Sections 309(a) and 310(d) of the Communications Act of 1934
(Act) empower the Federal Communications Commission (FCC) to grant
an application for renewal or transfer of a radio broadcast license
only if it determines that "the public interest, convenience, and
necessity" will be served thereby. In implementation of these
provisions, the FCC, pursuant to its rulemaking authority, issued a
Policy Statement concluding, with respect to ruling on applications
for license renewal or transfer, that the public interest is best
served by promoting diversity in a radio station's entertainment
formats through market forces and competition among broadcasters,
and that review of an applicant station's format changes was not
compelled by the Act's language or history, would not advance the
radio-listening public's welfare, and would deter innovation in
radio programming. On respondent citizen groups' petition for
review of the Policy Statement, the Court of Appeals held that it
violated the Act, concluding that the FCC's reliance on market
forces to develop diversity in programming was an unreasonable
interpretation of the Act's public interest standard, and that, in
certain circumstances, the FCC is required to regard a change in
entertainment format as a substantial and material fact requiring a
hearing to determine whether a license renewal or transfer is in
the public interest.
Held: The FCC's Policy Statement is not inconsistent
with the Act, and is a constitutionally permissible means of
implementing the Act's public interest standard. Pp.
450 U. S.
593-604.
(a) The FCC has provided a rational explanation for its
conclusion that reliance on the market is the best method of
promoting diversity in entertainment formats. It has assessed the
benefits and the harm likely to flow from Government review of
entertainment programming,
Page 450 U. S. 583
and has conclude that its statutory duties are best fulfilled by
not attempting to oversee format change. Pp.
450 U. S.
595-596.
(b) The FCC's implementation of the public interest standard,
when based on a rational weighing of competing policies, is not to
be set aide by the Court of Appeals, for "the weighing of policies
under the
public interest' standard is a task that Congress has
delegated to the Commission in the first instance." FCC v.
National Citizens Committee for Broadcasting, 436 U.
S. 775, 436 U. S. 810.
Here, the FCC's position on review of format changes reflects a
reasonable accommodation of the policy of promoting diversity in
programming and the policy of avoiding unnecessary restrictions on
licensee discretion. P. 450 U. S.
596.
(c) The Policy Statement is consistent with the legislative
history of the Act and with the FCC's traditional view that the
public interest is best served by promoting diversity in
entertainment programing through market forces. Pp.
450 U. S.
597-599.
(d) The Policy Statement does not conflict with the First
Amendment rights of listeners, since the FCC seeks to further the
interests of the listening public as a whole, and the First
Amendment does not grant individual listeners the right to have the
FCC review the abandonment of their favorite entertainment
programs. Pp.
450 U. S.
603-604.
197 U.S.App.D.C. 319, 610 F.2d 838, reversed and remanded.
WHITE, J., delivered the opinion of the Court, in which BURGER,
C.J., and STEWART, BLACKMUN, POWELL, REHNQUIST, and STEVENS, JJ.,
joined. MARSHALL, J., filed a dissenting opinion, in which BRENNAN,
J., joined,
post, p.
450 U. S.
604.
Page 450 U. S. 584
JUSTICE WHITE delivered the opinion of the Court.
Sections 309(a) and 310(d) of the Communications Act of 1934, 48
Stat. 1064, as amended, 47 U.S.C. § 151
et seq. (Act),
empower the Federal Communications Commission to grant an
application for license transfer [
Footnote 1] or renewal only if it determines that "the
public interest, convenience, and necessity" will be served
thereby. [
Footnote 2] The issue
before us is
Page 450 U. S. 585
whether there are circumstances in which the Commission must
review past or anticipated changes in a station's entertainment
programming when it rules on an application for renewal or transfer
of a radio broadcast license. The Commission's present position is
that it may rely on market forces to promote diversity in
entertainment programming, and thus serve the public interest.
This issue arose when, pursuant to its informal rulemaking
authority, the Commission issued a "Policy Statement" concluding
that the public interest is best served by promoting diversity in
entertainment formats through market forces and competition among
broadcasters, and that a change in entertainment programming is
therefore not a material factor that should be considered by the
Commission in ruling on an application for license renewal or
transfer. Respondents, a number of citizen groups interested in
fostering and preserving particular entertainment formats,
petitioned for review in the
Page 450 U. S. 586
Court of Appeals for the District of Columbia Circuit. That
court held that the Commission's Policy Statement violated the Act.
We reverse the decision of the Court of Appeals.
I
Beginning in 1970, in a series of cases involving license
transfers, [
Footnote 3] the
Court of Appeals for the District of Columbia Circuit gradually
developed a set of criteria for determining when the "public
interest" standard requires the Commission to hold a hearing to
review proposed changes in entertainment formats. [
Footnote 4] Noting that the aim of the Act is
"to secure the maximum benefits of radio to all the people of the
United State,"
National Broadcasting Co. v. United States,
319 U. S. 190,
319 U. S. 217
(1943), the Court of Appeals ruled in 1974 that
"preservation of a format [that] would otherwise disappear,
although economically and technologically viable and preferred by a
significant number of listeners, is generally in the public
interest."
Citizens Committee to Save WEFM v. FCC, 165
U.S.App.D.C. 185, 207, 506 F.2d 246, 268 (en banc). It concluded
that a change in format would not present "substantial and material
questions of fact" requiring a hearing if (1) notice of the change
had not precipitated "significant public grumbling"; (2) the
segment of the population preferring the format was too small to be
accommodated by available frequencies; (3) there was an adequate
substitute
Page 450 U. S. 587
in the service area for the format being abandoned; [
Footnote 5] or (4) the format would be
economically unfeasible even if the station were managed
efficiently. [
Footnote 6] The
court rejected the Commission's position that the choice of
entertainment formats should be left to the judgment of the
licensee, [
Footnote 7] stating
that the Commission's interpretation of the public interest
standard was contrary to the Act. [
Footnote 8]
In January, 1976, the Commission responded to these decisions by
undertaking an inquiry into its role in reviewing format changes.
[
Footnote 9] In particular, the
Commission sought public
Page 450 U. S. 588
comment on whether the public interest would be better served by
Commission scrutiny of entertainment programming or by reliance on
the competitive marketplace. [
Footnote 10]
Following public notice and comment, the Commission issued a
Policy Statement [
Footnote
11] pursuant to its rulemaking authority under the Act.
[
Footnote 12] The Commission
concluded in the Policy Statement that review of format changes was
not compelled by the language or history of the Act, would not
advance the welfare of the radio-1istening public, would pose
substantial administrative problems, and would deter innovation in
radio programming. In support of its position, the Commission
quoted from
FCC v. Sanders Brothers Radio Station,
309 U. S. 470,
309 U. S. 475
(1940):
"Congress intended to leave competition in the business of
broadcasting where it found it, to permit a licensee . . . to
survive or succumb according to his ability to make his programs
attractive to the public. [
Footnote 13]"
The Commission also emphasized that a broadcaster
Page 450 U. S. 589
is not a common carrier, [
Footnote 14] and therefore should not be subjected to a
burden similar to the common carrier's obligation to continue to
provide service if abandonment of that service would conflict with
public convenience or necessity. [
Footnote 15]
The Commission also concluded that practical considerations as
well as statutory interpretation supported its reluctance to
regulate changes in formats. Such regulation would require the
Commission to categorize the formats of a station's prior and
subsequent programming to determine whether
Page 450 U. S. 590
a change in format had occurred; to determine whether the prior
format was "unique"; [
Footnote
16] and to weigh the public detriment resulting from the
abandonment of unique format against the public benefit resulting
from that change. The Commission emphasized the difficulty of
objectively evaluating the strength of listener preferences, of
comparing the desire for diversity within a particular type of
programming to the desire for a broader range of program formats
and of assessing the financial feasibility of a unique format.
[
Footnote 17]
Finally, the Commission explained why it believed that market
forces were the best available means of producing diversity in
entertainment formats. First, in large markets, competition among
broadcasters had already produced "an almost bewildering array of
diversity" in entertainment formats. [
Footnote 18] Second, format allocation by market forces
accommodates listeners' desires for diversity within a given
format, and also produces a variety of formats. [
Footnote 19] Third, the market is far more
flexible than governmental regulation and responds more quickly to
changing public tastes. Therefore, the Commission concluded
that
"the market is the allocation mechanism of preference for
entertainment formats, and . . . Commission supervision in this
area will not be conducive either to producing program diversity
[or] satisfied radio listeners. [
Footnote 20] "
Page 450 U. S. 591
The Court of Appeals, sitting en banc, held that the
Commission's policy was contrary to the Act as construed and
applied in the court's prior format decisions. 197 U.S.App.D.C.
319, 610 F.2d 838 (1979). The court questioned whether the
Commission had rationally and impartially reexamined its position,
[
Footnote 21] and
particularly criticized the Commission's failure to disclose a
staff study on the effectiveness of market allocation of formats
before it issued the Policy Statement. [
Footnote 22] The court then responded to the
Commission's criticisms of the format doctrine. First, although
conceding that market forces generally lead to diversification of
formats, it concluded that the market only imperfectly reflects
listener preferences, [
Footnote
23] and that the Commission is statutorily obligated
Page 450 U. S. 592
to review format changes whenever there is "strong
prima
facie evidence that the market has, in fact, broken down."
Id. at 332, 610 F.2d at 851. Second, the court stated that
the administrative problems posed by the format doctrine were not
insurmountable. Hearings would only be required in a small number
of cases, and the Commission could cope with problems such as
classifying radio format by adopting "a rational classification
schema."
Id. at 334, 610 F.2d at 853. Third, the court
observed that the Commission had not demonstrated that the format
doctrine would deter innovative programming. [
Footnote 24] Finally, the court explained that
it had not directed the Commission to engage in censorship or to
impose common carrier obligations on licensees:
WEFM did
not authorize the Commission to interfere with licensee programming
choices or to force retention of an existing format; it merely
stated that the Commission had the power to consider a station's
format in deciding whether license renewal or transfer would be
consistent with the public interest. 197 U.S.App.D.C. at 332-333,
610 F.2d at 851-852.
Although conceding that it possessed neither the expertise nor
the authority to make policy decisions in this area, the Court of
Appeals asserted that the format doctrine was "law," not "policy,"
[
Footnote 25] and was of the
view that the Commission had not disproved the factual assumptions
underlying the format
Page 450 U. S. 593
doctrine. [
Footnote 26]
Accordingly, the court declared that the Policy Statement was
"unavailing and of no force and effect."
Id. at 339, 610
F.2d at 858. [
Footnote
27]
II
Rejecting the Commission's reliance on market forces to develop
diversity in programming as an unreasonable interpretation of the
Act's public interest standard, the Court of Appeals held that, in
certain circumstances, the Commission is required to regard a
change in entertainment format as a substantial and material fact
in deciding whether a license renewal or transfer is in the public
interest. With all due respect, however, we are unconvinced that
the Court of Appeals' format doctrine is compelled by the Act, and
that the Commission's interpretation of the public interest
standard must therefore be set aside.
It is common ground that the Act does not define the term
"public interest, convenience, and necessity." [
Footnote 28] The Court has characterized
the public interest standard of the Act as "a supple instrument for
the exercise of discretion by the expert body which Congress has
charged to carry out its legislative policy."
FCC v. Pottsville
Broadcasting Co., 309 U. S. 134,
309 U. S. 138
(1940). Although it was declared in
National
Broadcasting
Page 450 U. S. 594
Co. v. United States, that the goal of the Act is "to
secure the maximum benefits of radio to all the people of the
United States," 319 U.S. at
319 U. S. 217,
it was also emphasized that Congress had granted the Commission
broad discretion in determining how that goal could best be
achieved. The Court accordingly declined to substitute its own
views on the best method of encouraging effective use of the radio
for the views of the Commission.
Id. at
319 U. S. 218.
Similarly, in
FCC v. National Citizens Committee for
Broadcasting, 436 U. S. 775
(1978), we deemed the policy of promoting the widest possible
dissemination of information from diverse sources to be consistent
with both the public interest standard and the First Amendment,
id. at
436 U. S. 795,
but emphasized the Commission's broad power to regulate in the
public interest. We noted that the Act permits the Commission to
promulgate "such rules and regulations, . . . not inconsistent with
law, as may be necessary to carry out the provisions of [the Act],"
[
Footnote 29] and that this
general rulemaking authority permits the Commission to implement
its view of the public interest standard of the Act "so long as
that view is based on consideration of permissible factors and is
otherwise reasonable."
Id. at
436 U. S. 793.
[
Footnote 30] Furthermore,
we recognized that the Commission's decisions must sometimes rest
on judgment and prediction, rather than pure factual
determinations. In such cases complete factual support for the
Commission's ultimate conclusions
Page 450 U. S. 595
is not required, since "
a forecast of the direction in which
future public interest lies necessarily involves deductions based
on the expert knowledge of the agency.'" [Footnote 31]
The Commission has provided a rational explanation for its
conclusion that reliance on the market is the best method of
promoting diversity in entertainment formats. The Court of Appeals
and the Commission agree that, in the vast majority of cases,
market forces provide sufficient diversity. The Court of Appeals
favors Government intervention when there is evidence that market
forces have deprived the public of a "unique" format, while the
Commission is content to rely on the market, pointing out that, in
many cases, when a station changes its format, other stations will
change their formats to attract listeners who preferred the
discontinued format. The Court of Appeals places great value on
preserving diversity among formats, while the Commission emphasizes
the value of intra-format as well as inter-format diversity.
Finally, the Court of Appeals is convinced that review of format
changes would result in a broader range of formats, while the
Commission believes that Government intervention is likely to deter
innovative programming.
In making these judgments, the Commission has not forsaken its
obligation to pursue the public interest. On the contrary, it has
assessed the benefits and the harm likely to flow from Government
review of entertainment programming, and, on balance, has concluded
that its statutory duties are best fulfilled by not attempting to
oversee format changes. This decision was in major part based on
predictions as to the probable conduct of licensees and the
functioning of the broadcasting market and on the Commission's
assessment of its capacity to make the determinations required by
the format doctrine. The Commission concluded that,
"'[e]ven after
Page 450 U. S. 596
all relevant facts ha[d] been fully explored in an evidentiary
hearing, [the Commission] would have no assurance that a decision
finally reached by [the Commission] would contribute more to
listener satisfaction than the result favored by station
management.'"
Policy Statement, 60 F.C.C.2d 858, 865 (1976). It did
not assert that reliance on the marketplace would achieve a perfect
correlation between listener preferences and available
entertainment programming. Rather, it recognized that a perfect
correlation would never be achieved, and it concluded that the
marketplace alone could best accommodate the varied and changing
tastes of the listening public. These predictions are within the
institutional competence of the Commission.
Our opinions have repeatedly emphasized that the Commission's
judgment regarding how the public interest is best served is
entitled to substantial judicial deference.
See, e.g., FCC v.
National Citizens Committee for Broadcasting, supra; FCC v. WOKO,
Inc., 329 U. S. 223,
329 U. S. 229
(1946). Furthermore, diversity is not the only policy the
Commission must consider in fulfilling its responsibilities under
the Act. The Commission's implementation of the public interest
standard, when based on a rational weighing of competing policies,
is not to be set aside by the Court of Appeals, for "the weighing
of policies under the
public interest' standard is a task that
Congress has delegated to the Commission in the first instance."
FCC v. National Citizens Committee for Broadcasting, supra
at 436 U. S. 810.
The Commission's position on review of format changes reflects a
reasonable accommodation of the policy of promoting diversity in
programming and the policy of avoiding unnecessary restrictions on
licensee discretion. As we see it, the Commission's Policy
Statement is in harmony with cases recognizing that the Act seeks
to preserve journalistic discretion while promoting the interests
of the listening public. [Footnote 32]
Page 450 U. S. 597
The Policy Statement is also consistent with the legislative
history of the Act. Although Congress did not consider the precise
issue before us, it did consider and reject a proposal to allocate
a certain percentage of the stations to particular types of
programming. [
Footnote 33]
Similarly, one of the bills submitted prior to passage of the Radio
Act of 1927 [
Footnote 34]
included a provision requiring stations to comply with programming
priorities based on subject matter. [
Footnote 35] This provision was eventually deleted, since
it was considered to border on censorship. [
Footnote 36] Congress subsequently added a
section to the Radio Act of 1927 expressly prohibiting censorship
and other "interfer[ence] with the right of free speech by means of
radio communication." [
Footnote
37] That section was retained in the Communications Act.
[
Footnote 38] As we read the
legislative history of the
Page 450 U. S. 598
Act, Congress did not unequivocally express its disfavor of
entertainment format review by the Commission, but neither is there
substantial indication that Congress expected the public interest
standard to
require format regulation by the Commission.
The legislative history of the Act does not support the Court of
Appeals, and provides insufficient basis for invalidating the
agency's construction of the Act.
In the past, we have stated that "the construction of a statute
by those charged with its execution should be followed unless there
are compelling indications that it is wrong. . . ." [
Footnote 39] Prior to 1970, the Commission
consistently stated that the choice of programming formats should
be left to the licensee. [
Footnote 40] In 1971, the Commission restated that
position, but announced that any application for license transfer
or renewal involving a substantial change in program format would
have to be reviewed in light of the Court of Appeals' decision in
Citizens Committee to Preserve the Voice of the Arts in
Atlanta, 141 U.S.App.D.C. 109, 436 F.2d 267 (1970), in which
the Court of Appeals first articulated the format doctrine.
[
Footnote 41] In 1973, in a
statement accompanying
Page 450 U. S. 599
the grant of the transfer application that was later challenged
in
WEFM, a majority of the Commissioners joined in a
commitment to
"take an extra hard look at the reasonableness of any proposal
which would deprive a community of its only source of a particular
type of programming. [
Footnote
42]"
However, the Commission's later Policy Statement concluded that
this approach was "neither administratively tenable nor necessary
in the public interest." [
Footnote 43] It is thus apparent that, although the
Commission was obliged to modify its policies to conform to the
Court of Appeals' format doctrine, the Policy Statement reasserted
the Commission's traditional preference for achieving diversity in
entertainment programming through market forces.
Page 450 U. S. 600
III
It is contended that, rather than carrying out its duty to make
a particularized public interest determination on every application
that comes before it, the Commission, by invariably relying on
market forces, merely assumes that the public interest will be
served by changes in entertainment format. Surely, it is argued,
there will be some format changes that will be so detrimental to
the public interest that inflexible application of the Commission's
Policy Statement would be inconsistent with the Commission's
duties. But radio broadcasters are not required to seek permission
to make format changes. The issue of past or contemplated
entertainment format changes arises in the courses of renewal and
transfer proceedings; if such an application is approved, the
Commission does not merely assume, but affirmatively determines,
that the requested renewal or transfer will serve the public
interest. Under its present policy, the Commission determines
whether a renewal or transfer will serve the public interest
without reviewing past or proposed changes in entertainment format.
This policy is based on the Commission's judgment that market
forces, although they operate imperfectly, not only will more
reliably respond to listener preference than would format oversight
by the Commission, but also will serve the end of increasing
diversity in entertainment programming. This Court has approved of
the Commission's goal of promoting diversity in radio programming,
FCC v. Midwest Video Corp., 440 U.
S. 689,
440 U. S. 699
(1979), but the Commission is nevertheless vested with broad
discretion in determining how much weight should be given to that
goal and what policies should be pursued in promoting it. The Act
itself, of course, does not specify how the Commission should make
its public interest determinations. A major underpinning of its
Policy Statement is the Commission's conviction, rooted in its
experience, that renewal
Page 450 U. S. 601
and transfer cases should not turn on the Commission's presuming
to grasp, measure, and weigh the elusive and difficult factors
involved in determining the acceptability of changes in
entertainment format. To assess whether the elimination of a
particular "unique" entertainment format would serve the public
interest, the Commission would have to consider the benefit as well
as the detriment that would result from the change. Necessarily,
the Commission would take into consideration not only the number of
listeners who favor the old and the new programming but also the
intensity of their preferences. It would also consider the effect
of the format change on diversity within formats as well as on
diversity among formats. The Commission is convinced that its
judgments in these respects would be subjective in large measure,
and would only approximately serve the public interest. It is also
convinced that the market, although imperfect, would serve the
public interest as well or better by responding quickly to changing
preferences and by inviting experimentation with new types of
programming. Those who would overturn the Commission's Policy
Statement do not take adequate account of these considerations.
[
Footnote 44]
It is also contended that, since the Commission has
responded
Page 450 U. S. 602
to listener complaints about nonentertainment programming, it
should also review challenged changes in entertainment formats.
[
Footnote 45] But the
difference between the Commission' treatment of nonentertainment
programming and its treatment of entertainment programming is not
as pronounced as it may seem. Even in the area of nonentertainment
programming, the Commission has afforded licensees broad discretion
in selecting programs. Thus, the Commission has stated that
"a substantial and material question of fact [requiring an
evidentiary hearing] is raised
only when it appears that
the licensee has abused its broad discretion by acting unreasonably
or in bad faith."
Mississippi Authority for Educational TV, 71 F.C.C.2d
1296, 1308 (1979). Furthermore, we note that the Commission has
recently reexamined its regulation of commercial radio broadcasting
in light of changes in the structure of the radio industry.
See
Notice of Inquiry and Proposed Rulemaking, In the Matter of
Deregulation of Radio, 73 F.C.C.2d 457 (1979). As a result of
that reexamination, it has eliminated rules requiring maintenance
of comprehensive program logs, guidelines on
Page 450 U. S. 603
the amount of nonentertainment programming radio stations must
offer, formal requirements governing ascertainment of community
needs, and guidelines limiting commercial time.
See
Deregulation of Radio, 46 Fed.Reg. 13888 (1981) (to be
codified at 47 CFR Parts O and 73).
These cases do not require us to consider whether the
Commission's present or past policies in the area of
nonentertainment programming comply with the Act. We attach some
weight to the fact that the Commission has consistently expressed a
preference for promoting diversity in entertainment programming
through market forces, but our decision ultimately rests on our
conclusion that the Commission has provided a reasonable
explanation for this preference in its Policy Statement.
We decline to overturn the Commission's Policy Statement, which
prefers reliance on market forces to its own attempt to oversee
format changes at the behest of disaffected listeners. Of course,
the Commission should be alert to the consequences of its policies,
and should stand ready to alter its rule if necessary to serve the
public interest more fully. As we stated in
National
Broadcasting Co. v. United States:
"If time and changing circumstances reveal that the 'public
interest' is not served by application of the Regulations, it must
be assumed that the Commission will act in accordance with its
statutory obligations."
319 U.S. at
319 U. S.
225.
IV
Respondents contend that the Court of Appeals' judgment should
be affirmed because, even if not violative of the Act, the Policy
Statement conflicts with the First Amendment rights of listeners
"to receive suitable access to social, political, esthetic, moral,
and other ideas and experiences."
Red Lion Broadcasting Co. v.
FCC, 395 U. S. 367,
395 U. S. 390
(1969).
Red Lion held that the Commission's "fairness
doctrine" was consistent with the public interest standard of the
Communications
Page 450 U. S. 604
Act and did not violate the First Amendment, but rather enhanced
First Amendment values by promoting "the presentation of vigorous
debate of controversial issues of importance and concern to the
public."
Id. at
367 U. S. 385.
Although observing that the interests of the people as a whole were
promoted by debate of public issues on the radio, we did not imply
that the First Amendment grants individual listeners the right to
have the Commission review the abandonment of their favorite
entertainment programs. The Commission seeks to further the
interests of the listening public as a whole by relying on market
forces to promote diversity in radio entertainment formats and to
satisfy the entertainment preferences of radio listeners. [
Footnote 46] This policy does not
conflict with the First Amendment. [
Footnote 47]
Contrary to the judgment of the Court of Appeals, the
Commission's Policy Statement is not inconsistent with the Act. It
is also a constitutionally permissible means of implementing the
public interest standard of the Act. Accordingly, the judgment of
the Court of Appeals is reversed, and the case is remanded for
further proceedings consistent with this opinion.
So ordered.
* Together with No. 79-825,
Insilco Broadcasting Corp. et
al. v. WNCN Listeners Guild et al.; No. 79-826,
American
Broadcasting Cos., Inc., et al. v. WNCN Listeners Guild et
al.; and No. 79-827,
National Association of Broadcasters
et al. v. WNCN Listeners Guild et al., also on certiorari to
the same court.
[
Footnote 1]
We shall refer to transfers and assignments of licenses as
"transfers."
[
Footnote 2]
Title 47 U.S.C. § 309(a) provides:
"Subject to the provisions of this section, the Commission shall
determine, in the case of each application filed with it to which
section 308 of this title applies, whether the public interest,
convenience, and necessity will be served by the granting of such
application, and, if the Commission, upon examination of such
application and upon consideration of such other matters as the
Commission may officially notice, shall find that public interest,
convenience, and necessity would be served by the granting thereof,
it shall grant such application."
Title 47 U.S.C. § 310(d) provides in part:
"No construction permit or station license, or any rights
thereunder shall be transferred, assigned, or disposed of in any
manner, voluntarily or involuntarily, directly or indirectly, or by
transfer of control of any corporation holding such permit or
license, to any person except upon application to the Commission
and upon finding by the Commission that the public interest,
convenience, and necessity will be served thereby."
The Act requires broadcasting station licensees to apply for
license renewal every three years. 47 U.S.C. § 307(d). It provides
that the Commission shall grant the application for renewal if it
determines that the public interest, convenience, and necessity
will be served thereby. §§ 307(a), (d), 309(a).
Section 309(d)(1) of the Act provides that any party in interest
may petition the Commission to deny an application for license
transfer or renewal, but the petition must contain specific
allegations of fact sufficient to show that granting the
application would be "prima facie inconsistent" with the public
interest. If the Commission determines on the basis of the
application, the pleadings filed, or other matters which it may
officially notice that no substantial and material questions of
fact are presented, it may grant the application and deny the
petition without conducting a hearing. § 309(d)(2). However, if a
substantial and material question of fact is presented or if the
Commission is unable to determine that granting the application
would be consistent with the public interest, the Commission must
conduct a hearing on the application. § 309(d)(2).
[
Footnote 3]
Citizens Committee to Save WEFM v. FCC, 165
U.S.App.D.C. 185, 506 F.2d 246 (1974) (en banc);
Citizens
Committee to Keep Progressive Rock v. FCC, 156 U.S.App.D.C.
16, 478 F.2d 926 (1973);
Lakewood Broadcasting Service, Inc. v.
FCC, 156 U.S.App.D.C. 9, 478 F.2d 919 (1973);
Hartford
Communications Committee v. FCC, 151 U.S.App.D.C. 354, 467
F.2d 408 (1972);
Citizens Committee to Preserve the Voice of
the Arts in Atlanta v. FCC, 141 U.S.App.D.C. 109, 436 F.2d 263
(1970).
[
Footnote 4]
We shall refer to the Court of Appeals' views on when the
Commission must review changes in entertainment format as the
"format doctrine," and we shall often refer to a change in
entertainment programming by a radio broadcaster as a change in
format.
[
Footnote 5]
In
Citizens Committee to Save WEFM v. FCC, for example,
the court directed the Commission to consider whether a "fine arts"
format was a reasonable substitute for a classical music format.
165 U.S.App.D.C. at 203-204, 506 F.2d at 264 265. The court
observed that 19th-century classical music and 20th-century
classical music could be classified as different formats, since
"the loss of either would unquestionably lessen diversity."
Id. at 204, n. 28, 506 F.2d at 265, n. 28.
[
Footnote 6]
These criteria were summarized by the Court of Appeals in the
opinion below. 197 U.S.App.D.C. 319, 323-324, 610 F.2d 838, 842-843
(1979). It was also stated that the format doctrine logically
applies to renewal, as well as transfer, applications. The court
noted that a mid-term format change would not be considered until
the broadcaster applied for license renewal.
Id. at 330,
and n. 29, 610 F.2d at 849, and n. 29.
See also Citizens
Committee to Preserve the Voice of the Arts in Atlanta v. FCC,
supra at 118, 436 F.2d at 272.
[
Footnote 7]
See Citizens Committee to Preserve the Voice of the Arts in
Atlanta v. FCC, supra at 113, 436 F.2d at 267.
See
also 197 U.S.App.D.C. at 330, n. 31, 610 F.2d at 849, n.
31.
[
Footnote 8]
Citizens Committee to Save WEFM v. FCC, supra, at 207,
and n. 34, 506 F.2d at 268, and n. 34.
Although the issue before the Court of Appeals in each of the
format cases was whether a hearing was required, the court warned
the Commission in
Citizens Committee to Keep Progressive
Rock that its public interest determination would also be
subject to judicial review:
"[F]ailure to render a reasoned decision will be, as always,
reversible error. No more is required, no less is accepted."
156 U.S.App.D.C. at 24, 478 F.2d at 934.
[
Footnote 9]
Notice of Inquiry, Development of Policy re: Changes in the
Entertainment Formats of Broadcast Stations, 57 F.C.C.2d 580
(1976).
[
Footnote 10]
The Commission also invited interested parties to consider the
impact of the format doctrine on First Amendment values.
[
Footnote 11]
Memorandum Opinion and Order, 60 F.C.C.2d 858 (1976)
(
Policy Statement),
reconsideration denied, 66
F.C.C.2d 78 (1977).
[
Footnote 12]
Section 303(r) of the Act, 47 U.S.C. § 303(r), provides that
"the Commission from time to time, as public convenience,
interest, or necessity requires, shall . . . [m]ake such rules and
regulations and prescribe such restrictions and conditions, not
inconsistent with law, as may be necessary to carry out the
provisions of [the Act]."
[
Footnote 13]
The Commission observed that radio broadcasters naturally
compete in the area of program formats, since there is virtually no
other form of competition available. A staff study of program
diversity in major markets supported the Commission's view that
competition is effective in promoting diversity in entertainment
formats.
Policy Statement, supra at 861.
The
Notice of Inquiry also explained the Commission's
reasons for relying on competition to provide diverse entertainment
formats:
"Our traditional view has been that the station's entertainment
format is a matter best left to the discretion of the licensee or
applicant, since he will tend to program to meet certain
preferences of the area and fill significant voids which are left
by the programming of other stations. The Commission's accumulated
experience indicates that . . . [f]requently, when a station
changes its format, other stations in the area adjust or change
their formats in an effort to secure the listenership of the
discontinued format."
57 F.C.C.2d at 583.
[
Footnote 14]
Section 3(h) of the Act provides that "a person engaged in radio
broadcasting shall not . . . be deemed a common carrier." 47 U.S.C.
§ 153(h).
See also FCC v. Sanders Brothers Radio Station,
309 U. S. 470,
309 U. S. 474
(1940) ("[B]roadcasters are not common carriers, and are not to be
dealt with as such. Thus, the [Communications] Act recognizes that
the field of broadcasting is one of free competition") (footnote
omitted).
[
Footnote 15]
The Commission discussed the problems arising from "the
obligation to continue service" created by the Court of Appeals'
format doctrine. The Commission apparently used this phrase to
describe those cases in which it thought the Court of Appeals would
hold that an application for license transfer or renewal should
have been denied because the abandonment of a unique entertainment
format was inconsistent with the public interest. Although the
format cases only addressed whether a hearing was required, the
Court of Appeals implied that, in some situations, the Commission
would be required to deny an application because of a change in
entertainment format.
See Citizens Committee to Keep
Progressive Rock v. FCC, 156 U.S.App.D.C. at 24, 478 F.2d at
934.
The Commission also addressed the "constitutional dimension" of
the format doctrine. It concluded that the doctrine would be likely
to deter many licensees from experimenting with new forms of
entertainment programming, since the licensee could be burdened
with the expense of participating in a hearing before the
Commission if, for some reason, it wished to abandon the
experimental format. Thus,
"[t]he existence of the obligation to continue service . . .
inevitably deprives the public of the best efforts of the broadcast
industry and results in an inhibition of constitutionally protected
forms of communication with no off-setting justifications, either
in terms of specific First Amendment or diversity-related values or
in broader public interest terms."
Policy Statement, supra, at 865.
[
Footnote 16]
In the
Notice of Inquiry, the Commission discussed the
difficult task of categorizing formats, noting that the Court of
Appeals had suggested in the WEFM case that 19th-century classical
music should be distinguished from 20th-century classical music.
Notice of Inquiry, supra at 583, and n. 2.
[
Footnote 17]
Policy Statement, 60 F.C.C.2d at 862-864.
[
Footnote 18]
Id. at 863.
[
Footnote 19]
The Commission pointed out that a significant segment of the
public may strongly prefer one station to another even if both
stations play the same type of music. Although it would be
difficult for the Commission to compare the strength of
intra-format preferences to the strength of inter-format
preferences, market forces would naturally respond to intra-format
preferences, albeit in an imperfect manner.
Id. at
863-864.
[
Footnote 20]
Id. at 866, n. 8.
[
Footnote 21]
The court was of the view that the Commission's "Notice of
Inquiry" revealed a substantial bias against the
WEFM
decision, and that the Commission had overstated the administrative
problems created by the format doctrine.
[
Footnote 22]
The study was released prior to the Commission's denial of
reconsideration of its Policy Statement. The court questioned
whether the public had had an adequate opportunity to comment on
the study, but found it unnecessary to consider whether the Policy
Statement should be set aside on that ground:
"Petitioners urge this defect as an independent ground for
overturning the Commission. We agree that the study does raise
serious questions about the overall rationality and fairness of the
Commission's decision. However, because certain broader defects, of
which the study is symptomatic, are fatal to the Commission's
action, we need not decide whether the failure to obtain public
comment on the study is itself of sufficient gravity to warrant
rejection of the
Policy Statement."
197 U.S.App.D.C. at 328, n. 24, 610 F.2d at 847, n. 24.
Respondents urge the Court to set aside the Policy Statement
because of this alleged procedural error if the Court determines
that the Commission's views do not conflict with the Act or the
First Amendment. We have considered the submissions of the parties
and do not consider the action of the Commission, even if a
procedural lapse, to be a sufficient ground for reopening the
proceedings before the Commission.
[
Footnote 23]
The court observed, as it had in
WEFM, that, because
broadcasters rely on advertising revenue, they tend to serve
persons with large discretionary incomes. 197 U.S.App.D.C. at 332,
610 F.2d at 851. The dissenting opinion noted that the Commission
had not rejected this assumption.
Id. at 341, 610 F.2d at
861.
[
Footnote 24]
The court stated that the Commission's staff study demonstrated
that licensees had continued to develop diverse entertainment
formats after the
WEFM decision.
[
Footnote 25]
The court acknowledged that Congress had entrusted to the
Commission the task of ensuring that license grants are used in the
public interest. Nevertheless, the Commission's position on review
of entertainment format changes "could not be sustained even when
all due deference was given that construction." 197 U.S.App.D.C. at
336, n. 51, 610 F.2d at 855, n. 51.
[
Footnote 26]
The Court of Appeals was not satisfied that the market
functioned adequately in every case; nor was it persuaded that the
loss of a unique format is comparable to the loss of a favorite
station within a particular format.
[
Footnote 27]
Two judges dissented, arguing that the Policy Statement should
have been upheld, since the Commission had made a reasonable
judgment that the format doctrine was unnecessary to further the
public interest. A third judge agreed with the dissenters that the
majority had not accorded sufficient deference to the Commission's
judgment, but concluded that the Commission's order should be
vacated so that the record could be reopened to permit public
comment on the staff study.
[
Footnote 28]
The Act provides in general terms that the Commission shall
perform administrative functions "as public convenience, interest,
or necessity requires." 47 U.S.C. § 303.
[
Footnote 29]
See 47 U.S.C. § 303(r), quoted in
n 12,
supra.
[
Footnote 30]
Section 10(e) of the Administrative Procedure Act provides in
part:
"The reviewing court shall -- "
"
* * * *"
"(2) hold unlawful and set aside agency action, findings, and
conclusions found to be -- "
"(A) arbitrary, capricious, an abuse of discretion, or otherwise
not in accordance with law. . . ."
5 U.S.C. § 706(2)(A). In
FCC v. National Citizens Committee
for Broadcasting, we observed that a reviewing court applying
this standard "
is not empowered to substitute its judgment for
that of the agency.'" 436 U.S. at 436 U. S. 803,
quoting Citizens to Preserve Overton Park v. Volpe,
401 U. S. 402,
401 U. S. 416
(1971).
[
Footnote 31]
FCC v. National Citizens Committee for Broadcasting,
supra at
436 U. S. 814,
quoting
FPC v. Transcontinental Gas Pipe Line Corp.,
365 U. S. 1,
365 U. S. 29
(1961) .
[
Footnote 32]
See, e.g., FCC v. Midwest Video Corp., 440 U.
S. 689,
440 U. S. 705
(1979) (recognizing the "policy of the Act to preserve editorial
control of programming in the licensee");
Columbia Broadcasting
System, Inc. v. Democratic National Committee, 412 U. S.
94,
412 U. S. 120
(1973) (discussing the Commission's duty to chart a workable
"middle course" to preserve "essentially private broadcast
journalism held only broadly accountable to public interest
standards").
[
Footnote 33]
Congress rejected a proposal to allocate 25% of all radio
stations to educational, religious, agricultural, and similar
nonprofit associations.
See 78 Cong.Rec. 8843-8846
(1934).
[
Footnote 34]
44 Stat. 1162. The Radio Act of 1927 was the predecessor to the
Communications Act.
[
Footnote 35]
This bill would have required the administrative agency created
by the Radio Act of 1927 to prescribe "priorities as to subject
matter to be observed by each class of licensed stations." H.R.
7357, 68th Cong., 1st Sess., § 1(B) (1924).
[
Footnote 36]
Hearings on H.R. 5589 before the House Committee on the Merchant
Marine and Fisheries, 69th Cong., 1st Sess., 39 (1926).
[
Footnote 37]
44 Stat. 1172-1173.
See Hearings on S. 1 and S. 1754
before the Senate Committee on Interstate Commerce, 69th Cong., 1st
Sess., 121 (1926); H.R.Conf.Rep. No. 1886, 69th Cong., 2d Sess.,
16-19 (1927).
[
Footnote 38]
Section 326 of the Act provides:
"Nothing in this chapter shall be understood or construed to
give the Commission the power of censorship over the radio
communications or signals transmitted by any radio station, and no
regulation or condition shall be promulgated or fixed by the
Commission which shall interfere with the right of free speech by
means of radio communication."
47 U.S.C. § 326.
In
FCC v. Pacifica Foundation, 438 U.
S. 726 (1978), the Court concluded that, although this
section prohibits the Commission from editing proposed broadcasts
in advance, it does not preclude subsequent review of program
content.
Id. at
438 U. S. 735,
438 U. S.
737.
[
Footnote 39]
Red Lion Broadcasting Co. v. FCC, 395 U.
S. 367,
395 U. S. 381
(1969).
See also Columbia Broadcasting System, Inc. v.
Democratic National Committee, supra at
412 U. S.
121.
[
Footnote 40]
See, e.g., En Banc Programming Inquiry, 44 F.C.C. 2303,
2308-2309 (1960);
Bay Radio, Inc., 22 F.C.C. 1351, 1364
(1957).
[
Footnote 41]
Primer on Ascertainment of Community Problems by Broadcast
Applicants, 27 F.C.C.2d 650, 679-680 (1971).
The Commission explained:
"Our view has been that the station's program format is a matter
best left to the discretion of the licensee or applicant, since, as
a matter of public acceptance and economic necessity, he will tend
to program to meet the preferences of the area and fill whatever
void is left by the programming of other stations."
Id. at 679.
The Commission noted that this policy only applied to
entertainment programming.
"It does not include matters such as an increase in commercial
matter or decrease in the amount of non-entertainment programming,
both of which are subjects of review and concern, and have been for
some time."
Id. at 679, n. 15.
The Commission continues to review nonentertainment programming
to some degree. In its memorandum opinion denying reconsideration
of the Policy Statement, the Commission explained that it has
limited its review of programming to preserve licensee discretion
in this area:
"To the extent that the Commission exercises some direct control
of programming, it is primarily through the fairness doctrine and
political broadcasting rules pursuant to Section 315. In both
cases, the Commission's role is limited to directing the licensee
to broadcast some
additional material so as not to
completely ignore the viewpoints of others in the community. . . .
These regulations are extremely narrow, the Commission's role is
limited by strictly defined standards, and the licensee is left
with virtually unrestricted discretion in programming most of the
broadcast day. In contrast, [under the format doctrine] we would be
faced with the prospect of rejecting virtually the entire broadcast
schedule proposed by the private licensee. . . ."
66 F.C.C.2d at 83.
[
Footnote 42]
Zenith Radio Corp., 40 F.C.C.2d 223, 231 (1973)
(additional views of Chairman Burch).
[
Footnote 43]
Policy Statement, 60 F.C.C.2d at 86, n. 8.
[
Footnote 44]
It is asserted that the Policy Statement violates the Act
because it does not contain a "safety valve" procedure. The dissent
relies primarily on
National Broadcasting Co. v. United
States, 319 U. S. 190
(1943), and
United States v. Storer Broadcasting Co.,
351 U. S. 192
(1956). In
National Broadcasting Co. v. United States, the
Court noted that license applicants had been advised by the
Commission that they could call to its attention any reason why the
challenged chain broadcasting rule should be modified or held
inapplicable to their situations. 319 U.S. at
319 U. S. 207.
In
United States v. Storer Broadcasting Co., the Court
observed that, under the Commission's regulations, an applicant who
alleged "adequate reasons why the [Multiple Ownership] Rules should
be waived or amended" would be granted a hearing. 351 U.S. at
351 U. S. 205.
In each case the Court considered the validity of the challenged
rules in light of the flexibility provided by the procedures.
However, it did not hold that the Commission may never adopt a rule
that lacks a waiver provision.
[
Footnote 45]
The Commission, in the past, has sought to promote "balanced"
radio programming, but these efforts did not involve Commission
review of changes in entertainment format. For example, in the
En Banc Programming Inquiry, 44 F.C.C. 2303 (1960), relied
on by the dissent, the Commission identified 14 types of
programming that it considered "major elements usually necessary to
meet the public interest."
Id. at 2314. One of these
categories was "entertainment programs." The Commission suggested
only that a licensee should usually provide some entertainment
programming: it did not require licensees to provide specific types
of entertainment programming. Moreover, the Commission emphasized
that a licensee is afforded broad discretion in determining what
programs should be offered to the public:
"The ascertainment of the needed elements of the broadcast
matter to be provided by a particular licensee for the audience he
is obligated to serve remains primarily the function of the
licensee. His honest and prudent judgments will be accorded great
weight by the Commission. Indeed, any other course would tend to
substitute the judgment of the Commission for that of the
licensee."
Ibid.
[
Footnote 46]
Respondents place particular emphasis on the role of foreign
language programming in providing information to
non-English-speaking citizens. However, the Policy Statement only
applies to entertainment programming. It does not address the
broadcaster's obligation to respond to community needs in the area
of informational programming.
See Tr. of Oral Arg. 81
(remarks of counsel for the Commission).
[
Footnote 47]
Cf. Columbia Broadcasting System, Inc. v. Democratic
National Committee, 412 U. S. 94 (1973)
(the First Amendment does not require the Commission to adopt a
"fairness doctrine" with respect to paid editorial
advertisements).
JUSTICE MARSHALL, with whom JUSTICE BRENNAN joins,
dissenting.
Under §§ 309(a) and 310(d) of the Communications Act of 1934, 48
Stat. 1064, as amended, 47 U.S.C. § 151
et seq.
Page 450 U. S. 605
(Act), the Federal Communications Commission (Commission) may
not approve an application for a radio license transfer,
assignment, or renewal unless it finds that such change will serve
"the public interest, convenience, and necessity." [
Footnote 2/1] Any party in interest may petition
the Commission to deny the application, § 309(d)(1), and the
Commission must hold hearing if "a substantial and material
question of fact is presented," § 309(d)(2). In my judgment, the
Court of Appeals correctly held that, in certain limited
circumstances, the Commission may be obliged to hold a hearing to
consider whether a proposed change in a licensee's entertainment
program format is in the "public interest." [
Footnote 2/2] Accordingly, I would affirm the Judgment
of the Court of Appeals insofar as it vacated the Commission's
"Policy Statement." [
Footnote
2/3]
I
At the outset, I should point out that my understanding of the
Court of Appeals' format cases is very different from the
Commission's. [
Footnote 2/4] Both
in its Policy Statement and in its brief before this Court, the
Commission has insisted that the format doctrine espoused by the
Court of Appeals "favor[s] a system of pervasive governmental
regulation," [
Footnote 2/5]
requiring "
comprehensive, discriminating, and continuing state
surveillance.'" [Footnote
2/6]
Page 450 U. S.
606
The Commission further contends that enforcement of the
format doctrine would impose "common carrier" obligations on
broadcasters and substitute for "the imperfect system of free
competition . . . a system of broadcast programming by government
decree." [Footnote 2/7] Were this
an accurate description of the format doctrine, I would join the
Court in reversing the judgment below. [Footnote 2/8] However, I agree with the Court of Appeals
that "the actual features of [its format doctrine] are scarcely
visible in [the Commission's] highly colored portrait." 197
U.S.App.D.C. 319, 332, 610 F.2d 838, 851 (1979).
In fact, the Court of Appeals accepted the Commission's
conclusion that entertainment program formats should ordinarily be
left to competitive forces. The court emphasized that the format
doctrine "was
not intended as an alternative to format
allocation by market forces," and "fully recognized that market
forces do generally provide diversification of formats."
Ibid. (Emphasis in original.) It explained that
"the Commission's obligation to consider format issues arises
only when there is strong
prima facie evidence that the
market has, in fact, broken down,"
ibid., and suggested that a breakdown in the market may
be inferred when notice of a format change "precipitate[s] an
outpouring of protest,"
id. at 323, 610 F.2d at 842, or
"significant public grumbling,"
ibid. The Court of Appeals
further stated that
"[n]o public interest issue is raised if (1) there is an
adequate substitute in the service area for the format being
abandoned, (2) there
Page 450 U. S. 607
dissenting is no substantial support for the endangered format
as evidenced by an outcry of public protest, (3) the devotees of
the endangered format are too few to be served by the available
frequencies, or (4) the format is not financially viable."
Id. at 332, 610 F.2d at 851. Finally, the Court of
Appeals indicated that the Commission's obligation to hold an
evidentiary hearing is limited to those situations in which the
record presents substantial questions of material fact.
Id. at 324, 610 F.2d at 843. The Court of Appeals thus
made clear that the format doctrine comes into play only in a few
limited situations. Consequently, the issue presented by these
cases is not whether the Commission may adopt a general policy of
relying on licensee discretion and market forces to ensure
diversity in entertainment programming formats. Rather, the
question before us is whether the Commission may apply its general
policy on format changes indiscriminately, and without regard to
the effect in particular cases.
II
Although the Act does not define "public interest, convenience,
and necessity," it is difficult to quarrel with the basic premise
of the Court of Appeals' format cases that the term includes "a
concern for diverse entertainment programming."
Id. at
323, 610 F.2d at 842. [
Footnote
2/9] This Court has indicated that one of the Act's goals is
"to secure the maximum benefits of radio to all the people of the
United States."
National Broadcasting Co. v. United
States, 319 U. S. 190,
319 U. S. 217
(1943). [
Footnote 2/10]
Page 450 U. S. 608
And we have recognized "the long-established regulatory goals of
. . . diversification of programming."
FCC v. Midwest Video
Corp., 440 U. S. 689,
440 U. S. 699
(1979). At the same time, our cases have acknowledged that the
Commission enjoys broad discretion in determining how best to
accomplish this goal.
See FCC v. National Citizens Committee
for Broadcasting, 436 U. S. 775
(1978);
National Broadcasting Co. v. United States, supra.
The Commission has concluded that a general policy of relying on
market forces is the best method for promoting diversity in
entertainment programming formats. As the majority notes,
ante at
450 U. S. 595,
this determination largely rests on the Commission's predictions
about licensee behavior and the functioning of the radio
broadcasting market.
I agree with the majority that predictions of this sort are
within the Commission's institutional competence. I am also willing
to assume that a general policy of disregarding format changes in
making the "public interest" determination required by the Act is
not inconsistent with the Commission's statutory obligation to give
individualized consideration to each application. The Commission
has broad rulemaking powers under the Act, [
Footnote 2/11] and we have approved efforts by the
Commission to implement the Act's "public interest" requirement
through rules and policies of general application.
See, e.g.,
FCC v. National Citizens Committee for Broadcasting, supra; United
States v. Storer Broadcasting Co., 351 U.
S. 192 (1956);
National Broadcasting Co. v. United
States, supra.
The problem with the particular Policy Statement challenged
here, however, is that it lacks the flexibility we have required of
such general regulations and policies.
See, e.g., United States
v. Storer Broadcasting Co., supra; National
Page 450 U. S. 609
Broadcasting Co. v. United States, supra. The Act
imposes an affirmative duty on the Commission to make a
particularized "public interest" determination for each application
that comes before it. As we explained in
National Broadcasting
Co. v. United States, supra at
319 U. S. 225,
the Commission must, in each case, "exercise an ultimate judgment
whether the grant of a license would serve the
public interest,
convenience, or necessity.'" The Policy Statement completely
forecloses any possibility that the Commission will reexamine the
validity of its general policy on format changes as it applies to
particular situations. Thus, even when it can be conclusively
demonstrated that a particular radio market does not function in
the manner predicted by the Commission, the Policy Statement
indicates that the Commission will blindly assume that a proposed
format change is in the "public interest." This result would occur
even where reliance on the market to ensure format diversity is
shown to be misplaced, and where it thus appears that action by the
Commission is necessary to promote the public interest in
diversity. This outcome is not consistent with the Commission's
statutory responsibilities.
Moreover, our cases have indicated that an agency's discretion
to proceed in complex areas through general rules is intimately
connected to the existence of a "safety valve" procedure that
allows the agency to consider applications for exemptions based on
special circumstances.
See E. I. du Pont de Nemours Co. v.
Train, 430 U. S. 112,
430 U. S. 128
(1977);
Permian Basin Area Rate Cases, 390 U.
S. 747,
390 U. S.
771-772 (1968);
FPC v. Texaco Inc.,
377 U. S. 33,
377 U. S. 40-41
(1964);
United States v. Storer Broadcasting Co., supra at
351 U. S.
204-205;
National Broadcasting Co. v. United States,
supra at
319 U. S. 207,
319 U. S. 225.
See also WAIT Radio v. FCC, 135 U.S.App.D.C. 317, 321, 418
F.2d 1153, 1157 (1969);
American Airlines v. CAB, 123
U.S.App. D C. 310, 359 F.2d 624 (en banc),
cert. denied,
385 U.S. 843 (1966);
WBEN, Inc. v. United States, 396 F.2d
601, 618 (CA2),
cert. denied, 393 U.S. 914 (1968).
Page 450 U. S. 610
For example, in
National Broadcasting Co. v. United States,
supra, we upheld the Commission's Chain Broadcasting
Regulations, but we emphasized the need for flexibility in
administering the rules. We noted that the
"Commission provided that 'networks will be given full
opportunity, on proper application . . . to call our attention to
any reasons why the principle should be modified or held
inapplicable.'"
Id. at
319 U. S. 207.
And we concluded:
"The Commission therefore did not bind itself inflexibly to the
licensing policies expressed in the regulations. In each case that
comes before it, the Commission must still exercise an ultimate
judgment whether the grant of a license would serve the 'public
interest, convenience, or necessity.' If time and changing
circumstances reveal that the 'public interest' is not served by
application of the Regulations, it must be assumed that the
Commission will act in accordance with its statutory
obligations."
Id. at
319 U. S. 225.
Similarly, in upholding the Commission's Multiple Ownership Rules
in
United States v. Storer Broadcasting Co., supra, we
noted that the regulations allowed an opportunity for a "full
hearing" for applicants "that set out adequate reasons why the
Rules should be waived or amended."
Id. at 205. [
Footnote 2/12]
Page 450 U. S. 611
This "safety valve" feature is particularly essential where, as
here, the agency's decision that a general policy promotes the
public interest is based on predictions and forecasts that, by
definition, lack complete factual support. As the Court of Appeals
admonished the Commission in a related context:
"the Commission is charged with administration in the 'public
interest.' That an agency may discharge its responsibilities by
promulgating rules of general application which, in the overall
perspective, establish the 'public interest' for a broad range of
situations, does not relieve it of an obligation to seek out the
'public interest' in particular, individualized cases. A general
rule implies that a commission need not re-study the entire problem
de novo and reconsider policy every time it receives an
application for a waiver of the rule. On the other hand, a general
rule, deemed valid because its overall objectives are in the public
interest, may not be in the 'public interest' if extended to an
applicant who proposes a new service that will not undermine the
policy, served by the rule, that has been adjudged in the public
interest."
WAIT Radio v. FCC, supra at 321, 418 F.2d at 1157.
In my judgment, this requirement of flexibility compels the
Commission to provide a procedure through which listeners can
attempt to show that a particular radio market differs from the
Commission's paradigm, and thereby persuade the Commission to give
particularized consideration to a proposed format change. Indeed,
until the Policy Statement was published, the Commission had
resolved to
"take an extra hard look at the reasonableness of any proposal
which would deprive a community of its only source of a particular
type of programming. [
Footnote
2/13]"
As I see it, the Court of Appeals' format doctrine was merely an
attempt by that court to delineate
Page 450 U. S. 612
the circumstances in which the Commission must temper its
general policy in view of special circumstances. Perhaps the court
would have been better advised to leave the task of defining these
situations to the Commission. [
Footnote 2/14] But one need not endorse every feature
of the Court of Appeals' approach to conclude that the court
correctly invalidated the Commission's Policy Statement because of
its omission of a "safety valve" procedure.
This omission is not only a departure from legal precedents; it
is also a departure both from the Commission's consistent policies
and its admissions here. For the Commission concedes that the radio
market is an imperfect reflection of listener preferences,
[
Footnote 2/15] and that
listeners have programming interests that may not be reflected in
the marketplace. The Commission has long recognized its obligation
to examine program formats in making the "public interest"
determination required by the Act. As early as 1929, the
Commission's predecessor, the Federal Radio Commission, adopted the
position that licensees were expected to provide a balanced program
schedule designed to serve all substantial groups in their
communities.
Great Lakes Broadcasting Co., 3
F.R.C.Ann.Rep. 32, 34,
rev'd on other grounds, 37 F.2d
993,
cert. dism'd, 281 U.S. 706 (1929). The Commission's
famous "Blue Book," [
Footnote
2/16] published in 1946, reaffirmed the emphasis on a
well-balanced program structure and declared that the Commission
has "an affirmative duty, in its public interest determinations, to
give full consideration to program service." [
Footnote 2/17] As the Commission explained:
"It has long been an established policy of broadcasters
themselves and of the Commission that the American
Page 450 U. S. 613
system of broadcasting must serve significant minorities among
our population, and the less dominant needs and tastes which most
listeners have from time to time. [
Footnote 2/18]"
This theme was reiterated in the Commission's 1960 Program
Statement, [
Footnote 2/19] which
set forth 14 specific categories of programming that were deemed
"major elements usually necessary to meet the public interest,
needs and desires of the community," [
Footnote 2/20] and which emphasized the necessity of
each broadcaster's programming serving the "tastes and needs" of
its local community. [
Footnote
2/21] To ensure that licensee programming serves the needs of
the community, the Commission has, for example, decreed that
licensees have a special obligation to provide programs for
children, even going so far as to declare that licensees must
provide "a reasonable amount of [children's] programming which is
designed to educate and inform -- and not simply to entertain."
[
Footnote 2/22]
Moreover, in examining renewal applications, the Commission has
considered claims that a licensee does not provide adequate
children's programming, [
Footnote
2/23] or programming for women and children, [
Footnote 2/24] or for a substantial
Spanish-American community, [
Footnote
2/25] or that the licensee has ignored issues of significance
to the Negro community [
Footnote
2/26] or has not provided programming of specific interest to
residents of a particular
Page 450 U. S. 614
area. [
Footnote 2/27] In each
case, the Commission reviewed submissions ranging from general
summaries to transcripts of programs, to determine whether the
licensee's programming met the public interest standard.
There is an obvious inconsistency between the Commission's
recognition that the "public interest" standard requires it to
consider licensee programming in the situations described above and
its Policy Statement on review of entertainment program formats.
Indeed, the sole instance in which the Commission will not consider
listener complaints about programming is when they pertain to
proposed changes in entertainment program formats. The Policy
Statement attempts to explain this exceptional treatment of format
changes by drawing a distinction between entertainment and
nonentertainment programming. The Policy Statement suggests that
the Commission reviews only nonentertainment programming, and, even
then, only in special circumstances. Thus, the Policy Statement
argues that the fairness doctrine and political broadcasting rules
issued pursuant to § 315, 47 U.S.C. § 315, allow the Commission to
exercise direct control
Page 450 U. S. 615
of programming. In these areas, reasons the Statement, the
Commission's role
"is limited to directing the licensee to broadcast some
additional material so as not to completely ignore the
viewpoints of others in the community. [
Footnote 2/28]"
This "limited involvement in licensee decisionmaking in the area
of news and public affairs" [
Footnote
2/29] is contrasted, in the Commission's view, to "the
pervasive, censorial nature of the involvement in format
regulation." [
Footnote 2/30] The
majority presumably concludes that the Commission has provided a
rational explanation for distinguishing between entertainment and
nonentertainment programming. With all due respect, I disagree.
In the first place, the distinction the Commission tries to draw
between entertainment and nonentertainment programming is
questionable. It is not immediately apparent, for example, why
children's programming necessarily falls on the "nonentertainment"
side of the spectrum, and the Commission has provided no
explanation of how it decides the category to which particular
programming belongs. Second, I see no reason why the Commission's
review of entertainment programming cannot be as limited as its
review of nonentertainment programming. Nothing prevents the
Commission from limiting its role in reviewing format changes to
"directing the licensee to broadcast additional material," thereby
ensuring that the viewpoints of listeners who complain about a
proposed format change are not completely ignored. Third, and most
important, neither the fairness doctrine nor the political
broadcasting rules have anything to do with the various situations
described above in which the Commission has not hesitated to
consider program formats in making the "public interest"
determination. The fairness doctrine imposes an obligation on
licensees to devote a "reasonable percentage"
Page 450 U. S. 616
of broadcast time to controversial issues of public importance,
and it requires that the coverage be fair in that it accurately
reflect the opposing views.
See Red Lion Broadcasting Co. v.
FCC, 395 U. S. 367
(1069). The political broadcasting rules regulate broadcasts by
candidates for federal and nonfederal public office.
See The
Law of Political Broadcasting and Cablecasting, 69 F.C.C.2d
2209 (1978). The Commission's examination of whether a
broadcaster's format includes programming directed at women or at
residents of the local community, or its requirement that licensees
provide programming designed to serve the unique needs of children,
simply has nothing to do with either the fairness doctrine or the
political broadcasting rules. Thus, the Commission's purported
justification for its inconsistency is no explanation at all, and I
am puzzled by the majority's apparent conclusion that it provides a
rational basis for the Commission's policy.
The majority attempts to minimize the inconsistency in the
Commission's treatment of entertainment and nonentertainment
programming by postulating that the difference "is not as
pronounced as it may seem,"
ante at
450 U. S. 602.
This observation, even if accurate, is simply beside the point.
What is germane is the Commission's failure to consider listener
complaints about entertainment programming to the same extent and
in the same manner as it reviews complaints about nonentertainment
programming. Thus, whereas the Commission will hold an evidentiary
hearing to review complaints about nonentertainment programming
where "
it appears that the licensee has . . . act[ed]
unreasonably or in bad faith,'" ibid. (quoting
Mississippi Authority for Educational TV, 71 F.C.C.2d
1296, 1308 (1979)), the Commission will not consider an identical
complaint about a licensee's change in its entertainment
programming. As I have indicated, see supra at
450 U. S.
614-616, neither the Commission nor the majority is able
to offer a satisfactory explanation for this
inconsistency.
Page 450 U. S. 617
Nor can the Commission find refuge in its claim that,
"'[e]ven after all relevant facts [h]ad been fully explored in
an evidentiary hearing, [the Commission] would have no assurance
that a decision finally reached by [the Commission] would
contribute more to listener satisfaction than the result favored by
station management.'"
Policy Statement, 60 F.C.C.2d 858, 865 (1976), quoting
Notice of Inquiry, 57 F.C.C.2d 580, 586 (1976). The same
must be true of the decisions the Commission makes after reviewing
listener complaints about nonentertainment programming, and I do
not see why the Commission finds this result acceptable in one
situation but not in the other. Much the same can be said for the
majority's suggestion that the Commission should be spared the
burden of "presuming to grasp, measure and weigh . . . elusive and
difficult factors" such as determining the number of listeners who
favor a particular change and measuring the intensity of their
preferences,
ante at
450 U. S. 601.
But insofar as the Commission confronts these same "elusive and
difficult factors" in reviewing nonentertainment programming, it
need only apply the expertise it has acquired in dealing with these
problems to review of entertainment programming.
III
Since I agree with the Court of Appeals that there may be
situations in which the Commission is obliged to consider format
changes in making the "public interest" determination mandated by
the Act, it seems appropriate to comment briefly on the
Commission's claim that the "
acute practical problem[s]'
inherent in format regulation render entirely speculative any
benefits that such regulation might produce." [Footnote 2/31] One of the principal reasons given
in the Policy Statement for rejecting entertainment format
regulation is that it would be "administratively a fearful and
comprehensive
Page 450 U. S.
618
nightmare" [Footnote 2/32]
that would impose "enormous costs on the participants and the
Commission alike." [Footnote
2/33] But at oral argument before the Court of Appeals,
Commission counsel conceded that the "`administrative nightmare'"
argument was an "`exaggeration'" which was not "`very significant
at all'" to the Commission's ultimate conclusion. 197 U.S.App.D.C.
at 330, 610 F.2d at 849. The Commission's reliance on claims that
its own counsel later concedes to lack merit hardly strengthens
one's belief in the rationality of its decisionmaking.
Although it has abandoned the "administrative nightmare"
argument before this Court, the Commission nonetheless finds other
"intractable" administrative problems in format regulation. For
example, it insists that meaningful classification of radio
broadcasts into format types is impractical, and that it is
impossible to determine whether a proposed format change is in the
public interest because the intensity of listener preferences
cannot be measured. [
Footnote
2/34] Moreover, the Commission argues that format regulation
will discourage licensee innovation and experimentation with
formats, and that its effect on format diversity will therefore be
counterproductive.
None of these claims has merit. Broadcasters have operated under
the format doctrine during the past 10 years, yet the Commission is
unable to show that there has been no innovation and
experimentation with formats during this period. Indeed, a
Commission staff study on the effectiveness of market allocation of
formats indicates that licensees have been aggressive in developing
diverse entertainment formats under the format doctrine regime.
[
Footnote 2/35] This "evidence"
--
Page 450 U. S. 619
a welcome contrast to the Commission's speculation -- undermines
the Commission's claim that format regulation will disserve the
"public interest" because it will inhibit format diversity.
The Commission's claim that it is impossible to classify
formats, is largely overcome by the Court of Appeals' suggestion
that the Commission could develop "a format taxonomy which, even if
imprecise at the margins, would be sustainable so long as not
irrational." [
Footnote 2/36] 197
U.S.App.D.C. at 334, 610 F.2d at 853. Even more telling is the
staff study relied on by the Commission to show that there is broad
format diversity in major radio markets, for the study used a
format classification based on industry practice. [
Footnote 2/37] As the Court of Appeals noted, it
is somewhat ironic that the Commission had no trouble "endorsing
the validity of a study largely premised on classifications it
claims are impossible to make."
Ibid. [
Footnote 2/38] To be sure, courts do not sit to
second-guess the assessments
Page 450 U. S. 620
of specialized agencies like the Commission. But where, as here,
the agency's position rests on speculations that are refuted by the
agency's own administrative record, I am not persuaded that
deference is due. [
Footnote
2/39]
IV
The Commission's Policy Statement is defective because it lacks
a "safety valve" procedure that would allow the necessary
flexibility in the application of the Commission's general policy
on format changes to particular cases. In my judgment, the Court of
Appeals' format doctrine was a permissible attempt by that court to
provide the Commission with some guidance regarding the types of
situations in which a reexamination of general policy might be
necessary. Even if one were to conclude that the Court of Appeals
described these situations too specifically, a view I do not share,
I still think that the Court of Appeals correctly held that the
Commission's Policy Statement must be vacated.
I respectfully dissent.
[
Footnote 2/1]
The pertinent portions of 47 U.S.C. §§ 309(a) and 310(d) are
quoted in the majority opinion,
ante at
450 U. S.
584-585, n. 2.
[
Footnote 2/2]
I will follow the majority,
see ante at
450 U. S. 586,
n. 4, in referring to a broadcaster' change in entertainment
programming as a format change.
[
Footnote 2/3]
Memorandum Opinion and Order, 60 F.C.C.2d 858 (1976)
(
Policy Statement),
reconsideration denied, 66
F.C.C.2d 78 (1977) (
Denial of Reconsideration).
[
Footnote 2/4]
The opinion of the Court traces the development of the Court of
Appeals' "format doctrine" and the Commission's "Policy Statement,"
see ante at
450 U. S.
586-593. I will not repeat that discussion here.
[
Footnote 2/5]
Notice of Inquiry, Development of Policy Re: Changes in the
Entertainment Formats of Broadcast Stations, 57 F.C.C.2d 580,
582 (1976) (
Notice of Inquiry).
[
Footnote 2/6]
Policy Statement, supra at 865 (quoting
Lemon v.
Kurtzman, 403 U. S. 602,
403 U. S.
619-620 (1971)).
[
Footnote 2/7]
Denial of Reconsideration, supra at 81.
[
Footnote 2/8]
Even the Court of Appeals agreed that
"[t]here would no doubt be severe statutory and constitutional
difficulties with any system that required intrusive governmental
surveillance, dictated programming choices, forced broad access
obligations, or imposed an obligation to continue in service under
any and all circumstances."
197 U.S.App.D.C. 319, 331-332, 610 F.2d 838, 850-851 (1979).
[
Footnote 2/9]
See D. Ginsburg, Regulation of Radio Broadcasting 294
(1979) ("An argument against the desirability of
diversity' in
broadcast programming is difficult to imagine"). See
generally Note, A Regulatory Approach to Diversifying
Commercial Television Entertainment, 89 Yale L.J. 694
(1980).
[
Footnote 2/10]
Section 303(g) of the Act, 47 U.S.C. § 303(g), directs the
Commission to "encourage the larger and more effective use of radio
in the public interest."
[
Footnote 2/11]
The Commission is authorized to promulgate "such rules and
regulations . . . not inconsistent with law, as may be necessary to
carry out the provisions of [the Act]." 47 U.S.C. § 303(r).
[
Footnote 2/12]
The majority argues,
ante at
450 U. S. 601,
n. 44, that although the Court considered the presence of a "safety
valve" procedure in upholding the rules challenged in
National
Broadcasting Co. v. United States and
United States v.
Storer Broadcasting Co., the Court "did not hold that the
Commission may never adopt a rule that lacks a waiver provision."
Since this general question was not before the Court in those
cases, it is hardly surprising that it did not render an advisory
opinion to this effect. What is instructive, however, is the
majority's inability to explain why a waiver provision was
necessary in those cases, but is not required in the instant
situation. As the cases cited in text make clear, this Court and
the lower federal courts have insisted on a "safety valve" feature
in upholding general rules promulgated by a variety of agencies. I
believe it is incumbent on those who would depart from this
practice to explain their reasoning.
[
Footnote 2/13]
Zenith Radio Corp., 40 F.C.C.2d 223, 231 (1973)
(additional views of Chairman Burch) (joined by a majority of the
Commissioners).
[
Footnote 2/14]
Confronted as it was by the Commission's resistance to its
format doctrine, it is easy to understand why the Court of Appeals
felt compelled to undertake this task.
[
Footnote 2/15]
Policy Statement, 60 F.C.C.2d at 863.
[
Footnote 2/16]
Public Service Responsibility of Broadcast Licensees (1946).
[
Footnote 2/17]
Id. at 12.
[
Footnote 2/18]
Id. at 15.
[
Footnote 2/19]
En Banc Programming Inquiry, 44 F.C.C. 2303 (1960).
[
Footnote 2/20]
Id. at 2314
[
Footnote 2/21]
Id. at 2312.
[
Footnote 2/22]
Children's Television Report and Policy Statement, 50
F.C.C.2d 1, 6 (1974).
[
Footnote 2/23]
Channel 20, Inc., 70 F.C.C.2d 1770 (1979).
[
Footnote 2/24]
Community Television of Southern California, 72
F.C.C.2d 349 (1979)
[
Footnote 2/25]
Central California Communications Corp., 70 F.C.C.2d
1947 (1979).
[
Footnote 2/26]
Mississippi Authority for Educational TV, 71 F.C.C.2d
1296 (1979);
Alabama Educational Television Comm'n, 33
F.C.C.2d 495 (1971),
renewal denied, 50 F.C.C.2d 461
(1975).
[
Footnote 2/27]
Educational Broadcasting Corp., 70 F.C.C.2d 2204
(1979).
As the majority notes,
ante at
450 U. S.
602-603, the Commission recently voted to reduce its
role in regulating several aspects of commercial radio
broadcasting, including regulation of nonentertainment programming.
Thus, the Commission has announced its intention of eliminating its
current guideline on the amounts of nonentertainment programming
that radio stations should air. And the Commission has indicated
that petitions to deny license renewals based on only the quantity
of a licensee's nonentertainment programming will no longer be
sufficient to support a challenge. For example, a petitioner would
have to show that a licensee is doing little or no programming
responsive to community issues in order to successfully challenge
renewal of the license. Nonetheless, the Commission reiterated that
nonentertainment programming is still a relevant issue for
petitions to deny, that licensees have an obligation to offer
nonentertainment programming addressing issues facing the
community, and that the Commission will continue to inquire into
the reasonableness of licensee programming decisions.
See
Deregulation of Radio, 46 Fed.Reg. 13888, 13890-13897 (1981)
(to be codified at 47 CFR Parts 0 and 73).
[
Footnote 2/28]
Denial of Reconsideration, 66 F.C.C.2d at 83 (emphasis
in original).
[
Footnote 2/29]
Ibid.
[
Footnote 2/30]
Ibid.
[
Footnote 2/31]
Brief for Federal Communications Commission and United States
35.
[
Footnote 2/32]
Policy Statement, 60 F.C.C.2d at 856.
[
Footnote 2/33]
Id. at 84.
[
Footnote 2/34]
The Commission also insists that any findings about the
financial viability of a particular format would be entirely
speculative.
[
Footnote 2/35]
See Policy Statement, supra at 873-881.
[
Footnote 2/36]
There have been a number of comments and suggestions about how
the Commission might best accomplish this task.
See, e.g.,
57 F.C.C.2d at 587-589 (concurring statement of Commissioner
Hooks); D. Ginsburg,
supra, n. 9, at 316; Note, Judicial
Review of FCC Program Diversity Regulation, 75 Colum.L.Rev. 401,
436-437 (1975).
The Court of Appeals suggested that the Commission could
consider an alternative approach of
"dispensing altogether with the need for classifying formats by
simply taking the existence of significant and bona fide listener
protest as sufficient evidence that the station's endangered
programming has certain unique features for which there are no
ready substitutes."
197 U.S.App.D.C. at 334, n. 47, 610 F.2d at 853, n. 47. The
court indicated that
"this approach would focus attention on the essentials of the
format doctrine, namely, that, when a significant sector of the
populace is aggrieved by a planned programming change, this fact
raises a legitimate question as to whether the proposed change is
in the public interest."
Id. at 334-335, n. 47, 610 F.2d at 853-854, n. 47.
[
Footnote 2/37]
See Policy Statement, supra at 875-880.
[
Footnote 2/38]
Nor do I find merit in the Commission's claim that there are
serious First Amendment problems with format regulation. In the
first place, I see no reason to find constitutional defect in
limited review of entertainment formats when no such defect arises
with review of nonentertainment programming. In
Red Lion
Broadcasting Co. v. FCC, 395 U. S. 367,
395 U. S. 395
(1969), we held that the Commission does not transgress the First
Amendment "in interesting itself in general program format and the
kinds of programs broadcast by licensees." Indeed, First Amendment
principles, if anything, would support format review as requested
by listeners, for, as we indicated in
Red Lion, "[i]t is
the [First Amendment] right of the viewers and listeners, not the
right of the broadcasters, which is paramount."
Id. at
395 U. S.
390.
[
Footnote 2/39]
All this suggests that the "practical difficulties" the
Commission has identified are not intractable, and that these
problems could be solved if the Commission channelled as much
energy into devising workable standards as it has devoted to
mischaracterizing the Court of Appeals' format doctrine.