4F2-709

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In the Matter of APPLICATIONS BY AMERICAN BROADCASTING COS., INC. FOR ASSIGNMENT OF LICENSEE OF STATIONS: WABC, WABC-FM, WABC-TV, NEW YORK, N.Y.;
WLS-FM, WBKB, CHICAGO, ILL.; KGO, KGO-FM, KGO-TV, SAN FRANCISCO, CALIF.; KABC,
KABC-FM, KABC-TV, LOS ANGELES, CALIF. FOR TRANSFER OF CONTROL OF STATIONS: WLS,
CHICAGO, ILL.; KQV and KQV-FM, PITTSBURGH, PA.; WXYZ, WXYZ-FM, WXYZ-TV,
DETROIT, MICH. For Assignments and Transfers of Ancillary Radio Facilities

Docket No. 16828

ORDER AND NOTICE OF ORAL HEARING BEFORE THE COMMISSION EN BANC

4 F.C.C.2d 709, 7 Rad. Reg. 2d (P & F) 861

RELEASE-NUMBER: FCC 66-741

August 17, 1966 Adopted

BY THE COMMISSION: COMMISSIONER BARTLEY DISSENTING AND ISSUING A STATEMENT; COMMISSIONER COX CONCURRING AND ISSUING A STATEMENT IN WHICH COMMISSIONER JOHNSON JOINS.

1. This proceeding involves applications filed March 31, 1966, by American Broadcasting Cos., Inc. (ABC), for Commission approval of assignments and transfers of ABC's broadcasting licenses to a new corporation of the same name which will be a wholly owned subsidiary of International Telephone & Telegraph Corp. (ITT). The applications contain and are accompanied by masses of data and numerous exhibits setting forth in great detail all of the factual information normally sought by the Commission in transfer proceedings, together with a large amount of additional information concerning the corporations involved.

2. On July 20, 1966, the Commission sent letters to the presidents of ABC and ITT requesting a further statement on specified points relating to the future operations of the new licensee company and ITT's public interest responsibilities in connection therein. On July 25, 1966, replies to these letters were received by the Commission from both ABC and ITT. The Commission's letters and the replies are part of the file herein. There are no oppositions filed against the proposed merger and assignments of licenses other than by the licensee of radio station KOB at Albuquerque, N. Mex., relating to its own competing application for the frequency occupied by station WABC in New York City, which is one of the stations proposed to be transferred to the new ABC.

3. The great bulk of data supporting the application is factual and statistical in nature. The Commission's review of such data has not indicated any questions of fact concerning the proposed transactions, nor has any such question been raised or called to our attention by any interested party. In this regard we note that the KOB opposition does not raise any broad question or factual issue concerning the merger plan as a whole, but rather a specific issue of right to a comparative hearing on a single frequency, which right we believe can fully be protected irrespective of any comprehensive action taken on the merger proposals.

4. In light of the above, the Commission accepts the factual representations in the filings in this proceeding as authentic and accurate statements of fact and as evidence constituting the record herein. However, so as to preserve the right for interested parties to raise any such questions of fact as may appropriately be shown, we are herein establishing a procedure whereby any party desiring to offer other or further evidence in this proceeding may file a written statement of such evidence within 20 days of the date of release of this order. Any statement of facts so filed will be accepted and received as evidence herein, subject to all proper objections and arguments as to relevance and materiality, unless an objection is filed challenging the authenticity or accuracy of such statement within 5 days after the filing and service upon the parties of any such statement of facts. In the event of such an objection, the Commission will issue an appropriate order as to the controverted matters. We follow such a procedure on our present conclusion that no evidentiary hearing for the adjudication of contested facts is required, and that we can appropriately compile a full and accurate factual record without such hearing on which to base our legal and policy determinations in the matter.

5. The Commission has concluded, however, that the pending proposals do raise legal and policy issues of substance and significance which require the Commission's further consideration in an oral hearing before it en banc. Such a hearing will provide a further opportunity for the exploration of such issues on a formal record which should materially assist the Commission in its consideration of and action upon such issues. Accordingly, the Commission orders that an oral argument upon such applications be held before the full Commission on September 19, 1966, at 10 a.m., in the Commission's hearing room in Washington, D.C. The Commission requests the parties to address themselves to the general issues whether the proposed transfers will: (a) Increase unduly economic concentration in any market or field; (b) affect competition in broadcasting and whether such effect would be consonant with or contrary to the public interest; and (c) generally serve the public interest. The applicants may also desire to supplement, or otherwise cover, matters raised by the Commission's inquiries of June 20, 1966, and the replies thereto (see par. 2, above). In addition, the applicants should, insofar as possible, be prepared to address themselves to all issues of law and policy (as well as any factual issues pursuant to par. 4, above), which may be raised for discussion by the Commission or any party to the proceeding.

6. The Commission's Broadcast Bureau and Common Carrier Bureau will participate in the oral hearing. The Commission anticipates that both bureaus will, in matters under their respective jurisdictions, raise all pertinent questions of law and policy so that we may have a complete record before us. Other interested parties, including radio station KOB (see par. 3, above), may ask to be heard with respect to any question affecting the Commission's disposition of the pending applications. In addition, oral presentations may cover and include any factual question that may have been raised in accordance with the procedures set forth in paragraph 4, above.

7. Interested parties desiring to appear and be heard before the Commission shall file a statement on or before September 5, 1966, designating the attorneys and other spokesmen or officials who would appear and indicating the length of time which they anticipate would be required for their presentation. Such parties should also generally indicate the subject matter of their presentation; that is, the particular issues to which they would address themselves. The Commission will, upon the receipt of the indicated written statements, issue such further order prescribing the order of appearance of parties to be heard, the length of their presentations, and such other procedures for the oral argument as may be appropriate in the circumstances.

8. Following the oral hearing designated herein the Commission will consider and take such further action upon the pending applications, both procedurally and substantively, as may be required by the record then before us.

FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.

CONCURRING OPINION OF COMMISSIONER KENNETH A. COX IN WHICH COMMISSIONER NICHOLAS JOHNSON JOINS

I concur in setting this matter down for an oral hearing. It poses issues of too great importance to be handled in routine fashion. However, I believe the applicants should address themselves very carefully to the issues which Commissioner Bartley has indicated he believes should be explored in a full evidentiary hearing. While the procedure adopted here is intended to expedite disposition of this matter, it should nevertheless permit exploration of these important questions in broad outline at least.

DISSENTING STATEMENT OF COMMISSIONER ROBERT T. BARTLEY

I dissent and vote for a formal evidentiary hearing pursuant to section 309(e) of the Communications Act, and sections 5, 7, and 8 of the Administrative Procedure Act, for the reasons, among others, given in my statement opposing issuance of the July 20, 1966, letters of inquiry to ITT and ABC, which statement is incorporated herein by reference.

The order and notice of oral hearing is unique in that it is neither an oral argument pursuant to the Administrative Procedure Act nor an evidentiary hearing pursuant to section 309(e) of the Communications Act, yet it gives the appearance of both. The Commission majority, in accepting the factual representations in the filings by ITT and ABC as authentic and accurate statements of fact and as evidence constituting the record herein, seems to ignore the additional facts which would be developed in the evidentiary hearing I propose. See, for example, issues 10, 11, 12, and 13.

The order and notice of oral hearing is, in my opinion, inadequate and ineffective, since it will elicit opinion rather than evidence tested in the crucible of a formal hearing where the applicant must meet the burden of proof on specified issues, which is necessary to a resolution of the serious social, economic, commercial concentration, and other public interest questions here obtaining.

In view of the foregoing, I vote for a formal evidentiary hearing on the following issues where the burden of proof is on the applicant:

(1) To determine whether and the extent to which the economic and commercial relationships, and the business structure, operations, and practices of the applicant herein will involve undue concentration of economic power in a manner contrary to the public interest in broadcasting.

(2) To determine whether and the extent to which the merger of ABC and ITT may be inconsistent with the policies set forth in the antitrust laws.

(3) To determine, in the light of the facts disclosed, and the conclusions reached under (1) and (2) above, whether consent to the application is consistent with the Commission's policies to promote licensee responsibility, competitive opportunity, and diversity in broadcasting.

(4) To determine whether and the extent to which the applicant maintains and will continue to maintain, directly or through its subsidiaries or affiliates, commercial relationships with local, State, Federal, and other governments, and the consequential impact on intracorporate policies with respect to its network and station operations.

(5) To determine whether and the extent to which consent to the merger herein would place applicant in a position where it might be impelled or compelled to subordinate its broadcast activities to its overall business interests.

(6) To determine the commercial activities, including marketing and sale of various products and services carried on or manufactured or proposed to be carried on or manufactured by the applicant, particularly in the field of communications, communications equipment and apparatus, ownership, management and operation of communications systems, including the field of space and common carrier communications.

(7) To determine whether and the extent to which the commercial activities of the applicant and its marketing of goods and services will affect competition among advertisers and prospective advertisers for broadcast time and opportunity.

(8) To determine whether and the extent to which consent to the merger herein may bring about concentration of control of facilities for space transmission (either domestic or foreign) and domestic broadcast transmission in the same hands.

(9) The extent to which applicant now owns, controls, or has financial interests in, or proposes to own, control, or acquire financial interests in broadcast facilities in foreign countries.

(10) To determine the intracorporate relations, policies, and practices established or carried on by ITT with its subsidiaries and affiliates as they may affect the independence of judgment by the management of such affiliates.

(11) To determine the extent to which the management of operating subsidiaries and affiliates of ITT have been permitted independent operation.

(12) To determine whether and the extent to which managements of ITT's subsidiaries and affiliates have been changed, and the relation between such changes and the business policies and practices of ITT as a parent.

(13) To determine the extent of independent judgment to be accorded the operating management of the broadcasting enterprise and the extent to which its independence will be affected by economic, commercial and other business considerations of the merged corporation.

(14) To determine whether and the extent to which consent to the merger herein would enhance the ability of the applicant to provide a diversified program schedule in the public interest, as alleged by the applicant.

(15) To determine whether and the extent to which consent to the merger would add to the economic stability and commercial viability of the ABC broadcasting enterprise -- as alleged by the applicant -- in a manner which will serve the public interest.

(16) To determine whether and the extent to which the consent to the merger herein would encourage or impel other networks and licensees to enter into similar arrangements.

(17) To determine the competitive effect, if any, of consent to the merger herein on the development and entry of additional networks in television.

(18) To determine, in the light of the evidence adduced, pursuant to the foregoing issues, whether the public interest, convenience, and necessity would be served by a grant of Commission consent to the proposed merger.