section 74.1107 (e) (2). Dubuque Cable further asserts that Milwaukee station WVTV carries 164 hours of ABC network programing weekly, out of a total of 85 broadcast hours, and should therefore be classified as a partial network station. 3. WMT-TV, licensee of a television station on channel 2 in Cedar Rapids and of translator station K74BD in Dubuque, and Cedar Rapids, licensee of station KCRG-TV in Cedar Rapids, urge that the proposed service is inconsistent with proposed section 74.1107(e) (1) and that good cause has not been shown within the meaning of proposed section 74.1107 (e) (2). Cedar Rapids also asserts that Dubuque should be considered a smaller television market within the meaning of proposed section 74.1107 (d), since there is an outstanding construction permit for channel 40 in Dubuque. Dubuque Cable's original request for waiver was opposed by Chicago independent station WFLD, and also by the State Educational Radio and Television Facility Board of Iowa, which claimed that permanent carriage of WTTW would be inimical to development of a statewide educational television system. Dubuque Communication Corp. (the new permittee for station KDUB-TV on channel 40 in Dubuque), has opposed the present request on the ground that the addition of those two signals would doom any chance it has of survival. 4. Since Dubuque is approximately 161 air miles from Chicago, as compared to 145 from Milwaukee and slightly farther from Fond du Lac, Dubuque Cable's proposal involves leapfrogging which cannot be dismissed as de minimis. Contrary to the contention of WMT-TV and Cedar Rapids, the interim processing procedures contemplate flexibility for good cause shown within the meaning of proposed section 74.1107 (e) (2). See paragraphs 57-58 of the notice. Insofar as Dubuque Cable asserts a greater community of interest with Chicago because of more convenient transportation access and the comparative amount of out-of-town shopping done there by a portion of the Dubuque public, we do not consider these circumstances as sufficient in themselves to constitute good cause. The public interest in the carriage of closer independent stations in priority over those in the biggest cities like New York, Los Angeles, and Chicago is not lightly to be disregarded. However, Dubuque Cable also asserts that carriage of WFLD would again make available to its subscribers the full schedule of Chicago White Sox games which were received on its system via the signal of WGN-TV before that station ceased carrying them. Moreover, we note that the Milwaukee station does carry a substantial amount of ABC programing, which is already received by subscribers on the system. While the case is a close one, we think that these additional factors tip the balance in favor of a finding of good cause, when coupled with the circumstance that the difference in distance between Dubuque and the cities involved is not very great. 5. Upon activation of the outstanding construction permit for channel 40, Dubuque would become a smaller television market within the meaning of the proposed rules, since it is not a designated community 2 We find it unnecessary, however, to pass on the question of whether the Milwaukee station should therefore be classified as a partial network station within the meaning of the proposed rules. in the Cedar Rapids-Waterloo market. While this aspect of the proposed rules (i.e., protected zone for stations with construction permits), has been revised to provide 35-mile zones for stations with construction permits (see May 16, 1969, further notice of proposed rulemaking in docket No. 18397, F.C.C. 69-516), this revision is generally prospective only (see footnote 2a). This case is no exception to that general policy since, in this instance, it does not appear that the addition of one more distant independent signal will make much difference to the likelihood of successful inauguration of service on channel 40, in view of the signals already carried by Dubuque Cable pursuant to the carriage rules and a previous waiver of section 74.1107. Dubuque TV-FM Cable Company, 6 F.C.C. 2d 564. Dubuque presently carries four local signals: WMT-TV (CBS) and KCRG-TV (ABC), Cedar Rapids-Waterloo; WISC-TV (CBS), Madison, Wis., and WOC-TV (NBC), Davenport, Iowa. It also carries six distant signals: WGN-TV (Ind.), Chicago; WHA-TV (Ed.), Madison, Wis., KWWL-TV (NBC), Waterloo-Cedar Rapids; WHBF-TV (CBS), Rock Island, Ill., WQAD-TV (ABC), Moline, Ill., and WREX-TV (ABC/CBS), Rockford, Ill. In view of the present situation and the matters set forth above, we conclude that carriage of WFLD would not, in itself, adversely affect the public interest. Nor does it appear that carriage of this one independent signal would be any more prejudicial than carriage of two independents from Milwaukee and Fond du Lac, either in substitution for, or in addition to, WFLD. 6. Though served with Dubuque Cable's request for authority to carry WTTW pursuant to the interim processing procedures, the Iowa State Educational Radio and Television Facility Board has not renewed its earlier opposition to permanent carriage of that station. In that pleading, the Board stated that it had no objection to carriage of WTTW until the educational station on channel 12 in Iowa City (BPET-328) is activated. Dubuque Cable asserts that educators in Dubuque have had difficulty in obtaining curriculum materials from the Wisconsin educational station now carried on the cable (WHATV, Madison), which is geared to the Wisconsin school system, and that this would be easier in the case of WTTW which is supported by public contributions. In the circumstances, we conclude that the public interest would be served by granting a waiver for WTTW upon condition that Dubuque Cable substitutes the signal of any educational station that subsequently commences operation on channel 12 in Iowa City. 7. Accordingly, It is ordered, That the request for authority pursuant to interim procedures set forth in docket No. 18397 to add new distant signals, filed by Dubuque TV-FM Cable Co. on December 17, 1968, as supplemented, Is granted, section 74.1107 (a) Is waived, and Dubuque Cable Is authorized, to commence carrying the signals of stations WFLD and WTTW, upon condition that the signal of WTTW is replaced by the signal of any educational station that subsequently commences operation on channel 12 in Iowa City, Iowa. FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary. BY THE COMMISSION: COMMISSIONER BARTLEY ABSENT; COMMISSIONERS COX AND H. REX LEE CONCURRING IN THE RESULT; COMMISSIONER JOHNSON DISSENTING. 1. We have before us: (a) An application to assign the license of station KDOX, Marshall, Tex., from Gemini Enterprises II to KDOX, Inc.; (b) petition to deny filed by Radio Marshall, Inc., licensee of station KMHT, Marshall, Tex.; and (c) responsive pleadings thereto. 2. The above application for assignment of the license of station KDOX was filed with the Commission on August 15, 1968. KMHT's petition was not filed until October 25, 1968. Two procedural questions are raised in the pleadings: (a) Whether the petitioner is a party in interest and (b) whether the Commission should waive the 30-day period for filing petitions to deny required by section 1.580 (i) of our rules. We will consider the petition on the merits, and therefore, will not consider the procedural questions. 3. Preliminarily, the petitioner points out that the agreement for the sale of station KDOX is dated April 24, 1968, but was not filed with the Commission until August 15, 1968, when it was filed together with the assignment application itself. These allegations are not denied by station KDOX. In the opposition pleading, we find the following language: Counsel have investigated the failure to promptly file the contract for the sale of the station and can find no excuse other than inadvertence for such failure ***. 4. Sections 1.613 and 1.613 (3) of the Commission's rules provide that contracts of the nature involved herein must be filed ** * * within 30 days of execution thereof." Therefore, the failure to file the above-mentioned sales contract dated April 24, 1968, by May 24, 1968, was in violation of the aforementioned rules. Since the licensee "* * * can find no excuse other than inadvertence for such failure ** ** we will impose a notice of apparent liability for forfeiture against Gemini II, licensee of station KDOX, in the sum of $1,000 under the provi sions of section 503 (b) (2) of the Communications Act of 1934, as amended. Further reference to this matter will be made in paragraph 14, infra, et seq. 5. The petitioner also charged the transferors with a violation of section 1.597 of the Commission's rules (3-year rule) on the following basis: The following people now compose the partnership of Gemini Enterprises II, assignor herein: Orman L. Kimbrough_ Percent 25.5 25.5 49.0 Kimbrough and Morton acquired station KDOX in July of 1964 as equal partners, owning 50 percent each. On June 15, 1966, the Commission approved a KDOX assignment application (BAL-5791) whereby Morton and Kimbrough sold a 49 percent combined interest to John D. Mitchell. Since the latter application was granted within 3 years of the filing of the instant application, the petitioner charges that the Commission's 3-year rule is in question. 6. Briefly, that rule provides that, with certain exceptions, assignment or transfer applications for broadcast licenses held for less than 3 years will be designated for hearing. The rule, however (sec. 1.597 (1) (3)), excepts pro forma assignment or transfer applications (FCC form 316 assignment or transfer applications) from the commencement of the 3-year period. 7. Commission records indicate that Morton and Kimbrough, in addition to their interest in station KDOX, were and now are in privity as business associates, either as copartners or costockholders, in the licensees of stations KEES, Gladewater, Tex., and KAWA, Waco, Tex. Being thus associated, the Commission considered their interest in station KDOX as a single interest. Therefore when Kimbrough and Morton sold Mitchell 49 percent in 1966, but retained a 51 percent interest, de jure control continued to vest in Kimbrough and Morton as a single entity. Thus the Mitchell application was granted on a FCC form 316. Consequently, under the provisions of section 1.597 of our rules, the 3-year period for station KDOX commenced in July of 1964, and terminated in July of 1967-considerably prior to the filing of the instant application. We conclude therefore that section 1.597 of the Commission's rules is not involved in this application. 8. KMHT also charges John Mitchell with having assumed control of station KDOX without Commission consent. There is no evidence of this whatsoever. The mere fact that he held a 49 percent interest in the licensee and was the general manager certainly did not give him control. As stated, because of Kimbrough's and Morton's associated interests in other licensees, their 51 percent interest in station KDOX was considered as a single interest and vested de jure control in Kimbrough and Morton. Even considered singly, Mitchell with his 49 percent interest did not have legal control. 9. Naturally, the fact that Mitchell was also the general manager of the station gave him a certain day-to-day say so in the station. But that is not tantamount to de facto control when those in legal control are fully aware of and approve the day-to-day operation. That was the case here. Moreover, the Commission was aware of the fact that Mitchell, while holding a 49 percent interest, would be the general manager of the station at the time it granted the 1966 application. Therefore, the 1966 grant carried with it Commission sanction for the arrangement now complained of by the petitioner. That arrangement was also approved when the Commission granted the KDOX application for renewal of license on September 10, 1968, without complaint by the petitioner. Accordingly, we find no merit with this charge. 10. Mitchell is also charged with making a profit on his investment. We have said time and time again that profit standing alone is not ipso facto to be equated with trafficking in broadcast licenses. We reaffirm our position in that regard and find no trafficking. 11. The remaining questions raised by the petitioner affect the assignee. It is alleged that a grant of this application will create a concentration of control of mass media in the assignee (referred to as the Foster group), in the area under discussion. In order to fully understand the charge, it will be helpful to have the following information: Station interests of the Foster group, communities involved, etc. That follows. Tolbert Foster owns 100 percent of a corporation which has a CATV franchise. No construction has been undertaken on the system according to the pleadings. Tolbert Foster also owns 100 percent of a corporation which has a CATV franchise in San Augustine, Tex. No construction has been undertaken on this CATV system either according to the pleadings. San Augustine is 78 miles from Marshall and has no broadcast stations, but does have a weekly newspaper. 12. In sum, the Foster group owns stations in two east Texas citiesPalestine and Center-and seek to acquire a third in Marshall. The stations in Palestine and Center are low powered AM, one a daytimer and the other a class IV, and both Palestine and Center are small cities. Palestine, site of station KNET, has a daily newspaper not owned by the assignee and Center has a weekly not owned by the assignee. Tolbert Foster also own unbuilt CATV systems in Center and San Augustine. We also note that within the area formed by the cities, Marshall, Palestine, and San Augustine, there are 11 AM/FM stations and there are numerous reception services provided to the area. Of course, the Commission will not lightly brush aside charges of monopolization of media, but here the charges are speculative and without foundation. In Marshall, the assignee, competing as it will be, with another station and with a daily newspaper, will not have a corner on the market, and the combination of Marshall, Palestine, and Center is not formidable as against the many other reception and transmission services in the 1 It should be noted that the petitioner who raised the question has the following interests: KMHT, Marshall, Tex.: KLUE-AM and FM, Longview, Tex.; and a construction permit for a television station KHER in Longview. |