FCC Record, Volume 3, No. 14, Pages 4085 to 4354, July 5 - July 15, 1988 Page: 4,324
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Federal Communications Commission Record
3 FCC Rcd No. 14
construction and licensing. The second document, dated
April 14, 1987, reflects a further refinement of that agreement,
whereby Mr. Curtis would acquire a 49 percent
interest in the permittee's general partner, Rose, in return
for immediately advancing to equipment suppliers a 25
percent down payment in the amount ofl00,000 to ensure
that construction of the station could go forward. In addition,
the agreement between them includes a provision
that states that if for any reason the sale to Big Horn is
not consummated, Rose and BBA will be held responsible
for repayment of funds advanced during the construction.
BBA also reported that an option agreement, loan agreement
and related security and other instruments to reflect
these agreements were being prepared, but that until such
formal documents were executed, the parties would not be
obligated to go forward.
6. On July 7, 1987, BBA filed its third request for an
extension of time to complete construction of the station.
It reported progress in construction at the transmitter site,
and that necessary equipment had been delivered or was
in transit. BBA stated that it expected that a thirty-day
extension would be sufficient to enable it to complete
construction and tender a covering license application.
BBA's application was granted on July 16, 1987, and the
KCTZ construction permit was extended through January
1, 1988. However, on the day a public notice was issued
reflecting the grant of that application, Ms. Reier filed an
informal objection challenging BBA's extension request.4
On July 24, 1987, Ms. Reier filed a petition to set aside
the grant of the extension application pending consideration
of the informal objection.
7. On September 8, 1987, BBA filed the subject application
for a license to cover the construction of KCTZ's
facilities, stating that the station began operating pursuant
to program test authority the previous week. Shortly
thereafter, Ms. Reier filed a petition to deny that application.
She alleges that the license application filed by BBA
confirms that the KCTZ facilities differ from the terms of
the construction permit, insofar as BBA has installed a
different directional antenna than was authorized, resulting
in altered coverage characteristics for the station's
signal.5 For these reasons, as well as those set forth in
other pleadings, Ms. Reier asserts that operation of KCTZ
by BBA would not be in the public interest and that its
license application should be denied. In an opposition
pleading, BBA not only challenges Ms. Reier's standing
to file the various petitions, but also disputes the merits of
her charges. It states that it mistakenly submitted an incorrect
antenna pattern for the directional antenna it had
installed, but that on the basis of an engineering consultant's
review, there is no material difference between the
correct signal pattern and the pattern shown in its construction
permit. Lastly BBA contends that its May 14,
1987, submissions of the correspondence between Messrs.
Bee and Curtis refute the petitioner's allegation that there
has been an unauthorized transfer of control of the permittee.7
8. On October 29, 1987, the subject application to assign
the KCTZ construction permit to Big Horn was filed.8 Ms.
Reier filed a petition to deny the assignment application,
alleging that facts revealed during the course of this proceeding
evidence a prima facie showing that an unauthorized
transfer of control of KCTZ has taken place,
and that Big Horn and/or BBA principals have misrepresented
facts, or were lacking in candor, regarding their
involvement in the station's construction and operation. Ina consolidated opposition, Big Horn and BBA assert.
among other things, that none of the allegations advanced
by Ms. Reier in the various petitions raise a question as to
their forthrightness with the Commission, the merits favoring
the grant of these applications, or the qualifications
of the parties to the proposed transaction. Accordingly,
they contend that the Reier pleadings must be dismissed,
the BBA applications granted and the BBA-Big Horn
assignment approved.
THE PLEADINGS
9. Before addressing the substantive allegations raised
here, we must first note that both BBA and Big Horn
raise various questions regarding Ms. Reier's ability to file
formal petitions against, and participate in proceedings
relating to, certain of the subject applications and/or the
procedural sufficiency of her pleadings. However, we believe
that the matters she alleges should be examined and
resolved. Inasmuch as Ms. Reier's allegations involve the
same set of facts that evolved during the construction of
KCTZ, we will treat her petitions as informal requests for
Commission action. Due to the nature of the allegations,
we believe that such treatment will be helpful to address
and resolve the matters raised in this case. Moreover, such
a course is not inconsistent with Commission practice. For
example, BBA correctly observes that an order to show
cause, under Section 312 of the Communications Act of
1934, as amended, 47 U.S.C. 312, enables the Commission
to institute revocation hearings on its own motion,
but does not specifically create rights in third parties, such
as Ms. Reier, to file petitions to revoke licenses. Nevertheless,
such pleadings have been treated as informal requests
for Commission action under that section of the Act. See,
e. g., KSDK, Inc., 93 FCC2d 893, 895 (1983). We believe
that such an approach is appropriate here. Accordingly,
these allegations will be addressed below.
10. The Petitioner's Allegations. The petitioner maintains
that Mr. Curtis and Big Horn assumed control of KCTZ
no later than March 1987 as a prelude to a desired common
ownership and operation of that station and KOUSTV,
Hardin, Montana, licensed to Big Horn. Ms. Reier
states that on April 10, 1987, an article appeared in a local
newspaper which reported that Mr. Bee had entered into
a "managerial agreement" with Mr. Curtis, then general
manager of KOUS-TV,9 to build and manage KCTZ.
Moreover, she asserts that shortly thereafter, her husband
was contacted by an attorney representing Mr. Bee regarding
a possible joint venture to put KCTZ on the air,
requiring an immediate investment ofl00,000 to be used
to order equipment. In a declaration submitted in the
petition for an order to show cause, Mr. Reier avers that
he was told that, regardless of his decision, Mr. Bee would
soon "move the station" one way or another, and that
among those interested were principals of Big Horn.
Thereafter, the petitioner learned that an agreement had
been reached to sell KCTZ to Big Horn once the station
goes on the air, which agreement had not been disclosed
to the Commission allegedly to avoid restrictions on the
sale of a construction permit. Further, she alleges that
equipment for the station was to be ordered "only if
KOUS-TV principal Thom Curtis came up with the money
for it."
11. As to the construction of KCTZ, the petitioner
maintains that it was subsequently discovered that Big
Horn, its principals and/or its employees, had arranged for
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United States. Federal Communications Commission. FCC Record, Volume 3, No. 14, Pages 4085 to 4354, July 5 - July 15, 1988, book, July 1988; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc1623/m1/256/: accessed March 28, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.