Bargains in the Information Marketplace: The Use of Government Subsidies to Regulate New Media

Several years ago, the D.C. Circuit upheld against a First Amendment challenge a law that required direct broadcast satellite (DBS) providers to set aside a portion of their capacity for noncommercial educational programming.1 The Court based its decision on an analogy between DBS—then a new information platform—and broadcasting, the regulation of which had long received reduced First Amendment scrutiny. In an opinion dissenting from the denial of a rehearing en banc, Judge Williams (writing for five judges) offered an intriguing insight.2 Williams wrote that if the law were constitutional, it would be so not because the government had greater leeway to regulate satellite broadcasting than newspaper publishing, but only as a “condition legitimately attached to a government grant.” Under this view, DBS licenses would be akin to government subsidies like cash grants or tax exemptions offered to encourage favored activities. As such, the government might condition its subsidy on the fulfillment of certain public interest obligations without contravening the First Amendment. This example suggests that the analogies that judges and policymakers use when confronted by new technologies may profoundly shape the emerging law of information platforms. Choosing the right analogy is important, of course, for assigning new platforms to established regulatory categories and thereby determining how the government should exercise its power. It