Costa De Oro Television, Inc. v. Federal Communications Commission

Argued March 18, 2002 This case involves a dispute over the procedures the Federal Communications Commission (FCC or Commission) uses to determine local television market designations pursuant to the cable television mandatory carriage rules. In particular, Costa de Oro Television, Inc. (Costa) petitions for review of two FCC orders that sustain earlier market modification rulings but, at the same time, change the market definition mechanism. Costa also seeks review of the FCC decision promoting the use of certain data (the Longley-Rice signal strength prediction methodology maps) in market modification proceedings. Because we conclude that the Commission ""articulated a rational explanation"" for its decisions, Eagle-Picher Indus., Inc. v. EPA, 759 F.2d 905, 921 (D.C. Cir. 1985), we deny Costa's petition. I. Background A. Statutory and Regulatory Background Concerned that local television broadcast stations were no longer able to compete with the growing cable industry,1 the Congress passed the Cable Television Consumer Protection and Competition Act of 1992 (Cable Act), 47 U.S.C. ss 521 et seq. The Cable Act includes ""must-carry"" provisions that require ""[e]ach cable operator"" to carry the signals of a specific number of ""local commercial television stations."" 47 U.S.C. s 534(a).2 A ""local commercial television station"" is defined as ""any full power television broadcast station ... that, with respect to a particular cable system, is within the same television market as the cable system."" 47 U.S.C. s 534(h)(1)(A). A local commercial television station that exercises its statutory must-carry right is entitled to cable carriage in its local market but it does not receive compensation therefor from the cable operator. The Cable Act also gives a broadcaster the option of cable carriage under a retransmission consent provision that permits the broadcaster and the cable operator to negotiate cable carriage arrangements and the broadcast station to receive compensation in return. Id. s 325(b). Every three years, the broadcaster is required to make an election between the must-carry and the retransmission consent options. See id. s 325(b)(3)(B). The first three-year cycle began in June 1993. 47 C.F.R. s 76.64(f)(1). A broadcast station's ""market"" is ""determined by the Commission by regulation or order using, where available, commercial publications which delineate television markets based on viewing patterns."" 47 U.S.C. s 534(h)(1)(C)(i). In 1992, the year the Cable Act was enacted, the Commission's rules, now codified at 47 C.F.R. s 76.55(e)(2), defined a station's market by reference to the Area of Dominant Influence (ADI) data produced by Arbitron, an audience research organization. Id. s 76.55(e)(1). The ADI describes a particular geographic television market based on measured viewing patterns. See Report and Order and Further Notice of Proposed Rulemaking, Definition of Markets for Purposes of the Cable Television Broadcast Signal Carriage Rules, 11 FCC Rcd 6201, 6203 p 4 (1996), (First Order). In general, every American county is assigned to a discrete market according to those local-market stations with a preponderance of total viewing hours in the county. Id.