$//Anchor Bdcasting, Selbyville, Del. MM 87-504 FCC 94-336//$ $/500.3210 standing/$ ///newjob/// $///FCC 94-336,1/13/95///$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 FCC 94-336 In re Applications of ) MM Docket No. 87-504 ) ANCHOR BROADCASTING ) File No. BPH-860917MD LIMITED PARTNERSHIP ) ) GALAXY ) File No. BPH-860918NY COMMUNICATIONS, ) INC. ) ) SUSAN M. BECHTEL ) File No. BPH-860918OV ) For a Construction Permit ) for a new FM Station on ) Channel 250A in Selbyville, ) Delaware ) MEMORANDUM OPINION AND ORDER Adopted: December 22, 1994; Released: January 19, 1995 By the Commission: I. INTRODUCTION 1. This order denies a Joint Motion to Dismiss Application of Galaxy Communications, Inc. or to Grant Similar Relief, filed July 7, 1994, by Anchor Broadcasting Limited Partnership and Susan M. Bechtel. Anchor and Bechtel contend that the denial of Galaxy's application has become final and that Galaxy should therefore be dismissed as a party to this proceeding. II. BACKGROUND 2. In this proceeding, the Commission granted Anchor's application for a new FM radio station in Selbyville, Delaware, and denied the mutually exclusive applications of Galaxy, and Bechtel. Anchor Broadcasting Limited Partnership, 6 FCC Rcd 721 (1991). We preferred Anchor and Galaxy over Bechtel because, unlike Bechtel, they proposed to integrate their ownership into management. We preferred Anchor over Galaxy because Anchor's integration was enhanced by minority ownership and proposed local residence. We found these advantages more significant than Galaxy's very brief local residence and civic participation and Galaxy's slight preference for comparative coverage. 6 FCC Rcd at 724  16. 3. Both Galaxy and Bechtel appealed the denial of their applications to the United States Court of Appeals for the District of Columbia Circuit. On January 31, 1992, the court upheld the Commission's denial of Galaxy's application. It rejected Galaxy's argument that Anchor's integration proposal was unreliable and found that Galaxy's challenge to the constitutionality of Anchor's minority credit had not been timely raised. Bechtel v. FCC, 957 F.2d 873, 877-79 (D.C. Cir. 1992). However, the court remanded the proceeding to the Commission to further consider Bechtel's argument that integration should no longer be used as a comparative criterion. 957 F.2d at 879-82. 4. After further consideration on remand, the Commission, on July 21, 1992, issued an order providing further justification for the use of the integration criterion and reaffirming its grant to Anchor. Anchor Broadcasting Limited Partnership, 7 FCC Rcd 4566 (1992). 5. During the pendency of the remanded proceeding, Galaxy sought certiorari based on its challenge to Anchor's integration proposal and the constitutionality of Anchor's minority credit. The Supreme Court denied certiorari on October 5, 1992. Galaxy Communications, Inc. v. FCC, 113 S.Ct. 57 (1992). 6. Subsequently, on March 10, 1993, the Commission partially granted a petition for reconsideration filed by Galaxy before the denial of certiorari, modified its order on remand, and offered additional justification for the continued use of the integration criterion. Anchor Broadcasting Limited Partnership, 8 FCC Rcd 1674 (1993). In this regard, the Commission declined to summarily dismiss Galaxy's petition for reconsideration in response to arguments that, since certiorari had been denied, Galaxy was no longer a party to the proceeding. The Commission noted that the Court of Appeals had rejected Bechtel's motion to dismiss Galaxy as a party to Bechtel's pending appeal of the first order on remand. 8 FCC Rcd at 1675  7-9. See Bechtel v. FCC, No. 92-1378 (D.C.Cir. Feb. 19, 1993)(order). The Commission found it appropriate to defer to the court's ruling. 7. Bechtel and Galaxy appealed the Commission's reaffirmation of its grant to Anchor. On December 17, 1993, the court reversed and remanded the Commission's action. Bechtel v. FCC, 10 F.3d 875 (D.C. Cir. 1993). The court held that the integration criterion was arbitrary and capricious and therefore unlawful. In remanding the proceeding, the court declined to rule whether Galaxy's application was entitled to further consideration, leaving that question to the Commission "in the first instance." 10 F.3d at 887. 8. On February 25, 1994, the Commission held all pending comparative proceedings in abeyance while it considered what action would be appropriate in light of the court's invalidation of the integration criterion. Public Notice, 9 FCC Rcd 1055 (1994). During the freeze, the Commission has permitted the parties to negotiate and submit settlement agreements for approval. III. MOTION 9. Bechtel and Anchor assert that the Supreme Court's denial of certiorari exhausted Galaxy's appeals and that the denial of its application is now final. Movants argue that Galaxy's original appeal to the D.C. Circuit did not challenge the integration criterion, the basis on which the court remanded the proceeding, and that Galaxy did not attempt to raise this issue until after the court granted Bechtel's appeal. Thus, movants claim that Galaxy's case terminated with the final rejection by the Supreme Court of the issues that Galaxy did raise. Movants further claim that there is no basis to permit Galaxy to benefit from the consideration of issues that Galaxy did not raise in a timely manner. 10. Galaxy responds that, when the court granted Bechtel's original appeal, it remanded the consolidated proceeding, including Galaxy's application, for further consideration. Galaxy also observes that in opposing Galaxy's petition for certiorari, the government characterized the status of the case as "interlocutory" because the remand might result in grant to a "licensee other than Anchor in any case." Brief for the United States and the Federal Communications Commission, No. 91-1744 at 14. Galaxy contends that this reflects recognition that Galaxy's application was entitled to further consideration in the remanded proceeding. 11. Galaxy disputes the assertion that it did not question the integration criterion until after the court's first remand and contends that in challenging Anchor's integration proposal, it made arguments which the court's remand order "echoes." Opposition to Joint Motion to Dismiss at 6. Galaxy asserts that it has continued to actively participate in this proceeding after the original remand. 12. Anchor and Bechtel reply that Galaxy disagreed with the government's contention before the Supreme Court that Galaxy's petition for certiorari was interlocutory. In any event, they assert that the Supreme Court gave no indication that it found the matter interlocutory and had denied certiorari on that basis. Additionally, Anchor and Bechtel dispute that Galaxy challenged the integration criterion in a timely manner. III. DISCUSSION 13. Although we will deny the joint motion, we acknowledge that the arguments made by Bechtel and Anchor have considerable force. Galaxy clearly lost its appeal of the denial of its application and was unsuccessful in persuading the Supreme Court to review the adverse decision of the Court of Appeals. Ordinarily, the denial of Galaxy's application would become final in this situation. Moreover, viewed realistically, the grounds for Galaxy's appeal of the denial of its application were distinct from those of Bechtel. As we indicated in our prior order, Galaxy's chances for success appear to have depended crucially on either invalidating Anchor's specific integration proposal (while receiving credit for its own) or eliminating Anchor's decisive advantage for minority ownership. 8 FCC Rcd at 1675  9. However, Galaxy's arguments about Anchor's integration proposal have been rejected and, consistent with the mandate of Congress, we do not intend to reduce the weight due Anchor's minority ownership regardless of the fate of the integration criterion. See Reexamination of the Policy Statement on Comparative Broadcast Hearings, 7 FCC Rcd 2664, 2667  23 (1992). Thus, final denial of Galaxy's appeal by the courts appears to have undercut the viability of its application, and the elimination of integration per se does not appear to assist Galaxy. 14. We are troubled, however, by the seeming inconsistency between this analysis and the statement made to the Supreme Court that this case was "interlocutory," which could be read to mean that the government was representing to the Supreme Court that Galaxy would be entitled to participate in this remand proceeding. We also take note of the Court of Appeals' denial of Bechtel's earlier attempt to terminate Galaxy's participation in this proceeding. Accordingly, although the Court of Appeals left it to us "in the first instance" to rule on Galaxy's status, we decline to issue the order requested. IV. ORDER 15. ACCORDINGLY, IT IS ORDERED, That the Joint Motion to Dismiss Application of Galaxy Communications, Inc. or to Grant Other Similar Relief, filed July 7, 1994, by Anchor Broadcasting Limited Partnership and Susan M. Bechtel IS DENIED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary