## Facts

- Two mutually exclusive AM broadcast construction-permit applications sought the same frequency: Easton Publishing Co. (Easton, Pennsylvania) and Allentown Broadcasting Corp. (Allentown, Pennsylvania); simultaneous operation would cause destructive interference.
- The governing statute was § 307(b) of the Communications Act, requiring a “fair, efficient, and equitable distribution” of radio service among communities.
- After initial FCC hearings, the Commission granted Allentown’s application.
- On judicial review, the D.C. Circuit reversed and remanded for findings on the comparative needs of the two communities and the applicants’ relative ability to serve the greater need.
- On remand, a hearing examiner again recommended granting Allentown’s application.
- The FCC disagreed with the examiner and granted the permit to Easton, finding both applicants qualified and both communities similarly in need of the proposed programming, but treating as decisive that Allentown already had three local stations while Easton had one, emphasizing Easton’s need for additional local program choice.
- The D.C. Circuit again reversed, concluding the FCC’s rejection of the examiner and its equality-of-ability determination lacked substantial evidentiary support, and ordered further reevaluation.
- The Supreme Court granted certiorari to review the D.C. Circuit’s approach to § 307(b) comparisons and its review of the FCC’s fact-finding.

## Issues

1. Whether the FCC may decide between mutually exclusive applications for different communities based primarily on comparative community need without first finding the applicants approximately equal in ability to serve their respective communities.
2. Whether, under § 307(b), the FCC may determine first which community has the greater need for additional service and then assess which applicant can best serve that community’s need.
3. Whether awarding an additional local station to increase local competition and outlets for local self-expression falls within the FCC’s discretion under § 307(b).
4. Whether the FCC’s decision was supported by substantial evidence, including when the Commission overrules an examiner’s demeanor-based findings.
5. Whether a reviewing court may require a heightened “very substantial preponderance” to justify the FCC’s departure from an examiner’s demeanor-based findings.

## Decision

- The Supreme Court reversed the D.C. Circuit and remanded for reconsideration under the correct legal standards.
- The Court held the FCC may decide based on community need under § 307(b) without first finding the applicants approximately equal in service ability.
- The Court approved the FCC’s sequencing: determine the community with greater need, then select the applicant best able to serve that need.
- The Court held it is within the FCC’s discretion to allocate a second local license to secure local competition in locally originated programming and provide an additional outlet for local self-expression.
- The Court found the FCC’s decision supported by substantial evidence.
- The Court rejected any heightened requirement that overruling an examiner’s demeanor-based findings be supported by a “very substantial preponderance”; ordinary substantial-evidence review governs.

## Legal Principles

- Under Communications Act § 307(b), the FCC may resolve mutually exclusive applications for different communities by prioritizing comparative community need without an antecedent finding that applicants are approximately equal in ability.
- The FCC may structure its analysis by first identifying which community has the greater need for additional service and then selecting the applicant best suited to serve that need.
- The FCC’s judgment that additional local outlets may further local competition and local self-expression is a permissible basis for license distribution under § 307(b).
- Judicial review applies the substantial-evidence standard to FCC fact-finding; courts may not impose a heightened evidentiary burden merely because the Commission disagrees with a hearing examiner’s demeanor-based findings.

## Conclusion

The Court restored the FCC’s broad discretion under § 307(b) to allocate broadcast licenses based on comparative community need and affirmed that reviewing courts must apply ordinary substantial-evidence review, including when the agency departs from an examiner’s demeanor-based credibility assessments.


FCC v. Allentown Broad. Corp., 349 U.S. 358 (1955)