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Home Box Office, Inc. v. FCC - 185 U.S. App. D.C. 142, 567 F.2d 9 (1977)


The Administrative Procedure Act sets out three procedural requirements: notice of the proposed rulemaking, an opportunity for interested persons to comment, and a concise general statement of the basis and purpose of the rules ultimately adopted. As interpreted by recent decisions of the court, these procedural requirements are intended to assist judicial review as well as to provide fair treatment for persons affected by a rule. To this end there must be an exchange of views, information, and criticism between interested persons and the agency.


Fifteen consolidated cases challenged four orders of the Federal Communications Commission (FCC) which, taken together, regulate and limit the program fare cablecasters and subscription broadcast television stations may offer to the public for a fee set on a per-program or per-channel basis. Acting under its rulemaking authority, the FCC in 1975 issued rules that prohibited pay exhibition of: (1) feature films more than three, but less than 10, years old; (2) specific sports events (e.g., the World Series) shown on broadcast television within the previous five years; (3) more than the minimum number of non-specific (i.e., regular season) sports events that had not been broadcast in any of the five preceding years, and in some cases only half that number; and (4) all series programs (i.e., programs with interconnected plot or substantially the same cast of principal characters). In addition, the FCC prohibited commercial advertising in conjunction with pay exhibition of programming and limited the overall number of hours of pay operation which could be devoted to sports and feature films to 90% of total pay operations. By subsequent orders in the same rulemaking, the series programming restriction was removed and recordkeeping requirements were imposed on feature film programming. The stated purpose of these rules was to prevent competitive bidding away of popular program material from the free television service to a service in which the audience would have to pay a fee to see the same material. Such competitive bidding, or "siphoning," is said to be possible because the money received from pay viewers is significantly more for some programs than money received from advertisers to attach their messages to the same material. For this reason, even a relatively small number of pay viewers could cause a program to be siphoned regardless of the wishes of a majority of its free viewers. 


Did the challenged regulations violate the First Amendment right to free expression?


No, for the most part.


The court upheld the challenged orders insofar as they related to subscription broadcast television and vacated the orders as arbitrary, capricious, and unauthorized by law in all other respects. The court held that regulations evincing a governmental interest unrelated to the suppression of free expression could have been upheld as valid if such regulations (1) furthered an important or substantial governmental interest and (2) if the incidental restriction on alleged First Amendment freedoms was no greater than was essential to the furtherance of that interest. In the present case, however, the court held that the regulations violated the First Amendment because they did not serve any important or substantial interest. Thus, the appellate court upheld the challenged orders insofar as they related to subscription broadcast television and vacated all other orders as being arbitrary, capricious, and unauthorized by law.

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