Wilton E. Hall and Greenville Television Company, Appellants, v. Federal Communications Commission, Appellee,spartan Radiocasting Company, Intervenor, 237 F.2d 567 (D.C. Cir. 1956)

Appellants protested a Federal Communications Commission order of April 30, 1954, granting intervenor a modification of its permit to construct and operate a television station on Channel 7, assigned to Spartanburg, South Carolina.¹  Those protests were denied by the Commission without a hearing, upon the ground that appellants did not appear to be "parties in interest," but we reversed that action and remanded the cause to the Commission for hearing under § 309 (c) of the Communications Act.²  Greenville Television Co. v. Federal Communications Comm., 1955, 95 U.S.App.D.C. 314, 221 F.2d 870. On March 9, 1956, after hearing, the Commission affirmed its grant of the modification permit. This appeal followed.

For introductory purposes the facts are sufficiently stated in our earlier opinion. Such additional facts as may be relevant will be detailed at appropriate parts of this opinion.

We first consider the last of the issues stipulated by the parties: "Whether the Commission made proper findings, based upon evidence of record, to support a determination that public interest, convenience and necessity would be served by a modification of the original construction permit granted to Intervenor."

The Commission and intervenor, in stipulating this issue, reserved the right to "raise jurisdictional questions" with respect to it. The Commission does not appear to have exercised its reserved right. But the intervenor has, by contending that the issue was not asserted as a ground of protest and that, moreover, there was no need for the Commission to make a public interest determination in this proceeding. We dispose of this jurisdictional matter before discussing the merits of the issue.

The modification permit was granted without a hearing under § 309(a) of the Communications Act, which provides: "If upon examination of [an] application * * * the Commission shall find that public interest, convenience, and necessity would be served by the granting thereof, it shall grant such application." Absent protest under § 309(c), the ex parte determination of public interest thus made by the Commission would support the grant. Nor does it follow that, by entertaining a protest and holding a hearing under § 309(c), the Commission necessarily vitiates its earlier ex parte determination that the grant of an application would serve the public interest. An application is not subjected to all the tests of a comparative proceeding merely because its grant has been protested. But, neither is the earlier public interest determination conclusive. If it appears, upon the hearing held under § 309(c), that the earlier ex parte grant was improvident, because it would not serve the public interest, the permit should be cancelled. That the particular respect in which the grant offends may not have been alleged as one of the specific grounds of the protest does not preclude this result. The purpose of the statute is to search out the public interest. We said in Clarksburg Publishing Co. v. Federal Communications Comm., 1955, 96 U.S.App.D.C. 211, 215, 225 F.2d 511, 515:

"The statute contemplates that, in appropriate cases, the Commission's inquiry will extend beyond matters alleged in the protest in order to reach any issue which may be relevant in determining the legality of the challenged grant. Clearly, then, the inquiry cannot be limited to the facts alleged in the protest where the Commission has reason to believe, either from the protest or its own files, that a full evidentiary hearing may develop other relevant information not in the possession of the protestant."

A fortiori, where the information relevant to the public interest has already been disclosed by the evidentiary hearing, the Commission's "inquiry cannot be limited to the facts alleged in the protest." So, if it appears upon the record of the § 309(c) proceeding that the public loses rather than gains from the modification of intervenor's construction permit, the Commission must reckon with that circumstance even if it was not alleged in the protests.

We are thus brought to the merits of the issue and a consideration of the engineering evidence which looms so large in this case. Appellants sought to prove to the Commission that the modification violated § 307(b) of the Act providing for "fair, efficient and equitable" distribution of service among communities and § 3.607³  of the Commission's Rules governing availability of channels from the Table of Assignments promulgated in the Commission's Sixth Report and Order.⁴  In short they sought to establish that the modification made intervenor's station a Greenville station rather than a Spartanburg station. In this they failed,⁵  but they did prove, if their evidence is acceptable, that the modification would result in a diminution of the signal to the Spartanburg area, thus eliminating service to some areas and some people and down-grading service to those who will continue to receive the signal. That such a curtailment of service is not in the public interest is axiomatic. Whether or not it may be off-set by concomitant factors is something the Commission should consider.⁶  For example, the Commission concluded that intervenor's move to Paris Mountain was made in order to obtain a network affiliation with the Columbia Broadcasting System. Had the Commission concluded from the engineering evidence that the move would down-grade service to the Spartanburg community, it could then have considered whether the value to the community of a network affiliation outweighed the curtailment of coverage, whether a network other than CBS might be available without a change, and whether a CBS affiliation necessitated lowering both power and antenna height, as well as relocating the transmitter. Since, however, the Commission repudiated the conclusion of service curtailment which would follow from an acceptance of the engineering evidence and, therefore, gave no consideration to possible compensating factors, we confine ourselves to the engineering evidence and what follows therefrom.

The modification permit authorized intervenor to construct its transmitter slightly farther from Spartanburg and much closer to Greenville and Anderson than originally authorized by the construction permit. It also provided for a considerably lower tower and considerably less power.⁷ 

The Commission found "the pertinent effects of the change" were (1) to reduce the station's minimum signal over Spartanburg from 95 dbu to 85 dbu; (2) to reduce the percentage of the population of the Spartanburg trading area which would receive Grade A⁸  service from 99.96% to 87%; (3) to reduce service from Grade A to Grade B for about 250,000 persons; and (4) to deprive of any service whatever some⁹  persons who would have been within the Grade A contour of the Hogback operation.

The foregoing "pertinent effects" are detailed in the Commission's decision not as contentions of the appellants, but as formal findings of the Commission. But the Commission adds in a footnote that those findings were based on the official propagation curves which are incorporated in its rules¹⁰  and that it does not really believe that those curves can support such findings. We are thus presented with an anomalous record. If the Commission has found the facts as stated, appellants are entitled to a reversal. If the Commission has not found the facts, it would appear that it expects us to exercise that function in its stead. That we may not do. To resolve the anomaly, we read the Commission's decision as a refusal to make findings from the propagation curves. Thus read, the issue before us is whether that refusal was arbitrary and unreasonable.

The degree of reception of television service is measured in terms of statistical probabilities — e. g., whether a signal of a given intensity will be received 90% of the time by at least 70%¹¹  of the locations at the outer limits of the service area in question. The mathematical curves and equations by which these determinations are made were originally promulgated in Appendix B of the Third Notice of Proposed Rule Making¹²  for use in drawing up the table of assignments contained in the Sixth Report and Order. They are "based on an extensive number of measurements made at various locations over a long period of time."¹³  The field intensity contours are a function of a great number of variables in addition to the obvious factors of transmitter power and distance and height of the radiating antenna¹⁴  — such factors as temperature, humidity, terrain, foliage, type of receiver and height of receiving antenna.¹⁵  The Commission recognized that, because of these multiple variables, revisions of the propagation charts would need to be made "from time to time as more measurements are made," but was "satisfied that on the basis of the data presently available to it the data underlying the propagation charts are sufficient to afford an adequate statistical basis for describing field intensities under average conditions."¹⁶  On the other hand, the Commission also recognized "that there may be substantial variations in individual areas."¹⁷  Upon this last proposition the Commission founds its present contention.

The Commission argues that possible variation of the numerous unknowns in the equation may make Spartanburg an abnormal area for which an application of the propagation curves cannot produce true contours.

Though compelled to admit that the contours relied on by appellants are accurate as a matter of high statistical probability, the Commission asserts that they have not been demonstrated to be actually accurate and, therefore, should be rejected as a basis for findings. The Commission's view is erroneous. The law does not always insist upon proof that a thing is necessarily so. It is accustomed to rely upon probabilities. No better analogy is required than the acceptance of mortality tables to prove life expectancy.¹⁸  The virtue of such evidence is that, instead of being confronted with a vacuum of knowledge, the tribunal is "left with less to guess about, learning with relative accuracy what average experience is." Watkins v. Holmes, 1943, 93 N.H. 53, 35 A.2d 395, 398. Just as average life expectancy as shown by tables is admissible even where the individual is not average, United Verde Extension Mining Co. v. Koso,¹⁹  the propagation curves are admissible to prove contours even where the area may be abnormal. Evidence of such abnormality would, of course, also be admissible and might outweigh the probative force of the propagation curves.²⁰  But appellants, who rely upon the propagation curves, are not required to prove the area normal. As we said in W. S. Butterfield Theatres, Inc., v. Federal Communications Comm., 99 U.S.App.D.C. ___, 237 F.2d 552, 557: "The Commission's view that ad hoc exceptions to the rules are to be accepted on faith, while he who relies on the rule has the burden in each case of re-establishing it by independent proof, is error." Certainly, if Spartanburg were asserted to be an abnormal area, it would be altogether fair to require that proof of the abnormality be adduced by the parties relying thereon. Absent such proof, the propagation curves are applicable.

The inconsistency of the Commission's position is exemplified by the fact that it used the propagation curves to calculate the coverage of every single station it allocated in the Sixth Report and Order.²¹  In making these allocations, the Commission "sought to distribute the available channels so as to achieve maximum television coverage with a minimum of interference between stations * * *." Logansport Broadcasting Corp. v. United States, 1954, 93 U.S.App.D.C. 342, 344, 210 F.2d 24, 25-26. And when a particular assignment was attacked as not providing a fair and equitable distribution of service, we held that the Commission had founded it upon "substantial evidence." Id., 93 U.S.App.D.C. at page 346, 210 F.2d at page 28.

But the Commission argues that it is not "inherently inconsistent" to reject the propagation curves as an index of coverage of a specific station while using it as the basis for a nation-wide Table of Assignments. A fallacy of this argument, as has already been shown, is that a general rule is not rendered inapplicable merely by a possibility that the specific situation varies from the norm.²²  The Commission itself, moreover, customarily uses the propagation curves to measure the service areas of specific stations. Thus it uses them to measure overlap in connection with its multiple ownership rule, see Clarksburg Publishing Co. v. Federal Communications Comm'n, 96 U.S.App.D.C. at pages 215-216, 225 F.2d at pages 515-516, and to justify ad hoc "drop-ins" of unassigned channels. See Van Curler Broadcasting Corp. v. United States, 98 U.S.App.D.C. 432, 236 F.2d 727. The Commission even used the curves, at earlier stages of this proceeding, to measure the coverage of the very station here in question, in order to justify its conclusion that the coverage change was not enough to constitute an economic peril to the appellants.²³ 

For the Commission to deprive appellants of the propagation curves as a tool to measure coverage, while approving its own use of the curves as "an attempt to make a rough judgment as to future economic loss," is arbitrary and capricious.

One of the major points of contest in this proceeding is whether intervenor is guilty of lack of candor for failing to disclose its true intentions to the Commission,²⁴  when it applied for special temporary authorization to operate from Paris Mountain. In the background of that issue lurks the question which seems always to arise when a VHF station invades an area served by UHF stations — whether the newcomer, because of its greater desirability to the networks, will preempt the network programs, to the great economic injury of the older stations.²⁵  The appellants have expressed fear that a VHF station transmitting from Paris Mountain would provide so strong a signal to their communities as to attract the networks and, consequently, the national advertisers. On that account they protested both the special temporary authorization and the modification permit, while they had made no objection whatever to the grant of the original application calling for a transmitter on Hogback Mountain.

After the original construction permit was granted, intervenor learned that the network would give it no affiliation, because a Hogback operation would overlap the service area of another station with which the network was affiliated. Thereupon, a Paris Mountain site was selected and the network gave intervenor an affiliation for a Paris Mountain operation. If intervenor, at that stage, intended to build a Paris Mountain transmitter, rather than a Hogback Mountain transmitter, it should have applied for a modification permit, rather than for a special temporary authorization. Appellants say intervenor applied for the special temporary authorization instead, because such authorizations are sometimes obtainable rather summarily from the Commission staff, without formal Commission action²⁶  and without advance public notice, and because, once a station is operating, it is easier to obtain permanent authority. But intervenor's motive is of no consequence. The issue, as the Commission said in its Report and Order of March 9, 1956, is whether, in applying for the special temporary authorization, intervenor "misrepresented the temporary nature of, or concealed material facts with respect to such operation."

The Commission answered this question in the negative.

It declared that, to sustain their burden of showing Spartan's misrepresentation or concealment, appellants were required to prove that Spartan, when it requested the special temporary authorization, had definitely decided to abandon Hogback as the site of its permanent facilities. In our view of the case, their burden was not so heavy. We think it was a misrepresentation for Spartan to assure the Commission that its intention was to locate its permanent transmitter on Hogback if, in fact, there was no fixed intention, but rather complete indecision whether or not it would do so.

The Commission found that (1) in the two month period specified in the construction permit for commencement of construction, intervenor "took no steps looking toward construction on Hogback," but did negotiate for property on Paris; (2) "CBS never intended to award Spartan the affiliation on the basis of the Hogback Mountain site"; (3) "It is difficult to determine from the record as a whole" that CBS did anything "to leave a doubt in the mind of Spartan's president on the [latter] proposition";²⁷  (4) when he requested the special temporary authorization, Spartan's president "had not yet reached a decision" whether he would or would not abandon Hogback as the permanent site and in speaking to a CBS representative he reserved that decision until later; (5) no such indecision was expressed to the Commission in the request, which sought temporary authorization "pending completion of the [Hogback] facilities"; and (6) the special temporary authorization was granted upon intervenor's express representation that it was only for an interim operation pending construction of its permanent facilities on Hogback.²⁸ 

On the basis of those findings, only one conclusion is possible — that Spartan concealed from the Commission and, by clear implication, misrepresented material facts concerning its proposal. The Commission's contrary conclusion is grounded upon a mistaken concept that there is no duty to disclose to the Commission any facet of a proposal as to which there may be a mental reservation, no matter how far advanced the proposal or rudimentary the reservation. There are no findings that Spartan was frank in its dealings with the Commission and, if there were such findings, they would be altogether unsupported by the evidence.

Spartan's misrepresentation to the Commission cannot be considered nugatory on any theory that the Commission would have acted similarly even if the truth had been revealed.²⁹  "The fact of concealment may be more significant than the facts concealed. The willingness to deceive a regulatory body may be disclosed by immaterial and useless deceptions as well as by material and persuasive ones. We do not think it is an answer to say that the deception was unnecessary and served no purpose." Federal Communications Comm. v. WOKO, 1946, 329 U.S. 223, 227, 67 S. Ct. 213, 215, 91 L. Ed. 204. Nor would it matter if Spartan's lack of candor were intended to deceive the Columbia Broadcasting System rather than the Commission. In the WOKO case as well, "the purpose of the concealment was to prevent the facts from becoming known to Pickard's Columbia colleagues." Id., 329 U.S. at pages 225-226, 67 S. Ct. at page 214.

Our conclusion that Spartan misrepresented its proposal does not automatically result in disqualification. The basis of a disqualification for lack of candor is that the guilty party may be unworthy of the reliance which the Commission necessarily places on its licensees. Spartan's misrepresentation was calculated, deliberate and not insignificant, but whether the Commission should, on that account, place less reliance on Spartan as a licensee is a question which should be decided in the first instance by the Commission itself. Federal Communications Comm. v. WOKO, 329 U.S. at page 229, 67 S. Ct. at page 216.

Having decided that the Commission committed error in rejecting the propagation curves as evidence and in concluding that intervenor was not guilty of misrepresentation, we set aside the Commission's delete order of March 9, 1956, affirming that grant.

We have pointed out that, with the propagation curves in evidence, the record shows the modification is a curtailment of service to the Spartanburg area which, unless outweighed by other factors, is not in the public interest. But we have no way of determining from the record whether service curtailment may be outweighed by other factors pointing toward, rather than away from, public interest. As we have said, such a question is for the Commission's consideration, as is also the question whether intervenor's misrepresentation so far deprives it of reliability as to disqualify it as a licensee.³⁰  For consideration of those questions, the case is remanded to the Commission.

Reversed and remanded.