Opinion ID: 524251
Heading Depth: 3
Heading Rank: 2

Heading: Reasonableness of FCC Interpretation.

Text: 61 As we have determined that Congress has neither unambiguously defined satellite terminal station, nor precisely addressed the question of who may own and operate earth stations that are not operationally connected with one or more terrestrial systems, our responsibility shifts to ensuring that the Commission's construction of the Act is a reasonable one, Chevron, 467 U.S. at 845, 104 S.Ct. at 2783, that is, one that is rational and consistent with the statute. United Food & Commercial Workers Union, Local 23, 484 U.S. at ----, 108 S.Ct. at 421. In order to determine the reasonableness of its interpretation, we look both to the agency's textual analysis (broadly defined, including where appropriate resort to legislative history) and to the compatibility of that interpretation with the Congressional purposes informing the measure. Continental Air Lines v. Dep't of Transp., 843 F.2d 1444, 1449 (D.C.Cir.1988). 62
63 In arguing that Congress intentionally provided in Section 201(c)(7) for the continued Title III licensing of stations that are not operationally connected with a carrier's terrestrial network, the Commission contends that the statute clearly contemplates [such a] category of earth station. Brief for Respondent at 20. Though it later admits that Congress could not in 1962 have envisioned the possibility of licensing small, private earth stations, id. at 24, it need not have contemplated precisely this circumstance. If Congress intended the operationally connected language to limit the scope of Section 201(c)(7), it need only to have contemplated the possibility that future technology might produce some sort of earth stations that were not operationally connected to a terrestrial communication systems. In that light, we inquire whether the Act will reasonably permit the resolution reached by the Commission. It appears to us that the Commission's reading of the statute, avoiding as it does the negation of the operationally connected language, is a wholly reasonable construction of the Act. Cf. Reiter v. Sonotone Corp., 442 U.S. 330, 339, 99 S.Ct. 2326, 2331, 60 L.Ed.2d 931 (1979) (In construing a statute [courts] are obliged to give effect, if possible, to every word Congress used.). Given that the Commission's interpretation of the Act need not be the best or most natural in order to be sustained, we will not casually sweep aside the Commission's reasonable interpretation. 64 Petitioners maintain that to sustain the Commission's interpretation of the Act would be tantamount to remov[ing] Sec. 201(c)(7) from the Satellite Act by administrative fiat.... If Sec. 201(c)(7) had never been enacted, then the FCC would have had the same discretion it claims this section was intended to confer. Joint Brief of Petitioners at 31-32 (citation omitted). Although one isolated sentence in the ruling may lend support to petitioners' argument, 13 we must nevertheless disagree. We do not understand the ruling to affect the FCC's authority to license satellite terminal stations to Comsat and the other carriers or to determine whether that authority might extend to licensing to other entities. 14 65 Petitioners further argue that the Commission's construction of the statute is undermined by the 1978 Amendments to the Satellite Act pertaining to the International Maritime Satellite organization (INMARSAT). International Maritime Satellite Telecommunications Act of 1978, 47 U.S.C. Secs. 751-57 (1982). In that Act, which established United States participation in a separate international consortium encompassing maritime as opposed to land-based satellite communications, Congress explicitly vested in the FCC authority to license ownership of satellite earth terminal stations by persons other than the corporation at any time the Commission determined that such additional ownership will enhance the provision of maritime satellite services in the public interest. 47 U.S.C. Sec. 752(f) (1982). Thus, argue petitioners, Congress consciously distinguishes between Inmarsat and Intelsat stations in authorizing non-carrier ownership of the former, but not the latter. Joint Brief of Petitioners at 38. Petitioners' argument simply assigns too great a negative implication to the amendment. Congress may have intended that distinction, or it may simply have been responding explicitly in the later Act to technological information not available in 1962. It may also have seen insufficient reason to amend the Satellite Act by adding an authority which its language did not preclude. Since, even read in the light most favorably to the petitioners' position, the INMARSAT amendments are at best ambiguous, if not silent, on the question before us, petitioners' argument here does nothing to shake the foundations of the Chevron analysis heretofore set forth, and the Commission's interpretation will stand. 15 66
67 In enacting the Satellite Act, Congress was quite forthright in promoting development of the then-nascent satellite telecommunications industry. Section 102 of the Act well expresses Congress's overriding goals: improved global communications responsive to public need, 47 U.S.C. Sec. 701(a), promotion of new and expanded services, id. Sec. 701(b), and the injection of maximum competition with the widest possible participation by private enterprise, id. Sec. 701(c). See also id. Sec. 721(c)(1) (FCC shall insure effective competition). Similar considerations are evident in Congress's decision to permit the carriers, along with Comsat, to own earth stations. Expressed most often were three fundamental aims: enhanced system-wide coordination, improved competition, and maximized FCC flexibility in questions of ownership. Congress believed that allowing the carriers to share in the ownership of earth stations would advance these objectives. 16 See S.Rep. No. 1584, supra, at 12-13, 1962 U.S.Code Cong. & Admin.News, 2274 (the FCC will take into account all relevant technological, economic, operating, and policy factors ... which are related to public interest ... in making its determination as to whom it will authorize to operate the ground stations). Cf. 47 U.S.C. Sec. 157 (It shall be the policy of the United States to encourage the provision of new technologies and services to the public.). We cannot conclude that the injection of non-carrier ownership does violence to any of these congressional aims. 68 There is no doubting that Congress contemplated that these broad objectives would be carried out by the corporation and the common carriers. But the Declaratory Order noted, as have we, that [t]here is no indication that Congress conceived of the private, non-common carrier, transmit/receive earth stations under consideration here. Declaratory Order, 3 FCC Rcd at 1587 para. 17. It further observed that Congress likewise was unable to conceive of direct-to-user transmissions, or that earth stations might be small and inexpensive enough for use on customer premises. Id. at 1588. The Commission believed these considerations were crucial in determining the inapplicability of Section 201(c)(7). We cannot call this unreasonable. 69 In discerning the compatibility of the FCC's interpretation with congressional purposes, it is important to note that when, in 1962, Congress was considering the Satellite Act, there existed in the United States two operational earth stations, one owned by AT & T and another owned by IT & T. 17 Congress was advised that such earth stations could only be constructed at costs of as much as four to six million dollars. See Communications Satellite Legislation: Hearings on S. 2650 and S. 2814 Before the Comm. on Aeronautical and Space Sciences, 87th Cong., 2d Sess., 301 (1962) (statement of Henri G. Busignies of International Telephone & Telegraph Corp.) (four to six million for high capacity earth stations; one to two million for hypothesized low capacity stations); id. at 66 (statement of Morton J. Stoller of the National Aeronautic and Space Administration) (completed earth station costs run over 5 million). We believe that deference is particularly apt in the present case, where the relative infancy of the satellite industry, together with the discretion vested by Congress in the Commission to grant licenses when warranted by public interest, convenience, and necessity, 47 U.S.C. Sec. 307, evidence a congressional delegation of interpretive authority to the FCC. See generally Note, Coring the Seedless Grape: A Reinterpretation of Chevron U.S.A. Inc. v. NRDC, 87 Colum.L.Rev. 986, 998 (1987) (discussing factors to be considered in determining whether Congress has vested policymaking authority in agency). 70 Petitioners contend that the FCC's technology theory is belied by the legislative history's reference to mobile stations, which, petitioners correctly observe, did not exist in 1962. Joint Brief of Petitioners at 25. See S.Rep. No. 1584, supra, at 14, 1962 U.S.Code Cong. & Admin.News, 2275. We are unmoved. A representative of IT & T specifically informed Congress that it was presently developing and constructing two mobile ground stations. Communications Satellite Legislation: Hearings on S. 2650 and S. 2814 Before the Comm. on Aeronautical and Space Sciences, 87th Cong., 2d Sess., 289 (1962) (statement of Henri G. Busignies of International Telephone & Telegraph Corp.). Thus, Congress was aware of this emerging technology in 1962. The same cannot be said of the type of stations involved in the present case. 71
72 Petitioners contend that the FCC's interpretation is entitled to little or no deference because the agency has reversed a long-standing precedent without a reasoned analysis. Joint Brief of Petitioners at 16 (citations omitted). In determining the reasonableness of an agency's construction, the Supreme Court has identified the consistency with which an agency interpretation has been applied as a relevant consideration. United Food & Commercial Workers Union, Local 23, 484 U.S. at ---- n. 20, 108 S.Ct. at 421 n. 20. See also Bowen v. American Hospital Ass'n, 476 U.S. 610, 646, 106 S.Ct. 2101, 2122, 90 L.Ed.2d 584 (1986) (The fact that the agency's interpretation 'has been neither consistent nor long-standing ... substantially diminishes the deference to be given [its] present interpretation of the statute.' ) (quoting Southeastern Community College v. Davis, 442 U.S. 397, 412 n. 11, 99 S.Ct. 2361, 2370 n. 11, 60 L.Ed.2d 980 (1979)). In this regard, it is true, as petitioners point out, that the FCC has previously stated that [t]he Satellite Act limits the ownership of earth stations to the carriers and Comsat. Second Report and Order, Proposed Modification of the Commission's Authorized User Policy Concerning Access to the International Satellite Services of the Communications Satellite Corporation, 100 F.C.C.2d 177, 200 n. 39 (1985). Accord Memorandum Opinion and Statement of Policy, Authorized Entities and Authorized Users, 4 F.C.C.2d 421, 424 (1966). It is also true that in the past the Commission has equated earth station with satellite terminal station. See, e.g., Ownership and Operation of Earth Stations, 5 F.C.C.2d 812, 814 (1966); Receive Only, FCC 86-214, at 4 n. 6 (May 19, 1986). Given that the FCC has never been asked, nor purported to speak to the question of non-carrier earth station ownership, the statements were necessarily rendered in different contexts, and, accordingly, were dicta. Thus, petitioners are incorrect in their contention that the FCC has consistently held that an earth station operating with the Intelsat system could [not] be licensed to a non-carrier. Joint Brief of Petitioners at 8 (citation omitted). Far from so holding, the Commission has never before addressed the question. 73 Contrary to petitioners' assertions, the challenged ruling is fully consistent with its analogous Commission precedent. In International Relay, Inc., FCC 84-125 (April 11, 1984), J.A. at 31, for example, the Commission determined that its then-existing earth station ownership policy (which required joint Comsat-carrier ownership) was inapposite to the licensing of earth stations providing the newly devised IBS service, concluding that independent carrier ownership of IBS earth stations does not raise the same issues as raised by multipurpose earth stations. Id. at 8 n. 7, J.A. at 38 n. 7. The Commission clearly indicated that stations providing IBS and multipurpose services warrant differing treatment. The proliferation of IBS earth stations, the Commission concluded, does not raise the same concerns about fragmentation of responsibility and control that prompted our 1966 decision to adopt restrictions against U.S. carriers' individual ownership of U.S. INTELSAT earth stations. Id. at 8, J.A. at 40. The FCC also concluded that independent carrier licensing was consistent with previous Commission decisions favoring the introduction of new and innovative international services. Id. at 10, J.A. at 40 (citation omitted). 74 Petitioners maintain that the present ruling is inconsistent with International Relaybecause in that case the Commission concluded that IBS stations are, indeed, earth stations within the definition of the Satellite Act. Joint Brief of Petitioners at 27. Although the Commission licensed the station pursuant to the 1934 Act and Section 201(c) of the Satellite Act, nowhere is the question of applicability of Section 201(c)(7) discussed. See International Relay, supra. Because the applicant (International Relay, Inc.) was a common carrier, it is likely that the issue was not raised. Thus, an equally tenable interpretation is that the Commission ruled only that licensing the station to a carrier would not be inconsistent with Section 201(c)(7) of the Act. As we have stated earlier, we do not understand the challenged ruling to affect the Commission's authority to license earth stations to either Comsat or the carriers. See supra at note 14 and accompanying text. 18 75 The FCC's policy of distinguishing between earth stations that provide multipurpose service and those that do not was recently reaffirmed in its Receive Only ruling. FCC 86-214 (May 19, 1986). The Commission there ruled that the Satellite Act did not proscribe non-carrier ownership of earth stations that merely receive INTELNET I service. Id. at 6. There, as here, the Commission reasoned that Section 201(c)(7) addresses only substantial earth-station facilities, and concluded that Congress simply did not address services such as INTELNET I that are designed for direct-to-user transmission and which, accordingly, contemplate the use of small, receive-only earth stations such as those [being considered]. Id. at 10. 76 Undaunted, petitioners assert that Receive Only constitutes no agency precedent in the instant case, since the present case involves transmit/receive earth stations. Joint Brief of Petitioners at 27 n. 21. While this distinction is real, as far as it goes, nonetheless Receive Only is not without precedential value to the present case. Both International Relay and Receive Only demonstrate the Commission's consistent decisional path of treating earth stations that provide IBS services differently from those that provide multipurpose service, and of interpreting Section 201(c)(7) as governing only earth station facilities that are an integral part of a carrier's domestic network. See also Modification of Policy on Ownership and Operation of U.S. Earth Stations, 100 F.C.C.2d at 269 (distinguishing between technical concerns raised by earth stations providing IBS services and those providing multipurpose service). As such, the Commission's interpretation of the Act in the present ruling is consistent and entitled to deference. Cf. Chevron, 467 U.S. at 863, 104 S.Ct. at 2791 (most recent of varying EPA interpretations of source is permissible and entitled to deference because the agency consistently interpreted it flexibly--not in a sterile textual vacuum, but in the context of implementing policy decisions in a technical and complex area). 77 In short, in the challenged Declaratory Ruling the FCC advanced a reasonable explanation for its conclusion that licensing earth stations to non-common carriers would serve the ... objectives [in question]. Chevron, 467 U.S. at 863, 104 S.Ct. at 2792. Because petitioners' challenge really centers on the wisdom of the agency's policy, rather than whether it is a reasonable choice within a gap left open by Congress, id. at 866, 104 S.Ct. at 2793, their challenge to the Commission's statutory authority to grant licenses to non-common carriers earth stations that are not satellite stations within the meaning of Section 201(c)(7) of the Act must fail. 19 B. Reuters's Particular Circumstances. 78 As we noted earlier, in addition to declaring its statutory authority to license to non-common carriers earth stations that were not satellite stations as defined by Section 103(2) of the Act, the Commission also concluded that the private international earth station Reuters proposed is not a satellite terminal station within the meaning of Section 103(2) or 201(c)(7), and, hence, Reuters is not technically ineligible for earth station ownership. 3 FCC Rcd at 1587 para. 16. Reuters's utilization of AT & T private-line circuits would not, the Commission determined, alter the private nature of its satellite transmission, nor would it alone create the interconnection causing the station to constitute an integral part of the domestic network of a common carrier. Id. 1507 para. 16 & 1589 n. 20. The Commission declined to determine whether granting Reuters a license would be in the public interest, a necessary precondition to obtaining a radio license. 3 FCC Rcd 1588 para. 21. See 47 U.S.C. Sec. 307. 79 Petitioners challenge this aspect of the ruling on several fronts, most of which we have already addressed. We here consider petitioners' objection to the Commission's conclusion that Reuters would not be  'operationally connected'  with a terrestrial communications system because it will lease private-line circuits to connect its computer center with its proposed private earth station. Declaratory Ruling, 3 FCC Rcd at 1587 para. 16. Petitioners maintain that Reuters's  'private'  lines are owned by a common carrier and are an operational part of that carrier's communications network, Joint Brief of Petitioners at 10, and that Reuters actually admitted as much in a letter to the Commission, id. at 11, 20; Reply Brief of Petitioners at 17. 80 Preliminarily, the FCC contends that we should not reach this issue because Reuters' specific communications needs were not pertinent to the Commission's declaratory ruling. Brief for Respondent at 3 n. 2. The Commission argues that because it made no finding that the Reuters system would serve the public interest, any statement by the Commission to the effect that Section 201(c)(7) would not apply to [the Reuters] proposal was merely dictum. Id. at 28 (citation omitted). At oral argument, counsel for the Commission further contended that the discussion of Reuters's circumstances was only by way of example. 81 While we must concede that this aspect of the ruling partakes of two possible readings, it is beyond peradventure that the Commission not only explained its ruling on statutory authority with reference to Reuters's circumstances, but, in one respect, extended it. The Commission concluded not only that [t]he private international earth station proposed by Reuters is not a 'satellite terminal station' under Section 103(2) or 201(c)(7), 3 FCC Rcd at 1587 para. 16, it added the specific conclusion that a non-carrier would not be ineligible to own an earth station just because it would lease private-line circuits from a common carrier. See id. Notwithstanding the Commission's protestations, we will address ourselves to this aspect of the ruling. 82 The controversy focuses on an exchange of letters between the Commission and counsel for Reuters. While it was considering Reuters's request for the declaratory ruling, the FCC inquired as follows: Will Reuters' proposed private earth station be connected to a terrestrial common-carrier network (including a domestic or international private line provided by a U.S. common carrier) in any way? Letter from James L. Ball of FCC to Kenneth E. Hardman (Sept. 12, 1986) (discussing Reuters's request for declaratory ruling), J.A. at 254-55. Reuters responded that the earth station would be interconnected to its news bureaus and picture bureau in various U.S. cities via private line circuits leased from AT & T. Letter from Kenneth E. Hardman and John F. Noble to James L. Ball of FCC (Sept. 19, 1986), J.A. at 257. 83 On this basis petitioners challenge the Commission's conclusion that Reuters would not be operationally connected with a terrestrial communications system. We have already noted that the term terrestrial communications system is nowhere defined in the Act and have determined that the Commission could reasonably conclude that Congress intended to address only those earth stations that are operationally connected with a carrier's domestic network. The Commission, apparently drawing on the difference between private lines and exchange services (those through the public switched network), concluded that Reuters's use of a common carrier-supplied private-line to its proposed private earth station would not make that earth station an integral part of a carrier's domestic common carrier network, Declaratory Ruling, 3 FCC Rcd at 1589 n. 20, and thus, a satellite terminal station within the meaning of the Act. Id. at 1587 para. 16. This conclusion, in light of the Act's ambiguity, and for the reasons we have given above, is reasonable. Nor does it conflict with the Commission's precedent, which, since 1966, has defined the term as referring to the network used by the public. See Memorandum Opinion and Order, Proposed Global Commercial Communications Satellite System, 2 F.C.C.2d 658, 663 (1966) (opining that the term includes the facilities of the terrestrial carriers which pick up traffic from the using public and carry it to the [earth station] and, conversely, receives traffic from the earth station operator for delivery to the public), denying reconsideration in pertinent part, 38 F.C.C. 1104 (1965). 20