For the reasons that follow, I must respectfully dissent from this Order adopting a "resolution" of cable programming service tier ("CPST") rate complaints against C-TEC Corporation.

First, I do not believe that the Commission possesses statutory authority to resolve CPST rate complaints by way of this sort of negotiated global settlement. It is true, as the Commission has observed in similar items, that section 4(i) of the Communications Act states that the Commission may "issue such orders, not inconsistent with this Act, as may be necessary in the execution of its functions," and that section 4(j) authorizes the Commission to "conduct its proceedings in such a manner as will best conduce to the proper dispatch of business and to the ends of justice." 47 U.S.C. sections 154(i)-(j).

But the Communications Act includes another provision -- one that, unlike sections 4(i) and (j), speaks directly to the proper processing of CPST complaints. Unfortunately, the Commission fails to follow the dictates of this provision, which mandates that "the Commission shall, by regulation, establish . . . fair and expeditious procedures for the . . . resolution of complaints from any franchising authority . . . alleging that a rate for cable programming" is unreasonable. 47 U.S.C. section 623(c)(1)(B)(emphasis added). The simple fact, however, is that there are no Commission regulations that even arguably provide procedures for a negotiated settlement such as this; the requirements of this section therefore have not been met.

Conversely, the regulations that the Commission has adopted to govern procedures for rate complaints, which, like the statute itself, generally contemplate individualized adjudication of complaints, see, e.g., id. section 623(c)(1)(A); 47 CFR section 76.957,⁽¹⁾ have clearly not been observed here. The Commission's noncompliance with these regulations raises its own separate set of potential legal problems. See generally Service v. Dulles, 354 U.S.363, 388 (1957) (administrative agencies must follow their own regulations).

In sum, given the existence of section 623, I simply do not understand how the use of this mechanism could comport with the Communications Act. Absent conformity with duly promulgated regulations providing for the use of this procedure, this resolution violates section 623.

The existence of section 623 also renders inapposite the caselaw often cited by the Commission in support of its position that these global settlements are proper. To be sure, courts have held that agencies generally possess broad discretion to choose between administrative processes. But none of those cases involve, as here, an agency's failure to conform with statutorily-prescribed limitations on that discretion. Cf. Heckler v. Chaney, 470 U.S. 821, 833 (1985) (presumption against unreviewability of agency non-enforcement decisions rebutted where "the substantive statute has provided guidelines for the agency to follow"). Indeed, the decisions typically cited by the Commission are expressly premised on the lack of any statutory language precluding the agency's choice of processes. See, e.g., In re Permian Rate Basin Area Rate Cases, 390 U.S. 747, 797 (1968) (stating, in affirming the Federal Power Commission's two-price rate structure for regulation of gas prices, that "[w]e find no objection under the Natural Gas Act to this dual arrangement" and that "[n]othing in the purposes or history of the Act forbids the Commission to require different prices for different sales").

I understand the argument from utility for this sort of creative processing mechanism. If the Commission believes that rate "resolutions" are procedurally necessary, however, section 623 requires that we establish them by regulation, with notice and comment. Pragmatic considerations are undeniably important, but they cannot overcome the clear letter of the law. Our paramount duty is to implement the law as written by Congress and enacted by the President -- not based on our own conceptions of the most efficient and effective way to proceed. See Chevron v. Natural Resources Defense Council, 467 U.S. 837, 842-43 (1985) (where statutory language is clear, "that is the end of the matter," for the agency "must give effect to the unambiguously expressed intent of Congress").⁽²⁾

Second, I do not believe that this Order satisfies the Commission's obligation under the Administrative Procedure Act to engage in reasoned decisionmaking. Cf. Koch Gateway Pipeline Co. v. FERC, 136 F.3d 810, 814 (D.C. Cir. 1998)("reasoned decisionmaking" requires "a process demonstrating the connection between the facts found and the choice made"). In this Order, there is no explanation as to how the Commission arrived at the refund amounts that it today mandates. There is no suggestion that any of the mandatory factors set out in the statute, see 47 USC section 623(c)(2)(A)-(F), or the objective criteria in our regulations, see 47 CFR section 76.922, for measuring the reasonableness of rates were either considered or applied. Why do New York subscribers receive a refund of $3.30, whereas New Jersey subscribers receive $5.00? Why do subscribers within a State, but in different franchise areas, receive an identical refund? Nothing in the Order accounts for the choice of the relevant dollar figures.

Rather, the Order simply asserts that certain rates were in excess of maximum permitted rates but that the overcharges were offset by other, lower rates.⁽³⁾ This is not an explanation, just a conclusory statement. The Order provides no explanation of the findings upon which the conclusion is supposedly based:why the maximum permitted rates were reasonable under the Commission's rules; the amount of the overcharges; the duration of the overcharges; the amount of the basic service tier undercharges; the duration of the undercharges; or the final difference between the over and undercharges. The Order also states that offsets were computed on a system basis. But there is no discussion of what the offsets for each system are and why, notwithstanding the asserted system-by-system computation, the refunds are uniform throughout States. In short, this Order does not provide a sufficiently reasoned or detailed explanation of the rate methodology employed by the Commission.

This lack of explanation as to methodology, as well as the uniformity of the refunds across franchise areas, causes me to suspect that the number at which the Commission and the cable operator have arrived has little do with actual rate analysis but more to do with simple horse-trading. And due to this lack of explanation of the methodology or factors employed to calculate the refund, there is no way for the local franchise authority or the subscriber who specifically requested an explanation of the basis for the refunds to know whether they have been given a fair deal or even what the terms of that deal are, much less for a court to review the rationality of the refund determination.

Third, I am deeply concerned that the actual complainants were not party to the negotiations that produced this "resolution." As I have made clear in other contexts, I believe that it is most unseemly, if not illegal, when regulated entities and regulators go behind closed doors to hammer out settlements. See, e.g., Third Order on Reconsideration, Revision of Universal Service Collection Amounts for 1998, FCC No. 97-411 (Dec. 16, 1997). I realize that the complainants were given the chance to comment on the final agreement reached by the Commission and the cable company, but this participation came at the eleventh hour, after the essential terms of the resolution were already finalized as between the company and the Commission. And the responses to the complainants' comments are, as described above, not particularly satisifying.

It is true that the local franchising authorities and other complainants were not deprived of any participation they would have been afforded in a traditional cable rate adjudication. But that is not the point: under a traditional proceeding, municipalities may not have been able to participate beyond the point of submitting their complaint, but neither would the cable operator have been able to participate beyond the point of submitting their response. The problem is not that the complainants did not get additional participation per se but that the cable operator was afforded greater participation rights than they were. Whether or not this amounts to a violation of our ex parte rules, a process in which the heart of the negotiations are conducted without the participation of the complainants themselves is just not a fair process.

Finally, in the context of these rate resolutions, the Commission has often purported to bind even those complaining parties who vigorously object to the terms of the resolution. It is a fundamental, however, that settlements require the consent, whether on an opt-in or opt-out basis, of all the parties in interest. If, in response to this order, franchising authorities or other complainants object to its terms and conditions, I have difficulty seeing how, as a matter of black letter settlement law, they could be bound by this "resolution."

I appreciate that these "resolutions" are efficient in that they dispose of large numbers of complaints in one fell swoop. The Commission saves itself a lot of time-consuming work, and the cable operator saves itself a lot of regulatory headaches and uncertainty. But it is the municipalities and the ratepayers they represent, who were not a party to the negotiations that produced this resolution, that seem to be getting the short end of this regulatory stick. However convenient global rate resolutions might be for the Commission and for cable companies, they do not appear to be within the bounds of governing law. The policies of "finality" and "stability"⁽⁴⁾ cannot overcome the provisions of the Communications Act, black-letter contract law, or the "reasoned decisionmaking" requirement of the Administrative Procedure Act. I therefore cannot sanction the use of this procedure or the resultant Order.

In closing, I observe that the administrative burdens that drove the Commission to employ this creative but unlawful method of resolving consumer complaints are the sorry and inevitable by-product of rate regulation itself. The better method for avoiding the administrative disaster that would be occasioned by individualized adjudication of these backlogged complaints is simply to abolish rate regulation. That is, in part, precisely what Congress wisely recognized when it mandated that CPST regulation cease after March 31, 1999. Fortunately, that time has now come.