Opinion ID: 572398
Heading Depth: 2
Heading Rank: 2

Heading: The Exchange

Text: 29 Nor can we conclude that the FCC review and approval of the Press-BCC swap misapplied the Policy. Further inquiry into the facts behind Press's control over BCC, into the technical capabilities of Press to service the Orlando area, and into the public interest benefits of the exchange, is not necessary for us to reach our determination. Congress in § 309(e) requires the FCC to hold a hearing to inquire into the merits when a substantial and material question of fact requiring further inquiry arises. The FCC found below that no substantial or material question remained. We will not here order the FCC to conduct a hearing to inquire further into the merits of the application, as we did in Astroline, where a substantial and material question of fact remained. Astroline Communications Co. Ltd. Partnership v. FCC, 857 F.2d 1556, 1561-1562 (D.C.Cir.1988). This Court interprets substantial to necessitate an evidentiary hearing only if the totality of the evidence arouses a sufficient doubt on the point that further inquiry is called for. Citizens for Jazz on WRVR v. FCC, 775 F.2d 392, 395 (D.C.Cir.1985).
30 The totality of evidence in the record presents ample evidence that the FCC looked into the control issue at both levels below in sufficient depth to quell any reasonable doubt about Press's control of BCC. First, in the Notice of Proposed Rule Making, 4 F.C.C.R. 2215 (1989), the Commission requested comments on the possibility of Press's control of BCC. Second, in the Commission's reply to the comments, it noted that we requested BCC's assurance that any proceeds of the exchange would be devoted exclusively to activities related to the operation of the noncommercial television station. BCC provided that assurance. Report and Order, 4 F.C.C.R. at 8321. Third, allegations that Press's funding of the noncommercial station, BCC's use of the transmitter site licensed to Press, and Press's sole prosecution of the exchange petition, all raised the question of Press's control of the station. The Commission heard Press's reply that it disclosed to both the FCC and to the public all its arrangements with BCC, and that Press did at no time control the construction permit for the noncommercial station. Id. at 8322. 31 The record shows no convincing evidence that Press acquired control of BCC before [292 U.S.App.D.C. 237] or during the swap. The FCC defines control in this provision as final authority over the station's personnel, programming and finances. Southwest Texas Public Broadcasting Council, 85 F.C.C.2d 713, 715 (1981) (emphasis added). At most, the evidence in the record showing Press's financial underwriting of the BCC operation in part satisfies only one of three aspects of the control prohibited by the FCC. The record shows nothing about Press's relationship to the personnel and programming of BCC, except that Press plans to fund an internship program at BCC that would develop public policy programs for both BCC and Press. 32 Congress saw the problem of improper channel and station control vital enough to enact 47 U.S.C. § 310(d), which provides: 33 No construction permit or station license, or any rights thereunder, shall be transferred, assigned, or disposed of in any manner voluntarily or involuntarily, directly or indirectly, or by transfer of control of any corporation holding such permit or license, to any person except upon application to the Commission and upon finding by the Commission that the public interest, convenience, and necessity will be served thereby. 34 47 U.S.C. § 310(d), as amended. Accordingly, one of the FCC's requirements of channel exchanges is that the exchanging channels remain under separate control. Commercial channels may buy off the channels competing to be parties to the exchange, but they may not buy the noncommercial station with which they are exchanging channels. To ensure the continued separation of identity of the exchanging channels, the FCC properly placed a requirement on its own treatment of channel exchanges: it must scrutinize the merits of each exchange application. This scrutiny is supposed to afford ample opportunity for opponents to show that the commercial station bought the noncommercial station in good faith. 59 Rad.Reg.2d (P & F) at 1464a. 35 For its part, Rainbow fails to be specific about why the negotiations before the exchange agreement violate § 310(d). Rainbow alleges unconvincingly that a succession of option holders constitutes a violation of the Policy's prohibition of any transfer of control before FCC approval because it is not the result of good faith arms [sic] length negotiations. Petitioner's Brief at 14. Rainbow adds the arm's length language and asserts, without pointing to any statutory language or legislative history, that demonstration of good faith arms [sic] length negotiations is the keystone of the Commission's policy. Petitioner's Brief at 20. Not only does this argument lack support, it cuts against the core of Rainbow's attack against the FCC Policy. Here, Rainbow objects to the very free market, competitive activity that it claims should be encouraged by a change in the Policy. The record shows that any jockeying for position was conducted by assenting parties. In the competitive world that Rainbow favors, channels can buy options and buy off their competitors before any channel exchange takes place. Nor are educational stations required to take the first bid for an exchange that they receive. By approving this swap, the FCC demonstrates that its Policy does not preclude the highest bid from reaching an educational channel before it agrees to a swap with a commercial channel.
36 Rainbow alleges that Press's technical capabilities fall short of providing the required coverage. This is one of those highly technical questions to which this Court must show considerable deference to an agency's expertise. MCI Cellular Telephone Co. v. FCC, 738 F.2d 1322, 1333 (D.C.Cir.1984). Accordingly, we attach significant weight to the FCC's determination that Press's coverage will be adequate. The Commission's record evidences ample support for its conclusions. See supra footnote 2 and accompanying text.
37 We conclude that the FCC properly determined that the exchange of channels between Press and BCC serves the public interest. The cash that Press infused into BCC allows an educational channel to operate [292 U.S.App.D.C. 238] where it otherwise would not have. Cash infusion is stated in the Policy to be one way to promote the public interest, and the Policy does not require that exchanges promote the public interest in more than one way.