Titusville Cable TV, Inc. v. United States

• Decision Date: 23 December 1968
• Docket Number: 16650.,No. 16559,16559
• Citation: 404 F.2d 1187
• Parties: TITUSVILLE CABLE TV, INC., Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, Lamb Enterprises, Inc., Intervenor. Byron McCRACKEN, Jr., d/b/a South Side Cable Company, Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, Lamb Enterprises, Inc., Intervenor.
• Court: U.S. Court of Appeals — Third Circuit

404 F.2d 1187 (1968)

TITUSVILLE CABLE TV, INC., Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, Lamb Enterprises, Inc., Intervenor.

Byron McCRACKEN, Jr., d/b/a South Side Cable Company, Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, Lamb Enterprises, Inc., Intervenor.

Nos. 16559, 16650.

United States Court of Appeals Third Circuit.

Argued September 16, 1968.

Decided December 23, 1968.

George J. Barco, Barco & Barco, Meadville, Pa., for petitioner Titusville Cable TV, Inc.

Spencer Ervin, Jr., Tate & Ervin, Philadelphia, Pa., for petitioner Byron McCracken.

Lenore G. Ehrig, F. C. C., Washington, D. C., for respondent Federal Communications Commission.

Herbert M. Schulkind, Fly, Shuebruk, Blume & Gaguine, Washington, D. C., for intervenor Lamb Enterprises, Inc.

Before McLAUGHLIN, KALODNER and ALDISERT, Circuit Judges.

OPINION OF THE COURT

McLAUGHLIN, Circuit Judge.

Petitioners, Titusville Cable TV, Inc. and Byron McCracken, Jr., who operates under the name South Side Cable Company, seek review of separate memorandum opinions and orders of the Federal Communications Commission denying their petitions for waiver of the nonduplication provisions of 47 C.F.R. 74.1103(F). Review is sought pursuant to Section 402(a) of the Communications Act of 1934¹ and Section 2342(1) of the Judicial Review Act of 1950.² Titusville Cable TV, Inc. also files pursuant to Section 10 of the Administrative Procedure Act of 1946, 5 U.S.C. § 702 (1966) and Rule 18 of the Rules of this Court, U.S.Ct.App. 3rd Cir. Rule 18, 28 U.S.C.A. Both waiver requests were denied without evidentiary hearings. Pending review this Court stayed the Commission's orders and petitioners' appeals were consolidated by this Court. (Order of August 3, 1968). Lamb Enterprises, Inc., licensee of WICU-TV, Erie, Pa., in whose favor the nonduplication protection was granted, intervened. Petitioners now contest the validity of the nonduplication rule, the propriety of the rule-making procedures regarding the CATV rules, and the constitutionality of the denial of the waiver requests without a hearing.

Petitioners operate community antenna television systems (CATV) in Titusville, Pa., an area where natural topographical conditions prevent multiple television service to the public. Both petitioners provide reception service from twelve television stations including intervenor, WICU-TV. Certain of the stations which are received are affiliated with the same national television network with the result that some network television programs are substantially duplicated. The Commission in earlier hearings concluded, after intensive study, that this duplication could significantly and adversely affect the public interest by discouraging local television broadcasting service and, thereby, eventually deprive the public of free service in outlying areas. The Commission, sometime thereafter, properly asserted its regulatory jurisdiction over CATV systems generally and promulgated rules providing, inter alia, protection against program duplication for local stations as against other stations received by the CATV system. See 47 C.F.R. 74.1103(f) (1966).

In June 1966, intervenor (WICU-TV), pursuant to the cited rule, requested "program exclusivity" which would require petitioners to delete reception of the duplicating programs of the other NBC stations from their CATV systems. Petitioners separately requested waiver of the nonduplication rule pursuant to Section 74.1109, 47 C.F.R. 74.1109, which provides that "* * * the Commission may waive any provision of the rules relating to the distribution of television broadcast signals by CATV systems * * *." It was urged by petitioners in support of their waiver requests that to grant WICU-TV program exclusivity would result in removal by petitioners of signals from other stations which are superior to those of WICU-TV and, therefore, the public interest would not be served. Those petitions for waivers were opposed by WICU-TV. Both petitions were denied without a hearing by the Commission.

It must be noted at the outset that petitioners never filed petitions for rehearing. The Commission urges that Section 405 of the Communications Act, 47 U.S.C. § 405, prohibits petitioners from raising certain issues before this Court which were not first presented to the Commission. Petitioner, Titusville, argues, however, that all the issues raised before this Court were effectively presented before the F.C.C. in the proceedings which led to the First Report and Order, 30 F.R. 6038, 38 F.C.C. 683 (1965) and the Second Report and Order, 31 F.R. 4540, 2 F.C.C.2d 725 (1966). Under the particular circumstances of these cases we will not at this time resolve respondent's above mentioned objection as we deem it important to address ourselves to all of the other issues before us.

The Supreme Court of the United States decided on June 10, 1968, that the F.C.C. has jurisdiction over CATV systems. United States et al. v. Southwestern Cable Company et al., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001. To the same effect, see Valley Vision, Inc. v. F.C.C., 399 F.2d 511 (9 Cir. Aug. 27, 1968). The Court, however, did not specially pass upon the validity of the Commission's CATV rules. Petitioners now protest that the nonduplication rule is invalid. They claim initially that this regulation contravenes both statutory and constitutional guarantees of free speech. We cannot agree. That argument has been specifically rejected with respect to the distant-signal rules of the F.C.C. Buckeye Cablevision, Inc. v. F.C.C., 128 U.S.App.D.C. 262, 387 F.2d 220 (1967). There, Chief Judge Bazelon stated for the Court:

"The distant signal rules are also challenged as an illegal restraint on First Amendment rights. It is true that CATV systems disseminate programs carrying a wide range of information. But we think the restraint imposed by the rules is no more than is reasonably required to effectuate the public interest requirements of the Act. As we have pointed out, the rules are not a flat bar against distant-signal importation. The restraint may be only temporary if Buckeye can show that carrying WJIM-TV will not adversely affect broadcasting in Toledo." (387 F.2d 220, 225).

Likewise, in the litigation before us the nonduplication rule is not an absolute bar to the broadcasting of a program. Its operational effect is to merely prevent duplication of a program the same day the program is broadcast by the station entitled to program exclusivity. Under these circumstances nonduplication is reasonable restraint designed to protect the public interest with as yet no direct restrictions in the Commission's regulations which would prohibit petitioners from originating their own programs. In this situation we are satisfied that the nonduplication mandate does not conflict with the dictates of the First Amendment. In Conley Electronics Corp. v. F.C.C., 394 F.2d 620, 624 (10 Cir. 1968), cert. den. October 14, 1968, 393 U.S. 858, 89 S.Ct. 127, 21 L.Ed.2d 127, the Court flatly rejected Conley's claim that the nonduplication rule treads upon its first amendment right to freely distribute available television signals, saying:

"Moreover, the argument is without merit. Several Courts have rejected similar contentions in upholding a denial by the Commission of a license to a microwave carrier seeking to serve a CATV system. See Carter Mountain Transmission Corp. v. F.C.C., 116 U.S. App.D.C. 93, 321 F.2d 359 (1963); Idaho Microwave, Inc. v. F.C.C., 122 U.S.App.D.C. 253, 352 F.2d 729 (1965). See also National Broadcasting Co. v. United States, 319 U.S. 190, 63 S.Ct. 997, 87 L.Ed. 1344 (1943). Conley seeks to distinguish those cases on the ground that they were concerned with licensing rather than direct regulation of CATV systems. We think, however, that the cases are indistinguishable. In both situations what is involved is reasonable regulation in the public interest. Cf. Buckeye Cablevision, Inc. v. F.C.C., D.C.Cir., 128 U.S.App.D.C. 262 387 F.2d 220 (1967)."

See also Black Hills Video Corp. v. F.C.C., 399 F.2d 65 (8 Cir. 1968).

Petitioner Titusville next suggests that the Commission by refusing a waiver of the rules has given intervenor WICU-TV, a monopoly over a certain audience which in itself constitutes a confiscation of property. We find no merit to that theory. The Commission's interest is not necessarily in the economic survival of a local station but rather the protection of the public. Program Policy Statement, 20 Pike & Fischer, R.R. 1901 (1960). There are no circumstances in this proceeding which would justify a finding of the monopoly charged.

Titusville alleges further that the rule is invalid since it is based on a theory of unfair competition, a finding that the Commission has no statutory authority to make. In support of this the decision in F.C.C. v. Sanders Brothers Radio Station, 309 U.S. 470, 60 S.Ct. 693, 84 L.Ed. 869 (1940) is cited. Petitioner adheres to the hypothesis that the Commission's interests are solely to protect the economic interests of the local station. That argument was put to rest in Conley, supra, 394 F.2d p. 623 where the Court said:

"In Sanders the Court held that since it is not the purpose of the Act to protect a licensee against competition, economic injury to an existing station standing alone, is not a ground for denying a license application for a new station. But the Court was quick to add that the question of competition becomes vitally important and should not be disregarded by the Commission, when economic injury to an existing station may result in a diminution or reduction of broadcast service to the public. * * * As we have seen it was precisely this prospect of over-all reduction of television service, hence, injury to the public, which prompted the Commission to adopt its CATV rules. We hold that the nonduplication rule was a

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