LEXSEE 25 F

In Re: KCMC, INC. For Approval of Agreement by Television Station KTAL-TV, Texarkana, Tex.

FEDERAL COMMUNICATIONS COMMISSION

25 F.C.C.2d 603

RELEASE-NUMBER: FCC 70-1004

September 21, 1970 Released

Adopted August 27, 1970

JUDGES:

BY THE COMMISSION: COMMISSIONER BURCH, CHAIRMAN; DISSENTING AND ISSUING A STATEMENT IN WHICH COMMISSIONER JOHNSON JOINS; COMMISSIONERS COX AND JOHNSON DISSENTING AND ISSUING SEPARATE STATEMENTS.

OPINION:

[*603] 1. On July 29, 1969, the Commission granted renewal of the license of KTAL-TV, Texarkana, Texas, and approved an agreement between a number of local public interest groups and the station which provided that the local groups would withdraw a petition to deny and the station would make certain specified changes in its operations ( KCMC, Inc., 19 FCC 2d 109). Now before the Commission is a request for approval of an additional aspect or term of the settlement: payment by the licensee of the expenses of the Office of Communication of the United Church of Christ, which provided legal services and other support to the local groups. (Letter to the Commission, dated October 1, 1969, from Earle K. Moore, attorney for the United Church of Christ).

2. The issue raised is whether the public interest is served by permitting the payment of expenses to one who files a petition to deny under Section 309 of the Communications Act. There is no explicit statutory guide for this situation. In Section 311(c), Congress specified that there could be reimbursement, limited to legitimate prudent expenses, where applicants for new facilities withdraw and thus facilitate the early initiation of new service. There is no explicit statutory guide for any other situation, which would thus have to be judged under the public interest standard. See National Broadcasting Co., Inc., 25 Pike & Fischer 67 (1963). Acting under that standard, we have been generally loath to permit payment of expenses. See National Broadcasting Co., Inc., supra. n1; Tidewater Teleradio, Inc., 24 Pike & Fischer, [*604] R.R. 653 (1962); but cf. Lompoc Valley Cable TV, Inc., 1 FCC 2d 66 (1965).

n1 National Broadcasting Company concerned a renewal application by NBC, and a new application for the same channel by Philco Broadcasting Company. The Commission was asked to approve an agreement that Philco would withdraw its application and NBC would pay Philco the amount it has spent in prosecuting its application, up to $550,000. The Commission denied approval of the agreement, reasoning that in construction permit cases, settlements can speed service to the public, but that such a saving of time is not a factor in a case where one of the parties is currently operating a station. Not only was this benefit thus absent, but also, the Commission stated, there were detriments to the public interest from such a course.

3. With this as brief background, we turn to the petition to deny situation. We believe that we should adhere to the general proposition stated above, and not permit the payment of expenses in petition to deny situations. There are two important public interest considerations in this particular area of petitions to deny by listener groups. First, the Act is designed to facilitate the filing of the petition to deny. See Sections 309, 311(a); Office of Communication of the United Church of Christ v. F.C.C., 123 U.S. App. D.C. 328, 359 F. 2d 994 (1966). Second, while any settlement must be examined by the Commission, and a grant of renewal made only if it does serve the public interest (see Section 307(d)), the settlement of the issues between the station and the petitioning listener group is generally a desirable goal. For the heart of the matter is an effective, good faith working relationship between the licensee and the public which he is to serve. The atmosphere to be promoted should be one of generous cooperation -- not strife and suspicion. As we stated in this case in our letter to the licensee approving the withdrawal of the complaints and granting renewal, "cooperation at the community level should prove to be more effective in improving local service than would be the imposition of strict guidelines by the Commission." ( KCMC, Inc., 19 FCC 2d 109).

4. Payment of expenses is not necessary to the effectuation of either of these public interest goals. Petitioner here has made no showing that it is, and based on our experience, we cannot find any such necessity. Thus, in the past six months we have granted renewals in a significant number of situations after the licensee and public groups amicably settled matters similar to those contained in KTAL and after review of the overall operation of the stations during the last renewal period. Since the question of reimbursement has been totally lacking in all these cases, not one of these groups has been discouraged by the fact that there would not be any reimbursement, either in the filing of its petition or the amicable settlement thereof. On the other hand, there are clearly detriments to the public interest, were we to allow the payment of expenses in these petitions to deny situations. First, there is the possibility of abuse -- of overpayments (e.g., inflated fees) or even opportunists motivated to file insubstantial petitions in order to obtain substantial fees. While careful scrutiny by the Review Board can and does make a significant contribution to alleviate this problem, by its nature, it is one which remains to some extent and is troublesome. Second, there is the possibility that settlement of the merits of the dispute might be influenced by the ability to obtain reimbursement of expenses from the licensee. Since the crucial consideration here is the merits of the dispute, we believe that it serves the public interest, as a prophylactic measure, to insure that no such private, extraneous consideration as the payment of expenses becomes a factor in the settlement. n2 There are other pertinent considerations, but we [*605] believe that further exposition is unnecessary, and that what is called for is adherence to the general proposition described in par. 2, supra.

n2 We note that while this particular agreement was not contingent in any way upon the matter of expense payment, the precedent established by permitting payment in this instance means that this matter then could well become a significant, extraneous consideration in future negotiations.

5. In this connection, we stress that this is a principle of general application -- namely, that in no petition to deny situation, whatever the nature of the petitioner, will we permit payment of expenses or other financial benefit to the petitioner. Thus, we adhere to the Tidewater ruling, supra, and take the occasion to overrule expressly a case such as Lompoc Valley, supra.

6. Accordingly, IT IS ORDERED, That the payment by KCMC, Inc., of the expenses of the Office of Communication of the United Church of Christ in its association with the opposition to renewal of the license of KTAL-TV IS NOT APPROVED.

FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.

DISSENTBY: BURCH; COX

DISSENT:

DISSENTING OPINION OF CHAIRMAN BURCH IN WHICH COMMISSIONER JOHNSON JOINS

The matters presented in this case involve conflicting policy considerations. Unlike the majority but with some serious reservations and limitations, I would have ruled in favor of the petitioner.

First, I recognize there is the very real possibility of abuse in this area. Broadcasters might well be inclined to make fairly generous expense payment settlements in any conflict involving renewal of their license. There is thus the chance that in some instances unscrupulous persons might seek denial with the sanguine expectation of a generous and quick settlement.

However, there are strong countering considerations. We do allow reimbursement of expenses in several situations. Under Section 311(c), we have done so in many comparative hearing situations involving application for construction permits. We have done so recently in a comparative renewal proceeding -- the National Broadcasting Co., Inc., (KNBC) 24 FCC 2d 218 (1970), and while this may have been a departure from our established practice, as a practical matter, it nevertheless does constitute a precedent for payment of expenses. My point is really a very simple one: If payment is allowed in these other situations -- also fraught with the danger of abuse -- why should it not be allowed in this situation?

It cannot be said that there are no public interest benefits stemming from such payment. It may facilitate the settlement of issues between the licensee and the petitioning group, and, as the majority recognizes, that kind of amicable settlement generally markedly serves the public interest.

In view of the principle of payment of expenses which has been established and followed in other situations, I would permit such payment here also. However, since there is the danger of abuse, I would adopt strict measures to guard against such abuses -- namely, that the Review Board should be instructed to allow payment only after a searching scrutiny as to factors such as the following:

(1) That the petition to deny was filed in good faith by a responsible organization;

[*606] (2) That the petition raised substantial issues;

(3) That the settlement also entailed solid, substantial results;

(4) That there was a detailed showing that the expenses claimed were legitimately and prudently made.

DISSENTING STATEMENT OF COMMISSIONER KENNETH A. COX

I dissent to the action of the Commission denying a request for approval of payment by the licensee of KTAL-TV of expenses incurred by the United Church of Christ in connection with a petition to deny the renewal of that station's license. I think this matter has significant adverse implications for efforts by public groups to improve the performance of our licensees, so would like to set forth my reasons.

The last preceding license term for the station expired August 1, 1968. It duly filed an application for renewal prior to that date, but action thereon was deferred pending the filing of additional information requested by the Commission. On October 21, 1968, the Broadcast Bureau granted the application for renewal for the period ending August 1, 1971. This action was rescinded on November 14, 1968, pursuant to Section 1.113 of our rules, pending consideration of a letter from the Texarkana Junior Chamber of Commerce charging that KTAL-TV had failed to serve the Texarkana area in certain respects set forth therein. Most of these items were included in a complaint later filed with the Commission by the Jaycees, but this was withdrawn in February 1969, after the Jaycees and the licensee of the station had met to discuss ways of improving KTAL-TV's service to Texarkana.

Meanwhile, however, on January 10, 1969, twelve unincorporated associations in Texarkana and the surrounding area filed a Petition to Deny n3 the renewal application, alleging that the licensee had failed to serve the needs, interests, and desires of the Negro population. One or more of these groups had asked the United Church of Christ for assistance, n4 and the Office of Communications of the United Church of Christ had helped in the preparation of the Petition to Deny, but did not sign it. Without going into detail as to the Petition, I think it is accurate to say that the matters raised were serious and that the Commission would probably have designated the renewal application for hearing. However, before the Commission reached the matter for action, the licensee submitted an agreement dated June 8, 1969, between the licensee and the twelve petitioning organizations. This agreement recited that the licensee would broadcast in prime time a new statement of policy n5 it had adopted, which was also to be filed with the FCC as an amendment to the pending renewal application. Any material variance from that statement was to be deemed a failure to operate substantially as set forth in the station's license. The agreement [*607] then bound the petitioners to join in requesting the Commission to give no further consideration to their pleadings and to renew the license of KTAL-TV for a full term.

n3 Another Petition to Deny the renewal application was filed by Dr. Mitchell Young, president of Freedom, Inc. It was denied by a letter adopted July 29, 1969 (19 FCC 2d 124) and is not relevant to the matter with which we are concerned here.

n4 The Church has played a leading role in developing techniques whereby members of the public can participate in Commission proceedings in order to seek improvement in the service they receive from their local radio and television stations.

n5 I am attaching this statement of policy as Appendix A to indicate the importance of the matters in dispute between petitioners and the licensee and to demonstrate that the result of their negotiations was significantly in the public interest.

The Commission responded to the agreement and its attached statement of policy by granting renewal of the license for KTAL-TV for the period ending August 1, 1971. KCMC, Inc., 19 FCC 2d 109. However, in the letter advising the licensee of its action, the Commission cautioned the station that its performance during this period would be carefully examined at the end of the license term to determine whether it had diligently served the needs and interests of Texarkana. The letter contained the following paragraph:

Subsequent to the filing of these complaints, KTAL-TV personnel met with representatives of the complaining organizations. As a result of the meetings, the complaints were settled and the complainants notified the Commission that they wished to withdraw their pleadings. We believe that this Commission should encourage licensees to meet with community oriented groups to settle complaints of local broadcast service. Such co-operation at the community level should prove to be more effective in improving local service than would be the imposition of strict guidelines by the Commission. (Emphasis supplied).

I agree with this concept, and it has been applied in a number of communities to effect improvement in local broadcast service without long and expensive hearings, during which the licensed status of the stations concerned would have been in jeopardy. To permit this procedure to work, we have extended time for the filing of petitions to deny against stations in Atlanta, Memphis and Youngstown -- though we denied such a request in Nashville because it appeared that the complainants had not begun good faith negotiations with the stations in a timely way. But I think the action here discourages the process of local negotiation by barring stations which are willing to reimburse the expenses incident to the petitions to deny from doing so.

The letter to KCMC, Inc., was dated July 29, 1969. By letter dated October 1, 1969, Earle K. Moore, who is counsel for the United Church of Christ and served as attorney for the petitioners, requested assurance from the Commission that it has no objection to the reimbursement by KCMC, Inc., of $15,000 in expenses incurred by the United Church of Christ in connection with this matter. He advised the Commission that as part of the settlement of the KTAL-TV controversy, the licensee had indicated a willingness to pay the expenses incident to the preparation of the petition and the subsequent negotiations with the station. However, since there appeared to be no precedent for such action, the licensee declined to make reimbursement without a ruling by the Commission as to its propriety. The affidavits attached to the letter indicate expenses totaling $15,137.11 for office supplies, postage, express charges, telephone and telegraph, duplicating costs, travel expenses, field staff per diem fees, clerical services, and attorneys fees. It thus appears that the Church, having been asked to aid the petitioners, incurred most of the expenses which led to the agreement for improving the station's service to its community, thus establishing a precedent for such procedures elsewhere. I think the public interest would be served by approving reimbursement of these costs.

In response to staff inquiry, Mr. Moore dispatched a telegram on August 26, 1970, providing further information. In this he stated that [*608] (1) a request for reimbursement of the Church's expenses had been included in petitioners' complaints; (2) consideration of this request was deferred because of the station's uncertainty as to its propriety; (3) the Church indicated it would not permit this matter to stand in the way of an agreement between petitioners and the station; (4) after petitioners and the station had reached the agreement embodied in the document of June 8, 1969 and petitioners had indicated willingness to sign without regard for reimbursement of expenses, counsel for the station stated that it would be prepared to make the requested reimbursement on the conditions (a) that the agreement of June 8, 1969 be first approved by the Commission and (b) that the station be assured that the Commission did not object; (5) the method of obtaining this assurance was to be resolved after the Commission had acted on the agreement; and (6) there was no writing confirming this understanding and it was regarded as extraneous to the agreement between the petitioners and the station. By letter dated August 20, 1970, counsel for KTAL-TV set forth his recollection of these actions, which agrees in every material respect with Mr. Moore's account.

The concern of the station that it not appear to be buying petitioners off is understandable, and the willingness of the Church to have the petitioners and the station settle their differences without assurance of reimbursement of its expenses is highly commendable. Such forbearance of leverage has not been noticeably prevalent in transactions coming to my attention during my term on the Commission. Despite the station's concern, I really do not think the Commission would have acted differently if it had known that at a later stage the parties would present a separate and extraneous proposal for reimbursement of expenses. Indeed, if the Church had been more intent on recouping the sums it had expended from its slender resources in order to help petitioners and had insisted on reimbursement as a condition to settlement of the matter, I suspect that most of my colleagues of the majority would have approved the payment in question. See for example, the vote in National Broadcasting Company, Inc., 24 FCC 2d 218. Suppose that in the future some tough minded local group who have petitioned to deny a renewal and won promise of better performance from the licensee should decide that they should not be required to pay the cost of enforcing the station's responsibilities when the licensee is the one who has been profiting from his use, as a trustee, of the frequency assigned to him. Suppose they are willing to negotiate a settlement assuring the community of improved service, but insist that equity requires that the licensee bear their costs. Suppose that the licensee is willing -- indeed eager -- to reimburse them in order to facilitate execution of an agreement disposing of the petition to deny, so he can get a grant of his renewal, and so advises the Commission. As in this case, I think the public interest would be served by approval of such an agreement -- and I think that, if this situation ever comes about, my colleagues of the majority after suitable expressions of reluctance, will grant such approval. The alternative would be to force the licensee and petitioners into a hearing, with substantial additional expense to both -- and with substantial risk [*609] to the licensee. Consider, for example, what happened when this alternative was pursued in the case of WLBT. Our new policy statement governing comparative renewal proceedings states that the licensee cannot upgrade his performance after he is challenged, but must prove that his record during his last license period justifies renewal. It applies this policy with equal force to petitions to deny. I really do not believe that the majority are so convinced of the alleged evils of payment of expenses in these cases that they will force a licensee to run this kind of gauntlet.

I am afraid that the majority's real ground for acting to deny reimbursement of the Church's expenses is a distaste for public intervention in the renewal process. The United Church of Christ challenged the Commission's disposition of petitions to deny the renewal of WLBT in Jackson, Mississippi, and in the process elicited two stinging Court of Appeals decisions which were highly critical of this agency. Office of Communications of the United Church of Christ v FCC, 359 F 2d 994 (1966); Office of Communications of the United Church of Christ v FCC, 425 F 2d 556 (1968). The first of these, furthermore, established the general principle that public organizations are entitled to standing in such cases, and that they can seek judicial review of the Commission's decisions. Despite the italicized language in the quotation from our letter to KCMC, Inc., which is set forth above, I do not think my colleagues of the majority are really willing to encourage broad public participation in our renewal processes. If they were, I do not think they would object to the concept that a station whose renewal has been challenged should be allowed to reimburse its challengers' expenses when it has settled its differences with them and they join in urging grant of its renewal.

The costs incurred by public groups in filing petitions to deny and negotiating with the affected stations are usually small when compared with the expenses of a comparative hearing, or even a fully litigated hearing on such a petition. But they may run to several thousands of dollars -- as in this case -- and if the Commission rules that such parties can never recover their out-of-pocket costs this will either discourage local groups from becoming involved with station renewals or limit the quality of the job they can do in such cases. And the impact on national organizations like the United Church of Christ, which may be called upon to assist in renewal challenges in a number of widely separate communities, will simply be to restrict the number of such requests they can honor. If this is what the majority wish to accomplish, I think they should frankly admit it. I do not think such an objective is even remotely in the public interest.

It would be a different matter if the Commission had the resources -- and if the majority had the inclination -- to review the performance of a significant percentage of licensees at renewal time and press them to improve their service. But that is not the case, and we are therefore heavily dependent on local residents to call deficiencies to our attention and demand their correction. In some cases these are private parties who file competing applications in an effort to displace existing licensees who are alleged to have provided inferior service. While such proceedings serve the public interest by making licensees accountable [*610] and perhaps by providing a better alternative, a principal motivation of the competing applicant is private gain. So in such cases we do not allow reimbursement of expenses where the challenger is willing to drop out of the case if he can get such payment. National Broadcasting Co., Inc., FCC 63-257, 25 R.R. 67 (1963) n6 and the same policy applies to parties who file petitions to deny in pursuit of their own financial interests. Tidewater Teleradio, Inc., FCC 62-1246, 24 R.R. 653 (1962).

n6 However, the Commission recently allowed NBC to pay the expenses (over $100,000) of a group who had challenged the renewal of KNBC-TV in Los Angeles. National Broadcasting Company, Inc., 24 FCC 2d 218. We pointed out that the challengers might have been encouraged by an apparent shift in policy, which was then sharply limited in our Policy Statement on Comparative Hearings Involving Regular Renewal Applicants, 35 F.R. 822. So although, unlike this case, the challengers there were primarily seeking to promote their own interests and the public got no improvement in service, we found sufficient equities to justify permitting NBC to pay nearly seven times as much in expenses as is involved here. All but one of the members of the majority voted for that payment to a private party, but they now profess to see something improper in a far smaller payment to a public group which was motivated only by a desire to promote the public interest. I think this is an interesting but indefensible difference in position.

However, I think the situation is quite different where those filing petitions to deny are not seeking to gain private profit but are simply acting as private attorneys generally assisting the Commission in the discharge of its duties. I think they should be allowed to receive reimbursement of their reasonable expenses, partly as a matter of equity and partly to encourage others to interest themselves in securing adequate broadcast service.

Two contentions were advanced by the majority in our discussions of this matter. n7 First it was claimed that Congress, in Section 311(c) of the Act, contemplated reimbursement of expenses only to facilitate the commencement of new service, and that to propose a general policy of reimbursement in renewal cases where new service will not be provided improperly extends the concept beyond the intent of Congress. I think the answer is simply that Congress never considered this situation, but was only addressing itself to the then pressing problem of how competing comparative applicants might compose their differences in order to expedite new service to the public. Certainly there is nothing in the legislative history of that section to indicate that Congress would disapprove reimbursement here. On the contrary, Congress, in Section 311(a), has required local publication of notice of filing of broadcast applications in order to facilitate public involvement in the renewal process. To allow reimbursement here simply promotes that Congressional purpose. And, in any event, the Commission permits reimbursement in other cases which Congress has not included in Section 311(c). The KNBC case discussed in Footnote 4 is one instance. Similarly, the Commission for years has permitted a different kind of reimbursement of expenses in connection with the assignment of construction permits. The applicable standard in these cases is the general one of the public interest which pervades the Act and which the majority say must control here. I think that to allow reimbursement of the expenses of public groups who have been interested enough in the public's broadcast service to participate in the renewal process and who have won promises of improved service is clearly in the public interest.

n7 I am attaching as Appendix B a form of Memorandum Opinion and Order of the sort which I believe should have been adopted in this case. It states the affirmative grounds for authorizing reimbursement, but does not, of course, rebut the arguments of the majority.

[*611] The second argument is based on anticipation of imagined abuses which have not thus far occurred, and which could be guarded against if they ever did, because the Commission can insist that it approve every such agreement. There was a good deal of loose talk of opportunists, barratry, outside professional organizations which might pressure major licensees for financial reasons, and so on. To press such arguments in this case is sheer rot. What we have here, as already indicated, is a reputable national religious organization which has, perhaps, become the most experienced entity in the country in dealing with renewal matters of the kind involved in the Texarkana situation. It was invited to help, and in doing so incurred substantial expenses -- and achieved notable results. The licensee did not challenge the claims for expenses as in any way excessive or unreasonable, and apparently the majority do not do so either. So to conjure up horror tales as a basis for denying reimbursement here is ridiculous.

Not every petition to deny is significant enough to require either station concessions or designation for hearing. Letter to Edward Kilpatrick and Allan Phelps dated November 25, 1969, FCC 69-1312. With rare exceptions leading broadcasters have not been the targets for petitions to deny -- certainly not by the United Church of Christ. If someone challenges the renewal of a licenses who has adequately served the public interest, then presumably there would be no need for concessions such as were made here -- and no need for reimbursement of the expenses of the petitioner to deny. If abuses develop -- if, for example, the same individual or organization appears in a good many such cases and always claims substantial expenses -- then the Commission can intensify its review of such claims to make sure that the claimant is not using our renewal processes for his personal profit. I do not think a hypothetical concern for imagined abuses is sound ground for denying reimbursement of reasonable expenses in this case.

This opinion, substantially in the above form, was written before I saw the majority's Memorandum Opinion and Order. In the light of the language in that document, I would like to add the following comments.

(a) In Paragraph 2, the majority recognize that Section 311(c) of the Communications Act does not apply here, but that this case must be disposed of under the public interest standard. I agree, and for the reasons set out above, I believe the public interest would be affirmatively served by approval of the reimbursement requested here.

(b) In Paragraph 3, the majority say that the Act is designed to facilitate the filing of petitions to deny, and that the settlement of the issues between a station and a listener group which has petitioned to deny its renewal is generally a desirable goal -- subject only to examination by the Commission to insure that the renewal which is to flow from the agreement is truly in the public interest. The Commission has already approved the agreement in Texarkana, with expression of approval of such "cooperation at the community level" -- and does not now question that it was in the public interest. I fail to see, however, how denial of reimbursement of petitioners' expenses in this case -- or the assurance in Paragraph 5 that "in no petition to deny situation, whatever the nature of the petitioner, will we permit [*612] payment of expenses or other financial benefit to the petitioner" -- can be said to "facilitate the filing of the petition to deny." On the contrary, it seems perfectly clear that the adamant refusal to allow reimbursement of the expenses of those who seek to force improvement in the service of a local station can only discourage the filing of a petition to deny its renewal. I ask again: Why should members of the public who have not received adequate service from a local licensee (who has profited from the form of operation objected to) have to bear the unavoidable costs involved in negotiating an agreement binding the licensee to upgrade his performance to an acceptable level? By what twisted logic can it be claimed that the pronouncement here that any members of the public so bold as to insist that their stations operate in the public interest may not shift the cost of their efforts to the delinquent broadcasters in some way "facilitates" the use of the statutorily sanctioned petition to deny?

(c) In Paragraph 4, the majority state that payment of petitioners' expenses is not "necessary" to the goals of facilitating filing of petitions to deny or of promoting settlement of disputes and future cooperation between broadcasters and groups of petitioning viewers or listeners. I think this shift to the more restrictive concept of necessity -- apparently involving some kind of demonstration that petitions to deny cannot be filed without reimbursement of expenses -- cuts the heart out of the affirmative concept of facilitating the use of petitions to deny which the majority say they favor and recognize as required by the Act. The majority say that petitioners have made no such showing of necessity here. That is true -- perhaps because no one ever suggested to them that such a showing was required. Obviously they cannot show that payment of their expenses now is "necessary" -- that is to say, was a prerequisite -- to the filing of their petition on January 10, 1969. But it is self evident that if the United Church does not get the $15,000 KTAL is willing to pay it by way of reimbursement, the Church will have that much less in the way of funds "necessary" to carry on its program of assisting local groups who feel that licensees have shortchanged their communities. The majority make much of the claim that there have been some 40 cases of agreements between public groups and licensees in the past six months without anyone claiming reimbursement. Most of these involved situations where adjustments were made without the filing of petitions to deny, permitting staff disposition of the renewal applications. All of them built on the pioneering efforts in Texarkana which are involved here. In many of them, legal services have been provided by the Citizens Communications Center. I am sure that it can show that reimbursement of its expenses is "necessary" if it is to meet the calls on its services by public groups all over the country. But more fundamentally, I point to the majority's own emphasis on facilitating the filing of petitions to deny. I don't see how they can reconcile that worthy concept with this new and highly restrictive concept of necessity.

(d) Further in Paragraph 4, the majority profess to find "detriments to the public interest" in the proposal to allow payment of expenses in cases of petitions to deny. First they cite the possibility [*613] of abuse, which I have already discussed above. I will only add here the observation that if we can't rely on the Review Board to ferret out overpayments or other abuses in these cases, how can we depend on it to process settlements under Section 311(c)? Presumably the majority should favor asking Congress to repeal that section of the Act because the problem of possible abuse "remains to some entent and is troublesome." I think the majority exaggerate this problem in order to come up with some sort of explanation for the result they have reached.

(e) The other "detriment" noted by the majority in Paragraph 4 is the "possibility that settlement of the merits of the dispute might be influenced by the ability to obtain reimbursement of expenses from the licensee." (Emphasis added). Presumably this means that they are afraid that someone in the position of the United Church or Mr. Moore might settle for less in the way of improved broadcast service than the public interest requires n8 in order to make the licensee more willing to reimburse the costs they have incurred. There is not a scintilla of evidence that any such consideration entered into the negotiations here. The majority are simply inventing hobgoblins to discredit the concept of reimbursement. I think the nature of the groups who are filing petitions to deny and the Commission's review of any agreement involving reimbursement are adequate assurances that such imagined influences on negotiations are unlikely to be a serious problem.

n8 I am delighted at this evidence of my colleagues' desire to get the last possible concession from the embattled licensee. I just wish they were as ardent in pursuit or improved broadcast performance in other areas of the Commission's responsibilities.

(f) The concluding sentence in Paragraph 4 refers to "other pertinent considerations." I haven't the faintest notion what they could be, and think this simply represents an effort to imply additional grounds for this action which I do not think exist. If there are other material bases for this result they should be set forth.

I am afraid the majority, by their action here, will seriously curtail the bona fide participation of the public in our review of broadcast performance at renewal time. I think that is clearly not in the public interest and runs contrary to our past policies -- and indeed the provisions of the statute -- which seek to encourage public activity. I have therefore dissented to the action of the majority.

APPENDIX:

APPENDIX A

STATEMENT OF POLICY

KTAL-TV, having in mind its duty to serve equally all segments of the public makes the following statement of policy:

1. KTAL will continue to observe all laws and Federal policies requiring equal employment practices and will take affirmative action to recruit and train a staff which is broadly representative of all groups in the community. As part of this policy, KTAL will employ a minimum of two fulltime Negro reporters, one for Texarkana and one for Shreveport. These reporters will appear regularly on camera. In addition, KTAL will designate one person on its program staff to be responsible for developing local public affairs programs of the type described later in this statement and for obtaining syndicated or other programs to serve similar needs.

2. KTAL will continue to maintain and will publicize a toll-free telephone line from Texarkana to its studios in Shreveport. A person will be available in Shreveport to receive requests for news coverage and inquiries about public service announcements. KTAL will give adequate coverage to events in the state capitols of Texas and Arkansas, as well as those of Louisiana and Oklahoma.

3. KTAL recognized its continuing obligation to maintain appropriate facilities in Texarkana, its city of assignment. To this end, it will assign to its main studios in Texarkana a color television camera.

4. KTAL recognizes its obligations to present regular programs for the discussion of controversial issues, including, of course, both black and white participants. The station will not avoid issues that may be controversial or divisive, but will encourage the airing of all sides of these issues.

5. Poverty is a primary problem in KTAL's service area. KTAL is obligated to try to help solve this problem by publicizing the rights of poor persons to obtain services and the methods by which they may do so. KTAL will also inform public opinion about the problem of poverty and the steps that are being taken to alleviate it. An aggregate of at least one-half hour of programming will be devoted to this subject each month.

6. KTAL religious programming should cover the entire range of religious thought. As part of its continuing effort to meet this obligation, KTAL will carry the religious programs presented by NBC representing the three primary American faiths. A discussion program will also be presented, to explore current religious issues, at least monthly. KTAL will regularly present ministers of all races on local religious programs. These ministers will be regularly rotated, in an effort to represent fairly all religious groups.

7. Network programs of particular interest to any substantial group in the service area will not be preempted without appropriate advance consultation with representatives of that group.

8. KTAL is obligated to discuss programming regularly with all segments of the public. In particular, a station employee with authority to act will meet once a month with a committee designated by the parties to the petition to deny KTAL's TV application for license renewal. Similar efforts will be made to consult with groups representing other segments of the public.

9. KTAL will regularly announce on the air that the station will consult with all substantial groups in the community regarding community taste and needs and will accept suggestions on how best to render this service. This announcement will be broadcast once a week, on a weekday, between 7:00 P.M. and 11:00 P.M.

10. KTAL reaffirms its existing policy to make no unessential references to the race of a person. In cases where such references are made, the same practice shall be and will be followed for blacks as for whites. KTAL will continue to use courtesy titles for all women, without regard for race.

11. KTAL will endeavor to develop and present at least monthly, in prime time, a regular local magazine-type program, including not only discussion but also local talent, and seeking participation from the entire service area.

12. KTAL will solicit public service announcements from local groups and organizations. Sound on film will be used more extensively in covering local news. In covering demonstrations, picketing and similar events, KTAL-TV will seek to present the diverse views which gave rise to the event.

13. KTAL-TV undertakings are subject to all valid laws, rules and regulations of the Federal Communications Commission and to KTAL's primary obligation as a broadcast licensee to use its own good faith and judgment to serve all members of the viewing public. It is recognized that needs and circumstances change, that events may compel departure from these undertakings. However, KTAL-TV will not depart from these undertakings without advance consultation with the affected groups in the service area and advance notice to the Federal Communications Commission stating the reasons for the departure. In such instances KTAL will seek to adhere to the objectives of this statement by alternative action.

APPENDIX B

BEFORE THE FEDERAL COMMUNICATIONS COMMISSION

WASHINGTON, D.C. 20554

In Re KCMC, Inc. For Approval of Agreement by Television Station KTAL-TV, Texarkana, Tex.

MEMORANDUM OPINION AND ORDER

BY THE COMMISSION:

1. On July 29, 1969, the Commission granted renewal of the license of KTAL-TV, Texarkana, Texas, and approved an agreement between a number of local public interest groups and the station which provided that the local groups would withdraw a petition to deny and the station would make certain specified changes in its operations (KCMC, Inc., 19 FCC 2d 109). Now before the Commission is a request for approval of an additional, but wholly independent, term of the settlement: payment by the licensee of the expenses of the Office of Communication of the United Church of Christ, which provided legal services and other support to the local groups. (Letter to the Commission, dated October 1, 1969, from Earle K. Moore, attorney for the United Church of Christ.)

2. The issue raised is whether approval of such expense settlements is consistent with the public interest. Cf. National Broadcasting Co., et al, FCC 63-257, 25 R.R. 67 (1963); Tidewater Teleradio, Inc., FCC 62-1246, 24 R.R. 653 (1962). We believe that it is. The policy of the Communications Act is to favor participation by the public in the Commission's processes. See Sections 309, 311(a) of the Communications Act of 1934, as amended; Office of Communication of the United Church of Christ v. FCC, 123 U.S. App. D.C. 328, 359 F. 2d 994 (1966) ("... the Congressional mandate of public participation..."). The reason is obvious: The entire scheme of the Act is service to the public (Section 315(a)). The broadcaster is licensed to serve as an outlet for local expression, and thus has the duty equitably and in good faith to ascertain and serve the needs and interests of his area. Section 307(b); Commission En Banc Programming Inquiry, FCC 60-970, 20 R.R. 1901 (1960); Primer on Ascertainment of Community Problems by Broadcast Applicants, 20 FCC 2d 880 (1970). If the public believes that the broadcaster is not meeting that responsibility, it is entitled to bring its claims to the station and, if not resolved at that level, to the Commission, if the matters raised do fall within the Commission's ambit and are not, for example, mere questions of taste (see Section 326).

3. The Court in Office of Communication of the United Church of Christ v. FCC aptly stated the matter (359 F. 2d at p. 1003):

"The Commission of course represents and indeed is the prime arbiter of the public interest, but its duties and jurisdiction are vast, and it acknowledges that it cannot begin to monitor or oversee the performance of every one of thousands of licensees. Moreover, the Commission has always viewed its regulatory duties as guided if not limited by our national tradition that public response is the most reliable test of ideas and performance in broadcasting as in most areas of life. The Commission view is that we have traditionally depended on this public reaction rather than on some form of governmental supervision or 'censorship' mechanisms.

"'[It] is the public in individual communities throughout the length and breadth of our country who must bear final responsibility for the quality and adequacy of television service -- whether it be originated by local stations or by national networks. Under our system, the interests of the public are dominant. The commercial needs of licensed broadcasters and advertisers must be integrated into those of the public. Hence, individual citizens and the communities they compose owe a duty to themselves and their peers to take an active interest in the scope and quality of the television service which stations and networks provide and which, undoubtedly, has a vast impact on their lives and the lives of their children. Nor need the public feel that in taking a hand in broadcasting they are unduly interfering the private business affairs of others. On the contrary, their interest in television programming is direct and their responsibilities important. They are the owners of the channels of television -- indeed, of all broadcasting. FCC, Television Network Program Procurement, H.R. Rep. No. 281, 88th Cong., 1st Sess. 20 (1963). (Emphasis added.)"

Taking advantage of this "active interest in the * * * quality" of broadcasting rather than depending on governmental initiative is also desirable in that it tends to cast governmental power, at least in the first instance, in the more detached role of arbiter rather than accuser.

4. Our policy on the question before us should therefore be formulated in light of the above basic policy to facilitate public participation in our proceedings. Viewing the matter in that light, we believe that we should permit reimbursement of legitimate and prudent expenses to members of the public or public organizations. First, we note, as the Court indicated in United Church (359 F. 2d at pp. 1004, 1006) that such groups frequently lack financial resources; if reimbursement is permissible, this may well facilitate the filings by such groups or promote their continuing future participation in the all-important relationship between the station and the public. Second it may also facilitate the settlement of the issue between the station and the petitioning group, and that in itself is generally a desirable goal. Of course any such settlement must be examined by the Commission, and a grant of renewal made only if it does serve the public interest. Section 307(d). Our policy, however, should clearly be geared to promoting such amicable settlements. For the heart of the matter is an effective, good faith working relationship between the licensee and the public which he is to serve. The atmosphere to be promoted should be one of generous cooperation -- not strife and suspicion. As we stated in this case in our letter to the licensee approving the withdrawal of the complaints and granting renewal, "cooperation at the community level should prove to be more effective in improving local service than would be the imposition of strict guidelines by the Commission." (KCMC, Inc., 19 F.C.C. 2d 109).

5. There is the possibility of abuse. We shall, as stated, carefully examine the settlement and the overall public interest issues raised by the petition to deny, before acting to grant a renewal. Second, we shall require that all agreements for reimbursement of legitimate and prudent expenses be approved by the Review Board before payment is permitted. Finally, in order to avoid any possible abuses stemming from "... the prospect of lucrative contingent fees" (United Church of Christ v. FCC, 359 F. 2d at p. 1006), we shall limit such reimbursement to a top level of $20,000. This should render most substantial, if indeed not total assistance, to these public groups. Significantly, it allows for a 25% increase on expenses over this case, which does not appear to be atypical. n1

n1 Affidavits submitted to the Commission fully support the claim of $15,337.11. The affidavit of the United Church of Christ cites office expenses of $711.59, duplicating costs of $1,570.25, travel expenses of $2,993.93, field staff per diem fees of $900.00, and clerical services of $171.77. The affidavit from the groups' New York City attorney describes his work in some detail, from December 1968 to May 1969, including a five day trip to Texarkana, and states that a bill has been rendered to the United Church of Christ Office of Communication for $9,000.00 in legal fees and $501.16 in disbursements largely for Xerox reproduction, stenographic overtime, and air express charges.

6. Our holding is limited to the facts of this case, where members of the public or public organizations, rather than private business entities, are involved. It is not to be taken as applicable in other situations such as presented in Tidewater Teleradio, Inc., supra; cf also the Commission's recent Policy Statement on Comparative Hearings Involving Regular Renewal Applicants, Public Notice, January 15, 1970, n. 7.

7. Accordingly, IT IS ORDERED, this day of , 1970, That the payment by KCMC, Inc. of the expenses of the United Church of Christ Office of Communications in its association with opposition to renewal of the license of KTAL-TV IS APPROVED.

FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.

SEPARATE STATEMENT OF COMMISSIONER NICHOLAS JOHNSON

The Commission majority votes today to set a major policy that has significant -- perhaps devastating -- negative effects for citizens' groups that are battling to upgrade the performance of our broadcast licensees.

Chairman Burch's dissent, in which I join, puts the issues succinctly. I would, however, like to add a few additional words.

By a slim four-to-three majority the Commission refuses to approve an agreement that would have allowed KTAL-TV, Texarkana, Texas, to reimburse the United Church of Christ for expenses the church incurred in helping community groups oppose the station's license renewal. The church dropped the costly fight after the station grudgingly promised to improve minority hiring, programming and community service. If the Commission had chosen to approve the $15,137 reimbursement, it could have set a powerful precedent to encourage local public-interest groups to fight as "private attorney generals" in forcing stations to do what the FCC is unable or unwilling to do: improve licensee performance.

KTAL's last proceeding license term expired on August 1, 1968. Our Broadcast Bureau granted renewal on October 21, 1968, for the period ending August 1, 1971. As negotiations with the station for policy improvements continued, the Broadcast Bureau's action was rescinded in the face of community group opposition. The community groups asked the United Church of Christ for help, and it seems fair to say that without the Church's considerable expertise in these matters, the licensee might never have responded to legitimate local pressures for improvement.

On a broader level, it is important to sketch briefly what the Commission's role is and what it should be in renewal matters.

The regulatory agencies generally, and this one in particular, are currently under attack for being anti-consumer and anti-citizen. See, "The Regulatory Process: A Personal View," Address by Commissioner Philip Elman, Federal Trade Commission, American Bar Association meeting, St. Louis, Missouri, Aug. 11, 1970, reprinted, in Wall St. J., Aug. 12, 1970, at 12, col. 3. Our action today does not help correct that image.

James Landis, the great student of administrative law and late Dean of the Harvard Law School, stressed that the administrative process was originally designed "to plan, to promote, and to police" on behalf of the public interest. J. Landis, The Administrative Process 15 (1938). In the Commission's renewal function, there are three possibilities for taking care of the policing task:

1. The Commission's staff can do the job. But partly through lack of will and partly through lack of manpower and money, the Commission has rarely been able to give adequate attention to policing.

2. Another option is to encourage community groups and the growing alliance of consumer federations and citizens' lobbies to perform the agencies' work. This is sometimes called the "private attorney general" concept, and I have recently had an opportunity to explore this matter at length. N. Johnson, "Consumer Rights, 1970," a position paper prepared for presentation to the Consumer Protection Committee symposium, The Federal Bar Association Annual Convention, Washington, D.C., Sept. 17, 1970.

3. The final option, of course, is that no one does anything if the Commission itself or private attorney generals do not take up the challenge.

I find the first two options acceptable. The third is not. Yet given the precedent today, and this Commission's history of inaction in many other areas, the inevitable choice is becoming Option Three -- no choice at all. With encouragements like our precedent today, fewer people may be bound to do less and less in the great job of monitoring the broadcast licensees on behalf of the public interest. It is an indefensible posture for this Commission to find itself in.

Finally, I cannot let this occasion pass without a word about the masterful, thoughtful and exhaustive opinion of former Commissioner Kenneth A Cox. He has saved me the need to attempt to duplicate his efforts here, as on so many prior occasions. What is not readily apparent from our handling of this case, however, is that his analysis was originally prepared for the Commissioners only, as an attachment to our "notations" (minutes). I had intended to append his statement to my own opinion today in order that it might be published. We subsequently voted to record our action as of an earlier date, before Commissioner Cox had left the Commission, and issue it as his own opinion. I fully support that action. But I think it is worth noting the many, many ways in which the public and industry alike will be the poorer for the President's failure to reappoint Commissioner Cox. For his voluminous published opinions and public appearances were only a small part of his output. The same hard work, long hours, intelligence, imagination, basic decency and fairness were always present behind the scenes, too. He proofread our opinions and minutes, regularly picking up typographical and grammatical errors, citations, and basic inconsistencies in policy that had slipped by the 1,500 employees and other six Commissioners of the FCC. He brought to our deliberations a detailed knowledge of the broadcasting industry (as well as telephone, mobile radio and others), the stations, the economics and business practices, and the personnel. He gave generously of his time in talking with industry representatives -- and still retained the independence to vote against them when his conscience dictated. It is the height of pathos that on the rare occasions when this government does get a Ken Cox (or Phil Elman) Presidents seem unable to screw up their courage to reappoint them. He will be missed.