CBS Inc. sent a letter to Federal Communications Commission Chairman Mark S. Fowler yesterday, charging that reports indicate that the commission's review of Ted Turner's hostile takeover bid lacks objectivity.
The Washington Post reported on Saturday that FCC sources said the commission plans to give Turner interim approval to proceed with his takeover attempt. While the approval would not be final, it would allow Turner to begin purchasing CBS shares before he receives final FCC approval, which is not expected before some time in September. Among complaints outlined in the letter was that, although CBS won't file its response to Turner's request for interim approval until Wednesday, at least one commission member apparently has made up his mind.
"I was extremely concerned to read . . . that, according to an FCC official, the commission plans to permit Turner Broadcasting to use a voting-trust technique in its effort to take over CBS," the letter from CBS General Counsel George Vradenburg III said. "In CBS' judgment, such a statement . . . represents a serious departure from appropriate professional decorum expected of a federal regulatory agency."
"Along with other unfortunate public statements by commission officials, this report creates the appearance that the FCC's handling of Turner's takeover bid lacks both fairness and objectivity. . . . Contrary to the conclusions of an unnamed FCC official in The Post, it is far from 'obvious' that an interim authorization would be lawful or appropriate here," the letter said.
CBS also urged the FCC to deny Turner's attempt to block the recently announced CBS stock-buyback plan. Turner has said the CBS stock buyback plan violates the law by transferring control of the company without prior FCC approval.
The commission must approve the transfer of broadcast licenses held by CBS for Turner to proceed with his bid. He has said his current bid for the company would not be viable if CBS completes its stock buyback plan. The reason is that the CBS plan restricts the amount of debt the company can have on its books.