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All. for Cmty. Media v. FCC - 529 F.3d 763 (6th Cir. 2008)

Rule:

In Chevron, pursuant to the principle of deference to administrative interpretations, considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer. To determine whether such deference is warranted, the Chevron analysis, colloquially referred to as the Chevron two-step, requires the following inquiry: the court must ask whether the statute is silent or ambiguous with respect to the specific issue before it; if so, the question for the court is whether the agency's answer is based on a permissible construction of the statute. Within this analytical framework, judicial deference to an agency's construction of a statute is justified because the statute's ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps. A very good indicator of delegation meriting Chevron treatment is express congressional authorizations to engage in the process of rulemaking that produces regulations or rulings for which deference is claimed.

Facts:

Following a notice-and-comment rulemaking procedure, the Federal Communications Commission (FCC) released an order (Order) adopting rules interpreting and implementing section 621(a)(1) of the Communications Act of 1934 (Act), 47 U.S.C. § 541(a)(1), which prohibited local franchising authorities from "unreasonably refusing to award" competitive cable franchises. The FCC released the Order on March 5, 2007 on the basis of record evidence that the operation of the local franchising process was unreasonably impeding competitive entry into the cable television market. Petitioners and intervenors, consisting primarily of various local franchising authorities (LFAs), their representative organizations, and the incumbent cable industry’s trade association asserted that the FCC lacked the requisite authority to promulgate the Order and, in the alternative, that the FCC's interpretation was not entitled to deference and was arbitrary and capricious.

Issue:

  1. Did the Federal Communications Commission have the requisite authority to promulgate the Order?
  2. Was the FCC’s interpretation arbitrary and capricious?

Answer:

1) Yes 2) No

Conclusion:

The Court held that the Federal Communications Commission has rulemaking authority to carry out the provisions of the Communications Act of 1934, which included §§ 251 and 252, added by the Telecommunications Act of 1996. Anent the other issue, the appellate court turned to Chevron deference, finding that the language at issue in § 621(a)(1) was indeed ambiguous, and the FCC’s construal of the language amounted to a permissible construction of the language. However, the appellate court held that FCC’s interpretation appeared to be a permissible construction of the Act. Moreover, the appellate court found that the FCC acted well within its statutorily delineated authority in enacting the order and that there existed sufficient record evidence to indicate that the FCC did not engage in arbitrary and capricious rulemaking activity.

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