McLaughlin and Van Dusen, Circuit Judges, and Hannum, District Judge.
VAN DUSEN, Circuit Judge.
This is a petition for review in which the petitioner, Meadville Master Antenna, Inc. (MMA), appeals from a Memorandum Opinion and Order of the Federal Communications Commission released May 6, 1969, denying petitioner's request for waiver of the nonduplication provisions of section 74.1103(e) of the Rules of the Commission, 47 C.F.R. § 74.1103(e), adopted March 8, 1966.
Petitioner, MMA, is the owner and operator of a twelve-channel community antenna television system with 6200 subscribers, serving the City of Meadville, Pennsylvania, with a population of about 17,000, suburban and semi-rural adjacent areas with a population of about 6,000, and the boroughs of Conneaut Lake and Saegertown, Pennsylvania, with a population of about 3,000. Near the beginning of the present conflict in 1966, MMA was carrying the signals of two NBC affiliates, WICUTV, Channel 12 in Erie, Pennsylvania, and WFMJ-TV, Channel 21 in Youngstown, Ohio. WFMJ-TV lies about 45 miles southeast of Meadville and WICU-TV lies approximately 30 miles north of Meadville.
Community antenna television systems receive distant signals by means of an antenna, amplify and relay them by cable to the sets of individual subscribing members who pay a fee for the service. First Report and Order, 38 F.C.C. 683, 684 (1963). CATV systems were intended to supplement free systems and have been utilized traditionally in communities where rough terrain made off-the-air reception difficult or where sparse population made operation of a local station commercially unfeasible and so necessitated the importation of distant signals. Eventually, however, CATV systems began servicing communities already served through off-the-air reception of television signals. In response to concern expressed about the financial position of local stations faced with CATV competition, the Commission asserted jurisdiction over all CATV systems,*fn1 conducted inquiries, and adopted rules covering their operations.*fn2
The carriage provisions of the Rules of the Federal Communications Commission provide that a CATV system must carry upon request the signals of certain local stations. The non-duplication provisions*fn3 of the rules contained in section 74.1103 provide that a CATV system, upon the demand of a qualifying station, must refrain from transmitting from stations with a lower priority or more distant signals programs which are also carried, at the same time or at another time on the same day, by the qualifying station.*fn4
The relative priority of stations is determined by the signal strength contours placed over the CATV system's service community.*fn5 The Commission has provided in section 74.1109 for the waiver of the non-duplication provisions when the need of petitioner and the public interest so requires.
On June 1, 1966, WICU-TV requested petitioner MMA to provide program exclusivity for WICU-TV as against WFMJ-TV. WICU-TV has a predicted principal city (city grade) contour while WFMJ-TV has a predicted Grade B contour. MMA refused and, on July 1, 1966, filed a petition for waiver of the non-duplication rules on the grounds that (1) the signal strength of WICU-TV's signal was inferior or no better than the signal strength of WFMJ-TV in most of Meadville; (2) the signal quality of WICU-TV was substantially inferior to that of WFMJ-TV both in color and in black and white; (3) there was a community of interest between Meadville and Youngstown; and (4) the Commission's long-standing policy of encouraging the development of UHF television favored waiver in this instance since WFMJ-TV is a UHF station and WICU-TV is a VHF station. On September 1, 1966, Lamb Communications, Inc., the licensee of WICU-TV and intervenor in this action, filed an Opposition to the Petition for Waiver and included an engineering report (hereinafter termed the Smith report), purporting to measure the strength and quality of the signals of the two stations.*fn6 Field strength measurements were made at ten sites in the Meadville area. Interviews were conducted and observations of signal quality made at the stores of eight television dealers in the area. On October 24, 1966, the petitioner, MMA, filed a Reply to the Opposition of Lamb and included comments of TV dealers in the Meadville area and an Engineering Statement by Archie S. Taylor.*fn7
On May 6, 1969, the Commission rejected MMA's petition for waiver of the non-duplication provisions of the Commission's rules.
Subsequently, MMA filed on June 5, 1969, a Petition for Reconsideration with an accompanying Motion to Stay.*fn8 MMA later submitted a supplement to the petition, including a subscriber survey and a resolution of the Meadville City Council asking for reconsideration, on June 24, 1969.*fn9
On September 2, 1970, the Federal Communications Commission released a Memorandum Opinion and Order rejecting MMA's Petition for Reconsideration and Motion to Stay.*fn10
Section 74.1109(c) (1) of the rules directs that a petition for waiver of the non-duplication rule shall set forth the "pertinent facts and considerations 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." See also Shen Heights TV Association, 11 F.C.C.2d 814 (1968). Petitioner, in this case, contends that waiver of the non-duplication rule is justified because the signal strength of WICU-TV is such that its predicted contour does not in fact encompass large sections of the community and is in fact equal to or inferior to that of WFMJ-TV and because the quality of both black and white and color signals of WICU-TV is substantially inferior to that of WFMJ-TV. WICU-TV, the party seeking non-duplication protection, had the burden of establishing the applicability of section 74.1103 of the rules. This burden was fulfilled, as here, by establishing the predicted contours of the stations and the manner in which the CATV system has failed to provide non-duplication protection. See Shen Heights TV Association, 11 F.C.C.2d 814, 816 (1968); Bluefield Television Cable, 10 F.C.C.2d 731, 732-33 (1967). Then, the burden shifted to the CATV operators to demonstrate either that the rule is inapplicable because the contour does not, in fact, encompass the community or that waiver of the rule is warranted because of facts and circumstances which override the public interest determinations underlying the rule. Shen Heights TV Association, 11 F.C.C.2d 814, 816 (1968). Here MMA raises the issue of signal intensity not in an effort to show that section 74.1103 is inapplicable,*fn11 but as one of the facts and circumstances which, it is claimed, justifies waiver of section 74.1103. In its Second Report and Order, the Commission recognized signal intensity as a basis for waiver, stating "carriage will not be required where a sufficient showing is made that a predicted signal is not in fact present in the community, or that a good signal is not obtainable because of technical deficiencies on the part of the station." Second Report and Order, 2 F.C.C.2d 725, 753 n. 40 (1966); see Bluefield Television Cable, 10 F.C.C.2d 731, 732 (1967). However, in a recent decision, the Commission added to the unfair competition and economic impact policies*fn12 underlying the non-duplication rule a third consideration, the allocations policy.*fn13 Apparently relying on the new allocations policy, the Commission narrowed the "facts and circumstances" which can justify a waiver and stated:
This limitation apparently refers only to attempts to justify waiver on the grounds of signal intensity. See Community Service, Inc. v. United States, 418 ...