Midwest Video Corp. v. F. C. C.
| Decision Date | 21 February 1978 |
| Docket Number | Nos. 76-1496 and 76-1839,s. 76-1496 and 76-1839 |
| Court | U.S. Court of Appeals — Eighth Circuit |
| Parties | 3 Media L. Rep. 1817 MIDWEST VIDEO CORPORATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, American Broadcasting Companies, Inc., et al., Intervenors. AMERICAN CIVIL LIBERTIES UNION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, American Broadcasting Companies, Inc., et al., Intervenors. |
George H. Shapiro, Washington, D. C., for petitioner, Midwest Video Corp.; Wayne W. Owen and Harry E. McDermott, Jr., Moses, McClellan, Arnold, Owen & McDermott, Little Rock, Ark., and Harry M. Plotkin and Mary Candace Fowler, Arent, Fox, Kintner, Plotkin, Kahn, Washington, D. C., on brief.
Michael Botein, Rutgers Law School, Newark, N. J., for petitioner, American Civil Liberties Union; Joel M. Gora, American Civil Liberties Union, New York City, on brief.
Julian R. Rush, Jr., Counsel, F. C. C., Washington, D. C., for respondent, F. C. C.
James F. Ponsoldt, Atty., Dept. of Justice, Washington, D. C., for respondent, United States.
John H. Shenefield, Acting Asst. Atty. Gen., Carl D. Lawson and James F. Ponsoldt, Attys., Dept. of Justice, Washington, D. C., and Werner K. Hartenberger, Gen. Counsel, Daniel M. Armstrong, Associate Gen. Counsel, and Julian R. Rush, Jr., Counsel, F. C. C., Washington, D. C., on brief for respondents.
Charles M. Firestone, Citizens Communications Center, Washington, D. C., for intervenors, Natl. Black Media Coalition, et al.; Susan Dillon, Legal Intern, and Christopher Ma, Legal Intern, on brief.
John H. Midlen and Dennis F. Begley of Midlen & Reddy, Washington, D. C., on brief for intervenors, Coldwater Cablevision Inc. and Michigan CA-TV Co.
Stuart F. Feldstein, Frederick W. Finn and Arthur H. Harding, National Cable Television Assn., Inc., Washington, D. C., on brief amicus curiae for National Cable Television Assn., Inc. Barry P. Simon, Teleprompter Corp., New York City, and Jay E. Ricks, Robert R. Bruce and Gardner F. Gillespie, Washington, D. C., on brief for Teleprompter Corp., amicus curiae in support of petitioner, Midwest Video Corp.
Before STEPHENSON and WEBSTER, Circuit Judges, and MARKEY, Chief Judge. *
Petitioners, Midwest Video Corporation (Midwest) and the American Civil Liberties Union (ACLU), seek review of the Federal Communications Commission's (Commission's) Report and Order in Docket No. 20508, 59 F.C.C.2d 294 (released May 13, 1976), reconsideration denied, 62 F.C.C.2d 399 (released December 21, 1976) (1976 Report ) 1 imposing mandatory access and channel capacity requirements upon certain cable television systems. 2
Midwest challenges the regulations as (1) inadequately supported by the record, (2) beyond the jurisdiction of the Commission, (3) violative of the free speech clause of the First Amendment, and (4) violative of the due process clause of the Fifth Amendment.
ACLU does not challenge the Commission's jurisdiction to issue the 1976 Report regulations, but objects to the softening modifications made to the 1972 Cable Report access rules, 3 alleging that the modifications (a) lack rational basis in their failure to consider interests of access program producers, (b) violate the Commission's mandate to regulate cable television as a common carrier, and (c) do not fully achieve general First Amendment goals. 4
We grant the petition for review and set aside the order because it exceeds the jurisdiction of the Commission.
As the cable television industry sought to develop over the past twenty-five years, the Commission's effort to regulate it has led to numerous Commission proceedings, voluminous litigation, and substantial literature. 5
A cable system is composed of an antenna, to pick up local and distant broadcast signals, and cables for transmitting those signals to the home television sets of the system's paying subscribers. Some systems Having decided to preserve the "national television service" as it existed in 1952, Sixth Report and Order on Rules Governing Television Broadcast Stations, 17 Fed.Reg. 3905 (1952), the Commission initially ignored cable television, considering it no threat to broadcasting or to its regulatory domain. On receipt of broadcaster complaints in 1958, the Commission ruled that cable systems were not common carriers and refused to regulate them. Frontier Broadcasting Co., 24 F.C.C. 251, 253-54 (1968), aff'd, Report and Order on Inquiry Into the Impact of Community Antenna Systems, Television Translators, Television "Satellite" Stations, and Television "Repeaters" on the Orderly Development of Television Broadcasting, 26 F.C.C. 403, 441 (1959). The Commission's position that cable systems were not engaged in common carrier operations was upheld in WSTV, Inc., 23 Rad.Reg. P 184 (1962) and in Philadelphia Television Broadcasting Co. v. FCC, 123 U.S.App.D.C. 298, 300, 359 F.2d 282, 284 (1966). In all this, the Commission decided that it had no jurisdiction over cable television as common carriers under Title II of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151 et seq. (1970) (Act), or as broadcasters under Title III of the Act, and that it had no plenary power to regulate an industry just because that industry may have an impact on broadcasting, over which it did have jurisdiction. 7
have employed the services of microwave companies for long distances between their antennae. The cable system may also transmit its own programs, i. e., "cablecast," through its cables to its subscribers. For technical reasons, most cable systems began with 12 channels. 6
Becoming persuaded, and announcing with admirable candor, that cable systems might represent a competitive threat to its regulatees in television broadcasting, the Commission decided to assert jurisdiction. 8 The Commission's approach to Congress for appropriate statutory authority was frustrated. To date, the Congress has refrained from exercising its legislative authority to provide that the Commission shall or shall not regulate cable systems, and, if they shall, in what manner and to what purpose and extent. The subject of cable regulations has thus been left substantially entirely to the Commission and the Courts. 9
Proceeding on its own, the Commission has attempted not just to keep pace, but to anticipate the course of communications advances, facing the virtually impossible task of outrunning our modern technological juggernaut. Beginning with indirect regulation through its jurisdiction over microwave companies used by some cable systems, and exhibiting an apparent hostility toward letting cable grow as its own ingenuity and consumer acceptance may have dictated, the Commission imposed an extended "freeze" on cable's growth, see Wentronics, Inc. v. FCC, 118 U.S.App.D.C. 36, 331 F.2d 782 (1964).
The Commission has since attempted to frame a place for cable television while preserving broadcast television intact. The effort has resulted in the establishment of a Cable Television Bureau under the Commission, and 60 pages of cable regulations at 47 C.F.R. §§ 76.1-78.115 (1976). 10 As a substitute for the license it is statutorily empowered to grant or refuse to broadcasters, the Commission issues a "Certificate of Compliance," for cable operators. 47 C.F.R. § 76.11. It sets for state and local franchising authorities the conditions they may impose on cable enterprises seeking a franchise to string cable underground or on poles. 47 C.F.R. § 76.31. It requires cable operators to submit forms and reports. 47 C.F.R. §§ 76.401-411.
Much of the Commission's cable-regulating has involved the planting of new and dramatic seeds of regulation, based on soaring, euphoric predictions (some from cable owners) of great things to come from cable television, seeds which had to be plowed under, when germination failed in the bright sunlight of commercial, economic, and technological reality. 11
The Commission's jurisdiction over cable retransmission of distant (Los Angeles) broadcast television signals into a local (San Diego) broadcast station's "contour" was upheld as "reasonably ancillary" to its regulatory responsibilities for broadcast television in United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968). In the following year, the Commission adopted a "mandatory origination" rule, requiring cable systems with over 3499 subscribers to originate some programs of their own. First Report and Order in Docket No. 18397, 20 F.C.C. 201, 202-04 (1969). This court set that rule aside as beyond the Commission's jurisdiction. Midwest Video Corp. v. United States, 441 F.2d 1322 (8th Cir. 1971). In a split decision, the Supreme Court reversed, sustaining the mandatory origination rule as also "reasonably ancillary" to the Commission's responsibilities for broadcast television. United States v. Midwest Video Corp., 406 U.S. 649, 92 S.Ct. 1860, 32 L.Ed.2d 390 (1972). 12
Having carried the fight to victory in the Supreme Court, the Commission never enforced In 1974, the Commission formally rescinded the mandatory origination rule, 39 Fed.Reg. 43302, and simultaneously issued rules on equipment availability, Report and Order in Docket No. 19988, 49 F.C.C.2d 1090 (1974), requiring cable systems with over 3499 subscribers to purchase, and make available to the public, equipment for producing local programs and cable time for their presentation. Midwest petitioned this court for review but withdrew its petition as moot in view of the challenge here to the 1976 Report, which merged the equipment availability and mandatory access rules. Midwest Video Corp. v. FCC, No. 75-1671, dismissed on petitioner's motion (8th Cir. April 12, 1976).
its mandatory origination rule. 13 Instead, it conducted new proceedings, leading to the 1972 Cable Report, imposing "mandatory access"
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