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FCC v. Beach Communications, Inc.| 508 U.S. 307 (1993)
When a federal statute or regulation is challenged on equal protection grounds, it faces a different level of scrutiny depending on the rights it affects. If a fundamental right is implicated, or the law differentiates based on a suspect classification like race or religion, courts apply strict scrutiny. In other cases, courts use a more deferential standard known as rational-basis review, as the United States Supreme Court explained in Federal Communications Commission versus Beach Communications.
Congress enacted the Cable Act to establish a national policy for regulating cable television systems. Under the act, cable systems serving multiple buildings under separate ownership or management were required to obtain a local government franchise to operate. Cable systems serving multiple buildings under common ownership were exempted from the franchise requirement, as long as they didn’t use a public right-of-way.
Beach Communications operated a satellite television system serving customers in buildings under separate ownership. When the Federal Communications Commission updated its interpretation of the Cable Act, subjecting Beach to the franchise requirement, Beach petitioned the District of Columbia Circuit for review of the new rule. Beach argued that the distinction based on building ownership was arbitrary and violated the Equal Protection Clause. The D. C. Circuit agreed that the rule lacked any rational basis and invalidated the franchise requirement. The United States Supreme Court granted cert.
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