In Time-Warner v. City of New York: Rupert Murdoch, Ted Turner,and Mayor Giuliani Fight for Control of the Public's Property.  This is provided as background information for Public Access of Indianapolis' position on the City of Indianapolis' ability to establish a community access TV channel. 

Time-Warner v. City of New York:

Rupert Murdoch, Ted Turner, Mayor Giuliani

Fight for Control of Public's Property  

Source: Alliance for Community Media Backgrounder: November 22, 1996

Washington, D.C. -- Last week, Judge Denise Cote, a federal judge in the Southern District of New York, issued a preliminary injunction in Time Warner Cable v. New York City which will effectively protect the city's public, educational and governmental ("PEG") access channels, the "public space" on cable television. These channels, dedicated to schools, city councils, local agencies, and the general public, in the words of Judge Cote, exist "to bring schools and government into the homes of the citizenry, facilitate better communication between educational and governmental institutions and the public, and meet the needs of its citizens left unaddressed by commercial programming." At issue is whether the City of New York can turn over an entire non-commerical government access channel to the news service Fox Cable News (FCN), owned by Rupert Murdoch, and the programming of Bloomberg Business News. Time Warner has protested this move -- allegedly motivated by the interests of stockholder Ted Turner and FCN competitor Cable News Network (CNN). Two borough presidents are opposing the City of New York's "gift" of the government access channel to FCN parent corporation, News Corporation Inc.

The fight between Time-Warner and Fox is not just a personality feud between Rupert Murdoch and Ted Turner; nor is it simply a clash between titanic competitors in the increasingly lucrative video services market. Both City of New York Mayor Rudolph Giuliani and Rupert Murdoch seem intent on appropriating one of the few remaining areas earmarked for local, non-commercial communication. Fortunately, they have failed -- so far.

PEG Access Channels Are Designed "To Show Government At Work."

Since the 1960s, local government have offered franchise grants to cable operators on the condition of providing public, educational and governmental (PEG) access channels on cable television systems. These channels -- and the equipment, facilities and services needed to make effective use of the capacity -- are partial compensation to the public for the cable companies' use of physical rights-of-way, the land under streets, schools and parks.

These so-called "PEG" access channels provide a wide array of local informational and public affairs programming to cable subscribers, both in the city of New York and in other local systems throughout the country. The FCC noted in 1972 that PEG channels further the "fundamental goals of a national communications structure" with "the opening of new outlets for local expression, the promotion of diversity in television programming, the advancement of educational and instructional television, and increased informational services of local governments."

Likewise, the House Energy and Commerce Committee, in the legislative history to the 1984 Cable Act, stated that cable systems provide "the potential to present a wide variety of perspectives from many different program providers. Local governments, school systems, and community groups, for instance, will have ample opportunity to reach the public under [the Act's] grant of authority to cities to require public, educational and governmental (PEG) access channels."

And, indeed, this is the case. Community use of PEG access channels has increased dramatically over the past twenty years. Over 20,000 hours of new programs are now produced each week, totaling over one million hours of new programs per year. This is far greater than ABC, CBS, NBC, Fox and PBS combined.

Mayor Giuliani's initiative contravenes Congress' clearly-expressed intention that these channels be used to promote localism and citizens' access to government information. The House Energy and Commerce Committee stated that it did not "intend that franchising authorities lease governmental channels to third parties for uses unrelated to the provision of governmental access." Fox has insisted that its Fox News Channel can be considered "educational programming." This characterization mocks local governmental and educational access producers who have struggled with low budgets and limited resources to present substantive distance-learning and public service programs.

Many governmental access channels offer local C-SPAN-type programming, allowing cable subscribers to see not only their state legislatures, but city councils, boards of education, and commissions at work. Government access channels also distribute health and safety information, and improve citizen's knowledge of and participation in our democracy. Some surveys show that governmental meetings are the most valued programming on PEG access -- with the possible exception of high school football games.

New York's "Crosswalks" channels are no exception. When the City launched the network, the Commissioner of the city's Department of Telecommunications and Energy, William F. Squadron, now counsel for Fox, stated that the goal of Crosswalks was to "use the cable technology to bring educational, governmental and public information to the people." Specifically, he stated that Crosswalks would have, "programs devoted to enhancing the quality of life for young people and for senior citizens. It will have job training shows and employment listings. It will offer public safety tips on subjects like crime and fire prevention...it will cablecast the proceedings of the City Council and the City Planning Commission."

Judge Cote Rules That Time-Warner Has No First Amendment Rights In PEG Access Channels.

Time-Warner argued before Judge Cote that the City was violating its First Amendment rights by "forcing speech" -- that is, by forcing Time-Warner to show Fox News on a governmental access channel against Time-Warner's will. Judge Cote stated clearly that Time-Warner has no direct First Amendment rights over the use of the PEG channels. As she stated, "Time Warner has no First Amendment right to editorial discretion over channels that it never had a right to use." This ruling follows naturally from the Supreme Court's ruling in Denver Area Educational Telecommunications Consortium v. FCC, which upheld the determination in Alliance for Community Media v. FCC that the statute at issue "does not restore to cable operators editorial rights that they once had, and the countervailing First Amendment interest is nonexistent, or at least much diminished."

Fox Can -- And Should -- Use Time Warner's 'Leased Access' Channels

Ironically, the leased access provisions of the 1984 Cable Act provide a clear-cut way for Fox News to get space on Time Warner's system. Congress created leased access channels to provide for situations exactly like the one Fox News faces -- commercial access to a market in which Time Warner has exercised its editorial control to exclude him. Under the federal leased-access provision, Time Warner cannot exercise any editorial control over who gets leased access capacity. It is required by law to offer no less than six channels to anyone who wants them, for a regulated fee. Right now, according to the Alliance's estimate, Time-Warner is apparently providing only two leased-access channels for Manhattan subscribers. (Time-Warner demonstrated that it is in compliance with leased access laws.) Mayor Giuliani could allege that Time-Warner is not complying with the leased access provision, and require Time-Warner to activate more channels.

Time-Warner claims that it has no space to offer Fox. In this, Time-Warner joins a host of other major cable companies, most of which have resisted or refused outright to offer reasonable third-party access, and impermissibly continue to exercise editorial control over these channels which have been set aside by Congress for local voices. Unfortunately, this has happened with the implicit acquiescence of the Federal Communications Commission.

Time-Warner can be required to comply with the leased-access law by activating the additional channels that it needs to bring itself into compliance with the statute, not only for the sake of the Fox News Channel and Bloomberg Business News, but for a wide range of local voices that need leased access to be heard. In the great majority of localities that have no public, educational or governmental access channels, leased access is the only way that local community voices can communicate with television audiences.

The FCC is about to release a new rule on cable leased access. In this new round of rulemaking, the FCC has an opportunity to follow the will of Congress in two respects. A fair and reasonable leased-access rule will allow a greater degree of diversity on those channels which by law are required to be programmed by third-parties. It will also protect Congress' intent to allow cable systems to transmit a wide range of public affairs programming to cable subscribers on governmental access channels. As cities' operating revenues shrink and the demands placed upon them expand, other cities like New York may see their governmental access channel as property that can be sold on the open market. The City of New York, a trend-setter in so many ways, will be setting a trend that other cities would make a mistake to follow.

Mr. Murdoch can do not only himself, but New Yorkers and cable subscribers around the United States a tremendous service if he takes his case to the FCC or to the federal courts, and demand that they enforce his -- and others' -- legal right to use the leased-access channels. This would be a win for Murdoch, a win for other independent programmers, and a win for the diversity of voices in the electronic media. If Mr. Murdoch wishes to reach New Yorkers with a third all-news network, he should employ the legal means available to him.