The question presented in this case is whether Oklahoma may require cable television operators in that State to delete all advertisements for alcoholic beverages contained in the out-of-state signals that they retransmit by cable to their subscribers. Petitioners contend that Oklahoma's requirement abridges their rights under the First and Fourteenth Amendments and is pre-empted by federal law. Because we conclude that this state regulation is pre-empted, we reverse the judgment of the Court of Appeals for the Tenth Circuit and do not reach the First Amendment question.
Since 1959, it has been lawful to sell and consume alcoholic beverages in Oklahoma. The State Constitution, however, as well as implementing statutes, prohibits the advertising of such beverages, except by means of strictly regulated onpremises signs.
Petitioners, operators of several cable television systems in Oklahoma, filed this suit in March 1981 in the United States District Court for the Western District of Oklahoma, seeking declaratory and injunctive relief. They alleged that the Oklahoma policy violated the Commerce and Supremacy Clauses, the First and Fourteenth Amendments, and the Equal Protection Clause of the Fourteenth Amendment. Following an evidentiary hearing, the District Court granted petitioners a preliminary injunction and subsequently entered summary judgment and a permanent injunction in December 1981. In granting that relief, the District Court found that petitioners regularly carried out-of-state signals containing wine advertisements, that they were prohibited by federal law from altering or modifying these signals, and that "no feasible way" existed for petitioners to delete the wine advertisements. App. to Pet. for Cert. 40a-41a. Addressing petitioners' First Amendment claim, the District Court applied the test set forth in Central Hudson Gas & Electric Corp. v. Public Service Comm'n of N. Y., 447 U.S. 557 (1980), and concluded that Oklahoma's advertising ban was an unconstitutional restriction on the cable operators' right to engage in protected commercial speech. App. to Pet. for Cert. 47a-50a. On appeal, the Court of Appeals for the
While petitioners' petition for certiorari was pending, a brief was filed for the Federal Communications Commission as amicus curiae in which it was contended that the Oklahoma ban on the retransmission of out-of-state signals by cable operators significantly interfered with the existing federal regulatory framework established to promote cable broadcasting. In granting certiorari, therefore, we ordered the parties, in addition to the questions presented by the petitioners concerning commercial speech, to brief and argue the question whether the State's regulation of liquor advertising, as applied to out-of-state broadcast signals, is valid in light of existing federal regulation of cable broadcasting. 464 U.S. 813 (1983).
Although we do not ordinarily consider questions not specifically passed upon by the lower court, see California v. Taylor, 353 U.S. 553, 557, n. 2 (1957), this rule is not inflexible, particularly in cases coming, as this one does, from the federal courts. See, e. g., Youakim v. Miller, 425 U.S. 231, 234 (1976) (per curiam); Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 320,
Petitioners and the FCC contend that the federal regulatory scheme for cable television systems administered by the Commission is intended to pre-empt any state regulation of the signals carried by cable system operators. Respondent apparently concedes that enforcement of the Oklahoma statute in this case conflicts with federal law, but argues that because the State's advertising ban was adopted pursuant to the broad powers to regulate the transportation and importation of intoxicating liquor reserved to the States by the Twenty-first Amendment, the statute should prevail notwithstanding the conflict with federal law.
Our consideration of that question is guided by familiar and well-established principles. Under the Supremacy Clause, U. S. Const., Art. VI, cl. 2, the enforcement of a state regulation
And, as we made clear in Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U.S. 141 (1982):
The power delegated to the FCC plainly comprises authority to regulate the signals carried by cable television systems. In United States v. Southwestern Cable Co., 392 U.S. 157
In contrast to commercial television broadcasters, which transmit video signals to their audience free of charge and derive their income principally from advertising revenues, cable television systems generally operate on the basis of a wholly different entrepreneurial principle. In return for service fees paid by subscribers, cable operators provide their customers with a variety of broadcast and nonbroadcast
The Commission began its regulation of cable communication in the 1960's. At that time, it was chiefly concerned that unlimited importation of distant broadcast signals into the service areas of local television broadcasting stations might, through competition, "destroy or seriously degrade the service offered by a television broadcaster," and thereby cause a significant reduction in service to households not served by cable systems. Rules re Microwave-Served CATV, 38 F. C. C. 683, 700 (1965). In order to contain this potential effect, the Commission promulgated rules requiring cable systems
The Commission further refined and modified these rules governing the carriage of broadcast signals by cable systems in 1972. Cable Television Report and Order, 36 F. C. C. 2d 143, on reconsideration, 36 F. C. C. 2d 326 (1972), aff'd sub nom. American Civil Liberties Union v. FCC, 523 F.2d 1344 (CA9 1975). In marking the boundaries of its jurisdiction, the FCC determined that, in contrast to its regulatory scheme for television broadcasting stations, it would not adopt a system of direct federal licensing for cable systems. Instead, the Commission announced a program of "deliberately structured dualism" in which state and local authorities were given responsibility for granting franchises to cable operators within their communities and for overseeing such local incidents of cable operations as delineating franchise areas, regulating the construction of cable facilities, and maintaining rights of way. Cable Television Report and Order, 36 F. C. C. 2d, at 207. At the same time, the Commission retained exclusive jurisdiction over all operational aspects of cable communication, including signal carriage and technical standards. See id., at 170-176. As the FCC explained in a subsequent order clarifying the scope of its 1972 cable television rules:
The Commission has also made clear that its exclusive jurisdiction extends to cable systems' carriage of specialized, nonbroadcast signals — a service commonly described as "pay cable." See id., at 199-200.
Accordingly, to the extent it has been invoked to control the distant broadcast and nonbroadcast signals imported by cable operators, the Oklahoma advertising ban plainly reaches beyond the regulatory authority reserved to local authorities by the Commission's rules, and trespasses into the exclusive domain of the FCC. To be sure, Oklahoma may, under current Commission rules, regulate such local aspects of cable systems as franchisee selection and construction oversight, see, e. g., Duplicative and Excessive Over
Quite apart from this generalized federal pre-emption of state regulation of cable signal carriage, the Oklahoma advertising ban plainly conflicts with specific federal regulations. These conflicts arise in three principal ways. First, the FCC's so-called "must-carry" rules require certain cable television operators to transmit the broadcast signals of any local television broadcasting station that is located within a specified 35-mile zone of the cable operator or that is "significantly viewed" in the community served by the operator. 47 CFR §§ 76.59(a)(1) and (6) (1983). These "must-carry" rules require many Oklahoma cable operators, including petitioners, to carry signals from broadcast stations located in nearby States such as Missouri and Kansas. See App. 22, 35. In addition, under Commission regulations, the local broadcast signals that cable operators are required to carry must be carried "in full, without deletion or alteration of any portion." 47 CFR § 76.55(b) (1983). Because, in the Commission's view, enforcement of these nondeletion rules serves
Second, current FCC rulings permit, and indeed encourage, cable television operators to import out-of-state television broadcast signals and retransmit those signals to their subscribers. See CATV Syndicated Program Exclusivity Rules, 79 F. C. C. 2d, at 745-746. For Oklahoma cable operators, this source of cable programming includes signals from television broadcasting stations located in Kansas, Missouri, and Texas, as well as the signals from so-called "superstations" in Atlanta and Chicago. App. 21, 35-36. It is undisputed that many of these distant broadcast signals retransmitted by petitioners contain wine commercials that are lawful under federal law and in the States where the programming originates. Nor is it disputed that cable operators who carry such signals are barred by Commission regulations from deleting or altering any portion of those signals, including commercial advertising. 47 CFR § 76.55(b) (1983). Under Oklahoma's advertising ban, however, these cable operators must either delete the wine commercials or face criminal prosecution. Since the Oklahoma law, by requiring deletion of a portion of these out-of-state signals, compels conduct that federal law forbids, the state ban clearly "stands as an obstacle to the accomplishment and execution of the full purposes and objectives" of the federal regulatory scheme. Hines v. Davidowitz, 312 U. S., at 67; Farmers Union v. WDAY, Inc., 360 U.S. 525, 535 (1959).
Petitioners generally receive such signals by antenna, microwave receiver, or satellite dish and restransmit them by wire to their subscribers. But, unlike local television broadcasting stations that transmit only one signal and receive notification from their networks concerning advertisements, cable operators simultaneously receive and channel to their subscribers a variety of signals from many sources without any advance notice about the timing or content of commercial advertisements carried on those signals. Cf. n. 2, supra. As the record of this case indicates, developing the capacity to monitor each signal and delete every wine commercial before it is retransmitted would be a prohibitively burdensome task. App. 25-26, 36-38. Indeed, the District Court specifically found that, in view of these considerations, "[t]here exists no feasible way for [cable operator] to block out the
Such a result is wholly at odds with the regulatory goals contemplated by the FCC. Consistent with its congressionally defined charter to "make available, so far as possible, to all the people of the United States a rapid, efficient, Nation-wide and world-wide wire and radio communication service. . .," 47 U. S. C. § 151, the FCC has sought to ensure that "the benefits of cable communications become a reality on a nationwide basis." Duplicative and Excessive Over-Regulation — CATV, 54 F. C. C. 2d, at 865. With that end in mind, the Commission has determined that only federal preemption of state and local regulation can assure cable systems the breathing space necessary to expand vigorously and provide a diverse range of program offerings to potential cable subscribers in all parts of the country. While that judgment may not enjoy universal support, it plainly represents a reasonable accommodation of the competing policies committed to the FCC's care, and we see no reason to disturb the agency's judgment. And, as we have repeatedly explained, when federal officials determine, as the FCC has here, that restrictive regulation of a particular area is not in the public interest, "States are not permitted to use their police power to enact such a regulation." Ray v. Atlantic Richfield Co., 435 U.S. 151, 178 (1978); Bethlehem Steel Co. v. New York State Labor Relations Board, 330 U.S. 767, 774
Although the FCC has taken the lead in formulating communications policy with respect to cable television, Congress has considered the impact of this new technology, and has, through the Copyright Revision Act of 1976, 90 Stat. 2541, 17 U. S. C. § 101 et seq., acted to facilitate the cable industry's ability to distribute broadcast programming on a national basis. Prior to the 1976 revision, the Court had determined that the retransmission of distant broadcast signals by cable systems did not subject cable operators to copyright infringement liability because such retransmissions were not "performances" within the meaning of the 1909 Copyright Act. Teleprompter Corp. v. Columbia Broadcasting System, Inc., 415 U.S. 394 (1974); Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968). In revising the Copyright Act, however, Congress concluded that cable operators should be required to pay royalties to the owners of copyrighted programs retransmitted by their systems on pain of liability for copyright infringement. At the same time, Congress recognized that "it would be impractical and unduly burdensome to require every cable system to negotiate [appropriate royalty payments] with every copyright owner" in order to secure consent for such retransmissions. Copyright Law Revision, H. R. Rep. No. 94-1476, p. 89 (1976).
In devising this system, Congress has clearly sought to further the important public purposes framed in the Copy-right Clause, U. S. Const., Art. I, § 8, cl. 8, of rewarding the creators of copyrighted works and of "promoting broad public availability of literature, music, and the other arts." Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975) (footnote omitted); Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 428-429 (1984). Compulsory licensing not only protects the commercial value of copyrighted
Respondent contends that even if the Oklahoma advertising ban is invalid under normal pre-emption analysis, the fact that the ban was adopted pursuant to the Twenty-first
The States enjoy broad power under § 2 of the Twenty-first Amendment to regulate the importation and use of intoxicating liquor within their borders. Ziffrin, Inc. v. Reeves, 308 U.S. 132 (1939). At the same time, our prior cases have made clear that the Amendment does not license the States to ignore their obligations under other provisions of the Constitution. See, e. g., Larkin v. Grendel's Den, Inc., 459 U.S. 116, 122, n. 5 (1982); California v. LaRue, 409 U.S. 109, 115 (1972); Wisconsin v. Constantineau, 400 U.S. 433, 436 (1971); Department of Revenue v. James B. Beam Distilling Co., 377 U.S. 341, 345-346 (1964). Indeed, "[t]his Court's decisions . . . have confirmed that the Amendment primarily created an exception to the normal operation of the Commerce Clause." Craig v. Boren, 429 U.S. 190, 206 (1976). Thus, as the Court explained in Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U.S. 324 (1964), § 2 reserves to the States power to impose burdens on interstate commerce in intoxicating liquor that, absent the Amendment, would clearly be invalid under the Commerce Clause. Id., at 330; State Board of Equalization v. Young's Market Co., 299 U.S. 59, 62-63 (1936). We have cautioned, however, that "[t]o draw a conclusion . . . that the Twenty-first Amendment has somehow operated to `repeal' the Commerce
In rejecting the claim that the Twenty-first Amendment ousted the Federal Government of all jurisdiction over interstate traffic in liquor, we have held that when a State has not attempted directly to regulate the sale or use of liquor within its borders — the core § 2 power — a conflicting exercise of federal authority may prevail. In Hostetter, for example, the Court found that in-state sales of intoxicating liquor intended to be used only in foreign countries could be made under the supervision of the Federal Bureau of Customs, despite contrary state law, because the state regulation was not aimed at preventing unlawful use of alcoholic beverages within the State, but rather was designed "totally to prevent transactions carried on under the aegis of a law passed by Congress in the exercise of its explicit power under the Constitution to regulate commerce with foreign nations." 377 U. S., at 333-334. Similarly, in Midcal Aluminum, supra, we found that "the Twenty-first Amendment provides no shelter for the violation of the Sherman Act caused by the State's wine pricing program," because the State's interest in promoting temperance through the program was not substantial and was therefore clearly outweighed by the important federal objectives of the Sherman Act. 445 U. S., at 113-114.
Of course, our decisions in Hostetter and Midcal Aluminum were concerned only with conflicting state and federal efforts to regulate transactions involving liquor. In this case, by contrast, we must resolve a clash between an express
There can be little doubt that the comprehensive regulations developed over the past 20 years by the FCC to govern signal carriage by cable television systems reflect an important and substantial federal interest. In crafting this regulatory scheme, the Commission has attempted to strike a balance between protecting noncable households from loss of regular television broadcasting service due to competition from cable systems and ensuring that the substantial benefits provided by cable of increased and diversified programming are secured for the maximum number of viewers. See, e. g., CATV Syndicated Program Exclusivity Rules, 79 F. C. C. 2d, at 744-746. To accomplish this regulatory goal, the Commission has deemed it necessary to assert exclusive jurisdiction over signal carriage by cable systems. In the Commission's view, uniform national communications policy with respect to cable systems would be undermined if state and local governments were permitted to regulate in piecemeal fashion the signals carried by cable operators pursuant to federal authority. See Community Cable TV, Inc., FCC 83-525, pp. 12-13 (released Nov. 15, 1983); Cable Television, 46 F. C. C. 2d, at 178.
On the other hand, application of Oklahoma's advertising ban to out-of-state signals carried by cable operators in that
When this limited interest is measured against the significant interference with the federal objective of ensuring widespread
We conclude that the application of Oklahoma's alcoholic beverage advertising ban to out-of-state signals carried by cable operators in that State is pre-empted by federal law and that the Twenty-first Amendment does not save the regulation from pre-emption. The judgment of the Court of Appeals is
"It shall be unlawful for any person, firm or corporation to advertise the sale of alcoholic beverage within the State of Oklahoma, except one sign at the retail outlet bearing the words `Retail Alcoholic Liquor Store.' " Art. XXVII, § 5.
The Oklahoma Alcoholic Beverage Control Act similarly prohibits advertising "any alcoholic beverages or the sale of same" except by on-premises signs which must conform to specified size limitations. Okla. Stat., Tit. 37, § 516 (1981).
"[W]e have consistently taken the position that to the degree we deem necessary, we will preempt areas of cable regulation in order to assure the orderly development of this new technology into the national communications structure. . . . The subject areas this agency has preempted include, of course, signal carriage, pay cable, leased channel regulations, technical standards, access, and several aspects of franchisee responsibility.. . . Non-federal officials have responsibility for the non-operational aspects of cable franchising including bonding agreements, maintenance of rights-of-way, franchisee selection and conditions of occupancy and construction." Duplicative and Excessive Over-Regulation — CATV, 54 F. C. C. 2d 855, 863 (1975).
"After considerable study of the emerging cable industry and its prospects for introducing new and innovative communications services, we have concluded that, at this time, there should be no regulation of rates for such services at all by any governmental level. Attempting to impose rate regulation on specialized services that have not yet developed would not only be premature but would in all likelihood have a chilling effect on the anticipated development." 46 F. C. C. 2d, at 199-200.
More recently, the Commission has noted that it "has deliberately preempted state regulation of non-basic program offerings, both non-broadcast programs and broadcast programs delivered to distant markets by satellite. While the nature of that non-basic offering was (and still is) developing, the preemptive intent, and the reasons for that preemption, are clear and discernible. Today, the degree of diversity in satellite-delivered program services reflects the wisdom of freeing cable systems from burdensome state and local regulation in this area." Community Cable TV, Inc., FCC 83-525, p. 13 (released Nov. 15, 1983).
"Subject to the provisions of clauses (2), (3), and (4) of this subsection, secondary transmissions to the public by a cable system of a primary transmission made by a broadcast station licensed by the Federal Communications Commission . . . and embodying a performance or display of a work shall be subject to compulsory licensing upon compliance with the requirements of subsection (d) where the carriage of the signals comprising the secondary transmission is permissible under the rules, regulations, or authorizations of the Federal Communications Commission." 17 U. S. C. § 111(c)(1).
"In general, the Committee believes that cable systems are commercial enterprises whose basic retransmission operations are based on the carriage of copyrighted program material and that copyright royalties should be paid by cable operators to the creators of such programs. The Committee recognizes, however, that it would be impractical and unduly burdensome to require every cable system to negotiate with every copyright owner whose work was retransmitted by a cable system. Accordingly, the Committee has determined to maintain the basic principle of the Senate bill to establish a compulsory copyright license for the retransmission of those over-the-air broadcast signals that a cable system is authorized to carry pursuant to the rules and regulations of the FCC." H. R. Rep. No. 94-1476, p. 89 (1976).
See also H. R. Conf. Rep. No. 94-1733, pp. 75-76 (1976); 122 Cong. Rec. 31979 (1976) (remarks of Rep. Kastenmeier); id., at 31984 (remarks of Rep. Railsback); id., at 32009 (remarks of Rep. Danielson); Eastern Microwave, Inc. v. Doubleday Sports, Inc., 691 F.2d 125, 132-133 (CA2 1982) (discussing Congress' decision to establish "a compulsory licensing program to insure that [cable systems] could continue bringing a diversity of broadcasted signals to their subscribers").