In the Matter of AMENDMENT OF SECTION 73.606(b), TABLE OF ASSIGNMENTS, TELEVISION BROADCAST STATIONS (KERRVILLE-FREDERICKSBURG, TEX.)

Docket No. 18979 RM-1387

FEDERAL COMMUNICATIONS COMMISSION

35 F.C.C.2d 510

RELEASE-NUMBER: FCC 72-504

June 13, 1972 Released

Adopted June 9, 1972

JUDGES:

BY THE COMMISSION: CHAIRMAN BURCH ABSTAINING FROM VOTING; COMMISSIONER BARTLEY CONCURRING IN PART AND DISSENTING IN PART AND ISSUING A STATEMENT IN WHICH COMMISSIONER JOHNSON JOINS, COMMISSIONERS H. REX LEE, REID AND WILEY CONCURRING IN THE RESULT.

OPINION:

1. On August 26, 1970, the Commission adopted a Notice of Proposed Rule Making in this proceeding (FCC 70-927) in response to a petition filed by United-Tecon, a joint venture, on December 31, 1968. The petition requested, and the Notice proposed, the assignment of Channel 2 to Kerrville-Fredericksburg, Texas as a hyphenated assignment. No other revisions in our Television Table of Assignments were suggested.

2. Interested parties were afforded an opportunity after numerous extensions of time to file final comments on or before November 10, 1970 and to reply to such comments on or before February 9, 1971. Timely comments and/or reply comments were filed by: Southwest Republic Corporation, licensee of Channel 42, KHFI-TV, Austin, Texas (Southwest); Channel Twenty-Four Corporation, licensee of Channel 24, KVUE (formerly KVET-TV), Austin, Texas (Twenty-Four Inc.); and petitioner, United-Tecon, a joint venture (U-T). On March 31, 1971, Southwest filed a petition for leave to file supplemental comments and said supplemental comments. No oppositions were filed to the proposed late filing of Southwest. In view of that fact, the somewhat unique problem presented by this case, and our desire to have all possible pertinent material before us during consideration, we are granting Southwest's petition for late filing.

The Need of the Kerrville-Fredericksburg Area for Local Television Service

3. Fredericksburg is the county seat of Gillespie County, respective populations, 5,326 and 10,553. The community lies approximately 68 miles west of Austin and 63 miles north-northwest of San Antonio. Kerrville, population 12,672, is the county seat of Kerr County, population 19,454. Its location is approximately 23 miles southwest of Fredericksburg. Both Kerrville and Fredericksburg are located in the so-called "Hill Country" of Texas. Neither community has any television assignment at the present time. n1

n1 All population statistics cited refer to the 1970 U.S. Census or are extrapolations, from available material, to that Census, unless specific identification is given to the contrary.

4. Petitioner, in advancing its proposal, states that a Channel 2 assignment at Kerrville-Fredericksburg would bring a Grade B service to 10,861 square miles which contains 66,681 residents and a Grade A signal to 2,730 square miles in which there are 28,663 persons. U-T lists the following tabulation to indicate the size and population of unserved areas or areas receiving but one service to be reached by the Grade B signal of the proposed Channel 12:

Description	Population	Area
		(square miles)
Grade B unserved
area	21,739	6,453
Percent of total	32.6	59.2
Grade B underserved
area	6,556	630
Percent of total	9.8	5.8

The below set out tabulation is presented by petitioner to indicate the size and population of unserved areas or areas receiving but one service to be reached by the Grade A signal of the proposed channel:

Description	Population	Area
		(square miles)
Grade A unserved
area	28,051	2,617
Percent of total	97.9	95.9
Grade A underserved
area	612	113
Percent of total	1.1	4.1

From these figures petitioner vigorously urges that its proposal is clearly in the public interest not only because it is bringing a new service to the Kerrville-Fredericksburg area but because, indeed, much of the proposed service will be to presently unserved or underserved populations.

5. The hill country of Texas (west of Austin) contains the two communities, Kerrville and Fredericksburg. In respect to Kerrville and the surrounding hill country petitioner states:

... It is the center of a verdant area with a thriving ranching, agricultural, and recreational economy. The ranching is somewhat unique in that the area raises more sheep and goats than cattle...

The balance of the agricultural activity in the area is, for the most part, represented by dairying and poultry farming and the growing of grains: . more than 30 boys' and girls' summer camps, accommodating more than 25,000 youngsters, are located in Kerr County alone... Some of the best hunting and fishing in the country is claimed for Kerr County; and many persons from all parts of Texas and other states maintain vacation homes there... Kerrville is the shopping center for 5 counties. It has 320 retail establishments with annual sales in excess of $26,000,000. It also has an aircraft manufacturing plant which employs [sic] over 900 persons, with an annual payroll of more than $4,000,000.

U-T concludes its description of the hill country surrounding Kerrville and Kerrville itself by indicating that the community has two banks with total deposits of over $29 million, and a Federal Savings and Loan Association with assets of $14 million. In describing Fredericksburg, petitioner mainly cites facts concerning activity in its county -- Gillespie, Being in the hill country, much of the county's activity is similar to that described above for the area surrounding Kerrville. In addition, industrialization has also commenced and the county supports industrial lumber yards, machine shops and other enterprises employing approximately 1,500 people. Retail sales in the county, it is asserted, amount to approximately $15 million annually. From the activity -- social, political and economic -- occurring in Kerrville and Fredericksburg, petitioner concludes that it is in the public interest to bring these two communities a first local television service.

6. Southwest and Twenty-Four, Inc. conclude that the above-described area does not need and cannot support a first local television service. Southwest points out that Kerrville and Fredericksburg each have local radio service, that there are four newspapers serving the two communities, that CATV systems exist in each community, and that the area to be served by the proposed Channel 2 receives television service, in part, from translators of other stations. Twenty-Four, Inc. cites a variety of statistics concerning the size of the population to be served by the proposed station -- television homes, etc. -- and the lack of economic activity in the area from which it extrapolates that there would only be $113,000 available for the operation of the proposed Channel 2, annually.

7. The Commission has recognized, in the allocation of a television frequency, that a first television service to the area is the highest priority and local television service is the second highest priority according to the proceedings in Docket Nos. 8736 et al. which set up the nationwide Television Table of Assignments and was concluded by the Sixth Report and Order, 1 R.R. (Volume 3) 91:601 at 91:620 (1952). We agree that the unserved and underserved areas in the proposed service area clearly support the need for television service in the area and that existing radio, translator and cable service is not a substitute for off-the-air television service. The Kerrville-Fredericksburg area, due to its semi-rural nature, has interests, needs, and desires somewhat different from those of other areas, such as the city of Austin, which cannot be met through translator service from stations located in urbanized areas or as effectively by other means of communication.

8. In examining the ability of the proposed service area to support a local television station we have come to the conclusion, from all of the facts presented, including those set out in paragraphs 3 through 5 above, that although the operation may well be marginal economically for a period of time, the proposed station will be authorized only to a financially qualified applicant under the Commission's existing policies. It is our judgment that the number of television homes in the proposed service area will in all probability rise, particularly in that portion of the area now without any television service, after establishment of an off-the-air television service. The final judgment, however, in respect to the economic viability of the proposal does not lie with us. Such a decision is a business judgment which must be made by the prospective applicants for the channel. Petitioner, with all of the contentions set out in this pleading before it, has affirmed its intention to apply for the channel.

9. In concluding our discussion of the need of the Kerrville-Fredericksburg area for local television service we wish to emphasize that the presentations made in this proceeding clearly indicate that the two communities (separated by only 23 miles) are similar enough in economic activity and culture to warrant a hyphenated assignment n2 -- an assignment that we judge, from the facts presented, to be needed, particularly by the significant population to be reached by a first television signal. See paragraph 4, above.

n2 Based on its engineering showing, the proposal of petitioner will put a city-grade signal into both communities simultaneously.

10. Based on all the pleadings and on all existing Commission policies and precedents, we find that there has been a sufficient showing to warrant the assignment of a television frequency to Kerrville-Fredericksburg. Texas. The next question we face is the technical feasibility of the directional proposal submitted by United-Tecon.

Technical Feasibility of the Proposal

11. Section 73.685(e) of the Rules, waiver of which has been requested, provides a maximum permissible ratio of maximum to minimum radiation, for television directional antennas, of 10 decibels whereas petitioner here is proposing an antenna providing a 60 db ratio to prevent an impact on operating UHF stations in Austin and San Antonio, Texas. However, we are not here in a position to evaluate with specificity such a proposal until it is before us in an application for the facility and we have no assurance that petitioner will be the successful applicant. Notwithstanding this, we can state that the greatest deviation thus far permitted by waiver of Section 73.685(e) has been 39.4 db for an especially designed and constructed antenna for Station WVPT, Staunton, Virginia. Waivers for more typical directional antennas proposing a 34 db ratio were granted to Stations KKTV and KRDO, Colorado Springs, Colorado.

12. While petitioner pleads that the directional antenna proposed is based upon measurements, it must be realized that such a procedure (i.e. the use of a test facility), while acceptable under ordinary conditions, cannot be relied upon in this instance where such a vast departure from our rule is involved. It appears to us that the only proof of the proposal would be its measurement under actual operating conditions. Since this cannot be done, we must conclude that the proposal is an unreasonable one and deny the requested waiver. Channel 2 will not be assigned to Kerriville-Fredericksburg, Texas. A question of Federal Aviation Agency clearance was raised by KHFI-TV. In view of our disposition of the matter, this question is moot.

13. Since the basic question involved in this proceeding is that of UHF impact, the problem can be resolved quite simply by the assignment of a UHF channel to Kerrville-Fredericksburg and this we would readily do upon petition since it has been established that a need exists and it can be done in conformance with all Commission Rules and policies.

14. Since we have decided that the U-T proposal is not a feasible technical assignment, we need not rule on the question of UHF impact. However, we shall consider that question.

Possible Adverse Impact on UHF Stations

15. In light of this Commission's policy to protect and foster the development of UHF television, petitioner has formulated its proposal for Channel 2 at Kerrville-Fredericksburg in such a manner as to avoid adverse economic impact, through competition, on the UHF stations in Austin. Texas and San Antonio, Texas. n3 U-T proposes a transmitter site approximately 60 miles west of Austin. n4 It maintains that a television station located on Channel 2 at the said site with an antenna height above ground of 1,700 feet, with maximum power (100 kw E.R.P.), with a directional antenna beamed to the west having a 60 db maximum to minimum ratio would serve the population described in paragraph 4 above without putting a Grade B signal closer to Austin n5 than 20 miles.

n3 San Antonio, Texas has three VHF commercial channels, each of which is licensed: Channels 4, WOAL-TV; 5, kens-tv/; and 12, KSAT-TV. Only one of the two (29 and 41) UHF commercial assignments to the city is occupied -- Channel 41, KWEX-TV, licensed to Spanish International Broadcasting Corporation. It is a Spanish-language station. Apparently, it does not consider petitioner's proposed operation on Channel 2 as in any way affecting its service since it has not made a filing in this proceeding. In light of the existence of three VHF commercial services in San Antonio, the Spanish-language programming of KWEX-TV, and the judgment of KWEX-TV not to participate in this proceeding we will not discuss in detail any expected impact of the proposed Channel 2 on San Antonio. The city also has two educational assignments, Channel *9, KLRN and Channel *23, which has no application for its use.

n4 The Precise location used by petitioner for his exhibits has been discovered to be short-spaced to Channel 2, XEFF-TV, at Nuevo Laredo, Mexico by 0.75 miles. Southwest also contends that the location is not appropriate because of FAA regulations. In response petitioner points out that if the precise location is unsuitable its proposal can still be carried out by moving the transmitter site west and north, away from Austin and San Antonio. For purposes of our consideration of the matter before us we consider petitioner's cited location as giving us an adequate indication of the expected operation on Channel 2.

n5 Austin has one VHF commercial channel, 7. KTBC-TV, licensed to Texas Broadcasting Corporation. Out of the three commercial UHF channels assigned (24, 36, and 42), Channel 24 is now licensed to Channel Twenty-Four Corporation, and Channel 42, KHFI-TV, is licensed to Southwest Republic Corporation. There are no applications outstanding for Channel 36 or Channel *18, the educational assignment.

16. Its proposal, U-T affirms, would have only the penetration into the listed Austin and San Antonio UHF stations' total service area as set out in the following chart:

Description	Population	Area (square
		miles
(1) KVUE(TV), Channel 24, Austin
(A) KVUE(TV) total Grade B	692,007	14,692
Proposed grade B overlap	19,450	2,340
Percent of total grade B	2.8	15.9
(B) KVUE(TV) total grade A	466,043	8,545
Proposed grade B overlap	5,124	1,110
Percent of total grade A	1.02	13.0
Proposed grade A overlap	50	6
Percent of Total grade A	0.1	0.1
(2) KHFI-TV, Channel 42, Austin
(A) KHFI-TV total grade B	621,895	12,411
Proposed grade B overlap	12,723	1,901
Percent of total grade B	2.0	15.3
(B) KHFI-TV total grade A	417,883	6,848
Proposed grade B overlap	4,032	720
Percent of total grade A	0.96	10.5
(3) KWEX-TV, Channel 41, San Antonio
(A) KWEX-TV total grade B	913,741	3,903
Proposed grade B overlap	1,209	203
Percent of total grade B	0.13	5.2

As can be seen from these statistics the overlap of service, assuming petitioner's proposal is not substantial.

17. The opponents ignore, in large part, the above actual proposal of petitioner and set out hypothetical proposed operations of their own: hypothetical operations which do not include the directional antenna proposed by petitioner, and hypothetical operations with the Channel 2 transmitter site moved from the proposed location to the east, near Austin. Their hypothetical situations indeed, show a highly competitive signal (Grade A) by the proposed operation on Channel 2, in the Austin market. U-T replies to this showing by emphasizing that it is purely hypothetical and not the proposal to petitioner. The opponents reasoning concerning the matter is that the Channel 2 operation will only be a marginal operation at best from an economic point of view since, as they set it, the proposed service area will not be able to support the Channel 2 operation. Giving this assumption the opponents reason that any licensee of Channel 2 at Kerrville-Fredericksburg would in time seek to serve the Austin market and that the economic pressure to so do would in time result in deviations from the above set out proposal of petitioner so as to result in a second VHF competitor in Austin.

18. We agree with the opponents that a second VHF service to Austin as hypothesized could do serious economic damage to the existing UHF commercial operations of Channel 42 (KHFI-TV), and Channel 24 (KVUE). Also, we believe that petitioner, if it is the successful applicant, will strive to operative the station as proposed herein. However, the economic factors and the history of small market television stations indicate that, when possible, a losing or marginal operation looks to new areas for revenues. Such an economic factual pattern is indicated here. If the proposed operation is modified to serve Austin, there will be a significant impact on the financial operation and development of UHF stations in Austin and possibly other surrounding areas.

19. U-T contends that the channel should be assigned under the Mount Vernon n6 decision, the proceeding which assigned a VHF channel to Mount Vernon, Illinois. In that case, we were faced with a minor overlap of contours, as well as a proposal that technically complied with all the rules. Here we are faced with a proposal that is highly directionalized and one that would easily cover Austin, Texas, if the operation became a omni-directional operation. As we stated above, excellent service could be supplied to the area by a UHF station that conforms to all requirements. The Mount Vernon decision does not support a waiver of the policy under the circumstances in this case.

n6 In the Matter of the Amendment of Section 73.606(b) of the Commission's Rules and Regulations to Add a VHF Television Broadcast Channel to Mount Vernon, Illinois, 34 F.R. 18036, 17 R.R. 2d 1620 (1969); reconsideration denied, 22 FCC 2d 222 (1970).

20. In view of the foregoing, we find that the request of United-Tecon, a joint venture, for the assignment of Channel 2 to Kerrville-Fredericksburg, Texas, must be denied.

21. Authority for the actions taken herein is contained in Sections 4(i), 303, and 307(b) of the Communications Act of 1934, as amended.

22. Accordingly, IT IS ORDERED, that the petition for leave to file supplemental comments, filed in this proceeding by Southwest Republic Corporation on March 31, 1971, IS GRANTED.

23. IT IS FURTHER ORDERED, that the request for waiver of Section 73.685(e) of the Commission's Rules and Regulations IS DENIED.

24. IT IS FURTHER ORDERED, that request for rule making (RM-1387) for assignment of Channel 2 to Kerrville-Fredericksburg, Texas IS DENIED.

25. IT IS FURTHER ORDERED, that this proceeding (Docket No. 18979, RM-1387) IS TERMINATED.

FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.

CONCURBY: BARTLEY (IN PART)

DISSENTBY: BARTLEY (IN PART)

DISSENT:

STATEMENT OF COMMISSIONER ROBERT T. BARTLEY CONCURRING IN PART AND DISSENTING IN PART IN WHICH COMMISSIONER NICHOLAS JOHNSON JOINS

I concur insofar as the Commission's action denies the directional operation proposed by United-Tecon. I am opposed to the directional proposal which is designed solely to avoid "UHF impact."

I dissent to that part of the decision which denies the proposal to assign Channel 2 to Kerrville-Fredericksburg, Texas, since the need for additional TV service in the area has been adequately demonstrated and Channel 2 can be assigned, consistent with our station separation requirements.