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In re Application of FORT BEDFORD ENTERPRISES, INC., ASSIGNOR, AND INQUIRER PRINTING CO., ASSIGNEE For Assignment of License of Station WAKM-FM, Bedford, Pa.

File No. BALH-1022

FEDERAL COMMUNICATIONS COMMISSION

11 F.C.C.2d 981

February 28, 1968

ACTION:

APPLICATION

JUDGES:

The Commission, by Commissioners Hyde, Chairman; Bartley, Lee, Cox, Loevinger and Johnson, with Commissioner Bartley dissenting to waiver of the 3-year rule, Commissioners Cox and Johnson dissenting and issuing statements, and Commissioner Loevinger issuing a concurring statement in which Commissioner Lee joins.

OPINION:

[*981] The Commission, by Commissioners Hyde, Chairman; Bartley, Lee, Cox, Loevinger and Johnson, with Commissioner Bartley dissenting to waiver of the 3-year rule, Commissioners Cox and Johnson dissenting and issuing statements, and Commissioner Loevinger issuing a concurring statement in which Commissioner Lee Joins, granted the application for assignment of license of station WAKM-FM, Bedford, Pa., from Fort Bedford Enterprises, Inc., to Inquirer Printing Co.

CONCURBY: LOEVINGER

CONCUR:

SEPARATE STATEMENT OF COMMISSIONER LEE LOEVINGER IN WHICH COMMISSIONER ROBERT E. LEE JOINS

(Re Transfer in Bedford, Pa.)

Bedford, Pa., is a town with a population of just under 3,700. It has a daily newspaper, a daytime-only AM radio station and an FM station. The FM station has lost money since it started operating, and its licensee cannot afford to incur continuing losses so is selling it. The Commission has approved its transfer to the owner of the AM daytime station, who also owns the local newspaper.

There are several circumstances that permit the new owner to operate the FM station when others could not afford to do so. The FM station can broadcast some of the same programs carried on the AM station. The FM station can provide nighttime broadcasting after the AM station is required to go off the air, which furthers the FCC policy of encouraging AM daytime-only stations to supplement their service by FM affiliates. And the combination of the two stations may permit better programming and more efficient operation than would be possible with either one alone.

Bedford, Pa., is served by 10 AM broadcasting stations and five FM stations located within 30 miles, plus two CATV systems and numerous broadcasting stations located slightly further from the community. Thirteen daily newspapers circulate in the county. In these circumstances talk of "monopoly control of local media" is more than unwarranted -- it is absurd. The separate dissenting opinions being filed in this matter appear to be attempts to make ideological mountains out of facts which don't even amount to genuine molehills. [Assignment of License of Station WAKM (FM), Bedford, Pa., From Fort Bedford Enterprises, Inc., to the Inquirer Printing Co.]

DISSENTBY: COX; JOHNSON

DISSENT:

DISSENTING STATEMENT OF COMMISSIONER KENNETH A. COX

I join in the dissenting opinion of Commissioner Johnson, but wish to add the following comments.

I sympathize with the principals of the assignor -- presumably they hoped their station would be profitable, but it has suffered substantial losses instead. However, concern for the private financial wellbeing of individual licensees is a poor basis for sound policy in the areas of station transfers and media concentration.

The transferor's president reported that he and his associates had tried to sell WAKM to the owner of a station in a nearby community, but that "he felt that the asking price was too high." Transferor's counsel stated that contacts were made by his office "to try to find a prospective purchaser who would pay more than Inquirer Printing Co., so that Fort Bedford Enterprises, Inc., would not lose money." While the transferor may not be able to operate its station any longer and should be allowed to sell, we should not consent to a transaction which results in an undesirable concentration of control of the media in Bedford simply in order to minimize the losses sustained by the station's present owners.

I agree with Commissioners Loevinger and Lee that the transferee – firmly ensconced as the owner of Bedford's only AM station and both its papers (one a daily and one a weekly) -- may be able to operate this FM station more economically than others could. But that argument would always lead to acceptance of monopoly of the local media of expression. I think a little inefficiency is to be preferred to such concentration. Transferor's stockholders were attracted by the possibilities [*982] of establishing a viable independent FM station in Bedford, thus providing the community with a second local voice. We cannot say whether their financial problems are due to the inability of the market to support such an independent operation, or to mistakes which they made but which others could avoid. For all we know, others would have been interested in buying the station -- and trying to maintain local diversity -- if only the price had been reasonable. But transferor held out for the highest possible price, and has gotten over $53,000 for a losing FM station which has been operating in a small community for barely more than 1 year. This is what transferee is willing to pay to tighten its monopoly, which it seems unlikely Bedford will ever shake off. The community – as distinguished from the transferor's stockholders -- might well be better off if WAKM went dark and left the community with just one station until it can support a second independent facility.

As Commissioners Loevinger and Lee point out, there are other radio stations in the area. However, I think it is misleading to say that Bedford is served by them. What the assignee told us -- and our staff passed along -- is that there are 10 AM and five FM stations within 30 miles of Bedford, but presumably they are busy serving their communities of assignment rather than Bedford. Of these, WSKE, a 250-w, daytime-only station in Everett, Pa., 7 miles from Bedford, is the only AM facility that actually provides 2-mv/m service to Bedford, while only two of the FM stations (WTBO-FM in Cumberland, Md., some 28 miles away, and WJAC-FM in Johnstown, Pa., an equal distance in the opposite direction) provide 1-7m/m signals to this community. Of these three, only WSKE can be assumed to have any real interest in the problems and needs of Bedford. All the other stations listed by assignee are at least 23 miles away and operate with such low power or such highly directional antennas that they fall substantially short of serving Bedford.

Again, it is true that 13 daily papers circulate somewhere in Bedford County, which runs some 41 miles from north to south and at least 25 miles from east to west. Over 54 percent of that circulation is accounted for by the Bedford Gazette, which is under common ownership with the assignee here. The balance is distributed as follows: a Johnstown paper, 1,372; a Huntington, Pa., paper, 856; a Pittsburgh paper, 725; a Cumberland, Md., paper, 550; an Altoona paper, 542; three Philadelphia papers, 328; two New York City papers, 122; a Washington, D.C., paper, 36; and a Harrisburg paper, 3. All of these communities are substantially larger than Bedford, the nearest of them is 28 miles away, and three of them are outside the State. It seems unlikely that any of these papers devote any significant attention to the affairs of Bedford. *While the residents of Bedford may turn to outside radio stations and newspapers for news of the region, the State, or the Nation, it seems clear that nearly all that they are going to hear about their own community -- its problems, its candidates, its projects -- will come to them from a single source, the transferee here.

I don't think it is "absurd" to refer to this as monopoly control of the local media -- in fact, if this is not such a monopoly, I don't see how [*983] one could ever exist. It seems a little odd that such a condition doesn't even qualify as a monopolistic molehill to one who was once this country's chief trustbuster. Commissioner Loevinger sometimes expresses concern about concentration in broadcasting, but it usually seems to be in a context or a "market" other than that involved in the case before us. As far as I am concerned, we can't combat undue concentration in the abstract, but must deal with it as the issue is posed -- sometimes in national terms, sometimes on a regional basis, and sometimes in a single community, sometimes large and sometimes as small as Bedford. I think the majority have here consented to the creation of a monopoly of the effective local media of communications in Bedford. They have done so before, and I am afraid they will do so again -- not out of any desire to promote such conditions, but because they sympathize with station owners who have lost money in the operation of broadcast stations, and because they see nothing wrong with letting such men sell their stations at the highest prices they can get, even though they can often get those prices most easily from people with other media interests. But the results are just as bad as if the majority had set out deliberately to achieve them. We cannot protect the interests of the public in diversity unless we are willing to see broadcasters absorb their losses by requiring them to sell to purchasers who pose no concentration problems. [*984]

DISSENTING OPINION OF COMMISSIONER NICHOLAS JOHNSON

Today the Federal Communications Commission grants its approval to a transfer of the license to operate the only FM radio outlet in Bedford, Pa., to the Inquirer Printing Co. The transferee company already holds the license for the only AM station in the community; before it entered the broadcasting side of the communications business it was already well established in the print media, by virtue of its ownership of the only newspapers in the community: one a daily and one a weekly. The Commission is, in other words, putting the finishing touches on a literal monopoly on the media of mass communication produced by and for the citizens of this hamlet. (The city of Bedford has a population of 3,696 and Bedford County has 42,451.) Although it is true that newspapers and broadcast outlets from nearby cities reach Bedford, we can be sure that, as of now, all the information which the media brings to its citizens about their own community, and much which emanates from the region, the Nation, and the world, is controlled by a single enterprise.

No doubt it will surprise many to find the Federal Communications Commission playing the role of midwife to such a creature. In particular would one be surprised if he were acquainted with the FCC's countless professions of fealty to the preservation of a diversified system of mass communication. (See, for a review of early authorities, "Committee on Interstate and Foreign Commerce, Network Broadcasting," H.R. Rep. No. 1297, 85th Cong., 2d sess., 106-124 (1958).)

Recently, the Commission has put its commitment to diffusing control over the media in a special statement defining the policy considerations relevant to choosing among competing applicants for a new radio or television license. "Policy Statement on Comparative Broadcast Hearings," 1 FCC 2d 393, 395 (1965). Indeed, if the transferee who is today acquiring his community's only FM station had appeared before the Commission and competed for the assignment of the license in a comparative hearing when the license was first made available, it is unlikely, to say the least, that the criteria set forth in the policy statement would have permitted us to grant his request.

But, as those acquainted with the facts of life at the FCC well know, and as Commissioner Cox and myself lamented in a recent opinion, enterprising communications entrepreneurs can often obtain via transfer what is forbidden to them by the policies governing grants of new licenses. "Assignment of license of FM broadcasting station WMDE-FM, Greensboro, N.C.," FCC public notice 10732, January 9, 1968; Farragut Television Corp., 8 FCC 2d 279, 285 (1967).

Inquirer Printing Co.'s acquisition of a communications monopoly in Bedford, Pa., is one of the more egregious recent departures from our oft-professed allegiance to the value of diversity. But it is not, unfortunately, atypical of the Commission's readiness to approve transfers to applicants who would never be considered suitable licensees in [*985] comparative proceedings. Transfer policy is the loophole through which these Government-authored threats to freedom of expression find their way into communities like Bedford, Pa.

To express my disagreement with the instant license transfer, and to call attention to the laxity with which the Commission generally administers transfer policy, I dissent to the present action.