In Re Applications of MIDWEST
RADIO-TELEVISION, INC. For Renewal of Licenses of
Stations WCCO and WCCO-TV,
Minneapolis, Minn.
Docket
No. 18499 File No. BR-659 File No. BRCT-49
FEDERAL
COMMUNICATIONS COMMISSION
24 F.C.C.2d 625
RELEASE-NUMBER: FCC 70-769
July
31, 1970 Released
Adopted July 15, 1970
JUDGES:
BY THE
COMMISSION: COMMISSIONER JOHNSON DISSENTING AND
ISSUING A STATEMENT IN WHICH COMMISSIONER BARTLEY JOINS; COMMISSIONER H.
REX LEE DISSENTING.
OPINION:
[*625]
1. By Order (FCC 69-261, 16 FCC
2d 943), released March 21, 1969, the above-captioned applications were
designated for evidentiary hearing on issues to determine: (a) whether Midwest
Radio-Television, Inc. (Midwest) and its owners have an undue concentration of
control of the media of mass communications in the Minneapolis-St. Paul area;
(b) whether or not Midwest has used its position in the newspaper field so as
to obtain rights to broadcast sporting events, particularly in the area of
professional baseball, football and hockey teams; (c) whether or not newspaper
ownership of broadcast facilities in the Minneapolis-St. Paul area has resulted
in reciprocal advantages to Midwest to the disadvantage of competing broadcast
licensees; and (d) whether a grant of Midwest's license renewal applications
would serve the public interest.
Thereafter, on April 23, 1969, a Specification Order (FCC 69-373, 17 FCC
2d 290) was released, which particularized the scope of the designated issues
and which amended the media [**2] concentration of control issue to include a
geographic area extending beyond Minneapolis and St. Paul. n1
n1 By Memorandum Opinion and Order
(FCC 69R-330, 18 FCC 2d 1011) released August 7, 1969, the Review Board added a
hearing issue to determine whether the past programming of Stations WCCO and
WCCO-TV, particularly with regard to public service programming, was of such
high quality as to constitute a countervailing factor in the resolution of this
case insofar as it relates to the designated issues (b) and (c).
2. Presently before us are the following
pleadings: (a) a petition for reconsideration and grant without hearing filed
August 25, 1969, by Midwest; (b) oppositions filed January 6, 1970, both by the
Chief, Broadcast Bureau (Bureau), and by Hubbard Broadcasting, Inc. (Hubbard);
(c) a reply the supplements thereto filed February 20, and March 5, 1970, by
Midwest; (d) a petition requesting an opportunity to present oral argument with
respect to its petition for reconsideration and grant without hearing, filed
February 20, 1970, by Midwest; (e) an opposition to the petition for oral
argument filed [*626] March 4, 1970, by the Bureau; (f) a
memorandum in support of oral argument [**3]
filed March 4, 1970, by Minneapolis Star and Tribune Co.; and (g) a
reply filed March 16, 1970, by Midwest.
Also before us is the recommended report (FCC 70M-838, released June 18,
1970) of Hearing Examiner Herbert Sharfman, which was prepared pursuant to our
direction. n2
n2 See our Order, FCC 70-445, 22 FCC
2d 897, adopted April 28, 1970.
3. One matter, we believe, warrants
clarification at the outset. Throughout
this proceeding, and in its pleadings now before us, Midwest seems to suggest
that the information before us at the time we designated its license renewal
applications for hearing was insufficient to order evidentiary hearings and
that, apparently, our determination to set this proceeding for hearing was
based solely on the fact that the WCCO stations are owned by newspaper interests. We disagree. Contrary to Midwest's belief, when we designated this proceeding
for evidentiary hearing, we were unable to find that grants of its applications
would serve the public interest, not because of its ownership structure, but
because of the complaint of Mr. Garfield Clark, n3 which Midwest's response failed to refute. n4 A cursory look at the Clark
complaint establishes [**4] beyond
doubt that the allegations contained therein, if true, are relevant and
material matters for consideration in passing upon an applicant's fitness to be
a Commission licensee. n5
n3 Mr. Clark filed a statement with
the Antitrust Subcommittee of the Senate Judiciary Committee in connection with
its consideration of S. 1312, the Failing Newspaper Bill. In sum, Mr. Clark charged Midwest with
anticompetitive practices in holding for and in obtaining the broadcasting
rights to local professional sporting events because of the newspaper ownership
in the WCCO stations and because of joint ownership interests of certain
Midwest stockholders in both the WCCO stations and the professional teams.
n4 A letter, dated June 19, 1968,
from Midwest, which was signed by Mr. F. Van Konynenburg, President of Midwest
and Manager of WCCO.
n5 The Court and the Commission have
long recognized that in a regulated industry, such as broadcasting,
anticompetitive practices are inimical to the public good and that the
Commission has both the authority and the duty, under the public interest
standard, to consider the probable effect of such conduct when passing upon an
applicant's qualifications to be a licensee.
National Broadcasting Co., et al. v. United States et al., 31. U.S. 190
at 222 and 223. [**5]
4. In any event, this argument, in our opinion,
is merely an attempt by Midwest to obscure its failure to assume the
responsibilities imposed upon it as an applicant seeking renewal of its
licenses. In essence, what Midwest
seems to be saying is that the Commission, after being apprised of the Clark
complaint, had both the responsibility and burden to establish the validity of
the allegations contained therein, prior to designating this case for
hearing. We find no basis for such a
claim. The divisions of
responsibilities imposed upon an applicant and the Commission in license renewal
proceedings are clearly delineated in the Communications Act of 1934, as
amended. n6 Moreover, we have repeatedly stated that it is the applicant (including
renewal applicants), not the Commission, who has the responsibility for
establishing that a grant of his application is consistent with the public
interest and who has the burden of overcoming any allegations which prima facie
indicate otherwise (T. J. Shriner, 11 FCC 2d 674, 22 RR 2d 350). For the above
reasons, we conclude that our action in designating this proceeding [*627]
for evidentiary hearing was a proper exercise of statutory discretion
[**6] under the Communications Act of
1934, as amended, and to have done otherwise would have clearly violated the
mandates of the Act, Court directives, and Commission precedent. n7
n6 Section 308(b) of the Act imposes
upon applicants the duty to furnish the Commission with the appropriate
information upon which a public interest determination can be made and Section
309 requires the Commission to make grants only in the public interest. Moreover, subsection (e) of Section 309
provides, in pertinent part, that the Commission shall formally designate
applications for hearing when it is unable, for any reason, to find that a
grant of the application would serve this statutory objective.
n7 See footnote 5, supra, and
Mansfield Journal Co. v. FCC, 86 U.S. App. D.C. 102, 180 F 2d 28, where the
Court held that it is contrary to the public interest to grant a license to a
newspaper which has attempted to suppress competition. Moreover, compare our recent action in Chronicle
Broadcasting Co. (KRON-FM and KRON-TV), 16 FCC 2d 882, reconsideration denied,
20 FCC 2d 903.
5. We will now consider
Midwest's voluminous petition for reconsideration. n8 Midwest's petition is devoted, in major
[**7] part, to an accumulation of
material -- affidavits, deposition testimony, expert studies and reports, etc.
-- pertinent to the matters specified in the hearing issues of this proceeding. Based upon this post-designation submission,
Midwest submits that it has now adequately refuted the unfounded allegations of
Mr. Clark; that there are presently no unresolved public interest questions
posed by its license renewal applications; and that we should, therefore, terminate
this hearing proceeding and grant the applications without further delay. Pointing to what they believe are certain
deficiencies and conflicts in the material submitted by Midwest, both the
Bureau and Hubard argue that all of Midwest's showings are susceptible to error
and that, consequently, Midwest's showing should be tested in the give-and-take
of the evidentiary process. n9
n8 When
Midwest was initially apprised of the Clark complaint, had it submitted even a
fraction of the information now relied on for reconsideration -- rather than
relying solely on the Konynenburg letter, footnote 4, supra -- its license
renewal application might well have faired better at the time of
designation. Indeed, the undue hardship
and expense required once an evidentiary hearing has been instituted, which
Midwest now complains of, might have been significantly reduced, if not avoided
entirely.
n9 Both
the Bureau and Hubbard submit that the opportunity for cross examination in the
hearing process to test the credibility of the statements and affidavits in
Midwest's petition is fundamental to due process and that termination of this
hearing would deprive them of this basic right. We cannot accept such a conclusion. Section 1.111 of the Commission's Rules specifically provides for
petitions for reconsideration of an order designating a case for hearing, and
Section 1.106 of the Rules authorizes the grant of such petitions, in the event
the Commission finds that the public interest would be served thereby. Moreover, respecting due process, we do not
believe that there is any absolute right to cross examination when the showing
establishes that there are no substantial and material questions of fact and
that grant of the applications would be consistent with the public interest as
required by Section 309 of the Act. [**8]
6. We have fully reviewed the
record in this proceeding in light of Midwest's petition and its related
showings, n10 the numerous other pleadings in response thereto, and the Hearing
Examiner's recommended report, and we believe that the public interest
questions which existed at the time of our designation order have been
adequately resolved in Midwest's favor and that further exploration of these
matters in the hearing process would serve no useful purpose in the public
interest. A brief summary of our
findings and conclusions follows:
n10 We do
not believe that the voluminous showing submitted by Midwest is conducive to
the efficient performance of the Commission's business, and we intend to adopt
procedures in the near future to limit the consideration which will be given to
pleadings of this nature.
ISSUE: (A) MEDIA CONCENTRATION
7. As previously stated, we
have both the duty and the authority, under our licensing powers, to consider
media concentration. At the time we
designated this proceeding for evidentiary hearing, we were also concerned with
media concentration in the St. Paul-Minneapolis area because of the serious
anticompetitive charges raised against Midwest. [**9] However, based upon all of the information
now before us, [*628] we
believe that the public interest would not be served by examining such media
concentration in the context of the particular renewal proceeding and that,
accordingly, such matters are more appropriately dealt with in general
rule-making proceedings. In this regard
we note that there is now a comprehensive outstanding inquiry in Docket 18110
dealing with the Commission's multiple ownership rules.
ISSUE (B): USE BY MIDWEST
OF ITS POSITION IN THE NEWSPAPER FIELD TO OBTAIN RIGHTS TO BROADCAST SPORTING
EVENTS
8. The circumstances
surrounding the designation of this hearing issue are set forth in paragraphs
7-11 of the Specification Order (cited supra) and need not be repeated in
detail here. This issue stems
essentially from the above-noted statement of Mr. Clark which asserted that
WCCO radio has, over the years, been awarded the broadcasting rights to local
professional baseball, football, and hockey games in the Minneapolis-St. Paul
area, even though its bids were lower than those submitted by other local
broadcast media. WCCO's success in this
respect is attributed, Mr. Clark claimed, to undue competitive advantages
[**10] and practices resulting
from Midwest's connection with newspaper ownership interests. According to Mr. Clark, certain influential
stockholders of Midwest have ownership interests in both the local newspaper
and the professional sporting teams, and such owners have improperly utilized
their powers of joint ownership to influence the awarding of these broadcasting
rights.
9. In its petition, Midwest
restates its prior position denying these allegations. Recognizing, however, that it must respond
to the issue as specified, Midwest submits that, since the designation of the
proceeding for hearing, it has gathered a preponderance of evidence which shows
conclusively that the Clark allegations are neither supported by facts nor
evidence; that neither Midwest nor its stockholders used anticompetitive
practices or other improper conduct in connection with the bidding for and
awarding of the broadcast rights of the local professional teams; and that its
stations have always been and continue to be operated in the public interest.
10. We have fully reviewed this
multitude of information, and we agree with the Hearing Examiner, without
adopting his recommended report, that Midwest has [**11] resolved this issue in its favor and that
further exploration of this matter in an evidentiary hearing would serve
neither the public interest nor any other useful purpose. The large number of affidavits submitted by
Midwest -- not listed specifically herein, but nevertheless considered -- of
team officials and other persons directly involved in or responsible for
awarding the broadcasting rights for professional sporting events in the
Minneapolis-St. Paul area uniformly indicate that WCCO Radio was selected over
other broadcast media on the basis of a business judgment that Midwest would
provide superior service. While it is
true, as contended by the Bureau and Hubbard and as shown in the information
submitted along with Midwest's petition, that WCCO had submitted lower bids in
some instances, we believe that the principals involved in these particular
contract negotiations have, by their affidavits, adequately [*629] explained
the reasons why WCCO was selected. n11
Moreover, neither the Bureau nor Hubbard, in the pleadings now before us, has
submitted information to corroborate their general claim that the explanations
of Midwest's affiants are not supported by the record.
n11 We
believe, as did the Hearing Examiner, that there is no merit to the claim that
all of the Midwest showing, including the affidavits, must be rejected out of
hand, merely because minor conflicts are found in some of the statements of the
affiants when there is no dispute as to the major aspects of that showing.
[**12]
11. Midwest next addresses
itself to the additional question raised under this issue, which is whether
certain stockholders of Midwest, of the professional teams and of the local
newspapers have used both their powers of common ownership and their powers of
the press to secure broadcasting rights for WCCO. In so doing, Midwest generally denies any improper conduct in this
respect and, in support thereof, has submitted affidavits of executives of the
local professional teams, of the local newspapers, and of the marketing
agencies commissioned to handle the bids for such broadcasting rights. All of these affiants deny that common
ownership interests or future newspaper publicity -- favorable to the teams if
the broadcast rights were awarded to WCCO and unfavorable if not -- were
factors which were considered by the principals charged with awarding the
broadcasting rights to WCCO. To
substantiate these statements, Midwest has also included affidavits and
statements from the local newspaper editors, sports reporters, columnists and
other newspaper employees. These
affiants, without exception, deny that there is any policy or even suggestion
from their superiors that they should [**13] favor
any team or broadcast station by distorting the news and comment in the daily
newspapers. To the contrary, the
affiants indicate that in the Minneapolis-St. Paul area the broadcast media and
printed media are entirely independent of each other in their operations and
views; that they are actively competitive with each other; and that,
consequently, the public receives a wide diversity of views and comments. n12
n12
Midwest has also submitted a three volume report which was prepared by Earle
Barcus, Ph. D. (an Assistant Professor and a media expert), who is associated
with the Communication Research Center, School of Public Communication, Boston
University. In essence, the report substantiate
Midwest's position that sporting events carried by the WCCO stations to not
receive preferential treatment from the local newspapers.
12. Respecting a statement
attributed to Mr. Frank Rolfes -- Vice President and an account executive of
the advertising agencies handling the 1967 bids for the broadcasting rights to
the Minnesota Twins baseball games - which purportedly indicated that he was
advised by a person associated with the newspapers that it would be futile for
Hubbard (KTSP) [**14]
to bid against WCCO because of Midwest's newspaper connections,
Midwest denies that such a statement was ever made by Mr. Rolfes. Midwest has
submitted the affidavit of Mr. Rolfes, which disclaims any such statement as
well as any personal knowledge of information indicating that the owners and/or
managers of the local newspapers have suggested to their reporters or any other
newspaper employees that they should favor WCCO. n13
n13 We
have carefully examined the Rolfes affidavit in light of the deposition
testimony of Mr. Clark and Mr. Hubbard (President of Hubbard), and we agree
with both the Bureau and Hubbard that there is a conflict regarding this aspect
of the record. However, viewing all the
other information now before us -- some of which we have not referred to herein
-- we believe that this single conflict in statements of affiants regarding an
incident which took place several years ago is insufficient to necessitate
explanation in hearing particularly in light of the weight of the showing
submitted by Midwest, which adequately answers the serious questions posed at
the time of designation.
[*630]
13. In sum, we have reviewed the record in this proceeding; the
information [**15] which was before us at the time we specified
this hearing issue; the deposition testimony of Mr. Clark and Mr. Hubbard,
which was taken and filed after our designation order; and the voluminous
information now submitted for reconsideration, and we find that Midwest has
satisfactorily answered the serious public interest questions under this issue
and that further exploration in the hearing process is neither warranted nor
necessary in the public interest.
ISSUE (C): RECIPROCAL
ADVANTAGES TO WCCO TO THE DETRIMENT OF OTHER LOCAL BROADCAST MEDIA BECAUSE OF
NEWSPAPER OWNERSHIP IN BROADCASTING IN THE MINNEAPOLIS-ST. PAUL AREA
14. The circumstances
surrounding the designation of this hearing issue are also set forth in the
Specification Order (cited supra) and are not repeated in detail here. To some extent, this hearing issue overlaps
hearing issue (b) inasmuch as it delves into certain newspaper ownership
interests in the WCCO stations and the consequential effect there from. Thus, some of the material submitted by
Midwest in response to this particular issue has also been relied on in its
reply to issue (b). Accordingly, that
information, which is related to both issues and which
[**16] we have discussed previously,
is not reiterated in examining Midwest's showing under this issue, except to
note that we have considered and weighed it in our disposition of this matter.
15. When we designated this
hearing issue, information was before us which indicated that the local
newspapers having ownership interests in WCCO may have had certain policies and
may have used their powers of the press to favor the WCCO stations to the
disadvantage of other local broadcast media.
Essentially, that information indicated that local newspapers: (a)
failed to give equal listings in their TV Highlights for all local TV stations;
(b) had certain policies of not mentioning the call letters of stations other
than WCCO; (c) commented or editorialized unfairly regarding station programs,
except for WCCO programs; (d) failed to give the same reduced advertising rates
to other stations that are rendered to the WCCO stations; and (e) engaged in
trade agreements, business deals, combination rates, etc., all of which were
designed to favor the WCCO stations.
16. In answer to these charges,
Midwest relies also on numerous affidavits from local newspaper executives,
managers, editors, columnists, [**17] reporters, and other newspaper employees, all
of which deny any discrimination of unfair trade practices on the part of the
printed press in the Minneapolis-St. Paul area. The affiants who are responsible for the composition of the daily
TV and radio listings have uniformly stated that such listings are made on the
basis of news judgments and not upon any concerted policy to benefit the WCCO
stations. Those who are responsible for
determining advertising rates and the amount of advertising devoted to a
particular broadcast program likewise indicate that the newspapers do not
discriminate and that determinations in this respect are based solely upon
business judgments. The columnists and
reporters also state, without exception, that their views are not influenced by
newspaper policy or management, [*631] but are solely personal comments and views,
which they deem worthy of being printed.
17. Midwest in this regard also
relies to a great extent on the Dr. Barcus study and report which was
previously mentioned. Without setting
forth the details of that report, which was nevertheless considered by us, Dr.
Barcus has concluded the following: (a) that there seems to be no evidence of
any [**18]
consistent pattern of bias toward or any undue attention given to
the WCCO stations by the local newspapers; (b) that, in TV listings, the
Minneapolis-St. Paul newspapers do not seem to present disproportionate listings
favoring a particular local broadcast station when compared with listing in
newspapers in other major cities; (c) that there is no specific pattern in the
Minneapolistions; (d) that the local newspapers do not appear to be slanted in
commenting and reporting on TV and radio programs in the Minneapolis-St. Paul
area; (e) that the newspapers and the WCCO stations do not appear to carry
disproportionate amounts of advertising for each other; and (f) that there
seems to be no evidence of any preferential combination rates, reciprocal
agreements, business deals, etc. between the newspapers and Midwest reflecting
discriminatory policies or practices.
18. We believe that the above
noted affidavits, and others not mentioned but considered, submitted by Midwest
have satisfied our concern regarding the existence of any anticompetitive
reciprocal agreements in favor of the WCCO stations. Of more moment, we believe, are the independent studies of Dr.
Barcus which have corroborated [**19] the statements of those affiants and which
neither the Bureau nor Hubbard has refuted with any countervailing probative
information. n14
Accordingly, we find that Midwest has satisfactorily answered the serious
public interest questions under this hearing issue and that further exploration
of this matter in the hearing process would serve no useful purpose.
n14 We
have carefully reviewed the record regarding certain alleged discriminatory
incidents of reporting in the Minneapolis-St. Paul newspapers, which the Bureau
and Hubbard note. We believe that Midwest
has adequately explained these isolated incidents and we find no reason to
believe otherwise, particularly in the absence of probative information to the
contrary which neither the Bureau nor Hubbard has submitted.
OTHER MATTERS
19. The hearing issue which the
Review Board added to this proceeding to permit Midwest to make a favorable
showing of its past programming record, footnote 1, supra, is related to and
dependent upon the ultimate resolution of Issues (b) and (c) in this case. In the light of our disposition of Issues (b)
and (c), exploration of Midwest's programming record is unnecessary, and this
issue is [**20]
deemed moot. Finally, for the reasons set forth herein we
are convinced that Midwest's showing warrants a finding on the ultimate issue
that grant of Midwest's renewal applications will serve the public interest,
convenience, and necessity.
20. Accordingly, IT IS ORDERED:
(a) That the petition for reconsideration and grant without hearing
filed August 25, 1969, by Midwest is GRANTED.
[*632]
(b) That the applications for
renewal of license of Station WCCO and WCCO-TV, Minneapolis, Minnesota (File
Nos. BR-659 and BRCT-49, respectively), ARE GRANTED;
(c) That the Petition for oral argument filed February 20, 1970, by
Midwest IS DISMISSED as moot; and
(d) That this proceeding IS TERMINATED.
FEDERAL COMMUNICATIONS
COMMISSION, BEN F. WAPLE, Secretary.
DISSENT:
DISSENTING
OPINION OF COMMISSIONER NICHOLAS JOHNSON IN WHICH COMMISSIONER ROBERT T.
BARTLEY JOINS
The Federal
Communications Commission votes 4 to 3 today to terminate a hearing and thus
renew without further inquiry the licenses of WCCO-AM-TV, Minneapolis,
Minn. On March 21, 1969, the Commission
designated WCCO for evidentiary hearing on specified issues after charges of
"misuse of concentration of communications media" were [**21] made against the stations. Despite today's approval of WCCO's massive
petition for reconsideration of the hearing designation, the essential
questions of misuse involved here remain unresolved. The parties, the Hearing Examiner, and the Commission's own staff
all agree that many factual questions are left unresolved. In effect, we haven't much more of an idea
today about what the real facts are than when we began this proceeding 16
months ago.
Midwest
Radio-Television, Inc., licensee of the stations, contends that the mass of
written information it submitted would resolve, in its favor, all substantial
questions presented by its renewal applications and that, therefore, no useful
purpose would be served by continuing the proceeding into hearing. I dissent.
To satisfy the
requirements of the designated hearing, WCCO has a heavy duty to resolve all
key issues -- a heavy duty that I believe WCCO has woefully failed to
meet. The Commission's action does not
comport with Sec. 309(d) of the Communications Act of 1934 as the courts have
come to interpret it and may also be an unduly permissive interpretation of
Secs. 1.106 and 1.111 of the Commission Rules.
The Commission's
staff [**22] as well as Hubbard
Broadcasting, Inc., of St. Paul (the complaining party and licensee of KSTP-TV)
all opposed Midwest's petition, arguing that such serious questions should not
be resolved on the basis of one party's written pleadings to the exclusion of
the other side's rights in the hearing process. The Commission's 4-3 vote today cuts short the sine qua non of
our adversary process: Cross-examination.
I do not comprehend how this case can be resolved properly without a
hearing. WCCO's hundreds of pages of
petition have not been subjected to impeachment by anything even approaching
meaningful cross-examination. What
apparently has happened in this matter since the Commission set WCCO-AM-TV for
hearing is something akin to an old-fashioned Upper Midwest blizzard: WCCO has
so snowed the Commission with such an extraordinarily volumious petition for
reconsideration (seven volumes consisting of more than 1,000 pages) that every
aspect of the case has [*633] literally been lost under a blanket of white
paper. Nearly everything has been
smothered, including some key facts.
In a way, the
majority's decision is understandable.
In the face of such an avalanche of paper, I, too, am tempted
[**23] to throw up my hands and say,
"Why bother to dig our way out?"
Yet there are
two very compelling reasons why the Commission should dig its way out of this
avalanche:
1. The Commission's action today ignores
applicable law as it has been interpreted time and again by the U.S. Court of Appeals
for the District of Columbia.
2. The Commission's action today sanctions a
kind of new "snowstorm syndrome." The grant of Midwest's petition on
the basis of the record before us may make it all too easy for other applicants
to file similar massive, untested factual assertions in hopes of avoiding the
evidentiary hearing required by law.
Accordingly, I
dissent for the reasons stated most recently by Circuit Judge Tam, concurring,
in Hale v. F.C.C. [KSL], No. 22,751 (D.C. Cir., Feb. 16) 1970), and also for
reasons stated in numerous other Federal court decisions, including Marine
Space Enclosures, Inc., v. F.M.C., 420 F. 2d 577 (1969); F.M.C. v. Svenska
Amerika Linien, 390 U.S. 238, 244 (1968); United Church of Christ v. F.C.C.,
No. 19,409 (D.C. Cir. June 20, 1969), 16 P & F Radio Reg. 2d 2095 (1969);
and Trailways of New England, Inc. v. C.A.B., 412 F. 2d 926 (1969).
All of these
case [**24] will be considered in turn below, but no one has stated the
proposition more precisely than Judge Tamm in the Commission's KSL case:
Sec. 309 of the
Communications Act sets an admittedly high standard of pleading which must be
met before the hearing requirement is triggered, so that frivolous opposition
to license applications can be expeditiously dismissed. n15
However, I see nothing in either the language of the statute or those portions
of the legislative history cited to us by the [Federal Communications
Commission]... which inexorably dictates the conclusion that a party asserting
the existence of an anti-competitive market structure violative of the public
interest standard must allege not only the details of the concentration itself,
but also evidence of specifically identifiable injuries to the general public
proximately caused by the concentration.
Realism compels the recognition that the ancient distinctions among
'evidentiary facts,' 'ultimate facts,' and 'conclusions of law' have always
meant different things to different people in different contexts. A better approach is to acknowledge that
these terms only begin the inquiry rather than conclude it... Hale v. F.C.C., [**25] supra at
12-14.
n15 47 U.S.C. Sec. 309(d)(1)
(1964) provides in part: Any party in interest may file with the Commission a
petition to deny any application... prior to the day of Commission grant
thereof without hearing or the day of formal designation thereof for
hearing... The petition shall contain
specific allegations of fact sufficient to show that the petitioner is a party
in interest and that a grant of the application would be prima facie
inconsistent with subsection (a) of this section [which contains the public
interest standard]. Such allegations of
fact shall, except for those of which official notice may be taken, be supported
by affidavit of a person... with personal knowledge thereof.
I.
We begin with
some background on the concentration problem in Minnesota's Twin Cities.
Midwest Radio-Television became the licensee of the WCCO stations in 1952 as a
result of a merger of interests between the Columbia Broadcasting System (CBS)
and Midcontinent [*634] Radio-TV, Inc. (Midcontinent). Midwest at that time was 53 percent owned by
the Minnesota Broadcasting Corp. (MBC) n16
and 47 percent owned by CBS. In 1954,
CBS sold its 47 percent interest in Midwest to the Minneapolis [**26] Star and Tribune, which published the only
two daily newspapers, the Star and Tribune, in Minneapolis. n17
Today, the only two daily newspapers in St. Paul, the Dispatch and the Poineer
Press, have a substantial interest in the WCCO stations through the
Midcontinent half of the conglomerate corporate structure.
n16 Midwest Broadcasting Corporation
is now Midcontinent Radio-TV, Inc., which is owned equally by Northwest
Publications, Inc. and by M.T.C. Properties, Inc. Northwest published the only two daily St. Paul newspapers, the
Dispatch and the Pioneer Press, and the Duluth News Tribune and the Herald; is
the licensee of WDSM-AM-TV, Duluth-Superior, Wisconsin; is the licensee of
Station KSSS. Colorado Springs, Colorado; and owns 80 percent of the Aberdeen
News Company, which publishes the Aberdeen American News and is licensee of
KSDN, Aberdeen, South Dakota. Northwest
also is a joint-venture in an Jose Gable TV Service, a franchise holder of Cambell
and San Jose, California. Seventy-three
percent of the Northwest stock is owned by Ridder Publications, Inc. (Ridder),
which is controlled by the Ridder family.
Ridder publishes the Grand Forks (North Dakota) Herald, the San Jose
(California) Independent, the Long Beach (California) Press Telegram, the
Pasadena (California) Star News, the Garden Grove (California) Orange County
News, the Gary (Indiana) Post Tribune, and has a minority interest in the
Seattle (Washington) Times.
n17 The Minneapolis Star and Tribune
owns a community antenna system in South Sioux City, Nebraska, and owns 50
percent of Harper's magazine and the San Fernando Valley Times Co., which
publishes the San Fernando Valley Times (California), the Rapid City Journal
(South Dakota) and the Great Falls Tribune and Leader (Montana). The Minneapolis Star and Tribune Co. is in
turn owned in part (9.9 percent) by the Des Moines, Iowa, Register and Tribune,
which publishes the Register and the Tribune, Des Moines, Iowa. There are also common ownerships linking the
Des Moines Register and Tribune, Cowles Communications, Inc. (CCI) and Indiana
River Newspaper, which publishes the Ft. Pearce (Florida) News-Tribune. CCI
publishes Look magazine, Family Circle magazine, Venture magazine, the San Juan
(Puerto Rico) Star, the Gainesville (Florida) Sun, the Lakeland (Florida)
Ledger, the Suffolk (New York) Sun, which recently folded, the Education News,
the Cowles Comprehensive Encyclopedia, and Magazines for Industry, Inc. (Paperboard Packaging Magazine). [**27]
The possibility
that the Twin Cities' four major daily newspapers, through their joint
ownership of the WCCO stations, might be abusing their concentration of media
power first came to the attention of official Washington in March 1968. The manager of a WCCO competitor, Garfield
Clark of Station KSTP, St. Paul, Minnesota (licensed to Hubbard Broadcasting),
alleged abuse by WCCO in a statement filed with the United States Senate's
Antitrust Subcommittee, which was then hearing testimony on the proposed
Failing Newspaper Act (S. 1312). Mr.
Clark alleged that the WCCO stations, over the years, had been awarded
broadcasting rights to the Twin Cities' professional sporting events because of
pressure exerted by the joint newspaper, broadcasting, publishing, and
financial interests behind WCCO on the area's professional football, baseball,
and basketball teams.
By order
released March 21, 1969, the Commission voted 4 to 3 to designate the WCCO
renewal applications for hearing to determine, among other matters, whether
Midwest had used its position in the newspaper filed to obtain rights to
broadcasting professional sports and whether the joint ownerships and media
concentration in the [**28] Twin Cities
had allowed advantages to flow to Midwest to the disadvantage of other
Minneapolis-St. Paul broadcasters.
Midwest Radio-Television, Inc., 16 F.C.C.2d 943 (1969).
If
anticompetitive practices are eventually shown, of course, it is clear that the
Commission has the power and the duty under the general public interest
standard to take such conduct into account in
[*635] determining the
qualifications of possible licensees.
The Courts and the Commission have long recognized this. National Broadcasting Co. v. United States,
319 U.S. 190, 222-223 (1943).
II.
By Order of
April 28,1970, 22 F.C.C. 2d 897 (1970), the Commission delegated Midwest's
massive petition for reconsideration and related pleadings to a Hearing
Examiner and directed him to analyze the data and then to prepare a recommended
report of the factual showings. In
response, Examiner Sharfman issued a recommended report declaring that the
issues should be resolved in Midwest's favor and the hearing should be
terminated. Recommended Report of
Hearing Examiner Herbert Sharfman, F.C.C. 70M-838, June 18, 1970.
The Commission
staff and three Commissioners would have reversed Examiner Sharfman, and for
good reason. [**29]
Examiner
Sharfman emphasized the speed with which he had to prepare his 109-page report
in order to comply with the Commission's request for prompt action. The Examiner called this "the pressure
of 'expedition.'" Id. at 104.
Consider two
passages from Examiner Sharfman's conclusions:
I may be doing
the [Broadcast] Burau a disservice.
Perhaps it has a vast store of potential evidence which would appall
Midwest if it knew about it. But
somehow I doubt it. The pleadings gave
no indication of such a cache...
Whatever private reservations I might have about the kindliness of the
Ridders and Cowleses -- after all, one does not become a press lord without
pressing a few peasants -- I must restate my belief that the statements Midwest
has garnered, for instance to the effect that they have exerted no improper
pressure to secure broadcast rights, would be proof against impeachment. Id. at 107-108.
And an earlier passage from the same conclusion:
It will have
been noted that I did not proceed by taking each specification and expressing a
ruling on the order of "Resolved" or "Not Resolved." I do
not think that issues can be "resolved" by pleadings containing
hearsay declarations [**30] by
definition; the affidavits are always subject to a general decrial, as the
Bureau, for one, has uttered here, because they have not been tested in
cross-examination. For that reason
alone nothing has been "resolved," and certainly not in the sense
that the opposing parties have composed their differences and if not content,
at least feel that litigation will be unduly annoying. I have preferred to proceed somewhat like a
judge passing on a motion for summary judgment - to see whether there "is
[a] genuine issue as to any material fact and [whether] the moving party is
entitled to a judgment as a matter of law," FRCP 56c... Id. at 105.
(Emphasis supplied.)
The usual rule
for a motion for summary judgment, or, as here, for consideration of a petition
for reconsideration and grant without hearing, is that all doubts are to be
resolved against the petitioner (WCCO). U.S. v. Diebold, Inc., 369 U.S. 654,
655 (1962). The Examiner has done exactly the opposite here. The very tentativeness of the Examiner's
language (his emphasis on "the pressure of 'expedition'" and
statements like "somehow I doubt it") convincingly display that it is
not so clear that WCCO's showing is so overwhelming [**31] as to warrant the denial of the opponents'
right to cross-examination and to submit rebuttal evidence.
[*636]
III.
In addition to
the allegations about the Twin Cities' dailies and their refusal to play ball
with the cities' professional sport teams if WCCO did not receive the lucrative
broadcast contract rights, I have set out in the margin n18 details of this and other conflicting assertions
involved in this proceeding.
n18 The Commission staff has listed
these unresolved conflicts (and suggesting there are others):
(a) There are conflicting assertions
concerning what transpired at a meeting between the principals of the
professional teams, of the newspapers, of the broadcasting stations and of the
advertising agency regarding the award of broadcast rights for the Twin Cities
baseball team, the Minnesota Twins.
Hubbard Broadcasting contended that statements were made by a principal
of the advertising agency (Rolfes, a vice president of Campbell-Mithum, the
local advertising agency for Hamm's Beer, the latter being the sponsor of the
baseball games) that it would be futile to bid for the broadcasting rights of
the Minneapolis baseball team because the local newspapers let it be known to
the owners of the team that unless WCCO was awarded such rights, the newspapers
would no longer play ball with the team. Rolfes and all the other principals who attended this meeting deny
that such a statement was made or even implied.
(b) There are conflicting statements
regarding the failure of the Minneapolis newspapers to carry in their TV
listings of Sept. 21, 1969, the AFL professional football game presented on
KSTP-TV for that day. Hubbard
Broadcasting contend that the newspapers purposely omitted such listing in
favor of WCCO-TV, which was broadcasting its NFL game at the same time. The officials of the newspaper, however,
deny this allegation and contend that KSTP failed to notify them of what
specific game it would broadcast and, consequently. the paper merely listed
"football" for KSTP for that day.
In response thereto, Hubbard Broadcasting denies that it did not provide
specific information to the newspapers.
(c) Hubbard Broadcasting contends
that there were discriminatory practices by the newspapers in that they list
WCCO-AM first in their daily radio highlight listings. The newspapers, however, explain that after
1952, when it purchased WCCO-AM, it changed its format to put WCCO-AM at the
top of the daily radio listings solely because of "pride of
ownership" and that the KSTP order of listing was not changed, thus not
amounting to discrimination against KSTP. [**32]
No matter what a
full investigation might show, I conclude that the applicable law calls for the
commission to be a good deal more aggressive in ascertaining the details of
alleged misconduct. The Examiner seemed
particularly concerned that the complaining parties here had not alleged more
particular facts. It is important to
recognize, as Judge Tamm did in Hale v. F.C.C. [KSL], No. 22, 751 (D.C. Cir.,
Feb. 16, 1970), that particular facts are often neither available or required
because such parties are often at substantial disadvantages. "Information regarding the precise
effects which concentration of control has on programming and service is much
more readily available to the licensee than to the opponent, even if the
opponent is a large competing corporation with vast resources." Id. at
15. Little wonder Hubbard Broadcasting
had trouble compiling the "cache" of facts the Examiner seems to
require.
In Marine Space
Enclosures, Inc. v. F.M.C., 420 F. 2d 577 (D.C. Cir., 1969), the Court of
Appeals reversed the Federal Maritime Commission's decision to approve without
hearing an agreement containing marked anti-competitive features. In so doing the court rejected the agency's
[**33] contention that the petitioners
had not made sufficiently detailed allegations of factual questions to warrant
a hearing by stating that "the initial papers exposed issues of substance,
issues of such obvious gravity that the Commission should not in any event need
prompting from private parties before it holds a hearing." Id. at 587, n.
27. "[When] the issue fairly clamors for attention," the Court of
Appeals concluded, "even a gentle reminder speaks loud enough for the
agency conscientiously discharging its duty." Id. at 586.
[*637]
In F.M.C. v. Svenska Amerika Linien, 390 U.S. 238, 244 (19168), in a
case analogous to our situation here, the U.S. Supreme Court approved the
Maritime Commission's policy of shifting to an applicant for approval of a
restrictive agreement the burden of demonstrating the need for anticompetitive
restraints, noting by its very nature an illegal restraint of trade is in some
ways "contrary to the public interest."
The more
appropriate Commission stance has been suggested by the Court of Appeals in
United Church of Christ v. F.C.C., No. 19, 409 (D.C. Cir., June 20, 1969), in
language this Commission has paid scant attention to:
[A] "Public
Intervenor" who [**34] is seeking
no license... is, in this context, more nearly like a complaining witness who
presents evidence to police or a prosecutor whose duty it is to conduct an
affirmative and objective investigation of all the facts and to pursue his
prosecutorial or regulatory function if there is probable cause to believe a
violation has occurred.
These cases all
suggest that facts -- not half-truths, maybes, and untested voluminous
petitions -- are absolutely essential to the correct discharge of a Federal
regulatory agency's mandate.
"The agency
cannot be affirmed by supplying reasons and facts that it had neither found nor
considered to be relevant." Trailways of New England, Inc. v. C.A.B., 412
F. 2d 926, 931 (D.C. Cir. 1969). In Trailways, the Court of Appeals ruled that
the Civil Aeronautics Board cannot reject, without hearing, a bus company's
request that the C.A.B. investigate whether airlines' family fares are unjustly
discriminatory. Cf. Community
Broadcasting Co. v. F.C.C. 274 F. 2d 753, 763 (D.C. Cir., 1960) (Burger, J.)
(F.C.C. must hold "such inquiry as is needed to make comprehensive findings
on all relevant factors, including, but not limited to... the question of
concentration [**35] of mass
media.")
It was the
bright hope of the Congress, in an era when this Commission was born, that the
Federal regulatory agencies would come to be watchdogs of the public
interest. In the Commission's action
today I do not see a watchdog at work.
I see a lap dog asleep.