The U.S. Supreme Court gave finality to a major victory for free speech advocates by denying a petition for certiorari from a Tenth Circuit decision in U.S. West, Inc. v. FCC, 182 F.3d 1224 (10th Cir. 1999), cert. denied sub nom. Competition Policy Institute v. U.S. West, Inc., 120 S. Ct. 2215 (2000). The U.S. West decision illustrates the generally protective approach of recent federal court decisions to commercial speech. The opinion invalidated, on First Amendment grounds, Federal Communications Commission regulations restricting the use and disclosure of, and access to, customer proprietary network information (CPNI).

    The FCC promulgated these regulations to implement a section of the Telecommunications Act of 1996 requiring telecommunications carriers to protect the confidentiality of CPNI. In essence, the regulations permitted telecommunications carriers to use, disclose, or share CPNI "for the purpose of marketing products within a category of service" that the customer already subscribed to. Id. at 1230. However, the regulations prohibited carriers from disclosing or permitting access to CPNI for the purpose of marketing to the customer categories of service to which the customer did not already subscribe, unless the customer had approved of such disclosure.

    The U.S. Court of Appeals for the Tenth Circuit rejected the government’s argument that these regulations did not restrict speech because they prohibited carriers from using CPNI to target customers but allowed carriers to communicate with their customers. The court stated that "[e]ffective speech has two components: a speaker and an audience. A restriction on either of these components is a restriction on speech." Id. at 1232. The court next determined that the regulations restricted truthful, nonmisleading commercial speech.

    In determining whether the restriction violated the First Amendment, the court applied the test established by the Supreme Court in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980). The court assumed -- with some reservations -- that the government’s interest in protecting consumer privacy was substantial. It declined, however, to find the government’s interest -- standing alone -- in promoting competition substantial because the specific statutory section at issue was not a competition section, but rather a privacy section.

    The court then found that the regulation did not materially and directly advance the government’s interests because the government had failed to present any evidence that the asserted harms of disclosure were real. The court did consider whether the regulations were narrowly tailored, assuming, arguendo, that the regulations directly advanced the government’s substantial interests. It determined that they were not narrowly tailored because the government had failed to demonstrate that a less restrictive method of protecting privacy would have been ineffective.