institutions. But an unregulated "monopoly" in television program production and procurement seems doubly objectionable and, indeed, potentially dangerous to the ideals and objectives of our free democratic society. It not only tends to stultify economics but also to govern and shape within narrow compass the crativity and flow of information and ideas which are transmitted to most of the American people each day of the year, and constitute a significant part of the "raw materials" from which public opinion is produced. As Walter Lippmann has recently said: 67

"A press monopoly is incompatible with a free press, and one can proceed with this principle if there is a monopoly of the means of communications-of radio, television, magazines, books, public meetings-it follows that this society is by definition and in fact deprived of freedom.

A free press is not a privilege but an organic necessity in a great society. * * * 68 Network television is, of course, but one of the mass media which compose our free press. However, it is a vital part of our total system of mass communications. Each day it reaches vast audiences and exerts an impact of impression which is, perhaps, unique in history. Network managers, whatever their intentions or motives, wield a social instrument of great power and importance as an informational agent and cultural stimulus in our society. Such power of persuasiveness imposes the imperatives of fidelity and integrity to public trusteeship and of informed concern for the public welfare. Such is particularly the case as their power is derived from the combined use of local "monopolies" created and licensed by the Government.

EXHIBIT B

30. Perhaps the most misleading comments submitted to the Commission are those of Springfield Television Broadcasting Corp., because they touch on a subject close to the Commission's heart, UHF television development. Springfield Televison complains that,

"The spread of CATV service in the WRLP coverage area has resulted in the steady loss of audience potential for WRLP, an attrition in the number of local merchants willing to advertise on the local station, and a loss of national advertising revenues. The end result of these circumstances prevents WRLP from achieving full economic stability and thereby places undue restraint upon the ability of WRLP to completely fulfill its role as a source of local program service. This situation is of conern to Springfield not only as the licensee of WRLP but because Springfield earnestly believes that the experience of WRLP is typical of any UJF [sic] station faced with CATV competition."

Of course, Springfield does not submit figures to prove its allegations. These are conclusions which are easy to state but financial figures are more convincing. Before determining whether the conclusions are correct, a true appraisal is needed of the circumstances under which WRLP is operating in order to determine whether it is doing as well as it could be expected to, whether it ever had a chance to succeed or whether it was just another case of bad judgment which was so true of many UHF operations in the past which went bankrupt because of the smallness of the market and the availability of the signals of other TV stations. NCTA's comments have proven that CATV systems have not eliminated TV stations (NCTA's comments, pp. 10-13). NCTA has proven that CATV systems have not hindred the development of UHF-TV stations, 15.2 percent of all existing UHF's (roughly one out of every six) were constructed in communities in which CATV service existed when the UHF went on the air. There are 92 commercial UHF stations now on the air. Twenty-two of these have CATV service in the same community. In 5 of these 22 instances, the UHF station went on the air before the CATV system came into existence, and in 14 instances the CATV service existed before the station went on the air. (NCTA's comments, pp. 35 and 36.) Those are facts, not assumptions. UHF stations do go on the air in communities that have CATV service. In fact, many UHF television broadcasters have recognized how much CATV operations have helped

On "The Profession of Journalism," Editor & Publisher, May 29, 1965, p. 64.

6 Mr. Lippmann goes on to point out the increased importance of the free and uninhibited flow of information and ideas in a big and complicated urban society:

"In such a great society the environment in which individuals act and react is not the visible world of their homes and their neighborhood and the communities. It is an invisible environment which has to be reported to them. For this reason a great society cannot be governed, its inhabitants cannot conduct the business of their lives, unless they have access to the services of information and of argument and of criticism which are provided by a free press.”

them and have put this in letter form and in statements to newspapers.

(See for example, NCTA's comments, exhibits Nos. 6 to 9, and the results of an onthe-spot investigation by the Columbia, Mo., Tribune, contained in an article therein of Monday, April 27, 1964, and attached to these reply comments as exhibit No. 7.)

31. While it is to be hoped that UHF television will develop and prosper, it is appropriate to ask what if it does not develop or if it succeeds in only a few localities? Will not CATV service be needed more than ever? The re are people whose vast business prospects are tied to their making the right judgment in predicting trends in the television industry. Many of these believe the UHF experiment will not succeed. (See, for example an article from the Wall Street Journal of May 1, 1964, in appendix hereto-separate volume-exhibit No. 6. NCTA takes issue with the statement therein that CATV is a threat to UHF development and has refuted this in its "Comments," pp. 10-13.) These observations are important in that the Commission should not outlaw or curtal CATV systems served by microwave upon a mere assumption that they may prevent the development of UHF stations. Proof of serious, adverse economie impact should be required with respect to UHF stations as well as VHF stations. Otherwise the Commission may well rue the day when it prevented the growth and the corollary technical improvements in CATV, if it is faced with another debacle in UHF development.

32. Because Springfield Television's "Comments" smack of the scare tactics used before the Senate Subcommittee on Communications in 1959 (see “NCTA Comments" p. 13) and before the Commission in connection with docket No. 12443 in 1959, it is important to analyze the source of these comments.

an

33. Springfield Television Broadcasting Corp. filed comments in this proceeding urging the Commission to take steps to cope with what it alleged to be “unrestricted and unregulated" activities of CATV systems. These comments are replete with inaccuracies and they are illustrative of the false charges sprinkled throughout the docket in this proceeding that CATV systems are causing the demise of "local" television service. It is respectfully intended that the following analysis of Springfield's comments will demonstrate that CATV systems are not responsible for the paucity in local programing in the area served by WRLP, Greenfield, Mass. For example, on page 2, Springfield, without foundation, claims that the existence of CATV's in WRLP's service area has resulted in “** attrition in the number of local merchants willing to advertise on (WRLP), and a loss of national advertising revenue." NCTA will show in paragraph 46, infra, that this statement is entirely at odds with the facts and that nonconfidential data submitted by Springfield to the Commission establishes that WRLP's local, regional and national revenue increased in 1962 as compared to 1961. Equally inaccurate is WRLP's gratuitous conclusion on page 2 that CATV's have prevented "*** WRLP from achieving full economic stability ***" and from "*** completely fulfill (ing) its role as a source of local program service." NCTA will demonstrate in paragraphs 42-43, infra, utilizing only Springfield's representations, that WRLP is potentially a financially sound satellite of its prosperous, thriving mother station, WWLP, Springfield, Mass.

34. Springfield's construction permit for a new television station at Greenfield, Mass. (BPCT-2115) was granted in July 1956. In its application Springfield stated in paragraph 12:

"This application is for a station to be operated as a satellite of WWLP in Springfield, Mass., until such time as economic conditions will allow a more localized operation.”

Program tests were authorized in June 1957. As of that date, CATV systems were in operation in the following communities within the area served by WRLP: Athol, Mass.; Keene, N.H.; Brattleboro, Vt.; Springfield, Vt.; Windsor, Vt.; Woodstock Vt.; Claremont, N.H., and Lebanon, Ñ.H.

In November 1956, Springfield amended its application to specify a new transmitter location at Winchester, N.H. The amendment stated that:

"(It) in no way changes the programing plans for the satellite operation

In September 1957, Springfield petitioned for a waiver of section 3.652 of the of the Commission's rules in order to permit WRLP to identify itself with the three cities of Greenfield, Mass.; Keene, N. H.; and Brattleboro, Vt. In support thereof, Springfield relied heavily upon the fact that, although it did not maintain a studio in any of these communities, its transmitter site, at which its studio was located, was but 141⁄2 miles from Greenfield, 9 miles from Brattleboro, and 16 miles from Keene. Thus, it urged "*** WRLP is in commuting distance

of all three cities." It is significant that 10 months previously and before Springfield had received program test authorization, when it specified a new transmitter site in Winchester, no mention was made that Winchester was so strategically located to each of these three communities. It is also significant that in its request for tri-city identification Springfield stated that inasmuch as operating from Winchester, it provided a minimum field intensity of 80 decibel units to the three cities, WRLP "*** should be considered a local station for each." (Emphasis supplied.) When Springfield was seeking extraordinary relief from the Commission it did not hesitate to make promises regarding the local programing it would provide to the three cities. Thus, it first discussed the local programing already carried on WRLP as follows:

"Local programing at WRLP commenced in September 1957. The first local program was a newscast, where news coverage of all three cities was provided by the WRLP newsmen and photographers.'

Excluding the above reference to a single newscast, there was no other reference to any "local" programing actually carried over WRLP. The remainder of the request for waiver consisted of promises by WRLP regarding the future:

"WRLP plans to invite citizens from each of these cities to participate in discussion and talk-type programs, and, in addition, representative groups and organizations from all three communities are encouraged to appear and participate. The residents and businessmen of each of these communities have been enthusiastic, and, the management of WRLP is confident that there is enough local talent in each city to allow a reasonable amount of time for local programing, which will include religious, educational, and civic matter. Accordingly, WRLP looks forward to satisfying its positive responsibilities in making articulate the voice of these three communities."

35. The Commission in January 1958, granted the request for waiver, undoubtedly relying upon WRLP's extensive representations regarding the local programing it promised to provide for the communities of Greenfield, Brattleboro, and Keene.

36. On July 20, 1960, however, William L. Putnam, president of Springfield, apparently very concerned that the public would apprise the Commission of Springfield's failure to carry out its representation, wrote Commissioner Ford.1 The letter seeks to explain away Springfield's admitted failure to carry out its representations regarding local programing. The letter is particularly significant because Springfield, just as it has done in the comments filed in this proceeding attemped to hold CATV's responsible for the station's failure to carry out its representations to the public. The letter is also similar to the comments filed by Springfield in this proceeding in that it is misleading. For example, Putnam stated:

"Anyhow with our national income down by about 20 percent of about a year ago and since our local income at WWLP, although up, has not been up enough, we have been unable to afford the continuing drain of providing this local service at WRLP."

There can be no dispute that this sentence is inaccurate. Springfield was a party respondent in Triangle Publication Inc. (docket 14577). In that proceeding it introduced into evidence financial data concerning its revenue from WWLP which was the subject of findings in paragraph 97 of the initial decision released December 26, 1963 (see 63D-146). That finding discloses the following information regarding WWLP's revenue for the year 1959 and 1960:

1 The letter begins as follows: "We have undertaken a change in our programing policy at WRLP that may be brought to your attention by some of the residents of the area served by that station. In order that the facts get on record before the opinions I would like to give you this information ahead of time, with the hope that you can also make your fellow Commissioners aware of this situation."

Utilizing WWLP's own figures it is clear that although WWLP's national and regional revenue for 1960 was below that of 1959 by $106,574, the station experienced an increase in local revenue totaling $122,045, leaving a favorable difference of $15,471. The importance of these figures is that they demonstrate that the gain in local income exceeded the loss in national and regional income. The letter indicated exactly the opposite conclusion. Furthermore, WWLP's total revenue for 1960 exceeded that of 1959 by approximately $4,000. What emerges from this comparison of revenue is that Springfield was prospering. Indeed, its total revenue exceeded $1 million for both 1959 and 1960.

37. Springfield thus had no legitimate reason for failing to carry out its representations to the Commission that it "*** look (ed) forward to satisfying its positive responsibilities in making articulate the voice of (Greenfield, Brattleboro, and Keene)." It seems clear that this misleading statement of Springfield's financial picture was designed to excuse its failures to meet its commitments to the viewing public. Furthermore, just as it has done in this rulemaking proceeding, Springfield, without foundation, attempted to shift the responsibility for its failures to CATV systems. In attempting to portray CATV systems as the cause for Springfield's failure to carry out its responsibilities to the public, it must be emphasized that Springfield failed to disclose that but one CATV system within WRLP's service area was established subsequent to the time that WRLP went on the air. Put otherwise, Springfield, the licensee of WWLP since 1953, was completely knowledgeable concerning the CATV systems in operation when it applied for Greenfield. It was aware of the existence of CATV's system when it made grandiose programing representations to the Commission in seeking a waiver of section 3.652 to permit tricity identification. It was only when Springfield became concerned that the public treated these representations more seriously than it did, that it became necessary to fall back on the convenient whipping boy, CATV.

38. Springfield succeeded in escaping from the responsibility of meeting its programing commitments to the residents of the Greenfield, Brattleboro, Keene area, for in an application filed on June 4, 1963 (BPCT-3199) Springfield stated: "WRLP operates as a satellite of WWLP in Springfield, Mass."

In this connection, Putnam testified on April 5, 1963, during the Triangle proceeding, supra, at transcript 4538 that W RLP originated only approximately 1 hour programing per day.

39. In paragraphs 46-47, infra, there is set forth the financial data submitted by Springfield in document 15326 which reveals increasing revenue for WRLP and no corresponding increase in program expense for 1962 as compared with 1961. Thus, Springfield has achieved what must appear to it to be the best of all possible worlds-absolution from its programing commitments together with authorization for a full-power TV station which is operated on a shoestring as a satellite of a station grossing more than $1 million annually in revenue. However, does not the public deserve more?

40. Springfield contends on page 4 of its comments that CATV service "* * * creates a splintering of the available viewing audience ***." It is significant that Springfield omits mentioning that in its advertising material, it presents a dramatically opposite picture, stressing the advantage to the advertiser that WRLP is carried on CATV's within its service area. As illustrated by the attached advertising brochure, Springfield goes to some length to point out to advertisers that it is carried by 11 CATV's within its service area. Thus, the

brochure states:

"(WRLP's) signal extended by community antenna systems * * * over a three-State region."

Springfield cannot have it both ways. It cannot, on the one hand, try and reap the benefits of its enlarged circulation brought about by CATV systems within its service area and on the other hand, claim CATV systems splinter its audience. In this connection, WRLP is now being carried on the following CATV systems operating within its service area: Keene, N.H.; Hinsdale, N.H.; North Walpole, N.H.; Charlestown, N.H.; Brattleboro, Vt.; Bellows Falls, Vt.; Windsor, Vt.; Woodstock, Vt.; Springfield, Vt., and on Athol, Mass., until 7:30 p.m.

41. Since station WRLP is basically nothing more than a satellite of WWLP and since both stations are licensed to the same corporate entity, any realistic appraisal of the situation must also include an analysis of the economic position of the parent station and of the licensee corporation. In its comments, Springfield Television carefully mentions only WRLP, thus omitting any reference to its extremely prosperous operation at WWLP. Such omissions are, of course,

consistent with the biased approach taken by Springfield, but we submit that the Commission is entitled to the entire picture. 42. It should first be pointed out that in revenues have exceeded the $1 million mark. figures, taken from data submitted by the applications,2 is as follows:

1957

1958.

1959.

1960.

1961

each year since 1957 the WWLP. The precise WWLP gross revenue licensee in other proceedings and

1962..

1, 388, 333

That this high revenue level has continued was announced by Springfield' president in a recent oral argument 3 before the Commission when he stated that WWLP's gross revenues for 1963 would again be in the neighborhood of $1,300,000 The magnitude of these revenue figures is emphasized by the fact that in the most recent Commission release of TV financial data only seven other UHF stations amassed revenues in excess of $1 million.^ Moreover, since WWLP has recently been granted a modification which will enlarge its service area the prospects are for even larger revenues in the future.

5

43. As might be expected with such high revenues, WWLP's profits during these years have also been impressive."

In addition to the foregoing, the following facts 7 further attest to the economic strength of the corporation: (1) In January 1964, Springfield purchased station WKEF-TV, Dayton, Ohio, for $153,000, a portion of the purchase price and cost of operation to be met from existing profits; (2) Springfield's pending application for a new station in Toledo contemplates construction costs of some $700,000 to be partly defrayed by $100,000 in profits from Springfield's existing stations; and (3) the corporate balance sheet as of March 31, 1963 (the most recent date available in the Commission's public files) shows assets in excess of $1 million, with dividends paid in 1962 totaling almost $30,000.

44. The foregoing clearly demonstrates the affluence of Springfield Television, and when viewed in the context of its burgeoning prosperity, Springfield's allegations of economic hardship ring quite hollow. The image which Springfield attempts to project shifts with the occasion. For example, when it is to Springfield's advantage to show itself financially qualified to expand its operations (viz, the Dayton purchase and the Toledo application) then it relies upon the huge profits derived from its existing operations. When the scene shifts, as in the subject proceedings, then Springfield does a complete about-face, conveniently neglects to mention its profit figures, and attempts to pass itself off as a hardship case. In a proceeding as significant as this, the Commission certainly deserves a more candid presentation than that submitted by this licensee.

45. Further illustrative of the misleading nature of Springfield's pleadings are its allegations concerning station WRLP. Thus, on page 2 of its comments, Springfield bemoans an alleged decline in revenues as constituting the reason for the paucity of local programing carried on the station. But here, as throughout its comments, Springfield offers no substantiating revenue figures. However, in connection with other proceedings and applications Springfield has been required to divulge such data, and the facts thus disclosed reveal a situation considerably different than that projected in Springfield's comments.

2 See paragraph 97 of the findings of fact in Triangle Publications, Inc. (WNHC-TV) (FCC 63D-146) and exhibit C in Springfield's application for a new UHF station in Toledo, Ohio; docket No. 15326. See page 263 of the transcript of oral argument on Oct. 4, 1963, in docket No. 14232.

4 Final TV Broadcast Financial Data-1962 (public notice of Sept. 19, 1963, mimeo No. 40706). See BMCT-5805 granted Sept. 25, 1963, 1 ÄR 2d 309.

See footnote 1, paragraph 42, supra.

See WKEF-TV BAPCT-335; part III and exhibit 1-A of the Springfield application in docket 15326.