Massachusetts Bay Telecasters v. Federal Com. Com'n, 13896

Decision Date31 July 1958
Docket NumberNo. 13896,13899.,13896
Citation261 F.2d 55,104 US App. DC 226
PartiesMASSACHUSETTS BAY TELECASTERS, Inc., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, WHDH, Inc., Intervenor. GREATER BOSTON TELEVISION CORPORATION, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, WHDH, Inc., Intervenor.
CourtU.S. Court of Appeals — District of Columbia Circuit

Mr. Henry E. Foley, Boston, Mass., of the bar of the Supreme Judicial Court of Massachusetts, pro hac vice, by special leave of Court, with whom Messrs. James A. McKenna, Jr., and David S. Stevens, Washington, D. C., were on the brief, for appellant in No. 13,896. Messrs. Vernon L. Wilkinson, Washington, D. C., and Laurence S. Fordham, Boston, Mass., also entered appearances for appellant in No. 13,896.

Mr. J. Joseph Maloney, Jr., Boston, Mass., with whom Messrs. Jeremiah T. Riley, Washington, D. C., and Richard Maguire, Boston, Mass., were on the brief, for appellant in No. 13,899.

Mr. Richard A. Solomon, Asst. General Counsel, Federal Communications Commission, with whom Messrs. Warren E. Baker, General Counsel, Federal Communications Commission, and Charles C. McCarter, Counsel, Federal Communications Commission, were on the brief, for appellee.

Mr. William J. Dempsey, Washington, D. C., with whom Messrs. William C. Koplovitz and Harry J. Ockershausen, Washington, D. C., were on the brief, for intervenor.

Before EDGERTON, Chief Judge, and DANAHER and BURGER, Circuit Judges.

DANAHER, Circuit Judge.

The Federal Communications Commission, by its decision released on April 25, 1957, awarded VHF Channel 5 in Boston to WHDH, Inc. (WHDH), intervenor herein. This corporation had been acquired by the Herald-Traveler Corporation in 1946. WHDH, AM and FM licensee, had in 1947 applied for television facilities. Substantial studies and surveys were undertaken to determine community needs. It commenced closed circuit operations and the training of members of its engineering department. It established community development programs in consultation with civic leaders, and since 1948 had cooperated with the Boston Herald-Traveler in experimental local and regional motion picture news coverage for television. Against such background as found by the Commission, and after extensive comparative hearing, WHDH was selected as the "best qualified to bring a service to the public from the standpoint of the operation proposed, the assurance of effectuation of such proposal, and assurance of a continuing awareness of community needs and the meeting of such needs."

Two corporations formed for the purpose of seeking an award of Channel 5, Greater Boston Television Corporation, Inc. (Greater Boston) and Massachusetts Bay Telecasters, Inc. (MBT), have appealed. There had been six applicants1 whose mutually exclusive applications had been consolidated by the Commission's order of June 16, 1954, for hearings with respect to significant differences as to:

"(a) The background and experience of each of the * * * applicants having a bearing on its ability to own and operate the proposed television station;

"(b) The proposals of each of the * * * applicants with respect to the management and operation of the proposed station; and

"(c) The programming service proposed in each of the * * * applications."

Some 13 factors were explored, including local residence, the degree of civic participation and diversification of occupations of the principals, and their experience. The inquiry treated of integration of ownership with management and past broadcast records. Planning and preparation, program policies and proposals, studios and equipment and staff to be employed were gone into. The Commission's policy as to diversification of control of media of mass communications had loomed large in the mind of the Hearing Examiner2 whose views as to the importance of the factor were not followed by the Commission. Again the Examiner was overruled when the Commission refused to accept his condonation of non-disclosure by one of Greater Boston's most important figures who was found knowingly to have concealed his earlier disbarment as a lawyer and his conduct thereafter under an assumed name. It is clear the Commission felt substantial demerit attached to Greater Boston on that account.

Various "preferences" based upon such factors were found in favor of one applicant or another as the Commission evaluated the record.3 Each of the three parties before us prevailed in one or more respects over the other two. The cumulative total weight of the Commission's appraisal of all factors, it said in effect, impelled its award to WHDH.4

I

Both Greater Boston and MBT charge error as to certain rulings by the Hearing Examiner and thereafter by the Commission.

MBT had sought the introduction in rebuttal of certain exhibits designed to illuminate deficiencies in the proposals of its adversaries as to studios, equipment and staffing. As to such deficiencies the Examiner had also refused to hear the opinions of proffered witnesses. As the Commission sustained its Examiner, it observed that in last analysis, it is the Commission itself which must determine the adequacy of the pending proposals and the significance of inadequacies, if any, which might be developed.

Greater Boston charged the Commission had erred in upholding its Hearing Examiner's refusal to receive in evidence certain employment contracts. These instruments had contained stock options in favor of certain proposed key employees, and Greater Boston claimed the evidence was material in support of its showing on the issue of integration of ownership with management. Greater Boston in its amended application of May 3, 1954, had noted that stock options had been granted to "three prospective employees." The parties stipulated that no improvement should be made with respect to the case of any applicant on and after July 1, 1954. Some months later, when the direct cases of the parties were exchanged, Greater Boston for the first time undertook to identify the "employees." Upon objection that the proffer constituted a variance from the application, the contracts were rejected. With the record before it showing, however, that the employees were later extensively cross-examined and that their proposed status was thus developed, the Commission concluded that the Examiner had ruled correctly. It decided that Greater Boston would have been given an unfair competitive advantage, and that the Examiner had properly exercised his discretion.

We have weighed the effect of these challenged rulings and are persuaded that the Commission did not err. The Commission's rule, 47 C.F.R. 1.365, makes provision for amendment to an application, already designated for hearing, by formal petition with service on other parties, which, for good cause shown, may be granted. The Commission acted within its prerogative where Greater Boston had not shown compliance with the requirements of the rule. The Commission found that no applicant had proposed a type of integration of ownership with management which could be called substantial in nature. Quite apart from the basis upon which the Commission's ruling permissibly was rested, it is clear that Greater Boston on the integration issue was deemed to have been adversely affected because of the demerit attaching to the disqualification of its proposed general manager who had played so important a part in the preparation of Greater Boston's amended application and with the presentation of its case.

The Commission found that no one of the applicants was entitled to a preference with respect to the program proposals. It considered that the contentions as to studios and equipment proposals were of no materiality to the ultimate decision. It found that the personnel selected by each applicant had been disclosed to be fully qualified to perform the duties for which each had been selected, and that the staff proposal of each applicant was entirely adequate to effectuate its planned operation.

The Commission concluded, irrespective of the foregoing, that each of the applicants possessed the qualifications to operate a station in the public interest,5 so that the rulings complained of lapse into insignificance in any event. We find no prejudicial error.

II

Both Greater Boston and MBT attack the Commission's refusal to reopen the record to receive newly discovered evidence of alleged antitrust violations on the part of WHDH, including alleged threats by its publisher, one Choate, to use Channel 5 to drive the Boston Globe out of business. We summarize details as to the Boston Globe issue.

Nearly two years after the hearing record had been closed, and more than one year after the Hearing Examiner had issued his Initial Decision favorable to Greater Boston, the Globe Newspaper Company, publisher of the Boston Globe, sought on January 30, 1957, to intervene. The Globe asserted an interest as a direct competitor of the Boston Herald-Traveler Corporation, owner of WHDH. Allegedly, Herald-Traveler's representative Choate, during 1955 and 1956, had urged a merger of the Traveler publications with the Globe papers, and had sought to upset the Globe's financing of its projected new plant. In an affidavit by the Globe's treasurer, one John I. Taylor, it was further charged that on January 31, 1956, Choate had threatened "Of course if I get Channel 5 I may drive you out of business." An affidavit by one Reid charged Choate with saying on March 10, 1956, "Wait until we get our TV station and see what happens." Upon what basis Choate could possibly then have supposed WHDH might ultimately prevail does not appear.

Choate's answering deposition alleged that merger discussions had intermittently occurred over a period of some ten years. He denied allegations of "threats," particularly emphasizing that the Examiner only 27 days earlier than the...

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