Yankee Network v. Federal Communications Com'n

• Decision Date: 14 August 1939
• Docket Number: No. 7250.,7250.
• Citation: 107 F.2d 212
• Parties: YANKEE NETWORK, Inc. v. FEDERAL COMMUNICATIONS COMMISSION (NORTHERN CORPORATION, Intervener). In re Station WMEX.
• Court: U.S. Court of Appeals — District of Columbia Circuit

107 F.2d 212 (1939)

YANKEE NETWORK, Inc. v. FEDERAL COMMUNICATIONS COMMISSION (NORTHERN CORPORATION, Intervener). In re Station WMEX.

No. 7250.

United States Court of Appeals for the District of Columbia.

Decided August 14, 1939.

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Paul D. P. Spearman, Alan B. David, and Frank Roberson, all of Washington, D. C., for appellant.

Hampson Gary, William H. Bauer, Fanney Neyman, William J. Dempsey, and Andrew G. Haley, all of the Federal Communications Commission, for appellee.

Arthur W. Scharfeld, Philip G. Loucks, Joseph F. Zias, and J. P. Tumulty, all of Washington, D. C., for intervener.

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

MILLER, Associate Justice.

Prior to May 29, 1936, eight radio broadcasting stations — including the stations now owned by appellant and intervener herein — were operating in and near Boston, Massachusetts. On that date Intervener, The Northern Corporation (WMEX) was operating on the frequency of 1500 kilocycles, with power of 100 watts night, 250 watts day, local sunset, unlimited time. It applied for a construction permit to operate on the 1470 kilocycle frequency, with 5 kilowatts power, unlimited time, using directional antenna both day and night. The Communications Commission granted the application, without a hearing subject to protest. Thereafter protests were filed by Bay State Broadcasting Corporation (WAAB), appellant's predecessor in interest, and by three other radio broadcasting station licensees. After appearances and hearing the Examiner recommended that all protests be dismissed and the application granted. The Commission acted accordingly, following oral arguments, and issued an order dated May 25, 1938, granting the application of WMEX, effective June 4, 1938. The Yankee Network, Inc., successor in interest of Bay State Broadcasting Corporation, and other licensees, filed petitions for rehearing, which were denied on September 6, 1938, and on September 24, 1938, The Yankee Network, Inc. appealed from the Commission's decision granting the application.

The Commission challenges the power of this court to hear the appeal. It contends in its brief that no appeal is contemplated by the Communications Act¹ from a decision of the Commission granting an application — on behalf of an existing licensee claiming to be economically affected. On oral argument it expanded its contention to include any possible grievance or affectation of interest, electrical, economic or otherwise, although in the present case, aggrievance resulting from affectation of economic interest is alone involved. In Journal Co. v. Federal Radio Comm., 60 App.D.C. 92, 94, 48 F.2d 461, 463,² we recognized the right of an aggrieved person to appeal from a decision of the Commission granting an application. Moreover, we have recently decided the issue adversely to the Commission's contention in Sanders Brothers Radio Station v. Federal Communications Comm., 70 App. D.C. 297, 106 F.2d 321. However, since the Commission has strenuously urged that we reconsider the problem, a thorough analysis of its arguments in the present case will conduce to a final determination of this important question.

The court's jurisdiction depends, in this case, upon the meaning of Section 402(b) (2): "An appeal may be taken * * *. By any other person aggrieved or whose interests are adversely affected by any decision of the Commission granting or refusing any such application."³ Italics supplied It will not be seriously contended that this language should be given its broadest literal meaning. Congress could not have intended to permit an appeal by any person who might suffer pain or sorrow as a result of the Commission's action, because, for instance, he might dislike, generally, all radio broadcasting, or certain phases thereof in particular. The Commission suggests that the necessary implications of the interpretation given to the appeal section in the Sanders Brothers case — permitting appeal by one adversely economically affected — would produce a result almost as extreme and would extend its operation to include newspapers, magazines and other advertising media of all kinds. But there is nothing in the Act to suggest that the section should be extended so far. The Act pertains to radio broadcasting. The Commission's power in this respect is confined to the regulation of those whom it licenses or declines to license to broadcast and to those who provide facilities for broadcasting.⁴ Without deciding whether there may be others who come within the privilege of appeal granted by Section 402(b) (2), it seems obvious that the clause was intended to include existing licensees — assuming they are able to show, in the particular case, actual aggrievance or affectation of interest. Who could have been more in the contemplation of Congress as aggrieved persons than existing licensees, whose very existence and possibility of success depend upon the wise exercise by the Commission of its discretionary powers?⁵

The Commission concedes in its brief that existing licensees may actually be aggrieved by its action in granting new applications.⁶ Moreover, the Commission concedes the possibility of arbitrary action upon its part, which should be subjected to judicial review.⁷ But it contends that however improperly it may have acted in a given case, this court has no jurisdiction to entertain an appeal brought by an existing licensee, under Section 402(b) (2), because, it says, an erroneous decision of the Commission invades no legal rights or legal interests of such a licensee and, under such circumstances, "this court may not, regardless of the merits of the case, assume jurisdiction." It urges that the test by which a person's appealable interest under Section 402(b) (2) may properly be determined is to inquire whether — if that section were not in effect — he would have a right to resort to the District Court for the protection of the legal right or interest which he claims to be aggrieved or adversely affected. Measured by this test, it is contended that appellant in the present case has no appealable interest, for, the Commission says, it has been held many times that, in the absence of statute, a person has no legal right to be free of competition and that injury suffered or threatened by competition is damnum absque injuria.⁸

However, the criterion proposed is not a proper one, for here we are dealing with rights not as they existed at common law but as they exist and are administered under an act of Congress. Cf. Alabama Power Co. v. Ickes, 302 U.S. 464, 484, 485, 58 S.Ct. 300, 82 L.Ed. 374. Many of the acts which have established administrative agencies, such as the Federal Communications Commission, have created rights and interests⁹ as to which administrative remedies must first be exhausted before judicial review may be sought of administrative action concerning them.¹⁰ Such rights are none the less valuable from a practical point of view.¹¹ The Commission concedes that if a statute confers a right upon a licensee to be protected against competition then he has a right to complain, under the authority of Clarksburg-Columbus Short Route Bridge Co. v. Woodring, 67 App.D.C. 44, 89 F.2d 788, rev'd on other grounds, 302 U.S. 658, 58 S.Ct. 365, 82 L.Ed. 509. The dissent in that case, upon which the Commission relies, maintained that the statute conferred no substantive "and therefore no adjective rights" upon the party affected because the statute imposed no duty upon the Secretary of War to consider competitive effects upon that party. It is difficult to reconcile the Commission's position respecting that case with its admission that the Commission — in determining whether public interest, convenience and necessity will be served by the granting of a new license — must consider the effect thereof upon existing licensees.

No language of the present Act, relating to grants of rights to licensees, suggests an intent to recognize or to vitalize any common law rights in radio broadcasting or in the use of frequencies therefor. Some of its language definitely repudiates the idea.¹² The purpose expressly declared in Section 301 and revealed in subsequent sections, is inconsistent with recognition of common law rights. But the Act does definitely recognize the rights of license holders in express terms no less than seven times.¹³ Moreover, in Section 606 of the Act, licensees are referred to as owners of stations. And their ownership is recognized by the Commission in its brief where it says: "It should be noted that as of the date this appeal was taken, Stations WNAC and WAAB were owned and operated by the same licensee, namely, The Yankee Network, Inc." This admission must be read in the light of the fact that no person is permitted to use or operate a radio broadcasting station in the United States except pursuant to a license granted under the provisions of the Communications Act (§ 301). The Act provides that one shall be guilty of a crime if he does wilfully and knowingly operate such a station without a license (§ 501), or even if he shall wilfully and knowingly violate any rule, regulation, restriction or condition made or imposed by the Commission under authority of the Act (§ 502). It is apparent, therefore, that a radio broadcasting station is valueless without a license to operate it. It is equally apparent that the granting of a license by the Commission creates a highly valuable property right, which, while limited in character, nevertheless provides the basis upon which large investments of capital are made and large commercial enterprises are conducted.¹⁴ As it is the purpose of the Act to secure the use of the channels of radio communication by private licensees under a competitive system, those licensees must be protected in that use, not merely from unlicensed stations¹⁵ and unlicensed operators,¹⁶ but from improper activities of licensed stations¹⁷...