Fcc v. Beach Communications, Inc., 508 U.S. 307 (1993)

Federal Communications Commission v. Beach Communications, Inc.

No. 92-603

Argued March 29, 1993
Decided June 1, 1993
508 U.S. 307

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Syllabus

The Cable Communications Policy Act of 1984 (Act) provides that cable television systems be franchised by local governmental authorities, but exempts, inter alia, facilities serving

only subscribers in 1 or more multiple unit dwellings under common ownership, control, or management, unless such . . . facilities us[e] any public right-of-way,

§ 602(7)(B). After petitioner Federal Communications Commission (FCC) ruled that a satellite master antenna television (SMATV) system -- which typically receives a satellite signal through a rooftop dish and then retransmits the signal by wire to units within a building or a building complex -- is subject to the franchise requirement if its transmission lines interconnect separately owned and managed buildings or if its lines use or cross any public right-of-way, respondents, SMATV operators, petitioned the Court of Appeals for review. Among other things, the court found that § 602(7) violated the equal protection guarantee of the Fifth Amendment’s Due Process Clause because there is no rational basis for distinguishing between those facilities exempted by the statute and SMATV systems linking separately owned and managed buildings.

Held: Section 602(7)(B)’s common ownership distinction is constitutional. Pp. 313-320.

(a) In areas of social and economic policy, a statutory classification that neither proceeds along suspect lines nor infringes fundamental constitutional rights must be upheld against equal protection challenge if any reasonably conceivable state of facts could provide a rational basis for the classification. See, e.g., Sullivan v. Stroop, 496 U.S. 478, 485. On rational basis review, a statutory classification such as the one at issue comes before the Court bearing a strong presumption of validity, and those attacking its rationality have the burden to negate every conceivable basis that might support it. Since a legislature need not articulate its reasons for enacting a statute, it is entirely irrelevant for constitutional purposes whether the legislature was actually motivated by the conceived reason for the challenged distinction. Legislative choice is not subject to courtroom factfinding, and may be based on rational speculation unsupported by evidence or empirical data. Adherence to these restraints on judicial review preserves to the legislative branch its rightful independence and its ability to function. The restraints have added force where a legislature must engage in a process of linedrawing, as Congress did here in choosing which facilities to franchise. This necessity renders the precise coordinates of the resulting legislative judgment virtually unreviewable, since the legislature must be allowed leeway to approach a perceived problem incrementally. Pp. 313-316.

(b) There are at least two possible bases for the common ownership distinction; either one suffices. First, Congress borrowed § 602(7)(B) from the FCC’s pre-Act regulations, and, thus, it is plausible that Congress also adopted the FCC’s rationale, which was that common ownership was indicative of systems for which the costs of regulation would outweigh the benefits to consumers. A legislator might rationally assume that such systems would typically be limited in size or would share some other attribute affecting their impact on cable viewers’ welfare such that regulators could safely ignore them. Subscribers who can negotiate with one voice through a common owner or manager may have greater bargaining power relative to the cable operator, and therefore less need for regulatory protection. A second conceivable basis for the statutory distinction is concern over the potential for effective monopoly power. The first SMATV operator to gain a foothold by installing a dish on one building in a block of separately owned buildings would have a significant cost advantage in competing for the remaining subscribers, because it could connect additional buildings for the cost of a length of cable, while its competitors would have to recover the cost of their own satellite facilities. Thus, the first operator could charge rates well above its cost and still undercut the competition. These rationales provide plausible bases for the common ownership distinction that do not depend upon the use of public rights-of-way. Pp. 317-320.

296 U.S.App.D.C. 141, 965 F.2d 1103 (CADC 1992), reversed and remanded.

THOMAS, J., delivered the opinion of the Court, in which REHNQUIST, C.J., and WHITE, BLACKMUN, O’CONNOR, SCALIA, KENNEDY, and SOUTER, JJ., joined. STEVENS, J., filed an opinion concurring in the judgment, post, p. 320.