Saturday, June 1, 2013

Comcast and Verizon Phony Free-Speech Claims

Comcast and Verizon’s Phony Free-Speech Claim

May 29th 2013 5:00 PM

Judge Brett Kavanaugh of the U.S. Court of Appeals for the D.C. Circuit wrote this week that the First Amendment shields Comcast Corp. from Congress’s authority to ensure the free flow of information across the basic network connections it provides.

Kavanaugh’s assertion accompanied a ruling by the three-judge panel that reversed a Federal Communications Commission action against Comcast. Although the other two judges on the court did not endorse Kavanaugh’s First Amendment argument, it will come up again later this year -- in a case brought against the FCC by Verizon Communications Inc. (VZ)

The court should resist this reasoning, or risk trivializing the freedom of speech that the First Amendment truly protects.

This week’s case, Comcast Corp. (CMCSA)v. FCC, concerned the 1992 Cable Act, enacted at a time when policy makers rightly worried that cable operators would favor the channels that they increasingly controlled. The statute directed the FCC to prevent cable companies from discriminating among programming providers if the effect of such discrimination is to “unreasonably restrain the ability of an unaffiliated video programming vendor to compete fairly.”

Comcast is both the largest high-speedInternet-access provider and the biggest American video distributor, and faces little competition within its territories for the wires it installs in American homes. At the same time, it owns a controlling interest in Golf Channel and NBC Sports Network, which Comcast distributes as part of its most popular “Expanded Basic” and “Digital Starter” bundles. Meanwhile, the company relegates Tennis Channel, a competitor, to its far-less-popular “Sports Tier,” which focuses on sports programming and requires subscribers to pay additional fees.

Other cable distributors mimic Comcast’s treatment of Tennis Channel, which claims that this prevents it from reaching the 40 million-subscriber threshold required to attract national advertising. The FCC agreed last year that Comcast’s activities amounted to unlawful discrimination.

Free Speech

In its appeal of the FCC’s ruling, Comcast wrapped itself in the mantle of the First Amendment, claiming that it is a speaker akin to the New York Times. The FCC’s order that Comcast carry specific content to a specific audience amounted to an unconstitutional intrusion, the company said. In his concurring opinion this week, Judge Kavanaugh was strongly sympathetic to this claim, saying “the FCC cannot tell Comcast how to exercise its editorial discretion about what networks to carry any more than the Government can tell Amazon or Politics and Prose or Barnes & Noble what books to sell; or tell the Wall Street Journal or Politico or the Drudge Report what columns to carry.”

Congress, though, has long distinguished basic information transmission facilities from newspapers; there is a sharp difference between a facility that allows someone else’s speech to be transmitted, and expression itself. Indeed, all of American communications policy is based on this premise.

In enacting the 1992 Cable Act, Congress was concerned that the operator of the single wire into a home would have the power and incentive to pick and choose among sources of speech and thereby constrain Americans’ access to information. No one watching a particular channel would think that Comcast, by virtue of transmitting it, was “speaking.” And even if Comcast is, in some blunt way, “speaking” through its choice of channels, the rules against discrimination aren’t meant to further the “message” of Tennis Channel. The government just wants fair competition.

In a separate case before the same court, Verizon is making a similar claim. According to the company, an FCC rule that keeps an Internet-access network provider from blocking its customers’ access to any content violates its First Amendment right to control the speech it transmits. The rule amounts to compelled speech, and is thus as unconstitutional as a law ordering a newspaper what to publish. Verizon claims the right to edit the Internet with absolute discretion.

Closed Market

Hundreds of millions of Americans entrust giant, private digital-network providers with their First Amendment-protected speech. These providers -- principally Comcast and Time Warner Cable Inc. over wires, and Verizon and AT&T Inc. (T) in wireless -- have acted in parallel to exclude competition in their individual geographic and product marketplaces. At this point, it would be extraordinarily difficult for any new entrant to achieve the scale it would take to cut into the incumbents’ profits.

As a result, the country that invented the Internet is lagging behind other nations; only people in MexicoIsraelChileNew Zealandand Greece pay more than Americans for each megabit per second of Internet access, according to the Organization for Economic Cooperation and Development.

Now, the same companies are claiming First Amendment immunity from any congressional oversight. Other enormous industries have seen the appeal of this argument: Last year, the pharmaceutical industry successfully argued that the First Amendment shielded it from prosecution for promoting off-label use of a drug approved by the Food and Drug Administration.

For the Internet-access providers, this implausible argument must not stand: If business decisions were constitutionally protected speech, every government regulation would be presumptively unconstitutional. Surely the First Amendment wasn’t intended to be used as a shield to protect power in the marketplace.

(Susan Crawford, a contributor to Bloomberg View and a professor at the Cardozo School of Law, is the author of “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.” The opinions expressed are her own.)

To contact the writer of this article: Susan P. Crawford at or@scrawford on Twitter

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