Legal Document

436 U.S. 775 98 Supreme Court Reporter 2096 56 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 697 FEDERAL COMMUNICATIONS COMMISSION, Petitioner,v.NATIONAL CITIZENS COMMITTEE FOR BROADCASTING et al. CHANNEL TWO TELEVISION COMPANY al., Petitioners, versus NATIONAL ASSOCIATION OF BROADCASTERS, Petitioner, COMMISSION AMERICAN NEWSPAPER PUBLISHERS ASSOCIATION, ILLINOIS COMPANY, INC., POST Nos. 76-1471, 76-1521, 76-1595, 76-1604, 76-1624 and 76-1685. Argued Jan. 16, 1978. Decided June 12, Syllabus After a lengthy rulemaking proceeding, the Federal Communications Commission (FCC) adopted regulations prospectively barring initial licensing or transfer of newspaper-broadcast combinations where there is common ownership radio television broadcast station daily newspaper located in same community ("co-located" combinations). Divestiture existing co-located was not required except 16 "egregious cases," combination involves sole published either providing that entire with clear signal. Absent waiver, divestiture must be accomplished those cases by January 1, 1980. On petitions for review regulations, Appeals affirmed FCC's prospective ban but ordered adoption requiring dissolution all did qualify waivers. The court held limited requirement arbitrary capricious within meaning § 10(e) Administrative Procedure Act. Held: challenged are valid their entirety. Pp. 793-815. (a) which designed to promote diversification mass media as whole, based on public-interest goals FCC authorized pursue. As long an unreasonable means seeking achieve goals, they fall general authority recognized Storer Broadcasting Co., 351 192, 76 763, 100 L.Ed. 1081, National company States, 319 190, 63 997, 87 1344, 793-796. (b) Although it contended record conclusively establish would fulfill stated purpose, "[d]iversity its effects . elusive concepts, easily defined let alone measured without making quality judgments objectionable both policy First Amendment grounds," evidence specific abuses owners difficult compile. In light these considerations, clearly take irrational view public interest when decided impose ban, entitled rely judgment, experience, "it unrealistic expect true diversity from commonly owned station-newspaper combination." changed circumstances broadcasting industry, moreover, warranted departing earlier decisions allowed combinations. 796-797. (c) contention rights violated ignores fundamental proposition no "unabridgeable right comparable every individual speak, write, publish." Red Lion FCC, 395 367, 388, 89 1794, 1805, 23 371. spectrum, allocation regulation frequencies essential. Nothing prevents such will "public interest" communications media. A owner need forfeit his publish order acquire another community; nor he "singled out" more stringent treatment than other under already multiple-ownership rules. Far limit flow information, has acted "to enhance information heard on-going government surveillance content speech." reasonable promoting diversified communications, thus do violate who denied licenses pursuant them. 798-802. (d) reflects rational weighing competing policies. rationally concluded forced combinations, though fostering diversity, disrupt industry cause hardship might harm several respects, specifically identified FCC. past, consistently theory preserving continuity meritorious service furthers interest. And instant proceeding noted had "long service" replacement new guarantee level service, serious disruption during transition period, probably result decline local ownership. 803-809. (e) function policies standard been delegated Congress first instance, basis "presumption" "do serve interest." Such presumption comport longstanding judicially approved practice giving controlling weight some goal achieving "the best practicable public." There statutory obligation should given circumstances. made less significant factor renewal license compared application being considered, evaluating licensees somewhat different applicants appears have Congress. Since decision "grandfather" most predictions complete factual support required; "a forecast direction future lies necessarily deductions expert knowledge agency," FPC Transcontinental Gas Pipe Line Corp., 365 29, 81 435, 450, 5 377. Nor only since judgment concluding especially great monopoly. 809-815. 181 U.S.App.D.C. 555 Reporter, 2nd 938, part reversed part. Erwin N. Griswold, Washington, D.C., private petitioners. Daniel M. Armstrong, III, petitioner respondent Commission. Lawrence G. Wallace, States. Charles Firestone, Citizens Committee Broadcasting. [Amicus Curiae Information pages 778-779 intentionally omitted] Mr. Justice MARSHALL delivered opinion Court. 1 At issue governing permissibility community. Rules Relating Multiple Ownership Standard, FM, Television Broadcast Stations, Second Report Order, 50 F.C.C.2d 1046 (1975) (hereinafter cited Order), amended upon reconsideration, 53 589 (1975), codified 47 Code Regulations §§ 73.35, 73.240, 73.636 (1976). after bar formation Existing generally permitted continue operation. However, communities station, (where one station) five years, unless grounds waiver demonstrated. 2 questions whether exceed Commission's Act 1934, 48 Statutes-at-Large 1064, amended, KF62 151 seq. (1970 ed. Supp. V), Fifth owners; lines drawn between subject operation, Act, 706(2)(A) (1976 ed.). For reasons set forth below, we sustain 3 * Atlantic 4 Under regulatory scheme established Radio 1927, 44 1162, continued may operate granted 301. Licensees wish apply three grant if finds interest, convenience, necessity served thereby. 307(a), (d), 308(a), 309(a), (d). setting policies, serves program viewpoints, well preventing undue concentration economic power. See, e.g., FM 45 F.C.C. 1476, 1476-1477 (1964). This perception implemented over years series imposing increasingly restrictions multiple stations. early 1940's, promulgated rules prohibiting control (AM radio, television) community.1 1953, limitations were placed total number stations each person entity own control.2 1970, prohibiting, basis, VHF any serving market.3 6 More generally, "[d]iversification communications" viewed primary significance" determining who, among comparative receive particular facility. Policy Statement Comparative Hearings, 393, 394-395 (1965) (italics omitted). Thus, prior at here, fact applicant taken into account case-by-case resulted instances awards applicants.4 7 Diversification consideration thought relevant however. other, sometimes conflicting, ensure Id., 394. To this goal, weighed factors anticipated contribution operations, proposed past applicant—in addition ownership—in decisions. See id., 395-400. Moreover, considerable avoiding service.5 result, ers many able newspapers, repeatedly renewed findings continuation offered 1066-1067, 1074-1075. B 8 Against background, began 1970 consider restrictive toward Further Notice Proposed Rulemaking (Docket Number 18110), 22 339 (1970).6 Citing studies showing dominant role newspapers sources news 346; see 344-346,7 notice eliminate market, banning 346. suggested purpose competition involved, maximizing viewpoints." Ibid. time, however, expressed "substantial concern" about 348. Comments invited aspects 9 generated response. Nearly 200 parties, including Antitrust Division Department, various interests, groups, academic research entities, filed comments addition, submitted, dealing cross-ownership performance, consequences divestiture, degree present March 1974, requested further directed primarily core problem newspaper-television cross-ownership, Memorandum Opinion Order 97 (1974), close sets additional filed. July days oral argument, parties time speak. 10 here explained report released 31, 1975. concluded, first, 1048, citing 152(a), 154(i), 154(j), 301, 303, Amendments Constitution, 1050-1051. It observed "[t]he term encompasses 'the widest possible dissemination diverse antagonistic sources,' " quoting Associated Press 326 20, 65 1416, 1424, 2013 (1945), "ownership carries power select, edit, choose methods, manner emphasis presentation," 1050. creation grounded concerns, while antitrust 1049. rejected suggestion lacked reasoning implied five-year period. 1052. 11 reviewing submitted course then turned explanation justifications adoption. rules, broadcast-newspaper transfers owners, change proposal rulemaking.8 While recognizing pioneering contributions possible, necessary, "be expected add diversity." 1075.9 reaching conclusion, find "spea[k] voice" harmful competition. 1085, 1089. view, conflicting concerning performance inconclusive, pattern cross-owners 1072-1073, justified, instead, reference olicy ownership: Increases possibly enhanced and, absence persuasive countervailing "even small gain diversity" "worth pursuing." 1076, 1080 n. 30. 12 With respect across-the-board requirement, mere hoped-for sufficient justification. 1078. Characterizing issues difficult" presented correctly central importance "may too little could attend focus abstract alone." Forced also "disruption owners," "resulting losses diminution 1078, 1080. 13 considerations egregious "effective monopoly" "marketplace ideas economically." 1080-1081. standards defining fell category degree, "[a] choice made." require (1) signal, (2) encompassing 1080-1084.10 14 television-newspaper radio-newspaper meeting criteria. 1098. Waivers sua sponte combination, leaving divestiture. requests entertained latter cases,11 but, absent divested 1084-1086.12 15 reaffirmed material respects. (1975). Contract Various parties—including (NCCB), Association Broadcasters (NAB), American Newspaper Publishers (ANPA), petitioned District Columbia Circuit, 402(a) 28 2342(1), 2343 d. V). Numerous intervened, States—represented Department—was 2344, 2348. NAB, ANPA, argued went far restricting stations; NCCB Department go enough inadequately justified widespread basis. 17 Agreeing substantially vacated adopt procedure outlined Order. 938 (1977); 11, supra. held, furthering highly valued media, U.S.App.D.C., 17, F.2d, 954, therefore that, "explained why considers exceptional importance," strongly supported "based [the diversity] exclusion others customarily relied Commission." 33, 950 33; 11-12, 948-949. 18 reasoned permitted, indeed required, decisions, rule-making 303(r) 154(i) qualifications implementing standard. 14-15, 951-952. "increas[e] voices community," restrict free speech, owners. 16-17, 953-954. 19 affirming invalidated (APA), court's holding "grandfathering" policy, reinforced "encourage larger effective use interest," 303(g), 25-26, 962-963. dictated "in discloses 966. were, "lesser policies" much policy. 28, 965. [did] disclose extent actually threaten [other policies]." therefore, give extend combinations.13 20 even assuming difference justifiable, "egregious" allowing remainder "limiting markets 'absolute monopoly' squanders opportunity good," "[d]ivestiture useful markets." "[did] conclusion grandfathered affected markets," demonstrate stronger markets. point, "[a]lthough contain fewer voices, amount independent greater." 21 Commission, intervenors whose Appeals' decision, review.14 We certiorari, 434 815, 52, 54 71 (1977), now affirm insofar upholds reverse vacates requirement.15 II Petitioners NAB ANPA contend constitutional turn statutory, constitutional, issues. 24 Section 303(r), provides requires, shall [m]ake prescribe conditions, inconsistent law, necessary carry out provisions Act]." 154(i). recognized, 14, 951, supplies codifying standard, so permissible otherwise reasonable. If does proffer standards, deny inquiry. 1081 (1956); 1344 (1943). 25 upheld context supra, sustained portion placing control. 2, inter alia, prohibited networks owning AM community, 'any locality few unequal desirability restrained licensing.' U.S., 206-208, S.Ct., 1005; 26 Petitioner attempts distinguish ground involved efforts increase boundaries itself, whereas concerned whole. contends confers jurisdiction regulate "communication wire radio," impermissible overall market includes, to, industry. 27 argument undersells applicants, "primary "diversification communications," appr priate cases. 781, 4. discussed occasions, see, e. g., 210-218, 1006-1010; 375-377, 387-388, 1798-1799, 371 (1969), physical scarcity frequencies, problems interference signals, led delegate broad allocate avowed aim 1934 secure maximum benefits people States." 217, 1010. scheme, conclude benefit follow Our values underlying properly considered lies. "[T]he 'public interest' invites principles," System, Incorporated Democratic Committee, 412 94, 122, 93 2080, 2096, 36 772 (1973), particular, sources," 1424. 385, 390, 1804, 1806. Midwest Video 406 649, 667-669, 27, 92 1860, 1870-1871, 32 390 (1972) (plurality opinion). And, enforce laws such, Corporation America, 358 334, 351, 79 457, 467, 354 (1959); 222-224, 1011-1013. Indeed noted, albeit dictum: 29 "[I]n case keep met, publisher area applies available facilities, which, granted, him monopoly area's major communication." 351-352, 467. 30 31 two respects:16 lead increases viewpoints media; second, regarding 782. agree notwithstanding inconclusiveness record, finding f possibility greater viewpoints. observed, qualitative grounds." 24, 961. compile; lend themselves detailed forecast." RCA Communications, Inc., 346 86, 96, 73 998, 1005, 1470 (1953). circumstances, combination. divergency cannot antagonistically run." 1079-1080; 25, 962. shaping makes administrative response 1074-1075; Pottsville 309 134, 137-138, 60 437, 438-439, 84 656 (1940). although previously allowed, encouraged, because shortage qualified experienced available. channels open diminished substantially. become feasible urgent steps ownership, increasing causing service. combinations.17 33 argue nevertheless agree, 34 spectrum known. Because finite can used productively; exceeded persons wishing public. scarcity, Government essential, often recognized. 1805; commission Nelson Bros. Bond & Mortgage 289 266, 282, 627, 635, 77 1166 (1933); 795. No regulation, need, nothing prevent allocating 35 contend, certain support, point our statement Buckley Valeo, 424 96 612, 46 659 (1976), effect "government [not] speech elements society relative voice others," 48-49, 649. pose unique special traditional case.' 55, System 101, 2085. Thus 'enhanc[e] volume coverage' issues" through similar print be. 50-51, 1808; cf. Miami Herald Publishing Tornillo, 418 241, 94 2831, 730 (1974). Requiring obtain licenses; rather, preserves interests "people whole Lion, requires 'is denial speech.' 389, 1806, 227, 1014. Relying Speiser Randall, 357 513, 78 1322, 1460 (1958), Elrod Burns, 427 347, 2673, 49 547 unconstitutionally condition receipt forfeiture newspaper. anything community.18 importantly, petitioners, unlike case, abridging freedom expression, solely constitutionally protected speech; veterans deprived property-tax exemption declined subscribe loyalty oath, employees discharged threatened discharge political affiliation. wrote Broadcasting, before us wholly different" [were] political, social views." 226, Here related; it. 37 Finally, unfairly applicants.19 But treat essentially fashion treated 780-781, nn. 1-3; stations, alike restricted ability Grosjean 297 233, 444, 80 660 (1936), struck down state tax imposed distinguishable singled treatment. circulation entitled," 250, 449, eff ct protection conferred press Amendment. 38 acted, words, 954. communications; them.20 Being "choose facilities," chosen "sensible basis," further, rather contravene, system expression." T. Emerson, Freedom Expression 663 (1970). III 39 upholding aspect cases" APA, ed.).21 regu lations informal rulemaking, evidence" test 706(2)(E) ed.), quoted 21, "arbitrary capricious" factors. Preserve Overton Park Volpe, 401 402, 413-416, 91 814, 822-823, 136 (1971). "is searching careful," empowered substitute agency." 416, 824. 40 Appeals, treating leniently seek future; distinction believe reinstate Appeals. 41 42 aware separating ordering public," 1074, always Court, Sanders Station, 470, 475, 693, 697, 869 (1940); concern industry" "hardship Especially natural forces, warranted. Seeid., 29. 43 identifies respects harmed sweeping imposed: stability provided group lost; operation; "economic dislocations" obtaining working capital maintain programming;22 decrease.23 say irrationally harms outweighed potential gains direct consequence bringing proved public, indirect rewarding—and t —licensees invested money effort produce performance.24 licensee satisfy courts "legitimate expectanc[y]" "implicit structure Act" destroyed good cause. Greater Boston 143 383, 396, 444 841, 854 (1970), cert. denied, 403 923, 2229, 701 (1971); Center 145 32, 44, 35, 447 1201, 1213, re Formulation Policies Renewal Applicant, Stemming From Hearing Process, 66 419, 420 5, supra.25 Accordingly, licensing, incumbent important deciding thereby allow Even offers terms diversification, "proved product" rendered supra ; interest; pioneers "[t]raditions outset. 1078.26 Notwithstanding thereby, existence furthered. study showed percentage devoted categories programming, displayed "an undramatic nonetheless statistically superiority" 1078 26.27 An loss services superior licensees, and—whether caused actual just reasonably gains—the futu e discouraged investing resources replaced provide long-term commitment broadcasting. run better found "would lack begin raw," and—because high rates—might programming. 1078; 22, supra.28 fear prediction, 1068-1069, respond trading out-of-town undisputed roughly 75% locally owned, 26-27, 963-964, owners' affairs, built period lost outside interests. Local itself some—if relatively slight significance F.C.C.2d, 396. unreasonable, militating against years.29 leave opponents remedies proceedings. connection note proceedings unlikely accomplish "overall restructuring" patterns, make challenge proceedings, 1087-1088 (emphasis omitted); That is, secondary factor. applicant, if, challenger show engaged programming abuses. 13, unreasonably extending across board, apparently heavy reliance 790-791. derived "reaffirmed" secondarily Amendment," 26, 963, duty 303(g). Part above, diversification. task unable Amendment, practices "presume" circumstances.30 seem Certainly, III-A operation licensing. language legislativ history 303(g) indicates intended foreclose differences indeed, amending 307(d) 1952, lent approval applicants.31 enactment deemed create favor experiment severely hampered. One advantages process adapt flexible manner, unwilling presume acts decides try 51 791. criticism newspaper-broadcasting amply illustrated worth noting almost invariably tailored changes example, decisions; required. 3, limits 1953 numbers own, inUnited (1956), levels extensive AM, F.C.C., 292. 1940's approximately Eleventh Annual (1946), afforded review, Standard Fed.Reg. 16065 yet developed, wholl prospective. Governing Commercial 1; High Frequency 1. 52 concerns dislocations, decreases very weighty routinely approving voluntary assignments licenses. 26-28, 963-965. question compel divest longer business. brief explains: "[I]f force broadcasters stay business will, continuous, preserving. approves way undermines place premium proven remain business." Brief Page (footnote omitted).32 final arbitrarily Court's adequately "disclose threaten" determinations judgmental predictive nature—e. perform cross-owners, short run; sales; discourage investment programming; finance programming." prediction 377 (1961); Industrial Union Dept., AFL-CIO Hodgson, 162 331, 338-339, 499 474-475 55 erred not—as believed, 792—on "grandfathered" markets, certainly irrational, Rad o 467-468, founded assumption underpinned Court—that criteria "local marketplace economically," think settled reflect legislative-type judgment. Some line drawn, hardly confine kind Cf. quoted, 796. disregard standards. unanimously widely utilized discussion affairs; "aside [magazines periodicals] tiny fraction real dealt exclusively regional national ignored issues." 10, influence source news. 1083. 57 58 ordered. 59 BRENNAN took Stations radio), (1943); 4.226, 2284, 2284-2285 (1941); (FM 3.228(a), 2382, 2384 1941 issued "chain broadcasting" things, organization operating network barred 193, 1004-1005, 1964 tightened prohibit overlaps contours. 1476 288 seven 306 modified, 662 television-radio applications involving UHF permitted. McClatchy 99 195, 239 353 918, 664, 665 (1957); Scripps-Howard Radio, 189 677, 342 830, 72 628 (1951). adopting 79-A, 1580, 3302 (1941), deal ad hoc Dismissal Proceedings, 702 (1944). icense renewals undergone evolution, incumbent's renewal—even applicant—if purporting codify previous hearings. Concerning Hearings Involving Regular Applicants, 424. predictability stability, "has attuned needs area," automatic preference factors—including ownership—that 425. overturned appeal, 1201 (1971), hold full hearings considered. agreed "incumbent judged records performance." 1213. "superior [by incumbent] plus proceedings." original). promulgated, returning approach still incumbent. 419 pet. pending sub nom. Black Media Coalition 77-1500(CADC). radio-VHF permitting AM-FM consigning radio-UHF n.3. proposals wer here. 1052-1055. third news, ranking ahead magazines periodicals. 345. acquiring original licensing; acquires dispose year next date, whichever comes later. 1074-1076, 1099-1107. Noncommercial education college included scope 73.636, purposes include control, "daily newspaper" "one four per week, English circulated publication," 10; specified contour station—"Grade A" television, mV/m 1mV/m FM—encompasses city published, 1075. provide, 1076 1077; 589, 591, 592 community—regardless station—common barred. hand, presence exempt newspaper-radio "[r]ealistically, equal paper se se, least medium matters concern." periodicals, since—aside share—these depended coverage 1081-1082. favorably inclined request premised views rule adopted," temporary permanent waivers sell artificially depressed price; shown separate "cannot locality"; or, current pattern." 1085. indicated limitations, relating proper occasion applicants. 1088 original); 1087-1089; suggested, petition filed, forward, hearing owner, monopolization sort Sherman 1088. allege monopolization. Counsel informs us, "limi[t] challengers Commission] permit them re-argue adjudicatory i. e., what undesirable." Reply 8; infra. believed alleged monopolization, 108, 966 108. assumption, unreasonable. read foreclosing claim abuses, foreclosed undesirable, availability renewal. reasonableness actions subsequent course, time. Upon motion temporarily stayed mandate—insofar requirement—pending filing certiorari 30, 967 (1977). allotted remained effect. 2101(f); Fed.Rule App.Proc. 41(b). Several petitioners directing reconsider formulate legal principles court. cite well-established extraordinary ends error law laid bare. matter once goes reconsideration." Idaho Power 344 85, 87, (1952); accord, NLRB Food Store Employees, 417 9-10, 2074, 2079-2080, 612 (1974); South Prairie Constr. Operating Engineers, 425 800, 805-806, 1842, 1844-1845, 382 disposition cases, decide action. rationality position authority. They that— regardless authority—both lacks promulgate General Senate Interstate Commerce Commission: Counsel, 1937, reprinted App. 445-465, legislative amendments late 1950's never passed, S. 1333, 1333 Subcommittee Foreign Commerce, 80th Cong., 1st Sess. (1947); 1973, 81st (1949); 658, 82 (1952) (House amendment 7(c)). unavailing. Apart Counsel's formally statements statute construed, Southwestern Cable 392 157, 170, 88 1994, 2001, 1001 (1968); Wise, 370 405, 411, 1354, 1358, 590 (1962), materials simply irrelevant case. merely co cluded class, absolutely address narrower 447, 449. Similarly, precluded prohibition 69-70; 1973 Sess., 20-21, 42-44, 103-105 S.Rep.No. 741, 2-3 (1949). Congress' rejection unnecessary, House Conf.Rep.No. 2426, 82d 18-19 2-3—following representation amendments, 103-104 (testimony Chairman Hyde) sheds form quite prohibitions laws. consistent with, supportive underlying, (1945); Lorain Journal 143, 181, 62 (1951); Citizen 394 131, 139-140, 927, 931-940, 148 (1969). (1959). fully applicable answer frames Amendment; advances underscored potentially survive 9, APA part: "To presented, interpret provisions, determine applicability agency shall— "(2) unlawful aside action, findings, conclusions be— "(A) arbitrary, capricious, abuse discretion, accordance law; "(B) contrary right, power, privilege, immunity; "(C) excess jurisdiction, authority, right; "(D) observance "(E) unsupported substantial sections 556 557 title reviewed statute; "(F) unwarranted facts trial de novo "In foregoing determinations, parts party, due prejudical error." 706(2) entirely regard, rates, devote revenues debt insufficient 1068 (describing effect). "could reduce involvement management." added). questioned validity management, "no actively management" '[m]ost staff .' 964, 1059. Of separately managed participates management event, factor, 706 (rule prejudicial error). "[p]rivate adverse provision 27-28, 964-965, 474-476, 697-698, (1940), Carroll 103 346, 258 440 (1958). Private discouragement 301 [broadcast] construed beyond terms, periods license." proprietary mean, infra, 810-811, 31. baron Robbins, Study Pioneer 694-712. Earlier annual reports conducted. 1073; 1094. suggests comment advance decision. 39. party reconsideration ground, raised us. Commissioner Hooks effectively summarized complex opinion, concurring dissenting grounds: "[A]s N Dec. Immigration Nationality Decisions contemplate newspaper-owned speculate unknown successor, my conditioned yields 'a bird hand bush' philosophy. Opponents [of divestiture] ask: Why sake broadcaster, background resources, inferior? Can afford, wide-scale dogmatic formula; churning ceased, profit—the public?" 1109. 75%, all, mean justifying owned. discretion proceed adjudication, SEC Chenery 332 194, 201-202, 67 1575, 1579-1580, 1995 (1947), and—in multifactor process—every equally states: "If democratic function, insuring divergent possible." 1079 intend statemen[t] literally," focus. Prior "shall governed affect granting applications." 307(d), 1084. 1952 section thereby." Amendments, 714. neither realistic handled H.R.Rep. 1750, (1952), U.S.Code Cong. Admin.News Pages 2234, 2241, "right consider, applying renewal, necessity," S.Rep. points out, "trafficking"—i. acquisition sale realize quick profit—that commences operations. 1.597 (1976); Crowder 130 198, 22-23, 399 569, 572-573, 393 962, 400, 375 (1968).

Classification Label: 7