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In re Application of ROBERT P. O'MALLEY ET AL. (TRANSFERORS) and ILLINOIS BROADCASTING CO. (TRANSFEREE)

For Transfer of Control of Thoroughbred Broadcasters, Inc. Licensee of WLAP-AM-FM, Lexington, Ky.

File No. BTC-5391

FEDERAL COMMUNICATIONS COMMISSION

11 F.C.C.2d 939

February 14, 1968

ACTION:

APPLICATION

JUDGES:

The Commission, by Commissioners Hyde, Chairman; Bartley, Lee, Cox, Loevinger, Wadsworth, and Johnson, with Commissioner Loevinger abstaining from voting; Commissioner Bartley dissenting, and Commissioner Johnson dissenting and issuing a statement, granted transfer of control of Thoroughbred Broadcasters, Inc., from Robert P. O'Malley et al., to Illinois Broadcasting Co.

OPINION:

[*939] ANTICOMPETITIVE PRACTICES

[Transfer of control of Thoroughbred Broadcasters, Inc., licensee of WLAP AM-FM, Lexington, Ky., from Robert P. O'Malley et al. to Illinois Broadcasting Co.]

DISSENTBY: JOHNSON

DISSENT:

DISSENTING OPINION OF COMMISSIONER NICHOLAS JOHNSON

The Commission today grants without a hearing its approval of the transfer of control of Thoroughbred Broadcasters, Inc., licensee of WLAP AM-FM of Lexington, Ky., to the Illinois Broadcasting Co. Traditional policies designed to screen potential monopolists from the ranks of our licensees would require that this transaction be examined in a hearing before it proceeds. I see no reason to depart from that practice. Hence, I dissent.

Illinois Broadcasting is the corporate instrument through which the Lindsay and Schaub families, who acquired an interest in communications through their cluster of newspapers in Illinois cities, own and manage a growing bevy of broadcasting stations. Recently, the Department of Justice noted an excess of zeal in the methods used by the family's newspaper company, Lindsay-Schaub Newspapers, Inc., to pursue its growth objectives. In March 1967, the Department filed a civil complaint under the Sherman Act alleging that it had operated so as to drive the competitor of its Champaign-Urbana paper out of business. The proceeding was terminated when Lindsay-Schaub entered into a consent decree which enjoined it from refusing to sell advertising in the Champaigh-Urbana paper separate from advertising [*940] in its other papers, from lowering its rates so as to drive the competing newspaper out of business, from selling advertising on condition that the advertiser refrain from advertising in the competing paper, and from acquiring the competing paper.

I find our summary approval of this new double acquisition most regrettable, especially in view of the disturbingly cursory review which the Commission and its staff have given the matter. We have done very little more than read a condensation of the transferee's filings and the staff's description of its own informal oral exchange with the Justice Department attorney who handled the case. With no more evidence than this, the Commission has concluded that the alleged attack on a competitor in Champaign-Urbana, if it occurred as charged by the Department, will not be reenacted in any form in Lexington or elsewhere.

This is not a satisfactory way for a public agency to make decisions of such consequence. Indeed, today's action is indefensible, in view of the FCC's special responsibilities and traditions. It is now nearly two decades since the U.S. Court of Appeals for the District of Columbia Circuit first upheld the Commission's policy determination "that it is contrary to the public interest to grant a license to a newspaper which has attempted to suppress competition in advertising and news dissemination." Mansfield Journal Co. v. F.C.C., 180 F. 2d 28, 33 (D.C. Cir. 1950). Along with the court, I agree that "This would not appear to be a consideration conceived in whimsy but rather a sound application of what has long been the general policy of the United States. Congress intended that there be competition in the radio broadcasting industry. * * * Monopoly in the mass communication of news and advertising is contrary to the public interest, even if not in terms proscribed by the antitrust laws. Ibid. It may be that approval of the instant transfer would not be incompatible with this established policy of the Commission and of the United States. But certainly to grant approval without a hearing is a departure quite unwarranted by the circumstances before us.