Petition for Writ of Certiorari — Federal Broadcasting System, Inc. v. Federal Communications Commission

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| SUPREME COURT. UB : | eG ED: |

‘No. 53Q- pus 29 1969

WOH F.-DAVIS, CLERK.

/ © IN THE

| Supreme Court nf the uited States

— TreRM, 1969

STAR ‘bavanen INc. ; “CoMMUNITY BROADCASTING,

INC. ; CITIZENS TELEVISION Corp.; HERITAGE RapIo

“AND ‘TELEVISION BROADCASTING- Co., Inc.; and MAIn

Bnoapcasrine Co., INc., Petitioners 2

Vv.

THE FEDERAL COMMUNICATIONS COMMISSION and

FLOWER CITY TELEVIgION CORPORATION

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

-

pmiallive P. CoTTONE

JOHN C: ELDRIDGE .

1730 M Street, N.W.

Washington, D.C. 20036 °

; Attorneys for Petitioners

Of Counsel:

Fiy, SHUEBRUK, BLUME & G:AUGINE oH 5

30 Rockefeller Plaza

New York, New York .

WetcH & MorGAN

900 17th Street, N. W.

Washington, D.C. ©

WINER, SCHEINER & GREELEY

1343 H Street, N. W.

Washington, D. C.

Muuuin & Connor ; 7.

805 15th Street, N. W. : :

Washington, D. C. . fie: atm Ee

‘

Press OF BYRON S. ADAMS PRINTING, INC., WASHINGTON, D. C.

Ss

TABLE OF CONTENTS

Page

" Qs TAROT 5 ic Be et vcctnvecevsccqecscsctevetvees 2

Jurisdiction ..... ss “ ee yer rrr ere ee rr 2

Questions Presented~........... ikcvusekeseandes 2

Oe Teeter rere rr 3

IE 5 ng kad cccbscucivinsieedscedene ee 4

' Reasons for Granting the Writ ...............00000. 12

Conclusion ........... ali~es wees sein etee veux ewe ae

Appendix A . sKd gOS bso ee ose ae

Appendix B ..... EF Te ona eR Eee rr pie page 24a

Appendix. C jéneeunds baduewnecadenseesseseerurete 3la

Opinion of the Court Below ............+00eeeeees 3la

Judgment .,.... PNR ROE Y PPP IP or er te 50a

Appendix D ..........++. Piccscedvseastehdvavieanss 5la |

; INDEX TO CITATIONS

CASES:

Channel Assignment in Rochester, New York, 21 R.R.

ROU. Sas stdpsaccarpinnvecersersecusensusaee ts 5

City of Camden, 18 F.C.C. 2d A412 ........cccersvees 19

Flower City Television Corp., 9 F.C.C. 2d 249, 10 R.R.

2d 1059, reconsideration denied 10 P.C.C. 2d 718,

ie tS £:8). sear etree,

15, 18, 20

Hensy v. F.C.C., 302 F. 2d 191 (C.A.D.C.), cert. denied

oY ee oss 17

Integrated Communication Systems, Inc., of Massa-

Gees DB lds, OE GE voc cccncnes Wecterestcsss 17-18

Johnston Broadcasting Co. v. F. C.C., 175 F. 2d 351°: .

(C.A, D. 8 et, Cea tes CR rg onl s cs 17

i "Table of Contents Continued *

‘

Minshall ited Co., 11 F. CC, 92796 ,....:... 19

National Broadcasting Co. v. United States, 319 US. ,

DAE eee eee eer see oy Ih BO

Pinellas Broateasting Co. v. F.C.C., 230 F.-2d 204

(C.A.D.C.), cert. denied 350 U.S. leah ae 17

Plains Radio B oadcasting Co. V. FC. C., 195 F. 2d 359

(C.A.D.C. ) PRE EIRCGS inca iucee ewes ene ox 17, 21

Policy Statement on ranmavetiioe ecniuad Hearings,

1 F.C.C, a 7, 8, 9, 10, 12, 14,

; 15, 16, 17, 18, 19

Radio Station KFH v. F.C.C. ., 247 F. 2d 570 (C. A.D. ¢. ) 21

Red Lion Broadcasting Co., Inc. v. FC.C., — US. —, -

ec cero eepe eves 13, 17

Rollins Broadcasting, i. 2) 8 ee ee eee 17

Vernon Broadcasting Co., 12 F.C.C, 2d 946 «2.0... ee

STATUTES: . vee

ES ete aan . «28

28 U.S.C. 1254 (1) .. 00. reece e eee ee cece erence ceeks 2

OTHER:

Friendly, The Federal Administrative Agencies: The |

"Need for Better Definition of Standards, 75 Harv.

BA BEOU, BOO CHMOD coc cccccccgcccoveccsece 12, 14, 21 «

Landis, Report on. Regulatory Agencies to thé ’Presi-

dent-E lect ; Schwartz, Comparative Television and.

the Chancellor’s Foot, 47 Geo. 1.3. 655 (1959) . . 12, 21

Levin, Regulatory Efficiency, Reform,.and the F. C. e.,

50 Geo. L.J. 1 (1961) - CPC eSeebeeatecek scutes 12

,

; IX THE

* Saja Court of the United States

OctoseR TERM, 1969 : oe elgie

‘No.

? .

* .Star TELEvision, INc.; Comme NITY Brospcastina,

INc. » CITIZENS *TELEV ISION Corp.; HERITAGE RaApIo

AND ‘TELEVISION BroapcastinG Co., Inc.; and Matn

, BroapcastineG Co., Inc. , Petitioners o wg

&

V. ‘ ~

Tarek FEperan COMMUNICATIONS ComMISSION and

. FLOWER CITY TELEVISION CORPORATION

~”

, a

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

Petitioners Star Television, Ine., Community Broad-

casting, Inc., Citizens Television Corp., Heritage Radio

and Television Broadcasting Co., Ine., and Main

Broadeasting Co., Inec., pray that a writ of certiorari

issue to review the judgment of the United States

Cowt of Appeals for the District of Columbia Circuit

in this ease.

?

2

OPINIONS BELOW

The opinions of the Federal Communications Com- |

mission (App. A, infra, pp. 1-23) are reported at 9

F.C.C. 2d 249 and at 10 R. R. 2d 1059.'| The opinions

of the Federal Communications Commission on_peti-

‘tions for reconsideration (App. B, infra, pp. 24-30)

are reported at 10 F.C.C, 2d 718 and at 11.R. R. 2d.771.

The opinions of the court of appeals (App. C, a i

«pp. 32-49) are not yet reported.

&

JURISDICTION

The judgmen#ef the court of appeals (App. C, infra,

p- 50) was entered on January 30, 1969. The order

_ of the court of appeals (App. D, infra, p. 51) denying

petitioners’ -timely filed petitions for rehearing was

entered April 1, 1969. By order of the Chief Justice

entered: on June 20, 1969, and by order of Mr. Justice

Marshall eyitered on July 29, 1969, the time for filing

a petition for a writ of certiorari was extended to and

including August 29, 1969. The jurisdiction of, this

Court is invoked urfder 28 U.S.C. 1254(1).

QUESTIONS PRESENTED

1. Whether the Federal Communications Commis-

sion has, with respect to this &s well as other ecompara-

_ tive licensing proceedings, failed to comply with its

‘statutory mandate by not developing a rational ap-

proach to comparativé cases which it then applies and

adheres to in particular cases ; and specifically, whether

the instant decision was arbitrary and not in accord-

ance with the statute because of the Commission’s un-

explained failure to adhere to the policy standards

1‘ App.’’ refers to the Appendix to this petition. ‘‘R.R.’’ refers

to the volumes of Pike & Fischer Radio Regulation. | é

‘ ee oe

I ad ; “aan . <

. ‘ 7

. ° oe

fy:

_ which the Commission had announced woul apply to

this proceeding. , ;

2. Whether the Federal Communications Commis-

sion’s decision in this case complied’ with the require-

ment of the Administrative Procedure Act, 5 U.S.C. —

597(¢), that all decisions shall include ‘‘the reasons or.

basis’’ for the agency’s findings and conclusions.

t STATUTES INVOLVED

Sections 307(a), 308(a) and 309 (a) of the Communi-

cations Act of 1934, as amended, 47 US.C. 307(a), 308

and 309(a), provide in pertinent part:

307(a). The Commission, if public convenience,

. interest or necessity will be served thereby, subject

--to the limitations of this Act, shall grant to any

‘ applicant therefor a station’ license provided for

by this Act.

308(a). The Commission may * grant construe-

tion permits and station licenses, or modifications ~

or renewals thereof, only upon written application

therefor received by it * * *.

(b). All applications for station licenses, or

modifications or renewals thereof, shall set forth

such facts as the Commission by -regulation may

prescribe-as to the citizenship, character, and fi-

nancial, technical, and other qualifications of the

applicant to operate the station; the ownerhip and

location of the proposed station and of the stations,

if any, with which it is proposed to communicate ;

‘ the frequencies and the power desired to be used;

the hours of the day or other per iods of time dur-

ing which it is proposed to operate the station; the

purposes for which the station is to be used; ‘and

- such other information as it- may require. * _

309(a). Subject to the provisions of this sec-

-stion, the Commission shall determine, in the case

g

4 y

of each application filed with it to which section -

308 applies, whether the. public interest, conven-

-- dence, and necessity will be served by the granting

of such application, and, if thg Commission, upon

examination of such applieation and upon ‘consid-

eration of such other matters as the Commission

may officially notice, shall find that public interest, -

convenience, and necessity would-be served by. the

granting thereof, it shall grant such application.

we. STATEMENT

1. Section 307(a) of the Communications Act Of |

1934 provides that the Federal Communications Com-

mission ‘‘shall grant to any applicant therefor a sta-

tion license provided for by this: Act”’ if such grant

will serve the ‘‘public convenience, interest or neces-

sity.’’ Section 308 of the Act provides for the grant

‘of construction permits and station Wenses and further

provides that applications for such permits and licenses

_ shall contain whatever facts’¢oncerning the character

and financial, technical, and other qualifications of the

application to operate a-station as the Commission may

prescribe. Section 309(a) of the Act reiterates that

* the Commission shall gr applications filed under

Section 308.if it ‘‘shall fin at the public interest.

convenience, and necessity would be served * * *.’’”

However, as this Court pointed out in Nat. Broad-

casting Co. v. United States, 319 U.S. 190, 216-217, the .

statutory criterion of ‘‘public interest, convenience,

and necessity”’ is not limited to the financial and tech-

nical qualifications of: applicants for station permits

and licenses, as such limitation weuld not enable the

Commission to ‘‘choose between two applicants for the

same facilities, each of whom is financially and tech-

nieally qualified to operate?’ a broadcast facility. In-

stead, as this Court went on to hold, ‘‘comparative con-

siderations as to the services to be rendered’? govern

the application of the ‘‘ public interest, convenience or

necessity”’ standard (319 U.S. at 217). The present

case is of this nature, involving several financially and.

technically qualified applicants for ‘a single broadcast

facility, and the issues concern the manner in which

the Commission has applied the governing criterion of

‘‘comparative considerations as to the services to be

rendéred.”?

Z. in 1961, the Federal Communicatioiis Commis-

sion assigned a third VHF television channel, chanitel

13, to Rochester, New York,’ and later the same year

twelve applications for a construction permit for the

new channel were filed, including the appli¢ations of

the five petitioners herein and of the respondent Flower

City Television Corporation (App. 33a).. The applica-.

tions were mutually exclusive, except for two which

- together proposed a share-time operation, on channe!

13 (App. 1, 33)... The Commission designatéd the

applications for a consolidated comparative hearing,

which began in June 1962 and: cual in December 1962

(App. 37).° “

In January 1964, the Commission’s Hearing —

iner filed a 270 page initial decision, in which the

2 Channel dacanmiiet in Rochester, New York, 21 R.R. 1748a.

3.These were the applications of Rochester Area Educational

Television (RAETA) and Rochester Telecasters, Inc: (RTI). Their

proposal was that RAETA would use the channel part of each day

as a non-commercial, educational station while RTI would ‘use it

during the remaining hours as a commercial station affiliated with

the ABC Television “Network. Each of the other ——— also

proposed an ABC affiliation (App. 1%, 37): i

4 Two of the original twelve candidates failed to press their. ap-

plications at the hearing.)

; ; a@

” + 7

~

con

6

cad

Peawier concluded that the share-time applications

of RAETA and-RTI for the construction permit

should be granted because of the need for an eduéa-.

tional broadcast service in the area (App. 1, 37).* The

Examiner’s decision recited the basic facts concerning

each of the ten candidates which had pressed their

applications’ for the channel, such as the residence,

background. and civic activities of the principals, the

extent +o which the stockholders of each wold partici-

pate in station management, etc., and the Examiner !

fourd that éach of these applicants was technically

and financially qualified. The Examiner ‘also “made

“ultimate findings and conclusions comparing. the suec-

cessful share-time applicants (RAETA and RTI) with —

the other eight applicants as to various comparative .

criteria, denominated . by the Examiner as: ‘‘area fa-

miliarity’’; ‘‘integration oFwownership and manage-

ment’’; ‘‘broadeast experience’ ’.. «diversification of

eontrot of mass media of communications” ; , past per-

_ formance records”’ ; “preparation” ; ‘‘nrograms’’; and

“other matters’? (9 F.C.C. 2d 521-532). _ The Exari-

iner, however, made no findings or conclusions compar-

ing the eight unsuccessful contesting applicants with

each other with respect to these criteria or comparing

~ their qualifications ,in oad other — (App. 37; ian

F.C.C. 2d 521-532).

iner’s decision and oral argument before the Commis-

sion, the Commission in May 1965 remanded the pro- ..

ceeding for a farther hearing so ghat_ more evidence

could be adduced on certain questions (App. 2, 37-38).

5 The Hearing Examiner’ S decision is — at 9 F.C. C. 2d

264-534. . ex pos

e gree

After the filing of exceptions to the Hearing Pica. |

Before the second hearing was held, two events oc- °°

a

7 Sie

curred. First, the Oxemieion in J eis 1965 promul-

gated (with some dissent) a Policy Statement on Com-. -

parative Broadcast Hearings, 1 F.C.C..2d 393, in w vhich

the Commission formally set forth the criteria which

pur portedly would govern comparative proceedings

(App. -38). The criteria were divided: into the seven

categories called: Diversification and Control of Media

of Mass ‘Communications; Full-Time ‘Participation in

Station Operation by Owners; Proposed Program

Service; Past Broadcast Record; Efficient Use of

Frequency ; Charicter; and Other Factors (App. 39;

1 F.C.C.'2d 394-399).° The Commission stated that the

Policy Statement would be applied to hia St cases

(App. 3; 1 F. CC. ‘2d 399-400).

The second oven which oceurred after the re-

‘mand order in this ease, was ‘the voluntary with-

Pa

drawal of the-successful applicant RAETA (App. 3,

38). RAETA then applied for and is now operating

a full-time UHF educational station in Rochester

(App. 3, 38). , elie, : a

. The Commission, stating that’in view of the Policy

Statement and the withdrawal of RAETA’s applica-

tion no useful purpose would be. served by a second

hearing, in April 1966 set aside its remand order (App.

s

6 These criteria had for the most part been previously enunciated

by the’Commission in deciding cases; and the Policy Statement was

; largely a formal restatement of old criteria. However,,the Policy

os

Statement did represent some revision of prior "pronouncements.

Under the Policy Statement, such factors as ‘‘ previous broadcast

experience’’. and ‘‘local residence’” of owners, were deemed mere

aspets of the criterion ‘‘Full-Time Participation in Station Op-

eratif, by Owners,’’-whereas prior to that time they had been

regarded. separately. In addition, the Policy Statement changed.

ostensible Commission policies as to the weight to be given certain

" eriteria.

/

_

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}

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S

4)3 More than a year later further oral argument was

held before the Commission, and in August 1967 the’

-. Commission rendered a 3-2 decisign awarding the chan-.

nel to the respondent Flower City Television Corpora-

“tion (Flower) (App. 1-23).

In making its award, the Commission purported to

. apply its recently promulgated Policy Statement.

With respect to the first comparative criteria listed

in the Policy Statement, denominated ‘Diversification

of Control of the Media of Mass Communications,’’

the Commission found that’ only one applicant, The

Federal Broadcasting System, Ine., should be given

a disqualifying demerit because of its ownership and

its 100 percent stockholder’s ownership of other broad-

cast facilities in the Rochester area (App. 8- 9).7 The

Commission in its, opinion further stated that, apart

from the ‘‘Diversification’’ factor, only two other im-

portant criteria, were involvéd in this case, namely

‘*Participation in Station Operation by Owners”’ and

‘‘Past Broadeast Record’? (App: 18). As to the latter

criterion, the Commission found that the only appli-

‘eant entitled to'a preference because of a past broad-

cast record was the petitioner Community Broadcast-

8

ing, Ine. (App. 11).* | This was because one of Com-

7 Federal has filed a separate tition for a writ of certiorari,

challenging the court of appéals’ affirmance of the Commission’s

decision.

- 8The Commission in its Policy Statement defined ‘‘Past Broad-

cast Record”’ as ‘‘ past ownership interests and significant participa-

tion in a broadcast station by one with an ownership .interest in

the applicant. It is a factor of substantial importance * * *.”’

1 F.C.C. 2d at 398. This factor should be distinguished from the

phrase ‘‘broadcast experience’’ as used in the Commission’s jargon.

‘ When the Commission regards an owner of an applicant as having

‘broadcast experience,’’ it does not require that the past experience

be also as an owner. ‘

Je Y

*

4

+

7

munity’ S$ owners, who would be active i. a full-time

supervisory capacity i in Community’ S praposed station,

_ had earlier been a fifty percent stockholder and gen-

eral manager of a Rochester station’ which, during his.

tenure there, had a ‘commendable record of perform-

ance’’ (App. 11-12).

-Turning to the remaining criterion which it deemed

to be involved in this case, the Cominission had earlier

said in its Policy Statement that ‘Full-Time Partici-

pation in Station Operation by Owners” was a factor

ss: ‘substantial’ importance; that the Commission was

‘‘primarily interested in full-time’’, participation; that

attributes of participating owners such as their experi-

--ence and local residence will be considered but that

prior experience is.‘‘not so significant as local resi-

dence” (1 F.C.C. 2d. at 395-396).. Despite these policy

pronouncements that were purportedly applicable to

this case, and despite the facts that Flower pr oposed

Jess full-time participation by owners than four of

the five petitioners, that Flower had a smaller per-.

centage of loeal residency among its stockholders than

a majority of petitioners, and that Flower had a-.

- smaller percentage of owners with prior br oadcast

experience than a majority of the petitioners, the Com-

nussion awarded the channel to Flower on the ground

that Flower stood higher than any of the petitioners | °

on the criterion of ‘Full-Time Participation in Station

Operation by Owners’’ (App. 9-10, 13-14; see also 9

F.C.C. 2d at 266-355 for the Exaniiner’s p Radius on °

these matters): The only reason given for the Com-

mission’s conclusion that Flower out-ranked petition-

ers on this ground, was: the statement that ‘Flower

ranks the highest, in view of the broad bro oadeasting,

and particularly television experience of G. Bennett —

di | 10

Larson [a ten percent stockholder in Flower], and of

the somewhat lesser broadcast experience of Gordon

Auchineloss II [an 8.33 pereent stockholder in

* Flower]’’ (App. 9-10). There were no findings what-

_ ever comparing the experience of these persons to the

experience of petitioners’ principals or explaining why

such experience may have been better (App. 9-10).

Moreover, as pointed out above, the Commission’s

Policy Statement had relegated previous broadcast ex-

perience to a secondary role under the criteria ‘ Full-

Time Participation in Station Operation by Owners’’

(1 F.C.C. 2d at 396), and one of the petitioners had

heen given a credit for a **commendable”’ past broad-

cast record ( App. 11-12).

Finally, the Commission in this case not only desig-

nated an issue éalling for a comparison of the various

program proposals, but also inserted a special issue as

to whether there are kinds of progr amming for which

there is an ‘‘unfulfilled need’’ in the Rochester area

and the extent to which each applicant ‘‘would meet

such needs.” (9 F.C.C. 2d at 265, paragraph 6(d)).

The Commission in its decision stated that the with-

drawal of RAETA’s application rendered this issue

‘‘moot.”’ . (App. 4a).

Two Commissioners dissented from the decision,

with Commissioner Bartley stating that he would have

awarded the channel to Federal (App, 19-21) and Com-

missioner Johnson expressing a preference for Com-

munity (App. 21-23). The basic thrust of’ *Commis-

sioner Johnson’s dissent, however, was that the Com-

* This occurred despite the fact that questions had been raised

on the record concerning serious deficiencies in Flower’s program

planning. Admittedly, Flower had prepared its proposed program

proposals prior to conducting any study, survey or investigation

of community needs. RAETA’s application obviously had nothing

whatever to do with such deficiencies.

11

mission’s present comparative hearing process ‘‘is a

thoroughly unsatisfactory way to award valuable

broadeast properties’? and that ‘*{njo better example

could be chosen to demoustrate this than the case which

the Commission decides today’? (App. 21). His dis-

sent went on to refer to the ‘‘intolerable’’ delay accom-

panying the comparative process and the fact that ‘the

extraordinary marathon conducted by the Commission

and the applicants has produced no more satisfactory

result than would a drawing from a hat”’ (App. 21-22).

After the Commission denied petitiéns for reconsid-

eration (App. 24-30), a divided court of appeals in

January 1969 affirmed the Commission’s decision

(App. 32-49). The majority decision, while acknow]l-

_ edging that the Commission’s reasoning ‘‘may be a bit

circuitous”? (App. 34), nevertheless believed that its

reading of the Hearing Examiner’s basic findings re-

specting the broadcast experience of the various appli-

cants’ owner-managers showed the reason for the Com-

mission’s decision (App. 35). Judge Leventhal di

m1. dings

and conclusions failed to reveal why it selected Flower .

(App. 37-49). The dissenting opinion pointed up the

problem of the Commission’s basie approach to com-

parative cases, raising the questions of whether the

Commission can develop meaningful reasons for select-

ing one of several qualified applicants for a single fa-

cility, whether the-Commission should rely on intui-

tion, whether after narrowing down the field to the

reasonably qualified applicants it should conduct **run-

off’’ proceedings, or whether a lottery should be used —

(App. 47-48). Judge Leventhal concluded that where,

as here, the Commission ‘‘purported to act in terms of

reason,”’ a reviewing court should be able to ascertain

the reasoning (App. 48).

“ 12°

REASONS FOR GRANTING THE WRIT

The decisions below present three important and

related matters of federal administrative law under

- the Communications Act of 1934, which have been re-

curring over the years, and which have not been, but

should be, considered by this Court: The first of these

is the Federal Communications Commissiou’s . failure

to develop a rational appr oach to comparative licens-

ing proceedings which it then applies to specific eases

with some degree of consistency. This issue is high-

lighted by the instant case, for the Commission pr omul-

gated a “Policy Statement” for comparative cases dur-

ing the pendency of this proceeding, purported to apply

that Policy Statement to this ‘case, but instead com-

pletely departed from the Policy Statement in its deci-

sion. This inability of the Commission to develop some

consistently applied rationale in comparative broad-

east proceedings has been dealt with by commentators :

over the years;"* it is certainly a matter that is ripe for

consideration by this Court. The second matter pre-

sented by this case is the total absence of satisfactory

reasog& given by the Commission for its decision. The

plain age ofthe Administrative Procedure Act,

as well as the decisions of the courts, require that the

‘‘reasons or basis’’ for an administrative agency’s con-

clusions be given by the agency. However, as Judge

Leventhal noted in his dissent below, ‘‘the Commis-

-sion’s reasons for preferring Flower are neither ‘obvi-

ous-nor ‘discernible’ * * *’? (App. 43). The failure of

1 See, e.g., Friendly, The Federal Administrative Agencies:

The Need For Better Definition of Standards, 75 Harv. L. Rev.

1055 (1962); Levin, Regulatory Efficiency, Reform and the FCC,

50 Geo. LJ. 1 (1961); Landis, Report_on Regulatory Agencies to

the President-Elect; Schwartz, Comparative .Television and the

Chanecllor’s Foot, 47 Geo. L.J. 655 (1959).

13

the court of appeals to insist that the Commission

articulate reasons for its decision negates the —_— of

Judicial review in comparative licensing ca Of

particular concern is the refusal of the Cumaiiios

even to consider substantial evidence as-to:the “un-

fulfilled needs’”’ of the Rochester area for partieular

kinds of programming, although it designated a special

issue in the hearing calling for such an inquiry.

1.. This Court has several times emphasized: that the

statutory standard of ‘‘public interest, convenience or

necessity’? which the FCC must use in determining

“which of several competing: applicants should he-

‘awarded a license to use a single broadcast facility, is

a broad standard. Congress did not prescribe more

specific guidelines but vested in the Commission the

duty and authority to develop a rational method for

carrying out the statutory standard. Nat. Broadcast-

ing Co. v. United States, 319 U.S. 190, 219: Red Lion

Broadcasting Co., Ine. vy. Federal Communications

Commission, .... U.S. ..,37 L.W. 4509, 4513. Con-

sequently, we assume for present purposes that the

Commission could have chosen to utilize various bases:

in deciding which applicant should receive a particular

hroadeast license. Perhaps after narrowing a group

of applicants to those techinieally and financially quali-

fied to operate a facility, and who could he expected to

operate it in the publie interest, the Commission could

select the winner by lot, or by intuition, or employ a

bid system. Such possibilities were suggested by the

dissenting opinions below and have been recommended

hy eritfes of the comparative process.

Neverthelss, the Commission has at no time expressly

adopted any of the above-mentioned methods for’ re-

solving comparative cases. Instead, it has-purported

oT ee

to apply several specified criteria to the qualified appli-

eants for a broadcast facility in order to determine

which one is the best qualified to operate it in the public

interest. The criteria, andthe manner of applying

them, are now embodied in the Commission’s Policy

Statement. However, as an examination of the deci-

sion in the instant case demonstrates, the Commission

in fact appears to employ intuition or something other

“than the announced basis for selecting the licensee. The

present decision is flatly inconsistent with .the an-

nounced principles.~ Thus, the vice of the FCC’s com- _

parative: process is not the Commission’s failure to \

promulgate a presumably rational basis for deciding

comparative cases ; instead, the Commission’s breach of

its statutory duty stems from its failure to promulgate

a rational basis for comparative cases which it in fact

applies and adheres to in particular cases."* :

11 Petitioners do not suggest that the Commission cannot periodi-

eally makeschanges in_ its declared policies, either by subsequent

policy statements or in the course of the decisional process: How-

ever, petitioners do maintain that the Commission cannot, ton-

sistent with its statutory duty, change a particular policy while

purporting to apply that policy and without ‘yiving any explana-

tion for its inconsistency. The point was made by Judge Friendly

who, after reviewing severat FCC comparative cases in which the

Commission changed its position with respect to certain criteria, :

went on to say: Sr

‘‘What gives concern is the manner, alas not atypical of the

agencies, in which this change was made—slipped into an

opinion in such a way that only careful readers would even

know what had happened, without articulation of reasons,

and with the prior authorities not. overruled’ so that the *

opinion writers remain free to: pull them out of the drawer

whenever the agency wishes to reach a result supportable by

the old rule but not the new.’’

Friendly, The Federal Administrative ‘Agencies: The Need For

Better Definition of Standards, 75 Harv. L. Rev. 1055, 1064 (1962). _

¢

i

- 7

15

The FCC’s departure in this case from its Policy

Statement, is manifest. For example, the second listed

criterion in the Policy Statement (and the criterion

which the Commission invoked as the ground for

warding the channel-to Flower) was ‘‘ Full-Time Par-

ticipation in Station Operation by Owners,”’ 1 F.C.C.

2d at 395. Persons holding only 18.33 percent of

Flower’s stock intended to devote full-time. to ag

tion. However, with respect to the petitioners in

Broadeasting Co., Inc. (Main), Star Television, Ine.

(Star), Community Broadcasting; Inc. (Community),

-and Citizens Television Corp. (Citizens), the percent- °

ages are, respectively, 50 percent,:37 percent, 29 per-

cent and 23 percent (9 F.C.C. 2d at 252-253, 266-339). .

In the Policy Statement under this same “Participa-

tion’’ criterion, the Commission also indicated that (1)

it would look to see if the participating owners had

positions of responsibility in the station, (2) it would

give preferential consideration to local residence of

owners, and (3) it would consider the previous broad-

east experience of owners, although ‘‘[p]revious

_broadeast experience [is] not so significant. as local

residence”? (1 F.C.C.- 2d at- 395-396). . With respect .

to the first factor,-all of the petitioners as well as °

Flower contemplated. high- level positions for the

_ participating owners, (9 F.C.C. 2d 266-339). ‘As to

local residency of: participating owners, Flower |

was excelled by a majority, of the petitioners re-

gardless of whether only full -time participation or

both’ full and part-time are looked to (Jbid.). Her-

itage, for example, with substantial part-time par-

ticipation, exceeded Flower in resident ownership by

community leaders. Regarding the previous broad-

east experience of participating owners, the owner-

managers of Flower owned 18.33 percent of its ‘stock

- ee

- whereas the owher-managers of petitioner Star held

37 percent, of petitioner Community 29 percent; and of

petitioner ‘Citizens 23 percent ([bid.), It is also notes

worthy that among the five petitioners’and.the respond-

ent. Flower, the only applicants with full-time owner-

participants having ‘a present residence or area fa-

iniliarity with the Rochester area were petitioners Star, -

Citizens, Community and Main, and ‘the only appli-

eants with such owner-participants who had prior

broadeast experience were > petitioners Star, Citizens

and Community (J bid.).

It is obyious that in making the award to Mower

on the ground of.the owner -participation criterion, the

FCC gr ossly departed from its Policy Statement. -By

relying on the bald eonelusion that: it preferred the

experience. of Flower’s two participants owning only

18.33 percent of the stock (for some unexplained vea-

son), the Commission ignored its previous announce-

ment indicating that the primary aspect of the criteria

is the degree of participation in the station by owners,

_ and that, of the secondary aspects, pr ‘evious experience

~ is much less.important than local resideney (1 F.C.C.,

2d at 395-396). ~The Commission also ignored the fact

that among all applicants, the ‘only one to receive a

credit by the Commission for a commendable past

-broadeast record was one of the petitioners, (App. 11-

12). en |

In refusing to consider showings of the existence. of *

‘unfulfilled needs’ for particular kinds of programs ¢

and the proposals of the applicants to fill those ngeds,

the Commission went even further. This refusal is

not only another example of the FCC’s purporting to

“announce a particuJar policy or criterion applicable to |

: comparative pr oceedings and then acting in oye dis-

a 17 Q

regard of that policy, but the Commission ‘action is'in-

‘consistent with the ‘‘public interest’ standard govern-

ing its actions, and, in this case, a violation of the due ‘i

process requirement for a ‘‘fair hearing.” It has long

been settled that the proposed programming of compet-

ing applicants for a broadcast facility is an essential

ingredient of any system to select the applicant best

- able to operate in the public interest. Just last term

in Red Lion Broadcasting Co: v. Federak Communica-

tions Commission, . ccs a , 37 L.W, 4509, 4517,

this Court stated: “Tn applying this’ standard [of pub-

lie conveniencé, interest or necessity] the Commission

for forty years has been choosing licensees based in

part on their etre proposals. > See also. e.y., Henry

v. F.C.C.,'302 F. 2d 191-(C.A.D.C.), certiorari denied

371 U.S. 821; Pinellas Broadcasting Co. v. Federal

Corimunications Com’n, .230 F. 2d 204: (C.A.D.€.).

certiorari denied, 350 U.S. 1007; Johnston Broadcast-

ing Co. Vv. Federal Communications. Com’n, 175 F. 2d

351, 358-359. (C.A.D.C.). The courts have. reversed the

Commission in comparative cases because of the lack

of findings upon the applicants’ program proposals,

€.g., Plains Radio Broadcasting Co. v. Federal Commu-

nications Com’n, 175 F. 2d 359, 362-363 (C.A.D.C.). In

‘its Policy Statement, the third listed of the criteria was

‘*Proposed Program rviee,’’ with. the Commission

saying that ‘decisional Significance will be acecorded”’

to substantial differences. in the applicants’ proposed

program plans (1 F.C.C. 2d at 397). Moreover, the

. Commission has a policy of inquir ing, m sniparelive

heari ings, whether there are presently any ‘unfulfilled

. needs’’ in the area to be served and the extent to which

the applicants can meet-such needs, Rollins Broadcast-

tng, Ine., 20 Pike and Fischer R. R. 976, 978 (F.C. ie

+ 1960); I tegrated ¢ Comm unication Systems, Ing. 0

e ‘

&

areata: 18

M assach usetts; 3 ac and Fischer R.R. 2d 557 cw. C. C.

1964). Accordingly, in its designation of the applica-

- tions in the present case for.a compar ative hearing, the —

FCC listed as two separate issues (1) ‘‘the program-

ming service ‘proposed i in each”’ of the applications and

. <2): the pr ogr amming service in each. application con-

sidered in light of the types of programs for which

-there are unfulfilled needs in the area and the extent

to which each applicant’s proposals would meet such

needs (9 F.C.C.2d at 265). The seveyal applicants con- °

sequently devoted a. considérable amount of timesand

effort at the hearing on the matter of prografiiming,

and the:Hearing Examiner’s basic findings relating

to the programming issues take up one hundred and

fifty-four pages of the infitial decision (9 F.C.C. 2d at

354-508)... Moreover, one or more of the petitioners, —

had conducted comprehensive surveys. of the program-

ming needs of the: Rochester area would be served,

introduced evidence showing that there were cértain

“unfulfilled needs’’ for live discussion, news, educa-

tional; and other programs, and made detailed pro-

gramming proposals which were geared to meet such

needs, including a wide variety and Jarge number of

live discussion, news, and educational programs ( 9

F.C.C. 2d at 371).

_. Inspite of the court dscisions that pr ogrammfing is

asvital ingredient of the ‘public interest”’ standard

which the Commission. is charged with effectuating,

the Policy Statement, the effort of the applicants and -

the Hearing Examiner’s findings on programming, the

Commission in its decision stated somewhat incredibly

that its designation of programming proposals among

~ the issues Was prompted by the. presence of RAETA

and that the withdr owas of RAET A’s application ren-

|

t

dered the matter moot (App. 4, footnote 3). Nowhere’

previously, either in past decisions or in the Policy

Statement or ip the designation of issues for this case

can any hint be" found that proposed programming

service is relevant only where one of the applicants

proposes an educational broadeast facility.”

The inconsistencies between the Commission’s Poli icy

Statement and the decision in the case at bar could be

dealt with in more detail. Nevertheless, the above-

summary sufficiently reveals the Commission’s pre-

pensity for purporting to apply certain policies to com-

parative cases while at the ‘same time failing to adhere

to those poliéies. 3 ?

.. Closely related tio. the Commission’s inability te

ie a rational and consistently applied policy to

comparative proceedings, is its utter failure to give

reasons or explanations for particular decisions. The

vice of: departing from an announced policy is coni-

pounded when done without any satisfactory reasons

being given. In this case, as emphasized by Judge

Leventhal dissenting below, absolutely no reasons w ere

given by the Commission for preferring the prior

broadeast experience of Flower’ sowner-managers over

-that of petitioners’ owner-managers. The reader of

the Commission’s opinion has no idea whether the

- Commission believed such experience to, be quantita-

tively better, or whether ¢t thought that such experience

7 7 many cases acted on during’ the pendency of the’ instant

vase the Commission has included disqualifying programming

issues and in some, it has disqualified applicants whose program

planning was less deficient than was Flower’s. City of Camden,

18 F.C.C. 2d 412 (1969); Minshall Broadcasting Co., 11 F.C.C. 2d

796 (1968) ; Vernon Broadcasting Co.. 12 F.C.C. 2d 946 » (1968).

&

@

sy

. 20

~

G&S

~

was qualitively better, or if either, for what reasons.

‘The’ Commission said only that the experience of

Flower’s owner-managers was ‘‘broad’’ (App. 10).

But the experience of the owner-managers of several

of. the petitioners was similarly ‘‘broad”’. The Com-

mission’s opinion contains utterly no explanation of

why Mr. Larson of Flower had any broader or supe-

rior broadcasting experience than Messrs. Greene and

Hanna of Community or Messrs. Fay and Fraiberg

of Citizens or Mr. Forman of Star.”

Moreover, even if the Commission had explained why

Flower’s principals had broader experience, it made

no findings that Flower’s principals were likely to be

more seusitive to Rochester’s needs and interests, or

‘more likely to effectuate Flower’s program proposals,

or, in short, more likely to operate the station in the

public interest-to a greater extent than any other appli-

eant. In addition, the Commission gave no satisfactory

explanation for its disregard or de-emphasis of other —

factors as to which Flower was out- ranked by other

applicants, such as programming proposals, local resi-

dence of owners, the percentage of ownership partici-

pating in station operation, past broadcast records,

ete. While Congress gave the Commission a great deal

of discretion, it did not, as noted by this Court in Nat.

Broadcasting Co. v.. United States, supra, 319 U.S. at

996, ‘authorize the Commission to choose among appli-

‘ants upon the basis of their political, economic or

social views, or upon any other capricious basis.’

13The very broad experience of Citizens’ and Community’s

owner-managers is summarizéd by the dissent below (App. 40-41).

The experience of the above-mentioned persons is set forth in

more detail in 9 F.C.C. 2d at 285-286, 295-301, and 322-325.

; 21

neta \

When the Commission fails to delineate the basis for its

choice, it is impossible for a reviewing court to deter-

mine whether some such capricious basis is being used

or not, or whether the publi¢ interest is being served.

Sound administration of the Communications Act of

1934, as well as the specific requirements of the Ad-

ministrative Procedure Act," dictate that the courts

require the FCC to give reasons or explanations for its

eonelusions.”

3. The FCC’s Sitare to develop a consistently ap-

ee policy for comparative cases, as well as it fail-

ire to give reasons for its action, have been -ecurring

Soe. For example, Judge Friondly - afte review-

ing several FCC decisions in comparative casés, ob-

served : ‘Such inconsistency is intolerable.” Friendly,

The Federal Administrative Agencies: The Need For

Better Definition of Standards, 75 Harv. L2Rev. 1055,

1067 (1962). Professor Schwartz has pointed out that

the Commission’s inconsistency in comparative cases

has ‘‘been so striking as to lead some to w onder whether

Commission decisions have re ally been governed by any

defined ‘standards.”’ Schwartz, Comparative Television

and the Chancellor’s Foot, 47 Geo. L. J. 695, 679 (1959).

Similar criticisms of the Commission’s inconsistency

have been legion. Likewise, the absence of reasons or

findings in Commission opinions have led to reversals”

by the courts. See, e.g., Plains Radio Broadcasting

Co. v. Federal Communications Com’n, 175 F. 2d 359

(C.A.D.C.); Radio Station KFH vy. Federal Com-

munications Com’n, 247 F. 2d 570 (C.A.D.C. n |

45 US. C. 557(e).

15 Absent rigid judicial insistence upon the Commission’s articu-

lation of clear reasons and explanations for its conclusions in

adjudicatory cases, there is danger of recurrence of the ‘*influence”’

scandals of the 1950’s. .

a

“~

-

a5

bd — ht

While this Court has previously commented upon

the comparative process? in broadeast cases, it has not

specifically dealt with the matters directly presented

by this case, namely the Conmission’s failure to. eon-

sistently apply some rational standards and its failure

to articulate reasons for its decisions. Furthermore,

the criticisms by commentators and the reversals by

the Court of Appeals for the District of Columbia Cir-

euit have not corrected the FCC’s failure to carry out

properly its statutory mandate in these respects. The

time is now ripe for the exercise of the Court’s super-

visory power, and this case is.a particularly appro-

priate vehicle

|

rey

16 In addition to presenting both important issues, ‘the instant

case is appropriate for review by this Court in another respect.

The long delays accompanying the FCC’s comparative decisional

_ process have been called ‘‘intolerable’’ (App. 21, dissenting opinion

of Commissioner Johnson below), and where there is a need for

a broadeast facility, the- public obviously suffers from such delay.

However, in the present case, further delay will not affect the

public interest because an interim corporation is bgoadcasting on

channel 13 in Rochester, made up of competing applicants who

are jointly managing the station (App. 49, footnote 24). As

Judge Leventhal below observed, this particular interim arrange-—

ment is working well and ‘‘the effort is flourishing’’ (App. 49,

footnote 4). Pursuant to orders of the court below, this interim

operation will continue until the disposition of this ease. Con-

sequently, the public in this instance is being served despite the

delay in selecting a licensee. ‘_

of . : ’

=»

= ope

cl ‘

CON CLUSION

Because this case involves recurring questions of ex-

ceptional importance in relation to the criteria em-

ployed and the procedures utilized by the FCC in com-

parative, hearings, this petition for a writ of certiorari

‘ should be granted.

_- Respectfully submitted,

os . . Benepicr P. Corrons,

te JoHN C. ELpRIncE,

Attorneys for Petitioners

Of Counsel: |

Fry, SHUEBRUK, BLUME & GAUGINE

Wetcu. & Moraan |

WILNER, SCHEINER & GREELEY |

MULLIN & CONNOR

o

August 1969 |