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01/23/50 Mansfield Journal Co. v. Federal Communications

January 23, 1950

MANSFIELD JOURNAL CO

v.

FEDERAL COMMUNICATIONS COMMISSION (TWO CASES), AND THE LORAIN JOURNAL CO.

v.

FEDERAL COMMUNICATIONS

IN FEDERAL COMMUNICATIONS COMMISSION

v.

POTTSVILLE BROADCASTING CO., 309 U.S. 134, 137-38, THE SUPREME COURT SAID:



Before WILBUR K. MILLER, WASHINGTON and BAZELON, Circuit Judges.

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT. 1950.CDC.115

Commission.

January 23, 1950.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WASHINGTON

WASHINGTON, Circuit Judge: The main question here presented concerns the authority of the Federal Communications Commission to review the past business practices of a newspaper company applying for a radio broadcasting license, where such practices are found to be monopolistic in character, and a license is for that reason denied.

The Mansfield Journal Company appeals from a decision of the Federal Communications Commission denying the Company's applications for licenses to construct FM (frequency modulation) and AM (amplitude modulation) radio stations in Mansfield, Ohio (No. 10049 , No. 10050 ), and from the Commission's action in ordering the application of the Fostoria Broadcasting Company for an AM station in Fostoria, Ohio (which was mutually exclusive of the proposed Mansfield AM station), to be placed in the pending file (No. 10050). The Lorain Journal Company appeals from the Commission's denial of its application for an AM station in Lorain, Ohio (No. 10051).

We consider first the Mansfield Journal cases (Nos. 10049 and 10050).The Mansfield AM and FM applications were filed at different times, and were designated for separate hearings. The FM application was to be heard along with the request of two other applicants for FM facilities in the same community, because only two FM frequencies were then available in that area. The AM application was to be heard along with the Fostoria and Lorain requests for licenses. After both the AM and FM hearings were completed, the Commission allocated an additional FM frequency to the area and severed the three applications for FM stations. *fn1 Mansfield's FM application was consolidated with the three AM applications for purposes of decision. *fn2

The facts are as follows: The Mansfield Journal is the sole newspaper in the town of Mansfield, Ohio. The only other medium of mass communication in Mansfield is radio station WMAN, which is under different ownership than the newspaper and competes with it for local advertising. The Commission found that the Mansfield Journal used its position as sole newspaper in the community to coerce its advertisers to enter into exclusive advertising contracts with the newspaper and to refrain from utilizing station WMAN for advertising purposes. It did this by refusing to permit certain advertisers, who also use the radio to sell their products, to secure regular advertising contracts or to place any advertisements in the newspaper whatever. The Commission found further that Mansfield had demonstrated a marked hostility to station WMAN by declining to publish WMAN's program log and by failing to print any comments about the station unless unfavorable. The Commission concluded that such actions were taken with the intent and for the purpose of suppressing competition and of securing a monopoly of mass advertising and news dissemination, and that such practices were likely to continue and be reenforced by the acquisition of a radio station. The applications of the Mansfield Journal therefore were rejected, the Commission holding that a grant to it would be inconsistent with the public interest, and that it was unqualified.

Appellant raises several objections to this action by the Commission. First, it claims that the consideration of appellant's competitive activities as a newspaper is beyond the jurisdiction of the Commission. Appellant argues that enforcement of the antitrust laws is exclusively the province of other agencies and that the action taken by the Commission is an ultra-vires attempt to enforce these laws. Second, appellant contends that the Commission's determination is equivalent to adjudicating appellant guilty of a crime without trial by jury and thus is violative of the Sixth Amendment. Third, it is claimed that refusal of a license to appellant because it did not carry certain advertisements and would not print certain news items constitutes an invasion of the freedom of the press, in violation of the First Amendment. Appellant also alleges that the findings were capricious and not supported by the evidence, and that appellant had no notice that such matters were going to be considered. We shall consider these contentions seriatim .

"In granting or withholding permits for the construction of stations, and in granting, denying, modifying or revoking licenses for the operation of stations, 'public convenience, interest, or necessity,' was the touchstone for the exercise of the Commission's authority. While this criterion is as concrete as the complicated factors for judgment in such a field of delegated authority permit, it serves as a supple instrument for the exercise of discretion by the expert body which Congress has charged to carry out its legislative policy. . . . The Communications Act is not designed primarily as a new code for the adjustment of conflicting private rights through adjudication. Rather it expresses a desire on the part of Congress to maintain, through appropriate administrative control, a grip on the dynamic aspects of radio transmission."

The criterion of public convenience, interest and necessity was not intended to permit the Commission to deny licenses arbitrarily. Federal Radio Commission v. Nelson Bros. Bond & Mortgage Co., 289 U.S. 266. Nor was it intended to relegate the Commission to the functions of a traffic policeman with power to consider merely the financial and technical qualifications of the applicant. National Broadcasting Co. v. United States, 319 U.S. 190, 215-16. "An important element of public interest and convenience affecting the issue of a license is the ability of the licensee to render the best practicable service to the community reached by his broadcasts." Federal Communications Commission v. Sanders Radio Station, 309 U.S. 470, 475. "Inquiry into an applicant's character, as commonly understood, would certainly be material." Mester v. United States, 70 F.Supp. 118, aff'd. 332 U.S. 749; see Federal Communications Commission v. WOKO, Inc., 329 U.S. 223, 229. In fact, character is specifically set forth in the Communications Act as a relevant consideration. 47 U.S.C.A. § 308. This does not mean that the Commission may set up some capricious standard of proper behavior which must have been complied with as a prerequisite to the granting of a license. But certainly in determining whether a particular applicant should be permitted to operate so important and restricted a facility as a radio station, which reaches into the homes of so many people, it is appropriate that the Commission examine pertinent aspects of the past history of the applicant.

The Commission has determined in the instant case that it is contrary to the public interest to grant a license to a newspaper which has attempted to suppress competition in advertising and news dissemination. This would not appear to be a consideration conceived in whimsy but rather a sound application of what has long been the general policy of the United States. Congress intended that there be competition in the radio broadcasting industry. Federal Communications Commission v. Sanders Radio Station, 309 U.S. 470, 474-76. It is certainly not in the public interest that a radio station be used to achieve monopoly.

Appellant argues that this amounts to enforcement of the antitrust laws. But whether appellant has been guilty of a violation of these laws is not here in issue. The fact that a policy against monopoly has been made the subject of criminal sanction by Congress as to certain activities does not preclude an administrative agency charged with furthering the public interest from holding the general policy of Congress to be applicable to questions arising in the proper discharge of its duties. Whether Mansfield's activities do or do not amount to a positive violation of law, and neither this court nor the Federal Communications Commission is determining that question, they still may impair Mansfield's ability to serve the public. Thus, whether Mansfield's competitive practices were legal or illegal, in the strict sense, is not conclusive here. Monopoly in the mass communication of news and advertising is contrary to the public interest, even if not in terms proscribed by the antitrust laws.

It may be that appellant is contending that if the Commission's findings of fact were correct, then appellant has violated the antitrust laws, and that in such case the Commission is without jurisdiction to consider these matters. There is no merit in such a contention. It is provided in the Federal Communications Act itself that the Federal Communications Commission may refuse a license to any person who "has been finally adjudged guilty by a Federal court of unlawfully monopolizing or attempting unlawfully to monopolize, radio communication, directly or indirectly . . . or to have been using unfair methods of competition." 47 U.S.C.A. § 311.The Mansfield Journal has not been convicted of any such violation. But the statute does not for that reason place the Journal's past conduct with ...


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