Channel 16 of Rhode Island, Inc. v. Federal Communications Commission

440 F.2d 266, 142 U.S. App. D.C. 238, 21 Rad. Reg. 2d (P & F) 2001, 1971 U.S. App. LEXIS 11770
CourtCourt of Appeals for the D.C. Circuit
DecidedFebruary 19, 1971
Docket23399_1
StatusPublished
Cited by3 cases

This text of 440 F.2d 266 (Channel 16 of Rhode Island, Inc. v. Federal Communications Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Channel 16 of Rhode Island, Inc. v. Federal Communications Commission, 440 F.2d 266, 142 U.S. App. D.C. 238, 21 Rad. Reg. 2d (P & F) 2001, 1971 U.S. App. LEXIS 11770 (D.C. Cir. 1971).

Opinion

MATTHEWS, Senior District Judge:

Channel 16 of Rhode Island, Inc. (hereafter Channel 16), permittee of television broadcast station WNET on Channel 16 at Providence, Rhode Island, seeks review of the Memorandum Opinion and Order of the Federal Communications Commission released April 8, 1969, denying an application of Channel 16 for an extension of time within which to complete construction of such station, and a Memorandum Opinion and Order released July 17, 1969, denying a petition for reconsideration.

It is asserted by Channel 16 that the Commission erred (1) in finding that Channel 16’s failure to reactivate its formerly operative UHF station was occasioned by causes under Channel 16's control; (2) in holding that there were no issues of material fact requiring an evidentiary hearing; (3) in finding that the circumstances set forth by Channel 16 regarding proposed competitive CATV operations did not constitute “other matters sufficient to justify an extension;” and (4) in refusing to consider the activities and expenditures of Channel 16 looking toward reactivation of Channel 16 as “other matters sufficient to justify an extension.”

We think the Commission acted arbitrarily, capriciously and without rational basis in denying the requested extension. Accordingly, we reverse and remand the case.

In the spring of 1953, Channel 16 was granted a permit to construct a UHF television station to serve Providence, Rhode Island. The station went on the air under a special temporary authorization in 1954 pursuant to which Channel 16 operated Station WNET for some 17 months. In July of 1955 broadcasting was suspended. A statement setting forth the reasons for the suspension was filed with the Commission on July 5, 1955, wherein Channel 16 expressed its “reluctance in taking this step” but asserting inability to compete with two *268 VHF stations. 1 Thereafter, Channel 16 applied for six-month extensions of its permit which were routinely granted until the application filed in September 1956. The commission did not act on this application until 1965.

During the 1950’s the Commission pursued a very liberal policy in granting extensions of UHF permits. The Commission presented the history and rationale of this policy to the Court in MG-TV Broadcasting Company v. F. C. C., 133 U.S.App.D.C. 54, 59, 408 F.2d 1257, 1262 (1968) wherein the court recounted :

“In the early days of UHF, the Commission states, extensions were ‘almost automatically granted upon the mere allegation that it was economically unfeasible to construct at the time.’ With improving economic conditions, and the passage in 1962 of the all-channel receiver legislation 2 the Commission decided that it would no longer accept the excuse of economic unfeasibility alone.”

This more rigid attitude toward extending permits emerged in Thames Broadcasting Corp., 29 F.C.C. 1110 (1960). There 27 applicants were seeking time extensions on their construction permits, basing their failure to construct on the premise that economic and other conditions rendered UHF operations unsuccessful at that time. In support of this they pointed to the failure of UHF stations in areas served by VHF stations, the inability of the public to receive UHF signals on their television sets, and the fact that the Commission had made no final determination concerning the future of UHF. All of the applicants had declared that they did not intend to commence construction. The Commission determined that these were matters “solely within the business judgment of the individual applicant,” and denied all but three of the applications. 29 F.C.C. 1113. Two of these three applicants had permits for UHF stations in cities where additional VHF channels might be placed as a result of the rule-making proceedings then before the Commission. As to these two, the Commission believed it to be in the public interest to defer action until the rule-making proceedings were concluded. The third applicant had a partially built station; it had expended over $70,000, had purchased a tower, and had an agreement for equipment on which 25 percent of the price had been paid, and had exercised an option and acquired land. The Commission felt it would be in the public interest to grant the time extension to this applicant.

Commissioner Hyde dissented as to the 24 applications being denied, saying:

“The majority concludes that these applicants have been guided by matters of business judgment and not impeded by causes beyond their control. However, it is clear from the record that the cardinal factor influencing their decisions not to construct has been the absence of a definitive Commission determination concerning the future of UHF television. Thus, in the circumstances, I believe it inequitable and unwise to so strictly construe section 319 of the Communications Act and section 1.323 of the Commission’s rules as to reach the result here enunciated.” 29 F.C.C. 1115.

Commissioner Lee dissented in whole “pending Commission resolution of the UHF-VHF problem.” 29 F.C.C. 1115.

The first response to Channel 16’s application of September 1956 was a letter *269 from the Commission dated November 4, 1964, stating:

“Inasmuch as the failure to complete construction is apparently due to your voluntary decision not to proceed based on your judgment that the proposed station could not succeed financially under present economic conditions, it would appear that you will, at the most, be entitled to an oral argument on the question of whether your failure to complete construction as a result of such voluntary decision constitutes either causes not under your control, or the requisite showing of other matters sufficient to justify the extension, within the meaning of Section 319(b) of the Communications Act of 1934, as amended, and Section 1.534(a) of the Commission’s Rules.” Appendix, p. 2.

Channel 16 responded that it wished to prosecute its application and desired oral argument. Thereafter, the Commission ordered a consolidated oral argument on this and a number of other pending applications for extensions of permits by UHF permittees whose stations were not on the air.

The oral argument was held on May 13,1965. The discussion revolved around the intention of Channel 16 to go back on the air and the concern of the Commission as to when this would be. Channel 16 pointed to two major obstacles regarding its time schedule. The first was based on the knowledge that CATV was “bristling” all over Rhode Island, and Channel 16 was concerned with the dangers and threats of CATV to UHF operations and the absence of any general policy by the Commission on the franchising of local CATV. The second problem was the need of Channel 16 to go to increased power, which necessitated a modification permit. Channel 16 emphasized that the time element for Commission approval of a modification permit was an unknown factor within the control of the Commission. At this juncture, the Commission posed the question as to whether Channel 16 would make a commitment to construct within six months of the grant of that application.

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440 F.2d 266, 142 U.S. App. D.C. 238, 21 Rad. Reg. 2d (P & F) 2001, 1971 U.S. App. LEXIS 11770, Counsel Stack Legal Research, https://law.counselstack.com/opinion/channel-16-of-rhode-island-inc-v-federal-communications-commission-cadc-1971.