Full opinion text
BAZELON, Chief Judge: The Federal Communications Commission, without a hearing, approved the assignment of the license of a radio station and the proposal of the new licensee to change the format of the station from classical to contemporary music. The narrow question presented by the parties is whether the Federal Communications Act required the Commission to hold a hearing. But our review must also consider the First Amendment consequences of government control of format change. I Radio station WEFM-FM has been operated in the Chicago area by the Zenith Radio Corporation since 1940. For the entire thirty-three year period the station has had a classical music format. In March, 1972, Zenith entered into an agreement to sell the station to GCC Communications of Chicago, Inc. and sought FCC approval for assignment of the license. GCC proposed to change the musical format of WEFM from classical to contemporary music, later defined to be “rock music.” The goal of GCC was to appeal to what it had determined to be the primary musical interests of the young adults in the Chicago area. In June, 1972, appellants, a group of Chicago area residents, filed a Petition to Deny with the FCC, opposing the transfer because of the proposed change in format and requesting a hearing. The FCC denied appellants’ request and granted the assignment of the license. II In recent years this Court and the FCC have begun to develop principles governing government control of format changes. This Court has held that the public has an interest in the diversity of entertainment formats. Consequently the Commission has had to consider format changes in its statutory determination that a proposed assignment of a license comports with “the public interest, convenience, and necessity.” Factual disputes surrounding the format change are material and if substantial become subject to the statutory requirement that a hearing be held. In this ease appellants contend that substantial factual disputes exist on two issues relating to the proposed format change — the diversity of available formats and Zenith’s alleged financial losses. As to diversity, appellants maintain that a substantial issue of fact exists as to whether the Chicago public demands and needs the continuation of classical music on WEFM as opposed to “yet another contemporary music station.” Appellants point to the numerous letters and petitions of protest which greeted the news that WEFM was about to abandon its classical format. They note that Chicago has numerous rock stations already, while the demise of WEFM will leave only one classical music station with the power to reach the entire Chicago area. Our previous opinions and the Commission’s actions indicate that the majority of format changes are left to the give and take of the market environment and the business judgment of the licensee. It is only when the format to be discontinued is apparently unique to the area served that a hearing on the public interest must be held. In such cases the public interest in diversity may outweigh the dangers of government intrusion into the content of programming. In this case is is undisputed that the entire area served by WEFM is served by another classical music station, WFMTFM. Thus we are unable to find a substantial issue of fact requiring a hearing on the diversity point. Appellants also contend that a substantial issue of fact exists concerning the losses Zenith alleges it sustained during its operation of WEFM. Even assuming that such an issue would require a hearing in the absence of a substantial diversity issue, we do not find that appellants have raised a substantial issue of fact here. The Commission had sufficient evidence to support its finding that WEFM had incurred substantial losses in the period after 1965, when the station was operated on a commercial basis and not as a research and development adjunct to the Zenith corporation. Ill The current approach of this Court and the Commission, that a hearing is required only when a format becomes unavailable, must be evaluated in light of the First Amendment. Whether the issue is the fairness doctrine, the nature of “licensee responsibility,” or, as here, the standards governing format change, any government effort to regulate the content of programming must be carefully scrutinized for possible interference with free expression. Important First, Amendment rights are at stake when music formats are regulated. Music and other forms of cultural expression are traditionally protected under the First Amendment. In addition to its artistic value, music, both classical and popular, can be an important mode of political and moral expression. There is even the possibility of repression when, for example, the lyrics of popular songs communicate controversial ideas. Danger lurks in government regulation of what music can be put on the airwaves. Such regulation, ostensibly in the name of diversity, may open the door to withholding approval of transfers if the new format is more controversial than the one to be abandoned. It is also true that complete reliance on the market may inhibit rather than promote the First Amendment goal of “the widest possible dissemination of information from diverse and antagonistic sources.” The broadcasting media may be subject to greater concentration of ownership and difficulty of access than the printed media. Thus more government regulation of broadcasting may enhance the variety of political and cultural viewpoints to be heard. These First Amendment considerations have implications for decisions as to when a hearing must be held in a format change case. On the one hand, hearings may open the door to increased government regulation with the concomitant possibility of abuse. Moreover, the prospect of lengthy and costly hearings may deter new licensees from changing their format even when that change is in the public interest. On the other hand, hearings could help develop standards under which a diversity of formats could be encouraged without undue government regulation. The “full light’’ of a public hearing is often the best insurance that important policies are developed for the benefit of the public, rather than the benefit of administrators and regulated industries. IY At present we simply do not know how to ideally resolve the conflict between diversity and freedom from regulation. Our awareness that conflicting values are at stake here is our best protection against falling into the abyss of dogmatism. We must remain open to new information and ideas. But at the present juncture and with the facts of this case, the current approach of minimizing regulation except when diversity is most seriously threatened appears to be reasonably in accord with the goals of the Federal Communications Act and the First Amendment. Accordingly, the decisions of the Commission are Affirmed. ROBB, Circuit Judge, concurs in Parts I and II and in the result. . Memorandum Opinion and Order, FCC 72-1129, adopted December 13, 1972 and released December 21, 1972, 38 FCC2d 838 (1972). Tbis order also dismissed a Complaint filed by appellants. Tbe Complaint bad requested that tbe FCC dedicate WEFM’s channel to a classical and related cultural music format for so long as the listening audience remained interested in such programming and a qualified person or group was willing to continue such a format. . See Citizens Committee to Preserve the Voice of the Arts in Atlanta v. FCC, 141 U.S.App.D.C. 109, 436 F.2d 263 (1970); Hartford Communications Committee v. FCC, 151 U.S.App.D.C. 354, 467 F.2d 408 (1972); Lakewood Broadcasting Service, Inc. v. FCC, 156 U.S.App.D.C. 9, 478 F.2d 919 (1973); The Citizens Committee to Keep Progressive Rock v. FCC, 156 U.S.App.D.C. 16, 478 F.2d 926 (1973). . The Citizens Committee to Keep Progressive Rock, at 16, 478 F.2d 926. . Lakewood Broadcasting Service, Inc., at 12 of 156 U.S.App.D.C. at 922 of 478 F.2d. . Id. . Appellants’ brief, at 38. . The Citizens Committee to Keep Progressive Rock, at 16 of 156 U.S.App.D.C., 478 F.2d 926. . Id. at 16, 478 F.2d 926. . A third classical music station, WNIB-FM, currently serves a smaller part of the Chicago area. GCC has agreed that if their license application is approved, they will relinquish the call letters WEFM to WNIB and give WNIB the WEFM classical music library as well as technical assistance designed to enable WNIB to increase its power. . The long history of WEFM’s service does not diminish the impact of WFMT’s similar programming. The length of time that a format has been on the air is usually relevant only when that format is unique. See Citizens Committee to Keep Progressive Rock, at 24, 478 F.2d at 934, note 22: Naturally the length of time that a specific format has been on the air is a factor to be considered in the ultimate public interest determination, for it “can have a direct bearing on the degree of attachment which the public has to the unique format. (Emphasis added). This approach to the diversity issue cannot be applied in a mechanistic fashion. Whether a format to be discontinued is unique can be a subtle question requiring that more than mere labels be examined. The fact, for example, that two stations are labelled “classical” does not automatically mean that they provide substantially similar programming. One of the stations might never play music composed in this century, while the other devotes considerable amounts of time to such music. In this case, however, it is apparent that WEFM and WFMT have substantially similar programming, both covering a broad range of classical music. Cf. Citizens Committee to Keep Progressive Rock, at 16, 478 F.2d 926, where this Court noted that “Top 40” stations cannot automatically be assumed to provide substantial amounts of “progressive rock” music. . Zenith was not, for example, able to obtain enough advertising to fill the two and one-half minutes per hour it allotted for ads. Joint Appendix at 73. Appellants’ contention concerning the adequacy of the notice of the application for voluntary transfer is also without merit. The Commission properly found that Zenith complied with the notice requirements of the Commission’s rules. The notice given was not constitutionally defective. Similarly, appellants’ contention that the Commission’s ex parte rules had an unconstitutional impact on the public discussion of the format change is without merit in the setting of this case. . See Brandywine-Main Line Radio, Inc. v. FCC, 153 U.S.App.D.C. 305, 473 F.2d 16 (1972) (Bazelon, C. J., dissenting). . See Yale Broadcasting Company v. FCC, On Motion for Rehearing En Banc, 155 U.S.App.D.C. 390, 478 F.2d 594 (statement of Bazelon, C. J.). . See, e. g., Jacobellis v. Ohio, 378 U.S. 184, 191, 84 S.Ct. 1676, 1680, 12 L.Ed.2d 793 (1964) (Brennan, J.) (“It follows that material dealing with sex in a manner that advocates ideas, ... or that has literary or scientific or artistic value or any other form of social importance, may not be branded as obscenity and denied the constitutional protection [of the First Amendment].”) (Emphasis added). See, also, Roth v. United States, 354 U.S. 476, 484, 77 S.Ct. 1304, 1308, 1 L.Ed.2d 1498 (1957). (“The importance of [freedom of the press] consists, besides the advancements of truth, science, morality, and arts in general, in its diffusion of liberal sentiments on the administration of Government . .”) (Emphasis added). Zechariali Chafee, Jr. set forth the historical argument that the First Amendment was designed to include the arts within its protection : No doubt, the Zenger trial and the controversy over Wilkes and Junius in England did associate the struggle for freedom of speech to some extent with popular discussion of political questions, but the struggle was also related to the abolition of the censorship of books of any sort. Milton’s Areopagitica advocated freedom of much else besides political tracts. The First Amendment brackets freedom of speech with freedom of the press . . . If “speech” is limited . . . so is “press.” Yet that is impossible in view of the address of the Continental Congress in 1774 to the people of Quebec, in which freedom of the press, in addition to its political values, is said to be important for “the advancement of truth, science, morality and arts in general.” . . . Moreover, the framers would hardly have relegated science, art, drama, and poetry to the obscure shelter of the Fifth Amendment, . . . inasmuch as “due process” meant mainly proper procedure until the middle of the nineteenth century. . . . Chafee, Book Review, 62 Harv.L.Rev. 891, 896 (1947). . See Yale Broadcasting Company v. FCC, On Motion for Rehearing En Banc, at 397 of 155 U.S.App.D.C., at 594 of 478 F.2d, note 23, and sources cited therein. See, also, Morison, Oxford History of the American People, 292, 472, 912, 913 (1965) for comments on the role of classical music in American culture. . See, generally, Yale Broadcasting Co., On Motion for Rehearing En Banc. . Associated Press v. United States, 326 U.S. 1, 20, 65 S.Ct. 1416, 1424, 89 L.Ed. 2013 (1945). . See Brandywine-Main Line Radio, Inc. (Bazelon, C. J., dissenting), at 319-320 of 153 U.S.App.D.C., 473 F.2d 16. . Id. . See, e. g., Memorandum Opinion and Order, FCC 73-329, adopted March 21, 1973 and released March 22, 1973, 40 FCC 223 (1973), additional views of Chairman Burch. . Environmental Defense Fund, Inc. v. Ruckelshaus, 142 U.S.App.D.C. 74, 439 F.2d 584, 594 (1971).
FAHY, Senior Circuit Judge (dissenting). The question now is limited to whether the assignment should have been approved without a hearing. A hearing is required to resolve factual disputes which are substantial and material. 47 U.S.C. § 309(e). There is no doubt that this provision applies when the Commission is to decide whether a format change such as here proposed would go into effect upon Commission approval of the assignment of the broadcasting license, a decision to be made under the standard of the public interest, convenience, and necessity. See, e. g., Lakewood Broadcasting Service v. F.C.C., 156 U.S.App.D.C. 9, 478 F.2d 919 (1973). In approving the application for the assignment the Commission relied materially and substantially upon alleged financial losses suffered by Zenith, the assignor. I agree with Commissioner Johnson in his dissenting opinion that the attribution of such losses to Zenith’s classical music format is a question which could not be answered without further investigation. The claim of losses was put in factual dispute by the Committee opposing the assignment, since Zenith continued to use the station to advertise its own manufactured products. Since the court now affirms, I do not attempt an analysis of the further contention of the Committee that a hearing was required under the reasoning of this court’s decision in the Atlanta case of Citizens Committee v. F.C.C., 141 U.S.App.D.C. 109, 436 F.2d 263 (1970), where the proposed abandonment of a classical music format was also involved. I add, however, that the limitation upon issues which require a hearing contained in the Keep Progressive Rock case does not seem to me to accord with the approach of our court in the Atlanta case. . The Citizens Committee to Keep Progressive Rock v. F. C. C., 156 U.S.App.D.C. 16, 478 F.2d 926 (1973).
ON REHEARING EN BANC Before BAZELON, Chief Judge, FAHY, Senior Circuit Judge, and WRIGHT, McGOWAN, TAMM, LEVEN-TIIAL, ROBINSON, MacKINNON, ROBB and WILKEY, Circuit Judges, sitting en bane. McGOWAN, Circuit Judge: This is a statutory review proceeding involving the Federal Communications Commission. It has been thought appropriate for en banc consideration because it presents important questions with respect to the utilization of the publicly-owned airwaves in such manner as to serve the divergent interests and tastes of the largest possible number of their owners. A Citizens Committee was organized to contest the assignment of the license of radio station WEFM (FM), Chicago, Illinois, by Zenith Radio Corporation to GCC Communications of Chicago, Inc. The FCC denied the Committee’s petition to deny the application to transfer the license or, alternatively, to conduct a hearing on certain questions. 38 FCC 2d 838; 40 FCC 2d 233 (on reconsideration). The case was originally heard and ciecided by a division of the court which affirmed the action of the Commission in authorizing the assignment of the license in issue without a hearing. Judge Fahy dissented from this disposition in an opinion which, after noting that (1) the statute (47 U.S.C. § 309(e)) requires hearings to resolve factual disputes which are substantial and material and (2) the Commission in approving the assignment had relied materially and substantially upon alleged financial losses suffered by the assignor, expressed agreement with the dissenting Commissioner that “the attribution of such financial losses to the assignor’s classical musical format was a question which could not be answered without further investigation,” especially since the assignee “continued to use the station to advertise its own manufactured products.” We find that the Committee has raised substantial and material questions necessitating a hearing before final disposition of the transfer application, and that the present record is inadequate to support the Commission’s purported public interest finding. The orders of the Commission are set aside, and the case remanded for further proceedings consistent herewith. I Since it was first licensed to Zenith in 1940, WEFM’s format has always been one of classical music. For twenty-five years Zenith operated the station on an entirely non-commercial basis, at the same time using the station as a developmental adjunct to, and laboratory for, its FM receiver manufacturing business. As such, WEFM has had a distinguished history, being the first Chicago station to broadcast in high-fidelity (1953), the pioneer in stereophonic broadcasting (1959), the source of experiments leading to the FCC’s national standards for multiplex (stereo) operations (1961), and the first station in its area to introduce the dual polarization antenna, which radiates both horizontal and vertical signals (1966). The increased costs that Zenith incurred with its 1966 expansion of WEFM’s studio and technical facilities caused the company for the first time “to seek advertising support” for its operations. Both the degree of Zenith’s commitment to commercial operation, and the relevance of commercial benefits realized by it over and above the advertising revenues received, remain the subject of dispute, but, according to the Commission, statements filed with it show that advertising income failed to cover costs in each succeeding year. In March, 1972, Zenith contracted to sell WEFM to GCC, a corporation organized for the purpose of the purchase, for $1,000,000. Thereafter Zenith and GCC applied to the FCC for assignment of the license of WEFM to GCC. In the application GCC proposed to “present a format of contemporary music approximately 70% of the time,” twenty-four hours a day. In this manner, it was said, “[t]he applicant will contribute to the overall diversity of program services in the Chicago area.” Notice of the proposed assignment was broadcast over WEFM once daily for four consecutive days and published four times in one of Chicago’s four daily newspapers. The notice identified the type of application filed, the parties (assignor and assignee) thereto, the officers and directors of each, and stated that the application was available for inspection at Zenith’s offices. No mention of the proposed format change was required, and none was made. 47 C.F.R. § 1.580 (d). In its petition filed with the FCC, the Committee related that the 7.5 million residents of the metropolitan area served by WEFM received classical music from no AM stations and, in the greater part of the service area, from only one other FM station, WFMT-FM. It alleged that the program formats of these stations varied somewhat, but did not claim that any part of the service area would be left entirely without a classical music station. The Committee asserted that it had received hundreds of letters in opposition to the sale, and that the FCC had received over 1,000 such letters. It detailed the financial relations between General Cinema Corporation and GCC, alleged that General Cinema had lost $1 million from its five other radio operations the prior year, and pointed out that there was “no indication that Zenith’s management claiming losses prior to its 1970 [license] renewal instituted measures designed to produce such profit by increasing its advertising time from 2Yz minutes per hour to 5 or 6 minutes,” presumably standard in the industry, nor took any other step indicating that its claimed losses, which were also doubted' by the Committee, occurred despite efforts to operate WEFM on a truly commercial basis. The Committee also pointed out that in its 1970 license renewal application, approved by the FCC in 1971 to run through 1973, Zenith had represented that continuation of WEFM’s classical music format was in the public interest and that it would be continued. On the basis of these and other allegations of fact, the Committee asserted that it had made out a case to deny the proposed assignment of WEFM’s license on public interest grounds, or at least raised “substantial and material question [s] of fact,” necessitating a hearing, 47 U.S.C. § 309(d), about the public interest in the proposed format change, Zenith’s claimed losses, and GCC’s qualifications as a licensee. It also challenged the constitutional adequacy of the public notice that the assignment was pending, and that a format change was contemplated. Zenith and GCC filed oppositions to the Committee’s petition. For its part, Zenith asserted facts intended to show the bona fides of its attempt to operate WEFM on a commercial basis and the amount of its losses, said to be almost $2 million over six years. GCC controverted the Committee’s assertion that it had already decided to abandon WEFM’s classical music format when it agreed to purchase the station, stating that “[i]t was only after the study of [community] needs [which the FCC requires of each license applicant] was completed and it was determined that the station would program for the young adults of the Chicago area that it was determined that a classical music format would not be consistent with programming directed to this age group.” It also asserted that Chicago-area classical music broadcasting would be of overall higher quality when only WFMT and a strengthened WNIB shared that market than it could be with three stations competing for the classical music audience, but no facts were alleged to buttress either the premise that present service is poor or the likelihood that it would be improved by WEFM’s format change. The Committee’s reply alleged that WNIB reached at most 15% of the area served by WEFM, further questioned Zenith’s claimed losses, although it alleged no specific facts to the contrary, and by a later amendment, challenged the validity of GCC’s community leaders survey. The Committee wrote to some fifty of the 116 representative community leaders GCC had personally interviewed in order to ascertain community needs, issues, and problems. The Committee asked each interviewee whether he or she had in fact been personally approached by GCC, had been informed of any plans to change the WEFM format to rock music, and whether they approved of that change. Twenty-four persons responded, and eighteen of these responses were submitted to the FCC. J.A. 141-158. Five said they had been told there would be a format change, but only one recalled being told that the new format would be rock music. Nine said they were not informed that any change was contemplated, and one recalled being told specifically that no change was contemplated. As it happens, all eighteen personally disapproved of the change, some quite vehemently, and one had already protested the matter in letters to Zenith and the FCC. While the application and petition to deny were pending before the FCC, the Committee on November 20, 1972, also filed a complaint requesting that WEFM be dedicated to classical music and cultural programming so long as any licensee willing to operate it for that purpose could be found. Zenith and GCC moved that the complaint be dismissed as a pleading not provided for in the FCC rules of practice. On December 21, 1972 the FCC issued a Memorandum Opinion denying the Committee all relief and granting the assignment application without a hearing. The FCC acknowledged that it had “received over 1,000 letters from Chicago area listeners protesting the proposed format change.” It stated however, that “[t]he Chicago metropolitan area is served by two additional classical music stations,” WEMT and WNIB, and that “[t]he issue here simply put is whether the assignee without a hearing can change the musical format of WEFM from classical music to a ‘contemporary music’ format where there are two other classical music stations serving Chicago and the station has been suffering continuous operating losses.” The Commission’s resolution of this issue, however, depended not on the claimed losses, but rather on its view of its own role in cases where the format to be abandoned is not unique. In these circumstances, the FCC opined, competition among broadcasters will produce the optimal distribution of formats. Citizens Committee to Preserve the Voice of the Arts in Atlanta (WGKA-FM) v. FCC, 141 U.S.App.D.C. 109, 436 F.2d 263 (1970) (hereinafter Citizens Committee of Atlanta), where this court had held that abandonment of a unique format was “material” in gauging the public interest and that “substantial” factual questions therefore had to be resolved in a public hearing before the assignment application could be approved as being in the public interest, was thus distinguished. In the FCC’s view, abandonment of a non-unique format is not a matter affected with the public interest but a business judgment within the licensee’s discretion. To hamper the licensee’s discretion in this area with the ominous threat of a hearing in a case like this would only serve to discourage licensees from choosing or experimenting with a format .... Accordingly, we find no basis to question the applicants [sic] discretion in the choice of format .... 38 FCC 2d at 846. Finding the Committee’s factual allegations concerning the assignee’s financial structure and its parent’s losses, and community leader opposition to a format change, to have been met adequately by the applicant’s responses, the FCC held that there were presented no material and substantial questions of fact on which to require a hearing. Commissioner Johnson in his dissenting opinion argued that Citizens Committee of Atlanta could not be confined to instances where a unique format is involved, since the assignee in that case had alleged that another classical music station did indeed serve much of Atlanta and yet this court held that a hearing was required to determine the actual availability of the asserted alternative. The touchstone of the public interest consideration in the prior case, he insisted, was the effect of the proposed change in lessening the diversity of radio service, not necessarily the total elimination of a particular format. He would thus have required a hearing on the degree, if any, to which the assignee’s proposed assistance would strengthen WNIB’s service, as well as on the causal relationship between Zenith’s losses and WEFM’s classical music format. In addition, he charged that the majority, by adhering to its doctrine of licensee discretion in format matters, was placing on the public the burden of establishing that the assignee’s format change is not in the public interest, and abdicating its responsibility to determine whether a proposed format change that would decrease the diversity of formats available to an area “can possibly serve the public interest.” In petitioning the FCC for reconsideration, the Committee principally argued that the Commission had failed to consider the public interest in retaining WEFM as a distinctive cultural facility, disregarded the fact that the limited service area of WNIB made it an inadequate substitute for WEFM, and resolved the dispute over Zenith’s losses by relying on confidential financial reports not in the record and not disclosed to the Committee. On March 22, 1973, the FCC denied reconsideration in an opinion that reiterated its view of the agency’s role in non-unique format cases, affirmed that two classical music stations would still remain after a change in WEFM’s format, and refused to question Zenith’s claimed losses since the Committee had alleged “no facts” casting doubt upon them. Appended to the Commission’s opinion on reconsideration was an opinion entitled “Additional Views of Chairman Burch In Which Commissioners Robert E. Lee, H. Rex Lee, Reid, Wiley, and Hook Join.” 40 FCC 2d at 230. Since Commissioners Reid and Wiley did not join in the opinion on reconsideration but only concurred in the result, these “Additional Views,” to which six of the seven FCC Commissioners adhere, take on peculiar significance. They differ from the opinion itself in being broader than the facts of the particular case, but at the same time explain the underlying analysis on which the FCC’s decision in this case was based. Indeed, they were offered because the Commissioners believed “that an explanation of the many policy considerations underlying our decision here is both appropriate and necessary.” According to the six Commissioners, the starting point for discerning the appropriate FCC policy on format choice is in striking the “balance between the preservation of a free competitive broadcast system, on the one hand, and the reasonable restriction of that freedom inherent in the public interest standard provided in the Communications Act, on the other,” quoting FCC v. Sanders Bros. Radio Station, 309 U.S. 470, 474, 60 S.Ct. 693, 84 L.Ed. 869 (1940). Thus: The Commission has struck this balance by requiring licensees to conduct formal surveys to ascertain the need for certain types of nonentertainment programming, while allowing licensees wide discretion in the area of entertainment programming. Thus with respect to the provision of news, public affairs, and other informational services to the community, we have required that broadcasters conduct thorough surveys designed to assure familiarity with community problems and then develop programming responsive to those identified needs.3 In 3 Primer on Ascertainment of Community Problems by Broadcast Applicants, 27 FCC 2d 650 (1971). contrast, we have generally left entertainment programming decisions to the licensee or applicant’s judgment and competitive marketplace forces. As the Commission stated in its Programming Policy Statement, 25 Fed.Reg. 7293 (1960), “[o]ur view has been that the station’s [entertainment] program format is a matter best left to the discretion of the licensee or applicants, since as a matter of public acceptance and of economic necessity he will tend to program to meet the preferences of his area and fill whatever void is left by the programming of other stations.” (Emphasis added.) In further support of this policy, the Commissioners expressed their view of the unwisdom of “locking” a broadcaster in to a particular format, lest it have “the effect of lessening the likelihood that [‘program formats appealing to minority tastes’] will be attempted in the first place.” II The Committee presses several grounds for reversal of the FCC in this court. Its principal arguments are that (1) the FCC failed to, and could not on this record, determine whether the assignment and format change would be in the public interest; (2) substantial and material questions of fact necessitate a hearing; and (3) the public notice of the impending assignment required by the FCC is insufficient on due process criteria. Before turning to these arguments seriatim, we explicate very briefly the statutory scheme to which they relate, as we have had so many occasions to do at greater length in the recent past, e. g., Stone v. FCC, 151 U.S.App.D.C. 145, 466 F.2d 316, 321-323 (1972). A. Analytic framework. Under the Communications Act, 47 U.S.C. § 309(a), the Commission must determine, with respect to each license application, whether the public interest, convenience, and necessity would be served by granting the application, and, if it determines that it would be, must grant the application. Subsection (d) (1) provides that any party in interest may petition the FCC to deny the application, and that such petition “shall contain specific allegations of fact sufficient to show . . . that a grant of the application would be prima facie inconsistent with [the public interest, convenience, and necessity].” 47 U.S.C. § 309(d)(1). Subsection (d)(2) provides as follows: (2) If the Commission finds on the basis of the application, the pleadings filed, or other matters which it may officially notice that there are no substantial and material questions of fact and that a grant of the application would be consistent with [the public interest, convenience, and necessity], it shall make the grant, deny the petition, and issue a concise statement of the reasons for denying the petition, which statement shall dispose of all substantial issues raised by the petition. If a substantial and material question of fact is presented or if the Commission for any reason is unable to find that grant of the application would be consistent with [the public interest, convenience, and necessity], it shall proceed as provided in subsection (e) of this section. (Emphasis added.) Subsection (e) governs the procedures for setting the application down for a hearing and notifying interested parties, and, in the case of issues presented by a petition to deny, authorizes the FCC to assign the burden of going forward and the burden of proof. It is clear from the face of the statute that there are two situations in which a hearing is required before the FCC is either empowered or obliged to grant an application. The first, and the only one with which this court has previously dealt, arises when substantial and material questions of fact are raised by the petition to deny. The second occurs when the Commission is “for any reason” unable, on the basis of the application, pleadings, and officially noticeable matters, to make the requisite finding that the public interest would be served. It would seem that this situation might obtain with respect to a particular application regardless of whether anyone has intervened to oppose the application, or indeed regardless of whether there are disputed fact issues as opposed to a simple need for more information. In any event, where, as here, there is a petitioner in opposition, there is certainly no barrier to its invoking both grounds in urging that a hearing is in order. In this case, the two asserted grounds for requiring a hearing are intimately related, as an examination of the prior' case law reveals. It is common ground among all hands, as it was between the majority and dissenting positions on the FCC, that the need for a hearing in this .case turns largely on the reach of our decision in Citizens Committee of Atlanta, supra, which is factually like the instant case to a startling degree. The Atlanta case also involved a proposed sale and abandonment of a classical music format. Public notice of the application produced an outcry against the format change, the FCC received a.large number of protestant letters, and a citizens committee arose to intervene before the FCC in opposition. The FCC approved the application without a hearing. It relied upon the applicant’s community leader survey to demonstrate informed support for the proposed change in format, determined from the applicant’s surveys that the proposed programming would be in the public interest, and “recited as a fact” that the transfer in ownership was a financial necessity. 436 F.2d at 266. In the proceedings on reconsideration, the Atlanta committee questioned the significance of the community leader survey and alleged that the applicant had misrepresented the views of interviewees. The applicant responded with affidavits from the community leaders vouching for the accuracy of the applicant’s summary of their views. Additionally, the applicant both proposed to air classical music for a portion of each evening in recognition of the expressed interest of the large number of protestants, and asserted that a station licensed to nearby Decatur, Georgia, “adequately served the daytime needs” of Atlantans. The FCC denied reconsideration, stating that “[T]he case here comes down to a choice of program formats — a choice which in the circumstances is one for the judgment of the licensee.” It took to be the fact that the Decatur station served “a large portion of the City of Atlanta.” As in this case, in Atlanta one Commissioner (Cox) was of the view that a hearing was required. WGKA had had a classical music format for ten years; it was the only classical music station of the twenty licensed to Atlanta; and 16% of the area audience, according to the applicant’s own survey, preferred that format. Commissioner Cox characterized the proposed sale and format change as an effort not to cut losses, which he disputed, but to maximize profits, and “did not see how the requisite public interest finding could be made short of the illumination afforded by a hearing.” This court reversed the FCC. We held that a format change involving abandonment of a unique format, protested by a significant sector of the community, is a matter material to the public interest and thus one on which a hearing must be held if there are substantial questions of fact. Accordingly, we remanded for a hearing to determine (1) the true financial situation of the assignor, (2) the actual views of the community leaders interviewed by the assignee, and (3) the degree to which the Decatur station provided Atlantans with classical music during the daytime. The theory underlying the court’s decision in Citizens Committee of Atlanta is that the FCC does have some responsibility, under its public interest mandate, for programming content. The Commission had forsworn any such role on the theory that, because it is not authorized to be a “national arbiter of taste,” it must rely entirely on the licensee’s discretion in matters of entertainment format. As we pointed out, however, the alternatives are not so stark. “The Commission is not dictating tastes when it seeks to discover what they presently are, and to consider what assignment of channels is feasible and fair in terms of their gratification.” 436 F.2d at 272 n. 7. In discharging its public interest obligation, the court thought it to be within the Congressional contemplation that the FCC would seek to assure that, within technical and economic constraints, as many as possible of the various formats preferred by. segments of the public would be provided. Thus, if 16% of the populace wanted access to classical music on radio, the public interest would, pro tanto, be served by its continued availability provided that the format is not economically unviable in the particular market. If a proposed format change would introduce a new format for a larger segment of the public that is not presently being served, it could not be denied by giving disproportionate weight to the preference of the audience for classical music, but that was not the situation in Atlanta. We repeat what we said in 1970 (486 F.2d at 269): The Commission’s point of departure seems to be that, if the programming contemplated by intervenor is shown to be favored by a significant number of the residents of Atlanta, then a determination to use that format is a judgment for the broadcaster to make, and not the Commission. Thus, so the argument proceeds, since only some 16% of the residents of Atlanta appear to prefer classical music, there can be no question that the public interest is served if the much larger number remaining are given what they say they like best. In a democracy like ours this might, of course, make perfect sense if there were only one radio channel available to Atlanta. Its rationality becomes less plain when it is remembered that there are some 20 such channels, all owned by the people as a whole, classics lovers and rock enthusiasts alike. The “public interest, convenience, and necessity” can be served in the one case in a way that it cannot be in the other, since it is surely in the public interest, as that was conceived of by a Congress representative of all the people, for all major aspects of contemporary culture to be accommodated by the commonly-owned public resources whenever that is technically and economically feasible. The Atlanta case was applied in two decisions of this court rendered immediately after the FCC’s decision to deny reconsideration in the instant case. Citizens Committee to Keep Progressive Rock v. FCC, 156 U.S.App.D.C. 16, 478 F.2d 926 (1973), involved a proposed license assignment and format change (from “progressive rock” to “middle of the road” music) on a station that had experimented unsuccessfully with two formats and switched to yet a third during the pendency of the assignment application. We adhered to our holding in Citizens Committee of Atlanta that “the public has an interest in diversity of entertainment formats and therefore that format changes can be detrimental to the public interest. Consequently, in compliance with its statutory mandate to approve only those assignment applications which it finds to serve the public interest, convenience, and necessity, . the Commission must consider format changes and their effect upon the desired diversity.” Id. at 928-929. Most format changes, we observed, do not diminish the diversity available, and “are thus left to the give and take of each market environment and the business judgment of the licensee.” In that case, however, the format proposed to be abandoned was allegedly unique and its loss would affect diversity, thereby implicating the public interest in the change. Even that would have been of no moment were it shown that the endangered format was not viable economically, but affidavits from some station employees indicated that, while the station had not yet 'made a profit with the recently adopted format, it was “rapidly achieving financial viability.” We clarified the “financial viability” constraint on the doctrine of the Atlanta case as follows (at p. 931): The question is not whether the licensee-is in such dire financial straits that an assignment should be granted, but whether the format is so economically unfeasible that an assignment encompassing a format change should be granted. (Emphases in original.) Once a proposed format change engenders “public grumbling [of] significant proportions,” the causal relationship between format and finance must be established, and if that requires the resolution of substantial factual questions, as it did in that case, then a hearing must be held. The result was different in Lakewood Broadcasting Service, Inc. v. FCC, 156 U.S.App.D.C. 9, 478 F.2d 919 (1973), decided the same day, because the FCC had properly found, in a “painstakingly thorough decision,” that no substantial factual questions existed. The assign- or’s financial losses due to the all-news format were undisputed, as was the availability of a substantial amount of news programming on other area stations. What was really being challenged, we found, was “not the authenticity or accuracy of the [community needs] surveys, composites, or economic reports, but rather the inferences which the Commission may draw therefrom.” Id. at 924. The question of the inferences and legal conclusions to be drawn from substantially undisputed facts, we held, is preeminently the province of the FCC and does not require the holding of an evidentiary hearing. Nothing in Citizens Committee of Atlanta was to be understood to impose upon the Commission a hearing requirement where there are no substantial questions material to the public interest determination. The teaching of these decisions may be briefly summarized. There is a public interest in a diversity of broadcast entertainment formats. The disappearance of a distinctive format may deprive a significant segment of the public of the benefits of radio, at least at their first-preference level. When faced with a proposed license assignment encompassing a format change, the FCC is obliged to determine whether the format to be lost is unique or otherwise serves a specialized audience that would feel its loss. If the endangered format is of this variety, then the FCC must affirmatively consider whether the public interest would be served by approving the proposed assignment, which may, if there are substantial questions of fact or inadequate data in the application or other officially noticeable materials, necessitate conducting a public hearing in order to resolve the factual issues or assist the Commission in discerning the public interest. Finally, it is not sufficient justification for approving the application that the assignor has asserted financial losses in providing the special format; those losses must be attributable to the format itself in order logically to support an assignment that occasions a loss of the format. B. The public interest issues. In its petition to deny, the Citizens Committee did not attempt to portray WEFM as significantly unique in format. Of the 61 stations serving the Chicago area, WEFM, WFMT, and WNIB, all FM stations, were identified as having a “classical music and related cultural program format,” with the qualification that “[s]ome variation, however, exists in the program [sic] of the three stations.” J.A. 55. The importance of WNIB as an alternative source of classical music was discounted with the allegation that it reaches “only a small part of the audience devoted to classical music,” and the letters of protest received by the FCC were said to reveal that “the great majority of WEFM’s audience believe that only one other classical music station (WFMT) is available.” In its original decision, the FCC stated flatly that, unlike the situation in Atlanta, “there are two other classical music stations in Chicago.” 38 FCC 2d at 845. On reconsideration the FCC responded to the Committee’s contention that WNIB’s limited service area made it an inadequate substitute for WEFM. On the basis of an attached contour map showing the service areas of all three stations, it found that WNIB, while it does not reach anything like as great an area as WEFM, does reach “all of the city of Chicago, its city of license.” In addition, WFMT was shown to reach all of WEFM’s service area, so that the withdrawal of WEFM from service to the classical music audience would not leave that segment of the public without access to classical music. Accordingly, the FCC concluded that “this is not a ‘format’ change case where there is no appropriate substitute for the service being lost.” 40 FCC 2d at 226. The FCC’s assertion that abandonment of WEFM’s classical music format will not leave its service area bereft of similar programming cannot be sustained on the record before us. 1. The relevant service area. We may assume that WNIB serves all of its city of license, Chicago, and, as the Commission stated, that “secondary agreements between WNIB and GCC provide for the enrichment of the programming fare offered by WNIB and substantial assistance is to be provided in increasing that station’s power.” Without further elaboration, however, it is impossible to say, and the FCC did not find, that WNIB will ultimately serve substantially the area now served by WEFM. Insofar as WNIB fails to reach the area served by WEFM, we think it is, pro tanto, not an available substitute for WEFM. The FCC’s reliance on WNIB as a substitute clearly reflected its view that the public interest in format change cases is defined by the metes and bounds of the city of license. In Stone v. FCC, supra, we found it unnecessary to decide finally whether a licensee “has a primary obligation to serve the needs and interests of its city of license,” 466 F.2d at 327 (emphasis added), as opposed to the full service area it reaches, because the FCC had properly determined that the television licensee in that renewal case had adequately served its city of license. But we did think it “clear that a broadcast licensee has an obligation to meet the needs and interests of its entire area of service. . . . Suburban and other outlying areas are not cities of license, although their needs and interests must be met by television stations licensed to central cities.” We now hold that the public interest implicated in a format change is the interest of the public in the service area, not just the city of license. No other view consists with our explication, here and in Citizens Committee of Atlanta, of the requirements of “the public interest, as that was conceived of by a Congress representative of all the people.” Id. 436 F.2d at 269. National Broadcasting Co. v. United States, 319 U.S. 190, 217, 63 S.Ct. 997, 87 L.Ed. 1344 (1943). In considering the availability vel non of an alternative source for a particular format, reliance on an alternative that reaches less than a substantial portion of the area served by the station to be assigned gives disproportionate weight to the interests of one portion of the public, and none at all to those of another. Unless the Commission has considered this effect, and reasonably determined that the overall public interest is, on balance, better served by this arrangement, we cannot say that it has discharged its obligation to assess and act in the public interest. 2. WFMT as an alternative source of classical music. Insofar as WNIB is not an available alternative to listeners presently served by WEFM, WFMT is the only remaining station on which the FCC could rely in support of its thesis that WEFM’s abandonment of classical music does not come within the unique format doctrine of Citizens Committee of Atlanta. There is, however, a problem with the FCC’s bald characterization of WFMT as a classical music station in this proceeding. A challenge to a proposed assignment of the license of WFMT came before this court in 1968. Joseph v. FCC, 131 U.S.App.D.C. 207, 404 F.2d 207. The issue posed in that case was the propriety of the Commission’s approval of the assignment, without a hearing and without an express public interest finding, from an independent broadcasting company to a corporate group that controlled several broadcast stations and newspapers. We remanded the case to the FCC for a determination of whether a grant of the assignment application would create an undue concentration of media control in contravention of the FCC’s regulations and the diversification policy on which they rested. In this court WFMT represented itself to be, and the court referred to it as, “an award-winning fine arts station,” id. at 208, and not as a classical music station. After the hearing on remand, the proposed assignee amended its portion of the assignment application to reflect its intention, if the FCC approved, to donate a 100% interest in WFMT to the Chicago Educational Television Association. The FCC approved the application as amended. In the course of doing so, it recited that “CETA has given assurances that it intends to cause WFMT to maintain the unique fine arts programming of the station for the benefit of the people of Chicago.” 21 FCC 2d 401, 403 (1970). Nowhere in the FCC’s opinion was WFMT described as a classical music station, and it was three times described in other terms. Against this background we think the Commission has an affirmative obligation to establish that WFMT is in fact a reasonable substitute for the service previously offered by WEFM before relying on the affirmative of that proposition to avoid the necessity of weighing the public interest in a change of WEFM’s format. WFMT’s format may have changed since the FCC received assurances that CETA would maintain it as a “fine arts” station, or the FCC’s definition of such a station may involve such substantial overlap with its definition of a “classical music” station that they are rough substitutes. But nothing in the present record gives any indication of whether this is so. It may be noteworthy, moreover, that while WNIB’s monthly program guide was made part of the record by the applicants in support of their contention that WNIB offers a service comparable to that of WEFM, neither WFMT’s program guide nor a summary thereof was submitted to buttress the same thesis with respect to that station. The substitutability of WFMT’s “fine arts” programming for WEFM’s classical music format may perhaps be capable of demonstration without the benefit of a hearing. The FCC retains a discretion commensurate with its expertise to make reasonable categorical determinations. If its exercise of that discretion requires information that can best be developed in a public hearing, see Citizens for Allegan County, Inc. v. FPC, 134 U.S.App.D.C. 229, 414 F.2d 1125, 1129 (1969), or if substantial questions concerning format similarity arise with the issue thus framed on remand, however, a hearing may well be necessary to resolve this issue. Since a hearing will be required in any event on the questions discussed in II. C, infra, we see no reason why its scope should be limited to exclude the question of WFMT s substitutability for WEFM. C. Questions of fact requiring a hearing. The FCC also held that the non-format questions raised by the Committee were not material and substantial, and thus that no hearing was required to resolve them. As to two such questions, we cannot agree. 1. Zenith’s alleged losses. Zenith claims to have incurred an operating loss of almost $2 million in the six years during which WEFM sold advertising time, and to have suffered a net after tax loss of approximately $1 million. The Committee disputed this claim by alleging that Zenith continued to advertise its own products on WEFM, and did not really attempt to sell enough other advertising to make WEFM self-supporting. Neither the FCC nor Zenith referred to any evidence, nor does the record reveal any, either controverting the Committee’s allegations or demonstrating that losses resulted despite the use of an accounting method that would give proper recognition to the institutional advertising and other promotional or developmental values derived by Zenith from WEFM. The Committee did not itself base its disputation of the losses on Zenith’s financial reports because, it says, the FCC considers such reports confidential and would not have given the Committee access to them had a request been made. In these circumstances, it is fundamentally unfair for the FCC to dismiss the Committee’s challenge to Zenith’s claim of losses because the Committee “neither alleged any facts which would cast doubt on the reliability of the losses claimed by Zenith in the operation of WEFM nor has it seriously questioned those figures.” It did seriously question those losses in two respects, and the FCC should have used its authority under Section 309(e) to set the matters down for hearing and to assign the burden of proof respecting such losses and Zenith’s claimed efforts to make WEFM self-sustaining after twenty-five years on non-commercial operation to the party with access to the relevant information, viz., Zenith. Until these questions are resolved, there is simply no basis from which the FCC can infer that WEFM’s classical music format is financially nonviable. See Progressive Rock, supra. 2. GCC’s community leader survey. In seeking reconsideration by the Commission, the Committee asserted that GCC had deliberately misled the FCC about its intentions to change WEFM’s format. GCC represented that it approached the question of format with an open mind and then, on the basis of its community needs survey, determined to direct its programming to young adults, the group it considered most in need of service. Having made that decision, it first set out to determine how best to reach that audience and discovered that a rock music format would be the best vehicle for doing so. Thus, it did not inform community leaders interviewed at the outset of this process that it would change WEFM’s format to rock music because it had not yet then determined whether to change the format at all. There is a fact introduced by the Committee that casts some doubt on the bona fides of GCC’s representation. The Committee, it will be recalled, inquired of and received answers from a number of the community leaders that GCC had surveyed about community needs and problems. Five of the twenty-four who answered the Committee’s inquiry stated that they had been told that there ivould, be a format change once GCC became the licensee of WEFM, and one recalled being told specifically that the new format would be rock music. This situation is covered by what we said in Citizens Committee of Atlanta (436 F.2d at 271) where it was urged that discrepancies of exactly this sort demonstrate actual misrepresentation on [the applicant’s] part which disqualifies it from being a licensee. We are not disposed, at least on this record, to attribute such a purpose to [the applicant] .... Confusion, conflict, misunderstanding, obscurity — all are inherent in a process in which the statements and opinions of one individual are sought to be determined from what two adversary parties say that he said or thinks. The truth is most likely to be refined and discovered in the crucible of an evidentiary hearing; and it is precisely a situation like the one revealed by this record which motivated Congress to stress the availability to the Commission of the hearing procedure. A hearing is equally in order on the question of misrepresentation in this case. Ill This court’s role as the sole forum for appeals from FCC licensing decisions impels us to add a further comment on the Commission’s approach to the public interest in matters of format, and what it termed the “ominous threat of a hearing.” As stated in Section I, supra, the six Commissioners who voted to deny reconsideration in this ease spoke directly, through Chairman Burch, to the “policy considerations underlying [their] decision.” Their analysis contains an apparent error, and failure to identify it will only result in a continuation of this series of similar cases that began with Citizens Committee of Atlanta four years ago. The crux of the Commissioners’ reason for believing that entertainment “program format is a matter best left to the discretion of the licensee or applicant” is that “as a matter of public acceptance and economic necessity he will tend to program to meet the preferences of his area and fill whatever void is left by the programming of other stations.” But this analysis is not applied uniformly by the FCC, which distinguishes entertainment fare from other services, such as news and public affairs coverage, as to which the FCC “require [s] that broadcasters conduct thorough surveys designed to assure familiarity with community problems and then develop programming responsive to those needs.” In this way, the FCC has attempted to strike a balance between free competition in broadcasting “and the reasonable restriction of that freedom inherent in the public interest standard.” FCC v. Sanders Brothers Radio Station, 309 U.S. 470, 474, 60 S.Ct. 693, 84 L.Ed. 869 (1940). Precisely why the balance sh