Washington

Supreme Court Weighs Indecency Regulations

At stake: freedoms and fines, dollars and deals—and more than a million complaints 1/16/2012 12:01:00 AM Eastern

What the @#$%! Comes Next

The Supreme Court will likely decide the indecency regs challenge by late June, with several possible scenarios.

• The court could uphold the Second Circuit narrowly, either by a majority or by default with a split decision—only eight justices heard the case. That would be a decision that the rules, as applied to Fox and ABC, were unconstitutionally vague, rather than one finding the policy unconstitutional on its face. The FCC would then have to craft new indecency rules, which likely would be challenged again, eventually landing back with the Supreme Court, this time with all nine justices presumably able to weigh in.

• The court could overrule the Pacifica decision concluding that the television landscape had sufficiently changed with the advent of non-regulated competition, as broadcast lawyers had argued, though that was considered unlikely by court watchers last week.

• The Supremes could overrule the Second Circuit and uphold the FCC’s fleeting profanity and nudity enforcement, which would allow the commission to start acting on more than 1 million complaints in the pipeline.

Whatever the outcome, broadcasters have at least another six months of essentially no FCC action on indecency complaints—and no guarantee of regulatory certainty after that.
—JE

Broadcasters
and the government squared off last week over the constitutionality of the FCC's
indecency enforcement regime. It was the first time the High Court has agreed
to weigh in on the constitutionality of indecency regs for broadcasters since
George Carlin cursed his way into the regulatory record books in the Pacifica
case in 1978.

The high
court has already held that a ban on indecent cable speech is
unconstitutional-in the so-called Playboy case-and threw out an Internet
decency law, but broadcasters remain subject to FCC content calls in an age of
increasingly seamless video delivery over multiplatforms that the viewer will
be ever more hard-pressed to distinguish between.

At
stake is what local TV stations can say and show on the airwaves alongside
their unregulated digital competitors, as well as over $1 million in fines
against ABC stations, and station license renewals-some 300-plus by ABC's
lawyers' count-and station deals that have either been held up or conditioned
thanks to such complaints.

In
last week's oral argument, held beneath neoclassical friezes featuring naked
buttocks and breasts-a point ABC attorney Seth Waxman made to the Justices-the
court appeared both reluctant to cut broadcasters loose from the FCC's
indecency enforcement regime entirely, yet also suspicious of the kind of
content calls the commission was justifying. Among them: fining ABC stations
for seven seconds of partial nudity for NYPD
Blue
after previously finding over 40 seconds of nudity, including full
frontal, in Catch-22 to be not
indecent. Justice Ruth Bader Ginsburg said that had the appearance of
arbitrariness, while Justice Elena Kagan suggested that by the FCC's reckoning,
the only person who could swear was Stephen Speilberg, a reference to the pass
the FCC gave to the language in Saving
Private Ryan
.

At
issue are the Second Circuit Court of Appeals decision in cases involving
fleeting profanity on Fox awards shows, and scripted nudity-Charlotte Ross'
naked backside on former ABC drama NYPD
Blue
. Ironically, the Janet Jackson Super Bowl halftime reveal that is the
highest-profile FCC indecency call of all is not the subject of the review,
since the Third Circuit had not rendered a verdict when the Supreme Court
review was sought.

Whatever
the court decides will obviously have bearing on that latter case and its
$550,000 fine since it involved the FCC's decision to pursue "fleeting" nudity
after years of not doing so.

Justice
Sonia Sotomayor did not participate in the decision to hear the case, and won't
help decide it. She is a former Judge on the Second Circuit Court of appeals,
though she was not on the panels that decided either case.

Her
absence means that broadcasters only have to convince four justices, not five.
A split decision would leave the lower court decisions in place. Those
decisions were that the FCC's indecency finding against Fox stations' awards
show swearing and indecency fines for ABC stations for Charlotte Ross' naked backside
were unconstitutionally vague and chilling.

That,
however, would free the FCC to try to come up with new regs that were
constitutional, meaning the backlog of complaints would not necessarily be
cleared up. Ironically, the complaints will likely be addressed faster if the
broadcasters lose, since the FCC could proceed under the current standard.

Broadcasters
say they aren't looking for license to go wild on-air, and the National
Association of Broadcasters isn't even looking to get out from under indecency
regs. But given the rise of over-the-top video and the competition from cable
and satellite, broadcasters would benefit from having the chill taken off their
content.

In the
wake of the FCC crackdown on fleeting nudity in the Super Bowl reveal, for
example, NBC nixed a scene in an episode of ER
after some affiliates, particularly in the South, were concerned that it showed
a fleeting glimpse of a portion of the breast of an 80-year-old woman getting
emergency care. Some noncommercial stations deleted language from "Prime
Suspect" on Masterpiece Theater (and
were criticized by viewers) and even had to consider whether to edit out a nude
lithograph from Antiques Roadshow,
even though the show had aired months before with no complaint.

Andrew
Schwartzman, who represented TV writers, producers and directors supporting Fox
and ABC, said it was clear last week that the Justices had concerns about
getting rid of the FCC's safe harbor altogether and freeing broadcasters to be
as indecent as print or cable or the Internet. But the issue is not only about
First Amendment freedom, it is also about money and business.

One
broadcast executive with an interest in the outcome speaking on background last
week pointed to the station licenses that have not been granted pending
resolution of what is, by various accounts, well over a million indecency
complaints in the FCC pipeline, as well as the deals involving stations cited
in some of those indecency complaints that were conditioned on the buyer
waiving the five-year statute of limitations on those complaints.

"We
were told in the past, under the previous FCC administration, that if we did
not toll indefinitely the statute of limitations our deals would not get done,"
said the executive. "Even though the statute of limitations is five years, we
had to waive that indefinitely to get the deal done."

A
veteran broadcast attorney who has argued indecency cases agreed that there
have been bottom-line consequences beyond not being able to match cable cuss
for cuss. He said that some clients selling stations subject to pending
complaints have had to put a portion of the proceeds in escrow to cover a fine,
should one eventually be levied. 

"These
things make buyers nervous," he said, because what buyers like to get is
totally unencumbered assets. It comes out of the seller's hide, but any
encumbrance makes buyers and creditors skittish. The license will be granted,
but there's a cloud.

At
last week's oral argument, Justice Kennedy suggested that broadcasters were
arguing for the ability of celebs, or wannabe celebs, to curse on-air with impunity.

Both Schwartzman
and the veteran attorney say they are concerned the court could lose sight of
the fact that the rules affect the little guys. "It is too easy to conclude
that this is just about potty-mouthed celebs and ‘who cares,'" said the
attorney.

Schwartzman
agrees. "As awful as it is, a $375,000 fine is something that Viacom or Fox can
manage, unhappily. But these fines are bigger than the budgets at a lot of
these stations."

The
Supremes will likely decide the case by the end of June, but broadcasters may
still not get that vaunted regulatory certainty. "You could get a one-sentence
opinion from a 4-4 court affirming the second circuit," says Schwartzman.
"Then, presumably, the FCC would issue new guidelines and a new case will be
brought that Justice Sotomayor could participate in."

But
Schwartzman adds it is tough to predict just how the court will rule. "If ever
the ‘it depends' principle applies, it is on this one. It is an absolute black
hole for everybody involved."

E-mail comments to jeggerton@nbmedia.com
and follow him on Twitter: @eggerton

What the @#$%! Comes Next

The Supreme Court will likely decide the indecency regs challenge by late June, with several possible scenarios.

• The court could uphold the Second Circuit narrowly, either by a majority or by default with a split decision—only eight justices heard the case. That would be a decision that the rules, as applied to Fox and ABC, were unconstitutionally vague, rather than one finding the policy unconstitutional on its face. The FCC would then have to craft new indecency rules, which likely would be challenged again, eventually landing back with the Supreme Court, this time with all nine justices presumably able to weigh in.

• The court could overrule the Pacifica decision concluding that the television landscape had sufficiently changed with the advent of non-regulated competition, as broadcast lawyers had argued, though that was considered unlikely by court watchers last week.

• The Supremes could overrule the Second Circuit and uphold the FCC’s fleeting profanity and nudity enforcement, which would allow the commission to start acting on more than 1 million complaints in the pipeline.

Whatever the outcome, broadcasters have at least another six months of essentially no FCC action on indecency complaints—and no guarantee of regulatory certainty after that.
—JE

September
October