1987 and 1990, nine states granted existing local franchises de facto monopoly rights in their markets. The 1984 cable act also banned telephone companies from offering cable television service, thereby protecting thousands of local cable monopolies from a natural competitor.

Largely as a result of the local monopolies, cable bills rose twice as fast as inflation in the late 1980s and early 1990s. (In the 65 cities that permitted two or more cable companies to compete, prices fell 20 to 25 percent.) Congress responded in 1992 by enacting the Cable Television Consumer Protection and Competition Act. The act’s statement of policy declared Congress’s intent to “promote the availability to the public of a diversity of views and information through cable television … and ensure that cable television operators do not have undue market power vis-a-vis video programmers and consumers.”

While the 1992 act liberally praised competition, the act “eliminated damage awards against cities that refuse to issue competitive franchises,” as Hazlett noted. Thus, local governments have nothing to lose from granting monopolies to favored cable companies. Congress perpetuated an earlier prohibition on telephone companies offering cable service, thereby preventing the provision of a greater “diversity of views.”

The 1992 cable act responded to cable monopolies not by removing the barriers to competition but by increasing politicians’ and bureaucrats’ power to dictate how monopolists must behave. The act required the FCC to regulate local cable companies’ monthly fees. The FCC responded in May 1993 by issuing 475 pages of arcane provisions to regulate cable pricing and promised to issue additional regulations to further clarify permitted pricing policies. Almost all of the 475 pages of regulations were “necessitated” by local and state governments’ decisions to give cable operators a monopoly. Once the politicians gave cable operators monopoly control over their cable customers, the politicians naturally felt entitled to exercise control over the cable companies. First the government creates unnecessary monopolies, and then it issues hundreds of pages of unnecessary rules to try to make the monopolies serve the public interest — as such public interest is perceived by politicians and political appointees.

The 1992 act forced cable systems both to transmit local broadcast television stations’ signals (a must-carry provision) — and to pay them for the honor. Congress inserted the must-carry provision in the law even though federal courts had twice previously struck down the provision as an unconstitutional violation of the cable companies’ rights. Cable companies challenged the new law in federal court. A federal appeals court upheld the must-carry provision, but Judge Steven Williams sharply dissented: “If findings as scantily connected to the conclusion as these can justify must-carry, then the door is open — even in the area of First Amendment rights — to exercise the most naked interest-group preferences.”

As a result of must-carry, scores of cable systems dropped C-SPAN, the public affairs network. Brian Lamb, chief executive of C-SPAN, complained: “We’ve been made a second-class citizen under this legislation. We no longer have the same chance of succeeding as any broadcast channel.” C-SPAN estimated that it lost access to 3.5 million viewers after the must-carry provision took effect. Thus, fewer people are able to watch the House and Senate in action — which probably suits many politicians just fine.

The must-carry provisions of the 1992 act require the FCC to rule which stations are in the public interest — and to implicitly knock other stations off the cable.

In July 1993, the FCC ruled that more than 100 home-shopping programs were serving the public interest and thus that cable systems could be forced to carry them free of charge. Though the Home Shopping Network generates roughly $1 billion a year, the FCC effectively labeled the company as a preferred welfare client. The FCC certified the Home Shopping Network as a public interest venture at the same time that, as the Washington Post reported, a federal grand jury was “investigating a laundry list of allegations against the company and its chairman, including bribery, ties to organized crime and secret ownership of vendors that supplied products sold on the network.” Critics denounced the FCC decision on the shopping networks as “force feeding [the public] schlock.”

Cable companies challenged the law but a 1994 Supreme Court decision upheld most provisions of the act. Justice Anthony Kennedy, writing for the majority, asserted that “assuring that the public has access to a multiplicity of information sources is a governmental purpose of the highest order, for it promotes values central to the First Amendment.” Kennedy concluded: “The First Amendment’s command that government not impede the freedom of speech does not disable the government from taking steps to ensure that private interests not restrict, through physical control of a critical pathway of communication, the free flow of information and ideas.”

Yet, if it were not for government-granted local cable monopolies, there would be little or no problem with “multiplicity of information sources.” As Matthew Bunker and Charles Davis noted in a 1996 article in The Journal of Broadcasting and Electronic Media, “Rather than seeing the First Amendment as a restraint on government intervention, the new vision makes government an intervening agent responsible for furthering societal norms such as diversity of opinion and community participation in mass communication.”

It would have been far more effective to solve the problem by announcing that government-mandated local cable television monopolies are as unconstitutional as government-mandated local newspaper monopolies. Justice Sandra Day O’Connor dissented: “It is as if the government ordered all movie theaters to reserve at least one-third of their screening for films made by American production companies, or required all bookstores to devote one third of their shelf space to nonprofit publishers.” O’Connor concluded:

“The First Amendment as we understand it today rests on the premise that it is government power, rather than private power, that is the main threat to free expression; as a consequence, the Amendment imposes substantial limitations on the Government even when it is trying to serve concededly praiseworthy goals.”

Bunker and Davis observed, “The notion that promoting free speech is a ‘governmental purpose’ … makes clear how far the Court’s constitutional theory has moved from negative liberty toward positive liberty.”

The Supreme Court returned to the theme of cable controls in a 1997 decision on the “must-carry” regulations on the 1992 cable legislation. A majority of the Supreme Court justices claimed that the fact that must-carry resulted in 5,880 additional broadcast channels’ being added to cable systems around the country proved the law was a success — and yet the justices claimed that the act “is narrowly tailored to preserve a multiplicity of broadcast stations.” Justice Stephen Breyer, who cast the deciding vote in favor of the law, noted:

“The compulsory carriage … interferes with the protected interests of the cable operators to choose their own programming; it prevents displaced cable program providers from obtaining an audience; and it will sometimes prevent some cable viewers from watching what, in its absence, would have been their preferred set of programs. This ‘price’ amounts to a ‘suppression of speech.'”

Yet Breyer thought Congress was entitled to exercise such power, regardless of the First Amendment. The final paragraph of the majority opinion stated: “[Judgments] about how competing economic interests are to be reconciled in the complex … field of television are for Congress to make.”

Justice O’Connor again dissented, declaring: “The question is not whether there will be control over who gets to speak over cable — the question is who will have this control. Under the FCC’s view, the answer is Congress, acting within relatively broad limits. Under my view, the answer is the cable operator.” The Supreme Court’s decision vivifies how the contemporary concept of freedom has become far more paternalistic — as if government failure to dictate who can “speak” on cable system is a violation of freedom of speech.

Unfortunately, political controls over cable systems have not excited the interest of most Americans. People have acquiesced — in part because they are not aware of the extra costs they are forced to pay, and in part because many people blasŽly accept government propaganda as a “natural” part of cable offerings. The principle of government control over information is inseparable from the principle of government control over people’s lives. Americans need a separation of state and cable.

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    James Bovard serves as policy adviser to The Future of Freedom Foundation. He has written for the New York Times, The Wall Street Journal, The Washington Post, New Republic, Reader's Digest, Playboy, American Spectator, Investors Business Daily, and many other publications. He is the author of a new e-book memoir, Public Policy Hooligan. His other books include: Attention Deficit Democracy (2006); The Bush Betrayal (2004); Terrorism and Tyranny (2003); Feeling Your Pain (2000); Freedom in Chains (1999); Shakedown (1995); Lost Rights (1994); The Fair Trade Fraud (1991); and The Farm Fiasco (1989). He was the 1995 co-recipient of the Thomas Szasz Award for Civil Liberties work, awarded by the Center for Independent Thought, and the recipient of the 1996 Freedom Fund Award from the Firearms Civil Rights Defense Fund of the National Rifle Association. His book Lost Rights received the Mencken Award as Book of the Year from the Free Press Association. His Terrorism and Tyranny won Laissez Faire Book's Lysander Spooner award for the Best Book on Liberty in 2003. Read his blog. Send him email.