At issue in this appeal is whether Access Houston Cable Corporation (“Access”), a “PEG” cable channel, 1 can, consistent with the First Amendment, charge a fee to cable-cast programs not “locally produced” in and around Houston, Texas. We conclude that Access Houston’s fee requirement is a content-neutral regulation which implements a significant governmental interest in promoting localism, but Access has not met its burden of proving that the fee is narrowly tailored to serve that interest. We therefore reverse the grant of summary judgment and remand for further proсeedings.
BACKGROUND
The City of Houston granted a cable franchise to Warner Cable Communications (‘Warner”) that required Warner to designate at least four PEG channels for *190 the city’s benefit. 2 Houston then engaged Access to manage the channels, including a public access channel. 3 Access is not a typical cable channel: It does not operate for profit, it does not have an editorial board that selects programming for cable-cast, and it does not sell advertising space. Instead, Access’s programming space is open to any individual or organization who wishes tо televise constitutionally protected speech. Access neither produces programs nor broadcasts commercial programs. To promote the original programming on which it relies, Access offers (for a nominal fee) video cameras and other production equipment, training workshops, studio space and other services.
Access touts that it will broadcast any non-commercial program as long as the program engages in constitutionally protected speech and complies with various rules designed to allocate air time among the programmers. Access employees do not pre-screen submitted programs to determine whether they comply with the non-commercial speech rule or the First Amendment; instead, Access requires program providers to accept liability for the content of their programs by signing a Program Contract before the program will be aired. 4
At the time this dispute arose, Access sought to encourage programs “that reflect[ ] the activities, culture, concerns, and interests of the citizens of Houston and [ Ipromote a free exchange of ideas, information and understanding.” 5 To fulfill its contractual obligation with the City, Access’s Board of Directors adopted a rule, which has been in effect since 1988, providing for “locally produced” programs to be broadcast free of charge. To qualify as a “locally produced program,” at least 50 percent of the program must have been shot within the Houston Standard Metropolitan Statistical Area. Programs that do not comply with the “locally produced” rule are assessed a fee: individuals who submit non-local programs must pay $75 for each hour of progrаmming, while organizations are charged $100 per hour. Because Access does not pre-screen submitted programs, it cannot initially determine whether a program complies with the rule. Access relies on each program provider voluntarily to disclose whether the submitted program was locally produced.
In March 1992, Appellant Nationalist Television (“N-TV”), as agent for Houston resident appellant Robert Horton, submitted a 30-minute program for cable-cast entitled Airlink. 6 After a month had passed and the program had not been cable-cast, N-TV wrote to the Houstоn City Attorney’s office demanding that Access immediately cable-cast Airlink. The City Attorney replied that Access operates independently of the City and that Hous *191 ton cannot require Access to broadcast Airlink. In addition, N-TV was informed that, according to Access, N-TV had not complied with the procedural requirements necessary to broadcast Airlink and that N-TV should directly contact Access to complete the application process. Despite this notification and the receipt of a complete copy of the Access procedural rules, N-TV continued to complain to the Houston City Attorney’s Office rather than to Access. Months later, N-TV turned to Access and learned that it, like all other program providers, must sign a Program Contract. Two months more passed, NTV finally signed the requested Program Contract, and Access began cable-casting Airlink.
Airlink was produced at a studio in Mississippi and did not qualify as a “locally produced program.” N-TV was thus required to pay the $100 cable-cast fee. 7 NTV refused to pay, arguing that the fee violated the First Amendment, and filed the present lawsuit seeking a declaratory judgment, a temporary restraining order, and a permanent injunction. Ironically, Access began regularly cablecasting Air-link just after the suit was filed, from December 1992 through February 1993. When N-TV refused to pay fees for the three months of programming that had been aired, Airlink was canceled.
Immediately after appellants filed suit, the district court held a hearing to rule on appellants’ request for a temporary restraining order (“TRO hearing”). The district court denied the request and offered to set the case for trial. Each party then moved for summary judgment. The court held in favor of Access and the city, ruling that the fee requirement is a facially valid, content-neutral regulation incidеntal to free speech under the test articulated in
United States v. O’Brien,
STANDARD OF REVIEW
The standard of review of a summary judgment at the appellate level is
de novo.
Summary judgment is proper if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with any affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c);
see also Celotex Corp. v. Catrett,
DISCUSSION
N-TV scatter-guns its First Amendment arguments against the Access fee for non-locally-produced programs. Attacking the fees both facially and as applied, NTV asserts that the fee rule grants over-broad, arbitrary discretion to Access administrators, encouraging content-based discrimination against programs. More fundamentally, N-TV contends that the fee regulation is an impermissible content-based rule. N-TV also levels equal protection, overbreadth and vagueness challenges to the fees, but these arguments were not raised in the district court and will not be considered here.
Fitting the PEG channels into the familiar holes of First Amendment jurisprudence is not easy. The premise of our discussion is that programmers have some kind of First Amendment rights to share the podium at a PEG local access channel *192 set aside by Houston’s cable franchise contract. The Supreme Court has implied that all of the participants in cable television-programmers, cable operators, TV broadcasters, PEG channels' — enjoy free speech rights, but the limits of those competing and pоtentially conflicting rights are far from clear. See generally, Pluralism on the Bench: Understanding Denver Area Educational Telecommunications Consortium v. FCC, 97 Colum. L.Rev. 1182 (1997).
The first conundrum relates to the dubious status of PEG channels, which municipalities have the authority to set aside in their cable franchise agreements with cable operators.
See
47 U.S.C. § 531(a). In the “must-carry” case, the Supreme Court upheld a federal law requiring cable operators to make available transmission space for local TV broadcasters.
Turner Broadcasting System v. FCC,
The second conundrum arises from the implicit concession of Access that the local access channel represents a government-owned designated public forum. Nevertheless, the Supreme Court has cautioned that “the public forum doctrine should not be extended in a mechanical way to the very different context of public television-broadcasting.”
Arkansas Educ. Television Comm. v. Forbes,
The consequence, for First Amendment purposes, of ascribing particular forum (or non-forum) characteristics to Access lies in the strictness of legal scrutiny that will be applied to Access’s fee regulation. Access contends that the regulation is subject to “intermediate scrutiny” because it has nothing to do with the content of programmers’ speech.
Turner,
The nub of the parties’ disagreement turns upon whether thе fee charged for non-locally produced programs is content-neutral, or, as N-TV would have it, a ruse for influencing the content of programs that will be cable-cast.
The Supreme Court has observed that “[djeciding whether a particular regulation is content based or content neutral is not always a simple task.”
Turner,
We conclude that Access’s fee rule is content-neutral because the rule does not, by its terms, distinguish between favored speech and disfavored speech. Access does not examine the content or message of submitted programs in determining whether to impose a fee.
Compare Frisby v. Schultz,
To the extent that Access’s fee rule unabashedly prefers locally-produced programs, we recognize that it is not unassailable. The dissenters in
Turner
criticized legislative preferences for “diversity of viewpoints, for localism, for educational programming ...” as content-based regulations.
Turner,
In this case, one may argue that while the interest in “localism” is furthered by the fee rule, not only is there no direct content regulation, but the fee compensates the citizens of Houston in a small way for the costs incurred when non-locally-produced programs air on the Access channel. The fee subsidizes Access and substitutes for the local resources that could otherwise be utilized to produce programs. The fee thus has an independent economic basis more closely analogous to the content-neutral must-carry rule than to a purely content-related localism preference. We therefore conclude that the non-locally-produced fee rule is content-neutral.
The standard for evaluating the constitutionality of content-neutral regulations was articulated in O’Brien:
[A] government regulation is sufficiently justified [1] if it is within the constitutional power of the Government; [2] if it furthers an important or substantial governmental interest; [3] if the governmental interest is unrelated to the suppression of free expression; and [4] if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest.
O’Brien,
Still at issue are the second and fourth
O’Brien
standards. “Even a content-neutral regulation of speech on a public forum must be narrowly tailored to serve a significant government interest and must leave open ample alternative channels of communication.”
Hays County Guardian v. Supple,
Access argues that the fee requirement promotes the substantial governmental interest in “localism.” According to Access, the fee encourages residents to produce programs featuring topics of local concern which in turn enhances community self-expression and fosters direct communication among residents. Since a portion of
*195
the revenues derived from Houston residents’ cable bills funds Access’s, operations, residents should not have to subsidize non-locally-produeed programs.
10
Similarly, Access urges that the revenues generated from the fee train local producers, purchase production equipment, and fund the general operations of Access. Finally, encouraging residents to produce local programming increases job opportunities and career development of Houston residents. We agree — and N-TV does not dispute
11
—that the promotion of “localism” in this context is an important governmental interest.
See Chicago Cable,
That Access’s asserted interests are substantial in the abstract does not mean, however, that the fee regulation fulfills them and is narrowly tailored to protect those interests. The fee rule will be considered narrowly tailored if Access can demonstrate that it does not “burden substantially more speech than is necessary to further the government’s legitimate interests.”
Ward,
Access has failed to demonstrate narrow tailoring of the fee rule as a matter of law. It has not shown that, absent the fee charged to providers of non-local programs, its interest in promoting localism “would be achieved less effectively.”
Albertini,
Access’s general fee schedule demonstrates the lack оf correlation between the amount charged to non-locally produced programs and its stated justification for imposing a fee. Access heavily subsidizes most of the services and equipment it offers to the public. Next to each item listed on the general fee schedule, Access lists the cost of the item, the amount subsidized by Access, and the resulting net cost to the producer. 12 Notably, however, the fees charged to program providers for cable-casting their programs are not itemized by actual cost, amount subsidized, and *196 net cost to provider. The genеral fee schedule merely states that Access airs locally produced programs free of charge, while programs produced elsewhere are charged either $75 or $100 per hour, depending on whether the provider is an individual or organization. Not only is there no evidence how much of the fee charged for non-locally-produced programs compensates Access for its cable-casting costs of those programs, but Access’s executive director testified that he had recommended abolition of the fee to the Board of Dirеctors. The inescapable conclusion is that the fee serves no measurable purpose.
Because Access has not met its summary judgment burden to sustain the fee, this case must be reversed and remanded.
See Turner,
Further judicial efforts would be avoided, however, if we accept N-TV’s alternative argument that the fee rule confers excessive discretion upon Access’s administrator and permits content-based discrimination. According to N-TV, Access’s own interpretation of the fee rule undermines the argument that it is narrowly tailored.
See Forsyth County v. The Nationalist Movement,
Question: What about a guy that stopped by the other day and just happened to pick up some of your material and the receptionist was there and I said, “You know, what if somebody wanted to go up and get an interview in Dallas with Ross Perot, shoot it up there” and she said, “That will be all right?” Would that be okay with you?
Answer: It would be okay with me.
Question: No charge for that?
Answer: No charge.
Question: Okay. Now, just аssume for a moment that here is a tape and we’re showing it and there is Senator Gramm. He’s seated at a desk. There’s books behind him. And he’s sitting there talking about taxes. Everybody is concerned about them these days. Any problem putting that on?
Answer: No.
Question: Okay. Now, let’s say that it’s on the air and one of your staff comes in and says “Mr. Cantrell, you know, I’ve been in Senator Gramm’s office in Washington and I recognize those books. That was filmed in his office in Washington.” No real problem, though?
Answer: No real problem.
*197 Other similar exchanges occurred during the TRO hearing, each one suggesting that Access’s administrator could, at his discretion, make special exceptions to the fee rule depending upon the circumstances presented. 13 The discretion afforded the Executive Director is highlighted by contrasting the hypothetical above with one presented to him later during the TRO hearing:
Question: [Suppose] [h]e’s got a 30-min-ute show. He comes so close, for 14 minutes he shows the Houston skyline. Would you let him slide on that without having to pay?
Answer: Like I say, we would—that would be a good issue to discuss in the grievance procedure.
Question: You might let it slide?
Answer: Well, I don’t think I would let it slide. But if it came up, I think it would be something worth discussing with the board.
Access’s response tо this troubling amount of apparently unguided discretion is that N-TV presented no actual evidence that the fee had been diseriminatorily imposed. We agree that, in light of the express objectivity of the rule, a facial challenge based on standardless discretion lacks merit. The rule, unlike the sliding-scale fee in Forsyth, unequivocally identifies the programs to which it applies and simply does not justify the latitude which the Executive Director hypothesized. Further, lacking any proof that the fee was ever administered diseriminatorily to suppress disfavored speech, N-TV’s as-applied challenge must fail.
CONCLUSION
Much is uncertain about the scope of First Amendment benefits and burdens in the cable industry. The directions presently available to us from the Supreme Court appear to require a standard less than that of strict scrutiny for Access’s non-loeally-produced fee rule, but they also require attention to the details of intermediate scrutiny. Regulations like this one which burden protected speech are not to be rubber-stamped. Based on the foregoing discussion, the case must be reversed and remanded for further factual development.
REVERSED and REMANDED.
Notes
. PEG channels are those reserved for public, educational or governmental use by the municipal franchise agreement with a cable operator. See 47 U.S.C. § 531 and 531(e).
. Under the franchise agreement, the City of Houston can require Warner to make available an additional four cable channels if certain conditions are met.
. That Access is a state actor is undisputed on appeal.
. Pursuant to Rule 2.A-5, all program providers who wish to schedule broadcast time with Access must first sign a Program Contract. The Rule stales that,
2.A-5 PROGRAM CONTRACT AND RESPONSIBILITY: Before access programs are scheduled for cable-cast, the access program provider must sign a Program Contract which holds the program provider liable for content of the program and pay all applicable fees. In signing the Program Contract, the program provider agrees in writing that his or her program does not include any form of "constitutionally unprotected speech.”
. Access Houston By Laws Art. Ill (1986). After the events in this case, in its 1994 contract with the City of Houston, the requirement to support localism became more explicit: "a minimum of 51 percent of the total hours programmed on the Access channel shall be locally produced in the Houston metropolitan area.”
. The content of Airlink is described as "pro-majority” in some portions of the record and "white supremacist” in other parts of the record.
. Since Airlink was a half-hour program, the $100 fee was prorated, making N-TV liable for $50 per cable-cast.
. Indeed, the majority emphasized that neither the must-carry rule nor laws and rules presently applicable to broadcasting (e.g. on non-commercial stations) directs the content ol the programs.
Turner,
. If Access were, instead, a limited public forum or a nonpublic forum it would be permitted to place reasonable restrictions on the speech of programmers.
See Forbes,
— U.S. at-,
.At the TRO hearing, the executive director for Access expanded on this theme, testifying that,
the residents of the City of Houston, through their cable bills, underwrote the costs of the facilitation that our organization provides of putting the programs together, scheduling them and putting them on the cable system. We've never had a problem with where programs come from in terms of content. We frankly don’t care about what the content is. What we were concerned about was it seemed unfair to us that the residents of City of Houston should subsidize programs that were from somewhere else and that, if someone wished to use the facilities, that they should contribute to sustaining the organization that had to help facilitate the users of all the programs on the channels.
. At oral argument, N-TV agreed that Houston has a substantial interest in promoting localism.
. For example, the actual cost of renting a "VideoMobile Portable Kit” is $250; however, Access pays $190 of the cost via a grant, leaving the producer liable for only $60. See Access Houston Cable Corporation’s Objections to Proposed Order Granting Summary Judgment, Exhibit D (fee schedule effective May 19, 1988).
. For instance, in anothеr exchange, Access’s Executive Director testified as follows: Counsel: Let’s say that Mr. Horton comes
into your studio and he produces a show right there in your studio every week, free. He goes to Mississippi. He’s over there visiting the headquarters [of N-TV] and everything and the poor fellow is in a car wreck and he broke his leg and he calls you up and says, "I can’t get back to Houston. I’m going to have to shot this from the hospital bed in Jackson” and he sends you the tape. Is he going to have to pay for that?
Answer: Under the Current rules, that would be the case.
Counsel: Would you waive that in this case?
Answer: Would I waive it?
Counsel: Yes
Answer: In the grievance procedure, I would recommend that we waive it. I would probably take it upon myself to waive it.
