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Telecommunications Research & Action Center v. Federal Communications Commission
Citations: 255 U.S. App. D.C. 287; 801 F.2d 501Docket: No. 85-1160
Court: Court of Appeals for the D.C. Circuit; September 19, 1986; Federal Appellate Court
Circuit Judge Bork filed an opinion regarding a challenge by petitioners against the Federal Communications Commission (FCC) for not applying three political broadcast regulations to teletext, a technology that transmits text and graphics to television screens. The Communications Act of 1934 mandates that broadcast licensees provide reasonable access for legally qualified candidates for federal office (47 U.S.C. 312(a)(7)) and offer equal opportunities to all candidates if any candidate is permitted to use the station (47 U.S.C. 315(a)). Additionally, the FCC enforces a "fairness doctrine," which obligates broadcasters to provide opportunities for discussing conflicting views on public issues (47 C.F.R. 73.1910). The court examined whether the FCC erred in excluding teletext from these regulations. It concluded that the FCC acted reasonably regarding 312(a)(7) and the fairness doctrine but incorrectly ruled that section 315 does not apply to teletext. The court affirmed part of the FCC's decision while reversing in part and remanding for further proceedings. Teletext utilizes an unused portion of the television broadcast signal, specifically during the vertical blanking interval, which occurs between television signal pulses. The FCC's current framework for teletext focuses solely on over-the-air transmissions, not those via cable or telephone. While teletext is primarily controlled by main signal operators, the FCC allows its operation on a franchise basis and requires broadcasters to be responsible for all teletext content provided through their facilities. Viewers need a decoder to access teletext, with some decoders available for retail purchase and future integration into television sets. The teletext service typically begins with a table of contents, allowing viewers to select and view specific information pages. Teletext programming provides general interest content, including news, sports, weather, community events, and advertisements, without sound. It is funded by advertiser fees and is free for the public. The FCC, through a Notice of Proposed Rulemaking on November 27, 1981, aimed to create a favorable regulatory environment for teletext technology, suggesting it be classified as an ancillary service without strict performance standards. In its Report and Order from 1983, the FCC determined that political broadcasting requirements, specifically sections 312(a)(7) and 315 of the Communications Act, do not apply to teletext. Section 312(a)(7) allows for "reasonable access" for federal candidates via traditional broadcasts, which can satisfy obligations even if teletext access is denied. Section 315 was deemed inapplicable because teletext does not facilitate personal appearances by candidates. The Commission noted that teletext lacks the audiovisual power of main-channel broadcasting, thus reducing the risk of potential abuses related to candidate appearances. Additionally, the fairness doctrine, a policy created by the FCC and not mandated by Congress, was stated as not extending to new services like teletext, allowing the Commission discretion in its application. The Commission decided against applying the fairness doctrine to teletext, citing its unique characteristics that distinguish it from traditional broadcast programming. It highlighted that teletext combines print and radio technology, which fundamentally alters the communication landscape. The Commission noted that the fairness doctrine's application to traditional broadcasting is justified by the scarcity of broadcast frequencies, which does not apply to teletext due to its similarity to print media like newspapers and magazines. Consequently, it found the scarcity rationale insufficient for regulating teletext and deemed such regulation constitutionally questionable. The FCC aimed to foster the development of teletext services and acknowledged concerns that fairness doctrine obligations might hinder its viability, leading to the exemption of teletext from these regulations. Two motions for reconsideration were filed. The Media Access Project (MAP) argued that teletext serves the general public, fitting the definition of "broadcasting" under the Communications Act of 1934, thus triggering broadcast regulation. MAP contended that the FCC should ensure access to teletext and that section 312(a)(7) requires a licensee to accommodate candidates' requests for air time. It also challenged the FCC's interpretation of "use," asserting that teletext's capability to produce graphic images qualifies as a "use" under previous definitions. MAP insisted that the fairness doctrine is inherently linked to the public interest standard, and that Congress intended for it to be a binding element of the statute. The second petition for reconsideration echoed many of MAP's legal arguments. The petition argued against the classification of 'teletext' as merely 'ancillary,' 'novel,' or 'a print medium,' asserting that these terms do not exempt teletext from political broadcast regulations and that the scarcity doctrine is unrelated to the immediacy of traditional broadcasting. The petition requested the application of all political broadcasting regulations to teletext. However, on November 8, 1984, the Commission rejected these petitions in a Memorandum Opinion and Order, stating that teletext is primarily an ancillary service, disconnected from traditional mass communication. The Commission emphasized that teletext is fundamentally defined by its association with print media, allowing users to read and selectively engage with content in a manner distinct from traditional broadcasting. Consequently, the Commission determined that existing broadcast content regulations are inappropriate for teletext and did not believe Congress intended to apply such regulations to this medium. The Commission also elaborated on its First Amendment rationale, referencing Miami Herald Publishing Co. v. Tornillo to assert that requiring Commission intervention in teletext editorial decisions would violate First Amendment protections. Given the historical sensitivity of Congress to First Amendment issues, the Commission concluded that it would not interpret Congressional intent to include teletext under Section 315 and related statutes. The Telecommunications Research and Action Center and the Media Access Project subsequently filed a petition for review, reiterating prior legal arguments. The Commission noted that its interpretation of the First Amendment is critical to its analysis of political broadcasting regulations concerning teletext, highlighting that the unique nature of teletext raises First Amendment concerns not present in traditional broadcasting, thus complicating the application of existing Supreme Court precedents. The Commission expressed that while it does not definitively conclude that applying regulations to teletext would infringe upon the First Amendment, such application raises enough concerns to suggest that Congress likely did not intend for 'section 315 and similar provisions' to apply to teletext. The Commission referred to relevant case law to support its position. In Lion Broadcasting Co. v. FCC, the Supreme Court upheld the fairness doctrine and related regulations, justifying restrictions on broadcasting under the 'scarcity doctrine' due to limited broadcast frequencies, which necessitates government regulation to allocate these frequencies. The Court argued that the existence of more broadcasters than available frequencies undermines the notion of an unrestricted First Amendment right to broadcast. It also emphasized that the rights of viewers and listeners supersede those of broadcasters, affirming the government's authority to enforce regulations that ensure diverse community representation in broadcasting. In contrast, the Commission asserted that teletext regulation does not align with the permissive framework established in Red Lion but rather with the stricter First Amendment standards applicable to print media. The Miami Herald Publishing Co. v. Tornillo case illustrated this point, where the Court invalidated a right-of-reply statute for newspapers, ruling that such content regulation unconstitutionally interfered with editorial control and judgment. The Court emphasizes the challenge of reconciling governmental regulation of the editorial process with First Amendment protections for a free press. If the Commission's interpretation that Tornillo applies to teletext rather than Red Lion is correct, teletext would receive greater First Amendment safeguards than typical broadcasting, suggesting that political broadcasting regulations should be narrowly construed to prevent constitutional issues. The Commission presented two main arguments supporting its stance: 1. It introduced an 'immediacy' component to the scarcity doctrine, positing that the unique immediacy of broadcast media justifies its differential treatment. However, the Court rejects this argument, asserting that the Supreme Court's scarcity doctrine is based solely on the physical limitation of broadcasting frequencies, not on immediacy. Thus, this rationale cannot be used to justify content regulation for teletext. 2. The Commission argued that teletext's print nature does not face the same scarcity issues as other media, suggesting it competes with print media like newspapers and magazines. The Court counters this by highlighting that teletext operates on broadcast frequencies deemed scarce by the Supreme Court, which makes its content subject to regulation. The Court critiques the distinction between print and broadcast media as fundamentally flawed, noting that all media face scarcity of resources. It argues that using scarcity as a justification for content regulation in broadcasting, while exempting print media, leads to confusion and inconsistency, as scarcity is a universal characteristic affecting all forms of media. Furthermore, the issue of interference in broadcasting does not sufficiently justify content regulation that would be unacceptable in the print context. The governmental definition of broadcast frequencies lacks an explanatory principle for differing treatment between media types. While the government regulates streets to facilitate newspaper distribution, this does not warrant content regulation of newspapers to meet public needs, similar to how the scarcity of broadcast frequencies does not justify differential treatment between print and broadcast media. The Supreme Court may eventually reevaluate this distinction, potentially applying the principles from Tornillo to both media or establishing a more coherent constitutional distinction. Currently, neither the court nor the Federal Communications Commission (FCC) can invent new rationales to address the shortcomings in the existing legal framework, which has led to unfounded 'implicit' considerations in the law. The Supreme Court has distinguished between broadcast and print media based on the scarcity of broadcast frequencies. Teletext, despite its similarities to print media, utilizes these frequencies and is thus subject to the same regulatory standards as traditional broadcast media. The focus then shifts to Section 312(a)(7), which allows the FCC to revoke licenses for failing to provide reasonable access to candidates for federal office. The FCC concluded that this section does not require application to teletext services, as reasonable access can be satisfied through regular broadcasting alone, without the need for teletext access. The FCC maintains that broadcasters are not acting unreasonably by denying teletext access, asserting that candidates' rights can be fulfilled through other means. The scope of review in this matter is limited, with Congress endorsing a 'rule of reason' approach in Section 312(a)(7), as affirmed by the Supreme Court in CBS v. FCC. Congress has not provided specific guidance on implementing the statute's access requirement, resulting in a delegation of authority to the agency to define the statute through regulation. Such regulations are given controlling weight unless deemed arbitrary, capricious, or contrary to the statute, with the burden of proof on challengers of the agency's actions. The court applies judicial deference when reviewing the agency's interpretation of section 312(a)(7), upholding it if reasonable. Petitioners argue that the Commission's interpretation prohibits blanket bans on candidate advertising, requiring broadcasters to accommodate reasonable candidate needs. If the court finds the Commission’s decision inconsistent with prior policies, it must reverse unless the agency provides a reasoned analysis for the change. The Supreme Court's decision in CBS supports the need for an individualized, case-by-case approach in enforcing section 312(a)(7). It mandates that broadcasters must consider candidates' requests on their merits, and blanket policies are not acceptable. The Commission's standards against such blanket rules were upheld, emphasizing the necessity for tailored responses to candidates' air time requests. The Court recognized that while uniform policies for broadcasters could be more convenient, it upheld the Commission's individualized approach to candidate access under section 312(a)(7), which ensures reasonable access to federal candidates. The Court clarified that the Commission’s policy is not in conflict with prior Supreme Court rulings, as these rulings prohibit blanket rules that would undermine the individualized assessment required by the statute. Reasonableness in access does not necessitate subjective judgment in every case; rather, it allows for established rules to guide decisions while acknowledging that some cases clearly fall into categories of legality or illegality. The Commission is empowered by Congress to create rules for determining reasonable access. While it has primarily developed standards on a case-by-case basis, it has identified clear instances of access unreasonableness, leading to the acceptance of per se rules. Specifically, the Court approved the Commission's limitation that section 312(a)(7) applies only after a campaign begins, establishing a per se reasonableness rule that denying access to federal candidates before a campaign starts is always reasonable. The Court further clarified that its prohibition on blanket rules refers to those that would preclude case-by-case evaluations. In the teletext decision, the Commission merely established a clear per se rule for a specific operational aspect, similar to its earlier stance on subscription television, where it justified withholding access during prime time to preserve its service's value. The Commission determined that Federal candidates are entitled to prime time programming access due to its maximum audience potential. However, subscription television (STV) programming targets selective audiences, suggesting that STV stations reach their peak viewership outside traditional prime time. Consequently, the Commission concluded that reasonable access does not obligate STV stations to offer this programming timeframe to Federal candidates. The Commission supports the notion that licensees can designate certain times as unavailable for access based on audience limitations and the need to maintain service viability. This approach aligns with established Commission precedents regarding section 312(a)(7) and is consistent with the case-by-case evaluation permitted under the same section. The Supreme Court's endorsement of the Commission's policy on accommodating candidates' requests does not undermine this conclusion, as it implies that complex campaign issues can still be addressed via the main channel rather than teletext. The absence of evidence proving that main channel access cannot meet candidates’ needs further validates the Commission's stance. Section 315 of the Communications Act of 1934 imposes two key responsibilities on broadcast licensees: (1) it mandates equal opportunities for competing candidates, ensuring that if one candidate is given access to a station, all others must receive the same opportunity; and (2) it establishes the “lowest unit rate” obligation, which restricts the charges for candidates’ use of broadcasting stations during specified timeframes to the lowest rate offered for similar usage by other entities. Both obligations apply when there is a legally qualified candidate, a broadcasting station, and a usage instance of that station. Petitioners contest the Commission’s ruling that section 315 of the Communications Act does not apply to teletext, asserting that this interpretation contradicts the statute’s explicit language and intent. The Federal Communications Commission (FCC) is mandated by Congress to formulate rules to implement section 315, and its interpretations are generally afforded judicial deference unless compelling evidence suggests otherwise. However, the court finds that the FCC's interpretation lacks rationality and diverges from the statutory framework. The FCC's argument that teletext does not qualify as “traditional broadcast services” is deemed incorrect, as is its view that teletext does not involve a “use” as defined in the statute. The Communications Act defines “broadcasting” as the dissemination of radio communications intended for public reception, and the court asserts that teletext fits within this definition. The Commission argued that teletext's text-based nature excludes it from being classified as a radio communication, which the court refutes by emphasizing that the statutory language encompasses various forms of transmission, including text. Furthermore, the FCC described teletext as an "ancillary" service, which the court finds inconsistent with established precedent. The distinction made by the FCC fails to acknowledge that teletext operates within the broadcast spectrum similarly to traditional broadcasting, despite potentially attracting fewer viewers. The court reaffirms that viewer numbers are irrelevant in defining what constitutes broadcasting, reinforcing that teletext is indeed covered under the statute. An intent for public distribution is central to the determination of broadcasting, as established in Functional Music, Inc. v. FCC and reaffirmed in National Association of Broadcasters v. FCC. Under the Functional Music test, an intent for public distribution exists when the programming is deemed of interest to a general audience, which applies to teletext that carries news and information relevant to the public. The Commission failed to distinguish or refute this test, leading to the conclusion that teletext qualifies as “broadcasting” and is subject to obligations akin to those of broadcasting stations. Regarding section 315, which pertains to a candidate's use of transmission facilities, the legislative history indicates that it applies only to personal uses by candidates. The Commission defines a "use" as any appearance by a candidate identifiable by voice or picture, encompassing both spots and programs. However, if teletext services could not be categorized under this definition, it raises questions about the rationality of such a conclusion. The Commission's rigid definition, based on traditional audio-visual media, fails to adapt to the textual nature of teletext, which could accommodate personal statements and policy papers as forms of use. The Commission's reasoning is further criticized for claiming that teletext cannot produce a candidate's voice or picture, ignoring the medium's capability for high-resolution graphics that could present an identifiable image of a candidate. Therefore, the Commission must address whether "textual uses" of teletext fall within the definition of “use” or justify its refusal to adapt the definition to the medium's characteristics. Teletext cannot be deemed entirely incapable of a “use” under section 315, as the Commission did not recognize an obligation to extend its policy to new services like teletext. Petitioners argue that the fairness doctrine, a statutory obligation, requires broadcasting services to provide reasonable opportunities for contrasting viewpoints on controversial public issues. They assert that since teletext qualifies as broadcasting under the statute, the fairness doctrine must apply. The fairness doctrine mandates that licensees allocate a reasonable portion of broadcast time to discussing community issues and presenting diverse viewpoints. Teletext constitutes broadcast time managed by Commission licensees or their lessees, thus falling under the fairness doctrine without the need for extension. The Commission’s assertion that fairness obligations apply only to part of broadcast time is seen as a departure from precedent. The analysis revolves around whether the fairness doctrine is a statutory obligation that precludes the Commission from altering it. This dispute relates to a 1959 amendment to section 315 of the Communications Act, which excluded certain programming from the definition of “use” but maintained that broadcasters have an obligation to operate in the public interest and present conflicting views on significant issues. Petitioners argue this language reflects a codification of the fairness doctrine at the time, preventing the Commission from altering these obligations. However, the Commission disagrees with this interpretation. The language adopted in 1959 did not establish the fairness doctrine as a binding statutory obligation but reaffirmed the Commission's existing position that the public interest standard permits the fairness doctrine. The statutory amendment aimed to clarify that it does not alter the fairness doctrine as previously implemented. The obligation recognized was an administrative interpretation, not a legal mandate. The court reversed and remanded the Commission’s decision regarding section 315 of the Communications Act of 1934 while affirming the decision on section 312(a)(7) and the fairness doctrine. The equal-time provision of section 315 and the fairness doctrine are constitutionally equivalent, as noted in Red Lion. Although section 312(a)(7) was not enacted during Red Lion, its rationale applies similarly, as it requires broadcasters to allocate sufficient airtime for public issue discussions. The scarcity of broadcast frequencies, first introduced in National Broadcasting Co. v. United States, provided a rationale for content regulation, although the Supreme Court had not addressed this issue until Red Lion. Justice Frankfurter's opinion indicated that scarcity alone does not justify government regulation across all resources. The conventional American approach to resource allocation typically relies on market mechanisms, not governmental oversight. Arguments suggesting that broadcast media face greater scarcity than print media are unconvincing, as the current number of broadcast stations potentially exceeds that of newspapers and magazines available for political messaging. In Loveday v. FCC, 707 F.2d 1443 (1983), the court examined the regulatory framework surrounding political broadcasting, noting that some markets feature significantly more broadcasting stations than newspapers. The court clarified that the Red Lion decision should not be viewed as an absolute barrier to revising political broadcast regulation, which has faced substantial criticism. The Supreme Court hinted at potential constitutional challenges to these regulations and acknowledged that advancements in cable and satellite technology could render the scarcity doctrine outdated, although it refrained from reconsidering its stance without input from Congress or the FCC. The FCC has sought to have the Supreme Court reevaluate political broadcast regulations by highlighting the negative effects of the fairness doctrine and the diminishing relevance of scarcity due to technological changes. It has historically relied on general principles for administering regulations, considering factors such as prior candidate airtime and the impact on regular programming. The Commission has also set certain presumptions and requirements for broadcast licensees, such as providing prime-time access to federal candidates. Petitioners argued that the Commission's recent decision on teletext contradicts its established policies regarding candidate access. However, the court did not address this argument because it had not been raised before the agency, adhering to the exhaustion of administrative remedies as required by Section 405 of the Communications Act. This mandates that complainants must allow the FCC the opportunity to address legal or factual issues before pursuing them in court.