fully implemented in the motor carrier industry. Minority groups, willing and able to enter the motor carrier industry, have an almost impossible burden of proof-to establish that the service they offer is so unique that they present no competition to existing certified carriers or that there are an insufficient number of carriers currently operating in their area-in order to acquire a certificate of authority.

The following example shows how the ICC's procedures make the entry of minority applicants into the motor carrier industry very difficult:

In November 1965, Joe Jones, a black trucker in Atlanta, Ga., who had obtained a Small Business Administration loan of $25,000, was denied a motor carrier certificate of temporary authority because he could not show an "immediate and urgent need for his services."

Mr. Jones was a driver with many years of experience. He presented evidence to the ICC from two companies (Mayo Chemical and Sophie Mae Candy) to the effect that, if he was not granted a certificate, the companies would be forced to buy their own trucks. The ICC concluded, however, that this was not sufficient proof of the need for his service and that, therefore, his application did not meet the ICC's standard of "public convenience and necessity." 53

Although Mr. Jones proved that his services were needed, he was refused certification six times. Finally, after 2 years of personal effort and heavy pressure from the news media, the

-53

"ICC No. MC-127 543 TA, filed Sept. 2, 1965, and denied by the entire Commission, Nov. 22, 1965. Under 49 U.S.C. 310a (pt. II of the Interstate Act-Motor Carriers) temporary authority will be granted by the ICC when the applicant can prove "an immediate and urgent need" for his service and that there is no existing carrier service capable of meeting such need. Transportation service rendered under such temporary authority will be subject to all applicable provisions of the Act, and to the rules and regulations of the ICC. Such temporary authority will be valid for such a time as the ICC sees fit to specify, but for not more than 180 days. The section states that the granting of a temporary authority "shall create no presumption that corresponding permanent authority will be granted thereafter."

ICC approved Mr. Jones' application for a permanent certificate of authority.54

This example suggests that, unless the restrictive standards that bar entry to any possible threat to existing carriers are liberalized, minority group members will be unable to participate extensively in this important economic enterprise.55

The ICC justifies maintenance of its restrictive standards, which tend to exclude minority entrepreneurs, on the ground that minority business enterprises should be judged by the same standards by which other applicants are judged. Its rulings, however, tend only to preserve the status quo-to protect those already in the motor carrier business, almost all of whom are members of the majority groupagainst fair competition from minority truckers who seek only a chance to compete on equal terms.56 The agency's policies not only

"ICC No. MC-127681 (Sub. No. 1), Mar. 31, 1967.

55

The ICC's position was set forth in a letter from its Chairman, George M. Stafford, to Howard A. Glickstein, Staff Director, U.S. Commission on Civil Rights, July 23, 1970: "The Congressional purpose in enacting the Motor Carrier Act was to restrict entry by application of a common standard-public convenience and necessity" and not to "formulate a new policy favoring minority group applicants for authority." Such a policy would be contrary to the spirit and the legislative history of the act. All applicants, he stated, must be judged by the same standards. "Thus justification for any new grant of authority under the criteria of public convenience and necessity comprehends the submission of evidence that a new service is needed because existing carriers are unable to meet the reasonable transportation requirements of the public." To allow the ICC to grant certificates of authority by the mere fact that the applicant may offer services at a lower rate would create havoc to the national transportation system. Letter from George M. Stafford, supra note 41.

56 The letter from the Chairman, George M. Stafford, to the U.S. Commission on Civil Rights stated that the ICC "has consistently awarded authority to meet the needs of minority groups where the proof was adequate to justify the grant of authority." He cited seven cases to substantiate his statement:

“N.B.T.A. v. United States, 284 F. Supp. 270, aff'd. per curiam, 391 U.S. 408 (1967); Michigan Pickle Co., Common Carrier Application 77 M.C.C. 549 (1958); Illing Contract Carrier Application 52 M.C.C. 79 (1950); Bracero Transportation Co., Inc.,-Migrant Workers, 78 M.C.C. 549 (1958); Matura Trucking Corp. Contract Carrier Application, 68 M.C.C. 766 (1956); Martinez Common Carrier Application, 78 M.C.C. 25 (1958); and True Transport, Inc. MC 133565 (Sub. No. ITA), (1969).”

restrict opportunities for minority entrepreneurs, but also prevent the public from gaining the benefits of lower prices and more efficient service that ordinarily result from free competition.

Recently an ICC examiner took a step to encourage minority ownership of motor carriers. The Cheetah Charter Bus Service Co., Inc., a minority owned enterprise in New York City, filed an application for a charter.

The company's three black stockholders have had experience in the operation of bus lines. The stockholders were long-time residents of the Harlem area of New York City. Based on opinions from various persons requesting bus service in the Harlem area and from black and Spanish-speaking citizens (Puerto Ricans) in other parts of New York City, there was a need for additional charter bus service. Cheetah's main purpose will be to serve the black and Puerto Rican population of Harlem, South Bronx, and other areas of New York City with minority group concentrations. The recommended departure point is 110th Street (Harlem) and the destination points include four counties in New Jersey and range throughout 19 other States.

The company was found to be "fit, willing and able to properly perform (charter interstate bus) service".57 The examiner concluded

cases

A review of these cases showed that only in three were the nationality or race of the owners specified: (a) A Puerto Rican couple who obtained a certificate of authority to transport Puerto Rican migrant workers; (b) a temporary certificate of authority was granted to a black trucker from New Jersey; and (c) a certificate of authority granted to an Italian-owned company in upstate New York to transport spaghetti goods to New York and environs. Mr. Stafford's letter does not deal primarily with the question of minority ownership, as does this report, but rather with service to minorities. It is distressing to note that in the cited cases, dealing with service for minority group individuals, the service was in most instances, to transport migratory workers.

57 Cheetah Charter Bus Service Co., Inc., common carrier application with the Interstate Commerce Commission; examiner's opinion No. MC-13573 (Feb. 4, 1970). The original application was filed by Cheetah on March 19, 1969. Public hearings were held in New York City that fall. Thirty-seven witnesses appeared on behalf of Cheetah's application, and there was support from Congressmen and State legislators.

The examiner stated in his decision that: "A substantial number of the witnesses contend that authority

that the Cheetah Charter Bus Service could fill the gap which exists as a result of the insufficient charter bus equipment, now available to meet the needs of the Harlem community, particularly in the peak summer travel periods. 58

2. FEDERAL COMMUNICATIONS COMMISSION

59

Of the approximate 7,500 radio stations throughout the country, only 10 are owned by minorities. Of the more than 1,000 television stations, none is owned by minorities. The importance of this almost total absence of minorities from ownership of radio and television stations lies not only in the lost opportunities for minority entrepreneurship, but also in the significance of radio and television in shaping the Nation's attitudes toward problems of racial injustice. The National Advisory Commission on Civil Disorders, for example, reported that the communications media had "not communicated" to the majority of their audience which is majority group-a sense of the degradation, misery, and hopelessness of living in the ghetto.60 Greater representation in these important communications industries of people who are familiar with ghettos and barrios and who are sensitive to the feelings of hopelessness and frustration of those who live there could contribute significantly to greater understanding on the part of majority white Americans.61

should be granted the applicant because it is black controlled and if granted authority will be black operated and this is important to the black community because the development of black business is essential for the black people to entering the mainstream of the economy, that a black operated bus company could better understand and meet the needs of the black community, and that it would serve as an inspiration, particularly among the black youth." Id., at 28.

58 In ICC's decision and order No. MC-133573, May 4, 1970, Cheetah Charter Bus Service Co. was granted a certificate of permanent authority.

"All are owned by Negroes. Interview with Robert Cahill, Secretary to the Federal Communications Commission, Nov. 6, 1969.

Economics is by no means the sole reason for the lack of minority owned radio and television stations. Although the cost of purchasing an existing radio or television station can be high, and in the case of a television station, prohibitively high, most of the purchase price is not accounted for by the cost of the equipment but by the value of the license granted by the FCC. For example, the purchase price for an average existing television station can be as much as $3 million. The price of the television equipment, however, can vary from as little as $200,000 to $250,000. For a radio station, equipment cost is generally between $25,000 and $50,000, but the purchase price of an existing AM radio station is as much as $1 million.62

In short, it is the license that sells at a high price. If an applicant is awarded a license through a competitive proceeding, rather than through purchase, he gains it at no cost. And once the license is awarded, it would not be difficult to obtain the funds necessary to operate the station. For example, on the strength of the license, banks would be willing to lend money toward the purchase of necessary equipment. A recent ruling by the FCC, however, tends to block new competition for licenses in favor of preserving the status quo.

On January 15, 1970, the FCC issued a policy statement, declaring that it would not entertain license challenges against radio and television stations that "substantially" meet the programing needs of their communities.63 As in the case of the ICC, the FCC's ruling tends to preserve the status quo and continue the exclusion of minority groups from ownership of communications media outlets.

Prior to the policy statement, if a competitive application for a license was received at renewal time (3-year intervals) the FCC's apparent position was to award the license to the applicant that offered more challenging and

viewers." Letter from Ben F. Waple, Secretary, FCC to Howard A. Glickstein, Staff Director, U.S. Commission on Civil Rights, Aug. 5, 1970.

62 Interview with Nathan Epstein, industry economist in the Broadcast Bureau, FCC, May 19, 1970.

63 The basis of this ruling is that a broadcaster's past performance should be given more weight than the "promises" of challengers who seek to take over a license when it comes up for renewal.

deserving programing to the public. On January 23, 1969, for the first time in the FCC's history, the agency denied the renewal application of an existing television station (WHDHTV in Boston, Mass.) and granted the license to a competing applicant.65 Legislation was introduced shortly after the decision to prevent the FCC from taking such action in the future.66

“WHDH-TV (channel 5), vol. 16 FCC 2d, 1 (Jan. 22, 1969); see generally the 1965 Policy Statement on Comparative Broadcast Hearings, 1 FCC 2d, 393, 1965. The FCC has indicated that:

"Prior to the policy statement, as well as subsequent to its adoption, the Commission gave considerable weight to the past record of the existing licensee and did not deem the program proposals of the new applicant to be decisive. The FCC believes that its policy statement carries out the public interest in protecting only licensees, who are substantially serving their communities." Letter from Ben F. Waple, supra note 61.

" Id. FCC Commissioner Nicholas Johnson, in a concurring opinion, said the case opened the door ". . . to challenge media giants . . . at renewal time with hope of success. . . ." He further indicated that the WHDH decision gave incentive to applicants presenting competitive proposals, but that before the WHDH decision, people were inhibited by the belief that they did not have a chance of winning.

Thus, with the WHDH decision, the competitive market was opened. The decision served as a tool for both applicants and licensed stations to compete before the FCC as to who offers a more challenging and deserving program to the general public. It would stimulate ideas in an already dormant and mediocre field.

The bill, S.2004, introduced by Senator John O. Pastore (D. R.I.), provides that for the FCC to accept a competitive application, it would first have to deny the renewal to the existing licensee (something the FCC has never done with regard to a television station on the basis of its programing, in the absence of a competing application, during the FCC's 42-year history). This bill, which was passed by the House and is still pending in the Senate, has created heated arguments. The broadcasters claim that the uncertainty resulting from the WHDH-TV case would inhibit broadcasters from making long-term investments. Critics of the bill contend that the high profitability of major television stations and the comparatively low capital investments required will continue to make broadcasting financially attractive. See hearing on S.2004 before the Communications Subcommittee of the Committee on Commerce to Amend Communications Act of 1934, 91st Cong., 1st sess., ser. 18, pts. 1 and 2 (1969).

The strongest argument against the bill was stated by Representative Cellar (D. N.Y.). “The bill's passage would guarantee that mediocrity would be firmly entrenched; potentially superior service would be ruled out. The Commission may never know and would be

The FCC's policy statement of January 15, 1970, represented a compromise between the pending legislation and the WHDH decision.67 According to the statement, community groups are permitted to file challenge applications against any broadcaster at renewal proceedings. If, however, an established broadcaster demonstrates that his programing served the public interest "substantially"-which the FCC defines as "solidly" or "strongly"-the challenge will be dismissed without reference to other issues.

Although the full significance of the agency's policy statement cannot yet be determined, it appears that it will necessarily discourage competition 68 and tend to exclude minority participation in the ownership of broadcasting stations.69 FCC Commissioner Nicholas John

precluded from finding out whether a superior prospective licensee exists." 115 Cong. Rec. 5283-84 (June 25, 1969).

67 National Journal, vol. 2, No. 3, 123 (Jan. 17, 1970). Also see, Petitions by Best, CCC FCC 70-738, RM-1551, July 21, 1970 (Commissioner Johnson's dissenting opinion).

68 Voice of Los Angeles, Inc. petitioned the FCC to withdraw its competing application to acquire station KNBC-TV after the issuance of FCC's policy statement on January 15, 1970. Voice of Los Angeles, Inc. decided that the agency's new policy effected a substantive change in FCC's comparative renewal standards, tending to stifle the desires of minority groups to challenge incumbent licensees. The FCC, in an unusual decision, reimbursed Voice of Los Angeles, Inc. for costs incurred during the initial portions of its comparative challenge, essentially on the grounds that the policy statement came as a surprise to the challenger and that, given the change in policy, it would be inequitable not to permit it to withdraw. National Broadcasting Co., Inc. (KNBC), FCC 70-691 (Docket No. 18602) released July 7, 1970.

The Citizens Communications Center (CCC), a Washington, D.C. based organization devoted "to encouraging television and radio programing more responsive to the direct needs and interests of all segments of the broadcasting audience" has taken an active opposition to the Jan. 15, 1970 policy statement. The FCC, on Jan. 16, 1970, denied a petition from the CCC asking the FCC to enact the policy statement in rule form. By enacting it in rule form, the FCC would have been forced to ask the general public for comments approving or opposing the policy statement. The procedures governing the issuance of a policy statement do not require the FCC to ask for comments from the general public.

On Feb. 16, 1970, the CCC filed with the FCC a petition for reconsideration for repeal of the policy

son, dissenting from the policy statement, argued that "the American people have been deprived of substantial rights by our action today .. . . . A broadcaster whose performance is merely satisfactory, will be protected from competition against a still better challenger." 70

The FCC action has come at a time when minority groups are demonstrating an increasing interest in entering the broadcasting industry. In the last year, a number of interracial groups have filed applications to acquire television broadcasting licenses. In addition to the action of Voice of Los Angeles, Inc. in filing for the license of station KNBC-TV," Forum Inc., a group that includes several blacks, has filed an application to acquire the license of station WPIX-TV in New York. In Washington, D.C., a group that includes several blacks is attempting to acquire the license of WFAN, channel 14, and AM radio station WOOK."2 This indicates the growing desire of minority groups to become involved in the communications industry."

As the economic and educational levels of minority groups increase, they will have further potential possibilities and opportuni

statement and reconsideration of the order dismissing the petition for rulemaking. On July 21, 1970, the FCC rejected the petition for reconsideration (FCC 70-738, RM-1551). The FCC stated that "the policy statement was not a rule and did not have the force or effect of a rule; consequently . . . we must reject the contention that the adoption of the policy statement contravenes the rule making requirements of the Administrative Procedures Act."

Commissioner Nicholas Johnson in his dissenting opinion stated:

... the mere existence of the policy statement will deter groups that otherwise might have entered comparative contents. Between WHDH, Inc. and our policy statement, a number of applicants filed competing license challenges with the Commission. To my knowledge, not one TV application has been filed since Jan. 15, 1970-and one major applicant has even withdrawn on the basis of our policy statement. See National Broadcasting Co., Inc. (KNBC), FCC 70-691 (Docket No. 18602) (released July 7, 1970). In addition, our policy statement will doubtless be applied to future cases without exception."

7 Vol. 22 FCC 2d, 424, 430 (1970).

ties to compete for radio and television licenses, But unless the FCC modifies its procedures to facilitate minority group participation in ownership of radio and television stations, such opportunities will be largely lost.

A return to license awards on the basis of "competitive" proceedings could have an additional advantage to that of permitting entry into the broadcasting market by groups with new and innovative programing. "Competitive" proceedings can be an effective mechanism for bringing about greater racial and ethnic sensitivity in programing, nondiscriminatory employment practices, and other affirmative changes which otherwise might not take place." If the licensees are adequately serving the needs of the community, they should not fear challenge at license renewal time. It is precisely the threat of competitive applications which will stimulate broadcasting stations to be more responsive to the community.75

Currently, each broadcasting station must present to the renewal division of the Broadcast Bureau, 3 months prior to license expiration, a copy of a survey which will demonstrate how the licensee has ascertained the needs and interests of the community. The division's staff is charged with assuring that the applicants for licenses or license renewals demonstrate that their programing serves the needs and interests of the community. With a staff of three broadcast analysts evaluating from 300 to 400 renewal applications every 2 months,76

it is unlikely that the regulations are being fully enforced."

This represents a serious flaw in the FCC's operations. If the renewal process is not adequately enforced and challenges are discouraged, little incentive appears to exist for selfimprovement.

IV. DISCRIMINATION IN SERVICES AND FACILITIES BY REGULATED INDUSTRIES

Discrimination in services or facilities by the industries they regulate should be another civil rights issue of concern to the regulatory agencies. For example, railroads or bus companies, licensed by the ICC, may practice discrimination against passengers. By the same token, air or water carriers, licensed by the CAB or FMC, respectively, also may practice discrimination in their services. In addition, recreational facilities, which frequently are provided at hydroelectric projects licensed by the FPC, may exclude persons in a discriminatory manner or may provide access only on a racially segregated basis.

This section will be concerned with the ex

the Director of the Renewal Division of the Broadcast Bureau, FCC, Nov. 5, 1969.

"The FCC stated in a recent letter to this Commission that every renewal application is carefully reviewed by the FCC's Broadcast Bureau. As an example, the letter mentioned that "in the past license period involving 604 renewal applications of stations in Kentucky, Indiana, and Tennessee, the renewal staff wrote 216 letters of inquiry checking on matters contained in the applications." Letter from Ben F. Waple, supra note 61. However, see for example the following cases where the FCC renewed the license applications of various television and radio stations even though they were apparently violating the Communications Act of 1934:

"Accomack-North Hampton Broadcasting Co., Inc., 8 FCC 2d 357 (1967); Herman C. Hall, 11 FCC 2d 344 (1968); Lamar Life Broadcasting [WLBT], 38 FCC 1143 (1965); 14 FCC 2d 431, 442, 484 (1968); In the matter of liability of WKRZ, Inc., FCC, 69–1273, FCC69-1274 (Nov. 19, 1969); In the matter of liability of Olivia T. Rennekamp, FCC 69-1275 (Nov. 19, 1969); Star Stations of Indiana, Inc. [WIFE], 19 FCC 2d 991 (1969); and Letter to WKKO, Inc., FCC 70–739, July 8, 1970."

As stated earlier in the chapter (supra note 66), the FCC in its 42-year history has failed to deny a renewal application of a television station on the basis of its programing.