WLVA, INC.(WLVA-TV), LYNCHBURG, VA v. FCC

• Decision Date: 04 January 1972
• Docket Number: No. 24702.,24702.
• Parties: WLVA, INCORPORATED (WLVA-TV), LYNCHBURG, VIRGINIA, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Roanoke Telecasting Corporation (WRFT-TV), Intervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

459 F.2d 1286 (1972)

WLVA, INCORPORATED (WLVA-TV), LYNCHBURG, VIRGINIA, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee Roanoke Telecasting Corporation (WRFT-TV), Intervenor.

No. 24702.

United States Court of Appeals, District of Columbia Circuit.

Argued November 1, 1971.

Decided January 4, 1972.

COPYRIGHT MATERIAL OMITTED

Mr. Howard F. Roycroft, Washington, D.C., with whom Mr. Marvin J. Diamond, Washington, D.C., was on the brief, for appellant.

Mr. Charles M. Firestone, Counsel, Federal Communications Commission, with whom Messrs. Richard E. Wiley, Gen. Counsel, and John H. Conlin, Associate Gen. Counsel at the time the brief was filed, Federal Communications Commission, were on the brief, for appellee. Mr. Edward J. Kuhlmann, Counsel, Federal Communications Commission, also entered an appearance for appellee.

Mr. Philip M. Baker, Washington, D.C., for intervenor. Mr. Alexander N. Apostolou, Roanoke, Va., also entered an appearance for intervenor.

Before WRIGHT and TAMM, Circuit Judges, and JOHNSON,^* Chief Judge, United States District Court for the Middle District of Alabama.

J. SKELLY WRIGHT, Circuit Judge:

This appeal¹ presents important and complex questions concerning the need for evidentiary hearings under Section 309 of the Communications Act of 1934, as amended, 47 U.S.C. § 309 (1970). WLVA, Incorporated (WLVA-TV), our appellant, challenges a September 9, 1970 memorandum opinion and order² of the Federal Communications Commission granting without a hearing the application of intervenor Roanoke Telecasting Corporation (WRFT-TV) for a construction permit to make major modifications of its UHF television facilities in Roanoke, Virginia. Specifically, WLVA-TV contends that the Commission abused its discretion in denying its requests for (1) a Carroll hearing³ on WRFT-TV's application, and (2) an Ashbacker consolidated comparative hearing⁴ on both WLVA-TV's and WRFT-TV's allegedly mutually exclusive applications. We conclude that appellant's claims for these hearings were properly denied, and therefore affirm the Commission's order.

I

Under the Commission's table of television allocations, 47 C.F.R. § 73.606 (1971), Stations WDBF-TV, WSLS-TV and WRFT-TV (UHF) operate on Channels 7, 10, and 27 respectively in Roanoke, Virginia, a city of approximately 100,000 nestled in the mountainous terrain of western Virginia.⁵ WDBJ-TV is an affiliate of the Columbia Broadcasting System and WSLS-TV is affiliated with the National Broadcasting Company. Intervenor WRFT-TV, a considerably smaller operation, began broadcasting over Channel 27 in March 1966 as a primary affiliate of the American Broadcasting Company in Roanoke. Because of the limited scope of WRFT-TV's technical facilities, however, the station has encountered continuous and substantial financial difficulties ever since its inception.⁶ As a result, its impact on the existing competitive structure of the local broadcast market has been minimal.

Approximately 45 miles east of Roanoke is Lynchburg, Virginia, a community of approximately 55,000 people, where appellant WLVA-TV, serving as Lynchburg's only operating television station,⁷ broadcasts on VHF Channel 13 as an affiliate of the American Broadcasting Company. Although the Commission's table of allocations treats Roanoke and Lynchburg as separate communities, the spacing is such that WSLS-TV and WDBJ-TV in Roanoke and WLVA-TV in Lynchburg can provide technically acceptable service to both communities.⁸ Roanoke and Lynchburg are therefore considered a single television market (the 67th largest in the nation) by the major audience measurement firms (American Research Bureau and A. C. Nielson Company), the national television networks, national television advertisers, and the Research and Education Division of the Commission's Broadcast Bureau.⁹

As a result, WLVA-TV competes for national and regional advertising with Roanoke television stations WDBJ-TV and WSLS-TV. The technical facilities of WSLS-TV and WDBJ-TV, however, are superior to those currently employed by WLVA-TV. The two Roanoke VHF stations transmit from antennas located on Poor Mountain, situated 13 miles southwest of Roanoke, with an effective radiated power of 316 kw and an antenna height of 2,000 feet. WLVA-TV's antenna is located on Johnson Mountain, approximately 17.5 miles southwest of Lynchburg, and operates with an effective radiated power of 316 kw and an antenna height of only 1,095 feet. Thus while WDBJ-TV and WSLS-TV are able to reach 543,000 and 581,000 television homes respectively, WLVA-TV's overall coverage is 326,000, or approximately 60 per cent of that attained by the two major Roanoke stations.¹⁰

Despite this situation, however, WLVA-TV managed to garner a modest yet consistent profit until 1966. In that year the Evening Star Broadcasting Company, which had purchased the station in 1965 and transferred it to a wholly-owned subsidiary in 1966, made two decisions intended to improve WLVA-TV's competitive position vis-à-vis its Roanoke competitors. First, the Evening Star made sizable capital outlays and incurred sharply increased operating costs in an effort to upgrade the station's physical plant and technical equipment and to improve its public service programming.¹¹ Initially, these increased expenditures produced substantial net operating losses and negative cash flows,¹² but as the beneficial effects of these improvements began to take root, revenues gradually increased with the result that WLVA-TV's cash flow has increased from a negative $19,228 in 1967 to a positive $48,677 in 1968, and 9.1 per cent of total revenues in 1969.

On November 4, 1966, the Evening Star launched the second part of its drive to improve WLVA-TV's competitive standing in the Roanoke-Lynchburg market. On that date, WLVA-TV applied to the Commission for authority to move its facilities 17.5 miles to the northwest, to raise its antenna 1,250 feet, and for waiver of the Commission's spacing requirements.¹³ The proposed transmitter site would be located atop Flat Top Mountain, 17.4 miles from Roanoke and 27.9 miles from Lynchburg. If granted, this modification would enable WLVA-TV to improve its existing signal over the areas it presently serves as well as to extend its Grade B coverage to reach a sizable audience west of Roanoke not presently served by the Lynchburg station.

WLVA-TV's application was opposed by WRFT-TV in Roanoke, by permittees of two Charlottesville UHF stations, and by the Association of Maximum Service Telecasters, Inc. The matter was designated for hearing on nine issues, including "whether a grant of the application would impair the ability of authorized and prospective UHF television broadcast stations in the area to compete effectively, or would jeopardize, in whole or in part, the continuation of existing UHF television service." WLVA, Inc., 15 F.C.C.2d 757, 764 (1968). On November 24, 1969, the hearing examiner issued his initial decision¹⁴ in which he recommended denial of WLVA-TV's application. The examiner concluded that a grant would have an adverse impact on WRFT-TV and that such impact would be detrimental to the public interest. Exceptions were filed and the matter is presently pending before the Commission's Review Board.

Meanwhile, on June 10, 1969, intervenor WRFT-TV applied to the Commission for modification of its own facilities. Roanoke Telecasting Corporation was organized in 1965 to establish WRFT-TV as an affiliate of the American Broadcasting Company in Roanoke. WRFT-TV commenced operations in March 1966 and was granted an hourly network rate of $75 based on predicted ultimate delivery of 10,000 to 18,000 prime time homes. Because of the modest nature of WRFT-TV's technical facilities, however, the station failed even to approach its projected coverage and the hourly network compensation was therefore discontinued in November 1967 when WRFT-TV was delivering only 1,000 prime time homes. The station's financial picture is dismal. WRFT-TV suffered a net cash loss of $41,397 during the first year of operation, $46,729 in 1967, and $52,740 for the first eight months of 1968. By June 1969 the station had lost over $200,000 and the indebtedness has since swelled to over $450,000 and is increasing at the rate of $10,000 per month.¹⁵

In an effort to rectify this situation, WRFT-TV filed its application with the Commission to expand its technical facilities and to move its transmitter to Poor Mountain, the location of WDBJ-TV and WSLS-TV. WRFT-TV presently operates at a site six miles west of Roanoke with an effective radiated power of 21.4 kw and an antenna height of 410 feet. In its application, it proposes to broadcast with an effective radiated power of 250 kw and an antenna height of 2,010 feet, increases of 228.6 kw and 1,600 feet respectively. The new facilities would enable WRFT-TV to cover 46 per cent of the homes able to receive UHF service in the Roanoke-Lynchburg market, with the result that WRFT-TV would duplicate WLVA-TV's ABC network programming in approximately an additional 25 per cent of WLVA-TV's present coverage area.¹⁶

On July 16, 1969, WLVA-TV filed a petition in support of WRFT-TV's application or in the alternative a petition to deny,¹⁷ arguing that "the public interest compels the grant of both its application and the application of WRFT-TV."¹⁸ Because of the detrimental competitive impact a grant of only WRFT-TV's application allegedly would have on WLVA-TV, however, WLVA-TV urged that "should the Commission deny its application, the application of WRFT-TV must also be denied."¹⁹ To support its petition, WLVA-TV incorporated by reference relevant portions of the evidentiary record compiled in the hearing on its own application. It did not, however, submit additional data to substantiate its claim that a Carroll hearing should be held to determine whether the competitive effect of a grant of WRFT-TV's application would cause an overall derogation of service...