American Broadcasting Companies v. Federal Communications Commission

643 F.2d 818, 207 U.S. App. D.C. 68
CourtCourt of Appeals for the D.C. Circuit
DecidedApril 28, 1980
DocketNo. 78-1968
StatusPublished
Cited by1 cases

This text of 643 F.2d 818 (American Broadcasting Companies v. Federal Communications Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Broadcasting Companies v. Federal Communications Commission, 643 F.2d 818, 207 U.S. App. D.C. 68 (D.C. Cir. 1980).

Opinion

Opinion for the Court filed by Circuit Judge McGOWAN.

McGOWAN, Circuit Judge:

When, despite a contractual agreement not to do so, intervenor Midwestern Relay Co. filed a revised tariff increasing its rates, two of its customers — petitioners ABC and CBS — urged the Federal Communications Commission to reject that tariff. The Commission declined, saying that, “in determining whether Midwestern's tariff revision is unlawful on its face we can give no weight to the mere fact that this revised tariff may conflict with a contract between Midwestern and Petitioners.” 69 F.C.C.2d 409, 413 (1978). Petitioners now seek review of the Commission’s decision. However, since we conclude that the Communications Act of 1934 does not permit communications common carriers to alter by contract the rates they announce in their filed tariffs, we hold that the Commission did not err.

I

Television and radio networks assemble programs and distribute them to their affiliates through communications common carriers. Historically, the American Telephone and Telegraph Company has had much of this business. However, on October 20, 1972, CBS Inc., and on December 22, 1972, American Broadcasting Companies, Inc. (ABC) contracted with Midwestern Relay Company (Midwestern) for “point-to-point microwave network color video transmission service” for an area north of Chicago, Illinois. Both the CBS and the ABC contracts were for an initial service term of five years, both contracts specified terms and charges, and both contracts provided that Midwestern .

shall not of its own volition during the term of this Agreement file any tariff which is inconsistent with the terms of this Agreement. A copy of FCC Tariff No. 1, when filed by [Midwestern] with the Federal Communications Commission, shall be attached hereto and made a part hereof.

J.A. 39, 48. Both contracts further provided that if ABC or CBS terminated the contract for a reason other than Midwestern’s material breach of it, the network would pay Midwestern those non-recoverable capital costs attributable to the contract, as well as a proportion of the unpaid monthly charges for the initial service term. J.A. 39-40, 48-49.

On November 2, 1972, as 47 U.S.C. § 203 requires, Midwestern filed a tariff describing its charges with the Federal Communications Commission. That tariff contained the following provision:

5. Period of Contract
a. The initial contract period for service is five years.
b. A customer may terminate during the initial contract period subject to the payment of termination charges as provided below. After the initial contract period service may be terminated upon six months notice without payment of termination charges.

[70]*70J.A. 23. However, the tariff nowhere reproduced the contract provision which forbade Midwestern to file a tariff inconsistent with the terms of the contract.

Several years after the contract had gone into effect, but before the expiration of the five-year contract period for service, Midwestern came to feel that “extraordinary unforeseeable circumstances” required it to increase the rates that had been specified in the contracts and filed in the tariff. Midwestern stated that it had lost $2,781,000 since beginning its operations and that it anticipated losing $1,208,000 more if it did not adjust its rates. On March 15, 1976, it filed with the Commission a revised tariff incorporating higher charges.

ABC and CBS petitioned the Commission to reject the revised tariff as unlawful on its face, a request the Commission denied on May 11, 1976. 59 F.C.C.2d 477. In doing so, the Commission quoted from its decision in United Video, Inc., 49 F.C.C.2d 878, 880 (1974): “[T]he effective rates, practices, and regulations are those which appear in the carrier’s tariff on file with the Commission and such tariff, the Commission’s Rules, and the Act itself, are applicable as a matter of law, notwithstanding any conflicting provision appearing in the agreement executed by the carrier with its customers.” However, in response to the request of certain of Midwestern’s customers, the Commission suspended the revised tariff schedules until May 15,1976, instituted an investigation into those schedules, and ordered Midwestern to keep a record of all amounts received due to the increase in rates.1

ABC and CBS petitioned for reconsideration, but on July 27, 1978, the Commission denied their petition. 69 F.C.C.2d 290. The Commission noted that, while the Commission may reject tariff revisions which are unlawful, “in determining whether Midwestern’s tariff revision is unlawful on its face we can give no weight to the mere fact that this revised tariff may conflict with a contract between Midwestern and Petitioners.” 69 F.C.C.2d 413. The Commission concluded:

Even if we were to agree with Petitioners that carrier-customer contracts should be allowed to definitively establish rates in some limited areas, we are prevented from so finding as the Communication^ Act . . does not provide for rates to be set in this manner.

69 F.C.C.2d at 418. On September 29,1978, ABC and CBS sought review in this court of the Commission’s decision.

II

This case presents the question whether the Federal Communications Commission may reject as unlawful on its face the revised tariff of a communications common carrier because that tariff would increase the carrier’s rates in violation of a contract between the carrier and two of its customers. Our answer to that question must, of course, be derived from the Communications Act of 1934, 47 U.S.C. § 151 et seq. (1976), under the authority of which the Commission operates.

To understand the purposes of the Communications Act, however, we must look to [71]*71the legislative history of the Interstate Commerce Act of 1887, for the Communications Act borrowed its language and purpose from the Interstate Commerce Act. As both the House and Senate Committees responsible for the Communications Act wrote:

In this bill many provisions are copied verbatim from the Interstate Commerce Act because they apply directly to communication companies doing a common carrier business, but in some paragraphs the language is simplified and clarified. The variances or departures from the text of the Interstate Commerce Act are made for the purpose of clarification in their application to communications, rather than as a manifestation of congressional intent to attain a different objective.2

The Interstate Commerce Act was Congress’s response to widespread and vociferous dissatisfaction with the operation of the country’s railroads. Prominent among the complaints against the railroads was

[t]hat the effect of prevailing policy of railroad management is, by an elaborate system of secret special rates, rebates, drawbacks, and concessions, to foster monopoly, to enrich favored shippers, and to prevent free competition in many lines of trade in which the item of transportation is an important factor.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
643 F.2d 818, 207 U.S. App. D.C. 68, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-broadcasting-companies-v-federal-communications-commission-cadc-1980.