Philco Corporation v. FEDERAL COMMUNICATIONS COM'N, No. 14166.

• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)
• Writing for the Court: FAHY and WASHINGTON, Circuit , and MADDEN, , United States Court of Claims
• Citation: 257 F.2d 656
• Parties: PHILCO CORPORATION, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, National Broadcasting Company, Inc., Intervenor.
• Docket Number: No. 14166.
• Decision Date: 19 June 1958

257 F.2d 656 (1958)

PHILCO CORPORATION, Appellant,
v.
FEDERAL COMMUNICATIONS COMMISSION, Appellee,
National Broadcasting Company, Inc., Intervenor.

No. 14166.

United States Court of Appeals District of Columbia Circuit.

Argued April 16, 1958.

Decided June 19, 1958.

257 F.2d 657

Mr. Henry B. Weaver, Jr., Washington, D. C., with whom Messrs. Thomas M. Cooley, II, and Quinn O'Connell, Washington, D. C., were on the brief, for appellant.

Mr. Joel Rosenbloom, Counsel, F. C. C., with whom Messrs. Warren E. Baker, Gen. Counsel, F. C. C., and Richard A. Solomon, Asst. Gen. Counsel, F. C. C., were on the brief, for appellee.

Mr. John F. Sonnett, New York City, with whom Mr. James E. Greeley, Washington, D. C., was on the brief, for intervenor.

Before FAHY and WASHINGTON, Circuit Judges, and MADDEN, Judge, United States Court of Claims.^*

FAHY, Circuit Judge.

This is an appeal by the Philco Corporation from dismissal by the Federal Communications Commission of Philco's protest of the grant without a hearing of the applications of the National Broadcasting Corporation, intervenor in this court,¹ for renewal of the licenses of its television broadcast station WRCV-TV, of certain functions auxiliary to that station, and of its radio broadcast station WRCV, all in Philadelphia. The Commission dismissed the protest on the ground that Philco lacked standing as a "party in interest" within the meaning of section 309(c) of the Federal Communications Act.²

Philco is not in the industry of broadcasting by either television or radio. It is a manufacturer of radio and electronic equipment. In this business it is in competition with Radio Corporation of America,³ the sole stockholder of NBC. Philco in its protest alleged that RCA had been receiving advertising advantages from NBC over the stations above referred to, that NBC's ownership and operation of television stations are basic prerequisites to its mode of operation as a network, and that its "option time" and "must buy" practices as a network injure Philco in its capacity as an advertiser seeking to use the television medium. Philco sought a hearing on public interest issues involving trade practices of RCA and NBC that allegedly violated antitrust laws and in other ways reflected on the character qualifications of NBC as a licensee. Its protest also claimed, inter alia, that the renewals would result in undue concentration of control of the media of mass communication in the greater Philadelphia area.

We are not now concerned with these allegations of Philco as to why in the public interest the license renewals should not be granted, or with the merits of other controversies between Philco on the one hand and NBC and RCA on the other. Our question is only whether Philco has standing by filing a protest to advance reasons which might influence the Commission in making a decision in the public interest with respect to the renewals. Indeed, assuming such standing we are not now concerned even with the sufficiency of Philco's protest to warrant a hearing, a question not yet passed upon by the Commission.

257 F.2d 658

By the "option time" and "must buy" devices Philco alleges that NBC had rendered the sponsorship of network programs in preferred listening periods "prohibitively expensive" and had foreclosed the use of those periods to Philco on any non-network basis other than spot advertising, thus depriving it of a choice as to the markets in which it might wish to concentrate sponsored-program television advertising, using NBC affiliates, even if it could meet NBC's charges, which it characterizes as "exorbitant."

We need not reach the question whether NBC's "option time" and "must buy" requirements are closely enough related to the renewals in question to give Philco standing to protest. For there is another basis for standing which seems to us sufficient. NBC as we have said is a wholly owned subsidiary of RCA. RCA, in the words of Philco's protest, is "in direct competition" with Philco "as a manufacturer" and the operation of the Philadelphia stations by NBC strengthens RCA's competitive position to such a degree as to cause a direct economic effect on Philco. Philco alleges that the Philadelphia stations have been aiding RCA in its competition with Philco by broadcasting certain programming which features RCA and grants it advertising preferences not available to Philco and other competitors of RCA. The Commission in its decision states the matter as follows:

"The protestant claims that such `preferential publicity\' is exemplified by (1) NBC owned stations inserting the phrase `a service of RCA\' during station identification breaks; (2) `news\' stories broadcast by NBC stations relate to RCA activities `which other news agencies do not find justified by their news value\'; (3) broadcasts of NBC color television programs `again and again\' advise the public that RCA is `the pioneer and developer of compatible color\'; (4) the `Today\' program, a NBC Network presentation, emphasizes its origination, when that is a fact, in `RCA Exhibition Hall\' where RCA products are allegedly on display; and (5) NBC stations incorporate `RCA\' and `RC\' into their call letters, thereby giving RCA an `amount and type of advertising which Philco (and other competing manufacturers) cannot hope to obtain by however a large expenditure.\'"

We need not decide whether the competitive situation between Philco and RCA would have given Philco standing to protest the original grants of the licenses to NBC. The...