Opinion ID: 560450
Heading Depth: 2
Heading Rank: 1

Heading: The Substantial Cause Test

Text: 12 The cable programmers charge that the FCC merely articulated, but did not genuinely apply the substantial cause test when it ruled on Americom's rate increases. Looking to the carrier's side of the test, the programmers fault the Commission for failing to quantify the impact of the unforeseen events (steep inflation, loss of SATCOM F-3, and space shuttle launch schedule delays) on the cost of providing service to the 1988 fixed-term customers. 5 Although the Commission did not endeavor to detail the precise effects of events that would obviously tend to increase Americom's costs, it generally credited Americom's submissions 6 and found them, in the main, sufficient to justify the rate increases. Even with the rate increases, the FCC constantly emphasized, Americom's rate of return remained substantially below its target figure. See 1987 Order, 2 FCC Rcd at 2368. 13 The cable programmers stress that the FCC's 1981 Order rejecting Americom's entire tariff, in contrast to the Commission's 1987 order on rates, required a particularized showing, not merely a generalized assertion, of a connection between rising costs and a proposed change. See Brief for Petitioners Showtime et al. at 24. But the language from the 1981 Order highlighted by the programmers concerned the connection between rising costs and a structural change in the tariff, one that would have prohibited Americom's customers from cancelling service. There was not a plain and certain link, the Commission indicated, between rising costs and Americom's proffered structural changes. There is, however, an altogether evident connection between rising costs and the need for more revenue. 14 Concerning the burden on customers, the FCC emphasized that, offsetting the rate increase, Americom had eliminated the subscriber's liability for early termination of service. Thus, customers could switch to another provider if a more favorable opportunity were available. Americom pointed out that despite new competition, both from other satellites and from new fiber optic technologies, see J.A. at 312-15, and despite elimination of liability for termination of service, its customers largely remained Americom subscribers. 7 Nor did the cable programmers identify any alternative, cheaper transmission service that they might have used instead of Americom's 1988 fixed-term service, had they known that Americom would increase its rates. 15 In essence, the cable programmers would like the court to direct the Commission to apply the substantial cause test to rate increases in a more muscular way. 8 We have no warrant on this record to so instruct the Commission. We recall, in this regard, our own direction to the FCC to use the test as an aid in ascertaining whether newly-filed modifications to [Americom's] long-term service tariffs are within the zone of reasonableness, and not as an additional hurdle that [Americom's] otherwise reasonable new tariff ha[s] to overcome. RCA Communications, Inc. v. FCC, mem. op. at 352, D.C.Cir. No. 81-1558 (July 21, 1982). The FCC's application of the substantial cause test is consistent with the limited role we marked out for that test. RCA American Communications, Inc. v. FCC, mem. op. at 350, D.C.Cir. No. 81-1558 (Mar. 8, 1984). 9