FCC Record, Volume 2, No. 1, Pages 1 to 409, January 5 - January 16, 1987 Page: 379

                                
Federal Communications Commission Record

been responsible for the television engineering facilities of
KOED since 1976 and held the title Manager of Engineering
Facilities (KOED Ex. 98 at 1). It was Mr. Diehl who specified,
selected and purchased the equipment that would replace the
Cogan Unit (KOED Ex. 98 at 6). Mr. Diehl had direct responsibility
for the installation of the equipment (Tr. 697).
7 KOED had not been replacing any equipment on a depreciated
schedule (Tr. 583-584). KOED also had a very serious
working capital deficit; in all of the prior twelve years the
organization had been eating up what asset base it had to fund
current operations (Tr. 581-582).
8 Initially a five-year rehabilitation plan had been proposed to
Mr. Tiano (KOED Ex. 100 at 1, tab 1, Five-Year Capital Plan).
He in turn recommended to the Board a less ambitious and less
expensive three-year program which concentrated on local
broadcast and local production activities (KOED Ex. 100 at 1,
tab 2, Three-Year Capital Plan) Tr. 1198). An assumption underlying
both of these plans was KOED's continued operation
of KOED-TV, KOEC and KOED FM (KOED Ex. 100 at 2).
9 KOED's 1980 fiscal year ran from September 1979 through
August 1980.
10 Taking KQED-TV off the air to keep KOEC on was not
considered a practical option (Tr. 454). KOEC was chosen
because it operated fewer hours and reached a smaller audience
by reason of its smaller coverage area (KOED Ex. 100 at 7-8).
1 This scenario was a replay of what occurred whjn KOEDTV
and the Cogan Unit were moved to KOEC; only then
KOEC's control equipment was used to operate KQED-TV
until its own control equipment was installed. See para. 34,
supra.
12 It was not technically feasible to install the new system
with the Cogan Unit still functioning and then cut over from
the Cogan Unit once the new system was in place (Tr. 1887).
The entire Cogan Unit had to be' turned off simultaneously,
disassembled and removed (Tr. 1865, 1989, 1901). Reassembly in
another location for use by KOEC would have taken four or
five weeks, which was the time allocated to the entire replacement
process (Tr. 1908).
13 The equipment (none of which was available to KOED)
would include a switcher and dedicated tape machines with
time base correctors. These would be needed because the stations
would have no means to share input sources (such as
VTR's) as they had in the past (Tr. 1822). Operation of KOEC
would also require monitoring equipment for audio and video,
audio and video distribution amplifiers, and from three to five
thousand feet of cable for the necessary feeds (Tr. 453, 461,
465-466, 1822). Installation of the cable alone would take two
man-weeks (Tr 468), and a suitable switcher would cost $500
per day to rent (Tr. 471, 473).
14 KQED was contractually obligated to produce these series,
both of which had scheduled air dates on PBS. Each series
produced about $3,500,000 in revenue for KOED (Tr. 1364).
Over Easy had been developed with federal grant, and was later
funded by corporate underwriters and PBS (Tr. 589-590). Up
and Coming, for which KQED was obligated to begin production
in January of 1980, KOED   Ex. 100 at 8, was funded
entirely by the federal government (Tr. 591). These series
produced a significant portion of KOED's income (Tr. 1231).
15 The CDL Unit could not be used to operate both KOEDTV
and KOEC simultaneously, as it did not have enough
outputs
(Tr. 1866-1867).

16 In mid-July, Mr. Tiano was informed by Daniel W.
Toohey, counsel for KOED, that there would be no difficulty
with taking Channel 32 off the air during the installation of the
new switching equipment (KOED Ex. 100 at 7, tab 3, July 17,
1979 Tiano memorandum to Katzman and Brand.
17 "Hardwiring" meant that one source was wired directly to
a certain output, rather than using a switcher as a point of
connection (Tr. 460, 481, 1469). The hardwiring required to
keep KQED-TV on the air once the Cogan Unit was removed is
illustrated in the photographs which are tabs 7, 9, and 11 to
KOED Ex. 98, Mr. Diehl's written testimony (Tr. 480-482).
Initially, it was thought that KOED would have to live with the
Channel 9 hardwiring for only a month and a half. However,
these conditions continued until sometime after KOEC resumed
broadcasting a separate schedule on May 29, 1980
(KOED Ex. 98 at 10-11; Tr. 483, 1222).
18 Conditions in December within KOED's television and
engineering facilities were described by Mr. Diehl as a "rat's
nest." (KOED Ex. 98 at 10--11). The facilities were overextended
and personnel overburdened with all the projects going on
at the same time (Tr. 447, 477, 1222).
19 If Up and Coming production activities had been relocated
from KOED's facilities, a move which would have cost hundreds
of thousands of dollars, KOEC could have been operated
(Tr. 721, 728). However, in the month of December, Studio A
had already been'set up and prepared for production of Up and
Coming which was due to begin immediately after the first of
January. It was too late to move (Tr. 688, 727, 1212, 1338).
20 Many other engineering improvements were in progress or
nearing completion at this time. The installation, integration
and testing of all of this equipment was a tedious, timeconsuming
task (KOED Ex. 99 at 12, fn. 6). The unavailable
equipment included a switcher and dedicated VTR's (Tr. 1822,
1855). The services of at least one additional maintenance engineer
would be needed to operate the station during this
period, Tr. 1856, at a time when virtually the entire maintenance
staff was being used for the replacement of the Cogan
Unit and the installation of new VTR's (Tr. 1340). Mr. Tiano,
who in any event accepted the recommendation of his engineering
staff that it was not feasible to operate KOEC at this
time, Tr. 1206-1207, estimated that such an effort would have
cost KOED in excess of $1,0(K) per week of non budgeted, i.e.,
extraordinary, expenses (Tr. 1074-1339). Ms. Belt also said that
it would have been difficult to have maintained a separate
schedule on KOEC while all these activities were going on, and
that the additional equipment needed would have been very
expensive (Tr. 1552, 1553, 1567).
22 While this letter was not an exhaustive assertion of the
kinds of problems he was having with ADC, it was representative
(Tr. 1875).
23 Mr. Kroll, who knew that KOEC had gone off the air for
technical reasons in the fall of 1979, had erroneously assumed
the switching problem was resolved because the station had
gone back on the air in December (Tr. 271 272).
24 See KOED Ex. 99 at 13, tab 20, February 7, 1980, ADC
packing slip; tab 21, February 19, 1980 ADC packing slip; and tab
22, February 22, 1980, ADC invoice. Several pieces of equipment
identified in the February 22, 1980 invoice had been invoiced
by ADC on November 21, 1979, but not shipped at that time.
(Tr. 1907).
25 Dr. Diehl testified that "....we were continually promised
from the manufacturer that the equipment was due to ship
almost any day, and it would be here soon" (Tr. 456).
26 See KOED Ex. 99 at 13, tab 23, April 14, 1980, ADC
invoice.

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