Court Opinion

ID: 9452630
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:46:49.146964+00
Date Added: 2024-06-11T17:33:17.678629
License: Public Domain

TAMM, Circuit Judge
(dissenting):
I respectfully dissent from those conclusions of my brethren upon which they reverse and remand this case to the Commission. Upon the record before us, I would affirm the Commission.
I
The majority opinion concludes that the Commission should have held a hearing on the trafficking issue. Trafficking, as a term of art in this context, denotes, essentially, the acquisition of broadcast licenses for resale rather than for operation. The practice of trafficking has consistently been regarded by the Commission as being contrary to the public interest. See amendment of Part 1 of the Commission’s Rules, 23 Pike and Fischer R.R. 1503. In determining whether trafficking conditions exist, the Commission considers intention, timing, price (Atlantic Coast Broadcasting Corp. of Charleston), 22 Pike and Fischer, R.R. 1045 and the applicant’s entire history of radio license acquisition and resale. (Franklin Broadcasting Co., 22 Pike and Fischer R.R. 880).
F. L. Crowder, the applicant-inter-venor in these proceedings, had a part ownership in Radio Station WHBT as early as 1946 and became sole owner of that station in 1950. He sold the station in 1956, after having owned it in whole or in part for ten years. Crowder was the sole owner of Radio Station WDEH for two years from 1954 to 1956. Prior to his present application, his only other interest in a broadcasting operation was a fifty per cent ownership of WLIV from 1956 to 1964. It follows, then, that over this eighteen-year period, Crowder has had a proprietary interest in three radio stations: one for 10 years, one for 8 years and one for 2 years. There is no evidence in the record that Crowder acquired any one of these stations for the purpose of selling it at &■ profit; nor is there any contention by any party to the proceedings that the resale price of any of Crowder’s stations was exorbitant or at variance with the then current fair market value of the holdings. The consistency of the application of the Commission’s policies in trafficking cases to *306the factual situation in the current case is illustrated by Commission action in Versluis Radio and Television, Inc., 9 Pike and Fischer R.R. 1123; Good Radio, Inc., 23 Pike and Fischer R.R. 1036; and Laramie Broadcasters, 20 Pike and Fischer R.R. 423. Although I agree with the majority that the trafficking issue “is a sensitive one vitally affecting the public interest,” I, nevertheless, cannot conclude on the facts in this case, viewed in the light of Commission rulings, that a trafficking issue requiring a hearing is even suggested by the record.
II
My brethren express concern in their consideration of the trafficking issue relative to the “inconsistent representations” made by Crowder as to the reasons for his sale, in 1956, of his interests in Stations WHBT and WDEH and they therefore decline to accept the Commission’s conclusion. As I have already pointed out, Crowder’s ownership of interests in three radio stations spanned a period of nearly twenty years. Each transaction relating to the purchase or sale of those interests had been approved by the Commission, including Crowder’s sale of appellant’s present station. When appellant raised this question, the Commission called upon Crowder to supplement his pleading in this respect, and Crowder did so. Upon the supplemented record, the Commission found the alleged inconsistencies “more apparent than real.” Although Crowder, in 1956, stated as his reason for the sale of his interest in Stations WHBL and WDEH that he “wanted to quit the broadcast business in Harriman and Sweetwater,” the Commission found that his statement in the current proceedings and ill health was the reason for these sales was not so inconsistent as to warrant a charge of misrepresentation. To me, a contrary conclusion would be capricious.
The other alleged inconsistency relates to Crowder’s statement to the Commission, in 1956, in applying for a license for the operation of a radio station in Livingston, Tennessee, that he would be a fifty per cent partner and general manager of the station. The inconsistency allegedly relates to his serving as general manager of a new radio station in Livingston while disposing of his interests in stations in Harriman and Sweetwater by reason of ill health. Called upon by the Commission, as a result of appellant’s challenge, to enlarge upon this question, Crowder submitted additional information to the Commission. In substance, Crowder replied to the Commission that the term “general manager” was not “wholly descriptive” of the very limited activity he actually contemplated and performed. Crowder explained that because his brother-in-law, in 1956, desired to go into the broadcasting business, he, Crowder, agreed to act in “a supervisory capacity in the preparatory stages of the application, and until the station went on the air, and after that point in time he would act only as an advisor upon an as-needed basis.” Crowder affirmed his fifty per cent ownership of the station, recounted that he recommended and hired attorneys and engineers, purchased equipment, “and the like.” Crowder stated to the Commission that, after his initial activities when the station began broadcasting, he was not active in any capacity other than as an advisor to his brother-in-law. The Commission accepted these explanations and found that they were not inconsistent with the information furnished the Commission in 1956. Absent some specific allegation of factual inaccuracy in these matters, the Commission’s action seems to me to be completely reasonable, within the orbit of its authority, and lacking any semblance of a situation requiring or justifying a hearing. Appraised realistically, I think the entire record of these “inconsistencies” is a mountainous molehill of triviality successfully injected into the proceedings solely for the purpose of effectuating delay of the Commission’s and the court’s disposition of the case.
*307III
The majority finds in the record a “Carroll issue,”1 id est, a question whether the economics of the situation would be so affected by the granting of a license to applicant as to lead to a degradation of service to the public, and remands this issue to the Commission for “further consideration.” I think it is well to recall the economic facts of life which exist when an application for a new radio station threatens competition to the revenue of an existing station. We observed in Southwestern Operating Co. v. Federal Communications Comm’n, 122 U.S.App.D.C. 137, 351 F.2d 834, 835, n.2 (1965), that “the temptation to an existing licensee to postpone as long as possible the advent of competition warrants special care by the Commission in the scrutiny of requests for hearing in Carroll circumstances.” There is, I fear, a tendency to extend the doctrine of the Carroll case far beyond its expressed teaching. Recalling that Carroll was bottomed upon the Supreme Court’s opinion in Federal Communications Comm’n v. Sanders Bros. Radio Station, 309 U.S. 470, 60 S.Ct. 693, 84 L.Ed. 869 (1940), it appears important to emphasize that in that case on the issue of economic injury the Court said:
“We hold that resulting economic injury to a rival station is not, in and of itself, and apart from considerations of public convenience, interest, or necessity, an element the petitioner (Federal Communications Commission) must weigh and as to which it must make findings, in passing on an application for a broadcasting license.” 309 U.S., at 473, 60 S.Ct., at 696. (Emphasis supplied).
Thereafter, the Supreme Court pointed out, of course, that the economic effect of competition might have a “vital and important bearing upon the ability of the applicant adequately to serve his public.” This statement is equally applicable to the ability of existing stations, faced with competition from an applicant, to serve their public. It was in recognition of these principles that we concluded in Carroll, supra, that:
“economic injury to an existing station, while not in and of itself a matter of moment, becomes important when on the facts it spells diminution or destruction of service.” 258 F.2d at 443. (Emphasis supplied.)
Recognizing, however, the potential weapon for delay that Carroll presented to existing stations threatened by competition from a potential new license, we cautioned:
“This opinion is not to be construed or applied as a mandate to the Commission to hear and decide the economic effects of every new license grant. It has no such meaning. We hold that, when an existing licensee offers to prove that the economic effect of another station would be detrimental to the public interest, the Commission should afford an opportunity for presentation of such proof * * Ibid. (Emphasis supplied.)
This is the standard we created for the guidance of the Commission.
Appellant’s initial allegations of economic .injury because of the inability of the covered community to support another radio station were supplemented by additional data furnished at the Commission’s request for specific factual data on this point. These data, by way of illustration and not of enumeration, alleged, inter alia, that the county where applicant’s radio station would be located and where appellant’s station operates was in a period of declining economy. However, other data before the Commission showed that population figures, personal income, bank deposits, and retail sales increased and were increasing over significant periods. The Commission record also attested to a rise in appellant’s broadcast income from $65,019.00 in 1961 to $80,476.00 in 1963, during *308which years appellant’s station was operated with a staff of nine employees. Appellant furnished the Commission with estimates of the existence of 400 to 425 businesses which were potential clients in the local radio advertising area, of which 278 were numbered among appellant’s accounts for a two-year period. If appellant’s figures were accepted by the Commission, there remained some 150 business operations available as potential clients of applicant. The impact of these figures is more significant, however, in view of Folkways’ own statement that only 100 to 125 of all of these establishments regularly advertise on station WHBT.
Appellant estimated the available amount of revenue for radio advertising in the Harriman area as being approximately $125,000.00 a year. As indicated heretofore, Folkways Broadcasting revenues for 1963, the year of its highest income shown in the record, was approximately $80,000.00; so there is — by appellant’s own figures — some $45,000.00 additional potential revenue for some radio station in Harriman.
Although afforded an opportunity to demonstrate to the Commission which advertisers on appellant’s station would transfer their accounts to the applicant’s station, appellant declined to “speculate” on this contingency. Certainly, this was a most significant and essential element in measuring the economic impact of the new station upon appellant’s future ability to render adequate public service; yet the Commission was furnished no information whatsoever. Appellant, in most general terms, alleged that the establishment of intervenor’s station would result in a “significant reduction or destruction of service.” In its original petition to deny intervenor’s application, appellant Folkways identified four public service programs which might be curtailed. One of these programs is carried only once a year, and the frequency of broadcast of a second is not even recorded. No schedule of curtailment of public service programs was furnished by appellant, nor was any estimate of the cost of the public service activities to the station furnished, other than an estimate of the sums of money which might have been earned if income-producing time had been substituted for the public service announcements. Afforded an opportunity to indicate the nature of the personnel changes or curtailment that appellant would be forced to make because of the economic blight resulting from inter-venor’s operation, the Commission was merely advised that Folkways’ staff would have to be reduced.
At no time did appellant charge that applicant would be unable or unwilling to fulfill its proposed public service programs.
Intervenor, of course, submitted data in support of its application which was intended to justify the issuance of its license, and of course appellant submitted material other than that recounted heretofore in justification of its demand for a hearing on the Carroll issue. Obviously, my enumeration of appellant’s claims is confined to a broad sampling of Folkways’ pleadings intended to illustrate the factual basis for my conclusion that a hearing was not required, or even justified, on the record before the Commission, because, quite simply, appellant made no showing of any potential injury to the public interest through loss or degradation of programming service if applicant’s license were issued.
Section 309(d), Title 47 U.S.C. permits the Commission to make grants of licenses without hearing, after consideration of the application and all relevant pleadings, upon a finding that there are no substantial and material questions of fact outstanding and that the grant is in the public interest. This section of the Communications Act was amended by the Congress in 1960, with the intention of requiring:
“a substantially stronger showing of greater probative value than is now necessary in the case of a post grant protest. The allegation of ultimate conclusionary facts or mere general *309allegations on information and belief, supported by general affidavits as is now possible with protests is not sufficient.” S.R. 690, 86th Cong., 1st Sess.
In Capitol Broadcasting Co. v. Federal Communications Comm’n, 116 U.S.App.D.C. 370, 324 F.2d 402 (1963), we held that a hearing is not required in the absence of substantial factual allegations which, if true, establish a prima facie case for denial of the application. In the Southwestern Operating Case, supra, we stated that:
“Congress intended to vest in the FCC a large discretion to avoid time-consuming hearings in this field whenever possible * * *.” 351 F.2d, at 835.
My conclusion upon the record on the Carroll issue is succinctly expressed by our observation in KGMO Radio-Television, Inc. v. Federal Communications Commission, 119 U.S.App.D.C. 1, 336 F.2d 920, 922 (1964), upon a somewhat similar record, that “it is within the Commission’s authority to require more information than appellant gave.”
The majority opinion holds that the Commission “has not satisfactorily met” appellant’s contention that “Crowder’s threat to engage in a rate war” presented a factual question requiring a hearing. Applicant filed with the Commission a rate card listing the rates proposed to be charged for advertising on the new radio station if the license were issued. The proposed rates were substantially lower than those being charged for similar time by appellant Folkways. The proposed rates, however, were identical with the rates which Crowder had charged when he had successfully operated Radio Station WLIV in Livingston, Tennessee, and were comparable to those which he, Crowder, had charged when he successfully operated Radio Station WHBT, appellant’s present station, at Harriman, Tennessee. To this point, the record certainly supports no charge of rate war. There is no statute or regulation cited to us which prohibits a radio station from charging lower advertising rates than a competitor’s. The Supreme Court in Sanders, supra, recognized “that the field of broadcasting is one of free competition.” 309 U.S., at 474, 60 S.Ct., at 697.
The picture, then, becomes blurred; the issue obscured; the record contaminated; and, I fear, the majority of the panel deceived, by the filing of the counter affidavits described in the majority opinion. Back fence gossip of questionable admissability in a court of law is elevated to the lofty level of “evidence” by its presentation in affidavit form. One affiant departed the other’s employment subsequent to the filing of inter-venor’s license application and entered the employment of appellant. The counter affiant had some business affiliation with F. L. Crowder, the intervenor-ap-plicant, and apparently was to serve — at least by rumor — on the staff of Crow-der’s station if the license were granted. The affiants label and cross-label each other as unequivocal liars, a conclusion neither arbitrary nor capricious to anyone with a minimal grasp of the obvious. Recognizing the impossibility, as well as the undesirability, of attempting to evaluate the credibility of testimony appearing in conflicting affidavits, the factual situation here, however, disclosed two persons — each obviously motivated by reasons of personal gain — willing to attest or deny the making of oral statements out of the presence of anyone but themselves. The resulting situation is, consequently, one in which, if a hearing issue is created by the affidavits, the Commission would be required, in order to decide in favor of the appellant, to find that the conversations alleged by Willis were in fact true, despite the vehement denials of Scarbrough. The Commission would have to find, further, that the fact of Willis’ employment by the appellant after the filing of the application and (apparently) throughout the entire current proceedings did not affect the credibility of his testimony. The members of the Commission would have to find as *310judges of the fact, that the credibility of one affiant, Willis, was not affected by the termination of his employment by Scarbrough, but conversely that this relationship influenced the reliability of Scarbrough’s testimony.
It is inconceivable, of course, that this court would permit the determination of contested issues of material fact by the Commission — or by any administrative agency — without a hearing and solely upon the basis of conflicting affidavits.2
I do not believe, however, that the mere utilization of the affidavit form to present conflicting statements per se creates automatically a controverted issue of material fact. In my view, the court should, as the Commission did, make a careful analysis of the affidavits and evaluate them in the light of their contents and the possible effect of the testimony of the affiants upon the question to be decided by the Commission. If the affidavits present factual statements of material and relevant evidence reasonably within the affiants’ knowledge, they obviously demand that the affiants be exposed to the test of examination and cross-examination to insure to the Commission the reliability of the facts expressed. On the other hand, however, I am completely unwilling to hold that conflicting affidavits, which by any reasonable appraisal can result only in a name calling contest between the affiants when confronted with each other in oral hearing, meet the standard of substance which the Commission may require as constituting “specific allegations of fact” within the meaning of 47 U.S.C., Sec. 309(d) (1).
In dissenting, I conclude that the Commission acted legally and properly, upon the record before it, in finding without a hearing that the grant to the intervenor-applicant of a permit to construct a new radio station would serve the public interest, convenience and necessity.

. Carroll Broadcasting Co. v. Federal Communications Comm’n, 103 U.S.App.D.C. 346, 258 F.2d 440 (1958).

. Compare Minor v. Washington Terminal Co., 86 U.S.App.D.C. 71, 180 F.2d 10 (1950); Vale v. Bonnett, 89 U.S.App.D.C. 116, 191 F.2d 334 (1951).