Carter Mountain Transmission Corporation v. FCC

• Decision Date: 23 May 1963
• Docket Number: No. 17089.,17089.
• Citation: 321 F.2d 359
• Parties: CARTER MOUNTAIN TRANSMISSION CORPORATION, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee. Joseph P. Ernst and Mildred V. Ernst d/b as Chief Washakie TV, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

321 F.2d 359 (1963)

CARTER MOUNTAIN TRANSMISSION CORPORATION, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee.

Joseph P. Ernst and Mildred V. Ernst d/b as Chief Washakie TV, Intervenor.

No. 17089.

United States Court of Appeals District of Columbia Circuit.

Argued March 8, 1963.

Decided May 23, 1963.

As Amended June 26, 1963.

Petition for Rehearing Denied June 26, 1963.

Mr. E. Stratford Smith, Washington, D. C., with whom Mr. Robert E. Conn, Washington, D. C., was on the brief, for appellant. Mr. Thomas G. Shack, Jr., Washington, D. C., also entered an appearance for appellant.

Mr. Daniel R. Ohlbaum, Assoc. Gen. Counsel, Federal Communications Commission, with whom Mr. Max D. Paglin, Gen. Counsel, and Mrs. Ruth V. Reel, Counsel, Federal Communications Commission, were on the brief, for appellee.

Mr. Vernon L. Wilkinson, Washington, D. C., with whom Mr. James A. McKenna, Jr., Washington, D. C., was on the brief, for intervenor.

Mr. Robert D. L'Heureux, Washington, D. C., filed a brief on behalf of National Community Television Association, Inc., as amicus curiae, urging reversal.

Mr. Robert V. Cahill, Washington, D. C., filed a brief on behalf of National Association of Broadcasters, as amicus curiae, urging affirmance.

Before BAZELON, Chief Judge, and WILBUR K. MILLER and WASHINGTON, Circuit Judges.

Petition for Rehearing En Banc Denied June 26, 1963.

WASHINGTON, Circuit Judge.

This is a telecommunications case, in which a challenge is made to the power of the Federal Communications Commission to refuse a grant to a common carrier by radio of facilities to be used by community antenna systems,¹ because of the impact of the proposed grant upon an existing television station.

Carter Mountain Transmission Corporation, appellant here, is a common carrier by radio. It filed an application with the Commission for permission to construct a microwave radio communication system to transmit signals — received from television stations located in several distant cities — to community antenna systems established in the towns of Riverton, Lander, and Thermopolis, Wyoming, by Western Television Corporation. A protest was filed by the licensee of television station KWRB-TV, in Riverton, Wyoming, now an intervenor in this appeal. The Commission caused a hearing to be held, after which the Examiner recommended denial of the protest. The Commission reversed, granted intervenor's protest, and denied appellant's application. This appeal followed.²

The Commission concluded that it would not serve the public interest, convenience, and necessity to grant appellant's application. Its reasoning was essentially this: that to permit appellant to bring in outside programs for the community antenna systems on the basis proposed would result in the "demise" of the local television station (intervenor KWRB-TV) and the loss of service to a substantial rural population not served by the community antenna systems, and to many other persons who did not choose (or were unable) to pay the cost of subscribing to the community antenna systems; and that the need for the local outlet outweighed the improved service which appellant's proposed new facilities would bring to those who subscribed to the community antenna systems. The Commission, however, expressly gave appellant leave to refile its application when it could show that the community antenna systems would carry the signal of the local outlet (intervenor) and would not duplicate its programming.

The parties have agreed on six questions for our consideration. We will take them up seriatim, stating the questions as presented to us.

"1. Whether the Commission\'s denial of Appellant\'s application is based upon an erroneous application of principles of radio broadcast law to a case of common carrier licensing."

Appellant's argument on this point is in essence that the Commission was required to apply classic common carrier criteria in considering its application, and that under these criteria the Commission would have been obliged to grant a certificate of convenience and necessity authorizing construction of the requested common carrier facilities. The statement is made that under the Communications Act common carriers are regulated "in analogy to the regulation of rail and other carriers by the Interstate Commerce Commission,"³ and a number of decisions of the Interstate Commerce Commission are cited for the proposition that the latter Commission will not deny a permit for construction and operation of common carrier facilities in the field of transportation because of economic impact upon the competitors of the carrier's proposed customer.⁴

We do not think the Communications Commission applied incorrect legal principles in reaching its decision, or that it was required to adopt the rationale of the cited decisions of the Interstate Commerce Commission. Those decisions are of little relevance here. Questions of competitive injury in the transportation field are very different from questions of public injury in the field of communications.⁵ Here the Federal Communications Commission is charged with the duty of regulating not only common carriers by radio but broadcasters of television programs. It cannot let its decisions in the radio carrier field interfere with its responsibilities in the television broadcasting field. In both fields, it must "make available, so far as possible, to all the people of the United States," adequate and efficient service. See Section 1 of the Communications Act of 1934, as amended, 47 U.S. C. § 151 (1958). A common carrier by radio cannot construct a new facility or extend its existing facilities sua sponte: it must first obtain a certificate or license from the Commission, authorizing it to establish such facilities, and before awarding the authority the Commission must be convinced that the proposal is "reasonably required in the interest of public convenience and necessity." See 47 U.S.C. § 214(a), (c) and (d) (1958). The interest of the listening and viewing public in better and more effective service is paramount. See National Broadcasting Co. v. United States, 319 U.S. 190, 216-217, 63 S.Ct. 997, 87 L.Ed. 1344 (1943); Federal Radio Commission v. Nelson Brothers Bond & Mortgage Co., 289 U.S. 266, 285, 53 S.Ct. 627, 77 L.Ed. 1166 (1933). And in the common carrier field, as well as in the broadcasting field, "competition is a relevant factor in weighing the public interest." Federal Communications Commission v. RCA Communications, Inc., 346 U.S. 86, 94, 73 S.Ct. 998, 1004, 97 L.Ed. 1470 (1953); cf. Mansfield Journal Co. v. Federal Communications Commission, 86 U.S.App.D. C. 102, 180 F.2d 28 (1950).

Relevant, too, is the congressional mandate that the Commission "make such distribution of licenses, frequencies, * * * and of power among the several States and communities as to provide a fair, efficient, and equitable distribution of * * * service to each of the same." Section 307(b) of the Communications Act, 47 U.S.C. § 307(b) (1958). It is axiomatic that in carrying out its obligations under Section 307(b), as in considering the comparative qualifications of applicants for the same frequency or channel, the Commission may weigh the net effect on the community or communities to be served. See Pinellas Broadcasting Co. v. Federal Communications Commission, 97 U.S.App.D.C. 236, 230 F.2d 204, cert. denied, 350 U.S. 1007, 76 S.Ct. 650, 100 L.Ed. 869 (1956); cf. Federal Communications Commission v. Allentown Broadcasting Co., 349 U.S. 358, 75 S.Ct. 855, 99 L.Ed. 1147 (1955). It necessarily follows that in determining whether the authorization requested by appellant would be in the public interest the Commission was entitled — if indeed it was not obliged — to consider the use to which the facilities and frequencies requested were to be put, and to weigh that use as against other legally relevant factors, including the effect on existing local stations. Cf. Federal Power Commission v. Transcontinental Gas Pipe Line Corp., 365 U.S. 1, 81 S.Ct. 435, 5 L.Ed.2d 377 (1961).⁶

"2. Whether the Commission\'s denial is an arbitrary and capricious denial of access to common carrier communications facilities to which Appellant\'s proposed customer is entitled as a matter of law."

This question must be answered in the negative. There is no basis for the view that appellant's proposed customer is entitled to access to appellant's proposed facilities as a matter of law. Congress has made its "right" to access depend on whether the appellant obtains a license from the Federal Communications Commission under the standard of public convenience and necessity. The Commission's action in this case is not in our opinion arbitrary and capricious, for the reasons set out above, and for additional reasons to be stated later.

"3. Whether the Commission\'s denial for the reasons indicated constitutes an extension of its authority beyond its statutory jurisdiction to regulate community antenna systems."

Appellant points out that the Commission has no direct jurisdiction or authority over community antenna systems, and in fact has asked Congress — so far unsuccessfully — for such authority. It argues that the Commission has nevertheless attempted to regulate Western, the community antenna proprietor, without legal authority, when it included in the order denying appellant's application the words "without prejudice to refiling when a showing can be made that the duplication of programming is adequately avoided and a satisfactory arrangement is arrived at by which the cable system will carry the local KWRB-TV service."

We cannot agree that this amounts to an attempt to regulate Western's antenna system, even though it may have an indirect effect on that system. The Commission was considering appellant's application in its relevant setting, and the clause quoted moderated its denial of that application by granting appellant the opportunity to show that the...