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URL 21: Czarra’s Maneuver 2—Why Harm Us? We’re the Good Guys!

URL 21: Czarra’s Maneuver 2—Why Harm Us? We’re the Good Guys! (In Chapter 32, page 155) (1,397 words) (cum 14,220 words)

1. This proceeding involves the mutually exclusive applications of Western Communication Inc. (Western, or Donrey), for renewal of its license for station KORK, Channel 3, Las Vegas, Nevada, and Las Vegas Valley Broadcasting Co. (Valley, the challenging group), for a construction permit for a new TV broadcast station to operate on Channel 3, Las Vegas, Nevada. Now before the Review Board is a petition to enlarge issues, filed April 6, 1973, by Western, which requests that the issues in this proceeding be enlarged to include a meritorious issue with respect to programming at Stations KFSA, Fort Smith, Arkansas, and KOLO-TV, Reno, Nevada. (Footnote 1)

2. By Order released June 12, 1972, FCC 72-503, 35 FCC 2d 517, the Commission designated Western’s renewal application for Station KORK-TV for hearing on an issue to determine whether it had engaged in fraudulent billing practices by network clipping, as well as a misrepresentation and candor issue. (Footnote 2) By Order released January 8, 1973, FCC 73$-1, 38 FCC 2d 974,the Review Board, at Western’s request, added a meritorious programming issue with respect to the programming at Station KORK-TV. The Board stated, however, that the effect of evidence adduced under this issue must be limited to mitigation of adverse findings under the fraudulent billing issue; evidence of meritorious programming would be of no decisional significance if the applicant should be found to have made willful misrepresentations to the Commission.

3. Western’s present request for a second meritorious programming issue stems from the Board’s action adding issues to determine whether Western engaged in fraudulent billing practices in violation of Section 731205 of the Commission’s Rules and Regulations at commonly owned or controlled Stations KFSA-TV and KOLO-TV; and, if so, what effect such evidence should have on Western’s comparative qualifications. Memorandum Opinion and Order released March 23, 1973, FCC 73 R-120, 40 FCC 2d 203. Petitioner now maintains that a meritorious programming use should be added to the comparative aspects of this proceeding in order to avoid the “unfairness” that would result if only the unfavorable aspects of its commonly-owned stations were to be singled out for consideration. (Footnote 3) In support of its position, practitioner cites a list of cases in which meritorious programming issues have been added in order to afford an applicant the opportunity to mitigate the effect of adverse findings under existing basic qualifications issues.

4. In opposition, Valley contends that petitioner has cited no precedent for the addition of a meritorious programming issue where the comparative, as distinct from the basic, qualifications of the applicant are in question. Moreover, Valley maintains that the Board’s action in United Television Co. Inc., FCC 7OR-246, 19 RR 2d 625, limits the effect of evidence of meritorious programming to the mitigation of basic qualifying matters. Additionally, Valley asserts that in denying Western’s motion to assign a burden of proof under the comparative fraudulent billing issues, (Footnote 4) the Board reinforced the inappropriateness of adding a meritorious programming issue under these circumstances. (Footnote 5) In its opposition, the Bureau alleges that Western’s motion should be denied on two grounds: First, the fraudulent billing issues have been added only for comparative significance where in the past meritorious programming issues have only been specified with regard to items that could result in the disqualification of a renewal applicant. Second, the licenses of KFSA-TV and KOLO-TV are not at stake in this proceeding and, therefore, the Bureau contends, the programming at these stations is not pertinent to this proceeding.

5. In reply, Western maintains hat Valley and the Bureau have not come to grips with the rationale that supports the petitioner’s request; namely, that it would be arbitrary for the Commission to limit the inquiry into past broadcast record deficiencies without permitting the favorable aspects of past performance to be explained. Moreover, petitioner asserts that the Board’s action in Jack Straw Memorial Foundation, 26 FCC 2d 97, 20 RR 2d 492 (1970), supports its request in that the drastic sanction of disqualification need not be the only basis for the addition of a meritorious programming issue. (Footnote 6) Petitioner also argues that, with respect to the United decision, the Board simply intended that “meritorious program evidence pertaining to rule violations that occurred after the last license period could not be considered as part of the renewal applicant’s comparative showing, which was limited to the past license period.” Finally, Western contends that if in denying a motion to ascribe the burden of proof the Board did no more than “afford Valley an opportunity to introduce evidence which it regards as detrimental to the comparative qualifications of Western,” then fundamental fairness requires that Western be given an opportunity to offer evidence helpful to its comparative qualifications.

6. The Board will deny Western’s request for a meritorious programming issue. In a recent opinion, KFPW Broadcasting Co., 40 FCC 2d 126, 26 RR 2d 1633 (1973), the Commission held that evidence of meritorious programming was inappropriate in mitigation of adverse findings under a qualifying “bribery” issue. In doing so, the Commission stated the following:

“By the same token, we believe that bribery of network officials or any other acts involving moral turpitude relating to the operation of a broadcast station would be sufficient analogous to the misrepresentation situation to warrant similar treatment if proven. Once an applicant is shown to be untrustworthy due to evidence reflecting adversely on his personal integrity, a grant would simply not be appropriate no matter how meritorious his past programming had been. (Emphasis supplied.) 26 RR 2d at 1634.”

In our view, allegations of fraudulent billing are sufficiently analogous to allegations of bribery of network officials (in that both involve acts reflecting on moral turpitude in the operation of a broadcast station (to compel the conclusion that the holding of the KFPW Broadcasting Co. case is applicable here. Although we are here concerned with only the comparative qualifications of the applicant, a logical extension of the Commission’s rationale is that the assessment of a demerit should not be offset by evidence which has no meaningful relationship to the conduct in issue. (Footnote 7) In short, since the Board is of the view that fraudulent billing involves that degree of culpable conduct which renders consideration of past programming as a mitigating factor inappropriate, the requested issue must be denied (Footnote 8)

7. Accordingly, it is ordered, that the contingent motion to add meritorious programming issue with respect to KFSA-TV, Fort Smith, Arkansas, and KOLO-TV, Reno, Nevada, filed April 6,1973, by Western Communications, Inc., is denied.

Footnotes:

1. Petitioner entitled its pleading a “Contingent Motion to Add Meritorious Programming Issue with Respect to KFSA-TV, Fort Smith, Arkansas, and KOLO-TV, Reno, Nevada.” Also before the Board are the following related pleadings: (1) Broadcast Bureau’s opposition, filed April 19, 1973; (b) Opposition, filed April 19, 1973, by Valley; and (c) Reply, filed May 1, 1973, by Western.

2. A subsequent Order, released September 1, 1972, FCC 72-767, 37 FCC 2d 266, consolidated Valley’s application with the KORK-TV renewal proceeding under the same issues and a comparative issue.

3. As Western points out, it has filed an Application for Review of the Board’s addition of the issues pertaining to possible fraudulent billing activities at the two commonly-owned stations, and therefore, its present motion is contingent on unfavorable action by the Commission on the Application for Review.

4. See FCC 73$-159, FCC 2d, released April 17, 1973.

5. Valley quotes the following language from the Board’s order: “The issue added by the Board does not run to the basic qualifications of Western but rather to its comparative qualifications. In these circumstances, the Board has done no more than afford Valley an opportunity to introduce evidence which it regards as detrimental to the comparative qualifications of Western.

6. In that case, a meritorious programming issue was added, even though the maximum sanction was a short term renewal.

7. It is possible that under some circumstances, evidence of meritorious programming may be relevant with regard to specified comparative issues. We agree with petitioner that our decision in United, supra, is not determinative of that question and that Jack Straw, supra, does lend support to such a request.

8. The Board notes that, in light of the Commission’s decision in KFPW, and our discussion above, consideration of meritorious programming evidence as set forth in our order released January 8, 1973, supra, has been rendered moot.

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