KIRO, Inc., KIRO-TV v. F. C. C., KIRO-T
| Decision Date | 04 November 1976 |
| Docket Number | KIRO-T,Nos. 75-1233 and 75-1390,S,s. 75-1233 and 75-1390 |
| Citation | 545 F.2d 204 |
| Parties | KIRO, INCORPORATED, Licensee,eattle, Washington, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Vanhu, Inc., Intervenor. KIRO, INCORPORATED, Licensee ofeattle, Washington, Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, United Community Antenna Systems, Inc., Intervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Leon T. Knauer, Washington, D. C., with whom Robert W. Barker and H. Michael Semler, Washington, D. C., were on the brief for petitioner.
Julian R. Rush, Jr., Counsel, Federal Communications Commission, Washington, D. C., with whom Ashton R. Hardy, Gen. Counsel, Daniel M. Armstrong, Acting Associate Gen. Counsel, Federal Communications Commission, Carl D. Lawson and Samuel R. Simon, Attys., Dept. of Justice, Washington, D. C., were on the brief for respondents. Joseph A. Marino, Associate Gen. Counsel, Federal Communications Commission, Washington, D. C., at the time the record was filed also entered an appearance for respondents.
Harry M. Plotkin, George H. Shapiro and Mary Candace Fowler, Washington, D. C Richard L. Brown, Washington, D. C., entered an appearance for intervenor in No. 75-1233.
were on the brief for intervenor in No. 75-1390.
Before BAZELON, Chief Judge, TAMM, Circuit Judge, and JUSTICE, * United States District Judge for the Eastern District of Texas.
Opinion for the court filed by BAZELON, Chief Judge.
Petitioner KIRO, Inc. (KIRO), the CBS television affiliate in Seattle, Washington seeks review of Federal Communications Commission determinations in two separate but related proceedings. 1 KIRO had requested the Commission to prohibit certain Seattle cable systems, Vanhu, Inc. (Vanhu) and several subsidiaries of Viacom, Inc. (United Community) from prereleasing United States network programming by duplicating signals of Canadian stations which air the programming on an advance basis. At oral argument, we were informed the Commission had begun an extensive inquiry into the entire pre-releasing problem that it hoped to complete within six months. Docket 20649 (RM-2531). On February 17, 1976, we ordered this case held in abeyance for six months to enable the Commission to formulate "appropriate" remedial provisions. (unpublished order) p. 2. By letter dated August 13, 1976, the Associate General Counsel of the Commission indicated the Docket would not be concluded for an unspecified length of time. We now reach the merits.
The Commission has been aware since it asserted jurisdiction over cable television in 1966 that cable systems could fractionalize the markets of local network affiliates by duplicating distant city network signals. The Second Report and Order on CATV, 2 FCC 2d 725, 747-52 (1966), contained a rule enabling local stations to prohibit nearby cable systems from duplicating network programming on its broadcast day. The Commission rejected a proposal to impose similar restraints on cable duplication of Canadian program signals. Although aware that then, as now, Canadian stations bought network programming on a pre-release basis, the Commission concluded that this problem was not sufficiently widespread to justify initiating rule-making proceedings. Reconsideration of the Second Report and Order, 6 FCC 2d 309, 316 (1967). However, the Commission indicated it would entertain petitions for special relief from this practice and, in fact, at first granted such relief if the cable system in question could not demonstrate why it should be withheld. 2
In companion cases decided in 1970, Colorcable, Inc., 25 FCC 2d 195, and Columbia Broadcasting System, Inc., 25 FCC 2d 212, the Commission altered its policy with respect to duplication of Canadian signals. Noting there was no "right" to pre-release protection, the Commission held that such protection would be granted only when a station demonstrated that pre-releasing damaged its "ability to provide a programming service in the public interest." 25 FCC 2d at 197. The Commission observed that the pre-releasing in the cases before it was insubstantial, 3 and that the allegations Since 1970, the Commission has maintained its policy of providing greater protection against cable duplication of signals that originate in the United States than those that originate in Canada. Under the current rules local stations are entitled to "simultaneous exclusivity protection." 47 C.F.R. § 76.92 et seq. They can require cable systems operating within a certain proximity to delete domestic distant city network programming which simultaneously duplicates the programming of the local stations. The Commission has reaffirmed Colorcable, Cable Television Report and Order, 36 FCC 2d 331, 338-39 (1972).
about loss of revenue were speculative. More broadly, it concluded that stations had proved to be financially viable without such protection and that "whatever 'problem' exists seems to be on the verge of elimination." 4
The facts in this case are simple and not in dispute. On November 2, 1973, Vanhu sought Commission certification for a new cable system that would carry three Canadian stations. 5 On March 26, 1974, United Community sought permission to add one Canadian station to the two it carried. Three other Seattle systems already carried the Canadian stations. 6 KIRO then sought special relief under 47 C.F.R. § 76.71. KIRO claimed the cable systems in question would pre-release 141/2 hours of its CBS network programming weekly, including 111/2 hours or roughly one half of its week prime time offerings, if the Commission did not intervene. KIRO did not, however, make a particularized showing of the harm that would ensue without pre-release protection. KIRO initially claimed the pre-releasing would destroy its market for network programs in its franchise area. (J.A. 22-3) KIRO later claimed it was "foreseeable that (it) would lose at least 20% and possibly 50% or more of its cable audience . . . within the franchise area." (J.A. 51, 82)
The Commission denied relief in both cases. In Vanhu, which was decided first, the Commission denied relief primarily because KIRO failed to make the particularized showing required by Colorcable. 47 FCC 2d at 1245. The Commission also noted that Vanhu would be competitively disadvantaged if denied the right to broadcast Canadian signals shown on other Seattle cable systems. Id. at 1246. The subsequent decision in United Community also was based upon a failure to satisfy Colorcable. However, Chairman Wiley wrote a concurrence in United Community, in which a majority of the Commission joined, endorsing a new rationale. The Chairman wrote that pre-released duplication of Canadian signals would produce an adverse impact similar to certain simultaneous release practices the Commission had previously eliminated. 7 Despite this, he concluded that the major networks could eliminate the problem more readily than the FCC by "encouraging" program distributors to stop KIRO unsuccessfully sought reconsideration of each decision. In United Community KIRO argued that the concurring opinion had erred in its conclusion regarding the superior ability of the major networks. 9 (J.A. 236-37) In refusing to order reconsideration, the Commission stated
selling network programming to Canadian stations on a pre-release basis. 8
No evidence has yet been presented to require our conclusion that the television networks, perhaps in conjunction with their program supervisors, can not play an important role in alleviating this practice. 52 FCC 2d at 390.
This appeal ensued.
Although judicial review of agency determinations is limited, there are three reasons why the Commission's orders cannot be affirmed. First, the orders are based on two ostensibly contradictory rationales. Second, the rationality of relying on Colorcable is not apparent. Finally, the Commission's reliance on the major networks' asserted ability to resolve the pre-release problem is based on improperly noticed facts.
A. The rationales of the main and concurring opinions appear to be at odds. The premise of the Colorcable rationale is that adverse impact is not to be anticipated as a necessary result of cable pre-release of Canadian signals whereas the premise of the concurring rationale is that harm is to be anticipated. An administrative order can be affirmed on appeal only on the grounds on which the Commission relied. SEC v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626 (1940). It follows that since the basis for the order cannot be discerned, it cannot stand.
B. Colorcable, which has never been judicially examined, conditions pre-release protection on a particularized showing of harm. However, as noted above, a network affiliate can require, without showing harm, a cable system operating within its market to defer rebroadcasting network programming obtained from distant city signals. The words of the dissenting Commissioner in Colorcable are instructive:
It seems to me that, in terms of both logic and equity, a cable system's carriage of a Canadian station's pre-released United States network programs, . . . is a more serious threat than another domestic station's simultaneous carriage of the same network service. Our rules clearly protect against the latter. We should also protect against the greater threat. Cox, Comm., 25 FCC 2d at 207.
In terms of appellate review, there is no apparent rational basis for granting less protection against the greater danger.
Furthermore, Colorcable was supported by certain factors that have ceased to be relevant. The Commission noted that the pre-releasing involved there was not significant and that the entire pre-release problem seemed "to be on the verge of elimination." 25 FCC 2d at...
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