National Broadcasting Co. v. Federal Communications Com., 7933.

• Decision Date: 12 September 1942
• Docket Number: No. 7933.,7933.
• Parties: NATIONAL BROADCASTING CO., Inc., v. FEDERAL COMMUNICATIONS COMMISSION (MATHESON RADIO CO., Inc., et al., Intervenors).
• Court: U.S. Court of Appeals — District of Columbia Circuit

132 F.2d 545 (1942)

NATIONAL BROADCASTING CO., Inc., v. FEDERAL COMMUNICATIONS COMMISSION (MATHESON RADIO CO., Inc., et al., Intervenors).

No. 7933.

United States Court of Appeals for the District of Columbia.

On Reargument Decided September 12, 1942.

Writ of Certiorari Granted January 18, 1943.

Mr. D. M. Patrick, with whom Mr. Philip J. Hennessey, Jr., both of Washington, D. C., was on the brief, for appellant.

Mr. Telford Taylor, General Counsel, Federal Communications Commission, with whom Thomas E. Harris, Assistant General Counsel, and Messrs. Harry M. Plotkin and Daniel W. Meyer, all of Washington, D. C., Counsel, were on the brief, for the Federal Communications Commission. Messrs. Charles R. Denny, Jr., and Benedict P. Cottone, both of Washington, D. C., also entered appearances for the Federal Communications Commission.

Mr. W. Theodore Pierson, with whom Mr. Andrew G. Haley, both of Washington, D. C., was on the brief, for Matheson Radio Company, Inc., Intervenor.

Messrs. Arthur H. Schroeder and Geo. O. Sutton, both of Washington, D. C., filed a brief on behalf of Berks Broadcasting Company, Intervenor.

Before GRONER, Chief Justice, and STEPHENS, MILLER, VINSON, EDGERTON, and RUTLEDGE, Associate Justices.

Writ of Certiorari Granted January 18, 1943. See 63 S.Ct. 526, 87 L.Ed. ___.

RUTLEDGE, Associate Justice.

The appeal is from an order of the Commission entered April 7, 1941. The applicant (Matheson Radio Company, Inc.) operates Station WHDH at Boston, Massachusetts, and is intervenor here. Appellant operates Station KOA at Denver, Colorado, upon the same frequency, 830 kc, now 850 kc under the North American Regional Broadcasting Agreement. The order authorized increases in power and time for WHDH. Appellant claims it is aggrieved and its interests are adversely affected by the order. Hence it asserts both a right of appeal and one to hearing by the Commission, which denies both. The principal questions are therefore whether, on the showing made, (1) appellant has standing to appeal; (2) the Commission acted arbitrarily or erroneously in refusing to permit it to intervene as a party in the administrative proceedings.

KOA is a Class I station, operating since 1928 on a clear channel with 50 kw power.¹ By virtue of this classification it was the only station operating on its frequency at night prior to the order now in question. From 1930 WHDH had been a 1 kw station operating daytime only until sunset Denver time. The order modified its license to permit operation for unlimited time and with 5 kw power. No formal or literal modification was made in KOA's license, but modifying the license of WHDH created electrical interference after sunset in KOA's secondary service area. Roughly the region affected is that lying 700 miles or more east of Denver. To accomplish this change, the Commission had to transfer the frequency 850, on which both stations operate, from subdivision (a) to subdivision (b) of Section 3.25 of its rules.² Accordingly the order provided for this transfer.

The substantive injury of which appellant complains consisted therefore in creating new and additional electrical interference, affecting its secondary service area; degrading the status of Station KOA from a clear channel station by reclassifying it; and, in effect though not in terms, modifying its license in these respects. As appears below, appellant also asserts these changes not only affected its interests substantially and adversely, but had like effect upon the public interest, in depriving listeners within the secondary service area of its service and also in jeopardizing the status of this frequency under the North American Regional Broadcasting Agreement.³

The substantive injuries however, both to appellant and to the public, are set forth primarily not to secure substantive redress in this appeal, but (1) to establish appellant's standing to appeal; and (2) to show that appellant had a right to intervene in the Commission's proceedings of which it has been deprived either arbitrarily or erroneously. The case therefore raises again the troublesome question concerning who is entitled to appeal from the Commission's orders and upon what showing, under the nebulous provisions of the statute in this respect;⁴ and the equally difficult, perhaps more unsettled inquiry, who, if anyone, may intervene as of right in its proceedings for granting, denying or modifying a license under the equally cloudy provisions relating to these matters.

I. The Right to Appeal

Appellant has standing to appeal. The statute confers this upon a "person aggrieved or whose interests are adversely affected." Section 402 (b) (2). In Federal Communications Comm. v. Sanders Brothers Radio Station, 1940, 309 U.S. 470, 642, 60 S.Ct. 693, 698, 84 L.Ed. 869, 1037, the Supreme Court held that the licensee of a competing station likely to be financially injured qualifies for appeal. It went further and asserted that Congress "may have been of opinion that one likely to be financially injured by the issue of a license would be the only person having a sufficient interest to bring to the attention of the appellate court errors of law in the action of the Commission in granting the license." (Italics supplied.) "Financially" was inserted by amendment of the opinion after the decision was first handed down. It does not follow that this guarded and speculative dictum makes economic injury the sole criterion of status to appeal, as the Commission and WHDH contend. The Sanders case involved on its facts only financial injury. The court held that sufficient. Though it suggested the possible insufficiency of other kinds of injury, no question concerning them was before it. The decision therefore cannot be taken as deciding such an issue.

There are strong reasons why the dictum should not be accepted as either stating or forecasting the law. Nothing in the statute specifies or requires a showing of financial injury as the exclusive basis to appeal. Nor are the hypotheses tenable that such injury is the only sort, of a substantial kind, likely to occur or that only persons financially hurt will be able or likely to appeal. It is true they probably will have the financial resources necessary for litigation. It does not follow that others, who may be affected adversely though not financially, will be neither willing nor able to appeal.

The contrary assumption ignores the facts that radio broadcasting is not exclusively a matter of business or financial gain, and that it is the public interest, not the private right, which is primarily at stake upon the appeal. Unfortunately, commercial enterprise has taken over the lion's share of the field. Unfortunately, because, when radio was in its infancy, many persons hoped that much of its work would be done by educational, religious and eleemosynary institutions, more than the event has permitted. Notwithstanding the policy which has so favored commercial operators, there is a considerable volume of noncommercial broadcasting. It takes place through stations supported not by advertising or "plugs," but by churches, universities, colleges, charitable foundations and others who have no profit-making revenues. Many still hope that the evils apparently inherent in commercial broadcasting yet may bring about a larger allocation of frequencies to licensees whose objects are not primarily the making of money.

Limiting appeals to persons financially injured would have the practical effect of denying them to nonprofit-seeking broadcasters. Conceivably, in very rare instances, such operators could show financial injury. But obviously they could not do so in the circumstances in which commercial stations are able most frequently to demonstrate its possible incidence. The view cannot be accepted that these stations can appeal only when some action of the Commission has the practical effect of destroying their capital investment. Such a view would not be consistent with the public interest and right which is the foundation of all broadcasting and which primarily the commercial broadcaster's appeal is designed to protect. Federal Communications Comm. v. Sanders Bros. Radio Station, supra. The latter is likely to utilize the public interest as a vehicle for protecting his private standing, however tentative that may be in legal status. Few business institutions rush to the defense of the public weal when they are not affected in any private way. As between such operators, therefore, and the noncommercial broadcaster, the latter cannot be held a knight unworthy, unable or unwilling to battle for the general good in the lists of appellate litigation. Congress had no intention to exclude nonprofit stations from taking appeals, either absolutely or in practical effect. And if they can appeal by showing other than financial injury, so also can commercial operators.

Absence of economic injury however does not amount to presence of other sufficient injury. Appellant asserts it is enough that the order creates electrical interference. This the Commission now denies, in reversal of its apparent position prior to the Sanders decision.⁵ Appellant argues that electrical interference, regardless of amount or effect, creates the right of appeal. To support this it points out that the whole occasion for regulation, including the feature of license, arises from the limited number of frequencies and the chaos electrical interference would cause, indeed did cause,⁶ if there were no authority vested with power of license, allocation and police.

It is not necessary, however, to go so far with appellant. In the present stage of radio, very few changes, either in frequency or in power, can be made without creating some degree of electrical interference. This may range from minute and practically harmless interruption with remote and very occasional listeners in secondary service areas to total obliteration in the primary field....