Central Florida Enterprises, Inc. v. F. C. C., s. 81-1795
| Decision Date | 04 May 1982 |
| Docket Number | Nos. 81-1795,Nos. 81-1795 and 81-1796,No. 81-1796,81-1796,No. 81-1795,s. 81-1795,81-1795,s. 81-1795 and 81-1796 |
| Citation | 683 F.2d 503 |
| Parties | CENTRAL FLORIDA ENTERPRISES, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Cowles Broadcasting, Inc. and Cowles Communications, Inc., Intervenors. NATIONAL BLACK MEDIA COALITION, et al., Appellants, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Cowles Broadcasting, Inc., Cowles Communications, Inc., and Central Florida Enterprises, Inc., Intervenors. . Argued 28 April 1982. Decided 13 July 1982. Appeal from an Order of the Federal Communications Commission. Joseph F. Hennessey, Washington, D. C., with whom Mary C. Albert and Lee G. Lovett, Washington, D. C., were on the brief for Central Florida Enterprises, Inc., appellant inand intervenor in Jeffrey H. Olson, Washington, D. C., for appellants, National Black Media Coalition, et al., in Daniel M. Armstrong, Associate Gen. Counsel, F. C. C., Washington, D. C., with whom Stephen A. Sharp, Gen. Counsel, David Silberman, Counsel, F. C. C., Washington, D. C., were on the brief, for appellee. Robert A. Marmet, Washington, D. C., with whom Harold K. McCombs, Jr., Washington, D. C., was on the brief, for intervenors, Cowles Broadcasting, Inc., et al., in Henry Geller, Washington, D. C., was on the brief for amicus curiae, Henry Geller, urging reversal. Earle K. Moore and Donna A. Demac, New York City, were on the brief, for amicus curiae, Office of Communications of the United Church of Christ, urging reversal of the FCC decision denying standing to intervene to the National Black Media Coalition. Before ROBINSON, Chief Judge, WILKEY, Circuit Judge, and FLANNERY, * District Judge for the District of Columbia. Opinion for the Court filed by Circuit Judge WILKEY. WILKEY, Circuit Judge: This case involves a license renewal proceeding for a television station. The appeal before us is taken from a new decision 1 by the Federal Communications Commission ("FCC" or "the Commission") after our opinion in Central Florida Enterprises v. FCC (Central Florida I) 2 vacated the Commission's earlier orders involving t |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Appeal from an Order of the Federal Communications Commission.
Joseph F. Hennessey, Washington, D. C., with whom Mary C. Albert and Lee G. Lovett, Washington, D. C., were on the brief for Central Florida Enterprises, Inc., appellant in No. 81-1795 and intervenor in No. 81-1796.
Jeffrey H. Olson, Washington, D. C., for appellants, National Black Media Coalition, et al., in No. 81-1796.
Daniel M. Armstrong, Associate Gen. Counsel, F. C. C., Washington, D. C., with whom Stephen A. Sharp, Gen. Counsel, David Silberman, Counsel, F. C. C., Washington, D. C., were on the brief, for appellee.
Robert A. Marmet, Washington, D. C., with whom Harold K. McCombs, Jr., Washington, D. C., was on the brief, for intervenors, Cowles Broadcasting, Inc., et al., in Nos. 81-1795 and 81-1796.
Henry Geller, Washington, D. C., was on the brief for amicus curiae, Henry Geller, urging reversal.
Earle K. Moore and Donna A. Demac, New York City, were on the brief, for amicus curiae, Office of Communications of the United Church of Christ, urging reversal of the FCC decision denying standing to intervene to the National Black Media Coalition.
Before ROBINSON, Chief Judge, WILKEY, Circuit Judge, and FLANNERY, * District Judge for the District of Columbia.
Opinion for the Court filed by Circuit Judge WILKEY.
This case involves a license renewal proceeding for a television station. The appeal before us is taken from a new decision 1 by the Federal Communications Commission ("FCC" or "the Commission") after our opinion in Central Florida Enterprises v. FCC (Central Florida I) 2 vacated the Commission's earlier orders involving the present parties. The FCC had granted the renewal of incumbent's license, but we held that the Commission's fact-finding and analysis on certain issues before it were inadequate, and that its method of balancing the factors for and against renewal was faulty. On remand, while the FCC has again concluded that the license should be renewed, it has also assuaged our concerns that its analysis was too cursory and has adopted a new policy for comparative renewal proceedings which meets the criteria we set out in Central Florida I. Accordingly, and with certain caveats, we affirm the Commission's decision. 3
The factual background and legal issues involved in this case were discussed at length in our earlier opinion and can be summarized briefly here. Central Florida Enterprises has challenged the FCC's decision to renew Cowles Broadcasting's license to operate on Channel 2 in Daytona Beach, Florida. In reaching a renewal/nonrenewal decision, the FCC must engage in a comparative weighing of pro-renewal considerations against anti-renewal considerations. In the case here, there were four considerations potentially cutting against Cowles: its illegal move of its main studio, the involvement of several related companies in mail fraud, its ownership of other communications media, and its relative (to Central Florida) lack of management-ownership integration. On the other hand, Cowles' past performance record was "superior," i.e., "sound, favorable and substantially above a level of mediocre service which might just minimally warrant renewal." 4
In its decision appealed in Central Florida I the FCC concluded that the reasons undercutting Cowles' bid for renewal did "not outweigh the substantial service Cowles rendered to the public during the last license period." 5 Accordingly, the license was renewed. Our reversal was rooted in a twofold finding. First, the Commission had inadequately investigated and analyzed the four factors weighing against Cowles' renewal. Second, the process by which the FCC weighed these four factors against Cowles' past record was never "even vaguely described" 6 and, indeed, "the Commission's handling of the facts of this case (made) embarrassingly clear that the FCC (had) practically erected a presumption of renewal that is inconsistent with the full hearing requirement" 7 of the Communications Act. 8 We remand with instructions to the FCC to cure these deficiencies.
On remand the Commission has followed our directives and corrected, point by point, the inadequate investigation and analysis of the four factors cutting against Cowles' requested renewal. The Commission concluded that, indeed, three of the four merited an advantage for Central Florida, and on only one (the mail fraud issue) did it conclude that nothing needed to be added on the scale to Central's plan or removed from Cowles'. We cannot fault the Commission's actions here. 9
We are left, then, with evaluating the way in which the FCC weighed Cowles' main studio move violation and Central's superior diversification and integration, on the one hand, against Cowles' substantial record of performance on the other. This is the most difficult and important issue in this case, for the new weighing process which the FCC has adopted will presumably be employed in its renewal proceedings elsewhere. We therefore feel that it is necessary to scrutinize carefully the FCC's new approach, and discuss what we understand and expect it to entail. 10
For some time now the FCC has had to wrestle with the problem of how it can factor in some degree of "renewal expectancy" for a broadcaster's meritorious past record, while at the same time undertaking the required 11 comparative evaluation of the incumbent's probable future performance versus the challenger's. As we stated in Central Florida I, "the incumbent's past performance is some evidence, and perhaps the best evidence, of what its future performance would be." 12 And it has been intimated-by the Supreme Court in FCC v. National Citizens Committee for Broadcasting (NCCB) 13 and by this court in Citizens Communications Center v. FCC 14 and Central Florida I 15-that some degree of renewal expectancy is permissible. But Citizens and Central Florida I also indicated that the FCC has in the past impermissibly raised renewal expectancy to an irrebuttable presumption in favor of the incumbent.
We believe that the formulation by the FCC in its latest decision, however, is a permissible way to incorporate some renewal expectancy while still undertaking the required comparative hearing. The new policy, as we understand it, is simply this: renewal expectancy is to be a factor weighed with all the other factors, and the better the past record, the greater the renewal expectancy "weight."
In our view (states the FCC), the strength of the expectancy depends on the merit of the past record. Where, as in this case, the incumbent rendered substantial but not superior service, the "expectancy" takes the form of a comparative preference weighed against (the) other factors .... An incumbent performing in a superior manner would receive an even stronger preference. An incumbent rendering minimal service would receive no preference. 16
This is to be contrasted with Commission's 1965 Policy Statement on Comparative Broadcast Hearings, 17 where "(o)nly unusually good or unusually poor records have relevance." 18
If a stricter standard is desired by Congress, it must enact it. We cannot: the new standard is within the statute.
The reasons given by the Commission for factoring in some degree of renewal expectancy are rooted in a concern that failure to do so would hurt broadcast consumers.
The justification for a renewal expectancy is three-fold. (1) There is no guarantee that a challenger's paper proposals will, in fact, match the incumbent's proven performance. Thus, not only might replacing an incumbent be entirely gratuitous, but it might even deprive the community of an acceptable service and replace it with an inferior one. (2) Licensees should be encouraged through the likelihood of renewal to make investments to ensure quality service. Comparative renewal proceedings cannot function as a "competitive spur" to licensees if their dedication to the community is not rewarded. (3) Comparing incumbents and challengers as if they were both new applicants could lead to a haphazard restructuring of the broadcast industry especially considering the large number of group owners. We cannot readily conclude that such a restructuring could serve the public interest. 19
We are relying, then, on the FCC's commitment that renewal expectancy will be factored in for the benefit of the public, not for incumbent broadcasters. 20 In subsequent cases we must judge the faithfulness of the FCC to that commitment, for, as the Supreme Court has said, "It is the right of the viewers and listeners, not the right of the broadcasters, which is paramount," 21 citing its earlier statement that "(p)lainly it is not the purpose of the (Communications) Act to protect a license against competition but to protect the public." 22 Then Circuit Judge Burger, as a member of this court, wrote:
A broadcaster seeks and is granted the free and exclusive use of a limited and valuable part of the public domain; when he accepts that franchise it is burdened with enforceable public obligations .... After nearly five decades of operation the broadcast industry does not seem to have grasped the simple fact that a broadcast license is a public trust subject to termination for breach of duty. 23
As we concluded in Central Florida I, "(t)he only legitimate fear which should move (incumbent) licensees is the fear of their own substandard performance, and that would be all to the public...
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