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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 8, 2003 Decided October 31, 2003
Nos. 02-1337 & 02-1347
CONSUMER FEDERATION OF AMERICA, ET AL.,
PETITIONERS/APPELLANTS
v.
FEDERAL COMMUNICATIONS COMMISSION AND
UNITED STATES OF AMERICA,
RESPONDENTS/APPELLEES
AT&T CORPORATION, ET AL.,
INTERVENORS
On Petition for Review and Notice of Appeal of Orders of the
Federal Communications Commission
Cheryl A. Leanza argued the cause for petitioners/appel-
lants. With her on the briefs were Harold Feld and Andrew
Jay Schwartzman.
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
2
Joel Marcus, Counsel, Federal Communications Commis-
sion, argued the cause for respondents/appellees. With him
on the brief were R. Hewitt Pate, Acting Assistant Attorney
General, Robert B. Nicholson and Steven J. Mintz, Attorneys,
John Rogovin, Acting General Counsel, and Daniel M. Arm-
strong, Associate General Counsel.
Arthur J. Burke argued the cause for intervenors Comcast
Corporation, et al. With him on the brief were Dennis E.
Glazer and David L. Lawson. Mark C. Rosenblum entered
an appearance.
Before: EDWARDS, RANDOLPH, and GARLAND, Circuit Judges.
Opinion for the Court filed by Circuit Judge RANDOLPH.
RANDOLPH, Circuit Judge: This dispute arose during the
Federal Communications Commission’s review of a proposed
merger between AT&T Broadband Corp. (‘‘AT&T’’) and Com-
cast Corp. The Commission rejected a request from several
consumer groups to place in the record an agreement be-
tween AT&T and Time Warner, Inc.1 The agreement estab-
lished the terms by which Time Warner’s AOL subsidiary
would provide internet service to customers of the merged
firm. The consumer groups – the Consumer Federation of
America, Consumers Union, and the Center for Digital De-
mocracy – immediately petitioned for judicial review of this
decision. They later filed an appeal in this court from the
Commission’s Order approving the license transfers required
to consummate the merger.
I.
At the time they decided to merge, AT&T was the nation’s
largest cable company, while Comcast was its third largest.
AT&T also owned an interest in Time Warner Entertainment,
L.P. (‘‘TWE’’), a limited partnership with Time Warner and
the nation’s second-largest cable provider. The Commission
may not have approved the merger if the new firm – AT&T
Comcast Corp. – maintained its interest in all three cable
1 Time Warner, Inc., was then known as AOL Time Warner, Inc.
3
systems. So the merging parties proposed that, pending an
eventual divestiture, AT&T would insulate its TWE interest
by placing it in an irrevocable trust. The parties executed an
agreement with Time Warner to implement this arrangement
(the ‘‘Restructuring Agreement’’).
In connection with the Restructuring Agreement, the par-
ties also negotiated the agreement at the center of this case –
the AOL ISP Agreement. The AOL ISP Agreement is not in
the record, but the parties agree that it establishes the terms
by which customers of AT&T Comcast would be able to
choose AOL as their internet service provider (‘‘ISP’’). The
parties also agree that the AOL ISP Agreement contains two
additional features. First, the agreement is non-exclusive –
that is, AT&T Comcast could negotiate similar agreements
with other ISPs, giving its customers a choice of providers.
Second, the agreement prohibited AOL from providing
streaming video to AT&T Comcast’s customers.
At the request of the Commission staff, the merging parties
filed the Restructuring Agreement with the Commission.
Initially they withheld its exhibits, the AOL ISP Agreement
among them. The merging parties were reluctant to file the
exhibits wholesale because of their commercially sensitive
nature, and because they did not think the exhibits were
relevant. They asked the Commission staff to review the
exhibits at the Department of Justice, where they had sub-
mitted them in connection with the Department’s merger
review process. If the staff identified any particular exhibit
as relevant to the merger, the merging parties would then file
it with the Commission. The staff agreed to this proposal,
reviewed the documents and determined that the AOL ISP
Agreement was not relevant to the Commission’s inquiry.
Meanwhile, the consumer groups learned of the AOL ISP
Agreement through press reports. They filed a motion ask-
ing the Commission to force AT&T and Comcast to file the
AOL ISP Agreement and make it part of the administrative
record. The Commission denied the motion, In re Applica-
tions for Consent to the Transfer of Control of Licenses from
Comcast Corp. and AT&T Corp. to AT&T Comcast Corp., 17
4
F.C.C.R. 22,633 (2002) (‘‘the Motion Order’’), and the groups
petitioned this court for review pursuant to 47 U.S.C.
§ 402(a) and 28 U.S.C. § 2342(1). The following month, the
Commission approved the license transfers required to con-
summate the merger. In re Applications for Consent to the
Transfer of Control of Licenses from Comcast Corp. and
AT&T Corp. to AT&T Comcast Corp., 17 F.C.C.R. 23,246
(2002) (‘‘the Merger Order’’). The consumer groups appealed
that decision pursuant to 47 U.S.C. § 402(b)(6). We consoli-
dated the petition and the appeal.
II.
There are two preliminary matters. The first deals with
the petition for judicial review. The Motion Order was not a
‘‘final’’ order within the meaning of the Hobbs Act, 28 U.S.C.
§ 2342(1). It did not finally decide whether the Commission
would approve transfer of the licenses and it did not end the
proceedings before the Commission. See Illinois Citizens
Comm. for Broad. v. FCC, 515 F.2d 397, 402 (D.C. Cir. 1975).
While we therefore lack jurisdiction over the petition for
review, and will dismiss it, this is of little consequence.2 The
Merger Order is appealable under 47 U.S.C. § 402(b)(6), and
the Administrative Procedure Act, 5 U.S.C. § 704, provides
that an agency ‘‘ruling not directly reviewable’’ – such as the
Motion Order – may be reviewed with the final agency action.
The second matter deals with standing. The intervenors –
AT&T, Comcast and Comcast Holdings Corp. – argue that
the consumer groups lack standing. An association has
standing to pursue litigation ‘‘on behalf of its members when
its members would have standing to sue in their own right,
the interests at stake are germane to the organization’s
purpose, and neither the claim asserted nor the relief re-
quested requires members’ participation in the lawsuit.’’
Hunt v. Washington State Apple Adver. Comm’n, 432 U.S.
2The only practical consequence of the dismissal is that the
United States is no longer a party to this case. Compare 28 U.S.C.
§ 2344 (providing that Hobbs Act action ‘‘shall be against the
United States’’).
5
333, 343 (1977). Here no one questions that the consumer
groups meet the last two Hunt conditions. The dispute is
about the first condition – whether any member can establish
individual standing, which requires a showing that the mem-
ber has suffered (1) injury-in-fact (2) traceable to the Merger
Order (3) that could be redressed by vacating and remanding
the Merger Order. See Tel. & Data Sys., Inc. v. FCC, 19
F.3d 42, 46 (D.C. Cir. 1994). It is enough if just one member
of the groups has standing. City of Waukesha v. EPA, 320
F.3d 228, 235-37 (D.C. Cir. 2003) (per curiam); Nat’l Lime
Ass’n v. EPA, 233 F.3d 625, 636 (D.C. Cir. 2000).
To establish standing, the Consumer Federation of America
submitted a short affidavit from its research director (and
member), Mark Cooper.3 Cooper asserts that he subscribed
to Comcast’s cable service both before and after the merger.4
He identifies two injuries he suffered as a result of the
Commission’s decision to approve the merger. The first is
that his cable rates have risen since then. While this is
certainly an injury-in-fact, the consumer groups make no
attempt to show how this injury can be traced to the merger
or – much the same thing – how it could be redressed by
undoing the merger. See Tel. & Data Sys., 19 F.3d at 46.
Cooper’s affidavit also states that although he would like to
subscribe to Comcast’s high-speed internet service, he is
deterred by his inability to choose his ISP and by the fact
that Comcast could restrict his access to content. At oral
argument, the intervenors maintained that this is not an
actual injury because Cooper could obtain high-speed internet
access using technologies other than cable. But the inability
of consumers to buy a desired product may constitute injury-
in-fact ‘‘even if they could ameliorate the injury by purchasing
3 The Consumer Federation also claims that its Motion to Provide
Information, which was supported by a verifying affidavit, contains
sufficient facts to establish standing. We think not. The Motion
does not mention any actual injuries suffered by particular Consum-
er Federation members.
4AT&T Comcast Corp., the entity created by the AT&T-Comcast
merger, has since been renamed Comcast Corp.
6
some alternative product.’’ Cmty. Nutrition Inst. v. Block,
698 F.2d 1239, 1247 (D.C. Cir. 1983), rev’d on other grounds,
467 U.S. 340 (1984). We therefore believe Cooper satisfies
the first part of the standing inquiry.
This injury to Cooper may also be fairly traced to the
Commission’s order. When an agency order permits a third-
party to engage in conduct that allegedly injures a person,
the person has satisfied the causation aspect of the standing
analysis. America’s Cmty. Bankers v. FDIC, 200 F.3d 822,
827-28 (D.C. Cir. 2000); Animal Legal Def. Fund v. Glick-
man, 154 F.3d 426, 440-43 (D.C. Cir. 1998) (en banc). The
Consumer Federation had requested the Commission to con-
dition the merger on a commitment from AT&T Comcast to
allow unaffiliated ISPs access to its cable system and to
refrain from interfering with content. In rejecting these
demands, the Commission’s order permitted the practices to
exist. This is enough to attribute Comcast’s conduct to the
Commission for standing purposes. It follows that the injury
is also redressable. On remand, the Commission could adopt
the Consumer Federation’s position and force Comcast to
change its practices. Although remand would not entitle
Cooper to such relief, it ‘‘would constitute a ‘necessary first
step.’ ’’ Tel. & Data Sys., 19 F.3d at 47 (quoting Hazardous
Waste Treatment Council v. EPA, 861 F.2d 270, 273 (D.C.
Cir. 1988)). Since Cooper therefore has standing to challenge
the Merger Order, so does the Consumer Federation.
III.
As to the merits, the consumer groups argue that the
Commission could not have properly completed its public
interest review without first examining the AOL ISP Agree-
ment. Their theory focuses on the allegation that several
terms in the Agreement are unfavorable to AOL – particular-
ly the restriction on streaming video. According to the
groups, the fact that AOL agreed to these terms demon-
strates that AT&T Comcast would have substantial market
power in the residential broadband market and that it is
likely to use that power to interfere with users’ access to
7
content. Therefore, the Commission should not have ap-
proved the license transfers without taking this danger into
account, and it could not fully evaluate the danger without
examining the AOL ISP Agreement.
As the Commission points out, both the access of unaffiliat-
ed ISPs to cable systems and the power of cable companies to
restrict content are industry-wide problems not specific to
this merger. The Commission has initiated a rulemaking
proceeding to deal with these issues on an industry-wide
basis. See In re Inquiry Concerning High-Speed Access to
the Internet over Cable and Other Facilities, 17 F.C.C.R.
4798 (2002). The Commission’s decision not to address them
in this particular case is consistent with its broad discretion to
choose between rulemaking and adjudication. See Chisholm
v. FCC, 538 F.2d 349, 365 (D.C. Cir. 1976). In SBC Commu-
nications, Inc. v. FCC, 56 F.3d 1484, 1491 (D.C. Cir. 1995), we
approved as ‘‘entirely reasonable’’ a similar Commission deci-
sion to address industry-wide issues in a separate proceeding,
rather than during the review of an individual merger.
The consumer groups counter that the Commission acted
inconsistently with its decision in the AT&T-MediaOne merg-
er. See In re Applications for Consent to the Transfer of
Control of Licenses and Section 214 Authorizations from
MediaOne, Inc., to AT&T Corp., 15 F.C.C.R. 9816 (2000).
Although the Commission there indicated it would have disap-
proved the merger if AT&T had not agreed to negotiate
access agreements with unaffiliated ISPs, see id. at 9866-67,
MediaOne is distinguishable from this case, for reasons the
Commission stated. At the time of the MediaOne merger,
ISPs wholly or partially controlled by AT&T and MediaOne
had exclusive relationships with several of the nation’s largest
cable systems. Id. at 9826-27. Thus, that merger may have
threatened the viability of other, unaffiliated ISPs. Here, the
merging parties have negotiated nonexclusive agreements
with numerous independent ISPs, including AOL. Merger
Order, 17 F.C.C.R. at 23,296-97.
Of course, the consumer groups have the right to try to
persuade the Commission to change its policy and condition
8
the merger on open access for unaffiliated ISPs. If they
needed the AOL ISP Agreement to make that argument,
perhaps the Commission would have erred in excluding it.
But the groups’ Petition to Deny fully explicated the case for
open access without ever referring to the AOL ISP Agree-
ment, let alone indicating that its exclusion hampered their
ability to make their case. In fact, at oral argument, the
groups could not point to one argument that the Commis-
sion’s decision to exclude the Agreement prevented them
from making. Similarly, the Commission rejected the groups’
arguments without regard to the contents of the AOL ISP
Agreement. Thus, the decision to exclude the Agreement
from the record could not have affected the outcome of the
proceeding. It was at worst harmless error. See E. Car-
olinas Broad. Co. v. FCC, 762 F.2d 95, 104 (D.C. Cir. 1985).
The consumer groups also claim that numerous procedural
errors infected the Commission’s decision to exclude the
Agreement from the record. Since we uphold the Commis-
sion’s decision to disregard the Agreement, the mere place-
ment of the Agreement in the administrative record could not
have changed the outcome of this case.
Because the FCC’s action ‘‘resulted from consideration of
the relevant factors and the agency has not succumbed to a
clear error of judgment, its decision must be upheld.’’ SBC
Communications, 56 F.3d at 1490 (citations and quotation
marks omitted). The petition for review is dismissed, and
Commission’s decision to approve the license transfers is
affirmed.
So ordered.