10 FCC Red No. 21 Federal Communications Commission Record FCC 95-360 involving assignment applications and pertaining to Fox©s Before the attributable status in its joint venture with Savoy Pictures Federal Communications Commission Entertainment, Inc.,2 and the other involving the renewal Washington, D.C. 20554 application of Fox©s WNYW(TV), New York, New York, and pertaining to Fox©s level of alien ownership. Having reviewed NBC©s dual allegations, we find they are without In re Application of merit. First, as to whether Fox holds an attributable inter est in its venture with Savoy, the Commission determined PARAMOUNT STATIONS GROUP that until it rules in its ongoing rule making proceeding concerning attribution rules in MM Docket No. 94-150, 10 OF PHILADELPHIA INC. FCC Red 3606 (1995), Fox©s interest in the venture is not (Assignor) attributable. BBC License Subsidiary L.P., FCC 95-179 (re leased April 27, 1995); BBC License Subsidiary L.P., FCC and FCC File No. BALCT-940928KF 95-364 (released August 18, 1995). Based on that holding, grant of this application, therefore, will not place Fox in FOX TELEVISION violation of the Commission©s national ownership rule, STATIONS INC. Section 73.3555(e) of the Rules, which limits a party to ownership and/or control of twelve television stations.3 Sec (Assignee) ond, in the recently concluded inquiry into Fox©s alien ownership, the Commission held that although Fox©s level For Assignment of of alien ownership exceeds the 25-percent statutory bench License of WTXF(TV), mark of Section 310(b), the unique equities of the case Philadelphia, Pennsylvania supported a determination that its ownership was in the public interest. See Fox Television Stations, Inc., FCC 95-188 (released May 4, 1995); Fox Television Stations, Inc., MEMORANDUM OPINION AND ORDER FCC 95-313 (released July 28, 1995). Accordingly, NBC©s concern that our action in this proceeding would "pre Adopted: August 14, 1995; Released: August 24,1995 judge and limit" our action in the alien ownership inquiry is moot. In sum, we find that NBC raises no substantial By the Commission: and material questions of fact so as to preclude grant of the application before us. 1. The Commission has before it an application seeking consent to the assignment of television station WTXF(TV), Task Force©s Petition to Deny Channel 29 (Fox), Philadelphia, Pennsylvania, from Para 3. The Task Force requests that the Commission: (1) mount Stations Group of Philadelphia Inc. (Paramount) to hold full evidentiary hearings on WTXF(TV)©s compliance Fox Television Stations Inc. (Fox). Because the Grade B with the Commission©s equal employment opportunity contour of WTXF(TV) overlaps with that of television sta (EEO) policy and rules during Paramount©s last renewal tion WNYW, Channel 5 (Fox), New York, New York, term; (2) seek clarification of an adverse adjudication in which is licensed to Fox, Fox also requests waiver of the volving Irwin Schloss, a former director on the board of duopoly rule, Section 73.3555(b) of the Commission©s Paramount©s immediate parent company, and appearing to Rules, which generally proscribes common ownership of relate, the Task Force alleges, "to fraud and misrepresenta two television stations whose Grade B contours overlap. tion"; (3) conduct a "public inquiry" into a judgment National Broadcasting Company, Inc. (NBC) and the Phila against Paramount affiliate Blockbuster Entertainment Cor delphia Lesbian and Gay Task Force (Task Fo©rce) each poration (Blockbuster), which, according to the Task filed a petition to deny the application, Paramount and Fox Force, "seems related to misrepresentation and fraud"; and separately opposed the petitions, and NBC replied. 1 (4) evaluate at a full evidentiary hearing the allegations of lack of candor raised against Fox in two other proceedings. NBC©s Petition to Deny 4. First, with respect to EEO matters, we note that all of 2. NBC essentially argued that Commission action in this the allegations raised by the Task Force in this proceeding proceeding might "prejudge and limit the Commission©s are nearly identical to those raised by the Task Force and option" in resolving two other sets of proceedings, one others in a joint informal objection against the renewal 1 On February 24, 1995, after the pleading cycle was com 3 Fox is currently the licensee of eleven television stations, but pleted, NBC requested dismissal of its petition. The affidavits currently has pending before the Commission an application to required under Section 73-3588 of the Commission©s Rules were sell one of those stations, WATL(TV), Atlanta, to Qwest Broad submitted. Accordingly, we dismiss the NBC petition, but we casting LLC. See BALCT-941214KH. On June 7, 1995, the Com remain obliged to consider the merits of that petition against mission granted Fox©s application for the acquisition of WGHP, the subject application. Booth American Company, 58 FCC 2d High Point, North Carolina, but Fox has not yet consummated 553, 554 (1976). Consequently, we do so below. that purchase. See BTCCT-950406KF. To insure compliance 2 The attribution issue is raised against applications seeking the with the Commission©s twelve-station rule, Section 73.3555(e), assignment of licenses of television stations in Green Bay, Wis we shall condition grant of the application here upon Fox©s consin, Mobile, Alabama. New Orleans, Louisiana, and Honolu consummation of the Philadelphia transaction only if it will not lu, Hawaii, from subsidiaries of Burnham Broadcasting result in its ownership of more than 12 television stations. Company L.P. to subsidiaries of the SavoyTFox joint venture. See File Nos. BALCT-941014LH, BALTT-941014LI, BALCT- 941031KF - KH, BALTT-941031KI, and BALCT-941031KJ - KK. 10963 FCC 95-360 Federal Communications Commission Record 10 FCC Red No. 21 application of WTXF(TV). See File No. BRCT-940401L3. prospectuses prepared by Blockbuster, and incorporated by Those allegations were fully addressed in that proceeding, reference in various filings with the Securities and Ex and the informal objection was denied. See Paramount change Commission (SEC), were false. Stations Croup of Philadelphia Inc., MMB, released March 7. In this proceeding, Viacom now suggests that the 16, 1995. Accordingly, we also deny here the Task Force©s Blockbuster merger into Viacom renders unwarranted any EEO-related allegations. further Commission examination of the litigation or its 5. Second, in two, since-granted, long-form applications impact on Viacom©s character qualifications because Block to which Paramount©s immediate parent company, Para buster no longer exists as an autonomous entity. Further, it mount Communications Inc. (Paramount Communica asserts that it reported the adjudication "out of an abun tions), was a party, it was reported that on July 10, 1989 dance of caution" even though the Blockbuster litigation is Marcus Schloss & Company, Inc. was convicted, in United the type of case "that need not be cited in FCC applica States of America v. Marcus Schloss & Company, Inc. and D. tions." The trial judge©s factual findings, Viacom contends, Ronald Yagoda, U.S.D.C. Southern District of New York, were made in support of the civil judgment for damages Docket No. 88-00796-01 (CSH)(1989), of one count of awarded to the plaintiff and not as an adjudication of violating 18 U.S.C. §371 (conspiracy) and of one count of securities law claims. "Importantly," Viacom adds, "the violating 15 U.S.C. §§78j(b), 78n(e) and 78ff (securities Securities and Exchange Commission has not raised any fraud). See File Nos. BALCT-930621KE (assignment of li question about whether any statements in the prospectus cense of WKBD(TV), Detroit, Michigan, to Paramount af might be false or misleading." filiate) and BTCCT-930921KG - KM (transfer of control of 8. In determining the character qualifications of broad licenses of all Paramount Communications stations to cast applicants, we consider "adjudications of both criminal Viacom Inc.).4 According to the applications, Irwin Schloss, and civil violations of law. in which a specific finding of then a director of Paramount Communications, was presi fraudulent representation to another governmental unit is dent of Marcus Schloss & Company, Inc., but he was not a made." Policy Regarding Character Qualifications in Broad named defendant in the litigation. Paramount states that cast Licensing, (1986 Character Policy Statement) 102 FCC since March 10, 1994, when Viacom Inc. assumed control 2d 1179, 1195-96, on reconsideration, 1 FCC Red 421 of Paramount Communications, Schloss ceased serving as a (1986), modified (1990 Character Policy Statement), 5 FCC director of Paramount Communications. In light of Red 3252 (1990), on reconsideration, 6 FCC Red 3448 Schloss© departure, therefore, his level of participation in (1991). Such adjudications also encompass those involving that misconduct, if any, is irrelevant and his impact on fraudulent statements contained in a filing furnished to a Paramount decision-making is moot. Thus, we decline the governmental unit, such as a prospectus submitted to the Task Force©s request to seek further clarification of this SEC or to one of its state counterparts. Fairness, however, litigation and find that it will not adversely affect Para- requires that we limit the scope of relevant adjudications to mount©s qualifications to assign the license for WTXF(TV). those in which the issue of fraudulent representation to 6. Third, in connection with two other, since-granted another governmental unit has been adequately raised and applications to which Paramount affiliates were party. thoroughly litigated. Thus, the adjudication must arise out Viacom Inc. (Viacom), the ultimate parent company of of a claim or cause of action pled by a plaintiff, a charge Paramount, notified the Commission, via letter of October brought by the state or federal government, or an inquiry 21, 1994, that Blockbuster had recently been merged into or proceeding initiated by a governmental agency directly Viacom and that Blockbuster had been a co-defendant in tied to statements in the securities filings.