COMMUNITY ANTENNA TELEVISION, THE
BROADCASTER ESTABLISHMENT, AND
THE FEDERAL REGULATOR
John P. Cole, Jr.*
THE DRAMATIC impression created by the community antenna television industry in recent years is perhaps the most interesting phenomenon to take place in mass-media communications since the advent of
television broadcasting. As a dynamic, new entry into a well-established
and vastly influential industry, community antenna entrepreneurs are
beset with old, new, and still-to-be-solved, or even yet-to-be devised,
problems, most of which have a decided legal flavor. From the point of
view of the lawyer, the most interesting development in this young industry's struggle to prominence is the ever increasing influence and role
played by the federal government directly in the affairs of community
antenna operation.
In the electronics mass-media communications industry, the word
"competition" has long been a profanity of evil proportions to the established "landed gentry." Even before the Supreme Court so clearly
reaffirmed the principle that the business of radio broadcasting is to be
conducted in a "free-enterprise" competitive environment, broadcasters,
government regulators, and the courts, with accomplished consistency,
have worked together, sometimes unwittingly, to devise novel and oftentimes ingenious schemes, systems, and regulatory theories, the basic
effects of which have been to thwart genuine, free competition.'
The legal history of commercial broadcasting is written literally in
competitive controversy-the "ins" or "haves" versus the "outs" and
"have nots." Today, as has been generally the case, the substantial
majority of the hearing cases and other proceedings before the Federal
Communications Commission (FCC) involve basically the single issue
of whether the entrenched will be encroached upon by additional stations or services in the market in question. "Preservation of the status
quo" and "don't give up without a hearing" are the watchwords for any
self-respecting broadcaster as well as for his Washington communications
counsel. Ingeniously, and many times with great persuasiveness, the established "ins" are able to relate the preservation and promotion of
their own economic welfare directly to the government regulator's pro* Member of the bar of the District of Columbia and the bars of the States of Maryland
and Georgia.
1. Federal Communications Commission v. Sanders Bros. Radio Station, 309 U.S. 470
(1940).
1965]
COMMUNITY ANTENNA TELEVISION
tection of the public interest, while, at the same time, depicting the
potential competitor, seeking to get into business, as a decided threat
to our American way of life. While the formal issues can often be
disguised and thus concealed from the uninitiated, the fundamental interests of the private participants are almost always clear. Even where
the hearing proceeding is ultimately lost, the effects of the added competition are deferred for at least several years, which in and of itself
often constitutes a victory of substantial proportion. It is not unrealistic
to say that the FCC in its regulatory activity over this affluent segment
of our "free-enterprise" economy is largely preoccupied with competitive
problems and considerations. The royalty and true elite of this power
Establishment are those holders of VHF television broadcast station
2
licenses.
The community antenna television industry is today, as it has been
for sometime now, engaged in a confrontation with the blue-bloods of
broadcasting. The verdict has not yet been rendered, nor is the precise
outcome predictably certain at this stage of the conflict. One thing does
seem certain: community antenna television, in one form or another,
is here to stay. Not the least of the significant contributing factors to
this conclusion is the substantial mutiny taking place in the ranks of
of the broadcasting Establishment among those more adventurous
licensees who apparently cannot resist the lure of this interesting and attractive new industry-CATV. 3
There are today approximately 1,620 community antenna television
systems operating in some 1,600 towns and cities in the United States
enhancing the television reception of an estimated 5,280,000 viewers. 4
Some 1,600,000 homes are today dependent upon commercially operated
CATV systems for all or a principal portion of their television viewing
fare; and this number is increasing by leaps and bounds. CATV systems are now operated in forty-eight of the fifty states and the Virgin
Islands-the exceptions are Alaska and Rhode Island.
Community antenna systems were spawned in the mountainous regions
of the State of Pennsylvania to meet the public's demand for television
broadcast reception. The first commercially successful cable television
system commenced operation in 1950 in Lansford, Pennsylvania. Soon,
2. VHF or Very High Frequency are those television channels assigned to operate on
frequencies designated as channel numbers 2 through 13 on standard receiver sets. Channels
numbered 14 through 83 are designated as UHF or Ultra High Frequency.
3. "CATV" is an industry term used interchangeably with community antenna television.
4. The statistics relied upon are the most current industry figures, as of February, 1965,
furnished by the National Community Television Association, a national trade association in
Washington, D.C. representing a substantial number of CATV systems in the United States.
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
thereafter, similar CATV systems began to spring up in many communities around the nation in patterns directly related to the establishment
of nearby television broadcasting stations. Available television broadcast
signals were and are necessary prerequisites to the operation of a community antenna system.
Revenues are obtained by community antenna entrepreneurs through
charging a fee to those persons connecting their television receiver sets
to the master-antenna cable. It is estimated today that the total investment in community antenna systems is in excess of $700,000,000.00,
and that it produces a gross annual revenue of approximately
$100,000,000.00.
A community antenna television system is precisely as the name implies: It is a master television receiving antenna specially designed and
utilized to receive television signals transmitted by television broadcast
stations for simultaneous distribution over closed-circuit wire or cable
facilities and eventual reception and viewing on the home television receiving sets of those persons subscribing to the antenna service. A community antenna television system is a "mere adjunct of the television
receiving sets" with which it is connected, furnishing "an attachment to
a television receiving set which enables a set disadvantageously located
to operate like an ordinary set.' 5 All television receiver sets are equipped
with reception antennas of varying complexity and technical sophistication; the CATV system master-antenna is, of course, of the most expensive and sophisticated variety.
Operationally, a community antenna system comprehends the erection
of one or more off-the-air receiving antenna installations-usually a tall
tower upon which television signal receiving antennas are mounted-in
locations the selection of which is governed largely by the proximity of
the town in which the CATV system is to be operated; and the availability of sufficient strength signal or signals from the TV broadcast
station or stations whose signals are intended to be received for
distribution over the antenna cable; and the installation of a lengthy
closed-circuit cable complex over which the received television signals
are delivered from the master reception antennas to the homes of the
individual house subscribers. Series of electronic amplifiers are employed
to maintain the consistent quality of the received TV signal as it is placed
on and conveyed throughout the antenna cable. Functionally, a CATV
system is similar to the operation of television master-antenna systems
found in many apartment-type houses today.
5. Lilly v. United States, 238 F.2d 584, 587-88 (4th Cir. 1956).
1965]
COMMUNITY ANTENNA TELEVISION
In the most favorable circumstances, the off-the-air receiving antenna
installation can be erected in, or in very close proximity to, the community in which the CATV service is to be conducted. In other situations,
it becomes necessary to install the reception antennas at points situated
many miles from the base of CATV operation. Where reception antennas
are installed more than several miles from the town in which the cable
service is to be provided, there develops then the technical problem of
how best to convey the received TV signal from the off-the-air pickup
site to the service area and the homes of those utilizing the antenna service. Lengthy closed-circuit cable runs sometimes provide a solution. In
most cases, however, where the distance to be traversed exceeds several
miles, the best, and oftentimes the only economically practical or technically feasible, solution lies in the use of point-to-point radio microwave
relay facilities.' Approximately twenty per cent of those CATV systems
now in operation rely to some extent upon microwave relays as the means
of conveying received television signals from the point of the off-the-air
reception to the community in which the antenna business is conducted.
Use of radio microwave, in many instances, is necessary to the expansion
of an operating CATV system's services, and, in other cases, becomes an
essential element for development of new, commercially feasible cable
television systems.
Most CATV systems being constructed today have a capacity of receiving simultaneously at least twelve television signals. Thus, where
the CATV system operator desires to furnish a maximum-capacity antenna service permitting subscribers the widest possible variety of program choice, it frequently is mandatory to rely, at least to some extent,
upon use of microwave relay systems since it often becomes necessary
to establish the master receiving antennas at substantial distances from
the base of operation.
While the community antenna industry is virtually as old as television
broadcasting itself, it only recently has achieved a significant position
on the national communications scene and corresponding prominence and
attention at the levels of higher government. There are many reasons
contributing to the recent surge of publicity and correlative attention
upon the CATV industry, some of which are: the introduction of new
community antenna systems into an increasing number of towns, in6. Communication by means of point-to-point radio microwave involves the transmission.
of energy (waves) utilizing low power and highly directionalized antennas from fixed transmitting stations to fixed receiving stations over a transmission path providing an uninterrupted line of sight between the two. Such communication circuits employ radio in lieu of
wire or cable for direct communication between two fixed points.
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
cluding the very largest metropolitan areas of the nation;' increasing
recognition of the business in the most substantial financial and investment banking houses of the nation; the continuing and oftentimes emotional controversy over "PAY" versus "FREE" TV; and allegations
that community television systems are a retardive, and even destructive,
force in opposition to the growth of television broadcast stations. These
are but a few of the more obvious reasons serving to confer attention
on CATV operation.
Considerable mystery and confusion still shroud the CATV industry.
While some of this mystery stems naturally from the public's usual lack
of familiarity with a new business, which is compounded by the technically complex nature of television operation, the CATV industry appears to have fostered already a considerable collection of foreboding
folklore much of which must be attributed directly to those private interests who look upon this rising new industry as a dire, competitive threat
to their economic welfare and, they urge, to the well-being and security
of the people as a whole.
Pay-television is not synonymous with community antenna television.
Pay-TV involves the purchase of a right to view a particular program on
the subscriber's TV set on a selective, pay-as-you-view basis, i.e., the
subscriber selects and pays individually only for those programs which
it views on the home TV set. Community antenna television, on the other
hand, involves the payment of a periodic fee-usually monthly-for the
right to attach the subscriber's home TV receiving set to the antenna
cable which then enables the subscriber to tune in at will any program
available over the CATV facility. The one involves the purchase of a
particular program feature while the other involves merely the payment
of a fee for the right to be connected to the master-antenna to receive
whatever programs are broadcast and available for reception thereon;
one is a program service while the other is an antenna service. This is
not to say, however, that the CATV industry does not possess a potential
to develop the nucleus for a future system of wired pay-TV. But there
are technical and other obstacles still to be overcome if this potential is
to be developed.
Television broadcasting stations operate for the purpose of disseminating program intelligence for reception to the public., A community
antenna television system does nothing more than assist or improve the
public's ability to receive those programs which are originally dissemi7. Proposals to construct and operate CATV systems now pend before cities such as New
York, Cleveland, Philadelphia, and the entire State of Connecticut.
8. Communications Act of 1934, as amended, 48 Stat. 1064, 47 U.S.C. § 153(o) (1958).
COMMUNITY ANTENNA TELEVISION
nated by the TV broadcast station for purposes for reception by the
public; and, to this extent, the community antenna facilities are clearly
an aid in the implementation of the basic purpose of broadcasting.
Initiation of a community antenna system business begins generally
by the seeking of a franchise, license, permit, or other enabling authorization at the local-government level. The very nature of closed-circuit
community antenna systems and the necessity to string lengthy runs of
connected cables and wires over through streets, alleys, and other public thoroughfares, unlike most other commercial endeavors, requires the
consent of the local governing authority for the orderly conduct of the
business. Applications to local authority, and the processing thereof, for
such CATV operating permits vary substantially from state to state and
even from municipality to municipality within the same state. It is not
the purpose here to treat this aspect of CATV operation except to observe that this essential phase has become a spirited and highly competitive procedure.
A further necessary step in the implementation of a community antenna service is obtaining a means of installing the required cable-wire
facilities throughout the area intended to be served. The practice normally
followed here is to lease attachment space on existing utility poles in
the community upon which the antenna cable can be installed In essence, this involves reaching a mutually satisfactory agreement with the
owner of the poles-usually the local telephone or electric power company, and sometimes both. Depending upon the attitudes of the owner
of the utility poles in question, this step can constitute, in the worst circumstances, a substantial obstacle to initiation of a community antenna
service."0 Again, however, it is not the purpose of this article to treat
the myriad of legal and other considerations, often raised at this stage
of CATV proposals, according to the circumstances peculiar to each case.
As initially stated, the CATV industry is beset with a variety of problem areas. The five major legal ones are:
(1) the issue of federal jurisdiction;
(2) the issue of whether community antenna reception and distribution of television signals constitutes civil infringement upon the
9. The practice of installing a separate, duplicating system of poles for CATV use while
followed in a few instances is generally frowned upon for a number of reasons by both the
municipalities and the CATV operators involved.
10. Some Bell System Telephone Companies are currently offering to construct and lease a
basic community antenna system operation to CATV entrepreneurs pursuant to published
tariffs; e.g. "Channels For Television Transmission For Use In Community Antenna Television Systems" filed with the State of North Carolina by Southern Bell Telephone and
Telegraph Company.
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
rights of those persons holding statutory copyrights in the broadcast material received over the master-antenna; 11
(3) the question of whether certain public-utility regulatory concepts
should be imposed upon CATV operations;' 2
(4) the potential proliferation of the countryside with high-power
television translator stations and other television broadcast repeater devices; 3 and
(5) the generally unfavorable reception which the CATV industry
encounters within the Federal Communications Commission.
Discussion of all of these problems in a single undertaking would
burden both the reader and the author. This article will give consideration
primarily to the present legal posture of community antenna television
only in its more direct relationships to the federal government, particularly the Federal Communications Commission; and, secondly, to embark
upon the somewhat precarious activity of evolving a prognosis of what
the future reasonably holds in this most significant respect. For while
still comprising a relatively small segment of the mass-media communications complex, community antenna television has already become a
significant factor in the overall television picture; and, if recent growth
be a valid indicator, it seems destined to increase the significance of its
role. For this reason, if for no other, the influence and pressures of the
federal government, already present, will be increasingly felt in the affairs of community antenna enterpreneurs. The direction, extent, and
effects of this influence are the critical issues for the CATV industry
today.
THE PRESENT ROLE OF THE FEDERAL GOVERNMENT
The Federal Communications Commission (FCC) was created by act
of Congress in 1934.14 The stated purpose of the new agency was, inter
11. The issue of copyright infringement under Title 17 of the U.S. Code is currently at bar
in two cases before the United States District Court for the Southern District of New York:
United Artists Associated, Inc. v. Fortnightly Corporation, Civil No. 60-2583, initiated in
1960; and Columbia Broadcasting System, Inc., et al. v. TelePrompTer Corporation, Civil
No. 64-3814, initiated in December, 1964. The question of whether CATV operation is
violative of property rights other than those conferred under federal copyright laws was
disposed of in favor of the CATV operator in Cable Vision, Inc. v. KUTV, Inc., 335 F.2d 348
(9th Cir., 1964); cert. denied sub nor. KLIX Corporation v. Cable Vision, 33 U.S.L. Week
3252 (U.S. Jan. 25, 1965).
12. E.g., proceedings before Public Utilities Commission of the State of Connecticut, Applications for Franchises to Conduct a CATV Business.
13. A television translator station is a "station in the broadcasting service operated for the
purpose of retransmitting the signals of a television broadcast station or another television
broadcast translator station by means of direct frequency conversion and amplification of the
incoming signal other than its frequency and amplitude, for the purpose of providing television reception to the general public." Part 74, § 701 of the FCC Rules and Regulations, 47
C.F.R. § 74.701 (1964).
14. Communications Act of 1934. Being an Act to provide for the regulation of interstate
1965]
COMMUNITY ANTENNA TELEVISION
alia, to regulate "interstate and foreign commerce in communication by
wire and radio so as 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 with adequate facilities at reasonable
charges."'Ir The use of radio for purposes of "commercial broadcasting"
was strangely omitted from the stated "Purposes of Act" in the enabling
clauses of this legislation; but all are agreed that broadcasting considerations have dominated the activities and energies of this regulatory commission.
The early conceptions of this agency's statutory jurisdiction and powers
were thought, by many, to be quite limited, particularly in the area of
the regulation of the commercial aspects of the radio broadcasting industry.'" Without significant alteration of the original legislation of 1934,
the powers, activities, and sphere of influence of this federal regulatory
agency have, nevertheless, increased many fold over the past thirty years.
Operating principally under its broad and sometimes disturbingly vague
mandate to regulate in the "public interest, convenience and necessity,"
the influence and authority of the FCC extend now to virtually every
facet of the business of broadcasting.Y7 Due to the very nature of "radio
communication" and its innate complexity the FCC, relying largely
upon its "expertise" and dealing chiefly in highly technical areas and
industry jargon not generally familiar in many instances even to the
Congress and the courts, has been permitted to proceed on its way with
relatively little intervention of effective control upon its authority.
Since 1958, the FCC has frequently and consistently held that it does
not have regulatory jurisdiction over the operation of community antenna
television systems. 8 This determination of a want of jurisdiction is based
principally upon recognition of the distinguishing fact that the community
television master-antenna activity is a reception function utilizing closedcircuit wirelines, as opposed to a jurisdictional broadcasting or "radio"
activity, and thus falls without the scope of the Communications Act.
The FCC, acknowledging its lack of jurisdiction, has formally deterand foreign communication by wire or radio, and for other purposes. 48 Stat. 1064, 47 U.S.C.
§§ 151 (1958), (Enacted June 19, 1934.)
15. Section 1 of the Communications Act of 1934, as amended, 48 Stat. 1064, 47 U.S.C.
§ 151 (1958).
16. See Herring and Gross, Telecommunications (1936), a comprehensive treatise on the
early history of federal regulation of broadcasting, cited as authoritative in National Broadcasting Company v. United States, 319 U.S. 190, 210 (1943).
17. 47 U.S.C. §§ 214(a), 307(a) and 309(a) (1958).
18. Frontier Broadcasting Company v. Collier, 24 FCC 251, 16 Pike & Fischer R.R.
1005 (1958); CATV and TV Repeater Services, 26 FCC 403, 18 Pike & Fischer R.R. 1573
(1959); WSTV, Inc. v. Fortnightly Corp., 23 Pike & Fischer R.R. 184 (1962). The FCC is
even now in the process of again deciding this jurisdictional issue. See Broadcasting, Mar. 8,
1965, pp. 27-32.
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
mined, however, that legislation conferring it with certain limited authority over community antennas would be advisable; and, accordingly,
the agency's want of jurisdiction was first brought to the attention of the
86th Congress along with certain legislative recommendations of the
Commission. 9
Lengthy hearings through the summer and fall of 1959 were held by a
sub-committee of the Senate Committee on Interstate and Foreign Commerce on the legislation proposed by the FCC.2" The full Senate Interstate and Foreign Commerce Committee then favorably reported a bill
granting the Commission jurisdiction to regulate community antenna
systems in certain particularized circumstances. 2 1 After several days of
debate on this bill, the Senate recommitted the proposed legislation to
the Committee and no legislation authorizing FCC regulation of community antenna systems was enacted by the 86th Congress.22 Again, in
1961, the FCC submitted to the 87th Congress proposed legislation giving
it jurisdiction to regulate community antennas.23 The 87th Congress
similarly failed to enact any legislation conferring the Commission with
jurisdiction over the community antenna industry.
This partial chronology of Congressional and FCC actions upon the
question of jurisdiction over the CATV industry is significant because
it is well settled that the construction given to a statute by the agency
charged with its execution and administration is entitled to substantial
weight by the courts. 4 The weight afforded to administrative construction
becomes even greater, however, when the Congress becomes aware of
and acquiesces in the construction of the statute as interpreted by the
administrative agency.3 Where an administrative determination is brought
to the attention of the Congress, and the Congress deals with the statute
underlying the determination, but does not overturn the determination, it
is considered as a matter of statutory construction that the Congress
2
approves of the administrative determination.
19. 105 Cong. Rec. 6753 (1959).
20. Hearings before the Communications Sub-Committee of the Committee on Interstate
and Foreign Commerce, United States Senate, 86th Cong. 1st Sess. (1959), on VHF Booster
and Community Antenna Legislation. Prior hearings before this same Committee during the
Summer of 1958 had also been held. See Hearings Before the Committee on Interstate and
Foreign Commerce of the United States Senate, 85th Congress, 2d Sess., Television Inquiry
(1958).
21. S. Rep. No. 923, 86th Cong., 1st Sess. (1959).
22. 106 Cong. Rec. 10520, 10547 (1960).
23. 107 Cong. Rec. 2523 (1961) ; S. 1044 and HR 6864, 87th Cong., 1st Sess. (1961).
24. Hanover Bank, Ex. v. C.I.R., 369 U.S. 672, 686-87 (1962).
25. United States v. Leslie Salt Co., 350 U.S. 382, 396-97 (1956); Norwegian Nitrogen Co.,
v. United States, 288 U.S. 294, 315 (1933); Luckenback Steamship Co. v. United States, 280
U.S. 173, 182 (1930).
26. Cammarano v. United States, 358 U.S. 498 (1959); Corn Products Refining Co. v.
C.I.R., 350 U.S. 46, 52-53 (1955).
COMMUNITY ANTENNA TELEVISION
The Congress, therefore, is well aware of the decisions by the FCC
as to its want of jurisdiction to regulate the operation of community antenna systems. Similarly, the Congress has had ample opportunity to
enact legislation conferring such jurisdiction, but has declined to do so.
The conclusion is inescapable that the Congress, at least to date, acquiesces in and approves of FCC decisions holding that it lacks authority to
regulate community antenna systems.
The foregoing, uniquely, is not to say that the FCC does not presently
exercise a strong and increasingly comprehensive influence and authority
over the community antenna industry. While acknowledging its lack of
jurisdiction, the FCC manifests a very substantial day-to-day interest in
community antenna operation, and presently employs its administrative
powers to "regulate" the community antenna industry in an indirect, but
relatively effective and comprehensive, manner. Such indirect regulation
is achieved principally through the FCC's broad authority over all uses
7
of radio frequencies.1
Notwithstanding the fact that in 1959 the FCC determined after an
exhaustive inquiry proceeding that "it would not constitute a legally valid
exercise of regulatory jurisdiction" to deny microwave service to CATV
systems on the grounds that use of such facilities would prove harmful
to existing or future television stations, the FCC does today deny microwave use to CATV's unless the CATV operator will agree to "protect"
the economic well-being of the local station. Any CATV system depending
upon or employing the use of radio frequencies in the conduct of its business, whether it be by direct licensing by the Commission to the community antenna operator or through utilization of private-circuit radio facilities furnished by a communication common carrier, is now as a practical
consideration subject in a substantial manner to the regulatory jurisdiction of the FCC.2" As already discussed, radio microwave relay circuits
provide in many instances the only practicable or economically feasible
means of conveying the received video programming over distances of
more than several miles. Employment of radio microwave relay facilities
is often an essential element for expansion of the services rendered over
an existing community antenna system, and in many other situations
microwave circuits are an absolute necessity in initiation of new commu27. Section 308(a) of the Communications Act confers exclusive authority upon the Federal
Communications Commission to issue license authorizations for operation of radio transmitting devices. 48 Stat. 1064 (1934), 47 U.S.C. § 308(a) (1958).
28. License authorizations to CATV operators for private use of microwave radio frequencies are issued in the Industrial-Business Radio Service pursuant to Part 91, § 551 of the
FCC Rules, 47 C.F.R. §§ 91.551-.555 (1964); authorizations to common carriers for service
to CATV systems are issued in the Common Carrier Radio Service under Part 21, § 700
of the Rules, 47 C.F.R. §§ 700-09 (1964).
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
nity antenna systems. Dependence upon the use of microwave circuits
by entrepreneurs in CATV is on the increase.
Recognizing and taking full advantage of the CATV industry's dependence upon the use of microwave relay circuits the FCC has utilized
its jurisdiction over authorization of microwave radio stations to maintain
a grip over the community antenna industry; and, in this manner, the
agency has been particularly effective in maintaining in large measure a
form of statu quo.
The interests, as well as the energies, of the FCC in community antenna operation have been directed primarily to two closely related areas
of major concern. Initially, the FCC evinced its concern with the so-called
competitive "economic impact" of community antenna systems upon
existing, small-market television broadcast stations operating under marginal financial circumstances. 9 This concern of the FCC soon extended
to all television stations regardless of the size of the market involved or
the prosperity of the licensee. The second problem area relates to the retardive or inhibiting effects, if any, which community antenna systems
may have upon the Commission's present television channel allocations
program with emphasis upon the establishment of future TV stations
in communities not yet served with a local television broadcast outlet.
In this regard, the FCC expresses concern that the presence of a healthy,
full-service community antenna system might well inhibit or even forever preclude the establishment in the same or near-by community of a
local television station, and thus frustrate the FCC's stated objective of
placing local television outlets in as many communities as possible. 0
With good reason, the FCC is peculiarly sensitive to criticism in the
area of television allocations. The agency's past mistakes in this critical
area of its regulatory responsibility are legion. The present imbalance
between operation in the VHF and UHF television bands is the direct
result of almost unbelievably poor judgment. Gallantly, however, the
FCC, faced with the fact that its television allocations plan has provided
a built-in protection against competition to licensees of VHF stations, is
striving to create an environment in which UHF stations can at least
hope to prosper, and even compete with previously authorized, and now
entrenched, VHF stations. Any suggestions that CATVs will hinder or
retard the growth or proliferation of new television stations and thus
compound these past errors of the agency are entertained with great
29. CATV and TV Repeater Service, 26 F.C.C. 403, 18 Pike & Fischer R. R. 184 (1959).
30. Sixth Report and Order of the Federal Communications Commission on Television
Allocations, 1 Pike & Fischer R. R. (Part Three), (1952). The reasonableness of achievement
of this stated objective is not commented upon.
1965]
COMMUNITY ANTENNA TELEVISION
trepidation. Recognizing the agency's sensitivity, many television broadcasters desirous of maintaining or improving their own economic status
have been quick to make such suggestions and thus ride this current of
emotion to curtail and restrict competition from CATV systems seeking
to use microwave in their operations.
The major attention of the FCC to the community antenna industry,
therefore, has been focused, as well as premised, upon the competitive
economic effects which CATV systems may have upon existing and future
television broadcast station operations. In this reference, the FCC has
already proceeded well beyond the point of promoting a healthy environment in which television stations may operate; it has adopted a regulatory concept, unique outside the area of public-utility regulation, that as
the agency charged with the regulation of the commercial broadcasting
industry, it is also entrusted with a correlative authority and duty to
accord artificial economic protection to those engaged in broadcasting
vis-a-vis those engaged in other commercial activities which might compete economically with broadcasters. Thus, where a community antenna
system operator determines that the use of radio microwave relay facilities would aid the conduct of his business, the operator must now
first satisfy the Commission that a certain amount of economic "protection against competition" will be afforded to any existing or future television station located within the vicinity of the community antenna
system31
In the celebrated landmark decision of the Supreme Court in the field
of communications Federal Communications Commission v. Sanders
Brothers Radio Station,3 2the Court made clear that the Communications
Act "recognizes that the field of broadcasting is one of free competition."
The Court said:
The sections dealing with broadcasting demonstrate that the Congress has
not, in its regulatory scheme, abandoned the principle of free competition,
as it has done in the case of railroads, in respect of which regulation involves
the suppression of wasteful practices due to competition, the regulation of
rates and charges, and other measures which are unnecessary if free competition is to be permitted.
But the Act does not essay to regulate the business of the [broadcast]
licensee. The Commission is given no supervisory control of the programs,
of business management or of policy. In short, the broadcasting field is open
to anyone, provided there be available frequency over which he can broadcast without interference to others, if he shows his competency, the ade31. Notices of proposed rule making, FCC Dockets 14895 and 15233, to be treated infra.
32. 309 U.S. 470 (1940).
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
quacy of his equipment,
and the financial ability to make good use of the
3
assigned channel
The Court then proceeded to say:
Plainly it is not the purpose of the Act to protect a licensee against competition but to protect the public. Congress intended to leave competition
in the business of broadcasting where it found it, to permit a licensee who
was not interfering electrically with other broadcasters to survive or succumb according to his ability to make his programs attractive to the public.
This is not to say that the question of competition between a proposed station and one operating under an existing license is to be entirely disregarded
by the Commission, and, indeed, the Commission's practice shows that it
does not disregard that question. It may have a vital and important bearing
upon the ability of the applicant adequately to serve his public; it may
indicate that both stations-the existing and the proposed-will go under, with the result that a portion of the listening public will be left without adequate service; it may indicate, by a division of the field, both stations will be compelled to render inadequate service. These matters, however, are distinct from the consideration that, if a license be granted, competition between the licensee and any other existing station may cause
economic loss to the latter. If such economic loss were a valid reason for
refusing a license this would mean that the Commission's function is to
grant a monopoly in the field of broadcasting, a result which the Act itself
expressly negatives, which Congress would not have contemplated without
granting the Commission powers of control over the rates, programs and
other activities of the business of broadcasting. 34
While the language of the Court in Sanders may be subject to strained or
even incompatible interpretations, evolution of the doctrine by lower
courts lends still more confusion.
In CarrollBroadcastingCo. v. FederalCommunications Commission,"
the United States Court of Appeals for the District of Columbia Circuit,
relying exclusively upon Sanders, laid down the principle that when an
existing broadcast station licensee offers to prove, solely on the basis of
added competition, that the grant of a new broadcast station license in
the market would be "detrimental to the public interest," the Commission is obligated to assess the circumstances and to render a determination, on the record made, as to whether the public interest would be
adversely affected by a grant of the additional radio station authorization
36
in the market concerned. The court said:
So economic injury to an existing station, while not in and of itself a matter of moment, becomes important when on the facts it spells diminution or
33.
34.
35.
36.
Id. at 474-75.
Id. at 475-76.
258 F.2d 440 (1958).
Id. at 443-44.
1965)
COMMUNITY ANTENNA TELEVISION
destruction of service. At that point the element of injury ceases to be a
matter of purely private concern.
Of course the public is not concerned with whether it gets service from A
or from B or from both combined. The public interest is not disturbed
if A is destroyed by B, so long as B renders the required service.
The Carroll case thus created a new concept of law since it held, for the
first time, that under circumstances where the addition of a station into
a market will result in a "diminution or destruction" of service, the
station or stations in that market are entitled as a matter of law to economic protection by the government from additional broadcast station
competition.17 Carroll,also for the first time, imposed a public-utility concept upon the business of radio broadcasting holding both implicitly and
explicitly that broadcasters render a "required service." In such circumstances the FCC does, in fact, grant to a broadcaster licensee or licensees
a limited monopoly without exercising the correlative powers of "controls
over the rates, programs and other activities of the business of broadcasting" and other such regulatory powers referred to by the Supreme
Court in Sanders as prime requisites to grant of such monopolies.
With regard to the so-called "economic impact" of CATV systems
upon existing television station operations, the FCC extended still further
the Sanders-Carrolldoctrine in the case of CarterMountain Transmission
Corporation," holding that a community antenna television operator
should not be permitted to utilize a proposed common carrier microwave
relay system in the conduct of its CATV system business if such use
would prove competitively harmful to the television station complainant
to the extent of perhaps driving the television station out of business.
This decision of the FCC was affirmed by the United States Court of
Appeals for the District of Columbia Circuit in Carter Mountain Transmission Corporation v. Federal Communications Commission.9 Thus, a
court held again that the "free enterprise" business of broadcasting was
entitled, in appropriate circumstances, to economic protection against competition from businesses other than broadcasting. The traditional safeguard was thus extended, without precedent, to deny authorization of
public, common carrier radio facilities for use by persons who seek to
engage in commercial endeavors competitive with broadcasting.
Accepting the decision of the Court of Appeals in Carter Mountain
as a green light to exert indirect controls over the operation of CATV
37. While in theory the Carroll doctrine confers no preference upon the existing, operating
station, its practical application undeniably does.
38. 32 F.C.C. 459, 22 Pike & Fischer R. R. 193 (1962).
39. 321 F.2d 359 (1963).
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
systems, the FCC soon thereafter promulgated a set of proposed rules.
These rules, the sole authority for which was premised upon Carter
Mountain, established certain restrictive standards under which nonjurisdictional community antenna operators would be compelled to operate their businesses if they wished consideration from the Commission
in the use of microwave radio relay facilities. 40 The sole purpose of the
proposed rules was to afford a measure of economic protection to television stations from the effects of competition which might be generated
by the operation of a community antenna system located in the area of
the television station. For the first time in the history of commercial
broadcasting, the FCC adopted as a basic, across-the-board policy the
concept that television station licensees were to be afforded protective
economic status with regard to other businesses.41
The rules proposed by the Federal Communications Commission in
formal rule-making proceedings provide that the community antenna
system must receive and carry "without material degradation" the signals
broadcast by any television station providing a Grade A or better coverage over the community in which the CATV system operates. The regulations would also require that the CATV system shall not receive and
distribute any television program which may duplicate simultaneously
the program broadcast by the protected station nor may the CATV
system receive a program from another broadcast source which has been,
or is to be, broadcast by the protected "local" station within a 15-daybefore-and-after period.42 As such, the FCC would confer upon the socalled "local" television station a program exclusively for a thirty-day
period during which time the community antenna operator is prohibited
from receiving and distributing the said pre-empted program. The FCC,
therefore, would require the antenna operator to delete and restrain
certain programs from reception over the antenna facilities solely for
the benefit of the "local" television station. Parenthetically, there appear
to be very serious questions as to whether this "prior restraint" on distribution and reception of television signals is compatible with the first
40. Notice of Proposed Rule Making, FCC Docket 14895, released December 14, 1962;
Notice of Proposed Rule Making, FCC Docket 15233, released December 13, 1963.
41. In the Carroll case, and presumably in Carter Mountain, the presumption was for
unrestrained operation and free competition. Indeed judge Prettyman, in Carroll, made it
clear that the burden of proving otherwise was a "heavy" task. But under the FCC's new
CATV policies, the presumption is for restrictive competition.
42. As originally proposed the rules contemplated (1), a 30-day-before-and-after restrictive period during which the local station was to be protected against duplication of programs;
and (2), extended automatic protection to any station providing a predicted Grade B or
better service over the community in which the CATV system is situated. The proposed rules
were changed effective July 8, 1964 (FCC 64-590).
1965]
COMMUNITY ANTENNA TELEVISION
amendment to the Constitution or section 326 of the Communications
Act, which specifically enjoins the FCC from engaging in any regulatory
4
activities bordering upon censorship. 3
Upon announcing these proposed rules, the FCC immediately instituted
a "freeze" on the processing of all microwave applications involving the
provision of services to CATV systems, but stated that it would make
exceptions in those cases where the community antenna operator receiving the service would agree "voluntarily" to abide by the proposed rules
in the conduct of his business for that "interim" period during which
the final adoption of the rules was being considered. Notwithstanding the
fact that the Administrative Procedure Act specifically provides that administrative rules having "substantive" effects cannot be enacted or applied without completion of precisely defined rule-making procedures,
these rules, proposed by the FCC in December 1962, have yet to be
adopted by the agency. For all practical purposes they have, nevertheless,
44
been applied by the agency in the conduct of its affairs.
Therefore, without significant change in the controlling legislation, and
without further comment from the Supreme Court, the FCC has substantially removed the business of television broadcasting from the realm
of a free-enterprise climate through promulgation of policies which intrinsically accord a large measure of governmentally provided protection
against competition to those persons engaged in the commercial television broadcast business vis-h-vis those engaged in other commercial
endeavors. At the same time, however, the Commission has not assumed
the extensive "powers of control" over all of the business practices, and
particularly the profit aspects, of television broadcasters.
In short, the basic policy followed by the FCC in "regulating" the
community antenna industry has been one of industry "containment." A
policy of containment promotes regulatory activity which is designed to
hold the industry, to the extent possible, within certain boundaries, and
to prevent or retard dramatic changes in either the nature or the amount
of services furnished by CATV systems. In furtherance of this containment policy the FCC has used many technical and procedural devices,
the principal purposes and effects of which have been to defer the adoption of any truly definitive or permanent policies. These FCC activities
43. Section 326 of the Communications Act provides that:
Nothing in this Act shall be understood or construed to give the Commission the power
of censorship over the radio communications or signals transmitted by any radio station,
and no regulation or condition shall be promulgated or fixed by the Commission which
shall interfere with the right of free speech by means of radio communication. 48 Stat.
1064 (1934), 47 U.S.C. § 326 (1958).
44. See section 4 of the Administrative Procedure Act, 60 Stat. 238 (1946), 5 U.S.C. §
1003 (1958).
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
have taken the form of "inquiry" proceedings and "proposed rule makings," accompanied in many instances by so-called "freezes" on the
processing of applications during the pendency of the proceeding thus
enforcing a moratorium on authorization of new or modified microwave
facilities.4 5 Additionally, individual applications for CATV microwave
facilities have been designated for evidentiary hearings on a grand scale,
and at the drop of a broadcaster's hat. Through such means the FCC has
been able to postpone and even avoid basic policy decisions for years,
and, in many cases, to force "voluntary" compromises where individual
competitive controversies are involved. In sum, the FCC has pursued a
course literally designed to stimulate an increase in bureaucratic activities
and measures in an agency already greatly over-burdened with such
wasteful procedures.
The FCC is currently involved in three major proceedings directly
related to fundamental CATV policies. As already mentioned in detail,
the first of these proceedings, and probably the most significant, is a rulemaking proposal to determine what economic protections should be afforded to "local" television stations by community antenna systems in
return for the "privilege" of utilizing radio microwave relays in the conduct of the CATV business. The principal issues in this proceeding are,
what criteria shall determine the definition of a "local" television station,
i.e., a CATV system located in the principal community of the television
station, a CATV operating within the City Grade contour, the Grade A
contour or the Grade B contour; and, the extent of time involved in the
requirement to abstain from duplication of the local station's programs,
i.e., should it cover a delayed period of time as, for example, 15-daysbefore-or-after a broadcast by the "local" station, or should it be only
simultaneous therewith. This rule-making proceeding has been underway
for more than two years, with the FCC unable to reach any decision. The
position of the CATV industry seems to be that, first, no such generally
applied restrictions on free competition are lawful, or even desirable; and,
secondly, that if such rules are necessary and lawful they should be restricted to CATV systems and television stations operating in co-located
communities, and the restriction on duplication should be only on a simultaneous basis. The broadcasting industry, as would be expected, is holding out for as much protection against the competitive affects of CATV
operation as it can reasonably get.
The second active proceeding of a major policy nature at the FCC is an
45. E.g., Notice of Inquiry in Docket 12433, released May 22, 1958 (FCC 58-493) which
imposed a prohibition against authorization of any microwave facilities to serve CATV
systems for approximately one year; see also FCC Dockets 14895 and 15233.
1965]
COMMUNITY ANTENNA TELEVISION
"inquiry" involving the matter of joint or common ownership of television
broadcast stations and CATV systems.46 The obvious motivating factor
here is the potential problem of undue concentration of control of massmedia communications in a manner adverse to the public welfare. There
has been little activity by the FCC in this area and the proceeding has
the earmarks of a precautionary step rather than a serious rule-making
effort. The FCC, however, does appear concerned that many of its licensees are plunging into the new industry with demonstrated vigor and without the consent, direction, or guidance of the FCC.
While this proceeding might well eventually terminate in enactment
of some rules on the matter, it is not believed that such common ownership will ever be precluded although it seems reasonable that some policy
circumscribing unusually large concentrations of ownership of community
antennas in the hands of a few large TV station licensees might be expected. It seems likely also that some prohibitions against common CATV
and TV station ownership in the same community might be enacted.
The third major proceeding at the FCC involves sweeping changes of
a policy and technical nature in the use of microwave radio relays by
community antenna systems.17 This proceeding was instituted in August
1964, and is an obvious attempt by the Commission to bring the operation
of all microwaves serving CATVs under a single new category unburdened with the precedent of common carrier traditions and laws. This
particular proceeding involves the application of newly devised technical
restrictions on the operation of CATV microwaves which will permit the
FCC to regulate the CATV industry to an additional degree through application of "technical limitations" on the services furnished via microwave relay systems. This rule-making proceeding involves proposed frequency reallocations and eligibility matters and other technical changes
so comprehensive in scope as not to permit full treatment here. Since
the proceeding is not yet "off the ground" it is impossible to make any
reasonable predictions upon its eventual disposition.
Much of the past regulatory activity of the FCC in the area of CATV
has, it would seem, been little more than a delaying, rear-guard action
and the preface for eventual federal legislation. Until relatively recently,
the legislative activities of the FCC with regard to CATV seem to have
been undertaken only half-heartedly and with a demonstrated lack of any
46. Notice of Inquiry, FCC Docket 15415, Acquisition of Community Antenna Television
Systems by Television Broadcast Licensees. (FCC 64-310), released April 16, 1964.
47. Notice of Proposed Rule Making, FCC Docket 15586, Amendment of Parts 2, 21, 74
and 91 of the Commission's Rules and Regulations relative to the licensing of microwave
radio stations used to relay television signals to community antenna television systems (FCC
64-720), released August 3, 1964.
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
real, basic understanding of the industry or even of the desired regulatory
objective. The attitude of the FCC has been one of maintaining the
status quo to the degree possible until some definitive objectives and
policies could be evolved-or more preferably foisted upon it by the
Congress. During this entire period and in spite of the policies followed
by the FCC, the CATV industry has matured greatly, literally forcing a
more positive recognition by the regulator rather than the continuation
of the negative, containment approach heretofore taken.
During the last several years the two major spokesmen for these members of the mass-media communications industry, the National Association of Broadcasters (NAB) and the National Community Television
Association (NCTA), national trade associations located in Washington,
D.C. and representing the interests of their respective members, have
engaged extensively in exchanges of views among themselves and sometimes with the FCC. The objective of these industry negotiations has
been to reach an area of basic agreement on the terms of a mutually acceptable legislative program for presentation to the Congress. From time
to time, it has seemed that industry agreement on federal regulation was
about to be reached; but each time the negotiations have encountered
immovable stumbling blocks, and broken down. The obstacle has always
been failure to agree on the amount and extent of protection against
competition to be afforded by the community antenna systems to the
television broadcasters operating in the same area.
With due regard for the National Community Television Association,
the National Association of Broadcasters is one of the most persuasive of
Washington lobby organizations. But for the differences of interest and,
therefore opinion, which often prevail between the many members in the
different economic strata of the broadcasting industry, the NAB has few
peers in the capacity to execute basic lobbying objectives. As an industry
representative, its single difficulty seems to be reaching the agreement
necessary among its members for articulation of clear Association objectives. The eminence and emerging dominence of the broadcasting press,
and the great power to editorialize which is currently developing to full
potential, confer on the broadcasting industry, as a group, perhaps the
most effective lobbying tools at the disposal of any industry trade association. It would be naive to overlook the influence which the broadcasting industry exerts and will continue to exert in any legislative program undertaken by the FCC and/or the CATV industry, either together
or separately. The broadcasting industry-if it can reach agreement
intramurally-is a most powerful adversary to any legislative program
with which it is in basic disagreement.
COMMUNITY ANTENNA TELEVISION
A PROGNOSIS FOR THE FUTURE
Broadcasting and broadcasters, in this observer's view, are beginning
to recognize and take notice of the fact that it just might be short-sighted
to urge, in such direct fashion, that their industry be afforded an economically protected status with regard to other commercial activities. The
FCC cannot properly, lawfully, or logically continue to restrict free competition in the field of broadcasting without assuming the mandatory,
concomitant responsibility of exercising a comprehensive public-utility
type of supervision over the business of broadcasting. Broadcasters cannot reasonably continue to seek protection from free competition without
expecting to relinquish their own basic rights to operate in a free-enterprise environment. Broadcasters should be, and generally are, the first
to protest encroachments by the government into an area which can only
lead in a single direction-the ultimate destruction of free-enterprise
broadcasting.
For all of the reasons recited, not the least of which is the rising prominence of the community antenna industry and the increasing effect upon
the over-all television broadcasting picture, it is virtually inconceivable
that the Congress will not soon act to bring CATV under the full jurisdiction of the agency charged with the regulation of the communications
industry. This prognosis is certainly supported by the fact that the National Community Television Association, as well as the National Association of Broadcasters and the FCC, all invite federal legislation. They
simply cannot yet find full agreement upon the precise terms of such
legislation.
While each of these interested parties will play a significant role in
the enactment of legislation conferring full jurisdiction upon the FCC
over CATV operation, the influence of the two industries, and principally
the broadcasting block, should dominate. In this context, it is significant
to note again the very substantial influx of prominent broadcasting interests into the community antenna business.4" This relatively recent phenomenon has already been marked by a discernible softening in the broadcast industry's attitude towards CATV-which in the not-distant past
could only be characterized as one of hostility-and the evolution of a
more conciliatory approach to the problems and welfare of the community antenna operator. Continued substantial investments by major
broadcast interests in community antenna operation will make it increas48. Among the prominent broadcasting interests now engaged in CATV operation are
Columbia Broadcasting System, Storer Broadcasting Co., General Electric, Westinghouse,
Cox Broadcasting, Rollins Broadcasting, Time-Life, Inc., Meredith Publishing Co., and many
others.
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 14
ingly difficult for the NAB to assume any unified position of hostility
toward the CATV industry; and this can only benefit the legislative outlook for the community antenna industry.
The role of the FCC will, it is believed, be that of a catalyst, and,
as such, will seek to bring the respective industry views to a common
or nearly common ground at which time the Congress will be persuaded
to enact relatively uncontroversial legislation bringing community antenna operation within the full jurisdiction of the FCC as part and
parcel of the nation-wide television communications complex. As with
most regulatory systems, those community antenna operators who will
fall within the purview of the regulator should, incidentally, begin to
enjoy certain benefits as recompense for the imposition of those annoyances which inevitably accompany involvement with the federal
bureaucracy. Not the least of these benefits could well be federal preemption of the field of community antenna operation, fostering thereby
a uniform policy of regulation and eliminating to a large degree the
present bothersome inconsistencies and uncertainties now found from
state to state and even from city to town with the same state. CATV
should also find some change of heart and a more balanced, judicial attitude from the regulator which heretofore has been unduly prejudicial
in favor of the jurisdictional broadcaster; coming into the FCC's house
should help substantially to erase these past prejudices.
It is not suggested here that all of the CATV industry's problems,
or those of the individual community antenna operator, will be resolved
through enactment of federal regulatory legislation. Uniform federal
regulation will not bring about a panacea for the CATV operators.
The CATV industry, of course, faces many other substantial problems,
the greatest of which is probably the so-called "copyright" issue. This
problem area relates principally to the "property rights" held, if any,
in television programming by the broadcasters and those rights which
may be held by program originators, distributors, networks, or others
holding statutory copyrights in material received and distributed via
CATV facilities. This question is currently before the courts. 49 The FCC
has determined that it is not the proper forum in which to decide these
questions and has taken the position that the parties must adjudicate
their respective rights through the courts of proper jurisdiction.
Without predicting here the ultimate determination on this significant
and highly complex legal question, it is not believed that rulings by the
courts adverse to CATV interest would result in fatal, critical, or even
49. See cases cited supra note 11.
1965]
COMMUNITY ANTENNA TELEVISION
severe injury to the community antenna industry. Such adverse rulings
would most certainly promote negotiations between the CATV systems
and those persons holding the rights in the program material, thus enlarging the scope of participants in the industry's profit picture.
To sum up, therefore, the tide of federal legislation confering a comprehensive, but relatively fair and reasonable, regulatory authority upon
the FCC over community antenna operation appears inevitable. The
enactment of such regulation should not in the long run prove harmful
to the CATV operator, and should, in fact, transmit an air of stability
and consistency lacking to some degree in the industry today. The real
future of community antenna operation may lie in areas other than the
performance of pure television broadcast reception activities; but, here
again, the interwoven forces of government (the Congress and the FCC)
the directly interested parties (the communications industry including
broadcasting, CATV and, probably, the big telephone companies) and the
consumer public will ultimately determine this course of events.
This observer believes that the day is not far distant when community
antenna operators will themselves be engaged in devising their own ingenious, theories and devices, all oriented toward the public welfare, to
invite governmental protection from competition from some new, upstart
industry seeking to intrude into their domain. And when this day does
come, all will know that the community antenna industry has come fully
of age and gained a coveted place in the Establishment.