*2 BAZELON, Before FAHY and DAN- AHER, Judges. Circuit FAHY, Judge. Circuit Company, appellant, Broadcasting Corporation, intervenor, KTRM, Inc., each filed with the Federal Communications Com- mission an for a construction permit for a new commercial television Beaumont, Texas, operate station at applications on Channel 6. As the were mutually they designated exclusive, hearing proceeding. in a consolidated hearing After dis- agreeing with the decision of its trial ex- aminer, who had favored the award KTRM, appli- August cation Beaumont, 4, 1954,1and denied those of and KTRM. The decision of the Commission accom- panying analysis its order contains an of its reasons. find no We disagree which to with the decision as of the time it was However, rendered. En- terprise specifies also as error the failure reopen of the Commission to the record to consider evidence events oc- subsequent August the order of curred 4. significance exposition
these events we refer first to the reason given by granting the Commission for to Beaumont. The Commis- Marks, Washington, H. Leonard Mr. sion states that the error of its examiner Dobin, C., Paul Wash- with whom Mr. D. deciding per- KTRM should have the ap- ington, C., brief, D. was on principally mit stemmed from her failure pellant. preference to award a regard to diversification and concentra- Henley, Asst. Mr. J. Smith Gen. Coun- media for mass communication. sel, Federal Communications Commis- part, The Commission said sion, C., Washington, with whom D. “* * * Baker, Counsel, Warren Gen. Messrs. E. Quenstedt, Counsel, superiority and Warren Fed- merits D. a clear in this im- August August The decision of is some decision and order are dated times referred to in the 4th but were released 6th. having August 6, been rendered ** * comparison. Tipping There fa- portant the balance area then, significant being Broadcasting, difference vor of Beaumont no other Hobby’s among newspaper applicants, are no FM in- forth some have factor tration in this factors casting’s erence to * * [*] [*] guided *. of diversification is the proceeding, it is *3 offsetting Having superiority of the us in determinative concluded awarding principles Broadcasting. and concen- this well that feature Broad- regard to set pref- this phatically resolved. tween terests in tion doubts area proposed KTRM-TV, interests are concentrated is into fact given which Houston. When considera- existing to the Broadcasting that to the overlap KTRM and superiority due KPRC-TV relatively * * any occurs *” remote small Hob- em- and and be- timely pe- Enterprise Both KTRM and added, thereafter The Commission By order titioned for reconsideration. “* * * un- Commission 3, 1954, of December Commission significant dif- that conclude able to stayed of decision the effectiveness of its among applicants exist ferences argument De- 4 and set for oral comparison other area of 21, 1954, petitions re- cember on the con- and diversification than that of consideration. media of of control centration meantime, In the December are, There mass communication. agree- the Commission of an was advised countervailing significant thus, no among Beaumont, W. and KTRM thereupon, ment in- of factors or other circumstances Hobby. Enterprise De- P. balance superiority feriority or postpone- moved for cember Beau- superiority to the clear and it oral enable ment of Broadcasting is entitled mont *” effects * * consider the area. latter agreement. support this of this of pertinence, special Of motion, urged Enterprise that AM broadcast an KTRM that found agreement proved scrutiny the material Hobby, Beaumont; P. that W. station comparative qualifications of the acquire by him, could options held under applicants, it should time to move stock KTRM’s cent up to 35 reopening for a The mo- the record. stockholder; largest become thus postpone argu- tion to was denied and enable option would also his exercise By peti- ment was held December 21st. representation on his increase him to tions dated December uary 7, 1955, and Jan- a ma- less than to one directors board Enterprise asked the Com- presi- Hobby was Mr. jority; reopen mission to the record for incor- controlling stockhold- dent, director poration of agreement, and, upon Company, which Post Houston of the er basis, change to find such in Beaumont’s is the Post publishes Houston require character as to denial or dismis- AM, FM, and a TV sta- an of an licensee sal of its of that overlap of tion, have some of which all Enterprise. by the served to be area signal into January 28, 1955, On Up- in Beaumont. station TV proposed opinion memorandum issued or- in fur- reviewing situation the factual affirming August der En- decision. concluded, detail, the Commission ther terprise’s effort to have the record re- * * “* questions opened rejected, Aside was the Commission rul- preference premature Beau- overlap, due that was consider “executory” agreement. KTRM over The Commis- mont thereupon modify of diversification sion ing refused to matter its find- mass communica- to control media for mass com- concentration plainly evident. munication. The sup- media also
7H ciding order Beau- plied for its between reason an additional mont, having concluding dropped KTRM out consequence agreement. ex- preferred area ecutory possible agreement, in programming effectuation character regarded thereof, media sense that Com- but it still approval, mass factor as vital. would have caused communication not premature, its consideration to be developments relevancy of the new only come had a new factual situation highly important question of di- being by into reason of its execution versification of con- and concentration *4 operative the was to become is for mass communication trol of media parties of as decision between the the Commission words of the In the clear. August 4 in favor of stood. Beaumont agreement provided, the Therefore, determining in that whether * * “* happening the timely decision to should stand it was contingencies of certain Broadcasting agreement, consider the if it should be formed will cause to be considered at all in the connection with corporation the tele- a new to which August 4 decision. vision to transferred, in would be told, however, We are also Hobby Broad- P. W. there must be an end to administrative casting have interests. One would proceedings so that the interest contingencies is reaf- of these the by going permittee will be served the by firmance of with the authorized construc forward August 4, Decision of 1954.” sup This view has some in tion. force expens- $55,000 KTRM was to receive of port of to of the failure the Commission appli- Beaumont, es cant, outweighed from successful reopen; by is but it other petition for for withdrawal of its re factors. The interest also pleadings. related quires reconsideration that the of com relative merits already formerly, Hobby, set weighed peting applicants W. P. be before KTRM, was to forth, goes of a stockholder special award to either. This is the to enable it to Beaumont make a loan purpose comparative proceedings. of And KTRM, payment and was make the proceedings in such has the Commission per purchase option to a receive repeatedly 32% importance stressed the corpora- in new stock interest cent regarding facts concentration or diversi hold Beaumont was to tion. 62% fication of media mass communica per- stock. The construction cent Indeed, tion. as the Commission said as- mit awarded Beaumont was to be August decision, “de this was the signed corporation. Mr. Hob- to the new present terminative feature” of the case. give by up option in his was to stock Furthermore, Hobby’s ownership Mr. in assign KTRM and in KTRM his interest August terests on 4 were determinative to KTRM. particular of this feature. A shift among those comparative parties Au- interests The Commission had found in gust ownership in- 4 decision that was a shift August tipped foundations of in KTRM Mr. terests deci against Furthermore, KTRM and in favor sion. the shift was the balance the re arrangements Had his transition of financial sult Beaumont. corporation position in new so require a nature and timed as to similar over Beaumont’s in- to take scrutinize which was them to deter August they before the bal- or mine whether not occurred terests constituted an might tipped processes. have been abuse of the Commission’s well ance See appellant Clarksburg Publishing to or Co. Federal arrangements, new there- KTRM. fore, 96 argue persuasively App.D.C. 211, Although in favor of their 225 F.2d in de- the Commission the contract entered into consideration about four language August 310(b) therefore 405 de and ground sections or months after prived power re to re could as a Commission of not included required petition ceive the consideration in the and to reconsider evidence days, or section 4052 to be filed within 30 redecide the case aon legal advantages statutory If this basis. this is raises no or other done incorporation comparative hearing bar to of the facts are lost August purposes 310(b), 4 its record. This so frustrated. because the Section open. important be had not scheme in the total decision was still compar Act, it was is no final the sense substitute come longer change upon applicants procedures reconsid available ative recog permit. itself cov section eration. same That transfer, as nized as late December ers the situation where a signment stayed disposition “in con 4 order or any pend quo, order maintain status struction or station license right thereunder, disposition con or a transfer holding any petition *5 and rehear for reconsideration trol of such ing subject permit Applica petition.” license, Even or filed in is desired. Commission, right tion Enterprise must be as of obtain made could not which find must that the on reconsideration based events necessity and convenience will served be originally occurred after the record was thereby. Obviously provisions do these petition closed for reconsid or after its play long compari not come into so as a aside, lay filed, questions eration was we competing son applicants between is or grant power had active; un hold that and we should be Albert held weAs reconsideration. kept comparison active less such is Commis Communications v. Federal son agreement into the new take account 41-42, F. 39, 182 U.S.App.D.C. sion, 87 rights competing of here involved the an jurisdiction over 399-401, 397, 2d Enterprise, applicants KTRM are denied. until with the order remains applied had for the same and Beaumont expired, appeal has for the time granted permit. permit The was re application for by an time is tolled primarily Hob because of the Fleming also, Federal hearing. See, because, on interests in KTRM and Commission, 96 grounds, Beaumont was found to be 223, App.D.C. F.2d 523. 225 superior pro Enterprise. While ceedings had urged proceedings that the were still before Commis It character, petition there sion on Hobby for reconsideration lost consider could interests fore that the Commission became the agreement agreement only 310 under section an with Beaumont for their corpora fur apart (b),3 separate transfer from KTRM to a new qualifica comparison in which of Beaumont's Enterprise. to have ther 62y2 per This cent the stock tions with those argument cent. pressing Unless is con way 32% another repeat, comparatively But, the events finality. we sidered agree though they subse into occurred after Beaumont entered question, peti compar August and the their order lose ment quent Though reconsideration, at struck ative character. tion for assigned by could not become effective without Com very had been decision, approval, been made. its very making it, terms, the deci consti at a time disclosed were bearing important open tuted new facts for reconsideration. still sion was nothing remaining two the relative merits these circumstances (1952), (1952), 47 3. 66 716 U.S.C.A. 47 U.S.C.A. Stat. 310 66 Stat. amending (b), (1934). (1934). amending Stat. 1086 48 Stat. hav applications ***Furthermore, channel Enter clusive for that unless applicants.4 compar consolidated, comparatively with re been filed and prise heard can be hearings designated were issues ative on its status spect facts to those new object 17, 1952, three commenced November then applicant could is lost. hearings ago. years competitor Beau After extended protest, not as a August 6, many only procedural steps, itself, on but permit mont final final the Commission released after “any party in interest” finding Beau Beaumont. decision of made to had been award competitors. Pe superior to its mont have lati must The Commission rehearing KTRM filed titions for finality choice bringing tude by Enterprise. Commission is applicants the circumstanc between construction sued the awarded impel us referred have which we es to September 9, 1954, call to Beaumont interest to conclude ing not construction to commence sound of a in the exercise later than October and to reopened the rec discretion, completed April 4, later than reception of evidence ord accordingly. Construction went forward compara complete developments and to petitions Oral on the for reh light of those de consideration tive velopments. earing1 was set for December This does not mean and Beaumont were then must hearing, an en banc KTRM hav us, must set *6 be be set aside now petition withdrawn its on December reopens by aside January 1954. The Commission on new evi considers record 28, 1955, released its Memorandum and to or not dence. Whether reflecting Order, great detail fur its revoked, or should ther consideration the Beaumont and Enterprise, ini is for the to be awarded Enterprise claims, and affirmed Au its after of the Commission decision tial taking gust 4,1954, by decision which Beaumont reap this evidence account of comparatively had been established as comparative qualifications praising the superior and entitled to the award. Pro Enterprise. The Com of Beaumont cedurally, the Commission had followed changed also consider the mission should meticulously steps the essential outlined applicants due financial of these status Broadcasting in Johnston Co. v. Federal agreement, terms as well as the to Comm.,2 thereupon they and character of the once, but twice that, concluded com processes bear of the Commis paratively, Beaumont had demonstrated public sion and the interest. See Clarks superiority Enterprise. over re Publishing burg v. Federal Commu Co. quirements public interest, conven Commission, supra. nications necessity met, ience had been years remanded for further two litigation, Reversed after more than opinion. with this consistent entitled to television serv ice, by and Beaumont. Judge (dissent- DANAHER, Circuit more, it, Without take that would ing). matter, ended and had review Following rule-making protracted pro sought, been we would have been bound ceedings, seeking affirm. came here urging stay, allocated television Channel 6 to a then the substance of its argument, Beaumont, mutually present Texas. Three ex but another division longer U.S.App.D.C. 4. We assume that KTRM is 2. 175 F.2d applicant. pleadings 1. Certain related were involved they but are not itemized im since present purposes. material court, March declined go mont was bound 405 to forward § stay the Commission’s in accordance with its and has terms order, January 28, as affirmed expense. If done so filing at vast complied petitions in its rehearing construction before the Com- with the conditions- of and of the mission stay § under “does not even Act, order, Beaumont was entitled to a station nullify much less vacate or license, point regard at this without to it.”4 With the order thus in full force provisions (b) 309(a), (c) of § effect, but before the
of the Act. rehearing petitions, the Beaumont Broadcasting Corporation in December thereafter, If station license option agree- 1954 concluded a certain issued, sought been and if Beaumont had Hobby. ment with KTRM and one assign its station license to some oth- entity, er Beaumont would have been agreed “that it will dili 310(b) applica- bound under to file an gently continue to seek to have the Com seeking ap- tion with the Commission (Beau to it mission reaffirm the proval, only if to be the Commis- mont) of the construction here public interest, sion could find “that Thereafter, tofore awarded to it.” necessity convenience, and will be served only upon in notice from of his Lacking thereby.”3 ap- option tention to exercise the referred proval, Cor- the Beaumont majority, Beaumont “will forth assign poration simply may not its sta- with make to the Commis license. Thus the Commission diligently will sion and seek the effective charged by Act body assignment” consent Congressional terms, will to execute the be formed Beau regulation respect of radio “Upon mont. the condition that licensing. broadcast approval consent or the Commission is Turning thereupon obtained, now to the facts in the instant will was issued dered case, find the decision as must be so. no the [August *7 majority correctly September upon The construction 4, 1954].” the time it was ren- disagree I states: agree permit Beau- with “We that an¿ wju Meanwhile, (cid:127)x- * *>’ [5] transfer payment stock the and in the said therefor” against assign corporation construction iSSUe “to to the new Beaumont’s 32% to be per Hobby, up corpora formed. cent of permit note, major Congress 1952, language first over 3. in its Act. The new munications designed Act, deliberately haul of the to make certain that no con- understanding prob complete grant- of the license struction station op lem, may by over the Commission’s indeed the Commission ed be transferred 310(b). applying position, approval; § amended without the Commission’s procedure convenience definite the make to be em- pro- necessity test, by ployed passing the Commission must the Commission ' proposed though assignee applications; upon ceed as transfer to clari- person applying fy applied by for and no the standard to be 12, p. passing upon under See H.R. the license 308. Commission merits accompany 658, Rep. application. No. 1750 S. 82d (1952). Cong., purposes proposed 2d Sess. And see Cam of the “One of the language prevent any v. Federal Communications den Radio is to such * * Commission, U.S.App.D.C. 312, policy the AVCO rule 191, rehearing (1955).' Hearings 220 F.2d denied on S. 658 before the Committee distinguished colleague Foreign former Our on Interstate Commerce of explained Judge House, Cong., Miller Justin 82d 1st Sess. 354 (1951). on Interstate House Committee and For- eign Commerce: Broadcasting 4. KFAB Co. v. Federal require amendment would “This Comm., 1949, 85 U.S. approve transfer App.D.C. 177 F.2d 42. possesses finding that the transferee qualifications required supplied. Emphasis under the Com- $55,000 cretion and it did reconsideration. to reim loaned Beaumont Then, further expended after oral sums KTRM for “the burse consideration, the Com- preparation and for a second time it in connection with superior En- mission found Beaumont application a tele prosecution for years terprise. Now, more than three permit,” KTRM vision construction hearing comparative since was com- as of from the withdrew menced, majority Hobby’s option anoth- would order December hearing er pay on an issue cent of subscribe 32% yet may has not never arise. corporation arisen and to be formed in the the stock months, run for 18 was to why KTRM One of the chief reasons agreement “This to extension. compara- was found inferior in the first truly it well and that is on the condition hearing presence tive Hobby was the requirements any all meets corporate interests in the KTRM any State or Feder and/or If, public pol- structure. as matter having jurisdiction authority al icy, that were a reason for valid the elim- premises.” place, ination of KTRM in the first corporation not been formed. has that it will be a critical fac- would seem Broadcasting Corporation has consideration of Commission’s tor assignment of application filed, application, and when filed an permit. If and when Corporation there construction ap- assign some such is before to a to be statute, 310(b) and plication, both the will also include the Hob- formed which by require expect Com- 3.6346 Rule interests. would preced- approval a condition at the time may give volun- application be a valid factor at before would ent assignment weight station tary television of a it received least as much permit. place. justified in construction first We are antici- pating the Commission will what action option copy of the filed a it is to take ac- take if and when asked agreement pursuant to the Commission’s assignment. tion on done Had it not “information” rule. so perfectly obvious from the terms of argument, the December before parties option information until it withheld the recogni2;e op- may become never January 28, 1955 memorandum after the very reason that the Com- erative notwithstanding the execution *8 approval. may its mission withhold very agreement December, a in different might say majority be said to well situation I to understand the Here, however, record, on this arisen. is bound to set aside grant There no no concealment. a there was Beaumont and to order new comparative hearing respect no abuse of the Com- fraud. There was with to de- processes.7 original August velopments here mission’s the since preference comparative claims to award, and its was heard 4th hear- length pursuant at were reviewed must rehearing. course, again competitors petition for Of be considered as on a says: though majority “The Commission the basis grant power such reconsidera- already stockholder point yet on this There is issue tion.” formed. I cannot read the stat- although exercised so, its dis- I have tried to utes accom- Valley. 3.684. C.F.R. Moreover award to Ohio the light of various factual deficiencies Clarksburg Pub. Co. v. Federal 7. Cf. Commission’s, record, ve the found Comm., 1955, 96 U.S. procedure ill-adapted “demurrer” ful- App.D.C. F.2d cited requirements hearing only appli majority. There fillment of §(cid:127) day “dropped 309(e). out” the cant before the my my powers modate views to able col- those of court later be with invoked leagues judgment respect. whose step reference some as a different dif- stage, may we then consider ferent It seems to me two dis- whether or not the Commission has erred safeguards contemplated tinct in the in its administration of the As I Act. statutory in 319 scheme. found One is read Mr. opinion Justice Frankfurter’s (c) which be- authorizes in Federal Communications Comm. issuing fore a station to take ac- license Co., Pottsville 144-145, 309 U.S. arising count of “cause or circumstance 60 S.Ct. 84 L.Ed. coming knowledge or first our function under the Communications granting Commission since the Act judicial purely “restricted to a re- permit”. The Commis- [construction] paraphrase view.” language To quoted judgment sion must as to exercise its by him (1) we ask: did the Commission whether or not or altered such cause apply legislative validly standards set operation circumstances “make the up; (2) go did it beyond act within or against public such station interest”. authority upon it; (3) conferred did If the station “conform license cannot proceedings satisfy pertinent de- generally to the terms said [construc- process; (4) mands of due was there permit”, tion] or if interest compliance legal requirements with the will not be served as a result such govern fix function and the ac- changed circumstances, the Commission tion of If, the Commission? within grant may a station li- condition the standards, the Commission those has act- any Hobby upon a divestiture cense duty properly it is our ed affirm. corpo- proposed new with the connection ration, supervise is not our task to the Commis- limit the otherwise or charged course “courts are not sion’s Broadcasting Corporation as general against guardianship po- all Authority for presently constituted. complicated tential mischief tasks clearly exists action * * * government. Interference (r).8 under § is not the courts opment conducive to the devel- Again, additional has the responsibility of habits in ad- 310(b) the Com- protection that under § agencies.” ministrative page 146, Id. 309 at ap- find, must if and page at 60 S.Ct. 443. More- assignment submitted, plication for develop over, if abuses the conduct “public conveni- whether agency, pri- of an administrative it is ence, necessity there- will be served duty marily the concern of the only as- by” not with reference situation, correct Executive to par- signment, with reference very people That is the will. assignee proposed under § ticular which, under our constitutional form of government, entrusted has been there is a division To the Commission of re- regulatory sponsibility. duty au- It is the administration of the Ex- the thority Congress legislative policy. in the radio to execute the ecutive *9 broadcasting machinery duty field. The our to ascertain becomes whether error, judicially and here set in motion or not has been re- statutes compara- required viewable, agency culminated, after the action com- hearing, amply plained record, an award based of. As read this tive findings exactly has that Beaumont is su- Commission done sustained perior. what judicial our applicable the exercise was called do function, certainly may happen not within our statutes. fu- What say yet province that the award should our ture is not concern. I would af- gone to someone else. Should our firm. University Regents System of Ga. L.Ed. 363. 8. Cf. S.Ct. Carroll, 1950, 338 U.S.