In Re Application of MUSKEGON HEIGHT BROADCASTING CO., INC., MUSKEGON HEIGHTS, MICH.
For CP for new FM Station
File No. BPH-7763
FEDERAL COMMUNICATIONS COMMISSION
39 F.C.C.2d 475
RELEASE-NUMBER: FCC 73-102
JANUARY 23, 1973
[*475] MUSKEGON HEIGHTS BROADCASTING CO., INC., c/o Mr. William E. Kuiper, Post Office Box 178, Muskegon Heights, Mich.
GENTLEMEN: This is in further reference to your application (File No. BPH-7736) for a construction permit for a new FM station in Muskegon Heights, Michigan.
By letter of September 7, 1972, we stated that your proposal raised substantial questions concerning (a) the efficient utilization of FM frequencies, and (b) an undue concentration of control of aural broadcasting in the southwest quadrant of the Lower Peninsula of Michigan. We indicated therein that the 1 mV/m contour of your proposed facility would overlap the 1 mV/m contour of commonly owned station WFUR-FM, Grand Rapids, Michigan, if either station were to operate at maximum values permitted under the rules. We further noted that a grant of your application would result in the seventh broadcast facility for the principals in your corporation, i.e., four standard broadcast stations and three FM stations, all located in four communities within the same general region of Michigan. You were requested to comment on these matters.
In response to this letter, you represent that potential transmitter sites exist for both the proposed station and WFUR-FM which could be utilized at some future date and which would allow for full implementation of facilities. Maximum operating power and antenna heights above terrain could be established at these potential sites without resulting in 1 mV/m contour overlap between the stations, without creating mileage separation problems with existing stations, and which would provide principal city coverage to the respective communities of license. With respect to the question of regional concentration of control, you have shown that numerous broadcast facilities exist in the area which are owned by other interests. In 1961, an application by Muskegon Heights Broadcasting Company for a construction permit for a new AM station in Muskegon Heights was designated for hearing on issues concerning, among other things, an undue regional concentration of control of AM broadcasting. The Hearing Examiner concluded that a grant of the application would not result in an undue concentration of control of mass media. 33 FCC 2d 660 (1962). This was based, in part, on the fact that there were 15 [*476] other standard broadcast transmission services and a minimum of five and a maximum of 21 reception services in certain communities in the region. Since 1962, eight FM stations and one television station have been added to these communities. Additional stations, especially FM, have also commenced operation in other communities within the same general area and provide competition and service to those communities in which you operate stations. Furthermore, there are a number of daily and weekly newspapers serving the communities involved and CATV systems are either operating in, or planned for, Muskegon, Muskegon Heights, Grand Rapids, Kalamazoo and Dowagiac. In addition to these factors, you represent that there will be no joint advertising rates among the stations in the four communities in which you have media interests, that no more than 10-15 percent of advertisers on one station will be advertisers on the other stations, and that stations in each community will be operated and programmed independently of the stations in the other communities.
In view of the foregoing, we believe that a grant of your application is warranted without the necessity for an evidentiary hearing to determine whether the proposed operation would be an efficient utilization of the assigned frequency and/or would result in regional concentration of control of broadcast media. Accordingly, IT IS ORDERED, that your application for a new FM station at Muskegon Heights, Michigan, IS HEREBY GRANTED.
Commissioner Johnson dissenting and issuing a statement; Commissioner H. Rex Lee dissenting; Commissioner Wiley concurring in the result.
BY DIRECTION OF THE COMMISSION, BEN F. WAPLE, Secretary.
DISSENTING OPINION OF COMMISSIONER NICHOLAS JOHNSON
Last September, Messrs. William E. Kuiper, Sr. and William E. Kuiper, doing business as the Muskegon Heights Broadcasting Company, brought their application for a construction permit for a new FM station at Muskegon Heights, Michigan to the attention of this Commission.
Because the Kuipers also operate (and own 100% of) stations WKJR(AM), Muskegon Heights, WFUR and WFUR(FM), Grand Rapids, WDOW and WDOW(FM), Dowagiac, and WKPR(AM), Kalamazoo, the Commission notified the Kuipers that it intended to hold a hearing on their application, specifying an issue of undue concentration of control of mass media in the southwest quadrant of the lower peninsula of Michigan.
In addition, the Commission noted that, due to a potential overlap of contours with the Kuipers' station WFUR(FM) in Grand Rapids (which would violate our duopoly rules) the new facility at Muskegon Heights would have to be operated at something less than its maximum authorized power, thereby creating another serious question: the efficient utilization of the airwaves.
Whenever such a prehearing letter is adopted, an applicant is, of course, given the opportunity to respond with any justification he can muster for the activities or circumstances that first required a hearing. [*477] If the Commission is satisfied with his response, it can rescind its order. If any major areas of concern remain open, however, it is the Commission's responsibility to continue with plans for an evidentiary hearing.
The Kuipers' response to their prehearing letter in this instance was trivial at best, containing little more than a few comic hypotheticals and unverified opinions about the current and potential "effects" of their expanding regional control. Inexplicably, the majority today reverses its previous decision, basing its "reasoning" on that response alone. Since I search the record in vain for any justification that would obviate the need for such clarifying facts as would be gathered in an evidentiary hearing, I must dissent.
Multiple ownership and regional concentration of control should be areas of great concern in a field that combines a severely limited access with such an enormous potential for abuse. Broadcasters alone, among the various media, have virtually instantaneous access to the minds of the people of this country, either nationwide (through our radio and television networks) or in any particular city or region of influence. Despite this state of affairs, it is a sad fact that we have allowed a huge percentage of our most important media to be brought under the control of no more than a handful of large corporations. See generally N. Johnson and J. Hoak, "Media Concentration: some Observations on the United States Experience," 56 Iowa L. Rev. 267 (1970).
There are different types as well as different degrees of concentration of control of the mass media. The more common types, of course, have not been entirely ignored by this Commission. Concern for national patterns of ownership and control have led to Commission rulings on such matters as the number of television licenses that can be held by each network, the ownership by any licensee of more than seven stations of any single type (the "7-7-7" rule), the number of VHF facilities a licensee may own (5 of the 7 TV stations), or the number of television facilities in the top fifty markets.
Another type of concentration that has concerned the Commission has been of a strictly local nature, and rules and decisions have been handed down which deal with multimedia combinations in single or immediately contiguous markets, where a licensee will own a TV-AM-FM combination in a market along with the only afternoon newspaper in the county. See, e.g., Chronicle Broadcasting Co., 17 F.C.C. 2d 245 (1969).
Yet mere cognizance of these problems, and a certain degree of objectivity in some of the rules, has not prevented the Commission from ignoring or abusing the important public interest standards that should prevail on such delicate issues. Even in what should be the most obvious areas of ownership concern the Commission has done little but encourage the consolidation of media control in the hands of the wealthy and the powerful. See, e.g., the changes wrought by the new Multiple Ownership Rules, 34 F.C.C. 2d 889 (1972), in which the Commission majority, without consulting either the Justice Department's antitrust division or the House Banking Committee, gave American banks the right to increase their broadcast holdings (in a diverse variety of interests) from 1% to 5% with no apparent scrutiny of their activities. See also the Assignment of WDSU-TV to Cosmos Broadcasting Co. of Louisiana, F.C.C. 2d , P & F R.R. 2d [*478] (November, 1972), in which the 7-7-7 rules were "interpreted" to allow one individual to acquire a greater than 1% interest in his eighth VHF station and one bank to acquire a significant interest in its ninth!
A third type of media concentration -- the type involved in this case -- is even more often ignored or disregarded by the Commission majority, despite its obvious importance, because it is much less susceptible to easy quantitative analysis. Undue regional concentration can involve far fewer than the maximum "7-7-7" broadcast holdings now "allowed" individual licensees. * Unfortunately, that subtlety is lost on the majority of the members of this Commission, as they leap ever faster to grant, assign and renew licensees in cases flagrantly violative of our public trust.
* Alas, originally the "7-7-7" doctrine was meant to constitute a per se violation, not a "maximum allowable" standard. In the Cosmos case cited above, however, the primary licensee was acquiring its fourth VHF in a major market, three of which were located so close to one another that their predicted Grade B contours actually appeared to overlap, in flagrant violation of Rule 73.636(a)(7). The majority granted the transfer without batting an eyelash in the direction of the public interest, claiming the licensee had not yet traversed the "standard" set out in the Rules. But compare this reasoning with the language of the Rule itself, which instructs the Commission to determine the existence of a concentration of control, giving weight to "the facts of each case," but should "in any event consider that there would be such a concentration... contrary to the public interest" for any licensee or any of its stockholders, officers or directors to have "a direct or indirect interest" in more than seven stations. 47 CFR 73.636(a)(2).
The addition of this FM facility to the Kuipers' "stable" adds yet another voice to their aural blanket of one of our top fifty media markets, containing more than 709,000 total households. ARB Data for Grand Rapids/Kalamazoo stations, 41 TV Factbook 392-b (1971-72).
In my dissent to a similar previous action, in which a Kentucky broadcaster was allowed to purchase his tenth radio station in the eastern half of the state of Kentucky, I noted that the question that must be addressed in these cases is not the total population of the region involved, but rather the impact of the regional concentration upon the people residing in that region. Assignment of Station WNVL, 21 P & F R.R. 2d 77 (1971).
It is not enough merely to argue, as the applicant does here, that the presence of other media interests in the region is sufficient to offset the damage to the public interest that would accrue from the ownership of masses of outlets by a single owner. That is his opinion, at best an allegation of "fact," to be weighted along with a number of other considerations in the context of a hearing. In no way does it represent a rational grounds for abandoning some deeper inquiry. No one is foolish enough to believe that one man can own all the media in a region the size of this one. Does that mean we are to abandon any standard at all because the applicant has "proven" that he owns only 25 or 30% of its radio voices? The full thrust of our Rule provides that:
No license... shall be granted... if the grant of such license would result in a concentration of control of standard broadcasting in a manner inconsistent with the public interest, convenience or necessity. In determining whether there is such a concentration of control, consideration will be given to the facts of each case with particular reference to such factors as the size extent and location of areas to be served, and the number of people served, classes of stations involved and the extent of other competitive service to the areas in question. [Emphasis added.]
[*479] I had generally been under the impression that, where such a large number of stations are involved in such a small region, the "consideration" called for in the Rule should be something more than a blind acceptance of the representations of the party seeking to avoid its application. See my dissent in Times Herald Printing Co., 25 F.C.C. 2d 984 (1970). To refuse to hold a hearing on this issue merely perpetuates the "almost total abdication of responsibility for media concentration" I've pointed out in the past as endemic to the Commission majority, WNVL, 21 P & F R.R. 2d 77, at 79.
As if the concentration issue alone were not enough, the majority also reverses itself on the issue of "efficient use of the airwaves" in this case, originally prompted by the Kuipers' efforts to evade the letter and spirit of our deploy rules.
The duopoly rules specifically provide that stations which are commonly owned cannot have overlapping signals. 47 CFR 73.35 (1970). Although this rule too has been waived (like every other significant technical rule we are obliged to enforce), the Commission has generally been stricter here, holding even the tiniest overlap of contours as sufficient reason, in some cases, for rejecting an application for a new or assigned station. See, e.g., Quinnipiac Valley Service, Inc., 27 F.C.C. 2d 66 (1971), in which the Commission refused to permit waiver for an overlap of just 3.6% of the total area served by two radio stations, where the principal involved owned half or less of each station.
In the instant case, the Kuipers will own 100% of the new station as well as 100% of nearby station WFUR (FM), Grand Rapids. If this new station were to operate at its full authorized power, its 1 mV/m contour would overlap with that of WFUR, thus causing a violation of the duopoly rule that would almost certainly have resulted in a refusal of this Commission to grant him the new station. The mere fact that he chooses to specify an operation level lower-than the maximum allowable for this assignment therefore avoids the almost certain per se duopoly violation, but it does not negate the fact that the resulting underutilization of the frequency still poses a problem of the public interest. It deprives some members of that public of a service they would otherwise enjoy if this station were not under common ownership with an adjacent facility.
Applicant's response to his prehearing letter on this issue was as clever as it was absurd: Problem? What problem? All I need do is move each of my transmitters, at some future date, about four or five miles from their current sites, and the inefficiency would disappear! Note that he was not saying he would move the transmitters -- only that if he did, there would no longer be any problems. Yet, incredibly, the Commission majority has bought this argument, thereby subverting its hearing procedure, by which such important, complicated issues are to be weighed rationally.