Community Broadcasting Co. v. FCC

• Citation: 107 US App. DC 95,274 F.2d 753
• Decision Date: 08 February 1960
• Docket Number: No. 15313,15314.,15313
• Parties: COMMUNITY BROADCASTING CO., Inc., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Modern Broadcasting Company of Baton Rouge, Inc., Intervenor. COMMUNITY BROADCASTING CO., Inc., Petitioner, v. UNITED STATES of America, Federal Communications Commission, Respondents, Modern Broadcasting Company of Baton Rouge, Inc., Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

107 US App. DC 95, 274 F.2d 753 (1960)

COMMUNITY BROADCASTING CO., Inc., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Modern Broadcasting Company of Baton Rouge, Inc., Intervenor.

COMMUNITY BROADCASTING CO., Inc., Petitioner, v. UNITED STATES of America, Federal Communications Commission, Respondents, Modern Broadcasting Company of Baton Rouge, Inc., Intervenor.

Nos. 15313, 15314.

United States Court of Appeals District of Columbia Circuit.

Argued October 21, 1959.

Decided February 8, 1960.

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Mr. Frank U. Fletcher, Washington, D. C., with whom Messrs. Robert L. Heald and Russell Rowell, Washington, D. C., were on the brief, for appellant in No. 15313 and petitioner in No. 15314.

Mr. Max D. Paglin, Asst. Gen. Counsel, Federal Communications Commission, with whom Messrs. John L. FitzGerald, Gen. Counsel, and John H. Conlin, Counsel, Federal Communications Commission, were on the brief, for appellee in No. 15313 and respondent, Federal Communications Commission in No. 15314.

Mr. Richard A. Solomon, Atty., Department of Justice, was on the brief for respondent United States of America in No. 15314.

Mr. Richard M. Zwolinski, Counsel, Federal Communications Commission, also entered an appearance for appellee in No. 15313 and respondent Federal Communications Commission in No. 15314.

Mr. Harold D. Cohen, Washington, D. C., with whom Messrs. Vernon C. Kohlhass and William S. Green, Washington, D. C., were on the brief, for intervenor. Mr. Thomas N. Dowd, Washington, D. C., also entered an appearance for intervenor.

Messrs. James A. McKenna, Jr., and Vernon L. Wilkinson, Washington, D. C., filed a brief on behalf of American Broadcasting-Paramount Theatres, Inc., as amicus curiae, in both cases urging dismissal.

Before WILBUR K. MILLER, DANAHER and BURGER, Circuit Judges.

BURGER, Circuit Judge.

Appellant challenges the action of the Federal Communications Commission which granted to Modern Broadcasting Company (intervenor) a Special Temporary Authority (hereafter S.T.A.) to construct and operate a TV station on Channel 9, V.H.F., at Baton Rouge, Louisiana. Modern has been operating station WAFB-TV in Baton Rouge, Louisiana, on U.H.F., Channel 28, since 1953, and has been sustaining operating losses since 1956. Channel 9, V.H.F., had been shifted, on June 3, 1959, by a rule making proceeding not challenged here, from Hattiesburg, Mississippi, to Baton Rouge.¹

On June 15, 1959, Modern applied for a construction permit for Channel 9 at Baton Rouge and, on June 18, filed a request for Special Temporary Authorization to permit immediate use of the channel without awaiting a comparative hearing. Modern asserted that it could not in any event continue its operations on the U.H.F. Channel 28 beyond 1959 in view of the financial losses being sustained. Modern's application asserted also that it would be "willing to conduct such temporary operation under the express condition that it will expire automatically upon the commencement of any regular operation on Channel 9" resulting from the Commission's final action on the grant. Modern also agreed that "no effect whatsoever shall be given to any expenditure of funds * * * and that no preference shall be accorded to Modern by virtue of the temporary grant * * *."

Community Broadcasting Co., Inc., petitioner here, filed objection to the request for temporary authority, saying it would file its application for Channel 9 along with a request for a S.T.A. pending final action on the application. On July 21, 1959, Community filed an application for a construction permit but filed no request for temporary authority to operate pending final action.

The two applications being mutually exclusive, a comparative hearing for a license for regular operations became imperative. Modern renewed its request for temporary authority and Community again objected repeating its assertion that it would file a request for the S.T.A. and that any action by the Commission at that time on the question of interim operating authority would be premature because it could not be known how many applicants might ultimately seek comparative consideration for the channel.

On July 22, 1959, one day after Community's construction permit application was filed, the Commission granted Modern's application for the S.T.A. pending the conclusion of a comparative hearing on the competing applications for permanent operations,² theirs being the only request for temporary authority then before the Commission. It predicated its action on the fact that the Baton Rouge reallocation problem had been under formal consideration since October 1957; that due to the probability of a long comparative hearing regular authorization could not be issued with respect to Channel 9 for several years; and that the public need for an additional V.H.F. channel at Baton Rouge, which need had led to the reassignment of channels, could be met promptly only by the grant of special temporary authorization.

Community filed a petition for reconsideration and a motion for a stay of the S.T.A. grant to Modern; the Commission denied Community's stay request on July 29, 1959.³ Community then withdrew its petition for reconsideration and sought review here of the Commission's action granting the S.T.A. to Modern.

Appellant urges numerous grounds for reversal. The Commission urges, among other things, that many of these points were never raised to the Commission below, and hence may not be raised now. N.L.R.B. v. Cheney California Lumber Co., 1946, 327 U.S. 385, 66 S.Ct. 553, 90 L.Ed. 739. The Commission nevertheless seems to suggest that this court has before it a "public notice" granting Modern its temporary authority, and its explanatory letter to appellant concerning the grant. We therefore limit our review to the original Modern application, and appellant's objection.⁴

Modern's application rests on the fact that if a comparative hearing be necessary, V.H.F. service on Channel 9 for Baton Rouge would be delayed for several years; that its U.H.F. station was sustaining losses and would be forced to cease operations if the grant were not forthcoming at once; that in this event there would be no competitive television service in Baton Rouge; that the public interest would be better served by beginning V.H.F. competitive service in accord with the basic purpose of the Commission's order re-allocating the channel; and that certain possible overlap problems were not sufficiently grave as to preclude the temporary grant.

Appellant, in its opposition, contended that it intended to request the S.T.A. for the channel; that it was as qualified as Modern to receive such authority; that the reasons advanced by Modern were insufficient to sustain the grant; and that the overlap problem was significant. The Commission nevertheless granted Modern's request.

We think that the issues raised in the Commission, together with its action in granting the S.T.A. for an indeterminate period while multiple applications for construction permits for regular operations are pending gives each applicant standing in this court and affords a basis for review as to whether the Commission's action has a sufficient basis to support it.

The problem of temporary authorizations gained significance after the ruling in Ashbacker Radio Corp. v. Federal Communications Comm'n, 1945, 326 U. S. 327, 66 S.Ct. 148, 90 L.Ed. 108. The Supreme Court there held that where two mutually exclusive applications are made for the same frequency, the Commission cannot grant one application for regular operations pending the holding of a comparative hearing since the subsequent hearing would then be "an empty thing." Id., 326 U.S. at page 330, 66 S. Ct. at page 150.

A practical problem immediately presented itself. Comparative hearings are lengthy and detailed affairs, frequently taking years before final conclusion. Occasionally the need for continuing already operating services, or establishing new ones, was so great as to render it against the public interest to withhold authorization pending final outcome of the necessary hearings. See American Broadcasting Co. v. Federal Communications Comm'n, 1951, 89 U.S.App.D.C. 298, 191 F.2d 492; Peoples Broadcasting Co. v. United States, 1953, 93 U.S.App.D.C. 78, 209 F.2d 286. The Supreme Court implicitly recognized the dilemma for it carefully pointed out in Ashbacker that the Commission there did not conditionally grant the application, an inference at least that such a conditional grant pending hearing was proper in some circumstances. 326 U.S. at page 331, 66 S.Ct. at page 150.

Thereafter, the Commission evolved a policy of granting such temporary authority in certain circumstances. We have upheld such temporary grants, given without a comparative hearing, against contentions that such procedure violates the Ashbacker rule. Peoples Broadcasting Co. v. United States, supra. Such grants are a "practical solution of a problem which involved the public interest in the continuity and quality of television service." Id., 93 U.S.App.D.C. at page 80, 209 F.2d at page 288.

Nevertheless, the existence of a power to grant temporary operating authority does not necessarily mean that it is to be granted in all circumstances simply because there is to be a long delay in completing the comparative hearings. The grant of temporary authority to one of several competing applicants before there has been any hearing is pregnant with danger to truly comparative consideration. The temporary grantee must take all the steps and make substantially all of the investment he would make if granted a construction permit for regular operations. Intervenor here estimates its probable investment under the temporary authority as in excess of one quarter million dollars. Appellant and the Commission suggest the investment may be larger. In the 2½ years, or more, before the comparative hearing can be...