## Facts

- The FCC adopted 1975 rules regulating “pay cable television” and “subscription broadcast television” to prevent “siphoning” of desirable programming from free, advertiser-supported television to pay services.
- The rules restricted pay exhibition of certain feature films based on age, limited specified and non-specified sports programming, and (initially) barred all series programs; they also banned commercial advertising and capped sports/film hours at 90% of total pay operations.
- Home Box Office, Inc. and other pay-television and cable interests petitioned for review, challenging the rules on statutory, constitutional, evidentiary, and procedural grounds.
- The petitions were consolidated in the U.S. Court of Appeals for the District of Columbia Circuit to review four FCC orders issued in a single rulemaking.
- Petitioners also alleged the rulemaking was compromised by extensive post-notice ex parte communications between the FCC and interested parties.

## Issues

1. Whether the Communications Act authorized the FCC to impose detailed, content-based programming restrictions on pay cable television and subscription broadcast television.
2. Whether the FCC’s pay-programming restrictions were arbitrary and capricious or inadequately supported by the administrative record, particularly regarding cable.
3. Whether the challenged content-based limits and advertising ban unlawfully burdened expressive activity protected by the First Amendment.
4. Whether post-notice ex parte communications in an informal rulemaking must be avoided or disclosed on the public record to preserve fairness and judicial review.

## Decision

- The court vacated the FCC’s pay-cable programming rules, holding the Commission exceeded its authority over cable and lacked record evidence justifying the restrictions.
- The court upheld the FCC’s rules as applied to subscription broadcast television, concluding they fell within the Commission’s broadcast regulatory authority and were sufficiently supported.
- The court held that once an agency issues a notice of proposed rulemaking under APA § 553, ex parte contacts should be avoided; if they occur, they must be disclosed in the public record.

## Legal Principles

- An agency must identify a sufficient statutory basis before imposing detailed, content-based regulation on services not clearly within its core regulatory domain.
- Highly intrusive programming restrictions require meaningful record support; speculative harms are insufficient under arbitrary-and-capricious review.
- The FCC’s authority is materially stronger over broadcast spectrum licensees than over cable, where regulation must be justified as reasonably ancillary to statutory responsibilities.
- In informal rulemaking, significant post-notice ex parte communications that bear on the substance of the rule are improper unless made part of the public record to preserve transparency, meaningful comment, and judicial review.

## Conclusion

The D.C. Circuit set aside the FCC’s pay-cable “anti-siphoning” program restrictions for lack of statutory authority and evidentiary support, sustained comparable limits for subscription broadcast television, and imposed a strong disclosure/avoidance requirement for post-notice ex parte contacts in APA § 553 rulemaking.


Home Box Office, Inc. v. F.C.C., 567 F.2d 9 (D.C. Cir. 1977)