Easton Pub. Co. v. FEDERAL COMMUNICATIONS COM'N

• Decision Date: 04 May 1949
• Docket Number: No. 9829.,9829.
• Citation: 175 F.2d 344,85 US App. DC 33
• Parties: EASTON PUB. CO. v. FEDERAL COMMUNICATIONS COMMISSION (ALLENTOWN BROADCASTING CORPORATION et al., Intervenors).
• Court: U.S. Court of Appeals — District of Columbia Circuit

85 US App. DC 33, 175 F.2d 344 (1949)

EASTON PUB. CO. v. FEDERAL COMMUNICATIONS COMMISSION (ALLENTOWN BROADCASTING CORPORATION et al., Intervenors).

No. 9829.

United States Court of Appeals District of Columbia Circuit.

Argued November 18, 1948.

Decided May 4, 1949.

Mr. Eliot C. Lovett, Washington, D. C., for appellant.

Mr. Richard A. Solomon, Counsel, Federal Communications Commission, Washington, D. C., with whom Mr. Benedict P. Cottone, General Counsel, Federal Communications Commission, Mr. Max Goldman, Acting Assistant General Counsel, Federal Communications Commission, and Miss Mary Jane Morris, Counsel, Federal Communications Commission, Washington, D. C., were on the brief, for appellee. Mr. Paul Dobin, Counsel, Federal Communications Commission, Washington, D. C., also entered an appearance for appellee.

Mr. Donald C. Beelar, Washington, D. C., with whom Messrs. Louis G. Caldwell and R. Russell Eagan, Washington, D. C., were on the brief, for intervenor Allentown Broadcasting Corporation. Mr. Reed T. Rollo, Washington, D. C., also entered an appearance for intervenor Allentown Broadcasting Corporation.

Messrs. Geo. O. Sutton, William Thomson and John H. Midlen, Washington, D. C., entered appearances for intervenor Associated Broadcasters, Inc.

Before STEPHENS, Chief Judge, and PRETTYMAN and PROCTOR, Circuit Judges.

PRETTYMAN, Circuit Judge.

This is an appeal from a decision of the Federal Communications Commission.¹ Four applications for an unlimited-time standard broadcast station² in the general area of Allentown-Easton, Pennsylvania, were made to the Commission. The various applications were mutually exclusive. They were consolidated for hearing, evidence was taken, and a proposed decision was promulgated. Exceptions were entered, briefs were filed, and oral argument was presented. Thereafter the Commission announced its findings of fact, conclusions and decision. Petition for rehearing was filed and denied, a memorandum opinion accompanying the final order.

The successful applicant was the Allentown Broadcasting Corporation. Appellant is the Easton Publishing Company. Allentown and Easton are rival cities, so far as this proceeding is concerned, located fourteen miles apart.

The controversy hinges upon that section of the statute³ which provides:

"In considering applications for licenses, and modifications and renewals thereof, when and insofar as there is demand for the same, the Commission shall make such distribution of licenses, frequencies, hours of operation, and of power among the several States and communities as to provide a fair, efficient, and equitable distribution of radio service to each of the same."

Each of the two cities here involved is surrounded by a built-up community of some size. Allentown is about three times the size of Easton, by various standards of measurement, and the same approximate proportion holds if the respective communities are also considered. Allentown already has one standard broadcast station of unlimited time, with 5,000 watts (5 kw.) power. Easton also has one, with 250 watts power. Allentown has, or has under authorization, two more daytime-only stations. Easton gets primary service in the daytime from a New York station.

The case involves a comparative consideration of two communities and of two applicants. In the growing field of radio broadcasting, as more and more frequencies become available and more and more mutually exclusive applications are filed, these comparative hearings and judgments assume greater and greater importance. It is important that the procedural essentials for the cases be established, so that the Commission may proceed with certainty upon its tasks, the courts may perform their review functions without unnecessary impediment to the expeditious disposition of the cases, and potential applicants for licenses and parties to the disputes may know with all possible certainty what the applicable rules are.

The Supreme Court made clear in its opinion in Federal Communications Comm'n v. Sanders Bros. Radio Station⁴ that Congress intended to make broadcasting a competitive business, and that the usual rules relating to the certification of public utilities do not apply. It said (309 U.S. at 475, 60 S.Ct. at page 697, 84 L.Ed. 869): "In short, the broadcasting field is open to anyone, provided there be an available frequency over which he can broadcast without interference to others, if he shows his competency, the adequacy of his equipment, and financial ability to make good use of the assigned channel." Under that view of the statute, the public interest, convenience and necessity to which the Act refers are served by effective competition among strong competitors. Competition, of course, is between broadcasters on different frequencies covering the same area. If there be only one applicant for a given frequency in a given area, the community need for a new station and the relative ability, above the minimum requirements, of the applicant to render service are immaterial. But, if a choice must be made between two qualified applicants, the problem has a different aspect. And, if a choice must be made between two communities, still further considerations are involved. In the latter case, the public interest and an equitable distribution of service may well require a determination of the relative needs of the communities for more service and the relative abilities of the applicants to meet the greater need. In Johnston Broadcasting Co. v. Federal Communications Comm'n, 175 F.2d 351, decided today, we have reaffirmed, in respect to comparative determinations, the requirements laid down in Saginaw Broadcasting Co. v. Federal Communications Comm.⁵ and Tri-State Broadcasting Co. v. Federal Communications Comm.⁶ as essential to valid administrative orders. The present case presents a further phase of the same problem.

The requirement of the statute that the decision of the Commission be not arbitrary is as vital in a choice between communities or applicants as it is in the ascertainment of bare qualifications for a license. Indeed, the need for well-founded judgment in a comparative consideration may be even greater, from the practical point of view, than is such need in a mere affirmation of minimum qualities. If an applicant has not the bare minimum qualifications for a license, no great harm is done by its denial. But a choice between two well-qualified applicants necessarily means a substantial economic denial as well as an economic award. And, in respect to competing communities, the award means denial to one as it means advantage to the other.

The requirement that a choice be premised upon findings of fact which make clear the reason for the choice and make the choice a rational conclusion from the facts, sometimes presents difficulty, because, conceivably, there may be little difference in fact between applicants or between communities. Indeed, it is possible that to an outsider's eye there is no distinguishing factual difference. Conceivably, the choice of either of two applicants or two communities might be within the realm of reason upon the facts. This is true whether the problem be approached from the standpoint of positive characteristics or from the standpoint of comparative need. Two communities may have the same need, or neither may need more service. The courts cannot hold that a new station license must be denied merely because there is no compelling factual difference between the applicants. In such a case, the Commission would indeed have wide discretion. The important task of the courts in that event would be to insure that the factual situation had been fully explored. In that respect, as we pointed out in the Johnston Broadcasting case, supra, the Commission and the court must necessarily rely upon the industry and ability of the competitors for the license.

In the case before us, the Commission stated the basis upon which it acted. It said:

"Upon consideration of the size of the two cities, the existing facilities of each and the amount of radio service available to each, we conclude that Allentown is in greater need of another radio station than Easton; that its need for another radio station is greater than Easton's need for extended services from its existing station, WEST; and that the purposes of Section 307(b) of the Communications Act would be better served by a grant to one of the Allentown applicants than by a grant to either of the Easton applicants."

It made detailed findings of the power, frequency, type and time of the existing and authorized stations and service. It found that each community had one full-time station, that the larger community also had two daytime-only stations, and that the smaller community had daytime primary service from a station outside the area. It described, by findings, each of the applicants and the proposed programs of each. So much is clear.

What facts did the Commission fail to find? As we have pointed out, we cannot assume that there are facts not found. We must look to appellant's contentions to ascertain whether there were any omissions. Appellant is explicit. First, it says that the statute requires the Commission to consider the power and hours of operation of existing stations and that it has not done so; that the comparative results obtained by evaluating the power and hours of operation of the various stations by a point system (i. e., by assigning point values to each feature of each station and thus arriving at comparative composite totals) compels a conclusion contrary to that reached by the Commission. Second, it says that the Commission must find the type of service available to the two communities from the standpoint of present and proposed programs so as to justify its conclusion that one community has greater need than the other for a new station. Third, it says that the Commission was required to value FM service the same as it valued...