consideration and possibly a further notice to afford an opportunity for comment on any specific rule proposals of the Commission (notice, pars. 64, 68). Comments and reply comments on Part I and paragraph 50 have now been fully considered by the Commission. This report and order deals only with these aspects of the proceeding.

PART I. THE CARRIAGE AND NONDUPLICATION PROVISIONS

4. In proposing that the substantive provisions of the carriage and nonduplication rules governing microwave CATV systems be extended to all CATV systems, the notice emphasized (pars. 27, 30) that two main issues were presented: (1) Whether the Commission can appropriately proceed on the basis of its present statutory authority and (2) whether any special problems of substance or procedure are posed by rules going to nonmicrowave systems. We turn now to a discussion of the first issue.

5. The threshold jurisdictional question is twofold: (a) Whether the Commission has jurisdiction as a matter of law over nonmicrowave CATV systems under the present provisions of the Communications Act and (b) whether it would be appropriate to exercise any such jurisdiction without a legislative enactment on the subject. In the notice we concluded initially, for the reasons set forth in our memorandum on jurisdiction attached to the notice, that CATV systems are engaged in interstate communication by wire to which the provisions of the Communications Act are applicable (secs. 2(a) and 3(a), 47 U.S.C. 152(a) and 153(a)). It further appeared to us that the Commission's statutory powers, particularly under sections 4(i), 303 (f), (h), and (r), include authority to promulgate necessary and reasonable regulations to carry out the provisions of section 1 and 307(b) of the Act and to prevent frustration of the regulatory scheme by CATV operations, irrespective of the use of microwave. However, we pointed up the following matters (par. 31 of the notice):

While we have initially concluded that we have jurisdiction, we would carefully consider comments addressed to this aspect. The attached memorandum presents the case for jurisdiction-a strong one in our viewand is set out in order to afford interested parties a full opportunity to direct their comments to that case. Second, we adhere to our position that clarifying legislation would be desirable, and have no intention of bypassing congressional action in this field. We are clearly concerned here with new and important questions of policy and law in the communications field. That being the case, the Commission would welcome (1)

a congressional guidance as to policy and (11) congressional clarification of our authority, which would lay the troublesome Jurisdictional question at rest.

It is our understanding that hearings will shortly commence. The information gathered in this proceeding will, we think, be of assistance to the Congress in its consideration of the matter. In short, by instituting this proceeding, we shall gather essential data, both for the Commission and the Congress, and will have conserved valuable time and be in a position to take final effective action in either of two eventualities: (1) Congress has enacted legislation in this field which does not preclude the Commission from promulgating rules along the lines of those adopted in Docket Nos. 14895 and 15233; or (2) no legislation is forthcoming, and the comments in the rulemaking proceeding lead to the conclusion that the Commission does have present jurisdiction to extend the substantive provisions of the rules adopted in the above dockets to all CATV systems, whether or not they use microwave facilities. In the latter event, we would be remiss in our statutory duties if we had failed to exercise, without undue delay, our existing jurisdiction and authority to promote a public interest in this important area. The rule-making proceeding instituted by this notice will thus be conducted concurrently with legislative consideration, with final Commission decision withheld for an appropriate period to afford Congress an opportunity to act.

6. Following the issuance of the notice, H.R. 7715 was introduced in the House on April 28, 1965, and hearings on the bill were held before the Subcommittee on Communications and Power of the House Committee on Interstate and Foreign [P. 4541]

Commerce in May and June 1965. In the Commission's testimony concerning the bill, it was stated that the Commission did "not contemplate applying any new rules that we may enact with respect to the rest of the CATV industry until 1966, in other words, until at least after this session of Congress is over and it has had the ability to consider this problem." (Hearings before the Subcommittee on Communications and Power of the House Committee on Interstate and Foreign Commerce on H.R. 7715, 89th Cong., 1st sess., p. 25.) No bill relating to CATV has been introduced in the Senate, and the 89th Congress adjourned its 1st session without enacting any legislation on CATV.

7. We think it appropriate, therefore, to take up without further delay Part I and paragraph 50 of the rulemaking proceeding. Here we note that CATV is developing and expanding at a very rapid rate (see pars. 31-39 within). We cannot ignore the increasing risk of adjverse impact on the "public interest in

the larger and more effective use of radio" (section 303 (g)) which accompanies the burgeoning CATV development. See paragraphs 116-117; Part II, within. Further, it is contrary to sound regulation for carriage and nonduplication to be applicable to the microwave CATV system and inapplicable to the nonmicrowave, which constitutes the other threefourths of the industry. And, if the carriage and nonduplication provisions are to be applied to nonmicrowave systems, it would obviously minimize the disruption to the viewing public to do so as soon as possible-before a large number of incipient CATV systems commence operation and their subscribers, become accustomed to service not in compliance with the rules. It would also appear to entail less hardship to the new CATV operator to commence operation under the rules than to undergo a subsequent conversion. Moreover, removal of the present uncertainty would assist local franchising authorities, as well as franchise applicants. We have received several inquiries from local authorities as to when a decision might be expected, with an indication in some instances that action on franchise applications was being withheld pending our decision. The "introduction of as much stability as possible into the planning perspective of those affected by our regulation" is regarded by us as a "highly desirable objective" (first report and order in Docket Nos. 14895 and 15233, par. 78). For all these considerations, developed more fully within, we think it our responsibility under the Communications Act to resolve the issues in Part I and paragraph 50.

A. JURISDICTION AS A MATTER OF LAW 8. While the comments filed in support of present jurisdiction outnumber those opposed, there appears to be no

* Supporting comments were filed by: National Association of Broadcasters; Association of Maximum Service Telecasters, Inc.; Storer Broadcasting Co.; American Broadcasting Co.; Westinghouse Broadcasting Co., Inc.; Fuqua Industries, Inc.; WTVY, Inc.; Snyder & Associates; Western Slope Broadcasting Co.; Black Canon Broadcasting Co.; Mesa Verde Broadcasting Co.; Houston Post Co.; WKBH Television, Inc.; Bonneville International Corp.; Mobile Video Tapes, Inc.; D. H. Overmyer; Aroostook Broadcasting Corp.; Taft Broadcasting Co.; WJAC, Inc.; Springfield Television Broadcasting Corp.; Midwest Television, Inc.; West Central Broadcasting Co.; RustCraft Broadcasting Co.; WGAL Television, Inc.; American Farm Bureau Federation; National Farmers Union; National Grange; Tri-State TV Translators Association; Labor Organizations Affiliated With the AFL-CIO; Eastern Educational Network; and commenting jointly, television sta

need to review the substance of the supporting comments here. The bulk of the supporting comments either restate essentially the same matters set forth in the Commission's memorandum on its jurisdiction and authority (notice, attachment B) or express agreement with that memorandum. Since we believe that the case for jurisdiction is sufficiently set forth in our memorandum, a copy of which is attached to this document for convenient reference (attachment C), we shall discuss only the arguments made in the opposition comments.

9. The comments urging a want of jurisdiction make three principal arguments. It is asserted, first, that the Communications Act contains no provision granting the Commission authority over CATV systems. Second, it is contended that there are specific provisions in the Act which show a lack of authority. And, third, it is urged that the Commission itself has repeatedly denied jurisdiction over CATV systems, that Congress is aware of and has acquiesced in this administrative interpretation, and that principles of statutory construction foreclose the Commission from now claiming jurisdiction. We shall discuss these arguments in order.

10. The contention that the Communications Act contains no provision granting the Commission authority over CATV systems takes issue with the sufficiency of the statutory base set forth in the Commission's memorandum (pp. 2-7). We there relied on the fact that section 2(a) states that the "provisions

tions KHOU-TV, KOTV, KXTX, WANE-TV, WAVE-TV, WFIE-TV, WFRV, WISH-TV, WJXT, WMT-TV, WNOK-TV, WTOP-TV. Opposition-Commenting in opposition to jurisdiction were: National Community Television Association, Inc.; Smith & Pepper (on behalf of 150 CATV systems); Columbia Broadcasting System; National Broadcasting Co.; TV Cable Service of Abilene, Inc.; Entron, Inc.; American Cable Television, Inc.; Meredith Broadcasting Co.; Triangle Publications, Inc.; Jerrold Electronics Corp.; International Teleprompter Corp.; Montgomery Television Association, Inc.; Journal Co. Other-American Telephone & Telegraph Co. and United States Independent Telephone Association took no position on the jurisdictional question but requested that the carriage and nonduplication provisions be applied to CATV systems directly rather than to microwave common carriers.

and

While Storer Broadcasting Co. does not agree with the impact argument (Commission's memorandum pp. 4-5) as a jurisdictional base, it takes the position that the Commission now has limited jurisdiction over all CATV systems which is sufficient to support the measures proposed in Part I and par. 50.

of this Act shall apply to all interstate and foreign communication by wire or radio and to all persons engaged

within the United States in such communication," and concluded that CATV systems are engaged in "communication by wire," within the meaning of section 3(a), which is interstate in nature. With respect to the provisions of the Act to be applied, we stated that the authority conferred by section 303 (h) to issue rules establishing the area or zone to be served by any station includes the power to prevent infringement of the rules by "any person" (secs. 312(b) and 502 of the Communications Act), and specifically a person subject to the provisions of the Act, and encompasses authority to specify by rule the conditions under which the station's signal may be extended beyond the prescribed service area or zone by CATV. Moreover, apart from section 303 (h), the general rule making authority of the Commission (secs. 4(1) and 303 (f) and (r)) includes authority to take necessary action, not inconsistent with the Act or law, to prevent frustration of section 307(b) by CATV-an "interstate communication by wire" to which the Act's provisions are applicable (secs. 2(a) and 3(a)).

11. It is asserted that these sections do not suffice to support jurisdiction because it is necessary to find some specific provision of the Act expressly conferring jurisdiction over the subject matter of CATV. The authorities cited in our memorandum (pp. 4-6) to the effect that our authority does not depend on a specific reference to CATV or CATV practices in the Act" are distinguished on the ground that they concern authority over unspecified practices of regulated licensees rather than the power to regulate unspecified persons or businesses not licensed under the Act. Unless specific authority is required for regulation of nonlicensees, it is argued, the Commission could utilize its general rule making authority to regulate any business (such as amusements, program producers, etc.) which has an impact on broadcasting or uses communications facilities.

12. The attempted distinction, even assuming arguendo its validity, does not

National Broadcasting Co. V. United States, 319 U.S. 190, 218-219; United States v. Storer Broadcasting Co.; 351 U.S. 192, 203; American Trucking Association、v. United States, 344 U.S. 298, 309-311; United States v. Pennsylvania RR. Co.; 323 U.S. 612; United States v. Wrightwood Dairy Co., 315 U.S. 110; Houston, East & West Texas Railway Co. v. United States, 234 U.S. 342, Public Service Commission of State of New York v. Federal Power Commission, 327 F. 2d 893, 897 (C.A.D.C.).

We are not prefit the situation here. sented with the question of whether the Commission's broad powers to take action necessary to carry out the provisions of the Act include authority to regulate a business not subject to the Act merely because of some impact on, [P. 4542]

or use of, interstate communications under the Act." CATV systems differ from most other businesses. in that they are themselves engaged in "interstate communication by wire," a business to which the Act's provisions are expressly applicable (secs. 2(a), 3(a)). Moreover, they physically intercept and extend television signals, and thus have a uniquely close relationship to the regulatory scheme embodied in sections 303 (h) and 307(b). We are not powerless to prevent frustration of our actions under those sections by persons subject to the Act merely because the licensing provisions of the statute are inapplicable to them. Section 312 (b) and (c) provide for the issuance of a cease and desist order against "any person"-not merely any "licensee or permittee"”who has "violated or failed to observe any rule or regulation of the Commission authorized in this Act *

13. It is further asserted that Federal Power Commission v. Panhandle Eastern Pipeline Co., 337 U.S. 498, precludes a conclusion that the general rule making

We have not claimed plenary power to regulate any business which may have some impact on broadcasting or other interstate communication by wire or radio. In the jurisdictional memorandum we stated that the "Commission clearly has no jurisdiction over bowling alleys or theatres, for example Moreover, we sought and obtained specific statutory authority to regulate the manufacture of television receivers shipped in interstate commerce for sale to the public (Public Law 87-529, 47 U.S.C. 303 (s)). There may be instances, of course, where the Commission's regulatory power appropriately extends to some activities of persons not engaged in communication by wire or radio. But there is not necessity to determine the limits or basis for such authority here.

'Since CATV systems fall within the definition of communication by wire and their operations are interstate in nature, it makes no difference that they are not expressly mentioned by name. The Act applies to "all interstate communication by wire or radio" and to "all persons engaged in such communication" (sec. 2(a), italic added). For that matter, prior to the 1962 amendment incorporating section 303 (8), the word "television" did not appear in the Act. Yet, it has long been established that the Act applies to television because it falls within the definitions of "radio communication" and "transmission of energy by radio" contained in section 3. Allen B. Dumont Labs, Inc., v. Carroll, 184 F.2d 153, 155 (C.A. 3), cert. den. 340 U.S. 929.

power of the Commission encompasses authority to take necessary action, not inconsistent with the Act or law, to prevent frustration of section 307(b) and 303 (h) by CATV. However, the Panhandle case is readily distinguishable. That case was decided upon the basis of a specific provision in the Natural Gas Act which denied the Federal Power Commission jurisdiction to deal with the problem there involved. Section 1(b) of the Natural Gas Act provides that the "provisions of this Act shall apply ⚫ to the sale in interstate commerce of natural gas for resale ・・・ but shall not apply * ⚫ to the production or gathering of natural gas" (52 Stat. 821, 15 U.S.C.sec. 717(b)). The Court held that the transfer of gas leases fell within the exclusion as to the "production or gathering of natural gas" and hence lay outside the scope of the Power Commission's regulatory powers. In declining to find authority in the Power Commission's general rule making powers, the Court stated that the "power to do the things appropriate to carry out the provisions of the Act can hardly be taken to rescind a prohibition against certain actions" (337 U.S. at 508). By contrast, there is no provision in the Communications Act which specifically excludes CATV systems from the Commission's jurisdiction. On the contrary, section 2(a) states that the "provisions of this Act shall apply to all interstate communication by wire or radio * and to all persons engaged within the United States in such communication *** (italic added)." Moreover, Panhandle has been construed narrowly in a recent case arising under the Natural Gas Act, which sustained the Power Commission's jurisdiction over gas leases for resale in interstate commerce. United Gas Improvement Co. v. Continental Oil Co., 381 U.S. 392, 403404.

14. The argument that the Communications Act contains language expressly excluding jurisdiction over CATV systems, is predicated primarily on the provisions of section 2(b) and section 214 (a) of the Act. Section 2(b) states that nothing in the Act shall be construed to give the Commission jurisdiction with respect to "intrastate communication service by wire or radio of any carrier" or "any carrier engaged in interstate or foreign communication solely through

Other Federal Power Commission cases cited in the comments, Amerada Petroleum Corp. v. Federal Power Commission, 334 F. 2d 404 (C.A..8), and Pan American Petroleum Corp. v. Federal Power Commission, 339 F. 2d 694, are similarly inapposite since they involved a lack of jurisdiction predicated upon a statutory exclusion.

19

connection by radio, or by wire and radio, with facilities located in an adjoining State * of another carrier * Section 214(a) provides, in pertinent part, that "no carrier" shall construct or operate a line without a prior certificate from the Commission: Provided, however, That no certificate is required for construction or operation of "a line within a single State unless such line constitutes part of an interstate line." It further states: "As used in this section the term 'line' means any channel of communication established by the interconnection of two or more existing channels."

15. We are not persuaded that these sections demonstrate a statutory denial of jurisdiction over CATV systems. In the first place, both sections by their terms apply to "carriers" and we have repeatedly ruled that CATV systems are not "carriers" within the meaning of section 3 (h) of the Act. Frontier Broadcasting Co., 24 FCC 251; CATV and TV Repeater Services, 26 FCC 403, 427-428; . WSTV, Inc. v. Fortnightly Corp., 23 Pike and Fischer, R.R. 184; Philadelphia Television Broadcasting Co., et al., FCC 65702 (Aug. 8, 1965). Nor are television stations "carriers" under section 3(h). Moreover, even if CATV systems were to be deemed carriers, their operations are interstate in nature since they are carrying interstate television signals. A common carrier carrying television signals does not fall within the exemption in section 2(b) (1) because its physical facilities are located in only one State; it "performs an interstate communications service."

Idaho Microwave, Inc. v. Federal Communications Commission, 352 F. 2d 729 (C.A.D.C.); Ward v. Northern Ohio Telephone Co., 300 F. 2d 816 (C.A. 6), cert. den. 371 U.S. 820; Pacific Telatronics, Inc., 4 Pike and Fischer, R.R. 145; and cf. California Interstate Telephone Co. v. Federal Communications Commission 328 F. 2d 816 (C.A.D.C.). See also, United States v. American Telephone & Telegraph Co., 57 F. Supp. 451, 454 (S.D.N.Y.), aff'd percuriam, sub nom.

That the carrier in Idaho Microwave was carrying the signal of a television station located in another State is not of controlling significance. All television broadcasting is interstate in nature. Ward v. Northern Ohio Telephone Co., 300 F. 2d 816 (C.A. 6), cert. den. 371 U.S. 820; Capital City Telephone Co., 3 FCC 189, 193-4; Federal Radio Commission v. Nelson Bros. Bond & Mortgage Co., 289 U.S. 266, 279. Moreover, in the case of network programing the communication link between the network and the station transmitter forms an additional part of the interstate chain of communication. Ward, supra, 300 F.2d at 819.

Hotel Astor v. United States, 325 U.S. 837. By the same token a CATV system, if it were a carrier, would constitute "part of an interstate line" for purposes of section 214(a), even though its facilities were located within a single State.

16. The most vigorously pressed argument against jurisdiction is the assertion that the Commission is estopped by past disclaimers of jurisdiction over CATV systems and congressional acquiescence in those disclaimers (see par. 28 of the notice herein).

Reliance is placed on the principle of statutory construction that a consistent, longstanding administrative interpretation is entitled to great weight, particularly where Congress is aware of the administrative determination and has subsequently amended the statute without changing the applicable section. Whatever the force of this principle in other circumstances, we do not think that it is dispositive of the legal question of our Jurisdiction here.

17. Initially, it bears noting that some of the precedents cited as establishing a consistent contrary position primarily concerned matters upon which we do not rely as a basis for jurisdiction. We have consistently held that CATV systems are not common carriers within the meaning of section 3(h), and hence do not come within the provisions of Title II applicable to carriers. Frontier Broadcasting Co., 24 FCC 251; CATV and TV Repeater Services, 26 FCC 403, 427248; WSTV, Inc. v. Fortnightly Corp., 23 Pike & Fischer, R.R. 184. But we have [P. 4543]

not proposed to depart from this ruling, which has been reaffirmed since the issuance of the notice herein. Philadelphia Television Broadcasters Co., et al. v. Rollins Broadcasting, Inc., Docket No. 15926 (FCC 65-702, Aug. 2, 1965) now pending on appeal (case No. 19577, C.A.D.C.). Nor have we departed from our earlier rulings that CATV's are not engaged in "broadcasting" within the meaning of section 3(o) and are not encompassed within section 325(a). CATV and TV Repeater Services, 26 FCC 403, 428-430. In areas closer to the claimed basis for jurisdiction, the precedents do not reflect a consistent contrary position." Thus, while we initially dis

10 Cases cited to us in this connection include: Hanover Bank, Ex. v. C.I.R,, 369 U.S. 672, 686-687; United States v. Leslie Salt Co., 350 U.S. 382, 396-397; Norwegian Nitrogen Co. v. United States, 288 U.S. 294, 315; Luckenback Steamship Co. v. United States, 280 U.S. 173, 183; Cammarano v. United States, 358 U.S. 498.

11 The position of Congress, if it has acquiesced in the Commission's rulings, is not

claimed jurisdiction to deny a common carrier microwave authorization to relay television signals to CATV systems (Intermountain Microwave, 24 FCC 54; CATV and TV Repeater Services, 26 FCC 403, 431-433), this ruling was later reversed in our Carter Mountain decision, 32 FCC 459, which was sustained on judicial review. Carter Mountain Transmission Corp. v. Federal Communications Commission, 321 F. 2d 359, 364 (C.A.D.C.), cert. den. 375 U.S. 951. In CATV and TV Repeater Services, we disclaimed plenary power, under section 303 (a), (b), (f), (g), (i), and (r), to "regulate any and all enterprises which happen to be connected with one of the many aspects of communications" (28 FCC at 429) a power which is not claimed here. However, we assumed, without deciding, that CATV's are within the scope of section 3(a) (26 FCC at 428), and also found it unnecessary to pass on the question of our authority to regulate them directly because of adverse effect on broadcasting (26 FCC at 431). And, finally, we have not previously ruled on the question of whether section 303 (h) encompasses authority to regulate CATV.

18. More important, even if our past rulings in this troublesome area had been consistent, we are not estopped from correcting a ruling of law which appears to be clearly erroneous. Carter Mountain Transmission Corp. v. Federal Communications Commission, 321 F. 2d 359, 364 (C.A.D.C.), cert. den. 375 U.S. 951; Phillips Petroleum Co. v. Wisconsin, 347 U.S. 672: United Gas Improvement Co. v. Continental Oil Co., 381 U.S. 392, 404406.12 As the Supreme Court commented in the Phillips Petroleum case, clear. It is true, as set forth in the notice, par. 28, that following our decision in CATV and TV Repeater Services, 26 FCC 403, the 86th Congress gave extensive consideration to some of the various legislative proposals on CATV submitted by the Commission and others, but enacted no legislation. Moreover, bills introduced in subsequent Congresses received no action. However, Congress also took no action after being apprised of the partial reversal of that decision in Carter Mountain. Twenty-ninth FCC Annual Report, 1963. Congress likewise 18 aware of our initial conclusion as to jurisdiction in the notice herein issued on Apr. 23, 1965. Although a subcommittee of the House Commerce Committee subsequently held hearings on H.R. 7715, no committee report issued in the 1st session of the 89th Congress, and no legislation on CATV was considered or introduced in the Senate.

12 See also, Calbeck v. Travellers Ins. Co., 370 U.S. 114, 127, fn. 15 Automobile Club of Michigan v. Commissioner, 353 U.S. 180, 183, Association of Clerical Employees v. Brotherhood of R. & 8.S. Clerks, 85 F. 2d 152, 156 (CA. 7).