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12/30/74 Ram Broadcasting of Texas, v. Federal Communications

December 30, 1974




J. Edward Lumbard,* Senior Circuit Judge for the Second Circuit, McGowan and Tamm, Circuit Judges.



Appeal from the Federal Communications Commission.



Petitioner RAM Broadcasting of Texas, Inc. challenges the grant by the Federal Communications Commission of permits for construction and operation of "guard band" radio paging services in the Dallas-Ft. Worth area to FWS Radio, Inc. , Page A Fone Corp. (Page), and Morrison Radio Relay Corp. (Morrison). 40 F.C.C.2d 680, reconsideration denied, 42 F.C.C.2d 558 (1973). The permits awarded the frequency of 152.24 MHz to FWS and that of 158.70 MHz to Page and Morrison (under a sharing agreement).

RAM is an applicant for two "low band" paging frequencies, 43.22 and 43.58 MHz. Other applicants for those frequencies include Answering Unlimited, Inc. (43.22 MHz); Morrison (43.22 MHz); Airsignal Int'l, Inc. (43.58 MHz); and Forester Radio Telephone, Inc. (Forester) (43.58 MHz). FWS, one of the guard band permittees, is a corporation with 50% of the stock owned by George A. Smith, Jr., who controls Central Radio Dispatch (a previously licensed paging service in the area), and 50% of the stock owned by Pearl and Gene Forester, who also own 48% of the stock of Forester.

Following RAM's application for the two low band frequencies in May 1971, Central and Page filed petitions to deny on the grounds that grant of the applications would result in wasteful duplication of radio paging facilities in the Dallas-Ft. Worth area. These petitions were withdrawn on June 6, 1973, approximately five weeks after the grant of guard band frequencies to FWS, Morrison, and Page.

In support of its petition for review, RAM alleges three errors. First, RAM asserts that there exists a Commission policy of not taking action on an application if the applicant has pending a petition to deny another application for the same service in the same market. The Commission admits the existence of this policy, and recognizes that, in the cases of Page and FWS (related through its principal to Central), this policy was not followed. See 42 F.C.C.2d 558, 560. The Commission argues, however, that since the RAM applications were mutually exclusive with still other applications, such that a comparative hearing was required in any event, none of the delay that RAM experienced up until June 6, 1973, when the petitions to deny were withdrawn, is attributable to those petitions. *fn1 We fail to find any demonstration of prejudice by RAM beyond various bald statements that the petitions to deny caused delay. But on this record it is plain that the delay would have ensued in any event and is not solely attributable to the petitions in question; and we therefore agree with the Commission that its actions in this regard, although a departure from policy, did not create such prejudice as would warrant reversal. See Brown Telecasters, Inc. v. F.C.C., 110 U.S. App. D.C. 127, 289 F.2d 868 (1961), cert. denied, 368 U.S. 916, 7 L. Ed. 2d 131, 82 S. Ct. 196 (1961).

The second policy that RAM alleges was violated in this case is described by RAM in its brief as follows:

"Applications for improvements (such as, increases in power, changes of location, additional frequencies, etc.) to existing facilities will not be granted if that existing licensee has pending at the Commission another application which is mutually exclusive with one in the same service and in the same geographic area."

RAM admits this "policy" has never found expression in writing, and it cites no instances of the policy's employment by the Commission. More important, this alleged policy is directly contrary to decisions of the Commission, see Morrison Radio Relay Corp., 31 FCC 2d 612 (1971); Radio Relay Corp., 22 FCC 2d 504 (1970).

The Commission suggests that what RAM may have in mind is the so-called "headstart" doctrine. This doctrine was used solely in the allocation of guard band frequencies, and provided that no guard band channels would be granted until the Commission could dispose of all other guard band applications in the area. This approach was rejected in the instant proceeding, however, as unduly burdening the public, especially where (as is the case here) the competitor is already providing paging services on two-way channels. 40 F.C.C.2d 680 (1973). See also Radio Relay Corp. v. F.C.C., 409 F.2d 322, 328 (2d Cir. 1969). We believe that the Commission's reasons for this rejection fell within the area of the Commission's regulatory discretion and have support in the record. We therefore do not need to reach the question of whether the policy should apply in the situation where, as here, the competing applications are not both for guard band frequencies.

Finally, RAM suggests that the petitions to deny and the mutually exclusive applications filed by FWS, Morrison, and Page are evidence of "anti-competitive" conduct requiring consideration by the Commission and perhaps disapproval of the permits that were granted to FWS, Morrison, and Page. It is far from clear that this issue was raised before the Commission, although RAM insists that it was in its petition for reconsideration. In any event, the Commission's response to the petition for reconsideration shows that it did consider the problems now voiced by RAM and rationally determined that the public benefits from the grant of these permits were ...

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