Opinion ID: 2976711
Heading Depth: 3
Heading Rank: 1

Heading: The FCC’s Authority to Issue the Order

Text: At the outset, petitioners contest the FCC’s underlying authority to promulgate rules implementing section 621(a)(1) of the Communications Act. Petitioners maintain that the FCC exceeded the bounds of its authority when it adopted the Order because Congress never explicitly 7 ACM, NAC, and NATOA filed petitions for review on April 3, 2007 with the United States Courts of Appeals for the Sixth, Third, and Fourth Circuits, respectively. ACD, USCM, and NLC filed petitions for review on May 17, 2007 with the United States Court of Appeals for the D.C. Circuit. Nos. 07-3391/3569/3570/3571/3572/3573/ Alliance for Community Media Page 8 3574/3673/3674/3675/3676/3677/3824 v. FCC or implicitly delegated power to the FCC to interpret section 621(a)(1). In contrast, the FCC insists that it undoubtedly possesses the requisite authority to implement the Order and that petitioners’ argument “rest[s] on a fundamental misunderstanding of the statutory scheme.” (Respondent’s Br. 21.) In support of its jurisdictional argument, petitioners emphasize that nowhere in the plain language of section 621(a)(1) does any reference to the Commission appear. Turning to the text, section 621(a)(1) reads as follows: (a) Authority to award franchises; public rights-of-way and easements; equal access to service; time for provision of service; assurances (1) A franchising authority may award, in accordance with the provisions of this subchapter, 1 or more franchises within its jurisdiction; except that a franchising authority may not grant an exclusive franchise and may not unreasonably refuse to award an additional competitive franchise. Any applicant whose application for a second franchise has been denied by a final decision of the franchising authority may appeal such final decision pursuant to the provisions of section 555 of this title for failure to comply with this subsection. 47 U.S.C. § 541(a)(1) (emphasis added). Petitioners are thus correct in noting that, while the text expressly references franchising authorities, it is silent as to the agency’s role in the process of awarding cable franchises. Where petitioners’ argument falls short, however, is in equating the omission of the agency from section 621(a)(1) with an absence of rulemaking authority. In AT&T Corp. v. Iowa Utilities Board, 525 U.S. 366 (1999), the Supreme Court considered a challenge by state utility commissions and local exchange carriers to local competition rules issued by the FCC pursuant to the Telecommunications Act of 1996. In considering whether the FCC possessed the regulatory authority to interpret the provisions of the Telecommunications Act of 1996 at issue, the Court hinged its analysis on section 201(b), a 1938 amendment to the Communications Act of 1934. AT&T Corp., 525 U.S. at 377. Section 201(b) provides, in relevant part, that “[t]he Commission may prescribe such rules and regulations as may be necessary in the public interest to carry out the provisions of this Act.” 47 U.S.C. § 201(b). The Court reasoned that “[s]ince Congress expressly directed that the 1996 Act, along with its local-competition provisions, be inserted into the Communications Act of 1934 . . . the Commission’s rulemaking authority would seem to extend to implementation of the local competition provisions.” AT&T Corp., 525 U.S. at 377-78. In other words, AT&T Corp. espoused a plain reading of section 201(b): “We think that the grant in § 201(b) means what it says: The FCC has rulemaking authority to carry out the ‘provisions of this Act,’ which include §§ 251 and 252, added by the Telecommunications Act of 1996.” Id. at 378. We find that the logic of AT&T Corp. controls the disposition of the jurisdictional argument petitioners raise here. Just as Congress ratified the Telecommunications Act of 1996 as an amendment to be incorporated into the original Communications Act of 1934, Congress likewise passed the Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102385, 106 Stat. 1460, which revised section 621(a)(1) to include the bar on unreasonable refusals to award additional franchises, as an amendment to the original Communications Act of 1934. Through this process of amendment, Congress incorporated section 621(a)(1) into the Communications Act of 1934, and the statutory language at issue here thus qualifies as a Nos. 07-3391/3569/3570/3571/3572/3573/ Alliance for Community Media Page 9 3574/3673/3674/3675/3676/3677/3824 v. FCC “provision[] of this Act” within the meaning of section 201(b). Thus, because “the grant in § 201(b) means what it says[,]” we are bound by this plain meaning and thereby conclude that, pursuant to section 201(b), the FCC possesses clear jurisdictional authority to formulate rules and regulations interpreting the contours of section 621(a)(1). See AT&T Corp., 525 U.S. at 378. Locating jurisdictional support for the FCC’s rulemaking in section 201(b) further explains the absence of any reference to the Commission in the language of section 621(a)(1). Facing a similar argument regarding statutory silence with respect to an agency’s rulemaking authority, the Supreme Court underscored that there is an “obvious difference between a statutory requirement . . . and a statutory authorization.” Alaska Dept. of Environmental Conservation v. E.P.A., 540 U.S. 461, 491 (2004) (emphasis in original). In the specific context of the Communications Act, the Court has observed that it is “not peculiar that the [congressionally] mandated regulations should be specifically referenced, whereas regulations permitted pursuant to the Commission’s § 201(b) authority are not.” AT&T Corp., 525 U.S. at 385. Standing alone then, the statutory silence in section 621(a)(1) regarding the agency’s rulemaking power does not divest the agency of its express authority to prescribe rules interpreting that provision. Cases from our sister circuits interpreting section 621 lend further support to our finding of the agency’s jurisdiction here. In City of Chicago v. FCC, 199 F.3d 424, 428 (7th Cir. 1999), for example, the Seventh Circuit squarely addressed the issue of whether the “FCC was . . . granted regulatory authority over 47 U.S.C. § 541, the statute setting out general franchise requirements.” In answering this question, the court explained that “the FCC is charged by Congress with administration of the Cable Act . . . We are not convinced that for some reason the FCC has wellaccepted authority under the Act but lacks authority to interpret § 541 and to determine what systems are exempt from franchising requirements.” City of Chicago, 199 F.3d at 428 (internal citations omitted). Likewise, in National Cable Television Ass’n v. FCC, 33 F.3d 66 (D.C. Cir. 1994), the D.C. Circuit confronted the question of whether the FCC’s interpretation of the franchise requirements set forth in section 621(b)(1) was a reasonable construction of the statute. Although not addressing the jurisdictional question directly, the court concluded that the regulations at issue represented reasonable constructions of section 621(b)(1) and therefore denied the petitions for review. Id. at 75. Implicit in the court’s deference to the FCC’s interpretations was an acknowledgment that the agency possessed the underlying regulatory authority to promulgate rules construing section 621. Thus, our jurisdictional holding today reinforces the conclusions of our sister circuits. As a final jurisdictional challenge, petitioners focus their argument on the availability of judicial review under section 621(a)(1). Immediately after assigning LFAs the task of awarding franchises, the next sentence of section 621(a)(1), by cross-referencing section 635 of Title VI, identifies the courts as the forum for aggrieved cable operators to obtain relief. See 47 U.S.C. § 555(a)(1),(2) (“Any cable operator adversely affected by any final determination made by a franchising authority under section 541(a)(1) . . . of this title may commence an action within 120 days after receiving notice of such determination, which may be brought in (1) the district court of the United States for any judicial district in which the cable system is located; or (2) in any state court of general jurisdiction having jurisdiction over the parties.”). In light of this judicial review provision, petitioners challenge the Order for “ignor[ing] this basic statutory structure . . . [by] in effect, add[ing] a third clause to Section 635(a) that would allow local franchising matters under Section 621(a)(1) to be ruled upon by the FCC.” (Petitioner ACM’s Br. 18; see also Petitioner NCTA’s Br. 24-26; Petitioner Tampa’s Br. 16-17; Petitioner New Jersey’s Br. 16-17.) Petitioners contend that the FCC’s intervention in franchising decisions violates Congressional intent that the courts serve as the only other body with concurrent jurisdiction over section 621(a)(1). By issuing Nos. 07-3391/3569/3570/3571/3572/3573/ Alliance for Community Media Page 10 3574/3673/3674/3675/3676/3677/3824 v. FCC the Order, their argument goes, the FCC has impermissibly encroached on the exclusive role of the courts in providing redress to aggrieved cable operators. In effect, petitioners’ argument calls upon us to determine whether the judicial review provisions in the second part of section 621(a)(1) are exclusive and thereby override the FCC’s exertion of rulemaking authority. Our inquiry leads us to a negative answer: the availability of a judicial remedy for unreasonable denials of competitive franchise applications does not foreclose the agency’s rulemaking authority over section 621(a)(1). While the Order equips LFAs with guidance on reasonable versus unreasonable distribution of franchises, the courts ultimately retain their Congressionally-granted jurisdiction to hear appeals involving denials of competitive franchises. Although the courts may have to grant deference to the Order, this does not in any way impede the courts’ fact-finding or legal analysis during actual judicial proceedings. Our conclusion today that the FCC possesses jurisdiction over section 621(a)(1) coextensive with that of the courts is buttressed by the Supreme Court’s analogous decisions in AT&T Corp. and U.S. v. Haggar Apparel Co., 526 U.S. 380 (1999). In the former case, although the Communications Act specifically provides for judicial review of state commission decisions arbitrating interconnection disputes among telephone companies, 47 U.S.C. § 252(e)(6), the Supreme Court upheld the FCC’s authority to issue rules governing the states’ resolution of such disputes. AT&T Corp., 525 U.S. at 377-85. The Court reasoned that Congress’s “assignment[]” of the adjudicatory task to state commissions did not “logically preclude the [FCC]’s issuance of rules to guide the statecommission judgments.” Id. at 385. Likewise, in Haggar Apparel, a manufacturer of imported clothing brought an action to challenge regulations issued by the United States Customs Service through the notice-and-comment rulemaking process. 526 U.S. at 380. Specifically, the company contested the applicable scope of the rules, arguing that they applied only to customs officers and not to the Court of International Trade in importers’ refund suits. Id. at 386-87. The Court, however, rejected Haggar Apparel’s attempt to release the Court of International Trade from adherence to the rules and ultimately held that “[d]eference can be given to the regulations without impairing the authority of the [Court of International Trade] to make factual determinations, and to apply those determinations to the law, de novo.” Id. at 391. Similarly, in the instant case, we believe that courts can grant deference to the Order while maintaining their Congressionally-granted authority to make factual determinations and provide relief to aggrieved cable operators.