of the shipments originated in New Jersey and were assertedly handled by a nonparty carrier which interlined with applicant in New York. The driver logs produced at the hearing, however, fail to indicate any interline movement or transportation to New York for those shipments originating in New Jersey. Applicant was investigated twice by a Commission district supervisor and was informed that it was operating beyond the scope of its authority. Applicant disagreed with the district supervisor's interpretation of its certificate and continued to transport a wide range of commodities. On August 14, 1973, applicant paid $1,500 in settlement of a claim by the Commission that it had unlawfully transported fiberboard and shell containers. The instant application was filed as a means of enabling applicant to clarify its authority. Eleven shippers support the application. All of them have used applicant's service, and found it satisfactory. Although shippers are aware of numerous other motor carriers holding authority to transport their traffic within the territory sought, they express a preference for applicant. Several of the shippers located in New Jersey stated they were unaware of the carrier which applicant asserted was originating New Jersey shipments.

Protestants are common carriers which, collectively, possess all the authority sought by applicant. They maintain convenient terminals and operate suitable equipment for the transportation of the shippers' traffic. Protestants contend that a grant of the proposed authority would have an adverse effect on their operations.

DISCUSSION AND CONCLUSIONS

Section 207 of the Interstate Commerce Act provides that a certificate of public convenience and necessity shall be issued to any qualified applicant if it is found that the applicant is fit, willing, and able properly to perform the proposed service and to conform to the act and the rules and regulations issued thereunder, and that the proposed service is or will be required by the present or future public convenience and necessity. We believe that applicant has failed both to make an affirmative showing of fitness and to

'Castello Packing Co.-Brooklyn, N.Y., Alden Leeds, Inc.-South Kearny, N.J., L. Rubenstein & Sons, Inc.-Jersey City, N.J., Red Development: Paints & Chemical Division and L. Gallco Corporation-Mt. Vernon, N.Y., Universal Equipment Co., Inc.,-New York, N.Y., Wiremade Products Corp.-Patchogue, N.Y., United Steel Container-North Brunswick, N.J., Childcraft Corporation-Bayonne, N.J., Garon Products, Inc.-Edison, N.J., Clifford W. Estes Company, Incorporated-Lyndhurst, N.J., and General Electric Co.-Newark, N.J.

demonstrate that the proposed service is required by the present or future public convenience and necessity, and, accordingly, the application will be denied.

Public need-In determining whether a proposed operation is required by the present or future public convenience and necessity, the Commission has always considered whether the new operation will serve a useful public purpose, responsive to a public demand or need, whether this purpose can be served as well by existing carriers, and whether the new operation will impair or endanger the operations of existing carriers contrary to the public interest, PanAmerican Bus Lines Operation, 1 M.C.C. 190, 203 (1936), Bestway Express, Inc., Ext.-New Orleans, 123 M.C.C. 441, 450 (1975). The question in substance, is whether the advantages to the public using the proposed service outweigh the disadvantages, real or potential, to existing services, All American Bus Lines, Inc., Common Carrier Application, 18 M.C.C. 755, 766-767 (1939).

The evidence in this proceeding reveals that the shipper support is not based upon any real perceptions of need but on a preference for the applicant's service. The 11 shippers supporting the application have failed to indicate any inadequacies in existing motor carrier service or any reasons why the protestants are not fully capable of meeting their transportation requirements. The Commission has long held that preference for the applicant will not suffice to warrant a grant of new authority where adequate, untried service is available from existing carriers. If the supporting evidence does not demonstrate any deficiencies in existing motor carrier service, it must at least indicate a need for a better service, a need for more competition, or a need for a different kind of service, Nashua Motor Express, Inc., v. United States, 230 F. Supp. 646 (1964). The record, however, is barren regarding any evidence of these factors. No advantages to the public would, therefore, accrue as a result of applicant's proposed operations.

However, the largely new competition generated by applicant could place a strain on the operations of existing carriers. Applicant's ability to handle the numerous kinds of commodities sought herein between New York, N.Y., and heavily industrialized areas of New York and New Jersey, on the one hand, and, on the other, points in the United States east of the Mississippi River could cause diversion of revenue from the protestants, many of which are small carriers that are only marginally profitable. This in turn might undermine the stability and economic health of these carriers and impair or destroy their ability to serve the public that has grown to

rely on them. We believe that these potential disadvantages far outweigh any benefit that the public might receive as a result of the proposed operations.

The Administrative Law Judge concluded that applicant's past operations were performed under a color of right which in part justified the issuance of a certificate authorizing continuation of those operations. Past operations performed under color of right can aid in establishing public convenience and necessity. Service Transfer, Inc., Contract Carrier Application, 117 M.C.C. 506, 513 (1972). However, in order to establish that such operations were performed under color of right, it is generally necessary to show that applicant's interpretation of its operating authority was reasonable; that it sought advice regarding the accuracy of its interpretation; and that it ceased operations when it was told that the operations were unlawful. See Byers Transp. Co., Inc., Ext.-Restriction Removal, 113 M.C.C. 50, 56 (1971). Applicant has failed to comply with any of these criteria.

Applicant's operations were based upon a strained interpretation of its certificated authority which is not supported by Commission precedent. Compare, Pre-Fab Transit Co., Ext.-International Falls, 112 M.C.C. 664, 676. Applicant asserts that the phrase "supplies to be used in connection with store displays" authorized it to transport any commodity to be displayed for sale, thus enabling it to transport virtually any commodity which would fall within the far broader description, "general commodities." Applicant's certificate, however, must be read as a whole, cf. A. C. E. Transp. Co., Interpretation of Certificate, 51 M.C.C. 155 (1949); Hallamore Motor Transp., Inc.-Control-Kennebec, 101 M.C.C. 101, 108 (1966); Eleveld Chicago Furniture Serv., Inc., Ext.-Furn., 119 M.C.C. 669, 674 (1974). Applicant failed to consider the initial language of the authority in question, "manikins and display figures, uncrated," to which the "supplies" portion of the authority was clearly intended to refer. Contrary to applicant's interpretation, the "supplies" referred to in applicant's certificate are those ancillary supplies needed for the sale or display of the manikins and display figures. Compare Hilt Truck Line, Truck Line, Inc.-Investigation of Operations, 117 M.C.C. 9, 13-15 (1972). There is also no evidence that applicant sought reliable advice as to the accuracy of its interpretation. Further, applicant continued its unlawful transportation even after several warnings by Commission personnel. Thus, we conclude that applicant's failure to ascertain

the correctness of its interpretation, its unreasonable interpretation of its operating authority, and its continued operations despite warnings to cease, effectively negate its contention that such operations were performed under color of right. Such operations will not, therefore, aid in supporting a grant of authority. King Van Lines, Inc., Investigation of Certificate, 84 M.C.C. 269, 275-276 (1961).

Racial factors.-The major underpinning of the Administrative Law Judge's decision to recommend authorization of the proposed service was the race of applicant's president and owner. We believe this was an erroneous consideration.

In his initial decision, the Administrative Law Judge criticized the Commission for allegedly failing to promote minority ownership in the trucking industry. He contended that because of past discrimination it was necessary to give favorable treatment to minority-owned applicants. To do otherwise, he argued, would perpetuate the status quo of limited minority participation. The Commission, he asserted, should consider the public interest as a whole rather than let each proceeding stand or fall solely on nonracial factors.

The recommendation of the Administrative Law Judge does not comport with recent Court decisions on this subject or with prior Commission decisions dealing with the question of what weight should be given to racial and ethnic factors in proceedings before this agency. The basic issue of whether an economic regulatory agency administering statutes couched in terms of "public interest" or "public convenience and necessity" is obligated to consider interests such as racial matters which, while unrelated to the subject of their regulation, bear upon the public welfare in general, was recently decided by the Supreme Court in N.A.A.C.P. v. Federal Power Commission, 44 U.S. Law Week 4659 (decided May 19, 1976). In interpreting the words "public interest" as used in the Power and Gas Acts, the Supreme Court concluded that "the use of the words 'public interest' in a regulatory statute is not a broad license to promote the general public welfare. Rather the words take meaning from the purposes of the regulatory legislation." Since the purpose of the Power and Gas Acts "was to encourage the orderly development of plentiful supplies of electricity and natural gas at reasonable prices," the Court concluded that the term "public

The Administrative Law Judge did not attribute this discrimination to any particular group or institution and did not argue that the Commission was guilty of any discrimination against minorities.

interest" in the context of their acts "is not a directive to the Commission to seek to eradicate discrimination, but rather is a change to promote the orderly production of plentiful supplies of electric energy and natural gas at just and reasonable rates."

The specific application of the concept to the "public convenience and necessity" standard administered by this agency in motor carrier licensing cases was subsequently decided by the United States Court of Appeals for the Sixth Circuit in O-J Transport Co. v. United States (No. 75-1671, 6th Cir., decided June 4, 1976), where the Court stated:

The task of enforcing the transportation policies of the nation is an enormous one. The skills of the Commission's staff are not those required to implement an affirmative action program designed to enlarge the opportunities of minority-owned and operated businesses. The public interest which Congress intended the Interstate Commerce Commission to promote and protect is one related to transportation, not the more general public interest in the sense of the general welfare. Congress has not chosen to require the Commission to consider minority ownership as a separate factor in determining public convenience and necessity and it is beyond our authority to impose such a requirement.

6

In light of these recent court decisions, we believe that our prior policy of considering racial and ethnic factors only when they relate to the nature of the transportation service proposed by an applicant, and the public's need for that service, is correct. See, e.g., grant of common or contract carrier passenger authority where the part of the public to use such service was an ethnic group requiring special services (usually knowledge of Spanish language) by the applicantBracero Transp. Co., Inc.-Migrant Workers, 78 M.C.C. 461 (1958), Illing Contract Carrier Application, 52 M.C.C. 79(1950); also, grant of contract carrier freight authority where the applicants could provide Italian language service to deal with shippers' ethnic group customers-Matura Trucking Corp. Contract Carrier Application, 68 M.C.C. 766 (1956). The subject was discussed at some length in Elegante Tours, Inc.-Broker Application, 113 M.C.C. 156, 159-160 (1971), and we believe that the criteria there enunciated continue to be valid.

In this connection, we again reject the contention of protestants that racial or ethnic factors can never be relevant to deciding an

"T.V. 9, Inc. v. Federal Communication Commission, 495 F. 2d. 929, 936-938 (D.C. Cir. 1973), cert. denied 419 U.S. 986 (1974), relied upon by the Administrative Law Judge is not to the contrary. That case, by its very terms, held "only that when minority ownership is likely to increase diversity of content [in television programming], especially of opinion and viewpoint, merit should be awarded." [at 938.] This is consistent with the policy followed by this Commission, discussed infra at pps.