In Re Applications of WFMY TELEVISION CORP. (WFMY-TV),
GREENSBORO, N.C. For Renewal of Broadcast License; GREENSBORO TELEVISION CO., GREENSBORO,
N.C. For Construction Permit
For New Television Broadcast Station
File No. BRCT-69; File No. BPCT-4303
FEDERAL COMMUNICATIONS COMMISSION
33 F.C.C.2d 857
RELEASE-NUMBER: FCC 72-82
March 2, 1972 Released
Adopted January 26, 1972
JUDGES:
BY THE COMMISSION: CHAIRMAN BURCH
CONCURRING AND ISSUING A STATEMENT; COMMISSIONER BARTLEY CONCURRING IN THE
RESULT; COMMISSIONER JOHNSON DISSENTING AND ISSUING A
STATEMENT; COMMISSIONER H. REX LEE ABSENT; COMMISSIONER WILEY DISSENTING.
OPINION:
[*857] 1. We have
before us for consideration: (a) the application of WFMY Television Corp.
(WFMY) for renewal of license of television broadcast station WFMY-TV, channel
2, Greensboro, North Carolina; (b) the application of Greensboro Television
Company (Greensboro) for a construction permit for a new television broadcast
station to operate on channel 2, Greensboro, North Carolina; and (c) a
"Joint Petition for Approval of Agreement", filed May 28, 1971, by
WFMY and Greensboro. n1
n1 On July 15, 1971, the attorneys for WFMY also
submitted a Memorandum of Law in support of the joint petition.
2. The joint petition seeks
Commission approval for the dismissal of Greensboro's application in return for
WFMY's reimbursement of Greensboro in an amount determined by the Commission to
have been legitimately and prudently expended in connection with the preparing,
filing and prosecution of Greensboro's application, but not to exceed
$44,195. For the reasons stated below, we find that the Joint Petition
for Approval of Agreement should be denied.
3. A review of our policy
concerning the approval of withdrawal agreements is essential to an
understanding of our action denying the present withdrawal petition.
Section 311(c)(3) of the Communications Act of 1934, as amended, provides, in
part, that the Commission shall approve withdrawal agreements, "only if it
determines that the agreement is consistent with the public interest,
convenience or necessity". We have held that in deciding whether to
approve a withdrawal agreement between competing applicants, benefits and
detriments to the public interest must be weighed. A substantial and
obvious detriment which flows from the approval of such agreements is
that [*858] the public is deprived of a choice between
applicants. In the situation where the withdrawal agreement involved
applicants for a construction permit, "that detriment is more than offset
by the consideration that the withdrawal permits one of the several qualified applicants
to bring a needed service to the public without the lengthy delay involved in
the multi-party comparative hearing". National Broadcasting Co.,
Inc., 25 RR 67 (1963). However, where the withdrawal agreement is between a
renewal applicant and an applicant for a construction permit, this offsetting
benefit to the public interest does not exist because the public is already
receiving a service and will continue to do so during the course of the
hearing. National Broadcasting Co., Inc., supra; Cragin Broadcasting Co.,
7 FCC 2d 511, 9 RR 2d 1127 (1967). Thus, we must examine the present withdrawal
agreement in order to determine whether there are other countervailing public
interest considerations or other unique circumstances which would outweigh the detriment
to the public which would result from the loss of choice between applicants at
a time when the public is receiving service and will continue to do so.
4. Initially, we note that
petitioners assert that approval of the withdrawal agreement would serve the
public interest in that it would eliminate the need for a protracted
comparative hearing which would unnecessarily burden the Commission and its
staff and would require WFMY to spend substantial funds in connection with the
preparation and prosecution of its application through the hearing
process. It is also contended that if a hearing is required, the
management and staff personnel of station WFMY-TV would be diverted from their
normal activities in order to prepare and participate in the hearing and that
this would be detrimental to the station's ability to continue to serve the
public. We are unable to conclude that these considerations, which are
directed, in part, to the private interest of WFMY are of sufficient weight to
offset the detriment to the public interest which would result from the loss of
a choice between competing applicants.
5. Petitioners allege,
further, that there are unique circumstances present in this case which warrant
our approval of the withdrawal petition. Greensboro states that it filed
its application in November 1969, on the assumption that it would be accorded a
full comparative hearing in which such factors as ascertainment of community
problems, integration of ownership and management and concentration of control
of media would be in issue. n2
Subsequent to the filing of its application, the Commission, on January 15,
1970, issued its Policy Statement on Comparative Hearings Involving Regular
Renewal Applicants, 22 FCC 2d 424 (1970), reconsideration denied, 24 FCC 2d 383
(1970), which provided that if the renewal applicant demonstrated that its
program service during the preceding license period had been substantially
attuned to meeting the needs and interests of its area, and that the station's
operation had not been otherwise characterized by serious deficiencies, the
renewal applicant would be preferred [*859] over the competing
applicant and its application would be granted. Greensboro states that
the Commission's Policy Statement also indicated that the question of
diversification of the media of mass communication would not be an issue in
such a hearing since the Commission was of the view that diversification should
be the subject of general rule-making proceedings rather than ad hoc decisions
in renewal hearings. In this connection, Greensboro notes that the
Commission, on April 6, 1970, issued a Further Notice of Proposed Rule Making
in Docket No. 18110, 22 FCC 2d 339 which involved the divestiture of broadcast
interest by commonly owned newspapers in the same market. Furthermore,
Greensboro alleged that while 9t ha& raised no questions as to the
substantiality of WFMY's programming service during its preceding license term,
its request for an issue concerning WFMY's ascertainment of community problems
had been effectively eliminated as a result of a programming amendment to
WFMY's renewal application which was submitted after the Commission issued its
Primer on Ascertainment of Community Problems by Broadcast Applicants, 27 FCC
2d 650, released February 23, 1971.
6. In view of the foregoing
actions and the Commission's decisions in National Broadcasting Co., Inc., 24
FCC 2d 218, 19 RR 2d 634, released July 7, 1970, and Post-Newsweek Stations,
Florida, Inc., 26 FCC 2d 982, 20 RR 2d 730, released November 16, 1970,
approving agreements between license renewal applicants and competing
applicants for the withdrawal of the competing application with reimbursement
of expenses to the competing applicant, Greensboro concluded that its chances
of success in a hearing had been so adversely affected by the changed
conditions since its application was filed that it sought withdrawal of its
application and reimbursement of its expenses.
7. As indicated above, the
Joint Petition was filed on May 28, 1971, shortly before the United States
Court of Appeals for the District of Columbia Circuit in Citizens
Communications Center v. F.C.C., Case No. 24,471 U.S.
App. D.C. , 447 F. 2d 1201, 22 RR 2d 2001, decided June 11, 1971,
held the Commission's Policy Statement to be invalid. In their July 15,
1971, Memorandum of Law, the attorneys for WFMY, the renewal applicant, argued,
however, that the Court's reversal was only procedural in nature, in that the
Court determined that the hearing procedure set forth in the Policy Statement
did not accord a competing applicant a full hearing on its application as
required by section 309(e) of the Communications Act of 1934, as amended, and
Ashbacker Radio Corp. v. F.C.C., 326 U.S. 327 (1945). It is contended,
therefore, that that decision does not deprive the applicants of the
"unique circumstances" relied upon by the Commission in the National
Broadcasting Co., Inc., and Post-Newsweek cases, supra, in allowing the renewal
applicants to reimburse withdrawing competing applicants in those cases.
n2 In support of its contention, Greensboro points
out that it filed a Petition to Designate Issues for Hearing which requested
that issues be specified concerning WFMY's ascertainment of community problems
and the common ownership by WFMY's parent corporation, Landmark Communications,
Inc., of the only VHF television broadcast station and the only daily newspaper
in Greensboro.
8. We have recited
petitioners' contentions at some length, but the short answer is that we have
now returned to the controlling principle of the 1963 National Broadcasting
Co., Inc., case supra. That principle certainly should not be set aside
for the considerations set out in par. 4 -- to obviate the burden on the
Commission or on WFMY. That would be true in every renewal comparative
hearing, and would simply mean overruling the 1963 National Broadcasting Co.,
Inc., case. We decline [*860] to do so. We believe that
generally the public interest is served by the policy embodied in that case.
9. We did waive the policy in
the unusual circumstances of the 1970 National Broadcasting Co., Inc., and
Post-Newsweek cases. We do not now hold that this area is now
definitively settled in all respects. Clearly it is not, as evidenced not
only by the issues raised by the Court's decision in Citizens Communications
Center, but also those in the Further Notice of Inquiry, in Docket No. 19154,
31 FCC 2d 443, released August 20, 1971. It may be a considerable period
of time before all significant aspects of policy in this field are definitively
settled. Indeed, it may be completely settled only with the issuance of a
series of decisions over a period of some years. That being the case, the
crucial question now is whether we should follow the 1963 National Broadcasting
Co., Inc., case at this time. We think the answer is clearly adherence to
that basic decision. The new applicants are now to be afforded a full
comparative hearing. See Further Notice, supra. Of course, the
applicants' reliance on some point or other may turn out to be ill-founded;
that was true here, for example, with respect to the survey of community needs
(see par. 5 supra). However, that will usually always be the case with
some significant point. The new applicant could always point to some new
development, and call it a significant new factor, warranting an exception to
the basic policy set out in the 1963 National Broadcasting Co., Inc.,
case. We therefore conclude that the new applicant must make his judgment
to go forward with the full hearing in which he can advance his grounds why he
should be preferred, or to dismiss, but with no reimbursement of expenses.
10. We note that Article five
of the agreement specifies that if it is not approved by the Commission, then
the agreement shall be null and void and the applications and related pleadings
shall remain pending before the Commission. Since the possibility exists
that Greensboro may decide to voluntarily dismiss its application, we shall
provide that prior to our designating the above-captioned applications for
comparative hearing, we will require Greensboro to file a statement of its
intent within thirty (30) days of the release of this Order. In the event
Greensboro does not file a statement indicating its intent to participate in further
proceedings before the Commission, its application will be dismissed for
failure to prosecute.
11. IT IS ORDERED, that the
Joint Petition for Approval of Agreement, filed May 28, 1971, by WFMY
Television Corp., and Greensboro Television Company IS DENIED.
12. IT IS FURTHER ORDERED,
that unless Greensboro Television Company, within thirty (30) days of the
release of this Order, files a statement evidencing its intent to participate
in further proceedings before the Commission, its application will be dismissed
for failure to prosecute pursuant to section 1.568(b) of the Commission's
rules.
FEDERAL
COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
CONCURBY:
BURCH
CONCUR:
[*861] CONCURRING
STATEMENT OF CHAIRMAN BURCH
The issue presented can readily be
defined. Its resolution however, is more difficult.
The issue is not whether we should
overrule the basic policy set forth in the 1963 NBC case, 25 Pike &
Fischer, Radio Regulation 67. In my judgment, an applicant in a renewal
comparative hearing generally should not receive payment of expenses upon
election to dismiss his application. Such payments would serve no public
interest (see majority opinion, par. 3)and thus would simply be an area where
abuses could occur. There is no basis for waiver of this policy on
grounds of alleviating burdens or the evaporation of some points of reliance
through amendment.
However, I fully agreed with the
Commission's action permitting the payment of expenses to the dismissing
challenger in the 1970 NBC (KNBC) case, 24 FCC 2d 218. In that case, confusion
stemming from the WHDH, Inc., decision, 16 FCC 2d 1 (1969) had encouraged the
challenge, and that confusion was settled by the 1970 Policy Statement, 22 FCC
2d 424. In the circumstances, fairness dictated that the challenger should be
permitted to withdraw with reimbursement of his expenses. And while the
circumstances were "unusual" as the majority notes, I, for one, was
certainly prepared to extend the 1970 NBC ruling to all applicants who were
similarly situated. See, e.g., Post-News-week Stations, Florida, Inc., 26
FCC 2d 982 (1970) (reimbursement again permitted because of a confused
situation clarified in the designation order). n1
n1 I note that I have also been willing to permit
the payment of reasonable expenses in the petition to deny situation. See
KCMC, Inc., 25 FCC 2d 603, 605-06 (1970), appeal pending sub. nom Office of
Communication of United Church of Christ v. FCC, Case No. 24672, C.A.D.C.
This entire area of consideration in the non-comparative renewal situation is
in some confusion, as shown by recent decisions. See Straus Broadcasting
Co. of Atlanta, Inc., 31 FCC 2d 550 (1971); In re Mullins Broadcasting Co., FCC
72-89. I therefore welcome the inquiry to be held in this area, and, as
stated in Mullins, believe that it should be concluded within a six months
period.
The applicant here, Greensboro
Television Company, also filed after WHDH and before issuance of the 1970
Policy Statement. It also can claim that there was confusion as to basic
policies governing this situation. The issue is thus what, if anything,
distinguishes this case from the 1970 NBC case.
The critical consideration is the
Court's reversal of the 1970 Policy Statement in Citizens Communications Center
v. FCC, 447 F. 2d 1201 (1970). For, we are no longer dealing with the 1970 NBC
situation -- confusion and then a new definitive policy. Rather, we now
face a period where the policies governing the comparative renewal case will be
evolving. There is no question but that there must be a full hearing
going into all relevant matters; there is also no question of the importance of
the renewal applicant's past record and other considerations discussed in our
Further Notice in Docket 19154 (FCC 71-826). But significant policy
determinations remain to be made, either in legislation, overall rule making
proceedings or in ad hoc decisions. I believe, therefore, that this area
will continue to be subject to significant developments for some period of time
-- developments which could be reasonably cited by applicants as the basis for
a decision to withdraw with reimbursement of expenses.
[*862] Thus, it is no
longer a matter of fairness to some few applicants caught between two
developments (the 1970 NBC situation). It is now a case of continuing and
evolving policy. As a practical matter, therefore, we are faced with a
choice of either abandoning the general 1963 policy during this evolutionary
period or adhering to it. I believe that we should follow the latter
course. After all, the 1963 policy is the general one and it is
sound. To abandon it for some indefinite but substantial period of time
would be difficult to justify. Indeed, it might lead to complete atrophy
of the policy, as we and parties become accustomed to a contrary way of
proceeding.
In sum, I recognize that there are
countering considerations. One of my strongest tenets is that interested
parties are entitled to know the general rules of the game, particularly in
important areas such as this. Where there are significant uncertainties,
this is not only poor administration but gives rise to substantial equitable
claims. Nevertheless, I must choose the course that best serves the
public interest on an overall basis. In my judgment, that course is
adherence to the general policy, and therefore I concur in the majority action.
DISSENT:
DISSENTING OPINION OF COMMISSIONER
NICHOLAS JOHNSON
I dissent for the reasons set forth in
the Chairman's concurring opinion, as well as for other reasons set out below.
The Chairman describes, quite
accurately, the considerations we faced in the 1970 NBC case ( National
Broadcasting Co., Inc., 25 F.C.C. 2d, 218 (1970)(, when we permitted the
reimbursement of expenses by the incumbent licensee to a challenging applicant
who withdrew his competing application. The argument there was that our
decision in WHDH, Inc., 16 F.C.C. 2d 1 (1969), had invited competing applicants
who were subsequently "rebuffed" by our 1970 Policy Statement.
We felt that competitors who relied on our earlier policy should not be forced
to bear the burden of litigation expenses made virtually useless by the
majority's change of heart in 1970. Thus, we permitted withdrawal
agreements which included reimbursement of expenses.
The majority in this case seems to
thinks that everything is rosy since the Policy Statement was overturned by the
Court. Even the Chairman does not buy this. In his concurring
opinion he recognizes that "significant policy determinations remain to be
made, either in legislation, overall rulemaking proceedings or in ad hoc
decisions... [This] area will continue to be subject to significant
developments for some period of time."
Indeed, our decision in the Moline
case, 31 F.C.C. 2d 263 (1971), a decision I continue to believe was lawless,
can only be viewed as a significant deterrent to competing applications.
Until Moline is reversed, we can hardly say that a competing applicant is in a
position to assess, with any degree of confidence, what the Commission's policy
is with regard to comparative renewals. This is a marked difference from
the state of affairs following our decision in WHDH, the decision which
prompted the competition in both NBC and here. The difference between the
Chairman's position and mine, then, is that based on a common understanding of
the current impact of recent decisions [*863] in the area of
comparative renewal policy, he finds no reason to abandon our general policy of
denying reimbursement agreement, while I find no reason to stray from our
exceptions to that general policy.
But I would approve the agreement
for other reasons as well. It is high time we reexamined our 1963 policy
of not approving such agreements. The only justification for continuing
that policy, so far as I can tell, is that they are subject to potential
abuse. But they are subject to no more abuse than settlements in court
cases involving reimbursement of attorney's fees in exchange for dismissing an
action. Courts have permitted this for years, and have adequately policed
these agreements, disallowing those which cannot be shown to be
reasonable. There is no reason that we cannot establish procedures and
criteria to separate strike applications from those filed in good faith, for
purposes of reimbursement.
Obviously, our ability to make such
determination is not, in itself, sufficient justification to announce a policy
of approving reimbursement agreements. Aside from the kind in which
equity demands approval, such agreements must only be permitted if we can
conclude that the public interest will be served by approving them. As a
general rule, I believe that such agreements are in the public interest.
They stimulate competition for a scarce public resource, which almost
definitely improves the quality of the operation of the television and radio
stations involved, and thereby increases the benefit the public can expect to
receive in exchange for granting the use of the resource to a private party for
profit making purposes. Thus, while a policy of always approving such
agreements may be subject to abuse, a policy of never approving them chills
competition for a public resource, and tends to act as a protective blanket for
those licensees who, for whatever reason, carry out their responsibilities with
something less than an acute awareness of and service to the interests of the
people they are licensed to serve.
I dissent to the Commission's
action. I would approve the agreement in this case on equitable grounds,
for the reasons set out in NBC and Post-Newsweek Stations, Florida, Inc., 26
F.C.C. 2d 982 (1970), and would further reverse our 1963 policy on
reimbursement agreements and instruct the staff to develop criteria for making
the public interest judgment necessary to evaluate these agreements.