Opinion ID: 202380
Heading Depth: 3
Heading Rank: 1

Heading: Statutory text and the regulatory framework

Text: 13 Charter begins by focusing on the statutory text. It asserts that nowhere in the relevant statutes does Congress expressly state, or by clear implication provide, that § 605 cannot apply to services delivered over a cable network. As a result, Charter contends that it should be allowed to recover from Burdulis and Sánchez under § 605. 14 We, however, believe that the statutory text does make clear that § 605 is not to apply to signals delivered by wire over a cable network. And if there is any doubt, we think that the structure of the regulatory regime provides the necessary clarity. 15 Regarding the statutory text itself, the district court correctly points out that § 605 is noteworthy for its general exclusion of communications by wire or cable. As we discuss below, § 605 does make reference to communications by wire or cable in a few, very limited instances. Most of these instances, however, have no relevance to the instant case. The vast majority of § 605 is devoted to communications by radio. Moreover, Congress clearly understood the difference between communication by radio and communication by wire, as it defined separately the two methods of communication. See, e.g., 47 U.S.C. § 153(33) (defining communication by radio); id. § 153(52) (defining communication by wire). We presume that had Congress meant for communication by wire to be a pivotal part of the § 605 regulatory regime, it would have stated as much. [I]t is a general principle of statutory construction that when Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion. Barnhart v. Sigmon Coal Co., Inc., 534 U.S. 438, 452, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002) (internal quotation marks and citations omitted). The fact that § 605 deals almost exclusively with communication by radio speaks volumes, and we think there was no need for Congress to make specific reference to its general desire to exclude communication[s] by wire from the § 605 regulatory framework. 16 The structure of the regulatory regime in this area also provides convincing evidence that Congress did not intend for § 605 to regulate communications by wire. As the district court relates, Congress devised the regulatory regime in such a way that regulation was to depend on the method of transmission—by radio or by wire. Section 605 deals with communications traveling through the air (via radio), whereas § 553 covers communications traveling over cable wire. The legislative history to § 553 demonstrates conclusively that Congress distinguished between communication[s] by radio and communication[s] by wire in establishing this bifurcated regulatory framework: 17 The Committee intends the phrase service offered over a cable system [in § 553] to limit the applicability of [§ 553] to theft of a service from the point at which it is actually being distributed over a cable system. Thus, situations arising with respect to the reception of services which are transmitted over-the-air (or through another technology), but which are also distributed over a cable system, continue to be subject to resolution under section 605 to the extent reception or interception occurs prior to or not in connection with, distribution of the service over a cable system. 18 H.R.Rep. No. 98-934, at 83 (1984), as reprinted in 1984 U.S.C.C.A.N. 4655, 4720. 19 In this case, the fact that the transmissions were intercepted as they were transmitted via cable, not radio, is dispositive. As the district court relates in the Sánchez Order, [t]he change in form of transmission of the communication, from an airborne signal to a signal traveling over a cable wire, changes the applicability of the statute; when the communication is stolen as it is being transmitted over a cable wire, § 553, not § 605, applies. Given this clear demarcation between the two forms of regulation, there was no need for Congress to state specifically in the statutory text that § 605 does not apply to services delivered over cable. 20 In three different ways, however, Charter contests such a characterization of the statutory text and the regulatory framework—i.e., the notion that § 605 was designed to deal only with radio transmissions and § 553 only with cable transmissions. First, it notes that § 605 contains language referring to wire transmissions —namely, the standing rules in § 605 defining who is entitled to sue for a violation of the statute. Section 605(d)(6) states that the term `any person aggrieved' [referenced in § 605(e)(3)(A)] shall include any person with proprietary rights in the intercepted communication by wire or radio. . . . 47 U.S.C. § 605(d)(6) (emphasis added). Charter asserts that this reference to communication by wire in § 605(d)(6) demonstrates that Congress did indeed intend for § 605 to regulate at least some communication by wire. 21 We reject this argument. Although we can find no definitive guidance regarding Congress's intent in including the reference to communication by wire in § 605(d)(6), we note that the report accompanying the 1988 amendment that added § 605(d)(6) indicated that the purpose of the section was, in part, expanding standing to sue. H.R.Rep. No. 100-887(II), at 28 (1988), as reprinted in 1988 U.S.C.C.A.N. 5577, 5657. The relevant portion of the legislative history reads as follows: 22 Section 5 of the [Satellite Home Viewer Act of 1988] amends [§ 605] of the Communications Act pertaining to the piracy of satellite cable programming. The Committee's amendment is intended to deter piracy practices by (1) stiffening applicable civil and criminal penalties, (2) expanding standing to sue, and (3) making the manufacture, sale, modification . . . of devices or equipment with knowledge that its primary purpose is to assist in unauthorized decryption of satellite cable programming expressly actionable as a criminal act. 23 Id. (emphasis added). 24 The resulting legislation expand[ed] standing to sue because it affirmed the right of cable operators who transmitted communications to consumers via wire or cable to sue for unauthorized interceptions of radio or satellite communications. What drove the legislation was the understanding that a transmission emanating from a satellite potentially made several intermediate stops before reaching the ultimate consumer. We see Congressional recognition of this fact, for example, in § 605(d)(1), where Congress defined satellite cable programming as video programming which is transmitted via satellite and which is primarily intended for the direct receipt by cable operators for their retransmission to cable subscribers. 9 See also id. at 11, 1988 U.S.C.C.A.N. at 5639-40 (Cable systems pay satellite carriers a per subscriber fee for delivering to the system a broadcast signal; the systems then send out the signal over the wire to their subscribers.). 25 Under such a conception of the telecommunications process, the cable operator stands to lose just as the satellite owner does if the satellite transmission is stolen. The cable operator, after all, loses out on a potential customer if the transmission is intercepted. Had the cable pirate not stolen the transmission, he or she may very well have doled out the money to purchase cable from the cable operator. 26 What Charter fails to grasp is that if the cable operator does decide to sue by taking advantage of the standing rules articulated in § 605(d)(6), the substantive law that is applied is § 605, not § 553. In other words, § 605(d)(6) does expand[] standing to sue and allows cable operators to sue regarding a theft of communications that occurred before the communications ever reached them. However, this does not mean that Congress is regulating, via § 605, communications by wire. What is being regulated is the theft of radio or satellite signals. As such, Charter's argument that § 605 regulates the theft of cable signals is incorrect. 27 In its second attempt to break down the wall Congress created between radio and cable communications, Charter notes how federal courts in the early 1980s, when confronting the sale and use of illegal cable descramblers, held apparently unanimously that § 605 applied to radio signals transmitted over a cable network. Charter may be correct that federal courts in the early 1980s did apply § 605 to radio signals transmitted over a cable network. This, however, was a function of the fact that at the time, there existed a gap in the regulation of theft of cable services. As the district court correctly points out, the adoption of the Omnibus Crime Control and Safe Streets Act of 1968 (Crime Control Act), Pub.L. No. 90-351, 82 Stat. 197, removed most references to wire (cable) transmissions in § 605, leaving § 605 to apply only to radio transmissions. Moreover, § 553 had not yet been enacted. Thus, courts in the early 1980s, in the absence of any explicit and tailored regulatory framework, were in essence compelled to use § 605 as a means of preventing the theft of cable services. With, however, the adoption of § 553 in 1984 in the Cable Communications Policy Act, Congress provided a new regulatory framework that courts could use to combat the theft of cable services, and courts were no longer bound to rely on § 605 to deal with the problem. Thus, Charter's reliance on certain federal court decisions from the early 1980s—all of which, incidentally, predate the passage of § 553—is misplaced. 10 28 In Charter's final attempt to show that § 605 does apply to certain aspects of communication[s] by wire, it contests the district court's conclusion that the anti-theft protections in § 553 for wire communications would be largely unnecessary if § 605 applied to radio signals over a cable network. Charter states that even with § 605 applying to radio signals over a cable network, the anti-theft protections in § 553 would play a specific and important role. According to Charter, § 605, with its standing rules, only allows cable operators to sue for interceptions of satellite cable programming, including radio-based signals over a cable television network. 11 Section 605, however, provides no protection against theft of non-video services that can travel over cable—for example, services such as private line data transmission and at-home shopping and banking. To Charter, Congress enacted § 553 specifically to deal with the theft of these non-video services. 29 We disagree with this characterization of the regulatory framework. We believe that § 553 was intended to play a much more significant role in the regulatory scheme than in the mere protection of non-video services. Although non-video services such as private line data transmission and at-home shopping and banking are commonplace today, in 1984, when Congress passed the Cable Communications Policy Act and enacted § 553 and reenacted § 605, such non-video services were restricted to a tiny subset of the population. See H.R.Rep. No. 98-934, at 28 (1984), as reprinted in 1984 U.S.C.C.A.N. at 4665 (noting, for example, that private line data services are in their infancy and that private line data services are only a small fraction of the current data transmission market). What was more in the forefront of Congress's collective mind was the threat posed by the theft of traditional video cable services. See id. at 83, 1984 U.S.C.C.A.N. at 4720 (stating that the House Energy and Commerce Committee was extremely concerned about the theft of cable services and noting that the theft of cable services poses a major threat to the economic viability of cable operators and cable programmers). It makes no sense that Congress would go out of its way to come up with an entirely new regulatory regime (in the form of § 553) to combat what at the time was only a limited threat. In fact, the legislative history indicates clearly that this was not Congress's intention. See id. at 60, 1984 U.S.C.C.A.N. at 4697 (noting that at the time of the enactment of the Cable Communications Policy Act in 1984, several proceedings were then underway to determine the regulatory treatment of non-cable services provided over cable systems, such as data transmission and private-line voice services). Rather, we believe that Congress, in enacting § 553, was attempting to create a comprehensive regulatory regime covering the theft of all communications transmitted over a wire or cable—something that had largely been unregulated since the enactment of the Crime Control Act in 1968 and the removal of most references to communications by wire from § 605. In TKR Cable Co. v. Cable City Corp., 267 F.3d 196 (3d Cir.2001), and United States v. Norris, 88 F.3d 462 (7th Cir.1996), the Third and Seventh Circuits, respectively, supported such an interpretation. As the district court correctly noted, the evidence is overwhelming that Congress intended § 553 to address the serious, widespread problem of cable piracy, not a microscopically small range of conduct. 30 Since § 553 was enacted to combat the theft of all communication[s] by wire, and not merely non-video services that can travel over cable, we think that the provisions of § 553 were intended by Congress to be the primary protections for cable communications. We agree with the district court that such protections would be superfluous if § 605 also provided protection to certain communication[s] by wire.