Case Name: KGMO RADIO-TELEVISION, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Jerome B. Zimmer and Lionel D. Speidel, d/b as Missouri-Illinois Broadcasting Co. (KZIM), Intervenor
Court: United States Court of Appeals for the District of Columbia Circuit
Jurisdiction: United States
Decision Date: 1964-05-22
Citations: 336 F.2d 920
Docket Number: No. 18064
Parties: KGMO RADIO-TELEVISION, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Jerome B. Zimmer and Lionel D. Speidel, d/b as Missouri-Illinois Broadcasting Co. (KZIM), Intervenor.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 336
Pages: 920–925

Head Matter:
KGMO RADIO-TELEVISION, INC., Appellant, v. FEDERAL COMMUNICATIONS COMMISSION, Appellee, Jerome B. Zimmer and Lionel D. Speidel, d/b as Missouri-Illinois Broadcasting Co. (KZIM), Intervenor.
No. 18064.
United States Court of Appeals District of Columbia Circuit.
Argued Feb. 25, 1964.
Decided May 22, 1964.
Mr. Thomas P. Brown, III, Washington,'D. C., with whom Messrs. Charles. S. Rhyne and Alfred J. Tighe, Jr., Washington, D. C., were on the brief, for appellant.
Mr. Ernest O. Eisenberg, Counsel, Federal Communications Commission, with, whom Messrs. Max D. Paglin, General. Counsel at the time the brief was filed,, and Daniel R. Ohlbaum, Associate General Counsel, Federal Communications;. Commission, were on the brief, for ap-pellee. Mr. Henry Geller, General Counsel, and Mrs. Ruth V. Reel and Mr. Joel., H. Levy, Counsel, Federal Communications Commission, also entered appearances for appellee.
Mr. Benedict P. Cottone, Washington,.. D. C., for intervenor.
Before Edgerton, Senior Circuit Judge,., and Fahy and Danaher, Circuit Judges..

Opinion:
EDGERTON, Senior Circuit Judge:
Appellant KGMO Radio-Television, Inc., licensee of a standard broadcast-station in Cape Girardeau, Missouri, appeals from the Federal Communications Commission's denial without a hearing-of its petition for reconsideration of the-Commission's action in granting, also-without a hearing, to intervenor Zimmer-et al., a construction permit for a competing station. The Commission is au "thorized to make, and has made, gen•eral rules governing petitions for re.hearing and special rules for post-grant petitions, but did not base its denial of -appellant's petition on post-grant stand.ards. Instead, it specifically applied its pre-grant standard and denied the petition on the theory that "the facts alleged are too generally stated and are not sufficiently related to the -conclusions drawn by the petitioner to show prima facie that a grant of the application would be inconsistent with the public interest, convenience, .and necessity, or to raise any substantial or material questions of fact concerning the effect" of the new station entering -the market. 1 Pike & Fischer Radio REG.2d 1, 2, 3.
Both the Commission and the appellant rely largely on Carroll Broadcasting Co. v. Federal Communications Commission, 103 U.S.App.D.C. 346, 349, 258 F.2d 440, 443 (1958). There we held that in considering an existing licensee's protest against the grant of another license, "the Commission had the power to determine whether the economic effect of -a second license in this area would be -to damage or destroy service to an extent inconsistent with the public in-terest." We held that "when an existing licensee offers to prove that the -economic effect of another station would ibe detrimental to the public interest, the Commission should afford an opportunity for presentation of such proof We had no occasion to, and did not, undertake to say how detailed the protesting licensee's offer of proof must be in order to entitle him to a hearing.
In its petition to the Commission for reconsideration in the present ease, appellant KGMO alleged
(1) That the area served suffers from substantial unemployment; quoting official figures, county by county, and concluding that the area "cannot provide support for a new advertising medium".
(2) That there are already ample "competitive media", namely six radio stations, one television station, three daily newspapers and ten weekly newspapers.
(3) That during KGMO's fiscal year ending August 31, 1962, its net loss from operations was $8,200.08. "Under new ownership the station is being slowly brought back to more favorable financial operating posture. For example, for the six months period ended February 28, 1963, the station showed a net profit from operations of $2,445.08, although for the month of February 1963 there was an operating loss of $293.00."
(4) That the applicant, now the in-tervenor, "estimated that the revenues of the [new] station for its first year of operation would be $46,000.00 . Assuming only 15% of such revenues came out of revenues now being earned by KGMO — this would result in operating losses to KGMO unless annual operating expenses were reduced. This would require that petitioner curtail or discontinue the services it has been providing at no cost to public service organizations" some of which are named, and also "discontinue various regularly scheduled programs
The petition also said: "Petitioner offers to prove that operation of the new station would have an adverse economic effect on petitioner's station such as to cause losses of valuable services to the public and would produce the result that neither licensee would be able to provide the services needed by the public in the area."
In denying appellant's petition for reconsideration, the Commission did not attempt an "all inclusive" statement but gave illustrations of "the type of information" it thought "necessary to support a Carroll issue", including the amount and trend of retail sales in the area, advertising revenue earned and advertising revenue available, whether some businesses could but do not advertise on radio, the cost of petitioner's public service programming, and the savings that might be made by dropping or moving it.
We think it is within the Commission's authority to require more information than appellant gave. But since appellant had no notice, in the Commission's past decisions or otherwise, that more would be required, the petition should not be denied on the ground that more was not furnished. We therefore remand the case to the Commission. Unless it decides the case on other grounds, it should permit appellant to amend and amplify the petition. The Commission may in its discretion consider and act upon any of its Rules.
Remanded for further proceedings.
. We are asked to review the Commission's action under § 402(b) (5) and (6) of the Communications Act of 1934, as amended, 47 U.S.C. § 402(b) (5) and (6), and under § 10 of the Administrative-. Procedure Act, 5 U.S.C. § 1009.
. The Communications Act of 1934 as amended provides in § 405 that after an order has been made by the Commission in any proceeding, "any party thereto, or any other person aggrieved or whose Interests are adversely affected thereby, may petition for rehearing and it shall be lawful for the Commission in its discretion to grant such a rehearing if sufficient reason therefor be made to appear. Rehearings shall be governed by such general rules as the Commission may establish," subject to certain exceptions.
. Rules and Regulations of the Federal Communications Commission, § 1.84(b) and 1.84(c), 47 CFR 1.84(b) and 1.84(e) (renumbered on November 18, 1963, as § 1.06(b) and 1.06(e); see 28 Fed.Reg, 12422).
. The Commission bad done so in Springfield Television Broadcasting Corp. v. Federal Communications Commission, 117 U.S.App.D.C. 214, 328 F.2d 186 (1964). There the Commission found and this court agreed that the petitioners had failed to comply with Rule § 1.84(c) regarding post-grant petitions. An "administrative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained." Securities and Exchange Commission v. Chenery Corp., 318 U.S. 80, 95, 63 S.Ct. 454, 87 L.Ed. 626 (1943).
Cf. Valley Telecasting Co. v. Federal Communications Commission, 118 U.S.App.D.C.-, 336 F.2d 914.
. In a brief dissenting statement, Chairman Henry said he "would have first elicited whatever factual data the petitioner might have in support of its allegations of public injury, and, after considering its response, act upon, the subject petition for reconsideration."