Briefing for Commissioners
The Hearing Agenda
The General Agenda
The Safety and Special Agenda
The Common Carrier Agenda
The Personnel Agenda
The Classified Agenda
The Cable Television Agenda
The Assignment and Transfer Agenda
The Renewal Agenda
The Aural Agenda
The Television Agenda
The Broadcast Agenda
The Complaints and Compliance Agenda
For seven years I have struggled with the FCC in an effort to inject some rationality into its decision-making process and to reveal its workings to the public. There is reason enough to assert that everything the FCC does is wrong.1 But, like contributions to the literature detailing disasters in given areas of Commission responsibility, such assertions are almost universally dismissed as exaggerations.
And so it is that I have come to try to describe the agency one more time, but from a unique perspective: "A day in the life" of the Federal Communications Commission.2 The day -- Wednesday, December 13, 1972 -- was selected from the Commission's meeting days in 1972. It is neither better nor worse than any other day during the past seven years. It is typical. This article is an effort to describe what the FCC did on that typical Wednesday.
Professors and students of administrative law tend to concentrate on a particular agency decision -- usually one that has gone to the appellate courts. But a look at one day's events may well be more instructive than a close examination of a single event in determining why an agency is failing at its job or why it acts in a consistently unprincipled manner.3
The seven FCC Commissioners meet weekly, on Wednesdays,4 to vote on the items brought to their attention by the Commission's various bureaus.5 It is not clear who decides what matters will be considered. The agenda is the product of industry pressures, staff idiosyncrasies, and political judgments. If he chooses, however, the Chairman is in a position to control the flow of items to the Commission.
Most matters are not handled at FCC meetings but are delegated by the Commission to the staff for action. In theory these items are in areas of settled Commission policy but, in fact, the Commission has not so limited the scope of its delegations. During my term the majority has been unwilling to examine its delegation orders or to enunciate what standards control the delegation of decision-making authority.
* Commissioner, Federal Communications Commission, 1966-1973; B.A., 1956; LL.B., 1958, University of Texas.
** A.B., Brown University, 1968; J.D., Yale Law School, 1971. Legal Assistant to Commissioner Johnson, 1972-1973.
This article reflects the opinion and experience of one FCC Commissioner and is written in the first person. It represents the work, however, of many people. Commissioner Johnson was assisted in the preparation of the weekly agenda by his permanent office manager and economic and legal assistant, Robert S. Thorpe, and by his other legal assistant for the 1972-1973 term, Larry S. Gage, who also assisted the authors in the preparation of this article. The idea of a "dissent" to an entire Commission agenda was initially discussed with Tracy A. Westen, the Commissioner's legal assistant for the 1969-1970 term. The authors also thank Mrs. Mary Ann Tsucalas of Commissioner Johnson's staff for editorial assistance and manuscript production.
Those issues which do reach the Commissioners each week often take them by surprise. Opening a new agenda (the stack of mimeographed staff memos and accompanying recommended opinions for a Wednesday meeting) is like Christmas morning. All too often the agenda includes a long, detailed staff document dealing with a controversial and complicated matter in which: (1) numerous alternatives are presented (or excluded) after extensive staff work, (2) the proposed resolution is endorsed by all of the Commission's bureau chiefs, (3) an immediate decision is required, and (4) any alteration in the proposed resolution will mean considerably more staff work and costly delay. As a result, rational decision-making suffers.
On December 13, 1972, the Commission was presented with fifty-nine items.6 In each case the staff made a recommendation to the Commissioners. If a majority votes to approve the staff's recommendation, it adopts the proposed Commission opinion as well. If one of the Commissioners questions a particular item, there is a discussion with the staff prior to a vote. On December 13, twenty-eight of the fifty-nine items were discussed.7
Each week's agenda is divided into thirteen substantive categories: Hearing, General, Safety and Special, Common Carrier, Personnel, Classified, CATV, Assignment and Transfer, Renewals, Aural, Television, Broadcast, and Complaints and Compliance -- in that order.8
Briefing for Commissioners
In recent months the Commissioners have scheduled briefings during regular agenda meetings by each Bureau and Office on its work, resources, and problems. Such briefings often consist of a superficial review of an organizational chart or may deteriorate into a discussion of a pending case. They seldom involve consideration of any innovative changes and amount to little more than the Commissioners' collective nod toward fulfillment of their management responsibilities.
Measured by past briefings the Cable Bureau's December 13 briefing was excellent. It focused on the growth and geographic distribution of the CATV industry, developments in the industry's ownership structure, bureau backlog problems,9 reports filed with the Commission but as yet unprocessed, and bureau organization.
The Cable Bureau's Chief noted, "The trouble we are in now will only deepen." Backlogs were growing, the toughest certification cases were yet to come, and time lost due to inadequate staff could not be recouped. The Commissioners were advised that there was no staff to process and analyze the annual reports from CATV systems.10
The discussion turned to mergers within the Cable industry. The Cable Bureau saw no harmful effects from growing concentration of control within the industryll and attempted to rationalize recent mergers by analogy to companies in other communications industries which serve more subscribers than the largest cable corporation. No rule yet governs multiple ownership of cable systems by a single corporation12 and adoption of such a rule now would probably be too late.13
The Bureau presented no written recommendations on any of these issues and the Commission gave no orders, designated no one to study the problems further, and scheduled no future meetings; nothing, in short, has been done. Some of these matters will come before the Commission again only if the briefings continue and the Bureau Chief thinks it worthwhile to mention them.
Finally, the Bureau Chief and the Commissioners discussed some consulting work on Bureau resource needs performed by Harbridge House, Inc. It is common practice to pay consultants to "recommend" that an agency do what it wants to do anyway, the report being used only to convince the budgeting authority. Based on a draft report and the Cable Bureau's recommendation, the Commission proposed large increases in the Cable Bureau Budget for Fiscal Year 1974.
The Commission adjudicates formal complaints lodged against communications common carriers,17 petitions for cease and desist orders, and applications for broadcast licenses. Based on recommendations from the relevant operating bureau, the Commission may order a hearing,18 in which case the staff of Opinions and Review assumes control. If the Commission decides not to order a hearing, the appropriate operating bureau instead handles the case.19 The Commission has broad discretion in deciding whether to order hearings, though that discretion is, at least in theory, limited by the bounds of reason.
On December 13, the Commissioners acted on three Hearing Agenda items, adopting without discussion the recommendations of the Office of Opinions and Review. All three cases were quite old, having begun respectively in 1964, 1965, and 1966. Five to eight months had passed between the parties' last filing and Commission action, in each case the delay working to the advantage of some parties.
In Radio Nevada20 the Commission was asked to reconsider its earlier decision granting an AM radio license in Las Vegas to a licensee whose principal owners were operating other stations under one year probationary renewals21 as the result of earlier rule violations with respect to the operation of those stations. The Commission concluded for the second time that the probationary renewals had not cast such serious doubt on Radio Nevada's qualifications as to warrant denial of the Las Vegas application. Any probation violations could be handled in renewal proceedings for the other stations or in later action on the Las Vegas application.22 The Commission did not want to delay initiation of a new broadcast service in Las Vegas until termination of the probationary period. Thus, after seven years, Radio Nevada was able to begin constructing broadcast facilities. Time, however, had benefited the party petitioning for reconsideration -- an existing licensee for whom Radio Nevada will be a competitor.
The Commission next set oral argument for a case in which it had to choose between two applicants for a new AM license.23 One applicant proposed a new station in Jackson, Mississippi, the other an improved station in Carthage, Mississippi. Both the Administrative Law Judge and the Review Board had preferred the Carthage applicant, but after consultation with the Office of General Counsel, the staff recommended full Commission review and oral argument on two issues: (1) whether the Carthage applicant had adequately served Carthage's black population, and (2) which community had the greater need for the new station. The Commission's subsequent pro forma affirmance of the Carthage grant, even after oral argument, raises a serious question whether anything had been gained by not relying, in the first instance, on the Review Board's decision.24
In the final hearing action the Commissioners denied reconsideration of an earlier remand order in a common carrier proceeding.25 The predecessor of Hughes Sports Network had filed a complaint in 1965 alleging that AT&T's tariffs for network interconnection of television stations discriminated in favor of fulltime networks as against networks put together for special purposes.26 The Commission had earlier affirmed a finding by both the Administrative Law Judge and the Review Board that the rates were discriminatory,27 but it had remanded the case, requiring Hughes to prove its damage.28 On December 13, the Commission reaffirmed its decision and AT&T filed notice appealing this decision.29
The Hughes case illustrates a number of problems with the Commission's approach to common carrier rate regulation. The case is in its eighth year. The remand order came on a split vote, and changes in the Commission's composition may change the ultimate outcome. Further, pending resolution of the damages issue, AT&T filed tariff revisions, subject to wholly separate proceedings,30 attempting to correct its unlawful rates. The FCC could consider all of these issues in a single proceeding -- either adjudicatory or rulemaking -- but the majority chooses, instead, to consider such issues in separate proceedings.
Routine matters come first. The staff raised one such item verbally -- the appointment of the General Counsel as the FCC's representative to the United States Administrative Conference. The Commissioners approved the appointment without discussion.32 The Executive Director then briefed the Commissioners on the FCC's responsibilities under the new Federal Advisory Committee Act.33 The Commission designated the Executive Director as the Commission's Advisory Committee Management Officer with responsibility for ensuring FCC compliance.34
The Commissioners also adopted a notice of proposed rulemaking35 to elicit comments on a rule which would raise the fees the Commission charges to parties seeking action on certain applications and authorizations.36 After years of resistance, the Commission finally committed itself to a policy of charging fees sufficient to repay the agency's costs. Thus, cost increases mean fee increases. The staff drafted its proposed fee schedule during a series of inter-bureau committee meetings.
The Notice of Proposed Rulemaking raised two problems. First, the proposed fees would yield $42 million per year -- the amount sought by the Commission in its budget request. The Commissioners expressed concern that their actions would be a premature public release of the agency's budget request.37 Because they wished to begin the fee schedule rulemaking, however, the Commissioners adopted the Proposed Notice.
Second, one Bureau Chief expressed concern about cost allocation and the relationship of fees to certain services. The Commission sets fees by estimating division expenses, and although accurate cost allocation is important, in the end the FCC must make some guesses.
In another routine matter, the Commission waived some FCC equipment standards for public coast radiotelegraph stations.38 The Commission had recently begun an inquiry into the future of these stations, which are located on the seacoast and operated by common carriers to provide ship-to-shore service. Because the industry is declining, the inquiry considered whether the Commission should revise its policies. During the period of the inquiry, however, certain new equipment standards were to go into effect. Since the new standards would increase costs, the Commission issued an order "grandfathering" existing noncomplying equipment.39
In another matter that only appeared routine, the Commission authorized the resumption of tests of the Emergency Broadcast System (EBS).40 EBS is designed to provide the President access to radio and television in the event of nuclear attack or other national emergency. Emergency situations are often simulated to test the system. In 1971 one such simulation produced odd results: The "real" emergency message rather than the "test" message was broadcast, but few listeners paid attention. The FCC halted the tests in October 1971.
The Commission was concerned both because the wrong message had been broadcast and because nobody had paid any attention to it. On December 13, the Commission, assured by the staff that the system's "bugs" had been worked out and apparently of the view that nobody heeds these broadcasts in any case, decided to resume testing.
Since the majority's consideration of communications matters deemed "routine" is cursory, when the Commission passes on matters beyond its "expertise" the results can be shocking. On December 13, for example, the majority accepted the staff's analysis of an environmental question. AT&T proposed to build a 350 foot tower near a residential area in Finksburg, Maryland. Several citizens groups opposed this request and demanded that the Commission prepare an environmental impact statement before considering AT&T's request.
The National Environmental Policy Act (NEPA)41 requires the preparation of an impact statement before any federal agency approves a project that will substantially affect the environment. In Goosehollow Foothills League v. Romney,42 the federal district court for Oregon held that approval of projects such as high-rise buildings which affect the "human" or "physical" environment, must be preceded by agency preparation and consideration of appropriate impact statements. In the Finksburg case, however, the Commissioners ignored the proposed tower's effects on the "human environment" and followed the General Counsel's advice that no statement was required. Even if a statement were necessary, added the majority, AT&T had completed its own study, had found no environmental harm, and had discovered no adequate alternative sites. Yet courts have made it clear that federal agencies cannot rely upon environmental impact statements prepared by interested parties.43 The majority refused to acknowledge this well-established body of law.
The majority's treatment of the remaining items on the December 13 General Agenda raises serious questions concerning the FCC's competence to deal with complex, specialized communications questions and its capacity to engage in informed policy planning.
One of the Commission's most important functions is "spectrum management" -- deciding who can use the radio spectrum for what purposes. Historically the FCC has "managed" the spectrum by assigning parts of it to particular radio services on an exclusive or shared basis. Spectrum management rules are nationwide in application, despite geographical variations in the demand for frequencies.44 Further, spectrum allocations are difficult to alter even if use and frequency patterns demand change.45 When the Commission grants shared rights to a particular portion of the spectrum, it requires new licensees to avoid interfering with existing licensees.
In the past two years the Commission has undertaken an experiment to alter the process of spectrum management. Using Chicago as a test case, the Commission is experimenting with a regional approach. The plan involves establishing a pool of frequencies for the region and monitoring their use, resorting to systems engineering to maximize their efficient allocation. If successful, the experiment would significantly alter the Commission's organization, policies, and procedures.46
Two items on the December 13 agenda were designed to advance the Chicago Project. First, the Commission delegated greater authority over the project to the Chief Engineer.47 Second, it prescribed the procedures, criteria, and operational aspects of the project in what it calls a Second Report and Order.48
The Commissioners, however, questioned their own commitment to regionalism. Some Bureau Chiefs also alleged that regional offices might not produce work of the same quality as is currently produced in Washington. In fact, the two orders considered on December 13 had been debated extensively by staff members and the "Spectrum Commissioner."49 What emerged from these discussions was a compromise50 which offered no commitment to regionalism and even seemed to contemplate reconsidering the advisability of the Chicago Project. In view of these circumstances it is unlikely that the FCC will set a firm course for the project.
While the Commission did not act decisively on the Chicago Project, on other important matters it simply refused to act.51 Two other items also related to spectrum management were "passed over" to be considered at a special meeting which was finally held in April 1973.52 These items involved the possible allocation of part of the spectrum to a new class of citizen band radio users.53 Seven different staff papers from five different bureaus or offices accompanied these two items on the December 13 agenda. The Chief Engineer commented on spectrum allocation and the Safety and Special Radio Service Bureau discussed the licensing process involved. The Field Engineering staff spoke as the Commission's primary inspection and enforcement arm, the Executive Director spoke on budgetary impact, and the General Counsel commented on litigation.
There was considerable disagreement among the bureaus on allocating the new spectrum uses and ultimate reconciliation of their divergent views seems highly unlikely. Such problems reveal how difficult it is for the FCC to resolve important matters where numerous staff inputs are involved. The Commissioners, often the victims of staff bickering, not uncommonly agree in the end to a compromise assembled by the interested parties.
An item involving common carrier issues54 appeared on the General rather than Common Carrier Agenda because more than one bureau was involved. For years the FCC has struggled with the problem of whether a customer has the right to attach his own accessory equipment to the common carriers' communications networks. Customers prefer to use their own equipment and independent equipment manufacturers are happy to supply it, but common carriers, particularly if they own very profitable equipment manufacturers, oppose such arrangements.
The FCC has furthered the carriers' interests in this controversy by delay and selective approval of the carriers' tariffs. Tariffs describe the rates and practices which govern the services offered by the carrier. In 1968 the Commission struck down AT&T's tariffs on the ground that they were an unreasonable barrier to the connection of customer equipment.55 Bell then filed new tariffs and the lengthy review process began again. The Commission has still not resolved this matter, though the tariffs have gone into effect. Delay has obviously worked to the carriers' benefit.56
The Commission has also delayed taking affirmative action to assist customers in the exercise of their right to connect personally owned equipment. The Chief Engineer's report on that subject (recommending a program for customer-interconnection) was considered by the Commission at the December 13 meeting.57 The majority, obviously sympathetic to AT&T's interests, temporized, assuring those of us concerned about further delay that the Chief Engineer's proposals would receive consideration within thirty days. Four months later, when the Commission issued a further notice,58 no action had been taken, and it seems clear that final resolution of this question will take several more years.
A further major item on the December 13 General Agenda -- which was also passed over -- eventually took three special meetings for full consideration and only partially resolved at that point. This item, actually a series of items consolidated into one, involved many issues: allocation of spectrum, regulation of Cable and various forms of pay TV, the extent of the Commission's jurisdiction over common carrier service, and the regulation of various competing types of television program transmission. The item proposed that the Commission take several actions, each dealing with the distribution of pay-as-you-watch television-type programming, in most cases movies. The FCC had already placed restrictions upon the types of programming that could be offered for pay by the broadcasting and cable television industry.59
In a number of cities Columbia Pictures proposed the use of microwave frequencies for point-to-point transmission of movies to hotels. Viewers would pay to watch such movies in their hotel rooms while other frequencies in the system would advertise Columbia's movies and other services of interest to out-of-towners. Remaining frequencies could be rented for conventions and other purposes.
One Columbia subsidiary was already offering pay movies to hotel customers over the communications facilities of the New York Telephone Company, an AT&T subsidiary. Sterling Manhattan Cable Television, a New York City CATV system, objected and filed a complaint with the FCC alleging that the services furnished by New York Telephone to Columbia Pictures were interstate in nature and thus required FCC authorization. The Commission consolidated the Sterling complaint and the more general Columbia Pictures request into one "hotelvision" proceeding.
Finally, the Commission also had to consider whether its newly established Multipoint Distribution Service (MDS), a service which uses microwave frequencies to distribute television-type programming, was intrastate or interstate in nature. If intrastate, there would have to be state authorization before an application could be filed with the FCC.60
Confronted with these complex, interrelated matters, the FCC had little choice but to resort to rulemaking. Several bureaus had agreed upon a proposed notice of inquiry and rulemaking, but on December 13, the Commission declined to rule on the proposed notice, ordering instead a series of special meetings.
These subsequent meetings were confused and prolonged, but the Commissioners finally identified the crucial issue raised by the new technologies: Should the FCC restrict the pay operations of these technologies in the same manner as it had already restricted the pay operations of both commercial broadcasting and cable television?
The product of the special meetings was an incoherent Notice of Proposed Rulemaking,61 the purpose of which was to initiate still another proceeding to consider all the issues. In the meantime, to protect the heavily regulated cable industry from "unfair" competition, the Commission agreed to suspend its regulations where cable systems faced unregulated competition from the new technologies.62
The Commission also concluded that MDS was an interstate service,63 contrary to the staff's recommendation. The Commission permitted Columbia Pictures to use the Business Radio Service to transmit pay movies, but not to provide coverage of conventions and meetings since that would amount to common carrier communications service.64 The Commission further concluded that New York Telephone's provision of facilities to interconnect hotels was intrastate and hence not subject to FCC jurisdiction.65 This last decision, however, was carefully hedged, the Commission announcing that future developments might lead it to assert jurisdiction in this area.
The Commissioners' deliberations in this proceeding illustrate the problems inherent in FCC policy formulation. The Commission lacks data, makes no independent analysis, relies heavily on information provided by interested parties, considers broad questions piecemeal, defers to industry interests, postpones difficult decisions, hopes for compromises that the agency can ratify, and fails to anticipate major problems before they arise. Had the FCC been more prescient, it might have been prepared to handle the massive "hotelvision" problem that presented itself on December 13. Instead, the Commission simply drifted.
The majority of items on the Safety and Special Agenda fall into two major categories: petitions for rulemaking and license applications. The other items involve applications for uses which are at variance with the rules.
The Bureau could handle many of these agenda items itself if the Commission would promulgate clear policies for the staff s guidance. The Commission's delegation policies remain vague,67 however, and, as a consequence, the Commissioners labor at tasks which could be within the competence of the staff. The single item on the December 11 Safety and Special Agenda illustrates this well.
A mobile oil drilling vessel called the SEDCO 702 requested a waiver of certain FCC rules. By international convention and the Communications Act,68 cargo vessels are required for safety purposes to carry both radiotelephone and radiotelegraph equipment. SEDCO 702, despite its design, was classified as a cargo vessel but has only radiotelephone equipment. Since the vessel obviously would be useless in any rescue operation the Commission waived the radiotelegraph equipment requirement.69
Irritated by the SEDCO matter, the Commission delegated to the staff authority to act on similar requests in the future. The scope of the Commission's delegation thus typically is the result of frustration with current practices rather than a careful review of issues and bureau capabilities. SEDCO 702 exemplifies this troublesome ad hoc process.
Common carrier matters have been step-children at the FCC, where broadcasting enjoys the most attention. Commissioners find common carrier items boring and complicated.71 AT&T dominates the industry and repeatedly assures the Commissioners that all is well. Industry domination by a single, vertically integrated company72 means that the Commission generally does not receive diverse points of view necessary to the resolution of common carrier matters.
On December 13 the Commissioners considered seven substantive common carrier items. The Commission ruled on exceptions to the Initial Decision of the Administrative Law Judge in an AT&T rate case.73 It prescribed depreciation rates for the New England Telephone Company.74 It also denied petitions for a stay and reconsideration of a previous decision75 to permit Western Union to close some of its public message telegraph offices in New York City.76 The Commission granted a partial waiver of its requirement that a "beep tone" be used to warn a calling party that his telephone conversation is being recorded.77 This waiver was made available only for broadcast stations recording conversations for over-the-air broadcast.78
One of the December 13 common carrier items involved the "cutoff" procedure, one of the FCC's internal control techniques. In order to consider all competing applicants for the same authorization in a single proceeding, the Commission establishes a cut-off date (after the receipt of the first application) before which all others must be filed.79, The Commission previously had attempted to define the parameters of the new MDS service, mentioned earlier, in several obscure orders.80 Interested parties applied for authorizations, the Commission established cut-off dates, and the dates passed. Some parties, especially minority groups. heard about the new service too late to apply. Despite the confusion about the parameters of MDS, the Commission had resolved not to relax the cut-off rules.81 Logically, one would think, this confusion should have led the majority to suspend or at least extend its cut-off dates,82 but logic is rarely the prevailing consideration at the FCC. On December 13 the majority denied a Miami MDS applicant's petition to review an earlier staff decision precluding that applicant from filing for MDS service due to the tardiness of the application. The majority denied review based on a recommendation from the same staff that had issued the original ruling.83
Two items on the December 13 agenda illustrate FCC regulation of international common carriers. Western Union has a monopoly of domestic telegraph service.84 Telegraph service between the United States and foreign countries is provided by several international carriers. A customer in the interior of the United States (called the "hinterland") who wants to send an international message usually must deal with both Western Union and the international carrier. The international carriers requested that they be allowed to establish free, direct "hinterland" customer connections and, not unexpectedly, they were opposed by Western Union, which, like all monopolies, dreads competition.
The Commission's response was a Notice of Inquiry and Proposed Rulemaking. A briefing and oral argument schedule was set and the Chief of the Common Carrier Bureau met with the parties to clarify the issues.85 A subsequent notice was promised, but the matter has not been resolved.
The most important common carrier agenda item concerned Comsat, the quasi-public corporation authorized to provide international communications satellite service. Comsat receives instructions from the United States government on the position it is to take at meetings of Intelsat, the consortium of countries participating in the international satellite system. The FCC, the Department of State, the Department of Defense, and the White House Office of Telecommunications Policy (OTP) share responsibility for formulating those instructions. At issue on December 13 were Comsat's instructions for an upcoming Intelsat meeting which would consider Comsat's request to operate three new satellites for Atlantic basin traffic. Comsat's request presented three problems for the FCC. The first was procedural. Cables built by AT&T and Comsat's satellites are alternative communications facilities in the Atlantic basin. FCC consideration of AT&T's applications for new international cables involves an elaborate proceeding in which the Commission hears from all parties affected by the decision.86 In contrast, Comsat's request for an Intelsat instruction was to be decided privately, and, indeed, Comsat had not yet filed an application. A decision to instruct Comsat to press for a favorable Intelsat determination, however, would commit the Commission to approving the satellite applications when later filed.87
The second problem was whether these new satellites were needed. Controversies over building cables and satellites have been vigorous and prolonged.88 There is little agreement on how to define the need for, or even the costs of, such new facilities. The Commissioners had been briefed by Comsat on the basis of inadequate economic data. The materials before the Commissioners at the December 13 meeting failed to address traffic projections, alternative facilities, or costs, and the failures provoked a number of questions.
It became apparent, as a result of the ensuing discussion, that current needs did not require an immediate FCC decision on the need for new satellites and, indeed, that reconfiguration of existing facilities could satisfy immediately foreseeable future requirements. Further, NASA advised the Commissioners that development and construction of a new generation of higher capacity satellites would be a time-consuming and costly course.
Finally, the Commission had to determine whether it had any real alternative to instructing Comsat to seek approval of the new satellites. If the member nations of Intelsat refused to reconfigure the present facilities and firmly supported a new set of satellites, it would be difficult for Comsat to oppose going ahead -- particularly in view of the concern about United States domination of Intelsat. If the other governmental agencies participating in instruction formulation -- the Department of State, the Department of Defense, and OTP -- supported the new satellites, a contrary FCC view would carry little weight.
Their uncertainty in all these matters led the Commissioners once more to temporize. The Commission recommended instructions which could not be interpreted as a recommendation on the new satellite program, but would urge Comsat's Intelsat partners to use existing facilities efficiently.89
When Intelsat later opted for new satellites, the FCC still did not know whether they were necessary. Having failed to resolve the procedural issue, the Commission nevertheless capitulated to external pressures and granted instructions which had the effect of authorizing Comsat to go ahead with its new satellites.90
The single personnel item on the December 13 agenda was atypical: the reappointment of a former professor of mass communications who has been a valuable consultant to the Commission on proposed changes in broadcast renewal procedures.91 This matter was rushed to the Commission as a late item and was approved.92
These rules -- the product of what has euphemistically been called a "compromise" between the cable industry, broadcasters, copyright owners and the White House96 -- now allow cable systems to carry local and some distant broadcast signals and require most systems to provide free and open access channels for the public, educational authorities, and local governments.97 Before a cable system may commence operations, however, the rules demand that it receive local authorization (a franchise)98 and FCC sanction (a certificate of compliance).99 Systems which were operating,100 or were authorized to operate by local governments101 prior to promulgation of the new rules are currently less stringently regulated than new systems. All cable systems, however, will have to conform to the rules by 1977.102
The FCC's Cable Bureau is the cable industry's most vociferous advocate. Because a majority of the Commissioners are thought by the Cable Bureau to favor the broadcast industry, it is apparently of the view that it must be an advocate for the other side. Compromise no doubt results from such an adversary process, but the best solution (in terms of the public interest) may not.
The Cable Bureau's current efforts are designed to ensure that hundreds of cable system certificates of compliance pass without interference through the Commission bureaucracy. To secure the Commissioners' approval, the Bureau strategically barrages them with numerous applications. The Bureau's analyses of these applications are often very facile; minor rule waivers one week become the precedents for major infractions presented to the Commission the week following, and the Commission is frequently asked to approve certificates of compliance without adequate information.
On December 13, the Commissioners were presented with ten cable matters. The first was a request by a Manhattan company for permission to distribute sports programs to nonaffiliated cable systems in upstate New York. The applicant sought a permit to construct microwave relay facilities to connect with the upstate cable systems.
Because microwave relay is a significantly less expensive means of system interconnection than laying additional cable, the Commission permits cable operators to construct and operate "cable relay stations" (CARS), but CARS may not be licensed to relay one cable system's signals to a nonaffiliated system.103 This licensing limitation is designed to prevent cable operators from using CARS licenses to exclude competitors from the use of the relay service. The Manhattan company requested a waiver of this rule and the Cable Bureau concurred.
The Commission majority expressed displeasure with the Cable Bureau's approach, arguing that the staff had failed to demonstrate that the applicant had no other means of reaching upstate markets. As a result the Commissioners returned the case to the staff for further study.
The dialogue on this case was healthy. The Commissioners demanded justification for a waiver of the CARS rules. The majority is rarely so reluctant to relax its rules, and its reluctance in the instant case may well have resulted from the National Association of Theater Owners expression of apprehension that the interconnection of sports events might eventually lead to the interconnection of first-run movies. In any event, subsequent items on the December 13 agenda reveal that rule waivers are readily granted when only public, as opposed to industry, interests are at stake.
In another item, for example, the Cable Bureau asked Commission approval for Video International's request to initiate cable operation in certain unincorporated areas of Leon County, Florida. Since most unincorporated communities lack organized franchising authorities, they pose serious problems under the rules. The rules do not demand local franchises in such circumstances but they do demand some "appropriate authorization."104 lf there is neither a franchising authority nor other appropriate means of authorization, the FCC must determine on a case-by-case basis whether the applicant has endeavored to fulfill the intent of the regulations.105
Leon County, unlike most unincorporated communities, does have a governing body -- the County Board of Commissioners -- which could have issued a franchise to Video International. Instead, it chose to issue a "right of way" permit for which public hearings of the sort required by FCC rules governing franchises106 may not have been held. Professor Leroy of the University of Florida argued that the County Commission's refusal to issue a franchise after public hearings violated Commission rules, but the Bureau and the Commissioners were unconvinced. The majority concluded that a "right of way" permit was an "appropriate authorization" within the meaning of the rules107 -- a bizarre conclusion since the County Commission could have complied with the procedural requirements but declined to do so solely as a means of avoiding a public hearing. The effect of this ruling is that a cable system can avoid the public hearing requirement in some situations simply by obtaining a right-of-way permit.108 In short the majority offered its blessing to new cable systems which with local governing bodies purposefully choose to circumvent its rules.
The FCC tends to countenance such rule violations so long as thc public is the only victim. Recently, for example, the majority waived public access rules which bestow substantial benefits on the public but impose financial burdens on the cable industry.109 These access channel requirements provide the public a forum, currently denied them by commercial broadcasting,110 wherein they can express controversial points of view. On December 13 the Cable Bureau suggested that the Commissioners significantly undercut this potential.
At issue was a proposed merger by two of America's largest cable corporations: Cox Cable and American Television and Communications (ATC).111 In order to defuse opposition to their merger -- and no doubt to increase the number of minority group subscribers -- Cox and ATC had agreed with several minority groups to lease at a nominal fee several access channels to blacks and Chicanos on a first-come first-served basis, thus offering minorities an important communications forum in California.
The Cable Bureau charged that the agreement was the product of coercion, suggesting that the Commission was confronted with an abuse of its process.112 The Bureau argued that because Commission rules preclude local franchising authorities from insisting upon access rights more extensive than the FCC requires,113 private minority groups and cable companies could not agree to such an arrangement. Thus were minority groups elevated to the status of municipalities.
The Commissioners probably would have agreed to waive the cross ownership rules, but, as it turned out, they did not reach any of thc issues presented in this case. Negotiations between the Bureau and thc attorneys for the minority groups114 were interrupted by a Justice Department suit to block the merger on the grounds that it violated antitrust laws.115 The issues, therefore, remain unresolved.
The point, however, is that the Cable Bureau, when confronted with a privately-arrived-at agreement which would have benefited long powerless groups, sought desperately to make that agreement appear unlawful. When confronted with private agreements that benefit industry, the staff strains to justify waivers.
On December 13 the Commission was presented with an application by RKO General, Inc., to purchase its seventh FM radio station -- WAXY-FM, Ft. Lauderdale, Florida. The application was remarkable not only because the FCC has promulgated rules against excessive multiple ownership of stations,117 but more importantly because RKO General's applications to renew its licenses to KHJ-TV, Los Angeles, and WNAC-TV, Boston, had earlier been designated for hearings to determine whether RKO was qualified to own any broadcast interests.118
Before approving the grant of an assignment application, the Commission must determine that the grant will serve the public interest, convenience, or necessity.119 While such a determination may be made on the basis of the pleadings filed by the parties in some cases, if the challenging pleadings reveal that approving the application would be prima facie inconsistent with the public interest, the Commission must designate the contested factual issues for a hearing.120 Though RKO's application to purchase its seventh FM facility had not been challenged, the facts of the case demanded the designation of such a hearing.
First, the acquisition would do violence to the FCC's rules prohibiting undue concentrations of media control. These rules are designed to foster program diversity by preventing any single individual or corporation from acquiring disproportionate local, regional, or national control over broadcast facilities. Whether a particular acquisition will result in undue media concentration depends upon "the facts of each case," but ownership of more than seven AM, FM, or TV stations constitutes undue media concentration per se and is absolutely prohibited.
The Commission majority, however, has converted this per se maximum into the presumptively permissible number.122 Without the requisite rulemaking proceeding,123 the majority has, in effect, repealed the regulations governing those cases where an acquisition will result in ownership of seven or fewer AM, FM, or TV stations. In the RKO case, neither the staff nor the majority even alluded to the multiple ownership rules, and no investigation was initiated.
The RKO case is also noteworthy for a different reason. At the time the majority approved this assignment, RKO was involved in license renewal hearings on applications for KHJ and WNAC-TV. The KHJ proceeding, which was initiated in 1966, involved a comparative hearing between RKO and a competing applicant, Fidelity Television of Norwalk, California. Fidelity Television challenged the incumbent's license and filed a competing application. Pursuant to provisions of the Communications Act of 1934, the Commission held comparative hearings to determine which broadcaster would best serve the public interest.124
The Administrative Law Judge presiding over the comparative hearing found that a renewal of RKO's KHJ license would be inconsistent with the public interest.125 He found that RKO and its corporate parent, the General Tire and Rubber Company, had engaged in reciprocal trade agreements with respect to the sale of advertising on KHJ and concluded that Fidelity was the preferred licensee.
The seven FCC Commissioners considered these findings in the Chairman's office on October 19, 1972. Without discussing the merits of those findings, five Commissioners decided not to act upon them. They could not, however, simply renew RKO's license to KHJ, for RKO's license renewal application for WNAC-TV in Boston had also been designated for a comparative hearing.126 A competing applicant in that case had charged RKO with misrepresenting facts to the Commission during the KHJ proceeding. Misrepresentation, at least until recently, has been a certain ground for the revocation of a broadcast license.l27 The Commissioners simply resolved to take no official action in the KHJ case. However, the majority agreed with the staff that RKO's KHJ license could not be renewed until certain other issues were resolved by the Administrative Law Judge on remand. As a procedural matter, then, it would have made sense for the majority to reverse the Administrative Judge on his initial findings (assuming a majority wished to do so) and remand for resolution of the remaining issues. The majority's decision to delay resolution was nonsensical unless viewed as a means of denying dissenting Commissioners an opportunity to write opinions which might have been the basis for judicial reversal on appeal.
The Assignment and Transfer Branch advised the Commission that prior to resolution of the antitrust and misrepresentation issues in the KHJ and WNAC proceedings and in view of an adverse finding against RKO by the KHJ Administrative Law Judge, the Commission could not allow RKO to purchase still another broadcast station (WAXY). Indeed, if a broadcast owner's basic qualifications are in doubt as to one of its licenses, the Commission's decisions hold that those qualifications are in doubt as to all of them.128 The Commission majority was so eager to let RKO continue building its broadcast empire, however, that it nevertheless approved RKO's acquisition of WAXY one week later.129
Though the Assignment and Transfer staff had recommended against the immediate grant to RKO, the staff was not free from blame for the majority's result, for in the very next agenda item the staff reached the opposite conclusion in a similar case. Kops-Monahan Communications had petitioned to assign its licenses for WTRY-AM (Troy, New York) and WTRY-FM (Albany, New York) to Scott Broadcasting of Pennsylvania. This assignment would allow Scott to acquire its seventh AM and fourth FM broadcast stations.130 As in RKO's case, neither the staff nor the majority recognized any multiple ownership problems. This time, however, the staff urged approval of this assignment notwithstanding a petition to deny Scott's pending renewal application for WFEC-AM (Harrisburg, Pennsylvania) filed by a coalition of black community leaders. That petition charged, among other things, that Scott had engaged in discriminatory programming and employment practices.
Why did the staff take the view that there were no problems with respect to Scott's application when, at the same meeting, it had urged the Commission to delay ruling on RKO's application? It might be argued that Scott's qualifications with respect to WFEC (and, hence, with respect to all its licenses) had not been cast into substantial doubt because the Commission had not yet set the WFEC application for hearing. In such a circumstance, however, it would make little sense to approve this acquisition until after the FCC had disposed of the WFEC petition to deny. The second possible rationale for the staff's inconsistent approaches may lie in its belief that licensee misrepresentation (RKO's case) is a graver fault than racial discrimination (Scott's case). This distinction suffers from obvious difficulties. The Commission majority resolved the staff's inconsistent approaches by granting both assignment applications. The result should have been the reverse.
The Commission's disposition of the final item on the December 13 Assignment and Transfer Agenda illustrates still another form of FCC capriciousness. This time the majority, without a hearing, granted Zenith Radio's application to assign WEFM-FM (Chicago) to GCC Communications.131 GCC advised the Commission that, for purely financial reasons, it would be forced to change WEFM's format from classical to contemporary music. The Citizens Committee to Save WEFM challenged GCC's application in a petition to deny which charged that Zenith's alleged financial losses were not the result of WEFM's classical format and that Chicago's other classical music stations would not adequately serve the city's classical music devotees. In spite of these allegations and, without a hearing, the majority granted the assignment application.
This action flew in the face of Citizens Committee v. F.C.C.,132 where the Court of Appeals had reversed the Commission's approval of a license transfer without a hearing on the impact of a similar proposed change in music format. The Court of Appeals held that a hearing was necessary to make factual determinations about the format change. The Zenith majority attempted to limit the Citizens holding to situations in which the format being extinguished was the only one of its sort available to the community. In fact, however, the Citizens case did not involve the loss of the only station of its type.
To avoid making the renewal process an effective screening procedure, the Commission majority has declined to clarify the parameters of licensee responsibility.134 Those meager public interest "standards" which it has adopted are so vague and loosely enforced that they impose no burden upon licensees. Broadcasters must ascertain the needs of their communities and program to meet those needs. The ascertainment requirement is easily satisfied by pro forma interviews with public officials, community leaders, and a randomly selected segment of the general public.135 If a broadcaster somehow fails to ascertain the community's "needs," it does not risk denial of its renewal application; the FCC gives it another bite of the ascertainment apple.136
Although ascertainment is the sine qua non for satisfying a licensee's public interest responsibility,137 the Commission imposes other requirements. There are, of course, technical rules, and the Commission requires that licensees abide by the vague and loosely enforced fairness doctrine. Further, the Commission has rules against discriminatory programming and employment practices.137 In general, however, licensees may violate FCC rules with impunity so long as they do not misrepresent facts to the Commission.138
Renewal applications may be contested or uncontested. The staff renews uncontested applications after little, if any, investigation140 except in the area of equal employment opportunity. Even here the staff's efforts are half-hearted. If a licensee's employment records indicate a pattern of declining or limited employment for women and minorities, the staff inquires about the matter by mail. The letters are harmless, and the Commission arbitrarily exempts some stations from these weak inquiries.141
On December 13 the staff matched its contempt for its own equal employment opportunities program with a new-found contempt for efforts by state regulatory agencies. The Pennsylvania Human Rights Commission (PHRC) had requested that the FCC defer action on the uncontested renewal applications of several radio and television licenses in the Pennsylvania renewal group. The PHRC was investigating allegations of discriminatory employment practices against these stations, although none had received equal employment opportunity letters of inquiry from the FCC. The renewal staff had initially acquiesced to the PHRC request, but on December 13 it advised the Commission that these renewals should no longer be delayed. Because the question of FCC deference to such state agency investigations was new, the staff sought Commission approval of its proposed action.
The complaints against these stations had been filed with the PHRC by the same individual. Although the staff conceded that the PHRC, had discerned merit in them, it claimed that the complainant's allegations did not suggest a "pattern" of discrimination. There was thus no reason to delay the renewal applications, argued the staff, because even if the PHRC's investigation uncovered isolated instances of discrimination, such discrimination would not merit FCC disapprobation.142 The Commission, paying no homage to traditional notions of comity, approved the staff's recommendation.143
Contested applications pose more of a challenge to the Commission, but the outcome is the same. Renewal applications may be contested by competing applicants, in which case a comparative hearing must be held. They may also be challenged by citizens filing petitions to deny, in which case a hearing must be held if the petitioners allege material facts indicating that renewal of a license would be prima facie inconsistent with the public interest.144 The Commission is particularly hostile to petitions to deny. Competing applications are generally brought by entrepreneurs; petitions to deny are brought by broadcast consumers who are concerned with improving service to the community.145
Because the statute does not mandate hearings on all petitions to deny, because such hearings are viewed as a threat to broadcasters, and because both the staff and the majority are hostile to consumer groups, the Commission's general approach to petitions to deny is to avoid hearings.146 The staff resorts to three basic approaches in determining that a petition to deny has failed to allege material and substantial facts indicating that the grant of a renewal application would be prima facie inconsistent with the public interest. First, it may conclude that the allegations in a petition to deny are too general. This approach is frequently used to thwart petitions alleging failure to ascertain adequately community needs and failure to broadcast programming to meet those needs.147
Since a staff ruling that a petition to deny is too "general" is analogous to a judicial ruling that a complaint is inartfully drawn, logic suggests that the staff should permit amendments.148 The staff, however, does not allow petitioners to amend their complaints. It is not nearly so harsh on licensees: An inadequate ascertainment survey may be amended.l49
The staff's second approach to petitions to deny is simply to resolve disputed facts in the licensee's favor without holding a hearing. This approach, admittedly less subtle than the first, enabled the staff on December 13 to dispose of a petition to deny filed by the Columbus Broadcasting Coalition (CBC) against the renewal applications of RadiOhio, Inc., licensee of WBNS-AM-FM-TV in Columbus, Ohio.150
CBC argued that RadiOhio had utilized its media power in the Columbus market for anticompetitive purposes. Such allegations, if "specific" enough, would warrant a hearing.151 CBC argued that, aside from its substantial broadcast interests in Columbus, RadiOhio also owned two daily newspapers and a Sunday paper. CBC alleged further that the licensee's newspapers favored the licensee's broadcast interests (specifically, WBNS-TV's program listings) over its competitors. CBC also argued that the licensee had used its media power to attempt to censor the Urban League's Housing Director when he charged, during a WBNS-TV broadcast, that the licensee's principals were racist.
RadiOhio denied all of the CBC allegations. Thus, each of these matters was in dispute. Rather than set the case for hearing to investigate the factual disputes, however, both the staff and the majority simply resolved them in the licensee's favor and renewed its license.
The staff's third method of avoiding hearings on petitions to deny is to accept the facts as alleged, but assert that, even if true, such facts do not warrant denial of the renewal application. On December 13 the staff resorted to this approach twice.
In addition to challenging RadiOhio's licenses, CBC had also challenged the renewal applications of Taft Broadcasting Company, licensee of WTVN-AM and TV and WBUK-FM, all in Columbus.152 CBC argued that Taft had engaged in discriminatory hiring practices, but once again the staff resolved disputed facts in the licensee's favor. With respect to the one specific allegation of employment discrimination, however, the staff reiterated its earlier position that one instance of employment discrimination does not warrant a hearing and denial of a renewal application, nor even justify delaying that application.153
The next case involved a petition to deny filed by the Colorado Committee on Mass Media and Spanish Surnamed, Inc. (Committee) against Fort Collins Broadcasting Company, licensee of KIIX, Fort Collins, Colorado. The petitioners charged that the licensee had harassed them during the preparation of their complaint. Specifically, the Committee alleged that the licensee had refused to make its public file available for inspection, had threatened the petitioners with a defamation suit, and had broadcast an editorial against the Committee.
The staff, while it acknowledged the serious public interest problems inherent in licensee harassment of citizens groups, avoided these problems by concluding that the licensee's conduct did not amount to an attempt to discourage the public from filing petitions to deny.154
A licensee's attempts to discourage a petition to deny through unfair means obviously undercuts the citizen's statutory right to file such petitions. In a very real sense, the institutionally harassing behavior of the staff and Commission majority undercuts that right every week.155 On December 13, the Federal Communications Commission successfully scuttled three petitions to deny and declined to defer to a state agency which was attempting to tackle a problem the Commission had long ignored. That task completed, the December 13 license renewal ritual concluded.
Applications for new facilities go through a process the importance of which is not ordinarily appreciated by the casual observer. It includes the acceptance of the application for filing,l57 the acceptance of a request for modification,158 the grant of a permit to begin construction or alter the technical configuration of the station,159 the grant of "temporary" operating authority,160 and finally the grant of the license itself.161 While the broadcaster is not declared "qualified" to broadcast until completion of the procedure, the formal grant of the license is a foregone conclusion at a much earlier point in time.162
"Accepting the application for filing" is no mere formality. It is a term of art describing an evaluation tantamount to Commission approval of the applicant's barebones technical specifications. Such approval implies that the operation of the station will serve the public interest. Yet it is at this stage that the Commission tends to be most lenient in waiving its technical rules.
Even if the FCC were to abdicate every other aspect of its regulatory responsibility, the public interest standard would demand at a minimum that the Commission regulate the technical aspects of broadcasting,163 particularly in view of the increased number of assigned frequencies today. Yet, although the FCC occasionally has been struck with regulatory fervor in this area,164 its standards are poorly enforced and erratically applied.
Preventing interference is one of the Commission's most important responsibilities in the area of technical regulation. On December 13, the Commission was presented with but one Aural Agenda item involving this responsibility. At issue was a request by Eastern Broadcasting Corporation, licensee of WLHN-FM (Anderson, Indiana), for a waiver of the Commission's rule against "shortspacing."165 While repeated waivers of "shortspacing" rules long ago resulted in intolerable interference on the AM band, FM problems are relatively new.l66 The FM rules against "shortspacing" are clear,167 and at times the Commission has adhered to them with admirable resolve.168 Treatment of the WLHN item on December 13's Aural Agenda, however, reflected a trend toward the same degradation of FM signals that has long characterized AM regulation.
The WLHN decision, a good example of the Commission's Aural Agenda regulation, illustrates two disturbing facets of FCC procedure. The first is the process by which the majority undermines the integrity of broadcasting regulation through the granting of waivers.l69 The second is the ease with which an applicant can manipulate FCC licensing procedures in order to obtain concessions during the lengthy processing period, concessions which would have been denied him had he indicated his intentions at the initial stage. Eastern applied for a "shortspacing" waiver so that it could "modify" the terms of its previously granted construction permit for a new FM station on Channel 250.170 Eastern's original construction permit had specified a site that met all the technical requirements of the rules. The modification was requested, however, because Eastern later "discovered" that it could profit by locating its new FM transmitter at the site of its already-existing AM antenna.17l The waiver was required because the site involved shortspacings with two FM services -- one of slightly less than a mile and the other of seven miles.172
Having commendably put the Comission on notice of the significance of the waiver requested,173 the staff then tried to justify it on the dubious theory that the channel's previous operator had utilized this same tower "with power much in excess of that now proposed." The staff's proposed order added the curious statement that "[w]e do not believe that grant of this waiver would constitute a precedent for like waivers of co-channel spacing requirements in other cases.''174 In approving the staff's waiver,175 the majority thereby suggested that unlawful shortspacing will be condoned so long as it is not as egregious as previously existing shortspacing violations.
The Aural Agenda also reveals how the industries that the FCC is supposed to regulate manipulate its process. A cursory examination of a broadcast applicant's numerous filings in any given case reveals how cleverly these applicants with their attorneys succeed in this effort.176 Such manipulation, however subtle, constitutes an abuse of the Commission's process that should not be tolerated. More important, such manipulation often leads the Commission down extremely dangerous paths, as the WLHN case suggests. Yet the majority of my colleagues, who are themselves manipulated every day by bureau staffs,177 either do not know or will not acknowledge that they are being manipulated.
In presenting its application for Channel 250 at Anderson, Eastern had specified a transmitter site that presented no technical problems. Had the shortspacing problem originally been suggested, it is unlikely that Commission staff, acting under delegated authority,178 could have "accepted" the application in the first instance.179 Nor would the staff, in all liklihood, have suggested that the Commission approve such a sizeable shortspacing rule waiver for an applicant having nothing at stake except an initial filing. The probable result would have been the applicant's agreement to transfer the proposed antenna from its AM location to another available site.180 And even if the application for the shortspaced site had been accepted, the presence of so glaring a deficiency in the publicly disclosed application notice might have encouraged other Indiana groups or individuals to "compete" for the new service.181 By waiting until it had received an FCC construction permit for its initially proposed non-shortspaced site, however, Eastern took advantage of the Comission's natural proclivity to sympathize with Eastern's subsequent request.
Because of television's importance among the media,185 the Commission is rather careful about enforcing its rules and policing the technical integrity of potential licensees.186 Thus special conditions are often attached to television construction permits -- conditions precluding the potential licensee from pursuing certain activities or requiring him to pursue others -- which are not to be found in radio permits.
Aside from problems of cross-ownership and concentration of media control,187 the most serious problems in this area relate to the process by which the FCC gathers -- or fails to gather -- the information necessary to resolve what are often very complicated questions. The FCC cannot successfully regulate the actions of proposed television licensees or of those seeking major modifications without independently gathered information regarding the applicant's operational plans and their effect upon the technical, social, and even physical environment. The Commission, however, relies all too often upon the statements and filings of the parties themselves.
The two items on the December 13 Television Agenda illustrate the problems that arise when the Commissioners' actions are based upon the applicant's distorted submissions and the staff's rationalizations for approval.188 The Commission's first action was to modify a condition it had previously imposed upon its grant of a construction permit to Mountain State Radio and TV Corporation.189 Mountain State initially had applied for a construction permit to build a new commercial television broadcast station which would utilize UHF Channel 22 in Fort Collins, Colorado. In granting that permit, the Commission had required that an individual who was a Director and twenty-six percent stockholder of Mountain State
Mountain State then asked that it be allowed to "hire" this stockholder "to provide expert advice and assistance in making the station operational.''193 The stockholder was to be "an employee or consultant . . . subject, at all times, to the orders of the officers and board members." The applicant argued that this particular stockholder had "far more experience and know-how than the other stockholders and that his assistance was essential to constructing and operating the station."194 The Broadcast Bureau staff urged approval of the modification and the Commission agreed by a vote of five to two.195
This resolution was nonsensical. First, the staff and the majority ignored the observation of the Administrative Law Judge in the earlier proceeding that the stockholder's "truthfulness and candor" are doubtful.196 Second, the staff accepted without investigation Mountain State's claim that there were no other "experienced television consultants" available to help "put the station on the air."197 Finally, neither the staff nor the Commission majority bothered to ask what this stockholder would do as a "consultant."
The next item on the TV Agenda is another illustration, albeit more subtle, of what happens when the Commission is partially informed. The petition appeared reasonable. United Television, Inc., licensee of KMSP-TV (Minneapolis), previously had been granted a construction permit for a new antenna, subject to the condition that it make this facility "available for use by present and future permittees and licensees of television facilities in the Minneapolis-St. Paul areas who have already made requests, or make requests thereafter, on a fair and equitable basis . . . ."198 The purpose of this caveat was to prevent United's use of its tower for anticompetitive purposes. Thus, the United Television tower199 was soon occupied by three TV stations and unoccupied space was reserved for the two remaining UHF frequencies assigned to Minneapolis-St. Paul, Channels 23 and 29.
On December 13, the Commission granted United Television's petition to delete the "reserved-space" condition, premising its decision upon two considerations.200 The staff advised the Commissioners first that the outstanding construction permit for Channel 29 had been cancelled in 1970 and that no new applications for that channel had been filed and second that the applicant for Channel 23 had decided to build its own tower and would therefore not need the United Television facility.201 The majority accepted the staff's assertions at face value, made no independent investigation, and granted United's request in order to permit four FM radio licensees to make immediate use of the tower space reserved for television.
Two months later the implications of this decision became painfully apparent. On January 18, 1973, Midwest Radio-Television, Inc. (licensee of WCCO-TV), and Viking Television, Inc. (permittee of KTMA-TV, Channel 23), filed petitions for reconsideration202 and stay of the December 13 order, alleging that Viking had not yet declined use of the United Television tower203 and that there was no certainty that Channel 29 would remain idle.204 Since the factual basis for the Commission's December 13 order deleting the condition appeared to have been in error,205 the staff recommended, and the Commission agreed, that a stay was warranted pending the resolution of the petitions for reconsideration.
That the United Television case did not culminate in a disaster for Channel 23 is a tribute not to the FCC but rather to the parties who petitioned for reconsideration. Given the record before the Commission on December 13, neither the staff nor the majority possibly could have adequately resolved the factual questions presented by United's application. The staff and the majority simply "found" those facts most conducive to a grant of United's request. Two television operators who were not parties in the original proceedings were forced to assume the burden of correcting the resulting errors.
In the first two items on the December 13 Broadcast Agenda, ABC and NBC sought and obtained waivers of one of the FCC's most controversial programming regulations -- the prime time access rule206 -- which bars television stations in the nation's top fifty television markets207 from carrying more than three hours of network programming during the four-hour high-density viewing period between 7:00 p.m. and 11:00 p.m. 208
Increasing network domination of the broadcasting industry led to the promulgation of this rule. As the Commission stated in adopting it:
When networks win a waiver of the prime time access rule for a particular program, local stations present that program plus the networks' regular fare. If the networks were really intent upon presenting a "special" program, of course, they could simply substitute that program for some of their regular programming. The networks, however, want the best of all worlds, and the FCC has capitulated.
The prime time access waivers granted on December 13 were typical. In the first case, NBC sought a "one-time-only" waiver (for the second year in a row) in order to broadcast the Academy Awards. In the second case, ABC and NBC requested blanket waivers for "various sporting events." The Commission granted the "Academy Awards" waiver by a four-to-three vote after having passed that item from the previous week.211 The majority reasoned that 1972 should be no different from 1971 when it had granted the same waiver.212 The majority was not troubled by the fact that the 1971 waiver had been granted due to the transitional nature of the 1971-72 prime-time access season, an exceptional circumstance which did not exist in the 1972-73 season. In granting waivers for ABC's and NBC's "various sporting events," the majority followed another line of bad precedent2l3 by agreeing to waivers where the sporting events might run over into the local stations' "access" segment of prime time. The majority has never stopped to consider whether in such cases the network should simply be required to delete some of its later prime-time programming, thus preserving one hour of local access. This approach to greater flexibility in programming has been impeded, however, by the networks' insistence that the hour of local access be uniform, i.e., that all local stations on all networks have access only between 7:00 and 8:00 p.m.214
As the foregoing suggests, the Commission has "enforced" its prime time access rule as if it regretted having adopted it. The networks repeatedly appear with last-minute requests for waivers that must be hastily granted to avoid "disruption" of programming "plans."215 And the Commission majority, evidently moved by such brinkmanship, simply does the networks' bidding, thus muzzling its own rule.2l6
The prime time access rule was not the only FCC rule to suffer from unprincipled nonenforcement on December 13. In the next item the majority disregarded its long-standing rule against simultaneous network operation in the same market.217 WAAM-AM (Ann Arbor, Michigan) requested permission to affiliate with the "ABC Contemporary Radio Network." Two of the five Ann Arbor AM stations were already ABC affiliates. In granting the WAAM request218 the majority not only sanctioned common programming for sixty percent of the Ann Arbor AM outlets, but it did so in direct contravention of FCC rules and policies.
In late 1967 the American Broadcasting Company announced the formation of four new "American Radio Networks," featuring "entertainment," "information," "contemporary programming," and a specialized FM format. The Commission reviewed ABC's new "networks" pursuant to its rule barring the same network from programming on more than one AM facility in the same market.219 At ABC's request the Commission decided to waive that rule for a one year "trial" period.220 In 1969, after reviewing its policy,221 the Commission recognized again the dangers inherent in excessive programming control by a single source in a single market222 and adopted a formula allowing ABC one affiliate in markets with four or fewer AM stations and two affiliates in markets with five or more.223
ABC moved to comply with the new formula,224 but a number of the affected stations sought waivers on their own. The Commission required a showing that additional primary AM services not counted under the "formula"225 were available to the markets and that other networks were available on other stations or at least unavailable to the station requesting the waiver. The FCC granted a majority of these requests in April 1970.226, In every case of FCC approval, the affiliation agreement had been entered into prior to the FCC's 1969 order.227
By granting a waiver to WAAM in December 1972, however, the majority completely upset the delicate balance created by the 1969 formula. Two of Ann Arbor's five AM stations had been ABC affiliates prior to April 1970, when ABC entered into a third affiliation agreement with WNRS-AM. To comply witll the FCC's new policy ABC sought to cancel its affiliation with one of its older affiliates, WSDS-AM. When WSDS sought a waiver of the new policy the Broadcast Bureau granted a "temporary" waiver pending full Commission consideration. The Bureau, however, never requested such full consideration due to what the staff termed "pressure of other matters."228
ABC terminated its WNRS affiliation in July 1972 and then affiliated with WAAM-AM. The latter requested and, on December 13, 1972, received, yet another FCC waiver of the 1969 "formula." The majority granted the waiver on the tenuous theory that it was merely placing ABC in the same situation that had existed -- but that had never been officially approved -- prior to the WNRS cancellation. The Bureau reasoned that, had it presented the WSDS waiver request to the full Commission, such request surely would have been granted.229
The errors are obvious. First, the majority treated WAAM as if it had entered into its ABC affiliation agreement prior to the 1969 "formula" ruling. The Commission had granted waivers in such cases more readily than in cases where affiliation agreements had been arranged after the 1969 ruling.230 The WAAM decision simply erased that distinction in the FCC's waiver approach.
Second, there was no logical basis for the Bureau's "certainty" that the full Commission would have granted the waiver. The Bureau had never raised that waiver before the Commission. Further, even if the full Commission had granted the WSDS request in 1970, a partial emasculation of the rule would not warrant complete emasculation at a later time.
The next item on the Broadcast Agenda is one of current broadcast concern: the "re-regulation of radio." The staff presented a Notice of Proposed Rulemaking to amend the television translator rules.231 Translator "stations" pick up and retransmit a mother station's TV signal. Some add local announcements of interest to the audience in the translator's signal area. The proposed rule would expand the FCC's time limit on locally-originated announcements from twenty seconds per hour to thirty seconds per hour.232 The Broadcast Bureau reasoned that modern television announcements are ordinarily thirty seconds (or longer).233 The proposed rule was approved unanimously and illustrates the FCC's occasional desire to rid itself of obsolete regulations.234
The final three items on this agenda exemplify the process of "spectrum housekeeping" -- a task generally performed by the FCC's Chief Engineer and Broadcast Bureau staffs. Each item involved requests for assignment of new FM frequencies to various communities. The Commission generally adheres to a policy of giving priority to requests that would afford a community its first FM frequency.235 In one item, for example, the staff urged approval of requests to assign first FM frequencies to seven communities. These requests are normally the first step taken by a party intending to apply for a license to use the frequency later.236 Ordinarily the Commissioners do not concern themselves with the fact that when a frequency is assigned to one community, other nearby communities lose this frequency forever. Although these frequency assignments are granted in rulemakings in which notice must be issued to "interested parties,"237 the listening public of a nearby community is rarely aware that it may be losing its only chance for a local station.238
This lack of community input was evident in another item on the December 13 Broadcast Agenda involving the requested reassignment of a Class A FM frequency to Terrell Hills, Texas. That frequency had been vacated by its previous licensee in favor of a more powerful Class C frequency in nearby San Antonio. The Commission initially voted against the Terrell Hills Class A assignment because of a shortspacing problem between it and an unused frequencyassigned to Gonzalez, Texas.239 However, two prospective applicants indicated an interest in the Terrell Hills frequency and argued that they could employ a transmitter site that would avoid the shortspacing problem. The Commission reversed itself, but issued a notice inviting comments as to whether the available frequency might be put to better use in a community more removed frorm the suburbs of San Antonio.240 No additional comments were filed, of course, because there was no adequate means of communicating to potential listeners the significance of obtaining a local FM station of their own. The Commission returned the frequency to Terrell Hills, solemnly declaring that "there has been no demonstrated need for Channel 292A outside the San Antonio urbanized area."241
The Complaints and Compliance Division of the Broadcast Bureau has the monumental task of ensuring that the more than 8,000 licensees comply with all FCC regulations.243 Although the Division must process more than 40,000244 complaints each year, it is woefully understaffed. A staff of five lawyers and five field investigators decides which complaints to pursue, conducts field investigations, makes preliminary findings of both fact and law, and processes appeals from those findings.245 Problems which are not easily resolved through the imposition of simple sanctions (such as fines246 or renewal denials) thus receive inadequate staff attention.
As a broadcaster's misdeeds become more complex, so do FCC sanctions. Violations of the Commission's technical rules may lead to letters of warning or "Notices of Apparent Liability."247 On the other hand, violations of the fairness doctrine248 or licensee refusals to grant access249 could engender more complex Commission sanctions. The gray area between these extremes includes egregious technical violations, fraud,250 and misrepresentation.251
The December 13 Complaints Agenda contained examples of each point on the continuum -- from minor technical matters to extremely serious breaches of FCC policy. Technical violations are usually discovered in the course of the Field Engineering Bureau's routine field examinations. That Bureau, the FCC's largest, is responsible for the integrity of the millions of signals in the spectrum.252 It often uncovers minor deficiencies in the course of unannounced investigations.253 On occasion technical or log-keeping violations are discovered by competing broadcasters, by a station's disgruntled employees, or by members of the public. The FCC deals with virtually all of these violations through the imposition of fines the extent of which is determined by reference to fines imposed for similar violations in the past and the licensee's ability to pay.254
The items in this category on the December 13 agenda were typical. In one case the staff determined that station WTLK (Taylorsville, North Carolina) had violated FCC rules requiring that licensees make equipment-performance measurements within a specified time period,255 inspect transmitters and associated equipment five days each week,256 and keep maintenance logs.257 Although the staff noted that a $250 forfeiture was customary for each of these violations, the Commission imposed a total fine of $500 because the station had suffered financial losses during the previous two years. The licensee in this case had attempted to attribute the errors to inept station personnel, but the Commission does not accept such defenses.258
The other technical infraction on this agenda involved a serious "overpower" violation259 by station WILE (Cambridge, Ohio). WILE is authorized to operate at 1,000 watts, except in the months of December and January when it is limited to 500 watts between its 6:00 a.m. sign-on hour and sunrise.260 The station's operating logs revealed that on ten days it had exceeded its authorized power. The licensee argued that the cause was the transmitter's "creeping up" in the course of the station's operation, but the Bureau staff, replying that this defense indicated improper transmitter supervision, recommended a forfeiture of $1,000, which the Commission adopted.
The vague words "investigation into the affairs of station WHBI-FM, (Newark, New Jersey),"261 characterize the gray middle area of Complaints and Compliance regulation. If the acts may involve serious violations of Commission rules, the FCC tends to punish hardest the small or medium-sized broadcaster.
The Complaints and Compliance Division's determination that a situation warrants its attention initiates the dreaded investigation process. Historically, such investigations, based upon specific allegations, expand rapidly as field investigators uncover evidence of a host of other serious violations.262 The penalties mount geometrically. The broadcaster hopes for a small fine; more often he finds himself saddled with a short-term renewal or discovers that he must endure dreaded renewal hearings which can on rare occasions lead to revocation of his license.263
On December 13, after a seemingly routine investigation had uncovered a multitude of violations, the FCC designated the renewal application of WHBI, a medium-size operation, for hearing on fifteen issues. Thus another blow was struck on behalf of what a former Commission General Counsel calls the "three outhouses" policy of broadcast regulation -- any broadcaster with three outhouses or fewer will be far more likely to bear the full brunt of Commission regulatory fervor than his larger broadcast colleagues.
It is ironically in the case-by-case and unsystematic atmosphere of the Complaints and Compliance Agenda that the Commissioners engage in their most sensitive and best known form of regulation,264 i.e., regulation of programming content.265 It is therefore at the end of a grueling day that the Commissioners are confronted with questions requiring the most difficult balancing of competing interests. The FCC's regulation of programming content has long been of greatest concern to broadcast licensees. While the broadcaster communicates the same ideas as publishers or private speakers, he finds himself clothed in a different set of First Amendment obligations. He alone must deal with the rights of listeners and speakers who have no financial or corporate interest in his venture.266
The arguments in favor of limiting a broadcaster's rights in favor of listener or speaker rights are based on the scarcity of broadcast resources,267 and remain viable today.268 Although Congress permits broadcasters to use frequencies for private profit, it also attaches conditions to such use,269 conditions which -- if they are to be more than verbiage -- must apply to program content as well as to technical qualifications.270
Nowhere in the Complaints and Compliance Agenda, however, do the public's rights receive serious consideration: The industry's interests consistently win priority. It is rather ironic, then, that complaints considered in the programming content portion of this Agenda must be initiated and prosecuted by concerned citizens or individuals directly affected by the broadcaster's action.271
The fairness doctrine is by no means the only limitation on a licensee's programming responsibilities.272 The personal attack and equal time273 provisions are treated separately in the statute and the rules.274 Moreover, additional First Amendment rights of programming access have been claimed by the public275 and occasionally granted by the courts.276
The December 13 Complaints Agenda included four significant programming items: a complaint filed against the Public Broadcasting Service (PBS) by a group called Accuracy-in-Media, a complaint by Action for Children's Television against 133 television stations, and two complaints filed on behalf of Congress concerning the networks' refusal to provide congressional access time to counter presidential TV addresses.
Accuracy-in-Media (AIM)277 complained about two PBS programs -- one about sex education and one about the trial of Angela Davis. With respect to the first, which claimed to include "all points of view," AIM argued that that program had presented too "narrow" a range of contrasting views. With respect to the second, AIM alleged that the program had presented a one-sided version of the Davis/Soledad Brothers trial and demanded the right to answer each of its conclusions. The staff recommended that the Commission find against AIM on both complaints.278 The staff examined the wide range of PBS programs and determined that presentation of the subject matter had been "balanced."279
The threshold question -- which the staff glossed over in its original write-up -- was whether the FCC could regulate PBS at all. The staff argued that it could because: (a) the policy of the Commission was to decide fairness complaints against the commercial networks, rather than individual affiliates,280 and (b) PBS had answered the complaint, failing to contest the Commission's jurisdiction. Neither point, however, justified the staff's conclusion, for there are vast differences between PBS and the commercial networks. First, the commercial networks own five of their own affiliates and are in that sense themselves licensees. PBS does not and is not. Second, the networks engage in programming for network-owned and -affiliated stations. PBS, on the other hand, does not program and is strictly a network for transmitting the programs of its member-stations and of independent producers to stations in the public broadcasting system.281 Neither the staff nor PBS explored the pitfalls in deciding a fairness complaint against PBS. The Commission did not even ask what sanctions it could impose in the event of "fairness doctrine" violations.
On December 13, the Commissioners expressed sufficient doubts about the AIM complaint to put it off for two weeks, at which time it was withdrawn for further staff analysis.282 The item was relisted on January 23, 1973, and the Commission adopted with little change the staff's earlier analysis.283 The majority, in its final order, did ask for further comments regarding the question of FCC regulation of both the Corporation for Public Broadcasting and PBS.284 Since the majority was uncertain on this question, it should not have taken jurisdiction in the first place and certainly should not have decided the substantive fairness question until the jurisdictional issue had been resolved.
The complaint by Action for Children's Television (ACT) against some 133 broadcast stations attacked an advertisement prepared by the Television Information Office (TIO) of the National Association of Broadcasters.285 The TIO spot purported to provide an upbeat answer to the question "Do Children Learn from Television?" by portraying five youngsters demonstrating their knowledge of everything from fighting pollution to taking drugs. The spot was distributed to broadcast licensees along with a TIO newsletter which stated:
ACT then filed a "fairness doctrine" complaint with the FCC, charging that substantial evidence showed that what children "learned" from television was detrimental to their development.288
Because of procedural difficulties in the ACT complaint289 as well as ambiguities in the stations' responses,290 the Commission should not have acted on the substance of the complaint. A staff paper, however, while dismissing the complaint on procedural grounds, also asserted that the TIO spot was not a "controversial" editorial announcement, but merely a "promotional announcement on behalf of the industry it represents . . . involv[ing] 'the kind of puffery normally engaged in by an industry or an individual member thereof' . . . ."291
The five votes in "favor" of the staff document actually represented two votes of "yes" and three "concurrences." Two of the concurring Commissioners, Chairman Dean Burch and Commissioner H. Rex Lee, announced at the time of the vote that while they each maintained "grave reservations" about stating that the TIO spot was not "controversial," they were concurring in the result because the complaint was procedurally deficient. Thus, though a majority of the FCC may have believed the TIO spot was "controversial" within the meaning of the fairness doctrine, a different majority voted out the staff's proposed order -- an order reaching the opposite conclusion.292
The final programming items on the Complaints Agenda dealt with significant policy issues. Two groups of Congressmen requested broadcast time to reply to the President's television appearances and to present another point of view on a number of issues. In one case fourteen members of Congress requested that the networks "sell, or otherwise make available" to them time to present "a contrasting viewpoint to that of the Administration.293 In the other, the "Black Caucus" of the House sought (l) a ruling that the networks' refusal to present unedited documentary programming was "arbitrary, irrational and unsupportive of the public interest," (2) an FCC directive that the networks provide "an appropriate number of prime time hours" each year, comparable in amount to that given the Executive branch, for unfiltered political speech regarding issues before Congress, and (3) an FCC directive that the networks give the Caucus one-half hour of time to respond to the President's 1971 prime time State of the Union address.294 The networks refused all of these requests. NBC argued that "use of privately owned broadcast facilities" was "too extraordinary" a remedy for the problem outlined by complainants. It added that "if the constitutional framers had intended that the press provide equal time, they would have said so in the Constitution."295 In addition the networks claimed that they had satisfied the fairness doctrine by presenting all sides of the issues involved though not by the means sought in the complaint.296 Finally, the networks noted that the complainants represented but a few of the "535 discrete constituencies" that constitute the Congress -- and were therefore not entitled to "equality" with the Executive Branch.
The Commission majority, easily and eagerly convinced by the above arguments, decided both cases in favor of the networks. Avoiding all constitutional issues,297 the majority ruled that the Communications Act's "public interest" requirement did not justify Commission action -- despite the fact that the Supreme Court had earlier authorized the sort of FCC action requested by the complainants.298 The majority reiterated its holding in a previous case: "[N]either the public interest nor any Congressional enactment requires licensees to sell time to particular groups for discussion . . . ."299 The majority failed to take into account the fact that this was not just another "particular group" but Congressmen complaining about the broadcasting industry's discrimination in favor of another, coequal branch.300 It is not enough to argue that "we should uphold the right of the networks to refuse time to Congress because we would uphold them if they chose to refuse time to the President . . . ."301 Such reasoning simply denies the realities of a serious problem of constitutional proportions.302 It is inconceivable that the networks would deny the President free, unfettered prime time access.
Several conclusions emerge.
First, it seems evident that the FCC deals each week with an incredibly broad range of communications matters. On December 13, the FCC considered everything from personnel decisions to significant issues of international consequence. The Commission delved into areas surely beyond its expertise and into issues simply beyond its ken.
Second, as the Hearing Agenda reveals, the Commission, burdened with so much work and having so few resources, takes years to resolve important cases.
Third, as both the Cable and Aural Agendas illustrate, the FCC is manipulated daily by the industries it is supposed to regulate and by its own staff. As a result the Commissioners often make precedents which return to haunt them.
Fourth, if the FCC no longer approves of its own rules and precedents, it simply ignores them -- either by waiving them to death or otherwise evading them. In short, the concept of principled decision-making does not exist at the FCC.
Fifth, the FCC not only disdains its own administrative principles, but it also ignores those established by the judiciary. Thus, on December 13 the FCC simply turned its back on numerous decisions construing the National Environmental Policy Act and relied on a construction of a recent case involving programming "format changes" not justified by the language of that case.
Sixth, as the General and Common Carrier Agendas show especially well, the Commissioners often decide cases they do not understand.
Finally, the Commission has not developed rational communications policies for governing its day-to-day decisions.
Perhaps it is easier to understand the Commission's sloppy work, its serious gaffs, when one sees an individual decision in the context of the burdensome "day in the life" on which it was voted. Yet much of the burden is of the Commission's own making. It is neither necessary nor advisable to divide up the FCC's workload between a "Broadcasting Commission" and a "Communications Common Carrier Commission." First semester business school principles would suggest that the Commission should formulate some statements of national communications policy for the benefit of itself, its staff, the business community, the Congress, the press, and the public. Having done this, it should prepare precise delegation orders to its staff, allow the staff to handle individual cases as they come up, and create a management information reporting system whereby the Commission is able to follow the processing of cases, modifying policy and delegation orders as warranted.
Another purpose of this piece is to offer the public some information concerning the operation of one of its administrative agencies, one which has struggled to keep its activities secret. The FCC is a public agency, receiving public funds for the purpose of regulating, "in the public interest," communications industries whose services are crucial to the continued vitality of a democratic society. Ironically, though the agency keeps the public in the dark, the communications interests learn all the details of Commission actions through information services provided by lawyers, lobbyists, and the trade press.
Neither the Commission majority nor its staff is troubled by the agency's treatment of the public. Whether because they adhere to notions of "laissez faire" economics or because they sympathize with communications industry interests, a majority of the staff at the FCC exploit the lack of public representation day after day.
Congress has done little to correct problems so apparent at the FCC largely because, as a "generalist" and political body subject to the same sorts of pressures that barrage the Commission, Congress is not terribly competent to supervise.
A final purpose of this article, then, is to offer the judicial branch some idea of how bad things really are, of how tenuous is the basis for the idea that judges should defer to the FCC's "rational and orderly process." Long-range reforms aside, if there is to be any immediate hope for the FCC, it lies with the courts.
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