Court Opinion

ID: 8898655
Source: CourtListenerOpinion
Date Created: 2022-11-27 00:35:33.856233+00
Date Added: 2024-06-11T17:07:40.494498
License: Public Domain

ROSENN, Circuit Judge
(concurring).
I join the majority’s disposition of these cases and its expression of concern about the trafficking issue. I write to express another concern — that the Commission’s actions may constitute an abuse of its rule-making process.
The Commission’s current regulatory scheme for cable television systems originated with its Cable Television Report and Order, 36 F.C.C.2d 143 (1972). The Order established a “dual jurisdiction” of cable television regulation. Local municipal governments franchise cable operators, de*1242linéate local service areas, and fashion regulatory programs suited to local needs. The Commission, on the other hand, establishes minimum criteria, 47 C.F.R. § 76.31, with which the local franchising authorities must comply. The FCC’s role is limited to satisfying itself that its criteria are met and that the applicant is otherwise qualified, at which point it grants a certificate of compliance.
The FCC subsequently reconsidered its regulations and stated that for franchises granted before promulgation of the rules, only “substantial compliance” with the rules would be required until March 1977 or the expiration of the current franchise period, whichever occurred first. Reconsideration of Cable Television Report and Order, 46 F.C.C.2d 326, 366 (1972). This change was incorporated into the rules. 47 C.F.R. § 76.31(6). Later FCC decisions stated that “substantial compliance” would be given a liberal construction and the Commission would deny certification only in the “extreme case” of deviance from its franchise standards. CATV of Rockford, Inc., 38 F.C. C.2d 10, 15-16 (1972). In Comcast Corporation, 42 F.C.C.2d 420, 422 (1973), the Commission stated that only where a cable franchise was “flagrantly violative” of the rules would a certificate be denied.
The primary thrust of petitioners’ attack is based on one of the Commission’s minimum standards, 47 C.F.R. § 76.31(a)(1), which requires for certification that:
The franchisee’s legal, character, financial, technical, and other qualifications, and the adequacy and feasibility of its construction arrangements, have been approved by the franchising authority as part of a full public proceeding affording due process.
The petitioners contend that corporate control over the intervenors has been effectively transferred to another entity. Communications Properties, Inc. (CPI) of Austin, Texas, which now controls, according to petitioners, three of the six Philadelphia cable franchises. Since control has been transferred, petitioners in effect argue that CPI is now the franchisee and its qualifications have not been publicly examined as required by section 76.31(a)(1). Thus, petitioners conclude, the franchises are not in actual or substantial compliance, and the dilution of the substantial compliance doctrine to allow certification of these franchises is an arbitrary, capricious, and unreasonable abuse of discretion.1
The FCC opinions 2 in these cases address this issue in only a summary fashion. The Commission only stated:
The Rules require public proceedings in connection with the franchising process. At the present time they do not require a public proceeding prior to the transfer or assignment of a franchise. Therefore, assuming arguendo that there had been a transfer of control . . . there was
no violation of the Commission’s Rules. 51 F.C.C.2d at 531.
What this simplistic treatment of petitioner’s claim ignores is that not requiring that a franchise transferee be examined at a public hearing renders the hearing afforded the initial franchisee a meaningless charade. Stretching “substantial compliance” to include this situation makes section 76.-31(a)(1) a nullity. Certainly, the Commission is free to adopt whatever policies it determines best serve the public convenience, interest, or necessity, 47 U.S.C. § 307, and need not require any public hearing at all. But once the Commission announces a policy and embodies it in a rule, it cannot disregard its own regulation. See, e. g., Nader v. Nuclear Regulatory Commission, 513 F.2d 1045, 1051 (D.C. Cir. 1975). Furthermore, while the Commission may interpret its rules as part of its adjudicatory process, see 1 Davis, Administrative Law Treatise, § 5.01, p. 292 (1958), stan*1243dards such as the “extreme case” or “flagrantly violative” hardly provide parties and reviewing courts with any understanding of the Commission’s policy. Such vague standards eviscerate the rule and create a potential for arbitrary action.
Despite these reservations, I agree that denial of the petition is appropriate. Our scope of review under 5 U.S.C. § 706 is very limited. I am not convinced that the Commission’s decision in the instant case is arbitrary, capricious, or an abuse of discretion. Also, the Commission has informed us that the trafficking issue is under consideration, and if the courts intervene at all, they should not act until the Commission has had a reasonable opportunity to address the issue. Furthermore, any action we might take can have only limited practical value in light of the December franchise renewal date, when purportedly the franchises must comply strictly with the regulations.

. The Commission and intervenors dispute petitioners’ premise that control has been transferred. For purposes of this opinion, the complexities of these corporate arrangements need not be examined.

. The relevant FCC decisions are reported at 49 F.C.C.2d 274 (1974); 51 F.C.C.2d 530 (1975); 53 F.C.C.2d 600 (1975).