FCC: On the Offensive

, The American Lawyer

"This is really, really fucking brilliant-and really, really great," Bono said as he accepted a 2003 Golden Globe for best original song. At first, broadcaster NBC Universal, Inc., got off scot-free for airing the F-word. The Federal Communications Commission's Enforcement Bureau found that the expletive was fleeting and that, in context, was not indecent. But five months later, the FCC's five commissioners, led by Michael Powell, overruled the bureau. Without issuing a fine-since this case was admittedly a deviation from precedent-the commission issued an order saying that NBC had violated the statutory prohibitions on indecency and profanity.

The March 2004 Bono ruling was the opening shot in what would become the FCC's assault on television indecency. The commission has not ordered fines in all instances of profanity on broadcast television. (As many telecommunications lawyers note, Saving Private Ryan is a frequent feature on broadcast television.) Still, lawyers say that in the last five years the FCC has abandoned the restraint that had defined its indecency policy since the 1978 U.S. Supreme Court case FCC v. Pacifica Foundation. Although the Supreme Court ruled then that the FCC could regulate broadcast indecency (specifically George Carlin's "Filthy Words" routine), the commission remained very cautious in doling out penalties-until the Bono ruling. In 2003 the FCC issued three no-tices of liability, totaling $440,000. In 2004 it issued 12 notices of liability--demanding more than $3.5 million in indecency fines, according to FCC statistics.

"After the Golden Globe award, they changed their policy, and now they have what is effectively a zero-tolerance practice for any on-air expletives, or anything of that nature," says Miguel Estrada, cochair of Gibson, Dunn & Crutcher's appellate group. Estrada has represented NBC in several FCC indecency cases. Attorneys for broadcasters say the commission's policy change was largely the result of a new flood of complaints about indecency-from 111 complaints in 2000 to an average of more than 500,000 between 2003 and 2006. But defense lawyers say the numbers are misleading. "It's pretty obvious that a huge number of these complaints are not independent, separate sources of concern from the American public," says Sidley Austin's Carter Phillips, who has represented Fox Broadcasting Company in FCC litigation. He says advocacy groups such as the Parents Television Council (PTC), which have made digital complaint forms available online, are largely responsible for the spike.

PTC counsel Robert Sparks, Jr., of Virginia-based law firm Sparks & Craig, says the advocacy groups and the FCC are simply responding to increasingly indecent material on the air. "The myth and belief had grown up that pretty much anything goes," Sparks says. "But when things really got out of hand, and people started complaining, the FCC had to do something, and now the broadcasters are complaining."

So far, the courts have been sympathetic to the broadcasters' arguments. In 2006 Phillips con-vinced the U.S. Court of Appeals for the Second Circuit to vacate FCC orders of liability for cer-tain four-letter words used by Cher and Nicole Richie during the 2002 and 2003 broadcasts of the Billboard Music Awards. The FCC's change of policy toward fleeting expletives was "arbitrary and capricious," the Court ruled. "Agencies are not allowed to do 180-degree [policy] reversals without a clear explanation," says Phillips. In July 2008, the networks won again: The U.S. Court of Appeals for the Third Circuit vacated the FCC's $550,000 fine against CBS Corporation-which was represented by Robert Corn-Revere of Davis Wright Tremaine-for airing a brief glimpse of Janet Jackson's right breast during the 2004 Super Bowl. Among other things, the court ruled that the FCC had not given CBS proper notice of its clampdown on fleeting images.

Not surprisingly, advocacy groups haven't been happy with the appellate rulings. "I think that the judges are slicing things pretty thinly," says Sparks. "They are overlooking whether or not the broadcast at issue may actually be indecent. They are instead trying to avoid upholding the FCC's attempt to enforce the indecent statutes by dodging the question through procedural rulings."

Later this month, the Supreme Court will hear the FCC's appeal of the Fox case, with Phillips again arguing for Fox. If the Supreme Court upholds the Second Circuit's ruling, Phillips is hopeful that the FCC will return to its pre-Golden Globes policy of restraint. Also this month, the Second Circuit is scheduled to hear an appeal from ABC-represented by Wilmer Cutler Pickering Hale and Dorr-of a $1.2 million fine for showing an actress's naked buttocks for less than seven seconds on a February 2003 NYPD Blue episode.

While the FCC crackdown has kept litigators busy, it has also created more work for attorneys on the transactional side. As the FCC pursues a backlog of indecency complaints, televisions sta-tions seeking to renew their licenses before being sold have been forced to enter tolling agreements so that the commission can investigate outstanding indecency complaints. Within the past year, companies selling all of their licenses have begun putting money in escrow to cover the cost of potential fines.

Paul, Hastings, Janofsky & Walker telecommunications and media lawyer John Griffith Johnson, Jr., describes the tolling and escrow agreements as a sort of "safety valve" to ensure that deals don't come to a standstill.

"In an ideal world, the FCC would sit down, it would adjudicate the complaint, it would resolve it, and it would be done," he says. "That's just not happening in this highly politically sensitive area."