Second Circuit: The FCC indecency policy is unconstitutionally vague

The Second Circuit held on July 13 that the Federal Communications Commission‘s indecency policy “violates the First Amendment because it is unconstitutionally vague, creating a chilling effect that goes far beyond the fleeting expletives at issue here.”

In Fox Television Stations, Inc. v. FCC, 489 F.3d 444, (2d Cir. 2007), the Second Circuit had found that the Federal Communication Commission’s (“FCC”) policy banning fleeting expletive was arbitrary and capricious on three grounds under the Administrative Procedure Act (“APA”), 5 U.S.C. § 706(2)(A). First, the FCC had failed to explain why it had not previously banned such expletives as harmful. Second, such policy would require it to ban all broadcast of expletives, and by failing to do so, the FCC had undermined the coherence of its rationale. Thirdly, the Second Circuit was not convinced by the FCC argument that an exemption for fleeting expletives would then lead to a increased use of one-at-a-time expletives.

The Supreme Court did not find these arguments persuasive and reversed. Fox Television Stations, Inc. v. FCC, 129 S.Ct. 1800 (2009). A federal agency has the right, after all, to change its opinion: “the fact that an agency had a prior stance does not alone prevent it from changing its view or create a higher hurdle for doing so.” The Supreme Court noted that the FCC had always drawn distinctions between the offensiveness of some words, particularly taking their context into account. The Supreme Court sided with the FCC’s argument that a complete immunity for fleeting expletives would lead to their increase. The Supreme Court reversed and remanded for consideration of petitioner’s constitutional arguments.

The petition for review came on remand before the Second Circuit, and, on July 13, 2010, it vacated the FCC indecency policy because it is unconstitutionally vague.

What is the FCC’s indecency policy?

Section 1464 of Title 18 of United States Code provides that “[w]hoever utters any obscene, indecent, or profane language by means of radio communication shall be fined under this title or imprisoned not more than two years, or both.”

In 2001, the FCC published an indecency policy, the Industry Guidance, “to provide guidance to the broadcast industry regarding our case law interpreting 18 U.S.C. § 1464 and our enforcement policies with respect to broadcast indecency.” Material is indecent if it “describe[s] or depict[s] sexual or excretory organs or activities, and if the broadcast is “patently offensive as measured by contemporary community standards for the broadcast medium.”

The FCC also explained that it considered three factors to determine whether a broadcast is patently offensive:

(1) “the explicitness or graphic nature of the description or depiction;

(2) whether the material dwells on or repeats at length” the description or depiction; and

(3) whether the material appears to pander or is used to titillate, or whether the materials appears to have been presented for its shock value.”

On the difficulty to clean a Prada bag when soiled by cow excrement: fleeting expletives and the FCC

Nicole Ritchie explained during the 2003 Billboard Music Awards, broadcasted on Fox, that it is difficult to clean a Prada bag if soiled by cow excrement, but did so in somewhat different terms, with the help of both the F and the S words. A year earlier, Cher had used a solo expletive to comment on her receiving a Billboard Music Award. The FCC found Fox liable in both cases.

In 2004, the FCC declared for the first time, in the so-called Golden Globes Order, that an expletive use of the F-word and the S-word could be actionably indecent, even if the word is used only once, In re Complaints Against Various Broadcast Licensees Regarding Their Airing of the “Golden Globe Awards” Program, 19 FCC Rcd. 4975, 4976, n. 4 (2004.

Before this Order, an isolated or fleeting use of such words had not been considered indecent, and the FCC declared that “any such interpretation is no longer good law.” 19 FCC Rcd., at 4980. After it issued the Golden Globes Order, the FCC also started to fine broadcast licensees for indecency violations. It imposed $8 million in fines in 2004.

The 1978 Pacifica case

Indecent speech is protected by the First Amendment, unless it is obscene: “Where obscenity is not involved, …the fact that protected speech may be offensive to some does not justify its suppression.” Reno v. ACLU, 521 U.S. 844, 874-75 (1997).

In the Seventies, a father had complained to the FCC that George Carlin’s “Filthy Words” monologue, had been broadcast it in the afternoon and that he heard it while driving with his young son. In a declaratory order, Pacifica Foundation, 56 F.C.C. 2d 94, 98, the FCC defined indecent speech as “language that describes, in terms patently offensive as measured by contemporary community standards for the broadcast medium, sexual or excretory activities or organs, at times of the day when there is a reasonable risk that children may be in the audience.” 56 F.C.C. 2d, at 98. The FCC granted the father’s complaint, and held that Pacifica, the broadcaster, “could have been the subject of administrative sanctions.” 56 F.C.C. 2d 94,99.

A Court of Appeals reversed, and the Supreme Court held in FCC v. Pacifica Found., 438 U.S. 726 (1978), that indecent speech could be banned. However, the holding was very narrow.

Indecent speech could be banned because of two reasons, Pacifica, at 748-749, which the Second Circuit describes in its July 2010 ruling as “the twin pillars of pervasiveness and accessibility to children.”(our emphasis).

(1) the “uniquely pervasive presence” of the medium and

(2) the fact that the broadcasted program featuring such language is “uniquely accessible to children.”

The Supreme Court did not specify what level of scrutiny must be applied on broadcast speech.

Section 326 of the Federal Communication Act of 1934 prohibits censorship by the FCC, as it clearly states that the FCC has no power of censorship over radio communications, and that it cannot interfere with the right of free speech by means of radio communication. However, in Pacifica, the Supreme Court held that section 326 does not limit the FCC’s authority to sanction licensees engaging in obscene, indecent, or profane broadcasting. The FCC has the power to deprive a broadcaster of his license if the FCC decides that it would serve the public interest, convenience and necessity.

The FCC from then on interpreted Pacifica as permitting it to sanction indecent speech, whereas the broadcasters interpreted it, because of the narrowness of the holding, as setting limits to the power of the FCC by defining indecent speech only as speech having “shock value.”

Towards an overruling of Pacifica?

The Second Circuit was careful to state that they are bound by Supreme Court precedent, even though the world has changed since Pacifica: “The Supreme Court may decide in due course to overrule Pacifica and subject speech restrictions in the broadcast context to strict scrutiny.”

One of the arguments made by the Second Circuit in its July 2010 opinion is the fact that the media landscape has changed significantly since Pacifica. The Internet did not exist then, with its myriad of sites claiming our attention (the Second Circuit gives as examples Facebook, Twitter and Youtube). Cable television was “still in its infancy.” The Second Circuit, quoting Pacifica, argues that broadcast television no longer has that “uniquely pervasive presence in the lives of all Americans.”
Indeed, the “twin pillars” of Pacifica are shaking down.

First twin pillar broken: pervasiveness

Broadcast television is longer pervasive. It is just one of the many choices offered to us. The Second Circuit notes that 87% of households now subscribe to a cable or a satellite service, and that remote controls allow us to shift swiftly through channels. The Internet claims an important part of our attention as well.

Second twin pillar broken: accessibility to children

The Second Circuit also argued that, “as the FCC itself acknowledges, “[c]hildren today live in a media environment that is dramatically different from the one in which their parents and grandparents grew up decades ago.”” In the Matter of Empowering Parents and Protecting Children in an Evolving Media Landscape, 24 F.C.C. Rcd. 13171, at ¶ 11 (2009), for example, parents now have the power, thanks to the V-chip, to monitor which programs their children are watching on television.

The Second Circuit cited United States v. Playboy Entm't Group, 529 U.S. 803, 815(2000): “…targeted blocking enables the Government to support parental authority without affecting the First Amendment interests of speakers and willing listeners – listeners for whom, if the speech is unpopular or indecent, the privacy of their own homes may be the optimal place of receipt.

The FCC indecency policy is unconstitutional

The Second Circuit held that “the FCC indecency policy is unconstitutional because it is impermissibly vague.” A law or regulation is vague if it does not give a person of ordinary intelligence a reasonable opportunity to know what is prohibited.

The Second Circuit gave examples where the FCC had determined that “bullshit” was patently offensive, whereas “dickhead” was not. True, it is rather difficult to understand why one word would be deemed “vulgar, graphic and explicit,” but not the other one.

The Second Circuit also argued that, since the standards used by the FCC are “indiscernible,” there is a risk that they “will be enforced in a discriminatory manner.” However, the Second Circuit “ha[s] no reason to suspect that the FCC is using its indecency policy as a means of suppressing particular points of view.” The mere risk of subjectivity is a chill to speech protected by the First Amendment.

What responsibilities should those who collect personal data have?

The FCC pointed out in its Broadband Plan that “the fiduciary and legal responsibilities of those who collect and use that data are (…) unclear," and that “once consumers have shared their data, they often have limited ability to see and influence what data about them has been aggregated or is being used.” (p. 53).

There are a few federal laws which allow an individual to access and correct his personal data:

Right of access provided by U.S. Federal Laws
Some federal laws require that the consumer has access to his information after it has been collected. For instance, §609 of the FCRA gives consumers the right to ask a consumer reporting agency to disclose (almost all of) the information in their file, along with the source of this information. The disclosure must be made in writing (§610 of the FCRA).

As for medical information, 45 C.F.R. § 164.524 provides an individual with a right to access, inspect and obtain a copy of his protected health information contained in a designated record set.

The Cable Communications Policy Act of 1989 (CCPA) provides cable subscribers access to all their personally identifiable information which is collected and maintained by a cable operator. This information must be made available to them at reasonable times and at a convenient place designated by the cable operator.

Right to correct data provided by U.S. Federal Laws
Federal laws also sometimes give the data subject the right to correct his personal information. A consumer may correct information in his credit file if it is inaccurate, and §611 of the FCRA provides with a procedure in case of disputed accuracy. The consumer may notify the consumer reporting agency directly, which must then reinvestigate free of charge, correct the file or delete the item from the file if inaccurate. The Family Educational Rights and Privacy Act of 1974 gave students the right to inspect their records and correct their information, and under the CCPA, a cable operator must provide its subscribers with a reasonable opportunity to correct any error in their information.

European Law
In contrast, the European Directive 95/46/EC clearly states that “any person must be able to exercise the right of access to data relating to him which are being processed, in order to verify in particular the accuracy of the data and the lawfulness of the processing.” This right of access is provided by article 12 of the Directive, and it is the data controller who is in charge of insuring that data subjects can exercise their rights. A data controller is defined by article 2(d) as “the natural or legal person, public authority, agency or any other body which alone or jointly with others determines the purposes and means of the processing of personal data.”

The data controller responsibilities start when the data is collected, until the data is destroyed. Pursuant to the article 6 of the Directive, “every reasonable step must be taken” to ensure that inaccurate data are either deleted or corrected.

Recommendation 4.15 of the Broadband plan proposes that Congress should consider helping the development of trusted ”identity providers” to assist consumers in managing their data. But wouldn’t it be more efficient to provide American data subjects with a general right to access and correct all of their personal data?

FCC Broadband Plan and Privacy

The FCC presented this week its much-awaited National Broadband Plan.

Parts of the plan deal with online privacy, as broadband makes collection of personal data easier.

The FCC notes (Chapter 4, p.53) that “the emergence of broadband and the growing use of the Internet make aggregation of detailed personal data much easier and more valuable.” Since it is now easy to collect data from Internet site visitors, even single companies have the power to collect, aggregate and analyze massive amounts of personal data, allowing them to create a “digital identity,” that is, a very detailed picture of an individual, from his geographic location, his health, his eating and entertainment tastes, and so on.

This data is of great value to marketers, allowing them to target specific ads based on these digital identities, making it six times more likely, according to the FCC, that a consumer thus targeted will click on an ad.

The FCC is concerned about the impact that the ability of gathering these digital identities will have on competition. On one hand, companies already in the market have collected this massive amount of data over the years, allowing them to fine tune their marketing strategy. Indeed, according to the plan, this data is so valuable that these companies “increasingly offer their products and services free of any monetary charges. Consumers gain access to a valuable service, and businesses gain valuable information.”

In exchange for giving companies access to our personal data, consumers gain free products and services: I have a lot of problem with that statement. Let’s consider that personal data has a market value, allowing us to trade it for free products. Well, personal data does not have a sustainable value. The scenario "trade it once, lose it for ever" is a real possibility, as it is very easy to copy digital data. Like copyright pirates, we could see the emergence of data pirates. So, increasingly, as I trade more and more of my personal information, I will have less and less info to trade for these free products, and that may prevent me from dealing effectively in the market.

True, we evolve constantly as human beings, and new data is added to our digital identify every day. However, not every new data has the same value: the fact that Jane discovered that indeed Strawberry Swirl is her favorite ice cream flavor is not as important for her, nor as important for a marketer, as the fact that she will give birth to triplets in the Fall.

New firms without access to these detailed “digital identities” face competive challenges: The report goes on by noting that since new firms have not yet gathered these digital identities, they cannot monetize their audience through advertising and thus are facing competitive challenges.

The solution, according to the plan, is giving individuals control of their digital profiles: “Giving consumers control of their digital profiles and personal data, including
the ability to transfer some or all of it to a third party of their choice, may enable the development of new applications and services, and reduce barriers to entry for new firms.”

But is it really possible to transfer data to a third party without that data loosing some of its value? Our data has already been traded by Firm number 1 to an advertiser. If Firm number 2 comes later and proposes the same product, our digital identity, to the same advertisers, isn’t the value of our data then lower? Just as a digital photograph, digital personal information can be copied and stored instantly. True, Firm number 2 may have gathered more information on us, but if individuals keep “reselling” their digital profiles to every company in the open market, these profiles will lose their value, as every advertiser will be able to gain access to them, and thus none of them will have any longer the competitive advantage of knowing its target audience with such precision. Every firm will have that power, and the value of our digital identity will be diluted, thus impairing our own ability to trade it.

Corporations Have Personal Privacy

In AT&T Inc. v. FCC & USA, No 08-4024, the Third Circuit ruled that corporations have “personal privacy.”

Here are the facts of the case:

AT&T participated in a federal program administered by the FCC, designed to increase schools’ access to advanced telecommunications technology by providing equipment and services to elementary and secondary schools. AT&T billed the Government for the cost.

In August 2004, AT&T voluntarily reported to the FCC that it might have overcharged the Government for some work done. The FCC conducted an investigation, and ordered AT&T to produce some documents, such as invoices, internal e-mails providing pricing and billing information, names of employees…

In April 2005, CompTel, a trade association representing some of AT&T’s competitors, submitted a FOIA request for “[a]llpleadings and correspondence contained in” the Bureau’s AT&TE-Rate investigation file. AT&T submitted a letter to the Bureau opposing the request, arguing that the FCC collected the documents for law enforcement purposes, and therefore that the FCC regulations implementing FOIA’s exemptions prohibited disclosure.

Indeed, exemption 7(C) of the FOIA shields from mandatory disclosure “records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information . . . could reasonably be expected to constitute an unwarranted invasion of personal privacy.” 5 U.S.C. § 552(b)(7)(C).

The FCC rejected AT&T’s argument, and held that the exemption does not apply to corporations because corporations lack “personal privacy” within the meaning of Exemption 7(C). According to the FCC, this interpretation accords with the Exemption’s purpose to protect key investigation players from the “literal embarrassment and danger” that an individual might suffer, rather than from the “more abstract impact” that a corporation might suffer.

AT&T filed a petition for review of the FCC’s order, arguing that the FCC incorrectly interpreted Exemption 7(C).

The Third Circuit interpreted Exemption 7(C)as defining a “person” to include a corporation:

FOIA’s exemptions indicate that Congress knew how to refer solely to human beings (to the exclusion of corporations and other legal entities) when it wanted to. Exemption 7(F), for example, protects information gathered pursuant to a law enforcementinvestigation that, if released, “could reasonably be expected toendanger the life or physical safety of any individual.” 5 U.S.C. §552(b)(7)(F) (emphasis added). Yet, Congress, in Exemption 7(C), did not refer to “the privacy of any individual” or some variant thereof; it used the phrase “personal privacy.”