dissenting:
Disqualification is the maximum weapon in the Federal Communications Commission’s licensing arsenal. It has been used in those egregious cases where the character of an applicant was drawn into substantial question. Since it essentially bars an applicant, and perhaps its principals, from ever obtaining a license, disqualification has been based on serious misconduct of the applicant: fraud, concealment, or serious derogation of accepted business behavior are the kinds of misdeeds described by the Commission as warranting this sanction. See Gross Broadcasting Co., 41 F.C.C.2d 729, 731 (1973). Compare Sea Island Broadcasting Corp. v. FCC, 627 F.2d 240 (D.C. Cir. 1980) (“clear and convincing” standard of proof held to govern in an analogous proceeding). Because the misconduct established by this record is not worthy of such description, I believe that the disqualification sanction was arbitrarily imposed.
The applicant (WADECO) sought to join the contest for a television license held by Belo Broadcasting Corporation when that *130license came up for renewal. Belo was an established communications power in Texas and qualifying for that contest became a considerable task. The central difficulty for WADECO was in obtaining a financial commitment acceptable to the Commission. As the majority opinion points out, WADE-CO had and lost a loan commitment from a local financial institution. After WADECO lost the local commitment, it commenced negotiations for financing from Castle Trust Company, Ltd. (Castle), a Bahamian institution. Those efforts led to the trouble.
One of the key pieces of evidence upon which the Commission based its disqualification of WADECO was the commitment letter from Castle. The majority’s opinion characterizes the evidence as showing that WADECO “skirted” the Commission’s concerns about the letter and was “seriously lacking in candor.” I do not believe that such descriptions are the necessary prerequisites of fraud and deception. In particular, I cannot find substantial evidence in the record to support the Commission’s finding of misrepresentation on the part of WADE-CO. Not atypically, the bank sought to give itself as many options and openings as possible in its commitment letter. The Commission naturally sought to have the applicant present an unequivocal commitment. The negotiations between WADE-CO’s counsel and Castle were equally typical. Their letters back and forth evince some traditional negotiations between a borrower and a lender. It was hardly the stuff of which fraud or concealment is formed.
Castle’s letter of November 8, 1971 used the phrase “participating institutions” in describing its commitment. Upon hearing of the Commission’s dissatisfaction with the letter, WADECO’s counsel logically sought to negotiate solutions to the problems. Thus, he wrote Castle:
[T]he reference to participating institutions, in the next to the last line of the commitment letter, has given rise to the inquiry from the Commission as to whether or not the loan contemplated would be syndicated among the Castle Trust and one or more other banks. If this be true it will be necessary to name such other banks and to likewise demonstrate their respective abilities to contribute their share of the loan.
To this, Castle’s attorney, Helliwell, replied:
I can say with assurance that Castle would not make a loan of this size entirely for its own account. Therefore, if, as and when the loan was required, Castle would (a) participate it in part to other banks, or (b) participate it in part to various settlements [i.e., trust funds] which Castle administers, ... or (c) to a combination of both. However, at this early point of time, Castle regards it as undesirable to identify the financial institutions to which it would participate, and the specific amount each would take, and under no circumstances will it now or in the future identify settlements which would be involved. Castle simply takes the position that it is well able to produce the financing when needed, subject, of course, to reasonable and proper terms and conditions which would be specified in its commitment letter.
Apprised of Castle’s refusal to identify potential participating institutions “at this early point of time” and of the distinct possibility that Castle would not include other banks in the loan arrangement (using trust funds administered by Castle instead), WADECO’s counsel proposed that Castle eliminate the reference to other participating institutions from the letter. Castle agreed to the deletion.
At this point, no one — not even Castle— knew whether other institutions would be used in granting a loan to WADECO. I cannot say, as the Commission concluded, that WADECO “falsely and deliberately indicated that Castle Trust would be the sole source of financing, whereas Castle Trust was actually to be but one of several potential participants.” Belo Broadcasting Corp., 68 F.C.C.2d 1479, 1490 (1978). Castle may very well have ended up as the only institution involved, given the trust fund option expressed in Helliwell’s letter.
*131Surely the Commission does not suggest that there are not subsequent participations in loan commitments made to Commission licensees. This would be a different case if known participants had not been disclosed to the Commission, or if the commitment letter had not been amended when such other participants became known. That the letter did not clearly acknowledge the possibility of future participants is not fraud.
There is a second piece of conduct on which the Commission and the majority rely to justify WADECO’s disqualification. That conduct stems from the withdrawal of two of WADECO’s stockholders. The Commission was promptly notified of the withdrawals but was not similarly notified that these two former stockholders had also withdrawn as guarantors under the proposed loan commitment. The Commission found not only that WADECO by this conduct was guilty of violating Commission rules but also that this constituted an additional deception regarding the commitment letter. WADECO’s counsel argued in vain that there was no deception since he had presumed that the Commission would know that the withdrawal of the stockholders included their withdrawal as guarantors. Such a consequence is a reasonable expectation in the business world. It is sophomoric for the Commission to characterize the failure to notify the Commission as “a deliberate action designed to mislead the Commission.” Belo Broadcasting, supra, 68 F.C. C.2d at 1490. There is not a smattering of proof to buttress such a conclusion.
Throughout this proceeding, WADECO relied on reputable Washington communications counsel to represent its interests. Many of the decisions that led to the Commission’s action were made by counsel without WADECO’s participation or even knowledge. The principal stockholder of WADECO, James Wade, had no prior experience in dealing with the Commission. His actions and reactions to the proceedings indicate an understandable ambivalence.
On the one hand, he had personal doubts as to the adequacy of the Castle letter. Thus, he immediately wrote Washington counsel after the October 12, 1972 filing, reiterating his personal judgment that the Castle letter was not a valid commitment and that WADECO should discontinue depending on it. Over the next six months he requested several times that counsel withdraw the Castle letter. In May of 1973, when the Commission designated the WA-DECO application for hearing, specifying the availability of funds from Castle as a particular issue, Wade again wrote his counsel:
Paragraph # 3 [of the Commission’s Designation Order] refers to the Castle Trust letter which has been null and void for over a year and which I have asked you to withdraw on more than one occasion. Will you please correct this item.
On the other hand, Wade, being inexperienced in Commission matters, relied on the legal expertise of the Washington law firm WADECO had hired to handle its application, a law firm experienced in this area of law. Thus, when WADECO’s counsel prepared the June 14, 1973 filing, which repeated the arguments presented in the October 12, 1972 filing, Wade deferred to the lawyer’s professional judgment. As Wade testified at the initial hearing:
Q Did you tell him it was all right to go ahead and do it [file the June 14, 1973 Petition to Delete Issues]?
A If in his judgment it was the proper thing to do, I told him to go ahead and do it.
Q Now, Mr. Wade, despite your judgment as President of the company that this letter was null and void and not valid, if your lawyer felt like filing it with the Commission and representing to the Commission that it was valid, you had no objection to his doing that?
A I said to you, I don’t know anything about law, especially about FCC law or how Washington lawyers operate and I left this up to them to do what they thought was proper. In their judgment. Q Did their judgment and yours differ on this point?
A It obviously did, because I wrote them a letter.
*132Q And you were willing to accept different judgment that a null and void letter represented to the Commission [w]as a valid commitment. Is that correct?
A They were my lawyers. Until I fire them, I am going to do what they think is the best thing in their judgment.
Q And that’s the way you think the obligation to make representation to the Commission should be adequately discharged, is that correct?
A Upon my proper, competent legal advice.
Q Now, did you believe that this was competent legal advice at this point? A It was becoming questionable in my mind, but at that time, I relied on it.
(J.A. 228-29) Perhaps it was naive for Wade to continue to rely on his Washington counsel for this period of time, but this is no basis for disqualification. That sanction might have been justified if Wade were intentionally participating in misrepresenting the soundness of the Castle letter to the Commission, but the evidence does not support the Commission’s inference that this was so.
Shortly after the June 14th filing, a petition was filed with the Commission which sought to withdraw WADECO’s reliance on the Castle letter. Following a board of directors meeting in August 1973, WADE-CO began the process of acquiring new counsel.
I think the record reflects Wade’s ambivalent and confused state of mind. It shows that he did not know what to do from the spring of 1972 to June of 1973, not that he was deliberately misleading the Commission during this time. It was his uncertainty that kept him from exercising “greater firmness” in ordering his counsel to withdraw the Castle letter. In short, the evidence does not adequately support the Commission’s findings that WADECO misrepresented or intentionally concealed information. The record is replete with uncertainty, confusion, some dubious practices and a few mistakes, but fraud or its equivalent is not to be found.
Our review of the Commission’s decision goes beyond the task of determining whether there was substantial evidence in the record to support its findings. We are obliged to consider, as well, whether the Commission’s action was arbitrary in light of the ephemeral nature of the evidence on which it is based, the vicarious nature of WADECO’s liability,1 the severity of the sanction imposed, and past rulings of the Commission in similar circumstances. As with all agencies, the Commission cannot inexplicably act in an inconsistent fashion “giving credence to the charge that similar supplicants receive dissimilar dispensations.” FTC v. Crowther, 430 F.2d 510, 514 (D.C. Cir. 1970); accord, Greyhound Corp. v. ICC, 551 F.2d 414, 416 (D.C. Cir. 1977); Columbia Broadcasting System, Inc. v. FCC, 454 F.2d 1018, 1027 (D.C. Cir. 1971).
In WEBR, Inc. v. FCC, 420 F.2d 158 (D.C.Cir. 1969), this court said, “It is not in the public interest for the Commission to attempt to put legal tags on a party’s actions and impute dishonesty merely on legal fictions.” Id. at 167. The court upheld the Commission’s determination that the applicant should not be disqualified because of good faith reliance on the advice of counsel. The Commission gave similar respect to a licensee’s reliance on counsel in Asheboro Broadcasting Co., 20 F.C.C.2d 1 (1969). In Lorain Broadcasting Co., 18 F.C.C.2d 686 (1969), cited by the majority, the Commission said that an applicant’s failure to report a significant matter, in violation of section 1.65 of the Commission’s rules, could not be excused by relying on communications counsel. But despite this strong statement, the Commission did not disqualify the miscreant in Lorain. Moreover, as the ma*133jority here concedes, the violation of section 1.65 in this case was technical and, standing alone, unlikely to warrant disqualification. See note 2 ante. I think it is beyond the discretion of the Commission to allow advice of counsel as a mitigating circumstance sometimes and not at other times, especially when the facts are as patently similar as they are here.
There is no doubt that the Commission could have evaluated the character issue in the measured forum of a comparative hearing.2 Demerits could have been assessed against WADECO for whatever it did wrong or did not do right. This is what the Commission has done before. Vogel-Ellington Corp., 41 F.C.C.2d 1005 (Rev.Bd.1973); Gross Broadcasting Co., supra; Kittyhawk Broadcasting Co., 17 F.C.C.2d 729 (1973).
To apply the blunderbuss of disqualification in this case is to do violence to the precedents of both the Commission and this court. Because it can permanently bar the applicant and its principals from a communications license, because it tars people with a moral taint, the sanction of disqualification in this case is excessive to the purpose served. Worse yet, it may send out a false signal to those who might have the temerity to challenge a well-ensconced licensee at renewal time. Such a result is certainly not in the public interest which the Commission is charged to pursue.
I respectfully dissent.
. The Commission concluded that Wade’s “failure to correct known discrepancies was in effect a ratification of the representations made by counsel which can only be viewed as demonstrating Wade’s own participation in a strategem [sic] designed to mislead the Commission.” Belo Broadcasting Corp., 68 F.C.C.2d 1479, 1487 (1978). The record does not support this conclusion. See pp. 131-132 supra. To say that there were “known discrepancies” begs the question of Wade’s reliance on experienced counsel's professional judgment.
. It is ironic that the Commission did not afford WADECO the opportunity to participate in a comparative hearing under the circumstances. Following the complications with the Castle loan commitment, WADECO arranged for a different funding source and was found to be financially qualified by the administrative law judge in his initial decision. See Belo Broadcasting Corp., 70 F.C.C.2d 1380, 1436 (1976). Yet the Commission subsequently declared in its decision:
Under all the circumstances in this proceeding, WADECO’s failure to amend its application with regard to the changes in its financial proposal was obviously of decisional significance. For, if WADECO was not financially qualified, its application would be denied regardless of its comparative qualifications.
Belo Broadcasting Corp., 68 F.C.C.2d 1479, 1485 (1978).