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In Re Applications of CHRONICLE BROADCASTING CO., SAN FRANCISCO, CALIF. For Renewal of Licenses of

Stations KRON-FM and KRON-TV, San Francisco, Calif.

 

Docket No. 18500 File No. BRH-926 File No. BRCT-94

 

FEDERAL COMMUNICATIONS COMMISSION

 

40 F.C.C.2d 775

 

RELEASE-NUMBER: FCC 73-468

 

May 9, 1973 Released

 

 Adopted May 3, 1973

 


JUDGES:

COMMISSION WILEY FOR THE COMMISSION: COMMISSIONER JOHNSON DISSENTING AND ISSUING A STATEMENT.


OPINION:

 [*775]  1.  This proceeding involves the applications for renewal of licenses of broadcast stations KRON-FM and KRON-TV, San Francisco, California, filed by Chronicle Broadcasting Co. (hereinafter Chronicle), which is a wholly owned subsidiary of The Chronicle Publishing Co.  The latter company also owns the San Francisco Chronicle, one of the two daily newspapers published in San Francisco, and is part owner and publisher of San Francisco's only Sunday newspaper.  By Memorandum Opinion and Order, FCC 69-262, 16 FCC 2d 882, released March 20. 1969, reconsideration denied, FCC 69-1388, 20 FCC 2d 903, released December 22, 1969, we designated the above-captioned applications for hearing.

 [*776]  2.  The issues specified for hearing in the designation order, n1 as enlarged by the Review Board (FCC 69 R-255, 18 FCC 2d 120 and FCC 69 R-337, 19 FCC 2d 240; application for review denied, FCC 70-529, 23 FCC 2d 162, released May 26, 1970) are as follows:

n1 The hearing issues were amplified and further explained by a Commission Specification Order ( FCC 69-376, 17 FCC 2d 245) released April 23, 1969.

1.  Whether Chronicle Publishing Company, the parent of the licensee, has an undue concentration of control of the media of mass communications in the San Francisco Bay area;

2.  Whether the Chronicle Publishing Company has engaged in anti-competitive or monopolistic practices in the newspaper field in the San Francisco Bay area;

3.  Whether the licensee has used the facilities of Stations KRON-FM and KRON-TV to "manage" or slant the news and public affairs for the purpose of advancing the interests of the Chronicle Publishing Company;

4.  Whether the past programming of Stations KRON-FM and KRON-TV, particularly with regard to public service programming was of such high quality as to constitute a countervailing factor in the resolution of this case insofar as it relates to Issues (2) and (3), above;

5.  (a) To determine the facts and circumstances relating to and surrounding the investigation of Albert Kihn and Blanche Streeter by Chronicle Broadcasting Co.;

(b) To determine whether the conduct of such investigations constituted attempts to harass, coerce and intimidate such persons and, if so, what effect such conduct has upon the qualifications of Chronicle Broadcasting Co. to be a Commission licensee;

6.  Whether, in the light of the evidence adduced pursuant to the foregoing issues, a grant of the above-captioned applications would serve the public interest, convenience and necessity.

In addition, inasmuch as the complaints of Albert Kihn and Blanche Streeter ('ereinafter Complainants) formed the bases for designating the proceeding for hearing, we named them as parties to the proceeding.  With respect to issues 1 and 2, the burden of going forward with the introduction of evidence was placed on Complainant Streeter and the Broadcast Bureau (hereinafter Bureau); with respect to issue 3, the burden of going forward with the introduction of evidence was placed on Complainant Kihn and the Bureau; with respect to issue 4, the burden of proceeding with the introduction of evidence was placed upon Chronicle; with respect to issue 5, the burden of proceeding was placed upon Complaints Kihn and Streeter; and the ultimate burden of proof on all of the issues was placed upon Chronicle.

3.  In an Initial Decision, FCC 71D-6, released March 1, 1971, as corrected by Mimeo Nos. 64706 and 64768, released March 2 and March 4, 1971, respectively, Hearing Examiner Chester F. Naumowicz, Jr., n2 resolved all of the hearing issues in Chronicle's favor and concluded that the public interest would be served by a grant of the renewal applications.  Exceptions to the Initial Decision and a brief in support thereof were filed by the Complainants on June 1 and June 3, 1971, respectively.  Replies were filed by Chronicle and by the Bureau on July 2, 1971.  n3 In addition, Chronicle filed a renewed motion to disqualify  [*777]  Commissioner Nicholas Johnson on September 21, 1971, and the Complainants filed an opposition thereto on October 18, 1971. 

n2 By Order, FCC 72-760, released August 30, 1972, we authorized these officials to change their title from Hearing Examiner to Administrative Law Judge, with the change to be effective September 6, 1972.

n3 Also before us are the following pleadings: (a) statement in support of the Initial Decision filed March 31, 1971, by Chronicle; (b) motion for permission to file pleading in excess of prescribed length filed July 2, 1971, by Chronicle; (c) motion for leave to file reply filed July 14, 1971, by Chronicle; (d) reply to the Bureau's reply filed July 14, 1971, by Chronicle; (e) limited exceptions to the Initial Decision filed June 1, 1971, by Chronicle; (f) petition for level to amend filed April 28, 1971, by Chronicle; (g) motion to correct transcript and an erratum thereto filed June 21, 1971, and May 26, 1972, respectively, by Chronicle; and (h) petition for leave to amend and the accompanying amendments to the applications for renewal of licenses for broadcast stations KRON-FM and KRON-TV filed October 19, 1972, by Chronicle.

Renewed Motion to Disqualify Commissioner Johnson

4.  We shall consider first Chronicle's renewed motion to disqualify Commissioner Johnson.  In order to place this request in its proper perspective, it is necessary to recount briefly some of the background of this case.  On August 18, 1969, Chronicle filed a motion asking that Commissioner Johnson disqualify himself from any further participation in this proceeding or that, if he failed to do so, the Commission conclude that he was disqualified.  In urging the disqualification by the Commission, Chronicle alleged, inter alia, that Commissioner Johnson had received prohibited ex parte presentations from certain interested parties to this proceeding; that he had failed to disclose such matters in a timely fashion; and that he "has created the appearance of providing preferential treatment to individuals, of losing independence of judgment, and of participating in an agency decision outside official channels...."

5.  By Memorandum Opinion and Order, FCC 69-1311, 20 FCC 2d 33, adopted October 15, 1969, we denied the above motion.  n4 In sum, we held that all of Chronicle's allegations treated together, as well as separately, did not support its claim for disqualification.  Specifically we held that the receipt of a letter concerning KRON-TV written by Albert Kihn (a former KRON-TV cameraman) on February 7, 1969, after a petition to deny the Chronicle renewal application was filed -- but prior to the designation of the application for hearing -- was not a violation of the ex parte rules and did not constitute any indication of bias.  We also held that the indication in the Kihn letter that there had been previous correspondence between himself and the Commissioner raised no further questions of violations of the ex parte rules or any improper involvement in the case by the Commissioner.  Respecting three letters sent to Commissioner Johnson from a publisher of a San Francisco publication, we held that such letters should have been placed in the Commission's public files since Chronicle's renewal applications had been designated for hearing; that the mere receipt of such correspondence by the Commissioner was not disqualifying; and that the Commission's replies thereto did not indicate any improper prejudgement of the case or other lack of impartiality. 

n4 Commissioner Johnson not participating.

6.  Finally, we held that certain of Commissioner Johnson's public statements, including a statement on a Public Broadcasting Laboratory (hereinafter PBL) program, concerning the need of the Commission to reply on citizens' complaints, did not indicate bias; that the Commissioner's publicly expressed views on Commission policy, e.g., the concentration of control of media of mass communications, do not  [*778]  indicate a predisposition of this particular case or any other wherein such matters are at issue; that any prior involvement by the Commissioner with certain parties in this proceeding, both prior to and after the KRON applications were designated for hearing, was perfectly proper and consonant with, if not required by, the functions of a Commissioner's office; and that, in view of the foregoing, Chronicle had failed to substantiate its claim that Commissioner Johnson had either prejudged this case or reasonably given the appearance of doing so.

7.  In urging us to reconsider our prior rulings respecting the disqualification of Commissioner Johnson, Chronicle has now filed a renewed motion presenting alleged new facts which have recently come to its attention.  This alleged new information is as follows: (a) the Commissioner's alleged receipt of further correspondence from Albert Kihn during the period prior to designation of this case for hearing; (b) the alleged funding of counsel for parties in this proceeding from the royalties from one of the Commissioner's books; and (c) the Commissioner's participation in a PBL program in which Albert Kihn also appeared.  n5 We shall first set forth the substance of these alleged new matters prior to our consideration of them. 

n5 In our opinion a majority of this alleged new information was previously raised by Chronicle in its prior motion and thoroughly considered by us in disposing of that request.  However, because of the seriousness of the charges again raised and to be sure that no salient fact has been ignored, we have nevertheless considered all of the contentions raised in the instant motion, even though we may have already stated our views with respect to a major part of them.

8.  The Kihn-Johnson Correspondence.  Chronicle points out that the February 7, 1969, letter from Albert Kihn to Commissioner Johnson referred to previous letters sent to the Commissioner and to two other letters sent to the Commission concerning KRON-TV.  Chronicle also states that Kihn's testimony at the evidentiary hearing indicates that he wrote to the Commissioner in 1967 to tell him about events in the news department of a television station without mentioning the station by name, and that since the February 1969 letter states that Kihn had written to the Commissioner a number of time about KRON-TV, the correspondence between 1967 and 1969 "must have reached a significant volume in order to familiarize Commissioner Johnson with the place of Kihn's employment and the identity o the station...." According to Chronicle, Kihn also testified before the Commission that he had written letters to the Commission, or its members, or staff, subsequent to the letter of December 22, 1968.  Moreover, Chronicle also alleges that the Kihn-Johnson correspondence was not one-way because Kihn testified that he received replies to his letters to the Commissioner, although he refused to make them available.  Chronicle also states that the Kihn letter of February 1969 indicates that the material he sent to Commission on December 22, 1968, was the same as the material previously sent to Commissioner Johnson; that this same letter also mentions that Kihn is still working on his study of TV; and that the mentioning of these matters for the Commissioner's benefit tends to indicate that there were other letters from Kihn to the Commissioner.

9.  The "Funding" of Complainants' Counsel.  According to Chronicle, the new information that has come to its attention in this respect  [*779]  is a letter to the editor of a magazine written by Mr. Robert Manning of The Atlantic Monthly.  Chronicle points out that in this letter it is specifically stated that there is a provision in Commissioner Johnson's contract with the publishers of his book ("How to Talk Back to Your Television Set") that the royalties derived therefrom shall be distributed to an entity or entities devoted to the improvement of American television and that the publishers decided to distribute the first accrued income to the Citizens Communications Center of Washington (hereinafter Center).  According to Chronicle, the publishers' decision to select the Center as a recipient of such royalties is readily understandable and is entirely consistent with Commissioner Johnson's oft-spoken and written views that he would subscribe to the publishers' determination that the Center is an organization devoted to the improvement of American television.  Moreover, Chronicle also points out that Commissioner Johnson has done nothing since the disclosure of his financial support of the Center in April and May of 1971 to suggest the contrary.  Chronicle also points out that the Center has served as counsel to Complainants Kihn and Streeter in this proceeding.

10.  The PBL Appearance.  Chronicle submits that in a PBL program of February 16, 1969, Albert Kihn discussed both his complaints concerning the KRON-TV news operation and his writing to the Commission about them, and that on this same program there was also interspersed a comment by Commissioner Johnson in which he stated that the Commission is "very much dependent upon complaints and statements that are filed by private citizens" since this is the only way such information would come to the Commission's attention.  Essentially, it is Chronicle's position that the Commissioner's comments on this PBL program indicate the Commissioner's familiarity with this case and were obviously in reference to this case.  In this vein, Chronicle points out that the taped interview with Kihn for the program must have taken place prior to January 6, 1969, since Kihn left the station on that date and since the PBL announcer referred to Kihn as working for KRON-TV at the time his interview was recorded.  This being the case and since there is no indication that Commisioner Johnson taped his interview before the Kihn tape, Chronicle asserts it is reasonable to infer "that the Commissioner was a aware of the Kihn interview and that he used it as a springboard for his own remarks." Even more significant, says Chronicle, is the fact that Commissioner Johnson had already seen Kihn's first letter of September 8, 1968, thus indicating that the Commissioner's statement on the broadcast may have been "a direct reflection of his interest in the complaint letter of September 8 filed by Kihn." Finally, Chronicle notes that Kihn testified at the hearing that the PBL people told him that they had gotten a copy of his letter and that, based upon this letter, they invited him to appear on their program.  Chronicle therefore infers that the Commissioner furnished the Kihn letter to the PBL researchers.  n6

n6 Chronicle also asserts that another reasonable inference is that the Commissioner knew some of his remarks would be interpolated within those of Albert Kihn.

11.  Essentially, it is Chronicle's position that the above alleged matters, when considered together, tend to form a picture of at least an apparently  [*780]  improper "involvement" in the case by the Commissioner and also tend to show that he "has become so involved in this matter as to create the appearance of a personal interest." n7 We disagree.  All of the matters set forth above together with those alleged by Chronicle in its previous motion which will not be reiterated here, do not warrant the disqualification of Commissioner Johnson.  Merely because Chronicle believes that it has now shown that Albert Kihn must have written to Commissioner Johnson a number of times prior to his letter of February 7, 1969, n8 and that the Commissioner responded thereto, adds nothing to what was before us at the time of Chronicle's previous motion; nor would it require us to arrive at a different determination herein.  In its previous motion, Chronicle pointed out that Kihn's February 7, 1969, letter to the Commissioner indicated that Kihn had written a number of times about KRON-TV and that "more important, the tone of the letter as a whole contains clear indications that the correspondence was not all one-way." This correspondence, and the Commissioner's failure to release it, was the basis for a claim in the first disqualification motion of apparent partiality, as well as a claim concerning an alleged violation of the ex parte rules which is not now renewed.  At that time, we rejected the claim of partiality on the grounds that it was perfectly proper for a Commissioner to receive and consider complaints about station operation and that such correspondence need not be placed in a public file.  The "newly discovered" facts that Kihn may have begun his correspondence in 1967, that he taped conversations with fellow employees, and that he used these tapes in preparing his letters, add nothing of significance to the material previously considered by us. 

n7 The Chronicle motion also refers to certain peripheral matters which add nothing of significance to its basic point.  Thus, it relates that Albert Kihn in June 1967 began to tape conversations with employees and former employees of KRON-TV; that Kihn gave a copy of his complaint letter of September 8, 1968, to Mr. Bruce Brugmann, publisher of the Bay Guardian; that Mr. Burgmann made use of it in an article and also wrote to Commissioner Johnson (this correspondence was considered in our earlier opinion); that in a thesis for a graduate degree the writer (who studied at the school where Mr. Brugmann taught) referred to the Kihn and Streeter complaints and stated: "At least one FCC Commissioner is also interested in the KRON television operation." and that the writer of this thesis relied on the Guardian article for material (this thesis was also previously considered by us in our earlier opinion, see 20 FCC 2d 37, note 6).

n8 Kihn's hearing testimony that he wrote one letter to Commissioner Johnson and that he might have written other letters, when asked if he had any communications with the Commission or any of its members or staff subsequent to his letter of December 22, 1968, is at best ambiguous and does not, in our opinion, establish that there was in fact a further correspondence with the Commissioner.

12.  One further matter with respect to the Kihn-Johnson correspondence warrants brief comment.  In again bringing these matters to our attention, Chronicle has indicated that there seems to be a continuing reluctance (apparently on the part of the Commission) to reveal this correspondence.  Chronicle has not indicated the basis upon which it arrived at such a supposition, nor can we reasonably surmise any.  In our earlier opinion disposing of Chronicle's previous motion, we specifically apprised Chronicle that any complaint letters which may warrant an investigation "will be made available for public inspection under certain conditions upon request when it is determined that no investigation is to be conducted or when the investigation is completed." (20 FCC 2d at 35; see also Section 0.457(g) of the Commission's Rules).  The Commission to this date has not received any such  [*781]  requests from Chronicle, and we do not agree with Chronicle's supposition that merely because such materials have not been made public by the Commission, they must necessarily contain disqualifying matters.  n9 Chronicle on the one hand refrains from making a direct request, and thus deprives the Commission of an opportunity to consider such request on its merits, to see non-public material contained in the Commission's files to support its allegations, and then, on the other hand, relies on the Commission's failure to make such matters public as an indication that the material does in fact contain disqualifying statements.  We do not believe that this is a valid approach or that it raises any substantial issue of disqualification. 

n9 By letter of May 16, 1969, to the Executive Director of the Commission, Chronicle did request all correspondence received by the Commission concerning KRON-TV after the proceeding became restricted.  At no time has Chronicle requested letters going back to 1967.

13.  Chronicle's contentions with respect to the disbursement of the royalties from Commissioner Johnson's book similarly present no basis for disqualification.  The significant consideration here, we believe, is that the Commissioner turned over to his publishers absolute discretion with respect to the use of the royalties under a standard so broad that it cannot reasonably be suggested that he was indicating any preference for any possible recipient.  Moreover, we find no merit to Chronicle's assertion that Commissioner Johnson is in actuality funding the Citizens Communications Center since that organization is one of the recipients of the royalties from his book.  He was not consulted on the publisher's decision to make payments to the Center and has given no indication of improper partiality toward that organization.  Whether or not the Commissioner believes the award to be a sound one is, in our opinion, an exercise in mere speculation which has no place in the resolution of the serious charges here advanced.

14.  Chronicle's remaining alleged new information revolves about the PBL program in which a brief statement by the Commissioner, separately recorded, was interpolated by the producers within a discussion by Albert Kihn.  n10 In our opinion, the Commissioner's statement raises no possible issue of bias, and its use with the Kihn interview is similarly of no significance since it was the producers of the PBL program and not the Commissioner who made the interpolation.  In any event, the Commission receives many letters of complaint from the public, and as the Commissioner pointed out in his comments, this agency is very much dependent upon such complaints in the proper discharge of its regulatory functions.  Moreover, the Commissioner's comments in this respect were most general and expressed no view, directly or by inference, upon the merits of the Kihn complaint.  They were instead merely a reiteration of the Commissioner's oft-spoken and well known view that citizens complaints may be of considerable value to the Commission. 

n10 In our first opinion, we stated that the Commissioner's appearance was "apparently" recorded on a separate occasion and inserted in Mr. Kihn's remarks without the knowledge of the Commissioner.  He has confirmed that this was the case.

15.  In view of the foregoing, we shall not attempt to determine whether or not the Commissioner's taped comments were recorded prior to or after Kihn's interview or whether or not the Commissioner's  [*782]  comments were motivated by and/or in response to Kihn's complaint and statements with respect to KRON-TV.  Here again, Chronicle would have us engage in both an exercise of surmise and a probe of the Commissioner's mental processes.  Such procedures are totally uncalled for based on the facts before us.

16.  In addition to the above, Chronicle also points out that since our decision on its previous motion, the United States Court of Appeals in Cinderella Career and Finishing Schools, Inc. v. Federal Trade Commission, 425 F. 2d 583 (D.C. Cir. 1970), has specifically delineated the well established test for disqualification and submits that in light of this decision, we "must reconsider and weigh the facts set forth in both this and the previous petition".  According to Chronicle, the test of disqualification as stated by the Court in the Cinderella case is whether a disinterested observer may concluded that in some measure the facts as well as the law have been adjudged in advance of the hearing.  Chronicle also notes that an administrative hearing, as the Court pointed out in the Cinderella case, must be attended not only with every element of fairness but with the very appearance of complete fairness.  We agree that the Cinderella decision reiterates the well-established law for disqualification.  Indeed, we decided Chronicle's previous motion under the same standard, stating that the pertinent issue was whether Commissioner Johnson had "formed an opinion prior to decision as to the facts or outcome of this case, closing his mind to persuasion, or has reasonably given the appearance of doing so." (See 20 FCC 2d at 38.) Thus, we find no reason to reconsider our prior determinations with respect to Chronicle's previous motion simply because of the Court's pronouncements in the Cinderella case.

17.  In sum, all of the facts alleged by Chronicle do not warrant the disqualification of Commissioner Johnson, whether considered alone or together with the facts alleged in Chronicle's previous motion.  Indeed, we are convinced that nothing before us suggests that Commissioner Johnson has not remained an impartial member of this Commission.  Accordingly, the renewed motion to disqualify Commissioner Johnson will be denied.

Hearing Examiner's Initial Decision

18.  In order to place the Complainants' exceptions in proper context, we believe that a brief summary of the Examiner's Initial Decision is necessary.  Concerning hearing Issue 1, the concentration of control issue, the Examiner concluded that although the Chronicle interests amount to a powerful voice in the San Francisco area, all segments of Chronicle's media holdings face extensive competition.  In this respect, the Examiner found that the record evidence reveals that of Chronicle's total potential audience only about one-half actually listened to any of its broadcasting voices; that only one in ten are exposed exclusively to the Chronicle outlets; and that the combined advertising revenues of both the Chronicle broadcasting stations and the newspaper amount to 7-8% of the total monies devoted to advertising in the area.  Moreover, the Examiner concluded that the record fails to establish that Chronicle "even attempts to speak with a single voice..." or that  [*783]  the owners of the Chronicle properties have a greater concentration of media control than exists in numerous other cities.

19.  Regarding hearing Issue 2, the anti-competitive practices issue, the Examiner concluded that the record evidence reveals that all of the San Francisco papers sustained losses as a result of the public's nationwide move from the cities to the suburbs during the period 1954-64; that while competing vigorously, Chronicle was the "least unprofitable" of the San Francisco papers and was able to stay in the black only due to the substantial profits generated by KRON-TV; that while substantial sums were spent by both Chronicle and the Examiner (San Francisco's other daily newspaper) for promotional campaigns during this period, both papers continued to lose money; and that the record fails to establish that Chronicle's practices during this period were in any way unusual or unfair, or that the profits from KRON-TV were devoted to financing any improper competitive procedures.

20.  With respect to the Chronicle-Examiner joint operating agreement, the Examiner found from the evidence of record that the Hearst Corporation (owner of the Examiner and the News Call Bulletin) initially confronted Mr. Charles deYoung Thieriot (who was then Chairman of the Board of the Chronicle Broadcasting Co. and also President and Director of Chronicle Publishing Co.) with a proposal to enter into a joint operating agreement for the San Francisco papers; that Mr. Thieriot was receptive to such a proposal; that the parties thereafter entered into a joint operating agreement which created the San Francisco Newspaper Printing Company to handle the mechanical, advertising, business and circulation affairs of the San Francisco papers; and that such agreement provided, inter alia, that the joint newspaper printing company would pool all of the revenues of the two papers, pay all of the costs of both papers, retain 5% of any excess of its compensation, and distribute any remainder to the two papers in equal shares.  In respect to the above, the Examiner concluded that despite whatever antitrust arguments might be made as to the current propriety of the Chronicle-Examiner joint operating agreement, the Newspaper Preservation Act (15 U.S.C. §  1801) refutes these arguments and also establishes the legality of such agreements.  However, the Examiner further concluded that this Act does not answer the Commission's public interest questions concerning such joint operating agreements.  In this regard, the Examiner noted that prior to entering into the joint-operating agreement, Mr. Thieriot insisted on a "Business Review Letter" n11 from the Department of Justice; that Mr. Thieriot acted responsibly in this respect; and that, consequently, the qualifications of Chronicle to be a Commission licensee are not called into question.  The Examiner also concluded that it was not demonstrated on the record that the functioning of the Chronicle-Examiner joint operating agreement had any adverse effect upon the public interest considerations with which  [*784]  the Commission was concerned when it designated this issue for hearing. 

n11 Under certain circumstances the Department of Justice will review a given factual situation and provide a letter stating that it has no present intention of initiating antitrust action under the circumstances in question.

21.  With respect to hearing Issue 3, the news management issue, the Examiner concluded that, according to the Commission's specification order (cited supra), this issue does not pertain to the fairness or quality of KRON's programming, but rather to whether such programming was governed by self-interest.  The Examiner also pointed out that, although to some extent improper motives can be inferred from program content, for the Commission to rely primarily on content would be to act the role of a censor and that, therefore, any "adverse conclusions under this issue are to be reached only if KRON's improper motives have been established by the most clear, convincing and unambiguous evidence." In reaching his decision, the Examiner concluded that such evidence had not been adduced under this issue.

22.  With respect to the allegations that the facilities of KRON-TV were used to enhance Chronicle's CATV interests, the Examiner's findings revolved around three incidents: a documentary about the city of Vallejo, California; coverage of the San Carlos, California, "Chicken's Ball"; and coverage of a library dedication in South San Francisco.

23.  Concerning the Vallejo incident, the Examiner found that the record evidence reveals that at a "community luncheon" Mr. Harold P.  See (then President and Director of Chronicle), at the suggestion of city officials, decided to explore the concept of a KRON-TV documentary on the Vallejo area.  Thereafter, See assigned a reporter to the project who wanted to do an expose type program but was told by See, and the reporter so testified, that an expose was unsuitable because it might jeopardize Chronicle's CATV interest in the area.  In his hearing testimony, See denied having said this is or even discussing the program with the reporter after the latter's return from Vallejo.  In evaluating the above testimony, the Examiner concluded that the reporter's recollection was "dim" and that all available evidence, although inconclusive, supported See's version of facts.  Thus, the Examiner concluded that a finding adverse to Chronicle was not warranted with respect to this incident, since there was absolutely no evidence of record indicating that CATV considerations motivated KRON-TV's carriage of this program.

24.  With respect to the San Carlos "Chicken's Ball," a biennial fund raising project of the area's PTAs and an event which KRON-TV had covered in past years, the Examiner found that the record evidence shows that a postscript to a letter to the mayor of San Carlos regarding a CATV applicant emphasized the connection between KRON and the CATV applicant by mentioning that Mr. See had promised to cover the Ball in color on KRON-TV; that the evidence also shows that See had been appointed as a judge of the skits to be presented at the Ball; that the KRON news director acted as the reporter for the event and also assigned two cameras thereto; that when questioned by the KRON assignment editor and a cameraman about the generous facilities utilized for an event "of marginal interest", the news director "responded that the coverage was relative to the seeking of a CATV franchise in that area"; that on February 18, 1968, a half hour  [*785]  program of this event was shown on KRON-TV; n12 and that, shortly thereafter, the San Carlos CATV franchise was awarded to one of Chronicle's competitors.  The Examiner concluded that the weight of all the evidence developed in this respect does not warrant a conclusion that the KRON-TV coverage of the San Carlos "Chicken's Ball" was influenced by Chronicle's interest in CATV in that city. 

n12 The Examiner found that previous coverage of the Ball consisted of 3 min. 50 sec. (1962), 8 min. 5 sec. (1964), and 4 min. 10 sec. (1966).

25.  Concerning the coverage of the South San Francisco library dedication, the Examiner found that the evidence of record developed in this regard shows that after a conversation between See and the KRON news director, a memo from the news director was sent to the KRON assignment editor which stated that See wanted to pay increased attention to South San Francisco and wanted a library dedication there covered; that when the assignment editor questioned this, the news director explained that See had ordered the coverage because of Chronicle's CATV interests in the area; that in another memo, the KRON news director wrote that "[See] wants to make sure that the mayor of SOUTH SF is prominent in any film we do!"; that, shortly thereafter, the dedication ceremony was covered by KRON-TV, but the bulk of the film was ruined in the lab and the salvaged portion, about 30 seconds' worth, was shown twice; that See wrote a letter to the mayor of South San Francisco explaining the diminished coverage; and that although both See and the KRON news director denied that CATV considerations played a role in the coverage of the dedication, See nevertheless admitted that such considerations may have motivated his explanatory letter to the mayor, since Chronicle's CATV application had emphasized KRON's technical expertise.  The Examiner concluded that the coverage of the library dedication, including the customary attention paid to political notables present at the occasion, was routine.  Notwithstanding See's instructions to pay particular attention to South San Francisco, the Examiner stated that "there is no strong evidence linking this to the CATV applications."

26.  Concerning the statements that were attributed to KRON's middle managers that certain stories should be covered to advance Chronicle's CATV interests, the Examiner found that the "in" joke among KRON's employees at that time was to explain any undesired assignment as a reflection of the company's pursuit of CATV interests.  In this vein, the Examiner concluded that there was no evidence that any of these middle managers were ever told by their superiors to base their decisions with respect to KRON-TV programming on Chronicle's CATV interests.  Hence, what everybody "knew" turned out to be "wholly lacking in demonstrable factual foundation," the Examiner concluded.  The Examiner also concluded that the testimony of See and Thieriot showed them to be "practical and realistic"; that their testimony completely refutes the statements of certain KRON employees concerning the coverage of these events; that there is no evidence of record to cast doubt upon their veracity; and that in  [*786]  weighing all the evidence bearing on this matter, it is not unreasonable to attribute the conflicting testimony to a misunderstanding between a superior and an employee concerning a given assignment.

27.  With respect to Chronicle's coverage of labor disputes, the Examiner concluded that they had been "balanced." Although there were disputes between newsman and supervisors over certain incidents, the Examiner found that the evidence did not indicate that the KRON programming was designed to favor management.  Finally, taking all of the incidents bearing on this issue, the Examiner concluded that no pattern emerges, and "no judgment is shown to have been made for the purpose of serving any express or implied policy to slant or bury certain news." Although there were instances of KRON employees' awareness of the effect of their actions on their employer's interest, there was no showing that KRON's management deliberately fostered such awareness or that it actually affected news coverage.  The Examiner stated: "While such a climate is undesirable and potentially dangerous, it does not of itself justify a conclusion that KRON did, in fact, slant news to serve its own interest."

28.  Concerning Issue 4, the Examiner concluded that it was unnecessary to consider evidence of past programming since such evidence was only to be considered in mitigation of adverse conclusions under Issues 2 and 3, which were resolved favorably to the licensee.  However, the Examiner commented that the licensee had made a "sincere and substantial" effort to serve the needs of its audience and, if the conclusions on Issues 2 and 3 were in need of mitigation, KRON's evidence of past programming would be entitled to "not insignificant" weight to that end.

29.  Lastly, with respect to Issue 5, the investigative issue, the Examiner found that the evidence establishes that upon learning of Complainants' letters to the Commission, KRON's general counsel advised See to undertake an investigation; that See concurred in this suggestion, and that the general counsel thereafter employed an investigative firm which he considered the "most able and discreet" in the city; that Kihn was placed under surveillance for 28 days during 1968 and 1969; n13 that the investigators conducting this surveillance utilized automobiles to observe Kihn's home and movements, recorded the license plate numbers of persons with whom Kihn came in contact and ascertained their identities through the Motor Vehicle Bureau; that although Kihn was not aware that he was under observation, his neighbors were and had complained twice to the police; and that eventually Kihn discovered that he was being followed and the investigators were instructed to discontinue the surveillance.  n14

n13 Streeter was not placed under surveillance.

n14 Also placed under surveillance was an editor of a San Francisco newspaper after he visited KRON's offices to inspect the station's renewal application.  This visit, together with reports that a competing application was about to be filed, aroused KRON's suspicions that there might be connections between Kihn and such an applicant.

30.  The Examiner's findings further reveal that after the designation of this proceeding for hearing, KRON's attorneys decided to order a further investigation of Complainants Kihn and Streeter so that information could be developed for cross-examination purposes; that this  [*787]  subsequent investigation was conducted by the same investigative firm and consisted of interviewing persons who might have knowledge of the Complainants; that the investigators performed the investigation under the guise of conducting a check on both Kihn and Streeter for a potential employer; that more than 50 persons were interviewed; and that ultimately both Kihn and Streeter learned of these interviews.  The Examiner's findings also reveal that the investigators employed the technique of undercover contact -- that is, becoming friendly with Kihn, his wife, a close friend, and an editor who had looked at the KRON renewal application.  The investigation was discontinued following the pre-trial depositions of Complainants.  A total of 1,426 1/2 hours was devoted to the case by the investigating firm.

31.  The Examiner concluded that neither "the decision to investigate or the conduct of the investigation was unreasonable or malicious, or had the design or effect of chilling citizen complaint to the Commission." With respect to the earlier aspects of the investigation (i.e., surveillance of Kihn), the Examiner found the conduct of the investigators to be discreet and, since the surveillance was discontinued as soon as Kihn discovered it, concluded that it was not intended to harass or discourage Kihn from "pursuing his objective." Similarly, the Examiner concluded that the subsequent aspects of the investigation did not discredit KRON since none of the data obtained was permitted to become public.  In conclusion, the Examiner stated that KRON did no more than has been long recognized to be proper for a litigant in an American trial and that the investigation did not constitute an attempt to harass, coerce or intimidate the Complainants or anyone else.

Complainants' Principal Exceptions to the Initial Decision

32.  Burden of Proof.  Complainants first claim is that the Examiner erroneously placed the burden of proof upon them.  Regarding Issue 3, the news management issue, Complainants allege that the Examiner exhibited a "curious neutrality" in favor of Chronicle when he stated that "... adverse conclusions under this issue are to be reached only if KRON's improper motives have been established by the most clear, convincing and unambiguous evidence." Thus, Complainants argue that the Examiner has, in effect, ruled that if the evidence is conflicting (i.e., ambiguous) on an issue, it must be resolved in favor of Chronicle and, accordingly, he has required them to prove their charges beyond a reasonable doubt.  Complainants further submit that the parallel between the burden of proof question in this case and that in the second United Church of Christ case is "striking".  Office of Communication of the United Church of Christ v. Federal Communications Commission, 425 F. 2d 543 (D.C. Cir. 1969). Complainants also claim that the Examiner's failure to give "probative weight" to the admissions of KRON employees, which related to KRON's programming allegedly designed to enhance Chronicle's CATV interest, simply because he found those employees to be without "actual knowledge" of the truth of those statements, is totally without support in the law.   [*788]  According to the Complainants: "The general rule of law is that declarations of an employee or agent made during the course and scope of that agency are binding on the principal." Moreover, Complainants state that since the KRON employees did, in fact, present news and public affairs programs in a certain manner because they thought management wanted it that way, Chronicle must be held responsible for its employees' motives.  United Broadcasting Co., 23 FCC 2d 493 (1970); Regal Broadcasting Corp., 27 FCC 2d 694, 695 (1971). If those motives cannot be attributed to Chronicle, Complainants urge that Chronicle nevertheless failed to supervise its employees and maintain control of its station and thus failed to operate in the public interest.  The Court House Broadcasting Company, 21 FCC 2d 792 (1970). Finally, Complainants allege that the Examiner's First Amendment rationale for imposing a higher burden of proof on them on the news management issue simply because the Commission eschews the role of a censor is unpersuasive.  According to the Complainants, the alleged management of news programs is in the realm of "commercial" speech rather than "political" or "social" speech and as such is not protected by the First Amendment.  Thus, Complainants conclude that they have been deprived of a fair hearing by the Examiner's state of mind toward the burden of proof.

33.  The Joint Operating Agreement, Concentration of Control, and the Newspaper Preservation Act.  Complainants claims that, when entered into, the joint operating agreement between the Hearst Corporation and The Chronicle Publishing Company was illegal as a matter of law, citing United States v. Citizen Publishing Co., 394 U.S. 131 (1969). Complainants alleged that the anti-competitive controls imposed by the newspapers involved in the Citizen case were all present in this case, i.e., price fixing, pooling of profits pursuant to an inflexible ratio, and an agreement not to engage in any other publishing business in a geographical area.  Such conduct, Complainants state, is in blatant violation of the antitrust laws, is as anti-competitive as a matter of law as was held to be the situation in the Citizen case, and reflects adversely upon Chronicle's character to be a Commission licensee.

34.  Complainants also allege that the Examiner erred in failing to apply standard anti-merger law to find that the combination of the Hearst-Chronicle interests is San Francisco constituted an undue concentration of control of the communications media and that Hearst and Chronicle effectuated a horizontal merger within the overall relevant market (i.e., the entire "communications media").  Moreover, Complainants state that the standards established by the Supreme Court in prior horizontal merger cases n15 were violated by the Hearst-Chronicle joint operating agreement and that such agreement also created an undue concentration of control in the communications media as prohibited by Section 7 of the Clayton Act, 15 U.S.C. §  18. In this connection, Complainants contend that the Examiner erred in utilizing  [*789]  the entire nine-county San Francisco Bay Area as the relevant geographic market for evaluating the concentration of control issue. 

n15 Complainants cite: Brown Shoe Co. v. United States, 370 U.S. 294 (1962); United States v. Philadelphia National Bank, 374 U.S. 321 (1963); United States v. Aluminum Co. of America, 377 U.S. 271 (1964); United States v. Von's Grocery Co., 384 U.S. 270 (1966); and United States v. Pabst Brewing Co., 384 U.S. 546 (1966).

35.  Complainants also aver that there is no evidence that the Newspaper Preservation Act is applicable since it has not been demonstrated on the record that any of the San Francisco papers was a "failing newspaper" within the definition of that Act or that the Examiner (San Francisco's other daily newspaper) was unlikely "... to become a financially sound publication." In addition, Complainants claim that the Newspaper Preservation Act was not intended to apply to a newspaper which also had other media interests, but was instead intended to broaden the "failing company" doctrine, i.e., to include a newspaper division of a healthy company where the newspaper was in probable danger of financial failure although the company was healthy.

36.  News Management and Slanting.  Complainants allege that the Examiner erred in isolating and evaluating each separate instance of alleged news management and slanting.  According to the Complainants, the Examiner obscured and distorted the overall picture in evaluating the record evidence in such a fashion.  Furthermore, Complainants aver that the Examiner nowhere analyzed this overall picture.  Complainants cite Miami Broadcasting Corporation, 19 FCC 2d 651 (Rev. Bd. 1969), wherein the Review Board, disagreeing with the Hearing Examiner's ultimate approach, found that he erred in considering each factual question separately and resolving each in favor of Miami.  Quoting from The Walmac Co., 36 FCC 507, 508 (1964), the Board stated: "Isolating and evaluating each of the items in this fashion obscures and distorts the overall picture.  Nowhere does the Examiner consider altogether the collective effect of all the * * * information * * * and * * * explanations thereof * * *".  The procedure objected to in Miami, Complainants argue, is precisely the procedure the Examiner followed here, i.e., taking each item of alleged news management, analyzing it separately, and ruling on each in favor of Chronicle.

37.  Complainants also claim that the Examiner failed to consider the overall approach to KRON's programming, which was "making friends in the community." To this end, Complainants submit, that Mr. Harold P. See inaugurated a "community luncheon program" which was intended to create a public service image for the station.  Complainants indicate that all of the important people in the community were invited to these luncheons, which were also attended by the "entire upper station management" of KRON; that Mr. See arranged such luncheons so that he could discover the "pet projects" of the community leaders and design broadcast to satisfy them; and that the sole purpose of these luncheons was to enhance the station's competitive position when it later sought CATV franchises in those communities.  n16 Complainants also state that the above community luncheon  [*790]  program was instituted by Mr. See at a time contemporaneous with Chronicle's interest in CATV; that a clear pattern thus emerges of a bold, pervasive public relations effort, dedicated and conceived in the early 1960's, to utilize the facilities of KRON-TV to assist in obtaining cable television franchises for the Chronicle interests; and that, as a result thereof, Chronicle has succeeded in becoming the second largest cable television franchise holder in the Grade B contour of KRON-TV. 

n16 Complainants suggest that these public relations efforts took a variety of forms.  In Vallejo, Mr. See allegedly followed every program suggestion made by the Mayor at a community luncheon and made a documentary emphasizing the positive aspects of the area, although the writer wanted to tell the "true story" of the political turmoil in the area.  In South San Francisco, the day after Chronicle's board of directors had discussed the expenditure of $600,000 for a CATV franchise, Mr. See instructed his news director to broadcast anything newsworthy that came up in that community.  In San Carlos, Mr. See ordered the "Chicken's Ball" to be filmed in color because all of the community leaders would be there and because it would enhance KRON's public relations image.

38.  Complainants also allege that when KRON-TV has been called upon to cover a newsworthy labor dispute and where the news story surrounding such an event is related to matters conceivably adverse to the public relations and/or business interests of Chronicle, there has been a clear pattern on the part of the station to provide either non-carriage or late carriage.

39.  The Investigative Issue.  Complainants allege that the Examiner erred in absolving the licensee of any liability for the acts of the investigating firm.  Complainants assert that the KRON investigation of them was accompanied by fraudulent conduct, was admittedly done under subterfuge and misrepresentation, and was intended to intrude unreasonably into their private personal lives for the sole purpose of eliciting information which could be used by Chronicle to dissuade the Complainants from further participation in this litigation.  Complainants claim that such investigative conduct is illegal under California law.  n17 Moreover, in their invasion of privacy cases now pending against the investigating firm, the Complainants emphasize that the California courts have held that they have stated causes of action for invasion of privacy.  n18

n17 Complainants cite: California Business and Professions Code § §  7528(b) and 7551; Wayne v. Bureau of Private Investigators and Adjusters, 201 Cal. App. 2d 427, 20 Cal. Rptr. 194 (1962); Taylor v. Bureau of Private Investigators and Adjusters, 128 Cal. App. 2d 219, 275 P. 2d 579 (1954); Carmona v. Keller, L.A. Superior Court, EAC 5881; and Carmona v. Transport Indemnity, L.A. Superior Court EAC 6659.

n18 Complainants point out that the trial court in the Kihn case expressly followed Nader v. General Motors Corporation, 25 N.Y. 2d 560, 255 N.E. 2d 765 (1970), in recognizing the tort of unreasonable intrusion into a person's private personal life.

40.  It is also Complainants' position that Chronicle is clearly responsible for the actions of the investigators, particularly since Chronicle knew that the investigators' improper conduct was taking place, authorized and paid for the investigation and reaped the benefits therefrom.  In support of this position, Complainants cite Van Arsdale v. Hollinger, 68 Cal. App. id 245, 66 Cal. Rptr. 20, 437 P. 2d 508 (1968), and state that the California Supreme Court held therein that the exceptions to the general rule of non-liability for the torts of an independent contractor are numerous and that such rule is applied only where no good reason is found for departing from it.  In view of the foregoing, Complainants conclude that contrary to the Examiner's determination, the Chronicle investigation of them was clearly a device to harass, coerce and intimidate and is not the type of conduct in which Commission licensees endowed with a public trust should engage.

CONCLUSIONS

41.  The findings and conclusions contained in the Examiner's Initial Decision have been fully reviewed in light of the arguments urged  [*791]  by the parties in the pleadings now before us.  In our opinion those findings and conclusions represent a fair and reasonable interpretation of the record evidence compiled in this case and, accordingly, they are adopted except as modified in this Decision and in the rulings on the exceptions as set forth in the Appendix.  We shall now consider the Complainants' principal arguments in the same order as they have been set forth.

42.  Burden of Proof.  Complainants' arguments in this respect center primarily around the Examiner's treatment of the record evidence developed under Hearing Issue 3, i.e., whether Chronicle used its broadcast facilities to manage or slant the news and public affairs for the purpose of advancing the interests of its parent company, The Chronicle Publishing Company.  In designating this hearing issue, we placed the burden of proceeding with the introduction of evidence on Complainant Kihn and the Broadcast Bureau and the burden of proof on Chronicle.  n19 In so allocating the evidentiary burdens (particularly the burden of proof) under this hearing issue and others so designated, we concluded that a departure from the Commission's general practice in this area n20 was justified because of the factual situation of this case, i.e., the principal facts surrounding Chronicle's alleged misconduct were peculiarly within its knowledge since those facts concerned the use of Chronicle's broadcast facilities.  n21

n19 Section 309(e) of the Communications Act of 1934, as amended (47 USC §  309(e)), sets forth the governing standards for allocating evidentiary burdens in a proceeding such as this one.  In pertinent part, that section states:

"The burden of proceeding with the introduction of evidence and the burden of proof shall be upon the applicant, except that with respect to any issue presented by a petition to deny or a petition to enlarge the issues, such burden shall be as determined by the Commission."

As is readily apparent from the above, the Commission's discretionary powers in this respect are broad so that proceedings before it may be conducted in such a manner as will best serve the ends of justice (Section 4(j) of Act, 47 U.S.C. §  4(j)).  The above enabling statute is also reflected in Section 1.254 of the Commission's Rules (47 C.F.R. §  1.254).

n20 In D and E Broadcasting Co., 1 FCC 2d 78, 5 RR 2d 475 (1965), the Commission outlined its policy on burden of proof questions and stated, inter alia, the following:

"Generally speaking, when hearing issues involving serious misconduct are designated as the result of a petition to deny or a petition to enlarge issues, the burden of proceeding with the evidence and the burden of proof will be placed upon the party making the charges.  We recognize that there may be cases in which departure from this general practice may be justified." 5 RR 2d at 478.

n21 Cf.  Elyria-Lorain Broadcasting Co., 6 RR 2d 191 (1965), and Washington Broadcasting Co., 3 FCC 2d 777, 7 RR 2d 601 (1966), where the Commission exercised its discretionary powers in a similar manner by placing the burden of proof on the applicants rather than upon the petitioners.

43.  We now turn to the specifics of the Complainants' arguments.  As heretofore summarized, the Complainants do not question the allocation of the evidentiary burdens among the parties to this proceeding, but they contend that the Examiner in considering some of the record evidence has improperly placed the burden of proof on them rather than on Chronicle.  In support of this contention, the Complainants refer to certain statements n22 made by the Examiner in his Initial Decision  [*792]  and submit that these statements show a predisposition on the part of the Examiner in his treatment of the evidentiary burdens in this case.  The short answer to the above, we believe, is that a few isolated phrases and sentences extracted from the Examiner's total analysis of all of the record evidence developed surrounding a given matter are wholly inadequate to support the serious contentions the Complainants here raise.  Certainly, in the absence of something more concrete, we are not prepared to say that such statements, in and of themselves, clearly demonstrate the Examiner's partiality toward Chronicle in his consideration of the record evidence in this case.  In any event, we are convinced that in every instance the particular statement relied on by the Complainants is, in essence, language clearly taken out of context.  For instance, Complainants allege that the Examiner improperly placed the burden of proof on them and also required them to prove their allegations beyond a reasonable doubt when he stated that adverse conclusions under Hearing Issue 3 are to be reached only if KRON's improper motives have been established by the most clear, convincing and unambiguous evidence.  However, the Examiner's complete statement in this respect is as follows and does not, in our opinion, suggest what the Complainants contend. 

n22 Complainants contend that the following statements clearly show the Examiner's state of mind toward the burden of proof: (a) in paragraph 253 of the Initial Decision, the Examiner stated "... adverse conclusions under this issue are to be reached only if KRON's improper motives have been established by the most clear, convincing and unambiguous evidence"; (b) in footnote 35, at page 23 of the Initial Decision, the Examiner stated "...  Such a showing does not convince the Examiner that the sole or primary cause of the cessation of the business was the increase in advertising rates"; and (c) in paragraph 107 of the Initial Decision where the Examiner considered certain evidence regarding statements by the KRON management employees and where he held that such statements "... were received in contemplation of further evidence either that they were based on knowledge or could be presumed to be so based... the Examiner now regards them as without probative weight".  In the interest of brevity, we have not attempted to list all of the Examiner's statements upon which the Complainants reply.  We have, nevertheless, thoroughly considered all such matters in reaching our decision.

In its Specification Order released April 23, 1969, the Commission emphasized that this issue did not contemplate a generalized examination of KRON'S PROGRAMMING TO SEE IF IT WAS FAIR.  Rather the inquiry was initiated 'because of the presence of outside business interests and specific allegations that the preparation of programs has been deliberately made compatible with those interests'.  That is to say, the judgment, in this instance, is not of the content of programming per se.  It is of the motives which underlay the presentation of that programming, specifically whether it was governed by self-interest.

Such motives can, of course, be inferred from program content.  However, if program content is the sole or primary evidence relied upon, the Commission would, in effect, be placed in the role of a censor imputing improper motivation for programming of which it disapproves.  Since the Examiner is aware that the Commission eschews such a role, he believes that adverse conclusions under this issue are to be reached only if KRON's improper motives have been established by the most clear, convincing and unambiguous evidence.

No such evidence has been adduced.  To a tiny core of incidents not inconsistent with guilt has been added a welter of rumor, innunendo, suspicion, and office jokes...  [The Examiner next proceeds with a lengthy analysis of some of the incidents which illustrate his point.] I.D. para. 252-54.

44.  Moreover, what the Complainants fail to point out, and what we have found after our review, is that the Examiner's conclusions under this hearing issue were based not upon Complainants' failure to prove their case "beyond a reasonable doubt," but rather upon the record as a whole and the weight of the evidence.  The Examiner found that the record evidence completely refuted or explained the Complainants' prima facie showing (see, for example, paragraphs 113 and 128 of the I.D.).  No useful purpose would be served by further recounting all of the Examiner's complete statements from which the Complainants have selected portions to support their contentions in this respect (see footnote 22, supra).  For the purposes of this review, we believe that it is sufficient merely to point out that we have thoroughly reviewed all such matters and find that these phrases and sentences were likewise set forth out of context and that the Examiner's complete statements, from which these quoted matters have been taken,  [*793]  clearly demonstrate that the Complainants' contentions are without merit.

45.  Equally without merit is the Complainants' contention that the Examiner's conduct in this case is similar to the type of conduct exhibited by the Hearing Examiner in the second United Church of Christ case, cited supra, which the United States Court of Appeals for the District of Columbia Circuit found objectionable.  In the United Church of Christ case, the Court found that the Examiner, pursuant to the Commission's designation order and contrary to a previous ruling of the Court, improperly placed the ultimate burden of proof on certain issues upon the intervenors rather than the applicant and held that the Examiner, in conducting the evidentiary hearing, demonstrated a "curious-neutrality-in-favor-of-the-licensees." The Court also stated that the Examiner's erroneous concept of the burden of proof prevented the development of a satisfactory record since he consistently confused mere allegation with testimonial evidence, dismissing the latter by characterizing it as the former.  Thus, the Court concluded that the administrative conduct reflected in the record was beyond repair, and ordered a new hearing.  In the instant case, however, none of the irregularities noted by the Court in the United Church case are present.  As previously discussed, we believe that the apportionment of the evidentiary burdens among the parties to this proceeding was proper, and indeed, the Complainants have not contended otherwise.  Moreover, except for surmise and conjecture, the Complainants have offered no specific examples showing the Examiner's "curious neutrality-in-favor-of-the-licensee" or showing his alleged improper exclusion of relevant testimonial evidence as was shown in the United Church of Christ case.

46.  Likewise, we find no merit to the Complainants' contention that the Examiner erred in failing to give any probative weight to certain admissions made by the KRON middle managers which related to programming allegedly designed to enhance Chronicle's CATV interests.  While we agree with the Complainants that, under certain circumstances, the general rule of Agency Law requires that declarations made by employees and/or agents are binding upon their principals, we do not believe that such a general rule of law is either applicable or governing with respect to the admissibility of evidence.  On the contrary, we are persuaded that the appropriate rule in this respect is set forth in 4 Wigmore Section 1078 (3d ed. 1940), which provides, in essence, that the question of the admissibility and weight to be accorded the admissions of employees and/or agents must necessarily turn on the scope of the authority of the speaker.  In our opinion, the Examiner, in considering and weighing the admissions made by the KRON middle managers, properly applied this latter test.  For instance, he concluded that those particular admissions could not be given any probative weight because it had been clearly shown on the record that they were made not within the scope of the speaker's actual or apparent authority and were not based on actual knowledge.  On this matter, the Examiner stated the following:

"...  The individuals to whom [the admissions] were attributed were middle management personnel whose duties were related to the operation of KRON  [*794]  as a television station, not the business activities of either the station or its owners.  If, in fact, KRON programming was being used to advance Chronicle's business interests, it would have been necessary to issue appropriate orders to these people, but it would have been neither necessary nor natural to have informed them of the motives for such orders.  Hence, there is no presumption that their statements in this area are based on actual knowledge.

"This is not to say that they could not have possessed such knowledge: only that it must be proven and not presumed.  Such proof is totally lacking...." I.D. para. 107-08.

47.  We also find no merit in Complainants' additional argument that Chronicle has failed to supervise its employees and maintain control of its stations.  Except for bare assertions, the Complainants have offered Except for bare assertions, the Complainants have offered no evidence to substantiate this claim.  Regarding the Complainants' First Amendment arguments, we do not believe that they are applicable to the facts of this case.  The "commercial" speech cases relied on by the Complainants ( Valentine v. Chrestensen, 316 U.S. 52 (1942) and Ginzberg v. United States, 383 U.S. 463, 474 n. 17 (1966)) apply solely to "purely commercial advertising." In the instant case, however, we do not believe that commercial advertising is at issue.  Merely because the Complainants attempt to equate certain news and public affairs programs carried by the KRON broadcast stations with commercial advertising does not in our opinion alter the facts of this case.  In any event, and as will be shown hereafter, we are convinced that it has not been shown on this record that Chronicle either slanted or managed the news and public affairs programming for commercial profit or for any other self-interest.

48.  In sum, we are convinced that the Examiner in conducting the evidentiary hearing in this case has acted properly and within his delegated authority and that the Complainants' contrary contentions are totally without merit.

49.  Joint Operating Agreement, Concentration of Control, and the Newspaper Preservation Act.  As will be shown hereafter, the Newspaper Preservation Act clearly exempts the Chronicle-Hearst joint operating agreement from the provisions of the antitrust laws.  Thus, we need not determine, as Complainants' request, the legality of that agreement at the time it was executed simply because the Department of Justice was then actively engaged in court proceedings challenging a joint operating agreement between two daily newspapers in Tucson, Arizona, which was subsequently found to be illegal (Citizens Publishing Co., cited supra).  Therefore, our only concern in this area is to determine whether Chronicle's conduct at that time was of such a nature as to reflect adversely upon its qualifications to be a Commission licensee.  Based on our review, we find that the record evidence clearly demonstrates that the principals of Chronicle acted responsibly in both negotiating and executing the Chronicle-Hearst joint operating agreement; that their conduct does not call into question the qualifications of Chronicle as a corporate licensee; and that the Complainants' contrary contentions are completely without merit.  The Examiner's recapitulation of the evidence of record compiled in this respect is adequately set forth in paragraphs 36-41 of the Initial Decision and need not be repeated here.

 [*795]  50.  We find Complainants' "horizontal merger" arguments inapposite since no merger or consolidation has taken place between Chronicle and Hearst.  Briefly stated, a merger as defined by the courts is the absorption by one corporation of the properties and franchises of another whose stock it has acquired, with the latter corporation ceasing to exist and the former surviving.  n23 In a consolidation, an entirely new corporation is created and the consolidating corporations surrender their separate existence.  n24 As previously noted, the Chronicle-Hearst agreement essentially provides for the creation of an equally owned corporation to handle the mechanical, advertising, business and circulation affairs of the two San Francisco newspapers.  Under the agreement, both newspapers continue to exist as separate corporate entities and neither has acquired the stock of the other.  In view of the foregoing, and under the definitions above, we are not persuaded that Chronicle and Hearst have effectuated a merger or consolidation in violation of Section 7 of the Clayton Act, as the Complainants contend. 

n23 Fisher v. Commissioner of Internal Revenue, 108 F. 2d 707, 709 (6th Cir. 1939), cert. denied, 310 U.S. 627 (1940); Ahles Realty Corporation v. Commissioner of Internal Revenue, 71 F. 2d 150, 151 (2d Cir. 1934), cert. denied, 393 U.S. 611 (1934); and Commissioner of Internal Revenue v. Dana, 103 F. 2d 359, 361 (3d Cir. 1939).

n24 Metropolitan Edison Co. v. Commissioner of Internal Revenue, 98 F. 2d 807, 810 (3d Cir. 1938), aff'd, 306 U.S. 522 (1939).

51.  As previously stated, we believe, as did the Examiner, that the Newspaper Preservation Act clearly exempts the Chronicle-Hearst agreement from the provisions of the antitrust laws and prohibits us from taking any action based thereon.  Briefly stated, the Newspaper Preservation Act grants immunity from the antitrust laws for any joint operating agreement between competing newspapers where such an agreement was entered into because of the economic distress of all but one of the parties involved.  This immunity permits competing newspapers to produce jointly and distribute their papers and, at the same time, eliminates all competition between such papers by permitting the fixing of identical subscription and advertising rates, and the pooling of profits.  Section 4 of this Act prevents the Department of Justice or any private party from suing under the antitrust laws, and prohibits any department or regulatory agency of the government from "imposing sanctions or taking any other action on the ground that entering into, performing, enforcing or renewing such a joint operating arrangement violates or is inconsistent with the antitrust laws or is contrary to the public interest." S. Rep. No. 91-535, 91st Cong., 1st Sess. 5 (1969).  Particularly germane to the matters now before us is a limited exception also set forth in Section 4 of the Act, which specifically states that joint operating agreements entered into prior to the effective date of the Act are retroactively granted immunity from the antitrust laws.  H.R. Rep. No. 91-1193, 91st Cong., 2nd Sess. 3, 5 (1970).  Though entered into prior to the Newspaper Preservation Act, it is readily apparent from the above that the Chronicle-Hearst joint operating agreement is specifically exempt from the antitrust laws, and thus we find no merit to the Complainants' contrary contentions.

 [*796]  52.  We now turn to Complainants' arguments relating to concentration of control via commonly owned newspaper-broadcast combinations in the same market.  In Midwest Radio-Television, Inc., 24 FCC 2d 625 (1970), when presented with the question of whether to rule on this particular matter on an ad hoc basis, we decided that it would not be in the public interest to examine newspaper-broadcast joint ownerships in the context of that renewal proceeding, but that such matters could be more appropriately dealt with in general rulemaking proceedings.  n25 Similarly, in Michinana Telecasting Corp., et al., 26 FCC 2d 21 (1970), we stated that questions of general cross ownership policy relating to the structure of the broadcasting and CATV industries, absent clear and substantial evidence of abuse or extreme concentration, are more appropriately resolved in rulemaking proceedings, rather than on an ad hoc basis.  See also Chuck Stone v. FCC, 24 RR 2d 2105, 2122-24 (D.C. Cir. 1972), rehearing denied 25 RR 2d 2001.

n25 See Docket No. 18110, Further Notice of Proposed Rulemaking, 22 FCC 2d 339 (1970), where we have proposed rules aimed at reducing common ownership, operation or control of daily newspapers and broadcasting stations within the same market.

53.  Given the above, we believe that the question now presented is whether there is "substantial evidence of abuse or extreme concentration" by Chronicle in the San Francisco market which would warrant a departure from our general rule.  We think not.  As the Hearing Examiner has found, the San Francisco area is served by a plethora of media.  At least 7 other TV stations serve the area covered by KRON-TV's Grade A contour; at least 21 AM primary services day-time and 3 such services nighttime are available throughout the KRON-TV Grade A contour; at least 30 FM stations serve parts of the "Bay Area." Also, the "Bay Area" is served by 29 daily newspapers of general circulation, only two of which are published in San Francisco itself.  Of the others, at least 8 are widely read in the area.  In addition, numerous other publications are available in the area, including at least 34 national magazines.  Thus, we can find no evidence of abuse or extreme concentration and believe that there is no basis for ad hoc action in this particular case.  See also Federation of Citizens Associations of the District of Columbia, et al., 21 FCC 2d 12, 14 (1969).

54.  Finally, we find Complainants' relevant geographic market arguments to be without merit.  The short answer to all of the Complainants' contentions in this respect is that the criteria utilized by the Courts in determining whether a particular newspaper has an undue concentration of control of the printed press are neither appropriate nor applicable for determining undue concentration of control in the broadcasting industry.  Stated more specifically, even though it may be determined that the San Francisco printed press enjoys a five county newspaper market, this does not mean that such an area is the relevant market for all of the broadcast stations located in that city or, more particularly, KRON-TV's relevant market.  On the contrary, we agree with the Examiner that the nine county San Francisco Bay Area properly depicts the relevant market of KRON-TV.  Such an area roughly approximates the station's Grade B contour  [*797]  and, more importantly, is the area served by that station.  The Commission has traditionally utilized a station's service area in determining the relevant geographic market of a broadcast station.  n26

n26 See Sections 73.35(b), 73.240(a)(2) and 73.636(a)(2) of the Commission's Rules; see also Lee Enterprises, Inc., 18 FCC 2d 684 (1969); cf.  Massachusetts Bay Telecasters v. FCC, 261 F. 2d 55 (1968).

55.  Moreover, in Docket No. 18110, 22 FCC 2d 339, 349 (1970), we specifically indicated that the Commission would continue to apply the criteria set forth in the duopoly rules (Sections 73.35, 73.240 and 73.636) in resolving undue concentration of control issues.  However, we recognized in that proceeding that newspapers do not have service contours and, therefore, a difficult problem is presented when their areas of concentration are compared with those of broadcast stations.  Accordingly, we invited comment on how newspaper markets should be defined for purposes of measuring undue concentration of control.  In view of the foregoing, and in the absence of an overriding public interest showing which would require us to hold otherwise, we are convinced that such matters here raised by the Complainants are more appropriately dealt with in the context of rulemaking proceedings rather than on an ad hoc basis in an adjudicatory proceeding.

56.  News Management and Slanting.  We find no merit to the Complainants' contention that the Examiner's consideration of all of the record evidence bearing on this hearing issue was unduly restrictive.  Based on our review of the record vis-a-vis the Initial Decision we find that the Examiner had indeed analyzed the evidence of record in precisely the manner that the Complainants claim he did not, i.e., after considering each alleged instance of improper news management, and concluding that individually none was based on Chronicle's self-interest, the Examiner then proceeded to consider and analyze the collective effect of all of the evidence compiled in this respect.  For instance, see paragraphs 252-258 of the Initial Decision and, more particularly, paragraphs 259-260 where the Examiner specifically stated the following:

"...  There remains to be considered whether, viewed as a whole, [the incidents relating to the charge of news management] show a consistent course of action from which such policy or practice [of improperly promoting the station's own interests] can be reasonably inferred.  The Examiner does not conclude this to be the case.

"No pattern emerges.  Each incident is shown to have been judged on its own facts and the decisions relating thereto made on the basis of those special facts.  In retrospect, not every judgment was perfect, but no judgment is shown to have been made for the purpose of serving andy express or implied policy to slant or bury certain news.  This is not to say that KRON employees were unaware of the impact their actions might have on their employer's interests...  However, it is not shown that this awareness actually affected the coverage of any news story or that it was deliberately fostered by KRON's management...  While such a climate is undesirable and potentially dangerous, it does not of itself justify a conclusion that KRON did, in fact, slant news to serve its own interest."

57.  We likewise cannot accept the contention that the Examiner erred in failing to consider or weigh properly certain evidence surrounding a "community luncheon program" which was sponsored by Chronicle and which the Complainants believe was part of a bold, pervasive public relations effort instituted by Chronicle for enhancing its  [*798]  position in acquiring CATV franchises.  Indeed, what we have found after our review is that the Complainants' arguments in this respect are based solely upon misstatements of the evidence and also either ignore or mischaracterize the Examiner's proper analysis of all of the evidence surrounding this matter.

58.  While it is true that the record does contain some evidence from which it might be inferred that the Chronicle community luncheon program was utilized solely for the purposes the Complainants suggest, n27 we are persuaded, as was the Examiner, that a preponderance of the record evidence bearing on this matter clearly dispels any doubts in this regard and indeed refutes the Complainants' interpretation of these community luncheons.  For instance, the record reveals and the Examiner found (paragraphs 76-96 of the Initial Decision) that the community luncheon program was one of a series of public relations efforts originated by Chronicle in 1961 as a means of determining community needs and interests; that, since its inception, a total of 72 luncheons in 17 communities in the KRON-TV service area have been held, with attendance ranging from 27 to 60 persons; and that the location and guest list of such luncheons is determined by KRON's Public Affairs Director, who had neither responsibility for nor authority to pursue Chronicle's CATV interests. 

n27 The record reveals and the Examiner found that in early 1965 Chronicle manifested an interest in acquiring a CATV franchise in Vallejo, California (footnote 45 of the I.D.); that Chronicle sponsored a luncheon in Vallejo on March 16, 1966, which was attended by some of the Chronicle officials and the community leaders who had earlier discussed Chronicle's CATV interests in the area; that at the luncheon these same Chronicle officials and community leaders also discussed the possibility of a KRON-TV documentary program for the North Bay area of San Francisco, California, which would relate, in part, to the city of Vallejo (paragraph 79 of the I.D.); and that shortly thereafter, KRON-TV did in fact carry such a documentary program which was titled "Where the Bay Begins" and of which 38% of the program was related to Vallejo (paragraph 89 of the I.D.).

59.  The record likewise reveals that Chronicle's interest in CATV did not manifest itself until 1965, some four years after the luncheon program was instituted, and that the principals of Chronicle (particularly Mr. Harold See) who were charged with pursuing Chronicle's CATV interests had no role in the selection of either the location or the guest list of these community luncheons, except to issue general instructions that the luncheons be rotated throughout the area and the guest list be representative of the surrounding area where the luncheon was to be held.  We further note that, since the inception of the luncheon program in 1961 and prior to 1965 when Chronicle expressed an interest in obtaining a CATV franchise in Vallejo, California, a total of five luncheons had been held in that community; that the determination to hold the 1966 Vallejo luncheon, which was contemporaneous in time with Chronicle’s efforts to obtain a CATV franchise for that community, and the selection of the guests to be invited were made by the KRON Public Affairs Director rather than by any of the principals of Chronicle who were then actually pursuing Chronicle's Vallejo CATV interests; and that the testimony of some of the persons attending this 1966 Vallejo luncheon indicates that Chronicle's CATV interests were not discussed at this particular luncheon, nor were they brought up in the discussions centering around the KRON-TV documentary program for the Vallejo area.

 [*799]  60.  Based on the above and other countervailing evidence of similar nature, which we have not recounted but which is specifically pointed out in our rulings on Complainants' exceptions as contained in the attached Appendix, the Examiner concluded, and we agree, that Chronicle's public relations efforts were not conceived and dedicated solely or primarily for enhancing its CATV interests or for any other self-interest, as the Complainants suggest.

61.  As previously stated, the Complainants also contend that it has been clearly shown on the record of this proceeding, and the Examiner has failed to so find or conclude, that certain KRON-TV programming (the documentary program about the city of Vallejo, as noted above; a program covering the San Carols, California, "Chicken's Ball", a fund raising project by the San Carlos, California, area's PTAs; a program covering the South San Francisco library dedication; and KRON-TV coverage of certain local labor disputes) was likewise motivated by Chronicle's CATV and other self-interests.  We disagree.  What we have found after our review is that the Complainants' contentions respecting these matters are grounded upon distortions and/or misrepresentations of the record evidence; upon selected circumstantial evidence which is clearly outweighed by a preponderance of all of the other evidence; upon hearsay testimony which the Examiner properly rejected; and finally upon numerous mischaracterizations of the Examiner's analysis of the evidence surrounding these matters of record.  In order for us to answer individually all of the Complainants' contentions it would be necessary to recount all of the evidence compiled on the record bearing on this hearing issue.  No useful purpose would be served by such a procedure since the Examiner's findings in this respect (paragraphs 67-134 of the I.D.) represent, in our opinion, a fair and reasonable recapitulation of the evidence surrounding the alleged management and/or slanting of the KRON programming, as the Complainants have charged.  Thus, for the purpose of this review and in view of our detailed analysis of each of the Complainants' assertion surrounding this portion of the record set forth in our rulings on the exceptions in the attached Appendix, we believe that it is sufficient merely to point out that we have thoroughly reviewed the record evidence vis-a-vis the Initial Decision in light of the arguments urged by the Complainants.  Based on such a review, we conclude that the Examiner's findings of fact relating to these matters are completely supported by the record evidence and that his conclusions are a fair and reasoned interpretation of those findings.

62.  The Investigative Issue.  A brief analysis of this particular hearing issue is necessary so that the Complainants' arguments may be considered in their proper perspective.  In adding this issue the Review Board stated, and we agree, that by voluntarily placing themselves in an adversarial posture the Complainants exposed themselves to a reasonable and proper search of their credentials; that while such an investigation is permissible in a litigative context, this is not to say that the Complainants have consented to an exposure of their entire background and living habits; and that the manner in which the investigation was conducted, its scope, and the purpose for which it was instituted are all factors to be considered in determining whether it  [*800]  was proper and permissible.  n28 With this background, we now turn to the specifics of the Complainants' arguments bearing on this hearing issue. 

n28 19 FCC 2d 240, 244-45 (1969).

63.  As previously stated, the Complainants' contend that the Examiner erred in absolving Chronicle of any liability, presumably adverse conclusions resulting in disqualification, respecting the investigations of them, because such investigations were clearly illegal under California state law since they were accompanied by fraudulent investigative conduct, were admittedly done under subterfuge and misrepresentation, and were intended to intrude unreasonably into Complainants' private lives.  The short answer to this contention is that California state law and the court's interpretation thereof are neither applicable nor governing under the hearing issues of this proceeding, i.e., whether or not the conduct of the KRON investigation of the Complainants constituted attempts to harass, coerce and intimidate and, if so, what effect such conduct has upon the qualifications of Chronicle to be a Commission licensee.

64.  Irrespective of the foregoing, and in light of the Complainants' general contention reflected throughout their exceptions (i.e., the Examiner erred in considering and weighing the record evidence in this proceeding), we have on our own motion nevertheless reviewed the evidence bearing on this hearing issue vis-a-vis the Initial Decision to be certain that the Examiner's findings of fact are supported by and reflective of the record evidence and to be certain further that his conclusions also represent a fair and reasonable analysis of those findings.  Based on our review, we are in full accord with the Examiner's ultimate conclusions that it has not been demonstrated that the KRON investigations were either intended to or did in fact constitute attempts to harass, coerce or intimidate the Complainants; and that, consequently, Chronicle's qualifications to remain a Commission licensee are not called into question as a result of these investigations.  See discussion, paragraph 66, infra.

65.  While we are convinced that the conduct of Chronicle was reasonable and prudent in undertaking these investigations of the Complainants, n29 we have nevertheless noted some disturbing aspects of those investigations during our review of this portion of the record.  Specifically, we note that some of the investigators in conducting their interviews under subterfuge sought information which does not appear in keeping with the purpose and objectives of the investigations n30 and which the Review Board specifically pointed out should be avoided in defining the permissible scope of an investigation when it  [*801]  added this hearing issue.  n31 For instance, the record reveals that the investigators sought information as to the Complainants' personal social lives (Tr. 6541-43, 6648), past marital history (Tr. 6730-32) and whether or not the Complainants had ever indulged in the use of drugs (Tr. 6707). 

n29 The record reveals, and the Examiner found, that these investigations were commissioned on the recommendation of Chronicle's legal counsel; that Chronicle relied totally on the advice of its counsel, who were not without experience, in recommending and selecting an able investigative firm of excellent reputation to conduct these investigations; and that authorities of unquestionable competence on the subject of proper investigative techniques testified at the hearing that the objectives and methods of these investigations were both conventional and legitimate.  See paragraphs 214-235 of the I.D.

n30 Chronicle has maintained throughout this proceeding that the purposes of its investigation were to determine the backgrounds of Kihn and Streeter, to determine what their motives were in filing their complaints against the KRON renewal applications, and to determine who was behind, acting in concert with, or responsible for their respective actions. (Tr. 6516, 6520, 6848, 6859, 7256 and 7269.)

n31 As previously mentioned (paragraph 62 supra), the Review Board stated that by voluntarily placing themselves in an adversarial posture the Complainants exposed themselves to a reasonable and proper search of their credentials, but this is not to say that the Complainants consented to an exposure of their entire backgrounds and living habits.

66.  Whether or not the above was a result of ineptitude on the part of some of the investigators or was brought about because of an absence of specific instructions to these individuals need not be determined in the context of this proceeding, n32 since we have already concluded that Chronicle acted reasonably and prudently in commissioning these investigations and that the Complainants were not in fact harassed, coerced or intimidated so as to discourage their active participation in this proceeding.  This is not to say, however, that we are not concerned about the type of investigative conduct here noted or that we intend to condone all future litigative investigations utilizing such procedures.  Indeed, the danger of sanctioning such investigations, we believe, is readily apparent since it would clearly discourage members of the public, more timid than the Complainants in this proceeding, from bringing matters to the Commission's attention which fall within its regulatory powers and would also dampen the active participation of interested parties in Commission adjudicatory proceedings.  We thus hold that the licensee will be held strictly accountable for all such investigations; that it is therefore incumbent upon the licensee not only to choose responsible investigators but to impress upon them the need to adhere closely to legitimate means and purposes in the investigation; and that the investigators' failure in these respects will reflect adversely upon the licensee, and in a particularly flagrant case can even be disqualifying.  Thus, we wish to make it clear that, even though an investigation is not intended for the purpose of harassment, coercion, or intimidation, this Commission will nevertheless continue to examine thoroughly any investigation of parties participating in adjudicatory proceedings before this Agency.  When it is found that the scope, breadth, and techniques employed in such investigations are improper in the context of a particular proceeding, the party instituting this type of investigation will be held responsible and, where appropriate, adverse conclusions will be drawn.  In this case, the matter is one of first impression, and KRON-TV proceeded reasonably in choosing a responsible investigating organization under our new guidelines, it should have also impressed upon the investigators specifically rather than generally, the need to adhere to legitimate means and purposes in the investigation (see footnote 30).  We hold that in these circumstances, what occurred reflects adversely on KRON-TV, but is certainly not disqualifying.  Since all licenses are now put on notice as to what is expected of them, and that we do not mean to temporize  [*802]  in this area, we expect strict future compliance, with the warning that the adverse finding may be heightened in light of an improper occurrence after issuance of the guidance here given. 

n32 These matters are more appropriately directed to the Complainants' contentions of whether or not Chronicle is liable for the acts of the investigative firm under California state law involving action for the invasion of privacy, which we understand is presently before the state courts.

67.  Accordingly, IT IS ORDERED, That the renewal of motion for disqualification of Commissioner Johnson filed September 21, 1971, by Chronicle Broadcasting Co., IS DENIED.

68.  IT IS FURTHER ORDERED:

(a) That the petition for leave to amend filed April 28, 1971, by Chronicle Broadcasting Co., IS GRANTED, and the amendment associated therewith, IS ACCEPTED;

(b) That the motion for permission to file pleading in excess of prescribed length filed July 2, 1971, by Chronicle Broadcasting Co., IS GRANTED, and the brief in reply to Complainants' exceptions associated therewith IS ACCEPTED;

(c) That the motion for leave to file reply to Broadcast Bureau's reply to exceptions, filed July 14, 1971, by Chronicle Broadcasting Co., IS GRANTED, and the reply associated therewith, IS ACCEPTED;

(d) That the motion to correct transcript filed June 21, 1971, by Chronicle Broadcasting Co., as amended by an erratum filed May 26, 1972, also by Chronicle Broadcasting Co., IS GRANTED;

(e) That the petition to amend filed October 19, 1972, by Chronicle Broadcasting Co., IS GRANTED, and the amendment associated therewith, IS ACCEPTED; and

(f) That the above-captioned applications (File Nos. BRH-926 and BRCT-94) of Chronicle Broadcasting Co., for renewal of licenses of Stations KRON-FM and KRON-TV, San Francisco, California, ARE GRANTED.

69.  IT IS FURTHER ORDERED, That this proceeding IS TERMINATED.

 

FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.


DISSENTBY: JOHNSON

 

DISSENT:

 [*828]  DISSENTING OPINION OF COMMISSIONER NICHOLAS JOHNSON

On March 20, 1969, based on serious and substantial allegations in a petition to deny filed by Albert Kihn and Blanche Streeter, the FCC designated a hearing on Chronicle Broadcasting Company's applications to renew its licenses for KRON-TV and KRON-FM, San Francisco, California.  Today, after four years of procrastinated maneuvering, the majority -- like the Hearing Examiner before it -- literally twists and squirms in order to avoid the impact of its own findings.  In the face of immense problems of concentrated media control, anticompetitive practices, and illegal harassment of certain concerned members of the public, the majority, in what is by all odds one of its most outrageous decisions to date, simply winces and renews Chronicle's licenses.  I dissent.

In its initial designation order, the Commission allegedly sought to discover (1) whether the licensee's parent, Chronicle Publishing Co. (Chronicle) had amassed an undue concentration of media control in the San Francisco market; (2) whether Chronicle had engaged in anticompetitive practices with respect to its newspaper ownership and affiliations; and (3) whether Chronicle had employed its enormous media power in an effort to manage the news for the purposes of further expanding its burgeoning communications empire.  16 F.C.C. 2d 882 (1969). Subsequently, in the summer of 1969, the Review Board enlarged these issues in order to consider whether the public interest had been served by the licensee's covert "investigation" of the two citizens who had initiated this proceeding by filing petitions to deny Chronicle's license renewal applications.  18 F.C.C. 2d 120 (1969).

That hearing is now completed.  Indeed, that hearing -- and the staff's resolution of the complainant's exceptions to the Hearing Examiner's findings -- have been completed for several months.  n1 Now, at last, the majority is prepared to issue its decision which concludes -- not surprisingly, but nevertheless remarkably -- that renewal of these licenses will serve the public interest.  With this bizarre example of FCC wish fulfillment I cannot agree. 

n1 Why this hearing and review process has lasted for so many years is, itself, an interesting question.  Professor Stephen Barnett has suggested that by having its 1968 renewal application designated for such a prolonged hearing process, KRON has retained all the benefits of operating its station without the additional responsibilities of filing for future renewals, without the need for informing either the public or the FCC of its programming plans, and without the risk of dealing with a potential competing application.  See Barnett, "A Kronic Case," San Francisco Magazine, 38 (April 1973).  As Professor Barnett adds: "The Commission typically moves like a snail when this suits the interests of broadcasters, as it usually does."

I.  CONCERTRATION OF MEDIA CONTROL AND ITS ABUSES

Aside from its ownership of KRON-TV-FM, Chronicle also owns the San Francisco Chronicle -- one of the city's two daily newspapers -- and is part owner and publisher of the city's only Sunday paper.  Chronicle also owns Western Communications Inc., a CATV management company which, itself, owns and operates -- contrary to FCC policy -- several cable systems within KRON-TV's grand B contour.  n2  [*829]  Chronicle has also entered into a possibly illegal joint operating agreement with San Francisco's only other daily newspaper, the Examiner, and, among other things, this agreement has produced a commonly owned corporation to handle both newspapers advertising and circulation affairs. 

n2 These cable interests, of course, conflict with the FCC's rules barring broadcasters from owning or having interests in cable systems in the same market.  47 CFR §  76.501.  Presumably, then, Chronicle is in the process of resolving these rule violations through divestiture proceedings.

In view of these ownership patterns, coupled with substantial interlocking directorships and management at the highest levels, it is no wonder that the Hearing Examiner observed that Chronicle has a "powerful voice" in the San Francisco area.  Yet, despite this obviously euphemistic description of Chronicle's media power, the majority has no difficulty concluding that renewal of these broadcast licenses will serve the interests of the San Francisco public.

%first, the majority hesitates to reach the concentration issue at all, on the grounds that the FCC is currently considering the problem of newspaper-broadcast cross-ownership in a rulemaking proceeding, FCC Docket No. 18110.  On March 25, 1970, subsequent to the hearing designation in the instant case, the FCC issued a notice of proposed rulemaking designed to foster a diversity of communications services and viewpoints by limiting newspaper-broadcast bross-ownership in the same market.  Further Notice of Proposed Rulemaking, 22 F.C.C. 2d 339 (1970. In Hale v. FCC, 18 P.F. RR2d 2014 (1970), the United States Court of Appeals for the District of Columbia approved the FCC's policy of deferring questions of newspaper cross-ownership in the context of adjudicatory proceedings pending the Commission's resolution of Docket 18110.

That case was decided in 1970.  At that time, such judicial deference to the FCC's desire to formulate a coherent policy prior to the application of such policy in adjudicatory proceedings might have appeared reasonable.  However, it is by now mid-1973, and the resolution of the FCC's never-ending newspaper cross-ownership docket is nowhere in sight.

At this late juncture, no court could possibly approve this Commission's blatant policy of deferring to a rulemaking proceeding which was allegedly initiated to resolve a very serious problem, but which is really nothing more than a means of avoiding the need to examine that problem in the context of renewal proceedings.  Professor Stephen Barnett has dubbed this ingenious practice the FCC's "shell game," see Barnett, The FCC's Nonbattle Against Media Monopoly, COLUMBIA JOURNALISM REVIEW, 43 (Jan/Feb 1972), and the majority has repeatedly sought refuge in this game in order to avoid having to deal with problems of newspaper-broadcast cross-ownership.  See, e.g., Application of Radio hio, Inc., 38 F.C.C. 2d 721, 748 (1972). The instant case is yet another example of this sort of abuse of process.

Perhaps even more frustrating is the fact that in both Hale and RadiOhio the majority had declined to designate a hearing on the concentration issue pending resolution of Docket 18110, whereas in the instant case a hearing on this issue was not only designated, but it was, at least in theory, explored carefully by the Hearing Examiner and the staff before the majority decided to engage in its now infamous "shell game." Thus, the instant case is distinguishable from Hale and RadiOhio at least in part because deference to our rulemaking in those  [*830]  cases was, among other things, arguably a means of employing scarce man-power resources in what some might term an intelligent fashion.  In the instant case, those resources have already been expended.  The "shell game" has only resulted in waste.

Despite its eagerness to rely on its "shell game" as a means of avoiding the resolution of the instant concentration question -- a question which, I emphasize, was designated for hearing prior to the initiation of the further notice of proposed rulemaking in Docket 18110 and which, for that reason alone, should demand our immediate attention -- the majority admits that it will examine such questions if there is substantial evidence that the licensee's concentration of media control is "extreme" or has resulted in abusive, anticompetitive conduct.  See, e.g., Michiana Telecasting Corp., 26 F.C.C. 2d 21 (1970). Without even attempting to define these terms, the majority then simply decrees that Chronicle's concentration of control is neither extreme nor productive of anti-competitive practices.

In order to determine whether Chronicle's concentration meets the majority's undefined "extreme" standard, it is first necessary to define the relevant geographic market.

The majority asserts, without any authority, that the relevant market is KRON's grade B contour, and that the communities within this contour are served by several television stations, AM and FM stations as well as by at least 29 daily newspapers.  Even given this overly-expansive market definition, the staff concluded that about 10% of the population was exposed exclusively to media services owned by Chronicle.  Apparently, even this significant percentage does not meet the majority's non-standard of "extreme," concentration, but the more important point is that the majority did not correctly define the relevant market.

In Frontier Broadcasting Co., 21 F.C.C. 2d 570 (1970), the Commission designated a hearing on the licensee's renewal application (as in the instant case, prior to the initiation of the further notice of proposed rulemaking in Docket 18110) to determine whether Frontier had amassed an undue concentration of media control in the Cheyenne, Wyoming market.  n3 The licensee held the license to Cheyenne's only TV station, one of Cheyenne's four AM stations and one of Cheyenne's two FM's.  Frontier also owned the community's only newspaper, and had acquired a non-exclusive franchise for a cable system which would serve the same community. 

n3 Interestingly, Frontier argued that the Commission should not consider the concentration issue on an ad hoc basis but should wait until resolution of the proceeding in Docket 18110.  That Docket had not yet been specifically expanded to encompass consideration of the newspaper-cross-ownership problem.  But, in any event, the Commission, obviously aware of its impending further notice, specifically declined to delay consideration of Frontier's concentration of media control until after the culmination of Docket 18110.  In my view, that result cannot be reconciled with today's contrary conclusion.

Frontier argued that the relevant market (for purposes of determining whether these ownership patterns were unduly concentrated) was the market covered by the TV station's grade B contour.  That contour, said the licensee, extended into areas which were also served by Denver, Colorado stations, as well as Denver newspapers.  But the majority, agreeing with the arguments in a brief filed by the Justice  [*831]  Department, refused to so view the relevant market, defining it instead as the far more geographically limited area in and around Cheyenne.

Apart from this clear precedent, there are, moreover, strong policy reasons for defining the relevant market in a manner more limited than that adopted by the majority in the instant case.  Underlying the Commission's alleged concerns about undue concentration of media control is the belief that common ownership of those means of communications which provide a given community with information about local issues is not likely to produce a diversity of views on such issues.  Such diversity of views -- and hence diversity of media-ownership -- is valued because, as the courts have so often enunciated, our society is premised upon the proposition that truth will be more likely to emerge from vigorous debate than from adherence to a single source of information.  See, e.g., Judge Learned Hand's opinion in U.S. v. Associated Press, 52 F. Supp. 362, 372 (S.D.N.Y. 1943), aff'd sub nom, 326, U.S. 1 (1945).

While Chronicle's numerous media interests begin to encounter greater competition as one moves out of metropolitan San Francisco into the surrounding Bay area communities, the fact remains that a substantial (or, to use the majority's terminology, an "extreme") percentage of the medial outlets designed to serve the local needs of those persons in San Francisco proper are owned by Chronicle.  Thus, while the people in the nine-county Bay area may be exposed to some diversity of media views, those in San Francisco clearly are not.

In short, In believe that the relevant market in this case should be the metropolitan area of San Francisco, where Chronicle has an iron grip on the various sources of communication, and not the greater Bay area to which KRON-TV's grade B contour extends, and in which there are additional media services controlled by sources other than Chronicle.  n4 For these additional media services are not designed to, and do not, serve the local needs of the people of metropolitan San Francisco, but, rather, are designed to serve their own local communities.  In terms of what one student has called "local service potential," n5 then, those newspapers and radio and television stations whose primary service is to communities outside of San Francisco are simply not relevant to the San Francisco market.  And it is within that market that Chronicle has "extreme" concentration of media control. 

n4 The majority, by so broadly defining the geographic market, fails to focus on the fact that the San Francisco public has little choice but to receive its local news and information from Chronicle's media outlets.  In short, for this large segment of the population there are few alternatives to Chronicle's news sources.  See, e.g., the discussion in Mr. Justice Fortas' opinion in U.S. v. Grinnell Corp., 384 U.S. 563, 585 (1966), for the problems inherent in a market approach such as that taken by the majority in circumstances such as these.  While this approach obviously benefits the Chronicle corporation's interests, it simply ignores the interests of a very substantial number of people living within the boundaries of San Francisco.

n5 This term was used in a paper prepared by Douglas Woodlock for a seminar I taught at Georgetown law school in the fall of 1972.  Newspaper Ownership of Broadcast Facilities.  The paper in unpublished and is on file in my office.

The majority, of course, struggles to apply the broadcast possible market definition in the hopes of justifying the extremely tenuous conclusion that Chronicle's media empire is really not so powerful after all.  But even assuming arguendo that the majority is correct in  [*832]  concluding that Chronicle's control over the media in this area is not "extreme," the majority's conclusion that Chronicle's media concentration has not led to anticompetitive abuses is surely ridiculous.

First, complainants allege that the Chronicle Publishing Co. has engaged in anti-competitive practices through the imposition of unreasonably restrictive syndication contracts.  Interestingly, the majority does not even refer to this charge in the test of its opinion.

Complainants argue that with respect to most of these syndication contracts, Chronicle has extended territorial exclusivity within the entire nine county Bay area.  In other words, no other newspaper in that area may publish the syndicated columns for which Chronicle has contracted.  Yet, by publishing only 10% of such columns, Chronicle has prevented readers of other newspapers in the Bay area from reading the remaining 90%.

Apart from the question whether such a practice can possibly serve the public interest is the more serious question whether Chronicle has employed this territorial exclusivity unlawfully to defeat the interests of potential competitors.  Such contracts are not, of course per se violations of the Sherman Act, but they must be reasonably designed for a legitimate purpose -- e.g., copyright protection -- and may only be as extensive in territorial scope as is necessary to protect that purpose.  See, e.g., U.S. v. Chicago Tribune-N.Y. News Syn., Inc., 309 F. Supp. 1301 (S.D.N.Y. 1970).

In my view, by extending its exclusive syndication rights to the entire Bay area while, at the same time, refusing to publish 90% of those syndicated columns for which it has contracted, Chronicle has at the very least illustrated a prima facie case of bad faith and has very possibly violated the anti-trust laws.  It is difficult for Chronicle to argue -- unblushing at least -- that such extensive territorial restrictions are necessary to protect the rights of those columnists whose columns Chronicle never intended to publish.  The majority -- as it does so often -- resolves this thorny question by simply ignoring it.

Second, there is a serious question in my mind about whether Chronicle exhibited good faith in entering into its Joint Operating Agreement with its competing newspaper, the Examiner.  That agreement was executed in 1964, at the same time the Justice Department was proceeding against a similar agreement in Tucson, Arizona.  Chronicle argues that it did not indicate bad faith by executing this agreement in these circumstances because, despite advice of counsel (which argued against seeking Justice Department approval), Chronicle's president nevertheless wrote to the Justice Department seeking approval of the agreement.  That letter, however, was written in 1965 -- after the agreement had become a fait accompli; and, in any event, the Justice Department advised Chronicle that the agreement might well be subject to attack at some future time.

The majority does not consider the question of Chronicle's bad faith in these circumstances.  Rather, the majority simply notes that the Newspaper Preservation Act of 1970 grants retroactive protection to this Joint Operating Agreement and also precludes this or any other agency from penalizing the parties to that agreement.  If this statute grants limited retroactive antitrust immunity to any company, it  [*833]  grants it to Chronicle's agreement only if either Chronicle or Hearst (owner of the Examiner) had been in sufficient financial straits to meet the Act's requirement that all but one newspaper to an agreement of this sort be in serious financial difficulty.

It is not clear to me that the Hearing Examiner made such a finding with regard to either of these newspapers.  But perhaps the more important point is that, at the time this agreement was reached, there was no Newpaper Preservation Act, and Chronicle's conduct was certainly designed for purposes which must be viewed as anticompetitive and which, at the time, were almost surely illegal.  See Citizens Publishing Co. v. U.S., 394 U.S. 131 (1969). Though the statute would appear to preclude the FCC from attempting to interfere with this agreement (provided it meets the statutory test regarding financial difficulty), the statute does not prevent us from considering Chronicle's apparent bad faith in entering into this agreement.

When viewed together, then, Chronicle's joint operating agreement and its territorially exclusive syndication contracts, if not illegal, at least suggest that Chronicle was attempting to utilize its powerful media control in the San Francisco market for purposes antithetical to the public interest.  Under §  309 of the Communications Act of 1934, the FCC has no choice but to deny a renewal application where the licensee's conduct, even if not illegal, fails to serve the public interest.  This, in my view, is definitely that case.

II.  NEWS MANAGEMENT

Complainants contend that the Chronicle Broadcasting Co. Manipulated KRON-TV's news and public affairs coverage in an effort to enhance and further Chronicle's CATV and newspaper interests.  In essence, these allegations suggest further abuses arising from Chronicle's already ample media holdings in the San Francisco area.  In our order designating this issue for hearing, we placed the burden of introducing evidence on the complainants but put the ultimate burden of proof on the licensee.

Complainant Kihn was employed at KRON-TV for several years as a cameraman.  He explained that he became disillusioned with KRON's alleged policy of manipulating news and public affairs coverage of numerous events in an apparent effort to enhance Chronicle's CATV and newspaper interests.  Such disillusionment led Kihn to compile a diary of abuses.  Several instances of such alleged manipulation were reviewed during the hearing, and I deal here only with some of the more egregious examples, examples which, in turn, received equally egregious "resolution" by both the staff and the majority.

First, complainants alleged that KRON-TV engaged in numerous activities designed to encourage local communities to grant Chronicle's pending applications for CATV franchises.

Robert Anderson, a KRON writer assigned to do a documentary dealing with Vallejo, California (where Chronicle was seeking a franchise) testified that when he suggested an expose of that community's political factionalism, Harold P. See, one of Chronicle's  [*834]  officers and directors, told him to kill the story in order not to jeopardize Chronicle's franchise application.

See, of course, denied the conversation.  The Hearing Examiner found that Anderson was not attempting to falsify his testimony, though with the exception of See's allegedly extraordinary remarks, Anderson's memory of the events regarding the documentary was vague.  The staff appears to hold Anderson's "dim" memory against him.  Personally, I can see no reason why Anderson should have recalled any of the detailed events surrounding the Vallejo project except for any events which might have appeared bizarre.  See's alleged admonishments were surely bizarre, and it does not seem at all surprising that those remarks are the ones Anderson recalled.

The Hearing Examiner concluded that the evidence was inconclusive.  He then chose, for reasons which remain unclear, to believe See's denial.  The majority is eager to agree.

On another occasion, when KRON produced a one-half hour program on the San Carlos "Chicken Ball" (Chronicle also had a pending CATV application in San Carlos), a KRON cameraman testified that he heard KRON's news director tell the assignment editor (in the presence of one of Chronicle's corporate directors) that the extensive KRON coverage was due to the pending CATV franchise.  The majority does not argue that this and similar statements were never made; rather, the majority argues that they were made only by lower or middle management officials, not by major Chronicle officials.

There is also evidence that with respect to South San Francisco (where Chronicle also had a CATV application pending), See ordered KRON's news director to cover a story in that community in order to improve Chronicle's CATV chances.  Kihn produced a copy of a memo from the news director to this effect, but, not surprisingly, the original of that memo no longer appears in KRON's files.  See denies having so instructed his news director, though See admits that when the completed film was accidentally destroyed, See did write the mayor of South San Francisco apologizing and urging him not to hold the film's loss against Chronicle's pending CATV application.

Amazingly, the staff and majority conclude that "a finding that CATV interests affected KRON's programming is not warranted."

Complainants also allege that KRON manipulated certain news stories in order to foster Chronicle's newspaper interests.  For example, complainants allege that KRON refused to broadcast news of the Chronicle-Examiner joint agreement and that KRON also refused to broadcast news of a threatened Teamsters Union strike against San Francisco's newspapers.

Kihn alleges further that he was ordered by a fellow reporter to avoid extensive coverage of events occurring during a prolonged strike against the Chronicle newspaper.  The staff concluded, without either explanation or supportive testimony, that Kihn and the reporter had "had a simple disagreement on the value" of the story.

In response to evidence of various memoranda from See and the KRON news director concerning the need for Chronicle's media sources to maintain a good public image regarding Chronicle's media  [*835]  interests, the staff simply asserted, without any apparent basis, that See was concerned only with news accuracy.

There are, of course, many other allegations of news manipulation and an equal number of facile FCC responses.  What emerges from these responses is the rather disturbing realization that no matter what the allegation, no matter what the evidence, no matter how clear the proof, complainants never had a chance.  Aside from simply refusing to believe complainants' allegations, and aside from finding flimsy justifications for very damaging documents, the majority has employed two primary tools to defeat complainants' case against KRON.

First, the majority asserts that wherever the facts are so clear that incriminating manipulative conduct by various middle-management personnel cannot simply be disregarded, such conduct will not be held against the Chronicle corporation.  Aside from raising the question whether news manipulation by middle-management personnel somehow serves the public interest better than manipulation that is personally supervised by the corporate president, the majority's approach makes it almost impossible for these and other complainants to call corporate activities into serious question.

It is the rare case, indeed, where a member of the public -- or even a station's cameraman -- will be able to trace back orders from middle-management to the corporation's highest officials.  The majority, by requiring that the corporation's highest executives must be proved to have had knowledge of -- and to have condoned -- middle-management conduct, erects an impenetrable shield around the corporate vehicle.  The majority has recently expressed its preference for corporate -- as opposed to individual -- illegality, see Teleprompter Cable Systems,     F.C.C.     (1973), and so it simply extends that philosophy in this case.

But even assuming arguendo that the majority is correct in its holding that Chronicle's highest officials neither knew about nor approved the conduct of KRON's middle-management, the majority would seem to have established a prima facie case that Chronicle's highest officials simply abdicated their role as corporate supervisors.  The majority, of course, denies that complainants have established such a case of faulty supervision, but the majority does not even stop to ponder that it has done so itself.

In those cases where certain of Chronicle's higher management officials were allegedly linked to the various events of alleged news manipulation, both the staff and the majority conclude that the complainants failed to carry their burden of proof with regard to the motives of such high officials.  But, as we stated in our designation order, the ultimate burden of proof in this area was properly placed on the licensee because the facts surrounding Chronicle's conduct in this area were peculiar within its knowledge.

The Hearing Examiner concluded, however, that complainants could not prevail on the news management issue absent "clear, convincing and unambiguous evidence" of the licensee's motives.  Complainants suggest that such a standard requires that they prove KRON's motives beyond a reasonable doubt rather than by a preponderance of the evidence  [*836]  and that such a proof requirement reverses the burdens as determined in our designation order.

Complainants are surely correct, but both the staff and the majority attempt to support the Examiner's conclusions through reliance on our decision in Hunger in America, 20 F.C.C. 2d 143 (1969), where the Commission held that examples of alleged news management cannot be established absent evidence extrinsic to the actual contested programming content.  And, indeed, if a complaint of news management were to rely solely upon program content, the Commission would encounter substantial First Amendment problems if it did not demand such extrinsic evidence.

But the point in the instant case is that complainants have produced "extrinsic evidence," indeed voluminous extrinsic evidence, to establish KRON's rather insidious motives for the various programming practices documented in the petition to deny.  Such evidence is not only extrinsic to program content but, though it includes "speech" to the extent that it involves conversations and management orders, it is surely not subject to First Amendment protections.  Such conversations were clandestine.  They were surely not designed to encourage debate on public issues.  Further, those words which were introduced as evidence were the sort of speech encountered in conspiracy cases where X orders Y to "take care of" Z.  What the majority holds, in effect, is that even if it is clear that X so directed Y, principles of free speech somehow demand that X's motives be established by proof beyond a reasonable doubt.  This, I think, is absurd.

Like the majority's approach to the middle-management problem, the majority's imposition of such an impossible and unreasonable burden of proof not only illustrates the sort of typical FCC "curious neutrality in favor of the licensee" prohibited by the court in Office of Communications of United Church of Christ v. FCC, 425 F. 2d 543 (D.C. Cir. 1969), but it also reveals the extent to which this Commission will go to free a corporation from the implications of its own conduct.

In the instant case, complainants Kihn and Streeter have established substantial evidence of abusive conduct by the Chronicle Broadcasting Co., conduct which cannot possibly be in the public interest.  Complainants documentation of the alleged incidents of news management and manipulation are extensive and, in my view, terribly convincing and devastating.  But the majority -- in a manner very similar to that employed by various White House officials confronted with similarly damning charges with regard to corrupt practices -- squirms, twitches, and fidgets to avoid the truth, truth which can only lead the FCC to deny Chronicle's renewal applications.

Though the majority attempts to argue that complainants have failed to make out a particularly powerful case against Chronicle, it is obvious that the licensees was of a decidedly different view.  For, once confronted with this petition to deny and the accompanying factual allegations which Chronicle recognized as terribly serious, the licensee did the only thing it thought adequate to head off the complainants' charge: it attempted to harass and intimidate Kihn and Streeter.

 [*837]  III.  THE INVESTIGATION

Upon learning that complainants had filed a petition to deny Chronicle's license renewal applications, the licensee employed a private firm to investigate Kihn.  See contended that this investigation was conducted solely to determine whether Kihn was leading disgruntled KRON employees in some form of concerted conduct against the licensee.

The investigators gave false names to various records custodians in order to prevent Kihn from learning of the investigation.  The investigators followed Kihn by automobile and interviewed his neighbors.  Kihn only discovered that he was being investigated when he noticed a car was following him after a malfunction in the investigators' two-way radio system.

Upon being discovered, the investigation was temporarily discontinued.  But, after a hearing had been designated in this case, KRON had the stupidity, brazen confidence in the FCC, and gall to continue the invasion of Kihn's privacy.  But, the Hearing Examiner had even more gall when he concluded that under the circumstances, it would have been imprudent for KRON to have declined to engage in such an investigation.  One could, I suppose, say the same thing about General Motors' investigation of Ralph Nader, or the Republicans' "investigation" of the Democratic National Committee.

The staff found solace in the fact that the investigation was "discreet." Apparently, had the investigators been total buffoons, physically thrusting themselves awkwardly into Kihn's path, the staff might have been concerned.  But, no doubt, were the latter the case, the staff would simply note that nobody can really be harassed or intimidated by such incompetence.

Like the staff before it, the majority holds that the investigation does not reflect badly upon KRON and does not suggest that Chronicle is unqualified to hold broadcast licensee.  And this despite the fact that this investigation was almost certainly a violation of Kihn's rights to privacy.  See, e.g., Nader v. General Motors Corp., 25 N.Y. 2d 560, 255 N.E. 2d 765 (1970), which case has been expressly followed by the California court in which complainant Kihn has brought a civil action against the investigative firm.

In effect, the majority asserts -- and this is surely a most astounding comment, even in an opinion loaded with astounding comments -- that the fact that Chronicle may have violated the law does not mean that it has violated the public interest.  n6 I had always thought that one is entitled to presume that conduct prohibited by law is not in the public interest.  The majority, however, takes a decidedly more libertarian view -- at least when the interests of large corporations are at stake. 

n6 Oddly enough, with respect to the Joint Operating Agreement, the majority appears to conclude that since that agreement does not violate the law, it cannot be a violation of the public interest.  While I have substantial problems with the majority's analysis of the joint operating agreement, the majority's own reasoning would seem to suggest that if a licensee does violate the law, he has probably violated the public interest as well.  The majority asserts.  However, that the "short answer" to complainants' contention to this effect is that violations of California law by Chronicle have no relevance to the question whether Chronicle is a qualified licensee.  The short answer to the majority's "short answer" is unprintable, even in the FCC official reports.

 [*838]  The majority concludes further that this investigation was not designed to harass or intimidate Kihn or Streeter.  What, then, was the purpose of this covert attempt to pry into complainants' private lives?  Why, in short, did Chronicle investigate complainants' marital affairs if not in an attempt to uncover damning and intimidating evidence?

The majority concludes, mercifully, with the assertion that since these investigations obviously did not divert complainants from the their attack on KRON's licenses, such investigations do not suggest that KRON's licenses should not be renewed.  Perhaps this is the most remarkable conclusion of them all, for the point is not whether Kihn and Streeter were successfully intimidated (though Chronicle certainly tried its best); it is, rather, whether potential complainants against future renewal applications of different licensees will be made reluctant by today's approval of Chronicle's conduct.  And I think there can be no question but that members of the public will think twice before initiating petitions to deny once they realize that such petitions could open them up to investigations of this type.

On at least one prior occasion the majority has expressed its disapproval of such intimidating tactics by licensees, Fort Collins Broadcasting, 38 F.C.C. 2d 707 (1972). But, as in that case and today's such admonishments are words and nothing more.  n7

n7 During the Commissioners' brief discussion of its opinion, the majority decided to add some concluding language disapproving the scope of the licensee's investigation of Kihn.  Such disapproval, the majority assured, would not lead to denial of renewal but would serve as a "warning" to licensees not to conduct such investigations in the future.  Similar cautionary language was added to the Fort Collins decision when it was discussed late last year.  The sad fact is that such admonishments are words but nothing more, for no licensee could have believed, prior to the issuance of the majority's opinion in today's case, that an investigation of the sort engaged in here could serve either the public interest or the FCC's processes.

And therein lies the tragedy of today's decision.  Today the FCC majority has proved beyond a shadow of a doubt that the public must lose when it attempts to correct the grossest wrongs committed by the largest of America's communications corporations.  The fact is that this entire license renewal proceeding has been a ritual -- nothing more and nothing less.  It has wasted countless amounts of time and effort.  It has produced some incredible casuistry from those charged with finding the facts and enunciating the appropriate policy choices.  But the result was preordained a long time ago.  The long process of hearings and opinion-writing has added nothing of value either to the law or the public interest.  The only addition has been paper.

I dissent.  n8

n8, By my participation in this case, I obviously concur, without comment, in the majority's disposition of the disqualification issue in this case.


APPENDIX:

 

APPENDIX

Rulings on Exceptions of Complainants Albert Kihn and Blanche Streeter to the Initial Decision

 

Exception No.

Ruling

1 (1st Para., 1st sent.), 1

Denied.  By commonly accepted

 

definition, the San

(2d para.), 38.

Francisco "Bay Area" is

 

comprised of the nine

 

counties bordering on the

 

Bay.  Since these nine

 

counties comprise the area

 

of the Chronicle's pri-

 

mary circulation, the area

 

of active competition

 

between the Chronicle and

 

other Bay Area news-

 

papers, the area of territorial

 

exclusivity com-

 

monly granted the Chronicle

 

in its contracts for

 

syndicated materials, and

 

since the area roughly

 

approximates the Grade B

 

contour of KRON-TV,

 

the Hearing Examiner, in

 

making the comparisons

 

of newspaper circulations,

 

properly chose the en-

 

tire nine county area as the

 

relevant market.

1 (1st para., 2d sent), 17

Denied.  The Examiner's

 

findings are adequately sup-

(p. 6), 30 np. 10), 34, 35

ported by the record

 

evidence and represent a fair

(re KRON-TV), 48 (1st

and reasonable interpretation

 

thereof.

sent.), 51, 52, 71 (p.

 

21), 145, 160, 164, 168,

 

194, 195 (2d & 3d sent.),

 

221, 269, 271, 280, 281,

 

289, 293-295, 323, 336,

 

354 (1st para.), 362,

 

363 (1st sent.), 364.

 

2

Denied.  The requested

 

finding would provide only

 

a partial picture of

 

the actual situation and is

 

thus contrary to the

 

weight of the evidnece.  See

 

KRON Ex. No. 154, App. A.

3-5, 7, 8

Denied.  The requested

 

findings assume that the

 

relevant market is a five

 

county area, whereas the

 

Examiner has properly

 

found the relevant market

 

to be a nine county area.

 

See the ruling on excep-

 

No. 1, above.

6

Denied.  The requested

 

finding is of no decisional

 

significance.  Moreover,

 

"California Living" is a

 

supplement to the Sunday

 

Examiner and Chronicle

 

newspaper and is not

 

a separate magazine in the

 

usual sense.

9

Denied.  Complainants'

 

contention that the survey

 

was based on hearsay

 

and should thus be given no

 

evidentiary weight does

 

not represent the appli-

 

cable law.  Cf., for instance

 

In Re Crown Zellerbach

 

Corporation, 51 FTC 1105

 

(1955); United States v.

 

88 Cases, Etc., Bireley's

 

Orange Beverage, 187 F.

 

2d 967 (3d Cir. 1951)

 

cert. denied, 342 U.S. 861

 

(1951).  Moreover, the

 

Complainants were afforded

 

ample opportunity to

 

submit rebuttal evidence and

 

to conduct such cross-examination

 

as they believed

 

necessary to show that

 

the survey was either im-

 

proper or unrepresentative

 

as is contended.  Fur-

 

termore, the underlying

 

documents upon which

 

the survey was based

 

were always available to

 

the Complainants and

 

were not withheld from

 

them.  The Examiner's

 

findings and conclusions

 

were correct and are

 

supported by law.  Wirtz v.

 

Baldor Electric Co., 337

 

F. 2d 518 (D.C. Cir. 1963).

10, 22, 25, 26-29 (pp. 9-

Denied.  The requested

 

findings are of no decisional

10), 29-33 (pp. 11-12),

significance.

44 (p. 16), 46 (p. 16, 1st

 

sent.), 68 (p. 21), 92, 96,

 

100, 108, 110, 156, 170,

 

176, 184, 188, 192, 212,

 

252, 262, 266, 278, 290,

 

297, 314, 316, 383, 515,

 

522, 533, 534.

 

11, 50, 77, 79, 81, 105, 158,

Denied.  The Examiner's

 

findings are adequately

175, 179, 181, 182, 223,

supported by the record

 

evidence and represent a

224, 237, 254-256, 261,

fair and reasonable

 

interpretation thereof.  Further

332.

Complainants' requested

 

findings are of no de-

 

cisional significance.  Also,

 

the Examiner is not re-

 

quired to make findings

 

on every conceivable point

 

on which evidence is offered.

12

Denied.  The Examiner

 

has found that Western TV

 

Cable does not propose

 

to activate its San Fran-

 

cisco franchise (I.D.

 

para. 9).  Thus, the requested

 

finding is of no decisional

 

significance.

13-16 (pp. 4-5), 16 (p. 6),

Denied.  The Examiner's

 

findings on these matters

24, 49, 67 (pp. 20-21),

of record are, for all

 

intents and purposes, simi-

66 (p. 22), 72 (p. 24),

lar to those requested

 

by the Complainants.  The

78, 91, 98, 99, 157, 161,

additional details outlined

 

in Complainants' ex-

163, 189, 210, 227, 238,

ceptions would add

 

nothing of substance to the

240, 274 (1st para.), 298,

Examiner's findings

 

and are therefore of no de-

350-352, 353 (1st sent.),

cisional significance.

17 (p. 5)

Denied.  We find nothing

 

unusual or illegal in the

 

Chronicle trade agreement

 

to which the Complain-

 

ants' refer, and thus

 

the requested findings in

 

this respect would be

 

decisionally insignificant.  The

 

requested finding as to

 

money spent by the San

 

Francisco Chronicler for

 

advertising in other media

 

owned or controlled by

 

Chronicle is contrary to the

 

record and the exhibit

 

cited (see B. B. Ex. No. 4,

 

p. 5).

15 (p. 6), 18, 35 (re. news-

Denied.  The Complainants'

 

exceptions clearly vio-

paper), 36, 37, 45 (p.

lat Section 1.277(a)

 

of the Commission's Rules

15), 146-151, 206, 207,

in that they are

 

argumentative and/or unsup-

209, 242-250, 253, 257-

ported by record citations.

260, 263, 268, 270, 274

 

(2d para.), 299-303,

 

310-313, 327, 344-346,

 

349, 353 (2d & 3d

 

sents.), 503, 504.

 

19, 74 (p. 24), 272, 337,

Denied.  Section 1.277(a)

 

of the Commission's Rules

356.

provides that each exception

 

to an initial deci-

 

sion shall contain specific

 

references to the (pages)

 

of the transcript of

 

hearing, exhibit, or order on

 

which the exception is

 

based.  Complainants' ex-

 

ceptions contain no such

 

citations.  In addition, the

 

requested findings are of

 

no decisional significance.

20, 21

Denied.  These exhibits

 

were given proper weight by

 

the Examiner.  The exhibits

 

were prepared by an

 

expert on the basis of

 

the best information and

 

techniques available.

 

The originally prepared ex-

 

hibit was revised in accordance

 

with suggestions

 

by the Complainants and

 

the Bureau (Tr. 4493-

 

4508, 4602-13).  Further,

 

the Examiner categorized

 

his findings as estimates

 

and properly treated them

 

as such (I.D. fn. 17).

23, 55, 56, 69 (p. 21), 70

Denied.  The Examiner's

 

findings are adequately sup-

(p. 21), 82, 83, 112-116),

ported by the record evidence

 

and represent a fair

153, 154, 198, 203, 319,

and reasonable interpretation

 

thereof.  Further,

320, 365, 366 (2d-5th

Complainants' exceptions

 

are unsupported by a

and 7th sents.)

citation to the record as

 

required by Section 1.277

 

(a) of the Commission's Rules.

39

Denied.  Complainants'

 

assumption is not supported

 

by the record.  Further,

 

the exception is not sup-

 

ported by a citation to

 

the record as required by

 

Section 1.277(a) of the

 

Commission's Rules.

40

Denied.  The requested finding

 

is not supported by

 

the record.  B.B. Ex.

 

No. 39 refers only to the

 

advertising revenue of the

 

San Francisco Chronicle.

41 (pp. 13-14)

Denied.  The requested finding

 

is contrary to the evi-

 

dence of record (see the

 

stipulation of the parties at

 

Tr. 5397).

41 (p. 14)

Denied.  The Examiner's

 

finding is not based upon

 

KRON Ex. No. 183 but

 

rather upon testimony elic-

 

ited by counsel for Complainants

 

and the Broadcast

 

Bureau concerning the

 

Hearst losses (Tr. 5049,

 

5070).  The "actual figures"

 

cited by Complainants

 

in their exception are

 

irrelevant since the exhibit

 

upon which they are based

 

has not been admitted

 

into evidence.  The Hearing

 

Examiner properly

 

precluded testimony

 

relating to the effects of a

 

modern plant on Hearst's

 

operations, since such

 

matters relate solely to

 

the San Francisco Exam-

 

iner and are therefore

 

irrelevant to this proceed-

 

ing.  The last sentence

 

of Complainants' exception

 

is speculative, argumentative

 

and is not based on

 

the evidence of record.

42

Denied.  The Examiner's

 

finding is supported by the

 

evidence (Tr. 5111-12,

 

5179 (2d page so numbered),

 

5258-59).

43 (p. 15), 47, 66 (p. 20)

Denied.  The Examiner's

 

finding concerning the "basic

 

thrust" of Chronicle's

 

campaign is supported by

 

the evidence (Tr. 5132-33,

 

5180-81).  Complainants'

 

assertion relating to

 

accumulated surplus is of no

 

decisional significance.

 

The Examiner's finding that

 

the profits generated by

 

Chronicle's broadcast in-

 

terests were used to support

 

its newspaper inter-

 

ests is supported by

 

the evidence.  In addition, these

 

exceptions are not

 

supported by citations to the

 

record as required by

 

Section 1.277(a) of the

 

Commission's Rules.

44 (p. 15)

Denied.  The Examiner's

 

finding reflects the census

 

data determined and

 

published by an agency of the

 

United States government

 

and is a proper subject

 

for judicial notice.

 

Complainants do not allege that

 

they were denied "an

 

opportunity to show the con-

 

trary" as permitted by

 

Section 7(d) of the Admin-

 

istrative Procedure Act.

 

Alkima Broadcasting Co.,

 

21 R.R. 742a, 742c (1961).

46 (pp. 15-16)

Denied.  The record reflects

 

that the sale of the San

 

Francisco Examiner

 

was not an available alter-

 

native (Tr. 6310), and

 

the Complainants cite no

 

evidence to the contrary.

 

The Hearing Examiner's

 

evidentiary ruling was

 

correct for the reason he

 

stated (Tr. 4796).

43 (p. 16)

Denied.  The requested finding

 

is of no decisional sig-

 

nificance.  The fact

 

remains that Chronicle volun-

 

tarily requested a Business

 

Review Letter and the

 

Civil Investigative Demand

 

was issued thereafter.

45 (p. 16, 1st sent.), 58-62,

Denied.  The Hearing

 

Examiner found that although

64 (p. 20).

Mr. Thieriot "was not

 

privy to the Examiner's

 

financial records,..."

 

he knew that it was losing

 

money (I.D. para. 37).

 

This finding is supported

 

by the record (Tr. 4845-46,

 

4848-49).  That neither

 

Mr. Thieriot nor any

 

other executive of Chronicle

 

knew exactly how much

 

money the Examiner was

 

losing is not of decisional

 

significance since the

 

record shows that Mr.

 

Thieriot knew that the

 

major question before

 

the Department of Justice

 

was the financial condition

 

of the Hearst news-

 

papers (Tr. 5259).  In

 

addition, Exception Nos. 60-

 

62 are not supported

 

by citations to the record as

 

required by Section

 

1.277(a) of the Commission's

 

Rules.

45 (p. 16, 2d sent.)

Denied.  The requested

 

finding is irrelevant to this

 

proceeding since it

 

relates solely to the Hearst

 

newspapers.

46 (p. 16, 2d sent.), 72

Denied.  See paras. 49-52

 

of our decision herein.

(p. 21).

 

48 (2d sent.)

Denied.  Complainants'

 

exception is contrary to the

 

evidence.  The record

 

indicates that Mr. Thieriot's

 

primary motives were

 

the survival of the Chronicle

 

newspaper and the

 

maintenance of two editorial

 

voices in San Francisco

 

(Tr. 4863, 4866, 5258-59).

 

In addition, this exception

 

is not supported by a

 

citation to the record

 

as required by Section

 

1.277(a) of the Commission's

 

Rules.

 

53, 54

Denied.  The requested

 

 

findings are of no decisional

$'significance in light

 

 

of the Newspaper Preserva-

 

tion Act, 15 U.S.C. 1801.

 

In addition, Complainants'

 

exceptions are not

 

supported by a citation to the

 

record as required

 

by Section 1.277(a) of the

 

Commission's Rules.

57

Denied.  The requested

 

finding is contrary to the evi-

 

dence and is not supported

 

by Complainants' cita-

 

tion to the record.

63

Denied.  The requested

 

finding is contrary to the

 

evidence (Tr. 6268-72,

 

6308-09) and is not sup-

 

ported by a citation

 

to the record as required by

 

Section 1.277(a) of the

 

Commission's Rules.

65 (p. 20)

Denied.  The evidence of

 

record indicates that the sale

 

of the San Francisco

 

Examiner was not an avail-

 

able alternative (Tr.

 

6310) and Complainants cite

 

no evidence to the

 

contrary.  The fact that the

 

Chronicle was never

 

placed on the open market for

 

sale is irrelevant

 

and is not of decisional

 

significance.

73 (p. 21)

Denied.  The Examiner's

 

finding is correct and is

 

supported by the record.

 

The requested finding is

 

not supported by Complainants'

 

citations to the

 

record.

64 (p. 22)

Denied.  The record indicates

 

that the increase in

 

advertising rates was

 

caused by an increase in

 

costs (Tr. 4781, 4789,

 

4804-05).

65 (p. 22)

Denied.  The requested

 

finding is contrary to the evi-

 

denied.  The record indicates

 

that the rates were

 

never reduced because

 

there was no way to reduce

 

them and not incur losses

 

(Tr. 4803).

67 (pp. 22-23)

Denied.  It was conceded

 

that the committee was un-

 

able to find a situation

 

totally comparable to that

 

in San Francisco, and

 

and Examiner so found (I.D.

 

fn. 29).  It cannot be said

 

that the committee erred

 

in choosing Detroit,

 

Michigan, as the next best

 

alternative.

68 (p. 23)

Denied.  The Examiner's

 

findings are supported by

 

the record (Tr. 5307-15,

 

6101-02, 6108, KRON Ex.

 

Nos. 177, 187), and the

 

studies were properly ac-

 

corded evidentiary weight.

 

In addition, Complain-

 

ants' exception is not

 

supported by a citation to the

 

record as required by

 

Section 1.277(a) of the Com-

 

mission's Rules.

69 (p. 23), 621

Denied.  The record

 

supports the Examiner's charac-

 

terization oif Prof.

 

Rostow as an experty witness

 

(Tr. 6191-97, KRON

 

Ex. No. 193) and his opin-

 

ions and conclusions

 

were within his area of

 

competence and were

 

subjected to extensive cross-

 

examination.  The weight

 

to be accorded Prof.

 

Rostow's expert testimony

 

was within the discre-

 

tion of the Examiner

 

(Arc Realty Co. v. Commis-

 

sioner of Internal Revenue,$

295 F. 2d 98, 103, (8th

 

 

Cir. 1961)).  In addition,

 

Complainants' Exception

 

No. 69 (p. 23) is not

 

supported by a citation to

 

the record as required

 

by Section 1.277(a) of the

 

Commission's Rules.

70 (pp. 23-24)

Denied.  The Examiner's

 

finding is supported by the

 

record, and the Complainants'

 

requested finding is

 

contrary thereto (Tr.

 

5048-51, 5075-76, 5082-83,

 

6258-59, 6304-05, 6310).

 

In addition, the requested

 

finding is not supported

 

by a citation to the record

 

as required by Section

 

1.277(a) of the Commis-

 

sion's Rules.

71 (p. 24, 1st and 2d

Denied.  The Examiner's

 

finding is supported by the

sents.)

evidence, and the

 

Complainants' requested finding

 

is contrary thereto (Tr.

 

4772-73, 5242-43, 5384-85).$

In addition, the requested

 

 

finding is not supported

 

by a citation to the

 

record as required by Sec-

 

tion 1.277(a) of the

 

Commission's Rules.

71 (p. 24, 3d sent.)

Denied.  The record

 

indicates that the percentage of

 

advertisers using the

 

combination rate is in line

 

with national trends

 

(Tr. 6117-18, 6127, 6149-50,

 

6167-68), and the exact

 

percentage in San Fran-

 

cisco is without decisional

 

significance.  The "sanc-

 

tions" alleged by

 

Complainants are not supported

 

by the evidence.  The

 

record indicates that the

 

Chronicle Only and

 

the Examiner Only want ads

 

are placed in separate

 

sections of the newspapers

 

for reasons of economy

 

of production (Tr. 4773-

 

74) and that the Chronicle

 

Only section receives

 

the same classification

 

titles and numbers as those

 

advertisements appearing

 

in the combination ad-

 

vertising (Tr. 4831-32).

73 (p. 24)

Denied.  Complainants'

 

exception is without decisional

 

significance.  The Examiner's

 

finding is supported

 

by the evidence, and

 

the Complainants' argument

 

with respect to the

 

burden of proof is without

 

merit.

75

Denied.  The record

 

indicates that the linage figures

 

were adjusted to reflect

 

the newspaper strike (Tr.

 

5225, 6142-43).  In addition,

 

Complainants' excep-

 

tion is not supported

 

by a citation to the record as

 

required by Section

 

1.277(a) of the Commission's

 

Rules.

76

Denied.  The Examiner's

 

finding is correct and is sup-

 

ported by the record

 

(Tr. 4446-48, 5419-21, 5439).

 

In addition, Complainants'

 

exception is not sup-

 

ported by a citation

 

to the record as required by

 

Section 1.277(a) of

 

the Commission's Rules.

80

Denied.  The Examiner correctly

 

found that Chronicle

 

has rights to 70 nationally

 

syndicated features,

$'most of which provide

 

 

for territorial exclusivity

 

(I.D. paras. 58-60).  No

 

useful purposes would

 

be served by enumerating

 

each syndication con-

 

tract which Chronicle

 

has executed as the Com-

 

plainants request.  Such

 

additional findings would

 

be decisionally insignificant.

84

Denied.  The requested

 

finding is contrary to the

 

record (Tr. 4584-85) and

 

is not supported by a

 

citation thereto as required

 

by Section 1.277(a)

 

of the Commission's Rules.

85

Denied.  The requested finding

 

is contrary to the

 

evidence (KRON Ex.

 

Nos. 155, 178).  In addition

 

Complainants' exception

 

is not supported by a

 

citation to the record

 

as required by Section

 

1.277(a) of the Commission's

 

Rules.

86

Denied.  The requested

 

finding is contrary to the

 

weight of the evidence (Tr.

 

4989, 5011-15, 5135-42,

 

5183-84).

87

Denied.  The requested

 

finding is contrary to the

 

evidence (Tr. 6100-02, 6108,

 

6307-09, KRON Ex.

 

No. 187).  In addition,

 

Complainants' exception is

 

not supported by a citation

 

to the record as required

 

by Section 1.277(a) of

 

the Commission's Rules.

88

Denied.  The Examiner's finding

in I.D. para. 76

 

 

does not imply that Mr.

 

See's interest in CATV

 

originated in 1964 but

 

only that it matured in

 

1964.  This finding is supported

 

by the evidence of

 

record.  (Tr. 1393, 1724,

 

KRON Ex. No. 47).

89

Denied.  The requested finding

 

is contrary to the

 

record.  Mr. See was referring

 

to pay TV by wire,

 

not CATV (Tr. 1575-76).

90

Denied.  See paragraphs 57-60

 

of our Decision.

93

Denied.  The Examiner has

 

found that the purpose

 

of the community luncheon

 

program was to deter-

 

mine community needs and

 

interests (I.D. fn. 42)

 

and his finding is supported

 

by the record.  The

 

remainder of Complainants'

 

exception, concerning

 

Mr. See's motives, is speculative,

 

argumentative,

 

and in large part is totally

 

unsupported by the

 

record.

94

Denied.  The requested finding,

 

as it concerns Mr.

 

See's motives, is speculative

 

and argumentative.

 

In addition, Complainants'

 

exception is not sup-

 

ported by a citation to the

 

record as required by

 

Section 1.277(a) of the

 

Commission's Rules.

95

Denied.  The requested findings,

 

in the first sentence,

 

fourth sentence, and the

 

first clause of the fifth

 

sentence, are adequately

 

outlined in the Examiner's

 

findings in I.D. para.

 

76.  (Cf., our ruling on

 

Complainants' Exception

 

No. 88, supra).  The re-

 

mainder of Complainants'

 

exception is speculative,

 

argumentative, and without

 

record support.

97

Denied.  Mr. See clarified his

 

position with respect to

 

pay TV (Tr. 1574, lines 16-17).

 

101-104

Denied.  The Examiner found

 

 

that Mr. See contacted

 

various California communities

 

inquiring about

 

CATV franchises (I.D.

 

para. 76).  The record indi-

 

cates, and Complainants

 

acknowledge in their ex-

 

ceptions, that the contacts

 

referred to were form

 

letters.  The record further

 

indicates that these let-

 

ters were primarily aimed

 

at obtaining information

 

(Tr. 1731, 1733, 2903-04,

 

2906).  Therefore, the texts

 

of these letters and the

 

names of the persons or

 

communities to which they

 

were sent is without

 

decisional significance.

106

Denied.  The location of

 

the communities in which

 

Chronicle has filed CATV

 

applications does not re-

 

flect adversely upon Chronicle.

 

The record indicates

 

that both KRON and the

 

Chronicle are located in

 

San Francisco and that

 

the parent company owns

 

no broadcast or publishing

 

business elsewhere.  We

 

believe, therefore, that

 

it is both reasonable and

 

logical that Chronicle

 

would seek to enter CATV

 

in this same area.

107, 366 (6th sent.)

Denied.  The requested finding

 

distorts the testimony

 

of Mr. See.  He testified

 

that KROZ-TV would

 

cover all news stories, if

 

warranted out -- "Not to

 

enhance our competitive

 

position." (Tr. 1963).

 

109

Denied.  Since Mr. See was

 

 

responsible for Chroni-

 

cle's CATV activities, it

 

was not improper for him

 

to activities, it

 

was not improper for him

 

to actively promote CATV

 

applications.  Nor can

 

it be said that the promotional

 

methods he used

 

were improper.  Finally,

 

the Examinr has found

 

that subordinate employees

 

of KRON-TV were uti-

 

lized on occasion through

 

March, 1967 (I.D. para.

 

77).

111

Denied.  The Examiner's findings

 

are fully supported

 

by the evidence of record

 

(Tr. 1681-83, 2881-82,

 

3542-43, KRON Ex. No.

 

33).  In addition, Complain-

 

ants' exception is not

 

supported by a citation to

 

the record as required

 

by Section 1.277(a) of the

 

Commission's Rules.

117

Denied.  The Examiner's

 

finding is correct and is sup-

 

ported by the record

 

(Tr. 1620-21, 1776-77, 3074,

 

3412-13, 3466, 3650-51, 3667).

118

Denied.  Mr. See's testimony

 

has been taken out of

 

context.  He testified that

 

his interest in Vallejo as

 

a city for a possible

 

CATV franchise was, "Not

 

above any other city."

 

(Tr. 1396)

119

Denied.  The Examiner found

 

that Mr. See attended

 

the January 1966, meeting

 

(I.D. fn. 45).  The re-

 

mainder of Complainants'

 

exception is without

 

decisional significance.

120

Denied.  In response to an

 

interrogatory concerning

 

the genesis of the Vallejo

 

documentary, Chronicle

 

cited both the March

 

1965 and March 1966 com-

 

munity luncheons (B.B.

 

Ex. No. 3, p. 48, Tr. 1617).

 

Although Chronicle had

 

no active CATV interest in

 

the area at the time of

 

the first luncheon, Mr. See

 

testified that Chronicle

 

was "within three weeks"

 

of sending out the form

 

letter of inquiry (Tr. 1617).

 

The fact that the documentary

 

was done after the

 

letter was sent does not

 

reflect adversely on the

 

licensee.  See also paragraphs

 

57-60 of our Decision.

121

Denied.  The Examiner has

 

found that Chronicle was

 

interested in CATV in the

 

Vallejo area (I.D. para.

 

93).  The correspondence

 

between Mr. See and City

 

Manager Ficklin is not

 

decisionally significant in

 

view of the preponderance

 

of the other evidence

 

developed in this case.

122

Denied.  The Examiner has

 

made the findings re-

 

quested in the first two

 

sentences of Complainants'

 

exception (I.D. paras. 80,89).  The remainder of

 

Complainants' exception

 

is of no decisional

 

significance.

 

123

Denied.  The Examiner's finding

 

 

is fully supported by

 

the evidence of record

 

(Tr. 1404, 1625-26, 1785-87,

 

5809-10).

124-131, 133-136

Denied.  The Examiner's findings

 

in I.D. paras. 82-88

 

are complete and accurately

 

reflect the record.

 

Complainants' requested

 

findings reflect primarily

 

the testimony of Mr.

 

Anderson given on direct ex-

 

amination and do not take

 

into account the matters

 

elicited on cross-examination.

 

Although it is appar-

 

ent that Mr. Anderson had

 

no motive to misrepre-

 

sent, his testimony clearly

 

shows his "recollection

 

to be dim."

132

Denied.  See paragraphs 57-60

 

of our Decision.

137

Denied.  The Examiner found

 

that Mr. See both cau-

 

tioned Mr. Anderson and

 

discussed the program

 

with him (I.D. para. 81)

 

and that finding is sup-

 

ported by the record.

138

Denied.  The Examiner so

 

found (I.D. paras. 81, 84).

139

Denied.  KRON Ex. No. 116

 

refers to news stories

 

(Tr. 3456), not documentaries.

 

There is no support

 

in the record for Complainants'

 

assertion.

140

Denied.  The statements made

 

to the Commission in

 

the letters cited were

 

truthful.  The "interest"

 

which Chronicle had was

 

limited to the mailing

 

of form letters regarding

 

CATV to a large number

 

of California communities.

 

These letters were pri-

 

marily aimed at obtaining

 

information (Tr. 1726-

 

27, 1730, 1732-33, 2903-04, 2906).

141, 142

Denied.  The record indicates

 

that Mr. See did, in fact,

 

attend the June 27, 1966,

 

meeting but that he left

 

after receiving an award

 

which was the first item

 

on the agenda.  He did not

 

attend any portion of

 

the meeting which considered

 

the proposed CATV

 

ordinance (Tr. 1800, 1839,

 

3468, 3644-45).  The purpose

 

for the attendance

 

of the attorneys at the

 

1967 meetings was to ensure

 

the passage of good,

 

non-punitive, CATV legislation

 

in Vallejo (Tr.

 

2887-88, 2928-29).  The

 

purpose of the luncheon

 

with Mr. Spight was to

 

discuss the possibility of

 

CATV joint ventures,

 

principally in South San

 

Francisco, and although

 

Vallejo was discussed it

 

was only with reference to

 

the defeat of the CATV

 

ordinance the previous day

 

(Tr. 1839-40, Comp.

 

Ex. No. 59).  The possibility

 

of a joint venture in

 

Vallejo did not arise until

 

1967 (Tr. 1412).  Mr.

 

Ficklin's letter is completely

 

true and honest

143

Denied.  The "interest"

 

Chronicle had in Vallejo

 

CATV at the time of the

 

community luncheon was

 

only a general one, as evidenced

 

by the fact that

 

only form letters were sent.

 

These letters were pri-

 

marily aimed at obtaining

 

information (Tr. 1395-

 

96, 1413-14, 2903-06).

 

Complainants have taken the

 

quoted from Mr. Ficklin's

 

letter out of context (see

 

Tr. 1413).

144

Denied.  Mr. See's representation

 

to the Commission

 

was true.  The record

 

indicates that in April, 1966,

 

Mr. Hammett verbally

 

reported his conclusion to

 

Mr. See that most of

 

Vallejo received tolerable

 

signals and was "well

 

illuminated" (Tr. 1835-36).

 

Complainants' exception

 

refers to Mr. Hammett's

 

written confirmation of

 

this earlier oral report.

152

Denied.  The Examiner's

 

finding is supported by the

 

weight of the evidence.

 

Both Messrs.  See and

 

Anderson testified that

 

there was only one meeting

 

between them.  (Tr. 1799,

 

2651).  Mr. Anderson's

 

explanation of his language

 

in the June, 1967,

 

tape that they told him

 

"previous to the time

 

[he]... went into production,

 

why they wanted

 

the show done" (Tr. 2717,

 

emphasis added) further

 

supports the Examiner's finding.

155

Denied.  The Examiner

 

found that the San Carlos

 

CATV franchise was

 

not awarded to Chronicle

 

(I.D. para. 112).  While

 

Mr. See's statement was

 

inaccurate, it cannot

 

be said that it constituted

 

a misrepresentation to

 

the Commission.  The record

 

discloses that Chronicle's

 

subsidiary was not a

 

serious contender for the

 

franchise, since the City

 

Council had decided on

 

an underground system

 

whereas the Chronicle

 

subsidiary continued to pro-

 

pose an overhead system

 

(Tr. 2897, 2927, 2932,

 

3191-92, 3197, 3198,

 

KRON Ex. Nos. 97, 106).

159

Denied.  The Examiner

 

found that Mr. Sutton was

 

formerly employed by

 

Chronicle (I.D. para. 110).

 

The remainder of the

 

requested finding is of no

 

decisional significance.

 

In addition, the requested

 

finding is not supported

 

by a citation to the record

 

as required by Section

 

1.277(a) of the Commis-

 

sion's Rules.

162

Denied.  The Examiner

 

found that an "unusually

 

large" amount of film

 

was shot (I.D. para. 109)

 

and the exact footage

 

is without decisional sig-

 

nificance.  Complainants'

 

statement that camera-

 

men were "given" a

 

certain amount of film to

 

shoot is inaccurate.  B.B.

 

Ex. No. 6 shows how much

 

film was actually shot, not

 

that a certain amount

 

of film was assigned.  Similarly,

 

Complainants' com-

 

ments concerning Mr.

 

Constant are inaccurate.

 

The record indicates not

 

that he complained about

 

the amount of color film

 

shot, but that he merely

 

wanted to know why it

 

was shot.  The record also

 

shows that he was satisfied

 

with the answers he

 

received, and that is why

 

he did not pursue the

 

matter.  (Tr. 3111, 3424).

165

Denied.  The Examiner has

 

made these findings (I.D.

 

para. 109).  The requested

 

finding relating to cov-

 

erage of the renewal hearing

 

is irrelevant.

166

Denied.  The Examiner

 

found that it was "un-

 

precedented" for Mr.

 

Kampmann to act as a re-

 

porter (I.D. para. 106).

 

Complainants do not take

 

into consideration Mr.

 

Kampmann's testimony as

 

to why he acted in such

 

capacity (Tr. 3727-28).

167

Denied.  The Examiner

 

has made most of these

 

findings (I.D. paras.

 

106, 109) and the others

 

requested would merely

 

be cumulative.  Concern-

 

ing overtime pay, Mr.

 

Kampmann testified that

 

at the time of the 1968

 

Ball there was a news-

 

paper strike which had

 

caused KRON-TV to ex-

 

pand its news programs

 

and all of the news de-

 

partment staff was placed

 

on overtime (Tr. 3727).

169

Denied.  The Examiner

 

found that the decision to

 

expand the show to thirty

 

minutes was made by

 

Messrs. Kampmann,

 

Behrendt, and Noble (I.D.

 

para. 109).  Although

 

Mr. See testified that this

 

was his idea, other

 

testimony establishes that he

 

was mistaken in his

 

recollection, and that he did

 

not suggest a thirty minute

 

program (Tr. 3069,

 

3357, 3358, 3729).

171-173

Denied.  The record reflects

 

that the Chicken's Ball

 

was placed on "Community

 

Circle" because "Bay

 

Region Report", where

 

it had been placed in pre-

 

vious years, was no longer

 

being broadcast and

 

"Community Circle" was

 

a color program (Tr.

 

1487-88, 3725).

174

Denied.  The record indicates

 

that no other television

 

stations were contacted

 

regarding coverage of the

 

Ball (Tr. 3142-43).  In

 

addition, Complainants'

 

exception is not supported

 

by a citation to the

 

record as required by Section

 

1.277(a) of the Com-

 

mission's Rules.

177

Denied.  Mr. See testified

 

that he had not made an

 

investigation into this

 

area prior to appearing as a

 

witness and that that

 

was the reason he didn't

 

know of any similar programming

 

(Tr. 1491).

178

Denied.  The Examiner

 

has made the findings re-

 

quested in the first two

 

sentences and the last

 

clause of the third sentence

 

(I.D. paras. 99, 105).

 

Mr. Kelly testified as

 

to why he chose Mr. See

 

as a judge (Tr. 3158,

 

3178-79).  Complainants'

 

requested finding that

 

Mr. See had never seen a

 

Chicken's Ball is contrary

 

to the record (Tr. 3158,

 

lines 10-12).

180

Denied.  Complainants'

 

requested findings are of no

 

decisional significance.

183

Denied.  The first sentence

 

of Complainants' proposed

 

finding is of no decisional

 

significance.  Mr. See's

 

testimony about public

 

relations efforts related to

 

the promotion of KRON-TV's

 

Chicken's Ball cov-

 

erage, not the CATV franchise

 

(Tr. 1495).

185, 187

Denied.  The letter to Mr.

 

Francesconi is without

 

decisional significance.

 

The last sentence of Ex-

 

ception No. 185 is contrary

 

to the evidence, and is

 

not supported by

 

Complainants' citation to the

 

record (see Tr. 3152).

186, 190

Denied.  Mr. Kelly's remarks

 

to the City Council

 

were in response to the

 

two preceding presenta-

 

tions, were not pre-planned,

 

and were not made to

 

obtain a competitive advantage

 

(Tr. 3162, 3173-

 

74).  Concerning the

 

meeting in the restaurant,

 

the Examiner so found

 

(T.D. para. 101).  In addi-

 

tion, Exception No. 190

 

is not supported by a

 

citation to record as

 

required by Section 1.277(a)

 

of the Commission's Rules.

191, 197, 200-202

Denied.  Complainants' requested

 

findings are un-

 

supported conclusions, are

 

argumentative, are not

 

supported by a preponderance of the evidence, and

 

do not contain citations to the record as required

 

by Section 1.277(a) of the Commission's Rules.

193, 195 (1st sent.)

Denied.  The testimony indicates

 

that the body of

 

Mr. Kelly's letter was a part of Chronicle's CATV

 

public relations effort in San Carols and that the

 

postscript was not a part of that effort (Tr. 2930,

 

3175).

196

Denied.  The requested finding is of no decisional

 

significance.  (See also our

ruling on Complainants'

 

 

Exception Nos. 186 and 190).

199

Denied.  The record indicates that the promotional

 

efforts were "as usual" for KRON-TV (Tr.

 

1495-98).  The last sentence of this exception is

 

not supported by Complainants' citation to the

 

record.

 

204, 366 (8th sent.)

Denied.  The Examiner's findings

 

 

are supported by the

 

weight of the evidence.  Mr. Kampmann testified

 

that the statements he made were made "in com-

 

miseration" with operational personnel in order "to

 

hold the news department together" (Tr. 3701-02,

 

3784, 3833-34).  In addition, Complainants' excep-

 

tions are not supported by citations to the record

 

as required by Section 1.277(a) of the Commis-

 

sions' Rules.

205

Denied.  Mr. See testified that the letter to the Com-

 

mission was based upon the best information available

 

at the time (Tr. 1452), and Complainants cite

 

no evidence to the contrary.  Complainants' claims

 

for its cross-examination of Mr. See are exagger-

 

ated.  B.B. Ex No. 5, which furnished the basis

 

for such cross-examination, was produced by

 

KRON pursuant to the Examiner's Memorandum

 

Opinion and Order, FCC 69M-1238, released Sep-

 

tember 30, 1969.  The last sentence of Complainants'

 

exception is contrary to the record (KRON Ex.

 

Nos. 68, 116, p. 179, Tr. 1865-66, 1942-43). In addi-

 

tion, portions of Complainants' exception are ar-

 

gumentative in violation of Section 1.277(a) of the

 

Commission's Rules.

208

Denied.  Mr. Constant testified that when he found

 

Dr. Alvarez's letter in the files he stopped looking

 

(Tr. 2419-20).  His decision to discuss the events

 

with Mr. Kampmann, who was the news director

 

at the time of the library dedication, was not un-

 

reasonable.  In addtion, Complainants' exception

 

contains argumentative matter in violation of Sec-

 

tion 1.277(a) of the Commission's Rules.

211

Denied.  Messrs. Thieriot and See did not testify that

 

they would not rely on the reputation and experi-

 

ence of KRON-TV in applying for CATV fran-

 

chises, but that they would not permit their CATV

 

interests to affect the operation and programming

 

of KRON-TV (Tr. 1681, 3542-43).

213

Denied.  The Examiner made the findings requested

 

in the first two sentences of Complainants' excep-

 

tion (I.D. paras. 76-77).  The findings requested in

 

the third sentence of Complainants' exception is

 

implicit in the Examiner's findings in I.D. paras.

 

76-77.  The remainder of Complainants' exception

 

is without decisional signficance.

214

Denied.  As the individual responsible for Chroni-

 

cle's CATV activities, it was only natural for Mr.

 

See to have undertaken the activities outlined in

 

Complainants' requested finding and no adverse

 

conclusions can be drawn therefrom.

215

Denied.  The subsequent unavailability of pole line

 

rights was irrelevant to the merits of the prior

 

award of the San Francisco CATV franchise to

 

Western TV Cable Co.

216

Denied.  The record indicates that Mr. See had no

 

knowledge of actions taken at Chronicle's Board

 

of Directors meetings (Tr.1457-58, 1612-13, 3570).

217, 218

Denied.  The Examiner has made these findings (I.D.

 

para. 117).  The record indicates that Mr. See often

 

requested coverage of events in suburban com-

 

munities (KRON Ex. Nos. 161, 162).

219

Denied.  Complaints' contention is without merit.

 

The fact that 4 minutes and 20 seconds of news

 

time was devoted to South San Francisco during

 

November, 1966, does not preclude the possibility

 

of residents of that city suggesting more coverage.

 

In addtion, Complainants' exception is argumenta-

 

tive in violation of Section 1.277(a) of the Com-

 

mission's Rules.

220

Denied.  KRON Ex. 116, pp. 173-1808 shows that

 

in 1965 KRON-TV devoted 10 min. 20 sec. to news

 

stories devoted to South San Francisco; in 1966 it

 

devoted 11 min. 55 sec. to such stories;

 

in 1967 it de-

 

voted 11 min. 46 sec. (this figure does not include

 

3 min. 55 sec. which was devoted to a political de-

 

bate between congressional candidates); and in

 

1968 it devoted 8 min. to such stories.  The variation

 

between these figures is of no decisional

 

significance.

222

Denied.  The requested finding presents an incom-

 

plete picture of the "must go" technique (see Tr.

 

2495, 2499-2501, 2503-05, 2574, 3682-83, 3693-94,

 

3768-69).  The memo quoted by the Examiner in

 

I.D. para. 121 indicates that coverage of the library

 

dedication was a "HPS-MG" -- "Harold P. See --

 

Must Go." Further, the Examiner found that the

 

coverage was ordered by Mr. See and that it was

 

questioned by Mr. White (I.D. paras. 117, 118).

225, 226

Denied.  Complainants' requested findings do not

 

take into consideration Mr. Kampmann's explana-

 

tion for his remarks (Tr. 3701-02, 3784, 3833-34).

 

In addition, Complainants' exceptions are not sup-

 

ported by citations to the record as required by

 

Section 1.277(a) of the Commission's Rules.

228

Denied.  The Examiner found that Mr. Picken cov-

 

ered the art show (I.D. para. 119); that he re-

 

ceived a copy of the memo of December 20, 1966

 

(I.D. para. 117); and that the art show was cov-

 

ered and broadcast by KRON-TV (I.D. para. 119).

 

That no other radio or television stations covered

 

the library dedication is irrelevant, since the rec-

 

ord supports the Examiner's finding that coverage

 

of such events was not unusual at KRON (I.D.

 

para 126).

229

Denied.  The Examiner's finding that Mr. Picken

 

indicated that he would cover the dedication if

 

he could is supported by the record (Tr. 2953).

 

Complainants' requested finding concerning Mr.

 

Picken's characterization of the library dedication

 

is adequately reflected in the Examiner's finding

 

that the dedication was "hardly an event of grip-

 

ping interest throughout the bay area...." (I.D.

 

para. 130).

230

Denied.  Mr. Picken testified that he was not sure

 

that Mr. White told him of Chronicle's interest in

 

CATV in South San Francisco (Tr. 844-45, 865),

 

and that he did not learn of Chronicle's interest

 

until after the dedication was covered (Tr. 865).

 

The record indicates that the basis for Mr. Picken's

 

state of mind was "news room scuttlebutt" (Tr.

 

844).

231

Denied.  The requested finding is based on heresay.

232

Denied.  The Examiner found that the memo was

 

given to Mr. Kihn by Mr. Blair (I.D. para. 121).

 

The remainder of Complainants' exception is of no

 

probative weight since Mr. Blair did not testify

 

in this proceeding.

233

Denied.  The Examiner found that KRON frequently

 

mentioned political figures in covering events in

 

which they participated (I.D. para. 126), and the

 

filming of the Mayor of South San Francisco was

 

in line with this policy.  The remainder of Com-

 

plainants' requested finding is of no decisional

 

significance.

234

Denied.  The Examiner made the findings requested

 

in the first three sentences of Complainants' ex-

 

ception (I.D. paras. 121, 124-125).  The last sen-

 

tence of Complainants' requested finding is not

 

supported by a citation to the record as required

 

by Section 1.277(a) of the Commission's Rules.

235

Denied.  Mr. See testified that the changes requested

 

were not "extensive" and that all competitors for

 

the CATV franchise were invited to comment on the

 

proposed ordinance (Tr. 1529).  In any event, the

 

requested finding is of no decisional significance.

236

Denied.  Insofar as Complainants' requested finding is

 

relevant, the Examiner so found (I.D. para. 119).

239 (1st sent.)

Denied. While Complainants' statement is correct, the

 

variation between the figures is not decisionally

 

significant.

239 (2d sent.)

Denied.  There is no support in the record that the

 

Mayor or City Council appeared in the dedication

 

story broadcast by KRON-TV, and the Examiner

 

found that there was no reference to these persons

 

therein (I.D. fn. 51).

241

Denied.  Mr. Allen testified that Western Communi-

 

cations, Inc. has never applied for a rate increase

 

on any of its systems (Tr. 2898-99).  Messrs.  See

 

and Allen testified that the former has neither seen

 

nor received a copy of the Kirkeeng memo (Tr.

 

1527, 2899).

251

Denied.  The Examiner's finding is correct and ade-

 

quately reflects the record (Tr. 1235, 1237, 1248-49,

 

3072, KRON Ex. No. 16).

264, 265

Denied.  The record reveals that Mr. Kampmann often

 

used the "must go" designation on his own initia-

 

tive (Tr. 3683, 3768, 3769).

267

Denied.  The Examiner quoted the relevant portions

 

of this memo (I.D. para. 195).  The long-standing

 

policy referred to in Complainants' requested find-

 

ing was that there be accuracy in any news story

 

broadcast about the Chronicle Publishing Co. (Tr.

 

1959).  The record indicates that the procedures

 

outlined in Mr. See's memo were not generally fol-

 

lowed (Tr. 2465, 3705, 3707, 3713).

273

Denied.  Mr. Kampmann testified that he rescinded the

 

memo "after about two or three days" (Tr. 3710;

 

see also Tr. 3270-72, 3299-3300).

275

Denied.  The Examiner found that Mr. Kampmann

 

issued the memo the preserve newsroom objectivity

 

in reporting labor strife in broadcasting (I.D.

 

para. 197).  This is in accord with Mr. See's state-

 

ment of policy as reflected in his testimony.

276

Denied.  Mr. Constant's testimony referred to the last

 

sentence of Mr. Kampmann's memo and there is no

 

evidence it represented KRON policy.  Mr. Kamp-

 

mann testified that he rescinded the memo "after

 

about two or three days" (Tr. 3710; see also Tr.

 

3270-72, 3299-3300).  Mr. See testified that he didn't

 

repeal or revoke the memo because he "didn't pay

 

much attention to it." (Tr. 1599).

277

Denied.  Complainants' requested finding is of no de-

 

cisional significance.  Further there is no evidence

 

that Mr. Kampmann's superiors were familiar with

 

the entire contents of the book, and the Examiner

 

found, specifically, that neither Mr. See nor Mr.

 

Constant was aware of the issuance of Mr. Kamp-

 

mann's memo.

279

Denied.  The requested finding is contrary to the

 

weight of the evidence (Tr. 2465, 3259, 3261-62,

 

3705-07) and is based upon hearsay (Tr. 2103).

282

Denied.  The requested finding is contrary to the evi-

 

dence (Tr. 1374, 1376, 3546-47, 3565) and is argu-

 

mentative in violation of Section 1.277(a) of the

 

Commission's Rules.

 

283

Denied.  The Examiner's findings that Mr. See's

 

 

motive was not to suppress news (I.D. para. 141)

 

and that Mr. See acted in a reasonable manner

 

(I.D. para. 140) are correct and are supported by

 

the weight of the evidence (Tr. 1372, 1514, 1517-

 

18).

284

Denied.  The requested finding is not supported by

 

the evidence and is a presumption not based on

 

knowledge.

285

Denied.  The Examiner found that news of the agree-

 

ment leaked out (I.D. para. 135).

286

Denied.  The requested finding is contrary to the

 

record and is argumentative in violation of Section

 

1.277(a) of the Commission's Rules.

287

Denied.  The Examiner found that all of KRON's

 

newsmen were familiar with the story and that

 

many of them importuned their superiors for per-

 

mission to cover it (I.D. para. 136).  The additional

 

details outlined in Complainants' exception are

 

without decisional significance.  The Examiner also

 

made the finding requested in the the last sentence

 

of Complainants' exception (I.D. para. 138).

288

Denied.  The Examiner made reference to the New

 

York Times story (I.D. para. 135).  The remainder

 

of the requested finding is without decisional

 

significance.

291

Denied.  Complainants' requested finding is based on

 

hearsay, is of no decisional significance and is

 

argumentative in violation of Section 1.277(a) of

 

the Commission's Rules.

292

Denied.  The requested finding is based on hearsay.

296

Denied.  The requested finding is not supported by

 

the record.  Mr. See testified that he had not viewed

 

the news broadcasts (Tr. 1378-79) and Mr. Sacks'

 

testimony does not show otherwise.

304

Denied.  It is implicit in the Examiner's findings in

 

I.D. paras. 138 and 140 that Mr. See did not con-

 

tact any representatives of the Hearst Corpora-

 

tion.  The remainder of this requested finding is

 

speculative and argumentative in violation of Sec-

 

tion 1.277(a) of the Commission's Rules.

305, 306

Denied.  The Examiner found that KRON covered

 

the story and that only the first part of the story

 

was prepared by Messrs.  Constant and Cothran

 

(I.D. para. 139).  The record further indicates that

 

a newswriter wrote the remainder of the story

 

from the Chronicle's "dupe" (Tr. 2470-71, 2546).

 

Since the publisher's statement was the only source

 

of the story available (Tr. 2471, 2546), and

 

since the "dupe" was charged, KRON's policy

 

against verbatim use of Chronicle "dupes" was

 

not violated (Tr. 2547-48).  In addition, Com-

 

plainants' Exception No. 306 is argumentative in

 

violation of Section 1.277(a) of the Commission's

 

Rules.

 

307

Denied.  The Examiner found that the story could not

 

 

be covered until an official announcement was

 

made (I.D. para. 138).  The publisher's statement

 

was the only source of the story available (Tr.

 

2471, 2546).  The remainder of Complainants' ex-

 

ception is without decisional significance.

308

Denied.  The substance of the testimony cited is to

 

the effect that there was a limit on the type of

 

reporting which could be done prior to an official

 

announcement by the newspapers, and the Ex-

 

aminer so found (I.D. para. 136).  After the story

 

broke there was no such limit (Tr. 953-56).

309

Denied.  The requested findings are based on hearsay.

 

Mr. Kihn also testified that he knew of no other

 

station having done a documentary on the merger

 

(Tr. 526).

315

Denied.  The requested finding is argumentative in

 

violation of Section 1.277(a) of the Commission's

 

Rules and is composed of subjective judgments of

 

the type of questions asked and the type of report

 

broadcast.  Further, there were no Justice Depart-

 

ment, advertiser, or union representatives at the

 

luncheon (KRON Ex. No. 75).

317, 318

Denied.  The requested finding is contrary to the

 

weight of the evidence, and Mr. White has ad-

 

mitted to lapses of memory (Tr. 2098-2100).

321

Denied.  The Examiner's findings at I.D. para. 145

 

are supported by the record (Tr. 413, 415, 420,

 

436, 1144, 1149-51).

322

Denied.  The Examiner's findings at I.D. para. 146

 

are supported by the record (Tr. 2483-84).  With

 

respect to the relationship between Mr. Cothran

 

and his superiors, the testimony of Messrs. Kihn

 

and White is hearsay.  Further Comp. Ex. No. 4 was

 

issued after Mr. Cothran left KRON-TV, and the

 

record reflects that the procedures outlined in

 

Comp. Ex. No. 3 were not generally followed (Tr.

 

2465, 3705, 3707, 3713).

324 (1st sent.)

Denied.  The Examiner's finding in I.D. para. 144 is

 

supported by the evidence (Tr. 2480-81, 3604, 3715,

 

KRON Ex. No. 12).

324 (2d sent, et seq.)

Denied.  Mr. Constant did

 

not testify that there was a

 

threatened I.B.E.W. strike, however negotiations

 

were going on (Tr. 3334-35, 3603-04).  To the ex-

 

tent that Complainants' requested findings go into

 

greater detail than the Examiner's findings at I.D.

 

paras. 142-144, they are cumulative and are not

 

decisionally significant.

325

Denied.  The Examiner's findings in I.D. para. 144

 

adequately cover the findings requested in the first

 

two sentences of Complainants' exception.  The fact

 

that KRON did not cover the first day of the strike

 

is not decisionally significant, since the record re-

 

veals that the remainder of the strike was covered.

 

The last sentence of this exception is not supported

 

by Complainants' citations to the record.

326

Denied.  The first sentence of Complainants' excep-

 

tion is not supported by the weight of the evidence

 

(Tr. 2480-81, 3715).  Mr. Fleming's complaint about

 

the news story stemmed not from KRON but from

 

his own interviews of union members (Tr. 971-72).

 

The last sentence of Complainants' exception is not

 

supported by a citation to the record as required

 

by Section 1.277(a) of the Commission's Rules.

328

Complainants have filed no exception so numbered.

329

Denied.  The Examiner's findings at I.D. para. 148 are

 

correct and are supported by the record (Tr. 1601,

 

1852-53, 2410, 3331, 3551, 3846-47).  Comp. Ex. No.

 

4 was issued on April 6, 1967, whereas the threat-

 

ened strike was on March 15-17, 1967.  The reasons

 

for issuing the Kampmann memo had nothing to

 

do with the 1967 threatened Teamster's strike (see

 

I.D. paras. 195-196).  The last sentence of Com-

 

plainants' exception is contrary to the weight of

 

the evidence (Tr. 2465, 3259, 3261-62, 3705-07) and

 

is based on hearsay (Tr. 2103).  In addition, Com-

 

plainants' exception contains argumentative matter

 

in violation of Section 1.277(a) of the Commis-

 

sion's Rules.

330

Denied.  The Examiner's findings at I.D. para. 147

 

and fn. 56 adequately cover this matter.  Complain-

 

ants' requested finding is contrary to the record, is

 

argumentative, and the last paragraph is not sup-

 

ported by a citation to the record as required by

 

Section 1.277(a) of the Commission's Rules.

331

Denied.  The threatened Guild strike occurred during

 

February, 1966 (see I.D. para. 142).  The reference

 

at Tr. 2974 to February, 1967, is a reporter's error.

 

The settlement of the threatened February, 1966,

 

strike resulted in a three-year contract (KRON

 

Ex. No. 12, pp. 11-12).  The Examiner found that

 

the strike threat was covered by KRON-TV.

333

Denied.  There is no evidence that the filming of the

 

pickets was in any way unusual.

334

Denied.  The requested finding is not supported by the

 

evidence of record.  In addition, it is argumentative

 

and does not contain a citation to the record as

 

required by Section 1.277(a) of the Commission's

 

Rules.

335

Denied.  The Examiner's finding at I.D. para. 153 is

 

correct and is supported by the record.  The cited

 

testimony of Mr. Kihn (Tr. 425-26) is his own sub-

 

jective judgment of the coverage.  The cited testi-

 

mony of Mr. White (Tr. 2107, 2112-13) is not sup-

 

ported by the weight of the evidence (Tr. 2996-97,

 

3000, 3002-03; see also I.D. paras. 154-156).  Mr.

 

Raudebaugh also testified that the coverage by

 

KRON-TV was "no better or no worse than any

 

other television station" (Tr. 2969; I.D. para. 164).

338

Denied.  Complainants' exception is without support

 

in the record.  In addition, it is argumentative in

 

violation of Section 1.277(a) of the Commission's

 

Rules.

339

Denied.  The Examiner's findings at I.D. para. 193

 

adequately cover this matter.  Mr. Constant's ex-

 

planation is reasonable and is uncontradicted (Tr.

 

3606).  The last sentence is argumentative and is

 

not supported by a citation to the record as re-

 

quired by Section 1.277(a) of the Commission's

 

Rules.

340, 341

Denied.  The Examiner's findings at I.D. para. 193

 

adequately cover this matter.  The additional de-

 

tails provided in Complainants' exception are

 

without decisional significance.  The record indi-

 

cates that the story was run (Tr. 3288-89).

342

Denied.  The first sentence of Complainants' excep-

 

tion distorts the record.  Mr. Constant testified that

 

the statement of management in the first story was

 

meaningless (Tr. 3345).  No changes in Mr. Bur-

 

ton's story were made by Mr. See (Tr. 3346).  The

 

last sentence of this requested finding is of no

 

decisional significance.

343

Denied.  Mr. Burton testified that the story was

 

covered and written prior to his meeting with

 

Mr. See and that he met with Messrs. See and

 

Constant in order to get a statement of manage-

 

ment's side of the story (Tr. 3287-89, 3304-05).

347

Denied.  The Examiner's finding at I.D. para. 155 and

 

fn. 57 correctly and adequately reflects the record

 

(Tr. 2057-58, 3718).  Mr. See's representation to the

 

Commission was truthful and Complainants have

 

not shown otherwise.

348

Denied.  Complainants' requested finding is not sup-

 

ported by the record (KRON Ex. Nos. 76, 77, 101,

 

102).

354 (2nd para.)

Denied.  There is no evidence of record supporting

 

Complainants' requested finding that Canadian

 

Pacific Airlines was a substantial advertiser in

 

the Chronicle newspaper and over KRON-TV.  The

 

evidence is to the contrary(B.B. Ex. No. 4, Att.

 

II-1, II-2).  The mentions of Canadian Pacific

 

Airlines were due to the fact that it donated the

 

first prizes for the tournament (Tr. 3385, KRON

 

Ex. No. 95, p. 5, KRON Ex. No. 120).

355

Denied.  Complainants' requested finding is contrary

 

to the evidence, is argumentative, and is not sup-

 

ported by a citation to the record as required by

 

Section 1.277(a) of the Commission's Rules.

357

Denied.  The requested finding is of no decisional

 

significance.  The record indicates that KRON-TV

 

has covered this event from 1961 through 1969 with

 

the exception of 1966 (KRON Ex. No. 78).  The

 

last sentence of Complainants' exception is argu-

 

mentative in violation of Section 1.277(a) of the

 

Commission's Rules.

358

Denied.  The Examiner's finding at I.D. para. 199 is

 

supported by the record.  With respect to Canadian

 

Pacific Airlines see our ruling on Complainants'

 

Exception No. 354 (2d para.), supra.

359

Denied.  The script as broadcast contains references

 

to all of the subjects mentioned in Complainants'

 

requested findings (KRON Ex. No. 18, pp. 1-2, 5-6;

 

Tr. 1318-20).  The portion deleted dealt with spe-

 

cific magazines and was deleted on the advice of

 

counsel (KRON Ex. No. 19; Tr. 1313-14).

360, 361

Denied.  Complainants' requested findings have no

 

support in the record.  In addition, they are argu-

 

mentative and contain no citations to the record

 

as required by Section 1.277(a) of the Commis-

 

sion Rules.

363 (2d sent., et seq.)

Denied.  See paragraphs

 

41-48 of our Decision.  In

 

addition, Complainants' exception contains a dis-

 

cussion of law in violation of Section 1.277(a) of

 

the Commission's Rules.

366 (1st sent.)

Denied.  The Examiner's findings in I.D. para. 107

 

and 108 are correct and are supported by the

 

weight of the evidence.  See also paragraphs 56-60

 

of our Decision and our ruling on Complainants'

 

Exception No. 204, supra.

366 (9th-12th sents.)

Denied.  See paragraphs 56-60 of our

 

decision.  In

 

addition, Complainants' exceptions are argumenta-

 

tive, contain discussions of law and are not sup-

 

ported by citations to the record as required by

 

Section 1.277(a) of the Commission's Rules.

366 (13th sent.)

Denied.  The portion of I.D. para. 128 to which

 

Complainants take exception is correct and is sup-

 

ported by the weight of the evidence.

 

367

Denied.  The decision was made after consultation

 

 

with, and upon the advice of counsel and was not

 

an immediate reaction (I.D. paras. 215-216).

368-374, 377-379, 382, 385-

Denied.  The Examiner's

 

findings and conclusions at

387, 389-412, 416-436,

I.D. paras. 214-235 and

 

267 are correct and ade-

438-451, 454, 456-460,

Quately reflect the relevant

 

portions of the record.

463-473, 485-488, 490,

The additional details

 

provided in Complainants'

492, 493, 496-500, 502,

requested findings are of