Challenging the Telco-Cable Cross-Ownership Ban: First Amendment and Antitrust Implications for the Interactive Information Highway

This Note explores options available to decisionmakers by analyzing Chesapeake & Potomac Telephone Co. v. United States (C & P), which set an important precedent regarding a telephone company\u27s First Amendment right to provide video programming over its own facilities in its local service area. C & P, a Bell Atlantic Corporation subsidiary providing local telephone service in Northern Virginia, claimed that the cable-telco cross-ownership ban, codified at § 533(b) of the Cable Communications Policy Act of 1984, infringes unconstitutionally upon its First Amendment right to freedom of expression. On November 21, 1994, the Court of Appeals for the Fourth Circuit upheld the Eastern District Court of Virginia\u27s decision that § 533(b) is unconstitutional under the First Amendment because it is not narrowly tailored. As a result of its holding, the district court enjoined the federal government from applying § 533(b) to prohibit C & P from transmitting over its own lines its own video programming. This Note argues that these courts should have found § 533(b) to be narrowly tailored because the statute is a reasonable method for Congress to address a significant problem: anticompetitive behavior in the telecommunications industry. To support this conclusion, this Note explores the antitrust concerns underlying the cross-ownership ban. Before reaching this antitrust analysis, however, Part II summarizes the background of the C & P case by discussing the significance of an interactive information highway, reviewing the regulatory history of the telecommunications industry and reporting the facts specific to C & P. Part III traces the C & P courts\u27 First Amendment conclusion that § 533(b), the cross-ownership ban, is not narrowly tailored. Part IV, the primary focus of this Note, analyzes potential anticompetitive behavior by telcos in the noninteractive and interactive video programming transmission markets, according to the antitrust doctrine of essential facilities. Part V presents three recommendations: (i) emphasize the role of interactivity in making judicial and legislative decisions about the information highway, (ii) in C & P and Other similar cases, courts should defer to Congress, especially considering the complexity of the facts pertinent to telecommunications reform, and (iii) to regulate the structure of telecommunications companies, apply the generally- applicable antitrust laws, which are less vulnerable to First Amendment challenges than industry-specific legislation, such as § 533(b)