In the Matter of CEASE AND DESIST ORDER TO BE DIRECTEDAGAINST BACK MOUNTAIN TELECABLE, INC., OWNER AND OPERATOR OF COMMUNITY ANTENNA TELEVISION SYSTEMS AT DALLAS BOROUGH,DALLAS TOWNSHIP, KINGSTON TOWNSHIP, LEHMAN TOWNSHIP, LAKE TOWNSHIP,
AND THE "HARVEYS LAKE" AREA, PA.
Docket No. 16866
FEDERAL COMMUNICATIONS COMMISSION
5 F.C.C.2d 735; 8 Rad. Reg. 2d (P & F) 1174
RELEASE-NUMBER: FCC 66-1055
November 23, 1966 Adopted
COMMISSIONER LEE FOR THE COMMISSION: COMMISSIONER BARTLEY ABSENT; COMMISSIONER LOEVINGER DISSENTING AND ISSUING A STATEMENT IN WHICH COMMISSIONERJOHNSON JOINS.
[*735] 1. This proceeding was initiated by an order to show cause, FCC 66-809, 4 FCC 2d 988, released September 14, 1966, directing Back Mountain Telecable, Inc. (Back Mountain), to show cause why it should not be ordered to cease and desist from further operation of community antenna television (CATV) systems in Dallas Borough, Dallas Township, and Kingston Township, Pa., in violation of sections 74.1105 and 74.1107 of the Commission's rules, and in Lehman Township, Lake Township and the "Harveys Lake" area, n1 in violation of section 74.1107 of the rules. Because expeditious resolution of this matter was deemed essential, we further ordered that, immediately upon closing, the record be certified to the Commission for final decision and that the parties file their proposed findings of fact and conclusions of law within 7 days after the record is closed.
n1 The "Harveys Lake" area is comprised of populous areas of Lake and Lehman Townships that border on Harveys Lake.
2. A petition to enlarge the issues, filed by Back Mountain, was denied by the Review Board (FCC 66R-433, released October 31, 1966). Petitions to
intervene, filed by WBRE-TV, Inc., licensee of WBRE-TV at Wilkes-Barre, Pa., and by the township of Kingston, [*736] Pa., were granted by Hearing Examiner Forest L. McClenning (FCC 66M-1324, released October 3, 1966, and FCC 66M-1485, released November 2, 1966). A petition to intervene, filed by Nathan Weiner, a subscriber to a Back Mountain CATV system, was denied by the hearing examiner (FCC 66M-1423, released October 24, 1966).
3. A prehearing conference was held before the hearing examiner on October 3, 1966. The evidentiary hearing was held and the record was closed on October 24, 1966. At the request of the Broadcast Bureau and upon the consent of all parties, the record was reopened and a further hearing was held on October 28, 1966. By orders released November 2, 1966, the record was again closed (FCC 66M-1485), and the matter was certified to the Commission (FCC 66M-1486). n2 On November 9, 1966, proposed findings and conclusions were filed by Back Mountain and the township of Kingston, and by the Chief, Broadcast Bureau, and proposed findings were filed by WBRE-TV, Inc.
n2 In a separate order, FCC 66M-1487, released Nov. 2, 1966, the hearing examiner corrected the transcript of record in several respects.
4. Rules governing the regulation of all CATV systems were adopted by our second report and order in dockets Nos. 14895, 15233, and 15971, 2 FCC 2d 725, released March 8, 1966; and these rules were published in the Federal Register on March 17, 1966 (31 F.R. 4540). A CATV system is defined by section 74.1101(a) of the rules as:
[Any] facility which, in whole or in part, receives directly or indirectly over the air and amplifies or otherwise modifies the signals transmitting programs broadcast by one or more television stations and distributes such signals by wire or cable to subscribing members of the public who pay for such service, but such term shall not include (1) any such facility which serves fewer than 50 subscribers, or (2) any such facility which serves only the residents of one or more apartment dwellings under common ownership, control, or management, and commercial establishments located on the premises of such an
apartment house. The parties to this proceeding have stipulated that facilities owned by Back Mountain in Dallas Borough, Dallas Township, Kingston Township, Lehman Township, Lake Township and the "Harveys Lake" area, Pa., are CATV systems as defined by section 74.1101 of the rules.
5. Sections 74.1105 and 74.1107, which are the bases for the charges in the order to show cause issued in this proceeding, were made effective immediately upon publication. In pertinent part, section 74.1105 provides:
No CATV system shall commence operations or commence supplying to its subscribers the signal of any television broadcast station carried beyond the grade B contour of that station, unless the system has given prior notice of the proposed new service to the licensee or permittee of any television broadcast station within whose predicted grade B contour the system operates or will operate, and to the licensee or permittee of any 100 w or higher power translator station operating in the community of the system, and has furnished a copy of each such notification to the Federal Communications Commission, within 60 days after obtaining a franchise or entering into a lease or other arrangement to use facilities; in any event, no CATV system shall commence such operations until 30 days after notice has been given. * * * The notice shall include the name and address of the system, [*737] identification of the community to be served, the television signals to be distributed, and the estimated time operations will commence. Where a petition with respect to the proposed service is filed with the Commission, pursuant to section 74.1109 of this chapter, within 30 days after notice, new service to subscribers shall not be commenced until after the Commission's ruling on the petition or on the interlocutory question of temporary relief pending further procedures: Provided, however, That service shall not be commenced in violation of the terms of any specified temporary relief or of the provisions of section 74.1107 of this chapter. Where no petition pursuant to section 74.1109 has been filed within 30 days after notice, service may be commenced at any time thereafter, subject, however, to the provisions of section 74.1107. The provisions of this section do not apply to any signals which were being supplied to subscribers of the CATV system on March 17, 1966 * * *.
6. The portions of section 74.1107 relevant to this proceeding provide as follows:
(a) No CATV system operating within the predicted grade A contour of a television broadcast station in the 100 largest television markets shall extend the signal of a television broadcast station beyond the grade B contour of that station, except upon a showing, approved by the Commission, that such extension would be consistent with the public interest, and specifically the establishment and healthy maintenance of television broadcast service in the area. Commission approval of a request to extend a signal in the foregoing circumstances will be granted where the Commission, after consideration of the request and all related materials in a full evidentiary hearing, determines that the requisite showing has been made. The market size shall be determined by the rating of the American Research Bureau, on the basis of the net weekly circulation for the most recent year.
(b) A request under paragraph (a) of this section shall be filed after the CATV system has obtained any necessary franchise for operation or has entered into a lease or other arrangement to use facilities and shall set forth the name of the community involved, the date on which a franchise was obtained, the signal or signals proposed to be extended beyond their grade B contours, and the specific reasons why it is urged that such extension is consistent with the public interest. Public notice will be given of the filing of such a request, and interested parties may file a response or statement within 30 days after such public notice. A reply to such responses or statement may be filed within a 20-day period thereafter. The Commission shall designate the request for an evidentiary hearing on issues to be specified, with the burden of proof and the burden of proceeding with the introduction of evidence upon the CATV system making the request, unless otherwise specified by the Commission as to particular issues.
* * *
(d) The provisions of paragraphs (a) and (b) of this section shall not be applicable to any signals which were being supplied by a CATV system to its subscribers on February 15, 1966, and pursuant to a franchise (where necessary) issued on or before that date; * * *.
7. We shall first consider the charge that Back Mountain's operations are in violation of section 74.1107. The basic facts of that charge are not in dispute, having been stipulated by the parties. Back Mountain commenced service to subscribers of its CATV systems as follows: In Dallas Borough on April 27, 1966; in Kingston Township on May 6, 1966; and in Dallas Township on May 21, 1966. As of October 21, 1966, Back Mountain was providing CATV service to 148 subscribers in the above 3 localities. No service has begun in any of the remaining localities in which Back Mountain owns CATV systems. [*738] And, consequently, no further consideration will be given to such systems in this show cause proceeding. n3
n3 Although Back Mountain has indicated that it proposes to construct and operate CATV system in Lehman Township, Lake Township, and the "Harveys Lake" area, the record in this proceeding contains no evidence that it has done so, or even that the commencement of service is imminent. However, we wish to make clear that CATV systems within the purview of sec. 74.1107 of the rules may not extend the signals of any television station beyond the grade B contour of that station without first obtaining Commission approval without respect to whether the licensee or permittee of a television broadcast station has interposed objections to the proposed operation. Unless a hearing is waived, the public interest determination, which is a prerequisite to Commission approval, will be made only after a full evidentiary hearing. While a different procedure is followed with respect to a CATV system which was in operation and which was distributing distant signals on or before February 15, 1966, none of Back Mountain's CATV systems in the enumerated areas were in operation on that date.
8. Dallas Borough, Dallas Township, and Kingston Township are separate localities with legally defined boundaries and each has its own municipal government. For the purposes of section 74.1107, therefore, the CATV facility serving each community must be considered as a separate and distinct system. Booth American Company, 4 FCC 2d 509 (1966). Each system is within the predicted grade A contours of WBRE-TV and WNEP-TV in Wilkes Barre, Pa., and WDAU-TV in Scranton, Pa. Scranton-Wilkes Barre is ranked by the American Research Bureau as the 70th television market, based on net weekly circulation figures for 1965. In view of the foregoing, each of the Back Mountain CATV systems comes within the provisions of section 74.1107 of the rules as "one operating within the predicted grade A contour of a television broadcast station in the 100 largest markets" and which may not extend the signal of a television station beyond that station's grade B contour without prior Commission approval.
9. Back Mountain carries the signals of the following television stations:
WDAU-TV, channel 22 Scranton, Pa.
WNEP-TV, channel 16 Wilkes Barre, Pa.
WBRE-TV, channel 28 Do.
WVIA-TV, channel 44 Do.
KYW-TV, channel 3 Philadelphia, Pa.
WFIL-TV, channel 6 Do.
WNEW-TV, channel 5 New York, N.Y.
WOR-TV, channel 9 Do.
WPIX-TV, channel 11 Do.
WNBF-TV, channel 12 Binghamton, N.Y.
By letter, dated September 20, 1966, Back Mountain advised the Commission that 30 days after receipt of the letter by the Commission, it intended to carry the following additional television signals:
WPHL-TV, channel 17 Philadelphia, Pa.
WIBF-TV, channel 29 Do.
WKBS-TV, channel 48 Do.
All television signals carried by the Back Mountain CATV systems are received directly off the air at the antenna site located on Chestnut Ridge in Luzerne
10. Since the CATV systems located in Dallas Borough, Dallas Township, and Kingston Township are within the predicted grade A contours of stations WDAU-TV, WBRE-TV, and WNEP-TV and [*739] the predicted grade B contours of stations WNBF-TV and WVIA-TV, carriage of these stations is permissible under the rules. Buckeye Cablevision, Inc., 3 FCC 2d 798 (1966); Mission Cable TV, Inc., and Trans-Video Corp., 4 FCC 2d 236 (1966); Booth American Co., 4 FCC 2d 509 (1966); Telesystems Corporation, 4 FCC 2d 628. However, all of the communities in which Back Mountain operates CATV systems lie beyond the predicted grade B contours of the following stations: KYW-TV, Philadelphia, Pa.; WFIL-TV, Philadelphia, Pa.; WNEW-TV, New York, N.Y.; WOR-TV, New York, N.Y.; WPIX-TV, New York, N.Y.; WPHL-TV, Philadelphia, Pa.; WIBF-TV, Philadelphia, Pa.; and WKBS-TV, Philadelphia, Pa. At no time before commencing operation in any of the areas in which it provides service did Back Mountain request permission to extend the signals of the Philadelphia and New York stations beyond their predicted grade B contours, and no such permission has been granted by the Commission. Since service was instituted after February 15, 1966, such permission was required under section 74.1107.
11. The record does not disclose whether Back Mountain has commenced delivery of the three additional stations mentioned in its September 20, 1966, letter, but it is apparent that the CATV operator intends to provide such service in the near future if it is not already doing so. In any event, the record establishes that the signals of several television stations are being extended beyond their predicted grade B contours by Back Mountain CATV systems in Dallas Borough, Dallas Township, and Kingston Township in violation of section 74.1107 of the rules and section 312(b) of the Communications Act.
12. With respect to the question of compliance with section 74.1105 of the rules, the record reflects that on March 1, 1965, Back Mountain wrote identical letters to WBRE-TV and WNEP-TV, Wilkes-Barre, Pa., and WDAU-TV, Scranton, Pa., stating that it was "preparing to commence construction and installation of a community antenna television system on or about March 10, 1965." The letter did not identify the communities to be served or the distant signals to be distributed. The above letter constituted the only written notice by Back Mountain to stations placing a grade B signal over the communities in which it operates its CATV systems.
13. As previously stated, section 74.1105 requires that the notice by the CATV operator to the licensees and permittees of television stations within whose predicted grade B contours the system operates or proposes to operate must contain "the name and address of the system, identification of the community to be served, the television signals to be distributed, and the estimated time operations will commence." Manifestly, the March 1, 1965, letter to local stations in Scranton and Wilkes-Barre does not constitute compliance with these notice requirements. Back Mountain argues, however, that it should be deemed in substantial compliance with section 74.1105 because, in addition to the letter of March 1, 1965, the record shows that local television stations were aware of Back Mountain's CATV plans. Assuming this to be so, we cannot accept such knowledge on the part of the licensees and permittees of local television stations as a substitute for compliance with [*740] the requirements of section 74.1105. Our CATV rules are designed to provide for orderly consideration of important public interest questions raised by CATV operations. Section 74.1105 is an integral part of such procedure, requiring the CATV to alert not only all stations which may be affected by its proposed operation but also the Commission at least 30 days prior to the commencement of service, so that appropriate action may be taken where such operation may be inimical to the public interest. The CATV rules were released on March 8, 1966, and they were published in the Federal Register on March 17, 1966. Section 74.1105 was expressly made applicable to any CATV system which commenced the carriage of television signals subsequent to the March 17, 1966, date. Back Mountain had ample time to give notice in the form and manner specified by section 74.1105. In the circumstances we conclude that a violation of section 74.1105
is established by this record.
14. The remaining issue presented is whether the foregoing requires the issuance of an order directing Back Mountain to cease and desist from further operation of its CATV systems in violation of the rules. Back Mountain and the township of Kingston submit that the substantive requirements imposed upon the conduct of its business under sections 74.1105 and 74.1107 of the Commission's rules exceed the authority of the Commission and infringe unlawfully upon rights of Back Mountain and residents of Kingston protected by the first and fifth amendments to the United States Constitution. Back Mountain and the township of Kingston have jointly filed a demand for oral argument before the Commission, en banc, claiming that due process of law requires oral argument on the constitutional questions raised in this proceeding. Our position with respect to our authority and the validity of our rules was set forth in the Second Report and Order, 2 FCC 2d 725 at 729-734 and 793-797. We adhere to the views therein expressed, which we believe dispose of the questions raised. The cases cited therein, and particularly NBC v. United States, 319 U.S. 190; Carter Mountain Transmission Corp. v. Federal Communications Commission, 321 F. 2d 359 (C.A.D.C.), cert. den. 375 U.S. 951; and Idaho Microwave, Inc. v. Federal Communications Commission, 352 F. 2d 729 (C.A.D.C.), are also dispositive of these constitutional arguments. No purpose would be served by oral argument. n4
n4 An opposition to the request for oral argument was filed by the Broadcast Bureau on Nov. 17, 1966, and a joint reply to the opposition was filed by Back Mountain and the township of Kingston on Nov. 21, 1966.
15. In the course of the hearing, Back Mountain offered evidence concerning expenditures and commitments in connection with the construction and operation of its several CATV systems. It also offered to show that a CATV system which has been operating in the Wilkes Barre area for a number of years is carrying New York and Philadelphia television signals. n5 Back Mountain argues that to preclude the carriage of distant signals by its CATV system would be discriminatory and unduly burdensome; that, therefore, the evidence is relevant and admissible in order to determine whether a cease and desist order should issue in this proceeding. The hearing examiner rejected the [*741] evidence as irrelevant, and we agree with his ruling. These matters are considered in connection with an application for Commission approval for the extension of television signals beyond their grade B contours, but no consideration will be given to such an application until respondent is in compliance with the rules. As we stated in Booth American Company, 4 FCC 2d at 516, where similar arguments were advanced and rejected: "* * * the public interest would be affected adversely by the favorable exercise of discretion which would permit carriage of distant signals before all relevant facts in the particular case have been ascertained." The public interest requires that the respondent herein likewise be in compliance with the rules before consideration is given to authorizing the carriage of distant signals by its CATV systems.
n5 CATV systems which had been carrying distant signals on and before Feb.15, 1966, may continue to carry such signals under the "grandfather" clause of sec. 74.1107(d).
16. In summary, the record in this proceeding establishes: (a) That Back Mountain owns and operates CATV systems, as defined by section 74.1101(a) of the rules, in Dallas Borough, Dallas Township, and Kingston Township, Pa.; (b) that each system is a separate and distinct operation within
the contemplation of sections 74.1105 and 74.1107, and subject to the provisions thereof; (c) that Back Mountain's CATV systems operate within the predicted grade A contours of television stations in the Scranton-Wilkes Barre television market, which is the 70th largest television market; (d) that Back Mountain's CATV systems began operation after February 15, 1966; (e) that Back Mountain has been extending the signals of three New York City and two Philadelphia stations beyond their predicted grade B contours on its Dallas Borough system since April 27, 1966, on its Kingston Township system since May 6, 1966, and on its Dalls Township system since May 21, 1966; (f) that Back Mountain proposes in the immediate future to extend the signals of three additional Philadelphia television stations beyond their grade B contours on each of its aforementioned CATV systems; (g) that Back Mountain has not requested and obtained Commission approval to carry distant television stations on its CATV systems; and (h) that Back Mountain did not give notice of the commencement of CATV service in the form and manner prescribed by section 74.1105 of the rules to the licensees and permittees of television stations within whose predicted grade B contours the CATV systems are operating. We, therefore, conclude that Back Mountain is operating its CATV systems in Dallas Borough, Dallas Township, and Kingston Township in violation of section 312(b) of the Communications Act and sections 74.1105 and 74.1107 of the Commission's rules. n6 We also conclude for the reasons stated herein and in Buckeye Cablevision, Inc., supra, Mission Cable TV, Inc., supra, and Booth American Company, supra, that the public interest requires issuance of an order requiring Back Mountain to cease and desist from
the unlawful operation of its CATV systems.
n6 Sec. 502 of the Communications Act provides as follows: "Any person who willfully and knowingly violates any rule, regulation, restriction, or condition made or imposed by the Commission under authority of this act, or any rule, regulation, restriction, or condition made or imposed by any international radio or wire communications treaty or convention, or regulations annexed thereto, to which the United States is or may hereafter become a party, shall, in addition to any other penalties provided by law, be punished, upon conviction thereof, by a fine of not more than $500 for each and every day during which such offense occurs."
[*742] 17. We shall adopt the same timetable for compliance with our decision which we used in Jackson TV Cable Company, 4 FCC 2d 979 (1966). Back Mountain must comply with this cease and desist order within 2 days, excluding Saturdays, Sundays, and holidays, if any, after its release, unless it notifies the Commission during that period of its intention to seek judicial review of this order; in that event Back Mountain will be afforded 14 days from the release date of this order within which to file its appeal and seek a stay of this order, and if it appeals and seeks such a judicial stay, this order will be stayed for 35 days from its date of release or until the court acts on the stay request, whichever occurs sooner.
18. Accordingly, It is ordered, This 23d day of November, 1966;
(1) That the demand for oral argument filed jointly on November 9, 1966, by Back Mountain Telecable, Inc., and the township of Kingston Is denied;
(2) That, within 2 days after the release of this decision and order, Back Mountain Telecable, Inc., Cease and desist from the operation of its community antenna television systems in Dallas Borough, Dallas Township, and Kingston Township until 30 days after notice is given to the licensees and permittees of all television broadcast stations within whose predicted grade B contours such CATV systems operate and a copy of each such notice is furnished to the Commission as required by section 74.1105 of the Commission's rules; and
(3) That, within 2 days after the release of this decision and order, Back Mountain Telecable, Inc., Cease and desist from the operation of its community antenna television systems in Dallas Borough, Dallas Township, and Kingston Township, Pa., in such a way as to extend the signals of any television broadcast station beyond its grade B contour in violation of section 74.1107 of the Commission's rules, and specifically to Cease and desist from supplying to its subscribers the signals of stations WNEP-TV, WOR-TV, and WPIX-TV, New York, N.Y., and stations KYW-TV and WFIL-TV, Philadelphia, Pa.; and from commencement of carriage to such subscribers of the signals of stations WPHL-TV, WIBF-TV, and WKBS-TV, Philadelphia, Pa.; Provided that, if Back Mountain Telecable, Inc., notifies the Commission with 2 days of the release of this order (exclusive of Saturdays, Sundays, or holidays, if any) that it intends to seek judicial review and seeks judicial review and a judicial stay within 14 days of the date of the release of this order, this order shall be stayed for 35 days from its date of release or until judicial determination of the motion for a stay, whichever occurs sooner.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
This proceeding arises out of an informal complaint made to the Commission on May 2, 1966, that Back Mountain Telecable (respondent) [*743] was violating Commission rules by furnishing television signals by cable to the citizens of some small communities in Pennsylvania. On September 14, 1966, the Commission released an order providing for a hearing as a necessary preliminary to issuance of a cease and desist order against respondent. The hearing was held in October, the record was closed on November 2, 1966, and the Commission now issues a final order giving respondent 2 days to terminate operations.
The township of Kingston and the borough of Dallas, two local governing bodies of areas in which respondent's customers live, have in the meantime petitioned the Commission to give them a hearing and permit oral argument on the issue whether requiring this respondent to cease operating and to deprive the citizens of these communities of the services provided by respondent is not in violation of the constitutional rights of respondent and of the citizens represented by these local governments.
The Commission peremptorily denies this request with the statement that the Commission's authority and validity of the rules is "set forth in the Second Report and Order, 2 FCC 2d 725, at 729-734 and 793-797," and by citation of three cases. This answer is plainly inadequate and unresponsive to the petition. The cited portions of the Commission's prior report and order make no reference whatever to the Constitution or any constitutional arguments, being wholly concerned with statutory interpretation and arguments drawn therefrom. Of the three cases cited, two were decided before promulgation of the present rules, and, therefore, could not be concerned with their validity; and all three cases cited involved the Commission's authority over enterprises involved in radio transmission and subject to the licensing power of the Commission. The present case involves an order requiring cessation of operation by an intrastate enterprise making no radio transmissions and not subject to the Commission's licensing authority. Conceding, arguendo, that some of the same principles might apply to these different classes of cases, this is not so self-evident that the Commission should foreclose argument and consideration of the issue. In any event, it is elementary that a general rule may be constitutional in some situations and unconstitutional in others, or unconstitutional in application. Yick Wo v. Hopkins, 118 U.S. 356 (1886).
The Commission is constantly confronted with situations in which its action is sought to permit the institution of service or the consummation of business transactions, and delay in these situations usually imposes some hardship on applicants. Yet the Commission seldom finds itself able to move as rapidly as it has moved here -- where inaction would cause harm to no one and action has the effect of denying service and imposing hardship (whether justified by other considerations or not).
In all these circumstances to refuse even to hear or consider constitutional objections to the action being taken seems to me to be arbitrary and unreasonable. Accordingly, I am compelled to dissent.