Docket
No. 19154
FEDERAL
COMMUNICATIONS COMMISSION
27
F.C.C.2d 580
RELEASE-NUMBER:
FCC 71-159
February
23, 1971 Released
Adopted
February 17, 1971
JUDGES:
BY THE COMMISSION: COMMISSIONERS
BURCH, CHAIRMAN; JOHNSON, AND H. REX LEE CONCURRING
AND ISSUING STATEMENTS; COMMISSIONER BARTLEY DISSENTING; COMMISSIONER WELLS
DISSENTING AND ISSUING A STATEMENT.
OPINION:
[*580] 1. On
January 15, 1970, the Commission issued its policy statement on comparative
hearings involving regular renewal applicants (22 FCC 2d 424). The crux of this
policy statement concerned the rendering of "substantial service" by
the renewal applicant. If the latter has rendered such service, without
substantial defects, he will be preferred over newcomers; if not, he obtains no
preference against the newcomer, and, while the ultimate issue will be
determined on the comparative criteria, obviously has a handicap since he is
then competing as one who chose to deliver less than substantial service to the
public. The Commission noted that the term "substantial", of
necessity, lacks mathematical precision, but was nevertheless a perfectly
appropriate standard, much used in statutes. It pointed to the dictionary
definition, "strong, solid, firm, much, considerable, ample, large, of
considerable worth or value; important." 22 FCC 2d at 426. Finally, the
Commission stated that the hearing process would be critical in implementation
of this standard (22 FCC 2d at p. 426):
"The renewal applicant would
have a full opportunity to establish that his operation was a 'substantial'
one, solidly meeting the needs and interests of his area, and not otherwise
characterized by serious deficiencies. He could, or course, call upon
community leaders to corroborate his position. On the other hand, the
competing party would have the same opportunity in the hearing process to
demonstrate his allegation that the existing licensee's operation has been a
minimal one. And he, too, can call upon community leaders to testify to
this effect if this is, indeed, the case. The programming performance of
the licensee in all programming categories (including the licensee's response
to his ascertainment of community needs and problems) is thus vital to the
judgment to be made. Further, although the matter is not a comparative
one but rather whether substantial service has been rendered, the efforts of
like stations in the community or elsewhere to supply substantial service is
also relevant in this critical judgment area. There would, of course, be
the necessity of taking into account, pertinent standards which are evolved by
the Commission in this field."
2. The purpose of this Notice
is to explore whether some pertinent standards can be evolved in the area of
television broadcasting. The [*581] reason for restricting
the inquiry to television is that our preliminary study of renewals has focused
on this area. It clearly constitutes a most important beginning
point. In view of their present problems, we exclude from our discussion
within (pars. 3-5) the independent UHF stations.
3. Clearly, any possible
guidelines must be general in nature; there is no way, we repeat, to delineate
with mathematical precision what constitutes "substantial service."
However, the issue in this inquiry is whether it is appropriate to focus on two
critically important areas, and to give some prima facie indication of what
constitutes substantial performance in these areas. The areas are local
programming, and programming designed to contribute to an informed
electorate. The reason for focus on these two areas is obvious. The
Congressional scheme of TV allocations is based on local outlets. See
Sections 307(b), 303(s); S. Rept. No. 1526, 87th Cong., 2d Sess.; H.
Rept. No. 1559, 87th Cong., 2d Sess. If a television station does
not serve in a substantial manner as a local outlet -- if it is, in effect, a
network spigot or mere purveyor of non-local film programming, it is clearly
not meeting its crucial role. Similarly, we have stated that the reason
we have allotted so much spectrum space to broadcasting is because of the
contribution which it can make to an informed electorate. See Report on
Editorializing by Broadcast Licensees, 13 FCC 1246, 1248 (1949). If a
broadcaster does not make such a contribution in a substantial fashion, he is
again undermining the basic allocations scheme.
4. We thus single out these
two areas: (1) local programming and (2) informed electorate programming (i.e.,
news and public affairs), and turn now to what figures should be proposed in
these areas for the comment of interested persons. In resolving that
matter, we have had, necessarily, to rely upon our judgment and experience as
to what should constitute "substantial service" in order to achieve
the all important basic allocation goals delineated above. However, it
would make no sense to propose goals which are unrealistic, so we have also
undertaken a study of all renewal applicants in the television markets.
Based on that study, we do not believe our proposals to be unrealistic because
in each of these categories, substantial numbers of broadcasters are meeting
the proposed guidelines. There are three caveats to be noted in this
respect. We have no data in some areas; thus, the form does not now
require information on public affairs programming in prime time. The
figure which we have selected for comment (3% of prime time or about an hour a
week) appears to us to be both reasonable and realistic one, called for to
achieve the above noted basic allocations goal. The second caveat is the
extent to which we should take into account the different revenue posture of
stations. We believe that as a general matter we should exempt the
unprofitable station from these guidelines. It is for that reason that
for the present (i.e., until they become profitable), we have excluded from
this inquiry the independent UHF stations. Similarly, in the unlikely
event that any other station losing money were to find itself in a comparative
renewal hearing, the station could show the inapplicability of these guidelines
because of its financial posture; judgment of its operation would thus have to
be on an ad hoc basis, directed to the particular facts. But aside
[*582] from this consideration of unprofitability, there is also the
issue whether, based on the study, different guideline figures are not
appropriate for stations with lesser revenue figures. To take this factor
into account, we propose, for the most part, a range in these categories.
The high end of the range would apply to the station in the top 50 markets with
revenues over $5,000,000, while the low end would apply to the station with
revenues below $1,000,000; a station with revenues between these figures would
fall appropriately within the range (with, we stress, no specification of a
precise, decimal-point figure but rather a general or "ball-park"
figure). The appropriate revenue bracket would be denoted on the renewal
or annual form, by checking a box. We specifically ask for comments directed
to this question of the appropriate range, and to facilitate such comments,
will make public our study data. n1 The third caveat has to do with the
area of programming designed to contribute to an informed electorate. In
view of the clear, close relationship between news and public affairs
programming, comments are requested whether these two categories should not be
viewed together, with one overall figure and leeway for the licensee to make
judgment within that figure. Thus, a station in a very large community
might make the judgment to concentrate on public affairs programming, in light
of the very intensive news efforts of several other stations in the
community. Or, a station, if it judged it a more effective way of
illuminating issues, might increase its news programming as against public
affairs, with the insertion in such news programming of substantial segments
dealing with public affairs discussions.
5. With this as necessary
background, we now set out the following proposed figures as representing
substantial service:
(i) With respect to local
programming, a range of 10-15% of the broadcast effort (including 10-15% in the
prime time period, 6-11 p.m., when the largest audience is available to watch).
(ii) The proposed figure for news is
8-10% for the network affiliate, 5% for the independent VHF station (including
a figure of 8-10% and 5%, respectively in the prime time period).
(iii) In the public affairs area,
the tentative figure is 3-5%, with, as stated, a 3% figure for the 6-11 p.m.
time period.
These
figures are, of course, tentative ones set forth for comment by the interested
parties.
6. There are a number of
obvious considerations as to the above inquiry. First, as stated, it does
not constitute the complete picture as to whether a station is rendering
substantial service. Thus, it does not deal with every programming
category. We believe that not every category is susceptible to the
drawing of general guidelines. For example, there may be substantial
agricultural interest in one area, and virtually none in another. As to
such variables, only individual inspection, perhaps in the hearing process,
could definitively delineate whether substantial service was being rendered in
every respect. This point merits emphasis; we have no intention, now or
at any future time, to try to delineate that X% of time need be devoted to a
particular programming area such as agriculture, religious, etc. Second,
even [*583] as to the two general areas where we think we can
usefully set forth overall guidelines for the reasons set forth in par. 3,
supra, we point out that the guidelines, if adopted, would not be a requirement
that would automatically be definitive, either for or against the renewal
applicant. Thus, if the applicant did not meet these guidelines, he could
still argue in a comparative hearing that his service was substantial, using
means such as described in par. 1, supra; he might point to an exceptional
qualitative effort, e.g., an exceptional dedication of funds, staff and other
resources to compensate for the lesser quantitative showing. On the other
hand, the fact that a renewal applicant did meet these general guidelines would
not preclude the contention at renewal or at a comparative hearing that his
service was not substantial in these two areas. An applicant could devote
a most substantial percentage of his time to public affairs, for example, but
with coverage solely of issues like canoe safety, rather than the issues that
are truly of "great public concern" in the area. See Red Lion
Bctg. Co. v. F.C.C., 395
7. The above proposal focuses
on the renewal applicant in relation to the criterion of substantial service
where there are competitors. That concept clearly has great relevance to
the renewal process generally since it constitutes the critically important
competitive spur. See Policy Statement, supra. There are other
revisions or proposals generally applicable in this renewal television field
which should be briefly noted and which, we believe, complement the foregoing
proposal:
(i) A renewal applicant would be
required to list the most important problems or concerns facing his area during
the twelve months preceding filing of his application which, in his opinion,
were most serious or important. He would then be required to list all the
programs he has presented during that same period which dealt with
[*584] these issues, giving the name of each program, the date, time and
duration of its broadcast, and a brief description of the program. At
yearly intervals (specifically on September 1), the broadcast licensee would
again prepare the information set out in the first two sentences of this
subsection (i). This information would be an attachment to a shortened
form which he would prepare at this annual interval, setting out, inter alia,
his performance in the above described categories (local; news; public
affairs).
(ii) As proposed in Docket No.
19153, the licensee would also make announcements at specified intervals,
concerning his obligation to serve the needs and interests of his area and, if
appropriate, his renewal application.
8. In view of the policy
considerations discussed, we would propose not to require the extensive survey
now incumbent upon the new of this proposal to simplify our procedures is that
there is no need at renewal for a new, detailed survey; the licensee should
have been digging in each year of his operation to ascertain and meet needs,
and would have maintained a continuing stream of contacts with interested
individuals, leaders, and groups. In short, when it comes to renewal --
to a question of performance consistent with the public interest standard -- it
is substance, not form, which is of critical importance. See par. 9,
infra.
9. We stress this point of
community involvement. The above proposals in par. 7 are geared to a
continuing dialogue between station and community -- not a triennial spurt; to
actual performance in crucial areas rather than elaborate surveys; and,
finally, to reliance upon community leaders and groups, both to point up the
need for any further inquiry by the Commission at renewal time or to spur
substantial performance by the possibility of filing of a competing
application. See Policy Statement, supra. By facilitating both awareness
of the station's performance in critical areas throughout the license term and
a continuing participation by the public, we believe that we are acting in a
manner fairer to the licensee and fairer to the interested public. None
of these proposals, we emphasize, is designed in any way to dictate a
particular program or format. They do indicate areas where the licensee
must focus in view of sound and basic allocations policy. But the
programming to be chosen to implement these policies is a matter for the
licensee's judgment, after giving appropriate and good faith attention to the
area's needs and interests. Since that is so, the Commission intends to
place great reliance on community interest and participation in the renewal
process. If the approach is successful in the area here under
consideration, a simplified approach to renewal, with emphasis on community
feed-back, will be considered for other broadcast areas. However, we
intend to complete our study of this television area, and to gain experience
therefrom, before turning to its consideration elsewhere.
10. If adopted, there is the
question of the applicability of the new policy criteria as to substantial
service. It would be clearly unfair to make such policies immediately
applicable to the renewal applicants and judge their performance in hearings on
policies which were not yet formulated or known to them; rather, if adoption of
these general [*585] criteria is found to be warranted, there should
be an appropriate time interval (e.g., 12 months) afforded licensees to meet
these guidelines. We ask for comment on that time period. Any
comparative hearings involving renewal applicants before that period would be
governed by the present, more amorphous standards, with showings along the
lines of the policy set out in par. 1, supra. In short, there would be a
moratorium not on the filing of competing applications but on the applicability
of these general criteria.
11. The foregoing proposal
thus constitutes the basis of an inquiry to explore whether it is feasible or
appropriate to give greater guidance with respect to the critically important
concept in our 1970 Policy Statement of "substantial service." If it
is not feasible or appropriate, one obvious alternative is simply to develop our
policies in this area through a series of ad hoc decisions, with any overall
policy awaiting the accumulation of greater experience. We have of course
reached no final or tentative conclusion, but rather would stress our openness
to all alternatives or suggestions as to what action would best serve our
objective and, in the final analysis, the "public interest in the larger
and more effective use of radio" (Section 303(g) of the Communications Act
of 1934, as amended).
12. Authority for this inquiry
is contained in Sections 4(i), 303, 307(d), 309, and 311(a) of the
Communications Act of 1934, as amended.
13. Pursuant to applicable
procedures set forth in §1.415 of the Commission's Rules and Regulations,
interested persons may file comments on or before May 3, 1971, and reply
comments on or before June 3, 1971. In accordance with the provisions of
§1.419 of the Rules, an original and 14 copies of all comments, replies,
briefs, and other documents shall be furnished the Commission. All
relevant and timely comments and reply comments will be considered by the
Commission before final action is taken in this proceeding. In reaching
its decision in this proceeding, the Commission may also take into account other
relevant information before it, in addition to the specific comments invited by
this Notice.
FEDERAL
COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
CONCURBY:
BURCH; JOHNSON; LEE
CONCUR:
[*587]
CONCURRING STATEMENT OF CHAIRMAN
DEAN BURCH
In our 1970 Policy Statement on
comparative hearings involving renewal applicants, we indicated that the
critical concept of "substantial service" would be determined by the
hearing process or by pertinent standards formulated by the Commission. I
recognize the need for the ad hoc process as to many facets of such a
hearing. In view of the considerations discussed in the majority opinion,
there can be no all-embracing detailed rule or policy in this field. But
it seems to me that to the extent that it is feasible to do so, there are
policy advantages to proceeding here in a general or overall fashion with
respect to [*588] some of the important bedrock criteria. It
allows all interested persons to participate in formulating the appropriate
standards, rather than having them fashioned by a series of narrow
adjudications with limited parties. It affords a much larger perspective
than the record compiled by parties in one proceeding. This method also
eventually results in affording prior and general notice to the industry and
the interested public as to what the general guidelines are -- obviously a
fairer way to proceed.
I am aware that the matter is a
difficult, sensitive one. The genius of the American system is its
pluralism -- its individuality. Any governmental effort which undermines
or thwarts that individuality is probably bad law and certainly bad
policy. I therefore fully subscribe to the statement in paragraph 6 that
we will and must eschew ordaining that x% of time be devoted to agricultural,
religious, etc., programming.
The Notice seeks to avoid that
pitfall by concentrating on two bedrock general areas, local programming and
programming designed to contribute to an informed electorate. And the
Notice is limited to television, which, unlike radio with its many specialized
operations, is akin to a "general store." Even as so limited, there
may be drawbacks to this or any percentage guideline approach.
However, I think that the approach
is worthy of full exploration. To paraphrase Winston Churchill's famous
remark about democracy, this may be the worst way of proceeding except when you
consider all other ways of proceeding. Sooner or later -- generally or in
ad hoc fashion, the agency must come to grips with the basic questions here
raised. I believe that it may well be both better and fairer to do so
sooner and in a general inquiry than to await the slow accretion of policies
formulated in narrow adjudications with limited records and limited
participation by interested persons. If the record of this inquiry
establishes that it is not feasible to formulate general guidelines even in
these limited areas, then we must await the judgment of the individual
cases. But we will at least have tried to explore a method which appears
to be fairer to the interested groups, to the broadcasters, and above all to
the public interest.
CONCURRING OPINION OF COMMISSIONER
NICHOLAS JOHNSON
The history of this proceeding and
my views on it, have been spelled out earlier. Comparative Hearing on
Renewal Applicants, 22 F.C.C. 2d 833, 841 (1970), reconsideration denied 24
F.C.C.2d 383, 386, (1970); Hearings on S. 2004 Before the Comm. Subcom. of the
Senate Comm. on Commerce, 91st Cong. 1st Sess., ser. 91-18, pt. 2 at 398
(1969); "No We Don't," New Republic, Dec. 6, 1969, pp. 16-19; How to
Talk Back to Your Television Set (1970).
Suffice it to say, the Commission is
now obliged to deal, in some fashion, with the creation of a definition of
"substantial performance."
Thus, while I cannot relax and enjoy
it, I can at least bring myself to confront the inevitable. Accordingly,
I concur in the issuance of this Notice of Inquiry.
As I see it, we have two basic
alternatives: (1) A "common law" case-by-case evolution of
"substantial performance," or (2) an effort [*589] at
general definition and promulgation as a general policy statement or rule.
The latter approach clearly has the
advantages of (1) administrative ease, reducing our hearings and processing
load substantially, and (2) reducing the sense of insecurity and instability in
the industry when standards are vague, unarticulated or unknown.
If general guidelines are to be
used, we then reach the following issues.
First, there is a fundamental
conceptual issue regarding the nature of "substantial." Is the FCC to
determine levels of programming performance (or other criteria) which, if met,
constitute "substantial" performance? Is it theoretically --
and practically -- possible for all licensees to be "substantial"
performers?
Or does "substantial"
refer to the "best" performers -- necessarily a comparative
evaluation?
The industry's arguments at the time
(and later before this Commission), and the concern of public interest groups,
I had always assumed the latter standard was what was desired and anticipated.
If the comparative approach is to be
used, we must then address some crucial "details." What percentage of
the broadcasters can be found to have demonstrated "substantial
performance" -- 2%, 10%, 25%, 50%, 80%?
So far in this discussion we have
not considered criteria. That is, we have simply put the question,
"regardless of the criteria used, once they are selected and applied, what
percentage of the top performers will be deemed to be substantial?"
But once that has been resolved, we
confront the question of criteria. Are news, public affairs and local
programming the only quantifiable measures?
As the notice now stands it is not
necessarily a commitment to revise the performance levels upward in such manner
as to continue to "protect" approximately the same percentage of
broadcasters as the present levels. Should it be?
In short, so far as I am concerned
there are a great many open questions to be addressed in this inquiry -- even
apart from the most fundamental misgivings as to why we painted ourselves into
this corner in the first place.
I concur in the proposition that we
have to move. Aside from that, I'm open to suggestions on where we go.
CONCURRING STATEMENT OF COMMISSIONER H. REX LEE
I have concurred in putting out for
inquiry the Commission's newly proposed renewal standards and definitions of
substantial performance by television broadcast licensees. As the
Chairman states in his concurring opinion, the search for standards by all
parties concerned is far preferable to the process of allowing such standards to
evolve through adjudications standing on limited records and entirely on local
public interests.
Nevertheless, I am concerned with
the inclusiveness and generality of these standards and definitions.
Their broad brush and sweep tend to neglect economic realities and structural
differences within the [*590] broadcasting industry. While it
may be entirely realistic and financially reasonable to impose these new
requirements on television stations in the top fifty markets, the competitive
and financial position of television stations in smaller markets seems to
demand a search for different approaches. In other words, wisdom would
seem to dictate that the Commission, for renewal purposes, begin exploring the
advisability of classifying broadcasting stations based on financial and
competitive considerations rather than begging off the question with a
statement that our guidelines may not be definitive or conclusive either in
finding, or being unable to find, that the public interest has been served.
Moreover, there seems to be some
degree of short-sightedness in a system of regulation which encourages local
live origination, local news and public affairs by broadcasters in markets
"bristling" with CATV activity where the importation of distant network
signals undercut a broadcaster's efforts to meet his regulatory and public
interest obligations. The same may be said of the situation where small
market broadcasters must cope with these severe local public interest
requirements in the face of specialized programming demands imposed by
competition and the growing law of community group rights. Yet I am
fearful that the generality of these new standards does not allow, with
sufficient clarity, adequate exception or local variations which may be in the public
interest. Under any system of law it may be appropriate to leave certain
questions unanswered. But business enterprises need a higher standard of
certainty in order that their operations may take place in an environment of
relative stability.
These considerations, of course,
should not paralyze the search for general standards. It is for this
reason that I have concurred. But I do hope the various parties will
provide us with sufficient information so that we may begin to address these
questions.
DISSENTBY:
WELLS
DISSENT:
DISSENTING STATEMENT OF COMMISSIONER
ROBERT WELLS
Although many licensees will welcome
the short range benefits of having numerical requirements to meet, I feel that
in the long run this principle will not benefit either the licensee or the
public. I fear that setting quantitative standards will be the impetus
for licensees to play this numbers game to satisfy the Commission. If
this occurs, the licensee will not be discharging his responsibility to operate
the station in the public interest. If this country is to enjoy truly
diverse programming, we must leave some measure of flexibility to the
licensee. This policy will leave fewer decisions to management.
We are naive if we think that the
licensee of a television station that is worth millions of dollars will take
any chances on falling below our numerical floor. If by meeting or
exceeding these numbers he is practically assured of license renewal, there can
be no doubt as to the course he will follow. By meeting these requirements,
he will have precluded the possibility of the public being in a position to
have a meaningful impact on his performance.
[*591] I realize that
handling renewals on a case-by-case basis is not the most expeditious way to
discharge our responsibilities. But, after all, the function of this
agency is to render judgment, not necessarily to set hard and fast rules.
True, there will be leeway for some judgment under the proposal that the
majority has sanctioned. It will be minimal compared to the latitude
which both the broadcaster and the public have a right to expect. We have
taken the easy road.