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
JUDGES:
COMMISSIONER LEE FOR THE
COMMISSION: COMMISSIONER BARTLEY ABSENT; COMMISSIONER
LOEVINGER DISSENTING AND ISSUING A STATEMENT IN WHICH COMMISSIONERJOHNSON
JOINS.
OPINION:
[*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
County, Pa.
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.
DISSENTBY: LOEVINGER
DISSENT:
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.