## Facts

- Section 628(b) of the Communications Act (47 U.S.C. § 548(b)) prohibits cable operators from using unfair or deceptive practices whose purpose or effect is to hinder an MVPD from providing satellite cable or satellite broadcast programming to subscribers.
- Cable operators entered exclusive service contracts with owners of multiple dwelling units (MDUs), typically trading wiring/access arrangements for the exclusive right to provide video service to residents.
- The FCC found such exclusivity provisions foreclosed competing MVPDs’ ability to reach subscribers in MDUs and had anticompetitive effects in the video market.
- The FCC adopted a rule (1) prohibiting cable operators from entering new MDU exclusive service agreements and (2) prohibiting enforcement of existing exclusivity clauses.
- NCTA petitioned for review, arguing the FCC lacked statutory authority under § 628(b), that barring enforcement of existing contracts was impermissibly retroactive, and that the rule was arbitrary and capricious under the APA given the FCC’s change from earlier policy.

## Issues

1. Whether 47 U.S.C. § 548(b) authorizes the FCC to prohibit cable operators’ exclusive MDU service contracts as unfair methods of competition that significantly hinder other MVPDs from providing satellite-delivered programming to subscribers.
2. Whether prohibiting enforcement of existing MDU exclusivity clauses is unlawful retroactive regulation.
3. Whether the FCC’s rule satisfied the APA, including reasoned explanation for changing prior policy and evidentiary support for its competitive findings.

## Decision

- The D.C. Circuit denied the petition for review and upheld the FCC’s rule in full.
- The court held the FCC reasonably interpreted § 548(b) to reach exclusivity agreements that foreclose rival MVPDs’ access to subscribers and thereby significantly hinder their ability to provide satellite programming.
- The court held the ban on enforcing existing exclusivity clauses operated prospectively by regulating future enforcement and future effects, not by imposing liability for past contract formation.
- The court held the FCC’s change in policy was adequately explained and supported by the record and therefore was not arbitrary or capricious under the APA.

## Legal Principles

- Section 548(b) may be interpreted to cover cable-operator conduct that significantly hinders MVPDs’ ability to provide satellite-delivered programming by restricting access to subscribers, not solely conduct that withholds programming.
- Under Chevron, a court will uphold an agency’s reasonable construction of an ambiguous statutory provision within its regulatory domain.
- A rule restricting future enforcement of existing contract provisions generally is not impermissibly retroactive when it regulates ongoing and future conduct and effects rather than attaching new legal consequences to past acts.
- An agency may change policy if it acknowledges the shift and provides a rational explanation grounded in the statute and supported by record evidence; disagreement with prior policy does not by itself make the new policy arbitrary under the APA.

## Conclusion

The court sustained the FCC’s authority under 47 U.S.C. § 548(b) to prohibit cable operators from entering and enforcing exclusive MDU service contracts, treating the enforcement ban as prospective regulation and finding the FCC’s policy change and competitive findings adequately reasoned under the APA.


Nat’l Cable & Telecomms. Ass’n v. FCC, 567 F.3d 659 (D.C. Cir. 2009)