Courier Post Pub. Co. v. Federal Communications CommissionCourier Post Pub. Co. v. Federal Communications Commission
This is an appeal from a decision by the Federal Communications Commission, denying the application of appellant, The Courier Post Publishing Company, a Missouri corporation, for a permit to construct a new radio broadcasting station at Hannibal, Missouri, to operate on a frequency of 1310 kcs. with power of 250 watts daytime and 100 watts nighttime.
The applications of appellant and the Hannibal Broadcasting Company, for somewhat similar facilities, were heard before an examiner; the intervener, The .Illinois Broadcasting Corporation, operating station WTAD, at Quincy, Ill., participating. The examiner recommended that the application of the Hannibal Broadcasting Company be denied, and that the application of the appellant be granted with power of 100 watts, unlimited time. Oral argument was had before the Commission, which entered its final order denying both applications. The Courier Post Publishing Company is here on appeal.
The statute defining the duty of the Commission in issuing radio construction permits is section 307, Communications Act of 1934, 47 U.S.C.A. § 307, which provides, in part as follows:
“(a) The Commission, if public convenience, interest, or necessity will be served thereby, subject to the limitations of this chapter, shall grant to any applicant therefor a station license provided for by this chapter. ■
“(b) In considering applications for licenses, and modifications and renewals thereof, when and insofar as there is demand for the same, the Commission shall make such distribution of licenses, frequencies, hours of operation, and of power among the several States and communities as to provide a fair, efficient, and equitable distribution of radio service to each of the same.”
Section 402(e) of the Communications Act of 1934, 47 U.S.C.A. 402(e), provides in part: “That the review by the court shall be limited to questions of law and that findings of fact by the Commission, if supported by substantial evidence, shall be conclusive unless it shall clearly appear that the findings of the Commission are arbitrary or capricious.”
The facts upon which the Commission based its decision include the following: Hannibal has a population of 22,761 (1930 census); it is the seventh city in Missouri in size and fourth in industrial importance. There are 63 factories with annual output of more than $21,000,000; one employing some 3300 persons; another normally more than 500 persons. It has 34 wholesale and 333 retail establishments. Hannibal' La Grange College is located there. Enrollment of public schools exceeds 4,200; three parochial schools have a registration of about 600. There are 39 churches. There are three newspapers, a daily published by the appellant with a circulation in excess of 7,500, principally within a radius of fifty miles. The other two are weeklies, one wholly devoted to labor union matters and the other entirely to negroes'. 27 weekly papers are published in surrounding towns, but are not substantial competitors with the appellant’s paper in circulation or advertising. The total assets of appellant, as of October 31, 1936, were $176,840, exclusive of good will and circulation structure, and its liabilities were $3,355. At least $80,000 is spent annually in Hannibal on advertising, of which $60,000 to $70,000 is of local origin. Three banks are located there with combined deposits of $5,844,000 and six building and loan associations with resources of more than $4,000,000. It is served with three trunk line railroads, two U. S. highways, and water transportation on the Mississippi River. It is the center of a rural trading area having a population of 100.000, the largest town within that area having a population of less than 4,000. We shall set
The Commission in denying appellant’s application found that “applicant is legally, technically, financially, and otherwise qualified as an applicant for a construction permit to erect a local broadcast station of the kind and class applied for herein”; that “on the question of public need for the service which these applicants propose to render, we note that Hannibal now receives primary broadcast service from three stations one of which broadcasts programs originated by residents of Hannibal, and that it also receives secondary service from a number of stations. We are, therefore, unable to find, upon the record before us, that a public need of such nature exists in Hannibal for a local broadcast station as would justify a grant of * * * [appellant’s] application^]”: and, that the public interest, convenience, and necessity will not be served by granting appellant’s application. Whereupon, it entered its final order denying it.
The burden of proof is upon the appellant to show that the granting of its application would serve public convenience, interest or necessity. 1 Though it sustains the burden, the order of the Commission denying the application must not be disturbed unless there be error in law. The Commission’s findings of fact upon which the order rests are conclusive, if supported by substantial evidence, unless it clearly appears that such findings are arbitrary or capricious. 2
Appellant assigns as error the finding that there is not a public need in Hannibal for a local broadcasting station. It is the contention of the Commission that the appellant has failed to show such need for a local broadcasting station as would justify the granting of its application, for the reason that (1) Hannibal receives satisfactory programs from other stations, (a) clear channel net-work stations, and (b) a regional station, WTAD, operating from Quincy; and (2) there is no demand shown by the merchants of Hannibal for this service. Appellant’s second assignment is that the Commission erred in refusing to apply the same standards as adopted and applied in similar cases theretofore decided by it.
By reason of its regulatory and supervisory functions under the Act (48 Stat. 1064,47 U.S.C.A. § 151 et seq.), the Commission has provided for four classes of radio stations. These are clear channel, high power regional, regional, and local. Appellant applied for, and predicated its entire case upon the need of, a local station, as distinguished from any other type of station. The regulations of the Commission define a local station to be one licensed to operate with other stations assigned to the same frequency designated for such use, and with an authorized power of 100 watts at night and not more than 250 watts during daytime. The Commission has defined a local station to be one which will serve “to present programs of local interest to the residents of that community; to utilize and develop local entertainment talent which the record indicates is available; to serve local, religious, educational, civic, patriotic, and other organizations; to broadcast local news; and .to generally provide a means of local public expression and a local broadcast service to listeners in that area.” Okmulgee Broadcasting Corporation,
The testimony of the Commission’s engineer is the only evidence that we find in the record speaking to the radio service afforded Hannibal and vicinity by any station other than WTAD. . His testimony is not contradicted and is: That KMOX at St. Louis, 94 miles away, renders a satisfactory service for the residential p'ortion of Hannibal, and the surrounding rural area. It is the only station that serves such area day and night. KSD at St. Louis serves the residential portion of Hannibal and the rural area during the daytime. Each of these stations is a clear channel, net-work station. Station WEW, which operates in the St. Louis area daytime only, provides satisfactory rural service, as does station WCAZ, at Carthage, Ill., 50 miles distant, daytime only, and station WHO, Des Moines, Iowa, 170 miles from Hannibal, unlimited time. (Italics supplied). In addition to these stations, there is secondary service of an intermittent nature available from various distant clear channel stations at night.
None of these stations provide for the local needs of Hannibal; none of. them serve the needs, of the business district of Hannibal; and, none are local stations. KMOX, a clear channel, net-work station, is the only unlimited time station serving the residential section of Hannibal. It thus appears that unless the' service given by WTAD supports the finding in this respect, there is no support in the- record.
The Commission’s engineer testified that the best radio broadcast service now available to the area sought to be served by the appellant is from a regional station, WTAD, located at Quincy, Ill., 17 miles distant. It operates with power of 1 kw., daytime only, and gives satisfactory service throughout all the residential area of Hannibal and rural vicinity, but might be subject to some interference in the business district. The WTAD signal in the Hannibal area, when operating with 1 kw., would be something more than 5 mv/m. In a business district of a city at least 10 mv/m is necessary for interference-free service. The business district is therefore excluded. It occurs to us that the business district is also entitled to receive radio 'service, and that both sections are entitled to night service. The examiner found that WTAD provided services of a local character to Hannibal and; vicinity "incidentally only and not primarily,” ; and further that “This, obviously, does not meet all the requirements for radio-broadcasting in this community.”
The affirmative evidence is overwhelming that there is need for a local station in Hannibal and that WTAD does not fill this public need. The only evidence in the record tending to show that station WTAD’ does so serve Hannibal and vicinity is that given by its manager. We have examined his testimony very carefully and find no-substantial evidence therein to support the contention of appellee that WTAD serves-as a local radio broadcasting outlet for Hannibal, or that it serves the need of the Hannibal merchants and manufacturers as a. local advertising medium, and we hold that 'his testimony does not support the findings-of the Commission- that there is no public-need for a local station. The instances of isolated local service referred to in his testimony are not substantial evidence which controverts the showing of public need of Hannibal for a local station. These instances are the aid in arresting a bank robber in 1934 (the robbery occurred in Girard, Ill.); the broadcasting for the Mark. Twain Centennial celebration in 1935; the-occasional use of its facilities by a Hannibal!
The final action of the Commission was taken upon the whole record, including the examiner’s report and exceptions thereto. Among other things, the examiner found: “There is need for a broadcast station in Hannibal, Missouri, and listeners in this area are definitely entitled to service of local interest”; that operating with power of 250 watts until local sunset would cause objectionable interference to the service of station KWOS at Jefferson City, Mo., during daytime hours, but there would be no interference from KWOS to appellant’s proposed station; that operating with 100 watts power, unlimited time, would not cause any objectionable interference whatsoever, and the interests of no existing stations, nor of any pending applications would be affected by reason of interference; that appellant’s application “may be granted within the purview of Section 307 of the Communications Act of 1934, as amended on June 5, 1936, [§ 2, 47 U.S.C.A. § 307], and such grant would be in accordance with the equitable distribution of radio broadcast stations to permit the use of the facilities sought in the instant case”; that WTAD provides service “to the city of Hannibal, and in some portions of the area sought to be .served herein in addition thereto with a satisfactory signal, it provides service of local interest to Hannibal incidentally only and not primarily”, and that “this obviously does not meet all the requirements for radio broadcasting in this community.” (Italics supplied.)
It was the examiner’s recommendation that appellant’s application on a frequency of 1310 kcs., with 100 watts power, unlimited time, be granted. We have said in Heitmeyer v. Federal Commun. Comm., supra : “In view of the fact that the Examiner made a correct finding upon the point— among other well prepared findings — the Commission’s finding cannot be regarded as other than arbitrary and capricious. While the Commission is not bound by the findings of the Examiner, it is itself charged with the responsibility of making findings. [Cases.] In this case it would have profited from a more careful consideration of those which the examiner prepared.” [68 App.D. C. 180,
The Commission, in its brief, stresses the engineer’s reference to interference with station KWOS and the recital thereof in the statement of facts, by the Commission. The Commission does not find that this interference is such that a denial would be justified upon this ground. It makes no finding thereon. The record shows that the Commission had before it an attempted waiver in the form of a letter from the attorney representing KWOS, and also that the examiner recommended the issuance of the permit with 100 watts power which would cause no interference. It may be that either or both of these reasons moved the Commission to pass this question of interference, but at any rate, it was ignored by the Commission in its findings and does not enter into the case.
Second. The remaining assignment is that the Commission erred in refusing to apply herein the same standards adopted in similar cases decided, by it. In support of this assignment, the appellant cites many Commission decisions in which a city as small as, or smaller than, Hannibal had been granted a local station. 5 These cases show, that, in the past, the Commission has definitely laid down a policy of granting permits for local stations to communities served with clear channel and regional stations, but having no local service. It is clear that in all the cases cited lack of a local station was controlling in the determination of the Commission that under the direct provisions of the statute the rights of the citizens to enjoy local broadcasting privileges were being denied, and that public convenience, interest, or necessity would be better served by .the granting of the permit for a local station. We cannot subscribe to appellant’s theory that these cases are such as will control the action of the Commission. It is very difficult to find cases that square on the facts. In administering the law, the Commission must consider each case upon its individual grounds. The permit should be granted if'it meets the statutory criterion of public convenience, interest or necessity, if not, it should be denied. In the instant case, it seems to us there has been a departure from the policy of the Commission expressed in the decided cases, but this is not a controlling factor upon the Commission. We must keep in mind that the findings of fact by the Commission in this case are conclusive if supported by substantial evidence, unless it clearly. appears that they are arbitrary or capricious.
We hold that the appellant has sustained the burden of proof that there is a public need for á local station in Hannibal; that there is no substantial evidence in the record supporting the finding of the Commission that no such public need exists; and, that the finding by the Commission that the public convenience, interest, and necessity would not be served by granting the permit for a local station is in law arbitrary and capricious.
Reversed and remanded.
Notes
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Palestine Broadcasting Association,