Writ of Certiorari Denied March 25, 1957. See 77 S.Ct. 662.
WILBUR K. MILLER, Circuit Judge.
An examiner of the Federal Communications Commission conducted a comparative hearing concerning the mutually exclusive applications of McClatchy Broadcasting Company and Sacramento Telecasters, Inc., for a television broadcast station construction permit in Sacramento, California.
In his initial decision, the examiner found McClatchy superior to Telecasters in all respects except as to what has come to be called "diversification of control of the media of mass communication." In that regard he necessarily found Telecasters entitled to preferment, because McClatchy is licensee of several radio stations in the central valleys of California
In a prehearing conference, held pursuant to our Rule 38(k),
McClatchy stated the first question thus:
This interesting query framed by the appellant does not seem to us to be presented here, because to some extent it begs the question. There is no doubt that McClatchy has "an outstanding record of public service." And the Commission so found. In the course of its decision it said:
But, contrary to the assumption in appellant's version of the first question, the Commission did not find McClatchy superior in every area of comparison save that of diversification of facilities for publishing information, and did not deny it the construction permit solely because of its ownership of newspapers and broadcasting stations. The Commission in its decision analyzed and compared all the characteristics and proposals of the two applicants. It found both qualified to receive a grant were its application unopposed. It found McClatchy superior in some respects and Telecasters superior in some, while in other respects it found no reason for preference between them.
After its exhaustive discussion of the various phases of comparison, the Commission did not find, on the whole, preponderant superiority in either applicant. So it turned to the matter of diversification of control of communications facilities, concerning which there can be no question as to Telecasters' right to preference, and found that consideration to be determinative. But the Commission gave decisive weight to the factor only after carefully considering
The question must be answered in the affirmative. In Scripps-Howard Radio, Inc., v. F. C. C., 1951, 89 U.S.App. D.C. 13, 19, 189 F.2d 677, 683, we said:
We have heretofore quoted, in footnote 2, the examiner's cogent statement to the effect that the diversification issue should not weigh against an applicant already engaged in the dissemination of information to the public unless he has exhibited monopolistic tendencies or unless a grant to him would tend to create a monopoly. The Commission disagreed with its examiner on this proposition. It said that ordinarily it
There is much to be said in support of the examiner's position concerning diversification of control, but we cannot say the Commission went beyond its province in disagreeing with him. It has the duty, in choosing between competing applicants, to decide which would better serve the public interest. Where that interest lies is always a matter of judgment and must be determined on an ad hoc basis. The broad statutory standard of "public convenience, interest, or necessity."
This does not mean that the owner of a newspaper is disqualified as a licensee. Stahlman v. F. C. C., 1942, 75 U.S.App. D.C. 176, 126 F.2d 124. Nor does it mean that the Commission may reject a newspaper's application and grant that of a competing non-newspaper applicant without also considering and comparing all other relevant factors. But it does mean that the Commission is free to let diversification of control of communications facilities turn the balance, if it reasonably concludes that it is proper to do so.
We turn to the second question, which all parties agree is properly stated thus:
There is ample evidence in the record to support the Commission's finding that Telecasters had thoughtfully considered and is aware of and sensitive to the community's television needs, and has proposed a program service designed to meet them. The proof shows that the same is true of McClatchy, with the evidence perhaps preponderating in its favor upon comparison of the two; but the Commission did not act arbitrarily or capriciously in deciding neither deserved preference as to ability to appraise and meet the needs of the area. With ample support in the record, the Commission found Telecasters superior to McClatchy as to local ownership, participation in the civic life of the community, and in the integration of ownership with management.
The choice between the applicants had to be and was made after comparison of all pertinent factors. Although the examiner's choice of McClatchy as superior in all respects except diversification of control is strongly supported by the proof, we cannot find that the Commission's decision was arbitrary, capricious or unsupported by substantial evidence. As we said in Pinellas Broadcasting Company v. F. C. C., 1956, 97 U.S.App. D.C. 236, 230 F.2d 204:
From what has been said it follows that the second question stated in the prehearing order must be answered in the negative.
"In any review or enforcement proceeding the court may in its discretion direct the attorneys for the parties to appear before the court or a judge thereof of for a prehearing conference to consider the simplification of the issues and such other matters as may aid in the disposition of the proceeding by the court. The court or judge shall make an order which recites the action taken at the conference and the agreements made by the parties as to any of the matters considered and which limits the issues to those not disposed of by admissions or agreements of counsel, and such order when entered controls the subsequent course of the proceeding, unless modified to prevent manifest injustice."