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
BY THE COMMISSION: COMMISSIONER LOEVINGER CONCURRING
IN PART AND DISSENTING IN PART AND ISSUING A STATEMENT IN WHICH COMMISSIONER
JOHNSON JOINS.
[*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.