Buckeye Cablevision, Inc. v. United States

• Decision Date: 23 February 1971
• Docket Number: No. 20152.,20152.
• Citation: 438 F.2d 948
• Parties: BUCKEYE CABLEVISION, INC., Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, D. H. Overmyer Telecasting Company, Inc., Intervenor.
• Court: U.S. Court of Appeals — Sixth Circuit

438 F.2d 948 (1971)

BUCKEYE CABLEVISION, INC., Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents D. H. Overmyer Telecasting Company, Inc., Intervenor.

No. 20152.

United States Court of Appeals, Sixth Circuit.

February 23, 1971.

John D. Matthews, Washington, D. C., for petitioner; James L. Kelley, Dow, Lohnes & Albertson, Washington, D. C., on brief.

Stuart F. Feldstein, Counsel, F. C. C., Washington, D. C., for respondents; Henry Geller, Gen. Counsel, John H. Conlin, Associate General Counsel, F. C. C., Washington, D. C., Richard W. McLaren, Asst. Atty. Gen., George B. Hovendon, Atty., Dept. of Justice, Washington, D. C., on brief.

Herbert M. Schulkind, Washington, D. C., for intervenor; Howard Jay Braun, Fly, Shuebruk, Blume & Gaguine, Washington, D. C., on brief.

Before: EDWARDS, CELEBREZZE and BROOKS, Circuit Judges.

BROOKS, Circuit Judge.

Petitioner, Buckeye Cablevision, Inc., seeks review of an order issued by the Federal Communications Commission on December 2, 1969. The order denied reconsideration of an earlier Commission order (December 24, 1968) which interpreted a December, 1967 pro tem ruling as prohibiting Buckeye from providing television signals of stations in the Detroit-Windsor area to new subscribers on Buckeye's Community Antenna Television (CATV) system in Toledo, Ohio, from feeder or distribution cables not in operation by February 2, 1968. Jurisdiction is based upon 28 U.S.C. § 1342(1), 47 U.S.C. § 402(a) and the procedures and scope of review are governed by 5 U.S.C. § 701-706. A synopsis of the facts out of which this controversy arose will expedite the consideration of the issues presented.

Since 1960 the Federal Communications Commission has gradually asserted regulatory jurisdiction over CATV systems, First Report and Order, 38 F.C.C. 683, and has made it known that its jurisdiction would cover systems which employed microwave radio or cable, Notice of Inquiry and Notice of Proposed Rule Making, 1 F.C.C.2d 453. See also, United States v. Southwestern Cable Company, 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1967). In 1966 the Commission, again asserting regulatory jurisdiction, promulgated certain rules respecting CATV operations. Second Report and Order, 2 F.C.C.2d 725.

The Commission, concerned that CATV importation of signals into major television markets posed a threat to the development of Ultra High Frequency (UHF) broadcasting in those markets, restricted CATV systems from importing into the Grade A contour area of a television station in the nation's one hundred largest television markets signals of outside stations, where the signals of those stations being imported extended beyond their Grade B contours. 47 C.F.R. § 74.1107(a). The Grade A contour area of a television station is the theoretical area in which a good picture may be expected ninety percent of the time at the best seventy percent receiver locations at the outer limits of the service area. The Grade B contour area is one in which a good picture may be expected ninety percent of the time at fifty percent of the locations. Clarksburg Publishing Company v. Federal Communications Commission, 96 U.S. App.D.C. 211, 225 F.2d 511, 515-516 (1955). The technical definitions of Grade A and B contour areas appear at 47 C.F.R. § 73.683(a). Individual hearing procedures were provided when a waiver of this rule was sought because importation "would be consistent with the public interest." See 47 C.F.R. § 74.1109. Another situation left to this type of individual or case-by-case treatment (under 47 C.F.R. § 74.1109) was where two major markets (such as Baltimore and Washington, D.C., San Diego and Los Angeles or Toledo and Detroit-Windsor) were so located that a CATV system bringing signals from one to the other did not come within the general hearing requirements of Section 74.1109(a) because the Grade B contour signals of the imported station already unassistedly reached some part of the other market. These hearings, known as "footnote 69 hearings," were concerned with the possibility of adversely affecting television viewing habits of people in the closely situated cities and the ramifications this might have on the free development of independent UHF television stations.

On December 13, 1968, the Commission announced rule making proceedings to formulate new industry-wide CATV rules. Notice of Proposed Rule Making and Notice of Inquiry, 15 F.C.C.2d 417. At that time it proposed certain new rules, one of which was a codification of the "footnote 69" hearing situation. This proposed codification (§ 74.1107(c)) provided that a CATV system operating in a community located entirely within a thirty-five mile radius of a television station in one of the top one hundred markets would be prohibited from carrying Grade B or stronger contour signals of a television station in another major market, unless the community serviced by the CATV system was also entirely located within a thirty-five mile radius of the station whose signals were to be imported. Coincident with announcing these rule making proceedings, the Commission also announced "Interim Procedures" to cover CATV operations when a conflict arose between present rules and the proposed rules during the rule making proceedings. Part of these "Interim Procedures" was to halt all major market CATV hearings in process, including "footnote 69" hearings, until completion of the rule making proceedings. 15 F.C.C.2d at 437-38.

One such "footnote 69" hearing affected by this freeze involved petitioner Buckeye Cablevision, Inc. and its attempt to increase the amount of cable carrying Detroit-Windsor signals to its subscribers in Toledo. Intervenor D. H. Overmyer Telecasting Company, Inc., a licensee of a UHF television station in Toledo, objected to Buckeye's proposed extension of services and filed petitions in April and August, 1966, requesting temporary and permanent relief to prevent Buckeye's proposed expansion as allegedly not in the public interest. A full evidentiary hearing was to be held, and on December 19, 1967, the Commission granted intervenor Overmyer temporary relief in the form of an order requiring Buckeye to limit its carriage of Detroit and Windsor signals "to areas where feeder cable is located as of the date of the order." Buckeye filed a petition for review of this order in this Court, but a stay of review was granted pending the Supreme Court decision in United States v. Southwestern Cable Co., supra. Following that decision, on July 30, 1968, Buckeye's pending petition for review was dismissed by agreement of the parties.

Two months following the mutually agreed upon dismissal of Buckeye's petition for review, intervenor Overmyer requested the Commission for a show cause order alleging that Buckeye was acting in violation of the Commission's December, 1967, order by having added substantial feeder cable carrying Detroit-Windsor signals to Toledo. Buckeye conceded adding the cable but argued that the Commission's December order did not prohibit adding cable so long as it was within the area already serviced by cable laid as of February 2, 1968. After additional administrative procedures and orders, the Commission on December 2, 1969, released an order which ruled adversely to Buckeye's contentions. In essence, the December 2, 1969 order held that the December, 1967 order, while not preventing Buckeye from adding new subscribers to cables already in existence as of February 2, 1968, did prohibit the laying of new cable even in those areas serviced by previously existing cable. Because of the December 13, 1968 freeze halting all hearings, the full evidentiary hearing on Buckeye's petition to add more cable carrying Detroit-Windsor signals to Toledo was never completed. This appeal arises from the Commission's earlier grant of temporary relief to intervenor Overmyer (December, 1967) and the Commission's subsequent (December, 1969) interpretation of this temporary order.

Buckeye raises two principal issues for review. First, that the Commission's "Interim Procedures" respecting CATV operations are invalid since they were adopted in violation of the requirements of Section 4 of the Administrative Procedure Act (5 U.S.C. § 553). Second, that the Commission's handling of Buckeye's original petition to increase the amount of cable bringing Detroit-Windsor signals to subscribers in Toledo denied Buckeye property rights without due process of law. Before reaching these questions, the Commission's challenge to this Court's power to review the issues raised by Buckeye must be determined.

The Commission maintains that the only aspect of this case which can be reviewed is its orders of December 24, 1968, and December 2, 1969, which define the areas Buckeye may service. Accordingly, it is argued that consideration of the validity of the "Interim Procedure" and Buckeye's due process challenge to the Commission's action on its original petition arise from orders which are "final and no longer subject to review." The Commission contends that this Court has jurisdiction to review only final orders of administrative agencies timely appealed and the scope of the review is limited to the subject matter of those properly appealed final orders. 28 U.S.C. § 1342. It is also argued that 47 U.S.C. § 405 prohibits review of "questions of fact or law" not raised before the Commission and, therefore, review by this Court is restricted to the December, 1968 and 1969 orders.

We conclude that this Court does have jurisdiction to consider the issues raised by Buckeye on this appeal. First, challenges to administrative substantive and procedural rules would most logically be raised by immediate appeal from the adoption of those rules. However, failing an immediate appeal does not foreclose raising the issue of the validity of the adoption of these administrative rules in an enforcement proceeding which directly involves the...