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FI LED
For
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UNITED STATES COURT OF APPEALS " ,'-',I{
FOR THE NINTH CIRCUIT
PHILLIP 8. WINBERR','
CLU-lK. us Of
PREFERRED COMMUNICATIONS, INC., )
a California corporation, )
)
Plaintiff-Appellant,)
) No. 84-5541
v. )
} DC# CV 83-5846-CBM
CITY OF LOS ANGELES, CALIFORNIA,}
a municipal corporation; and
OF WATER AND POWER,
)
)
QPINIO!l
a municipal utility, )
Defendants-Appellees.
)
}
)
------ - -- ---------------)
Appeal from the United States District Court
for the Central District of California
Consuelo B. Marshall, District Judge, Presiding
Argued and Submitted December 7,
Before: ANDERSON, and FERGUSON, Circuit Judges.
St\EED, Ci rcui t Judge:
Preferred Communications, Inc. (PCI) brought an action
a r is ingunde r 4 2 U. S C. 1 983 ( 19 82) a g a in 5 t t he Cit Y 0 f Lo 5 .
Angeles (the City) and the Los Angeles Department of Water and
Power claiming a deprivation of rights protected under the First
and Fourteenth Amendments, as well as violations of the federal
antitrust laws, and various state law violations. The district
court had jurisdiction under 28 U.S.C. 1331, 1337, 1343, 2201,
2202 (1982), and under its pendant jurisdiction. It found as a
"
matter of law that the City's regulatory scheree did not violate
the first Arr,endment rights of a prospect:ve cable television
operator and that the City was immune from antitrust liability
under the state action exemption established in parr.e.I-Y.... Brown,
317 U.S. 341 (1943). Accordingly, the court dismissed PCI's
complaint without leave to amend, pursuant to Fed. R. Civ. P.
8
l2(b)(6).1
PCI appeals from this As the district court
10
II disrr:iEsed PCI's federal claims without leave to amend, its
decision iE final and appealable. Whittington y.-HbjttinatcD,
1'\ ,733 F.2d 620,621 (9th Cir. 1984); v, Westinghouse
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I 4 623 F. 2 d 11 7, 119 ( 9 t h C i r. 1980). This co u r t
therefore has jurisdiction over PCI's timely appeal under 28
J(, U.S.C. 1291 (1982). We affirm the district court's decision
insofar as it pertains to the plaintiff's antitrust claims and
18 reverse its dismissal of the First Amendment claim.
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A decision to dismiss a complaint for failure to stcte a
claim upon which relief can be granted is reviewable de novo.
731 F.2d 1379, 1381 (9th Cir. 1984).
In conducting this review, we must accept all material allegations
in the complaint as true. 730 F.2d 1319,1320
(9th Cir. 1984). All doubts are resolved in favor of the
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plair,tiff. E..ilLest W.-..liQhn_L.JnC. y. CQdd...ins, 615 F.2d 830, 834-35
(9th Cir. 1980). A dismissal cannot be upheld it appears
beyond doubt that the plaintiff can prove no set of facts in
support of his claiD ..... hich ..... ould entitle hi iTt to relief.,n l..Q. at
834 (quoting Conley 3 .... GibsQn, 355 U.S. 41, 45-46 (1957)) i accc::d.
Co" 672 F.2c 1305, 1309 (9th Cir. 1982).
With these principles in mind, ..... e tUrn to PCI's coroplaint.
II.
THE
As alleged in PCI's complaint, the pertinent facts
appear as follows. PCI is a corporation which ..... as organized for
the purpose of operating a cable television system in an area of
Los Angeles designated by the City as the Scuth Central District.
PCI's intended operation entailed the installation of a net ..... ork of
distribution cables in the region pcr ..... ished to serve. PC:
propcsed to attach its cable to existing public utility facilities
-- poles and conduits located on property o..... ned in fee by the
utility and on or under easements o..... ned by the utility running
over both public and private rights of ..... ay.
For a number of years, utilities throushout the state of
California have dedicated surplus space on their facilities for
similar uses. The California legislature recognized this
dedication, at least with regard to nonmunicipal utilities, when
it enacted Cal. Pub. Util, Code 767.5(b) (West Supp. 1984)
(dedicating surplus space and excess capacity on public utility
support structures for use by cable television companies).
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PCI approached utilities in the Los Angeles area
-- the Pacific Telephone and Telegraph Company and the Los Angeles
Department of Water and Power -- to negotiate a lease of space on
those companies' poles and conduits. Both utilities informed PCI
that such an agreement would not be possible until PCI obtained a
o cable television franchise from the City. PCI then petitioned the
City in an attempt to obtain such a franchise.
8
The City allocates franchises through an auction
process. Franchising or licensing the construction of a cable
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television system is authorized by Cal. Gov't Code 53066 (West
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Supp. 1984).3 The City requires companies wishing to participate
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in the process to submit to a variety of conditions. p..
potential
p,
bidder must pay a s1'o,ooo filing fee and a $500 good faith deposit
1 and must agree to pay up to an additional S60,OOO to reimburse the
1 )
City fo r expenses incurred in holding the auction. It must
16 provide the City with a detailed proposal outlining its intended
operations over the succeeding nine years and must demonstrate to
18 the satisfaction of the City that it has a "sound financial base,"
19 that its proposed operations constitute "sound business plans,"
20 and that it has the proper "character qualifications" and
21 "demonstrated business experience." The City also requires
22 hopeful bidders to to pay the City a percentage of future
23 annual gross revenues and to provide a variety of customer
services, including at least 52 channels of video service and
interactive (two way) service.
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More significantly, the City exacts a to
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provide various mandatory access and leased access channels.
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Bidders must agree to provide, without compensation, two
for use by the City and by other government entities, two channels
for use by educational institutions, and two channels for use by
the general public, along with staff and facilities to aid in
programming. Bidders must further agree to provide two leased
access channels as well. An undertaking to provide portable
production facilities and to permit free use by the City of all
poles, towers, ducts, and antennas is a+so required.
Finally, potential cable operators must agree to leave a
variety of business decisions to the discretion of the City.
Pricing and customer relations are left to the City's control.
The operator must form a "cable franchise advisory board," SUbject
to City approval. Lastly, the City reserves the right to inspect
the cable a ration upon demand and requires a waiver of any right
to recover for damages or other injury arising from the cable
franchise or its
After the submission of bids from companies willing to
submit to the foregoing conditions, the City chooses the operator
it deems to be "best" for each area. It awards just one franchise
in each region. The City refused pel's request ;or a franchise
PCI had failed to in the auction process, The
City will not permit PCI to operate a cable television system in
the South Central District under any circumstances.
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III .
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PCI 's appeal raises two issues -- one constituticnal and
one statutory . The constitutional one is whether the City's cable
franchise procedure in any respect violates the First
' The statutory one is whether the City is imrr,une from
liability under the doctrine of Parke.L-Y.... .-BJ;Qiill, 317 U.S. 341
I (1943).
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PCI's arguments amount to a sweeping attack the
I City's cable television franchising process. PCI contends, int:r
ali a, t hat its rig ht' to cons t r U c t a cab1. e tel e vis ion s y s t e r.: and
disseminate programrr.ing via the cable nediuIT. should not be
conditioned upon having to participate in an auction procedure or
be otherwise subject to the City's discretion. It maintains that
the City cannot choose which cable providers may use the City's
facilities to install and operate cable systems and cannot
! condition that use on such requirements as the City has imposed in
1 th i s case ..
These contentions are wide-ranging. Were we to atterr.pt
to respond in like measure, we would not escape the charge of
rendering advisory opinions poorly as sweeping dicta.
On the other hand, we cannot regard this case as one which is
either unripe for decision or moot. PCI has sought a franchise
frorr, the City which the City to date has refused to grant.
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An escape our dilemma would be to identify
issue which, if decided in favor of the City,
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require affirming the judgment of the district court and which, if
decided adversely to the City, would require reversal and a
redesign by the City of its procedures relating to
television. Ke believe such an iEsue is as followE:
Can the City, consistent ,,;ith the First Anlendr:1ent,
limit access by means of an auction process to a
given region of the City to a single cable
television company, when the public utility
facilities and other public property in that region
necessary to the installation and operation of a
cable television syster:1 are physically capatle of
accommodating more than one systerr?
Ke do not decide the validity of any of the specific requirements
called for by the City's franchising process. In particular, we
do not decide whether the City may validly require cable operators
to turn over channels for use by the governrnRnt, by educational
institutions, and by the public and fer leased use by others.
4
The City denies that even this issue need be confronted.
It asserts that pcr lacks standing to challenge its franchising
process. Although not denying the presence of a physical capacity
to accommodate more than one cable television system, the City
maintains that the physical scarcity of available space on public
utility structures, the economic scarcity of the cable medium, and
the disruptive effect that installing and maintaining a cable
system has on the public domain each justify its effort to
restrict access to its facilities to a single cable television
corrpany. Finally, the Cities of Palo Alto and Menlo Park and the
Town of Atherton, as amici curiae, assert that the City's
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I,I! franchising scheme presents no irnpecirrent to PCI's ability to
originate and thus does not contravene the First
Amenon,ent. Each of "these arguments will be considered in turn.
Ke conclude that the question we consider raised by
appeal should be answered negatively. For that reason we reverse
(, I: the district court's dismissal of PCI's First IHT,endn,ent claim.
A. Standing
8 The City contends that, because it did not participate
in auction process, PCI lacks Article III standing to
challenge the City's regulations. The Supreme Court set out the
mini10uD requirer.:ents for standing in Y9..ll..fy forge
12
464 (1982). To invoke a ccurt's authority, a party ITlLst:
"show that he personally has suffered actual
or threatened injury as a result of the
illegal conduct of the defendant,"
j -.t.Qj; .s...-.Y_L.YiJ.ll-9s;..-.9.f.....B..eJ.J.1.LQQQ , 4 4 1 U. S. 9 1, 9 9
1(, (1979), and that the injury "fairly can be traced
to the challenged action" and "is likely to be
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redressed by a favorable decision," .sJjTc9ILL
426 U.S. 26,
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38,41 (1976).
19
lJL. at 472 (footnote orr,itted). 5
PCI suffered no actual or threatened injury, the City
21
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maintains. Any injury is said to be purely speculative. Ke
22 disagree. PCI's action challenges the auction process itself. It
has been barred from access because of its refusal to enter the
bidding process and abide by the City's numerous conditions. It
follows that PCI clearly alleges a real injury, fairly traceable
20 to the challenged action of the City. If PCI is right on its
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Turning to the issue of the first Amendment protecticn
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(, Ii enjoyed by cable television, it is clear that some such protection
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eX1S s. W&Q--..S2tellite PrQQ!;lcts City 01
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694 F.20 119, 127-29 (7th Cir. 1982); ,C.Q;::rr:cnity
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C) i City of 660 F.2d 1370, 1376 (lOth
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Ci r. 1 9 81), I Qi s , 4 56 tJ. S. 1 0 0 1 ( 1 9 82); Vic eQ
II) I:
571 F.20 1025, 1052-:)7 (8th Cir. 1978), aff'g.-ill)
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440 U.S. 689 (1979); Inc'_'lJJ:.ll,
567 F.20 9, 43-51 (D',C. Cir.), .UJ:--L 434 U.S. 829 (1977).
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The before us is this protection an
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affirDative to the issce this appeal raises or requires a
If) negative ar:s\,;er.
Initially, the City argues that the standards applicable
to govetr:reent regulation of broadcasting also govern the
:1) reg;Jlation '0 cable. We disagree. hOe: recognize that the First
Areendment the government greater latitude in regulating the
2-: b r 0 ad cas t IT'. ediul:i t han i ten joysin r e CJ L; 1 a tingot her, mo ::: e
190 (1943). And several courts, to a varying extent, have applied
the broadcasting standards to the government's efforts to regulate
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80; 399 F.2d 65, 69 (8th Cir.
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Supp. 97 6, 9 8 3 - 8 S (D. R . 1. 1983). e dec 1 i r. e t 0 do so. "Each
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of expression .. must be assessed for First Affiendnent
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purposes by standards to it
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"[Dlifferences in the characteristics of new media justify
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differt:nces in the First Arr:enckent standards applied to them. E.e..d
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CQ., 395 U.S. at 386. Despite the superficial
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similarity between broadcasting and cDble television, there are
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significant differences between the two media have First
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1 Ii mencrr.en t consequences.
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: '\ iI h e SU F r e 17, e Co u r tIs d e t e r rr. ina t ion too11 0 \0,' g r e c. t e r
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il governn,ent intr:;sion intc the aff2:irs of broadcasters rests or. thE:'
1(, physical scarcit::l of radiowavesi the electrol1lagnetic spectrum
1 simply is physically incapable of carrying the rressages of all who
19 Al...tQ, 579 F. Supp. 1553, 1563 (N.D. Cal. 1984). AS Justice
Unlike other modes of expression, radio inherently
is not available to all. That is its unique
characteristic, and that is why, unlike other modes

of expression, it is SUbject to governmental
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\, regulation. The right of free speech does
not include, however, the right to use the
::,c, facilities of radio without a license.
2(.
319,
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I I 14 t, 3, 1 4 58 (D C. C i r . ), .cnJ:-L 104 S. C::. 525 (} 9 R 3); s...c.Q_tt
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: II Y... 702 .F.2d 1263, 1272 (9th Cir. 1983) f gg;.'l.ikQ,
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104 S. Ct. 1439 (1984). licensing, the broadcast sI-ectrcr
would be rendered virtually use:ess to all.
, That is not the case under the alleged facts before us.
(, I! per wishes to obtain permission to string its cable frc'l7l utility
peles and through utility conduits. Because of pel's refusal to
wIth the City's auction process, the City has that
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the aV21lable space on secr. facilities is to an cndetermined
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extent physically lirr:itec, the First Amend:;:ent star.dards
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I applicable to the regelation of bro casting pern'it it to restrict
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access and alJow only a single cable Frovider to instull and
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operate a catle television syste:c.

Apparently the only case to physical scarcity
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rat ion ale t 0 cab1 e tel e \' is':' 0 n insu c hadirec t f ash ion i s D..l.2k
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case involved the FCC's efforts to recu!ate an early community
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antenna syster. that r:-:erely retrans:7,ittec sisnals received fron:
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broadcastin's stations; ca:::lle technOlogy, ho....ever, has evclved

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at 1563 n.19. More recent cases have expressly concluded that the

phYsica 1 sea rei t y rat ion ale doe s not a p ply to cab1 e ,

Co., 694 F.2d at 127 (" [FJ requency
2(' interference lis1 a problem that does not arise with cable
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essential precondition of [b::-oaacast] theory -- physical
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interference and requi;ing an umpiring role for
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therefore, is a -- is absent.").
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Moreever, PCl has alleged in its complaint that tbere U
space available on the City's poles and in its conduits. pcr has
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8 alleged that the City has held itself out as a provider of space
n on its utility po:es to cable television companies and that stDte
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resuires private utilities to make space available for the
I! 'I attachr;,ent of televison cable. Cal. Pub. Util. Code
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767.5(b) (hest Supp. Because must accept
H i alleqations as true,' we must finei that the physiccl scarcitv that
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1\:; could justify increased reg'Jlcticn of cable operatlons does not
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1'\ ii ex i s tin t his cas e . I'; e ex pre s s no 0 pin ion 0 nthe iss u e 0 f t r. e
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I(,:i rlianner in which the City should .:lllccate access to poles and
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18 incapable of accommodating all those seeking access.
2.
til-1.!H 2 J _tLY _ll .. ti ! j l1--.-9i.-G 19
.llfgyJ->1tiQIl
20
The City asserts next that, because cable te:evision is
21
a natural economic scarcity justifies government
,
regulation. We need not decide this issue at this time. PCl's
complaint alleges that co etition for cable services is
economically feasible in the Los Angeles area. As we must accept
this allegation as true, we must conclude that no natural monopoly
20
exists.
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In passing, we note that the Supreroe Court rejectec an
argcment that rested a particular government regulation of the
l'NrJ.J..l..Q, 418 1l.S. 241 (197-1), the COl:rt invalidated a state
statute granting political candidates a riSht to equal space to
reply to criticism in ne ....'spapers. Tbe Court reft.:sed to acc t the
plaintiff's argument that because economic conditions made entry
into newspaper markets difficult, the government could impose a
limited right of access to the press. Although the Court
acknowledged that most newspapers enJoy a monopoly in their areas
of distribution, it did not conclude that this circumstance gave
to a duty to provide public access to the press. at
249-58; Ljdwest 571 F.2d at
567 F.2d at 46.
Several cases, however, have concluded that cable's
alleged natural monopoly characteristics do provide a basis for
SOIr.e degree of government regulation.
660 F.2d at 1379;
571 F. Supp. at 985-86; te 11 i
.P...rQQ.J.lD S CQ'., 694 F. 2d at 127 -2 8;
562 F. Supp. 543, 547 (h'.D. Ky.
1982). I n the Te nth Ci rc ui t
distinguished T.9.rn.i.ll.Q by tying the natural monopoly
characteristics of cable to the fact that installing and operating
a cable system burdens public utility facilities and streets. The
cocrt asserted that the economic scarcity present in IQrnillQ "was
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unrelated to a disruptive use of the public domain reqciring a
governrrent license." 660 F.2d at 1379. A cable company, by
contrast, "must significantly iDpact the public dorrain in orcier to
operate; without a license, it cannot engage in cable broaocastir.g
! to disseminate infornlation. n
This staterrent is much too broad. It suggests tbat
simply because cable's disruption of the public don,ain gives rise
to a need for licensing, it would also justify the monopoly the
City seeks to create by its auction process. We find it
necessary, however, to undertake a mere detailed inquiry into
whether tbe City's auction process is a perrrissible governniental
8
response to the burden imposed by cable on public resources.
no ..... turn to that question.
3
ill--DJ; _M.9JJHiiQn
Concluding that cable is not cnaracterized by physical
scarcity analogous to that of the broadcast r.1eoiun; or by econolrlic
scarcity does net r;lean that .all resclation of c2b)E operations is
Cir.), 434 C.S. 829 (1977). The First Arr,endment
does not preclude governr.,ent regulation of noncommunicative
aspects of speech.
453 U.S. 490, 502 (1961) (Opinion of White, J.) ("[Tlhe
governrrent has legitimate interests in controlling the
noncommunicative aspects of the medium, but the First and
Fourteenth Amendments foreclose a similar interest in controlling
the communicative aspects.") (citation omitted).
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The Supreme Court articulated a test for the
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reascnabJ eness of regu la t i on s in
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[A] regulation is sufficiently justified
'I! if it is withir. the const:tutional pc\-.'er of the
if it furthers an importar.t or
4
substantial governmental interesi; if the
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I goverr,rrenta::' interest is I'nrelated to the
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suppression of free expression; and if the
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incidental restricticn on alleged First Anendment
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freedons is no greater than is essential to the
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I 748 F.2d 527, 534-35 (9th Cir. 1984). pcr concedes that
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the City has an interest in minir.:izir.g the disruption of t[:e
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public domain and that thIS interest is "unrelated to the
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The question preser.teci, tben,
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is whether allowir.g only the conpany selected through the
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" francbise auction process tc erect and operate a cable s tern in I,
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each region is the lEast restrictive r..eans aV2.:.l2tle to the City
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to further its interest in protecting public resources. Ke hold
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that under the facts alleged in this case it is not.
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Cable televjsion, to requires the use of
18
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facilities, and this provides a justification for some governDent 1')
regulation. The City has legitimate interests in public safety
"20
and in maintaining public thoroughfares. In .cMr:uni.t.J:
21

;..Ql;',1J.WJ,.t;.fl.sj.Q.D.-r2......, 660 F.2d at 1377, the court recognized that
cable entails use of the public domain and that this use
23
constitutes a basis for governmental regulation that is not
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present in case of rs: 2)
A city ne s control over the number of times its
citizens must bear the inconvenience of having its
26
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streets dug up and the best times for it to occur.
Thus, and cable operators are tied in a
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" way that government and newspapers are not.
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at 1378; 694 F.2d at 127
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Regulating such use and inconvenience, however, is quite
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different from restricting access, as the City attempts to do
II here. It has not been alleged that public utility facilities
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owned or controlled by the City can only support the use of a
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() 1/ single or a few cables. Indeed, PCI has alleged precisely the
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contrary. A different and more sharply focused response by the
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City could protect the legitimate interests of the City and its
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citizens.
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Certainly, the mere fact that the on publIC
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resources creates 2 neecl for gcvernment regulation dces not lead
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to the conclusion that the Firft allows 25 nuch
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governnient intrusion in the cable area as it does \.;itb regard to
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Calif. L. Rev. 1393, 1405-08 (1982). t;or do we believe that tbe
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City's in protecting the putlic domain justifies its
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effort to auction off the right to operate a cable television
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systerr. The City's interest is not enough to counterbalance the
22
risk that diversity in editorial judgments will be limited by the
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City's determination to choose the cable providers that it will

permit to use the medium. r.L

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418 U.S. 241, 258 (1974) ('''The choice of material to go
into a newspaper, and the decisions made as to limitations on the
size and content of the paper, and treatment of public issues and
4 public officials whether fair or unfair -- constitute the
exercise of editorial control and judgment. It has yet to be
(, demonstrated how goverr.ment regulation of this crucial procEss can
be exercised consistent with First Amendment guarantees of a free
R press as they have evolved to this time.")
4 . OD
ES:-9llbli.Qn
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Cur conclusion that the question before us should be
11
answered, "No," is aided by Supreme Court cases shaping the public
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doctrine. Khat PCl wants, in essence, is a right of access
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t 0 uti 1 i t l' pol e and cond lit S U: 2l tar e e i t [; E: r 0 ',om e d 0 r con t r 0 11 e d
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by the City, subject, of course, to reasenable terms designed to
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compensate the City for the use of these facilities. PCl wishes
to disseminate its message to the public. Of course, "the First
Amendment does not guarantee access to property simply because it
129 (1981). Rather, the nature and character of the property at
issue fix the conditions under which we must evaluate both pel's
claimed right of access and the limitations imposed by the City on
460 u.s. 37, 44 (l98J). "The crucial
question is whether the manner of is basically
incompatible with the normal activity of a particular place at a
- 17
8
.
G
-
I



1
18

21
22
2-1

21.
pa r tic u 1 art i Jne . " , 408 U.S. 104, 116
I (1972); 710 F. 2 d 1410, 1414 (9 t h
,
.i Cir. 1983) ("l-lerely public access to prof'erty other
than streets or parks .. does not open the facility for use as
a pcblic fore1.1. The place or its intended use mcst
render the facility appropriate for expression.") (citation
I,
omitted).
The Supreffie Court has identified three categories of
public property. At one extreme are "places which by long
tradition or by government fiat have been devoted to assembly ancl
det-ate .. "
This category includes "streets and parks . [that] have
ir.;r.errloriall
1
' been held in trust for the use of the public aro,
time out of mind, have been used for purposes of assel.1bly,
communicating between citizens, and disccssing public
questior.s." , 307 U.S. 496, 515 (1939) (Opinion of
J.l. In such places, the First Amencment sharply
curtails the gove:nment's ability to limit expressive
may not ban communicaticn entirely, it may enforce content-neutral
regulations of the ti;r,e, place, and of expression that "are
narrowly tailored to serve a significant governn.ent interest, and
leave open ample alternative channels of communication."
312 U.S. 569 (1941). To pass constitutional
scrutiny, a content-based exclusion of expression must be
"necessary to serve a corr,pel1ing state interest and narrowly
- 1B
II
460 U.S.
I II d r a .' n t 0 a chi e " e t hat end,"
.' II at 45; 447 U.S. 455, 461-62 (1980) .
i
I
A sec 0 n d t ego rye0 ri s e s pub1 i cpr 0 per t l' t hat the
I
government has opened for use by the putlic for expressive
: II
(,
R
q
If)
1:.'
I
Ii

:I
The third and final catesory is property "which is not
II
I'"
1(,
1
18
If)
20
21
n
2'
21
_,<, J
Z(,
I
i
..L....Y... 454 U.S. 263 (1981) (university meeting
facilities opened for use by student groups). Although the state
is net required to retain the open character of its facilities
indefinitely, while it does so, the standards applicable to the
I
I
traditional public forum govern the state's regulatory efforts.
I
I
government is to enforce reasonable place, and
I
regulations .. l...d......
I
I
by tradition or designation a forum for public
"
There, "[iln addition to time, place, and manner regulations, the
State may reserve the forum for its intended purposes,
communicative or otherwise, as long as the regulation on speech is
reasonable and not an effort to suppress expression merely because
public officials
460 U.S. at 46.
a. .l.Lt.i... __lt.rL1l.Qt Trasti t iona..l
Public fQrujns
reject the contention that merely because utilitJ'
poles and conduits are located on or under public streets and
- 19
I
II
I
il
II
II
I
, I
. I
it
I
<. I
(,
I:
Ii
II
I
8
()
I
10
II
I
II
I
:1
I
Ii
14
II

I ()
,
18
19
20
21
n
23
24

:()
rights-of-way. they constitute traditional public
G. Shariro, P. Kurland, & J. Mercurio,
..
175-84 (1983). The
precludes such a conclusion. There, the Court a municipal
ordinance prohibiting the posting of signs on public pro rty
including public utility poles. Citing O'Brien, the Court
concluded that the govelnment had a valid interest in advancing
aesthetic values and that the ordinance was no broader ttan
necessary to protect that interest. 104 S. Ct. at 2129-32.
The Supreme Court also rejected plaintiff's
contenticn that the public property covered by the ordinance
constituted a public forum or should have been treated as a public
forUffi because of its location on streets and thoroughfares which
traciticnally .... ere so viewed. lQ. at 2133-301. The plaintiff
had not demonstrated "the existence of a traditional right of
access respecting such items as utility poles for purposes of
their communication comparable to that recognized for streets and
parks " at 2134.
He do hOwever, that Vincen...t governs tbe
issue before us. First, pcr's envisioned use of the City's
facilities -- stringing or laying cable is basically compatible
with the use of those facilities carrying phone and
electricity lines. This was not true in Vincent, where the
- 20
plaintiffs sought to post signs on lampposts and utility poles.
It is possible, therefore, that although the public utility poles
and conduits are not public forums tradition or designation,
0; I each may nevertheless serve as a forum for expression via the
(. Metropolitan 745 F.2d 767,773 (2d Cir.
1984) ("Public property,
which is neither a traditional nor
R a designated public forum, can still serve as a forum for First
o Amendment expression if the expression is appropriate for the
!u property .. and is not' incompatible with the norr:-al activity
11 of a particular place at a particular ti:re. '") (citZltion or..itteo)
I, Tr:us, ...;hile a flat ban on sign posting IT,ay constitutE: a narrowly

lfi
1
19
20
21
22
2'
21

20
tailored rrease:e to pro:rote the City's interest in
banning the installation of cable is not necessarily the lcast
restrictive way to further the City's interest in n'inirdzing
408 U.S. 104, 116 (1972) ("The nature of a place, 'the pattern of
its norrral dictate the kinds of regulations of time,
place, and n,anner that are reasonable. I") (quoting Hright,
22 Vand. L. Rev. 1027, 1042 (1969}).
Second, PCI's complaint sufficiently alleges that the
uti 1 i t Y fa c iIi ties at issue d.Q. constitute a kind of public forum,
either by tradition or by designation. The State of California
has dedicated "surplus space" on public utility structures for use
- 21
,.
'... ':,'""",- ....
by cable television companies. CuI. Pub. Util. Code
767.S(b) (Kest Supp. 1984). And as to City-owned structures, pcr
alleges that the Los

Angeles Department of Water and Power has
held itself out to cable companies as a provider of pole
attachment services. Moreover, the franchising process itself
G constitutes the City's effort to grant at least some access to its
facilities.
Treating the utility structures as a type of public
forum places lirrits on the City's ability to exercise its
8
I
licensing power. Khile the City may promulgate reasonatle tirre,
10 Ii
place, and manner regulations, it not limit access under the
II II
I.:.' il circumstances set forth in the issue before us.
11
...rliJjIL9b.9l'2, 394 O.S. 147, 150-51 (1969)
(" [Al 120 .....
1 \ II
subjecting the eXErcise of First Arrendment to the prior !-l
restraint of a license, without narrow, objective, and definite
Ie) standards to guide the licensing autbority, is
18 743 F.2d 1346, 1357 (9th Cir. 1984) ("Unfettered
19 1 discretion to license speech cannot be left to administrative
20 bodies."). The City may not solicit "bids" from prospective
21 speakers and deny access to its facilities to all save the highest
22 "bidder" in each region.
23 ?>loreuver, even if requires the conclusion that
the utility poles and conduits do not constitute a public forum
for the purpose of cable transnission , the City may not suppress
26 ' expression on those structures merely because it disagrees with
- 22
II
I
!
Ii the sake r 's vi e',.;po in t . S5.& 460
II
ii 11.5. at 46. y,'hile an outright ban .,.,.oulci be vie'Wpoint neutral, .see
104 S. ct. at 2128-29, the City's action in
the instant case creates an impermissible risk of covert
discrimination based on the content of or the vie.,.,.s expressed in
(\ I the operator's proposed prograrring. &.s;. p&i..f..!'QO
SQcie-..tyJ..Qr 452 U.S. 640, 649 (1981).
Yiocent does not support the City's attenpt to single out one
8
() cable television company to be the one speaker it 'Will to
10
use public property for expressive purposes, 'While it forbids
access for those purposes to all others.
1J
I
1
I
Allowing a procedure such as the City's 'Would be akin to
l!
Ii
'I
I ; allowins discretion to grant a permit for the
Ii
11
I
operaticn of vending machlnes located on public streets
only to the that the governrrent believes "best" serves
1<'
the con;r;:ur.ity, a practice 'Which 'We find clearly invalid. S$S-L 1(,
I
I
666, 673-75 (11th Cir. 1984) (striking down a license tax
18
applicable to newspaper vending machines that gave the city
19
council discretion to deny issuance of a license .,.,.here the
applicant failed to comply .,.,.ith pertinent orciinances and
20
21
regulations). the City must content itself with
2?
uniformly applying to all applicants regulations tailored to
2'
minimize the bureen on public resources and granting franchises to
24
all cable operators who are willing to satisfy the City's
2'1
legitimate conditions. We repeat, .,.,.e do not in this opinion
2()
- 23
address a situation in which the City lacks the facilities to
'I
, I accomr;;odate all who othen..-ise meet its conditions .

R
18
19
20
21
23
..
5.
l:1il IlQslJ: Q..G'_..9 ..nn..e..l5JJ)
y e Ca
Amici suggest that the City's licensing procedurt
imposes no restriction on PCl's First Amendment rights. Tbe
I mandatory access and leased access requirements, amici assert,
!
provide PCl with the opportunity to originate programn.ing and to
disseminate its message using the cable medium. The City merely
require that PCl use another's to its
programming. Ke disagree.
Ke reject the contention that the City's access
requirements provide complete p:otection for the exercise of
expressive rights. Arranging programming for an entire .catle
television system entails engaging in a wide variety of pr0tected
activities.
lO
the chance to share a few mandatory
access and leased access channels with others for the right to
operate an entire cable system necessarily diminishes pel's
opportunity to engage in such protected activities. A law
allowing free expression in public parks only for a few minutes at
6 a.m. hardly provides an adequate replacement for the right to
free, lntrammeled in that forum. By the sarre reasoning, we
believe the City'S franchising program does not provide PCl with
an adequate substitute for its right to operate a cable system.
Our conclusion can be reached in another way. The cases
recognize tllat an otherwise valid restriction on protected
expression may be rendered invalid, if the modes of communication
- 24

8
()
J(;
I J
il
,I
:1
I,
I
1:'
II
I:'
I
1-1
II
I,
Ii
1'\
II
](,
II
I-
II
I
IS
19
20
21
.,.,
...
n
:: .\
2'"

that rer::ain are inaceq'Jate. SeeJ e.g., 104
S. Ct. at 2132-33; licll.LQll, 452 U.S. at 654-55. B'Jt the reverse
J
is not truC'. That 15, an otherwise invalid restriction on
protected activity is not saved by the availability of other
of expression.
61, 76 77 (1981) ("' [OJ ne is not to have the exercie of hiE
liberty of expression in appropriate places abridged on the plea
that it may be exercised in some other place. I") (quoting
1346, 1355 & n.8 (9th Cir. 1984). The City's arsument is hard to
distinguish from an asserticn that a law prc!libiting Mr. X or Mrs.
y putlishing a newspaper is valid, so lcng as each if
provided an adequate space to print his or her in already
existina Obvio'Jsly, such a law be invalid. Ke
conclude, therefore, that allowing pcr access to another's
channels is not the equivalent of providing it access to an
audience by means of its own cable.
We repeat the iss'Je we undertook to resolve:
Can the City, consistent '.dth the First }\ITlendment,
access by means of an auction process to a
given region of the City to a single cable
television company, when the public utility
facilities and other public property in that region
necessary to the installation and operation of a
cable television system are physically capable of
more than one system?
ll
Our answer lS . no, thelY C't cannot.
- 25
v.
ANT I T FJ) S T HlllJ.1.NJ.TI
States, "as sovereigns," are immune from
liability under the Sherman Act. .E9_Ll<e: v. BrQwD, 317 U.S. 341
(1943). This stems from principles of fe ralisIT: the
Supreme Ccurt unwilling to attribute to Congress an
unexpressed intent to restrict state authority to replace
cOGpetiticn "dth regulation or public ownership. .eLiQ. at 350
52.
Municipalities and other pclitical subdivisions of the
IU
state, however, do not automatically in the
11
I
II
435 U.S. 389 (1978), the Court held that a municipality could be
I \ I'
I -i II
sued under the antitrust laws for refusing to sell gas ar.d water
1 I:
to residents living outside the city lirrits whc would not olso
1(, :1 agree tc purchase electricity from the city. A plurality of the
!I
Court advanced the view that a municipality's anticompetitive
conduct is not shielded from antitrust scrutiny, unless the
18
municipality acts "pursuant to [a] state pclicy to displace
20
19
carr-petition' witb regulaticn or monopoly public service." lj-<.. at
21 413 (plurality opinion). The plurality emphasized U',at the state
policy pursued by municipality must be "clearly articulated
2"\ and affirmatively expressed." at 410 (plurality opinion).
24 A majority cf the Court confirIT,eo the LP.fi"\J::.e1.li plurality's
opini or. in 455
12
2() U S. 40, 51 (1982).
- 26
!I
Three questions confront us. The first is whether the

, Iii
I
City acted under a "clearly articulated and affirmatively
I
l,
II
,I
expressed" state displacing with regu12tion or
II
monopoly in the area of cable television. AT.other q:.Jestion arises
fron
l
the fact that the 5cprerre Ccurt has ir:posed the
requirement of active state supervision over pclicies
authorizing antic titive conduct as a conditien to
Rn II granting state action imJ:lunity to such conduct.
, ReJ;jlj L.J.,j I
445
I!
(1980). h"hether this active supervision
arplies to rrunicipalitles there:ore also be
addressed. The third question is whether our helding with respect
to the First deprives the City, as PCl contends, of any
Etste action under the antitrust laws.
Follc..dng and BQ\.;lder, this circuit has
at,." 0 par t t est fo r assessing the availability of
municipal y, B..rQJill ilT:lT:Unlt:i.
To prove that a policy is clearly articulated
20 and affirmatively expressed, the City must
demonstrate not only the existence of a state
I
policy to displace competition with regulation, but
21 Ii
also that the legislature contemplated the kino. of
')1
actions alleged to be antico etitive.
L.
..La, 746 F.2d l370, 1373 (9th Cir. 1984).
2(.
- 27
.
The City's franchising process is authorized by Cal.
;} i Gov't Code 53066 (West Supp. 1984) .13 That provision is
entirely it does not require or compel franchising or
exclusive franchising, but merely provides ttat cities "may"
license or franchise the construction of community antenna
(, tel e 'J i s ion s y s t ems u sin9 pub 1 i cpr 0 per t y and e a s emen t s
Inc. v. City Qf 579 F. SUPF. 1553,
8 1556:'7 (N.D. Cal. 1984) (discllssing sect.ion 53066).
o PCI argues that a "clearly articulated and affirmatively
10 expressed" state policy means a clear and express state policy to
II supercede the antitrust laws and that section 53066 does not
reflect such a policy. PCI points out that the provision merely
permits cities to franchise cable systems and to consider
accepting consideration other than cash in awarding the franchise.
Consequently, PCI contends, the City's determination to eliminate
16 competition among cable operators by limiting the number of
I f ran chi s e sit iss u e s ref 1 e c t s ti..t..Y. pol icy not 5...t.illl pol icy. We
18 disagree.
19 In making this argument, PCl relies on the Supreme
20 Court's decision in There, the municipality passed an
21 ordinance placing a moratorium on the plaintiff cable company's
22 efforts to expand its Gervice. The city planned to invite new
23 companies to submit proposals for cable service. The plaintiff
sued, inter alia, under the antitrust laws. 455 U.S. at 45-47.
The city was a "home rule" municipality, granted extensive powers
2G of self-governr::ent by the state constitution. lJ:L.. at 43 & n.l.
- 28
.:.
"
(,

R
o
]0
il


14
15
1
18
10
20
2]
22
23 i
24

26
The question faced by the Court was whether the hone rule
I provision in the state constitution alone afforded state action
!/ immunity tc the cit:/. The Court decided that it did not. The
II
1 requirerrent of "a clearly articulated and affirmatively expressEo
I state policy" is not satisfied ""hen the Stc.ite's position is one
of mere respecting the ITH.:nicipal acticns challenged as
I
I anticcmpetitive. A State that allo....'s its municipalities to do BE
I
i
I'
they please can hardly be said to have 'conterrplated' the specific
anticompetitive actions for which municipal liability is sought."
lJL. at 55.
PCI asserts that, like the rule provision at issue
in EYJ.l.l!.:3S;...r, the permissive stance taken by California with regard
to cable franchising reflects ITere nectrality with respect to
cable should be competitive. The City "can choose to
prescribe monopoly service, while .. another can elect free-
market competiton .
"
lJL. at 56. Both alternatives are
comprehended by the power granted by the state. lQ....;
Eletl.rj.<;_i"..9-L-'y... Municip.Q]Jl..tjJj.t;y Dist-I-.icr, 526 F.
Supp. 276, 278-79 (E.n. Cal. 1981).
PCI's argument is not without force. We agree that the
state has vested its with discretion in exercising
their delegated power to franchise cable television. Ke do not
believe, however, that this fact strips the City of state action
i mmunit y
To begin with, the present case differs from
The home rule provision at issue there had nothing to say about
- 29 -
'.
cable television regulation. 455 U.S. at 55 ("Nor can [the
anticompetitiveJ actions be truly described as 'comprehended
wit h in the po.... e r s sinc e the t e r m , , g ran ted,' nece s s a r i 1 Y
q implies an affirmative addreSSing of the subject by the state.'
<, The S::. () ted i d not d0 sobere . . ."). Her e, t b e Cal i f (J r ni a
(, leg i s 1at u r e has es s ed the sub j ect of cab Ie
television ....:ith a statute that is far rrore specific than thut
i nvo 1ved in BillJJJ:ltl.
R
0
1
Section
II
53066 marks a clear legislative to delegate central
il) Ii
over cable television to local authorities. Furthermore, the
II Ii
I: i:
Ii
legislature reaffirmed this determination when it passed section
i\ Ii 53066.1, a that removed local authority to regulate rates
II
14 II chJrged by certain cable operators. With reference to local
Ii
I <; Ii regulation of other aspects of cable television, the legislature
I
found that
16 1
I [wJhile the development and the regulation of
cable television is a matter of statewide concern,
the Legislature finds and directs that the exercise
of the police po.... er of the State of California
18
concerning cable television except as
ot he ndse 01 r ecteo bv the Lee: isla t u re I r..e.rnitiDJn
-:!o
19
Q_Lsitles
21
Cal. Gov't Code 53066.1(p) Supp. 1984) (statement of
'
22
legislative finding and direction) (emphasis added).
Narrowly drawn, explicit delegation is not required.
The Supreme Court has never held "that the challenged municipal
conduct need be ir:escapably mandated by the State."
20
74G F.2d at 1372; :rurf Arizona
- 30
..
670 F.2d 813, 823 n.8 (9th Cir.), QS:.Di1:J), 456 l'.S.
, 1011 (1982). Tr.e do not require "that a political
. II
subdivision necessarily be able to to a specific,
, I
detailed lcsislative it properly rray a
I
<; ; defense to an antitrust suit." 4 3 5 U. S. at 415
- . 745 F.2d 1270, 1273 (9th Cir. 1984).
R I
Kere it the specter of antitrust liability
o 1/
unduly hamper the state's ability to allocate
authority between itself and its subdivisions. Restricted too
I 'J 'i
II
would be its use of municipalities to regulate areas requiring
II
flexibility and the exercise of wide discretion at the local
I':
I level. SJ'::; 435 U.S. at 416 (plurality opiniGn) i I ,
.1
](,
I' Harv. L. Rev. 435, 445 n.49 (981). hOe are unwilling to irrpose
Ii
}-
I
'I
these constraints.
II
18 :1
I;
Thus, we concl\.2de that ..Q..L.lli inrnunity exists ..;her.
1
Ii
19
find "'from the authority given a governmental entity to operate
I
::0
I
in a particular areal] that the legislature contemplated the kind
I
of action complained of,' n 435 U.S, at 415 (plurality
21
opinion) \quoting y.
2!
Q2...., 532 F.2d 431, 434 (5th Cir. 1976), Qff'Q, 435 U.S. 389
n
::-1
differently, in the past we have looked to ftwhether the
':'1
action is a 'necessary or reasonable consequence of engaging in
21,
- 31
I
Ii
\"
Ii
745 F.20 1266, 1269 (9th Cir. 1984) (quotin? Bil.Q
<;;1
'I U1...:L, 705 F.2d 1005, 1013 (8th Cir. 1983; 9S:J;;..Q..r..Q 5]?V..nQ..S
419, 427 (8th Cir. 1983);
700 F. 2 d 376, 381 ( 7 the i r. 1983), 9 ran ted, 104 S. Ct. 350 e
8
(984) .
We enr::loyed this approach in Cj;UfvisiQD
745 F.2d at 1266. Tr.ere, the defendar.t city ir.ter.ded
to issue one, nonexclusive cable license, reserving the right to
issue other nonexclusive licenses later. Accordingly, the City
granted the license to cne company and denied a license to
plaintiff. The state statute authorizing catle licensing, Ariz.
JO
Rev. Stat. Ann. 9-506 (Kest. 1977), was, if anytbing, less 1(,
specific than section 53066 ..nj:..1UY fE;CS'J-'LlJ Inc., 579 F.
SUppa at 1557 n.9. It werely provided that cities "may issue a
19
1
1 ieense to any rson" for the purpose of regulating tte
20
18.
constructiCn and operation of cable television systems and
21 required tr.at cities impose restrictions on the use of public
22 streets and on the 2onstruction and maintenance of cable systems.
n 1 .sf:.e. 7 4 5 F. 2 d at 1268- 69.
I We observed that cable television systems, much like
i
telephone and public utility systems, burden public resources and
26 that the statute accordingly directed the licensing authority to
- 32


Co
8
C)
III
1J
1
1
14
1'i
1(,
I
15
19
20
21
n
2)
"impose conditiGns, restrictIons, and limitations" cn the use of
public streets and on the construction of cable televisen
However, concluded that "the legislature necessarily
conteITplated that cities would limit the nurnter of cable providers
despite the anticornpetitive ef{ects that such action might have."
l..d. a t 1 2 6 9 7 0 . The ref 0 r e, the s tat ute a f for d e d s tat e act i en
immcnity to the city's decisicn tc issue a single, nonexclusive
license.
,
see no reascn to reach a different result tbis
I
,
i
case. Secticn 53066 expressly notes that cities "may
I
I
the [franchisee or licensee] to place and
I
appurtenances .. alon:::; or across streets, high...ays, alleys,
I
I! public pr erties, or public easer.;ents," indicatIng tbe
Ii
legislature's that it delegating regclatory
Ii
.1
authority to deal th1 burden on public resourcez
Ii
cable television. That some cities, to minimize tr.e disruption of
I'
public resources, might limit the nUITLer of cable providers seems
I
I
to US to constitute at least a reasonable consequence of their
engaging in the authorized regulatory activity. This possibility
surely was in the conte lation of the legislature when it enacted
section 53066. Accordingly, we conclude that the City acted
pursuant to a "clearly articulated and affirmatively expressed"
state policy to displace competiton with regulation.

2')
20
sacond
The Supreme Court,
requireffient of active
as pointed out above,
state supervision for
set out a
state action
- 33 -
I 4 4 5 V. S. 9 7 (19 8 0). I n vol ve din the cas e was an
antitrust challenge 'to California's resale price maintenancE and
price posting requirements for the wholesale wine trade. Although
the Court found that the statute satisfied the "clearly
articulated and affirmatively expressed state policy" test, iQ. at
,
I
105, it nevertheless struck down the law because California
neither exercised direct control over wine prices nor reviewed the
() reasonableness of the prices set by the ....,ine dealers. l.Q. at 100,
IU 105-06. The Court concluded that the statute did not shield the
II dealers from antitrust liability because the state did not
I: actively supervise its anticornpetitive policy. l..Q. at I05-C6.
applied the active state supervision requirement
1.1 to conduct by 2.IJ,Yitt..f. parties. In E...oJ,Jjd.eJ.:., ho',.,'e';er, the Court
1<', ,r eXFlicitly left open the question whether this requirer.ent applies
,
) Q2...., 455 V.S. at 51 n.14. Although the Supreme COL:rt has yet to
18 resolve this issue, we have decided that no active supervision
It) requirenlent exists in suits challenging "traditional municipal
726 F.2d at 1434. Those decisions control
2J
22 this ca3e.
Moreover, they reflect a sound adjustment between the
2.1 principles of federalisrr. and antitrust law. States mllst dE:legate
authority to act to muniCipalities in order to immunize muniCipal
conduct from antitrust liability. "(Rlequiring state
- 34
'.
1\
I authorization for local conduct is analogous to r uiring active
I!
supervison of private conduct; it tests whether challenged local
activity is trGly state action therefore entitled to
immunity." P. Areeda, , 212.2a, at 47 (St.:Pp.
R'Ci r. 1 9 8 3), aD ted I 1 0 4 S. Ct. 3 5 0 8 (1 9 8 4). h" ear e not J
o willing to erode local by requiring states to oversee
lU regulatory functions that are best left to mt.:nicipal discretion.
11 To do so puts the states in the odd position of enforcing
at 71 n.6 (Rehnsuist, J., dissenting) i
726 F.2c at 1434.
L';s s_O,glr.
r t. t Q

\\e have already held that PCI adequately alleged a
srecific viclatlcn of the First Arnendrrent.
PCl contends that a
findin0 of unconstitutionality in any respect entitles it to
20 prevail on"its antitrust claim as well. To the extent section
21 53066 authorizes the City to use its franchising process in an
22 unconstitutional rr.anner, PCI asserts, the statute cannot afford
state action immunity to the City's anticompetitive franchising
process. We reJect this contention.
PCI's argument confuses two separate sets of purposes:
20 the purposes served by the antitrust laws and the purposes served
by the First Arrendment. State action is immune from the antitrust
- 35
,
.
i 1a\.'5 merely because the state itself has decided to act.
y. Ecr}...:i.n , 1 0 4 S. Ct. 19 8 9, 1 99 8 (1 9 8 4) . Co n 9 res s did not in ten d
the Act to &xtend to the sovereign acts of state
-4 9 0 verr. if; e n t s . p _L. , 3 I 7 U. S. 3 4 I, 351 ( 1 9 43). 'T e
First on the other hand, is directed at
o both federal and state. 'There is no ITore reasen to subject the
state to antitrust liability because of First Amendment violatiens
than there would be, for example, to deprive it of a federaJ
R
C)
subsidy such as mass transit aid.
It makes no difference that here it is the City that is If)
charged with the First Affiendment violation. For antitrust
J I
purposes, it is the state that has acted. "Clear articulation" 12
and nactive supervision" are merely analytical toels used to I
determine whether acts carried out by municipalities and private I
1<, entit':es are in fact the actions of the state. Ss:g; 104 S.
Ct. at 1995-96. PCl has alleged a First Amendment claim. It has 1(,
)
net alleged an antitrust claim. Each conclusion is
I 9
I:
'I
with the other.
14
I:
19 We reverse the district court's of PCI's First
I
I
Amendment claim and affirrr its dismissal of the antitrust claims 20
I
and rerr,and the case for further proceedings.
"
.."
.
21
AFFlru:ED IN FART, REVERSED FART, .
23

2<'
26
- 36
I
jj
It
Ii troubling cO!'"'.stitutional guestions. I csinS access requirer-er;ts
I::,
on the press ..... 0\.::0 no doubt be invalid. 5..!;J;: t'iiJrni BS'ul;
J
'II TC;;iilJ...Q, 418 t,1.S. 241 (1974). Ccurts r.3ve
'II diviced as to the effect of the T..QLrUll..Q holding on the valicity
, of access iroposed on cable television operators.
II , 571 F.2d 1025,1055-56 (Eth
.. I: Cir. 1978) (suggest.:ng thct to tbe exter.t the gcveri.:r.ent1s
I! interest in ir:-t:'osir.g sech requi rer:-,ents sterrs fro;r, t[,e eCOn0:-71C
"Ii scarcity of t::e cab:e nediw:7', tbe Seprer:'e COt.:rt's decislcn lrl
Ii casts considerable doubt on the governrrent's ability to
(. i do so), 440 U.S. 689 (1979) :rUth l:lQJ_E.X
Office, 567 F.2d 9, 46 n.82 <D.C. Cir.) (suggestir.g
that, unlike the right of reply statute invclved in IQr
0
illQ,
which was triggered by the publication of certain iterrs, rules
requiring cable operators to dedicate channels to carrier
R
use ..... ou1d not diminish the overall diversity of cable
() or deter the presentation of controversial rraterial regardIng
I'
I
public figures), , 434 U.S. 829 (1977) illll.l
10
I:
571 F. SUP? 976, 983-88
(D.R.I. ]983) (upholding franchising procedure that required
I:
,
applicant!: to t'lc\'icc access channels, for governrr.ental,
11
educaticnal, and use). decline to reach this question.
I
I
I
,i
I t;
.J
1
:' In I , the SL:Drei.,e Court also artict.:lated a set of
,I
- J.. - ..... 0
"
prudentic;.l li;i:ltatlcns on star.cing ..
!I
1.1
I:
"
7C9 f.2c 1268, 127C (9th Cir. Thes, the ?Jz.lntlff
Ii
must assert his lecal riahts ar.d interests; clal;, cannot
II
1
res tor. the r iSh t s 0 r i n t ere St S 0 fat r. i r d p G r t :t. 4 S 4 U. S. a t n 4
I:
Further, courts refrain frerr adjudicatIng "abstract
III
,
questions of significance" to "'generalized
I
grievances,' pervasively shared and mest appropriately addressed
I
i n t r. Eret:Jr e sen tat i v e bra n c h e s . " In...... a t 4 7 5 ( quo tin9 b:ll il.l:L_Y.......
422 C.S. 490, (1975)). Finally, the plaintiff's
interest rrust fall within "the zone of interests te be protected
I
or regulated the statute or constitutional guarantee in
18
!I
19 ques t ion. " (ot i rig ..
Qr9s.... 397 U.S. 150, 153 (1970). None of tr.ese
II
"
:!o
principles operate to deny standing te PCI.
i
579 F. Supp. 1553, 1562 Cal.
21
Ii 198';).
I
1,
..
6. Fer exa Ie, direct restrictions on the content of cable
broadcasts would generally be ir.valid.
571 F. Su 125 (S.D. Fla. 1983) (invalidates ordinance i osing
sanctions on cable licer.see's transmission of "indecent"
p r og r arrs) i . -Y.............F-.9y-..Cm, 555 F.
SL:PP. IlG4 (D. Utah 1982) (san-.e) i Inc. V,
, li.illsinsQD, 531 F. Supp. 987 <D. Utah 1982) (sa;:le).
- 38
<,..
r,.d4',"''''"'''
'.
7. In r1.i.QJ:!sst -Yjdeo the Eighth Circuit lirriteo
Bbs:};. to it.s facts, further ur:dercutting its
.!i precedential valee. 571 F.2d at 1054 n.71 (reading
I lUlls ViceQ as upholdinS FCC efforts to regulate cable operators I
'Ii.. us e 0 f r.;i c r c ..... a ve s); a 1S Q 579 F. SJpp .
. at 1563 n.19 (ooubt::Jg ccntinuing vit311ty of

" :
8. The Tenth Circuit also suggested that newspapers tad enjoyed a
lons tradition of freedom from interference, while
cable television had not. .. 660 F.2d
at 1379; Cablevisi9D.......Q.f Rhod.e Is:a.nQ, 571 F.
Supp. at 985. This distinction merely begs the question.
The district court in offered a more
heJpfuJ distinction. It asserted that, while a
o natural monopoly did not preclude the public's use of the print
Ii medh:r., cable's natural monopoly did prevent public use of the
Ii) Ii, television Dedium. 571 F. SL:pp. at 986. As a factual matter,
. however, it is not clear ttat this is tree. a.
11.
1
707 F.2d 1443,1459 (D.C. CiL) (not:.ng the proli ratlon of
i! staticns r;ir:ce the CClse ar,rJ thE:
Ii ,'. fact thE:.t nc ..... tr;(:re ar-e D.ary rr,ore stations than newspa rs, anc
!'
conclL:dir:g that nit unlikely that the First rer:t
1::'11. protectic;Js of broadcast politic.:::.l speech .,.,ill :urther,
and t bey '.,' ell ex nd . n ), !&.l:L de:: i e C, 1 0 4 S. C:::. 5 2 :; Cl9 83) .
I'; ir: a we must tesclve all OOL:btE lr: favor
of the plaintiff.
1j
I" i'
:I
P
16 ,II' 9. In their ar.icus brief, the Cities of Palo Alto, Menlo Park, I!
and Atherton suggest several other government "interests" served
1- by a restrictive franchising regi;;:e. An-ici assert that the City II'"
has interests in preventing "cream -- only
18 affluent, and therefore profitable, portions of the
i
i area; ensuring the provision of community access and leased access
19 to cable faCilities, and encouraging the development of state-cf
the-art cable terrs. Amici contend that these interests serve
20 I to justify the City's approach to cable franchising.
21 On the present state of the record, we cannot agree. Here,
the City bears the of proving that the elements ,)f the
-n" test are satisf.ied. .... City of
F.e n.t.Qn, 748 F. 2 d 527, 535 (9 t h Ci r. 1 9 3 4); f'i r s t at' 1 Si!M_.Qi
2' l3Qtl.9D_..Y.... J.ell.9tli, 435 U. S. 765, -;' 8 6 (1978); I 427
U.S. 347, 362 (1976) (Opinion of Brennan, J.). Nothing in the
24 record suggests that the City has a substantial interest in any of
the c n c ern s r a i sed by aIT! i c i . As,,, e i n d i cat e din
the City must justify its regulatio!1s in terms of its
probleITs. It ITay not rely on the problems faced by other
20 con.munities or on justifications that are merely conclusory and
s p e c u 1 a ti ve . 74 8 F. 2 d at 53 6 - 37 Fur the r DO rei the r e IT< us t be
- 39
,
., ., '..
i
II "
I
1\
Ii
i!
:,
'i
a showing that these interests are "unrelated
I;
of free exp::es:::ion." Sn 391 U.S. at
,
"
i:
nothing in the record on this issue. F:nally,
. Ii convinced that the of cable
to the
377. 'I'h2:e:s
we are not
operators
these intere5tE in the manner least on protected
l I:
expression. As we noted earlier, we express no opinion as to
whether the City impose its access and coverage
ji
by other means. These issues are not before us.
It
i
(,
I
1 C I n ad cit ion toorig ina ting the i rown pro9 r a IT IT: i n9 I cab: e
television operators exercise consloerab1e editorial discretion
regarding what their prograrr,rning will inclt:de. FCC v.
il
CQ r P ., 440 U. S. 689 I 707 & n. 1 7 (l97 9). Ec: itoria1 j ud 9 IT,e n t
I
I is entlt1ed to First Arrenc:-:,ent protecticn. ..L1
8
lieJi!J.9J-,-,..p.lishl.:;s_ !:...Q... --YJ --.!.o-=....'}.U..l.Q I 418 U. S. 24 l, 257 - 58 ( 1974)
<) I
Undenlably, cable operators do prograrrs produced by
I
ott, e r s . T e e E: x t E: ntan 0 per.:: tor doe S 5 0, h0,,' eve r, webeli eve i t
would be treated for flrs: pcrposes as would be theater
I 'J II
" ot,.:ners, and concert ThE-ir first ;.r;.enciller,t
II
II
'. protection is not di:-:inlshec becaLse tr.ey distribute 0:: present
'!
'Works created by others.
I
I'
390 0.S. 676 (1965) (;-:,ov:e thea:ers); !3S!
I!
Ii 372 U.S. 58 (1963) (bocKselle:s);
I ;
:
74'S F.:o Cit 567-68 (cor,cert And PCl
ooes not leEe 1:S First fishts tecacse it
I-!
judgr.er,t is ter; :ec cc:-:"r;-.erci.::l co;":SiCE:::2.ticns.
7 4 5
I
Ii
F.2d 767, 772 (2a 1984) (sale of is by
I'
,I
the first .l\r"enc;7'ent); 745 c.20 at 561 (prc;:.oting
I ()
concerts for profit enjoys First l,;:-.eno;:,ent protect:c.n);
453 C.S. 490, 504 n.l1
Ii
I- (1981) (notine lower court's confusion of "the catecorv of
Ii 'coronercial sieech' with the categcry of h2v a
II
18
I comr.:e r c i a1 in te res t' in prot ec t ed s t.-e n);
.. 435 U.S. 765, 786 n.23 (1978) ("It is too late
Ii
19
II to suggest 'that the dependence of a communication on the
Ii
expenoiture of itself operates to introduce a ncnspeech
!I
,
20 eleDent or to reduce the exacting scrutiny required by the First
Amendr.,ent.") (quoting ... ValeQ, 424 U.S. 1, 16 (1976).
Ii
21
"
11. As a1reacy r:'en:icnec, ;;;J.J.;:..u; p. __ n.3, (1) of the
2':! II
Cable Cor.munications Policy Act of 1954, Pub. L. No. 98-546, 98th
Cong., 2d Sess. (1984), e owers a local authority to "a,,'aro
n
\1
1 or franchises within its jurisoiction." To the extent that
1\
this provision authorizes the governrrent to protect its interest
.:? ..
I,
in regulating disruption of public resources through a system of
perrnlts or franchises, 621(a) (2) (noting govern;:-,ent's
I:
interest in prorroting safety and in ensuring that the costs of
II
ir.stallaticn and opeu)tion are borne by the cable operator> i
I,
2(\
'I
602(8) (defining "francLise" uS an initial
II
autborization (or a rene,,'al thereof), whether desigr.ated as a
il
" - 40

I, ,} f.
(.
8
o
lU
11

1,
14
1'i
J (,
18
19
20
21
22
franchise, licer.se, permit, or othendsel, it passes muster under
the principles announced here. But we cannot agree with the
suggestion in the legislative hIstory that the provision "grants
to the franchising authority the discretion to the
number of cable operators to be authorized to provide service in a
particclar geographic area." H.R. Rep. No. 934, 98th Cong., 2d
Sess. 59 (1984). A constructicn of such breadth would be invalid.
12. The Boulder case concerred itself only with the availability
of injunctive relief. AltQ,
579 F. SUppa 1553, 1555 n.6 (N.D. Cal. 1984). Whether a majority
of the Court would similarly curtail a municipality's state action
immunity in a suit seeking treble darr,ages rerrains unsettled.
, 4 3 5 U. S. a t 4 4 2 - 4 3 ( B 1 a c k m un, J., dis senting); see a
CQ., 428 U.S. 579, 614 n.6 (1976)
(Blackmun, J., concurring in Judgment) (discussing availability of
a defense based on the unfairness of holding a private party
liable where the state's partIcipation docinates a decision to
adopt a restraint challenged under the antitrust laws and
asserting that "unfaIrness" would be a defense only to the
recovery of daGages, not to a suit seeking injunctive relief).
P. Areeda, 2l2.2b, at 48-49 (Supp.
1982) (arguing that daGages should not be availabJe in antitrust
suits brought against and that antitrust
scrutiny of municipal actions rray be more readily if
damages are unavailable). Pecacse ....'e concl-..:ce thct the statutoq:
authorizaticn for the Citv's franchising satisfies the
t est, ....' e don0 t r a c h t his iss u e .
13. relevant part, section 53066 provides:
Any city or county or city and county in the
state of California Gay authorize by
franchise or license the construction of a
community antenna television system. . The
award of the franchise or license may be made on
the basis of quality of service, rates to the
subscriber, to the city, county, or city and
county, experience and financial responsibility of
the applicant plus any other consideration that
will safeguard the public interest, rather than a
cash auction bid. Any cable television
franchise or license awarded .. pursuant to this
section ITay authorize the grantee thereof to place
WIres, conduits and appurtenances for the community
antenna television system along or across such
public streets, alleys, public
properties, or pcblic easements of said city or
county or city and county.
- 41