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.