Court Opinion

ID: 8900064
Source: CourtListenerOpinion
Date Created: 2022-11-27 00:57:23.096002+00
Date Added: 2024-06-11T17:07:46.777193
License: Public Domain

MANSFIELD, Circuit Judge
(dissenting):
I respectfully dissent for the reason that both the plain language of § 222 of the Federal Communications Act of 1934 (“Act”) and the circumstances surrounding its enactment make it clear that in authorizing Western Union Telegraph Company (“WU”) and Postal Telegraph, Inc. (“PT”) to merge, Congress did not bar the merged enterprise from ever again entering into any international operations. If Congress had wished to enact such a prohibition, it could easily have done so. All it had to do was to provide that following divestiture the merged enterprise should not engage in international operations or that it should be restricted to domestic service. But it did not do this. Instead, it simply required that the merged enterprise divest itself of those “international operations theretofore carried on.” The term “theretofore” can only mean “up to that time,” “until then,” or “before then,” see Webster’s Third International Diet. (1961 ed.) 2372; Hume v. United States, 118 F. 689, 696 (5th Cir. 1902). It cannot fairly be construed as meaning “thereafter.” As the Supreme Court has stated, “It is our judicial function to apply statutes on the basis of what Congress has written, not what Congress might have written.” United States v. Great Northern Railway Co., 343 U.S. 562, 575, 72 S.Ct. 985, 993, 96 L.Ed. 1142 (1952). “[W]e are not free to adopt a construction which not only strains, but flatly contradicts, the words of the statute,” Reliance Electric Co. v. Emerson Electric Co., 404 U.S. 418, 427, 92 S.Ct. 596, 601, 30 L.Ed.2d 575 (1972). *94Congress thus left open the question of whether, with changing market conditions, circumstances and technologies, some international operations by WU might after divestiture be authorized by the Federal Communications Commission as being in the public interest. Since WU has complied with the divestiture requirement, that obligation has been fulfilled, and the FCC is no longer barred from authorizing the proposed mailgram service to Hawaii, an international point. I would therefore affirm the Commission’s order.
That Congress intended to restrict itself to dealing with the telegraphic industry in its contemporary pattern is attested to not only by the statute’s plain language but by the circumstances surrounding the enactment of § 222. Although the statute is couched in terms that embrace any merger of telegraphic carriers generally, it is undisputed that the law was in fact aimed at authorizing the proposed merger of WU with its financially ailing competitor, PT, which had continued to lose money despite government subsidization through the Reconstruction Finance Corp. See H.R.Rep. No. 2664, 77th Cong., 2d Sess. 3-4 (1942), S.Rep. No. 1490, 77th Cong., 2d Sess. 1 (1942). These two companies represented the country’s sole domestic telegraphic services except for certain limited types of service (leased wire, teletypewriter and telephone) offered by American Telephone & Telegraph Company. If PT should fail, the United States would lose an essential telegraphic service. Sen.Res. 75, 76th Cong., 1st Sess. 1939. Congressional authority for the proposed merger was required because the merger otherwise would violate § 314 of the Act, 47 U.S.C. § 314.
Since the WU-PT merger would create overnight a giant domestic-international telegraphic enterprise possessing a domestic monopoly over pick-up and delivery of international messages, which could be used unfairly to favor its international cables division as against the overseas services of other international carriers, some protection against this immediate potential for abuse was deemed advisable. The means chosen were to require divestiture of the merged company’s international operations and, pending divestiture, to impose upon WU-a formula for equitable distribution among international carriers of international traffic picked up by WU for transmittal overseas. Not a word was said about depriving the Commission of its discretionary power under § 214 of the Act to authorize in the future such specific international operations by WU as might be found to be in the public interest.
Congress thus viewed divestiture as sufficient to eliminate any immediate anticompetitive consequences from the merger and saw the Commission’s continued exercise of its broad discretionary powers and expertise as sufficient to safeguard against any reentry by WU that might tend to cause an undue restraint on competition. In the meantime, competition on the part of international carriers would be given a chance to flourish.
Normally, where the plain meaning of a statute is clear legislative history, even if indicating a different intent, will not justify a departure from that meaning. See Caminetti v. United States, 242 U.S. 470, 485, 37 S.Ct. 192, 61 L.Ed. 442 (1917). Here, however, the legislative history of § 222, far from lending support to the majority’s position, tends to point in the opposite direction. The excerpts of testimony selected by the majority from statements of those who appeared in the course of Committee hearings extending over a period of years are at best ambiguous. Furthermore, being the statements of individuals rather than of Congressional committees or members, they hardly reflect the views of the Senate and House Committees reporting on the proposed legislation, much less those of Congress. When we turn to the Committee reports, as distinguished from such testimony, we find that there was never any recommendation to the effect that the merged enterprise be barred from international operations. At most the Senate Committee on Interstate Commerce recommended that the Commission be given the power to restrict the merged enterprise to domestic *95operations if such a restriction should be “found to be in the public interest.” S.Rep. No. 769, p. 25. Thereafter the successive drafts of § 222 as they progressed through Congress toward final enactment all contained the language “theretofore carried on.” See S. 158, 78th Cong., 1st Sess. (1943); S. 2598, 77th Cong., 2d Sess. (1942); S. 2445, 77th Cong., 2d Sess. (1942). Thus the legislative history, to the extent that it sheds any light on the issue, indicates that Congress meant what it said when it used the phrase “theretofore carried on” and left it to the Commission to determine in its discretion whether WU might be permitted to enter the international market “if found to be in the public interest” or, for that matter, whether an international carrier might expand by growth (as distinguished from merger) into the domestic market.1
Just as divestiture in the antitrust context is not normally a bar to future competition through growth on the part of the divested company, at least in the absence of a specific prohibition against reentry, see, e. g., Maryland & Virginia Milk Producers Assn. v. United States, 362 U.S. 458, 462, 472-73, 80 S.Ct. 847, 4 L.Ed.2d 880 (1960); Schine Chain Theatres, Inc. v. United States, 334 U.S. 110, 127, 130, 68 S.Ct. 947, 92 L.Ed. 1245 (1948); United States v. Crescent Amusement Co., 323 U.S. 173, 186, 65 S.Ct. 254, 89 L.Ed. 160 (1944), so here Congress was apparently satisfied to allow the Commission to determine in the exercise of its broad authority whether WU might enter the international area, and, if so, to what extent. Any such determination would, of course, require the Commission to weigh the advantages to the public of permitting a specific or limited reentry against any risk of abuse of domestic monopoly power on the part of WU. As competitive conditions, marketing methods and technology (including the development of alternate-voice data transmission) might change, such flexibility would be both desirable and in the public interest, especially since new methods of protecting international carriers against unfair competition might be devised. For instance, it now appears that the FCC could promote competition in the transmittal of mailgrams to Hawaii (1) by expanding the international gateways in the United States and permitting international carriers to absorb the cost of transmitting messages domestically by phone, telex or TWIX to such gateways, thus providing “paid direct access” to all domestic points in the United States, see International Record Carriers’ Communications, 40 F.C.C.2d 1082, 1083 (1973), and (2) by granting Hawaii mailgram rights to one or more international carriers.2 In view of these changing circumstances, § 222, to the extent that it might restrain competition on the part of WU against the international carriers, should be construed strictly, see United States v. Masonite, 316 U.S. 265, 280, 62 S.Ct. 1070, 86 L.Ed. 1461 (1942). Nor does Telegraphic Service With Hawaii, 28 F.C.C. 599, afid. on reconsideration, 29 F.C.C. 714 (1960), provide any substantial > support for the majority’s construction of § 222. Although the Commission in that proceeding stated in passing that § 222 precluded WU from engaging in competition with international carriers to overseas points, the statement was made in connection with its consideration of whether Hawaii might be treated as a domestic rather than as an international point. Furthermore, since the statement was made before WU’s divestiture of its international operations, which did not occur until 1963, the Commission apparently assumed that since Hawaii remained an international point any WU service to Hawaii would be subject to the outstanding divestiture order. However, since WU has now complied with the divestiture order, it no longer applies. To the extent that the Commission’s statement *96in Telegraphic Service With Hawaii is of-' fered as an interpretation of § 222 supporting the majority’s position here, it has been greatly eroded by the Commission’s decisions in later cases, see American Satellite Corp., 43 F.C.C.2d 348, 353 (1973); RCA Global Communications, Inc., 42 F.C.C.2d 774, 780 (1973), and as a practical matter overruled by its decision in the present case. In view of this conflict, whatever weight might otherwise be accorded to the Commission’s earlier interpretation of its own statute, see United States v. Storer Broadcasting Co., 351 U.S. 192, 203, 76 S.Ct. 763, 100 L.Ed. 1081 (1956), has been dissipated by its later construction. See United Housing Foundation, Inc. v. Forman, 421 U.S. 837, 858-59 n. 25, 95 S.Ct. 2051, 44 L.Ed.2d 621 (1975).
In short, the Commission’s conclusion that it has authority to consider WU’s application here is in keeping with the pattern and scheme of the Act, which is to set forth legislative objectives and give broad authority to the FCC, as the depository of expertise in the complex business of communications, to implement those principles and achieve the objectives in the light of changing technology and market developments. See United States v. Southwestern Cable, 392 U.S. 157, 172-73, 88 S.Ct. 1994, 20 L.Ed.2d 1001 (1968). The public interest would not be served by treating § 222(c)(ii) as a straitjacket that would preclude WU’s provision of international mailgram service where the grant of a certificate to provide such service to Hawaii would be in the public interest and would not violate the plain language of § 222. I would therefore affirm the Commission’s order.

. Section 222 of the Communications Act, 47 U.S.C. § 222, is limited to placing restrictions on consolidations and mergers. It does not restrict expansion by a domestic or international carrier through growth.

. Since 1972, WUI, RCA and ITT have applied to the Commission for permission to provide services similar to WU’s mailgram service between the continental United States and various international points, including Hawaii.