NAB reports (Mar-Dec 1933)

lates to the former and not to the latter. It is urged that this con¬ struction is fortified by the proviso in Section 9 as to temporary permits for zones.7 We think that this attempted distinction is without basis. The Congress was not seeking in either case “an exact mathematical division.” 8 It was recognized that this might be physically impossible. The equality sought was not a mere matter of geographical delimitation. The concern of the Congress was with the interests of the people — that they might have a rea¬ sonable equality of opportunity in radio transmission and reception, and this involved an equitable distribution not only as between zones but as between States as well. And to construe the authority conferred, in relation to the deletion of stations, as being applicable only to an apportionment between zones and net between States, would defeat the manifest purpose of the act. We conclude that the Commission, in making allocations of fre¬ quencies to States within a zone, has the power to license operation by a station in an under-quota State on a frequency theretofore assigned to a station in an over-quota State, provided the Commis¬ sion does not act arbitrarily or capriciously. (2) Respondents contend that the deletion of their stations was arbitrary in that they were giving good service, that they had not failed to comply with any of the regulations of the Commission, and that no proceeding had been instituted for the revocation of their licenses as provided in Section 14 of the act (47 U. S. C. 94). That section permits revocation of particular licenses by reason of false statements or for failure to operate as the license required or to observe any of the restrictions and conditions imposed by law or by the Commission’s regulations. There is, respondents say, no warrant in the act for a “forfeiture” such as that here at¬ tempted. But the question here is not with respect to revocation under Section 14, but as to the equitable adjustment of allocations demanded by Section 9. The question is not simply as to the service rendered by particular stations, independently considered, but as to relative facilities — the apportionment as between States. At the time of the proceeding in question respondents were operating under licenses running from September 1, 1931, to March 1, 1932, and which provided in terms that they were issued “on a temporary basis and subject to such action as the Commission may take after hearing on the application filed by station WJKS” for the frequency 560 kilocycles. Charged with the duty of making an equitable distribution as between States it was appropriate for the Commis¬ sion to issue temporary licenses with such a reservation in order to preserve its freedom to act in the light of its decision on that application. And when decision was reached there was nothing either in the provisions of Section 14 or otherwise in the act which precluded the Commission from terminating the licenses in accord¬ ance with the reservation stipulated. In granting licenses the Commission is required to act “as public convenience, interest, or necessity requires.” This criterion is not to be interpreted as setting up a standard so indefinite as to con¬ fer an unlimited power. (Compare N. Y. Central Securities Co. v. United States, 287 U. S. 12, 24.) The requirement is to be inter¬ preted by its context, by the nature of radio transmission and recep¬ tion, by the scope, character, and quality of services, and, where an equitable adjustment between States is in view, by the relative advantages in service which will be enjoyed by the public through the distribution of facilities. In making such an adjustment the equities of existing stations undoubtedly demand consideration. They are not to be the victims of official favoritism. But the weight of the evidence as to these equities and all other pertinent 7 See note 1 . 8 Report of the Committee on the Merchant Marine and Fisheries (H. Rept. 800, 70th Cong., 1st sess., p. 3). facts is for the determination of the Commission in exercising its authority to make a “fair and equitable allocation.” In the instant case the Commission was entitled to consider the advantages enjoyed by the people of Illinois under the assignments to that State, the services rendered by the respective stations, the reasonable demands of the people of Indiana, and the special re¬ quirements of radio service at Gary. The Commission’s findings show that all these matters were considered. Respondents say that there had been no material change in conditions since the general reallocation of 1928. But the Commission was not bound to maintain that allocation if it appeared that a fair and equitable distribution made a change necessary. Complaint is also made that the Commission did not adopt the recommendations of its ex¬ aminer. But the Commission had the responsibility of decision and was not only at liberty but was required to reach its own conclusions upon the evidence. We are of the opinion that the Commission’s findings of fact, which we summarized at the outset, support its decision, and an examination of the record leaves no room for doubt that these findings rest upon substantial evidence. (3) Respondents raise a further question with respect to the procedure adopted by the Commission. In January 1931 the Com¬ mission issued its General Order No. 102 8 relating to applications from underquota States. This order provided, among other things, that “applications from underquota States in zones which have already allocated to them their pro rata share of radio facilities should be for a facility already in use in that zone by an over¬ quota State,” and that, since the Commission had allocated fre¬ quencies for the different classes of stations, “applications should be for frequencies set aside by the Commission for the character of station applied for.” Respondents insist that these requirements foreclosed the exercise of discretion by the Commission by permit¬ ting the applicant to select the station and the facilities which it desired; that this “naked action of the applicant” precluded the Commission from “giving general consideration to the field” and from making that fair and equitable allocation which is the primary command of the statute. We think that this argument misconstrues General Order No. 102. That order is merly a rule of procedural convenience, requiring the applicant to frame a precise proposal and thus to present a definite issue. The order in no way derogates from the authority of the Commission. While it required the ap¬ plicant to state the facilities it desires, there was nothing to prevent respondents from contesting the applicant’s demand upon the ground that other facilities were available and should be granted in place of those which the applicant designated. If such a contention had been made, there would have been no difficulty in bringing before the Commission other stations whose interests might be drawn in question. There is no showing that the respondents were prejudiced by the operation of the order in question. Respondents complain that they were not heard in argument before the Commission. They were heard before the examiner, and the evidence they offered was considered by the Commission. The exceptions filed by the applicant to the examiner’s report were filed and served upon the respondents in August 1931, and the decision of the Commission was made in the following October. While the request of the applicant for oral argument was denied, it does not appear that any such request was made by respondents or that they sought any other hearing than that which was accorded. We find no ground for denying effect to the Commission’s action. The judgment of the court of appeals is reversed, and the cause is remanded with direction to affirm the decision of the Commission. It is so ordered. 8 Report, 1931, Federal Radio Commission, p. 91. Page 42