6th Circuit Upholds FCC Video Franchise Order for Telcos
The FCC didn’t overreach its congressional authority in ordering municipalities to expeditiously award franchises to telcos and other new video entrants, the 6th U.S. Appeals Court in Cincinnati ruled Friday. Writing in Alliance for Community Media vs. FCC for a panel of three justices, Judge Guy Cole said the commission “acted well within its statutorily delineated authority in enacting the order,” approved 3-2 by commissioners in December 2006. “There exists sufficient evidence to indicate that the FCC did not engage in arbitrary and capricious rulemaking activity.”
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The Alliance, supported by local franchising authorities and the NCTA, had said Congress never gave the commission the ability to intervene in the franchising process and that section 621 of the Communications Act limited the FCC’s role. But the 6th Circuit wasn’t convinced, denying plaintiffs’ request for it to find franchising disputes are the sole jurisdiction of courts. “The availability of a judicial remedy for unreasonable denials of franchise applications does not foreclose the agency’s rulemaking authority over section 621 (a)(1),” wrote Cole. “Our conclusion today that the FCC possesses jurisdiction over section 621(a)(1) coextensive with that of the courts is buttressed by the Supreme Court’s analogous decision” in AT&T v. Illinois Utility Board and U.S. v. Haggar Apparel Co., both made in 1999. Telcos had supported the FCC’s stance, and cheered the 6th Circuit’s order.
Although the court said the petitioners were correct that nothing in the text of section 621 “expressly references franchising authorities, it is silent as to the agency’s role in the process of awarding cable franchises.” The FCC’s order said communities must not unreasonably deny franchises to new entrants and couldn’t take more than three months to consider applications from telcos with rights of way in the area, or twice as long for those without that permission. “Where petitioners’ argument falls short, however, is in equating the omission of the agency from section 621(a)(1) with an absence of rulemaking authority,” wrote Cole.
FCC Chairman Kevin Martin said the court “recognized and unanimously supported the Commission’s authority and our rules.” He’s “particularly pleased” the court directly addressed criticisms from Commissioner Jonathan Adelstein, who voted against the order, that the Media Bureau had insufficient evidence to support it. Despite Adelstein’s dissenting vote, Cole wrote that the commission derived authority for the order “from various statutory provisions.” Adelstein said in a written statement Friday that “the FCC apparently has more expansive authority than many believed. The good news is that we can use our authority to promote competitive video offerings, while also protecting consumers and public access.”
NCTA said the order’s “potential harm and unfairness” was cut when, in 2007, the commission gave similar deregulation to cable operators. The group doesn’t plan an appeal of the ruling, said a spokesman. A representative of the alliance didn’t immediately comment. Verizon is “pleased” the court agreed with the FCC’s “pro-consumer order,” said Deputy General Counsel Michael Glover in a written statement. AT&T Senior Vice President of Federal Regulatory Robert Quinn said the ruling “affirmed the FCC’s efforts to promote video competition and provide consumers an alternative to the incumbent cable monopoly.”