FCC’s Ban on Apartment Video Exclusives Upheld by D.C. Circuit
An FCC ban on exclusive deals between apartment buildings and pay-TV providers was upheld Tuesday in a ruling by the U.S. Appeals Court for the District of Columbia Circuit. It dismissed arguments by the cable industry that a section of the Communications Act the commission relied on in its 2007 order didn’t cover the deals. Judge David Tatel wrote the ruling, endorsed by Judges Merrick Garland and Laurence Silberman. USTelecom, Verizon and AT&T, an intervenor in NCTA v. FCC, said the ruling bolsters video competition.
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Tatel referred twice to last month’s Supreme Court ruling upholding FCC indecency policy (CD April 29 p2) to say that the commission’s reversal from a position it had taken in 2003 was properly explained. “An agency is free to change its mind so long as it supplies ‘a reasoned analysis,'” Tatel wrote. Quoting the Fox indecency decision, he said the FCC “'need not demonstrate to a court’s satisfaction that the reasons for the new policy are better than the reasons for the old one.'” So, “the existence of contrary agency precedent gives us no more power than usual to question the Commission’s substantive determinations.”
Congress clearly had cable programming deals in mind in writing section 628(b) of the Communications Act, which the FCC relied on, but that doesn’t keep it from being applied in other situations, Tatel wrote. “We find nothing in section 628 that unambiguously forecloses the Commission’s interpretation,” he said. “To be sure, if Congress specifically intended to forbid practices having an anti- competitive effect on service generally, focusing only on two particular kinds of programming would have been an odd way to accomplish that result.”
The contention of property owners’ groups that the commission overstepped its authority in regulating the real estate industry have “little merit,” Tatel wrote. “The terms of the challenged prohibition apply only to cable companies, however, and they neither require nor prohibit any action by MDUs,” he added. “That agencies may change their minds is, after all, a matter of hornbook law [a basic, well-known principle that needs no further explanation] -- all the more so where, as here, the initial decision not to act was based on the insufficiency of the record.”
The NCTA hasn’t decided whether to challenge the ruling before the full D.C. Circuit or in the Supreme Court, a spokesman said. He wouldn’t discuss the holding. An FCC spokesman had no comment.
An AT&T spokesman said the ruling upholds FCC “authority and prohibits unfair practices by cable companies that limit competition and consumer choice for video service.” Now it should “stop them from using exclusive access to video programming to do the same,” he added. The ruling is “clear judicial blessing” for commissioners to reverse a Media Bureau decision that Cox Communications didn’t unlawfully withhold sports programming from the telco (CD May 4 p10), he added. Verizon thinks the ruling shows that the FCC can deal with “cable companies’ refusal to provide competitors with access to regional sports programming,” Michael Glover, Verizon deputy general counsel, said in a written statement.