Opinion ID: 480961
Heading Depth: 2
Heading Rank: 1

Heading: The Bureau's Public Interest Finding

Text: 13 A radio station license may be assigned only upon [a] finding by the Commission that the public interest, convenience, and necessity will be served thereby. 47 U.S.C. Sec. 310(d) (1982). The statute does not define the criteria by which the FCC is to judge the public interest. While the Supreme Court has declared that the goal of the Act is 'to secure the maximum benefits of radio to all the people of the United States,'  FCC v. WNCN Listeners Guild, 450 U.S. 582, 594, 101 S.Ct. 1266, 1274, 67 L.Ed.2d 521 (1981) (citation omitted), the Court has emphasized that Congress has granted the Commission broad discretion in determining how that goal could best be achieved so long as its understanding of the public interest  'is based on consideration of permissible factors and is otherwise reasonable.'  Id. 14 Although the Commission may select the factors to be considered in finding the public interest, it must articulate with reasonable clarity its reasons for decision, Greater Boston Television Corp. v. FCC, 444 F.2d 841, 851 (D.C.Cir.1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2233, 29 L.Ed.2d 701 (1971), so that a court may ensure that the public interest finding results from reasoned decisionmaking, Committee for Community Access v. FCC, 737 F.2d 74, 77 (D.C.Cir.1984). 15 Appellant contends that the Commission has failed to meet its statutory responsibilities on two counts: first, its reliance on free-market forces to protect program diversity was impermissible in the instant case; and second, it failed to provide a legally sustainable rationale for its finding that the public interest would be served by the proposed assignment. We address these contentions in sequence.
16 The diversity of the program formats available to the listening public was long considered a key element of the public interest it was the FCC's duty to protect. See, e.g., Citizens Committee to Preserve the Voice of Arts in Atlanta v. FCC, 436 F.2d 263, 269 (D.C.Cir.1970). In a policy statement issued in 1976, Memorandum Opinion and Order, 60 F.C.C.2d 858 (1976), recon. denied, 66 F.C.C.2d 78 (1977) (Policy Statement), the Commission concluded that the public's interest in diversity would be better served through a reliance on market forces than on a case-by-case examination of proposed changes in programming by FCC staff. On the basis of its extended review of the matter, the Commission concluded that the competitive market, as a mechanism for allocating entertainment formats, will produce program diversity of a sort, and in a form, that equates both to the welfare of radio listeners and to the public interest generally. 60 F.C.C.2d at 861. The Commission therefore determined that it would thenceforth not inquire into whether proposed changes in entertainment formats were in the public interest, but would defer to market mechanisms as the best available means of producing the diversity to which the public is entitled. Id. at 863. 17 In WNCN Listeners Guild v. FCC, 610 F.2d 838 (D.C.Cir.1979), this court held that the Policy Statement violated the Commission's statutory mandate, and that the public interest standard required the FCC in some circumstances to make specific findings as to whether changes in entertainment format were in the public interest. The Supreme Court, however, reversed. FCC v. WNCN Listeners Guild, 450 U.S. 582, 101 S.Ct. 1266, 67 L.Ed.2d 521 (1981). 18 In WNCN Listeners Guild, the Court emphasized the Commission's broad discretion in selecting the criteria for determining the public interest, id. at 594, 101 S.Ct. at 1274, and held that the Commission's Policy Statement provided a rational explanation for its conclusion that the public interest in format diversity is best pursued by deferring to the market. Id. at 595. The Court cautioned that the Commission should be alert to the consequences of its policies and should stand ready to alter its rule if necessary to serve the public interest more fully, id. at 603, 101 S.Ct. at 1278 but stated that if time and changing circumstances necessitate a change in policy, then it must be assumed that the Commission will act in accordance with its statutory obligations. Id. (quoting National Broadcasting Co. v. United States, 319 U.S. 190, 225, 63 S.Ct. 997, 1013, 87 L.Ed. 1344 (1943)). The Court also noted that in deciding how the public interest shall be determined, a reviewing court is not empowered to substitute its judgment for that of the agency. Id. at 594 n. 30, 101 S.Ct. at 1274 n. 30 (citations omitted). 19 Appellant contends that the Supreme Court's approval of the FCC's Policy Statement in FCC v. WNCN Listeners Guild is inapplicable to the instant case. It argues that the refusal by the owner of WEAM to accept bids from prospective purchasers interested in maintaining the big band format created a distortion of the normal market allocation mechanism; thus the assumption upon which the Policy Statement is based--that the market will function to protect the public interest in format diversity--is here untenable. 20 Appellant's argument is based, however, on an impractical insistence on an ideal competitive market. The failure or refusal of a seller to deal with particular buyers can be characterized as a market distortion only if one insists on a perfectly functioning market. Yet market imperfections were explicitly anticipated both by the Commission in its Policy Statement, 60 F.C.C.2d at 863, p 16, and by the Supreme Court in approving that statement. 450 U.S. at 601, 101 S.Ct. at 1277. We hold that the refusal by the owner of WEAM to accept bids from appellant's members is not a sufficient distortion of the market to undermine the Commission's assumption that the public interest in format diversity is in the long run best pursued by deferring to the admittedly imperfect market. This is certainly not the sort of change in circumstances alluded to by the Supreme Court, id. at 603, 101 S.Ct. at 1278, that might necessitate a rethinking of the Policy Statement. 21 In FCC v. WNCN Listeners Guild, the Supreme Court noted that in deciding to defer to market forces, 22 the Commission has not forsaken its obligation to pursue the public interest. On the contrary, it has assessed the benefits and the harm likely to flow from Government review of entertainment programming, and on balance has concluded that its statutory duties are best fulfilled by not attempting to oversee format changes. 23 450 U.S. at 595, 101 S.Ct. 1274. In light of this endorsement of the FCC's approach to the question of diversity, and in the absence of persuasive evidence suggesting that the rationale of the Policy Statement is not applicable to the market within which the station operates, we hold that the Commission is not obliged to restate its rationale for deferring to the market each time it approves the transfer of a license. The Policy Statement itself represents a sufficient articulation of the FCC's reasoning, and we will not require a ritualistic reiteration every time the Commission approves an assignment. 24
25 A radio station license may only be assigned upon application to the Commission and upon finding by the Commission that the public interest, convenience, and necessity will be served thereby. Furthermore, such application shall be disposed of as if the proposed transferee or assignee were making application under section 308 for the permit or license in question. 47 U.S.C. Sec. 310(d) (1982). Although not defining what constitutes the public interest, convenience, and necessity, section 308 does suggest their scope by providing that applications for licenses shall set forth such facts as the Commission by regulation may prescribe as to the citizenship, character, and financial, technical, and other qualifications of the applicant to operate the station; ... the purpose for which the station is to be used; and such other information as it may require. 47 U.S.C. Sec. 308(d). 26 Over the years, the FCC has developed a form on which it solicits the information it requires in order to discharge its statutory responsibilities. Specifically, the parties who propose to assign a broadcast station license pursuant to section 310(d) must apply for FCC approval on FCC Form 314, Application for Consent to Assignment of Broadcast Station Construction Permit or License. 47 C.F.R. Sec. 73.3540 (1985). On this form, a proposed assignee must disclose its corporate structure, any alien control, adverse decisions against it in various judicial and administrative proceedings, other media interests held by it or any other party to the assignment, as well as other information the Commission considers relevant in determining whether the proposed assignment will serve the public interest, convenience, and necessity. 27 As we have pointed out, the actual criteria to be applied by the FCC in determining whether a particular assignment is in the public interest lies within its very broad discretion. While we have held that it must articulate with reasonable clarity its reasons for decision, Greater Boston Television Corp. v. FCC, 444 F.2d at 851, it is not essential that its reasoning be set forth in its final order. [I]f the necessary articulation of basis for administrative action can be discerned by reference to clearly relevant sources other than a formal statement of reasons, we will make the reference. Environmental Defense Fund v. EPA, 465 F.2d 528, 537 (D.C.Cir.1972) (footnote omitted). In the instant case, the application form itself--in conjunction with the FCC's consent to the assignment--and the Bureau's discussion of the specific issues raised in appellant's petition to deny together provide a sufficient articulation of the grounds for the Commission's decision. 28 By requiring a proposed assignee to address the relevant facets of the public interest, convenience, and necessity on FCC Form 314, the Commission has incorporated the consideration of these issues into its application process. Therefore, the FCC's approval of WEAM's application implies a finding on ample information that the public interest will be served by the assignment. 29 In the instant case, the FCC record reveals the Bureau's detailed discussion not only of the format diversity issue raised in appellant's petition to deny, letter-order at 2-3, J.A. at 105-06, but also of its charge that Viacom was disqualified to receive the license because of antitrust and discrimination charges that had been filed against it and its affiliates, letter-order at 3-4, J.A. at 106-07. 30 Given the information solicited by the FCC on FCC Form 314, and given the Bureau's detailed findings on issues specifically raised in appellant's petition to deny, we hold the Commission's May 15 Order, in which it makes specific reference to the Bureau's letter-order, to be a sufficient articulation of the FCC's finding that the assignment is in the public interest. We will not require the Commission to engage in a formalistic recitation of the specific findings implicit in its ratification of its Bureau's analysis. 31