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In Re Application of COSMOS BROADCASTING CORP. (WSFA-TV),

MONTGOMERY, ALA. For Construction Permit

 

Docket No. 16984 File No. BPCT-3643

 

FEDERAL COMMUNICATIONS COMMISSION

 

21 F.C.C.2d 729;

 

RELEASE-NUMBER: FCC 70R-64

 

Adopted February 18, 1970

 


 

JUDGES:

BY THE REVIEW BOARD: SLONE, PINCOCK, AND KESSLER.

 

OPINIONBY: PINCOCK

 


 

OPINION:

[*729] 1. This proceeding involves the application of Cosmos Broadcasting Corp. (Cosmos), licensee of VHF television broadcast station WSFA-TV, channel 12, Montgomery, Ala., to change transmitter site and increase antenna height WSFA-TV presently operates from a site located on Mount Carmel, 24 miles south of Montgomery, with effective radiated power of 316 kw. and antenna height above average terrain of 1,040 feet. Cosmos originally proposed, among other things, to move WSFA-TV's transmitter site to Union Springs, Ala., which is located approximately 38 miles southeast of Montgomery, and to increase antenna height to 2,000 feet above average terrain. Petitions to deny the application were filed by WTVY, Inc. (WTVY), licensee of VHF television broadcast station WTVY, channel 4, Dothan, Ala., and Martin Theatres of Georgia, Inc. (Martin Theatres), licensee of VHF television broadcast station WTVM, channel 9, Columbus, Ga. Objections were also filed by Coastal Television Corp. (Coastal), then an applicant for a construction permit for a new UHF television broadcast station to operate on channel 38 at Columbus, Ga. By memorandum opinion and order released November 21, 1966, n1 the Commission designated the Cosmos application for hearing under areas and populations, [*730] UHF impact, and Suburban issues. The designation order named WTVY, Martin Theatres and Coastal parties respondent to the proceedings, n2 and placed the burdens of proceeding and proof under the UHF impact issue on them. Cosmos was assigned the burdens of proceeding and proof with respect to the other issues. Subsequently, by separate orders of the hearing examiner WCOV, Inc. (WCOV), licensee of UHF television broadcast station WCOV-TV, channel 20, Montgomery, and Gala Broadcasting Co. (Gala), permittee of UHF television broadcast station WYFA-TV, channel 38, Columbus, Ga., were made parties to the proceeding. n3 On June 13, 1967, after giving notice to the other parties and the hearing examiner of its intention to amend its application, Cosmos filed a petition for leave to amend to specify a transmitter site near Grady, Ala., approximately 29 miles south-southeast of Montgomery and 12 miles east-southeast of its present site, with the same power and antenna height proposed in its original application. The petition was granted and the amendment accepted by the examiner by "Memorandum Opinion and Order," released July 25, 1967 (F.C.C. 67M-1230). On June 28, 1967, Cosmos filed a petition for reconsideration and grant without hearing, arguing that its amended application did not pose the questions which were present when its application was designated for hearing. That petition was denied by Review Board memorandum opinion and order released January 8, 1968. n4 Hearings were held in October 1967, and in February through May 1968, and the record was closed on July 24, 1968.

n1 5 F.C.C. 2d 690, 8 R.R. 2d 975.

n2 Coastal became permittee of channel 54, Columbus, on Mar. 29, 1967, and participated at the hearing until June u968, when it announced its withdrawal as a party from the proceeding. On July 1, 1968, Coastal surrendered its construction permit for station WTRT, channel 54. The parties thereafter agreed that Coastal's evidence should remain in the record and be considered as part thereof.

n3 F.C.C. 67M-86, released Jan. 19, 1967; F.C.C. 67M-1575, released Sept. 27, 1967. WCOV did not participate at the hearing or at the oral argument before the Board (see note 6, infra). In 1968, subsequent to the evidentiary hearing, Gala merged with Inland Broadcasting Co. into Eagle Broadcasting Co. (Eagle), a corporation. See Gala Broadcasting Company, 9 F.C.C. 2d 803, 10 R.R. 2d 1120, rehearing denied 11 F.C.C. 2d 40, 11 R.R. 2d 993 (1967), review granted in part and denied in part. F.C.C. 68-512, 13 R.R.. 2d 103. Eagle bound itself by affidavit to the evidence in the record. Consistent with the examiner's usage in the initial decision, the Board will refer to the respondent at Gala and not as Eagle.

n4 11 F.C.C. 2d 313. 11 R.R. 2d 1195.

2. On February 4, 1969, Hearing Examiner Millard F. French released an "Initial Decision" (F.C.C. 69 D-5, 15 R.R. 2d 569) recommending a denial of the Cosmos application. The examiner concluded that the Cosmos proposal would impair the ability of Gala's proposed UHF station (WYEA-TV) in Columbus, Ga., to operate effectively, and, therefore, that a grant of Cosmos' application would not be consistent with Commission policy or in the public interest. The areas and populations and Suburban issues were resolved in the applicant's favor. The proceeding is now before the Board on exceptions filed by Cosmos, WTVY, Martin Theatres, Gala, n5 and the Broadcast Bureau. We have reviewed the initial decision in light of these exceptions, the arguments of the parties, n6 and our examination of the record. Briefly stated, the Board agrees with the examiner's ultimate recommendation to deny the Cosmos application. However, whereas the examiner based his recommendation on an adverse resolution of the UHF impact issue, [*731] we are denying Cosmos' application for the applicant's failure of proof under the Suburban issue. In our opinion, the impact of the Cosmos proposal on authorized and prospective UHF television stations in Alabama and Georgia was not shown by respondents to be sufficient to warrant denial of the Cosmos application. Generally, the examiner's findings of fact on all the issues adequately reflect the evidence of record. Therefore, except as modified herein and in the rulings on exceptions contained in the attached appendix, the examiner's findings are adopted.

n5 WTVY, Martin Theatres and Gala filed joint exceptions, a joint supporting brief, and a joint reply brief. Hereinafter these three parties will be referred to jointly as respondents.

n6 Oral argument was held before a panel of the Review Board on Nov. 6, 1969.

UHF IMPACT ISSUE

3. The UHF impact issue seeks "to determine whether a grant of the (Cosmos) application would impair the ability of authorized and prospective UHF television broadcast stations in the area to compete effectively, or would jeopardize, in whole or in part, the continuation of existing UHF television service." Respondents had both the burden of proceeding with the introduction of evidence and the burden of proof under the UHF impact issue. Compare WLCY-TV, Inc. (WLCY-TV), 16 F.C.C. 2d 506, 509-10, 15 R.R. 2d 642, 647 (1969). Cf. Daily Telegraph Printing Company (WBTW-TV), 20 F.C.C. 2d 976, 18 R.R. 2d 95 (1969). Through documentary and testimonial evidence, respondents sought to prove that the Cosmos proposal would adversely affect UHF television service and development in the Alabama cities of Montgomery, Birmingham, and Dothan and in Columbus, Ga. The Bulk of the record evidence pertains to the alleged adverse impact on station WYEA-TV in Columbus, and the examiner predicated his decision to deny the Cosmos application solely on the basis of adverse impact to that station. In the Board's opinion, respondents failed to prove their case under the impact issue. That is, respondents did not establish that there would be either destruction or significant crippling of UHF television service in Alabama or Georgia as a result of the move. See Midwest Television, Inc. (KFMB-TV), 13 F.C.C. 2d 478, 498, 13 R.R. 2d 698, 721, petitions for reconsideration dismissed or denied 15 F.C.C. 2d 84, 14 R.R. 2d 691 (1968). Nor did respondents show that there would be some substantial specific impact on UHF as a result of the move. See TV Table of Assignments, docket No. 18453, F.C.C. 2d , 17 R.R.2d 1620, 1630 (1969). Cf. New England Video, 10 F.C.C. 2d 749, 17 R.R. 2d 1109 (1969). n7 Rather, the direct and rebuttal evidence, together, show only the likelihood of minimal impact on WYEA-TV should WSFA-TV operate as proposed. In the Board's opinion, the impact shown on the record is insufficient to warrant the denial of the Cosmos application. Cf. WHAS, Inc. (WHAS-TV), 4 F.C.C. 2d 724, 8 R.R. 2d 475 (1966), affirmed as modified F.C.C. 66-1159, 8 R.R. 2d 1214.

n7 In New England Video, a CATV case involving sec. 74.1107 of the rules, the Commission rejected allegations of adverse UHF impact raised in connection with a CATV proposal to carry the signal of a UHF station. The Commission held that, "Because of the distance of petitioner's CATV system from the center of the * * * television market (in question) and the limited nature of the carriage being permitted at this time, the possibility of any substantial adverse impact on broadcasting service to the public is minimal * * *. (Therefore), we believe the proposal is consistent with the establishment and healthy maintenance of television service in the area." 20 F.C.C. 2d at 751, 17 R.R. 2d at 1112. (Italic supplied.)

[*732] 4. Before considering the merits of the evidence introduced by respondents in attempting to prove their case under the impact issue, n8 it is necessary to consider the nature of the issue, with particular reference to the Commission's well-established UHF policy. Essentially, respondents take the position that their burden of proof under the impact issue must be viewed in light of the Commission's long standing policy of protecting individual UHF television stations and of encouraging UHF development in general; that the burden on proof under a UHF impact issue is not great as where hard facts, such as past conduct, are to be proved; and, that respondents met their burden of proof in this case. We are in basic agreement with all but the last of the respondents' general propositions; however, we do not agree with respondents' application of these general propositions to the facts in this proceeding. As the Board stated in 1968 in the Central Coast case n9: "The very nature of the UHF impact issue in this or any other proceeding where it is presented is such that the evidentiary hearing 'is not adjudication in the sense that it is concerned with a determination of past and present conduct or liabilities but rather has the object of eliciting sufficient information to permit the Commission to make an informed policy judgment as to the best future course in the market involved. Moreover, since future events, such as * * * the potential effect [of, in this case, a VHF transmitter relocation] on proposed and potential [UHF] television stations, are not subject to positive proof, our findings and conclusions must rest to some extent on forecasts and reasonable inferences from such evidence as is available.'" n10 In other words, the burden assumed by respondents in this case was to present sufficient information at the hearing to show that a grant of the Cosmos proposal would, in fact, "impair the ability of authorized and prospective UHF television broadcast stations in the area to compete effectively, or would jeopardize, in whole or in part, the continuation of existing UHF television service."

n8 Actually, only Coastal and Gala sought to prove that there would be adverse impact on UHF television service as a result of the Cosmos proposal. However, respondents filed joint findings and conclusions with the examiner and joint exceptions and briefs with the Board, arguing with essentially one voice on the impact issue.

n9 Central Coast Television (KCOY-TV), 14 F.C.C. 2d 985, 14 R.R. 2d 575 (1968), review denied sub nom. Central Coast Broadcasters, Inc. (KCOY-TV), F.C.C. 69-614, released June 9, 1969, reconsideration dismissed F.C.C. 69-840, released Aug. 1, 1969, remand denied F.C.C. 70-137, released Feb. 5, 1970.

n10 14 F.C.C. 2d at 1007 n. 40, 14 R.R. 2d at 604 n. 40, quoting from Midwest Television, Inc. (KFMB-TV), supra, 13 F.C.C. 2d at 488, 13 R.R. 2d at 711.

5. In our opinion, the information presented by respondents pursuant to the UHF impact issue is inadequate to support their recommendation as to the best future course for television broadcasting in Montgomery, Ala., in particular, and in WSFA-TV's grade B gain area in general. Underlying respondents' impact showing is a fundamental misconception as to the scope of the Commission's UHF policy. Thus, the Commission does not purport to guarantee the absolute success of UHF television broadcast stations, as respondents implicitly argue in their exceptions and supporting brief. n11 Cf. FCC v. Sanders Brothers Radio Station, 309 U.S. 470, 475 (1940). Rather, the Commission seeks to protect and encourage UHF television service as much as possible, n12 without, at the same time, foreclosing possible advantages [*733] to the public which may be achieved by the improvement of VHF service. n13 It is definitely not the Commission's policy to "insulate every UHF station or potential station from any possible small wind of VHF impact, where there is a substantial service benefit involved in a different course." TV Table of Assignments, docket No. 18453, supra. n14 In the final analysis, where, as here, UHF impact is in issue in a case involving a proposed VHF transmitter move, a choice must be made between the Commission's policy of [encouraging] television broadcast stations to operate with maximum facilities in order to make the most efficient use of channel assignments" and the policy of "fostering the development of UHF broadcasting." South Carolina Educational Television Commission (WITV), 18 F.C.C. 2d 328, 331, 16 R.R. 2d 725, 729, reconsideration denied, 20 F.C.C. 2d 666, 17 R.R. 2d 1077 (1969). See Daily Telegraph Printing Company (WTW-TV), supra. Where substantial adverse impact on UHF service has been shown, the choice must be made in favor of the Commission's UHF protection policy. Gala Broadcasting Company, supra, F.C.C. 68-512, 13 R.R. 2d 103. On the other hand, in a case such as this one, where only minimal impact on UHF has been shown, Commission policy does not require us to deny applications to improve the operation of an existing VHF station, especially where substantial service [benefits] would be achieved by a grant of the VHF application. In the following 21 paragraphs, the Board will explain why, in its view, the record evidence in this proceeding, considered in light of the Commission's policy articulated above, does not compel a conclusion that the subject application must be denied because of its potential impact on UHF television stations in the relevant geographic area.

n11 See pp. 18-23 of respondents' joint brief.

n12 Triangle Publications, Inc. (WNHC-TV), 37 F.C.C. 307, 3 R.R. 2d 37 (1964).

n13 See Atlantic Telecasting Corp. (WECT), 3 F.C.C. 2d 442, 7 R.R. 2d 297 (1966), affirmed sub nom. Lee v. FCC, 126 U.S. App. D.C. 45, 374 F. 2d 259, 8 R.R. 2d 2111 (1967).

n14 At oral argument, counsel for Gala contended that what is involved here is not a small wind but a hurricane. We disagree. The record evidence supports no such conclusion. See pars. 7-26, infra.

6. At the outset, we note that the Cosmos proposal would result in a more efficient use of channel 12, in that significant service benefits to the viewing public in Alabama would result therefore. Thus, WSFA-TV's request to utilize the maximum power-antenna height combination permitted a television station in the channel 7-13 band would result in: (1) No deprivation or degradation of existing television service; n15 (2) a gain in service to 294,400 persons in 7,350 square miles within WSFA-TV's proposed grade B contour; and (3) the elimination of white and gray areas containing 4,200 persons and 12,100 persons, respectively. These definite public interest benefits must be considered in resolving the impact issue. n16 On the other hand, providing the foundation for respondents' position on the impact issue is the undisputed fact that the Cosmos proposal would result in increased overlap of WSFA-TV's grade B contour with the like contours of several authorized and prospective UHF television broadcast stations in Alabama and Georgia. Possibly endangered by the Cosmos proposal would [*734] be the following UHF stations or prospective UHF stations: WCOV-TV, channel 20, Montgomery; WKAB-TV, channel 32, Montgomery; WBMG, channel 42, Birmingham; WYEA-TV, channel 38, Columbus (cp); WCFG-TV, channel 68, Birmingham (cp); channel 45, Montgomery; channel 21, Birmingham; channels 18 and 60, Dothan; channel 29, Selma; and channel 54, Columbus. Respondents' attempt at the hearing to translate the possibility of harm to these stations, which gave rise to the impact issue, n17 into the probability of harm sufficient to warrant denial is based mainly on the following arguments; (1) That presently operating commercial UHF stations in Montgomery and Birmingham would suffer significant economic losses as a result of the proposed WSFA-TV modification; (2) that prospective UHF stations in Montgomery, Birmingham, and Dothan, Ala., and in Columbus, Ga., either would not be activated or would have difficulty in getting established because of the WSFA-TV proposal; and (3) that station WYEA-TV in Columbus would sustain significant losses in network, national, regional, and local revenues, ultimately resulting in a loss of television service to the public in the Columbus area. The bulk of the evidence, however, concerns that alleged impact on station WYEA-TV.

n15 Compare Central Coast Television (KCOY-TV), supra, 14 F.C.C. 2d at 1000, 14 R.R. 2d at 596. Cf. Television Corporation of Michigan v. FCC, 111 U.S. App. D.C. 101, 294 F. 2d 730, 21 R.R. 2107 (1961). The original Cosmos proposal would have resulted in the deprivation and degradation of television service in general and in the creation of white and gray areas in particular. See par. 3 of the "Designation Order," 5 F.C.C. 2d at 691, 8 R.R. 2d at 978.

n16 Cf. South Carolina Educational Television Commission (WITV), supra.

n17 The possibility of harm to UHF television service in the Montgomery area and in the proposed new service area formed the basis for the designation of an impact issue in this proceeding. See pars. 5 and 6 of the "Designation Order," 5 F.C.C. 2d at 692-693, 8 R.R. 2d at 979-980. By Commission directive, however, it remained the responsibility of respondents to prove at the hearing that UHF television service in the area would be seriously impaired or jeopardized as a result of the Cosmos proposal. Cf. WLCY, Inc. (WLCY-TV), supra.

7. First, we will deal with possible impact on UHF television service in the Alabama cities of Montgomery, Birmingham, and Dothan. The record shows that the areas within the grade B contours of the two Montgomery UHF stations are entirely encompassed within WSFA-TV's present and proposed grade B contours. The grade B contour of UHF station WBMG, Birmingham, falls 30 miles short of Montgomery. WSFA-TV's proposed grade B contour does not cover any part of the city of Birmingham, and reaches to within only 27 miles of the city, penetrating WBMG's grade B contour to a maximum depth of 16 miles, an increase of 7 miles beyond the present 9-mile penetration. All of the overlap area lies within the grade B contours of Birmingham's two VHF television stations, WBRC-TV (ABC-CBS) and WAPI-TV (NBC-CBS). At present, WSFA-TV's grade B contour does not reach Dothan. Operating as proposed, WSFA-TV would cover the entire city, which lies to the southeast of Montgomery, with a grade B signal. Study prepared for Gala in March 1968, by Charles H. Smith, a broadcast research consultant, purports to show injury to UHF stations in Montgomery, Birmingham, and Dothan. In particular, the Smith study attempts to demonstrate that WSFA-TV's proposed move would cause serious economic injury to the two Montgomery UHF stations through direct loss of revenue and to UHF stations in the adjacent markets of Birmingham and Dothan, Ala., through a shift of viewing audience to WSFA-TV.

8. In regard to the Montgomery stations, Smith expressed the opinion that the expected increase in WSFA-TV's audience would necessarily improve its already dominant position in the Montgomery [*735] market. n18 Proceeding from this major premise, Smith sought to demonstrate that the increased homes acquired by WSFA-TV would be of such magnitude as to elevate the entire Montgomery market from its present American Research Bureau (ARB) ranking of 123 into the top 100 markets. The result of this elevation, according to Smith, would be that WSFA-TV, with its enlarged service area, would become an even more attractive buy for advertisers than it is now (see note 18, supra), and that WSFA-TV would consequently get virtually all of the national spot business placed in the Montgomery market. A move by Montgomery into the top 100 markets would also lead to increased overall costs (including those for syndicated programs and personnel) for all of the Montgomery television stations, Smith Concluded, with the two commercial UHF stations unable to compete with WSFA-TV in meeting such increased costs, and the inevitable result would be increased revenues for WSFA-TV and decreased revenues for the two UHF stations.

n18 WSFA-TV is the only VHF television broadcast station licensed to operate in Montgomery, the State capital (1960 population 134,393 persons). The other television stations licensed to Montgomery are: Channel 20, WCOY-TV; channel 32, WKAB-TV; and channel 26, WAIQ (noncommercial), Channel 45 is allocated to Montgomery but is vacant. All three commercial stations are primary affiliates of the three major networks: WSFA-TV is affiliated with NBC; WCOV-TV with CBS; and WKAB-TV with ABC. In 1966, 84 percent of national and regional revenues and 63 percent of local revenues in the Montgomery market went to WSFA-TV.

9. Smith's opinion that WSFA-TV's proposed move would jeopardize UHF television stations in Birmingham and Dothan is based on the supposed growth of the Montgomery market at the expense of the Birmingham and Dothan markets under ARB's Area of Dominant Influence (ADI) concept. n19 Signals from other television stations serving the same area were not considered. Thus, Smith's opinion is based on WSFA-TV's improved signal versus the local signal (e.g., WBMG, Birmingham) without regard to other services available in the area. According to Smith, the ADI concept is in more frequent commercial use than other measures of the market; e.g., net weekly circulation or advertiser-originated tests. Applying the ADI concept to the facts in this case, Smith concludes that seven counties now in the Dothan ADI, Birmingham ADI, and the Columbus ADI would all be reclassified into the Montgomery ADI as a result of the improvement of WSFA-TV's facilities. n20 Consequently, the Montgomery market would attract the increased attention of national advertisers since media planners are more interested in the top 100 television markets. Further, even though more national spot dollars would be allocated to the Montgomery market, these dollars would go almost exclusively to WSFA-TV because only WSFA-TV would serve the entire enlarged market.

n19 ADI is an ARB television market concept whereby each county in the United States is credited to that market whose stations, in sum, account for the largest share of the viewing hours reported in the county. By this method, each county in the United States is assigned to a single market, and no allowance is made for overlapping coverage of counties by stations in different markets.

n20 In arriving at these projections, Smith employed ARB coverage data as a reference point and considered the penetration of the WSFA-TV grade B contour in determining what counties could be expected to increase their viewing of the Montgomery stations. Based upon these projections, Smith estimates that there would be a probable gain of 42,000 television homes in the Montgomery market's ADI which represents a 38-percent increase to 152,000 television homes. This would move Montgomery's national rank to the top 100 markets.

[*736] 10. In our view, it is doubtful that the Cosmos proposal will impair the ability of the two Montgomery commercial UHF station to operate effectively. WSFA-TV already encompasses the grade B contours of these stations. Thus, the increase in WSFA-TV's coverage will, in our opinion, have little, if any, impact on the ability of these UHF stations to compete with WSFA-TV. Significantly, it was not shown that WSFA-TV's present competitive position in the Montgomery market would be so enhanced as to lead to the crippling or destruction of the two existing commercial UHF stations in Montgomery. While WSFA-TV may dominate the Montgomery market, as respondents maintain, it has not been proven that its present share of national, regional, and local sales will increase to the extent that the Montgomery "U's" will be substantially affected. In other words, we fail to see how WSFA-TV's already high percentages of total revenues in the Montgomery market (see note 18, supra) can be greatly increased as a result of the proposed move. In this regard, it is noteworthy that each UHF station is a primary affiliate of a major network, has operated in the Montgomery market for several years, and, by Smith's evidence, has shown constant economic improvement. A network affiliation enhances a television station's chances for survival and viability. Cf. TV Table of Assignments, docket No. 18390, 17 F.C.C. 2d 419, 15 R.R. 2d 1602 (1969); Central Coast Television (KCOY-TV), supra, 14 F.C.C. 2d at 1006, 14 R.R. 2d at 603. Likewise, there was no showing that channel 45 in Montgomery is likely to be activated in the immediate future; and the prospects for the channel's activation were not shown to be impaired or jeopardized by the Cosmos proposal. In these circumstances, than, n21 we conclude that the impact, if any, on the Montgomery stations from a grant of the subject application would be minimal. Cf. New England Video, supra.

n21 That neither UHF station opposed a grant of the Cosmos application nor participated at the hearing (see note 3, supra), is not of decisive significance in this case. See WLCY, Inc. (WLCY-TV), supra, 16 F.C.C. 2d at 530, 15 R.R. 2d at 671.

11. Charles Smith's study with respect to adverse impact on UHF television service in Birmingham and Dothan is predicated upon his opinion that ADI is the primary tool used by advertisers in deciding how and where to spend advertising dollars in a television market. However, Cosmos' expert witness, Ernest H. Clay, who, like Smith, is also an experienced broadcast research consultant, expressed the opinion that ARB's ADI concept is not the primary determinant of the amount of national spot advertising dollars spent in a television market. Rather, Clay states, "market rankings based on actual audience measures (average quarter hour or net weekly circulation) are certainly the most frequently used tool in the general market by market allocation of national spot dollars." On this basis, Clay concludes that the impact of the Cosmos proposal on UHF service in Dothan and Birmingham would be minimal. Thus, Clay's expert testimony expressly contradicts the underlying basis of Smith's study and opinion. There is no objective evidence in the record to support the opinion of either of these experts in this regard. In light of the contradictory testimony and the facts that respondents bore the burden of proof under the impact issue and failed to support Smith's opinion testimony [*737] regarding ADI with objective evidence, we cannot accord substantial weight to that opinion. In addition, Smith failed to consider outside signals serving the area in reaching his ultimate conclusion, thereby eliminating the significant factor of competition for audience by stations other than WSFA-TV and the home market station. Furthermore, WSFA-TV's proposed grade B signal would not even reach Birmingham, but would only extend to within 27 miles of that city. Therefore, the possibility that the Cosmos proposal would adversely affect station WBMG is remote. See WHAS, Inc. (WHAS-TV), supra.

12. As noted above, respondents' case under the impact issue rests mainly on an allegation of adverse impact on station WYEA-TV in Columbus, G.; and, in view of respondents' failure of proof as to UHF impact elsewhere in WSFA-TV's proposed service area (see pars. 7-11, supra), a finding of "substantial adverse impact" on WYEA-TV n22 is crucial if respondents are to prevail under the impact issue. The examiner concluded that "WSFA-TV's proposal would impair the opportunity for the establishment and healthy development of * * * WYEA-TV * * * by the diminution of that station's national, regional, and network revenue potential and thus a grant of [Cosmos'] application * * * would not be consistent with Commission policy nor in the public interest." In the examiner's view, the most significant factor in respondents' favor is WYEA-TV's potential for a network rate increase, and the resulting decrease in that potential should WSFA-TV operate as proposed.

n22 TV Table of Assignments, docket No. 18453, supra.

13. The record evidence shows that the city of Columbus (1960 population 116,779) is located approximately 80 miles to the east of Montgomery and lies directly on the Georgia-Alabama State line. There are two operating commercial VHF television broadcast stations in Columbus: WTVM, channel 9 (ABC-NBC) and WRBL, channel 3 (CBS-NBC). A noncommercial UHF television broadcast station (WJSP-TV) operates on channel 28. Channel 54 is allocated to Columbus but is vacant, n23 and Gala has a construction permit for station WYEA-TV on channel 38. The record evidence shows that WYEA-TV would be a primary affiliate of the NBC television net-work and that its initial rate would be $150 per hour. n24 The record further shows that Columbus lies on the periphery of WSFA-TV's proposed grade B contour and that not all of the city would receive a grade B or better signal from WSFA-TV, operating as proposed. In particular, WSFA-TV's proposed operation will result in grade B coverage by WSFA-TV of 90 percent of the area and population of Columbus, 85.6 percent of the Columbus urbanized area, and 68.2 percent of the Columbus standard metropolitan statistical area. The Columbus urbanized area has a population of 158,382 persons and consists of Columbus, Bibb City, and urbanized areas in Georgia, and Phoenix City, Ala. WYEA-TV's grade A contour encompasses [*738] all of the Columbus urbanized area. The Columbus standard metropolitan statistical area (population 217, 985) is comprised of Russell County, Ala. (population 46,351), and Muscogee (population 158,623), and Chattahoochee (population 13,011) Counties, Ga. WYEA-TV's grade A contour encompasses most of the Columbus standard metropolitan statistical area and the station's grade B contour covers all of the Columbus SMSA. n25

n23 See note 2, supra.

n24 The two Columbus VHF stations have NBC hourly rates of $700 and neither is required to give NBC any free hours or waivers, as WYEA-TV would be expected to do. However, according to NBC's vice president in charge of station relations, who testified at the hearing, NBC did not take the VHF stations' $700 rate into consideration in setting the $150 starting rate for WYEA-TV.

n25 The entire area (4,646 square miles) within the grade B contour of WYEA-TV is within the grade B contours of the two Columbus VHF stations.

14. WSFA-TV's present grade A contour falls short of WYEA-TV's grade A contour by approximately 5 miles. Operating as proposed. WSFA-TV's grade A contour would overlap WYEA-TV's grade A contour to a depth of 14 miles and would reach to within 17 miles of Columbus. The present and proposed grade B contours of WSFA-TV overlap the grade B contour of WYEA-TV by distances of 25 miles and 48 miles, respectively. n26 Of the 7,350 square miles that would gain grade B coverage from WSFA-TV for the first time, 23.2 percent (or 1,703 square miles) is encompassed within the grade B contour of WYEA-TV. The incremental overlap area contains 201.740 persons, and these persons comprise 68.5 percent of the 294,400 persons in the entire grade B gain area of WSFA-TV. The record also shows that 135,604 persons in the gain area reside in the Columbus urbanized area. These 135,604 persons represent 46.1 percent of the gain area population. The proposed extension of WSFA-TV's grade B contour will permit coverage for the first time of at least 50 percent of the population within WYEA-TV's grade A contour and will reduce from 51.5 to 27.6 percent the total area within WYEA-TV's grade B contour wherein grade B coverage is obtained from only two VHF stations. The grade B overlap area receives grade B or better service from two to five VHF television stations.

n26 The overlap figures found in this decision and in the examiner's initial decision are based on the record established in this proceeding. We are bound by these figures in reaching a conclusion under the UHF impact issue. Cf. Deep South Broadcasting Company v. FCC, 120 U.S. App. D.C. 365, 347 F. 2d 459, 4 R.R. 2d 2018 (1965). However, had the present hearing record as a whole convinced us to confirm the examiner's conclusion with respect to adverse impact on station WYEA-TV, we would have had to remand the proceeding for further hearing under the impact issue in light of the Commission's recent action granting WYEA-TV's application for a major modification of its facilities. Eagle Broadcasting Company (WYEA-TV), 20 F.C.C. 2d 233, 17 R.R. 2d 766, released Oct. 28, 1969. Eagle (herein referred to as Gala) had requested permission to relocate its transmitter site and to increase antenna height and effective radiated power. Of significance to this proceeding is the fact that operating as now authorized, station WYEA-TV would increase its proposed grade B service area by more than 50 percent. The effect of the operation of Gala's new and more powerful facilities on the outcome of the UHF impact issue in this proceeding is indeterminable. As indicated, however, we need not consider the question since the present record does not prove significant adverse impact on UHF television service.

15. Respondents' evidence under the impact issue dealing with the Columbus NBC affiliated UHF station (now channel 38) consists of the oral and written testimony of two witnesses: Charles F. Grisham, Gala's managing partner, and Dr. Robert A. Porter, vice president and technical director of Spindletop Research, Inc., a research institute located in Lexington, Ky. Spindletop was commissioned by Coastal in 1967 to study the possibilities for a network affiliated UHF station in Columbus, both with and without a grant of the Cosmos application. In addition to their factual showings, respondents also rely on the "basic absolutes or constants in the UHF-VHF relationship which [*739] exist independently of the ownership or operation of particular UHF or VHF stations in a given market." n27 WLCY, Inc. (WLCY-TV), supra, 16 F.C.C. 2d at 516, 15 R.R. 2d at 654-655. The gist of Gala's and Coastal's factual evidence purports to show than an NBC affiliated UHF station in Columbus would be seriously jeopardized by WSFA-TV's proposed operation. In rebuttal, Cosmos introduced the oral and written testimony of Ernest Clay, a broadcast research consultant, and George M. Lohnes, an engineer. In short, Cosmos sought to show that there would be no significant adverse impact on any UHF station anywhere in WSFA-TV's proposed service area, including Columbus, as a result of the Cosmos proposal. According to the applicant, "no reasonable interpretation of the evidence * * * could lead to the inference of the existence of adverse UHF impact on WYEA-TV because of the Cosmos application."

n27 E.g., that, all other things being equal, the introduction of a VHF television signal into the service area of a UHF station seriously jeopardizes the chances for a financially successful operation of the UHF station. Triangle Publications, Inc. (WNHC-TV), supra, 37 F.C.C. at 320, 3 R.R. 2d at 53.

16. Charles Grisham, Gala's witness, expressed the opinion that WSFA-TV's proposed move would result in the loss of approximately one-third of WYEA-TV's anticipated revenues. Since Gala estimates first-year revenues of $292,000 and expenses of $321,400, a one-third loss would be $94,000. However, the record evidence shows that Gala's revenues and expense figures are estimates based on a November 1966, study of 1965 revenues of other closely ranked ARB markets, all of which had three operating stations. The value of Gala's estimates, which were out of date when presented at the hearing in 1968, is highly questionable in resolving the impact issue. Grisham's opinion of a one-third loss was based generally on his broadcast experience since 1939, and, in particular, on his managerial experience since 1963 with UHF station WHNT-TV in Huntsville, Ala. The Board takes official notice that Huntsville had a population of 73,365 in 1960 (U.S. census) and that there are two operating commercial UHF stations in Huntsville, WHNT-TV (CBS) (channel 19) and WAAY-TV (ABC-NBC) (channel 31), and no VHF stations operating or allocated (Commission rule 73.606). Grisham attributes a 50-percent loss in WHNT-TV's national and regional revenues to the alleged exploitation by Birmingham and Nashville VHF television stations of their audience reception beyond their predicted grade B contours in promoting their stations with advertisers. However, Gala expects 60 percent of WYEA-TV's revenues to be derived from local sources. The reason for this, according to Gala, is that the station's cost per thousand (CPM) n28 is less important to local advertisers. Although Grisham testified that he does not expect local advertisers to switch from WYEA-TV to WSFA-TV, he does anticipate a switch from the UHF station to the two Columbus VHF stations should WSFA-TV operate as proposed. Furthermore, according to Grisham, Columbus cannot support four commercial television stations, and if WYEA-TV did [*740] not get a suitable per program arrangement or network affiliation, he would recommend to his partners that the construction permit for channel 38 be surrendered. n29 Grisham also believes that people in the Columbus area (which includes Phoenix City, Ala., Columbus' sister city) would watch WSFA-TV rather than WYEA-TV for NBC programming because "not every (television) set is equipped to pick up UHF * * *, and if they can get a signal out of Montgomery on their present VHF set, they will look at it." According to Grisham, who is not an engineer, WSFA-TV, operating as proposed from Montgomery 80 miles away, would be receivable in the Columbus area even with rabbit ear antennas because of the flat terrain and low buildings.

n28 Cost per thousand represents the cost of a spot announcement for every 1,000 television homes in which it is viewed. For example, if a television spot announcement is rated as viewed in 20,000 homes, and if that spot costs $20, the cost per thousand to the advertiser is $1.

n29 At the time Grisham testified, there were two operating VHF commercial stations in Columbus and two prospective UHF commercial stations (WTRT-TV, channel 54, and WYEA-TV, channel 38). Grisham's testimony predated that of Donald J. Mercer, NBC's vice president in charge of station relations, who testified that NBC was willing to negotiate a contract with Gala prior to construction looking toward a primary affiliation. NBC's commitment to Gala was made without regard to the Cosmos application. Significantly, none of the parties dispute that WYEA-TV would be a primary NBC affiliate.

17. Grisham further predicted that the Cosmos proposal would have an inhibiting effect upon any future network rate increase for WYEA-TV. Grisham's reasoning is that network compensation is generally tied to cost per thousand (CPM) or unduplicated homes delivered, and to the extent that WYEA-TV would have to share NBC audience with WSFA-TV its audience would be smaller and its CPM higher. The consequence of such a situation, according to Grisham, would be to deprive WYEA-TV of any reasonable prospects for obtaining a higher network rate in the foreseeable future. Grisham also states that WYEA-TV's national spot sales would suffer as a result of the move. Should WSFA-TV's relocation cause the expected diminution of revenues, WYEA-TV would, in Grisham's opinion, be forced to reduce its staff and hours of operation; eliminate many of its local live programs, including news and public affairs; and buy less costly syndicated and feature film. In Grisham's view, all of the foregoing would not offset the UHF station's losses, and a losing operation would not be tolerated indefinitely by Gala's owners.

18. In the Board's opinion, Grisham's testimony does not prove that Gala would sustain a one-third loss in revenues as a result of the Cosmos proposal. For, in this case, as in the WHAS case, the testimony was "of a generalized nature and, in the main, conclusionary. It lacked direct specific factual data, the type of pertinent and relevant material required for it to prevail in the ad hoc resolution of the impact issue." WHAS, Inc. (WHAS-TV), supra, 4 F.C.C. 2d at 745, 8 R.R. 2d at 498. The major basis for Grisham's estimate of a one-third loss should WSFA-TV operate as proposed is his experience with UHF station WHNT-TV in Huntsville. Assuming, arguendo, that WHNT-TV experienced a 50-percent loss in national and regional revenues because of competition from VHF stations in other cities, it is, as the examiner found, "incomprehensible how a loss of one-third of the total revenue of the proposed (Columbus) UHF station would result, because only 40 percent of such revenue is anticipated from national and regional sources." "Initial Decision," 15 R.R. 2d at 582. Thus, the fact that Gala expects 60 percent of its revenues to be derived [*741] from local sources significantly diminishes the relevance of the Huntsville experience, which was not shown in any other respect to be similar to the Columbus station. In fact, Gala's advertising rates would be one-half those of the Columbus VHF stations in order to keep its CPM competitive. Furthermore, even though WSFA-TV will cover 90 percent of the city of Columbus with a grade B signal, Cosmos' unequivocal record position is that it does not intend to: (1) Act as an NBC outlet for Columbus; (2) solicit local advertising in either Columbus or its sister city, Phoenix City, Ala., although Cosmos would accept such advertising if offered; or (3) maintain offices or studios in Columbus. Compare Central Coast Television (KCOY-TV), supra, 14 F.C.C. 2d at 1002, 14 R.R. 2d at 598. Furthermore, Grisham used 1965 revenues in dissimilar markets for arriving at 1968 revenue projections for the Columbus market. It is also significant that Grisham failed to ascertain the degree of UHF conversion in making his estimates for the Columbus market. Therefore, Grisham's estimate of a one-third loss should WSFA-TV operate as proposed is, at best, only an approximation based on rough estimates. As such, it fails to sustain Gala's ultimate contention that competition from WSFA-TV 80 miles away would eventually cause the demise of an NBC affiliated UHF television service in Columbus.

19. The record does not sustain Grisham's prediction that in the event the Cosmos application is granted, people in the Columbus area would watch WSFA-TV, a Montgomery, Ala, station rather than WYEA-TV, a Columbus station, for NBC programming. This being the case, Grisham has failed to prove an essential part of his case; namely, that WSFA-TV, operating as proposed, would have an inhibiting effect upon any future network rate increases for WYEA-TV. According to the record evidence, several factors, including total audience and program popularity, determine whether a network rate increase will be granted. While WSFA-TV will duplicate WYEA-TV's NBC program service in the overlap area, thereby depriving the UHF station of some potential viewers, there are several undisputed facts present in the hearing record which are inconsistent with respondents' charge that a grant of the Cosmos proposal would sharply diminish WYEA-TV's chances for a network rate increase in the future. In contrast to the opinion testimony of Grisham, who is not an engineer, and who was not qualified as an engineering expert, Cosmos' engineering witness pointed out in his testimony that three factors would tend to restrict viewing of WSFA-TV, operating as proposed, in the Columbus area: First, the center of Columbus is approximately 80 miles from the proposed transmitter site and on the periphery of WSFA-TV's proposed grade B contour; n30 second, Columbus is from [*742] 300 to 400 feet below line-of-sight from proposed WSFA-TV, but within line-of-sight of proposed WYEA-TV as well as the two existing Columbus VHF stations, and within their respective principal city grade contours; and, third, reception of WSFA-TV, operating as proposed, would require the use of high-receiving antennas carefully oriented toward the Montgomery station and away from the local Columbus stations. n31 In the engineer's opinion, an acceptable quality picture in the Columbus area from the three local stations would be available at a greater number of locations than from WSFA-TV, operating as proposed.

n30 The "Sixth Report and Order," 1 R.R. (pt. 3) 91: 599, 17 F.R. 3905 (1952), and Commission rule 73,683 specify the level of signal intensities for the grades A and B contours of television broadcast stations. The engineering principles underlying those contours are found in the "Third Notice of Further Proposed Rulemaking, Television Broadcast Service," 16 F.R. 3072 (1951). The grade A contour is defined as one where, at its outer limits of service, the best 70 percent of receiver locations would be of a quality acceptable to the median observer for 90 percent of the time; for grade B service the figures are 50 percent of the locations and 90 percent of the time. In specifying the level of these signals, various factors were considered, such as terrain, local noise, and interference factors. Thus, to overcome local noise and interference under urban conditions, the specified grade A field intensity for the channel here involved includes a 7-db factor; i.e., the signal intensity has to be increased by 7 db over that which otherwise would be required in the absence of local noise and interference. In contrast the specified grade B signal level does not include any such factor. Thus, in terms of probable service to Columbus and other nearby urban areas, it is noted that a part of Columbus is located within and at the outer limits of the proposed grade B contour where at best only 50 percent of the receiver locations would have a signal of sufficient level to be acceptable to the median observer, and that, in the presence of the local urban interference and noise, the percentage would even be less. Moreover, the grade B field strength specified for this service (grade B) is based upon the assumed use of a half-wave dipole receiving antenna with a gain of 6 db. Therefore, Grisham's contention that WSFA-TV's proposed signal would be receivable in Columbus on rabbit ears has no support whatever in engineering principles. In addition, other factors which would mitigate against the reception of an acceptable quality signal at a distance of 80 miles are the probable fading of the signal and possible co-channel interference from other stations. Co-channel stations are located at Augusta, Ga., and Jacksonville, Fla.

n31 As the evidence shows, the Columbus VHF stations are located generally to the east or southeast of Columbus in a direction opposite to that of the proposed station. Accordingly, any orientation of existing VHF receiving antennas are undoubtedly toward the local VHF stations, and hence, would discriminate against the WSFA-TV signal. Thus, under these circumstances any possible reception of the WSFA-TV signal would require the antennas to be reoriented toward WSFA-TV with a resulting degradation of the local signals.

20. While we do not necessarily agree with all aspects of Cosmos' argument that WYEA-TV's signal would be dominant in most of the grade B overlap area, n32 we do agree that the distance of Columbus from the WSFA-TV transmitter site, and the attendant consequences of that distance, cannot be overlooked in determining the outcome of the UHF impact issue. Cf. Video Service Company, 20 F.C.C. 2d 676, 18 R.R. 2d 40 (1969). In view of the distance of Columbus from the Grady site, we believe that most of the people in the Columbus area would tend to watch the local UHF station rather than the distant VHF station. This is so for three basic reasons: First, community interests and loyalties would encourage people in the Columbus area to view the local city grade or grade A signal of the local Columbus station; second, since Columbus is on the fringe of WSFA-TV's proposed grade B contour, it is "highly improbable," as the examiner concluded, "that persons on the fringe area of the grade B signal from (WSFA-TV) would be content to view a picture of inferior quality when a much superior picture could be obtained from WYEA-TV, inasmuch as the latter station's grade A signal predominates in most of said area." "Initial Decision," 15 R.R. 2d at 594. Consequently, [*743] the signals of the two stations in question, not being of equal strength in a crucial portion of the overlap area, n33 the certain basic absolutes in the UHF-VHF relationship upon which Gala relies do not apply with the force that they did in the WLCY and Central Coast cases, supra, where different sets of facts indicated serious danger to the respective UHF stations involved. Cf. WHAS, Inc. (WHAS-TV), supra. Finally, Grisham overlooked the important factor of UHF conversion in making his prediction; and the undisputed evidence submitted by Coastal indicates that by the end of 1973 approximately 93 percent of all television receivers in Columbus will be capable of receiving UHF signals, with or without the activation of a network affiliated UHF station. See also note 32, supra. Thus, WYEA-TV's chances for survival, with or without WSFA-TV operating as proposed, are much greater than Gala would have us believe. As the Commission stated in its recent report and order adding a VHF television broadcast channel to Mount Vernon, Ill.: "[Circumstances] have changed with the passage of over 7 years since enactment of the all channel receiver law, and over 5 years since our rules implementing it became effective (April 30, 1964). Receivers with UHF capability are now in widespread use, their purchase being spurred by increased interest in color TV and thus purchase of new sets." TV Table of Assignments, docket No. 18453, F.C.C. 2d at , 17 R.R. 2d at 1630. Therefore, while UHF impact continues to be of "substantial concern" to the Commission, not "every UHF station or potential station" "must" be insulated "from any possible small wind of VHF IMPACT." @T -- Table of Assignments, supra.

n32 Thus, we are award of the present disparity in the ease of tuning VHF and UHF channels on today's television sets, as pointed out by respondents in their reply brief. However, the Commission recently ordered that, after May 1, 1971, all television receivers delivering pictures larger than 9 inches measured diagonally must have comparable UHF and VHF tuning capabilities. Sets with pictures smaller than 9 inches must have comparable tuning capabilities after May 1, 1973. "Report and Order, All-Channel Television Broadcast Receivers," F.C.C. 70-113, released February 2, 1970, F.C.C. 2d , 35 E.R. 2660. Furthermore, where as here, a UHF signal is of city grade or grade A quality and a competing VHF signal is of grade B quality or less, the significance of the disparity in ease of tuning diminishes substantially and other factors (e.g., community loyalty) predominate in the competitive relationship.

n33 The Columbus area is the most populous segment of Cosmos' proposed gain area.

21. Next, the Board agrees with the examiner that the two reports prepared in 1967 for Coastal by Spindletop Research, Inc., contain serious deficiencies which make them unreliable. "Initial Decision," 15 R.R. 2d at 594. The reports allegedly show that the NBC affiliated UHF station in Columbus would be seriously jeopardized by the WSFA-TV move. In the examiner's view, both reports were amply rebutted (initial decision, supra) by two of Cosmos' expert witnesses. We agree. Clay's estimate of an 8.6-percent audience loss for the Columbus network affiliated UHF station should WSFA-TV operate as proposed appears to be more realistic than Spindletop's estimate of a 23-percent loss. Although Clay admits that the VHF transmitter move would result in some loss of audience by the UHF station, the loss would not be serious or fatal since Clay also estimates a higher potential audience and, hence, higher potential revenues for the UHF station than does Spindletop. The end result, in Clay's view, would be a profitable operation by the Columbus UHF station even if WSFA-TV operates as proposed.

22. The first Spindletop report (report 621, "The Viability and Growth of a UHF Station in Columbus, Georgia") was prepared in the spring of 1967 by Dr. Robert Porter of Spindletop without knowledge or expectation of the Cosmos application. The stated purpose of the report was to "determine station audience and revenues for the first years of operation of a new UHF station to be affiliated with [*744] NBC and located at Columbus, Ga." The following factors were analyzed in the report: Population growth, increase in UHF receiving capability, expected audience, and corresponding expected revenues. In addition, certain test UHF stations in other markets were examined to determine the Columbus station's growth potential. The report concluded that by mid-1968 there would be 73,500 television homes in the proposed station's grade A contour and 97,000 homes in the grade B contour, and by 1972, there would be 84,200 such homes in the grade A contour, and 106,000 homes in the grade B contour; and that, with the projected potential UHF audience, the new station could be expected to have revenues of $308,000 for the first full year of operation and annual revenues of $462,000 by 1973. Spindletop expects UHF penetration in Columbus to reach 68 percent by mid-1968 and 93 percent by 1973.

23. In his rebuttal to Spindletop report 621, Clay utilizes an engineering report prepared for Cosmos by Lohnes and Culver, and challenges the adequacy of Spindletop's methods for making its audience and revenue projections. Clay correctly notes that Spindletop's audience and revenue projections were based on rough approximations and not on any engineering data, such as station contours, population, and other technical matters capable of definitive determination. Likewise, the audience projections for UHF stations in supposedly comparable markets were not made on the basis of specific data, but were arrived at on the basis of data gleaned from "Television Factbook." Spindletop neither researched nor utilized the Commission's official files to determine the location of predicted contours in the test markets. In contrast to Spindletop's rough audience projections, Clay's audience projections for Columbus are based on the distribution of Population according to minor civil divisions. The difference between the projection methods is reflected in the estimates of the UHF station's potential television homes, with Clay's estimate of such homes, and therefore the station's potential audience, necessarily being greater than Spindletop's. Consequently, Clay arrives at a higher estimate of potential revenues for the UHF station than does Spindletop. Clay estimates revenues of $433,000 to $544,000 in the first year of operation, and $649,000 to $817,000 3 years later. Significantly, neither Clay nor Spindletop sought to show the revenue level needed for a UHF NBC affiliate in Columbus to break even. Therefore, from the evidence available, it is impossible to determine the potential viability of the Columbus UHF; and, with this major deficiency, Spindletop report 621 fails as a means of proof under the impact issue.

24. Spindletop report 625, entitled "Effects of Competition on a UHF Station in Columbus, Ga.," was prepared in the fall of 1967 expressly for the hearing in this proceeding. The stated purpose of the report was to establish the effects of WSFA-TV's proposed move on a UHF NBC affiliate in Columbus. In making this assessment, Dr. Porter relied on two assumptions: (1) That the WSFA-TV signal in the Columbus market would be as indicated in the amended Cosmos applications; and (2) that the Columbus UHF station, then Coastal's WTRT-TV) will be successful in obtaining an NBC affiliation. Report 625 seeks to estimate the UHF station's audience loss in each of the [*745] counties in its market by examining the relative signal strengths of the "U" and the "V" both before and after the WSFA-TV move. To do this, the counties in the overlapping service areas of the UHF station and WSFA-TV were classified according to signal strength. n34 In order to arrive at the proper weight to assign each of the classifications, Dr. Porter studied 20 markets with established UHF network-affiliated stations competing with a VHF station of the same network affiliation. Each county in the selected markets was classified with the signal strength of the local UHF station and the VHF station of the same affiliation, respectively. The UHF station audience share (ARB's percentage of total hours viewed, average week) was listed for each county under its appropriate signal classification. These share figures were then arithmetically averaged for each classification of counties. The weights were then applied to the 12 Georgia and Alabama counties in the Columbus market as they would be classified before and after the WSFA-TV move. The net result for all the affected counties was a 23-percent reduction in the total potential audience for the prospective Columbus UHF station. Spindletop translated this 23-percent audience loss into a 23-percent loss of revenue.

n34 The report uses the following classifications: A -- grade A signal; B -- grade B signal; and / -- beyond grade B contour. Thus, A/O means within the grade A contour of a specified station and beyond the grade B contour of a second specified station. For example, before the proposed move, the Columbus UHF station's home county of Muscogee received a grade A signal from the local UHF station and is outside the grade B signal of WSFA-TV (A/O); after the move, however, Muscogee County receives a grade A signal from the local UHF station, but part of the county, including most of Columbus, will receive a grade B signal from WSFA-TV (A/B). Likewise, Russell County, Ala., would change from A/O to A/B as a result of the move.

25. As Clay points out in his rebuttal to Spindletop report 625, there are three fundamental flaws in the procedures followed by Spindletop, rendering the entire report inadequate. First, the audience share figures used by Spindletop represent the share of the entire market audience, instead of the share of the network audience for one particular network in the county under study. In other words, the Spindletop approach does not eliminate the factor of competition (or lack of competition) for audience coming from other network and independent stations. Thus, it does not confine itself, as it should, to a consideration of only the audience to one particular network's affiliates in a given locale. See Cosmos exhibit 16. Second, Spindletop's choice of UHF stations supposedly analogous to the Columbus situation includes stations in both single-station and two-station markets; stations in markets having other stations affiliated with the same network; and one station which is practically in the suburb of a major city which is, itself, a large VHF market. This is clearly inadequate. Third, in using the UHF audience ratings, Spindletop erroneously assumed that all counties were equally saturated with UHF television receivers. The record evidence shows that the percentage of UHF saturation varies greatly from market to market. In conclusion, Clay estimates that the total loss for the Columbus UHF station would be between 8 and 9 percent of its potential audience, and not 23 percent, as estimated by Spindletop report 625.

26. In our opinion, with an 8- or 9-percent audience loss, it is doubtful that station WYEA-TV would be seriously impaired or jeopardized by the WSFA-TV move, especially in view of its total audience [*746] and revenue potential. In this connection, it is significant that WYEA-TV would be providing the only locally originated full-time NBC network television service in Columbus and vicinity. See paragraphs 19 and 20, supra. Compare Central Coast Television (KCOY-TV), supra. This factor would, in our opinion, greatly enhance the future success of station WYEA-TV even if the Cosmos application is granted. Cf. TV Table of Assignments, docket No. 18390, supra, 17 F.C.C. 2d at 423-424, 15 R.R. 2d at 1606-1607.

27. In sum, the Cosmos proposal would result in significant service gains -- and no losses -- to the viewing public in the State of Alabama. Furthermore, there is no convincing evidence showing that there would be significant adverse impact on UHF television service anywhere in WSFA-TV's proposed service area. Gala's and Coastal's evidence purporting to show serious impairment of UHF television service in Alabama and Georgia should Cosmos' application be granted was inadequate, standing alone, and was further discredited by Cosmos' rebuttal showing. Under these circumstances, the Board must conclude that the respondents did not meet the burdens assigned them under the impact issue, and therefore that the issue must be resolved in favor of the applicant.

The Suburban Issue

28. WSFA-TV's proposed grade B gain area would encompass 294,400 persons in 7,350 square miles in the States of Alabama, Georgia, and Florida. The bulk of the grade B gain area lies to the east and southeast of Montgomery and includes several eastern Alabama communities and most of the Columbus, Ga., urbanized area. Approximately 1 year before filing the Union Springs application, Cosmos made a series of spot checks and monitors in the eastern Alabama communities of Phoenix City and Eufaula (combined population 35,987), and determined therefore that residents in the area were not receiving sufficient Alabama news coverage. However, aside from spot checks and monitors, no survey of the gain area was made by the applicant before the Union Springs application was filed on October 11, 1965. In fact, the record shows that Cosmos' original program proposal, filed with the Union Springs application, was not changed in any respect, either in June 1967, in connection with the Grady amendment, or afterward, as a consequence of the applicant's three post-filing program contacts in January 1966, April 1967, and September 1967. In sum, the record shows that over a period of 1 1/2 years, Cosmos contacted 37 civic and community leaders in 13 Alabama and two Georgia communities and received 47 replies to program questionnaires mailed to 92 Alabama community leaders.

29. In January 1966, Sam Spivey, then operations director and program manager of WSFA-TV, contacted 18 persons, all of them community leaders, in four Alabama and two Georgia communities. n35 Among those contacted were: Five mayors, four educators, three Protestant clergymen, four members of local chambers of commerce, one [*747] commissioner of public works, and the public information officer of Fort Benning, Ga. All those contacted were white males. Spivey's notes, which were introduced into evidence at the hearing to substantiate that the visits were made, reveal that the January 1966, contacts concentrated primarily on television programming and television reception in the six communities surveyed, with emphasis on WSFA-TV's coverage of Alabama news and public affairs. The April 1967, program contacts were made by Dixon Lovvorn, WSFA-TV's program and public relations director, pursuant to the instructions of Bob Villar, WSFA-TV's general manager. Although Lovvorn was instructed in regard to the type of person to interview, n36 no specific names were supplied to him and no appointments were made in advance of his visits. In all, 21 community leaders in 12 Alabama communities n37 were interviewed including nine mayors, three civic leaders, one Protestant clergyman, two educators, three county agents, one postal official, one city clerk, and one farm agent. n38 All those interviewed were white males, except for the farm agent who was a Negro, but who was interviewed in his capacity as a farm agent and not in anyway as a spokesman for the Negroes of his community. As a followup to the April 1967, program contacts, Cosmos, in September 1967, mailed program questionnaires to 92 community leaders residing in 13 Alabama communities in the grade B gain area. n39 The seven-question program questionnaire was prepared by Lovvorn, who testified that he has no background or experience in survey techniques. The mailing list for the followup survey was made up of individuals previously interviewed plus names supplied by local chambers of commerce. With regard to the names supplied by the chambers of commerce, in some cases the businesses or occupations of the individuals were supplied and, in other cases, they were merely described as prominent businessmen. So far as Lovvorn knew, no Negro was included in the September 1967, questionnaire mailing list. Although 47 persons responded to the questionnaires, the identity of those responding is unknown since Cosmos did not require people to sign their responses. The form of some of the questions tended to encourage affirmative answers; n40 and, according to Cosmos, there were few responses to one question which asked if there were any issues and problems concerning the individual's community to which television should devote attention.

n35 The communities surveyed were Alexander City, Lanett, Phoenix City, and Dothan (all in Alabama), and Fort Benning and Cuthbert (both in Georgia).

n36 By memorandum, Villar instructed Lovvorn to visit several Alabama communities in the grade B gain area and "to contact the four community leaders in each one * * * [including] the mayor or some other political leaders * * * one educator * * *, a county agent and [a] religious leader." Villar's five-point guide for Lovvorn is quoted in full at para. 67 of the "Initial Decision," 15 R.R. 2d at 587-588. According to Villar, the objective of the survey was to ascertain community needs and how WSFA-TV could serve those needs.

n37 The communities surveyed in April 1967, were: Goodwater, Alexander City, Lafayette, Opelika, Phoenix City, Eufaula, Abbeville, Dothan, Geneva, Florala, Monroeville, and Marion.

n38 Two of those interviewed were also contacted by Sam Spivey in January 1966.

n39 The communities selected for this survey were: Alexander City, Lanett, Lafayette, Opelika, Florala, Eufaula, Dothan, Geneva, Phoenix City, Goodwater, Abbeville, Marion, and Monroeville. See note 37, supra.

n40 E.g., "Do you believe that your community has a need for and interest in [WSFA-TV's news and informational programming]?"

30. Finally, in addition to relying on its three formal program contacts, Cosmos also relies on the following factors in support of its ascertainment efforts in and proposed programming for the gain area: [*748] (1) The area familiar to WSFA-TV's general manager, Bob Villar; (2) the testimony of two area Congressmen; and (3) WSFA-TV's programming and ascertainment techniques for its present service area. The applicant argues that this evidence shows that the gain area is nearly identical to WSFA-TV's present grade B service area, and that there is a need for Alabama-oriented news programming in the gain area. It is WSFA-TV's position in this proceeding that it will meet this need through its existing programming service. In this regard, the record evidence shows that Cosmos has made no specific plans for meeting those needs and interests of the gain area which it ascertained. Rather, Cosmos intends to "incorporate the needs and interest of the gain area into [WSFA-TV's] present programming structure." However, the station's general manager testified at the hearing that Cosmos would not consider any changes in WSFA-TV's present programming until after a grant of its instant application.

31. In their proposed findings and conclusions, respondents and the Broadcast Bureau contended that Cosmos failed to sustain its burden of proof under the Suburban issue. The hearing examiner resolved the Suburban issue in Cosmos' favor, however, concluding that the applicant is aware of and will adequately meet the programming tastes, needs, and interests of its proposed service area. In reaching this result, the examiner relied on the following determinations: (1) That "Cosmos has operated WSFA-TV for the past 9 years and is presently serving over half a million persons with satisfactory programming"; (2) that "the proposed gain area is contiguous to [WSFA-TV's] present service area, and * * * is composed of the same kind of communities and rural areas that WSFA-TV presently serves"; (3) that "Cosmos does not intend to provide programming to serve Columbus and Georgia"; (4) "that Cosmos should not be held to the stringent standards of Minshall [ Broadcasting Company, 11 F.C.C. 2d 796, 12 R.R. 2d 502 (1968)] because to do so would require an application of the doctrine in retrospect and would be extremely disruptive of hearing procedures"; (5) that WSFA-TV's proposed grade B coverage of portions of Georgia and Florida is merely incidental to the applicant's primary intention of serving people in eastern Alabama; and (6) that due to the similarity between WSFA-TV's present and proposed service areas, "Cosmos was justified in deciding that its planned programming did not necessitate a change, and that such programming was sufficiently flexible and diversified to serve the needs of the gain area." With respect to the applicant's conceded failure to ascertain the needs and interests of Negroes who constitute 35 to 40 percent of the population in the gain area, the examiner concluded that "Cosmos is aware of the problems that are embraced in the Negro problem, not only in the State of Alabama, but in the entire United States"; and that Cosmos is concerned with such problems. The examiner further concluded that respondents failed to establish the existence of Negro needs as distinguished from white needs. In his view, "it would be procedurally defective to require Cosmos to rebut a presumption that has not been established in the record." Finally, [*749] the admitted failure of Cosmos to include rural areas in its program contacts, even though the gain area is largely rural, was excused by the examiner on the ground that "the gain area is contiguous to, and very similar to, [WSFA-TV's] present service area. * * *" We disagree with the examiner's ultimate conclusion and with the several determinations upon which that conclusion is based.

32. First, we disagree with the examiner that it "would be extremely disruptive of hearing procedures" to apply the stringent standards of the Minshall case to Cosmos' Suburban showing. In our opinion, the so-called Minshall standards clearly apply to the Suburban showing in this case, and their application would not have disrupted the hearing. Minshall was released on February 28, 1968, while the hearing in this proceeding was in progress. At that time, Cosmos had already submitted its evidence and presented its case under the Suburban issue. However, Minshall was not an innovation in communications law; it was merely a restatement of the Commission's fundamental policy concerning the ascertainment of community needs by broadcast applicants. See Sioux Empire Broadcasting Co., 16 F.C.C. 2d 995, 998, 15 R.R. 2d 961, 966 (1969). See also Southern Minnesota Supply Company (KYSM), 18 F.C.C 2d 824, 826, 16 R.R. 2d 950, 953 (1969), review denied F.C.C 70-99, released January 30, 1970. The four basic steps expected to be followed by applicants in ascertaining needs, listed by the Commission in Minshall, n41 are also set forth in essentially the same language at paragraph 13 of the Commission's report and order on television program forms, which was released on October 10, 1966, 1 month before Cosmos' Union Springs application was designated for hearing. Amendment of Section IV (Statement of Program Service) of Broadcast Application Forms (Television Program Form), 5 F.C.C. 2d 175, 178, 8 R.R. 2d 1512, 1517 (1966). Significantly, the Commission in Minshall cited the "Report and Order," 11 F.C.C. 2d at 797, 12 R.R. 2d at 503. The revised program form became effective on December 1, 1966, before the Grady amendment was filed on June 13, 1967. Cosmos was not required to amend its program proposal along with its site amendment because it was seeking a major change in facilities and was not proposing "a substantial change in programming.? 5 F.C.C 2d at 177, 8 R.R. 2d at 1517. Nevertheless, the fact that Cosmos filed its original application prior to the revision of the television program form does not relieve the applicant of meeting the established standards for ascertainment of needs set forth in Minshall and in the earlier "Report and Order." Risner Broadcasting, Inc., 13 F.C.C. 2d 781, 783, 13 R.R. 2d 912, 916 (1968). In view of all the foregoing circumstances, the Board believes that the Minshall standards apply in this case and that a remand of the Cosmos application, as [*750] the applicant requests, would be inappropriate. n42 See Heart of Georgia Broadcasting Company, Inc., 19 F.C.C. 2d 20, 29-31, 16 R.R. 2d 1134, 1145-1148 (1969), review denied F.C.C. 70 , released February , 1970; Southern Minnesota Supply Company (KYSM), supra, 18 F.C.C. 2d at 829, 16 R.R. 2d at 956. In this regard, it is noted that two of Cosmos' program surveys were conducted after the release of the report and order on the television program form, and the initial decision herein was released almost 1 year after the release of the Minshall opinion. Compare Sioux Empire Broadcasting Co., supra.

n41 The four basic steps are:

(1) Full information on steps taken to become informed of the real needs and interests of the area to be served;

(2) Suggestions received as to how the proposed station could help meet the area's needs;

(3) Evaluations of suggestions; and

(4) Programming proposed to meet the ascertained needs as they have been evaluated. See Public Notice re Ascertainment of Community Needs by Broadcast Applicants, F.C.C. 68-847, 33 F.R. 12113, 13 R.R. 2d 1903, released Aug. 22, 1968.

n42 In its reply brief, Cosmos argues that if its application cannot be granted on the basis of the present hearing record, that "this case * * * be remanded for the same reasons expressed in Sioux Empire [supra]." The Board notes that in two recent opinions the Commission permitted two broadcast applicants to amend their Suburban showings prior to initial decision to conform to the principles set forth in City of Camden, 18 F.C.C. 2d 412, 16 R.R. 2d 555 (1969) and in the Commission's "Primer" on ascertainment on community problems (see note 43, infra). Mace Broadcasting Co., F.C.C. 70-155, released Feb. 20, 1970, F.C.C. 2d ; Community Broadcasting Company of Hartsville, F.C.C. 70-157, released Feb. 20, 1970, F.C.C. 2d . The action was taken by the Commission in light of the alleged confusion engendered by Camden and the Primer. Cosmos' Suburban showing is deficient in several respects, and the applicant had notice of some of the deficiencies from the designation order (November 1966) and the remainder from precedent released prior to the close of the hearing record (July 1968). Finally, Cosmos did not seek to amend its Suburban showing to conform to Minshall, even though Minshall was released during the course of the hearing, until it filed its reply to the exceptions to the initial decision (June 1969). Under these circumstances, these two Commission actions do not support a remand here.

33. Furthermore, the fact that Cosmos proposes an extension of WSFA-TV's existing program service into an area shown to be contiguous and similar to the station's present service area does not relieve the applicant of its obligation to make an adequate survey of the needs of the station's proposed service area. City of Camden, supra, 18 F.C.C 2d at 420, 16 R.R. 2d at 567; WLVA, Inc., 15 F.C.C. 2d 757, 763, 15 R.R. 2d 105, 112 (1968); South Carolina Education Television Commission (WITV), 20 F.C.C. 2d 342, 17 R.R. 2d 772 (1969). Thus, where an applicant, such as Cosmos, seeks to improve its existing facilities in order to serve a substantial amount of new area or population, the fact that the gain area is shown to be contiguous and essentially similar to the present service area is not determinative of whether the programming proposal is responsive to the needs and interests of the new service area. See Norristown Broadcasting Company, Inc., 18 F.C.C. 2d 56, 59, 16 R.R. 2d 421, 425-426 (1969). As the Commission stated in 1966 in the order designating the instant Cosmos application for hearing: "It is well established that where an applicant proposes to provide service to new areas, the applicant is required to demonstrate that it has made sufficient efforts to ascertain the programming needs and interests of those areas." 5 F.C.C. 2d at 694, 8 R.R. 2d at 981, citing Wometco Enterprises, Inc. v. FCC, 114 U.S. App. D.C. 261, 314 F. 2d 266, 24 R.R. 2072 (1963). Even though the efforts to ascertain the needs and interests of the outlying areas need not be as extensive as for the principal city, nevertheless an adequate survey including a fair cross section of the residents and community leaders in the gain area is required. See South Carolina Educational Television Commission (WITV), supra, 20 F.C.C.2d at 345, 17 R.R. 2d at 777; Long Island Video, Inc., 14 F.C.C. 2d 327, 14 R.R. 2d 466 (1968); City of New York Municipal Broadcasting System (WNYC), 11 F.C.C. 2d 287, 12 R.R. 2d 189 (1968). Cf. WKYR, Inc. (WKYR), 3 F.C.C. 2d 132, 144, [*751] 3 R.R. 2d 1, 17 (1964), review denied F.C.C. 64-984, affirmed sub nom. Allegany County Broadcasting Corp. v. FCC, 121 U.S. App. D.C. 166, 348 F. 2d 778, 5 R.R. 2d 2067 (1965). Cosmos' burden of proof under the Suburban issue in this proceeding must be measured against this general standard of adequacy and sufficiency.

34. With respect to the merits of Cosmos' showing, it is our opinion that Cosmos failed to sustain its burden of proof under the Suburban issue. In short, a review of the record evidence shows that the applicant's investigation of the gain area was not careful, and that the results obtained were not meaningful. City of Camden, supra, 18 F.C.C. 2d at 420, 16 R.R. 2d at 567. There are four basic deficiencies in Cosmos' Suburban showing. First, Cosmos did not show on the record that it surveyed the general listening public in any of the communities within WSFA-TV's proposed service area. See Southern Minnesota Supply Company (KYSM), supra. Although the applicant maintains in one of its hearing exhibits that numerous individual residents in the gain area were contacted by Cosmos' representatives in January 1966, and in April 1967 (Cosmos exhibit 3, app. B), neither the number of people contacted nor the length of the alleged conversations nor the suggestions received (if any) are in the hearing record. Thus, the record evidence is limited to a select group of community leaders in a number of Alabama communities. This is clearly inadequate to meet the well established requirements of the Commission's Suburban policy. See Vernon Broadcasting Co., 12 F.C.C. 2d 946, 950-951, 13 R.R. 2d 245, 251-252 (1968). (Vernon, which couched in very precise language, was released on May 22, 1968, while the hearing in this proceeding was still in progress.) The failure of Cosmos, an experienced broadcaster, to document its alleged survey of the general listening public in any of the communities it proposes to serve is significant since it has long been held that the survey sample must cover both the general listening public and community leaders. See South Carolina Educational Television Commission, supra, 20 F.C.C 2d at 346, 17 R.R. 2d at 777; Heart of Georgia Broadcasting Company, Inc., supra, 19 F.C.C. 2d at 28, 16 R.R. 2d at 1144, and cases cited therein. In its 1960 En Banc Programming Inquiry, released 6 years before the Cosmos application was designated for hearing, the Commission proposed "documented program submissions prepared as the result of assiduous planning and consultation covering two main areas: First, a canvass of the listening public who will receive the signal and who constitute a definite public interest figure; second, consultation with leaders in community life. * * *" Report and Statement of Policy Re: Commission En Banc Programming Inquiry, 25 F.R. 7291, 7296, 20 R.R. 1901, 1915 (1960). See Amendment of Section IV (Television Program Form), supra, 5 F.C.C. 2d at 178, 8 R.R. 2d at 1517. The fact that Cosmos is seeking an improvement of facilities rather than a new broadcast facility does not permit the applicant to completely ignore the requirement or excuse it from any attempt to comply.

35. Second, Cosmos did not, as required by Commission policy, consult with a representative range of groups, leaders, and individuals in community lige * * * to give [it] a better basis for determining the total needs of the proposed service area. City of Camden, supra, 18 [*752] F.C.C. 2d at 420, 16 R.R. 2d at 566. n43 The applicant's survey of community leaders was inadequate in several respects. Thus, the record shows that in some communities, only one community leader was contacted, and that in others, only two were contacted. The largest number of leaders surveyed (six) was in Dothan, In one of the communities which the applicant proposes to serve for the first time was anything resembling a cross-section of any communities contacted. Nor could it be held that Cosmos attempted to survey a cross-section of its entire proposed new service area. While the Commission does not play a numbers game with respect to community leader surveys, a representative cross-section of informed community opinion must be made. Vernon Broadcasting Co., supra, 12 F.C.C. 2d at 951, 13 R.R. 2d at 252. See Martin Lake Broadcasting Company, 21 F.C.C. 2d 180, 18 R.R. 2d 245 (1970). It is clear that Cosmos did not comply with this requirement. For example, of those contacted, substantially all were representative, although in limited number, of the fields of government, business, religion, n44 education, and agriculture. The most conspicuous omission from the applicant's surveys is its failure to contact Negroes who comprise approximately 40 percent of the population in WSFA-TV's grade B gain area. The applicant concedes that it "made no special effort to ascertain the needs of the Negro community in the gain area." In fact, no Negroes were consulted on the subject of their needs and interests. When questioned at the hearing regarding Cosmos' failure to ascertain the needs of this large group of people, Dixon Lovvorn, WSFA-TV's program and public relations director, testified that Cosmos regards the needs and interests of the Negro and white communities of Montgomery and the surrounding rural area to be basically the same and that station WSFA-TV's programming is responsive to both communities. According to Lovvorn, the basis of this belief is the continuing contacts made in the community (i.e., Montgomery) and the mail and telephone calls received by WSFA-TV concerning programming. However, Lovvorn admitted that, for the most part, the correspondents and callers do not identify themselves as black or white, and that the primary purpose of groups, such as the Red Cross, with which the station maintains continuous contact is not racial at all. Lovvorn testified that Cosmos is aware of the special problems faced by "the poor economic classes of [the] area, both Negro and whites" and that WSFA-TV (directs) programs to those people; however, neither the special problems nor the programs were specified. In further defining the applicant's position on the alleged homogeneity of needs and interests of WSFA-TV's present and proposed service areas, Villar testified that it is the station's "policy to serve the whole community * * * to give coverage to the entire community."

n43 This principle is consistent with the Commission's recent notice of inquiry concerning the Ascertainment of Community Problems by Broadcast Applicants, 20 F.C.C. 2d 880, 34 F.R. 20282 (1969).

n44 Only four white Protestant clergymen were contacted. This deficiency is especially noteworthy since Negroes comprise approximately 40 percent of the population in WSFA-TV's grade B gain area. See Capitol Broadcasting Co., 38 F.C.C. 1135, 1139, 5 R.R. 2d 231, 236 (1965).

36. In our opinion, it was improper for the examiner to impose upon respondents the burden of proving the existence of particular Negro needs in the gain area. (See para. 26 of the examiner's conclusions, [*753] 15 R.R. 2d at 598.) Rather the burden was on Cosmos to show that it was aware of the needs and interests of the people living in the gain area and that it would program to meet those needs and interests. In this regard, a broadcast licensee may not assume that the particular needs, interests, and problems of its white and black audiences are the same. See Capitol Broadcasting Co., supra. n45 See also Washington Broadcasting Co., 1 F.C.C. 2d 25, 26, 5 R.R. 2d 653, 655 (1965). Cf. Nondiscrimination Employment Practices of Broadcast Licensees, 18 F.C.C. 2d 240, 16 R.R. 2d 1561 (1969). Cosmos' admitted failure to undertake to ascertain the special needs of Negroes in the gain area is not cured by the applicant's past operation of WSFA-TV. Cf. South Carolina Educational Television Commission (WITV), supra. Even if the record showed that WSFA-TV is aware of and responsive to Negro needs in its present service area, that would be insufficient to show awareness of the special needs of Negroes in the gain area. City of Camden, supra. Cf. Washington Broadcasting Co., supra. In any event, the record evidence does not support the examiner's conclusion that Cosmos is presently "aware of the problems that are embraced in the Negro problem," and that its programming reflects this awareness. The fact is that WSFA-TV proposes to extend its television service into parts of Alabama, north, south, east, and west of Montgomery, and into parts of Georgia and Florida not now served by that station. The record shows that Cosmos has not undertaken to ascertain the particular needs of the Negroes in the gain area. Since Negroes comprise a substantial portion of the gain area population, Cosmos' failure in this respect must be accorded decisive weight. Capitol Broadcasting Co., supra; City of Camden, supra. See Santa Fe Television, Inc., 18 F.C.C. 2d 741, 744, 16 R.R. 2d 934, 938 (1969); Click Broadcasting Co., 19 F.C.C. 2d 497, 503, 17 R.R. 2d 164, 172 (1969).

n45 In Capitol Broadcasting the Commission held as follows with respect to the required ascertainment of needs of Negroes in a broadcaster's service area: regarded Jackson as two communities, one white and one Negro; that rather it has

"The applicant urges that it has never designed its programming so as to be of interest to the entire area. There is no requirement that a licensee divide his programming so that, in Jackson for example, 55 percent would be of interest to the white community and 45 percent to the Negro, and more than there is a requirement that each minority group (e.g., Irish, Jewish, Polish, etc.) be afforded a specified portion of a Chicago TV station's time, proportionate to the group's percentage of the total Chicago population. Such a pattern of operation would be "broadcast segregation." Further, it would be based upon the false premise that network or local programming of general interest does not serve the needs and interests of the Negro or some other minority group.

"But the applicant is incorrect in its assertion that the foregoing consideration is dispositive of the petitioners' contentions. A licensee's programming must be designed in good faith to serve his area. Thus, if a licensee had one rotating church program and never presented Negro churches even though they represented half the churches or population in the area, the obvious question is presented whether the licensee is seeking in good faith to serve his area's needs or simply following or acquiescing in a deliberate exclusionary pattern. The same consideration would be true in other programming areas. If, for example, a licensee never sought to ascertain or serve the needs of predominantly Negro colleges in this area -- even though there were a large number of such colleges -- the question is presented whether the licensee can be said to be equitably and in good faith meeting his obligations under the public interest standard." See Report and Statement of Policy Re: Commission's En Banc Programming Inquiry, 20 Pike and Fischer, R.R. 1901. [ 38 F.C.C. at 1139, 5 R.R. 2d at 236.]

Capitol Broadcasting was released on May 20, 1965, almost 5 months before Cosmos filed its Union Springs application, and over a year and a half before the Cosmos application was designated for hearing. See paragraph 32, supa.

37. Another major deficiency in the applicant's community leader surveys is that Cosmos neglected to consult with representatives of the following groups in the gain area: Women, labor organizations, [*754] health and welfare leaders, non-Protestant religious groups, charitable organizations, social organizations, and professional groups. See Vernon Broadcasting Co., supra. Likewise, there is no indication that young people or representatives of youth groups were consulted. See Southern Minnesota Supply Company (KYSM), supra, 18 F.C.C. 2d at 827, 16 R.R. 2d at 954. This is clearly inadequate, even though Cosmos is only seeking to expand its existing facilities, rather than operate a new station. See paragraph 30, supra. Moreover, although the applicant's own evidence shows that the gain area is predominantly rural, no rural contacts were made. "The Commission has long held that a broadcast licensee is obligated to serve his entire service area, and not just his city of license * * *. Legally and logically implicit in this obligation to serve the entire service area is the obligation to survey the needs and interests of that area." Southern Minnesota Supply Company (KYSM), supra, 18 F.C.C. 2d at 825, 16 R.R. 2d at 952. See Petersburg Television Corp., 19 F.C.C. 451, 10 R.R. 567, reconsideration denied 10 R.R. 5840 (1954); Heart of Georgia Broadcasting Company, Inc., supra, 19 F.C.C. 2d at 27, 16 R.R. 2d at 1143. Since WSFA-TV's programming must be designed to meet the needs and interests of all areas to be served by the station, Cosmos' failure to make meaningful ascertainment efforts in the gain area is a significant deficiency warranting denial of the application. Cf. Southern Minnesota Supply Company (KYSM), supra.

38. Third, Cosmos' three survey efforts failed to elicit substantive suggestions concerning the needs and interests of the gain area. In its surveys, Cosmos concentrated almost exclusively on program preferences rather than community problems. This is clearly inadequate under established standards (see e.g., Minshall Broadcasting Co., supra) and constitutes a major defect in the applicant's survey efforts even though Cosmos is merely seeking an improvement of existing facilities (see South Carolina Educational Television Commission (WITV), supra). The few suggestions received from the interviewees were general and cannot in any sense be characterized as meaningful reflections of area needs or problems. Underlying Cosmos' whole approach in its program surveys is an assumption, which is unsupported by the record evidence, that there is a need for WSFA-TV's present programming in the gain area. The applicant's surveys were all conducted on the basis of this assumption. In the main, then, the record shows that the applicant's surveys were "not designed to first elicit information identifying the needs of the [gain] area and then to help the applicant develop the manner in which the * * * station might help meet those needs. Moreover, in failing to obtain information concerning the needs of the [gain] area, there could have been no evaluation of the suggestions, either subjectively or objectively, and the record reflects none." Southern Minnesota Supply Company (KYSM), supra, 18 F.C.C. 2d at 829, 16 R.R. 2d at 956.

39. Finally, the applicant failed to propose any programming whatsoever to meet the needs and interests of the gain area. Again, the fact that Cosmos' primary programming and survey obligations is to its city of license and not to outlying areas does not diminish this deficiency, especially since no programming at all is proposed to meet the needs of the gain area. Since Cosmos filed its original application in [*755] October 1965, it has relied on the following basic premises to support its proposed programming for the gain area: (1) That there is an assumed need for WSFA-TV's network and local programming in most of the gain area; (2) that while no substantial changes will be made in WSFA-TV's basic programming structure, the station's news and informational programming will be expanded to include matters of interest to the gain area; and (3) that WSFA-TV's staff has had years of experience in operating the station, thus providing them with knowledge of the needs and interests of the general area. See paragraph 8 of the "Designation Order," 5 F.C.C. 2d at 693-694, 8 R.R. 2d at 981. The Commission rejected these premises as insufficient to warrant denial of a requested Suburban issue in November 1966; the Board rejected them in January 1968, when it refused to delete the Suburan issue from this proceeding (see par. 1, supra); and the Board must reject them again since they are without support on the hearing record. In 1960, the Commission specifically admonished applicants against preplanned program format submissions. En Banc Programming Inquiry, supra, 25 F.R. at 7296, 20 R.R. at 1915. In City of Camden, supra, the Commission stated that although an "applicant does not have to devote 100-percent of his programming to meeting specific [area] needs and problems * * * some significant portion of the programming must be responsive to the [area] needs as determined by the applicant in * * * his survey." 18 F.C.C. 2d at 421, 16 R.R. 2d at 568. In this case, no interests of the gain area. The applicant merely committed itself to "incorporate the needs and interests of the gain area into [WSFA-TV's] present programming structure." This is clearly unsatisfactory in view of past Commission and Review Board pronouncements. n46 In any event, Cosmos, having, in the first instance, failed to make proper survey efforts and elicit meaningful suggestions as to the needs and interests of the gain area, had no basis at all upon which to evaluate suggestions, even subjectively, and to formulate a programming proposal in response. Thus, on the basis of the applicant's showing, the Board is unable to determine whether WSFA-TV's proposed programming (which is really WSFA-TV's present programming) will be responsive to the needs and interests of the people in the proposed gain area.

n46 See City of Camden, supra; Public Notice Re: Ascertainment of Community Needs by Broadcast Applicants, supra; Minshall Broadcasting Company, supra; Amendment of Section IV (Television Program Form), supra; En Banc Programming Inquiry, supra; Heart of Georgia Broadcasting Company, Inc., supra; Southern Minnesota Supply Company (KYSM), supra.

40. In conclusion, since Cosmos failed in several respects to meet its burden of proof under the Suburban issue, a grant herein would not be in the public interest and its application for modification of facilities on VHF station WSFA-TV in Montgomery, Ala., will be denied.

41. Accordingly, It is ordered, That the application of Cosmos Broadcasting Corp. (WSFA-TV) (BPCT-3643) for a construction permit to relocate its transmitter site and to make other changes in the technical mode of operation Is denied.

DEE W. PINCOCK, Member.

 


 

APPENDIX:

 

APPENDIX

 

Rulings on Exceptions of Cosmos Broadcasting Corp. (WSFA-TV)

Exception No.

Ruling

 

1, 17, 19 (a) and (b).

 

Granted in substance. See pars. 19 and 20 of this decision. Thus, we have determined that WYEA-TV would have a distinct reception advantage over WSFA-TV in the Columbus market due to the comparative quality of the

signals being delivered by the 2 stations in Columbus and vicinity. WYEA-TV would also have the advantage over WSFA-TV of community interest and loyalty. The Columbus-Phoenix City area is the most populous segment of WSFA-TV's grade B gain area; therefore, the relative signal strengths of WSFA-TV and WYEA-TV in that area take on added significance. Altogether, the engineering evidence in the record indicates that the impact of the Cosmos proposal on WYEA-TV would be minimal. Finally, the typographical error in the last sentence of par. 28 of the examiner's findings is corrected in accordance with exceptor's request.

2

Denied as being without decisional significance. Cf. Central Coast Television (KCOY-TV), 14 F.C.C. 2d 985, 14 R.R. 2d 575 (1968), review denied sub nom Central Coast

Broadcasters, Inc. (KCOY-TV), F.C.C. 69-614, released June 9, 1969, reconsideration dismissed F.C.C. 69-840, released Aug. 1, 1969, remand denied F.C.C. 70-137, released Feb. 5, 1970.

3

Denied. The community of interest between Phoenix City, Ala., and Columbus, Ga., was clearly established on the hearing record. See tr. 977, 984-987. The examiner's finding in this regard at par. 33 of the initial decision, to which exception is taken, is clearly relevant to the UHF impact issue in this proceeding since the issue is concerned with impact on UHF television service in WSFA-TV's grade B gain area, and the "Columbus-Phoenix City market" is part of that gain area. See pars. 12-26 of this decision.

4, 15

Denied. The examiner's findings are adequately supported by the record evidence.

5

Granted. The erroneous spelling of G. Richard Shafto, president of Cosmos at the time of the hearing, is corrected. The record evidence does not support the examinter's finding at par. 35 of the initial decision that "NBC encouraged the prosecution of the WSFA-TV Union Springs application." See tr. 913. Nor does the record support the finding in the same paragraph that "total audience increase is the most important factor in a network rate increase." See tr. 942. The record shows that several factors, including total audience increase, determine whether there will be a network rate increase.

6, 7

Denied. WSFA-TV's present share of revenues in the Montgomery market is certainly relevant to the UHF impact issue. The VHF's competitive stance vis--vis those of the UHF's provides some objective basis for predicting the future for the UHF stations operating in Montgomery. See par. 10 of this decision. Cf. our ruling on Cosmos exception 3.

8, 9, 10

Granted in substance as reflected in pars. 16-20 of this decision.

11, 12, 14

Denied as being without decisional significance.

 

13, 18, 19(c)

 

Granted in substance. See pars. 19 and 20 of this decision. See also ruling on Cosmos exception 5. Ernest Cly's analysis of network rates (Cosmos exhibits 17 and 17A) also refutes respondents' contention that the Cosmos proposal would substantially diminish WYEA-TV's chances for a network rate increase.

16

Granted. The record evidence does not support the examiner's finding at par. 76 of the initial decision that Cosmos "will attempt to have its program schedules carried in the Columbus newspapers and other newspapers serving the gain area." Rather, the evidence shows that Cosmos would hope to have WSFA-TV's schedule carried in newspapers in the gain area. See tr. 90. Cosmos' Vide President, Carter Hardwick, also testified that newspaper publication "is a judgment to be left to the newspaper and its evaluation of reader demand." Id. See also par. 18 of this decision (Cosmos' plans for service to Columbus).

20, 21

Granted in substance for the reasons stated in pars. 12-26 of this decision.

22

Denied for the reasons set forth in pars. 32-39 of this decision.

 

Rulings on Joint Exceptions of WTVY, Inc., Martin Theatres of Georgia, Inc., and Eagle Broadcasting Co. to Findings of Fact

Exception No.

Ruling

 

1

Granted. See par. 6 of this decision.

 

2

Denied. See pars. 7-26 of this decision.

 

3

Denied. The examiner's finding is adequately supported by the record evidence.

4, 5

Granted to the extent that the examiner should have considered and made findings on the evidence prepared by Charles H. Smith in connection with the UHF impact issue. Denied in all other respects since Smith's study contained several deficiencies, rendering it inadequate (see pars. 10 and 11 of this decision). Smith's expert qualifications are a matter of record and need not be repeated at length in this decision or in the initial decision.

6, n1 7, 8, 9, 10, 11, 12, 13, 14.

 

Granted in part and denied in part. See pars. 8-11 of this decision.

15

Denied. The examiner makes essentially the findings requested in pars. 36 and 37 of the initial decision. The public interest benefits of the Cosmos proposal are listed in par. 6 of this decision. Respondents' exception not-withstanding, Cosmos was under no obligation to show a "need to enlarge WSFA-TV's existing dominance of the Montgomery market." Compare Television Corporation of Michigan v. FCC, 111 U.S. App. D.C. 101, 294 F. 2d 730, 21 R.R. 2107 (1961). Rather, the burden was on respondents to prove substantial adverse impact on UHF television service in WSFA-TV's proposed service area. See par. 3 of this decision.

16

Denied for the reasons stated in par. 10 of this decision.

 

17

Denied. While Grisham conducted a survey of the Columbus market, the record shows major deficiencies in the survey, rendering it inadequate as a means of proof. See par. 18 of this decision.

18

Denied. While UHF television channels are allocated to Columbus and Dothan, respondents failed to prove that these allocations would be adversely affected by the Cosmos proposal. In particular, there is no evidence in the record to support respondents' position with respect to channel 54 in Columbus, and since respondents bore the burden of proof under the impact issue, this failure of proof if fatal. In fact, the only objective evidence concerning channel 54 is Charles Grisham's un-contradicted testimony that a 4th television station in Columbus could not be successful with or without a grant of the Cosmos application. See tr. 798.

19

Denied, See par. 18 of this decision.

 

20, 32

Denied as being without decisional significance.

 

21

Granted. See pars. 22 and 23 of this decision.

 

22

Denied for the reason stated in par. 23 of this decision. With respect to Gala's estimated first year expenses, see pars. 16 and 18 of this decision. In our opinion, it would be improper to use Grisham's expense estimates for station WYEA-TV (channel 38) together with Dr. Porter's revenue estimates for station WTRT-TV (Channel) 54) in order to arrive at a break-even point for station WYEA-TV. The bases for each of the estimates was shown to be unreliable.

23

Denied. We do not believe that it would be appropriate in this case to compare the professional qualifications of the respective expert witnesses in resolving the UHF impact issue. Both Dr. Robert Porter and Mr. Ernest Clay were shown on the record to be qualified to testify on the question of UHF impact. Dr. Porter may have a more extensive formal education and more background in broadcast research than Mr. Clay; however, it is undisputed that Clay was in fact qualified at the hearing as an expert on "the analysis, evaluation and development of television audience survey data and techniques." Second, regardless of qualifications, Clay pointed to several major deficiencies in Dr. Porter's reports which, in the end, proved Dr. Porter's entire analysis of UHF impact in Columbus to be suspect. See pars. 22-25 of this decision.

24, 25, 26

Denied. See par. 25 of this decision.

 

27, 28

Denied. We have concluded on the basis of all the record evidence, that Clay's 8-percent loss estimate is more reasonable than Dr. Porter's 23 percent loss estimate. In short, the several major deficiencies in the Spindletop reports render the loss estimates contained therein suspect. Clay's estimate is more reasonable, and therefore more acceptable, because his analysis of audience and revenue losses, while far from perfect, is more scientific and careful than Dr. Porter's. See para. 22-25 of this decision. The 3 market situations alleged by respondents to be most similar to Columbus were actually shown to be dissimilar by Clay in Cosmos exhibit 16. Therefore, the 21-percent loss figure urged by respondents and derived from the 3 market average is not an accurate measure of potential impact in this case. Finally, the respondents, and not Cosmos, had the burden of proof under the UHF impact issue; and their failure of proof in regard to estimated losses for a UHF station in Columbus is decisive under the issue.

29

Denied. Respondents did not prove that the Cosmos proposal would substantial impair or jeopardize the proposed operation of channel 38 in Columbus. See pars. 12-26 of this decision. Assuming that WYEA-TV's anticipated network revenue will almost equal the line charges to A.T. & T., this fact standing alone or in concert with the other facts of record, does not constitute sufficient grounds for concluding that the Cosmos proposal would cause substantial adverse impact on WYEA-TV's entire proposed operation. In any case, WYEA-TV's line charges and starting network rate will be the same regardless of the Cosmos proposal.

30

Granted. See pars. 32 and 33 of this decision.

 

31

Granted in substance. See par. 28 of this decision.

 

33

Granted. See pars. 37 and 39 of this decision.

 

34

Granted in substance as reflected in pars. 34-39 of this decision.

 

Rulings on Joint Exceptions of WTVY, Inc., Martin Theatres of Georgia, Inc., and Eagle Broadcasting Co. to Ultimate Findings and Conclusions

Exception No.

Ruling

1

Granted. See pars. 3 and 6 of this decision.

2

Granted. The examiner's characterization of station WYEA-TV as established is erroneous. The station is authorized to operate but is not yet on the air; therefore, it is not an established station. Nevertheless, respondents failed to prove that the Cosmos proposal would prevent WYEA-TV from going on the air or that it would seriously impair or jeopardize its chances for success as a primary NBC affiliate and as the 3d televisionstation in Columbus.

3

Granted to the extent indicated in footnote 21 to this decision; denied in all other respects for the reasons stated in pars. 7-11 of this decision.

4

Denied. See ruling on respondents' exception 18 to findings of fact.

5

Denied. See pars. 19 and 20 of this decision.

6

Denied for the reasons set forth in pars. 22-25 of this decision. See also ruling on respondents' exceptions 23, 27, and 28 to findings of fact.

7

Denied. See pars. 3-27 of this decision.

8, 9, 14

Granted. See pars. 34-39 of this decision.

10

Granted. See par. 32 of this decision.

11, 12, 13

Granted. See par. 36 of this decision.

15

Granted in part and denied in part as reflected in the whole of this decision.

 

Rulings on Exceptions of the Broadcast Bureau

Exception No.

Ruling

1

Denied. The examiner's finding in par. 40 of the initial decision concerning the future of channel 54 in Columbus, is adequately supported by the record evidence. See ruling on respondents' exception 18 to the examiner's findings.

2

Denied. The record evidence is directly contrary to the Bureau's proposed additional finding. See tr. 1650-1651.

3

Granted to the extent indicated in par. 13 of this decision. Denied in all other respects as being without decisional significance.

4

Denied. The examiner's findings at par. 68 of the initial decision adequately reflect the record concerning this matter.

5

Granted. See par. 29 of this decision.

6

Granted to the extent indicated in par. 29 3f this decision. Denied in all other respects as being without decisional significance.

7, 9, 10, 15, 16,

17

 

Granted in substance. See pars. 28-39 of this decision. However, the record shows that with respect to the programming suggestions of WSFA-TV's citizens advisory committee, one programming proposal was, in fact, implemented by the station. See tr. 518.

8, 14

Denied. The examiner's conclusion is based on the record evidence. Respondents did not prove that Cosmos in-tends to actively solicit advertising revenues in the WSFA-WYEA overlap area. Cosmos' principals testified at the hearing that Cosmos does not intend to solicit local or regional advertising in the Columbus-Phoenix City area. Significantly, this area is the most populous segment of WSFA-TV's proposed gain area, and, logically speaking, would provide Cosmos with the most revenue. While no find determination has been made by Cosmos with respect to the soliciting of advertising revenue in the remainder of the verlap area, this does not, as the Bureau argues, establish an intent on the

applicant's part to do so. Compare Central Coast Television (KCOY-TV), supra, 14 F.C.C. 2d at 1002, 14 R.R.2d at 598.

11

Denied. The examiner's conclusion is based on the record evidence. See ruling on Broadcast Bureau exception 1.

12

Denied for the reasons stated in pars. 19 and 20 of this decision.

13

Denied. The Board agrees in substance with the examiner that a comparison of the network rates of the established VHF stations in Columbus with WYEA-TV's starting network rate is unwarranted. As the examiner states, "many variables * * * are involved in the development of an established television station, such as management, operating experience, community, loyalty, and others." Moreover, NBC did not consider the network rates of the Columbus VHF stations in setting the starting rate for WYEA-TV. See ruling on Broadcast Bureau exception 3.



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