Appendix — Accuracy in Media, Inc. v. National Broadcasting Co.

IN THE

Supreme Court of the United States

OcTOBER TERM, 1975

No. 75-670

AccurRAcy IN Meni, INc.,

Petitioner

v.

NATIONAL BROADCASTING COMPANY, INC.,

ond Respondent

FEDERAL COMMUNICATIONS COMMISSION,

Respondent on Side of Petitioner

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

ALVIN B. Davis

1625 K Street, N.W.

Washington, D.C, 20006

347-1900

Attorney for Petitioner

Accuracy in Media, Ine.

November 5, 1975

Press or Byron S. ADAMS Paintin, Inc., Wasurncton, D. C.

TABLE 0F CONTENTS

Page

Memorandum Opinion and Order of the Federal Com-

munications Commission ........+eeeeceeeeeees la

Court of Appeals Judgment and Opinions of Septem-

ber 27, 1974 .....cccccccccccccccceveccvcvcsess 34a

Order Granting Rehearing En Bane ......+++++++++ 99a

Order Vacating Order Granting Rehearing En Banc . .100a

Judge Bazelon’s Dissent to Order Vacating Order

Granting Rehearing En Banc .......+++++ee00es 100a

Court of Appeals Order and Opinions of July 11,

DE: otdcceendedssd Pesededeeweseseseedes o8es 150a

la

BEFORE THE

FEDERAL COMMUNICATIONS COMMISSION

WASHINGTON, D.C. 20554

In Re Compiaint or Accuracy 1n Mep1a, Ino.

against

NationaL Broapcastinc Company, Inc.

44 FCC 2d 1027 (1973)

‘Memorandum Opinion and Order

Adopted: November 26, 1973; Released: December 3, 1973

By the Commission: Commissioners Burch, Chairman and

Reid concurring in the result, Commissioners Johnson

and H. Rex Lee absent.

1. The Commission has before it (1) an Application for

Review filed by National Broadcasting Company, Ine.

(NBC) on June 21, 1973, pursuant to Section 1.115(d) of

the Commission’s Rules and Regulations which seeks re-

view of the Broadcast Bureau’s ruling of May 2, 1973 on

the fairness doctrine complaint of Accuracy in Media, Inc.

(AIM) concerning the programs ‘‘Pensions: The Broken

Promise’’ broadcast by the NBC Television Network on

September 12, 1973; (2) on opposition to the Application

for Review filed by AIM on July 6, 1973; and (3) a reply

to the opposition filed by NBC on July 16, 1973."

1 The Commission has also given leave for the filing of the follow-

ing pleadings for its consideration: Comments on NBC’s reply to

its opposition filed by AIM on July 20, 1973; Comments in sup-

port of the Application for Review filed by Radio Television News

Directors Association on July 16, 1973, Columbia Broadcasting

System, Inc (CBS) on July 23, 1973, and National Association of

2a

2. The pleadings of the parties which were before the

Bureau are fully set forth in its ruling, 40 FCC 2d 958

(1973), and need not be repeated here. The Bureau ruled,

inter alia, that NBC’s judgment that the ‘‘Pensions’’ pro-

gram only addressed ‘‘some of the problems involved in

some private pension plans’’ was unreasonable; that the

program did in fact present views advocating one side of a

controversial issue of public importance concerning the

overall performance of the private pension system and the

need for governmental regulations of all private pension

plans; and that NBC had not afforded reasonable oppor-

tunity for the presentation of contrasting views, nor ex-

pressed any intention of doing so in accordance with its ob-

ligations under the fairness doctrine. The Bureau therefore

requested NBC to advise the Commission as to how it

would meet its fairness obligations.

THe APPLICATION FoR REVIEW

3. In seeking reversal of the staff’s ruling, NBC submits

that the Bureau’s decision ‘‘misconstrued the nature of the

program involved,’’ and ‘‘is utterly inconsistent with basic,

firmly rooted fairness doctrine principles... [and] with the

First Amendment itself.’’ NBC states that under estab-

lished Commission practice, ‘‘determination as to what is-

sue has been the basic subject considered in a program, and

whether the licensee has presented balanced coverage of

that issue, are matters on which the licensee’s judgment

must be upheld unless clearly unreasonable or in bad faith,’’

NBC contends that it has made a ‘‘concededly good faith’’

and ‘‘plainly reasonable’’ judgment that the ‘‘Pensions’’

program ‘‘dealt not with the ‘overall performance’ of the

Broadcasters on August 10, 1973; and a reply to the CBS com-

ments filed by AIM on July 27, 1973. The Commission has re-

viewed these additional comments and believes that the matters and

issues which they discuss have been fully raised by the pleadings

of the immediate parties indicated above, and need not be com-

mented upon individually.

ohn —

3a

private pension system, but rather with some problems of

some pension plans.’’ In its description of the program,

NBC states that ‘‘Pensions dealt with the pitfalls and

failures of some private pension plans’’ and ‘‘presented,

among other things, case histories of workers who...

lost their pension benefits by the failure of the company,

its absorption by a conglomerate, or simply by an incom-

petent management or the quirk of an incomprehensible

contract’’; and that ‘‘ While dealing exclusively with such

subjects, the program did provide a framework within

which the problem could be examined by indicating clearly

that there were many private pension plans that worked

satisfactorily ...’’ NBC concludes its characterization

of the program as follows:

The ‘‘Pensions’’ program did not deal with the ques-

tion of what percentage of pension plans fail to per-

form as expected. Nor did it say, expressly or by

implication, that most plans do not perform as ex-

pected. It did not discuss what legislative or other re-

medial action may, or should, be taken. It did not say

that the private pension system should be changed or

eliminated. It was investigative journalism, focusing

on and exposing to public view a significant social

problem, and it did not offer answers to that problem.

4. NBC states that the reasonableness of its judgment

as to the subject matter of the program is supported by

submitted affidavits of its producers, Messrs. Reuven Frank

and David Schmerler. In his affidavit Mr. Frank states

that in deciding upon the subjects for the 1972-1973 ‘‘NBC

Reports”’ series of hour-long news documentaries, NBC

became interested in ‘‘the problem of those private pension

plans which, in fact, failed to provide the promised pen-

sions,’’ such interest initially resulting from ‘‘hearings of

the Senate Labor Committee into the subject and subse-

quently written reports in such publications as ‘Fortune’

magazine’’; and that it was decided that this subject should

4a

be dealt with in the first ‘‘ NBC Report”’ for the 1972-73 sea-

son. Mr. Schmerler states in his affidavit that he was asked

‘*to write and produce a documentary with respect to the

problems caused by the failure of many private pension

plans to pay the money promised by them,’’ and that ‘‘ pre-

liminary research had disclosed ... that the problem was a

continuing one...’’ NBS has also submitted a compilation

of ‘‘descriptions of the program’’ contained in various

newspaper and magazine reviews of the ‘‘Pensions’’ docu-

mentary, * and contends that ‘‘since so many independent

viewers of the program concluded—as did NBC—that its

subject was ...a ‘tough study of the failures of some priv-

ate pension systems’ NBC may not, under any standard, be

held to have been unreasonable in its decision that that was

indeed the subject of its program.’’ NBC further submits

that ‘‘the result would be the same even if there had been

greater diversity among reviewers as to what the ‘Pen-

sions’ program: was about,’’ since ‘‘reasonableness’’ means

that ‘‘even though there could be disagreement as to what

the issue is, if the licensee’s judgment is defensible, it may

not be rejected.”’

5. NBC states that ‘‘The deviation by the staff from the

permissive standards of reasonableness’’ could lead to

‘‘nothing less than administrative chaos’’; that ‘‘if NBC

were required to present a program showing what AIM re-

fers to as successful pension plans in operation ..., some

AIM-of-the-left might well file a fairness complaint saying

that the AIM program painted a too ‘rosy’ picture of pen-

sion plans, and claiming that the original ‘Pensions’ pro-

gram was too restrained in its treatment of pension plan

evils’’; and that ‘‘Other subjects that might... be deemed

raised by the program include: how each company and un-

ion referred to by name actually treat their employees;

2 This material, as well as all other pleadings in this case, is on

file in the Commission’s Washington, D. C., office and is available

for public inspection.

5a

when rights under pension plans should vest in the employ-

ees; to what extent pension rights should be transferable

from one company to another; whether federal legislation

should be enacted and, if so, what kind; whether sufficient

guidelines or laws exist with respect to the investment of

pension funds; whether workers are sufficiently informed

as to the nature of the coverage of their pension plans;

whether corporations should be required to have pension

plans; [and] who should manage funds.’’ NBC submits

that ‘‘This list . . . indicates that to have a fairness doc-

trine that is workable in practice as well as in theory, the

licensee must be given what we believe the staff decision

improperly withholds: the broadest leeway to determine

what subjects to consider and what subjects have been con-

sidered.’’

6. NBC also contends that the Bureau’s ruling ‘‘is incon-

sistent with the declared purpose of the fairness doctrine

... to insure that discussion on public issues [will be] un-

inhibited, robust, and wide-open,’’ and, if upheld, would

force broadcasters ‘‘to take a bland course rather than a

brave one.’’ NBC submits that ‘‘the concept in the staff

opinion [is] that whenever a social problem is exposed on

television, ‘balance’ must be achieved by including ‘posi-

tive’ material to minimize the nature of the problem,’’ and

that this ‘‘concept’’ is ‘‘antithetical to the essence of jour-

nalism itself.’’ In particular, it cites the following extract

frum the submitted affidavit of Mr. J. Edward Murray,

past president of the American Society of Newspaper Edi-

tors:

‘¢ . . it would be commonplace newspaper procedure

that if an editor decided that some private pensions are

flawed or useless, and published a typical expose to

this effect, the expose would simply assume that the

majority of private pension plans were more or less in

acceptable shape. Otherwise, the forces of both law and

business would have corrected so obvious a deficiency.

Dice,

6a

Nevertheless, under the fairness doctrine, as here in-

terpreted, the pension expose would be considered a

controversial issue and the editor told that he should

have given a fairer shake to private pension plans in

his original expose, and failing that, that he must now

run another non-expose presenting the fact that a ma-

jority of private pension plans function satisfactorily.

That dictum, that FCC interpretation in the AIM/NBC

case, if applied to newspapers, would either destroy

the fruits of any investigative reporting, or more than

likely, guarantee that no serious investigative reporting

would be undertaken in the future.’’

NBC states that ‘‘It is simply no answer to these problems

to require NBC to earry yet another pension program deal-

ing with happy pensioners. The concept of such a program

is precisely as unsound journalistically as it would be to re-

quire NBC to include more ‘positive’ material in the ‘ Pen-

sions’ program itself.’’

7. NBC further states that AIM has attempted to use the

staff decision ‘‘to threaten NBC affiliates which carried the

‘Pensions’ program,”’ citing the following excerpts from a

letter sent by AIM to NBC’s affiliated stations on May 23,

1973:

‘*‘The licensee is responsible for what he broadeasts.

If you carried ‘Pensions: The Broken Promise’ and

you have not given your audience a program that

showed the other side of the issues, you have not ful-

filled your obligation under the fairness doctrine. (We

are) sure that you are anxious to fulfill that obligation.

NBC may wish to challenge the F.C.C. on the fairness

doctrine issue, but it is the licensee, not the network,

that may have this used against him in any challenge to

a license renewal. NBC has an obligation not to play

games with your license. We urge you to tell NBC that.

7a

AIM intends to enter notice of this fairness doctrine

violation in the file of each station that carried ‘Pen-

sions: The Broken Promise.’ Please let us know if you

did carry this program and if you have broadcast other

programs that provided the requisite balance. If we

do not hear from you, we shall assume that you carried

the pensions program and have not provided any other

program to balance it.’’

NBC submits that such letter ‘‘is, in and of itself, a demon-

stration of the dangers inherent in the staff opinion.”’

8. NBC further contends that the staff’s ‘‘application of

the fairness doctrine’ is ‘‘inconsistent with the First

Amendment’’ and ‘‘unconstitutional.’’ While NBC ac-

knowledges that the constitutionality of the fairness doc-

trine has been upheld in Red Lion Broadcasting Co. v. FCC,

395 U.S. 367 (1969), and ‘‘understands’’ that the ‘‘valid-

ity’’ of Red Lion was ‘‘reaffirmed by the decision of the

Supreme Court in Columbia Broadcasting System v. Demo-

cratic National Committee, — U.S. — (41 U.S.L.W. 4688,

36 L.Ed.2d 772, May 29, 1973), it submits that ‘‘to say the

fairness doctrine is constitutional is not... to say that each

purported application of it is constitutional.’’ NBC states

that this case deals with ‘‘a licensee’s judgment in the

presentation of news and news documentaries,’’ and that

‘*In no other area is the need for the broadcast deference to

licensee judgment greater, for in no such area are First

Amendment interests [of the broadcaster] greater.’’ NBC

submits that the Commission and the courts have left broad-

casters ‘‘broad leeway for professional judgment’’ in this

area of ne .3 and documentary presentations; that this dis-

cretion ‘‘arises from a recognition that to intrude the Com-

mission too deeply into the processes of broadcast journal-

ism would necessarily inhibit the freedom of that journal-

ism’’; and that ‘‘both the Commission and the courts must

give an extremely ‘hard look’ to any claim that the applica-

tion of the fairness doctrine—or the imposition of sanctions

8a

for alleged failures to comply with it—violates the First

Amendment.”’

9. NBC states that ‘‘These factors are all the more com-

pelling when licensees are engaged in investigative journal-

ism,”’ since ‘If there is a hierarchy within the speech pro-

tected by the First Amendment, investigative journalism is

surely at its apex.’’ In support of this contention, it cites

the importance of 19th century press exposes of the ‘‘ Tweed

Ring’”’ in New York City, the ‘‘ Credit Mobilier scandal’? in-

volving U.S. Senators and Representatives accused of ac-

cepting stock in the company organized to build the Union

Pacific Railroad, the ‘‘seandals during the Grant adminis-

tration,’’ including the ‘‘ Whiskey Ring’’ and ‘‘Navy De-

partment scandal,’’ and more recent press exposes of ‘‘ Tea-

pot Dome’’ and ‘‘Watergate.’’ It states that ‘‘the subject

being investigated by such efforts is so often the government

itself,’’ and that ‘‘To the extent the staff’s opinion requires

even greater accountability to the government itself, it is

simply inconsistent with the ‘long history of disassociation’

and even antagonism that has characterized the relationship

between government and press in our country... [and] as

such ...is violative of the First Amendment.’’ In partic-

ular, NBC cites the following passage from the opinion of

the Court in the recent Columbia Broadcasting System case,

supra, as supporting its First Amendment contentions:

For better or worse, editing is what editors are for;

and editing is selection and choice of material. That

editors—newspaper or broadeast—can and do abuse

this power is beyond doubt, but that is not reason to

deny the diseretion Congress provided. Calculated

risks of abuse are taken in order to preserve higher

values. The presence of these risks is nothing new;

the authors of the Bill of Rights accepted the reality

that these risks were evils for which there was no

acceptable remedy other than a spirit of moderation

and a sense of responsibility—and civility—on the

- see

9a

part of those who exercise the guaranteed freedoms

of expression. 41 U. 8S. L. W. at 4697, 36 L.Ed.2d

at 796.

NBC submits that ‘‘The courts have condemned over the

years, not merely governmental action overtly suppressing

the expression by the press of particular views, but the

subtlest of governmental influences which might mute the

press in the slightest degree or discourage it, even mini-

mally, from performing its role’’; that ‘‘the effect of the

staff decision . . . would inhibit television journalism by

forcing television reporters to engage in a kind of thinking

and practice which has nothing to do with journalism”’;

and that ‘‘it would impose .. . a variety of less obvious

sanctions—e.g., the inhibiting effect upon television jour-

nalists and producers of being obliged to justify to their

superiors and to the Commission the work they have done;

the immense amount of time required—time better spent

preparing new programming—in preparing a ‘defense’ to

similar charges; the ever present threat to license renewals

inherent in such rulings; and the like.”” NBC concludes

that ‘‘the essence of the staff ruling is [that] unless NBC

is prepared to promise further programming setting forth

at still greater length than in ‘Pensions’ the view that the

pension system as a whole is a success, NBC may not

broadcast its program examining some problems in private

pension plans,’’ and that therefore the ruling is ‘‘ineon-

sistent with the most basic precepts of journalism, .. . the

fairness doctrine, ... and the First Amendment itself.’’

Tue Oppostrion

10. In opposition to the Application for Review, AIM

submits that the staff was ‘‘correct in concluding that

‘Pensions: The Broken Promise’ presented views which

were broadly critical of the performance of the entire

private pension system and explicitly advocated and sup-

ported proposals to regulate the operation of all pension

10a

plans’’; that the subjects of ‘‘ portability, vesting, funding,

and fiduciary relationship’’ discussed in the program were

the very subjects of regulatory proposals pending in the

Congress; and that the concluding remarks of the pro-

gram’s narrator, Mr. Edwin Newman, specifically stated

that this was the case. AIM states that NBC’s ‘‘defense’’

that the program only addressed some of the problems in

some pension plans is ‘‘untenable’’ in light of the many

statements presented in the program which emphasized

overall pension plan performance and specific proposals

for the regulation of all private pension plans. AIM also

states that it rejects ‘‘the theory that if the broadcaster

ean find one independent observer who will confirm his

description of the program content, the F. C. C. must agree

that his definition is reasonable’’; that the Commission

‘‘must base its findings on its own analysis of the pro-

gram, taking into account what NBC and the complainant

say about it’’; and that ‘‘The introduction of excerpts from

journalistic comments on the program does nothing to

assist the Commission in carrying out this responsibility.’’

AIM further submits that the Commission should not ‘‘ give

NBC or any other licensee the sole authority to make the

determination as to what subjects have been considered on

a program that has been broadeast’’ because such author-

ity would allow broadcasters ‘‘to define away controversial

issues of public importance that they have aired in a one-

sided way’’ and thereby avoid their fairness doctrine obli-

gations.

11. AIM also disputes NBC’s contention that the effect of

the staff ruling is contrary to the fairness doctrine policy

of ensuring ‘‘uninhibited, robust and wide open’? discussion

of public issues. Citing several Commission statements of

fairness doctrine policy, AIM states that ‘‘NBC has a dis-

torted view of the origins of the fairness doctrine if the

implication [of its contention] is that the licensee is entitled

to use the airwaves to carry an uninhibited presentation of

views that he favors to the exclusion of views of others in

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the community’’; and that ‘‘contrary to NBC’s claim...,

the legislative history and the court cases show that the

purpose of the fairness doctrine was to inhibit broadcasters

by requiring that they present a wide range of community

views.’’ Noting that the Supreme Court in Red Lion,

supra, observed that the Commission was not powerless

to insist that broadcasters fairly cover controversial is-

sues, AIM submits that ‘‘If NBC tells the Commission that

it is unable to present a vigorous discussion of controver-

sial issues while insuring the presentation of a variety of

viewpoints, then the F. C. C. should give serious thought

to following the [Court’s] suggestion of remedial action.’’

12. AIM also takes exception with NBC’s ‘‘view that

if it had to be fair and give the facts and arguments on

both sides of the pensions controversy, it could not do a

good job of investigative reporting.’’ AIM states that this

view is that of ‘‘advocacy journalism’’; that ‘‘The prac-

titioners of this brand of journalism think that ‘good’

journalism is taking sides and rigging your story in order

to influence public opinion to support the side that you

think to be right’’; and that ‘‘most responsible journalists

reject this concept of ‘good’ journalism ... in either the

print or the electronic media.’’ In this regard, AIM sub-

mits a copy of an article on the private pension plan con-

troversy appearing in the Washington Post as showing

that it is ‘‘possible for a good journalist to talk about the

abuses without omitting to put the matter into perspective

and report on the views of those opposed to some of the

features of the bill that was then before the Senate.’’ AIM

states that by comparison the NBC presentation was ‘‘one

sided, emotional and uninformative,’’ and that ‘‘ Advocacy

journalism of the type practiced by NBC in the ‘Pensions’

program and defended by NBC ... is precisely the kind

of journalism that the fairness doctrine should protect the

publie against.’’

13. AIM further states that NBC ‘‘does not question

the constitutionality of the fairness doctrine but... asserts

12a

that the ruling on ‘Pensions’ is unconstitutional’’; and

that this ‘‘argument is extremely murky, with no effort to

describe wherein this ruling differs from many others than

have been made by the Commission in the past.’’ AIM

concludes that ‘‘We believe the Commission should uphold

the staff ruling in the ‘Pensions’ case.’’

Tue ReEpiy

14. In reply to AIM’s opposition, NBC states that con-

trary to AIM’s submission, the ‘‘Pensions’’ program dealt

‘only glancingly’’ with the subjects of portability, vesting,

funding and fiduciary relationship. NBC reiterates its

contentions that the program was ‘‘a broad overview of

some of the problems involved in some private pension

plans,’’ that the program did contain material that placed

‘*the subject matter of the program in focus,’’ and that it

‘attempted to treat the subject in an evenhanded, accurate

and reasonable manner.’’ It states that ‘‘No prior sub-

mission by NBC has contended that the ‘Pensions’ program

dealt with the ‘broad issues of private pension plan per-

formance,’ nor does NBC now contend that ‘evenhanded

treatment’ of controversial issues is impossible, nor that

the ‘Pensions’ program was i» any sense unfair.’’ NBC

also submits that ‘‘It is surely untrue for AIM to attribute

to NBC the view that ‘good journalism is taking sides and

rigging your story,’ or that ‘if it tried to be fair... it

could not do a good job of investigative reporting.’’ NBC

further states that while AIM suggests that such programs

as the ‘Pensions’ documentary should have an ‘‘almost

‘mathematically’ even balance of views,’’ such an ap-

proach to fairness has been rejected by both the Commis-

sion and the courts.

15. NBC submits that ‘‘The critical line in the staff’s

opinion is the finding that the ‘Pensions’ program ‘did in

fact present views which were broadly critical of the per-

formance of the entire private pension system... ’’; that

13a

‘¢The lesson of the staff opinion is apparently that for NBC

to have been ‘fair’ it either should have presented (a)

fewer views which were ‘broadly critical’ or (b) more

views which were not so critical’’; and that ‘‘ Never before

has an opinion of the Commission intruded so deeply into

the very processes of television journalism.’’ Citing various

governmental and private studies, reports, and regulatory

proposals, NBC states that such ‘‘intrusion”’ ‘‘is all the

more striking because with respect to the subject of private

pensions it states a truism to conclude that significant

problems do exist,’’ and that ‘‘This is not what [AIM]

refers to as ‘brainwashing’: it is simply a fact.’’ NBC

submits that ‘‘There is no documentary dealing with and

exposing any social problem to which the reasoning of the

staff opinion could not apply’’; that ‘‘The fairness doc-

trine has never before been interpreted so as to trans-

form a program dealing with a social problem into one ex-

amining, in general terms, the performance of the system

in which the problem is found’’; that ‘‘Any such reading

of the doctrine by the Commission could only limit the

quality and quantity of investigative journalism on tele-

vision’’; and that such a result would be inconsistent with

both the fairness doctrine and the First Amendment.

Discussion

16. Under the fairness doctrine, a broadcaster presenting

one side of a controversial issue of public importance is

obligated to afford reasonable opportunity for the pre-

sentation of contrasting views on that issue in his overall

programming. The Commission has repeatedly stated that

in applying the fairness doctrine the broadcaster ‘‘is called

upon to make reasonable judgments in good faith on the

facts of each situation—as to whether a controversial is-

sue of public importance is involved, as to what viewpoints

have been or should be presented, as to the format and

spokesmen to present the viewpoints, and all other facets

of such programming.’’ Applicability of the Fairness Doc-

l4a

trine in the Handling of Controversial Issues of Public

Importance, 40 FCC 598, 599 (1964). Here NBC does not

dispute the Bureau’s finding that at the time the ‘‘Pen-

sions’’ program was broadcast the overall performance and

proposed regulation of the private pension system con-

stituted a controversial issue of public importance within

the meaning of the fairness doctrine.* Rather, NBC main-

tains that the ‘‘Pensions’’ program only ‘‘dealt with some

problems of some pension plans”’ and that the performance

and proposed regulation of the private pension system

‘‘was not even the subject of the ‘Pensions’ program.”’

The basic issue thus presented by the Application for Re-

view is whether the Bureau erred in its ruling that NBC’s

judgment on these matters was unreasonable. For the

reasons which follow, we affirm the Bureau’s ruling.

17. As NBC emphasizes, the Commission’s role in pass-

ing on any complaint under the fairness doctrine is ‘‘not

to substitute its judgment for that of the licensee ..., but

rather to determine whether the licensee can be said to

have acted reasonably and in good faith.’’ Applicability of

the Fairness Doctrine in the Handling of Controversial Is-

sues of Public Importance, 40 FCC at 599. However, while

this Commission has consistently recognized and upheld

the broadeaster’s discretion to make reasonable, good faith

judgments as to his fairness doctrine responsibilities, we

have also indicated that such diseretion is not unlimited:

In stressing that the licensee has considerable discre-

tion in discharging his fairness obligation, we do not

mean to imply that that discretion is absolute... [Wle

’ The Bureau based this finding on AIM’s uncontradicted sub-

missions that proposals for the regulation of all private pension

plans were pending before the Congress and that such proposals

were opposed in whole or in part by ‘‘various groups and spokes-

men including the National Association of Manufacturers, several

labor unions, the Chamber of Commerce of the United States, and

the Nixon Administration.’’ 40 FCC 2d 958, at 967.

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will intervene if the showing establishes that the lic-

ensee has acted unreasonably. Committee for the Fair

Broadcasting of Controversial Issues, 25 FCC 2d 283,

292 (1970).

As we stated in our Public Notice of July 26, 1963, entitled

‘*Stations’ Responsibilities under the Fairness Doctrine

as to Controversial Issue Programming’’:

In determining compliance with the fairness doctrine

the Commission looks to substance rather than to label

or form... Regardless of label or form, if one view-

point of a controversial issue of public importance is

presented, the licensee is obligated to make a reason-

able effort to present the other opposing viewpoint or

viewpoints. 40 FCC 571, 572 (1963).

The specific question properly before us here is therefore

not whether NBC may reasonably say that the broad, over-

all ‘‘subject’’ of the ‘‘Pensions’’ program was ‘‘some

problems in some pension plans,’’ but rather whether the

program did in fact present viewpoints on ore side of the

issue of the overall performance and proposed regulation

of the private pension system.

18. Our review and determination of this question must

necessarily rest primarily upon the program itself.t The

program opened with the announcement, ‘‘Tonight NBC

reports on Pensions: The Broken Promise’’ and the fol-

lowing statements by unidentified men and women:

Man: I figure I had twenty-three years seniority

filled up, possibly last up until I was in my forty year

* For this reason, NBC’s submitted collection of short ‘‘deserip-

tions of the program’’ gleaned from newspaper and magazine re-

views cannot be considered substantial factors in our determi-

nation here. Such brief and general one-line summaries provide

no information as to what particular views on the subject of pen-

sions may have been presented in the one-hour documentary, and

hence are of little value in determining the applicability of the

fairness doctrine and the validity of the arguments of the parties

with respect to the actual substance of the program.

l6a

sometime at least before I retired and then to look

back and see it all fallen away. Everything that you

planned on. Just seems like a waste of time.

Woman: There must be thousands maybe millions

of them that’s getting the same song and dan-e my

husband got. When they reach their time for retire-

ment there is no funds to pay them.

Manx: This man, Hoffa, on there, retired with a one

point seven million dollar lump/sum pension. And I

can’t get three hundred dollars a month out of them

on there for my retirement.

Man: Where does all this money go that’s been paid

into these pensions.

Man: The pension system is essentially a consumer

fraud, a shell game and a hoax. As a matter of fact,

when you say it’s a consumer fraud, you pay it an

undue compliment, because typically you think of con-

sumer frauds in terms of short transactions .. . but

with the pension system you really have a long term

contract that may run fifty or a hundred years that’s

designed to guarantee the security of our population.

Essentially, you have an insurance contract that can’t

be relied on. You have an insurance contract that

can’t be trusted.

Man: And I think its a terrible thing in this country

where men who work forty-five years have to eat yes-

terday’s bread. And I don’t want to compete on my

old age against other old men on old age running down

a supermarket aisle to get dented cans and stale

breads. I don’t want to look forward to it. So lI

really have nothing to look forward to at sixty-five.

(DANCE MUSIC)

17a

and helps to keep people honest. That’s why these files

are full of pension plans, private pension plans...

The Labor Department has the right to audit them

and to a limited extent, where wrongdoing is dis-

covered, the government may prosecute. Also, the re-

ports are available to anybody who asks to see them,

but as it works out that is meager protection for the

twenty-five million Americans who are in private pen-

sion plans.

There are millions of hopes and dreams in these files.

If experience is any guide, very many of the hopes will

prove to be empty and dreams will be shattered and

the rosy promises of happy and secure retirement and

a vine covered cottage will prove to be false.

By way of example of the complaints filed with the Depart-

ment of Labor with respect to the operation of private pen-

sion plans, the statements of several men and women were

presented, each relating his or her personal experience

with a plan which had failed. The program then presented

interviews with various public figures who commented on

different aspects of the private pension system:

Hersert DenneNBERG: When jou get to be sixty-five,

you’re out of work and you need a source of money

and that’s what a pension plan is supposed to do.

Unfortunately, it’s woefully inadequate. Over half

the people have nothing at all from pension plans and

those that do typically have only a thousand dollars

a year so even if you have social security, most pen-

sion funds are inadequate.

Newman: Many employees form their ideas about

pensions by reading the slick brochures that their

company or union gives them. Most of these booklets

do make a pension seem a sure thing. The many re-

Mr. Edwin Newman’s narration began at the Department

of Labor office where the annual pension reports required concealed by obscure language.

by law are filed: ; ,

; The Senate Labor Committee has been looking at

There is a widely held belief in this country that public these brochures as part of its general study of the

disclosure is a good thing that it inhibits misconduct

strictions and exclusions are buried in fine print or

SO ee »° Meas ‘th

18a

pension problem. Senator Harrison Williams is chair-

man of the committee.

Senator WriuiaMs: I have all kinds of descriptions

of plans here and all of them just suggest the cer-

tainty of an assured benefit upon retirement. Here’s

a man—this was from a brewery, sitting relaxed with

a glass of beer and checks coming out of the air; well,

you see, this gives a false hope, a sense of false se-

curity.

Newman: Senator, the way private pension plans are

set up now, are the premises real?

WituiaMs: The answer is, they are not.

DeNNENBERG: It’s almost an obstacle course and the

miracle is when someone actually collects with the

plan. There have been studies that indicate that most

people won’t collect. I think we need controls of the

same type we apply to insurance companies, your

money should be funded so it’s going to be there at

age sixty-five. Today, it’s almost a miracle if it’s

there at age sixty-five. You have to go to work for

an employer, you have to stay with him, you have to

stay in good health, vou have to avoid layoffs, you have

to take your money, turn it over to the employer, hope

that he invests it safely and soundly, you have to hope

that when you’re age sixty-five the employer is still

around and he’s not likely to be in terms of the high

mortality of business, so there’s almost a sequence of

miracles which you’re counting on.

The remainder of the one-hour program continued along

similar lines. Specific private pension plans which had

failed were cited and discussed in interviews with em-

ployees involved, the discussion dealing with such matters

as the portability and vesting of pension rights, the ad-

equacy of funding and payments upon retirement, and the

fiduciary relationship bet'veen employees and those who

manage the funds. Interspersed with such discussion of

a . ,

ee Ve Cee ee eee ee Ce ee eee =

19a

specific plans which had not adequately covered one or more

of these particulars were the following general statements:

Maw: I lose faith in a government that allows things

like this. Not long ago I was in New York and I saw

that inscription on the Statute of Liberty. And it

sounded wonderful, you know. Give us your tired and

so on. But what it actually said was, give us your

labor; get these honkies here where we can put them

to work for nothing. That’s what it amounted to.

Victor Gorsaum: In the United States we have a

magnificent ability to cover up our owr diseases

; specially the disease of big business. Pensions in

ihe private area are a mockery. They’re a national

disgrace. We know this.

Epwarp Kramer: These people feel who worked all

their lives and let’s say they worked thirty-five, forty

years, and many of them have worked for one employer

for all these years, are, they feel that now that they’ve

retired, they’re going to live a better life... And then

they find themselves in the position that they have no

money, they have no friends. And they live in squalor

and they can’t do these things. So what—they’ve

really been cheated, cheated by the pension system,

cheated by social security, cheated by their employer

and they feel very angry at themselves because I think

in the back of their mind, they knew this was going to

happen. They knew that when the day came that they

would retire, they would be worse off than when they

were working. But they’re afraid to admit it.

Kramer: Going to a movie is a big expense, taking a

bus to a clinic to visit a doctor is a big expense, buying

a new pair of shoes is a big expense, getting ill and

having to get medicine is a big expense. This is where,

if there was an adequate pension system in the United

States along with social security, some of these pro-

blems could be avoided.

20a

Newman: Pension funds have outgrown the laws reg-

ulating them. No government agency has enough

staff or authority to control them...

CuarLes Rurr: We have no real idea of how much

fraud there may be in the pension plan area. But

you’re talking about institutions, the pension plan

area, generally, that deals in hundreds of billions of

dollars. And when you have that much money in-

volved, the federal government ought to take a more

active role than it does.

DreNNENBERG: We regulate insurance completely. We

regulate the agent the contract, reserve, the policies,

the sales technique, the investment, we regulate in-

surance companies from birth to death. And yet we

have a gigantic pension system, almost the size of the

insurance industry, a hundred and fifty billion dollar

business that’s essentially unregulated. Can you

imagine what would happen if we would let insurance

companies do whatever they wanted to? We can’t even

protect the public with full regulation in insurance,

but essentially we have a pension system which is pre-

cisely an insurance plan and which is almost unre-

gulated.

7. Lom

2la

there are five million people receiving about seven

billion dollars in benefits. I think that’s a pretty good

record. That’s not to say that there aren’t a few re-

maining loopholes that need closing but we ought to

make sure that we don’t throw out the baby with the

wash water.

eo * @

Gorrsaum: The solutions in the wealthiest country in

the world is not do what they’ve been doing in terms

of pensions. You fund a pension. You fund it on the

basis of man’s ability to live. You tie it into the cost

of living. The wealthiest country in the world ought

to be able to do it.

Kennern Anperson: You must remember that the

corporation has set this plan up voluntarily. They

have not been required by law to set it up. [Inter-

viewer: So that it gets from the employer to the em-

ployee?] That’s what it amounts to.

Dennenserc: I say it’s the employee’s money and I

think that is the economic fact of life and I think in

terms of the morals of the problem and in terms of the

economics of the problem, that anyone would conclude

that it does belong to the employee and yet it’s not be-

Toward the end of the program, the following statements ing used for his benefit.

were presented as those of ‘‘critics’?’ who recommend ) © ° °

‘‘changes’’ in the private pension system: Anperson: These pension plans are a part of a fringe

Ratrn Naper: I think time is running out. On the

private pension systems. And its abuses continue to

pile up, and if its enormous popular disappointments

begin to be more and more revealed, it might collapse

of its own weight, and social security will have to take

up the slack.

Russet: Hvussarp: Over a good number of years, the

track record is excellent. It’s unfortunate that every

now and then some of the tragic cases make the news-

papers and the headlines. But it’s a question of per-

spective and balance. When you consider that there

are thirty million people covered by the plans, that

benefit package. Like hospitalization insurance and

so forth, but its still a voluntary thing on the part of

the corporation.

Gottsaum: So all I can say is my God how can you

hold to that view. Do you mean, people are supposed

to starve, that people are supposed to live on a sub-

sistence money because they are not unique, and that,

by the way is the same attitude that gives top manage-

ment stock options, gives them retirement after a

small serving period whereas the middle worker, the

lower economic worker takes a terrible beating.

22a

Senator Scuwerker: What we’re proposing to do a

little bit what was done with the bank failure problem.

We didn’t go in and take over the banks but we did, by

means of insurance and federal deposit insurance

corporation come in and guarantee that no depositor

would lose his savings under a certain point. And I

think that’s what we’re saying here, that once a worker

has put in eight years time, once he’s reached a cer-

tain age, once his company’s reached a certain point,

then he doesn’t lose it, regardless of what happens to

his company or the country.

Man: What are they waiting for? What the hell are

they waiting for? Do they have to give us a certain

quota, a certain number of people that have to be

victims? Do they have to give us a certain amount

of money? How many billions must it take before

they do something about this? How many people have

to starve? How many people have to lay on the side-

lines and just hope and pray. How much misery do

they want before they actually act upon it?

Mr. Newman then concluded the program with the fol-

lowing remarks:

This has been a depressing program to work on but

we don’t want to give the impression that there are

no good private pension plans. There are many good

ones, and there are many people for whom the promise

has become reality. That should be said.

There are certain technical questions that we’ve dealt

with only glancingly ... [portability, vesting, funding,

and fiduciary sor MENA

These are matters for Congress to consider and, in-

. deed, the Senate Labor Committee is considering them

now. They are also matters for those who are in pen-

sion plans, If you’re in one, you might find it useful

to take a close look at it.

Our own conclusion about all this is that it is almost

inconceivable that this enormous thing has been al-

lowed to grow up with so little understanding of it and

- < ae) 2 es om 6 are.

}

,

:

23a

with so little protection and such uneven results for

those involved.

The situation, as we‘ve seen it, is deplorable.

19. This review clearly supports the staff’s finding that

‘‘The Pensions program... did in fact present views which

were broadly critical of the performance of the entire

private pension system and explicitly advocated and sup-

ported proposals to regulate the operation of all private

pension plans.’’ 40 FCC 2d at 966. And, as the program

itself noted, such views were presented at a time when the

Congress was engaged in a study of private pension plans

and considering proposed legislation for their regulation—

legislation which was opposed in whole or in part by vari-

ous private and public groups and spokesmen. In its re-

port In the Matter of Editorializing by Broadcast Licen-

sees, 13 FCC 1246 (1949), the Comunission stated:

... In appraising the record of a station in presenting

programs concerning a controversial bill pending be-

fore the Congress of the United States, if the record

disclosed that the licensee had permitted only advo-

cates of the bill’s enactment to utilize its facilities

to the exclusion of its opponents, it is clear that no

independent appraisal of the bill’s merits by the Com-

mission would be required to reach a determination

that the licensee had misconstrued its duties and obli-

gations as a person licensed to serve the public inter-

est. Jd. at 1256; quoted with approval in New Broad-

casting Co. (WLIB), 6 R. R. 258 (April 12, 1950).

We believe that this principle of fairness is applicable

here. Although the ‘‘Pensions’’ program did not spe-

cifically identify or advocate passage of any particular

bill pending in the Congress, it did present views that

existing laws offer only ‘‘meager protection,’’ that ‘‘pen-

sion funds have outgrown the laws regulating them,’’ that

‘‘the federal government ought to take a more active role

24a

than it does,’’ and that ‘‘controls of the same type we

apply to insurance companies’’ are needed. The program

also presented the views of two Senators, one denying the

validity of the ‘‘premises’’ underlying private pension

plans, the other advocating a proposal to guarantee the

vesting of pension rights. And throughout the program,

the entire private pension system was characterized in such

terms as ‘‘essentially a consumer fraud, a shell game and

a hoax,’’ ‘‘ woefully inadequate,’’ a ‘‘mockery,’’ and a ‘‘na-

tional disgrace.’’ As the foregoing review of the program

illustrates, these examples are by no means exhaustive of

the views which were in fact presented and in this regard,

we do not believe it inaccurate to cite Mr. Neuman’s clos-

ing remarks as indicative of the actual scope and substance

of the viewpoints broadcast in the ‘‘Pensions’’ program:

Our own conclusion about all this is that it is almost

inconceivable that this enormous thing has been al-

lowed to grow up with so little understanding of it and

with so little protection and such uneven results for

those involved. The situation, as we’ve seen it, is

deplorable. (Emphasis added).

Given these facts and circumstances, we cannot accept as

reasonable a judgment that the ‘‘Pensions’’ program did

not present views advocating one side of a controversial

issue of public importance within the meaning of the fair-

ness doctrine, that issue being the overall performance

of the private pension system and the need for govern-

mental regulation of all private pension plans.

20. Our conclusion is not based upon a singling out,

‘‘line-by-line’’ or ‘‘statement-by-statement,’’ of isolated

expressions of viewpoints, a procedure we rejected in Na-

tional Broadcasting Co., 25 FCC 2d 735 (1970). Rather

it appears to us to be the only conclusion which can be

drawn upon review of the program in its entirety, and one

which could be avoided only by ignoring a significant and

substantial part of the material presented. We note here

a Se es

oe ee ek ee

ee os

a eh ite 9 Stee

:

25a

that in light of the presentation of so many statements

sharply criticizing the performance of the entire pension

system and strongly recommending the regulation of all

private pension plans, it would be an unrealistic oversim-

plification to characterize the program as one addressing

only ‘‘some problems of some pension plans.’’ The pro-

gram did examine such problems, but it would strain the

most ‘‘permissive standard of reasonableness’? past the

breaking point to imply that the program was confined to

such a limited examination. Indeed, the value of investi-

gative reporting is to raise matters of substantial public

interest, and it would be denigrating this high purpose to

characterize it in such terms, It is difficult to see why a

network would devote its time and effort to a program with

no broad impact or value, and we cannot agree that NBC

has done so here.

21. Having thus presented viewpoints on one side of the

issue of the overall performance and need for regulation

of the private pension system,° NBC was obligated under

the fairness doctrine to afford reasonable opportunity in

its overall programming for the presentation of contrast-

ing views. In its response to the staff’s inquiry, NBC

stated that prior to the ‘‘Pensions’’ program, it had not

‘‘telecast any program dealing extensively with private

pensions,’’ and that it had formulated no definite plans to

present further programming related to the subject of

pensions in the future. 40 FCC 2d at 967. Thus, the only

NBC programming in which contrasting views might have

been presented was the ‘Pensions’? documentary itself.

In a footnote to its Application for Review, NBC appears

to argue that the program, in any event, did afford a

reasonable opportunity for contrasting views in that

‘There were at least 3 statements on the program that

5 We should also point out that a program examining serious

faults in an existing situation can of course present one side of an

issue even though no remedial proposal is presented.

26a

were—by any definition—pro-pension plan.’’’ Here it

cites the above-quoted statements of Messrs. Russell Hub-

bard and Kenneth Anderson and Mr. Neuman’s conclud-

ing remark that there are ‘‘many good [pension plans],

and there are many people for whom the promise has be-

come a reality.’’ We believe, however, that the staff was

correct in its finding that although these statements ‘‘could

be taken to present a contrasting view, they alone cannot

be said to have afforded the reasonable opportunity con-

templated by the fairness doctrine when compared to the

views presented during the remainder of the program.’’

As we have stated, while ‘‘there is no mathematical

formula’’ for achieving fairness, ‘‘the sheer weight on

one side as against the other’’ may indicate that no reason-

able opportunity has in fact been afforded. Committee for

the Fair Broadcasting of Controversial Issues, supra, at

293, As our review of the program indicates, it is not

necessary to apply any ‘‘mathematical’’ formula here to

ascertain that the overwhelming weight of the statements

presented in the program supported the view that the

overall performance of private pension plans was ‘‘deplor-

able’’ and that the pension system should be regulated to

rectify that situation, and that the ‘‘pro-pension”’’ state-

ments cited by NBC were insufficient in either number or

substance to constitute a reasonable opportunity for the

presentation of an opposing viewpoint . The staff, there-

fore, properly requested NBC to advise the Commission

as to how it intended to meet its obligation under the fair-

ness doctrine to afford such opportunity.

22. NBC broadly contends that any affirmance of the

Bureau’s ruling by the Commission would be ‘‘inconsistent

with the declared purpose of the fairness doctrine’’ to in-

sure an ‘‘uninhibited, robust, and wide open’’ discussion

of public issues and would lead broadcasters ‘‘to take a

bland course rather than a brave one.’’ In support of this

conclusion, NBC submits that the ‘‘concept’’ and ‘‘essence”’

of the staff’s decision is that ‘‘whenever a social problem

oe Pat ee et, ta ee Re 209 Be Das

27a

is exposed. . ., ‘balance’ must be achieved by including

‘positive’ material to minimize the nature of the problem’’

and that ‘‘unless NBC is prepared to promise further pro-

gramming setting forth at still greater length than in

‘*Pensions’’ the view that the pension system as a whole

is a success, NBC may not broadcast its program examin-

ing some problems in private pension plans.’’ Such a re-

sult, NBC claims, would be ‘‘antithetical to the essence of

journalism itself’’ and would place the Commission at ‘‘the

center of the journalistic process.’’”’ We cannot agree.

First of all, NBC should understand that our fairness doc-

trine ruling indicates no Commission view as to the merits

of the program, and certainly no suggestion that this par-

ticular program was in any sense flawed or improper. We

have previously stated our recognition of the value of

investigative reporting and our steadfast intention to do

nothing to interfere with or inhibit it. See WBBM-TV, 18

FCC 2d 124, 134 (1969); Hunger in America, 20 FCC 2d

143, 150 (1969). However, while NBC is to be commended

for airing such an ‘‘uninhibited, robust, and wide open’’

presentation of one side of the pensions issue, we cannot

sanction its reluctance to afford a reasonable opportunity

for opposing viewpoints to be heard. This is the crux of

the matter. The issue is not whether NBC or any other

licensee or network is free to deal with an issue as it sees

fit, but whether it may constitutionally be required to pre-

sent the views of others who may see the issue from a dif-

ferent perspective. This issue has been decided adversely

to NBC’s present position in Red Lion Broadcasting Co. v.

FCC, 395 U. S. 367 (1969), unless for some particular

reason the effect of our ruling in this case is to impair

NBC’s capacity to pursue its journalistic function.®

® As the Commission stated in its report In the Matter of Edi-

torializing by Broadcast Licensees, supra:

It is axiomatic that one of the most vital questions of mass

communication in a democracy is the development of an in-

formed public opinion through the dissemination of news and

28a

23. NBC does not dispute that there are many private

and public groups and spokesmen who oppose the view

that the overall performance of the private pension sys-

tem is so ‘‘deplorable’’ as to require remedial legislation.

And we see no impediment to affording the public a rea-

sonable opportunity to be informed of those opposing view-

points and to weigh their merit. As we have often stated,

the opposing views need not be presented in the same

program; there is thus no basis for any claim that our

ruling makes impossible the sort of program NBC has

already presented. NBC was free to determine format,

spokesmen, time, and similar matters, as it thought best.

We are unable to understand what prevented it from af-

fording a further opportunity to those with differing views,

aside from a reluctance to make more time available. Any

such reluctance of course would not be a valid reason under

the fairness doctrine nor a basis for a claim of intrusion

upon its right of free expression. That is a cardinal teach-

ing of the Supreme Court’s affirmance of the fairness doc-

trine which may not yet be fully understood.’

ideas concerning the vital issues of the day ... The Com-

mission has consequently recognized the necessity for licensees

to devote a reasonable percentage of their broadcast time to

the presentation of news and programs devoted to the con-

sideration and discussion of public issues of interest in the

community ... And we have recognized, with respect to such

programs, the paramount right of the public to be informed

and to have presented to it for acceptance or rejection the

different attitudes and viewpoints concerning those vital and

often controversial issues which are held by the various groups

which make up the community. Id. at 1249 [Emphasis

added]

*See Red Lion Broadcasting Co. v. FCC, 395 U.S. 367 (1969) :

Where there are substantially more individuals who want to

broadcast than there are frequencies to allocate, it is idle to

posit an unabridgeable First Amendment right to broadcast

29a

24. Furthermore, neither the staff’s ruling nor our af-

firmance of its decision here holds that NBC must now pro-

duce and broadcast another one-hour documentary ‘‘deal-

ing with happy pensioners”’ or portraying the pension sys-

tem as ‘‘a success.’ As we have stated, NBC’s obligation

is to afford a reasonable opportunity in its overall pro-

gramming for the public to be informed as to the views

of groups or individual spokesmen opposed to the view-

point that the private pension system has performed poorly

and should be regulated. Just as NBC was not required

to present those views in its ‘‘Pensions’’ documentary, it

is not now required to present them in any particular pro-

gram or format. There is no requirement that any precisely

equal balance of views be achieved, and all matters con-

cerning the particular opposing views to be presented and

the appropriate spokesmen and format for their presenta-

tion are left to NBC’s discretion subject only to a standard

of reasonableness and good faith. We note in this regard

that NBC cites a long list of subjects concerning the vest-

ing and portability of pension rights, the adequacy of plan

funding and payments upon retirement, and the fiduciary

relationship in pension plan management, and claims that

under the staff’s analysis and ruling each of these might be

comparable to the right of every individual to speak, write, or

publish. 395 U.S. at 388.

(T)he First Amendment confers no right on licensees to

prevent others from broadcasting on ‘‘their’’ frequencies and

no right to an unconditional monopoly of a scarce resource

which the government has denied others the right to use. 395

US. at 391.

e e *

There is no sanctuary in the First Amendment for unlimited

private censorship operating in a medium not open to all.

‘*Freedom of the press from governmental interference under

the First Amendment does not sanction repression of that

freedom by private interests.’’ 395 U.S. at 392 (Citation

omitted ).

30a

considered a distinct cortroversial issue of public import-

ance entitled to separate treatment under the fairness

doctrine, However, neither the staff’s ruling nor our deci-

sion here gives grounds for such an overly-broad interpre-

tation. While each of the subjec‘s cited is an aspect of

overall pension plan performance, there is no information

before the Commission to indicate that these subjects are

by themselves independent controversial issues of public

importance. NBC may very well consider these subjects

in determining what contrasting viewpoints to present on

the overall issue of the performance and need for regula-

tion of private pension plans, but the applicability of the

fairness doctrine to that issue does not require their wholly

separate treatment or discussion. See National Broad-

casting Co., supra, at 736-37. Under these circumstances

we can see no merit in NBC’s argument that the ruling in

this case is inconsistent with either the purpose of the

fairness doctrine or the journalistic discretion afforded

the broadcaster in determining how to comply with his

fairness obligations.

25. Little more need be said with respect to NBC’s con-

tention that this particular application of the fairness

doctrine marks an unwarranted intrusion into the jour-

nalistie process or is in any way violative of broadcaster

prerogatives protected by the First Amendment. While

we have consistently recognized the journalistic discretion

afforded licensees under our system of broadcasting and

the need for Commission deference to licensee judgments

in matters concerning their news and news documentary

programs, we cannot uphold a patently unreasonable exer-

cise of that discretion which would deny the right of the

public to be informed as to both sides of a controversial

issue which in fact has been presented by such program-

ming. As the Supreme Court stated in affirming the con-

stitutionality of the fairness doctrine

The people as a whole retain their interest in free

speech by radio and their collective right to have the

3la

medium function consistently with the ends and pur-

poses of the First Amendment . . . It is the right of the

viewers and listeners, not the broadcasters, which is

paramount, It is the purpose of the First Amend-

ment to preserve an uninhibited marketplace of ideas

in which truth will ultimately prevail, rather than to

countenance monopolization of that market, whether

it be by government itself or a private licensee. . . Red

Lion Broadcasting Co. v. FCC, 395 U. 8S. 367, 390

(1968) [Emphasis added].

If the broadcaster’s First Amendment interest in freedom

of journalistic expression is greatest in the area of the

presentation ef news and news documentaries, then the

right of the public to have access to the various competing

viewpoints on controversial issues discussed in such pre-

sentations is certainly no less compelling. News and news

documentaries usually treat of public affairs, and for this

reason perhaps no other vehicles of broadcast speech

should function more consistently with the First Amend-

ment’s purpose of fostering ‘‘uninhibited, robust, and wide

open’’ debate with respect to the public issues which they

present and discuss. NBC has a journalist’s role; it has

an additional role as a public trustee of providing a forum

for diverse views on public issues. The two roles are not

incompatible.

26. We note NBC’s reliance on the recent decision of the

Supreme Court in Columbia Broadcasting System v. Demo-

cratic National Committee, 412 U. S. 94, 36 L. Ed. 2d 772

(1973) which held that neither the public interest standard

nor the First Amendment requires broadcasters to sell

commercial time to persons wishing to discuss controversial

issues. Although NBC cites the Court’s affirmation of

licensee discretion in the selection and choice of broadcast

material as controlling the questions presented here, see

412 U.S. 124, 36 L. Ed. 2d at 796 (1973), there is nothing in

the Court’s opinion to suggest that such journalistic dis-

32a

eretion relieves the broadcaster of his obligation to the

publie to cover fairly those issues which he in fact pre-

sents. To the contrary, the Court emphasized that con-

centrating the ‘‘allocation of journalistic priorities”’ in the

licensee ‘‘gives the public some assurance that the broad-

easter will be answerable if he fails to meet its legitimate

needs,’’ 412 U.S. at 125, 36 L. Ed. 2d at 796. Similarly, in

rejecting the contention that ‘‘the Fairness Doctrine per-

mits broadcasters to preside over a ‘paternalistic’ regime,’’

the Court stated:

That doctrine admittedly has not alwa. brought to

the public perfect or indeed even consistently high

quality treatment of all public events and issues; but

the remedy does not lie in diluting licensee responsi-

bility . . . [W]hile the licensee has discretion in ful-

filling his obligations under the Fairness Doctrine, he

is required to ‘‘present representative community

views and voices on controversial issues which are of

importance to his listeners.’’ 412 U. S. 94, 36 L. Ed. 2d

at 799-800 [Emphasis added]

We therefore can see no valid First Amendment ground

for allowing the private journalistic interests of licensees

to destroy their public obligation to afford a reasonable

opportunity for the presentation of contrasting views on

controversial issues raised in news and news documen-

taries. As the Court held in its decision in Red Lion, supra:

There is nothing in the First Amendment which pre-

vents the Government from requiring a licensee to

share his frequency with others and to conduct him-

self as a proxy or a fiduciary with obligations to pre-

sent those views and voices which are representative

of his community and which would otherwise, by neces-

sity, be barred from the airwaves. 395 U. S. 367, 389.

We have discussed these matters at length, and perhaps

somewhat repetitiously, because, although not novel, they

33a

are important and we wish to be perfectly clear, to the

end that licensees will feel no improper constraint but will

be reminded of their legal obligations.

27. One further matter deserves attention here. Infor-

mation before the Commission indicates that pending our

review of the Bureau’s ruling in this matter, AIM sent

correspondence to NBC affiliates stating that it would enter

notice of the staff’s finding in the renewal file of each

station carrying the ‘‘Pensions’’ program and requesting

that it be advised as to whether or not the affiliate had

broadcast the program, and, if so, what it had presented

to comply with its fairness obligations. AIM should be

advised that while licensees remain ultimately responsible

for the programming which they carry, the Commission

has held that they may initially look to network action for

compliance with broadcast obligations originating with

network programming . See Blair Clark, 11 FCC 2d 511

(1960). More importantly, AIM should note that under

the Commission’s Rules and Regulations a party adversely

affected by a staff ruling issued pursuant to delegated

authority may seek review of that ruling by the full Com-

mission as a matter of right. See 47 C. F. R. See. 1.115.

28. Accordingly, Ir Is Orperep, That NBC’s Applica-

tion for Review Is Dentep. It is further ordered that NBC

submit a statement within 20 days of the date of this deci-

sion indicating how it intends to fulfill its fairness doctrine

obligations in accordance with this opinion.

FeperRAL ComMMUNICATIONS COMMISSION

Vincent J. MuLLINsS

Secretary

34a

UNITED STATES COURT OF APPEALS

DISTRICT OF COLUMBIA CIRCUIT

No. 73-2256.

NationaL Broapcastine Company, Inc., Petitioner,

v.

FEpERAL ComMUNICATIONS ComMIssIon and the

Unirep States or America, Respondents,

Accuracy rn Mep1, Inc., Intervenor.

Argued Feb. 21, 1974.

Decided Sept. 27, 1974.

Order Vacating Opinion Dee. 13, 1974.

Orders March 18 and 19, 1975.

Dissenting Opinion June 2, 1975.

Judgment Vacated July 11, 1975.

Before Fany, Senior Circuit Judge, and Tamm and Lev-

ENTHAL, Circuit Judges.

LevenTHAL, Cireuit Judge:

. On September 12, 1972, the television network of the Na-

tional Broadcasting Company broadcast its documentary

entitled ‘‘Pensions: The Broken Promise,’’ narrated by

Edwin Newman. On November 27, 1972, Accuracy in

Media (AIM) filed a complaint with the Federal Commu-

nications Commission charging NBC had presented a one-

sided picture of private pension plans. The handling of

this case by the Commission will be discussed in more de

tail subsequently (section II). For introductory purposes

35a

it suffices to say that on May 2, 1973—as it happens, the

same day NBC received the George Foster Peabody Award’

for its production—the Commission’s Broadcast Bureau

advised NBC that the program violated the Commission’s

fairness doctrine.? That decision was upheld by the Com-

mission. We reverse.

I. Tue Procram

The ‘‘Pensions’’ program is the heart of the case, and

for that reason it is set out in Appendix A to this opinion.

For convenience, we will summarize the main outlines of

the program—with notation that certain aspects are dealt

with more fully subsequently.

The ‘‘Pensions’’ program studied the condition under

which a person who had worked in an employment situa-

tion that was covered by a private pension plan did not in

fact realize on any pension rights. Its particular focus

was the tragic cases of aging workers who were left, at the

end of a life of labor, without pensions, without time to de-

velop new pension rights, and on occasion without viable

income.

The program had no set format, but its most prominent

feature was a presentation of tragic case histories, often

through personal interviews with the persons affected.

One group of workers lost pension eligibility when their

company decided to close the division in which they had

worked. The first of these was Steven Duane, who after

17 years with a large supermarket chain, lost his job as

foreman of a warehouse when the company closed the ware-

1In addition to the Peabody Award, the program was awarded

a Christopher Award, a National Headliner Award, and a Merit

Award of the American Bar Association. It was also an Emmy

nominee. See Schmerler Affidavit 10, JA 121-22.

2 See Letter of FCC to NBC, May 2, 1973, JA 55, 66-67.

36a

house and discharged all its employees, leaving them with

no job and no pension rights. Now in his fifties, he felt

ill-used and frightened of the future.

There were a number of other specific examples of em-

ployees terminated by closing of plants or divisions. The

program also focused on the problems of vesting, the years

of service with the company required for a worker to be-

come eligible under its pension plan. NBC interviewed

employees with many years of service who were suddenly

discharged just prior to the date on which their pension

rights were to have become vested. Thus Alan Sorensen

asserted that he was the victim of a practice—a ‘‘very

definite pattern’’—under which his employer, a large de-

partment store chain, fired men just prior to vesting, as-

signing ‘‘shallow’’ reasons to men who had served with

records beyond reproach.

A similar account was given by Earl Schroeder, an ex-

ecutive fired by Kelly Nut Company, after he more than

met his 20 years of service requirement but was six months

shy of the age 60 condition,

The program also set forth abuses in the literature given

employees ostensibly explaining their plans—pictures of

contented retirees and words comprehensible only to the

most sophisticated legal specialist. It took up examples

where the company had gone bankrupt prior to their date

of retirement, leaving the employees without pension funds.

The documentary gave instances of pensions lost for lack

of portability, citing plans that required the employee be

a member of the same local for the requisite period. NBC

interviewed a number of teamsters who had worked for

the same employer for over twenty years, but who later

found that certain changes in work assignment entailed

changes in union local representation and ultimately loss

of pension.

Much of the program was a recount of human suffering,

interviews in which aging workers described their plight

37a

without comment on cause or remedy. They told of long

years of working in the expectation of comfortable retire-

ment, finding out that no pension would come, having to

work into old age, of having to survive on pittance incomes,

Interspersed with these presentations by workers were

comments by persons active in the pension field, public

officials, and Mr. Newman.

None of those interviewed—and these included two

United States Senators, a state official, a labor leader, a

representative of the National Association of Manutac-

turers, a consumer advocate, a bank president, and a social

worker—disputed that serious problems, those covered by

the documentary, do indeed exist. Some of the comments

related to the overall performance of the private pension

system. We shall discuss these later (section VI B). In

addition to comments on the private system generally, there

were isolated expressions of views on the related but none-

theless quite distinct issue of the wisdom of reliance on

private pensions, regardless of how well they function, to

meet the financial needs of retirees.* Finally, several

speakers gave broad, general views as to what could be

done.*

There were also comments on legislative reforms that

might be taken to cope with problems, These will be dis-

cussed separately in part VI D of this opinion.

Concluding Remarks

It may be appropriate to quote in full the concluding re-

marks of narrator Edwin Newman, since the FCC consid-

ered them ‘‘indicative of the actual scope and substance of

ml

3 See Dennenberg Statement, Tr. at 4; Kramer Statement, Tr. at

13-14.

4 See Dennenberg Statement, Tr. at 5; Newman description of

Nader ition, Tr. at 18; Hubbard Statement at 18; Anderson

were Tr. at 18-19; Gotbaum Statement, Tr. at 18; Schweiker

Statement, Tr. at 19.

38a

the viewpoints broadcast in the ‘Pensions’ program.’’ He

said:

Newman: This has been a depressing program to work

on but we don’t want to give the impression that there

are no good private pension plans. There are many

good ones, and there are many people for whom the

promise has become reality. That should be said.

There are certain technical questions that we’ve dealt

with only glancingly, portability, which means, being

able to take your pension rights with you when you go

from one job to another, vesting, the point at which

your rights in the pension plan become established and

irrevocable.

Then there’s funding, the way the plan is financed so

that it can meet its obligations. And insurance, mak-

ing sure that if plans go under, their obligations can

still be met,

Finally, there’s what is called the fiduciary relation-

ship, meaning, who can be a pension plan trustee?

And requiring that those who run pension funds ad-

here to a code of conduct so that they cannot enrich

themselves or make improper loans or engage in funny

business with the company management or the union

leadership.

These are matters for Congress to consider and, in-

deed, the Senate Labor Committee is considering them

now. They are also matters for those who are in pen-

sion plans. If you’re in one, you might find it useful

to take a close look at it.

Our own conclusion about all of this, is that it is almost

inconceivable that this enormous thing has been al-

lowed to grow up with so little understanding of it and

with so little protection and such uneven results for

those involved.

The situation, as we’ve seen it, is deplorable.

Edwin Newman, NBC News.

39a

Success of Program

Like many documentaries, ‘‘Pensions’’ was a critical suc-

cess (supra, note 1) but not a commercial success. We

shall consider the television reviews in more detail subse-

quently, but it may be observed here that they were gener-

ally enthusiastic. Critics called it, “A potent program

about pitfalls and failures of some private pension plans

.,” ‘a harrowing and moving inquiry..., and ‘‘a

public service.’’® Dissenting notes were also struck,

As to the viewing public, ‘‘Pensions’’ ran in competition

with a popular medical drama and a crime movie, and ran

a poor third, garnering only a 16% share of the viewing

audience. In fact, NBC was able to sell only two-and-one-

half minutes of advertising time out of an available six.°

II. Commission PRoceEDING

Watching the program with particular interest was Ac-

curacy in Media (‘‘AIM’’), a ‘‘nonprofit, educational or-

ganization acting in the public interest’’’ that seeks to

counter, in part by demanding aggressive enforcement of

the fairness doctrine, what it deems to be biased presenta-

tions of news and public affairs. On November 27, 1972,

the Executive Secretary of AIM wrote to the FCC com-

plaining of the following:

Our investigation reveals that the NBC report gave

the viewers a grotesquely distorted picture of the pri-

vate pension system of the United States. Nearly the

entire program was devoted to criticism of private

pension plans, giving the impression that failure and

fraud are the rule.... The reporter, Mr. Newman,

said that NBC did not want to give the impression that

5 See summary of reviews, Appendix B.

® Frank Affidavit, JA 125-26.

7 Letter of AIM to FCC, July 2, 1973, JA 148.

40a

there were no good private pension plans, but he did

not discuss any good plans or show any satisfied pen-

sioners.®

In subsequent correspondence, AIM added the accusations

that NBC was attempting ‘‘to brainwash the audience with

some particular message that NBC is trying to convey”? ®

and that the program was ‘‘a one-sided, uninformative,

emotion-evoking propaganda pitch.’’® Thus ATM not only

claimed that the program had presented one side of an

issue of public importance, the performance of private

pension plans, it also charged that NBC had deliberately

distorted its presentation to foist its ideological view of

events on the viewing public.

In its reply, NBC rejected the allegations of distortion.

It asserted that the ‘‘Pensions’’ broadcast had not con-

cerned a controversial issue of public importance:

The program constituted a broad over-view of some of

the problems involved in some private pensions plans,

It did not attempt to discuss all private pension plans,

nor did it urge the adoption of any specific legislative

or other remedies. Rather, it was designed to inform

the public about some problems which have come to

light in some pension plans and which deserve a closer

look."

Since, in the view of NBC, there was no attempt to com-

ment on the overall performance of private pension plans,

no controversial issue had been presented, for all agreed

that the examples of suffering depicted were not themselves

subject to controversy. Even so, NBC pointed out that it

* Letter of AIM to FCC, November 27, 1972, JA 1.

* Letter of AIM to FCC, February 20, 1973, JA 48,

Letter of AIM to FCC, April 11, 1973, JA 54,

' Letter of NBC to FCC, February 14, 1973, JA 41,

4la

d the view that the system as a whole was

rah, ver compen consequently, it asserted, even if it had

inadvertently raised the issue of the overall performance

of private pension plans, the side generally supportive of

the system had been heard.”

In a letter to NBC," the Broadcast Bureau of the Com-

mission rejected AIM’s allegations of distortion as being

unsupported by any evidence but upheld the fairness doc-

trine complaint. The staff took issue with the reason-

ableness of your [NBC’s] judgment that the program did

not present one side of a controversial issue of public im-

portance’? and concluded that the program’s overall

thrust was general criticism of the entire pension system,

accompanied by proposals for its regulation. The pe

opinion included extensive quotation from the transcript o

the documentary, but little explanation as to how the quoted

portions sustained the staff’s conclusion. Only four brief

statements were singled out as containing ‘‘general views

on the overall performance of the private pension system.

NBC appealed the Broadcast Bureau ruling to the entire

Commission.”

On December 3, 1973, the Commission issued a ‘*Memo-

randum Opinion and Order’’ affirming the decision of its

staff.” Although it acknowledged that the broad issue

upon review was ‘‘whether the Bureau erred in its ruling

12J7d., JA 45-46.

18 Accuracy in Media, Inc., 40 FCC 2d 958 (1973).

4 Td. at 963, 966.

i ' 1 and

15 By letter of July 2, 1973, AIM replied to NBC’s appea

as... 8 as an exhibit an article about pensions appearing in the

Washington Post of November 26, 1972, written by Mr. Spencer

Rich. AIM stated that this article ‘‘exemplifies good journalism.

JA 155.

16 44 FCC 2d 1027 (1973), JA 201.

42a

that NBC’s judgment on these matters was unreasonable, ’’

it emphasized that:

The specific question properly before us here is there-

fore not whether NBC may reasonably say that the

broad, overall ‘‘subject’’ of the ‘‘Pensions”’ program

was ‘‘some problems in some pension plans,’”’ but

rather whether the program did in fact present view-

points on one side of the issue of the overall perform-

ance and proposed regulation of the private pension

system.”

The Commission found that ‘‘Pensions’’ had in fact pre-

sented views on the overall performance of the private

pension system. It took note of the ‘‘pro-pensions’’ views

expressed during the documentary, but concluded that the

‘‘overwhelming weight’? of the ‘‘anti-pensions”’ statements

required further presentation of opposing views. The

Commission commended NBC for a laudable journalistic

effort, but found that the network had not discharged its

fairness obligations and ordered it to do so forthwith.

This petition for review followed.

NBC petitioned the Commission for a stay, but was in-

formed that the Commission ‘‘expects prompt compliance

with its ruling.’’ NBC filed a motion in this court for an

expedited appeal, a stay, and expedited consideration. That

motion was heard and granted on February 14, 1974, and

the case was heard on the merits on February 21, 1974.

AIM has intervened on the side of the Commission. The

stay that has been in effect during the pendency of this

appeal reflected, in part, an estimate of the likelihood of

success by NBC as petitioner. We now set forth the rea-

“sons why we have decided that the case should be deter-

mined in favor of NBC."*

"744 FCC 2d at 1034-35, JA 210.

** This opinion also serves to explain the continuation of the

February 14, 1974, stay order during the preparation of the opin-

ion on the merits. See note 88 infra.

43a

III. Tue Farryess Doctrine: GENERAL CoNSIDERATIONS

Petitioners urge that the Commission’s decision be set

aside as a misapplication of the fairness doctrine and a

violation of the First Amendment. Since we reverse on

the former ground, we have no occasion to consider the

latter.

Now twenty-five years old, the fairness doctrine imposes

a double obligation on the broadcast licensee. First, he

must devote a substantial portion of available time to ye

discussion of ‘‘controversial issues of public importance.

When he presents such an issue, the licensee has a further

duty to present responsible conflicting views. The doc-

trine, particularly as applied to newscasts and news docu-

mentaries, has’ been given statutory recognition in section

315 of the Communications Act,” and has been held to in-

here in the ‘‘pubiic interest’’ standard governing the grant

of license applications and renewals.”

The essential task of the fairness doctrine is to harmo-

nize the freedom of the broadcaster and the right of the

public to be informed. Except for limited areas like libel

and obscenity, the First Amendment generally forbids gov-

19 In the Matter of Editorializing by Broadcast Licensees, 13

FCC 1246, 1249 (1949).

2 Jd. This duty extends to making free time available if those

holding responsible conflicting views are unable to purchase air

time. Cullman Broadcasting Co., 40 FCC 576, 577 (1963).

2147 U.S.C. §315(a) reads in part:

Nothing in the foregoing sentence shall be construed as pr

lieving broadcasters, in connection with the presentation ry)

newscasts, news interviews, news documentaries, and on-the-

spot coverage of news events, from the obligation sane

upon them under this chapter to operate in the public interes

and to afford reasonable opportunity for the discussion of con-

flicting views on issues of public importance.

22 Red Lion v. FCC, 395 U.S. 367, 379-386, 89 S.Ct. 1794, 23

L.Ed.2d 371 (1969).

4ta

ernment regulation of the content of journalism. Not only

is state censorship forbidden, so also is the government

prohibited from compelling editors to include state ap-

proved material. Even a carefully limited statute giving

political candidates attacked on a newspaper’s editorial

page the right to reply in kind was recently invalidated by

the Supreme Court as an unconstitutional encroachment

upon journalistic discretion. In Miami Herald Publishing

Company v. Tornillo,* a ‘‘right to reply’’ law—analogous

to the personal attack rule that is part of the fairness doc-

trine—was ruled unconstitutional. The ‘‘benign’’ purposes

of the state statute were deemed irrelevant:

[T]he Florida statute fails to clear the barriers of the

First Amendment because of its intrusion into the

function of editors. A newspaper is more than a pas-

sive receptable or conduit for news, comment, and ad-

vertising. The choice of material to go into a news-

paper, and the decisions made as to limitations on the

size of the paper, and content, and treatment of public

issue sand public officials—whether fair or unfair—

constitutes the exercise of editorial control and judg-

ment. It has yet to be demonstrated how governmental

control of this crucial process can be exercised con-

sistent with First Amendment guarantees of a free

press as they have evolved to this time.

418 U.S. at 258, 94 S.Ct. at 2839-2840.

But almost from the beginning, the broadcasting press

has been treated differently. Congress created the Fed-

eral Communications Commission and its predecessor, the

Federal Radio Commission, because the available space on

the electromagnetic spectrum was far exceeded by the num-

ber of those who would use it.* It was necessary to ration

78418 U.S. 241, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974).

** National Broadcasting Company v. United States, 319 U.S.

190, 210-214, 63 S.Ct. 997 87 L.Ed. 1344 (1943).

45a

this scarce resource, for ‘‘[w]ithout government control,

the medium would be of little use because of the cacaphony

of competing voices, none of which could be clearly and

predictably heard.’’ *

Scarcity required licensing in order to bring order to

chaos, but the dangers of control in the hands of a relative

few were early recognized. The public interest did not

countenance delegation to a few licensees to pursue their

purely private interests at the expense of listeners and

viewers, and instead the broadcaster was held to have an

obligation to serve and inform the public.”

Under the fairness doctrine the public is not to be con-

fined to hearing only the views approved by those licensees,

but is entitled to be informed of the diversity of opinion in

the land, to have that presented by appropriate spokesmen

for its consideration and judgment.

The salutary intent of the fairness doctrine must be rec-

onciled with the tradition against inhibition of the journal-

ists’ freedom. That tradition, which exerts a powerful

countervailing force, is rooted in the constitutional guaran-

tee of freedom of the press, a guarantee that has vitality

for broadcast journalists, though not in exactly the same

degree as for their brethren of the printed word.” And

25 Red Lion Broadcasting Co. v. FCC, supra, 395 U.S. at 376,

89 S.Ct. at 1799.

26 Other responses to the dangers of placing control over the

broadcast media into the hands of a relative few include: the obli-

gation of the licensee to operate in the public interest, see 47 U.S.C.

§§ 307(a), 309(a) and 312(a)(2), the chain broadcasting and

multiple ownership rules, see National Broadcasting Co. v. United

States, 319 U.S. 190, 63 S.Ct. 997, 87 L.Ed. 1344 (1943) and 47

C.F.R. §§ 73.131, 73.240, and the prime time access rule, 47 C.F.R.

§ 73.658(k) (1973). See also Columbia Broadcasting System v.

Democratic National Committee, 412 U.S. 94, 112 n. 10, 93 S.Ct.

2080, 36 L.Ed.2d 772 (1973).

27 See id. at 117-118, 122, 93 S.Ct. 2080.

46a

the same statute that provides authority for the FCC to

implement the fairness doctrine for its licensees contains

a clear provision (in section 326) disclaiming and prohibit-

ing censorship as part of the legislative scheme. In con-

struing the fairness doctrine, both the Commission and the

courts have proceeded carefully, mindful of the need for

harmonizing these often conflicting considerations.

In Red Lion Broadcasting Compan

y v. FCC, 395 U.S.

367, 89 S.Ct. 1794, 23 L.Ed.2d 371 (1969), the Supreme

Court approved the Commission’s personal attack and

political editorializing rules,* which are relatively narrow

* Red Lion v. FCC, 395 U.S. at 373-375, 89 S.Ct. at 1798:

‘*Personal attacks; political editorials.

- (a) When, during the presentation of views on a contro-

versal issue of public importance, an attack is made upon the

honesty, character, integrity or like personal qualities of an

identified person or group, the licensee shall, within a rea-

sonable time and in no event later than 1 week after the at-

tack, transmit to the person or group attacked (1) notification

of the date, time and identification of the broadcast: (2) a

script or tape (or an accurate summary if a script or tape is

not available) of the attack; and (3) an offer of a reasonable

opportunity to respond over the licensee’s facilities.

(b) The provisions of paragraph (a) of this section shall

not be applicable (1) to attacks on foreign groups or foreign

public figures ; (2) to personal attacks which are made b

legally qualified candidates, their authorized spokesmen, rl

those associated with them in the campaign, on other such

candidates, their authorized spokesmen, or persons associated

with the candidates in the campaign; and (3) to bona fid

newscasts, bona fide news interviews, and on-the-spot cove .

of a bona fide news event (including commentary or a

contained in the foregoing programs, but the BeoPresgae

paragraph (a) of this section shall ’ “emsae?

of the licensee). shall be applicable to editorials

‘‘Nore: The fairness doctrine is appli i

: T pplicable to situati

coming within [( 3)], above, and, in a specifie factual dtastion.

rp be applicable in the general area of political broadcasts

[(2)], above. See section 315(a) of the Act, 47 U.S.C. § 315

47a

corollaries of the general fairness obligation. Under the

personal attack rules a licensee must afford reply time to

‘san identified person or group’’ whose ‘‘honesty, charac-

ter, integrity, or like personal qualities’ are attacked in

the course of presentation of views on a controversial issue

of public importance. The political editorializing rule im-

poses a reply obligation where the licensee endorses or op-

poses a candidate for public office.

These rules were the target of sharp attack. The essence

of the challenge was that no matter how slight, how narrow,

or how precise, any limitation on the freedom of the licensee

to broadcast what he chooses perforce violates the First

Amendment. Rejecting this contention, a unanimous ”

Supreme Court reminded the broadcaster of the essential

difference between the print and broadcast media: the

physical limitations of the latter restrict the number of

those who would broadcast whereas expression by publica-

(a) ; Public Notice: Applicability of the Fairness Doctrine in

the Handling of Controversial Issues of Public Importance.

99 F.R. 10415. The categories listed in [(3)] are the same

as those specified in section 315(a) of the Act.

‘*(e) Where a licensee, in an editorial, (i) endorses or (ii)

opposes a legally qualified candidate or candidates, the licensee

shall, within 24 hours after the editorial, transmit to respec-

tively (i) the other qualified candidate or candidates for the

same office or (ii) the candidate opposed in the editorial (1)

notification of the date and the time of the editorial; (2) a

script or tape of the editorial; and (3) an offer of a reasonable

opportunity for a candidate to respond over the licensee’s

facilities: Provided, however, That where such editorials are

broadcast within 72 hours prior to the day of the election, the

licensee shall comply with the provisions of this paragraph

sufficiently far in advance of the broadcast to enable the can-

didate or candidates to have a reasonable opportunity to

prepare a response and to present it in a timely fashion.’’ 47

CFR §§ 73.123, 73.300, 73.598, 73.679 (all identical).

2° Justice Douglas did not participate, and said in CBS: ‘‘I did

not participate in that decision and, with all respect, would

not support it.’’ 412 U.S. at 154, 93 S.Ct. at 2112.

48a

tion is, at least in theory, available to all. To posit a First

Amendment restriction on government action taken to en-

hance the variety of opinions available to the viewer is to

protect those fortuitous enough to obtain broadcast licenses

at the expense of those who were not. In now-famous lan-

guage the Court stated:

Because of the scarcity of radio frequencies, the Gov-

ernment is permitted to put restraints on licensees in

favor of others whose views should be expressed on

this unique medium. But the people as a whole retain

their interest in free speech by radio and their collec-

tive right to have the medium function consistently

with the ends and purposes of the First Amendment.

It is the right of the viewers and listeners, not the right

of the broadcasters, which is paramount.”

This has become the guiding principle of the fairness

doctrine: limitations on the freedom of the broadcaster—

even those that would be unacceptable when imposed on

other media—are lawful in order to enhance the public’s

right to be informed.** The Court’s opinion, written by

Justice White, reflects the cireumspection of this principle

of decision. While rejecting as unfounded claims that the

personal attack and political editorializing rules would

induce self-censorship by licensees in order to avoid the

rigors of compliance with their requirements, the Court

cautioned that its judgment might be different ‘‘if experi-

ence with the administration of those doctrines indicates

that they have the net effect of reducing rather than en-

hancing the volume and quality of coverage.” ...’’ And

80 395 U.S. at 390, 89 S.Ct. at 1806.

%1**Only when the interests of the public are found to outweigh

the private journalistic interests of the broadcasters will govern-

ment power be asserted within the framework of the Act.’’ CBS

supra, 412 U.S. at 110, 93 S.Ct. at 2090.

82 395 U.S. at 393, 89 S.Ct. at 1808.

49a

the Court expressly stated that in approving the personal

attack and political editorializing rules, it did not ‘‘ap-

prove every aspect of the fairness doctrine.” ...”’

Four years later, in Columbia Broadcasting System v.

Democratic National Committee,** the Court again dis-

cussed the fairness doctrine. The Commission had held

that licensees could impose a blanket ban on all editorial

advertising. An intermediate court ruling that such a ban,

even if consistent with the fairness doctrine, violated the

First Amendment," was reversed by the Supreme Court,

in an opinion by Chief Justice Burger.

In CBS the Court reaffirmed the principle that scarcity

requires that the broadcast media be treated differently

than other forums of expressien, but observed that this is

not a principle without bounds, that not all regulation can

be justified in the name of scarcity. Overzealous invoca-

tion of rules such as the fairness doctrine could cause an

‘‘erosion of the journalistic discretion of broadcasters in

the coverage of public issues.’’ *

Journalistic discretion, the Court emphasized, is the key-

note to the legislative framework of the Communications

Act."

The limitations of broadcasting both spawned the fair-

ness doctrine and establish that it is dependent primarily

on licensee discretion. Perfect compliance is impossible.

No broadcaster can present all colorations of all available

public issues. 412 U.S. at 111, 93 S.Ct. 2080. Choices

have to be made and, assuming that the area is one of pro-

38 Jd. at 396, 89 S.Ct. at 1809.

%4 412 U.S. 94, 93 S.Ct. 2080, 36 L.Ed.2d 772 (1973).

85 Business Executives’ Move for Peace v. FCC, 146 U.S.App.

D.C. 181, 450 F.2d 642 (1971).

96412 U.S. at 124, 93 S.Ct. at 2097.

87 Jd. at 110-111, 93 S.Ct. 2080.

50a

tected expression, the choices must be made by those whose

mission it is to inform, not by those who must rule. In the

words of Chief Justice Burger:

For better or worse, editing is what editors are for;

and editing is selection and choice of material. That

editors—newspaper or broadeast—can and do abuse

this power is beyond doubt, but that is not reason to

deny the discretion Congress provided. Caleulated

risks of abuse are taken in order to preserve higher

values. The presence of these risks is nothing new;

the authors of the Bill of Rights accepted the reality

that these risks were evils for which there was no ac-

ceptable remedy other than a spirit of moderation and

a sense of responsibility—and civility—on the part of

those who exercise the guaranteed freedoms of ex-

pression.”

There are no other decisions on the fairness doctrine

from the Supreme Court, but this court has had occasion

to consider the doctrine in several cases and it has endeav-

ored to maintain the balance between broadcaster freedom

and the publie’s right to know. Commercial advertising

cases present different considerations than those before us

and we need not reexamine the doctrine as there applied.”

More related to the present issue is the public service an-

nouncement discussed in Green v. FCC,” where we refused

petitioners’ request to require a licensee to present a point

of view on the Vietnam conflict that had already received

88 7a. at 124-125, 93 S.Ct. at 2097. This same thought appears in

the Tornillo case, 418 U.S. at 258, 94 S.Ct. at 2840 and is obviously

an abiding constitutional consideration.

* Neckritz v. FCC, 163 U.S.App.D.C. 409, 502 F.2d 411 (1974) ;

Friends of the Earth vy. FCC, 146 U.S.App.D.C. 88, 449 F.2d 1164

(1971); Banzhaf v. FCC, 132 U.S.App.D.C. 14, 405 F.2d 1082

(1968), cert. denied, 396 U.S. 842, 90 S.Ct. 50, 24 L.Ed.2d 93

(1969).

144 U.S.App.D.C. 353, 447 F.2d 323 (1971).

5la

extensive coverage. In Green, as in the instant case, there

was some initial difficulty in defining the issue allegedly

presented in the offending broadcast. We stated that this

determination, as well as the decision as to the number of

views to be presented and the manner in which they are

portrayed, is one initially for the licensee, who has latitude

to make all pertinent judgments and is not to be overturned

unless he forsakes the standards of reasonableness and

good faith." Reliance on the reasonableness standard,

‘‘which is all that is required under the fairness doc-

trine’’ * preserves licensee discretion and serves the es-

sential purposes of the fairness doctrine ‘‘that the Amer-

ican public must not be left uninformed,’”’ *

41 The Commission has said:

The fairness doctrine deals with the broader question of

affording reasonable opportunity for the presentation of con-

trasting viewpoints on controversial issues of public impor-

tance. Generally speaking, it does not apply with the pre-

cision of the ‘‘equal opportunities’’ requirement. Rather, the

licensee, in applying the fairness doctrine, is called upon to

make reasonable judgments in good faith on the facts of each

situation—as to whether a controversial issue of public im-

portance is involved, as to what viewpoints have been or should

be presented, as to the format and spokesmen to present the

viewpoints, and all the other facets of such programming.

See par. 9, Editorializing Report. In passing on any com-

plaint in this area, the Commission’s role is not to substitute

its judgment for that of the licensee as to any of the above

programming decisions, but rather to determine whether the

licensee can be said to have acted reasonably and in good

faith. There is thus room for considerably more discretion on

the part of the licensee under the fairness doctrine than under

the ‘‘equal opportunities’’ requirement.

In re Applicability of the Fairness Doctrine in the Handling of

Controversial Issues of Public Importance, 40 FCC 598, 599

(1964).

2144 U.S.App.D.C. at 360, 447 F.2d at 330.

#3 Jd. at 359, 447 F.2d at 329 (emphasis in original).

52a

In Democratic National Committee v. FCC,“ we faced

knotty problems in sorting out the fairness obligations

generated by a radio and television address by the Presi-

dent and a reply by the opposition political party. In up-

holding the Commission decision that the licensees had not

abused their discretion, Judge Tamm, writing for the court,

stressed the importance of reliance on licensee judgment:

By its very nature the fairness doctrine is one which

cannot be applied with scientific and mathematical

certainty. There is no formula which if followed will

assure that the requirements of the doctrine have been

met. Procedurally, the doctrine can only succeed when

the licensee exercises that discretion upon which he is

instructed to call upon in dealing with coverage of con-

troversial issues.”

Finding no abuse of discretion, we affirmed.

In Healey v. FCC," petitioner claimed to be within the

ambit of the personal attack rule, which requires the

licensee to afford opportunity to reply to an individual

attacked in the course of a discussion of a controversial

issue of public importance. As in the case now before us,

the critical question was whether the broadcast involved a

controversial issue of public importance. Petitioner, an

American Communist, claimed that her role as a Commu-

nist within her community was such an issue. Judge

Wilkey, the author of the Green opinion, pointed out that

there is a substantial difference between what is news-

worthy, i.e., that which is interesting to the public, and

what is controversial:

Merely because a story is newsworthy does not mean

that it contains a controversial issue of public impor-

**148 U.S.App.D.C. 383, 460 F.2d 891, cert. denied, 409 U.S.

843, 93 S.Ct. 42, 34 L.Ed.2d 82 (1972).

‘© Td. at 392, 460 F.2d at 900 (emphasis added).

*° 148 U.S.App.D.C. 409, 460 F.2d 917 (1972).

53a

tance. Our daily papers and television broadcasts

alike are filled with news items which good journal-

istic judgment would classify as newsworthy, but which

the same editors would not characterize as containing

important controversial public issues.”

Converting every newsworthy matter into a controversial

issue of public importance and requiring editors to ‘‘bal-

ance’’ every presentation creates a danger. Again in the

words of Judge Wilkey:

To characterize every dispute of this character as call-

ing for rejoinder under the fairness doctrine would so

inhibit ‘television and radio as to destroy a good part

of their public usefuless. It would make what has

already been criticised as a bland product disseminated

by an uncourageous media even more innocuous.

The principle of deference to licensee judgments, unless

the licensee has simply departed from the underlying as-

sumptions of good faith and reasonable discretion, is an

integral part of the fairness doctrine, and a fixture that

has been reiterated and applied with fidelity by the courts.”

It is the backdrop against which Judge Tamm’s opinion

47 Td. at 414, 460 F.2d at 922.

48 Td. at 415, 460 F.2d at 923.

4? Brandywine-Main Line Radio, Inc. v. FCC, 153 U.S.App.D.C.

305, 473 F.2d 16 (1972), cert. denied, 412 U.S. 922, 93 S.Ct. 2731,

387 L.Ed.2d 149 (1973). Judge Tamm’s opinion restated that

‘*[t]he cornerstone of the doctrine is good faith and licensee dis-

eretion.’’ That opinion sustained the denial of the application

to renew the license only on the ground that the record of the

licensee was ‘‘bleak in the area of good faith... [and] . . . shows

an utter disdain for Commission rulings and ignores its own re-

sponsibilities as a broadcaster and its representations to the Com-

mission.’’ 153 U.S8.App.D.C. at 333, 335-336, 473 F.2d at 44, 46-47

(1972).

54a

for the court in the Democratic National Committee case

takes note, that

in opinion after opinion, the Commission and the

courts have stressed the wide degree of discretion

available under the fairness doctrine... .™°

The question is whether NBC has been shown to have ex-

ceeded its ‘‘wide degree of discretion’’ in its ‘‘Pensions’’

documentary.

IV. Apstrention From Prevtimimnary Issue—WHeETHER F'arr-

ness Doctrine SHovutp Be Reservep ror License Re-

NEWALS

A preliminary issue has been presented to us by amicus

curiae Henry Geller, Esquire, formerly general counsel of

the Commission, and a serious student of the fairness doc-

trine.' Mr. Geller’s view is that under the law the FCC

could not properly issue the ad hoe fairness ruling on this

program, but was limited to consideration of the matter

only in connection with NBC’s application for renewal of

license, and then only to determine if some flagrant pattern

of violation of the fairness doctrine is indicated by NBC’s

overall operation, with a renewal standard, comparable to

that voiced in New York Times v. Sullivan, 376 U.S. 254,

84 S.Ct. 110, 11 L.Ed.2d 686 (1964), requiring a showing

of ‘‘malice’’—either bad faith, or ‘‘reckless disregard’’ of

fairness obligations.

Initially, it appears, it was the FCC’s procedure to refer

complaints to the station as received, obtain its response,

and then consider the matter definitively at renewal in con-

5° 148 U.S.App.D.C., at 395, 460 F.2d at 903.

5! See II. Geller, the Fairness Doctrine in Broadcasting: Prob-

lem and Suggested Courses of Action (The Rand Corporation, R-

1412-FF, Dee. 1973).

55a

nection with the overall showing of the station."*® This

practice was being followed in 1959, when the Communica-

tions Act was amended to codify the standard of fairness.”

In 1962, the Commission changed its procedure to resolve

all fairness matters as they arose and, if the station were

found to have violated the doctrine, to direct it to advise

the Commission within 20 days of the steps taken ‘‘to as-

sure compliance with the fairness doctrine.’’ ™*

Mr. Geller puts it that the resulting series of ad hoe fair-

ness rulings ‘‘have led the Commission ever deeper into

the journalistic process, and have raised most serious prob-

lems.’’®> The effect, particularly on the small broadcaster,

52 See Testimony of Mr. Joseph Nelson, Chief, FCC Renewal and

Transfer Division, Hearings before the Senate Freedom of Com-

munications Subcommittee, March 27, 1961, 87th Cong., 1st Sess.,

Report 994, Pt. 5, p. 21; see e.g., Dominican Republic Information

Center, 40 FCC 457, 457-588 (1957).

53 See Section 315(a), 47 U.S.C. §315(a); Red Lion Broadcast-

ing Co. v. FCC, supra, 395 U.S. at pp. 380-385, 89 S.Ct. 1794.

54 See Tri-State Broadcasting Co., 40 FCC 508, 509 (1962).

This change apparently occurred in connection with personal at-

tack cases, and was extended without discussion to all fairness cascs.

The only FCC treatment is in Honorable Oren Harris, 40 FCC 582

(1963). Chairman Harris of the House Interstate and Foreign

Commerce Committee criticized this new approach, and urged

that fairness ‘‘. . . be applied periodically (i. e., at the time of

renewal) and upon an overall basis.’’ Jd. at p. 583. In its re-

sponse, the Commission gave three reasons for its policy of resolv-

ing fairness questions at time of complaint rather than awaiting

renewal: (1) It is not fair to the licensee to wait; he should have

a chance to contest the fairness ruling by appealing to the courts;

(2) awaiting renewal is unfair to the public, which then does not

have the opportunity to hear contrasting views, such as in pro-

grams dealing with ballot issues; and (3) similarly, it would be un-

fair to candidates in political campaigns.

55 Amicus Brief at 3-5. These problems, which are under FCC

consideration, may be grouped as follows:

(a) Defining balance or reasonable opportunity to afford

contrasting viewpoints on an issue.

(b) The stopwatch problem. Apparently, the FCC has on

occasion literally used a stop-watch to time the presentations

56a

has been to inhibit the promotion of robust, wide-open de-

bate. Thus, in a case where the FCC found that a licensee

had afforded reasonable opportunity for opposing view-

points,° the FCC process was long (decision 21 months

after broadcast) and arduous. The licensee’s burden in-

cluded not only substantial legal (about $25,000) and other

expenses (e.g., travel), but also required top-level station

personnel to devote substantial time and attention, with

attendant dislocation of regular operational functions. In

sum, Mr. Geller says that a substantial inhibiting effect

derives not merely from any rulings adverse to the broad-

caster, but the strain, time and resources involved in cop-

ing with particular challenges even if they are unsuccess-

ful.

Amicus cites expressions in Columbia Broadcasting Sys-

tem v. Democratic National Committee, supra, rejecting a

made on the various sides on an issue. See Concurring State-

ment of Chairman Burch in Complaint of the Wilderness So-

ciety against NBC (ESSO), 31 FCC 2d 729, 735-739 (1971).

See also Sunbeam TV Corp., 27 FCC 2d 350, 351 (1971).

Even an apparently mechanical stop-watch approach involves

sensitive judgments in determining whether particular segments of

a program tilt for or against, or are neutral on a particular issue.

(ce) The ‘‘stop-time’’ program. During the period of FCC

consideration, the licensee may offer additional broadcasts

(perhaps, to cover new developments). And these may affect

the FCC’s judgment on whether reasonable opportunity has

been presented. Complaint of Wilderness Society against

NBC (ESSO), supra.

5° Sherwyn M. Heckt, 40 FCC 2d 1150 (1973). Licensee KREM-

TV editorialized in favor of an Expo 74 for Spokane, and a sup-

porting bond issue. There was a disparity im the time offered for

anti-bond viewpoints. The station rejected an anti-bond spokes-

man, and was held to have a reasonable explanation (the spokes-

man did not appear to represent groups for which he claimed to

speak). The station showed it had actively sought to obtain the

am of leading spokesmen for the opposition, and did present

em.

57a

contention (right of access for editorial advertisements)

that would involve the government too much in the ‘‘day-

to-day operations of broadcasters’ conduct,’’ and stating

the fairness doctrine, in terms of the legislative scheme and

purpose, in these terms, 412 U.S. at 127, 93 S.Ct. at 2098:

Under the Fairness Doctrine the Commission’s re-

sponsibility is to judge whether a licensee’s overall

performance indicates a sustained good faith effort to

meet the public interest in being fully and fairly in-

formed. The Commission’s responsibilities under a

right-of-access system would tend to draw it into a

continuing case-by-case determination of who should

be heard and when.

We have stated the amicus position at some length be-

cause we do not wish our opinion to be misunderstood as

inadvertent on the point. The position is a serious one,

and it deserves serious consideration. * The fact that Red

Lion reviewed a particular ruling is no bar, for this point

was not raised. Indeed, even as to points that were raised,

the Court was careful to say that it would be alert to re-

examine its assumptions upon an appropriate showing.

We do not think, however, that the present case is an

appropriate vehicle for determination of the contention

presented by amicus. It is resisted by petitioners, who

seek reversal but not on this basis, which might enhance

their risk. Moreover, it was not expressly considered by

the Commission. While amicus states that a copy of the

underlying study, see footnote 51, supra, was distributed

to each Commissioner prior to the Commission’s consid-

eration of this case, that is not the same thing as putting

57 The specter of renewal jeopardy for failure to comply fully

with the fairness doctrine can have a serious inhibiting effect, as

tic Commission recognized in saying that it would consider refus-

ing renewal only when a most substantial and fundamental issue is

presented. See Hunger in America, 20 FCC 2d 143, 150 (1969).

58a

the matter in issue in the proceeding. The proposal is one

that merits consideration by the Commission before it can

be discussed by this court as a legal imperative.*® We ab-

tain, then, from any determination in this case concerning

the merits of the proposition put by amicus curiae.

V. APPLICATION OF THE F'arrNEss DocTRINE TO

News DocuMENTARIES

Our assumption of the propriety of the FCC’s current

practice that it may make rulings whether particular pro-

grams violate the fairness doctrine does not lessen our

concern as to those rulings; it rather enhances the need

for careful scrutiny, particularly where, as here, a ruling is

challenged on the ground that it displaces the judgment

entrusted to the broadcast journalist.

A. The Function of the FCC

The principal controversial issue the Commission identi-

fied for the ‘‘Pension’’ program is ‘‘the overall perform-

ance of the private pension plan system.’’ In NBC’s sub-

mission, the focus of the program was the existence of

abuses, of ‘‘some problems in some pension plans.’’ While

one understands NBC’s point as made, it might be refined

as a statement that NBC was engaged in a study in abuses

and did not separately examine how pervasive those abuses

were. On what basis did the Commission reject NBC’s

position, and accept AIM’s view that the point of the pro-

gram was the performance of the common run of pension

plans?

The staff ruling of May 2, 1973, said this (p. 11):

The Pensions program thus did in fact present views

which were broadly critical of the performance of the

58 Amicus himself recognizes the desirability of particular rul-

ings for the personal attack and political editorializing rules. See

Amicus Brief at 14 n. 28: ‘‘[T]hese are specific rule situations

which do not involve any ‘stop-time’ or ‘stop-watch’ considerations.

There is also a need for prompt rulings as to political broadcasts.”’

59a

entire private pension system and explicitly advocated

and supported proposals to regulate the operation of

all pension plans. Your judgments to the contrary,

therefore, cannot be accepted as reasonable.

One is struck by the palpable flaw in the staff’s reason-

ing. The staff actually put it that because the staff found

as a fact that the program was broadly critical of the en-

tire private pension plan system, NBC’s contrary judg-

ment ‘‘therefore’’ cannot be accepted as reasonable. The

flaw looms the larger, in that it appears in the ruling of

the staff of an agency operating under the Rule of Admin-

istrative Law. Under that Rule, agencies daily proclaim

that their findings of fact must be upheld if reasonable and

if supported by substantial evidence, even though there is

equal and even preponderant evidence to the contrary,

and even though the courts would have found the facts the

other way if they had approached the issue independently.

The Commission’s opinion of December 3, 1973, corrected

the staff’s error of logic, but it made a mistake of law. It

stated (see para. 17, JA 210):

The specific question properly before us here is there-

fore not whether NBC may reasonably say that the

broad, overall ‘‘subject’’ of the ‘‘Pensions’’ program

was ‘‘some problems in some pension plans,’’ but

rather whether the program did in fact present view-

points on one side of the issue of the overall perform-

ance and proposed regulation of the private pension

system. [emphasis added. ]

Thus the Commission ruled that even though NBC was

reasonable in saying that the subject of ‘‘Pensions’’ pro-

gram was ‘‘some problems in some pension plans,’’ in de-

termining that this was the essential subject of the pro-

gram, its dominant force and thrust, nevertheless NBC had

violated its obligation as a licensee, because the Commis-

sion reached a different conclusion, that the program had

60a

the effect ‘‘in fact’’ of presenting only one side of a dif-

ferent subject.

The Commission’s error of law is that it failed ade-

quately to apply the message of applicable decisions that

the editorial judgments of the licensee must not be dis-

turbed if reasonable and in good faith. The licensee has

both initial responsibility and primary responsibility. It

has wide discretion and latitude that must be respected

even though, under the same facts, the agency would reach

a contrary conclusion.

The pertinent principle that the Commission will not

disturb the editorial judgment of the licensee, if reasonable

and in good faith, is applicable broadly in fairness doctrine

matters. It has distinctive force and vitality when the

crucial question is the kind raised in this case, 1.e., in de-

fining the seope of the issue raised by the program, for

this inquiry typically turns on the kind of communications

judgments that are the stuff of the daily decisions of the

licensee. There may be mistakes in the licensee’s deter-

mination. But the review power of the agency is limited

to licensee determinations that are not only different from

those the agency would have reached in the first instance

but are unreasonable.™

588 Subsequent to the preparation of this opinion, a recent notice

setting forth the FCC’s present views on the fairness doctrine came

to our attention. Fairness Doctrine and Public Interest Stand-

ards: Fairness Report Regarding Handling of Public Issues, 39

Fed.Reg. 26372 (1974). That order is presently being challenged

on appeal in National Citizens Committee v. FCC, No. 74-1700

(D.C.Cir., filed July 3, 1974). In paragraphs 32-35, the Commis-

sion considers the problems in ‘‘the determination of the specific

issue or issues raised by a particular program.’’ The Commis-

sion states: ‘‘This would seem to be a simple task, but in many

eases it is not. Frequently, resolution of this problem can be of

decisional importance. ... [A] broadcast may avoid explicit

mention of the ultimate matter in controversy and focus instead on

assertions or arguments which support one side or the other on that

ultimate issue. [The Commission offers a hypothetical instance of

6la

In Columbia Broadcasting System v. Democratic Na-

tional Committee, supra, the Court stressed the wide lati-

tude entrusted to the broadcaster. See 412 U.S. at 110-111,

93 S.Ct. at 2090-2091 :

Congress intended to permit private broadcasting to

develop with the widest journalistic freedom consist-

ent with its public obligations.

The broadcaster, therefore, is allowed significant jour-

nalistic discretion in deciding how best to fulfill the

Fairness Doctrine obligations, although that discre-

i

a heated community debate over a proposed school bond, with the

broadcast referring to conditions stressed by advocates of the bond

although the spokesman does not explicitly mention or advocate

passage of the bond.] [W]e would expect a licensee to exercise his

good faith judgement as to whether the spokesman had in an ob-

vious and meaningful fashion presented a position on the ultimate

controversial issue [approval of a bond]. ... If a licensee’s de-

termination is reasonable and arrived at in good faith, however,

we will not disturb it.’’ Jd. at 26376.

We find this exposition congruent with—and indeed supportive

of—the approach taken in this opinion. The Commission also

states, in a preceding section, that on the question whether an issue

is ‘‘controversial’’ and of ‘‘ public importance’’ it has not been able

to develop detailed criteria, and continues (par. 29): ‘‘For this

very practical reason, and for the reason that our role must and

should be limited to one of review, we will continue to rely heavily

on the reasonable, good faith judgments of our licensees in this

area.’’ Jd. at 26376.

While the Supreme Court’s recent opinions in non-broadcast

areas do not undercut a role for the Commission in the fairness

doctrine, the underlying principles underscore the appropriateness

of confining that role. In addition to Tornillo, quoted above, see

e. g., Gertz v. Robert Welch, Inc., 418 U.S. 323, 345-346, 94 S.Ct.

2997, 3010, 41 L.Ed.2d 789 (1974), referring to the ‘‘difficulty of

forcing state and federal judges to decide on an ad hoc basis which

publications address issues of ‘general or public interest’ and which

do not.’”’

62a

tion is bounded by rules designed to assure that the

public interest in fairness is furthered.

While the government agency has the responsibility of

deciding whether the broadcaster has exceeded the bounds

of discretion, the Court makes clear that any approach

whereby a government agency would undertake to govern

‘‘day-to-day editorial decisions of broadcast licensees’’

endangers the loss of journalistic discretion and First

Amendment values. (412 U.S. at 120-121, 93 S.Ct. at 2095)

What is perhaps most striking and apt for present pur-

poses is the figure used by Chief Justice Burger wherein

the licensee is identified as a ‘‘free agent’’ who has ‘‘tt-

tial and primary responsibility for fairness, balance, and

objectivity,’’ with the Commission serving as an ‘‘over-

seer’’ and ‘‘ultimate arbiter and guardian of the public

interest.’’ ** [Emphasis added.]

Our own decisions ® amplify these basic propositions.

Judge Tamm’s opinion for the court in Democratic Na-

5® See 412 U.S. at 117, 93 8.Ct. at 2094:

The regulatory scheme evolved soley, but very early the licen-

see’s role developed in terms of a ‘‘publie trustee’’ charged with

the duty of fairly and impartially informing the listening and

viewing public. In this structure the Commission acts in essence

as an ‘‘overseer,’’ but the initial and primary responsibility for

fairness, balance, and objectivity rests with the licensee. This

role of the Government as an ‘‘overseer’’ and ultimate arbiter

and guardian of the public interest and the role of the licensee

as a journalistic ‘‘free agent’’ call for a delicate balancing of com-

peting interests. The maintenance of this balance for more than

40 years has called on both the regulators and the licensees to walk

a ‘‘tightrope’’ to preserve the First Amendment values written into

the Radio Act and its successor, the Communications Act.

While this part (III) of the opinion of Chief J ustice Burger was

written for himself and Justices Stewart and Rehnquist, this par-

ticular paragraph is not contrary to the views of the other justices.

6° See Part III, supra.

63a

tional Committee v. FCC, 148 U.S.App.D.C. 383, 460 F.2d

891 (1972) serves as a compendium and a wrap up. That

opinion refers to:

(1) Mid-Florida Television Corp., 40 FCC 2d 620, 621

(1964), that the mechanics of achieving fairness ‘‘is within

the discretion of each licensee, acting in good faith.’’

(2) Applicability of the Fairness Doctrine, 29 Fed.Reg.

10416, 40 FCC 598, 599 (1964) :

[The licensee, in applying the fairness doctrine, is

called upon to make reasonable judgments in good

faith on the facts of each situation—as to whether a

controversial issue of public importance is involved,

as to what viewpoints have been or should be presented,

as to the format anc spokesmen to present such view-

points, and all the other facets of such programming.

(3) The concept that the Commission will ‘‘exercise sub-

stantial restraint in this area.’’ Id.:

[T)}he Commission’s role is not to substitute its judg-

ment for that of the licensee as to any of the above

programming decisions, but rather to determine

whether the licensee can be said to have acted reason-

ably and in good faith.

(4) This court’s other opinions™ and such references

therein as ‘‘the permissive ‘reasonableness’ standard of

the fairness doctrine.’’ The court therefore concluded

(460 F.2d at 903);

Thus, in opinion after opinion, the Commission and

the courts have stressed the wide degree of discretion

available under the fairness doctrine. .. .

" £. g., in Green v. FCC, 144 U.S.App.D.0. 353, 447 F.2d 323,

and in BEM for Vietnam Peace v. FCC, 146 U.S.App.D.C. at 187,

450 F.2d at 648.

64a

The range of journalistic discretion is not limited to the

issue of how to comply with the fairness doctrine in the

details of presenting both (or more) sides of an issue when

the issue has been subsequently defined by the Commis-

sion. This would be narrow and artificial. In CBS, the

Court, in discussing the broadcaster’s ‘‘significant jour-

nalistie diseretion’’ under the fairness doctrine pointed out

that the licensee must consider ‘‘such questions as whether

the subject is worth considering’’ (412 U.S. at 111 & n.9,

93 S.Ct. at 2091).% And the Court cited with approval a

passage, as old as the fairness doctrine itself, wherein the

Commission stated that the licensee ‘‘is called upon to make

reasonable judgments in good faith on the facts of each

situation—as to whether a controversial issue of public

importance is involved.’’®

Where the Commission has relatively specific rules un-

der the fairness doctrine, as in the personal attack and

political editorializing rules, it has a more ample role in

determining whether the licensee was in compliance with

his obligations. But when the claim is put in terms of the

general obligation concerning controversial issues of pub-

lie importance, there is primary reliance on the journalistic

discretion of the licensee, subject to supervision by the

government agency only in case he exceeds the bounds of

his discretion. This yields as a corollary that if the broad-

cast licensee was reasonable in his premise, and his pro-

jection of the subject-matter of the program, he cannot be

*2 Quoting Report on Editorializing by Broadcast Licensees, 13

FCC 1246, 1251-2 (1949). See also L. Jaffe, The Editorial Respons-

ibility of the Broadcaster: Reflections on Fairness and Access, 85

Harv.L.Rev. 768, 772 (1972). ‘‘[T|he broadcaster has considerable

discretion in operating the doctrine. He is to decide whether a

question raises an issue of public importance.’’

* Applicability of the Fairness Doctrine, supra, 40 FCC at 599,

approved by the courts in e. g., DNC v. FCC, supra, 148 U.S.App.

D.C, at 392, 460 F.2d at 900.

65a

said by the supervising agency to have abused or exceeded

his sound discretion.

The FCC’s function becomes that of correcting the li-

censee for abuse of discretion, as our function on judicial

review is that of correcting the agency for abuse of dis-

cretion.

The Commission in this ease agreed that there was wide

latitude of journalistic discretion in regard to news and

news documentary programs. It said (par. 25), that it

‘‘eannot uphold a patently unreasonable exercise of that

discretion which would deny the right of the public to be

informed as to both sides of a controversial issue which in

fact has been presented by such programming.’’ The

Commission’s reference to ‘‘patently unreasonable exer-

cise of discretion’’ by the licensee, as the standard that

warrants agency intervention, captures the spirit of the

scope of discretion entrusted to the licensee. We need not

dwell on abstract issues such as whether a licensee whose

exercise of discretion is unreasonable may validly claim

it was not ‘‘patently’’ unreasonable; this is more a matter

of mood than rule. In this case, we think it plain that the

licensee has not been guilty of an unreasonable exercise

of discretion. Where the Commission may have started

on the wrong path in its approach is the place where the

Commission undertook to determine for itself as a fact

whether ‘‘the program did in fact present viewpoints on

one side of the issue of the overall performance and pro-

posed regulation of the private pension system.’’ This

is not a sufficient basis for overturning the licensee. It is

not clear from the Commission’s opinion that it also appre-

ciated the need for a finding of abuse of discretion by the

licensee in concluding that no controversial issue had been

presented. In any event, we are clear that the licensee’s

discretion was not abused in this respect.

On this issue, whether there was an abuse of discretion

in NBC’s determination concerning the subject matter of

66a

the ‘‘Pensions’’ docnmentary, the staff—which did see that

this was the real issue—proceeded to resolve it adversely

to the licensee by concluding that NBC was unreasonable

in determining that the subject of the program was some

problems of private pension plans. The Commission

backed away from that staff conclusion.

A substantial burden must be overcome before the FCC

can say there has been an unreasonable exercise of jour-

nalisic discretion in a licensee’s determination as to the

scope of issues presented in the program. Where, as here,

the underlying problem is the thrust of the program and

the nature of its message, whether a controversial issue of

public importance is involved presents not a question of

simple physical fact, like temperature, but rather a com-

posite editorial and communications judgment concerning

the nature of the program and its perception by viewers.

In the absence of extrinsic evidence that the licensee’s

characterization to the Commission was not made in good

faith, the burden of demonstrating that the licensee’s judg-

ment was unreasonable to the point of abuse of discretion

requires a determination that reasonable men viewing the

program would not have conciuded that its subject was

as described by the licensee.™

Here the Commission concluded that the program in-

volved a controversial issue, namely the overall perform-

ance of the private pension plan system. If the agency

had free rein to make the critical finding we might well

support this conclusion as a reasonable exercise of agency

diseretion. But here the primary discretion was not vested

in the government agency but in the licensee. And the

agency could not premise any order on a conclusion con-

trary to that of the licensee unless it was willing and able

to take the additional step—which it deliberately avoided—

* In this regard, see the discussion of the conclusions of profes-

sional reviewers, part VI. A, infra.

67a

of finding the licensee’s conclusion to be unreasonable, ‘‘A

conclusion may be supported by substantial evidence even

though a plausible alternative interpretation of the evi-

dence would support a contrary view.’’

The situation here is unlike the case of an agency’s re-

view of a fact finding proposed by its hearing officer. In

that situation, it is the agency that has the primary discre-

tion, and it may differ with its hearing officer even though

his finding is supported by substantial evidence.” Even

there, where the agency has primary discretion, its ‘‘depar-

tures from the Examiner’s findings are vulnerable if they

fail to reflect attentive consideration to the Examiner’s de-

cision.’’ . Certainly in a situation where it is the licensee

that has primary discretion, and his judgment as to domi-

nant impact is substantially supported by responsible per-

sons skilled in judging these matters, this must be given

attentive consideration before determining the licensee’s

judgment was unreasonable. ,

B. The Function of the Reviewing Court

When an agency purports to exercise regulatory disere-

tion conferred by Congress, a court reviewing its order

generally accords wide latitude to the agency. The court

has responsibilities and restraints. Its responsibility is to

assure that the agency has not abused or exceeded its au-

thority, that every essential element of the order is sup-

ported by substantial evidence, and that the agency has

65 Western Airlines v. CAB, 161 U.S.App.D.C. 319, 326, 495

F.2d 145, 152 (1974).

6 Jd. at 327, 495 F.2d at 153. Lorain Journal Co. v. FCC, 122

U.S.App.D.C. 127, 351 F.2d 824 (1965), cert. denied, 383 U.S. 967,

86 §.Ct. 1272, 16 L.Ed.2d 308 (1966).

67 Greater Boston Television Corp. v. FOC, 143 U.S.App.D.C.

383, 395, 444 F.2d 841, 853 (1970), cert. denied, 403 U.S. 923, 91

S.Ct. 2229, 29 L.Ed.2d 701 (1971), and case cited.

68a

given reasoned consideration to the pertinent factors." The

restraint arises out of the consideration that industry reg-

ulation has been entrusted by Congress ‘‘to the informed

judgment of the Commission, and not to the preferences of

reviewing courts.’’® If an agency has ‘‘genuinely engaged

in reasoned decision-making . . . the court exercises re-

straint and affirms the agency’s action even though the

court would on its own account have made different find-

ings or adopted different standards,’’ ™

In the case of the fairness doctrine, a reviewing court

is under the same injunction against injecting its own

preferences as the rule of decision. And so when the

Commission, in the exercise of its discretion, affirms the

licensee’s exercise of its discretion, the role of the court

is most restricted." But the court has a greater responsi-

bility than is normally the case, when it reviews an agency’s

fairness rulings that upset the licensee’s exercise of jour-

nalistie discretion, both because the area is suffused with

First Amendment freedoms ™ and because Congress has

determined that the interest of the public, and its right

to know, is furthered by giving primary discretion not to

the government agency but instead to the regulated li-

censee, Congress has sharply narrowed the scope of

agency discretion—which the court must see is not ex-

®§ Mobil Oil Co. v. FPC, 417 U.S, 283, 94 S.Ct. 2328, 41 L.Ed.2d

72 (1974) ; see also Permian Basin Area Rate Cases, 390 U.S, 747,

791-792, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968).

6° 390 U.S. at 767, 88 S.Ct. at 1360.

% Greater Boston TV Corp. v. FCC, supra, 143 U.S.App.D.C. at

393, 444 F.2d at 851.

™ EB. g., DNC v. FCC, supra, 148 U.S.App.D.C. at 404, 460 F.2d

at 912; Neckritz v. FCC, 446 F.2d 501 (9th Cir, 1971), citing

American Tel. & Tel. v. United States, 299 U.S. 232, 57 S.Ct. 170

81 L.Ed. 142 (1936).

72 Compare WAIT Radio v. FCC, 135 U.S.App.D.C. 317. 4

F.2d 1153 (1969). ey oe

69a

ceeded—to a government intervention permissible only for

abuse of the licensee’s journalistic judgment. If the Com-

mission can claim wide latitude in and deference for its

exercise of prerogative to overrule and discard the jour-

nalistie judgments of the broadcast licensees, the very

premise of the legislative structure is undermined.

In Judge Tamm’s phrase, in another case involving a

Commission determination that the licensee violated the

fairness doctrine, and aspects of intrusion on the licensee’s

journalistic freedoms: ‘‘Not only must the Commission

take a hard look at the case in this light but so must this

court.’’ 73

To restate, even in a fairness doctrine case the court is

not given carte blanche or an authority to interpolate its

own discretion or judgment as to what should be done by

the agency or what should have been done by the licensee,

But a court is properly exercising the high judicial fune-

tion of assuring that agencies respect legislative man-

dates ™ when it studies the record tu make certain that the

Commission has not interpolated its own judgment and

wrested the primary discretion Congress placed in the

licensee, without making the requisite showing of abuse of

the licensee’s journalistic discretion.

73 Brandywine-Main Line Radio, Ine. v. FCC, supra, 153 US.

App.D.C. at 341, 473 F.2d at 52 (1972). Judge Wright did not

consider the fairness doctrine ruling. Chief Judge Bazelon, dis-

senting, stated that the Commission’s application of the fairness

doctrine violated constitutional safeguards.

The general ‘‘hard look’’ doctrine of the Rule of Administrative

Law originated in a case reviewing an FCC action, see WAIT Ra-

dio v. FCC, supra, though it has been extended to other areas, see

e. g., Natural Resources Defense Council v. Morton, 148 U.S.App.

D.C. 5, 458 F.2d 827 (1972).

™ National Automatic Laundry & Cleaning Council v. Shultz,

143, U.S.App.D.C. 274, 281, 443 F.2d 689, 696 (1971).

70a

C. The Need for Selection Latitude of Broadcast and In-

vestigative Journalism

The doctrine that respects licensee determination, if not

unreasonable, concerning the issues tendered in a news

broadcast, is a matter of concern for the vitality of broad-

cast journalism generally, and for investigative journalism

in particular.

The Commission’s opinion in this case reaffirmed—

our recognition of the value of investigative reporting

and our steadfast intention to do nothing to interfere

with or inhibit it. See WBBM-TV, 18 FCC 2d 124,

134 (1969); Hunger in America, 20 FCC 2d 143, 150

(1969).

In Hunger in America, supra, it not only commended CBS

‘*for undertaking this documentary on one of the tragic

problems of today’’ but it undertook to clarify its policy

as to a claim that a licensee deliberately distorted the news,

to avoid concern lest its inquiry in that case ‘‘may tend to

inhibit licensees’ freedom or willingness to present pro-

gramming dealing with the difficult issues facing our soci-

ety.’’ 20 FCC 2d at 150. It reiterated the ruling of ABC,

16 FCC 2d 650 (1969), that it would require extrinsic evi-

dence of e.g., a charge that a licensee staged news events.

‘‘Otherwise, the matter would again come down to a judg-

ment as to what was presented, as against what should

have been presented—a judgmental area for broadcast

journalism which this Commission must eschew.’’ 16 FCC

2d at 657-58.

In the world of news documentaries, there is inherently

an area of ‘‘judgment as to what was presented.’’ And if

its judgment is not unreasonable, the licensee cannot fairly

be held faithless to fairness doctrine responsibilities.

Investigative reporting has a distinctive role of uncov-

ering and exposing abuses. It would be undermined if a

Tla

government agency were free to review the editorial judg-

ments involved in selection of theme and materials, to over-

rule the licensee’s editorial ‘‘judgment as to what was

presented,’’ though not unreasonable, to conclude that in

the agency’s view the expose had a broader message in

fact than that discerned by the licensee and therefore, un-

der the balancing obligation, required an additional and

offsetting program.

The field of investigative exposures, as the Commission

has noted, is one in which ‘‘[p]rint journalism has long

engaged [and] been commended,’’™ and to which broad-

cast journalism, also part of the press is ‘‘no less entitled.’’

Even for print journalism, not subject to the extreme time

coverage limitations of broadcasters, a requirement like the

Commission’s would be considered a ‘‘millstone’’ burden-

ing investigative reporting. We refer to the affidavit sup-

plied to the Commission by J. Edward Murray, associate

editor of the Detroit Free Press and immediate past presi-

dent of the American Society of Newspaper Editors. These

are representative excerpts:

The whole process of investigative reporting is a com-

plex and sensitive equation involving editors with

high purpose and intuition, reporters with skill and

courage, and publishers willing to incur heavy ex-

pense and the risk of offending both public opinion

and advertisers. This equation, as I said, is powered

by the drive to correct evils in the society.

If we weight the equation with the requirement that

the press look for, and report, good wherever its finds

and reports evil, we might as well forget investigative

reporting. We will have overwhelmed it with the

deadly commonplace of things as they are.

™ WBBM-TV, 18 FCC 2d 124, 134 (1969).

72a

[I]t would be commonplace newspaper procedure that

if an editor decided that some private pensions are

flawed or useless, and published a typical expose to

this effect, the expose would simply assume that the

majority of private pension plans were more or less in

acceptable shape. Otherwise, the forces of both law

and business would have corrected so obvious a de-

ficiency.

7 . . . 7 a

The investigative reporter’s thrust is against pre-

sumed evils in society. If he must always give an

equivalent weight to the good (which is now presumed)

in the situation he is investigating, his thrust would

become so dulled as to be boring—and unread. News-

papers, including the Detroit Free Press, investigate

and expose policemen who are on the ‘‘take’’ in the

dope rackets. If an equivalent weight or time must

be given to policemen who are not on the ‘‘take’’, the

whole campaign becomes so unwieldy and pointless as

to be useless.

The suggestion of a positive non-expose, in the wake

of an original negative expose, falls of its own weight.

No one would read it. It would thus be a waste of

space. And it would add one more millstone to the

already considerable burden of legitimate investigative

reporting. (JA 140-42.)

To like effect are affidavits in the record from broadcast

journalists.”

7 An apt example appears in Mr. David Brinkley’s affidavit

concerning a program he narrated on highway construction: ‘‘I

did not think at that time that I was obliged to recite (or find

someone to recite) that r°t all highway construction involves cor-

ruption, that many highways are built by honorable men, or the

like.”’ JA 132-33,

73a

The basic point merits emphasis: A report that evils

exist within a group is just not the same thing as a report

on the entire group, or even on the majority of the group.

An expose that establishes that certain policemen have

taken bribes, or smoked pot, or participated in a burglary

ring, is not a report on policemen in general. It may be

that the depiction of particular abuses will lead to broader

inferences. Certainly severe deficiencies within an indus-

try as a whole. When one bank fails, others may suffer a

run. But the possible inferences and speculations that

may be drawn from a factual presentation, are too diverse

and manifold—ranging, as they inevitably must, over the

entire span of viewer predilections, characteristics and

reactions—to serve as a vehicle for overriding the journal-

istic judgment.

There is residual latitude in the Commission to condemn

the journalist’s vision as an unreasonable exercise of dis-

cretion. But if the Commission is to condemn a journal-

ist’s vision as excessively narrow, it must show that its own

vision is broadgauged. Yet here we are reviewing a Com-

mission opinion that says: ‘‘It is difficult to see why a net-

work would devote its time ard effort to a program with

no broad impact or value.’’ (Par. 20). But abuses in an in-

dustry are of interest to the public, and merit a documen-

tary, if they exist in any significant amount, even though

they are not the general rule. Failures on automobiles are

an example. Yet this obvious underpinning for an adi-

torial judgment to run a limited expose was not referred to

by the Commission.

The Commission simply neglected our caution in Healey

v. FCC, supra, 460 F.2d at 922:

Petitioner’s basic misapprehension here is a con-

fusion of an issue over newsworthiness with a ‘‘con-

troversial issue of public importance.’’ Merely be-

cause a story is newsworthy does not mean that it

contains a controversial issue of public importance.

74a

The point is fundamental In a case where NBC has

made a reasonable judgment that a program relates to,

and the public has an interest in knowing about, the ‘‘bro-

ken promise’’ abuses that its reporters have identified in

various private pension plans, and there is no controversy

concerning the existence in fact of such abuses, then the

balancing of the fairness doctrine cannot permit the in-

trusion of a government agency to make its own determi-

nation of the subject and thrust of the program as a report

that such abuses feature private pensions generally, and

with such enlargement to a controversial status to burden

the reporting with the obligation of providing an opposing

view of the escalated controversy.

VI. Tue Present Recorp Sustains Tue Licenser’s Epr-

TORIAL JUDGMENT Acatnst A CHarGE or Requisite Bap

Fartu orn UNREASONABLENESS

This is the first case in which a broadcaster has been

held in violation of the fairness doctrine for the broadcast-

ing of an investigative news documentary that presented

a serious social problem We have already stated that the

Commission used an unsound legal standard in reviewing

the licensee’s exercise of discretion. What result ensues—

on the record before us—from application of the sound

legal standard?

A. The Issue As to the Issue

In law, as in philosophy, the task of ascertaining the

sound rule or precept often turns significantly on rigor in

the statement of the problem. Nowhere is this more the

ease than in the application of the fairness doctrine, for in

regard to the determination that a program raised a ‘‘con-

troversial issue of public importance,’’ the first and often

most difficult step is ‘‘to define the issue.’’ ™

™ Green v. FCC, 144 U.S.App.D.C. 353, 359, 447 F.2d 323, 329

(1971) ; Healey v. FCC, 148 U.S.App.D.C. 409, 412, 460 F.2d 917,

920 (1972).

75a

In holding that ‘‘Pensions’’ presented views advocating

only one side of a controversial issue of public importance,

the Commission defined that issue in these terms: ‘‘that

issue being the overall performance of the private pension

system and the need for governmental regulation of all

private pension plans.’’ (Par. 19).

In so defining the issue, the Commission overruled NBC’s

judgment. NBC was called to answer AIM’s complaint

that NBC had given a one-sided view of a controversial

issue of public importance—in its ‘‘picture of the private

pension system of the United States.’’"* NBC responded

that ‘‘Pensions’’ was primarily designed to expose failures

found in some private plans rather than to evaluate the

overall performance of the private pension system and

that the program did not urge any specific legislative or

other remedies.”

The controversial ‘‘issue’’ identified by the Commission

reflects a compound of issues—one, whether problems exist

in private pension plans generally, and two, whether over-

all legislation should be enacted to remedy those problems.

In aid of analysis, these issues will be discussed separately.

In our view, the present record sustains NBC as having

exercised discretion, and not abused discretion, in making

the editorial judgment that what was presented, in the

dominant thrust of the program, was an expose of abuses

that appeared in the private pension industry, and not a

general report on the state of the industry. If the judg-

™ AIM also said this was a ‘‘distorted’’ picture, but the FCC

dropped the ‘‘distortion’’ charge out of the case. See text accom-

panying notes 10-13, supra.

Letter of February 14, 1973 to FCC (JA 40), recording NBC’s

judgment that the program ‘‘constituted a broad overview of some

of the problems involved in some private pension plans’’ and ‘‘did

not attempt to discuss all private pension plans, nor . . . urge the

adoption of any specific legislative or other remedies.’’ JA 41.

76a

ment of NBC may stand, there is no showing of a con-

troversial issue. The staff’s ruling that NBC was unrea-

sonable in this judgment was not sustained by the Com-

mission. And in our view, the present record does not

establish a basis for the conclusion that the licensee’s

judgmental conclusion may be set aside as unreasonable

and as constituting an abuse rather than a permissible

exercise of discretion.

1. The description of the program in TV columnist re-

views.

NBC offered the Commission an exhibit showing the ap-

praisal of some 25 television critics who reviewed the pro-

gram, appraisals made contemporaneously, in September,

1972, immediately or shortly after the broadcast. Typical-

ly, the critical comments were favorable, reporting that the

program was an important and worthwhile public news

service, ‘‘superlative investigative reporting.’’ Many

noted that most view °s were likely glued elsewhere, as

was apparently the case, though perhaps one may take

heart from Clarence Peterson's observations in the Chicago

Tribune: ‘* Most viewers will have watched Marcus Welby

instead but it takes only a few hard-nose skeptics to rattle

the cage.’’

More important for present purposes are the reviewers’

descriptions of the program. These appear in Appendix

B to this opinion. In general, the reviewers’ appraisals of

the nature of the program are consistent with NBC’s edi-

torial judgment. Exaiples include the Philadelphia Daily

News: ‘‘A potent program about pitfalls and failures of

some private pension plans of business and unions. . . it

was an angry, incisive study that focused on some people

who felt cheated by their blind faith in Pensions.’’ More

succinct was UPI: ‘*Tough study of the failure of some

private pension systems.”’

The note that the program undercut a ‘‘blind faith’’ in

pensions program was struck in a constructive way in re-

77a

views like that in the Chicago Tribune: ‘‘ Pension admin-

istrators may face some hard questions from employees

when they get to work this morning. If so, NBC Reports

will have done its job.’’

Other comments cut from a different angle. Thus, the

review in Business Insurance put it: ‘‘The program was by

no means objective; it could not have been... there was

just not enough time to do it thoroughly. [Newman did]

point out that there were many good pension plans.’’ The

Denver Pust said the documentary had ‘‘a disorganized

approach’’ and added: ‘‘ Likewise nothing was said about

what makes good pension systems work... but NBC should

be commended for publicizing a condition of social an-

archy.’’ And intervenor AIM brings to our attention that

John J. O’Connor in the New York Times has written:

‘“‘The NBC program strongly implied than 90 per cent

were failures. The title was, ‘Pensions: The Broken

Promise,’ not ‘Pensions: Broken Promises.’’’ AIM

stresses that reviews in the Boston Globe, Chicago Today

and Hollywood Reporter, reflected reactions to the pro-

gram as commenting on the private pension system as a

whole.

The Commission’s opinion dismissed the newspaper

reviews. It stated its determination of the question must

rest with the program itself, and added (fn. 4): ‘‘Such

brief and general one-line summaries provide no informa-

tion as to what particular views on the subject of pensions

may have been presented in the one-hour documentary, and

hence are of little value in determining the applicability

of the fairness doctrine. .. .’’

Obviously, television reviews cannot be conclusive, for

the obligation of licensees and the Commission to determine

fairness doctrine questions is not delegable. The opinion

of this court does not depend in any critical measure on

television reviews. Yet we are here concerned not with

some broad question of fairness doctrine responsibility,

78a

but with something that is not only closer to a question of

fact—the description of the program—but is a matter on

which the reviewer is expected to make an accurate report

to the public as his primary task. Even if the Commission

believed the reviewer to be wrong, it should have consid-

ered whether the review did not have more than minimal

value on the issue of the NBC’s reasonableness in saying

that the subject of the program was that of abuses discov-

ered, of some problems in some pension plans. If this was

the primary thrust of the program, as discerned by per-

sons trained to view such programs attentively and report

their description to the public, it is a substantial factor—

though, we repeat, not a conclusive one—to an agency ex-

ercising its surveillance role under correct standards of re-

view. As for the Commission’s comment that the brief

format itself undercuts any significance for these news-

paper reviews, this is belied by the quite different reactions

recorded in the different newspaper reviews.

2. Application of the correct standard.

Had the Commission applied the correct standard of

review, the consequence clearly would have been an ac-

ceptance of NBC’s position as a reasonable statement of

the subject of the ‘‘Pensions’’ broadcast. There were a

few explicit statements of views on the overall performance

of private pension plans that are of no consequence in

terms of fairness doctrine, as will be presently seen.*

Otherwise, the plain heft of the program was the recitation

of case histories that identified shortcomings of private

pensions, and various interviews that identified the abuses

in more general terms. But effective presentation of

problems in a system does not necessarily generate either

comment on the performance of the system as a whole, or

a duty to engage in a full study. This is plain from our

discussion of investigative journalism.

*In part V-B.

79a

The licensee does not incur a balancing obligation solely

because the facts he presents jar the viewer and cause him

to think and ask questions as to how widespread the abuses

may be.

The licensee’s judgment on am issue of investigative

journalism is not to be overturned unless the agency sus-

tains a heavy burden and makes a clear showing that the

licensee has been unreasonable, that there has been an

abuse of journalistic discretion rather than an exercise of

that discretion. We have been presented no basis for sus-

taining the view that there is such unreasonableness on

the part of a licensee who presents undisputed facts—and

no party has contended that the abuses identified by NBC

do not exist—because it has failed to treat them as a gen-

eral indictment of a system.

B. Comments on the ‘‘Overall”’ Performance of the Private

Pension Plan

In previous sections of this opinion we have identified

the dangers to broadcast journalism, and investigative re-

porting in particular, if descriptions of abuses in a system

are converted inferentially into a broadside commenting

adversely on the overall system.

A separate question is presented, however, by the com-

ments in the program that differs from the description of

particular evils.

1. Adverse comments on overall performance.

We examine, seriatim, those passages of the ‘‘ Pensions’”’

program that may be taken as adverse comments on overall

performance. We need not refine whether a fairness doc-

trine obligation is generated by this kind of comment, either

alone or with some kind of FCC determination. For in this

case, as we shall see, NBC provided offsetting material on

the overall performance of pension plans. But this dis-

cussion will at least identify our concern with some of the

80a

problems. As we shall see, some statements are unques-

tionably to be given a different reading.

(1) the short passage spoken by a MAN (Tr. 1), who

begins that the pension system is essentially a consumer

fraud, and ends by saying it is ‘‘an insurance contract that

can’t be trusted.’’ Overall-Adverse.

(2) Edwin Newman’s statement (p. 2) that the avaliabil-

ity of annual reports filed in the Labor Department ‘‘is a

meager protection for the twenty-five million Americans

who are in private pension plans.’’

Neither this nor the next sentence, that ‘‘very many of

the hopes will prove to be empty’’ says that all, or even

most, of the 25 million Americans will be unprotected.

The statement that the mere filing of the reports is meager

protection hardly seems controversial, as to the ‘‘very

many’’ whose pension hopes will be lost by e.g., inability

to meet stringent vesting provisions.

(3) Herbert Dennenberg, at Tr. 4: Paragraph ending

‘‘most pension funds are inadequate.’’ This is Overall-

Adverse—Arguable.

(a) Mr. Dennenberg says that those who retire under

the plans typically receive only a thousand dollars a year,

which is inadequate even with social security. This is a

general comment, but we do not see what has been identi-

fied as a controversial issue. AIM’s complaint of Novem-

ber 27, 1972, stresses:

More than 5 million retired employees are receiving

benefits from them [the plans] to the tune of about $7

billion a year.

This datum in AIM’s complaint palpably confirms rather

than contradicts $1,000 as a typical figure.” But if there

*° And AIM later cited with approval a Washington Post article

that quoted Mr. Donald Landay of the Bureau of Labor statistics

as saying: ‘‘The median benefit being paid is slightly over $100

a month.’’

8la

is a controversial issue here which requires reference to

AIM’s datum, then it should be noted that this very fact

was brought out on the ‘‘Pensions’’ program by Mr. Rus-

sell Hubbard of the National Association of Manufac-

turers (see Tr. 18).

(b) Whether a $1,000 annual amount is ‘‘adequate even

with social security,’’ is a value question.

The complaint of inadequacy of pension is also, per-

haps, one meaning that might be given to the caption of

‘*broken promise’’—if one posits that there was a promise

of an ‘‘adequate’’ retirement income. There is plainly no

unreasonable abuse of discretion for the licensee to deter-

mine that the complaint of ‘‘inadequacy,’’ though surfac-

ing in the program, is simply not the main thrust of the

program, which basically turns on whether pension plans

do not pay out the amounts that were held out to the em-

ployees when their work was done, and if not, why not.

The FCC, disagreeing with its staff, has held the fairness

doctrine would be both unworkable, and an intolerably

deep involvement in broadcast journalism, if every single

statement, inference, or sub-issue, could be built up into a

requirement of countering presentation.”

(c) Mr. Dennenberg also says that over half the people

will have nothing at all from pension plans. See also Tr.

5: ‘*There have been studies that indicate that most people

won’t collect.’’ Under current plans, pension rights de-

pend on a combination of longevity, endurance in specified

employment for a minimum vesting period, and lack of

termination of the plan, and Mr. Dennenberg describes

this as ‘‘an obstacle course.’’

Again AIM does not contradict the basic fact asserted

by Mr. Dennenberg. Its complaint compares 5 million

receiving pensions with 30 million workers now covered.

81 In re NBC (Fairness ruling re Aircraft Owners and Pilots

Assn.), 25 FCC 2d 735, 736 (1970).

82a

But it does not assert that the number who worked under

pension plans but have failed to qualify for pensions stands

below 5 million. And Mr. Dennenberg’s statement is not

too different in impact from one in a Washington Post

article that AIM lauds as balanced journalism.” Obviously

a greater burden would have to be met by the FCC in iden-

tifying the existence and nature of a controversial issue of

importance.

(4) Senator Harrison Williams (Tr. 4-5). Following a

statement by Mr. Newman that many plans have restric-

tions and exclusions buried in fine print, comes Senator

Williams’ comment that the plans ‘‘suggest the certainty

of an assured benefit upon retirement’’ which gives ‘‘a

sense of false security.’’

Newman: Senator, the way private pension plans

are set up now, are the premises real?

Williams: The answer is, they are not.

Senator Williams enlarges that he wants descriptions

of the realities of plans that are clear and that do not re-

quire a lawyer.

Here again we have a general comment on the plans,

that the eligibility requirements are not clearly identified.

But we do not see wherei

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