Indiana Broadcasting Corporation (wane-tv), Petitioner, v. Federal Communications Commission, Andunited States of America, Respondents,g T & E Communications Inc., Intervenor.indiana Broadcasting Corporation (wane-tv), Petitioner, v. Federal Communications Commission, Andunited States of America, Respondents,shardco Cablevision, Inc., Intervenor, 407 F.2d 681 (D.C. Cir. 1968)

Petitioner, Indiana Broadcasting Corporation, the licensee of WANE-TV, a Fort Wayne, Indiana, UHF television station, seeks review of two memorandum opinions and orders of the Federal Communications Commission¹  denying petitioner's requests for an evidentiary hearing on proposals by GT&E Communications, Inc. (GT&E) and Shardco Cablevision, Inc. (Shardco), the intervenors here, to carry distant signals²  on community antenna television (CA TV) systems³  in two localities lying between petitioner's Grade A and Grade B contours.⁴  The controversy arose when GT&E and Shardco gave notification of their intention to operate CATV systems⁵  in Angola, Indiana, and Delphos, Ohio, respectively, and petitioner resisted importation of distant signals on those systems. The proceedings before the Commission culminated in grants to GT&E and Shardco, by the orders under review, of the authority sought.

The Commission's distant signal rule prohibits a CATV system from distributing distant signals within the predicted Grade A contour of a station in the Nation's 100 largest television markets save upon a determination that their introduction will be "consistent with the public interest, and specifically the establishment and healthy maintenance of television broadcast service in the area."⁶  For purposes related to adjudication on that score, "a full evidentiary hearing," unless waived,⁷  is required.⁸  In all other instances, however, the regulations forbid a CATV extension of distant signals only if the Commission finds that the projection will be inconsistent with those criteria, and invoke the Commission's discretion as to whether, on its own motion or on petition by an interested party, a hearing on the matter is to be conducted.⁹ 

Fort Wayne has a population¹⁰  of 161,776.¹¹  It is the 96th largest television market in the country. The Commission has assigned five channels, all UHF, to Fort Wayne. Three of these, all commercial, are in use by network-affiliated stations. The Commission has received no applications for the two remaining, one of which is an educational channel.

Angola, with a population of 4,746, is situated about 35 miles northerly of Fort Wayne, within its television market. It is outside the Grade A contours, but within the Grade B contours, of the three Fort Wayne stations, as well as of two share-time stations in Lansing, Michigan. GT&E proposed to carry the signals of these five stations,¹²  along with distant signals from a total of five other stations in South Bend, Indiana, and Kalamazoo and Lansing, Michigan.

Delphos, located about 41 miles southeasterly from Fort Wayne, has a population of 6,961. It lies within the Grade A contour only of WIMA-TV, a network-affiliated station in Lima, Ohio,¹³  and, of the Fort Wayne stations, only within the Grade B contour of WANE-TV.¹⁴  Shardco proposed to supply its subscribers with the signals of these two stations,¹⁵  together with the distant signals of a total of 11 stations at two points in Indiana and three in Ohio.¹⁶ 

Petitioner asserted in opposition that these projects would detrimentally affect the development of UHF broadcasting in the area by wreaking economic damage upon Fort Wayne's existing stations and by discouraging interest in its unassigned commercial channel. Petitioner endeavored to support these positions by a variety of contentions, including prominently the theory that the two proposals involved should be evaluated in terms of the cumulative effect, present and potential, of all CATV activity within its service area.

These arguments the Commission found wanting.¹⁷  The allegation respecting an adverse impact on utilization of Fort Wayne's available commercial channel, said the Commission, was "not adequately supported,"¹⁸  and the distant signal rule would in any event lay its burden upon any CATV proponent seeking entry inside the Grade A contour of either of the Fort Wayne stations. Examining next the welfare of those stations, the Commission noted that only petitioner had objected and, adverting to its omission "to supply specifics regarding its present financial condition, the impact any present CATV activity has had on its operations, or the exact nature of the other CATV proposals it refers to,"¹⁹  the Commission concluded from available information that neither proposition before it could alone bring material harm to WANE-TV. Even if the "cumulative" argument were indulged, the Commission, referring to its carriage²⁰  and nonduplication²¹  rules, did "not believe that the present CATV activity between WANE-TV's predicted grade A and grade B contours is extensive enough to raise any question of substantial impact on WANE-TV."²²  And since such activity within WANE-TV's Grade A contour was subject to the distinct requirements of the distant signal rule, the Commission felt that it "need not be counted here in considering cumulative impact."²³  On the basis of this analysis, the Commission, one member dissenting,²⁴  dismissed petitioner's bid for an evidentiary hearing and held that the operations proposed by GT&E and Shardco would be consistent with the public interest.²⁵ 

Petitioner presses on this review the thesis that the Commission erred in these dispositions. This claim, in its several major facets, we investigate in the ensuing parts of this opinion. From this consideration, we ultimately reach the conclusion that the Commission must be affirmed.

* We first consider the contention that the Commission's refusal to examine petitioner's contentions in an evidentiary hearing represented an unreasonable deviation from the administrative policies, established in non-CATV cases, designed to foster UHF broadcasting. Petitioner refers us to a number of proceedings in which the Commission designated for hearing, or denied on the pleadings without hearing, contested proposals for alterations in broadcast facilities that would have initiated VHF service in all-UHF areas,²⁶  including the northern Indiana all-UHF enclave.²⁷  Since the projects now before us would convey by CATV a number of distant signals into the all-UHF Fort Wayne market, petitioner argues that the Commission, in approving them without a hearing, arbitrarily discarded years of settled precedent.²⁸ 

We disagree. Petitioner's requests for a hearing were denied in the view that they were critically deficient in terms of requirements set by the Commission's CATV regulations. We find that the regulations by which the requests were measured are reasonably calculated to promote rather than abridge the regulatory scheme by which UHF has traditionally been afforded special protection. We later sustain the Commission's decisions against charges that it misapplied its regulations and disregarded the considerations upon which they are based. In sum, what we say now is that in rejecting petitioner's efforts to obtain an evidentiary hearing, the Commission did not become unfaithful to the past.

Quite recently, the Commission conducted a comprehensive rule-making proceeding which led to the issuance in 1966 of its Second Report and Order²⁹  asserting its jurisdiction over CATV³⁰  and formulating the precepts by which it was to be governed.³¹  Vitally involved in this process was the balance to be struck between the contributions to improved and more widespread television service made possible by CATV,³²  on the one hand, and the effect of CATV upon the healthy maintenance of free local television broadcasting on the other.³³  The Commission evinced principal concern over the full utilization of UHF channels for multiple local service in the major markets, and over the effect of CATV on the development of independent UHF stations for that purpose.³⁴  Contemporary information did not, however, enable the Commission to adopt a wholly comprehensive set of regulations integrating CATV in all of its aspects into the national television system, nor did it seem possible to the Commission to give advance treatment to every possible enigma in the proliferating CATV field.³⁵  What emanated, as the Commission's solution, were the CATV regulations involved in this suit.³⁶ 

These regulations reflect the Commission's expert judgment that the still unknown repercussions of CATV on UHF broadcasting in major markets could be intelligently ascertained only on an ad hoc basis.³⁷  They also demarcate a specific zone in which the Commission, virtually as a matter of course, examines in the context of an evidentiary hearing the potential impact of CATV on UHF and, in turn, on the public interest.³⁸  And they provide for an investigatory hearing in any other case when from the written presentations a substantial public interest question appears.³⁹ 

We ourselves have had occasion to address the problem of CATV impingement on UHF broadcasting and the Commission's regulatory mechanism for dealing with it. In Buckeye Cablevision, Inc. v. FCC,⁴⁰  we noted that " [t]he CATV threat in the major markets is especially serious, because large scale CATV operations in these markets might deter and possibly destroy the development of free, nonnetwork UHF stations which, for a variety of reasons, are likely to be economically weak even without CATV competition."⁴¹  We held that the Commission's decision to examine, on a case-by-case basis, the effects of CATV in the major markets was "an eminently reasonable course,"⁴²  and we perceive nothing in this case to suggest that such a technique became unreasonable here.

We likewise regard the Commission's distant signal rule⁴³  as fully consistent with its past policy of encouraging the wholesome growth of UHF broadcasting. We deem this to be so notwithstanding that cases outside its reach are not set for hearing automatically,⁴⁴  for these cases too are put through an investigatory hearing if they involve a substantial issue affecting the public interest in UHF.⁴⁵  When it is considered that the Commission exercised selectivity regarding hearings on claims of undue VHF encroachment on UHF,⁴⁶  what the Commission does now does not differ essentially from what it did before. Moreover, when the threat of CATV arose, a full scale rule-making proceeding was conducted at the outset, the problem was refined, and standards were established against which charges of injurious CATV intrusion could be measured. These considerations logically and easily justify the relatively small differences to which one might point between the present procedures and those of the past.

II

While, as we have stated, the Commission's rules command an evidentiary hearing only where a distant signal is introduced into a station's Grade A territory,⁴⁷  and although intervenors' CATV systems will not penetrate WANE-TV's Grade A contour, petitioner argues that the case should be treated as if they would. Its chief reason is that intervenors' services would reach inside the Grade A contour of a hypothetical VHF station operating with maximum facilities from Fort Wayne because, we understand, the Grade A contour of a VHF station extends much further than the Grade A contour of a UHF station. Thus, were Fort Wayne not an all-UHF market, the Commission would automatically have convened a hearing at which petitioner might have aired its views.

The Commission declined to adopt petitioner's litigative approach. " [T]his argument," it said, "is in reality an attempt to employ a fixed mileage standard in top 100 cases, and we have rejected this approach in the Second Report and Order, where our reasons are set forth. We reject it here for the same reasons."⁴⁸  We think the Commission remained on safe ground in doing so.

In its Second Report and Order, the Commission decided on virtually mandatory hearings for the cases embraced by its distant signal rule, and for other cases, on hearings on the basis of substantially-supported factual allegations of potential harm to the public interest.⁴⁹  The line of demarcation is thus drawn in particular cases according to whether there will be CATV activity inside the Grade A contour of a station operating in one of the top 100 markets.

The Commission, also in its Second Report and Order, elaborately supported each of the twin elements comprising the distinguishing criterion. It employed the Grade A contour because, despite individual differences in site and equipment, stations in a given market tend over a period of time toward approximation in their Grade A service areas.⁵⁰  The Grade A contour also encompasses the essential area upon which new UHF operations in the market are likely to be based, and possesses the advantage of definiteness and ease of administration.⁵¹ 

With similar clarity, the Commission articulated the considerations which led to its adoption of the top-100-market component in its standard for automatic hearings. Embracing about 90 percent of the Nation's television homes, those markets are the critically important localities wherein both UHF and CATV are most likely to flourish.⁵²  The problems in other markets are different, and require different procedures, because they are served, if at all, by fewer stations, and these are usually network-affiliated rather than independent, and because if they are unserved CATV can make its most important contribution.⁵³  Hearings in these smaller communities could unduly burden both the UHF broadcaster and the CATV operator, and frustrate the initiation of needed television service.⁵⁴ 

Finding, then, as we do, a reasonable basis for the Commission's standard, we sustain its distant signal rule and the limitations with which it surrounds automatic hearings.⁵⁵  And once again we remind that it is not incumbent upon the Commission to reexamine individual cases de novo to determine whether a lawful administrative standard should be applied.⁵⁶  " [Q]uestions of such a highly technical and scientific nature must, after legal and required administrative proceedings, be left to administrative expertise. Congress has vested the Commission with primary jurisdiction to determine questions of this type, and we believe our judicial function is completed when our review establishes that the parties have received their full legal rights and the Commission's findings and rulings are neither arbitrary nor capricious."⁵⁷ 

III

Petitioner further opposed the CATV projects in suit on the broad ground that they would adversely affect the development of UHF broadcasting in the Fort Wayne area by weakening economically the existing UHF stations therein and by discouraging interest in utilization of the available Fort Wayne commercial channel. Since the projects were beyond the scope of the distant signal rule, it was incumbent upon petitioner, to qualify the cases for an evidentiary hearing, to "state fully and precisely all pertinent facts and circumstances relied upon to demonstrate the need for the relief requested and to support a determination that a grant of such relief would serve the public interest."⁵⁸  The Commission held that petitioner's presentation was substantively inadequate to meet these requirements⁵⁹  and, finding ample support in the record for that conclusion, we uphold the Commission's dispositions.

The record contains uncontested data, supplied largely by petitioner, which glare in the backdrop against which its claims are to be viewed. WANE-TV's Grade B contour covers 5,450 square miles inhabited by 564,996 persons. This area includes, of course, its smaller Grade A contour which circumscribes 2,335 square miles in which 360,184 people live. Fort Wayne with a population of 161,776, and the surrounding Allen County with a population of 232,196, lie wholly within WANE-TV's Grade A contour.

In the region between WANE-TV's Grade A and Grade B contours, upon which this litigation focuses, there are 204,812 residents. These constitute less than 35 percent of the total population within WANE-TV's service area. Angola and Delphos, both lying beyond the Grade A contour, have a combined population of but 11,707 — less than six percent of the total between WANE-TV's Grade A and Grade B contours, and less than three percent of the total population within its service area.

Petitioner alleged that importation of distant signals into Angola and Delphos would diminish its revenues and, consequently, its programming service but, as the Commission found, its backup materials did not forecast these consequences.⁶⁰  The record revealed that since 1959 television broadcasting in the Fort Wayne market has been a profitable venture; in 1965, the total broadcast revenues for the three Fort Wayne stations aggregated more than $3,000,000 and their total net income exceeded $600,000. The record also disclosed that Angola and Delphos in combination have but 3,500 television homes, only about half of which could be expected to become CATV subscribers. It is easy to see why the Commission had difficulty in understanding, without a factual elucidation by petitioner, how the small operations intervenors propose could inflict serious financial injury on petitioner or other UHF broadcasters in the area.

And petitioner produced little indeed to explicate its contentions.⁶¹  It did not undertake a factual demonstration of anticipated revenue losses from network operations, and its showing with respect to local advertising on its broadcasts was vague and unconvincing. Beyond that, it is apparent, as the Commission pointed out,⁶²  that its nonduplication rule⁶³  would provide substantial protection for the network signals that petitioner itself broadcasts, and that its carriage rule⁶⁴  would project petitioner's programs via intervenors' CATV systems into Angola and Delphos. And petitioner's largely unsupported allegations of a threat of losses from local advertising hardly evinced a basis for such concern that the Commission was compelled to examine them further.

Nor can we quarrel with the Commission's rejection of petitioner's plea that intervenors' systems would chill interest in the commercial channel still available in Fort Wayne.⁶⁵  No applicant for that assignment had come forward.⁶⁶  More importantly, Angola and Delphos together comprise but a puny fraction of the Fort Wayne market; and both are outside the Grade A contours of all three Fort Wayne stations, and Delphos is beyond the Grade B contour of two of them. Nothing in petitioner's administrative presentation augured an identifiable expectation that any new UHF entrant in the area would look toward these two small communities for essential support.

The main thrust of petitioner's arguments — both before the Commission and here — is to be found in their predictions as to the cumulative effect of growing CATV service on future UHF broadcasting from Fort Wayne. Adverting to CATV applications, granted or pending, between WANE-TV's Grade A and Grade B contours,⁶⁷  petitioner tells us, as in substance it told the Commission, that " [w]hat is needed is a single area-wide evidentiary hearing as a result of which there can be resolved once and for all the serious issues raised by potential CATV operations throughout the market." In dealing with its request, the Commission marked out and gave consideration to WANE-TV's Grade A and Grade B service territories as separate areas of concern. Applications seeking inauguration of CATV services within WANE-TV's Grade A contour, the Commission said, would involve the distant signal rule,⁶⁸  and thus would reasonably assure a hearing.⁶⁹  For this reason, the Commission felt that CATV activity therein "need not be counted here in considering cumulative impact."⁷⁰  Looking next to CATV activity in the area between WANE-TV's Grade A and Grade B contours, the Commission deemed it too inconsequential to raise any issue of substantial impact on WANE-TV.⁷¹ 

Petitioner's statistics listed "CATV activity" in six communities, all outside WANE-TV's Grade A contour, with a combined population of 36,134 — less than seven percent of the total population within WANE-TV's service area. Petitioner supplied no information as to the number of homes served by CATV, nor as to the extent to which the local CATV franchises were granted or pending. And as the Commission noted, any repercussions from these CATV systems in actual operation would be substantially dampened by virtue of the Commission's carriage⁷²  and nonduplication⁷³  requirements. We think that in these circumstances the Commission could properly conclude that petitioner had not shown such a threat from a CATV pattern larger than the two involved proposals as would merit inquiry in the context of an evidentiary hearing.

This case is not essentially dissimilar to Cedar Rapids Television Company v. Federal Communications Commission⁷⁴  wherein we upheld the Commission's refusal to grant a hearing on a proposal to add additional distant signals to an ongoing CATV system within the Grade B territory of a VHF station. The arguments there, like those here, extended to deterrence of UHF development⁷⁵  and cumulative economic impact from CATV activity,⁷⁶  and the Commission found them lacking in the same specifics absent here.⁷⁷  There, too, like here, no UHF expansion was in the offing,⁷⁸  and the Commission found no "concrete threat"⁷⁹  posed by an anticipated accumulation of CATV operations. There we held, as here we reaffirm, that "the Commission could reaonably require some evidence of reduced revenues or lost advertising, and of the nature of the CATV operations"⁸⁰  before embarking upon an evidentiary hearing. And, as in Cedar Rapids, " [w]e can find no basis for concluding that the Commission's construction of the distant-signal rules is `plainly erroneous or inconsistent with' the rules themselves," so "the Commission's interpretation is entitled to `controlling weight.'"⁸¹ 

We are mindful of the problems the burgeoning CATV industry is presenting for television broadcasting, and the burdens incidental to full scale evidentiary hearings in a constantly increasing number of CATV applications, but it is primarily for the Commission to make the adjustment. The question is not what we ourselves might be inclined to do, but whether what the Commission has done accords well with entrenched standards by which administrative action is tested judicially.⁸²  We think that in this case it does.

Affirmed.