Protection of Children Prompts Potential FCC Regulation of Internet and Wireless Video Programming and Enhanced State Privacy Rules

In the next few days, concerns about the protection of children from indecency and violence could lead to a report from the FCC to Congress urging use of the V Chip and other parental controls in devices other than television sets.  Remarks several weeks ago by FCC Chair Julius Genachowski suggesting that the FCC might want to look at content regulation beyond the broadcast medium, a view reiterated in an interview yesterday in TV NewsCheck, also suggest that  concerns about the exposure of children to indecency and other troubling programming on cable, online and by wireless devices may lead the FCC into unprecedented extensions of its regulation of entertainment content beyond the broadcast media.  An article today from Bloomberg News confirms that the FCC will be starting an inquiry to see if the television program ratings should be extended to cable and wireless entertainment services.  This extension of Federal regulation to protect children is occurring at the same time that similar concerns are being expressed by state legislatures, including the adoption of a recent law in Maine that effectively prohibits direct marketing to minors.

The report due this week follows a Notice of Inquiry issued by the Commission in March, as required by the Child Safe Viewing Act, legislation passed by Congress.  The law required that the FCC solicit public comment on "advanced blocking technology", the next generation of the V Chip, to see if these technologies can and should be extended to video programming other than broadcast television, including online communications, wireless communications (including video delivered to mobile  devices), DVRs and other video recorders, DVD players, and cable television.  The FCC Notice also asked why the current V Chip has seemingly not been used much by parents.  The FCC even asks if rules should be extended to video games - which were not specifically named in the legislation.  This would seemingly extend the FCC's jurisdiction far beyond its current limits.  The FCC's report is due by August 29. 

In July, FCC Chairman Genachowski, in remarks delivered to Congress suggested that the Commission should look at adopting rules to protect children from objectionable content on these other platforms, remarks that were repeated in yesterday's TV NewsCheck interview.  As the FCC has never felt that it has jurisdiction over Internet content, and attempts to regulate cable television programming for indecency have met with constitutional problems given the ability to choose whether or not to receive cable programming and the blocking technologies that are already available to restrict such programs.  Yet the Commission's traditional reticence to expand its jurisdiction seems to be breaking down.  We have written about Congress's concern about not only indecency, but also violent programming and unhealthy food.  So, with a push from Congress to confer the FCC with power to regulate these areas, we may be looking at an FCC far more willing to regulate or at least examine regulation in these areas

At the same time, the states have been actively looking at regulating the media in some way or another in the name of the protection of children.  There have been bills introduced in legislatures around the country, suggesting regulation against unhealthy food ads (which, for the most part, have stalled by definitional issues), and privacy regulations.  Our firm recently published an advisory on this new law in Maine (see the Davis Wright Tremaine advisory here) which prohibits all direct marketing to minors under the age of 18, with no exceptions.  Apparently, even with parental consent, such marketing is prohibited.  While this law may be challenged, until its legality is determined, broadcasters with Kids clubs or frequent listener lists should be careful to insure that all members are 18 or older.

Clearly, concerns about what children see and hear are driving regulatory and legislative activities.  Broadcasters and digital media companies need to be alert to these activities, and adjust their programming to respond to any new regulatory requirements.

A Tale of Two Indecency Decisions - FCC Issues Fines for Married by America and NYPD Blue

This week, after a long period when we saw little in the way of indecency enforcement by the FCC, the Commission issued two orders compelling payment of fines for television programs broadcast in 2003.  The Commission issued a Notice of Apparent Liability (an order proposing a fine) only a few weeks ago asking ABC affiliates to respond to a potential indecency violation in connection with an NYPD Blue episode run in February 2003 (see our description of the proposed fines here and here).  Only a week after the submission of arguments against the proposed fine made by the cited affiliates in a 75 page response to the Notice of Apparent Liability, the FCC issued its order rejecting the arguments against the fines - an unheard of speed in issuing a decision.  Each station involved was fined $27,500.  Then, later in the week, the FCC issued an Order which fined a number of Fox affiliates $7000 each for perceived indecency violations in an episode of the Married By America reality television program, also broadcast in 2003 - following up on a Notice of Apparent Liability issued over two years ago by the FCC.  In one case, an incredibly quick action resulting in a large fine against many stations - in another a smaller fine against far fewer stations.  Why the differences?

The reason for fines coming now was that, in both cases, the 5 year statute of limitations was coming to an end and, if the Commission did not quickly act, it would be precluded from doing so.  In both cases, the Commission determined that it would fine only stations against which complaints were filed.  In the case of Married by America, the Commission had sent a notice of Apparent Liability to 169 stations, but ended up fining only 13 against which actual complaints had been filed.  In contrast, the Commission fined 45 stations for the NYPD Blue episode, even though the "complaints" were in many cases filed months after the program aired on the stations, and even though many of the "complaints" did not even allege that the local viewer had actually seen the program for which the fine was issued.  Instead, many of the complaints were apparently initiated by an on-line campaign urging that the people write the FCC to complain about the program - even if they hadn't necessarily seen it.  In its decision, the Commission concluded that the fines were appropriate - even without specific allegations that the program was watched by the people who complained.

In both cases, the FCC rejected arguments that its indecency rules were so vague as to not give enough guidance to broadcasters as to what was permitted and what was forbidden.  Also rejected were claims that the V-Chip was a less intrusive way of keeping children away from programming with adult content.  The Commission concluded that the V-Chip was not widely enough distributed in televisions, or used frequently enough even when it was included in a television set, to conclude that TV was no longer so pervasive and invasive that the government was no longer justified in regulating it.   The Commission also noted that the NYPD Blue episode was not coded by the network as containing sexual material, so a V-Chip would not have blocked the bare butt that formed the basis of the indecency finding.

In both cases, the Commission rejected claims that the affiliates should not be responsible for the content broadcast on the network programming.  The FCC found that the affiliates are responsible for all content that is broadcast on their stations, including network programming.  The Commission implied that the affiliates should be monitoring network broadcasts before the episode airs (a proposal suggested in the FCC's localism proceeding - see our summary here) and, in the case of Married By America, where the Commission perceived an on-going emphasis on indecent sexual activity, the affiliates certainly should have taken action after the first few minutes of the program (though what they would have then aired at that point was unclear).

In the rush to decide the NYPD Blue case before the statute of limitations ended, the FCC gave affiliates only 17 days to respond to the Notice of Apparent Liability, instead of the 30 days usually provided.  The Commission concluded that the rules did not require a 30 day response period, and that the affiliates were not prejudiced by the shorter response period - given that they were able to file a 70-plus page response.

In the Married by America, the FCC actually stated that they thought that the fine that they issued was too low given the nature of the programming (a entire program segment focusing on bachelor and bachelorette parties, with strippers who were deliberately sent to entice the participants into relationships) was so meant to be pandering, shocking or titillating that the fines should have been higher.  However, given the approaching statute of limitations, the Commission concluded that there was not enough time to propose higher fines.

These fines are unlikely to be the end of either case.  In the NYPD Blue case, ABC has already paid the fine, and filed an appeal seeking a refund, arguing that the fine was not legal or justified ( to challenge a fine, a licensee can pay the fine and appeal, or not pay the fine and wait for the Department of Justice to file suit to collect the fee).  We would expect that the Fox case will also see further consideration - and we are still waiting for a Court decision in the Janet Jackson clothing-malfunction case (summary here), and possible Supreme Court consideration of the fleeting expletive cases where the Court of Appeals threw out FCC fines (our summary here).  So indecency will likely be on the FCC agenda for some time to come.

Second Circuit Throws Out FCC Indecency Fines

Just as the FCC issued its order to implement the statutory increase in the amount of indecency fines, raising them to $325,000 per violation (see our comment, here), its enforcement of its indecency policy may be dead in its tracks.  A three judge panel of the US Court of Appeals for the Second Circuit, in a 2 to 1 decision released today, rejected the FCC's actions against a number of television networks for broadcast indecency.  The FCC actions were in the context of "fleeting utterances," i.e. the use of specific words that the FCC determined were indecent whenever they were used.  The Court rejected the FCC decision as being arbitrary and capricious, as the FCC decisions overturned without sufficient rational explanation years of FCC precedent that had had held that the isolated use of these words was not actionable.  The FCC actions were sent back to the FCC for further consideration to see if the Commission could craft a decision that provided a rational explanation for this departure from precedent.

However, this may prove to be impossible.  While the Court's decision was based on the FCC's failure to provide a rational basis for its departure from precedent, the Court also said that it was difficult to imagine how the FCC could constitutionally justify its actions.  The Court pointed to the inconsistent decisions of the FCC - fining stations for the use of the "F-word" and the "S-word" in isolated utterances during awards shows, and when used in the context of a program like PBS'  The Blues, but finding that the same words were not actionable when used in Saving Private Ryan or when used by a Survivor contestant interviewed on CBS' morning show.  In the Survivor case, the Court indicated particular confusion, as the Commission went out of its way to say that there was no blanket exclusion of news programming from the application of its indecency rules, but then it proceeded to find the softest of news - the Survivor cast-away interview - as being of sufficient importance to merit exclusion from any fine.  The Court felt that these decisions were so conflicting that a licensee would not be able to decide whether a use was permissible or not - and that such confusion, leaving so much arbitrary discretion in the hands of government decision-makers as to where to draw lines between the permissible and impermissible, would not withstand constitutional scrutiny.  It would have a chilling effect on free speech - and could be enforced in an arbitrary manner that could favor one point of view over another.

This reasoning, that the lines between the permissible and impermissible were impossible to predict, may well cause problems across the board in the FCC's enforcement of its indecency policies.  This decision determined that the prohibited words were, in and of themselves so "vulgar' and so suggestive of excretory and sexual functions that whenever they were used in any form, they were indecent.  But, as recognized above, there were exceptions where the FCC determined that the use, while perhaps indecent was, in context, permissible.  But because there was no clear line drawn , the government could be in a position to abuse its discretion when enforcing its policies, and perhaps make decisions on when to enforce the policy based on content of the programs, and not just the particular words being used.  These same criticisms could be leveled against much of the FCC's other enforcement in the indecency area.  Still to be decided are, for instance, the Janet Jackson case and the proceedings involving Without A Trace and Married By America, all cases where the allegedly indecent activity was not so blatant that it would be apparent to anyone (like the Seven Dirty Words routine where the Supreme Court approved limited indecency regulation).  In some of the pending cases, the FCC found innuendo and pixillated images to be indecent as they suggested the underlying sexual or excretory activity that was going on.  The fact that suggested activity alone could subject a broadcaster to a fine seems to be one of those areas where the line between the permissible and that which is prohibited cannot be discerned, and thus should cause concern in the courts.

The decision was interesting in one other respect - in that it suggested that one day soon broadcasting may not be subject to indecency regulation at all.  The Court looked at technological change, and recognized that broadcasting was not as all-pervasive as it once was, as there are so many other competitors for the attention of the public.  Plus advances such as the V-Chip, which allow parents to take control and block offensive content, are less-intrusive means of achieving the same ends that the FCC seeks, without treading on First Amendment concerns.

This decision is not final.  It could be reconsidered by the full Second Circuit Court of Appeals or appealed to the Supreme Court (as some supporters of the regulations have already urged).  Together with the other pending cases on indecency, we have not heard the last of this issue.  As attorneys from our firm have been involved in these cases, watch for more on these decisions.