City of Angels Broadcasting, Inc. v. F.C.C.

Citation745 F.2d 656
Decision Date28 September 1984
Docket NumberNo. 83-1741,83-1741
PartiesCITY OF ANGELS BROADCASTING, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Fidelity Television, Inc., RKO General, Inc., Intervenors.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Appeal from an Order of the Federal Communications Commission.

Frank H. Penski, New York City, with whom Stephen Kurzman and Shelby D. Green, Washington, D.C., were on brief, for appellant.

J. Roger Wollenberg, Washington, D.C., with whom Joel Rosenbloom, Harold David Cohen, William H. Fitz and Jack N. Goodman, Washington, D.C., were on brief, for intervenor, RKO General, Inc.

Daniel M. Armstrong, Associate Gen. Counsel, F.C.C., Washington, D.C., with whom Bruce E. Fein, Gen. Counsel and Sue Ann Preskill, Counsel, F.C.C., Washington, D.C., were on brief, for appellee.

Nathaniel F. Emmons, Washington, D.C., with whom Eugene F. Mullin, Washington, D.C., was on brief, for intervenor, Fidelity Television, Inc. Howard A. Topel, Washington, D.C., also entered an appearance for Fidelity Television, Inc.

Before TAMM, WILKEY and STARR, Circuit Judges.

Opinion for the Court filed by Circuit Judge STARR.

Dissenting opinion filed by Circuit Judge WILKEY.

STARR, Circuit Judge.

City of Angels Broadcasting, Inc. appeals from a Federal Communications Commission order denying its motion to intervene in a proceeding to determine the recipient of a Los Angeles television station license. We have jurisdiction pursuant to 47 U.S.C. Sec. 402(b). For the reasons which follow, we hold that it was within the Commission's discretion to deny appellant's admittedly untimely request to intervene in an ongoing comparative proceeding.

I

This appeal is the latest chapter in a continuing drama at this court and the Federal Communications Commission (FCC or Commission) involving the efforts of RKO General, Inc. (RKO) to retain its television and radio licenses against various charges of wrongdoing levelled against it and its parent, the General Tire & Rubber Company (General Tire). The only question presently before us is whether the FCC acted arbitrarily in denying appellant City of Angels Broadcasting, Inc. (City of Angels) leave to intervene in an ongoing comparative license renewal proceeding with respect to a Los Angeles television license currently held by RKO. An analysis of this straightforward question, however, requires an understanding of the protracted history leading up to the present appeal.

Our story begins two decades ago. In 1965, RKO petitioned the FCC to renew its license for Channel 9, Station KHJ-TV in Los Angeles. A timely application for a construction permit for a new television station on Channel 9 was subsequently filed by Fidelity Television, Inc. (Fidelity). At that early juncture, City of Angels was nowhere to be found. Confronted with these two competing applications, the Commission scheduled a comparative hearing to resolve RKO's renewal application and Fidelity's mutually-exclusive application for a construction permit. After adducing evidence, a Hearing Examiner issued an order in 1969 granting Fidelity's construction permit application and denying RKO's application for renewal. RKO General, Inc. (KHJ-TV), 44 F.C.C.2d 149 (Initial Decision 1969).

While RKO was appealing this adverse decision to the full Commission, across the country another RKO license was under siege. In that proceeding, competing applicants were challenging RKO's license renewal for Channel 7, WNAC-TV in Boston. See RKO General, Inc. (WNAC-TV), 20 F.C.C.2d 846 (1969). In the Boston proceeding, issues were designated for hearing with respect to anticompetitive practices allegedly engaged in by RKO and its parent company, General Tire, whereby General Tire would condition its purchases of products or materials upon an agreement that the suppliers would purchase advertising time on RKO stations. See RKO General, Inc. (WNAC-TV), 78 F.C.C.2d 1, 38-47 (1980). Known as reciprocal trade dealings, those practices had been raised in the Los Angeles proceeding, although not as broadly as they were subsequently presented in the Boston proceeding. 1 Accordingly, the Commission's Broadcast Bureau asked the Commission to reopen the Los Angeles hearing for consideration of new evidence being developed in Boston on the reciprocity issue, as well as for consideration of an additional RKO fitness issue concerning the candor of certain witnesses who testified in the original hearing with respect to the alleged reciprocal trade practices.

In an order designed to streamline consideration of RKO's challenge to the Hearing Examiner's decision, the Commission declined to reopen the Los Angeles proceeding. RKO General, Inc. (KHJ-TV), 31 F.C.C.2d 70 (1971). Instead, the Commission made Fidelity a party to the Boston proceeding, in which evidence as to RKO's fitness was to be adduced. Id. at 74. Such a procedure, according to the Commission, would adequately protect Fidelity's right to adduce new evidence bearing upon RKO's fitness in the event the Commission reversed the Hearing Examiner's decision in favor of Fidelity and found RKO comparatively superior. Id. If, on the other hand, the Commission affirmed the Hearing Examiner's decision, any evidence adduced against RKO in Boston would necessarily become immaterial to the Los Angeles proceeding. Id.

After some prodding by this court, see Fidelity Television, Inc. v. FCC, 502 F.2d 443, 446-47 (D.C.Cir.1974) (detailing actions taken by this court during 1973 in response to Fidelity's petition for writ of mandamus to compel allegedly unreasonably delayed agency action), the FCC in late 1973 issued a decision in RKO's Los Angeles appeal. RKO General, Inc. (KHJ-TV), 44 F.C.C.2d 123 (1973). Reversing the Hearing Examiner's conclusion in favor of Fidelity, the Commission held that RKO should have been granted renewal of its license on the basis of the record compiled in the Los Angeles proceeding. In a 3-2 decision that prompted excoriating criticism from the dissenting Commissioners, see id. at 140-42 (Commissioner Johnson, dissenting); id. at 142-48 (Commissioner Lee, dissenting), the FCC majority found RKO and Fidelity to be similarly qualified and stated that "credit must be given in a comparative renewal proceeding, when the applicants are otherwise equal, for the value to the public in the continuation of the existing service." Id. at 137. Recognizing, however, that further character evidence might be adduced against RKO during the Boston proceeding, the Commission left open the possibility that Fidelity might ultimately be entitled to the Los Angeles license. Specifically, the Commission ordered that "the application of RKO ... is DEEMED TO BE GRANTED, and that the application of Fidelity ... IS DEEMED TO BE DENIED, subject to whatever action may be deemed appropriate following resolution of the matters in [the Boston proceeding]." Id. at 138.

When Fidelity subsequently appealed from this order, the Commission moved to dismiss the appeal on the ground that its order was merely interlocutory, inasmuch as Fidelity's application had not been finally denied within the meaning of the applicable judicial review provision, 47 U.S.C. Sec. 402(b)(1). This court disagreed. Fidelity Television, Inc. v. FCC, 502 F.2d 443 (D.C.Cir.1974). We held that the challenged order was immediately reviewable inasmuch as it finally approved RKO's renewal application subject to possible defeasance only upon termination of the Boston proceeding. See id. at 448-53. When the challenged order was subsequently reviewed on the merits, this court held that the FCC "did not commit reversible error" in renewing RKO's license and denying Fidelity's application for a construction permit. Fidelity Television, Inc. v. FCC, 515 F.2d 684, 702 (D.C.Cir.), cert. denied, 423 U.S. 926, 96 S.Ct. 271, 46 L.Ed.2d 253 (1975). The court noted, however, that its affirmance was "conditional (as was the Commission's decision) on the ultimate outcome of the [Boston] proceedings." Id. at 703 n. 45.

Shortly after the court's affirmance of the FCC's Los Angeles decision, new fitness issues with respect to RKO emerged in the Boston proceeding. The Securities and Exchange Commission (SEC) challenged as violative of the federal securities laws certain undisclosed domestic and overseas conduct engaged in by RKO's parent company, General Tire. The SEC proceeding resulted in the filing of a consent decree on May 10, 1976, requiring General Tire to undergo an operational review by five non-management directors that would culminate in the issuance of a Special Report. This report, released on July 1, 1977, bore obvious relevance to the FCC proceedings inasmuch as the report admitted wide-ranging corporate misconduct. The Special Report concluded that deficient recordkeeping and accounting practices had caused inaccuracies in RKO financial disclosures filed with the FCC. In 1978, before the FCC could act upon the information contained in General Tire's Special Report, RKO and the two competing applicants for the Boston television license proposed a settlement whereby RKO would assign the license to a new entity to be created by the merger of the two other applicants.

This proposed settlement, which was expressly made contingent upon an FCC finding that RKO was qualified to be a broadcast licensee, obviously had dramatic ramifications for the future of the Boston case as a contested proceeding. It was thus crucial for Fidelity, as well as for another RKO competitor, Multi-State Communications, Inc. (an applicant for a television license held by RKO in New York which had also been made a party to the Boston proceeding), to have its participatory rights in the Boston proceeding broadly construed. On the other hand, it was to the benefit of RKO and the formerly competing Boston applicants for such rights to be narrowly interpreted. These latter par...

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