Office of Communication of United Church of Christ v. F.C.C., 89-1109

Decision Date28 August 1990
Docket NumberNo. 89-1109,89-1109
Citation911 F.2d 813
PartiesOFFICE OF COMMUNICATION OF The UNITED CHURCH OF CHRIST and Action for Children's Television, Petitioners, v. FEDERAL COMMUNICATIONS COMMISSION and the United States of America, Respondents.
CourtU.S. Court of Appeals — District of Columbia Circuit

Donna Lampert, with whom Henry Geller and Andrew Schwartzman were on the brief, for petitioners.

C. Grey Pash, Jr., Atty., F.C.C. ("FCC"), with whom Robert L. Pettit, Gen. Counsel, and Daniel M. Armstrong, Associate Gen. Counsel, FCC, James F. Rill, Asst. Atty. Gen., Catherine G. O'Sullivan, and David Seidman, Attys., Dept. of Justice, were on the brief, for respondents. Diane S. Killory also entered an appearance for respondents.

Before BUCKLEY, D.H. GINSBURG, and SENTELLE, Circuit Judges.

Opinion for the court filed by Circuit Judge BUCKLEY.

BUCKLEY, Circuit Judge:

In 1982, the Federal Communications Commission amended its rules to eliminate its twenty-year-old "anti-trafficking" policy, under which the purchase and resale of broadcast licenses within three years was presumed to be contrary to the public interest. Little more than a year after the Commission had denied reconsideration of the amendment, petitioners applied for a new rulemaking to, in effect, reinstate the anti-trafficking policy. The Commission denied this application, noting that the arguments it raised had already been considered and rejected at the time of the rule's amendment. Petitioners now seek review. Because the Commission acted within its broad discretion to define the public interest and reasonably concluded that petitioners' arguments did not justify a new rulemaking, we deny the petition for review.

I. BACKGROUND

The Communications Act of 1934 provides that

No construction permit or station license, or any rights thereunder, shall be transferred, assigned, or disposed of in any manner, voluntarily or involuntarily, directly or indirectly, or by transfer of control of any corporation holding such permit or license, to any person except upon application to the Commission and upon finding by the Commission that the public interest, convenience, and necessity will be served thereby.

47 U.S.C. Sec. 310(d) (1982).

From 1962 until 1982, the Federal Communications Commission maintained an "anti-trafficking" policy with respect to the sale of broadcast licenses. This policy created a presumption that "the transfer or assignment of a broadcast license held for a short time is prima facie inconsistent with the duties of the licensee and the public interest." Procedures on Transfer and Assignment Applications, 32 F.C.C. 689, 690 (1962). To implement this policy, the Commission adopted a rule whereby an applicant seeking the transfer or assignment of a station held for less than three years would be put to a full hearing unless it could make a compelling showing of unforeseen circumstances or hardship. Id. at 691.

After twenty years of applying this rule, the Commission came to the view that the "rule had outlived whatever validity and utility it may have had." Applications for Voluntary Assignments or Transfers of Control, 47 Fed.Reg. 985, 986 (1982). Comments were accepted on the proposed elimination of the "three year" rule. Following the comment period, the FCC eliminated it. Amendment of Section 73.3597, 52 Rad.Reg. 2d (P & F) 1081 (1982). The Commission based its decision on its experience in applying the rule, its conclusion that expanding the possibilities for entry would best serve the goal of increasing the quality of service and the diversity of station owners, and its belief that "marketplace forces would preclude efforts to recoup investment costs through overcommercialization." Id. at 1082-83, 1087-88. The FCC noted that the "overwhelming majority of parties commenting in this proceeding support[ed] the Commission's proposal." Id. at 1083. In February 1985, the Commission denied petitions for reconsideration of its elimination of the policy. Amendment of Section 73.3597, 99 F.C.C.2d 971 (1985).

On August 14, 1986, the Office of Communication of the United Church of Christ ("UCC") and Action for Children's Television ("ACT") filed a petition for rulemaking to reinstate the anti-trafficking policy. The petition was dismissed by the Acting Chief of the Mass Media Bureau in an opinion letter dated August 21, 1986. This letter noted that almost all of the arguments raised by the petition were substantially the same as those that the Commis sion had considered and rejected in its original order abandoning the anti-trafficking policy and its subsequent denial of reconsideration; none set forth a basis for upsetting the 1982 order. Two weeks later UCC and ACT applied for review of the Bureau decision by the full Commission. In this petition, UCC and ACT restated their views that the 1982 decision was in error, but also alleged that new developments in the industry had undercut the basis for the earlier decision.

In February 1989, the Commission issued a Memorandum Opinion and Order denying the application for review. Amendment of Section 73.3597, 4 F.C.C. Rcd 1710 (1989) ("1989 Order"). The Commission reaffirmed each of its policy justifications for its abandonment of the anti-trafficking rule. It noted that while petitioners had alleged that recent experience revealed a decline in issue-oriented community programming and children's programming as a result of the new policy, they had presented "no data or other evidence to support this allegation." Id. at 1712. The Commission also rejected petitioners' claims that destructive station debt burdens and reduced opportunity for women and minority broadcasters had resulted from the policy. Id. at 1711-12. The Commission thus found "initiation of a rule making proceeding on the subject of trafficking [was] not warranted." Id. at 1712. Following this decision, UCC and ACT filed for review in this court.

II. DISCUSSION

Petitioners make two arguments to support their claim that the Commission acted erroneously in denying their petition. First, they argue that the public interest provisions of the Communications Act of 1934, 47 U.S.C. Secs. 151-611 (1982 & Supp. V 1987) ("Act"), require the adoption of an anti-trafficking policy. Second, they argue that the Commission acted arbitrarily and capriciously, in violation of the Administrative Procedure Act, 5 U.S.C. Sec. 706(2)(A) (1988), in not looking at the evidence of changed circumstances in the broadcast industry since the 1982 decision.

The Commission responds that nowhere do petitioners point to the provisions of the Act that it has allegedly violated; moreover, Congress gave it discretion in determining the public interest that is broad enough to sustain its conclusion that that interest is now served by the freer marketability of licenses. The FCC contends that it considered all of petitioners' arguments, concluded that its previous findings were still valid, and adequately explained its decision to affirm the Bureau action. The Commission also makes two jurisdictional arguments: The petition is essentially an untimely petition for review of its 1985 denial of reconsideration of the original rule change and, in any event, the issues raised in the petition are not ripe for judicial review. We will address these issues first, then turn to the merits.

A. Jurisdictional Arguments
1. Timeliness

Petitioners raise almost exactly the same issues and arguments that were considered by the Commission at the time of the elimination of the anti-trafficking policy, prompting the Commission to argue that the current petition is merely an attempt to circumvent the statutory sixty-day limitation on petitions for review of agency action. See 28 U.S.C. Sec. 2344 (1988).

A review of the 1982 decision reveals that Citizens Communications Center, one of the petitioning parties in that rulemaking, raised the same argument that UCC and ACT now make, namely, that the profit factor motivating traffickers make them per se incapable of acting in the public interest because, among other things, "[public interest] programming has a negligible or even an inverse relationship to profit." Amendment of Section 73.3597, 52 Rad.Reg. 2d (P & F) at 1085 (internal quotes omitted); see Petition for Notice of Proposed Rulemaking, at 3-4 (Aug. 14, 1986); Petitioners' Brief at 10, 24-25. Petitioners simply disagree with the Commission's conclusion in its 1982 decision that "speculators" may in fact serve the public interest by infusing new capital and ideas into ailing stations, making them more re sponsive to their audiences. 52 Rad.Reg. 2d (P & F) at 1088.

Petitioners argue, nonetheless, that changed circumstances now warrant a new review of the 1982 decision. In Geller v. FCC, 610 F.2d 973 (D.C.Cir.1979), we recognized that the occurrence of a significant intervening event could "fatally undermine[ ] the Commission's public-interest justification for the regulations in question [and yet] not mature until long after completion of the administrative proceeding from whence they emanated." Id. at 978 n. 38.

The Commission reads Geller as standing for the proposition that any time a challenge is made to the continuing validity of a Commission determination, there must be an allegation of something directly undermining the previous conclusion's reasoning, or the court is required to dismiss the case. In Geller, however, we noted that

the period statutorily prescribed for judicial review of an administrative order governs only direct review of that order. Geller's petition in this court is for review, not of the 1972 order promulgating the contested rules, but of the 1976 order refusing to reexamine their continuing validity.

Id. at 978 (footnote omitted); see also Functional Music, Inc. v. FCC, 274 F.2d 543, 546 (D.C.Cir.1958), cert. denied, 361 U.S. 813, 80 S.Ct. 50, 4 L.Ed.2d 60 (1959). Here, it is clear...

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