In re Application of EIDER C. STANGLAND AND WALLACE L. STANGLAND, D.B.A. SIOUX EMPIRE BROADCASTING CO., SIOUX FALLS, S. DAK. Requests: 1520 kc, 500 w, Day For Construction Permit
Docket No. 17174 File No. BP-15191
FEDERAL COMMUNICATIONS COMMISSION
6 F.C.C.2d 707 (1967); 9 Rad. Reg. 2d (P & F) 396
RELEASE-NUMBER: FCC 67-180
February 8, 1967 Adopted
BY THE COMMISSION: COMMISSIONER BARTLEY CONCURRING IN PART AND DISSENTING IN PART AND ISSUING A STATEMENT IN WHICH COMMISSIONER LOEVINGER JOINS; COMMISSIONER JOHNSON CONCURRING AND ISSUING A STATEMENT.
[*707] 1. The Commission has before it the above-captioned and described application and a petition to deny the application filed by KISD, Inc., licensee of station KISD, Sioux Falls, S. Dak. n1
n1 Also before the Commission are the following related pleadings: The applicant's opposition to the petition and KISD's reply; a supplement to KISD's petition, a second and third supplement, both filed by KISD; a further opposition filed by the applicant and further reply filed by KISD; and KISD's fourth supplement to the original petition. Sec. 1.45 does not contemplate the filing of pleadings after a petitioner's reply. However, KISD's supplementary pleadings contain comments on new matter for the most part and, in one instance, a supplement was filed by leave of the Commission. Therefore, all allegations and supporting documents have been considered.
2. Petitioner claims standing to oppose a grant of the application on the basis of the fact that KISD, Inc., is the licensee of standard broadcast station KISD which will compete with the proposed station for listening audience and advertising revenue. The Commission finds that applicant has standing as a party in interest pursuant to section 309(d)(1) of the Communications Act of 1934, as amended, and section 1.580(i) of the Commission's rules. Federal Communications Commission v. Sanders Bros. Radio Station, 309 U.S. 470 (1940).
3. KISD requests that the application be designated for hearing to determine whether a grant of the application is in contravention of the duopoly and concentration of control provisions of section 73.35 of the Commission's rules; the efforts made by the applicant to ascertain the needs and interests of the area to be served and how the applicant proposes to meet such needs and interests, Henry et al. (Suburban Broadcasters) v. Federal Communications Commission, 112 U.S. App. D.C. 257, 302 F. 2d 191, 23 R.R. 2016 (1962); whether there are adequate revenues to support a fourth commercial standard broadcast station in Sioux Falls without a loss or degradation of service to the area, Carroll Broadcasting Co. v. Federal Communications Commission, 103 U.S. App. D.C., 346, 258 F. 2d 440, 17 R.R. 2066 (1958); [*708] and whether, in the light of the evidence adduced on the adequacy of revenue question, the applicant is financially qualified to construct and operate the proposed station in the manner proposed.
4. Much of what has been alleged is supported by statements signed under oath by Verl Thomson, former president and controlling stockholder of KISD, Inc. On September 9, 1966, the Commission approved a transfer of control from Thomson to new principals, and the transfer was consummated on October 1, 1966. By letter of October 25, 1966, counsel for the new owners advised the Commission that the new management adopts the pleadings filed by the former owner and intends to continue to oppose the Sioux Empire application.
5. KISD urges that a hearing is necessary on the question of whether a grant of the application would be in contravention of the duopoly provisions of section 73.35(a) of the Commission's rules, and in support of this contention alleges that the proposed 1.0-mv/m contour would overlap the 1.0-mv/m contour of station KIWA, Sheldon, Iowa, of which Eider C. Stangland, one of the partners, is the individual licensee. KISD has submitted field intensity measurements along two radials. These measurements of the KIWA signal show that the KIWA 1.0-mv/m contour will extend 32 miles in the direction of Sioux Falls, and, according to KISD, indicate prohibited overlap of the proposed 1.0-mv/m contour for a distance of 5.1 miles.
6. Subsequently, the applicant proceeded to make field intensity measurements along the same radials and at essentially the same points utilized by the petitioner. These measurements consist of two independent sets of data. The two sets of data submitted by the applicant are essentially in agreement and indicate that the KIWA 1.0-mv/m contour does not extend more than 24 miles along either radial toward Sioux Falls. On this basis, the proposed and the KIWA 1.0-mv/m contours would be separated by approximately 3 miles.
7. In view of the discrepancy between the one set of KISD measurements on the one hand and the applicant's two sets of data on the other, all the data on each radial were analyzed together. Jeanette Broadcasting Co., 19 R.R. 480. The Commission's analysis discloses that the two contours are tangent, and, accordingly, no violation of section 73.35(a) of the rules is indicated.
8. The petitioner also claims that a grant of the application would result in a concentration of control of standard broadcast stations in a manner inconsistent with the public interest in violation of section 73.35(b) of the Commission's rules. It is alleged that the proposed station in Sioux Falls and the commonly owned station, KIWA, are within the same trade and market area. The applicant contests this allegation. However, assuming, arguendo, that station KIWA and the proposed station are located in the same trade and market area, this fact, standing alone, would not necessitate the specification of the requested issue. The petitioner has not raised any other facts sufficient to raise a substantial and material question under section 73.35(a) of the rules. In determining whether there is such a concentration of control, the Commission considers such factors as the size, extent and location of areas served, the number of people served, classes of stations involved and the extent of other competitive services in the [*709] area in question. The petitioner, in its third supplement to petition to deny, indicated that there are three competing standard broadcast stations presently licensed in Sioux Falls as well as one FM station and two television stations. The petitioner also alleges that there was a competing standard broadcast station located in Yankton, S. Dak. (located approximately 55 miles from Sioux Falls). In view of the availability of other services in the area and the petitioner's failure to adequately support its contention, the Commission finds that there is no question of undue concentration of control within the meaning of section 73.35(a) of the Commission's rules under the circumstances in this case.
9. In support of its request for an issue to determine the efforts of the applicant to ascertain the needs and interests of the area to be served, the petitioner alleges that the applicant's program proposal is identical to the program service proposed in the original application for the construction permit of KIWA in Sheldon which was filed on September 19, 1958. The petitioner points out that there are several broadcast facilities in Sioux Falls (population, 65,466) and one broadcast station (KIWA) in Sheldon (population, 4,251). In view of the foregoing, petitioner asserts that it cannot be determined whether the applicant has ascertained the needs and interests of the public in Sioux Falls and whether the applicant's proposal would meet those needs. Petitioner also urges that a survey which the applicant claims to have made has not been related to the program proposal. The applicant concedes that the program schedule, insofar as titles, program categories, and percentage analysis are concerned, is identical with the original KIWA proposal, but the applicant contends that similarity in program titles does not mean similarity in program content and that the content of the programs is different so as to take into account the particular needs of Sioux Falls. Eider C. Stangland, one of the partners and a resident of Sioux Falls, claims to have investigated the needs of the area by personal contacts with residents. Mr. Stangland has also had broadcast experience in Sioux Falls. The applicant submitted the results of interviews with community leaders which, according to the applicant, confirmed the validity of the program proposal. The applicant has not clearly indicated the manner in which the results of the interviews relate to the original statement of program service which remains unaltered since the date it was originally submitted. This fact, together with the dispute between the applicant and the petitioner over the adequacy of the applicant's basis for the program proposal, persuades the Commission that an issue should be specified to permit the applicant to submit evidence on its efforts to ascertain the needs, interests, and desires of the public, the adequacy of those efforts and the manner in which those needs as determined by the applicant will be met. Since this question involves matters within the peculiar knowledge of the applicant's principals, the burden of proceeding with the introduction of the evidence and the burden of proof shall be upon the applicant.
10. The petitioner also attacks the reliability of the applicant's programming representations. In support of this contention, the petitioner relies on its observations during 1 day's monitoring of station KIWA [*710] on July 14, 1964. The petitioner reports that the actual schedule for this day did not correspond with the proposed schedule and that this reflects adversely on the credibility of the applicant's representations. This showing, standing alone, does not provide a sufficient basis for questioning the credibility of the applicant's proposal. The Commission finds that no material or substantial questions of fact have been presented which would warrant the specification of an issue concerning the reliability of the applicant's Sioux Falls program representations.
11. The petitioner, in its original petition to deny the application, requested that a Carroll issue (Carroll Broadcasting Co. v. Federal Communications Commission, supra) be specified on the ground that the revenues in the area are inadequate to support a fourth broadcast station without a net loss or degradation of service to the area. The Missouri-Illinois Broadcasting Co. case, 1 R.R. 2d 1 (1963) was remanded to the Commission sub nom. KGMO Radio-Television, Inc. v. Federal Communications Commission, 119 U.S. App. D.C. 1, 336 F. 2d 920, 2 R.R. 2d 2057 (1964), with instructions to give KGMO an opportunity to amplify its allegations in support of its request for the specification of a Carroll issue on the ground that KGMO did not have notice of the new pleading requirement necessary to support a Carroll issue. The Commission's action on the remand is contained in the Missouri-Illinois Broadcasting Co. case, 3 R.R. 2d 232 (1964). In the latter case, the Commission listed the type of material that a petitioner should submit in support of the request for a Carroll issue. Since the petitioner herein did not have notice of these new pleading requirements, it was given an opportunity to amend and amplify its allegations. The Commission now has before it for consideration the pleadings of the petitioner and the applicant, as amended.
12. The Commission has considered the contentions of the petitioner and the applicant, as amended, and is of the opinion that the petitioner has met the burden of pleading to the extent required by Folkways Broadcasting Co., Inc. v. FCC, 8 R.R. 2d 2089. In its response to the Commission inquiries, the petitioner alleged specific facts and drew conclusions which were reasonably related to these factual allegations. In sum, petitioner has offered to prove that the economic effect of a new station in Sioux Falls would be detrimental to the public interest because it would result in a net loss or degradation of public service to the area. Although the burden of proof on the petitioner is heavy, it is not required to prove its case prior to hearing. All that is required at this stage to warrant the specification of the Carroll issue is that the petitioner allege facts which prima facie indicate that a grant of the application would not serve the public interest. The Commission is of the view that the petitioner has raised substantial and material questions of fact concerning the ability of the Sioux Falls market to support another standard broadcast station without a net loss or degradation of service to the community. These questions can only be resolved in an evidentiary hearing. Accordingly, the Carroll issue will be specified. The burden of proceeding with the introduction of the evidence and the burden of proof will be placed on the petitioner.
[*711] 13. The petitioner urges that, in view of the alleged inadequacy of available revenues, the applicant's estimate of operating revenues ($58,000) are unrealistic. On the basis of this allegation, the petitioner requests the specification of an issue to determine whether the applicant is financially qualified to construct and operate as proposed. The petitioner has not made a clear showing that the estimates are unrealistic and, therefore, the Commission will not permit the petitioner's judgment to be substituted for that of the applicant. The applicant has demonstrated to the satisfaction of the Commission that it is financially qualified to construct and operate the proposed station for 1 year without revenues. Approximately $48,186 will be required to cover the downpayment on equipment, land, buildings, miscellaneous expenses, and 1 year's working capital. They will contribute $20,000 as original partnership capital and have demonstrated their ability to meet their respective commitments. A bank loan of $30,000 is available, and a personal loan by one of the partners of $5,000 is also available. An equipment manufacturer has extended credit of $12,585 with a downpayment of 25 percent and the balance payable over a 36-month period. Accordingly, the applicant is financially qualified. Ultravision Broadcasting Co., 1 FCC 2d 544, 5 R.R. 2d 343 (1965).
14. There remains no other material or substantial question of fact which would warrant the specification of issues in this proceeding. Accordingly, KISD's petition will be granted to the extent indicated above and will be denied in all other respects.
15. Except as indicated by the issues specified below, the applicant is qualified in all respects to construct, own, and operate the proposed station. However, for the reasons indicated above, the Commission is unable to make the statutory finding that a grant of the application would serve the public interest, convenience, and necessity, and is of the opinion that the application must be designated for hearing on the issues set forth below.
Accordingly, It is ordered, This 8th day of February 1967, that, pursuant to section 309(e) of the Communications Act of 1934, as amended, the application Is designated for hearing, at a time and place to be specified in a subsequent order, upon the following issues:
1. To determine the efforts made by the applicant to ascertain the programming needs and interests of the area to be served and the manner in which the applicant proposes to meet such needs and interests.
2. To determine whether there are adequate revenues to support more than three commercial standard broadcast stations in the area to be served without a net loss or degradation of standard broadcast service to the area.
3. To determine, in the light of the evidence adduced pursuant to the foregoing issues, whether a grant of the application would serve the public interest, convenience, and necessity.
It is further ordered, That the petition to deny the application filed by KISD, Inc., Is granted to the extent indicated above and Is denied in all other respects.
It is further ordered, That KISD, Inc., Is made a party to the proceeding.
It is further ordered, That the burden of proceeding with the introduction of the evidence and the burden of proof with respect to issue No. 1 shall be upon the applicant and the burden of proceeding with the introduction of evidence and the burden of proof with respect to issue No. 2 shall be upon KISD, Inc.
It is further ordered, That, in the event of a grant of the application, the construction permit shall contain the following condition:
Pending a final decision in docket No. 14419 with respect to presunrise operation with daytime facilities, the present provisions of section 73.87 of the Commission's rules are not extended to this authorization, and such operation is precluded.
It is further ordered, That to avail themselves of the opportunity to be heard, the applicant and party respondent herein, pursuant to section 1.221(c) of the Commission's rules, in person or by attorney, shall, within 20 days of the mailing of this order, file with the Commission in triplicate, a written appearance stating an intention to appear on the date fixed for the hearing and present evidence on the issues specified in this order.
It is further ordered, That the applicant herein shall, pursuant to section 311(a)(2) of the Communications Act of 1934, as amended, and section 1.594 of the Commission's rules, give notice of the hearing, within the time and in the manner prescribed in such rule, and shall advise the Commission of the publication of such notice as required by section 1.594(g) of the rules.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
I concur. See FCC v. Sanders Bros.& Radio Station, 309 U.S. 470 (1940); Carroll Broadcasting Co. v. FCC, 258 F. 2d 440 (D.C. Cir. 1958); Folkways Broadcasting Co., Inc. v. FCC, 8 R.R. 2d 2090 (D.C. Cir. 1967) and Meeks, Economic Entry Controls in FCC Licensing: The Carroll Case Reappraised, 52 Iowa L. Rev. 236 (1966).
STATEMENT OF COMMISSIONER ROBERT T. BARTLEY, CONCURRING IN PART AND DISSENTING IN PART IN WHICH COMMISSIONER LOEVINGER JOINS
I concur in setting the application for hearing on the issue as to ascertainment of community needs. However, I would include the duopoly and revenue issues but not the Carroll issue.
In view of the majority's including the Carroll issue, I would therefore consolidate in the hearing the license renewal of petitioner's station KISD, which is due April 1, 1968, to determine, in the event it is found that the community cannot support another station without causing the petitioner's particular station to operate in derogation of the public interest, which application is better qualified to be the licensee of that facility. Herbert P. Michels, 17 R.R. 557.