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Philadelphia Community Cable Coalition v. Federal Communications Commission

argued: February 12, 1976.

PHILADELPHIA COMMUNITY CABLE COALITION, SYNAPSE COMMUNICATIONS COLLECTIVE, INC., CONCERNED COMMUNICATIONS, INC., RALPH M. MOORE, JR., LEANNE SMITH KEYS, AND JOHN F. O'ROURKE, PETITIONERS IN NO. 75-1293,
v.
FEDERAL COMMUNICATIONS COMMISSION, AND UNITED STATES OF AMERICA, RESPONDENTS; NORTH PHILADELPHIA CABLE TELEVISION CORPORATION AND PHILADELPHIA CABLE TELEVISION COMPANY, INTERVENORS; PHILADELPHIA COMMUNITY CABLE COALITION, PETITIONER IN NO. 75-1700, V. FEDERAL COMMUNICATIONS COMMISSION, AND THE UNITED STATES OF AMERICA, RESPONDENTS; NORTH PHILADELPHIA CABLE TELEVISION CORPORATION AND PHILADELPHIA CABLE TELEVISION COMPANY, INTERVENORS



On petition to vacate and set aside an order of the Federal Communications Commission.

Aldisert, Gibbons and Rosenn, Circuit Judges. Rosenn, Circuit Judge, concurring.

Author: Per Curiam

We have considered the various contentions raised by the petitions to vacate and set aside orders of the Federal Communications Commission. While we deny the petitions, we are constrained to express our concern that the FCC has no rules to regulate transfers of ownership of cable television franchises. The possibility of "trafficking" in franchises, therefore, is very real.

At present the FCC has delegated these matters to the local authorities -- the City of Philadelphia, in these cases -- under the FCC's structured dualism approach to cable regulation. We have been advised by brief and at oral argument that the FCC now has under active consideration the question whether it should undertake to regulate transfers. Clarification of the Cable Television Rules and Notice of Proposed Rulemaking and Inquiry, 46 F.C.C.2d 175, 198-99 (1974). Thus, there is some indication that the FCC will promulgate rules or insist that the local authorities do so. There is a serious question whether such delegation is consistent with the duties of the Commission under § 310(b) of the Communications Act, 47 U.S.C. § 310(b). Cf. Crowder v. F.C.C., 130 U.S. App. D.C. 198, 399 F.2d 569, 571-73 (1968), cert. denied, 393 U.S. 962, 21 L. Ed. 2d 375, 89 S. Ct. 400 (1968). Were a broadcast station implicated, the provisions of 47 C.F.R. § 1.597(d) would come into play, requiring a careful examination of transfer and assignment applications "on a case-to-case basis, to determine whether any characteristics of trafficking remain." We will not disturb the Commission's conclusions on trafficking because the franchises in issue here expire on December 12, 1976. During the processing of franchise renewal applications, questions presented on these petitions as to ownership and acquisition thereof may be presented.

We will deny the petition of Philadelphia Community Cable Coalition, Synapse Communications Collective, Inc., Concerned Communications, Inc., Ralph M. Moore, Jr., Leanne Smith Keys, and John F. O'Rourke at No. 75-1293 for the reasons set forth by the Commission. Philadelphia Cable Television Co., 49 F.C.C.2d 274 (1974), on reconsideration, 51 F.C.C.2d 530 (1975). Similarly, we will deny the petition of Philadelphia Cable Coalition at No. 75-1700 for the reasons set forth by the Commission. North Philadelphia Cable Television Corp., 53 F.C.C.2d 600 (1975).

Costs taxed against petitioners.

ROSENN, Circuit Judge, concurring.

I join the majority's disposition of these cases and its expression of concern about the trafficking issue. I write to express another concern -- that the Commission's actions may constitute an abuse of its rulemaking process.

The Commission's current regulatory scheme for cable television systems originated with its Cable Television Report and Order, 36 FCC 2d 143 (1972). The Order established a "dual jurisdiction" of cable television regulation. Local municipal governments franchise cable operators, delineate local service areas, and fashion regulatory programs suited to local needs. The Commission, on the other hand, establishes minimum criteria, 47 C.F.R. § 76.31, with which the local franchising authorities must comply. The FCC's role is limited to satisfying itself that its criteria are met and that the applicant is otherwise qualified, at which point it grants a certificate of compliance.

The FCC subsequently reconsidered its regulations and stated that for franchises granted before promulgation of the rules, only "substantial compliance" with the rules would be required until March 1977 or the expiration of the current franchise period, whichever occurred first. Reconsideration of Cable Television Report and Order, 46 FCC 2d 326, 366 (1972). This change was incorporated into the rules. 47 C.F.R. § 76.31(6). Later FCC decisions stated that "substantial compliance" would be given a liberal construction and the Commission would deny certification only in the "extreme case" of deviance from its franchise standards. CATV of Rockford, Inc., 38 FCC 2d 10, 15-16 (1972). In Comcast Corporation, 42 FCC 2d 420, 422 (1973), the Commission stated that only where a cable franchise was "flagrantly violative" of the rules would a certificate be denied.

The primary thrust of petitioners' attack is based on one of the Commission's minimum standards, 47 C.F.R. § 76.31(a)(1), which requires for certification that:

The franchisee's legal, character, financial, technical, and other qualifications, and the adequacy and feasibility of its construction arrangements, have been approved by the franchising authority as part of a full public proceeding affording due process.

The petitioners contend that corporate control over the intervenors has been effectively transferred to another entity. Communications Properties, Inc. (CPI) of Austin, Texas, which now controls, according to petitioners, three of the six Philadelphia cable franchises. Since control has been transferred, petitioners in effect argue that CPI is now the franchisee and its qualifications have not been publicly examined as required by section 76.31(a)(1). Thus, petitioners conclude, the franchises are not in actual or substantial compliance, and the dilution of the ...


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