Federal Communications Commission DA 96-790 in Re Application Of

Federal Communications Commission DA 96-790

Before the Federal Communications Commission Washington, D.C. 20554

In re Application of ) ) WNYC COMMUNICATIONS GROUP ) (Assignor) ) ) and ) File No. BALCT-950901KE ) ITT-DOW JONES TELEVISION ) (Assignee) ) ) For Assignment of License of ) Station WNYC-TV, New York, NY )

MEMORANDUM OPINION AND ORDER

Adopted: May 16, 1996 Released: May 17,1996

By the Chief, Video Services Division:

1. The Chief, Video Services Division has before it for consideration the application for assignment of license of television station WNYC-TV, Channel 31, New York, N.Y., from WNYC Communications Group, an entity controlled by the City of New York, to ITT-Dow Jones Television ("ITT-Dow Jones"). ITT-Dow Jones is a general partnership consisting of two general partners, ITT Broadcasting Corporation (ITT Broadcasting) and Dow Jones Broadcasting (USA), Inc. ("Dow Jones Broadcasting"). A formal petition to deny the assignment application was filed by the Coalition for Ethnic Broadcasters in New York ("Coalition"). Numerous viewers also filed informal objections against the sale.1

2. The Coalition consists of seven programmers: Juno Communications Group; Bajaj Productions, USA, Inc.; Ukrainian Television Entertainment Inc.; PSC Communications Group, Inc.; Haiti Premiere Classe; Sinovision, Inc.; and World Television Corporation, who lease time and air commercial ethnic-oriented programming on WNYC-TV. The Coalition alleges that they will suffer harm from the station©s sale to ITT-Dow Jones in that the sale will result in the

1 The informal objections which consisted of letters and "form" petitions did not qualify for consideration as petitions to deny under Commission rules because of their unsupported allegations and/or untimely filing. 47 CFR §73.3584, 47 U.S.C. § 309(d)(l). In any event, the programming concerns raised in the objections will be addressed in connection with our consideration of the formal petition, which similarly sets forth those programming concerns.

13841 Federal Communications Commission DA 96-790 elimination of an outlet for their unique programming. The Coalition requests that the Commission designate the assignment application for hearing on three grounds. It first maintains that WNYC-TV is a noncommercial station and as such cannot be transferred to a commercial entity. In support of this contention, the Coalition alleges that WNYC-TV began operation in 1962 as a noncommercial television station and that in a 1975 order considering the station©s license renewal, the Commission made a de facto and de jure designation of noncommercial status for the station, citing City of New York Municipal Broadcasting System, 56 FCC 2d 169 (1975). The Coalition also argues that the New York City Charter mandates WNYC-TV©s operation as a noncommercial entity and, therefore, the Commission should not permit the City to "forsake its duty of public trust for mere monetary gain."

3. The Coalition next contends that the proposed purchase of WNYC-TV by ITT-Dow Jones is precluded by the Commission rules because Dow Jones & Company, Inc. ("Dow Jones & Co."), which controls Dow Jones Broadcasting, publishes the Wall Street Journal ("Journal"©). The Coalition argues the acquisition would violate the Commission©s newspaper cross-ownership rule which prohibits common ownership of a daily newspaper and a television station where the Grade A contour of the station encompasses the community in which such newspaper is published. 47 CFR § 73.3555(d)(3). The Coalition also claims that the Journal does not qualify for exemption from the newspaper cross-ownership rule as a nationally distributed publication.

4. The Coalition finally argues that the loss of WNYC©s ethnic programming which would follow from ITT-Dow Jones© acquisition of WNYC-TV is inconsistent with the public interest. Citing the applicant©s proposed program service statement, the Coalition alleges that ITT-Dow Jones© intended presentation of business/financial news and sports programming will necessarily eliminate the station©s current broadcast of locally-produced ethnic programming which is not available from other sources. The Coalition contends that the displacement of such programming by ITT-Dow Jones means that the station will not be able to meet the needs and interests of the local New York community. The Coalition also contends that ITT-Dow Jones© failure to articulate clearly its commitment to children©s programming further demonstrates the detrimental public interest impact of the proposed assignment

5. In assessing the merits of a petition to deny, the Commission is guided by Section 309(d)(l) and (2) of the Communications Act, as analyzed inAstroline Communications Company Limited Partnership v. FCC, 857 F.2d 1556, 1561 (1988). First, the Commission determines whether the petitioner has made specific allegations of fact that, if true, would demonstrate that grant of the application would be prima facie inconsistent with the public interest, convenience and necessity. If so, then the Commission proceeds to examine and weigh all of the material before it, including information provided by the applicants, to determine whether there is a substantial and material question of fact requiring resolution in a hearing. Finally, the Commission must determine whether grant of the application would serve the public interest Based oh an examination of the application, the petition, the opposition and related pleadings, we conclude that the matters do not raise any substantial or material questions of fact that would require resolution in a hearing.

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6. First, the Coalition©s conclusion that WNYC-TV must remain a non-commercial station is erroneous. As ITT-Dow Jones correctly points out, WNYC-TV is licensed on a non-reserved commercial channel. 47 CFR § 73.606 (b). Accordingly, its frequency may be used for commercial purposes. In fact, it appears that the station has been operated commercially for many years, as is evident by the Coalition©s commercial lease of tune on the facility. More importantly, the defining factor hi a station©s mode of operation is not its classification as commercial or non-commercial, but rather the designation of its channel as reserved or unreserved. Amendment of the Commission©s Rules Regulations and Engineering Standards Concerning the Television Broadcast Service, 8 RR 467 (1952). Channels were initially reserved to give educational institutions additional time to prepare for the operation of a television station. Id. at 470. Because such channels were set aside, their use was restricted to non-commercial purposes. Id. In contrast, no restrictions accompany unreserved channels and they may be used commercially, or non-commercially, as the licensee sees fit. Id.; see, e.g., NTA Television Broadcasting Corp., 44 FCC 2563,2563-2573 (1961) (where Commission granted an application for assignment of license to an operator proposing to substitute the station©s commercial format for noncommercial educational programming).

7. The petitioner©s claim of a de facto or dejure Commission finding as to the station©s non-commercial status is also incorrect. Relying on the Commission©s 1975 license renewal decision, which addressed a petition against the renewal alleging a violation of the multiple ownership rules, the Coalition contends that the Commission declined to apply the multiple ownership rules because of WNYC-TV©s non-commercial operation.2 City of New York, 56 FCC 2d at 171. That interpretation, however, is misguided. In City of New York, the Commission first acknowledged that WNYC-TV and WNYC-AM-FM operated noncommercially on commercial, unreserved channels. The Commission then observed that the City©s acquisition of each station preceded the adoption of rules limiting multiple ownership of commercial broadcast stations and subsequently concluded that the City©s ownership of the three stations was grandfathered and thus consistent with the multiple ownership rules. City of New York, 56 FCC 2d at 171, n.6, 172.

8. The Coalition©s contention that the New York City Charter imposes a requirement for non-commercial operation is also unpersuasive. The Commission is not empowered to enforce local ordinances. New York City maintains the responsibility to enforce its own ordinances and has here concluded not only that it has the authority to sell WNYC-TV, but also that such a sale is hi the best interests of the City©s residents. Moreover, a New York local court has recognized the City©s legislative discretion to dispose of its assets in a manner it deems appropriate and to contract with a buyer of its choosing. Creole Enterprises, Inc. v. Rudolph Giuliani, Index No. 113505/95 (N.Y. Sup. Ct. 1995). The City©s broadcast stations, the court further determined, are assets which may be sold pursuant to this legislative discretion. Id.

9. The Coalition©s assertion that the proposed sale requires waiver of the Commission©s

2 Non-commercial stations are specifically exempt from the broadcast multiple ownership restrictions. 47 CFR § 73.3555(f).

13843 Federal Communications Commission DA 96-790 multiple ownership rule, 47 CFR § 73.3555(d)(3), prohibiting the ownership of a daily newspaper and a television station in the same market is mistaken. The Coalition essentially argues that Dow Jones & Co.©s publication of the Journal prevents ownership of the station by ITT-Dow Jones, and that the Journal fails to qualify for exemption from the rule as a national newspaper. Petitioner©s contentions are plainly contradicted by Commission precedent Recently, in Stockholders of CBS, Inc., we found that the Journal is a nationally circulated newspaper and, therefore, not subject to the newspaper/broadcast cross-ownership rule. FCC 95-469 at \ 108, (released November 22,1995). Similarly, in Evening News Association, 102 FCC 2d 1263,1266 (1986), the Commission cited the Journal as an example of a national newspaper which qualified for exemption from the rule.

10. The Coalition©s final objection to the proposed sale is the potential loss of ethnic and children©s programming upon ITT-Dow Jones© acquisition of the station. The Coalition alleges that ITT-Dow Jones© proposed program service of financial news, business information and sporting events would necessarily displace the current children©s programming being aired on the station and that ITT-Dow Jones fails to demonstrate a future commitment to meet the viewing needs of children. The Coalition also argues that the simultaneous elimination of the current ethnic program offerings on WNYC-TV will terminate an essential outlet for foreign-interest programming. The informal objections and letters underscore these concerns. Several of the informal objections highlight particular programs featured on WNYC-TV such as Eye on Asia, Kontakt, and China Near and Far, and urge that the Commission deny the sale to preserve the broadcast of these programs.

11. The Commission generally relies on market forces rather than regulatory oversight to arbitrate format changes, although we reserve the right to intervene in such matters if necessary to serve the public interest more fully. See FCC v. WNCN Listeners Guild, 450 U.S. 582, 603 (1981) (Supreme Court upheld Commission policy not to consider past or proposed format changes in its review of license transfer applications, but noted that "the Commission should be alert to the consequences of its policies and should stand ready to alter its rule if necessary to serve the public interest more fully."). We see no basis in the record here to conclude that our presumptive reliance on market forces to adequately ensure format diversity is misplaced.

12. Examples of that format diversity include WNYE-TV, licensed to the Board of Education of the City of New York, which airs approximately 40 hours of foreign-language programming per week. ITT-Dow Jones also states that there are at least two full-time Spanish language television stations licensed in New York City and several radio stations in the New York metropolitan area which air foreign language programming. ITT-Dow Jones further indicates that, in view of this pending sale, the City has attempted to locate, or create alternative outlets for the Coalition programming, including the possibility of broadcasting on the City©s government cable channel which is currently accessible by 1.5 million cable subscribers. It, therefore, appears that New York supports active and substantial outlets for ethnic and foreign- interest programming. Concerns about the reduced access or effective elimination of such broadcast programs as a result of the proposed acquisition are mitigated by the availability of other New York broadcasters who offer or are willing to offer ethnic and foreign-language

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programming. In addition, ITT-Dow Jones acknowledges the importance of children©s programming and its obligations under the Children©s Television Act, Pub. L. No. 101-437, 104 Stat. 996-1000, codified at 47 U.S.C. §§ 303a, 303b, 394, and has committed fully to broadcasting quality children©s programming on WNYC-TV and to serving the educational and informational needs of New York City area children through its programming.

13. In summary, we find that the Coalition©s petition to deny and the informal objections against the proposed transaction fail to raise a substantial and material question of fact as to whether grant of the application would be inconsistent with the public interest In accordance with Section 309 of the Communications Act of 1934, we, therefore, find no basis for a hearing in this matter and will deny the petition to deny and the informal objections. We further conclude that ITT-Dow Jones is qualified to be a licensee in all other respects3 and that grant of the instant assignment application will serve the public interest, convenience and necessity.

14. ACCORDINGLY, IT IS ORDERED, That the petition to deny submitted by the Coalition for Ethnic Broadcasters and the numerous informal objections against the above- captioned application for assignment are DENIED. IT IS FURTHER ORDERED That the above- captioned application for assignment of license of station WNYC-TV from WNYC Communications Group to ITT-Dow Jones (File No. BALCT-950901KE) IS GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

Barbara A. Kreisman Chief, Video Services Division

3 David K.P. Li, a member of the board of directors of Dow Jones & Co. (parent of Dow Jones Broadcasting) is also on the board of Westinghouse Electric Corporation, licensee of WINS and WNEW(FM), New York, New York and of KYW-TV, Philadelphia, Pennsylvania. In its application, ITT-Dow Jones requested waivers of the Commission©s one-to-a-market and duopoly rules. These requests, however, have been mooted by the Commission©s prior action accepting Mr. Li©s recusal from the broadcast matters of Dow Jones & Co., and relieving him from any attributable broadcast interests created by his service on the Dow Jones & Co. board. See Stockholders of CBS, Inc., FCC 95-469 at 48.

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