Corporate Free Speech Battle Is Escalating
When the founding fathers established the right to free speech, they hardly could have had AOL Time Warner Inc. and AT&T; Corp. in mind.
But major corporations are increasingly casting themselves as 21st century Thomas Paines whose commercial pursuits are a form of speech that should be shielded from government regulation, just as anti-war activists and abortion opponents believe they should be free to express their views.
In recent months, some federal court rulings have suggested that corporate America is making headway, particularly in the cable television, Internet and information industries.
These successes are rekindling a debate over how far to extend free-speech protections and whose constitutional interests should prevail when citizens are pitted against corporations.
Consider some of the legal questions: Does a telemarketer have a constitutional right to call at dinner time? Can Time Warner exceed government-imposed market caps because it has a 1st Amendment right to sell HBO and Cartoon Network to cable customers? Would a ban on the sale of Social Security numbers violate the free speech of credit bureaus, private investigators and information brokers?
Critics lament that businesses are hijacking a cherished American tenet and using it as a tool to make money and escape government regulation.
“If the founding fathers were alive, they would never stop throwing up,” said Robert W. McChesney, media professor at University of Illinois, borrowing a famous Woody Allen line.
“Once you say that the right to make money is protected by the 1st Amendment, you turn the marketplace of ideas into a junkyard. It’s only a matter of time before the 1st Amendment covers everything.”
Business leaders exult in what they say is a long-overdue recognition that corporations have constitutional rights too.
“In the United States, we still have certain legislation and certain rules that were designed for another period,” AOL Time Warner Chief Executive Gerald Levin said recently. “Increasingly, through the help of the courts--that is, the reach of the 1st Amendment--we’ll have opportunities.”
Marv Johnson, legislative counsel for the American Civil Liberties Union, said, “Free speech in the commercial areas seems to be gaining in the courts and getting closer to the kind of protections that you see on so-called traditional speech.”
Lawrence Lessig, a constitutional scholar at Stanford Law School, worries that corporations are using 1st Amendment arguments primarily to stifle competition, circumvent antitrust rules and gain a stranglehold on emerging industries, particularly the Internet.
AT&T;, for example, cried 1st Amendment foul after Broward County, Fla., using an “open-access” ordinance, tried to force the cable giant to lease its high-speed Internet wires to rivals.
The goal, county officials say, was to ensure consumers had more options in connecting to the Internet, not to interfere with content or viewpoint.
But AT&T; convinced a federal judge in November that the local law violated the company’s constitutional rights because it forced AT&T; to carry the “speech” of a rival--in this case, the other company’s Internet service.
“That’s data transmission, not speech,” said Andrew Jay Schwartzman, president of Media Access Project, which has opposed many of the corporations’ 1st Amendment claims.
Under the 1st Amendment, it’s not unreasonable, Schwartzman said, to argue that the government may not block companies from expressing viewpoints that the government finds offensive. But it’s a long way from that argument to using the free-speech argument to combat government rules designed to serve the public interest, he said.
Time Warner scored another big victory in March when the U.S. Court of Appeals in Washington tossed out federal rules preventing any single cable operator from controlling more than 30% of a market.
The judges ruled that Time Warner had a 1st Amendment right to grow larger--that is, to “speak” to additional customers--and that the Federal Communications Commission had not demonstrated the government’s overriding interest in interfering. The FCC had set the cap at the behest of Congress because it wanted to ensure a diversity of cable programming.
The ruling suddenly threw into question long-standing ownership caps affecting other industries, such as broadcasting and publishing, even though those rules had withstood constitutional challenges.
Viacom Inc. last month won a stay of an FCC order that would have forced it to sell some of its television stations to comply with the agency’s broadcast ownership rules. (Tribune Co., owner of the Los Angeles Times, would benefit from the removal of rules preventing cross-ownership of newspapers and broadcast stations in the same market.)
Companies say it’s a mistake to view the free-speech rights of corporations as less important than those of citizens.
“When you have an individual speaker, it’s easier to put a face on the free-speech issue than it is with a multinational corporation,” said Robert Corn-Revere, a Washington attorney who has represented cable and Internet companies in their 1st Amendment claims. “But you are still talking about bedrock 1st Amendment principles.”
Others warn that ranking free-speech rights is a slippery slope. “If you start chipping away at 1st Amendment rights, pretty soon you don’t have anything left,” said Richard T. Kaplar, editor of Commercial Free Speech Digest, a newsletter advocating the rights of businesses.
Schwartzman said companies don’t deserve equal protection. “Corporations are artificial entities,” he said. “Yet they are being afforded speech rights as if they were living, breathing, voting citizens.”
When the U.S. Supreme Court first recognized the free-speech rights of companies in 1976, it afforded commercial speech less protection than traditional speech. Companies have been fighting to tear down the two-tiered system ever since.
Privacy is expected to provide the next 1st Amendment battleground. Attempts to outlaw or restrict the sale of personal information and public records are being met by 1st Amendment challenges from information vendors, which say they have a right to communicate with their customers.
Pending bills that would ban unsolicited commercial e-mail or prohibit telemarketers from calling during the dinner hour would violate companies’ constitutional rights, said Jerry Cerasale, attorney for the Direct Marketing Assn.
Even the requirement that a Web site post its privacy policy is vulnerable to being struck down as a form of “compelled speech,” said UCLA law professor Eugene Volokh, who believes 1st Amendment protections should trump privacy rights.
If the government is allowed to restrict the spread of one kind of information, such as Social Security numbers or public records, it might be tempted to try to restrict another type of information, such as newspaper articles, Volokh said.
“The 1st Amendment is about stopping the government from restricting the content and flow of information,” he said.
That argument was pushed recently by credit bureau Trans Union Corp., information brokers and consumer database companies. They sued the Federal Trade Commission, saying their free-speech rights were violated by a proposed regulation that would restrict the sale of Social Security numbers and other data from credit reports.
The federal District Court in Washington rejected the claim, saying the government’s interest in protecting consumers’ privacy outweighed the companies’ 1st Amendment rights.
Last year, the U.S. Supreme Court took a different view by letting stand a U.S. 10th Circuit Court of Appeals ruling that struck down an FCC privacy rule on 1st Amendment grounds. The rule required telephone companies to get customers’ permission before using or selling their personal information for marketing purposes.
Despite such rulings, the legal challenges to corporations’ rights to free speech have frequently forced government agencies to back down from regulatory actions.
FCC Chairman Michael K. Powell has said his agency will need to reexamine the constitutionality of ownership caps in light of the Time Warner case. In Florida, county commissioners abandoned their efforts to force AT&T; to open its cable lines to rivals.
“It has greatly undercut the power of the government,” said former FCC Chairman Reed Hundt. “These decisions inhibit good policy and create delay. And at the end of the day, they defeat the very goal of the 1st Amendment by putting the free-speech rights of powerful companies ahead of the free-speech rights of everyone else.”
