Elephants Do Not Hide in Mouse Holes
Release 4.16 August 2008
by W. Kenneth Ferree*
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Recently, Public Knowledge, Consumers Union, Free Press, and the Media Access Project (collectively, "MAP") filed an ex parte at the FCC in which they twist themselves into knots in an attempt to demonstrate that the FCC has jurisdiction to require programmers to sell programming on a stand-alone basis, i.e., to impose "wholesale a la carte." MAP's arguments should not be put aside lightly; rather they should be cast away with great force.
The few specific provisions to which MAP refers have nothing whatever to do with offerings of independent programmers, and its suggestion that Congress intended to grant the FCC jurisdiction to engage in massive regulatory restructuring of the entire programming industry based on its Title I "ancillary authority" simply cannot bear its own weight. One would suppose that if Congress intended to grant the FCC authority to trample the First Amendment rights of cable programmers, otherwise unregulated by the FCC, some specific reference to such authority would appear in the statute. As the Supreme Court has noted, Congress does not "hide elephants in mouse holes."
But let us not get ahead of ourselves. MAP's half-hearted attempt to point to specific statutory authority for wholesale a la carte rules deserves at least passing consideration. MAP asserts that Sections 303, 616, and 628 of the Communications Act each provide a basis for the Commission to adopt wholesale a la carte requirements.
With respect to the Title VI provisions, MAP correctly notes that they comprise the essential sum of the statutory provisions governing the carriage of cable programming services. Neither Section, however, is targeted at potential anticompetitive conduct by independent programmers. To the contrary, the structure and substance of Sections 616 and 628 are intended to protect against potential abuses by large, vertically integrated cable operators: nothing in either suggests that Congress intended to authorize the FCC to regulate program offerings by independent programmers.
Section 616 requires the FCC to adopt "regulations governing program carriage agreements" between cable systems and cable program channels, and it identifies specific practices to be prohibited (e.g., conditioning carriage on the grant of a financial interest in the channel, conditioning carriage on a grant of exclusivity, etc.), each of which is clearly aimed at preventing cable systems from using any market power they might have in the downstream distribution market to extract unreasonable terms from independent programmers. This grant of authority was specifically and explicitly aimed at curbing potential predatory practices by cable operators. There never has been any suggestion that this authority could be exercised to restrain the practices of the programmers it was intended to protect.
Similarly, Section 628 specifically grants the FCC authority to prevent vertically integrated programmers (i.e., programmers which own, or are owned by, a cable system) from discriminating unreasonably in the offering of their programming to competing distributors (e.g., DBS systems or telco video systems). In effect, Section 628 was aimed at protecting new entrants in the downstream distribution market from dominant cable operators by preventing cable companies from developing proprietary programming and withholding it from competitors. Section 628 has nothing whatever to do with the program offerings of independent programmers.
Given the obvious weakness of its Title VI arguments, MAP retreats to a position behind the FCC's general Title III jurisdiction over broadcasters. To summarize what is already a painfully jejune argument, MAP asserts that, because the FCC is authorized to regulate broadcasters in the public interest, it may – by extension – prohibit certain practices by broadcasters in retransmission consent negotiations, including, apparently, granting retransmission rights in exchange for carriage of a sister programming service.
In making this argument, MAP somehow manages not only to omit any reference to specific statutory provisions pertaining to broadcasters' retransmission consent rights, it ignores the entire history and practice of retransmission negotiations pursuant to those provisions. Contrary to MAP's suggestion, it was quite clear to Congress that the retransmission consent authority might be used to gain carriage of related cable programming services and, not surprisingly, it routinely has been. To now suggest that Section 303 somehow grants specific authority for the FCC to prohibit what Congress expressly allowed in a separate section of the Act crosses the boarder from the implausible to nonsense.
Which at last brings us to the real thrust of MAP's filing: that despite the lack of specific authority, the FCC can derive comfort from the penumbra of these other provisions and act pursuant to its Title I "ancillary authority." To which, one is tempted to ask "will they never learn"?
As case after case has made clear, ancillary authority is not generative, it is derivative. That is, ancillary authority is not a warrant for the FCC to create new jurisdictional reach; rather it allows the FCC to carry out its express statutory charges in ways that may not be specifically identified in the statute.
For example, in Illinois Citizens Committee for Broadcasting v. FCC, 467 F.2d 1397 (7 th Cir. 1972), the argument was made that, because the FCC has authority to regulate communications by wire or radio, it necessarily had ancillary authority to regulate all activities that "substantially affect communications." The 7 th Circuit rejected that argument summarily. If it were to accept such a broad reading of Title I, the court noted, "the FCC's already substantial responsibilities [would] include a wide range of activities, whether or not actually involving the transmission of radio or television signals, much less being remotely electronic in nature." Nothing, the court concluded, suggested that Congress intended such a result.
At about that same time, the D.C. Circuit held that Title I did not empower the FCC to assert jurisdiction over entities not engaged in communication by wire or radio. Similarly, in striking down the FCC's "broadcast flag" rules as "ancillary to nothing," the court opined only a few years ago that the FCC "may not invoke its ancillary jurisdiction under Title I to regulate matters outside of the compass of communication by wire or radio."
If anything in communications law should be beyond cavil at this point, it is that Title I does not include an invitation for the FCC to expand its jurisdictional reach beyond the specific limits carved out in the Communications Act. Indeed, in the landmark "video description" case, the D.C. Circuit rejected a strikingly similar jurisdictional argument to that suggested by MAP. As the court made abundantly clear, Title I "does not give the FCC unlimited authority to act as it sees fit with respect to all aspects of television transmissions." The "principal question is whether Congress 'delegated authority' to the FCC to promulgate (the regulations in question). . . [a]n agency may not promulgate even reasonable regulations . . . without delegated authority from Congress."
The court then analyzed Title I and related provisions to determine whether Congress had empowered the FCC to impose video description requirements: it concluded that Congress had not. Most importantly, the court held that Title I ancillary authority was limited to ensuring "the geographic availability of service" and that Title I specifically does not "otherwise authorize the FCC to regulate program content." Moreover, the court emphasized, Title I should not be construed to allow the FCC to regulate programming "because such regulations invariably raise First Amendment issues." As the court noted, "Congress has been scrupulously clear when it intends to delegate authority to the FCC to address areas significantly implicating program content."
That is to say, Congress does not hide elephants in mouse holes.
The FCC lost the video description case because of its reliance on a theory of ancillary authority that simply cannot be contained. When Congress intends for the FCC to regulate in ways that would implicate program content, it makes that authority express and limited. Congress has said as much in Section 624(f), which prohibits any federal agency from imposing "requirements regarding the provision or content of cable services, except as expressly provided in this title." So not only has Congress not hidden elephants in mouse holes, it has told the agency not to bother looking for them there.
There can be little doubt but that rules imposing wholesale a la carte obligations on independent programmers, fully protected by the First Amendment, would suffer the same fate as the video description rules. Wholesale a la carte would not merely affect program content incidentally or by accident, its very purpose is to alter the makeup of cable programming lineups and defeat the ability of some programmers to gain carriage in favor of others. That is, government mandated wholesale a la carte rules would in part determine which programming services will be seen and which will survive. If Congress had intended the FCC to wield that elephantine authority, MAP would not have to stoop, peering into the wall cracks of the Communications Act, to find it.