Opinion ID: 688683
Heading Depth: 2
Heading Rank: 2

Heading: Ripeness of Waiver Request and Completeness of the Evidence Before the FCC

Text: 24 Appellants assert that Fox's request for a waiver was unripe because Murdoch had no binding commitment to buy the Post when Fox filed with the FCC. Because there was no formal deal, they claim that the FCC had an incomplete basis upon which to reach an informed decision. Cf. United States v. Storer Broadcasting Co., 351 U.S. 192, 205, 76 S.Ct. 763, 771-72, 100 L.Ed. 1081 (1956) (waiver hearing provided for parties presenting completed applications and adequate reasons for waiver). Fox's waiver request was incomplete, appellants maintain, because it did not give the FCC the full particulars needed, such as a copy of the 1988 agreement to sell the Post to Kalikow. Cf. Washington Star Communications, Inc., 54 F.C.C.2d 669 (1975). The FCC's failure to hold an evidentiary hearing, appellants argue, meant that the Commission did not have before it the proper evidence, which would have shown that allowing Murdoch to purchase the Post would not help diversity because, inter alia, the demise of the Post would benefit minority-owned papers. 25 Appellants' arguments fail on several grounds. First, regarding ripeness, unlike the case or controversy requirement for a federal court, under 5 U.S.C. Sec. 554(e) (1988), an agency may issue a declaratory order to terminate a controversy or remove uncertainty. See Chavez v. Director, Office of Workers Compensation Programs, 961 F.2d 1409, 1414 (9th Cir.1992) (ripeness doctrine derives from Article III limitations on federal judicial power that are inapplicable to administrative agencies). Moreover, Fox's waiver request was not hypothetical and Murdoch had a substantial financial liability based upon his contributions under the interim management agreement, which the FCC determined amounted to $4.224 million in the first six weeks alone. 26 In the Washington Star case relied on by appellants, the FCC stated that while the inability to sell a newspaper could be the basis for a waiver, a waiver was not justified in that case because the full particulars on efforts to sell the paper had not been supplied. 54 F.C.C.2d at 675. The FCC concluded that Washington Star was distinguishable because, in this case, the Commission had before it sufficient facts to grant a waiver under the fourth basis for a waiver, that is, where the purposes of the rule would be disserved by divestiture. Fox Television, 8 F.C.C.R. at 5354 n. 56. 27 While the asking price for the Post was not clearly set forth in Fox's waiver request, for several reasons that omission is not dispositive of the adequacy of the waiver request in this case. First, the FCC evaluated the waiver request not under the inability-to-sell criterion used in Washington Star, but under the criterion that considers whether the purposes of the rule would be disserved by divestiture. The Commission chronicled in detail the extensive efforts to sell the paper and concluded that the purposes of the cross-ownership rule would be disserved by precluding the strongest bidder from participating in the bankruptcy court's sale of the Post since there were few, if any, others who would take on the troubled newspaper. 28 Second, the Post, unlike the Washington Star, was in bankruptcy and, as described by the bankruptcy court, was suffering continual and substantial losses such that during the proceedings its value as a going concern was rapidly diminishing. See In re The New York Post Co., Inc., slip op. at 4. Thus, considering the Post's dire financial situation, the prospect of finding a bidder willing to take on the large liabilities of running the newspaper was the real concern, rather than the newspaper's sale price. Third, in Washington Star, the owner of the paper both controlled the sale process and prosecuted the waiver application before the FCC, seeking a waiver on the basis of inability to sell the newspaper. The Commission was concerned that the owner had not demonstrated that he had made a reasonable, good-faith effort to sell and could not find a willing and able buyer, which was fundamental to granting a waiver premised on an inability to sell, and it ordered an evidentiary hearing on this issue. By contrast, in the instant case, the bankruptcy court, not Kalikow or Fox, supervised the New York Post Co.'s attempts to sell the newspaper, and this proceeding had safeguards to ensure against manipulation of the sales process. The FCC deferred to the bankruptcy court's role in determining whether bids for the Post were fair and limited its inquiry to whether, if Murdoch was the successful bidder, a permanent waiver would be in the public interest. Accordingly, Washington Star is distinguishable and the FCC did not err by failing to order a hearing on the specifics of Murdoch's bid for the Post. 29 Additionally, in rejecting appellants' argument that the failure of the Post would serve diversity, the FCC stated that the cross-ownership rule was never intended to cause the demise of an existing newspaper but to promote diversification of the mass media as a whole. Given the broad authority of the FCC to determine where the public interest lies in the regulation of broadcasting to foster diversity, see FCC v. National Citizens Comm. for Broadcasting, 436 U.S. 775, 794-95, 98 S.Ct. 2096, 2111-12, 56 L.Ed.2d 697 (1978), its decision to preserve an existing source of information seems reasonable and must therefore be upheld by this court.