The American Civil Liberties Union v. Federal Communications Commission, and United States of America

523 F.2d 1344, 35 Rad. Reg. 2d (P & F) 1, 1975 U.S. App. LEXIS 12750

• Court: Court of Appeals for the Ninth Circuit
• Decided: September 16, 1975
• Docket: 73-2886
• Status: Published

Opinions

OPINION

Before CHAMBERS, TRASK and SNEED, Circuit Judges.

SNEED, Circuit Judge:

The American Civil Liberties Union (ACLU) brings this petition to review two specific aspects of the Federal Communications Commission’s order promulgating rules and regulations pertaining to cable television (CATV) set forth in 36 F.C.C.2d 141 (1972) with the reconsideration appearing in 36 F.C.C.2d 326 (1972). The two aspects challenged are the failure of the Commission (1) to impose common carrier obligations on cable television access channels and (2) to limit cablecasting by the cable owner to one channel. We affirm the order and deny the petition for review.

I.

Jurisdiction and Venue.

Jurisdiction to consider ACLU’s petition rests on 28 U.S.C. § 2342, 28 U.S.C. § 2344, and 47 U.S.C. § 402(a). In an earlier proceeding involving this petition before the Court of Appeals, District of Columbia Circuit, the Commission moved to dismiss the petition as one not timely filed, and, in the alternative, to transfer the petition to this circuit pursuant to 28 U.S.C. § 2112(a) (1970). The Court of Appeals of the District denied the motion to dismiss and transferred the petition to this circuit. 158 U.S. App.D.C. 344, 486 F.2d 411 (1973). Although the Commission suggests that both dispositions be overturned by this court, we declined to do so. A proper concern for promoting an economy of judicial effort, whether that be expressed as the law of the case or otherwise, plainly requires that we not relitigate the issues raised by the Commission in the Court of Appeals of the District.

We take this position even though the circumstances upon which the Court of Appeals of the District relied in granting the Commission’s motion to transfer to this circuit have changed. Specifically, the Commission’s motion under 28 U.S.C. § 2112(a) (1970)¹ was based upon the fact that certain petitions for review “with respect to the same order” previously had been filed in this circuit. The Commission argued that since the proceedings commenced by these petitions were “first instituted” it was the duty of the Court of Appeals of the District to transfer these proceedings to this circuit. This position was adopted by the Court of Appeals of the District. It now appears, however, that these “first instituted” proceedings were remanded to the Commission by this court on the Commission’s motion several months prior to oral argument in this case. We do not believe this defeats our jurisdiction, makes improper venue in this court under 28 U.S.C. § 2343, or requires relitigating the issues of which the Court of Appeals of the District previously disposed. 158 U.S.App.D.C. 344, 486 F.2d 411 (1973). Once a valid transfer pursuant to 28 U.S.C. § 2112(a) (1970) has been accomplished, its validity ordinarily should not be impaired by the subsequent fate of the proceeding “first instituted.” ²

II.

Standing.

The Commission also challenges the standing of the ACLU to bring this petition for review under 5 U.S.C. § 702³ and 28 U.S.C. § 2344.⁴ The ACLU, asserts the Commission, has suffered no legal wrong nor been “adversely affected or aggrieved by agency action.” Assuming that standing to appear before the Commission and standing to seek judicial review of a Commission order are governed by the same standard (an assumption heretofore recognized by the Court of Appeals of the District of Columbia Circuit in Office of Communication of United Church of Christ v. F. C. C., 123 U.S.App.D.C. 328, 359 F.2d 994 (1966), n. 8), the Commission claim comes rather late inasmuch as the ACLU appears to have participated vigorously in the rule-making procedure which led to the order here being reviewed. However, our resolution of the standing issue is not influenced by this delay.

We are guided by the fact that the listening and viewing audience of a station, acting through a legitimate representative, has been accorded standing to intervene before the Commission in that station’s license renewal proceeding. Office of Communication of United Church of Christ v. F. C. C., supra. The interest of the “consumer” was held sufficient to justify standing. Furthermore, we are required to interpret 5 U.S.C. § 702 as did the Supreme Court in Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972). There the Court said that persons have “standing to obtain judicial review of federal agency action under § 10 of the APA [5 U.S.C. § 702] where they had alleged that the challenged action had caused them ‘injury in fact,’ and where the alleged injury was to an interest ‘arguably within the zone of interests to be protected or regulated’ by the statutes that the agencies were claimed to have violated.” Id. at 733, 92 S.Ct. at 1365. The necessity of an “injury in fact,” the Court continued, is not eliminated by the existence of an “interest in a problem,” Id. at 739; one “seeking review must allege facts showing that he is himself adversely affected . . .”. Id. at 740, 92 S.Ct. at 1368.

ACLU, a membership corporation under New York law, in effect alleges that it represents its members who have suffered an injury in fact because of the two aspects of the Commission’s order here being challenged consisting of a failure to maximize the number of sources of programming to be carried by cable television. This injury is plainly within the zone of interests to be protected or regulated, asserts the ACLU, because maximization of sources of programming is “a basic tenet of national communications policy,” First Report and Order on CATV, 20 F.C.C.2d 201, 205 (1969), and consistent with the purposes of the First Amendment.

While these allegations indicate an injury no different from that which would be suffered by all “consumers” of the product of CATV, that alone is not sufficient to preclude standing. See United States v. SCRAP, 412 U.S. 669, 687, 93 S.Ct. 2405, 37 L.Ed.2d 254 (1973). Nor are we prepared to assert that ACLU’s allegations merely restate an “interest in a problem,” viz. the regulation of cable television. The issue before us is different. It is simply whether the record available to us sufficiently demonstrates the existence of the alleged injury. Unlike the situation which exists in many environmental cases, for example, in which the alleged injury is so palpable as to be subject to judicial notice, we here are confronted with circumstances in which the truth of the allegation of injury in fact can only be determined by examining the merits of the asserted claim. If the ACLU’s petition for review is meritorious it follows that its members have suffered an injury in fact. Quite frequently, and perhaps usually, the determination of the truth of the allegation of an injury in fact does not require an examination of the merits of the claim asserted. Under circumstances frequently existing, the issue of standing can be regarded as independent of the merits. Such is not the case here, however.

The result is. that there is no escape from examining the merits. If ACLU’s claim is meritorious, standing exists; if not, standing not only fails but also ceases to be relevant.⁵

III.

The Merits.

A. Mode of Regulation.

All recognize that “Cable television offers the technological and economic potential of an economy of abundance.” 25 F.C.C.2d 38, 39 (1970). This is true because of the large number of channels which it is technologically possible for a single cable system to possess. Systems having no less than 60 channels appear to have been installed, 36 F.C.C.2d 141, 190 (1972), although a “20-channel” system is generally adequate to meet presently foreseeable demand. 46 F.C.C.2d 175, 180 (1974). Carriage of television broadcast signals, the original function of cable systems, cannot absorb all of these channels. The channels not employed in the carriage of television broadcast signals provide the opportunity for the development of a medium of communication not precisely like any with which we are presently familiar. The Report to the President by the Cabinet Committee on Cable Communications (1974) put the prospects this way:

“We believe that cable development has the potential of creating an electronic medium of communications more diverse, more pluralistic, and more open, more like the print and film media than our present broadcast system. It could provide minority groups, ethnic groups, the aged, the young, or people living in the same neighborhood an opportunity to express, and see expressed, their own views. Yet it would also enable all of these groups to be exposed to the views of others, free of the homogeneity which characterizes contemporary television programming.” Id. at 15.

Future prospects are not present reality, however. A period of growth and development is needed. The Commission in the order here challenged attempted to establish, in its words, “a basic framework within which we may measure cable’s technological promise, assess its role in our nationwide scheme of communications, and learn how to adapt its potential for energetic growth to serve the public.” 36 F.C.C.2d at 189.

The envisioned “basic framework” requires the allocation of the available channels between the carriage of television broadcast signals, 47 CFR §§ 76.51— 76.55, origination cablecasting (under certain circumstances) on “one or more designated channels,” 47 CFR § 76.201, and so-called “access channel” use, 47 CFR § 76.251. The “access channels” consist of at least one “public access channel,” “education access channel,” and “local government access channel,” and such “leased access channels” as the system permits. 47 CFR § 76.251(a)(4), (5), (6), (7).

Public access channels must be subject to rules requiring first-come non-diseriminatory access.⁶ 47 CFR § 76.251(a)(ll). At least one public access channel must be made available without charge. However, a charge for production costs of live studio presentations exceeding five minutes may be assessed. 47 CFR § 76.251(a)(10)(ii). The presentation of commercial and political advertising is prohibited, 47 CFR § 76.251(a)(ll)(i).

Education access channels, available for use by local educational authorities,⁷ must be offered free of charge for at least five years after the completion of the system’s basic trunk line. 47 CFR § 76.251(a)(10)(i). Commercial and political advertising are also barred. 47 CFR § 76.251(a)(ll)(ii).

Local government access channels, available for use for local government purposes, also must be offered free of charge during the same period as is applicable to education access channels. 47 CFR § 76.251(a)(10)(i). No restrictions on advertising are imposed.

Leased access channels must be subject to rules requiring first-come non-discriminatory access, sponsorship identification, an appropriate rate schedule, and permitting public inspection of a record of the names and addresses of those requesting time. 47 CFR § 76.-251(a)(ll)(iii). There exist no restrictions on the level of charges that may be imposed. 46 F.C.C.2d 175, 185-6, 199-200 (1974).

Each of the above types of channels, other than local government channels, may not present lottery information or obscene or indecent matter. 47 CFR § 76.251(a)(ll)(i), (ii), and (iii). No other restrictions, other than those relating to commercial and political advertising, on program content exist.

The Commission recognizes that this mode of regulation is interim in nature. 36 F.C.C.2d 194 (1972); 46 F.C.C.2d 175, 184r-5 (1974). Access channels pose many issues which the Commission does not believe its present experience enables it to deal with satisfactorily. Its approach, as reflected by the regulatory structure here sketched, is to impose relatively few restrictions on the use of access channels and await the results of the private ordering which time and experience will provide. Specifically, it recognizes that while common carrier status may become an appropriate regulatory structure in the future, the present is better served by rules which allow the forces of the- market place to function freely.⁸ Rate regulation in the absence of experience it believes would be detrimental to the development of cable television.

B. ACLU’s Position.

The ACLU’s position is fundamentally different from that of the Commission. The ACLU wishes to have access channels treated as common carriers and regulated in the manner provided by Sub-chapter II of the Communications Act of 1934. 47 U.S.C. §§ 201-222. Consistent with this objective, the ACLU urges that origination cablecasting by cable system owners be limited to one channel rather than to “one or more” channels as the challenged regulations permit.

ACLU asserts that a cable system regulated in this manner would (1) more completely guard against unreasonable discrimination in providing access to channels, (2) provide tariffs for use of access channels setting forth maximum and minimum charges, (3) secure the availability of access channels “upon reasonable request therefor” (47 U.S.C. § 201(a)), and (4) prevent the cable system operator from preempting the bulk of the revenues which the use of the access channels would generate. The consequences of such regulation would be to maximize the sources of programming asserts the ACLU.

This is not a position without merit. Access channels, from a technological point of view, could function as common carriers.⁹ The Cabinet Committee on Cable Communications, moreover, in its Report to the President (1974) recommended that following a transition period the control of cable distribution facilities be separated from control of programming. Report, p. 29. Cross-subsidization of the programs of the owner of the cable system at the expense of other users of the system was a danger which the Cabinet Committee sought to avoid by its recommendation. The ACLU would serve the same purpose by its proposals. On the other hand, the Cabinet Committee recommended against regulation by any governmental authority of the prices charged to subscribers and channel users. Report, p. 38. The ACLU’s position requires just such regulation.

The Commission, with commendable candor, has recognized the merits of the ACLU position. It was rejected as being “premature.” 36 F.C.C.2d 197 (1972). In lieu thereof, the Commission fashioned its regulations to provide an incentive to the cable system operator to originate material attractive to subscribers and to avoid constraints on experimentation and innovation. 36 F.C.C.2d 352 (1972).

C. Disposition on the Merits.

It is not for this court to substitute its judgment for that of the Commission. The position taken by the Commission is a rational choice and does not represent arbitrary and capricious action. Substantial evidence supports its decision. To prevail, the ACLU must demonstrate that adoption of its proposals is required by the statute from which the Commission derives its authority to regulate CATV. This it cannot do.

The question of the authority of the Commission to regulate CATV was an open one until the Supreme Court spoke in United States v. Southwestern Cable Co., 392 U.S. 157, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968). In dealing with a challenge to the Commission’s authority to regulate CATV, which at that time served only the dual functions of improving reception of local stations and transmitting the signals of distant stations, the Court held that the Commission’s authority rested on the Communications Act of 1934, 47 U.S.C. §§ 152(a) and 303(r). Neither provision specifically addresses the problems of CATV, whatever its form or technological complexity. Both are general and expansive in tone and scope. Thus, § 152(a) commences with the words “The provisions of this chapter shall apply to all interstate and foreign communication by wire or radio .”, and § 303(r) provides that the Commission shall have authority to “Make such rules and regulations and prescribe such restrictions and conditions, not inconsistent with law, as may be necessary to carry out the provisions of this chapter . . . ”. Notwithstanding this generality, earlier doubts by the Commission of its authority to regulate, 26 F.C.C. 403, 427-31 (1959), and an attempt by the Commission to have Congress enact legislation specifically granting such authority, the Court recognized that § 152(a) vested the Commission with such authority as is “reasonably ancillary to the effective performance of the Commission’s various responsibilities for the regulation of television broadcasting.” 392 U.S. at 178, 88 S.Ct. at 2005. This authority is not subject to the precise restrictions imposed by either Subchapter II of the 1934 Act, dealing with common carriers, or Sub-chapter III, dealing with broadcasters.

This source of jurisdiction was again recognized by the Court in United States v. Midwest Video Corp., 406 U.S. 649, 92 S.Ct. 1860, 32 L.Ed.2d 390 (1971) when it held that the Commission’s program initiation rule, now in 47 CFR § 76.201(a), was “reasonably ancillary to the effective performance of [its] various responsibilities for the regulation of television broadcasting.” 406 U.S. at 663, 92 S.Ct. at 1868. At no point did the Court either in the plurality, concurring, or dissenting opinion, hold or suggest that CATV, even when its dual functions recognized in Southwestern Cable Co. are augmented by required origination cablecasting, is subject to the exclusive governance of either Subchapter II or III.

These two decisions are the markers by which we must be guided. Together they indicate that the Commission’s authority to regulate CATV is very broad and not circumscribed by the rules of Subchapters II and III. More precisely, we believe, and so hold, that the Commission’s failure to impose common carrier obligations on access channels and its imposition of the rules above described are actions “reasonably ancillary to the effective performance of [its] various responsibilities for the regulation of television broadcasting.” To hold otherwise would ignore the history of the Commission’s efforts to regulate CATV, be contrary to the unmistakable teaching of the Supreme Court, and indicate a conviction on our part that the ACLU is right in insisting on common carrier status now which we do not possess.

While our holding is not dependent upon such decisions as Frontier Broadcasting Company v. Collier, 24 F.C.C. 251 (1958) and Philadelphia Television Broadcasting Co. v. F. C. C., 123 U.S.App.D.C. 298, 359 F.2d 282 (1956), which asserted or held that the Commission was not required to regulate CATV under Subchapter II, we do regard these decisions as historically instructive. The evolution of CATV regulation under the authority described in Southwestern Cable Co. and Midwest Video Corp. should not at this late date be governed by Sub-chapter II simply because access channels, a portion of a cable system’s capacity, possess technical characteristics which make possible their regulation as a common carrier. We, like the Court of Appeals of the District of Columbia Circuit, believe that the Commission must be accorded flexibility in dealing with CATV and that its jurisdiction should not be “rigidly compartmentalized into ‘licensing’ and ‘public utility regulation’ functions.” Buckeye Cablevision, Inc. v. F. C. C., 128 U.S.App.D.C. 262, 267, 387 F.2d 220, 225, n. 19 (1967). The task of reducing this flexibility, if such is to be done, more properly belongs to the Congress than to the courts. This view is strengthened, rather than weakened, by the fact that the present regulatory structure of cable television may be the result of a compromise reached by the affected industries and adopted by the Commission which some find objectionable on one ground or another.¹⁰

In sum, the Commission has authority to promulgate the regulations of which the ACLU complains and the future of these regulations to impose common carrier status on access channels and to limit cablecasting by the cable owner to one channel is neither arbitrary nor capricious.

Affirmed.

1 . 28 U.S.C. § 2112(a) reads in part as follows:

. If proceedings have been instituted in two or more courts of appeals with respect to the same order the agency, board, commission, or officer concerned shall file the record in that one of such courts in which a proceeding with respect to such order was first instituted. The other courts in which such proceedings are pending shall thereupon transfer them to the court of appeals in which the record has been filed. For the convenience of the parties in the interest of justice such court may thereafter transfer all the proceedings with respect to such order to any other court of appeals.

2 . This case is distinguishable from Valley Vision Inc. v. F. C. C., 399 F.2d 511 (9th Cir. 1968) in which this court returned to the Court of Appeals of the District a case previously transferred to it by that court. The re-transfer was on the ground that 47 U.S.C. § 402(b)(7) vested in the Court of Appeals of the District exclusive jurisdiction of appeals from cease and desist orders of the Commission. The appeal here is based on 47 U.S.C. § 402(a) and not § 402(b).

The court in which proceedings “are first instituted,” of course, may transfer the proceedings to any other court of appeals “for the convenience of the parties in the interest of justice.” 28 U.S.C. § 2112(a), supra, n. 1.

3 . A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof. Pub.L. 89-554, Sept. 6, 1966, 80 Stat. 392, 5 U.S.C. § 702.

4 . § 2344. Review of orders; time; notice; contents of petition; service.

On the entry of a final order reviewable under this chapter, the agency shall promptly give notice thereof by service or publication in accordance with its rules. Any party aggrieved by the final order may, within 60 days after its entry, file a petition to review the order in the court of appeals wherein venue lies. The action shall be against the United States. The petition shall contain a concise statement of—

(1) the nature of the proceedings as to which review is sought;

(2) the facts on which venue is based;

(3) the grounds on which relief is sought; and

(4) the relief prayed.

The petitioner shall attach to the petition, as exhibits, copies of the order, report, or decision of the agency. The clerk shall serve a true copy of the petition on the agency and on the Attorney General by registered mail, with request for a return receipt. Added Pub.L. 89-554, § 4(e), Sept. 6, 1966, 80 Stat. 622. 28 U.S.C. § 2344.

5 . Judge Trask, in dissenting, takes us to task for “avoiding” the standing issue. We do not believe we have done so. Our view is that this is not the type of case in which it is possible to say that even though ACLU might be right on the merits (viz. that FCC improperly failed to maximize the number of sources of programs to be carried by cable television) it has no standing. Rather we are convinced that if ACLU is right on the merits the requisites of standing exist. We do not read Warth v. Seldin, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975) to be contrary. While the Supreme Court in that case may have enhanced the vigor of the requirement that there be a “distinct and palpable injury” to the party seeking standing, it did not overrule United States v. SCRAP, supra and Sierra Club v. Morton, supra. Judge Trask appears to believe that even if ACLU is right on the merits, the injury to its members is not sufficiently distinct and palpable to warrant standing. We disagree. Standing is not limited to those showing “economic harm.” In passing, it is interesting to observe how closely Judge Trask in his analysis of standing comes to discussing the merits.

6 . The Commission has recognized that reservation of public access channel time on a long-term basis is permissible so long as this does not unreasonably exclude the occasional programmer from access to desirable time slots. 46 F.C.C.2d 175, 183 (1974).

7 . This embraces more than the local public school board. “Any bona fide educational interest should have access to the educational channel.” 46 F.C.C.2d 175, 185. Commercial educational enterprises are excluded, however. Id.

8 . 46 F.C.C.2d 175, 185.

9 . See the definition of a common carrier set forth in Frontier Broadcasting Co. v. Collier, 24 F.C.C. 251, 254 (1958).

10 . See Nole, Peck, McGowan, Economic Aspects of Television Regulation, 179-82, 205-07 (1973).