Opinion ID: 532957
Heading Depth: 2
Heading Rank: 2

Heading: The Cable Act

Text: 60 The Cable Communications Policy Act of 1984 amended the Communications Act to explicitly grant the FCC a power it had previously only inferred from its general authority to regulate television: the power to regulate cable television. See Pub.L. No. 98-549, Sec. 3(a), 98 Stat. 2801 (1984) (codified at 47 U.S.C. Sec. 152(a)). However, the Act also set some limits on that power, and in particular it provided: 61 (1) Any Federal agency, State, or franchising authority may not impose requirements regarding the provision or content of cable services, except as expressly provided in this subchapter. 62 (2) Paragraph (1) shall not apply to-- 63 (A) any rule, regulation, or order issued under any Federal law, as such rule, regulation, or order (i) was in effect on September 21, 1983, or (ii) may be amended after such date if the rule, regulation, or order as amended is not inconsistent with the express provisions of this subchapter; and 64 (B) any rule, regulation, or order under Title 17. 65 47 U.S.C. Sec. 544(f). 11 The petitioners claim that this section forbids syndex rules. 66 The Commission argues that the legislative history of Sec. 544(f) shows that the term requirements, as used in the section, refers only to affirmative requirements, that is, to rules that a cable station must carry a certain program or channel or type of program or channel, and does not prohibit negative requirements, that is, rules prohibiting cable stations from carrying certain signals. Indeed, the Commission also believes Sec. 544(f), far from prohibiting syndex, actually authorizes it, as a permissible amendment to regulations existing when the Cable Act was passed. See Sec. 544(f)(2). The petitioners call this argument a great many names, the more colorful of which are set out in the margin, 12 but the only argument they offer in return is that the meaning of Sec. 544(f) is clear on its face. Indeed, although they do not specify with precision what they think requirements means, the petitioners claim that section 544(f) forbids syndex regulation so clearly that reference to its legislative history as an aid to construction is impermissible. Brief for Joint Petitioners United Video, Inc., et al. at 29 nn. 42 & 43 (citing United States v. Missouri Pacific R.R., 278 U.S. 269, 278, 49 S.Ct. 133, 136, 73 L.Ed. 322 (1929)). 67 Again applying Chevron's step one, we inquire whether Congress has expressed its intent on the question of whether Sec. 544(f) bars syndex. We first hold that Sec. 544(f) is not so clear that we must ascertain its plain meaning without resort to legislative history. On its face, the section could bear more than one meaning. The phrase requirements regarding the provision or content of cable services could be a broad reference to any regulation that would in any way affect the content of cable services. On the other hand, a content requirement could refer, as the FCC suggests, only to a content that is required, that is, made mandatory. 68 We also note that the Act, in another section, uses the term requirements in a context that strongly suggests an affirmative obligation. Section 531(a) states that a local franchising authority may establish requirements with respect to the designation or use of channel capacity for public, educational, or governmental use, to the extent provided for in Sec. 531. We doubt that Congress meant to give franchising authorities power to restrain the designation of channel capacity for such use; indeed, it hardly seems likely that a franchising authority would ever have occasion to do so. Congress intended, as stated in Sec. 531(b), to give franchising authorities the power to require ... that channel capacity be designated for such use. This parallel use of requirement and require suggests that the word requirement can bear an affirmative-only sense. Of course, other uses of the word requirements in the Cable Act, see also Secs. 544(b)(2), 545(a)(1), do not conclusively determine the meaning of the word in Sec. 544(f), but they do strongly suggest that that section does not clearly compel the petitioners' interpretation. 69 We therefore find a resort to the legislative history entirely appropriate, and that history usefully explains the context in which Congress adopted Sec. 544(f). It had been the practice of local franchising authorities, in granting cable franchises, to specify in great detail the type of facilities that the operator must construct, and also to specify the services that the operator must provide (e.g., Cable News Network, HBO, The Health Channel). H.R.Rep. No. 934, 98th Cong., 2d Sess. 26, reprinted in 1984 U.S.Code Cong. & Admin.News 4655, 4663. Congress determined that local governments should have the power to require particular cable facilities, but the Committee does not believe it is appropriate for government officials to dictate the specific programming to be provided over a cable system. Id. This historical context supports the Commission's belief that when Congress forbade requirements regarding the provision or content of cable services, its concern was with rules requiring cable companies to carry particular programming. 70 However, having consulted the legislative history, we cannot agree with the Commission's contention that, as used in Sec. 544(f), the word requirements was meant to distinguish between affirmative and negative obligations. Some negative rules would probably fall under Sec. 544(f)'s bar. For instance, a local franchising authority's attempt to prohibit the carriage of HBO would likely implicate the same congressional concerns as an attempt to require carriage of HBO. We therefore think Sec. 544(f) would bar such a prohibition. 71 On the other hand, not every affirmative regulation implicates Sec. 544(f). Suppose, for instance, a cable company bidding for a local franchise indicated that it was planning to provide service on only Mondays, Tuesdays, and Wednesdays. If the local franchising authority decided that it would award the franchise only to a cable company that agreed to provide service seven days a week, it would not be, in the words of the House report, dictat[ing] the specific programming to be provided over a cable system, even though the regulation would be affirmative in nature. 72 In short, we think that the affirmative/negative distinction suggested by the Commission fails to capture what Congress meant by the term requirements in Sec. 544(f). Rather, the examples given in the House report suggest that the key is whether a regulation is content-based or content-neutral. Section 544(f), one must note, does not simply forbid requirements; it forbids requirements regarding the provision or content of cable services (emphasis added). The House report suggests that Congress thought a cable company's owners, not government officials, should decide what sorts of programming the company would provide. But it does not suggest a concern with regulations of cable that are not based on the content of cable programming, and do not require that particular programs or types of programs be provided. Such regulations are not requirements regarding the provision or content of cable services. 73 Syndex is clearly different from a requirement or prohibition of the carriage of a particular program or channel. Although it will certainly affect the content of cable programming, it is content-neutral. The basis on which syndex forbids carriage of certain programs is not their content, but ownership of the right to present them. Syndex itself does not require carriage of any particular program or type of program, nor does it prevent a cable company from acquiring the right to present, and presenting, any program. 13 74 We do not mean to suggest that the concept of content neutrality, as developed in first amendment cases, can be freely imported into all cases construing the Communications Act. In this case, however, the history reviewed above explicitly shows that Congress' concern in enacting Sec. 544(f) was with content-based rules. We think it plain that Congress did not intend Sec. 544(f) to forbid syndex. Under Chevron's step one, we think the Commission was bound to say that syndex rules are sufficiently different from the sorts of rules with which Congress was concerned that the statutory phrase requirements regarding the provision or content of cable services does not embrace them. 14 75 Our conclusion that the Commission was correct to read Sec. 544(f) as not prohibiting syndex rules, but not precisely for the reasons it gave, requires us to consider whether we must strike down the rules under the doctrine of SEC v. Chenery Corp., 318 U.S. 80, 63 S.Ct. 454, 87 L.Ed. 626 (1943). Chenery provides that a court can uphold an administrative rule only on the basis of the reasons given for it by the administrative agency. Id. at 87-88, 63 S.Ct. at 459. In this case, we can uphold the rules under Chenery. 76 The purpose of Chenery is to insure that courts do not trespass on agency discretion. If an order is valid only as a determination of policy or judgment which the agency alone is authorized to make and which it has not made, a judicial judgment cannot be made to do service for an administrative judgment.... [A]n appellate court cannot intrude upon the domain which Congress has exclusively entrusted to an administrative agency. Id. at 88, 63 S.Ct. at 459. Chenery also serves to insure that administrative determinations are made with relevant criteria in mind and in a proper procedural manner. Massachusetts Trustees v. United States, 377 U.S. 235, 248, 84 S.Ct. 1236, 1245, 12 L.Ed.2d 268 (1964). Hence, Chenery reversal is not necessary where, as here, the agency has come to a conclusion to which it was bound to come as a matter of law, albeit for the wrong reason, and where, as here, the agency's incorrect reasoning was confined to that discrete question of law and played no part in its discretionary determination. 15 See Massachusetts Trustees, 377 U.S. at 247-48, 84 S.Ct. at 1244-45; G.W. Galloway Co. v. NLRB, 856 F.2d 275, 278 n. 21 (D.C.Cir.1988); Northside Sanitary Landfill, Inc. v. Thomas, 804 F.2d 371, 380 n. 4 (7th Cir.1986); Friendly, Chenery Revisited: Reflections on Reversal and Remand of Administrative Orders, 1969 Duke L.J. 199, 211. Accordingly, we uphold the Commission's conclusion that the Cable Act does not forbid syndex.