American Scholastic TV Programming Foundation v. F.C.C.
| Decision Date | 05 June 1995 |
| Docket Number | Nos. 93-1652,s. 93-1652 |
| Citation | 46 F.3d 1173 |
| Parties | , 97 Ed. Law Rep. 637 AMERICAN SCHOLASTIC TV PROGRAMMING FOUNDATION, et al., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION, Respondent. School Board of Roanoke County; BellSouth Telecommunications, Inc.; GTE Service Corporation, Intervenors. to 93-1654. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Petition for Review of an Order of the Federal Communications Commission.
Charles Cervantes, Washington, DC, argued the cause for petitioners. With him on the briefs was Adrian Cronauer, Washington, DC.
Joel Marcus, Counsel, F.C.C., Washington, DC, argued cause, for respondent. With him on the brief were William E. Kennard, Gen. Counsel, and Daniel McM. Armstrong, Associate Gen. Counsel, F.C.C., Washington, DC.
William D. Freedman, Washington, DC, argued the cause for intervenors. With him on the joint brief was Gail L. Polivy, Washington, DC. Colleen M. Egan, Washington, DC, entered an appearance for intervenors School Bd. of Roanoke County, et al.
Matthew R. Sutherland, Atlanta, GA, entered an appearance for intervenor BellSouth Telecommunications, Inc.
Before EDWARDS, Chief Judge, WALD and SENTELLE, Circuit Judges.
Opinion for the Court filed by Circuit Judge WALD.
On August 30, 1993, the Federal Communications Commission ("FCC" or "Commission") granted three school boards affiliated with a local telephone company licenses to provide wireless cable service on the Instructional Television Fixed Service ("ITFS") spectrum. These licenses were mutually exclusive with applications made by petitioners, three nonprofit educational organizations, who challenge the grant of these licenses to the school boards on several grounds. We conclude that (1) petitioners waived their challenge to the FCC's rule that wireless cable is not a "cable system" within the meaning of the Cable Communications Policy Act of 1984, Pub.L. No. 98-549, 98 Stat. 2779 (1984) ("Cable Act" or "Act"), by failing to raise it before the agency, (2) the Commission's interpretation, that Sec. 533(b) of the Cable Act, prohibiting telephone companies from providing video programming in their local services area, prohibits only the provision of video programming over a cable system, is a reasonable one, and (3) the FCC's conclusion that the school boards gave adequate assurances of funding is supported by the record and not arbitrary or capricious. Accordingly, we deny the petition for review.
Congress enacted the Cable Act in 1984 to "establish a national policy concerning cable communications." 47 U.S.C. Sec. 521(1) (1988). See also American Civil Liberties Union v. FCC, 823 F.2d 1554, 1557-60 (D.C.Cir.1987) (), cert. denied, 485 U.S. 959, 108 S.Ct. 1220, 99 L.Ed.2d 421 (1988). The Act establishes a framework for state and local regulation of cable fees, rates, and service, mandates privacy and consumer protection safeguards for cable systems, and imposes a series of media cross-ownership restrictions. Among these cross-ownership restrictions is Sec. 533(b)(1), which prohibits a telephone company from providing "video programming" within its service area.
Wireless cable operates by transmitting television signals over the microwave bands. Because it broadcasts on the microwave band, it is only accessible to users equipped with specialized antennas and converters. Since the general public lacks this equipment, wireless cable, like cable, offers a private, multi-channel distribution network. Wireless cable, however, operates without any cable or other physical connection between the operator and the viewer.
In a 1990 order, the FCC concluded that a "cable system" as used in the Cable Act "encompasses only video delivery systems that employ cable, wire, or other physically closed or shielded transmission paths ... outside individual buildings," and thus does not include wireless cable or a range of other technologies. In the Matter of Definition of a Cable Television System, 5 F.C.C.R. 7638, 7638 (1990).
The FCC reserves certain segments of the wireless cable microwave band for Instructional Television Fixed Service stations. ITFS stations are authorized to provide "educational, instructional, and cultural material" to students enrolled for credit, for use in training programs, for administrative activities, or in connection with other educational television systems. See 47 C.F.R. Sec. 74.931(a)-(d) (1993).
In order to make ITFS commercially viable, the FCC allows the instructional stations to lease excess capacity to commercial stations. These leasing arrangements are subject to several restrictions, including, for instance, the requirement that the station air at least twelve hours per week of actual ITFS programming during the first two years of operation, and twenty hours thereafter. See id. Sec. 74.931(e).
With certain limited exceptions not relevant here, only accredited educational institutions and nonprofit organizations with educational purposes are eligible for ITFS licenses. See 47 C.F.R. Sec. 74.932 (1993). Where more than one eligible institution applies for a mutually exclusive license, the FCC chooses among them based on a point system, which awards points to applicants if they are, among other things, physically located in the community or an accredited school. The applicant with the highest number of points is awarded the license. See 47 C.F.R. Sec. 74.913 (1993).
This case involves competing applications for three ITFS licenses in the Roanoke, Virginia area. In November, 1991, each of three nonprofit educational organizations applied for one of the licenses. Shortly thereafter, three local school boards in affiliation with Botetourt Communications, Inc. ("BCI"), the parent company of a local exchange telephone service provider, applied for the same licenses. In each case, because the school board affiliated with BCI was local and an accredited educational institution, whereas the nonprofit organization was neither, the school board received a greater number of points.
In connection with their applications, the nonprofit organizations--the American Scholastic TV Programming Foundation, the American Foundation for Instructional Television, and the Excellence in Education Network (collectively, "ASTV")--petitioned the FCC to deny the licenses to the school boards on two grounds: first, that the award of an ITFS license to entities affiliated with a local telephone company violates Sec. 533(b) of the Cable Act, which prohibits telephone companies from providing video programming in their local service areas; and second, that the school boards failed to meet the FCC's requirement of establishing "reasonable assurances of funding." The FCC rejected ASTV's petitions to deny and awarded the licenses to the school boards. See In re Applications of Botetourt County School Board, American Foundation for Instructional Television, 8 F.C.C.R. 6265 (1993); In re Applications of Excellence in Education Network, Salem City School Board, 8 F.C.C.R. 6269 (1993); In re Applications of School Board of Roanoke County, American Scholastic TV Programming Foundation, 8 F.C.C.R. 6273 (1993). 1 We affirm.
Section 533(b)(1) of the Cable Act provides that:
It shall be unlawful for any common carrier ... to provide video programming directly to subscribers in its telephone service area, either directly or indirectly through an affiliate owned by, operated by, controlled by, or under common control with the common carrier.
The Cable Act defines "video programming" as "programming provided by, or generally considered comparable to programming provided by, a television broadcast station." 47 U.S.C. Sec. 522(19) (Supp. V 1993).
The Commission ruled that Sec. 533's prohibition does not extend to video programming via wireless cable, and thus does not prevent the grant of licenses to the school boards affiliated with BCI, a telephone company parent. The Commission reasoned that, though the terms of Sec. 533(b) suggest no limitation on the type of video programming prohibited, the structure of the statute as a whole and its legislative history indicate that Congress meant only to prohibit "video programming" over a cable system. The Commission relied primarily on Sec. 533(b)'s placement within the Cable Act, the general purpose of which is " 'to establish a national policy concerning cable communications.' " Botetourt County School Board, 8 F.C.C.R. at 6266 (quoting 47 U.S.C. Sec. 521(1)), to conclude that Sec. 533(b) was concerned solely with the provision of video programming over cable systems. It drew support for this interpretation from the legislative history of the Cable Act, which explains that " '[i]t is the intent of section [533(b) ] to codify current FCC rules concerning the provision of video programming over cable systems by common carriers.' " Id. at 6267 (quoting H.R.REP. NO. 934, 98th Cong., 2d Sess. 56 (1984), reprinted in 1984 U.S.C.C.A.N. 4655, 4693 (emphasis added)). It concluded that the intent behind the definition and use of the term "video programming" in the Act was to describe one type of cable service, rather than to encompass video programming by all means of transmission. The Act's definition of video programming, it reasoned, ...
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