Office of Communication of the United Church of Christ v. Federal Communications Commission and the United States of America

826 F.2d 101, 264 U.S. App. D.C. 29, 63 Rad. Reg. 2d (P & F) 1065, 1987 U.S. App. LEXIS 10765
CourtCourt of Appeals for the D.C. Circuit
DecidedAugust 14, 1987
Docket86-1278
StatusPublished
Cited by34 cases

This text of 826 F.2d 101 (Office of Communication of the United Church of Christ v. Federal Communications Commission and the United States of America) 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.

Bluebook
Office of Communication of the United Church of Christ v. Federal Communications Commission and the United States of America, 826 F.2d 101, 264 U.S. App. D.C. 29, 63 Rad. Reg. 2d (P & F) 1065, 1987 U.S. App. LEXIS 10765 (D.C. Cir. 1987).

Opinions

Opinion for the Court filed by Circuit Judge BORK.

Dissenting opinion filed by Chief Judge WALD.

BORK, Circuit Judge:

Petitioners are organizations, representing various segments of the radio and television audience, that raise public interest issues through involvement in the broadcast licensing process before the Federal Communications Commission. They petition this court to review the Commission’s Policy Statement on Tender Offers and Proxy Contests, 59 Rad.Reg.2d (P & F) 1536 (1986). The Policy Statement asserts that the Commission may temporarily exempt transfers of communications licenses resulting from tender offers and proxy fights from the “long-term” review that license transfers generally must receive under the Communications Act, 47 U.S.C. § 309 (1982). We hold that petitioners’ [103]*103challenge to the Policy Statement is not ripe for judicial consideration and dismiss the petition for review.

I.

A.

An application under the Communications Act to transfer a communications license, in connection with a substantial change in ownership or control of a license holder, requires public notice of the application, a thirty-day minimum waiting period, an opportunity for others to file petitions to deny the application and for the applicant to reply, and a hearing on any substantial and material question of fact. 47 U.S.C. §§ 309, 310(d) (1982). In the Commission’s view, this procedural scheme is ill-suited to a license transfer application arising from a contested attempt to acquire control of the corporate license-holder. In a contest for corporate control, speed, measured in days or hours, is typically essential to success. The relatively time-consuming procedures mandated by the Communications Act for license transfers are thus a handicap to bidders for corporate control. To address this problem, the Commission solicited comments through a Notice of Inquiry, FCC No. 85-349 (Aug. 20, 1985), Joint Appendix (“J.A.”) at 1, which provided the Commission “the opportunity to consider our policies without the extraordinary press [of time] of any [particular contested bid for control].” Policy Statement on Tender Offers and Proxy Contests, 59 Rad.Reg.2d (P & F) 1536, 1538 (1986). The result of this consideration was the Policy Statement.

In the Policy Statement, the Commission claimed the power to postpone the long-form review process required by the Communications Act for license transfer applications filed as a result of tender offers. It found this power in section 309(f) of the Act, 47 U.S.C. § 309(f) (1982), which permits the Commission to authorize a license application for a limited time without long-form review if the Commission “finds that there are extraordinary circumstances requiring temporary operations in the public interest and that delay in the institution of such temporary operations would seriously prejudice the public interest.”1 Policy Statement, 59 Rad.Reg.2d (P & F) at 1568-78. The Commission further suggested a likely structure for the Special Temporary Authority (“STA”) it proposed to grant under section 309(f) in the tender offer setting: the trustee of an interim voting trust would, subject to various limitations, hold and vote shares of the target licensee tendered to the bidder, as well as oversee the target’s operations, pending long-form review of the share transfer from trustee to bidder. Id. at 1562-68.

The Commission concluded the Policy Statement as follows:

Finally, this Policy Statement is intended to provide a framework for the regulatory treatment of tender offers and proxy contests involving Commission licensees or companies with controlling interests in Commission licensees. The adoption of this Policy Statement, however, is not intended to foreclose the Commission, in a particular proceeding, from adopting a different approach if warranted in specific circumstances.

59 Rad.Reg.2d (P & F) at 1584 (emphasis added). See also In re MacFadden Acquisition Corp., 104 F.C.C.2d 545, 547, 560 (1986) (Policy Statement “reinforced and [104]*104refined the rulings in [Commission’s] adjudicatory cases” and “was intended as a general guideline” in which Commission “recognized” that “specific cases might require a degree of flexibility”).

B.

Petitioners contend that tender offers are not “extraordinary circumstances requiring temporary operations in the public interest,” within the meaning of section 309(f). They also claim that what “would seriously prejudice the public interest” is not the “delay in the institution of such temporary operations” that the STA procedure purportedly avoids but the attempt to avoid delay in the tender offer setting through the STA procedure itself.

According to petitioners, neither the language nor the legislative history of section 309(f) permits the Commission to characterize tender offers as “extraordinary circumstances requiring temporary operations in the public interest” because tender offers are not “extraordinary” numerically and do not affect “operations” pursuant to a license. But petitioners primarily argue that the STA arrangement proposed in the Policy Statement would prejudice the public interest by frustrating petitioners’ legally protected ability under sections 309(d) and 310(d) of the Act to bring a petition to deny the license transfer from the target license holder to the bidder by reference to the target’s past operations. See California Ass’n of Physically Handicapped, Inc. v. FCC, 778 F.2d 823, 830-31 (D.C.Cir.1985) (Wald, J., dissenting). Such a petition to deny would arise in one of two situations: (1) the target’s operations were deficient, such that the target’s right to its license has effectively lapsed and it has nothing to transfer; or (2) the target’s operations have been superlative, and the bidder’s future operations promise to be materially lower in quality. The Commission’s grant of an STA under section 309(f) by its terms is exempt from the petition to deny permitted by a long-form proceeding; in the subsequent long-form proceeding not the target but the trustee is the licensee. Since section 310(d) of the Act expressly prohibits reference in a transfer proceeding to operations by any person other than the licensee or the proposed licensee, see WNCN Listeners Guild v. FCC, 610 F.2d 838, 852 n. 37 (D.C.Cir.1979) (en banc), the Commission’s proposed procedure therefore renders impossible any reference to the target’s operations in a petition to deny. Petitioners also claim that the trustee’s “caretaker” management of the target under the STA could have adverse effects on its programming, and that the difficulties of unwinding a transaction once the STA has been granted will unduly prejudice the Commission in favor of granting the bidder’s proposal long-form approval.

II.

We do not address the merits of petitioners’ contentions because we find that their petition is not ripe for review.2

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826 F.2d 101, 264 U.S. App. D.C. 29, 63 Rad. Reg. 2d (P & F) 1065, 1987 U.S. App. LEXIS 10765, Counsel Stack Legal Research, https://law.counselstack.com/opinion/office-of-communication-of-the-united-church-of-christ-v-federal-cadc-1987.