AMERICAN LIBRARY ASS'N. v. F.C.C., 406 F.3d 689 (D.C. Cir. 2005)

[The] unbounded view of FCC jurisdiction [advanced by flag proponents] proves too much. Were it true, the FCC would have plenary authority to regulate consumer electronics and computer devices, and there would have been no need for Congress to delegate authority to the FCC to implement its policy objectives [in various laws authorizing the FCC to regulate specific aspects of consumer electronics].

In thisReport and Order,we conclude that the potential threat of mass indiscriminate redistribution will deter content owners from making high value digital content available through broadcasting outlets absent some content protection mechanism. Although the threat of widespread indiscriminate retransmission of high value digital broadcast content is not imminent, it is forthcoming and preemptive action is needed to forestall any potential harm to the viability of over-the-air television. Of the mechanisms available toPage 695us at this time, we believe that [a broadcast flag] regime will provide content owners with reasonable assurance that DTV broadcast content will not be indiscriminately redistributed while protecting consumers' use and enjoyment of broadcast video programming.

I have previously expressed concerns about whether we have jurisdiction to adopt a broadcast flag solution, or whether this is an issue best left for Congress. As a general rule, the Commission should be wary of adopting significant new regulations where Congress has not spoken. On balance, though, I believe that given the broad congressional direction to promote the transition to digital broadcasting, a critical part of that obligation involves protection of content that is transmitted via free over-the-air-broadcasting. I am hopeful that any court review of this decision can occur before the effective date of our rules.

[w]ith regard to the injury-in-fact prong of the standing test, petitioners need not prove the merits of their case in order to demonstrate that they have Article III standing. Rather, in order to establish injury in fact, petitioners must show that there is a substantial probability that the FCC's order will harm the concrete and particularized interests of at least one of their members.

reasonably interpreted the Communications Act as granting it jurisdiction to establish technical requirements for television receiving equipment in order to fulfill its responsibility of implementing the transition to digital television. Sections 1 and 2(a) of the Act,47 U.S.C. 151,152(a), confer on the agency regulatory jurisdiction over all interstate radio and wire communication. Under the definitional provisions of section 3,47 U.S.C. 153, those communications include not only the transmission of signals through the air or wires, but also "all instrumentalities, facilities, [and] apparatus" associated with the overall circuit of messages sent and received — such as digital television receiving equipment.

. . . [T]he Commission has the authority to promulgate regulations to effectuate the goals and provisions of the Act even in the absence of an explicit grant of regulatory authority, if the regulations are reasonably ancillary to the Commission's specific statutory powers and responsibilities.

[t]he FCC has asserted jurisdiction it does not have. . . . The FCC claims no specific statutory authority allowing it to meddle so radically in the nation's processes of technological innovation, but instead cites to its latent "ancillary" jurisdiction, which the FCC astonishingly contends is boundless unless Congress specifically acts to limit it.

. . . [I]n no circumstance can the FCC regulate an activity that is not an interstate "communication" by radio or wire, and the Broadcast Flag rules regulate neither. The Broadcast Flag does not dictate how DTV transmissions are made, but simply controls how the transmitted content can be treatedafterit is received. . . . [T]he Communications Act is clear that, unless specified elsewhere, it gives the FCC authority over receipt "services," not the receipt "apparatuses" the agency now attempts to regulate.

"Chevronis principally concerned with whether an agency has authority to act under a statute."Arentv. Shalala,70 F.3d 610,615(D.C. Cir. 1995).Chevronanalysis "is focused on discerning the boundaries of Congress' delegation of authority to the agency; and as long as the agency stays within that delegation, it is free to make policy choices in interpreting the statute, and such interpretations are entitled to deference."Id.; see also Mead,533 U.S. at 226-27,121 S.Ct. 2164(holding thatChevrondeference is due only when the agency acts pursuant to "delegated authority").

An agency construction of a statute cannot survive judicial review if a contested regulation reflects an action that exceeds the agency's authority. It does not matter whether the unlawful action arises because the disputed regulation defies the plain language of a statute or because the agency's construction is utterly unreasonable and thus impermissible.

2.Ancillary Jurisdiction Under the Communications Act of1934

While the Supreme Court has described the jurisdictional powers of the FCC as . . . expansive, there are limits to those powers. No case has ever permitted, and the Commission has never, to our knowledge, asserted jurisdiction over an entity not engaged in "communication by wire or radio."

While we appreciate the need for a flexible approach to FCC jurisdiction, we believe the scope advanced by petitioners is far too broad. The "affecting communications" concept would result in expanding the FCC's already substantial responsibilities to include a wide range of activities, whether or not actually involving the transmission of radio or television signals much less being remotely electronic in nature. Nothing before us supports this extension.

Under [§ 151], Congress delegated authority to the FCC to expand radio and wire transmissions, so that they would be available to all U.S. citizens. Section [151] does not address thecontentof the programs with respect to which accessibility is to be ensured. In other words, the FCC's authority under [§ 151] is broad, but not without limits.

In this case, the [agency]'s position seems to be that the disputed regulations are permissible because the statute does not expressly foreclose the construction advanced by the agency. We reject this position as entirely untenable under well-established case law.SeePage 706Ry. Labor Executives' Ass'n v. Nat'l Mediation Bd.,29 F.3d 655,671(D.C. Cir. 1994) (en banc) ("Were courts topresumea delegation of power absent an expresswithholdingof such power, agencies would enjoy virtually limitless hegemony, a result plainly out of keeping withChevronand quite likely with the Constitution as well.") (emphasis in original);see also Halverson v. Slater,129 F.3d 180,187(D.C. Cir. 1997) (quotingRy. Labor Executives,29 F.3d at 671);Oil, Chem. Atomic Workers Int'lUnion v. NLRB,46 F.3d 82,90(D.C. Cir. 1995) (same);Ethyl Corp. v. EPA,51 F.3d 1053,1060(D.C. Cir. 1995) ("We refuse . . . to presume a delegation of power merely because Congress has not expressly withheld such power.");Natural Res. Def.Council v. Reilly,983 F.2d 259,266(D.C. Cir. 1993) ("`[I]t is only legislative intent to delegate such authority that entitles an agency to advance its own statutory construction for review under the deferential second prong ofChevron.'") (alteration in original) (quotingKansas City v. Dep't of Hous.Urban Dev.,923 F.2d 188,191-92(D.C. Cir. 1991)).