309 U.S. 470 (1940), 499, F.c.c. v. Sanders Bros. Radio Station

Docket NºNo. 499.
Citation309 U.S. 470, 60 S.Ct. 693, 84 L.Ed. 1037, 84 L.Ed. 869
Party NameFEDERAL COMMUNICATIONS COMMISSION v. SANDERS BROS. RADIO STATION.
Case DateMarch 25, 1940
CourtUnited States Supreme Court

Page 470

309 U.S. 470 (1940)

60 S.Ct. 693, 84 L.Ed. 1037, 84 L.Ed. 869

FEDERAL COMMUNICATIONS COMMISSION

v.

SANDERS BROS. RADIO STATION.

No. 499.

United States Supreme Court.

March 25, 1940

Argued Feb. 9, 1940.

As Amended on Denial of Rehearing April 22, 1940.

On Writ of Certiorari to the United States Court of Appeals for the District of Columbia.

Proceeding in the matter of the application of the Telegraph Herald for a construction permit to erect a radio broadcasting station in Dubuque, Iowa, wherein Sanders Bros. Radio Station, which had applied for permit to move its transmitter and studios to Dubuque, Iowa, and to install radio station there, intervened. The applications were set for consolidated hearing. The Broadcasting Division of the Federal Communications Commission granted both applications and denied a rehearing to Sanders Bros. Radio Station. To review a judgment of the United States Court of Appeals for the District of Columbia, 70 App.D.C. 297, 106 F.2d 321, reversing decision of the Federal Communications Commission and remanding the cause, the Federal Communications Commission brings certiorari.

Judgment of the Court of Appeals reversed.

COUNSEL

[60 S.Ct. 695] Messrs. Robert H. Jackson, Atty. Gen., and William J. Dempsey, of Washington, D.C., for petitioner.

Page 471

Mr. Louis G. Caldwell, of Washington, D.C., for respondent.

OPINION

Mr. Justice ROBERTS delivered the opinion of the Court.

We took this case to resolve important issues of substance and procedure arising under the Communications Act of 1934, as amended.1

January 20, 1936, the Telegraph Herald, a newspaper published in Dubuque, Iowa, filed with the petitioner an application for a construction permit to erect a broadcasting station in that city. May 14, 1936, the respondent, who had for some years held a broadcasting license for, and had operated, Station WKBB at East Dubuque, Illinois, directly across the Mississippi River from Dubuque, Iowa, applied for a permit to move its transmitter and studios to the last named city and to install its station there. August 18, 1936, respondent asked leave to intervene in the Telegraph [60 S.Ct. 696] Herald proceeding, alleging in its petition, inter alia, that there was an insufficiency of advertising revenue to support an additional station in Dubuque and insufficient talent to furnish programs for an additional station; that adequate service was being rendered to the community by Station WKBB and there was no need for any additional radio outlet in Dubuque and that the granting of the Telegraph Herald application would not serve the public interest, convenience, and necessity. Intervention was permitted and both applications were set for consolidated hearing.

The respondent and the Telegraph Herald offered evidence in support of their respective applications. The respondent's proof showed that its station had operated

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at a loss; that the area proposed to be served by the Telegraph Herald was substantially the same as that served by the respondent and that, of the advertisers relied on to support the Telegraph Herald station, more than half had used the respondent's station for advertising.

An examiner reported that the application of the Telegraph Herald should be denied and that of the respondent granted. On exceptions of the Telegraph Herald, and after oral argument, the broadcasting division of petitioner made an order granting both applications, reciting that 'public interest, convenience, and necessity would be served' by such action. The division promulgated a statement of the facts and of the grounds of decision, reciting that both applicants were legally, technically, and financially qualified to undertake the proposed construction and operation; that there was need in Dubuque and the surrounding territory for the services of both stations, and that no question of electrical interference between the two stations was involved. A rehearing was denied and respondent appealed to the Court of Appeals for the District of Columbia. That court entertained the appeal and held that one of the issues which the Commission should have tried was that of alleged economic injury to the respondent's station by the establishment of an additional station and that the Commission had erred in failing to make findings on that issue. It decided that, in the absence of such findings, the Commission's action in granting the Telegraph Herald permit must be set aside as arbitrary and capricious. 2

The petitioner's contentions are that under the Communications Act economic injury to a competitor is not a ground for refusing a broadcasting license and that, since this is so, the respondent was not a person aggrieved or whose interests were adversely affected, by the Commission's

Page 473

action, within the meaning of Section 402(b) of the Act, 47 U.S.C.A. s 402(b), which authorizes appeals from the Commission's orders.

The respondent asserts that the petitioner in argument below contended itself with the contention that the respondent had failed to produce evidence requiring a finding of probable economic injury to it. It is consequently insisted that the petitioner is not in a position here to defend its failure to make such findings on the ground that it is not required by the Act to consider any such issue. By its petition for rehearing in the court below, the Commission made clear its position as now advanced. The decision of the court below, and the challenge made in petition for rehearing and here by the Commission, raise a fundamental question as to the function and powers of the Commission and we think that, on the record, it is open here.

First. We hold that resulting economic injury to a rival station is not in and of itself, and apart from considerations of public convenience, interest, or necessity, an element the petitioner must weigh and as to which it must make findings in passing on an application for a broadcasting license.

Section 307(a) of the Communications Act, 47 U.S.C.A. s 307(a), directs that 'the Commission, if public convenience, interest, or necessity will be served thereby, subject to the limitations of this Act (chapter), shall grant to any applicant therefor a station license provided for by this Act (chapter).' This mandate is given meaning and contour by the other provisions [60 S.Ct. 697] of the statute and the subject matter with which it deals. 3 The Act contains no express command that in passing upon an...

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