ON PETITION FOR REVIEW OF AN ORDER OF THE FEDERAL COMMUNICATIONS COMMISSION.
Seitz, Chief Judge, Gibbons and Rosenn, Circuit Judges. Gibbons, Circuit Judge dissenting.
In May 1971 this court set aside an order of the Federal Communications Commission denying the request of Meadville Master Antenna, Inc., (MMA), a community antenna television (CATV) system operator, for waiver of the non-duplication provisions of the rules of the Commission.*fn1 We then remanded the case to the Commission so that it might "set forth in detail its conclusions and the reasons for them" on certain key issues. On remand, the Commission ordered an evidentiary hearing on these issues, made findings of fact, and once again denied the waiver request. MMA's administrative appeal of this decision was unsuccessful and this court is now called upon to review the Commission's disposition of the matter since our remand. We deny the petition for review.
In 1966, the Federal Communications Commission adopted rules designed to afford operating television stations with some protection against CATV systems.*fn2 These rules may be briefly described as follows. The Commission has categorized operating television stations for purposes of priority, which priority is determined by the stations' predicted signal strength over the CATV system's service community. The prediction is known as a contour. Meadville I, 443 F.2d at 284. Wheeling Antenna Co. v. United States, 391 F.2d 179, 181 (4th Cir. 1968). The non-duplication provisions of the Commission's rules*fn3 provide in essence that when a CATV system operates within a Grade B or higher priority predicted contour of any television station, the system must provide program exclusivity for that station at the latter's request against a station with a lower priority predicted contour. Non-duplication (i.e., exclusivity) means that the CATV system must refrain from transmitting programs of the lower priority station which are also carried, at the same time or at another time on the same day, by the higher priority station.*fn4
The present case arose in 1966 when WICU-TV (Channel 12), Erie, Pennsylvania, requested non-duplication protection of its NBC network programming, from MMA, owner and operator of a cable television system in Meadville, Pa., against the NBC programming of WFMJ-TV (Channel 21), Youngstown, Ohio. In response, MMA petitioned for waiver of the non-duplication requirements.*fn5 The waiver was sought principally on the grounds that (1) the signal strength of WICU-TV is inferior to or no better than the signal strength of WFMJ-TV in most of Meadville and hence does not operate within the predicted contour which would require non-duplication protection; and (2) the signal quality of WICU-TV is substantially inferior to that of WFMJ-TV both in color and in black and white.*fn6 An additional ground, that there is a community of interest between Meadville and Youngstown, was also advanced.*fn7
MMA supported its waiver request with a report prepared in October 1966 by Archer S. Taylor, a consulting engineer, (hereinafter referred to as the Taylor Report), which contended that the median field intensity of WICU-TV's signal over Meadville was less than 56 dBu*fn8 or Grade B. According to the report, field intensity was measured at 100 locations corresponding to various intersections plotted along a grid of the map of Meadville, with the exclusion of "a number of intersections where it was quite apparent the field intensity would exceed 56 dBu," and intersections in uninhabited areas of Meadville.
As to signal quality, the Taylor Report asserted that the black and white, as well as color signal qualities, of WICU-TV were distinctly inferior to those of WFMJ-TV.This portion of the report was based on various tests comparing the picture quality of the two stations, a number of which were conducted at MMA's head end (the point where off-the-air television signals are received by cable television antenna and introduced into the cable system) to eliminate the possibility that MMA's equipment was the cause of WICU-TV's inferior signal quality.
Additionally, MMA supported its position with survey responses of MMA subscribers certifying to the consistently inferior quality of WICU-TV reception, and a resolution of the Meadville City Council expressing its belief that WICU-TV's signal is inferior to that of WFMJ-TV.
WICU-TV's licensee subsequently filed an Opposition to the Petition for Waiver. In support, it submitted a study prepared by Smith Consulting Radio Engineers, which contained measurements of the signal strengths of stations WICU-TV and WFMJ-TV taken at ten sites in the Meadville area, and measurements of the signal qualities of the two stations. It also submitted an RCA Proof of Performance Statement indicating that WICU-TV equipment was operating properly at its transmission site.*fn9
In May 1969 the Commission denied the petition without hearing.*fn10 MMA subsequently filed a Petition for Reconsideration with an accompanying Motion to Stay, which were both denied in September 1970.*fn11 In both orders, the Commission failed to set forth in detail the agency's reasons for not adopting the Taylor Report or MMA's other evidence. Thus, on review, this court held:
We do not think anything submitted by petitioner or examined in the Commission's opinions overcomes the showing that intervenor has made. For the reasons stated, including the failure to state "the grounds for denial" and the absence of support for its action in the record when read as a whole, the summary denial of these petitions constitutes unreasonable and illegal action by the Commission. See 5 U.S.C. §§ 702 and 706; cf. Universal Camera Corp. v. National Labor Relations Board, 340 U.S. 474, 71 S. Ct. 456, 95 L. Ed. 456 (1951).
For the foregoing reasons, we will set aside the May 1969 Commission order and remand the case to the Commission so that it may set forth in detail its conclusions and the reasons for them on the issues of signal strength, as well as on black and white and color signal quality.
Meadville I, 443 F.2d at 291.
On remand, the Commission designated the matter for evidentiary hearing on the following issues:
(1) To determine (a) whether the community served by Meadville Master Antenna, Inc., is encompassed in whole or in part by the actual Grade B contour of WICU-TV, and (b) whether the actual signal contour of WFMJ-TV has the same or higher priority, in terms of the priorities established by Section 74.1103 [New Section 76.92] of the Commission's rules, compared with the actual signal of WICU-TV.
(2) To determine whether the technical quality of WICU-TV's black-and-white signal reception in the community served by Meadville Master Antenna, Inc., is substantially inferior to that of WFMJ-TV.
(3) To determine whether the technical quality of WICU-TV's color signal reception in the community served by Meadville Master Antenna, Inc., is substantially inferior to that of WFMJ-TV.
(4) To determine whether, in light of the evidence adduced on the above issues, a grant of the request for waiver would be consistent with the public interest.
34 F.C.C.2d 358, 359. All pleadings comprising the record in the case before this court were made part of the record on rehearing.*fn12
At the hearing, held February 7-9, 1973, Jules Cohen, consulting electronics engineer for WICU-TV, testified concerning his observations and measurements in the Meadville area over periods totaling ten days in April, May, August, and November, 1972. Cohen's study of signal strength expanded the measurement-grid utilized by Taylor in 1966 from 43 to 58 intersections. The study included not only areas added to the City of Meadville since 1966, but also several uninhabited sections omitted by Taylor which had since become inhabited. Cohen concluded that the WICU-TV median field intensity in Meadville measured in excess of Grade B.*fn13 His measurements also revealed that at the head end of MMA's cable system, WICU-TV measured at City Grade, the highest priority category, as against the lower priority Grade A measurement for WFMJ-TV.
On signal quality, issues (2) and (3) supra, Phillip M. Kane, a Commission engineer, testified that WICU-TV's picture was equal or superior to WFMJ-TV's picture. Kane's findings were based on various picture quality tests which included measurements of the CATV system's resolution (picture clarity and detail) at transmission point by the stations, at MMA's head end, and at carriage along the cable system. Picture quality was also evaluated in accordance with the TASO Picture Quality Rating Scale, which establishes a relation between ...