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U.S. appeals court upholds FCC’s cable TV franchising order

The FCC acted within its statutory authority in March when it issued an order adopting rules to prevent local franchising authorities from unreasonably refusing to award competitive cable television franchises, a U.S. appeals court said Friday.

The U.S. Court of Appeals for the Sixth District June 27 denied petitions from local franchising authorities, the National Cable & Telecommunications Association (NCTA) and others requesting that the court reverse the FCC and declare its order void because the commission lacked authority in the matter. The group opposing the rules also contended that even if the FCC had the authority, its rules were arbitrary and capricious.

In issuing its ruling, the three-judge panel found “the FCC acted well within its statutorily delineated authority in enacting the order and that there exists sufficient record evidence to indicate that the FCC did not engage in arbitrary and capricious rulemaking activity.”

In their petition to the court, those opposing the FCC rules contended that a relevant portion of the Communications Act dealing with awarding local cable TV franchises omits any mention of the commission, rather only mentioning franchising authorities. In its finding, the court noted that the petitioners were correct in pointing out the absence of any mention of the FCC in the section. However, equating the omission of the commission from the section with an absence of rulemaking authority was in error.

Regarding the argument that the FCC’s rules were capricious and arbitrary, the court found “the FCC’s rulemaking activity was rooted in a sufficient evidentiary basis.” The petitioners had argued the commission’s order was based on an “anonymous, hearsay-based, inaccurate and outdated” record. The court disagreed, saying there was “amble evidence” in the commission’s finding that “the operation of the franchising process had impeded competitive entry in multiple ways.”

In a statement issued after the ruling, FCC Chairman Kevin Martin applauded the court’s decision. Recalling Commissioner Jonathan Adelstein had dissented and criticized the Media Bureau for having insufficient evidence; Martin said he was particularly pleased the appeals court unanimously found that the record fully supported the agency’s rulemaking.