Radio Television S.A. de C.V. v. F.C.C.

• Decision Date: 12 December 1997
• Docket Number: No. 96-1438,96-1438
• Citation: 130 F.3d 1078
• Parties: , 10 Communications Reg. (P&F) 744 RADIO TELEVISIN S.A. DE C.V. and Bay City Television, Inc., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1078

130 F.3d 1078

327 U.S.App.D.C. 285, 10 Communications Reg.

(P&F) 744

RADIO TELEVISIN S.A. DE C.V. and Bay City Television, Inc., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee.

No. 96-1438.

United States Court of Appeals, District of Columbia Circuit.

Argued Oct. 3, 1997.

Decided Dec. 12, 1997.

Appeal of an Order of the Federal Communications Commission.

Norman P. Leventhal, Washington, DC, argued the cause for appellants, with whom Barbara K. Gardner was on the briefs.

Joel Marcus, Counsel, Federal Communications Commission, Washington, DC, argued the cause for appellee, with whom William E. Kennard, General Counsel, and Daniel M. Armstrong, Associate General Counsel, were on the brief. C. Grey Pash, Jr., Counsel, entered an appearance.

Before: WALD, SENTELLE and HENDERSON, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge:

Radio Televisin, S.A. de C.V., the licensee of Mexico-based XETV, and its domestic affiliate Bay City Television, Inc. (collectively "XETV"), seek review of an FCC order granting Fox Television's application under § 325 of the Communications Act for permission to transmit live television programming to XETV for rebroadcast into San Diego, California. In a prior decision, we vacated a Commission order which held incorrectly that NAFTA required the FCC to abandon its prior position that certain public interest requirements apply to § 325 applications. On remand, the FCC retreated to its prior position, stating that it would condition renewal in five years on whether Fox's foreign affiliate had provided "issue-responsive programming" to its San Diego viewers. Because this requirement does not discriminate against foreign stations in violation of NAFTA, and because the Commission need not renew its explanation for following its long-standing policy, we affirm the Commission's order.

I. Background

The Communications Act of 1934 (the "Act"), 47 U.S.C. § 151 et seq., subjects radio and television stations that broadcast within the United States to licensing by the FCC, which must inquire as to whether the "public interest, convenience, and necessity will be served by the granting" of a license application. 47 U.S.C. § 309(a). To this end, the FCC must ask whether a broadcaster provides "issue-responsive programming," that is, whether it serves the public interest by providing programming that concerns local issues facing the community to which it broadcasts. See, e.g., Commercial TV Stations, 98 F.C.C.2d 1076, 1092-94 (1984) (subsequent history omitted).

Because of the possibility that domestic broadcasters in some areas could evade the Act's requirements by transmitting their signals to a foreign station for rebroadcast into the United States, § 325(c) expressly prohibits such transmissions without an FCC permit. Section 325(d) provides that the "requirements of section 309" shall govern FCC consideration of applications for such permits; thus, in a § 325 proceeding, the FCC must determine whether the "public interest, convenience, and necessity will be served by the granting" of the permit. Since at least 1972, the FCC has considered issue-responsive programming as part of its "public interest" analysis under § 325.

XETV has for many years broadcast programming from its Tijuana, Mexico facilities to viewers in San Diego, California. In 1956, the FCC granted the § 325 application of American Broadcasting Companies, Inc. ("ABC") to transmit programming to XETV for rebroadcast into the domestic market. See Channel 51 of San Diego, Inc. v. FCC, 79 F.3d 1187, 1189 (D.C.Cir.1996) ("Channel 51"). When ABC filed a renewal application in 1968, a new domestic station, KCST, filed a petition to deny the permit. Based in part on a finding that XETV's programming was "deficient in that it renders no local service meeting the needs and interests of the community," the FCC denied ABC's renewal application. American Broadcasting Cos., Inc., 35 F.C.C.2d 1 (1972) ("ABC 1972"), aff'd per curiam, 26 R.R.2d 203 (D.C.Cir.), cert. denied, 412 U.S. 939, 93 S.Ct. 2773, 37 L.Ed.2d 398 (1973).

More recently, XETV has served as the San Diego affiliate of the Fox Television network. Until 1994, Fox and XETV relied on a practice called "bicycling": Fox transmitted its programming to a U.S. receiving station, which made tapes and physically transported these across the border for XETV to rebroadcast into San Diego. This practice legally avoided the § 325 licensing regime, but did not allow live broadcasts of any sort, which became a problem when Fox acquired the right to broadcast live games of the National Football League in 1994. Fox accordingly sought a § 325 permit for cross-border electronic transmission.

A domestic San Diego broadcaster, Channel 51, filed a petition to deny Fox's § 325 application, arguing that XETV's "issue-responsive programming" was deficient. The FCC eventually granted Fox's permit, in the process reviewing the ABC 1972 standards in light of the North American Free Trade Agreement ("NAFTA"). The FCC concluded that NAFTA had invalidated its prior position, expressed in ABC 1972, that "all of the public interest criteria used in domestic proceedings [should apply] to Section 325 proceedings." See Fox Television Stations, Inc., 10 F.C.C.R. 4055, 4064 (1995) ("Fox 1"). Although recognizing that NAFTA permitted it to continue considering programming matters, the Commission held in Fox 1 that its standards must be more lenient under § 325 than those applied in domestic proceedings. NAFTA's Annex VI directs the Commission to consider electrical interference as the "primary criterion" for evaluating the public interest under § 325, and prohibits discrimination based on nationality and other unnecessary restrictions on trade. Under its reading of NAFTA, the FCC found the issue-responsive programming requirement discriminatory and unnecessarily restrictive of trade, and consequently held that it should no longer apply in § 325 proceedings. Id. at 4065-66; Channel 51, 79 F.3d at 1191.

In Channel 51 we vacated that portion of the FCC's decision in Fox 1 which ruled, based on NAFTA, that the § 309 issue-responsive programming analysis no longer applied to applications under § 325. We noted that the FCC had "already determined, in ABC 1972, that the issue-responsive programming requirement is relevant in a § 325 proceeding," and held, applying well-established principles of administrative law, that if the FCC wanted to "depart from its prior ruling, it must provide a reasoned explanation." Channel 51, 79 F.3d at 1191; see also Gilbert v. NLRB, 56 F.3d 1438, 1445 (D.C.Cir.1995). We noted that the only rationale offered by the FCC for its changed position was the adoption of NAFTA Annex VI, principally because of the provisions therein prohibiting discrimination against foreign broadcasters. For reasons set forth more fully in Channel 51, 79 F.3d at 1191-92, we concluded that the FCC's reliance on Annex VI was misplaced and that NAFTA did not support the departure from the reasoning of ABC 1972. Indeed, we observed that it would be "well-nigh impossible to concoct" an explanation for "why subjecting a foreign station to the same issue-responsive programming requirement to which domestic stations are subject constitutes discrimination against a foreign station on the basis of its nationality," in violation of NAFTA. Id. at 1191. Thus, we vacated the order granting Fox's § 325 permit and remanded for further proceedings.

On remand, the FCC reconsidered its position, based on our decision in Channel 51, and decided to reaffirm its original position articulated in ABC 1972, namely, that its "Section 325 analysis must include an analysis of the public interest convenience and necessity consistent with Section 309." Fox Television Stations, Inc., 11 F.C.C.R. 14870, 14877, p 21 (1996) ("Fox 2"). It then granted the Fox application for a § 325 permit, but conditioned this grant "on XETV's provision of programming that meets the Commission's issue-responsive requirement during the five year authorization term." Id. at 14878, p 24. If and when Fox seeks renewal of its permit, it "will be required to show ... whether the programming broadcast by XETV has met the issue-responsive requirement during the term of the initial authorization." Id.

II. Justiciability

Fox has not challenged the Commission's conditional grant, but XETV seeks review of the condition imposed on Fox, and indirectly upon its own programming, by the FCC's order in Fox 2. XETV claims that it has standing as a "person ... aggrieved" by the Commission's order, and that the appeal is ripe for review. See 5 U.S.C. § 702. We hold with some reluctance that XETV has alleged injury sufficient to confer standing and to satisfy the ripeness test of Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), overruled on other grounds, Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977).

XETV's allegations of injury, at the heart of both standing and ripeness inquiries, amount to this: as a result of the Commission's allegedly unlawful condition on a future renewal application by Fox, XETV must alter its behavior, expending time and money to produce, air, and document the broadcast of issue-responsive programming during the next five years. Even though in five years time Fox might not seek renewal of its § 325 permit, the terms of the FCC order place a burden on XETV to comply with the issue-responsive programming requirement if it wants to preserve any chance of retaining its status as an affiliate of Fox, or any other U.S. network. The Communications Act grants standing before this Court to "any ... person [other than those enumerated in the statute] who is aggrieved or whose interests are adversely affected by any order of the Commission granting or denying" applications, including those under § 325(c). 47 U.S.C. § 402(b)(6)....