Kentucky Broadcasting Corp. v. Federal Communications Commission

174 F.2d 38, 84 U.S. App. D.C. 383, 1949 U.S. App. LEXIS 3788

• Court: Court of Appeals for the D.C. Circuit
• Decided: April 6, 1949
• Docket: 9856
• Status: Published

Opinion

CLARK, Circuit Judge.

By this appeal we are asked to review a final decision of appellee, Federal Communications Commission, released on October 24, 1947, which granted the application of intervenor, Mid-America Broadcasting Corporation, for authorization to construct and operate a new standard broadcast station, and which denied the application of appellant, Kentucky Broadcasting Corporation, Inc., for the same facilities.

On November 16, 1944, Mid-America filed with the Commission its application fo-r authorization to construct and operate a new standard broadcast station at Louisville, Kentucky, on the frequency of 1080 kc with one kilowatt power night and five kilowatts power day. 1 This application 'by Mid-America was held in status quo until the lifting of the Commission’s “wartime freeze policy” on October 7, 1945.

On September 24, 1945, appellant (Kentucky), then and now licensee of Station WINN at Louisville, operating on 1240 kc, with 250 watts power, unlimited time, filed its application for a change in frequency from 1240 kc to 1080 kc and for an increase in power from 250 watts to one kilowatt night and five kilowatts day (the identical facilities sought by Mid-America).

There was also on file with the Commission an application by the Indiana Broadcasting Corporation, Inc., licensee of Station WIBC, Indianapolis, Indiana, operating on the adjacent frequency of 1070 kc, for an increase in power from 5 to 50 kilowatts.

These three applications (two of which were mutually exclusive) were consolidated for hearing before a presiding officer. This 'hearing took place on April 22 through 25, 1946. On January 15, 1947, the Commission adopted a proposed decision looking to a grant of Mid-America’s application and a denial of that of Kentucky. By order of April 4, 1947, the Commission severed and granted the application of Indiana, thus leaving for comparative consideration the mutually exclusive applications of Kentucky and Mid-America. The validity of this severance order is not challenged by any party to this appeal and is not in issue in the case. 2

Exceptions and requests for oral argument on the proposed decision having been filed, oral argument was., 'held before the Commission en banc on April 24, 1947. Briefs were thereafter filed with the Commission by Kentucky and 'by Mid-America. On October 24, 1947, the Commission -released its, .final -decision granting the application of Mid-Ame-rioa and -denying that of Kentucky. Following that final decision, Kentucky -filed with the -Commission (1) -a petition for -rehearing based on alleged newly discovered evidence, (2) a -request for -oral argument before the Commission en banc, and (3) a supplemental ■request f-or oral argument. By -memorandum opinion and -order released April 12, 1-948, the Commission -denied these three requests and Kentucky promptly -appealed to this -court. Int-ervenor, Mid-America, is currently operating Station WKLO at Louisville as the result of the grant appealed from 'herein.

We have examined the comparatively small record before us in this case -and see no ground for -disturbing the' decision of appellee -Commission. We shall consider briefly below a few -of the many assignments -of error -raised by appellant. All other -contentions of appellant -not specifically mentioned herein are, -of -course, 'Considered insubstantial.

Kentucky complains that it .is “manifestly -clear” that the Commission in ruling against it “gave consideration and controlling weight to extralegal considerations,” namely, -that the Commission -in its decision attached undue importance to the -fact th-at Mid-America had formerly been granted -a permit t-o construct the facilities it now -operates. 3 As a preliminary, we wish -to state -th-at the Commission’s prior rulings with regard to the same applicant for .the -same facilities cannot properly be characterized as “-extralegal considerations.” But, he that as it may, study -of the record -and of the -several opinions -of the Commission makes -it clear that this factor was definitely not given control-ling, or even substantial, weight below, hut rather was mentioned -in passing by the Commission in support of its -co-m-ment that Mid-America- was no-t then seeking for the first time, to render broadcast service to ¡the Louisville -a-r-ea. We feel the -Corn-mission acted pro-perly in this respect and that Kentucky’s -contention is not supported by tlie record. We 'know ro-f no -rule of law which absolutely precludes the -Commission from any consideration -o-f the priority of applications filed with the -Commission -so long as that consideration -is not the -controlling factor in arriving at a final decision as between two mutually exclusive -applications. It was not the -controlling fa-c-tor -in this case.

Appellant calls attention to the Commission’s prior decision in In re Valdosta Broadcasting Co. et al., 4 and -complains of th-e 'Commission’s failure to follow that decision. In’ the Valdosta -case the Commission granted the application of an existing licensee -and denied the mutually exclusive application for new service and indicated in its decision that, all -other factors being -equal, it would prefer an existing licensee t-o a newcomer. A preliminary answer to Kentucky’s -claim that the Commission erred -in not -following its Valdosta decision is the -rule -of -law -th-at the doctrine of stare decisis is not generally applicable to the decisions of administrative tribunals. 5 Howev-er, even assuming that the 'Commission is bound by i-ts own -prior 'determinations, the Valdosta case is factually distinguishable -from the inst-ant c-ase. In -the Valdosta case -the Commission’s decision -makes it -clear that there the program -proposals -o-f the two -competing applicants were equally meritorious. That is not true in the present case, as will be -seen below, and accordingly there was no -occasion to -indulge in the presumed preference -of -an existing licensee over a newcomer.

The Commission expressly found that on th-e basis -of superior -loc-al programming toe application -o-f Mid-America was to be preferred o-ver that of Kentucky. Thi-s finding -see-ms to have been the chief determinative factor in the -case, -if -any -on-e factor -can -safely he called the deciding -one in a c-ase such -as -this. 6 We find ample and substantial evidence of ¡record to support the finding that Mid-America’s ¡proposed service would better serve the community needs of Louisville ¡and environs than would that of Kentucky. Kentucky is, and was at ¡the time of the ¡proceedings below, a network affiliate. Mid-America proposed, and is now presumably providing, new, local, non-network program service. Mid-America proposed the ¡carrying of musical programs by local organizations -such as the Louisville Philharmonic Orchestra and the Louisville Summer Opera. Kentucky’s proposals ¡contained no such local ¡musical service. Mid-America planned to -broadcast religious programs -from local churches. The -religious programs carried and proposed by Kentucky were solely network programs. Mid-America proposed various locally-originated -programs of cultural, dramatic -and forensic nature. There were no -comparable proposals by Kentucky. Mid-America’s proposed -coverage -far exceeded that of Kentucky with respect to farm programs of immediate interest to -the -rural populace in areas -immediately surrounding Louisville. As to local news service, Kentucky had no members of its staff ¡assigned to gathering local news and obtained such news only from the Associated Press wire service. On the other hand, Mid-America proposed to establish ¡a -staff of three to -gather -and ■disseminate local news, this in ¡addition to providing the usual wire service news broadcasts. It is thus apparent that the ■Commission wa-s completely correct in -deciding in favor of Mid-America on the basis of far superior local program proposal.

A further factor which the -Commission considered ¡and mentioned in its written decisions but which w-as not given -controlling weight was that of local residence of the stockholders and directors of the two competing applicant corporations. 7 In this respect -the two applicants hung in equal balance and there is no doubt that the Commission ¡could -have properly ¡found that either -o-r both met the requisite residence -requirements. Kentucky -allegedly had 70% ¡of its stock -owned by “established residents. • ¡o-f Louisville,” whereas 55.6% ¡of Mid-America’s stock was owned by Louisville residents. However, the -record shows -that the great majority of ’Mid-America’s stockholders and -directors are long-time -residents of Loui-sville, -several of whom were born ¡and raised in Louisville -or nearby in Kentucky. , Almost all -of Kentucky’s stockholders and -directors came -to reside in Louisville since or during World War II. On this state of the ¡record, we -certainly would not- be justified in ruling th-at the Commission arbitrarily or capriciously -chose Mid-America -over Kentucky -on the basis ¡of residence.

Appellant also -contends that the Commission abused its discretion in denying a -rehearing on alleged newly discovered evidence. Appellant -argues -that intervenor lacked the proper -character qualification's of ¡a licensee, that the effect of intervenor’s proposed network -affiliation on its program proposals should ¡have been ¡considered, and that the effect -of the establishment of two new stations -in Louisville upon intervenor’s -ability to render the service it -proposed should have been taken -into ¡consideration.

As to the evidence concerning character qualifications -of interveno-r, there was no attempted explanation of why the ¡alleged facts were not discovered prior to t-h-e original hearing, no verified -statement of facts accompanying the petition, and no proof ¡that the -alleged .newly discovered evidence would, if true, affect -the decision of the -Commission. Section'’1.893(a) of the Commission’s Rules and Regulations provides that: “Where the existence of newly discovered evidence is claimed, the ¡petition must be ¡accompanied by ¡a verified statement ¡of the facts, -together with the facts -relied on to show that the petitioner, with -due diligence, ¡could -not h-ave k-nown or 'discovered such facts, at the time of the hearing.” 8 Almost identical language is contained elsewhere in the Rules and Regulations. 9 Under these circumstances, we do not regard the Commission’s action in striking that portion of the petition for rehearing as erroneous.

As to the possibility of intervenor’s securing a network affiliation in the future and the effect of that possible -future affiliation on intervenor’s proposed local program service, that contingency was thoroughly discussed and considered by the Commission prior to its final decision. The testimony of -one of Mid-America’s directors -and -stockholders .before the presiding officer was to the effect that Mid-America would welcome and accept network affiliation only if such an arrangement would not be “at the sacrifice of local programs.” There was -ample and uncontroverted evidence to support the Commission’s finding that Mid-America’-s proposed local programming would not suffer from a possible future network affiliation.

As to the effect upon Mid-America’s operation under its license of the establishment of two new daytime stations in Louisville which will presumably render local non-network service, the record in this proceeding shows nothing a-s to the effect of these new stations on intervenor’-s proposed service -and the establishment of the two new stations certainly -adds nothing to a determination of which o-f two competing applicants will provide better service. The Commission was correct when it stated: “We do not believe that such factors constitute changed conditions warranting a re-opening of the record; nor do we believe that they effect [yic] Mid-America’s -ability to fulfill its overall program proposals.

Further, it is noteworthy that the operation by Mid-America of the facilities which •it has ¡been authorized to provide will in no way affect the operation by Kentucky of Station WINN as it is presently -licensed to -operate that station.

We hold that the -Commission in thi-s case 'accorded the parties hereto a full and fair comparative hearing as required -by the opinion of the Supreme Court in Asbbacker Radio Corp. v. Federal Communications Commission, 10 and that appellant’s contentions are without legal merit. Accordingly, the decision of the Commission is Affirmed.

1 The record shows that Mid-America had applied for these same facilities as early as February, 1940, and that such application had been granted and a construction permit issued by the Commission. However, due to the Commission’s dismissal without prejudice of appliea-tions for modification of the construction permit, an action requested by Mid-America, the permit expired in 1942.

2 Cf. Mansfield Journal Company v. Federal Communications Commission, 173 F.2d 646.

3 See footnote 1, supra.

4 3 Pike & Fisher R. R. 619 (1946).

5 See State Airlines, Inc., v. Civil Aeronautics Board, 174 F.2d 510.

6 The proposed decision in this case contained the expresa statement that “several factors motivated the Commission’s conclusion that the application of Mid-America Broadcasting Corporation is to be preferred.”

7 It is, of course, generally true that 174 F.2d — Sy¡¡ persons living in a community bavo a better knowledge of local civic affairs, acquaintance with community activities and understanding of local needs and desires.

8 1 Pike & Fischer R .R. 51:415.

9 Section 1.390(e)- provides in part:

“Where the petition is based upon a claim of newly discovered evidence, it must be accompanied by a verified statement of the facts relied upon, together with the facts relied on to show that the petitioner, with, due diligence, could not have known or discovered such facts at the time of the hearing.” 1 Pike & Fischer R. R. 51:235.

10 1945, 326 U.S. 327, 66 Sup.Ct. 148, 90 L.Ed. 108.