Associated Press v. FCC

Decision Date22 September 1971
Docket NumberNo. 22860.,22860.
Citation452 F.2d 1290,146 US App. DC 361
PartiesThe ASSOCIATED PRESS, Petitioner, v. The FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, American Telephone and Telegraph Co., Intervenor.
CourtU.S. Court of Appeals — District of Columbia Circuit

COPYRIGHT MATERIAL OMITTED

Mr. Donald C. Beelar, Washington, D. C., with whom Messrs. Aloysius B. McCabe and John L. Bartlett, Washington, D. C., were on the brief, for petitioner.

Mr. Edward J. Kuhlmann, Counsel, Federal Communications Commission, with whom Messrs. Henry Geller, General Counsel at the time the brief was filed, John H. Conlin, Associate General Counsel, Federal Communications Commission, and Howard E. Shapiro, Attorney, Department of Justice, were on the brief, for respondents. Mrs. Lenore G. Ehrig, Counsel, Federal Communications Commission, also entered an appearance for respondents.

Mr. Hugh B. Cox, Washington, D. C., with whom Mr. Michael Boudin, Washington, D. C., was on the brief, for intervenor.

Before TAMM, ROBINSON and ROBB, Circuit Judges.

SPOTTSWOOD W. ROBINSON, III, Circuit Judge:

The Associated Press (AP), our petitioner, challenges a memorandum opinion and order of the Federal Communications Commission dismissing AP's complaint against the American Telephone and Telegraph Company (AT&T), the intervenor,1 by which AP sought reparations for and other relief from alleged overcharges on seven interstate private line teletypewriter channels leased fulltime for the transmission of news information.2 The questions on our review,3 as before the Commission, relate to the proper construction and the legality of AT&T's tariffs setting special press rates for the provision of that service. We uphold the interpretation which the Commission gave the tariffs and its ruling sustaining the lawfulness of the rates.

I

AT&T has for many years marketed private line service in teletypewriter and other forms of communication.4 Service of that type, by the Commission's definition, equips subscribers "with the means of continuous communication without the necessity for the carrier to establish connections for each individual call or message."5 Prior to 1963, press users disseminating news shared with all other commercial users the same rates for intercity private line teletypewriter channels, and those rates varied with distance and length and hour of use.6 Part-time service drew a lower rate than full-time, and off-peak service was ratably less expensive than service during peak hours.7 The full-period rate was $1.45.8

In 1956, the Commission launched an extensive investigation — known as the Private Line Case9 — into private line services generally.10 An initial decision in 196111 and a final decision in 196312 effected drastic changes in the structure and level of rates therefor. The Commission found that the then existing rates for private line telephone and telegraph — including teletypewriter — service did not provide an adequate margin of return, and that the differentials between full- and part-time use and between off-peak and peak-hour use were not justified by the costs of supplying the service.13 To eliminate those ills, the Commission devised several cures. Higher earnings level for intercity teletypewriter channels were specified.14 Lower charges for part-time and off-peak channels were scrapped.15 A single flat rate — $1.10 per mile per month — for full-period channels was set.16

The Commission's action drew a strong protest from press users. After the initial decision, two groups17 petitioned for reconsideration, alleging that the greater cost of private line teletypewriter service which the new pattern occasioned would impair the distribution of news information.18 Both petitioners requested retention of the old rates, in lieu of the new, for press users.19 On reconsideration, the Commission resolved to embark upon a separate investigation to ascertain whether the new rate would inhibit the dissemination of news.20 The Commission inaugurated the new flat rate for non-press users but continued in force, pending completion of the investigation, the existing variable rates for private line teletypewriter service furnished press users.21

So it was that in May, 1963, the press rate investigation got under way22 and on August 1, 1963, AT&T's new tariffs went into effect. Conformably with the Commission's decision, the new rate scheme excluded press service. In Tariff No. 134, the term "press," as a separate classification, was defined, and in Tariff No. 208 two sets of rates for intercity private line teletypewriter channels were established. One, for "Other Than Press," was the new flat full-period rate; the other, for "Press," was the preexisting group of variable rates. Later, these and other tariffs were consolidated into and superseded by Tariff No. 260, effective April 17, 1966. The parties are agreed that neither the new omnibus tariff nor any revision of it or its predecessors made any substantive change relevant to this case.23

II

The series of events generating this litigation began in October, 1964, when AP applied to AT&T for a lease of 175 intercity private line teletypewriter channels for the carriage of news information. AP sought press rates for 160 of the channels destined for part-time use, and other-than-press rates for the remaining 15, for which full-period use was contemplated. AT&T informed AP that in light of its representation that all channels would transmit news, the press rate was a tariff requirement.

AP responded with an informal complaint24 to the Commission asserting a privilege to choose other-than-press rates for press channels when cheaper, and urging that AT&T had misinterpreted the tariffs in reaching the opposite conclusion. By a letter ruling, the Commission sustained AT&T's construction of the tariffs. AP then filed a petition for reconsideration25 maintaining its earlier position, and later a formal complaint26 against AT&T in which its thesis was somewhat broadened. The refusal to allow other-than-press rates for channels devoted to full-time press use, it said, was a misinterpretation of the tariffs; alternatively, it argued that application of press rates for full-time channel use, though for news transmission, was unreasonable and unduly discriminatory to the extent that press rates exceeded other-than-press rates.27 AP requested reparations, based on the excess, for alleged overcharges on seven circuits,28 and related declaratory and injunctive relief.29

AT&T filed an answer contesting AP's claims30 and a motion for judgment. The parties agreeing that no resolution of disputed facts was prerequisite, the Commission ruled without an evidentiary hearing. It deemed AP's interpretation of the tariffs to be in contravention of their language;31 the tariffs, it said, established separate rate classifications for press and non-press uses,32 and conferred upon the customer no option to choose between classifications and none to the carrier to allow other-than-press rates for channels devoted to press purposes.33 While recognizing that in a few instances costs of parts of the service were higher under the press rates than under the non-press rates,34 the Commission rejected the discrimination charge on the ground that the continuation of the pre-1963 rates for press users benefited them by a preponderance of significantly lower charges for press service than those paid by others.35 Then, treating AT&T's motion as one for dismissal, the Commission granted it and terminated the proceeding.36

III

AP's initial contention is that AT&T's tariffs bar it from charging press customers more than other classes of subscribers to identical private line teletypewriter service. In an effort to buttress this position, AP directs attention to the language of the tariffs and to accepted canons of construction, and as well to what it views as long standing legislative and administrative policy in the communications field. AP then invokes the general principle that where service is made available under each of two tariff classifications, the customer is free to select the one most beneficial to him,37 and insists that press users are entitled to the cheaper full-time non-press rates. In sum, the thrust of AP's argument is that it had the option of choosing between the full-period press and other-than-press rates regardless of the use to which the service circuits was to be put.

The Commission disagreed with AP's interpretation of the tariffs, and in the process rejected its principal arguments. Looking first to the tariffs themselves, the Commission said:

We believe AP\'s construction of the tariffs is clearly contrary to the language contained in the applicable tariffs. As we view these tariffs, they establish two rate classifications, one applicable to press and one applicable to other than press. There is no language in these provisions which indicates that any user has the option to select one or the other classification. On the contrary we believe the language is clear that if a press user, as defined in the tariff, uses the services or channels to transmit general news, as also defined in the tariff, the carrier must apply press rates to such services and channels. On the other hand rates shown therein for other than press apply to all other services and channels.38

Referring next to AP's reference to governmental policy the Commission reiterated its conclusion in the Private Line Case39 that there had been no "affirmative policy of the United States Government that would require lower private line rates for the press than for other users. Certainly this Commission has not stated such policy."40 Lastly, the Commission, while concurring in the proposition that an ambiguous tariff is to be construed against the carrier,41 was "not persuaded by AP's `canons of construction' argument,"42 stating:

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