Opinion ID: 402058
Heading Depth: 1
Heading Rank: 2

Heading: the hearing requirement under section 316 of the

Text: COMMUNICATIONS ACT
17 Section 316 of the Communications Act provides that any station license ... may be modified by the Commission ... if in the judgment of the Commission such action will promote the public interest, convenience, and necessity. See note 5 supra. However, no such ... modification shall become final until the holder of the license ... shall have been notified in writing of the proposed action and the grounds and reasons therefor, and shall have been given reasonable opportunity ... to show cause by public hearing, if requested, why such order of modification should not issue. Id. (emphasis added). In this case, appellant has sought a hearing under section 316 on the claim that the Commission's grant of the KSRF application will result in increased interference to KOCM causing an indirect modification of the appellant's license. 18 As justifications for the denial of the requested hearing, the Commission offers a two-fold response: First, in the argument before this court, the Commission urged, for the first time, that no hearing was required because the regulations upon which the modification would be based (47 C.F.R. § 73.213 (1980)) became effective prior to KOCM's current three-year term of license. In other words, the Commission now contends that, even assuming that there will be increased interference attributable to a change in the KSRF antenna site, the action of the Commission cannot, as a matter of law, be viewed as a modification under section 316. Second, in its Memorandum Opinion and Order denying appellant's request for reconsideration, the Commission ruled that appellant has failed to raise a substantial and material question of fact which would require a hearing. J.A. at 136. Thus, according to the Commission, even if appellant's claim refers to a legally cognizable modification under section 316, the claim nevertheless may be dismissed pursuant to a summary disposition without a hearing. We reject both of these contentions for the reasons set forth below. 19
20 In its brief to this court, appellee acknowledges that 21 (t)he Communications Act explicitly permits the Commission to modify any station license, but only after notification to the licensee and an opportunity for the licensee to show cause in a public hearing why the modification should not be ordered. 47 U.S.C. 316. It has long been established that this provision covers indirect as well as direct modifications of licenses.... Indirect modifications include factual circumstances where it is alleged that a new grant may create objectionable electrical interference to an existing licensee and the existing licensee is protected by Commission policy or regulation from such interference. 22 Appellee's brief at 9-10 (citations omitted). We accept this as an accurate statement of the controlling legal principles in this case. Indeed, it is for precisely the reasons outlined by appellee that we hold that the Commission erred in denying appellant a hearing under section 316. 23 Despite the acknowledgement that a hearing is required under section 316 where it is alleged that a new grant may create objectionable electrical interference to an existing licensee, the Commission argues that appellant has no legally protectable interest because the grant of KSRF's application was based on its consistency with Section 73.213 of the Rules and the Fourth Report and Order (see notes 6 and 7 supra), adopted long before KOCM's current license term. Appellee's brief at 10. In short, appellee contends that (t)he basis for KOCM's argument that it was entitled to a hearing-increased objectionable interference within its 1.0 mV/m contour-was rejected by the Commission as a material consideration in the Fourth Report and Order. Id. at 10-11. Thus, according to the Commission, appellant's claim cannot be viewed as a modification under section 316 because, following the conclusion of the rulemaking proceeding in Docket 14185 in 1964, see note 7 supra, FM licensees were no longer entitled to protection based on their 1.0 mV/m signal contours. They were thereafter protected from interference only to the extent provided by the minimum mileage separations and related rules. Id. at 11. 24 As has already been suggested above, see note 7 supra, the Commission's arguments on this point must fail. As noted by appellant: 25 The Commission premises this argument on the Fourth Report and Order in Docket No. 14185, promulgating Section 73.213 of the Commission's rules (47 C.F.R. 73.213). However, the provision in that order upon which the Commission relies related only to claims of interference occurring as a result of the change in the rules at that time, not to additional interference, and thus, hearings on subsequent modifications which might result from future changes in another station's license are not precluded by that Order. KOCM is not arguing that interference caused by KSRF's existing antenna causes such a modification of its license as to require the holding of a hearing pursuant to Section 316. Rather, KOCM is asserting its rights with respect to the additional interference which would result from the change in KSRF's antenna site. 26 Appellant's reply brief at 3-4 (footnote omitted). See also discussion at note 7 supra. 27 The appellee's position that appellant's claim cannot be viewed as a modification under section 316 is wrong as a matter of law and patently inconsistent with the Commission's own decision here under review. In ruling against appellant, the Commission made it plain that the fact that KSRF's application complied with the standards set forth in 47 C.F.R. § 73.213 was not dispositive of this case. Furthermore, the Commission never suggested, either in its initial decision or in the decision following the request for reconsideration, that appellant's claim fell outside of the scope of section 316. Rather, the opinion of the Commission first noted that the interference issue (must) be examined on a case-by-case basis ... in situations of short-spaced stations under Section 73.213, and then found that appellant had no legally protectable interest in this case because KSRF's proposal will involve no additional area of interference within KOCM's 1 mV/m contour. 79 F.C.C.2d at 951. These rulings by the FCC surely do not support the contention advanced by appellee on this appeal, i.e., that appellant's claim does not, as a matter of law, raise an issue that is cognizable under section 316. 28 On the record before us, we hold that appellant's claim, alleging that the grant of the KSRF application may create objectionable interference, raises a legally cognizable issue under section 316. 29
30 The second reason given by the Commission to justify the denial of the requested hearing under section 316 was that appellant had failed to raise a substantial and material question of fact which would require a hearing. J.A. at 136. We reject this justification for two reasons: (1) it is premised on an erroneous legal standard and (2) it finds no substantial support in the record in this case. 31 In ruling that no hearing was required because appellant failed in its written pleadings to raise a substantial and material question of fact, the Commission has employed a legal test that is not authorized by section 316. What the Commission has done is to limit appellant's rights under section 316 by resort to a standard imported from section 309(d)(2) of the Communications Act, 47 U.S.C. § 309(d)(2) (1976). This latter section states, in part, that, with respect to a petition to deny any application, 32 (i)f the Commission finds on the basis of the application, the pleadings filed, or other matters which it may officially notice that there are no substantial and material questions of fact and that a grant of the application would be consistent with subsection (a) of this section, it shall make the grant, deny the petition, and issue a concise statement of the reasons for denying the petition, which statement shall dispose of all substantial issues raised by the petition. 33 No such provision appears in section 316. See note 5 supra. Thus, while the Commission may properly dispose of a petition to deny without a hearing under section 309, no comparable authority exists with respect to claims raising legally cognizable issues under section 316. 34 It is undisputed that many claims arising under section 316 also may be covered by section 309. However, the former section is more narrow in scope, limited to cases involving only modifications of station licenses or construction permits. In this limited category of cases, Congress has made it plain that affected licensees shall, upon request, have an opportunity to show cause by public hearing why an order of modification should not issue. To follow the test enunciated by the Commission in this case, allowing for summary disposition whenever it appears that there are no substantial and material questions of fact, would be to nullify the clear mandate of section 316. This we will not do. 35 Furthermore, on the facts of this case, we do not understand how the Commission could conclude that there were no substantial questions of fact to be resolved. In support of its petition, appellant submitted engineering statements prepared by the firm of Hatfield and Dawson. See J.A. at 19, 88. Intervenor then offered engineering reports prepared by Jules Cohen & Associates to dispute appellant's claim of additional interference attributable to the proposed new antenna site. See J.A. at 48, 105. The Commission, relying on the methodology set forth in 47 C.F.R. § 73.313 (1980), stated that it agree(d) with KSRF's predictions. 79 F.C.C.2d at 951. The Commission also added that it was unable to determine the reasons for KOCM's (engineering) miscalculations. Id. 10 36 There are at least two obvious flaws in the Commission's analysis. First, the Commission's reliance on the calculation methodology specified in 47 C.F.R. § 73.313, to the exclusion of appellant's engineering studies, was misplaced. By its terms, section 73.313 indicates that the calculation methodology set forth therein is to be used for predictions of coverage ... without regard to interference and only for the same purposes as relate to the use of field strength contours as specified in § 73.311. 11 Appellant's engineering reports explained that although the section 73.313 methodology is relatively easy to apply, it makes no allowances for differences in propagation resulting from variations in terrain, and it fails to take into account unique conditions such as the line of sight (free space) conditions in the present case. Based on their own method of calculation, appellant's engineers concluded that additional interference would in fact occur if KSRF were permitted to move its transmitter. 37 Second, in relying solely on the methodology set forth in section 73.313, the Commission not surprisingly concluded that it was unable to determine the reasons for KOCM's (alleged engineering) miscalculations. 79 F.C.C.2d at 951 (emphasis added). The Commission obviously understood that KOCM (was claiming) that a new method of predicting potential interference must be utilized in this case; the Commission nevertheless concluded that no hearing was required because appellant had failed to adequately document this different method. J.A. at 136. It is difficult to comprehend the Commission's reasoning. One of the purposes of the hearing requirement under section 316 would be to permit a party to explain and verify engineering calculations with respect to claims of alleged modifications. It is no answer for the Commission, in the face of highly disputed factual questions, to summarily dismiss a claim that otherwise raises a legally cognizable issue under section 316 merely because the Commission remains puzzled by the claim. See note 10 supra. 38 If anything, this case highlights rather well the reasons why a hearing should have been held: the contesting parties have relied on factual assertions that are flatly contradictory; there are difficult and confusing technical issues to be resolved; there is a serious dispute over the proper methodology to be used in measuring interference; and the Commission has openly admitted to being confused with respect to appellant's claim. The confusion expressed by the Commission in this case very likely would have been cured if a hearing had been held as required under section 316 and appropriate findings had been made on the issues in dispute. 39
40 The requirement of a public hearing under section 316, see note 5 supra, is the result of an amendment, made on July 16, 1952, to what was formerly section 312(b) of the Communications Act. The amended statute is recorded at Pub.L.No.554-879, 66 Stat. 711, 718 (codified as amended at 47 U.S.C. § 316 (1976)). Former section 312(b), as does the present section 316, authorized the FCC to modify a station license; however, section 312(b) provided that 41 No such order or modification shall become final until the holder of such outstanding license or permit shall have been notified in writing of the proposed action and the grounds or reasons therefore and shall have been given reasonable opportunity to show cause why such an order or modification should not issue. 42 Communications Act of 1934, Pub.L.No.416 § 312(b), 48 Stat. 1064, 1087 (1934) (amended 1952) (emphasis added). Thus, in enacting section 316, Congress made explicit the right of a license holder to show cause by public hearing why an order of modification should not issue. Communications Act Amendments, 1952, H.R.Rep.No.1750, 82d Cong., 2d Sess. 14 (1952). 43 Over the past four decades, the courts have had occasion in a series of cases to construe the statutory show cause requirement with respect to license modifications, first under the former section 312(b) and then under the present section 316. An examination of this case law will help to amplify the nature of the hearing requirement under section 316. 44 The first case of note concerned a claim of an indirect modification, i.e., an extension of the broadcast facilities of one station resulting in objectionable interference to another existing station within its lawfully protected contour. In FCC v. National Broadcasting Company (KOA), 319 U.S. 239, 63 S.Ct. 1035, 87 L.Ed. 1374 (1943), the Supreme Court ruled that such an indirect modification raised a legally cognizable claim under former section 312(b): 45 To alter the rules so as to deprive KOA of what had been assigned to it, and to grant an application which would create interference on the channel given it, was in fact and substance to modify KOA's license. This being so, § 312(b) requires that it be made a party to the proceeding. We can accord no other meaning to the proviso which requires that the holder of the license which is to be modified ... must be given reasonable opportunity to show cause why an order of modification should not issue.... A licensee cannot show cause unless it is offered an opportunity to participate in (a) hearing.... 46 Id. at 245-46, 63 S.Ct. at 1037-38. 47 The Court in KOA left undecided the issue of whether the FCC was required under former section 312(b) to afford a hearing to a party to determine whether in fact an indirect modification would result from a grant of increased or changed facilities to another station. This question was squarely posed and decided in L.B. Wilson, Inc. v. FCC, 170 F.2d 793 (D.C.Cir.1948). There the court ruled that former section 312(b) 48 must be held to contemplate hearings before the Commission on the issue (of) modification vel non of an outstanding license by the granting of facilities to another station. 49 170 F.2d at 803. Thus, even before the passage of the current section 316, providing for a public hearing, this court held in L.B. Wilson that an outstanding licensee must be accorded a hearing on the issue of whether or not the extension of facilities to another station will indirectly modify the outstanding license through objectionable interference. 50 The decision in L.B. Wilson also discussed the possibility of a summary disposition, without a hearing, of a claim of objectionable interference under former section 312(b). The petition for reconsideration in L.B. Wilson raised the issue of objectionable interference. In response, an argument was advanced that, whether or not there was interference, appellant's claim did not cite any objectionable interference within the meaning of the term as prescribed by the Commission's Rules and Standards of Good Engineering Practice. 170 F.2d at 804. The Commission thus contended that it could treat appellant's claim as if upon demurrer and rule on the pleadings as a matter of law. The court in L.B. Wilson found this contention not supportable, and noted that it was out of the ordinary for the Commission, in defense of its denial of hearing to the appellant, to seek refuge in such a common law 'formality' as a demurrer. Id. The court added that: 51 (W)e do not rule that the Commission may not, at the threshold of consideration of an issue (of) modification vel non of an outstanding license by the proposed operations of another station, treat the petition asserting such modification as if upon demurrer and thereby avoid the necessity of hearing proof of the truth of the allegations of objectionable interference if as a matter of law they do not show such interference within the Commission's rules and standards. 52 On the issue presented, however, the court concluded that 53 included within the question of law raised by (appellant's petition for reconsideration) is one of fact, to wit, as to the nature of the measurements or data in the Commission's files, and one of mixed fact and law as to the bearing of this data upon the meaning of the term objectionable interference as used in the Commission's rules and standards. 54 Id. A hearing was thus found to be requisite in order to dispose of appellant's claim of interference. 55 In FCC v. WJR, The Goodwill Station, Inc., 337 U.S. 265, 69 S.Ct. 1097, 93 L.Ed. 1353 (1949), station WJR objected to the grant of a license to a new station on the ground that the new station would cause objectionable interference with the WJR broadcast signal. The applicant station challenged the legal sufficiency of WJR's petition, claiming that WJR had not set forth facts which, if accepted as true, would constitute interference with WJR's normally protected contour. The Commission agreed with the applicant station and denied the WJR petition without oral argument. In upholding the Commission's action, the Court first ruled that the Due Process Clause of the Fifth Amendment did not require that the Commission afford WJR an opportunity for oral argument on its claim of interference. More significantly, however, the Court held that Congress had committed to the Commission's discretion, by the terms of § 312(b) and § 4(j) of the Communications Act, the questions whether and under what circumstances it will allow or require oral argument, except where the Act itself expressly requires it. 337 U.S. at 281, 69 S.Ct. at 1106. Further, the Court ruled that the requirement in former section 312(b) of a reasonable opportunity to show cause was not to be construed as always including an opportunity for oral argument. Id. at 282, 69 S.Ct. at 1106. 56 Thus, for a time, the decision in WJR raised serious questions about whether and under what circumstances a hearing would be required with respect to claims of interference in cases of indirect modification. In 1952, however, after Congress amended section 312(b) and enacted the present section 316, requiring an opportunity ... to show cause by public hearing, many of the questions raised by WJR were put to rest. 57 In 1954, following the passage of section 316 in its present form, this court, in Harbenito Broadcasting Co. v. FCC, 218 F.2d 28 (D.C.Cir.1954), reaffirmed the decision in L.B. Wilson, supra, as good law. Id. at 31. The court held, in particular, that if a petition for reconsideration of a construction permit states facts which raise a substantial question as to objectionable interference with an existing license, the petitioner is entitled to a hearing. Id. The court added, however, that the Commission may 58 as a first step, test the validity of the petition as if upon demurrer and, after oral argument, rule upon its sufficiency as a matter of law assuming its allegations to be correct. 59 Id. (emphasis added). 60 In Hecksher v. FCC, 253 F.2d 872 (D.C.Cir.1958), the court adhered to the holding of Harbenito, that the Commission may, as an initial step, subject a petitioner's claims to a test as a matter of law upon oral argument. Id. at 874. The court in Hecksher added that, (i)f it then appears that there are disputes as to material facts, an evidentiary hearing limited to those facts should be ordered. Id. 61 Probably the most significant of the decisions concerning the nature of the hearing requirement under section 316 is National Broadcasting Co. v. FCC, 362 F.2d 946 (D.C.Cir.1966). In National Broadcasting, the court recognized the cardinal importance of the right to be heard where one's interests are acutely affected by the actions of an administrative agency. Id. at 953. In adhering to the principles enunciated in KOA and L.B. Wilson, the court held that 62 the licensee of a station with a specified frequency and power has a right to participate in an evidentiary hearing under Section 316 where another broadcaster seeks a grant to operate on the same frequency (where the effect of the new grant may be to create objectionable electrical interference to the existing licensee) since this would bring about an indirect modification of the existing licensee's license. 63 Id. at 954-55 (emphasis added). Because the issue of indirect modification in National Broadcasting had been resolved in an earlier clear channel proceeding, the court found that no additional hearing was required under section 316. The court made it clear, however, that but for the prior hearing on the same issue in the clear channel proceeding, the case would have been remanded to the Commission for an evidentiary hearing on the petitioner's claim of indirect modification. 64 In considering the foregoing cases, the following principles emerge regarding the procedural rights due a licensee alleging indirect modification attributable to objectionable interference. First, an existing licensee of a station with a specified frequency has a right to participate in a hearing under section 316 where another broadcaster seeks a grant to operate on the same frequency and where it is alleged that the effect of the new or changed grant may be to create objectionable, electrical interference to the existing licensee. 65 Second, the type of hearing required depends upon the facts of an individual case and the type of question to be resolved. If, for example, the facts are stipulated and the sole issue involves a question of law (such as, whether petitioner's claim falls within any applicable legal definition of objectionable interference), the Commission may rule on the basis of written pleadings and oral argument. If, however, as in the instant case, there are questions of fact to be resolved, then an evidentiary hearing is mandated by section 316. 66 Applying these principles to the facts of the case at bar, the conclusion is inescapable that appellant had a right to an evidentiary hearing on its claim of destructive interference. As noted above, appellant's petition, alleging that the grant of the KSRF application would create objectionable interference, raises a legally cognizable claim of modification under section 316. Since we have found that appellant's claim is not barred either by the Fourth Report and Order (or any other proceeding related to Docket 14185), see notes 6 and 7 supra, or by any existing Commission rule, we hold that appellant was entitled to notice and an opportunity to show cause in an evidentiary hearing why the proposed order of modification should not issue. 67 Nothing in this opinion should be taken to suggest any conclusions concerning the accuracy of appellant's engineering reports or the legitimacy of its claims of destructive interference. We will leave these questions to be resolved by the Commission, in appropriate findings, after an evidentiary hearing on the disputed factual issues. 12 68