Opinion ID: 480961
Heading Depth: 3
Heading Rank: 1

Heading: Assurance of Format Diversity

Text: 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