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ORDER

third VHF-TV is operated by a subsidiary of Twentieth

Century Fox Film Corporation. Metromedia would be an Adopted: June 14, 1972; Released: June 21, 1972.

independent operator and has no other broadcast stations By the Commission: Commissioner Bartley dissenting; serving the Minneapolis-St. Paul market. Metromedia Commissioner Johnson dissenting and issuing a statement; also supplies data to indicate that a grant of the applicaCommissioner H. Rex Lee absent; Commissioner Wiley tion would not result in any undue concentration of connot participating.

trol of mass media from a national standpoint. This data 1. The Commission has before it the above-captioned served by the other Metromedia stations, indicating that

sets out the competitive broadcast media in markets application for transfer of control of WTCN Television, competition is often from other group owners and licensees Inc. licensee of Station WTCN-TV (Channel 11), Minne- with print media interests in the particular markets they apolis, Minnesota from Cris-Craft Industries, Inc. to Metromedia, Inc.

serve. Since Metromedia only operates in major metro2. Metromedia is presently the licensee of the following politan areas, it is in competition with a plethora of other VHF television stations:

INTENTION TO OFFER IMPROVED SERVICES
Call letters, Location, and ARB Ranking

5. Metromedia's "compelling public interest showing" NEW-TV, Channel 5, New York, N.Y. KTTV-TÝ, Channel 11, Los Angeles, Calif.

is based primarily on its intention to offer an improved WTTG-TV, Channel 5, Washington, D.C.

program service to the Minneapolis area. The most KMBC-TV, Channel 9, Kansas City, Mo.

22 significant new program to be instituted will be a daily

local program similar to WTTG's (Washington, D.C. 3. On February 9, 1968, the Commission released its Channel 5) “Panorama." This is an hour and a half live report and order "In the Matter of Amendment of Sec

program devoted to news, interviews and discussions tion 73.636(a) of the Commission's Rules Relating to relating to matters of local and regional concern. Also to Multiple Ownership of Television Broadcasting Stations”, be established is a "Consumer Help Center". The center FCC 68-135, 12 RR 2d 1501, in which it stated in part:

will most likely be staffed by students of the local law In the light of the special problem concerning the top school who will take calls from members of the public who 50 markets

set forth in the notice of proposed rulemaking are having problems with government red tape or in the "we will expect a compelling public interest showing by private sector. The center serves to educate the public in those seeking to acquire more than three stations (or

consumer matters. Other new programs which cater to the more than two VHF stations) in those markets. The com

public interest are: pelling showing should be directed to the critical statutory

1. “Achievements”—a series of spot announcements requirement of demonstrating with full specifics, how the which recite the contributions of both Blacks and Indians public interest would be served by a grant of the applica- to American culture. tion—that is, the benefits in detail that are relied upon to 2. "Focus"-members of various community organizaovercome the detriment with respect to the policy of

tions are invited to appear and make an informative statediversifying the sources of mass media communications ment about the function of their organization. to the public.

3. "Operation Grandparents"-During movie programs Since, as shown, Metromedia already has four VHF television stations in the top 50 markets, and Minneapolis,

teen-agers are asked to give whatever number of hours to which WTCN-TV is licensed, is the 16th ARB ranked they can each week to help a senior citizen in their local market, the above statement is applicable to the subject tween the teen-ager and the senior citizen.

community. The station coordinates the contacts beapplication. Applicant's showing in this case indicates that the criterion of overriding public interest has been satisfied. 4. “Operation Adoption"-Once a week for fifteen

minutes social workers will be interviewed on the “Panorama" program about children they are holding for

adoption in an effort to find homes for them. 4. At the outset, Metromedia makes it clear that a grant of the application will not result in any undue con

IMPROVED NLWS REPORTING centration of control of mass media in the Minneapolis

Metromedia also plans to improve news reporting to area. The application contains a breakdown of all the print and broadcast media located within or penetrating the area by increasing the

staff and purchasing more news the WTCN-TV, Grade B contour. This breakdown shows related equipment and services. Further, Metromedia that there are 6 television stations, 28 radio stations and

notes that WTCN will have available the services of the 24 CATV systems located within the Grade B coverage specialists they have in various areas of news analysis and area. As for print media, there are sixteen daily news

direct information from the other stations they operate. papers, six Sunday papers, one hundred and sixty-eight Metromedia points out that it is a successful operator of weeklies and fourteen shoppers. More specifically, the independent television stations in large market and offers three other commercial VHF-TV stations licensed to and its viewers a real choice in programming. operating in Minneapolis-St. Paul are affiliated with the 6. In 1968, the Commission waived its "Top-50” policy national networks. Of these three, two other local media and permitted Metromedia to acquire a fifth television interests, Channel 4 (WCCO-TV), operated by Midwest station in the top fifty markets --a losing UHF-TV Radio-Television, Inc., also operates WCCO-AM&FM (KSAN-TV) in San Francisco. Metromedia, Inc. 12 and has ownership interests in local daily newspapers. RR2d 561 (1968). That decision was based on the folChannel 5 (KSTP-TV) operated by Hubbard Broadcasting, lowing considerations: Inc. also operates KSTP-AM&FM. These two licensees 1. Station was a losing UHF operation and assignor are also owners of other stations around the country. The lacked funds to make needed improvements;

NO UNDUE CONCENTRATION OF CONTROL

2. Efforts were made to sell to a buyer with interests the hearing requirements of the Commission's Three consistent with the top fifty policy;

Year Rule will be waived. 3. Because of the nature of the competition in the San 10. Accordingly, based upon our determination that Francisco Television market (Multiple owners affiliated the transferee is fully qualified and that the public interest, with the national networks), and the independent stature convenience and necessity would be served thereby, IT IS of the Metromedia, a grant would be consistent with ORDERED, that the above captioned application IS Commission policy to promote diversification of broad- GRANTED. cast media; and 4. Proposed programming and technical improvements

FEDERAL COMMUNICATIONS COMMISSION, would render a better service to the public.

BEN F. WAPLE, Secretary. This station was purchased for $1,000,000; however, Metromedia could not make it a financial success and Dissenting Opinion of Commissioner Nicholas Johnson donated it to the Bay Area Educational Television Association in September, 1970.

METROMEDIA--WTCN-TV

(In re Application of Metromedia, Inc.) WTCN-TV PROFITABLE 7. Here WTCN-TV is a profitable VHF rather than a

Today the Commission rushes through the approval of a losing UHF station. However, in its 1968 grant of the significant station acquisition by one of the largest KSAN-TV, San Francisco assignment, the Commission

television group owners in the nation, in order to satisfy did allow Metromedia to become a holder of five top-fifty complaints by private parties that feel the Commission

stations. Admittedly, the station it now seeks to acquire

has waited too long to act on the application. In so doing, is of a different nature than the one it recently gave up.

the majority completes the emasculation of the so-called Nevertheless, the market it is here seeking to enter is

“top-50 policy," and confesses its inability to accumulate considerably smaller than San Francisco- Minneapolis

the relevant data and enforce its own ownership rules for St. Paul is ranked 16th ARB with an SMSA population of

financial institutions. 1,813,647, whereas San Francisco is the 5th ranked ARB The evidence of the rush can be seen in the fact that the market with an SMSA population of 3,109,519). Thus, the staff has had to hurry its presentation to the Commission change in Metromedia's past status from a holder of four and also that important information on the holdings by a VHF's and a UHF in the "Top-Fifty markets” to a holder

certain institution of Metromedia's stock was filed only of five VHF's in such markets is somewhat offset by the on Monday, and corrected on Tuesday. fact that Minneapolis-St. Paul is a much smaller market. Metromedia, Inc., the owner of four VHF television Accordingly, this grant will not substantially increase stations in the top 25 markets and a host of other media Metromedia's potential share of the national television properties here acquires its fifth VHF television station, audience beyond what it was with KSAN-TV as its fifth located in the 16th market. It is also the applicant to Top-Fifty station. On the question of the impact of this acquire a UHF in the 15th largest market. Thus under acquisition on the Minneapolis-St. Paul market, we are of Commission policy now nominally in force, Metromedia the view that Metromedia's stature as a highly successful must make a compelling affirmative showing as to why operator of quality independent television stations in this additional aggregation of media power will be in the competition with network affiliates, will serve to promote public interest. According to 1969-70 data, Metromedia diversification of media in Minneapolis-St. Paul and will, with this acquisition and the other application pendrender, as discussed above, an improved programming ing, increase its net weekly circulation by almost 10%, service to the public.

and increase the potential homes it can reach by 12%. It 8. In view of the foregoing we conclude that Metro- will be able to reach more than 27% of the television media has made a satisfactory compelling affirmative homes in the nation. showing that the public interest would be served by its acquisition of WTCN-TV. APPLICATION GOVERNED BY THREE-YEAR RULE

Although the majority has always been able in the

past to find the "compelling showing” that the public 9. In addition to the above matters, the application is interest would be served in a “top-50" market situation, governed by the Commission's Three Year Rule (Section never have the grounds for accepting such a showing been 1.597 of the Rules). On February 12, 1969, WTCN-TV so weak. Normally there have been situations where there received a construction permit for å major change in were UHF stations losing money and efforts had been technical facilities. This construction permit authorized made to find other buyers unsuccessfully, or there were principally a change in antenna location and antenna significant benefits of local or regional deconcentration of height. Since the instant application was filed on Septem- a present ownership structure. In addition, there were ber 28, 1971, less than three years after issuance of the often important commitments to minority groups in terms construction permit, the three year rule applies. Applicant of expanded programming, etc. And in the most recent states that program test authority for the permit was case, the Time-Life--McGraw-Hill applications, commuexpected to be granted prior to the filing of the present nity groups by agreement were able to enforce a more transfer application. However, on September 28, 1971, vigorous view of the “top-50” policy than the majority the new tower for the antenna collapsed during the final viewed necessary. Here there are no community groups stages of construction. This event has made it impossible spurring the Commission and the parties, and there is no for program test authority to be issued in time to remove

enforcement. the permit

from the technical requirements of the three- The "compelling affirmative showing" made by Metroyear rule. There is no evidence of trafficking in broadcast media is mainly a proposal to use programming in Minnelicenses or construction permits and, in view of the above, apolis which it has found successful in other communities.

WEAK GROUNDS

383

There is no benefit of deconcentration-one multiple owner Commission approval of the application in question. This sells to another, and the first promises to use the proceeds inquiry is not always made. to get another, bigger station. This is a very profitable The problem is illustrated by the holdings of the two station-not a UHF on the brink of bankruptcy. And part institutions ordered to divest in this case. Keystone Funds of the “compelling affirmative showing" is a promise by has 5.45% of Metromedia, 3.6% of ABC, 6.38% of Downe Metromedia to program less hours, less other nonenter- Communications and 8.7% of LIN Broadcasting. College tainment programming, and less news than the present Retirement Equities Fund, technically an individual owner licensee actually presented in its last license renewal subject to the one percent limitation but now treated as a composite week-Metromedia does propose 15 minutes mutual fund by the Commission, has 4.65% of Metromore news per week than the present licensee proposed media, 3.5% of ABC, 3.28% of Cox Broadcasting, 3.2% at last renewal. This is the sum of the majority's compel- of Fuqua Industries, 2.04% of McGraw-Hill, 3.09% of ling showing.

Rollins and 1.03% of Travelers Insurance. For both these

holders, recent Commission action on other transfer appliTWO HOLDERS VIOLATING OWNERSILIP RULES

cations for other companies (Downe Communications and

McGraw-Hill) failed to reveal the rule violations. And A second major problem with the application is that at least two of the major holders of Metromedia stock are in the Commission gave for divestiture in the rulemaking

these rule violations take place two years after the time patent violation of the Commission's multiple ownership that allowed mutual funds to hold as much as 3% of a rules, as the majority recognizes by sending letters to the broadcast licensee's stock. Somewhere in the foggy past owners ordering them to divest. The problem is that the there was an effort underway to revise the Commission's

of reasons are not providing the relevant information, on institutional ownership reporting forin. Perhaps that effort needs to be

revived. holdings of broadcast stock. The Commission is often

I would set this application for hearing to determine reduced to asking transferce applicants to ascertain from whether it complies with the Commission's "top-50" the institutional holders of their stock whether the institu- policy, and whether the public interest generally would be tion is in violation of Commission rules, as a condition to served by granting it.

Appendix F

INTERLOCKS

R. H. MACY AND COMPANY

THE LIBRARY OF CONGRESS,

is also a director both of Chase Manhattan Bank and of CONGRESSIONAL RESEARCH SERVICE, Columbia Broadcasting System.

Washington, D.C., September 10, 1973.
To: Subcommittee on Budgeting, Management and

GENERAL ELECTRIC COMPANY
Expenditure, Senate Committee on Government
Operations. Attention: Vic Reinemer, Staff Director.

Chase Manhattan held 3.6 percent of General Electric

common stock in two nominee accounts. Ralph Lazarus, From: Julius Allen, Economics Division.

chairman of Federated Department Stores, is a director Subject: Chase Manhattan directors of companies in

both of Chase Manhattan Bank and of General Electric which its trust department has stockholdings, as

Company. reported to Senator Metcalf or to the Federal Com

munications Commission. The following is a list of those companies in which Chase Manhattan held 3.4 percent of the common Chase Manhattan Bank's trust department, in one or stock of R. H. Macy and Company, some as trustee for more nominee accounts, holds stock and in which there the Retirement System for Employees of R. H. Macy and is a joint directorship. Stock data are those based on Company. Robert D. Lilley, executive vice president and responses to Senator Metcalf's letter of May 1972 and on director of the American Telephone and Telegraph Cominformation reported to you by the Federal Communi- pany, is a director both of Chase Manhattan Bank and cations Commission. Information on directors was obtain- of R. H. Macy and Company. J. Richardson Dilworth, ed from Poor's Register of Corporations, Directors, and investment banker with Rockefeller Family and AssoExecutives (1973 edition) and from the Directory of ciates, is also a director both of Chase Manhattan Bank Directors in the City of New York (1973 edition).

and of R. H. Macy and Company.

AMERICAN TELEPHONE AND TELEGRAPH COMPANY

THE LIBRARY OF CONGRESS, Chase Manhattan Bank held 1.1 percent of AT&T

CONGRESSIONAL RESEARCH SERVICE, common stock in three nominee accounts. Robert D.

Washington, D.C., September 10, 1973. Lilley is Executive Vice President and Director of AT&T and a director of Chase Manhattan Bank.

To: Subcommittee on Budgeting, Management and Ex

penditure, Senate Committee on Government Opera

tions. Attention: Vic Reinemer. ATLANTIC RICHFIELD COMPANY

From: Julius Allen, Economics Division. Chase Manhattan held 4.5 percent of Atlantic Richfield stock in four nominee accounts. Robert 0. Anderson is Subject: Morgan Guaranty Trust Company directors of Chairman and Chief Executive Officer of Atlantic Rich

companies in which it has stockholdings, as reported field and a director of Chase Manhattan Bank.

to Senator Metcalf or in July 1973 issue of Fortune.

The following is a list of those companies in which CHRYSLER CORPORATION

Morgan Guaranty Trust Company has stock holdings as

reported to Senator Metcalf in response to his inquiry of Chase Manhattan held 4.0 percent of Chrysler common May 1972 or as reported in the July 1973 issue of Fortune stock in three nominee accounts. William R. Hewlett, on p. 86. Respective sources as indicated. Information on president and chief executive officer of Hewlett-Packard directors were obtained from Poor's Register of CorporaCompany is a director both of Chase Manhattan Bank tions, Directors, and Executives (1973 edition), the Diand of Chrysler Corporation. J. Richardson Dilworth, rectory of Directors in the City of New York (1973 investment banker with Rockefeller Family and Asso- edition), and Who's Who in Finance and Industry ciates, is a director both of Chase Manhattan Bank and (1972-1973 edition). of Chrysler Corporation. COLUMBIA BROADCASTING SYSTEM

Morgan Guaranty held 4.3 percent of American AirChase Manhattan held 14.1 percent of Columbia Broad- lines stock in four nominee accounts. (Response to casting System common stock. Robert O. Anderson, Metcalf). Carter L. Burgess is a director both of Morgun chairman and chief executive officer of Atlantic Richfield, Guaranty Trust Company and of American Airlines.

AMERICAN AIRLINES

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