Federal Communications Commission FCC 96-494 Before the Federal

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Federal Communications Commission FCC 96-494

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

In re Applications of

INFINITY HOLDINGS CORP. OF ORLANDO (ASSIGNOR) and

COX RADIO, INC. (ASSIGNEE)

For assignment of the licenses of:

WHOO(AM), Orlando, Florida File Nos. BAL - 960711GE WMMO(FM), Orlando, Florida & BALH- 96071 IGF & WHTQ(FM), Orlando, Florida BALH-960711GG

AND

COX RADIO, INC. (ASSIGNOR) and

INFINITY HOLDINGS CORP. OF ORLANDO (ASSIGNEE)

For assignment of the licenses of:

WCKG(FM), Elmwood Park, Illinois & File Nos. BALH - 9607UGH WYSY-FM, Aurora, Illinois BALH-960711GI

MEMORANDUM OPINION AND ORDER

Adopted: December 26, 1996 Released: December 26,1996

By the Commission: 17813 Federal Communications Commission FCC 96-494

1. The Commission has under consideration: (1) the above-captioned applications to assign the licenses of WHOO(AM), WHTQ(FM) & WMMO(FM), Orlando. Florida from Infinity Holdings Corp. of Orlando ("Infinity/Orlando") to Cox Radio, Inc. ("Cox Radio"), a subsidiary of Cox Enterprises, Inc. ("Cox"); (2) the above-captioned unopposed applications to assign the licenses of WCKG(FM), Elmwood Park, Illinois and WYSY-FM, Aurora, Illinois from Cox Radio to Infinity; (3) a request by Cox for a permanent waiver of the one-to-a-market rule in Orlando; and (4) a Petition to Hold Applications in Abeyance filed by Press Broadcasting Co., Inc. ("Press") on September 19, 1996. 1 The petition addresses Cox©s proposed acquisition of a total of six radio stations in Orlando and one radio station in Daytona Beach. Florida as a result of both the instant transaction and Cox Radio©s pending applications to assume control of NewCity Communications, Inc. ("NewCity").2

2. The above-captioned applications represent a like-kind exchange of assets between Cox Radio and Infinity/Orlando. The parties are proposing to exchange two Chicago-area stations owned by Cox Radio for three Orlando stations owned by Infinity/Orlando. This like-kind exchange is related to a proposed transfer of control of Infinity Broadcasting Corporation ("Infinity") to Westinghouse Electric Corporation ("Westinghouse").3 WCKG(FM) and WYSY- FM are two of 43 stations that Westinghouse is proposing to acquire as a result of the transfer of control of Infinity.4 The Westinghouse/Infinity applications, with accompanying waiver requests, are premised, among other things, upon acquisition of the two Chicago-area stations that Infinity is hereby proposing to exchange with Cox.

1 Press initially filed a "Statement for the Record and Reservation of Right to Submit Petition to Deny or Further Comments" on September 4, 1996, the deadline for filing a petition to deny the applications filed July 25. 1996 to transfer control of NewCity Communications, Inc. ("NewCity") - licensee of 18 commercial radio stations and one translator station to Cox Radio. Three of the NewCity stations are licensed to Orlando and one is licensed to Daytona Beach, Florida. Press noted that Cox had not submitted its formal request for a one-to-a-market waiver in Orlando until August 16, 1996, and that Press had therefore not been given 30 days in which to evaluate and comment upon Cox©s waiver request.

Press is the licensee of WKCF(TV), Clermont. Florida, and WTKSfFM), Cocoa Beach. Florida, both of which are located within the Orlando DMA. Press filed an applieutiu:: to assign the license of WTKS to Paxson Broadcasting of Orlando L.P. on June 11, 1996 (File No. BALH-960611GU).

2 NewCity is the licensee of two AM stations and one FM station in Orlando. as well as one FM station in Daytona Beach. The applications that relate to Cox©s proposed acquisition of NewCity©s four Florida stations are as follows: WDBO(AM), Orlando (File No. BTC-960725GM); WWKA(FM), Orlando (File No. BTCH-960725GN); WZKD(AM), Orlando (File No. BTC-960725GW); and WCFB(FM), Daytona Beach (File No. BTCH-960725GX).

3 Applications were filed on July 22, 1996 to transfer control of Infinity Broadcasting Corporation to Westinghouse Electric Corporation (File Nos. BTC-, BTCH-, and BTCFTB- 960722GE through 960722A4).

4 The relevant pending applications to transfer control of Infinity to Westinghouse are: WCKG, Elmwood Park, Illinois (File No. BTCH-960722GW) and WYSY-FM, Aurora, Illinois (File No. BTCH-960722HA).

17814 Federal Communications Commission FCC 96-494

Summary

3. Cox, through a subsidiary, is the licensee of VHP television station WFTV (ABC, Channel 9), Orlando, Florida, a station whose Grade A contour encompasses Orlando and Daytona Beach. Because Cox Radio proposes to be the licensee of six Orlando radio stations and one Daytona Beach radio station as a result of both the above-captioned transaction and its pending applications to acquire the assets of NewCity, Cox Radio requests a permanent waiver of the Commission©s one-to-a-market rule.5 In addition to WFTV, Cox owns a non-attributable 47.5% stock interest in News-Journal Corp., which publishes the Davtona Beach News-Journal. a daily newspaper, in Daytona Beach.6 Cox also owns Cox Communications of Greater Ocala, Inc., a cable system serving Ocala, Florida, which is located in the Orlando-Daytona Beach- Melbourne Designated Market Area (DMA). In addition, Cox has entered into a local marketing agreement (LMA) with the permittee of unbuilt UHF television station WZWY (Channel 27), Orlando.7

4. Press objects to Cox©s ownership interests in the totality of media outlets contemplated in Cox©s waiver showing, including cable, newspaper, television and seven radio stations in the Orlando DMA. Press requests that the Commission refrain from acting upon the waiver request and the seven applications relating to radio stations that Cox Radio would own in Orlando/Daytona Beach until the Commission has had a chance to complete pending rulemakings that address issues such as the television duopoly rule and the one-to-a-market rule. However, we have stated that requests for waiver of the one-to-a-market rule submitted prior to resolution of our pending television ownership rulemaking proceeding would be processed pursuant to our current criteria for evaluating such requests, and that waiver requests that are granted, which are not clearly consistent with prior Commission precedent, would be granted conditioned on the

© 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.

6 A majority of the stock of News-Journal Corp. is owned by a single shareholder. See 47 C.F.R. Section 73.3555 note 2(b) ("No minority voting stock interest will be cognizable if there is a single holder of more than 50% of the outstanding voting stock of the corporate broadcast licensee, cable television system or daily newspaper in which the minority interest is held."). But see Further Notice of Proposed Rule Making in MM Docket Nos. 94-150, 92-51 & 87-154. FCC 96-436 (released November 7, 1996) ("Attribution Further Notice") (proposing to limit the single majority shareholder exemption by attributing the otherwise nonattributable equity and debt interests in a licensee that are held by a program supplier or same-market broadcaster/media owner if such equity and/or debt is greater than a specified benchmark).

7 Cox states that the permittee of television station WZWY, Reece Associates, Ltd., has experienced substantial FAA and local zoning problems respecting a tower site, that construction of the station has not yet commenced, and that no date for doing so has been established. See Opposition (to the Press Petition) filed by Cox Radio, Inc. and WCKG, Inc., on October 10, 1996.

17815 Federal Communications Commission FCC 96-494 outcome of that proceeding.8 Therefore, we wall not delay our approval of the Infinity/Orlando- Cox exchange pending conclusion of the rulemaking proceedings. Instead, for the reasons stated below, we will grant a temporary conditional one-to-a-market waiver in Orlando for acquisition by Cox of the three Infinity/Orlando radio stations, subject to the outcome in our ongoing rulemaking proceedings involving television ownership and the attribution of broadcast interests." See S.E. Licensee G.P.. FCC 96-464 (released November 27, 1996) (granting conditional, temporary waiver of one-to-a-market rule pending outcome of television ownership and attribution proceedings); Shareholders of Citicasters. Inc.. FCC 96-380 (released September 17. 1996) (granting temporary waivers of one-to-a-market rule pending outcome of television ownership proceeding). An additional reason for not delaying action on the above-captioned exchange is that permitting Cox to proceed with its planned like-kind exchange of stations with Infinity will facilitate our consideration of the proposed Westinghouse/Infinity merger now pending before the Commission, applications for which presumed prior Commission action on the Infinity/Orlando-Cox exchange. We will address Cox Radio©s request for a permanent waiver of the one-to-a-market rule in connection with its proposed ownership of the four additional radio stations in Orlando/Daytona Beach that it proposes to acquire from NewCity, as well as the Press petition addressed to ownership of all seven radio stations, at the time we consider the application to transfer control of NewCity to Cox Radio. 10 By our approval today, we do not signal any prejudgment of the pending Cox/NewCity applications.

5. After analyzing Cox©s ownership interest in the Davtona Beach News-Journal in light of our cross-interest policy, we will also grant the assignment applications for the three Infinity/Orlando radio stations conditioned on the outcome of our attribution rulemaking. This will allow the parties to go forward with the proposed like-kind exchange of assets, while at the same time ensuring that Cox©s ownership interests are subject to the same limitations as other group owners as a result of our pending television ownership, broadcast attribution, and radio- newspaper cross-ownership proceedings.

8 See Second Further Notice of Proposed Rulemaking in MM Docket Nos. 91-221 and 87-8, FCC 96-438 (released November 7, 1996) ("TV Ownership Second Further Notice"), para. 79.

9 See TV Ownership Second Further Notice: Attribution Further Notice.

10 We note that Press did not file a petition to deny Cox Radio©s applications to acquire the three Infinity/Orlando stations, which were filed on July 11, 1996. Cox Radio filed a request for a one-to-a-market waiver relating to all seven radio stations on August 16, 1996. Press filed a "Statement for the Record and Reservation of Right to Submit Petition to Deny or Further Comments" on September 4, 1996, captioning only the four NewCity applications. On September 19,1996, Press filed a "Petition to Hold Applications in Abeyance," captioning the four NewCity applications and the three Infinity/Orlando applications. Therefore, we will treat the Press petition as an informal objection directed at Cox Radio©s ownership of all seven stations, and we will defer consideration of the informal objection until we act upon the NewCity transfer of control applications. See 47 C.F.R. Section 73.3587.

17816 Federal Communications Commission FCC 96-494

Multiple Ownership Considerations

6. Cox will control two FM stations and one AM station in Orlando following consummation of the proposed transaction to acquire Infinity/Orlando©s three radio stations. The principal community contours of these three radio stations mutually overlap. Therefore, Cox has submitted showings to demonstrate its compliance with the limitations of our local radio ownership rules."

7. With respect to the one-to-a-market rule, Cox bases its request for a one-to-a-market waiver on the standards adopted in the Second Report and Order in MM Docket No. 87-7, 4 FCC Red 1741 ("Second Report and Order"), recon. granted in part, 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 remain at least 30 separately owned, operated and controlled broadcast licensees or "voices" after the proposed combination is consummated ("top 25 market/30 voice standard"). 12 The Commission also favors requests involving "failed" broadcast stations, that is, stations that have not been operating for a substantial period of time, e.g.. four months, or that are involved in bankruptcy proceedings. See 47 C.F.R. Section 73.3555 note 7. Waiver requests not eligible for consideration under either the "top 25 market/30 voice standard" or the "failed" station standard are evaluated under the more rigorous case-by-case standard, as set forth in the Second Report and Order.

8. Although Orlando-Daytona Beach-Melbourne, Florida is the 22nd largest DMA, according to Nielsen, Cox©s request must be evaluated under the case-by-case standard because the proposed transaction involves the common ownership of more than one same service radio station with a television station. 13 Under the case-by-case standard, the Commission makes a public interest determination based upon the following criteria: (1) the potential public service

1 © Assignment or transfer applications that will result in principal community contour overlaps between more than one commonly-owned radio station in the same service must include an exhibit demonstrating compliance with the local radio ownership rule, 47 C.F.R. Section 73.3555(a). Revision of Radio Rules and Policies. 7 FCC Red 2756, 2779 n.102 (1992), recon. granted in pan, denied in part. 7 FCC Red 6387 (1992).

12 The Commission has been directed to "extend its [one-to-a-market] waiver policy to any of the top 50 markets, consistent with the public interest, convenience, and necessity." See Telecommunications Act of 1996, Pub. L. No. 104-104, § 202(d), 110 Stat. 56 (1996). A proposal to implement this extension of our waiver policy is pending. TV Ownership Second Further Notice, para. 66.

13 We require evaluation of the waiver request under the case-by-case standard, regardless of the size of the market involved, because Cox©s proposed acquisition involves the ownership of same service radio stations with overlapping principal community contours. See Revision of Radio Rules and Policies (Recon.). 7 FCC Red 6387, 6394 n.40 (1992) (noting that consideration of one-to-a-market waivers under the case-by-case standard is appropriate where a transaction implicates the revised local radio ownership limits, pending possible revision of the one-to-a- market rule in television ownership proceeding under consideration). See also Moosev Communications. Inc.. 8 FCC Red 5247, 5247 (1993).

17817 Federal Communications Commission FCC 96-494

benefits of common ownership of the facilities, such as the 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) any financial difficulties involving the station(s); and (5) issues pertaining to the level of diversity and competition within the affected market. See Second Report and Order. 4 FCC Red at 1753-54. We also note that not all five of the factors mentioned are necessarily relevant in each case. See Second Report and Order Recon.. 4 FCC Red at 6491. In support of its request for a one-to-market waiver permitting common ownership of seven radio stations with WFTV(TV), Cox submits a showing which addresses each of the five case-by-case factors. At this time, we will consider only those portions of Cox©s waiver showing that are relevant to its ownership of the three Infinity/Orlando stations.

Waiver Showing

9. Benefits of Joint Operation. Cox asserts that numerous cost savings and operating efficiencies will result from its ownership of WFTV(TV) and the radio stations, and that public service benefits will be generated by that ownership. Cox estimates at least $423,000 in savings annually from common ownership of WFTV and all seven radio stations. Common ownership of WFTV and the radio stations will account for $187,000 in annual savings, while $236,000 is attributable to consolidation of radio station operations. Cox anticipates that it will be able to derive significant operational and cost efficiencies from centralizing the administration and certain sales, news and programming functions of the radio stations. In addition. Cox expects to obtain discounts on purchases ranging from major capital items to small supplies for WFTV and the radio stations, as well as group discounts on direct mail and outdoor advertising, promotional merchandise and audience research services. Cox states that WFTV and the radio stations will also be able to share technical expertise and to coordinate tower maintenance and inspections, as well as the use of consultants on issues such as tower load capacities.

10. Cox projects that in the area of programming, common ownership of WFTV and the radio stations will permit enhanced news coverage and public affairs programming at reduced costs. For example, WFTV would be in a position to simulcast major events such as town meetings, sporting events and political debates on one or more of the radio stations. Additionally, all stations would be able to share the product of radio and television news resources such as stringers, wire services and other news providers. Common ownership of the television and radio stations will also permit enhanced non-broadcast public service activities, according to Cox. Such activities include promoting charitable efforts and disseminating consumer information to the wide range of audiences attracted to the radio stations© differing formats.

11. Cox further asserts that common ownership will enable the stations to engage in joint recruitment of minority and female employees, and that common ownership could facilitate the development of a joint radio/television web site on the Internet. Cox claims that common ownership would also facilitate improvement of the technical facilities of AM station WHOO (presently licensed to Infinity) because of Cox©s financial resources and technical expertise. Cox reports that the station©s facilities are in need of substantial repairs and that WHOO is currently operating at variance from its authorized parameters pursuant to special temporary authority.

17818 Federal Communications Commission FCC 96-494

12. Other Media Outlets/Types of Facilities. Cox states that the facilities it proposes to own are comparable to many other stations in the Orlando market. VHP television station WFTV, an ABC affiliate, is one of 14 television stations (including three noncommercial stations) licensed to the Orlando-Daytona Beach-Melbourne DMA. 14 The station operates on Channel 9, with 316 kW authorized power, from an antenna height above average terrain (HAAT) of 1570 feet. There are two other network VHP stations in this DMA, and Cox states that parts of the market receive Grade B service from five other commercial VHP stations. Cox has an LMA with the permittee of WZWY(TV), Orlando, which is an unbuilt facility. See supra note 7.

13. WHOO is a Class B AM station operating at authorized power of 50 kW. WHTQ is a Class C FM station, operating at authorized power of 100 kW from an antenna 487 meters HAAT. WMMO is a Class C2 FM station, operating at authorized power of 38 kW, from an antenna 134 meters HAAT. According to Cox, there are a total of 38 AM radio stations with principal community contours that overlap those of the radio stations Cox proposes to co-own (including the NewCity stations that are the subject of separate applications), and WHOO is only one of 33 Class B AM stations in this market, including two other 50 kW AM stations. Cox asserts that there are a total of 23 FM stations in the same market, including nine other Class C stations,, four Class Cl stations and three other Class C2 stations. Cox adds that the Orlando DMA is highly competitive and diverse, and that it would be competing against other media group owners, including Paxson Communications, Clear Channel Communications, Press Broadcasting Co., Chancellor Broadcasting Co. and Pulitzer Broadcasting.

14. In addition to WFTV, Cox owns a cable system serving Ocala, Florida and has a non- controlling stock interest in a newspaper serving Daytona Beach. Cox©s cable system serves Ocala and portions of Marion County, Florida. Cox states that Ocala is located on the "fringe" of the Orlando DMA, outside WFTV©s Grade B contour, in compliance with 47 C.F.R. Section 76.501. According to an engineering map supplied by Cox, Ocala is located approximately 60 miles northwest of Orlando. As evidence that Ocala media do not compete directly with Orlando media, Cox points out that while television station WOGX-TV, Ocala, is physically located in the Orlando DMA, Nielsen assigns it to the Gainesville DMA for reporting purposes. Cox reports that its Ocala cable system serves less than 5% of all cable subscribers in the Orlando DMA. Cox notes further that some of the largest cable group owners are present in the Orlando DMA, including Cablevision Industries, TCI Cablevision and Time Warner.

15. Cox owns a 47.5% interest in News-Journal Corp., which publishes a daily newspaper in Daytona Beach, the Davtona Beach News-Journal. Cox maintains that this interest in nonattributable under the Commission©s ownership rules because a majority of the stock of News- Journal Corp. is held by a single shareholder. See 47 C.F.R. Section 73.3555 note 2(b). Cox also asserts that this interest was reviewed and approved by the staff as not violating the

Construction permits are outstanding for two additional commercial television stations.

17819 Federal Communications Commission FCC 96-494

Commission©s cross-interest policy in connection with Cox©s acquisition of WFTV in 1985. 15 Cox states further that because it is only a minority owner of News-Journal Corp., it has no control over the Davtona Beach News-Journal©s operations. As evidence that the newspaper does not compete directly with Orlando media, Cox cites to Circulation 96. which reports no circulation for the Davtona Beach News-Journal in Orange County, Florida (Orlando), while the Orlando Sentinel has a circulation there of 120.245.

16. Economic Status. Cox reports that neither WFTV nor the radio stations are in a state of financial distress. Cox notes again, however, that AM station WHOO©s facilities are in poor condition and will require extensive repairs so that the station can return to its authorized operations. Cox states that its acquisition of WHOO will permit substantially improved operations.

17. Competition and Diversity in the Market. Cox asserts that the Orlando-Daytona Beach-Melbourne DMA, which is the 22nd largest DMA in the country, is characterized by an unusually high degree of diversity. Cox states that the DMA includes 14 television stations (including three noncommercial stations), and that 21 out-of-market television stations (including six noncommercial stations) provide Grade B service to portions of the Orlando-Daytona Beach DMA. Additionally, 22 low power television stations are licensed to communities in the DMA. The Orlando Television Metro Market includes 76 radio stations, which Cox discusses in four submarkets: (1) the Daytona Beach Metro Market, which will have 18 radio stations licensed to 16 separate entities; (2) the Melbourne-Titusville-Cocoa Metro Market, which will have 23 radio stations licensed to 19 separate entities; (3) the Orlando Metro Market, which will have 28 radio stations licensed to 13 separate entities; and (4) the Lake County Market, which will have seven radio stations licensed to seven different entities. Cox notes that there are 55 cable systems in the Orlando-Daytona Beach DMA operated by 26 different owners. Cable penetration in the DMA is 77%. Additionally, Cox states that there are 14 Multichannel Multipoint Distribution Services operated by nine owners in the Orlando-Daytona Beach DMA. Cox asserts that the DMA is served by seven daily newspapers and 17 weekly newspapers, and that major magazines enjoy a significant circulation within the DMA.

Discussion

18. Radio Ownership - Orlando. We turn first to Cox©s compliance with our local radio ownership rules. Cox has submitted the required contour overlap showing which indicates that the relevant radio market contains 68 stations. Under our rules, in a radio market with 45 or

15 File No. BALCT-850712KF, authorization granted August 29, 1985. Cox submitted a showing in 1985 which indicated that a majority (52.5%) of the stock of News-Journal Corp. would be held by a single entity and voted by one individual. Additionally, Cox provided data to indicate that the Daytona Beach newspaper and the Orlando television station did not compete for the same advertising revenue: in 1984, only 2.1% of WFTV©s advertising revenue was attributable to Daytona Beach/Volusia County advertisers, while 88.83% of the News- Journal©s advertising revenue came from Daytona Beach/Volusia County advertisers, and less than 1% of the newspaper©s circulation was outside Volusia and Flagler counties. Orlando is in Orange County.

17820 Federal Communications Commission FCC 96-494 more commercial radio stations, a party may own, operate, or control up to 8 commercial radio stations, not more than 5 of which are in the same service. See 47 C.F.R. Section 73.3555(a)(l)(i), as amended by Broadcast Radio Ownership. FCC 96-90 (released March 8, 1996). 16 By the instant proposal, Cox proposes to own, operate, or control three commercial radio stations, only two of which are in the same service. Accordingly, the proposed transaction complies with the numerical local radio ownership limits. In addition, staff analysis indicates that the three radio stations combined garner 10.9% of radio advertising revenues in the market. This level does not raise a concern that Cox will be able to impede radio competition in the Orlando radio market. See infra, at paragraph 25, discussion of competition and diversity in the Orlando market following consummation of these proposed transactions. See also S.E. Licensee G.P., FCC 96-464 (released November 27, 1996); Shareholders of Citicasters. Inc.. FCC 96-380 (released September 17, 1996). We conclude that, with respect to local radio ownership, nothing in the record suggests that Cox©s acquisition of WHOO(AM), WMMO(FM) and WHTQ(FM) would be inconsistent with the public interest.

19. Television LMA. Before considering Cox©s request for a waiver of the one-to-a- market rule, we must determine what weight, if any, we should accord Cox©s existing LMA with WZWY(TV) in assessing that request. 17 Currently, television LMAs are not attributable to the brokering station, nor, taken alone, are they considered a "meaningful" relationship within the scope of the cross-interest policy. At present, therefore, we will not accord significance to Cox©s existing television LMA in evaluating its ownership waiver request. Our decision here in no way prejudges the issues in our ownership and attribution proceedings. We have proposed to attribute television LMAs to the brokering station where, as in Orlando, the stations involved are in the same market and the brokerage arrangement includes more than 15 percent of the brokered station©s weekly broadcast hours. Further Notice of Proposed Rulemaking in MM Docket Nos. 94-150, 92-51 and 87-154, FCC 96-436 (released November 7, 1996) (Attribution Further Notice), at para. 27. Further, we have proposed that any LMA which would be attributable for duopoly rule purposes under this approach ©©would also count in applying our other ownership rules, including, for example . . . the one-to-a-market rule (or radio-television cross-ownership rule)." Id. (footnotes omitted). And, while we have proposed to grandfather those LMAs such as the LMA here ~ that were entered into prior to November 5, 1996, the adoption date of the Second Further Notice of Proposed Rulemaking in .MM Docket Nos. 91-221 and 87-8, FCC 96- 438 (Television Ownership proceeding), (released November 7,1996), we have also indicated that we would "reserve the right... to invalidate an otherwise grandfathered LMA in circumstances that raise particular competition and diversity concerns, such as those that might be presented in very small markets." Id. at para. 88. Thus, if we establish final rules for attributing and grandfathering LMAs, we would also assess whether the class of transactions involving radio, television and LMA interests such as those involved in this case should be permitted to continue.

16 This order implemented the new local radio ownership limits adopted by Congress in the Telecommunications Act of 1996. Pub. L. No. 104-104, 110 Stat. 56 (1996).

17 There will be no immediate impact on competition or diversity associated with Cox©s LMA with permittee station WZWY(TV) because, as stated above, the station has not yet been constructed.

17821 Federal Communications Commission FCC 96-494

Because this is a pending issue, we will condition the one-to-a-market waiver we grant here on the ultimate result reached in the pending rulemaking proceedings in attribution and television ownership concerning the significance and the grandfathering of television LMAs. See S.E. Licensee G.P.. FCC 96-464 (released November 27, 1996), para. 12; REP WWBB G.P.. FCC 96- 463 (released November 27, 1996), para. 11.

20. One-to-a-Market Waiver. Cox has demonstrated that common ownership of the Orlando stations will create efficiencies resulting in cost savings and the potential for enhanced programming and service benefits. Specifically, Cox has shown that combined operation of WFTV and the seven radio stations it proposes to own (including the four NewCity stations) will result in a projected cost savings of at least $423,000 per year. While a significantly smaller sum is attributable to common ownership of WFTV and the three Infinity/Orlando stations ~ and Cox does not specify what that smaller sum is ~ it is reasonable to assume that some portion of the projected total savings will result from combined ownership of WFTV and the three radio stations, and that such portion is sufficient to warrant consideration of this factor in connection with Cox©s waiver request. Cox states that these cost savings will translate into public service and programming benefits in the form of improved newsgathering capabilities of the radio stations, as well as more widespread traffic and weather reporting. Cox has shown that common ownership will enable the stations to engage in joint recruitment of minority and female employees, and that it will facilitate improvement of the technical facilities of AM station WHOO as a result of Cox©s financial resources and technical expertise.

21. Regarding the second factor in our analysis, the types of facilities involved in the waiver request, we stated in the Second Report and Order that "we will consider such factors as whether the proposed radio-TV combination involves a UHF or VHF TV station or an AM or FM radio station, as well as the size or class of the stations involved." 4 FCC Red at 1753. Television station WFTV (VHF), is an ABC affiliate, competing with 14 other television stations (including three noncommercial stations) licensed to the Orlando DMA. 18 The station operates at 316 kW authorized power and competes against two other network VHF stations in the Orlando DMA. WHTQ is a Class C FM station, authorized to operate at 100 kW and WMMO is a Class C2 FM station, authorized to operate at 38 kW. These FM stations are only two of 27 FM stations in the Orlando-Daytona Beach Radio Market. 19 including nine other Class C stations, four Class Cl stations and three other Class C2 stations. WHOO is a Class B AM station operating at authorized power of 50 kW. This AM station is only one of 41 AM stations in the same market, 33 of which are also Class B AM stations, including two 50 kW AM stations. Although the facilities are significant that Cox proposes to own in Orlando, we find that comparable facilities do exist and that there is little danger that Cox will be able to dominate the

18 Construction permits are outstanding for two additional commercial television stations.

19 For the purposes of establishing that its proposed co-owned stations will compete against comparable facilities, Cox has compared its facilities to those in the market defined in accordance with Section 73.3555(a)(3)(ii) of the Commission©s Rules, the radio contour overlap rule. Most of those facilities are licensed to communities located within the Orlando Television Metro Market.

17822 Federal Communications Commission FCC 96-494 market based on the nature of its facilities. See Stockholders of CBS Inc.. 11 FCC Red 3733, 3772 (1995) (stating that the type and nature of facilities to be commonly owned must be evaluated against the backdrop of the nature of the relevant market).

22. With respect to the third factor, Cox already owns a cable system and has a nonattributable 47.5% stock interest in a newspaper in the Orlando-Daytona Beach-Melbourne DMA in addition to the broadcast facilities it is proposing to co-own. Cox has shown that its cable system serves less than 5% of all cable subscribers in the DMA, and that this cable system competes against major cable group owners. Furthermore, this cable system serves Ocala, which is located approximately 60 miles northwest of Orlando and approximately 60 miles west of Daytona Beach. Cox has indicated that WFTV©s Grade B contour does not overlap the service area of its Ocala cable system.20 Likewise, Cox©s non-cognizable minority interest in the Davtona Beach News-Journal does not violate any of our cross-ownership rules when considered with Cox©s other proposed ownership interests,21 nor does application of our cross-interest policy prohibit combined ownership of the Davtona Beach News-Journal and the three Orlando radio stations for a temporary period pending release of an order in our attribution rulemaking proceeding (which includes a re-examination of the need for the cross-interest policy). See Notice of Proposed Rule Making in MM Docket Nos. 94-150, 92-51 & 87-154, 10 FCC Red 3606, 3642 (1995) ("Attribution Notice©").

23. The cross-interest policy prevents individuals from having "meaningful" interests in two broadcast stations, or a daily newspaper and a broadcast station, or a television station and a cable television system, when both outlets serve "substantially the same area." See id. Non- attributable equity interests, including a minority interest in a corporation having a single majority shareholder, have been viewed as constituting a "meaningful" interest subject to the policy. Id. at 3643-45. See also Rov M. Soeer. FCC 96-258 (released June 14, 1996) (limiting exercise of Silver King Communications, Inc.©s option to acquire an equity interest in a competing broadcast licensee to one-third (33%) of the competitor©s equity where both Silver King and the competitor owned television stations in the Chicago market). Cox has shown that the Daytona Beach News- Journal is not widely circulated in Orlando, the community of license of WFTV and the three radio stations that Cox proposes to co-own. However, one of those stations, WHTQ(FM), has a 1 mV/m contour that encompasses Daytona Beach. While it is true that the staff approved Cox©s 1985 purchase of WFTV, whose Grade A signal encompasses Daytona Beach, our recent

20 See 47 C.F.R. Section 76.501 (a) ("No cable television system (including all parties under common control) shall carry the signal of any television broadcast station if such system directly or indirectly owns, operates, controls, or has an interest in a TV broadcast station whose predicted Grade B contour . . . overlaps in whole or in pan the service area of such system.").

21 See 47 C.F.R. Section 73.3555 note 2(b).

17823 Federal Communications Commission FCC 96-494 decisions to re-examine the cross-interest policy and to make changes in our attribution rules22 make it appropriate to refrain from consenting here to this radio-newspaper cross-ownership on a permanent basis. Therefore, we believe that the most prudent course would be to condition Cox©s newspaper and radio ownership interests on compliance with any rules or policies developed in the attribution rulemaking proceeding.^

24. Fourth, regarding the economic status of the stations involved in the proposed combination, none of the stations is experiencing financial difficulties. However, as we have previously indicated, not all five factors need be present to justify grant of a waiver. See Second Report and Order Recon.. 4 FCC Red at 6491; Great American Television and Radio Co.. 4 FCC Red 6347, 6349 (1989). We have also 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.. Louis C. DeArias. Receiver. 11 FCC Red 3662 (1996); Henrv Broadcasting Co.. 11 FCC Red 1175 (1995); Atlantic Morris Broadcasting. Inc.. 10 FCC Red 9495 (1995); Aha Gulf FM. Inc.. 10 FCC Red 7750 (1995); Secret Communications. Ltd.. 10 FCC Red 6874 (1995).

25. Finally, the fifth factor relates to the level of diversity and competition in the relevant market.24 Indicia of the level of diversity include the number of broadcast outlets, the number of separately-owned and operated "voices" in the market, and the presence of cable and non- broadcast media. The Orlando-Daytona Beach-Melbourne DMA is ranked 22nd in the country and, according to our independent analysis, the market will have 67 radio stations including 37 AM and 30 FM radio stations (Orlando Television Metro Market), and 14 television stations, licensed to 60 independent owners (including NewCity) in the Orlando DMA. Additionally, the DMA has substantial cable penetration, and numerous daily and weekly newspapers.

1 26. With respect to economic concentration and competition, our independent analysis indicates that Cox©s three radio stations will garner a 10.9% share of the radio advertising

22 For example, under our "Equity or Debt Plus" proposal in the Attribution Further Notice. Cox©s interest in the Davtona Beach News-Journal would become an attributable interest if the chosen benchmark for attribution of same-market media properties were 47.5% of equity or lower. The Attribution Further Notice proposes a benchmark of 33%. See Attribution Further Notice at para. 23. Such attribution, in the absence of an applicable grandfathering provision, would result in a violation of the radio-newspaper cross-ownership rule with respect to WHTQ(FM), whose 1 mV7m contour encompasses Daytona Beach. See 47 C.F.R. Section 73.3555(d).

23 Should the attribution proceeding render Cox©s newspaper-radio interests a violation of the ownership rules, we note that our pending radio-newspaper cross-ownership waiver policy proceeding may afford Cox a potential avenue of relief for that violation. See Notice of Inquiry in MM Docket No. 96-197, FCC 96-381 (released October 1, 1996). Nothing here, of course, would preclude Cox from seeking such relief in the future.

24 The relevant market for television is the DMA. See Media Communications Partners. L.P.. 10 FCC Red 8116, 8116-17 n. 13 (1995). The relevant market for radio is the television metro market. See Second Report and Order. 4 FCC Red at 1760 n.101.

17824 Federal Communications Commission FCC 96-494 revenue in the Orlando market,25 while WFTV garners 28.5% of television advertising revenue.26 Together, the television and radio stations receive a combined television and radio advertising share of 24%.27 Given the limited duration of the waiver, we do not believe that these figures are so significant as to raise a concern that diversity and competition in Orlando will be unduly affected for the waiver period.

27. We conclude, based on the record, that granting a conditional, temporary waiver of the one-to-a-market rule to permit common ownership of Stations WFTV(TV), WHOO(AM), WMMO(FM), and WHTQ(FM), Orlando, Florida, will not unduly affect competition or diversity in the Orlando market. See S.E. Licensee G.P.. FCC 96-464 (released November 27, 1996) (granting a conditional, temporary waiver of the one-to-a-market rule to Clear Channel in Memphis for a period of six months from issuance of Orders in pending television ownership and attribution proceedings); Shareholders of Citicasters. Inc.. FCC 96-380 (released September 17, 1996) (granting temporary waivers of one-to-a-market rule to Jacor in Cincinnati and Tampa for a period of six months from issuance of an Order in pending television ownership proceeding). While Cox will have substantial ownership interests in the Orlando-Daytona Beach-Melbourne DMA, it has shown that the market is highly competitive and diverse, and that its stations would be competing against other media group owners, including Paxson Communications, Clear Channel Communications, Press Broadcasting Co., Chancellor Broadcasting Co. and Pulitzer Broadcasting. Based on this and other factors, we do not believe that diversity in Orlando will be so adversely affected in the short run as to require denial of Cox©s waiver request. As Cox©s showing suggests and our own analysis confirms, many more than 30 independent broadcast voices will remain in Orlando after the proposed transactions. And, while Cox©s commonly owned facilities will be significant in technical terms, comparable competing facilities do exist. Moreover, there are economic efficiencies and program service benefits to be gained by the proposed transactions that support grant of a temporary waiver. Finally, granting a temporary waiver will facilitate our consideration of the request for consent to the transfer of control of Infinity to Westinghouse. Accordingly, we grant to Cox a waiver of the one-to-a-market rule in Orlando during the pendency of and subject to the outcome in our ongoing rulemaking proceedings involving television ownership and the attribution of broadcast interests. We also grant the assignment applications for the three Infinity/Orlando radio stations conditioned on the outcome of our attribution rulemaking. As stated above, we will address Cox Radio©s request for a permanent waiver of the one-to-a-market rule in connection with its proposed ownership

25 Figures based on data supplied by BIA Publications, Inc. Reported 1995 radio market revenue in Orlando is $64.2 million. Revenues attributed to waiver-related stations total $7.0 million: (1) WHOO - $800,000; (2) WHTQ - $2.1 million; and (3) WMMO - $4.1 million.

26 Reported 1995 television market revenue in Orlando is $191.5 million. Revenue attributed to Cox-owned WFTV is $54.6 million.

27 Combined share of television and radio advertising reflects the percentage of the total market revenues (television = $ 191.5 million and radio = $64.2 million) captured by the three radio stations and television station that Cox proposes to co-own in Orlando ($61.6 million).

17825 Federal Communications Commission FCC 96-494 of the four additional radio stations in Orlando/Daytona Beach that it proposes to acquire from NewCity, as well as the Press petition addressed to ownership of all seven radio stations, at the time we consider the application to transfer control of NewCity to Cox Radio.

28. Radio Ownership - Chicago. Finally, we turn to Infinity©s compliance with our local radio ownership rules. Infinity is the licensee of one AM station and two FM stations in Chicago: WJJD(AM), WJMK-FM and WUSN(FM). Following the proposed like-kind exchange of assets with Cox, Infinity will also be the licensee of WCKG(FM), Elmwood Park. Illinois and WYSY-FM, Aurora, Illinois, with a total of four FM stations and one AM station with overlapping contours in the Chicago area. Infinity has submitted the required contour overlap showing which indicates that the relevant radio market contains at least 17 stations. Under our rules, a party may own. operate, or control up to 6 commercial radio stations, not more than 4 of which are in the same service, if the market includes 15-29 commercial radio stations. See 47 C.F.R. Section 73.3555(a)(l)(iii), as amended by Broadcast Radio Ownership. FCC 96-90 (released March 8, 1996).28 Infinity proposes to own, operate, or control five commercial radio stations, only four of which are in the same service. Accordingly, the proposed transaction complies with the numerical local radio ownership limits. In addition, staff analysis indicates that the five radio stations combined garner 17.2% of radio advertising revenues in the market.29 This level does not raise a concern that Cox will be able to impede radio competition in the Chicago radio market. See S.E. Licensee G.P.. FCC 96-464 (released November 27. 1996); Shareholders of Citicasters. Inc.. FCC 96-380 (released September 17. 1996). We conclude that, with respect to local radio ownership, nothing in the record suggests that Infinity©s acquisition of WCKG(FM) and WYSY-FM would be inconsistent with the public interest.

ORDERING CLAUSES

29. Accordingly, IT IS ORDERED, That the Petition to Hold Applications in Abeyance filed by Press Broadcasting Co. on September 19, 1996, when considered as an informal objection, IS HEREBY DENIED to the extent that it relates to the grant of the above-captioned assignment applications of three radio stations from Infinity Holdings Corp. of Orlando to Cox Radio, Inc., and IS HEREBY DEFERRED to the extent that it relates to the grant of pending transfer of control applications for four radio stations from NewCity Communications, Inc. to Cox Radio, Inc.

30. IT IS FURTHER ORDERED, That the request for a waiver of the one-to-a-market rule, 47 C.F.R. Section 73.3555(c), to permit common ownership of Stations WFTV(TV),

28 This order implemented the new local radio ownership limits adopted by Congress in the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996).

29 Figures based on data supplied by BIA Publications, Inc. Reported 1995 radio market revenue in Chicago is $328.3 million. Revenues attributed to stations Infinity will own total $56.4 million: (1) WCKG(FM) - $10.5 million; (2) WJJD(AM) - $2.5 million; (3) WJMK-FM - $15 million; (4) WUSN(FM) - $23.1 million; and (5) WYSY-FM - $5.3 million.

17826 Federal Communications Commission FCC 96-494

WHOO(AM), WMMO(FM), and WHTQ(FM), Orlando, Florida, IS HEREBY GRANTED, subject to the outcome in the pending television ownership rulemaking proceeding, Second Further Notice of Proposed Rulemaking in MM Docket Nos. 91-221 & 87-8, FCC 96-438 (released November 7, 1996), and in the pending broadcast attribution proceeding, Further Notice of Proposed Rulemaking in MM Docket Nos. 94-150, 92-51 and 87-154, FCC 96-436 (released November 7, 1996). Should divestiture be required as a result of those proceedings, Cox is directed to file an application for Commission consent to sell the necessary station(s) within six months from the release of the final Orders in those proceedings.

31. IT IS FURTHER ORDERED, That, having found the applicants fully qualified,30 the above-captioned applications to assign the licenses of WHOO(AM), WHTQ(FM) & WMMO(FM), Orlando, Florida from Infinity Holdings Corp. of Orlando to Cox Radio, Inc. ARE GRANTED, subject to the outcome in the pending broadcast attribution proceeding, Further Notice of Proposed Rulemaking in MM Docket Nos. 94-150, 92-51 and 87-154, FCC 96-436 (released©November 7, 1996). Should divestiture be required as a result of that proceeding, Cox is directed to file an application for Commission consent to sell the necessary station(s)/newspaper within six months from the release of the final Order in that proceeding.

32. IT IS FURTHER ORDERED, That, having found the applicants fully qualified, the above-captioned application to assign the license of WYSY-FM, Aurora, Illinois from Cox Radio, Inc. to Infinity Holdings Corp. of Orlando IS GRANTED, and the above-captioned application to assign the license of WCKG(FM), Elmwood Park, Illinois IS GRANTED without prejudice to whatever further action the Commission may deem appropriate with respect to pending

30 In the pending Westinghouse/Infinity merger, referenced above, issues were raised concerning Infinity©s qualifications to be a Commission licensee. With respect to alleged violations of federal law governing indecent broadcasts, the Commission has previously determined that Infinity©s apparent misconduct with respect to indecent programming in the past does not disqualify it as a Commission licensee. KLUV(FM). 10 FCC Red 4517, 4519 (1995); KRTH(FM). 9 FCC Red 7112 (1994), recon. denied 10 FCC Red 9504 (1995). Additionally, under the terms of an agreement settling enforcement proceedings relating to broadcasts aired by Infinity and its subsidiaries, the Commission agreed to expunge past determinations that resulted in the issuance of Notices of Apparent Liability for indecent programming and complaints pending as of September 5, 1995, from Infinity©s record for all purposes, including any future qualifications issue or future licensing proceeding or future transfer of control or assignment of license or permit. See also Sagittarius Broadcasting Corp.. 10 FCC Red 12245, 12250 (1995). We also note, however, that indecency complaints are currently pending against Infinity that are not within the scope of the settlement. Our preliminary review of these complaints indicates that they raise no substantial and material question of fact concerning Infinity©s qualifications to be a Commission licensee. Our action here, however, is without prejudice to whatever further action, if any, the Commission may deem appropriate with respect to the pending indecency complaints. A separate issue regarding Infinity©s qualifications raised by Alexander J. Serafyn and the Ukrainian Congress Committee of America, Inc., concerns alleged ex parte contacts made by Infinity in connection with the pending Westinghouse/Infinity merger. We have thoroughly reviewed the matter and find that their allegations are unsubstantiated and fail to raise a substantial and material question of fact concerning the ex pane rules.

17827 ______Federal Communications Commission _____ FCC 96-494 indecency complaints concerning material broadcast on WCKG(FM).31

FEDERAL COMMUNICATIONS COMMISSION

William F. Caton Acting Secretary

31 There are pending indecency complaints against Cox as the licensee of WCKG(FM) involving material broadcast on August 7, 1996. Our preliminary review of these complaints indicates that they raise no substantial and material question of fact concerning Cox©s qualifications to be a Commission licensee. Our action here, however, is without prejudice to whatever enforcement action the Commission may deem necessary with respect to the pending complaints concerning material aired on WCKG(FM) on August 7,1996, during the Howard Stern Show.

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