*1 OFFICE, INC., HOME BOX Petitioner,
FEDERAL COMMUNICATIONS COM
MISSION and United States of
America, Respondents,
Professional al., Baseball et Intervenors.
No. 75-1280.*
United States Appeals, Court of
District of Columbia Circuit.
Argued April 1976.
Decided March
Special Concurring Opinion filed
May * America, Inc., 75-1555; following petitions Consolidated with the Association of Nation- 2131; Broadcasters, 75-1785, which the Federal Communications al Association of Commis- Metromedia, Respondent: Inc., Inc., Broadcasting Companies, sion is 75- American 75- 1284; Office, Inc., 75-1342, 1358; 1788, 2130; CBS, Inc., 75-1807, 2129; Home Box National Industries, Inc., 75-1430; Co., Inc., 75-1869, Broadcasting Columbia Pictures 75-1496; Corp., United Artists Motion Picture *7 Rifkind, City, of the H. New York Simon York, Appeals of New
bar Court filed, court, appearance with was also entered an for vice, special leave of pro hac respondent F. C. C. Kap- Bruce Robinowitz and S. whom Stuart Plotkin, M. lan, City, Harry New York D.C., White, Washington, T. with Curtis A. Shapiro, Linda Cinciotta George H. III, Washington, Frank W. Lloyd, whom D.C., Cass, Washington, Su- Ronald A. D.C., brief, was on the for intervenor Na- Silverman, New and Moses san P. Carr Broadcasting. tional for Citizens Committee brief, petitioner for York were on City, J. and Preston R. Dougherty Thomas 75-1280, 75-1342, and 75-1358. in Nos. Padden, D.C., were on the Washington, D.C., Coll, with Washington, W. Robert 75-1284. petitioner brief for in No. McKenna, A. Jr. and Steven whom James Popham, John B. Summers and James J. D.C., Lerman, Washington, were on the A. D.C., Washington, were on the brief for brief, in Nos. 75-1788 and petitioner for petitioner in Nos. 75-1785 and 75-2131. intervenor American 75-2130 and for Sidney Bouras, Schreiber and James New Inc. in 75- Broadcasting Companies, Nos. City, petitioner York were on the brief for 75-1284, 75-1342, 75-1430, 75-1496, No. 75-1555. 75-1358; 75-1555, argued also for all broadcasters. Rosenbloom, Joel Peter D. Bewley, Ste- Weiswasser, phen Miller, A. and Lowell B. Scheiner, D.C., Washington, Arthur with Washington, D.C., were on the brief for Solomon, Hadl, A. D. whom Richard Robert petitioner in Nos. Moore, 75-1807 and 75-2129 and D.C., A. Washington, and Richard 75-1280, for intervenor brief, were CBS Inc. Nos. petitioners for No. 75-1284, Roger 75-1430. and 75-1358. J. Wollen- D.C., berg, Washington, entered an appear- Meyer, City, New York Gerald bar petitioner ance for in No. 75-1807. York, Appeals pro of the Court of of New vice, court, by special Pa., hac leave of Bernard Segal, Philadelphia, Cory- G. Lesser, Va., Dunham, whom Lawrence Arlington, City, S. don B. New York and How- brief, Monderer, petitioners D.C., was on the for in No. Washington, ard were on 75-1496. for petitioner brief in Nos. 75-1869 and 75-2171. Grossman, Justice, Atty., Dept, of
Barry D.C., with Washington, Geller, whom Samuel R. Henry D.C., Washington, filed a Simon, Justice, Atty., Dept, Washington, brief as urging amicus curiae reversal D.C., brief, respondent was on the Unit- 75-1280, 75-1284, 75-1342, Nos. 75-1358, Nicholson, ed of America. Robert B. States 75-1430, 75-1496, 75-1470, and 75-1555. Justice, D.C., Atty., Dept, Washington, Cox, Kenneth A. J. Byrnes, William appearance respondent entered an Unit- D.C., Raymond Fay, Washington, C. filed of America in No. 75-1785. Lee ed States brief on behalf of American Mothers Com- Weintraub, Justice, I. Atty., Dept, of Wash- mittee, Inc., aL, et as amici curiae. D.C., ington, entered an appearance for re- Fitzpatrick James F. and Frank G. Wash- spondent United of America in No. States D.C., ington, Washington, were on the brief Lawson, Atty., 75-2172. Carl D. Dept, for intervenor Professional Baseball in Nos. Justice, D.C., Washington, ap- entered an 75-1280, 75-1358, 75-1430, and pearance respondent United States 75-1496. America. *8 McKenna, Jr., Coll, James A. Robert W. Armstrong, Daniel M. Associate Gen. Lerman, D.C., Washington, and Steven A. Counsel, C., D.C., Washington, F. C. with appearances entered for intervenors For- Counsel, Hardy, whom Ashton R. Gen. and al, Corporation, ward Communications et Smith, Counsel, C., F. Jack David C. and 75-1280, 75-1284, 75-1358, 75-1430, Nos. Finn, Counsel, Frederick W. Cable Televi- 75-1496, and 75-1555. Bureau, D.C., Washington, sion were on the brief, Scheiner, D.C., Arthur respondent Joseph Washington, for F. C. C. A. en- Marino, Counsel, C., appearance F. tered an intervenor Associate Gen. C. Twenti- Washington, D.C., time the Century-Fox Corp. at the record eth Film
17 which, together, taken and MacKINNON, regulate limit Cir and Before WRIGHT WEIGEL,* Judge. District Judges, and fare “cablecasters”2 and program cuit “sub- broadcast television stations”3
scription
PER CURIAM:1
fee set
a
public
offer to the
for a
on
per-channel basis.4
per-program or
Techni-
eases,
pur-
consolidated
In these 15
amend pre-
reviewed here
cally, the orders
decision, petitioners
and
of
poses
argument
vious,
stringent,
more
Commission rules.5
four
of
facets of
orders
challenge various
has
procedural nicety
this
not gone
While
Commission
the Federal Communications
*
in this docket. The issue was
have been taken
States District Court for
the United
Of
California,
again
sitting by desig-
proceeding
here
raised
under re-
Northern District of
(1970).
view,
pursuant
292(d)
to 28
Docket 19554.
issue was not decid-
§
nation
U.S.C.
Order,
Report
in the First
note 2.
ed
Instead,
per
opinion
is issued
in this case
1. The
issued,
Inquiry”
a “Notice of
was
52
curiam,
it
received less than
not because
(1975),
establishing
JA
2d 87
FCC
Docket
court,
by
but because
full consideration
proceeding in
issue
which the
was to
appeal
complexity
raised on
made
of the issues
passed
Almost 18
have
be resolved.
months
required to draft
useful
share the effort
to
year
issuance of this notice and over a
since
among
panel.
opinion
the members of the
this
period.
the close of the comment
since
Yet we
by
has been
are unaware that
action
taken
origination
“Cablecasting”
refers to
2.
agree
We
with the
the Commission.
Commis-
system,
programming
on a
television
cable
exclusivity
the use of
in Docket 19554 that
sion
sig-
to
contradistinction
the retransmission
questions,”
clauses
anti-trust
Further
“raise[s]
been
over the air from
nals
have
received
Making
Proposed
Rule
Notice
Order for
stations. See
conventional broadcast television
Argument, 48 FCC 2d
Oral
n.16
76.5(v)-(x) (1975). The
chal-
rules
C.F.R. §§
this,
(1974),
view of
and in
apply
JA 18. In
view of
lenged
to both “access” cablecast-
here
potentially
exclusivity
ers,
given)
(or
deleterious effect of
from
who
are
channel time
lease
76.5(x),
“orig-
having
greatest
system operators,
interest
viewers in
id.
on the
§
cablecasters,
system opera-
possible
who are
access to diverse sources of
ination”
informa-
tors,
76.5(w).
tion,
by
rules
id.
76.225. The
§
Id.
we think the
should
§
now
only
cablecasting
challenged
apply
Therefore,
here
terminated its deliberations.
have
signals.
systems
carry
today
which also
broadcast
“compelling] agency
enter an order
* * *
76.5(a),
Although
peti-
See id.
76.225.
some
unreasonably delayed.”
§§
action
argued
the rules should be
tioners have
706(1) (1970).
§
U.S.C.
cablecasters, we think the Com-
extended to all
originally
In FCC Docket
rules
devel
5.
given
dis-
basis for this
mission has
rational
application
subscription
oped for
broadcast
Order,
Report
52 FCC
tinction. See
applied
pay cablecasting.
were
(1975),
2d
JA 71-72.
(1969).
2d
Petitions
reconsidera
FCC
Subscription
this
television stations
tion of
order were filed with
Commis
broadcast
parties
capability
many
to broadcast
those with the technical
programs
sion
here.
Notice
intelligi-
Making
Proposed
received in
“intended
Rule
and Memorandum
Order,
for a
Opinion
ble form
members of the
2d
894 n.5
FCC
73.641(b) (1975).
charge.” 47
(1972),
petitions
fee or
C.F.R. §
JA 2. These
were denied.
Id.
time, however,
JA
At the same
petitions for
review
4. Jurisdiction over these
rulemaking
instituted
Commission
regard
further
(1970) and U.S.C.
§
based on 47 U.S.C. 402
cablecasting
under new Docket
Inc.,
Office,
In In
re Home Box
51 FCC
promulgating,
to the four orders
addition
also on
2d 317
JA
which is
review
refusing
modifying,
waive the “anti-si-
here, the Commission took the view that the
Office,
rules,
phoning”
petitioner Home Box
adopted
rulemaking
as a result of the
rules
Henry
request
that we
Inc. and amicus
Geller
binding and
18397 were final and
Docket
“pro-
complete
order the Commission
See 51
2d at
JA 145.
not be waived.
FCC
exclusivity” proceedings.
“Program
gram
ex-
disagree
interpretation,
with this
however.
We
clusivity”
alleged broadcast net-
refers to an
27 infra.
See note
practice
obtaining
work
exclusive exhibition
subscription
television rules
problem
rights against
This
was
cablecasters.
adopted by
Docket
were
brought
apparently
to the attention of
first
see
2d
Fourth
FCC
in 1971 and it issued a notice
These
were affirmed
proposed rulemaking
time. See Notice
at that
Ass’n
Theatre Owners
court
National
Proposed
Making, 27
2d 13
Rule
FCC
*9
(NATO) v.
(Docket 18179).
appears
No
action
further
they
insofar as
relate to
challenged here
who attack
petitioners
those
by
unnoticed
and vacate
television
broadcast
subscription
rules on
to the
amendments
and un-
arbitrary, capricious,
the orders as
major,
a
but
represent
they
theory
respects.
all other
by law in
authorized
change of
arbitrary,
and hence
unexplained
es-
largely
it has
policy,6
prior
BACKGROUND
THE FACTUAL
I.
view
opposing
take
who
those
caped
authority
are the Com-
these cases
exceeds
At the heart of
any regulation
rules,
set out
“pay
neither
cable”
accept
We
mission’s
of the Commission.7
The effect of
for convenience.8
margin
the orders
uphold
but
instead
in full
view
cert,
charge
per
is made
denied,
gram or
channel [sic]
(1969),
F.2d
following require-
Subsequently
comply
with the
shall
the number
events
right;
such a
fifty
percent
is affiliated holds
shall not exceed
cast
general
(iii)
category
been in
release
The film has
broad-
of events
number
cast
anywhere
United
among
preceding
States
five
theaters
season
*11
rules,
it is
The first application
function of these
useful
to establish a
sub-
.origins.
scription
trace their
broadcast
television service was
(10) years prior
proposed
(i)
twenty-five (25) percent
ten
to its
more than
If less than
of
subscription
and the film
category
non-specific
broadcast
has not
in a
events
over conventional television
television
been
in the market of
broadcast station
its
film has been broadcast
ant to this subdivision or cablecast on a sub-
scription
events were broadcast live over conventional
exhibited
subscription
subscription
television in the market of the
television broadcast station
(3) years prior
for three
during
each of
proposed subscription
broadcast. Once a
(5)
preceding
proposed
the five
seasons
pursu-
in the market
broadcast,
subscription
the number of events
category
subscription
in the
broadcast on a
pursuant
76.225(a)(l)(iii),
basis
to §
basis shall not exceed the number of events
may
film
thereafter
such
subscription
broadcast on a
be
category
conventionally
in the
broadcast
basis
market without re-
among
preceding
(5)
in that season
five
gard
subsequent
to its
exhibition over con-
largest
seasons when the
number of events in
television;
ventional
category
were broadcast over conven-
(iv)
(2)
foreign language;
The film is in a
tional television.
Feature films otherwise excluded
(ii)
twenty-five (25) percent
If
or more of
may
paragraph
upon
be broadcast
a con-
category
non-specific
the events in a
events were broadcast live over conventional
vincing showing
they
to the Commission that
are not desired for exhibition over conven-
subscription
television in the market of the
in
tional television
the market or that the
any
during
television broadcast station
one
rights
films,
owners of the broadcast
to the
(5)
preceding
pro-
the five
seasons
subscription
even absent the existence of
tel-
posed subscription broadcast, the
number
evision, would not make the films available
category
events in the
scription
broadcast on a sub-
to conventional television.
fifty (50) per-
basis shall not exceed
(3) Every subscription television broadcast
category
cent of the number of events in the
station over
a
which feature film is broadcast
among
pre-
not broadcast in that season
pursuant
public inspection
paragraph
to this
shall maintain for
ceding
(5)
largest
five
seasons when the
num-
listing
a file
the title of the
category
ber of events in the
were broadcast
film, the date on which it was broadcast and
However,
over conventional television.
if the
provision
paragraph pursuant
of this
category
number of events in the
to be broad-
which it was broadcast.
is broadcast
aWhen feature film
cast over conventional television in the cur-
rent season is a reduction from the number
pursuant
(l)(ii)
subparagraph
paragraph,
network,
of this
serving
the station or
among
of events
in
broadcast
that season
holding
present
the market and
preceding
(5)
largest
five
seasons when the
right
contractual
to exhibit the film shall be
category
number of
cast,
in
events
were broad-
specified. These files shall be retained for a
category
the number of events in the
period
years.
of two
may
subscription
be broadcast on a
(b) Sports events shall not be broadcast
pursuant
subparagraph
basis
to this
shall be
except
provided
live
paragraph.
as
in this
proportion
reduced in
to the reduction in
(1)
specific
may
A
event
be broadcast if
events broadcast over conventional televi-
the event has not been
live
broadcast
over
sion.
conventional television in the market of the
(c)
advertising
No commercial
announce-
subscription television broadcast station dur-
during subscription
ments shall be carried
ing any
(5)
preceding
one of the five
seasons
operations except
promotion
television
proposed subscription
the
regularly recurring
broadcast.
If a
subscription
programs
television broadcast
place
event takes
at inter-
programs.
before and after such
year (e. g.,
vals of more than one
summer
(d)
percent
Not more than 90
Olympic games),
the total
the event' shall not be
subscription programming hours shall
subscription
con-
broadcast on a
if
basis
it has
sports
sist of feature films and
events com-
been broadcast live over conventional televi-
percentage
may
bined. The
made on a
ing
calculations
subscription
in
be
sion
the market of the
televi-
yearly basis, but,
absent a show-
during
sion broadcast station
one of the
cause,
good
percentage
(10) years
preceding
the
may
proposed
ten
of such
sub-
programming
scription
per-
hours
not exceed 90
broadcast.
(2)
subscription
specific sports
programming
cent of the total
New
events that result
restructuring
hours
existing sports
from the
calendar
month.
shall
(e) Any
subscription
not be
broadcast on a
broadcast station licen-
basis until
(5)
permittee
five
Thereafter,
see
seasons
after their first
authorized to broadcast sub-
occurrence.
scription
subscription
programs shall
broadcasts shall be
addi-
governed by paragraph (b)(1)
broadcasts,
subscription
tion to its
the
gramming required by
of this section.
at least
non-specific
nonsubscription pro-
The number of
events
minimum hours of
subscription
which
basis in
be broadcast on a
73.651.
any given
(f)
Except
they may
season shall be determined
be otherwise
as follows:
waived
Commission
authorizations
subscription
but
After L.Ed.2d
1952.11
with the
filed
proceedings and
unless the
service would not
desirable
administrative
a series of
Congress,12the Commission
from
presented was distinct
hearings
programming
before
it would license
advertiser-supported
announced
that on conventional
gather
in order to
systems
of trial
number
result,
As
television.17
and eco-
the technical
about
information
number
hours
on the
placed restrictions
*12
television.13
subscription
aspects
nomic
both
sports programs,
films and
feature
Order, 15 FCC 2d
and
Report
Fourth
its
television,
readily
on conventional
available
1968,
ana-
the Commission
466, issued
prohibited
and
com-
that could be shown
in the Hart-
results achieved
lyzed
detail
to
advertising in an effort
remove
mercial
and conclud-
ford,
system
trial
Connecticut
a mass
pressure
appeal
any economic
subscription operations
permanent
ed that
audience,
pressure
which the Commis-
limita-
with certain
should be authorized
the sameness of convention-
sion attributed
tions.
al
fare.18 A second reason for
television
the relevant limita-
present purposes,
For
films,
events,
sports
restricting
feature
films,
on feature
included restrictions
tions
that could be shown on
programs
and series
events,
programs
and series
sports
was the
subscription television
Commis-
fee,
prohibited
for a
and
could be shown
the revenue derived from
sion’s fear that
during subscription
advertising
commercial
operations
be sufficient
subscription
of these limita-
operations.14
purpose
The
away
subscription operators
to allow
bid
First,
the Commission
was twofold.
tions
categories,
in these
thus
programs
the best
authority to ded-
over both its
agonized
had
reducing
quality
of conventional televi-
elec-
channels from the
icate one or more
subscription opera-
By limiting the
sion.19
subscription operations
spectrum to
tronic
tor to material that would not otherwise be
doing
so. Such chan-
desirability
and the
television,
hoped
shown on
scarce,
subscrip-
opponents
are
and
nels
such
prevent
“siphoning”20
both
and to
argued that
should
they
tion television had
diversity
program offerings
enhance the
programming
be used for conventional
on broadcast television as whole.
would,
course,
free to
view-
all
industry
a simi-
The cable television
has
ultimately conclud-
ers.15 The Commission
regulatory
technical and
histo-
larly lengthy
authority,16
required
ed that
it had the
community
ry. Starting in
1940’s
this Court in National
sustained
position
(CATV) de-
systems
antenna
television
(NATO)
FCC,
v.
of Theatre Owners
Ass’n
or more
bring better
distant
352,
(1969),
signed to
terns
into me-
educational use.26
developed
enough
dia with
channels to accommodate
declined,
The Commission specifically
how-
of broadcast
both retransmission
ever, to promulgate rules for cable televi-
programs
origination
special
services
sion similar
adopted
subscrip-
to those
such as weather or stock exchange re-
tion broadcast television.
See First
ports.21
recently,
companies
More
be-
20 FCC2d
gan cablecasting
programs
their own
given
reasons
were that
channels not used for retransmission serv-
had no information which would indicate
ices,
the abundance of channels on
penetrate
cable television could
systems (presently
more)22
modern
35 or
any television market to the extent needed
promises
program origination
will re-
to “siphon” programming, see id. at 204 &
important part
program-
main an
of cable
n.4, and that the
Commission would in
ming.
event
be able to act in time to correct
regulation
Commission’s
cable tel-
*13
adverse
on
effects
conventional broadcast-
technological
evision reflects its
develop-
ing, see id. at 204.
ment. At first
eschewed
Commission
Nine months later
the Commission re-
regulation
altogether.23 However,
versed
course and applied the rules de-
systems
CATV
with multiple channels de-
veloped in the subscription broadcast field
jurisdic-
veloped,
Commission asserted
to cable television.
See Memorandum
tion
operations
prevent
over cable
frag-
Opinion
Order,
(1970).
and
23
825
FCC2d
mentation of audiences and revenues be-
The reasons for such a quick reversal are
tween local broadcasters
competing
and
ca-
not clear in the Order
and
number of the
systems
ble
which were bringing distant
petitioners here
petitions
filed
to reconsider
signals
into local markets.24 In
imposition of the subscription broadcast
further,
1968 the Commission launched a
rules
ground
on the
the Commission’s
broad-ranging inquiry into the uses to
abrupt change of course was arbitrary and
which
might
cable television
be put in the
not adequately explained. See Notice of
national communications network.25 The
Proposed Rule Making and Memorandum
outcome of these proceedings was a series
Order,
Opinion
893,
and
35 FCC2d
894 n.
which,
of
5
regulations
among other things,
(1972), JA 2. These
for
required
petitions
cable
reconsid-
systems major
markets to
provide
services,
899,
eration were
cablecasting
denied.
id. at
JA 7.
to set aside
“access
In
19554,
channels” on which
this same order
members of the
Docket
public could rent
to produce
spawned
here,
time
and trans-
orders reviewed
was es-
shows,
mit their own
and to furnish chan-
tablished.27 In its
Report
and Order
Comm,
21.
Many parties
See Cabinet
proceeding,
g.,
Cable Communica-
27.
to this
see e.
br.
tions, Report
(1974).
respondent
States;
to the
petitioner
President 10-11
for
United
br. for
Office, Inc., including
Home Box
the Commis-
43;
Transcript
Argument
22. See
of Oral
br.
itself,
FCC,
respondent
sion
see br. for
have
petitioner
for
Home Box Office at 9.
presented arguments predicated
assump-
on an
appropriate
tion that
it
for this court
Comm,
23. See Cabinet
on Cable Communica
validity
pay cablecasting
review the
of the
tions,
21,
supra note
at 10.
novo, although
see,
parties,
g.,
rules de
other
e.
petitioner
Broadcasting
br. of
American
Com-
generally
24. See
United States v. Southwestern
panies,
Inc., appear
position
to take the
Co.,
157, 161-168,
1994,
Cable
392 U.S.
question
validity
the rather limited
of the
(1968).
23 cations, an- originally 25, the docket, (1975), JA 52 FCC2d in this reconsideration of Petitions with minor modifi- nounced. re-adopted, Commission 380, 410, (1957); Saginaw see Opinion F.2d in Docket FCC2d and Order FCC, Upon Broadcasting App.D.C. (1970), rec- review of the Co. v. 825 ord, are final. cert, today that, pay cablecasting, denied, as to we hold F.2d hold, us for de novo considera- rules are before To L.Ed. 391 as the here, tion. has done that further consid- question is the effect Com- The critical eration of its order is needed but that order Making Proposed judicial purposes Rule mission’s Notice final for is nonetheless Order, Opinion purpose FCC2d Memorandum is to thwart this fundamental review the Commis- Moreover, 893 sion, JA Order party taken an imme- had points peti- surveying raised after appeal Proposed diate from the Notice Rule (some before tions reconsideration Opinion Making Memorandum procedural infirmities addressed to which were supra, this court would in all likelihood have to the substance of Memoran- others appeal deferred consideration of that until the Opinion in Docket su- dum and Order Commission had finished its reconsideration of pra), stated: order to rules in have benefit * ** importance view the [I]n proceedings. further See Wrather-Alvarez prior against paucity com- the issue as Broadcasting, Inc. v. op- the indication that additional ment and (1957). Finally, 248 F.2d portunity useful new for comment will elicit given by “concise statement of reasons” material, we have decided to issue further here is tantamount to the state- Proposed Making Rule so that Notice may your petitions ment: “We have denied re- parties and to hear from all concerned you have consideration because raised such reconsider the rules. serious issues that we think the rules need s(s jfc Jfi # # sfí Surely, be reconsidered.” denial on these *14 light for In of our decision to allow capricious, grounds arbitrary, is in clear pay-cablecasting comment on the further purposes of contravention of the § rules, unnecessary comment at we think it to alone, however, rely We need not 405 §on in length issues raised on the [substantive] procedural because the Commission’s own * * * pleadings. the reconsideration disposition petitions of rules disallow the the 896, 897-898, (emphasis JA 35 FCC2d at made here. As we read for reconsideration Commission, Nonetheless, added). the “[i]n rules, may 1.106 those the Commission § dispose quoted para- with” the above accordance petitions only for reconsideration in petitions graphs, for denied the reconsideration ways. First, may deny petitions. three it the Opinion Memorandum and Order its Second, 1.106(j) (1975). may it 47 C.F.R. § 899, JA 7. Docket 18397. Id. at ruling grant petition and make a on its merits fundamentally disposition is We think such a Third, 1.106(k)(l). in the order. Id. § same purpose as with the of reconsideration odds may petition ruling grant but defer its on the 405 of the Communications § envisioned proceedings. until after further Id. merits Act, (1970), 47 U.S.C. 405 and is also con- § Here, however, 1.106(k)(2). § rules, trary to the Commission’s own C.F.R. instituting has taken a fourth further course— 405 of the 1.106 Section Communica- § proceedings in to on merits of order rule provides part: in relevant tions Act reconsideration, deny- petitions * * * the ing also but filing petition of a for rehear- contrast, petitions. In in the same precedent ing not be a condition to shall Making Proposed * * * Notice of Rule and Memoran- order, judicial deci- review of Opinion adopt- dum and Order the Commission action, sion, report, except par- or the party where procedure 1.106(k)(2) ed the regard set out in with § ty seeking (1) not a such review was proceedings subscription to its on order, resulting proceedings in such deci- the sion, See 35 FCC2d at broadcast television. JA action, report, ques- or or relies on proper procedure here too We think upon or the Commis- tions fact law which * * * 1.106(k)(2), would have been that set out § opportu- no has been afforded sion * * * and we therefore hold that Commission’s nity pass. The Commission respect pay cablecasting order with must be order, an with a concise statement shall enter be read to consistent with section. therefor, denying petition of the reasons therefore, l,106(k)(2), accordance with § granting petition, rehearing such whole or further hold that the orders entered Docket proceed- part, ordering such further * * * rulings are on the of the merits ings appropriate. be petitions for reconsideration. purpose is afford the The obvious normally Although we would be hesitant opportunity to consider and Commission an pass upon appeal presentation decide merits of an where briefs prior to their matters parties FCC, Joseph U.S.App.D.C. of the indicate a fundamental confusion the court. v. (1968); open appeal, over the issues on we do not think F.2d Gerico posture disposition procedural that our Investment Co. markets, exception with the denied, New except were and Order parts York area and petitioners sought City some California.34 extent to the of service to other urban de- Extension areas reporting requirements to establish capital at a cost of might accomplished of the rules. enforcement signed to enhance billion, laying but cable to reach 54 FCC2d some Opinion $8 Memorandum Contemporaneously population that half of the American (1975), JA 117. by any Further Notice lives in rural areas would estimate issued a Second extremely expensive, perhaps requiring 83 be Making, Rule FCC2d Proposed 107, eliciting informa- an additional billion.35 Because of (1975), JA additional $240 capital extension of ca- relating program- requirements, to series these tion on the rules cablecasting capability ble service with ming.28 the basis of information On country possi- as a does not seem deleted restriction whole future. programs. use series ble immediate subscription Order,-FCC2d-, Report and Second Similarly, access of all Americans to cable Reg.2d F Radio JA 131.29 35 P & by the cost of cable ser- seems foreclosed postulated “siphoning” charges generally vice. Cable service are To understand harm, potential fees, it is phenomenon separated into two distinct one basic entitling only useful to consider structure of the tele- fee the viewer to receive today. signals, In 1975 there were industry entitling vision other with programs 70.1 million American homes viewer to see cablecast as well. sets, of which 9.8 million had access to some The basic fee is approximately $5-$6 monthly.36 Technical system.30 Although capability number exists to- large, day to distribute pro- cable subscribers individual cable and bill for cablecast small, basis, quite grams with the on a systems largest program-by-program but 101,000 having only currently customers31 this is not a single done. Instead 3,405 approximately systems 224 of fee of monthly, in addition to the $5-$7 10,000 fee, than having charged more subscribers.32 The basic access to the cable- Nonetheless, that presently casting number of homes have access channels.37 as the *15 to is a pay cable facilities about half million name of petitioner suggests, quite one is growing rapidly.33 possible and is Most literally of these to turn the home receiver major Office,” homes are located outside television a thereby into “Home Box market- prejudicial parties supra. of this case is to of the 29. See also note Although before us. not have do the bene- proceedings fit of a record of the in Docket 30. Staff of Subcomm. on Communications of normally part Comm, which would be of the Foreign House on Interstate Com- appeal grant record on an from the of a motion merce, Regu- Cable Television: Promise Versus reconsider, to the Commission itself com- latory (Subcomm. Print) Performance 11 “paucity” mented on the of information in that (hereinafter cited as Promise Versus Perform- Moreover, record. See 35 JA 7. FCC2d ance). many parties position who took the that prior the issue here was relaxation of rules 31. Id. at 19. only arguments fact made that were relevant if the issue was de novo reconsideration. Fur- 32. Id. at 17. thermore, adequately itself represented those who would defend the rules Transcript Argument 33. of Oral 27. on de novo review. reasons, foregoing For all we hold that the Id. at 77. ruling today effect of our is to remove in toto regulations all codi- Commission —now Id. (1975) regulating fied at 47 C.F.R. 76.225 § — program pay formats on cable television. Performance, supra 36. Promise Versus note programs 28. Series are those “with intercon- at 17. plot substantially nected the or same cast of principal 76.225(c), characters.” C.F.R. Order, Report supra 37. First deleted Second JA 26. FCC2d note 5. siphoning be to lower the result much the same features in television ing quality programming free television theaters are marketed that movies way to areas the offices, however, country available certain or box As with other today. population to certain economic strata of money buy to a enough those with great dispute among are matters of show. get in to see the can ticket petitioners and the various and' when an event to occur Siphoning is said seeking review of Commis- intervenors convention- currently shown on or program peti- in this case. Other regulations sion’s by a cable purchased television is al free and before Commis- tioners both here ca- subscription on a showing operator which argue ostensibly that the rules sion occurs, the a transfer If such ble channel. role in to place cable a subordinate order believes, or event program goal program diversity increase —a showing on will become unavailable of Commission has been basic to number showing free or its on system television free fact regulations40 diversity by diminish —in (since com- delayed will be television subscription operators cable prohibiting is the showing the cable appeal mercial programs that are most showing from program ma- access assurance earlier to be financial backbone of a likely terial, might be an that itself assurance result, operation. As a it is successful cable between the by agreement about brought claimed, minority cultural and program- event and the program or seller ming “piggyback” could otherwise cablecaster).38 In either subscription case broadly more system supported by people of the American segment —those Indeed, precluded. fare is some popular poor cable or those too areas served petitioners subscription argue subscription cable service —could to afford broadcast television had effect of program access receive delayed infancy by killing deny- medium its altogether. access The abil- could be denied necessary programming it access to ing —a cable subscribers thus of the half-million ity supported by apparent lack of charge 70 million television preempt the other applications viable commercial of sub- to arise from fact homes said today scription and left willing pay more to see subscribers are us urge unrefuted the Commission—and types features than advertis- certain similarly not to let the Commission snuff by attaching messages their spread ers to Finally, petitioners cable. other pay out example, features. For to those same them position siphon- take the that the threat Robinson,39 according Commissioner sub- very real and that the Commission’s ing may willing 15 to cents scribers cope with this adequately rules do not view- viewing privilege hour for the per service. threat conventional television film, while advertisers ing a recent feature *16 willing pay per to three cents are II. PAY CABLE RULES pay As result a audience of one viewer. Statutory Authority away a film routinely buy million could A. of five to ten nonpaying from a audience determining In au the Commission’s
million. rules, thority promulgate cable in no write a clean siphoning by scenario is means on slate. Whether such and, so, recognized the This court that the likely to occur if whether Commu- fact 5, Order, position port supra is not clear. and note 52 FCC2d at 38. The of Commission 162) (¶ pro- 73-74. subscription 49-50 JA television The concern subscrip- ceeding material was that shown 5, simply note 52 television would become unavaila- 39. First tion viewing. (dissenting opinion), JA at 77 101. See Fourth Re- FCC2d ble for conventional 5, Order, supra port 15 at FCC2d Here, regard (1974) (origination g., feature 47 at least with E. 76.201 § 494-509. C.F.R. removed, films, Fed.Reg. requirements), have 43310 seems to identified 39 delay showing (1974); (prime 47 time access C.F.R. 73.658 § the evil be avoided as regulations). television. See First Re- film on conventional 26 exercise over cable may only authority tele 1934, 151 et of 47 U.S.C. § Act
nications
least
some
construed at
“reasonably ancillary”
must be
seq.,
vision to
extent
the Commission to
allow
circumstances
over
jurisdiction
broad
to the Commission’s
operations.
system
television
cable
regulate
v. South
cast
television. United States
Corp. v.
Transmission
Mountain
Carter
See
Co.,
178,
at
U.S.
supra, 392
western Cable
93,
359,
F.2d
321
FCC,
U.S.App.D.C.
116
1994;
v. Midwest
88
United
S.Ct.
States
cert,
442,
951,
11
denied,
84
375
S.Ct.
U.S.
670, 92
at
S.Ct.
Corp.,
Video
Cablevision,
(1963); Buckeye
312
L.Ed.2d
Ass’n of Reg
National
generally
1860. See
262, 387
FCC,
F.2d
128
Inc. v.
FCC, 174
Utility Comm’rs v.
U.S.
ulatory
adopted by
This view has been
(1967).
220
394-395, 401-406,
379-380,
App.D.C.
see,
g.,
e.
Ameri-
of Appeals,
Courts
other
621-622,
601, 606-607,
533 F.2d
v.
523 F.2d
Liberties
Civil
Union
can
This
was first enunciated
(1976).
standard
confirmed
(9th
1975),
Cir.
1351
Co.,
which
in Southwestern Cable
Court, see United States v.
Supreme
pass
on the
Supreme
92
Court was asked
U.S.
S.Ct.
Corp.,
Video
Midwest
(1972); United States
western Cable Co. hold that
Commission S.Ct.
signals
policy
local control
a viewer
of the Commission’s
41. Distant
are those which
ordinarily
broadcasting.
173 & n.
would not
able to receive without
27
Co., supra,
Cable
392
at
authority”
Southwestern
“regulatory
was
to have
U.S.
held
173,
654,
at
S.Ct.
1994.
the
cable television.
Id.
88 S.Ct.
Under
standard
over
However,
“to
the Court chose not
was
held to be authorized to
the
detail the limits of
Com-
origination
determine in
require
program
cable
since
regulate
televi-
authority
mission’s
requirement
such a
furthered Commission
[cable
2(a).
Id. at
under Section
policies
respect
with
to both enhancement
sion]”
“
Instead,
that
‘the
stressing
at 2005.
S.Ct.
of local service and diversification of con-
pur-
ultimate
agency’s
achievement of an
trol
cable pro-
of available television and
”
stake,
at
at
was at
id.
S.Ct.
poses'
668-670,
gramming.
at
U.S.
Area Rate
Permian Basin
quoting
S.Ct. 1860.
1344, 20
Cases,
88 S.Ct.
390 U.S.
deciding
Corp.
The
vote in Midwest Video
the
the Court noted that
L.Ed.2d
was cast by
Burger,
Chief Justice
who
“reasonably
to the ef-
ancillary
rules were
wrote:
performance of the Commission’s
fective
acknowledgment,
for
requires
Candor
the
regulation
responsibilities
various
least,
posi-
at
the
me
Commission’s
at
broadcasting,” id.
88 S.Ct.
television
tion strains the outer limits of even the
responsi-
out such
at
and that to carry
open-ended
pervasive jurisdiction
“issue ‘such
bilities the Commission'vcould
evolved
decisions
Com-
prescribe such
regulations
rules and
**
*
the courts.
mission and
conditions,
not inconsistent
restrictions
at
at 1874. Nonethe-
S.Ct.
convenience, interest, or
‘public
with law’ as
”
less, the Chief Justice was
willing
uphold
Id.,
quoting
necessity requires.’
U.S.C.
challenged regulations
ground
the
on the
303(r)
system operators]
that “when
inter-
[cable
Corp.,
v. Midwest Video
United States
rupt
signal
put
the
it to their own use
supra, a decision which affirmed the Com-
burdens,
for profit,
they take on
one of
jurisdiction by
a
margin,
mission’s
a narrow
regulation by
which is
the Commission.”
four-judge plurality
Supreme Court
Id.44
Douglas, writing
Justice
for four dis-
ancillary”
again applied
“reasonably
the
Justices,
senting
yet
position,
took
third
scope
the
standard to determine
apparently
agreeing
appropriate
jurisdiction over cable televi-
Commission’s
jurisdiction
test
for Commission
ex-
was
Upholding the Commis-
operations.
sion
pressed
“reasonably ancillary”
stan-
requiring operators
large
ca-
sion’s rules
dard,
finding
uphold
regula-
but
ble
on some
systems
programs
cablecast
challenged in
tions
Midwest would “make
channels,
plurality reiterated that
Sec-
authority
Commission’s
over activities
2(a)
regulatory
power
tion
conferred
‘ancillary’
its responsibilities greater
than
Commission,
2(a)
but that
does not
Ҥ
authority
over
licensee.”
any objectives for
prescribe
and of itself
Id. at
29
the
is well summarized
view of
Commission
reason,
and because
Commission
this
chairman,
the overall level of
Burch:
to assert that
its then
Dean
seems
also
television entertain-
enjoyment of
public
matter
simple
It would
sports
if
or
be reduced
films
ment would
each licensee of
to dictate to
or
only
on
cable
were shown
events
Chicago area which
62 stations in the
television
after
conventional
shown on
should use.
format each
entertainment
anti-siphoning
that
delay,
concludes
some
maximize —at
approach might
an
Such
and
both needed
authorized.
rules are
diversity of
least in the short run —the
related,
Second,
argument
is the
closely
avail-
types
programming
formats and
pressed
here
counsel
it would not be
public.
able to the
But
Act,
Communications
that Section
by Congress
approach contemplated
(1970),
mandates the Com-
47 U.S.C. §
in 1934.
created
when it
promulgate anti-siphoning
mission
course,
are,
licensed
Broadcast stations
cannot
will
cable television
now and
since
interest,
as the
public
to serve the
but
near
nationwide
provide
in the
future
not
Court
back in
Supreme
observed
Transcript of
See
communications service.
“recognizes
also
Communications Act
at 57-58. Before consider-
Argument
Oral
broadcasting
the field
one of
is
turn, we
arguments
ing each
these
short,
competition.”
regu-
free
In
“[t]he
that we do not understand the Com-
latory responsibility of the Commission in
asserting
subscription
to be
mission
essentially involves
the broadcast
field
television will divide audiences
a balance between
the maintenance of
to broadcast stations
revenues available
competitive
a free
preservation
put
very
a manner as to
existence
such
hand,
one
system, on the
stations in doubt. See Memoran-
of these
reasonable restriction of that freedom
Order,
supra,
54 FCC2d
Opinion
dum
interest standard
public
inherent
120-122;
11,18), JA
(1110,
Second
800-802
Act,
in the
-
Communications
provided
Order,
FCC2d
Report
the other.”
-,
Reg.2d
P & F Radio
JA
evidence which indicates
The Commission has struck this balance
(“[w]e possess no
generated
revenues
advertising
by requiring
licensees to conduct formal
will
television
be diminished
conventional
the need
certain
surveys to ascertain
subscription operations”).
a result
types
program-
of non-entertainment
also First
FCC2d
licensees
dis-
ming,
allowing
while
wide
opin-
Supreme
216-217
Court’s
pro-
cretion
area of entertainment
not,
is
there-
ion in
Cable Co.
Southwestern
respect
pro-
to the
gramming. Thus with
fore, directly applicable.
affairs,
news,
and other
vision of
community,
to the
informational services
obliga-
question
Commission’s
con-
required
we have
that broadcasters
authority
regulate
tion
thorough
designed to assure
surveys
duct
public enjoyment
one whose
maintain
community problems and
familiarity with
us
thicket
analysis
disagree-
takes
into a
develop
responsive to
programming
then
and the
ment between this court
Commis-
contrast,
those identified needs.
Citizens Committee
to Save
sion. See
pro-
entertainment
generally
have
left
185, 191-
WEFM v.
ap-
decisions to the licensee or
gramming
banc).
(en
F.2d
competitive mar-
judgment and
plicant’s
controversy
place
has taken
Although
stat-
As the Commission
ketplace forces.
obliga-
in the context of
Commission’s
Statement,
Policy
Programming
ed in its
regulate changes
radio broadcast
tion
Fed.Reg.
view has
formats,
much of what
been said
“[o]ur
station’s
directly relevant here.47 The traditional
been
[entertainment]
3(b)
Act,
expressly
§
Act does
to cover television because
47. The Communications
Act,
153(b) (1970),
regulate
“radio commu-
III of
defines
television. Title
U.S.C.
pictures.
broadcasting,
to include transmission
radio
has been
nication”
covers
construed
*20
feel its
audience that would
specialized
to
a
best left
format
is matter
program
format is of this
endangered
If
loss.
the
or appli-
the licensee
the
of
discretion
must affirmatively
the
variety, then
FCC
accept-
public
matter of
cants,
as a
since
interest
public
whether
the
consider
will
necessity he
of economic
ance and
pro-
the
approving
be served
preferences
to meet the
program
tend to
if there
may,
posed assignment,
void is left
fill whatever
area and
of his
of
or inade-
questions
are substantial
fact
of other stations.”
programming
by the
other
application
or
quate data
40
230
Corp.,
FCC2d
Zenith Radio
materials, necessitate
officially noticeable
omitted).48
addition, in
(footnotes
hearing in order to
public
a
conducting
the
has
proceedings
Commission
many other
issues or assist
the
resolve the factual
the First Amend-
position
taken the
discerning
public
in
the
in-
Commission
anti-censorship provision of
ment
the
justifi-
it
sufficient
Finally,
terest.
is not
Act,
326
47 U.S.C.
the Communications
application
the
approving
cation for
authority
require
it
to
or
(1970), strip
of
assignor has
financial losses
the
asserted
ma-
any particular
of
prohibit
to
format;
those
providing
in
the special
Comm,
See,
the
e.
Ad Hoc
on
g.,
terial.
losses must be attributable
the format
Reg.2d
Bowl, 29
F Radio
Sugar
P &
in
an as-
logically
support
itself
order
Projections,
(1973);
of Elections
Broadcast
a
of
signment
that occasions
loss
the
(1972); Washington Women’s
FCC2d
format.
Peace,
Reg.2d
P & F Radio
Strike
at
Moreover,
the abundance
channels
given
B. The Evidence
plus the Com-
systems
carry,
that cable
can
1.
of Review
Standard
governmental,
mission’s rules57 requiring
educational,
exception
and
With the
Commis
public access channels on
Inc.,
Office,
every
sig-
ruling
in In re Home Box
system carrying
sion’s
advertising
ninety (90) percent
No
56.
commercial
announce-
Not more than
subscription
programming
ments shall be carried on
chan-
cablecast
con-
total
hours shall
sports
during
operations
except
nels
such
before
sist of feature films and
events com-
* * *
promotion
programs
and after such
bined.
programs
per-program
other
for which a
or
by
(1975),
76.225(d)
as amended
47
§
C.F.R.
per-channel charge is made.
Report
Order,-FCC2d
—,
and
P
Second
35
by
(1975).
Reg.2d
as amended
76.225(e) (1975),
767
47
& F Radio
C.F.R. §
—-
FCC2d-,
Second
and
35 P
76.251,
(1975).
76.253
§§
47 C.F.R.
Reg.2d
(1975).
F& Radio
767
35
141,
Equally important,
an
(1975),
a-gency
JA
each of the
51 FCC2d 317
product
comply
procedures
is the
must
with the
set out
orders
here
challenged
4 of
APA.
303 of
Section
Citizens
Preserve
rulemaking under Section
the Com
Park,
Volpe, supra,
Overton
Inc. v.
401
Act,
(1970).
47
303
munications
U.S.C.
U.S.
§
417,
at
91
sets
S.Ct. 814. The APA
out
not
Because the statute does
otherwise indi
notice
procedural
requirements:
three
cate,
rulemaking
is also informal rule-
proposed rulemaking,
an opportunity
4 of
making governed by
the Ad-
Section
comment,
for interested
and
persons
“a
(APA),
Act
ministrative Procedure
5 U.S.C.
basis
general
concise
statement
553(a); Ethyl
[the]
v.
(1970),
Corp.
553
see id.
§
§
ultimately
purpose”
adopted.
of the rules
5
EPA,
373, 405, 406, 541
U.S.App.D.C.
176
553(b)-(c).
interpreted
As
U.S.C. §
(en
banc),
F.2d
33-34
court,
proce
recent
of this
these
decisions
appropriate
of review is that set
standard
are intended to
requirements
dural
assist
APA,
out
5
Section 10
U.S.C.
judicial
provide
review as well as to
fair
Ethyl
706(2)(A)-(D) (1970),
Corp.
see
v.
§
treatment
affected
persons
rule.
EPA, supra,
U.S.App.D.C.
405-406,
at
176
Ruckelshaus,
Portland Cement Ass’n v.
See
33-34;
541 F.2d
Ass’n
at
National
of Food
308, 326-327,
U.S.App.D.C.
486
158
F.2d
Chains,
ICC,
U.S.App.D.C.
175
Inc. v.
cert,
denied,
393-394
351-352,
(1976).
535 F.2d
(1974);
921
International Harvester Co. v.
Pedersen, Formal Records
generally
Ruckelshaus,
411, 445,
U.S.App.D.C.
155
478
Rulemaking,
and Informal
85 Yale L.J. 38
(1973);
F.2d
Automotive Parts &
(1975);
The Courts
the Rule-
Wright,
Boyd,
Accessories
v.
132 U.S.App.D.C.
Ass’n
making Process: The Limits of Judicial Re-
(1968).
407 F.2d
See also
view,
L.Rev. 375
Cornell
Wright, supra, 59 Cornell L.Rev. at 380-
recently had
To this
We have
occasion
end there must be an ex
views, information,
obligation
change
review
aside
length
at
our
set
criticism
“arbitrary,
agency
capri
persons
action which is
between interested
agency.
cious,
discretion,
Ruckelshaus,
an abuse of
or otherwise
See Portland Cement Ass’n v.
* *
326-327,
supra,
U.S.App.D.C.
accordance with law
393-394;
EPA,
706(2)(A),
Ethyl Corp.
F.2d
cf. National Nutritional
U.S.C.
see
v.
405-409,
Weinberger,
Ass’n
512 F.2d
541 Foods
v.
cert,
(2d Cir.),
denied,
F.2d
for this reason
we need
U.S.
It
analysis
Consequent
not labor our
here.
36
Applying
Standard
Ass’n v. Ruck
Portland Cement
public.
326-327,
elshaus,
at
U.S.App.D.C.
158
supra,
Regulation
(a)
Need for
response
A
is also
393-394.
486 F.2d at
outset, we must consider
At
Park,
requires
by Overton
mandated
a
out
has made
the Commission
whether
itself that all
reviewing court to assure
a
rulemaking at all since
undertaking
case for
by
have been considered
relevant
factors
ap
perfectly reasonable
“regulation
416,
at
91 S.Ct.
See 401 U.S.
agency.
given problem
of a
the face
propriate
EPA,
814; accord,
Light Co. v.
Duquesne
problem
if that
capricious
highly
1186,
(3d
1975), vacated
1196
Cir.
522 F.2d
FPC,
Chicago v.
City of
not exist.”
does
902,
other
U.S.
grounds,
323, 458
at
at
F.2d
U.S.App.D.C.
supra, 147
3185,
49 L.Ed.2d
has framed
Here the Commission
addressing as
problem is
survey of
case law
From this
regulated to
cablecasting can best be
how
First,
principles.
dominant
an
emerge two
to over-
supplement
provide a beneficial
rulemaking
informal
proposing
agency
at the same
without
broadcasting
the-air
obligation to make its views known to
an
opera
undermining the continued
time
form so
in concrete and focused
service.
of that “free” television
tion
or formulation of alter
as to make criticism
Making
Rule
and Memo
Proposed
Notice of
Second,
possible.
the “concise and
natives
Order, supra, 35 FCC
Opinion and
randum
accompany
that must
general” statement
problem this
898,
state the
2d
JA 6. To
at
finally promulgated
the rules
however, is to
over
fact
gloss
way,
to the realities of
must be accommodated
way justified
no
has in
scrutiny, which do not contem
judicial
sup
television must be
position that cable
will, by
itself
a labo
court
plate
to,
of,
equal
an
broad
rather than
plement
record, formu
rious examination of the
narrow
Such an artificial
cast television.
the significant
in the first
instance
late
regulatory
ing
scope
problem
and articulate
agency
issues faced
arbitrary and
capricious
is itself
**
*
their resolution.
the rationale of
CAB,
Pillai v.
ground
reversal. See
us to see what
record
enable
must]
[The
248,
at
485 F.2d at
supra,
U.S.App.D.C.
major
were ventilated
policy
issues
Moreover,
narrowing its discus
the,
why
proceedings
informal
has failed
way
sion in
to them as it
agency reacted
did.
harmful about
crystallize what is in fact
& Accessories Ass’n v.
Automotive Parts
the harm is char
“siphoning.” Sometimes
208,
U.S.App.D.C.
at
Boyd,
away
bidding
pro
selective
acterized as
338; accord,
Nutritional
F.2d
National
television, see
gramming from conventional
Weinberger, supra,
v.
Foods Ass’n
512 F.2d
Order, supra, 52
2d at
Report
FCC
701;
CAB,
239,
158 U.S.App.D.C.
Pillai v.
49,
50,
delay,
id. at
JA
JA
see
sometimes
244-252,
(1973);
485 F.2d
the financial
(perhaps)
and sometimes
CAB,
v.
Air Carriers Ass’n
com
broadcasting,
National
collapse
conventional
31, 44-45,
F.2d
198-
JA
pare id.
Second
Pitts,
at-,
P
(1970);
Camp
cf.
2d
supra,-FCC
As a
Reg.2d
Company. might paid dollars avail- for a estimating pay cable million dollars that $1 any particular of purchase appeal. of less able for movie somewhat formula, sim- in somewhat program. 52 FCC 2d at terms, is follows: plified 9-10, JA 33-34. this demonstration From households) (percent X (Total Companies oth- Broadcasting American X sets) (percent with tv households who similar mathe- petitioners presented er are cable households with tv sets that the conclusion matical would draw models subscribers) X of cable tv (percent tv option cable pay subscribers that have operations cable will have more [p]ay available) X of subscribers (percent than stations televi- money television pay option pay with that are subscrib- programming purchase sion networks to X ers) (percent pay subscribers and, competitive being creatures of a eco- X (charge program question) view in inevitably purchase system, nomic will (percent X program) to subscriber for programming much of now best through subscription charge passed on free television and leave = (total national program supplier) left free television with what is over. pur- pay cable available for dollars program question). chase of in the state assumptions
ABC’s own as to JA 34. Id. in pay industry cable television accuracy of the conceding fig- Even are as follows: (a finds no sup- ures used concession which household_______________ 75,400,000 Total record, however), we think the port penetration___percent___ TV set proponents of the mathematical models penetration______do_____ n CATV proved problem have not case. The their penetration pay CATV with incommensurability fig- of the ultimate potential_________do_____ TV income of compared: pay ures nationwide Pay penetration subscriber systems pay hand, with on the one cablecasters potential____________do_____ recent, historical,62 expendi- but network pay Percent of subscribers tures on the other.63 It seems patently viewing program_____do_____ that no is valid unless comparison obvious Charge to subscriber for figures extrapolated financial program-----------dollars___ 2.25 potential is the year. important same More pay fee Percent of collect- compari- into the for distortion introduced pro- passed ed on to gram producers----percent___ using one hand son income on versus The Justice expenditure the other. De- by ABC, In the posited circumstance have partment petitioners and other re- slightly more 1.5 million homes than peatedly pointed out that the conventional particular pay each for $2.25 industry highly concentrated making program slightly available more is, therefore, enjoy substantial likely pay million dollars to $1.2 tha[n] See, e. power. g., monopoly monopsony industry purchase program for the Depart- Comments the United States question. This, suggests, com- ABC ment of Justice in No. Docket pares dollars net- with million $1.5 (April 1969); Comments showings work of a JA might for two Love of Justice in Department “blockbuster” feature film like Sto- United States expenditure precise date of seem to have date of network comment submission Broadcasting used. data is not clear. American been Companies’ presentation to the Commission data. pointed used 1972 See Further Comments of The deficiencies noted here were out Companies, Broadcasting Inc. Optical American Comments (Sept. 20, Corp. Docket Systems No. JA Docket No. JA 1974). general, contemporaneous (Sept. 1974). data *28 with more consistent economic theory be 19554, at JA Docket No. the prima would facie be to advan- with since it 5, 1969). Evidence consistent (Sept. operators to sell broadcast tage of cable readily available. For is such an inference report rights to conventional television stations Noll, Peek and McGowan example, no cable regions country where ser- enjoyed a broadcast stations that television Moreover, greater in 1969 versus vice existed. return on sales percent cable, greater manufacturing by area not covered for indus- eight percent all be would tend to for this is evidence that demand suggest that try that, it be rights, likely and the more would rigorous in television “competition less of cable and broad- through To a combination economy.”65 be than elsewhere cast, coverage would be sure, nationwide manufacturing very television industries, had the Commis- achieved. different arguments rejected sion evaluated and argument We find the Commission’s that and others a Department Justice program- “siphoning” could lead loss be question presented would different ming poor those too cable purchase for But did this review. the Commission not plausible. again, television more Here how- whether conventional consider ever, has we find that the Commission not more for feature pay broadcasters could that the would poor documented case be present than at sports film and material and, television service deprived adequate profits below a com- pushing without their Commission, worse, by prohibiting and, petitive return on investment conse- subscription advertising in connection with conclude that quently, properly it could not virtually ensured operations, because it could not siphoning would occur price pay cable will never be within much-broadcasters, or know whether how poor. disagree- There- is reach of the little competition, would increase faced with ment at the theoretical level about by reducing alleged mo- expenditures
their through poor mechanism would nopoly profits. Since did deprived be in markets broadcast service distorting effect potential not either assess operators, by served cable television. Cable by the broadcast- comparison offered show, require be to sell a would able ers, any may have drawn from conclusion rights exclusive exhibition in the markets arbitrary. would be evidence served, they with the result that events operators subscrip- cable for purchased We have similar difficulties presentation assumption second cardinal of the Commis- tion would unavailable to sion, broadcasters, e., i. lead to or would be available “siphoning” would after this sce- programming delay. loss of film and a What follows from sports nario, operators that cable systems assuming audiences not served cable even strength to cable. See would have the financial outbid poor too to subscribe 61-62; broadcasters, no means clear. There Transcript Argument of Oral br. record, at 53-54. To reach is uncontradicted evidence respondent FCC that the film materi- example, popularity must as- such conclusion the Commission firms, with an increase in the having pur- once al does not decline sume that cable exhibition will interval between first theater rights program, chased exhibition sell television broadcast. See Com- not demand to first respond market Docket No. Program Suppliers ments viewing in those areas rights for (Nov. 1, 1972). JA 386 At reach. We find no discussion firms do not movies, therefore, “siphoning” least assump- such an supporting record very Indeed, poor harm the much. contrary assumption tion. Noll, McGowan, Noll, McGowan, supra M. note R. 65. R. Peck & J. M. Peck & J. Association of Broad- National margins profit that 1975 casters has'' estimated Broadcasting, average percent. will 18.9 July 26, at 19. *29 the lectively represent charge a Com- cable rules the important,
Equally
anticompeti-
a
to consider
scarcely demonstrate
mission has failed
whole
as a
taken
Thus,
poor.
strategy
for the
it
regulatory
solicitude
tive effects
consistent
viewing
upon
relies
home
“free”
the
although
purposes
For
adopted.
analytic
has
the
programming,
advertiser-supported
can be treat-
petitioners
various theories of
barred
proceeding
in this
has
first, a
that the Com-
ed as two:
contention
offering advertising
firms from
cable
inadequately
mission has
resolved tradition-
subscription operations.
with
connection
strengthening
the
objections
al antitrust
result,
a
the Com-
supra. As
note 55
See
the
power over
monopsony
of broadcasters’
that some
possibility
mission forecloses
broadcasting indus-
sports
feature film and
advertising
user fees and
combination
tries;
second,
has
and,
that the Commission
cable television
subscription
might make
nega-
the rules’
similarly been oblivious to
them access to
poor, giving
available to
long-standing
tive
on its otherwise
impact
may poten-
programming
the diverse
of control of
favoring
policy
diversification
noted,
already been
see
As has
tially bring.
will treat
these
choices. We
programming
-,
567 F.2d at
U.S.App.D.C.
arguments seriatim.
section of the
advertising ban
supra,
paid
much attention has been
Although
wholly
meet
developed
was
regulations
question
in brief to the
whether
Com-
and it has
regulatory problems
different
traditional
obliged
mission was
to consider
here,
in-
of its
retained
not because
been
be
formulating
rules to
antitrust
issues
merit,
no one ob-
only
but
because
trinsic
interest,
“public
under
its
conve-
issued
are thus left with the
jected too much. We
standard,
nience,
necessity”66
we do not
that,
is serious
if the Commission
conclusion
precise
think this
issue is before us at this
regulations
its
helping
poor,
about
proceeding
Throughout
time.
rules,
about its
but if it is serious
arbitrary;
on the
sought
Commission has
comments
harm to the
really
relying
on
cannot
anticompetitive impact of its rules and has
be the ultimate valid-
poor.
Whatever
defect on
asked that
less restrictive alternatives be
argument,
principal
of this
ity
presented
Proposed
is no record evi-
to it. Notice of
Rule-
this review is that
there
support
making
Opinion
it.
Memorandum
dence to
Or
der,
(¶ 12(b)),
at 898
JA 6.
FCC 2d
Anticompetitive
(b) Consideration of
Commission,
in its First
Effects
also treated the antitrust
issue
required
properly
one which
an answer and
while not conced
Many petitioners,
stated the issue raised:67 “whether
press
series
ing
regulation,
the need
interest
which under-
public
rules which col-
considerations
objections to the
additional
(1970),
expressly incorporates
303(r) (1970).
anticom-
66. 47
§
U.S.C.
petitive effect as one of six factors to be con-
“public
assessing
suggestion
convenience
agree
sidered in
with the
67. We do not
necessity.”
argument
Department’s
petitioners
must
some
balancing approach
have
demonstrate that the means it
chosen
was rebuffed in favor of a
impact
competition
precedents.
least
consistent
of a number of
Anti-
on the basis
purposes.
only
competitive
achievement
of the Commission’s
factors are also
one of num-
anti-
To the extent
that First Amendment and
to be considered under the
ber of factors
Com-
coincide,
necessary
Act, see,
it is
trust considerations
g.,
munications
National Broadcast
e.
showing.
U.S.App.D.C.
make such
See 185
190, 222-224,
States,
ing Co. v. United
319 U.S.
Otherwise,
-,
we
F.2d at
infra.
(1943);
63 S.Ct.
47
aspects”85 of
1416,
(1945), consequences”84 or “collateral
L.Ed. 2013
20,
89
1,
65 S.Ct.
public places
use
regula-
example,
For
may adopt
speech.
reasonable
government
speakers competing
purposes, although
in-
separating
speech-related
tions
the same au-
terfering
each other for
right
jealously guarded
with
Broadcasting Co. v.
Red Lion
Amendment,86
subject
See
re-
dience.
to reasonable
387-389,
89 S.Ct.
supra, 395 U.S.
ameliorate traffic con-
straints intended
abridgment only
becomes
1794. Restriction
levels,88
noise to
gestion,87 reduce
tolerable
government
speech
seeks to limit
“be-
when
unwilling
audi-
prevent “capture”
or
of the issue rather
it is on one side
cause
sure,
dealing
be
many
ences.89 To
cases
27;
another,” Meiklejohn, supra,
A.
than
consequences of speech
collateral
with the
No. 8 v.
Joint
Dist.
see Madison
School
“speech” ver-
in terms of
analysis
admit of
Comm’n,
Empl. Relations
429
Wisconsin
“pure speech” versus
sus “conduct” or
421,
167, 175,
50
97
L.Ed.2d 376
S.Ct.
U.S.
for which
principle
“speech
But
plus.”
unwise,
thought
it
un-
or
(1976),
because
limited
situa-
these cases stand cannot
see,
fair, false,
dangerous,
g.,
e.
Police
because of
evil arises
tions in
Chicago Mosley,
v.
408
Department of
U.S.
to movement of
motion unrelated
2286,
92, 95-96,
414 &
California,
15,
are valid.92
403
91
v.
U.S.
(1974); Cohen
(1971);
284
United
1780, 29 L.Ed.2d
S.Ct.
here,
say
we cannot
Applying O’Brien
O’Brien,
367, 382,
391
88 S.Ct.
U.S.
v.
States
intended to
rules were
cable
pay
(1968); Joseph
672
Burs-
1673, 20 L.Ed.2d
The narrow pur-
expression.
free
suppress
Wilson,
495,
343
72
U.S.
S.Ct.
tyn, Inc. v.
protect-
pose espoused
Commission —
indirectly by
or
777,
L.Ed. 1098
96
not served
of those
viewing rights
ing the
speakers
over
certain classes
favoring
pay for cable —is
poor
too
by cable or
others,
Joint
Dist. No. 8
see Madison
School
Indeed,
regula-
unlike a
it is not
neutral.
Comm’n,
Relations
su-
Empl.
v. Wisconsin
enforcing order on
hecklers
quieting
tion
421;
175,
Buckley
97
429
at
S.Ct.
pra,
U.S.
situations,
in those
As
spectrum.
the radio
1, 17,
612,
Valeo,
424 U.S.
S.Ct.
v.
otherwise blot
would
regulated
the conduct
(1976);
Department
Police
L.Ed.2d 659
message, regardless
aof
out transmission
97-98,
supra, 408
at
Chicago Mosely,
v.
U.S.
segment of its
content,
at
least a
2286;
Rockford,
v.
Grayned City
92 S.Ct.
cases,
those
Also like
potential audience.
2294,
104,
92 S.Ct.
ject repeated or their releases Yet, is years proceedings theaters. after a film three violations these the ex cable is re- old its exhibition on set parte communications doctrine out whether it ever regardless stricted was Valley court in Sangamon this Television Similarly, suitable in some for broadcast. States, Corp. United rules have the sports circumstances 221 (1959). 269 F.2d The Commission took reducing the anomalous effect of number of petition, no action in to response non-specific that can shown on games set aside the or- amicus now us to presses same cable television at time that proce- ders under review here because reducing broadcasters are number of promulgation. infirmity dural in their provision This games they will show. that a It is uncontested num- apparently ground on the apparently justified that it is participants ber before too monitor the difficult to reasons broad- commissioners or sought out individual game casters cut their schedules and back purpose for the employees Commission might that at cutbacks least some be caused confidence the discussing ex parte However, competition.104 rec- this review here. In merits of rules under to think that ord reveals no reason cutbacks fact, itself solicited such more represent they than siphoning proposed represent or commercial in its notices judgment. editorial communications urged that inter- 104. See file. In amicus addition opportunity parties 52 FCC 2d at JA 86. an com- ested be allowed expedited on an ment on the material disclosed urged Amicus Commission to set out basis, e., period. i. within a three-week parte the essence of oral ex communica- place presentations tions and written filed with Unfortunately, document discussing the and, without rulemaking106 does not allow an assessment this court of what nature, substance, importance or by the was said to the Commission what us that we should said, argues before was in ex engaged parte who persons various be- these communications ignore simply of the effect give To flavor contacts. be- untimely, was petition amicus’ cause however, contacts, we think useful these complaining estopped from amicus cause the brief of amicus quote length from he also in which of conduct course about Geller: or, alternatively, because San- participated, in fact have parte] presentations attempt In an apply.107 [Ex does gamon stages of the pro or- made at crucial sua been sponte this court clarify the facts Thus, early then-Chair ceeding. “a list of provide dered complete sought Burch action together man parte presentations, of the ex all it, each, or Because the proceeding.[110] made Com the details of “leaning” in its deliberations dur- mission was representatives, any of its members relaxing existing re- rules “with proceedings.” towards rulemaking ing *40 movies,” rights filed a ‘blockbuster’ the Commission ‘wildcard’ sponse to this order 11] long Broadcasting Compa re- American pages which over 60 document [1 “key mem vealed, ny’s representatives contacted imprecisely,108 widespread albeit ex in turn successful involving virtually Congress,” bers of who communications parte court, ly the Commission not take including pressured this every party before action.[112] Further, such the final cru Geller.109 amicus many kept Making Proposed 108. officials Because Commission Rule and 106. See Notice contacts, the Opinion no accurate records on list is Memorandum 7; incomplete of various contacts dates JA Further Notice of FCC 2d at or estimated. Making often uncertain Proposed Ar Rule and Order for Oral gument, JA FCC 2d origi- parte were also 109. Ex communications here, by many party persons nated ing not includ- only has devoted one 107. The Commission Congress, members of members of the brief. Br. for re- footnote to this issue press, representatives per- of various trade forming spondent at n.55. This footnote does FCC 50 groups. arts accuracy challenge of amicus Geller’s and, indeed, at offers us no facts all statements 4, 1974, Digest, at 110. See Television March import tend to rebut the clear that would 6; 4, 1974, 1-2; Broadcasting, at Televi March parte that ex contacts amicus’ statements 18, 1974, 1-2; Digest, sion Feb. Broadcast pay shaped ultimate form of the cable ing, March at 5. accompanying text notes 110 to 116 rules. See infra. 4, 1974, Digest, March Television by urged The reasons the Commission reaching parte against ex * * contact issue * (Senators’ 112. Id. “action was estoppel be frivolous. There can no waiver or by by prompted visit ABC Chairman Leon- Hill against an is- raised here our consideration of Rule, ard Elton whose Goldenson and President Therefore, public to the as a whole. sue vital only goal put on was to halter relaxation of hands,” they be, “dirty Mr. if such Geller’s Broadcasting, pay-cable rules”); March Second, sought present Erlich, no bar. Mr. Geller 6; by H. Everett see remarks delay public weeks in which the Counsel, three Vice Senior President and General urged ABC, on the information he could comment Network Affil- before the ABC Television brought iates, this to the Angeles, May disclosed. Since he matter Los at. 1: be- months attention of Commission three know, prior you just As most of the- FCC of the Commission’s First fore issuance departure Chairman Burch’s sudden was on Order, and at a time when the Commission verge Pay-TV modifying applica rules communications, entertaining private still was by loosening 10-years ble to movies the 2 and find it incredible that we They considering limitations. also were difficulty, suggest would even “the if not the exception “wild card” for 12 to 18 so-called impossibility, complying with this ‘after the pictures year exempted would have respondent request.” entirely fact’ at 50 n. popular Br. FCC the most from the features Finally, Sangamon, properly application 55. construed, hold We rule. took leader proceeding. ship opposing proposals apply does to this these with the key Congress made it text note 124 infra. result members of The information promulgate. course what rules the tentative period, cial decisional would to this court Commission submitted taken to be during period broadcast meeting, and indicates non-public each leak after rush to met some 18 times with Commis- interests representatives industry some personnel, to the Com sion cable interests nine presentations parte make ex times, 10,1975, picture sports motion interests March and staff. On missioners each, interest” inter- “public that “word of five times journals state the trade n at all. got . out venors not changes . . last week’s week, broadcast and during the and both to draw impossible Although Commission, rushed to lobbyists cable the effect of ex firm conclusions about facets”[113] with some —that unhappy upon shape the ultimate parte presentations “. representatives rules, evidence is cer- Friday calling were on commissioners with often-voiced claims of tainly consistent ” changes.[114] oppose . over industry influence undue week, press again re following the trade particularly con- and we are proceedings, groups [industry] “various ported that shaping the final cerned Commission, pressing for lobbied have been reviewing we are here decision”[115] the tentative changes in among contending industry compromise of Broadcast National Association —that forces, by exercise of the inde- rather than “ . . staff members met ers . interest the pendent discretion Bureau staffers Broadcast with [FCC] Act vests in individual Communications need backing up asserted data present [an] National Ass'n of Inde commissioners. Cf. standard.”[116] more restrictive] *41 [a Television Producers & Distribu pendent (2d (footnotes re- tors v. 502 F.2d Cir. Geller br. at 3-4 edited and 1974). by the numbered). important heightened It is to note that Our concern is many period contacts in the crucial submission of the Broadcast occurred Commission’s states that argument between the close of oral on Oc- Bureau to this court which representatives the of the December 1974 broadcast adoption tober 1974 and 20, 1975, regulation cable pay and Order on March when “described the kind of that, view, ‘could live have in their broadcasters rulemaking record should been ” 117 deciding was were not re- positions closed while the with.’ If actual Commission they practice possible. When the this wherever in no uncertain terms that did known argument holds an oral on some expect Commission rulemaking to act on such a matter, carefully divvy up guidance. far-reaching policy matter without par- advocacy among various got message time available and has argument completed, the postponed When the is months reconsidera ties. for several * * then be in the best particular should issue *. Commissioners position tion of this possible decision to make a tentative 10, 1975, 2; Digest, at see Television March however, Typically, merits. such on the 10, 1975, Broadcasting, March at 6. long after the con- decision is not made until argument. During the clusion of the formal 114. See id. decision, delay argument often con- oral until informally privacy of individual in the tinues 17, 1975, Digest, March at 3. 115. Television simply I do and staff offices. Commissioner and, good practice Broadcasting, not think that this is a March at 10. accordingly, practicable, I and to the extent 117. A similar note was struck Chairman making hope tenta- to have Wiley speech the Federal very quickly following Communica- judgments oral tive obviating possibility tions Bar Association: argument, thus presentations. lobbying technique further seriatim There is one other * * * positions, Compromises, although fail-back me I would ac- which disturbs knowledge largely “real facts” are often re- the so-called that it is due to a some- and, supplemental filings perhaps, practice part served for subsequent what unfortunate on today . visits to Commission offices. it I want FCC. put I mention because 30, 1970). (April you my change 21343 at 4 Mimeo. on notice of intention to FCC with dele- comments, inconsistency for arbitrariness or as this state- public
vealed in and, further, authority. if the id. at gated suggest, ment 415— —-- more apparently these Commission relied S.Ct. framing discussions in Yet -, supra. candid 567 F.2d at private rules, then elaborate us agency secrecy final stands between here in these dockets has been public discussion As a obligation. and fulfillment of our reduced to a sham. matter, Park’s mandate practical Overton must reflect that record public means is possibility Even the there to an were made representations what pub for the here record one administrative sup- information so that relevant agency for the Com lic and court another representations refuting or those porting “in know” intolera mission and those brought to the attention may be may have been the law ble. Whatever participating reviewing by persons courts can be no doubt that past,118 there now This course is obvious- agency proceedings. the promul to treat implicit in the decision if are made to ly foreclosed communications in an as “final” event gation of rules agency itself agency secret and an as ongoing of administration is process presented. disclose the information does not sumption judgment an act of reasoned where, here, Moreover, justi- an agency occurred, assumption has an further fies actions reference to infor- a body the existence contemplates failing file while mation documents, comments, tran material — the substance of other relevant in- disclose scripts, in various forms and statements it, a presented formation that has been policy119 declaring agency expertise presume court reviewing cannot judgment —with to which such reference acted Pre- agency properly, Citizens to material, Against this “the was exercised. Park, Volpe, supra, Inc. v. serve Overton full record was before administrative 415, 419-420, 814; S.Ct. see he the time made his agency official] [an Davis, Law K. Administrative of the Seven- decision,” Preserve Citizens to Overton Park, ties at 317 but must treat the 11.00 Volpe, supra, Inc. v. 401 U.S. at agency’s justifications as a fictional account obligation of this decisionmaking process court test the actions of the Commission of the actual *42 Nathanson, legislative history Probing of the Mind the Adminis of the Administra- The Hearing imply of tive Act has been read to trator: Variations Standards Procedure thing there is no such as an administrative Review the Administrative Pro Judicial Under See, Statutes, rulemaking. g., record in informal e. U.S. Federal 75 cedure Act Other Co Justice, Dept, 721, Attorney (1975). Depart of Manual on General’s lum.L.Rev. 754-755 Justice, apparent the Act Administrative Procedure 31 these of accord with ment (“section 4(b) require rules, views, does not the formulation relied on own the Commission’s upon of the exclusive basis of ‘record’ be defined administrative record to which the rulemaking proceedings”). comments, made in informal reply and not the comments concluded; similarly Act, Professor Nathanson has arguing Administrative Procedure parte Sangamon were inval- the ex contacts provisions Section 553’s notice-and-comment remand br. of the United States on id. See [originally] were conceived of as instruments 5-10, Supreme Sangamon administrator, espe- the Court for cially from the education of the States, Valley Corp. 106 questions policy; Television v. United there is not the 30, (1959). slightest U.S.App.D.C. purpose 221 also 269 F.2d See indication that of the Verkuil, proceeding Judicial Rulemak- notice-and-comment velop was to de- Review Informal 185, (1974). reviewing ing, a record which a court Va.L.Rev. 202-205 60 validity could test the of the rule which the precise is still a 119. record content finally adopted. Administrator Compare dispute. some Recommen- matter of Apparently, underlying assumption an 74-4 of Administrative dation Conference the APA draftsmen was that factual is- States, printed in 3 United Recommenda- pertinent challenge became in a sues which Reports the Administrative Confer- tions and validity to the of a section 553 rule would be (1974), with States 48-52 ence of Pederson, United judicial pro- in the first instance in resolved ceedings Rule- Formal and Informal Records proceedings in enforcement —either 38, (1975). making, Yale 64-65 85 L.J. * * * enjoin or in suits to enforcement.
55
critique
agen-
allows adversarial
of the
arbitrary.
find its actions
perforce
must
Washington,
v.
one of the
Ruppert
F.Supp.
cy
perhaps
ways
but is
few
order,
what
aff’d
(D.D.C.1973),
public may
apprised
capacity
it
in its
as a
agency
F.2d
thinks
knows
U.S.App.D.C.
expert opinion.121 From a
repository of
in this
record
The failure
standpoint, we see no difference
functional
information
to disclose all the
proceeding
expert opin-
of fact and
between assertions
to the
is not the
made available
Commission
here,
and that
public,
ion tendered
if the
we find here. Even
only inadequacy
each
generated
internally
agency:
in an
had disclosed to this court
biased, inaccurate,
incomplete—
may be
parte,
what was said to it ex
substance of
failings which adversary
comment
il-
judge
the truth of
would still be difficult
Indeed,
for bias in
potential
luminate.
asserted
it knew
what
private presentations
rulemakings
industry
because we
about
private claims to a val-
“conflicting
resolve
not have the benefit of an adversari-
privilege,” Sangamon Valley
Televi-
uable
among
parties.
The im-
al discussion
States,
Corp.
sion
United
proper
of such discussion to the
portance
App.D.C. at
269 F.2d at
seems to us
agency decisionmaking
functioning
greater
than in cases where we have re-
judicial
processes
review
is evident
for failure to disclose inter-
agencies
versed
insisted,
for exam-
our cases.120 We have
nal studies. We do not understand
agency
information in
files or con-
ple,
by the
rulemaking
procedures
adopted
agency
which the
has iden-
reports
sultants’
Commission to be inconsistent with these
be dis-
proceeding
tified as relevant
procedures provide
those
for a
views since
for adversarial
com-
parties
closed to the
dialogue among
parties through
interested
agencies
have
Similarly,
required
ment.
comment,
reply-comment,
for
pro-
provisions
thinking
out their
in notices of
to set
subsequent
argument.122
oral
What we
rulemaking.
requirement
This
posed
at---,
U.S.App.D.C.
(e)
filing
120. See 185
For time limits for
motions
supra.
filing
time
or re-
extension of
comments
F.2d at
comments,
146(b).
ply
see §
(1975). Substantially similar
47 C.F.R.
1.415
§
example
agency
121. For an
disclosure of
Valley
Sangamon
rules were construed in
Tele-
expertise
proposed rulemaking,
in a notice of
States,
Corp.
vision
v. United
Fund,
EPA,
see Environmental Defense
Inc. v.
U.S.App.D.C. at
at 224-
269 F.2d
U.S.App.D.C.
548 F.2d
parte
prohibit ex
communications since
matter,
communications,
practical
such
as a
which no
constituted additional comments for
provide in
122. The Commission’s rules
relevant
authority
specific
granted. See 47
had been
part:
1.415(d) (1975).
Sanga-
At
time of
§
C.F.R.
mon, however,
replies.
1.415 Comments
rules and
Commission’s
(a)
proposed
making
After notice of
rule
cause,”
practice required
good
showing
“a
issued, the
will afford interested
269 F.2d at
*43
opportunity
participate
persons an
to
approval
request
additional com-
of a
to submit
through
making proceeding
submission
rule
language,
In the absence of this
ments.
given
data, views,
arguments,
of written
with or
apparent
long-standing
the
Commission
opportunity
present
the same
without
interpretation
parte
of its own rules to allow ex
orally
any
manner.
contacts,
see Geller br. at
the inference that
(b)
provided
A
time will be’
for
reasonable
the
has violated its own rules is
Commission
súpport of or in
submission of comments in
easy
draw from the rather
in-
less
obvious
rules,
proposed
opposition to
and the time
consistency
published
the
between
rules’ strict
provided
specified in
will be
the notice of
practice
for comment and the actual
timetable
making.
proposed rule
allowing
any
comment at
time. Nonethe-
(c)
provided
less,
be
practice
announcing
A reasonable time will
the
Commission’s
filing
reply
original
reply-comment
comments in
to the
com-
a relaxation in its comment and
ments,
provided
speci-
through
cryptic phrase,
reaching
and the time
will be
the
“[i]n
matter,
proposed
making.
may
fied in the notice of
rule
a decision in this
(d)
No additional comments
be filed
informa-
take into account
other relevant
it,”
specifically requested
by
unless
or authorized
tion before
35 FCC 2d at
JA
certainly
spirit
poli-
inconsistent with the
of the
the Commission.
im-
question
be no
of the
that
there could
Commission,
why the
baffling is
find
do
parte
contacts here. Cer-
recognizes
ready
that
ex
propriety
apparently
Sangamon
the ef-
saps
contacts
in how
availability
private
tainly any ambiguity
proceedings,123 nonethe-
by
removed
ficacy
public
interpreted
the
be
been
should
allowing pub-
practice of
continues the
presidential
less
ac-
congressional
recent
side by
comments to exist
private
lic and
In the
in the Sun-
tions.124
Government
side.
has de-
Act,
example, Congress
shine
United
policy
“the
of the
clared
be
inconsist
important
is the
Equally
to the
that
entitled
public
States
notions
with fundamental
ency
secrecy
regarding
information
practicable
fullest
and with
process
in due
implicit
of fairness
Federal
decisionmaking processes of the
decisionmaking on the
the ideal of reasoned
2, Government,”
§
Pub.L.No.
undergirds all of our adminis
merits which
13, 1976), and has taken
(Sept.
Stat.
recog
inconsistency was
This
trative law.
parte contacts in
ex
steps
guard against
Sangamon,
would have
we
nized
Perhaps
agency
proceedings.125
formal
there
thought
principles
announced
closely
is Executive Order
point
more
on
clearly
proceeding
the instant
governed
so
reason,
opin-
cy
requirements
this
we do not
our
Freedom of
124. For
think
disclosure
Dixon,
Act,
(1970),
552(a)(2)(B)
(Alabama)
5 U.S.C.
Inc. v.
§
Information
ion in Courtaulds
give
public
understanding
U.S.App.D.C.
an
which seek to
should
V. BROADCAST SUBSCRIPTION addition, In years foreign language old.132 TELEVISION longer films are no covered the rules and subscription showing the criterion for this court ren years ago Over six years three to ten old has been modi- films supra, dered its decision in NATO when a fied to allow exhibition convention- respects subscription in all broad affirming market present al broadcaster in the holds a promulgated cast television rules right contractual to exhibit the film. The Fourth Order.131 Commission’s prohibiting subscription rule exhibition of subscription That unlike the broad inquiry, programming133 series has been dropped. review, was based on cast rules here under modified; sports rules have been also trial generated two-year elaborate data however, one here challenges sports no television in Hart subscription broadcast applied rules as subscription broadcast ford, appears Since NATO Connecticut. television. few, subscription if broadcast sta any, that on a begun operation tions have commercial We turn first to the feature film rules. basis, the best informa consequently ample There is sup- evidence the record general
tion available about the effect of porting conclusion the Commission’s on conventional subscription television they before are films televised “[f]ew broadcasting Report. is that in the Fourth old, years years three and most are four or essentially Because of these static factual older before their first telecast.” First Re- circumstances, inappropriate it would be 52 FCC 2d at JA port us to now of the overall reopen questions particular, we note the extensive rationality anti-siphoning they rules as surveys program suppliers pertain subscription broadcast television suggest average age of films and, result, agree as a with number of is over five shown on broadcast television only question for re petitioners years.134 Therefore Commission’s fur- rationality here of the amend period subscrip- view ther that the conclusion broadcast televi subscription ments to tion of feature films could be ex- viewing in Dockets 18397 and years sion rules announced tended to three from date of release broadcasting further hold that fore- exhibition affecting 19554. We NATO without (1968); U.S.App. presumptively 2d 131. 15 FCC see 185 as by unsuitable for or unwanted at-, 20-21, supra. television, D.C. F.2d at not clear it is how practical much difference there would be be- Originally freely only films shown could operational impacts tween the of the two rules. years general until two after release. Id. at years 597. Films over ten old could be shown type program 133. “No series with intercon- per consulting once month without the Com- plot substantially nected the same cast of if mission. Id. Other films could be shown principal characters shall be broadcast.” Id. at they Commission was convinced either that had offered been to broadcast they refused or that were unsuitable for broad- present 134. See JA 555-562. Id. Since the effect of the cast use. of films rules is to delineate certain classes proceedings the further had the benefit of reasonable. We clearly films of feature Nonetheless, as no supra. set in Part IV out also agree *47 restricting IV, unlikely sub- be served we said in Part seems have purpose would which could not vaca- require of films will scription parte exhibition that ex information they were under con- because broadcast television siphoned subscription tion of Finally, we do not amendments, broadcaster. tract to a therefore hold and we to for the Commission unreasonable think it effect may remain in the amendments for broad- categorize other films unsuitable segment in this our final order pending language and through foreign casting the case. challenger rules. Even after-ten-years only demon- rules, Metromedia, could these VI. CONCLUSION of older films were percent strate that dis- the various issues resolution of Our broadcasting.135 Because suitable through opinion I V of this in Parts cussed only a small constitute protected films to be dispositions: following require pool, a blan- the total available fraction of use these subscription prohibition ket regulations adopted in the (1) The of over- questions raise serious films would and Order, (1975), FCC 2d 1 and Report unwilling to re- Finally, we are breadth. in the Memoran- regulations adopted line-drawing performed by the Com- view Order, 23 dum FCC 2d Opinion and petitioner can demonstrate mission unless as (1970), they apply are set aside insofar drawn, example ten-year lines cable television.138 unreasonable, no having age, patently are. regulations adopted Memo- (2) The in the underlying regulatory relationship Order, 54 2d 797 and FCC Opinion randum problem. (1975), set are aside. deletion We affirm Commission’s also (3) repeal regulations The announced rule. programming The Com- series Order,-FCC Report Second Report in its Second mission’s discussion 2d-, Reg.2d (1975), F is 35 P & - Radio -, Order, 35 P & F FCC 2d in all respects. affirmed (1975), JA concludes Reg.2d Radio existing in the program now that conditions review the Com- (4) petitions The industry adequate supply production are its pay refusal cable fea- mission’s to waive cable and con- series for both programming rules, in In re Home ture film announced use, a conclusion which ventional broadcast Office, Inc., 2d Box 51 FCC by public com- agree amply supported dismissed as moot. Further, ments.136 we indicated in dis- (5) Report in the First adopted rules, the re- cussing series Order, supra, insofar as are affirmed completely op- a policy strictions reflect subscription broadcast televi- they apply posed adopted contemporaneously to that proceedings or- subject to the further sion proceedings Time Access Rules Prime supra. dered in Part IV have could not been af- consequently hereby (6) The Commission is ordered explanation firmed without a more detailed set proceedings undertake additional proffered.137 than the has so far Commission out IV supra. in Part sup- record Although amply hereby or- further ports subscription amendments, in Dock- proceedings can- dered to terminate its rule these amendments program exclusivity) (concerning not be until this et 20402 finally approved court has Argument 135. See First of Oral before JA 1184-1187. at JA Docket 52 FCC 2d supra. See, g., See also note 5 e. Joint Columbia Comments Industries, al., Inc., et Pictures Docket 890-893; 23, 1975), Transcript (May supra. at 3-6 JA 138. note 27 (406 field” communications of this the issuance days within 1874), the Chief declared his Justice order.139 position view the Commission’s ordered. So the open- of even strained “the outer limits jurisdiction pervasive ended and WEIGEL, Judge, concurring: District evolved of the Commission by decisions I wish opinion, joining the court’s In 1874.) (Id. courts.” Com- view that the Federal emphasize the view, program my Commission control power lacks munications well goes beyond cablecasting content of *48 originating programs control content those outer limits. pro- cablecasters. Such the studios of in of sig- involve neither retransmission grams filed Concurring by Cir- Opinion Specially the air from conventional received over nals Judge cuit MacKINNON. broadcasting nor transmission television MacKINNON, Judge, concurring Circuit frequencies. broadcasting over specially: users television sets are offered to They accept are free to or on terms the users following special con- Belatedly, I file
reject. currence. be any seems me that if there could It to rulemaking proceeding particular This this justifying spe- interest governmental by broad- began petitions with a number of it is an interest which censorship, cies of reconsideration earlier cast interests for empowered the Commis- Congress has that certain requested Docket and orders cablecasting, to assert. In relation to sion nature existing highly rules of a restrictive potential is power fraught so with programming. applied cablecasting be to all First Amendment impingement upon for responded with: The Commission should not sanctioned rights be in Making Proposed Rule Notice of implication. All announced. hereby Docket 19554 v. in South- holdings The United States to file writ- persons are invited interested Co., 157, western Cable S.Ct. making propos- U.S. on the ten comments rule (1968), United States L.Ed.2d September als on or before Corp., Midwest befpre v. Video September on or reply comment (1972), 32 L.Ed.2d other 29,1972. reaching decision ... line, in their when read and measured cases matter, may take in this each, in seem to particular on the facts me relevant informa- any into account other the views here to be consistent with ex- it, in to the com- tion before addition pressed. ments invited this Notice. notice, J.A. This includ- Burger, concurring 35 FCC 2d
Mr. Chief Justice Midwest, may upheld ing provision “the Commission the result relevant infor- any take into other account regulating systems action CATV written mation ... addition extensive use of television broadcast- made comments,” the initiation opinion, after constituted signals. noting In his ing be as informal what known questions of ex- has come presented] that “case 553(b).1 Un- difficulty sensitivity rulemaking, in the under U.S.C. traordinary § time, place, (1) na- supra. of the a statement 139. See note 4 making proceedings; ture rule authority (2) legal under reference provides: 553(b) (1970) 5 U.S.C. § proposed; rule is which the proposed making rule notice of General the terms or substance of either Register, published Federal shall be subjects proposed description rule or persons subject unless thereto named and issues involved. personally served or otherwise and either hearing required by Except when notice or thereof in accordance with have actual notice statute, apply— does not subsection shall include— law. notice may reasonably or who is or employee rulemaking, der informal in the expected to be involved decisional with the required comply not be proceeding, process rulemaking 556 and sections procedural requirements to discuss matters relat- should 557, which, according provisions “refus[e] ing [rulemaking of a disposition to the (c), 553(b) apply to situations section any proceeding] private interested to be required statute rules are where any attorney agent an for party, or record, after opportunity made on to. the deci- prior [agency’s] such party, hearing. category latter agency an * * Executive sion Order rulemaking, refers formal agency action parte If ex contacts supra, at 1041. adjudication required pertains and also occur, think that nonetheless determined the record by statute to be summary or a written document hearing an agency after opportunity placed must be oral communication (see 554(b)). section each rulemak- public file established to Preserve Overton Recently, Citizens after immediately the commu- ing docket Park, Volpe, Inc. par- so interested nication is received dealing a case 28 L.Ed.2d thereon. ties comment *49 rulemaking, Supreme with informal -, 567 F.2d at that where there was a statuto- Court held rule proper I this is agree ry findings pre- that certain requirement apply rulemaking to in this case because the specific action cede administrative and competitive involved interests undeniably made, findings had not been “the full ad- and great monetary of value conferred that was ministrative record before the Sec- advantages on vast preferential segments decision,” he at the time made his retary to the industry of detriment had to be of other business The competing interests. the reviewing made available to court. an adjudication rule as was in effect issued opin- To the extent that our Per Curiam parties rights of the of vis-a- respective upon ion Park its support relies Overton to that is nature vis each other. And since parte decision as to ex communications in controversy that we are case and case, my exceeding it is view that it is limited, deciding opinion our and to which is the authority it cites because here there is I would it that that is all we are make clear no statutory requirement specific find- deciding. excessively not make an I would ings regulations nor are the limited to the broad statement to include dictum that full opinion administrative record. And our could to cover the entire interpreted up follows this excessive reliance on Over- rulemaking. universe informal There of ton Park an of by overly broad statement are where the many applica- so situations particularly the rule. I refer to the follow- inappro- tion of rule would be such a broad ing: priate paint we should not with such a proposed rulemaking 555(b), a notice of has Once broad brush.2 In addition section act, issued, however, entire any agency official which to the authorizes applies been Presentations, rules, (A) interpretative general to state- Written § 6.02. Consulta- tions, policy, agency organiza- and Conferences or rules of ments of tion, or oral with procedure, practice; Informal written consultation or or advisory parties or with affected committees (B) agency good when the cause finds mainstay rule-making procedure. is of (and incorporates finding and a brief principal requirement “op- The of the APA is of reasons in the rules statement therefor portunity participate making rule issued) public procedure that notice and data, views, through written submission of or impracticable, unnecessary, are or thereon arguments opportunity with or without contrary public to the interest. present orally any in the same manner.” Culp Adminis- Professor Kenneth Davis his “opportunity Model State Act calls for (1958) points out some of trative Law Treatise orally writing.” or submit data or views advantages rulemaking of informal and its may process many The consultative take scope: wide or forms. The administrator staff member possible rules talk over with selected ceeding, interlocutory, summary, whether respon- with all parties to confer interested otherwise, with or connection or employees agency: sible . agency function. orderly as . far conduct So n an interested I permits, 555(b). Specifically, business 5 U.S.C. § an or appear agency before clauses above person may opening restate for the our to restrict responsible employees presen- quoted provision opinion its e., i. us, tation, facts the case before adjustment, or determination to the issue, substantially follows: controversy pro- or in a read request, an upon singly tually complete parties, by telephone person, reliance conferences or in enabling by systematically formally hearings groups, and ar- than as a means rather ranged parties participate or interviews or in con- in the rule- conferences affected making process. period nection contacts occasioned with fortuitous of time the Over a developed pro- To one set of rules System other business. frame Federal Reserve informal confer- the ICC once conducted 89 and conference. . cedure consultation 1,740 repre- individuals ences attended senting 1,286 replies to come from letters Outside views carriers; to frame another set out, orally the Board sends through sent interviewer an Usually put statements conferences. representatives fifteen to talk states carriers, writing stenographic report of and a confer- state commis- motor sions, members of Frequently, interchange is made. ences companies, of insurance executives mimeo- data and views facilitated brokers, agents and then and insurance them, graphing both within without later conferences were held with committees representing flexible, thorough, procedure staff. The industry, in- the bus the truck knowledge adapted bringing of an ex- dustry, insurance associations. Some- rule-making agency upon pert bear ” times consultation collaboration in involves problems, fair. . . . planning drafting, rep- as when technical Attorney gener- General’s Committee shipping companies cooperate resentatives of *50 practice concerning “The alized conferences: of with technicians the Customs Bureau holding parties interested of conferences of preparing concerning construction of rule-making introduces an in connection with Emergency vessels. The provided Price Control Act part give-and-take of those of on the element issuing regulation “before present an those and affords assurance shall, . or order . . the Administrator points and of that their evidence attendance practicable, far as with so advise and consult As a are known and will be considered. view representative industry. members of the permitting private procedure interests rule-making process participate is as in the it parties When are too and numerous individu- may adequate as a formal be as definite may representative, organi- be als not some hearing. parties are suffi- the interested If supplies zation often what is For needed. ciently and are not too numerous or known instance, “regular in the FCC contacts are presented problems too hostile to discuss the maintained with well-established trade asso- advantages over have evident conferences hearings ciations and some licensees and carriers. If knowledge development of involving problem matter an radio a aviation understanding.” consideration, example, under the Com- superiority of the over the conference employee invariably mission communicates hearing convincingly a described has been Radio, representative awith of Aeronautical “Let it be assumed too commentator: Inc., non-profit cooperative association significant protec- easily hearings are leading transpor- air members are the whose against To a tion bureaucratic absolutism. the Commission is tation lines. Whenever hearing precedent administrator slothful promulgation regulations considering the of God-given opportunity regulation be a carriers, dealing always common at- thought. He need to avoid work tempts cooperation of State to obtain impassively judicial countenance listen with regulatory National Associa- bodies forget he heard. is the and then all has It of and Utilities Commissioners tion Railroad give take conference with ideas the Amateur . in most circumstances information, possibilities of with its detailed Relay League Associ- Radio and the National points exploration minor and hidden cor- effectively rep- can ation Broadcasters which the mind to action. More- Attorney ners over, stirs membership.” resent their demonstrably admiringly situations there described General’s Committee anything hearings produce if little rule-making where of the Board of methods System: value.” of the Federal Reserve Governors 6.02, Davis, practice espe- Treatise Law 1 K. Administrative “The Board ... (footnotes omitted). cially noteworthy pp. 363-365 of the Board’s vir- because rulemaking proposed notice aOnce competing will involve issued
been privilege3 a valuable claims
private competing business treatment
selective . value monetary great
interests
etc. in this statements other are several
There broad are too opinion our
section of pre- to the similarly limited
and should us. currently before of case
cise type CORPORATION, RAIL
CONSOLIDATED
Petitioner, of America and STATES
UNITED Commission,
Interstate Commerce
Respondents, America, Inc.,
Grocery Manufacturers al.,
et Intervenors. 75-2089.
No. Court Appeals,
United States of Columbia
District Circuit. Dec.
Argued *51 April
Decided 22, 1977. April
Rehearing Denied 14, 1977. Nov. Denied
Certiorari
See States, Valley Corp. Sangamon v. United Television F.2d