Communications Investment Corp. v. Federal Communications Commission
This text of 641 F.2d 954 (Communications Investment Corp. 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.
Opinions
Opinion for the Court filed by Circuit Judge WILKEY.
WILKEY, Circuit Judge:
In these consolidated cases, despite two decisions of this court to the contrary, the Federal Communications Commission (FCC or Commission) has allowed two radio stations to locate their transmitters away from their community of license at a site overlooking a larger and more lucrative market without holding a hearing to investigate substantial and material questions of fact regarding the motives for and effects of the moves. The FCC is now apparently willing to approve such moves without a hearing even when material questions of fact remain unanswered, provided the station desiring to relocate is willing to keep up certain appearances the Commission deems of symbolic importance in displaying a station’s intent to remain “located” in its smaller neighboring community of license.
Unfortunately, when critical questions of fact are unresolved on the paper record before the FCC, the public interest may get short shrift if a hearing is not held. That is why the Communications Act, the FCC’s own rules, and previous FCC decisions all require the Commission to hold hearings when substantial and material facts remain to be determined. Accordingly, years ago this court twice instructed the Commission to hold the hearings plainly required by Commission rules and the Communications Act. But a pattern of summary approval for transmitter relocations on the basis of an inadequate paper record may now once again be emerging, bringing these consolidated cases before us for review. We reverse.
I. INTRODUCTION
An understanding of what has happened in the cases before us requires some background. The signal broadcast by an FM radio station can be characterized by three factors: the station’s frequency, which determines where it can be found on the dial; the station’s signal strength, which is determined by the power of its transmitter and the elevation and configuration of its antenna; and the station’s antenna location, which determines its area of coverage. The FCC is responsible for regulating all three.1 In fulfilling its responsibility, the FCC has divided the portion of the radio spectrum allocated to FM broadcast stations, the band between 88 and 108 Megahertz (MHz), into 100 channels, which the FCC somewhat confusingly refers to as channels 201 through 300.2 From this list of possibilities, communities throughout the nation have been assigned [4]*4specific channels to serve them. These assignments, which specify not only frequency but also limits on authorized combinations of transmitter power and antenna elevation, are compiled in a “table of assignments” adopted as an FCC rule in 1963 after extensive rulemaking proceedings.3 Changes to the table can be made only by rulemaking.4
The cases we consider today involve the assignment of stations to two neighboring cities. The first, Salt Lake City, Utah, estimated to have a population of 176,000,5 has been allocated seven FM channels,6 all in the same signal strength class, “Class C.”7 All seven channels are currently occupied, and the FCC has refused proposals to increase their number.8 The second, Ogden, [5]*5Utah, has only about 72,000 people,9 and is located 33 miles almost due north of Salt Lake City.10 Before the events which concern us, Ogden was assigned four Class C FM channels,11 of which only three were occupied.12
The controversy here involves two Ogden stations, KDAB-FM, broadcasting at 101.1 MHz,13 and KZAN-FM, broadcasting at 97.0 MHz,14 which have succeeded in obtaining approval from the FCC to locate their antennas on Farnsworth Peak,15 a site used by Salt Lake City stations only 18 miles west of Salt Lake City, but 41 miles, over 2.2 times as far, south southwest of Ogden.16 The appellants in these consolidated cases are two radio stations assigned to Salt Lake City, KALL-FM and KISN-FM.17 They challenge what they regard as an intrusion into their market.
Before we turn to the legal arguments supporting this challenge, we recount how two Ogden stations came to have their antennas at a site used by Salt Lake City stations.
[6]*6A. The KDAB Application
The KDAB story begins in April 1973, when Star Broadcasting Co. (Star), the corporate predecessor of KDAB, Inc., filed an application with the FCC for a construction permit for a new Ogden FM station — the station that would become KDAB. Star first asked for a transmitter site at Farnsworth Peak, near Salt Lake City. Within a month, in May 1973, Communications Investment Corp. (CIC), the licensee of Salt Lake City station KALL, filed petitions with the FCC opposing Star’s application. CIC argued that locating KDAB at Farnsworth Peak would reallocate de facto an Ogden FM channel to Salt Lake City, in violation of section 307(b) of the Communications Act of 1934, as amended.18 Star then modified its proposal to ask for a site at Coon Peak, several miles closer to Ogden.
Star filed an Opposition to CIC’s petitions; 19 in response, CIC then filed a Reply.20 Then, realizing that there would be a hearing on the question which would be costly and risky, and, at best, would delay approval of its application, Star amended its proposal for the second time, now specifying a transmitter site on Little Mountain, a location twelve miles west of Ogden used by Ogden FM stations.21 CIC withdrew its petition opposing Star’s application, the FCC granted approval, and KDAB-FM began operations from Little Mountain in July 1975.
Only eleven months later, KDAB, by now licensed to D & B Broadcasting Co. (D & B), filed an application with the FCC to move its newly operational transmitter to the site it had originally proposed: Farnsworth Peak. The reason for the move, according to KDAB, was that it was experiencing multipath problems at its Little Mountain site.22 A portion of its signal, it said, was traveling east to Ogden, passing over Ogden and on to a range of mountains east of Ogden called the Wasatch Front, reflecting off the peaks and then returning to the city. FM receivers in Ogden were thus receiving KDAB signals both directly from the transmitter and also from the mountains by reflection. But the reflected signals, traveling a greater distance, were arriving a short instant later than the direct signals, blurring the combined signal and degrading reception. KDAB’s proposed solution: move to Farnsworth Peak. Because the path from Farnsworth Peak to Ogden runs parallel to the Wasatch Front, KDAB apparently believed that glancing reflections off the mountains on the northward path from a transmitter near Salt Lake City would be less of a problem than the head-on reflections off the mountains experienced by signals from its near-Ogden transmitter.
In its application, however, KDAB provided scant support for its claim it was experiencing multipath problems.
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Opinion for the Court filed by Circuit Judge WILKEY.
WILKEY, Circuit Judge:
In these consolidated cases, despite two decisions of this court to the contrary, the Federal Communications Commission (FCC or Commission) has allowed two radio stations to locate their transmitters away from their community of license at a site overlooking a larger and more lucrative market without holding a hearing to investigate substantial and material questions of fact regarding the motives for and effects of the moves. The FCC is now apparently willing to approve such moves without a hearing even when material questions of fact remain unanswered, provided the station desiring to relocate is willing to keep up certain appearances the Commission deems of symbolic importance in displaying a station’s intent to remain “located” in its smaller neighboring community of license.
Unfortunately, when critical questions of fact are unresolved on the paper record before the FCC, the public interest may get short shrift if a hearing is not held. That is why the Communications Act, the FCC’s own rules, and previous FCC decisions all require the Commission to hold hearings when substantial and material facts remain to be determined. Accordingly, years ago this court twice instructed the Commission to hold the hearings plainly required by Commission rules and the Communications Act. But a pattern of summary approval for transmitter relocations on the basis of an inadequate paper record may now once again be emerging, bringing these consolidated cases before us for review. We reverse.
I. INTRODUCTION
An understanding of what has happened in the cases before us requires some background. The signal broadcast by an FM radio station can be characterized by three factors: the station’s frequency, which determines where it can be found on the dial; the station’s signal strength, which is determined by the power of its transmitter and the elevation and configuration of its antenna; and the station’s antenna location, which determines its area of coverage. The FCC is responsible for regulating all three.1 In fulfilling its responsibility, the FCC has divided the portion of the radio spectrum allocated to FM broadcast stations, the band between 88 and 108 Megahertz (MHz), into 100 channels, which the FCC somewhat confusingly refers to as channels 201 through 300.2 From this list of possibilities, communities throughout the nation have been assigned [4]*4specific channels to serve them. These assignments, which specify not only frequency but also limits on authorized combinations of transmitter power and antenna elevation, are compiled in a “table of assignments” adopted as an FCC rule in 1963 after extensive rulemaking proceedings.3 Changes to the table can be made only by rulemaking.4
The cases we consider today involve the assignment of stations to two neighboring cities. The first, Salt Lake City, Utah, estimated to have a population of 176,000,5 has been allocated seven FM channels,6 all in the same signal strength class, “Class C.”7 All seven channels are currently occupied, and the FCC has refused proposals to increase their number.8 The second, Ogden, [5]*5Utah, has only about 72,000 people,9 and is located 33 miles almost due north of Salt Lake City.10 Before the events which concern us, Ogden was assigned four Class C FM channels,11 of which only three were occupied.12
The controversy here involves two Ogden stations, KDAB-FM, broadcasting at 101.1 MHz,13 and KZAN-FM, broadcasting at 97.0 MHz,14 which have succeeded in obtaining approval from the FCC to locate their antennas on Farnsworth Peak,15 a site used by Salt Lake City stations only 18 miles west of Salt Lake City, but 41 miles, over 2.2 times as far, south southwest of Ogden.16 The appellants in these consolidated cases are two radio stations assigned to Salt Lake City, KALL-FM and KISN-FM.17 They challenge what they regard as an intrusion into their market.
Before we turn to the legal arguments supporting this challenge, we recount how two Ogden stations came to have their antennas at a site used by Salt Lake City stations.
[6]*6A. The KDAB Application
The KDAB story begins in April 1973, when Star Broadcasting Co. (Star), the corporate predecessor of KDAB, Inc., filed an application with the FCC for a construction permit for a new Ogden FM station — the station that would become KDAB. Star first asked for a transmitter site at Farnsworth Peak, near Salt Lake City. Within a month, in May 1973, Communications Investment Corp. (CIC), the licensee of Salt Lake City station KALL, filed petitions with the FCC opposing Star’s application. CIC argued that locating KDAB at Farnsworth Peak would reallocate de facto an Ogden FM channel to Salt Lake City, in violation of section 307(b) of the Communications Act of 1934, as amended.18 Star then modified its proposal to ask for a site at Coon Peak, several miles closer to Ogden.
Star filed an Opposition to CIC’s petitions; 19 in response, CIC then filed a Reply.20 Then, realizing that there would be a hearing on the question which would be costly and risky, and, at best, would delay approval of its application, Star amended its proposal for the second time, now specifying a transmitter site on Little Mountain, a location twelve miles west of Ogden used by Ogden FM stations.21 CIC withdrew its petition opposing Star’s application, the FCC granted approval, and KDAB-FM began operations from Little Mountain in July 1975.
Only eleven months later, KDAB, by now licensed to D & B Broadcasting Co. (D & B), filed an application with the FCC to move its newly operational transmitter to the site it had originally proposed: Farnsworth Peak. The reason for the move, according to KDAB, was that it was experiencing multipath problems at its Little Mountain site.22 A portion of its signal, it said, was traveling east to Ogden, passing over Ogden and on to a range of mountains east of Ogden called the Wasatch Front, reflecting off the peaks and then returning to the city. FM receivers in Ogden were thus receiving KDAB signals both directly from the transmitter and also from the mountains by reflection. But the reflected signals, traveling a greater distance, were arriving a short instant later than the direct signals, blurring the combined signal and degrading reception. KDAB’s proposed solution: move to Farnsworth Peak. Because the path from Farnsworth Peak to Ogden runs parallel to the Wasatch Front, KDAB apparently believed that glancing reflections off the mountains on the northward path from a transmitter near Salt Lake City would be less of a problem than the head-on reflections off the mountains experienced by signals from its near-Ogden transmitter.
In its application, however, KDAB provided scant support for its claim it was experiencing multipath problems. It submitted to the Commission only a letter by a “field man” employed by the firm that had supplied the KDAB antenna, Jampro Antenna Co. of Sacramento, California.23 The “field man” reported in what he called a “field engineering statement” that he had checked the KDAB signal at eight locations. Three of the locations were in Ogden; the remaining five were in Salt Lake City and points intermediate. He concluded on the [7]*7basis of these measurements that KDAB was facing a multipath problem. The weight to be accorded his conclusion is uncertain, however; the president of the antenna company was quick to assert in a cover letter to the report that “the antenna is very much OK,” while admitting that “we are not consulting engineers.”24 Furthermore, the “field mans’ ” qualifications were never determined.
Why the Commission was required in passing on KDAB’s application to consider the possibility that the proposed move might have been motivated by more than just multipath problems appears evident. From the Ogden antenna farm at Little Mountain, KDAB could send Salt Lake City only a relatively low quality “primary service” 25 signal. From Farnsworth Peak, however, KDAB could blanket Salt Lake City with a high quality “city grade” signal.26 Moreover, while moving to Farnsworth Peak would eliminate from KDAB’s service area about 10,000 rural listeners located mostly in Box Elder County, Utah,27 the gain of listeners located around Salt Lake City would offset this loss more than twenty times over. About 232,000 people who did not receive service from KDAB before the proposed move would be added if KDAB relocated at Farnsworth Peak.28 And because most of those added would be •in the urban Salt Lake City vicinity, the added listenership represented a more concentrated and perhaps more affluent market, and therefore consequently demographically more attractive to KDAB’s potential advertisers, than the scattered rural residents of Box Elder County.
In any event, KALL-FM, now joined by another Salt Lake City station, KISN-FM, was concerned that from the new site KDAB would be a more formidable competitor in Salt Lake City. Both stations filed petitions with the FCC to deny KDAB’s application,29 using many of the same arguments advanced at the time of KDAB’s first attempt to locate at Farnsworth Peak, supplemented now by the additional argument that sites free of multipath interference were available for KDAB’s use in the Ogden vicinity.30 This time around, how[8]*8ever, the Salt Lake City opposition went unheeded; in February 1978 the FCC granted KDAB’s application.31
The Commission held that KALL and KISN not only had failed to show that KDAB’s proposed relocation would amount to a de facto reallocation of an Ogden FM channel to Salt Lake City32 but also had failed to refute KDAB’s claim that a move to Farnsworth Peak would improve reception in Ogden by eliminating multipath interference.33 Noting that Ogden would get as strong a signal as required by Commission rules from Farnsworth Peak,34 the Commission refused to consider as material the fact that Salt Lake City would be getting an even stronger signal than Ogden.35 In truth, in the Commission’s view KALL and KISN had fallen so far short of showing that KDAB’s new transmitter site would de facto reallocate an Ogden channel to Salt Lake City that they had failed even to raise a sufficiently substantial and material question of fact to require an evidentiary hearing pursuant to section 309(d)(2) of the Communications Act.36
KALL and KISN were not satisfied. They petitioned for reconsideration,37 arguing that the FCC had failed to follow its own precedent in ruling on the de facto reallocation issue, and alleging that the FCC had violated its own rules and the Communications Act in relying on KDAB’s unverified engineering statement by an antenna company “field man” of unknown qualifications. In addition, they submitted a supplemental engineering statement38 which concluded that even a portion of Ogden itself stood to lose the required “city grade” service from KDAB.
The Commission was unimpressed; in June 1978 it affirmed its previous order by denying the petition for reconsideration.39 The Commission found the alleged shortfall in signal strength over Ogden to be “de minimis,” because 99% of the Ogden population would still receive the signal strength required by the FCC rules and the shortfall for the remaining 1% would be only 1 dbu out of 70 dbu.40 The FCC’s attitude was permissive: “Once the channel has been assigned to a community by rulemaking, an applicant is generally free to choose any site so long as it provides the community of license with the degree of service prescribed by Section 73.315 of the Rules.”41
B. The KZAN Application
The KZAN story is similar to KDAB’s, with some wrinkles of its own. It begins in 1973, after KALL’s petition for dismissal of KDAB’s application already had been filed. At that time a second company, Group Communications, Inc. (Group), filed an ap[9]*9plication42 with the FCC to construct another new FM broadcast station (later to be designated KZAN) allocated to Ogden, Utah, but to broadcast from Farnsworth Peak. In view of its opposition to KDAB’s proposed move, it is not surprising that KALL immediately also filed a petition for dismissal of the KZAN application,43 using the same arguments it had used in opposition to KDAB’s proposal to locate on Farnsworth Peak: that operation of an Ogden channel from a site close to Salt Lake City used by Salt Lake City stations would be tantamount to reallocating the channel to Salt Lake City in violation of the Commission’s rules and' the Communications Act. KALL asked the Commission either to dismiss the KZAN application or alternatively to designate it for a hearing to determine whether the proposed operation of the new station from Farnsworth Peak would be consistent with the requirements of the table of assignments.
At about the same time yet another company, Ben Lomond Broadcasting Co., filed an application to build an Ogden FM station.44 Ben Lomond applied for the channel Group wanted, so its application was mutually exclusive with that of Group. Unlike Group, however, Ben Lomond Broadcasting proposed a transmitter site only a few miles west of Ogden on Little Mountain. Of course, in a comparative hearing to determine which applicant would better serve Ogden, Ben Lomond would have had a clearcut advantage over Group because it planned to put its transmitter near Ogden whereas Group was asking for a location close to Salt Lake City.
■ About five years passed with the mutually exclusive applications of Group and Ben Lomond Broadcasting languishing in the Commission’s files. Then, in June of 1978, one day after the FCC issued its order affirming its approval of KDAB’s move to Farnsworth Peak, Group and Ben Lomond Broadcasting asked the Commission to approve a settlement agreement they had reached between themselves.45 Under the agreement, Group dismissed its application in exchange for a 20% minority interest in Ben Lomond Broadcasting, and Ben Lomond amended its application to substitute Farnsworth Peak as the proposed site of its transmitter.
The record does not disclose the basis of this agreement. But it is easy to speculate that there was something in it for both parties. The original Ben Lomond Broadcasting Co. eliminated the cost, risk, and delay of a comparative hearing and obtained assurance that the Commission, if it approved a construction permit for a new Ogden station, would grant the license to Ben Lomond — not a competitor. Group which had gambled by filing for a transmitter location at Farnsworth Peak (and had attracted the rival application of Ben Lomond), now had a sure thing — a 20% share in a station broadcasting from the desired lucrative site at Farnsworth Peak. Once it became clear, after the FCC’s decision on KDAB’s proposal, that the Commission would permit Ogden stations to broadcast from Farnsworth Peak, both parties may have felt it to be to their advantage to share in the spoils rather than to continue to fight.
KALL, of course, opposed the joint application as much as it had opposed the original application of Group to broadcast at Farnsworth Peak. It filed a statement with the Commission46 suggesting that the amendment to change the transmitter location in the Ben Lomond application was a major amendment which, under FCC rules, would require the FCC to assign the application a new file number and return it to the beginning of the processing line. [10]*10KALL was also quick to point out that neither Group nor Ben Lomond Broadcasting had at any time claimed that the Little Mountain transmitter site originally proposed by Ben Lomond would be subject to multipath interference, nor did the amended application of the new Ben Lomond Broadcasting provide a justification for a Farnsworth Peak site.
The Commission, however, having determined to permit Ogden stations to broadcast from Farnsworth Peak, held the new Ben Lomond application to be governed by the Commission’s previous action on KDAB’s application. It then granted47 Ben Lomond’s application to build KZAN. At which point KALL and KISN appealed in separate actions to this court from the Commission’s actions in permitting KDAB and KZAN to locate at Farnsworth Peak without a hearing on the public interest questions involved. KDAB and KZAN intervened to support the Commission’s actions in their favor.
II. THE TABLE OF ASSIGNMENTS SYSTEM
Underlying the issues in these cases is the question whether the Federal Communications Commission has properly discharged its responsibilities under section 307(b) of the Communications Act of 1934, as amended, to: “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.”48
The phrase “fair, efficient, and equitable” taken alone may seem too vague to determine policy, but its legislative history as interpreted by this court49 discloses the significance Congress attached to those words. The predecessor of the present section was first enacted in 1927 as part of the original Radio Act of 192750 and was designed to provide “an equitable distribution of stations over the entire country.” 51 Just one year after passage Congress amended the section with detailed instructions as to how an “equitable distribution” was to be accomplished. The nation was divided into five “zones”; the Commission was directed to allocate broadcasting service to each zone and the various states by a formula based on population.52 In practice, however, this mechanical approach proved unsatisfactory. What resulted was a “concentration of the use of frequencies in centers of population, and the restriction of facilities in sparsely populated states, even though interference consideration [sic] would permit the operation of one or more additional stations.”53 The Commission therefore went to Congress and obtained a modification of section 307(b).54 One of the purposes of the revision was to allow the “sparsely populated” portions of the country, especially in the West, to “secur[e] the facilities we ought to have to meet the demands of that section of the country.”55 The revised form of section 307(b), no longer requiring the application of a rigid formula, remains to this day substantially as enacted in 1936.
Our reading of this section must be informed by this history. The Commission’s duty thus becomes clear. It must forestall excessive concentration of FM assignments [11]*11in larger cities and ensure adequate service to smaller communities and “sparsely populated” regions.
In discharging this duty, the Commission has promulgated a “table of assignments” to distribute frequencies equitably among neighboring regions.56 In developing this table to carry out its section 307(b) mandate, the Commission discovered that smaller communities could not all be assigned FM frequencies without signals from nearby communities interfering with one another.57 To solve this problem, the Commission decided to assign a smaller number of high-powered stations to a limited number of central cities because a single high-powered station could cover not only a central city but provide wide-area service to the suburbs surrounding that city as well. High-powered stations of this type are classified as “Class C” stations by the Commission.58 They are assigned in such a way that each has surrounding it an interference zone at least 65 miles in radius.59 All stations party to these consolidated cases are Class C stations.
Thus, for example, in assigning a Class C FM channel to Salt Lake City, the Commission meant to provide coverage not only for Salt Lake City itself but for the surrounding suburbs as well. Similarly, in assigning a Class C channel to Ogden the Commission meant that not only Ogden but its suburban communities and outlying regions would receive coverage. Since Ogden is only 33 miles from Salt Lake City, of course, some overlap in these coverage areas is to be expected. A community lying midway between Ogden and Salt Lake City may be within the suburban broadcasting coverage of stations both in Ogden and in Salt Lake City. In fact, Ogden is within Salt Lake City’s protected 65 mile radius, and vice versa. But many communities south of Salt Lake City and north of Ogden are within the guaranteed interference-free coverage area of only one of the two central cities.
Broadcasters, of course, would prefer to locate their transmitters near the largest available city — in this case Salt Lake City — because that is where the largest market ’exists. If left to their own devices broadcasters would congregate around the biggest city in the area. In fact, it was against just this concentration that the current version of section 307(b) was directed.
The FCC’s duties under the statute are not solely substantive, however. Congress has also explicitly specified a quite natural and prudent procedural requirement that the Commission, in carrying out its section 307(b) mandate, hold hearings whenever an application for a transmitter location raises a “substantial and material question of fact.”61 Nonetheless over the years the Commission has occasionally succumbed to the temptation to take a shortcut around this procedural requirement by authorizing — without the required hearings — stations licensed to smaller communities to locate their transmitters near larger neighboring markets. The resulting controversies have twice ended in actions reaching this court.
For example, seventeen years ago this court considered a situation quite similar to the circumstances of the present case in [12]*12Wometco Enterprises, Inc. v. FCC.
A similar situation arose once again in 1965 in Louisiana Television Broadcasting Corp. v. FCC.
The Baton Rouge station then appealed to this court. And once again this court remanded the case to the FCC for a hearing.68 We pointed out five public interest questions involved, including whether the public interest warranted degradation in the signal strength at Houma and whether the move amounted to a de facto reallocation of a channel from Houma to Baton Rouge.69 In remanding the case for a hearing, we made our position clear: “to allow the Commission to determine without a hearing the issue of whether [the Houma channel] would be reallocated might be to allow the possibility of summary and sub silentio overruling of a policy [the table of assignments] established through the rule-making process and might deprive others of [13]*13an opportunity to compete for [the Houma channel]. Both the Court and the Commission have recognized that the significance of such an issue requires a full hearing. . . ,”70
In the aftermath of Wometco Enterprises and Louisiana Television Broadcasting the FCC followed the directions of this court by holding hearings when stations proposed to move their transmitters to locations closer to larger nearby markets and substantial questions of fact regarding the true purposes and likely results of the moves remained open. In Santa Fe Television, Inc.,71 for example, the FCC ruled in 1969 that a hearing was required before it could determine whether to permit a Santa Fe, New Mexico, television station to locate its transmitter at a site used by Albuquerque stations only 14 miles from Albuquerque, New Mexico, but 43 miles from Santa Fe. The Santa Fe station had argued that the move to the proposed site was necessary because receiving antennas throughout New Mexico — including those in Santa Fe— were pointed at that site. Thus, the station argued, reception in Santa Fe would actually be improved if the station were located near Albuquerque at the same site used by Albuquerque stations.72 Nonetheless the Commission quite correctly ruled that a hearing was needed to determine if a de facto reallocation might result.
Also in 1969 the FCC issued its leading decision in Berwick Broadcasting Corp.
After a hearing, the FCC found against the broadcaster.77 It noted that “an adverse inference was raised by the fact that [the broadcaster] proposed to locate its transmitter site midway between the two communities and thereby provide maximum [14]*14coverage of the Wilkes-Barre area,”78 and concluded that the broadcaster had “failed to meet its burden of proof” 79 to “rebut the adverse inferences stemming from these facts.”80
Berwick thus stands for the proposition that a proposed transmitter location so close to a larger market as to raise a serious question of fact as to the applicant’s true intent requires a hearing to resolve that question, particularly if other factors support the suggestion that the applicant in fact desires to serve the greater market. A suitable explanation may be forthcoming, of course. But it is up to the applicant to provide' one.
The “Berwick doctrine,” as it has come to be known, historically resulted from the extension to FM licensing of a similar policy, the “Suburban Community” doctrine, previously applied by the FCC to licensing questions involving standard broadcast (AM) stations.81 As such, it can be distinguished from the de facto reallocation doctrine at issue in Wometco Enterprises, Louisiana Television, and Santa Fe Television.
III. THE FACTORS SUGGESTING A HEARING IS NECESSARY TO DETERMINE INTENT
The cases we have just recounted comprise the leading examples of situations in which either the Commission or this court has found that “substantial and material” questions of fact exist bearing on the likelihood that a transmitter location near a larger and more lucrative market will result in a redirection of service to that market from the area of license. When such questions of fact are found to exist, section 309 requires that a hearing be held.84 Other later cases decided by the Commission could be added to the list, but to do so here would merely reinforce by reiteration the factors of decisional significance which reappear again and again in the Commission’s opinions. The factors controlling these four and later cases unfortunately emerge, however, in an unruly and tumultuous welter. None of these four nor any later case purports to isolate the factors that are the principal determinants of whether a factual issue exists regarding intent, or to decide which factors or how many should be decisive on the hearing issue.
It is true, of course, that questions of intent are by their very nature tied to the particular facts presented in each case, and determining an individual broadcaster’s intent or ability to serve this or that city — as the Commission was required to do in the cases before us — requires a flexible, carefully focused investigation into the particular facts of the case at hand. But a focused inquiry is possible only if we know on what to focus.
In the cases before us we are called upon to decide whether the Commission acted arbitrarily and capriciously when it determined that no “substantial and material” questions of fact remained to be answered before it decided to approve transmitter locations on Farnsworth Peak. We could attempt to answer this question by reference to our own thinking and judgment concerning the outer limits of the insubstantial and immaterial. To adopt such a course, however, would be to risk trespassing on the Commission’s territory by putting this court in the business of making broadcasting policy. A safer course would be for us to rely on the past decisions of the Commission and this court to assist us in determining when a question of fact so material and substantial as to require a hearing has been raised. That is the path we intend to follow.
The raw cases taken by themselves, however, provide uncertain guidance because they are not bound together by systematic analysis. The Commission’s expertise in these matters doubtless enables it to determine whether a hearing is required without explicit reference to an organized analysis of the factors of decisional significance on which it relies. Lacking such expertise, however, this court finds it difficult without some sort of map to traverse the dense thicket of factors emerging from these cases. Absent some systematic enumeration of the factors that have proved decisive in the past, we find it nearly impossible to give the principled consideration to the present cases which it is our duty, as a court of law, to provide. And so, because the controlling principles to be applied to the cases before us are presented in confusing disarray, we must first pause before turning our attention to the proper resolution of these cases to create our own map of the factors of decisional significance we must apply here.
Wometco Enterprises, Louisiana Television, Santa Fe Television, Berwick and later FCC decisions establish at least nine factors which have tended in the past to suggest to the Commission or this court that a de facto [16]*16reallocation or Berwick issue must be ventilated in an evidentiary hearing before a transmitter location can be approved. We collect and review those factors here.
(1) This first and most basic factor is the ratio of the population of the city of license to that of the larger city; it is likely that the temptation to cater to a larger market will grow in proportion to the relative size of that market. In Santa Fe Television, for example, the ratio was 37,000 people in Santa Fe to 225,000 in Albuquerque, or a ratio of about one to six.85 In Berwick the ratio was 12,400 to 63,600, or about one to five.86
(2) A second key factor is the ratio of the distance between the proposed transmitter site and the city of license to the distance between the transmitter site and the larger city to which the station may be, in effect, moving. The importance of this factor is obvious. In Wometco Enterprises this ratio was only 56:1287 and in Berwick the site was “midway” between the cities so the ratio was about 1:1.88 Louisiana Television and Santa Fe Television presented more extreme cases with ratios of 18:4789 and 14:43,90 respectively.
(3) A third factor closely related to the second is the expected ratio of the signal strength in the city of license to the signal strength in the larger nearby city. Obviously, an applicant’s plan to provide a stronger signal to a nearby more attractive market raises a doubt whether it intends to serve that market rather than the smaller market to which it is licensed. In Santa Fe Television, for example, the larger city was expected to receive a 96 dbu signal, while Santa Fe was to receive only a 76 dbu signal.91
(4) A fourth factor is whether a portion of the city of license is expected actually to lose coverage or, especially in the case of a Class C station with a duty to serve a widespread coverage area, whether there will be a loss area outside the city of coverage. In Wometco Enterprises no loss was expected in the licensed city,92 but in Louisiana Television 16% of the population of the principal city would have received a weaker signal from the proposed transmitter site than required by FCC regulations.93 In Santa Fe Television 12,000 people northeast of Santa Fe were to receive no television from any source whatever if the proposed site near Albuquerque were authorized.94
(5) A fifth factor of significance is whether the proposed site is already in use by stations assigned to the larger city. In Santa Fe Television the fact that Albuquerque stations were using the proposed site was significant.95 No matter where a station claims to be “located,” if FM tuners receive a signal from the same place as other stations allocated to the larger city, from a purely engineering perspective, the “location” of the station is in the larger city.
(6) A sixth factor is whether the station shares common ownership with an AM station in the larger city and plans to share staff, facilities, or programing with it as well. It is difficult to argue that a station planning to use programing created for a larger market does not plan to serve that market. In Berwick the FCC placed weight on the planned joint use of the staff and facilities of the broadcaster’s AM outlet in the larger city.96
[17]*17(7) A factor directly bearing on the ultimate question of intent is whether the station has evinced a prior interest in locating in the larger market. Because it is subject to manipulation, however, the absence of this factor is not significant. A station carrying out a sophisticated plan can easily avoid showing its hand at too early a stage. The presence of this factor, however, may be telling. If a station already has manifested an attraction toward a larger market when it proposes a transmitter location near that market, it is hard to ignore the possibility it still has designs to serve that market. Both in Berwick and in Louisiana Television this factor was present and significant, but its absence was not a consideration in either Santa Fe Television or Wometco Enterprises.
(8) Another extremely telling factor would be a proposal to move the studio as well as the transmitter to the larger market, though in none of the eases we have discussed were plans to move the studio a factor. Should a station ask for permission to relocate its studio as well as its transmitter, its intentions would be plain to all. As a result, this is a factor unlikely often to arise in real cases. After all, in this age of satellite communications, it may well be that a station would be willing to locate its studio in the Nevada desert if that were the price of positioning its transmitter on the World Trade Center in Manhattan.
(9) A final factor to be considered is whether there is some unique advantage to the site proposed. In Santa Fe Television it was suggested that television antennas throughout the state were already pointed at the proposed site and none other.97 This “advantage” did not carry the day and the FCC ordered a hearing in spite of it. But in other cases unique advantages of terrain or otherwise might sufficiently explain a proposed transmitter location without a hearing. The required showing will rarely be possible, however, because it will be necessary for the proposing station to demonstrate that no other site closer to its primary market will do; showing a negative beyond dispute is not often easy.
These nine factors culled from the leading precedents provide a framework helpful to this court for determining whether the Commission’s actions in the present cases are not arbitrary and capricious in light of previous Commission actions and the past decisions of this court. That we have extracted these factors from the decided cases for our convenience here should certainly not be read to suggest that this court is laying down a novel per se rule requiring the Commission to hold full evidentiary hearings in all cases where an application proposes to acquire the ability to serve a larger market than he now serves, thereby altering the settled judicial policy of deference to the Commission in determining when a hearing is necessary under section 309. Such a rule would represent a usurpation of the role delegated to the Commission of deciding in the first instance when a hearing is needed to resolve a substantial and material question of fact. It would indeed be novel and unwise for this court to impose any such absolute procedural requirement in an area where the expert judgment of the Commission is, and should be, paramount.
Our purpose here is quite to the contrary. By following the Commission’s own analysis — as well as that to be found in earlier decisions of this court — rather than applying our own judgment de novo on the issue whether substantial and material questions of fact exist in the cases before us, we seek not to undermine the Commission’s authority to set policy in this area. Instead, we explicitly rely here on what analysis we can glean from past decisions, not on our own invention. Obviously, by merely collecting together in one place the factors which in the past have propelled this court and the [18]*18Commission itself to require a section 309 hearing, we in no way intend to foreclose future Commission action so long as it is accompanied by a reasonable explanation in harmony with the Commission’s statutory obligations to hold hearings whenever a “substantial and material” question of fact remains in dispute. The Commission is free to add to the list of factors we have collected, subtract from the list, or, of course,reject the list outright. Given the task of reviewing the present cases, however, and pending any further enlightenment that may be forthcoming from the Commission regarding its policies on the hearing issue, we prefer to use the factors we can cull from past cases as a baseline for deciding the cases before us, rather than inject ourselves into the agency’s policymaking process.
IV. THE KZAN AND KDAB MOVES IN LIGHT OF THIS ANALYSIS
A. The Applicable Standard of Judicial Review
At the threshold of our inquiry into the Commission’s decisions in the cases before us it is appropriate to fix firmly in mind the extent of our review. We must be mindful that it is the Commission — not this court — to whom Congress gave the authority to determine in the first instance whether issuance of construction permits and licenses meets the various requirements set down by statute, FCC regulations, and precedent; and it is the Commission — not this court — to whom it gave the authority in the first instance to decide whether it will make that determination only after a full hearing.
In the cases now before us the only questions properly open for consideration are whether the FCC could make the factual determinations it did without benefit of a “full hearing,” which is required by statute only in those cases where an application filed under 47 U.S.C. § 309(a) raises a “substantial and material question of fact,” or where “the Commission for any reason is unable to make the finding” of public interest, convenience and necessity required by section 309(a). Under the settled law of this Circuit, our court has a very limited role in reviewing the Commission’s denial of a section 309 hearing. As we have said: “the scope of our review is quite narrow; we defer to the expertise and experience of the Commission within its field of specialty and reverse only where the Commission’s position is arbitrary, capricious or unreasonable . . . [a]nd it is clear that the decision of when hearings are necessary or desirable to clarify issues is one which lies in the first instance with the Commission.” For example, in National Association for Better Broadcasting v. FCC98 we considered an appeal from an FCC decision to renew a television broadcast license without a full hearing because the Commission had found no substantial and material question of fact in dispute, and because the appellants had failed to present prima facie evidence that a license renewal would not be in the public interest. We said:
Section 309(d) provides that the FCC shall grant or renew a license if it finds, after considering the application and all pleadings submitted, that there “are no substantial and material questions of fact and that a grant of the application would be consistent with [the public interest].” Any “party in interest” objecting to the renewal may file a petition to deny. A petitioner’s allegations must be both “substantial and specific,” sufficient “to show that ... a grant of the application would be prima facie inconsistent with [the public interest];” “allegations of ultimate, conclusionary facts or more general allegations on information and belief, supported by general affidavits ... are not sufficient.” Where the Commission finds that such a showing has not been made, it may refuse the petition, “issu[ing] a concise statement of the reasons for denying the petition, which statement shall' dispose of all substantial issues raised by the petition.”
[19]*19Aside from the sufficiency of the petition to deny, a hearing will not be required where the facts are undisputed, and the “disposition of [an appellant’s claims [turn] not on determination of facts but inferences to be drawn from those facts.” [sic] Finally, a hearing is not required to resolve issues which the Commission finds are either not “substantial” or “material,” whether or not the underlying facts are disputed.
We review the Commission’s decision to determine if it reasonably concluded that there were no “substantial and material questions of fact” and that license renewal would be in the public interest.
The extent of our review in such cases as this is narrow. “We defer to the expertise and experience of the Commission within its field of speciality.” The decision whether to hold hearings “is a matter in which the Commission’s discretion .. [sic] is paramount.” Although we must be satisfied that the Commission took a hard look at all the relevant issues, if the Commission’s action was not arbitrary, capricious or unreasonable, we must affirm.99
That statement could not be clearer in according to the Commission primary responsibility and wide discretion to decide whether a hearing is necessary. In the case of an FCC decision not to hold a hearing under section 309, as in the case of other agency actions, this court does not substitute its judgment on the facts and substantive issues for that of an agency. We have not the competence, desire, or time to redo an agency’s work.
But the Commission’s decision not to hold a hearing is nonetheless subject to review, just as are other agency actions. In reviewing agency decisions we do examine at least four questions: First, was the action taken within the agency’s powers under its basic statute? Second, was the procedure followed by the agency correct, that is, was there administrative due process? Third, was the result reached supported by substantial evidence? And, fourth, was the rationale by which the agency reached its result logical, that is, was there a demonstrated logical connection between the evidence adduced and the conclusion reached by the agency or was the agency action arbitrary or capricious? These four questions are at the core of judicial review of administrative agency actions.
The agency conclusion under review here is the FCC’s determination that no “substantial and material question of fact” exists regarding whether the public interest would be served by the location of the transmitters of Ogden stations near Salt Lake City. This agency conclusion raises no questions requiring an inquiry here into the scope of the FCC’s authority under its statute. Nor does this FCC action raise any purely procedural questions which this court must reach;100 Congress preempted the key procedural issue when it specified that the Commission shall hold hearings whenever a “substantial and material question of fact” remains to be resolved. Our inquiry here is focused solely on whether the FCC’s determination that there was no “substantial and material question of fact” flowed logically from the evidence in the record. To help us to determine whether a question requiring a hearing exists on the basis of the record as it now stands, we turn for guidance to the past determinations on this same question by this court and by the Commission itself as summarized by the analysis of precedent given above.
B. Are There Unresolved Questions of Fact in These Cases?
When we examine the circumstances of the cases before us in the light of the factors of decisional significance we see immediately that five of these factors tilt strongly against the applicants. (1) The population ratio of Ogden101 to Salt Lake [20]*20City102 is substantia], about 1:2.4. (2) Likewise, the distance ratio is 41:18,103 startlingly similar to the ratios of 47:18 and 43:14 in Louisiana Television104 and Santa Fe Television,105 and much higher than the one-to-one ratio in Berwick
On the other side of the ledger, four of the nine factors, while not leaning much in favor of KDAB and KZAN, at least do not weigh against them. While both stations have shown some prior interest in the Farnsworth Peak site, neither has gone so far as (7) to request designation as a station serving Salt Lake City. But this is hardly surprising in view of the Commission’s recent rejection of a proposal to add another channel near Salt Lake City;113 such a direct and candid approach, while commendable, would have been tactically foolish in view of the weight the Commission is known to place on such prior attempts when ruling on transmitter relocation proposals. For similar reasons, it is difficult to put too much importance on the absence in the plans of each station of any proposal either (6) to share programing with a Salt Lake station or (8) to move the studio as well as the transmitter. (9) Which leaves only one factor of nine left available to support the proposals for a Farnsworth Peak site: the suggestion that Farnsworth Peak has unique advantages for minimizing multipath interference. But even here the case on the record is weak. The uniqueness of the site is hotly disputed114 and far from [21]*21proven, as indeed is even the existence of a multipath problem.115
In sum, of the nine factors culled from past cases bearing on the issue whether a factual question of the true intent of these applicants exists which must be answered in an evidentiary hearing, five weigh heavily against them, three are of little weight one way or the other, and at least one can fairly be described as unresolved on the record as it now stands. Using the analysis we have gleaned from Wometco Enterprises, Louisiana Television, Santa Fe Television, and Berwick, we must conclude that a substantial and material question of the intent of KDAB and KZAN has been raised but not resolved on the paper record.
[22]*22C. The Commission Response
The Commission, however, purports to resolve these cases without a hearing. In support of its summary disposition of the de facto reallocation questions at issue here, the Commission notes that both KDAB and KZAN are operating from Ogden studio locations and intend to continue doing so;116 that from Farnsworth Peak both' stations comply, or nearly comply, with the requirement117 that a station provide a minimum signal to the city of license; and that both stations will better serve the FCC guidelines118 favoring the combination of the highest possible antenna and the smallest possible transmitter from the heights of Farnsworth Peak than from Little Mountain. Finding the applicants thus in literal compliance with the Commission’s rules concerning transmitter and studio location, the Commission argues that the stations opposing the move “have a very heavy burden to demonstrate that the Commission’s grant of these applications without an evidentiary hearing was arbitrary and capricious.” 119
In making this suggestion the Commission ignores the obvious fact that the cases before us are controlled by decisional law buttressing Commission rules against de facto subversion, not by the bare rules themselves. AH the key early cases cited to us, Wometco Enterprises, Louisiana Television,
Moreover, the parties opposing the applications for transmitter relocation in these cases hardly were required to bear a “very heavy burden.” In Wometco Enterprises, for example, this court remanded the cases to the FCC for evidentiary hearings solely on the basis that each of the stations involved had applied “for permission to move its transmitter to a point ... in the direction of [the larger market in] Miami, with additional coverage but without loss of previous coverage”;
In fact, the Commission’s earlier decisions prudently put the burden on the broadcaster asking for permission to move toward a more lucrative market, not on the opposition. For example, the FCC’s second opinion in the Berwick case, after the remand for a hearing, is replete with references to the presumption operating against the party seeking to move its transmitter.122 In Santa Fe Television, the burden of proof at the evidentiary hearing ordered by the Commission was again explicitly placed on the television station seeking to locate near the larger market.123 The record is thus plain that the FCC requires the broadcaster with suspect motives to do the explaining.
The Commission is apparently aware that it is almost impossible to justify its actions in the cases before us on the basis of its earlier decisions; in its brief it nearly admits as much when it argues that “the types of questions raised with respect to de facto reallocation and Berwick issues largely confine each case to its own facts.”124 In keeping with this argument, the Commission attempts to distinguish the key cases from the present controversy by pinpointing the factual differences among them. The Commission notes125 that in Louisiana Television, for example, de facto reallocation was not the only issue; FCC rules concerning minimum interstation mileage and policies concerning the development of UHF broadcasting were part of the case as well. Santa Fe Television is also different, the Commission argues,126 on three counts: the suburban loss area northeast of Santa Fe would have been left without TV service from any source while in the present cases Box Elder County may continue to receive FM from other stations; there were no multipath problems alleged in Santa Fe while such interference is claimed for Ogden; and the claims that other suitable sites were available were “more substantial” than in the present cases. To distinguish Berwick the Commission notes127 that it involved shared AM programing, while the present proposals do not. And so forth.
In thus attempting to distinguish the pri- or cases, the Commission has run amok with a venerable common law method. Distinguishing cases on the basis of principled differentiations is one thing; consciously setting out to “confine each case to its own facts,” another — one which would virtually eliminate all precedent. After all, finding factual variations from case to case is a trivial task, and to say a case has been confined to its facts is just a polite way to say it has been ignored. But the Commission cannot be so cavalier with its own precedent and those of this court without suggesting that the rationale by which it is reaching its conclusions is either illogical or sub rosa, and thereby inviting reversal. To us, the precedent is clear: in the cases before us six of the nine key factors discussed in the leading cases are probably present — and five of those six undisputedly so.128
[24]*24In its arguments to us the Commission, of course, emphasizes the absence in these cases of the three remaining factors: relocation of studios,129 previous efforts to have the channel reassigned,130 and duplication of programing and sharing of staff and facilities with a co-owned station in the larger market.131 But the absence of these factors is of little weight, though their presence might be significant. The first of these three is mostly of theoretical interest. In not one of the leading cases was there any mention in the opinion about a proposal that the studio be moved. Such a proposal would be too obvious a signal of illegitimate intent and of only modest benefit to the broadcaster, and, in fact, would violate FCC rules.132 The second and third factors are no less manipula-ble. No sensible station would go to the trouble of applying to have its channel reassigned by FCC rulemaking if it could accomplish the same result with a simple transmitter relocation neatly achieved without so much as a hearing, as KDAB and KZAN appear to have done. This is especially true now that it is well known that an honest proposal for reassignment will be rewarded with diminished prospects for subsequent approval of a transmitter relocation application. And for the same reason, because it is now understood that the FCC frowns on the sharing of staff and facilities with a co-owned station in a neighboring larger city, no station would propose to take advantage of such paltry economies at the risk of losing access to a highly lucrative new market. In fact, the importance to a broadcaster of such petty savings fades in direct proportion to the attractiveness and size of the larger market into which it hopes to move. In sum, the weight and emphasis the Commission gives to these thin arguments merely underscore the weakness of its position.
Having thus attempted to dispose of its own early decisions as well as those of this court, the Commission refers us to several of its recent decisions. All but one of these were decided by the Commission after its decisions in the cases now before us for review.133 In view of our disposition of these cases today, these later Commission decisions, which rely on the cases we remand, provide little authority. One decision to which we have been referred, Public Service Broadcasters, Inc.,
V. CONCLUSION
We thus conclude that the Commission erred in deciding that no “substantial and material” questions of fact were present in the record before it. In fact, beyond the question of intent, other factual [25]*25matters remain inadequately explored as well. We believe substantial questions of fact remain to be answered in at least three areas of concern. These questions include: (1) the area of loss both within the city of license (Ogden) and the widespread coverage area outside the immediate Ogden area; (2) the degree of degradation of the signal in the city of license (Ogden) compared with the strength gained in the larger market (Salt Lake City); and, of course, (3) whether the programing of these stations will adequately serve Ogden’s needs if the stations are allowed to use Farnsworth Peak. Because we believe these questions may raise substantial considerations under the “suburban community” policy or the “de facto reallocation” doctrine, we believe the Commission’s decision to act without a hearing was plainly unreasonable in this case. The overwhelming weight of authority both from this court and the Commission itself compels us to direct the Commission to hold evidentiary hearings to determine the factual questions which must be resolved before the Commission can properly decide whether permitting these nominally Ogden stations to locate their transmitters at a site previously used only by Salt Lake City stations will subvert the policies of the table of assignments by de facto reallocating these stations to Salt Lake City.
The table of assignments does not specify that stations will be allocated to the Salt Lake City-Ogden metropolitan area; rather it allocates seven channels to Salt Lake City alone and four channels to Ogden alone. Perhaps this split allocation was a mistake. Perhaps the public interest would better be served by an allocation of eleven channels to the Standard Metropolitan Statistical Area surrounding both Ogden and Salt Lake City. Perhaps it makes no sense to identify Class C stations surrounded by 65-mile interference-free zones as licensed to one or the other of two cities separated by only 33 miles. If so, the Commission has an affirmative duty to commence rulemaking proceedings to modify the table of assignments to rectify this situation. But in the meantime it is unfortunate that it is once again necessary for this court to remind the Commission that the “summary and sub silentio overruling of a policy established through the rulemaking process” cannot be tolerated.135
We reverse and remand these cases to the Commission for proceedings consistent with this opinion. Throughout this opinion we have emphasized that, on the basis of the record before us and applying what we understand to be the Commission’s policies as revealed by past cases, we are forced to conclude that substantial and material questions of fact remain to be answered. We recognize, however, that the Commission, by modifying its policies and practices, could affect the nature of and the extent to which an evidentiary hearing is required. Should the Commission choose not to hold an evidentiary hearing on remand, that decision, of course, could be the subject of future judicial review. As to the merits of [26]*26these cases, we offer no view regarding how they should be decided.
So Ordered.
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