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Policy

Disney’s Balancing Act on Indecency

4/17/2005 8:00 PM Eastern

Washington— If Congress passed a cable-indecency law, would The Walt Disney Co hire lawyers to fight the government or the cable industry?

“I can’t predict what’s going to happen in court,” said Preston Padden, Disney’s executive vice president of worldwide government relations.

Padden’s cautious guidance was telling — and another sign that in the ongoing indecency battle here, Disney is going its own way: If necessary to inject some fairness in the law, Disney would not object to indecency regulation of cable’s expanded-basic tier.

“We think whatever the law is in the area, it should treat broadcast and cable the same,” he said.

WHERE NCTA STANDS

The National Cable & Telecommunications Association’s official position is that a cable indecency law would violate the First Amendment and that the best way to empower parents that want to filter racy content is to offer channel-blocking tools, such as digital set-top boxes.

“Our goal is to have each customer have the capacity to determine what’s their family-friendly tier or package,” said the NCTA’s Jill Luckett, who debated indecency issues with Padden at an April 8 Capitol Hill forum held by the Progress & Freedom Foundation.

So far, CBS, NBC, and Fox — all with substantial cable-programming interests — have not endorsed Disney’s position. Calling Disney a “valued member of NCTA,” Luckett said the occasional family feud was nothing new.

“What I have learned about the association business is that our members do periodically disagree about issues,” she said. “This is a case where there is some disagreement about how best to respond to efforts to extend regulation to cable programming.”

That Disney is outside the cable tent is more than a cosmetic problem, largely because the company owns such marquee brands as ESPN, Disney Channel and Toon Disney and because the company would be a formidable ally in helping kill cable indecency legislation.

But Disney’s defection is understandable. The company owns the ABC Television Network and 10 ABC stations that are subject to indecency rules that the Federal Communications Commission has been enforcing with renewed gusto since Janet Jackson’s fleeting breast exposure at the 2004 Super Bowl, which could end up costing Viacom Inc.’s CBS unit $550,000 in fines.

Congress is expected to continue the indecency crackdown. Angered by the coarsening of broadcast content, the House has already passed a bill with broad bipartisan support that would raise the maximum indecency fine from $32,500 per offense to $500,000.

The Senate is expected to do likewise, except that the scope of the measure will remain a mystery until Senate Commerce Committee chairman Ted Stevens (R-Alaska) decides whether he wants to sweep in pay TV providers.

To say the least, Disney is unhappy that the indecency legislation is targeting broadcasters and no one else. It is also dismayed at the randomness of FCC enforcement, with the F-word ruled indecent in some contexts (think Bono at the 2003 Golden Globe Awards on NBC) but not in other contexts (think last November’s broadcast of Saving Private Ryan on ABC).

“Unlike everybody else, we are disinclined to sit by and see ABC, CBS, NBC [and Fox] relegated to some highly regulated position while everything else remains unregulated,” Padden explained.

NUANCED POSITION

Disney’s approach to the indecency issue is somewhat nuanced. At the outset, Padden said he did not “wake up in the morning wishing we could get any channels regulated in terms of indecency.”

In fact, Disney prefers no indecency regulation, for cable or broadcasting. But from Disney’s perspective, the idea that cable remains immune from any regulation while the broadcast indecency vise is tightening is intolerable when today the vast majority of TV households subscribe to cable or satellite.

“What’s happening in his debate is everyone else seems content to leave broadcasting behind,” Padden said.

At the recent NCTA convention in New Orleans, Disney president and chief operating officer Robert Iger also addressed indecency and Disney’s stance on a general-session panel.

“We’re just asking for some logic to be applied,” Iger said. “We believe that if there are going to be rules — which we do oppose, by the way — they should be applied basically across the board to broadcast and to cable.”

In 1978, the Supreme Court upheld broadcast indecency regulations, declaring that radio and TV were “uniquely pervasive” and invaded the home in a manner easily accessible to children.

Since then, the FCC has been able to ban indecent broadcasts from 6 a.m. to 10 p.m., seven days a week.

The reasoning in FCC v. Pacifica Foundation is no longer valid because broadcasting is no longer “uniquely pervasive” when cable and satellite have 85% combined TV household penetration, Padden said.

“The facts are that cable and satellite service today is as pervasive as broadcasting was when the Supreme Court found it was permissible to regulate indecency on broadcast based on its pervasiveness,” Padden said. “Our position is there is no factual basis to distinguish any more.”

Cable’s exemption from indecency regulation was ratified by the Supreme Court in a case involving the Playboy Channel. Among other things, the court held in 2000 that cable’s ability to block channels meant that FCC rules restricting Playboy to late-night hours were not the least restrictive means of shielding children from exposure to pornography.

If blocking is the lesson taught by the Playboy case, Disney maintains that the federal government has no right to regulate broadcast indecency because nearly everyone with a TV can use the V-Chip or set-top boxes to exclude unwanted broadcast programming.

Disney would object if a cable indecency law went beyond expanded basic. Padden called for an exemption for premium and pay-per-view channels because they require an additional payment and are less widely distributed than expanded basic.

PAY-PER-VIEW PITFALLS

Adam Thierer — a Progress & Freedom Foundation senior fellow who has described FCC indecency policies as “clear as mud” — said limiting regulation to expanded basic wouldn’t work because cable channels would seek premium and pay-per-view status to remain beyond the reach of the FCC.

“It would mean some of the most popular channels or programs on basic cable or satellite would be forced to migrate to premium or pay-per-view tiers in order to avoid a widening censorship net,” Thierer said. “In other words, viewers will have to pay to escape censorship.”

Disney would backpedal if Congress decided that the best way to approach cable indecency was to require cable operators to quarantine edgy content on mini-tiers or make channels available a la carte, Padden said.

“Those remedies, which have a certain superficial allure to some people, would produce disastrous consequences both for the consumer and for everybody in the industry,” Padden said.

September