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08/13/82 New South Media v. Federal Communications

August 13, 1982

NEW SOUTH MEDIA CORPORATION, APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION; NATIONAL CITIZENS COMMITTEE FOR BROADCASTING, ET AL., RKO GENERAL, INC., INTERVENORS; FUTURE BROADCASTING, INC., APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION; NATIONAL CITIZENS

COMMITTEE FOR BROADCASTING, ET AL., RKO GENERAL, INC., INTERVENORS; GOLD COAST BROADCASTING, INC., APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION; NATIONAL CITIZENS COMMITTEE FOR BROADCASTING, ET AL., RKO GENERAL, INC., INTERVENORS; NEW SOUTH MEDIA CORPORATION, PETITIONER

v.

FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF



UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

AMERICA; NATIONAL CITIZENS COMMITTEE FOR BROADCASTING, et

al., INTERVENORS

Nos. 80-2556, 80-2566, 80-2567, 81-1084 1982.CDC.223

Appeal from an Order of the Federal Communications Commission.

APPELLATE PANEL:

Robinson, Chief Judge, Tamm and Ginsburg, Circuit Judges. Opinion for the Court filed by Circuit Judge Ginsburg.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE GINSBURG

These appeals are pursued by parties who would supplant RKO General, Inc. as licensee of four broadcast stations. New South Media Corporation (New South) seeks to replace RKO as licensee of WHBQ-TV, Memphis; Future Broadcasting, Inc. (Future) seeks authority to construct new stations *fn1 mutually exclusive with licenses held by RKO for KHJ and KRTH , both in Los Angeles; Gold Coast Broadcasting, Inc. (Gold Coast) seeks authority to construct a new station mutually exclusive with RKO's license for KFRC in San Francisco. Had nothing unusual occurred, the Los Angeles and San Francisco licenses in issue would have expired, at the close of their three-year terms, on December 1, 1980, and the Memphis license would have run its course on August 1, 1982. *fn2 Prior to those dates, RKO would have filed license renewal applications and competing applications could have been presented. *fn3 The Federal Communications Commission (FCC or Commission) would then hold comparative hearings to determine which of the rival applicants would best serve the public interest. See 47 U.S.C. ยง 309(e); Ashbacker Radio Corp. v. FCC, 326 U.S. 327, 90 L. Ed. 108, 66 S. Ct. 148 (1945).

But something extraordinary did occur. After proceedings that originated in 1965, in companion orders released June 6, 1980, a sharply divided FCC disqualified RKO as licensee of three of its sixteen broadcast stations: WNAC-TV (Boston); KHJ-TV (Los Angeles); and WOR-TV (New York). RKO General, Inc. , 78 F.C.C.2d 1; RKO General, Inc. , 78 F.C.C.2d 355; RKO General, Inc. , 78 F.C.C.2d 357 (4-3 decisions). Thereafter, in the opinion and order before us for review, released November 26, 1980, the Commission decided to hold non-comparative evidentiary hearings to determine what action, if any, it should take against RKO's remaining thirteen stations. RKO General, Inc., 82 F.C.C.2d 291.

Rather than wait for each license term to expire in the ordinary way or call for early applications for renewals of RKO licenses not then close to expiration, both courses that would have opened the door to competing applicants, the FCC settled on another mode of proceeding. It reopened prior renewals. Those renewals, granted without challenge or hearings in the years 1977-1979, had been expressly conditioned on the outcome of the Boston, Los Angeles, and New York proceedings. 82 F.C.C.2d at 295 n.14. The Commission recognized that this procedural course, in contrast to others it might have selected, would "keepthe door closed for the time being to challenges by prospective competing applicants." Id. at 296. However, the FCC concluded that "the public interest need for clear resolution of RKO's qualifications outweighs the benefits of possibly having a choice of applicants at this stage for these 13 licenses." Id. at 310.

In the noncomparative proceeding the Commission ordered, RKO would be "permitted to present mitigating evidence," including but not limited to "evidence of meritorious programming on a station-by-station basis." Id. at 310, 318. The proceeding was to abide completion of "all court appeals in the Boston, New York, and Los Angeles cases." Id. at 318.

The court appeals have now been completed. This court, on December 4, 1981, affirmed the disqualification of RKO as a licensee of WNAC-TV in Boston, but held that KHJ-TV (Los Angeles) and WOR-TV (New York) must be treated in the same manner as RKO's other thirteen stations. RKO General, Inc. v. FCC, 216 U.S. App. D.C. 57, 670 F.2d 215, cert. denied, 456 U.S. 927, 102 S. Ct. 1974, 72 L. Ed. 2d 442 (1982). The Commission had supplied three independent grounds for disqualifying RKO in the Boston case; it concluded that the company had engaged in anticompetitive practices, knowingly filed false financial statements with the Commission, and lacked candor in its dealings with the FCC. Our decision rejected the first two grounds. "We affirm[ed] the Commission's decision that RKO lacked candor [in the Boston proceeding], but on a quite narrow ground that cannot automatically be applied to any other proceeding." 670 F.2d at 218.

In light of our opinion in RKO General, we ordered the Commission in the case at hand to inform the court whether it "still plan[ned] to hold a separate [noncomparative] proceeding for the designated thirteen stations, or whether it is now prepared to proceed in the context of license renewal proceedings." We further directed that, "if the FCC's position is unchanged, both sides should be prepared to address the question whether deferral of consideration of new applications for the stations is justified." New South Media Corp. v. FCC (Order filed December 4, 1981). *fn4

Despite this court's rejection of "most of the grounds that the FCC used to justify its denial of RKO's license renewals," 670 F.2d at 218, and the passage of time, which has brought all thirteen licenses beyond or very close to the end of their three-year terms, *fn5 the FCC adheres to its position that no competing applications for RKO's licenses should be entertained at this stage and that it should proceed, as planned, to a noncomparative hearing on the reopened 1977-1979 license renewals. We conclude that it is no longer reasonable, in view of the relevant statutory, judicial, and agency guideposts, to close out prospective competitors. Without purporting to direct the particular mode in which the Commission should now proceed, we vacate the order here under review to the extent that it suspends the right to file competing applications. I.

We set out below, preliminary to our discussion of pertinent decisional guideposts, the participants in this appeal and principal features of their respective positions.

New South Media Corporation

New South, prospective competitor for RKO's Memphis television station, relies on a brief filed months before this court's RKO General decision. Three of its arguments have been overtaken by that decision. New South argued that immediate revocation of all RKO's licenses is the only appropriate sanction because "there is no basis in logic or in fact to conclude is any better qualified [than it is in Boston] wherever it is a licensee." Brief for Appellant and Petitioner New South Media Corporation at SA-2. *fn6 Further, New South maintained, the Commission failed to distinguish on any non-arbitrary basis between the two television stations (in Los Angeles and New York) denied renewal on the heels of RKO's disqualification in Boston, and the thirteen other stations. In addition, New South ...


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