Ninth Circuit en banc reverses 2012 panel decision, restores prohibition against “issue advertising” on NCE stations.

We all know that noncommercial (NCE) broadcasting stations are just that – NONcommercial.  Section 399b of the Communications Act forbids them from accepting advertising on behalf of for-profit operations; it also forbids advertising both for political candidates and for expressing the advertiser’s views on any matter of public importance. (The difference between the latter two? Think “Vote for John Smith” vs. “America’s farmers are its backbone”.)

As we reported back in 2012, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit tossed those last two prohibitions (i.e., the ones against political and issue advertising).

That wasn’t the end of the matter. As we thought it might, the FCC asked the Ninth Circuit en banc to take another look at the case. And now the 11-judge court sitting en banc has restored (by an 8-3 vote) the prohibitions against political and issue advertising. 

But there’s reason to believe that the case may not be over yet.

This all started when Minority Television Project (MTP), the licensee of NCE Station KMTP-TV, was hit with a $10,000 fine by the FCC for broadcasting a number of conventional ads on behalf of Chevy, Ford and Korean Airlines. MTP took the Commission to court, lost the initial round, and appealed. Thanks to a quirk of First Amendment law, MTP was able to challenge all of the Section 399b prohibitions, not just the one involving normal “commercials” (that is, the one element of the law that MTP was accused of violating). And that opened the door for the 2012 decision tossing the issue advertising taboo. In the panel’s view, the ban on political/issue ads (unlike the ban on regular advertising) had not been adequately justified under First Amendment jurisprudence.

Eight of the 11 judges on the en banc court disagreed. Applying an “intermediate scrutiny” standard of review, the majority has now concluded that all of Section 399b’s prohibitions are consistent with the First Amendment. 

That choice of standard of review was crucial. MTP argued unsuccessfully that “strict scrutiny” – a standard far less favorable to the government – should apply. MTP’s rationale? The use of “intermediate scrutiny” for assessing First Amendment challenges by broadcasters dates back more than 40 years, to the Red Lion decision. In that case the Supreme Court concluded that, because of the supposed scarcity of spectrum and the importance of assuring diversity of information flowing to the public, broadcasters should not be accorded the same level of First Amendment protection enjoyed by their print media counterparts.

MTP urged that the Supreme Court’s decision in Citizens United effectively overruled the Red Lion line of cases. In MTP’s view, considerable intervening technological changes, including the “ubiquity of the Internet” – which did not even exist at the time of Red Lion – also warrant re-thinking of the use of “intermediate scrutiny” standard, a standard which relegates broadcasting to second class citizenship in the First Amendment world. Once the majority of the en banc court rejected those arguments, however, the result was pretty much a foregone conclusion.

But then there was the vigorous dissent of Chief Judge Alex Kozinski, who agreed with MTP that most of the longstanding bases for treating broadcasters differently under the Constitution had been swept away by technological advancement and subsequent Supreme Court decisions. As Kozinski sees it, the scarcity rationale matters only when the supposedly scarce spectrum is the primary means of getting information to the public. But in a world of Internet and cable/satellite TV, broadcasting is certainly not the only, and possibly not even the primary, means of doing so anymore, so even if intermediate scrutiny analysis may have been justified in the past, that is no longer the case today.

Personally, this writer finds the dissent far more persuasive than the majority opinion (and that’s not just because I admire Kozinski’s writing style). The government’s argument about the supposed risks presented by political advertising on NCE stations is weak at best. Skepticism should be required any time the government restricts speech, and in my view even a modicum of skepticism dooms the government’s argument here: while commercial advertisers might seek to shape the content of NCE broadcasters to reach more desirable audiences, that is far less likely with political advertisers, and there is certainly no evidence to justify the restriction. Ordinarily, some evidence is required to support an abridgment of First Amendment rights.

Interestingly, in his dissent Kozinski seems to encourage MTP to take its case to the Supreme Court. Brushing aside the majority’s reliance on well-established Supreme Court precedents, he counters that those earlier decisions have been “decimated” by intervening developments. His none-too-subtle message appears to be that the Supremes might now be open to re-thinking its historical reliance on “intermediate scrutiny” for broadcasters in First Amendment cases.

If Kozinski is right, the results could be far-reaching.

The last decade has, for good or for ill, seen some groundbreaking campaign finance cases. The Supreme Court’s Citizens United opened the doors for corporate spending on behalf of (though supposedly not in coordination with) candidates. SpeechNow.Org v. FEC (out of the D.C. Circuit en banc) led to the creation of so-called “Super-PACS”. Sometime in 2014 we are likely to see whether another restriction – cumulative limits on donations to campaigns – will fall with McCutchen v. FEC.  This Court is obviously not shying away from full engagement on the campaign law front. Section 399b’s prohibition against political and issue-oriented advertising could attract the Court’s attention. 

And if the Supremes were to toss out Section 399b? The specter of widespread commercialization on NCE stations may send a chill down the spine of many NCE audience members, but the prospect of public unhappiness has not stopped the Supreme Court in the past. (Some reports suggest that the public is already strongly opposed to the Court’s recent campaign financing decisions, even if the public may not particularly understand them.) 

Whether rampant NCE commercialization would actually happen is far from clear. NCE stations might be tempted by the deep well of political money – somewhere between $1 billion and $6 billion in campaign spending in the 2012 elections alone –into which they might finally be able to dip their fund-raising buckets. Still, many NCE folks, fearing unhappy viewers and a consequent reduction in contributions, might be reluctant to succumb to that temptation.

But if Kozinski is guessing right and the Supremes were to see this case as an opportunity to re-think Red Lion and its progeny, the ultimate impact on the broadcasters as a whole could be tremendously significant: the industry might enjoy full First Amendment protections for the first time in decades. Sure, the Court has passed on similar opportunities in recent years but, as Kozinski observes, the Court has veered away from longstanding precedent in the past. This writer wouldn’t be opposed at all to a similar change of path here.

As always, check back here for more updates.