Friday, June 27, 2008
The Sixth Circuit has upheld the FCC's rulemaking authority in Alliance for Community Media v. FCC. The case involved a challenge to an FCC "adopting rules interpreting and implementing section 621(a)(1) of the Communications Act of 1934...which prohibits local franchising authorites from `unreasonably refus[ing] to award' competitive cable franchises. The FCC released the Order on March 5, 2007 on the basis of record evidence that the operation of the local franchising process was unreasonably impeding competitive entry into the cable television market."
The Court examined the history of cable regulation and the role of the FCC in that regulation. During the early period, the FCC refrained from regulating the entry of cable into the market "because it believed it lacked the authority to do so under existing statutory provisions....By the mid-1960s, however, cable television had proliferated to such a degree that the FCC determined that it must regulate cable franchises in order to carry out it statutory duty to oversee all forms of broadcasting on behalf of the public interest....The Supreme Court subsequently affirmed the FCC's regulatory authority over cable television, holding that the agency was authorized to issue rules that were `reasonably ancillary to the effective performance of the Commission's various responsibilities...'".
Continued the Court, "Regulation of cable services did not fall entirely on the shoulders of the FCC....Municipalities, of LFAs, also exerted an interest in regulating the cable medium...." The Court then examined the history of overlapping jurisdictions, the passage of the Cable Communications Policy Act of 1984, intended to clear up some of the confusion, and the impact of the resulting Title VI, interpretation of which is at issue in the case at bar. Finally in 1992, Congress passed the Cable Television Consumer Protection and Competition Act, revising section 621(a)(1) to provide that an LFA may grant "1 or more francises within its jurisdiction; except that a franchising authority may not grant an exclusive franchise and may not unreasonably refuse to award an additional competitive franchise." (emphasis added by the Court). According to the Court, Congress granted "potential entrants" with a remedy at law under 47 U.S. C. sec. 541 (a)(1) since local subscribers would otherwise have no opportunity to make significant choices between or among cable systems. "Over a decade following the passage of the 1992 amendments...the FCC compiled data suggesting that competition had yet to materialize as a reality for the cable market....To investigate the state of the cable market...the FCC adopted a Notice of Proposed Rulemaking...and subsequently released it...."
Petitioners challenged the FCC's authority to promulate rules implementing the order requiring granting of additional franchises. "Petitioners maintain that the FCC exceeded the bounds of its authority when it adopted the Order because Congress never explicitly or implicitly delegated power to the FCC to interpret section 621(a)(1)." The FCC disagreed.
The Court ruled that "Petitioners are...correct in noting that, while the text expressly reference franchising authorites, it is silent as to the agency's role in the process of awarding cable franchises. Where petitioners' argument falls short, however, is in the equating the omission of the agency from section 621(a)(1) with an absence of rulemaking authority." The Court cited the Supreme Court's decision in AT&T v. Iowa Utitilies Board as precedent for the FCC's authority in the area. Next it addressed the question of deference. Turning to a Chevron analysis, it acknowledged that while the language in 621(a)(1) is ambiguous, the FCC's construal of the language "amounts to a permissible contruction of the language." Next, the Court assessed the reasonableness of the Order. Given the agency's extensive fact-finding and the amount of deference due the agency by the Court, the Court found the agency's interpretations and ultimately its Order reasonable. Finally, the Court rejected petitioners' claim that the rule-making activity here was arbitrary, capricious, and an abuse of discretion. "We conclude that the FCC's rulemaking activity was rooted in a sufficient evidentiary basis."