NCTA -- THE INTERNET & TELEVISION ASSOCIATION v. AARON M. FREY, in his оfficial capacity as Attorney General of the State of Maine; TOWN OF FREEPORT, MAINE; TOWN OF NORTH YARMOUTH, MAINE
No. 20-1431
United States Court of Appeals For the First Circuit
August 3, 2021
Before Lynch and Barron, Circuit Judges, and Burroughs, District Judge.*
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE
[Hon. Nancy Torresen,
Jessica Ring Amunson, with whom Howard J. Symons, Elizabeth B. Deutsch, Joshua D. Dunlap, Jenner & Block LLP, and Pierce Atwood LLP were on brief, for appellant.
Christopher C. Taub, Deputy Attorney General, with whom Aaron M. Frey, Attorney General, was on brief, for appellee.
John Bergmayer and Sara Nolan Collins on brief for Public Knowledge, amicus curiae.
James N. Horwood, Tillman L. Lay, Jeffrey M. Bayne, and Spiegel & McDiarmid LLP on brief for the Community Television Association of Maine, Alliance for Community Media, and Alliance for Communications Democracy, amici curiae.
* Of the District of Massachusetts, sitting by designation.
I.
A.
NCTA is a trade association for the cable television industry in the United States. NCTA -- The Internet & Television Ass‘n v. Frey, 451 F. Supp. 3d 123, 129 (D. Me. 2020). Its members include operators of cable systems throughout the country, including in Maine. Id. at 129 & n.1.
In general, cable system operators must obtain “permission” from local governments “to install cables under city streets and to use public rights-of-way.” Denver Area Educ. Telecomms. Consortium v. FCC, 518 U.S. 727, 734 (1996) (plurality opinion). To do so, a cable system operator usually must first obtain a “franchise” from a “franchising authority” -- the state or local governmental entity that authorizes the construction of a new cable system or the operation of an existing one through a franchise agreement.
Under Maine law, municipalities in the state serve as franchising authorities. See
NCTA‘s members have 307 franchises in Maine, each with its own franchise agreement. The terms of a franchise in Maine are generally in place for between ten and fifteen years, at which point the franchising authority and the franchisee may negotiate a renewal of the franchise.
NCTA member Charter has negotiated more than eighty franchise renewals in Maine in the past two years. At the time of the filing of this suit, it was involved in renewal negotiations with over fifty franchising authorities throughout the state.
In addition to the terms of the franchise agreement, a cable system operator in Maine may be subject to requirements that the State has imposed by statute. See, e.g.,
There is a long history of states and local governments protecting PEG channels. The first cable systems were established in the United States in the 1940s and 1950s, see Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 627 (1994); United States v. Sw. Cable Co., 392 U.S. 157, 162 & n.12 (1968), and by the 1970s, it was common for local governments to require an operator to set aside
In 1984, when Congress amended the Communications Act of 1934 in order to account for the development of the cable television industry, it codified local entities’ ability to require operators to provide PEG channel capacity in exchange for granting a franchise. See
In 2019, the Maine Legislature enacted the Mаine Act, which amended the state statutes that regulate the provision of cable service in the state. See An Act to Ensure Nondiscriminatory Treatment of Public, Educational and Governmental Access Channels by Cable System Operators, 2019 Me. Laws 469 (codified at
Specifically, cable system operators had begun moving PEG channels from low-numbered stations, where they had long been located, to the 1300 channel block. Id. The operators also transmitted PEG content in standard definition (“SD“) only, notwithstanding the fact that PEG stations produced content in high definition (“HD“). Id. In addition, cable system operators listed PEG channels only as “LOCAL” on their electronic program guides. Id.
Four of the provisions of the Maine Act that took aim at these practices are at issue in this appeal. These four measures are:
“The Basic Tier Provision,” which provides that:
A cable system operator shall carry public, educational and governmental access channels on the cable system operator‘s basic cable or video service offerings or tiers.
A cable system operator may not separate public, educational and governmental access channels numerically from other local broadcast channels carried on the cable system operator‘s basic cable or video service offerings or tiers . . . . A cable system operator shall restore a public, educational or governmental access channel that has been moved without the consent of the originator within the 24 months preceding the effective date of this subsection to its original location and channel number within 60 days after the effective date of this subsection.
A cable system operator shall retransmit public, educational and governmental access channel signals in the format in which they are received from the originator and at the same signal quality as that provided to all subscribers of the cable television service for local broadcast channels. A cable system operator may not diminish, down convert or otherwise tamper with the signal quality or format provided by the originator. A cable system operator shall deliver a public, educational or governmental access channel signal to the subscriber in a quality and format equivalent to the quality and format of local broadcast channel signals carried on the cable television service if provided as such by the originator. A cable system operator shall carry each public, educational or governmental access channel in both a high definition format and a standard digital format in the same manner as that in which local broadcast channels are provided, unless prohibited by federal law.
A cable system operator, when requested, shall assist in providing the originator with access to the entity that controls the cable television service‘s electronic program guide so that subscribers may view, select and record public, educational and governmental access channels in the same manner as that in which they view, select and record local broadcast channels. In addition, a cable system operator shall identify public, educational and governmental access channels on the electronic program guide in the same manner as that in which local broadcast channels are identified. This subsection does not obligate a cable system operator to list public, educational and governmental access channel content on channel cards and channel listings. If channels are selected by a viewer through a menu system, the cable system operator shall display the public, educational and governmental access channels’ designations in a similar manner as that in which local broadcast channel designations are displayed.
A fifth provision of the Maine Act is also at issue in this appeal, although it does not concern PEG channels. It instead addresses the provision of cable services in rural areas in the state. We will refer to it as “The Line Extension Provision.” It requires each franchising authority in Maine to include in any franchise agreement “[a] line extension policy, which must specify a minimum density requirement of no more than 15 residences per linear strand mile of aerial cable for areas in which the cable system operator will make cable television service available to every residence.”
B.
On September 12, 2019, NCTA filed a complaint in the U.S. District Court for the District of Maine against Maine Attorney General Aaron Frey.1 The complaint alleges that the five
provisions of the Maine Act just described violate federal law. As relevant here,2 NCTA contends in
NCTA moved for a preliminary injunction, but the District Court consolidated the motion with the trial on the merits. See id. at 129 n.3. The District Court then concluded that NCTA had failed to show that any of the five challenged provisions was facially preempted. Id. at 129.
The District Court began by upholding the Line Extension Provision against NCTA‘s contention that it was facially preempted by the interaction of two provisions of the Cable Act. Id. at 134-37. The first concerns the Cable Act‘s preemptive effect and
is set forth in
NCTA argued before the District Court that the Line Extension Provision is “inconsistent with,”
The District Court separately explained that a plaintiff bringing a facial challenge based on preemption to a provision must show that “no set of circumstances exists under which” the challenged provision would be constitutionally valid. Id. at 134 (quoting United States v. Salerno, 481 U.S. 739, 745 (1987)). The District Court then concluded that “[i]t makes more sense to allow cable operators to challenge the [Line Extension Provision] on a case by case basis, where a factual record can be developed to show whether a line extension term required by a particular franchising authority is reasonable to meet the community‘s needs in light of the costs.” Id. at 137. The District
Having rejected NCTA‘s preemption claim as to the Line Extension Provision on the grounds just described, see id. at 137, the District Court then addressed NCTA‘s preemption claims regarding the four challenged provisions in the Maine Act that concern PEG channels, see id. at 137-46. The District Court began its assessment of each of the four PEG provisions by addressing whether it is a “consumer protection law” within the meaning of
That determination is potentially important to the preemption analysis. Section 552(d)(1) states that “[n]othing in this subchapter shall be construed to prohibit any State . . . from enacting or enforcing any consumer protection law, to the extent not specifically preempted by this subchapter.”
The District Court held that each of the four PEG provisions at issue is a “consumer protection law” within the meaning of
The District Court accordingly denied NCTA‘s claims for declaratory and permanent injunctive relief for the four PEG provisions too. Id. at 146. The District Court‘s order entered on March 11, 2020. Id. at 123. NCTA filed a timely notice of appeal on April 10, 2020. See
II.
We begin with NCTA‘s challenge to the District Court‘s rejection of its claim of facial preemption against the Line Extension Provision. NCTA bases this claim, as it did below, on the contention that, under
Section 546 of the Cable Act provides that where a franchising authority determines preliminarily that a cable system operator‘s franchise should not be renewed, it “shall . . . , at the request of the operator or on its own initiative, commence an administrative proceeding” to consider whether:
(A) the cable operator has substantially complied with the material terms of the existing franchise and with applicable law;
(B) the quality of the operator‘s service, including signal quality, response to consumer
complaints, and billing practices, but without regard to the mix or quality of cable services or other services provided over the system,
has been reasonable in light of community needs;
(C) the operator has the financial, legal, and technical ability to provide the services, facilities, and equipment as set forth in the operator‘s proposal; and
(D) the operator‘s proposal is reasonable to meet the future cable-related community needs and interests, taking into account the cost of meeting such needs and interests.
Section 546 further states that a franchising authority may deny a cable system operator‘s proposal for renewal of the franchise only “based on one or more adverse findings made with respect to the factors” just described.
NCTA contends that
We are not persuaded. Section 546 does not purport, either in whole or in part, to limit the types of requirements (insofar as they do not concern the franchise renewal process itself) that may be demanded of cable system operators in the first instance, whether by franchising authorities setting the terms of franchise agreements or by states acting legislatively. Section 546 governs only the process by which a cable system operator‘s proposal for the renewal of its franchise may be denied.
Indeed,
We recognize that a franchising authority‘s decision to deny a cable system operator‘s proposal for renewal based on the operator‘s failure to comply with a specific state-law requirement, such as the one imposed by the Line Extension Provision, could run afoul of
But, in imposing that state-law requirement, the state would have merely established the “law” that would be “applicable” in the renewal process that
We thus agree with the District Court that
III.
We now turn to NCTA‘s claims of facial preemption regarding the four PEG provisions mentioned above. We start by focusing on the subset of those claims of preemption in which NCTA contends that a particular one of the four PEG provisions at issue here -- and only that PEG provision -- is preempted by a certain provision of the Cable Act, or by certain discrete provisions of the Cable Act operating together. Our review in each instance is de novo. See Bower, 731 F.3d at 92.5
A.
First up is NCTA‘s claim of preemption concerning the Basic Tier Provision. NCTA contends that the two provisions of the Cable Act that facially preempt this PEG provision in the Maine Act are
According to NCTA, when these provisions are considered in combination, it is clear that they together provide that “where a cable system is subject to effective competition, neither the FCC, nor a state, nor a franchising authority may demand basic-tier PEG carriage because such mandated carriage is part of rate regulation.” The assertion appears to depend on the following chain of logic: (1)
carry such channels that the Basic Tier Provision imposes; (4) hence, the application of the Basic Tier Provision‘s mandate to cable systems in Maine is barred by
In rejecting this argument, the District Court held that the Basic Tier Provision is a “consumer protection law” and so could be preempted only under the heightened “specifically preempted” standard. NCTA, 451 F. Supp. 3d at 140-41. The District Court then held that
NCTA contends that the District Court was wrong to so conclude, even if the Basic Tier Provision is a “consumer protection law” and so is prohibited only if it is “specifically preempted” by, and not merely “inconsistent with,” any provision of the Cable Act. NCTA argues that the District Court erred because it failеd to grasp the ways in which the Cable Act makes clear that a requirement like that imposed by the Basic Tier Provision is necessarily a
NCTA relies heavily in advancing its position on the reasoning in the D.C. Circuit‘s decision in Time Warner Entertainment Co. v. FCC, 56 F.3d 151 (D.C. Cir. 1995). There, the D.C. Circuit addressed
In doing so, the court noted the “close relationship” between
We do not see how Time Warner‘s discussion of
That said, we do not dispute a necessary premise of NCTA‘s argument -- that the mandate to carry PEG channels on the basic tier set forth in
But, even with that premise in place, the mandate imposed by the Basic Tier Provision differs in a key respect from the one set forth in
Accordingly, at least in the absence of a
NCTA means to make it -- that the Basic Tier Provision is facially preempted by the Cable Act provisions at issue, even if the Basic Tier Provision is not a “consumer protection law,”
B.
We next consider NCTA‘s claim of facial preemption regarding the HD Provision. NCTA identifies the preemptive provision here as
NCTA first argues that
The District Court rejected that contention on the ground that the HD Provision was, like the Basic Tier Provision, a “consumer protection law” under
Indeed,
We agree. Section 544(e) speaks expressly in the relevant respect only to the authority that the FCC does have. It says
There is also another reason, however, that we must reject NCTA‘s claim of specific preemption. The District Court expressly pointed out that the FCC‘s “technical standards on signal quality seem to be set forth in
NCTA does cite to an FCC order, Technical and Operational Requirements of Part 76 Cable Television, 50 Fed. Reg. 52,462-02 (Dec. 24, 1985), which it asserts describes “‘signal quality’ standards . . . [as] including ‘high definition or quasi-high definition techniques.‘” But, that passing reference does not constitute a developed argument as to what a “minimum technical standard[] relating to . . . signal quality” is under the relevant provision of the Cable Act that is said to be preemptive of the HD Provision, let alone why, given that understanding of “minimum technical standards,” the HD Provision must be understood to impose one.
It is true that the order that NCTA cites evinces the FCC‘s concern that variable “technical standards” might frustrate innovation, including by undermining “efforts [that were being] made to improve the quality and fidelity of television through high definition or quasi-high definition techniques.” Technical and Operational Requirements of Part 76 Cable Television, 50 Fed. Reg. at 52,465. But, NCTA does not argue that the HD Provision does more than require operators to deliver to subscribers PEG content “in a quality and format equivalent to the quality and format of local broadcast channel signals . . . if provided as such by the originator.”
NCTA also points in its opening brief to us to a House Conference Report describing
NCTA separately contends in its reply brief (and noted at oral argument) that in order to comply with the HD Provision in some cases, a cable operator might be required to upgrade the equipment used to transmit PEG content from a PEG facility to the operator‘s headend. But, the HD Provision does not on its face require operators to provide equipment of any particular quality to PEG stations -- any obligation on that score appears to derive from individual franchise agreements rather
Thus, NCTA‘s failure to explain how the HD Provision, even if it imposes a requirement “relating to . . . signal quality,” establishes a “minimum technical standard[] relating to . . . signal quality,”
C.
We turn next to NCTA‘s facial preemption claim regarding the Electronic Program Guide Provision. NCTA contends that this provision is preempted even if it is a “consumer protection law” under
1.
Section 544(b)(1) specifies that a “franchising authority . . . may establish requirements for facilities and equipment, but may not . . . establish requirements for video programming or other information services.”10
NCTA argues that the electronic program guide “fits this definition” of information service “hand in glove” because “[i]t does all of the above: ‘mak[es] available information’ about programming by ‘generating, acquiring, [and] storing’ data about past, current, and upcoming programming, and ‘transform[s], process[es], retriev[es], [and] utilize[es]’ that data by converting and displaying it in a customer-usable format that enables navigation between channels, as well as program recording.” (first alteration added). NCTA then reads
The District Court rejected that argument without reaching the question of whether an “electronic program guide” within the meaning of the provision of the Maine Act at issue is an “information service.” See NCTA, 451 F. Supp. 3d at 145-46. It held that the Electronic Program Guide Provision is a “consumer protection law” under
But, even if we were to reject the District Court‘s reasoning, there is an independent basis manifest in the record for affirming the District Court‘s ruling. See O‘Brien v. Town of Agawam, 350 F.3d 279, 292 (1st Cir. 2003) (“[T]his [C]ourt may affirm on any alternative basis that is manifest in the record.“). That reason has to do with whether the Electronic Program Guide Provision takes aim at an “information service.”
The FCC has explained that the definition of an “information service” under the Cable Act “rests on the function that is made available . . . to its end users.” Inquiry Concerning High-Speed Access to Internet Over Cable and Other Facilities, 17 FCC Rcd. 4798, 4821 (2002), aff‘d in part, Brand X Internet Servs. v. FCC, 435 F.3d 1053, 1053 (9th Cir. 2006) (affirming declaratory ruling in accordance with Nat‘l Cable & Telecomms. Ass‘n v. Brand X Internet Servs., 545 U.S. 967 (2005)). The statute itself provides that an “information service” is not merely something that “generat[es], acquir[es], stor[es], transform[s], process[es], retriev[es], utiliz[es], or mak[es] available information via telecommunications” in its own right but something that “offer[s] . . . a capability for” doing those things.
NCTA bears the burden to establish on this facial preemрtion challenge that “no set of circumstances exists under which the [statute] would be valid.” Pharm. Rsch. & Mfrs. of Am. v. Concannon, 249 F.3d 66, 77 (1st Cir. 2001) (quoting Salerno, 481 U.S. at 745); see also Thayer v. City of Worcester, 755 F.3d 60, 71 n.3 (1st Cir. 2014) (explaining that outside of First Amendment overbreadth challenges, a plaintiff bringing a facial challenge “in other, non-speech-related contexts” must meet the Salerno standard (citing 481 U.S. at 745)), vacated on other grounds, 576 U.S. 1048 (2015); MetroPCS Cal., LLC v. Picker, 970 F.3d 1106, 1122 (9th Cir. 2020). Its failure to show that the PEG provision at issue encompasses only those electronic program guides that qualify as “information services” under
2.
We turn, then, to NCTA‘s claim that the Electronic Program Guide Provision is facially preempted by
The District Court recognized that the Cable Act bars “government regulation оf content,” but it rejected NCTA‘s contention on this score because it held that “PEG channels are an exception” to that “general concern.” NCTA, 451 F. Supp. 3d at 145. The District Court explained that when it comes to PEG channels, “cable operators have no editorial control . . . and it is the franchising authority that has editorial control over content.” Id. Accordingly, the District Court concluded that “requiring cable operators to allow PEG channels access to the programming guide does not specifically conflict with
In arguing for preemption nonetheless, NCTA contends that the Electronic Program Guide Provision is a “requirement[] regarding the . . . content of cable services” under
Thus, NCTA premises this preemption claim on the understanding that the Electronic Program Guide Provision requires the inclusion of detailed programming data -- and not just the “listing” of PEG channels -- on electronic program guides. But, given that NCTA‘s preemption claim relies on that broader understanding of the scope of the Electronic Program Guide Provision, we do not find it to be persuasive, albeit for reasons that are different from those relied upon by the District Court.
Our concern stems in part from the language of the Electronic Program Guide Provision, which specifies that:
A cable system operator, when requested, shall assist in providing the originator with access to the entity that controls the cable television service‘s electronic program guide so that subscribers may view, select and record [PEG] access channels in the same manner as that in which they view, select and record local broadcast channels. In addition, a cable system operator shall identify [PEG] access channels on the electronic program guide in the same manner as that in which local broadcast channels are identified. This subsection does not obligate a cable system operator to list [PEG] access channel content on channel cards and channel listings. If channels are selected by a viewer through a menu system, the cable system operator shall display the [PEG] access channels’ designations in a similar manner as that in which local broadcast channel designations are displayed.
We find it significant, too, that even though NCTA asserts that its members cannot comply with the Electronic Program Guide Provision because “PEG programmers generally do not provide the information needed to populate the program guides,” Maine contends that the provision requires cable system operators to “include[]” “program details” only “provided that PEG operators supply the necessary information.” And, while NCTA has asserted that its members would “incur hundreds of thousands of dollars in engineering costs to ensure” that their electronic program guides are compliant with the Maine Act, NCTA‘s only response to Maine‘s assertion that it has “offer[red] no good explanation for why at least the names of PEG channels cannot be listed on electronic programming guides” is to insist that this “is emphatically not what the Maine Act requires.”
Thus, from all that we can tell, NCTA is asking us to address a concern arising from
Moreover, NCTA develops no fallback argument that, absent the broader construction of the Electronic Program Guide Provision just addressed, that provision still imposes a “requirement[] regarding . . . content” within the meaning of
IV.
There remains NCTA‘s contentions that the Basic Tier, HD, and Electronic Program Guide Provisions are facially preempted because all three are “inconsistent with”
A.
Section 541(a)(4)(B) of the Cable Act authorizes a franchising authority to “require adequate assurance that the cable operator will provide adequate [PEG] access channel capacity, facilities, or financial support.”
The District Court rejected NCTA‘s argument on grounds that by now should be familiar. It concluded that each of the PEG provisions is a “consumer protection law” and that “[i]n enacting” them, “the State [was] not acting as the franchising authority or dictating the terms of the franchise agreement.” NCTA, 451 F. Supp. 3d at 139. Thus, the District Court held that
NCTA contends that this reasoning “misses the point” of the Cable Act‘s preemption scheme and that the District Court should have concluded that “Maine is not permitted to do what a franchising authority is prohibited from doing.” But, even if we assume as much, we still must reject NCTA‘s claim of facial preemption, due to the limited nature of its argument about what is “adеquate” within the meaning of
NCTA‘s sole contention on that score is that requirements comparable to those imposed on broadcast channels exceed what is adequate in every case.16 In connection with that argument, as we have noted, NCTA observes that the FCC has defined “adequate” according to its “ordinary meaning” of “satisfactory or sufficient,” and it then cites to an FCC order for the proposition that “[t]he FCC has explained that the limits on ‘adequate’ PEG facilities, equipment, and support are non-waivable federal restrictions on what states and localities may demand.” See Third Report and Order, 34 FCC Rcd. at 6869-70.
But, NCTA does not address the fact that in that order the FCC rejected an “invitation by cable operators to establish fixed rules as to what constitutes ‘adequate‘” PEG resources and explained that the proper inquiry looks to what is “necessary to further the goals of the Cable Act.” Id. at 6870. Nor does NCTA address the fact that the FCC elaborated on that point in that same order by explaining that “[i]n general,” a number of “factors [are] relevant” to the determination of “what constitutes ‘adequate,‘” which “might vary depending on, among other things, the number of subscribers within a franchise, the area covered by a franchise, the number of cable operators within a franchise, the area‘s population and geography, the cable-related community needs and interests, and whether PEG channel capacity is substantially used.” Id.
That NCTA does not address those points presents a problem for its facial preemption claim, because NCTA does not either explain why those factors in that order are not relevant to the “adequate” constraint or address how they bear on this case. In addition, NCTA does not contend with the evidence in the record about the experiences of communities in Maine and what the State‘s residents need to be able to access PEG channels. We thus cannot conclude that NCTA has carried its burden to show facial preemption based on
B.
We turn now to NCTA‘s argument that all four PEG provisions are facially preempted because each is “inconsistent
Section 531(a) of the Cable Act provides that “[a] franchising authority may establish requirements in a franchise with respect to the designation or use of channel capacity for [PEG] use only to the extent provided in this section.”
Maine‘s initial line of defense is that none of the PEG provisions is “inconsistent with”
As noted above, NCTA describes
We are thus left with two questions for each PEG provision: (1) whether it is within the scope of
That said, it is possible to glean from NCTA‘s brief the argument that at least the HD Provision may relate to “the designation . . . of channel capacity.” NCTA notes in its statement of the case, for example, that delivering content in HD “requires more than four times the cable-system bandwidth” than delivering content in SD does, and it also cites to an affidavit that further explains that under the HD Provision operators would be required to “dedicat[e] more . . . channel capacity to transmit PEG channels in both SD and HD.”
V.
For the foregoing reasons, we affirm the decision of the District Court. The parties shall bear their own costs.