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URL 25: The FCC Says the Donrey-Valley Merger Can’t Take Place

URL 25: The FCC Says the Donrey-Valley Merger Can’t Take Place (In Chapter 33, page 157) (868 words) (17,762 cum words)

1: Now under consideration are: (1) 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. (Footnote 1)

2. Valley Broadcasting 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 between 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. (Footnote: The assignment application was tendered for filing on June 1, 1972.) In view of that agreement, Valley and Western have requested that action be deferred on their mutually exclusive applications to permit time to accomplish he proposed merger.

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 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 Regulations, 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 advertisements 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 applicant (BRCT-32) 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 processing 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 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 the applicant herein, pursuant to Section 311 (a) (2) of the Communications Act of 1934, as amended, and Section 1594 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.

Footnote 1: In the Order, Donrey is referred to by its corporate name—Western Communications, Inc., not “Donrey.”)

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