FOR THE
Filed
No. 00-1222
Fox Television
Stations, Inc.,
Petitioner
v.
Federal
Communications Commission and
Respondents
National Association
of Broadcasters, et al.,
Intervenors
Consolidated with
00-1263, 00-1326,
00-1359, 00-1381, 01-1136
On Respondents' and
Intervenors' Petitions for Rehearing
---------
Before Ginsburg,
Chief Judge, and Edwards and Sentelle, Circuit Judges.
Opinion for the
court filed by Chief Judge Ginsburg.
Ginsburg, Chief
Judge: The Federal Communications Commission
and two intervenors, the National Association of Broadcasters and the Network
Affiliated Stations Alliance, separately petition for rehearing of the court's
decision in this case. See Fox
Television Stations, Inc. v. FCC, 280 F.3d 1027 (D.C. Cir. 2002). For the reasons that follow, we grant in part
the Commission's petition, modify the opinion accordingly, and deny the
intervenors' petition.
I. The Meaning of
"Necessary" in Section 202(h)
The Commission
argues that "the decision should be modified to reject the argument
advanced by Time Warner that Section 202(h) [of the Telecommunications Act of
1996, Pub. L. No. 104-104, 110 Stat. 56]*
requires the Commission to apply a higher standard than 'continues to serve the
public interest' in considering whether to retain rules covered by that
provision." In the alternative, the
Commission urges the court to delete a single paragraph of the opinion and
thereby to leave "to another day when it is likely that the Commission
will have addressed the question and all parties will have briefed the
issue" whether "necessary" in § 202(h) means
"indispensable" or merely "useful." The paragraph at issue reads as follows:
Next, Time Warner
argues that the Commission applied too lenient a standard when it concluded
only that the CBCO Rule "continues to serve the public interest,"
1998 Report p 102, and not that it was "necessary" in the public
interest. Again the Commission is
silent, but this time we agree with Time Warner; the Commission appears to have applied too
low a standard. The statute is clear
that a regulation should be retained only insofar as it is necessary in, not
merely consonant with, the public interest.
Fox Television Stations, 280 F.3d at 1050. The intervenors, like the Commission, ask the
court to reject Time Warner's argument that "necessary in the public
interest" means more than "in the public interest." They do not, however, join in the
Commission's alternative request that the court merely delete the subject
paragraph.
In support of its
petition, the Commission notes that the court's discussion of the meaning of
"necessary in the public interest" was not essential to our decision
to remand the NTSO Rule and to vacate the CBCO Rule. Further, the Commission points out that the
argument raised by Time Warner was not fully briefed by the parties. Finally, the Commission argues that the court
erred insofar as it construed § 202(h) to impose a standard of true necessity
rather than mere utility. In this vein
the Commission presents three arguments, in which the intervenors join, for
reading "necessary in the public interest" to mean the same thing as
"in the public interest."
The Commission
first points out that the word "necessary" appears in sections 4(i),
201(b), and 303(r) of the Communications Act -- which sections authorize the
Commission to promulgate regulations when necessary -- and the Supreme Court
and this court have interpreted "necessary" in those sections to mean
useful rather than indispensable. See
Nat'l Broad.
The petitioners,
in opposition to rehearing, contend that the court correctly interpreted
"necessary in the public interest" to mean more than "in the
public interest." They argue that
doing so gives "necessary" the same meaning it has in other
provisions of the 1996 Act, see, e.g., GTE Service Corp. v. FCC, 205 F.3d 416
(D.C. Cir. 2000) (interpreting "necessary" in § 251(c)(6) --
"collocation of equipment necessary for interconnection" -- to mean
"indispensable"), whereas the Commission improperly relies upon provisions
that were part of the original Communications Act of 1934, the purpose of which
was to institute regulation rather than deregulation. The petitioners also argue that interpreting
"necessary" to mean merely "useful" would render § 202(h)
"a virtual nullity" and that it makes sense to apply a lower standard
to the Commission's necessarily predictive decision to promulgate a rule than
to its decision to retain the rule in the light of experience. Finally, the petitioners argue that
"because the arguments [the Commission] now make[s] were never raised
before, the court must decline to reopen the matter." The petitioners make no retort, however, to
the Commission's assertion that interpreting "necessary in the public
interest" to mean something more than "in the public interest"
was not essential to the court's decision.
We agree with the
Commission that the subject paragraph is itself not necessary to the opinion
and should be modified. The court's
decision did not turn at all upon interpreting "necessary in the public
interest" to mean more than "in the public interest": It was clear the Commission failed to justify
the NTSO and the CBCO Rules under either standard. Moreover, as the Commission points out, the
question was not fully briefed by the parties.
Among the petitioners, only Time Warner raised the argument, and then in
only one sentence; the Commission and
intervenors failed to address Time Warner's one sentence; and the petitioners in reply did not make
anything of the Commission's and the intervenors' omission. In these circumstances we think it better to
leave unresolved precisely what § 202(h) means when it instructs the Commission
first to determine whether a rule is "necessary in the public
interest" but then to "repeal or modify" the rule if it is
simply "no longer in the public interest." Thus, we decline the Commission's and the
intervenors' request that we interpret "necessary" in their favor at
this time, and we accept the Commission's alternative invitation to modify the
opinion in order to leave this question open.
As for the
petitioners' observation that this court ordinarily deems an argument raised
for the first time in a petition for rehearing to have been waived, see, e.g.,
Keating v. FERC, 927 F.2d 616, 625 (1991), our practice is in fact more
practical than rigid. Thus, in Benavides
v. DEA, 976 F.2d 751 (D.C. Cir. 1992), where the Government had failed to
advance an argument against the statutory interpretation adopted by the court
until it filed a petition for rehearing, we granted rehearing and held that we
need not decide between the competing statutory interpretations.
II. The NTSO Rule and
the CBCO Remedy
The intervenors
argue that the court erred in failing to defer to the decision of the Congress
to set the initial nationwide ownership cap at 35%. The panel already considered and rejected
this argument: "Section 202(h)
itself requires the Commission to determine whether its ownership rules --
specifically including 'rules adopted pursuant to this section,' such as the
present NTSO Rule -- are necessary in the public interest." Fox Television Stations, 280 F.3d at 1043
(emphasis added). Nothing in § 202(h) or
in § 202(C)(1)(B) -- in which the Congress instructed the Commission
immediately to "increase[ ] the national audience reach limitation for
television stations to 35 percent"--indicates that the Congress wanted the
Commission later to review the NTSO Rule under a more deferential standard than
any other broadcast ownership rule subject to biennial reconsideration. Had the Congress wished to insulate the NTSO
Rule from review under § 202(h), it need only have enshrined the 35% cap in the
statute itself.
Finally, the
intervenors contend that the "the panel's decision to vacate, rather than
remand, the CBCO Rule is at odds with this Court's precedent." The intervenors do not question the court's
decision to apply the Allied-Signal test.
Rather, they argue that the court misapplied the test because
"there is no basis for the Court to conclude that the Commission cannot
possibly address [the petitioners'] objections [to the CBCO Rule] on
remand." The intervenors note that
under the Commission's view of § 202(h) it did not have to defend the CBCO Rule
in the 1998 Report, but the intervenors fail to advance any interpretation of §
202(h), let alone a reasonable interpretation, under which the Commission could
determine that the Rule was "necessary in the public interest"
without somehow defending the Rule. The
intervenors also argue that the Commission counsel failed fully to defend the
CBCO Rule in their brief to the court because they knew the court could not
uphold the decision to retain the Rule on the basis of counsel's post hoc
rationalization. That the court could
not have upheld the 1998 Report on a ground not contained therein, however,
does not mean counsel was precluded from defending the Rule against
vacatur. A defense of the Rule, if it
was defensible, clearly would have been cognizable with respect to the choice
between vacatur and remand.
Consequently, as before, see Fox Television Stations, 280 F.3d at
1052-53, we infer that the Commission's failure to defend the CBCO Rule
indicates its inability to do so. The
Commission's failure to join the intervenors in their present challenge to our
vacatur of the CBCO Rule only reinforces this belief.
Consequently, we
grant in part the Commission's petition for rehearing, deny the intervenors'
petition, and amend the first full paragraph on page 1050 of the opinion to
read:
Next, Time Warner
argues that the Commission applied too lenient a standard when it concluded
only that the CBCO Rule "continues to serve the public interest,"
1998 Report p 102, and not that it was "necessary" in the public
interest. Again the Commission is silent,
but nonetheless we do not reach the merits of Time Warner's argument. This important question was barely raised by
the petitioners and was not addressed at all by the Commission or the
intervenors. Even if "necessary in
the public interest" means simply "continues to serve the public
interest," for the reasons given above and below, the Commission's
decision not to repeal or to modify the NTSO and the CBCO Rules cannot stand.
In the margin we also make two minor modifications to
conform the opinion to the change above.**
So ordered.
* Section 202(h) provides:
The Commission shall review its rules adopted pursuant to this section and all of its ownership rules biennially as part of its regulatory reform review under section 11 of the Communications Act of 1934 and shall determine whether any of such rules are necessary in the public interest as the result of competition. The Commission shall repeal or modify any regulation it determines to be no longer in the public interest.
* Page 1042/2, line 42: Change "that is not 'necessary in the public interest.' " to "that is 'no longer in the public interest.' " Page 1048/1, lines 14-15: Change "is" to "remains" and delete "necessary".