# Mg-Tv Broadcasting Company v. Federal Communications Commission, Seven Arts Broadcasting Co., Inc., Intervenor > Court of Appeals for the D.C. Circuit · December 20, 1968 · 408 F.2d 1257 URL: https://www.frixlaw.com/law-library/cases/9454409 ## Case - **Full name:** MG-TV BROADCASTING COMPANY, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Seven Arts Broadcasting Co., Inc., Intervenor - **Court:** Court of Appeals for the D.C. Circuit - **Decided:** December 20, 1968 - **Citations:** 408 F.2d 1257; 133 U.S. App. D.C. 54; 14 Rad. Reg. 2d (P & F) 2113; 1968 U.S. App. LEXIS 4411 - **Precedential status:** Published - **Opinion:** Dissent by Leventhal - **Judges:** Leventhal, Bazelon, Robinson - **Cited by:** 15 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9454409 ## Opinion text LEVENTHAL, Circuit Judge, dissenting: The FCC proceeding involved two questions : first, whether a UHF construction permit should be extended; and, second, whether the holder’s application for an assignment should be granted. The court remands, in its own words, “not because the Commission’s decision was necessarily wrong * * * ” but because “questions appellant has raised are substantial enough to require at least a reasoned answer.” I cannot join the majority which, in my view, ignores the realities of the administrative process and snubs the discernible reasons underlying the Commission’s disposition of this case. This record makes plain both that the public interest questions surrounding this assignment have been considered and that they have been resolved in a manner that finds ample support in the record. The fact that the Commission’s decision fails to mention appellant’s pleadings does not undercut the validity of a decision made after taking into account the relevant public interest factors. Any requirement that administrative staffs expressly track through the deftly composed verbiage of appellant’s pleadings ignores the magnitude of the administrator’s busy schedule. 1 A. Failure to Mention Appellant’s Pleadings. Appellant sought, when all is said and done, to block the grant of an extension of a construction permit. Such orders are explicitly insulated from third-party objections by way of a petition to deny. 2 *1267 Appellant adroitly couched his opposition in the form of an application (for a non-vacant station), to be accepted in the alternative as a petition to deny the assignment application. Technically, appellant’s procedural maneuver may circumvent the barrier erected by section 309(c). But certainly it is contrary to general expectation, if not the spirit of the Act, when an extension order is questioned by way of a Petition to Deny an assignment. Appellant has not seen fit to file for reconsideration, although the petition for rehearing is the procedure provided by the Congress for challenging extension orders. 3 It is not surprising, in view of appellant’s ambivalent papers, that a busy Commission failed to comment specifically on MG-TV’s arguments. B. Justification for the Commission’s Order. My primary concern, however, is to point out that the Commission’s decision stands on its merits, that the record reveals a satisfactory explanation for the .delays involved, and further, that settled Commission policies support this extension and assignment. 1. There is no dispute about the first extension. While appellant’s pleadings seek through innuendo to create an aura of bad faith, the fact is that Rappaport, the holder of the construction permit, was sick, and the Commission found no evidence of mala fides. 2. Rappaport’s second request for an extension and subsequent delay in undertaking construction, is a product of his decision to' assign his permit to New Jersey Broadcasting Company, and later decision to assign the permit to Seven Arts. Appellant emphasizes the three-year delay between Rappaport’s application for the assignment to New Jersey and withdrawal of that application. Appellant points also to the admittedly important policy of holding comparative hearings, and argues that its merits should be weighed against those of the proposed assignee. 4 It is suggested that Rappaport’s failure to commence construction work makes inapplicable the policy of allowing permittees to recoup their investment. That no construction work has been commenced is a factor properly cognizable by the Commission, both in a determination to grant an extension, and also in passing on the assignment. Here, there is an obvious explanation for the failure to begin work. The original construction permit authorized building the transmitter at Philadelphia, Pennsylvania; the assignee, New Jersey, planned to locate the transmitter at Camden, New Jersey. Thus, any work undertaken at Philadelphia would have been wasted motion. Nor is Rappaport chargeable with dereliction because as of this time the work has not yet begun. The Commission had his proposed assignment under advisement for three and a half years. During this period the Commission attempted to resolve the problems raised in the various petitions to deny the proposed assignment. Such negotiations involved time, effort, and expenditures. Additional expenses were involved in arranging for the assignment to Seven Arts, after the negotiations with New Jersey failed to produce results. 5 The Commission, which *1268 explicitly considered these claims for re-coupment, found them reasonable, and the record supports the determination. Appellant traces the policy of allowing permittees to recoup investment to the Commission’s objective of fostering UHF development. The contention is that such development is not encouraged by permitting recoupment of merely entrepreneurial expenses. I see no basis on which a court may properly confine an agency to a narrow conception of the entrepreneurial function that sees benefits to UHF development only in terms of tangible work progress. 6 Even before construction is undertaken, time and energy is expended in ascertaining the commercial feasibility of locating a channel in a given area and determining the appropriate site for a transmitter. This is not to say that widespread “trafficking” in licenses should be tolerated. But once an agency has — and I think justifiably — defined a policy of promoting UHF ventures by facilitating assignments of permits, I see no basis for a judicial doctrine that permits recovery of some out-of-pocket expenses, but precludes recovery of others which are realistically necessary and, inevitable for business ventures. Moreover, a rigid distinction between investment in construction and intangibles may serve to encourage token construction and hence economic waste. While the Order did not deal with all these matters, I cannot reasonably insist that the Commission dot every “i” and cross every “t,” to make an order safe from judicial interjection. An oft-reiterated policy, such as that of encouraging UHF development, may be administratively and judicially noticed. An agency’s order will not be set aside even though its findings “leave much to be desired” if its path “can be discerned.” 7 I have no difficulty discerning and following the Commission’s path. It scants balance and perspective to translate a proper concern about trafficking in licenses into an auditor’s obsession with surveillance of a request for reimbursement of a modest sum, not nearly large enough to arouse suspicion as to the presence of “speculative” activity. The Commission expressly passed on the reasonableness of the consideration agreed on by Rappaport and Seven Arts. In view of the well-settled administrative policy in favor of these assignments, and the absence of evidence undercutting Rappaport’s bona fides, I would affirm without hesitation. 3. Comparative hearings and expediency. It is also appropriate to add a word about the proper emphasis to be accorded the policy in favor of comparative hearings. The majority suggests that the mere desire to put the station into service as expeditiously as possible does not outweigh our policy in favor of comparative hearings. But while the Commission may properly consider the latter objective, Congress has clearly decided that general comparatives are not to be required in connection with assignment proceedings. The issue prescribed by Congress is, not who is best qualified, but is the assignee qualified? Appellant does not argue here that the *1269 assignee is not qualified. I do not see why the Commission must exalt a policy of comparative hearings above all other considerations, when there is no question of “bad faith” and when there is a qualified assignee who will expedite operations and give the public the benefit of a working station. It is unrealistic to ignore the duration of comparative proceedings and it does not accord with legislative policy to elevate the objective of comparative hearings to a peak of paramountcy for all situations. In the context of the proceedings before the Commission the admitted value of hearings is just one more factor to be considered. The agency acted reasonably and I see no error of law or abuse of discretion. . Cf. Rio Grande Radio Family Fellowship, Inc. v. FCC, 132 U.S.App.D.C. 128 , 406 F.2d 664 (1968). . When section 309 of the Federal Communications Act was revised, Congress sought to streamline the Commission’s decision-making process. See Hearings Before a Subcommittee on Interstate and Foreign Comm., House of Representatives 96 (86th Cong., 2d Sess.1960). Section 309(c) specifically exempts from the compulsion of formal hearings various routine decisions and also determinations where there had already been an opportunity to litigate the critical issues. The key issue in any licensing proceeding is the award. Thus, Congress saw fit to exempt from hearings petitions for extension which raise routine matters for negotiation between the Commission and the permittee whose merits have already been tested. 47 U.S.C. 309(c) (2) (D) (1964). . This is made very clear in the House Report: “'Subsection (c) of section 309, * * * list several specific exceptions to the 30-day waiting period required by subsection (b). These specific exceptions deal with situations where the matters considered are of minor concern and where the 30-day waiting period and the filing of a petition to deny would serve no useful purpose. The remedy afforded by section 405 of the Act would, however, be available in the event the Commission erred.” H.Rept.No.1800, at 11 (86th Cong., 2d Sess.1960), U.S.Code Cong. & Admin.News 1960, p. 3519. . Ashbacker Radio Corp. v. FCC, 326 U.S. 327 , 66 S.Ct. 148 , 90 L.Ed. 108 (1945). . The breakdown of Rappaport’s expenses is not itemized with great particularity. About $7,000.00 is attributed to post-1962 endeavors. It is fair to assume that these costs related to negotiations involving both assignments. . It is argued that no precedent exists for tolerating the assignment of a “bare” construction permit. Yet there is no dispute that even recent Commission decisions reflect a desire to promote UHF by a lenient policy toward assignments. See Harcourt, Brace and World Co., FCC Report No. 6944 (Jan. 9, 1968) ; Joe L. Smith, 1 F.C.C.2d 986 (1965); Connecticut Radio Foundation, Inc., 8 P & F Radio Reg.2d 162 (1966) (“grants of extensions looking toward assignment of UHF permits to persons who will construct and grants of applications for modifications where construction will be undertaken within a specified time, will foster the institution of additional UHF television service.” Id. at 163.). Moreover, one of the six cases consolidated in the Joe L. Smith proceeding, supra, involved precisely the situation now before the Commission. There the Commission extended a bare construction permit knowing it would be assigned, where another applicant sought the station. . See Colorado Interstate Gas Co. v. FPC, 324 U.S. 581, 595 , 65 S.Ct. 829 , 89 L.Ed. 1206 (1945). --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9454409. Public record. Not legal advice.