Storer Broadcasting Company v. United States, 12065.

• Decision Date: 24 February 1955
• Docket Number: No. 12065.,12065.
• Parties: STORER BROADCASTING COMPANY, Petitioner, v. UNITED STATES of America, and the Federal Communications Commission, Respondents.
• Court: U.S. Court of Appeals — District of Columbia Circuit

95 US App. DC 97, 220 F.2d 204 (1955)

STORER BROADCASTING COMPANY, Petitioner, v. UNITED STATES of America, and the Federal Communications Commission, Respondents.

No. 12065.

United States Court of Appeals, District of Columbia Circuit.

Argued November 2, 1954.

Decided February 24, 1955.

Mr. Albert R. Connelly, New York City, with whom Messrs. Thomas H. Wall, Washington, D. C., and George B. Turner, New York City, were on the brief, for petitioner. Messrs. Fred W. Albertson and Clair L. Stout, Washington, D. C., entered appearances for petitioner.

Mr. Daniel R. Ohlbaum, Counsel, Federal Communications Commission, with whom Messrs. Warren E. Baker, Gen. Counsel, Federal Communications Commission, and J. Smith Henley, Asst. Gen. Counsel, Federal Communications Commission, Harrison, Ark., were on the brief, for respondents. Messrs. Charles H. Weston, Atty., Department of Justice, and J. Roger Wollenberg, Richard A. Solomon and Richard J. Snider, Counsel, Washington, D. C., Federal Communications Commission, entered appearances for respondents.

Before WILBUR K. MILLER, PRETTYMAN and BAZELON, Circuit Judges.

WILBUR K. MILLER, Circuit Judge.

Storer Broadcasting Company filed with the Federal Communications Commission August 31, 1953, an application for a new television station in Miami, Florida. Storer was then already licensed to own and operate five standard broadcast and five frequency modulation broadcast stations, located in Atlanta, Detroit, Miami, Toledo and Wheeling; and three television stations, located in Atlanta, Detroit and Toledo. Its wholly-owned subsidiaries were then licensed to own and operate standard broadcast and television stations in Birmingham and San Antonio.

In a proceeding initiated some years before by issuance of a notice of proposed rule making, in which Storer participated, the Commission entered an order November 25, 1953, promulgating amended "multiple ownership" rules, which are now §§ 3.35, 3.240 and 3.636 of its Rules and Regulations. On the same day the Commission dismissed Storer's application for a television station in Miami, without a hearing and without consideration on the merits, on the ground that its grant would be in violation of the spirit and purpose of the multiple ownership rules.

Storer petitions for review, asking that we declare unlawful and without force or effect the Commission's rule making order of November 25, 1953, together with the amended multiple ownership rules promulgated thereby, insofar as and to the extent that the order and rules

"(a) Deny the right to a full and fair hearing to determine whether ownership, operation or control of more than seven (7) standard radio, seven (7) FM radio, and five (5) television broadcast stations, upon application therefor, will serve the public interest, convenience or necessity.

"(b) Provide that ownership of one (1%) per cent or more of the voting stock of a corporation shall be considered as equivalent to ownership, operation or control of such station in determining the existence of a concentration of control contrary to the public interest, convenience or necessity."

The multiple ownership rules are challenged here only insofar as they impose an absolute limitation upon the number of standard, FM and television broadcast stations which may be owned, operated or controlled by a single individual or corporation. The three rules under attack are similar except for the differing maximum numbers of stations which are permitted, — seven in standard, seven in FM, and five in television. We quote as typical the television broadcast rule, § 3.636:

"Section 3.636 Multiple Ownership — (a) No license for a television broadcast station shall be granted to any party (including all parties under common control) if

"(1) such party directly or indirectly owns, operates, or controls another television broadcast station which serves substantially the same area; or

"(2) such party, or any stockholder, officer or director of such party, directly or indirectly owns, operates, controls, or has any interest in, or is an officer or director of any other television broadcast station if the grant of such license would result in a concentration of control of television broadcasting in a manner inconsistent with the public interest, convenience, or necessity. In determining whether there is such a concentration of control, consideration will be given to the facts of each case with particular reference to such factors as the size, extent and location of areas served, the number of people served, and the extent of other competitive service to the areas in question. The Commission, however, will in any event consider that there would be such a concentration of control contrary to the public interest, convenience or necessity for any party or any of its stockholders, officers or directors to have a direct or indirect interest in, or be stockholders, officers, or directors of, more than five television broadcast stations." (Italics supplied. The italicized material is common to all three rules.)

Unequivocally, the foregoing rule declares that an application for a television broadcast station license filed by one who is already licensed for five such stations will be rejected; that the Commission will in any event consider that the addition of a sixth station would result in concentration of control contrary to the public interest, convenience or necessity.

This means, of course, that an application for a sixth television station will be denied without a hearing, just as Storer's application was rejected without a hearing and without any consideration of the question whether public interest, convenience or necessity would be served by the grant.

Section 309(a) of the Communications Act^* requires the Commission to grant an application for a station license if it finds, upon examination thereof, that public interest, convenience and necessity would be served by the granting thereof. If the Commission is unable so to find, after examining an application, it is required by § 309 (b) of the Act to notify the applicant and other known parties in interest of the grounds and reasons for its inability to make such finding. It is further provided that, if the Commission, after considering the applicant's reply to its notice, is still unable to make a favorable finding and so is unable to grant the application without a hearing,

"* * * it shall formally designate the application for hearing on the grounds or reasons then obtaining and shall notify the applicant and all other known parties in interest of such action and the grounds and reasons therefor, specifying with particularity the matters and things in issue but not including issues or requirements phrased generally. * * * Any hearing subsequently held upon such application shall be a full hearing in which the applicant and all other parties in interest shall be permitted to participate but in which both the burden of proceeding with the introduction of evidence upon any issue specified by the Commission, as well as the burden of proof upon all such issues, shall be upon the applicant."

This is mandatory language. The Supreme Court said in Ashbacker Radio Corp. v. F. C. C., 1945, 326 U.S. 327, 330, 66 S.Ct. 148, 149, 90 L.Ed. 108:

"* * * § 309(a) not only gives the Commission authority to grant licenses without a hearing, but also gives applicants a right to a hearing before their applications are denied. * * *"

Again, 326 U.S. at page 333, 66 S.Ct. at page 151, the Court said:

"* * * Congress has granted applicants a right to a hearing on their applications for station licenses. Whether that is wise policy or whether the procedure adopted by the Commission in this case is preferable is not for us to decide. * * *"

Moreover, the denial of a hearing granted by statute is a denial of due process of law. L. B. Wilson, Inc., v. F. C. C., 1948, 83 U.S.App.D.C. 176, 170 F.2d 793.

This does not mean, however, that any person who applies for any frequency at any location is entitled to a hearing before his application may be denied, for there are situations in...