Court Opinion

ID: 6984780
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:51:22.428909+00
Date Added: 2024-06-11T16:09:23.015903
License: Public Domain

ILANA DIAMOND ROVNER, Circuit Judge,
dissenting.
If the FCC had unfettered authority to decide whether ECI is a cable operator, I would, in all likelihood, be joining my two colleagues today. Judge Evans makes a compelling case for the legitimacy of the FCC’s judgment on this question. But the FCC’s discretion is limited by the terms of the statute; only if there are ambiguities or gaps in those provisions may the FCC substitute its own judgment for that of the Congress. In this case, I find the statutory language to be so plain as to foreclose the FCC’s rationale and conclusion, and for that reason I respectfully dissent.
As the majority points out, to qualify as a “cable operator,” a company must either (A) provide service over a “cable system” in which it “owns a significant interest” or (B) it must “otherwise control[ ] or [be] responsible for, through any arrangement, the management and operation of such a cable system.” 47 U.S.C.A. § 522(5) (Supp.1999). There can be no real doubt that ECI qualifies as a cable operator under either of these two prongs.
ECI owns a “significant interest” in the cable system at issue here. Id. ECI owns the “headend,” where the video signals are first received, and at the other end of the system it owns the junction boxes and interior building drop lines whereby the signals are distributed to subscribers in the multiple dwelling units that ECI serves. There would be nothing to transmit over Ameritech’s lines (and of course nothing to receive from those lines) absent the system components that ECI owns. In that sense, it defies logic to characterize ECI’s interest as anything but “significant.”
*434It is equally clear, in the alternative, that ECI “otherwise controls or is responsible for, through [some] arrangement, the management and operation of ... a cable system.” Id. As the entity that has contracted with subscribers, it is ECI that is responsible for acquiring the programming its customers want, establishing a price, and delivering the video signals. ECI, and only ECI, is the company that subscribers look to for service. For the purpose of transmitting its programming to those subscribers, ECI has installed and maintained ownership of some equipment (the headend, the junction boxes, and the interior building drop lines), while leasing other equipment (one strand of Ameritech’s twelve-strand cable). ECI has, in this way, assembled the components of a functioning cable service. It did not construct and does not own all of those components, but it is nonetheless responsible for those it does not own by subscribing to Ameri-tech’s Supertrunking Video Service. If Ameritech provided spotty service, ECI would still be the company that subscribers looked to, given that Ameritech itself provides no cable service at all. Likewise, if Ameritech decided to abandon its lines or to cancel its lease with ECI, ECI would have to make alternate arrangements in order to continue providing service. There can be little doubt, then, that ECI, is “responsible” — partly through ownership and partly through leasing — for the system that delivers cable programming to its subscribers.
The FCC’s analysis skirts these evident points by positing that there is no “cable system” for ECI to operate. ¶ 61. That notion is impossible to reconcile with the statutory definition of such a system, however. In relevant part, the statute provides: .
[T]he term “cable system” means a facility, consisting of a set of closed transmission paths and associated signal generation, reception, and control equipment that is designed to provide cable service which includes video programming and which is provided to multiple subscribers within a community....”
47 U.S.C.A. § 522(7) (Supp.1999).1 It is undisputed that “cable service” is what ECI provides to its subscribers. ¶ 49. The pertinent question, then, is whether there is a cognizable facility consisting of the elements identified in the statute that is designed to deliver that service. Plainly there is. In fact, no one really denies that ECI delivers its cable service over a set of closed transmission paths and associated signal generation, reception, and control equipment. See ¶¶ 54-55. ECI has constructed and owns the portions of the system that initially receive the programming signals and ultimately distribute those signals to the subscribers living within the buildings ECI serves; Ameritech, on the other hand, carries the signals over the public way via cabling that it has leased to ECI.2
*435The FCC nonetheless denied the presence of a “cable system” because “there is an absolute separation of ownership between ECI’s headend facilities, which are located entirely on private property, and the transmission facilities owned and controlled by Ameritech.” ¶ 55. The two companies are entirely independent, the FCC emphasized. ECI, on the one hand, has “total control” over the programming it delivers to its subscribers, while Ameri-tech, on the other, exercises “complete stewardship” over the lines that deliver ECI’s signal over the public way. ¶¶ 55, 56. The relationship between the two is that of carrier and user, nothing more. ¶ 55. Consequently, in the FCC’s view, “ECI’s facilities and Ameritech’s facilities do not constitute a single, integrated cable system.” ¶ 61.
The fundamental flaw in the FCC’s analysis is that it seizes upon ownership of the transmission lines and elevates that consideration to preeminence in determining whether or not a “cable system” exists. Congress, by contrast, directed the FCC to look at whether there is a set of closed transmission paths and associated equipment that delivers cable service to subscribers; nowhere in the statutory definition did it mention ownership of the transmission paths — or any other particular system component — as a relevant factor. § 522(7); see also ante at 432. Moreover, in defining who constitutes a “cable operator,” Congress spoke in terms of a person who either (A) “owns a significant interest” in a cable system or (B) “otherwise controls or is responsible for, through any arrangement, the management and operation of such a cable system.” § 522(5). This language quite clearly envisions that one can operate a cable system without being the sole owner of the system components — without, in fact, holding any ownership interest at all in the transmission paths that cross the pub-he way. To that extent, the statutory terms belie the notion that there must be a “single, integrated cable - system” in which the cable provider onrns the transmission paths on the public way as well as the components located on private property. See ¶ 61. ECI owns the latter and leases the former. No one can deny that by virtue of this arrangement, ECI has assembled a facility that functions precisely as Congress defines the term “cable system.” Only by importing an ownership criterion that is not found in the statutory language, and which is in evident tension with that language, can the FCC escape this conclusion. As the FCC itself acknowledged, Congress considered but “intentionally omitted the Commission’s previous requirement that all portions of a cable system be under common ownership or control.” ¶ 56. However great the FCC’s regulatory authority, it does not have the power to rewrite the statutory scheme; neither do we. E.g., Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984).
The statute, of course, exempts from the definition of a “cable system” “a facility that serves subscribers without using any public right-of-way.” § 522(7)(B). The FCC believed it is Ameritech, not ECI, that “uses” the public way because it is Ameritech that installs, repairs, and maintains the lines that traverse the public way. ¶ 62. In its view, ECI’s “mere interaction” with Ameritech’s lines does not constitute the type of “use” that Congress had in mind when defining a “cable system.” Id.
Again I find it impossible to reconcile the FCC’s construction with the language that Congress has employed. The first point to make is Commissioner Tristani’s: The statute asks not whether ECI uses the public way, but whether the facility that *436delivers ECI’s programming does. Trista-ni dissent at 5. Here, of course, the leased portion of the cable system without question crosses and therefore “uses” the public right-of-way. In any case, common sense tells us that ECI itself also “uses” the public way in delivering cable programming to its subscribers. Quite simply, without access to the Ameriteeh lines that cross the public way, ECI’s signals would have nowhere to go. The lines, certainly, belong to Ameriteeh, but ECI uses those lines — and thus avails itself of the public way in which they are located— no less by leasing the lines than by owning them outright. One can buy a car to drive around town or rent one — either way one makes use of both the car and the public streets that the car traverses. The legislature’s choice of the term “use,” as opposed to a more specific and limiting term, signals that it meant to reach the very type of access to the public way that ECI has arranged. Smith v. United States, 508 U.S. 223, 229, 113 S.Ct. 2050, 2054, 124 L.Ed.2d 138 (1993). And I discern no ambiguity in the term that would permit the FCC to regulate in Congress’ stead. “Use” is a broad term, but its breadth alone does not create ambiguity. See Pennsylvania Dep’t of Corrections v. Yeskey, 524 U.S. 206, 118 S.Ct. 1952, 1955-56, 141 L.Ed.2d 215 (1998); Bass v. Stolper, Koritzinsky, Brewster & Neider, S.C., 111 F.3d 1322, 1326 (7th Cir.1997); Haroco, Inc. v. American Nat’l Bank & Trust Co. of Chicago, 747 F.2d 384, 398-99 (7th Cir. 1984), aff'd, 473 U.S. 606, 105 S.Ct. 3291, 87 L.Ed.2d 437 (1985). Neither the FCC nor my colleagues seem to dispute that ECI’s transmission of signals over the public way through Ameritech’s lines constitutes a “use” in the ordinary sense of that term (see ante at 432-33); they simply think that there are plausible policy reasons that support construing the term more narrowly. Fine, but the authority to narrow the statute rests solely with Congress. Having chosen a term with an expansive, commonsense meaning, and supplying no definition of its own indicating that the term should be given a more particularized construction, Congress has bound us to the broader meaning of the word. Smith, 508 U.S. at 228-29, 113 S.Ct. at 2054. Because ECI’s leasing of Ameritech’s lines for the purpose of transmitting its programming surely constitutes a “use” of the public way in ordinary parlance, the exemption is not applicable here.
For all of these reasons, I would grant the petitions for review, reverse the FCC’s declaratory ruling, and hold that ECI is a “cable operator” which must obtain a franchise from the communities in which it provides service.

. The statute proceeds to exempt from the definition of "cable system” facilities that do not use any public way. I address that exemption separately below.

. The parties have spilled much ink in the briefs debating whether this arrangement has the exclusivity characteristic of the more traditional cable systems that are constructed and owned entirely by the cable operator. Here, because Ameritech carries ECI's signals over multi-stranded cables, other cable providers could (assuming they were able to install junction boxes and interior drop lines on the same properties that ECI serves) lease other strands of wire in Amerilech’s cables and serve the same customers that ECI serves. See National Cable Television Ass’n, Inc. v. FCC, 33 F.3d 66, 74-75 (D.C.Cir.1994) (distinguishing "channel service” from "video dialtone”). What of it? Whether the wire that ECI leases in Ameritech’s cable is the solitary strand in the cable or one of 100, that wire is nonetheless dedicated to ECI’s exclusive use for the duration of the lease. Other providers can, of course, lease parallel strands in the same bundle, just as they theoretically could lay cable of their own following the same paths that Ameritech has blazed. ECI still provides service through a unified system of components that could be duplicated, perhaps, but cannot be intruded upon by other providers. Cf. id. at 75 (noting that by *435offering "video dialtone” service to subscribers in order to evade franchising requirement, a cable provider "would ... have to give up its control over, including the right to exclude others from, the channel capacity that it formerly leased”); see also Tristani dissent at 3-4.