Document ID: A:\CFLORIDA.TXT CENTRAL FLORIDA ENTERPRISES, INC., APPELLANT v. FEDERAL COMMUNICATIONS COMMISSION, APPELLEE, COWLES BROADCASTING, INC. and COWLES COMMUNICATIONS, INC., INTERVENORS; NATIONAL BLACK MEDIA COALITION, ET AL., APPELLANTS v. FEDERAL COMMUNICATIONS COMMISSION, APPELLEE, COWLES BROADCASTING, INC., COWLES COMMUNICATIONS, INC., and CENTRAL FLORIDA ENTERPRISES, INC., INTERVENORS Nos. 81-1795, 81-1796 UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT 683 F.2d 503; 51 Rad. Reg. 2d (P & F) 1405 April 28, 1982, Argued July 13, 1982, Decided PRIOR HISTORY: Appeal from an Order of the Federal Communications Commission. DISPOSITION: Affirmed. COUNSEL: Joseph F. Hennessey with whom Mary C. Albert and Lee G. Lovett were on the brief, Jeffrey H. Olson for Appellants, National Black Media Coalition, et al., in No. 81-1796 Daniel M. Armstrong, Associate General Counsel, Federal Communications Commission, with Robert A. Marmet with whom Harold K. McCombs, Jr. was on the brief, for Intervenors, Co Henry Geller was on the brief, for Amicus Curiae, Henry Geller, urging reversal. Earle K. Moore and Donna A. Demac were on the brief, for Amicus Curiae, Office of Commu JUDGES: Robinson, Chief Judge, Wilkey, Circuit Judge, and Flannery, * District Judge for t * Sitting by designation pursuant to 28 U.S.C. @ 292(a) (1976). OPINIONBY: WILKEY OPINION: [*504] WILKEY, Circuit Judge: This case involves a license renewal proceeding for a television station. The appeal ses v. FCC (Central Florida I) n2 vacated the Commission's earlier orders involving the pr nadequate, and that its method of balancing the factors for and against renewal was faulty d a new policy for comparative renewal proceedings which meets the criteria we set out in - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n1 Cowles Broadcasting, Inc., 86 F.C.C.2d 993 (1981). The proceedings prior to this new d remanded sub nom. Central Fla. Enters. v. FCC, 194 U.S. App. D.C. 118, 598 F.2d 37 (D. n2 194 U.S. App. D.C. 118, 598 F.2d 37 (D.C. Cir. 1978), cert. dismissed, 441 U.S. 957 n3 National Black Media Coalition (NMBC), et al., challenge the Commission's denial of nding since it raises no issues not raised by Central that would affect the disposition of - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - The factual background and legal issues involved in this case were discussed at length erate on Channel 2 in Daytona Beach, Florida. In reaching a renewal/nonrenewal decision, t ntially cutting against Cowles: its illegal move of its main studio, the involvement of se n the other hand, Cowles' past performance record was "superior," i.e., "sound, favorable - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n4 62 F.C.C.2d at 955. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - In its decision appealed in Central Florida I the FCC concluded that the reasons underc as renewed. Our reversal was rooted in a twofold finding. First, the Commission had inadeq ast record was never "even vaguely described" n6 and, indeed, "the Commission's handling o rement" n7 of the Communications Act. n8 We remand with instructions to the FCC to cure th - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n5 Id. at 958. n6 598 F.2d at 50. n7 Id. at 51. n8 47 U.S.C. @ 309(e) (1976). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - On remand the Commission has followed our directives and corrected, point by point, the d an advantage for Central Florida, and on only one (the mail fraud issue) did it conclude - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n9 See pp. 10-13 for a discussion of the Commission's factfinding on these issues. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - We are left, then, with evaluating the way in which the FCC weighed Cowles' main studio most difficult and important issue in this case, for the new weighing process which the FC , and discuss what we understand and expect it to entail. n10 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n10 As we said in Central Florida I, "This may well be a typical comparative renewal ca - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - For some time now the FCC has had to wrestle with the problem of how it can factor in s umbent's probable future performance versus the challenger's. As we stated in Central Flor by the Supreme Court in FCC v. National Citizens Committee for Broadcasting (NCCB) n13 and ral Florida I also indicated that the FCC has in the past impermissibly raised renewal exp - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n11 See Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 333, 90 L. Ed. 108, 66 S. Ct. 148 ( 29 L. Ed. 2d 701 (1971); Citizens Communications Center v. FCC, 145 U.S. App. D.C. 32, 44 n12 598 F.2d at 55. See also FCC v. Nat'l Citizens Comm. for Broadcasting, 436 U.S. 775 n13 436 U.S. 775, 782, 782-83 n.5, 805-07, 98 S. Ct. 2096, 56 L. Ed. 2d 697 (1978). n14 145 U.S. App. D.C. 32, 447 F.2d 1201, 1213 and n.35 (D.C. Cir. 1971), clarificatio n15 598 F.2d at 60. See also Greater Boston Television Corp. v. FCC, 444 F.2d 841, 854 D.C. Cir.), cert. denied, 423 U.S. 926, 96 S. Ct. 271, 46 L. Ed. 2d 253 (1975). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - We believe that the formulation by the FCC in its latest decision, however, is a permis al expectancy is to be a factor weighed with all the other factors, and the better the pas In our view [states the FCC], the strength of the expectancy depends on the merit of the p against [the] other factors . . . . An incumbent performing in a superior manner would re [*507] This is to be contrasted with Commission's 1965 Policy Statement on Comparative B - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n16 86 F.C.C.2d at 1012. The continuum approach adopted seems foreshadowed by Citizens. We note that there is some confusion between the Commission's pleadings and the Commiss e.g., Brief for the FCC at 8, 14-15, 27 with 86 F.C.C.2d at 1012-13, 1015-18. An analysis not, be critical. See also note 31 infra. The merit or lack of merit in the incumbent's r the public interest. Nothing is removed from the scales until the balance is struck. Agai n17 1 F.C.C.2d 393 (1965). We stated in Central Florida I, 598 F.2d at 56, that the "Co fording a thorough and intelligible comparison." For the reasons stated in this opinion, w n18 86 F.C.C.2d at 1012 n.91. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - If a stricter standard is desired by Congress, it must enact it. We cannot: the new sta The reasons given by the Commission for factoring in some degree of renewal expectancy The justification for a renewal expectancy is three-fold. (1) There is no guarantee tha might even deprive the community of an acceptable service and replace it with an inferior ion as a "competitive spur" to licensees if their dedication to the community is not rewar ering the large number of group owners. We cannot readily conclude that such a restructuri We are relying, then, on the FCC's commitment that renewal expectancy will be factored in eme Court has said, "It is the right of the viewers and listeners, not the right of the br ition but to protect the public." n22 Then Circuit Judge Burger, as a member of this court A broadcaster seeks and is granted the free and exclusive use of a limited and valuable pa st industry does not seem to have grasped the simple fact that a broadcast license is a pu [*508] As we concluded in Central Florida I, "the only legitimate fear which should move - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n19 Id. at 1013 (emphasis added). Note that each of these factors was cited by the Supr n20 This parallels, for instance, the ICC's mandate. See, e.g., May Trucking Co. v. Uni ed monopolies for those who profess to serve the public" (footnote omitted).) Our antitrus 78). n21 Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 390, 23 L. Ed. 2d 371, 89 S. Ct. 17 n22 FCC v. Sanders Bros. Radio Station, 309 U.S. 470, 475, 84 L. Ed. 869, 60 S. Ct. 693 n23 Office of Communication of the United Church of Christ v. FCC, 123 U.S. App. D.C. 3 n24 598 F.2d at 61-62. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - There is a danger, of course, that the FCC's new approach could still degenerate into p f the Commission's decision gives us hope that if the FCC applies the standard in the same articular importance will be the definition and level of service it assigns to "substantia - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n25 Central Florida I, 598 F.2d at 50. n26 Id. at 59. n27 Id. at 50 (quoting earlier proceeding, 60 F.C.C.2d 372, 422 (1976)). We think it wo rage, not far above average, above mediocre, more than minimal, solid, sound, favorable, n ecially interested to know what the standard of comparison is in each case. "Average" comp , but the use of imprecise terms needlessly compounds our difficulty in evaluating what th r, the FCC's decisionmaking may again be adjudged "opaque to judicial review." - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - In this case, however, the Commission was painstaking and explicit in its balancing. Th ating Cowles' "local community orientation" and "responsive[ness] to community needs," dis Seven community leaders and three public officials testified that [Cowles] had made outsta " was in fact "'substantial,' i.e., 'sound, favorable and substantially above a level of m - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n28 86 F.C.C.2d at 1006-08 (quoting earlier proceeding, 62 F.C.C.2d at 955-56). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - The Commission's inquiry in this case did not end with Cowles' record, but continued wi gration and diversification disadvantages of [*509] Cowles and conceded that Central h rtance in a new license proceeding -- should have lesser weight compared with the preferen e a more meaningful basis for preferring an untested challenger over a proven incumbent." Cowles did not actually move a studio away from Daytona Beach. It maintained two studios, ission rules or disserve the community of license. n33 The FCC concluded that "the risk to the public interest posed by the violation seems small - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n29 The Commission concluded on the mail fraud issue that the subsidiaries involved in The broadcast facilities were not used to promote mail fraud and there was no integration the [former] do not portend Cowles' likely future performance as a broadcast licensee. T 86 F.C.C.2d at 1002 (emphasis added). The Commission also found that there was no basis to had not been curtailed in any significant way, id. at 998-1004 -- two other reservations w n30 86 F.C.C.2d at 1009-10. n31 Id. at 1015. The Supreme Court upheld a similar decision by the FCC to weigh divers y factor." Id. at 809. See also Citizens, 447 F.2d at 1208-09 n.23. The FCC argues that diversification and integration should not be given "heavy weight i estructuring of the industry with possible disruptions of service" and a loss of "incentiv Here we have a caveat. We do not read the Commission's new policy as ignoring integrati tweigh in the comparative renewal context a challenging applicant's advantages under the s ere are weights on the scales other than a meritorious record on the one hand, and integra ip the balance if weighed with something else. See Citizens, 447 F.2d at 1208-09 n.23. That, of course, is precisely the situation here, since the main studio move violation m as it goes along. It must weigh them all simultaneously. See note 16 supra. We are convi , e.g., 86 F.C.C.2d at 1018. Thus the Commission's conclusion that diversification and int ors will vary, depending on how much or how little diversification or integration is at st C.C.2d at 1009-10. n32 866 F.C.C.2d at 1017. n33 Id. at 1005-06 (emphasis added). See also id. at 1017. n34 Id. at 1017. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Having listed the relevant factors and assigned them weights, the Commission concluded ally above a level of mediocre service,'" n35 the combination of Cowles' main studio rule mmission's weighing did not, and will not, amount to automatic renewal for incumbents. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n35 Id. at 1006 (quoting earlier proceeding, 62 F.C.C.2d at 955-56). n36 Id. at 1018. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [*510] We are somewhat reassured by a recent FCC decision granting, for the first tim licensee. n38 In that decision the Commission found that the incumbent deserved no renewal on the diversification and integration factors which were overcome (there, by the challeng ihood of future service in the public interest." Further, it found that the incumbent had - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n37 Letter of Daniel M. Armstrong, FCC Associate General Counsel, to George A. Fisher, n38 In re Applications of Simon Geller and Grandbanke Corp., 90 F.C.C.2d 250, FCC Docke rating that the Commission's new approach may prove to be more than a paper tiger. n39 Id. at 15, 20-21 (emphasis added). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - We have, however, an important caveat. In the Commission's weighing of factors the scal intent of Congress, which is to say the interests of the listening public. All other doctr l would not undermine renewal expectancy in a way harmful to the public interest, then ren - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n40 Thus, the three justifications given by the Commission for renewal expectancy, p. 8 o chant "renewal expectancy" and grant the license. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Finally, we must note that we are still troubled by the fact that the record remains th ffled, to learn that even the worst television stations -- those which are, presumably, th see should fail in a comparative renewal challenge, but the FCC has never discovered such - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n41 See Letter of Daniel M. Armstrong, supra note 37; Central Florida I, 598 F.2d at 61 n42 Counsel for the FCC conceded at oral argument, "I grant you, [competitors] wouldn't ompeting applicants file against only the ne'er-do-wells of the industry." 86 F.C.C.2d at - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - We hope that the standard now embraced by the FCC will result in the protection of the cordingly the Commission's decision is Affirmed.