At an FCC hearing and, later, before the District of Columbia Court of Appeals, Midwest Video and other cable systems objected to the FCC’s regulatory intervention into their operations, arguing, among other claims, that the commission’s cable access rules were beyond the scope of the agency’s jurisdiction as set forth in the Communications Act of 1934. Citing more than a decade of favorable legal precedent, the FCC rejected the cable industry’s position as an overly narrow interpretation of the commission’s jurisdiction.

Although the Communications Act did not explicitly grant cable television jurisdiction to the FCC, the Supreme Court had previously held in 1968 that FCC regulations that are “reasonably ancillary to the effective performance of the Commission’s various responsibilities for the regulation of television broadcasting” fell within the commission’s mandate. In that case, United States v. Southwestern Cable Co., the Court upheld FCC rules that required cable systems to retransmit the signals of local broadcast stations and seek prior FCC approval before making certain programming decisions. Similarly, in a 1972 case known as United States v. Midwest Video Corp., the nation’s highest court upheld FCC rules that required cable systems with 3,500 or more subscribers to create original programming and provide studio facilities for the production and dissemination of local cable programs.

Arguing specifically that the intent of the 1976 public access rules was no different than the programming rules at issue in the 1972 Midwest Video Case, the FCC maintained that controlling public access to cable was just a logical extension of its broadcasting authority. The Supreme Court, however, disagreed. Although the Court suggested that the public access rules might violate cable operators’ First Amendment rights to free speech and Fifth Amendment protections against the “taking” of property without due process of law, the justices declined to make a broad constitutional ruling. Instead, the Court distinguished the public access rules from the FCC’s previous cable rules by declaring the public access rules to be in violation of section 3(h) of the Communications Act of 1934, which limits the FCC’s authority to regulate “common carriers.”

Unlike broadcasters, common carriers are communication systems that permit indiscriminate and unlimited public access. Although the FCC has authority to regulate common carriers such as telephone networks and citizens band (CB) radio, it is expressly prohibited from subjecting broadcasters to common-carrier rules under section 3(h). Because the Court ruled that public control of local cable access would have, in effect, turned cable systems into common carriers, Midwest Video and the cable industry prevailed, at least as a matter of federal law. In the wake of the Midwest Video Case’s narrow ruling, state and local authorities were still free to pass ordinances mandating set-asides for public access channels as a precondition for the granting or renewal of a cable franchise in a specific community.