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URL 23: Czarra’s Maneuver 4—No Money, No Honey

URL 23: Czarra’s Maneuver 4—No Money, No Honey (In Chapter 32, page 155) (1,917 words) (16,552 cum words)

1. Western Communications, Inc. (Western or Donrey), in another of a long series of petitions to enlarge issues against Las Vegas Valley Broadcasting Company (Valley, the challenger), its competitor in this proceeding, seeks addition of an issue as to the cost of Valley’s transmitting tower and the affect thereof on that applicant’s financial qualifications and a related misrepresentation, lack of candor, Sections 1.65 and / or Section 1.514 issue. (Footnote 1)

2. To understand what this petition entails and the basis of our disposition of it, some factual background is needed. When Valley filed its application on September 1, 1971, a guyed (Footnote 2) antenna tower 80 feet high was specified, and a sum of $92,000 was provided to cover the cost of the tower, antenna, transmission line, and other elements of the antenna system. Part of Valley’s financial showing consisted of a credit letter from RCA covering equipment in the amount of “approximately $1,470,000.” The letter is dated August 25, 1971. No detailed breakdown of the equipment proposal and cost of the respective items was included in the letter, but Section V-C of the application form did give the type numbers and makes of much of the transmitting equipment. A mountain-top site where two other TV transmitters were already located was specified. On October 26, 1971, some ten months before this case was designated for comparative hearing, Valley amended its application in several respects, one of which was in its engineering proposal to change to a 225 foot guyed tower and a new site. The equipment credit letter was not changed by this amendment or by any of the several subsequently-filed amendments to Valley’s application.

3. After the comparative proceeding was initiated, Western filed on October 6, 1972, a motion to enlarge issues in which, among other things, the amount of equipment Valley would buy from RCA was questioned, it being Western’s view that Valley planned to purchase less than $1,470,000 worth of material from RCA with the result that less than $1,042,287 in deferred credit would be available. In is petition, Western made a rather detailed analysis of Valley’s technical proposal and the costs of various items included therein. Western also challenged Valley’s transmitter size costs, including the cost of 125 feet of transmission line in addition to the 150 feet of this item originally proposed. Farther on in its petition, Western contended that at the amended site on Black Mountain, (Footnote 3) the erection of a 225-foot guyed tower was not feasible and that a self-supporting tower would be required. In one of the affidavits attached to the petition, an engineering consultant specifically referred to the need for Valley to purchase additional transmission line, to the 80-foot guyed tower Valley first proposed, and to the 225-foot guyed tower called for at the new site.

4. When Valley responded to that petition, it contended that there was sufficient leeway in the RCA letter to permit the erection of a guyed or a self-supporting tower without any change in the financial arrangements. Valley relied heavily on an affidavit from a Communications Consultant, Mr. Packard, who referred to conversations with Mr. Luddy, a representative of RCA, concerning the equipment to be acquired, and with Mr. Bergen, a consulting engineer, also about the equipment proposal. Specifically, Mr. Packard discussed the aforementioned letter of credit which, he stated, was the result of conversations between Luddy, Bergen, and himself. He referred to later discussions which led to tentative proposed changes in the equipment arrangements to effectuate a reduction in overall costs but stated that these did not lead to the issuance of a new RCA letter of credit or an amendment in the application. Packard then went on to make the following representations:

On November 7 and 8, 1972, I held telephone conversations with Noel Luddy and Serge Bergen to determine whether the revisions previously considered, if effected, would be sufficient to allow for the increased cost of a self-supporting tower, approximately 225 feet high, on Las Vegas Valley’s proposed transmission line. The original proposal had provided approximately $30,000 for a guyed tower.

Serge Bergen estimated, after discussions with Stainless, Inc., a tower manufacturer, that a 225 foot guyed tower could be completely installed for approximately $25,000. A self-supporting tower of the same height would cost, as estimated by Stainless, Inc., approximately $59,000. However, Stainless reports that a guyed tower could be used if a minimum of about 100 feet out from the base of the tower is available for guying. Mr. Bergen has personally seen the proposed site, and is of the opinion that sufficient space exists for a guyed tower. Accordingly, he sees no reason for Valley to change its proposal to a self-supporting tower at this point.

However, in view of the above, it is my opinion that sufficient credit has been included within the present RCA letter to allow Las Vegas Valley to erect a guyed or a self-supporting tower on its proposed transmission site.

5. When it replied to the opposition, Western repeated is contention that if Valley did not purchase the full amount of equipment from RCA, the full amount of credit would not be available from RCA and maintained that Valley’s opposition had failed to answer the questions it raised regarding the transmitter site. Western did not challenge the correctness of Packard’s estimates of the costs of constructing either a guyed or a self-supporting tower at the Black Mountain site. On March 9, 1973, the Board released a Memorandum Opinion and Order, (Footnote 4) in which, among other things, it rejected the request for the letter of credit issue and the issue relating to transmitter site access and suitability. Referring to the possibility that Valley might have to erect a self-supporting rather than a guyed tower, the Board noted Packard’s statement that there was sufficient leeway in the RCA proposal to permit this change and concluded that the circumstances did not warrant addition of the issue.

6. Turning now to the instant petition to enlarge, first the arguments concerning timeliness must be weighed. There can be no debate about the fact that Western was extremely late in filing this request, but Western argues that there is good cause for the delay because it did not have “reasonable cause for suspecting problems with the tower cost estimate figures” until January 25, 1974, during preparation for rebuttal hearings on Valley’s proposal to meet its transmitter site access cost issue by means of helicopter transport. Western argues that until that time, it had no grounds for suspecting that the RCA deferred credit equipment proposal was based on a 100-foot rather than a 225-foot tower.

7. Western’s arguments for good cause are, to put it very simply, incredible. From the time Valley filed its application to the filing of the instant petition, no change has been made in the equipment supplier’s credit proposal, despite numerous other changes, including those involving the antenna tower; and since Valley changed the height of its proposed tower without changing the arrangements wet forth in the supplier’s credit proposal, Western had easily available to it all the data necessary to raise the question it now raises.

8. On its merits, Western’s petition is equally deficient. The petition is in good measure based on an affidavit of Mr. Nelson, the sales manager of a tower manufacturer, who asserts that the construction of a guyed tower 225 feet high would cost $20,000 more than a guyed tower 100 feet high. He does not state that the cost would be. After Valley and the Bureau had filed their oppositions, Western submitted a reply containing another affidavit from Nelson stating that assuming normal site condition a guyed 225 tower would cost about $44,000, but that a tower of this height on Black Mountain (Footnote 5) “would cost substantially more than $44,000 due to actual sight (sic) conditions.” Again, no figure is given. In the Packard affidavit referred to earlier, an estimate for $59,000 for a 225 foot self-supporting tower is given, and the opinion is expressed that sufficient credit is available to permit the construction of such a tower. Thus, even if the Board accepts Western’s estimate of substantially more than $44,000 being required, Valley has substantially more than that amount available.

9. The allegations in support of the misrepresentation and related issues are also lacking in merit. The misrepresentation which Western alleged in its petition to enlarge stems entirely from its own neglect in examining Valley’s application as originally filed. However, in its reply pleading, petitioner attempts to bolster its misrepresentation contentions by submitting new material which should have been offered with the petition to enlarge. Thus, the engineering affidavit referred to above as well as the new affidavit from Mr. Luddy of RCA could justifiably be ignored because they were held until the reply was submitted. (Footnote 6) However, under the circumstances of this case, the Board will not follow that course but will examine the new material and also accept Valley’s response to the reply.

10. The new Luddy affidavit contains assertions that on January 7, 1972, RCA issued an alternate letter of credit to Valley calling for total equipment purchases of approximately $1,390,000, a sum less than that specified in the letter filed with the application. However, Luddy concedes that the original letter was not modified or withdrawn. This concession, plus the fact that Valley denies having received the letter and never modified its application in this respect, leaves this aspect of Western’s reply completely unpersuasive.

11. Western also attempts to undermine the Packard affidavit by pointing out that although the affidavit contains a statement that Mr. Bergen had seen the antenna site, at the hearing Bergen stated to the contrary. While the error is not to be condoned, it is not of sufficient impact, either standing alone or in conjunction with the other elements of Western’s attack on Packard’s affidavit, to warrant specification of additional issues either on the question of financial qualifications or of the misrepresentation and related matters urged by Western.

12. To summarize, no good cause for the late filing of this petition was shown. As to the merits, under the Edgefield-Saluda test, (Footnote 7), the likelihood of prevailing on the issues it proposes is so slight that the public interest benefits inherent in the orderly and fair administration of the Commission’s business are not outweighed, and the petition must be denied.

13. Accordingly, it is ordered, that the petition to enlarge issues filed by Western Communications, Inc. (KORK-T) on February 8,1 974, is denied.

Footnotes:

1. The petition was filed February 8, 1974. An addendum was filed February 13, 1974. And Valley and the Broadcast Bureau fled oppositions on February 21, 1974. Western filed a reply on March 5, 1974, after which Valley submitted, on March 18, 1974, a response.

2. This is a cable used to secure anything likely to shift its position.

3. There are two Black Mountains in the Las Vegas area. One is in the McCullough Range, south of Vegas. The Black Mountain referred to in the hearings is in the city of Henderson. It’s un-named, but it’s commonly called Black Mountain.

4. 39 FCC 2d 1077, 26 RR 2f 1456, review denied, FCC 74-175, released February 21, 1974.

5. Nelson states that his company constructed and installed the self-supporting tower used by KLAS-TV on Black Mountain.

6. See Industrial Business Corporation, 40 FCC 2d 69, 26 RR 2d 1447 (1973).

7. The Edgefield-Saluda Radio Company, et. al,, 5 FCC 2d 148 (1966)

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