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04/20/61 James H. Ranger, William R v. Federal Communications

April 20, 1961




Before PRETTYMAN, WASHINGTON and BURGER, Circuit Judges.


Broadcasters, Intervenors.


PRETTYMAN, Circuit Judge.

This is an appeal *fn1 from an order of the Federal Communications Commission, denying reconsideration of a prior order, which had dismissed appellants' application for a standard broadcast station. The order of dismissal also denied reinstatement of the application nunc pro tunc its filing date.

Atascadero and Santa Maria are towns in California located about forty miles apart. On June 9, 1958, parties operating as "Radio Atascadero" filed an application for a broadcast station at Atascadero. On November 26, 1958, parties trading as "Cal-Coast Broadcasters" filed an application for a broadcast station at Santa Maria. These two applications were mutually exclusive, and a comparative hearing was thus required. On April 20, 1959, our appellants, trading as "Radio Cabrillo", filed an application for a broadcast station in Atascadero. The Commission returned this latter application as incomplete under its rules. Appellants' effort, both before the Commission and here, is to secure a place as a party in the comparative hearing.

Appellants argue that, having determined that their application was incomplete, the Commission was required by Section 309(b) of the statute *fn2 to notify them to that effect, to advise them of all objections to the application, and to afford them an opportunity to reply; and, further, that if the Commission was not satisfied after considering such reply it was required to designate the application for hearing. The Commission found, and we agree, that appellants' application failed in a number of material respects to comply with the rules of the Commission as to the contents of applications. The Commission addressed a letter to appellants specifying these deficiencies. Among them were failure to submit a schedule of programs for a typical week, failure to answer a question as to whether the applicant was controlled by any person who had an interest in any broadcast station, failure to show the date of the partnership agreement of the applicant, failure to submit an exhibit referred to in the list of exhibits in the application, failure to submit a balance sheet for one partner and an income statement for another partner, and the verification of a financial statement after the date of verification of the application itself.

We think an applicant for a radio license who either ignores or fails to understand clear and valid rules of the Commission respecting the requirements for an application assumes the risk that the application will not be acceptable for filing. A radio license is an operating authority of importance, involving primarily the interest of the public. If the rules as to the required information were either unclear or invalid, an applicant might have substantial grounds upon which to complain if an application were not received for filing. But no such claim is made in this case.

The statute specifically provides *fn3 that "All applications for station licenses * * shall set forth such facts as the Commission by regulation may prescribe as to [a list of topics]; and such other information as it may require." On the face of the application form is the following paragraph, in large type:

"Be sure all necessary information is furnished and all paragraphs are fully answered. If any portions of the application are not applicable, specifically so state. Defective or incomplete applications may be returned without consideration."

We are of opinion that Section 309(b), the pertinent portion of which is quoted in note 2 (supra) was intended to apply to what might be termed questions of substance. In other words, the section means that if, with the required information before it, the Commission is unable to make a determination as to whether a grant of the application would serve the public convenience, interest or necessity, it must notify the applicant, receive his reply, and, if the reply be not satisfactory, designate the application for hearing. We think the section does not apply where an application is lacking in material respects, the applicant having failed to supply the Commission with information obviously necessary to a consideration of its merit in the public interest. Of course there are borderline cases in which an application approaches essential completeness but is lacking in minor respects. In such a case the Commission should give weight to the interest of the applicant and channel the application through the procedure established with that in view; and we understand from its brief here that such is the Commission's policy. But we think Congress did not intend by this section of the statute to require the formality of Commission consideration of and hearing on an application in which the signatory obviously fails in major material respects to abide the regulations. The Commission obviously has power to require conformance with regulations prescribing the material with which it must be furnished. If this were not so, any obstructionist could easily prevent indefinitely the consideration of an application by merely filing skeleton competing applications.

Appellants also argue that a change in the regulations of the Commission which operated to shut off their application before it could be rewritten and proffered for filing, was invalid. The Ashbacker doctrine, Ashbacker v. F.C.C., 326 U.S. 327, 66 S. Ct. 148, 90 L. Ed. 108, as we have remarked before now, created some very practical and difficult administrative problems. One of these arises from late filing of competing applications. Obviously, if all valid conflicting pending applications must receive a comparative hearing, late filings create procedural difficulties. Particularly is this so in view of what is described in this litigation as a chain reaction. Let us assume three towns, A, B and C, fifty miles apart in a straight georgraphical line. Application for a broadcast station at A is made. Grant of that application would preclude a station at B on the same or an adjacent channel; it would not affect the possibility of a station at C. Before the application for A has been acted upon, an applicant files for a license at B and asks for a comparative hearing with A. A grant in B would preclude a station at C. Therefore potential applicants for C must file in the A-B case in order to protect their rights. Theoretically this reaction could go on indefinitely and could eventually involve every potential broadcast-station situs in the United States.

In order to avoid these hopeless involvements the Commission established a "cut-off" date, which originally was the day before a prior-filed application was either granted or designated for hearing. Due to the time necessarily consumed in the mechanics of processing at the Commission, this method could potentially prolong indefinitely the time for hearings. For example, an application might have undergone its processing and be on the verge of grant (or, if there were two pending, on the verge of comparative hearing) when a late-comer would file. Such a late-comer must go through the mechanics of processing before any application for that channel could be heard; and so on indefinitely. Therefore the Commission, on April 9, 1959, announced an amendment to its regulations *fn4 which instituted a new system. Under this system the Commission periodically publishes a list of applications that are near the top of the processing line. At the same time it announces a date, at least thirty days from publication, by which competing applications must be filed if they are to receive comparative consideration with any application on the list. The cut-off date thus established is an alternative to the cut-off date under the old system, the effective date being the earlier of the two. A pending application is said to achieve "protected status" when the applicable cut-off date has arrived.

In the case at bar the Commission published its initial list of cut-off dates on April 9, 1959, the day it adopted the new regulation. On that list the application of Radio Atascadero was listed, to achieve a protected status on May 15, 1959. In its original form the application of Radio Cabrillo, appellants ...

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