High Court to Study Cable TV Franchises

The Supreme Court agreed today to decide whether communities lawfully may grant exclusive cable television franchises.

In a case of potentially momentous importance to the cable industry, the justices will decide whether such arrangements sometimes may violate the free-speech rights of excluded companies.

An appeals court ruled in March that Los Angeles may be acting unlawfully by limiting to one company in each region of the city access to utility poles and other public property necessary for installing and operating a cable system.

The U.S. 9th Circuit Court of Appeals said state and local governments must have a substantial reason for denying access to utility poles and other facilities capable of accommodating more than one cable operator.

Free Speech Issue

Otherwise, the appeals court said, such a denial of access violates the cable operators’ constitutionally protected freedom of speech.

The ruling marked the first time that a federal court has found the right to hold a cable franchise to be constitutionally protected.

A long series of court rulings makes clear that there is no such constitutional right to operate a television or radio station.

In the appeal acted on today, lawyers for Los Angeles said the appellate court ruling threatens the cable-franchising power of cities.

No ‘Unfettered Right’

“The First Amendment does not require a municipality to allow all cable operators an unfettered right to provide cable service,” the city’s appeal contended.

It said the appeals court ruling “created a new constitutional right to construct and operate a commercial cable television system on par with the right to speak in parks, streets and other public places.”

The appeal also attacked the 9th Circuit Court’s ruling for, in essence, declaring unconstitutional a 1984 law in which Congress appeared to give communities a clear legal right to grant exclusive cable franchises.

One section of the Cable Franchise Policy and Communications Act of 1984 says, “A franchising authority may award . . . 1 or more franchises within its jurisdiction.”

‘Construction . . . Invalid’

The 9th Circuit Court discounted comments made in Congress during debates on the “1 or more franchises” wording that it authorizes a city to determine how many cable operators will provide service in a particular geographic area.

“A construction of such breadth would be invalid,” the appeals court said.

Los Angeles, like many other cities, awards cable franchises for various regions within the city by competitive bidding.

When Los Angeles opened the South-Central area to competitive bidding in 1972, the sole entrant ultimately was awarded the franchise.

But Preferred Communications Inc., which chose not to participate in the bidding, later demanded that it be given a franchise for the area.

When the franchise was refused, PCI sued the city.