THE DECISION of the Federal Communications Commission to strip RKO General, Inc., of three television licenses has been accurately described by broadcast executives as "shocking." But whether it is also "abominable" -- the other term being widely applied -- is something else.
The commission decided Thursday that certain corporate activities of RKO and its parent, General Tire, make it unfit to hold licenses in Boston, New York and Los Angeles. Unless the commission changes its mind about the seriousness of the activities or its decision is reversed by the courts, RKO seems likely to lose 12 other broadcast licenses as they come up for renewal. This unprecedented action against a major broadcaster has sent ripples throughout the radio-TV industry; a few other companies are particularly worried because their licenses are under attack on somewhat similar grounds.
The charges made against RKO and General Tire are quite serious as corporate misdeeds go. They include, on General Tire's part, improper domestic political contributions, overseas bribes and defrauding of affiliated companies. RKO on its own is said to have filed false financial reports with the FCC, as well as other material designed to mislead the commission about the alleged wrongdoings of General Tire. The two companies are said to have joined in an attempt to prevent the commission from learning about General Tire's illegal activities and, in the late 1960s, to have tried to pressure other companies into placing advertising on RKO's stations as a condition of doing business with General Tire.
If these allegations are true, and the evidence placed before the FCC suggests they are, the commission was justified in its action. Those who hold broadcast licenses are required by law to be trustworthy and of good character. There would be little whimpering if an individual lost a license for the activities RKO and General Tire are said to have engaged in. Because the law often treats a corporation as if it were a person when that is beneficial, it should not act differently when that is painful.
The argument that punishing RKO for the wrongdoing of General Tire is like punishing a son for his parent's misdeeds misses the point. RKO is controlled by General Tire, and the form of corporate ownership by which this is accomplished should be irrelevant. Acceptance of the idea that a subsidiary is something other than an arm of its parent corporation would open the way for all kinds of corporate irresponsibility.