In the Matter of APPLICATIONS BY AMERICAN BROADCASTING COS., Inc. f/or Assignment of Licenses of Stations: WABC, WABC-FM, WABC-TV, New York, N.Y.; WLS-FM, WBKB, Chicago, Ill.; KGO, KGO-FM, KGO-TV, San Francisco, Calif.; KABC, KABC-FM, KABC-TV, Los Angeles, Calif. f/or Transfer of Control of Stations: WLS, Chicago, Ill.; KQV and KQV-FM, Pittsburgh, Pa.; WXYZ, WXYZ-FM, WXYZ-TV, Detroit, Mich. For Assignments and Transfer of Ancillary Radio Facilities
Docket No. 16828
FEDERAL COMMUNICATIONS COMMISSION
7 F.C.C.2d 336 (1967); 9 Rad. Reg. 2d (P & F) 87
RELEASE-NUMBER: FCC 67-165
February 1, 1967 Adopted
BY THE COMMISSION: COMMISSIONERS BARTLEY AND WADSWORTH DISSENTING AND ISSUING STATEMENTS; COMMISSIONERS COX, LOEVINGER, AND JOHNSON CONCURRING AND ISSUING STATEMENTS.
[*336] 1. The above matter comes before the Commission now on a Petition of the Department of Justice for reconsideration and for leave to intervene, and an accompanying application of the Department of Justice for stay, seeking reconsideration of the memorandum opinion and order, entered herein by the Commission on December 21, 1966 (herein called the Decision). There is also before us the opposition of ABC and ITT to the petition for reconsideration, and a reply by the Department to the opposition.
2. A brief review of the chronology of this proceeding is necessary to understand the present procedural situation. It appears from the Department petition that the Department learned of this proposed merger in December 1965, and began investigating it "within days." It served a civil investigative demand upon the parties and received information regarding the merger from that and other sources through April 1966. ABC and ITT tendered the subject applications for Commission approval of the proposed transfers on March 31, 1966, and these were accepted for filing on April 14, 1966. Notice of the filing of these applications was publicized by radio, television, and [*337] in the newspapers in accordance with the requirements of the statutes and rules. 47 U.S.C., section 309(d); 47 CFR, section 1.580. Our records disclose that during June 1966 the Commission sent two letters to the Department requesting the views of the Department concerning this matter. On August 18, 1966, the Commission issued its order and notice of oral hearing before the Commission en banc, in which the Commission announced a procedure whereby any party desiring to offer evidence in the proceeding might do so, ordered a hearing on all issues of law, policy, and fact, and invited any interested party to appear and be heard "with respect to any question affecting the Commission disposition of the pending applications." A copy of this order and notice was transmitted to the Department and its was published in the Federal Register on August 24, 1966. 31 F.R. 11190. On September 19 and 20, 1966, a hearing was held before the full Commission on this matter. The Department did not appear, file a statement, or give any indication to the Commission that it had any evidence or views to present regarding the matter. Moreover, it did not raise any question concerning the procedure adopted, nor did it indicate in any way that it desired a postponement of the scheduled proceedings in order to permit completion of its investigation and the preparation of evidence for presentation to the Commission. In October the Commission again advised the Department by letter that it expected to make a decision in the near future and invited the views of the Department. The Department first indicated to the Commission this it might have any views or statement regarding this matter in a letter of November 3, 1966, which stated that there was a "possibility of significant and anticompetitive effects" and suggested that the Commission defer its own decision until the Department had arrived at "final decision on the antitrust aspects of the merger." Thereafter, the Commission repeatedly urged the Department to make a more definitive statement and provide further information. On December 20, 1966, the Department wrote the Commission, stating that the possibilities of anticompetitive consequences from the merger "seem sufficiently speculative that we are not presently contemplating acting under the antitrust laws to enjoin consummation of the merger," but that these possibilities deserve full and serious consideration by the Commission in making its public-interest determination. On December 21, 1966, ITT filed a letter responding to some of the comments in the Department letter. Thereafter, the Commission adopted and issued its Decision.
3. The Department alleges as "good reason" for not participating at an earlier stage of the proceedings that it was not clear earlier that its participation was "necessary," since the Commission might have decided differently, and that its evidence was being "analyzed by the staff during the summer of 1966." But the Communications Act and the Commission rules require that any party in interest objecting to the grant of applications such as these must make his objections known to the Commission within 30 days after notice of the acceptance for [*338] filing of the applications. 47 U.S.C., section 309(d); 47 CFR, section 1.580(i). Despite this limitation, the Commission invited a statement from the Department a number of times before issuing its Decision. At no time prior to the Decision did the Department indicate any objection to the Commission procedure or any desire or willingness to submit evidence to the Commission or participate in the proceedings. The fact that the Department thought that the Commission might have decided differently or that the Department was engaged in analyzing its evidence is clearly not a reason for failure to speak earlier or a ground for reconsideration of a decision under the statute, the rules, and the precedents. 47 U.S.C., section 405; 47 CFR, section 1.106; Valley Telecasting v. FCC, 336 F. 2d 914, 118 App. D.C. 410 (1964); Springfield Television Broadcasting Co. v. FCC, 328 F.2d 186, 117 App. D.C. 214 (1964); Colorado Radio Corp. v. FCC, 118 F. 2d 24, 73 App. D.C. 225 (1941); Lee Radio, Inc., 1 R.R. 2d 300 (1963); Millers River Translators, Inc., 25 R.R. (1963).
4. As to the practical aspects of the matter, we note that under the bank merger laws many bank mergers, some larger than the merger involved here, are submitted to the Department for analysis and comment and that the Department is required to submit comment within 30 days of its first advice concerning the merger. 12 U.S.C., section 1828. We are also aware that in most business mergers, where administrative permission is not required, consummation of the merger is commonly completed in considerably less time than has elapsed here, yet the Department normally completes its investigation and analysis, makes a determination as to its position, and, where it thinks it appropriate, prepares pleadings and institutes suit in far less time than it has taken here. In our own proceedings, the Department has acted more promptly during the very period involved here. On November 9, 1966, we issued a notice of inquiry relating to computers and communications services, and on December 12, 1966, the Department submitted a letter, responsive to the notice of inquiry and stating certain views. Although this letter did not involve analysis of evidence it did contain suggestions as to procedure in a matter more complex than the present proceeding.
5. Further, a petition for reconsideration must allege the facts and evidence alleged to be relevant specifically and "with particularity." 47 CFR, section 1.106; 47 U.S.C., section 405; Valley Telecasting v. FCC, 336 F.2d 914, 118 App. D.C. 410 (1964); Southland Television v. FCC, 266 F. 2d 686, 105 App. D.C. 282 (1959). We cannot find, on the pleadings before us, that the Department has met this requirement. Indeed, the contrary is indicated.
6. From what has been said, it is apparent that if the petition before us had been filed by a private party it would be denied. However, as emphasized in our Decision, we are keenly aware of the importance of the present proceeding and have sought throughout to secure all possible assistance and information that might have any bearing on the issues. We are anxious even at this late date to know and consider [*339] what evidence the Department has relating to this matter. Accordingly, we will grant the Department's petition to intervene and will provide the opportunity for disclosure of its evidence to the Commission. However, we reiterate that our action herein is taken because of the unique status of the Department and the nature of this case, and that this action is not a precedent to be followed in any other case.
7. The Commission is of the opinion that as threshold matter it should have an opportunity to consider the "important information, not contained in the record" relating to the issues raised in the Department's petition and reply pleading, which has not yet been disclosed to the Commission. However, the Commission is also of the opinion that in the circumstances there should be no further undue delay in obtaining access to this information, and, specifically, that no further lengthy time period should be required for preparation or analysis of the Department's case. See paragraph 2. Accordingly, we shall enter an order which permits all relevant and material information to be filed with us promptly, and affords us an opportunity to consider what is filed and thereafter take such action or follow such procedure as seems appropriate. In view of the history and posture of this proceeding, we will act promptly when filings have been completed, and we will require that all parties to this proceeding act promptly and observe the deadlines we establish.
Accordingly, it is ordered that:
1. The Department of Justice, Antitrust Division, is permitted to intervene and is hereby made a party herein.
2. On or before February 15, 1967, the Department shall file (in duplicate) with the Commission and serve on other parties hereto a specification of the precise matters raised by its petition and reply, upon which it is relying, including copies of all exhibits and documentary evidence, and a statement of the names, addresses, and identities of any witnesses it is prepared to call to present testimony on such matters together with a statement of the testimony which each witness is expected to give.
3. On or before February 23, 1967, the applicants shall file with the Commission and serve on the Department all documentary evidence and information which they deem relevant or material to the matters specified above or the material filed by the Department, and a statement of the names, addresses, and identities of any witnesses they are prepared to call to present testimony on such matters together with a summary of the testimony which each witness is expected to give.
4. Following the filing by applicants, if the Department believes that any rebuttal evidence is required by the filings of applicants, it shall so state in writing filed with the Commission and served upon applicants on or before February 28, 1967, and it shall file copies or statements of such rebuttal evidence on or before March 6, 1967, in the same manner and set forth with the same specificity and particularity as required by the preceding paragraphs of this order.
[*340] 5. The Commission will promptly thereafter take such action or enter such order providing for further proceedings as it may deem appropriate in the light of the material that has been filed and the entire record herein.
6. The order of the Commission herein of December 21, 1966, is stayed until the Commission has acted upon the request for reconsideration or otherwise ordered.
The Commission en banc, all Commissioners present and participating, adopted this order on February 1, 1967, Commissioner Bartley dissenting with statement, Commission Cox concurring with statement, Commissioner Loevinger concurring with statement, Commissioner Wadsworth dissenting with statement, and Commissioner Johnson concurring with statement.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
STATEMENT OF COMMISSIONER KENNETH A. COX
i concur in this action with respect to the petition for reconsideration filed by the Department of Justice though not with much of the language in the order. I would have preferred to meet the issue more directly by ordering an expedited hearing on the broad issues invoved in the case, and am, therefore, in essential agreement with Commission Bartley's position. Indeed, it has been my view since last July that this important matter required consideration in a full evidentiary hearing, although I acquiesced in the abridged proceedings held last September as the best obtainable in view of the refusal of a majority of my colleagues to vote for a full hearing.
I find myself again in much the same position. I believe the Department of Justice -- though belatedly and not as fully as might be desired -- has provided a substantial added showing of need for a full hearing, and I, therefore, urged that such a hearing be ordered at [*341] this time. However, the Commission was so divided that it appeared we could not agree on any affirmative action, and that the Department's petition would fail simply for want of effective agreement which would move this proceeding forward. I considered such an outcome intolerable and, therefore, agreed reluctantly to the interim step we are now taking. I would simply urge my colleagues to remember that the Department is still not required to prove its case at this point, but merely to particularize the evidence it would propose to offer in a hearing on the merger. This showing -- including, I would assume, an indication that it would have to rely heavily upon cross-examination of officers and employees of ABC and ITT -- will, I am confident, not only demonstrate the need for a hearing but also assist us in formulating the issues for such a further proceeding. In other words, I am hopeful that our further consideration will lead us, without much additional delay, to the exploration of the evidence on the important issues involved in this transaction in a full evidentiary hearing.
In view of the further developments in this matter, I do not propose to issue the statement "setting forth my views at greater length" which my dissenting statement attached to the memorandum opinion and order of December 21, 1966, indicated I was planning to write. I do not think it would serve a useful purpose at this point, and I hope that there may be no need further to expound the differences that separated us last December.
CONCURRING STATEMENT OF COMMISSIONER LEE LOEVINGER
As a matter of law and principle I believe that the position set forth in the dissenting statement of Commissioner Wadsworth is clearly right. The Department of Justice and the Antitrust Division should stand and speak plainly against all attempts to influence the adjudicatory process by any means other than the prescribed process of law, and should not appear to acquiesce in, encourage, or employ such means. However, practical and procedural considerations and the unique circumstances of this case compel the conclusion that the Department should now belatedly be required to make the offer of proof that it should have made voluntarily long ago. Accordingly, I vote for and concur in the Commission order on petition for reconsideration.
PETITION FOR RECONSIDERATION OF ITT-ABC MERGER
We have before us a Department of Justice petition for stay and reconsideration of the Commission's decision of December 21, 1966, approving the merger of the American Broadcasting Cos., Inc. (ABC), and International Telephone & Telegraph (ITT).
I dissented to the approval of that merger because of the inadequate procedures followed by the Commission in evaluating the application, the failure of the parties to come forward with convincing evidence to document their rationale for the merger, and the substantial unresolved questions involving public harm from the merger. The substance of that dissenting opinion is relevant to the issues before us now, and I incorporate it here by reference, without further attempt to repeat its analysis.
The Commission has voted to stay the effective date of the merger indefinitely ("until the Commission has acted"), and to reconsider its December 21 decision -- at least until it enters "such order * * * as it may deem appropriate in the light of the material that [is to be] * * * filed" in accordance with its invitation to the Department of Justice and the parties. Thus, both threshold requests of the Department of Justice have, in effect, been granted.
However, my concurrence in this action is qualified. Although I believe the Commission's action today to be unwise and unfair, it is at least consistent with further consideration of the case. And, although I believe there are more candid and courageous courses of action, what we do today is at least more responsible than the probable alternatives: [*344] Denial of the stay and petition for reconsideration by majority vote, or by Commission inaction. (With the dissents of Commissioners Bartley and Wadsworth, additional dissents might very well have produced a Commission without a majority for any course of action. The resuting failure to act would have defeated the stay and petition for reconsideration by default, perhaps sending the case to court on application for review by the Department of Justice.)
The wisest course for the Commission to adopt at this time, in my judgment, would be to assign the case to a hearing examiner for full evidentiary hearing on all issues, and to designate staff to prepare the case and actively represent the public interest at the hearing.
Such a course would (1) enable the Commission to conduct the type of careful scrutiny warranted by a case of this magnitude, (2) provide an opportunity to review the Department of Justice allegations and evidence (and ITT-ACB filings in response), and (3) do much to restore public confidence in the Commission's process and integrity.
If, however, at this juncture the Commission actually has no intention of ever holding a full hearing, a more candid and even constructive course is, I believe, that today adopted by Commissioner Wadsworth. For he has stated forthrightly what all must suspect: It is highly unlikely that the procedure we adopted toady will subsequently prompt the Commission to grant the hearing that the Department of Justice has requested, the hearing that is necessary to a meaningful "reconsideration" in fact.
Whatever the Department may be able to gather together during the next 2 weeks is unlikely to surpass in significance the substantial allegations of the Assistant Attorney General's letter of December 20. That letter (appended to my December 21 dissent) was given but a few minutes' consideration by the Commission, and seemingly disregarded. What reason is there to suspect the new, more voluminous filings will have any greater influence?
If the Commission ultimately is to deny a full hearing, how much better to do it today. If there is to be court review of our action, how much better to get on with it. I believe the public interest must be fully represented, but that does not mean we should ignore the parties' interests. Why promote another 5 or 6 weeks of indecision?
If, on the other hand, the Commission ultimately does decide to hold a full hearing, how much better (for the same reasons) to have done so today. The procedures which we have outlined could have been executed by an examiner. He, and Commission staff, could have provided more consistent and appropriate administration of the prescribed procedures and attention to the material to be filed, and analysis of issues, than the individual Commissioners are likely to be able to do. Thus, today's action contains within it the seeds of the infirmity of our September 19 and 20 hearing of which the Department of Justice has complained. Once again there is to be but a mere filing of papers, without a crucible where challenge and cross-examination can assure adequate representation of the public's interest.
[*345] I also take issue with the Commission's analysis of its own rules. The Commission's statement says that "a petition for reconsideration must allege the facts and evidence alleged to be relevant specifically and 'with particularity.'" In support thereof are cited a Commission rule, a section of the Communications Act, and two cases. None of these in fact lend support to the proposition for which they are cited. What the rules do say is that a petition for reconsideration, "If * * * filed by a person who is not a party to the proceeding, * * * shall state with particularity the manner in which he is aggrieved or his interests are adversely affected by the action taken * * *." Section 1.106(b). Assuming that the Antitrust Division was not a party, it has certainly complied with this requirement. Another part of the rules to which the majority may be referring is section 1.106(d)(1):
The petition for reconsideration shall, where appropriate, cite the findings of fact and/or conclusions of law which petitioner believes to be erroneous, and shall state with particularity the respects in which he believes such finding and conclusion should be changed.
This section, which specifically applies only "where appropriate," is not appropriately applied to the petition of the Department of Justice. The Antitrust Division is not suggesting that the Commission has made incorrect findings of fact or conclusions of law but rather that our procedures have been inadequate to assure reliable findings of fact or allow well-considered conclusions of law.
And the final section which uses the words "with particularity" -- so pointedly enclosed by the Commission in quotation marks -- is even less relevant to the Commission's criticism. Section 1.106(d)(2) provides:
The petition shall state with particularity the respects in which petitioner believes the action taken by the designated authority should be changed.
This, of course, the Division has done.
Without belaboring the point, I wish to disassociate myself from those portions of the Commission opinion which seem to me to strain at criticizing the Antitrust Division, and minimizing the burdens of adequately preparing a case of this magnitude. Two brief reminders may be adequate. In the last ABC merger case, In the matter of Paramount Television Productions, Inc., 17 FCC 264 (1953), 1 1/2 years elapsed from the time the case was set for hearing and the Commission's opinion issued -- and a substantial period of time was devoted to staff preparation prior to setting for hearing. (In the latest, the ITT-ABC merger case, scarcely 90 days passed from hearing to decision.) Another reminder is that of the KOB (Albuquerque, N. Mex.) and WABC (New York City) dispute, involved in the ITT-ABC case, which has been smoldering for 20 years and is not yet resolved by the majority's December 21 decision!
The Antitrust Division has explained at length in its petition that its study of this case has been going on for some time and continues at this moment. Moreover, the letter of December 20 pointed out facts of [*346] which this Commission had not previoulsy been apprised. As I have said before, I was shocked that the Commission could have approved the merger hours after receiving that letter. The Department had every reason to believe that a conscientious Commission would give extensive consideration to those revelations before approving the merger. If the Division must now petition for reconsideration, the fault lies not in its delay, but in this Commission's haste.
DISSENTING STATEMENT OF COMMISSIONER ROBERT T. BARTLEY
I dissent to the inadequate procedures specified by the Commission majority and vote for a full evidentiry hearing de novo, pursuant to section 309 of the Communications Act.
Basic to this entire case is the fact that, in my opinion, the Commission majority, from the outset, has pushed relentlessly for a hasty approval of the merger without due regard for the Commission's responsibility to develop an adequate record upon which to make a reasoned judgment on the serious public-interest questions involved.
The public-interest issues on which I believe evidence should be fully developed through an adequate investigation and a formal hearing by the Commission are set forth in my statement with the Commission's order of August 17, 1966, for "oral hearing."
DISSENTING STATEMENT OF COMMISSIONER JAMES J. WADSWORTH
The petition filed in this proceeding by the Department of Justice is untimely, legally insufficient, and groundless, and the Commission's order makes no contrary finding.
The Commission has not passively awaited participation in this merger proceeding by the Department of Justice; on the contrary, [*342] it has affirmatively and repeatedly invited participation by the Department in the pre-Decision phases of this proceeding. For reasons unknown to me, the Department of Justice has not availed itself of the opportunity to participate in this proceeding (with the possible exception of a letter filed on December 20, 1966, 1 day prior to the rendering of the Commission's Decision). Yet, it now seeks to have the Commission set aside its Decision, with its petition in this regard filed virtually at the end of the statutory period provided by section 405 of the Communications Act, dealing with rehearings before the Commission.
It is quite clear to me that the Congress, in amending the Communications Act in 1960, n1 clearly intended that any objections to proposed Commission action on applications be filed in the period of time preceding Commission action. Prior to that time, the Communications Act contained a provision in section 309(c) providing for postgrant objections. That provision proved entirely unworkable from an administrative standpoint and the Congress recognized this fact in amending the statute to provide for pregrant objections. In adopting these amendments, the House Report states:
n1 H. Rept. No. 1800, 86th Cong., 2d sess., submitted June 13, 1960.
This new pregrant procedure would require the Commission to consider such petitions to deny in connection with its consideration of these applications and, whereupon an examination of the application and the petition to deny or any other pleadings before it, the Commission is not able to make the public-interest findings required, it would designate such application for hearing. We believe that these procedural safeguards will provide an adequate opportunity for proper parties to protect their interests in an orderly and logical manner without subjecting the Commission procedures to the abuses which are inherent in the present protest procedure. n2
n2 H. Rept. No. 1800, ibid.
The Committee further pointed out that the amendment to section 309 * * * is designed specifically to give interested parties an opportunity to learn of the application and to file a petition to deny as provided for by proposed subsection (d). The Department of Justice chose to disregard the procedures made available by the Congress to aggrieved parties to a Commission action.
In order to grant the Department's petition at this time, the Commission must ignore its own rules and the governing statute (47 CFR, sec. 1.106; 47 U.S.C. 405, as amended). It must disregard the record in this proceeding and ignore the facts known to it from its expertise in the field of broadcasting, a knowledge of the operation of the broadcasting industry and field of communications which the Congress assumed would be knowledge possessed by this agency upon which informed judgments could be made.
It appears to me that the Department of Justice is attempting to substitute its judgment for the expert judgment which the Congress [*343] has commanded this agency to exercise. The Department openly admits that it does not have a sufficient case to prosecute an antitrust proceeding in the courts. Yet it would throw the onus on this Commission to exercise quasi-antitrust judgments which the Commission is not authorized to make.
The Federal Communications Commission is an independent agency exercising legislative, judicial, and administrative functions. It must remain so. The Department's attempt to intervene at this point in time is obviously inconsistent with the congressional purpose in establishing independent agencies such as this one, and is incompatible with our own independence, the integrity of our processes, and the principles of law that we are charged to uphold and preserve.
The public interest in the independence, impartiality, and integrity of the agency and processes of government is far greater than the disposition of any single case, no matter how large or dramatic.
As I would not compromise any of those paramount values, I would not grant any part of this petition, which, in the circumstances of this case, amounts to no less than an assault upon those values.