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01/25/88 Interstate Broadcasting v. Federal Communications

January 25, 1988

INTERSTATE BROADCASTING SYSTEM OF ARIZONA, INC., APPELLANT

v.

FEDERAL COMMUNICATIONS COMMISSION, APPELLEE, NEWMOUNTAIN BROADCASTING CORPORATION, INTERVENOR 1988.CDC.32



Before: BUCKLEY and D.H. GINSBURG, Circuit Judge and OBERDORFER,* District Judge.

UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT

Rules of the District of Columbia Circuit Court of Appeals may limit citation of unpublished opinions. Please refer to the Rules of the United States Court of Appeals for this Circuit.

NOTICES OF APPEAL FROM AN ORDER OF THE FEDERAL COMMUNICATIONS COMMISSION.

MEMORANDUM

Appellants in these consolidated cases challenge a Federal Communications Commission ("FCC" or "Commission") order awarding a broadcast construction permit for a new FM radio station in Glendale, Arizona, to intervenor Newmountain Broadcasting Corp. ("Newmountain"). After reviewing the briefs and record, and hearing oral argument, we find no error and therefore affirm the Commission's order.

Appellants Interstate Broadcasting System of Arizona ("Interstate") and Compadres Communications Corporation ("Compadres") argue that the Commission erred in awarding Newmountain credit for 100 percent integration of ownership and management, inasmuch as one of Newmountain's owners, Donald Jerome, who proposed to act as general manager of the new radio station, had signed a covenant not to compete with his former employer, a Phoenix television station. The record establishes, however, that before signing the agreement, Mr. Jerome struck the word "radio" from the non-competition provision -- a revision he discussed with his immediate supervisor -- so that it would not prevent his involvement with the proposed radio station. Although Interstate and Compadres speculated that the validity of the revision might be disputed, the Commission reasonably accepted the agreement at face value. We therefore find that substantial evidence on the record supports the FCC's award of 100 % integration credit to Newmountain.

Compadres also joins another appellant, Arizona Number One Radio , in challenging the Commission's determination that Newmountain had a "reasonable assurance" of procuring a site on which to locate its transmission facilities. ANOR was the only applicant that did not propose to locate its transmitter in the White Tank Mountains (the "Mountains"), on one of the "Designated Communications Sites" managed by the United States Bureau of Land Management . ANOR argues that because several groups had voiced strong opposition to the construction of new transmission facilities in the Mountains, and because none of the applicants proposing Mountain transmitter sites had received official permission to build there, no applicant proposing to construct its antenna in the Mountains had a reasonable assurance of transmitter site availability.*fn1

In response, Newmountain argues that it had done virtually everything within its power to assure that its proposed transmission site would be available, and points to undisputed evidence that it was BLM policy not to grant final site approval to, and not even to process site applications from, any applicant that had not already received an FCC construction permit. In view of the "bureaucratic gridlock" that would therefore result if the FCC refused to act without final BLM approval of the site, and because Newmountain had diligently worked with BLM officials in selecting a transmitter site -- a site specially designated for communications facilities -- the Commission concluded that Newmountain had secured the requisite reasonable assurance of site availability.

The Commission has consistently held that an applicant need not have a binding agreement for a transmission site, or even an absolute assurance that its proposed site will be available; instead, an applicant must show that it has obtained a reasonable assurance in good faith that the site will be available for the construction of antenna facilities. 49 F.C.C. 2d 1424, 1427 (Rev. Bd. 1974). Because the record supports the Review Board's finding that Newmountain had diligently worked with BLM to select a Mountain location that had already been designated as a communications site, and had "also received some general indication that the particular BLM land would be available to the winning applicant," Joint Appendix at 82, and particularly in light of the Commission's sensible response to the potential stalemate that might result from BLM policy, we will not upset the FCC's determination that Newmountain satisfied the reasonable assurance standard. *fn2

The remaining (and perhaps the most troubling) issue on appeal, which involves the so-called "Huntington Doctrine," is raised by appellant Lee Optical & Associated Companies Retirement & Pension Fund Trust ("Lee Optical"). Under a now-defunct FCC rule, *fn3 Lee Optical specified Peoria, Arizona, as its community of license, rather that nearby Glendale, which was the community listed on the Commission's table of assignments. All the other applicants for the station, including Newmountain, named Glendale as their community of license. Unlike Glendale, which was already the community of license for two other stations, Peoria had no radio station assigned to it. Therefore, unless the Huntington Doctrine applies to this case, section 307(b) of the Communications Act, 47 U.S.C. 307(b) (1982), would require the Commission to grant the permit to Lee Optical. See FCC v. Allentown Broadcasting, Co., 349 U.S. 358, 361-62 (1955).

ln essence, the Huntington Doctrine recognizes that when applicants competing for a high-power license designate, as communities of license, different suburban communities that are "integrally a part of a larger metropolitan area," no applicant should receive dispositive preference under section 307(b); instead, the license should be awarded on the basis of traditional comparative criteria. Beaufort County Broadcasting Co. v. FCC. 787 F.2d 645, 652 (D.C. Cir. 1986). The ALJ found that the Huntington Doctrine was inapplicable in this case, and granted a dispositive preference to Lee Optical; the Review Board reversed, holding that Peoria was an integral part of the Phoenix metropolitan area, and that the permit should be awarded solely on the basis of traditional comparative criteria -- a determination upheld by the Commission, which concluded that this was "a classic Huntington case."

In determining whether the Doctrine applies, the Commission considers four criteria:

1) power and class of station; 2) the independence or interdependence of the specified "community" to central city of "urbanized area"; 3) size and proximity of specified "community" to central city of "urbanized area"; and 4) signal coverage.

Arizona Number One Radio, Inc. 2 F.C.C. Rcd. 44, 45 n.11 (1987). In typical cases involving applications for high-power stations with wide coverage, the decisive factors are usually the proximity and relative sizes of the specified community and the ...


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