Opinion for the court, concurred in by Chief Judge J. SKELLY WRIGHT, and Circuit Judges LEVENTHAL, SPOTTSWOOD W. ROBINSON, III, ROBB and WILKEY, filed by Circuit Judge McGOWAN.
Concurring opinions filed by Circuit Judges BAZELON and LEVENTHAL.
Dissenting opinion filed by Circuit Judge TAMM. Circuit Judge MacKINNON joins in Circuit Judge TAMM’s dissenting opinion.
McGOWAN, Circuit Judge:
In cases culminating with Citizens Committee to Save WEFM v. FCC, 165 U.S.App.D.C. 185, 506 F.2d 246 (1974) (en banc), this court, always in the context of the Federal Communications Commission’s statutory responsibility to pass upon voluntary assignments of radio licenses, construed that responsibility as comprehending the issue of whether the proposed abandonment of a distinctive programing format was in the public interest. In particular, we said that, where a significant sector of the listening community, in opposition to the assignment, protests the loss of such a format by substantial factual allegations that it is both unique and financially viable, the statute requires that the Commission hold a hearing.
Thereafter the Commission, after notice and comment proceedings, issued a “policy statement” disagreeing with WEFM, arguing that the public interest in diversity of entertainment formats is best served by unregulated competition among licensees, and urging this court to repudiate the approach it has taken. Memorandum Opinion and Order, 60 F.C.C.2d 858 (1976) [Policy Statement]; 66 F.C.C.2d 78 (1977) [Denial of Reconsideration ]. Citizens groups interested in fostering and preserving distinctive entertainment formats petitioned this court for review.
I
A.
The basic premise of our format cases 2 is that the Communications Act’s “public interest, convenience, and necessity”3 standard includes a concern for diverse entertainment programing. Congress set aside the radio spectrum as a public resource and acted to secure its benefits, not only to those in the cultural mainstream, but to “all the people” 4 of our richly pluralistic society. It “is surely in the public interest,” therefore, “as that was conceived of by a Congress representative of all the people, for all major aspects of contemporary culture to be accommodated by the commonly-owned public resources whenever that is technically and economically feasible.” Citizens Committee to Preserve the Voice of Arts in Atlanta v. FCC, 141 U.S.App.D.C. 109, 115, 436 F.2d 263, 269 (1970).
Congress delegated to the Commission the task of ensuring that the license grants are used in the public interest. In particular, the Commission must sometimes consider the loss of diversity (together with other factors bearing on the public interest) when deciding assignment applications involving abandonment of existing formats. It must take a “hard look” at the salient problems, including loss of diversity, when making this public interest determination. Greater Boston Television Corp. v. FCC, 143 U.S.App.D.C. 383, 393, 444 F.2d 841, 851 (1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971).
The Commission need not consider the public interest implications of format abandonment, however, when there are compelling indications that the loss in diversity is not serious or that the assignment is otherwise clearly in the public interest. For example, if notice of the change does not precipitate an outpouring of protest,5 the Commission may properly assume that the proposed format is acceptable.6 Similarly, even if a committed and vocal minority engages in significant public grumbling, no public interest issue is raised if their preferred format is the choice of a population segment too small to be accommodated by the available frequencies.7 Finally, no public interest issue arises if there is an adequate substitute for the endangered format within the service area.8 In these situations the evidence is strong that the [324]*324assignment will not result in a troublesome diminution of format diversity. Further, if the format itself is shown to be economically unfeasible in the particular market — i. e., if even an efficiently managed station would have no realistic prospect of economic viability — then abandonment of the existing format does not contravene the public interest and the Commission need not pursue by hearing the alleged loss of diversity.9
If the record presents substantial questions of fact material to the public interest, including the public interest in diversity, the Commission must hold an evidentiary hearing.10 However, no hearing is required when the record presents no substantial questions of material fact. If the only issues of substance are the inferences and legal conclusions to be drawn from known facts, the Commission is free to make the public interest determination and decide the application before it.11 Even when the record otherwise presents substantial fact issues, a hearing is unnecessary if undisputed facts establish any one of those situations discussed above in which no public interest issue arises. Thus, a hearing will rarely be needed to determine that (1) there has been no out pouring of public protest to the format change, (2) the endangered format’s devotees are too few to be accommodated by the available frequencies, (3) there is an adequate substitute in the service area,12 or (4) the format itself is financially unviable.13
B.
In response to our WEFM decision the Commission on January 19, 1976 proposed to reexamine the format question. Development of Policy Re: Changes in the Entertainment Formats of Broadcast Stations, 57 F.C.C.2d 580 (1976) [Notice of Inquiry ]. It expressed “deep[] concern[]” that WEFM threatened “serious adverse consequences for the public interest,” id. at 582, and doubted that “a system of pervasive governmental regulation,” id., could do a better job than concededly imperfect market forces. The “quagmire” of administratively distinguishing among formats militated against regulation, as did the possibility that broadcasters, to avoid being locked in [325]*325to an unprofitable format, would cease experimenting with unusual programing approaches. Id. at 582-84. The “policy,” as the Commission chose to characterize it, imposed by this court also raised questions under the First Amendment warranting “prompt and thorough review.” Id. at 585. The Commission, in short, was “concerned that the course charted by the Court may lead only to expense, delay and stagnation, with no assurance that a decision finally reached by the Commission would be in any sense superior to (or more in the public interest than) that favored by the marketplace.” Id. at 584.
In light of these misgivings, the Commission proposed to reconsider whether it “should play any role in dictating the selection of entertainment formats.” Id. It solicited public comments on the statutory and constitutional considerations described above. It also invited “[pjarties who favor some degree of government involvement” to address a number of questions14 bearing on the practical implementation of WEFM.15
Comments were filed, and on July 30, 1976, the Commission repudiated the WEFM decision on four principal grounds. First, WEFM misread the Communications Act because it imposed “common carrier-like” obligations in violation of congressional intent that broadcasters compete freely16 [326]*326and not function as common carriers.17 Policy Statement, supra, 60 F.C.C.2d at 859-61. Second, the administrative record — in particular a Commission staff study appended to the Policy Statement — demonstrated that competition was highly effective in producing format diversity. Competition, in the Commission’s view, has resulted in an “almost bewildering array” of formats in major markets, id. at 863, and has facilitated listener choice among stations broadcasting the same format, id. at 863-64; conversely, regulation under WEFM would probably deter innovative programing. Id. at 865. Third, administering WEFM would pose vexing administrative problems: formats are difficult to categorize and the costs of a hearing would be enormous, particularly since the doctrine applies logically in license renewals as well as in assignment applications. Id. at 861-63, 864-65. Finally, WEFM improperly invaded First Amendment interests by chilling broadcasters’ programming choices and by imposing an obligation to continue service. In short, WEFM would impose “comprehensive, discriminating, and continuing state surveillance,” 18 which the Commission believed
would be flatly inconsistent with our understanding of congressional policy as manifested in the Communications Act,
contraproductive in terms of maximizing the welfare of the radio-listening public, administratively a fearful and comprehensive nightmare, and unconstitutional as impermissibly chilling innovation and experimentation in radio programming.
Id. at 865-66.
The Policy Statement concluded with a comment on the “partnership” between the Commission and the Court of Appeals. Id. at 865, citing Greater Boston Television Corp. v. FCC, 143 U.S.App.D.C. 383, 444 F.2d 841, 851-52 (1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971). In the Commission’s view, “when such ‘partners’ come to a point of fundamental disagreement, it is incumbent upon us to take a step back and rethink our entire position if this relationship is to be creative rather than destructive.” 60 F.C.C.2d at 865. The Commission contended that in the present docket it had engaged in such a reconsideration; by implication, it requested this court also to take a step back and rethink our WEFM decision. However, the Commission vowed to implement fully WEFM’s specific mandate that a hearing be held in that case. Further, it stayed implementation of its “new policy” until the completion of judicial review thereof. Id. at 866.19
[327]*327The Commission attached two appendices to its Policy Statement. Appendix A was a summary of the comments pro and con on the various issues raised by the Notice of Inquiry. Appendix B was a staff document, prepared after the close of the comment period, which argued on theoretical and empirical grounds that WEFM was not superior to the free market and that competition among licensees had resulted in a high degree of format diversity. Using statistical techniques to test the hypothesis that format type has no effect on audience ratings — i. e., roughly, that the degree of variation in audience share among stations programing the same format was as great as the variation among stations programing different formats — the staff concluded that, although format type did have a statistically significant impact on audience share, the magnitude of that impact was small. In the staff’s view, this study demonstrated WEFM’s “decisive flaw” in assuming that duplication of stations within a format is wasteful in terms of listener satisfaction. Id. at 873.
On August 25, 1977, the Commission refused to reconsider the Policy Statement. Denial of Reconsideration, supra.20
II
Although the Commission claims to have taken a “step back” and impartially reexamined the issue, its treatment of the format decisions, and of citizens groups seeking to enforce them, has been such as to cast serious doubt on the rationality and impartiality of its action. Two facets of the Policy Statement stand out in this connection: the Commission’s reliance on a previously undisclosed staff study, and its contention that enforcing WEFM would be an “administrative nightmare.”
Even a brief perusal of the Policy Statement reveals that the staff study, which was issued as Appendix B thereto, had a major influence on the decision. The Commission cited it in the body of the Policy Statement as showing “decisively . how effective the tool of competition has been in carrying out Congress’ plan for entertainment programming”;21 as supporting the conclusion that “the marketplace is the best way to allocate entertainment formats in radio”;22 and as strongly indicating that listeners carefully discriminate among stations programing the same format.23 In view of the study’s importance, we might have expected that, before reaching a decision, the Commission would release it for adversarial testing of its data base, methodology, and conclusions. See generally United States v. Nova Scotia Food Products Corp., 568 F.2d 240, 251-52 (2d Cir. 1977); Portland Cement Ass’n v. Ruckelshaus, 158 U.S.App.D.C. 308, 486 F.2d 375, 392-94 (1973), cert. denied, 417 U.S. 921, 94 S.Ct. 2628, 41 L.Ed.2d 226 (1974); International Harvester Co. v. Ruckelshaus, 155 U.S.App.D.C. 411, 427-29, 478 F.2d 615, 631-33 (1973). Yet it appears that, prior to the issuance of the Policy Statement, only the Commission itself knew of the study’s existence.
The Commission’s failure to disclose this important technical document for public comment not only diminishes the assurance that its decision is substantively accurate, but also raises questions of procedural fairness to the parties opposed thereto. Aggravating the procedural aspect in the present case are certain statements made by the Commission in response to inquiries from citizens groups. Several times during the comment period, for example, petitioners requested the Commission to contract for an independent study of format diversity, J.A. at 145, 153; id. at 160, 161; id. at 237, [328]*328238. Petitioners argued that the Notice of Inquiry lacked a sufficient data base, that the industry-commissioned studies filed during the comment period were biased, and that petitioners did not have the resources to fund their own studies. The Commission denied these requests on February 19, 1976, and May 24, 1976, J.A. at 164, 169, id. at 247, 248. On March 29, 1976 — four months before the issuance of the Policy Statement —the Commission’s Broadcast Bureau responded to a Freedom of Information Act request for “all data, reports and memoranda utilized or proposed to be utilized by the Commission in this proceeding,” J.A. at 48, without indicating that it planned to use a staff study in deciding the Inquiry. Although perhaps accurate when made, these statements created the somewhat misleading impression, which the Commission could usefully have corrected, that no studies would be undertaken.
The Commission argues that the parties had an adequate opportunity to comment on the study on petition for reconsideration. The heavy burden on any petitioner for reconsideration, however, surely makes the opportunity to comment at this stage a less than adequate substitute for the chance to influence the Commission’s initial decision. That the Commission was not open-minded at this stage is evident from the record. It apparently required a Freedom of Information Act request for petitioner Citizens Communications Center to obtain a description of the methodology used in preparing the study. J.A. at 68-87. This description was provided on September 15, 1976, two weeks after the expiration on the time period for reconsideration petitions.
Even if we accepted at face value the Commission’s representation that it would have considered a request for reconsideration filed out of time if based on newly-disclosed material, our misgivings would not be fully assuaged. The Commission’s Freedom of Information Act response contained computer worksheets which were obscure if not incomprehensible to readers lacking a key to the meaning of the figures. Citizens Communications Center requested such a key in a letter to the Commission dated March 22, 1977. J.A. at 100-100A. The Commission’s response, which contained such a key, see J.A. at 573-75, was apparently sent only to the Citizens Communications Center and not to other petitioners as might have been expected had the Commission acted out of a good faith desire to obtain comments on the study. Some petitioners claim that the first they knew of this key was when the Commission designated it for inclusion in the Joint Appendix filed in this court. In short, it is open to serious question whether even after issuance of the Policy Statement the petitioners were given information about the study’s design and data base sufficient to allow meaningful comment thereon, and whether, if such comment had been feasible, the Commission would have received it with an open mind.24
One of the Commission’s principal grounds for repudiating the format decisions was the contention that implementing them would be an “administrative nightmare,” imposing “enormous costs on the participants and the Commission alike.”25 The hearing on remand from the WEFM decision, which was said to be “fairly typical” of format abandonment proceedings, involved the following:
[A]n administrative law judge held two prehearing conferences in Washington, D.C.; his preparation time was an additional eight hours. In addition the Broadcast Bureau trial staff spent above two hundred man-hours of preparation [329]*329time. Subsequently, hearings were held on nine separate dates in Washington, D.C., and on nine different dates in Chicago, from which a transcript of 3120 pages was compiled. Following the hearings, the Broadcast Bureau spent two hundred and forty hours preparing proposed findings of fact and the administrative law judge will have spent approximately two hundred and eighty hours preparing his initial decision.26
The Commission was particularly concerned with the burden of such hearings because, in its view, they would also be required when a licensee that had changed its format mid-term (without transferring the license) applied to the Commission for license renewal.27
While we do not wish to minimize the burdens of a format abandonment hearing, the truth is that in the sunlight of the facts the Commission’s “administrative nightmare” turns out to be little more than a dream. The Commission professes that it has sought in good faith to administer format changes ever since the Atlanta decision in 1970. An examination of the actual burdens imposed on the Commission by the cases that have reached this court during that period — all involving license assignment applications — is highly instructive.
In Atlanta, this court reversed the Commission’s approval without a hearing of a license assignment involving a change from classical music to a “ ‘blend of popular favorites, Broadway hits, musical standards, and light classics,’ ” 141 U.S.App.D.C. at 111, 436 F.2d at 265, and remanded the case for an evidentiary hearing on the alleged unprofitability of the existing operation, the accuracy with which views of prominent citizens were represented, and the degree to which listeners were provided with classical music from other broadcast sources. However, no hearing was held on remand because the parties settled the matter among themselves. In Progressive Rock we remanded a case involving a proposed shift from “progressive rock” to “middle of the road” for a hearing on the issues of financial viability and alternative sources of the format. Again the parties apparently settled the dispute and no hearing was held. In Lakeland, a ease involving a proposed switch from “all-news” to “country and western,” we found no substantial dispute over the issues of financial viability and alternative sources of the format, and hence upheld the Commission’s approval of the application without a hearing.
Finally, in WEFM, we remanded a case involving a switch from classical to rock music for a hearing on the questions of financial viability, accuracy of community leader surveys, and availability of alternative sources. A hearing was held, and the Administrative Law Judge issued an initial decision proposing to grant the application. Zenith Radio Corp., F.C.C. 76D-47 (1976), 76D-46 (1977). Subsequently, however, the parties agreed to a settlement in which the petitioner to deny agreed to withdraw its objection in exchange for certain actions designed to strengthen alternative sources of classical music in the listening area. The Commission approved the settlement. Zenith Radio Corp., F.C.C. 78-102, 42 Pike & Fischer Radio Reg.2d 472 (1978).
In light of this history, the Commission’s fears appear somewhat less than realistic. In nearly ten years, a mere handful of format change cases have reached this court. Of these, one — Lakewood—resulted in the Commission’s being affirmed on grounds indicating that in many cases no hearing would be required. Two — Atlanta and Progressive Rock — were remanded but were settled before a hearing could be held. In the entire history of the format cases, only one case — WEFM—has resulted in a hearing; and even this was settled prior to administrative appellate procedures. The hearing that did occur, although by no means inconsequential in scope, was nevertheless less extensive than the typical eom[330]*330parative renewal proceeding.28 Nor does the burden promise to be significantly greater in the future. At oral argument, the Commission’s counsel, upon inquiry from the bench, estimated that “perhaps half a dozen” petitions to deny based on format changes were then pending. If past experience is a guide, few, if any, of these will eventuate in a hearing.
The Commission also argues that the administrative burden is excessive because format hearings will be required in the renewal as well as the transfer context. We do agree that the format cases logically apply to renewal applications.29 But we do not believe that renewals will open the floodgates to the administrative hearing room, because the safeguards against excessive numbers of hearings are as present in the renewal context as in the assignment context. No hearing will be required on a renewal application if the abandoned format is financially unviable, if it is not unique in the listening area, or if there has been an insufficient outpouring of public protest against the change.
Apparently recognizing its untenability, the Commission’s counsel, at oral argument before us, conceded that the “administrative nightmare” characterization was an “exaggeration” and personally assured the court that the argument was not “very significant at all” to the Commission’s decision. Yet this concession does not retroactively make rational the Commission’s ill-advised reliance on the issue. And we cannot but view with considerable suspicion an administrative agency’s decision that lays such stress — to the point of almost frenzied rhetorical excess — on an argument which, in light of the actual facts, appears so lacking in merit.30
Ill
The staff study and administrative nightmare issues are merely the most striking examples of certain more pervasive problems. Throughout the format controversy, the Commission has displayed a deep-seated aversion to the decisions of this court (and to the advocates of those decisions) while at the same time misinterpreting and exaggerating their meaning. Perhaps as a result of these interrelated defects, the Commission failed to take affirmative steps to minimize what it perceived as the intrusive features of the format decisions while preserving their essence.
It has been evident from the start that the Commission’s response to the format decisions would be something less than enthusiastic cooperation. Professing time and again that entertainment programing is very broadly, if not wholly, committed to licensee discretion,31 the Commission has [331]*331never initiated a hearing in a format change case and has repeatedly urged this court to reverse or drastically curtail the decisions.32 And it instituted the present proceeding in the nature of rulemaking with the apparent purpose of overruling the WEFM case. Whatever its power generally to proceed by rulemaking rather than adjudication, we think it a somewhat different matter when the seeming purpose of the rulemaking is the circumvention of a recent court decision reached in an adjudicatory context.
These misgivings are not allayed by the record of the present proceeding. It hardly requires a literary critic to discern that the Notice of Inquiry’s “questions” about WEFM were for the most part rhetorical. Those favoring WEFM could not have been heartened to read of the Commission’s “deep[ ] coneern[ ]” that WEFM “may lead only to expense, delay and stagnation, with no assurance that a decision finally reached by the Commission would be in any sense superior to that favored by the marketplace,” and that the decision might cause “serious adverse consequences for the public interest.” 57 F.C.C.2d at 582, 584, 582. The indications in the Notice of Inquiry that the Commission would not give proWEFM comments due consideration were borne out by later events. Its Policy Statement, as we have noted at length, relied heavily on a staff study which had not been placed in the record for public comment. Moreover, the Commission ignored completely comments which it had solicited, see note 14 supra, concerning how WEFM could effectively be administered.33
Closely related to the Commission’s innate aversion to our format decisions is its sometimes drastic misreading of those cases. It analyzed the problem in stark terms: formats are to be chosen either by market forces or by “the alternative to the imperfect system of free competition . . . a system of broadcast programming by government decree.” Denial of Reconsideration, supra, 66 F.C.C.2d at 81. WEFM, in the Commission’s view, is the antithesis of the free market: it mandates a “system of pervasive governmental regulation,” Notice of Inquiry, supra, 57 F.C.C.2d at 582, requiring “comprehensive, discriminating, and continuing state surveillance.” Policy Statement, supra, 60 F.C.C.2d at 865, citing Lemon v. Kurtzman, 403 U.S. 602, 619, 91 S.Ct. 2105, 2114, 29 L.Ed.2d 745 (1971).
Having framed its analysis in Manichaean terms, it is not surprising that the Commission found numerous flaws in our format cases. There would no doubt be severe statutory and constitutional difficulties with any system that required intrusive governmental surveillance, dictated pro[332]*332graming choices, forced broad access obligations, or imposed an obligation to continue in service under any and all circumstances. Moreover, any system of pervasive regulation of the type envisaged by the Commission would indeed be an “administrative nightmare,” a “quagmire” that the agency would be well-advised to avoid.
The truth is that the actual features of WEFM are scarcely visible in this highly-colored portrait. As we have emphasized before and repeat today, WEFM was not intended as an alternative to format allocation by market forces. We fully recognized that market forces do generally provide diversification of formats. The licensee’s discretion over programing matters is therefore very broad while the Commission’s role is correspondingly narrow.34 However, we also recognized — as does the Commission— that the radio market is an imperfect reflection of listener preferences. Because broadcasters earn their revenues from advertising, they tend to serve young adults with large discretionary incomes in preference to demographically less desirable groups like children, the elderly, or the poor. See WEFM, supra, 165 U.S.App.D.C. at 207, 506 F.2d at 268.
Further, as is clear from our earlier cases, the Commission’s obligation to consider format issues arises only when there is strong prima facie evidence that the market has in fact broken down. No public interest issue is raised if (1) there is an adequate substitute in the service area for the format being abandoned, (2) there is no substantial support for the endangered format as evidenced by an outcry of public protest, (3) the devotees of the endangered format are too few to be served by the available frequencies, or (4) the format is not financially viable. See text accompanying notes 5-9 supra. One or another of these factors is surely present in most format changes. And generally the existence vel non of these factors can be determined without the need for a hearing. The small remainder of eases are simply those in which the evidence strongly indicates that market mechanisms have not satisfied the Communications Act’s mandate that radio serve the needs of all the people.
As we have observed in Part II supra, the Commission’s administrative nightmare argument is seen to have little merit when it is remembered that only one of the handful of format cases reaching this court has resulted in a hearing. Also unpersuasive, in this regard, is the Commission’s contention that WEFM mandates an unconstitutional, or at least statutorily proscribed, intrusion on licensee programing discretion. The Commission laid particular stress on the argument that licensees will be deterred from experimenting with unusual formats out of a fear of being locked in. But it has provided little or no evidence that WEFM has in fact deterred licensees’ format choices; quite to the contrary, the Commission’s staff study concluded that under the WEFM regime licensees have been aggressive in developing diverse entertainment formats.
Finally, we must emphasize the narrowness of the Commission’s remedial powers. It merely has the power to take a station’s format into consideration in deciding whether to grant certain applications. It has no authority under WEFM to interfere with licensee programing choices: it cannot restrain the broadcasting of any program, dictate adoption of a new format, force retention of an existing format, or command provision of access to non-licensees. To say that it is empowered to impose censorship 35 or common carrier36 obli[333]*333gations is to stretch WEFM virtually beyond recognition.37
C.
The Commission would likely have been less concerned had it read our format cases more accurately; conversely, it would probably have better interpreted those cases had it viewed them more sympathetically. The flaws in its approach are intimately connected. They intersect in the Commission’s failure to implement the cases so as to minimize their drawbacks while preserving their essence. Had it attempted to develop administrative standards instead of simply abdicating, it might well have discovered that many perceived “flaws” eould be lessened or eliminated altogether.
The impetus for developing such standards must come, in the first instance, from the Commission. Only it, and not this court, has the expertise to formulate rules well-tailored to the intricacies of radio broadcasting; and the flexibility to adjust those rules to changing conditions. Only it has the opportunity to develop standards of general applicability outside an ad hoc adjudicatory context. And only it has the power to determine how to perform its regulatory function within the substantive and procedural bounds of applicable law.
The Commission has not suffered from the want of suggestions along these lines. Scholars have noted that it could develop acceptable guidelines.38 This court has emphasized the Commission’s discretion to develop administrative standards,39 and stressed that judicial review thereof will be [334]*334limited and deferential.40 The Commission itself has recognized the need for standard-setting. Commissioner Hooks, concurring in the Notice of Inquiry, suggested standards for the sympathetic implementation of WEFM;41 and the Commission majority, in the same document,'requested comments on administering the decision.42 It is regrettable, from the present perspective, that rather than pursuing this approach the Commission chose simply to throw up its hands. While we cannot, of course, dictate what, if any, standards the Commission should adopt, the following suggests ways in which development of appropriate guidelines could satisfy many of its objectives.
One difficulty noted by the Commission and intervening commercial broadcasters is the alleged impossibility of classifying radio formats. They point to our statement that “we know [a format] when [we hear] it,”43 as being overly subjective, and to some of the distinctions we have drawn between formats as being nice to the point of administrative infeasibility.44 Yet these were the judgments of a court forced to decide the case before it by reference to the language of the Communications Act and the Congressional purpose informing it. The Commission, with its greater expertise and broad overview of the subject matter, could arrive by rulemaking at a format taxonomy which, even if imprecise at the margins, would be sustainable so long as not irrational.45 The Commission “retains a discretion commensurate with its expertise to make reasonable categorical determinations,” WEFM, supra, 165 U.S.App.D.C. at 204, 506 F.2d at 265. Had it developed a rational classification schema in the first instance, this court would surely have given it great credence even if the results reached thereunder differed from those obtained by application of our own unguided analysis.46
Indeed, the Commission used a format classification in its staff study to demonstrate the existence of broad diversity in major radio markets. There is a marked inconsistency in its endorsing the validity of a study largely premised on classifications it claims are impossible to make. In any case, the schema used in the staff study follows accepted industry usage and would appear facially rational. It is likely that the perceived administrative difficulties would be greatly reduced if the Commission were to adopt a similar approach.47
[335]*335With regard to WEFM’s perceived intrusiveness, the Commission could set rigorous standards as to when petitioners to deny have established a prima facie case. It could, for example, require a relatively high level of public grumbling, could classify formats into broader rather than narrower categories, and could place the burden of demonstrating “uniqueness” on the petitioners.48 To deal with the “lock in” problem it could exempt from the hearing requirement formats adopted experimentally and sought to be abandoned after a very short period of time.
In the analogous context of the fairness doctrine, the Commission has adopted stringent prima facie case requirements that weed out, at the outset, the great majority of complaints. We recently upheld, en banc, the Commission’s dismissal of a fairness doctrine complaint based on those rigorous standards. American Security Council Education Foundation v. FCC, 197 U.S.App.D.C. 124, 607 F.2d 438 (1979). We noted that the prima facie evidence requirement served to protect delicate First Amendment values by ensuring that robust, wide-open debate would not be deterred. Like the fairness doctrine, the format cases involve the Commission in an area charged with sensitive First Amendment implications. The Commission could, surely use a similar technique in the format context for accommodating First Amendment values to the fact that broadcasters, under the scheme of the Communications Act, are public trustees obligated to serve the public interest.49
None of this is to imply, however, that the Commission is free to “administer” the format cases as a dead letter.50 Whatever administrative means the Commission adopts must be capable of identifying and rectifying those infrequent situations m which market allocation has failed and in which the public interest would not be served by granting the assignment application. That is the basic message of our format change cases as to what Congress has willed in these situations, and it is one we reaffirm today.
IV
Because the Commission devoted considerable energy to justifying its view of the proper relationship between court and agency, a few words on the subject are in order here. The Commission repeatedly referred to WEFM as representing the “policy” of the Court of Appeals, and contrasted it unfavorably with the “policy” of the Commission. It called upon this court, as its so-called “partner” in the regulatory process, to step back and recognize that its “policy” is superior to our own.
We should have thought that WEFM represents, not a policy, but rather the law of the land as enacted by Congress and interpreted by the Court of Appeals, and as it is to be administered by the Commission. This court has neither the expertise nor the constitutional authority to make “policy” as that word is commonly understood. See National Broadcasting Co. v. United States, 319 U.S. 190, 224, 63 S.Ct. 997, 87 L.Ed. 1344 (1943); Action for Children’s Television v. FCC, 183 U.S.App.D.C. 437, 460-61, 564 F.2d 458, 481-82 (1977); WEFM, supra, 165 U.S.App.D.C. at 206-07, 506 F.2d at 267-68. That role is reserved to the Congress, and, within the bounds of delegated authority, to the Commission. But in matters of interpreting the “law” the final say is constitutionally committed [336]*336to the judiciary. See International Brotherhood of Teamsters v. Daniel, 439 U.S. 551, 99 S.Ct. 790, 800 & n.20, 58 L.Ed.2d 808 (1979); SEC v. Sloan, 436 U.S. 103, 118-19, 98 S.Ct. 1702, 56 L.Ed.2d 148 (1978). Although the distinction between law and policy is never clearcut, it is nonetheless a touchstone of the proper relation between court and agency that we ignore at our peril.
WEFM was an interpretation of a statute applicable to an adjudicatory proceeding and, to this extent, was a decision in which the judicial word is final. That decision was based on an interpretation of the Communications Act. Moreover, although we did not explicitly address the constitutional implications of our decision, the constitutional issue was commented upon extensively by Chief Judge Bazelon in his opinion concurring in the result. Suffice it to say that we found no constitutional impediment to the decision as we understood it. As to these constitutional and statutory issues, it was the Commission’s obligation to accept and carry out in good faith its legal duties as interpreted by this court.51
Our legal judgments in the earlier cases, however, were grounded in certain factual premises, namely, that there is, in the traditional sense, no free market in radio broadcasting and that in certain circumstances, when there are persuasive indications that market allocation has broken down, the Commission had been given a useful role by Congress to play in ensuring that the benefits of radio accrue to all the people, not simply those favored by advertisers. The Commission, in its staff study appended to the Policy Statement, challenged those empirical assumptions. To the extent that the Commission was not questioning this court’s legal judgment, but was attempting to demonstrate that faulty factual premises underlay that judgment, we agree that it was within its competence as an agency better equipped to develop legislative-type facts than is this court.
[337]*337As we have noted, however, the Commission’s use of the staff study was infected with the serious flaw that it never even divulged the existence of the study, much less gave the participants the opportunity to comment thereon, before issuing its Policy Statement. This procedural unfairness, coupled with the substantive uncertainty flowing from the lack of adequate adversarial testing during the comment period, is enough to make us view skeptically the Commission’s use of the study. But even if we were to accept the study on its own terms, we would not be persuaded.
The study consisted of two parts. In the first, the Commission staff compiled a chart showing which of 18 format types were available in the 25 largest radio markets. From this, the Commission argued that an adequate degree of diversity was currently being achieved by market forces. Second, the staff performed a statistical analysis of the relationship between the format type programmed by a station and its audience share as a rough measure of the degree to which stations programing the “same” format are considered by consumers to be close substitutes for one another. The staff found that the variation of audience shares within a given format was nearly as great as the variation among formats, and concluded that stations programing the same format were not necessarily close substitutes for one another. From this the Commission argued that it was not true, as we had supposed in WEFM, that abandonment of a unique format in favor of a format already present in the service area strongly indicated a loss in overall diversity.
The first part of the study, in our view, is completely consistent with WEFM. That case recognized that market allocation is generally an adequate guarantor of format diversity; it requires the Commission to step in only when there are persuasive indications that market allocation has failed in a particular case. WEFM, we repeat, was aimed not at the probable majority of cases in which the market operates adequately, but as those perhaps infrequent cases in which it has not done the job. The study does not show that the market functions adequately in every instance.52 Indeed, the Commission admits that market allocation is an imperfect reflection of audience preferences.
The second part of the staff study challenged the proposition that the Commission can — and must if it is to be faithful to the Act it administers — sometimes do a better job than the imperfect market. The Commission, as we have noted, viewed WEFM as mandating a system of pervasive governmental format allocation antithetical to the free market. If this were the meaning of WEFM, we would certainly agree that it could not improve on market allocation. But when it is recognized that WEFM contemplates governmental action as a supplement, not a substitute, for the market, and when attention is focused on cases of prima facie market breakdown, as in the Atlanta case, it seems far more likely that the Commission could usefully play a limited corrective role.
Nor are we convinced by the study’s statistical analysis. It is not surprising that one station, by dint of stronger signal, more pleasing announcers, better tempo, superior technical quality or other factors, should gain a much greater market share than [338]*338another station programing the same format in the service area. What would be surprising, however, is if listeners, deprived of their favorite station, were indifferent as to whether they switched to another station programing the same format or to a different format altogether. The common sense of it is that most lovers of disco will switch to another disco station in preference to classical, all-news, country and western or the like. When a unique format is abandoned, those loyal to that format have no adequate substitute in the service area; when a non-unique format is eliminated, its listeners will generally have an adequate substitute in other stations programing the same format.53 For this reason abandonment of a unique entertainment format raises the special public interest issue treated by our format cases.
Once again the court confronts a problem deriving, in the last analysis, from the common and undivided ownership of the airwaves by all of the people. In Office of Communication of United Church of Christ v. FCC, 123 U.S.App.D.C. 328, 359 F.2d 994 (1966) and Office of Communication of United Church of Christ v. FCC, 138 U.S.App.D.C. 112, 425 F.2d 543 (1969), this court, in two vigorous opinions by Judge (now Chief Justice) Burger, dealt with a Commission reading of the Act that denied standing to oppose license renewal to all except competing licensees claiming either electrical or economic interference. The first such opinion, at the instance of members of the listening public who wished to be heard on the asserted inadequacies of the licensee’s programing, demolished that incredibly restrictive interpretation of the Act’s “public interest, convenience, and necessity” standard. The second opinion overturned a rejection of the petition to deny after a hearing and' decision on remand which it characterized as positively hostile to the complainants.
In United Church of Christ, as here, the Commission asserted all manner of difficulties with the interpretation of the statute pressed upon it by the protestants, including notably severe administrative burdens hampering the discharge of its regulatory responsibilities, if objections to format abandonment were required to be entertained and, where substantial, explored in evidentiary hearings. The Commission’s Policy Statement in issue here is strongly reminiscent of the attitude displayed by it in United Church of Christ. The Commission, despite its parade of horribles in that case, has obviously survived.
In WEFM the court was at considerable pains to make clear that it was speaking solely in the context of the current regulatory scheme laid down by Congress. The result reached, we said,54
cannot be otherwise when it is remembered that the radio channels are priceless properties in limited supply, owned by all of the people but for the use of which the licensees pay nothing. If the marketplace alone is to determine programming format, then different tastes among the totality of the owners may go ungratified. Congress, having made the essential decision to license at no charge for private operation as distinct from putting the channels up for bids, can hardly be thought to have had so limited a concept of the aims of regulation. In any event, the language of the Act, by its terms and as read by the Supreme Court, is to the contrary.
There is much talk at the moment of deregulation in the communications field, particularly with respect to radio. Bills of varying sweep to this end are pending in the Congress,55 and the enactment of at least one of them in its present form would appear largely to eliminate for the future [339]*339the problem presented in the case before us.56 But the movement towards regulation by the marketplace appears to be accompanied by the exaction for the first time of charges for the use by licensees of the publicly-owned channels, and the benefits thereof would accrue equally to all members of the owning public.57 This would be a vast and significant departure from the present system by reference to which we decide the question presently before us.
Looking to the Act in its present form, we hold the Policy Statement under review to be unavailing and of no force and effect.
It is so ordered.
Petitioners in this consolidated review proceeding are WNCN Listeners Guild and Citizens Communications Center (No. 76-1692); Classical Radio for Connecticut, Inc. and Committee for Community Access (No. 76-1793); and Office of Communication of the United Church of Christ, Mexican American Legal Defense and Education Fund, National Latino Media Coalition, National Council of La Raza, Bilingual Bicultural Coalition on Mass Media, American G.I. Forum, and Public Communication, Inc. (No. 77-1951).
Amici in support of petitioners are Classical Music Supporters, Inc., Committee for Open Media, Consumer Federation of America, Friends of WONO, Inc., and Louisiana Center for the Public Interest.
Intervenors on respondents’ behalf are American Broadcasting Companies, Inc., CBS, Inc., Cornhusker Television Corporation, Covenant Broadcasting Corporation, Covenant Broadcasting Corporation of Louisiana, Inc., Covenant Radio of Oklahoma, Inc., Fetzer Broadcasting Company, Fetzer Television Corporation, KOOL Radio-Television, Inc., KTOK Radio, Inc., McClatchy Newspapers, Medallion Broadcasters, Inc., Metromedia, Inc., National Association of Broadcasters, National Broadcasting Company, Inc., National Radio Broadcasters Association, Newhouse Broadcasting Corporation, Palmer Broadcasting Company, Plough Broadcasting Company, Inc., Radiohio, Incorporated, Rusk Corporation, and WBNS-TV, Inc.