In Re Application of WESTERN COMMUNICATIONS, INC. (KORK-TV), LAS VEGAS, NEV. For Renewal of License
Docket No. 19519 File No. BRCT-327
FEDERAL COMMUNICATIONS COMMISSION
35 F.C.C.2d 517
RELEASE-NUMBER: FCC 72-503
June 12, 1972 Released
Adopted June 9, 1972
JUDGES:
BY THE COMMISSION: COMMISSIONER JOHNSON CONCURRING IN PART AND DISSENTING IN PART AND ISSUING A STATEMENT; COMMISSIONER REID DISSENTING.
OPINION:
1. Now under consideration are: (a) the captioned application; (b) the Commission's inquiry into the operation of Station KORK-TV; and (c) a "Settlement Agreement" and related materials filed March 9, 1972, by Western Communications, Inc. (Western), and by Las Vegas Valley Broadcasting Company (Valley).
2. Valley has filed an application (BPCT-4465) for a construction permit for a new commercial television broadcast station to operate on channel 3, Las Vegas, Nevada, which is mutually exclusive with the KORK-TV renewal application. However, Western and Valley have filed an agreement looking toward a merger of the two companies. The agreement provides that Valley will dismiss its application for a new station upon Commission approval of: (a) the KORK-TV renewal application; (b) the merger agreement; and (c) the application assigning the license of KORK-TV to Western Valley Television, Inc., a new corporation in which Valley and Western have half interests. n1 In view of that agreement, Valley and Western have requested that action be deferred on their mutually exclusive applications to permit time to accomplish the proposed merger.
n1 The assignment application was tendered for filing on June 1, 1972.
3. We do not believe that the public interest would be served by an indefinite delay in the hearing ordered herein. Accordingly, the request of Valley and Western for deferred action will be denied, insofar as it pertains to Western's application.
4. The merger agreement between Valley and Western provides that either party may terminate the agreement if any application covered by the agreement is designated for hearing. If the agreement is terminated by either party, and if Valley indicates in writing that it wishes to prosecute its application through the hearing, a subsequent Order will be issued designating that application for hearing for comparative consideration with KORK-TV's renewal application. If, on the other hand, we receive no written statement from Valley indicating it desires to prosecute its application through the hearing, we shall proceed with the hearing ordered herein, provided that if it is found that KORK-TV's license should otherwise be renewed, the renewal application will be returned to the processing line. The merits of the merger agreement and the assignment application will have to be considered at an appropriate time.
5. Information before us raises serious questions as to whether Western possesses the qualifications to be or to remain a licensee of Station KORK-TV. In view of these questions, we are unable to find that a grant of the application would serve the public interest, convenience and necessity, and must, therefore, designate the application for hearing.
6. Accordingly, IT IS ORDERED, That the captioned application IS DESIGNATED FOR HEARING at a time and place specified in a subsequent Order, pursuant to Section 309(e) of the Communications Act of 1934, as amended, upon the following issues:
(a) To determine whether the licensee engaged in fraudulent billing practices in violation of Section 73.1205 of the Commission's Rules and Regulation, by certifying to the National Broadcasting Company in certain documents that the licensee broadcast certain network programs in their entirety, including commercial content, whereas the licensee had deleted certain network commercial advertisement in the programs certified as having been broadcast in their entirety;
(b) To determine whether in the course of the Commission's inquiry the licensee made misrepresentations to the Commission or was lacking in candor regarding its policies or practices in joining network programs after their beginning, leaving network programs before their end or extending network station or commercial breaks so as to affect the content of network programs.
(c) To determine, in light of the evidence adduced under the preceding issues, whether a grant of the application would serve the public interest, convenience and necessity.
7. IT IS FURTHER ORDERED, That if the application (BPCT-4465) of Las Vegas Valley Broadcasting Company is not consolidated in this proceeding, and if the application (BRCT-327) for renewal of license of Station KORK-TV would be grantable but for the pendency of BPCT-4465, the renewal application (BRCT-327) SHALL BE RETURNED to the proceeding line.
8. IT IS FURTHER ORDERED, That the Chief of the Broadcast Bureau shall serve upon Western Communications, Inc., a Bill of Particulars regarding the matters raised in Issues (a) and (b) above, within thirty (30) days from the release of this Order.
9. IT IS FURTHER ORDERED, That the Broadcast Bureau proceed with the initial presentation of the evidence with respect to Issues (a) and (b), and the applicant then proceed with its evidence and have the burden of establishing that it possesses the requisite qualifications to be and to remain a licensee of the Commission and that a grant of the application would serve the public interest, convenience and necessity.
10. IT IS FURTHER ORDERED, That the request for deferred action on the application of Western Communications, Inc., IS DENIED.
11. IT IS FURTHER ORDERED, That to avail itself of the opportunity to be heard, the applicant, pursuant to Section 1.221(c) of the Commission's Rules, in Person or by attorney, shall, within twenty (20) days of the receipt of this Order, file with the Commission, in triplicate, a written appearance stating an intention to appear on the date fixed for hearing and present evidence on the issues specified in this Order.
12. IT IS FURTHER ORDERED, That the applicant herein, pursuant to Section 311(a)(2) of the Communications Act of 1934, as amended, and Section 1.594 of the Commission's Rules, shall give notice of the hearing within the time and in the manner prescribed in such Rule and shall advise the Commission thereof as required by Section 1.594 of the Rules.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
DISSENTBY: JOHNSON (IN PART)
DISSENT:
OPINION OF COMMISSIONER NICHOLAS JOHNSON CONCURRING IN PART AND DISSENTING IN PART
The Commission today has taken action, implicitly and explicitly, against three licenses, all owned by the same group owner, in response to an investigation into various practices of the licensee. I concur insofar as the renewal application of KORK-TV has been designated for hearing. I dissent to the failure to issue an order to show cause why the license of KFSA-TV should not be revoked. And I dissent to the Commission's failure to take any action whatsoever against KOLO-TV.
A little background is necessary before discussing each station.
In response to complaints from viewers and station employees in Las Vegas, Nevada and Fort Smith, Arkansas, the Commission instigated an investigation into the billing practices of KORK-TV and KFSA-TV -- as well as KOLO-TV, in Reno, Nevada, owned by the same group owner. As a result of these investigations, the Commission was in a position to assess substantial "forfeitures" (fines) against all these stations. However, in expeditions handling of the matter by the Commission resulted in delay of some four weeks before today's action. In the course of these weeks, the one year statute of limitations ran on many of the violations uncovered by the investigation, thus making it impossible to assess a full forfeiture against the licensee.
Today, some four weeks after the cases first came to the Commission's attention, it has attempted to salvage some of what it could have accomplished originally.
KORK-TV (Las Vegas): The investigation of KORK-TV turned up several instances of "clipping" (not showing) portions of network programs and commercials (otherwise known as "overloading breaks") and falsely certifying to the network that the entire program was shown, as well as double billing for commercials, and responding to the Commission with something less than complete candor about its billing practices. The Commission has designated this application for hearing, and I concur in that action.
KFSA-TV (Fort Smith): As with KORK, the investigation uncovered instances of clipping and double billing. Unlike KORK, the Commission failed to take any action with regard to KFSA's license. Indeed, due to its lack of diligence, it is not even a good position to assess a monetary forfeiture as it might have been had it acted promptly. I see insufficient distinction between KFSA and KORK on the current state of the record to warrant treating them differently.
KOLO-TV (Reno): As with KORK and KFSA, the investigation uncovered instances of clipping and double billing. Because of delay in processing, all violations occurred more than one year prior to today's action, and the Commission cannot even assess a forfeiture. The incidents of double billing and clipping were substantially fewer than those in KORK and KFSA, but given the common pattern at three stations commonly owned, I would also set it for hearing on the issue of the licensee's character and qualifications to continue as a Commission licensee. In no event can one excuse the delay that resulted in the Commission's being powerless even to assess a forfeiture for an apparent violation of Commission rules.
I should note that none of the issues before us really affects the viewing public all that much. Each of these practices is of greater concern to networks, advertisers and the Commission than the public. Licensees' lying to the Commission is unknown to the public -- it just makes it impossible for the FCC to do its work. Double billing doesn't subject the public to any more commercials -- it's just good old fashioned commercial fraud among businessmen. "Clipping" (as it's generally practiced) deprives the public of little more than the "credits crawl" and network commercials at the end of a program (in exchange for local commercials), once again an issue between businessmen.
More than anything else, the actions with regard to these licenses point up what the business of television -- and its "regulation" -- really are. The Commission engaged in unconscionable and prejudicial delay. It failed to set all the stations for hearing. But the real lesson of this case is that as reluctant as the Commission was to take action in these cases, when the real interests at stake involve the financial interests of the networks, broadcasters and advertisers, the Commission is infinitely more responsive to complaints than to those alleging a failure to serve the viewing public.
If we could only count on even this halting and half-hearted enforcement of the public's rights in broadcasting, we would have made much progress indeed.