promote firms that are strong enough to develop new programs through practice and not through speculation about those programs. There has been considerable discussion about the terms of entry into the field of broadcasting for new ideas, new individuals, and new companies. There would be if this bill were passed not only the advantage of having strong companies, but there would be also the advantage of having remaining several important means of entry, of individuals and firms, into the field for the purpose of presenting new ideas on broadcasting. Let me just suggest a few of those means of entry that would be remaining and would be very strong and important. First of all, individuals could continue to encourage broadcasters who had licenses to do new kinds of programs, and very often suggestions from the public at large or from particular other broadcasters are taken up by licensees. Secondly, another way in which to promote one's new ideas in the field is by being employed by a broadcasting firm. That would remain and there are always firms that are looking for new and good ideas if they have any possibility of practical merit. So the presentation of ideas through new or changed employment would remain. Third, there is the matter of transfer of control of facilities. There would be no prohibition on transfer of control of facilities if the licensee and proposed next licensee could agree upon that for a price and if the Commission were agreeable to all of the other circumstances. There would be no restriction of entry for those who wished to purchase entry and wished to purchase it at a fair price. And fourth, the provision for new channels, as has been suggested by Senator Baker, or for vacant channels, would still remain. When there are to be comparative hearings, you could retain the advantage of being able to sort out of applicants to the benefit of education as has happened in one instance with which I have been involved myself. The Oak Knoll Broadcasting Corp. has served as the interim operator of KLRA in Pasadena while a number of applicants are being selected among. Oak Knoll is not an applicant for that frequency, which became vacated. All of the profits of Oak Knoll Broadcasting Corp., after the taxes have been paid on them in full, are to go to the support of the noncommercial experimental television in Los Angeles and to the development of advanced studies and research in universities through donations to those organizations. That is, to educational television and to universities. That could continue. Under 2004 that could continue to be a very great advantage. One postscript point very briefly. I believe that because the bill is simple, clean and direct, it accomplishes its purpose in a very positive and predictable manner and that the drafters of it deserve high commendation. Thank you, sir. Senator PASTORE. Thank you very much. E. Barry Smith, president, Indiana Broadcasters Association, Evansville, Ind. STATEMENT OF E. BERRY SMITH, PRESIDENT, INDIANA Mr. SMITH. My name is E. Barry Smith and I am vice president of Fuqua Communications and also vice president and general manager of television station WTVW in Evansville, Ind. I am also president of the Indiana Broadcasters Association. I appreciate your committee permitting me to make a statement in support of Senate bill 2004 introduced by Senator Pastore and cosponsored by the senior Senator from Indiana, Senator Hartke. My remarks are brief, and, I trust, nonrepetitive. I want to point to one factor I hope will be considered in this committee's deliberations. I believe that broadcasting would not have grown to the advanced position in technology and service it holds today if the present-day threats to a license existed in the past. Today's radio and more dramatically today's television are the result of huge investments on the part of a great many persons who made such investments realizing there was a long-term risk involved. Because enough people took that risk, there was a substantial base for technical persons to develop through research more and more sophisticated types of equipment that have permitted fantastic feats of coverage of events. Also because of this risk taken by broadcasters, a new medium for creative talents was created. I question if very many persons would have made such investments, knowing there would be a long period of loss, if there was the threat that in 3 years their licenses would be withdrawn. I don't believe many of these broadcasters looked for a license in perpetuity. I do believe it was reasonable for them to believe that when they applied for their license in good faith and then carried out commitments stated in their application that they could be reasonably assured of their license renewal. Obviously the FCC had accepted the applicant's commitments as serving the public interest when they granted the license. By the same reasoning the licensee could expect favorable consideration if he had performed as he promised when he applied for a renewal, assuming he had kept abreast of various changes and requirements of the Commission during that period and assuming his commitments for the future at renewal time were deemed in the public interest. In my State of Indiana I can cite two specific examples of stations that would not exist in their present form if this new threat of renewal hearings had existed in the past. A radio station in a small northern community was losing a great deal of money and, as a result, limited in service it could provide. A prospective buyer felt that with his management skill and the investment of money and time he could convert this station into a viable, meaningful service in the community. He purchased the station, invested money, waited out the losses he knew would continue and after a few years had developed a station that was profitable and thus stable and one that as a result of its financial soundness could perform as a solid citizen, so solid, as a matter of fact, that it is the only nonhuman winner on that town's Citizen of the Year Award. As the president of that station has said, and I paraphrase, if he had felt that after paying for a money-losing station, investing in equipment and personnel, suffering the losses during the turnaround period, that someone could then force him to a hearing by applying over his renewal when he had kept the commitments he had made to the FCC, he would have been a fool to have purchased the station. Certainly no source of financing for his planned efforts would have been available with such an unpredictable future. In another Indiana city a university had considered the feasibility of operating an educational television station as a training facility in the art and science of broadcasting. Lacking endowment funds to support such a venture the university felt it more realistic to attempt to establish a self-supporting television teaching instrument. They knew that such a commercial venture would require a large initial investment and a long period of losses but that eventually it could become self-sustaining and could repay the university investment. However, they did not believe this could be done in the initial 3-year license period. According to the operating head of that station, it was the desire of the university to train people in courses who could leave the university qualified for effective employment in broadcasting. Because they lacked endowment funds for an educational television operation and because they believed a commercial operation provided a better training vehicle, they applied for and were granted a commercial license to function in the public interest. As the operating head of the station has stated to me, the university could not have invested the $1,500,000 it did if there was the possibility that in 3 years the entire investment and its losses during those years were to go down the drain. As a matter of fact, it was more than 6 years before this station came out of the red. If the prevailing threats that exist today were operating then, neither of these stations would be functioning as they are today. The small town would not have its radio station as its citizen of the year. The university would not be training young men and women in studies in communications with training in actual commercial broadcasting. Neither the small operator nor the large university could stand the risk of such uncertainties. In the absence of a statute such as that proposed in the legislation you are considering, it is obvious that any existing licensee stands in jeopardy regardless of the level of service performed in the past. So long as another party puts proposals on paper that indicate the new party would outperform the existing licensee then the licensee must face that extensive and expensive renewal hearings. Since it is always easier to second-guess, the paper promissor stands an excellent chance of taking the license, but where does this lead 3 years later? Another paper promissor outpromises the then licensee and so it goes each 3 years. The bill you are considering is reasonable and one that assures the public interest will be served. It also assures the continuance of responsible persons maintaining and increasing the huge investments in research and development in broadcast technology. Your pending bill also assures that where shown by the FCC in its examination of a renewal application that there are rascals present, that those rascals will be weeded out. To me nothing could be more fair to the public or to the broadcaster. Thank you, Mr. Chairman. Senator PASTORE. Thank you very much, sir. We will recess until 10 o'clock tomorrow morning. (Thereupon, at 11:50 a.m., the hearing was recessed, to reconvene at 10 a.m. the following day.) AMENDING THE COMMUNICATIONS ACT OF 1934 TO ESTABLISH ORDERLY PROCEDURES FOR THE CONSIDERATION OF APPLICATIONS FOR RENEWAL OF BROADCAST LICENSES THURSDAY, AUGUST 7, 1969 U.S. SENATE, COMMITTEE ON COMMERCE, Washington, D.C. The subcommittee met at 10 a.m. in room 5110, New Senate Office Building, Hon. John O. Pastore (chairman of the subcommittee) presiding. Present: Senators Pastore, Hart, Griffin, and Baker. Senator PASTORE. The hour of 10 having been reached, we will proceed with the hearing on S. 2004. I have before me a letter from the president of the Community Television of Southern California KCET, Los Angeles, Calif., and ask it be inserted in the record, together with other letters that we have received on this matter. (The communications follow :) CHANNEL 28 KCET COMMUNITY TELEVISION, OF SOUTHERN CALIFORNIA, Hon. JOHN O. PASTORE, DEAR SENATOR PASTORE: Submitted herewith for consideration by the Subcommittee and inclusion in the record of the Subcommittee's hearings on S. 2004 is my Statement expressing the concern of Community Television of Southern California, the licensee of noncommercial educational television station KCET, Los Angeles, over the recently adopted license renewal practices of the Federal Communications Commission and urging the adoption of S. 2004. Community Television appreciates this opportunity to make its views known on this matter which concerns the future of noncommercial as well as commercial broadcasting and I only regret that I am not able to appear before this distinguished Subcommittee in person. Sincerely, JOHN W. LUHRING, President. STATEMENT OF JOHN W. LUHRING, PRESIDENT, COMMUNITY TELEVISION OF SOUTHERN CALIFORNIA My name is John W. Luhring. I am a volunteer in and President of Community Television of Southern California, a non-profit organization that is the licensee of noncommercial television station KCET, Channel 28, in Los Angeles. My principal occupation is in the banking and public utilities fields. I am happy to be able to submit this Statement to this Subcommittee for inclusion in the record on S. 2004, and appreciate the opportunity to do so. The purpose of my Statement is to point out to the members of the Committee that 33-229-69-pt. 1-8 |