Tag: communications

FCC Takes Eye Off Ball, Leaves Court in Defeat

On Tuesday, the U.S. Court of Appeals for the D.C. Circuit served the Tennis Channel a crushing blow, essentially holding that government agencies cannot tell cable operators what networks should be disseminated to consumers.  

The court found that the FCC had made an unforced error in ruling that Comcast had acted illegally against the Tennis Channel by refusing to distribute it as widely as Comcast’s own sports networks, Golf Channel and Versus.  This was a challenge based on Section 616 of the Communications Act, which gives the FCC authority to prevent “multichannel video programming distributors” from restraining the ability of unaffiliated “video program vendors” from competing “fairly by discriminating” – a broad power that the FCC still managed to abuse here.

Initially, the Tennis Channel contracted with Comcast to distribute its content on Comcast’s less broadly distributed sports tier.  It later approached Comcast with a proposal to reposition the channel onto a tier with broader distribution.  Comcast backhanded this proposal, citing financial impracticability – a basic analysis of whether such a move would make sense given ratings, market demand, etc.  An FCC administrative law judge, without citing contrary financial studies (or even a video replay) then corrected what he deemed to be marketplace “discrimination” and ordered Comcast to pay $375,000 to the government and make the Tennis Channel more widely available to consumers.

On appeal, the D.C. Circuit smashed that finding of unlawful discrimination. Indeed, substituting the judgment of an administrative agency for a freely agreed distribution deal for no good reason flouts basic principles of administrative and contract law.  Even in this day of government overreach, it’s just not cricket!

Judge Brett Kavanaugh’s concurring opinion warrants special attention – and applause.  He concluded that Section 616’s prohibition on discrimination only applies when a distributor possesses market power and that Comcast has no such advantage in the national video programming distribution market. According to Kavanaugh, applying Section 616 to a video programming distributor that lacks market power is not only outside the lines of the Communications Act, but the First Amendment as well.

That is, when Comcast distributes specific channels, it’s transmitting speech.  Overruling a cable operator’s programming choices thus interferes with editorial discretion to select and transmit a protected form of speech.  Courts should continue to umpire federal agencies that grant themselves the power to distort the marketplace of ideas.

For more on this case and the important First Amendment and rule of law issues it raises, see Randolph May of the Free State Foundation.

The Government Shouldn’t Try to Manage the Communications Marketplace

Matt Yglesias takes my recent post gathering three links a little too seriously. Beyond their subject matter—the proposed merger of AT&T and T-Mobile—the theme running through the links was that they were all to the TechLiberationFront blog, not that “the federal government should not try to manage the development of the communications marketplace.” My humor is a little odd. Not everyone gets to come along….

But it’s true that the federal government should not try to manage the development of the communications marketplace. So I’ll defend that, and first principles, which Yglesias claims to have reached their limits when it comes to communications.

First, I’ll refine my thesis: the government should not manage the communications marketplace.

What is a “marketplace”? The handiest web dictionary has the following two relevant definitions: “1. An open area or square in a town where a public market or sale is set up. 2. The world of business and commerce.”

To “manage” such a thing [“to take charge or care of: to manage my investments”] would be to have a hand in much or all of it—not just meta-rules about the terms of buying and selling, but what may be sold on what terms, often up to and including price and quality.

Given these ordinary meanings, I think “manage the communications marketplace” has a relatively broad connotation, and the argument that the government should not manage the communications marketplace is easy. The give-and-take of the market is a better way to discover consumers’ true interests and to apportion resources to serve them. For all the effort and smarts they put into it, government regulators are at a serious disability compared to the market’s manifold forces. More often than not, regulators serve the interests of the corporations that are well organized to win their succor, and they nurture their own interests in maintaining and growing power.

If Yglesias holds the contrary view, that the government should regulate the price, quality, and content of communications services, I welcome that debate, including its free speech dimensions. (There’s a “first principle” worth keeping in mind.)

But he actually doesn’t take that position, not openly at least. He says, instead: “The federal government has to have some kind of policy vis-à-vis the electromagnetic spectrum.” From there, management of the entire communications marketplace is a few bootstraps away.

The electromagnetic spectrum is one input into the communications marketplace. Spectrum is a challenging policy area because we are unused to treating it as anything other than a federally controlled resource.

My thinking is not dictated by the choice Congress made in the Radio Act of 1912, though. It’s important to imagine what rules and tools for dividing up radio spectrum might have emerged had the federal government not assumed power over it. I would prefer to try to move in that direction. (I don’t exclude commons treatment of some spectrum as appropriate, btw.) The historical accident that the government presumed to control radio spectrum should not metastisize into government control of communications.

Holding communications policy as close to first principles as we can, including John Locke when we can, is not the same as intoning “government bad, markets good.” But if the two approaches reach a congruent result, so be it.

If Yglesias holds the view that the government should manage the communications marketplace, he should say so forthrightly. One suspects that he wanted to feature the ad hominem insinuated into his short post. (“Of course the Cato Institute isn’t allowed to reach any other conclusion.”) It certainly sells with his commenters! But there are very good reasons to keep the government from controlling the communications marketplace, and there is much work to be done wresting control of spectrum from the government as well.

Unleashing an Internet Revolution in Cuba

By now the name of Yoani Sánchez has become common currency for those who follow Cuba. Through the use of New Media (blog, Twitter and YouTube) Yoani has challenged the Castro regime in a way that various U.S. government-sponsored efforts have  failed to do before, earning the respect and tacit admiration of even those who continue to sympathize with the Cuban regime. As my colleague Ian Vásquez put it a few months ago, Yoani keeps speaking truth to power.

Although she’s a remarkable individual, Yoani is not alone in fighting repression with technology. Other bloggers are making their voice heard, and that makes the Castro dictatorship nervous. As Yoani wrote in a paper recently published by Cato, despite the many difficulties and costs that regular Cubans face when trying to access Internet,

… a web of networks has emerged as the only means by which a person on the island can make his opinions known to the rest of the world. Today, this virtual space is like a training camp where Cubans go to relearn forgotten freedoms. The right of association can be found on Facebook, Twitter, and the other social networks, in a sort of compensation for the crime of “unlawful assembly” established by the Cuban penal code.

As recent events in Iran and elsewhere have shown, once a technology becomes pervasive in a society, it is extremely difficult for a totalitarian regime to control it. A new paper published today by the Cuba Study Group highlights the potential of technology in bringing about democracy and liberty to Cuba. The document entitled “Empowering the Cuban People through Technology: Recommendations for Private and Public Sector Leaders,” also recommends lifting all U.S. restrictions that hinder the opportunities of companies to provide cell phone and Internet service to the island. For example, the paper reviews the current U.S. regulatory framework on technology investment in other repressive regimes such as Iran, Syria, Burma and North Korea, and finds that “the U.S. regulations governing telecommunications-related exports to Cuba are still some of the most restrictive.”

By removing these counterproductive restrictions, Washington could help unleash an Internet revolution in Cuba. More Yoanis will certainly bring about more change in the island than 50 years of failed U.S. trade and travel bans.

TLJ on Justice Stevens’ Tech Influence

TechLawJournal has a thorough analysis of Justice John Paul Stevens’ opinions in technology-related areas. I reproduce it here with permission. (Tim Lee’s earlier about Justice Stevens’ legacy in tech is here.)

Justice John Paul Stevens, who has served on the Supreme Court since 1975, announced on April 9, 2010, that he will retire when the Court completes its current term this summer. This article reviews his contributions to technology related areas of law.

Outline of Article:
1. Summary.
2. Copyright Cases.
3. State Immunity in IPR Cases.
4. Patent Cases.
5. Communications Cases.
6. Internet Speech Cases.
7. Privacy Cases.
8. Other Cases.

1. Summary.

Justice Stevens wrote the majority opinion in the 1984 landmark Sony Betamax case. It was a 5-4 opinion. He joined in the unanimous 2005 opinion in MGM v. Grokster, regarding vicarious copyright infringement by the distributors of peer to peer systems. He wrote a long and vigorous dissent in Eldred, the 7-2 case regarding the Copyright Term Extension Act.

Justice Stevens led the fight against extending sovereign immunity to states for violation of, among other things, intellectual property laws. He dissented from the outset, and never considered the Court to be constrained by the doctrine of stare decisis. However, his concern was with the conservatives’ interpretation of states rights, not incenting the creation of intellectual property.

Justice Stevens wrote for a unanimous Court in Illinois Tools Works v. Independent Ink. Otherwise, he has not been active in writing opinions in patent cases in recent years.

Justice Stevens has been an ardent advocate of freedom of speech on the internet. He wrote the majority opinion in Reno v. ACLU in 1997, overturning the censoring provisions of the Communications Decency Act. He dissented from the Court’s 2003 opinion in US v. American Library Association upholding the Children’s Internet Protection Act (CIPA), which required filtering on certain government subsidized computers. He wrote a concurring opinion in 2004 in Ashcroft v. ACLU, holding unconstitutional the Child Online Protection Act (COPA).

Justice Stevens’ dedication to freedom of speech also led him to write the majority opinion in 2001 in Bartnicki v. Vopper, which limited electronic privacy and condoned violation of the Wiretap Act.

However, he reiterated his slight regard for privacy and Fourth Amendment rights by authoring the dissent in 2001 in Kyllo v. U.S, a case holding that the thermal imaging of a home to detect lamps used for growing marijuana constitutes a search within the meaning of the Fourth Amendment.

Justice Stevens has not been active in writing majority or dissenting opinions in communications law cases. However, last year in a dissent in FCC v. Fox, he wrote a significant explanation of the nature of the administrative process. He presented an explanation of the FCC as an agent of the Congress.

Finally, Justice Stevens should be remembered for authoring the Court’s 1984 opinion in Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837. This is not a communications or technology case. However, this case regarding administrative procedure gives the Federal Communications Commission (FCC) wide latitude to write regulations that give wild and implausible interpretations to federal statutes.

2. Copyright Cases.

Justice Stevens has not been a consistent supporter of the copyright based industries. He wrote the majority opinion in the Sony Betamax case, and wrote a vehement dissent in Eldred, the Copyright Term Extension Act case. On the other hand, he has been the Court’s most active critic of the line of cases granting states immunity in intellectual property cases.

Sony. Justice Stevens wrote for the majority in the Court’s 1984 5-4 opinion in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417.

He wrote that the “sale of video cassette recorders (“VCR´´s) did not subject Sony to contributory copyright liability, even though Sony knew as a general matter that the machines could be used, and were being used, to infringe the plaintiffs’ copyrighted works. Because video tape recorders were capable of both infringing and “substantial noninfringing uses,´´ generic or “constructive´´ knowledge of infringing activity was insufficient to warrant liability based on the mere retail of Sony’s products.”

MGM v. Grokster. Justice Stevens joined in, but did not write, the Supreme Court’s unanimous 2005 opinion [55 pages in PDF] in MGM v. Grokster, 545 U.S. 913.

In this case, the Court reversed the judgment of the U.S. Court of Appeals (9thCir) regarding vicarious copyright infringement by the distributors of peer to peer systems. The Supreme Court held that “one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.” See, story titled “Supreme Court Rules in MGM v. Grokster” in TLJ Daily E-Mail Alert No. 1,163, June 28, 2005.

Copyright Term Extension Act. Justice Ginsburg wrote for the majority in the Court’s 2003 7-2 opinion in Eldred v. Ashcroft, 537 U.S. 186. This opinion upheld the constitutionality of the Copyright Term Extension Act (CTEA), which retroactively extended the maximum duration of copyrights. See also, story titled “Supreme Court Upholds CTEA in Eldred v. Ashcroft” in TLJ Daily E-Mail Alert No. 584, January 16, 2003.

Both Breyer and Stevens dissented. Stevens wrote a long and emphatic criticism of the CTEA and the majority opinion. He stated that “By failing to protect the public interest in free access to the products of inventive and artistic genius – indeed, by virtually ignoring the central purpose of the Copyright/Patent Clause – the Court has quitclaimed to Congress its principal responsibility in this area of the law. Fairly read, the Court has stated that Congress’ actions under the Copyright/Patent Clause are, for all intents and purposes, judicially unreviewable. That result cannot be squared with the basic tenets of our constitutional structure. It is not hyperbole to recall the trenchant words of Chief Justice John Marshall: “It is emphatically the province and duty of the judicial department to say what the law is.´´ Marbury v. Madison …”

Fair Use and Copying of Unpublished Works. Justice O’Connor wrote for the majority, which Justice Stevens joined, in the 1985 6-3 opinion in Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539. The Court held that the unpublished state of a work of authorship may defeat the affirmative defense of fair use.

Database Protection. Justice O’Connor wrote the 8-0-1 1991 opinion in Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340. Justice Stevens joined in O’Connor’s opinion. Justice Blackmun concurred without writing an opinion. The Court held that collections of data, such as electronic databases, are generally not subject to copyright protection.

Fair Use and Parody. Justice Souter wrote the unanimous 1984 opinion in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1984). Justice Stevens joined in this opinion. This was the dispute involving the hideous and commercial parody of Roy Obison’s classic titled “Oh, Pretty Woman”. The Court reversed the Court of Appeals, which had held that the defense of fair use was barred by the song’s commercial character and excessive borrowing.

3. State Immunity in IPR Cases.

In the late 1990s the Supreme Court held in a series of 5-4 opinions that states have immunity from suits for money judgments in federal court for violation of intellectual property and other statutes. The Court’s reasoning was weak and tenuous at best. Several Justices, including Stevens, continuously dissented.

Stevens’ retirement from the Court removes one vote towards a five member majority for reversing or limiting this line of cases. There were once four consistent votes against state sovereign immunity in IP cases: Stevens, Souter, Ginsburg and Breyer. Souter was replaced by Justice Sonia Sotomayor last year. Now Justice Stevens in leaving. There remain three consistent votes in favor of state sovereign immunity: Scalia, Thomas and Kennedy.

Obama, both as Senator and President, has not shown any particular affinity for the doctrine of states rights. Moreover, his judicial appointments to date, and especially Justice Sotomayor and his Second Circuit appointments, suggest that he will be sympathetic to the interests of the copyright industries.

Former Chief Justice William Rehnquist wrote the majority opinion in the seminal case of Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996). This case involves the Indian Gaming Regulatory Act and the Indian Commerce clause of the constitution. He wrote that the Congress lacks authority under Article I of the Constitution to abrogate the states’ 11th Amendment immunity from suit in federal courts. However, its holding regarding the abrogation of state sovereign immunity serves as the precedent for similar cases involving intellectual property. This was a 5-4 opinion.

Stevens wrote in his dissent that “This case is about power – the power of the Congress of the United States to create a private federal cause of action against a State, or its Governor, for the violation of a federal right.” He wrote that the majority opinion “prevents Congress from providing a federal forum for a broad range of actions against States, from those sounding in copyright and patent law, to those concerning bankruptcy, environmental law, and the regulation of our vast national economy.”

Stevens argued that “There may be room for debate over whether, in light of the Eleventh Amendment, Congress has the power to ensure that such a cause of action may be enforced in federal court by a citizen of another State or a foreign citizen. There can be no serious debate, however, over whether Congress has the power to ensure that such a cause of action may be brought by a citizen of the State being sued. Congress’ authority in that regard is clear.”

Next came Rehnquist’s opinion in Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999), invalidating the Patent and Plant Variety Protection Remedy Clarification Act. This too was a 5-4 opinion. Justice Stevens wrote the long and strenuous dissenting opinion, joined by Justices Breyer, Ginsburg, and Souter.

At the same time, the Court issued its opinion in College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, 527 U.S. 666 (1999), invalidating the Trademark Remedy Clarification Act. Scalia wrote this 5-4 opinion. Both Justice Stevens and Justice Breyer wrote dissenting opinions.

As a result of these cases, states can hold intellectual property, and enforce their intellectual property rights in federal court. At the same same, states are in effect free to steal the intellectual property of others, without fear of a money judgments against them. Some states infringe intellectual property rights, hide behind 11th Amendment immunity, and lobby their Senators to block legislation that would remedy this situation.

In 2006 the Supreme Court issued its opinion in Central Virginia Community College v. Katz, 546 U.S. 356. This is an 11th Amendment case involving the Bankruptcy Code’s treatment of preferential transfers by a debtor to state entities. The Supreme Court held, 5-4, that the Congress can abrogate state sovereign immunity in the Bankruptcy Code. However, its analysis is equally applicable to the Patent Act or Copyright Act.

Justice Stevens wrote the majority opinion. He commanded a majority because Justice O’Connor switched sides. This opinion cannot be reconciled with the 1990s IP opinions.

See also, story titled “Supreme Court Rules in State Sovereign Immunity Case” in TLJ Daily E-Mail Alert No. 1,295, January 24, 2006. See also, story titled “Supreme Court Grants Certiorari in State Sovereign Immunity Case” in TLJ Daily E-Mail Alert No. 1,109, April 5, 2005.

Some members of Congress attempted to remedy this situation by legislation. However, they failed. See, stories titled “Legislators Introduce Bills to Address Infringement by States” in TLJ Daily E-Mail Alert No. 302, November 6, 2001; “Sen. Leahy Reintroduces Bill to Close 11th Amendment Loophole to IPR” in TLJ Daily E-Mail Alert No. 394, March 22, 2002; “Senate Judiciary Committee Considers Federalism and Intellectual Property” in TLJ Daily E-Mail Alert No. 522, October 3, 2002; and “Legislators Re-Introduce Bills to Address State IPR Sovereign Immunity” in TLJ Daily E-Mail Alert No. 680, June 13, 2003.

4. Patent Cases.

Justice Stevens wrote for a unanimous Court in Illinois Tools Works v. Independent Ink. Otherwise, he has not been active in writing opinions in patent cases in recent years.

Illinois Tools Works v. Independent Ink. Justice Stevens wrote the unanimous March 1, 2006, opinion [20 pages in PDF] of the Supreme Court in Illinois Tool Works v. Independent Ink, a patent tying antitrust case. See, story titled “Supreme Court Vacates in Patent Tying Antitrust Case” in TLJ Daily E-Mail Alert No. 1,321, March 2, 2006.

The Supreme Court vacated the judgment of the U.S. Court of Appeals (FedCir) and remanded. The Court of Appeals held in January of 2005 that “a rebuttable presumption of market power arises from the possession of a patent over a tying product”.

The Supreme Court concluded that “Congress, the antitrust enforcement agencies, and most economists have all reached the conclusion that a patent does not necessarily confer market power upon the patentee. Today, we reach the same conclusion, and therefore hold that, in all cases involving a tying arrangement, the plaintiff must prove that the defendant has market power in the tying product.”

eBay v. MercExchange. Justice Thomas wrote the unanimous opinion in 2006 in eBay v. MercExchange, 547 U.S. 388. Justice Stevens joined in this opinion, and in a concurring opinion written by Kennedy. The Court held that the traditional four factor framework that guides a court’s decision whether to grant an injunction applies in patent cases. See, story titled “Supreme Court to Consider Availability of Injunctive Relief in Patent Cases” in TLJ Daily E-Mail Alert No. 1,261, November 29, 2005, and story titled “Supreme Court Rules on Availability of Injunctive Relief in Patent Cases” in TLJ Daily E-Mail Alert No. 1,371, May 16, 2006.

Patent Obviousness. Justice Kennedy wrote the unanimous 2007 opinion in KSR International v. Teleflex, 550 U.S. 398. Justice Stevens joined in this opinion. See, story titled “Supreme Court Rules on Patent Obviousness in KSR v. Teleflex” in TLJ Daily E-Mail Alert No. 1,576, May 7, 2007.

MedImmune v. Genentech. Justice Scalia wrote for the majority in the Court’s 2007 8-1 opinion in MedImmune v. Genentech, 549 U.S. 118. Justice Stevens joined in Scalia’s opinion. Justice Thomas wrote a dissent. This is a case regarding when a patent can be challenged by a licensee in a declaratory judgment action. See, story titled “Supreme Court Rules on Case or Controversy Requirement in Patent Litigation” in TLJ Daily E-Mail Alert No. 1,516, January 9, 2007.

Doctrine of Equivalents. Justice Kennedy wrote the unanimous 2002 opinion in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722. Justice Stevens joined in that opinion. The Court again affirmed the doctrine of equivalents, articulated its purpose, held that the narrowing of a patent claim may give rise to prosecution history estoppel (but that it does not absolutely bar application of the doctrine of equivalents), and listed circumstances under which it might or might not operate as a bar. See also, story titled “Supreme Court Reverses in Festo Case” in TLJ Daily E-Mail Alert No. 439, May 29, 2002.

Carlsbad Technology v. HIF Bio. Justice Thomas wrote the unanimous 2009 opinion in Carlsbad Technology v. HIF Bio, 556 U.S. __. This is a case regarding federal appellate court jurisdiction. Stevens wrote one of three concurring opinion. See, story titled “Supreme Court Reverses in Carlsband Technology v. HIF Bio” in TLJ Daily E-Mail Alert No. 1,934, May 5, 2009.

5. Communications Cases.

Justice Stevens has not been active in writing majority or dissenting opinions in communications cases.

However, in 2009 he wrote a dissent in a broadcast case in which he made a key observation about the nature of the administrative process. He also wrote that the FCC is essentially “an agent of Congress” to which the Congress delegates legislative authority to write rules that “reflect the views of the Congress”.

Section 251 Regulation. Justice Stevens joined in Justice Scalia’s majority opinion in 1999 in AT&T v. Iowa Utilities Board, 525 U.S. 366.

FCC Price Regulation. Justice Stevens joined with the majority in the Court’s 2002 5-3 opinion in Verizon v. FCC, 535 U.S. 467, upholding the FCC’s rules regarding how incumbent local exchange carriers (ILECs) charge interexchange carriers (IXCs) and competitors local exchange carriers (CLECs) for access to their facilities. See, story titled “Supreme Court Upholds FCC Pricing Rules” in TLJ Daily E-Mail Alert No. 431, May 14, 2002.

Antitrust and Telecom: Trinko. Justice Scalia wrote the 2004 opinion in Verizon v. Trinko, 540 U.S. 398, holding that a claim alleging a breach of an ILEC’s duty under the 1996 Telecom Act to share its network with competitors does not state a violation of Section 2 of the Sherman Act.

Justice Stevens wrote a separate opinion “concurring in the judgment” of the Court. Justices Souter and Thomas joined. Stevens wrote that it was AT&T, and not Trinko, who was injured by Verizon’s conduct, and therefore, under the Sherman and Clayton Acts, only AT&T has standing to raise the antitrust claim. Stevens concluded “I would not decide the merits of the § 2 claim unless and until such a claim is advanced by either AT&T or a similarly situated competitive local exchange carrier.”

See also, story titled “Supreme Court Holds That There is No Sherman Act Claim in Verizon v. Trinko” in TLJ Daily E-Mail Alert No. 815, January 14, 2004.

Antitrust and Telecom: Pacific Bell v. Linkline. Chief Justice Roberts wrote for the majority in the 2009 5-4 opinion in Pacific Bell v. Linkline, 555 U.S. __. Justice Breyer wrote a concurring opinion, joined by Stevens, Souter and Ginsburg.

This issue was whether “a plaintiff states a claim under Section 2 of the Sherman Act by alleging that the defendant – a vertically integrated retail competitor with an alleged monopoly at the wholesale level but no antitrust duty to provide the wholesale input to competitors – engaged in a “price squeeze´´ by leaving insufficient margin between wholesale and retail prices to allow the plaintiff to compete.” The majority held not. The four concurring justices would have sent the case back to the District Court to consider a predatory pricing claim.

See, stories titled “Supreme Court Reverses in Pacific Bell v. Linkline”, “Supreme Court: There Is Robust Competition in the Broadband Market”, and “Commentary: Impact of Pacific Bell v. LinkLine” in TLJ Daily E-Mail Alert No. 1,906, February 27, 2009.

State Statutes that Bar Local Governments from Providing Telecom Services. Justice Souter wrote the 2004 opinion in Nixon v. Missouri Municipal League, 541 U.S. 125. This is a case regarding 47 U.S.C. § 253(a) and state statutes that prohibit political subdivisions from offering telecommunications services. Missouri passed a state statute that bans local governments in Missouri from offering telecommunications services. The local governments, represented by the Missouri Municipal League, wanted the Federal Communications Commission (FCC) to preempt this statute, under Section 253, which provides that states cannot ban “any entity” from providing telecommunications services. It has always been clear that Section 253 means that states cannot bar any company from providing telecommunications services. The question was, does Section 253 also include local governments. The FCC said no. The 8th Circuit said yes. The Supreme Court said no. Of course, this does not mean that states must bar local governments from providing telecommunications services. This opinion only stands for the proposition that states may bar local governments from providing telecommunications services.

Justice Stevens wrote a solo dissent. He would have affirmed the judgment of the 8th Circuit. See also, story titled “Supreme Court Reverses in Nixon v. Missouri” in TLJ Daily E-Mail Alert No. 864, March 26, 2004.

Cell Towers. Justice Scalia wrote the 2005 opinion in Rancho Palos Verdes v. Abrams, 544 U.S. 113, holding that an individual who brings an action to enforce the limitations on state and local authority to regulate the location, construction, and modification of wireless communications facilities under 47 U.S.C. § 332, cannot also recover damages under 42 U.S.C. § 1983.

Justice Stevens wrote a solo concurring opinion. He concurred with the Court’s conclusion as to Section 332. However, he wrote that the Court has not “properly acknowledged the strength of our normal presumption that Congress intended to preserve, rather than preclude, the availability of §1983 as a remedy for the enforcement of federal statutory rights.”

See also, story titled “Supreme Court Holds That Individuals Who Sue Under §332 Cannot Also Recover Damages Under §1983” in TLJ Daily E-Mail Alert No. 1,101, March 23, 2005.

Broadband Internet Access Service. Justice Stevens joined with the majority in the Court’s 2005 opinion [59 pages in PDF] in NCTA v. Brand X, 545 U.S. 967. This opinion upheld the FCC’s determination that cable broadband internet access service is an information service. Justice Thomas wrote the opinion of the Court.

Justice Stevens wrote a two sentence solo concurring opinion in which he commented on Chevron deference. He wrote that Justice Thomas’s opinion “correctly explains why a court of appeals’ interpretation of an ambiguous provision in a regulatory statute does not foreclose a contrary reading by the agency. That explanation would not necessarily be applicable to a decision by this Court that would presumably remove any pre-existing ambiguity.”

See also, story titled “Supreme Court Rules in Brand X Case” in TLJ Daily E-Mail Alert No. 1,163, June 28, 2005.

FCC Regulation of Broadcast Speech. Justice Scalia wrote for the majority in the 2009 5-4 opinion [PDF] in FCC v. Fox Television Stations, 556 U.S. __. In this case, the FCC issued an order that fined broadcasters for fleeting expletives. The Court of Appeals vacated and remanded, on the grounds that the FCC’s new fleeting expletives policy is arbitrary and capricious under the Administrative Procedure Act (APA) for failing to articulate a reasoned basis for the change in policy. The Supreme Court reversed on the basis APA does not preclude unexplained shifts of long standing policy.

Justice Stevens joined in the dissent. See, story titled “Supreme Court Reverses in FCC v. Fox” in TLJ Daily E-Mail Alert No. 1,932, April 28, 2009.

FCC Rulemaking Process. In FCC v. Fox Television Stations, Justice Stevens also wrote a solo opinion that delved into the nature of the administrative process.

“Apparently assuming that the Federal Communications Commission’s … rulemaking authority is a species of executive power, the Court espouses the novel proposition that the Commission need not explain its decision to discard a longstanding rule in favor of a dramatically different approach to regulation.” He continued that the Constitution disperses the federal power among the three branches –legislative, the executive, and judicial. Moreover, “Strict lines of authority are particularly elusive when Congress and the President both exert a measure of control over an agency.”

But, he wrote that “when Congress grants rulemaking and adjudicative authority to an expert agency composed of commissioners selected through a bipartisan procedure and appointed for fixed terms, it substantially insulates the agency from executive control.”

“Just as the FCC’s commissioners do not serve at the will of the President”, Stevens wrote, “its regulations are not subject to change at the President’s will. And when the Commission fashions rules that govern the airwaves, it exercises legislative power delegated to it by Congress.”

Justice Stevens, quoting from the Supreme Court’s 1935 opinion in Humphrey’s Executor v. U.S., 295 U.S. 602, stated that “the FCC “cannot in any proper sense be characterized as an arm or an eye of the executive´´ and is better viewed as an agent of Congress established “to carry into effect legislative policies embodied in the statute in accordance with the legislative standard therein prescribed, and to perform other specified duties as a legislative … aid.´´”

“There should be a strong presumption that the FCC’s initial views, reflecting the informed judgment of independent commissioners with expertise in the regulated area, also reflect the views of the Congress”, opined Stevens.

6. Internet Speech Cases.

Communications Decency Act. Justice Stevens wrote for the majority in the 1997 7-2 opinion in Reno v. ACLU, 521 US 845. This case held that the Communications Decency Act (CDA) is unconstitutional under the First Amendment. All of the Justices, except Rehnquist and O’Connor joined.

Internet Filtering. Justice Rehnquist wrote for the majority in the 2003 opinion in US v. American Library Association, 539 U.S. 194. This case upheld the constitutionality of the Children’s Internet Protection Act (CIPA), which provides that for libraries to receive federal subsidies or grants, they must use internet filtering technologies. Justice Stevens wrote a dissent.

The CIPA statute, which was enacted by the 106th Congress, requires schools and libraries receiving e-rate subsidies, pursuant to a Federal Communications Commission (FCC) program loosely based on 47 U.S.C. § 254(h)(1)(B), and libraries receiving grants under the Library Services and Technology Act (LSTA) (20 U.S.C. § 9101 et seq.), as a condition for receiving subsidies or grants, to use filtering technologies on computers with internet access that are used by children, and to filter images that constitute obscenity or child pornography.

A three judge panel of the U.S. District Court (EDPa) held the statute unconstitutional as a violation of the First Amendment. It held that filtering software is a content based restriction on access to a public forum, and is therefore subject to the strict scrutiny test – that is, it must be necessary to achieve a compelling governmental interest, and be narrowly tailored to further that interest. The District Court held that the federal government has a compelling interest in preventing the dissemination of obscenity, child pornography, or, in the case of minors, material harmful to minors. However, it found that mandating the use of filters is not narrowly tailored to further those interests.

The Supreme Court reversed. Justices wrote several opinions. No one opinion was joined by a majority of the Court. However, six Justices joined in opinions stating that the CIPA is constitutional. Rehnquist wrote an opinion that was joined by Justices O’Connor, Scalia and Thomas. In addition, Justice Kennedy wrote an opinion, that was joined by Justice Breyer, that concurred as to the judgment of constitutionality, but offered a different analysis.

Rehnquist first reviewed the nature of internet access and filtering software. He wrote “there is also an enormous amount of pornography on the Internet, much of which is easily obtained. … The accessibility of this material has created serious problems for libraries, which have found that patrons of all ages, including minors, regularly search for online pornography. … Some patrons also expose others to pornographic images by leaving them displayed on Internet terminals or printed at library printers. … Upon discovering these problems, Congress became concerned that the E-rate and LSTA programs were facilitating access to illegal and harmful pornography.”

Justice Stevens wrote in his dissent that “it is neither inappropriate nor unconstitutional for a local library to experiment with filtering software as a means of curtailing children’s access to Internet Web sites displaying sexually explicit images. … Whether it is constitutional for the Congress of the United States to impose that requirement … raises a vastly different question.”

He wrote that “Because the software relies on key words or phrases to block undesirable sites, it does not have the capacity to exclude a precisely defined category of images.” He stated that it both underblocks, by allowing undesirable sites through, and overblocks, by blocking non-objectionable web sites.

He wrote that “the software’s reliance on words to identify undesirable sites necessarily results in the blocking of thousands of pages that “contain content that is completely innocuous for both adults and minors, and that no rational person could conclude matches the filtering companies’ category definitions, such as `pornography´ or `sex.´ ´´ … In my judgment, a statutory blunderbuss that mandates this vast amount of “overblocking´´ abridges the freedom of speech protected by the First Amendment.”

See also, story titled “Supreme Court Upholds Children’s Internet Protection Act” in TLJ Daily E-Mail Alert No. 686, June 24, 2003.

COPA. Justice Kennedy wrote the opinion of the Court, in which Justice Stevens joined, in the 2004 5-4 opinion in Ashcroft v. ACLU, 542 U.S. 656. This was a a constitutional challenge to the Child Online Protection Act (COPA). Stevens also wrote a concurring opinion.

The COPA provided, in part, that “Whoever knowingly and with knowledge of the character of the material, in interstate or foreign commerce by means of the World Wide Web, makes any communication for commercial purposes that is available to any minor and that includes any material that is harmful to minors shall be fined not more than $50,000, imprisoned not more than 6 months, or both.”

The COPA further provided that “It is an affirmative defense to prosecution under this section that the defendant, in good faith, has restricted access by minors to material that is harmful to minors … by requiring use of a credit card”.

The District Court issued a preliminary injunction of the COPA. The U.S. Court of Appeals (3rdCir) affirmed. The Supreme Court affirmed the issuance of the preliminary injunction, and remanded.

In addition, Justice Stevens wrote a concurring opinion in which Justice Ginsburg joined. He wrote that “I continue to believe that the Government may not penalize speakers for making available to the general World Wide Web audience that which the least tolerant communities in America deem unfit for their children’s consumption, … and consider that principle a sufficient basis for deciding this case.”

He added that “encouraging deployment of user-based controls, such as filtering software, would serve Congress’ interest in protecting minors from sexually explicit Internet materials as well or better than attempting to regulate the vast content of the World Wide Web at its source, and at a far less significant cost to First Amendment values.”

See also, story titled “Supreme Court Affirms Preliminary Injunction of COPA” in TLJ Daily E-Mail Alert No. 928, June 29, 2004.

7. Privacy Cases.

Electronic Privacy. Justice Stevens wrote for the majority in the Supreme Court 2001 6-3 opinion in Bartnicki v. Vopper, 532 U.S. 514. The Court held that a radio host cannot be sued under 18 U.S.C. § 2511 for playing an audio recording of a cellular telephone conversation, despite a federal statute that made illegal both the interception of the conversation, and its disclosure.

Justice Stevens reasoned that the case pitted statutes banning disclosure of illegally obtained electronic communications against the First Amendment freedom of speech claims of persons with illegally obtained recordings to disclose them if their content pertains to a public issue.

While Justice Stevens and the majority may have defended First Amendment rights, they did so at the expense of privacy rights. See also, story titled “Supreme Court Diminishes Electronic Privacy” in TLJ Daily E-Mail Alert No. 192, May 22, 2001.

Thermal Imaging. Justice Scalia wrote for the majority in the Court’s 5-4 2001 opinion in Kyllo v. U.S., 533 U.S. 27. The majority held that the thermal imaging of a home to detect lamps used for growing marijuana constitutes a search within the meaning of the Fourth Amendment. The Court further held that such searches are unreasonable under the Fourth Amendment unless supported by probable cause and authorized by a warrant.

Justice Stevens wrote the dissenting opinion, which was joined by Rehnquist, O’Connor and Kennedy. He reasoned that the police did not enter the house search, so there was no search. Under this reasoning, police computer intrusions, or searches of files stored in the cloud, would not be protected by the 4th Amendment.

8. Other Cases.

Internet Wine Sales. Justice Kennedy wrote for the majority in the Court’s 2005 5-4 opinion in Granholm v. Heald, 544 U.S. 460. Justice Stevens wrote one of two dissents.

The Court held that Michigan’s and New York’s regulatory schemes that permit in-state wineries directly to ship alcohol to consumers, but restrict the ability of out-of-state wineries to do so, violate the dormant commerce clause. See also, story titled “Supreme Court Rules in Internet Wine Sales Case” in TLJ Daily E-Mail Alert No. 1,137, May 17, 2005.

The commerce clause is one of the few legal defenses that internet retailers have against burdensome, protectionist, and technophobic state regulators.

While Stevens would have allowed the protectionist state statutes to stand, his argument was limited to wine sales, which is also affected by the 21st Amendment. He wrote that “The New York and Michigan laws challenged in these cases would be patently invalid under well settled dormant Commerce Clause principles if they regulated sales of an ordinary article of commerce rather than wine.”

Trademark: Reverse Passing Off. Justice Scalia wrote the 8-0 2003 opinion in Dastar v. Twentieth Century Fox, 540 U.S. 806. Justice Stevens joined in this opinion. The defendant copied a work whose copyright had expired, and failed to attribute its origin. The plaintiff alleged that its work of authorship was copied (which can be actionable under the Copyright Act), but instead proceeded on the legal theory of violation of the Lanham Act’s false designation of origin provision. Passing off occurs when a producer misrepresents his own goods or services as someone else’s. Reverse passing off occurs when a producer misrepresents someone else’s goods or services as his own. Both can be actionable under the Lanham Act, which makes actionable not only the misleading use of marks, but also the false designation of origin of goods. The lower courts ruled for the producer. The Supreme Court reversed. It held that this is not the purpose of the Lanham Act. Moreover, allowing this sort of use of the Lanham Act would have the impermissible effect of creating perpetual quasi patents and copyrights. See also, story titled “Supreme Court Reverses in Dastar v. Fox” in TLJ Daily E-Mail Alert No. 672, June 3, 2003.

Computer Generated Images. Justice Stevens joined with the majority in the Court’s 2002 opinion in Ashcroft v. Free Speech Coalition, 535 U.S. 234, a case involving a constitutional challenge to part of the Child Pornography Prevention Act of 1996 (CPPA). The Court ruled that provisions of the statute banning computer generated images depicting minors engaging in sexually explicit conduct is overbroad, and violates the First Amendment. See also, story titled “Supreme Court Upholds Speech Rights of Child Pornographers” in TLJ Daily E-Mail Alert No. 412, April 17, 2002. The Congress then rewrote the statute at issue.