General Telephone Co. of Cal. v. FCC

• Decision Date: 30 April 1969
• Docket Number: 22116,22113,22143.,22112,No. 22106,22106
• Citation: 413 F.2d 390
• Parties: GENERAL TELEPHONE COMPANY OF CALIFORNIA et al., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Storer Broadcasting Company, Teleprompter Corporation, National Cable Television Assn., Inc., United States of America, Intervenors. UNITED INTER-MOUNTAIN TELEPHONE COMPANY et al., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Storer Broadcasting Company, Teleprompter Corporation, et al., Sterling Information Services, Ltd., National Cable Television Assn., Inc., United States of America, Intervenors. UNITED TELEPHONE COMPANY OF OHIO et al., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Storer Broadcasting Company, Warrensburg Cable, Inc., Teleprompter Corporation, et al., Sterling Information Services, Ltd., National Cable Television Assn., Inc., United States of America, Intervenors. The CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF VIRGINIA et al., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Teleprompter Corporation, Inc., National Cable Television Assn., Inc., Storer Broadcasting Company, City of New York, Cox-Cosmos, Inc., Intervenors. NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Teleprompter Corporation, et al., National Cable Television Assn., Inc., Storer Broadcasting Company, Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

413 F.2d 390 (1969)

GENERAL TELEPHONE COMPANY OF CALIFORNIA et al., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Storer Broadcasting Company, Teleprompter Corporation, National Cable Television Assn., Inc., United States of America, Intervenors.

UNITED INTER-MOUNTAIN TELEPHONE COMPANY et al., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Storer Broadcasting Company, Teleprompter Corporation, et al., Sterling Information Services, Ltd., National Cable Television Assn., Inc., United States of America, Intervenors.

UNITED TELEPHONE COMPANY OF OHIO et al., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Storer Broadcasting Company, Warrensburg Cable, Inc., Teleprompter Corporation, et al., Sterling Information Services, Ltd., National Cable Television Assn., Inc., United States of America, Intervenors.

The CHESAPEAKE AND POTOMAC TELEPHONE COMPANY OF VIRGINIA et al., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Teleprompter Corporation, Inc., National Cable Television Assn., Inc., Storer Broadcasting Company, City of New York, Cox-Cosmos, Inc., Intervenors.

NATIONAL ASSOCIATION OF REGULATORY UTILITY COMMISSIONERS, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Teleprompter Corporation, et al., National Cable Television Assn., Inc., Storer Broadcasting Company, Intervenors.

Nos. 22106, 22112, 22113, 22116, 22143.

United States Court of Appeals District of Columbia Circuit.

Argued February 17, 1969.

Decided April 30, 1969.

Certiorari Denied October 27, 1969.

COPYRIGHT MATERIAL OMITTED

Mr. David H. Lloyd, Washington, D. C., with whom Messrs. Paul A. Porter, Reed Miller and Robert D. Rosenbaum, Washington, D. C., were on the brief, for appellants in No. 22,106.

Mr. Warren E. Baker, Washington, D. C., with whom Messrs. Edmund E. Harvey and Lloyd D. Young, Washington, D. C., were on the brief, for appellants in Nos. 22,112 and 22,113.

Mr. Hugh B. Cox, Washington, D. C., with whom Messrs. E. Edward Bruce, Washington, D. C., Lewis H. Ulman and John F. Preston, Jr., New York City, were on the brief, for petitioners in No. 22,116. Mr. Paul F. McArdle, Washington, D. C., also entered an appearance for petitioners in No. 22,116.

Mr. Paul Rodgers for petitioner in No. 22,143.

Mr. John H. Conlin, Associate General Counsel, Federal Communications Commission, with whom Messrs. Henry Geller, General Counsel, Federal Communications Commission, and Howard E. Shapiro, Atty., Department of Justice, were on the brief, for appellee in Nos. 22,106, 22,112 and 22,113 and respondents in Nos. 22,116 and 22,143. Mr. Howard E. Shapiro, Atty., Department of Justice, also entered an appearance for intervenor, United States of America, in Nos. 22,106, 22,112, 22,113 and respondents in Nos. 22,116 and 22,143. Mrs. Lenore G. Ehrig, Washington, D. C., also entered an appearance for appellees in Nos. 22,106, 22,112, 22,113 and respondents in Nos. 22,116 and 22,143.

Mr. Alan Raywid, Washington, D. C., with whom Messrs. John P. Cole, Jr., Washington, D.C., and William J. Levy, were on the brief, for intervenors, Teleprompter Corporation, et al. Mr. Roger E. Zylstra, Washington, D. C., also entered an appearance for intervenor, Teleprompter Corporation, et al.

Mr. Bruce E. Lovett, Washington, D. C., was on the brief for intervenor, National Cable Television Association, Inc.

Mr. William P. Sims, Jr., Washington, D. C., was on the brief for intervenor, Cox-Cosmos, Inc., in No. 22,116.

Messrs. J. Lee Rankin and John R. Thompson, New York City, were on the brief, for intervenor, City of New York, in No. 22,116. Mr. Francis I. Howley, New York City, also entered an appearance for intervenor, City of New York, in No. 22,116.

Messrs. Bernard Koteen, Alan Y. Naftalin and Victor E. Ferrall, Jr., Washington, D. C., entered appearances for intervenor, Storer Broadcasting Company.

Messrs. James E. Greeley, Marshal L. Cole, and Edward P. Taptich, Washington, D. C., entered appearances for intervenor, Warrensburg Cable, Inc., in No. 22,113.

Before BURGER, WRIGHT and ROBINSON, Circuit Judges.

Certiorari Denied October 27, 1969. See 90 S.Ct. 173, 178.

BURGER, Circuit Judge:

Petitioners and Appellants seek review to vacate a Decision and Order of the Federal Communications Commission under which the Commission determined that a certificate of public convenience and necessity was required for the construction of distribution facilities to provide channel service to community antenna television systems, commonly called CATV. Petitioners and Appellants are operating telephone companies and their corporate parents, the American Telephone and Telegraph Company, General Telephone System, and United Utilities, Inc. For convenience all parties challenging the Commission's action will be referred to as "Petitioners."

(1) BACKGROUND

The Commission held that Section 214 (a) of the Communications Act of 1934, 47 U.S.C. § 214(a) (1962)¹ grants the Commission jurisdiction over common carrier facilities used to provide local distribution channel service to CATV operators transmitting broadcast signals from another state, notwithstanding that the particular distribution facilities are located within the boundaries of a single state. The Petitioners contended the facilities were intrastate and local in nature and hence not subject to the certification requirements of Section 214(a).

The Commission order directed the companies to file applications for construction certificates for all CATV channel service construction then in process and to cease and desist from further construction, and from the operation of existing facilities (with certain exceptions and qualifications) until certificates issued.

A CATV television system consists of three basic components:

(a) the receiving apparatus which picks up, by means of high antennae or microwave transmission, signals transmitted by television and FM radio;

(b) the "headend" apparatus which converts, modifies and modulates the signal by electronic equipment so that the signal received can be transmitted along a coaxial cable; and

(c) the coaxial cable distribution system which carries the converted signal to the premises of the CATV subscriber.

This third component (c) consists of three parts: the trunk or "feeder" coaxial cable which begins at the headend and carries the signal on the first leg of its journey, the distribution cables which carry the signal from the "feeder" lines to the immediate vicinity of the subscriber, and the "droplines" which carry it from the distribution cable to the terminal block on the subscriber's premises.²

Many CATV operators have constructed their own facilities for reception and distribution and the Commission does not assert common carrier jurisdiction over such systems. Others run their distribution cable over existing poles of utility systems by private contract with that utility. Neither of these types of operations involves a common carriage. Other CATV operators contract with a telephone system to provide the entire channel service distribution which carries the signal from the headend to the subscriber's home. In this proceeding the Commission considered only this latter mode of distribution by which the Petitioners supplied channel service transmission.

(2) COMMISSION PROCEEDINGS

In April 1966, the Commission initiated a proceeding and directed the operating companies of the General Telephone System and Bell System to file tariffs covering CATV channel distribution facilities. Bell and General did so under protest and a petition for reconsideration was denied.³ In October 1966, the Commission initiated an inquiry into the lawfulness of tariffs filed by General Telephone Company of California.⁴ Thereafter, similar proceedings were initiated as to the operating subsidiaries of Bell,⁵ General, and United Utilities, Inc.⁶ These proceedings were expanded to include not only questions of the lawfulness of tariffs, but also the applicability of Section 214 of the Communications Act. By Order adopted January 11, 1967, all the above proceedings were consolidated for hearing.⁷

Subsequently, in Orders adopted March 29, 1967 and released April 3, 1967, the Commission deleted the Section 214 issues from the above-mentioned consolidated hearings⁸ and initiated a separate consolidated proceeding to hear these issues.⁹ This action was taken in response to allegations by General and California that insofar as the proceedings dealt with Section 214 matters, they were adjudicatory in nature and required the more formal procedural strictures of adjudicatory determinations. The Commission reasoned that in addition to resolving the purely legal questions, the Section 214 "issues contemplate that the Commission may take specific remedial actions, including the issuance of cease and desist orders, against individual carriers on the basis of the evidence adduced." 7 F.C.C.2d at 572. Therefore, the Section 214 questions were excised and designated for separate hearing on the following issues:

(a) Whether (with respect to the Bell Systems companies) the requirements of section 214 of the act and part 63 of our rules implementing that section have been met as to the facilities used to offer channel service under the aforesaid tariffs and, if not, what action, if any, the Commission should take with respect thereto;

(b) Whether (with respect to the non-Bell System companies) any of the respondents are subject to the requirements of section 214 of the act and part 63 of our rules implementing that section and, if so, whether these requirements have been met as to the facilities used to offer CATV channel service under the aforesaid tariffs and what action, if any, the Commission should take with respect thereto.

7 F.C.C.2d at 576.

Following the evidentiary hearing and the Examiner's certification of the record pursuant to Section 409(a) of the Act the Commission...