Document ID: A:\MIDWEST.TXT FEDERAL COMMUNICATIONS COMMISSION v. MIDWEST VIDEO CORPORATION ET AL. No. 77-1575 SUPREME COURT OF THE UNITED STATES 440 U.S. 689; 99 S. Ct. 1435; 1979 U.S. LEXIS 82; 59 L. Ed. 2d 692; 4 Media L. Rep. 2345 January 10, 1979, Argued April 2, 1979, Decided * * Together with No. 77-1648, American Civil Liberties Union v. Federal Communications Commission et al., and No. 77-1662, National Black Media Coalition et al. v. Midwest Video Corporation et al., also on certiorari to the same court. PRIOR HISTORY: [***1] CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT. DISPOSITION: 571 F.2d 1025, affirmed. SYLLABUS: The Federal Communications Commission (FCC) promulgated rules requiring cable t channels for access by public, educational, local governmental, and leased-access users, a hannels and what may be transmitted over such channels. During the rulemaking proceedings latory objectives by increasing outlets for local self-expression and augmenting the publi the rules amounted to an attempt to impose common-carrier obligations on cable [***2] o ommon carrier." Held: The FCC's rules are not "reasonably ancillary to the effective perfo ence are not within the FCC's statutory authority. Pp. 696-709. (a) The FCC's access rules plainly impose common-carrier obligations on cable operators discriminatory basis; operators are prohibited from determining or influencing the content (b) Consistently with the policy of the Act to preserve editorial control of programmin The provision's background manifests a congressional belief that the intrusion worked by explicitly limit the regulation of cable systems, Congress' limitation on the FCC's abilit ability to television broadcasting. Its force is not diminished by the variant technology (c) In light of the hesitancy with which Congress has approached the access issue in th xceeded the limits of its authority in promulgating its access rules. The FCC may not reg carriage of public-originated [***4] transmissions must come specifically from Congress. COUNSEL: Deputy Solicitor General Wallace argued the cause for petitioner in No. 77-1575 a id J. Saylor, Keith H. Fagan, and Julian R. Rush, Jr. Burt Neuborne, Bruce J. Ennis, Mich ers in No. 77-1662. George H. Shapiro argued the cause for respondent Midwest Video Corp. in all cases. Wi + James Bouras, Fritz E. Attaway, Arthur Scheiner, and Stuart F. Feldstein filed a brie Lee Loevinger and Jay E. Ricks filed a brief for Teleprompter Corp. et al. as amici cur JUDGES: WHITE, J., delivered the opinion of the Court, in which BURGER, C. J., and STEWART OPINIONBY: WHITE OPINION: [*691] [**1437] MR. JUSTICE WHITE delivered the opinion of theCourt. In May 1976, the Federal Communications Commission promulgated rules requiring cable te hannels for access by third parties, and to furnish equipment and facilities for access pu formance of the Commission's various responsibilities for the regulation of television bro I The regulations now under review had their genesis in rules prescribed by the Commissio for public, governmental, educational, [***6] and leased access. The rules were rea C. 2d 207 (1975), effected certain substantive changes, and extended the rules to all cabl good" in preserving access channels, though it acknowledged that the "overall impact that As ultimately adopted, the rules prescribe a series of interrelated obligations ensurin Under the rules, cable systems must possess a minimum capacity of 20 channels as well as apacity, [***7] n2 cable systems must allocate four [*693] separate [**1438] chann f each access channel, the combined demand can be accommodated with fewer than four channe channel for the same purpose, to the extent of the system's activated capacity. @ 76.254 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n1 Systems in the top 100 markets and in operation prior to March 31, 1972, and other s ) (1977). n2 Activated channel capacity consists of the number of usable channels that the system at majority of systems constructed in the major markets from 1962 to 1972 were designed wi Proposed Rule Making, 53 F. C. C. 2d 782, 785 (1975). In determining the number of activated channels available for access use, channels alre are subtracted. The remaining channels deemed available for access use include channels ich a separate assessment is not made. 1976 Order, supra, at 315-316. The Commission has ess uses with his own origination efforts." Id., at 316. Additionally, the Commission has have only one complete channel available to provide access services we shall consider it a n3 Cable systems in operation on June 21, 1976, that lack sufficient activated channel poses. 47 CFR @ 76.254 (c) (1977). Systems initiated after that date, and existing syste e 1976 Order, supra, at 314-315. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Under the rules, cable operators are deprived of all discretion regarding who may explo access programming except that they must adopt rules proscribing the transmission on most ng for first-come, nondiscriminatory access on public and leased [***9] channels. @@ 7 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n4 Cable systems were also required to promulgate rules prohibiting the transmission of rules in an order filed in American Civil Liberties Union v. FCC, No. 76-1695 (Aug. 26, 19 a review of the requirement, and it is not now in controversy before this Court. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Finally, the rules circumscribe what operators may charge for privileges of access and ational and governmental access for the first five years the system services such users. ment, personnel, and production exacted from access users "shall be reasonable and consist ceeding five minutes in length." Ibid. Lastly, a system may not charge access users for u can be played without technical alteration to the system's equipment. Petition for Recon The Commission's capacity and access rules were challenged on jurisdictional grounds in might properly pursue in its supervision over broadcasting. Specifically, the Commission m elf-expression and augmenting the public's choice of programs." 59 F. C. C. 2d, at 298. Th Id., at 299. The explanation was: "So long as the rules adopted are reasonably related to achieving objectives for which the n nature. The proper question, we believe, is not whether they fall in one category or an -- but whether the rules adopted promote statutory objectives." Ibid. Additionally, the Commission denied that the rules violated the First Amendment, reasoning On petition for review, the Eighth Circuit set aside the Commission's access, channel c y to the Commission's jurisdiction over broadcasting, a jurisdictional condition establish o the statutory command that broadcasters themselves may not be treated as common carriers [*696] problems. We granted certiorari, 439 U.S. 816 (1978), and we now affirm. n5 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n5 In the court below, the American Civil Liberties Union (ACLU), petitioner in No. 77- ACLU requests that we remand these cases for further consideration of its challenge in th - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***13] II A The Commission derives its regulatory authority from the Communications Act of 1934, 48 of that medium. But it is clear that Congress meant to confer "broad authority" on the Co transmission." FCC v. Pottsville Broadcasting Co., 309 U.S. 134, 138 (1940). To that end, States v. Southwestern Cable Co., we construed @ 2 (a) as conferring on the Commission a c stion now before us is whether the Act, as construed in these two cases, authorizes the ca The Southwestern litigation arose out of the Commission's efforts to ameliorate the com Fearing that such importation might "destroy or seriously degrade the service offered by a adcast stations into whose service area they brought competing signals, to avoid duplicati vision markets unless first demonstrating that the service would comport with the public i - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n6 CATV, or "community antenna television," refers to systems that receive television b 57, 161 (1968). "Because of the broader functions to be served by such facilities in the f . 9 (1972). [***15] n7 The validity of the particular regulations issued by the Commission was not at issue en applied by the courts of appeals to sustain the validity of the rules. Id., at 659 n. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - The Commission's assertion of jurisdiction was based on its view that "the successful p 392 U.S., at 177. Against the background of the administrative undertaking at issue, the C s various responsibilities for the regulation of television broadcasting." 392 U.S., at 17 Soon after our decision in Southwestern, the Commission [*698] [***16] resolved "to nating." Notice of Proposed Rulemaking and Notice of Inquiry, 15 F. C. C. 2d 417, 422 (196 V affirmatively to further statutory policies." Ibid. Accordingly, the Commission promulg to a significant extent as a local outlet by originating its own programs -- or cablecas o-4 vote but without an opinion for the Court, sustained the Commission's jurisdiction to Four Justices, in an opinion by MR. [***17] JUSTICE BRENNAN, reaffirmed the view th hought that the reasonably-ancillary standard announced in Southwestern permitted regulati 667. The Commission had reasonably determined, MR. JUSTICE BRENNAN's opinion declared, tha f outlets for community self-expression and augmenting the public's choice of programs and ion rule [was] within the Commission's authority recognized in Southwestern." 406 U.S., at THE CHIEF JUSTICE, in a separate opinion concurring [***18] in the result, admonish on [had] made the correct decision in [the] case," he was inclined to defer to its judgmen - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n8 The Commission repealed its mandatory origination rule in December 1974. It explaine "Quality, effective, local programming demands creativity and interest. These factors can in many instances, neither wanted by subscribers nor beneficial to the system's total ope o develop, regardless of specific legal requirements. During the suspension of the mandat ogramming to attract and retain subscribers. These decisions have been made in light of l - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***19] B Because its access and capacity rules promote the long-established regulatory goals of aintains that it plainly had jurisdiction to promulgate them. Respondents, in opposition, cally, it is urged that by requiring the allocation of access channels to categories of us s, the regulations wrest a considerable degree of editorial control from the cable operato different from those heretofore approved by the courts but also contravene statutory limit adcasting shall not . . . be deemed a common carrier." 47 U. S. C. @ 153 (h). We agree with respondents that recognition of agency jurisdiction to promulgate the acc with a purpose affirmatively to promote goals pursued in the regulation of television bro cable operators' control over the composition of their programming, as do the access rule me enmeshed in the field of television broadcasting, and, by requiring them to engage in t rtaking." 406 U.S., at 670 [***21] (opinion of BRENNAN, J.). With its access rules, however, the Commission has transferred control of the content o ystems, pro tanto, to common-carrier [*701] status. n9 A common-carrier service in the employ such facilities may communicate or transmit intelligence of their own design and c Comm'rs v. FCC, 173 U. S. App. D. C. 413, 424, 525 F.2d 630, 641, cert. denied, 425 U.S. 9 d on what terms to deal." National Association of Regulatory Utility Comm'rs v. FCC, supra - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n9 A cable system may operate as a common carrier with respect to a portion of its serv is clearly possible for a given entity to carry on many types of activities, it is at leas 1, 207 (1969). n10 Section 3 (h) defines "common carrier" as "any person engaged as a common carrier f ion, resort must be had to court and agency pronouncements to ascertain the term's meaning casting Co. v. Collier, 24 F. C. C. 251, 254 (1958); H. R. Conf. Rep. No. 1918, 73d Cong., - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***23] The access rules plainly impose common-carrier obligations on cable operators. n11 Unde n12 Operators are prohibited from determining or influencing the content of access progra obligations -- whereby "CATV operators [would] furnish studio facilities and technical ass sult would be the operation of cable systems "as common carriers on some channels." First the Commission did not directly deny that its access requirements compelled common carriag 77-1575, p. 39. But the Commission continues to insist that this characterization of the so long as the rules promote statutory objectives. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n11 As we have noted, and as the Commission has held, cable systems otherwise "are not n12 See also 1976 Order, 59 F. C. C. 2d, at 316 ("We expect the operator in general to - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Congress, however, did not regard the character of regulatory obligations as irrelevant ) of the Act not to treat persons engaged in broadcasting as common carriers. We consider n that case was whether a broadcast licensee's general policy of not selling advertising t ] of the legislative history of the Radio Act of 1927 -- the precursor to the Communicat " 412 U.S., at 105. We determined, in fact, that "Congress specifically dealt with -- and Court [***26] took note of a bill reported to the Senate by the Committee on Interstate ll make no discrimination as to the use of such broadcasting station, and with respect to '" Id., at 106, quoting 67 Cong. Rec. 12503 (1926). That bill was amended to eliminate th e of problems in administering a nondiscriminatory right of access. 412 U.S., at 106; see The Court further observed that, in enacting the 1934 Act, Congress rejected still anot 412 U.S., at 107-108. [***27] n13 "Instead," the Court noted, [*704] "Congress afte be deemed a common carrier.'" Id., at 108-109. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n13 The proposal adopted by the Senate provided: "[If] any licensee shall permit any person to use a broadcasting station in support of or nity to an equal number of other persons to use such station in support of an opposing can of opposite views on such public questions." See Hearings on S. 2910 before the Senate Committee on Interstate Commerce, 73d Cong., 2d 49 (1934). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***28] "Congress' flat refusal to impose a 'common carrier' right of access for all persons wi s of private journalism." Id., at 109. Notable among them was @ 326 of the Act, which enjo lation or condition shall be promulgated or fixed by the Commission which shall interfere The holding of the Court in Columbia Broadcasting was in accord with the view of the Co not mandating the claimed access, would nevertheless permit the Commission to require bro ity to regulate access, 412 U.S., at 122, and that [*705] "[conceivably] at some futur , at 131. But this is insufficient support for the Commission's position in the present ca licy of the Act to preserve editorial control of programming in the licensee, forecloses a a congressional belief that the intrusion worked by such regulation on the journalistic in op a "nondiscriminatory system for controlling access . . . is precisely [***30] what Con . n15 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n14 Whether less intrusive access regulation might fall within the Commission's jurisdi t put into question the statutory authority for the fairness-doctrine obligations sustaine range of licensee discretion. See Report on Editorializing by Broadcast Licensees, 13 F. determining what subjects should be considered, the particular format of the programs to b n15 The dissent maintains that @ 3 (h) does not place "limits on the Commission's exerc er, @ 3 (h) means only that "every broadcast station is not to be deemed a common carrier, lainly anxious to avoid regulation of broadcasters as common carriers under Title II, whic he Act in Columbia Broadcasting led us to conclude that @ 3 (h) embodies a substantive det "Congress pointedly refrained from divesting broadcasters of their control over the select ver is tendered by members of the public. [The] [provision] clearly [manifests] the inten We now reaffirm that view of @ 3 (h): The purpose of the provision and its mandatory wordi following text, that same constraint applies to the regulation of cable television system - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***32] [*706] Of course, @ 3 (h) does not explicitly limit the regulation of cable systems. tes v. Midwest Video Corp., 406 U.S., at 661 (opinion of BRENNAN, J.). Though afforded wi fort at issue in Southwestern as consistent with the Act because it had been found necessa nce with the Commission's work in the broadcasting area. And in Midwest Video the Commiss what the Commission might require cable systems to do. Indeed, they argue that the Commis ook the fact that Congress has restricted the Commission's ability to advance objectives a - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n16 The Commission contends that the signal carriage rules involved in Southwestern are the broadcast signals of broadcast licensees into whose service area the cable operator i t facilities indifferently for public use and thus did not compel cable operators to funct dressed by @ 3 (h). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***34] That limitation is not one having peculiar applicability to television broadcasting. I discretion regarding what their programming will include. As the Commission, itself, has observed, "both in their signal carriage decisions and in c rder in Docket No. 20829, 69 F. C. C. 2d 1324, 1333 (1978). n17 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n17 We do not suggest, nor do we find it necessary to conclude, that the discretion exe ignificantly compromise the editorial discretion actually exercised by cable operators. A ement of alternative programming, compelling cable operators indiscriminately to accept ac - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***35] [*708] In determining, then, whether the Commission's assertion of jurisdiction is "r e Co., 392 U.S., at 178, we are unable to ignore Congress' stern disapproval -- evidenced the past led us to defer -- albeit cautiously -- to the Commission's judgment regarding th The exercise of jurisdiction in Midwest Video, it has been said, "[strained] the outer in the broadcast area, and in view of its outright rejection of a broad right of public ac Commission [**1446] may not regulate cable systems as common carriers, just as it may ust come specifically from Congress. n19 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n18 The Commission has argued that the capacity, access, and facilities regulations sho y related, see Brief for Petitioner in No. 77-1575, p. 36 n. 32, and acknowledges that the whether any particular rule or portion thereof would have been promulgated in isolation. ight appropriately be revitalized in a different context. [***37] n19 The court below suggested that the Commission's rules might violate the First Amend nd to make clear that the asserted constitutional issue did not determine or sharply influ sing a cable operator to possible criminal prosecution for offensive cablecasting by acces - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Affirmed. DISSENTBY: STEVENS DISSENT: MR. JUSTICE STEVENS, with whom MR. JUSTICE BRENNAN and MR. JUSTICE MARSHALL join In 1969, the Commission adopted a rule requiring cable television systems to originate is "mandatory origination" rule. Thereafter, the Commission decided that less onerous rul es." n1 Accordingly, it adopted the access rules that the Court invalidates today. n2 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n1 The quotation is from the report accompanying the promulgation of the 1969 rules. S Order in Docket 20508, 59 F. C. C. 2d 294, 298 (1976) (App. 103). n2 By the time of this Court's decision in Midwest Video, the Commission had adopted li , 523 F.2d 1344 (CA9 1975). In 1974, the Commission largely repealed the mandatory origina ves. See Report and Order in Docket No. 19988, 49 F. C. C. 2d 1090, 1099-1100, 1104-1106 - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***39] [*710] In my opinion the Court's holding in Midwest Video that the mandatory originat ary conclusion is based on its reading of @ 3 (h) of the Act as denying the Commission the Section 3 (h) provides: "'Common carrier' or 'carrier' means any person engaged as a common carrier for hire, i ubject to this chapter; but a person engaged in radio broadcasting shall not, insofar as s Section 3 is the definitional section of the Act. It does not purport to grant or deny common-carrier regulation under [***40] Title II of the Act, simply because it is enga wers otherwise within its statutory authority because [*711] a [**1447] lawfully i - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n3 The Senate Report on the Communications Act of 1934, for example, simply stated: "Section 3: Contains the definitions. Most of these are taken from the Radio Act, the Int The House Report was only slightly more detailed; as to @ 3 (h), it explained: "Since a person must be a common carrier for hire to come within this definition, it does service which they are capable of furnishing, and may furnish service under varying arran Finally, the Conference Report "noted that the definition does not include any person if n Section 3 (h), it seems clear to me, cannot be read to be directly applicable to cable ey are technically not broadcasters at all; what they are engaged in is the distinct proce - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***41] The Commission's understanding supports this reading of @ 3 (h). In past decisions int execution should be followed unless there are compelling indications that it is wrong.'" construction of @ 3 (h) is clear: it has never interpreted that provision, or any other in [*712] The Commission's 1966 rules, which gave rise to this Court's decision in Unite ecific order of priority, the signals of broadcast stations into whose viewing area they b combining carriage of broadcast signals with program origination and common carrier servi opting the rules at issue here, the Commission explicitly rejected the rationale the Cour "So long as the rules adopted are reasonably related to achieving objectives for which the The proper question, [*713] we believe, is not whether they fall in one [**1448] c lic interest -- but whether the rules adopted promote statutory objectives." 59 F. C. C. 2 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n4 See Second Report and Order in Docket 14895, 2 F. C. C. 2d 725 (1966). The Southwest , 659 n. 17, noted that "[their] validity was, however, subsequently and correctly upheld n5 1969 Order, 20 F. C. C. 2d, at 202. See also United States v. Midwest Video Corp., "Although the Commission did not impose common carrier obligations on CATV systems in its s.' First Report and Order 209. Public access requirements were introduced in the Commiss vice] 3277." - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - In my judgment, this is the correct approach. Columbia Broadcasting System, Inc. v. De ations Act, including @ 3 (h), which had some bearing on the access question presented. W rms of individual access." 412 U.S., at 122. But we went on to conclude: "That is not to s is that Congress has chosen to leave such questions with the Commission, to which it has g - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n6 While the Court in Columbia Broadcasting System, Inc. v. Democratic National Committ that "[conceivably] at some future date Congress or the Commission -- or the broadcasters - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [***45] The Commission here has exercised its "flexibility to experiment" in choosing to replac lusion that these rules, like the mandatory origination rule they replace, do promote the es." And under this Court's holding in Midwest Video, this is all that is required to upho would therefore reverse the judgment of the Court of Appeals for the Eighth Circuit and r