447 F.2d 1201 (D.C. Cir. 1971), 24471, Citizens Communications Center v. F.C.C.

• Citation: 447 F.2d 1201
• Party Name: 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.
• Case Date: June 11, 1971
• Court: United States Courts of Appeals, U.S. Court of Appeals — District of Columbia Circuit

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447 F.2d 1201 (D.C. Cir. 1971)

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, District of Columbia Circuit.

June 11, 1971

Argued March 15, 1971.

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Mr. William A. Dobrovir, Washington, D.C., with whom Messrs. Albert H. Kramer and Robert J. Stein, Washington, D.C., were on the brief, for petitioners in No. 24, 471 and appellants in No. 24, 221.

Mr. Edward P. Morgan, Washington, D.C., with whom Mr. Gerald S. Rourke, Washington, D.C., was on the brief, for petitioners in No. 24, 491. Messrs. Walter H. Sweeney and Vincent B. Welch, Washington, D.C., also entered appearances for petitioners in No. 24, 491.

Mr. John H. Conlin, Associate General Counsel, Federal Communications Commission, with whom Mr. Joseph A. Marino, Counsel, Federal Communications Commission, was on the brief, for respondents in Nos. 24, 471 and 24, 491 and for appellees in No. 24, 221. Mr. Stuart F. Feldstein, Counsel, Federal Communications Commission, and Mr. Henry Geller, General Counsel, Federal Communications Commission, at the time the record was filed, also entered appearances for respondent Federal Communications Commission in Nos. 24, 471 and 24, 491 and appellees in No. 24, 221. Mr. Howard E. Shapiro, Atty., Department of Justice, entered an appearance for respondent United States of America in Nos. 24, 471 and 24, 491.

Messrs. Harold David Cohen and James J. Freeman, Washington, D.C., were on the brief for intervenor RKO General, Inc. in No. 24, 491.

Messrs. Edgar W. Holtz, Richard S. Rodin and William A. Bradford, Jr., Washington, D.C., were on the brief for intervenor WTAR Radio-TV Corporation in No. 24, 491.

Mr. Joseph F. Hennessey, Washington, D.C., entered an appearance for intervenor Dudley Station Corporation in No. 24, 491.

Before WRIGHT, MacKINNON and WILKEY, Circuit Judges.

J. SKELLY WRIGHT, Circuit Judge:

Appellants and petitioners ¹ in these consolidated cases ² challenge the legality of the 'Policy Statement on Comparative

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Hearings Involving Regular Renewal Applicants, ' 22 F.C.C.2d 424, released by the Federal Communications Commission on January 15, 1970, and by its terms made applicable to pending proceedings. Briefly stated, the disputed Commission policy is that, in a hearing between an incumbent applying for renewal of his radio or television license and a mutually exclusive applicant, the incumbent shall obtain a controlling preference by demonstrating substantial past performance without serious deficiencies. ³ Thus if the incumbent prevails on the threshold issue of the substantiality of his past record, all other applications are to be dismissed without a hearing on their own merits.

Petitioners contend that this policy is unlawful under Section 309(e) of the Communications Act of 1934 ⁴ and the doctrine of Ashbacker Radio Corp. v. F. C.C., 326 U.S. 327, 66 S.Ct. 148, 90 L.Ed. 108 (1945)

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. The 1970 Policy Statement is also attacked by petitioners on grounds that it was adopted in disregard of the Administrative Procedure Act and that it restricts and chills the exercise of rights protected by the First Amendment.

Respondents urge the court to refrain from considering these arguments at this time because the 1970 Policy Statement is neither a final order nor yet ripe for review. In the alternative, respondents take the position that the Policy Statement is a lawful exercise of the Commission's authority.

We find that the judicial review sought by petitioners is appropriate at this time. Without reaching petitioners' other grounds for complaint, ⁵ we hold

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that the 1970 Policy Statement violates the Federal Communications Act of 1934, as interpreted by both the Supreme Court and this court.

I

Petitioners argue that the 1970 Policy Statement is 'final' in the primary sense of the term because no further proceedings concerning the Policy Statement are contemplated by the Commission or provided for by the Commission's rules. Respondents' position is that neither the Policy Statement nor the order denying the petitions for reconsideration are final orders within the statutory meaning of 28 U.S.C. § 2342(1) and 47 U.S.C. § 402(a). They argue that the Policy Statement sets only general guidelines to be applied in future adjudicatory proceedings where applicable. We find it unnecessary to resolve this particular disagreement because, even if the Policy Statement is characterized as interlocutory, it is still reviewable at this time. Since the Policy Statement is alleged to deprive petitioners in No. 24, 491 of their statutory right to a full comparative hearing under the Ashbacker doctrine, the Commission's action in issuing the Policy Statement is reviewable now. Chicago & Southern Air Lines, Inc. v. Waterman Steamship Corp., 333 U.S. 103, 113, 68 S.Ct. 431, 92 L.Ed. 568 (1948); Delta Air Lines v. C.A .B., 97 U.S.App.D.C. 46, 228 F.2d 17 (1955). As this court stated in summarizing the holding of Delta Air Lines in a subsequent case, 'when the Commission adopts a procedure which precludes a true comparative hearing of conflicting applications, review may be sought here without awaiting a grant of one of the applications.' Midwestern Gas Transmission Co. v. F.P.C., 103 U.S.App.D.C. 360, 366, 258 F.2d 660, 666 (1958).

Petitioners contend that the same line of cases holding an interlocutory order denying a party an Ashbacker hearing to be final for purposes of review necessarily supports the proposition that such an order is also ripe for review before completion of the contemplated hearing. Without deciding whether this proposition holds in every case, we agree that the Policy Statement is ripe for review under the test laid out in Abbott Laboratories v. Gardner, 387 U.S. 136, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967). According to the Supreme Court in Abbott Laboratories, the ripeness of a controversy depends upon both 'the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.' Id. at 149, 87 S.Ct. at 1515. The Policy Statement controversy is ripe under both halves of this test. Here the Policy Statement has been administratively considered and reconsidered by the Commission. The issues before us are 'purely legal.' ⁶ Ibid. Whether the Policy Statement denies a competing applicant the full comparative hearing to which he is entitled is strictly a matter of statutory interpretation involving a comparison of the hearing procedures spelled out in the Policy Statement with the requirements of 47 U.S.C. § 309(e) and Ashbacker. Likewise, the other issues raised by petitioners and enumerated in the introduction of this opinion are also purely legal and will not be focused or clarified by further proceedings in particular cases before the Commission.

Moreover, it would work a severe hardship on petitioners for the court to withhold consideration of their appeal. The substantial financial expense ⁷ to

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which Hampton Roads and Community Broadcasting will have been put if review of their alleged denial of procedural rights is delayed is a hardship which the court may properly take into account in finding this case ripe for review. Abbott Laboratories, supra, 387 U.S. at 153-154, 87 S.Ct. 1507; City of Chicago v. Atchison, Topeka & Santa Fe R. Co., 357 U.S. 77, 84, 78 S.Ct. 1063, 2 L.Ed.2d 1174 (1958). Even more important perhaps is the deadening effect the Policy Statement has had since its institution upon renewal challenges generally. By depriving competing applicants of their right to a full comparative hearing on the merits of their own applications, and by severely limiting the importance of other comparative criteria, the Commission has made the cost of processing a competing application prohibitive when measured by the challengers' very minimal chances of success. That the Policy Statement is in this sense self-executing ⁸ and that it has in fact served to deter the filing of a single competing application for a television renewal in over a year ⁹ is perhaps the most compelling factor in the court's decision to review this dispute at this time.

II

In order to clarify not only the legal issues but also the related substantive policy considerations involved in these consolidated cases, the court will first attempt to put the present controversy in its historical context. The national effort at comprehensive regulation of broadcasting began in 1927 with the Federal Radio Act. ¹⁰ This Act was intended to insure that 'the broadcasting privilege will not be a right of selfishness' but would rather 'rest upon an assurance of public interest to be served.' ¹¹ To achieve this purpose the Act provided for expiration of licenses, and consequent renewal hearings, every three years. ¹² At both initial and renewal licensing, applicants were to be tested by the basic standard of 'public interest, convenience, or necessity, ' ¹³ which was defined by the Federal Radio Commission in 1928 as

'A matter of comparative and not an absolute standard when applied to broadcasting stations. Since the number of channels is limited and the number of persons desiring to broadcast is far greater than can be accommodated, the Commission must determine

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from among the applicants before it which of them will, if licensed, best serve the public.' ¹⁴

Although the Federal Communications Act does not itself...