Bazelon, Chief Judge, and Robinson and MacKinnon, Circuit Judges.
UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
America, Respondents, Wonderland Ventures, Inc.,
Nos. 23704, 23828 1971.CDC.54
Petitioner, Poole Broadcasting Company, the licensee of VHF television station WJRT-TV in Flint, Michigan, seeks review of two orders of the Federal Communications Commission: (1) an Order and Certificate released November 19, 1969, granting intervenor Michigan Bell Telephone Company authority pursuant to Section 214 of the Communications Act, 47 U.S.C. 214, to construct and operate CATV channel facilities in and around Flint, Michigan; and (2) a Memorandum Opinion and Order released December 24, 1969, denying petitioner's request that intervenor Wonderland Ventures, Inc., be prohibited from carrying four Detroit stations and one Windsor, Ontario, station as part of its CATV offering in Flint. *fn1 We affirm the Commission's first order, but vacate the second and remand for reconsideration. I. The Background of this Litigation
On April 13, 1966, intervenor Wonderland gave notice of an agreement with Michigan Bell for construction of a CATV system serving Flint, Michigan. The proposed system would carry the signals of five stations located in the Detroit-Windsor area and the signals of several other stations located in Flint and neighboring cities. Sixty days later, on June 13, 1966, petitioner Poole filed with the Commission a petition under 47 C.F.R. § 74.1109, seeking an order preventing Wonderland from carrying the signals of the Detroit-Windsor stations.
Section 74.1109 provides a procedure for television operators to seek from the Commission ad hoc rulings where special factual circumstances may warrant departures from the general rules. Poole, in seeking such relief, alleged that a problem was presented similar to that referred to in footnote 69 of the Commission's Second Report and Order. *fn2 There the Commission took note of a situation that might call for a variance from the general distant signal rule, which allows a CATV system to operate so long as it does not involve the extension of a signal beyond its Grade B coverage into one of the top 100 major television markets. *fn3 The Commission stated:
With possibly only the rarest exception, CATV activity which does not involve extension of a signal beyond its Grade B contour may freely continue. n.69
n.69 If two major markets each fall within one another's grade B contour (e. g., Washington and Baltimore), this does not mean that there is no question as to the carriage by a Baltimore CATV system of the signals of Washington; for in doing so and thus equalizing the quality of the more distant Washington signals, it might be changing the viewing habits of the Baltimore population and thus affecting the development of the Baltimore independent UHF station or stations. Such instances rarely arise, and can, we think, be dealt with by appropriate petition or Commission consideration in the unusual case where a problem of this nature might arise. *fn4
Since Flint was the 46th television market in the country and Detroit the sixth, and since Flint lies within the Grade B contours of the Detroit-Windsor stations, a footnote 69 question was presented.
Because Poole's petition was filed more than thirty days after Wonderland had given notice, the mandatory stay provisions of Section 74.1105(c) of the rules (forbidding implementation of proposed CATV service pending resolution of requests for relief) were inapplicable. Wonderland filed an opposition pleading on June 29, 1966, urging denial of the Poole petition and stating that "the first twenty-seven mile section of this system is already installed, and negotiations are proceeding with regard to installing additional sections." The Commission took no action on the matter, and on September 30, 1966, Michigan Bell commenced operation of the initial section of the Flint CATV system.
As of that date, the Commission had asserted jurisdiction over only the rates charged by common carriers for facilities designed to provide local distribution service to CATV operators. *fn5 Not until October 20, 1966, did the Commission indicate that it would begin an investigation to consider whether Section 214 of the Communications Act, 47 U.S.C. 214, required Commission certificates of public convenience and necessity prior to construction and operation of such facilities by common carriers. Michigan Bell continued under its contract with Wonderland to construct and operate CATV distribution facilities in Flint. On June 25, 1968, the Commission finally held that it did have jurisdiction under Section 214, *fn6 and it directed various common carriers, including Michigan Bell, to file applications under Section 214 for all CATV construction theretofore undertaken. In addition, it ordered these companies to cease and desist from further construction and operation of CATV facilities until Section 214 certificates had been obtained. The operation of facilities that were completed on or before the release date of the decision, however, was permitted if application for Section 214 certificates were filed and if certain other conditions were met. By this time, some thirty-five percent of Flint had been provided with CATV facilities in operation.
On August 6, 1968, Michigan Bell filed a request for certification pursuant to Section 214 for its CATV local distribution system, existing and proposed, in Flint. After notice of the filing of the application became public, Poole asked that the Commission consider in the Section 214 proceeding the objections that Poole had previously filed to Wonderland's proposal to transmit the five Detroit-Windsor signals. It further asked for the issuance of an order limiting the carriage of the challenged singnals to the CATV system's then existing dimensions, at least pending resolution of the rule-making proceeding just announced on December 13, 1968, in a Notice of Proposed Rule-Making and Notice of Inquiry, Docket No. 18397. *fn7 If the proposed rules became applicable to Wonderland, it would not be able to broadcast the Detroit-Windsor signals without obtaining retransmission consent. *fn8 Pending conclusion of the rule-making proceeding, the Commission deferred action on all petitions under Section 74.1109 for waiver of the distant signal rules; but the Commission "grandfathered" CATV systems which already carried Grade B signals into another major market. *fn9
Almost a year later, on November 10, 1969, the Commission released the first order challenged in this court. It granted the Section 214 certificate of convenience and necessity sought by Michigan Bell, stating that the grant is "without prejudice to any Commission action which may hereafter be indicated as a result of . . . the request . . . of Poole Broadcasting Company under Section 74.1109 of the Commission's Rules and pursuant to footnote 69 of the Second Report and Order on CATV." Two weeks later, Poole filed a petition for review of the Commission's order in this court (No. 23,704) and simultaneously filed with the Commission a motion for stay of the order pending judicial review. Poole's motion argued that the establishment of expanded Detroit-Windsor service throughout Flint and surrounding areas would render moot both judicial review of the grant to Michigan Bell and the underlying footnote 69 issue, in view of the Commission's long-established reluctance to disrupt services which any subscribers had become accustomed to receive.
On December 24, 1969, before Michigan Bell was able to complete any further extensions of its Flint facilities as authorized by its Section 214 certificate, the Commission released two separate orders. The first granted Poole's motion for a stay to the extent of "precluding CATV carriage of Detroit-Windsor signals in areas not presently served, pending judicial review." The other considered and denied Poole's basic request for Section 74.1109 relief. It held that the proposed rules were inapplicable to the already existing Flint CATV system so there was no need to defer ruling on Poole's petition, pending completion of the Docket No. 18397 rule-making proceeding. Applying the previously established policies of the 1966 Second Report and Order, therefore, it found that Poole's showing was inadequate to justify the relief it sought. On December 31, 1969, Poole filed a petition for review of this second order (No. 23,828), and the case was consolidated with No. 23,704. II. The November 10, 1969, Order Granting Michigan Bell Section 214
Poole made no attempt before the Commission or before this court to argue that the Commission has a general obligation to condition its Section 214 certifications so as to regulate CATV operators. Poole's quarrel in these cases is not directly with Michigan Bell, but with Wonderland. Even if the Commission had granted Poole's Section 74.1109 petition for special relief, there would be no ground for stopping construction by Michigan Bell, since seven of the twelve channels that Wonderland intends to ...