Document ID: A:\CITIZENS.TXT CITIZENS COMMUNICATIONS CENTER et al., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents. HAMPTON ROADS TELEVISION CORPORATION and Community Broadcasting of Boston, Inc., Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents WTAR Radio-TV Corporation, RKO General, Inc. (RKO) and Dudley Station Corporation, Intervenors. CITIZENS COMMUNICATIONS CENTER et al., Appellants, v. Honorable Dean BURCH, Chairman, Federal Communications Commission, et al. Nos. 24471, 24491, 24221 UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT 447 F.2d 1201; 145 U.S. App. D.C. 32 March 15, 1971, Argued June 11, 1971, Decided JUDGES: Wright, MacKinnon and Wilkey, Circuit Judges. OPINIONBY: WRIGHT OPINION: [*1202] J. SKELLY WRIGHT, Circuit Judge: Appellants and petitioners n1 in these consolidated cases n2 challenge the legality of n January 15, 1970, and by its terms made applicable to pending proceedings. Briefly stat ant, the incumbent shall obtain a controlling preference by demonstrating substantial past are to be dismissed without a hearing on their own merits. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n1 Hereinafter "petitioners." n2 Case No. 24,471 is brought by the Citizens Communications Center (CCC) and Black Eff adcast media to their local communities, of improving the position of minority groups in m eedings before the Commission and in other appeals in this court from Commission rulings. arings Involving Regular Renewal Applicants, 22 F.C.C.2d 424 (1970); (2) a memorandum opin 1 F.C.C.2d 355 (1970); and (3) a memorandum opinion and order denying reconsideration of t Case No. 24,491 is a petition for review filed by Hampton Roads Television Corporation U.S.C. @ 402(a) and 28 U.S.C. @ 2342 of the Commission's memorandum opinion and order deny Case No. 24,221 is an appeal filed pursuant to 28 U.S.C. @ 1291 from an order of the Un tion. In their complaint filed January 7, 1970, CCC and BEST sought to enjoin the chairma t license renewal proceedings without first giving all interested parties notice and an op a suggestion of lack of jurisdiction made by the Commission, the District Court on Januar RKO General, Inc. and WTAR Radio TV Corporation have both intervened in this controvers n3 The Policy Statement declares: "* * * Promotion of [the public interest], with respect to competing challenges to renewal there can be a challenge, and indeed, where the public interest so requires, that the new * * * "We believe that these two considerations call for the following policy -- namely, that lly attuned to meeting the needs and interests of its area, and that the operation of the eration is not based merely upon promises to serve solidly the public interest. He has do hich also contribute vitally to that basic purpose, call for renewal." 22 F.C.C.2d at 424-425. (Footnote omitted.) - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Petitioners contend that this policy is unlawful under Section 309(e) of the Communicat also attacked by petitioners on grounds that it was adopted in disregard of the Administra - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n4 47 U.S.C. @ 309. Section 309 was amended in 1952, 1960 and 1964. As summarized in a mber 1970 (hereinafter cited as Staff Study), "The Act's Legislative History reveals that ision from subsection (a) to subsection (b). The 1960 amendment moved it to subsection (e "If, in the case of any application to which subsection (a) of this section applies, * r reasons then obtaining * * *. Any hearing subsequently held upon such application shall Subsection (a) of @ 309 reads: "Subject to the provisions of this section, the Commission shall determine, in the case of such application, and, if the Commission, upon examination of such application and upo nting thereof, it shall grant such application." - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Respondents urge the court to refrain from considering these arguments at this time bec wful exercise of the Commission's authority. We find that the judicial review sought by petitioners is appropriate at this time. Wi rpreted by both the Supreme Court and this court. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n5 Petitioners' complaint charging a violation of the APA is based on the Commission's agency more aware of the wishes of the public on whose behalf it must regulate. Although ithout first holding a public hearing, a serious question does arise as to the propriety o In order to avoid conflict with Ashbacker Radio Corp. v. F.C.C., 326 U.S. 327, 66 S. Ct antive. Then, caught between Scylla and Charybdis, the Commission turns around and calls edures (notification, opportunity to file comments, etc.) in all cases of administrative " future effect designed to implement, interpret, or prescribe law or policy or describing t tive rules, general statements of policy, or rules of agency organization, procedure, or p ve to be developed under the procedural safeguards described in @ 4. As was said in Colum ommission which dictates the procedures to be followed, but rather "the substance of what ge in the Commission's comparative renewal standards. And the Commission seems to have de "reimbursed Voice of Los Angeles, Inc., for costs incurred during the initial portions of ed surprise to Voice, and that given the change in policy it would be inequitable not to p In Re Petitions Filed by BEST, CCC, and Others for Rulemaking To Clarify Standards in all e APA it can do without notice and hearing in a policy statement what Congress failed to d - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - I Petitioners argue that the 1970 Policy Statement is "final" in the primary sense of the ion is that neither the Policy Statement nor the order denying the petitions for reconside s to be applied in future adjudicatory proceedings where applicable. We find it unnecessa olicy Statement is alleged to deprive petitioners in No. 24,491 of their statutory right t Inc. v. Waterman Steamship Corp., 333 U.S. 103, 113, 68 S. Ct. 431, 92 L. Ed. 568 (1948); Commission adopts a procedure which precludes a true comparative hearing of conflicting a 8 F.2d 660, 666 (1958). Petitioners contend that the same line of cases holding an interlocutory order denying the contemplated hearing. Without deciding whether this proposition holds in every case, ). According to the Supreme Court in Abbott Laboratories, the ripeness of a controversy de The Policy Statement controversy is ripe under both halves of this test. Here the Policy nies a competing applicant the full comparative hearing to which he is entitled is strictl e) and Ashbacker. Likewise, the other issues raised by petitioners and enumerated in the - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n6 As this court stated in Environmental Defense Fund, Inc. v. Hardin, 138 U.S.App.D.C. before the administrative action has been fully considered, and before the legal dispute - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Moreove ampton Roads and Community Broadcasting will have been put if review of their alleged deni 7 U.S. at 153-154, 87 S. Ct. 1507; City of Chicago v. Atchison, Topeka & Santa Fe R. Co., renewal challenges generally. By depriving competing applicants of their right to a full of processing a competing application prohibitive when measured by the challengers' very pplication for a television renewal in over a year n9 is perhaps the most compelling facto - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n7 The expense of preparing and presenting an application is substantial, rising to as n8 See 3 K. Davis, Administrative Law Treatise @@ 22.01 and 22.03 (1958). n9 See text at page 1214, infra. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - II In order to clarify not only the legal issues but also the related substantive policy c mprehensive regulation of broadcasting began in 1927 with the Federal Radio Act. n10 This ved." n11 To achieve this purpose the Act provided for expiration of licenses, and consequ ce, or necessity," n13 which was defined by the Federal Radio Commission in 1928 as "a matter of comparative and not an absolute standard when applied to broadcasting station [*1207] from among the applicants before it which of them will, if licensed, best serve - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n10 44 Stat. 1162. The Radio Act of 1927, with its several amendments, was later inclu . 134, 137, 60 S. Ct. 437, 84 L. Ed. 656 (1940), the objectives of governmental regulation n11 67 Cong.Rec. 5479 (1926) (Representative White, House floor manager). n12 Federal Radio Act, @ 9, 44 Stat. 1166 (1926). n13 Id. @@ 9, 11, 44 Stat. 1166, 1167. The applicability of the public interest, conve "but action of the Commission with reference to the granting of such application for the r 48 Stat. 1084 (1934). Perhaps to guard against the inference that an incumbent's past bro practice" as original applications, substituting the provision of the 1927 Act which subje n14 Federal Radio Commission, Second Annual Report to Congress 169 (October 1, 1928). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Although the Federal Communications Act does not itself establish any specific licensin have governed the application of the standard of 'public interest, convenience, or necess er World War II, the Commission was under heavy pressure to develop specific criteria for e hearing decisions and were reviewed and given final statement in the Commission's 1965 P who will provide the "best practicable service to the public" and who will insure the "ma the public are listed as full -time participation in station operation by owners, propose e 1965 Policy Statement to a factor of primary significance; and in an effort to resolve t e Commission states that it will not consider a past broadcast record which is "within the e average performance is expected of all licensees. Although the 1965 Policy Statement explicitly refrains from reaching the "somewhat diff as an initial applicant. Under the 1952 amendment to the Act, both initial and renewal ap s nothing about a presumption in favor of incumbent licensees at renewal hearings; nor is dio Commission often refused to renew licenses. n16 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n15 1 F.C.C.2d at 393 n. 1. But see Note 23, infra. n16 Under the Radio Act, 150 AM broadcasters out of the 732 operating prior to 1927 sur broadcasters and the concomitant electrical interference. See H. Levin, Broadcast Regulat - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Nonetheless, the history of Commission decision and of the decisions of this court refl tatement that there was no rational or legal basis for its purported nonapplicability to c st n19 and Wabash Valley n20 cases. These two cases, which began with the unassailable pre at their actual effect was to give the incumbent a virtually insuperable advantage on the e unavoidable uncertainty whether the challenger would be able to carry out its program pr t an incumbent must make a showing of superior service and must have some preference on ot - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n17 For criticism of the Commission's "rubber stamp" policy on renewals prior to its de Greater Boston Television Corp. v. F.C.C. [WHDH], 143 U.S.App.D.C. 383, 444 F.2d 841 (1970 to group renewal granted to broadcasters in Iowa and Missouri, 11 F.C.C.2d 810 (1968). In Chicago Federation of Labor v. Federal Radio Com'n, 59 App.D.C. 333, 41 F.2d 422 (19 court said: "It is not consistent with true public convenience, interest, or necessity, that merito . * * *" 50 App.D.C. at 334, 41 F.2d at 423. Cases such as this one established a presumption in fa a licensee expressly waive any claim to use of a frequency predicated on prior use, 47 U. levision Law 720 (1949). See also Journal Co. v. F.R.C., 60 App.D.C. 92, 48 F.2d 461 (1931 re the Commission's WHDH decision, this circuit has begun to take a hard look at the presu n18 1 F.C.C.2d at 403. n19 Hearst Radio, Inc. (WBAL), 15 F.C.C. 1149 (1951). n20 Wabash Valley Broadcasting Corp. (WTHI-TV), 35 F.C.C. 677 (1963). - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Then, in the very controversial WHDH n21 case, the Commission for the first time in its arst and Wabash Valley, in practical if not theoretical terms, the Commission stated its i ." n22 Finding that because the incumbent's programming service had been "within the bound n awarded the license to one of the challengers. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n21 See Note 17, supra. n22 16 F.C.C.2d at 10. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - The WHDH decision became the immediate subject of fierce attack, provoking criticism fr mining large financial investments made by prominent broadcasters in reliance upon the ass broadcast [*1210] industry sought to obtain from Congress the elimination or drastic r oposed to require a two-stage hearing wherein the renewal issue would be determined prior interest, it shall grant renewal. Competing applications would be permitted to be filed o the Senate hearings by a number of citizens groups testifying, inter alia, that the bill evision programming. n26 - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n23 Despite the warning in the 1965 Policy Statement that it was not applicable to the arings (if not the weight assigned to each such criterion) would be relevant at renewal he the introduction of evidence in renewal cases and to give all parties in such cases an opp pproved the renewal of incumbent licensees, expressed a concern in two cases that a renewa 93, 349 F.2d 971 (1965), cert. denied, 382 U.S. 987, 86 S. Ct. 541, 15 L. Ed. 2d 475 (1966 Although this court affirmed the Commission's WHDH decision on the ground that WHDH was ant of a four-month temporary license to operate, we also noted: "* * * Although the 1965 Policy Statement did not purport to deal with the problems rai enewal proceedings. Seven (7) League Productions, Inc. (WIII), 1 F.C.C.2d 1597, 1598 (196 y other matters the parties asked the Commission to consider as pertaining to license fitn to be called on to put forward all the factors he deems favorable though he cannot be con 143 U.S.App.D.C. at 399, 444 F.2d at 857. The appropriateness of these decisions is underscored by explicit language in the Commu license shall be construed to create any right beyond the terms, conditions, and periods nse may be granted for "a term of not to exceed three years" (47 U.S.C. @ 307(d)); and tha ders Bros. Radio Station, 309 U.S. 470, 475, 60 S. Ct. 693, 697, 84 L. Ed. 869 (1940): "The policy of the Act is clear that no person is to have anything in the nature of a p he channels presently occupied remain free for a new assignment to another licensee in the "Plainly it is not the purpose of the Act to protect a licensee against competition but And see F.C.C. v. Pottsville Broadcasting Co., supra Note 10, 309 U.S. at 138, 60 S. Ct. 4 ral Communications Act] does not reflect the same concern for 'security of certificate' th n24 See, e. g., $3 Billion in Stations Down the Drain in BROADCASTING, February 3, 1969 n25 S. 2004, 91st Cong., 1st Sess. (1969). n26 See Hearings on S. 2004 Before the Subcommittee on Communications of the Senate Com sted that an analogous change in election laws would mean that no one could run for office For a critical scholarly analysis of S. 2004, see Comment, The Aftermath of WHDH: Regul 368, 401-402 (1970): "The Pastore Bill, in its endeavor to promote security in the broadca ailable incentive for better broadcasting." - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - The impact of such citizen opposition measurably slowed the progress of S. 2004. Then, d in favor of the Commission's "compromise." The 1970 Policy Statement retains the single se of calling attention to the incumbent's failings. n28 The Policy Statements sets forth r performance by a challenger. Only upon a refusal to renew because of the incumbent's pa bill sought to do. The Statement's test for renewal, "substantial service," seems little the test, is not significantly different from the Statement's summary judgment approach. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n27 See Note 5 supra. n28 The Commission has in effect abolished the comparative hearing mandated by @ 309(a) (d), but this section is intended to cover only those situations in which the petitioner d - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - III Superimposed full length over the preceding historical analysis of the "full hearing" r of cases in American administrative law. Ashbacker holds that under Section 309(e), where Ashbacker involved two original applications, no one has seriously suggested that its prin - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n29 See Note 4, supra. n30 The primary question in Ashbacker was whether an applicant for a construction permi tually exclusive, grants one without a hearing and sets the other for hearing. Faced with acker Radio Corporation application for hearing. The Commission took the position that at and that the Fetzer grant did not preclude the Commission, at a later date, from taking a "* * * We do not think it is enough to say that the power of the Commission to issue a or if the grant of one effectively precludes the other, the statutory right to a hearing w "* * * [The procedure adopted by the Commission] is in effect to make [Ashbacker's] hea ut certainly not its spirit or intent. * * * "* * * We only hold that where two bona fide applications are mutually exclusive the gr 326 U.S. at 330-333, 66 S. Ct. at 150. (Footnote omitted.) n31 See Note 33, infra. - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - It is not surprising, therefore, that the Commission's 1970 Policy Statement implicitly parative" hearing to a single issue -- whether the incumbent licensee had rendered "substa barring successful appeal, the renewal application must be granted. Challenging applican er the Commission had promised the challenging applicant a hearing on his application afte for honesty. It does not make any empty promises. It simply denies the competing applic s deficiencies, n32 the competing applications get no hearing at all. The proposition tha - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n32 "such as rigged quizzes, violations of the Fairness Doctrine, overcommercialization n33 Although the broadcast industry was perhaps less satisfied with the substantive res ission came to its decision was precisely the same in all three of these cases. It is tru ons. But the Commission itself concluded within the same year, and consistently with its hearings. Seven (7) League Productions, Inc. (WIII), supra Note 23. Thus, without imping comparative hearing procedure which it has followed without fail since Ashbacker and which - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - In support of its 1970 Policy Statement the Commission is reduced to reciting the usual the Commission. Brief for the Commission at 30. But Congress did not give the Commission ercise of the mandate is a nullity. Early after Ashbacker this court indicated what a "full hearing" entailed. In Johnston all relevant criteria: "A choice between two applicants involves more than the bare qualifications of each app * "* * * Comparative qualities and not mere positive characteristics must then be conside * * * "* * * The Commission cannot ignore a material difference between two applicants and ma lative determination upon an evaluation of all factors, conflicting in many cases. * * *" We, as well as the Commission, n34 have consistently applied the teaching of Johnston B 124 U.S.App.D.C. 230, 363 F.2d 717 (1966). Particularly since the 1965 Policy Statement, rogram offering, integration, diversification, past performance and any other matters the - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n34 There are several cases cited by respondents to the effect that no hearing need be lly unqualified. United States v. Storer Broadcasting Co., 351 U.S. 192, 76 S. Ct. 763, 1 estion of respondents, however, these cases in no way undercut our holding of today. Whate ad as authorizing the Commission to deny qualified applicants their statutory right to a f - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - We do not dispute, of course, that incumbent licensees should be judged primarily on th should be through. Compare WHDH, supra. At the same time, superior performance should be e the comparative showing necessary to displace an established licensee." 326 U.S. at 332, it? The Commission's 1970 Policy Statement's summary procedure would deny him that hearing - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n35 The entive, an incumbent will naturally strive to achieve a level of performance which gives h possible for an incumbent to be reasonably confident of renewal when he renders superior p venturesome in programming and other forms of public service. The Commission in rule mak t 406. Along with elimination of excessive and loud advertising and delivery of quality pr ing and listening public. We note with approval that such rule making proceedings may soo n36 Since one very significant aspect of the "public interest, convenience, and necessi extent to which the ownership of the media will be concentrated or diversified by the gran , 99 U.S.App.D.C. 195, 239 F.2d 15 (1956), cert. denied, 353 U.S. 918, 77 S. Ct. 662, 1 L. rt itself has on numerous occasions recognized the distinct connection between diversity o 20, 65 S. Ct. 1416, 89 L. Ed. 2013 (1945); Red Lion Broadcasting Co. v. F.C.C., 395 U.S. 3 stations will give time to more than one side of important and controversial issues, we r "The Commission need not be confined to the technique of exercising regulatory surveill to certify as licensees those who would speak out with fresh voice, would most naturally 143 U.S.App.D.C. at 402, 444 F.2d at 860. As new interest groups and hitherto silent minor ony of petitioners, no more than a dozen of 7,500 broadcast licenses issued are owned by r tem is being recommended or required, and while the fairness doctrine no doubt does serve f media control. Diversification is a factor properly to be weighed and balanced with oth diversification, see Bamberger Broadcasting Service, Inc., 3 Pike & Fischer R.R. 914, 925 - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - [*1214] The suggestion that the possibility of nonrenewal, however remote, might chil ute does provide for judicial review. Indeed, the failure to promote the full exercise of o authorized voice of government. Though dependent on government for its license, independ The Policy Statement purports to strike a balance between the need for "predictability be considered unless the incumbent's past performance is found not to have been "substanti ow, since the Policy Statement substantially limited a challenger's right to a full compar - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n37 The Commission's fears for the stability of the industry seem groundless in view of per cent of) television license renewals were challenged. See Staff Study, supra Note 4, n38 The recent report of the United States Commission on Civil Rights commented that th programming, nondiscriminatory employment practices, and other affirmative changes which - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Petitioners have come to this court to protest a Commission policy which violates the c he right of the viewers and listeners, not the right of the broadcasters, which is paramou egulate, to the great detriment of the listening and viewing public. - - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - - - - - - - - - n39 "By whatever name or classification, broadcasters are temporary permittees -- fiduc n40 Red Lion Broadcasting Co. v. F.C.C., supra Note 36, 395 U.S. at 390, 89 S. Ct. at 1 - - - - - - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - - Wherefore it is ORDERED: (1) that the Policy Statement, being contrary to law, shall no for reconsideration of the Policy Statement and refusing to institute rule making proceedi Policy Statement was deemed applicable to reflect this court's judgment. CONCURBY: MacKINNON CONCUR: MacKINNON, Circuit Judge. I concur in the foregoing opinion. While I recognize the desire and need for reasonabl 5), I do not consider it possible to provide administratively that operating licensees who newcomer and his application for renewal will be granted." Such policy would effectively p standard of substantial service for the best possible service to the public and effectivel of the statute.