Opinion ID: 391779
Heading Depth: 2
Heading Rank: 2

Heading: The Order Under Review

Text: 26 Following the CML Decision, IBM and Comsat found a third partner to pursue the balanced CML option: Aetna Casualty & Surety Company, through its subsidiary, Aetna Satellite Communications, Inc. Under the agreement each partner has committed $55 million to the enterprise, and may provide additional funds if needed. 37 During the pre-operational phase of the system the three partners will exercise equal control. When the system becomes operational Aetna will have the choice to retain its one-third equity interest in SBS, or to convert a part of that investment to debt. In no event may Aetna's equity interest fall below 15 percent. Major decisions will require the unanimous consent of the partners. 38 27 In December 1975 SBS organized as a partnership and applied to the FCC for a license. Opponents of the license 39 made many objections, 40 but for purposes of this appeal only the antitrust-related objections are significant. In summary, the most important such objections are: 41 (1) that the SBS joint venture eliminates the actual competition that would occur were IBM and Comsat to enter the field individually, or the potential competition that would occur if one of the firms were to enter and the other to be perceived by the industry as a strong potential entrant; (2) that the combined strength of Comsat and IBM would be so great as to raise barriers to entry and to chill competition in the industry; and (3) that IBM could engage in predatory conduct in the satellite industry, the data processing industry, or both. 42 28 The FCC denied an evidentiary hearing into the various objections by SBS's opponents, and granted the license in a lengthy opinion released on February 8, 1977. It explained its reasoning as follows: 29 In sum, we have chosen to dispose of SBS' Applications without a trial-type evidentiary hearing because (1) the benefits to the public of a more rapid institution of service far outweigh any possible benefits of such time-consuming procedures; (2) facts which lend themselves to adduction by oral testimony would not be forthcoming in such proceedings; (3) in ten years of rulemaking and application comment proceedings the issues now before us have been explored in detail and no new material is sought to be placed before us through trial-type evidentiary procedures; (4) we have assumed for the purposes of analysis that the parties' contentions are correct and drawn appropriate inferences therefrom; and (5) in view of the conditions and limitations we are imposing herein, as well as our continuing regulatory supervision and the remedies available to us, we can and will assure that the SBS proposal will serve the public interest. The domestic satellite field remains experimental, and speculation about its future is as tenable through the notice and comment procedures which we have adopted, as it would be in trial-type evidentiary proceedings. In this unique environment, SBS' future actions and conduct, under our close regulatory supervision, will be far more determinative than would speculation in an evidentiary proceeding. 30 SBS Decision, 62 FCC2d at 1068 P 199, JA 1591. With appropriate restrictions, 43 modelled on those in the Domsat II and CML decisions, the FCC granted the proposed construction and operating authority to SBS. The Commission emphasized, however, that (i)f, for any reason, we deem it in the public interest to revisit any of these matters, we will not hesitate to do so. And we so condition our action today. Id. at 1044-1045 P 122, JA 1567-1568. Reconsideration was denied, 64 FCC2d 872 (1977). 31 American Satellite, Western Union, AT&T, and the Department of Justice have appealed the FCC order to this court. The appeal was first heard by a panel of this court, which released on August 29, 1978 a per curiam opinion reversing the Commission. The panel held: (1) that the FCC employed the wrong legal standard in balancing the public interest benefits of the SBS entry against the alleged violations of the antitrust laws, and (2) that the FCC did not adequately justify its failure to hold an evidentiary hearing on the antitrust question in the case. Because of the importance of the issues raised, we voted to rehear the appeal en banc, and vacated the panel opinion. 44 All parties and the amicus curiae have submitted supplemental briefs to assist the en banc court. At our request, their briefs primarily addressed two issues: 32 (1) Whether the case law and the legislative history of Section 11 of the Clayton Act (a) constrain the Court to interpret that provision as imposing an absolute enforcement responsibility on the FCC; or (b) warrant the interpretation of subsection 11(a) as a grant of discretionary enforcement authority, and the interpretation of subsection 11(b) as defining the procedures to be followed whenever such enforcement authority is exercised. 33 (2) Whether, and in what respects, the validity of the FCC's licensing determination is affected by the failure to conduct a full evidentiary hearing on the possibility of an antitrust violation and to review and analyze in depth such considerations. 45 34