CITY OF NEW YORK, ET AL., PETITIONERS V. FEDERAL COMMUNICATIONS COMMISSION, ET AL. No. 87-339 In the Supreme Court of the United States October Term, 1987 On Writ Of Certiorari To The United States Court Of Appeals For The District Of Columbia Circuit Brief For The Federal Respondents TABLE OF CONTENTS Question Presented Opinions below Jurisdiction Statement Summary of argument Argument: Congress gave the Commission authority to set maximum technical standards governing the quality of cable television signals A. The language of the Cable Act gives the FCC plenary authority over technical standards for cable television signals B. The history and background of the Cable Act confirm that Congress intended to confer upon the Commission comprehensive authority to set uniformly applicable technical standards C. The Commission's regulations reasonably and properly implement the federal statutory purposes Conclusion OPINIONS BELOW The opinion of the court of appeals (Pet. App. 4-48) is reported at 814 F.2d 720. The report and order of the Federal Communications Commission (Pet. App. 49-95) is reported at 50 Fed. Reg. 52462. JURISDICTION The judgment of the court of appeals was entered on March 20, 1987, and a petition for rehearing was denied on May 27, 1987 (Pet. App. 1). The petition for a writ of certiorari was filed on August 25, 1987, and was granted on November 30, 1987. The jurisdiction of this Court rests on 28 U.S.C. 1254(l). QUESTION PRESENTED Whether the Federal Communications Commission exceeded its statutory authority in adopting regulations that prescribe technical standards governing the quality of cable television signals and forbid local authorities from imposing more stringent technical standards. STATEMENT 1. Cable television systems transmit "a variety of broadcast and nonbroadcast signals obtained from several sources" to subscribers for a fee. Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 700-701 (1984). The Federal Communications Commission (FCC or Commission) began regulating cable television systems in the 1960's. The Commission's early regulations principally concerned rules for cable systems' carriage of television broadcast signals. Id. at 701-702; United States v. Southwestern Cable Co., 392 U.S. 157, 165-167 (1968). /1/ The Commission revised its cable television regulatory regime in 1972. Rather than importing into the cable television context a federal licensing system, the Commission adopted a program of "'deliberately structured dualism'" (Capital Cities, 467 U.S. at 702 (citation omitted)). It allocated to state and local authorities "responsibility for granting franchises to cable operators within their communities and for overseeing such local incidents of cable operations as delineating franchise areas, regulating the construction of cable facilities, and maintaining rights of way" (ibid.). The Commission retained "exclusive jurisdiction over all operational aspects of cable communication, including signal carriage and technical standards." Ibid.; Cable Television Report and Order, 36 F.C.C.2d 143, 170-176, 207-210, on reconsideration, 36 F.C.C.2d 326 (1972), aff'd, American Civil Liberties Union v. FCC, 523 F.2d 1344 (9th Cir. 1975); see also Cable Television (Clarification and Notice), 46 F.C.C.2d 175, 178 (1974). /2/ In exercising its authority to regulate the technical and operational aspects of cable television systems, the Commission divided cable services into four categories: Class I cable channels, which are channels used to deliver the signals of television broadcast stations; Class II channels, which are "used for delivering non-encoded 'cablecast' programming such as Cable News Network, ESPN, and public, educational, and governmental access programming"; Class III channels, which deliver "encoded cablecast programming such as Home Box Office and other pay channels"; and Class IV channels, which provide "two-way transmission capability allowing subscribers to return information to the control point." Pet. App. 8-9; Cable Television Report and Order, 36 F.C.C.2d at 198-199; 47 C.F.R. 76.5(f)-(w) (1986). The Commission prescribed minimum technical standards to govern the signal quality of Class I channels; it did not establish technical standards for the other channel classes. In 1972, when the Commission issued its technical standards, no state or franchising authority had adopted such standards and the Commission found no reason at that time to preempt local authority in that area. Cable Television Report and Order, 36 F.C.C.2d at 198-201; id. at 359-360 (on reconsideration). Over the next few years, as local franchising authorities began to adopt their own technical standards, the Commission became concerned that "unrealistic" local standards might "hamper the development of cable television because technical equipment could not be manufactured for nationwide use." Cable Television, 46 F.C.C.2d at 178. The Commission thus began a rulemaking proceeding to determine whether to preempt local regulation of technical standards governing signal quality. Ibid. After considering comments, the Commission found "a compelling need for national uniformity in cable television technical standards." Cable Television, 49 F.C.C.2d 470, 477 (1974). The Commission emphasized that it was concerned only with "technical performance standards," which it defined as "standards that are quantitative definitions of the electrical or optical characteristics of a signal source, transmission system, or terminating device. Such standards speak only to the shaping, amplification, attenuation, purity, etc., of the signals carried on cable systems" (id. at 471). The Commission distinguished those technical standards from "mechanical or equipment standards" relating to a piece of equipment's ability to stand up to the environment and to "the channel capacity of a system, protection against electrical supply outages, the placement of structures, construction practices, or electrical safety code enforcement" (id. at 471-472). The Commission stated that it was "increasingly clear * * * that cable television is becoming an integral link in" the nationwide wire and radio communications system (Cable Television, 49 F.C.C.2d at 478). It further stated that "(t)he long term goal of an efficient nationwide communications system cannot be achieved if one segment of that system develops with a multiplicity of jurisdictionally mandated, non-uniform, technical characteristics that may result in incompatibility. Whatever the transmission medium, electromagnetic signals do not change their characteristics according to political boundaries" (ibid.). The Commission observed that its experience under its prior decision to permit the promulgation of technical standards by franchising authorities showed the adverse effect of local regulation in this area. It found that local technical standards have "cover(ed) the entire range of possibilities from highly sophisticated standards * * * to clearly unworkable or impossibly excessive demands" (49 F.C.C.2d at 478). The Commission found that some stringent local standards had had the "unforeseen result of * * * effectively prohibit(ing) the use of low-cost video equipment in favor of broadcast quality equipment" and had thereby made independent cable programming "economically prohibitive" (id. at 479). The Commission also found that nonuniform technical parameters might "have a deleterious effect on the development of new cable services" because "(u)niformity in the parameters of the technical characteristics for data transmission is essential to the successful use of cable for this purpose" (ibid.). Finally, the Commission found that "the development and marketing of signal source, transmission, and terminal equipment could be seriously impeded by non-uniform standards" because manufacturers would be required to comply with a variety of different standards (ibid.). In order to avoid those problems, the Commission concluded that it was appropriate to "rationalize, interrelate, and bring into uniformity the myriad standards now being developed by numerous jurisdictions" by preempting local regulation of technical standards (id. at 480). /3/ This Court in 1984 affirmed the Commission's preemption authority in sweeping terms in Capital Cities Cable, Inc. v. Crisp, supra, which involved a state law prohibiting cable operators from carrying broadcast programs containing commercials for alcoholic beverages. The Court stated that the Commission's "comprehensive" authority to regulate all aspects of interstate communication by wire or radio includes the power to regulate cable television systems, and that this authority "extends to all regulatory actions 'necessary to ensure the achievement of the Commission's statutory responsibilities'" (467 U.S. at 700 (citation omitted)). Thus, "if the FCC has resolved to pre-empt an area of cable television regulation and if this determination 'represents a reasonable accommodation of conflicting policies' that are within the agency's domain, (the Court) must conclude that all conflicting state regulations have been precluded" (ibid. (citation and footnote omitted)). Finding that the Commission had retained "exclusive jurisdiction over all operational aspects of cable communication, including signal carriage and technical standards," the Court concluded that a state law regulating commercial advertising was invalid because the statute "interfered with a regulatory area that the Commission has explicitly preempted." Id. at 702, 705 (footnote omitted); see also New York State Comm'n v. FCC, 749 F.2d 804 (D.C. Cir. 1984). 2. In 1984, Congress amended the Communications Act of 1934 (Communications Act) by adopting the Cable Communications Policy Act of 1984, 47 U.S.C. (Supp. III) 521 et seq. (Cable Act), to "clarif(y) the current system of local, state and Federal regulation of cable television." H.R. Rep. 98-934, 98th Cong., 2d Sess. 19 (1984). Acting against the background we described above, Congress sought to "preserve the critical role of municipal governments in the franchise process," while at the same time "defining and limiting the authority that a franchising authority may exercise through the franchise process" (ibid.). Congress also sought to "minimize unnecessary regulation that would impose an undue economic burden on cable systems." 47 U.S.C. (Supp. III) 521(6); see also H.R. Rep. 98-934, supra, at 20. The statute affirmed the FCC's "exclusive jurisdiction over cable service, over all persons engaged in the provision of cable service, and over the facilities which relate to such service, as provided in" the Cable Act (H.R. Rep. 98-934, supra, at 95). The Cable Act permits local franchising authorities to select cable franchisees (47 U.S.C. (Supp. III) 541) and to specify the services that a franchisee must provide (47 U.S.C. (Supp. III) 541(a)). At the same time, the statute explicitly limits the powers of local franchising authorities. See, e.g., 47 U.S.C. (Supp. III) 542 (prohibiting assessment of a franchise fee greater than five percent annually); 47 U.S.C. (Supp. III) 543 (barring regulation of cable rates except where there is no effective competition); 47 U.S.C. (Supp. III) 546 (specifying conditions under which a franchise must be renewed). The provision of the Cable Act directly pertinent to this case is Section 624 (47 U.S.C. (Supp. III) 544), which is entitled "Regulation of services, facilities, and equipment." Section 624(a) states that a franchising authority "may not regulate the services, facilities, and equipment provided by a cable operator except to the extent consistent with this subchapter" (47 U.S.C. (Supp. III) 544(a)). The next subsection permits local franchising authorities to "establish requirements for facilities and equipment" (47 U.S.C. (Supp. III) 544(b)(1)). Section 624(e) states that the FCC "may establish technical standards relating to the facilities and equipment of cable systems which a franchising authority may require in the franchise" (47 U.S.C. (Supp. III) 544(e)). This subsection allows the Commission "to set technical standards related to facilities and equipment required by a franchising authority pursuant to a franchise agreement" (H.R. Rep. 98-934, supra, at 70). But it "does not affect the authority of a franchising authority to establish standards regarding facilities and equipment in the franchise pursuant to section 624(b) which are not inconsistent with standards established by the FCC under this subsection" (ibid.). 3. In April 1985, the Commission issued a notice of proposed rulemaking regarding its cable television technical standards. See 50 Fed. Reg. 7801-7804 (1985). The Commission observed that its technical standards "were adopted at a time when the cable industry was little more than a series of master antenna systems for communities. The only competition to the service was over-the-air broadcasting" (id. at 7801). "Since 1972," the Commission stated, "competition has increased from several sources, including video cassette recorders, satellite home earth terminals, and multipoint distribution systems. It therefore seems appropriate to reevaluate the technical requirements at this time" (ibid.). The Commission proposed to end federal enforcement of technical standards and instead proposed to publish such standards as guidelines that local authorities could include in franchise agreements (see 50 Fed. Reg. 7802 (1985)). The Commission observed that it had preempted local jurisdiction in the area of technical requirements in order to "prevent any adverse impact on the growth of cable television because of the imposition of overly burdensome technical requirements at the local level" (ibid.). Because the Commission "continue(d) to believe that this concern is valid and that there should be a national policy in the technical area," it proposed to continue that policy (ibid.). After considering comments, the Commission adopted a modified version of the proposed rule (Pet. App. 49-95). The Commission was "persuaded that in the vast majority of situations the severe penalties that will be imposed in the marketplace for those operations that do not perform satisfactorily far exceed and can safely be used to replace FCC penalties that might be imposed through the regulatory process" (id. at 65-66). In light of that circumstance, and of the continuing authority of state and local franchising authorities to enforce federally prescribed technical standards, the Commission concluded that "federally enforced standards are no longer necessary or desirable" (id. at 66). The Commission found it appropriate "to retain technical standards guidelines at the federal level which could be used, but could not be exceeded, in state and local technical quality regulations" (Pet. App. 66-67). The Commission observed that "(t)echnical standards that vary from community to community create potentially serious negative consequences for cable system operators and cable consumers in terms of the cost of service and the ability of the industry to respond to technological changes" (id. at 66). The Commission stated that its longstanding policy of preempting stringent local regulation of technical standards was designed to avoid those adverse effects, and found that "(t)he reasons that caused the adoption of this policy appear to be as valid today as they were when the policy was first adopted" (id. at 68). Noting that cable television was now offered in more than 18,500 communities, the Commission explained that the cost to equipment suppliers of "keeping track of and complying with numerous different requirements is undeniably significant and there appear to be few if any countervailing benefits associated with such disparate requirements" (id. at 69). /4/ Finally, the Commission concluded that its authority to preempt local regulation of technical standards had not been altered by the Cable Act. The Commission observed that its policy is "wholly consistent with the Cable Act's intent to establish a national policy that encourages the growth and development of cable television services" (Pet. App. 73 (footnote omitted)). Citing Section 624(e), which expressly empowers the Commission to issue technical standards, the Commission stated that the Act "appears to specifically anticipate the continuation of our existing policy" (Pet. App. 72). The Commission found "nothing in the legislative history that suggests Congress did not approve of the existing policy or that it intended to limit our ability to continue it" (id. at 72-73 (footnote omitted)). 4. Petitioners sought judicial review of the Commission's rule under 47 U.S.C. 402(a). The scope of such review is governed by the Administrative Procedure Act (5 U.S.C. 706). The court of appeals upheld the Commission's rule in part and vacated the rule in part (Pet. App. 4-48). The court first considered the Commission's authority to preempt local regulation of technical standards governing signal quality. It observed that "'(t)he critical question in any pre-emption analysis is always whether Congress intended that federal regulation supersede state law'" (id. at 17, quoting Louisiana Public Service Comm'n v. FCC, 476 U.S. 355, 369 (1986)). "Since Congress legislated against the backdrop of the Commission's preexisting preemption regulation without criticizing that regulation," the court said, "we infer that Congress endorsed it, except where the Cable Act explicitly or implicitly modified its provisions" (Pet. App. 19-20). The court of appeals looked to Section 624 of the Cable Act to determine whether Congress intended to modify prior law. It observed that Congress permitted local franchising authorities to "establish requirements for facilities and equipment" to be provided by the cable operator (47 U.S.C. (Supp. III) 544(b)(1)), but at the same time "clearly limit(ed) a franchisor's freedom of action" (Pet. App. 21) by stating that "any franchising authority may not regulate the services, facilities, and equipment provided by a cable operator except to the extent consistent with" the statute (47 U.S.C. (Supp. III) 544(a)). The court stated that Section 624(e) (47 U.S.C. (Supp. III) 544(e)), which authorizes the FCC to establish technical standards relating to facilities and equipment, "indicates (that) the authority to curtail (the franchisors') freedom of action was delegated to the FCC, at least insofar as the FCC's 'technical standards' overlap the franchisors' specifications of certain 'services, facilities and equipment'" (Pet. App. 21 (citation omitted)). The court observed that the legislative history of Section 624(e) supports its interpretation. The court quoted the passage of the House Committee Report stating that the delegation of authority to the Commission "'does not affect the authority of a franchising authority to establish standards regarding facilities and equipment . . . which are not inconsistent with standards established by the FCC under this subsection'" (Pet. App. 21-22 (citation omitted; emphasis added by the court of appeals)). It concluded that the phrase "not inconsistent with" authorizes the preemption of any technical standard that exceeds a standard set by the FCC. Finding that the Commission's broad authority under Section 624(e) allows it to decide "that a certain level of regulation is all that is desirable" (Pet. App. 26 (emphasis in original)), the court upheld that portion of the Commission's regulation setting technical standards for Class I channels and forbidding local authorities from imposing stricter standards. The court of appeals, however, vacated that part of the FCC's regulation barring franchise authorities from setting technical standards for Class II, III, and IV channels, while forbearing from setting technical standards itself. The court noted that the provision of the Cable Act governing the renewal of cable television franchises permits a franchising authority to consider signal quality in deciding whether to renew a franchise (see 47 U.S.C. (Supp. III) 546(c)(1)(B)). It stated that the Commission's refusal to adopt technical standards for Classes II, III, and IV, combined with its policy of forbidding franchising authorities from adopting such standards, "seems to put franchisors in a 'Catch-22' position"; a franchising authority can evaluate a cable operator's signal quality only by reference to objective technical standards, but no such standards have been adopted by the FCC and standards may not be adopted by the franchising authority (Pet. App. 32). The court concluded, therefore, that the Commission has "an obligation explicitly to consider the interrelationship between" the statutory provision governing technical standards (Section 624) and the provision governing franchise renewals (Section 626, 47 U.S.C. (Supp. III) 546) (Pet. App. 34-35). The court directed the Commission to consider that interrelationship on remand. Review has not been sought from that aspect of the court of appeals' judgment. /5/ Judge Mikva dissented (Pet. App. 35-48). He concluded that the Cable Act allows local franchising authorities to impose technical standards more stringent than the standards adopted by the Commission. SUMMARY OF ARGUMENT 1. Section 624(e) of the Cable Act gives the FCC the power to "establish technical standards relating to the facilities and equipment of cable systems." Congress placed no restrictions on this authority. No other provision of the Cable Act expressly permits any other federal, state, or local entity to set technical standards. Hence, the Commission acted within the scope of its authority under Section 624(e) when it used its broad rulemaking power to set the outer limits on technical standards that local authorities may impose on cable systems. 2. The history and background of the Cable Act confirm that Congress intended to confer upon the Commission plenary authority under Section 624(e) to set technical standards. Prior to the Cable Act, the FCC asserted power to set the limits on "technical standards" that may be applied to cable operators. The FCC, however, left to local authorities the authority to set other requirements for facilities and equipment. Congress adopted precisely this same distinction between "technical standards" and "requirements for facilities and equipment" when it passed the Cable Act. Congress conferred upon the Commission the power to set technical standards and permitted local franchising authorities to establish requirements for equipment and facilities. In so doing, Congress expressly recognized that the Commission's technical standards -- whatever they are -- would prevail over inconsistent local requirements. At the very least, therefore, the structure of the Cable Act and Congress's division of responsibilities are consistent with the FCC's decision to set the maximum technical standards that may be imposed on cable operators. 3. The Commission's regulations reasonably and properly implement the federal statutory purposes of the Cable Act. One purpose of the Act was to "minimize unnecessary regulation." The Commission, after considering the competing interests, reasonably set limits on government regulation of technical standards so as to encourage expansion and innovation in the cable industry. The Commission's action was not arbitrary or capricious, was not precluded by Congress, and was adopted in furtherance of statutory policies whose implementation was committed by Congress to the Commission. ARGUMENT CONGRESS GAVE THE COMMISSION AUTHORITY TO SET MAXIMUM TECHNICAL STANDARDS GOVERNING THE QUALITY OF CABLE TELEVISION SIGNALS This case is an action brought pursuant to the Commmunications Act and the Administrative Procedure Act to challenge the authority of the FCC to issue regulations that set the outer limit of technical standards that franchising authorities may require for cable television signal carriage. The FCC regulations expressly preempt some local regulatory authority; local authorities may not enforce more stringent technical standards for cable signals. /6/ The question before the Court is whether the Commission, in adopting the regulations, acted "in excess of statutory jurisdiction, authority, or limitations" (5 U.S.C. 706(2)(C)). Accordingly, petitioners err in asserting (Br. 15) that this Court must look for "'clear' or 'unmistakable' Congressional intent to preempt technical standards." Congress did not enact the regulations under review; the Commission adopted them. And the Commission's expression of preemptive intent could not be clearer -- "No technical parameter in excess of the (FCC standards) may be required" (Pet. App. 87). Thus, the Court's inquiry necessarily must be whether the agency has acted within the scope of its statutory authority, in furtherance of the federal statutory purposes, and has not exceeded limitations imposed by Congress. In answering those questions, the courts must fully recognize any role Congress intended to confer upon or preserve for the states (see, e.g., Louisiana Public Service Comm'n v. FCC, supra) and should not lightly infer congressional authorization of displacement of the states from traditional areas of their regulatory authority (see De La Cuesta, 458 U.S. at 172 (O'Connor, J., concurring)). But neither of those considerations -- to which normal principles of deference to an agency's interpretation of its statutory authority must give way in appropriate cases -- applies here. On the contrary, Congress expressly recognized the power of the Commission to preempt local regulation in this area when it noted that local franchising authorities could not impose requirements on cable operators that are "inconsistent with standards established by the FCC" (H.R. Rep. 98-934, supra, at 70). Indeed, here, as in United States v. Riverside Bayview Homes, Inc, 474 U.S. 121 (1986), the "language, policies, and legislative history" (id. at 131) of the Communications Act and the Cable Act support the Commission's interpretation of its authority. The Commission's decision to prescribe the limits of technical standards requirements for cable signals should therefore be upheld. /7/ A. The Language of the Cable Act Gives the FCC Plenary Authority Over Technical Standards for Cable Television Signals In enacting the Cable Act, Congress broadly granted the FCC "jurisdiction over cable service, over all persons engaged in the provision of cable service, and over the facilities which relate to such service, as provided in" the Cable Act (H.R. Rep. 98-934, supra, at 95). The specific provisions of the Cable Act give this sweeping mandate precise content. Of particular relevance here, Section 624(e) of the Cable Act provides: "The Commission may establish technical standards relating to the facilities and equipment of cable systems" (47 U.S.C. (Supp. III) 544(e)). No other provision of the Act expressly permits any other federal, state, or local entity to set technical standards. In addition, Section 303(r) of the Communications Act (47 U.S.C. 303(r)), which encompasses the provisions of the Cable Act, states that the Commission may "(m)ake such rules and regulations and prescribe such restrictions and conditions, not inconsistent with law, as may be necessary to carry out the provisions of" the statute. Undoubtedly, under these provisions, the Commission, if it had seen fit to do so, could have prescribed uniform technical standards directly applicable to all cable operators. See generally Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 721 (1985). Any attempt by a local franchising authority to require a particular cable operator to deviate from those standards -- by requiring conformance to a higher or lower locally prescribed standard -- would then obviously be preempted as conflicting with the federal regulation. Here, the Commission has instead found it appropriate to allow local franchising authorities a substantial measure of discretion in determining whether and to what extent they will utilize franchising agreements to enforce technical standards on cable operators. The Commission's regulations merely prescribe the maximum standards that may be required. Local franchising authorities are free to choose to enforce technical standards or not, to any extent up to that maximum, as they see fit. /8/ This more limited prescription by the Commission of a technical standards criterion is, we submit, no less valid than would be the more rigid regulation hypothesized at the beginning of this paragraph. It is no less a valid exercise by the Commission of its rulemaking authority under the Communications Act to set "technical standards" (47 U.S.C. (Supp. III) 544(e)) governing the quality of cable television signals. /9/ Congress could have included provisions in the Cable Act that limited the Commission's authority to set technical standards. For example, Section 1 of the Communications Act (47 U.S.C. (Supp. III) 151) gives the FCC broad authority to regulate "interstate and foreign commerce in communication by wire and radio," but Section 2(b) of the same Act (47 U.S.C. (Supp. III) 152(b)) withdraws any jurisdiction with respect to "charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communication service." See Louisiana Public Service Comm'n v. FCC, supra. See also FCC v. Midwest Video Corp., 440 U.S. 689 (1979) (Section 3(h) of the Communications Act (47 U.S.C. 153(h)) withdraws FCC authority to adopt regulation that makes a broadcaster a common carrier). Congress, however, included no provision in the Cable Act to restrict the Commission's authority to set technical standards for signals carried through cable systems. /10/ Petitioners would add an unwritten restriction to Section 624(e) of the Cable Act. Petitioners essentially argue that Congress authorized the Commission only to set minimum technical standards that may be supplemented by more stringent local regulations -- i.e., that the Commission has no power to set the maximum technical standards that may be required of cable companies regardless of their location in the United States and regardless of the adverse impact of diverse and more stringent technical standards. Petitioners' proposed restriction, however, would seriously tie the Commission's hands in a way nowhere expressed by Congress. Instead, Congress comprehensively empowered the Commission to set technical standards for cable television signals, as an aspect of the Commission's broad charter to "make available, so far as possible, to all the people of the United States a rapid, efficient, Nation-wide and world-wide wire and radio communication service" (47 U.S.C. 151). In the words of this Court in Capital Cities Cable Inc. v. Crisp (467 U.S. at 708), "the Commission has determined that only federal preemption of state and local regulation can assure cable systems the breathing space necessary to expand vigorously and provide a diverse range of program offerings to potential cable subscribers in all parts of the country." The FCC's judgment regarding the rigorousness of appropriate technical standards requirements throughout the country "may not enjoy universal support," but "it plainly represents a reasonable accommodation of the competing policies committed to the FCC's care" (ibid. (emphasis added)). As petitioners note (Br. 24 n.20), the holding of the Court in Capital Cities does not control the outcome of this case. We submit, however, that the Court's analysis in that case is dispositive here. The Court there observed, even prior to the Cable Act, that the FCC had "authority to regulate the signals carried by cable television systems" (467 U.S. at 699). The Court further stated that, within this domain, the FCC had authority to preempt local regulation if the Commission's decision was reasonable (id. at 700). The Cable Act reaffirmed without limitation the FCC's authority to set "technical standards" (47 U.S.C. (Supp. III) 544(e)). It follows that, under the Court's reasoning in Capital Cities, the FCC's decision to preempt local regulation of technical standards must be upheld if reasonable (see pp. 25-26, infra). In sum, Section 624(e) of the Cable Act does not require the FCC to regulate -- or to permit local regulation -- to the greatest extent possible. Section 624(e) simply gives the FCC plenary jurisdiction over the question of technical standards governing cable signals. /11/ And "when federal officials determine, as the FCC has here, that restrictive regulation of (technical standards governing cable signals) is not in the public interest, 'States are not permitted to use their police power to enact such a regulation.'" Capital Cities, 467 U.S. at 708 (quoting Ray v. Atlantic Richfield Co., 435 U.S. 151, 178 (1978)). Accordingly, the Commission did not exceed its authority in setting technical standards that local regulators may not surpass. B. The History and Background of the Cable Act Confirm that Congress Intended to Confer upon the Commission Comprehensive Authority to Set Uniformly Applicable Technical Standards Contrary to petitioners' contention (Br. 16-19), the legislative history of the Cable Act does not support an implicit limit on the Commission's authority under Section 624(e) to set the maximum technical standards that may be required throughout the country. Indeed, far from indicating that the Commission's decision "is not one that Congress would have sanctioned" (United States v. Shimer, 367 U.S. at 383), the Cable Act's history and background confirm that the Act's language was intended to give the Commission precisely that authority. Ten years before the passage of the Cable Act, the Commission decided to assert exclusive authority to set technical standards for cable television signal carriage. See Cable Television, 49 F.C.C.2d at 470. The Commission concluded that diverse local technical standards would impair the achievement of an efficient and innovative cable television system across the nation. The Commission, therefore, barred local regulators from imposing technical standards more stringent than those adopted by the Commission (id. at 480). The FCC, in preempting local authority in this area at that time, gave the term "technical standards" a precise meaning. The Commission made it clear that "technical standards" meant "quantitative definitions of the electrical or optical characteristics of a signal source, transmission system, or terminating device" (49 F.C.C.2d at 471). The Commission further specified that "(s)uch standards speak only to shaping, amplification, attenuation, purity, etc. of the signals carried on cable systems" (ibid.). The Commission assumed exclusive jurisdiction only over such precisely defined "technical standards." The Commission did not limit local authority to set and enforce other standards that relate to a cable system's design, facilities, or equipment (id. at 471-472). Those other standards included "mechanical or equipment standards designed to protect, for example, against extraordinarily corrosive environments, daily or seasonal temperature extremes, high winds" and the like (ibid.). Non-technical standards left to local authority also included requirements "concerned with the channel capacity of a system, protection against electrical supply outages, the placement of structures, construction practices, or electrical code safety enforcement" (id. at 472). This distinction between "technical standards" (under the jurisdiction of the FCC) and other requirements relating to cable facilities and equipment (under the jurisdiction of local authorities) was carried over into the Cable Act. /12/ As we have noted, Section 624(e) of the Cable Act expressly gives the FCC authority to establish "technical standards." Since there is no indication to the contrary, Congress must be presumed to have adopted the FCC's established meaning of the term "technical standards." See Roadway Express, Inc. v. Piper, 447 U.S. 752, 759 (1980). Indeed, Congress's preservation of the established division of regulatory authority is further confirmed by the Cable Act's provision permitting local franchising authorities to "establish requirements for facilities and equipment" (47 U.S.C. (Supp. III) 544(b)). The House Committee Report made clear that this phrase refers to the type of non-technical requirements historically left by the FCC to local authorities. See H.R. Rep. 98-934, supra, at 68. Those requirements were specified to include "channel capacity; system configuration and capacity * * *; headends and hubs; two-way capability; addressability; trunk and feeder cable; and any other facility or equipment requirement, * * * including microwave facilities, antennae, satellite earth stations, uplinks, studio and production facilities, vans and cameras * * * " (ibid.). Significantly, the House Committee Report did not refer to "technical standards" as within the domain of local authorities. /13/ The language of the Cable Act further confirms the Act's preservation of this longstanding division of regulatory authority. Section 624(a) of the Act states that a local "franchising authority may not regulate the services, facilities, and equipment provided by a cable operator except to the extent consistent with" the Cable Act (47 U.S.C. (Supp. III) 544(a)). Congress plainly intended this Section to "impose limitations on a franchising authority." H.R. Rep. 98-934, supra, at 68. Under the scheme established by Congress, therefore, a local franchising authority must find an express provision in the Cable Act that allows local regulation before it may impose a specific type of requirement. This is reconfirmed by Section 624(f) of the Act (47 U.S.C. (Supp. III) 544(f)), which provides: "Any Federal agency, State, or franchising authority may not impose requirements regarding the provision or content of cable services, except as expressly provided in" the Cable Act. But nothing in the Cable Act or the regulations promulgated by the FCC permits local authorities to set technical standards of the type at issue in this case. Hence, at the very least, the structure of the Cable Act and Congress's division of responsibilities are consistent with the Commission's decision to assert exclusive jurisdiction over the maximum technical standards that may be imposed on cable operators. Petitioners' primary argument (Br. 17-19) is that one statement in the legislative history of Section 624(e) of the Cable Act, the provision which gives the FCC authority to set technical standards, shows that Congress intended to limit the FCC's ability to preempt local technical standards. The House Committee Report states that Section 624(e) "does not affect the authority of a franchising authority to establish standards regarding facilities and equipment in the franchise pursuant to (S)ection 624(b) which are not inconsistent with standards established by the FCC" (H.R. Rep. 98-934, supra, at 70). Petitioners apparently read this statement as creating an enclave of local authority over technical standards that the FCC may not preempt. /14/ Petitioners' view is mistaken. The House Committee Report's language may well not have been intended to say anything at all about local authority to set technical standards of the type involved in this case. The Commission clearly is given authority to set technical standards under Section 624(e); local authorities may set other requirements for facilities and equipment under Section 624(b). It is certainly possible that the Commission's technical standards could conflict with local requirements regarding equipment. The House Committee Report can be read as simply and reasonably noting that, in such a case, the FCC's technical standards prevail. Alternatively, the language in the House Committee Report may have been intended to recognize that local authorities, through franchising agreements, may enforce technical standards that are not inconsistent with FCC regulations. But under this interpretation of the Report, no less than the other, Congress has expressed no intention to limit the FCC's power to preempt local regulation of technical standards. On the contrary, as we have shown, the Report acknowledges the FCC's authority in this discrete area to supersede inconsistent local standards. This is a facial challenge to the FCC's regulations; the Court does not have a specific local standard to examine to determine whether it is consistent with the FCC standards. Plainly, however, a certain type of local standard would be inconsistent with the FCC's regulations. A locally imposed standard that exceeded the FCC's standard would conflict with the FCC's regulations because the Commission specified that its standards are the maximum allowable requirements. The Commission certainly could have written a different regulation. The Commission could have set federal technical standards and permitted local authorities to enforce stricter standards. If that were the FCC's regulation, then a more stringent local standard would be consistent with the FCC's standards. /15/ But the FCC did not adopt such a rule; it promulgated standards that expressly set the outer limit of permissible government regulation. /16/ Accordingly, a more stringent local standard is "inconsistent with standards established by the FCC" (H.R. Rep. 98-934, supra, at 70). C. The Commission's Regulations Reasonably And Properly Implement the Federal Statutory Purposes Congress stated that one of its purposes in enacting the Cable Act was to "promote competition in cable communications and minimize unnecessary regulation that would impose an undue economic burden on cable systems" (47 U.S.C. (Supp. III) 521(6)). And the FCC's broad mission is to make widely available an efficient "communication service with adequate facilities at reasonable charges" (47 U.S.C. 151). See Capital Cities, 467 U.S. at 708. In furtherance of those statutory policies and mandate, the FCC reasonably determined that it should set the outer limits on technical standards requirements for cable television signals. The Commission noted that the standards it established would ensure that every subscriber -- even those in the "worst subscriber location (Pet. App. 55 n.2) -- would receive an acceptable signal. On the other hand, the Commission observed that "(t)echnical standards that vary from community to community create potentially serious negative consequences for cable system operators and cable consumers in terms of cost of service and the ability of the industry to respond to technological changes" (id. at 66). The cost of monitoring and complying with "numerous different requirements is undeniably significant and there appear to be few if any countervailing benefits" (id. at 69). The Commission also gave weight to "the potential detrimental impact of such (diverse technical) standards on technological innovation in the industry" (id. at 69-70). And innovation in the cable industry is vital as "cable television systems operate in an increasingly competitive environment" (id. at 65). In sum, on the basis of its extensive experience in regulating cable television, the Commission concluded that its preemption policy, under which cable television had made significant advances, was as valid now as it had been when it was originally adopted in 1974 (Pet. App. 68). In particular, the Commission found that its policy would free the developers and manufacturers of equipment to plan and build for a nationwide market; consumers would thereby benefit from lower costs and cable systems that are more adaptable to advances in technology (id. at 66). The Commission's judgment as to how best serve the public interest is entitled to "substantial judicial deference." FCC v. WNCN Listeners Guide, 450 U.S. 582, 596 (1981). Its judgment here is a reasonable accommodation of the competing policies committed to its care. Petitioners may disagree with the FCC's decision and its assessment of the competing interests. It is clear, however, that the Commission's order setting an outer limit on the requirement of technical standards was not "arbitrary or capricious" (De La Cuesta, 458 U.S. at 141), was not precluded by Congress, and was adopted in furtherance of statutory policies whose implementation was committed by Congress to the Commission. CONCLUSION The judgment of the court of appeals, insofar as it is under review in this Court, should be affirmed. Respectfully submitted. CHARLES FRIED Solicitor General LAWRENCE G. WALLACE Deputy Solicitor General BRIAN J. MARTIN Assistant to the Solicitor General DIANE S. KILLORY General Counsel DANIEL M. ARMSTRONG Associate General Counsel JOHN E. INGLE Deputy Associate General Counsel LAUREL R. BERGOLD Counsel Federal Communications Commission MARCH 1988 /1/ The Commission early recognized that technical standards governing the quality of cable signals might have to be set, but it did not take immediate action in that area. See CATV (Notice of Inquiry and Proposed Rulemaking), 1 F.C.C.2d 453, 476 (1965). /2/ The Commission characterized this dual regulatory scheme as an accommodation of its responsibility "to assure the orderly development of this new technology into the national communications structure" with the local interest in regulating the use of community streets and rights of way. Duplicative and Excessive Over-Regulation of Cable Television, 54 F.C.C.2d 855, 861, 863 (1975). /3/ The Commission adopted a waiver procedure to permit showings in particular cases that more stringent technical standards were necessary (49 F.C.C.2d at 477-478). /4/ The Commission further found that disparate local technical standards might well deter technological innovation. The Commission stated that "(t)he obstacles that would be created to such innovation were it necessary to win the approval of numerous franchise authorities before use was possible would be most formidable, even if local authorities were equipped to respond to the sophisticated technical issues involved" (Pet. App. 71). /5/ As a practical matter, the FCC's technical standards for Class I channels may apply to all classes because all cable transmissions are carried over essentially the same equipment. On remand, therefore, the FCC may reach the same result after considering the court of appeals' concern. Nevertheless, at this time, the only matter before the Court is the FCC's current regulation concerning Class I channels. /6/ This Court has, of course, repeatedly held that "a federal agency acting within the scope of its congressionally delegated authority may pre-empt state regulation." Louisiana Public Service Comm'n v. FCC, 476 U.S. 355, 369 (1986). See Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 699 (1984); Fidelity Federal Savings & Loan Ass'n v. De La Cuesta, 458 U.S. 141, 153 (1982); United States v. Shimer, 367 U.S. 374, 383 (1961). Here, the FCC's regulations do not preempt all local authority to enforce technical standards regarding signal quality; local franchising authorities simply must work within the limits set by the FCC's standards. /7/ Contrary to petitioners' suggestion (Br. 25-27), the Commission did not use policy arguments to stretch its authority beyond congressionally sanctioned limits. The Commission set forth its policy determinations to explain the reasons for its exercise of discretion, not to justify its power to act. See Pet. App. 72-74. /8/ Higher standards, of course, may voluntarily be used by cable operators, but local authorities are forbidden to require them. /9/ Petitioners apparently prefer more stringent standards. Petitioners, however, did not challenge the standards as such in the court of appeals. In any event, this disagreement with the standards chosen by the Commission does not detract from the fact that the Commission was carrying out its mandate to set technical standards when it prescribed a level that local authorities may not require to be exceeded. /10/ Petitioners contend (Br. 20-22) that the Commission's rule is inconsistent with Section 626(c)(1)(B) of the Cable Act, 47 U.S.C. (Supp. III) 546(c)(1)(B), which provides that franchising authorities may consider, among other things, a cable operator's "signal quality" when deciding whether to renew a franchise. Plainly, however, there is no conflict. Local franchising authorities can fulfill their duty by evaluating signal quality under the published federal standards, which the Commission has found will ensure that every cable subscriber will receive an acceptable quality of service (Pet. App. 54-55). /11/ In our brief in opposition to the petition for a writ of certiorari, we noted (Br. in Opp. 16) that several provisions of the Cable Act (e.g., 47 U.S.C. (Supp. III) 524(i), 543(a), 544(f)(1)) bar the Commission from adopting certain regulations even though the Cable Act does not otherwise expressly grant the Commission the authority to take those actions. It appears, therefore, that Congress may well have intended for the Commission to retain its broad authority under the Communications Act "to regulate the signals carried by cable television systems" in the absence of an express limitation (Capital Cities, 467 U.S. at 699). The Court need not address this question, however, because Section 624(e) of the Cable Act expressly gives the Commission the authority to set technical standards -- including the acceptable range of those standards -- that local authorities may require in their franchises. /12/ In the interim, this Court affirmed the FCC's sweeping preemption authority in Capital Cities. /13/ Congress's distinction between "technical standards" and "requirements for facilities and equipment" is also evident in the House Committee Report statement that the FCC may "set technical standards related to facilities and equipment required by a franchising authority pursuant to a franchise agreement" (H.R. Rep. 98-934, supra, at 70). /14/ Perhaps petitioners view this language merely as evidence that Congress (as distinguished from the FCC) did not itself preempt local authority to set technical standards more stringent than those established by the FCC. If that is petitioners' argument (see Br. 18-19), it is beside the point. As we have stated, the question is not whether Congress required the FCC to adopt its regulation preempting local authority to set more stringent technical standards; the question is whether Congress precluded the Commission from utilizing that means of performing its delegated task of prescribing technical standards. /15/ As petitioners note (Br. 18-19), this is the type of legal rule that Congress elected to incorporate in certain other provisions of the Cable Act. That Congress did so in those provisions and not here, however, serves more to undermine than to support petitioners' argument. /16/ The FCC's regulation is therefore analogous to federal statutes prohibiting more stringent state and local regulation (see, e.g., 21 U.S.C. 678; 15 U.S.C. 1392(d)). Any requirement of state law in those areas (e.g., motor vehicle safety standards) that exceeds federal standards is inconsistent with the federal statute and thus preempted.