e never related to the programs viewed or available, or to the amount of time e subscriber operates his receiver. The monthly charge is a flat charge applible whether or not the subscriber's receiver is operated during the month. rvices are almost universally furnished pursuant to contract with the individ1 subscribers cancelable on short notice by either party. Community antennas are capable of receiving the signals of more than one stan simultaneously. As a general rule, antenna sites are selected where the ximum number of nonduplicating and noninterfering television channels can received in sufficient strength and quality to produce acceptable pictures. The tennas are designed and oriented, when installed, to receive the desired signals d to reject, to the extent possible, the undesired channels. Electrical interence can be caused by the channels on the cable radiating outside of the cones of the cable into the same or adjacent channels which are being received rectly off the air. In order to minimize such interference and permit the comtible operation of CATV systems with direct off-the-air reception, the Federal mmunications Commission has promulgated specific rules and regulations licable to community antenna television systems to limit such "incidental liation." Thus, by order adopted July 11, 1956, the Commission adopted subrt D of part 15 of its Rules and Regulations applicable to "Incidental and stricted Radiation Devices," entitled "Community Antenna Television stems." The master antenna performs essentially the same function as is performed en a homeowner purchases and erects a rooftop antenna which has been signed and manufactured to give optimum reception on the channels he desires receive and oriented on the rooftop or a tower on his premises so as to receive desired channels and reject signals of stations which might duplicate or erfere with those he prefers.

Community antenna operators do not alter, delete, or in any manner change › broadcast intelligence on the channels which they receive; nor do they prole for sponsorship of programs received on the community antenna or sell e for commercial announcements as in the case of broadcasters. In no innce does, or can, a CATV system contract to bring particular programs to its scribers, nor can the subscribers order from the CATV operator the recepn of specific programs or channels. The CATV system has no voice whatsoer in the selection of the programs which are broadcast by the stations it eives.

FEDERAL REGULATION

The community antenna television industry is an adjunct to the broad field television broadcasting. Although community antennas do not originate adcast programs or alter, change, or delete broadcast intelligence, such options nevertheless are closely allied with television broadcasting and are a al adjunct of such service, extending television broadcast reception to inge" reception areas. The community antenna has become an important trumentality, as have more recently the television translator stations aurized under Rules and Regulations of the Federal Communications Comsion, for achieving the goal of the Commission of providing a truly nationle television service by making an only, improved, or supplemental reception ilable where it otherwise might not be available. As has been previously ed, the Commission has promulgated specific rules and regulations applicable community antenna television systems establishing certain technical stands in relation to the problem of "incidental radiation."

2

'rom even the most cursory examination of the operation of a CATV system, relationship to broadcasting as an aid in reception cannot reasonably be ied. Certainly the Commission's recent important action concerning comity antennas which took place on April 22, 1965, clearly indicates that the C considers as very significant that interrelationship between CATV and vision broadcasting.

FEDERAL REGULATION OF RADIO AND TELEVISION BROADCASTING

here can be no doubt that the regulation of television broadcasting was, he contemplation of Congress, embraced within the authority of the Federal

21 F.R. 3680, 25 F.R. 7317, 1 Pike & Fischer RR 54.141.

n the Matter of Amendment of parts 21, 74 (proposed subpart J), and 91 to adopt rules regulations relating to the distribution of television broadcast signals by community na television systems, and related matters, docket No. 15971, FCC 65-334 (mimeo 56173), Apr. 23, 1965.

Communications Commission by the Communications Act of 1934, as amended' In addition to the legislative history and the breadth of the sections defining the act's purpose and scope of application, the comprehensive definition of radio communications in the act and the act's administrative history are conclusive on the question. To understand why Congress would want to invest exclusive jurisdiction over radio and television in the Federal Communications Commis sion it is helpful to have a knowledge of the basic underlying philosophy of the Radio Act of 1927 and the Communications Act of 1934. That philosophy is a fundamental and extremely important one. The legislative history of the Federal Radio Act and the Communications Act clearly establishes this philosophy, and such was probably best voiced in the final recommendation to the Secretary of Commerce by the Third and Fourth National Radio Conferences in which it was stated that:

"The conference has been impressed with the necessity of placing broadcasting upon such a basis that it may be of continued service at all times of the year and all times of the day, its signals reaching with proper intensity and clarity to all classes of people. We must have at all times a special thought for the owner of small sets and for those whose homes are far from great centers of population. The true mission of broadcasting will not be realized until its service is available to each one of them at all times as it is now available in our larger cities." "

Thus, the avowed purpose of this and later legislation was to make available, as far as possible to all the people of the United States, radio and television reception regardless of where the receiver may be located. It was clear to the legislators that such far-reaching objectives could be achieved only through uniform regulation vested in one administrative body. Thus, the concept of an integrated and exclusive Federal policy over radio and television communications evolved. The declared purpose of the Communications Act of 1934, as amendei, is to control all channels of interstate radio and television transmission and make available to all the people of the United States a nationwide communications service. Thus, Congress envisioned a policy to promote the "public interest" through the enjoyment of maximum service. Congress certainly did not intend that its exclusive policy be freighted with, or subject to, the "eroding process" of varied and perhaps conflicting provisions of State enactments and policies. Neither the States nor the courts can place obstacles in the path of the accomplishment and execution of the "full purpose and objectives" of Congress. It is interesting to note that the basic concept of CATV is the fulfillment of the above-quoted recommendation of the Third National Radio Conference.

The courts have long ago affirmed that regulation of the field of radio and television lies exclusively with the Federal Government. The U.S. Court of Appeals for the Third Circuit in construing certain sections of the Communications Act has held that the States are precluded from any regulation of television because "the language [of the act] is so all inclusive as to leave no doubt that it was the intention of Congress to occupy the television broadcasting field in its entirety."" The court in that case concluded its opinion by stating: "We think it is clear that Congress has occupied fully the field of television regulation, and that the field is no longer open to the States, Congress possessing the constitutional authority to effect the result."

In another case involving booster stations still another Court of Appeals stated:

"We are satisfied from a reading of the section (47 U.S.C. 301) as a whole that the Congress intended to assert control by the Federal Government of 'all the channels of interstate *** radio transmission,' and that the sweep of the Commission's authority includes the booster stations here involved." "1

Therefore it is abundantly clear that since Congress intended to occupy the field of television regulation in its entirety, and since community antennas are

447 U.S.C., sec. 151, et seq.

5 See, e.g., S. Rept. 781, 73d Cong., p. 1 (1934), and see also, secs. 2(a), 3, and 301 of the Communications Act.

Third National Radio Conference, Oct. 6-10, 1924, pp. 13, 14.

7 See sec. 1 of the Communications Act of 1934.

8 Hill v. State of Florida, ex. rel. Watson, 325 U.S. 538 (1945).

Allen B. DuMont Laboratories, Inc. v. Carroll, 3d Cir. 1950, 184 F. 2d 153, cert. den.. 340 U.S. 490, emphasis supplied.

10 C.J. Community Services, Inc. v. Federal Communications Commission, D.C. Cir. 1957, 246 F. 2d 660.

" Id. at p. 663.

an adjunct in aid of television reception within the television broadcasting field, that State regulation of community antennas has been precluded by the Communications Act.

The fact that the Congress, although it has studied the matter at length, has not legislated, specifically with respect to community antennas and that the Federal Communications Commission has ruled that it has no jurisdiction over community antennas as "common carriers" under title II of the Communications Act of 1934, as amended, and that it cannot regulate community antennas as broadcasting stations under title III of the act "2 does not mean that the States have not been excluded from the exercise of general regulatory authority in the field. As more fully discussed in the following subsection, the authorities are clear that Congress has fully occupied the field of radio and television and that if Congress has not provided for regulation there can be none. Notwithstand

12

ing the fact that the States are excluded from regulating CATV because of Federal occupation of the field, it is not contended here that municipal or State authorities may not impose reasonable use or permit taxes on CATV, and reasonable conditions governing the use of streets and alleys, etc.

As a matter of fact, it may be realistically expected that the Federal Communications Commission will exercise general regulatory jurisdiction over community antennas in the near future. Representative Oren Harris, chairman of the House Commerce Committee, on April 28, 1965, introduced a bill before the House of Representatives which would authorize the Federal Communications Commission to regulate community antenna television systems." Hearings were later held before a Subcommittee on Communications. Further, the FCC on April 22, 1965, released a notice of inquiry and notice of proposed rulemaking to adopt rules and regulations relative to community antenna television systems.

STATE REGULATION

Joint Federal and State regulation in this field is not permissible. This is one of the fields in which Congress has decided that any State regulation would be an obstacle to the full accomplishment and execution of the national legislative policy and is, therefore, not permitted. Hill v. State of Florida, ex rel. Watson, (1945), 325 U.S. 538; reh, den., 326 U.S. 804; Hines v. Davidowitz, (1941), 312 U.S. 52. Additionally, the DuMont case supra, makes it clear that even when the Congress has not acted to authorize regulation, in the absence of a specified reservation to the States the States may not make regulations affecting television.

In an application of this principle to community antennas, the Wisconsin Public Service Commission has held that it lacks jurisdiction to consider an application for authority to erect a community antenna to receive television signals for the reason that "Congress has so completely occupied the field of television regulation as to preclude any parallel State regulation." In re Edwin Francis Bennett, CCH State Utilities Reporter, paragraph 16, 168, 7 RR Pike & Fischer 2054. The Wisconsin Commission cited Allen B. DuMont Laboratories, Inc., v. Carroll, as authority for its ruling.

Additionally, even though community antennas are located solely within the confines of a State they are by the nature of their activity in interstate commerce for the purpose of inclusion in the broad field of radio and television. In its report and order in docket No. 12443, supra, the Federal Communications Commission has held that community antennas are engaged in interstate commerce, since regardless of where the station's transmitter is located, the signal often originates, via network, in New York or elsewhere. The Commission has reaffirmed this position in its recent notice of inquiry and notice of proposed rulemaking of April 22, 1965, referred to previously. Likewise, the District Court for the First Judicial District for the State of Wyoming has held that the Public Service Commission of Wyoming did not have jurisdiction over a community antenna operation because, “*** by reason of their operations [community antenna systems] are (1) not public utilities and (2) are engaged in interstate commerce." Community Television Systems of Wyoming, 17 Pike & Fischer, RR 2135, Wyoming District Court.

12 Report and order of Federal Communications Commission in docket No. 12443, p. 7. 13 H.R. 7715.

CURRENT CONTROVERSY-IS CATV A PUBLIC UTILITY?

Notwithstanding all of the broad constitutional questions which have been heretofore discussed, the interest of the State legislatures and courts regarding community antennas has been focused almost exclusively on the public utility issue. This issue has taken numerous forms within the States. Are community antennas public utilities? Does the State public utility commission have juris diction over community antennas? Can a State legislature constitutionaly declare CATV's to be public utilities? However put, all of these issues must be answered in the negative because of one basic fact concerning CATV. Com munity antenna television systems do not have the essential jurisdictional ele ments of public utilities. Community antenna television systems do not provide a public utility type service and State legislatures are precluded by the de process clauses of the Federal and State Constitutions from regulating such sys tems as public utilities.

It would seem axiomatic that a State legislature should not enact legislation classifying a community antenna as a public utility unless the community antenna can be properly and legally so classified. Before discussing constitutional limitations which are a complete prohibition against the classifying and regulation of CATV systems as public utiilties, some of the obvious reasons why a con munity antenna system is not a public utility should be considered.

The criterion for determining whether or not a business or property is a public utility has variously been stated in the following language:

(a) Whether it is, or has been, devoted to a "public use of its service.” (b) Whether the public has a legal right to the use of its facilities, or (c) Whether the public has a legal right to the use, “which cannot be gainsaid, or denied, or withdrawn, at the pleasure of the owner." "

It would seem clear that a community antenna system is a private business and not a public utility under any of the above-mentioned tests. Certainly it cannot be seriously contended that a multiple unit master antenna system for an apartment building, hotel, or hospital, for which service charges are made, is a public utility whether such a system is for the purpose of providing television reception of a superior quality, or improving the appearance of the property. or because of a desire to reduce installation cost and servicing problems. Following the same reasoning, a community antenna system, which is simply an enlarge ment or adaptation of the same type system to deliver signals to residents in an area or community, cannot be said to be a public utility.

From a general point of view it is clear that the reception service rendered by a community antenna system is incidental to television broadcast service and is not in any way a "necessity" type service. A community antenna system can render no greater service so far as the public convenience, interest and necessity is concerned than the television station or stations whose signals are received. A television station is not a public utility as has been clearly established by section 3(h) of the Communications Act of 1934, as amended. and by various court decisions.15 Radio broadcasting and television broadcasting have always been regulated as free enterprises and not as public utilities. The U.S. Supreme Court in the case of Commission v. Sanders Brothers Radio Station recognized the distinction between the field of broadcasting and that of public utilities in saying:

16

"In contradistinction to communications by telephone and telegraph, which the Communications Act recognizes as a common carrier activity and regulates accordingly in analogy to the regulation of rail and other carriers by the Interstate Commerce Commission, the act recognizes that broadcasters are not common carriers and are not to be dealt with as such. Thus, the act recog nizes that the field of broadcasting is one of free competition. The sections dealing with broadcasting demonstrate that Congress has not, in its regulatory scheme, abandoned the principle of free competition, as it has done in the case of railroads in respect of which regulation involves the suppression of wasteful practices due to competition, the regulation of rates and charges, and other measures which are unnecessary if free competition is to be permitted."

14 Illustrative cases where these criteria have been used are cited in pp. 18-21 of this memorandum.

15 See e.g., Sanders Brothers Radio Station v. Federal Communications Commission, 1939, 70 App. D.C. 297, 106 F. 2d 321 reversed on other grounds, 309 U.S. 470.

16 309 U.S. 470.

Merely because an industry is regulated to an extent by the Federal Government such as the television industry is, does not mean that such industry is a public utility. Quite to the contrary, the Supreme Court recognized this when it held:

"While the television industry is also a regulated industry, it is regulated in a very different way. That difference is controlling. Radio broadcasters, including television broadcasters *** are not included in a definition of common carriers in section 3 of the Communications Act, 47 U.S.C. 153(h) as are telephone and telegraph companies. Thus, the extensive controls, including rate regulation, of title II of the Communications Act, 47 U.S.C. 201-222, do not apply. Television broadcasters remain free to set their own advertising rates."

99 17

It is well recognized that the services of the television broadcast stations and of facilities incidental to broadcasting, which would logically also extend to reception, are not essential services in the sense in which railroad, waterworks, gasworks and telephone and telegraph systems provide essential public utility services. This distinction, as well as the fact that the right of the public to the use and enjoyment of the facilities of a privately owned radio or television station is of a much more limited character, was clearly enunciated by the U.S. Court of Appeals for the District of Columbia in Pulitzer Publishing Company v. Federal Communications Commission (1937), 94 F. 2d 249, 251, where it was said:

"But we have never said that a radio broadcasting station is a public utility in a sense which a railroad is a public utility. Generally speaking the term comprehends any facility employed in rendering quasi public services, such as waterworks, gasworks, railroads, telephones, telegraph, etc. The use and enjoyment of such facilities the public has the legal right to demand, but its right to the use and enjoyment of the facilities of a privately owned radio station is of a much more limited character."

The Federal Communications Commission has no more than one occasion rejected arguments to the effect that CATV systems are common carriers or public utilities. The Commission's decisions were that CATV operations did not constitute a common carrier endeavor within the meaning of the Communications Act, and that consequently the Commission was without title II jurisdiction over the CATV systems."

18

The distinction between the services of broadcast stations and those of "public utilities" was recognized as equally valid by the Supreme Court of California as between the services of community antennas compared to those of "public utilities." In holding that a community antenna was not a telephone corporation or any other type of public utility (including “common carrier”) under the public utilities code of that State, the court recognized that while television and telephony have some common aspects, they are essentially different. The court went on to say that:

"Furthermore, the service by television as well as radio is more akin to that of music halls, theaters, and newspapers than it is to that of either telephone or telegraph corporations."

Thus, broadcast stations, theaters, and newspaper serve the public, which has an important interest in their continued operation; however, they are not public utilities in the legal sense.20 Community antenna systems benefit and accommodate the public and enable the public to enjoy the entertainment and educational services of television stations but they do not provide so-called essential services. Community antennas do provide a service to the public but as in the cases of the other services mentioned above this fact does not con

United States v. Radio Corporation of America and National Broadcasting Company, Inc., 1959, 358 U.S. 334.

18 WSTV, Inc. v. Fortnightly Corporation, 23 Pike & Fischer RR 184 (1962); Frontier Broadcasting Company, 24 FCC 251, 16 Pike & Fischer RR 1005; see also the report and order of the Federal Communications Commission in docket No. 12443, 18 Pike & Fischer RR 1573. This issue has recently again been raised in the pending case of Philadelphia Television Broadcasting Co., et al. v. Federal Communications Commission, et al., case No. 19.577. U.S. App. D.C.

19 Television Transmission, Inc. v. Public Utilities Commission of State of California, 1956, 301 P. 2d 862.

20 For authority that a theater is not a public utility, see Tyson & Bros. United Theaters Ticket Offices, Inc. v. Banton, 1927, 273 U.S. 418; that a newspaper is not a public utility, In re Louis Wohl, Inc., D.C., Mich., 1939, 50 F. 2d 254; Chronical & Gazette Publ. Co. v. Attorney General, 94 N.H. 148, 48 A. 2d 478.