Cite as: 508 U. S. 307 (1993)
Opinion of the Court
the SMATV system on his property. He would also have an incentive to guard the interests of his tenants. Thus, there could be less need to establish regulatory safeguards for subscribers in commonly owned complexes. Respondents acknowledge such possibilities, see id., at 44, and we certainly cannot say that these assumptions would be irrational.8
There is a second conceivable basis for the statutory distinction. Suppose competing SMATV operators wish to sell video programming to subscribers in a group of contiguous buildings, such as a single city block, which can be interconnected by wire without crossing a public right-of-way. If all the buildings belong to one owner or are commonly managed, that owner or manager could freely negotiate a deal for all subscribers on a competitive basis. But if the buildings are separately owned and managed, the first SMATV operator who gains a foothold by signing a contract and installing a satellite dish and associated transmission equipment on one of the buildings would enjoy a powerful cost advantage in competing for the remaining subscribers: He could connect
8 According to respondents, the FCC's pre-Cable Act common-ownership exemption provides no support for the rationality of § 602(7)(B) for another reason. They assert that the regulatory exemption's sole purpose was to exempt master antenna television (MATV) facilities—ordinary rooftop antenna facilities that receive conventional broadcast signals for transmission by wire to units within a single multiunit building or complex, see 294 U. S. App. D. C., at 379-380, 959 F. 2d, at 977-978. Respondents argue that this prior exemption merely reflected the FCC's judgment that common antennas, unlike SMATV systems, were nothing more than residential amenities posing no threat to broadcast services. See Brief for Respondents 23-25. This argument is unavailing, because Congress is not bound by the administrative derivation of the "private cable" exemption. Moreover, regardless of the origin of the exemption, the Commission had already applied it to SMATV facilities before passage of the Cable Act. See In re Earth Satellite Communications, Inc., 95 F. C. C. 2d 1223, 1224, n. 3 (1983), aff'd sub nom. New York State Comm'n on Cable Television v. FCC, 242 U. S. App. D. C. 126, 749 F. 2d 804 (1984). Indeed, in these proceedings, the Commission construed § 602(7) to apply equally to SMATV and MATV facilities. See 5 F. C. C. Rcd., at 7639-7641.
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