Evening star., 1939-05-21
F. {. T.. Acts 10 End
Lease Provision Of
Radio Stations
Oppose Coses Whereby
Plant Can Be Returned
To Original Assienor
By WILLIAM ]. WHEATLEY.

Leasing of radio stations by a
Ncensee to another for a period
of years with contract provision
that it be returned to the original
assignor at the conclusion of the
lease period has been halted by
a far-reaching policy decision just
handed down by the Federal Com
munications Commission.
BY such lease arrangements. the
commission said, persons or corpora
tions holding broadcast station
licenses are in position to estab-
lish themselves indefinitely in con-
troll of particular station; that is,
they are able to put themselves in
the same position at the expiration
of the lease as if they had continued
to operate the station during the
lease period.
The ruling was made In the case
OF the Alabama Polytechnic Insti-
tute, University of Alabama and
Alabama College which sought to
assign the license of Station WAPI
to the Voice of Alabama, Inc, for
q period of Is years at monthly
rental of $1,000 The contract con-
tanned provision that at the end
of the lease period the assignee
was to cooperate in having reas-
signment made to the schools. An
examiner recommended approval
OF the assignment.
The commission said that in a
growing number of cases licensees
of broadcast stations are applying
to the commission to permit assign
ment of license to some other per-
son who proposes to lease the equip
ment of such licensee for a period
of years and agrees to pay rental
for such equipment. Usually, the
commission added, this rental is
disproportionate to the cost of lease
of physical facilities.
Furthermore, at the expiration
of the lease, the original licensee
will apply for reassignment of the
station license.
Under such an arrangement, the
opinion said, persons holding licenses
are enabled to lease their station
equipment for period of years,
and then re-enter and obtain again
license to operate a station. A.
though, it said, it is true that at
the expiration of a lease he license
can be reassigned only to the origI-
nal licensee with the approval of
the F. C. c., the commission is not
authorized to withhold its approval
when an application for assignment
of license is made if the granting
Of such application is in the public
interest.
I'VE do not consider it in the pub
lie interest" the commission de-
clared, Ito permit practice to con-
tinue which has the effect of per-
mitting existing broadcasting IL
censees who disassociate themselves
from the operation of their stations
for period Of years to be in the
same position as those who continue
to operate their stations. We be-
lieve that when an existing licensee
divests himself of his license by VOL
untary assignment, he should be in
the same position as any other per-
son who does not possess such a
license
The commission said specifically
1t did not mean to imply that a
licensee who assigns his license with
the approval of the commission is
thereafter ineligible to receive a
license. But it added:
I'VE do think that it is not in the
public interest to permit a licensee
to use the fact that he has a license,
and is. therefore, in a unique bar
gaining position, as basis for re-
quiring a commitment to reassign
the license to him from his assignee ;