In Re Applications of MIDWEST RADIO-TELEVISION, INC. For Renewal of Licenses of
Stations WCCO and WCCO-TV, Minneapolis, Minn.
Docket No. 18499 File No. BR-659 File No. BRCT-49
FEDERAL COMMUNICATIONS COMMISSION
24 F.C.C.2d 625
RELEASE-NUMBER: FCC 70-769
July 31, 1970 Released
Adopted July 15, 1970
BY THE COMMISSION: COMMISSIONER JOHNSON DISSENTING AND ISSUING A STATEMENT IN WHICH COMMISSIONER BARTLEY JOINS; COMMISSIONER H. REX LEE DISSENTING.
[*625] 1. By Order (FCC 69-261, 16 FCC 2d 943), released March 21, 1969, the above-captioned applications were designated for evidentiary hearing on issues to determine: (a) whether Midwest Radio-Television, Inc. (Midwest) and its owners have an undue concentration of control of the media of mass communications in the Minneapolis-St. Paul area; (b) whether or not Midwest has used its position in the newspaper field so as to obtain rights to broadcast sporting events, particularly in the area of professional baseball, football and hockey teams; (c) whether or not newspaper ownership of broadcast facilities in the Minneapolis-St. Paul area has resulted in reciprocal advantages to Midwest to the disadvantage of competing broadcast licensees; and (d) whether a grant of Midwest's license renewal applications would serve the public interest. Thereafter, on April 23, 1969, a Specification Order (FCC 69-373, 17 FCC 2d 290) was released, which particularized the scope of the designated issues and which amended the media [**2] concentration of control issue to include a geographic area extending beyond Minneapolis and St. Paul. n1
n1 By Memorandum Opinion and Order (FCC 69R-330, 18 FCC 2d 1011) released August 7, 1969, the Review Board added a hearing issue to determine whether the past programming of Stations WCCO and WCCO-TV, particularly with regard to public service programming, was of such high quality as to constitute a countervailing factor in the resolution of this case insofar as it relates to the designated issues (b) and (c).
2. Presently before us are the following pleadings: (a) a petition for reconsideration and grant without hearing filed August 25, 1969, by Midwest; (b) oppositions filed January 6, 1970, both by the Chief, Broadcast Bureau (Bureau), and by Hubbard Broadcasting, Inc. (Hubbard); (c) a reply the supplements thereto filed February 20, and March 5, 1970, by Midwest; (d) a petition requesting an opportunity to present oral argument with respect to its petition for reconsideration and grant without hearing, filed February 20, 1970, by Midwest; (e) an opposition to the petition for oral argument filed [*626] March 4, 1970, by the Bureau; (f) a memorandum in support of oral argument [**3] filed March 4, 1970, by Minneapolis Star and Tribune Co.; and (g) a reply filed March 16, 1970, by Midwest. Also before us is the recommended report (FCC 70M-838, released June 18, 1970) of Hearing Examiner Herbert Sharfman, which was prepared pursuant to our direction. n2
n2 See our Order, FCC 70-445, 22 FCC 2d 897, adopted April 28, 1970.
3. One matter, we believe, warrants clarification at the outset. Throughout this proceeding, and in its pleadings now before us, Midwest seems to suggest that the information before us at the time we designated its license renewal applications for hearing was insufficient to order evidentiary hearings and that, apparently, our determination to set this proceeding for hearing was based solely on the fact that the WCCO stations are owned by newspaper interests. We disagree. Contrary to Midwest's belief, when we designated this proceeding for evidentiary hearing, we were unable to find that grants of its applications would serve the public interest, not because of its ownership structure, but because of the complaint of Mr. Garfield Clark, n3 which Midwest's response failed to refute. n4 A cursory look at the Clark complaint establishes [**4] beyond doubt that the allegations contained therein, if true, are relevant and material matters for consideration in passing upon an applicant's fitness to be a Commission licensee. n5
n3 Mr. Clark filed a statement with the Antitrust Subcommittee of the Senate Judiciary Committee in connection with its consideration of S. 1312, the Failing Newspaper Bill. In sum, Mr. Clark charged Midwest with anticompetitive practices in holding for and in obtaining the broadcasting rights to local professional sporting events because of the newspaper ownership in the WCCO stations and because of joint ownership interests of certain Midwest stockholders in both the WCCO stations and the professional teams.
n4 A letter, dated June 19, 1968, from Midwest, which was signed by Mr. F. Van Konynenburg, President of Midwest and Manager of WCCO.
n5 The Court and the Commission have long recognized that in a regulated industry, such as broadcasting, anticompetitive practices are inimical to the public good and that the Commission has both the authority and the duty, under the public interest standard, to consider the probable effect of such conduct when passing upon an applicant's qualifications to be a licensee. National Broadcasting Co., et al. v. United States et al., 31. U.S. 190 at 222 and 223. [**5]
4. In any event, this argument, in our opinion, is merely an attempt by Midwest to obscure its failure to assume the responsibilities imposed upon it as an applicant seeking renewal of its licenses. In essence, what Midwest seems to be saying is that the Commission, after being apprised of the Clark complaint, had both the responsibility and burden to establish the validity of the allegations contained therein, prior to designating this case for hearing. We find no basis for such a claim. The divisions of responsibilities imposed upon an applicant and the Commission in license renewal proceedings are clearly delineated in the Communications Act of 1934, as amended. n6 Moreover, we have repeatedly stated that it is the applicant (including renewal applicants), not the Commission, who has the responsibility for establishing that a grant of his application is consistent with the public interest and who has the burden of overcoming any allegations which prima facie indicate otherwise (T. J. Shriner, 11 FCC 2d 674, 22 RR 2d 350). For the above reasons, we conclude that our action in designating this proceeding [*627] for evidentiary hearing was a proper exercise of statutory discretion [**6] under the Communications Act of 1934, as amended, and to have done otherwise would have clearly violated the mandates of the Act, Court directives, and Commission precedent. n7
n6 Section 308(b) of the Act imposes upon applicants the duty to furnish the Commission with the appropriate information upon which a public interest determination can be made and Section 309 requires the Commission to make grants only in the public interest. Moreover, subsection (e) of Section 309 provides, in pertinent part, that the Commission shall formally designate applications for hearing when it is unable, for any reason, to find that a grant of the application would serve this statutory objective.
n7 See footnote 5, supra, and Mansfield Journal Co. v. FCC, 86 U.S. App. D.C. 102, 180 F 2d 28, where the Court held that it is contrary to the public interest to grant a license to a newspaper which has attempted to suppress competition. Moreover, compare our recent action in Chronicle Broadcasting Co. (KRON-FM and KRON-TV), 16 FCC 2d 882, reconsideration denied, 20 FCC 2d 903.
5. We will now consider Midwest's voluminous petition for reconsideration. n8 Midwest's petition is devoted, in major [**7] part, to an accumulation of material -- affidavits, deposition testimony, expert studies and reports, etc. -- pertinent to the matters specified in the hearing issues of this proceeding. Based upon this post-designation submission, Midwest submits that it has now adequately refuted the unfounded allegations of Mr. Clark; that there are presently no unresolved public interest questions posed by its license renewal applications; and that we should, therefore, terminate this hearing proceeding and grant the applications without further delay. Pointing to what they believe are certain deficiencies and conflicts in the material submitted by Midwest, both the Bureau and Hubard argue that all of Midwest's showings are susceptible to error and that, consequently, Midwest's showing should be tested in the give-and-take of the evidentiary process. n9
n8 When Midwest was initially apprised of the Clark complaint, had it submitted even a fraction of the information now relied on for reconsideration -- rather than relying solely on the Konynenburg letter, footnote 4, supra -- its license renewal application might well have faired better at the time of designation. Indeed, the undue hardship and expense required once an evidentiary hearing has been instituted, which Midwest now complains of, might have been significantly reduced, if not avoided entirely.
n9 Both the Bureau and Hubbard submit that the opportunity for cross examination in the hearing process to test the credibility of the statements and affidavits in Midwest's petition is fundamental to due process and that termination of this hearing would deprive them of this basic right. We cannot accept such a conclusion. Section 1.111 of the Commission's Rules specifically provides for petitions for reconsideration of an order designating a case for hearing, and Section 1.106 of the Rules authorizes the grant of such petitions, in the event the Commission finds that the public interest would be served thereby. Moreover, respecting due process, we do not believe that there is any absolute right to cross examination when the showing establishes that there are no substantial and material questions of fact and that grant of the applications would be consistent with the public interest as required by Section 309 of the Act. [**8]
6. We have fully reviewed the record in this proceeding in light of Midwest's petition and its related showings, n10 the numerous other pleadings in response thereto, and the Hearing Examiner's recommended report, and we believe that the public interest questions which existed at the time of our designation order have been adequately resolved in Midwest's favor and that further exploration of these matters in the hearing process would serve no useful purpose in the public interest. A brief summary of our findings and conclusions follows:
n10 We do not believe that the voluminous showing submitted by Midwest is conducive to the efficient performance of the Commission's business, and we intend to adopt procedures in the near future to limit the consideration which will be given to pleadings of this nature.
ISSUE: (A) MEDIA CONCENTRATION
7. As previously stated, we have both the duty and the authority, under our licensing powers, to consider media concentration. At the time we designated this proceeding for evidentiary hearing, we were also concerned with media concentration in the St. Paul-Minneapolis area because of the serious anticompetitive charges raised against Midwest. [**9] However, based upon all of the information now before us, [*628] we believe that the public interest would not be served by examining such media concentration in the context of the particular renewal proceeding and that, accordingly, such matters are more appropriately dealt with in general rule-making proceedings. In this regard we note that there is now a comprehensive outstanding inquiry in Docket 18110 dealing with the Commission's multiple ownership rules.
ISSUE (B): USE BY MIDWEST OF ITS POSITION IN THE NEWSPAPER FIELD TO OBTAIN RIGHTS TO BROADCAST SPORTING EVENTS
8. The circumstances surrounding the designation of this hearing issue are set forth in paragraphs 7-11 of the Specification Order (cited supra) and need not be repeated in detail here. This issue stems essentially from the above-noted statement of Mr. Clark which asserted that WCCO radio has, over the years, been awarded the broadcasting rights to local professional baseball, football, and hockey games in the Minneapolis-St. Paul area, even though its bids were lower than those submitted by other local broadcast media. WCCO's success in this respect is attributed, Mr. Clark claimed, to undue competitive advantages [**10] and practices resulting from Midwest's connection with newspaper ownership interests. According to Mr. Clark, certain influential stockholders of Midwest have ownership interests in both the local newspaper and the professional sporting teams, and such owners have improperly utilized their powers of joint ownership to influence the awarding of these broadcasting rights.
9. In its petition, Midwest restates its prior position denying these allegations. Recognizing, however, that it must respond to the issue as specified, Midwest submits that, since the designation of the proceeding for hearing, it has gathered a preponderance of evidence which shows conclusively that the Clark allegations are neither supported by facts nor evidence; that neither Midwest nor its stockholders used anticompetitive practices or other improper conduct in connection with the bidding for and awarding of the broadcast rights of the local professional teams; and that its stations have always been and continue to be operated in the public interest.
10. We have fully reviewed this multitude of information, and we agree with the Hearing Examiner, without adopting his recommended report, that Midwest has [**11] resolved this issue in its favor and that further exploration of this matter in an evidentiary hearing would serve neither the public interest nor any other useful purpose. The large number of affidavits submitted by Midwest -- not listed specifically herein, but nevertheless considered -- of team officials and other persons directly involved in or responsible for awarding the broadcasting rights for professional sporting events in the Minneapolis-St. Paul area uniformly indicate that WCCO Radio was selected over other broadcast media on the basis of a business judgment that Midwest would provide superior service. While it is true, as contended by the Bureau and Hubbard and as shown in the information submitted along with Midwest's petition, that WCCO had submitted lower bids in some instances, we believe that the principals involved in these particular contract negotiations have, by their affidavits, adequately [*629] explained the reasons why WCCO was selected. n11 Moreover, neither the Bureau nor Hubbard, in the pleadings now before us, has submitted information to corroborate their general claim that the explanations of Midwest's affiants are not supported by the record.
n11 We believe, as did the Hearing Examiner, that there is no merit to the claim that all of the Midwest showing, including the affidavits, must be rejected out of hand, merely because minor conflicts are found in some of the statements of the affiants when there is no dispute as to the major aspects of that showing. [**12]
11. Midwest next addresses itself to the additional question raised under this issue, which is whether certain stockholders of Midwest, of the professional teams and of the local newspapers have used both their powers of common ownership and their powers of the press to secure broadcasting rights for WCCO. In so doing, Midwest generally denies any improper conduct in this respect and, in support thereof, has submitted affidavits of executives of the local professional teams, of the local newspapers, and of the marketing agencies commissioned to handle the bids for such broadcasting rights. All of these affiants deny that common ownership interests or future newspaper publicity -- favorable to the teams if the broadcast rights were awarded to WCCO and unfavorable if not -- were factors which were considered by the principals charged with awarding the broadcasting rights to WCCO. To substantiate these statements, Midwest has also included affidavits and statements from the local newspaper editors, sports reporters, columnists and other newspaper employees. These affiants, without exception, deny that there is any policy or even suggestion from their superiors that they should [**13] favor any team or broadcast station by distorting the news and comment in the daily newspapers. To the contrary, the affiants indicate that in the Minneapolis-St. Paul area the broadcast media and printed media are entirely independent of each other in their operations and views; that they are actively competitive with each other; and that, consequently, the public receives a wide diversity of views and comments. n12
n12 Midwest has also submitted a three volume report which was prepared by Earle Barcus, Ph. D. (an Assistant Professor and a media expert), who is associated with the Communication Research Center, School of Public Communication, Boston University. In essence, the report substantiate Midwest's position that sporting events carried by the WCCO stations to not receive preferential treatment from the local newspapers.
12. Respecting a statement attributed to Mr. Frank Rolfes -- Vice President and an account executive of the advertising agencies handling the 1967 bids for the broadcasting rights to the Minnesota Twins baseball games - which purportedly indicated that he was advised by a person associated with the newspapers that it would be futile for Hubbard (KTSP) [**14] to bid against WCCO because of Midwest's newspaper connections, Midwest denies that such a statement was ever made by Mr. Rolfes. Midwest has submitted the affidavit of Mr. Rolfes, which disclaims any such statement as well as any personal knowledge of information indicating that the owners and/or managers of the local newspapers have suggested to their reporters or any other newspaper employees that they should favor WCCO. n13
n13 We have carefully examined the Rolfes affidavit in light of the deposition testimony of Mr. Clark and Mr. Hubbard (President of Hubbard), and we agree with both the Bureau and Hubbard that there is a conflict regarding this aspect of the record. However, viewing all the other information now before us -- some of which we have not referred to herein -- we believe that this single conflict in statements of affiants regarding an incident which took place several years ago is insufficient to necessitate explanation in hearing particularly in light of the weight of the showing submitted by Midwest, which adequately answers the serious questions posed at the time of designation.
[*630] 13. In sum, we have reviewed the record in this proceeding; the information [**15] which was before us at the time we specified this hearing issue; the deposition testimony of Mr. Clark and Mr. Hubbard, which was taken and filed after our designation order; and the voluminous information now submitted for reconsideration, and we find that Midwest has satisfactorily answered the serious public interest questions under this issue and that further exploration in the hearing process is neither warranted nor necessary in the public interest.
ISSUE (C): RECIPROCAL ADVANTAGES TO WCCO TO THE DETRIMENT OF OTHER LOCAL BROADCAST MEDIA BECAUSE OF NEWSPAPER OWNERSHIP IN BROADCASTING IN THE MINNEAPOLIS-ST. PAUL AREA
14. The circumstances surrounding the designation of this hearing issue are also set forth in the Specification Order (cited supra) and are not repeated in detail here. To some extent, this hearing issue overlaps hearing issue (b) inasmuch as it delves into certain newspaper ownership interests in the WCCO stations and the consequential effect there from. Thus, some of the material submitted by Midwest in response to this particular issue has also been relied on in its reply to issue (b). Accordingly, that information, which is related to both issues and which [**16] we have discussed previously, is not reiterated in examining Midwest's showing under this issue, except to note that we have considered and weighed it in our disposition of this matter.
15. When we designated this hearing issue, information was before us which indicated that the local newspapers having ownership interests in WCCO may have had certain policies and may have used their powers of the press to favor the WCCO stations to the disadvantage of other local broadcast media. Essentially, that information indicated that local newspapers: (a) failed to give equal listings in their TV Highlights for all local TV stations; (b) had certain policies of not mentioning the call letters of stations other than WCCO; (c) commented or editorialized unfairly regarding station programs, except for WCCO programs; (d) failed to give the same reduced advertising rates to other stations that are rendered to the WCCO stations; and (e) engaged in trade agreements, business deals, combination rates, etc., all of which were designed to favor the WCCO stations.
16. In answer to these charges, Midwest relies also on numerous affidavits from local newspaper executives, managers, editors, columnists, [**17] reporters, and other newspaper employees, all of which deny any discrimination of unfair trade practices on the part of the printed press in the Minneapolis-St. Paul area. The affiants who are responsible for the composition of the daily TV and radio listings have uniformly stated that such listings are made on the basis of news judgments and not upon any concerted policy to benefit the WCCO stations. Those who are responsible for determining advertising rates and the amount of advertising devoted to a particular broadcast program likewise indicate that the newspapers do not discriminate and that determinations in this respect are based solely upon business judgments. The columnists and reporters also state, without exception, that their views are not influenced by newspaper policy or management, [*631] but are solely personal comments and views, which they deem worthy of being printed.
17. Midwest in this regard also relies to a great extent on the Dr. Barcus study and report which was previously mentioned. Without setting forth the details of that report, which was nevertheless considered by us, Dr. Barcus has concluded the following: (a) that there seems to be no evidence of any [**18] consistent pattern of bias toward or any undue attention given to the WCCO stations by the local newspapers; (b) that, in TV listings, the Minneapolis-St. Paul newspapers do not seem to present disproportionate listings favoring a particular local broadcast station when compared with listing in newspapers in other major cities; (c) that there is no specific pattern in the Minneapolistions; (d) that the local newspapers do not appear to be slanted in commenting and reporting on TV and radio programs in the Minneapolis-St. Paul area; (e) that the newspapers and the WCCO stations do not appear to carry disproportionate amounts of advertising for each other; and (f) that there seems to be no evidence of any preferential combination rates, reciprocal agreements, business deals, etc. between the newspapers and Midwest reflecting discriminatory policies or practices.
18. We believe that the above noted affidavits, and others not mentioned but considered, submitted by Midwest have satisfied our concern regarding the existence of any anticompetitive reciprocal agreements in favor of the WCCO stations. Of more moment, we believe, are the independent studies of Dr. Barcus which have corroborated [**19] the statements of those affiants and which neither the Bureau nor Hubbard has refuted with any countervailing probative information. n14 Accordingly, we find that Midwest has satisfactorily answered the serious public interest questions under this hearing issue and that further exploration of this matter in the hearing process would serve no useful purpose.
n14 We have carefully reviewed the record regarding certain alleged discriminatory incidents of reporting in the Minneapolis-St. Paul newspapers, which the Bureau and Hubbard note. We believe that Midwest has adequately explained these isolated incidents and we find no reason to believe otherwise, particularly in the absence of probative information to the contrary which neither the Bureau nor Hubbard has submitted.
19. The hearing issue which the Review Board added to this proceeding to permit Midwest to make a favorable showing of its past programming record, footnote 1, supra, is related to and dependent upon the ultimate resolution of Issues (b) and (c) in this case. In the light of our disposition of Issues (b) and (c), exploration of Midwest's programming record is unnecessary, and this issue is [**20] deemed moot. Finally, for the reasons set forth herein we are convinced that Midwest's showing warrants a finding on the ultimate issue that grant of Midwest's renewal applications will serve the public interest, convenience, and necessity.
20. Accordingly, IT IS ORDERED:
(a) That the petition for reconsideration and grant without hearing filed August 25, 1969, by Midwest is GRANTED.
[*632] (b) That the applications for renewal of license of Station WCCO and WCCO-TV, Minneapolis, Minnesota (File Nos. BR-659 and BRCT-49, respectively), ARE GRANTED;
(c) That the Petition for oral argument filed February 20, 1970, by Midwest IS DISMISSED as moot; and
(d) That this proceeding IS TERMINATED.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
DISSENTING OPINION OF COMMISSIONER NICHOLAS JOHNSON IN WHICH COMMISSIONER ROBERT T. BARTLEY JOINS
The Federal Communications Commission votes 4 to 3 today to terminate a hearing and thus renew without further inquiry the licenses of WCCO-AM-TV, Minneapolis, Minn. On March 21, 1969, the Commission designated WCCO for evidentiary hearing on specified issues after charges of "misuse of concentration of communications media" were [**21] made against the stations. Despite today's approval of WCCO's massive petition for reconsideration of the hearing designation, the essential questions of misuse involved here remain unresolved. The parties, the Hearing Examiner, and the Commission's own staff all agree that many factual questions are left unresolved. In effect, we haven't much more of an idea today about what the real facts are than when we began this proceeding 16 months ago.
Midwest Radio-Television, Inc., licensee of the stations, contends that the mass of written information it submitted would resolve, in its favor, all substantial questions presented by its renewal applications and that, therefore, no useful purpose would be served by continuing the proceeding into hearing. I dissent.
To satisfy the requirements of the designated hearing, WCCO has a heavy duty to resolve all key issues -- a heavy duty that I believe WCCO has woefully failed to meet. The Commission's action does not comport with Sec. 309(d) of the Communications Act of 1934 as the courts have come to interpret it and may also be an unduly permissive interpretation of Secs. 1.106 and 1.111 of the Commission Rules.
The Commission's staff [**22] as well as Hubbard Broadcasting, Inc., of St. Paul (the complaining party and licensee of KSTP-TV) all opposed Midwest's petition, arguing that such serious questions should not be resolved on the basis of one party's written pleadings to the exclusion of the other side's rights in the hearing process. The Commission's 4-3 vote today cuts short the sine qua non of our adversary process: Cross-examination. I do not comprehend how this case can be resolved properly without a hearing. WCCO's hundreds of pages of petition have not been subjected to impeachment by anything even approaching meaningful cross-examination. What apparently has happened in this matter since the Commission set WCCO-AM-TV for hearing is something akin to an old-fashioned Upper Midwest blizzard: WCCO has so snowed the Commission with such an extraordinarily volumious petition for reconsideration (seven volumes consisting of more than 1,000 pages) that every aspect of the case has [*633] literally been lost under a blanket of white paper. Nearly everything has been smothered, including some key facts.
In a way, the majority's decision is understandable. In the face of such an avalanche of paper, I, too, am tempted [**23] to throw up my hands and say, "Why bother to dig our way out?"
Yet there are two very compelling reasons why the Commission should dig its way out of this avalanche:
1. The Commission's action today ignores applicable law as it has been interpreted time and again by the U.S. Court of Appeals for the District of Columbia.
2. The Commission's action today sanctions a kind of new "snowstorm syndrome." The grant of Midwest's petition on the basis of the record before us may make it all too easy for other applicants to file similar massive, untested factual assertions in hopes of avoiding the evidentiary hearing required by law.
Accordingly, I dissent for the reasons stated most recently by Circuit Judge Tam, concurring, in Hale v. F.C.C. [KSL], No. 22,751 (D.C. Cir., Feb. 16) 1970), and also for reasons stated in numerous other Federal court decisions, including Marine Space Enclosures, Inc., v. F.M.C., 420 F. 2d 577 (1969); F.M.C. v. Svenska Amerika Linien, 390 U.S. 238, 244 (1968); United Church of Christ v. F.C.C., No. 19,409 (D.C. Cir. June 20, 1969), 16 P & F Radio Reg. 2d 2095 (1969); and Trailways of New England, Inc. v. C.A.B., 412 F. 2d 926 (1969).
All of these case [**24] will be considered in turn below, but no one has stated the proposition more precisely than Judge Tamm in the Commission's KSL case:
Sec. 309 of the Communications Act sets an admittedly high standard of pleading which must be met before the hearing requirement is triggered, so that frivolous opposition to license applications can be expeditiously dismissed. n15 However, I see nothing in either the language of the statute or those portions of the legislative history cited to us by the [Federal Communications Commission]... which inexorably dictates the conclusion that a party asserting the existence of an anti-competitive market structure violative of the public interest standard must allege not only the details of the concentration itself, but also evidence of specifically identifiable injuries to the general public proximately caused by the concentration. Realism compels the recognition that the ancient distinctions among 'evidentiary facts,' 'ultimate facts,' and 'conclusions of law' have always meant different things to different people in different contexts. A better approach is to acknowledge that these terms only begin the inquiry rather than conclude it... Hale v. F.C.C., [**25] supra at 12-14.
n15 47 U.S.C. Sec. 309(d)(1) (1964) provides in part: Any party in interest may file with the Commission a petition to deny any application... prior to the day of Commission grant thereof without hearing or the day of formal designation thereof for hearing... The petition shall contain specific allegations of fact sufficient to show that the petitioner is a party in interest and that a grant of the application would be prima facie inconsistent with subsection (a) of this section [which contains the public interest standard]. Such allegations of fact shall, except for those of which official notice may be taken, be supported by affidavit of a person... with personal knowledge thereof.
We begin with some background on the concentration problem in Minnesota's Twin Cities. Midwest Radio-Television became the licensee of the WCCO stations in 1952 as a result of a merger of interests between the Columbia Broadcasting System (CBS) and Midcontinent [*634] Radio-TV, Inc. (Midcontinent). Midwest at that time was 53 percent owned by the Minnesota Broadcasting Corp. (MBC) n16 and 47 percent owned by CBS. In 1954, CBS sold its 47 percent interest in Midwest to the Minneapolis [**26] Star and Tribune, which published the only two daily newspapers, the Star and Tribune, in Minneapolis. n17 Today, the only two daily newspapers in St. Paul, the Dispatch and the Poineer Press, have a substantial interest in the WCCO stations through the Midcontinent half of the conglomerate corporate structure.
n16 Midwest Broadcasting Corporation is now Midcontinent Radio-TV, Inc., which is owned equally by Northwest Publications, Inc. and by M.T.C. Properties, Inc. Northwest published the only two daily St. Paul newspapers, the Dispatch and the Pioneer Press, and the Duluth News Tribune and the Herald; is the licensee of WDSM-AM-TV, Duluth-Superior, Wisconsin; is the licensee of Station KSSS. Colorado Springs, Colorado; and owns 80 percent of the Aberdeen News Company, which publishes the Aberdeen American News and is licensee of KSDN, Aberdeen, South Dakota. Northwest also is a joint-venture in an Jose Gable TV Service, a franchise holder of Cambell and San Jose, California. Seventy-three percent of the Northwest stock is owned by Ridder Publications, Inc. (Ridder), which is controlled by the Ridder family. Ridder publishes the Grand Forks (North Dakota) Herald, the San Jose (California) Independent, the Long Beach (California) Press Telegram, the Pasadena (California) Star News, the Garden Grove (California) Orange County News, the Gary (Indiana) Post Tribune, and has a minority interest in the Seattle (Washington) Times.
n17 The Minneapolis Star and Tribune owns a community antenna system in South Sioux City, Nebraska, and owns 50 percent of Harper's magazine and the San Fernando Valley Times Co., which publishes the San Fernando Valley Times (California), the Rapid City Journal (South Dakota) and the Great Falls Tribune and Leader (Montana). The Minneapolis Star and Tribune Co. is in turn owned in part (9.9 percent) by the Des Moines, Iowa, Register and Tribune, which publishes the Register and the Tribune, Des Moines, Iowa. There are also common ownerships linking the Des Moines Register and Tribune, Cowles Communications, Inc. (CCI) and Indiana River Newspaper, which publishes the Ft. Pearce (Florida) News-Tribune. CCI publishes Look magazine, Family Circle magazine, Venture magazine, the San Juan (Puerto Rico) Star, the Gainesville (Florida) Sun, the Lakeland (Florida) Ledger, the Suffolk (New York) Sun, which recently folded, the Education News, the Cowles Comprehensive Encyclopedia, and Magazines for Industry, Inc. (Paperboard Packaging Magazine). [**27]
The possibility that the Twin Cities' four major daily newspapers, through their joint ownership of the WCCO stations, might be abusing their concentration of media power first came to the attention of official Washington in March 1968. The manager of a WCCO competitor, Garfield Clark of Station KSTP, St. Paul, Minnesota (licensed to Hubbard Broadcasting), alleged abuse by WCCO in a statement filed with the United States Senate's Antitrust Subcommittee, which was then hearing testimony on the proposed Failing Newspaper Act (S. 1312). Mr. Clark alleged that the WCCO stations, over the years, had been awarded broadcasting rights to the Twin Cities' professional sporting events because of pressure exerted by the joint newspaper, broadcasting, publishing, and financial interests behind WCCO on the area's professional football, baseball, and basketball teams.
By order released March 21, 1969, the Commission voted 4 to 3 to designate the WCCO renewal applications for hearing to determine, among other matters, whether Midwest had used its position in the newspaper filed to obtain rights to broadcasting professional sports and whether the joint ownerships and media concentration in the [**28] Twin Cities had allowed advantages to flow to Midwest to the disadvantage of other Minneapolis-St. Paul broadcasters. Midwest Radio-Television, Inc., 16 F.C.C.2d 943 (1969).
If anticompetitive practices are eventually shown, of course, it is clear that the Commission has the power and the duty under the general public interest standard to take such conduct into account in [*635] determining the qualifications of possible licensees. The Courts and the Commission have long recognized this. National Broadcasting Co. v. United States, 319 U.S. 190, 222-223 (1943).
By Order of April 28,1970, 22 F.C.C. 2d 897 (1970), the Commission delegated Midwest's massive petition for reconsideration and related pleadings to a Hearing Examiner and directed him to analyze the data and then to prepare a recommended report of the factual showings. In response, Examiner Sharfman issued a recommended report declaring that the issues should be resolved in Midwest's favor and the hearing should be terminated. Recommended Report of Hearing Examiner Herbert Sharfman, F.C.C. 70M-838, June 18, 1970.
The Commission staff and three Commissioners would have reversed Examiner Sharfman, and for good reason. [**29]
Examiner Sharfman emphasized the speed with which he had to prepare his 109-page report in order to comply with the Commission's request for prompt action. The Examiner called this "the pressure of 'expedition.'" Id. at 104.
Consider two passages from Examiner Sharfman's conclusions:
I may be doing the [Broadcast] Burau a disservice. Perhaps it has a vast store of potential evidence which would appall Midwest if it knew about it. But somehow I doubt it. The pleadings gave no indication of such a cache... Whatever private reservations I might have about the kindliness of the Ridders and Cowleses -- after all, one does not become a press lord without pressing a few peasants -- I must restate my belief that the statements Midwest has garnered, for instance to the effect that they have exerted no improper pressure to secure broadcast rights, would be proof against impeachment. Id. at 107-108.
And an earlier passage from the same conclusion:
It will have been noted that I did not proceed by taking each specification and expressing a ruling on the order of "Resolved" or "Not Resolved." I do not think that issues can be "resolved" by pleadings containing hearsay declarations [**30] by definition; the affidavits are always subject to a general decrial, as the Bureau, for one, has uttered here, because they have not been tested in cross-examination. For that reason alone nothing has been "resolved," and certainly not in the sense that the opposing parties have composed their differences and if not content, at least feel that litigation will be unduly annoying. I have preferred to proceed somewhat like a judge passing on a motion for summary judgment - to see whether there "is [a] genuine issue as to any material fact and [whether] the moving party is entitled to a judgment as a matter of law," FRCP 56c... Id. at 105. (Emphasis supplied.)
The usual rule for a motion for summary judgment, or, as here, for consideration of a petition for reconsideration and grant without hearing, is that all doubts are to be resolved against the petitioner (WCCO). U.S. v. Diebold, Inc., 369 U.S. 654, 655 (1962). The Examiner has done exactly the opposite here. The very tentativeness of the Examiner's language (his emphasis on "the pressure of 'expedition'" and statements like "somehow I doubt it") convincingly display that it is not so clear that WCCO's showing is so overwhelming [**31] as to warrant the denial of the opponents' right to cross-examination and to submit rebuttal evidence.
In addition to the allegations about the Twin Cities' dailies and their refusal to play ball with the cities' professional sport teams if WCCO did not receive the lucrative broadcast contract rights, I have set out in the margin n18 details of this and other conflicting assertions involved in this proceeding.
n18 The Commission staff has listed these unresolved conflicts (and suggesting there are others):
(a) There are conflicting assertions concerning what transpired at a meeting between the principals of the professional teams, of the newspapers, of the broadcasting stations and of the advertising agency regarding the award of broadcast rights for the Twin Cities baseball team, the Minnesota Twins. Hubbard Broadcasting contended that statements were made by a principal of the advertising agency (Rolfes, a vice president of Campbell-Mithum, the local advertising agency for Hamm's Beer, the latter being the sponsor of the baseball games) that it would be futile to bid for the broadcasting rights of the Minneapolis baseball team because the local newspapers let it be known to the owners of the team that unless WCCO was awarded such rights, the newspapers would no longer play ball with the team. Rolfes and all the other principals who attended this meeting deny that such a statement was made or even implied.
(b) There are conflicting statements regarding the failure of the Minneapolis newspapers to carry in their TV listings of Sept. 21, 1969, the AFL professional football game presented on KSTP-TV for that day. Hubbard Broadcasting contend that the newspapers purposely omitted such listing in favor of WCCO-TV, which was broadcasting its NFL game at the same time. The officials of the newspaper, however, deny this allegation and contend that KSTP failed to notify them of what specific game it would broadcast and, consequently. the paper merely listed "football" for KSTP for that day. In response thereto, Hubbard Broadcasting denies that it did not provide specific information to the newspapers.
(c) Hubbard Broadcasting contends that there were discriminatory practices by the newspapers in that they list WCCO-AM first in their daily radio highlight listings. The newspapers, however, explain that after 1952, when it purchased WCCO-AM, it changed its format to put WCCO-AM at the top of the daily radio listings solely because of "pride of ownership" and that the KSTP order of listing was not changed, thus not amounting to discrimination against KSTP. [**32]
No matter what a full investigation might show, I conclude that the applicable law calls for the commission to be a good deal more aggressive in ascertaining the details of alleged misconduct. The Examiner seemed particularly concerned that the complaining parties here had not alleged more particular facts. It is important to recognize, as Judge Tamm did in Hale v. F.C.C. [KSL], No. 22, 751 (D.C. Cir., Feb. 16, 1970), that particular facts are often neither available or required because such parties are often at substantial disadvantages. "Information regarding the precise effects which concentration of control has on programming and service is much more readily available to the licensee than to the opponent, even if the opponent is a large competing corporation with vast resources." Id. at 15. Little wonder Hubbard Broadcasting had trouble compiling the "cache" of facts the Examiner seems to require.
In Marine Space Enclosures, Inc. v. F.M.C., 420 F. 2d 577 (D.C. Cir., 1969), the Court of Appeals reversed the Federal Maritime Commission's decision to approve without hearing an agreement containing marked anti-competitive features. In so doing the court rejected the agency's [**33] contention that the petitioners had not made sufficiently detailed allegations of factual questions to warrant a hearing by stating that "the initial papers exposed issues of substance, issues of such obvious gravity that the Commission should not in any event need prompting from private parties before it holds a hearing." Id. at 587, n. 27. "[When] the issue fairly clamors for attention," the Court of Appeals concluded, "even a gentle reminder speaks loud enough for the agency conscientiously discharging its duty." Id. at 586.
[*637] In F.M.C. v. Svenska Amerika Linien, 390 U.S. 238, 244 (19168), in a case analogous to our situation here, the U.S. Supreme Court approved the Maritime Commission's policy of shifting to an applicant for approval of a restrictive agreement the burden of demonstrating the need for anticompetitive restraints, noting by its very nature an illegal restraint of trade is in some ways "contrary to the public interest."
The more appropriate Commission stance has been suggested by the Court of Appeals in United Church of Christ v. F.C.C., No. 19, 409 (D.C. Cir., June 20, 1969), in language this Commission has paid scant attention to:
[A] "Public Intervenor" who [**34] is seeking no license... is, in this context, more nearly like a complaining witness who presents evidence to police or a prosecutor whose duty it is to conduct an affirmative and objective investigation of all the facts and to pursue his prosecutorial or regulatory function if there is probable cause to believe a violation has occurred.
These cases all suggest that facts -- not half-truths, maybes, and untested voluminous petitions -- are absolutely essential to the correct discharge of a Federal regulatory agency's mandate.
"The agency cannot be affirmed by supplying reasons and facts that it had neither found nor considered to be relevant." Trailways of New England, Inc. v. C.A.B., 412 F. 2d 926, 931 (D.C. Cir. 1969). In Trailways, the Court of Appeals ruled that the Civil Aeronautics Board cannot reject, without hearing, a bus company's request that the C.A.B. investigate whether airlines' family fares are unjustly discriminatory. Cf. Community Broadcasting Co. v. F.C.C. 274 F. 2d 753, 763 (D.C. Cir., 1960) (Burger, J.) (F.C.C. must hold "such inquiry as is needed to make comprehensive findings on all relevant factors, including, but not limited to... the question of concentration [**35] of mass media.")
It was the bright hope of the Congress, in an era when this Commission was born, that the Federal regulatory agencies would come to be watchdogs of the public interest. In the Commission's action today I do not see a watchdog at work. I see a lap dog asleep.