PINELLAS BROADCASTING COMPANY, Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, The Tribune Company, Intervenor.
No. 12545.
United States Court of Appeals District of Columbia Circuit.
Argued June 3, 1955. Decided Jan. 19, 1956.
Writ of Certiorari Denied April 2, 1956. See 76 S.Ct. 650.
Mr. John B. Kenkel, Washington, D. C., also entered an appearance for appellant.
Mr. Warren E. Baker, Gen. Counsel, Federal Communications Commission, with whom Mr. J. Smith Henley, Asst. Gen. Counsel, Federal Communications Commission, was on the brief, for appellee.
Mr. Philip J. Hennessey, Jr., Washington, D. C., for intervenor.
Mr. Edwin S. Nail, Washington, D. C., also entered an appearance for intervenor.
Before PRETTYMAN, BAZELON and WASHINGTON, Circuit Judges.
PRETTYMAN, Circuit Judge.
This is an appeal from an order of the Federal Communications Commission.1 The order contained an award of a permit to construct a television station on the West Coast of Florida to operate on Channel 8. The area to be served included Tampa on the north and St. Petersburg on the south. Three applicants competed for the award—the Tribune Company located at Tampa, Pinellas Broadcasting Company located at St. Petersburg, and Tampa Bay Area Telecasting Corporation with a studio located between the other two. The award was to Tribune. Pinellas is our appellant. Tampa Bay takes no further part in the proceeding.
The administrative proceeding was meticulous in its procedural detail, beginning with a hearing before an examiner and ending with a denial of reconsideration by the Commission.
The Commission made extensive and detailed findings of facts and explained at great length its choice of the awardee. In respect to many criteria it found little or no advantage to any applicant; in respect to some it found advantage to one; and in respect to others it found advantage to another. The decisive factor, in its judgment, was the comprehensive local live program proposal of Tribune, supported by the record it had made over the years, both in its newspaper and in its radio broadcasting, in furtherance of local civic interests and enterprises. Each of the groups owning these applicants has for years owned and operated a newspaper and a radio station in this locality under the same ownership and in the same manner as it proposes for the new television station. Extensive evidence concerning the respective performances in the use of these media was presented. The Commission rested upon that factual basis. It found that Tribune proposed a greater quantity of local live programming and that in content and the assurance of effectuation of the proposal Tribune was clearly and strikingly superior.
In applying this decisive factor the Commission refused controlling effect to the local ownership of Pinellas contrasted with the absentee ownership of Tribune. Therein, Pinellas says, it erred. Pinellas states its contention in a number of ways,2 but in essence it is that the Commission erroneously failed to give preferential weight to Pinellas‘s superiority to Tribune in terms of local ownership and integration of ownership and management.
The facts on the point are that the stock of Pinellas is wholly owned by residents of St. Petersburg active in the management of the corporate affairs, whereas 90 per cent of the stock of Tribune is owned by non-residents of the area, principally by two families resident in Richmond and Chicago. The conduct of the affairs of Tribune has for many years been entrusted by the owners to a group of local residents as officers and active managers. The Commission found the stockholders of Tribune maintained a policy of autonomy in the management of the company‘s affairs in local
The Commission says the prime factor in this particular phase of a comparative consideration is the presentation of programs of local interest and importance and, while local ownership is a fair assurance of the performance of promises made by applicants for such programs, and for that purpose is a valuable factor in many comparative judgments, such ownership is not a prime factor in itself and where, as here, an extensive record of performance is available, the record is a more reliable guide to the probability of fulfillment of promises. The same is true in respect to the integration of ownership and management.
The controversy is in an area into which the courts are seldom justified in intruding. The selection of an awardee from among several qualified applicants is basically a matter of judgment, often difficult and delicate, entrusted by the Congress to the administrative agency. The decisive factors in comparable selections may well vary; sometimes one applicant is superior to another in one respect, whereas in another case one applicant may be superior to its rivals in another feature. And it is also true that the Commission‘s view of what is best in the public interest may change from time to time. Commissions themselves change, underlying philosophies differ, and experience often dictates changes. Two diametrically opposite schools of thought in respect to the public welfare may both be rational; e. g., both free trade and protective tariff are rational positions. All such matters are for the Congress and the executive and their agencies. They are political, in the high sense of that abused term. They are not for the judiciary.
In the case at bar there appears some suggestion that the Commission has changed, or is changing, its view as to the dominant importance of local ownership and as to the evil of a concentration of the media of mass information. But in so doing it is operating within the area of legislative-executive judgment. The courts cannot interfere so long as the process, the premises, and the judgment are not arbitrary. The rationality of some basic theses as to the public good is self-evident, and of some others is so well known as to require judicial notice. But it may sometimes be that the supporting philosophy of a general policy on such matters is so obscure as to require explanation. In such a case, if the conclusion is challenged as arbitrary, it would seem that the court, in the process of adjudicating that issue, can require a statement of the premises for and the reasoning toward the general policy. But we do not have that situation in the case at bar. No statutory provision has been violated. The bases for the Commission‘s selection are clearly set out and are understandable. They are reasoned and not capricious. They rest upon evidence put in the record. All parties had complete procedural opportunities. So far as the record shows, the Commission considered every suggested index of differences between the applicants. The function of the court in this case goes no further than to examine into these features of the matter.
In its brief Pinellas urges as error the lack of findings as to the relative needs of Tampa and St. Petersburg, as two separate communities, for service and the relative abilities of the applicants to meet each of those needs. Pinellas was not direct or specific upon the point in the proceedings before the Commission, so far as those proceedings are printed in the joint appendix. To discover the point in that text one must discover it in the general claim that the Commission erred in finding Tribune‘s program proposals superior to those of Pinellas. We advert to the point briefly, although ordinarily we do not, and will not, decide issues not presented observably to the agency.
Pinellas seeks to avoid its failure to raise an issue under
In requiring a fair and equitable distribution of service
Pinellas says the Commission expressly recognized the necessity for comparative consideration of the applicants as principally serving distinct and separate communities. It says that, while the Examiner treated Tampa-St. Petersburg as a single community, the Commission expressly held that view erroneous. We find no such holding.
It is clear the Commission treated Tampa-St. Petersburg as one community, not as two. All applicants proposed a station that would render Grade A service to a wide area, including both Tampa and St. Petersburg at its center. And as to program availability the Commission was emphatic that the proposals must meet the local needs of the area, not of one separate segment of the area; it went so far as to note specifically “Tribune‘s manifested desire to meet the program needs of St. Petersburg as well as Tampa“.
Pinellas seeks to pin its point upon a portion of the Commission‘s discussion of the proposed studios of the applicants. The Examiner had found that Tribune‘s proposed main studio would be more centrally located and more accessible to the people in “the area at large“, and so he gave Tribune a preference on that ground. The Commission disagreed and held the Pinellas and Tribune studios would be equally available to the community at large. In the course of its discussion the Commission ventured upon some explanation of its
Pinellas makes some contention with respect to the record of past comparative participation in local affairs, but the evidence on the point was sweeping and the finding of the Commission was precise and definite. We cannot evaluate such evidence beyond assuring ourselves the conclusion of the Commission had ample support. We think it had.
It may well be that the courts can require an administrative agency to reconsider a decision in which important matters affecting the public interest have not been canvassed or explicitly decided by the agency, even where those questions have not been urged by any litigant before the agency or the courts. But we think no such action is called for in the present case. The final action of the Commission here finds adequate support in the record and does not appear in any respect to be clearly contrary to the public interest.6
The order of the Commission must be Affirmed.
Appendix
Excerpt from conclusions reached by the Federal Communications Commission in its decision of August 4, 1954:
“21. The Commission ordinarily will incline toward an applicant not associated with the local channels of communication of fact and opinion over an applicant having such association. However, such affiliation does not exclude that applicant from comparative consideration. Although it is an important factor it must be weighed along with all other considerations to determine which of the comparative applicants might best serve the public interest. The facts relating to this area of comparison briefly are as follows: Tribune publishes one of the two English language newspapers in Tampa; it is the licensee of Station WFLA, one of the two 5 kw unlimited time stations in Tampa. In addition, there are two Spanish language newspapers and three daytime only stations in Tampa. The controlling stockholders, namely, the Bryan family, have controlling interests in two daily newspapers published in Richmond, Virginia; Radio Station WRNL-AM and FM, Richmond; and in an applicant for a television station in Richmond. Tribune plans to separate the operations of the radio and television stations except insofar as heads of certain departments and sections who will function for both. Pinellas is the licensee of Station WTSP, one of the two 5 kw unlimited time stations in St. Petersburg. There is also a daytime only station in St. Petersburg. Mr. Poynter, Pinellas’ principal stockholder, is also controlling stockholder of The
“22. The Commission, in the past has held that diversification of control of the media of mass communication is desirable and that in the absence of countervailing considerations, the grant to an applicant who has fewer broadcast interests or is not affiliated with other radio or newspaper interests better serves the public interest. This factor, important as it may be, is only one of the numerous comparative factors we have weighed in reaching our decision. The weight to be accorded this factor is dependent upon the circumstances of each case. This record shows that neither Pinellas nor Tribune proposes or intends to employ joint rates in the sale of television time; that there is no indication that the operation of a television station by either Tribune or Pinellas would lessen effective competition; that there are competing radio stations and newspapers now operating in Tampa and St. Petersburg as well as a variety of media in the proposed area to be served; and that both have demonstrated their capacities to function in the public interest. Under these circumstances, we conclude that even though Tampa Bay warrants a preference over Tribune and Pinellas in this area of comparison, it is not determinative of this proceeding. See Aladdin Radio and Television, Inc., 9 RR 1.”
BAZELON, Circuit Judge (dissenting).
Tribune and Pinellas filed mutually exclusive applications for the television channel assigned to the Tampa-St. Petersburg area under the Commission‘s allocation plan.1 These cities are twenty miles apart. Tribune, which proposed construction of a station in Tampa, is controlled by Richmond, Chicago and New York residents who will take no part in managing broadcasting operations. Pinellas, which proposed construction of a station in St. Petersburg, is owned by local residents who will manage all the station‘s affairs. In granting the application of Tribune, the Commission disregarded local ownership and ownership-management integration as values in themselves worthy of a preference. It chose to rely instead upon the past broadcast performance records of the applicants as a more reliable guide for determining which one would be more likely to effectuate its program proposals. The Commission found that both Pinellas and Tribune had “past desirable performance” records.
In its decision, the Commission stated that it had awarded “no preference [to Pinellas] * * * on the basis of integration of local ownership and management and participation in community affairs.” Despite this flat statement, the Commission thereafter said, in its opinion on Pinellas’ petition for rehearing, that
“* * * the preference accruing to Pinellas as a result of its superiority in these factors [local ownership and ownership-management integration] is slight and, although not separately stated, was considered. Our intention was not to deprive, nor did we deprive Pinellas of the slight preference it merits with regard to these factors.” Emphasis supplied.
Although not expressed, we must assume from the Commission‘s refusal to disturb the award to Tribune that it found this belatedly acknowledged “slight preference” outweighed by Tribune‘s “obvious superiority” in the field of local live programs. The Commission‘s decision had found such superiority in two of six program classifications, agriculture and education.2 The record clearly demonstrates that the choice between Pinellas and Tribune was regarded as extremely close and that this superiority provided the “decisive” factor in favoring Tribune.3
Appellant contends that the Commission‘s substitution of past performance records for local owner-management in comparing applicants constitutes a reversal of policy which does violence to the important substantive values inherent in local ownership. It also contends that the record does not support the preference to Tribune on programming. But I think our consideration of these contentions and a final disposition of this review, should await a remand to the Commission for the purpose of supplying an essential conclusion which is missing from the present record. This conclusion relates to the issue of concentration of control and diversification of the media of mass communication. Since the Commission viewed the qualifications of the applicants as closely balanced with respect to the issues it did consider, its resolution of an issue which it did not consider might reasonably be expected to affect the result.
The existence of this issue plainly appears from the record. Pinellas is the licensee of one of three radio stations in St. Petersburg, and its principal stockholder publishes one of two daily newspapers there. On the other hand, Tribune is not only the publisher of one of two daily newspapers and licensee of one of two radio stations in Tampa but, in addition, its controlling stockholders own dominant interests in two daily newspapers and two radio stations in Richmond, Virginia, and in a corporation which is an applicant for a TV station there. The Commission concluded that these newspaper and broadcast affiliations of Pinellas and Tribune justified a preference to a third and unsuccessful applicant, Tampa Bay, who had no such affiliations.4 But the Commission reached no conclusion on whether, as between Pinellas and Tribune, Pinellas was entitled to preference by reason of Tribune‘s more extensive newspaper and broadcast affiliations. Hence it would appear that the Commission did not consider the comparative merits of Pinellas and Tribune upon the issue of concentration of control and diversification of the media of mass communication.5
It is true that Pinellas did not challenge, either administratively or before this court, the Commission‘s failure to reach a conclusion on this issue. Under familiar principles,7 and a review provision of the Act,8 it may be argued that our consideration of this issue is precluded. But I think this argument cannot prevail when, as here, it would result in abandonment of our duty to require the Commission to discharge its proper function with respect to “[o]ne of the basic underlying considerations” of the Act. It clearly appears from the scheme of the Act that the Commission may not disregard issues of vital importance to the public interest simply because they are not presented by the parties. Thus § 309 provides for the specification of issues by the Commission, quite apart from those the parties raise, in both comparative and protest proceedings.9 And, under § 403, the Commission has full power to “institute an inquiry, on its own motion” into any
matter before it. The purpose of this broad grant of authority is to enable the Commission to explore all basic issues relevant to the Act‘s public interest criterion. It expresses congressional recognition of a principle which flows from the inherent nature of administrative tribunals. Unlike courts, regulatory agencies are not confined by the “conventional judicial modes for adjusting conflicting claims—modes whereby interested litigants define the scope of the inquiry and determine the data on which the judicial judgment is ultimately based. Administrative agencies have power themselves to initiate inquiry, or, when their authority is invoked, to control the range of investigation in ascertaining what is to satisfy the requirements of the public interest in relation to the needs of vast regions and sometimes the whole nation in the enjoyment of facilities for transportation, communication and other essential public services.” Federal Communications Commission v. Pottsville Broadcasting Co., 1940, 309 U.S. 134, 142-143,10 60 S.Ct. 437, 441, 84 L.Ed. 656.
The Commission‘s role is not merely that of a referee in an adversary proceeding, who scores points only upon issues selected by the individual contestants and gives the decision to the highest scorer. While this might assure a “right” decision between the contestants, it does not assure a “right” decision in the public interest.11 The latter decision requires exploration and evaluation of
There is dictum in Johnston Broadcasting Co. v. Federal Communications Comm., 1949, 85 U.S.App.D.C. 40, 46-47, 175 F.2d 351, 357-58, which lends support to the restrictive view of the Commission‘s role. That case, however, did not involve a failure of the Commission to consider an issue not raised by the contesting applicants. In any event, this dictum cannot be applied where, as here, a basic policy issue under the Act is involved.
In exercising our equity powers to review Commission action, this court, like the Commission, should be mindful of the public interest criterion which the statute prescribes as a condition precedent to a grant. Until we are satisfied that this criterion has been properly applied in this case, by a comparison of Pinellas and Tribune on the diversification issue and a conclusion thereon, we should not affirm. I would, therefore, remand the cause to enable the Commission to make this comparison and re-evaluate its decision prior to our review.15