In Re Applications of WFMY TELEVISION CORP. (WFMY-TV), GREENSBORO, N.C. For Renewal of Broadcast License; GREENSBORO TELEVISION CO., GREENSBORO, N.C. For Construction Permit
For New Television Broadcast Station
File No. BRCT-69; File No. BPCT-4303
FEDERAL COMMUNICATIONS COMMISSION
33 F.C.C.2d 857
RELEASE-NUMBER: FCC 72-82
March 2, 1972 Released
Adopted January 26, 1972
BY THE COMMISSION: CHAIRMAN BURCH CONCURRING AND ISSUING A STATEMENT; COMMISSIONER BARTLEY CONCURRING IN THE RESULT; COMMISSIONER JOHNSON DISSENTING AND ISSUING A STATEMENT; COMMISSIONER H. REX LEE ABSENT; COMMISSIONER WILEY DISSENTING.
[*857] 1. We have before us for consideration: (a) the application of WFMY Television Corp. (WFMY) for renewal of license of television broadcast station WFMY-TV, channel 2, Greensboro, North Carolina; (b) the application of Greensboro Television Company (Greensboro) for a construction permit for a new television broadcast station to operate on channel 2, Greensboro, North Carolina; and (c) a "Joint Petition for Approval of Agreement", filed May 28, 1971, by WFMY and Greensboro. n1
n1 On July 15, 1971, the attorneys for WFMY also submitted a Memorandum of Law in support of the joint petition.
2. The joint petition seeks Commission approval for the dismissal of Greensboro's application in return for WFMY's reimbursement of Greensboro in an amount determined by the Commission to have been legitimately and prudently expended in connection with the preparing, filing and prosecution of Greensboro's application, but not to exceed $44,195. For the reasons stated below, we find that the Joint Petition for Approval of Agreement should be denied.
3. A review of our policy concerning the approval of withdrawal agreements is essential to an understanding of our action denying the present withdrawal petition. Section 311(c)(3) of the Communications Act of 1934, as amended, provides, in part, that the Commission shall approve withdrawal agreements, "only if it determines that the agreement is consistent with the public interest, convenience or necessity". We have held that in deciding whether to approve a withdrawal agreement between competing applicants, benefits and detriments to the public interest must be weighed. A substantial and obvious detriment which flows from the approval of such agreements is that [*858] the public is deprived of a choice between applicants. In the situation where the withdrawal agreement involved applicants for a construction permit, "that detriment is more than offset by the consideration that the withdrawal permits one of the several qualified applicants to bring a needed service to the public without the lengthy delay involved in the multi-party comparative hearing". National Broadcasting Co., Inc., 25 RR 67 (1963). However, where the withdrawal agreement is between a renewal applicant and an applicant for a construction permit, this offsetting benefit to the public interest does not exist because the public is already receiving a service and will continue to do so during the course of the hearing. National Broadcasting Co., Inc., supra; Cragin Broadcasting Co., 7 FCC 2d 511, 9 RR 2d 1127 (1967). Thus, we must examine the present withdrawal agreement in order to determine whether there are other countervailing public interest considerations or other unique circumstances which would outweigh the detriment to the public which would result from the loss of choice between applicants at a time when the public is receiving service and will continue to do so.
4. Initially, we note that petitioners assert that approval of the withdrawal agreement would serve the public interest in that it would eliminate the need for a protracted comparative hearing which would unnecessarily burden the Commission and its staff and would require WFMY to spend substantial funds in connection with the preparation and prosecution of its application through the hearing process. It is also contended that if a hearing is required, the management and staff personnel of station WFMY-TV would be diverted from their normal activities in order to prepare and participate in the hearing and that this would be detrimental to the station's ability to continue to serve the public. We are unable to conclude that these considerations, which are directed, in part, to the private interest of WFMY are of sufficient weight to offset the detriment to the public interest which would result from the loss of a choice between competing applicants.
5. Petitioners allege, further, that there are unique circumstances present in this case which warrant our approval of the withdrawal petition. Greensboro states that it filed its application in November 1969, on the assumption that it would be accorded a full comparative hearing in which such factors as ascertainment of community problems, integration of ownership and management and concentration of control of media would be in issue. n2 Subsequent to the filing of its application, the Commission, on January 15, 1970, issued its Policy Statement on Comparative Hearings Involving Regular Renewal Applicants, 22 FCC 2d 424 (1970), reconsideration denied, 24 FCC 2d 383 (1970), which provided that if the renewal applicant demonstrated that its program service during the preceding license period had been substantially attuned to meeting the needs and interests of its area, and that the station's operation had not been otherwise characterized by serious deficiencies, the renewal applicant would be preferred [*859] over the competing applicant and its application would be granted. Greensboro states that the Commission's Policy Statement also indicated that the question of diversification of the media of mass communication would not be an issue in such a hearing since the Commission was of the view that diversification should be the subject of general rule-making proceedings rather than ad hoc decisions in renewal hearings. In this connection, Greensboro notes that the Commission, on April 6, 1970, issued a Further Notice of Proposed Rule Making in Docket No. 18110, 22 FCC 2d 339 which involved the divestiture of broadcast interest by commonly owned newspapers in the same market. Furthermore, Greensboro alleged that while 9t ha& raised no questions as to the substantiality of WFMY's programming service during its preceding license term, its request for an issue concerning WFMY's ascertainment of community problems had been effectively eliminated as a result of a programming amendment to WFMY's renewal application which was submitted after the Commission issued its Primer on Ascertainment of Community Problems by Broadcast Applicants, 27 FCC 2d 650, released February 23, 1971.
6. In view of the foregoing actions and the Commission's decisions in National Broadcasting Co., Inc., 24 FCC 2d 218, 19 RR 2d 634, released July 7, 1970, and Post-Newsweek Stations, Florida, Inc., 26 FCC 2d 982, 20 RR 2d 730, released November 16, 1970, approving agreements between license renewal applicants and competing applicants for the withdrawal of the competing application with reimbursement of expenses to the competing applicant, Greensboro concluded that its chances of success in a hearing had been so adversely affected by the changed conditions since its application was filed that it sought withdrawal of its application and reimbursement of its expenses.
7. As indicated above, the Joint Petition was filed on May 28, 1971, shortly before the United States Court of Appeals for the District of Columbia Circuit in Citizens Communications Center v. F.C.C., Case No. 24,471 U.S. App. D.C. , 447 F. 2d 1201, 22 RR 2d 2001, decided June 11, 1971, held the Commission's Policy Statement to be invalid. In their July 15, 1971, Memorandum of Law, the attorneys for WFMY, the renewal applicant, argued, however, that the Court's reversal was only procedural in nature, in that the Court determined that the hearing procedure set forth in the Policy Statement did not accord a competing applicant a full hearing on its application as required by section 309(e) of the Communications Act of 1934, as amended, and Ashbacker Radio Corp. v. F.C.C., 326 U.S. 327 (1945). It is contended, therefore, that that decision does not deprive the applicants of the "unique circumstances" relied upon by the Commission in the National Broadcasting Co., Inc., and Post-Newsweek cases, supra, in allowing the renewal applicants to reimburse withdrawing competing applicants in those cases.
n2 In support of its contention, Greensboro points out that it filed a Petition to Designate Issues for Hearing which requested that issues be specified concerning WFMY's ascertainment of community problems and the common ownership by WFMY's parent corporation, Landmark Communications, Inc., of the only VHF television broadcast station and the only daily newspaper in Greensboro.
8. We have recited petitioners' contentions at some length, but the short answer is that we have now returned to the controlling principle of the 1963 National Broadcasting Co., Inc., case supra. That principle certainly should not be set aside for the considerations set out in par. 4 -- to obviate the burden on the Commission or on WFMY. That would be true in every renewal comparative hearing, and would simply mean overruling the 1963 National Broadcasting Co., Inc., case. We decline [*860] to do so. We believe that generally the public interest is served by the policy embodied in that case.
9. We did waive the policy in the unusual circumstances of the 1970 National Broadcasting Co., Inc., and Post-Newsweek cases. We do not now hold that this area is now definitively settled in all respects. Clearly it is not, as evidenced not only by the issues raised by the Court's decision in Citizens Communications Center, but also those in the Further Notice of Inquiry, in Docket No. 19154, 31 FCC 2d 443, released August 20, 1971. It may be a considerable period of time before all significant aspects of policy in this field are definitively settled. Indeed, it may be completely settled only with the issuance of a series of decisions over a period of some years. That being the case, the crucial question now is whether we should follow the 1963 National Broadcasting Co., Inc., case at this time. We think the answer is clearly adherence to that basic decision. The new applicants are now to be afforded a full comparative hearing. See Further Notice, supra. Of course, the applicants' reliance on some point or other may turn out to be ill-founded; that was true here, for example, with respect to the survey of community needs (see par. 5 supra). However, that will usually always be the case with some significant point. The new applicant could always point to some new development, and call it a significant new factor, warranting an exception to the basic policy set out in the 1963 National Broadcasting Co., Inc., case. We therefore conclude that the new applicant must make his judgment to go forward with the full hearing in which he can advance his grounds why he should be preferred, or to dismiss, but with no reimbursement of expenses.
10. We note that Article five of the agreement specifies that if it is not approved by the Commission, then the agreement shall be null and void and the applications and related pleadings shall remain pending before the Commission. Since the possibility exists that Greensboro may decide to voluntarily dismiss its application, we shall provide that prior to our designating the above-captioned applications for comparative hearing, we will require Greensboro to file a statement of its intent within thirty (30) days of the release of this Order. In the event Greensboro does not file a statement indicating its intent to participate in further proceedings before the Commission, its application will be dismissed for failure to prosecute.
11. IT IS ORDERED, that the Joint Petition for Approval of Agreement, filed May 28, 1971, by WFMY Television Corp., and Greensboro Television Company IS DENIED.
12. IT IS FURTHER ORDERED, that unless Greensboro Television Company, within thirty (30) days of the release of this Order, files a statement evidencing its intent to participate in further proceedings before the Commission, its application will be dismissed for failure to prosecute pursuant to section 1.568(b) of the Commission's rules.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
[*861] CONCURRING STATEMENT OF CHAIRMAN BURCH
The issue presented can readily be defined. Its resolution however, is more difficult.
The issue is not whether we should overrule the basic policy set forth in the 1963 NBC case, 25 Pike & Fischer, Radio Regulation 67. In my judgment, an applicant in a renewal comparative hearing generally should not receive payment of expenses upon election to dismiss his application. Such payments would serve no public interest (see majority opinion, par. 3)and thus would simply be an area where abuses could occur. There is no basis for waiver of this policy on grounds of alleviating burdens or the evaporation of some points of reliance through amendment.
However, I fully agreed with the Commission's action permitting the payment of expenses to the dismissing challenger in the 1970 NBC (KNBC) case, 24 FCC 2d 218. In that case, confusion stemming from the WHDH, Inc., decision, 16 FCC 2d 1 (1969) had encouraged the challenge, and that confusion was settled by the 1970 Policy Statement, 22 FCC 2d 424. In the circumstances, fairness dictated that the challenger should be permitted to withdraw with reimbursement of his expenses. And while the circumstances were "unusual" as the majority notes, I, for one, was certainly prepared to extend the 1970 NBC ruling to all applicants who were similarly situated. See, e.g., Post-News-week Stations, Florida, Inc., 26 FCC 2d 982 (1970) (reimbursement again permitted because of a confused situation clarified in the designation order). n1
n1 I note that I have also been willing to permit the payment of reasonable expenses in the petition to deny situation. See KCMC, Inc., 25 FCC 2d 603, 605-06 (1970), appeal pending sub. nom Office of Communication of United Church of Christ v. FCC, Case No. 24672, C.A.D.C. This entire area of consideration in the non-comparative renewal situation is in some confusion, as shown by recent decisions. See Straus Broadcasting Co. of Atlanta, Inc., 31 FCC 2d 550 (1971); In re Mullins Broadcasting Co., FCC 72-89. I therefore welcome the inquiry to be held in this area, and, as stated in Mullins, believe that it should be concluded within a six months period.
The applicant here, Greensboro Television Company, also filed after WHDH and before issuance of the 1970 Policy Statement. It also can claim that there was confusion as to basic policies governing this situation. The issue is thus what, if anything, distinguishes this case from the 1970 NBC case.
The critical consideration is the Court's reversal of the 1970 Policy Statement in Citizens Communications Center v. FCC, 447 F. 2d 1201 (1970). For, we are no longer dealing with the 1970 NBC situation -- confusion and then a new definitive policy. Rather, we now face a period where the policies governing the comparative renewal case will be evolving. There is no question but that there must be a full hearing going into all relevant matters; there is also no question of the importance of the renewal applicant's past record and other considerations discussed in our Further Notice in Docket 19154 (FCC 71-826). But significant policy determinations remain to be made, either in legislation, overall rule making proceedings or in ad hoc decisions. I believe, therefore, that this area will continue to be subject to significant developments for some period of time -- developments which could be reasonably cited by applicants as the basis for a decision to withdraw with reimbursement of expenses.
[*862] Thus, it is no longer a matter of fairness to some few applicants caught between two developments (the 1970 NBC situation). It is now a case of continuing and evolving policy. As a practical matter, therefore, we are faced with a choice of either abandoning the general 1963 policy during this evolutionary period or adhering to it. I believe that we should follow the latter course. After all, the 1963 policy is the general one and it is sound. To abandon it for some indefinite but substantial period of time would be difficult to justify. Indeed, it might lead to complete atrophy of the policy, as we and parties become accustomed to a contrary way of proceeding.
In sum, I recognize that there are countering considerations. One of my strongest tenets is that interested parties are entitled to know the general rules of the game, particularly in important areas such as this. Where there are significant uncertainties, this is not only poor administration but gives rise to substantial equitable claims. Nevertheless, I must choose the course that best serves the public interest on an overall basis. In my judgment, that course is adherence to the general policy, and therefore I concur in the majority action.
DISSENTING OPINION OF COMMISSIONER NICHOLAS JOHNSON
I dissent for the reasons set forth in the Chairman's concurring opinion, as well as for other reasons set out below.
The Chairman describes, quite accurately, the considerations we faced in the 1970 NBC case ( National Broadcasting Co., Inc., 25 F.C.C. 2d, 218 (1970)(, when we permitted the reimbursement of expenses by the incumbent licensee to a challenging applicant who withdrew his competing application. The argument there was that our decision in WHDH, Inc., 16 F.C.C. 2d 1 (1969), had invited competing applicants who were subsequently "rebuffed" by our 1970 Policy Statement. We felt that competitors who relied on our earlier policy should not be forced to bear the burden of litigation expenses made virtually useless by the majority's change of heart in 1970. Thus, we permitted withdrawal agreements which included reimbursement of expenses.
The majority in this case seems to thinks that everything is rosy since the Policy Statement was overturned by the Court. Even the Chairman does not buy this. In his concurring opinion he recognizes that "significant policy determinations remain to be made, either in legislation, overall rulemaking proceedings or in ad hoc decisions... [This] area will continue to be subject to significant developments for some period of time."
Indeed, our decision in the Moline case, 31 F.C.C. 2d 263 (1971), a decision I continue to believe was lawless, can only be viewed as a significant deterrent to competing applications. Until Moline is reversed, we can hardly say that a competing applicant is in a position to assess, with any degree of confidence, what the Commission's policy is with regard to comparative renewals. This is a marked difference from the state of affairs following our decision in WHDH, the decision which prompted the competition in both NBC and here. The difference between the Chairman's position and mine, then, is that based on a common understanding of the current impact of recent decisions [*863] in the area of comparative renewal policy, he finds no reason to abandon our general policy of denying reimbursement agreement, while I find no reason to stray from our exceptions to that general policy.
But I would approve the agreement for other reasons as well. It is high time we reexamined our 1963 policy of not approving such agreements. The only justification for continuing that policy, so far as I can tell, is that they are subject to potential abuse. But they are subject to no more abuse than settlements in court cases involving reimbursement of attorney's fees in exchange for dismissing an action. Courts have permitted this for years, and have adequately policed these agreements, disallowing those which cannot be shown to be reasonable. There is no reason that we cannot establish procedures and criteria to separate strike applications from those filed in good faith, for purposes of reimbursement.
Obviously, our ability to make such determination is not, in itself, sufficient justification to announce a policy of approving reimbursement agreements. Aside from the kind in which equity demands approval, such agreements must only be permitted if we can conclude that the public interest will be served by approving them. As a general rule, I believe that such agreements are in the public interest. They stimulate competition for a scarce public resource, which almost definitely improves the quality of the operation of the television and radio stations involved, and thereby increases the benefit the public can expect to receive in exchange for granting the use of the resource to a private party for profit making purposes. Thus, while a policy of always approving such agreements may be subject to abuse, a policy of never approving them chills competition for a public resource, and tends to act as a protective blanket for those licensees who, for whatever reason, carry out their responsibilities with something less than an acute awareness of and service to the interests of the people they are licensed to serve.
I dissent to the Commission's action. I would approve the agreement in this case on equitable grounds, for the reasons set out in NBC and Post-Newsweek Stations, Florida, Inc., 26 F.C.C. 2d 982 (1970), and would further reverse our 1963 policy on reimbursement agreements and instruct the staff to develop criteria for making the public interest judgment necessary to evaluate these agreements.