FCC Deadlock Blocks Liquor Ad Restrictions; New Commissioners Could Take Up Fight

By Daniel E. Troy

The assault on distilled spirits advertising, although temporarily stalled at the Federal Communications Commission, shows no sign of abating. In fact, with a solid Democratic majority expected to be in place by the end of the year, the Commission’s efforts to restrict alcohol advertising may soon be stepped up.

However, the FCC’s proposals to restrict the advertising of distilled spirits on television are not only unconstitutional but portend dramatic limitations on other kinds of advertising as well. The proposals were outlined in a draft “notice of inquiry” (NOI) prepared at the direction of FCC Chairman Reed Hundt.

On July 9, the Commission deadlocked over whether it should adopt the NOI and thus explore various ways to restrict spirits ads. Chairman Hundt and Commissioner Susan Ness voted in favor of opening an inquiry; commissioners James Quello and Rachelle Chong voted against.

Commissioners Quello and Chong argued that the Federal Trade Commission was the appropriate agency to handle such matters and, indeed, had already initiated investigations of television commercials of Seagram Co. and Stroh Brewery Co.

But the debate is far from over. Three of four current commissioners soon will be vacating their posts. Commissioner Ness, a Democrat, is the only commissioner scheduled to remain in office.

President Clinton has nominated FCC General Counsel William Kennard and Gloria Tristani to fill the Democratic seats, and Michael Powell and Harold Furchtgott-Roth to fill the Republican seats. If President Clinton’s nominations are confirmed this fall, Democrats would hold a solid, working majority.

A Democratic majority heading the FCC could well result in the adoption of a notice of inquiry in substantially the same form as the rejected one. If an NOI were adopted, the FCC would be one step closer to treading on the distilled spirits industry’s First Amendment rights.

The notice of inquiry just voted down included several possible measures to restrict distilled spirits advertising:

• an outright ban;
• the restricting of spirits advertising to certain time periods;
• counter-advertisements warning of the legal and health risks of alcohol consumption;
• the use of V-chip technology to allow such ads to be blocked; and
• congressional legislation.

Each of these, in its own way, poses a threat to First Amendment freedoms under the Central Hudson test that the Supreme Court currently uses to assess restrictions on speech.

First, there is no question that, as truthful messages about lawful products, television and radio commercials for distilled spirits are protected commercial speech.

Second, although the government plainly has a substantial interest in limiting underage consumption of alcohol, the FCC would be hard pressed to state a rational interest that distinguished between beer and wine on the one hand, and distilled spirits on the other.

As many government agencies and public health groups such as Mothers Against Drunk Driving have stated, alcohol is alcohol is alcohol. Given that a typical drink of spirits contains the same alcohol content as a beer or glass of wine, any attempt to discriminate against spirits ads only would be unconstitutionally irrational and discriminatory.

Third, the government would have a difficult—if not impossible—time showing that a restriction on alcohol advertising would reduce underage alcohol consumption. The evidence shows that parents and peers, rather than advertising, are the primary determinants of underage alcohol consumption.

For example, according to a national survey by the Roper Starch organization, most young people cited their parents as the primary influence on deciding whether or not to drink. A significant number cited their peers. Four percent cited advertisements.

The government’s own data support this conclusion. A 1990 Department of Health and Human Services report stated that research did not show a strong relationship between alcohol advertising and alcohol consumption. In 1985, the FTC rejected the Center for Science in the Public Interest’s petition seeking an industry-wide investigation of all alcohol advertising. The FTC found “no reliable basis on which to conclude that alcohol advertising significantly affects alcohol abuse.”

Even if the government were able to prove efficacy, it could not show that any of the proposed restrictions constitutes a sufficiently narrowly tailored response. Every state in the country prohibits the sale of alcohol beverages to persons under 21. Better enforcement of these laws would advance the government’s objective without infringing on any commercial speech rights of the liquor industry.

The FCC could also defer to the FTC’s mandate in pursuing enforcement actions against unfair or deceptive advertisers. Government could also, before it restricted speech, raise taxes on liquor, limit per capita purchases, or launch educational campaigns.

All advertisers have cause for concern about the FCC’s effort. A V-chip for advertisements, once established for one product category, could easily be extended to others. Such a mechanism would be the ultimate “zapper,” and could lead to the end of free over-the-air television as we know it.

Moreover, the arguments advanced against spirits are easily transferable to other categories of products that can be harmful if abused, or which may not lawfully be used by children. Beepers, knives, and cars come particularly to mind in the second category.

Given the Supreme Court’s many recent pro-commercial speech decisions, one might have reasonably expected that the government would tread warily before restricting advertising. Sadly, however, the Clinton Administration seems to be more, not less, inclined these days to attack advertising, always invoking children as the pretext for censorship.

Assuming the FCC behaves as many expect, the courts may soon be entertaining yet another First Amendment challenge to a governmental restriction on advertising.

Central Hudson Gas & Elec. Corp. v. Public Serv. Comm’n of N.Y., 447 U.S. 557 (1980).