In Re Application of MINNEAPOLIS STAR & TRIBUNE CO. (TRANSFEROR) and WKY TELEVISION SYSTEM, INC. (TRANSFEREE) For Voluntary Transfer of Control Wichita-Hutchinson Co.,Inc., Licensee of Station KTVH-TV, Hutchinson, Kans.
Docket No. 18631 File No. BTC-5848
FEDERAL COMMUNICATIONS COMMISSION
20 F.C.C.2d 951 (1969)
RELEASE-NUMBER: FCC 69-1354
December 10, 1969 Adopted
BY THE COMMISSION: CHAIRMAN BURCH DISSENTING AND ISSUING A STATEMENT; COMMISSIONERS ROBERT E. LEE AND WELLS CONCURRING IN PART AND DISSENTING IN PART AND ISSUING STATEMENTS; COMMISSIONER JOHNSON ISSUING A SEPARATE STATEMENT.
[*951] 1. On September 16, 1969, WKY Television System, Inc., and the Oklahoma Publishing Co. petitioned for reconsideration of the Commission's order n1 designating the above-captioned application for hearing, and requested a grant of the application without hearing. Petitioners asserted that the transferor, Minneapolis Star & Tribune Co. (M.S. & T.), intended to exercise the right contained in the contract for transfer of control to terminate the contract if Commission approval is not obtained by December 31, 1969. By a "Memorandum Opinion and Order," F.C.C. 69-1200, released October 31, 1969, the petition was denied on the grounds that certain of the issues required a hearing for their resolution and that a favorable public interest determination could not be made on the basis of the information then before the Commission.
n1 F.C.C. 69-907, released Sept. 3, 1969.
2. Now before the Commission is a petition filed by WKY on November 26, 1969, requesting that disposition of the pending application be made on the basis of the exhibits attached thereto and other matters of record. Both WKY and M.S. & T. have waived a hearing pursuant to the provisions of section 1.603 of the rules. n2 WKY asserts that the information submitted is sufficient to enable the Commission to resolve all of the designated issues without further hearing, that the issues should be resolved in favor of WKY, and that the application for transfer of control should be approved. If, however, the Commission concludes that a hearing is necessary on any of the issues, WKY requests in the alternative that the Commission grant the application subject to a condition subsequent that a hearing be held to determine whether WKY should be required to divest itself of KTVH-TV (at [*952] no profit) if after the hearing the Commission were to determine that the public interest would be served thereby.
n2 The waivers were filed by WKY on Nov. 26, 1969, and by M.S. & T. on Dec. 5, 1969. Also before the Commission is a pleading filed by the Broadcast Bureau on Dec. 8, 1969.
3. The alternative request of a grant subject to a condition subsequent of a possible divestiture after hearing must be denied. Section 310(b) of the Communications Act expressly provides that no transfer of control may be effected except upon a finding by the Commission that the public interest, convenience, and necessity will be served thereby. Since the public interest finding is a prerequisite to favorable action on the application, the deferment thereof until after consummation of the transfer would be contrary to the express provisions of the act. Therefore, a grant is possible only if all issues are resolved in favor of the proposed transfer or, failing this, if the Commission should decide that any unfavorable factors which might be developed at the hearing are outweighed by the favorable factors so that, on balance, the public interest, convenience, and necessity would be served by a grant of the proposed transfer.
4. As pointed out and explained in our order denying reconsideration and a grant without hearing, we are concerned at this stage of the proceeding primarily with three issues: Whether approval of the transfer would result in an undue concentration of control of the media of mass communication (issue (a)); based on their past broadcast records, contributions to program diversity, fairness in presentation of controversial issues, and proposed expenditures for programming, whether the transferee can be expected to provide at least as good a service to the community as the transferor (issue (c)); and the purposes and effect of certain corporate and family trusts and estates of the Gaylord family (issue (f)). By its pending petition and the attachments thereto, WKY has undertaken to demonstrate that each issue should be resolved in its favor and that a grant of the application for transfer of control would serve the public interest.
5. On the basis of the information submitted,
we are unable to conclude that no undue regional concentration of control would
result from approval of the proposed transfer.
As we stated in our designation order (pars. 11-13), WKY is the licensee
of a VHF television station and a standard broadcast station (WKY-AM-TV) in
Oklahoma City, Okla.; and television stations in Fort Worth-Dallas (KTVT-TV
(VHF)) and in Houston (KHTV-TV (UHF)), Tex.
In addition, the Oklahoma Publishing Co. prints Oklahoma's two largest
newspapers, the Daily Oklahoman (morning) and the Oklahoma City Times (evening)
with a combined circulation of 301,591 daily and 278,075 on Sunday. It also publishes the Farmer-Stockman, a
monthly agricultural periodical with separate editions for
n3 WKY is also the licensee of
television stations at Tampa-St. Petersburg,
n4 This constitutes approximately 33 percent of the State's total population of 2,272,000.
6. In the circumstances set forth herein, the increased area in which the transferee would have a voice provides substantial support for a finding that approval of the transfer would result in an unwarranted or undue regional concentration of control. It may be that in a full evidentiary hearing WKY could develop countervailing factors which would establish that no basis exists for our concern. However, the transferor and transferee have waived a hearing and the pleadings and other matters of record are insufficient to overcome the substantial doubt raised by the matters of record as to the advisability of permitting WKY to extend its influence into this enlarged area. We therefore conclude that WKY has failed to sustain burden of showing that approval of the application for transfer of control is consistent with the public interest.
7. In view of our determination with respect to the concentration of control issue, no extended discussion of the remaining issues is necessary. Nevertheless, in view of WKY's contention that the failure to dispose of certain issues would leave unresolved charges involving its credibility and qualifications to be a licensee, we have examined carefully the data submitted concerning its proposed programming at KTVH-TV and the expenditures to be made in connection therewith. On the basis of our examination, we are satisfied that the proposals were made in good faith and with the intention of maintaining a program format at least as good as that of the licensee under the control of M.S. & T. We find nothing in the submissions of the parties to this proceeding which raises any question as to WKY's credibility or character qualifications to be the licensee of a broadcast facility and our denial of the transfer application is not intended as any adverse reflection on its credibility or character.
8. On the trust issue (issue (f)), there has been no hearing, nor has the Broadcast Bureau focused on this aspect. We are not in a position, therefore, to resolve this issue and we do not do so. However, we do note that WKY has made an extensive showing which, on the basis of the information presently before us, would appear substantially to allay the problem presented as to the trust situation.
9. Accordingly, It is ordered, That the application for transfer of control of the Wichita-Hutchinson Co., Inc., from the Minneapolis Star & Tribune Co. to WKY Television System, Inc., Is denied.
10. It is further ordered, That the petition filed November 26, 1969, by WKY Television System, Inc., for immediate relief Is granted to the extent reflected herein but in all other respects Is denied.
11. It is further ordered, That this proceeding Is terminated.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
This statement is issued to correct any possible misunderstanding about the meaning of today's majority decision. The chairman suggests that the majority should have considered in hearing any issue as serious as the concentration matter posed in this case. But, of course, that is precisely what the majority wanted to do all along. It was the parties in this case who did not wish to face a hearing on the concentration of control issue (each for reasons of its own), who waived a hearing pursuant to section 1.603 of our rules, and who asked us to resolve the issues on the pleadings and record before us.
The parties urged us to approve the transfer, without hearing, because the purchase contract terminates December 31, 1969. In so doing, they have assumed the posture of holding a gun to their collective [*955] heads and threatening to pull the trigger unless we approve the transfer. This Commission cannot respond to such pressure.
The Chairman contends, incorrectly, that the majority has concluded that the public interest will not be benefited by the transfer. This is inaccurate. Unlike an Attorney General who may prosecute some cases and ignore others, the FCC is compelled by the Communications Act to consider every license transfer. That act gives us the affirmative obligation to withhold our approval unless we can make a positive finding, supported by sufficient evidence, that the transfer will serve the public interest, convenience, and necessity. Today we do not find, as the Chairman contends, that the public interest will not be benefited by the transfer. Rather, we find, "[on] the basis of the information submitted," that "we are unable to conclude that no undue regional concentration of control would result. * * *" (Majority opinion, par. 5.) This holding is important: It announces this Commission's intention not to approve transfer applications where the concatenation of evidence suggests a concentration of media control which, as here, may be excessive.
The Chairman also suggests that the Commission should have moved more expeditiously in this matter. With this I wholly agree. The Commission has numerous rulemaking proceedings (including the 50-50 -- Westinghouse network control proceeding, one to a market, and CATVcross-ownership) where the time for filing comments is long past, oral argument has been held where appropriate, and staff work is surely completed by now. If the Commission would move in these areas, some of the delay in individual matters, as typified by this case, could be avoided. For it was, frankly, careful and serious thought on questions involving undue local and regional concentration of control that led to the long period of consideration in this case. Anyone who is truly interested in resolving problems of delay in individual cases might consider expediting the rulemaking proceedings in these areas which were designed to clarify our policies and have been pending for so long. Already there is the suspicion that powerful interests who oppose consideration of these matters are more than happy with past delays -- and urge further delay in the hope that the climate at the Commission will become more favorable to their cause in the future.
I join in the Chairman's urging of speedier Commission action.
DISSENTING STATEMENT OF CHAIRMAN DEAN BURCH
I dissent to the holding in this case on the critical issue of undue concentration of control based solely on pleadings and exhibits.
I cannot condone making such a finding on the basis of pleadings to the exclusion of the hearing processes where allegations can be tested by cross-examination and rebuttal evidence.
[*954] The majority included charges of improper concentration of control in the hearing order and now, on petition of the transferee, and because the expiration of the purchase contract precludes these issues being tested in the hearing process, has concluded that the public interest will not be benefited by the transfer. I am convinced that the public interest is not served by deciding such significant issues in this ipse dixit manner.
One further comment is required in this case. The instant application was filed on January 17, 1969. It took the Commission nearly 9 months to designate this application for hearing on 8 issues -- 7 of which were subsequently resolved to the majority's satisfaction, based on the filing of additional information.
First, I find it difficult to believe that there is any good reason for waiting 9 months to act on a transfer application. Second, while one can only speculate, it does seem that if the Commission had drafted its hearing order in a more precise manner, or had sought to accumulate additional information during the 9 months that the application was under study, a hearing could have been concluded by this time. I hope that in the future the Commission will draft its hearing orders with more expertise as to the issues and will seek to dispose of its business in a more timely fashion.
STATEMENT OF COMMISSIONER ROBERT E. LEE CONCURRING IN PART AND DISSENTING IN PART
I concur with the result reached here insofar as it disposes of the unresolved charges involving WKY's credibility and qualifications to be a licensee (see pars. 7 and 8 of the letter). However, based on the extensive record now before us, and in the absence of any creditable challenge to the facts presented to refute such showing, I believe these matters could and should have been disposed of in a more positive manner.
I dissent to the majorities denial of this application on the ground that the issue of possible regional concentration of control is still unresolved. (See the dissenting statement of Chairman Rosel H. Hyde in which I joined, docket No. 18631, F.C.C. 69-907, Mimeo No. 35070, released September 3, 1969.)
SEPARATE STATEMENT OF COMMISSIONER ROBERT WELLS DISSENTING IN PART AND CONCURRING IN PART
I dissent to the denial of this transfer on the basis of undue concentration of control.
I concur in the denial of the request to grant the applications subject to the outcome of a subsequent hearing because the Communications Act plainly bars a grant unless the Commission first determines that the public interest, convenience, or necessity would be served. I concur in the opinion with respect to the issues concerning programing proposals and expenditures and the issue concerning trust interests and arrangements.