In re
Application of EIDER C. STANGLAND AND WALLACE L. STANGLAND, D.B.A. SIOUX EMPIRE
BROADCASTING CO., SIOUX FALLS, S. DAK. Requests: 1520 kc, 500 w, Day For
Construction Permit
Docket
No. 17174 File No. BP-15191
FEDERAL
COMMUNICATIONS COMMISSION
6
F.C.C.2d 707 (1967); 9 Rad. Reg. 2d (P & F) 396
RELEASE-NUMBER:
FCC 67-180
February 8, 1967 Adopted
BY THE COMMISSION: COMMISSIONER BARTLEY CONCURRING IN PART AND
DISSENTING IN PART AND ISSUING A STATEMENT IN WHICH COMMISSIONER LOEVINGER
JOINS; COMMISSIONER JOHNSON CONCURRING AND ISSUING A
STATEMENT.
OPINION:
[*707] 1. The Commission has before it the
above-captioned and described application and a petition to deny the
application filed by KISD, Inc., licensee of station KISD, Sioux Falls, S.
Dak. n1
n1 Also before the
Commission are the following related pleadings: The applicant's opposition to
the petition and KISD's reply; a supplement to KISD's petition, a second and
third supplement, both filed by KISD; a further opposition filed by the
applicant and further reply filed by KISD; and KISD's fourth supplement to the
original petition. Sec. 1.45 does not contemplate the filing of pleadings
after a petitioner's reply. However, KISD's supplementary pleadings
contain comments on new matter for the most part and, in one instance, a
supplement was filed by leave of the Commission. Therefore, all
allegations and supporting documents have been considered.
2. Petitioner claims standing to oppose a grant of the
application on the basis of the fact that KISD, Inc., is the licensee of
standard broadcast station KISD which will compete with the proposed station
for listening audience and advertising revenue. The Commission finds that
applicant has standing as a party in interest pursuant to section 309(d)(1) of
the Communications Act of 1934, as amended, and section 1.580(i) of the
Commission's rules. Federal Communications Commission v. Sanders Bros.
Radio Station, 309 U.S. 470 (1940).
3. KISD requests that the application be designated for hearing
to determine whether a grant of the application is in contravention of the
duopoly and concentration of control provisions of section 73.35 of the
Commission's rules; the efforts made by the applicant to ascertain the needs
and interests of the area to be served and how the applicant proposes to meet
such needs and interests, Henry et al. (Suburban Broadcasters) v. Federal
Communications Commission, 112 U.S. App. D.C. 257, 302 F. 2d 191, 23 R.R. 2016
(1962); whether there are adequate revenues to support a fourth commercial
standard broadcast station in Sioux Falls without a loss or degradation of
service to the area, Carroll Broadcasting Co. v. Federal Communications
Commission, 103 U.S. App. D.C., 346, 258 F. 2d 440, 17 R.R. 2066 (1958);
[*708] and whether, in the light of the evidence adduced on the adequacy
of revenue question, the applicant is financially qualified to construct and
operate the proposed station in the manner proposed.
4. Much of what has been alleged is supported by statements
signed under oath by Verl Thomson, former president and controlling stockholder
of KISD, Inc. On September 9, 1966, the Commission approved a transfer of
control from Thomson to new principals, and the transfer was consummated on October
1, 1966. By letter of October 25, 1966, counsel for the new owners
advised the Commission that the new management adopts the pleadings filed by
the former owner and intends to continue to oppose the Sioux Empire
application.
5. KISD urges that a hearing is necessary on the question of
whether a grant of the application would be in contravention of the duopoly
provisions of section 73.35(a) of the Commission's rules, and in support of
this contention alleges that the proposed 1.0-mv/m contour would overlap the
1.0-mv/m contour of station KIWA, Sheldon, Iowa, of which Eider C. Stangland,
one of the partners, is the individual licensee. KISD has submitted field
intensity measurements along two radials. These measurements of the KIWA
signal show that the KIWA 1.0-mv/m contour will extend 32 miles in the
direction of Sioux Falls, and, according to KISD, indicate prohibited overlap
of the proposed 1.0-mv/m contour for a distance of 5.1 miles.
6. Subsequently, the applicant proceeded to make field intensity measurements
along the same radials and at essentially the same points utilized by the
petitioner. These measurements consist of two independent sets of
data. The two sets of data submitted by the applicant are essentially in
agreement and indicate that the KIWA 1.0-mv/m contour does not extend more than
24 miles along either radial toward Sioux Falls. On this basis, the
proposed and the KIWA 1.0-mv/m contours would be separated by approximately 3
miles.
7. In view of the discrepancy between the one set of KISD
measurements on the one hand and the applicant's two sets of data on the other,
all the data on each radial were analyzed together. Jeanette Broadcasting
Co., 19 R.R. 480. The Commission's analysis discloses that the two contours are
tangent, and, accordingly, no violation of section 73.35(a) of the rules is
indicated.
8. The petitioner also claims that a grant of the application
would result in a concentration of control of standard broadcast stations in a manner
inconsistent with the public interest in violation of section 73.35(b) of the
Commission's rules. It is alleged that the proposed station in Sioux
Falls and the commonly owned station, KIWA, are within the same trade and
market area. The applicant contests this allegation. However,
assuming, arguendo, that station KIWA and the proposed station are located in
the same trade and market area, this fact, standing alone, would not
necessitate the specification of the requested issue. The petitioner has
not raised any other facts sufficient to raise a substantial and material
question under section 73.35(a) of the rules. In determining whether
there is such a concentration of control, the Commission considers such factors
as the size, extent and location of areas served, the number of people served,
classes of stations involved and the extent of other competitive services in
the [*709] area in question. The petitioner, in its third
supplement to petition to deny, indicated that there are three competing
standard broadcast stations presently licensed in Sioux Falls as well as one FM
station and two television stations. The petitioner also alleges that
there was a competing standard broadcast station located in Yankton, S. Dak.
(located approximately 55 miles from Sioux Falls). In view of the
availability of other services in the area and the petitioner's failure to
adequately support its contention, the Commission finds that there is no
question of undue concentration of control within the meaning of section
73.35(a) of the Commission's rules under the circumstances in this case.
9. In support of its request for an issue to determine the
efforts of the applicant to ascertain the needs and interests of the area to be
served, the petitioner alleges that the applicant's program proposal is
identical to the program service proposed in the original application for the
construction permit of KIWA in Sheldon which was filed on September 19,
1958. The petitioner points out that there are several broadcast facilities
in Sioux Falls (population, 65,466) and one broadcast station (KIWA) in Sheldon
(population, 4,251). In view of the foregoing, petitioner asserts that it
cannot be determined whether the applicant has ascertained the needs and
interests of the public in Sioux Falls and whether the applicant's proposal
would meet those needs. Petitioner also urges that a survey which the
applicant claims to have made has not been related to the program
proposal. The applicant concedes that the program schedule, insofar as
titles, program categories, and percentage analysis are concerned, is identical
with the original KIWA proposal, but the applicant contends that similarity in
program titles does not mean similarity in program content and that the content
of the programs is different so as to take into account the particular needs of
Sioux Falls. Eider C. Stangland, one of the partners and a resident of
Sioux Falls, claims to have investigated the needs of the area by personal
contacts with residents. Mr. Stangland has also had broadcast experience
in Sioux Falls. The applicant submitted the results of interviews with
community leaders which, according to the applicant, confirmed the validity of
the program proposal. The applicant has not clearly indicated the manner
in which the results of the interviews relate to the original statement of
program service which remains unaltered since the date it was originally
submitted. This fact, together with the dispute between the applicant and
the petitioner over the adequacy of the applicant's basis for the program
proposal, persuades the Commission that an issue should be specified to permit
the applicant to submit evidence on its efforts to ascertain the needs,
interests, and desires of the public, the adequacy of those efforts and the
manner in which those needs as determined by the applicant will be met.
Since this question involves matters within the peculiar knowledge of the
applicant's principals, the burden of proceeding with the introduction of the
evidence and the burden of proof shall be upon the applicant.
10. The petitioner also attacks the reliability of the
applicant's programming representations. In support of this contention,
the petitioner relies on its observations during 1 day's monitoring of station
KIWA [*710] on July 14, 1964. The petitioner reports that the
actual schedule for this day did not correspond with the proposed schedule and
that this reflects adversely on the credibility of the applicant's
representations. This showing, standing alone, does not provide a
sufficient basis for questioning the credibility of the applicant's
proposal. The Commission finds that no material or substantial questions
of fact have been presented which would warrant the specification of an issue
concerning the reliability of the applicant's Sioux Falls program
representations.
11. The petitioner, in its original petition to deny the
application, requested that a Carroll issue (Carroll Broadcasting Co. v.
Federal Communications Commission, supra) be specified on the ground that the
revenues in the area are inadequate to support a fourth broadcast station
without a net loss or degradation of service to the area. The
Missouri-Illinois Broadcasting Co. case, 1 R.R. 2d 1 (1963) was remanded to the
Commission sub nom. KGMO Radio-Television, Inc. v. Federal Communications
Commission, 119 U.S. App. D.C. 1, 336 F. 2d 920, 2 R.R. 2d 2057 (1964), with
instructions to give KGMO an opportunity to amplify its allegations in support
of its request for the specification of a Carroll issue on the ground that KGMO
did not have notice of the new pleading requirement necessary to support a
Carroll issue. The Commission's action on the remand is contained in the
Missouri-Illinois Broadcasting Co. case, 3 R.R. 2d 232 (1964). In the
latter case, the Commission listed the type of material that a petitioner
should submit in support of the request for a Carroll issue. Since the
petitioner herein did not have notice of these new pleading requirements, it
was given an opportunity to amend and amplify its allegations. The
Commission now has before it for consideration the pleadings of the petitioner
and the applicant, as amended.
12. The Commission has considered the contentions of the
petitioner and the applicant, as amended, and is of the opinion that the
petitioner has met the burden of pleading to the extent required by Folkways
Broadcasting Co., Inc. v. FCC, 8 R.R. 2d 2089. In its response to the
Commission inquiries, the petitioner alleged specific facts and drew
conclusions which were reasonably related to these factual allegations.
In sum, petitioner has offered to prove that the economic effect of a new
station in Sioux Falls would be detrimental to the public interest because it
would result in a net loss or degradation of public service to the area.
Although the burden of proof on the petitioner is heavy, it is not required to
prove its case prior to hearing. All that is required at this stage to
warrant the specification of the Carroll issue is that the petitioner allege
facts which prima facie indicate that a grant of the application would not
serve the public interest. The Commission is of the view that the
petitioner has raised substantial and material questions of fact concerning the
ability of the Sioux Falls market to support another standard broadcast station
without a net loss or degradation of service to the community. These
questions can only be resolved in an evidentiary hearing. Accordingly,
the Carroll issue will be specified. The burden of proceeding with the
introduction of the evidence and the burden of proof will be placed on the
petitioner.
[*711] 13. The petitioner urges that, in view of the
alleged inadequacy of available revenues, the applicant's estimate of operating
revenues ($58,000) are unrealistic. On the basis of this allegation, the
petitioner requests the specification of an issue to determine whether the
applicant is financially qualified to construct and operate as proposed.
The petitioner has not made a clear showing that the estimates are unrealistic
and, therefore, the Commission will not permit the petitioner's judgment to be
substituted for that of the applicant. The applicant has demonstrated to
the satisfaction of the Commission that it is financially qualified to construct
and operate the proposed station for 1 year without revenues.
Approximately $48,186 will be required to cover the downpayment on equipment,
land, buildings, miscellaneous expenses, and 1 year's working capital.
They will contribute $20,000 as original partnership capital and have
demonstrated their ability to meet their respective commitments. A bank
loan of $30,000 is available, and a personal loan by one of the partners of
$5,000 is also available. An equipment manufacturer has extended credit
of $12,585 with a downpayment of 25 percent and the balance payable over a
36-month period. Accordingly, the applicant is financially
qualified. Ultravision Broadcasting Co., 1 FCC 2d 544, 5 R.R. 2d 343
(1965).
14. There remains no other material or substantial question of
fact which would warrant the specification of issues in this proceeding.
Accordingly, KISD's petition will be granted to the extent indicated above and
will be denied in all other respects.
15. Except as indicated by the issues specified below, the
applicant is qualified in all respects to construct, own, and operate the
proposed station. However, for the reasons indicated above, the
Commission is unable to make the statutory finding that a grant of the
application would serve the public interest, convenience, and necessity, and is
of the opinion that the application must be designated for hearing on the
issues set forth below.
Accordingly, It is ordered, This 8th day of February 1967, that,
pursuant to section 309(e) of the Communications Act of 1934, as amended, the
application Is designated for hearing, at a time and place to be specified in a
subsequent order, upon the following issues:
1. To determine the efforts made by the applicant to ascertain
the programming needs and interests of the area to be served and the manner in
which the applicant proposes to meet such needs and interests.
2. To determine whether there are adequate revenues to support
more than three commercial standard broadcast stations in the area to be served
without a net loss or degradation of standard broadcast service to the area.
3. To determine, in the light of the evidence adduced pursuant to
the foregoing issues, whether a grant of the application would serve the public
interest, convenience, and necessity.
It is further ordered, That the petition to deny the application filed
by KISD, Inc., Is granted to the extent indicated above and Is denied in all
other respects.
It is further ordered, That KISD, Inc., Is made a party to the
proceeding.
It is further ordered, That the burden of proceeding with the
introduction of the evidence and the burden of proof with respect to issue No.
1 shall be upon the applicant and the burden of proceeding with the
introduction of evidence and the burden of proof with respect to issue No. 2
shall be upon KISD, Inc.
It is further ordered, That, in the event of a grant of the
application, the construction permit shall contain the following condition:
Pending a final decision in docket No. 14419 with respect to presunrise
operation with daytime facilities, the present provisions of section 73.87 of
the Commission's rules are not extended to this authorization, and such
operation is precluded.
It is further ordered, That to avail themselves of the opportunity to
be heard, the applicant and party respondent herein, pursuant to section
1.221(c) of the Commission's rules, in person or by attorney, shall, within 20
days of the mailing of this order, file with the Commission in triplicate, a
written appearance stating an intention to appear on the date fixed for the
hearing and present evidence on the issues specified in this order.
It is further ordered, That the applicant herein shall, pursuant to
section 311(a)(2) of the Communications Act of 1934, as amended, and section 1.594
of the Commission's rules, give notice of the hearing, within the time and in
the manner prescribed in such rule, and shall advise the Commission of the
publication of such notice as required by section 1.594(g) of the rules.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
I concur. See FCC v. Sanders Bros.& Radio Station, 309 U.S.
470 (1940); Carroll Broadcasting Co. v. FCC, 258 F. 2d 440 (D.C. Cir. 1958);
Folkways Broadcasting Co., Inc. v. FCC, 8 R.R. 2d 2090 (D.C. Cir. 1967) and
Meeks, Economic Entry Controls in FCC Licensing: The Carroll Case Reappraised,
52 Iowa L. Rev. 236 (1966).
STATEMENT OF COMMISSIONER ROBERT T. BARTLEY, CONCURRING IN PART AND
DISSENTING IN PART IN WHICH COMMISSIONER LOEVINGER JOINS
I concur in setting the application for hearing on the issue as to
ascertainment of community needs. However,
I would include the duopoly and revenue issues but not the Carroll issue.
In view of the majority's including the Carroll issue, I would
therefore consolidate in the hearing the license renewal of petitioner's
station KISD, which is due April 1, 1968, to determine, in the event it is
found that the community cannot support another station without causing the
petitioner's particular station to operate in derogation of the public
interest, which application is better qualified to be the licensee of that
facility. Herbert P. Michels, 17 R.R. 557.