Case Name: GREYLOCK BROADCASTING COMPANY, Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, Hudson Valley Broadcasting Company, Inc., Intervenor
Court: United States Court of Appeals for the District of Columbia Circuit
Jurisdiction: United States
Decision Date: 1956-02-14
Citations: 231 F.2d 748
Docket Number: No. 12989
Parties: GREYLOCK BROADCASTING COMPANY, Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, Hudson Valley Broadcasting Company, Inc., Intervenor.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 231
Pages: 748–753

Head Matter:
GREYLOCK BROADCASTING COMPANY, Petitioner, v. UNITED STATES of America and Federal Communications Commission, Respondents, Hudson Valley Broadcasting Company, Inc., Intervenor.
No. 12989.
United States Court of Appeals District of Columbia Circuit.
Decided Feb. 14, 1956.
Danaher, Circuit Judge, dissented.
Messrs. James A. McKenna, Jr. and Vernon L. Wilkinson, Washington, D. C., for petitioner.
Messrs. Warren E. Baker, General Counsel, Richard A. Solomon, Assistant General Counsel, and Daniel R. Ohlbaum, Attorney, Federal Communications Commission, for respondent, Federal Communications Commission.
Mr. Daniel M. Friedman, Attorney, Department of Justice, for respondent United States.
Messrs. D. M. Patrick and Stanley S. Harris, Washington, D. C., for Hudson Valley Broadcasting Company, Inc., Intervenor.
Before PRETTYMAN, BAZELON and DANAHER, Circuit Judges.

Opinion:
PRETTYMAN, Circuit Judge.
On December 9, 1955, this court stayed that part of an order of the Federal Communications Commission which would have allocated television Channel 10 to Vail Mills, New York. The intervening broadcaster (Hudson Valley Broadcasting Company, Inc.) now moves that we reconsider and vacate the stay. Its ground for so moving is that the action of the court was under Section 9(b) of the Judicial Review Act, 64 Stat. 1131 (1950), 5 U.S.C.A. § 1039(b); that that section requires as a premise for a stay a specific finding that irreparable damage would otherwise result to the petitioner (i. e., Greylock Broadcasting Company) ; that this court made no such finding; and that no such finding is possible upon the evidence of record.
The controversy revolves about the UHF-VHF television problem presently before the Commission. UHF broadcasters have experienced grave difficulties of an economic sort due to the wide ownership by the public of VHF receiving sets and the costs of either converting or of adding UHF receivers. Thus, where both types of transmission are in use in an area, the network services and the consequent greater proportion of the remunerative commercial contracts have been going to the VHF stations. The situation has developed to such a point that the Commission instituted a rule-making proceeding, nationwide in scope, to consider, among other alternatives, the desirability of the "deintermixture" of the two services. The broad meaning of the deintermixture proposal is the desirability of so redistributing allocations as to eliminate or lessen the competition between the two types of service in specified areas. That proceeding is now pending before the Commission, and the stay here involved does not impede or interfere with its progress in any manner whatsoever.
The area involved here is the Albany-Schenectady-Troy area in New York. Presently, under the Sixth Report of the Commission, seven UHF and one VHF commercial television channels are allocated to the area. Our intervenor, Hudson Valley, is now the owner of a UHF license. It calculated that under the Commission's engineering regulations as to spaces, distances, etc., another VHF allocation (Channel 10) could be made to the area if the station were located at Vail Mills, a small community about twenty miles northwest of Schenectady. It made a proposal to that effect to the Commission. At about the same time proposals and counter-proposals for the deintermixture of the area were made.
The Commission, by a four-to-three vote, granted the allocation of Channel 10 to Vail Mills but put the deintermixture problem of the area into the nationwide rule-making proceeding. Greylock and the Van Curler Broadcasting Corporation, both UHF operators in the area, protested and then appealed. We stayed the allocation of Channel 10 pending disposition of Greylock's petition for review.
The Sixth Report and Order of the Commission, adopted April 11, 1952, was the final report in proceedings instituted in 1948. It established a nationwide table of assignments for television frequencies and made separate "final assignments" of channels to the various communities in the country. The allocation of Channel 10 (VHF) to this area is not in the Sixth Report or in any allocation heretofore made. It is a new allocation, a "drop-in", permissible under engineering limitations but not heretofore allowed. Greylock avers, with proffer of proof, that if this second VHF station goes into operation in the area, under the auspices and with the contracts presently available for such a station, it (Greylock) will be forced off the air. Its averment is borne out by the common experience of others. As we understand it, no one disputes the dire effects upon UHF operations of competing VHF services in the present state of the art.
The mere allocation of the channel to the area is not, of course, the award of a license; it is indeed a long way from that conclusion. But it is a first step. The new allocation poses in practical and realistic form a threat to the continuance of the UHF stations. If the channel remains thus allocated a license on it will surely be awarded to somebody sometime. It is quite clear that, if the new allocation of a VHF station is made temporarily, all of Greylock's plans, programs and commitments, both for revenue and for expenditure, must be upon a conditional basis; its future is undetermined. Immediately the new allocation is made and the new station becomes a close possibility, Greylock's operation takes on a conditional character. Obviously operation upon such a basis causes losses in comparison to operation absent such pending contingencies; and that such losses cannot be recouped is also obvious. It is clear from the material offered by Greylock that if a license is open for award upon the new channel it (Greylock) will either have to acquire that license (by award or by purchase) or be driven off the air. Of course the mere pendency of the proposed allocation poses some part of the threat to Greylock, but the accomplishment of the allocation, making the presence of the available channel an accomplished fact, greatly magnifies those incipient losses.
It is noteworthy that on the same day it granted the Vail Mills "drop-in" the Commission denied all other requests for changes in the present table of assignments pending the rule-making deintermixture determination.
Hudson Valley and the Commission say that Greylock's choice in the presence of the allocation is merely a matter of business judgment. But this sort of gun-to-the-head choice is not what is customarily known as the exercise of business judgment.
A question presented by Greylock's petition for review is whether it (Grey-lock) was entitled to a hearing before finalization of the allocation of Channel 10 to this area; that is, whether under presently known facts an operating UHF station is entitled to a hearing before the allocation of a new VHF channel. As presented the question involves due process considerations. The question posed is a substantial one. We intimate no view whatever upon the matter. Our present concern is merely that the question is substantial. The making of the allocation now, while the question whether it is ultimately to remain is under formal consideration by the Commission, serves no useful purpose, so far as we can ascertain from the material before us. The Commission says it will now allocate the channel to the area and hereafter decide whether to leave it there. Greylock urges, and we agree, that every interest of fair distribution will be served by postponing the allocation until the Commission decides, in the proceeding already under way, whether there is to be such an allocation to this area.
No public interest is served by an immediate allocation. Under present allocations the area is predominantly — seven to one — UHF. Only one VHF station is operating, and some of the national networks in their competition with one another must use one of the two' UHF stations now in operation. The public has bought and is buying its receiving sets in the light of those facts. If the Commission finally decides to leave the area as it is now, the public will buy, or retain, its sets in light of that fact. If the Commission decides to allocate permanently another VHF channel, it seems to be agreed that the UHF stations will fold. The public will thereafter be governed by that circumstance. If a VHF allocation is made temporarily, pending consideration of its permanency, complete public uncertainty is created; both owners and buyers of sets would be thrown into a whirlpool of sales pressures, possibly to no permanent purpose. We see no public benefit in such a completely uncertain temporary arrangement.
Our dissenting brother says the public interest criterion should control in this matter. But the public interest in the UHF-VHF problem is the precise question which is to be answered by the Commission in the deintermixture proceeding. If UHF stations are not in the public interest they could not be authorized at all. If this court were to declare now that a new VHF station, which would eliminate UHF stations presently in an area, is in the public interest, that declaration would conclude the whole controversy now being so exhaustively explored by the Commission. We cannot do that on the evidence before us; indeed it is not our function to declare initially what is in the ultimate public interest. Our function goes to the preservation of an existing situation pendente lite where irreparable damage would ensue from an immediate and possibly temporary change.
Our dissenting brother also says the public wants VHF reception. But we do not know that to be so. The wide use of VHF sets may be due to the fact that VHF was available earlier, gave good service, and saturated the market before UHF came. The present wide ownership of VHF sets is not necessarily an indication that UHF is not better physical service and will not be preferred by the public when, as and if programs over it are comparable with VHF programs and VHF sets wear out. Progress and change are frequently in the public in terest. The Commission, as we understand it, has that problem, among others, before it in the pending rule-making (deintermixture) proceeding.
We find specifically that the present allocation of Channel 10 to the Vail Mills area pending the outcome of the deintermixture proceeding would impose upon Greylock losses which it could not recover, and that this threat of loss is not offset by any vantage to the public interest.
The motion to reconsider and vacate our stay order will be denied.