11-4138 (L) (CONSOLIDATED WITH NO. 11-5152) BRIEF FOR RESPONDENTS IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT TIME WARNER CABLE INC. AND NATIONAL CABLE & TELECOMMUNICATIONS ASSOCIATION, PETITIONERS, V. FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS. ON PETITION FOR REVIEW OF AN ORDER OF THE FEDERAL COMMUNICATIONS COMMISSION SEAN A. LEV ACTING GENERAL COUNSEL PETER KARANJIA DEPUTY GENERAL COUNSEL JACOB M. LEWIS ASSOCIATE GENERAL COUNSEL JAMES M. CARR COUNSEL JOSEPH F. WAYLAND ACTING ASSISTANT ATTORNEY GENERAL CATHERINE G. O’SULLIVAN NANCY C. GARRISON ATTORNEYS UNITED STATES DEPARTMENT OF JUSTICE WASHINGTON, D.C. 20530 FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 (202) 418-1762 i TABLE OF CONTENTS Table of Au thorities......................................................................................... iii Jurisdi c tion ........................................................................................................1 Introduc t i o n and Statemen t of Issues Presented ...............................................2 Statutes and Regulati ons ...................................................................................4 Counters t a t e me n t of the Case............................................................................4 Counters t a t e me n t of Facts .................................................................................5 A. The Program Carri age Statute ...............................................................5 B. The FCC’s Original Progr am Carriage Rules .......................................7 C. The Order On Re view ...........................................................................9 Summary of Argument ....................................................................................15 Standard of Review .........................................................................................19 Argument .........................................................................................................21 I. The Program Carriage Rules Are Consiste n t With The First Amendment ..............................................................................................21 A. The Rules Are Subject To Inter med i a t e Scrutiny. ..............................23 B. The Rules Satisfy Inte r me d i a t e Sc ruti n y. ............................................32 1. The Rules Advance Substanti a l Government Interests...................32 2. The Rules Do Not Burden Su bstanti a l l y More Speech Than Necessary To Achiev e Their Obje ctives. ..............................41 a. The Carriage Discrimi n at i o n Rule and Standsti l l Procedure.....................................................................................41 b. The Prima Facie Rule. ................................................................45 i i II. The Commissi o n Properl y Conclude d That It Has Authority To Issue Program Carriage Standsti l l Orders Governin g Cable Oper ators........................................................................................49 III. The Commissio n Complied With The APA When It Codified Its Sta ndsti l l Proce dure .............................................................56 A. The Commissi o n Acted Well W ithin Its Discreti o n In Codifyi n g Its Sta ndsti l l Proced ure. .....................................................56 B. The Commissio n Complied With The APA’s Notice Requireme nts. ......................................................................................60 Conclusion .......................................................................................................66 i i i TAB L E OF AUTH O R I T I E S CASES Adams v. Zenas Zelotes, Esq., 606 F.3d 34 (2d Cir. 2010)............................................................................................................21 Adelphia Commc’ns Corp. v. FCC, 88 F.3d 1250 (D.C. Cir. 1996)...........................................................................................52 Associated Press v. United States, 326 U.S. 1 (1945) ..........................................................................................................37 BellSouth Corp. v. FCC, 144 F.3d 58 (D.C. Cir. 1998) ............................................................................................................29 Bery v. City of New York, 97 F.3d 689 (2d Cir. 1996) ............................................................................................................26 Buckley v. Valeo, 424 U.S. 1 (1976) ...............................................................35 Cablevision Sys. Corp. v. FCC, 570 F.3d 83 (2d Cir. 2009)............................................................................................... 21, 25, 36 Cablevision Sys. Corp. v. FCC, 597 F.3d 1306 (D.C. Cir. 2010) ........................................................................ 24, 39, 40, 41 Cablevision Sys. Corp. v. FCC, 649 F.3d 695 (D.C. Cir. 2011)............................................................................................. passim Capital Tel. Co. v. FCC, 777 F.2d 868 (2d Cir. 1985) ............................................................................................................51 Cellular Phone Taskforce v. FCC, 205 F.3d 82 (2d Cir. 2000).....................................................................................................23 Chevron USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984) ............................................................................22 Citizens United v. FEC, 130 S. Ct. 876 (2010) ...............................................34 Comcast Corp. v. FCC, 526 F.3d 763 (D.C. Cir. 2008)............................................................................................................54 Comcast Corp. v. FCC, 579 F.3d 1 (D.C. Cir. 2009) ..................................... 44 Connecticut Dep’t of Pub. Util. Control v. FCC, 78 F.3d 842 (2d Ci r. 1996) ...............................................................................23 Dickerson v. Napolitano, 604 F.3d 732 (2d Cir. 2010)............................................................................................................24 i v Donovan v. Red Star Marine Servs., Inc., 739 F.2d 774 (2d Cir. 1984) .......................................................................................68 Freeman v. Burlington Broadcasters, Inc., 204 F.3d 311 (2d Cir. 2000) .......................................................................................22 Fulani v. FCC, 49 F.3d 904 (2d Cir. 1995).....................................................23 Gross v. FBL Fin. Servs., Inc., 557 U.S. 167 (2009) ......................................31 Hobbs v. County of Westchester, 397 F.3d 133 (2d Cir. 2005) ........................................................................................ 26, 27, 32 James V. Hurson Assocs., Inc. v. Glickman, 229 F.3d 277 (D.C. Ci r. 2000 ) ...........................................................................71 JEM Broadcasting Co. v. FCC, 22 F.3d 320 (D.C. Cir. 1994) .............................................................................................. 68, 71 Lamoille Valley R.R. Co. v. ICC, 711 F.2d 295 (D.C. Cir. 1983)...........................................................................................71 Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158 (2007) ............................................................................................ 71, 73 Merkos L’Inyonei Chinuch, Inc. v. Otsar Sifrei Lubavitch, Inc., 312 F.3d 94 (2d Cir. 2002)................................................49 Mt. Mansfield Television, Inc. v. FCC, 442 F.2d 470 (2d Cir. 19 71) ....................................................................................... 37, 72 National Black Media Coal. v. FCC, 822 F.2d 277 (2d Cir. 1987) ..............................................................................................72 National Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967 ( 2005)...........................................................22 New York State Comm’n on Cable Television v. FCC, 669 F.2d 58 (2d Cir. 1982) ................................................................ 23 Notaro v. Luther, 800 F.2d 290 (2d Cir. 1986) ( per curiam) ........................................................................................................68 Nuvio Corp. v. FCC, 473 F.3d 302 (D.C. Cir. 2006)......................................73 Regan v. Taxation with Representation of Washington, 461 U.S. 540 (1983) ...............................................................34 Reynolds Metals Co. v. FERC, 777 F.2d 760 (D.C. Cir. 1985) .....................................................................................................65 v Ruiz v. County of Rockland, 609 F.3d 486 (2d Cir. 2010)............................................................................................................31 State of New York Dep’t of Soc. Servs. v. Shalala, 21 F.3d 485 (2d Cir. 1994 ) ..........................................................................72 Stilwell v. Office of Thrift Supervision, 569 F.3d 514 (D.C. Cir. 2009)...........................................................................................67 TCR Sports Broad. Holding v. FCC, 2012 WL 1672264 (4th Cir. May 14, 2012)................................................................41 Tepperwien v. Entergy Nuclear Operations, Inc., 663 F.3d 556 (2d Cir. 2011) ........................................................................59 Time Warner Entm’t Co. v. FCC, 240 F.3d 1126 (D.C. Cir. 2001)...........................................................................................44 Time Warner Entm’t Co. v. FCC, 56 F.3d 151 (D.C. Cir. 1995) .....................................................................................................25 Time Warner Entm’t Co. v. FCC, 93 F.3d 957 (D.C. Cir. 1996)............................................................................................. passim Time Warner Entm’t Co. v. United States, 211 F.3d 1313 (D.C. Cir. 2000)........................................................................... 24, 33 Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622 (1994) .................................................................................................. passim Turner Broad. Sys., Inc. v. FCC, 520 U.S. 180 (1997) .................................................................................................. passim United States v. O’Brien, 391 U.S. 367 (1968)...............................................35 United States v. Southwestern Cable Co., 392 U.S. 157 (1968 ) ...................................................................................................69 Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2d Cir. 2001) ..............................................................................................27 Vermont Yankee Nuclear Power Corp. v. Natural Res. Def. Council, 435 U.S. 519 (1978) ......................................................70 Viacom Int’l Inc. v. FCC, 672 F.2d 1034 (2d Cir. 1982) ............................................................................................................67 Ward v. Rock Against Racism, 491 U.S. 781 (1 989) ................... 17, 26, 27, 46 v i WarnerVision Entm’t, Inc. v. Empire of Carolina, Inc., 101 F.3d 259 (2d Cir. 1996)................................................................ 61 Washington State Grange v. Washington State Republican Party, 552 U.S. 442 (2008) ................................... 21, 22, 24, 50 Williams v. Town of Greenburgh, 535 F.3d 71 (2d Cir. 2008).....................................................................................................53 Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) ................................................................................................... 12, 64 ADMI NISTRATI VE DECI SIONS Adelphia Commc’ns Corp., 21 FCC Rcd 8203 (2006) ..........................................................................................................51 Applications of Comcast Corp., Gen. Elec. Co. and NBC Universal, Inc., 26 FCC Rcd 4238 (2011) ............................ 37, 38, 40 Herring Broad., Inc. v. Time Warner Cable Inc., 23 FCC Rcd 14787 (Med. Bur. 2008) ....................................................... 48, 49 Implementation of Sections 12 and 19 of the Cable Television Consumer Protection and Competition Act of 1992, 9 FCC Rcd 2642 ( 1993)................................................... 7, 8, 9 TCR Sports Broad. Holding v. Time Warner Cable Inc., 25 FCC Rcd 18099 (2010), aff’d, TCR Sports Broad. Holding v. FCC, 2012 WL 1672264 (4th Cir. May 14, 2012)................................................................41 Tennis Channel, Inc. v. Comcast Cable Commc’ns, LLC, 25 FCC Rcd 14149 (Med. Bur. 2010) ......................................... 48, 49 Tennis Channel, Inc. v. Comcast Cable Commc’ns, LLC, FCC 12-50 (release d May 14, 2012)..................................................58 S T A T U T E S AND REGUL A T I O N S 5 U.S.C. § 553(b )(3)................................................................................. 60, 64 5 U.S.C. § 553(b)(A) .................................................................... 14, 19, 60, 61 5 U.S.C. § 706( 2)(A) .......................................................................................21 28 U.S.C. § 2342(1) ..........................................................................................2 47 U.S.C. § 154( i) .................................................................................... 50, 56 v i i 47 U.S.C. § 402(a).............................................................................................2 47 U.S.C. § 405 ...............................................................................................46 47 U.S.C. § 532 .......................................................................................... 6, 25 47 U.S.C. § 534 .................................................................................................6 47 U.S.C. § 536 ...................................................................................... 2, 6, 47 47 U.S.C. § 536(a)................................................................................... passim 47 U.S.C. § 536( a)(1) ......................................................................................52 47 U.S.C. § 536(a) (1)-(3) ........................................................................... 6, 18 47 U.S.C. § 536( a)(2) ......................................................................................52 47 U.S.C. § 536(a)(3) .............................................................................. passim 47 U.S.C. § 536( a)(4) ........................................................................................7 47 U.S.C. § 536( a)(5) ........................................................................................7 47 U.S.C. § 544(f)(1) ......................................................................... 14, 50, 55 47 U.S.C. § 548 .................................................................................................6 47 C.F.R. §§ 1.43-1.45 ....................................................................................58 47 C.F.R. § 1.45(d)..........................................................................................61 47 C.F.R. § 1.298 ............................................................................................58 47 C.F.R. § 1.298(a) ........................................................................................61 47 C.F.R. § 76. 7(e)(1) .....................................................................................61 47 C.F.R. § 76.10(a) ........................................................................................58 47 C.F.R. § 76. 10(a)(2) ...................................................................................58 47 C.F.R. § 76.1301(c) ............................................................................ passim 47 C.F.R. § 76.1302(d)....................................................................................11 47 C.F.R. § 76.130 2(d)(3)(iii)(B)( 2)(i) ...........................................................27 Cable Televisi o n Consumer Protecti o n and Competi t i o n Act of 1992, Pu b. L. No. 102-385, 106 Stat. 1460................................................................................................2 1992 Cable Act, § 2(a)(4 )..................................................................................5 1992 Cable Act, § 2(a )(5)........................................................................ passim v i i i OTHER MATERI ALS H.R. Rep. No. 102-6 28 (1992) ................................................................. 28, 34 S. Rep. No. 102-92 ( 1991) ...................................................................... passim IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT NO. 11-4138 (CONSOLIDATED WITH NO. 11- 5152) TIME WARNER CABLE INC. AND NATIONAL CABLE & TELECOMMUNICATIONS ASSOCIATION, PETITIONERS, V. FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS. ON PETITION FOR REVIEW OF AN ORDER OF THE FEDERAL COMMUNICATIONS COMMISSION BRIEF FOR RESPONDENTS J U R I S D I CT I O N The order on revie w — Revision of the Commission’s Program Carriage Rules, 26 FCC Rcd 11494 (2011) (JA____) (“ Order ”)—was publis h e d in the Federal Register on Septemb e r 29, 2011. 76 Fed. Reg. 60,652 (2011). Time Warner Cable Inc. (“TWC”) filed a timel y petit i o n for revie w in this Court on Octobe r 11, 2011. The National Cable & Teleco mmu n i c a t i o n s Associat i o n (“NCTA”) filed a timely petit i o n for review in the United States Court of Appeals fo r the District of Columbia Circuit on 2 November 7, 2011. That case was subs e q u e n t l y tran s f e r r e d to this Court, which has jurisd i c t i o n to review the Order u n d e r 47 U.S.C. § 402(a) and 28 U.S.C. § 2342(1). I N T R O D U C T I O N AND STATEM E N T OF ISSUES PRES ENT E D In the Cable Television Consumer Protect i o n and Competi t i o n Act of 1992, Pub. L. No. 102-385, 106 St at. 1460 (“1992 Cable Act”), Congress enact e d a series of inter-relate d provi s i o n s desig n e d to promo t e comp e t i t i o n and diver s i t y among progr a m m i n g netwo r k s in the pay-TV market. One of those provi s i o n s, Section 616 of th e Communic a t i o n s Act of 1934, 47 U.S.C. § 536, require s the Federal Communi c a t i o n s Commissi o n (“FCC” or “Commiss i o n ”) to promu l g a t e rules desig n e d to preve n t a “multi c h a n n e l video progr a m mi n g distr i b u t o r ” or “M VPD”—for example, a cable oper ato r (like Comcast) or direct broadc a s t satel l i t e provi d e r (like DIRECTV)—from engag i n g in certa i n antic o mp e t i t i v e act s conce r n i n g the MVPD’s carria g e of video progr a m mi n g. As relevan t here, Section 616 speci fi e s that the FCC’s rules must preve n t MVPDs from discr i mi n a t i n g again s t “prog r a m mi n g vendo r s ” ( i.e., progra m m i n g netwo r k s) “in the selec t i o n, terms, or condi ti o n s for carri a g e ” of progr a m m i n g “on the basis of” the progr a m mi n g vendo r’s “affi l i a t i o n or nonaf f i li a t i o n ” with the MVPD if su ch discr i mi n a t i o n would “unre a s o n a b l y 3 restrain the abilit y ” of an unaffi l i a t e d progr a m mi n g vendo r “to comp e t e fairl y.” 47 U.S.C. § 536(a)(3). As direct e d by Congress, the FCC adopte d rules imple me n t i n g Section 616. Those rules allow a progr a m mi n g ne two r k that is unaff i li a t e d with an MVPD (e.g., the NFL Network) to file with the agency a co mplai n t allegi n g that an MVPD has engage d in affil i a t i o n-based discr i mi n a t i o n again s t the netwo r k. For examp l e, the unaff i l i a t e d netwo r k may allege that a cable opera t o r refus e d to carry the netwo r k on its cable syste ms (while carry i n g a co mp et i n g affili a t e d networ k) or that the cable operat o r grante d prefer e n t i a l treat m e n t to its affili a t e d netwo r k a nd carri e d the co mp l a i n a n t netwo r k on less favor a b l e terms. This cas e presen t s the follow i n g issues for review : (1) Whether the FCC’s program carri a g e rules, which provi d e for case-by-case adjud i c a t i o n of comp l a i n t s under Section 616, regulat e MVPDs’ conduct in a manner consis t e n t with the First Amendmen t. (2) Whether the Commissi o n perm i s s i b l y concl u d e d that it has autho r i t y to issue “stan d s t i l l ” order s requi r i n g a cable opera t o r to conti n u e carry i n g a vendo r’s progr a m mi n g under the terms of an exist i n g contr a c t while the Commissi o n consi d er s the ve ndo r’s progr a m carri a g e comp l a i n t. 4 (3) Whether the Commission co mp l i e d with the Administ r a t i v e Procedu r e Act (“APA”) when it codif i e d its proce d u r e for consi d e r i n g reques t s for progra m ca rri a g e stand s t i l l order s. S TATU T E S AND REGUL AT I O N S Pertinen t statu t e s and regul a t i o n s are set forth in an adden d u m to this brief. C O U N T E R S TAT E M E N T OF THE CASE More than a decade after adopt i n g its program carria g e rules, the FCC conclud e d that the rules were not effect i v e l y achiev i n g the statut e’s comp e t i t i o n-enhan c i n g objec t i v e s. C onseque n t l y, in 2011, the Commissi o n revis e d its rules by, inter alia, (a) clarif y i n g the evide n t i a r y requi r e men t s for establi s h i n g a prima facie c a s e of program carriag e discr i mi n a t i o n, and (b) codifyi n g the agen cy’s proced u r e for granti n g a progra m carria g e comp l a i n a n t an inter i m stay (or “stan d s t il l”) preser v i n g the status quo while a co mp la i n t is pendi n g befor e the agenc y. Order ¶ ¶ 9-30 (JA____-____). Petition e r s ask the Court to inva l i d a t e the FCC’s progra m carri a g e rules — a n d, “if neces s a r y ” (TW Br. 24 n.10), the under l y in g statu t e — o n const i t u t i o n a l, statut o r y, and admini s t r a t i v e-law ground s. 5 C O U N T E R S TAT E M E N T OF FACT S A. The Program Carriage Statute By the ear ly 1990s, the cable tele v i s i o n indu s t r y had grow n “hig h l y conce n t r a t e d.” 1992 Cable Act, § 2(a )(4). Congress becam e conce r n e d that “such conce n t r a t i o n ” could reduc e “the numbe r of media voic e s avai l a b l e to consu me r s ” by creat i n g “barr i e r s to entry for new progra m m e r s.” Id. This threat to co mp et i t i o n in th e video progr a m m i n g and distr i b u t i o n marke t s was “exac e r b a t e d by the incr eas ed vertical integration” ( i.e., c o m m o n owner s h i p) of produc e r s and distr i b u t o r s of cable pr ogramm i n g. S. Rep. No. 102-92, at 24 (1991) (“Se nate Report”). Congress found that vertic a l integ r a t i o n gives cable opera t o r s “the incen t i v e and abili t y to favor their affil i a t e d progr a m m e r s ” and “[to] ma ke it more diffi c u l t for nonca b l e- affili a t e d progr a m m e r s to secur e carri a g e on cable systems.” 1992 Cable Act, § 2(a)(5). For exampl e, a vertic a l l y in tegr a t e d cable operat o r “might give its affil i a t e d progr a m m e r a more desir a b l e ch ann e l posit i o n than anothe r progra m m e r, or even refuse to carry other progr a m m e r s.” Senate Report at 25. By engagi n g in this sort of discr i mi n a t i o n, a cable opera t o r could give its affil i a t e d progr a m m e r an unfai r a dvan t a g e over co mpe t i n g unaff i l i a t e d progr a m m e r s in terms of attra c t i n g vi ewe r s and advert i s i n g reven u e s. 6 To guard agains t the potent i a l l y antico mp et i t i v e effect s of vertic a l integ r a t i o n, Congress added Section 61 6 to the Communic a t i o n s Act when it adopte d the 1992 Cable Act. See 47 U.S.C. § 536. 1 Section 616 directs the FCC to “estab l i s h regul a t i o n s gover n i n g progr a m carri a g e agree m e n t s and relat e d pract i c e s betwe e n cable opera t o r s or other [MVPDs] and video progra m m i n g vendor s.” Id. § 536(a). The statute requ i r e s the Commiss i o n to adopt rules “desi g n ed to preve n t ” or “proh i b i t ” any MVPD from: (1) “requi r i n g a finan c i a l inter e s t ” in a progr a m servi c e as a condit i o n of carri a g e ; (2) “coerc i n g ” a progr a m mi n g vendo r to provid e “exclu s i v e rights ” agains t other MVPDs as a conditi o n of carri a g e (or “reta l i a t i n g agai n s t” a vendo r for faili n g to do so); and (3) “discr i mi n a t i n g ” in the selec t i o n, terms, or condit i o n s of carria g e “on the basis of affil i a t i o n or nonaf f i l i a t i o n ” of progra m m i n g vendor s if the effect of such discr i mi n a t i o n is “to unrea s o n a b l y restra i n ” the abilit y of an unaffi l i a t e d vendo r “to comp e t e fairl y.” Id. § 536(a)(1)-(3). 1 The 1992 Cable Act contai n e d comp a n i o n provis i o n s that likew i s e promo t e comp e t i t i o n and diver s i t y in the video distr i b u t i o n marke t, inclu d i n g “must-carry ” provi s io n s that requi r e mo st cable opera t o r s to carry local comme r c i a l broad c a s t telev i s i o n stati o n s, see 47 U.S.C. § 534; “progr a m acces s ” provi s i o n s desig n e d to limit the ab ilit y of vertic a l l y integr a t e d cable opera t o r s to withh o l d progr a m mi n g fro m their compe t i t o r s in the MVPD market, see id. § 548; and “leas e d acces s ” provi s i o n s that requi r e cable opera t o r s to lease chann e l space to unaff iliated netwo r ks at regulated rates, see id. § 532. 7 The discr i mi n a t i o n provi s i o n, which is the princi p a l focus of this case, may, for examp l e, addre s s the situ a t i o n where an unaff i l i a t e d netwo r k co mp la i n s that an MVPD rejected its reque s t for carri a g e in an effor t to shiel d the MVPD’s own affil i a t e d netwo r k s fro m co mp et i t i o n (out of concer n that the affili a t e s’ advert i s i n g reven u e s may suffe r if viewe r s inste a d decid e to watch the unaff i l i a t e d networ k). That con duc t would violat e the statut e if (a) the MVPD is found to have refus e d carri a g e becau s e of the netwo r k’s unaff i l i a t e d statu s, and (b) the discr i mi n a t o r y refus al to carry had the effec t of unrea s o n a b l y restr a i n i n g the unaff i l i a t e d netwo r k’s abili t y to comp e t e fairl y. The statut e require s the Commission to “provid e for expedi t e d revie w of any comp l a i n t s made by a video progr a m mi n g vendo r ” under Section 616. 47 U.S.C. § 536(a)(4). The Commissi o n al so must “provi d e for approp r i a t e penal t i e s and remed i e s for viola t i o n s ” of the statute, “includ i n g carria g e.” Id. § 536(a)(5). B. T h e FCC’s Origin a l Progra m Carria g e Rules The Commissi o n first adopt e d rules to imple me n t Section 616 in 1993. Implementation of Sections 12 and 19 of the Cable Television Consumer Protection and Competition Act of 1992, 9 FCC Rcd 2642 (1993) (“ 1993 Order ”). 8 In adoptin g those rules, the agency empha s i z e d that it would evalu a t e each indiv i d u a l progr a m carri a g e comp l a i n t on the basis of “the speci f i c facts pertai n i n g to each negoti a t i o n, and the manner in which certai n rights were obtai n e d, in order to deter mi n e wheth e r a violat i o n has, in fact, occurr e d.” 1993 Order, 9 FCC Rcd a t 2648 ¶ 14. The Commis si o n expla in e d that by “focus [ i n g ] on the specif i c facts ” of each negot i a t i o n, it could remed y viola t i o n s of Section 616 “witho u t unduly interfe r i n g with legitim a t e negot i a t i n g pract i c e s betwe e n [M VPDs] and progr a m m i n g vendo r s.” Id. at 2643 ¶ 1. The Commissi o n also adopt e d pro ce d u r a l rules to gover n progr a m carri a g e comp l a i n t s. Under th ose rule s, a progra m mi n g vendo r that files a co mp la i n t with the agency bears th e burde n of proof “to estab l i s h a prima facie s h o w i n g that the defen d a n t [MVPD] has engag e d in behav i o r that is prohib i t e d ” by Section 616. 1993 Order, 9 FCC Rcd at 2654 ¶ 29. The comp la i n a n t may not rely on bare a lleg at i o n s ; the comp l a i n t “mus t be suppo r t e d by docum e n t a r y evide n c e ” (inc lud i n g, for examp l e, affid a v i t s). Id. If the FCC’s Media Bureau conclu d e s th at the co mplai n a n t has not mad e a prima facie s h o w i n g base d on the comp l a i n t (and any supp o r t in g docume n t a t i o n), the co mp la i n t will be dismis s e d. Id. a t 2655 ¶ 31. In this 9 respect, the prima facie case requ i r e men t perf o r ms a scree n i n g func t i o n akin to a pre-trial dispo s i t i v e motio n in feder a l court. If the Media Bureau finds that the co mp lai n a n t has made a prima facie case, it mu st deter mi n e whether it can gr ant relie f on the basis of the exist i n g record ( i.e., t h e comp l a i n t and any suppo r ti n g docum e n t s, the defen d a n t’s answer, and the co mplai n a n t’s reply). If the Bureau concl u d e s that the recor d is insuff i c i e n t to resolv e the co mp la i n t, it can eithe r outli n e proced u r e s for discov e r y or refer the matter to an admini s t r a t i v e law judge (“ALJ”) for a hearin g. 1993 Order, 9 FCC Rcd at 2655 ¶ 31. The Commissi o n under s c o r e d that it w ould “dete r m i n e the appro p r i a t e relie f for progr a m carri a g e viola t i o n s on a case-by-case basis.” 1993 Order, 9 FCC Rcd at 2653 ¶ 26. “Available remed i e s and sancti o n s inclu d e forfei t u r e s, mandato r y carria g e, or ca rr i a g e on terms revi s e d or spec i f i e d by the Commission.” Id. C. The Order On Review Almost twenty years after the FC C promulg a t e d its progr a m carri a g e rules, very few parti e s had filed comp l a i n t s. As of August 2011 (when the Commiss i o n relea s e d the order on revi ew), only “[e]le v e n progra m carria g e co mplaints [had ] been filed in the a pprox i m a t e l y two decad e s since Congress passe d Section 616.” Order n.27 (JA____). This pauci t y of comp l a i n t s did 10 not simp l y refle c t an absen c e of affil i a t i o n-based discr i mi n a t i o n. Programm i n g vendo r s comp l a i n e d that “the Commiss i o n’s proce d u r e s for addre s s i n g progr a m carri a g e comp l a i n t s [had ] hind e r e d the filin g of legitimate co mp laints and [had ] failed to provi d e for the exped i t e d revie w envisi o n e d by Congress.” Order ¶ 1 (JA____). To addres s these probl e ms, the Commissi on issued a notice of propo s e d rulemak i n g in June 2007, seekin g comme n t on “whet h e r and how [the FCC’s] proce s s e s for resol v i n g ca rria g e dispu t e s shoul d be modif i e d.” Leased Commercial Access, 22 FCC Rcd 11222, 11 227 ¶ 14 (2007) (JA____, ____) (“ NPRM ”). After revie w i n g comm e n t s fro m vario u s inter e s t e d parti e s, includ i n g both cable opera t o r s a nd unaf f i li a t e d prog r a m mi n g vend o r s ( see Order, Appx. A (JA____)), th e Commissi o n concl u d e d that its curre n t progr a m carri a g e proce d u r e s we re “in need of reform.” Order ¶ 8 (JA____). Accordin g l y, in 2011, the agenc y took sever a l “init i a l steps to impro v e ” its proced u r e s. Id. (JA____). 2 Among other thin g s, the Commiss i o n clari f i e d the evide n t i a r y requi r e m e n t s for establ i s h i n g a prima facie c a s e of a progra m carria g e 2 The Commissi o n simu l t a n e o u s l y comme n c e d a new rulem a k i n g proce e d i n g in which it propo s e d furth e r revis i o n s to its progra m carri a g e rules. Order ¶ ¶ 3, 37-81 (JA____-____, _ ___-____). That procee d i n g remai n s pendi n g. 11 violati o n. Order ¶ ¶ 10-17 (JA____-____); 47 C.F.R. § 76.1302(d). It also imposed deadli n e s on FCC staff to e xpedit e the reso lut i o n of carriag e co mp laints. Order ¶ ¶ 19-24 (JA____-____). In additio n, the agency codifi e d its proced u r e “for the Media Bureau’s consi d e r a t i o n of reque s t s for a tempo r a r y stand s t i l l of the price, terms, and other condi t i o n s of an exist i n g progr a m m i n g contr ac t by a progra m carri a g e co mp l a i n a n t seeki n g renew a l of such a contrac t.” Order ¶ 25 (JA____). While noting that progra m carria g e co mpl a i n a n t s alrea d y could seek and obtain stand s t i l l order s ( i.e., an inter i m stay pend i n g admin i s t r a t i v e revi e w) under existi n g FCC practice, the Co mmissi o n expla i n e d that “codi f y i n g unifo r m proce d u r e s will help to e xped i t e actio n on stand s t i l l reque s t s and provid e guida n c e to comp lai n a n t s and MVPDs.” Order ¶ 26 (JA____). The Commissi o n observ e d that a stands t i l l, if grante d, would “prese r v e the status quo b y requi r i n g conti n u e d carri a g e of a networ k ” that the defen d a n t MVPD has alrea d y chose n to carry “at the time the stands t i l l is granted.” Order n.109 (JA____). Applying the same standa r d that courts use to grant preli mi n a r y injun c t i v e relie f, th e agenc y speci f i e d that an appli c a n t for a stand s t i l l order must show that: (i) it is likel y to preva i l on the merit s of its comp l a i n t ; (ii) it will suffe r irrep a r a b l e harm absent a stay; (iii) grant of a stay will not substa n t i a l l y harm other intere s t e d par ti e s ; and (iv) the public 12 interes t favor s grant of a stay. Order ¶ 27 (JA____-____). The Commiss i o n empha s i z e d that “inju n c t i v e relie f [is] an extra o r d i n a r y remed y that may only be awarde d upon a clear showi n g that the plaint i f f is entitl e d to such relief.” Order n.110 (JA____) (quotin g Winter v. Natural Res. Def. Council, 555 U.S. 7, 22 (2008)). Where the Media Bureau det ermin es that a tempo r a r y stand s t i l l is justi f i e d, it “may limi t the lengt h of the stand s t i l l to a de fin e d peri o d or may specif y that the stands t i l l will contin u e until the adjudi c a t o r ” — i.e., e i t h e r the Media Bureau or an ALJ—“resol v e s the underl y i n g progra m carria g e co mp laint.” Order ¶ 27 (JA____). “The adjud i c a t o r may lift the tempo r a r y stand s t i l l to the extent that it finds that the stay is having a negati v e effect on settl e men t negot i a t i o n s or is otherw i s e no longer in the public intere s t.” Id. Once the adjudi c a t o r rules on the merits of the co mp la i n t, it “will apply the terms of the new agree m e n t betwe e n the pa rti e s, if any, as of the expir a t i o n date of the previ o u s agree m e n t.” Order ¶ 28 (JA____). The Commissi o n reject e d the cable indus t r y’s claims that the progr a m carria g e ru les violat e the First Amend ment. Order ¶ 31 (JA____). First, the agenc y found that the rule s are “subjec t to interme d i a t e scrut i n y ” becau s e they regula t e economi c activi t y “based on affil i a t i o n with an MVPD, not based on … conten t.” Order ¶ 32 (JA____-____) (citin g Time Warner 13 Entm’t Co. v. FCC, 93 F.3d 957, 969 (D.C. Cir. 1996 )). Second, the agency concl u d e d that the rules satis f y inter m e d i a t e scruti n y becaus e they advanc e two subst a n t i a l gover n m e n t inter e s t s — “ p r o mo t i n g dive r s i t y and comp e t i t i o n in the video progra m mi n g market ” ( Order ¶ 32 (JA___))—and “bur d e n no more speec h than neces s a r y ” to preve n t the condu c t that Section 616 proscr i b e s. Id. ¶ 34 (JA____). TWC contend e d that Congress’s jus ti f i c a t i o n for the progr a m carri a g e rules “no longe r exist s today.” Order ¶ 33 (JA____). It based that claim on nation a l data docume n t i n g a decrea s e in vertic a l integ r a t i o n and an increa s e in progr a m m i n g netwo r k s, chann e l capac i t y, and comp e t i t i o n among MVPDs since Congress passe d the 1992 Cable Ac t. TWC Comments at 7-10 (JA___- ___). But the Commissi o n expla i n e d that the “natio n w i d e figur e s ” cited by TWC “do not under mi n e Congres s’s find i n g that cable opera t o r s and other MVPDs have the in cent i v e and abilit y to favor their affil i a t e d progr a m m i n g vendo r s in individual cases, with the potent i a l to unreas o n a b l y restr a i n the abili t y of an unaff i l i at e d progr am m i n g vendo r to comp e t e fairl y.” Order ¶ 33 (JA____-____) (emphasi s added). The ag ency specif i c a l l y noted that “the number of cable-affili a t e d networ k s recen t l y incre a s e d signi f i can t l y ” after the merger bet wee n Comcast (the largest MVPD in the nation) and NBC 14 Universal. This “highl i g h t [ e d ] the c onti n u e d need for an effec t i v e progr am carriag e complai n t regi me.” Id. (JA____). In additi o n, the Commissi o n reject e d the sugge s t io n that Section 624(f)(1) of the Communic a t i o n s Act, 47 U.S.C. § 544(f)(1), preclu d e s the agenc y from issui n g inter i m stand s t i l l order s. Order n.107 (JA____). The agency acknow l e d g e d that Secti on 624(f)(1) bars the Commiss i o n from impos i n g “requ i r e m e n t s regar d i n g the pr ovi s io n or conte n t of cable servi c e s, except as expre s s l y provi d e d in [Title VI of the Act].” Id. (quotin g 47 U.S.C. § 544(f)(1)). The Commissi o n expla i n e d, howeve r, that stands t i l l orders fall withi n the excep t i o n to this prohi b i t io n. “Section 616(a) expres s l y direc t s the Commiss i o n to ‘esta b l i s h regula t i o n s govern i n g progra m carria g e agreem e n t s and related practic e s.’” Id. (quotin g 47 U.S.C. § 536(a)). Finally, the Commissio n reject e d th e arg u me n t that the APA required the agency to issue anothe r rulema k i n g notic e befor e it could codif y its proce d u r e for obtai n in g stand s t il l relie f. See Order ¶ 36 & n.146 (JA____). The Commission noted that the APA e xpres s l y exemp t s “rule s of agenc y proced u r e ” from its notice requir e m e n t s. Order ¶ 36 (JA____ -____) (citing 5 U.S.C. § 553(b)(A)). It reason e d th at this exemp t i o n appli e d to the stands t i l l rule, which merely co difi e d existi n g agency proced u r e. The Commissi o n furthe r deter mi n e d that th e public receiv e d adeq ua t e notice of 15 the stands t i l l rule in any event. Order ¶ 36 (JA____) (citin g NPRM ¶ 16 (JA____)). S U M M A RY OF ARGUM E N T In enacti n g legis l a t i o n to protec t co mp e t i t i o n and promo t e diver s i t y of voice s in the video distr i b u t i o n and progr am m i n g marke t s, Congress found that the commo n owner s h i p of cable syst e ms and prog r a m mi n g netw o r k s gives cable operat o r s “the incent i v e and abili t y to favor their affil i a t e d progr a m m e r s ” and to “make it more diffi c u l t for nonca b l e-affili a t e d progr a m m e r s to secur e carri a g e on cable systems.” 1992 Cable Act, § 2(a)(5). As direct e d by Congress, th e FCC has estab l i s h e d rules to ensur e that vertic a l l y integ r a t e d MVPDs do not act on their incen t i v e and abili t y to discr i mi n a t e “on the basis of affil i a t i o n or nonaff i l i at i o n ” in a manner that “unrea s o n a b l y restr a i n [ s ]” an unaff i l i a t e d progr a m m i n g vendo r’s abilit y to “compe t e fairl y.” 47 C. F.R. § 76.1301(c); 47 U.S.C. § 536(a)(3). In this procee d i n g, the Commissio n proper l y de ter mi n e d that conce r n s about co mp e t i t i o n persi s t and that the agency’s progra m carri a g e rules co mpo r t with the First Amend men t. It also correc t l y concl u d e d that its stands t i l l proce d u r e is autho r i ze d by statu t e and co mplies wit h the APA. I. The challeng e d rules ar e subject to inter m e d i a t e (not stric t) First Amendment scruti n y becaus e they are conte n t-neutr a l. The rules do not 16 regulat e speech “becau s e of [agr ee m e n t or] disagr e e m e n t with the messag e it convey s.” Turner Broad. Sys., Inc. v. FCC, 512 U.S. 622, 642 (1994) (“ Turner I ”) (quotin g Ward v. Rock Against Racism, 491 U.S. 781, 791 (1989)). Rather, they “regul a t [ e ] cable progr a m m e r s and opera t o r s on the basis of the ‘econ o m i c s of owner s h i p, ’ a charact e r i s t i c unrela t e d to the conten t of speech.” Time Warner, 93 F.3d at 977. Under interm e d i a t e scruti n y, a c onte n t-neutr a l regula t i o n must be uphel d if it: (1) “advan c e s impor t a n t govern m e n t a l intere s t s unrela t e d to the suppre s s i o n of free speech ” ; an d (2) “does not burden substa n t i a l l y more speech than necessa r y to fu rther those interest s.” Turner Broad. Sys., Inc. v. FCC, 520 U.S. 180, 189 (1997) (“ Turner II ”). The program carria g e rules satis f y both parts of that test. The rules advan c e two impor t a n t gover n m e n t inter e s t s : promo t i n g comp e t i t i o n and “assu r i n g that the publi c has acces s to a multi p l i c i t y of infor ma t i o n sourc e s.” Turner I, 512 U.S. at 663. Petition e r s mainta i n that the rules are obsole t e becaus e cable ope ra t o r s no longe r hold a “bottl e n e c k ” monop o l y. But Congress’s conce r n s in enact i n g the 1992 Cable Act were not limit e d to addre s s i n g such “bottl e n e c k ” market power. Rat her, Congres s was also concer n e d that vertic a l l y inte g r a t e d MVPDs hav e the “incen t i v e and abilit y ” to favor affil i a t e d over una ffi l i a t e d netwo r k s. 1992 Cable Act, 17 § 2(a)(5). In any event, petiti o n e r s are wrong in sugge s t i n g that cable opera t o r s no longe r have signi f i c a n t marke t power. As the D.C. Circuit recent l y recog n i z e d, the “clust e r i n g and c onsol i d a t i o n ” of cab le systems have “bolster[ed] the mar k et power of cable operat o r s, ” and some local markets remai n “‘hig h l y susce p t i b l e to near-m onopo l y contr o l by a cable comp a n y.’” Cablevision Sys. Corp. v. FCC, 649 F.3d 695, 712 (D.C. Cir. 2011) (citati o n omitt e d). The program carria g e rules do not burden substant i a l l y more speech than neces sar y to promot e the gove rn m e n t’s intere s t s. The Commissio n ordin a r i l y will not requir e an MV PD to carry progra m mi n g unles s a comp l a i n a n t prove s that the MVPD has viola t e d Section 616. While the Commissi o n may issue a stands t i l l order tempo r a r i l y requi r i n g an MVPD to contin u e carry i n g a networ k it alrea d y has chose n to carry (during the penden c y of the progra m carria g e disput e) , such an order is issue d only in extra o r d i n a r y circu m s t a n c e s and only upon proof of, inter alia, likeli h o o d of succes s on the merits and irrepa r a b l e ha rm to the co mp la i n a n t. Thus, the stand s t i l l proce d u r e, like the under l y i n g carri a g e discr i mi n a t i o n provi s i o n, is narrow l y tailo r e d to addres s only a ffil i a t i o n-based discr i mi n a t i o n that “unre a s o n a b l y restr a i n [ s ] the abili t y of an unaff i l i at e d video progr a m m i n g vendo r to comp e t e fairl y.” 47 C.F.R. § 76.1301(c); see also 47 U.S.C. 18 § 536(a)(3). These rules “spec i f i c a l l y target ” antico mp e t i t i v e activi t i e s “wher e the govern me n t inter e s t is greate s t.” Cablevision, 649 F.3d at 712. II. The Commissio n also correctl y concl u d e d that it has autho r i t y to issue progr a m carri a g e stand s t i l l order s . Section 616 express l y direc t s the FCC to estab l i s h rules “desi g n ed to preven t ” or “prohi b i t ” MVPDs— includ i n g cable opera t o r s — f r o m adopt i n g specif i e d practi c e s that advers e l y affect co mpeti t i o n. See 47 U.S.C. § 536(a)(1)-(3). The stands t i l l rule falls withi n that expre s s grant of rulem a k i n g autho r i t y. Program carri a g e stand s t i l l order s are design e d to preven t MVPD s from takin g actio n s that viola t e Section 616. III. Finally, the Commissi o n comp l i e d with the APA when it codifi e d the standa r d s for granti n g inter i m st and s t i l l relie f. Pe titio n e r s’ contr a r y clai ms lack merit. Petition e r s claim that the stands t i l l rule is arbit r a r y and capri c i o u s becaus e its costs purpor t e d l y outw ei g h its benefi t s. The Commissio n reaso n a b l y found other w i s e. In appl yi n g the stand s t i l l rule, the Commissi o n follo w s the same appro a c h used by cour ts when co nside r i n g stay request s. Among other thing s, the Commiss i o n consi d e r s wheth e r “gran t of a stay will … substa n t i a l l y harm other inter e s t e d parti e s ” and wh ethe r “the public inter e s t favor s grant of a stay.” Order ¶ 27 (JA___). Thus, the costs of 19 granti n g stand s t i l l relie f in any parti c u l a r case will be fully consi d e r e d and weigh e d again s t the benef i t s in cas e-by-case adjudication. The Commissio n al so acted consis t e n tl y with the APA’s procedu r a l requi r e m e n t s. The stands t i l l rule did not alter exist i n g right s or oblig a t i o n s ; it merely codifi e d the FCC’s exi stin g practi ces. Therefore, as a rule of agency proce d u r e, it was exemp t from the AP A’s notice require m e n t s. 5 U.S.C. § 553(b)(A). Further mo r e, even a ssumi n g that the APA require d publi c notice of the standst i l l rule, the Commi ssi o n provi d ed suffi c i e n t notic e. The rulemak i n g notice that co mmenc e d th is procee d i n g speci f i c a l l y sough t co mme n t on a propos a l for “addit i o n a l rules to protec t progra m m e r s from potenti a l retali a t i o n if they file a co mp lai n t.” NPRM ¶ 16 (JA____). The stands t i l l rule was a logic a l out gr o w t h of that propo s a l. S TA N D A R D OF REVI E W The Court “review[ s ] an ag ency’s dispo s i t i o n of const i t u t i o n a l issue s de novo.” Cablevision Sys. Corp. v. FCC, 570 F.3d 83, 91 (2d Cir. 2009). Here, petiti o n e r s mo unt a broads i d e Fi rst Amend ment attack on the progra m carria g e st atut e itself, as well as the FCC’s implem e n t i n g rules. See TWC Br. 24 n.10. To prevai l on this facial chall e n g e, petiti o n e r s must show at a minimu m that “a subst a n t i a l numb er ” of the rules’ applic a t i o n s “are uncon s t i t u t i o n a l, judged in relat i o n to th e [rule s’] plainl y legit im a t e sweep.” 20 Adams v. Zenas Zelotes, Esq., 606 F.3d 34, 38 (2d Cir. 2010) (citati o n omit t e d); see also Washington State Grange v. Washington State Republican Party, 552 U.S. 442, 449 (2008) (“a facia l chall e n g e must fail where the statute has a ‘plainl y legiti m a t e sweep ”’) (citatio n omitte d). In asses s i n g petit i o n er s’ claim that the statu t e and imple me n t i n g rules are “faci a l l y inval i d ” under the First Am endmen t, the Court “must be caref u l not to go beyon d the [rule s’] facia l requi r e m e n t s and specu l a t e about ‘hypo t h e t ic a l’ or ‘imagi n a r y’ cases.” Washington State Grange, 552 U.S. at 449-50. Petition e r s’ challe n g e to the FCC’s statu t o r y autho r i t y to adopt the stand s t i l l rule is gover n e d by Chevron USA, Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984). If a statut o r y provi s i o n is ambig u o u s and the imple m e n t i n g agenc y’s readi n g of that provi s i o n is reaso n a b l e, Chevron r e q u i r e s the Court “to accept th e ag ency’s const r u c t io n of the statu t e, even if the agency’s reading differs from wh at the [Court] believ e s is the best statut o r y inter p r e t a t i o n.” National Cable & Telecomm. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 980 (2005). In particul a r, the FCC’s “reason a b l e interp r e t a t i o n [ ] of the scope of [its] autho r i ty ” under the Communic a t i o n s Act is “en ti t l e d to defer e n c e under Chevron.” Freeman v. Burlington Broadcasters, Inc., 204 F.3d 311, 321-22 (2d Cir. 2000). 21 With respec t to petiti o n e r s’ APA cl aims, the Court “may rev er s e ” the Order “ o n l y if [the FCC’s decisi o n ] was ‘arbit r a r y, caprici o u s, an abuse of discre t i o n, or otherw i s e not in accordan c e with law.’” Cellular Phone Taskforce v. FCC, 205 F.3d 82, 89 (2d Cir. 2000) (quotin g 5 U.S.C. § 706(2)(A)). That standa r d of re vie w is “high ly defer e n t i a l.” Connecticut Dep’t of Pub. Util. Control v. FCC, 78 F.3d 842, 849 (2d Cir. 1996) (quotin g Fulani v. FCC, 49 F.3d 904, 908 (2d Cir. 1995)). The Court may not “subst i t u t e [its] judgme n t fo r that of the agency.” New York State Comm’n on Cable Television v. FCC, 669 F.2d 58, 63 (2d Cir. 1982). ARGUM ENT I. T H E PROGRA M CARRIA G E RULES ARE CONSIS T E N T WITH THE FIRST AMENDM E N T The FCC has yet to apply its revi se d progr a m carri a g e rules to any partic u l a r case. Nonethele s s, petiti o n e r s conten d that those rules violat e the First Amendme n t “by suppl a n ti n g MVPDs’ consid e r e d edito r i a l judgme n t s about what progra m mi n g to carry.” TW C Br. 21. To su cceed in such a chall e n g e, petiti o n e r s must estab l i s h that the rules are uncon s t i t u t i o n a l on their face. This sort of facial challe n g e is “gener a l l y disfa v o r e d ” and seldo m grante d. Dickerson v. Napolitano, 604 F.3d 732, 741 (2d Cir. 2010); see also Washington State Grange, 552 U.S. at 450. Indeed, courts have repea t e d l y reject ed the cable ind u stry’s facial First Amend men t chall e n g e s to relat e d 22 provisi o n s of the 1992 Cable Act and the FCC’s impleme n t i n g rules. 3 Petition e r s’ facial chall e n g e in this case shoul d fare no bette r. Like the underl y i n g progra m carria g e statut e, the FCC’s impl eme n t i n g rules — i n c l u d i n g its case-by-case pro ce d u r e for grant i n g stand s t i l l relie f — a r e not conte n t-based and there f o r e are subj e c t to inter m e d i a t e First Amend men t scruti n y. The rules “regul a t [ e ] cable progr a m m e r s and opera t o r s on the basis of the ‘econo mi c s of owners h i p,’ a char act e r i s t i c unrela t e d to the conten t of speech.” Time Warner, 93 F.3d at 977. Designed “to promo t e speec h, not to restr i c t it,” id., the pr ogra m carria g e rules sa tis f y inter m e d i a t e scrut i n y becau s e they are justi f i e d by the same subst a n t i a l gover n men t a l inter e s t s that under g i r d relat e d provi s i o n s of the 1992 Act: promot i n g “fair comp e t i t i o n ” 3 See, e.g., Turner II, 520 U.S. 180 (reject i n g First Amendme n t chal l e n g e to must-carry statu t e); Cablevision, 649 F.3d 695 (reject i n g First Amendme n t challe n g e to FCC’s program access rules); Cablevision Sys. Corp. v. FCC, 597 F.3d 1306, 1312 (D.C. Cir. 2010 ) (petiti o n e r s’ First Amendmen t chall e n g e s to the statu t o r y ban on exclu s i v e contr a c t s betwe e n cable opera t o r s and cable-affili a t e d progr a m m e r s we re in disti n g u i s h a b l e “from the [argu me n t s the court ] alrea d y rejec t e d in the facial challe n g e ” in the 1996 Time Warner cas e); Time Warner Entm’t Co. v. United States, 211 F.3d 1313 (D.C. Cir. 2000) (reject i n g First Am endmen t chall e n g e s to statu t o r y provis i o n s limit i n g numbe r of cable ope r a t o r’s subsc r i b e r s and numbe r of channe l s on its cable system devote d to progr a m mi n g in which the opera t o r has a finan ci a l inter e s t); Time Warner, 93 F.3d 957 (reject i n g First Amendmen t chall e n g e s to multi p l e provis i o n s of the 1992 Cable Act, includ i n g lease d acces s and progr a m acces s provi s i o n s); Time Warner Entm’t Co. v. FCC, 56 F.3d 151, 178-86 (D.C. Ci r. 1995) (reject i n g First Amendmen t chall e n g e to FCC’s cable rate regulat i o n s). 23 and “the wides p r e a d disse mi n a t i o n of inform a t i o n from a multip l i c i t y of sources,” Turner I, 512 U.S. at 662. Further, the rules do not burde n subst a n t i a l l y more speech th an necess ar y to advanc e t hose interes t s. They are theref o r e consti t u t i o n a l. A. T h e Rules Are Subject To Inter m e d i a t e Scrut i n y. The lev el of First Amend men t scrut i n y in this case depen d s on wheth e r the challen g e d rules are “conten t based or conten t neutra l.” Cablevision, 570 F.3d at 96. Courts apply “str i c t scrut i n y ” to regul a t i o n s that discr i mi n a t e “on the basis of conten t ” a nd “a mo re lenien t analy s i s to conten t-neutra l regulat i o n s.” Bery v. City of New York, 97 F.3d 689, 696 (2d Cir. 1996). The “most exac t i n g ” First Amendm e n t scrut i n y is reser v e d for “regul a t i o n s that suppre s s, disadv a n t a g e, or impos e diffe r e n t i a l burde n s upon speech becau s e of its conten t ” and “[l] aws that co mp el speak ers to utter or distri b u t e speech bearin g a partic u l a r messag e.” Turner I, 512 U.S. at 642. “In contras t, a less string e n t test” — i n t e r m e d i a t e scru t i n y — a p p li e s to “regul a t i o n s of expre s s i v e activ i t y that are not based on conten t.” Hobbs v. County of Westchester, 397 F.3d 133, 149 (2d Cir. 2005). “Governme n t regul a t i o n of expre s s i v e activi t y is conten t neutra l so long as it is justi f i e d witho u t refer e n c e to the content of the regulat e d speech.” Hobbs, 397 F.3d at 149 (quotin g Ward, 491 U.S. at 791). “The govern m e n t’s 24 purpose is the contr o ll i n g consid e r a t i o n. A regulat i o n that serve s purpo s e s unrel a t e d to the conte n t of expre s s i o n is deemed neu tral, even if it has an incide n t a l effec t on some speake r s or messa g e s but not other s.” Universal City Studios, Inc. v. Corley, 273 F.3d 429, 450 (2d Cir. 2001) (quotin g Ward, 491 U.S. at 791). The Commission co rrect l y found that the regulat i o n s at issue here are conten t-neutra l. The progra m carri a g e rules do not regul a t e speec h “beca u s e of [agree m e n t or] disagr e e m e n t with the messag e it convey s.” Turner I, 512 U.S. at 642 (quoting Ward, 491 U.S. at 791). Rather, they serve “purp o s e s unrela t e d to the conten t of expres s i o n.” Hobbs, 397 F.3d at 150 (quotin g Ward, 491 U.S. at 791). The rules ar e desi g n e d to preve n t MVPDs from engagi n g in antico mp e t i t i v e practi c e s with respe c t to progr a m mi n g vend o r s. Petition e r s’ challe n g e “focus e s on” the rule barri n g affil i a t i o n-based carri a g e discr i mi n a t i o n. TWC Br. 3 n.1; see also NCTA Br. 47 n.10. That rule prohi b i t s MVPDs from “disc r i mi n a t i n g … on the basis of affil i a t i o n or nonaf f i li a t i o n of [vide o progr am m i n g ] ve ndo r s in the selec t i o n, terms, or condi t i o n s for carri a g e of video prog ra m mi n g ” if the effect of such discr i mi n a t i o n “is to unrea s o n a b l y restr a i n the abilit y of an unaffi l i a t e d video progr a m m i n g vendo r to comp et e fa irl y.” 47 C.F. R. § 76.1301(c); see also 47 25 U.S.C. § 536(a)(3). As the Commissio n e xplai n e d, the rule regula t e s speech “base d on affil i a t i o n with an MV PD, not based on … conten t.” Order ¶ 32 (JA____). In that respe c t, the discr i mi n a t i o n rule closel y resem b l e s the leased access stat ut e, which requir e s cable opera t o r s to make chann e l s avail a b l e for lease by unaff i l i a t e d progr a m m e r s. 47 U.S .C. § 532. The “objec t i v e ” of both lease d acces s and progr a m carri a g e regul a t i o n is “fram e d in terms of the sourc e s of infor ma t i o n rathe r than the subst a n c e of the infor ma t i o n.” Time Warner, 93 F.3d at 969. In each case, the ratio n a l e for regul a t io n is not relate d to “the conten t of [progr a m m e r s’] speech,” but to the progra m m e r s’ “lack of affili a t i o n with” an MVPD. Id. In rejec t i n g a First Amendme n t challenge to the leas ed access st atute, the D.C. Circuit applie d interm e d i a t e scrut i n y. Id. at 967-71. The same standa r d of review applies here. Petition e r s argue that the carria g e di scri m i n a t i o n rule and the deriva t i v e stand s t i l l rule are “cont e n t-based” becau s e, in some cases, their appli c a t i o n depen d s on a findi n g that unaff i l i a t e d pr ogr a m m i n g is “simi l a r l y situa t e d ” to affil i a t e d progr a m mi n g. TWC Br. 24-28; NCTA Br. 53-55. That conte n t i o n misap p r e h e n d s both the conce p t of a “cont e n t-based ” regul a t i o n of speec h and the natur e of the FCC’s “simil a r l y situat e d ” analys i s. 26 The “princ i p a l inqui r y in determi n i n g conte n t neutr a l i t y … is wheth e r the govern m e n t has adopte d a regula t i o n of speech becau s e of [agree m e n t or] disagr e e m e n t with the messag e it convey s.” Turner I, 512 U.S. at 642 (citatio n omitt e d). Here, “there is si mp ly no hint” that the govern m e n t has done so. BellSouth Corp. v. FCC, 144 F.3d 58, 69 (D.C. Cir. 1998). In those situa t i o n s where the Commissi o n cons i d er s the conte n t of progr a m m i n g to deter mi n e wheth e r the de fen d a n t MVPD discrimi n a t e d “on the basis of affil i a t i o n or nonaf f i l i a t i o n,” it is solel y for purpo s e s of comp a r i n g the co mp l a i n a n t’s progr am m i n g with progr a m m i n g that the defen d a n t’s affil i at e d netwo r k has chose n to carry — whatever the content may be. Cf. Turner I, 512 U.S. at 655 (must-carry rules “conf e r benef i t s upon all fu ll-power, local broadcas t e r s, whatev er the conten t of their progr a m mi n g ”). The particular c o n t e n t of the progr am m i n g at issue is irrelev a n t ; the same co mpara t i v e analys i s applie s regard l e s s of the speci f i c type of progr a m mi n g involv e d. Thus, the program carriag e rules ar e not “struc t u r e d in a ma nner that raise [ s ] suspic i o n s that [their ] object i v e was, in fact, the sup p res s i o n of certain id eas.” Time Warner, 93 F.3d at 978 (quotin g Turner I, 512 U.S. at 660). 4 4 Pointing to a footn o te in Turner I, petiti o n e r s note that one provi s i o n of the must-carry statut e “appea r s to singl e out certain low-power broadca s t e r s for speci a l benef i t s on the basis of conte n t.” TWC Br. 30-31 (citing Turner I, 512 U.S. at 643 n.6). That footn o t e doe s not advan c e petit i o n e r s’ argume n t. 27 In any event, petiti o n e r s exagg e r a t e th e role of conte n t in the agenc y’s analysi s. See, e.g., TWC Br. 30. The FCC exami n e s wheth er progr a m m i n g is “simil a r l y situa t e d ” simp l y to ascer t ai n whethe r the co mplai n a n t has made a circu ms t a n t i a l case of discri m i n a t i o n — which logic a l l y entai l s a co mp ar i s o n of the defend a n t MVPD’s trea tme n t of its own affil i a t e s with its treatm e n t of nonaff i li a t e s. See Order ¶ 14 (JA____-____); 47 C.F.R. § 76.1302(d)(3)(iii)(B)( 2)(i). When an unaffi l i a t e d netwo r k relie s on circu ms t a n t i a l evide n c e to suppo r t its claim that the defen d a n t affor d e d prefe r e n t i a l treat m e n t to its own affil i a t e d netwo r k s, it make s sense to inqui r e First, unlik e the low-power provi s io n in Turner I, w h i c h expre s s l y focus e d on wheth e r progr a m mi n g “woul d addre s s lo cal news and infor m a t i o n a l needs,” the progr am carri a g e provi s i o n at issue here does not even argua b l y “sing l e out” any entit i e s “on the basis of conte n t.” 512 U.S. at 643 n.6. Second, the Court in Turner I e x p r e s s l y declin e d to resolv e wh ethe r the low-power provis i o n was conten t-based. Id. 28 whether the progr a m mi n g carri e d on the ne two r k s is simil a r. That inqui r y does not reflect a pr efere n c e fo r parti c u la r progr a m m i n g conte n t. 5 Moreover, the Commissi o n does not focus exclu s i v e l y (or even prima r i l y) on conte n t when under t a k i n g its “simi l a r l y situa t e d ” analy s i s. Rather, it consi d e r s an array of facto r s, includi n g “genre, ratin gs, license fee, target audien c e, target advert i s e r s, [and ] target progra m mi n g.” Order ¶ 14 (JA____). Many of those facto r s (suc h as ratin g s and licen s e fees) have nothin g to do with progr a m mi n g cont e n t. As the Commissi o n expla i n e d, “no single factor is neces sa r i l y dispos i t i v e ” : the “more factors that are found to be simila r, the more likely ” th e co mp l a i n a n t’s progr am m i n g “will be consi d e r e d simil a r l y situa t e d ” to MVPD-affilia t e d progr a m mi n g. Id. (JA____). This Court has recogn i z e d that a regul a t i o n may be conte n t-neutr a l even if its imple m e n t a t i o n entai l s some analy s i s of conte n t, so long as “the 5 Admittin g evide n c e of dispa r a t e treat m e n t of simil a r l y situa t e d parti e s as circu ms t a n t i a l evide n c e suppo r t i n g a showi n g of inten t i o n a l discr i mi n a t i o n is a hallma r k of discri m i n a t i o n law. See, e.g., Ruiz v. County of Rockland, 609 F.3d 486, 493-94 (2d Cir. 2010); see also Gross v. FBL Fin. Servs., Inc., 557 U.S. 167, 189 (2009). That the FCC adopted a simila r appro a c h in imple m e n t i n g the progr a m carri a g e statu t e’s discr i mi n a t i o n provi s i o n does not imply any illici t attem p t to regula t e the conten t of sp eech. Indeed, the House Committe e Report on the statut e notes that “[a]n exten s i v e body of law exist s addre s s i n g discr i mi n a t i o n in normal busine s s practi c e s, and the Committe e intend s the Commissi o n to be guided by these preced e n t s.” H.R. Rep. No. 102-628, at 110 (1 992) (“House Report”). 29 specifi c co nten t of the speech ” is “i rrel e v a n t ” to the regula t o r y “goal.” Hobbs, 397 F.3d at 152. In Hobbs, a street perform e r chall en g e d a Westches t e r County polic y that barre d any perso n convi c t e d of a sexual offen s e again s t a minor from obtai n i n g a permi t to perfo r m usin g prop s on County prope r t y if the perfo r m a n c e w ould entic e a child to congre g a t e aroun d that person. Id. a t 143-44. The C ourt held that the County’s policy was a permis s i b l e conte n t-neutra l regul a t i o n of speec h becau s e it “focu s e s on the safet y of child r e n ” and “is not conce r n e d with the conten t of the messag e.” Id. a t 152. The Court explai n e d that alth o u g h County offi c i a l s exami n e “the conten t of the applic a n t’s propos e d prese n t a t i o n ” to deter mi n e “wheth e r [it] is likel y to attra c t a crowd of child r e n,” the County’s analy s i s of conte n t did not trigge r strict scruti n y becaus e “the speci f i c conte n t of the speec h ” was “irre l e v a n t to the gover n m e n t a l goal” of prote c t i n g child r e n. Id. a t 152-53. Here, as in Hobbs, “ t h e r e is absol u t e l y no evide n c e, nor even any seriou s sugge s t i o n, that the Commissi o n ” issued the substa n t i v e progra m carria g e ru le (or codifi e d the sta nd a r d for obtai n i n g deriv a t i v e stand s t i l l relie f) “to [favo r or] disfa v o r certai n messag e s or ideas.” Cablevision, 649 F.3d at 717. The agency adopte d t hose provi s i o n s becau s e of “[the ] programm ing’s economi c ch aract eristics, not … its commu n i c a t i v e impac t.” Id. a t 718. 30 Petition e r s furth e r conte n d that stri ct scruti n y should apply becaus e “the progra m carria g e rules prefer the speec h of unaff i l i a t e d progr a m m e r s to the speec h of MVPDs and their aff ilia t e d program m e r s.” TWC Br. 28. Accordin g to petit i o n e r s, it is “unco n s t i t u t i o n a l ” for the FCC to promot e “the speech of a certai n catego r y of speake r … over others.” TWC Br. 42. The D.C. Circuit, however, has rejecte d a virtua l l y ident i c a l argum e n t. In Time Warner, 211 F.3d at 1321, it found no merit in TWC’s argume n t that “becau s e the Congress expres s e d concer n that cable opera t o r s might favor their affili a t e d progra m m i n g servic e s [,] the legis l a t u r e’s ‘stat e d desig n was to suppr e s s cable opera t o r s’ speech,’ and to advan c e the speec h of nonaf f i liat e d programm e r s.” Instead, the D.C. Circ uit conclu d e d that “the legisl a t i v e conce r n was not with the speech of a partic u l a r source but solely with promot i n g diver s i t y and co mp et i t i o n in the cable ind u s t r y.” Id. The same is true here. Petition e r s incor r e c t l y assum e th at “all speake r-partia l laws are presu me d inval i d.” Turner I, 512 U.S. at 658. The Supr eme Court, however, has mad e clear that “speak e r-based la ws deman d stric t scrut i n y ” only “when they reflec t the Governmen t’s prefer e n c e for the substa n c e of what the favore d speake r s hav e to say (or aver si o n to what the disfav o r e d speake r s have to say).” Id. (citin g Regan v. Taxation with Representation of 31 Washington, 461 U.S. 540, 548 (1983)). So long as speak e r disti n c t i o n s “are not a subtle means of exercis i n g a c onten t prefer e n c e,” they “ar e not presu me d inval i d under the First Amendmen t.” Id. a t 645. 6 Nor do the rules challe n g e d in this case “restr i c t the speech of some el eme n t s of our socie t y in order to advanc e the relati v e voice of other s.” TWC Br. 43 (quotin g Buckley v. Valeo, 424 U.S. 1, 48-49 (1976)). Th e rules are design e d to preven t antico mp e t i t i v e conduc t. In sum, stric t scrut i n y is inapp l i c a b l e because the pr ogram carriag e rules do not refle c t any prefe r e n c e for (or avers i o n to) any parti c u l a r conte n t. The purpos e of the rules has nothin g to do with progra m m i n g conte n t. For that reason, inter me d i a t e scrut i n y appli e s. 6 Citizens United v. FEC, 130 S. Ct. 876 (2010), did not hold other w i s e. The Court there observ e d that, “apart fro m the purpo s e or effec t of regul a t i n g conten t, … the Governmen t may c o m mi t a consti t u t i o n a l wrong when by law it identi f i e s certai n prefer r e d speake r s.” Id. a t 899 (emphas i s added). Petition e r s misco n s t r u e that state m e n t to mean that all “ s p e a k e r-based restr i c t i o n s infri n g e the First Amendm ent even when they are not content- based.” NCTA Br. 51 n.12; see also TW Br. 28. The Court said no such thing. Nor did it purpo r t to alter settl e d law by decla r i n g that all speak e r- based laws are subje c t to stric t scrut i n y. The Court applie d strict scruti n y in Citizens United b e c a u s e that case (unlike this one) concer n e d a law— eq u i v a l e n t to a prior restr a i n t — t h a t burden e d “spee c h utter e d durin g a camp a i g n for polit i c a l offic e.” 130 S. Ct. at 896, 898 (citati o n omitt e d). 32 B. T h e Rules Satis f y Inter m e d i a t e Scrut i n y. A content-neutra l regul a t i o n will with s t a n d inter m e d i a t e scrut i n y if it: (1) “advanc e s impor t a n t gover n m e n t a l in ter e s t s unrel a t e d to the suppr e s s i o n of free speec h ” ; and (2) “does not bur de n subst a n t i a ll y more speec h than necess ar y to furthe r those intere s t s.” Turner II, 520 U.S. at 189 (citing United States v. O’Brien, 391 U.S. 367, 377 (1968)). The program carria g e rules sati sf y both parts of this test. They promo t e comp e t i t i o n and diver s i t y of progr a m m i n g sourc e s in the video progr a m m i n g marke t — t w o subst a n t i a l gover n m e n t inter e s t s. Order ¶ 32 (JA____). And they “burd e n no more speech than neces s ar y ” to advance those interes t s. Order ¶ 34 (JA____). 1 . T h e Rules Advan c e Subst a n t i a l Gover n m e n t Interes t s . By “promo t i n g fair treat m e n t of unaff i l i a t e d progr am m i n g vendo r s,” the progr am carri a g e rules foste r “co mp e t i t i o n in the video progr a m mi n g market ” and “diver s i t y ” in the availa b l e sourc e s of video progr a m mi n g. Order ¶ 32 (JA____). These polic y goals are “imp or t a n t gover n m e n t a l object i v e s unrela t e d to th e suppre s s i o n of speech.” Time Warner, 93 F.3d at 969. In 2009, this Court relie d on th e same policy goals to uphold an FCC order agai n s t First Amendme n t chal l e n g e, notin g that it had “no trou b l e in conclud i n g that the order ‘advan c e s imp o r t a n t gover n m e n t a l inter e s t s 33 unrelat e d to the suppre s s i o n of free speech.’” Cablevision, 570 F.3d at 97 (citatio n omitte d). The “Governmen t’s intere s t in elimi n a t i n g restr a i n t s on fair co mp eti t i o n is alway s substan t i a l, ev en when the indiv i d u a l s or entit i e s subjec t to particu l a r regula t i o n s are e ngag e d in expre s s i v e activ i t y prote c t e d by the First Amend ment.” Turner I, 512 U.S. at 664. And “assur in g that the publi c has acces s to a multi p l i c i t y of in form a t i o n source s is a govern me n t a l purpos e of the highes t order, for it pr omo t e s value s centr a l to the First Amendment.” Id. at 663. Indeed, “the First Amendmen t stems from the premi s e that ‘the wides t possi b le disse mi n a t i o n of infor ma t i o n from diver s e and antag o n i s t i c sourc e s is essen t i a l to the welfare of the public.’” Mt. Mansfield Television, Inc. v. FCC, 442 F.2d 470, 477 (2d Cir. 1971) (quotin g Associated Press v. United States, 326 U.S. 1, 20 (1945)). Petition e r s do not dispu t e that the gove r n m e n t has a subs ta n t i a l inter e s t in promo t i n g comp e t i t i o n and diver s i t y in the video progr a m m i n g and distr ib u t ion marke t s. They maint a i n , however, that the program carria g e statu t e and imple m e n t i n g rules are no longe r neede d to achie v e those ends becaus e “the market p l a c e is no w vigor ously comp etitive.” TWC Br. 16. Petitione r s assert that the FCC cannot c onti n u e to justi f y regul at i o n witho u t evide n c e that cable opera t o r s re tai n a “bott l e n e c k ” monop o l y ( i.e., gatek e eper 34 contro l over distr i b u ti o n of video prog ram mi n g) in the MVPD market. TWC Br. 36-37, 54; NCTA Br. 56-57. This argume n t rests on the mistak e n assump t i o n that Congres s adopt e d the progr am carri a g e statu t e solel y to restra i n the “bottl e n e c k ” power that cable operat o r s posses s e d in 1992. NC TA Br. 55-56. If that were so, Congress presu ma b l y would have limit e d the statut e’s applic a t i o n to cable opera t o r s (just as it did with the must-c arry statut e). Un like the must-carry statu t e, howev e r, Section 616 applie s to all MVPDs—inclu d in g non-cable MVPDs like DIRECTV, which have never h e l d a bottle n e c k monop o l y. 47 U.S.C. § 536(a). The princi p a l facto r motiv a t i n g C ongress to regul a t e progr a m carri a g e was not the cable “b ott l e n e c k,” but the poten t i a l for affil i a t i o n-based discr i mi n a t i o n creat e d by verti c a l inte g r a t i o n. Congress found that “[a]s a result ” of vertic a l integr a t i o n, “cable opera t o r s have the incen t i v e and abili t y to favor their affil i a t e d progr am m e r s.” 1992 Cable Act, § 2(a)(5). 7 As the D.C. Circuit has explai n e d, the “verti c a l l y integr a t e d progra m m e r provis i o n s ” of the 1992 Cable Act were justi f i e d by “both ‘the bottl e n e c k monop o l y 7 See also Senate Report at 25 (“vertic a l in teg r a t i o n gives cable opera t o r s the incen t i v e and abili t y to favor th eir affil i a t e d progr a m m i n g servi c e s ”); House Report at 41 (“verti c a l l y integ r a t e d co mpan i e s reduce divers i t y in progr a m m i n g by threa t e n i n g the viabi l i t y of rival cable progr am m i n g servi c e s ”). 35 power exerc i s e d by cable opera t o r s’ and the unique power that vertica l l y integrated co mpanies have in the cable market.” Time Warner, 93 F.3d at 978 (citati o n s omitt e d ; empha s i s added). 8 Two recen t decisi o n s of the D.C. Circuit confi r m that verti c a l l y integ r a t e d co mp a n i e s conti n u e to reta in such unique power and that the FCC has good reaso n to remai n wary of th e prosp e c t of antic o mp e t i t i v e condu c t by vertic a l l y integ r a t e d MVPDs. Sp ecific a l l y, the court found that “the trans f o r ma t i o n in the MVPD market” since 1992, “altho u g h signi f i c a n t, present s a ‘mixed pictur e’ wh en consid e r e d as a whole.” Cablevision, 649 F.3d at 712 (quotin g Cablevision, 597 F.3d at 1314). As the D.C. Circuit observ e d, “[ w]h i l e cable no longe r contr o l s 95 percen t of the MVPD market, as it did in 1992, cable still c ontr o l s two third s of the market natio n a l l y,” Cablevision, 597 F.3d at 1314; and cable “enjo y [ s ] [even ] highe r share s in severa l market s.” Cablevision, 649 F.3d at 712. In additi o n, “as of 2007, ‘the four large s t cable opera t o r s [were ] still verti c a l l y 8 In adopti n g Section 616, Congress wa s motiva t e d by concer n s that some local marke t s could be more vulne r a b l e than other s to the antic o mp e t i t i v e effect s of vertic a l integr a t i o n becaus e “the exten t of marke t power in the cable indust r y varies in each locali t y.” Senate Report at 24. For examp l e, a large vertic a l l y integr a t e d MVPD lik e Comcast could have a mu ch larger marke t share in some metro p o l i t a n marke t s than in other s. Given the local varia t i o n s in marke t c ondi t i o n s, Congress was conce r n e d that a verti c a l l y integr a t e d MVPD “in cert ai n instan c e s ” could “abus e its local l y-deriv e d marke t power ” to discr i mi n a t e again s t unaff i l i a t e d progr a m m e r s. Id. 36 integra t e d with six of the top 20 nation a l netwo r k s, some of the most popul a r premi u m netwo r k s, and almo s t half of all regio n a l sport s netwo r k s.’” Cablevision, 649 F.3d at 712 (quotin g Cablevision, 597 F.3d at 1314). In view of this eviden ce, the D.C. Circuit f o u n d “no reaso n to quest i o n ” recen t FCC finding s that “cable opera t o r s s till have a domina n t share of MVPD subscri b e r s … and still own signi f i c a n t progr a m mi n g.” Cablevision, 649 F.3d at 712 (citati o n omitt e d). Petition e r s urge the Court to disreg a r d the D.C. Circuit’s Cablevision d e c i s i o n s becau s e they invol v ed progr a m acces s r u l e s rathe r than progr am carriag e ru les. TWC Br. 38-39. But th e fi ndings in those cases confirmed the conti n u in g need for both progr am acces s and p r o g r a m carri a g e rules. As the Commiss i o n expla i n e d ( Order n.100 (JA___)), both re gula t o r y regime s are anima t e d by the same conce r n s about comp e t i t i o n and the threa t posed by vertic a l integr a t i o n. Compare Cablevision, 597 F.3d at 1308 (program access), with 1992 Cable Act, § 2(a)(5 ) (program car riage). Even under petit i o n er s’ concep t i o n of the statu t o r y schem e (includ i n g their conte n t i o n that a showi n g of “mar k e t power ” shoul d be requi r e d as part of a prima facie c a s e of progr a m carri a g e discr i mi n at i o n), petiti o n e r s’ facial challen g e fails. To survive that faci al chal lenge, the Commissi on need not “estab l i s h that vertic a l l y integr a t e d cable comp a n i e s retai n a stran g l e h o l d 37 nationa l l y.” Cablevision, 649 F.3d at 712. And the D.C. Circuit obser v e d only last year that “clus t e r i n g and c onso l id a t i o n ” of cable syste ms have “bolster[ed] the mar k et power of cable operat o r s,” leavin g some local marke t s “‘hig h ly susce p t i b l e to near-monop o ly contr o l by a cable comp a n y.’” Id. (quotin g Cablevision, 597 F.3d at 1309). Likewise, in the Order, the Commissi o n found that cable conti n u e s to domin a t e some MVPD markets. In partic u l a r, it found that the recen t merge r of Comcast (the large s t MVPD in the nation) with media conglo m e r a t e NBC Universal “highl i g h t [ e d ] the co ntin u e d need for an effect i v e progra m carria g e co mp lain t regime.” Order ¶ 33 (JA ____). That merger produ c e d “an entity with increa s e d abili t y and incent i v e to harm co mp eti t i o n in video progr a m m i n g by engag i n g in … discr i m i n a t o r y actio n s again s t unaff i l i at e d video progr a m mi n g netwo r k s.” Id. (quotin g Applications of Comcast Corp., Gen. Elec. Co. and NBC Universal, Inc., 26 FCC Rcd 4238, 4284 ¶ 116 (2011) (“ Comcast/NBCU Order ”)). Before approv in g the merger, the Commissi o n expre s s e d conce r n that Co mcast’s except i o n a l l y large market share in major metro p o l i t a n marke t s ( e.g., “ a s much as 62 percent in the Chicago [mark e t ] and 67 percen t in the Philadel p h ia [mark e t ] ”) would enhanc e Comcast’s abilit y to “disad v a n t a g e rival networ k s that co mp et e with NBCU network s.” Comcast/NBCU Order, 26 FCC Rcd at 4285 ¶ 116. “The 38 Commissi o n speci f i c a l l y relie d upon the progra m carria g e co mpl a i n t proce s s to addres s these concer n s.” Order ¶ 33 (JA____) (citin g Comcast/NBCU Order, 26 FCC Rcd at 4288 ¶ 123). The Order’s discu s s i o n of the 2011 merger refut e s petit i o n e r s’ claim th at the Commissi o n relie d “sole l y on congre s s i o n a l findi n g s from 1992 ” to justif y the contin u e d enfor c e m e n t of the program carriage rules. TWC Br. 34. In light of the Comcast-NBC Un iversal merger, the Commissi on reaso n a b l y found that verti c a l l y integ r a t e d MVPDs still retain “the incent i v e and abili t y to favor their affil i a t e d pr ogr am m i n g vendo r s in indiv i d u a l cases, with the potent i a l to unreas o n a b l y restr a i n the abilit y of an unaffi l i a t e d progr a m m i n g vendo r to co mpet e fairly.” Order ¶ 33 (JA____-____). That potent i a l remain s even if no “bottl e n e c k ” exists. Therefore, the Court should rejec t petit i o n e r s’ premi s e that only th e existen c e of “bo ttle n e c k ” power can justi f y progr a m carri a g e regul a t i o n. 9 The Commissi on in the Order p r o p e r l y conclu d e d that a cas e-by-case evaluat i o n of progr a m carri a g e comp l a i n t s 9 Insofar as that flawe d premi s e under l i e s most of petit i o n e r s’ consti t u t i o n a l and APA challenge s to the carriag e discr i mi n a t i o n rule and the FCC’s proced u r e s for establ i s h i n g a prima facie c a s e and obtain i n g stand s t i l l relie f, those challe n g e s are unavai l i n g. See TWC Br. 36, 47-56; NC TA Br. 55-57. 39 remain s neces s a r y to guard again s t i ndiv i d u a l insta n c e s of antic o mp e t i t i v e conduc t. See Order ¶ 33 (JA____). 10 Petition e r s next conten d that the progr a m carri a g e rules are no longe r needed to promot e divers i t y becaus e the number of nation a l progra m m i n g netwo r k s has grown and the perce n t a g e of vertic a l l y integr a t e d networ k s has declined since 1992. TW C Br. 40-41. Recently, how ev e r, the D.C. Circuit found evide n c e that “desp i t e major ga in s in the amoun t and diver s i t y of progr a m m i n g,” vertic a l integ r a t i o n s till pervade s the program m i n g market. Cablevision, 649 F.3d at 712. Moreover, “t he numbe r of cable-affili a t e d networ k s recent l y increa s e d signif i c a n t l y ” when Comcast merged with NBC Universal. Order ¶ 33 (JA____). Given the conti n u i n g presen c e of verti c a l integr a t i o n in the MVPD market, the pr ogr a m carri a g e rules remai n neces s a r y 10 For that reason, petiti o n e r s’ relian c e on Time Warner Entertainment Co. v. FCC, 240 F.3d 1126 (D.C. Cir. 2001), and Comcast Corp. v. FCC, 579 F.3d 1 (D.C. Cir. 2009), is mis p lac e d. Those cases involv e d a differ e n t type of rule—a catego r i c a l rule under wh ic h the FCC limite d “ind i v id u a l cabl e operat o r s to a maxi mum percentage [ i.e., 30 percent ] of subsc r i b e r s nation w i d e.” Order ¶ 33 (JA____). The D.C. Circuit concl u d e d in 2009 that the devel o p m e n t of comp e t i t i o n among MVPDs obviat e d the need for a nation a l cable subscr ib e r cap of 30 percent. Comcast, 579 F.3d at 8. Two years later, howeve r, the same court found that the nation a l trend towar d great e r MVPD competi t i o n did not for ecl o s e the possib i l i t y of indivi d u a l cases of antic o mp e t i t i v e condu c t by vertic a l l y integr a t e d MVPDs. Cablevision, 649 F.3d at 712. The progra m carri a g e comp l a i n t proce s s — w h i c h “requi r e s an assess m e n t of the fact s of each case and the impact on the abili t y of an unaff i l i at e d progr am m i n g vendo r to comp e t e fairl y,” Order ¶ 33 (JA___)—is speci f i c a l l y tailo r e d to a ddres s such cases. 40 to addre s s comp l a i n t s that raise le git i m a t e conce r n s about compe t i t i o n and diver s i t y. Petitione r s sugges t that the growth of the Interne t and online video dimin i s h the need for the gover n m e n t to promo t e progr a m mi n g diver s i t y. TWC Br. 12-14. At this point, how eve r, online video does not provid e programm e r s with a co mmerci al l y viable altern a t i v e to MVPD carriage. While “the amoun t of onlin e viewi n g is growin g,” market studies indica t e that “mos t cons u m e r s today d o not see [onli n e video ] servi c e as a subst it u t e for their MVPD service.” Comcast/NBCU Order, 26 FCC Rcd at 4269 ¶ 79. A 2010 study commi s s i o n e d by Nielsen show e d that “only three perce n t of peopl e who watch video from the Interne t on their telev i s i o n sets plann [ e d ] to drop cable subsc r i p t io n s.” Comcast/NBCU Order, 26 FCC Rcd at 4269 n.173. Equally flawe d is petit i o n e r s’ att ack on the ag ency’s reliance on diver s i t y of voice s as an inter e s t fu rthe r e d by the progra m carria g e rules. Petition e r s conte n d that it was “nons e n s i c a l ” to rely on that object i v e becaus e the Commission emp loys a “simil arly s ituat e d ” analys i s in a subset of progra m carri a g e cases, and this can only resul t in carri a g e of simil a r — r a t h e r than diver s e — p r o g r a m mi n g. TWC Br. 41. That conte n t i o n miss e s the poin t that diver s i t y in this conte x t refer s to diver s i t y of sources of infor ma t i o n. See 41 Order ¶ 32 & n.127 (JA____); Time Warner, 93 F.3d at 969. Far from sugge s t in g that this objec t i v e infri n g e s free speec h inter e s t s, the Supreme Court has empha s i z e d that ensur i n g pu bli c acces s to “a multi p l i c i t y of infor ma t i o n sourc e s … promotes values centr a l to the First Amendmen t.” Turner I, 512 U.S. at 663 (emphasi s added). 2 . T h e Rules Do Not Burden Subst a n t i a l l y More Speech Than Necess a r y To Achiev e Their Objec t i v e s . To survive inter m e d i a t e scrut i n y, “a regula t i o n need not be the least speech-res tri c t i v e means of advanc i n g the Govern men t’s intere s t s.” Turner I, 512 U.S. at 662. A content-neutra l regul a t i o n will be susta i n e d if it does not “burden substa n t i a l l y mo re speec h than is neces s ar y to furth e r the gover n me n t’s legitim a t e inter e s t s.” Id. (quotin g Ward, 491 U.S. at 799). a . T h e Carriag e Discri m i n a t i o n Rule and Stand s t i l l Proced u re . The carria g e discr i m i n a t i o n rule easily satis f i e s this requi r e m e n t. The Commissi o n will find a viola t i o n of th e rule “only after” the co mp la i n a n t “prov e s ” that a violat i o n has occurr e d. Order ¶ 34 (JA____); see also TCR Sports Broad. Holding v. Time Warner Cable Inc., 25 FCC Rcd 18099, 18105 ¶ 10 (2010) (denyin g progr a m carri age co mpl aint because TWC had “provi d e d evide n c e estab l i s h i n g legit i m a t e and non-discr i mi n a t o r y reaso n s ” for its carria g e decis i o n), aff’d, TCR Sports Broad. Holding v. FCC, 2012 WL 42 1672264 (4th Cir. May 14, 2012). Thus, “t he burden impos e d by” the rule “is congru e n t to the benefi t s it afford s.” Turner II, 520 U.S. at 215. The rule “burde n [ s ] no more speech than necess a r y ” to achiev e the govern men t’s objec t i v e s of prote c t i n g comp e t i t i o n and promo t i n g diver s i t y. Order ¶ 34 (JA____). There is no basis for petitio n e r s’ a ssert i o n that “the progr a m carri a g e regime applie s a one-size -fits-all approa c h ” to “ all a d v e r s e carria g e deci si o n s rende r e d by MVPDs anywhere.” TWC Br. 43. To th e contrar y, rather than prohib i t in g verti c a l integ r a t i o n altog e t h e r, Congress enact e d a closel y drawn statut e “[t]o ensure that cable oper a t o r s do not favor their affil i a t e d progr a m m e r s over other s.” Senate Report at 27. The program carriag e statut e (like the corresp o n d i n g FCC rule) is struc t u r e d to prohi b i t discr i mi n a t i o n on the basis of affil i a t i o n only when such discr i mi n a t i o n has the effect of “unrea s o n a b l y restra i n [ i n g ] the abili t y of an unaff i l i a t e d video progr a m m i n g vendo r to comp e t e fa irl y.” 47 U.S.C. § 536(a)(3); see also 47 C.F.R. § 76.1301(c). Accordin g l y, by their terms, the statu t e and FCC rule apply only where an antic o mp e t i t i v e impac t is shown in a partic u l a r case. Cf. Cablevision, 649 F.3d at 711-12 (“[b]y impos i n g liabi l i t y [unde r the progr a m access rules] only when co mpla i n a n t s demonstrate that a co mp any’s unfair act has ‘the purpo s e or effec t’ of ‘hind e r [ i n g ] sign i f i c a n t l y … or preve n t[i n g ]’ 43 the provi s i o n of satel l i t e progr a m m i n g, the Commissi o n’s … rules speci f i c a l l y targe t activ i t i e s where the gove rn m e n t intere s t is greate s t ”). By conside r i n g each progra m carria g e co mpla i n t “on a case-by-case basis,” examin i n g the parti c u l a r fact s under l y in g each compl a i n t, see Order ¶ 33 (JA____), the FCC ensures that its ru les are narro w l y tailo r e d to burde n no more speech than necess a r y. 11 For simila r reaso n s, petiti o n e r s are wrong in asser t i n g that the deriv a t i v e stand s t i l l proce d u r e “impo s e s a greate r burde n on speec h than necess ar y becaus e it aut horizes the FCC to compel speech before any progra m-carria g e viola t i o n has been found.” NCTA Br. 58. The FCC’s proced u r e is no more const i t u t i o n a l l y in firm than the courts’ practi c e of grant i n g preli mi n a r y injun c t i v e relie f in appropr i a t e cases, even though such relief impli c a t e s a party’s First Amendmen t right s. See, e.g., Merkos L’Inyonei Chinuch, Inc. v. Otsar Sifrei Lubavitch, Inc., 312 F.3d 94 (2d Cir. 11 Petitio n e r s’ suppo s i t i o n (T WC Br. 44) that the FC C could have select e d “othe r regul a t o r y optio n s that would impos e fewer burde n s on MVPDs’ First Amendmen t right s ” is besid e the point . Because the FCC’s rules (like the under l y in g statu t e) are “not subst a n t i a l l y broad e r than neces s a r y to achie v e the govern m e n t’s intere s t,” Turner II, 520 U.S. at 218, they are consti t u t i o n a l. A content-neutra l regul a t i o n “will not be invali d simpl y becau s e … the gover n me n t’s inter es t could be ade qua t e l y served by some les s-speech- restri c t i v e altern a t i v e.” Id. (citati o n omitt e d). 44 2002) (affirmi n g gran t of prelimi n a r y inju n c t i o n enjo i n in g diss e mi n a t i o n of praye r b o o k that likel y infrin g e d plain t i f f’s copyr i g h t). To obtain a stands t i l l, a comp la i n a n t must show not only that it will suffe r irrep a r a b l e harm absen t a stay of the existin g contra c t’s ter ms, but also that it is likel y to preva i l on the merit s. Order ¶ 27 (JA___). That, in turn, requir e s a showin g — s u p p o r t e d by eviden c e — t h a t the comp l a i n a n t will likel y preva i l in establ i s h i n g (a) affili a t i o n-based discr i mi n a t i o n, and (b) an unreas o n a b l e restr a i n t of a progra m m i n g ve ndor’s abilit y to fairly comp et e. 47 C.F.R. § 76.1301(c). Thus, the stand s t i l l remed y is narro w l y tailo r e d like the under ly i n g rule itsel f. Furthermo r e, one of the prere q u i s i t e s to obtai n i n g stand s t i l l relie f — u n d e r the same stand a r d that courts apply in consid e r i n g stays — i s that partie s other than the co mp la i n a n t will not be substa n t i a l l y harmed. Order ¶ 27 (JA____). That requi r e men t will fully accom mo d a t e petit i o n e r s’ speech in ter e s t s as stands t i l l reque s t s are consid e r e d on a case-by- case basis. In sum, it was reaso n a b l e for the Commissi o n to concl u d e that the stand s t i l l rule, on its face, does not bur den substantially more speech than necess ar y to achiev e its object i v e s. See Washington State Grange, 552 U.S. at 449-50 (in asses s i n g a facia l First Am endmen t chall e n g e, court s “must be caref u l not to go beyon d the [rule s’] f acial requir e m e n t s a nd specu l a t e about 45 ‘hypoth e t i c a l’ or ‘imagi n a r y’ cases”). To the exten t petit i o n e r s belie v e that issua n c e of a stands t i l l order in a pa rtic u l a r case wou ld insuf f i c i e n t l y acco mmo d a t e First Amendment values, th ey are free to assert that argume n t in opposi n g stand s t i l l relie f in that case. Cf. Cablevision, 649 F.3d at 713 (reject i n g as unrip e an “as-applied pr een f o r c e m e n t chall e n g e ” under the First Amendmen t, but recog n i z i n g that cable opera t o r could asser t as-applie d argume n t s in partic u l a r cases). 12 b . The Prima Facie Rule. Petitione r s argue that the FCC’s rule requi r i n g comp l a i n a n t s to establ i s h a prima facie c a s e of progr a m carri a g e discr i mi n a t i o n is not narrow l y tailo r e d becau s e it do es not re quir e a showin g of “marke t power.” TWC Br. 47-51. Petition e r s are “barre d from raisi n g this point on appea l ” becau s e no party prese n t e d this argume n t to the Commissio n. Capital Tel. 12 In a reprise of one of their princi p a l theme s, petiti o n e r s conte n d that the stands t i l l proce d u r e is not narrow l y ta ilo r e d becau s e it does not requir e a showing of bottlen e c k market power. TWC Br. 53-54. As shown in Part I.B.1 above, howeve r, a findin g of bottl e n e c k power is not necess a r y to estab l i s h a viola t i o n of Section 616. The sort of antico mp e t i t i v e conduc t that the statute prohib i t s can occur wheth e r or not a “bottl e n e c k ” exist s. 46 Co. v. FCC, 777 F.2d 868, 871 (2d Cir. 1985) (citing 47 U.S.C. § 405). 13 In any event, petiti o n e r s’ argume n t lacks merit. Petition e r s canno t plaus i b l y claim that the prima facie r u l e impo s e s any burden on MVPDs’ speech, much less th at it “enco u r a g e s ” the filin g of co mplain t s. TWC Br. 22. That rule benefits cable operato r s. It establis h e s proced u r e s that allow a cable operat o r or other MVPD defenda n t to seek dismi s s a l of a progr a m ca rr i a g e comp l a i n t for failu r e to state a clai m. Order ¶ 16 (JA____-____). Far from “chill i n g … speech ” by “permi t [ t i n g ] bas ele s s program carria g e compla i n t s ” to procee d (T WC Br. 45), the requir e m e n t that co mp la i n a n t s establ i s h a prima facie c a s e of progr a m carri a g e discr i mi n a t i o n — s u p p o r t e d by evide n c e — i s car efu l l y crafte d “to ensure that only legiti m a t e co mpla i n t s procee d to furth e r evide n t i a r y proce e d i n g s.” Order ¶ 10 (JA____). In any event, petiti o n e r s have produ c e d no proof that the prima facie rule (or, for that matte r, a ny of the other progr am carri a g e rules) has actual l y “chil l e d ” any MVPD ’s speech. Petition e r s canno t susta i n 13 See also Adelphia Commc’ns Corp. v. FCC, 88 F.3d 1250, 1255-56 (D.C. Cir. 1996) (exhaus t i o n requi r e m e n t under 47 U.S .C. § 405 applie s to consti t u t i o n a l claims). For the same re ason, petiti o n e r s faile d to preser v e for appell a t e revie w their claim that the “F CC’s refusa l to requi r e a showi n g of bottle n e c k contr o l ” under the prima facie r u l e is “arbit r a r y and capric i o u s.” TWC Br. 51. 47 a First Amendmen t claim— mu c h less a facial claim — b a s e d on hypot h e t i c a l “chill i n g ” allega t i o n s. 14 Petition e r s likew i s e fail to substa n t i a t e their claim th at a “mark et power” showin g is needed to make a prima facie case. The program car riage statut e itself makes no refere n c e to “mark et power.” See 47 U.S.C. § 536. And the statu t e’s legis l a t i v e histo r y makes clear that Section 616 “does not amend exist i n g antit r u s t laws,” but inst ea d “provi d e s new FCC remedies ” that diffe r from tradi t i o n a l antit r u s t remed i e s. Senate Report at 29. Nor would it make sense for Congress to have enacte d a new statut e to prote c t again s t the antic o mp e t i t i v e effec t s of verti c a l integ r a t i o n if that statu t e simpl y repli c a t e d the antitrus t laws. Instead of requir i n g a “marke t power” showin g at the prima facie s t a g e, the FCC required a carriage di scr i mi n at i o n comp l a i n t to “cont a i n eviden c e that the defend a n t MVPD’s co nduc t has the effect of unreas o n a b l y restr a i n i n g the abilit y of the co mp la i n i n g progr a m m i n g vendo r to co mp et e fairly.” Order ¶ 15 (JA____). That requi r e men t is consi s t e n t with the terms of Section 616. See 47 U.S.C. § 536(a)(3). 14 See, e.g., Williams v. Town of Greenburgh, 535 F.3d 71, 78 (2d Cir. 2008) (plaint i f f’s First Amendmen t claim fail e d “as a matte r of law” because he produ ce d no evide n c e “that his speec h was either silenced or chilled”). 48 Petitione r s assert that the FCC, in constr u i n g this requi r e m e n t, has treated “ad v erse carriage ac tio n of any kind as an unreasonable r e s t r a i n t.” TWC Br. 50. They base that clai m on two order s in which the FCC’s Media Bureau design a t e d carria g e discri mi n a t i o n comp l a i n t s for hear i n g. 15 Even if petiti o n e r s had fairly charac t e r i z e d those Media Bureau orders, the Commiss i o n “is not boun d by the actio n s of its staff if the agenc y has not endor s e d those actio n s,” Comcast Corp. v. FCC, 526 F.3d 763, 769 (D.C. Cir. 2008), and the agenc y has never endor s e d the propo s i t i o n that all adverse carria g e decisi o n s “unrea s o n a b l y ” rest rai n program m e r s’ ability to comp ete fairly. Nor has the Media Bureau ever take n that positi o n. Rather, in the orders cited by petiti o n e r s, the Bureau found specif i c eviden c e that the challe n g e d carria g e decisi o n s had unreas o n a b l y restra i n e d an unaffi l i a t e d progra m m e r’s ability to co mp ete. As the Bureau’s analy s i s in those cases reflec t e d, a carriag e decisi o n consti t u t e s an “unre a s o n a b l e ” restr a i n t only if it has a materi a l effec t on an unaffi l i a t e d progra m m e r’s abilit y to co mp et e. For example, the Bureau found eviden c e th at Comcast’s “refus a l to expand [t ]he Tennis Channel’s distri b u t i o n ” was “part i c u l a r l y detrim e n t a l to the netwo r k ” 15 See Tennis Channel, Inc. v. Comcast Cable Commc’ns, LLC, 25 FCC Rcd 14149 (Med. Bur. 2010); Herring Broad., Inc. v. Time Warner Cable Inc., 23 FCC Rcd 14787 (Med. Bur. 2008). 49 because “Comcast is the domi n an t cable opera t o r in seven of the ten larg es t telev i s i o n marke t s.” Tennis Channel, 25 FCC Rcd at 14161 ¶ 20; see also Herring, 23 FCC Rcd at 14798 ¶ 19 (find in g that “TWC has ‘quas i monop o l i e s’ in key marke t s ” — i n c l u d i n g New York and Los Angeles— “ t h a t are essent i a l to WealthTV ’s long-term viabi l i t y ”). I I . T H E COMMI S S I O N PROPE R LY CONCL U D E D THAT IT HAS AUTHO R I T Y TO ISSUE PROGR A M CARRI A G E STAND S T I L L ORDER S GOVER N I N G CABLE OPERATOR S Although petit i o n e r s do not disput e that the FCC has statut o r y author i t y to order carria g e at th e conc lus i o n of program carria g e procee d i n g s, they maintai n that the Commu n icat i o n s Act bars the agen cy from grantin g inter i m relie f that prese r v e s the st atu s quo while a carri a g e compl a i n t is pendi n g again s t a cable opera t o r. TWC Br. 21-34. That argumen t is meritle s s. Like courts, administr a t i v e agenci e s may grant inter i m relie f in appro p r i a t e cases to prese r v e the statu s quo before addres s i n g the merits of a procee d i n g. The FCC is no ex cept i o n. In a variet y of contex t s, it has exerc i s e d its autho r i t y to grant “inte r i m injunc t i v e relief, in the form of a stand s t i l l order,” under Section 4(i) of the Communica t i o n s Act. See Order ¶ 26 (JA____). Section 4(i) empowe r s the Commiss i o n to “make such rules and regula t i o n s, … not incons i s t e n t with this [Act], as may be necess ar y in 50 the execut i o n of its functi o n s.” 47 U.S .C. § 154(i). In this procee d i n g, the Commissi o n also relie d on its autho r i t y to issue inter i m relie f in the progr a m carri a g e conte x t under Section 616 of th e Act. That provis i o n “expr e s s l y direct s the Commissi o n to ‘estab l i s h regula t i o n s gover n i n g progr a m carri a g e agreem e n t s and relat ed practi c e s.’” Order n.107 (JA____) (quotin g 47 U.S.C. § 536(a)). Petitioner s base their ch all e n g e to the FCC’s stands t i l l autho r i t y on Section 624(f)(1) of the Act, whic h prohi b i t s gover n m e n t autho r i t i e s (inclu d in g the Commiss i o n) from impo s i n g “requ i r em e n t s regar d i n g the provis i o n or conten t of cable servi c e s, ex cept as expres s l y provid e d in [Title VI of the Act].” 47 U.S.C. § 544(f)(1 ). Petition e r s conten d that Sectio n 624(f)(1) bars the FCC from issui n g progr a m carri a g e stand s t i l l order s gover n i n g cable opera t o r s b ecau s e Title VI does not expres s l y autho r i ze such orders. NCTA Br. 21-34. Before th e FCC, however, TWC not only failed to oppos e stand s t i ll relie f but affir m a t i v e l y sugge s t e d that the FCC may issue s u c h relief in cas es where the tr adit i o n a l four-part test for grant i n g stays is 51 satisfi e d — t h e very stand a r d the agenc y has adopt e d. 16 Petition e r s’ positi o n on appeal — t h a t Section 624(f)(1) unamb ig u o u s l y precl u d e s the FCC from award i n g inter i m injun c t i v e relie f in a pprop r i a t e cases — i s at odds with the text and purpo s e s of Section 616, and should be reject e d. In partic u la r, Section 624(f)(1) is not violate d here because, as the Commiss i o n expla i n e d ( Order n.107 (JA____)), Section 616(a)—a provi s i o n of Title VI—expres s l y direc t s the Commissi o n to “esta b l i s h regul a t i o n s gover n in g progr a m carri a g e agree m e n t s and relat e d pract i c e s.” 47 U.S.C. § 536(a). Given that Section 624(f)(1 ) exclude s from its reach requi r e m e n t s “expr e s s l y provi d e d in [Title VI],” th e langu a g e of Section 616(a) by itsel f refut e s petit i o n e r s’ argume n t. Indeed, Section 616(a)’s specif i c direc t i v e s regar d i n g the conten t of the FCC’s reg ulat i o n s confir m that the Commissi o n is author i z e d to issue stand s t i l l order s. Sections 616(a)(1) and (3) express l y direc t the FCC to 16 See Letter from Arthur Harding, Counsel for TWC, to Marlene Dortch, Secretar y, FCC, at 2 (filed June 1, 2011) (JA____) (“An MVPD should remain free to exer ci se its contr a c t u a l right s to drop or repos i t io n a progr a m m e r who has filed a program carriag e co mplai n t unless the Commission determines that the traditional factors for granting a stay are satisfied.”) (emphas i s added). TWC’s ne wfou n d object i o n s to the stand s t i l l proce d u r e are parti c u l a r l y puzzl i n g give n that the co mp any previously agreed to be bound by a simil a r stand s t i l l cond it i o n in conjun c t i o n with the FCC’s approv a l of TWC’s acquis i t i o n of cable sy ste ms forme r l y owned by Adelphia. See Adelphia Commc’ns Corp., 21 FCC Rcd 8203, 8337 (2006) (Appendix B, § 2(c)) (cited in Order n.116 (JA____)). 52 establi s h rules that “incl u d e provi s i o n s designed to prevent ” cable opera t o r s or other MVPDs from, inter alia, discri m i n a t i n g on the ba sis of affili a t i o n. 47 U.S.C. § 536(a)(1), (3) (emp hasi s a dded). Similarl y, Section 616(a)(2) expres s l y direc t s the FCC to estab l i s h rules that “incl u d e provi s i o n s designed to prohibit” cable opera t o r s or other MVPD s from coercing a programm e r to provid e exclus i v e rights as a condit i o n of carri a g e (or retali a t i n g again s t a progra m m e r that refus e s to do so). 47 U.S.C. § 536(a)(2) (emp has i s added). The stands t i l l proced u r e falls square l y within the expres s grant of rulem a k i n g autho r i ty under the first th ree subsec t i o n s of Section 616(a). Consiste n t with the terms of those provis i o n s, the stands t i l l proced u r e is “desi g n e d to preve n t” or “proh ib i t ” cable opera t o r s or other MVPDs from taking actio n s that the statut e forbi d s. If a program carriag e complai n a n t can show that it will likel y preva i l on the me rit s and will suffe r irrep a r a b l e harm absen t an order prese r v i n g the statu s quo ( i.e., two of the four prere q u i s i tes for obtai n i n g such relie f), issuan c e of such an order is neces s a r i l y desig n ed to preve n t any ongoi n g condu c t that likel y viola t e s the statu t e — c o n d u c t that other w i s e might persi s t for the durat i o n of the proce e d i n g, which may take many mon ths to resolve. It is no an swe r that the defen d a n t ultim a t e l y may preva i l (notwit h s t a n d i n g the comp l a i n a n t’s prior showi n g of likel i h o o d of 53 success on the merits); that is a risk atten d a n t to any form of preli mi n a r y injunc t i v e relief. As the Commissi o n expla i n e d, one way in which the stand s t i l l provis i o n is desig n e d to preve n t or proh ib it MVPDs from taki n g acti o n s in viola t i o n of the substan t i v e antid i s c r i mi n a t i o n provi s i o n is by disco u r a g i n g retal i a t i o n for the filin g of pr ogram carriage co mplaints. See Order ¶ 25 (JA___). Preventi n g retal i a t o r y condu c t itsel f furth er s the goals of the under l y in g antid i s c r i mi n a t i o n rule. Cf. Tepperwien v. Entergy Nuclear Operations, Inc., 663 F.3d 556, 567 (2d Cir. 2011) (“‘by preve n t i n g an empl o y e r from inte r f e r i n g (thr ough retali a t i o n) with an emplo y e e’s effor ts to secure or advanc e enforc e m e n t of [Title VII]’s basic guara n t e e s,’” anti- retali a t i o n provi s i o n furth e r s statu t e’s subst a n t i v e goal of prohi b i t i n g discr i mi n a t i o n) (citati o n omitt e d). Petition e r s repeat e d l y conten d that the standst i l l proced u r e can not protec t agains t retali a t i o n becaus e there may be situat i o n s where an MVPD’s decisi o n not to carry a netwo r k itsel f pr eci p i t a t e s a comp la i n t and reques t for stands t i l l relie f, so that no furthe r reta l i a t i o n is possi b l e. NCTA Br. 29-30, 45, 58. Petition e r s, howeve r, overlo o k other situa t i o n s. For examp l e, an MVPD may propo s e that, upon expir a t i o n of a carria g e contra c t, it will contin u e carria g e of an unaffi l i a t e d ne tw o r k, but only on new terms that are 54 less favora b l e than those the MVPD a ffords to its own affil i a t e d netwo r k s (such as carri a g e on a progra m mi n g tier with a limi te d subsc r ib e r base). In that scenar i o, the unaffi l i a t e d netw o r k’s filing of a progra m carri a g e co mp la i n t may cause the MVPD to retal i a t e by takin g a more severe discr i mi n a t o r y actio n — i n c l u d i n g dropp i n g the comp l a i n i n g netwo r k altoge t h e r. A remedy that preven t s su ch retali a t i o n is design e d to preven t a viola t i o n of the substan t i v e rule. 17 In any event, petit i o n e r s are incor r e c t in assumi n g (NCTA Br. 29) that the Commissio n’s sole ration a l e for sta nd s t i l l relie f was to preve n t retal i a t i o n. As the agency explai n e d, “absent a stand s t i l l, progr a m m i n g vendo r s may feel co mpelled to agree to the carri age deman d s of MVPDs, even if these demand s violat e the progra m carria g e rule s, in order to maint a i n carri a g e of video progr a m mi n g in which they have made subst a n t i a l invest m e n t s.” Order ¶ 25 (JA____) (citin g submi s s i o n s from unaff i l i a t e d netwo r k s). Indeed, withou t inter i m relie f, the ultim a t e relie f award e d (i n the form of a carri a g e order) could be worth l e s s if time-sensi t i v e progr a m mi n g (such as 17 The Commissi o n left open the possi b il i t y that Section 624(f)(1) might bar the issua n c e of progr a m carri a g e stand s t i l l order s “in some c i r cu ms t a n c e s.” Order n.107 (JA____). It asked for furth e r comme n t on that issue. Order ¶ 60 (JA____). Even assumi n g that st ands t i l l order s might be prohib i t e d in some c a s e s, petiti o n e r s canno t preva i l on their facia l chall e n g e to the stands t i l l rule unless they show that Section 624(f)(1) bans stands t i l l s in all c a s e s invol v i n g cable opera t o r s. They ha ve failed to make th at showing. 55 seasona l sport s progr a m mi n g) is i nvolv e d ; by the time a progr a m carri a g e proce e d i n g has concl u d e d, the damag e al ready may have been done. The entry of a stay pendi n g furth e r revie w is a tradit i o n a l means of preve n t i n g poten t i a l l y unlaw f u l condu c t while a disput e is resol v e d. Just as judic i a l stays are desi g n e d “to preve n t irre pa r a b l e injury so as to preser v e the court’s ability to render a me aning f u l decisi o n on the merits,” 18 program carri a g e stand s t i l l order s are desig n e d to pr even t irrepa r a b l e injury in order to prese r v e the FCC’s abilit y to respo n d effec t i v e l y to carri a g e comp l a i n t s. Finally, petiti o n e r s’ readin g of the st atut e is not only contra r y to the text and remedi a l purpos e s of Secti on 616; it also make s little sense as a practi c a l matte r. Even under petit i o n e r s ’ readin g of the statut e, stands t i l l order s would not be preclu d e d in all progra m ca rri a g e cases. By its terms, Section 624(f)(1) does not apply to non- cable MVPD service s. It refers only to “requ ir e m e n t s regar d i n g the provi s i o n or conte n t of cable s e r v i c e s.” 47 U.S.C. § 544(f)(1) (emphas i s adde d). Under petiti o n e r s’ propos e d inter p r e t a t i o n, Section 624(f)(1) woul d bar the FCC from issui n g stan d s t il l order s gover n i n g cable opera t o r s, but th e agency would remain free to issue 18 WarnerVision Entm’t, Inc. v. Empire of Carolina, Inc., 101 F.3d 259, 261 (2d Cir. 1996) (intern a l quota t i o n marks omitt e d) 56 such orders again s t other MVPDs, su ch as satel l i t e telev i s i o n provi d e r s. 19 Thus, as petiti o n e r s constr u e the st atut e, the Commissi o n could issue stand s t i l l order s to preve n t misco n d u c t by DIRECTV or DISH Network, but it would be power l e s s to order sta nd s t i l l s to stop misco n d u c t by TWC or Comcast (the larges t MVPD in the na tio n). It is highl y unlik e l y that Congress inten d e d to creat e such an anoma l o u s regul a t o r y regim e. I I I . TH E COMMISSION COM PLI ED WITH THE APA WH EN IT CODI FIE D ITS ST ANDS T I L L PROCE D U R E Petitioner s argue that the Commissi o n’s codifi c a t i o n of its proced u r e for grant i n g stand s t i l l relie f was “a rbi t r a r y and capri c i o u s ” (NCTA Br. 40- 47), and that the Commissi o n failed to satisf y the APA’s notice requi r e m e n t s befor e codif y i n g that proced u r e (TWC Br. 56-60; NCTA Br. 34-39). Neither conten t i o n has merit. A. T h e Commi s s i o n Acted Well Withi n Its Discret i o n In Codify i n g Its Stands t i l l Proced u re . Petitione r s mainta i n that the Co mmissi o n abuse d its discr e t i o n in codify i n g its stands t i l l proced u r e becau s e the “costs ” of the stands t i l l rule 19 Apart from the Commissio n’s direct au tho r i t y to grant stand s t i l l s pursua n t to the expres s mandat e of S ection 616, it is undis p u te d that the Commiss i o n has a u t h o r i ty to impos e stand s t i ll s on non-cable MVPDs under Section 4(i) of the Communic a t i o n s Act, 47 U.S.C. § 154(i). See Order ¶ 26 (JA____-____). 57 supposed l y exceed it s “benef i t s.” NCTA Br. 40-47. This argume n t, however, overloo k s the case-by-case nature of stands t i l l relief. In evalua t i n g stands t i l l reques t s, the Commissi o n follow s the same approa c h that courts use when cons ide r i n g stay motions. The Commissi o n speci f i c a l l y asses s e s, inter alia, whether “grant of a stay will … substa n t i a l l y harm other intere s t e d par ti e s ” and wheth e r “the publi c inter e s t favor s gran t of a stay.” Order ¶ 27 (JA___-___). Thus, the costs of grant i n g stand s t i l l relie f in any parti c u l a r case will be fully consi d e r e d and weigh e d again s t the benef i t s in the conte x t of case-by- case ad judication. Indeed, NCTA “[r]eco g n i z [ e s ] the highl y fact-inten s i v e na tur e of progr a m-carria g e dispu t e s.” NCTA Br. 41. In appropr i a t e cases, stands t i l l relie f will be denie d. While petit i o n e r s specu l a t e that “err o n e o u s stand s t i l l s ” may be grant e d (NCTA Br. 42), the FCC’s stan dar d for grantin g such relief is the same one that TWC itself propose d. See n. 16 supra. A complain a n t cannot obtain a stand s t i l l unles s it meets the strin g e n t four-part test for preli mi n a r y injun c t i v e relief. And, as the Commissio n em pha s i z e d, “‘inju n c t i v e relie f [is] an extra o r d i n a r y reme d y that may only be award e d upon a clear showi n g that the [co mp l a i n an t ] is entit l e d to such relie f.’” Order n.110 (JA___) (quoti n g Winter, 555 U.S. at 21). The risk of erro ne o u s stands t i l l orders is theref o r e speculative at best. 58 Petitioner s assert that the Comm iss i o n will be unabl e “to provi d e meanin g f u l relief to an MVPD” in the ev ent of an errone o u s stand s t i l l order. NCTA Br. 41. In partic u l a r, they c onten d that the av aila b i l i t y of interi m relie f is undul y burden s o me becau s e inter l o c u t o r y revie w will not be avail a b l e “to polic e and deter erron e o u s standst i l l s.” NCTA Br. 42. That is incorr e c t. Nothing prev en t s a disapp o i n t e d cable opera t o r again s t whom stand s t i l l relie f is grant e d from seeki n g a stay of such relief from the full Commiss i o n. See 47 C.F.R. §§ 1.43-1.45 (s tay proce d u r e s), 1.298 (allowi n g inter l o c u t o r y relie f in cases befor e ALJ); see also Tennis Channel, Inc. v. Comcast Cable Commc’ns, LLC, FCC 12-50 (releas e d May 14, 2012) (stayin g an ALJ’s decisi o n requi r i n g Comcast to carry the Tennis Channel on the same tier as Comcast’s affil i a t e d sport s netwo r k s). 20 Additiona l l y, an MVPD that objec t s to a stand s t i l l order can always seek a judi cia l stay of the order under the All Writs Act, 28 U.S.C. § 1651. See, e.g., Reynolds Metals Co. v. FERC, 777 F.2d 760, 762 (D.C. Cir. 1985). 20 FCC Rule 76.10, cited by NCTA (Br. 42 ), is not to the contrary. That provi s i o n bars a litig a n t from seeki n g “rev i e w ” of an inter l o c u t o r y order. See 47 C.F.R. § 76.10(a). Read in conte x t, the provis i o n refers to a reques t for review on the merits in the form of an “appl i c a t i o n for revie w,” see id. § 76.10(a)(2). It does not state that a reques t for a stay of an interl o c u t o r y order (as oppos e d to revie w on the me rit s) will not be enter t a i n e d. 59 In the event that an MVPD ultimat e l y prevai l e d after issuan c e of a stands t i l l order, the Commissi o n explai n e d that its staff could devel o p an appro p r i a t e remed y for the MVPD “on a case-by-case basis.” Order ¶ 29 (JA____). The FCC’s resolu t i o n of a di ffic u l t remed i a l issue in an isola t e d case might be an approp r i a t e subjec t fo r an as-applie d chall e n g e to a future Commiss i o n order. But at this point, petiti o n e r s’ conjec t u r e about reme d i a l issue s provi d e s no basis for wholes a l e inval i d a t i o n of the stands t i l l rule. 21 Where a stands t i l l is justif i e d, the rule will yield signi f i c a n t benef i t s. As shown above, a stands t i l l may be “neces s a r y to preven t the likely occurr e n c e of one of the practi c e s e xpr e s s l y proh ib i t ed ” by Section 616. Order ¶ 25 & n.107 (JA____, ____); see also Part II, supra (discus s i n g retal i a t i o n and press u r e on unaff i l i a t e d netwo r k s to agree to unlaw f u l carri a g e deman d s). While petit i o n e r s asser t th at the Commissi o n had insuff i c i e n t evide n c e that stand s t i l l relie f was n eed ed (NCTA Br. 44- 47), they do not disput e that the FCC received subm i s s i o n s from unaff i l i a t e d netwo r k s 21 Equally unfoun d e d is petiti o n e r s’ ar gume n t that stand s t i l l relie f will disto r t negot i a t i o n s which, NCTA conte nd s, “typic a l l y occur in the final days or weeks of the existin g contra c t.” NCTA Br. 43. Where issuan c e of stands t i l l relie f is a realis t i c possi b i l i t y , such negoti a t i o n s simpl y will occur earli e r. Furthermo r e, the Commissi o n ex pla i n e d that a stands t i l l may be vacat ed if the adjudic a t o r “finds that the stay is having a negat i v e effect on settl e men t negot i a t i o n s or is otherw i s e no longer in the public intere s t.” Order ¶ 27 (JA___). 60 attesti n g to the risk of retali a t i o n absen t a stands t i l l. Order n.101 (JA___). And it is well settl e d that agenc i e s ca n “adop t proph y l a c t i c rules to preve n t poten t i a l probl e ms befor e they arise. An agency need not suffe r the flood before build i n g the levee.” Stilwell v. Office of Thrift Supervision, 569 F.3d 514, 519 (D.C. Cir. 2009). The pot en t i a l for antic o mp e t i t i v e condu c t by vertic a l l y integr a t e d MVPDs jus tifi e d the FCC’s cod ific a t i o n of a “proph y l a c t i c ” stand s t i l l rule “regar d l e s s of whethe r there was clear eviden c e of the existen c e of su ch evils.” Viacom Int’l Inc. v. FCC, 672 F.2d 1034, 1040 (2d Cir. 1982). B. T h e Com mis s i o n Compli e d With The APA’s No t i c e Requi re m e n t s . Before an agency may a dopt a rule, the APA generall y requir es that the agency provide notice of “eith er the ter m s or substan c e of the propos e d rule or a descri p t i o n of the subjec t s and i ssues involv e d.” 5 U.S.C. § 553(b)(3). This notice requi r e m e n t, howeve r, does not apply to “rules of agency organi z a t i o n, proced u r e, or practi c e.” 5 U.S.C. § 553(b)(A). The Commissi o n corre c t l y concl u d e d that its codif i c a t i o n of its exist i n g stand s t i l l proced u r e fell within this excep t i o n to the notice requir e m e n t. Order ¶ 36 (JA ____-____). Courts have found sever a l FCC rules to be purel y proce d u r a l, inclu d i n g the agenc y’s “hard look” rules unde r which it may summa r i l y dismi s s a 61 defective license applica t i o n. As the court expla i n e d in JEM Broadcasting Co. v. FCC, 22 F.3d 320, 327 (D.C. Cir. 1994), those rules were proce d u r a l becaus e they “did not change the s ubsta n t i v e stand a r d s by which the FCC evaluate s licens e applic a t i o n s.” This Court appli e d the same analy s i s in Notaro v. Luther, 800 F.2d 290 (2d Cir. 1986) ( per curiam), where it held that an “appro a c h set out in [a] traini n g ai d” issue d by a parol e commi s s i o n fell within the except i o n to the APA’s notice requir e m e n t becaus e the aid “accor d [ e d ] with the Commissi o n’s re gula t i o n s and past practi c e s.” Id. at 291 (citing 5 U.S.C. § 553(b)(A)); see also Donovan v. Red Star Marine Servs., Inc., 739 F.2d 774, 783 (2d Cir. 1984) (“rules that do not chang e ‘exis t i n g right s and obliga t i o n s’” are exempt from APA notice). The FCC’s codifi c a t i o n of its longs t a n d i n g pro ced u r e for granti n g stands t i l l s falls squarel y within this preced e n t. The Commiss i o n has grant e d inter i m injun c t i v e relie f in a varie t y of contex t s. See Order n.104 (JA___) (citing examp l e s). Even befor e the Commissi o n codif i ed its progr a m carri a g e stand s t i l l proce d u r e, FCC rules permi t t e d parti e s to reque s t “temp o r a r y relie f ” from the agency pendi n g resolu t i o n of a co mp la i n t agains t an MVPD. See, e.g., 47 C.F.R. §§ 1.45(d), 1.298(a), 76.7(e)(1). Such “tempo r a r y relie f ” plain l y encomp a s s e s a stands t i l l order to preser v e the status quo. Indeed, more than 40 years ago, 62 the Supreme Court upheld the FCC’s is suan c e of an order barri n g a cable opera t o r from expan d i n g its servi c e area while the agency rev iewed a co mp la i n t agains t the operat o r. United States v. Southwestern Cable Co., 392 U.S. 157, 178-81 (1968). Petitione r s urge the Court to disreg a r d this preced e n t by assert i n g that “[t]h e FCC has iden t i f i e d no estab l i s h e d pract i c e of order i n g such relie f in program-carriage cases.” NCTA Br. 35 (emphas i s added). That frames the releva n t questi o n too narrow l y. Sta ndsti l l relie f, like any form of inter i m injunc t i v e relief, may be grante d in a broad array of conte x t s. Thus, it does not matte r that the FCC has not grant e d such relief specif i c a l l y in the program carriag e context any more than it would matte r in deter mi n i n g wheth e r a court has autho r i t y to grant a stay that it had not previo u s l y grant e d such relief in that partic u l a r catego r y of cas es. Nor is it surpr i s i n g that the FCC has not yet grant e d a stands t i l l order in the program carriage co ntext. At the time the Order w a s adopt e d, only eleve n prog r a m carri a g e comp l a i n t s had been filed since Congress en act e d Section 616 in 1992. Order n.27 63 (JA____). 22 And, as the Commissi o n expl ai n e d, standst i l l relief is an extrao r d i n a r y remed y rarel y grant e d. See Order n.110 (JA___). 23 Petition e r s furth e r conte n d that the APA notice requi r e men t appli e s to the stands t i l l rule becaus e the ru le affe c t s “subs t a n t i v e right s.” TWC Br. 57. Because the rule mer ely codifi e s an exist i n g proce d u r e, howeve r, it does not affect substa n t i v e rights any more th an the pre-existi n g stands t i l l proced u r e did. Order n.149 (JA___). In any event, “all proce d u r a l rules affec t subst a n t ive right s to great e r or lesse r degre e.” Lamoille Valley R.R. Co. v. ICC, 711 F.2d 295, 328 (D.C. Cir. 1983); see also James V. Hurson Assocs., Inc. v. Glickman, 229 F.3d 277, 281 (D.C. Cir. 2000) (“an other w i s e- proced u r a l rule does not becom e a s ubst a n t i v e one, for notic e-and-commen t purpo s e s, simp ly becau s e it impose s a bur den on regula t e d partie s ”). Indeed, the same could have been said of th e FCC’s rules allowin g the ag ency to summa r i l y dismi s s defec t i v e licen s e app lic a t i o n s, yet that did not preven t the 22 Only one additi o n a l co mp l a i n t has been fi led since the Order was adopte d. 23 Petition e r s claim to find an inc ons i s t e n c y betwe e n the Commissi o n’s positio n that notice was not requir e d here and its decisi o n to seek co m men t befor e adopt i n g the progr a m acces s st and s t i l l rule. NCTA Br. 36-37; TWC Br. 59-60. There is no incon s i s t e n c y. “Agencies are free to grant additi o n a l proce d u r a l right s in the exerci s e of their discr e t i o n.” Vermont Yankee Nuclear Power Corp. v. Natural Res. Def. Council, 435 U.S. 519, 524 (1978). That the agency previo u s l y chose to seek co mmen t on stands t i l l proced u r e s in the progr am acces s conte x t does not mean that it was required by the APA to seek co m men t ag ain on such relief in th e rel ated program car riage context. 64 rules from being exemp t from APA notice requi r e m e n t s. JEM, 22 F.3d at 326-28. In any event, even if the Commissi o n was requi r e d to provid e notic e of the stand s t i l l rule, it provi d e d suffi c i e n t notic e to satis f y the APA. In the NPRM, the FCC requeste d co mmen t on wh eth e r it “shou l d adopt addit i o n a l rules to prote c t progr a m m e r s from poten t i a l retal i a t i o n if they file a co mp laint.” NPRM ¶ 16 (JA____). The stands t i l l rule was “a ‘logi c a l outgro w t h’ of this propos a l ” becaus e th e rule “will help to preven t retal i a t i o n while a progra m carria g e co mp la i n t is pendin g.” Order ¶ 36 (JA____). Therefor e, the agen cy’s not ice co mp lied with the APA. See Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158, 174 (2007). Petition e r s fault the Commissi o n for faili n g to propo s e any “spec i f i c ” rule concer n i n g stands t i l l s. NCTA Br. 38. As this Court has recog n i z e d, howeve r, the APA “does not requi r e an agenc y to publi s h in advan c e every precis e propos a l which it may u ltima t e l y adopt as a rule.” Mt. Mansfield, 442 F.2d at 488. Indeed, the APA does not requi r e a rulemak i n g notic e to conta i n any r u l e propos a l s. A notice will suffic e if it contai n s “a descri p t i o n of the subj e c t s and issu e s invo lv e d.” 5 U.S.C. § 553(b)(3); see also National Black Media Coal. v. FCC, 822 F.2d 277, 283 (2d Cir. 1987) (notice is adequ a t e if 65 it “fairl y appri s e [ s ] inter e s t e d perso n s of the subjec t s and issues ” of the rulem a k i n g) (intern al quota t i o n marks omitt e d). Because the APA “does not requir e a precis e notice of each as pect of the regulat i o n s eventua l l y adopted,” an agenc y’s notic e is adequ a t e “so long as it afford s intere s t e d partie s a reas o n a b l e oppor tu n it y to parti c i p a t e in the rulema k i n g proces s.” State of New York Dep’t of Soc. Servs. v. Shalala, 21 F.3d 485, 495 (2d Cir. 1994) (interna l quota t i o n marks omitt e d). The notice here m e t that requir e m e n t. It informe d the publi c “of the issue s cover e d ” by the rulema k i n g and “the purpo s e ” of “any poten t i a l regul a t i o n.” Nuvio Corp. v. FCC, 473 F.3d 302, 310 (D.C. Cir. 2006). In partic u l a r, the NPRM notifi e d intere s t e d partie s that the FCC was c onsi d e r i n g the adopt i o n of “rule s to prote c t progr a m m e r s from poten t i a l retal i a t i o n if they file a comp la i n t.” NPRM ¶ 16 (JA____). That propos a l led to the stand s t i l l rule. Order ¶ 36 (JA____). Petition e r s quest i o n the relat i o n s h i p between the stan dst i l l rule and the preven t i o n of retali a t i o n. NCTA Br . 38; TWC Br. 58. As noted above, howeve r, it was entire l y reason a b l e for th e Commissio n to antici p a t e that, in the absenc e of a stands t i l l, an MVPD might respon d to a progra m carri a g e co mp l a i n t by threat e n i n g to drop the comp l a i n a n t’s progr a m mi n g unle s s the co mp lai n a n t withdr e w its co mplai n t a nd accede d to carria g e deman d s that 66 violate Section 616. See Part II, supra. Because “such a possib i l i t y ” was “reaso n a b l y forese e a b l e,” Long Island Care at Home, 551 U.S. at 175, the stands t i l l rule was a “logic a l outgr o w t h ” of the Commissi o n’s propos a l to consid e r measu r e s to preven t retal i a t i o n. C O N C L U S I O N For the foreg o i n g reaso n s, the Court shoul d deny the petit i o n s for review. Respectf u l l y submi t t e d, JOSEPH F. WAYLAND ACTING ASSISTANT ATTORNEY GENERAL CATHERINE G. O’SULLIVAN NANCY C. GARRISON ATTORNEYS UNITED STATES DEPARTMENT OF JUSTICE WASHINGTON, D.C. 20530 SEAN A. LEV ACTING GENERAL COUNSEL PETER KARANJIA DEPUTY GENERAL COUNSEL JACOB M. LEWIS ASSOCIATE GENERAL COUNSEL /s/ James M. Carr JAMES M. CARR COUNSEL FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 (202) 418-1762 June 26, 2012 IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT TIME WARNER CABLE INC. AND NATIONAL CABLE & TELECOMMUNICATIONS ASSOCIATION, PETITIONERS, v. FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS. NO. 11-4138 (CONSOLIDATED WITH NO. 11- 5152) CERTIFICATE OF COMPLIANCE Pursuant to the requi r e men t s of Fe d. R. App. P. 32(a)(7), I hereby certi f y that the acco m p a n y i n g Brief for Responde n t s in the capt i o n e d case conta i n s 13,914 words. /s/ James M. Carr James M. Carr Counsel Federal Communic a t i o n s Commissi o n Washingt o n, D.C. 20554 (202) 418-1740 (Telephon e) (202) 418-2819 (Fax) June 26, 2012 STATUTORY APPENDIX 5 U.S.C. § 553 47 U.S.C. § 405 47 U.S.C. § 536 47 U.S.C. § 544 47 C.F.R. § 76.1300 47 C.F.R. § 76.1301 47 C.F.R. § 76.1302 5 U.S.C. § 553 UNITED STATES CODE ANNOTATED TITLE 5. GOVERNMENT ORGANIZATION AND EMPLOYEES PART I. THE AGENCIES GENERALLY CHAPTER 5. ADMINISTRATIVE PROCEDURE SUBCHAPTER II. ADMINISTRATIVE PROCEDURE § 553. Rule makin g ( a ) This secti o n applies, accord i n g to the provis i o n s thereo f, except to the extent that there is involv e d-- ( 1 ) a milita r y or forei g n affai r s funct i o n of the United States; or ( 2 ) a matter relat i n g to agenc y mana g e m e n t or perso n n e l or to publi c prope r ty, loans, grants, benefi t s, or contra c t s. ( b ) General notice of propos e d rule maki n g shal l be publ is h e d in the Federal Register, unless person s subjec t ther e t o are named and eithe r perso n a l l y serve d or otherw i s e have actual noti ce thereo f in accord ance with law. The notice shall includ e-- ( 1 ) a statement of the ti me, place, and natur e of pub li c rule makin g proce e d i n g s ; ( 2 ) refere n c e to the legal autho r it y unde r which the rule is propo s e d ; and ( 3 ) either the terms or subst a n c e of the propo s e d rule or a descr i p t io n of the subje c t s and issue s involv e d. Except when notice or hearin g is requir e d by statu t e, this subsect i o n does not appl y-- ( A ) to interp r e t a t i v e rules, genera l state m e n t s of polic y, or rules of agenc y organi z a t i o n, proced u r e, or practi c e ; or (B) when the agen cy for good cause finds (and incorp o r a t e s the findin g and a brief stat em e n t of reason s theref o r in the rules issued) that notice and publi c proce d u r e there o n are impra c t i c a b l e, unneces s a r y, or contrar y to the publi c inter e s t. (c) After notic e requi r e d by this secti o n, the ag ency shall give interest e d perso n s an oppor tu n it y to parti c i p a t e in the rule makin g thro u g h submi s s i o n of writte n data, views, or argume n t s wi th or witho u t oppor t u n i t y for oral prese n t a t i o n. After consi d e r a t io n of the relevan t matter presen t e d, the agency shall incorp o r a t e in the rules ad opte d a co ncis e genera l statem e n t of their basis and purpo s e. When rules are re qui r e d by statu t e to be made on the recor d after oppor t u n i t y for an agenc y heari n g, secti o n s 556 and 557 of this title apply inste a d of this subsec t i o n. ( d ) The requir e d public a t i o n or servic e of a subst a n t i v e rule shall be made not less than 30 days before its effect i v e date, except-- ( 1 ) a substan t i v e rule which grant s or recog n i z e s an exemp t i o n or relie v e s a restri c t i o n ; ( 2 ) interp r e t a t i v e rules and statem e n t s of policy ; or ( 3 ) as otherwi s e provid e d by the agenc y for good cause foun d and publis h e d with the rule. (e) Each agency shall give an intere s t e d perso n the right to petit i o n for the issuan c e, amend me n t, or repeal of a rule. 47 U.S.C. § 405 UNITED STATES CODE ANNOTATED TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS CHAPTER 5. WIRE OR RADIO COMMUNICATION SUBCHAPTER IV. PROCEDURAL AND ADMINISTRATIVE PROVISIONS § 405. Petiti o n for recons i d e r a t i o n ; proce d u r e ; dispo s i t i o n ; time of filing ; additi o n a l eviden c e ; time for dispo s i t i o n of petit i o n for reconsi d e r a t i o n of order concl u d i n g heari n g or in ves t i g a t i o n ; appea l of order ( a ) After an order, decisi o n, report, or actio n has been made or taken in any proce e d i n g by the Commissi o n, or by a ny desig n a t e d autho r i t y withi n the Commiss i o n pursu a n t to a deleg a t i o n un der secti o n 155(c)(1) of this title, any party there t o, or any other pers on aggrie v e d or whose intere s t s are advers e l y affec t e d th ere b y, may petiti o n for recon s i d e r a t i o n only to the autho r i ty makin g or takin g the order, d ecisi o n, report, or action ; and it shall be lawfu l for such autho r it y, whethe r it be the Commissi o n or other autho r i t y desig n a t e d under secti o n 155(c) (1) of this title, in its discr e t i o n, to grant such a recons i d e r a t i o n if suffi c i e n t reaso n th ere f o r be made to appea r. A petitio n for recon s id e r a t i o n must be filed w ithi n thirt y days from the date upon which publi c notic e is given of the order, decisi o n, report, or actio n co mp la i n e d of. No such applic a t i o n sh al l excu s e any pers o n from comp l y i n g with or obeyi n g any order, decisi o n, report, or action of the Commissi o n, or opera t e in any manne r to stay or postpo n e the enforc e m e n t thereo f, withou t the specia l order of the Commissi o n. The filing of a petiti o n for recon s i d e r a t i o n shall not be a condi t i o n preced e n t to judici a l review of any such order, decisi o n, report, or action, except where the party seeki n g such review (1) was not a party to the pr oce e d i n g s resul t in g in such order, decisi o n, report, or action, or (2) relies on quest i o n s of fact or law upon which the Commissi o n, or desig n a t e d autho r i t y withi n the Commissi o n, has been affor d e d no oppor t u n i ty to pa ss. The Commiss i o n, or desig n a t e d autho r i t y withi n the Commissi o n, sha ll enter an order, with a concis e s t a t e m e n t of the reason s there f o r, de nyin g a petit i o n for recon s i d e r a t i o n or grant i n g such petit i o n, in whole or in part, and order i n g such furth e r procee d i n g s as may be approp r i a t e : Provided, That in any cas e where such petit i o n relat e s to an instr u men t of au tho r i za t i o n grant e d witho u t a heari n g, the Commiss i o n, or desig n a t e d autho r i t y within the Commissi o n, shall take such action withi n ninet y days of the filing of such petiti o n. Reconsid e r a t i o n s shall be gover n e d by such gener a l rules as the Commiss i o n may establ i s h, except that no evid en c e other than newly discov e r e d eviden c e, evidenc e which has beco me av ailable onl y since the origi n a l taking of evidence, or evidence wh ich the Commiss i o n or desig n a t e d autho r i ty withi n the Commiss i o n belie v e s should have been taken in the origi n a l proce e d i n g shall be tak en on any recons i d e r a t i o n. The time within which a petiti o n for review must be f iled in a proce e d i n g to which secti o n 402(a) of this title appli e s, or withi n which an appea l must be taken under secti o n 402(b) of this title in any case, shall be compu t e d from the date upon which the Commissi o n gives publi c notice of the order, decisi o n, report, or action co mpl ai n e d of. ( b ) ( 1 ) Within 90 days after recei v i n g a petit i o n for recon s i d e r a t i o n of an order concl u d i n g a hearin g under secti o n 204(a) of this title or concl u d i n g an inves t i g a t i o n under secti o n 208(b) of th is title, the Commissi o n shall issue an order grant i n g or denyi n g such petit i o n. ( 2 ) Any order issue d under parag r a p h (1) shall be a final order and may be appeal e d under secti o n 402(a) of this title. 47 U.S.C. § 536 UNITED STATES CODE ANNOTATED TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS CHAPTER 5. WIRE OR RADIO COMMUNICATION SUBCHAPTER V-A. CABLE COMMUNICATIONS PART II. USE OF CABLE CHANNELS AND CABLE OWNERSHIP RESTRICTIONS § 536. Regula t i o n of carria g e agreem e n t s (a) Regulati o n s Within one year after October 5, 1992, the Commissi o n shall estab l i s h regul a t i o n s gover n i n g progr a m carri a g e agree m e n t s and relat e d pract i c e s betwee n cable operat o r s or othe r multi c h a n n e l video progr a m mi n g dist r ib u to r s and video prog r a m mi n g ve ndo r s. Such regul a t i o n s shall-- ( 1 ) includ e provi s i o n s desig n e d to pr even t a cable opera t o r or other multi c h a n n e l video progr a m m i n g distr i b u t o r from requi r i n g a financ i a l intere s t in a program servic e as a c ondi t i o n for carri a g e on one or more of such opera t o r 's syste ms ; ( 2 ) includ e provi s i o n s desig n e d to pr ohib it a cable opera t o r or other multi c h a n n e l video progr a m m i n g di str i b u t o r from coerc i n g a video progr a m m i n g vendo r to provid e, and fro m retal i a t i n g again s t such a vendor for faili n g to provi d e, exclus i v e ri ght s again s t other multi c h a n n e l video progr a m m i n g distr i b u t o r s as a condi t i o n of carri a g e on a syste m; ( 3 ) contai n provi s i o n s desig n e d to preven t a multic h an n e l video prog r a m m i n g distr i b u t o r from engag i n g in condu c t the effec t of which is to unrea s o n a b l y restr a i n the abili t y of an unaff i l i a t e d video progr a m mi n g vend o r to comp e t e fair l y by disc r i mi n a t i n g in video prog r a m mi n g distr i b u t i o n on the basis of affil i a t i o n or nonaf f i l i a t i o n of vendo r s in the selec t i o n, terms, or condi ti o n s for carri a g e of video progr a m mi n g provi d ed by such vendo r s ; ( 4 ) provid e for exped i t e d revie w of any comp l a i n t s made by a video progr a m m i n g vendo r pursu a n t to this secti o n ; ( 5 ) provid e for approp r i a t e penal t i e s and remed i e s fo r violat i o n s of this subsec t i o n, includi n g carria g e ; and ( 6 ) provide penalt i e s to be assess e d ag ain s t any perso n filin g a frivo l o u s co mp l a i n t pursu a n t to this sectio n. (b) “Video progr a m mi n g vendo r ” defin e d As used in this secti o n, the term “vide o progr a m mi n g vendo r ” means a person engag e d in the produ c t io n, crea t i o n, or whole s a l e dist r ib u t i o n of video progr a m mi n g for sale. 47 U.S.C. § 544 UNITED STATES CODE ANNOTATED TITLE 47. TELEGRAPHS, TELEPHONES, AND RADIOTELEGRAPHS CHAPTER 5. WIRE OR RADIO COMMUNICATION SUBCHAPTER V-A. CABLE COMMUNICATIONS PART III. FRANCHISING AND REGULATION § 544. Regul a t i o n of servi c e s , facil i t i e s , and equip m e n t (a) Regulati o n by franc h i s i n g autho r i t y Any franc h i s i n g autho r i ty may not re gulate the serv ices, facili tie s, and equip me n t provi d e d by a cable opera t o r ex cept to the extent co nsis t e n t with this subchap t e r. (b) Requests for propo s a l s ; estab l i s h m e n t and enfor c e m e n t of requi r e m e n t s In the case of any franc h i s e grant e d after the effec t i v e date of this subch a p t e r, the franc h i s i n g autho r i ty, to the exten t relat e d to the estab l i s h m e n t or opera t i o n of a cable syste m-- ( 1 ) in its reque s t for propo s a l s for a franc h i s e (includ i n g reques t s for renewa l propos a l s, subject to secti o n 546 of this title), may establ i s h requi r e m e n t s for facil i t i e s and equip me n t, but may not, except as provi d ed in subse c t i o n (h) of this secti o n, establ i s h requi r e m e n t s for video progr a m m i n g or other infor ma t i o n servi c e s ; and ( 2 ) subject to sectio n 545 of this title, may enforc e any requir e m e n t s contai n e d within the franch i s e-- ( A ) for facil i t i e s and equip me n t ; and (B) for broad categ o r i e s of video progr a m mi n g or other servi c e s. (c) Enforcem e n t autho r i ty respe c t i n g franc h i s e s effec t i v e under prior law 47 U.S.C. § 544 (cont’d) Page 2 In the case of any franc h i s e in effec t on the effect i v e date of this subcha p t e r, the franc h i s i n g autho r i t y may, subje c t to sectio n 545 of this title, enforce requi r e m e n t s conta i n e d withi n the franc h i s e for the provis i o n of servi c e s, facili t i e s, and equip m e n t, whethe r or not relat e d to the estab l i s h m e n t or operat i o n of a cable system. (d) Cable servi c e unpro t e c t e d by Constitu t i o n ; block a g e of premi u m chann e l upon reque s t ( 1 ) Nothing in this subch a p t e r shall be const r u e d as prohib i t in g a franc h i s i n g autho r i ty and a cable opera t o r from sp ecif y i n g, in a franch i s e or renewa l thereo f, that certai n cable servic e s sh all not be provi d e d or shall be provi d e d subjec t to condit i o n s, if such cable se rvic e s are obscen e or are otherw i s e unpro t e c t e d by the Constitu t i o n of the United States. ( 2 ) In order to restr i c t the viewi n g of progr a m mi n g which is obsce n e or indec e n t, upon the reque s t of a subscr i b e r , a cable opera t o r shall provi d e (by sale or lease) a device by which the subsc r i b e r can prohib i t viewi n g of a partic u l a r cable servi c e durin g peri ods select e d by that subscri b e r. ( 3 ) ( A ) If a cable opera t o r provid e s a prem iu m chann e l witho u t charg e to cable subsc r i b e r s who do not subscr i b e to such premiu m ch annel, the cable opera t o r shall, not later than 30 days befor e such premi u m chann e l is provid e d witho u t charg e-- ( i ) notify all cable su bscr i b e r s that th e cable opera t o r plans to provi d e a premiu m chann e l witho u t charg e ; ( i i ) notify all cable subsc r i b e r s when the cable opera t o r plans to offer a premiu m chann e l witho u t charg e ; ( i i i ) notify all cable subscr i b e r s that they have a right to reques t that the channe l carry i n g the premiu m chann e l be block e d ; and ( i v ) block the chann e l carry i n g the premi u m chann e l upon the reque s t of a subscriber. 47 U.S.C. § 544 (cont’d) Page 3 (B) For the purpos e of this sectio n, the term “premi u m ch anne l ” shall mean any pay servi c e offer e d on a per chann e l or per progr a m basis, which offer s movie s rated by the Motion Picture Asso ciat i o n of America as X, NC-17, or R. (e) Technica l stand a r d s Within one year after October 5, 1992, the Commissi o n shall prescr i b e regu l a t i o n s whic h esta b l i s h mi ni mu m te chn i c a l stand a r d s relat i n g to cable syste ms ' techn i c a l opera t i o n and signa l quali t y. The Commissi o n shall updat e such standa r d s perio d i c a l l y to reflec t impro v e m e n t s in techno l o g y. No State or franch i s in g autho r ity may prohib i t, condit i o n, or restri c t a cable syste m 's use of any type of subsc r i b e r equip me n t or any trans mi s s i o n techno l o g y. (f) Limitati o n on regul a t o r y power s of Federal agenc i e s, States, or franc h i s i n g autho r i t ie s ; excep t i o n s ( 1 ) Any Federal agenc y, State, or franc h i s i n g autho r i t y may not impos e requi r e m e n t s regar d in g the provi s i o n or conten t of cable se rvic e s, except as expre s s l y provid e d in this subch a p t e r. ( 2 ) Paragrap h (1) shall not apply to-- ( A ) any rule, regul a t i o n, or order issu ed under any Federal law, as such rule, regula t i o n, or order (i) was in effec t on Septemb e r 21, 1983, or (ii) may be amend e d after such date if the rule, regul a t i o n, or order as amend e d is not incons i s t e n t with the expre s s provi s io n s of this subch a p t e r ; and (B) any rule, regul a t i o n, or order under Title 17. (g) Access to emerg e n c y infor m a t i o n Notwiths ta n d i n g any such rule, regul a t i o n, or order, each cable opera t o r shall co mp ly with such standar d s as the Commissi o n shall prescr i b e to ensur e that viewe r s of video progr a m mi n g on cable systems ar e afforde d the 47 U.S.C. § 544 (cont’d) Page 4 same emerg e n c y infor m a t i o n as is a ffor d e d by the emerg e n c y broad c a s t i n g syste m pursu a n t to Commissi o n regul a t i o n s in subpar t G of part 73, title 47, Code of Federal Regulati o n s. (h) Notice of change s in and co mmen t s on servic e s A franchi s i n g author it y may requir e a cab le opera t o r to do any one or mo re of the follo w i n g : ( 1 ) Provide 30 days' adva n c e writt e n notice of any chang e in chann e l assig n me n t or in the video progr a m mi n g servi c e provi d e d over any such channel. ( 2 ) Inform subscri b e r s, via writt en notic e, that comme n t s on progr a m mi n g and chann e l posit i o n chang e s are being recor d e d by a design a t e d offic e of the franc h i s i n g autho r i t y. (i) Disposit i o n of cable upon termi n a t i o n of servi c e Within 120 days after October 5, 1992, the Commissi o n sha ll presc r i b e rules concer n i n g the dispos i t i o n, after a subscr i b e r to a cable syste m termi n a t e s servi c e, of any cable insta l l e d by the cable opera t o r withi n the premi s e s of such subscr i b e r. 47 C.F.R. § 76.1300 CODE OF FEDERAL REGULATIONS TITLE 47. TELECOMMUNICATION CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION SUBCHAPTER C. BROADCAST RADIO SERVICES PART 76. MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE SUBPART Q. REGULATION OF CARRIAGE AGREEMENTS § 76.13 0 0 Defin i t i o n s . As used in this subpar t : (a) Affiliat e d. For purpos e s of this su bpar t, entitie s are affili a t e d if either entity has an attrib u t a b l e intere s t in the other or if a third party has an attrib u t a b l e inter e s t in both entiti e s. (b) Attributa b l e intere s t. The term “attr ibu t a b l e interest ” shall be defin e d by refer e n c e to the crite r i a set forth in Notes 1 throug h 5 to § 76.501 provid e d, however, that: (1) The limit e d partn e r and LLC/LLP/RLLP insulat i o n provis i o n s of Note 2(f) shall not apply ; and (2) The provis io n s of Note 2(a) regard i n g five (5) percen t inter e s t s shall inclu d e all votin g or nonvo t i n g stoc k or limit e d part n e r s h i p equi t y inter e s t s of five (5) percen t or more. (c) Buying group s. The term “buyi n g gr oup” or “agent,” for purpos e s of the defin i t i o n of a multi c h a n n e l video pr ogr am m i n g distr i b u t o r set forth in parag r a p h (e) of this sec tio n, means an en tity repre s e n t i n g the intere s t s of more than one entit y distr i b u t i n g multi c h a n n e l video progr a m mi n g that: (1) Agrees to be financ i a l l y liable fo r any fees due pursua n t to a satell i t e cable progra m mi n g, or satell i t e broadc a s t progr a m m i n g, contra c t which it signs as a contra c t i n g party as a re pres e n t at i v e of its member s or whose memb er s, as contra c t i n g partie s, ag ree to joint and sever a l liabi l i t y ; and (2) Agrees to unifor m billi n g and standa r d i z e d contr a c t provi s i o n s for indiv i d u a l memb e r s ; and (3) Agrees either coll ec t i v e l y or indiv id u a l l y on reaso n a b l e techn i c a l quali t y stand a r d s for the indiv i d u a l memb e r s of the group. (d) Multicha n n e l video progr am m i n g dist r i b u t o r. The term “multi c h a n n e l video progr a m mi n g distr i b u t o r ” means an entit y engag e d in the busin e s s of makin g avail a b l e for purch a s e, by s ubsc r i b e r s or custo m e r s, multip l e chann e l s of video progr a m mi n g. Such en tit i e s inclu d e, but are not limit e d to, a cable op erat o r, a BRS/EBS provider, a direct broadc a s t satell i t e servic e, a televi s i o n recei v e-only satell i t e progr a m distr i b u t o r, and a sat ell i t e maste r anten n a telev i s i o n syste m opera t o r, as we ll as buying groups or agents of all such entiti e s. (e) Video progr a m m i n g vendo r. The term “vide o progr a m mi n g vendo r ” means a perso n engag e d in the prod uc t i o n, creatio n, or wholes a l e dist r ib u t ion of video prog r a m m i n g for sale. 47 C.F.R. § 76.1301 CODE OF FEDERAL REGULATIONS TITLE 47. TELECOMMUNICATION CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION SUBCHAPTER C. BROADCAST RADIO SERVICES PART 76. MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE SUBPART Q. REGULATION OF CARRIAGE AGREEMENTS § 76.13 0 1 Prohi b i t e d pract i c e s . (a) Financia l inter e s t. No cable opera t o r or other mu lti c h a n n e l video progr a m m i n g distr i b u t o r shall requi r e a financ i a l intere s t in an y progra m servi c e as a condit i o n for carri a g e on one or more of such opera t o r 's / p r o v id e r 's syste ms. (b) Exclusive rights. No cable oper a t o r or other multi c h a n n e l video progr a m m i n g distr i b u t o r shall coer c e any video prog r a m m i n g vend o r to provi d e, or retal i a t e again s t such a ve ndor for faili n g to provi d e, exclus i v e right s again s t any other multi c h a n n e l video progr am m i n g distr i b u t o r as a condi t i o n for carri a g e on a syste m. (c) Discrimi n at i o n. No multic h a n n e l video progr am m i n g distr i b u t o r shall engage in conduct the effect of which is to unrea s o n a b l y restra i n the abilit y of an unaff i l i a t e d video progr am m i n g vendo r to comp e t e fairl y by discr i mi n a t i n g in video progr am m i n g dist r i b u t i o n on the basis of affil i a t i o n or non-affil i a t i o n of vendo r s in the se le c t i o n, terms, or cond i t io n s for carri a g e of video progr a m m i n g provid e d by such vendo r s. 47 C.F.R. § 76.1302 CODE OF FEDERAL REGULATIONS TITLE 47. TELECOMMUNICATION CHAPTER I. FEDERAL COMMUNICATIONS COMMISSION SUBCHAPTER C. BROADCAST RADIO SERVICES PART 76. MULTICHANNEL VIDEO AND CABLE TELEVISION SERVICE SUBPART Q. REGULATION OF CARRIAGE AGREEMENTS § 76.13 0 2 Carri a g e agree m e n t proce e d i n g s . (a) Complai n t s. Any video progr a m mi n g vend o r or multi c h a n n e l vide o progr a m m i n g distr i b u t o r aggri ev e d by conduc t that it believ e s consti t u t e a viola t i o n of the regul a t i o n s set fort h in this subpar t may commen c e an adjudic a t o r y procee d i n g at the Commi ssi o n to obtai n enfor c e m e n t of the rules throu g h the filin g of a comp la i n t. The comp lai n t shall be filed and respon d e d to in accor d a n c e with the proce d u r e s speci f i e d in § 76.7 of this part with the follo w i n g addit i o n s or chang e s : (b) Prefilin g notic e requi r e d. Any a ggri e v e d vide o prog r a m mi n g vend o r or multic h a n n e l video progr a m m i n g distr i b u t o r intend i n g to file a co mp la i n t under this secti o n must first notif y the potent i a l defe n d a n t multi c h a n n e l video progr a m mi n g distr i b u t o r that it intend s to file a co mp la i n t with the Commiss i o n based on actio n s alleg e d to viola t e one or more of the provis i o n s conta i n e d in § 76.1301 of this part. The notice must be suffic i e n t l y detail e d so that its recipi e n t(s) can det ermin e the specific nat u re of the potent i a l co mp la i n t. The potenti a l comp l a i n a n t must allow a minimu m of ten (10) days for the poten t i a l de fen d a n t(s) to respo n d befor e filin g a co mp lai n t with the Commissio n. (c) Contents of comp la i n t. In add iti o n to the requir e m e n t s of § 76.7, a carriag e agreem e n t co mpla i n t shall contai n : (1) Whether the co mpla i n a n t is a multic h an n e l video progr a m mi n g distr ib u to r or video progr a m mi n g vendo r, and, in the case of a 47 C.F.R. § 76. 1302 (cont’d) Page 2 multic h a n n e l video progr a m m i n g dist ri b u t o r, identif y the type of multi c h a n n e l video progr a m m i n g dist ri b u t o r, the addres s and teleph o n e number of the co mp la i n a n t, what type of multic h a n n e l video progr a m m i n g distr i b u t o r the defen d a n t is, and the addre s s and telep h o n e numbe r of each defen d a n t ; (2) Evidence that suppor t s compl a i n a n t 's belie f that the defen d a n t, where necess ar y, meets the attri b u t i o n standa r d s for applic a t i o n of the carria g e agreem e n t regula t i o n s ; (3) The compl ai n t must be acco mpan i e d by appropri a t e evidence demon s t r a t i n g that the requi r e d notif i c a t i o n pursu a n t to parag r a p h (b) of this sectio n has been mad e. (d) Prima facie case. In order to estab l i s h a prima facie case of a viola t i o n of § 76.1301, the comp l a i n t must c ontai n evide n c e of the follow i n g : (1) The comp l a i n a n t is a video progr a m m i n g vendo r as defin e d in secti o n 616(b) of the Communic a t i o n s Ac t of 1934, as amend e d, and § 76.1300(e) or a multic h a n n e l video pr ogr am m i n g distr i b u t o r as defin e d in secti o n 602(13) of the Communic a t i o n s Act of 1934, as amende d, and § 76.1300(d); (2) The defend a n t is a multi c h a n n e l video progr a m mi n g distr i b u t o r as defin e d in secti o n 602(13) of the Communic a t i o n s Act of 1934, as amend e d, and § 76.1300(d); and (3)(i) Financial intere s t. In a co mp l a i n t alleg i n g a viola t i o n of § 76.1301(a), docume n t a r y evide n c e or testi mo n i a l evide n c e (suppor t e d by an affidav i t from a represe n t a t i v e of the comp lai n a n t) that support s the claim that the defend a n t requir e d a finan c i a l inter e s t in any progr a m servi c e as a condit i o n for carri a g e on one or more of such defen d a n t 's systems. (ii) Exclusiv e right s. In a comp la i n t alleg i n g a violat i o n of § 76.1301(b), docume n t a r y evide n c e or testimo n i a l evide n c e (suppor t e d by an affid a v i t 47 C.F.R. § 76. 1302 (cont’d) Page 3 from a rep r e s e n t a t i v e of the co mp l a i n a n t) that supports the clai m that th e defend a n t coerce d a video progra m mi n g vendo r to provi d e, or retal i a t e d again s t such a vendo r for faili n g to pr ovid e, exclus i v e right s again s t any other multi c h a n n e l video progr a m mi n g dist r i b u t o r as a condi t io n for carriage on a system. (iii) Discrimi n a t i o n. In a comp la i n t alleg i n g a viola t i o n of § 76.1301(c): (A) Evidence that the conduc t allege d has the effec t of unrea s o n a b l y restr a i n i n g the abili t y of an unaff i l i a t e d video progr am m i n g vendo r to co mp e t e fairl y ; and (B)(1) Documen t a r y evid e n c e or testi mo n i a l evide n c e (suppor t e d by an affidav i t from a represe n t a t i v e of the comp lai n a n t) that support s the claim that the defend a n t disc r i mi n a t e d in video progr a m m i n g distr i b u t i o n on the basis of affil i a t i o n or non-affil i a t i o n of vendo r s in the selec t i o n, terms, or condi t io n s for carri a g e of video progr am m i n g provid e d by such vendo r s ; or (2)(i) Evidence that the co mplain a n t provid e s video progr a m m i n g that is simil a r l y situat e d to vi deo progr a m mi n g provi d e d by a video progr a m m i n g vendo r aff il i a t e d (as defin e d in § 76.1300(a)) with the defen d a n t multi c h a n n e l video progr am m i n g distr i b u t o r, based on a comb i n a t i o n of facto r s, such as genre, ratings, license fee, target audien c e, target advert i s e r s, target progr a m mi n g, and other facto r s ; and (ii) Evidence that the defend a n t multi c h a n n e l video progr a m m i n g distr ib u to r has treat e d the vi deo progr a m mi n g provi d e d by the co mp la i n a n t differ e n t l y than the si mil a r l y situa t e d, affili a t e d video progr a m m i n g descr i b e d in parag r a p h (d)(3)(iii)(B)(2)(i) of this sectio n with respec t to the sel ec t i o n, terms, or condi t io n s for carriage. (e) Answer. 47 C.F.R. § 76. 1302 (cont’d) Page 4 (1) Any multi c h a n n e l video prog ra m m i n g distri b u t o r upon which a carria g e agree m e n t comp l a i n t is serv ed under this sectio n shall answe r withi n sixty (60) days of servic e of the comp la i n t, unless otherw i s e directe d by the Commission. (2) The answer shall addres s the re lief reque s t e d in the co mp la i n t, inclu d i n g legal and docum e n t a r y supp o r t, for such respo n s e, and may includ e an altern a t i v e relief propos a l witho u t any preju d i c e to any denia l s or defense s raised. (f) Reply. Within twent y (20) days after servi c e of an answe r, unless otherw i s e direct e d by the Commissi o n, the co mplai n a n t may file and serve a reply which shall be respo n s iv e to matte r s conta i n e d in the answe r and shall not contai n new matter s. (g) Prima faci e dete r mi n a t i o n. (1) Within sixty (60) calend a r days after the co mp l a i n a n t 's reply to the defen d a n t ' s answe r is filed (or the da te on which the reply would be due if none is filed), the Chief, Medi a Bureau shall relea s e a decis i o n deter mi n i n g wheth e r the co mp l a i n a n t has establis h e d a pri ma faci e case of a viola t i o n of § 76.1301. (2) The Chief, Media Bureau may toll the sixty (60)-calenda r-day deadl i n e under the follo w i n g circu ms t a n c e s : (i) If the comp l a i n a n t and defen d a n t jo intl y reques t that the Chief, Media Bureau toll these deadl i n e s in order to pursue settl e m e n t discu s s i o n s or alter n a t i v e dispu t e resol u t i o n or for any other reaso n that the comp l a i n a n t and defend a n t mutua l l y ag ree justi f i e s tolli n g ; or (ii) If complyi n g with the dead li n e w ould viola t e the due proce s s right s of a party or would be incon s i s t e n t with funda me n t a l fairn e s s. (3) A finding that the co mp la i n a n t has est abl i s h e d a prima faci e case of a viola t i o n of § 76.1301 means that the compl a i n a n t has provi d ed suffi c i e n t 47 C.F.R. § 76. 1302 (cont’d) Page 5 evidenc e in its comp la i n t to allow th e case to procee d to a ruling on the merits. (4) If the Chief, Media Bureau fi nds that the co mpl ai n a n t has not estab l i s h e d a prima facie case of a viola t i o n of § 76.1301, the Chief, Media Bureau will dismis s the co mp la i n t. (h) Time limit on filin g of compl a i n t s. Any comp l a i n t filed pursu a n t to this subse c t i o n must be filed withi n one y ear of the date on which one of the follo w i n g event s occur s : (1) The multic h a n n e l video progr a m m i n g distri b u t o r enters into a contr a c t with a video progr a m mi n g distr i b u t o r that a party alleg e s to viola t e one or more of the rules conta i n e d in this secti o n ; or (2) The multic h a n n e l video progr a m m i n g distri b u t o r offers to carry the vide o prog r a m mi n g vend o r 's prog r a m mi n g purs u a n t to terms that a party alleg e s to viola t e one or more of the rules conta i n e d in this secti o n, and such offer to carry progr a m mi n g is unrela t e d to any existi n g contr a c t betwe e n the co mp la i n a n t and th e multic h a n n e l video progr a m mi n g dist r ib u to r ; or (3) A party has notif i e d a multi c h a n n e l vide o prog r am m i n g dist r i b u t o r that it intend s to file a co mp la i n t with the Commissi o n based on violat i o n s of one or more of the rules conta i n e d in this sectio n. (i) Deadline for decis i o n on the merits. (1)(i) For progr a m carri a g e comp l a i n t s that the Chief, Media Bureau decide s on the merits based on the co mp l a i n t, answe r, and reply witho u t discover y, the Chief, Media Bureau sh all releas e a decisio n on the merits withi n sixty (60) calend a r days afte r the Chief, Media Bureau 's prima facie deter mi n a t i o n. (ii) For progra m carri a g e co mp l a i n t s that the Chief, Media Bureau decid e s on the merit s after disco v e r y , the Chief, Media Bureau shall 47 C.F.R. § 76. 1302 (cont’d) Page 6 releas e a decis i o n on the merit s withi n 150 calenda r days after the Chief, Media Bureau 's pri ma facie deter mination. (iii) The Chief, Media Bureau may toll these deadl i n e s under the follow i n g circu ms t a n c e s : (A) If the comp l a i n a n t and defen d a n t joint l y reques t that the Chief, Media Bureau toll thes e deadl i n e s in order to pursue settl e m e n t discus s i o n s or alterna t i v e disput e resol u t i o n or for any other reaso n that the comp l a i n a n t and defen d a n t mu tua l l y agree justi f i e s tolli n g ; or (B) If complyi n g with the dead li n e would viola t e the due proces s rights of a party or would be incon s i s t e n t with fundam e n t a l fairn e s s. (2) For progra m carri a g e comp l a i n t s th at the Chief, Media Bureau ref ers to an admi ni s t r a t i v e law judge for an initia l decisi o n, the deadli n e s set forth in § 0.341(f) of this chapt e r apply. (j) Remedies for viola t i o n s-- (1) Remedies author iz e d. Upon co mp l e t i o n of such adjud i c a t o r y proce e d i n g, the Commissi o n shall orde r appropri a t e remedies, including, if necessar y, mandat o ry carriage of a video progr a m mi n g vendo r 's progr a m m i n g on defen d a n t 's video distr i b u t i o n syste m, or the estab l i s h m e n t of price s, terms, and conditi o n s for the carria g e of a video progr a m m i n g vendo r 's progr a m mi n g. Such order shall set forth a timet a b l e for comp l i a n c e, and shall becom e effec t i v e upon relea s e, unless any order of mandat o r y carri a g e would requi r e the defend a n t multi c h a n n e l video progr a m m i n g di stri b u t o r to delete existi n g progr a m m i n g from its syste m to accom m o d a t e carri a g e of a video progr a m m i n g vendo r 's progr a m mi n g. In such instan c e s, if the defend a n t seeks revie w of the staff, or admini s t r a t i v e law judge decis i o n, the order for carri a g e of a video progr a m mi n g vendo r 's progr am m i n g will not beco me effec t i v e unles s and until the decisi o n of the staff or ad mini s t r a t i v e law ju dge is uph el d by the Commissi o n. If the Commiss i o n uphol d s the remed y order e d by the staff or admi n i s t r a t i v e 47 C.F.R. § 76. 1302 (cont’d) Page 7 law judge in its entire t y, the defend a n t will be requi r e d to carry the video progr a m m i n g vendo r 's progr a m mi n g for an addit i o n a l perio d equal to the time elapse d betwee n the staff or ad min i s t r a t i v e law judge decis i o n and the Commissi o n 's rulin g, on the terms and condi t i o n s appro v e d by the Commiss i o n. (2) Addition a l sanct i o n s. The remedi e s prov i d e d in parag r a p h (j)(1) of this secti o n are in addit i o n to and not in lieu of the sanctio n s availab l e under title V or any other provi s i o n of the Communic a t i o n s Act. (k) Petition s for tempo r a r y stand s t i l l. (1) A progra m carri a g e comp l a i n a n t seeki n g renew a l of an exist i n g progr a m m i n g contr ac t may file a petit i o n along with its comp l a i n t reque s t i n g a tempo r a r y stand s t i l l of th e price, terms, and other condi t i o n s of the exist i n g progr a m mi n g contr a c t pendin g resolu t i o n of the co mp la i n t. To allow for suffic i e n t time to consid e r the petiti o n for tempo r a r y stand s t i l l prior to the e xpir a t i o n of the exist i n g progr a m mi n g contr a c t, the petit i o n for tempo r a r y st and s t i l l and comp l a i n t shall be filed no later than thirt y (30) days prio r to the expir a t i o n of the exist i n g progr a m m i n g contr ac t. In addit i o n to the requir e m e n t s of § 76.7, the comp l a i n a n t shall have the burde n of proof to demo ns t r a t e the follow i n g in its petiti o n : (i) The comp la i n a n t is likely to prev ai l on the merits of its co mpla i n t ; (ii) The comp la i n a n t will suffer irrepa r a b l e harm absent a stay; (iii) Grant of a stay will not substa n t i a l l y harm other intere s t e d partie s ; and (iv) The public intere s t favors grant of a stay. 47 C.F.R. § 76. 1302 (cont’d) Page 8 (2) The defend a n t multi c h a n n e l vi deo progr a m m i n g distr i b u t o r upon which a petiti o n for tempo r a r y stand s t i l l is serve d shall answe r withi n ten (10) days of servi c e of the petit i o n, unless otherwise directed by the Commiss i o n. (3) If the Commissi o n grant s the tem po r a r y stand s t i l l, the adjud i c a t o r decidi n g the case on the me rits (i.e., either the Ch ief, Media Bureau or an ad min i s t r a t i v e law ju dge) will provi d e for remed i e s that are appli e d as of the expir a t i o n date of the pr evi o u s progr a m m i n g contr a c t. 1 1 - 4 1 3 8 and 11-51 5 2 IN THE UNITED STATES COURT OF APPEALS FOR THE SECOND CI RCUIT Time Wa rner Cabl e Inc. and Na tiona l Cable & Tel ecom mu n i c a t i o n s Associ a t i o n , Petiti o n e r s v. Federa l Commu n i c a t i o n s Commi s s i o n and the Unite d State s of Americ a , Respo n d e n t s . C E R T I FI C A T E OF SERVI CE I, James M. Carr, hereby certi f y that on June 26, 2012, I electr o n i c a l l y filed the foreg o in g Brief for Responde n t s with the Clerk of the Court for the United States Court of Appeals for the Second Circuit by using the CM/ECF system. Particip a n t s in the case w ho are regist e r e d CM/ECF users will be served by the CM/ECF system. Floyd Abrams Landis C. Best Cahill Gordon & Reindell LLP Eighty Pine Street New York, NY 10005 Counsel for: Time Warner Cable Inc. Matthew A. Brill Amanda E. Potter Matthew Murchiso n Richard P. Bress Latham & Watkins LLP 555 11th Street, N.W. Suite 1000 Washingt o n, D.C. 20004 Counsel for: Time Warner Cable Inc. Miguel A. Estrada Gibson, Dunn & Crutcher LLP 1050 Connecti c u t Avenue, N.W. Washingt o n, D.C. 20036 Counsel for: National Cable & Telecommunications Association Nancy C. Garrison Catherin e G. O’Sullivan US Department of Justice Antitrus t Division, Appellat e Section 950 Pennsylv a n i a Avenue, N.W. Room 3224 Washingt o n, D.C. 20530 Counsel for: USA /s/ James M. Carr