Consolidated Nine, Inc. v. FCC

• Decision Date: 03 September 1968
• Docket Number: 21274.,No. 20961,20961
• Citation: 403 F.2d 585
• Parties: CONSOLIDATED NINE, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Comint Corporation and Mid-Florida Television Corporation, Intervenors. COMINT CORPORATION, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Mid-Florida Television Corporation, Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

403 F.2d 585 (1968)

CONSOLIDATED NINE, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Comint Corporation and Mid-Florida Television Corporation, Intervenors.

COMINT CORPORATION, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Mid-Florida Television Corporation, Intervenor.

Nos. 20961, 21274.

United States Court of Appeals District of Columbia Circuit.

Argued March 4, 1968.

Decided September 3, 1968.

Mr. Thomas H. Wall, Washington, D. C., with whom Messrs. Alan C. Campbell, Dow, Lohnes & Albertson, Edward P. Morgan, Vincent A. Pepper and Reed Miller, Washington, D. C., were on the brief, for appellant in No. 20,961.

Mr. John D. Lane, Washington, D. C., with whom Messrs. J. Carter McKaig, Washington, D. C., and Paul C. Perkins, Orlando, Fla., were on the brief, for appellant in No. 21,274 and intervenor in No. 20,961.

Mr. John H. Conlin, Associate General Counsel, Federal Communications Commission, with whom Messrs. Henry Geller, General Counsel, and Stuart F. Feldstein, Counsel, Federal Communications Commission, were on the brief, for appellee. Mrs. Lenore G. Ehrig, Counsel, Federal Communications Commission, also entered an appearance for appellee. Mr. Robert D. Hadl, Counsel, Federal Communications Commission, entered an appearance for appellee in No. 20,961.

Mr. Paul Dobin, Washington, D. C., with whom Mr. Joel H. Levy, Washington, D. C., was on the brief, for intervenor Mid-Florida Television Corporation.

Before BASTIAN, Senior Circuit Judge, and BURGER and TAMM, Circuit Judges.

BURGER, Circuit Judge:

This is an appeal by Consolidated Nine, Inc. and Comint Corporation from an opinion and order of the Federal Communications Commission which denied an application for interim operating authority and granted authority to Mid-Florida Television Corporation, Intervenor here, to continue the operation of channel 9 pending resolution of a new comparative hearing before the Commission. Consolidated Nine is an open-end joint group in which four of the contending applicants have joined to propose a joint interim operation of the facility. This is spelled out more fully later.

In one way or another, the basic problem involved here has been before the Commission for over a dozen years and is now in this court for the fourth time. The history and background are therefore important to an understanding of the case, its complexity makes it necessary to set it forth in some detail.

I THE HISTORY OF THE CHANNEL 9 PROCEEDINGS

In 1954 and 1955 comparative hearings were held on the mutually exclusive applications of Mid-Florida Television Corporation (Mid-Florida) and WORZ, Inc. (WORZ) for a construction permit for channel 9, a VHF television frequency assigned to Orlando, Florida. On June 7, 1957, the Commission granted the application of Mid-Florida. 22 F.C.C. 1254 (1957). WORZ appealed to this court, which affirmed the Commission's conclusion. WORZ, Inc. v. FCC, 103 U.S.App. D.C. 195, 257 F.2d 199 (1958). The Supreme Court granted certiorari, but, in light of the representations by the Solicitor General, in his opposition to the writ, that intervening Congressional investigations had indicated possible improper ex parte representations had been made to a member of the Commission concerning the qualifications of WORZ while the applications were pending, the Court vacated the judgment of this court, and remanded for such action as this court might thereafter deem appropriate. WORZ, Inc. v. FCC, 358 U.S. 55, 79 S.Ct. 114, 3 L.Ed.2d 48 (1958).

This court vacated the Commission's order awarding channel 9 to Mid-Florida and remanded the case to the Commission with instructions that it hold hearings to determine the nature and scope of the alleged ex parte approaches to the Commission. The court also provided that "in the discretion of the Commission existing services may be maintained." WORZ, Inc. v. FCC, 106 U.S. App.D.C. 14, 15, 268 F.2d 889, 890, cert. denied, 361 U.S. 805, 80 S.Ct. 104, 4 L.Ed.2d 56 (1959). By this time, Mid-Florida had begun to broadcast on channel 9 and the Commission allowed this authorization to stand undisturbed while it conducted the hearings we ordered. After the hearings, the Commission concluded that neither WORZ nor Mid-Florida was disqualified from operating the station and decided to hear new oral argument and to award the station on the basis of the original record. This court did not disturb the finding that neither of the applicants was disqualified to operate the station. But it did agree with the dissent of the Commission Chairman that, after the oral argument, the Commission would be authorized to decide whether to grant the application of Mid-Florida or of WORZ or to reopen the record for new applications. WORZ, Inc. v. FCC, 116 U.S.App.D.C. 316, 323 F.2d 618 (1963), cert. denied, 376 U.S. 914, 84 S.Ct. 664, 11 L.Ed.2d 611 (1964). The Commission, however, declined to reopen the record and again determined that Mid-Florida was the better qualified of the two applicants. WORZ, Inc., 36 F.C.C. 1535 (1964). On appeal, this court vacated the Commission's decision and remanded the proceedings to the Commission to reopen the record and permit new applicants for the authority to operate channel 9.

We noted both the age of the record — ten years — and the "nagging uncertainty as to whether so vital a community facility as is involved here should not be exposed to what may possibly be wider interests than those represented by these two applicants." WORZ, Inc. v. FCC, 120 U.S.App.D.C. 191, 192, 345 F.2d 85, 86 (1965). The Commission was again authorized to grant "temporary authority for the continued operation of the station." Ibid. The Commission then opened the proceedings for new applications for channel 9 and authorized Mid-Florida to continue its operation of the station. The Commission stated that this operation was to be "without prejudice to, and constitute no preference in any respect of any proceeding to be held with respect to Channel 9, in Orlando, Florida." WORZ, Inc., 1 F.C.C.2d 1377 (1965).

By the new cut-off date the Commission set for applications for channel 9, a total of eight applicants had filed for authority. Four of the new applicants (Central Nine Corporation, TV 9, Inc., Florida Heartland Television, Inc., and Comint Corporation) each applied for authority to operate channel 9 in the interim period before final authorization was determined. Subsequently, three of these applicants dropped their requests for individual interim operating authority and formed Consolidated Nine, Inc. Consolidated Nine was incorporated for the purpose of applying for and if successful, operating, channel 9 in the interim before comparative hearings were held. It was an open-ended group, with provisions that any applicant for permanent authority could participate with the original incorporators on an equal basis. Four of the six remaining applicants for permanent authority are participants in Consolidated Nine. Comint and Mid-Florida did not join Consolidated Nine. Comint has continued to pursue its application for individual interim authority as well as offering to belong to an interim group should the Commission direct that one be created. Mid-Florida opposed interim grants to either Consolidated Nine or Comint and requested that the Commission continue the status quo by allowing Mid-Florida to operate channel 9 pending the outcome of the comparative hearing.

On March 29, 1967, the Commission entered an order dismissing the application of Comint and granting Mid-Florida's request to continue its operation of channel 9. Consolidated Nine, Inc., 7 F.C.C. 2d 801 (1967). In dismissing Comint's application, the Commission stated: "Since Comint Corp.'s application does not afford all of the applicants a reasonable opportunity to participate with it in seeking the conditional grant, its request for interim authority must be dismissed for failure to comply with the rules."¹ Id. at 802. Because of Comint's willingness to participate with other applicants in an interim operation, Comint was treated by the Commission as a "prospective stockholder" in Consolidated Nine. In choosing between continued operation by Mid-Florida and an interim grant to Consolidated Nine, the Commission stated why it favored Mid-Florida over the proposed joint operation by Consolidated Nine as follows:

A joint interim operation has serious drawbacks. First, it requires a substantial investment in new facilities. Secondly, it would bring together a new management group consisting mainly of adversary parties. This is an inherently undesirable situation. Joint operation by conflicting parties to a hearing is hardly conducive to satisfactory long-range planning, leaves responsibility in doubt, and does not provide a sound basis for, or incentive to, special efforts to serve the community\'s needs. Our experience with joint interim operations indicates that this arrangement may serve to delay the outcome of the comparative hearing, and that it provides poorer management than station operation under the control of one party. An interim authorization is primarily useful when there is no existing service, or an existing licensee has been disqualified.

Consolidated Nine, Inc., 7 F.C.C.2d 801, 805 (1967).

Comint and Consolidated Nine both appeal. Comint claims that if it is subject to rule 1.592(b) requiring that its interim operation be open to all applicants, then the Commission abused its discretion by not applying the same rule to Mid-Florida. Consolidated Nine urges that it was an abuse of discretion for the Commission to permit one of several competing applicants for permanent authority to operate a channel pending an Ashbacker² hearing and that this action was contrary to our holding in Community Broadcasting Co. v. FCC, 107 U.S.App.D.C. 95; 274 F.2d 753 (1960).

II

Grants of interim broadcast authority, while not frequent, are not novel matters for review in this court. The...