Appendix — Hispanic Broadcasting Ltd. Partnership v. Federal Communications Commission

Supreme Court brief1991

Ask Donna

What actually matters in this document.

Text

we, j arena Court, U.S.

} a

61-130

JUL 22 wR

OFFIGR GF THE CLERK

No. 9l- __

IN THE

Supreme Court of the Gnited States

OCTOBER TERM, 1991

HISPANIC BROADCASTING SYSTEMS, INC.,

A DELAWARE CORPORATION,

Petitioner,

FEDERAL COMMUNICATIONS COMMISSION,

Respondent.

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

STEPHEN A. SHARP*

ALLAN A. TUTTLE

PATTON, Boccs & BLOw

Suite 900

2550 M Street, N.W.

Washington, DC 20037

(202) 457-5227

“Counsel of Record

aed

PRESS OF BYRON 8S. ADAMS, WASHINGTON, D.C. (202) 347-8203

TABLE OF CONTENTS

Appendix A

Court of Appeals Decision En Bane ...............

Appendix B

Court of Appeals Panel Decision ....................

Appendix C

Federal Communications Commission

ER lhl AE EE I er DENN ALOE ee A OE RETR

APPENDIX A

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 12, 1990 Decided April 23, 1991

As amended May 14, 1991

No. 87-1285

COALITION FOR THE PRESERVATION OF

HIsPANIC BROADCASTING, APPELLANT

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

SPANISH INTERNATIONAL COMMUNICATIONS CORP.

STATION REPRESENTIVES ASSOCIATION, INC.

FOUCE AMUSEMENT ENTERPRISES, INC.

UNIVISION, INC.,

INTERVENORS

No. 87-1287

HISPANIC BROADCASTING SYSTEMS, INC., APPELLANT

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

SPANISH INTERNATIONAL COMMUNICATIONS CORP.

BAHIA DE SAN FRANCISCO TELEVISION Co.

SEVEN HILLS TELEVISION Co.

STATION REPRESENTATIVES ASSOCIATION, INC.

FoucE AMUSEMENT ENTERPRISES, INC.

UNIVISION, INC.

INTERVENORS

No. 87-1289

HISPANIC BROADCASTING LIMITED PARTNERSHIP,

APPELLANT

¥,

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

SPANISH INTERNATIONAL COMMUNICATIONS CORP.

BAHIA DE SAN FRANCISCO TELEVISION Co.

SEVEN HILLS TELEVISION Co.

STATION REPRESENTATIVES ASSOCIATION, INC.

UNIVISION, INC.

INTERVENORS

No. 88-1564

Susan M. JARAMILLO, APPELLANT

Vv.

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

Seven HI.Lts TELEVISION Co.

Univision Ho.pIncs, INC., ET AL.,

INTERVENORS

No. 88-1588

TVL CorPORATION, APPELLANT

Vv.

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

Univision Ho.pincs, INc., et al., INTERVENOR

No. 88-1596

THE COALITION FOR THE PRESERVATION OF

HISPANIC BROADCASTING, et al., APPELLANTS

vv.

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE

Univision Ho.pincs, INc., et al., INTERVENOR

Notices of Appeals from an Order of the

Federal Communications Commission

Morton L. Berfield, with whom Lewis I. Cohen and Roy

W. Boyce were on the brief, for appellant Hispanic Broad-

casting Limited Partnership in No. 87-1299.

Steven A. Sharp for appellant Hispanic Broadcasting

System in No. 87-1287. Martin E. Firestone also entered

an appearance for appellant.

Katrina Renouf, with whom Margot Polivy was on the

brief, for appellant Susan Jaramillo in No. 88-1564.

Bruce A. Eisen was on the brief for appellant Coalition

for the Preservation of Hispanic Broadcasting in Nos. 87-

1285 and 88-1596.

James P. Riley and Robert A. DePont were on the brief

for appellant TVL Corporation in No. 88-1588.

Daniel M. Armstrong, Associate General Counsel, Fed-

eral Communications Commission, with whom Robert L.

Pettit, General Counsel and Sue Ann Preskill, Counsel,

Federal Communications Commission were on the brief,

for appellee in Nos. 87-1285, 87-1287, 87-1299, 88-1564,

88-1588 and 88-1596.

Linda K. Smith and David H. Solomon entered appear-

ances for intervenor Station Representatives Association,

Inc. in Nos. 87-1285, 87-1287 and 87-1299.

L. Andrew Tollin and Leon T. Knauer entered appear-

ances for intervenor Seven Hills Television Co. in Nos.

87-1285, 87-1287, 87-1299, 88-1564 and 88-1588.

N. Frank Wiggins entered an appearance for intervenor

Fouce Amusement Enterprises, Inc. in Nos. 87-1285, 87-

1287 and 87-1299.

Richard E. Wiley, John C. Quale, James R. Bayes and

Diane Z. Goldman entered appearances for intervenors

Spanish International Communications and Univision

Holdings, Inc., et al. in Nos. 87-1285, 87-1287, 87-1299,

88-1588 and 88-1596.

John L. Tierney, Richard F. Swift and Ann Bavender

entered appearances for intervenor Bahia de San Fran-

cisco Television Co. in No. 87-1287.

Before: Mixva, Chief Judge, WALD, EDwarbs, RUTH B.

GINSBURG, SILBERMAN, BUCKLEY, WILLIAMS, D.H. GINSBURG, -

SENTELLE, THOMAS, HENDERSON and RANDOLPH, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Wi.Liams.

Dissenting Opinion filed by Chief Judge Mixva.

WILuiaMs, Circuit Judge: This is an appeal from a Fed-

eral Communications Commission decision granting a con-

ditional renewal of several television licenses. We deny the

challenges of two petitioners for failure to exhaust admin-

istrative remedies and those of two others for want of

standing.’

As the panel opinion presented the facts in detail, see

Coalition for the Preservation of Hispanic Broadcasting v.

FCC, 893 F.2d 1349 (D.C. Cir. 1990), we provide only a

summary. Spanish International Communications Corpo-

ration and Bahia de San Francisco (collectively “Spanish

International”) held six TV licenses, the first acquired by

Spanish International’s corporate predecessors in 1961. In

January 1986 an administrative law judge found that

Spanish International’s relations with certain Mexican

interests violated a Communications Act provision forbid-

ding alien ownership of broadcasting stations. See 47

U.S.C. § 310(b). Facing a risk that this issue would doom

its efforts to secure license renewal, Spanish International

negotiated a settlement agreement under which, immedi-

ately upon renewal, it would sell the stations to Hallmark

Cards, Inc. In October 1986 the Commission’s Review

'We also reject the claim of TVL Corporation for the reasons

stated in the panel opinion, Coalition for the Preservation of His-

panic Broadcasting v. FCC, 893 F.2d 1349, 1355 (D.C. Cir. 1990).

| |

Board approved this settlement and conditionally renewed

Spanish International’s licenses.

At about the time the Review Board acted, petitioners

Hispanic Broadcasting Systems, Inc. (“HBS”) and His-

panic Broadcasting Limited Partnership filed applications

for the licenses and asked the Commission to reverse the

Review Board. As the filings came years after the relevant

FCC “windows” had closed, the Commission rejected the

applications as untimely. Nonetheless, it permitted peti-

tioners to appear before it as amici and considered their

argument that the renewal and transfer of Spanish Inter-

national’s licenses violated the FCC’s “Jefferson Radio”

policy, which prohibits any licensee from transferring a

broadcast station at full value while a proceeding that

might lead to license forfeiture is pending. See Jefferson

Radio Co. v. FCC, 340 F.2d 781, 783 (D.C. Cir. 1964). The

Commission rejected this argument and affirmed the

Review Board’s approval of the transfer agreement and

license renewal.

Two of the challengers are prospective applicants, HBS

and the Partnership, and three, the Partnership (in a sec-

ond capacity), Susan Jaramillo and the Coalition for the

Preservation of Hispanic Broadcasting, are purportedly

dissatisfied viewers. We hold that (1) HBS and the Part-

nership may not obtain judicial review because they did

not timely invoke the administrative procedures required

of prospective applicants; and (2) the viewers do not have

standing to sue because they do not fall within the zone

of interests contemplated by § 310(b).

The Would-Be Applicants

HBS and the Partnership seek two kinds of relief. First,

they ask us to overturn the FCC’s decision to reject their

applications as untimely. We deny this relief for the rea-

sons stated by the panel opinion. 893 F.2d at 1357-52.

That resolved, we turn to whether such untimely appli-

cants may now, in the hope of vacant channels and new

filing opportunities, ask this court to overturn the FCC’s

approval of the renewal and transfer agreement.

Both panel opinions and, upon rehearing, the litigants

themselves treated this issue as a matter of Article III

standing: Are the prospects of these latecomers’ winning

the licenses (if they were vacant) serious enough that they

were truly harmed by the Commission’s rejection of

claims that might have led to nonrenewal and vacancy?

See generally Warth v. Seldin, 422 U.S. 490 (1975). Yet,

partly because the applicant petitioners’ untimeliness

foreclosed a Commission assessment of their qualifica-

tions, the question cannot be answered without guess-

work. As petitioners’ tardiness also entailed a failure to

exhaust administrative remedies, however, we can resolve

the case on non-constitutional grounds. See Coker v.

Sullivan, 902 F.2d 84, 88 (D.C. Cir. 1990) (dismissing case

on non-constitutional jurisdictional grounds to avoid

problematic Article III inquiry); Moore v. United States

House of Representatives, 733 F.2d 946, 954 n.39 (D.C. Cir.

1984) (“[W]e should avoid deciding questions of a consti-

tutional nature unless absolutely necessary to a decision

of the case.”) (internal quotes omitted). While the govern-

ment did not specifically raise the exhaustion issue, the

doctrine concerns economy not only of agency but also of

judicial resources, see Weinberger v. Salfi, 422 U.S. 749,

765 (1975), and accordingly this court may in its discre-

tion raise the issue on its own. See, e.g., Dettmann v.

United States Dep’t of Justice, 802 F.2d 1472, 1476-77 &

n.8 (D.C. Cir. 1986); Power Plant Division, Brown & Root,

Inc. v. OSHRC, 673 F.2d 111 (5th Cir. 1982); Brown v.

Fauver, 819 F.2d 395, 398-99 (3d Cir. 1987).

The judicial review provision of the Communications

Act, 47 U.S.C. §402(b), authorizes disappointed

“applicant[s]” and, more generally, “any ... person who

is aggrieved or whose interests are adversely affected” by

a Commission licensing order to sue for relief in this

court. Yet even “aggrieved” persons must comply with

prescribed administrative procedures. See Spanish Inter-

national Broadcasting Co. v. FCC, 385 F.2d 615 (D.C. Cir.

1967); Red River Broadcasting Co. v. FCC, 98 F.2d 282

(D.C. Cir. 1938); see also Valley Telecasting Co. v. FCC,

DEE

336 F.2d 914 (D.C. Cir. 1964); Springfield Television

Broadcasting Corp. v. FCC, 328 F.2d 186 (D.C. Cir. 1964).

Indeed, § 405 of the statute itself requires aggrieved per-

sons who were not parties to the agency proceedings, as

one prerequisite to judicial review, to petition the Com-

mission for reconsideration of disputed orders.’ In gen-

eral, failure to exhaust administrative remedies bars

judicial review of FCC orders.

Spanish International illustrates the exhaustion princi-

ple at work in the licensing context. International Pan-

orama TV sought a license to construct a new television

station. A competitor, Spanish International (apparently

the same company as the beneficiary of today’s ruling),

twice submitted petitions attacking International Panora-

ma’s application, invoking the grounds it afterwards

raised on appeal.’ Because both petitions were untimely,

“Although the applicant petitioners were not parties to the pro-

ceedings after denial of their untimely applications, their presen-

tation to the Commission of the theories that they raise here, and

the Commission’s consideration of those theories, satisfies § 405

under the cases summarized at p. 12 below.

“Thus Spanish International met the condition that our cases

sensibly impose for satisfying the exhaustion requirement of

§ 405: the Commission had a fair opportunity to address the

issues raised on appeal. See United Church of Christ v. FCC, 911

F.2d 803, 809 (D.C. Cir. 1990) (“As we stated in Meredith Corp.

uv. FCC [809 F.2d 863, 870 (D.C. Cir. 1987)], ‘[a]s a condition pre-

cedent to judicial review, section 405 requires only that the Com-

mission have a “fair opportunity” to pass on [an] issue.’”); see also

cases cited at p. 12 below.

The dissent’s suggestion that the Commission did not address

Spanish International's claims on the merits, see Dissent at 4-5,

is therefore irrelevant. It is also false. The court observed that

“because of their public importance, [the Commission] treated

extensively the questions raised by [Spanish International]. It

found that all of the points lacked merit save its claim respecting

{International Panorama’s} character qualifications, and this issue

it designated for hearing.” 385 F.2d at 618. As the opinion suggests

and the record and briefs confirm, the Commission later rejected

Spanish International's efforts to resurrect the same defeated

attacks on International Panorama’s qualifications. See id. at 619;

Appellate Record at 992-97, 1016-19, Spanish Int'l Broadcasting

Co. v. FCC, 385 F.2d 615 (D.C. Cir. 1967) (No. 20,326). These

—— formed Spanish International's merits argument on

appeal.

ee eT

the FCC refused to admit Spanish International as a

party to the proceedings. After unsuccessfully petitioning

for reconsideration under § 405, Spanish International

asked this court (1) to reverse the FCC’s order denying

it formal participation in the application proceedings and

(2) to reverse the FCC’s decision that International Pan-

orama satisfied the Commission’s character qualifications.

See Appellant’s Brief, Spanish Int’l Broadcasting Co. v.

FCC, 385 F.2d 615 (D.C. Cir. 1967) (No. 20,326).

The court affirmed the FCC’s judgment that Spanish

International’s petitions were untimely and, accordingly,

ruled that Spanish International had failed to exhaust the

prescribed administrative remedies. 385 F.2d at 622-27. It

then refused to consider Spanish International’s substan-

tive objections to the FCC’s decision in favor of Interna-

tional Panorama. See id. at 627-28. “[E]xhaustion of

administrative remedies,” explained the court, “means uti-

lization of the earliest available corrective step,” and

where a litigant “‘neglect{s] to avail itself of such an

opportunity, it may thus have foreclosed itself from scek-

ing further relief.’” Jd. at 628, quoting Red River, 98 F.2d

at 287-88.

As there, so here. An applicant for a broadcast license

must file a timely application with the FCC before he may

challenge an adverse Commission order in this court. This

requirement promotes the values that the exhaustion doc-

trine was designed to protect: administrative and judicial

economy and comity between courts and agencies. See

generally McKart v. United States, 395 U.S. 185, 193-95

(1969). The exhaustion requirement protects the FCC’s

interest in the finality of its adjudication and, as in this

case, of settlements arising under its jurisdiction. Requir-

ing applicants for broadcast licenses to file on time also

permits the Commission to take an advance reading of the

various claims and order its business efficiently from the

beginning.

Moreover, as Judge Mikva wrote for this court in New

York State Ophthalmological Society v. Bowen, 854 F.2d

10a

1379, 1387 (D.C. Cir. 1988), the exhaustion doctrine

“promotes judicial efficiency ... by making possible a dis-

position by the agency that will obviate the need for a

judicial decision on [an] issue.” See also McKart, 395 U.S.

at 195; Ticor Title Insurance Co. v. FTC, 814 F.2d 731, 741

(D.C. Cir. 1987) (opinion of Edwards, J.). That principle

is especially relevant here. If the applicant petitioners had

filed timely applications, winning the licenses (their ulti-

mate objective, assuming they would have spurned offers

to join the settlement agreement) would have been only

conditionally dependent on winning the legal dispute

underlying this lawsuit (the alien ownership issue). They

could have won the licenses without winning that dispute

and, moreover, could have failed to qualify for those

licenses without losing it. Either way, their timely partici-

pation at the administrative level could have mooted the

issues fueling this litigation.

First, if HBS or the Partnership had timely pursued the

proper administrative course, one of them might have pre-

vailed in a comparative hearing and obtained the licenses

without prevailing on the alien ownership issue (or, if

even relevant under this scenario, the Jefferson Radio

issue). Even if the FCC had ruled conclusively for Spanish

International on the alien ownership issue, petitioners

obviously could not have sued until after they had given

their last administrative remedy — the comparative hear-

ing — a shot, and we will not exempt them from that

requirement now simply because they ignored the relevant

application deadlines. And though it is difficult for a chal-

lenger to unseat an incumbent in a renewal proceeding,

see generally Central Florida Enterprises, Inc. v. FCC, 683

F.2d 503, 506-08 (D.C. Cir. 1982), “not even the probabil-

ity of an administrative denial of relief will excuse the

effort.” See Spanish International, 385 F.2d at 626.‘

‘The dissent proposes that parties be permitted to sit out

agency proceedings until the prospects of administrative relief

pass a certain threshold (never identified) of financial promise.

Dissent at 5-8. The dissent understandably does not identify a sin-

re ee =

lla

Alternatively, if HBS and the Partnership had filed

timely applications, the FCC might well have determined

— quite apart from the issue of Spanish International’s

qualifications -—— that they were unqualified to operate

broadcast stations. Indeed, the Commission pointed out

in denying the belated applications that admitting peti-

tioners to consideration “would require evidentiary hear-

ings on [their] qualifications and on the standard

comparative issue.” See Joint Appendix 435; see also Jn

re Belo Broadcasting Corp., 68 FCC 2d 1313 (1978); Jn re

Edwin Berstein, 4 FCC Rec. 8420, 8421 (Rev. Bd. 1989)

(citing cases), aff'd 5 FCC Rec. 2843 (FCC 1990), aff'd

mem. sub nom. Lefebure v. FCC, No. 90-1284 (D.C. Cir.

March 8, 1991). Whether an adverse decision on their

basic qualifications would have stripped HBS and the

Partnership of standing to appeal a renewal of Spanish

International’s license is an open question, turning in part

on the seriousness and curability of the shortcomings in

their applications. Compare Orange Park Florida T.V., Inc.

v. FCC, 811 F.2d 664, 670-73 (D.C. Cir. 1987), with

Simmons v. FCC, 145 F.2d 578, 579 (D.C. Cir. 1944). Even

if such a determination had left their formal legal stand-

ing intact, it would have created a record exposing the

weaknesses of their applications (thus filling the informa-

tion vacuum that here prevents a firmly grounded finding

of an Article III injury), and might have discouraged them

from bringing their attack on Spanish International to

court at all. The exhaustion doctrine thus permits us to

avoid second-guessing agency decisions at the behest of

litigants who have never been in a position to benefit from

the decision they seek from us.

This is unlike the frequent case where compliance with

gle case that supports such an extension of the exhaustion doc-

trine’s futility exception. Apparently no court has yet felt it

necessary to dilute the doctrine to that extent, presumably

because no court shares the dissent’s fear that the doctrine’s

application will generate “frivolous” administrative claims. See id.

at 8.

12a

an agency’s procedures would not have caused the agency

to venture down a path that could have mooted the issue

brought to court. In such cases this court has often

relaxed exhaustion requirements to permit consideration

of issues that an agency has had a “fair opportunity” to

address. See, e.g., United Church of Christ v. FCC, 911

F.2d 803, 808-09 (D.C. Cir. 1990); United Church of Christ

v. FCC, 779 F.2d 702, 706-07 (D.C. Cir. 1985); Meredith

Corp. v. FCC, 809 F.2d 863, 870 (D.C. Cir. 1987); Marsh

v. FCC, 436 F.2d 132, 136 (D.C. Cir. 1970); Gerico Invest-

ment Co. v. FCC, 240 F.2d 410, 411-12 (D.C. Cir. 1957);

see also Washington Ass’n for Television & Children v.

FCC, 712 F.2d 677, 680-82 & n.10 (D.C. Cir. 1983); NRDC

v. EPA, 824 F.2d 1146, 1150-51 (D.C. Cir. 1987) (en banc).

That approach makes sense. In such cases, there is little

reason to think that a party’s more thorough participation

would have changed the agency’s mind on those issues or

otherwise precluded a lawsuit. The unsurprising upshot

of our decision here is simply that one who seeks to over-

turn a Commission licensing decision in the capacity of

a disappointed applicant must actually apply, and must

do so in timely fashion.

Jacksonville Broadcasting Corp. v. FCC, 348 F.2d 75, 79-

80 (D.C. Cir. 1965), and MG-TV Broadcasting Co. v. FCC,

408 F.2d 1257, 1265-66 (D.C. Cir. 1968), insofar as they

discussed exhaustion issues at all, did not explicitly

address the precise problem at issue here. To the limited

‘Contrary to the dissent’s suggestion, see Dissent at 4, nothing

we say undermines those of the above cases decided under 47

U.S.C. § 405. In such cases, requiring exhaustion is often point-

less; in ours, it is not. An agency’s prior opportunity to consider

the issues on appeal may be a necessary condition for judicial

review, but it is not therefore a sufficient condition. Dicta that

§ 405 “codiflies}]” the exhaustion doctrine, see Dissent at 4, can

hardly wipe out Spanish International's controlling treatment of

the issue, which, to our knowledge, no case has ever criticized,

much less purported to overrule. This leaves the dissent’s criticism

that Spanish International is “over a generation old”, Dissent at

2, a curious ground for overruling a case.

13a

extent that the principles underlying either opinion con-

flict with our holding here, they are overruled.

Obviously nothing in our decision prevents any person

who feels aggrieved from appealing an order denying him

party status in the administrative proceedings; the panel

decision (incorporated here) disposing of the untimely

applications exemplifies the point. And if the agency’s

denial were in error, its denial of status would necessarily

excuse later non-participation.®

One final note: HBS and the Partnership cannot excuse

their tardiness on the grounds that they did not exist until

after the prescribed filing period. Their principals existed

and could have formed the firms earlier.

The Viewers

Susan Jaramillo and the Coalition claim standing as

viewers to challenge the FCC’s approval of the renewal

and transfer agreement. The Partnership also asserts

viewer standing on the basis of the residence and viewing

habits of its general partner. We dismiss these claims on

prudential standing grounds. See generally Air Courier

Conference of America v. American Postal Workers Union,

AFL-CIO, 111 3. Ct. 913 (1991); Clarke v. Securities Indus-

try Ass'n, 479 U.S. 388 (1987). Though viewers and listen-

ers are among the intended beneficiaries of many

Communications Act provisions, they are not the intended

beneficiaries of § 310(b), see Air Courier Conference of

America, nor are they otherwise “suitable challengers” to

enforce it, see Clarke, 479 U.S. at 399; Hazardous Waste

Treatment Council v. Thomas, 885 F.2d 918, 922-24 (D.C.

Cir. 1989).

That section was designed to protect the entire nation

— to “prevent[ } alien activities against the Government

°Cf. Shurberg Broadcasting of Hartford, Inc. v. FCC, 876 F.2d

902, 905 (D.C. Cir. 1989) (Silberman, J.) (exhaustion not raised;

applicant sought license but was rebuffed by the Commission),

rev'd on other grounds sub nom. Metro Broadcasting, Inc. v. FCC,

110 S. Ct. 2997 (1990).

l4a

during the time of war.” Noe v. FCC, 260 F.2d 739, 741

(D.C. Cir. 1958) (quoting 68 Cong. Rec. 3037 (1927) (re-

marks of Sen. Wheeler)). Committee hearings on the mat-

ter focused largely on keeping the airwaves available for

military use in time of war, see Hearings on 8.2910 Before

the Senate Committee on Interstate Commerce, 73d Cong.

2d Sess. 165-72 (March 15, 1934); see also S. Rep. No.

781, 73d Cong. 2d Sess. 7 (1934), and only secondarily on

the hazards of alien propaganda. Moreover, even if propa-

ganda were a main concern, viewers seem an odd group

to lead the enforcement, as genuine victims would by defi-

nition fail to notice the insidious effects. The viewers can

only be suing as guardians of the national interest, but

“[s]uch a generalized interest ... is too abstract to consti-

tute a ‘case or controversy’ appropriate for judicial

resolution.” Schlesinger v. Reservists Comm. to Stop the

War, 418 U.S. 208, 227 (1974).

Nor can viewers assert standing as intended beneficia-

ries of the Jefferson Radio doctrine, for it is entirely

instrumental, aimed (in this context) only at enhancing

the deterrent effect of whatever substantive provision sup-

ports the attack on the incumbent licensee, here

§ 310(b)(3). See Stereo Broadcasters, Inc. v. FCC, 652 F.2d

1026, 1027 (D.C. Cir. 1981). Because petitioners cannot

sue to enforce §310(b), they cannot sue to enforce a

means of enforcing § 310(b).

zs * 8

We affirm the FCC order of June 5, 1987. We adhere

to the panel opinion as it relates to petitioner TVL’s claim

and to the FCC’s decision to reject petitioners’ applications

as untimely. We vacate the panel opinion as it relates to

the standing of petitioners HBS and the Partnership and

to the merits of their Jefferson Radio claim, and dismiss

for want of exhaustion the claims that each rests on its

status as a frustrated applicant. Finally, we dismiss for

want of standing the claims of petitioners Colaition for

Hispanic Broadcasting and Susan Jaramillo and the in-

+200

15a

dependent claim of the Partnership in its role of viewer.

So ordered.

16a

Mikva, Chief Judge, dissenting: Running headlong from

the questions briefed and argued before us, my colleagues

seek refuge in a theory as novel as it is questionable.

Unsupported by precedent, undeveloped by the court, and

unresponsive to the facts of this case, the stepchild of

exhaustion theory announced today has an inauspicious

birth. I doubt that this poor relation will thrive; therefore,

I take issue with the majority primarily because particular

parties have wrongly been denied their day in court. But

recognizing the possibility that today’s holding may be viv-

ified by other judges on another day, I also write to

express my view that it finds no precedent in the wholly

sensible doctrine of administrative exhaustion and is, in

fact, at odds with the goals underlying that requirement.

Accordingly, I dissent.

We granted en banc review in this case to consider a

single question: Whether petitioners have standing to

challenge decisions by the Federal Communications Com-

mission (the “FCC” or “Commission”) allowing assign-

ment of certain televisicn station licenses to Hallmark

Cards, Inc. (“Hallmark”). A technical and fact-specific

issue to be sure, but one that this court deemed at the

time to be of “exceptional importance.” Fep. R. App. P.

35(a). See Appellee’s Petition for Rehearing or Suggestion

for Rehearing En Banc at 2 (filed Feb. 23, 1990) (seeking

review of standing issue on grounds of importance).

Having heard the Commission’s position on the stand-

ing issues of this case, | sympathize with the court’s

impulse to rest its holding on other grounds. Standing to

appeal administrative decisions depends on a complex mix

of statutory and constitutional conundrums, and is not

simple to explicate. If, therefore, petitioners’ claims had

been totally meritless, this court might well have dis-

missed them without reaching the relatively difficult

standing questions. See Coker v. Sullivan, 902 F.2d 84, 88

(D.C. Cir. 1990); Adams v. Vance, 570 F.2d 950, 954 n.7

17a

(D.C. Cir. 1978); Chinese Am. Civic Council v. Attorney

Gen., 566 F.2d 321, 325 (D.C. Cir. 1977). But I can see no

justification for the majority’s resort to grounds so

unlikely that no party ever thought to brief or argue them,

and so arcane that the court can find just one inapposite

case (over a generation old) to cite as direct precedent.

See Majority Opinion at 8-9 [hereinafter “Maj. Op.”]} (dis-

cussing Spanish Int’l Broadcasting Co. v. FCC, 385 F.2d

615 (D.C. Cir. 1967)).

* If it is dissatisfied with the parties’ presentations to this

court, the majority could—and should—have ordered sup-

plemental briefing so that its judgment would be an

informed one. If it is merely intent on avoiding the stand-

ing question upon which rehearing en banc was granted,

the majority would have been well advised to dismiss this

en banc petition as improvidently granted. But the major-

ity chooses a different course, to which I now turn.

II.

The court suggests that its approach will protect the

finality of FCC proceedings and “promotie] judicial

efficiency,” thereby furthering purposes traditionally asso-

ciated with the exhaustion doctrine. Maj. Op. at 9-10. But

these reasons can be invoked to justify any refusal to

review agency action; whenever courts find challenges to

administrative decisions nonjusticiable, they enhance the

finality of agency determinations and lighten the judicia-

ry’s load. Accordingly, the court should adhere to its prac-

tice of asking whether dismissal of a case on exhaustion

grounds would further “the primary purpose of the

exhaustion doctrine”: preventing premature interruption

of the administrative process. Randolph-Sheppard Vendors

of Am. v. Weinberger, 795 F.2d 90, 104 (D.C. Cir. 1986).

See Atlantic Richfield Co. v. Department of Energy, 769

F.2d 771, 781 (D.C. Cir. 1984) (noting that avoidance of

premature interruption is the “primary objective of the

exhaustion doctrine,” and stating that “[wjhere ... the

goals of this requirement cannot possibly be achieved,

18a

there obviously is no need for exhaustion”); Athlone

Industries, Inc. v. Consumer Prod. Safety Comm'n, 707

F.2d 1485, 1488 (D.C. Cir. 1983) (“The exhaustion doc-

trine was designed primarily to prevent premature inter-

ruption of the administrative process.”); see also

Committee for GI Rights v. Callaway, 518 F.2d 466, 474

(D.C. Cir. 1975) (“[W)hen the reasons supporting the [ex-

haustion] doctrine are found inapplicable, the doctrine

should not be blindly applied.”).

The majority’s decision to deny judicial review will not

prevent “premature” interference with FCC proceedings

for the simple reason that the petitioners raised each

argument presented to this court before the Commission,

and the Commission conclusively rejected every one. See

Spanish Int’l Communications Corp., 2 FCC Red 3336

(1987) (rejecting competing applications and approving

settlement agreement); Spanish Int’l Communications

Corp., 2 FCC Red 3962 (Mass Media Bureau 1987) (ap-

proving assignment of television licenses), aff'd, 3 FCC

Rcd 4319 (1988). This court has before it final administra-

tive decisions, based on a record developed to the agency’s

satisfaction, and reflecting the Commission’s unhampered

exercise of discretion and application of expertise. See

McKart v. United States, 395 U.S. 185, 194 (1969). Apply-

ing the exhaustion doctrine to these facts stretches its

underlying rationales beyond the breaking point.

My conviction that no prudential exhaustion doctrine

bars assertion of jurisdiction over this petition for review

finds unequivocal support in our cases interpreting the

only exhaustion requirement that Congress saw fit to

impose in the Communications Act. See 47 U.S.C. § 405

(1988). Section 405 bars judicial review of Commission

actions where:

the party seeking such review (1) was not a party to

the proceedings resulting in such order, decision,

report, or action, or (2) relies on questions of fact or

law upon which the Commission, or designated

authority within the Commission, has been afforded

no opportunity to pass.

19a

Id. The majority concedes that section 405, as construed

in our cases, does not bar review of petitioners’ claims.

See Maj. Op. at 8 n.2. Yet it fails to mention that this

court has repeatedly held that section 405 “codif[ies] the

judicially-created doctrine of exhaustion of administrative

remedies.” Washington Ass'n for Television & Children v.

FCC, 712 F.2d 677, 681 (D.C. Cir. 1983)). See Office of

Communication of United Church of Christ v. FCC, 911

F.2d 803, 808 (D.C. Cir. 1990); Northwestern Ind. Tel. Co.

v. FCC, 872 F.2d 465, 470 (D.C. Cir. 1989), cert. denied,

110 S. Ct. 757 (1990); Brookings Mun. Tel. Co. v. FCC, 822

F.2d 1153, 1163 (D.C. Cir. 1987); Telecommunications

Research and Action Center v.-FCC, 801 F.2d 501, 513 n.7

(D.C. Cir. 1986), cert. denied, 482 U.S. 919 (1987); Office

of Communication of the United Church of Christ v. FCC,

779 F.2d 702, 706 (D.C. Cir. 1985). Unless it is prepared

to overrule this long line of authority, I am baffled how

the majority can dismiss this case for failure to exhaust

administrative remedies. If section 405 does not bar

review, then the prudential exhaustion requirements that

are incorporated within section 405 cannot provide a basis

for dismissal of petitioners’ claims.

Spanish Int’l Broadcasting Co. v. FCC, the 1967 decision

so heavily relied upon by the majority, is not to the con-

trary. In that case, the Commission had summarily

rejected petitions for administrative review and rehearing

without addressing the merits of appellant’s objections.

See 385 F.2d at 619. (While the FCC did address the mer-

its of administrative petitions submitted by Spanish Inter-

national Broadcasting Company during 1964, it

summarily rejected the appellant’s relevant petitions,

which challenged FCC decisions issued in November 1965

and March 1966. Spanish International makes no sugges-

tion that the arguments presented in these distinct peti-

tions overlapped. See 385 F.2d at 618-19.) Our cases

interpreting section 405 establish that invocation of the

exhaustion doctrine is warranted under circumstances like

those in Spanish International, where the arguments of a

non-party were not considered by the Commission. See

20a

United Church of Christ, 779 F.2d at 706-07; Washington

Ass'n for Television & Children, 712 F.2d at 682. In this

case, though, the Commission addressed petitioners’ argu-

ments in the challenged decisions, making application of

the exhaustion doctrine inappropriate. Cf. United Church

of Christ, 911 F.2d at 809 (“Because the Commission ‘in

fact considered the issue,’ UCC’s challenge ... may there-

fore be reviewed.” (citation omitted)).

It is of course true that this case might never have

come to court if the petitioners had acted differently years

ago, long before the legal questions presented by this

appeal arose. See Maj. Op. at 10-11. But I cannot agree

with the majority that wishful speculation about what

might have been justifies denying access to this court. Nor

does the exhaustion requirement’s futility exception,

invoked by the majority, have any relevance to this case,

see Maj. Op. at 10 & n.4; because the exhaustion doctrine

cannot reasonably be applied to the facts before us, reli-

ance on cases interpreting one of its exceptions is insuffi-

cient to justify the majority’s holding.

I find the court’s approach particularly disquieting

because Hispanic Broadcasting Limited Partnership

(“HBLP”) and Hispanic Broadcasting Systems, Inc.

(“HBS”) acted just as wise investors would—they spent

time and money actively pursuing the licenses only at the

point when a realistic chance of obtaining them arose.

That a court sensitive to economic theory in other con-

texts should confuse rational economic behavior with a

lack of genuine interest in obtaining the licenses only

points up the majority’s fervor to be done with this case.

Cf. Tennessee Gas Pipeline Co. v. FERC, No. 89-1785, slip

op. at 8-10 (D.C. Cir. March 5, 1991) (discussing “Efficient

Market Hypothesis”); United States v. Western Elec. Co.,

900 F.2d 283, 297-98 (D.C. Cir.) (per curiam) (noting judi-

cial and academic views on interrelationship of antitrust

laws and market behavior), cert. denied, 111 S. Ct. 283

(1990).

It is critical to remember that the television licenses

which HBLP and HBS seek were not vacant during the

a =

2la

years when, in the majority's view, HBLP and HBS

should have pursued them. Rather, they were held by

Spanish International Communications Corporation and

Bahia de San _ Francisco (collectively, “Spanish

International”), which were entitled under FCC rules to

an all-but-insurmountable “renewal expectancy.” See

Central Florida Enterprises, Inc. v. FCC, 683 F.2d 503

(D.C. Cir. 1982) (approving renewal expectancy policy),

cert. denied, 460 U.S. 1084 (1983). The majority admits

(with some understatement) that it is “difficult” to unseat

an incumbent license-holder, Maj. Op. at 10, while the

FCC stated during oral argument that ‘ts policy is “not

to encourage” the filing of competing applications for

licenses held by qualified licensees.

The prospects for those seeking Spanish International’s

licenses improved dramatically when the Commission,

finding a “substantial question” whether Spanish Interna-

tional was under alien control, ordered that a hearing be

held on the incumbent’s qualifications as a license-holder.

See Hearing Designation Order, 48 Fed. Reg. 28549 (1983).

But the majority fails to mention that a long-standing

Commission practice known as the “Jefferson Radio

policy,” as then in force, precluded transfer of Spanish

International’s licenses pending resolution of the qualifi-

cations issue. See Stereo Broadcasters, Inc. v. FCC, 652

F.2d 1026, 1027 (D.C. Cir. 1981). Under Jefferson Radio,

the very event that gave prospective applicants real hope

of obtaining Spanish International’s licenses—designation

of a qualifications hearing—prevented HBLP and HBS

from competing for those licenses. Their only option was

to wait: If the Commission determined that Spanish Inter-

national was qualified, it would again be foolish to chal-

lenge that incumbency; if unqualified, Spanish

International would lose the licenses and HBS and HBLP

could then compete on an equal footing with other appli-

cants.

These reasonable expectations were upset, however, by

an unforeseeable change in the well-established Jefferson

Radio policy. The Commission decided to ratify the settle-

careers abieieretrieniniasiaaianiaciamnininiiatiaaniiiiiiiineiiiaimaaait

22a

ment agreement under which Spanish International would

transfer its licenses to Hallmark, notwithstanding

Jefferson Radio. See Spanish Int'l Communications Corp.,

2 FCC Red 3962. In my view, approval of the settlement

agreement and related license assignment constituted an

impermissible departure from the Jefferson Radio policy.

See Coalition for the Preservation of Hispanic Broadcasting

v. FCC, 893 F.2d 1349, 1359-62 (D.C. Cir. 1990) (per

Mikva, J.). For present purposes, though, this court need

only recognize that HBLP and HBS, relying on prior

statements of that policy, had no reason to anticipate

Commission approval of a license transfer during the pen-

dency of proceedings on the qualifications issue. Surprised

in this way, HBLP and HBS did the only thing they

could, opposing the settlement at all levels while filing

applications for the disputed licenses. See Petition of HBS

to Deny Applications for Transfer of Control, filed Sept.

26, 1986, reproduced in Joint Appendix at 150 [hereinafter

“J.A.”], denied, Spanish Int’l Communications Corp., Mass

Media Bureau No. 3713 (released June 23, 1987),

reproduced in J.A. at 443; Petition of HBS for Acceptance

of Applications, filed Sept. 26, 1986, denied, 2 FCC Rcd-

3336; Petition of HBLP [then, Hispanic Broadcasting,

Ltd.] for Reconsideration, filed Nov. 10, 1986, reproduced

in J.A. at 345, dismissed, Spanish Int'l Communications

Corp., 1 FCC Red 844 (Review Bd. 1986); Petition of

HBLP to Intervene or in the Alternative for a Waiver of

the Rules, filed Nov. 10, 1986, reproduced in J.A. at 372,

dismissed, 1 FCC Red 844, dismissed as moot, 2 FCC Red

3336; Petition of HBLP for Acceptance of Applications,

filed Dec. 9, 1986, reproduced in J.A. at 405, denied, 2 FCC

Red 3336; Application of HBLP for Review, filed Dec. 29,

1986, reproduced in J.A. at 505, denied, 3 FCC Red 4319.

Petitioners have no way of curing the shortcomings

that the majority sees in their past efforts; that is just

another aspect of the unfairness visited specifically upon

them. More generally, though, the majority does not indi-

cate what those who would challenge FCC licensing deci-

sions must do to satisfy its retroactive “exhaustion”

ee ————

23a

requirement. Must they seek every license up for renewal

on the off chance that the incumbent licensee will be

found unqualified, and that the license will be economi-

cally attractive at that hypothetical time? What are the

implications of such a result for the Commission’s estab-

lished renewal procedures? Must prospective license-

holders have applied for the license in question during the

most recent filing window, or is any past filing sufficient?

Must the FCC have recognized them as qualified to hold

a broadcast license? How can they show their qualifica-

tions absent a comparative licensing proceeding? One can

only speculate. It is clear, though, that the majority effec-

tively requires parties with an interest in competing for

vacant licenses to safeguard that interest by filing frivo-

lous applications challenging incumbent license-holders.

If the majority thinks such waste of applicants’

resources a trade-off for heightened administrative effi-

ciency, it is misguided; today’s decision may well increase

the number of applications filed for licenses held by quali-

fied incumbents, even though such applications are disfa-

vored by the Commission and will have no real chance of

success. Thus, invocation of exhaustion principles here

will hinder the very administrative efficiency those princi-

ples were designed to advance. | doubt that this result is

intended by the majority, but I am not surprised that non-

sensical results will flow from a decision driven more by

evasion than logic.

If, on the other hand, the court is motivated by a naked

instinct to keep those who would challenge agency deci-

sions out of court, my objection is more elemental. The

record is clear that these petitioners acted reasonably in

light of administrative precedents and the decisions of

this court. Punishing sensible economic and legal deci-

sions by withholding judicial review from firms that make

them is, in my view, an unacceptable exercise of judicial

discretion.

III.

I do not overlook the majority’s effort to narrow its

cpinion to the context of this case. See Maj. Op. at 12.

24a

But I cannot join with my colleagues on that basis alone.

Rather, I believe today’s decision unwise, unsound, and

unfair. I dissent.

25a

APPENDIX B

Huited States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 11, 1989 Decided January 12, 1990

Nos. 87-1285, et al.

COALITION FOR THE PRESERVATION OF

HISPANIC BROADCASTING, ET AL., PETTTIONERS

Vv.

FEDERAL COMMUNICATIONS COMMISSION,

RESPONDENT

UNIVISION HOLDINGS, INC., ET AL.,

INTERVENORS

Petition for Review of Orders of the

Federal Communications Commission

Martin E. Firestone, for Hispanic Broadcasting Sys-

tems, Inc., with whom Bruce A. Eisen, for Coalition for

the Preservation of Hispanic Broadcasting, and Richard

S. Rodin, for Susan M. Jaramillo, were on the joint brief

for petitioners in Nos. 87-1285, 87-1287, 88-1564, and 88-

1596.

26a

Morton L. Berfield, with whom Lewis I. Cohen and Ray

W. Boyce were on the brief for petitioner, Hispanic Broad-

casting Limited Partnership, in No. 87-1299.

James P. Riley, with whom Robert A. DePont was on the

brief for petitioner, TVL Corporation, in No. 88-1588.

Sue Ann Preskill, Counsel for the FCC, with whom

Diane S. Killory, General Counsel, Daniel M. Armstrong,

Associate General Counsel, and S. Lee Martin, Counsel,

FCC, were on the brief for respondent in all cases.

Richard E. Wiley, with whom John C. Quale and Diane

Z. Goldman were on the brief for intervenors, Univision

Holdings, Inc., et al., in Nos. 87-1285, 87-1287, 87-1299,

88-1564, 88-1588, and 88-1596. James R. Bayles also

entered an appearance for Univision Holdings, Inc., et al.

Linda K. Smith and David H. Solomon entered appear-

ances for intervenor, Station Representatives Association,

Inc. in Nos. 87-1285, 87-1287, 87-1299.

L. Andrew Tollin and Leon T. Knauer entered appear-

ances for intervenor, Seven Hills Television Company, in

Nos. 87-1285, 87-1287, 87-1299, and 88-1564.

N. Frank Wiggins entered an appearance for intervenor,

Fouce Amusement Enterprise, Inc., in Nos. 87-1285, 87-

1287, 87-1299.

John L. Tierney, Richard F. Swift and Ann Bavender

entered appearances for intervenor, Bahia de San Fran-

cisco Television Co., in Nos. 87-1287 and 87-1299.

Before: Mikva, Epwarps and WILLIAMS, Circuit Judges.

Opinion for the Court filed by Circuit Judge Mixva.

Opinion filed by Circuit Judge WittiaMs, dissenting in

part and concurring in part of the judgment.

Mixva, Circuit Judge: In these consolidated cases, three

companies comprised of Hispanic investors, an association

claiming concern with preserving Hispanic broadcasting,

and an Hispanic individual petition this court for judicial

review of two orders of the Federal Communications Com-

27a

mission (“FCC” or “Commission”). The first order

approved a settlement agreement providing for the grant

of license renewal applications for Spanish International

Communications Corporation (““SICC”) and Bahia De San

Francisco (“Bahia”) subject to the prompt transfer of the

licenses to a holding company controlled by Hallmark

Cards Inc. (“Hallmark”). The first order also denied peti-

tions for acceptance of competing applications for the

SICC and Bahia stations by two of the companies bringing

petitions in this case. See Spanish International Commu-

nications Corporation, 2 FCC Red. 3336 (1987). The sec-

ond order granted applications to transfer control of the

licenses to Hallmark and denied applications which sought

to block the transfer. See Spanish International Commu-

nications Corporation, 3 FCC Red 4319 (1988).

The settlement agreement was approved after an ALJ

determined that the stations in question were subject to

the de facto control of an alien in violation of §310(b)(3)

of the Communications Act of 1934, 47 U.S.C. § 310(b)(3)

(1982). The principal question presented is whether the

Commission’s approval of a full market value sale to Hall-

mark prior to the final resolution of the renewal proceed-

ings contravenes the Commission’s policy forbidding

assignment at full value of broadcast stations by a

licensee, whose qualifications are under investigation,

until the Commission has determined that the licensee

has not forfeited its broadcast authorization. See Jefferson

Radio Company v. FCC, 340 F.2d 781, 783 (D.C. Cir. 1964).

If indeed the Commission has changed its Jefferson Radio

policy, we must determine whether it has explained ade-

quately its departure from existing policy. We affirm the

Commission’s rulings declining to accept the competing

applications and declining to review the actions of another

federal court in administering a bidding process that led

to the selection of Hallmark as the transferee. However,

we hold: (1) that the three companies, as prospective com-

petitors for the licenses, have standing to challenge the

Commission’s approval of the settlement and transfer;

and (2) that the Commission departed from the policy

28a

upheld in Jefferson Radio. Because this case does not fall

within any of the established exceptions to Jefferson

Radio, we remand this case to the Commission to com-

plete the renewal proceedings that were pending at the

time the transfer was approved or to enunciate and

explain a new policy that would modify Jefferson Radio.

A. Statutory Background

Section 310(k, of the Communications Act precludes

the Commission from granting a broadcast license to for-

eign nationals or their representatives or to foreign corpo-

rations. 47 U.S.C. §310(b)(1), (2). In addition, under the

provision at issue in this case, “[n]o broadcast ... license

shall be granted to or held by [a United States corpora-

tion] of which any officer or director is an alien or of

which more than one-fifth of the capital stock is owned

... or voted by aliens or their representatives.” 47 U.S.C.

§310(b)(3). Congress’ motivation in passing this restric-

tion was based primarily “ ‘upon the idea of preventing

alien activities against the Government during the time

of war.’” Noe v. FCC, 260 F.2d 739, 741 (D.C. Cir.), cert.

denied, 395 U.S. 924 (1959) (quoting 68 Cong. Rec. 3037

(1927)).

B. Procedural History

1. Proceeding before the ALJ

SICC and Bahia (collectively, “SICC”) were the licens-

ees of six television stations broadcasting in the Spanish

language. A seventh Spanish language station was

licensed to the Seven Hills Television Company, which

was controlled by many but not all of the principals who

controlled SICC. SICC’s corporate predecessors began

acquiring broadcast stations in 1961. Prior to initiating in

1983 the renewal hearing at issue in this case, the Com-

mission, with knowledge of the relationships giving rise

to the hearing, unconditionally granted various applica-

tions by SICC to acquire stations and repeatedly renewed

29a

SICC’s broadcast licenses. After a staff investigation pre-

cipitated by an outside complaint, the Commission desig-

nated for hearing the renewal applications for each SICC

station. The principal issue was whether the corporate

licensees of the stations were controlled by aliens or their

representatives in violation of Section 310(b) of the Act.

After a full evidentiary hearing, the ALJ found that SICC

had violated §310(b)(3) because Reynald V. Anselmo,

President and a director of SICC, had acted as the repre-

sentative of the Azcarraga family, Mexican citizens and

owners of a Mexican media empire. Spanish International

Communications Corporation, FCC 86D-1, Initial Decision

at 1176 (January 8, 1986). While the Azcarragas’ stock

holdings in SICC did not exceed the 20% statutory limita-

tion, the ALJ concluded that the family’s financial and

personal relationships with American principals of SICC,

particularly Anselmo, gave the family a degree of influ-

ence and control over the SICC stations which “greatly

exceeded that permitted by Section 310(b).”

According to the ALJ this influence manifested itself at

several levels. The composition and ownership of the

board of directors of licensee corporations were affected

by the Azcarragas’ financing of stock purchases for

selected principals. For example, Anselmo, a former

employee in the Azcarragas’ media empire, purchased

interests in SICC stations with Azcarraga financing. As

president and a director of all of the licensee companies,

Anselmo personally selected all station managers. In addi-

tion, a major portion of programs broadcast by SICC sta-

tions originated from Televisa, a Mexican production

company in which the Azcarragas had a controlling inter-

est. The ALJ regarded Anselmo as the chief conduit of

the Azcarragas’ influence and as a “representative of

aliens” within §310(b)(3). These facts, coupled with the

“historic financial and personal ties between Licensees

and the Azcarraga family,” resulted in “an abnormal rela-

tionship ... whereby the [SICC] stations were dependent

on foreign subsidiaries” for financing, programming and

management. Thus the ALJ denied the renewal applica-

30a

tions. He invited the parties, however, to seek “a less

drastic remedial solution, such as a _ corporate

restructuring” by raising the matter in an application for

review of his decision.

2. The Settlement Agreement

The licensees appealed the ALJ’s decision to the Com-

mission’s Review Board and several third parties filed

exceptions to the ALJ decision. The exceptions chal-

lenged: (1) the ALJ’s refusal to consider whether SICC

abused the Commission’s processes by filing lawsuits

against Spanish Radio Broadcasters of America (“SRBA”)

(one of the excepting parties) and other potential wit-

nesses in the proceeding against SICC; and (2) the ALJ’s

refusal to consider whether there was misconduct or mis-

representation sufficient to violate the Commission’s pol-

icy on character qualifications.

While the exceptions were pending before the Board,

SICC submitted a proposed settlement agreement

whereby the SICC licenses would be renewed for the lim-

ited purpose of promptly transferring the stations to an

unrelated, qualified buyer. SICC proposed to sell the sta-

tions to Hallmark, an American corporation having no

ties to the Azcarragas. The selection of Hallmark arose

from the settlement of an unrelated, ongoing stockhold-

ers’ derivative suit brought against SICC, Fouce Amuse-

ment Enterprises, Inc. vu. Spanish International

Communications Corp., No. CV 76-3451-MRP (C.D. Cal.).

After SICC agreed to settle the stockholders’ suit by sell-

ing the stations, the federal district court for the Central

District of California supervised bidding for the stations

and ultimately accepted Hallmark’s bid.

The Commission’s Review Board approved the pro-

posed settlement without ruling on the merits of the

exceptions. On review, the Commission agreed with the

Review Board that the proposed assignment of SICC

licenses was in the public interest notwithstanding its

general policy under Jefferson Radio. The Commission

reasoned that under the circumstances of the case, the

3la

proposed sale would “not unacceptably diminish” the

deterrence of licensee wrongdoing—the rationale under-

girding Jefferson Radio. Spanish International Communica-

tions Corporation, 2 FCC Red. 3336, 3338-39 (1987). The

Commission deemed the settlement in the public interest

because: (1) the “technical” nature of the violations found

by the ALJ suggested that SICC had no intention of vio-

lating the statute or deceiving the Commission; and (2).

by providing for the removal of SICC as licensees, the set-

tlement constituted an effective means to implement pro-

spectively the statutory policy against alien control.

Noting that SICC and its predecessor had been allowed

to broadcast for the past twenty-five years and citing the

“unique contributions” that these stations made to broad-

casting in this period, the Commission concluded that this

was an appropriate case in which SICC should be removed

from broadcasting, but without the harshness attending

an outright denial of its renewal applications. The Com-

mission also found that the settlement agreement served

the public interest by simplifying a complex case, saving

administrative costs, removing a “cloud” of uncertainty

that can adversely affect a station’s performance, and

facilitating the resolution of the Fouce stockholder’s deriv-

ative suit and the antitrust litigation directed at SRBA.

Prior to this decision, SRBA withdrew its exceptions to

the ALJ decision and filed a petition in support of the

SICC settlement agreement, noting that SRBA and SICC

were “executing an agreement that is intended to result

in settlement as among themselves of the Antitrust

Litigation.” At no stage of these proceedings did the Com-

mission rule on the merits of the exceptions.

Subsequently, the FCC considered Hallmark’s qualifica-

tions and approved the applications to transfer the sta-

tions to Hallmark.

3. Challenges Below by Petitioners

The Hispanic Broadcasting Limited Partnership

(“HBLP”) filed a petition for review of the Review

Board’s approval of the settlement agreement along with

32a

an application for acceptance of its competing license

applications. The Commission denied both requests.

Regarding the competing applications, the Commission

concluded that because HBLP failed to file in accordance

with Commission time limits the applications properly

were rejected. The Commission declined to waive its cut-

off rule “absent a compelling justification” which it did

not find.

Hispanic Broadcasting Systems, Inc. (“HBS”) also peti-

tioned below for acceptance of competing applications.

Although the Commission denied this petition, HBS does

not challenge that ruling t¥fore this court. The Coalition

for the Preservation of Hispanic Broadcasting (“the

Coalition”), HBS, and Susan M. Jaramillo submitted a

consolidated petition for review in this case. Each party

petitioned below for denial of the application to transfer

SICC stations to Hallmark. These petitions also were

denied.

TVL Corporation, comprised of Hispanic investors and

one of the two finalists in the shareholder derivative set-

tiement process, petitioned the Review Board to deny

applications to transfer SICC’s licenses to Hallmark. In

its petition TVL argued that the transfers should be

denied without prejudice and that an order should be

issued by the Commission directing SICC to request the

Ninth Circuit, which had jurisdiction over the SICC stock-

holders derivative suit, to remand that litigation with

instructions: (1) to vacate its selection of Hallmark as the

prevailing bidder; and (2) to consider the final bids of

Hallmark and TVL as of July 23, 1986.

TVL argued that the bidding process discriminated

against minority-controlled entities seeking to purchase

SICC. By requiring bidders to sign a confidentiality agree-

ment precluding signers from seeking to acquire SICC by

means other than the market value bidding process, TVL

asserts that minority parties contemplating a “distress

sale” were discriminated against. Pursuant to the

Jefferson Radio policy of prohibiting a licensee facing

eee

33a

qualification issues in a renewal hearing from profiting on

the sale of broadcast interests, TVL believed it was highly

unlikely that a full market sale would be allowed. When

TVL learned that the Commission’s Mass Media Bureau

had acceded to the “full value” sale, TVL quickly gathered

the financing for a full value bid, timely filed its bid, and

was selected as a second round bidder. On Julv 18, 1986

the TVL and Hallmark bids were submitted to the district

court as the two finalists. Evidence of the final TVL

financing commitments was not yet available when the

bids were piaced before the court, although TVL had

advised SICC that it would be available as it ultimately

was on July 23, 1986. The court entered an order condi-

tionally approving the Hallmark bid on July 18, 1986.

TVL then filed a motion to intervene in the shareholder

suit and Hallmark moved for an affirmance of the order

entered on July 18. The district court rejected TVL’s

motion to intervene and approved Hallmark on several

grounds, one of which was that Hallmark had unequivocal

financial backing. The Ninth Circuit affirmed the denial

of the motion to intervene without comment on the merits

of TVL’s claims. Fouce Amusement Enterprises, Inc. v.

Spanish International Communications Corp., 819 F.2d

1145 (9th Cir.) (table), cert. denied sub nom. TVL Corp.

v. Spanish International Communications Corp., 108 S. Ct.

754 (1988).

TVL argued that the settlement agreement between

SICC and the Bureau lacked appropriate measures to pro-

tect adequately potential minority purchasers who had

previously been pursuing the possibility of a “distress

sale” acquisition. The Commission rejected this claim,

reasoning, inter alia, that the relief requested would be

“entirely inappropriate and at variance with the Commis-

sion’s long-standing policy of declining to adjudicate mat-

ters properly pending in another forum.” Spanish

International Communications Corporation, 3 FCC Red

4319, 4320 (1988).

34a

A. Standing

The Commission concedes that petitioner HBLP has

standing to challenge the Commission’s dismissal of its

competing applications. The Commission argues, however,

that if this court upholds the dismissal of the competing

applications, then HBLP does not have standing to chal-

lenge the settlement agreement or the transfer of SICC

stations to Hallmark. In addition, the Commission argues

that all other petitioners lack standing to bring their

respective claims. We find that the three companies have

standing; therefore we need not resolve the question of

whether the Coalition or Ms. Jaramillo can claim standing

as viewers.

The law of standing is based on a set of constitutional

and prudential requirements. To establish standing under

article III of the Constitution a litigant must plead an

injury in fact fairly traceable to the conduct complained

of and likely to be redressed by the relief requested. Allen

v. Wright, 468 U.S. 737, 751 (1984). Under statutory and

prudential standing requirements, standing to challenge

an order of the Commission is conferred by § 151 of the

Communications Act, which allows appeal to this court by

“any ... person who is aggrieved or whose interests are

adversely affected” by such order. 47 U.S.C. §402 (b)(6)

(1982).

1. Standing as Viewers

In their consolidated brief, the Coalition, HBS and

Susan M. Jaramillo (collectively, “Consolidated

Petitioners”) claim standing as viewers under Office of

“ommunication of the United Church of Christ v. FCC,

which allows responsible representatives of the broadcast

audience to assist the Commission in vindicating the pub-

lic interest. 359 F.2d 994, 1004-05 (D.C. Cir. 1966). Con-

solidated Petitioners suggest that the settlement

threatens the public’s interest in the continuation of

Spanish language programming. Their claim of standing

35a

is problematic because there is no evidence to suggest that

the anti-alien control provisions of the Act were imple-

mented to advance the public’s interest in programming

content. We need not resolve this issue, however, because

we find that HBLP, HBS, and TVL have standing as pro-

spective competitors to challenge the Commission’s

approval of the settlement agreement. Since the relief

sought by those petitioners encompasses the relief sought

by the other Consolidated Petitioners, it is of no moment

whether “viewer” standing exists in this case.

2. Standing as Prospective Competitors

As a threshold matter we must address the nature of

the action brought by petitioner TVL. TVL does not chal-

lenge the settlement agreement per se but the process

which led to the selection of Hallmark as the transferee.

It asks us to reverse the Commission’s approval of the

settlement agreement on the grounds that the Commis-

sion failed to address its claim that the bidding process

was discriminatory. This cause of action is not reviewable

in this court, however, because it essentially seeks a

review of the judicial proceedings which occurred in the

Ninth Circuit. Neither the Commission nor this court can

engage in such review.

The Commission argues that, assuming we uphold its

denial of the competing applications, none of the petition-

ers have standing as prospective competitors for the SICC

licenses. It conceded at oral argument that if a reversal

of its orders would result in vacant licenses, companies

eligible to file applications for those licenses would have

standing to challenge the Commission’s order. See, e.g.,

MG-TV Broadcasting v. FCC, 408 F.2d 1257, 1264 n.24

(D.C. Cir. 1968) (prospective applicant had standing to

challenge assignment of a construction permit where

denial of the application would have left the station

vacant and available for other applications). The Commis-

sion argued, however, that MG-T'’V is limited to cases

where the license could become available directly as a

result of the court’s order. We reject this distinction.

36a

While MG-T’V involved a substantive challenge which,

if accepted, immediately would have rendered the relevant

license open to competition, the rationale for prospective

competitor standing does not require that we restrict it

to such circumstances. This court recently allowed a

would-be competitor for a license to challenge an FCC

order granting the incumbent licensee permission to sell

its broadcast properties to a minority-controlled enter-

prise pursuant to the Commission’s distress sale policy.

See Shurberg Broadcasting of Hartford, Inc. v. FCC, 876

F.2d 902 (D.C. Cir. 1989). There, similar to this case, the

Commission’s order sanctioned a sale that would have

avoided a renewal hearing. Yet the Shurberg court’s ruling

that the distress sale policy was unconstitutional did not

create a vacant frequency but reverted the incumbent

licensee to its prior designated-for-hearing status. Appar-

ently the FCC did not contest Shurberg’s standing in that

case. See id. at 906-07. While the Shurberg court did not

address the issue of standing explicitly, this result is con-

sistent with the general principle underlying standing for

frustrated competitors. Cf. National Maritime Union of

America v. Commander, Military Sealift Command, 824

F.2d 1228, 1237-38 (D.C. Cir. 1987) (“[I]njury to a bidder’s

right to a fair procurement is obviously an injury both

traceable to the alleged illegality in a procurement and

redressable by any remedy that eliminates the alleged

illegality.”).

By analogy, HBLP and HBS claim an injury to their

right to a fair license award process both traceable to the

Commission’s wrongful conduct in approving the transfer

to Hallmark and redressable by our remedy which elimi-

nates that conduct, i.e., remand for continuance of the

qualification hearing or articulation of a new policy. Simi-

larly, TVL claims a “fair procedure” injury traceable to

the Commission’s approval of the transfer and redress-

able, if we were willing to review the merits, by reopening

the settlement to permit a reopening of the bidding pro-

cess. HBLP, HBS, and TVL have all made unsuccessful

attempts to become the licensee for the stations at issue

37a

in this dispute. While there is no certainty that this

opportunity will be regained upon remand, that possibility

is far from remote. Moreover these parties were entitled

to expect that a proceeding which was insulating the

licenses from competition until its conclusion would not

be truncated by an illegal transfer of the licenses to a

third party. We therefore find a redressable injury, meet-

ing the constitutional requirements for standing to chal-

lenge the Commission’s approval of the settlement and

transfer.

We disagree with the dissent’s suggestion that HBLP

and HBS should not be afforded article III standing

because they were not within “the zone of active

consideration” for the licenses in question. As the dissent

correctly notes, this “active consideration” requirement

has been imposed as a condition for standing to challenge

government contract awards. See National Maritime

Union, 824 F.2d at 1237-38 n. 12. But to export this rea-

soning wholesale to the license renewal context ignores

critical differences between the license renewal and con-

tract bidding processes. In the classic disappointed bidder

case, all potential parties started with a level playing held

whereby each applicant brought its resources to bear in

vying for a “vacant” contract. In contrast, the typical

“frustrated competitor” for an FCC licence has had to vie

with the incumbent licensee (as well as other competitors)

in a process which obviously creates institutional biases

toward the incumbent. It is not an “open” bidding contest

per se. More importantly, once an incumbent’s qualifica-

tions have been designated for hearing, as was the case

here, the incumbent is insulated from competition. For

example, HBLP timely filed a competing application for

SICC’s Miami station license at a time when SICC’s

renewal application for that licence was in hearing on the

issue of alien control. Although we hold below that the

FCC correctly declined to accept this application during

the pendency of the hearing, this fact illustrates the inap-

propriateness of the “active consideration” requirement in

the FCC licensing context. The dissent’s suggestion that

38a

SICC somehow was rendered vulnerable once its qualifica-

tions were challenged, opening the door to free and fair

competition, could not be further from the actual circum-

stances of this case. Once SICC’s qualifications were in

hearing all possibility of competition for the licenses was

precluded until the Commission finally resolved the hear-

ing.

The bidding process administered in the Ninth Circuit

as a remedy for the shareholder derivative suit can hardly

be viewed as an exclusive (or even appropriate) place for

applicants to demonstrate their “standing” in the licens-

ing dispute. It was not an official FCC forum for compet-

ing for the licenses; indeed FCC policy appeared to

prohibit the consummation of any transfer until the con-

clusion of the hearing. The dissent proceeds to argue that

once the FCC decided to truncate the hearing process

with the Hallmark settlement, HBS and HBLP could

have demonstrated the seriousness of their commitment

to obtaining the licenses by at least petitioning to inter-

vene in that proceeding. But this action, too, would not

have enabled these companies to gain the FCC’s “active

consideration” of their own applications.

Such arguments illustrate how the dissent misconstrues

the standing inquiry. Standing does not amount to some

kind of largesse dispensed at the discretion of article III

judges. This circuit has never explicitly imposed a require-

ment that a “frustrated competitor” for an FCC license

demonstrate its prospects for succeeding in the license

award process. In Orange Park Florida T.V., Inc. v. FCC,

on which the dissent heavily relies, this court stated that

“contingencies may arise” which could cause the peti-

tioner to “decide not to reapply” or could “defeat its [re-

newed] application.” 811 F.2d 664, 673 n.18 (D.C. Cir.

1987). The Orange Park court further stated that it could

discern no “ ‘absolute barriers’” to the petitioner’s com-

peting for the license in the future—the outer limit

imposed by this court in determining whether an injury

is redressable by the relief the petitioner seeks. /d.

(quoting Greater Tampa Chamber of Commerce v. Gold-

39a

schmidt, 627 F.2d 258, 264-65 (D.C. Cir. 1980). It was in

this redressability context that the Orange Park court

noted that the petitioner had “devised plans sufficiently

detailed to enable it to compete for the facility.” 811 F.2d

at 673 n.18. While a would-be competitor certainly could

simplify the reviewing court’s standing analysis by provid-

ing such detail, this statement does not constitute a legal

requirement for standing under the law of this circuit.

The dissent also cites Public Citizen v. Lockheed Aircraft

Corp., 565 F.2d 708 (D.C. Cir. 1977), for the proposition

that a would-be competitor lacks standing where it fails

to demonstrate its capacity to compete in the future. In

that case, however, members of a trade association of

machinery dealers sought to challenge a sale by the fed-

eral government of a manufacturing plant to the Lock-

heed Corporation. Because none of the members of the

association, which were in the business of machinery sales

and not defense contracting, had displayed a realistic

intent to purchase an entire plant, the foundation for

standing was deemed too speculative. Jd. at 717-19. In

contrast, the three companies at issue in this case have

actually attempted in the past to bid or compete for the

licenses in question.

Equally insupportable is the dissent’s attempt to rele-

gate this court’s standing ruling in MG-TV Broadcasting

to the status of a “superseded” case. Despite its appear-

ance in a footnote, until the case is overruled or limited,

the MG-TV court’s reasoning on standing has the force

of precedent.

The three companies also satisfy the statutory and pru-

dential requirements for standing. Frustrated license

applicants are parties “aggrieved” within the meaning of

§ 402 (b)(6) of the Communications Act because they have

a “concrete, economic interest that has been perceptibly

damaged by the Commission’s award [of licenses to

another competitor.]” See Orange Park, 811 F.2d at 673.

Having disposed of TVL’s claim, we turn then to the sub-

stance of the complaints made by HBLP and HBS.

40a

B. Competing Applications

Petitioner HBLP presents a threefold argument as to

why its competing applications should have been accepted

by the Commission at the time the SICC settlement

agreement came up for review before the Commission.

HBLP reasons: (1) that its application for SICC’s Miami

facility (WLTV) should have been accepted as a matter

of right without the need for a waiver of the cutoff rule;

(2) that its application for SICC’s San Antonio facility

(KWEX-TV) should have been accepted because, due to

confusion in the Commission’s notices, no valid cut-off

date was established; and (3) that the remaining HBLP

applications should have been accepted pursuant to a

waiver of the cutoff rule because the Commission has not

applied its “compelling justification” policy consistently in

the past. We reject each of these arguments.

1. The Miami Application

HBLP invites this court to address a question left open

in a previous case, Committee for Open Media v. FCC, 543

F.2d 861, 872-73 (D.C. Cir. 1976): whether the Commis-

sion properly can reject an otherwise timely competing

application because of the pendency of a non-comparative

renewal hearing. The “window” was open for filing com-

peting applications in the state of Florida at the time

SICC’s WLTV renewal application was in hearing on the

issue of alien control. But because HBLP’s application

was mutually exclusive with SICC’s, the Commission

barred HBLP from filing its application. HBLP argues

that the Commission’s Ashbacker doctrine favoring com-

parative hearings in broadcast licensing decisions,

Ashbacker Radio Corp. v. FCC, 326 U.S. 327 (1945), com-

pels acceptance of its competing application. The Com-

mission replies that its longstanding policy against

accepting competing applications when qualification

issues are under active prosecution is a necessary means

for achieving administrative finality. In Shurberg, Judge

Silberman spoke with approval of this policy rationale,

reasoning that designated-for-hearing applications should

4la

be protected from competitive filings so long as the FCC

is engaged in ongoing administrative activity. See

Shurbderg, 876 F.2d at 908-09.

We conclude that the Commission acted within its dis-

cretion in barring HBLP’s competing application for

WLTV. While we are not unsympathetic to the argument

that an extended qualifications proceeding inadvertently

benefits the licensee by insulating it from competition, the

circumstances of the case sub judice do not give rise to

public interest concerns which outweigh the public’s inter-

est in administrative finality and efficiency. In New South

Media Corp. v. FCC, this court held that “with no renewal

hearing ongoing ..., no evidence-taking underway, [and]

no proceeding in midstream or even launched,” the Com-

mission erred in barring competing applications because

doing so would not “require reopening of ‘matters once

decided,’ or ‘relitigation’ of issues already aired.” 685 F.2d

708, 716 (D.C. Cir. 1982) (citation omitted). In reaching

this decision, the New South court relied on a case in

which the Commission ruled that competing applications

should be entertained where prosecution of a renewal

application had been deferred for three years. Jd. (citing

Carlisle Broadcasting Associates, 59 FCC 2d 885, 885 n.1,

889 n.16 (1976)). In contrast, the New South court sug-

gested that if a renewal application were actually “in hear-

ing throughout most of the license term and past its

expiration,” competing applications should not be allowed

until conclusion of the proceeding. Jd. (distinguishing

Committee for Open Media, 543 F.2d 861).

The two other cases relied upon by HBLP are unavail-

ing. In La Rose v. FCC, 494 F.2d 1145 (D.C. Cir. 1974),

a renewal hearing was reopened in order to protect inno-

cent creditors by enabling a court-appointed receiver to

pursue an opportunity to sell the station in question. In

MG-TV Broadcasting Company v. FCC, this court held

that the Commission erred in extending a construction

permit where the holder of the permit had made no signif-

icant progress toward construction and lacked good faith.

Instead, a comparative hearing was required. 408 F.2d

42a

1257 (D.C. Cir. 1968). Unlike the cases discussed thus far,

HBLP’s argument offers no countervailing interest, other

than the public’s broad interest in competition, for open-

ing an ongoing qualifications hearing to competing appli-

cations. Moreover, HBLP does not offer any specific

evidence to support its claim that its application would

only marginally extend the renewal proceeding. Yet, a

qualifications hearing might extend into the next license

period if competing applications dictated the “reopening

of the hearing record for cross-examination of previous

witnesses, objection to exhibits already admitted, intro-

duction of new evidence, and retrial of issues.” Committee

for Open Media, 543 F.2d at 873. In light of these consid-

erations, the Commission did not abuse its discretion in

refusing to accept HBLP’s application for the WLTV

facility.

2. The San Antonio Application

HBLP claims that no valid cutoff date was established

for applications competing for one of SICC’s licenses—

that of KWEX-TV. It argues that the Commission failed

to follow proper procedure in alerting potential applicants

that the filing period for competing applications would not

be truncated by its order designating for hearing SICC’s

KWEX-TV renewal application. HBLP effectively con-

cedes that the Commission’s official notice in the Federal

the Commission erred in issuing a news release, prior to

the official notice, which announced the designation for

hearing without noting that the normal window for com-

peting applications would be maintained. In its order

below, the Commission rejected this claim because HBLP

failed to demonstrate that it or any other applicants were

actually confused or deterred by the news release; alterna-

tively the Commission relied on its official notice.

We affirm the Commission’s ruling because: (1) HBLP

did not attempt to file a competing application at the rele-

vant time and no prejudice has been demonstrated to any

other applicants; cf. Salzer v. FCC, 778 F.2d 869, 875 (D.C.

43a

Cir. 1985) (filing intructions were vague and ambiguous

and 44 of 53 applicants apparently were misled by them);

and (2) the official notice was accurate and was released

before the close of the window.

3. Denial of Waivers

HBLP asserts that the Commission erred in denying

waivers of its cutoff rule for its remaining competing

applications (and for the Miami and San Antonio applica-

tions in light of the failure of the above claims). It argues

that the Commission has not applied its “compelling

justification” basis for waivers consistently in the past and

reasons that the lack of an established “strict” waiver pol-

icy impels the Commission to grant waivers in the case

sub judice. We find this argument without merit.

The FCC precedents relied upon by HBLP upheld

waivers based upon persuasive showings of impossibility,

hardship, or other arguments demonstrating a clear public

interest in allowing the waiver. HBLP has not identified

any Commission precedent similar to this case where

applicants seek waivers three years after the cutoff date

and offer only the public’s interest in competition as a jus-

tification for the waiver. Moreover, HBLP has not offered

any explanation as to why, with the exception of the

Miami application, the competing applications were not

timely filed. We affirm the Commission’s ruling because

it has offered a reasonable distinction between this case

and occasions in the past when waivers of filing deadlines

have been granted.

C. Deviation from Jefferson Radio

As a threshold matter petitioner HBLP argues that by

approving the settlement agreement the Commission vio-

lated §§ 301 and 304 of the Act, which preclude property

rights in broadcast licenses. Similarly, HBS argues that

§ 310(b) absolutely precluded the Commission from grant-

ing a license to SICC for any purpose after the ALJ’s

finding of de facto alien control. We need not resolve these

questions, however, because we find that the Commission

44a

violated its policy as upheld in Jefferson Radio. HBLP also

argues that the Commission, pursuant to § 309 of the Act,

should have provided notice and an opportunity for public

participation prior to consideration of the settlement

because the settlement raised issues of substantial public

concern. We reject this argument. Nothing in § 309

requires the Commission to solicit public comment on set-

tlement agreements ir adjudicatory proceedings. See 47

U.S.C. § 309 (1982). On the contrary, the Act limits the

right of petition to deny an application to a “party in

interest.” 47 U.S.C. § 309(d)(1).

Petitioner HBLP charges that by approving a full mar-

ket sale to Hallmark prior to the conclusion of the

renewal proceeding, the Commission made an ad hoc

exception to the policy upheld in Jefferson Radio without

articulating a clear rationale for this departure. We agree.

The content and rationale of the Jefferson Radio policy

are adequately explained in a previous opinion of this

court: ;

Under a long-standing policy formulated by the

[Commission] and upheld by this court, Jefferson

Radio Co. v. FCC, 340 F.2d 781, 783 (D.C. Cir. 1964),

radio station licensees whose licenses have been des-

ignated for revocation hearing, or whose renewal

applications have been designated for hearing on

basic qualification issues, are forbidden to transfer

control of these licenses. Established on the premise

that “a licensee ... has nothing to assign or transfer

unless and until he has established his own

qualifications,” Northland Television, Inc., 42 Rad.

Reg. 2d 1107, 1110 (1978), the policy stems from the

Commission’s concern for the continued effectiveness

of the deterrent provided by, in the appellant’s words,

the “awesome potential for economic loss that

attends deprivation of license.”

Stereo Broadcasters, Inc. v. FCC, 652 F.2d 1026 (D.C. Cir.

1981). As the Commission has observed:

[Where an evidentiary hearing has been designated

on a renewal application or show cause order to

45a

determine disqualification questions, permitting the

suspected wrongdoer to evade sanction by transfer-

ring his interest or assigning the license without

hearing will diminish the deterrent effect which revo-

cation or renewal proceedings should have on broad-

cast licensees. Only under exceptional circumstances

giving rise to compelling equitabie considerations will

the Commission grant renewal to such an applicant

and authorize a concomitant license assignment or

transfer of control. ... Additionally the assignor must

show he will derive no unwarranted [financial] benefit

from a grant of renewal ... conditioned upon the pro-

posed transfer or assignment.

Northland Television, 42 Rad. Reg. 2d at 1110 (emphasis

added).

The Commission has found compelling equitable cir-

cumstances in cases where the assignor is disabled or

where the licensee’s assets are held by a receiver in bank-

ruptcy for the benefit of innocent creditors. Jd. at 1110

n.4. In those rare cases where the Commission, prior to

final resolution of a renewal hearing, has approved trans-

fers falling outside these recognized exceptions, the trans-

fer was made with a substantial monetary penalty to the

transferor. See, e.g, RKO General, Inc. (KHJ-TV), 3 FCC

Red 5057, 5062 (1988) (assignor to get $105 million less

than purchase price and settlement would avoid years of

further litigation); A.S.D. Answering Service Inc., 1 FCC

Red 753, 754 (1986) (surrender of a construction permit

and three licenses and dismissal of all low band licensing

application plus firing of all employees whose conduct was

at issue); George E. Cameron Jr. Communications, 56 Rad.

Reg. 2d 825, 828 (1984) (transferee assumed $6.5 million

in debt, relinquished rights in another station, and

returned a silent, failed station to the air and tranferors

received no compensation whatsoever).

The Commission presents three arguments in support

of its claim that its actions are consistent with Jefferson

Radwo. First, it argues that the policy prohibits transfers

only when the potential benefits in the proposed assign-

46a

ment are outweighed by a countervailing and overriding

public interest in the Commission retaining effective con-

trol over the conduct of its licensees. The Commission’s

reliance on Northwestern Indiana Broadcasting Corp., 60

FCC 2d 205 (1976), as precedent for this balancing

approach, however, is misplaced. In Northwestern, the

Commission declined to accept a settlement proposal

which would have avoided a lengthy qualification hearing

by transferring the station to a third party. The Commis-

sion reached this conclusion even though the proposed

transfer was approved by the party which precipitated the

qualification hearing and would have given a majority

black community its first black radio station. Jd at 209-

10. The Commission invoked balancing language to

explain the deterrence rationale underlying Jefferson

Radio, reasoning that despite its potential benefits, the

settlement was precluded by the “countervailing and over-

riding public interest” in maintaining the deterrence func-

tion of its hearing processes. Rather than establishing a

balancing test, the Commission in Northwestern

unequivocally adhered to Jefferson Radio, precluding the

settlement because it did not fall within established

exceptions. /d. at 210-11.

The dissent suggests that this court has constructed

Jefferson Radio as some kind of rigid doctrine to frustrate

the Commission’s desire to distribute justice in its licens-

ing process. We take the doctrine as the Commission

established it. Obviously the Commission is free to change

the doctrine, as long as it explains why and what it is

doing, and complies with its process requirements.

Thus the Commission’s argument that it properly

weighed the factors favoring approval of the settlement

agreement against its interest in deterrence is without

merit. Equally unavailing is the Commission’s second

argument that there are no guiding precedents in this case

because it involves subjective inferences of de facto control

under §310 (b) and because SICC was an incumbent

licensee of 20 years. The Commission reasons that the

“illusive nature” of de facto control counsels against a

47a

harsh remedy in the absence of specific precedent to guide

a licensee. The authority upon which the Commission

relies, however, does not support this contention. This

court in Greater Boston Television Corp. v. FCC, 444 F.2d

841, 861 (D.C. Cir.), cert. denied, 403 U.S. 923 (1971),

upheld the Commission’s decision to impose a remedy

having a harsh effect even though there was not an

explicit precedent giving notice to the licensee that it was

required to report a change in de facto control. The

Greater Boston court did state that use of a sweeping

rather than a more refined administrative remedy may in

some instances represent an improvident use of adminis-

trative discretion. Jd. It did not, however, provide exam-

ples of such instances and its holding counsels against the

position which the Commission asserts in this case.

Third, the Commission attempts to use the fact that

this case involves de facto control to distinguish it from

precedents requiring sales in exception to Jefferson Radio

to be made at diminished value. The Commission argues

that the misconduct at issue in those cases was more egre-

gious than in this case because: (1) with no alien having

exceeded the 20% stock ownership limitation or having

served as an officer or director, SICC complied with the

two statutory benchmarks for de jure control; and (2)

SICC made no attempt to conceal the relationships at

issue nor did its conduct involve any misrepresentations

or character violations. Offsetting the allegedly

“technical” misconduct against, inter alia, the “unique”

contributions of SICC to broadcasting and the administra-

tive convenience of the settlement, the Commission con-

cluded that the equities of the case distinguished it from

other cases warranting harsher treatment.

This distinction is specious for two reasons. First, none

of the “diminished value” cases turn on the egregiousness

of the conduct in question. As described above, all of

these cases are premised on a clear requirement that

exceptions to Jefferson Radio falling outside the estab-

lished categories of insolvency or disability be made only

at substantial monetary cost to the assignor. Even under

48a

the established exceptions the Commission has required

adequate showings not only of compelling equitable cir-

cumstances but also of reduced financial benefit for the

assignor. See Northland Television, 42 Rad. Reg. 2d 1107

(licensee had to make adequate showing that its principal

suffered disability and that the proposed transfer would

not result in a profit to the assignor).

Second, SICC’s conduct is not rendered less serious

simply because the ALJ found that the violation involved

de facto control. Clearly, the complex pattern of interlock-

ing relationships scrutinized by the ALJ were developed

for the precise purpose of avoiding the de jure restrictions

in §310 (b). The ALJ’s extensive findings demonstrate

that conduits for alien influence can be created that have

the potential to be just as effective as de jure violations.

For example, in the early days of SICC’s tenure as a

broadcaster, the Azcarragas advanced emergency funds to

the stations, provided programming to the stations while

deferring payment for years, and opened collateral deposit

accounts for the stations to draw upon in order for the

stations to receive financing from United States banks. In

addition, a number of the officers and directors of the

SICC stations had significant pre-existing associations

with the Azcarraga media empire and became principal!

investors in various licensee stations with the benefit of

Azcarraga financing. Jnitial Decision at 91 80-114. While

we reach no conclusions as to whether such conduct con-

stitutes a violation of § 310(b), we are unpersuaded that

the distinction between de jure and de facto conduct has

any relevance for the purposes of maintaining the deter-

rence rationale which informs the Jefferson Radio policy.

The abuse-of-process allegations raised in the excep-

tions to the ALJ’s decision a'so undercut the Commis-

sion’s assertion that SICC’s conduct was distinguishable

from that addressed in the other diminsished value cases.

The Commission’s own Mass Media Bureau attempted to

add an abuse-of-process issue to the hearing before the

ALJ—a petition which the ALJ denied. The Bureau then

filed an exception which charged that SICC harrassed and

49a

intimidated SRBA and other potential witnesses for hav-

ing brought information about SICC’s conduct to the

attention of the Commission. For example, SRBA alleged

that SICC filed more than thirteen apparently baseless

antitrust suits against potential witnesses to chill adverse

petitioning before the Commission. The Commission

asserts that because SRBA withdrew its exception—

pursuant to a settlement of the antitrust litigation

brought by SICC against SRBA and associated parties—

it did not feel compelled to investigate this claim. The

terms of SRBA’s settlement with SICC are not in the

record; hence we do not know what induced SRBA to

withdraw the abuse-of-process claim and to file a petition

in support of the transfer to Hallmark. Certainly, if SICC

intended to “buy” its way out of the abuse-of-process

charges, the Commission ought not to facilitate such a

result by not investigating the charges. While we are not

suggesting that the Commission is obliged to reopen the

abuse-of-process claims, these circumstances further per-

suade us that this was not a case of mere “technical” alle-

gations sufficient to escape the requirements of Jefferson

Radio.

Finally, the Commission urges a “remedy” for a possible

violation of § 310 (b), prior to the final resolution of the

issue, which is an extreme departure from prior prece-

dents: a full market sale at $300 million with no apparent

burdens to SICC other than barring SICC principals from

becoming officers or directors of the assignee for two

years. Intervenors, indirect subsidiaries of Hallmark,

point out that in the past the Commission has ratified

unauthorized transfers of control by approving a subse-

quent application to transfer while exacting only a

$10,000 fine against the incumbent licensee. See Bartell

Broadcasters, Inc., 19 FCC 2d 890 (1969); Areawide Com-

munications, Inc., 12 FCC 2d 170 (1968). Yet in neither

of these cases had the qualifications or renewal applica-

tion of the incumbent licensees been designated for hear-

ing prior to the request for official authorization of the

transfers. Moreover, in both cases the Commission made

50a

a final determination that there had been a willful viola-

tion of the Act’s restriction on unauthorized transfers

before approving the transfer and assessing a fine. In con-

trast, in this case the Commission truncated a renewal

proceeding prior to finally resolving the issues which had

been designated for hearing. We also note that the qualifi-

cations of the incumbent licensees were not at issue in

Bartell and Areawide. Instead of a substantive qualifica-

tions violation, those cases dealt with the fact that osten-

sibly acceptable transfers had been effected by the

incumbent licensee without the official authorization of

the Commission.

We agree with petitioners that the relief granted by the

Commission in this case constitutes a substantive depar-

ture from Jefferson Radio which warrants a reasoned

explanation. Moreover, if on remand the Commission

chooses to modify this policy, it must articulate clearly the

content and scope of the new policy. In particular, if the

former bar to transfers at full market value is to be

replaced with a “balancing” test that weighs, inter alia, the

degree of misconduct in question (even though a final

determination will not have been made on this issue), the

Commission should explain what constitutes serious mis-

conduct sufficient to bar profits. Alternatively, the Com-

mission may complete the proceedings that were pending

at the time it approved the settlement agreement and

then fashion a remedy that furthers the goals of its stated

and known policies.

Il.

We find that HBLP, TVL, and HBS have standing as

prospective competitors to challenge the Commission’s

approval of the settlement agreement and transfer to

Hallmark. We uphold the Commission’s decision not to

accept competing applications for the licenses in question.

We find that the Commission violated its policy, as upheld

in Jefferson Radio, of precluding assignment at full value

of a broadcast license until it has finally determined that

5la

the assignor has not forfeited its right to a license. There-

fore, we remand to the Commission to complete the pro-

ceeding pending at the time the settlement agreement was

approved or to articulate a new policy that explains why

Jefferson Radio is no longer an appropriate precedent and

to justify the transfer to Hallmark without completing the

pending renewal proceeding.

It is so ordered.

52a

WILLIAMS, Circuit Judge, dissenting in part and concur-

ring in part of the judgment: After extensive hearings

before an administrative law judge, the FCC here approved

a settlement that was satisfactory to all active participants

in the administrative proceedings. Under its terms the

FCC renewed Spanish International Communications Cor-

poration’s disputed licenses but required their transfer to

a third party. At the behest of two firms that may, for all

we know, be no more than litigative shells, that played no

material role in the administrative proceedings involving

renewal, and that made no timely filings seeking compara-

tive hearings for the licenses, the court today upsets the

settlement. As I believe that neither firm has suffered a

material injury, I dissent.

The two firms, Hispanic Broadcasting System and His-

panic Broadcasting Limited Partnership, claim standing

as prospective license applicants. But as neither ever filed

a timely application for the license they seek, neither

appears before us as a runner-up, as did the petitioner in

Orange Park Florida T.V., Inc. v. FCC, 811 F.2d 664 (D.C.

Cir. 1987), or even as a defeated contestant. In fact, if

these parties are serious about competing for the stations

(should they become vacant), they haven’t told us about

it, and their performance before both the Commission and

the court supplies no basis for believing they are. They

appear more as observers who have been lollygagging

around the track while others strove. They have not dem-

onstrated the “personal stake in the outcome of the

controversy” necessary to satisfy the constitutional

requirements of Article III. Warth v. Seldin, 422 U.S. 490,

498 (1975) (internal quotations omitted).

It is true, of course, that nonrenewal of Spanish Inter-

national’s licenses, if it were ultimately to result from

invalidation of the settlement, would create vacancies for

which HBS and the Partnership could compete. Given the

edge the Commission allows incumbents in a comparative

hearing, see Central Florida Enterprises, Inc. v. FCC, 683

F.2d 503 (D.C. Cir. 1982) (“renewal expectancy” of incum-

bent licensee may be a factor in comparative proceedings),

53a

the existence of a vacancy is a potential advantage. Fur-

ther, neither a potential license contestant, nor a disap-

pointed bidder, nor others claiming standing on

comparable grounds, is by any means required to show for

purposes of standing that it would have carried off the

prize but for the alleged illegality. See, e.g., Village of

Arlington Heights v. Metropolitan Housing Development

Corp., 429 U.S. 252 (1977) (plaintiff seeking federal hous-

ing assistance); Regents of the University of California v.

Bakke, 438 U.S. 265, 280-81 n.14 (1978) (medical school

applicant); CACI, Inc.-Federal v. United States, 719 F.2d

1567, 1574-75 (Fed. Cir. 1983) (disappointed federal con-

tract bidder). Finally, in many such cases courts have

framed the complainant’s ini ry simply as the loss of an

opportunity to compete. See, e.g., C C Distributors, Inc. v.

United States, 883 F.2d 146, 151 (D.C. Cir. 1989) (disap-

pointed bidder).

This hardly means, however, that anyone can wander

_ in off the street, pronounce himself a potential contestant,

and thereby recruit the courts to upset a decision of a

coordinate branch of government. See Antonin Scalia,

The Doctrine of Standing as an Essential Element of the

Separation of Powers, 17 Suffolk U. L. Rev. 881 (1983).

Some indication of realistic prospects is also needed. As

Judge Posner has observed, a medical school applicant

could challenge a racial exclusion without proving that in

its absence he would be admitted, but “he would not have

standing if he was two years old.” Planned Parenthood

Ass’n of Chicago v. Kempiners, 700 F.2d 1115, 1137 (7th

Cir. 1983) (concurring); see also Doherty v. Rutgers School

of Law-Newark, 651 F.2d 893 (3rd Cir. 1981) (no standing

to challenge affirmative action program where plaintiff

was otherwise clearly unqualified for admission).

The rationale for requiring an indication of serious

prospects is simple enough: a lost opportunity is no loss

at all if there is no realistic chance of winning once the

supposed illegality is corrected. Those who without such

prospects nonetheless bring suit are presumably either

seeking to enjoy its nuisance value, see National Federa-

54a

tin of Federal Employees v. Cheney, 883 F.2d 1038, 1053

(O.C. Cir. 1989), or acting out of the sort of ideological

interest that the Supreme Court has declared insufficient

to confer standing. See, e.g., Sierra Club v. Morton, 405

U.S. 727 (1972).

In instances where an agency has held a contest and

the plaintiff entered, it is typically plain from the record

whether its prospects were serious. In the disappointed

bidder cases that has often been true, and there we have

insisted that the petitioners have been “ ‘within the zone

of active consideration’ for the bid’s award.” National Fed-

eration, 883 F.2d at 1053 (quoting National Maritime

Union v. Military Sealift Command, 824 F.2d 1228, 1237-

38 n.12 (D.C. Cir. 1987)). In many cases disappointed con-

tract bidders found to have standing were in fact runners-

up in the contest whose validity was challenged. See, e.z.,

Choctaw Manufacturing Co. v. United States, 761 F.2d 609,

613 (llth Cir. 1985); CACI, Inc., 719 F.2d at 1575;

Armstrong & Armstrong, Inc. v. United States, 514 F.2d

402 (9th Cir. 1975); but cf. Gull Airborne Instruments, Inc.

v. Weinberger, 694 F.2d 838, 842 & n.3 (D.C. Cir. 1982)

(dictum that second-lowest bidder in original procurement

had not shown enough likelihood of success on recompeti-

tion to challenge agency’s failure to terminate contract).

Similarly, in Orange Park, an FCC case where we drew

heavily on the disappointed bidder analogy, the plaintiff

was the sole other applicant for the contested license. But

for the Commission’s alleged error in allowing the winning

applicant to make a curative amendment, plaintiff could

have itself made an amendment curing its only apparent

deficiency. 811 F.2d at 670-73.

I have considerable doubt whether the present case

calls for anything less than a showing by HBS and the

Partnership that they were within the “zone of active

consideration” — which they obviously were not. It is not

the FCC’s fault, but theirs, that we have no clue as to

their qualifications; these parties could have fought for

Spanish International’s licenses in what would have been

the equivalent of an open contest. The complaint ques-

55a

tioning Spanish International’s qualifications was filed

with the Commission in 1980, see J.A. 16 (designation

order), and yet neither HBS nor the Partnership submit-

ted competing applications for three Spanish Interna-

tional licenses up for renewal in 1982 and 1983, see

Spanish International Communications Corp., 2 FCC Red

3336, 3337 (1987), at which times the Commission would

have been required under its regulations to accept con-

forming submissions. See 47 CFR §73.3517(e) (1988).

(The cut-off rules do not kick in during the investigation

of such complaints, but only when designation for hearing

occurs — in this case, not until June 1983.) The only

applications they did manage to proffer were no less than

three, and as many as seven, years late. See Spanish

International, 2 FCC Red 3336, 3336-37, 3342 n.& (1987).

Since the settlement they have passed up further opportu-

nities to compete. See Commission Brief 29 n.20 (no com-

peting applications were filed against Hallmark’s request:

for license renewal after the settlement). These parties

were not even also-rans, much less runners-up.

Nonetheless, one might argue that HBS’s and the Part-

nership’s prospects should be tested as if they had had no

opportunity to compete, on the theory that Spanish Inter-

national’s status as incumbent made their opportunities

sO unappealing as to excuse their failure to apply. (This

requires disregard of Spanish International’s vulnerability

once its qualifications were challenged.) Where for some

reason no contest has been run, or the plaintiff for some

other reason has had no chance to demonstrate whether

it would place, courts have applied laxer standards. Thus

in C C Distributors, allegedly illegal action cut off any

opportunity to bid, but we relied on_ plaintiffs’

“demonstrated capacity to compete for and to obtain

[similar] contracts” as assurance that an opportunity to

compete “would not be illusory.” 883 F.2d at 151. See also

Hayes International Corp. v. McLucas, 509 F.2d 247, 251

(5th Cir. 1975) (petitioner had held contract similar to one

whose award was challenged).

56a

HBS and the Partnership would go even farther, rely-

ing on MG-TV Broadcasting Co. v. FCC, 408 F.2d 1257

(D.C. Cir. 1968), for the notion that a possible license

applicant can secure standing whenever the denial of oth-

ers’ applications (which here would follow if agency pro-

ceedings took a favorable turn on remand) “would have

left the station vacant and available for appellant’s

application.” Jd. at 1264 n.24. If correct, of course, such

a rule would afford anyone standing, as any vacancy

creates such a theoretical opportunity for the whole world.

But the court’s five lines of footnote addressing the point

do not suggest that anyone had raised the issue of MG-

TV’s prospects, and indeed no party had raised the stand-

ing issue at all. See Briefs of the Commission, MG-TV

Broadcasting Co., and Intervenor Seven Arts Broadcast-

ing Co., Inc., MG-TV Broadcasting Co. v. FCC, 408 F.2d

1257 (D.C. Cir. 1968) (No. 21,224). To the extent that

MG-TYV represents such a holding, our later decision in

Orange Park, which wrestled at some length with the

problem and did not find MG-TV worthy of citation,

clearly supersedes.’

It is true that Orange Park eschewed any prediction of

the likelihood of the plaintiffs ultimately prevailing. 811

F.2d at 672-73 n.18. But we reached that conclusion only

after having determined that plaintiff “has devised plans

sufficiently detailed to enable it to compete for the

facility.” Jd. The court emphasized that the petitioner

could readily cure the deficiency in its original submission,

that it stood “ready, willing and able” to reapply for the

license, and that its intention to do so was “manifestly

evident” from the record. Jd. at 672-73 & n.18. These rep-

resent the minimum requirements that one can extract

from our cases.

'The various opinions in Shurberg Broadcasting v. FCC, 876

F.2d 902 (D.C. Cir. 1989), assumed standing and did not assess

the seriousness of Shurberg’s quest. In any event, cases.in which

jurisdiction is assumed are not authority for the existence of juris-

diction. Pennhurst State School & Hospital v. Halderman, 465

U.S. 89, 119 (1984).

57a

Thus I turn to the record in a search for some hint that,

if court action led to HBS’s or the Partnership’s having

an opportunity to compete, it would be better than

“illusory.” None appears. As noted, neither HBS nor the

Partnership made any timely application for the licenses.

Nor did either see fit even to join in the initial battle to

unseat Spanish International. Such a commitment would

have been at least an earnest of seriousness. Under Com-

mission regulations, either could have petitioned to inter-

vene in the proceedings as a matter of course within 30

days of the designation order of June 16, 1983. See 47

CFR § 1.223 (1988) (rules for intervention); J.A. 15 (desig-

nation order). The Partnership’s attempt to intervene fell

three years too late, and the Review Board rejected its

petition as “grossly out of time and defective.” Spanish

International, 1 FCC Rcd 844, 847 n.2 (Rev. Bd. 1986). Its

sole excuse, that it was not yet in existence by the rele-

vant deadline, see J.A. 377, only underscores the ram-

shackle character of its interest. (The Commission upheld

the Review Board’s ruling on intervention, and afforded

the Partnership only amicus status. Spanish International,

2 FCC Red at 3338 n.15.)

HBS did manage to participate, but very indirectly, and

in what was perhaps the least promising avenue for chal-

lenging the Commission’s consideration of the transac-

tion. Instead of petitioning to deny the conditional

renewal of Spanish International’s license, it attacked

only the transferor’s application to assign the license once

renewed. J.A. 146. As even the Partnership concedes, this

track did “not ... provide[ ] a meaningful opportunity to

challenge the decision to permit the settlement,” Partner-

ship Brief 20 n.6, since Commission assent to renewal

would necessarily entail assent to the assignment.

Finally, even before the court the roles of HBS and the

Partnership suggest the improbability that either would

be “ready, willing and able” to compete on a serious basis

for the licenses should they fall vacant. Neither party

asserts that it would in fact qualify as a licensee, cf. DKT

Memorial Fund, Ltd. v. AID, 810 F.2d 1236 (D.C. Cir.

58a

1987), nor do they stoop even to state that they intend

to compete for the stations should the vacancies occur.

Neither has offered reason to believe that, in Orange

Park’s words, it “has devised plans sufficiently detailed to

enable it to compete for the facility.” 811 F.2d at 672-73

n.18. See also Public Citizen v. Lockheed Aircraft Corp.,

565 F.2d 708, 717-19 (D.C. Cir. 1977) (no injury sufficient

to challenge excess property sale where plaintiff had not

demonstrated capacity to compete for purchase). Nor is

this a case in which the mere fact of appeal might allow

us to assume such qualification or intention. See National

Maritime, 824 F.2d at 1237 n.12 (“[p]resumably a bidder

who believed that it would have no significant likelihood

of obtaining the bid on re-solicitation would not bring

suit”). As HBS appears simply as one signer of a joint

brief with the closely related viewer petitioners, its contin-

ued role is as easily attributable to the interest in provid-

ing a back-up theory of standing as to any real interest

in seeking the licenses. (It did not even bother to appeal

the Commission’s dismissal of its belated applications.) As

for the Partnership, a successful challenge to the Commis-

sion’s cut-off rules would have made it the sole candidate

for the licenses other than Spanish International.’ But

that alone gives no hint that it would be anywhere near

the ballpark in an open competition, which is the sort that

could result here and which would likely attract some

heavy hitters. Thus, what distinguishes HBS and the

Partnership from the rest of the world is that they belat-

edly filled out a few forms. That is not enough.

By contrast, TVL was plainly within the zone of active

consideration. It was one of two finalists in the sales pro-

cess supervised by the California district court, at least

*Because the Commission’s application of its timeliness rules

prevented the Partnership from demonstrating its ability to place,

it clearly could secure standing to challenge that denial without

showing that it would have been “within the zone of active

consideration.” But without some indication of ability to meet the

Commission’s minimum qualifications, as required in Orange

Park, it should not have standing even to attack the denial.

59a

three other bidders having been eliminated elsewhere

along the way. At the time the court approved Hallmark’s

offer TVL had firm financing commitments for $250 mil-

lion of a $320 million bid; within a mere three days it had

lined up the other $70 million. If its claim of racial dis-

crimination in the district court proceedings were merito-

rious, and if Commission approval of the settlement in the

face of such discrimination were substantively invalid, its

proposed remedy — delay of the settlement to allow

reconsideration of its original bid in the light of its later

acquisition of full financing — would plausibly give it a

shot at the licenses. As TVL does not challenge the settle-

ment on Jefferson Radio grounds, however, its standing

provides no support for today’s outcome.’

As the majority finds standing for HBS and the Part-

nership it need not resolve that of the self-identified

viewer petitioners, the Coalition for the Preservation of

Hispanic Broadcasting and Susan Jaramillo. Maj. Op. at

10-11. As the court notes, there is no evidence to suggest

that Congress adopted § 310(b)(3)’s restrictions on alien

control in order to advance the public’s interest in pro-

gramming content. Indeed, such evidence as the parties

have uncovered suggests a national security purpose. See

Maj. Op. at 4. Moreover, whatever may have animated

Congress, it surely did not restrict foreign license owner-

3On the merits of TVL’s claim, I concur in the court’s result,

but on somewhat different grounds. Its filings before the Commis-

sion never made clear its current theory that Commission

approval of a transfer to Hallmark violated the Equal Protection

clause because it would incorporate or build upon the alleged dis-

crimination in the district court proceedings. Whatever the merits

of this claim, it appeared before the Commission more as a wholly

implausible effort to get the Commission to set itself up in judg-

ment over the district court and Ninth Circuit on constitutional

matters, with no explicit claim of discrimination by the Commis-

sion. See TVL Petition to Deny, Sept. 26, 1986 (J.A. 213); TVL

Application for Review, July 24, 1987 (J.A. 458). Accordingly, it

fails under the principle that a sow’s ear argument before an

agency does not require the agency to make a silk purse response.

See City of Vernon v. FERC, 845 F.2d 1042, 1047 (D.C. Cir. 1988).

60a

ship in order to enhance non-English-language program-

ming. Thus the Coalition’s interest in preserving Spanish-

language programming, J.A. 390, is “so ... inconsistent

with the purposes implicit in the statute” that their stand-

ing would be wholly inappropriate. See Clarke v. Securities

Industry Ass'n, 479 U.S. 388, 399 (1987).

For her part, Jaramillo objects to “foreign domination”

of the supply of Spanish-language programming, J.A. 491,

so that if § 310(b)(3) reflected any interest in program-

ming content, she might occupy at least a non-adverse

relation to its goals. But her standing fails for want of a

material injury. Since the settlement eliminated the possi-

bility of alien domination over the stations, her interest

in all-American Spanish-language programming could

benefit from this litigation only to the extent that Com-

mission rejection of the settlement might have tended to

deter future violations of § 310(b). This is too speculative

to satisfy Article III. Compare Linda R. S. v. Richard D.,

410 U.S. 614 (1973) (invalidation of state’s refusal to

enforce criminal non-support laws against fathers of ille-

gitimate children bears too speculative a relation to any

prospect that mother of illegitimate child would fare bet-

ter in extracting child support from father).

Nor can either the Coalition or Jaramillo stand upon

the purposes of the Jefferson Radio doctrine, for it is

entirely instrumental, aimed only at enhancing the deter-

rent effect of whatever substantive provision supports the

attack on the incumbent licensee, here § 310(b)(3). See

Stereo Broadcasters, Inc. v. FCC, 652 F.2d 1026, 1027 (D.C.

Cir. 1981).

Thus, of the four petitioners who challenge the settle-

ment on Jefferson Radio grounds, three show no material

injury and the Coalition asserts an interest that is in

apparent conflict with the purposes of § 310(b). Yet at the

behest of the two purported license applicants the court

today upsets a carefully arranged and (so far as appears)

useful agreement. The settlement cures whatever viola-

tion of § 310(b)(3) may have existed. It frees Commission

6la

time for other matters. It satisfies the group that pressed

the §310(b)(3) challenge before the Commission, the

Spanish Radio Broadcasters Association. And, so far as

Jefferson Radio’s object of maintaining deterrent effect is

concerned, the record reveals no hint that violations of -

§ 310(b)(3) are so widespread as to require much deter-

rence.

* c *

As I believe that we have no jurisdiction over the

Jefferson Radio issue, I neither join nor dissent from the

opinion on that point. But compare McKelvey v. Turnage,

792 F.2d 194, 209 (D.C. Cir. 1986) (Scalia, J., dissenting

from jurisdiction but joining on merits). A few words may

be in order, however, lest the majority opinion be misin-

terpreted on remand. Compare Atari Games Corp. uv.

Oman, No. 88-5296, slip op. at 1 (D.C. Cir. Oct. 31, 1989)

(Silberman, J., concurring). As I understand the opinion,

it reads the Commission’s Jefferson Radio doctrine as

absolute, one of unwavering unwaivering, subject only to

specific, discrete exceptions. The Commission’s fault is

the perceived inadequacy of its explanation for softening

the doctrine. On remand, therefore, the Commission is

free, for example, to explicitly change the doctrine into a

balancing test, so long as it explains adequately. See, e.z.,

NLRB v. Local Union No. 103, 434 U.S. 335, 351 (1978)

(“[aJn administrative agency is not disqualified from

changing its mind”); Greater Boston Television Corp. v.

FCC, 444 F.2d 841, 852 (D.C. Cir. 1971).

Whatever the merits of the majority’s reading of

Jefferson Radio, | am puzzled by its concern over the Com-

mission’s decision not to pursue the claims of Spanish

Radio Broadcasters of America that Spanish Interna-

tional had brought antitrust actions against it as a form

of harassment. Maj. Op. at 24-25. The ALJ rejected these

claims as lacking sufficient evidence of bad faith, and the

claimant has withdrawn them as part of the settlement.

The court expresses concern that the withdrawal may

have been motivated by an exchange of consideration. I[d.

62a

at 25. I would not be surprised; that is how many conflicts

before the FCC come to an end. But if the Commission

must press every abandoned suggestion of hanky-panky

through to the bitter end, or must satisfy itself that the

accuser in retreat was pure of heart, uncorrupted by any

trade-off, it will never be able to get on with its business.

The FCC is not some sort of general morals police.

That aside, regardless of what course the Commission

might take on remand, the context — agency choice

among remedies — requires much discretion for the

agency and deference from the court. See, e.g., Moog

Industries, Inc. v. FTC, 355 U.S. 411, 413 (1958) (noting

resource allocation problem and need for specialized,

experienced judgment). Remedial choices demand both a

grasp of the scope of the evil to be remedied (and thus

how much deterrence is needed), and a predictive judg-

ment as to deterrent effects. Judges are unlikely to be able

to contribute much on either issue. See generally FCC v.

WOKO, Inc., 329 U.S. 223, 228-29 (1946); West Coast

Media, Inc. v. FCC, 695 F.2d 617, 622 (D.C. Cir. 1982);

Lorain Journal Co. v. FCC, 351 F.2d 824, 831 (D.C. Cir.

1965). Moreover, the need for judicial deference is at its

peak where (as here) the remedy is secured as part of a

settlement. The Commission is effectively making a deci-

sion as to the allocation of its resources — a decision

whether the gain in deterrent effect that might flow from

pursuing the case to the hilt is worth the loss, in terms

of energy deflected from other matters. See Board of

Trade v. SEC, 883 F.2d 525, 530-31 (7th Cir. 1989)

(“declining a particular case hardly means that the [agen-

cy’s staff] will go twiddle their thumbs”); cf. Heckler v.

Chaney, 470 U.S. 821, 831-32 (1985). Oddly, if the Com-

mission on remand were to affirm the ALJ’s finding of a

violation, it could settle with Spanish International

untrammeled by the Jefferson Radio doctrine and in full

enjoyment of the deference that is well-established for

remedial choices. See Bartell Broadcasting Inc., 19 FCC 2d

890 (1969); Areawide Communications, Inc., 12 FCC 2d 170

(1968) (both allowing transfer at full market value despite

licensee violations of 47 U.S.C. § 310(d)).

63a

We should not interfere with the Commission on this

matter, at the instigation of parties with such feeb’e

stakes.

64a

APPENDIX C

Before the

Federal Communications Commission

Washington, D.C. 20554

FCC 87-195

37099

MM DOCKET NOS. 83-540 to 83-544 and 84-830 to 84-834

In the Matter of

SPANISH INTERNATIONAL

COMMUNICATIONS CORPORATION

File Nos. BRCT-830401LM et al.

For Renewal of License of KWEX-TV San Antonio, Texas, et al.

MM DOCKET NO. 83-545 File No. BRCT-800730KJ

BAHIA DE SAN FRANCISCO TELEVISION COMPANY

For Renewal of License of KDTV(TV) San Francisco, California

MM DOCKET NOS. 83-657 and 84-835

THE SEVEN HILLS TELEVISION COMPANY

File Nos. BRCT-830601KJ and BPTT-8403081Q

For Renewai of license of KTVW-TV Phoenix, Arizona, et al.

65a

MEMORANDUM OPINION AND ORDER

Adopted: June 1, 1987 Released: June 2, 1987

By the Commission:

1. By a series of Orders, 48 Fed. Reg. 28,549 (1983),

48 Fed. Reg. 33,539 (1983) and 49 Fed. Reg. 35,691 (1984),

we designated for hearing the renewal applications of

Spanish International Communications Corporation (SICC),

Bahia de San Francisco Television Company (Bahia), and

Seven Hills Television Company (Seven Hills) on, inter

alia, an issue to determine whether the stations were un-

der alien control in violation of Section 310(b) of the Com-

munications Act.! In an Initial Decision, FCC 86D-1,

released January 8, 1986, Administrative Law Judge John

H. Conlin found that the corporate licensees had violated

Section 310(b) of the Communications Act and that they

were not basically qualified to remain Commission licen-

sees. On September 26, 1986, the Review Board approved

a settlement agreement among SICC, Bahia, the Mass Me-

dia Bureau, and two other parties to this proceeding—

Fouce Amusement Enterprises, Inc. (Fouce) and SIN, Inc.

1 The designated applications include: (1) renewal applications for five

full power television stations licensed to SICC (Stations KWEX-TV (San

Antonio, Texas), KMEX-TV (Los Angeles, California), WXTV(TV) (Pa-

terson, New Jersey), WLTV(TV) (Miami, Florida), and KFTV(TV) (Han-

ford-Fresno, California)), (2)a renewal application for one full power

television station licensed to Bahia (Station KDTV(TV), San Francisco,

California); (3) a renewal application for one full power television station

licensed to Seven Hills (Station KTVW, Phoenix, Arizona); (4) a renewal

application for a television translator licensed to SICC (W35AB, Phil-

adelphia, Pennsylvania); (5) an application to operate a television trans-

lator filed by SICC (K39AB, Bakersfield, California); (6) a CP application

for a television translator filed by SICC (W47AD, Hartford, Connect-

icut); (7) a CP application for a television translator filed by Seven Hills

(K52A0, Tucson, Arizona); and (8) CP applications for two low power

television stations filed by SICC (K30AK, Austin, Texas, and K41AlI,

Denver, Colorado).

66a

(SIN); conditionally granted the renewal applications filed

by SICC and Bahia subject to the prompt transfer of their

authorizations to qualified, unrelated buyers; and termi-

nated the proceeding with respect to SICC and Bahia.

Spanish International Communications Corp., 1 FCC Red

92 (1986), recon. denied, 1 FCC Red 844 (1986). The set-

tlement agreement does not include Seven Hills, and re-

newal applications for Seven Hills’ stations are still pending

before the Review Board. By an Order (FCC 87R-1, 2

FCC Red 511, released January 26, 1986), the Board stayed

the Seven Hills proceeding pending Commission action on

the SICC/Bahia settlement agreement. Seven Hills Tele-

vision Company, 2 FCC Red 511 (Rev. Bd. 1986).

2. Now before the Commission are: (a) Petition for Ac-

ceptance of Applications, filed December 9, 1986, by His-

panic Broadcasting, Ltd. (HBL);* (b) Opposition to Petition

for Acceptance, filed December 24, 1986, by Spanish In-

ternational Communications Corporation and Bahia de San

Francisco Television Company; (c) Opposition to Petition

for Acceptance of Applications, filed December 24, 1986,

by Hallmark Acquisition, Inc. and SICC Acquisition Corp.;

(d) Opposition to Petition for Acceptance, filed December

23, 1986, and Erratum thereto, filed December 29, 1986,

by Rene Anselmo and Seven Hills Television Company;

(e) Reply to Oppositions to Petition for Acceptance for

Applications, filed January 8, 1987, by Hispanic Broad-

? SIN is a Spanish language television network that also engages in

the business of national spot advertising. Fouce Enterprises, Inc. has

a 25.5% interest in SICC.

* Hispanic Broadcasting, Ltd. also filed a petition for waiver on

November 10, 1986, which SICC and Bahia oppose. HBL requests that

the Commission waive Section 1.115(c) and assume jurisdiction over all

matters relating to the settlement agreement. Because the Board denied

the then pending petitions for reconsideration, this proceeding is now

properly before us, and the petition for waiver is therefore moot.

67a

casting Limited Partnership (HBLP);‘ (f) Petition for Ac-

ceptance of Applications, filed September 26, 1986, by

Hispanic Broadcasting Systems, Inc. (HSB); (g) Opposition

to Petition for Acceptance, filed October 15, 1986, by Hall-

mark Acquisition, Inc.; (h) Opposition, filed October 15,

1986, by Bahia de San Francisco Television Company;

(i) Consolidated Reply in Support of Petition to Accept

Applications, filed October 29, 1986, by Hispanic Broad-

casting Systems, Inc.; (j) Application for Review, filed De-

cember 29, 1986, by Spanish American League Against

Discrimination (SALAD); (k) Application for Review, filed

November 10, 1986, by Coalition for the Preservation of

Hispanic Broadcasting (Coalition); (1) Application for Re-

view, filed December 29, 1985, by Rene Anselmo and Seven

Hills Television Company; (m) Application for Review, filed

December 29, 1986, by Hispanic Broadcasting Limited

Partnership (HBLP); (n) Consolidated Opposition to Ap-

plications for Review, filed January 12, 1987, by the Mass

Media Bureau; (0) Consolidated Opposition to Applications

for Review, filed January 12, 1987, by SICC, Bahia and

Fouce Amusement Enterprises, Inc.; (p) Opposition to Ap-

plications for Review, filed January 13, 1987, by Rene

Anselmo and Seven Hills Television Company; (q) Request

for Termination of Waiver, filed February 7, 1986, by

‘In its Reply, HBL claims that SICC’s Opposition contains ‘‘scan-

dalous’”’ material that impugns HBL’s good faith in filing the petition

for acceptance and that it should be stricken as a “‘scandalous pleading”’

in violation of Section 1.52 of the Rules. We will not strike SICC’s

Opposition to HBL’s Petition for Acceptance. In our view, SICC’s op-

position does not contain any material that is scandalous or that should

be stricken under Section 1.52 of our rules. In this regard, we expect

attorneys to represent their clients zealously. Here the allegations

stopped short of suggesting illegal conduct, and therefore did not exceed

the bounds of the law. Compare City of New York Municipal Broad-

casting, 39 RR 2d 102, 103 (1976) (undue influence on Commission staff

alleged); TeleCable Corp., 18 FCC 2d 476, 477-78 (1969) (Commission

staff alleged to have been prejudiced); and Television Broadcasters, Inc.,

1 FCC 2d 970, 973 (1965) (unsupported allegation that an applicant’s

survey was based on false information).

68a

Station Representative Association, Inc. (SRA); (r) Petition

for Termination of Rulemaking and Waiver, filed March

10, 1986, by Caballero Spanish Media, Inc. (Caballero); and

(s) Opposition, filed June 14, 1986, by SIN, Inc. (SIN).

Petitions to Accept Applications

3. We will deny the Petitions for Acceptance of Appli-

cations filed by HBL and HBS. Both groups ask us to

accept for filing CP applications that would be mutually

exclusive with the above captioned SICC/Bahia renewal

applications.’ For the reasons set forth below we conclude

that the CP applications may not be accepted under our

cut-off rules, which provide that competing CP applications

must be filed within 90 days after the renewal application

is filed, and that waiver of our cut-off rules would not,

under the circumstances of this, case, serve the public in-

terest.

4. Petitioners are not entitled as a matter of right to |

file competing CP applications for SICC’s Stations WLTV

(Miami) and KWEX (San Antonio) because they missed

our cut-off dates.* The renewal applications for the Miami

* HBL and HBS have tendered competing CP applications for Stations

KWEX-TV (San Antonio, Texas), KMEX-TV (Los Angeles, California),

KDTV (San Francisco, California), KFTV (Hanford-Fresno, California),

and WXTV (Paterson, New Jersey). HBL also has filed a competing

application for Station WLTV (Miami, Florida).

* Section 73.3516(e) of our rules specifies, in pertinent part, that a

CP application ‘‘will not be accepted for filing if it is mutually exclusive

with an application for renewal of license of an existing broadcast

station unless it is tendered for filing by the end of the first day of

the last full calendar month of the expiring license term. (1) If the

license renewal application is not timely filed as prescribed in Section

73.3539, the deadline for applications mutually exclusive therewith is

the 90th day after the FCC gives public notice of that it has accepted

the late-filed renewal application for filing... .’’ Section 73.3539 pro-

vides that the renewal application normally must be filed by “the first

day of the fourth full calendar month”’ before the end of the license

term.

69a

and San Antonio Stations were filed on October 1, 1981

and April 1, 1983, respectively, and the cut-off dates for

filing competing applications were January 1, 1982 and

July 1, 1983, respectively. The petitions for acceptance of

applications were filed on September 26, 1986, and on

December 9, 1986, years after the cut-off dates.

5. Section 307(c) of the Communications Act automati-

cally extends the license term pending final resolution of

a renewal proceeding. The renewal applications for the six

SICC/Bahia stations were designated for consolidated hear-

ing on May 26, 1983. Because they remain in active hear-

ing status,’ none of the SICC/Bahia stations were required

to file subsequent renewal applications that would have

otherwise been due.® Thus, no window has opened for the

filing of mutually exclusive applications for any of these

facilities after the initial opening of windows in 1981 and

1983, which closed long ago. See Committee for Open Me-

dia v. FCC, 543 F.2d 861, 872 & n.70 (D.C.Cir. 1976);

7 There is no merit to HBS’ argument that this case is no longer in

active hearing status because a settlement agreement is pending before

the Commission. Under Section 1.65 of our rules, as long as this Mem-

orandum Opinion and Order is subject to appeal, this adjudicatory pro-

ceeding remains unresolved and therefore in active hearing status. There

is likewise no merit to HBS’ claim that, in view of the Initial Decision’s

determination that these licensees are basically unqualified, the channels

at issue in this proceeding are vacant and therefore available for the

filing of competing applications. The Initial Decision has not become

final, and, as explained above, the proceedings concerning the fre-

quencies now occupied by SICC/Bahia do not become final until this

adjudicatory case is terminated.

* Section 73.1020(a) of our Rules provides that licenses for TV stations

will ordinarily be renewed for five years and specifies the date that

license terms expire according to the geographic location of each sta-

tion. Thus, the first license term after designation would have expired

on February 1, 1987 for Station WLTV in Miami, Florida; on August 1,

1983 for Station KWEX in San Antonio, Texas; on December 1, 1983

for the three California stations - Stations KMEX (Los Angeles), KDTV

(San Francisco), and KFTV (Hanford); and on June 1, 1984 for Station

WXTV in Paterson, New Jersey.

70a

United Broadcasting Co., 100 FCC 2d 1574, 1578 & n.11

(1985); Faith Center, 99 FCC 2d 1164, 1167 (1984); Faith

Center, 89 FCC 2d 1054, 1058 & n.10 (1982); Faith Center,

86 FCC 2d 891, 893 & n.10 (1981); RKO General, Inc.,

82 FCC 2d 291, 309 (1980), vacated on other grounds, 685

F.2d 708 (D.C. Cir. 1982).

6. There is no merit to HBL’s claim that a valid cut-

off date for filing competing CP applications was never

established for SICC’s San Antonio facility (Station

KWEX). The renewal application for San Antonio was filed

on April 1, 1983, and the cut-off date for competing ap-

plications was July 1, 1983. Thus, the Commission did, as

HBL notes, designate the San Antonio renewal application

for hearing before the 90 day cut-off period for filing com-

peting CP applications has expired. Ordinarily the Com-

mission refuses to accept competing applications after a

renewal application has been designated for hearing. How-

ever, the Commission’s May 26, 1983 Designation Order,

48 Fed. Reg. 28549, para. 6 (pub. June 22, 1983), affirm-

atively stated that competing applications for the San An-

tonio station would be accepted until the usual July 1,

1983 cut-off date. Because the press release announcing

our May 26, 1983 action did not indicate that we would

continue to accept applications for San Antonio until

July 1, 1983, HBL maintains that the public did not have

actual notice of the July 1, 1983 cut-off date until our

_ May 26 Order was published in the Federal Register on

June 22, 1983. Based upon this ‘‘confusion’”’ during a sub-

stantial portion of the 90 day cut-off period, HBL claims

that we must accept competing applications for the San

Antonio station.

7. We will not accept competing applications filed more

than 3 years after the San Antonio cut-off date based upon

idle speculation that someone might have been precluded

from filing a competing application because of some con-

fusion about the acceptability of CP applications after the

May 26, 1983 designation order. It is well established that

Tla

a press release is not an official document having any legal

significance. MCI v. FCC, 515 F.2d 385 (D.C. Cir. 1985).

The May 26, 1983 designation order explicitly stated that

competing applications would continue to be accepted until

the July 1, 1983, cut-off date. Furthermore, HBL does not

claim that it, or anyone else, was actually confused as to

the cut-off date. Nor did anyone come to the Commission

in 1983, and claim that it had intended to file a competing

CP application, but that it was prevented from doing so

because it was confused as to the cut-off date. Absent a

showing that anyone was actually deterred from filing a

CP application, waiving our ‘cut-off’ rules to accept the

tendered applications would not serve the public interest.°

8. Nor is there any | ublic interest justification for ac-

cepting petitioners’ remaining applications. With regard to

Miami, HBL concedes that under the Commission’s policy

of not accepting CP applications where a prior renewal

application is in hearing, SICC was not required to file

the renewal application that would have otherwise been

due on October 1, 1986, and thus no window opened for

the filing of competing CP applications..° HBL submits,

however, that there is a substantial public interest in pro-

*In this regard, HBL’s reliance on Green County Mobilephone, Inc.

v. FCC, 765 F.2d 235 (D.C. Cir. 1985), which involved an application

that was tendered for filing three minutes late, is misplaced. Compare

Denton Channel Two Foundation, Inc., 85 FCC 2d 983, 985 (1981),

where the Commission granted a 90 day waiver to a citizens group

that demonstrated its inability to file a substantially complete appli-

cation before the cut-off date; and Baker-Smith Communications Co.,

67 FCC 2d 548, 550-52 (1978), where we granted waiver requests which

persuasively demonstrates that a waiver would serve the public interest

and which complied with the 30 day filing period that we previously

established for waiver requests in George E. Cameron, Jr. Communi-

cations, 56 FCC 2d 752, 761 & n.9 (1975).

station would have expired on February 1, 1987, the renewai appli-

cation would have been due on October 1, 1986, and the cut-off date

for competing CP applications would have been January 1, 1987.

72a

moting competition in broadcast licensing which precludes

the Commission from protecting licensees indefinitely from

competition, and that these CP applications should be ac-

cepted because the potential for procedural disruption in

this case is minimal. The substantial public interest in com-

petition in broadcast licensing that has been noted by HBL

and recognized by the courts! does not warrant the Com-

mission changing its well-established policies. Contrary to

HBL’s assertion, we cannot waive our cut-off rules and

accept CP applications filed more than 3 years after the

cut-off date without seriously compromising our licensing

process in general and, in this case, without substantially

disrupting this proceeding. Even if acceptance of these ap-

plications did not, as HBL urges, require relitigation of issues

bearing upon SICC/Bahia’s basic qualifications, full consid-

eration of petitioners’ late-filed applications would require ev-

identiary hearings on petitioners’ qualifications and on the

standard comparative issue. Thus, acceptance of the late-filed

applications would prolong indefinitely the resolution of this

proceeding. As the court has recognized, such delay does not

serve the public interest because “‘[tJhere must be some point

in time when the Commission can close the door to non-

parties to a comparative hearing or, at least hypothetically,

no licenses could ever be granted,” Radio Athens, Inc.

(WATH) v. FCC, 401 F.2d 398, 400-01 (D.C. Cir. 1968).

9. Because our cut-off rules serve the public interest in

this manner, we will not waive those rules to accept late

filed applications absent a compelling justification for such

a waiver. See City of Angels Broadcasting v. FCC, 745

F.2d 656, 663 (D.C. Cir. 1984). We find no such justifi-

cation in this case. The fact that competing applications

would offer us a choice of licensees does not offset the

See City of Angels Broadcasting, Inc. v. FCC, 745 F.2d 656 (D. C.

Cir. 1984); New South Media Corp. v. FCC, 685 F.2d 708 (D.C. Cir.

1982); and Committee for Open Media v. FCC, 543 F.2d 861 (D.C. Cir.

1976).

73a

substantial disruption that their acceptance would cause.

See RKO General Inc. (KHJ-TV), 94 FCC 2d 879, 886-86

(1983); RKO, General, Inc. (WNAC), 89 FCC 2d 297, 320-

21 (1982). The Commission did not defer action on the

SICC/Bahia renewal applications or otherwise insulate

these licensees from competition indefinitely. Rather, this

is an ongoing adjudicatory proceeding.'? Further,

petitioners have not explained why they were unable to

file competing applications during the regular 90 day cut-

off period. Moreover, under current practice the public

will, in view of our action herein, have an opportunity to

file competing applications against the San Antonio, Texas

and the three California stations in 1988, against the Pa-

terson, New Jersey station in 1989, and against the Miami,

Florida station in 1992. See Section 73.1020(a) of our Rules.

10. We also reject petitioners’ contention that we must

accept the competing CP applications because SICC is

guilty of misconduct that has compromised the integrity

of the Commission’s processes. HBL submits that SICC

has harassed and intimidated Spanish Radio Broadcasters

of America, Inc. (SRBA). It alleges that SRBA acquiesced

in the proposed settlement agreement primarily because

SICC agreed to dismiss various antitrust suits which it

initiated against SRBA shortly after the May 26, 1983

designation order. SICC has not, as HBL claims, forfeited

any right to claim the protection of the cut-off rules. As

an initial matter, our cut-off rules are designed to interject

order and finality into our proceedings. Committee for Open

12 See Carlisle Broadcasting Associates, 59 FCC 2d 885, 887 (1976);

and Committee for Open Media v. FCC, 543 F.2d at 872 & n.70, where

the court noted that the Commission distinguishes between renewal

applications in hearing status and those that have been deferred. Com-

pare New South Media v. FCC, 685 F.2d 708 (D.C. Cir. 1982), where

the court concluded that where action on a previously filed renewal

application has been deferred, excusing the filing of subsequent renewal

applications improperly foreclosed an otherwise available opportunity

for the filing of competing applications.

74a

Media v. FCC, 543 F.2d 861, 873 (D.C. Cir. 1976); Denton

Channel Two Foundation, supra, 85 FCC 2d at 984. In

this manner the cut-off rules protect the public against

the disruption of service that prolonged consideration of

a renewal application would cause. That they also protect

the renewal applicant from latecomers, such as HBL, is

incidental to this fundamental purpose. Thus, the cut-off

rules are applicable, without regard to a licensee’s basic

qualifications.

11. Furthermore, the mere allegation that SICC im-

properly harassed SRBA through the filing of various an-

titrust actions does not rise to the level of misconduct that

would taint this proceeding and require us to open this

proceeding to additional applicants. SRBA does not claim

that it was harassed by SICC. Moreover, the fact that the

lawsuits were ultimately dismissed does not mean that they

were frivolous or designed to, as petitioners suggest, coerce

SRBA into withdrawing its opposition to the renewal of

SICC’s licensees. Nor are we persuaded by the timing of

the lawsuits alone that SICC has engaged in misconduct

that taints the integrity of our processes. Moreover, HBL’s

petition merely reiterates allegations that were previously

presented to, and explicitly rejected by, the Administrative

Law Judge. SICC, FCC 84M-490, released January 30,

1984. Under these circumstances, we conclude that

petitioners have not met the heavy burden of demonstrat-

ing that this adjudicatory proceeding has become tainted,

and that we must begin anew with a fresh cast of appli-

cants.'*

‘3 Compare City of Angeles Broadcasting, Inc. v. FCC, 745 F.2d 656,

665 & n.12 (D.C. Cir. 1984), and the cases cited therein, where the

court indicated that the presence of ex parte contracts would cast such

doubt upon the integrity of our proceedings as to require us to initiate

a different proceeding open to new applicants. The unproven allegation

of harassment is far less egregious than an ez parte violation, because

the former would not undermine our decision-making process.

75a

Settlement Agreement

12. Having concluded that we will not accept petitioners’

competing CP applications for filing, we now turn to the

more difficult question of whether the settlement agree-

ment approved by the Review Board serves the public

interest. For the reasons that follow, we find that the

Board properly approved the settlement agreement and

terminated this adjudicatory proceeding with respect to

SICC and Bahia. Accordingly, we affirm the Board’s Mem-

orandum Opinion and Order, 1 FCC Red 92, recon. denied,

1 FCC Red 844 (1986), and adopt the findings set forth

therein, except as specifically modified herein."

13. Rene Anselmo/Seven Hills, SALAD, HBLP (formerly

HBL) and Coalition’® seek Commission review of the

Board’s action which approved the settlement agreement,

‘ Anselmo requests that we set a schedule for briefing and oral

argument. HBLP also requests that we afford the parties an oppor-

tunity to file briefs. We do not believe that briefs or oral argument

would significantly contribute to our understanding of the matters raised

in the applications for review.

'® SALAD, HBLP (formerly HBL) and Coalition are not parties to

this proceeding, and Anselmo challenges their standing to file appli-

cations for review. The Board denied petitions to intervene filed by

SALAD and HBLP, but SALAD and HBLP nevertheless seek Com-

mission review of this ruling. In its application for review, Coalition

for the first time requests permission to participate in this proceeding.

Coalition seeks to participate on essentially the same grounds that

SALAD argued before the Board. Although the Board’s analysis of the

intervention question is sound and its rationale logically encompasses

Coalition’s intervention request, it would be helpful, in view of the

importance of the issues raised here, to have the views of Coalition,

HBLP, and SALAD on the difficult questions raised by the proposed

settlement. Thus, we will allow Coalition, SALAD and HBLP to par-

ticipate as amici curiae and accept their applications for review as

amici briefs. Horne Industries, Inc., 98 FCC 2d 601, 602 (1984); Waters

Broadcasting Corp., 91 FCC 2d 1260, 1262 & n.3 (1982), affd sub

nom. West Michigan Broadcasting Co. v. FCC, 735 F.2d 601 (D.C. Cir.

1984).

76a

conditionally granted the renewal applications for the

SICC/Bahia stations, and terminated this adjudicatory pro-

ceeding with respect to SICC and Bahia. They note that

the renewal applications for stations licensed to SICC,

Bahia and Seven Hills were designated for hearing on a

basic qualifications issue, that the ALJ found that all three

licensees were basically unqualified (Initial Decision, para.

176), and that the Review Board approved the settlement

agreement without addressing the merits of ALJ’s deter-

mination that the renewal applications should be denied.’*

14. As petitioners correctly note, we generally do not

permit a licensee with unresolved basic qualifying issues

to sell its station at full market value. See, e.g., Jefferson

Radio Company v. FCC, 340 F.2d 781 (D.C. Cir. 1964).

The premise of this prohibition is that ‘‘a licensee... has

nothing to assign or transfer unless and until he has es-

tablished his own qualifications,” Northland Television,

Inc., 42 RR 2d 1107, 1110 (1980). Int his regard, we are

reluctant to permit basically unqualified licensees to avoid

the consequences of their misconduct by transferring their

licenses to third parties at full market value. Northwestern

Indiana Broadcasting Corp., 60 FCC 2d 205, 209-10 (1976).

A primary objective in this respect is the deterrence of

licensee wrongdoing. Stereo Broadcasters, Inc. v. FCC, 652

F.2d 1026, 1028 (1980).

15. As the Board found, the proposed settlement agree-

ment does not fall within the limited circumstances—dis-

tress sales, and bankrupt or physically disabled

transferors—where we have permitted transfers despite

unresolved qualifying issues.'? However, we are ‘‘vested

‘6 Exceptions to the Initial Decision were filed on April 16, and 17,

1986. The exceptions filed by Seven Hills are still pending before the

Review Board.

'*The applications for review argue that the Board’s reliance on

George E. Cameron, Jr. Communications, 56 RR 2d 825 (1985), is mis-

placed. In Cameron the Commission approved a settlement agreement

77a

with broad discretion in our choice of remedies,’’ WMOZ,

Inc., 3 FCC 2d 687, 639 (1966). Thus, we are not limited

to these recognized exceptions to Jefferson Radio. In ac-

cordance with our broad mandate to serve the public in-

teret and our obligation to give a “hard look’’ to waive

requests, WAIT Radio v. FCC, 418 F.2d 1158, 1157 (D.C.

Cir. 1969), we must determine whether permitting the pro-

posed sale to a qualified, unrelated buyer would, despite

the ALJ’s finding of a statutory violation, serve the public

interest. For the reasons that follow, we are satisfied that

the proposed sale will serve the public interest without

compromising our ability to enforce our rules and regu-

lations or undermining the integrity of our adjudicatory

proceedings.

16. The Commission designated this renewal proceeding

for hearing because there were serious questions as to

whether the stations licensed to SICC, Bahia and Seven

whereby opponents to a renewal supplication would withdraw from the

proceeding and the renewal applicants’ station would be transferred to

a corporation headed by a former creditor of the station that was found

guilty of an unauthorized transfer of control. The Commission found

that the transferee’s actions following the unauthorized transfer of con-

trol mitigated the potential harm and served the public interest in

continued broadcast service. Moreover, under the terms of the agree-

ment none of the station’s principals would receive any compensation

and the transferee would receive no windfall. The applications for re-

view contend that the Board’s treatment of Cameron impermissibly

creates a very broad exception for ‘‘unusual and complex’’ proceedings

to the Commission’s general prohibition against transfers by unqualified

licensees. As set forth below, we are approving the settlement agree-

ment, despite the ALJ’s finding that SICC/Bahia violated Section 310(b)

of the Act, because we are persuaded that the settlement agreement

will adequately remedy any alien ownership problems at the SICC/Bahia

stations without compromising our ability to enforce our rules and

regulations. Under these circumstances, we find that the settlement

agreement serves the public interest. In reaching this conclusion, we

do not rely in any respect on Cameron. Thus, we need not determine

whether Cameron creates an exception for ‘“‘unusual and complex’’ cases

or whether Cameron should, as the Mass Media Bureau contends, be

strictly limited to its facts.

78a

Hills were under alien control in violation of Section 310(b)

of the Communications Act. SICC, 48 Fed. Reg. 28,549,

para. 3 (pub. June 16, 1983). In doing so, the Commission

did not foreclose the possibility that a settlement agree-

ment among the parties would resoive these alien own-

ership problems. See Concurring Statement of

Commissioner Henry M. Rivera, which ‘“‘beseech{ed] the

parties... to continue negotiating... while the hearing

process continues...” (released June 30, 1983). In ac-

cordance with the Commission’s essentially remedial con-

cern in designating this case for hearing, the settlement

agreement, as approved by the Board, will cure any Sec-

tion 310(b) violations to the extent that they may currently

exist at the SICC and Bahia stations. The agreement pre-

cludes principals of SICC and Bahia from becoming officers

or directors of the assignees, from acquiring an equity

interest in the assignees for two years, and from acquiring

more than 5% equity interest in the assignees thereafter.

Thus, approval of the agreement, which provides for the

sale of the stations to qualified and unrelated buyers,'®

serves the public interest by removing licensees expedi-

tiously that may be unqualified by reason of alien control,

thereby ensuring immediate compliance with the statute

at the SICC/Bahia stations.

17. Moreover, we are persuaded by the nature of the

conduct in this case that approving the settlement agree-

'® Consistent with the terms of the settlement agreement, SICC has

agreed to sell its stations to a joint venture comprised of Hallmark

Cards and First Capital Corporation of Chicago, and Bahia has agreed

to sell Station KDTV (San Francisco, California) to SICC Acquisition

Corp. Assignment applications for the SICC and Bahia stations are

pending before the Mass Media Bureau which will determine whether

the assignees are basically qualified to be Commission licensees. Because

the qualifications of the proposed assignees are outside the scope of

this Order, it would be inappropriate at this time to address any ar-

gument that the assignment of the SICC/Bahia licenses to non-minority

buyers would not serve the public interest.

79a

ment will not unacceptably diminish the incentives that

exist for compliance with our rules and regulations. Section

310(bX3) of the Communications Act (47 U.S.C. §310(b))

prohibits the grant of a broadcast license to a corporation

that has more than 20% alien ownership or that has an

alien officer or director. The ALJ found only a technical

violation of the law based primarily on the interlocking

relationships between Anselmo, SIN, and the licensees.

Thus, at the time of the Initial Decision, Rene Anselmo,

who is an American citizen, was president and a major

stockholder in SICC, Bahia and Seven Hills.'® (Initial De-

cision, paras. 7-10.) At the same time, he was president

and a 25% owner in SIN,” which was 75% owned by

Televisa, a Mexican corporation controllec by the Azcar-

raga family. (Initial Decision, para. 29.) The ALJ found

that SICC, Bahia and Seven Hills are American corpo-

rations, and that all of their respective stockholders and

officers are American citizens or corporations, but that the

Azcarraga family has a 20% interest in SICC,through the

Laura Investment Co., that was voted by Anselmo. (Initial

Decision, paras. 7-10 and 165.) Thus, the direct, outright

ownership of the stations by the Azcarraga family never

exceeded the 20% limit on alien ownership set forth in

Section 310(b) of the Communications Act. (Initial Deci-

ston, paras. 11 and 162.) However, based upon the historic

ties between the licensees and the Azcarraga family and

its corporate interests,21 the composition of the ownership

1* Bahia is the licensee of Stations KDTV in San Francisco, and Seven

Hills is the licensee of Station KTVW in Phoenix. The remaining sta-

tions are licensed to SICC.

* Rene Anselmo has resigned as the president of SICC and Bahia.

1 Not only has Reno Anselmo worked with the Azcarraga family for

30 years (Initial Decision, para. 168.), but his interest in the licensee

corporations, as well as that of his longtime associates Emilio Nicolas,

Sr. and Daniel Villanueva, was largely financed by the Azcarraga fam-

ily. (Initial Decision, paras. 92, 160.) In addition, Emilio Azcarraga

Vidauretta had, through various indirect mechanisms, such as deferring

80a

and the boards of directors of the licensee corporations,

and the stations’ management and programming,” the ALJ

concluded that “‘alien influence and direction... greatly

exceed[ed] that permitted by Section 310(b).”’ (Initial De-

cision, para. 176.)

18. As noted above, Seven Hills’ exceptions to the Initial

Decision are pending before the Review Board, which has

stayed the Seven Hills renewal proceeding pending Com-

mission action on the SICC/Bahia settlement.“ Thus, Seven

payment of monies owed by the stations to Azcarraga controlled pro-

gramming distributors, funded the stations’ operations. (Initial Deci-

sion, para. 47 and 161.)

The licensees depend on SIN for 75-90% of their programming.

(Initial Decision, para. 172.) Their network affiliation agreements with

SIN require that they share all revenues, including local sales revenues,

with SIN. (Initial Decision, para. 173.) The ‘“‘Univision sales concept,”

an agreement between SIN, Televisa (a media conglomerate in Mexico)

and SICC, prohibited the stations frorn underselling Televisa on com-

mercials contained in SIN programming. (Initial Decision, paras. 59,

171.) Finally, the station managers, who were chosen by Anselmo,

reported to Anselmo on various matters, including all non-routine mat-

ters. (Initial Decision, paras. 125, 120, 121, 165.)

% Seven Hills Television Co., 2 FCC Red 511 (1987). The Board’s

stay order is not before us, and we express no opinion upon the pro-

priety of the Board’s determination to stay the Seven Hills proceeding.

~—Hewever, to the extent that the Board suggests (2 FCC Red at 512

& n.8) that the “‘residual’’ Seven Hills proceeding could be dismissed

as moot if the SICC/Bahia settlement agreement were approved, we

disagree. As we have explained, we approve the settlement agreement

because we find, inter alia, that it will adequately alleviate any alien

ownership problems that may exist at the SICC/Bahia stations. In this

regard, we rely specifically on the settlement agreement which restricts

the interest that any Bahia/SICC stockholder may have in the buyer

corporations. Because Seven Hills and Rene Anselmo are not parties

to the settlement agreement, there is no comparable assurance that

any alien ownership problems that may exist at Seven Hills’ station

have been resolved. In light of our responsibility to enforce Section

310(bX3) cf the Act, the renewal application for Seven Hills’ Station

KTVW-TV (Phoenix, Arizona) cannot be granted until Seven Hills’ basic

qualifications to continue operating its stations are affirmatively estab-

lished.

8la

Hills’ exceptions are not before us, and it would be pre-

mature for us to address the validity of the ALJ’s con-

clusion that Seven Hills is basically unqualified at this time.

Without considering the merits of the ALJ’s conclusion

that these three licensee corporations, ‘‘as they are pres-

ently structured,’”’ are basically unqualified (Initial Deci-

ston, para. 176), we note, as the Board did, the unique

contribution that these licensees have made to broadcast-

ing over the past 25 years. See SICC, 1 FCC Red at 94.

Indeed, the Commission has, as the Board noted (Recon.

Order, 1 FCC Red 844, para. 8), unconditionally renewed

their licenses for the past 20 years despite the fact that

much of the information giving rise to the de-facto control

issue against these licensees was a matter of public record

throughout that period. See SICC, 5 RR 2d 3, 5-7 (1965),

where the Commission refused to add an alien ownership

issue against a predecessor of SICC based upon allegations

concerning Emilio Azcarraga’s involvement in the appli-

cation for a television station in Paterson, New Jersey;

the fact that the Azcarraga Mexican network would pro-

gram the proposed station; and Anselmo’s involvement with

the Mexican network, the New Jersey applicant, Stations

WMEX and KWEX, and the predecessor of SIN.

19. By considering these factors, however, we do not

mean to ignore our statutory responsibility under Section

310(b) of the Act to prohibit alien control or ownership of

licensees. Neither the licensees’ record nor the Commis-

sion’s routine grant of their renewal applications over the

past 20 years is relevant in determining whether these

stations were under alien control in violation of the stat-

ute. Nor do thes

This text is long and has been trimmed here. Open the source document for the complete record.

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.