Court Opinion

ID: 8882285
Source: CourtListenerOpinion
Date Created: 2022-11-26 20:54:42.5818+00
Date Added: 2024-06-11T17:06:43.348452
License: Public Domain

BAZELON, Chief Judge
(concurring in part and dissenting in part):
Two aspects of this case trouble me. The first is the continued failure of the FCC to clarify the standards which govern the decision to hold an evidentiary hearing in a market below the top 100. The second is the cavalier refusal of the FCC to consider the issue of cross ownership on the unelaborated ground that the issue is currently under study by the Commission in a rule-making proceeding.
I
Cedar Rapids Television Co. v. FCC, 128 U.S.App.D.C. 270, 387 F.2d 228 (1967), also involved a refusal by the Commission to hold an evidentiary hearing concerning the importation of a distant signal into a market outside the “Grade A” contour of a television station located in- the top 100 markets. Since the petitioners there had failed to produce any documentation to show that UHF development might be deterred by the CATV operation or that existing service might be threatened, we affirmed the denial. However, after agreeing with the “Commission * * * that if hearings were required on the sort of ‘bare-bone’ petition filed here, then hearings would almost always be required,” we observed,
Perhaps the paucity of information explains the Commission’s failure to make clear in its memorandum opinion the burden of proof it expects petitioners seeking an evidentiary hearing to meet. Although the record in this case is such as to make it pointless to remand for a fuller explanation, we think it necessary to remind the Commission that particularly when, as here, it embarks into a new field of regulation, there is a special need for a fuller statement of its reasons.
Id. at 274, 387 F.2d at 232.
Several months later, in Eastern Microwave, Inc., 11 F.C.C.2d 146 (1967), the Commission held that the petitioner had failed to bear “the initial burden of establishing the existence of special circumstances which would warrant a hearing.” Id. at 147. Apparently attempting to meet the strictures of Cedar Rapids, the Commission elaborated its reasons:
[The petitioner] has failed to supply any specifics, by affidavit or otherwise, regarding its financial condition, the impact that the present CATV system has on its operation, the impact that the proposed additional signals would have, or the manner in which the present or proposed CATV operation relates adversely to Brockway’s operation to the detriment of the viewing public.
In this case, unlike Cedar Rapids and Eastern Microwave, the Commission can hardly argue that no documentation was submitted for the petitioners’ claims that the proposed CATV operation would reduce the likelihood of an independent UHF station and threaten the viability of existing stations. Instead, the Commission examines the exhaustive CoeSaunders report and other material submitted by the petitioners, criticizes various aspects of it, and concludes (1) “our analysis of this market indicated no like*683lihood of UHF activation in at least the near future,” and (2) “it does not appear that the potential impact [of the CATV system] would be sufficient to threaten the viability of existing or potential stations.” Consequently, the Commission decides that the petitioners have “failed to establish special circumstances which would justify grant of the special relief it has requested.”
This refusal to grant “special relief” confounds the separate questions of whether the importation of distant signals should be prohibited and whether the petitioners are entitled to a hearing on that issue. Insofar as the former question is concerned, I would agree that the petitioners have not demonstrated their case. The appearance of an independent UHF station does appear speculative; the probability of such economic harm as would threaten the viability of the present VHF station seems low.
But surely this cannot be the standard which must also be met for a hearing. To impose a requirement that the petitioners must prove by a preponderance of the evidence the case for non-importation of distant signals in order to be entitled to the evidentiary hearing which they seek in order to demonstrate the case against importation of signals would be a bizarre and circumlocutous way of announcing there never shall be any hearings in these markets.
Of course, the decisions of the Commission in this area suggest that this may indeed be the intended message — with the caveat that the FCC retains the right to grant a hearing when it pleases and for whatever unannounced reasons it pleases. In denying a hearing in this case, the Commission contributed only this analysis of the standards which determine the need for a hearing:
[A]bsent a special showing made pursuant to Section 74.1109 of the Rules, there is no need for prior evidentiary hearing before CATV service may be instituted in below top-100 markets.
This case, like the previous cases in which the FCC has denied a hearing in such cases, gives little or no suggestion what constitutes a “special showing.” Nor do those cases in which the Commission has granted a hearing. Taft Broadcasting Company, 5 F.C.C.2d 746 (1966), involved the Lexington, Kentucky, market, which ranks 141st, three notches lower than the Colorado Springs-Pueblo market. The Commission held:
In view of the nature of the Lexington market, its present UHF activity, and the facts set forth in the pleadings, a substantial question is raised as to the impact of the CATV systems upon UHF development. We will explore this question in a hearing.
Id. at 747.
Aside from a pending application for an educational UHF station in Lexington at the time of the decision, there seems little to distinguish that case' from the present one. Certainly a “substantial question” has been raised here. And in Taft Broadcasting, the Commission seemed content with “the facts set forth in the pleadings” — a strange departure from the disdain with which it has viewed pleading allegations unsupported by evidentiary documentation in other cases.
United Transmission, Inc., 6 F.C.C.2d 786 (1967), involved several communities in Kansas, none of which were in a top-100 market. Two existing stations alleged that the proposed CATV systems would threaten their viability. The Commission decided that a hearing was necessary:
As is frequently the case in economic impact cases, KSN’s underlying assumptions leave lingering doubts, such as: Whether only the “net KCKT grade B area” is the proper measure of KCKT’s circulation or profitability; whether KSN’s accounting allocations are correct; and whether — in this market — KSN’s estimates of the cost of CATV competition are realistic, particularly since KCKT is a semisatellite. But whatever our final decision, KSN’s allegations and supporting documentation evoke sufficient concern to require evidentiary hearing. * * *
*684Id. at 787.
Of course, in this case it was just such “lingering doubts” concerning the validity of the petitioners accounting allocations and cost estimates which the Commission advanced to justify the refusal of relief.
The majority opinion of this Court, in examining the potential for UHF development in the Colorado Springs-Pueblo market, seems as uninterested as the Commission in treating separately the merits of the petitioners’ case and the need for a hearing. The same is true concerning the issue of economic injury to existing VHF stations, except that the majority makes the alternative argument that no hearing was necessary since the allegations of the petitioners, even if true, were not sufficient to demonstrate a threat to their viability. The majority reaches this result by (correctly) recalculating the minimum estimated loss from CATV competition downward from $123,-000 to $82,000 and suggesting that the estimated $100,000 annual increase in advertising revenue in the market would cover this loss easily.
But the Coe-Saunders report submitted by the petitioners provided a variety of loss estimates. While the minimum was $123,000, the maximum was $687,000. Adjusting this latter figure downward to correct for the error in the report concerning the number of households affected produces a maximum loss estimate of $458,000. Since the estimated growth in advertising revenues would hardly match losses of this magnitude, it is hardly accurate to argue that the petitioners’ claims did not, even if believed, demonstrate a threat to their viability.
Whenever a hearing is denied, the Commission points out to this Court the cost and delay of hearings and the number of petitions with which it must deal. I sympathize with its plight. I also sympathize, however, with the petitioners in this and other cases who take the Commission at its repeated word that there are “special circumstances” that will justify a hearing. It does not seem impossible to demand of the FCC that it tell present and potential petitioners, as well as this Court, just what those “special circumstances” might be.
An evidentiary hearing involves cost and delay. But so does a protracted administrative proceedings and appeal to decide whether a hearing is necessary. The FCC might well reduce its often-complained of workload by announcing with greater particularity the standards which govern the decision to grant a hearing, and thereby perhaps reducing the number of cases such as this where both the petitioners and the Commission have devoted considerable time and effort to the question of whether a hearing is necessary.
Normally, I would vote for a remand in this case in order for the FCC to answer such questions as the burden of production a petitioner must bear to justify a hearing and the sort of information relevant in meeting that burden. However, the notice of proposed rulemaking issued by the Commission after oral argument in this case indicates that substantially different standards are contemplated for the importation of distant signals into below top-100 markets. Notice of Proposed Rulemaking in Docket No. 18,397, FCC Release No. 68-1176, Paras. 55-58 (December 13, 1968). Since the CATV systems involved in this case have not yet begun operation because of the July 3, 1968, order of this Court staying the authorization granted by the Commission, they will be subject to these new rules. Id. at Para. 59. Consequently, I can see no utility to a remand in this case for a clarification of hearing standards under the old rules.
II
The Commission refused to consider the issue of multiple ownership of CATV systems in this proceeding because “the Commission retains adequate authority to deal with the question should action later appear desirable.” The majority opinion accepts this representation, noting that the proposed rulemaking proceeding referred to in the preceding paragraph will also deal with the issue of multiple ownership.
*685I agree with the majority that “it is not reasonable to require the Commission to spell out premature solutions to all problems prior to the authorization of any CATV service in smaller markets.” But, on the other hand, neither is it reasonable to disregard completely whether any new rules dealing with multiple ownership can or will in fact be applied to the market involved in this case.
In the section of its notice of proposed rulemaking dealing with multiple and cross ownership, the Commission states, “We stress that no grandfathering is contemplated, although consideration will be given to the question of affording an appropriate period within which compliance * * * is to be achieved.” Id. at Para. 23.
My enthusiasm for this declaration of good intentions is tempered by the fact that the Commission has stated flatly in those sections of its notice dealing with importation of signals into both top-100 and below top-100 markets that any new rules will be applicable to CATV systems not yet in operation. Id. at Paras. 52, 59. If such explicitness is possible in those areas, why not in the areas of cross and multiple ownership?
The specter of grandfathering is hardly illusory. In the area of signal importation, the notice of proposed rule-making does provide that CATV systems already in operation will not be affected by the new rules “in view of the general impracticability or rolling back established service.” Id.; see also, Second Report and Order, 2 F.C.C.2d 725, 782 (1966).
Perhaps diversification of ownership is more easily ordered than a rollback of established service. But cf. Community Broadcasting Co. v. FCC, 107 U.S.App. D.C. 95, 101, 274 F.2d 753, 759 (1960). But our experience with the problem of grandfathering in the communications industry has been such that I am unwilling to accept blithely the Commission’s assurances of good intentions. Since there is no explicit provision against grandfathering in the part of the notice of proposed rule-making dealing with concentration of media ownership, I would remand this case to the Commission for a more complete statement of precisely the “adequate authority” it retains to deal with the problem in the Colorado Springs-Pueblo market. Cf. United Transmission, Inc., 10 F.C.C. 118, 119 (1967).