Hernstadt v. F. C. C., 80-2228
| Decision Date | 27 March 1981 |
| Docket Number | No. 80-2228,80-2228 |
| Parties | Senator William H. HERNSTADT, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Alfa Broadcasting Company, Intervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Robert W. Healy, Washington, D. C., with whom Larry A. Miller, Washington, D. C., was on the brief, for petitioner.
Lisa B. Margolis, Counsel, F. C. C., Washington, D. C., with whom Robert R. Bruce, Gen. Counsel, Daniel M. Armstrong, Associate Gen. Counsel, C. Grey Pash, Jr., Counsel, F. C. C., and Sanford M. Litvack, Asst. Atty. Gen., John J. Powers, III, and Margaret G. Halpern, Attys., Dept. of Justice, Washington, D. C., were on the brief, for respondents.
John I. Stewart, Jr., Washington, D. C., with whom Victor E. Ferrall, Jr., Washington, D. C., was on the brief, for intervenor, Alfa Broadcasting Co.
Before WALD, MIKVA, and EDWARDS, Circuit Judges.
Opinion for the court filed by Circuit Judge MIKVA.
Senator William H. Hernstadt sought reelection to the Nevada state senate in the 1980 elections. As a candidate for public office, he tried to purchase advertising time from Alfa Broadcasting Company (Alfa), the operator of station KTNV-TV in Las Vegas. Although Alfa was willing to sell the Senator advertising time, it would only sell him "fixed position" spots rather than "run-of-station" (ROS) spots. ROS spots sell for substantially less than fixed position spots because broadcasters do not guarantee that the former will run at any fixed time, or that they will run at all. As their name suggests, ROS spots are shown at the convenience of the broadcaster, to fill in time that would otherwise be unused.
When Alfa refused to sell him ROS spots, Senator Hernstadt filed this complaint with the Complaints and Compliance Division of the Broadcast Bureau of the Federal Communications Commission (FCC or Commission) in August, 1980. He alleged that Alfa The Senator sought review before the Commission. On October 3, 1980, the FCC affirmed the Bureau's decision in a memorandum decision and order. 1 Senator Hernstadt petitioned for review of that order to this court. Because the November 4, 1980, election was imminent, the petition was expedited and oral argument was heard on October 17, 1980. On October 18, 1980, a judgment was entered reversing the Commission. The judgment directed the FCC to order Alfa to make ROS rates available to Senator Hernstadt. 2 This opinion explains the basis of that judgment.
was violating section 315(b)(1) of the Communications Act of 1934 (the Act), 47 U.S.C. § 315(b)(1) (1976). The Complaints and Compliance Division ruled that Alfa did not have to sell Senator Hernstadt ROS spots because the Act does not give nonfederal candidates a right of access to any given type of broadcast time.
"The starting point in every case involving construction of a statute is the language itself." Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 756, 95 S.Ct. 1917, 1935, 44 L.Ed.2d 539 (1975) (Powell, J., concurring). Section 315(b)(1) of the Act provides that during the last forty-five days before a primary election, or the last sixty days before a general election, broadcasters may not charge candidates more than
the lowest unit charge of the station for the same class and amount of time for the same period .... 3
Senator Hernstadt argues that ROS is a charge and that he must be offered ROS rates because this section entitles him to purchase time at a station's "lowest unit charge." Alfa argues that ROS spots are a "class" of time, and that, under the terms of the Act, Alfa must sell the Senator time at the lowest unit charge for the proffered class, but need not sell him any particular class of time. Because neither "class" nor "charge" is defined by the statute, the ambiguous use of these terms cannot be resolved by a simple reference to statutory language.
When a statute's meaning is ambiguous, the paramount rule of statutory construction gives the statute that meaning which fulfills the purpose and intent of the legislature.
See, e.g., Haggar Co. v. Helvering, 308 U.S. 389, 394, 60 S.Ct. 337, 339, 84 L.Ed. 340 (1940). We therefore begin our analysis by examining the purpose and intent of Congress when it adopted section 315(b) (1) in 1972. And because the construction suggested by this analysis is inconsistent with the decision of the agency charged with enforcing the statute, we review the basis of the agency's interpretation of these technical terms.
The present version of section 315(b) was enacted in 1972 as an amendment to an earlier provision dealing with advertising rates for political candidates, and analysis of congressional intent in 1972 must begin with an understanding of the law Congress meant to change. That law was enacted in 1952 when Congress initially addressed rates charged political candidates:
The charges made for the use of any broadcasting station for any of the purposes set forth in this section (facilities for candidates for public office) shall not exceed the charges made for comparable use of such station for other purposes. 4
This "comparable use" provision was designed to protect candidates from discriminatory rates, 5 and is still applicable to rates charged candidates at times other than immediately before elections.
The first regulation interpreting this provision was promulgated in 1963. It stated that the comparable use provision entitled candidates to all discounts available to other advertisers:
All discount privileges otherwise offered by a station to commercial advertisers shall be available to all candidates for public office. 6
Stations charge a wide variety of advertising rates, many of which might be considered discounts under this regulation. Most stations give bulk and frequency (or volume) discounts to advertisers who purchase many announcements. In addition, stations typically offer three rate categories to advertisers who purchase spots that will not necessarily run at any fixed time. The cheapest of these categories is associated with ROS spots which run, if at all, at the convenience of the station; ROS spots can be scheduled at the last minute on an ad hoc basis to fill in gaps in a program schedule. The other two rate categories apply to "preemptible" and "immediately preemptible" spots. A "preemptible" spot is scheduled for a specific time, but the station retains the right to sell the spot to a higher bidder. The original purchaser must receive notice that his announcement is being preempted, and he may also have the right to pay a higher rate to preserve his slot. "Immediately preemptible" spots are cheaper than preemptible spots because they can be sold to a higher bidder without notice and with no option to buy. All three of these rate categories-preemptible, immediately preemptible, and ROS-are cheaper than fixed position spots, which run at a guaranteed time.
The 1963 regulation did not define "discount privileges" and did not indicate which rate categories must be available to candidates as discounts. There was never any doubt that candidates were entitled to volume and frequency discounts on a comparable use basis-that is, if a candidate purchased in bulk, he was entitled to the same discount available to other bulk purchasers. And the FCC construed "discount privileges" as including ROS and similar rates in subsequent cases.
The first of these cases was Triangle Publications, Inc., 23 F.C.C.2d 760 (1967). In that decision, the FCC merely stated that ROS spots are "discount privileges within the meaning of section 73.120(c)(1) of our rules and therefore should be made available to candidates to the extent available to the commercial advertisers." Id. at 760. 7 The Commission gave a more complete explanation of the Triangle decision in WHDH, Inc., 23 F.C.C.2d 763 (1967), though that case involved preemptible, rather than ROS, rates. In WHDH, the Commission held that preemptible rates given to other advertisers must be offered to political candidates because "making available to commercial advertisers two rates for spots while making only the higher rate available to candidates does not comply with the requirements of the statute." Id. at 764. 8
This rationale applied equally to ROS and preemptible 9 rates. If a station was willing to sell a candidate one minute of time between 8:00 p. m. and 11:00 p. m., but only at fixed position rates, and sold other advertisers such minutes on an ROS or preemptible basis, then the candidate was not being offered the rates available to others making comparable use of the station. It is against the background of these decisions 10 that the Ninety-Second Congress
turned its attention to rates charged political candidates under section 315.
In 1952, Congress had been concerned about the rate discrimination practiced by some broadcasters against political candidates. In 1972, Congress focused on rates themselves. The catalyst for action in 1972 was not a problem with the way rates were calculated, but rather concern about the increasing cost of election campaigns. Broadcast rates were, of course, one element in the rising cost of running for office. In 1972, in order to correct this situation, and to implement other reforms designed to preserve the integrity of elections, Congress passed the Federal Election Campaign Act of 1971, S.Rep.No.96, 92d Cong., 1st Sess. 33 (1971)....
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