willful or repeated failure to observe the requirements of Section 73.123 (a) and (c) of the Commission's Rules. You are hereby notified that you have the opportunity to file with the Commission within (30) days of the date of the receipt of this Notice, a statement in writing as to why you should not be held liable, or, if liable, why the amount of liability should be reduced or remitted. Any such statement should be filed in duplicate and should contain complete details concerning the allegations heretofore made by the Commission, any justification for the violations involved, and other information which you may desire to bring to the attention of the Commission. Statements of circumstances should be supported by copies of relevant documents where available. Upon receipt of any such reply, the Commission will determine whether the facts set forth therein are sufficient to relieve you of liability. If it is unable to find that you should be relieved of liability, the Commission will issue an Order of Forfeiture and the forfeiture will be payable to the Treasurer of the United States. If you do not file, within thirty (30) days of the date of the receipt of this Notice, either a statement of non-liability or a statement setting forth facts and reasons why the forfeiture should be of a lesser amount, the Commission will enter an Order of Forfeiture in the amount of one thousand dollars ($1,000). If you do not wish to file a statement which denies liability, and, in addition, you do not wish to await the issuance of an Order, you may, within thirty (30) days of the date of the receipt of this letter, make payment of the forfeiture by mailing to the Commission a check, or similar instrument in the amount of the one thousand dollars ($1,000), drawn payable to the Treasurer of the United States. BY DIRECTION OF THE COMMISSION, 41 F.C.C. 2d Robert W. Healy, on behalf of Media, Inc.; Lewis I. Cohen and Edward R. Wholl, on behalf of Jud. Incorporated; Frank U. Fletcher and Marvin Rosenberg, on behalf of Hubbard Broadcasting, Inc.; and Jay L. Witkin and David G. Richards, on behalf of the Chief, Broadcast Bureau, Federal Communications Commission. DECISION (Adopted May 22, 1973; Released June 1, 1973) BY THE REVIEW BOARD: NELSON, PINCOCK, AND KESSLER. 1. Media, Inc. (Media), and Jud, Incorporated (Jud), are mutually exclusive applicants for new standard broadcast stations to be operated on the frequency 1500 kHz. Media proposes to operate with a power of 500 watts, daytime only, employing 250 watts power during critical hours, with different directional antenna patterns, at Youngstown, Ohio. Jud proposes to operate with 250 watts power, daytime only, with a directional antenna, at Ellwood City, Ohio. In an Initial Decision (FCC 72D-6), released January 28, 1972, the late Administrative Law Judge Charles J. Frederick recommended that the application of Jud be granted and that the Media application be denied. Resolving the Section 307(b) issue in favor of Jud on the basis of his erroneous reasoning that "the disposition of this proceeding must turn upon the preference which may be made under Section 307 (b) of the Communications Act", the Presiding Judge, in effect, held that despite the fact that he disqualified Jud under the Sections 1.65 and 1.514(a) issues in this proceeding, a grant should be made to Jud under Section 307 (b) of the Communications Act, "because it would bring the first truly competitive aural outlet to Ellwood City."1 1 As indicated in paras. 3-6, infra, we do not reach the Section 307 (b) issue here; however, in passing it is noted that the quoted portion of the Judge's rationale misstates the Commission's Section 307(b) allocation objectives. While competition is undoubtedly an ancillary benefit of these objectives, the prime Section 307 (b) questions are whether a grant of Jud's application would accord Ellwood City with a choice of locally originating aural programs, and whether Jud should, therefore, be preferred to Media which would provide another facility to Youngstown, a community which already has multiple local aural originating stations. Northwestern Ohio Broadcasting Co., 13 FCC 231, 3 RR 1945 (1948), aff'd sub nom., Sky Way Broadcasting Corp. v. FCC, 85 U.S. App. D.C. 425, 176 F.2d 951 (1949). (Per curiam.) 2. The proceeding is now before the Review Board on exceptions to the Initial Decision filed by each of the applicants and by the Broadcast Bureau. We have reviewed the Initial Decision in light of these exceptions, our examination of the record, and the oral argument presented before a panel of the Review Board on February 6, 1973. Our rulings on the exceptions of the parties are set forth in the Appendix annexed hereto. Briefly stated, we affirm the basic findings and ultimate findings and conclusions of the Initial Decision establishing that Media has met its burden of proof under its technical and qualifications issues. In this regard, we note that these findings and conclusions are uncontested by the parties. 3. At the outset, we emphasize that, in light of the exceptions of the parties, we are in major disagreement with the late Judge's ultimate findings and conclusions relating to Jud's application which involves three basic technical and qualifying issues, namely, (a) a Section 73.188 (b) (1) issue; (b) a Suburban issue; and (c) Sections 1.65 and 1.514(a) issues. First, as indicated above, the rationale of the Initial Decision which disqualified Jud on the Section 1.514(a) and 1.65 issues, but, nevertheless, grants the application under Section 307(b), cannot stand. For it has been long established Commission law, based upon statutory construction of the Communications Act, that an applicant is not entitled to consideration under Section 307 (b) of the Act unless and until all outstanding and prerequisite qualifying issues against it have been favorably resolved where, in accordance with Sections 308 and 309 (a) of the Communications Act, the Commission can find that the applicant has established its financial, technical and other qualifications to operate the station. Saul M. Miller, 1 FCC 2d 1388, 6 RR 2d 525 (1965); Du Page County Broadcasting, Inc., 19 FCC 2d 250, 17 RR 2d 229 (1969). We, accordingly, do not adopt the ultimate conclusion of the Initial Decision granting the Jud application. 4. Secondly, although we adopt the basic and ultimate findings of the Initial Decision which favorably resolve Jud's Section 73.188 (b) (1) issue, we affirm only the basic findings with respect to Jud's Sections 1.514(a) and 1.65 issues. In short, we agree with the Broadcast Bureau's position that Jud's admitted violations of Sections 1.514(a) and 1.65 do not warrant disqualification and a denial of its application. There is no record evidence of any intention by any of Jud's principals to withhold information, and the facts, particularly those relating to the evolution of the Commission's CATV reporting requirements, establish that the omissions have been unintentional. We, accordingly, do not adopt the adverse ultimate findings or conclusion of the Initial Decision on these issues. 5. However, of major importance is our disagreement with the late Judge, as well as the Broadcast Bureau, on their technique of concluding summarily, without prerequisite findings of fact, that Jud has met its burden of proof on the Suburban issue. In this connection, we note that Jud's presentation on this record is not uncontested as shown by Media's Proposed Findings and Conclusions, as well as by its exceptions to the Initial Decision. We also note the Broadcast Bureau's active participation in the hearing of this proceeding with respect to the Suburban issue, as well as the other qualifying issues, and the pro testations of Bureau counsel on this record concerning his difficulties in analyzing what the Judge has described as the "prodigious" 2 amount of data supplied by Jud. (Tr. 739; see, also, paras. 74-76 of the Initial Decision.) Nevertheless, the Bureau submitted no proposed findings with respect to this issue, and instead summarily concluded that Jud had met this issue. Finally, we note the Bureau's apparent acquiescence in the Judge's technique of incorporating by reference the entire record showing into the Initial Decision, in lieu of the prerequisite basic and ultimate findings of fact. However, in light of Media's exceptions, we cannot accept this approach of the Bureau or of the Judge because it is contrary to fundamental principles relating to essential elements of a valid decision prescribed (a) by 5 USC § 557 (c) (formerly Section 8 of the Administrative Procedure Act); (b) by Section 1.267 (b) of the Commission's Rules; (c) by a series of judicial decisions commencing with the landmark case of Saginaw Broadcasting Co. v. FCC. The Board has, accordingly, perforce undertaken its own analysis of the record, of Jud's Proposed Findings relating to the Suburban issue, and of Media's position contesting a favorable resolution of this issue. In view of the Judge's failure to make pertinent findings, there follows a detailed analysis of the record, and on the basis of our detailed findings and conclusions on the Suburban issue set forth below, the Board has reached the ultimate conclusion that Jud's application must be denied because a grant would be contrary to the public interest in light of Jud's failure to meet its burden of proof on the Suburban issue. 6. Since we have determined that independently of any consideration of the existence of Media's application, the application of Jud must be denied, it will not therefore be necessary to reach the Section 307(b) issue, and the findings and conclusions of the Initial Decision with respect to this issue are not adopted. See cases cited in para. 3, supra. Cf. Simmons v. FCC, 83 U.S. App. D.C. 262, 169 F.2d 670 (1948) cert. denied, 335 U.S. 846. Hence, the Suburban issue is the only viable issue requiring extended discussion. In detailing our findings and conclusion which follow, the Board has taken great care to make a comprehensive analysis of the record beyond that actually required; we do so in order to assist other reviewing authorities in examining our judgment with the closest of scrutiny vis-a-vis the Bureau's and the Judge's unsupported conclusions to the contrary. 2 According to Webster's New International Dictionary, Second Edition, this word is defined, as follows: Prodigious-adj. 1: of the nature of a prodigy or omen; portentous; 2: out of the course of nature; . . . monstrous; 3: extraordinary in bulk, extent, quantity, or degree; vast; huge; immense. Syn.-enormous, tremendous, amazing, astonishing, As shown by paras. 22-26, infra, relating to Jud's showing, we agree with the Judge's characterization of this record. 3 No exceptions were filed by the Bureau relating to this technique, although Media does challenge this methodology by specific exceptions. 68 App. D.C. 282, 96 F.2d 554 (1938); see also Tri-State Broadcasting Co. v. FCC, 68 App. D.C. 292, 294, 96 F.2d 564, 566 (1938); Telanserphone Inc. v, FCC, 97 U.S. App. D.C. 398, 401, 231 F.2d 732, 735 (1956) Greater Boston Television Corporation v. FCC, 143 U.S. App. D.C. 383, 444 F.2d 841 (1970). 41 F.C.C. 2d 5 BACKGROUND 7. Initially, it is to be noted that (a) the Commission's designation Order herein (FCC 69–1372, 20 FCC 2d 937), specifying the Suburban issue against Jud, Incorporated, was released on December 17, 1969; (b) six months prior thereto, on June 11, 1969, the Commission had released its decision in City of Camden, 18 FCC 2d 412, 16 RR 2d 555; and (c) two days after the designation Order herein, on December 19, 1969, the Commission released its proposed Primer on Ascertainment of Community Problems by Broadcast Applicants, 20 FCC 2d 880. Subsequently, on March 26, 1970, the Commission released its Interim Procedures relating to submission of community survey showings, 22 FCC 2d 421, 18 RR 2d 1923. In accordance with the Interim Procedures, the Judge, at a hearing session held in the instant proceeding on April 28, 1970, offered to postpone the Suburban issue phase of this hearing until such time as the Commission issued its final Primer. However, at pages 73-75 and 143 of the transcript, Jud's counsel stated that the applicant would assume the risks of proceeding to hearing on the Suburban issue at that time. Hence, at the hearing sessions on April 29, 1970 (Volume 3 of the transcript), and on May 14, 1970 (Volume 4 of the transcript), evidence was presented relating to the composition of Ellwood City and the area proposed to be served; it was not until the hearing session on June 15, 1971 (Volume 5 of the transcript)-and several months after the issuance of the final Primer (note 6, supra)-that Jud presented its Exhs. 12 and 13 as its evidentiary showing with respect to its community ascertainment and its proposed programming. 6 8. Before turning to Jud's evidentiary showing in this record, mention should also be made of (a) the composition of Jud; (b) pertinent facts relating to Jud's original application, per se, and its pre-designation programming proposals; (c) its post-designation amendments; and (d) background facts relating to Jud's Exhs. 2,7 12, and 13 which comprise its written testimony with respect to the Suburban issue. 9. Composition of Jud: These facts are detailed at paras. 25-27 of the findings of the Initial Decision, and therefore will be only briefly described here, Jud, Incorporated, is a family-owned company, with Jud Sedwick, its president and 99.6% stockholder, at its helm. Ned Sedwick and Ott Sedwick are vice president and treasurer, respectively, and each owns a 0.2% stock interest in the company. Jud, Ñed, and Ött Sedwick are brothers, and reside at Kittanning, Pennsylvania, which is approximately 40 miles from Ellwood City. Jay Sedwick is secretary of the company; he owns no stock interest. He is the son of Jud Sedwick, and resides at Butler, Pennsylvania. Jud, Incorporated, As shown by the Commission's designation Order, the Commission specified the Suburban issue because it could not determine on the basis of Jud's pre-designation information whether "those interviewed constitute a representative range of groups or organizations within the area to be served"; whether those interviewed by the applicant "listed community needs"; and whether "interviews were conducted in the communities outside Ellwood City which Jud proposes to serve". The final Primer was released on February 23, 1971, 27 FCC 2d 650, 21 RR 2d 1507. 7 Although Jud Exh. 2 was presented in the context of the Section 307(b) issue, its preparation by Ott Sedwick, treasurer of the company and a 0.2% stockholder, is relied upon by him to establish his knowledge of the "composition of the population of the Ellwood City area" in connection with his post-designation community ascertainment survey and the applicant's modified proposed program plans. (Emphasis supplied.) See Jud Exh. 12, p. 2, lines 12-14. 41 F.C.C. 2d |