Page 8


as it was then named, had the following properties: KTBC-AM-FM-TV in Austin ; 29% \(and licensee of KWTX-AM-TV, Waco, and 50% stockholder in the Brazos Broadcasting Co. \(the licensee of KBTX-TV, Bryan, Broadcasters, Inc. \(the licensee of KXIIholder in Victoria Broadcasters, Inc. \(the LBJ Co. also owned Music for Business, which held the Muzak franchise in the Austin area, as of this report. Employees at KTBC-TV have not been unionized. Kellam said in 1959 that he did not know of any attempts to unionize them during the preceding dozen years or so. Asked in 1959 if he had any policy on the subject of union labor, Kellam said “No.” “I don’t think any attempt has ever been made to organize them,” Lyman Jones, public relations director for the Texas AFL-CIO, states in Austin. According to a brief filed in the cable TV controversy in Austin, a balance sheet for KTBC-TV alone, dated Feb. 28, 1962, contained in KTBC’s FCC file, showed assets of $3,992,902.39, of which $965,289.78 represented “cash.” Under liabilities, the sheet showed $1,207,369.38, with “surplus and reserves” of $2,666,533.01. UNDER THESE CIRCUM-STANCES, Austin is ripe, indeed, for cable TV. The cable TV business consists of taking from the air and delivering to televiewers, usually for a flat monthly fee, TV programs that originate at regular stations but are not available to the cable TV customers otherwise. Austin, according to Cable TV of Austin, “is the largest city in the United States in which cable television is utilized as a principal means of obtaining reception of television signals.” The Johnson family’s interests were intimately involved in the coming of cable TV to Austin, just as they had been in the the establishment of the city’s only commercial TV station. Midwest Video of Arkansas first eyed the lucrative Austin TV market in 1957, when it asked the city council here for a permit to operate a cable TV system. On ######~####*#4444#~4~#* TEXAS SOCIETY TO ABOLISH CAPITAL PUNISHMENT P. 0. Box 8134 Austin, Texas 78712 Individual membership $ 2.00 Contributing membership $ 5.00 Sustaining membership $10 up tem~e~m# ,…~.4.#####* the same day KTBC-TV filed its own application for such a permit. KTBC-TV withdrew its application, a lawyer for Midwest Video said later, “when it was given the right by Midwest Video to participate in the venture at a later date, should it so desire.” Kellam, KTBC’s manager, told the FCC last fall that the 1957 buy half of Midwest’s cable TV operation use KTBC’s TV tower for ten years. Midwest Video then organized a subsidiary, Capital Cable Company, which advised the city council in 1963 that Texans who were “interested” in it included J. C. Kellam, Warren Woodward, and Donald S. Thomas, who are officers, directors, and stockholders in the Johnson family’s radioTV firm. Also “interested” in Capital Cable, the council was told, were Edward Clark and Frank Denius, members of the politically powerful Austin law firm of Clark, Thomas, Harris, Denius, and Winters. Clark is a close personal friend of the President’s. Despite Capital Cable’s application for a permit to establish cable TV for Austin televiewers, the project languished until late 1962, when other potential investors entered the picture and forced the council to take action. A group including the acting managing editor of the Austin daily paper applied for the cable TV franchise in October, 1962. Capital Cable activated its inert application, and two other firms entered the contest. Early last year, with the subject receiving avid attention in the local press, the council announced that it would award not one franchise, but an indefinite number. It also released 21 specifications applicants had to meet, and with a premium on acting fast, the attorney for Capital Cable immediately scribbled out an application for a contract. Political suspicions burgeoned, and representatives of at least two of the three other applicant companies indicated they suspected that the 21 points had been written with the acceptance of Capital Cable’s application in mind. Trueman O’Quinn, an Austin attorney, a member of the group with the local newspaper official, and a “Democrats for Eisenhower” kind of politician, muttered, as Capital Cable signed its contract with the city in an open City Council meeting, “Variety Magazine called it ‘Lady Bird’s gravytrain.’ The gravy train now has a cable connection, run by air and cables.” MARTIN ELFANT Sun Life of Canada 1001 Century Building Houston, Texas CA 4-0686 At first Southwestern Bell Telephone Co. announced that it would let only one company’s TV cable on each of its telephone poles. This seemed to give a Johnson-associated company a virtual monopoly of cable TV in the city, but the telephone company reversed its position under pressure from the council. Then it was that Campbell, who is a small businessman from Mineral Wells, informed the council that he wanted to apply, in the name of TV Cable of Austin, for a franchise to compete with Capital Cable.* The other three applicants retired from the field, leaving Campbell’s new firm to take on Capital Cable. Before either system could use the airways, an FCC permit was required. The FCC had adopted a policy that was being uniformly enforced that a condition to getting such a permit, a cable TV company had to agree not to duplicate simultane”a program broadcast by” the local TV station “when notified by the station in a timely manner.” Eager to get going, Campbell agreed; Capital Cable did not, and turned instead to the laying down of a cable system to distribute signals from KTBC’s TV tower. Capital Cable thus avoided FCC jurisdiction and did not come under the non-duplication ban. Campbell’s firm got a head-start, all right: Campbell says he has 1,700 signed-up customers today, and this is said to be more than Capital Cable has. But Capital Cable is advertising “total television,” and Campbell admits that he is losing some potential customers because of the FCC rule. Last August, Campbell’s Washington lawyer, John P. Cole, decided TV Cable should ask the FCC to release it from the condition on grounds that it constituted pre-censorship that was unconstitutional. After receiving a petition from TV Cable, Ben Waple, secretary of the FCC, wrote to the LBJ Co. as follows: *For more details on the earlier phases of Mrs. Johnson’s radio-TV interests, the reader is referred to the Observer’s two reports on the subject, “The Johnsons’ TV Interests” in the issue of Dec. 18, 1959, and, “LBJ-TV,” which appeared in the Feb. 7, 1963 issue. February 21, 1964 13 SUBSCRIBE OR RENEW THE TEXAS OBSERVER 504 West 24th Street Austin 5, Texas Enclosed is $5.00 for a oneyear subscription to the Observer for : Name Address City, State This is a renewal. This is a new subscription.