National Citizens Committee for Broadcasting v. F.C.C., Nos. 75-1064

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtBefore BAZELON, Chief Judge, WRIGHT and ROBINSON; BAZELON
Citation555 F.2d 938,181 U.S.App.D.C. 1
Parties, 2 Media L. Rep. 1405 NATIONAL CITIZENS COMMITTEE FOR BROADCASTING, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, Elyria-Lorain Broadcasting Co., et al., Intervenors. OWOSSO BROADCASTING COMPANY, INC., Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, KSL, Inc., Intervenor. NATIONAL ASSOCIATION OF BROADCASTERS, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and the United States of America, Respondent, KSL, Inc., Intervenor. WJAG, INC., Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, WHAS, Inc., Louisiana Television Broadcasting Corp., Intervenors. The OGDEN NEWSPAPERS, INC., Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, KSL, Inc., Intervenor (two cases). DAILY TELEGRAPH PRINTING COMPANY, Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, WHAS, Inc., Louisiana Television Broadcasting Corporation, KSL, Inc., Intervenors. AMERICAN NEWSPAPER PUBLISHERS ASSOCIATION, Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, KSL, Inc., Intervenor. The BROCKWAY COMPANY, Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, KSL, Inc., Intervenor. GRAY COMMUNICATIONS SYSTEMS, INC., Petitioner, v. FEDERAL COMMUNICATIONS COMMISSION and United States of America, Respondents, KSL, Inc., Intervenor.
Decision Date01 March 1977
Docket Number75-1614 and 75-1618,Nos. 75-1064,75-1152,75-1379,75-1567,75-1386,75-1387,75-1388,75-1289

Page 938

555 F.2d 938
181 U.S.App.D.C. 1, 2 Media L. Rep. 1405
NATIONAL CITIZENS COMMITTEE FOR BROADCASTING, Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION and United States of
America, Respondents,
Elyria-Lorain Broadcasting Co., et al., Intervenors.
OWOSSO BROADCASTING COMPANY, INC., Petitioner,
v.
UNITED STATES of America and Federal Communications
Commission, Respondents,
KSL, Inc., Intervenor.
NATIONAL ASSOCIATION OF BROADCASTERS, Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION and the United States of
America, Respondent,
KSL, Inc., Intervenor.
WJAG, INC., Petitioner,
v.
UNITED STATES of America and Federal Communications
Commission, Respondents,
WHAS, Inc., Louisiana Television Broadcasting Corp., Intervenors.
The OGDEN NEWSPAPERS, INC., Petitioner,
v.
UNITED STATES of America and Federal Communications
Commission, Respondents,
KSL, Inc., Intervenor (two cases).
DAILY TELEGRAPH PRINTING COMPANY, Petitioner,
v.
UNITED STATES of America and Federal Communications
Commission, Respondents,
WHAS, Inc., Louisiana Television Broadcasting Corporation,
KSL, Inc., Intervenors.
AMERICAN NEWSPAPER PUBLISHERS ASSOCIATION, Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION and United States of
America, Respondents,
KSL, Inc., Intervenor.
The BROCKWAY COMPANY, Petitioner,
v.
UNITED STATES of America and Federal Communications
Commission, Respondents,
KSL, Inc., Intervenor.
GRAY COMMUNICATIONS SYSTEMS, INC., Petitioner,
v.
FEDERAL COMMUNICATIONS COMMISSION and United States of
America, Respondents,
KSL, Inc., Intervenor.
Nos. 75-1064, 75-1152, 75-1289, 75-1379, 75-1386, 75-1387,
75-1388, 75-1567, 75-1614 and 75-1618.
United States Court of Appeals,
District of Columbia Circuit.
Argued Sept. 17, 1976.
Decided March 1, 1977.

Frank W. Lloyd, III, with whom Charles M. Firestone and Henry Geller, Washington, D. C., were on the brief for petitioner in No. 75-1064.

Thomas H. Wall, Washington, D. C., with whom Suzanne Meyer, New York City, Jon H. Marple, B. Dwight Perry and Alan C. Campbell, Washington, D. C., were on the brief for petitioners in Nos. 75-1263 and 75-1387.

Lee Loevinger, Robert R. Bruce, James H. Sneed and Jonathan S. Kahan, Washington, D. C., were on the brief for petitioner in No. 75-1289. Martin Michaelson, Washington, D. C., also entered an appearance for petitioner in No. 75-1289.

Aloysius B. McCabe, Washington, D. C., with whom Michael Yourshaw and Arthur B. Hanson, Washington, D. C., were on the brief for petitioner in No. 75-1567 and intervenor American Newspaper Publishers Association in No. 75-1064.

John P. Southmayd, Washington, D. C., with whom Richard R. Zaragoza, Washington, D. C., was on the grief for petitioner in No. 75-1614.

Robert B. Nicholson, Atty., Dept. of Justice, Washington, D. C., with whom Barry Grossman, Atty., Dept. of Justice, Washington, D. C., was on the brief for respondent, United States of America.

Werner K. Hartenberger, Counsel, F. C. C., Washington, D. C., for respondent F. C. C., Ashton R. Hardy, Gen. Counsel, F. C. C., Daniel M. Armstrong, Associate Gen. Counsel, Charles H. Bell, Jr., Willard R. Nichols and Sheldon M. Guttmann, Counsel, F. C. C., Washington, D. C., were on the brief for respondent, F. C. C. Joseph A. Marino, Gregory Christopher and Stephen A. Sharp, Attys., F. C. C., Washington, D. C., also entered appearances for respondent F. C. C.

Ernest W. Jennes, Washington, D. C., with whom Russell H. Carpenter, Jr., Washington, D. C., was on the brief for intervenors The Washington Post Company and Post-Newsweek Stations, Capitol Area Inc., Nicholas W. Fels, Washington, D. C., also entered an appearance for intervenors The Washington Post Co., et al.

William J. Dempsey, Frederick H. Walton, Jr., and Christopher J. Reynolds, Washington, D. C., were on the brief for intervenor Belo Broadcasting Corporation.

Paul Dobin, Washington, D. C., was on the brief for intervenor Louisiana Television Broadcasting Corporation.

James E. Greeley and Lawrence J. Bernard, Jr., Washington, D. C., were on the brief for petitioner in No. 75-1152.

Richard Hildreth, Washington, D. C., was on the brief for petitioner in No. 75-1379.

R. Russell Eagan and Robert A. Beizer, Washington, D. C., were on the brief for petitioner in No. 75-1618.

Lee M. Mitchell, Washington, D. C., was on the brief for intervenor WHAS, Inc., in Nos. 75-1064, 75-1379 and 75-1387.

Glen A. Wilkinson, Robert W. Barker and William R. Loftus, Washington, D. C., were on the brief for intervenor KSL, Inc.

John H. Midlen and Dennis F. Begley, Washington, D. C., were on the brief for intervenors KNUJ, Inc., Michelson Media and The Post Company.

Louis J. Sirico, Jr., and Martin H. Rogol, Hartford, Conn., filed a brief on behalf of Public Interest Research Group, et al. as amici curiae.

Marcus Cohn, Paul Dobin and Martin J. Gaynes, Washington, D. C., entered appearances for intervenors Elyria-Lorain Broadcasting Co. and WEEU Broadcasting Co.

James P. Holden, Washington, D. C., entered an appearance for petitioner in Nos. 75-1686 and 75-1688.

William J. Dempsey and Christopher J. Reynolds, Washington, D. C., entered appearances

Page 943

for intervenors The Hearst Corporation and Scripps-Howard Broadcasting Co., et al.

James A. McKenna, Jr., Thomas N. Frohock and Steven A. Lerman, Washington, D. C., entered appearances for intervenors General Electric Broadcasting Co., Inc., Forward Communications Corporation, et al. and American Broadcasting Companies, Inc.

Peter D. O'Connell, Washington, D. C., entered an appearance for intervenors Lee Enterprises, Inc., et al.

William M. Barnard, Washington, D. C., entered an appearance for intervenors Houston Post Company, et al.

William J. Potts, Washington, D. C., entered an appearance for intervenor KUTV, Inc.

Frank U. Fletcher, Robert L. Heald and Marvin Rosenberg, Washington, D. C., also entered appearance for intervenors The Chronicle Publishing Company, et al.

Before BAZELON, Chief Judge, WRIGHT and ROBINSON, Circuit Judges.

Opinion for the Court filed by Chief Judge BAZELON.

BAZELON, Chief Judge:

At issue are Federal Communications Commission regulations dealing with one aspect of media ownership concentration: newspaper-broadcast station cross-ownership. Second Report and Order (Order ), 50 F.C.C.2d 1046 (1974), reconsidered 53 F.C.C.2d 589 (1975). 1 In 1970 the Commission proposed rules entirely eliminating newspaper-broadcast affiliation in a common city of operation. Docket 18110, 22 F.C.C.2d 349 (1970). Following a lengthy rulemaking proceeding, the Commission issued the more limited ban challenged here by the National Citizens Committee for Broadcasting, the Justice Department and various media interests. 2 In relevant part, the rules: 3

1) forbid the future formation or transfer of co-located newspaper-broadcast combinations 4;

2) preserve existing combinations except those in communities served by only one daily newspaper and one broadcast station encompassing the community with a city grade signal; in the latter cases, one of the interests must be divested within five years. 5

Page 944

Under the latter rule, roughly 90% of existing combinations are grandfathered. For the reasons expressed below, we affirm the prospective ban but vacate the rules dealing with existing combinations.

I. THE RULEMAKING PROCEEDING AND ORDER

A. The Proceeding.

The Commission has long been aware that concentrated ownership threatens the public interest in a diversified mass communications media. The Commission's first multiple ownership rules, adopted in the 1940's, prohibited any party from owning or controlling more than one broadcast station in the same broadcast service in the same area. 6 As a result of the AM radio rules, divestiture was ordered in 24 cases. 7 The rules have since been tightened several times, most recently in the early stages of Docket 18110 to prohibit the common ownership of more than one broadcast station of any type in the same service area. 8 The Commission enacted these rules without compiling a substantial record of tangible harm; it rested instead on its belief that "the effects of competition or its absence," are "not readily susceptible of quantitative ascertainments." 29 Fed.Reg. 7535, 7537, Docket 14711 (1967). The Commission has always viewed diversification as a factor of central importance in comparative license hearings. 9

Page 945

In 1970 the Commission broadened the scope of ongoing rulemaking proceedings, Docket 18110, to consider whether newspaper-broadcasting affiliation was in the public interest. 10 22 F.C.C.2d 339. Citing figures indicating the high incidence of newspaper-television affiliation, 11 and the popular dependency on these media as information sources, the notice of proposed rulemaking stated that, as with two television stations, it is not "desirable that these two organs . . . be under the same control in any community." Id. at 344, 346. The Commission suggested that promotion of media competition and maximum diversification of media viewpoints might require the separation of all co-located newspaper-broadcast combinations. Since the Commission contemplated allowing divestiture to take place over five years under favorable tax treatment, 12 it expressed confidence that such a rule would produce no more than minimal economic losses. Id. at 347-48. Comments were invited.

Not surprisingly, the proposed rules generated considerable interest. Nearly 200 parties filed comments. In addition, roughly 25 major studies were lodged, Order at 1090-1094, although as will be explained in Section IV-A infra, the studies were of surprisingly little value. 13 In March 1974, the Commission requested additional comments dealing primarily with the central problem of newspaper-television cross-ownership. 45 F.C.C.2d 768. Forty eight parties filed fresh comments. 14 Three days of oral argument were held and the Order was released on January 31, 1975.

B. The Order.

After summarizing the comments and studies...

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