Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-95-01365/USCOURTS-caDC-95-01365-0/pdf.json

Parties Involved:
Busse Broadcasting Corporation
Appellant
Citadel Communications Company Ltd.
Intervenor
Federal Communications Commission
Appellee
Pappas Telecasting of the Midlands
Appellant

Document Text:

<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 26, 1996 Decided July 12, 1996

No. 95-1365

BUSSE BROADCASTING CORPORATION AND

PAPPAS TELECASTING OF THE MIDLANDS,

APPELLANTS

v.

FEDERAL COMMUNICATIONS COMMISSION,

APPELLEE

CITADEL COMMUNICATIONS COMPANY LTD.,

INTERVENOR

Consolidated with

95-1366

-

Appeals of an Order of the

Federal Communications Commission

Vincent A. Pepper argued the cause for appellants. With him on the briefs were John G. Johnson,

Jr. and Scott M. Badami.

Joel Marcus, Counsel, Federal Communications Commission, argued the cause for appellee. With

himon the briefs were William E. Kennard, GeneralCounsel, Christopher J. Wright, DeputyGeneral

Counsel, Daniel M. Armstrong, Associate General Counsel, Anne K. Bingaman, Assistant Attorney

General, United States Department ofJustice, Robert B. Nicholson, and Marion L. Jetton, Attorneys.

Maureen E. Mahoney argued the cause for intervenor. With her on the brief were Kevin C. Boyle

and Eric L. Bernthal.

Before: SILBERMAN, RANDOLPH and TATEL, Circuit Judges.

Opinion for the Court by Circuit Judge TATEL.

TATEL, Circuit Judge: Citadel Communications Company, Ltd. applied to the Federal

Communications Commission for permission to move KCAN-TV, a television station broadcasting

ABC programs on VHF Channel 8, from Albion to Lincoln, Nebraska. Citadel also applied to

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 1 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

operate a newly established UHF television station in Albion, Channel 24. Concerned that moving

KCAN would deprive residents in the Albion area of network programming, the FCC approved the

application subject to Citadel initiating ABC programming on Channel 24.

Two competitors providing television service in the Lincoln area objected to Citadel's

proposal before the Commission and now press three arguments on appeal. Claiming that the FCC

had never previously required a television station to broadcast a particular network's programs and

that the agency failed to explain its departure from precedent, they first argue that the FCC acted

arbitrarily and capriciously in requiring Citadel to commence ABC service on Channel 24 in Albion.

Because the competitorsfailed to provide the agencywith a fair opportunityto addressthis argument,

we decline to reach it. The competitors also argue that the FCC impermissibly waived its "duopoly

rule," which would normally prohibit Citadel from owning both Channel 24 in Albion and another

television station, Channel 9 in Sioux City, Iowa. Rejecting that argument, we conclude that the

agency did not abuse its discretion in waiving the duopoly rule through adjudication and that, to the

extent the agency departed from precedent, it offered a reasonable explanation for doing so. Finding

equally without merit the competitors' third argumentthat the FCC failed to distinguish this case

adequately from the so-called "Anniston" casewe affirm the FCC's order.

I.

Since 1986, Citadelhas owned KCAN-TV, a television station broadcasting onVHFChannel

8 from Albion, Nebraska. Citadel operates KCAN as a "satellite" of another television station that

it owns, KCAU-TV, an ABC affiliate broadcasting on Channel 9 from Sioux City, Iowa. As a

satellite station, KCAN generally does not originate its own programming, but retransmits ABC

programs appearing on KCAU. Through this arrangement, KCAN has provided ABC programming

to the Albion area.

In 1991, Citadel applied to the FCC to move KCAN from Albion, a community of about

2,000 people, to Lincoln, the state capitalwith a population of nearly 200,000. According to Citadel,

Albion was too small to support a VHF station and Lincoln, with only one local commercial VHF

station, was under-served. As part of its application, Citadel proposed "reallotting" Channel 8 from

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 2 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Albion to Lincoln as well as modifying KCAN's license to indicate that Lincoln would be its new

community of license. To assure continued local television service to Albion, Citadel also proposed

that the FCC allot a new UHF channel to Albion, Channel 18. Citadel promised that, if the FCC

approved its requests, it would apply for a permit to construct and operate Channel 8 in Lincoln. It

also pledged to apply to construct and operate the new Channel 18 in Albion as a satellite of Channel

9 in Sioux City, thereby assuring continued ABC programming in the Albion area.

Citadel's applicationprecipitated a series ofFCCOrders, additionalCitadelfilings, and several

filings by intervening opponents. Because these proceedings are important to understanding the

issues before us, we describe them in some detail. They began in April 1993 when the FCC's Mass

Media Bureau approved the proposed reallotments of channels 8 and 18, but refused to approve

either the modification permit to change KCAN's community of license or the construction permit

to allow Citadel to build and operate KCAN in Lincoln unless Citadelsatisfied what the parties refer

to as the "ABC condition." To "ensure that virtually all of the current viewers of Albion Channel 8

will experience no significant loss of network television service," the Bureau required Citadel to

"initiate[ ]" ABC network service on Channel 18 in Albion before it could move KCAN from Albion

to Lincoln. Amendment of Section 73.606(b), Table of Allotments, Television Broadcast Stations

(Albion, Lincoln, and Columbus, Nebraska), 8 F.C.C.R. 2876, 2878-79 (MMB 1991) (report and

order).

In response to the Bureau's April 1993 order, Citadel applied for the necessary permits. With

regard to moving Channel 8, it sought a permit to change KCAN's community oflicense from Albion

to Lincoln and a permit to construct and operate Channel 8 in Lincoln. Citadel also applied for a

permit to construct and operate the new Channel 18 in Albion. While these applications were

pending, two developments affected Citadel's application to construct Channel 18. ABC informed

Citadel that it would make Channel 8 an ABC affiliate once the station moved to Lincoln, prompting

Citadel to amend its application to indicate that it would operate Channel 18 in Albion as a satellite

of Channel 8 in Lincoln, rather than as a satellite of Channel 9 in Sioux City. More significant,

another company applied to operate Channel 18 in Albion. To avoid a comparative hearing on the

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 3 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

competing applications to construct Channel 18, the Mass Media Bureau proposed and after public

comment approved allotting a new UHF channel, Channel 24, to Albion. Amendment of Section

73.606(b), Table of Allotments, TelevisionBroadcast Stations(Albion,Nebraska), 10 F.C.C.R. 3183

(MMB 1995). Citadel then changed its application for a construction permit for Channel 18,

indicating that it would construct Channel 24 instead.

As a result ofthese developments, Citadel'sfinal proposal wasto move KCAN from Channel

8 in Albion to Channel 8 in Lincoln, which involved reallotting Channel 8 from Albion to Lincoln,

modifying KCAN'slicense to change its community oflicense from Albion to Lincoln, and providing

Citadelwith a permit to construct and operate Channel 8 in Lincoln. Citadel also proposed operating

UHF Channel 24 in Albion as a satellite of its proposed Lincoln station, which involved allotting

Channel 24 to Albion and granting Citadel a permit to construct and operate Channel 24.

Two televisioncompaniesserving the Lincoln areaBusseBroadcastingCorporation, which

operates the local CBS affiliate in Lincoln, and Pappas Telecasting of the Midlands, which operates

the Fox network affiliate in Omaha, Nebraskaopposed Citadel at virtually every stage of these

proceedings. Four of their challenges are relevant here. First, when the Bureau approved reallocating

channels 8 and 18 in April 1993, they petitioned the agency for reconsideration of that decision.

Second, when the Mass Media Bureau proposed to allot Channel 24 to Albion, Busse objected; after

the Bureau approved the allocation, Busse petitioned the Commission for review. Third, the

competitors objected to all of Citadel's permit applications. And, finally, Busse petitioned the

Commission to stayconsideration ofCitadel's permit applications untiltheCommission addressed the

reallocations that the Bureau approved in April 1993.

In June 1995, the Commission issued three related orders generally approving Citadel's

proposal. Rejecting the competitors' petition for reconsideration of the Bureau's April 1993 order,

the Commission approved the reallocation of Channel 8 from Albion to Lincoln. Amendment of

Section 73.606(b), Table of Allotments, Television Broadcast Stations (Albion, Lincoln, and

Columbus, Nebraska), 10 F.C.C.R. 11,931 (1995). Rejecting Busse's petition for review, the

Commission approved the allocation of Channel 24 to Albion. Amendment of Section 73.606(b),

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 4 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Table of Allotments, Television Broadcast Stations(Albion, Nebraska), 10 F.C.C.R. 11,927 (1995).

Finally, without addressing Busse's petition for a stay, the Commission approved Citadel's permit

applications to change KCAN's community of license to Lincoln and to construct and operate the

stations in Lincoln and Albion. Citadel Communications Co., 10 F.C.C.R. 11,910 (1995). The

Commission continued the ABC condition, approving the move from Albion to Lincoln "subject to

the condition that ... [Channel 24 in Albion] is operational and has commenced ABC Network

service." Citadel Communications Co., 10 F.C.C.R. at 11,924.

The competitors filed a notice of appeal under 47 U.S.C. § 402(b)(6) and, alternatively, a

petition for review under 47 U.S.C. § 402(a). Because our analysis is the same under either, we need

not decide which provision governs.

II.

During oral argument, the competitors abandoned their lead argument that imposing the ABC

condition violated section 326 oftheCommunications Act, which prohibits "censorship" oftelevision

broadcasting. See 47 U.S.C. § 326 (1994). Accepting the Commission's interpretation of the ABC

conditionthat it does not impose an ongoing obligation on Citadel but only requires that the

company"initiate" ABCprogramming onChannel24the competitors conceded thatsuch a fleeting

condition does not violate section 326. Claiming that the Commission had never previously imposed

a programming requirement like the ABC condition on a television station, the competitors

nevertheless argue that the Commission's failure to explain its departure from precedent in imposing

the condition was arbitrary and capricious. Because the FCC did not have a fair opportunity to

address this argument, however, we do not reach it.

Section 405 oftheCommunications Act "codif[ies] the exhaustion of administrative remedies

doctrine," which requires those challenging the Commission's actions " "to give the FCC a fair

opportunity to pass on a legal or factual argument.' " American Tel. & Tel. Co. v. FCC, 974 F.2d

1351, 1354 (D.C. Cir. 1992) (quoting City of Brookings Mun. Tel. Co. v. FCC, 822 F.2d 1153, 1163

(D.C. Cir. 1987)). As the Commission concedes, Busse did suggest to the agency that the ABC

condition was an unwarranted departure fromprecedent. In its petition for a stay in November 1994,

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 5 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Busse observed that

[t]he Commission has yet to address the relevant threshold issue in the instant

proceeding; that is, whether it can condition a community of license switch ... on a

specific program format.... The [ABC] condition is far beyond anything the staff has

ever done in the context of a rule making.

JA at 303-04. A few months later, in February 1995, Busse repeated this complaint. When the Mass

Media Bureau proposed allotting Channel 24 to Albion, Busse stated in its comments to the Bureau

that "the Commission does not regulate program formats or changes thereof. Nearly 20 years ago,

the Commission determined that such changes were best left to the marketplace." JA at 333.

AlthoughBusse thusraised the departure-from-precedent issue, theCommission nevertheless

argues that it did not have a "fair" opportunity to address this argument because Busse failed to

comply with regulations requiring that petitions for reconsideration and petitions for review state

"with particularity" the reasons why the Commission should overturn staff decisions. See 47 C.F.R.

§ 1.106(d) (1995) (petition for reconsideration); § 1.115(b) (petition for review). We are

unpersuaded. Although "exhaustion principles normally require compliance with the agency's

procedural rules," see Northwestern Indiana Tel. Co. v. FCC, 872 F.2d 465, 470-71 (D.C. Cir.

1989), cert. denied, 493 U.S. 1035 (1990), and although Busse admittedly did not present its

argument in either a petition for reconsideration or review, the cited regulations do not explicitly

address, let alone preclude partiesfrom, raising issuesin petitionsfor stay, where Busse indisputably

presented the argument at issue here. Indeed, in determining whether parties have adequately raised

issues before the FCC, we have previously considered arguments made in connection with petitions

for stay. See Northwestern Indiana Tel. Co. v. FCC, 824 F.2d 1205, 1210 n.8 (D.C. Cir. 1987).

In the end, however, we agree with the Commission that, because Busse seemed to abandon

its argument against the ABC condition by taking inconsistent positions, the agency did not have a

fair opportunity to address this argument. Although the November 1994 petition for stay and the

comments before the Mass MediaBureau challenged the validityofthe ABC condition, Busse's other

filings appeared to argue in favor of the condition. Specifically, in the summer of 1993, Busse

petitioned the agency to reconsider the Bureau's initial order imposing the ABC condition, arguing

that "the Commission ... must require that Citadelreplicate as nearly as possible the deleted Albion-8

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 6 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

service." JA at 83. Busse doubted that

[e]itherCitadel[ ]or any other applicant for [the new Albion station] can be successful

in obtaining an ABC network affiliation such as existsfor the present Albion-8.... For

this reason, the Commission must consider the loss of ABC network service on [the

new Albion station] that would result from the grant of Citadel's petition and the

accompanying application for a construction permit.

JA at 129 (emphasis added). Again, in April 1995, after the Bureau allotted Channel 24 to Albion

without explicitly reiterating the ABC condition, Busse petitioned for review, complaining that the

Bureau

would permit Citadel to amend its... application for a construction permit onChannel

18 at Albion ... to specify Channel 24 ... [and] imposes no requirement of ABC

affiliation for Citadel on the new channel. The [Bureau] could not have meant to drop

the ABC affiliation requirement that it imposed on Channel 18 when it granted the

allocation....

JA at 360. Thus, at the time of the Commission's decision, whether Busse opposed the ABC

condition was not at all clear. While the petition for stay questioned the validity of the ABC

condition, the other two petitions before the Commissionthe petition for reconsideration and the

petition for reviewwere supportive. Indeed, the most recent of the three petitions, the petition for

review submitted in April 1995, implicitly encouraged the Commission to enforce the ABC condition

on Channel 24. In these circumstances, where Busse did not present its conflicting positions as

alternative arguments but appeared to abandon its opposition to the ABC condition, we agree with

the FCC that it did not have a "fair" opportunity to addressthe argument that the ABC condition was

an invalid departure from precedent. Cf. City of Brookings Mun. Tel. Co., 822 F.2d at 1164

(declining to create an exception to requirement that petitioners exhaust their administrative remedies

when "petitioners themselves [were] at least partly responsible for the agency's failure to address"

petitioners' objection).

III.

The competitors also claim that the Commission improperly waived its "duopoly rule," by

allowing Citadel to own both Channel 24 in Albion and Channel 9 in Sioux City. Adopted in 1970

to "foster[ ] maximum [economic] competition in broadcasting" and "to promot[e] diversification of

programming sources and viewpoints," Amendment of Sections 73.35, 73.240 & 73.636 of the

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 7 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Comm'n Rules Relating to Multiple Ownership of Standard, FM & Television Broadcast Stations,

22 F.C.C.2d 306, 307 (1970), recon. granted in part, 28 F.C.C.2d 662 (1971), the duopoly rule

generally prohibits a single entity from owning two television stations if their Grade B contours

overlap. See 47 C.F.R. § 73.3555 (1995). Grade B contours mark the estimated outer boundaries

ofsatisfactory reception from a television station, assuming average terrain and no interference from

other stations. 47 C.F.R. § 73.684 (1994); WLOS TV, Inc. v. FCC, 932 F.2d 993, 996 (D.C. Cir.

1991). The Commission has created an exception to this rule where one station is a satellite of the

other. See 47 C.F.R. § 73.3555 n.5; WLOS TV, Inc., 932 F.2d at 995. And even when two stations

are not in a satellite relationship with each other, the agency may waive the duopoly rule if applying

it would be " "inappropriate.' " Office of Communication of United Church of Christ v. FCC, 911

F.2d 803, 812 (D.C. Cir. 1990) (quoting Amendment of Sections 73.35, 73.240 & 73.636 of the

Comm'n Rules Multiple Ownership of Standard, FM & Television Broadcast Stations, 45 F.C.C.

1476, 1479 n.12 (1964)); see also 47 U.S.C. § 73.3566 (1995) (permitting waiver). Because the

Grade B contours of channels 24 and 9 overlap, and because the stations do not have a satellite

relationship with each other, the duopoly rule would normally prevent Citadel from owning both

stations. Concluding that a waiver would serve the public interest, however, the Commission waived

the rule. See Citadel Communications Co., 10 F.C.C.R. at 11,918-22.

Before turning to the merits ofthe competitors' challenges, wemust addresstheCommission's

argument that the competitors lack prudential standing to challenge its waiver of the duopoly rule.

According to the Commission, parties challenging its orders pursuant to section 402 of the

Communications Act must assert an injury within the "zone of interests" protected by an underlying

statute or regulation. The duopoly rule, the Commission argues, is designed to ensure that viewers

in the overlap area have access to a diversity of viewpoints and that stations serving the overlap area

are protected from undue concentrations of economic power. Because neither Pappas nor Busse is

a viewer or servesthe overlap area, the Commission arguesthat their economic interests as potential

competitors of Citadel fall outside the zone of interests protected by the duopoly rule.

Although we are obliged to address jurisdictional questions prior to reaching the merits, we

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 8 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

have recognized a narrow exception: " "[W]hen the merits of a case are clearly against the party

seeking to invoke the court's jurisdiction, the jurisdictional question is especially difficult and

far-reaching, and the inadequacies in the ... briefing make the case a poor vehicle for deciding the

jurisdictional question, we may rule on the merits without reaching' the jurisdictional contention."

Cross-Sound Ferry Servs., Inc. v. ICC, 934 F.2d 327, 333 (D.C. Cir. 1991) (quoting Adams v.

Vance, 570 F.2d 950, 954 n.7 (D.C. Cir. 1978). Whether this test applies to prudential standing

issues is not entirely clear, compare Cross-Sound Ferry, 934 F.2d at 333 (setting forth conditions in

which court may not reach jurisdictional issues, without distinguishing between constitutional and

prudential questions) with National Maritime Union v. Commander, Military Sealift Command, 824

F.2d 1228, 1238 (D.C. Cir. 1987) (deciding not to reach prudential standing question, without

engaging in the three-part analysis), but we need not resolve that issue because this case clearlymeets

all three criteria.

To begin with, the jurisdictional issue is "especially difficult and far-reaching." Resolving it

would require usto decide whether competing broadcasters challenging an FCC order under section

402 of the Communications Act must not only invoke a public interest, but also allege a harm that

falls within the "zone of interests" protected by the underlying statute or regulation they accuse the

agency of violating. This would in turn require us to reconcile, if possible, several competing

precedents. On the one hand, both the Supreme Court and we have arguably treated section 402(b)

as authorizing competing broadcasters to challenge FCC orders as " "private attorneys general,' "

Association of Data Processing Serv. Orgs. v. Camp, 397 U.S. 150, 153 n.1 (1970) (discussing FCC

v. Sanders Bros. Radio Station, 309 U.S. 470 (1940) (interpreting section 402 of the

Communications Act)); Spann v. Colonial Village, Inc., 899 F.2d 24, 30-31 (D.C. Cir.) (citing

Sanders in a discussion of statutes creating private attorneys general), cert. denied, 498 U.S. 980

(1990), with authority "to raise ... any relevant question of law" regarding a Commission's order,

Sanders, 309 U.S. at 477, and to "assert the public interest even when their own interests do not

precisely coincide," Spann, 899 F.2d at 31. Indeed, when the Supreme Court coined the zone of

interests test for parties suing under the APA, it implicitly distinguished the APA from section 402.

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 9 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

See Association of Data Processing Serv. Orgs., 397 U.S. at 153 n.1, 154 (distinguishing Sanders).

On the other hand, it is clear that challengers relying on statutes other than the APA may need to

satisfy something akin to the zone of interests requirement. See Clarke v. Securities Indus. Ass'n,

479 U.S. 388, 400 n.16 (1987). And, although not explicitly invoking the zone of interests test, this

court has dismissed on prudential standing grounds a challenge brought by viewers under section

402(b) of the Act. See Coalition for the Preservation of Hispanic Broadcasting v. FCC, 931 F.2d

73, 79-80 (D.C. Cir.) (en banc), cert. denied, 502 U.S. 907 (1991).

Aside from the difficulty of reconciling these two lines of cases, the parties have also not

extensively briefed the zone of interestsissue. The Commission raised its zone of interests challenge

to the competitors' duopoly rule argument in a footnote. In response, the competitors argued only

that parties bringing challenges under section 402(b) do not need to satisfy the zone of interests test.

They did not address whether the Commission accurately described the interests protected by the

duopoly rule and thus whether they could satisfy a zone of interests requirement if it does apply.

Compared to the jurisdictional issue, the merits are easy. Indeed, the competitors' challenges

to the agency's waiver of the duopoly rule are plainly without merit. The competitors first claim that

the Commission should have handled Citadel's request through rulemaking rather than adjudication.

They concede, as they must, that "the choice between rulemaking and adjudication lies in the first

instance with the [agency]'s discretion," NLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974).

They nevertheless argue that the agency abused its discretion because two Commissioners have

advocated dealing with the duopoly issue through rulemaking, see, e.g., Citadel Communications

Co., 10 F.C.C.R. at 11,925 (Barrett, concurring); NewCityCommunications, Inc., 10 F.C.C.R. 4985,

4992 (1995) (Quello, concurring), and because the Commission has proposed, but not yet approved,

a new regulation governing television duopolies, see Review of the Commission's Regulations

Governing Television Broadcasting, 7 F.C.C.R. 4111 (1992) (notice of proposed rulemaking);

Review of the Commission's Regulations Governing Television Broadcasting, 10 F.C.C.R. 3524

(1995) (further notice of proposed rulemaking). To us, these efforts suggest not an abuse of

discretion, but only an honest disagreement over the proper way to handle the duopoly issue. Given

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 10 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

the fact-intensive nature ofthe Commission'srole in these proceedings, it issurelywithin the agency's

authority to proceed on a case-by-case basisrather than by rulemaking. Cf. Bell Aerospace Co., 416

U.S. at 294 (noting that "adjudication [was] especially appropriate" where there were a large number

of potential cases and the facts "var[ied] widely" from situation to situation).

Elaborating on their abuse of discretion argument, the competitors contend that the

Commission has so consistently waived the duopoly rule through adjudication that it has effectively

repealed its rule, and that, because the agency can only repeal a regulation through the APA's

rulemaking process, this amounts to an abuse of discretion. As evidence that the Commission has

repealed the duopoly rule, the competitors claim that the Commission has always waived the rule

where, as here, an applicant sought to own two television stations not in a satellite relationship with

each other.

Even assuming that repeatedly waiving a rule through adjudication effectively repeals it and

that doing so can amount to an abuse of discretionpropositions for which the competitors cite no

precedentwe think the agency has not even come close to repealing the duopoly rule. Waiving the

rule in a certain class of cases does not mean that the rule is dead; it may simply reflect the strength

of the applications before the agency. Indeed, the duopoly rule is very much alive. The Commission

has refused to grant exceptions to its television duopoly rule when applicants sought to own two

television stations in a satellite relationship with each other. See, e.g, Meredith Corp., 5 F.C.C.R.

7015 (1990). It has also denied waivers of the FM radio duopoly rule, which is similar to the

television rule. See, e.g., Patteson Brothers, Inc., 8 F.C.C.R. 7595 (1993). Moreover, we find

nothing pro forma in the agency's consideration of Citadel's request to waive the duopoly rule here.

The Commission carefully considered Citadel's request, weighing several factors to determine if

waiving the duopoly rule would be in the public interest. See Citadel Communications Co., 10

F.C.C.R. at 11,920-22. By any stretch of the imagination, the FCC has thus not repealed the duopoly

rule for television.

As an alternative to their abuse of discretion argument, the competitors claim that the

Commission arbitrarily abandoned its own precedent in granting the duopoly waiver here. Settled

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 11 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

Commission precedent establishes that, in considering a request to waive the duopoly rule, the

agency's overriding goal is to determine whether a waiver is in the public interest, including whether

it is consistent with the duopoly rule's goals of promoting economic competition and diversification

of viewpoints. See Citadel Communications Co., 10 F.C.C.R. at 11,918. In situations where more

than a de minimis overlap would exist between two non-satellite stations, the Commission

traditionally considers the extent of the overlap (including the size of the population and land within

the overlap area), the independence of the two stations' operations, "the number of media voices in

the overlap area," the effect of the duopoly on competing stations, and the effect on television service

in under-served areas. H & C Communications, Inc., 9 F.C.C.R. 144, 145-46 (1993). The

competitors do not suggest that the Commission failed to consider any of these factors. Rather, they

contend that the agency violated precedent in three rather narrow respects.

They first claim the Commission never previously approved a waiver where such a large

percentage of the population served by one station would also be served by another station owned

by the same company. The result in this case, however, is not dramatically out of line with prior

cases. Here, 32,000 people (representing 33% of the population within Channel 24's estimated

viewing area and 5% of the population in Channel 9's estimated viewing area) live within the overlap

area potentially receiving signals from both stations. As the Commission noted, it previously

approved a duopolywaiver with a nearly comparable population overlap, in which 24% ofthe people

in one viewing area and 12% of the people in another area would receive signals from both stations.

Citadel Communications Co., 10 F.C.C.R. at 11,919 (citing Capital Cities Communications, 59

R.R.2d 451, 461 (1985)). The Commission's reasoning is also completely consistent with earlier

cases. As in the past, the Commission here did not regard the percentage of population overlap as

dispositive, instead considering it as one factor in determining if the waiver is in the public interest.

Although acknowledging that Citadel's proposal involved a relatively large population overlap, id.

at 11,920, the Commission determined this factor was outweighed by its findingsundisputed

herethat Citadel would be "unlikely" to exercise a dominant influence on public opinion in the

overlap area and that Citadel's common ownership would "not result in an undue concentration of

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 12 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

economic power," id. at 11,921.

The competitors'second complaint isthat in considering that most ofthe people in the overlap

area lived in Norfolk, Nebraska, the Commission inexplicably departed from precedent. According

to the competitors, the Commission had never before considered whether the population in the

overlap area was concentrated in a single community. Because the Commission's findingthat "the

existence of a population center within the overlap area, in the typical duopoly case, argues against

... a duopoly waiver," id. at 11,920 (emphasis added)weighs in the competitors' favor, we do not

understand why they even raise it. In any event, the competitors point to no precedent foreclosing

the Commission from considering this factor, and it seems perfectly reasonable for the Commission

to consider whether a single company will own two television stations serving a major population

center in the region.

Finally, the competitors note that the Commission considered that Norfolk was at the edge

of the Sioux City station's Grade B contour, and thus Norfolk residents might receive a quality signal

only from Albion, not from Sioux City. According to the competitors, the Commission had

previously considered only whether Grade B contours overlapped, not the quality of a signal within

the overlap area. Again, the competitors point to no precedent prohibiting the Commission from

considering signal strength. More important, we think the Commission adequately justified its

consideration ofthe signal's quality. It explained that this case involved a "unique situation," in which

the agency wanted to ensure that people in the Albion viewing area (including Norfolk) could

continue to receive network programming. Id. at 11,920-21. The Commission was therefore

concerned not just with the estimated range of the television signals reflected in the Grade B

contours, but also with viewers' actual ability to receive network programming.

We thusfind nothing arbitrary about the Commission's decision to permit Citadelto own both

Channel 24 in Albion and Channel 9 in Sioux City. Its decision to grant the waiver departed little,

if at all, from precedent. To the extent it may have departed, the Commission offered an entirely

reasonable and adequate explanation. Agencies may modify and even reverse precedent through

adjudication, see, e.g., Columbia Broadcasting Sys., Inc. v. FCC, 454 F.2d 1018, 1026 (D.C. Cir.

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 13 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

1971), so long as they provide an "adequate explanation" for doing so, Petroleum Communications

Corp. v. FCC, 22 F.3d 1164, 1172 (D.C. Cir. 1994).

IV.

The competitors' last challengethat the Commission did not adequately explain its failure

to follow an earlier decision in the Anniston case, Amendment of Section 73.202(b), Table of

Allotments, FM Broadcast Stations (Eatonton and Sandy Springs, Georgia, and Anniston and

Lineville, Alabama), 6 F.C.C.R. 6580 (MMB 1991) (application for review pending)is equally

unpersuasive. In Anniston, the applicant proposed moving an FM radio station from the community

of Anniston, Alabama to the rapidly growing Atlanta suburb of Sandy Springs, Georgia. Id. at 6580.

The Mass Media Bureau denied the application, considering, among other factors, the loss of radio

service in the Anniston area. Id. at 6586.

Even assuming the Commission had an obligation to treat the staff 's decision in Anniston as

precedent, we believe that the Commission did a completely adequate job of distinguishing the two

cases. The Commission pointed out that the Anniston decision involved moving a radio station, not

a television station. Citadel Communications Co., 10 F.C.C.R. at 11,923 n.16. It explained that,

even if relevant, the Anniston case involved a far larger disruption of existing service: Moving the

radio station in that case would have deprived over 400,000 people of a radio station, while the FCC

projected that moving KCAN from Albion (and replacing it with Channel 24) would deprive

approximately 50,000 people of one television channel, although 48,000 of them would continue to

receive service on at least four other channels. See Amendment of Section 73.606(b), Table of

Allotments, TV Broadcast Stations (Albion, Lincoln, and Columbus, Nebraska), 10 F.C.C.R. at

11,937-38 &n. 11; CitadelCommunicationsCo., 10 F.C.C.R. at 11,923 n.16. The Commission also

explained that, because Sandy Springs was already served by a "plethora" of stations while Lincoln

had just one local commercialtelevision station and one localnoncommercialstation, providing a new

radio station to Sandy Springs offered a smaller marginal benefit to the community than providing

a new television station to Lincoln. Amendment of Section 73.606(b), Table of Allotments, TV

Broadcast Stations (Albion, Lincoln, and Columbus, Nebraska), 10 F.C.C.R. at 11,937 & n.11.

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 14 of 15
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

We dismiss Busse's and Pappas' appeals and deny their petitions for review.

So ordered.

USCA Case #95-1365 Document #210795 Filed: 07/12/1996 Page 15 of 15