Respondent sued petitioners, the city of Los Angeles and its
Department of Water and Power (DWP), in Federal District Court,
alleging, inter alia,
a violation of its rights under the
First Amendment by reason of (1) the city's refusal to grant
respondent a cable television franchise on the ground that
respondent had failed to participate in an auction for a single
franchise in the area and (2) DWP's refusal to grant access to
poles or underground conduits used for power lines. The District
Court dismissed the complaint for failure to state a claim upon
which relief could be granted. The Court of Appeals reversed and
remanded for further proceedings.
The complaint should not have been dismissed. The
activities in which respondent allegedly seeks to engage plainly
implicate First Amendment interests. Through original programming
or by exercising editorial discretion over which stations or
programs to include in its repertoire, respondent seeks to
communicate messages on a wide variety of topics and in a wide
variety of formats. But where speech and conduct are joined in a
single course of action, the First Amendment values must be
balanced against competing societal interests. Thus, where the city
has made factual assertions to justify restrictions on cable
television franchising and these assertions are disputed by
respondent, there must be a fuller development of the disputed
factual issues before this Court will decide the legal issues.
Accordingly, the case will be remanded to the District Court so
that petitioners may file an answer and the material factual
disputes may be resolved. Pp. 476 U. S.
754 F.2d 1396, affirmed and remanded.
REHNQUIST, J., delivered the opinion for a unanimous Court.
BLACKMUN, J., filed a concurring opinion, in which MARSHALL and
O'CONNOR, JJ., joined, post,
p. 476 U. S.
Page 476 U. S. 490
JUSTICE REHNQUIST delivered the opinion of the Court.
Respondent Preferred Communications, Inc., sued petitioners City
of Los Angeles (City) and the Department of Water and Power (DWP)
in the United States District Court for the Central District of
California. The complaint alleged a violation of respondent's
rights under the First and Fourteenth Amendments, and under §§ 1
and 2 of the Sherman Act, by reason of the City's refusal to grant
respondent a cable television franchise and of DWP's refusal to
grant access to DWP's poles or underground conduits used for power
lines. The District Court dismissed the complaint for failure to
state a claim upon which relief could be granted. See
Fed.Rule Civ.Proc. 12(b)(6). The Court of Appeals for the Ninth
Circuit affirmed with respect to the Sherman Act, but reversed as
to the First Amendment claim. 754 F.2d 1396 (1985). We granted
certiorari with respect to the latter issue, 474 U.S. 979
Respondent's complaint against the City and DWP alleged,
the following facts: respondent asked Pacific
Telephone and Telegraph (PT&T) and DWP for permission to lease
space on their utility poles in order to provide cable television
service in the south central area of Los Angeles. App. 6a. These
utilities responded that they would not lease the space unless
respondent first obtained a cable television franchise from the
Respondent asked the City for a franchise, but
the City refused to grant it one, stating that respondent had
failed to participate in an auction that was to award a single
franchise in the area. Id.
at 6a-7a. [Footnote 1
Page 476 U. S. 491
The complaint further alleged that cable operators are First
Amendment speakers, id.
at 3a, that there is sufficient
excess physical capacity and economic demand in the south central
area of Los Angeles to accommodate more than one cable company,
at 4a, and that the City's auction process allowed it
to discriminate among franchise applicants based on which one it
deemed to be the "best." Id.
at 6a. Based on these and
other factual allegations, the complaint alleged that the City and
DWP had violated the Free Speech Clause of the First Amendment, as
made applicable to the States by the Fourteenth Amendment, §§ 1 and
2 of the Sherman Act,
Page 476 U. S. 492
the California Constitution, and certain provisions of state
The City did not deny that there was excess physical capacity to
accommodate more than one cable television system. But it argued
that the physical scarcity of available space on public utility
structures, the limits of economic demand for the cable medium, and
the practical and esthetic disruptive effect that installing and
maintaining a cable system has on the public right-of-way justified
its decision to restrict access to its facilities to a single cable
television company. 754 F.2d at 1401.
The District Court dismissed the free speech claim without leave
to amend for failure to state a claim upon which relief could be
Fed.Rule Civ.Proc. 12(b)(6). It also
dismissed the antitrust claims, reasoning that petitioners were
immune from antitrust liability under the state action doctrine of
Parker v. Brown, 317 U. S. 341
(1963). Finally, it declined to exercise pendent jurisdiction over
the remaining state claims.
The Court of Appeals for the Ninth Circuit affirmed in part and
reversed in part. 754 F.2d 1396 (1985). It upheld the conclusion
that petitioners were immune from liability under the federal
antitrust laws. Id.
at 1411-1415. But it reversed the
District Court's dismissal of the First Amendment claim, and
remanded for further proceedings. Id.
at 1401-1411. It
held that, taking the allegations in the complaint as true,
at 1399, the City violated the First Amendment by
refusing to issue a franchise to more than one cable television
company when there was sufficient excess physical and economic
capacity to accommodate more than one. Id.
1411. The Court of Appeals expressed the view that the facts
alleged in the complaint brought respondent into the ambit of cases
such as Miami Herald Publishing Co. v. Tornillo,
418 U. S. 241
(1974), rather than of cases such as Red Lion Broadcasting Co.
v. FCC, 395 U. S. 367
Page 476 U. S. 493
and Members of City Council v. Taxpayers for Vincent,
466 U. S. 789
(1984). 754 F.2d at 1403-1411.
We agree with the Court of Appeals that respondent's complaint
should not have been dismissed, and we therefore affirm the
judgment of that court; but we do so on a narrower ground than the
one taken by it. The well-pleaded facts in the complaint include
allegations of sufficient excess physical capacity and economic
demand for cable television operators in the area which respondent
sought to serve. [Footnote 2
The City, while admitting the existence of excess physical capacity
on the utility poles, the rights-of-way, and the like, justifies
the limit on franchises in terms of minimizing the demand that
cable systems make for the use of public property. The City
characterizes these uses as the stringing of "nearly 700 miles of
hanging and buried wire and other appliances necessary for the
operation of its system." Brief for Petitioners 12. The City also
characterizes them as "a permanent visual blight," ibid.,
and adds that the process of installation and repair of such a
system in effect subjects city facilities designed for other
purposes to a servitude which will cause traffic delays and hazards
and esthetic unsightliness. Respondent in its turn replies that the
City does not "provide anything more than speculations and
assumptions," and that the City's "legitimate concerns are easily
satisfied without the need to limit the right to speak to a single
speaker." Brief for Respondent 9.
We of course take the well-pleaded allegations of the complaint
as true for the purpose of a motion to dismiss, see, e.g.,
Kugler v. Helfant, 421 U. S. 117
421 U. S.
-126, n. 5 (1975). Ordinarily such a motion frames a
legal issue such as the one which the Court of Appeals undertook to
decide in this case.
Page 476 U. S. 494
But this case is different from a case between private litigants
for two reasons: first, it is an action of a municipal corporation
taken pursuant to a city ordinance that is challenged here, and,
second, the ordinance is challenged on colorable First Amendment
grounds. The City has adduced essentially factual arguments to
justify the restrictions on cable franchising imposed by its
ordinance, but the factual assertions of the City are disputed at
least in part by respondent. We are unwilling to decide the legal
questions posed by the parties without a more thoroughly developed
record of proceedings in which the parties have an opportunity to
prove those disputed factual assertions upon which they rely.
We do think that the activities in which respondent allegedly
seeks to engage plainly implicate First Amendment interests.
"The business of cable television, like that of newspapers and
magazines, is to provide its subscribers with a mixture of news,
information and entertainment. As do newspapers, cable television
companies use a portion of their available space to reprint (or
retransmit) the communications of others, while at the same time
providing some original content."
App. 3a. Thus, through original programming or by exercising
editorial discretion over which stations or programs to include in
its repertoire, respondent seeks to communicate messages on a wide
variety of topics and in a wide variety of formats. We recently
noted that cable operators exercise "a significant amount of
editorial discretion regarding what their programming will
include." FCC v. Midwest Video Corp., 440 U.
, 440 U. S. 707
(1979). Cable television partakes of some of the aspects of speech
and the communication of ideas as do the traditional enterprises of
newspaper and book publishers, public speakers, and pamphleteers.
Respondent's proposed activities would seem to implicate First
Amendment interests, as do the activities of wireless broadcasters,
which were found
Page 476 U. S. 495
to fall within the ambit of the First Amendment in Red Lion
Broadcasting Co. v. FCC, supra,
at 395 U. S. 386
even though the free speech aspects of the wireless broadcasters'
claim were found to be outweighed by the Government interests in
regulating by reason of the scarcity of available frequencies.
Of course, the conclusion that respondent's factual allegations
implicate protected speech does not end the inquiry. "Even
protected speech is not equally permissible in all places and at
all times." Cornelius v. NAACP Legal Defense & Educational
Fund, Inc., 473 U. S. 788
473 U. S. 799
(1985). Moreover, where speech and conduct are joined in a single
course of action, the First Amendment values must be balanced
against competing societal interests. See, e.g., Members of
City Council v. Taxpayers for Vincent, supra,
at 466 U. S.
-807; United States v. O'Brien, 391 U.
, 391 U. S.
-377 (1968). We do not think, however, that it is
desirable to express any more detailed views on the proper
resolution of the First Amendment question raised by respondent's
complaint and the City's responses to it without a fuller
development of the disputed issues in the case. We think that we
may know more than we know now about how the constitutional issues
should be resolved when we know more about the present uses of the
public utility poles and rights-of-way and how respondent proposes
to install and maintain its facilities on them.
The City claims that no such trial of the issues is required,
because the City need not "generate a legislative record" in
enacting ordinances which would grant one franchise for each area
of the City. Brief for Petitioners 44. "Whether a limitation on the
number of franchises . . . is reasonable,'" the City continues,
"thus cannot turn on a review of historical facts." Id. at
46. The City supports its contention in this regard by citation to
cases such as United States Railroad Retirement Board v.
Fritz, 449 U. S. 166,
449 U. S. 179
(1980), and Schweiker v. Wilson, 450 U.
S. 221, 450 U. S.
236-237 (1981). Brief for Petitioners 45, n.
Page 476 U. S. 496
The flaw in the City's argument is that both Fritz
involved Fifth Amendment equal protection
challenges to legislation, rather than challenges under the First
Amendment. Where a law is subjected to a colorable First Amendment
challenge, the rule of rationality which will sustain legislation
against other constitutional challenges typically does not have the
same controlling force. But cf. Ohralik v. Ohio State Bar
Assn., 436 U. S. 447
436 U. S. 459
(1978). This Court
"may not simply assume that the ordinance will always advance
the asserted state interests sufficiently to justify its abridgment
of expressive activity."
Taxpayers for Vincent,
466 U.S. at 466 U. S. 803
n. 22; Landmark Communications, Inc. v. Virginia,
435 U. S. 829
435 U. S.
We affirm the judgment of the Court of Appeals reversing the
dismissal of respondent's complaint by the District Court, and
remand the case to the District Court so that petitioners may file
an answer and the material factual disputes between the parties may
It is so ordered.
California authorizes municipalities to limit the number of
cable television operators in an area by means of a "franchise or
license" system, and to prescribe "rules and regulations" to
protect customers of such operators. See
Ann. § 53066 (West Supp.1986). Congress has recently endorsed such
franchise systems. See
Cable Communications Policy Act of
1984, Pub.L. 98-549, 98 Stat. 2779. Pursuant to the authority
granted by the State, the City has adopted a provision forbidding
the construction or operation of a cable television system within
city limits unless a franchise is first obtained. See
Angeles, Cal., Admin.Code, Art. 13, § 13.62(a) (1979). A city
ordinance provides that franchises are to be allotted by auction to
the bidder offering "the highest percentage of gross annual
receipts" derived from the franchise and "such other compensation
or consideration . . . as may be prescribed by the Council in the
advertisement for bids and notice of sale." See
Angeles Ordinance 58,200, § 5.2 (1927).
In October, 1982, the City published an advertisement soliciting
bids for a cable television franchise in the south central area of
Los Angeles. The advertisement indicated that only one franchise
would be awarded, and it established a deadline for the submission
of bids. App. 91a. It also set forth certain nonfinancial criteria
to be considered in the selection process, including the degree of
local participation in management or ownership reflecting the
ethnic and economic diversity of the franchise area, the capacity
to provide 52 channels and two-way communication, the willingness
to set aside channels for various public purposes and to provide
public access facilities, the willingness to develop other services
in the public interest, the criminal and civil enforcement record
of the company and its principals, the degree of business
experience in cable television or other activities, and the
willingness to engage in creative and aggressive affirmative
at 98a, 101a-102a, 105a, 108a-109a. Respondent
did not submit a bid in response to this solicitation, and the
franchise was eventually awarded to another cable operator.
They also include allegations that the City imposes numerous
other conditions upon a successful applicant for a franchise. It is
claimed that, entirely apart from the limitation of franchises to
one in each area, these conditions violate respondent's First
Amendment rights. The Court of Appeals did not reach these
contentions, and neither do we.
JUSTICE BLACKMUN, with whom JUSTICE MARSHALL and JUSTICE
O'CONNOR join, concurring.
I join the Court's opinion on the understanding that it leaves
open the question of the proper standard for judging First
Amendment challenges to a municipality's restriction of access to
cable facilities. Different communications media are treated
differently for First Amendment purposes. Compare, e.g., Miami
Herald Publishing Co. v. Tornillo, 418 U.
(1974), with FCC v. League of Women Voters of
California, 468 U. S. 364
468 U. S. 380
(1984). In assessing First Amendment claims concerning cable
access, the Court must determine whether the characteristics of
cable television make it sufficiently analogous to another medium
to warrant application of an already existing standard or whether
those characteristics require a new analysis. As this case arises
out of a motion to dismiss, we lack factual information about the
nature of cable television. Recognizing these considerations,
Page 476 U. S. 497
at 476 U. S.
-494, the Court does not attempt to choose or justify
any particular standard. It simply concludes that, in challenging
Los Angeles' policy of exclusivity in cable franchising, respondent
alleges a cognizable First Amendment claim.