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National Black Media Coalition and New York Affiliate v. United States

decided: June 24, 1987; As Amended.

NATIONAL BLACK MEDIA COALITION AND THE NEW YORK AFFILIATE, NATIONAL BLACK MEDIA COALITION, PETITIONERS,
v.
FEDERAL COMMUNICATIONS COMMISSION AND UNITED STATES OF AMERICA, RESPONDENTS, NATIONAL ASSOCIATION OF BROADCASTERS, INTERVENOR



Petition for review of orders of the Federal Communications Commission establishing an enhancement for daytime-only AM radio broadcasters in comparative proceedings for new FM radio channels. The petition for review is denied and the orders are affirmed.

Author: Pierce

Before: VAN GRAAFEILAND and PIERCE, Circuit Judges, and LASKER, District Judge.*fn*

PIERCE, Circuit Judge

The National Black Media Coalition and its New York Affiliate (collectively "petitioners" or "NBMC") petition for review of the Federal Communication Commission's ("FCC") orders in In re Implementation of BC Docket 80-90 to Increase the Availability of FM Broadcast Assignments, Second Report and Order, 101 F.C.C.2d 638 (1985) ("Second Report and Order"), on reconsideration, F.C.C.2d , 59 Rad. Reg. 2d (P & F) 1221 (1986). Petitioners' core claim is that the portions of the FCC orders that afford "daytimer" radio station operators a preference in comparative proceedings relating to the licensing of FM radio channels constitute an abuse of discretion because their effect is to reduce or eliminate opportunities for minorities to receive such licensing. We deny the petition for review and affirm the FCC's orders.

I.

Daytime-only AM licensees ("daytime") are AM band radio broadcasters who for technical reasons may only broadcast during daylight hours. See generally WBEN, Inc. v. United States, 396 F.2d 601, 605-06 (2d Cir.) (Friendly, J.) (explaining technical restrictions), cert. denied, 393 U.S. 914, 89 S. Ct. 238, 21 L. Ed. 2d 200 (1968). The FCC has found that daytimers have provided excellent service to the localities they serve despite the financial disadvantage of operating only during the day. In order to improve the daytimers' lot, and concomitantly improve service to communities served by daytimers, the FCC has expanded the hours daytimers may broadcast to the extent it deems technically feasible. See Second Report & Order, 101 F.C.C.2d a 643-44.

Believing that this expansion still left daytimers in a poor competitive position, the National Telecommunications and Information Administration ("NTIA"), in a petition for rulemaking filed with the FCC in September 1981, suggested that the FCC consider giving daytimers some form of consideration in comparative proceedings for new FM facilities. The comparative proceeding is the means by which the FCC chooses from among competing applicants for broadcast licenses. In response, in August 1982 the FCC released a notice of rulemaking in Docket 82-538 ("the 1982 Docket") which requested comments on enumerated methods for assisting daytimers. See In re Hours of Operation of Daytime-Only AM Broadcast Stations, 47 Fe. Reg. 38937 (published Sept. 3, 1982) ("Notice of Rulemaking in the 1982 Docket"). Among other proposals, this notice suggested giving a preference to daytimers applying for FM stations. Id. at 38940-41. In a decision in the 1982 docket, the Commission deferred consideration of this particular method of assisting daytimers to a later date. See In re Hours of Operation of Daytime-Only AM Broadcast Stations, 95 F.C.C.2d 1032, 1032 n.1 (1983), on reconsideration, 97 F.C.C.2d 657 and 99 F.C.C.2d 1087 (1984).

Meanwhile, the FCC was pursuing another rulemaking proceeding with the purpose of increasing the number of commercial FM stations. In this other proceeding, known as Docket 80-90, the Commission changed certain allocation rules in order to create approximately six hundred FM stations. See In re Modification of FM Broadcast Station Rules to Increase the Availability of Commercial FM Broadcast Assignments, 94 F.C.C.2d 152 (1983), on reconsideration, 97 F.C.C.2d 279 (1984). Next, the Commission gave notice of yet another proceeding, Docket 84-231 ("the 1984 Docket"), to allocate among communities the six hundred additional FM stations made available by Docket 80-90. See Notice of Proposed Rule Making in Docket 84-231, 49 Fed. Reg. 11214 (published Mar. 26, 1984) ("Notice of Rulemaking in the 1984 Docket "). The notice sought comments on whether daytimers should be granted such "special consideration" in comparative proceedings as, inter alia, "a preference . . . over other competing applicants for an FM channel newly assigned to the same community." Id. at 11217. The notice suggested that such a preference might be necessary because "[e]xisting comparative criteria could entitle competing applicants for such FM facilities to a diversification preference over daytime-only licensees, thus potentially foreclosing a means by which these experienced broadcasters could expand their service to the public." Id. (footnote omitted). The "diversification preference" reflects the Commission's long held policy that a "factor of primary significance" in the comparative proceeding is the goal of achieving "maximum diffusion of control of the media of mass communications." Policy Statement on Comparative Broadcast Hearings, 1 F.C.C.2d 393, 394 (1965) ("1965 Policy Statement"). Preference presently is extended to, inter alia, minority-owned applicants and local residents. See Second Report & Order, 101 F.C.C.2d at 645.

The Notice of Proposed Rulemaking in the 1984 Docket specifically mentioned giving special consideration only to daytimers in comparative proceedings for those new FM stations which were to be created by Docket 80-90. However, the Commission already had under consideration in the 1982 Docket the issue of whether daytimers should receive special consideration in all comparative proceedings for any new FM stations created in the future. In its first report and order in the 1982 Docket, the Commission had deferred consideration of the issue. See 95 F.C.C.2d at 1032 n.1. On reconsideration, the Commission stated that it would take up the issue in the 1984 Docket, the proceeding commenced for the purpose of allocating the six hundred FM stations created by Docket 80-90. The Commission further stated that "[p]ersons wishing to comment further on [the issue] may do so in response to [the] outstanding Notice of Proposed Rulemaking in [the 1984 Docket]." In re Hours of Operation of Daytime-Only AM Broadcast Stations, 97 F.C.C.2d 657, 670 ("First Reconsideration Order in the 1982 Docket"), on further reconsideration, 99 F.C.C.2d 1087 (1984). This decision was published in the Federal Register on April 26, 1984. See 49 Fed. Reg. 17942.

Many parties submitted comments on the proposed daytimer preference. NBMC's comments opposed granting a preference to daytimers, suggesting that the Commission instead could simply lessen the demerit it ordinarily assigns to local broadcasters who are seeking an additional license in a comparative proceeding. Most parties, however, supported the preference for experienced daytimers.

In April 1985, the Commission released its Second Report and Order in the 1984 Docket. In the report, the Commission concluded that additional relief for daytimers was appropriate. 101 F.C.C.2d at 643. Since additional technical relief was not feasible, the Commission decided it believed that the best way to improve the daytimers' lot was to award daytimers credit in comparative proceedings. The order grants a preference to daytimers by upgrading the value of previous broadcast experience as an "integration enhancement," such that prior broadcast experience will have the same weight that already is given for the enhancement factors of minority ownership and local residence. 101 F.C.C.2d at 645.

This enhancement will be granted only if the daytimer requesting it satisfies five conditions: (1) the applicant's broadcast experience must be "based on previous substantial participation in management of a daytime-only station;" (2) the daytime-only station must be broadcasting in the same community as the proposed FM station; (3) the daytimer "must have owned the daytime-only station for three continuous years prior to designation of the FM application for hearing;" (4) the owner of the daytime-only station must "propose to be integrated in the operation of the FM station;" and (5) the daytimer "must pledge to divest itself of the daytime-only station within three years." Id. at 645-47.

A number of parties were not satisfied with the result and filed petitions for reconsideration. Most petitioners, including intervenor, agreed that daytimers ought to receive a preference, but suggested that the degree of preference should have been greater. NBMC argued for elimination or weakening of the preference. The Commission denied the petitions to the extent they sought changes in the daytimer enhancement. See In re Implementation of BC Docket 80-90 to Increase the Availability of FM Broadcast Assignments, F.C.C.2d , , 59 Rad. Reg. 2d (P & F) 1221, 1230 (1986) ("Reconsideration Order in the 1984 Docket"). The Commission "decline[d] to alter the weight accorded . . . the daytime-only upgraded enhancement factor." Id. at , 59 Rad. Reg. 2d (P & F) at 1228.

NBMC then petitioned this court pursuant to 47 U.S.C. § 402(a) and 28 U.S.C. § 2342 to review the Commission's rulings in its Second Report & Order and Reconsideration Order in the 1984 Docket regarding the daytimer preference. We are asked either to invalidate the rule or to remand to ...


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