Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-97-01030/USCOURTS-caDC-97-01030-0/pdf.json

Parties Involved:
AK Media Group, Inc.
Intervenor
Federal Communications Commission
Appellee
Pikes Peak Broadcasting Company
Intervenor
Sangre De Cristo Communications, Inc.
Appellant
United States of America
Appellee

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 February 17, 1998 Decided April 

17, 1998

No. 97-1030

Sangre de Cristo Communications, Inc.,

Appellant

v.

Federal Communications Commission and

United States of America,

Appellees

Pikes Peak Broadcasting Company and

AK Media Group, Inc.,

Intervenors

USCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 1 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

No. 97-1032

University of Southern Colorado,

Appellant

v.

Federal Communications Commission and

United States of America,

Appellees

Appeals of an Order of the

Federal Communications Commission

Scott D. Dailard argued the cause for the appellants.

Malcolm G. Stevenson, Kevin F. Reed and Timothy J.

O'Rourke were on the joint briefs. Lawrence M. Miller

entered an appearance.

K. Michele Walters, Counsel, Federal Communications

Commission, argued the cause for the appellees. Christopher

J. Wright, General Counsel, Daniel M. Armstrong, Associate

General Counsel, and C. Grey Pash, Jr., Counsel, Federal

Communications Commission were on brief. Robert B. Nicholson, Attorney, United States Department of Justice, entered an appearance.

Richard Hildreth, Andrew S. Kersting, James L. Winston

and Walter E. Diercks were on brief for joint intervenors AK

Media Group, Inc. and Pikes Peak Broadcasting Company.

Before: Williams, Henderson and Garland, Circuit

Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge: Appellants

University of Southern Colorado (USC) and Sangre de Cristo

Communications, Inc. (Sangre de Cristo) seek to reverse a

USCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 2 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

ruling of the Federal Communications Commission (FCC or

Commission) denying their channel exchange proposal. See

Amendment of Section 73.606(b), Table of Allotments, TV

Broadcast Stations (Pueblo, Colorado), 11 F.C.C.R. 19,649

(1996); Amendment of Section 73.606(B), Table of Allotments, TV Broadcast Stations (Pueblo, Colorado), 10

F.C.C.R. 7662 (MMB 1995). Because the FCC's rationale for

its ruling is unclear, we vacate the ruling and remand for

further proceedings.

I.

USC is the licensee of noncommercial educational television

station KTSC(TV), Channel *8,1 Pueblo, Colorado, which provides free public television service to television viewers in

southern and western Colorado. USC's transmission facilities are located north of Pueblo at Baculite Mesa. Some

Colorado Springs viewers could not receive transmissions

from KTSC(TV) because of intervening terrain barriers so

USC used a television translator 2 on an apparently unused

channel (Channel 53) in order to reach those viewers. In

August 1990, however, USC was required to stop using

Channel 53 when a full power station began operating on that

channel.

As a result, USC sought an FCC construction permit to

allow it to relocate its tower facility to Cheyenne Mountain--a

location which would enable the station to reach a greater

portion of the Colorado Springs-Pueblo television market.

Operation at the site, however, required a waiver of the

FCC's minimum distance separation requirement for television broadcast stations, see 47 C.F.R. s 73.610, because the

Cheyenne Mountain site is "short-spaced" both to station

__________

1 The FCC designates a channel reserved for noncommercial use

by placing an asterisk (*) immediately preceding the channel number. See 47 C.F.R. s 73.606.

2 A television translator retransmits the signals of a television

broadcast station to the viewing public. See 47 C.F.R. s 74.701(a).

Translator stations can be displaced by a regular, full-power station.

See 47 C.F.R. s 74.702(b).

USCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 3 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

KJCT(TV) in Grand Junction, Colorado (by 5.5 miles) and to

a vacant channel allocation in Laramie, Wyoming (by 8.1

miles).3

In February 1991 the FCC's Mass Media Bureau (MMB or

Bureau) granted a waiver to USC, explaining:

The Commission is mindful of the unique role played by

many noncommercial television stations in providing public television service to wide areas. You have established

that the University serves both the Pueblo and Colorado

Springs areas and that it is therefore important that your

television station do so as well. You have unsuccessfully

attempted to find another translator to serve Colorado

Springs, and it would not be possible at this time to seek

a new television channel, since there is currently a freeze

on the filing of new applications in that part of the

country. Further, it does not appear that you could

modify the facilities of your current site sufficiently to

provide a viewable signal in Colorado Springs. Consequently, your only alternative is to seek a new site, and

we believe you have demonstrated the unsuitability of

any other sites from which you could serve both communities. We further note that, while there would be some

loss areas to the south and east of Pueblo, these areas

are largely unpopulated. Additionally, we agree that the

mountainous terrain and your offer to reduce effective

radiated power to the north and west would greatly

reduce the possibility that objectionable interference to

the Grand Junction station or to a future station in

Laramie would occur. Finally, we note that [nearby

commercial] Station KJCT(TV) in Grand Junction has

not opposed your proposal. Therefore, we believe that

waiver of Section 73.610 is warranted.

Letter from Barbara A. Kreisman, Chief, Video Services

Division, Mass Media Bureau, Federal Communications Com-

__________

3 The Commission's mileage separation system for station transmitters operating on the same or adjacent channels is "the sole

protection against inter-station interference." WITN-TV v. FCC,

849 F.2d 1521, 1525 (D.C. Cir. 1988).

USCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 4 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

mission, to Thomas Aube, University of Southern Colorado 2

(Feb. 28, 1991) (Kreisman Letter).

In September 1992 USC (which had yet to begin construction on Cheyenne Mountain) and appellant Sangre de Cristo,

the licensee of commercial television station KOAA-TV,

Channel 5,4 sought to exchange channels pursuant to 47

C.F.R. s 1.420(h).5 Under their proposal, the petitioners

would exchange channels and USC would transfer its Cheyenne Mountain construction permit to Sangre de Cristo. In

return, Sangre de Cristo would provide financial support to

USC, donate a translator station to USC and transfer the

existing licensed facilities of station KOAA-TV to USC.

In July 1993 the MMB released a Notice of Proposed Rule

Making regarding the proposed channel exchange. Amendment of Section 73.606(B), Table of Allotments, TV Broadcast

Stations (Pueblo, Colorado), 8 F.C.C.R. 4752 (MMB 1993)

(Notice of Proposed Rulemaking or NPRM). While noting

that the proposal met several of the baseline requirements for

a channel exchange under section 1.420(h),6 the MMB insisted

__________

4 KOAA-TV, Channel 5, is licensed to Pueblo, Colorado and is a

primary affiliate of the National Broadcast Corporation. The petitioners claim that "[a]lthough licensed to Pueblo, KOAA-TV historically has served Colorado Springs in addition to its community of

license." Appellants' Br. at 7.

5 Section 1.420(h) provides in part:

Where licensees (or permittees) of television broadcast stations

jointly petition to ... exchange channels, and where one of the

licensees (or permittees) operates on a commercial channel

while the other operates on a reserved noncommercial educational channel within the same band, and the stations serve

substantially the same market, then the Commission may ...

modify the licenses (or permits) of the petitioners to specify

operation on the appropriate channels upon a finding that such

action will promote the public interest, convenience, and necessity.

6 For example, both stations are within the same band and serve

the same community of license, USC pledged to use the proceeds

from the exchange solely to improve the service of its noncommerUSCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 5 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

that the stations swap their existing sites only. Id. at 4754.

The MMB's modification meant that neither station could

relocate to the Cheyenne Mountain site. The MMB further

noted that "although USC was granted a waiver for Station

KTSC(TV) on Channel *8 based in part on the need to

continue providing public television service to Colorado

Springs without relying on a translator to accomplish its goal,

we do not believe it appropriate to determine at the rule

making stage whether a similar request from a commercial

licensee would be granted at the application stage." Id. at

4753 n.5. The appellants jointly objected to any alteration of

their agreement, arguing that they satisfied the requirements

for a channel exchange and that Sangre de Cristo's use of the

Cheyenne Mountain site was crucial to their proposal. See

Joint Comments of the University of Southern Colorado and

Sangre de Cristo Communications, Inc., at 3; JA 44; Joint

Reply Comments of the University of Southern Colorado and

Sangre de Cristo Communications, Inc., at 4-5; JA 106-07.

In 1995 the MMB rejected the appellants' proposal to

exchange channels. Amendment of Section 73.606(B), Table

of Allotments, TV Broadcast Stations (Pueblo, Colorado), 10

F.C.C.R. 7662 (MMB 1995) (Report & Order). The Report &

Order stated:

Petitioners are correct in stating that the intraband

channel exchange procedures of Section 1.420(h) of the

Commission's Rules are available to permittees. However, we do not agree with petitioners' assertion that,

merely because a permittee of an unbuilt station could be

a party to a channel exchange, it therefore follows that a

construction permit for the modification of licensed facilities "must" be transferred in connection with a channel

exchange proposal.... Moreover, petitioners make far

too much of the fact that the Commission recognized

when it adopted Section 1.420(h) that intraband channel

__________

cial station and the new or improved commercial and noncommercial broadcast service provides a public benefit. See NPRM, 8

F.C.C.R. at 4753 (applying the standards set forth in Intraband

Television Channel Exchanges, 59 RR 2d 1455 (1986)).

USCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 6 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

exchanges could result in benefits for both noncommercial and commercial stations. This recognition does not

mean, as petitioners suggest, that the Commission intended in adopting its channel exchange procedures to

ensure a benefit for commercial stations. Indeed, the

Commission clearly stated when it adopted Section

1.420(h) that its primary purpose in doing so was to

enable noncommercial educational stations to improve

their service. In upholding the channel exchange policy,

the U.S. Court of Appeals for the District of Columbia

Circuit also explained that the Commission adopted the

policy "as a rescue effort for educational broadcasting in

the wake of decreases in federal funding" and repeatedly

referred in its opinion to the FCC's goal of promoting

educational television ... We assume that commercial

stations will request channel exchanges with noncommercial stations when it is in their interest to do so, but

Commission policy in no way requires that the commercial party to a channel exchange receive any particular

benefit in order for the exchange to be in the public

interest.

Id. at 7666 (internal citations omitted). Noting that "the

grant of a minimum spacing waiver in connection with petitioners' request ... would be inconsistent with well established Commission policy," the MMB reasoned that, " '[a]bsent a demonstration of compelling need for departure from

established interstation separation standards, the Commission

will not grant a waiver of the minimum spacing rules for

allotment purposes.' " Id. at 7667 (quoting London, Kentucky, 7 F.C.C.R. 5936, 5937 (MMB 1992)). The Bureau

concluded that the "petitioners have not made a showing of

compelling need to support their request for a short-spaced

allotment" and "the public interest benefits that would be

derived from the short-spaced allotment they seek are not

large enough to outweigh the public interest benefit of the

integrity of the TV Table of Allotments and the minimum

spacing rules." Id.

The appellants then sought Commission review and in

November 1996 the FCC upheld the MMB's denial of the

USCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 7 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

proposed channel exchange. Amendment of Section

73.606(b), Table of Allotments, TV Broadcast Stations (Pueblo, Colorado), 11 F.C.C.R. 19,649 (1996) (Memorandum Opinion & Order or MO&O). The FCC noted that the appellants

suffered from a "basic misunderstanding of our channel exchange policy and our short-spacing rules," explaining that

"while petitioners are correct that the channel exchange rule

applies to construction permits as well as licenses, neither the

rule nor the cases they cite require approval of the instant

proposal which would result in a short-spaced commercial

allotment." Id. at 19,651 (emphasis added). The appellants

argued, inter alia, that because the FCC had already determined that the technical difficulties in constructing a facility

on Cheyenne Mountain were not so great as to deny a shortspacing waiver to USC, the FCC should therefore either

transfer the pre-existing waiver to Sangre de Cristo or approve Sangre de Cristo for a waiver based upon the identical

technical considerations. The FCC rejected the appellants'

arguments, noting that "the waiver granted to USC was also

based upon the clear and substantial benefits to noncommercial, educational service which the relocation [to Cheyenne

Mountain] would permit." Id. at 19,652. The Commission

stated that, "[b]ecause the educational station would no longer enjoy the benefits of the short spaced Cheyenne Mountain

site under the subject channel exchange proposal, the [FCC]

staff was required to determine anew, for a commercial

station, whether a short spacing requirement would be appropriate." Id. Because the appellants had made "no showing

of compelling need or extraordinary circumstances ... sufficient to outweigh the public interest benefit of observing the

integrity of the TV Table of Allotments and the minimum

spacing rules," the FCC concluded:

We agree with the staff's determination that the overall

public interest is better served by denial of the waiver

request and preservation of the integrity of the spacing

requirements in this case. In weighing the public interest in this case, we also note that as many as 20,000

people or more would lose their only primary (i.e., fullservice, protected) commercial off-air service if the waivUSCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 8 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

er were granted and KOAA-TV were to change its

transmitter site.

Id.7

USC and Sangre de Cristo now ask this Court to reverse

the Commission's Memorandum Opinion & Order.

II.

We review FCC decisions "under the arbitrary and capricious review standard" and "do not 'substitute [our] judgment

for that of the agency' but rather look to see 'whether the

decision was based on a consideration of the relevant factors

and whether there has been a clear error of judgment.' "

Freeman Eng'g Assocs., Inc. v. FCC, 103 F.3d 169, 178 (D.C.

Cir. 1997) (quoting Motor Vehicles Mfrs. Ass'n of the United

States, Inc. v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29,

43 (1983)).

Here, however, it is unclear what the FCC believed to be

the "relevant factors" in its ruling. It is undisputed that,

before the 1991 waiver of the minimum spacing requirement

granted to USC, the Commission did not take the commercial

or non-commercial status of short-spacing waiver applicants

into account. See, e.g., Appellee Br. at 21 ("This case presented the Commission with an issue of first impression.").

But the waiver letter to USC signed by Barbara Kreisman,

Chief of the MMB's Video Services Division, was obscure on

this point: it began by noting that the FCC was "mindful of

the unique role played by many noncommercial television

stations in providing public television service to wide areas"

and then catalogued eight other factors supporting waiver,

none of which it identified as dispositive. See Kreisman

Letter, supra, at 2 (emphasis added). In apparent contrast,

the MMB's NPRM indicated that "USC was granted a waiver

__________

7 The FCC also found "unpersuasive petitioners' argument that

consideration of the noncommercial educational status of Station

KTSC(TV) in granting the waiver violates the First Amendment."

MO&O, 11 F.C.C.R. at 19,653.

USCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 9 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

... based upon its stated need to continue providing noncommercial educational television service to Colorado Springs

without relying on a translator to provide a viewable signal to

that community." 8 F.C.C.R. at 4753 (emphases added).

Even though the appellants' proposed channel swap would in

fact enable USC to improve its service to the Colorado

Springs community in conformity with 47 C.F.R. s 1.420(h),

the FCC nevertheless concluded that "the public benefits that

would be derived from the short-spaced allotment [the petitioners seek] are not large enough to outweigh the public

interest benefit of the integrity of the TV Table of Allotments

and the minimum spacing rules." Report & Order, 10

F.C.C.R. at 7667; see also MO&O, 11 F.C.C.R. at 19,652

("We agree with the staff's determination that the overall

public interest is better served by denial of the waiver

request and preservation of the integrity of the spacing

requirements in this case.").

We conclude that the FCC did not adequately explain why

the "public interest benefit of the integrity of the TV Table of

Allotments and the minimum spacing rules" would be outweighed by USC's short-spaced broadcasts but not by Sangre

de Cristo's. The FCC may well decide to factor the commercial status vel non of an applicant into its short-spacing

waiver decisions, as it appears to have done, or it may develop

an alternative rule.8 Whatever the Commission decides, it

must better explain the basis for its action (particularly in

light of its past practice which did not consider the commercial/noncommercial status of an applicant) than it has done.9

__________

8 In this regard, we note that the FCC enjoys "a broad measure

of discretion in dealing with the many and complicated problems of

allocation and distribution of service." Television Corp. of Mich. v.

FCC, 294 F.2d 730, 733 (D.C. Cir. 1961).

9 To the extent the Commission used a commercial/noncommercial distinction, it appears to be inconsistent with its earlier decision

in Applications of Open Media Corp., 8 F.C.C.R. 4070 (1993), which

described its "policy of refusing to base waivers of rules designed to

prevent interference upon non-technical considerations such as ownership or programming." Id. at 4071. The Commission did not

even mention Open Media in its opinion below.

USCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 10 of 11
<<The pagination in this PDF may not match the actual pagination in the printed slip opinion>>

See, e.g., Committee for Community Access v. FCC, 737 F.2d

74, 77 (D.C. Cir. 1984) (Commission "cannot silently depart

from previous policies or ignore precedent"). And if the FCC

does elect to consider the commercial/noncommercial status

of an applicant, it must ground its modification in a manner

consistent with the First Amendment.

III.

While we cannot say that "the agency's reasons for declining the waiver were 'so insubstantial as to render that denial

an abuse of discretion,' " Thomas Radio Co. v. FCC, 716 F.2d

921, 924 (D.C. Cir. 1983) (citation omitted), at the same time

we cannot discern with precision on what basis the FCC made

its ruling. Indeed, the FCC conceded during oral argument

that it had not definitively addressed the importance of the

commercial/noncommercial status of a short-spacing waiver

applicant. Accordingly, and for the reasons set forth above,

we remand to the FCC for further proceedings consistent

with this opinion.

So ordered.

USCA Case #97-1030 Document #346049 Filed: 04/17/1998 Page 11 of 11