In the Matter of THE GENERAL TELEPHONE SYSTEM, AND UNITED UTILITIES, INC., CO.'S Tariffs
for Channel Service for Use by Community Antenna Television System
Docket No. 17098
FEDERAL COMMUNICATIONS COMMISSION
6 F.C.C.2d 434 (1967); 9 Rad. Reg. 2d (P & F) 158
RELEASE-NUMBER: FCC 67-59
January 11, 1967 Adopted
[*434] At a session of the Federal Communications Commission held at its offices in Washington, D.C., on the 11th day of January 1967;
1. The Commission has under consideration tariff I.C.C. No. 1 of General Telephone Co. of Indiana; tariff F.C.C. No. 2 of General Telephone Co. of Michigan; tariff F.C.C. No. 2 of General Telephone Co. of Ohio; tariff F.C.C. No. 2 of General Telephone Co. of Pennsylvania; and tariff F.C.C. No. 8 of General Telephone Co. of the Southwest. The above-named companies are operating subsidiaries of General Telephone & Electronics Corp. (General Telephone System). All of these tariffs are now in effect and purport to offer channel service for use by Community Antenna Television Systems (CATVs). They were filed following the Commission's decision of June 22, 1966, denying the petition of G.T. & E. Service Corp. (a subsidiary of General Telephone & Electronics Corp.) and American Telephone & Telegraph Co. for reconsideration of the Commission's order of April 6, 1966, requiring such tariffs to be filed with this Commission. See 4 F.C.C. 2d 257.
2. The Commission also has under consideration tariff F.C.C. No. 1 of United Inter-Mountain Telephone Co.; tariff F.C.C. No. 1 of United Telephone Co. of Arkansas; tariff F.C.C. No. 1 of United Telephone Co. of the Carolinas, Inc.; unnumbered tariff of United Telephone Co. of Iowa (sec. 29, State tariff); tariff F.C.C. No. 1 of United Telephone Co. of Kansas, Inc.; tariff F.C.C. No. 1 of United Telephone Co. of Missouri; unnumbered tariff of United Telephone Co. of Ohio (secs. 27 and 30, State tariff); tariff F.C.C. No. 4 of United Telephone Co. of the Northwest; and tariff F.C.C. No. 1 of the United Telephone Co. of Pennsylvania. These are tariffs of companies that are operating subsidiaries of United Utilities, Inc., and purport to offer channel service for use by CATVs.
[*435] 3. The Commission has reviewed the provisions in the tariffs specified in paragraphs 1 and 2 above and is of the opinion that there are numerous provisions therein that do not appear to be in conformance with the form and content requirements of part 61 (47 CFR, pt. 61) of the Commission's rules and that the provisions of these tariffs present substantive questions as to whether they are lawful within the meaning of sections 201(b), 202(a), and 203 of the Communications Act of 1934, as amended.
4. The Commission is unable to determine at this time whether or not such tariffs are or will be just and reasonable or otherwise lawful and is of the opinion that there should be an investigation into the lawfulness thereof. Also, the Commission is of the opinion that these tariffs raise (a) a question as to the applicability of section 214 of the act to these particular companies and to the services here involved and (b) a question as to the extent of the Commission's jurisdiction, if any, over pole line attachment arrangements with CATV operators and how such jurisdiction, if it exists, should be exercised under the circumstances of this case.
5. It is ordered, That, pursuant to the provisions of sections 201, 202, 203, 204, 205, 214, 218, and 403 of the Communications Act of 1934, as amended, an investigation is instituted into the lawfulness of the tariffs of the companies specified in paragraphs 1 and 2 hereof and any amendments, cancellations, and successive issues thereof, and into the questions concerning section 214 of the act and pole line attachments;
6. It is further ordered, That, without in any way limiting the scope of the investigation, it shall include consideration of the following:
(1) Whether the charges, classifications, practices, and regulations published in the aforesaid tariffs are or will be unjust and unreasonable within the meaning of section 201(b) of the act;
(2) Whether such charges, classifications, practices, and regulations will, or could be applied to, subject any person or class of persons to unjust or unreasonable discrimination or give any undue or unreasonable preference or prejudice to any person, class of persons, or locality, within the meaning of section 202(a) of the act;
(3) Whether the aforesaid tariffs conform to the requirements of section 203 of the act and part 61 of our rules implementing that section;
(4) Whether any of the respondents are subject to the requirements of section 214 of the act, and part 63 of our rules implementing that section and, if so, whether these requirements have been met as to the facilities used to offer CATV channel service under the aforesaid tariffs and what action, if any, the Commission should take with respect thereto.
(5) The policies and practices of respondents with respect to pole line attachment agreements or arrangements with CATV operators;
(6) Whether the Commission has jurisdiction over the aforesaid pole line attachment policies and practices and, if so, the extent and nature of such jurisdiction and what action, if any, the Commission should take with respect thereto;
(7) If any of the charges, classifications, practices, and regulations in the aforesaid tariffs are found to be unlawful, whether the Commission should prescribe charges, classifications, practices, and regulations for the service governed by the tariffs and, if so, what should be so prescribed.
7. It is further ordered, That a hearing be held in this proceeding at the Commission's offices in Washington, D.C., at a time to be specified, and that the examiner to be designated to preside at the hearing shall certify the record, without preparation of an initial or recommended [*436] decision, and the Chief of the Common Carrier Bureau shall thereafter issue a recommended decision which shall be subject to the submittal of exceptions and requests for oral argument as provided in 47 CFR 1.276 and 1.277, after which the Commission shall issue its decision as provided in 47 CFR 1.282;
8. It is further ordered, That the companies named in paragraphs 1 and 2 hereof are made party respondents hereto, and that General Telephone & Electronics Corp.; United Utilities, Inc.; National Community Television Association, Inc.; Pennsylvania Community Antenna Television Association, Inc.; Texas CATV Association, Inc.; Warrensburg Cable, Inc.; United States Independent Telephone Association; and the National Association of Railroad & Utilities Commissioners Shall be granted leave to intervene upon the filing of a notice of intention to appear and participate within 20 days of the release date of this order.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
n1 Commissioner Johnson concurs in the opinion, and the views of Professor Davis, insofar as they maintain that the procedures contemplated for this proceeding are unwise and potentially unfair, but expresses no view as to the lawfulness of the procedures.
(RE TELEPHONE COMPANY TARIFFS FOR CATV CHANNEL SERVICE)
The Commission order herein provides for a hearing on a number of specified issues relating to the provisions of a number of telephone company tariffs offering channel service for use by CATVs. I agree that an investigation and hearing of these matters is proper and necessary and concur in all provisions of the order except those provisions of paragraph 7 prescribing the procedure to be followed after the hearing. The comments which follow are directed exclusively at those procedural provisions and are not intended to qualify my concurrence in other provisions of the Commission order.
The order herein provides that after a hearing before an examiner, the record shall be certified to the Commission without any report or decision by the examiner, that the Common Carrier Bureau shall then issue a recommended decision, which shall be subject to exceptions and argument as provided in rules 1.276 and 1.277, and that the Commission decision shall then follow. It is contemplated and implied that the Bureau will sit with the Commission in hearing and passing upon the exceptions to its recommended decision and formulating the final decision.
I believe that this procedure is wrong for all of the reasons stated in my dissenting opinions in the Matter of A.T. & T. Charges, etc., 2 FCC 2d 142, 157 (1965), 2 FCC 2d 877, 883 (1966), 5 FCC 2d 89, 92 (1966). The reasons were summarized at the beginning of the first opinion cited as follows:
This procedure is unfair not only to the telephone company, it is also unfair to the public, which is denied effective representation in this matter; it is [*437] an inefficient and impractical way to conduct an inquiry of this magnitude and importance; it is contrary to the expressed intent of Congress and the recommendations of the Administrative Conference of the United States; and it is an unreasonable method of seeking to arrive at an informed, wise, and impartial decision.
Although the instant case has more of a legislative cast than the A.T. & T. rate proceeding, all of the reasons stated above apply to the instant matter. In addition, this case has a complication not present in the A.T. & T. rate proceeding. The Commission has two organizational units besides the Common Carrier Bureau which are concerned with CATV matters, and one, or perhaps both, are likely to participate in the instant proceedings. These units, which are the CATV Task Force and the Broadcast Bureau, have no special status under the ex parte rules, as does the Common Carrier Bureau (rule 1.1209). Accordingly, the Commission is compelled by its rules to treat the CATV Task Force and the Broadcast Bureau as ordinary parties, not entitled to participate in decision making, in these proceedings. However, the CATV Task Force and the Broadcast Bureau have had less to do with initiating and investigating this matter than the Common Carrier Bureau, and have no more reason to be advocates for anything other than the public interest than the Common Carrier Bureau. All of the reasons suggested by the Commission opinion in the A.T. & T. matter for permitting ex parte participation by the Common Carrier Bureau apply here with equal or greater force to the CATV Task Force and the Broadcast Bureau. Yet, the Commission rules forbid this. Surely this anomaly should demonstrate the absurdity of according the Common Carrier Bureau, alone among the Commission organizational units, the privileged position of acting as complainant, investigator, advocate, and adjudicator all in the same proceeding. Furthermore, to permit that in this case would seriously impair the Commission's ability to weigh the views of its staff fairly and responsibly, since the views of the Common Carrier Bureau would be given a very great advantage and disproportionate weight in relation to the views of other equally qualified and disinterested units of the Commission staff.
Another element that is ignored by the Commission order here is the fact that the proceeding prescribed by the order is plainly contrary to F.C.C. rules and regulations. Rule 1.274 provides:
Unless the Commission finds that due and timely execution of its functions imperatively and unavoidably requires that no recommended decision be issued, the presiding officer will prepare and file a recommended decision, which will be released with the Commission's initial or final decision.
Rules 1.276 and 1.277, referred to in the order, are based upon the foregoing provision and provide for the procedures to review the initial decision prepared as provided in rule 1.274. The Commission here has not made, and cannot properly make, a finding that "due and timely execution of its functions imperatively and unavoidably requires" a procedure contrary to that prescribed by its rules. These rules plainly and expressly apply to rulemaking proceedings as well as adjudicatory proceedings (rule 1.201). The rules provide no special or different procedure for hearings involving tariffs (rules 1.771-1.773) [*438] which are classified by the rules as "rulemaking proceedings" (rule 1.1207(b)).
The most sensible and practical comment on the Commission's procedure in ratemaking cases seems to me to be that of the eminent authority on administrative law, Prof. Kenneth Culp Davis. Commenting of the A.T. & T. rate proceeding, Professor Davis writes:
A good procedural plan to take care of the problem of the (telephone company) case should, in my opinion, have four main objectives: (1) Commissioners' access to specialized understanding, (2) effective affirmative presentations on behalf of all major interests affected, (3) effective testing of each affirmative presentation through cross-examination, rebuttal evidence, and argument, and (4) protection of the decision function from contamination by the advocates. The Commission should aim at maximum achievement of these objectives and should not be content with merely satisfying the minimum requirements of legality.
The procedural order is good to the extent that
it achieves the first objective, but is exceedingly poor in its failure to do
what can easily be done to achieve at least in part the second, the third, and
the fourth objectives.
* * *
"The harm from the Commission's procedural order may lie much less in contamination of the decision function than in crippling the Bureau's advocacy. A major purpose of all legislation providing for administrative regulation of public utilities, including the present statute, is to assign to the regulatory agency the task of protecting the interest of the typical consumer who is in no position to litigate in his own behalf. An order which forbids the Bureau to engage in advocacy for the consumer interest amounts to shirking that statutory responsibility.
* * *
Irrespective of what a court would or should hold about the legality of the arrangement, I think that the procedural order is deficient in allowing more contamination of the deciding function than needs to be allowed. I expect the Bureau to take positions which will differ from [the telephone company's] positions, and I expect the Bureau to try to win for the positions it takes. Even though the Bureau will not be representing a designated party or interest, and even though it will be freely choosing its positions on the basis of what it believes to be sound, still I think that as a matter of good administrative practice an agency should not allow any human being who is trying to win for a particular position to investigate, prepare evidence, present evidence, cross-examine witnesses, and also to participate in making the decision behind the scenes. (Kenneth Culp Davis, "Advocating and Deciding in Rate Cases," 1966 report of A.B.A. Section of Public Utility Law, page 25 et seq.)
Professor Davis then suggests that an appropriate procedure to achieve as much as possible of the four objectives noted might be to permit and instruct the Bureau to advocate the consumer's interest, to permit informal, off-the-record consultation with the Bureau up to the time of filing of a recommended decision, and after the filing of a recommended decision to bar any consultation between Commissioners and anyone who has served as an investigator or advocate in the case, except on the record.
This suggestion seems to be particularly appropriate in a proceeding, such as the instant one, where there is likely to be participation by more than one unit of the Commission staff, and where differing viewpoints are likely to come not only from the private parties to the proceeding but also from the different units of the Commission's own staff. It is difficult to think of any other procedure that will permit the Commission [*439] to consider differences in viewpoints among the units of its staff fairly and rationally. I cannot conceive of any reason why the Commission should permit ex parte representations and arguments to be made by one operating unit of the Commission while denying the same privilege to another operating unit of the Commission in a matter which involves both equally and in the same manner.
The excerpts quoted here do less than justice to the thoughtful article of Professor Davis and the entire article must be read to appreciate the strength of his argument. While his discussion is directed to the A.T. & T. rate proceeding, his argument is applicable to the present proceeding with equal or greater force, and his conclusion is fully apposite this case:
"Whether or not the Commission's procedural order is legal, it is seriously deficient in that it fails to do as much as can be done to achieve the four main objectives -- Commissioners' access to specialized understanding, effective affirmative presentations on behalf of all major interests affected, effective testing of each affirmative presentation, and protection against contamination of the decision functions. The Commission can and should work out a better procedural plan." Ibid.
This is my opinion, too.