Association of Maximum Service Telecasters v. Federal Communications Commission

853 F.2d 973, 272 U.S. App. D.C. 42
Court of Appeals for the D.C. Circuit·Decided August 9, 1988·No. No. 85-1258·Published·Cited by 1 cases

Opinion

STARR, Circuit Judge:

This case is before us a second time. It involves federal regulation of “television receivers” and, more specifically, what constitutes a “receiver” so as to fall within the federal regulatory ambit. We previously remanded the record to the Federal Communications Commission for a clarification as to the scope and breadth of its order. Having now satisfied ourselves, in view of the Commission's subsequent statement, that the issues initially raised by the petition for review have not been rendered moot, we now proceed to resolve the merits. For the reasons that follow, we uphold the FCC and deny the petition for review.

I

The pertinent facts have been set forth in our earlier opinion, Association of Maximum Service Telecasters v. FCC, 791 F.2d 207 (D.C.Cir.1986), and can thus be briefly summarized. At issue is the applicability of FCC regulations promulgated pursuant to the All-Channel Receiver Act of 1962, 47 U.S.C. § 303(s) (1982). The regulations, in brief, require television receivers to be capable of receiving all FCC-allocated television frequencies. The operative language of section 303(s) grants the Commission “authority to require that apparatus designed to receive television pictures broadcast simultaneously with sound be capable of adequately receiving all frequencies allocated by the Commission to television broadcasting____” 47 U.S.C. § 303(s). Pursuant to this authority, the FCC promulgated 47 C.F.R. §§ 15.65(a) and 15.4(g) (1985), which essentially track the statutory language.1

In 1981, Sanyo Manufacturing Corporation began producing a “Specific Signal Display Device” (“SSDD”), intended for use with home computers, video games, video tape recorders, and cable television systems. Unlike ordinary television receivers, the SSDD is capable of receiving only two VHF frequencies (channels 3 and 4) which are necessary for it to function with cable television. Because the SSDD is not capable of receiving all FCC-allocated frequencies, Sanyo requested a waiver from the Commission’s all-channel regulations so it could market the device in this country. In response, the FCC ruled that the SSDD did not fall within the ambit of its all-channel regulations and that a waiver was therefore unnecessary. The FCC interpreted the statutory language to apply only to devices that are “intended for reception of over-the-air signals.” Memorandum Opinion and Order (“Order”), FCC 84-261 at 4 (released July 20, 1984), Joint Appendix (“J.A.”) at 24. Since the SSDD was not intended to receive over-the-air signals (other than cable), the statute was held to be inapplicable.

Displeased by the FCC’s pro-Sanyo interpretation, the Association of Maximum Service Telecasters (“Association”) sought review. The Association contends that the Act’s language requires any device, such as the SSDD, “capable” of receiving television pictures broadcast simultaneously with sound to meet the statutory requirements. The FCC, in contrast, argues that the Act applies only to devices “intended” to receive over-the-air signals.

This challenge thus presents the familiar situation of a question of statutory interpretation, to be resolved under the principles enunciated by the Supreme Court in Chevron USA, Inc. v. NRDC, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) and its progeny. Those principles, mandating a two-step inquiry, are by now well understood. In the first step, the interpreting court focuses on whether Congress’ intent is clear as to the precise question at issue. To do so, we employ “traditional tools of statutory construction.” Immigration and Naturalization Service v. Cardoza-Fonseca, 480 U.S. 421, 107 S.Ct. 1207, 1221, [45]*4594 L.Ed.2d 434 (1987) (citing Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. at 2782 n. 9). If, through this exercise, we determine that “Congress had an intention on the precise question at issue, that intention is the law and must be given effect.” Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. at 2782 n. 9.

The reason undergirding Chevron’s Step One is to be found in democratic theory; judicial deference to agencies is, upon reflection, but one form of obedience to the will of the legislative body. The fundamental principle in our polity, even in the modern administrative state, is not deference, but the rule of law. Thus it is that in the non-bank bank case, the Supreme Court reminded us that “[t]he traditional deference courts pay to agency interpretation is not to be applied to alter the clearly expressed intent of Congress.” Board of Governors, FRS v. Dimension Financial Corp., 474 U.S. 361, 368, 106 S.Ct. 681, 686, 88 L.Ed.2d 691 (1986).

That, then, brings us to reminding the reader of Chevron’s Step Two: If we determine that “the statute is silent or ambiguous with respect to the specific issue, the question ... is whether the agency’s answer is based on a permissible construction of the statute.” Chevron, 467 U.S. at 843, 104 S.Ct. at 2782.

II

The Association argues that the meaning of the All-Channel Receiver Act is plain and clear. Its argument runs as follows: section 303(s) requires that all television receivers receive all television channels. Moreover, the statute requires any device with the “capability” of receiving television pictures broadcast simultaneously with sound to be equipped with the capability to receive all channels. The “capability” of the device is the determinative factor in assessing whether the apparatus is “designed” to fall within the Act’s reach. Because the SSDD is capable of receiving only two channels, the Association maintains, it violates the Act.

We hasten to observe that both parties are in accord that the critical statutory language for our purposes is the phrase “[a device] designed to receive television pictures broadcast simultaneously with sound,” 47 U.S.C. § 303(s); 47 C.F.R. § 15.4(a) (emphasis added). Brief for Petitioners at 12; Brief for FCC at 2-3. The Association argues that a device is “designed” to be a particular apparatus if it is technically “capable” of having the specific features that are characteristics of that apparatus. In the Association’s view, the FCC contravened this clear language, as well as violating the underlying legislative intent to ensure uniformity in the broadcast reception arena.

As to the nature of the device itself, the Association attacks the FCC’s position that the SSDD is more analogous to a monitor than to a television receiver. The SSDD, we are told, is technologically similar to a traditional television receiver; it contains a tuner, oscillator, and other standard receiver items.

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Association of Maximum Service Telecasters v. Federal Communications Commission, 853 F.2d 973, 272 U.S. App. D.C. 42 (D.C. Cir. 1988).

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