United States v. Southwestern Cable Co.

392 U.S. 157 (1968)

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Nature of the Case

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Facts

CATV systems receive the signals of television broadcasting stations, amplify them, transmit them by cable or microwave, and ultimately distribute them by wire to the receivers of their subscribers. They do not produce their own programming and do not recompense producers or broadcasters for use of the programming which they receive and redistribute. CATV systems commonly charge their subscribers installation and other fees. By late 1965, it was reported that there were 1,847 operating CATV systems, that 758 others were franchised but not yet in operation, and that there were 938 applications for additional franchises. These systems supplement broadcasting by facilitating satisfactory reception of local stations in adjacent areas in which such reception would not otherwise be possible, and they may transmit to subscribers the signals of distant stations entirely beyond the range of local antennae. Their principal function has more frequently become the importation of distant signals. D found that CATV is 'related to interstate transmission,' but reasoned that CATV systems are neither common carriers nor broadcasters, and therefore are within neither of the principal regulatory categories created by the Communications Act. The Commission declared that it would seek appropriate legislation 'to clarify the situation.' The Commission declared that it would seek appropriate legislation 'to clarify the situation.' The Commission in 1962 conducted a rule-making proceeding in which it re-evaluated the significance of CATV for its regulatory responsibilities. It found that 'CATV competition through importing signals can have a substantial negative effect upon local station audience and revenues. CATV systems were required to transmit to their subscribers the signals of any station into whose service area they have brought competing signals. CATV systems were forbidden to duplicate the programming of such local stations for periods of 15 days before and after a local broadcast. After further hearings, the Commission also held that the Act confers adequate regulatory authority over all CATV systems. It then promulgated revised rules. P sought relief from the newfound powers of D wherein D restricted P’s service substantially. On appeal, the Ninth Circuit held that D lacked the authority under the Communications Act. The Supreme Court granted certiorari.