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July 21, 2008

FCC Fine for CBS’ Super Bowl “Indecency” Vacated [2:35 pm]

A violation of the APA forms the grounds for a vacate and remand in CBS v FCC:

The FCC possesses authority to regulate indecent broadcast content, but it had long practiced restraint in exercising this authority. During a span of nearly three decades, the Commission frequently declined to find broadcast programming indecent, its restraint punctuated only by a few occasions where programming contained indecent material so pervasive as to amount to “shock treatment” for the audience. Throughout this period, the Commission consistently explained that isolated or fleeting material did not fall within the scope of actionable indecency.

At the time the Halftime Show was broadcasted by CBS, the FCC’s policy on fleeting material was still in effect. The FCC contends its restrained policy applied only to fleeting utterances – specifically, fleeting expletives – and did not extend to fleeting images. But a review of the Commission’s enforcement history reveals that its policy on fleeting material was never so limited. The FCC’s present distinction between words and images for purposes of determining indecency represents a departure from its prior policy.

Like any agency, the FCC may change its policies without judicial second-guessing. But it cannot change a well established course of action without supplying notice of and a reasoned explanation for its policy departure. Because the FCC failed to satisfy this requirement, we find its new policy arbitrary and capricious under the Administrative Procedure Act as applied to CBS.

[...] In finding CBS liable for a forfeiture penalty, the FCC arbitrarily and capriciously departed from its prior policy excepting fleeting broadcast material from the scope of actionable indecency. Moreover, the FCC cannot impose liability on CBS for the acts of Janet Jackson and Justin Timberlake, independent contractors hired for the limited purposes of the Halftime Show, under a proper application of vicarious liability and in light of the First Amendment requirement that the content of speech or expression not be penalized absent a showing of scienter. And the FCC’s interpretation and application of 47 U.S.C. § 503(b)(1) are not sufficiently clear to permit review of the agency’s determination of CBS’s direct liability for a forfeiture penalty based on broadcast indecency.

Further action by the Commission would be declaratory in nature, as the agency may not retroactively penalize CBS. [...]

Indecency Penalty Against CBS Is Rejected

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