years. Namely, that an existing licensee could show by means of its record that it had done a good job, and it could get credit for that. There were no strike applications as such after that. And I really shouldn't characterize that as a strike application; let's call that a competing application. There were no later proceedings of that nature until recent years. I think that the real problem and the real difficulty that we are faced with today arose in the WHDH proceeding, where the Commission suddenly said "no matter what you have done as a licensee, unless you can show that it has been outstanding, and we haven't seen anybody yet that has shown itself outstanding, we won't give you any credit for it." So the licensee who has put all of the years into developing, investing, working in the community, suddenly had an impossible burden to meet in terms of showing that his past service should be considered as a licensing factor. This I believe gave rise to actual filings on top of existing licensees, and I believe it has encouraged additional filings, which seem to be threatened at the present time, which are indeed threatened at the present time. Senator GRIFFIN. So it was a new standard or measurement that was announced by the Commission in the Boston case that primarily gave rise to this? Mr. BADER. I think that contributed significantly, sir. I believe there are other factors also. Senator PASTORE. But in the Boston case, the Commission still could have considered the performance of the licensee, and denied that license; is that correct? Mr. BADER. That is correct. Senator PASTORE. And after the denial of the license, then, of course, it could have gone up for grabs. Mr. BADER. And that is what has happened in a number of other proceedings, where the impact of the orderly procedure bill has been carried out. For example, KRLA in Pasadena, to which Mr. Fogarty referred, the Commission first determined the license should not be renewed and then it held a proceeding which is still going on, a proceeding as to who should succeed. But that was a far different procedural situation. But there the Commission did what your bill, Senator, would require us to do in the future; namely, first make a determination as to whether the existing licensee is or is not serving the public, and then go on to see who should succeed if he is not. Senator PASTORE. But under the ruling that was made in the Boston case, past performance, unless it was unusually good or bad, could not be taken into account, and everyone would start on the same level as though it was an original application for the license. Isn't that correct? Mr. BADER. Yes, sir. Senator GRIFFIN. Are you also placed in the difficult situation of having the Commission compare what a station has actually been able to do over a period of years with what some other group promises what they will do? Mr. BADER. That is correct, sir. Senator GRIFFIN. But without any real evidence of what they might be able to do, the Commission is comparing the existing license and the promises on an equal basis. Mr. BADER. That is correct. Senator GRIFFIN. I think this background is helpful, and I hope maybe other witnesses may expand on it a little bit. Thank you very much. Mr. FOGARTY. Thank you, Senator. Senator PASTORE. I would hope, too-this is just a shot in the dark, in view of the question that has been raised by Mr. Griffin-I would hope that, if there is any instance where someone told a licensee that, unless he did thus and so, under such and such conditions, they were going to file against him when renewal time came up-do I make myself clear on that? Mr. BADER. Yes, sir. Senator PASTORE. I would hope during the progress of these hearings if such instances have occurred that they will be spelled out in the record. Senator Hart? Senator HART. Why shouldn't a citizen go to a licensee and say, "Unless you don't upgrade your performance, I'm going to file against you"? Mr. FOGARTY. Of course he shouldn't for the reasons I have outlined in my statement, Senator. Public service and efficient business are so intertwined it is impossible to render adequate service unless you have a sound, viable, healthy business. I see no reason why a citizen shouldn't do that, but on the other hand, I see no reason why he should have equal status with a licensee Senator HART. I was responding to the question of the chairman, in instances where a threat, so to speak, was made to a licensee, be reported to us. I want to hear too, but I think we shouldn't make the citizen uncomfortable in feeling that if he went to a licensee and said, "Look, you have too much violence," or "You have too many commercials, and if you don't jack your performance up, I'm going to go to the FCC when your renewal time comes up.' I think that fellow should be encouraged. Mr. FOGARTY. I think so too, Senator, and as I said, we cheerfully assume the burden of meeting any allegations he might make. I have no objection to that at all. Senator HART. Now, to Mr. Griffin's point, when the renewal time comes up, your problem is that you've got a performance record and the other fellow is offering promises. And you don't want that to be conjoined. You want it to be separate. You know, that is exactly the position a U.S. Senator has every time he goes to bat. He has a record. He thinks it is pretty good. What if we passed a law that said our competitor can't come in until after it has been determined that our record is bad, because all he is going to do is make promises? We are trustees just like you are. You don't own the property of the channel. We don't own our seats. What is the difference in the treatment? Mr. FOGARTY. Well, there is a small difference inasmuch as you 6 years and we have only 3. have Senator HART. But we both go in knowing precisely that. you have a tremendous investment in your career, you are devoting years of your life, which is the most precious investment of all, but the fact still remains that broadcasting is a business requiring tremendous investments in order to be successful, and you are entitled somehow, someway, to have a prospect of profit so you can continue in that business. Senator HART. Do you think that's the distinction? Mr. FOGARTY. I really do, Senator. Senator HART. Well, nobody compels us to run for office, and nobody compels you to go into the television business. I do find some analogy, not complete, but I can visualize the same kind of argument being made. John Pastore has a great record, and let's put that to the people first. Then let's let the promisers come along. What if, in fact I agree with the chairman's statement that what our job here is to decide is what approach really does best serve the interests of the public. Let's assume, and this is not a valid assumption, in all cases, that a new applicant could in fact do a better job than the existing licensee, but the existing licensee is doing an adequate job. Wouldn't the adoption of this bill prevent the better performer from ever having a shot at it? Mr. FOGARTY. It would prevent the better promiser from having a shot at it. Senator HART. I'm talking about performance. Mr. FOGARTY. Yes. The great difference, of course, I think, Senator, is that we have to make forward commitments, as I pointed out in the statement. As a U.S. Senator, your great investment is 6 years of your life, and of course that is beyond recovery. But we have to manage a business where at the end of a period we make 2-, 3-, 4-, or 5-year commitments. Take an example, from your State, yours and Senator Griffin's-we assumed control of a station in Michigan on May 1 of this year. The license expires on October 1 of next year. We are in the process of doing many things to improve that station, starting with improved staff. But we really ought to have some kind of a feeling that the additional investments we make in that station, that we have some hope of recovering. In other words, I think we have to look at this as not only a public service, not only a career, but also as a business. Senator HART. Your complaint is, I take it, you agree with us that you never had more than 3 years when you went in. You went in on that basis, right? Mr. FOGARTY. That's right. Senator HART. Now you say the problem is developing that, instead of just testing at the end of 3 years whether you have been adequate or not, the Commission is indicating it wants to see if there is somebody who could be more adequate, better. And you don't like that test. Is that oversimplified unfairly? Mr. FOGARTY. We don't like the test of making us deliver and the other applicant merely promises. Senator HART. As a businessman, you know there are means of determining the reliability of promises, assuming a rational, prudent Commission. Why isn't it desirable that your performance-if I'm wrong on that, correct me. I don't understand that in the renewal by competition-you call it a strike hearing that your performance is not a factor; of course it is. Correct me if I'm wrong on that. Otherwise, all you are being asked to do is make promises too. You feel it is unfair that your performance record be judged, and the competence, the experience, the capital available of a new applicant be judged at the same time, and a decision be made as to whether—perhaps it will be a very exceptional case-there hasn't been assembled talent and imagination and enormous resources that could be even better than your performance? That any prudent man would judge it would be better. But you don't want that opportunity to be given. Is that right? Mr. FOGARTY. I would like to have Mr. Bader refer once more to the Boston case. Senator HART. Well, the Boston case wasn't a renewal case, it was an original application. Mr. BADER. It was a renewal case, sir. It started out in 1953, as a licensing proceeding. Ultimately the FCC granted a 4-months renewal. Senator HART. What kind of renewal is a 4-months renewal, if it is not just a temporary grant? Mr. BADER. It was a license renewal as such, sir. The Commission stated "we will accept new applications," and they proceeded to consider a round of new applicants who had never been in the first hearing. Senator HART. In my question did I state correctly what it is you object to? Mr. BADER. I do not think so, sir. I think what we are objecting to is not a fair consideration of our ability to serve the public interest against the ability of someone else, but an unfair basis of judgment, which the Commission has now imposed on this industry. And it has done so Senator HART. What is unfair, if the Commission is competent to evaluate promises? Mr. BADER. It won't evaluate the services of the past applicant. Senator HART. Will it ignore your performance? Mr. BADER. It ignored the performance of channel 5, Boston, saying that performance hadn't reached the standard of excellence which the Commission thought was good enough. Senator HART. It evaluated it. It made a judgment with respect to it. Mr. BADER. It wouldn't give any credit for it. It said it has been a good service, but it hasn't been superb. Senator HART. It evaluated it; that's my point. Mr. BADER. Yes; but it did not give credit. Senator HART. The station didn't like the grades it got. Isn't that a fair way of putting it? Mr. BADER. It wasn't a matter of getting grades, sir. It was a matter of getting comparison. It never got comparison on the basis of its performance. Senator HART. What did it get comparison on? What was the judgment as to quality based on? Mr. BADER. It was based on comparative criteria, such as newspaper ownership, integration of ownership with management, matters of that nature, which are not related to past performance, sir. I think the problem becomes intensified if one does think of it in terms of a sen atorial or congressional election. We are not asking there be no election, that there not be a replacement of incumbents. We are asking for orderly procedures-which we are not getting, which over the years we did get and which suddenly we are not getting. It's not that we want the Commission to be cut off from the voice of the people who say this station is not doing a good job. It's not that at all. What we want is an orderly way in which the service of the station will be appraised, and if it is found not to serve the public, then it will be laid open for grabs. Senator HART. But where in that description does my assumed case fall? You say you want the public to be able to go in and say, "You've done poorly." You want that to be decided before this enormously effective new combination ever has a shot at it? Mr. BADER. NO. The enormously effective Senator HART. At what point is the new opportunity to be given if you are not going to permit a comparison to be made? Mr. BADER. The newcomer can come in and show deficiencies in the operation of the existing station under the orderly procedures bill. If he then, as a private Senator HART. But he can't measure it against the excellence that he could contribute. Mr. BADER. He can measure it against an absence of service, sir, which the Commission has in many cases found. Senator HART. How many times has the Commission failed to renew a license? Mr. BADER. I would say probably a hundred times since the 1934 act. Senator HART. Out of how many renewals? Mr. BADER. I don't know, sir. Senator HART. 50,000? Mr. BADER. Probably. Senator PASTORE. Was that under the old policy or the new concept? Mr. BADER. Well, principally under the old rule, sir. Senator HART. Do I conclude from that that with the exception of about 100-I'm told it is less-our judgment is the performance has been of quality, the standards are adequate? (The subsequent material was submitted for the record :) Hon. JOHN O. PASTORE, HALEY, BADER & POTTS, Washington, D.C., September 10, 1969. Chairman, Subcommittee on Communications, DEAR SENATOR PASTORE: On August 5, 1969, during the testimony of Frank P. Fogarty, Vice President of Meredith Corporation, on S. 2004, on S. 2004, I was asked a question as to the number of broadcast stations which have lost their licenses as a result of action by the Federal Communications Commission for revocation or nonrenewal. At the time, I did not have the precise figures and I estimated the number at one hundred. I have since checked and found that the actual number is seventy-four. A list of the broadcast stations involved is attached hereto. I would appreciate your associating this material with the record in the hearings on S. 2004. Very truly yours, 33-229-69-pt. 1- +3 MICHAEL H. BADER. |