not intend "to permit Channel 16 to unduly delay activation of its station." 5. Thereafter, Vision Cable petitioned for judicial review of the Commission's order (Vision Cable Company of Rhode Island, Inc. v. Federal Communications Commission, USCA, 1st Circuit, Case No. 7078). Channel 16 intervened in the proceeding, but on May 24, 1968, it moved the court for leave to withdraw as an intervenor. In connection with this motion, Channel 16 informed the court that it intended to "file promptly with the Commission an application for extension of the current WNET construction permit, pending a determination of the Commission's position on Rhode Island CATV activity of the kind proposed by Vision Cable and an opportunity for Channel 16 to formulate its plans in the light of that position." 6. By a memorandum opinion and order adopted September 5, 1968 (14 F.Č.C. 2d 654), Vision Cable's proposal was designated for hearing to determine whether the CATV operations "would have a significantly dampening effect" on future interest in the UHF facility.2 Therein the Commission noted that Channel 16 would not meet its alleged commitment but stated that the question of impact was nevertheless a matter of concern because of the public interest in preserving realistic potential for new UHF independent stations. 3 7. In support of its application for extension, Channel 16 argues that construction of the station should not be required until the Commission resolves in an evidentiary hearing the issues designated in the Vision Cable CATV proceeding. Channel 16 points out that station WNET once suffered heavy losses because of increased VHF competition in the Providence market and was required in view thereof to discontinue service. It contends that it would therefore be unfair, and not in the public interest, to require the expenditure of the large amount of money needed to place WNET on the air with the maximum facilities proposed, when there remains the possibility that after construction the Commission may authorize CATV systems in Providence and other parts of the Channel 16 service area carrying local and distant stations. Channel 16 argues that in these circumstances it cannot be said that reactivation is within its control. As additional reasons for a grant of the application for extension, Channel 16 points. out that for the more than 13 years since it went off the air it has kept the idle studio and transmitter building and tower available for reactivation bearing the expense of maintenance; and that no one either has applied for a vacant UHF channel assigned to Providence, or has indicated any interest in applying for Channel 16. As for the prior statements of the Commission concerning Channel 16's commitment to reactivate the station, the permittee insists that no commitment was made which was not qualified by the circumstances as to conditions respecting CATV in Providence: that rather it has indicated that its willingness to reactivate is dependent upon what the economic situation would be in the light of the developments in the CATV field. Upon motion by Vision Cable, the judicial review proceeding was dismissed on Sept. 23, 1968. As a result of the procedure specified in the "Notice of Proposed Rule Making and Notice of Inquiry" in docket No. 18397. 15 F.C.C. 2d 417, released Dec. 13, 1968. all top 100 market CATV hearing proceedings, including the Providence proceeding, have been halted. 8. For the purposes of this proceeding we shall assume that Channel 16 has not, in securing the prior extension of its permit or the grant of its modification application, made an unqualified representation that it would construct. Nevertheless, the fact remains that the reasons advanced in support of its current application do not justify a further extension. 9. The policy of the Commission is to foster the growth and development of UHF service in the major markets. To this end we have undertaken to explore the effect of unlimited expansion of CATV systems on proposed or potential service by independent UHF stations in the major markets and, where necessary and appropriate in the public interest, to impose such conditions upon CATV operations as would tend to promote the aforementioned policy. See "Second Report and Order" in docket No. 15971, 2 F.C.C. 2d 725, 776 (1966); Midwest Television, Inc., et al., 13 F.C.C. 2d 478, 487-494, 501-502 (1968); "Notice of Proposed Rule Making and Notice of Inquiry" in docket No. 18397, supra. 10. We deem it to be inconsistent with the policy and the goal of the Commission to encourage the institution of additional UHF television service, particularly in the major markets, to allow a construction permit to remain outstanding when the applicant has no unqualified intention to build in the near future. Rather the channel should be open and available to others. Channel 16 does not allege that it has been or will be prevented from undertaking construction because of any inability to obtain equipment or because of any other circumstances beyond its control. Rather, the permittee has indicated that it is unwilling to assume the financial risk of construction and operation. of the UHF station or to make any definite commitment with respect thereto, until after the conclusion of the proceedings which relate to Vision Cable's proposed CATV operations. Channel 16, of course, is not required to build and its determination not to risk any further financial investment pending the outcome of the CATV proceeding is a choice which, in the exercise of its business judgment, the applicant is certainly entitled to make. However, the Commission has consistently taken the position that "a permittee or licensee who voluntarily postpones construction or ceases operation because of economic factors exercises his independent business judgment, and such postponement or cessation is clearly due to causes under his control." Joe L. Smith, Jr., Inc., F.C.C. 65-528, 5 R.R. 2d 582, 589-590 (1965). See also, The Thames Broadcasting Corp., et al., 29 F.C.C. 1110, 1113 (1960). Since Channel 16's determination to postpone indefinitely the reactivation of station WNET did not result from circumstances beyond its control and no other adequate basis for extending its permit has been advanced, the application for extension must be denied. 11. Channel 16 further contends that it is entitled to an evidentiary hearing on its application. There are no questions of fact which require hearing for resolution and the contention must be rejected 4 The only factual question raised herein is whether or not Channel 16 made an unqualified commitment to construct within 6 months after the Commission acted on its modification application. As we have pointed out, however, the resolution of that question is irrelevant to a determination in this proceeding. Consequently, an evidentiary hearing would serve no useful purpose. 5 as without merit. Joe L. Smith, Jr., Inc., et al., 1 F.C.C. 2d 666, 6 R.R. 2d 29, adopted September 8, 1965. Neither do we find any merit to Channel 16's contention that the CATV and UHF applications are, in effect, mutually exclusive by reason of the economic situation and that, consequently, a Carroll type issue is presented which requires an evidentiary hearing for resolution. This case is not concerned with mutually exclusive applications for a broadcast authorization but with two completely different communications systems. We have recognized that CATV operation can affect the development of local UHF broadcast stations and have set forth proposals to eliminate the unfair competitive aspects in this situation. See part IV, "Notice of Proposed Rule Making" in docket No. 18397, and here particularly par. 49. At the same time we have sought to promote the development of CATV in these major markets in a manner which may contribute new diversity. See par. 6, and part III of the notice. We have set forth as our goal the orderly and healthy growth of both services and believe that our proposals are directed to achieve that goal. See "Letter to Senator McClellan”, February 17, 1969, pp. 3-4. It follows that there is simply no appropriate basis for an evidentiary hearing on this aspect of the case: indeed, there would be no way to specify at this time precisely what would be the nature of the CATV operation in this communityclearly a critical beginning point for any meaningful hearing. In short, the issue will be settled in the overall rulemaking and, as we have stated, may of course also be affected by pertinent congressional developments such as in the copyright-communications area. The critical issue thus is what policy UHF permittees may pursue as to construction of facilities during this period of formulation of definitive CATV policies in the major markets. We strongly assert that they cannot delay construction and operation until conclusion of the pertinent parts of the rulemaking proceeding in docket No. 18397. Such permittees may participate in that proceeding and take all appropriate steps to assert and promote their positions. But at the same time the public interest in the development of UHF demands that they go forward with construction and operation of their stations. If they do not choose to do so-for reasons of fear of CATV policies which might eventuate in the future-then that is their business judgment, and they must vacate the channels, so they are available for applications of others willing to meet the Commission's policy, set forth in its rules, that permittees must expeditiously proceed, unless prevented by causes beyond their control. 12. Accordingly, It is ordered, That the application for additional time within which to complete construction and for an extension of construction permit filed June 12, 1968 by Channel 16 of Rhode Island, Inc. Is denied. FEDERAL COMMUNICATIONS COMMISSION, Carroll Broadcasting Co. v. Federal Communications Commission, 258 F. 2d 440 (C.A.D.C.), 17 R.R. 2066. F.C.C. 69-144. STATEMENT OF COMMISSIONER KENNETH A. Cox I agree with most of the abstract legal principles set forth in the majority's opinion, but not with their applicability to this case. In our order designating this matter for hearing (Channel 16 of Rhode Island, Inc. (WNET) F.C.C. 69-30, 15 F.C.Č. 2d 893, released Jan. 17, 1969), we three times referred to what we understood to have been an express or unconditional commitment to put WNET back on the air promptly given during oral argument in 1965 and reaffirmed in January 1968, in connection with our consideration of Vision Cable's proposal to construct a number of CATV systems in Providence and the surrounding area. I then believed that such a commitment had been made and reaffirmed, and therefore voted for the order. During the oral argument on February 24, 1969, counsel for Channel 16 quoted and paraphrased passages from the 1965 oral argument and from other documents which seemed clearly to show that no unconditional commitment was ever made. I asked him whether, when the Vision Cable matter was first before the Commission, an inquiry wasn't addressed to him or his client as to whether, if the Commission deferred action on the CATV matter, they would undertake to put the station back on the air. I made this inquiry because it was my clear recollection that we had asked our staff to find out whether Channel 16 would put the station on the air promptly if we deferred action on Vision Cable's proposal-and that we were advised that the response was in the affirmative, and thereafter we ordered the CATV proposal held in abeyance. During the oral argument, Commissioner Robert E. Lee said he remembered very well that such an oral commitment had been relayed to the Commission by a staff member. When Channel 16 did not construct the station by the time specified in our order with respect to Vision Cable, we nonetheless set the latter's proposal for hearing. I recall that at that time, some strong expressions were made to the effect that Channel 16 had breached its promise to build and that its construction permit should be canceled as quickly as possible. Now the majority refer, all of a sudden, to "alleged" commitments, and then say that they are assuming that no unconditional commitment was made. It seems to me that this is simply an effort to write out of the case what was, in truth, a critical issue of fact and thereby to obviate the necessity of a hearing to resolve the matter. I am not sure, however, that this has really eliminated our earlier belief that commitments had been made and broken as an operative factor in this case. The majority address themselves only to the question of whether or not Channel 16 has established that its failure to complete construction was due to causes not under its control. However, the issue designated herein also referred to the possibility that it might show "other matters sufficient to warrant further extension." I think that the continued uncertainty as to the CATV situation in the Providence area. constitutes such "other matter," if, indeed, it is not a cause beyond the permittee's control, since it depends on determinations not yet made by this Commission. I think this is a far cry from the typical case where a permittee is simply stalling for time to permit greater UHF set saturation, market growth, etc. No one else has ever expressed interest in this channel or the other UHF channel allocated to Providence. Channel 16's principal shareholder has purchased an additional 20 acres adjoining the station's present site in order to construct a 1,000 foot tower and has personally guaranteed payment on the permittee's order of $762,800 worth of equipment, making a down payment of $15,256. I would grant the extension application for a period ending 6 months after we adopt the amendments to section 74.1107 proposed in our notice of December 13, 1968, in docket No. 18397, or, if we do not adopt those proposals, 6 months after we conclude the now suspended hearing on Vision Cable's proposal. 17 F.C.C. 2d |