Document ID: A:\CP2.TXT THE CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF VIRGINIA; BELL ATLANTIC VIDEO SERVICES COMPANY; BELL ATLANTIC CORPORATION; CHESAPEAKE AND POTOMAC TELEPHONE COMPANY; C&P TELEPHONE COMPANYOF MARYLAND; THE CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF WEST VIRGINIA; THE DIAMOND STATE TELEPHONE COMPANY; THE BELL TELEPHONE COMPANY OF PENNSYLVANIA; NEW JERSEY BELL TELEPHONE COMPANY, Plaintiffs-Appellees, v. UNITED STATES OF AMERICA; FEDERAL COMMUNICATIONS COMMISSION; JANET RENO, in her official capacity as Attorney General of the United States, Defendants-Appellants, and THE NATIONAL CABLE TELEVISION ASSOCIATION, INCORPORATED, Defendant. CONSUMER FEDERATION OF AMERICA; VIRGINIA CITIZENS CONSUMER COUNCIL; NEWSPAPER ASSOCIATIONOF AMERICA; VIRGINIA PRESS ASSOCIATION; COMPUTER & COMMUNICATIONS INDUSTRY ASSOCIATION; METS FANS UNITED/VIRGINIA CONSUMERSFOR CABLE CHOICE, et al.; CITIZENSFORA SOUND ECONOMY FOUNDATION; THE AMERICAN LEGISLATIVE EXCHANGE COUNCIL; THE COMPETITIVE ENTERPRISE INSTITUTE; THE UNITED STATES TELEPHONE ASSOCIATION; AMERITECH CORPORATION; BELLSOUTH CORPORATION; GTE SERVICE CORPORATION, on behalf of its affiliated domestic operating companies; NYNEX CORPORATION; PACIFIC TELESIS GROUP; ROCHESTER TELEPHONE CORPORATION; SOUTHWESTERN BELL CORPORATION; US WEST INCORPORATED; TELECOMMUNICATIONS INDUSTRY ASSOCIATION, FIBER OPTICS DIVISION, Amici Curiae. THE CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF VIRGINIA; BELL ATLANTIC CORPORATION; BELL ATLANTIC VIDEO SERVICES COMPANY; CHESAPEAKE AND POTOMAC TELEPHONE COMPANY; THE CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF MARYLAND; THE CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF WEST VIRGINIA; THE DIAMOND STATE TELEPHONE COMPANY; THE BELL TELEPHONE COMPANY OF PENNSYLVANIA; NEW JERSEY BELL TELEPHONE COMPANY, Plaintiffs-Appellees, v.THE NATIONAL CABLE TELEVISION ASSOCIATION, INCORPORATED, Defendant-Appellant, and UNITED STATES OF AMERICA; FEDERAL COMMUNICATIONS COMMISSION; JANET RENO, in her official capacity as Attorney General of the United States, Defendants. CONSUMER FEDERATIONOF AMERICA; VIRGINIA CITIZENS CONSUMER COUNCIL; NEWSPAPER ASSOCIATION OF AMERICA; VIRGINIA PRESS ASSOCIATION; COMPUTER & COMMUNICATIONS INDUSTRY ASSOCIATION; METS FANS UNITED/VIRGINIA CONSUMERS FOR CABLE CHOICE, et al.; CITIZENS FOR A SOUND ECONOMY FOUNDATION; THE AMERICAN LEGISLATIVE EXCHANGE COUNCIL; THE COMPETITIVE ENTERPRISE INSTITUTE; THE UNITED STATES TELEPHONE ASSOCIATION; AMERITECH CORPORATION; BELLSOUTH CORPORATION; GTE SERVICE CORPORATION, on behalf of its affiliated domestic operating companies; NYNEX CORPORATION; PACIFIC TELESIS GROUP; ROCHESTER TELEPHONE CORPORATION; SOUTHWESTERN BELL CORPORATION; US WEST INCORPORATED; TELECOMMUNICATIONS INDUSTRY ASSOCIATION, FIBER OPTICS DIVISION, Amici Curiae. No. 93-2340, No. 93-2341 UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT 42 F.3d 181; 1994 U.S. App. LEXIS 32985; 1994-2 Trade Cas. (CCH) P70,814 February 7, 1994, Argued November 21, 1994, Decided SUBSEQUENT HISTORY: [**1] Certiorari Granted June 26, 1995, Reported at: 1995 U.S. LEX PRIOR HISTORY: Appeals from the United States District Court for the Eastern District of V DISPOSITION: AFFIRMED COUNSEL: ARGUED: Bruce G. Forrest, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Wa Laurence H. Tribe, Cambridge, Massachusetts, for Appellees. ON BRIEF: Frank W. Hunger, Assistant Attorney General, Douglas N. Letter, James J. Gilliga an, Office of General Counsel, FEDERAL COMMUNICATIONS COMMISSION, Washington, D.C., for Go INC., for Appellant Cable Television Association. Jonathan S. Massey, Cambridge, Massachusetts; James R. Young, John Thorne, Michael E. Glov S, Washington, D.C.; Wiley R. Wright, Jr., Ronald L. Lord, HAZEL & THOMAS, P.C., Alexandri Richard E. Wiley, Michael Yourshaw, William B. Baker, Daniel E. Troy, Frank Winston, Jr., rginia Press Association. Bradley Stillman, Washington, D.C.; Andrew Jay Schwartzman, MEDI AN, MORAN, HUBBARD, GLAZER & ZIMMERMAN, Washington, D.C., for Amicus Curiae Computer & Com United/Virginia Consumers for Cable Choice, et al. Koteles Alexander, Jonathan W. Emord, Sam Kazman, COMPETITIVE ENTERPRISE INSTITUTE, Washington, D.C., for Amici Curiae Citizens ta, Georgia; Martin T. McCue, Washington, D.C.; Thomas P. Hester, Thomas Quarles, Chicago, hington, D.C., for Amicus Curiae Telecommunications Industry Association. JUDGES: Before RUSSELL and MICHAEL, Circuit Judges, and TILLEY, United States District Jud pinion concurring in part and concurring in the judgment. OPINIONBY: RUSSELL OPINION: [*185] OPINION RUSSELL, Circuit Judge: At issue in this case is the constitutionality of 47 U.S.C. @ 533(b), which provides, i (1) It shall be unlawful for any common carrier, subject in whole or in part to subchapter owned by, operated by, controlled by, or under common control with the common carrier. (2) It shall be unlawful for any common carrier, subject in whole or in part to subchapter ed by, operated by, controlled by, or under common control with such common carrier, if su the common carrier. 47 U.S.C. @ 533(b)(1), (2). n1 This provision, enacted as part of the Cable Communicati es from offering, with editorial control, cable television services to their common carrie 830 F. Supp. 909 (E.D. Va. 1993) (UC&P). n3 For the reasons stated herein, we affirm. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n1 Paragraph (3) provides that Section 533(b) does not apply to a common carrier to the (1) and (2) where the FCC determines that local common carrier subscribers could not obta n2 See infra Section III. n3 The federal district courts in Ameritech Corp. v. United States, 867 F. Supp. 721, 1 ns are at various stages in other district courts. See, e.g., UNYNEX Corp. v. FCC, 153 F.R - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**6] I. The facts and background underlying this case, which the parties do not dispute, are pr Chesapeake and Potomac Telephone Company of Virginia ("C&P") applied for a cable franch iolate 47 U.S.C. @ 533(b). Thereafter, C&P and Bell Atlantic Video Systems, both wholly-ow FCC") and the Attorney General (collectively the "Government defendants") seeking to inval CTA") sought, and was granted, permission to intervene as a defendant. Cross-motions for s oth facially and as applied to plaintiffs and enjoined the Government defendants from enfo - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n4 That the statute, by its terms, would apply to bar C&P from operating a cable system without running afoul of Section 533(b)(1). n5 In its original Order, dated August 24, 1993, the district court declared unconstitu - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [*186] II. Before the specific contentions of the parties are addressed, a discussion, albeit trun Although cable television has its origins in the 1940's, see Turner Broadcasting Sys., at 915. In those days, it was commonplace for companies to hang the coaxial cables through ephone companies, as monopolists and owners of these poles, would be in a position to obst 's initial response to this concern consisted solely of a requirement that a telephone com al., 13 F.C.C.2d 448 (1968), aff'd, 134 U.S. App. D.C. 116, 413 F.2d 390 (D.C. Cir.), cert ble companies nevertheless persisted and, so, in 1970, the FCC promulgated a rule which ba 7 C.F.R. @ 64.601, provided, in pertinent part: (a) No telephone common carrier subject in whole or in part to the Communications Act of 1 engage in the furnishing of CATV to the viewing public in its telephone service area. (b) No telephone common carrier subject in whole or in part to the Communications Act of 1 ned, operated, or controlled by such telephone communications common carrier, where such f with the provision of CATV service to [**10] the viewing public in the service area of - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n6 That measure provides: No carrier shall undertake the construction of a new line or of an extension of any line, ere shall first have been obtained from the Commission a certificate that the present or f . . 47 U.S.C. @ 214(a). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Applications of Telephone Cos. for Section 214 Certificates for Channel Facilities Furn aff'd sub nom. General Tel. Co. of the Southwest v. United States , 449 F.2d 846 (5th Cir. CC specifically noted that concentration of control of communications media was undesirabl anies could deny unaffiliated cable companies access, or charge excessive prices for acces these cable affiliates with revenue obtained from telephone company operations. [*187] In 1978, Congress passed the Pole Attachment Act, Pub. L. No. 9-234, 92 Stat. 35, which regulations, see 47 C.F.R., Part 1, Subpart J, governing the rates, terms, and conditions o poles and therefore does not address all the concerns purportedly addressed by the FCC r In 1981, the FCC reconsidered the need for its cross-ownership rule. It concluded that not be necessary to retain the rule in perpetuity, id. at 177-78. In 1984, Congress enacted Section 533, captioned"Ownership restrictions," as part of th tory, Congress drafted Section 533(b) to prohibit not the furnishing of "CATV" service as Section 533(b)'s telephone-cable cross-ownership bar n7 was accompanied by Section 533( o "ownership or control of a [local] cable system." Congress indicated, within the body of tion sources and services to the public," 47 U.S.C. @ 521(4), and to "promote competition al media monopolies, and to encourage a diversity of ownership of communications outlets." n 533(b) was] to codify current FCC rules concerning the provision of video programming ov t as to the purpose or goals of Section 533(b). - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n7 Appellees argue that Section 533(b) is not properly termed a crossownership bar. Rat s-ownership, the effect of Section 533(b) is to prevent a common carrier from owning or af C. 229, 914 F.2d 285, 286 (D.C. Cir. 1990) (referring to Section 533(b) as a "crossownersh ing its existing technology to transmit its own video programming, such argument is merely n8 The cable-broadcasting cross-ownership bar, now found at 47 U.S.C. @ 533(a)(1), prov It shall be unlawful for any person to be a cable operator if such person, directly or thr he community served by such operator's cable system. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**15] In 1987 and 1988, the FCC again undertook a review of whether repeal of the telephone-c vision Cross-Ownership Rules, Section 63.54 - 63.58, 3 F.C.C. Rcd. 5849 PP 76-77 (1988) (F es might be appropriate, see id. PP 78-80. In 1992, the Commission again voted in favor of (1992) (Second Report and Order, Recommendation to Congress and Second Further Notice of n. Telephone Co. - Cable Television CrossOwnership Rules, Sections 63.54 - 63.58, CC Docke eal Section 533(b). III. Much of the disagreement in this case arises from one issue: the proper characterizatio " to customers of its common carrier services. By regulation, the FCC defines "control" an between the carrier and the customer, except only the carrier-user relationship." 47 C.F. is section." Id. @ 63.54(e)(1). Paragraph (1) of 47 U.S.C. @ 533(b) prohibits (as, similarly, does subsection (b) of 47 providing channels of communication or pole line [**17] conduit space, or other rental s or arrangements are to be used for, or in connection with, the provision of video progra As a corollary, however, it seems that the telephone company can legally "provide chann rrier service area. It has thus been held that, consistent with the FCC rule underlying Se 824 F.2d 1205, 1209 (D.C. Cir. 1987), cert. denied, 493 U.S. 1035, 107 L. Ed. 2d 773, 110 smit television signals for independent cable operators without running afoul of the [FCC] television is construed to fall within the"carrier-user" exception contained in 47 C.F.R. t engage in "unjust or unreasonable discrimination," 47 U.S.C. @ 202, including basing its , see id. A similar result, of course, obtains under Section 533(b), under which the FCC r - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n9 Section 63.57 provides, in pertinent part: Applications by telephone common carriers for authority to construct and/or operate distri tion, and within the limitations of technical feasibility, pole attachment rights (or cond - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**19] From the foregoing, we may distill the following essential understanding of Section 533 telephone companies can "create" video programming, they cannot transmit directly their ow d to this audience by means of unaffiliated cable or broadcast television operators or by ators. In short, while telephone companies may legally arrange to have their own video pro companies cannot guarantee that their programming will reach this audience. To this exten ate its own video programming cannot, unlike its competitors, ensure, if it chooses, that - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n10 Appellees dispute that Section 533(b) allows for such activity on the part of the t o programming" to common carrier subscribers. As discussed in the text, the language of Se ction 533(b) in fact allows telephone companies to provide cable transport services to una ic perspective, an interpretation of Section 533(b) which allows for telephone company pro on is irrelevant. The First Amendment's problem with Section 533(b) is that the provision rpretation of Section 533(b), the provision retains its impairing effect on protected spee [**21] n11 Some appellants also suggest, although appellees note that the various appellants' ce. This is not clear from the language of Section 533(b), which prohibits "any common car rated by, controlled by, or under common control with the common carrier," without limitin our inquiry herein; we assume, for purposes of our analysis herein, that the telephone com - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - We turn to an examination of how Section 533(b)'s function fulfills the goals which it s of the cable medium. n12 The Supreme Court explained in Turner: When an individual subscribes to cable, the physical connection between the television set gives the cable operator bottleneck, or gatekeeper, control over most (if not all) of the ator can prevent its subscribers from obtaining access to programming it chooses to exclud - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n12 "The unique physical characteristics of cable transmission should [not] be ignored - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - 114 S. Ct. at 2466. The telephone companies' common carrier networks [**23] are the o ossibility of transmitting cable programming over these common carrier networks has become Appellants advance two justifications for Section 533(b): preventing the telephone comp the section appears to inhibit competition and undermine diversity by effectively keeping ir monopolies, n13 the reasoning behind Section 533(b) is that, were telephone companies a usiness, resulting in telephone companies serving as sole [**24] "gatekeepers," 114 S. Ct cit adoption of the Commission's ban on cross ownership that the policy of this subsection elephone poles that are required for the transmission of video programs to cable subscribe g products, the so-called video programming market. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n13 Of course, telephone companies may own cable companies outside of their common carr ephone company could not use its existing network of wiring to provide, as it easily could - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**25] IV. "Video programming" comprises much of the programming provided by cable television comp Ct. at 2456; Leathers v. Medlock, 499 U.S. 439, 113 L. Ed. 2d 494, 111 S. Ct. 1438 (1991). 3(b) violated the First Amendment. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n14 The First Amendment provides, in pertinent part, that "Congress shall make no law . - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - A. A court, in evaluating whether a regulation of speech runs afoul of the First Amendment ial burden on certain speech because of the "content" of that speech alleged to infringe u e unrelated to the content of speech are subject to an intermediate level of scrutiny." Id nner restrictions"), provided that the restrictions are content-neutral. Ward v. Rock Agai ertain regulations of speech pass only minimal scrutiny. [*191] See Red Lion Broadcast We consider first the applicability of minimal scrutiny. Concluding that standard to be 1. The government and the NCTA raise several related arguments in favor of the application a. The Supreme Court has generally limited application of minimal scrutiny to First Amendm hat the reason that regulations of broadcast media need pass only minimal scrutiny is the s. See , e.g., id. at 2456-57; Red Lion Broadcasting Co., 395 U.S. at 397-400. Appellants suggest that application of minimal scrutiny should extend to regulations go arcity of broadcast frequencies, [**28] the scarcity of cable systems warrants similar tems that can be constructed or on the number of cable channels that a cable system can su - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n15 Although the physical capacity of particular, usually older, cable systems may be l - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Apart from the question of whether the premise underlying this argument is true, see Pr ice in particular areas of that city to one operator), cert. denied, 129 L. Ed. 2d 859, 11 t all, may well be attributable more to governmental action--particularly the municipal fr dressed and rejected this argument in its recent opinion in Turner Broadcasting System, In b. Appellants' next argument in favor of minimal scrutiny relies upon the Supreme Court's nality of a regulation promulgated by the FCC, under which, with few exceptions, a newspap egulation to minimal scrutiny and concluded that it was constitutional, finding the FCC's r the broad proposition that the First Amendment requires that all regulations which prohi Appellants misread the NCCB. The Court's reasoning explicitly relied upon the fact that cases. Because the instant case does not involve regulation of the broadcast media, n16 NC - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n16 See supra note 11. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**31] c. Appellants next argue that, because common carriers have a monopoly benefit conferred u he First Amendment. The underpinnings of this quid pro quo argument are highly questionabl d under its own laws); but see id. at 822-28 (Rehnquist, J., dissenting) (endorsing the q se the benefit of common carrier status is conferred by state and local governments, yet S t otherwise have some vitality, it is [**32] inapplicable here. d. Last, appellants argue that Associated Press v. United States, 326 U.S. 1, 89 L. Ed. 20 iated Press, a news distribution organization then composed of newspaper publishers. Justi d. at 20 & n.18. Consequently, the First Amendment was not implicated. See id. n17 Section ted speech. Appellants' reliance on Associated Press v. United States is therefore misplac - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n17 Associated Press v. United States is only one in a series of cases standing for the Publishing Co. v. Walling, 327 U.S. 186, 192-93, 90 L. Ed. 614, 66 S. Ct. 494 (1946) (Fair s., Inc., 114 S. Ct. at 2458 ("The enforcement of a generally applicable law may or may no - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**33] 2. In light of the foregoing, Section 533(b) must survive some form of heightened scrutiny ough our reasoning differs from that advanced by the district court. We will subject Section 533(b) to strict scrutiny only if it regulates speech based upo agreement with the message it conveys.'" Turner Broadcasting Sys., Inc., 114 S. Ct. at 245 must examine the plain terms of the regulation to see whether, on its face, the regulatio [**34] by "must-carry" rules without regard to content). If the regulation's plain lang t purpose is to regulate speech because of the message it conveys." 114 S. Ct. at 2461. We - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n18 Although a provision that regulates speech that takes a particular position on a gi part), a provision that regulates all speech on a given topic, no matter what position wit articular viewpoints, but also to prohibition of public discussion of an entire topic." Co to the "message" speech conveys to refer not only to the particular side of an issue whic [**35] n19 The Turner Court explained: As a general rule, laws that by their terms distinguish favored speech from disfavored spe or views expressed are in most instances content-neutral. 114 S. Ct. at 2459 (citations omitted). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - a. Section 533(b) regulates telephone company provision of "video programming." Because Se nt-based. Similarly, the benefits afforded by Section 533(b) accrue to all cable system op message conveyed thereby. The district court found that Section 533(b) regulated speech differently according to ng" is defined at 47 U.S.C. @ 522(19) as "programming provided by, or generally considered t television programming in 1984. Video Dialtone Order, supra, 7 F.C.C. Rcd. 5781 P 74. On A moment's reflection makes it readily apparent that the cognitive process necessary to ap gramming . . . . There is simply no way that @ 533(b), incorporating as it does the @ 522( 830 F. Supp. at 923 (footnote omitted). We disagree. While a content-based distinction necessarily involves consideration of th which it has impact does not make the regulation content-based. In particular, the governm oes not discriminate based upon the content of speech. Instructive with regard to when the reference a regulation makes to speech is so unintr d the validity of a statute regulating the size and color of permissible copying of United - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n20 Chief Justice Burger and Justices Rehnquist and O'Connor joined this portion of Jus ll, disagreed with the conclusion reached by the plurality with respect to the size and co tice Powell, joined in partial concurrence and partial dissent by Justice Blackmun, would ther the size and color restrictions at issue were constitutional, although the opinion ma - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**38] The size and color limitations do not discriminate on the basis of content. Compliance wit re importantly, the Government does not need to evaluate the nature of the message being i 468 U.S. at 655-56 (emphasis added). Analogizing them to valid restrictions on noise le ze restrictions. n21 Id. at 656; see id. at 704 (Stevens, J., concurring in part and disse with restrictions [**39] on the manner of printing that symbol which are reasonably re gan establishes that the regulation here at issue is not content-based. Section 533(b) doe video programming," i.e., on the basis of the mode of delivery of the speech. In short, Se he message being imparted." n22 Regan, [*195] 468 U.S. at 656; see Turner Broadcasting market . . . based only upon the manner in which speakers transmit their messages, and not - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n21 By contrast, the same Court, with only Justice Stevens dissenting, found that a pro at 648-49. n22 Focusing on a single passage from Turner Broadcasting System, Inc. where the Court eserve access to free television programming for the 40 percent of Americans without cable its "format" is content-based and that whether particular speech constitutes "video progra t general usage, see The American Heritage Dictionary 526 (2d ed.) (defining "format" as " currency considered in Regan, supra. "Format" does not, in every usage, have bearing on "c der applicable state regulations, . . . the critical distinction between newspapers and ma ord "format" to convey the notion that laws which regulate particular "formats" of speech ntent-based. We note, finally, that the FCC interpretation of the statutory language may vest too mu Ed. 2d 101, 112 S. Ct. 2395, 2401-02 (1992); City of Lakewood v. Plain Dealer Publishing aised here. [**41] n23 We also note that Court in Turner rejected the argument, advanced by the dissent in CC content-based regulation, the "definition of the benefitted class automatically entail erate[ ] the extent to which the FCC is permitted to intrude into matters affecting the co - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - 1505, 1516 (1993) ("sweeping ban on use of newsracks that distribute 'commercial handbi Additionally, while Section 533(b) imposes burdens on speech according to the identity explaining instead that "speaker-based laws demand strict scrutiny when they reflect the aws favoring some speakers over others demand strict scrutiny when the legislature's speak - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n24 To the extent that our decision in Henrico Professional Firefighters Ass'n, Local 1 - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - We determine whether a speech regulation partial to certain speakers is content-based m 2467. Here, as described above, the FCC and Congress have regulated [**43] the telephon lephone companies, absent regulation, would have the incentive and ability to dominate tha the peculiar economic and physical venue inherent to cable communications, we conclude tha - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n25 We address below the concerns raised by the small size of the class of speakers bur - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - b. That section 533(b) does not, on its face, "burden or benefit speech of a particular co "a regulation neutral on its face may be content-based if its manifest purpose is to re A review of Section 533(b)'s history, including the origins of the precursor FCC rule, tic practices in the cable transport market and to preserve diversity of ownership of elec ecision to replace, in drafting Section 533(b) based upon the FCC [*196] rule, "CATV" Our content-neutrality analysis is still not at an end, as we have yet to examine Secti : such a regulation may confer benefits based upon content of speech, "require or prohibit ch they disagree, or "produce any net decrease in the amount of available speech," id. All o express points of view with which they disagree or, for that matter, any point of view, The question of whether Section 533(b) "produce[s a] net decrease in the amount of avai imiting the amount of available speech, the likelihood that some point of view or discussi t speakers within a single medium, often present serious First Amendment concerns." Id. at subset thereof) but not others." Id. Rather, laws of this nature are "constitutionally suspect only in certain circumstances." as Writers' Project, Inc. v. Ragland, 481 U.S. 221, 231, 95 L. Ed. 2d 209, 107 S. Ct. 1722 hat an illicit governmental motive was behind either of the taxes, both were structured in neapolis Star, 460 U.S. at 585. But such heightened [**47] scrutiny is unwarranted when Id. Although common carriers are not members of "the press" insofar as 47 U.S.C. @ 202 tricts a class of speakers from joining the press by operating, with editorial control and "there [is] no evidence [of] an illicit governmental motive," id., but which is"structured Here, because Section 533(b) affects, in any one given geographic area, only the local ain ideas." Turner Broadcasting Sys., Inc., 114 S. Ct. at 2468; cf. Arkansas Writers' Proj lar danger of abuse by the State."); Minneapolis [*197] Star and Tribune Co., 460 U.S. a gins to resemble more a penalty for a few of the largest newspapers than an attempt to fav nation against telephone companies as speakers is justified entirely by the peculiar econo haracteristic of' the particular medium being regulated," 114 S. Ct. at 2468 [**49] (qu The fact that the class of speakers affected adversely by Section 533(b) happens to be he"must-carry" rules there at issue did not warrant strict scrutiny both because the speak the country, rather than just a select few," id. We believe, however, that Turner, Arkans nly where membership in the class is not justified by the characteristics of the particula irms our belief, for it makes no mention of the size of the speaker class adversely affect stic of' the particular medium being regulated." 114 S. Ct. at 2468 (quoting Minneapolis S ,'" Turner Broadcasting Sys., Inc., 114 S. Ct. at 2468 (quoting Leathers, 499 U.S. at 448) s of the medium of speech being regulated. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n26 The Court in Arkansas Writers' Project and Minneapolis Star held the discriminatory the medium being taxed; neither case holds that any speech regulation which regulates a sm - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**51] Section 533(b) cannot be said to "target" a small class of speakers; rather, Congress e ermined that this goal is achieved by regulating what turns out, incidentally, to be a sma ontent of expression is deemed neutral, even if it has an incidental effect on some speake a penalty for particular speakers or particular ideas," Leathers, 499 U.S. at 449, this ap Appellees further argue that the fact that Section 533(b) so severely limits the speech class here adversely affected [*198] result solely from the peculiar characteristics o ction 533(b)'s limitations on telephone companies' speech may aptly be described as "sever ion 533(b)'s operation is in no way content-based. Consequently, the telephone companies a programming" over their own common carrier networks. n27 For these reasons, we reject app picketing "before or about" any residence to intermediate scrutiny); cf. Lovell v. City o id on its face"). - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n27 We do not mean to imply that such "non-video programming" will be as effective a co d, and we address it, in our consideration of whether Section 533(b) affords viable altern n28 To the extent that our decision in Henrico Professional Firefighters Ass'n, Local 1 w. See also supra note 24. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**54] Accordingly, we will subject Section 533(b) to intermediate scrutiny and see if it pass B. To pass intermediate scrutiny, a content-neutral speech regulation must be "'narrowly t quoting Clark v. Community for Creative Non-Violence, 468 U.S. 288, 293, 82 L. Ed. 2d 221, ich Section 533(b) purports to serve must be "significant"; (2) Section 533(b) must be "na of which Section 533(b) regulates. We examine each of these prongs seriatim. 1. As discussed above in Section III, dual goals underlie Section 533(b): restricting tele programming directly over their common carrier lines, more aptly described as network-acc s. To determine whether these interests are "significant," we need not look beyond the Sup e government's interest in eliminating restraints on fair competition is always substantia Second, with respect to diversity of ownership of communications outlets, Justice Kennedy ral to the First Amendment." [**56] Id. Also of great [*199] significance is the gov w of information and ideas," id. at 2466. See id. There can be no question, then, but that the interests Section 533(b) serves are "signi 2. For a remedy to be considered narrowly tailored, it"need not be the least-restrictive o egulation promotes a substantial government interest that would be achieved less effective a regulation that "burdens substantially more speech than is necessary to further the gov the decisions of Congress and the experience of the [FCC]." Columbia Broadcasting Sys., In diate scrutiny, we owe deference to the Congress only to the extent that it makes factual ti v. Discovery Network, Inc., 113 S. Ct. at 1510 & n.13, we will not accede to Congress' ute banning indecent interstate commercial telephone communications was narrowly-tailored, itutionally acceptable less restrictive means, short of a total ban, to achieve the Govern s statutes, to make a record of the type that an administrative agency or court does to ac at, in formulating its judgments, Congress [*200] has drawn reasonable inferences base - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n29 In City of Cincinnati, the Court was faced with a city ordinance which prohibited t stantial" goals of safety and esthetics, as required for a regulation of commercial speech argument, noting, in pertinent part, that "the city['s] failure to address its recently d iated with the burden of speech imposed by its prohibition." City of Cincinnati, 113 S. Ct We reject the city's argument that the lower courts' and our consideration of alternative, are not subject to "least-restrictive-means" analysis. . . . A regulation need not be "abs estriction on commercial speech, that is certainly a relevant consideration in determining Id. at 1510 n.13. Because commercial speech receives less First Amendment protection th s, Ward, 491 U.S. at 798, the foregoing clearly applies to determinations of narrow tailor - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**59] In order to determine whether Section 533(b) is"narrowly tailored" to serve the governm the goals to which it is dedicated. The theory behind Section 533(b) is far from apparent s discrimination, thereby threatening the maintenance of diversity of ownership of the mea ly noted, to the extent that the existing Pole Attachment Act does not entirely prevent the possibil f Congress in enacting a prophylactic ban on a telephone company's ability to speak throug 830 F. Supp. at 930 n.29. We focus, then, on Section 533(b)'s effect on cross-subsidiza r an affiliate thereof to contract to transmit an unaffiliated entity's cable services ove r network to transmit video programming. Section 533(b) does not, then, prohibit the telep 533(b) achieves its goal of eliminating telephone company cross-subsidization by removing bsidization which they undertake is domination of the video programming market. In particu nation over the electronic means of access to American homes and businesses; this position , say appellants, it is the promise of the green pastures of domination over the video pro t this irresistible incentive, although the telephone companies could still establish domi - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n30 Appellant NCTA argues: If a telephone company can offer only transmission services, the telephone company cannot and, while paying improperly low prices for transmission, can choose to pocket the transm Appellant NCTA's Br. 42. We are not impressed with the strength of this argument. First e telephone company and cable operator are "affiliated." Thus, a telephone company may leg asively that it is advantageous for the cable operator not to "pocket the transmission sav il of cross-subsidization manifests itself in any way that the telephone company can use i mpany has contracted chooses not to pass the savings it garners as a result of its imprope distinguish itself from its competitors. Whether the cable operator opts to "pocket" these ansport market, whereupon the telephone company could likely extract some portion of the u wnsides of cross-subsidization is the misallocation of telephone company resources and the the cable companies with which they contract seek to use cross-subsidization to dominate t - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**62] At this juncture, we assume, arguendo, (1) that ordinary regulatory oversight is insuff domination over the video programming market provides an "irresistible" incentive to the t competition in the cable transport market, without which they would not so act. We therefo and congressional or regulatory attention, and that the problem may properly be addressed ve the goal of ameliorating this problem. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n31 We nevertheless echo the district court's observation that, "even under the governm ies would be in no better position to act anti-competitively in the video programming mark - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**63] The Congress did not buttress Section 533(b) with any underlying factual findings. Even er due process nor the First Amendment requires legislation to be supported by committee r n32 While the FCC's development of the rule that preceded Section 533(b) is more fully do ted to the possibility of other, less drastic regulatory schemes that might achieve the su was the threat to the cable transport market that telephone company engagement in pole-ac s, outlined above, involving the cable transport and video programming markets. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n32 Appellants note that Congress has considered and rejected the possibility of repeal ve alternative to Section 533(b) would effectively serve the provision's goals. We note, p as authoritative with regard to a provision enacted by a previous Congress statements by s Failed legislative proposals are 'a particularly dangerous ground on which to rest an inte nsion Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 650, 110 L. Ed. 2d 579, 110 S. Ct. 2 [**65] n33 We would speculate that the FCC at the time it enacted the regulatory precursor to cable television market was constitutional on the same theory as the broadcast television ng the goals desired. We also note that the Fifth Circuit, in approving the FCC rule that fostered Section 53 the Southwest v. United States, 449 F.2d 846, 859 (5th Cir. 1971). To the extent that thi , there was no need to understand or make reference to the series of evils outlined in the the question of whether its desired effect could have been achieved by some alternative l - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**66] Moreover, we agree with the district court, 830 F. Supp. at 930-31, that an "obvious le recommendation to Congress to repeal the provision): Congress could simply limit the tele ance of the channels on a common carrier basis to various video programmers, without regar - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n34 We need not address, and do not purport to address, the constitutionality of this a - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - At bottom, we conclude that Section 533(b) is not narrowly tailored because [**67] th ntially more speech than is necessary," Ward, 491 U.S. at 799. n35 See Turner Broadcasting re than simply 'posit the existence of the disease sought to be cured.' . . . It must demo uincy Cable TV, Inc., 768 F.2d at 1455)). - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n35 As noted above, the telephone companies have no inherent technological advantage th ies to overtake the cable transport market, then some additional monitoring of the video p e in the video programming market, such regulation could likely be less restrictive of spe - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**68] C. Having concluded that Section 533(b) is not "narrowly tailored" to serve the goals to w only infirmity to intermediate scrutiny, however; the provision also does not leave the t ore than an inquiry as to whether the regulation "completely silences" the speaker. Rather Clark, 468 U.S. at 295 (upholding Park regulation limiting camping in park to certain area - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n36 The district court made conflicting statements in this regard. In the context of it There is little doubt that the statute leaves open ample alternative channels for communic mming to anyone residing outside their area of service. Finally, plaintiffs may communicat 830 F. Supp. at 926. Elsewhere, however, in its discussion of narrow tailoring, the dis ion industry than a complete bar on their entry into that industry." Id. at 928. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [**69] Section 533(b) does not meet this requirement. The statute bars absolutely the telephon communication open to them: they may "arrange" to have programming of their choice transm the telephone companies cannot guarantee that video programming they wish to transmit to es may own cable systems in areas outside their areas of common carrier service does not a ent may tolerate speech regulations that "ban [a] particular manner or type of expression before or about" any residence allows for ample alternative channels of communication beca the Court: "The type of focused picketing prohibited by the . . . ordinance is fundamenta ., 475 U.S. 41, 53, 89 L. Ed. 2d 29, 106 S. Ct. 925 (1986) (city ordinance which "leaves s nication); Clark, 468 U.S. at 295, it does not accommodate regulations which ban completel its residents from placing signs on their property as a time, place or manner restriction, n 533(b) does not afford the telephone companies "ample alternative channels for communica - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n37 The appellants do not seriously suggest that the telephone companies' ability to tr - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - V. Judge Tilley and Judge Russell concur in the foregoing opinion; Judge Michael concurs i ecision herein. AFFIRMED CONCURBY: MICHAEL (In Part) CONCUR: MICHAEL, Circuit Judge, concurring in part and concurring in the judgment: With the exception of part IV.A.2, which discusses the applicability of "strict scrutin case. As the majority opinion explains, the government's arguments in favor of "minimal scrut rmediate scrutiny: it is not narrowly tailored to achieve the alleged governmental interes is in part IV.A.2 of the majority opinion is academic. See US West, Inc. v. United States, [**73] scrutiny); CF. City of Ladue v. Gilleo, 129 L. Ed. 2d 36, 114 S. Ct. 2038 (1994) nues of communication). I therefore respectfully decline to join part IV.A.2 of the majori