(FORTUNE Magazine) – Transcripts of Supreme Court proceedings often make fascinating reading, and we lead with this thought not only to mollify the business department, which shelled out over $300 so we could fascinate ourselves. Fact is, the Supremes were in great form on March 28. They obviously enjoy torturing lawyers who appear before the Court, and several of the casuists who turned up that day, to discuss racial preferences in the award of broadcasting licenses, arguably deserved torture. The Federal Communications Commission promotes preference via several different dodges. In deciding who wins when several qualified applicants are competing for license awards, it routinely tilts toward companies run by women or certain minority-group members. Minorities in on this game: blacks, Hispanics, Pacific Islanders, Aleuts, and Asians. (A question that surfaced ; briefly in oral argument is why there was nothing for the Portuguese.) The commission also has a ''distress-sale'' program under which station owners in danger of losing their licenses are strong-armed into selling to the preferred people at a discount of at least 25% of appraised value. Still another program involves the Liberman standard, memorialized in Keeping Up nine years ago and also resurrected in the Supreme Court arguments the other day. This is the rule under which any selling owner may get tax breaks if he can find a minority person to sell to. We call it the Liberman standard because Storer Broadcasting once benefited mightily by selling a station to a family of that name that happened to be Jewish but qualified as Hispanic. Why so? Because they were said to be ''descended from'' Jews expelled from Spain in 1492. Your servant's own contribution to the discussion was observing, with the help of a $25 calculator, that they were descended from a lot of people. If you assume 20 years to a generation and 24 generations since 1492, then Mr. Liberman theoretically had 16,777,216 ancestors alive in the late 15th century and it seems hard to accept that they were all expelled from Spain. The FCC's posture today seems extremely wobbly. Unlike many affirmative- action deals, the commission's preferences are not based on a finding that women and minorities have been discriminatorily excluded in the past. The underlying theory is, instead, that preference will lead to ''diversity in programming.'' But this argument collides with another, much more sensible theory, also embraced by the commission in recent years -- that it doesn't really have to concern itself with program content since market pressures will always drive owners to offer whatever kind of entertainment the public as a whole, or particular audiences, seem to want. Does anybody think black or Aleut owners would be different from white males and override profit prospects out of some racial instinct, just to provide ''diversity''? This question seems to have bugged several members of the Court. Brother Scalia kept asking the FCC lawyer how he could defend government agencies ''making a prediction about a person's action on the basis of his or her blood.'' Judging from the transcript, Scalia seemed quite upset about such practices (and worried that they would carry over into other realms of government policy if the FCC was sustained). When the FCC man was through, the Court heard the case for the plaintiff % -- a businessman excluded from a distress sale in Hartford because he was not a minority-group member. His lawyer waxed eloquent on the irrelevance of race and then, doubtless stunned, heard himself listening to Scalia arguing the opposite case: that there are ''some generalizations that could be made validly . . . If you pick somebody with a Hispanic surname, you know, 60-40 they would like mariachi bands . . . If I had to bet on it, that's how I'd put my money.'' Scalia's point seemed to be that, yes, we shouldn't kid ourselves about differences between ethnic groups but, no, the differences don't justify government systems of racial preference. When the session ended, the Court had spent a lot of time on the question of what the Constitution permits the U.S. government to do for Hispanics deprived of mariachi music. It would make a great ''Only in America'' item if only those guys knew how to keep it short.