A Round "PEG" for a Round Hole: Advocating for the Town of Oyster Bay's Public Access Channel Restrictions

Werner, Thomas, Federal Communications Law Journal

I. INTRODUCTION

A new version of an old trend is rising in the advertising world. Often called "alternative" or "guerilla" marketing, the trend finds marketers giving expensive items from expensive product lines to trendsetting college students, potentially hot showbiz players, and young nightclub-goers with the understanding that each will use and talk up the products. (1) Further, drug companies frequently pay celebrities to tout pharmaceuticals during their public appearances. (2) Other examples include extensive product placements in movies and on television programs, and sponsorship of events and concerts. (3) Such alternative marketing only represents a tiny fraction of the $236 billion spent on advertising in America, but strong evidence shows that the money spent on these alternative marketing strategies is growing rapidly. (4)

The recent spike in the marriage of content and advertisements is a response to machines like TiVo, (5) which allow users to record many hours of television programming while skipping commercials. (6) Network executives fear that the use of such devices bodes very ill for future advertising revenues, from which networks draw a bulk of their profits. (7) Jamie Kellner, CEO of Turner Broadcasting System, spoke of his concerns at the Association of National Advertisers' 2002 national conference, stating that "the [television] business cannot exist as its current model is today unless consumers are willing to give time for [advertisements]." (8) Kellner further asserted his belief that "advertising has driven this country. Without advertising, we wall damage this country." (9)

These fears, echoed by other network executives, are powerful, but may be either premature (10) or altogether unwarranted. (11) Regardless, these same executives have time and time again adopted the alternative or guerilla marketing strategies outlined above. These activities have possible implications far beyond the executives' individual networks. The more advertisers fear that their messages will not reach the intended audience of television viewers, the more that advertisers will likely seek other outlets for these messages.

These other outlets could include forums with obvious dangers attached, such as a larger proliferation of overly distracting advertisements on highways, including on vehicles. Advertising on some alternative outlets could pose more subtle dangers. One of these possible dangerous alternative outlets is public access television, which receives little protection from corporate advertisers under the Cable Communications Policy Act of 1984 ("CCPA"). (12) Under the CCPA, municipalities are free to adopt their own protective contractual measures with cable operators in their cable franchise agreements. Many municipalities, including New York City, deny the right to place advertisements on airwaves reserved for public access. However, these contractual terms are not mandated by the CCPA. This lack of protection is striking since, as argued, infra, corporate advertising often negatively distorts media content. Corporate advertising on public access channels could have alarming implications for those wishing to utilize their only meaningful access to public airwaves.

This Note urges municipalities, cable franchisees, and courts to adopt the same protections afforded to the public by the Oyster Bay, New York, cable franchise agreement. Section II outlines the relevant provisions of the CCPA, the New York state regulations regarding cable franchise agreements, the Cable Franchise Agreement between the Oyster Bay, New York, and Cablevision Systems Corporation, and the recent Second Circuit Court of Appeals decision in Goldberg v. Cablevision Systems Corporation. Section III of this Note argues that corporate advertising has historically had several adverse effects on the content of television programming. Section IV further describes the recent upswing in guerilla marketing tactics. This Note concludes in Section V with an argument for municipalities, cable franchisees, and courts to structure and interpret statutes and cable franchise agreements so as to prohibit advertising on public access channels.

II. THE STATUTORY AND COMMON LAW FRAMEWORK OF CABLE FRANCHISE AGREEMENTS AND PEG CHANNELS

A. The Cable Communications Policy Act of 1984

The CCPA authorizes municipalities to enter into agreements with cable providers to set the ground rules for providing cable service for citizens of the municipality. (14) In these agreements, municipalities often impose conditions on cable operators wishing to utilize public rights-of way. (15) One such condition allowed for by the CCPA is that municipalities may establish certain channels to be set aside for public access, educational access, or governmental access. (16) Such public, educational, and governmental access channels are generally referred to as "PEG" channels. (17) The CCPA requires that if PEG channels are not being used by members of the community or the government, the cable franchise agreement shall set forth how those channels will be used by the cable provider, as well as any and all "rules and procedures under which such permitted use shall cease." (18) The most significant CCPA limitation on the establishment of PEG channels in cable franchise agreements is that "a cable operator shall not exercise any editorial control over any public, educational, or governmental use of channel capacity provided pursuant to this section." (19)

The CCPA sets forth one exception to this broad rule against cable operators' exercise of editorial control over the content of PEG channels, namely that "a cable operator may refuse to transmit any public access program or portion of a public access program which contains obscenity, indecency, or nudity." (20) In implementing the CCPA, the Federal Communications Commission ("FCC") requires public, educational, and governmental access programming mandated by the cable franchise agreement to be carried on the basic tier of cable, meaning that subscribers must receive PEG channels when they order the lowest-priced service available from the cable operator. (21)

In passing the CCPA, Congress recognized that "[o]ne of the greatest challenges over the years in establishing communications policy has been assuring access to the electronic media by people other than the licensees or owners of those media." (22) Congress further recognized the utility of cable in providing access to the airwaves to those who, up to that point, had not had the resources to obtain meaningful access to the airwaves. (23) To remedy this situation, the CCPA established public access channels as "the video equivalent of the speaker's soap box or the electronic parallel to the printed leaflet." (24) Public access channels were designed to provide access to electronic media to those groups who previously had little to no such access. (25) PEG channels were also to inform citizens of the actions of their local government. (26) The CCPA specifically encourages municipalities to guarantee in their cable franchise agreements that PEG channels would continue to serve these ends. (27)

In establishing the framework for carriage of PEG channels, Congress recognized previous First Amendment challenges brought by cable operators against access provisions. (28) Nonetheless, Congress believed that the CCPA's particular access provisions furthered the goals of the First Amendment by "establish[ing] a form of content-neutral structural regulation which will foster the availability of a 'diversity of viewpoints' to the listening audience." (29) Since the First Amendment is designed to ensure such diverse viewpoints, PEG channel requirements fit well within the Supreme Court's constitutional framework. (30) Congress concluded that "there can be no doubt that the purposes of access regulations serve a most significant and compelling governmental interest--promotion of the basic underlying values of the First Amendment itself." (31)

Under the CCPA, several hundreds of municipalities have implemented original cable franchise agreements and renewed existing cable franchise agreements. (32) In forming such an agreement, municipalities generally follow four steps:

   First, the authority assesses community needs and policy options
   through means such as consultant studies and special citizen task
   forces that hold extensive public hearings. Second, the franchising
   authority adopts a request for proposals (RFP) ... [which] describes
   the cable system and services that the community desires ... [and]
   outlines the information that the franchising authority seeks from
   applicants concerning their background, financial qualifications,
   proposed system design, construction plan, rates, and services.
   Third, after firms bid for the franchise, the franchising authority
   evaluates the bids.... Last, the authority selects an applicant and
   executes a franchise agreement incorporating the proposals submitted
   in the bid. Once the franchising authority and the chosen applicant
   negotiate this agreement, the franchising authority adopts an
   ordinance or resolution authorizing the agreement. Construction of
   the cable system then may begin. (33)

Throughout this process, as well as throughout the similar process for renewing existing franchise agreements, municipalities are free to place restrictions on the franchisors as outlined in the CCPA in exchange for permission to install above- and underground cable networks and to use public rights-of-way. (34) This system of cable franchising has been recognized and held valid by the United States Supreme Court, (35) as well as by several circuit courts of appeal. (36)

B. New York's Official Compilation of Codes, Rules and Regulations

A typical example of the restrictions placed into cable franchise agreements may be found in the Official Compilation of Codes, Rules and Regulations of the State of New York ("NYCRR"). The NYCRR states that certain conditions shall be imposed on proposed cable franchisors. (37) A cable franchise agreement would only meet the approval of the Commission on Cable Television if it contained, among other provisions, limitations on the term of the agreement, guarantees that the franchisor will not practice employment discrimination, and minimum channel capacity for the cable system. (38) The NYCRR further allows agreements to contain additional terms and conditions that are not inconsistent with all applicable laws. (39)

The NYCRR also sets forth the minimum PEG channel access standards that must be met in order to form a valid cable franchise agreement. Under the NYCRR, if the cable system contains at least twenty-one channels, that system must contain a minimum of one public access station and one station designated for educational and governmental use. (40) If the cable system carries less than twenty-one channels, the NYCRR requires it to carry only one PEG channel. (41) Finally, neither the cable television franchisee nor the municipality are to exercise any editorial control over the content of any PEG channel designated under this section. (42) The NYCRR defines a public access channel as "a channel designated for [noncommercial] use by the public on a first-come, first served, nondiscriminatory basis." (43)

C. Goldberg v. Cablevision Systems Corporation

Consistent with the NYCRR, the Town of Oyster Bay, New York, entered into a cable franchise …

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Publication information: Article title: A Round "PEG" for a Round Hole: Advocating for the Town of Oyster Bay's Public Access Channel Restrictions. Contributors: Werner, Thomas - Author. Journal title: Federal Communications Law Journal. Volume: 56. Issue: 1 Publication date: December 2003. Page number: 239+. © 1999 University of California at Los Angeles, School of Law. COPYRIGHT 2003 Gale Group.

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