Before the Federal Communications Commission Washington, D.C. 20554

In re Applications of Gore-Overgaard Broadcasting, Inc. (Assignor) and ) File No. BAL-990312GH

Word Broadcasting Network, Inc. (Assignee)

For Assignment of License of Station WNAI (AM), Newburg, Kentucky

MEMORANDUM OPINION AND ORDER

Adopted: June 23, 1999 Released: June 23, 1999

By the Chief Mass Media Bureau.

1 . The Commission, by the Chief Mass Media Bureau, acting pursuant to delegated authority, has under consideration: (1) the above-captioned application for assignment of license of WNAI (AM), Newburg, Kentucky, from Gore-Overgaard Broadcasting, Inc. ("Gore") to Word Broadcasting Network, Inc. ("Word"); and (2) a related request for a permanent waiver of the Commission©s one-to-a-market rule, which restricts common radio and television station ownership in the same market.1 Both the application and the waiver request are unopposed. For the reasons set forth below, we grant the assignment application and a permanent waiver of our one-to-a-market rule.2

2. Word is the licensee of UHF television station WBNA-TV, (Channel 21, a WB network

1 Section 73.3555(c) of the Commission©s rules prohibits the common ownership of radio and television stations in the same market if the 2 mV/m contour of an AM station or the 1 mV/m contour of an FM station encompasses the entire community of license of a television station or, conversely, if the Grade A contour of a television station encompasses the entire community of license of an AM or FM station. See 47 C.F.R. § 73.3555(c).

2 The Commission has delegated to the Mass Media Bureau authority to act on uncontested one-to-a-market waiver requests involving stations in the top 100 television markets and that present no new or novel issues. Louis C. DeArias, Receiver, 11 FCC Red 3663, 3667 (1996); see also Review of the Commission©s Regulations Governing Television Broadcast Ownership, Second Further Notice ofProposed Rulemaking, MM Docket Nos. 91-221 and 87-8. 11 FCC Red 21655, 21689 n.130 (1996) ("Second Further NPRM"). The instant waiver request presents no new or novel issues, and the stations involved are located in the Louisville Designated Market Area ("DMA"), which is ranked 48th in the country. 9532 mmi««imi______f>A QO combination because the Grade A contour of WBNA-TV entirely encompasses the community of license of WNA1 (AM). Accordingly, Word has requested a permanent waiver of the Commission©s one-toa- market rule to permit common control of WBNA-TV, and WNAI (AM) in the Louisville Designated Market Area ("DMA"), ranked 48th in the country.

One-to-a-Market Waiver Showing

3. Word bases its request on the one-to-a-market waiver standards adopted in the Second Report and Order in MM Docket No. 87-7, 4 FCC Red 1741 (1989) ( "Second Report and Order"), recon. granted in part and denied in part, 4 FCC Red 6489 (1989) ("Second Report and Order Recon"). Under these criteria, the Commission presumptively favors waiver requests involving station combinations serving the top 25 markets where there are at least 30 separately owned, operated, and controlled broadcast licensees or "voices" after the proposed combination ("top 25 market/30 voice standard").4 The Commission also favors waiver requests involving "failed" broadcast stations, i.e. stations that have not been operating for a substantial period of time (e.g.. four months), or that are in bankruptcy proceedings. Otherwise, the requests must be evaluated under a case-by-case approach. See 47 C.F.R. § 73.3555, n.7.

4. We shall review Word©s waiver request under the case-by-case standard because, Louisville, Kentucky is the 48th largest DMA in the country and there is no explicit claim that WNAI (AM) is a "failed station," as defined by the Commission. Under the case-by-case standard, the Commission makes a public interest determination based upon the following five criteria: (1) the potential public service benefits that will arise from the joint operation of the facilities involved, such as economies of scale, cost savings and programming and service benefits; (2) the types of facilities involved; (3) the number of media outlets owned by the applicant in the relevant market; (4) the financial difficulties of the stations involved; and (5) the nature of the relevant market in light of the level of competition and diversity after joint operation is implemented. Second Report and Order, 4 FCC Red at 1753-54. In enunciating the five factors to be considered under the case-by-case standard, the Commission noted that not all five factors must be satisfied in each case, but rather the overall consideration of these factors must weigh in favor of granting the waiver request. Second Report and Order Recon, 4 FCC Red at 6491. In support of its waiver request, Word submits a showing which addresses each of the five factors.

5. Public Service Benefits of Joint Operation. Word contends that the proposed combination of WNAI (AM) and WBNA (TV) will create efficiencies that would result in annual savings of approximately $100,000 in the first year alone. Word declares that with these savings, it will be able to operate the stations more productively, provide improved programming and service to the public and compete more effectively in the market. Specifically, Word states that these savings will result from common operation of WNAI (AM) and WBNA-TV from one facility with centralized management. Additionally, Word states that these savings will enable Word to upgrade WNAI (AM) equipment to digital. Through this proposed combination, Word also anticipates cross-sales and cross-promotion of its stations. Moreover, Word asserts that the local community will benefit from the economic efficiencies

4 Word states that because the proposed combination is located in the 48th DMA, it "falls within the confines of the congressional mandate for the Commission to extend its policies to the top 50 markets and should be presumptively favored." Pursuant to the statutory directive "to extend its [one-to-a-market] waiver policy to any of the top 50 markets, consistent with the public interest, convenience and necessity," under the Telecommunications Act of 1996, Pub. L. No. 104-104, § 202(d), 110 Stat 56 (1996), the Commission is considering a proposal to implement extension of the waiver policy in the Second Further Notice of Proposed Rulemaking, 11 FCC Red at 21685. Thus, the application of the Commission©s presumptive waiver policy is inappropriate here.

9533 fmnmimioafinng f nminigginn___ __ I\A QQ-1229 created by the proposed combination through improved programming, and increased programming addressing issues of local concern.

6. Types of Facilities. Word states that WNAI (AM) is a Class B AM station with a maximum daytime power of 1.3 kW and a maximum nighttime power of 450 W. Word states that WBNA-TV operates on UHF channel 21 with 2000 kW peak visual and an antenna height above average terrain ("HAAT") of 750 feet. Word contends that WNAI (AM) would compete with 13 AM and 20 FM stations in the market that have comparable if not superior signals, including WHAS (AM), a 50,000 watt clear channel station. Word indicates that there are 8 licensed television stations in the market, including 2 network affiliated VHF stations and 6 UHF stations, each with superior facilities and greater geographic coverage than WBNA-TV.

7. Other Media Outlets. Following consummation of the proposed assignment, Word will have a controlling interest in one TV station, one AM station and an attributable interest in one non-commercial educational FM station. Word does not own other broadcast or media interests in this market.

8. Economic Status. While Word does not contend that WNAI (AM) is a "failed station" as defined by the Commission, it claims that the AM station has had consistent losses for the last year and a half. Word has submitted a statement that asserts that WNAI (AM) had losses of $66,786 for eight months in 1997, $107,040 for 1998, $22,984 for the first three months of 1999. The total operating loss for WNAI (AM) during this time was $196,810.5

9. Competition and Diversity in the Market. The final factor in Word©s showing is the nature of the relevant market in light of the Commission©s concerns about diversity and competition. Word asserts that Louisville is a large and diverse market which would not be adversely affected by the proposed combination of WNAI (AM) and WBNA-TV. Word indicates that there are 8 commercial television stations in the Louisville market licensed to 5 separate owners, and thirty-three radio stations licensed to 17 separate owners. Word asserts that there will be 23 separately owned broadcast "voices" in the market following approval of the proposed combination. Additionally, Word emphasizes that there is abundant non-broadcast media in the Louisville market, including four daily newspapers, five weekly newspapers, various specialty publications, as well as a cable penetration rate of approximately 65 percent in the DMA.

Discussion

10. At the outset, we note that the pending television ownership proceeding, in which the Commission is considering eliminating or modifying the one-to-a-market rule, does not preclude consideration of Word©s request for a permanent one-to-a-market waiver. In the Second Further NPRM in the television ownership proceeding, we stated that waiver requests submitted pending resolution of the proceeding will be considered under the current criteria for evaluating such requests. Second Further NPRM, 11 FCC Red at 21689 n.130. Thus, the Second Further NPRM contemplates approval of permanent, unconditional waivers to allow radio-television combinations that do not propose common ownership of stations exceeding a combination of one television station, two AM stations and two FM stations, as long as the requested waivers are clearly consistent with Commission precedent. Id Word©s proposed combination of one television station and one AM station would not exceed these limits.

5 Letter from Harold W. Gore, Chairman and CEO, Gore-Overgaard Broadcasting to Michael Bader, Haley Bader and Potts, dated May 4, 1999.

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11. Public Service Benefits of Joint Ownership. As to the first criterion, the potential public service benefits of joint ownership, the Commission considers the public service benefits that could result from the proposed radio-television combination, such as projected economies of scale, cost savings, program and service benefits. Second Report and Order, 4 FCC Red at 1753. Word states that its acquisition of WNAI(AM) will create efficiencies resulting in significant cost savings and the potential for enhanced programming and other public service benefits. Word©s estimated annual savings of $100,000 will be realized through the combination of the operating facilities of WNAI (AM) and WBNA- TV. Word asserts that these savings will translate to public service benefits and programming improvements, including enhancement of WNAI(AM)©s equipment and increased programming addressing issues of local concern. Word further indicates that the proposed station combination will facilitate additional savings derived from cross-promotion. We have acknowledged that cross-promotion is a benefit of joint ownership. See, e.g., Swmyside Communications, Inc., 12 FCC Red 24443 (MMB 1997).

12. Types of Facilities. The second criterion in our analysis concerns the types of facilities that the merged entity will own in each of these markets. In this regard, we must "consider such factors as whether the proposed radio-television combination involves a UHF or VHP television station or an AM or FM radio station as well as the size or class of the stations involved." Second Report and Order, 4 FCC Red at 1753. The Commission©s interest in the strength of the technical facilities of the stations at issue reflects a continuing concern with the potential impact that the proposed station combination may have on diversity and competition in the affected market. See, e.g., Great American Television and Radio Co., Inc., 4 FCC Red 6347, 6349 (1989). Our independent analysis confirms that WNAI (AM) is a Class B AM station licensed to operate on 680 kHz with a maximum daytime power of 1.0 kW and nighttime power of .450kW. We have also confirmed that there is one Class A clear channel AM station, WHAS (AM) with a maximum day and nighttime power of 50,000, and 6 Class B AM stations with equal or greater facilities than WNAI (AM).

13. Word contends that WBNA (TV) is authorized to operate on channel 21 at 2000 kW maximum visual from an antenna at 750 feet HAAT. However, our independent analysis demonstrates that WBNA-TV is authorized to operate on channel 21 at 2000 kW maximum visual with an antenna of 732 feet HAAT. Further, our analysis confirms that there are 6 other UHF-TV stations in this market. Moreover, our analysis confirms that 3 of these UHF TV stations have equal or stronger technical facilities than WBNA-TV. In addition, the market includes 2 VHP stations that are network affiliates.

14. Thus, there are competing stations with comparable or superior facilities. Moreover, as discussed below, the Louisville market is served by a substantial number of competing stations that represent a significant number of independent voices.

15. Other Media Outlets. Under the third criterion, Word, will not own or control media outlets in the Louisville market other than WNAI (AM) and WBNA-TV. Through the interests of its Vice- President and Treasurer, Gregory A. Holt, Word will have an attributable interest in WJIE (FM), a non commercial educational station in the Louisville market.

16. Economic Status. With respect to financial conditions, under the fourth criterion, Word claims that WNAI (AM) has suffered operating losses since 1997. However, Word has not provided the Commission with sufficient documentation from which we can conclude that WNAI (AM) is entitled to consideration as a station experiencing financial difficulties. See, e.g., Engles Enterprises, FCC 99-60

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(released March 26, 1999).6 However, we previously indicated that not all five factors need be present to justify grant of a on-to-market waiver. Second Report and Order Recon., 4 FCC Red at 6491. We have granted a number of one-to-a-market waivers where there was no finding that any of the stations were in financial distress. See, e.g., Atlantic Morris Broadcasting, Inc., 10 FCC Red 1175 (1995); Henry Broadcasting Co., 11 FCC Red 1175 (1995); Louis C. DeArias, 11 FCC Red 3662 (1996); Aha GulfFM, Inc., 10 FCC Red 7750, 7751 (1995); Secret Communications Ltd., 10 FCC Red 6874 (1995).

17. Regarding Word©s media holdings under the final criterion, we find that the proposed combination will not create any undue concentration of ownership or control of the broadcast media in the Louisville market, the 48th largest DMA.7 We have verified that there are 6 UHF-TV and 2 VHF-TV stations licensed in the Louisville DMA. In addition, our independent analysis of Word©s showing indicates that there are at least 12 AM and 18 FM stations licensed to communities in the relevant television metro market.8 These 30 radio stations and 8 television stations will be licensed to at least 21 separate owners following consummation of Word©s acquisition of WNAI (AM). A wide variety of other media are available including cable systems, which reach 65 percent of total TV households,9 and, our independent analysis confirms at least 4 daily newspapers10 and at least 5 weekly newspapers and specialty newspapers." We conclude that this level of diversity is consistent with levels approved in previous permanent waiver requests. See, e.g. Triad Skywaves, Inc., 12 FCC Red 6102 (MMB 1997) (22 "voices" in 46th ranked market); Illinois Valley Broadcasting, Inc., 11 FCC Red 1302 (1996) (22 "voices" in 109th ranked market).

6 The Commission has advised applicants relying on this factor to submit "appropriate documentation, including a history of the station©s past financial losses and predictions of projected losses for the next several years." Second Report and Order at 4 FCC Red at 1760 n.103.

7 In order to determine the number of radio and television broadcast stations in the context of a one-to-a-market waiver, the Commission considers "the relevant TV metro market for radio stations and the relevant ADI [Arbitron Area of Dominant Influence] TV market for TV stations." Second Report and Order, 4 FCC Red at 1760 n. 101. However, because Arbitron no longer compiles ADI data, we will accept instead Word©s showing using the Nielsen DMA in determining the number of broadcast "voices" at issue in its one-to-a-market waiver request. See Media/Communications Partners L.P., 10 FCC Red 8116 n.3 (1995); see also Review ofthe Commissions Regulations Governing Television Broadcast Ownership, MM Docket Nos. 91-221 and 87-8, 10 FCC Red 3524, 3539 n.59 (1995).

8 Word©s showing lists WCND(AM), Shelbyville (Shelby County), WTHQ(FM), Shelbyville (Shelby County), which are not in the Louisville Metro Market. In addition. Word Lists WSFR(FM), a station that, according to Commission records, is not operating. Thus, WSFR(FM) is not counted for purposes of our analysis of competition and diversity. See Second Report and Order, 4 FCC Red 1751 n.86.

9 Broadcast & Cable Yearbook 1998, p. C-4.

10 These include the following daily publications: The Courier-Journal, published by the Gannett Company, circulation 231,620, The Evening News, published by Community Newspaper Holdings, Inc., circulation 10,456, The Tribute, published by the American Publishing Company, circulation 9,541, The Madison Courier, published by Madison Courier, Inc., circulation 9,375. See Bacon©s Newspaper Directory. 1999.

1 © These include: The Louisville Defender. Shivelv Newsweek. The Voice Newspaper. Herald Leader, the Jewish Community Newspaper and The Record, the Roman Catholic Archdiocese of Louisville©s weekly publication. The Louisville Daily Sports News. Senior Life & Times, the Thrifty Nickel Wants Ad and various specialty publications. See Gore©s FCC Form 314 , Assignee©s Portion, Exhibit One.

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18. With respect to economic concentration and competition in the context of one-to-a-market waiver requests, our independent analysis indicates that WBNA (TV) gamers .72% of the TV advertising revenues, as reported in the BIA Publications, Inc.©s ("BIA") Television Master Access Database.12 Although the radio advertising revenue for WNAI would be reported in the Louisville BIA/Arbitron radio metre, BIA estimates that the station receives no advertising revenues. Thus, the combined radio- television advertising revenue share is .048%.

19. Moreover, we find that the parties are fully qualified. We conclude that grant of the permanent waiver to permit common ownership of WBNA-TV and WNAI (AM) in the Louisville market will result in economic efficiencies and public interest benefits without undue adverse effect on competition or diversity in the Louisville market. Based on the totality of circumstances, and our treatment of waiver requests in other similar size markets, we conclude that grant of the Word©s request for a permanent waiver of the one-to-a-market rule would be in the public interest.

20. Accordingly, IT IS ORDERED, that the request for waiver of the Commission©s one-to-a-market rule, 47 C.F.R. Section 73.3555(c), to permit common ownership of WNAI (AM) and WBNA-TV, Louisville, Kentucky, IS HEREBY GRANTED.

21. IT IS FURTHER ORDERED, that the above-captioned application to assign the license of WNAI (AM), Newburg, Kentucky, from Gore-Overgaard Broadcasting, Inc. to Word Broadcasting Network, Inc., IS HEREBY GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

vart Mass Media Bureau

BIA provides TV advertising revenue data based on 1998 revenue figures.

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