Over at Discourse magazine this week, my R Street colleague Jonathan Cannon and I have posted a new essay on how it has been “Quite a Fall for Digital Tech.” We mean that both in the sense that the last few months have witnessed serious market turmoil for some of America’s leading tech companies, but also that the political situation for digital tech more generally has become perilous. Plenty of people on the Left and the Right now want a pound of flesh from the info-tech sector, and the starting cut at the body involves Section 230, the 1996 law that shields digital platforms from liability for content posted by third parties.

With the Supreme Court recently announcing it will hear Gonzalez v. Google, a case that could significantly narrow the scope of Section 230, the stakes have grown higher. It was already the case that federal and state lawmakers were looking to chip away at Sec. 230’s protections through an endless variety of regulatory measures. But if the Court guts Sec. 230 in Gonzalez, then it will really be open season on tech companies, as lawsuits will fly at every juncture whenever someone does not like a particular content moderation decision. Cannon and I note in our new essay that,

if the court moves to weaken liability protections for digital platforms, the ramifications will be profoundly negative. While many critics today complain that the law’s liability protections have been too generous, the reality is that Section 230 has been the legal linchpin supporting the permissionless innovation model that fueled America’s commanding lead in the digital information revolution. Thanks to the law, digital entrepreneurs have been free to launch bold new ideas without fear of punishing lawsuits or regulatory shenanigans. This has boosted economic growth and dramatically broadened consumer information and communications options.

Many critics of Sec. 230 claim that reforms are needed to “rein in Big Tech.” But, ironically, gutting Sec. 230 would probably only make big tech companies even bigger because the smaller players in the market would struggle to deal with the mountains of regulations and lawsuits that would come about in its absence. Cannon and I continue on to explore what it means for the next generation of online innovators if these court cases go badly and Section 230 is scaled back or gutted:

Section 230 has been a legal cornerstone of the entire ecosystem. All the large-scale platforms we depend on for our online experience would never have gotten off the ground without its protection. […] More importantly, these platforms have relied on being able to host third-party content without fear of opening a Pandora’s box of private litigation and endless challenges from governments. By removing these protections, platforms will be forced to significantly increase their moderation practices to reduce risk of suits from zealous litigants. Besides the chilling effect this will have on speech, it also will put up a cost-prohibitive barrier for smaller entrants who lack the resources to have an army of content moderators to find and eliminate undesirable content.

The broader effect on market dynamism and the nation’s technological competitiveness will be profound as permissionless innovation is replaced by mountains of top-down permission slips. “If America’s digital sector gets kneecapped by the Supreme Court, or if new regulations or legislative proposals scale back Section 230 protections, it will be significantly more difficult for U.S. firms to continue to lead in the development and commercialization of new technologies,” we conclude.

Jump over to Discourse to read the entire piece.

On Friday, the Supreme Court ruled on Carpenter v. United States, a case involving the cell-site location information. In the 5 to 4 decision, the Court declared that “The Government’s acquisition of Carpenter’s cell-site records was a Fourth Amendment search.” What follows below is a roundup of reactions and comments to the decision. 

Ashkhen Kazaryan, Legal Fellow at TechFreedom, had this to say about the ruling:

This ruling recognizes the immensely sensitive nature of cell phone location data, and rightly requires a showing of probable cause before law enforcement can obtain location information from mobile carriers. Our country’s Founders would have expected no lesser safeguards to apply to non-stop surveillance. Indeed, the American Revolution was first instigated over surveillance that was far less invasive.

Ryan Radia at Competitive Enterprise Institute commended the decision:

Although the court’s opinion was narrowly crafted to address the particular facts in this case, its decision underscores the court’s willingness to apply rigorous scrutiny to governmental surveillance involving new technologies. In the United States, the Constitution protects people from unreasonable searches and seizures, and Fourth Amendment protection should apply to private information held on or collected through our personal devices.

Curt Levy, president of Committee for Justice, penned an op-ed in Fox News:

Rapid technological change inevitably outpaces the glacial evolution of the law and the Carpenter case is a perfect example. The location data in question was obtained under the Stored Communications Act (SCA), which did not require prosecutors to meet the “probable cause” standard of a warrant.

So Timothy Carpenter turned to the Constitution. But the Justice Department argued that the Fourth Amendment didn’t apply because of the Supreme Court’s Third-Party Doctrine. That doctrine holds that no search or seizure occurs when the government obtains data that the accused has voluntarily conveyed to a third party – in this case, one’s wireless provider.

The Third-Party Doctrine made some sense when it was invented 40 years ago. However, when applied to today’s modern technology, the doctrine results in a gaping hole in the Fourth Amendment…

The good news is that the Supreme Court took a big step towards repairing that hole Friday. In an opinion by Chief Justice John Roberts, the court acknowledged that Fourth Amendment doctrines must evolve to account for “seismic shifts in digital technology.”

Orin Kerr runs through nine questions you might have on the decision over at the Volokh Conspiracy:

(9) Does This Reasoning Apply Just For Physical Location Tracking, Or Does It Apply More Broadly?

That’s the big question. On one hand, the reasoning of the opinion is largely about tracking a person’s physical location. The opinion takes as a given that you have a reasonable expectation of privacy in the “whole” of your “physical movements.” The Court has never held that, so it’s sort of an unusual thing to just assume! But the Court seems to be getting it mostly from Justice Alito’s Jones concurrence, and the idea, as Alito wrote in Jones, that “society’s expectation has been that law enforcement agents and others would not— and indeed, in the main, simply could not—secretly monitor and catalogue every single movement of an individual’s car for a very long period.” …

On the other hand, there’s lots of language in the opinion that cuts the other way. Although the Court “decides no more than the case before us,” it also recasts a lot of doctrine in ways that could be used to argue for lots of other changes. Its use of equilibrium-adjustment will open the door to lots of new arguments about other records that are also protected. For example, what is the scope of this reasonable expectation of privacy in the “whole” of physical movements? Why is there? The Jones concurrences were really light on that, and Carpenter doesn’t do much beyond citing them for it: What is this doctrine and where did it come from? (And what other reasonable expectations of privacy in things do people have that we didn’t know about, and what will violate them?)

Cato’s Ilya Shapiro and Julian Sanchez comment on the Supreme Court’s decision in this Cato Daily podcast.

Columbia Law Professor Eben Moglen of the Software Freedom Law Center also opined on the decision:

The decision in Carpenter v. United States is a groundbreaking change in the application of the Fourth Amendment in digital society. By stating that the pervasive geographic location data assembled by cellular providers is not insulated from the warrant requirement even though it is information collected by third parties, the Court has fundamentally changed the principles underlying the application of the Amendment before today. The Court has stated that its present decision is narrow and factual, but a flood of further cases will seek to widen the meaning of today’s opinion.

[originally published on Plaintext on June 21, 2017.]

This summer, we celebrate the 20th anniversary of two developments that gave us the modern Internet as we know it. One was a court case that guaranteed online speech would flow freely, without government prior restraints or censorship threats. The other was an official White House framework for digital markets that ensured the free movement of goods and services online.

The result of these two vital policy decisions was an unprecedented explosion of speech freedoms and commercial opportunities that we continue to enjoy the benefits of twenty years later.

While it is easy to take all this for granted today, it is worth remembering that, in the long arc of human history, no technology or medium has more rapidly expanded the range of human liberties — both speech and commercial liberties — than the Internet and digital technologies. But things could have turned out much differently if not for the crucially important policy choices the United States made for the Internet two decades ago.

First, on June 26, 1997, the Supreme Court handed down its landmark decision in Reno v. ACLU, which struck down the Communications Decency Act’s provisions seeking to regulate online content under the old broadcast media standard. The Court concluded that there was “no basis for qualifying the level of First Amendment scrutiny that should be applied to this medium” and rejected the congressional effort to pigeonhole this exciting new medium into the archaic censorship regimes of the past.

The Reno decision was tremendously important in protecting online speakers from the chilling effect of government “indecency” regulations. The decision also set a strong legal precedent and was cited in countless subsequent decisions involving not only online speech, but also efforts to regulate video game content.

Second, in July 1997, the Clinton Administration released The Framework for Global Electronic Commerce, a document that outlined the US government’s new policy approach toward the Internet and the emerging digital economy. The Framework was a bold vision statement that endorsed comprehensive online freedom of exchange, saying that “the private sector should lead [and] the Internet should develop as a market driven arena not a regulated industry.” The Administration rejected a restrictive regulatory regime for commercial activities and instead recommended reliance on civil society, contractual negotiations, voluntary agreements, and industry self-regulation.

To “avoid undue restrictions on electronic commerce,” the vision statement recommended that “parties should be able to enter into legitimate agreements to buy and sell products and services across the Internet with minimal government involvement or intervention.” But, “[w]here governmental involvement is needed, its aim should be to support and enforce a predictable, minimalist, consistent and simple legal environment for commerce.”

Taken together, the Reno decision and the Clinton Administration’s Framework acted as a Magna Carta moment for the Internet and digital technologies. It signaled that “permissionless innovation” would become America’s governance stance toward online speech and commerce.

As I defined it in a book on the subject, permissionless innovation, “refers to the notion that experimentation with new technologies and business models should generally be permitted by default. Unless a compelling case can be made that a new invention will bring serious harm to society, innovation should be allowed to continue unabated and problems, if any develop, can be addressed later.” The primary advantage of permissionless innovation as a governance disposition is that it sends a clear green light to citizens telling them they are at liberty to pursue their own interests and passions, free from the suffocating grip of prior restraints on free speech and free exchange.

But the Reno decision and the Clinton Administration’s Framework are not the only critical policy decisions that helped enshrine permissionless innovation as the lodestar of online policy in the US. In the mid-1990s, the Clinton Administration made the decision to allow open commercialization of the Internet, which was previously just the domain of government agencies and university researchers. Even more crucially, when Congress passed and President Bill Clinton signed into law the Telecommunications Act of 1996, lawmakers made it clear that traditional analog-era communications and media regulatory regimes would generally not be applied to the Internet.

The Telecom Act also included an obscure provision known as “Section 230,” which immunized online intermediaries from onerous liability for the content and communications that traveled over their networks. Section 230 was hugely important in that it let online speech and commerce flourish without the constant threat of frivolous lawsuits looming overhead. Internet scholar David Post has argued that “it is impossible to imagine what the Internet ecosystem would look like today without [Section 230]. Virtually every successful online venture that emerged after 1996 — including all the usual suspects, viz. Google, Facebook, Tumblr, Twitter, Reddit, Craigslist, YouTube, Instagram, eBay, Amazon — relies in large part (or entirely) on content provided by their users, who number in the hundreds of millions, or billions,” he notes. It is unlikely that the vibrant marketplace of online speech and commerce we enjoy today could have existed without the protections afforded by Section 230.

Finally, in 1998, another important legislative development occurred when Congress passed the Internet Tax Freedom Act, which blocked all levels of government in the US from imposing discriminatory taxes on the Internet. That made it clear that the Net would not be milked as a “cash cow” the way previous communications systems had been.

So, let’s recap how policymakers generally got policy right for the Internet in the mid-1990s by enshrining permissionless innovation as the law of the land:

• The Executive Branch set the tone for online freedom by fully privatizing the underlying network and then establishing a governance vision based upon minimal government interference with online speech and exchange.
• The Legislative Branch generally endorsed the Clinton Administration’s vision for the Internet and digital technologies by ensuring that new policies would not be based upon the failed regulatory and tax policies of the past.
• The Judicial Branch upheld the centrality of the First Amendment in the Information Age and made it clear that this new medium for speech would be granted the strongest protection against government encroachments on freedom of speech and expression.

The combined effect of these wise, bipartisan policy decisions was that the Net and digital tech were “born free” instead of being born into regulatory captivity. We continue to enjoy the fruits of these freedoms today as citizens here in the US and across the world take advantage of the unprecedented ability to connect and communicate to pursue their passions and interests as they see fit.

There’s still more work to be done, however. Online platforms and digital technologies continue to come under attack from regulatory activists both here and abroad. Many governments continue to push back against these online speech and commercial freedoms, meaning we’ll need to redouble our efforts to highlight and defend the benefits of preserving these important victories.

Finally, as the underlying drivers of the Digital Revolution continue to spread into other segments of the economy, these freedoms will come into conflict with older top-down regulatory regimes for automobiles, aviation, medical technology, finance, and much more. This will create an epic conflict of governance visions between the Internet’s permissionless innovation model versus the precautionary, command-and-control regulatory regimes of the industrial age. We already see tension at work in policy deliberations over the Internet of Things, “big data,” driverless cars, commercial drones, robotics, artificial intelligence, 3D printing, virtual reality, the sharing economy, and others.

If policymakers hope to preserve and extend the benefits of the hard-fought victories of the Internet’s past twenty years, they will need to restate and reinvigorate their commitment to permissionless innovation to help spur the next great technological revolutions in these and other fields.

Title II allows the FCC to determine what content and media Internet access providers must transmit on their own private networks, so the First Amendment has constantly dogged the FCC’s “net neutrality” proceedings. If the Supreme Court agrees to take up an appeal from the DC Circuit Court of Appeals, which rejected a First Amendment challenge this summer, it will likely be because of Title II’s First Amendment deficiencies.

Title II has always been about handicapping ISPs qua speakers and preventing ISPs from offering curated Internet content. As former FCC commissioner Copps said, absent the Title II rules, “a big cable company could block access to an investigative report about its less-than-stellar customer service.” Tim Wu told members of Congress that net neutrality was intended to prevent ISPs from favoring, say, particular news sources or sports teams.

But just as a cable company chooses to offer some channels and not others, and a search engine chooses to promote some pages and not others, choosing to offer a curated Internet to, say, children, religious families, or sports fans involves editorial decisions. As communications scholar Stuart Benjamin said about Title II’s problem, under current precedent, ISPs “can say they want to engage in substantive editing, and that’s enough for First Amendment purposes.”

Title II – Bringing Broadcast Regulation to the Internet

Title II regulation of the Internet is frequently compared to the Fairness Doctrine, which activists used for decades to drive conservatives out of broadcast radio and TV. As a pro-net neutrality media professor explained in The Atlantic last year, the motivation for the Fairness Doctrine and Title II Internet regulation is the same: to “rescue a potentially democratic medium from commercial capture.” This is why there is almost perfect overlap between the organizations and advocates who support the Fairness Doctrine and those who lobbied for Title II regulation of the Internet.

These advocates know that FCC regulation of media has proceeded in similar ways for decades. Apply the expansive “gatekeeper” label to a media distributor and then the FCC will regulate distributor operations, including the content transmitted. Today, all electronic media distributors–broadcast TV and radio, satellite TV and radio, cable TV, and ISPs–whether serving 100 customers or 100 million customers, are considered “gatekeepers” and their services and content are subject to FCC intervention.

With broadband convergence, however, the FCC risked losing the ability to regulate mass media. Title II gives the FCC direct and indirect authority to shape Internet media like it shapes broadcast media. In fact, Chairman Wheeler called the Title II rules “must carry–updated for the 21st century.”

The comparison is apt and suggests why the FCC can’t escape the First Amendment challenges to Title II. Must-carry rules require cable TV companies to transmit all local broadcast stations to their cable TV subscribers. Since the must-carry rules prevent the cable operator editorial discretion over their own networks, the Supreme Court held in Turner I that the rules interfered with the First Amendment rights of cable operators.

But the Communications Act Allows Internet Filtering

Internet regulation advocates faced huge problem, though. Unlike other expansions of FCC authority into media, Congress was not silent about regulation of the Internet. Congress announced a policy in the 1996 update to the Communications Act that Internet access providers should remain “unfettered by State and Federal regulation.”

Regulation advocates dislike Section 230 because of its deregulatory message and because it expressly allows Internet access providers to filter the Internet.

Professor Yochai Benkler, in agreement with Lawrence Lessig, noted that Section 230 gives Internet access providers editorial discretion. Benkler warned that because of 230, “ISPs…will interject themselves between producers and users of information.” Further, these “intermediaries will be reintroduced not because of any necessity created by the technology, or because the medium requires a clearly defined editor. Intermediaries will be reintroduced solely to acquire their utility as censors of morally unpalatable materials.”  

Professor Jack Balkin noted likewise that “…§ 230(c)(2) immunizes [ISPs] when they censor the speech of others, which may actually encourage business models that limit media access in some circumstances.” 

Even the FCC acknowledges the consumer need for curated services and says in the Open Internet Order that Title II providers can offer “a service limited to offering ‘family friendly’ materials to end users who desire only such content.”

While that concession represents a half-hearted effort to bring the Order within compliance of Section 230, it simply exposes the FCC to court scrutiny. Allowing “family friendly” offers but not other curated offers is content-based distinction. Under Supreme Court RAV v. City of St. Paul, “[c]ontent-based regulations are presumptively invalid.”  Further, the Supreme Court said in US v. Playboy, content-based burdens must satisfy the same scrutiny as content-based bans on content. 

Circuit Split over the First Amendment Rights of Common Carriers

Hopefully the content-based nature of the Title II regulations are reason enough for the Supreme Court to take up an appeal. Another reason is that there is now a circuit split regarding the extent of First Amendment protections for common carriers.

The DC Circuit said that the FCC can prohibit content blocking because ISPs have been labeled common carriers.

In contrast, other courts have held that common carriers are permitted to block content on common carrier lines. In Information Providers Coalition v. FCC, the 9th Circuit held that common carriers “are private companies, not state actors…and accordingly are not obliged to continue…services of particular subscribers.” As such, regulated common carriers are “free under the Constitution to terminate service” to providers of offensive content. The Court relied on its decision a few years earlier in  Carlin Communications v. Mountain States Telephone and Telegraph Company that when a common carrier phone company is connecting thousands of subscribers simultaneously to the same content, the “phone company resembles less a common carrier than it does a small radio station” with First Amendment rights to block content. 

Similarly, the 4th Circuit in Chesapeake & Potomac Telephone Co. v. US held that common carrier phone companies are First Amendment speakers when they bundle and distribute TV programming, and that a law preventing such distribution “impairs the telephone companies’ ability to engage in a form of protected speech .” 

The full DC Circuit will be deciding whether to take up the Title II challenges. If the judges decline review, the Supreme Court would be the final opportunity for a rehearing. If appeal is granted, the First Amendment could play a major role. The Court will be faced with a choice: Should the Internet remain “unfettered” from federal regulation as Congress intended? Or is the FCC permitted to perpetuate itself by bringing legacy media regulations to the online world?

The FCC’s transaction reviews have received substantial scholarly criticism lately. The FCC has increasingly used its license transaction reviews as an opportunity to engage in ad hoc merger reviews that substitute for formal rulemaking. FCC transaction conditions since 2000 have ranged from requiring AOL-Time Warner to make future instant messaging services interoperable, to price controls for broadband for low-income families, to mandating merging parties to donate $1 million to public safety initiatives.

In the last few months alone,

• Randy May and Seth Cooper of the Free State Foundation wrote a piece that the transaction reviews contravene rule of law norms.
• T. Randolph Beard et al. at the Phoenix Center published a research paper about how the FCC’s informal bargaining during mergers has become much more active and politically motivated in recent years.
• Derek Bambauer, law professor at the University of Arizona, published a law review article that criticized the use of informal agency actions to pressure companies to act in certain ways. These secretive pressures “cloak what is in reality state action in the guise of private choice.”

This week, in the Harvard Journal of Law and Public Policy, my colleague Christopher Koopman and I added to this recent scholarship on the FCC’s controversial transaction reviews.

We echo the argument that the FCC merger policies undermine the rule of law. Firms have no idea which policies they’ll need to comply with to receive transaction approval. We also note that the FCC is motivated to shift from formal regulation, which is time consuming and subject to judicial review, to “regulation by transaction,” which has fewer restraints on agency action. The FCC and the courts have put few meaningful limits on what can be coerced from merging firms. Many concessions from merging firms are policies that the FCC is simply unwilling to accomplish via formal rulemaking or, sometimes, is outright prohibited by law from regulating. Since a firm’s concessions in this coercive process are nominally voluntary, they typically can’t sue.

We point out, further, that the FCC has a potentially damaging legal issue on its hands. Since the agency is now extracting concessions related to content distribution and TV and radio programming, its transaction review authority may be presumptively unconstitutional and subject to facial First Amendment challenges. That means many parties can challenge the law, not simply the ones burdened by conditions (who fear FCC retaliation).

Content-neutral licensing laws, like the FCC’s transaction review authority, are presumptively unconstitutional when there’s a risk  that public officials will intimidate speakers about content. We cite for this proposition the Supreme Court’s decision in City of Lakewood v. Plain Dealer Publishing Co., a 1988 case striking down as unconstitutional a city requirement that newspapers seek a public interest determination from public officials before installing newsracks. As the Court said, for rules with a “nexus to expression,”

a facial [First Amendment] challenge lies whenever a licensing law gives a government official or agency substantial power to discriminate based on the content or viewpoint of speech by suppressing disfavored speech or disliked speakers.

The public officials in City of Lakewood hadn’t even pressured newspapers about content; the mere potential for intimidation was a constitutional violation. If the agency’s authority was challenged, the FCC would be in worse shape than the public officials in City of Lakewood. Unlike those local officials, the FCC has used licensing to pressure firms to add certain types of programming. So the law certainly has the nexus to expression that the Supreme Court requires for a facial challenge.

We highlight, for instance, the many concessions related to content in the 2010 Comcast-NBCU merger. Comcast-NBCU conceded to create children’s, public interest, and Spanish-language TV and video-on-demand programming, relinquish editorial control over Hulu programming, and spend millions of dollars on digital literacy and FDA nutritional TV public service announcements. In that merger and many others, the FCC conditioned approval on compliance with open access and net neutrality policies. As I and others have pointed out, net neutrality rules also threaten free speech rights.

We conclude with some policy recommendations to avoid a constitutional problem for the FCC, including congressional repeal of the FCC’s transaction review authority. We point out that the FCC actually has Clayton Act authority to review common carrier mergers, but the FCC refuses to use it, likely because the agency views traditional competition analysis as too constraining. In our view, unless or until the FCC promulgates predictable guidelines about what is relevant in a transaction review and stays away from content distribution issues, the FCC’s transaction review authority is vulnerable to legal challenge.

Aereo’s antenna system is frequently characterized perjoratively as a Rube Goldberg contraption, including in the Supreme Court oral arguments. Funny enough, Preston Padden, a veteran television executive, has characterized the legal system producing over-the-air broadcast television–Aereo’s chief legal opponents–precisely the same way. It’s also ironic that Aereo is in a fight for its life over alleged copyright violations since communications law diminishes the import of copyright law and makes copyright almost incomprehensible. Larry Downes calls the legal arguments for and against Aereo a “tangled mess.” David Post at the Volokh Conspiracy likewise concluded the situation is “pretty bizarre, when you think about it” after briefly exploring how copyright law interacts with communications law.

I agree, but Post actually understates how distorted the copyright law becomes when TV programs pass through a broadcaster’s towers, as opposed to a cable company’s headend. In particular, a broadcaster, which is mostly a passive transmitter of TV programs, gains more control over the programs than the copyright owners. It’s nearly impossible to separate the communications law distortions from the copyright issues, but the Aereo issue could be solved relatively painlessly by the FCC. It’s unfortunate copyright and television law intertwine like this because a ruling adverse to Aereo could potentially–and unnecessarily–upend copyright law.

This week I’ve seen many commentators, even Supreme Court justices, mischaracterize the state of television law when discussing the Aereo case. This is a very complex area and below is my attempt to lay out some of the deeper legal issues driving trends in the television industry that gave rise to the Aereo dispute. Crucially, the law is even more complex than most people realize, which benefits industry insiders and prevents sensible reforms.

The FCC, and Congress to a lesser extent, has gone to great lengths to protect broadcasters from competition from other television distributors, as the Copyright Office has said. There is nothing magical about free broadcast television. It’s simply another distribution platform that competes with several other TV platforms, including cable, satellite, IPTV (like AT&T U-Verse), and, increasingly, over-the-top streaming (like Netflix and Amazon Prime Instant Video).

Hundreds of channels and thousands of copyrighted programs are distributed by these non-broadcast distributors (mostly) through marketplace negotiations.

Strange things happen to copyrights when programs are delivered via the circuitous route 1) through a broadcast tower and 2) to a cable/satellite operator. Namely, copyright owners, by law, lose direct control over their intellectual property when local broadcasters transmit it. At that point, regulators, not copyright holders, determine the nature of bargaining and the prices paid.

Distribution of non-local broadcast programming

Right away, an oddity arises. Copyright treatment of local broadcasts differs from distant (non-local) broadcasts. Cable and satellite companies have never paid copyright royalties for signals from a local broadcast. (This is one reason the broadcast lawyer denied that Aereo is a cable company during Supreme Court oral arguments–Aereo merely transmits local broadcast signals.) But if a cable or satellite company retransmits signals from a non-local (“distant”) broadcaster, the company pays the Copyright Office for a copyright license. However, this license is not bargained for with the copyright holder; it is a compulsory license. Programmers are compelled to license their program and in return receive the price set by the panel of Copyright Office officials.

The Copyright Office has asked Congress for over 30 years to eliminate the compulsory license system for distant broadcasts. There are few major distant broadcasters carried by cable companies but the most popular is WGN, a Chicago broadcaster that is carried on many cable systems across the country. The programmers complain they’re underpaid and the Copyright Office has the impossible task of deciding a fair price for a compulsory copyright license. Alleged underpayment is partly why TBS, in 1998, converted from a distant broadcast network to a pure cable network, where TBS could bargain with cable and satellite companies directly.

Distribution of local broadcast programming

Yet things get even stranger when you examine how local broadcasts are treated. Copyright is, as best as I can tell, a nullity when a program is broadcast by a local broadcaster and then retransmitted by a cable company. Until 1992, no payments passed from cable companies to either the broadcaster or copyright holder of broadcast programs. Congress made the retransmission of locally-broadcasted programs royalty-free. Cable companies captured the free over-the-air signals and sold those channels along with cable channels to subscribers.

Why would broadcasters and programmers stand for this? They tolerated this for decades because the FCC requires broadcasts to be “free”–that is, funded by ads. Local broadcasters and programmers benefited from cable distribution because cable TV reaches more viewers that broadcasters can’t reach.

Then in 1992, as cable TV grew, Congress decided to rebalance the competitive scales. Congress created a new property right that ensured local broadcasters got paid by cable companies–the retransmission right. Congress did not require a copyright royalty payment. So cable (and later satellite) still didn’t pay copyright royalties for local broadcasts. The “retransmission right” is held by, not the copyright owner, but the owner of the broadcast tower. This is a bizarre situation where, as the Copyright Office says, Congress accords a “licensee of copyrighted works (broadcasters) greater proprietary rights than the owner of copyright.”

Welcome to the bizarro world of broadcast television that Aereo finds itself. On the bright side, perhaps the very public outcry over Aereo means the laws that permitted Aereo’s regulatory arbitrage will be scrutinized and rationalized. In the short term, I’m hoping the Supreme Court, as Downes mentions, punts the case to a lower court for more fact-finding. Aereo is a communications law case disguised as a copyright case. These issues really need to be before the FCC for a determination about what is a “cable operator” and an “MVPD.” A finding that Aereo is either one would end this copyright dispute.

Yes, we pretty much have. That’s the inescapable conclusion following the U.S. Supreme Court’s historic First Amendment decision in Brown v. EMA back in June, which struck down a California law governing the sale of “violent video games” to minors.  By a 7-2 margin, the court held that video games have First Amendment protections on par with books, film, music and other forms of entertainment.

The folks over at ALEC asked me to explore what happens next and what steps state and local lawmakers can take in a post-Brown world if they wish to address concerns about video game content. My essay appears in the Nov/Dec Inside ALEC newsletter. You can read the entire thing here or via the Scribd embed I have placed down below the fold.

I argue that, going forward, this ruling will force state and local governments to change their approach to regulating all modern media content. Education and awareness-building efforts will be the more fruitful alternative since censorship has now been largely foreclosed.

Game Over for Video Game Censorship – Adam Thierer INSIDE ALEC [November 2011]

Yesterday’s 7-2 decision in Brown v. EMA [summaries here from me + Berin Szoka] was one of those historic First Amendment rulings that tends to bring out passions in people. You either loved it or hated it. But it’s sad to see some critics on the losing end of the case declaring that only greed could have possibly motivated the Court’s decision.

For example, California Senator Leland Yee, the author of the law that the Supreme Court struck down yesterday, obviously wasn’t happy about the outcome of the case. Neither was James Steyer, CEO of the advocacy group Common Sense Media, who has been a vociferous advocate of the California law and measures like it. What they had to say in response to the decision, however, was outlandish and juvenile. In essence, they both claimed that the Supreme Court only struck down the law to make video game developers and retailers happy.

“Unfortunately, the majority of the Supreme Court once again put the interests of corporate America before the interests of our children,” Leland Yee said in a post on his website yesterday. “As a result of their decision, Wal-Mart and the video game industry will continue to make billions of dollars at the expense of our kids’ mental health and the safety of our community. It is simply wrong that the video game industry can be allowed to put their profit margins over the rights of parents and the well-being of children.” Jim Steyer reached a similar conclusion: “Today’s decision is a disappointing one for parents, educators, and all who care about kids,” he said. “Today, the multi-billion dollar video game industry is celebrating the fact that their profits have been protected, but we will continue to fight for the best interests of kids and families.”

Mr. Yee and Mr. Steyer seem to be under the impression that the Court and supporters of its ruling in Brown cannot possibly care about children and that something sinister motivates our passion about the victory. Apparently we’re all just apparently in it to make video game industry fat cats and retailing giants happy! That’s a truly insulting position for Mr. Yee and Mr. Steyer to adopt. Perhaps it is just because they are sore about the outcome in the case that are adopting such rhetorical tactics. Regardless, I think they do themselves, their constituencies, and the public a great injustice by suggesting that only greed could possibly be motivating the outcome in this case.

Why is it so hard for Mr. Yee and Mr. Steyer to believe that many of us — like the majority writing for the Court in Brown — believe that video games represent valuable, constitutionally protected speech and that laws like those in California are an affront to First Amendment rights we cherish? What Mr. Yee and Mr. Steyer are asking us to believe is that all those average gamers and free speech advocates who lined up behind the video game industry and merchants who brought this case did so only out of a concern about the welfare of those companies.  Preposterous!  Anyone who knows anything about game industry politics knows that some rather serious tensions exist between gamers, game developers, and game retailers.

Incidentally, it’s particular silly for Mr. Yee to single out Wal-Mart in his comment yesterday since Wal-Mart actually goes to great lengths to keep “Mature”-rated games out of the hands of minors who might try to purchase them on their own. But I could care less about how much money Wal-Mart, any other retailer, or any video game developer makes from selling games. That’s the last thing on the mind of most First Amendment supporters when they praise this decision and it’s ridiculous that Mr. Yee and Mr. Steyer would list it as the primary motivation of the Court or supporters of the decision.

And then there’s Mr. Steyer’s comment that “today’s decision is a disappointing one for parents, educators, and all who care about kids.”  Utterly insulting tripe. Millions of parents like me “care about kids” passionately and devote most of our lives to raising them properly. I understand you want to help us do that, but you are not helping when you insult the very people you say your organization exists to support.

I have repeatedly praised Common Sense Media here and elsewhere for many of the outstanding services and information they provide to parents. My wife and I regularly consult CSM’s excellent movie and video game summaries before we let our kids consume certain titles. It was also my great privilege to serve on a blue ribbon online child safety task force that CSM created and co-sponsored.

But when Mr. Steyer veers into this sort of hysterical ‘you’re-either-for-these-laws-or-you’re-against-children’ sort of lunacy, it really makes me question whether I should frequent his organization’s website anymore or have any further interaction with this group. While I appreciate CSM’s efforts to empower parents with more and better information about the content our families consume, it is insulting in the extreme for Mr. Steyer to suggest that you can’t “care about kids” and also care about the First Amendment.

Like the majority of the justices on the Court, I support limits on how our government controls speech because we live in a nation that cherishes freedom of expression and personal responsibility.  We should not expect Uncle Sam to act as a national nanny and make subjective determinations about what is best for our families. As Catherine Ross, a professor at George Washington University Law School, noted in a nice Washington Post oped, “By rejecting this radical path, the justices [in Brown] protected our children by preserving our liberty.”

Quite right.  I’m proud the Supreme Court sided with freedom yesterday and against the sort of nannyism from above that Mr. Steyer and Mr. Yee apparently favor and equate with “caring about kids.”  These men obviously don’t take First Amendment rights quite as seriously as some of the rest of us. But shame on them for claiming that just because many of us (or the Courts) do take these rights and responsibilities seriously that it somehow means we don’t care about our children or that we only believe these things in order to make corporations happy.

The Supreme Court wasn’t playing games with the First Amendment today. With its 7-2 decision in Brown v. EMA, the Court has protected video game creators and players from unconstitutional restrictions on what we can produce and play.

Today’s decision ensures that video games have First Amendment protection on par with books, film, music and other forms of entertainment and will help block other regulatory efforts that are justified by blindly alluding to the rationale that “it’s for the children.” The decision fits nicely alongside an impressive and growing string of recent First Amendment cases from the Court that significantly raise the bar against legislative efforts to regulate freedom of speech and expression.

Quick background: In May 2010, the Supreme Court announced that it would review a California law regulating the sale of violently-themed video games to minors. The case was Schwarzenegger v. Entertainment Merchants Association, but the name of the case changed to after Jerry Brown became governor of California.  The Ninth Circuit Court of Appeals had struck down a California law which prohibited the sale or rental of “violent video games” to minors, but California appealed and the SCOTUS took up the issue.  [Note: When we were still with the Progress & Freedom Foundation, Berin Szoka and I filed a big amicus brief with the Court in the case along with some folks at the Electronic Frontier Foundation.]  By a 7-2 vote, the Supreme Court backed the Ninth Circuit and overturned the California law. Justice Scalia wrote for the majority. Justices Thomas and Breyer dissented.

The crucial holdings in the decision are as follows:

1. Video games are protected speech deserving strict First Amendment scrutiny. The Court held: “Video games qualify for First Amendment protection.  Like protected books, plays, and movies, they communicate ideas through familiar literary devices and features distinctive to the medium.  And ‘the basic principles of freedom of speech… do not vary’ with a new and different communication medium.”
2. Depictions of violence in video games cannot be treated as obscenity and regulated as such. The Court concluded flatly: “speech about violence is not obscene” and held that “a legislature cannot  create new categories of unprotected speech simply by weighing the value of a particular category against its social  costs and then punishing it if it fails the test.” It continues on: “the State of California wishes to create a wholly new category of content-based regulation that is permissible only for speech directed at children.  That is unprecedented and mistaken.  This country has no tradition of specially restricting children’s access  to depictions  of violence.”
3. The social science literature on the impact of violent games is inconclusive. The Court found that: “Psychological studies purporting to show a connection between exposure to violent video games and harmful effects on children do not prove that such exposure causes minors to act  aggressively.  Any demonstrated effects are both small and indistinguishable from effects produced by other media.”
4. Concerns about children cannot be used as an excuse for sweeping content regulation (especially when less-restrictive means exist of dealing with access to objectionable content.) Government cannot excuse censorship by pointing to fears about children’s access to violent depictions of media. The Court noted that, “California’s effort to regulate violent video games is the latest episode in a long series of failed attempts to censor violent entertainment for minors,” but that, “even where the protection of children is the object, the  constitutional limits on governmental action apply.” Violently-themed media is as old as literature itself, the Court noted. As has been the case with previous forms of violent content, parental responsibility is the better way to regulate access to potentially objectionable media. And the Court noted that tools and ratings exist to help parents do so.

This is the proper approach for a society that cherishes free speech, freedom of expression, and personal responsiblity. The Court did a great thing here today. Honestly, I was expecting a loss and had a long essay ready to go that reflected my disappointment.  Never have I been so pleased to tear up something I had spent so much time on!

A great day for the First Amendment.

P.S. As if often the case, best line in the decision came in a footnote: “Reading Dante is unquestionably more cultured and intellectually edifying than playing Mortal Kombat. But these cultural and intellectual differences are  not  constitutional ones.  Crudely violent video games, tawdry TV shows, and cheap novels and magazines are no less  forms of speech than The Divine Comedy,” Justice Scalia wrote.

Additional TLF Reading on Video Games:

• Again, Most Video Games Are Not Violent
• <a title="Permanent link to Thoughts on Oral Arguments in Schwarzenegger v. EMA Video Game Case” href=”../2010/11/04/thoughts-on-oral-arguments-in-schwarzenegger-v-ema-video-game-case/”>Thoughts on Oral Arguments in Schwarzenegger v. EMA Video Game Case
• <a title="Permanent link to EFF-PFF Amicus Brief in Schwarzenegger v. EMA Supreme Court Videogame Violence Case” href=”../2010/09/18/eff-pff-amicus-brief-in-schwarzenegger-v-ema-supreme-court-videogame-violence-case/”>EFF-PFF Amicus Brief in Schwarzenegger v. EMA Supreme Court Videogame Violence Case
• If We Ban Violent Video Games, Why Not Violent Theme Park Attractions?
• Video Games, Media Violence & the Cathartic Effect Hypothesis
• More on Monkey See-Monkey Do Theories about Media Violence & Real-World Crime
• Will the Supreme Court Protect Kitten-Crushing Videos & Virtual Kid Porn but Not Video Games?
• Video Games, Free Speech & the Lunacy of “Ecogenerism”
• Like the Terminator, Video Game Censorship Efforts Just Won’t Die
• Video Games and “Moral Panic”
• Kids, Video Games, Fantasy, & Imagination
• Video Games, Violence, & Social “Science”: Another Day, Another Fight
• Dear Gov. Patterson… Regarding that Video Game Bill You Are About to Sign
• Do video games create cop killers?
• review: Dr. Kourosh Dini’s “Video Game Play & Addiction”
• review: Kutner & Olson’s “Grand Theft Childhood”
• presentation at PSU’s conference on future of video games
• Why hasn’t violent media turned us into a nation of killers?
• First Amendment & Video Games [Updated] Score: Gamers 11, Censors 0
• Sen. Rockefeller Gives Up on Parenting at Senate Violence Hearing
• Can Government Improve Video Game Ratings?
• An Indecency Regime for Video Games?
• Let’s Consider the Facts Before We Call In Government to Regulate Video Games

Today the Mercatus Center has released a short new paper I have authored on “Unappreciated Benefits of Advertising and Commercial Speech.”  I begin the piece by noting that:

Federal policy makers, state legislators, and state attorneys general have recently shown interest in regulating commercial advertising and marketing. Several new regulatory initiatives are being proposed, or are already underway, that could severely curtail or restrict advertising or marketing on a variety of platforms. The consequences of these stepped-up regulatory efforts will be profound and will hurt consumer welfare both directly and indirectly.

I go on to note that “advertising can be an easy target for politicians or regulatory activist groups who make a variety of (typically unsubstantiated) claims about its negative impact on society,” but then continue on to explain how “the role of commercial speech in a free-market economy is often misunderstood or taken for granted.” I outline how, despite regulators’ concerns, consumers actually derive three important types of benefits from advertising and marketing: (1) Informational / Educational Benefits; (2) Market Choice / Pro-Competitive Benefits; and (3) Media Promotion / Cross-Subsidization.  After discussing each benefit, I conclude that:

For these reasons, a stepped-up regulatory crusade against advertising and marketing will hurt consumer welfare since it will raise prices, restrict choice, and diminish marketplace competition and innovation—both in ad-supported content and service markets, and throughout the economy at large.  Simply stated, there is no free lunch.

Read the entire 1,800-word essay here.  I have also embedded the document down below in a Scribd reader.

Unappreciated Benefits of Advertising and Commercial Speech (Adam Thierer – Mercatus Center) http://d1.scribdassets.com/ScribdViewer.swf

I’m still digesting the transcript from Tuesday’s Supreme Court oral arguments in the important First Amendment video game case, Schwarzenegger v. EMA. [Full transcript is here.]  I thought I would post just a couple of quick thoughts here. [Reminder: here is the amicus brief that Berin Szoka and I filed in the case, and here is some analysis of the case by Larry Downes.]

On Defining “Deviant Violence”

Much of the discussion during oral arguments was preoccupied with defining the contours of the term “deviant violence.”  I was pleased to see the Justices asking some sharp questions about the interpretation of that term for regulatory purposes. In particular, I enjoyed Justice Scalia’s remarks and questions to California Deputy Attorney General Zackery Morazzini, who argued the case on behalf of the state. Scalia said:

I am not just concerned with the vagueness. I am concerned with the vagueness, but I am concerned with the First Amendment, which says Congress shall make no law abridging the freedom of speech. And it was always understood that the freedom of speech did not include obscenity. It has never been understood that the freedom of speech did not include portrayals of violence. You are asking us to create…  a whole new prohibition which the American people never — never ratified when they ratified the First Amendment.  They knew they were — you know, obscenity was — was bad, but — what’s next after violence? Drinking? Smoking? Movies that show smoking can’t be shown to children? Does — will that affect them? Of course, I suppose it will.  But is — is that — are — are we to sit day by day to decide what else will be made an exception from the First Amendment? Why — why is this particular exception okay, but the other ones that I just suggested are not okay? (p. 15-16)

Indeed, that’s what is at stake in this case: The beginning of a new class of exceptions to the First Amendment based upon concerns about children’s exposure to depictions of “excessive” or “deviant” violence.”  Once you open up this can of worms, the sky is likely the limit in terms of how far governments might go to regulate speech in the name of “protecting children.”

If a majority of the Justices choose to side with the State of California and open the floodgates to a new era of speech regulation, I very much looking forward to seeing how they reconcile that with their decision last term in the controversial case of United States v. Stevens. In Stevens, the Court struck down a federal law that criminalized the creation or sale of videos showing animal cruelty. The law that the Court overturned was particularly concerned with “crush videos,” which, according to the Court, “feature the torture and killing of helpless animals and are said to appeal to persons with a specific sexual fetish.” As I pointed out in this earlier essay, it would seem rather peculiar that the Court would allow the dissemination of videos of real kittens having their heads crushed by naked women in high heels, which kids might be able to see on the Internet, but then hold here in the Schwarzenegger case that allowing a minor to buy an M-rated video game with depictions of violence is verboten.  Hard to find the logic in that!

But the Court is going to have an even harder time reconciling regulation of depictions of violence with obscenity law and then delineating the boundaries of what governments can and cannot censor or control the sale of.  At least with obscenity, we have one bright-line test: Is sexual penetration shown?  Of course, things get pretty pretty murky after that.  Regardless, what is the equivalent test for violence in video games, movies, or television? Is it decapitation or exploding heads?  What if it’s a zombie head?  What if it’s just a ear that gets blown off a zombie’s head? What if you beat the zombie over the head with a baseball bat to kill him but his head never comes off? Or, as Justice Sotomayor asked, “what happens when the character gets maimed, head chopped off and immediately after it happens they spring back to life and they continue their battle. Is that covered by your act? Because they haven’t been maimed and killed forever. Just temporarily.” (p. 58)

You get the point: A lot of line-drawing is going to need to be done if the Court goes down this path.

On Juries & “Community Standards”

So, let’s drill a little deeper into the line-drawing issue and the enforcement of such regulatory ordinances. During oral arguments, there was an interesting exchange regarding how the State of California, or any other local government, might go about enforcing more speech-limiting ordinances on this front. Justice Ginsburg asked Assistant AG  Morazzini: “does California have any kind of an advisory opinion, an office that will view these videos and say, yes, this belongs in this, what did you call it, deviant violence, and this one is just violent but not deviant? Is there — is there any kind of opinion that the — that the seller can get to know which games can be sold to minors and which ones can’t?”  A terrific question and one followed up by Justice Scalia, who joked (I think): “You should consider creating such a one. You might call it the California office of censorship. It would judge each of these videos one by one.”

In response, Mr. Morazzini defaulted to the old obscenity playbook and argued that:

California’s not doing that here. The standard is quite similar to that in the sexual material realm. California is not acting as a censor. It is telling manufacturers and distributors to look at your material and to judge for yourselves whether or not the level of violent content meets the prongs of this definition. (p. 24)

Thus, Mr. Morazzini wants to dismiss the entire inquiry with the retort: “we ask juries to judge sexual material and its appropriateness for minors as well.”  But that doesn’t necessarily make such regulation any less offensive in the eyes of the First Amendment.  If the state empowers juries to censor, well, it’s still censorship. It’s just censorship with a slightly more democratic face!

Of course, in the field of First Amendment jurisprudence, this is all filed under the banner of “community standards” regulation. As Mr. Morazzini suggests, these is, indeed, a history of it in this country when it comes to obscenity law, although its increasingly rare.  Regardless, I have argued that the time has come to think differently about the appropriateness of “community standards” regulation.  Here’s how I put it in some remarks I made at the Oxford University Internet Institute last year:

It is my hope and belief that we are now in a position to more fully empower parents such that government regulation of content and communications will be increasingly unnecessary. In the past, it was thought to be too difficult for families to enforce their own “household standard” for acceptable content. Thus, many believed government needed to step in and create a baseline “community standard” for the entire citizenry.  Unfortunately, those “community standards” were quite amorphous and sometimes completely arbitrary when enforced through regulatory edicts.  Worse yet, those regulatory standards treated all households as if they had the same tastes or values—which is clearly not the case in most pluralistic societies. If it is the case that families now have the ability to effectively tailor media consumption and communications choices to their own preferences—that is, to craft their own “household standard”—then the regulatory equation can and should change.  Regulation can no longer be premised on the supposed helplessness of households to deal with content flows if families have been empowered and educated to make content determinations for themselves.  Luckily, that is the world we increasingly live in today. Parents have more tools and methods at their disposal to help them decide what constitutes acceptable media content in their homes and in the lives of their children. Going forward, our goal should be to ensure that parents or guardians have (1) the information necessary to make informed decisions and (2) the tools and methods necessary to act upon that information. Optimally, those tools and methods would give them the ability to not only block objectionable materials, but also to more easily find content they feel is appropriate for their families. In my work, I refer to this as the “household empowerment vision.”

What we have with the Schwarzenegger case is the perfect test case for which direction the Court wants to take us.  Will the Court hold on to the past and the old vision of “community standards” regulation that the State of California wants to extend?  Or will the Court recognize that that standard was really a second-best surrogate for more direct parental and household-based standards of control?  The latter position is the one more consistent with a free, diverse society.  As I argued in my old book on Parental Controls & Online Child Protection:

Decisions about acceptable media content are extraordinarily personal; no two people or families will have the same set of values, especially in a nation as diverse as ours. Consequently, it would be optimal if public policy decisions in this field took into account the extraordinary diversity of citizen and household tastes and left the ultimate decision about acceptable content to them. That’s especially the case in light of the fact that most U.S. households are made up entirely of adults.

The ideal state of affairs, therefore, would be a nation of fully empowered parents who have the ability to perfectly tailor their family’s media consumption habits to their specific values and preferences. Specifically, parents or guardians would have (1) the information necessary to make informed decisions and (2) the tools and methods necessary to act upon that information. Importantly, those tools and methods would give them the ability to not only block  objectionable materials, but also to more easily find content they feel is appropriate for their families.

On The Role of Parental Controls in First Amendment Jurisprudence

Finally, let’s talk about those parental controls for a moment and the role they play in debates over First Amendment jurisprudence.  At one point during the oral arguments on Tuesday, Chief Justice Roberts interrupted video game industry lawyer Paul M. Smith of Jenner & Block to say that, “any 13-year-old can bypass parental controls in about 5 minutes.”  In response, Mr. Smith correctly noted that “That is one element of about five different elements” and cited a couple of other things such as the information conveyed by the video game’s excellent ratings system, as well as household-level controls / restrictions and the “power of the purse” that parents can exercise when junior asks for $50-$60 bucks to buy one of these games.

What Mr. Smith was getting at here is that today we have access to what I have called “a mosaic of parental control tools and methods” and what is really essential for First Amendment jurisprudence is that the Court not pin everything on just one of those tool or method.  Yes, some kids can evade parental controls, ignore household rules, steal money from Mom or Dad’s wallet to buy a game, etc.  But the combination of these many layers of control constitute what the court has repeatedly called “the less restrictive means” of dealing with these concerns compared to the sweeping nature of government content controls.

Importantly, we should recall what the Supreme Court said about the less restrictive means test in its 2000 decision in U.S. v. Playboy Entertainment Group (2000), which echoed its earlier holding in Reno v. ACLU.  Specifically, in the Playboy case, the Court held that:

[T]argeted blocking [by parents] enables the government to support parental authority without affecting the First Amendment interests of speakers and willing listeners — listeners for whom, if the speech is unpopular or indecent, the privacy of their own homes may be the optimal place of receipt. Simply put, targeted blocking is less restrictive than banning, and the Government cannot ban speech if targeted blocking is a feasible and effective means of furthering its compelling interests.

Moreover, the Court held that:

It is no response that voluntary blocking requires a consumer to take action, or may be inconvenient, or may not go perfectly every time. A court should not assume a plausible, less restrictive alternative would be ineffective; and a court should not presume parents, given full information, will fail to act.

This is an extraordinarily high bar the Supreme Court has set for policymakers wishing to regulate modern media content.  As constitutional law scholar Geoffrey R. Stone of the University of Chicago School of Law has noted:

The bottom line, then, is that even in dealing with material that is “obscene for minors,” the government cannot directly regulate such material… Rather, it must focus on empowering parents and other adults to block out such material at their own discretion, by ensuring that content-neutral means exist that enable individuals to exclude constitutionally protected material they themselves want to exclude. Any more direct regulation of such material would unnecessarily impair the First Amendment rights of adults.

This is why parental control tools and methods are more important than ever before. The courts have largely foreclosed government censorship and placed responsibility over what enters the home squarely in the hands of parents.  But will the Supreme Court reverse this jurisprudential trend with its decision in the Schwarzenegger v. EMA decision?  I hope not.  If they do, it will undo about 15 years of really excellent case law on this front.

By Berin Szoka & Adam Thierer

Yesterday, the Progress & Freedom Foundation (PFF) and Electronic Frontier Foundation (EFF)  filed a joint amicus brief with the U.S. Supreme Court urging the Court to protect the free speech rights of videogame creators and users and asking the justices to uphold a ruling throwing out unconstitutional restrictions on violent videogames.  At issue is a California law that bans the sale or rental of “violent” videogames to anyone under the age of 18, among other regulations. While the law was passed in 2005, it has never taken effect, as courts have repeatedly ruled it unconstitutional. California appealed its loss at the Ninth Circuit Court of Appeals to the Supreme Court.  The case is Schwarzenegger vs. EMA.

This case has profound ramifications for the future of not just videogames, but all media, and the Internet as well. Although we’ve had 15 years of fairly solid Supreme Court case law on new media issues, a loss in the Schwarzenegger case could reverse that tide.  In the amicus brief, we explain how the current videogame content rating system empowers parents to make their own decisions without unconstitutionally restricting this new and evolving form of free speech.  Our brief is focused on three major arguments:

1. Parental Control Tools, Household Media Control Methods, Self-Regulation and Enforcement of Existing Laws Constitute Less Restrictive Means of Limiting Access to Objectionable Content than Government Regulation of Constitutionally Protected Speech
2. Videogame Content is Constitutionally Protected Speech Deserving Strict Scrutiny
3. The State Has Not Established a Compelling Government Interest in Restricting the Sale of Videogames to Minors

The filing can be found online here and it is embedded down below.  As always, the Media Coalition has done an outstanding job summarizing the case and listing all the major briefs filed with the Court in this matter, so check out their Schwarzenegger v. EMA page for everything you need to know about this case.  GamePolitics.com also offers excellent ongoing coverage of the case. In particular, check out briefs by:

• The Entertainment Software Association reply brief
• The Comic Book Legal Defense Fund by First Amendment legal wit Bob Corn-Revere
• The Center for Democracy & Technology, among others, focusing on the dangers of expanded age verification for the Internet, which PFF, CDT and EFF recently filed on in the FTC’s COPPA review proceeding.
• this brief by various First Amendment scholars led by Eugene Volokh
• the Media Coalition & several other groups

EFF – PFF Supreme Court Amicus Brief in SCHWARZENEGGER v EMA Video Game Case http://d1.scribdassets.com/ScribdViewer.swf

The Second Circuit just threw out the FCC’s broadcast indecency rules—which had led to heavy fines for “fleeting expletives”—as “unconstitutionally vague, creating a chilling effect that goes far beyond the fleeting expletives at issue here.” What’s ultimately most important about this decision is not what the court did, but what it said: The Constitutional framework that has allowed broadcast censorship has been rendered obsolete by the rise of the Internet and parental empowerment tools for new and old media.

In short, the court utterly rejected the Supreme Court’s 1978 Pacifica decision —which gave the FCC great discretion in regulating indecency on broadcast radio and television in order to protect children who might be in the audience during daytime and early evening hours, citing the unique “pervasiveness” and “invasiveness” of broadcasting into the home.  The court fully embraced what we’ve been saying for years—neither rationale holds true anymore:

we face a media landscape that would have been almost unrecognizable in 1978. Cable television was still in its infancy. The Internet was a project run out of the Department of Defense with several hundred users. Not only did Youtube, Facebook,and Twitter not exist, but their founders were either still in diapers or not yet conceived. In this environment, broadcast television undoubtedly possessed a “uniquely pervasive presence in thelives of all Americans.” The same cannot be said today. The past thirty years has seen an explosion of media sources, and broadcast television has become only one voice in the chorus. Cable television is almost as pervasive as broadcast….  The internet, too, has become omnipresent, offering access to everything from viral videos to feature films and, yes, even broadcast television programs…. Moreover, technological changes have given parents the ability to decide which programs they will permit their children to watch. (15-16)

Thus, the Second Circuit all but begged the Supreme Court to throw out Pacifica completely, but quickly noted that it is “bound by Supreme Court precedent, regardless of whether it reflects today’s realities” (17). Fortunately, the court was able to reach the same result on vagueness grounds. It’s worth reading this key passage to see what a consistent approach to the First Amendment would look like:

Every television, 13 inches or larger, sold in the UnitedStates since January 2000 contains a V-chip, which allows parents to block programs based on a standardized rating system. 47 U.S.C. § 303(x). Moreover, since June 11, 2009, when theUnited States made the transition to digital television, anyone using a digital converter box alsohas access to a V-chip. CSVA Report, 24 F.C.C. Rcd. 11413, at ¶ 11. In short, there now exists a way to block programs that contain indecent speech in a way that was not possible in 1978. Infact, the existence of technology that allowed for household-by-household blocking of “unwanted” cable channels was one of the principle distinctions between cable television andbroadcast media drawn by the Supreme Court in [its 2000 decision striking down cable filtering mandates, U.S. v. Playboy]. The Court explained:

The option to block reduces the likelihood, so concerning to the Court in Pacifica,that traditional First Amendment scrutiny would deprive the Government of allauthority to address this sort of problem. The corollary, of course, is that targeted blocking enables the Government to support parental authority without affectingthe First Amendment interests of speakers and willing listeners – listeners forwhom, if the speech is unpopular or indecent, the privacy of their own homes maybe the optimal place of receipt.

Playboy, 529 U.S. at 815 (internal citation omitted). We can think of no reason why thisrationale for applying strict scrutiny in the case of cable television would not apply with equalforce to broadcast television in light of the V-chip technology that is now available. (16-17).

Amen!

It’s pretty remarkable for a court to come out so strong against a longstanding precedent when they can resolve a case without doing so. Indeed, courts generally follow a strict canon of interpretation that says they should skip right to simpler issues that can resolve a case—vagueness, in this case. The fact that the Second Circuit felt it necessary to spend nearly three pages debunking Pacifica is the clearest statement yet that it’s time for us to apply the First Amendment consistently across all media.

I only hope the FCC is brash enough to appeal (knowing it might well lose the farm, to to speak), and that the Supreme Court is brave and principled enough to say what the Second Circuit has said so beautifully: There’s no justification for treating broadcasters as second class speakers. The First Amendment should apply equally across media!

I’m hoping to get some input from readers as I look to finish up an amicus brief for the forthcoming Schwarzenegger v. EMA video game case. (Respondent briefs are due in mid-Sept and the State of California just filed its brief with the Court today). You will recall that the Supreme Court accepted the case for review in April, meaning it will be the first major case regarding video game speech rights heard by our nation’s highest court. It raises questions about the First Amendment status of games and what rights minors have to buy or play “violent” video games.  One section I hope to include in the brief I’m working on deals with how other forms of media content are increasingly intertwined with video game content. In it, I explain how video games are less of a discreet category of visual entertainment than they once were. I’d welcome ideas for other examples to use relative to the ones you see below.

I begin by discussing games that were inspired by major motion pictures, such as both the recent Star Wars and Lord of the Rings movie trilogies, for example.  I also note that many games were inspired by notable books, such as the LotR games being inspired by Tolkien, and The Godfather video games that were inspired by Mario Puzo’s novel of the same name. I also make mention of The Terminator movies starring California Governor Arnold Schwarzenegger, which inspired a wide variety of video games, many of which featured his likeness.

More importantly, I highlight how many video games are now inspiring movies, music, books, and comics, including: Prince of Persia, Max Payne, Resident Evil, Tomb Raider, Doom, Final Fantasy, Halo, and Gears of War. The characters and storylines in the books, comics, and movies based on these games often closely track the video games that inspired them.  Increasingly, therefore, games are developed along parallel tracks with these other forms of content. Thus, to regulate games under the standard California proposes in this case raises the question of whether those other types of media should be regulated in a similar fashion.  Should every iteration of the original game title be regulated under the standard California has suggested if those books, comics, or movies contain violent themes?

If so, it raises profound First Amendment issues—especially for novels and comics. Moreover, to not regulate those other forms of media while regulating game content raises its own set of First Amendment issues. “[T]his type of facial underinclusiveness undermines the claim that the regulation materially advances its alleged interests,” argued the U.S. District Court for the Middle District of Louisiana in ESA v. Foti (2006). After all, what good does it do to merely regulate “a tiny fraction of the media violence to which modern American children are exposed” if all other forms of expression remain available? (See, AAMA v. Kendrick, 2001)

So, again, I’d welcome more (or better) examples to include in this short section of my brief to help me drive this point home to the Court.

I might also make mention of another type of entertainment that could be impacted by this decision and which no one else seems to be thinking about: theme park attractions. Ironically, just a few months ago, my wife and I took the kids on a vacation to Universal Studios in Orlando, Florida.  One of the attractions that my kids — ages 8 and 5 — enjoyed most was “Terminator 2: 3D.” It was their second favorite after the spectacular SpiderMan ride.

But here’s the thing about that Terminator 2 attraction at Universal Studios: it was a surprisingly intense and seriously violent experience. The show features cinematic action combined with real-life actors who run throughout the arena firing shotguns at cybernetic robots that come out of the walls or floors.  During some segments of the show, water sprays the audience, smoke fills the chamber, and the seats and floors vibrate violently as battles take place on stage and on-screen. The actor hosting the show is also choked to death by a cyborg! [see video below at 2:20 mark.]

Now, here’s what’s most interesting to me about the “Terminator 2: 3D” attraction:

1. Children are admitted without restriction to the “Terminator 2: 3D” attraction even though the depictions of “violence” they witness and physically experience are far more intense than any regular movie or video game.
2. Arnold Schwarzenegger filmed segments for the cinematic portions of the “Terminator 2: 3D” attraction.  Of course, this is the same man who would later sign the California video game bill into law and have his state squander millions of taxpayer dollars in court defending it.  All on the ground that we need to keep kids away from “violent” media.  But apparently the kiddies weren’t on his mind when he helped created the “Terminator 2: 3D” attraction!

Again, don’t get me wrong here: My kids loved the T2:3D experience, and Mom and I couldn’t be happier we took them to see it. (We loved it too!)  And, at least so far, my kids have not become murderous thugs or social degenerates from experiencing this intense show, as some in the “monkey see, monkey do” crowd imply will occur if kids see violently-themed entertainment.

Regardless, I think this begs a serious question:  If Gov. Schwarzenegger — or any other lawmaker for that matter — would regulate “violent” video games on the grounds that the experience is too intense and damaging for kids psychologically, then why not regulate theme park attractions on similar grounds?  The “Revenge of the Mummy” ride at Universal Studios (also based on a movie) serves as another example. At one point you are sent to Hell and placed in an imaginary tomb while flames shoot out the walls all around you so that you feel like you are going to be cremated alive.  You can literally feel the heat from the flames on your face.  You cannot possibly convince me that there is any video game experience as frightening as that.  But all the kids went wild!  My daughter made us ride it with her three times!  (Our 5-yr old boy couldn’t go on that one because of a height restriction, but there was no age-based or other type of restriction / warning on the ride.)

Anyway, I welcome more input here about other rides or attractions that are “violent” and that could be impacted by an adverse, anti-free speech ruling by the Supreme Court in the Schwarzenegger v. EMA case.  (I’ve also thought about discussing how many kids are in the audience at boxing, MMA, wrestling matches and other violent sports).

In my opinion, it is up to parents — not the government — to determine what games, movies, music, books, magazines, and theme park attractions that kids get to see, hear, and experience.  I can appreciate that some parents have heightened sensitives about some of these things, but they have the ability — and the responsibility — to make appropriate media determinations for their kids.  We shouldn’t expect The Terminator Arnold Schwarzenegger to be our national nanny.

The Entertainment Software Association, which represents the video game industry, has just released its latest “Essential Facts about the Computer and Video Game Industry” publication.  It’s a handy annual resource that I always look forward to reading. There are many interesting facts and figures found in the report, but here a few worth calling out from the data they have aggregated:

• 93% of the time parents are present at the time games are purchased or rented
• 64% of parents believe games are a positive part of their children’s lives
• 86% of the time children receive their parents’ permission before purchasing or renting a game
• 48% of parents play computer and video games with their children at least weekly
• 97% of parents report always or sometimes monitoring the games their children play
• 76% of parents believe that the parental controls available in all new video game consoles are useful

The survey also bolsters the findings of many other polls and reports which have found that parents employ a variety of what I have labeled “household media rules” to monitor or control their children’s media consumption:

• 83% of parents place time limits on video game playing
• 78% of parents place time limits on television viewing
• 75% of parents place time limits on Internet usage
• 66% of parents place time limits on movie viewing

Once again, these findings illustrate that parents are parenting!  Parents are playing an active role in the lives of their children, monitoring their media use, and mentoring them with the assistance of the ratings and parental control technologies / methods at their disposal.

I sure hope the Supreme Court is listening as they prepare to take up the constitutionality of laws regulating video game sales.

The Supreme Court recently announced that it will review a California law regulating the sale of violently-themed video games to minors. The case under review is Schwarzenegger v. Entertainment Merchants Association. In it, the Ninth Circuit Court of Appeals struck down a California law which prohibited the sale or rental of “violent video games” to minors. I’m inclined to agree with Julie Hilden when she notes that “it seems very unlikely that the Supreme Court took this case in order to proclaim, as the Ninth Circuit panel did, that minors do indeed have First Amendment rights — rights that extend far enough to reach ‘violent’ video games.”  I hope that we’re both wrong and that the Court took the case to instead affirm the free speech rights of game creators and users (and yes, even minors), but the justices could have just left the Ninth Circuit ruling be and that would have been settled.

Anyway, let’s think this through here. What if the Supremes took the Schwarzenegger case to overturn the Ninth Circuit and to uphold the right of state governments to regulate the sale of “violent” video game content, however that’s defined. Let’s consider such a potential holding in light of two other free speech cases handed down over the past few years.

In the 2002 case Ashcroft v. Free Speech Coalition, the Court struck down provisions of the Child Pornography Prevention Act of 1996, which had attempted to criminalize computer-generated depictions of child porn.  And just a few weeks ago, in United States v. Stevens, the Court struck down a federal law that criminalized the creation or sale of videos showing animal cruelty. The law that the Court overturned was particularly concerned with “crush videos,” which, according to the Court, “feature the torture and killing of helpless animals and are said to appeal to persons with a specific sexual fetish.”

Thus, if one assumes that the Supreme Court took the Schwarzenegger case to reverse in favor of state regulators, the justices on our highest court would essentially be saying that it’s just fine and dandy to create virtual depictions of children being raped or videos of real kittens having their heads crushed by naked women in high heels, but we’ll be damned if we let a kid buy a copy of Halo 3 !

Does that make any sense? I sure can’t find the logic in it, but perhaps someone can enlighten me.  Because, honestly, even though I am as about as hard-core of a First Amendment defender as you will find, those two other cases still make me a bit queasy and really put my free speech fanaticism to the test.  By contrast, I have a very hard time believing that junior is going to be mentally damaged for life by playing a few more levels on Ninja Gaiden Sigma 2, Batman: Arkham Asylum, or X-Men Origins: Wolverine.  Indeed, I can easily imagine a day when I would let my kids (when they are older teens) take their own money and buy one of those games themselves.  But I could never imagine a day I’d want them seeing virtual kiddie porn or kitten-crushing videos.

The Supreme Court announced today that it will review a California law regulating the sale of violently-themed video games to minors. The case is Schwarzenegger v. Entertainment Merchants and I have written about it here before. This will be the first major First Amendment case regarding video game speech rights heard by our nation’s highest court. This afternoon, I issued the following press statement about the case and its importance:

“I hope the Supreme Court is taking this case to affirm the free speech rights of game creators and users, and not to overturn ten years of solid, sensible lower court decisions granting video games the same First Amendment protections as books, film, music and other forms of entertainment. Government regulation of game content is unnecessary because parents have been empowered with sophisticated video game parental controls and a highly descriptive ratings system that is widely recognized and easy to use. Lawmakers should focus their efforts on making sure parents are better aware of existing tools and ratings instead of trying to censor game content in such a plainly unconstitutional fashion. Let’s hope the Supreme Court affirms that educational approach and Ninth Circuit’s decision at the same time.”

Several reporters have already asked me if its a bad sign that the Court took the case at all and wondered if this meant that there are 5 votes for overturning the lower court decision.  It’s impossible to read the tea leaves on things like this, but I would generally agree that it’s not a good sign.  But I just don’t understand how the Supreme Court could uphold a law like this in light of all their recent Internet jurisprudence (CDA, COPA, etc) which held against the government when various “harm to minors” statutes were tested and found to be unconstitutional.  If the Supreme Court goes the opposite direction here, it will mean that our “First Amendment jurisprudential Twilight Zone” will become even more confusing and contorted. Let’s hope that’s not the case.

By Adam Thierer & Berin Szoka Progress & Freedom Foundation Progress Snapshot No. 6.5, Feb 2010 [.pdf]

Advertising is increasingly under attack in Washington. In fact, we’re busy finishing up a paper with the working title: “The New Assault on Advertising: What it Means for the Future of Media & Culture.” Among other things, the paper inventories the many ways in which policymakers in Washington and elsewhere are stepping up regulation of commercial advertising and marketing efforts-and highlights the common themes that unite them. Unfortunately, the report is already over 50 pages long and we keep finding new threats to discuss!

This regulatory tsunami could not come at a worse time, of course, since an attack on advertising is tantamount to an attack on media itself, and media is at a critical point of technological change. As we have pointed out repeatedly, the vast majority of media and content in this country is supported by commercial advertising in one way or another-particularly in the era of “free” content and services.[1]

An Attack on Advertising Will Hurt Consumers

But there’s a more important reason to fear Washington’s new war on advertising: It will hurt consumer welfare. That’s because advertising provides important information and signals to consumers about goods and services that are competing for their attention and business—and that scarcest of all things in the modern world, consumers’ attention. Thus, advertising helps solve an otherwise intractable information problem that would otherwise go unsolved without advertising’s claims and counter-claims about competing goods and services. Indeed, truthful advertising is itself an important type of speech that communicates relevant information to the public. As Nobel laureate economist George Stigler pointed out in his now legendary 1961 article on the economics of information, advertising is “an immensely powerful instrument for the elimination of ignorance-comparable in force to the use of the book instead of the oral discourse to communicate knowledge.”[2] As leading advertising scholar John Calfee has argued, “advertising has an unsuspected power to improve consumer welfare” since it “is an efficient and sometimes irreplaceable mechanism for bringing consumers information that would otherwise languish on the sidelines.”[3] More importantly, Calfee argues:

Advertising’s promise of more and better information also generates ripple effects in the market. These include enhanced incentives to create new information and develop better products. Theoretical and empirical research has demonstrated what generations of astute observers had known intuitively, that markets with advertising are far superior to markets without advertising.[4]

In other words, advertising educates. It ensures consumers are better informed about the world around them, and not just for the good or service being advertised. Advertising also raises general awareness about new classes or categories of goods and services. It helps citizens in their capacity as consumers to become better aware of the options and their disposal and the relative merits of those choices. For example, a new survey by About.com found that “While one-third of the online buyers who were aided by ads said they helped them save money, the majority appreciated online ads for informing them about a product or service previously unknown.”[5]

If anything, these numbers understate the vital importance of advertising to consumers, since advertising is so ubiquitous in our capitalist world, it is like the air we all breathe: We rarely notice it except when it annoys or bothers us. Given how deeply ingrained our cultural bias against advertising, and how subtly advertising works to benefit consumers, it’s remarkable that so many consumers realize that advertising empowers them by increasing total awareness of the many choices available in the marketplace.

Commercial Speech Is Speech and Deserving of First Amendment Protection

For these reasons, the Supreme Court has made it clear commercial speech is deserving of First Amendment protection like other forms of speech. In a series of key decisions over the past four decades, the Court has highlighted the important role that advertising and marketing plays in facilitating the flow of information that is beneficial to society. As Calfee notes:

Constitutional protection for advertising is explicitly based upon the idea that freedom to advertise brings benefits to markets generally, especially consumers. The central argument in Supreme Court decisions overturning restrictions on advertising is that consumers can benefit from a free exchange of information- the ‘marketplace of ideas’ celebrated by authors and jurists since at least the time of John Milton.[6]

“Both the individual consumer and society in general may have strong interests in the free flow of commercial information,” the Court noted in its landmark 1976 decision in Va. Pharmacy Bd. v. Va. Consumer Council.[7] “As to the particular consumer’s interest in the free flow of commercial information, that interest may be as keen, if not keener by far, than his interest in the day’s most urgent political debate,” Justice Blackmun stressed in that decision.[8] Thus, the Court concluded:

Advertising, however tasteless and excessive it sometimes may seem, is nonetheless dissemination of information as to who is producing and selling what product, for what reason, and at what price. So long as we preserve a predominantly free enterprise economy, the allocation of our resources in large measure will be made through numerous private economic decisions. It is a matter of public interest that those decisions, in the aggregate, be intelligent and well informed. To this end, the free flow of commercial information is indispensable.[9]

The Court’s reasoning in its recent commercial speech jurisprudence, notes Media Institute scholar Richard T. Kaplar, can be summarized with the following syllogism:

Economic concerns are as important to our society are as important as political concerns. By extension, economic information is as important as political information. Political information receives full First Amendment protection. Therefore, economic information should receive full First Amendment protection.[10]

Kaplar continued: “Truthful speech about lawful products and services deserve full First Amendment protection. This is a simple proposition, but its implications for freedom of speech extend far beyond advertising.”[11]

The Benefits of Advertising Reverberate Throughout the Economy

The beneficial effects of increasing commercial speech and information clearly reverberate throughout the economy—even though the big picture is “anything but obvious to consumers.”[12] Smarter consumers make smarter choices. They search for better deals. Products and prices become more competitive as a result—even for consumers who don’t bargain-hunt. And the cycle repeats endlessly. This is particularly true for new products and services, thus for promoting technological innovation, as Nobel Prize winning Economists Kenneth Arrow and George Stigler noted in their landmark 1990 study of the benefits of advertising.[13] They point to the example of the microwave oven, introduced in 1967:

Amana [Corporation]’s initial advertising of its pioneering microwave oven provided consumers with information on how such ovens work, what they can do, etc. This created consumer demand for the product, which benefited subsequent entrants, such as Litton and Panasonic. Advertising by these later entrants was used to explain the benefits of their particular brands rather than to explain to consumers the functions of a microwave oven: Amana’s advertising had already provided general product information and helped create consumer demand for the product.[14]

This process not only brings new products to market, but also helps upstart innovators dethrone the regnant giants of industry, ensuring that competition remains dynamic and fiercely rivalrous—all to the ongoing benefit of consumers.

Conclusion

These are the stakes for consumers in the “New Assault on Advertising,” as we’ll explain in our forthcoming report. Government already plays a vital role in ensuring that advertising is truthful and not misleading. But as advertising itself evolves to keep pace with technological change, raising new concerns about privacy and the supposed manipulativeness of tailored ads, further regulation will only serve to limit the provision of beneficial information to consumers, potentially retard new product offerings and innovation, dampen price competition, and indirectly punish media operations and content creators who rely on advertising as their lifeblood.

Related PFF Publications

• Chairman Leibowitz’s Disconnect on Privacy Regulation & the Future of News, Adam Thierer & Berin Szoka, Progress Snapshot 6.1, Jan. 13, 2010.
• Privacy Trade-Offs: How Further Regulation Could Diminish Consumer Choice, Raise Prices, Quash Digital Innovation & Curtail Free Speech, Berin Szoka, Comments to the Federal Trade Commission at the Exploring Privacy Roundtable, Nov. 10, 2009.
• Regulating Online Advertising: What Will it Mean for Consumers, Culture & Journalism? Berin Szoka, Mark Adams, Howard Beales, Thomas Lenard & Jules Polonetsky, Progress on Point 16.22, Oct. 30, 2009.
• Privacy Polls v. Real-World Trade-Offs , Berin Szoka, Progress Snapshot 5.10, Oct. 8, 2009.
• Targeted Online Advertising: What’s the Harm & Where Are We Heading?, Berin Szoka & Adam Thierer, Progress on Point 16.2, Feb. 13, 2009.
• Online Advertising & User Privacy: Principles to Guide the Debate, Berin Szoka & Adam Thierer, Progress Snapshot 4.19, Sept. 2008.
• Comments of The Progress & Freedom Foundation In the Matter of Sponsorship Identification Rules and Embedded Advertising, W. Kenneth Ferree & Adam Thierer, Sept. 19, 2008.
• Freedom of Speech and Information Privacy: The Troubling Implications of a Right to Stop People from Talking About You, Eugene Volokh, Progress on Point 7.15, Oct. 2000.
• A Taxonomy of Online Security and Privacy Threats, Eric Beach & Adam Marcus, Oct. 29, 2009.

Yesterday’s Supreme Court decision in Citizens United v. FEC essentially stands for the proposition that free speech is free speech regardless of the speaker. The 5-4 majority for the Court ruled that “We find no basis for the proposition that, in the context of political speech, the Government may impose restrictions on certain disfavored speakers. Both history and logic lead us to this conclusion.” (at 25)  Echoing its early decision in Bellotti, the Court noted that “Political speech is ‘indispensable to decisionmaking in a democracy, and this is no less true because the speech comes from a corporation rather than an individual.’” (at 33) “All speakers, including individuals and the media, use money amassed from the economic marketplace to fund their speech. The First Amendment protects the resulting speech, even if it was enabled by economic transactions with persons or entities who disagree with the speaker’s ideas.” (at 35) “There is simply no support for the view that the First Amendment, as originally understood, would permit the suppression of political speech by media corporations.” (at 37)

Somehow this has proven controversial, even radical, to some.  But, as George Will correctly notes, “This was radical only because after nearly four decades of such ‘reform’ the First Amendment has come to seem radical. Which, indeed, it is. The Supreme Court on Thursday restored First Amendment protection to the core speech that it was designed to protect — political speech.”  Essentially, the decision gets Congress out of the game of picking who, or what platform, deserves full First Amendment protection when it comes to uttering political speech. And there’s nothing radical about that.

Indeed, as Justice Kennedy noted for the majority, there is nothing surprising about this reasoning once you realize that almost every other type legislative or regulatory speech restriction has been struck down as a violation of the First Amendment. “The law before us is an outright ban [on political speech], backed by criminal sanctions,” Kennedy noted (at 20).  “If the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech.” (at 33)  Think about this for a second: Criminal sanctions or jail time for political speech! How in the world did we get to the point in this nation where criminalizing political speech became acceptable to our legislators?  Ignoring the obvious answer—it’s all about protecting incumbents—what is really “radical” here is not that the Supreme Court setting us back on the right path, but that our legislative branch has veered so far off of it.

I also agree with Tim Lee and Eugene Volokh who note that corporate money has always been part of politics and it is silly to think the restrictions in play here would really do much to change things in Washington in terms of diminishing “corruption.” Frankly, if you want less corruption in government, you need to begin by shrinking the powers of government to a more sensible level.  Big government breeds corruption opportunities simply because the “return on investment” for dollars spent trying to influence politics depends on how much money politicians can control through spending and regulation.

And political advertising or “electioneering communications” in the days leading up to an election are about the last thing you should be worrying about if you really want to “clean up the system.”  You don’t strengthen democracy by stifling freedom of speech or issue advocacy. That’s the equivalent of burning the village in order to save it.

For technology policy, the most important part of the decision is probably the following passage:

Rapid changes in technology—and the creative dynamic inherent in the concept of free expression—counsel against upholding a law that restricts political speech in certain media or by certain speakers… Today, 30-second television ads may be the most effective way to convey a political message… Soon, however, it may be that Internet sources, such as blogs and social networking Web sites, will provide citizens with significant information about political candidates and issues…The First Amendment does not permit Congress to make these categorical distinctions based on the corporate identity of the speaker and the content of the political speech…[viii][viii]

As Seth Cooper correctly argues:

These passages… are clearly at odds with Red Lion Broadcasting v. FCC’s assertion sixty years ago that “differences in the characteristics of news media justify different in the First Amendment standards applied to them.”

Eugene Volokh makes much the same point. Perhaps we are finally seeing an end to America’s “First Amendment Twilight Zone” as I have called it [see this video presentation] and, with any luck, a consistent First Amendment for the Information Age.

Can the Federal Communications Commission (FCC) just do anything it wants? If it wants to bring the entire Internet under its thumb, or regulate any speech uttered over electronic media, can it just do so on a whim? The agency’s recent actions on the Net neutrality and free speech fronts seems to suggest that the agency thinks so.

I don’t need to rehash here what the FCC has been up to on the Net neutrality front.  Most everyone is familiar with how the agency has essentially been trying to invent its authority to regulate out of thin air.  If you want the whole ugly history of how this charade has unfolded over past few years, I encourage you to read these amazing comments filed today in the FCC’s net neutrality NPRM proceeding by my PFF colleague Barbara Esbin.  Barbara simply demolishes the FCC’s argument that it can do anything it wants under the guise of its “ancillary jurisdiction.” As Barbara argues in her comments, the FCC’s position “is akin to saying that the FCC can regulate if its actions are ancillary to its ancillary jurisdiction, and that is one ancillary too many.”  She notes that:

The proposed rules regulating the services and network management practices of broadband Internet providers must rest, if at all, on the Commission‘s implied or ancillary jurisdiction and the NPRM fails to provide a basis upon which the exercise of such jurisdiction can be considered lawful.

She shows how farcical it is for the FCC to concoct its supposed authority to regulate from provisions of the Communications Act that have nothing whatsoever to do with Net neutrality or even expanding regulation in general. Specifically, the agency’s reliance on sections 230(b) and 706(a) of the Telecommunications Act of 1996 is completely outlandish.  Anyone who knows a lick about telecom law and the nature of those two sections understands they were never intended to serve as the basis of an expansive new regulatory regime for the Internet. As Barbara puts it:

This exercise—searching for snippets and threads of regulatory authority over a communications medium as significant as the Internet in multiple, unrelated statutory provisions—should signal to the Commission that no credible source of authority to regulate Internet services exists.

All I have to say is, thank God for checks and balances. I believe the courts will put a stop to this nonsense, but it will take some time.  Until then, I suppose the FCC will continue to act like a rogue agency, hell-bent and tossing the constitution to the wind and concocting asinine theories about why they should be allowed to do anything they want. But there are signs that the courts are ready to start holding the FCC more accountable.

If you want some concrete proof, Exhibit A would be the recent D.C. Circuit Court of Appeals oral arguments in the Comcast v. FCC case, which involves the FCC’s assertion of Net neutrality authority from vague “principles” it laid down a few years back. The headline from Wired about the court arguments really says all you need to know: “Court to FCC: You Don’t Have Power to Enforce Net Neutrality.”  Indeed, by all accounts, things did not go well for the agency. “No decision has been made yet,” reports Tony Bradley of PC World, ” but, if Friday’s arguments… are any indication, it doesn’t appear that the FCC will prevail in exerting its authority over Comcast.”

Exhibit B would be the stunning oral arguments that the Second Circuit Court of Appeals in New York heard this week in the remand hearing of the case Fox Television v. FCC. You have to watch this video of the arguments to appreciate just how fed up some judges are with this agency.  It is like nothing else I have ever seen.  Andy Schwartzman of Media Access Project described it as “a slaughter,” and an unnamed source told John Eggerton of Broadcasting & Cable, “To say that the justices were extremely skeptical of the FCC’s application of the indecency law from a constitutional perspective in this case is an understatement.”  I’ll say.  Watch it yourself to see.

Meanwhile, as I’ve been writing here lately, the FCC is busy trying to expand or invent new authority to regulate digital media and online safety issues in its “Child Safe Viewing Act” and “Empowering Parents and Protecting Children” proceedings. The agency also recently began looking at cloud computing, forcing me to wonder, “Is the FCC Becoming the Federal Cloud Commission?”  And then there was the Commission strong-arming of Apple about the iPhone app store process. Who knows where that authority came from.  Finally, just yesterday, the FCC launched a new inquiry into privacy issues — get this — as part of its National Broadband Plan! The agency is asking for public comment about “the use of personal information and privacy in an online, broadband world.” (Someone should probably call the Federal Trade Commission and let them know that that there is a new sheriff in town!) Again, no word where the FCC’s authority to do any of this comes from.  When it comes to statutory authority, it’s an ‘anything-goes’ world over at the FCC these days. They just make it up as they go along.

Simply put, the FCC is out of control and I sincerely hope the courts rope it back in soon. If the agency wants the authority to regulate in any of these areas, it should go to Congress and ask for it.  That’s how things are suppose to work in a constitutional republic.  Until then, FCC officials should stop behaving as if they are above the law.

by Adam Thierer & Berin Szoka, Progress Snaphot 6.1

Stephanie Clifford of the  New York Times posted a very interesting article this week summarizing a recent “on-the-record chat” the Times staff had with Federal Trade Commission (FTC) chairman Jon Leibowitz and FTC Bureau of Consumer Protection chief David Vladeck.  The interview [discussed by Braden here] is profoundly important in that it reveals an alarming disconnect regarding the relationship between “privacy” regulation and the future of media, which were the subjects of their discussion with Times staff.  Namely, Leibowitz and Vladeck apparently fail to appreciate how the delicate balance between commercial advertising and journalism is at risk precisely because of the sort of regulations they apparently are ready to adopt.  Because the value of online advertising depends on data about its effectiveness and consumers’ likely interests, and because advertising is indispensable to funding media, what’s ultimately at stake here is nothing short of the future of press freedom.

The “Day of Reckoning” Is Upon Us

Leibowitz and Vladeck spend the first half of The Times interview wringing their hands about “privacy policies,” the declarations made by websites and advertising networks about their data collection and use practices (for which the FTC can and must hold them accountable).  But the two feel that privacy policies don’t adequately inform consumers.  Chairman Leibowitz claims that online companies “haven’t given consumers effective notice, so they can make effective choices.”  And Mr. Vladeck states that advise-and-consent models “depended on the fiction that people were meaningfully giving consent.” But he and the FTC seem ready to abandon the notice and choice model because the “literature is clear” that few people read privacy policies, Vladeck told the Times.  He and Leibowitz continue:

“Philosophically, we wonder if we’re moving to a post-disclosure era and what that would look like,” Mr. Vladeck said. “What’s the substitute for it?” He said the commission was still looking into the issue, but it hoped to have an answer by June or July, when it plans to publish a report on the subject. Mr. Leibowitz gave a hint as to what might be included: “I have a sense, and it’s still amorphous, that we might head toward opt-in,” Mr. Leibowitz said.

This clearly foreshadows the regulatory endgame we have long suspected was coming.  When the FTC released its “Self-Regulatory Principles for Online Behavioral Advertising” eleven months ago, we asked: “What’s the Harm & Where Are We Heading?”  Their answers to both questions have become clearer with each new calculated comment—all apparently intended to slowly “turn up the heat” on the advertising industry so that the proverbial frog will stay in the pot until the water finally boils.  Leibowitz’s FTC has simply dodged the “harm” question with a four-part strategy:

1. Cobble together a “record” full of sympathy-evoking anecdotes submitted by advocates of regulation in comments and the FTC’s ongoing “Exploring Privacy” Roundtables;
2. Let the most extreme Chicken Littles fulminate about the grand conspiracy of “neuromarketing manipulation” and the like (and sometimes even shout down FTC staff in panel discussions) in order to redefine the “reasonable center” of the debate;
3. Define-down “harm” as purely a matter of “consumer expectations” or consumers’ “dignity interests” (whatever that vague and infinitely elastic term means); and
4. Attack the effectiveness of “consent” itself by suggesting that consumers cannot be trusted to understand privacy policies or be expected to make any effort to protect their own privacy.

Conveniently, this strategy leads right back to the “day of reckoning” Chairman Leibowitz threatened was coming last February: We are heading precisely where he told us we would be—to full-on, opt-in regulation.  The writing on the wall becomes more apparent every day: Leibowitz set out to bring online advertising to heel even before becoming Chairman, and his Commission is reprising almost precisely the same approach that led to the passage of the Children’s Online Privacy Protection Act (COPPA) of 1998: building a case for new authority, dismissing industry self-regulation as ineffective, and finally presenting a report to Congress intended to produce a rapid legislative response.  After the FTC presented its report on the need for regulation in congressional testimony in June 1998, it took Congress just four months to pass COPPA—and much of that time was consumed by the summer recess.  In short, Leibowitz is mounting a carefully choreographed campaign for increased regulation.

The only real question is whether Leibowitz will somehow try to use the FTC’s existing authority over “unfair or deceptive” trade practices or wait for expanded authority from Congress.  While most observers typically assume that such expanded authority would come in the form of a privacy-specific bill—be it a broad “baseline” privacy bill or one specifically focused on online data collection for advertising purposes—the authority Leibowitz yearns for could just as easily come in the form of increased rulemaking authority as part of a broader bill that allows the FTC to preemptively regulate practices that are not deceptive but merely deemed “unfair.”

This would take the agency “ Back to the Future”—to the late 1970s, when the agency reached the height of its efforts to regulate purely on “unfairness” grounds by trying to ban advertising to children.  The agency’s behavior earned it the moniker “National Nanny” from the Washington Post, hardly a bastion of regulatory skepticism.[1] That outpouring of popular resentment caused a heavily Democratic Congress to cut-off the Democratic-led agency’s regular funding and prohibit it from regulating advertising merely on the grounds of “unfairness.”  In essence, they told the agency to “go back to its knitting” and focus on protecting consumers from demonstrated harms.^[2] Duly chastened (and actually shut down for several days), the FTC formulated a meaningful legal standard for “unfairness,” which Congress codified in 1994: for a practice to be unfair, the injury it causes must be (1) substantial, (2) without offsetting benefits, and (3) one that consumers cannot reasonably avoid.

Under this statutory standard, as FTC Commissioner Thomas Rosch has argued, the commission must carefully consider:

[the] legitimate pro-consumer and pro-competitive benefits that result from [targeted advertising]. Absent hard data weighing these benefits against the limited “invasion of privacy interests” involved, it would seem difficult to conclude that treating that practice as an actionable violation of the “unfairness” prong of Section 5 will pass muster.[3]

So Leibowitz and Vladeck either need to get serious about weighing the costs and benefits of targeted advertising—or, in the absence of such actually measuring these trade-offs, get Congress to give them the authority to regulate.  But one thing is clear from their past statements: they are in a hurry to do  something. As Vladeck told The Times last August, “There is a sense of urgency around here… Consumers, I don’t think are sufficiently protected under the current regime.”  Apparently, the case is closed in their minds.

“Left Hand, Meet Right Hand”

The second half of the  Times interview concerns the future of news. Chairman Leibowitz is not optimistic:

“There are some areas where you clearly see positive creative destruction,” Mr. Leibowitz said, giving the example of travel agents who were replaced by Orbitz and other online-booking systems. The news, he said, was not one of those. “When you’re dealing with something as critical as news is to a democracy, you need to ensure, certainly, that it’s independent, but also that it’s vibrant going forward,” he said. Areas like investigative reporting, foreign and domestic bureaus, and state-house reporting, he said, would likely falter under blog operations because of “economies of scale.”

He said he wasn’t sure what the solution was, but threw out a few ideas discussed at the conference: maybe special tax treatment for newspapers, a Corporation for Public Broadcasting-like fund, or for the newspaper industry to charge fees for the re-use of its content, similar to the model that the American Society of Composers, Authors and Publishers uses. [emphasis added]

Mr. Chairman, with all due respect, haven’t you forgotten about the solution that has powered private media for a few centuries in this country?  You know— advertising!  Indeed, what’s stunning about these comments is the complete disconnect with what Leibowitz and Vladeck said earlier in the interview.  It certainly may be the case that they said more on the subject than what The Times has reported, but given their escalating rhetoric, it seems likely that significantly increased FTC regulation is on the horizon.  And, yet, as Chairman Leibowitz marches us into this brave new world of regulating Internet media through their key funding source, he and Mr. Vladeck seem to have little appreciation of the vital role played by advertising in sustaining a truly free and vibrant press.

An Attack on Advertising Is an Attack on Media Itself

Let’s step back and revisit Media Economics 101.  Almost every serious scholar in the field acknowledges this truism: Advertising cross-subsidizes media platforms and the creation of valuable information—especially news.  “Advertising is the mother’s milk of all the mass media,”  Wall Street Journal technology columnist Walt Mossberg has noted.  Similarly, Harold L. Vogel, author of Entertainment Industry Economics, the leading text in the field, has noted, “Advertising is the key common ingredient in the tactics and strategies of all entertainment and media company business models.  Indeed, it might further be said that advertising has substantively subsidized the production and delivery of news and entertainment throughout the last century.”[4] Mossberg agrees and notes, “Without ads, most editorial products and other programming would be either unavailable or prohibitively expensive.”

The reason for the indispensability of advertising is simple: Information (including news and other forms of “content”) has “public good” characteristics that make it is very difficult (and occasionally impossible) for information-publishers to recoup their investments.  Simply put, they quite literally lack pricing power: Whatever they charge, someone else will charge less for a close substitute, inevitably leading to “free” distribution of the content, even though the content is anything but free to produce.  Advertising is the one business model that has traditionally saved the day by rewarding publishers for attracting the attention of an audience.

Which raises another under-appreciated point: Private advertising promotes press independence.  “Newspapers, magazines, radio, television, and many websites all receive their primary income from advertising,” notes William F. Arens, author of  Contemporary Advertising, another leading textbook in the field. “This facilitates freedom of the press and promotes more complete information” he concludes.[5] Why?  Because, contrary to what some critics claim, advertising and marketing help keep private media providers independent of the need for taxpayer subsidies or private patrons.  This begs an even more profound question: If not advertising, then what else?

A “Public Option” for the Press?

What’s most troubling about Chairman Leibowitz’s comments to the Times is that he has apparently found his alternative to advertising: a “public option” for the press! He mentions special tax treatment for newspapers or a new CPB-like fund (don’t we already have one?) as two possibilities.  That certainly will be music to the ears of radical, pro-regulatory activist groups like the ironically-named “Free Press,” which wants to see a massive “public works” program for the media sector.

Free Press recently filed comments with the FTC in the agency’s recent workshop, “Can Journalism Survive the Internet Age?” and proposed a far-reaching industrial policy for “saving the news.”  They call for over $50 billion in subsidies for the Corporation for Public Broadcasting and other bureaucracies, a “journalism jobs program” for that would be part of AmeriCorps, a variety of new tax incentives for struggling media operations or individuals who support favored institutions, and an assortment of government incentives to encourage local ownership and media divestiture (by handing over control to smaller operators or minority-owned groups).  Ironically, “Free Press” has also floated the concept of “a small tax on advertising” as one way to pay for a press bailout.

The organization’s founder Robert W. McChesney, the prolific neo-Marxist media scholar, penned an essay with John Nichols of The Nation last year, claiming that saving journalism essentially requires that media become an appendage of the State.  Although advertising has supported journalism as a “public good” for centuries, the only way they can conceive to provide a public good is to socialize its means of production.  Thus, journalism, like education and national defense, requires constant government oversight and support: “A moment has arrived at which we must recognize the need to invest tax dollars to create and maintain news gathering, reporting and writing with the purpose of informing all our citizens.”  They ask us to consider the $60 billion in government spending they propose as a “free press ‘infrastructure project,’” which would “keep the press system alive.”

Some in Congress seem willing to listen.  The Senate has already held hearings about the future of journalism.  And Senator Benjamin L. Cardin (D-MD) recently introduced what he has called the “Newspaper Revitalization Act,” which would allow newspapers to become nonprofit organizations in an effort to help them stay afloat.  Importantly, however, the bill would also disallow political endorsements on newspaper editorial pages—which, like campaign finance restrictions, would be a boon for incumbent politicians.  That bill should serve as fair warning to journalists about the sort of strings lawmakers will attach to press-welfare efforts going forward.  What other “golden shackles” might come with media subsidies?

To be clear, Chairman Leibowitz hasn’t called for a complete press takeover along the lines of the Free Press plan.  Yet, he hasn’t answered a key question in this debate: Who pays for news?  He appears ready to endorse a bold new regulatory scheme for the Internet and online media that, in the name of “protecting privacy” would put at risk the one traditionally successful method of supporting private media operations—advertising.  As the Pew Research Center’s Project for Excellence in Journalism noted in its latest State of the News Media report, “The problem facing American journalism is not fundamentally an audience problem or a credibility problem.  It is a revenue problem—the decoupling… of advertising from news.”  There’s probably no way policymakers can stop this process, nor should they try.  But they shouldn’t be creating new obstacles to the survival of traditional media creators, either.

Unfortunately, that’s exactly what Chairman Leibowitz’s new regulatory scheme would do.  The revenue “delta” between “smart” advertising (tailored to consumers’ likely interests and measured for effectiveness in producing clicks, purchases, etc.) and “dumb advertising” (based purely on surrounding keywords or demographics of users presumed to visit the site) is difficult to measure but potentially enormous—even 10 times as great for some sites.[6] The difference between opt-in and opt-out could be nearly as dramatic, because it’s difficult to get consumers to opt-in for anything, especially for small players—which means that opt-in regulation could, perversely, force consolidation in the online advertising and content markets.  If the FTC cares about its statutory responsibility to safeguard competition, they should take this dynamic seriously and be hyper-cautious about heavy-handed mandates that could derail smarter advertising.

Finally, to be fair, in his interview, the Chairman also suggests the newspaper industry might want to find new way “to charge fees for the re-use of its content.”  We’re certainly not opposed to the notion and think that, if it could somehow be made to work (especially by removing antitrust obstacles), it could part of a diverse revenue mix for digital journalism.  But, there’s the rub.  Micropayments inevitably face the problem of “mental transaction costs”  that likely swamp the perceived value of most content and, like pay-walls, have generally worked only in media environments characterized by a scarcity of providers and a uniqueness of a sufficiently valuable product.  These cold, hard economic realities are why advertising remains indispensable.

The Principled Alternative to Regulation

Convinced that privacy policies simply don’t work, Leibowitz and Vladeck are asking what a “post-disclosure era” would look like.  We appreciate the continued sensitivities expressed by certain groups and individuals about online privacy and data use more generally.  But there is another way forward.  We have proposed the following “5-E” layered approach to concerns about online privacy, focusing on restraining government access to data as a clear harm, rather than crippling the private sector uses of data that directly benefit consumers:

1. Erect a higher “Wall of Separation between Web and State” by increasing Americans’ protection from government access to their personal data—thus bringing the Fourth Amendment into the Digital Age.
2. Educate users about privacy risks and data management in general as well as specific practices and policies for safer computing.
3. Empower users to implement their privacy preferences in specific contexts as easily as possible.
4. Enhance self-regulation by industry sectors and companies to integrate with user education and empowerment.
5. Enforce existing laws against unfair and deceptive trade practices as well as state privacy tort laws.

Such a layered approach would not only be a “less restrictive” alternative to top-down, one-size-fits-all government regulation, but also potentially more effective in key respects than government data use/collection mandates.  In an ideal world, adults would be fully empowered to tailor privacy decisions, like speech decisions, to their own values and preferences (“household standards”).  Consumers would have (1) the information necessary to make informed decisions and (2) the tools and methods necessary to act upon that information. Importantly, those tools and methods would give them the ability to block the things they don’t like—annoying ads or the collection of data about them, as well as objectionable content—while also helping them find the information and content they desire.

But of course, the devil’s in the details.  Leibowitz and Vladeck would set the bar so high as to what constitutes “effective” consumer choice that current privacy policies necessarily fail their test—if only because most users don’t care enough to make the “right” privacy choices.  Privacy policies, even if read by relatively few consumers, nonetheless allow privacy advocates, journalists and watchdog-bloggers to scrutinize what companies say they’re doing—promises to which the FTC should hold companies stringently.  That’s clearly not good enough for Leibowitz and Vladeck, who want to give up on “notice and choice” and move on to “opt-in” mandates.  But why not first try to make “notice” more effective?  The advertising industry is currently developing standardized interfaces that could communicate key information about privacy practices in a single icon, label or other easily-digested “consumer touch point.”

More radically, why focus on tinkering with consumer interfaces, when standardized data disclosure formats like the Protocol for Privacy Preferences (P3P) could distill legalistic privacy policies into “machine-readable” code?  Such disclosures could provide a powerful form of “notice” that the ordinary consumer could “use”: simply setting their own privacy preferences in a browser tool that automatically implements those preferences by blocking tracking that users object to.  Such a privacy disclosure format could also allow the FTC to automate enforcement of its existing authority to punish unfair or deceptive trade practices.

Conclusion

And so we return to the question the FTC asked in its recent workshop, “Can Journalism Survive the Internet Age?”  Answer: Not if the FTC kills the golden goose that lays the golden eggs through onerous advertising regulations and data controls in the name of “privacy.”  Chairman Leibowitz and Bureau Chief Vladeck shouldn’t foreclose the possibility that advertising can play a central role in the future of a free press in the Digital Age—just as it has done historically in the United States.  Indeed, they would be wise to remember that advertising has always been with us.  As the Supreme Court noted in its 1996 decision, 44 Liquormart, Inc. v. Rhode Island.

Advertising has been a part of our culture throughout our history. Even in colonial days, the public relied on “commercial speech” for vital information about the market. Early newspapers displayed advertisements for goods and services on their front pages, and town criers called out prices in public squares. Indeed, commercial messages played such a central role in public life prior to the founding that Benjamin Franklin authored his early defense of a free press in support of his decision to print, of all things, an advertisement for voyages to Barbados.[7]

Of course, for advertising to continue to play the role as sustainer of the press, it must be allowed to evolve.  Media operators—large and small alike—must be allowed to craft new strategies, some of which may require data collection and marketing practices that will make some privacy-sensitive users uncomfortable, but will also ensure that the goose keeps on laying golden eggs for them and everyone else.

While Chairman Leibowitz may decry the creative destruction at work in the news sector and information industries today, that shakeup will continue and, no doubt, be painful for incumbent players.  Advertising alone may not “save the day” for media as it has in the past, but it will likely remain essential to sustaining private media platforms and providers going forward— if federal policymakers allow it.  The alternative—massive government intervention into the news and media sectors—is too horrifying to think about.

[1] Washington Post, March 1, 1978.

[2] Congress terminated the FTC’s efforts to prohibit advertising to children, and barred the agency from issuing any advertising regulation predicated solely on unfairness for three years.  FTC Improvements Act, Pub. L. No. 96-252, § 11 (May 1980).  See generally J. Howard Beales, Director of the Bureau of Consumer Protection, Federal Trade Commission, The FTC’s Use of Unfairness Authority: Its Rise, Fall, and Resurrection, www.ftc.gov/speeches/beales/unfair0603.shtm.

[3] Thomas Rosch, Some Reflections on the Future of the Internet: Net Neutrality, Online Behavioral Advertising, and Health Information Technology, Remarks at U.S. Chamber of Commerce Telecommunications & E-Commerce Committee Fall Meeting, October 26, 2009, 13, www.ftc.gov/speeches/rosch/091026chamber.pdf.

[4] Harold L. Vogel, Entertainment Industry Economics (Cambridge, MA: Cambridge University Press, 7th Edition, 2007), at 46.

[5] William F. Arens, Contemporary Advertising (McGraw-Hill Irwin, 10^th Ed., 2006) at 50.

[6] See Berin Szoka & Mark Adams, The Benefits of Online Advertising & Costs of Privacy Regulation, PFF Working Paper, Nov. 8, 2009, www.scribd.com/doc/22445754/Benefits-of-Online-Advertising-Paper.

[7] 517 U.S. 484, 495 (1996), http://www.law.cornell.edu/supct/html/94-1140.ZO.html

______________________________

Related PFF Publications

• Privacy Trade-Offs: How Further Regulation Could Diminish Consumer Choice, Raise Prices, Quash Digital Innovation & Curtail Free Speech, Berin Szoka, Comments to the Federal Trade Commission “Exploring Privacy” Roundtable, November 10, 2009.
• Online Advertising & User Privacy: Principles to Guide the Debate, Berin Szoka & Adam Thierer, Progress Snapshot 4.19, Sept. 2008.
• Targeted Online Advertising: What’s the Harm & Where Are We Heading?, Berin Szoka & Adam Thierer, Progress on Point 16.2, April 2009.
• Privacy Polls v. Real-World Trade-Offs, Berin Szoka, Progress Snapshot 5.10, Oct. 2009.
• The Benefits of Online Advertising & Costs of Privacy Regulation, Berin Szoka & Mark Adams, PFF Working Paper, Nov. 8, 2009.
• Benefits of Online Advertising, Berin Szoka, Mark Adams, Howard Beales, Thomas Lenard & Jules Polonetsky, PFF Capitol Briefing, July 2009.
• Public Option for Press Should Get the Red Pen, Adam Thierer, The Daily Caller, Jan. 12, 2010.

As I noted here a few days ago, the Federal Communications Commission held a workshop on Tuesday about “Speech, Democratic Engagement, and the Open Internet.”  It was a shockingly one-sided affair with the deck being stacked almost entirely in favor of advocates of Net neutrality regulation. Worse yet, those advocates shamelessly made up spooky stories about a future of “private censorship” that could only be remedied by using the First Amendment as a club to beat private players into submission. The token opposition at this Chicken Little circus was Robert Corn-Revere, a Partner at the law firm of Davis Wright Tremaine LLP in Washington, D.C.   Bob set the record straight–both in terms of baseless accusations that were flying that day as well as the revisionist histories of the First Amendment that were being put forward. I’m happy to report that Bob allowed PFF to reprint his remarks as a new white paper entitled, “The First Amendment, the Internet & Net Neutrality: Be Careful What You Wish For.”

In his essay, Corn-Revere discusses the relationship between the First Amendment and regulatory policy, particularly the treatment of new communications technologies, and he warns that government regulation of broadband networks could “provide the vehicle for advancing new First Amendment theories for media regulation” and online speech and expression more generally.  “It should not be forgotten,” he argues, “that the federal government’s initial impulse was to censor the Internet and to subject it to a far lower level of First Amendment protection. It pursued this agenda for more than a decade but was blocked by a series of First Amendment rulings.”  The Communications Decency Act and the Child Online Protection Act are just two notable examples. Luckily, the courts determined that “the open Internet would be at great risk if the government is allowed to exercise such power,” he notes, and they struck down such laws.

But we must be vigilant in defending our free speech rights, Corn-Revere warns. He notes that, “the constitutional ramifications of the network neutrality debate extend far beyond the question of whether the FCC should or should not adopt a given set of rules. On a doctrinal level the question is whether technological convergence should also lead to regulatory convergence, where the least common denominator of First Amendment protection becomes the governing rule.”

“The First Amendment, the Internet & Net Neutrality: Be Careful What You Wish For” is available on the PFF website and can also be viewed down below in a Scribd document reader. I want to also recommend that everyone take a look at the brief remarks that FCC Commissioner Robert McDowell delivered at the opening of that FCC event that Corn-Revere spoke at. “Efforts to advance ‘First Amendment values’ through additional government regulation risks turning over two hundred years of First Amendment jurisprudence on its head,” McDowell rightly argued. And that’s also consistent with the outstanding address delivered last week by Kyle McSlarrow, President & CEO of the National Cable & Telecommunications Association, on the same issue, in which he correctly noted that, “the First Amendment is framed as a shield for citizens, not a sword for government.” “By its plain terms and history, the First Amendment is a limitation on government power, not an empowerment of government,” McSlarrow said.

Thank God a few people in this town are still taking a stand for the real First Amendment.

Robert Corn-Revere Remarks at FCC Workshop on Speech and Democracy http://d1.scribdassets.com/ScribdViewer.swf?document_id=24208240&access_key=key-2h2o9rho7g9qr414utqi&page=1&version=1&viewMode=list

Rep. Bart Stupak, (D-MI) recently introduced the ‘‘Online Age Verification and Child Safety Act’’ (H.R. 4059), which would require mandatory online age verification for “any pornographic website accessible by any computer located within the United States to display any pornographic material, including free content that may be available prior to the purchase of a subscription or product.”  The measure does not specify how such verification is to be administered, saying only that “any website or online service” must “establish and maintain a system of internal policies, procedures and controls to ensure that no such material is displayed to any user attempting to access their site without first verifying that the user is 18 years or older.”

In essence, the Stupak bill is the “Son of COPA,” or the Child Online Protection Act of 1998, a law that has been constitutionally tested and come up short during an epic, decade-long legal battle in which it was made clear that mandatory age verification is unwise, unworkable, and unconstitutional under the First Amendment.

COPA sought to make it a crime for someone to “knowingly” place materials online that were “harmful to minors.” The law provided an affirmative defense from prosecution, however, to those parties who made a “good faith” effort to “restrict[ ] access by minors to material that is harmful to minors” using credit cards or age verification schemes. COPA was immediately challenge, however, and a 10-year court battle ensued.  The law was blocked by lower courts because it was too sweeping in effect and because courts held that there were other “less restrictive means” that parents could use to deal with objectionable content — such as Internet filters.

COPA’s decade-long legal battle finally concluded in January 2009 when the U.S. Supreme Court refused to revisit the law.  COPA had already been reviewed by the Supreme Court twice before — in 2002 and 2004.  Thus, a third visit to the Supreme Court by COPA would have been something of a historical development in the world of First Amendment jurisprudence. But with the Supreme Court’s rejection of the government’s appeal in January, lower court rulings stood and COPA remained unconstitutional and unenforceable. The key recent legal battle occurred in the Third Circuit Court of Appeals, which upheld a lower court ruling striking down COPA. The Third Circuit’s full decision is here. And I penned a 3-part series on the lower court ruling by Judge Lowell Reed Jr., senior judge of the U.S. District Court for the Eastern District of Pennsylvania, here, here, and here. Also make sure to check out this summary of COPA’s legal journey that Alex Harris penned last November.

Many, many times here before I have documented my serious ongoing reservations about mandatory age verification.  [In particular, see this lengthy white paper and this event transcript for all the details.]  Moreover, as I pointed out in a recent PFF white paper (“Five Online Safety Task Forces Agree: Education, Empowerment & Self-Regulation Are the Answer“), every major online safety task force that has studied the possibility of mandatory age verification for the Internet has come to the same conclusion: It won’t work, it’s unconstitutional, and it raises serious privacy concerns. Down below the fold I have pulled some of the relevant language from the five online safety task forces that have met since 2000 and considered this issue.  Some of the very best minds in academia, industry, government, and the child safety community sat on these task forces.  And, taken together, these five task forces heard from hundreds of experts and produced thousands of pages of testimony and reports on a wide variety of issues related to online child safety.

I would hope that Mr. Stupak and other lawmakers would heed the warnings about mandatory age verification that these task forces issued.  Read on for brief look at what the experts had to say. And as you do, remember that every dollar spent litigating another misguided attempt to mandate online age verification is another dollar that could be spent on education and empowerment solutions or other law enforcement strategies, all of which could be put in place immediately to make our kids safer online.

2000 – Commission on Online Child Protection (“COPA Commission”)

[Age verification] imposes moderate costs on users, who must get an I.D. It imposes high costs on content sources that must install systems and might pay to verify I.D.s. The adverse effect on privacy could be high. It may be lower than for credit card verification if I.D.s are separated from personally-identifiable information. Uncertainty about the application of a harmful to minors standard increases the costs incurred by harmful to minors sites in connection with such systems.  An adverse impact on First Amendment values arises from the costs imposed on content providers, and because requiring identification has a chilling effect on access. Central collection of credit card numbers coupled with the “embarrassment effect” of reporting fraud and the risk that a market for I.D.s would be created may have adverse effect on law enforcement.[1]

2002 – Youth, Pornography, and the Internet (“Thornburgh Commission”)

In an online environment, age verification is much more difficult because a pervasive nationally available infrastructure for this purpose is not available. […] Note that each of these [age verification] methods imposes a cost in convenience of use, and the magnitude of this cost rises as the confidence in age verification increases.[2]

2008 – Safer Children in a Digital World (“Byron Review”)

[N]o existing approach to age verification is without its limitations, so it is important that we do not fixate on age verification as a potential ‘silver bullet’.[3]

2009 – Internet Safety Technical Task Force (ISTTF)

Age verification and identity authentication technologies are appealing in concept but challenged in terms of effectiveness.  Any system that relies on remote verification of information has potential for inaccuracies.  For example, on the user side, it is never certain that the person attempting to verify an identity is using their own actual identity or someone else’s.  Any system that relies on public records has a better likelihood of accurately verifying an adult than a minor due to extant records.  Any system that focuses on third-party in-person verification would require significant political backing and social acceptance.  Additionally, any central repository of this type of personal information would raise significant privacy concerns and security issues.[4]

2009 – “Point Smart. Click Safe.” Blue Ribbon Working Group

The task force acknowledges that the issues of identity authentication and age verification remain substantial challenges for the Internet community due to a variety of concerns including privacy, accuracy, and the need for better technology in these areas.[5]

[2] Computer Science and Telecommunications Board, National Research Council, Youth, Pornography and the Internet (Washington, DC: National Academy Press, 2002), at 63-4, www.nap.edu/html/youth_internet/

[3] Safer Children in a Digital World: The Report of the Byron Review, March 27, 2008, at 99.  www.dcsf.gov.uk/byronreview

[4] Internet Safety Technical Task Force, Enhancing Child Safety & Online Technologies: Final Report of the Internet Safety Technical Task Force to the Multi-State Working Group on Social Networking of State Attorneys General of the United States, Dec. 31, 2008, at 10, http://cyber.law.harvard.edu/pubrelease/isttf.

[5] www.pointsmartclicksafe.org/report

[NOTE: Follow H.R. 4059 and comment on it over at Washington Watch.]

ATTACHMENT: Final Statement of Adam D. Thierer on Age Verification to the Internet Safety Technical Task Force

ISTTF Thierer Closing Statement http://d1.scribdassets.com/ScribdViewer.swf?document_id=10275410&access_key=key-2arwch33v27rw4obom5&page=1&version=1&viewMode=list

On July 27th, The Progress & Freedom Foundation hosted a Capitol Hill panel discussion entitled “Online Child Safety, Privacy, and Free Speech: An Overview of Challenges in Congress & the States.” The event featured remarks from:

• Parry Aftab, Executive Director, WiredSafety.org
• Todd Haiken, Senior Manager of Policy, Common Sense Media
• Jim Halpert, Partner, DLA Piper
• Berin Szoka, Senior Fellow, The Progress & Freedom Foundation

We’ve just released the transcript of the event, which I have also pasted down below the fold in a Scribd document reader. Also, the audio for this event can be heard by clicking below:

Download mp3

Here is the full event description:

Online child safety, privacy, and free speech remain hotly debated issues at both the federal and state level. Bills introduced in Congress to address cyberbullying concerns propose either educational initiatives or a criminalization approach. Access to objectionable content also remains a concern and a new, government-mandated task force is looking into those issues. Meanwhile, state officials, including many state attorneys general, continue to explore age verification mandates for social networking sites and some have considered building on the federal Children’s Online Privacy Protection Act (COPPA) to expand “parental notification” mandates. The Federal Trade Commission (FTC) has recently announced an expedited review of COPPA to see if it is keeping up with new developments. The FTC is also exploring child safety in virtual worlds. New concerns about “sexting,” or the sending of sexual explicit images over mobile devices, has also raised new concerns led some lawmakers to ponder penalties.

How serious are these concerns? Is legislation or regulation needed to address them? What free speech issues are at stake? Should Congress take the lead or leave it to the States to experiment with different models? These and other issues were discussed by a panel of leading experts in the field of online safety and privacy policy.

Transcript PFF Online Child Safety Privacy Hill Event (7-27-2009) http://d.scribd.com/ScribdViewer.swf?document_id=18756666&access_key=key-1blb7az1ag406howibuk&page=1&version=1&viewMode=

Adam Thierer & I have just released a detailed examination (PDF) of brewing efforts to expand the Children’s Online Privacy Protection Act of 1998 to cover adolescents and potentially all social networking sites—an approach we call “COPPA 2.0.”

As Adam explained on Larry Magid’s CNET podcast, COPPA mandates certain online privacy protections for children under 13, most importantly that websites obtain the “verifiable consent” of a child’s parent before collecting personal information about that child or giving that child access to interactive functionality that might allow the child to share their personal information with others. The law was intended primarily to “enhance parental involvement in a child’s online activities” as a means of protecting the online privacy and safety of children.

Yet advocates of expanding COPPA—or “COPPA 2.0″—see COPPA’s verifiable parental consent framework as a means for imposing broad regulatory mandates in the name of online child safety and concerns about social networking, cyber-harassment, etc. Two COPPA 2.0 bills are currently pending in New Jersey and Illinois. The accelerated review of COPPA to be conducted by the FTC next year (five years ahead of schedule) is likely to bring to Washington serious talk of expanding COPPA—even though Congress clearly rejected covering adolescents age 13-16 when COPPA was first proposed back in 1998.

We’ll discuss some of the key points of our paper in a series of blog posts, but here are the top nine reasons for rejecting COPPA 2.0, in that such an approach would:

• Burden the free speech rights of adults by imposing age verification mandates on many sites used by adults, thus restricting anonymous speech and essentially converging—in terms of practical consequences—with the unconstitutional Children’s Online Protection Act (COPA), another 1998 law sometimes confused with COPPA;
• Burden the free speech rights of adolescents to speak freely on—or gather information from—legal and socially beneficial websites;
• Hamper routine and socially beneficial communication between adolescents and adults;
• Reduce, rather than enhance, the privacy of adolescents, parents and other adults because of the massive volume of personal information that would have to be collected about users for authentication purposes (likely including credit card data);

• Would likely be the subject of massive fraud or evasion since it is not always possible to definitively verify the parent-child relationship, or because the system could be “gamed” in other ways by determined adolescents;
• Do nothing to prevent offshore sites and services from operating outside these rules;
• Present major practical challenges for law enforcement officials in the face of such evasion by both domestic users and offshore sites;
• Could destroy opportunities for new or smaller website operators to break into the market and offer competing services and innovations, thus contributing to consolidation of online content and services by erecting barriers to entry; and
• Violate the Commerce Clause of the U.S. Constitution, since Internet activity clearly represents interstate commerce that states have no authority to regulate.

California has asked the Supreme Court to review a Ninth Circuit Court of Appeals decision holding that a California video game statute was unconstitutional.  [Game Politics.com has complete coverage, and there’s more over at Ars and USA Today’s Game Hunters blog.]

Brief background: In late February, the Ninth Circuit upheld an August 2007 ruling by a California district court decision in the case of Video Software Dealers Association v. Schwarzenegger [decision here], which struck down a California law, passed in October 2005 (A.B.1179), which would have blocked the sale of “violent” video games to those under 18 and required labels on all games. Offending retailers could have been fined for failure to comply with the law.  After being challenged by the Video Software Dealers Association and the Entertainment Software Association and, the district court blocked the law arguing that it violated both the First and Fourteenth Amendments to the federal Constitution.

California’s decision to appeal the law up to the Supreme Court [petition is here] sets up a potential historic First Amendment decision (if they Court agrees to take the case, that is).  California is asking the Court to consider two questions:

1. Does the First Amendment bar a state from restricting the sale of violent video games to minors?

2. If the First Amendment applies to violent video games that are sold to minors, and the standard of review is strict scrutiny, under Turner Broadcasting System, Inc. v. F.C.C., 512 U.S. 622, 666 (1994), is the state required to demonstrate a direct causal link between violent video games and physical and psychological harm to minors before the state can prohibit the sale of the games to minors?

California is essentially asking the Supreme Court to engage in a constitutional revolution and upset a century’s worth of First Amendment jurisprudence.

The State wants the Court to equate violent media content with sexual content, which in certain limited cases can be regulated if deemed “obscene” or “harmful to minors” (“HTM”).   If you thought that business was messy and hopelessly arbitrary, just wait till we let the Federal Communications Commission or state regulators open this new Pandora’s Box of content regulation and go after “excessively violent” content.

I’ve sorted through some of those thorny issues before (1, 2, 3, 4, 5, 6) and there’s just no getting around the fact that it is remarkably difficult to come up with any sort of workable test for what counts as “excessively violent” media content.  And that may be one of the reasons that the courts have historically steered clear of bringing violent content under the HTM standard. As EFF noted in a filing to the FCC this week:

speech can only acquire HTM status as a result of sexual content. Courts have repeatedly held that nonsexual depictions of violence are not covered by the HTM doctrine and are just as constitutionally protected for minors (against state action) as they are for adults. A series of court decisions, for example, has repeatedly invalidated state attempts to regulate minors’ access to violent video games.

I’m not an expert at reading legal tea leaves, but I really would be shocked if the Supreme Court took this case because I doubt they are eager to “unsettle” this relatively settled body of law and bring about a First Amendment revolution in the process.

The full text of the California appeal follows below.

Calif Appeal of VDSA Case to Supreme Court http://d.scribd.com/ScribdViewer.swf?document_id=15694645&access_key=key-1kpkxx35dnffdodp2g81&page=1&version=1&viewMode=

I’ve been blathering on about this week’s big Supreme Court decision in FCC v. Fox, [See Parts 1, 2, 3, 4, 5], so I thought I would just wrap this series of essays up with a collection of other articles and views on the decision in case readers are looking for alternative perspectives:

Mainstream Media Stories

• Associated Press
• Reuters
• New York Times (+ more analysis)
• Washington Post
• Wall Street Journal
• Legal Times
• TV Week
• Variety
• Kansas City Star
• USA Today
• Ars Technica

Conservative, Religious, & “Family” Groups

• Parents Television Council
• Common Sense Media
• Concerned Women for America
• Town Hall.com

Free Speech Advocates or Other Views

• The SCOTUS Blog
• Free Expression Policy Project (Marjorie Heins)
• ACLU
• Media Access Project (Andy Schwartzman)
• Center for Creative Voices in Media (Jonathan Rintels)
• First Amendment Center (David Hudson)
• Free State Foundation (Randy May)
• Michael Dorf
• Marc Randazza
• Reason’s Hit and Run
• Volokh Conspiracy (Eugene Volokh)
• TechDirt

I’ve been commenting on yesterday’s Supreme Court decision in FCC v. Fox, and criticizing the logic of the majority’s decision the case, which was driven solely by procedural / admin law considerations. [See Part 3.]  I also discussed Justice Thomas’s very interesting concurring opinion, which took a serious look at the constitutional issues in play here and signaled his willingness to potentially overturn Red Lion and Pacifica. [See Part 4.]  In this fifth installment, I will briefly outline some of the dissenting arguments.

Justice Stephen Breyer penned a lengthy dissent and was joined by Justices Stevens, Souter and Ginsburg.  Like the Scalia majority decision, the Breyer dissent also focused on the procedural / APA-related issues at stake in the case.  Breyer, however, was not buying the FCC’s assertion that it had adequately justified its significant expansion of indecency enforcement in recent years.  Whereas the majority deferred to the agency and found “no basis in the Act or this Court’s opinions for a requirement that all agency change be subjected to more searching review,” the four dissenting justices saw things quite differently.  Breyer noted that while the “law grants those in charge of independent administrative agencies broad authority to determine relevant policy,” it “does not permit them to make policy choices for purely political reasons nor to rest them primarily upon unexplained policy preferences.”  He goes on to appropriately note that:

Federal Communications Commissioners have fixed terms of office; they are not directly responsible to the voters; and they enjoy an independence expressly designed to insulate them, to a degree, from “‘the exercise of political oversight.’” [citations omitted] That insulation helps to secure important governmental objectives, such as the constitutionally related objective of maintaining broadcast regulation that does not bend too readily before the political winds. But that agency’s comparative freedom from ballot-box control makes it all the more important that courts review its decision making to assure compliance with applicable provisions of the law — including law requiring that major policy decisions be based upon articulable reasons.

Breyer goes on to restate much of what is already clear from the APA and all that surrounds it. “[A]n agency must act consistently. The agency must follow its own rules,” he notes.  Moreover: 

“The law has also recognized that it is not so much a particular set of substantive commands but rather it is a process, a process of learning through reasoned argument, that is the antithesis of the “arbitrary.” This means agencies must follow a “logical and rational” decisionmaking “process.”

Finally, while admitting that agencies have generally been granted “generous leeway” to establish new policies, “this leeway is not absolute,” Breyer notes.  Breyer then finds that the FCC did not measure up to these standards when crafting and announcing changes to its indecency enforcement policies.  I will spare you all the details which you can read for yourself, but I think Breyer makes a very solid case that that the agency over-stepped its bounds and acted in a way that was “arbitrary, capricious, [and] an abuse of discretion.”  Alas, Breyer could not find one more vote to make that the majority holding in this case.

Incidentally, in separate dissents, Justices Ginsburg and Stevens had some feisty things to say about the FCC’s actions and the majority decision.  Justice Ginsburg appropriately noted that “there is no way to hide the long shadow the First Amendment casts over what the Commission has done. Today’s decision does nothing to diminish that shadow.”  On the question of the continuing wisdom of the Pacifica decision, which Justice Thomas hinted he was ready to revisit and potentially overturn, Justice Ginsburg had this to say:

The Pacifica decision, however it might fare on reassessment, was tightly cabined, and for good reason. In dissent, Justice Brennan observed that the Government should take care before enjoining the broadcast of words or expressions spoken by many “in our land of cultural pluralism.” 438 U. S., at 775.  That comment, fitting in the 1970’s, is even more potent today.  If the reserved constitutional question reaches this Court, see ante, at 26 (majority opinion), we should be mindful that words unpalatable to some may be “commonplace” for others, “the stuff of everyday conversations.” 438 U. S., at 776 (Brennan, J., dissenting).

What a strange world we live in when Justices Ginsburg and Thomas are jointly leading a First Amendment revolution!

Finally, in his separate dissent, Justice Stevens argued that, “The FCC’s shifting and impermissibly vague indecency policy only imperils these broadcasters and muddles the regulatory landscape. It therefore makes eminent sense to require the Commission to justify why its prior policy is no longer sound before allowing it to change course.”  He goes on to discuss semantic issues and the dangers of allowing the government to regulate speech and determine the context in which it is appropriate and when it is not.  It makes for some very entertaining reading that you just don’t see every day in a Supreme Court decision.  He states:

There is a critical distinction between the use of an expletive to describe a sexual or excretory function and the use of such a word for an entirely different purpose, such as to express an emotion. One rests at the core of indecency; the other stands miles apart. As any golfer who has watched his partner shank a short approach knows, it would be absurd to accept the suggestion that the resultant four-letter word uttered on the golf course describes sex or excrement and is therefore indecent. But that is the absurdity the FCC has embraced in its new approach to indecency.

Having spent many frustrating hours on the links attempting to master the (inappropriately-named) “gentleman’s game,” I can vouch for the level of vulgarity uttered during seemingly all moments of play, and I certainly can’t remember anyone thinking that sexual or excretory functions where the subject of discussion.  Anyway, Justice Stevens goes on to conclude that:

Even if the words that concern the Court in this case sometimes retain their sexual or excretory meaning, there are surely countless instances in which they are used in a manner unrelated to their origin. These words may not be polite, but that does not mean they are necessarily “indecent” under §1464.  By improperly equating the two, the Commission has adopted an interpretation of “indecency” that bears no resemblance to what Pacifica contemplated. Most distressingly, the Commission appears to be entirely unaware of this fact, see Remand Order, 21 FCC Rcd., at 13308 (erroneously referencing Pacifica in support of its new policy), and today’s majority seems untroubled by this significant oversight. Because the FCC has failed to demonstrate an awareness that it has ventured far beyond Pacifica’s reading of §1464, its policy choice must be declared arbitrary and set aside as unlawful.

Again, regrettably, this logic did not carry the day.

With today’s historic Supreme Court decision in FCC v. Fox, I have been commenting on the logic and implications of the decision. Part 3 dealt with the majority’s decision in the case, which was driven solely by procedural / admin law considerations.  This installment will discuss the very interesting concurring opinion penned by Justice Thomas, which is the only one that takes a serious look at the constitutional foundations of the FCC’s current regulatory regime.  While I was sad to see Justice Thomas join the majority’s decision upholding the FCC’s radical expansion of speech regulation in recent years, he joined that majority only on straightforward procedural grounds.   On the underlying constitutional issues at stake here, it is clear from his concurring statement that he is ready for the Court to hear a challenge to the previous court precedents and traditional regulatory doctrines that have long supported FCC speech and media controls.

“I write separately,” Justice Thomas says “to note the questionable viability of the two precedents that support the FCC’s assertion of constitutional authority to regulate the programming at issue in this case.”  Specifically, he addresses the two key cases upon which almost all FCC speech regulation rests: Red Lion Broadcasting Co. v. FCC, 395 U. S. 367 (1969) and FCC v. Pacifica Foundation, 438 U. S. 726 (1978). Thomas continues: “Red Lion and Pacifica were unconvincing when they were issued, and the passage of time has only increased doubt regarding their continued validity.”

BOOM!  With those words, Justice Thomas has dropped the hammer and taken what will hopefully be the first swing at toppling the house of cards that is modern FCC speech regulation.  Justice Thomas goes on to itemize the many problems with what I have referred to as “America’s Jurisprudential Twilight Zone” when it comes to how we apply the First Amendment to media platforms in this country.  He states:

This deep intrusion into the First Amendment rights of broadcasters, which the Court has justified based only on the nature of the medium, is problematic on two levels. […]  First, instead of looking to first principles to evaluate the constitutional question, the Court relied on a set of transitory facts, e.g., the ‘scarcity of radio frequencies’… to determine the applicable First Amendment standard. But the original meaning of the Constitution cannot turn on modern necessity…  Second, even if this Court’s disfavored treatment of broadcasters under the First Amendment could have been justified at the time of Red Lion and Pacifica, dramatic technological advances have eviscerated the factual assumptions underlying those decisions. […]

Moreover, traditional broadcast television and radio are no longer the ‘uniquely pervasive’ media forms they once were. For most consumers, traditional broadcast media programming is now bundled with cable or satellite services. Broadcast and other video programming is also widely available over the Internet. And like radio and television broadcasts, Internet access is now often freely available over the airwaves and can be accessed by portable computer, cell phones, and other wireless devices.

Indeed, along with my friends as the Center for Democracy & Technology, I documented these trends in an amicus brief to the Supreme Court in this case and pointed out that, at some point, these facts must impact the constitutional equation when it comes to the way the FCC continues to regulate broadcast programming uniquely.  Justice Thomas appears to agree:

The extant facts that drove this Court to subject broadcasters to unique disfavor under the First Amendment simply do not exist today. […] These dramatic changes in factual circumstances might well support a departure from precedent under the prevailing approach to stare decisis. […] For all these reasons, I am open to reconsideration of Red Lion and Pacifica in the proper case.

Unfortunately, this case apparently was not “the proper case” for Justice Thomas and so he joined the majority’s APA-driven decision and left the thorny constitutional issues for another day.  Eventually, however, the Court is going to have to come to grips with the issues that Justice Thomas has put front and center in his concurring opinion today.

Finally, in his otherwise outstanding statement, I was disappointed that Justice Thomas made no mention of the Court’s recent Internet jurisprudence, which has all gone squarely in favor of robust First Amendment protection for the Net and online speakers.  In particular, the “least restrictive means” test that has developed in those cases (i.e., deferring to user self-help tools before allowing state regulation) is equally applicable to programming television programming.  Just as parents have been empowered to take control of the online content that comes into their homes using filters and other tools, so too have parents been empowered to restrict or tailor television program to their tastes and values. How, then, is it the case that the Court upholds this logic in cases like Reno (the CDA case), Ashcroft (the COPA case), & Playboy (the cable TV signal scrambling case), but not in the case of broadcast TV programming, which is easier to control than ever before?  It makes zero sense.

Regardless, I hope other judges are listening to what Justice Thomas had to say today and taking these arguments seriously.

As I noted earlier, the U.S. Supreme Court today handed down a historical First Amendment decision in the case of Federal Communications Commission v. Fox Television Stations.  The Court ruled in the FCC’s favor by a 5-4 margin.  My initial general thoughts are here. In this piece, I’ll talk a bit more about the majority’s decision in the case.

The most important thing to realize about the Court’s 5-4 decision in FCC v. Fox is that the Court has intentionally dodged all the serious constitutional issues in play here and instead decided the case solely on procedural grounds. “We decline to address the constitutional questions at this time,” the majority says. (p. 26) Writing for the majority, Justice Scalia says:

There is… no basis in the Act or this Court’s opinions for a requirement that all agency change be subjected to more searching review. Although an agency must ordinarily display awareness that it is changing position… and may sometimes need to account for prior fact finding or certain reliance interests created by a prior policy, it need not demonstrate to a court’s satisfaction that the reasons for the new policy are better than the reasons for the old one. It suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change adequately indicates.

Of course, it’s not entirely unusual for the Court to decide important regulatory cases by sticking to administrative law / APA issues, but what’s different in this case is that we’re not talking about the regulation of widgets here. We are talking about the regulation of freedom of speech and expression. Shouldn’t the administrative law analysis change a bit when the issues at stake implicate profound constitutional imperatives? I think so, but the majority doesn’t address that. Moreover, because they dispense with all constitutional considerations, the majority never gets around to answering how much continuing sense this broadcast speech regulatory regime makes in an age of media and technological convergence. I discussed the illogical “First Amendment Jurisprudential Twilight Zone” that has developed in this field in this essay, this law review article, and a video presentation.  Sadly, today’s decision just makes matters more confusing and unfair.  After all, those children that the Court thinks the FCC might be protecting with these regulations are currently over on YouTube and Hulu watching all those same shows!

On a related note, the majority also never mentions its recent Internet jurisprudence, which has all gone squarely in favor of robust First Amendment protection for the Net and online speakers. In particular, the “least restrictive means” test that has developed in those cases (i.e., deferring to user self-help tools before allowing state regulation) is completely ignored by the majority in this case.  Again, welcome to the jurisprudential Twilight Zone.

Finally, I must address the stunning assertion that Justice Scalia sets forth in the last paragraph of his decision, which is the only one that addresses Pacifica and the constitutional issues at stake here. In that paragraph, Scalia adopts the shocking logic set forth by Solicitor General Gregory Garre during oral arguments for this case.  As I pointed out in my summary of the oral arguments, during questioning from the justices, Garre suggested that the government actually had a stronger case today when it regulates broadcast platforms differently than all other forms of media. His reasoning: Precisely because there are so many other unregulated platforms where kids might see or hear objectionable media, it was vital for the government to quarantine one platform and make sure it is safe from objectionable programming. This is an astonishing argument for the government to set forth as a rationale for regulation as it essentially turns the old “scarcity” and “pervasiveness” rationales for regulation on their heads. Back in the old days, we were told broadcasting had to be regulated because it was scarce or because it was pervasive in our lives. Today, by contrast, the government tells us we have to regulate broadcast platforms because of media abundance. In other words, it’s ‘damned if you do, damned if you don’t’ for broadcasters! There is no escape from regulation under this logic.

Amazing, Justice Scalia, endorses this logic in today’s decision:

The Second Circuit believed that children today “likely hear this language far more often from other sources than they did in the 1970’s when the Commission first began sanctioning indecent speech,” and that this cuts against more stringent regulation of broadcasts. Assuming the premise is true (for this point the Second Circuit did not demand empirical evidence) the conclusion does not necessarily follow. The Commission could reasonably conclude that the pervasiveness of foul language, and the coarsening of public entertainment in other media such as cable, justify more stringent regulation of broadcast programs so as to give conscientious parents a relatively safe haven for their children. [p. 26]

What is Justice Scalia — a strict constitutionalist — doing endorsing these inventions and reinventions of contorted theories of the First Amendment? It’s bad enough that he is allowing a constitutional abomination like Pacifica to stand, but here we have him rubber-stamping its reinvention by a creative-minded solicitor.  This is judicial activism with a vengeance!!

[Next up… I will discuss the very interesting concurring opinion by Justice Thomas.]