Tri-State Broadcasting Co. v. Federal C. Com'n

• Decision Date: 16 March 1938
• Docket Number: No. 6931.,6931.
• Citation: 96 F.2d 564,68 App. DC 292
• Parties: TRI-STATE BROADCASTING CO., Inc., v. FEDERAL COMMUNICATIONS COMMISSION (RODERICK, Intervenor)
• Court: U.S. Court of Appeals — District of Columbia Circuit

68 App. DC 292, 96 F.2d 564 (1938)

TRI-STATE BROADCASTING CO., Inc., v. FEDERAL COMMUNICATIONS COMMISSION (RODERICK, Intervenor)

No. 6931.

United States Court of Appeals for the District of Columbia.

Decided March 16, 1938.

Arthur W. Scharfeld, Philip G. Loucks, and Joseph F. Zias, all of Washington, D. C., for appellant.

Hampson Gary, George B. Porter, and Fanney Neyman, all of Washington, D. C., for appellee.

James H. Hanley and Guy Mason, both of Washington, D. C., for intervenor.

Before GRONER, Chief Justice, and STEPHENS and MILLER, Associate Justices.

STEPHENS, Associate Justice.

This is an appeal under Section 402(b) (2) of the Communications Act of 1934, 47 U.S.C.A. § 402(b) (2),¹ from an order of the Broadcast Division of the Communications Commission. Dorrance Roderick, the intervenor in this court, had made application before the Commission for a construction permit for the erection of a new broadcasting station at El Paso, Texas, with unlimited hours of operation on a frequency of 1500 kilocycles and a power of 100 watts. The appellant, Tri-State Broadcasting Company, was already operating stations KTSM and WDAH in El Paso. These stations share time on a frequency of 1310 kilocycles and for practical purposes may be treated as one station. The appellant was permitted to intervene in the proceedings before the Commission upon allegations that there were insufficient new sources of revenue to insure the financial stability of the proposed new station, that advertising revenues to be received by it would diminish those then being received by KTSM, that the consequent financial loss to KTSM would result in deterioration of its service and injury to the public, and that there was no need for the establishment of a new station in El Paso. After a hearing on the application the examiner submitted his report and recommended that the application of Roderick be granted. Exceptions to the examiner's report and request for oral argument before the Broadcast Division were filed by the appellant, and the applicant Roderick also requested oral argument. This was granted and had. Thereafter, the Commission granted the application and filed its statement of facts and grounds for decision. The appellant then petitioned the Commission en banc for a rehearing — asserting the discovery of new and material evidence bearing upon the question of available advertising for two stations in El Paso. This petition was denied, one Commissioner dissenting. This appeal was then taken. An order was issued by the Commission staying its order granting Roderick's application, pending the determination of the cause on the merits by this court. Roderick thereafter filed a notice of intention to intervene in the appeal.

In the view we take of the case it is necessary to mention but three of the various points which the appellant seems to raise in the course of its statement of reasons for the appeal and in its brief.

1. On the controlling issue of public need of an additional station the Commission found "that there is a public need for said proposed station . . . that public interest, convenience, and necessity will be served through a grant of the application under consideration." This the appellant urges is insufficient as a finding of fact. In this the appellant is correct. In Saginaw Broadcasting Company v. Federal Communications Commission, 68 App. D.C. 282, 96 F.2d 554, decided this day, we have held that to be sufficient to support an order of the Communications Commission findings of fact must include the basic facts from which the ultimate facts, in the terms of the statutory criterion, are inferred by the Commission. The findings above quoted are but findings in the language of the statute. We are unable to determine upon what facts and for what reasons the Commission regarded an additional station as necessary. We cannot review the evidence to determine whether or not there is substantial support therein for findings not made.

2. The appellant urges that the Commission erred in failing to find on the question whether or not ownership of the proposed station by Roderick would result in unfair and destructive competition to the appellant's station because Roderick is the owner of a newspaper in El Paso, so that, as asserted, his joint control of newspaper and broadcasting facilities would give him an unduly advantageous competitive position. We know of no provision of statute or rule of law, and are cited to none, which forbids broadcasting by the owner of a newspaper. The absence of a finding upon the particular topic of Roderick's ownership of a newspaper is therefore not erroneous. On the subject of competition between the proposed station and existing stations the Commission did find as follows:

"While it is anticipated that the presence and operation of additional radio facilities in this city will result in the creation of a competitive situation between the applicant and the licensees of the stations now operated in El Paso, nevertheless, it does not appear, from a review of the testimony and exhibits introduced in this connection, that the expected competition will immediately or ultimately produce adverse effects upon any of these parties or upon public interest generally. On the contrary, when the population figures of this city are analyzed, together with the prevailing business conditions and other related circumstances, we find that the competitive condition so anticipated is justified, and reasonably expected to insure an improved broadcasting service within the City of El Paso. . . ."

This, taken in connection with other findings in terms of the figures regarding population and available advertising, is sufficient on the subject of competition.

3. The appellant complains that certain testimony of Roderick, which was admitted by the Commission over objection, is incompetent. Roderick testified that he had talked to a large number of people, naming them — music teachers, directors of glee clubs and choirs, public officials, club officers, and business men. He was then asked, "What is the general impression you got from all of these people in reference to the necessity of establishing this station?" The examiner ruled that while the witness might not state the details of his conversations with the persons mentioned, he might state the results of his talks with them, and he was finally permitted to answer: "Those I talked to were unanimously of the opinion that another station would be very beneficial, and the majority of them promised financial support to it." And he was permitted to add that these persons made "definite commitments to support the station" and to cooperate with it financially.

This testimony was incompetent. While the Commission under familiar principles is not, as an administrative body, limited by the strict rules as to the admissibility of evidence which prevail in courts, nevertheless, ". . . the more liberal the practice in admitting testimony, the more imperative the obligation to preserve the essential rules of evidence by which rights are asserted or defended. . . ." Interstate Commerce Commission v. Louisville & N. R. Co., 1913, 227 U.S. 88, 93, 33 S.Ct. 185, 57 L.Ed. 431. The testimony admitted was clearly hearsay. It was a statement in effect of what others had told Roderick. Its admission deprived the appellant of the right to...