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01/27/56 Mcclatchy Broadcasting v. Federal Communications

January 27, 1956




Before WILBUR K. MILLER, FAHY and BASTIAN, Circuit Judges.


Writ of Certiorari Denied March 25, 1957.


WILBUR K. MILLER, Circuit Judge.

An examiner of the Federal Communications Commission conducted a comparative hearing concerning the mutually exclusive applications of McClatchy Broadcasting Company and Sacramento Telecasters, Inc., for a television broadcast station construction permit in Sacramento, California.

In his initial decision, the examiner found McClatchy superior to Telecasters in all respects except as to what has come to be called "diversification of control of the media of mass communication." In that regard he necessarily found Telecasters entitled to preferment, because McClatchy is licensee of several radio stations in the central valleys of California *fn1 and McClatchy Newspapers, of which it is a wholly-owned subsidiary, publishes a number of newspapers in the same area, while Telecasters has no connection with any newspaper or existing broadcasting station and would be a newcomer in the field without broadcast experience, except that one of its officers was formerly connected with an AM station. The examiner considered the diversification factor unimportant because he determined that McClatchy's long history disclosed no tendency toward monopolistic practices and because McClatchy had considerable competition in the broadcasting and publishing fields in its service area. His interesting discussion of the subject is reproduced in the margin. *fn2

The Commission rejected its examiner's recommended decision. Finding only slight differences between the applicants in other respects, it considered the diversification of control of facilities for the dissemination of fact and opinion "to be determinative in this proceeding," denied McClatchy's application, and granted that of Telecasters. McClatchy appeals.

In a prehearing conference, held pursuant to our Rule 38(k),3 the parties stipulated that two questions are presented here. They agreed as to the wording of the second question - to which we shall refer later in this opinion - but were unable to stipulate as to the form of the first. Consequently the prehearing order contains McClatchy's version of the initial question and also the form in which Telecasters and the Commission think it should be stated.

McClatchy stated the first question thus:

"Whether the Federal Communications Commission, in a hearing for a television station construction permit, can deny an applicant with an outstanding record of public service, and which is otherwise superior to its opponent, solely because of ownership of newspapers and broadcasting stations?"

This interesting query framed by the appellant does not seem to us to be presented here, because to some extent it begs the question. There is no doubt that McClatchy has "an outstanding record of public service." And the Commission so found. In the course of its decision it said:

"The record is replete with evidence relating to the meritorious service rendered by the McClatchy radio stations. To detail minutely the public service activities of its newspapers and radio stations would unnecessarily lengthen our decision . . ..

"The record leaves no doubt that McClatchy in the operation of its broadcast stations has given full co-operation to charitable, civic and governmental operations without charge. A plethora of awards and letters of commendation attest to the praiseworthy service it renders to the communities it serves . . .."

But, contrary to the assumption in appellant's version of the first question, the Commission did not find McClatchy superior in every area of comparison save that of diversification of facilities for publishing information, and did not deny it the construction permit solely because of its ownership of newspapers and broadcasting stations.The Commission in its decision analyzed and compared all the characteristics and proposals of the two applicants. It found both qualified to receive a grant were its application unopposed. It found ...

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