Federal Communications Commission FCC 96-395

Before the Federal Communications Commission Washington, D.C 20554

In re Applications of )

JOHN H. PHIPPS, INC. ) (Assignor) ) and ) File No. BALCT-960116IA

WCTV LICENSEE CORP. ) (Assignee) )

For Consent to the Assignment ) of License of Station ) WCTV(TV), Thomasville, Georgia ) and )

KNOXVILLE, CHANNEL 8 LIMITED ) PARTNERSHIP ) (Assignor) ) and ) File No. BALCT-960116IB

WKXT LICENSEE CORP. ) (Assignee) )

For Consent to the Assignment ) of License of Station ) WKXT-TV, Knoxville, Tennessee )

MEMORANDUM OPINION AND ORDER

Adopted: September 27, 1996 Released: September 27, 1996

By the Commission:

1. The Commission has before it for consideration the above-captioned applications seeking consent to the assignment of license of station WCTV(TV) (CBS), Channel 6, Thomasville, Georgia, from John H. Phipps, Inc. (Phipps) to. WCTV Licensee Corp., a subsidiary of Gray Communications System, Inc. (Gray); and an application for consent to the assignment of license of WKXT-TV (CBS), Channel 8, Knoxville, Tennessee, from Knoxville, Channel 8 Limited 13053 Federal Communications Commission FCC 96-395

Partnership, a subsidiary of Phipps, to WKXT Licensee Corp., a subsidiary of Gray.- Gray is also the licensee of WALB-TV (NEC), Channel 10, Albany Georgia and WJHG-TV (NEC), Channel 7, Panama City, Florida, Because the Grade B contour of WCTV(TV) overlaps with those of both WALB-TV and WJHG-TV, the applicant seeks temporary, six-month waivers of the Commission©s television duopoly rule, 47 C.F.R. §73.3555(b), which proscribes common ownership of television stations with overlapping Grade B contours, to permit it time in which to sell WALB-TV and WJHG-TV.1

2. Petitions to deny the application were timely filed by the licensees of three television stations which compete with WCTV(TV): Ashling Broadcast Group, Inc. (Ashling), the licensee of station WPGX-TV, Panama City, Florida; General Management Consultants, Inc., the licensee of station WTLH(TV), Bainbridge, Georgia; and SGA Associates, Inc., the licensee of station WFXL(TV), Albany, Georgia. General Management Consultants and SGA Associates subsequently filed separate requests for withdrawal of their petitions.2

3. After review of the application and the petitions to deny, we find that grant of the requests for temporary, six-month waivers of the duopoly rule is warranted. Because Gray has pledged to divest of both WALB-TV and WJHG-TV, approval of these waiver requests should ultimately result in the break-up of the existing WALB-TV/WJHG-TV duopoly and the existing The Albany Herald/WALB-TV newspaper-broadcast combination. The brief impact on diversity and competition resulting from the temporary waivers is outweighed by the permanent public interest benefits which will ultimately result from these divestitures.

PROCEDURAL MATTER

Background

4. On January 16, 1996, Phipps and Gray filed FCC Form 314 assignment applications.

1 Gray©s Albany and Panama City stations, whose Grade B contours slightly overlap, already operate under a permanent waiver of the duopoly rule. See Herald Publishing Co. (WALB-TV), 6 FCC 2d 631 (1967). Additionally, we note that Gray owns The Albany Herald, in addition to WALB-TV, pursuant to a waiver of the newspaper- broadcast cross-ownership rule, 47 C.F.R. §73.3555(d). See WALB-TV, Petitions for Waiver of Section 763.35, 73.240 and 73.636 of the Commissions Rules, FCC 79-705, released October 25, 1979, recon. granted, 77 FCC 2d 54(1980). Gray also owns WYMT-TV, Hazard, Kentucky. Although there is some predicted Grade B overlap between that station and WKXT-TV, our engineering analysis confirms the engineering exhibit submitted by Gray demonstrating that, after considering the nature of the intervening terrain, no actual overlap exists. Therefore, common ownership of both stations does not contravene 47 C.F.R. Section 73.3555(b).

2 We have reviewed the issues raised in these two-page petitions in which petitioners note their support for certain issues raised in the Ashling petition, and find, as we do with respect to the Ashling petition, as discussed below, that they do not present any substantial and material questions of fact warranting further inquiry.

13054 Federal Communications Commission FCC 96-395

Exhibit A to those applications described the assignment as "two separate but interrelated transactions." The first transaction, according to Exhibit A, was to be the acquisition by an intermediary, Media Acquisition Partners, L.P. (MAP) of all of the stock of Phipps, followed by ©©certain internal corporate reorganisation transactions," and second, the "immediate assignment" of the licenses and other assets to Gray. Included in the applications were copies of: (1) the executed Stock Purchase Agreement between the shareholders of Phipps and MAP for all of the issued and outstanding common stock of Phipps; (2) the executed Preferred Stock Purchase Agreement between the shareholders of Phipps and MAP for all of the issued and outstanding preferred stock of Phipps; (3) the executed Letter Agreement between MAP and Gray for Gray©s acquisition of the two television stations and other selected assets; and (4) an unexecuted draft Asset Purchase Agreement between MAP and Gray.

5. Ashling filed a petition to deny the assignment of WCTV(TV), in which it contended, inter alia, that Section 310(d) of the Communications Act of 1934, as amended, requires the filing of an FCC Form 315 for the transfer of control of Phipps to MAP, followed by one or more FCC Form 316s for the internal corporate reorganizations, and then the filing of a Form 314 application seeking assignment of license of WCTV(TV) to Gray. The applications now pending, asserts Ashling, should therefore be returned without further consideration.

6. Additionally, with respect to the pending assignment applications, Ashling argues that they lack information, such as a completed and executed Asset Purchase Agreement between MAP and Gray, a more detailed description of the series of transactions than is contained in Exhibit A, the financial and legal qualifications of MAP, and the nature of the internal corporate reorganizations proposed. In sum, Ashling contends that although Gray is the contemplated ultimate holder of the licensee of WCTV(TV), MAP could "end up holding [the license] permanently."

7. In response, Gray and MAP disputed Ashling©s contentions. Gray nevertheless subsequently submitted several amendments revising its application, culminating with the submission of an amendment on July 5, 1996 that included, inter alia, a copy of an Agreement Regarding Transfer of FCC Licenses, between Phipps and MAP. That Agreement provides that consummation of the first stage of the transaction cannot occur until the Commission approves the pending application contemplating an ultimate assignment to Gray. Additionally, Gray has revised Section 1.04 of the Asset Purchase Agreement, between MAP and Gray, to state that the closing of that agreement "shall occur immediately following the closing of both the Stock Purchase Agreement and the Preferred Stock Purchase Agreement, and in no event later than ten (10) minutes thereafter." Similarly, revisions to Sections 1.06, 8.15 and 9.09 of the Stock Purchase Agreement now provide for the immediate pass-through of Phipps to Gray through MAP. While served with a copy of the July 5 amendment, Ashling did not respond.

Discussion 8. Section 310(d) of the Communications Act provides that "[n]o station license, or any rights thereunder, shall be transferred, assigned... directly or indirectly, or by transfer of control of any corporation holding such permit or license, to any person except upon application the

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Commission and upon rinding by the Commission that the public interest, convenience, and necessity will be served thereby." 47 U.S.C. §310(d). In the past applicants, such as the ones before us, have filed single long-form assignments, FCC Form 314, which involve an instantaneous pass-through of the license from the seller to the buyer through a third-party intermediary. In these pass-through cases, the sales contract submitted with the application include a contract between the seller and the buyer, which merely references the intermediary and the instantaneous pass-through. Thus, because the intermediary never actually exercises control of the licensee for an appreciable period of time, grant of a single long-form application contemplating this type of pass-through does not violate the mandate of Section 310(d).

9. While the instant application and associated contracts initially did not, as Ashling notes, set up the pass-through in the manner described above, the Agreement Regarding Transfer of FCC Licenses between Phipps and MAP, submitted by Gray as part of its July 5, 1996 amendment, renders its pass-through transaction essentially instantaneous and brings it within the bounds of similar transactions approved in the past. Specifically, hi that Agreement the applicant represents that consummation of the Phipps to MAP stage of the transaction cannot occur until the Commission approves the pending application contemplating an ultimate assignment to Gray. Furthermore, the July 5 filing notes that Gray has amended the Asset Purchase Agreement between MAP and Gray to provide that the closing of that transaction "shall occur immediately following the closing of both the Stock Purchase Agreement and the Preferred Stock Purchase Agreement, and in no event later than ten (10) minutes thereafter." By amending the agreements to make the pass-through virtually instantaneous, we believe that the parties have made clear their intention that the intermediary will not acquire or maintain control of the licenses. In light of the facts discussed above, we reject Ashling©s contention that the structure of this transaction and the associated applications violate Section 310(d). Nevertheless, we take the representations made in the contracts, as amended, to mean that should the MAP to Gray transaction not be consummated within ten minutes of consummation of the Phipps to MAP transaction, then control of the licensees would remain with Phipps, and we expressly rely on that representation.

TEMPORARY DUOPOLY RULE WAIVERS

Legal Standard

10. Currently Gray owns WALB-TV, Albany, Georgia and WJHG-TV, Panama City, Florida. Through this assignment, it seeks to acquire WCTV(TV), Thomasville, Georgia, whose Grade B contour overlaps those of both WALB-TV and WJHG-TV. Gray therefore seeks two temporary, six-month waivers3 of our duopoly rule, §73.3555(b), pending divestiture of WALB- TV and WJHG-TV.

3 Gray initially sought temporary twelve-month waivers, but subsequently reduced that request to six-month waivers.

13056 Federal Communications Commission FCC 96-395

11. Our duopoly rule seeks to promote diversity in programming sources and viewpoints and to prevent an undue concentration of economic power by fostering economic competition in broadcasting. Multiple Ownership Rules, 22 FCC 2d 306, 307 (1970), recon. granted in part, 28 FCC 2d 662 (1971). At the time it adopted the prohibition on Grade B overlap, the Commission acknowledged the need for "flexibility" in that rule©s application, noting that waivers should be granted where rigid conformance to the rule would be "inappropriate." Multiple Ownership of Standard, FM and Television Broadcast Stations, 45 FCC 1476, 1476 n.l recon. granted in part, 3 RR 2d 1554 (1964). Accordingly, the Commission has developed a set of factors it considers in evaluating requests for both permanent and temporary waiver of the duopoly rule, including the extent of the overlap, the distinctiveness of the respective markets, the independence of the stations© operations, the number of media voices available in the overlap area, and the concentration of economic power resulting from the combination. See, e.g., Capital Cities/ABC, Inc., 11 FCC Red 5841, 5862-63 (1996) (citations omitted). After weighing these factors, the Commission considers the public interest benefits identified by the applicant in order to determine whether, despite the overlap, these benefits outweigh any detriment which may result from grant of the waiver. See Iowa State University Broadcasting Corporation, 9 FCC Red 481, 487-88 (1993), afield sub nm. lowansfor WOI-TV, Inc. v. FCC, 950 F.3d 1096 (D.C. Cir. 1995). Waiver will only be granted if the Commission concludes that to do so would serve the public interest

12. Assessment of a temporary waiver request relies on the same factors considered for permanent waivers, but those factors may be accorded different weight and may be analyzed differently given the fact that the proposed combination is of limited duration. See Stockholders of CBS Inc., 11 FCC Red 3733, 3755 (1995). Using this standard, we shall evaluate Gray©s request for temporary waivers for the WALB-TV, Albany-WCTV(TV), Thomasville combination, and for the WJHG-TV, Panama City-WCTV(TV) combination.

Gray©s Waiver Request

13. Preliminarily, Gray argues that its proposed acquisition of WCTV(TV), Thomasville, is part of a larger transaction involving the sale of all of the stock of Phipps to a third party and the concurrent sale by that third party of certain assets - including a second television station, a paging business and a production company to Gray. The applicant then notes that the Commission has stated that where a party requests temporary waivers of the multiple ownership rules incident to a larger transaction, facilitating that transaction by granting the accompanying waivers "encouragefs] investment hi the broadcast industry, and allow[s] for the full transferability of broadcast licenses." Stockholders of CBS Inc., 11 FCC Red at 3744 (Westinghouse-CBS, Inc. merger).

14. Regarding the waiver factors, according to Gray©s engineering exhibit, the Grade B overlap between WCTV(TV), Thomasville, and WALB-TV, Albany, includes 494,053 people and encompasses 22, 121 square kilometers, which represents 55.7% of the population and 50.1% of

13057 Federal Communications Commission FCC 96-395 the land area within WCTV(TV)©s Grade B contour4 and 83.5% of the population and 78.3% of the area within WALB-TV©s Grade B contour. Although Gray recognizes that this overlap, which includes Grade A overlap,5 is substantial, it notes that it is less than the Boston-Providence overlap approved on a temporary basis in Stockholders of CBS Inc. 11 FCC Red at 3762-63 (overlap consists of 67.7% of the area and 86.2% of the population within the Boston station©s Grade B contour and 86.3% of the area and 93.9% of the population within the Providence station©s Grade B contour). It further asserts that the size of the overlap is a more critical factor in a request for permanent waiver.

15. For the WJHG-TV, Panama Ciry-WCTV(TV), ThomasviUe combination, the Grade B overlap encompasses 8,895 square kilometers which constitutes 43.1% and 20.4% of the land area within the WJHG-TV and WCTV(TV) Grade B contours, respectively, and a population of 396,147, representing 24.4% and 10.9% of the population within the Grade B contours of WJHG- TV and WCTV(TV), respectively.6 Gray argues that the overlap does not exceed the amount approved by the Commission in past cases such as Telemundo Group, Inc., Debtor in Possession. 10 FCC Red 1104, 1106 (1994) (overlap constituted 51% of the area and 91.5% of the population within the Monterey station©s Grade B contour and 50% of the area and 31.3% of the population within that of the San Jose station).

16. Concerning the distinctiveness of the markets and the resulting economic power, Gray notes that all three stations are located in different Designated Market Areas (DMAs). WCTV(TV), Thomasville is located in the Tallahassee DMA, ranked number 116 nationally, WALB-TV, Albany is in the Albany DMA, ranked number 154, and WJHG-TV, Panama City is in the Panama City DMA, ranked number 161. With respect to the proposed WCTV(TV)- WALB-TV combination, Gray claims that they serve separate and distinct markets, as reflected by the absence of common local advertising on the two stations and the duplication of programming by the stations during non-network time periods.7 Furthermore, the applicant states

4 The applicant does not include in this percentage the portion of the WCTV(TV) predicted Grade B contour which falls over the Gulf of Mexico. Factoring in that portion of the Grade B contour would result in the WALB- TV/WCTV(TV) overlap area representing only 42.3% of the total area of the WCTV(TV) Grade B contour.

5 The Grade A overlap encompasses 12,712 square kilometers which constitutes 39.8% and 31.7% of the land area within the WALB-TV and WCTV(TV) Grade A contours, respectively, and a population of 326,136, representing 58.9% and 38.5% of the population within the Grade A contours of WALB-TV and WCTV(TV), respectively

6 The applicant does not include in this percentage the portion of the predicted Grade B contours of WCTV(TV) and WJHG-TV which falls over the Gulf of Mexico. Factoring in that portion of the Grade B contour would result in the WCTV(TV)AVJHG-TV overlap area representing only 172% of the total area of the WCTV(TV) Grade B contour, and approximately 33% of the total area within the WJHG-TV Grade B contour.

7 "Both, for example," states Gray, "carry ©Oprah!© If the stations had any reason to believe that they served the same (or substantially the same) market, this would not happen." File No. BALCT-960116IA, Section II, Ex. Dat5.

13058 Federal Communications Commission FCC 96-395 that it will operate these stations independently during the waiver period; that they will maintain separate staffs, and that they will not be sold in combination. Similarly, Gray maintains that the fact that WJHG-TV and WCTV(TV) are located in separate DMAs and that their cities of license are more than 100 miles apart, demonstrate that the two stations compete in separate and distinct markets. Finally, the applicant represents that WJHG-TV and WCTV(TV), like WALB-TV and WCTV(TV), will maintain separate staffs and will not be sold in combination.

17. With respect to diversity and economic competition in the overlap areas, according to Gray©s engineering exhibit, the Grade B signal of 18 television stations, hi addition to WCTV(TV) and WALB-TV, serve the Thomasville-Albany overlap area. Almost 50% of the population receives Grade B signals from five or more stations, and 83% of the population ha the overlap area receives a minimum of three Grade B signals, in addition to WCTV(TV) and WALB-TV. A very small percentage, .02% of the population, receives no other signal. Although the population within the Thomasville-Panama City Grade B overlap is relatively small, adds Gray, the Grade B signals of twelve television stations other than WCTV(TV) and WJHG- TV serve that area, with a minimum of two and a maximum of eight of these television services available to various sectors of the overlap area. Almost 98% of the population there, according to Gray, receives the Grade B signal of at least four television stations in addition to WCTV(TV) and WJHG-TV.

18. Finally, Gray states that several public interest benefits will result from approval of the Thomasville-Panama City combination. Specifically, Gray proposes to improve the information exchange between the two communities: by sharing better quality and more immediate storm- and hurricane-related information, including pre- and post-storm highway conditions for evacuees fleeing toward the Tallahassee area; by connecting the state capital of Tallahassee with Panama City through the production of a weekly one-half hour program on the activities of the Florida Senate and House of Representatives during the Florida legislature©s session, featuring local legislators who can interact with their Panama City constituents and by airing stories at other tunes on developments that affect residents of the stations© areas; by tying the Florida State University in Tallahassee with its branch campus in Panama City through the.production of stories of interest to both communities regarding university developments and athletics, and by "investigating] the utilization of a microwave link to further the university©s distance learning program between the schools; and by cooperating to develop additional local programming of interest to viewers in both markets.

Ashling©s petition to deny 19. In its petition, Ashling asserts that Gray has failed to justify its request for temporary waivers of the duopoly rule. Specifically, Ashling first points out that both new duopolies resulting from ownership of WCTV(TV) involve Grade A overlap. Ashling also assails the lack of information on the "triple overlap" area, the area within which the Grade B signal contours of all three stations overlap. An overlap this extensive, asserts Ashling, "places a heavy burden" on a party seeking waiver of the rules and Gray falls short of that burden.

13059 Federal Communications Commission FCC 96-395

20. Ashling next argues that Gray©s calculation of alternative Grade B television signals in the two overlap areas is misleading. To this end, Ashling notes that Gray improperly included its own WJHG-TV, Panama City, Florida, as well as "several" non-commercial stations which do not compete for advertising sales on its list of stations providing service to parts of the overlap area between WALB-TV and WCTV(TV). Half of the remaining commercial stations on the list, contends Ashling, are UHF stations. The "market dominance" of Gray©s proposed WALB- TV/WCTV(TV) combination, claims Ashling, would be further aggravated by Gray©s continued ownership of The Albany Herald, the major daily newspaper "in a significant portion" of the Thomasville-Albany overlap area. And, regarding the Thomasville-Panama City duopoly, while Gray©s engineering exhibit indicates that between two and eight stations provide Grade B signal to some part of the overlap area, Ashling notes that Gray included its own WALB-TV, Albany as one of the stations, as well as three non-commercial stations.8 As in the Thomasville-Albany overlap area, half of the television stations serving the Thomasville-Panama City overlap area are UHF stations.

21. Ashling debates Gray©s contention that the stations involved in these waiver requests are in different markets. While the Tallahassee market, in which WCTV(TV) is located, is separate from the Albany and Panama City markets, Ashling claims that Gray©s acquisition of WCTV(TV) would effectively "bridge" the markets. Even if this does not occur, Ashling urges, the fact that the stations are in separate markets constitutes only one factor in evaluating a waiver request

22. Next, Ashling discounts Gray©s reliance on Stockholders of CBS Inc. and Telemundo Group Inc. as support for its temporary waivers, asserting that the VHF/VHF combination found in Stockholders of CBS Inc. involved Boston and Providence, both major markets, and a well- served overlap area. 11 FCC Red at 3747-48. According to Ashling, Gray seeks to operate a VHF/VHF/VHF combination in much smaller markets and that the merger justification propounded by the Commission in favor of granting temporary waivers of various multiple ownership rules in Stockholders of CBS Inc. is not present in Gray©s case. Moreover, Ashling debates Gray©s claim that the requested waivers are justified because they are incidental to a merger, noting that rather than selling all of its assets to Gray, the contracts submitted with the applications indicate that while Phipps intends to sell certain of its assets to Gray, it plans to sell the remainder to a company described as "Newco." And Telemundo Group Inc., Ashling maintains, involved stations to be acquired out of bankruptcy, inapplicable to Gray©s situation, where it seeks to consolidate three financially healthy VHF stations. 10 FCC Red 1104 (1994).

23. While Gray argues that the establishment of various links between the Thomasville and Panama City communities via the programming and other joint efforts of WCTV(TV) and WJHG-TV provide public benefits justifying temporary waiver of the duopoly rule, Ashling maintains that this proposal of cooperation between the stations "flies squarely in the face" of the Commission©s requirement that the stations involved in a duopoly be separately operated.

8 These include: WFSU-TV, Channel 11, Tallahassee; WABW-TV, Channel 14, Pelham, Georgia; and WGIQ(TV), Channel 43, Louisville, Alabama.

13050 Federal Communications Commission FCC 96-395

Moreover, Ashling contends that these public benefits are "questionable at best." First, Ashling contends that Gray©s proposed communications link between Tallahassee and Panama City already exists via a satellite connection from WFSU-TV, the public television station which maintains uplink capabilities for the state©s Emergency Operations Center. These facilities, notes Ashling, allowed television stations throughout Florida to receive official information directly from the governor. Second, Ashling asserts that its own Panama City station, WPGX-TV, has served as a "liaison" between its audience and state government and that Gray©s proposed weekly half-hour show relating to legislative affairs is "somewhat redundant" since the Panama City public television station already airs a daily live program on that topic. Third, Ashling claims that Florida State University already has a dedicated fiber optic link connecting the Tallahassee and Panama City campuses. Fourth, Ashling maintains that, despite Gray©s assertion, it is unlikely that the two stations will develop additional local programming during the duration of the temporary waiver period.

24. Additional diversity and competition issues militate against grant of the duopoly waivers, Ashling claims, and any grant of such waiver would require reexamination by the Commission of Gray©s existing broadcast-newspaper cross-ownership waiver in the Albany market. After grant of the temporary waivers sought here Gray would not only continue to own the only daily newspaper and one of only two stations licensed to Albany, argues Ashling, but would also own WCTV(TV), the only other VHF station which places a signal over Albany. Creation of the new combination would "drastically" change the circumstances under which the Commission originally granted Gray waiver of the broadcast-newspaper rule, The Herald Publishing Co. (WALB-TV), 6 FCC 2d 631 (1967), and, argues Ashling, would therefore require the Commission to reevaluate the newspaper cross-ownership waiver hi light of the changed circumstances.

Gray©s opposition

25. In its opposition, Gray defends its duopoly waiver request and maintains that it falls within the bounds of recent precedent First, it asserts that the degree of overlap for both of the temporary duopolies is smaller than that approved in recent temporary waiver cases such as Capital Cities/ABC, Inc. and Stockholders of CBS, Inc.. Moreover, argues Gray, the area of triple overlap, which consists of the Grade B contour overlap of all three Gray stations, is "minuscule," comprising 0.8 % of the area and 0.4 % of the population of the Grade B contour of WCTV(TV), 1.2% of the area and 0.6% of the population of WALB-TV, and 1.6% of the area and 0.9% of the population of the Grade B contour of WJHG-TV. This triple overlap area, asserts Gray, will be served by four, and in most places five, additional commercial television stations.

26. Gray next contends that while the number of alternative television signals available hi the overlap area is "not as large" as in other temporary waiver cases, that is due to the smaller size of the three markets Tallahassee, Albany, and Panama City- involved in Gray©s combinations. Nevertheless, it asserts that Ashling is "certainly wrong" in excluding noncommercial stations from a duopoly waiver analysis in that the Commission has recently noted in Review of the Commission©s Regulations Governing Television Broadcasting, 10 FCC Red 3524 (1995), that both commercial and noncommercial broadcasters compete for viewership.

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27. As for any harms that Ashling contends will result from the temporary waiver, Gray reaffirms its commitment to refrain from jointly marketing the stations. That way, if the three commercial stations do compete in some limited geographic areas, Gray argues, those stations will continue to do so during the waiver period. Absent joint selling, notes Gray, there is no other way to maximize revenue than to vigorously compete for accounts.

28. Nor, contends Gray, does its ownership of The Albany Herald change the waiver calculus. According to the declaration of Gray©s vice president and president of the publishing division, Thomas J. Stultz, the newspaper does not compete for advertising with either the Tallahassee-Thomasville or Panama City television stations, has virtually no circulation in either market, and has no measurable circulation in the triple overlap area. Gray further notes that it received a brief waiver of the newspaper divestiture requirement for the period it took to put a second local station on the air in Albany. Once that station became operational, Gray argues, the Albany situation was no longer "egregious" such that divestiture would be required, and the Commission permitted the continued common ownership of the media outlets under the grandfathering provisions of the new newspaper-broadcast cross-ownership rules. WALE-TV, Petitions for Waiver of Section 763.35, 73.240 and 73.636 of the Commissions Rules, FCC 79- 705, released October 25, 1979, recon. granted, 77 FCC 2d 54 (1980). Since a second station will still exist in the Albany market, maintains Gray, a reexamination of the television-newspaper combination is not required.

29. Finally, Gray commits that in addition to the programming enhancements it offered in connection with the Thomasville-Panama City combination in its initial waiver request, it will broadcast a new half-hour weekly children©s television program on WCTV(TV) that is produced by Gray and currently airs on WALB-TV, Albany. Also, Gray commits WCTV(TV) to clearing the three hours of children©s educational programming that is intended to be aired by the CBS network by the beginning of Fall 1997 season.9

30. In its reply, Ashling asserts that Gray has failed to dispute "in any manner" the facts contained in Ashling©s petition. Failure to refute any of these factual statements, concludes Ashling, "is clearly an intentional omission and indicates that these facts are indeed irrefutable."

Discussion

31. Preliminarily, we note that we do not base our decision to grant these waivers on the rationale that doing so is necessary to facilitate a merger or multi-station transaction as we did in both the CBS-Westinghouse and the Disney-ABC cases. In both of those cases, the conflicts with our multiple ownership rules were incidental to the much larger merger or transaction. See

9 Gray made this commitment prior to the Commission©s revisions of its policies and regulations concerning children©s television programming. See Report and Order in MM Docket No. 93-48, FCC 96-335, released August 8, 1996.

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Stockholders of CBS Inc., 11 FCC Red 3733; Capital Cities/ABC, Inc. 11 FCC Red 5841. Because the instant case involves only two broadcast stations, however, and because Phipps has sold portions of its assets to buyers other than Gray, we do not believe that it fits into the category of either a merger or a multi-station transaction, warranting application of the rationale discussed above. Nevertheless, for the reasons discussed below, we find that grant of both duopolies are warranted for a temporary, six-month period.

32. In applying the traditional waiver factors to the duopolies in this case, we begin with a discussion of the extent of the overlap areas. Regarding the Thomasville-Albany combination, the overlap includes 494,053 people and encompasses 22,121 square kilometers, representing 50.1% of the land area and the 55.7% of the population within the WCTV(TV) Grade B contour and 83.5% of the population and 78.3% of the area within the WALB-TV Grade B contour. A portion of the Grade A contours of these stations also overlap. With respect to the Thomasville- Panama City overlap, the Grade B overlap encompasses 8,895 square kilometers which constitutes 43.1% and 20.4% of the land area within the WJHG-TV and WCTV(TV) Grade B contours, respectively, and a population of 396,147, representing 24.4% and 10.9% of the population within the Grade B contours of WJHG-TV and WCTV(TV), respectively. Lastly, the small triple overlap area represents 0.8 % of the area and 0.4 % of the population of the Grade B contour of WCTV(TV), 1.2% of the area and 0.6% of the population of WALB-TV, and 1.6% of the area and 0.9% of the population of the Grade B contour of WJHG-TV.

33. Although we recognize that the overlaps involved in both duopolies are substantial, as the Commission stated in Family Television Corp., 59 RR 2d 1344, 1348 (1986), the size of the overlap has been of "more critical concern©1 in cases involving requests for permanent waiver of our rules. We are not constrained, therefore, from granting a temporary waiver where the overlap is large, so long as ownership of the given combination "will not significantly frustrate the policies underlying the multiple ownership rules," id., that is, economic competition and diversity. And, in this instance, grant of these waivers will advance important objectives under our multiple ownership rules by resulting in the break-up of an existing duopoly as well as a newspaper- television combination.

34. We thus turn to the next factor in our traditional analysis, which considers the distinctiveness of the markets involved as a means of assessing the potential for anticompetitive behavior, even for a limited period of time, at the local level by owners of multiple broadcast stations. In this instance, despite the fact that the transmitter sites of the three stations are located in close proximity, all three stations are located in different DMAs (WCTV(TV), Thomasville is in the Tallahassee DMA, WALB-TV, Albany is in the Albany DMA, and WJHG-TV, Panama City is in the Panama City DMA). Further, as noted by Gray, the cities of license of WJHG-TV and WCTV(TV) are located more than 100 miles apart Additionally, with respect to the independence of the stations© operations, we note the applicant©s representation that the stations involved in both waiver requests will be operated separately and that they will maintain separate staffs, and will not be sold in combination during the limited period of the requested waiver. This pledge mitigates our concerns about the effects that temporary common ownership of the three stations might have on competition in the separate markets involved hi these waiver

13063 ______Federal Communications Commission_____ FCC 96-395

requests. Further, as we note below, a number of other television stations serve significant portions of the overlap areas in both Albany and Panama City.

35. With respect to the issues of diversity of media voices hi the overlap areas, our own analysis confirms that, in addition to WCTV(TV), Thomasville, WALB-TV, Albany and WJHG- TV, Panama City, in the Thomasville-Albany overlap area, 17 stations, 12 of which are commercial, provide Grade B service to some part of the overlap area. Based on our analysis of Gray©s engineering exhibit, it appears that 83.8% of the population in the overlap area receive a minimum of three additional stations, while almost 50% of that population receives five or more additional signals, and some overlap areas receive as many as seven signals. A very small portion of the overlap area, representing approximately .02% of the population, receives no additional signals.

36. In the Thomasville-Panama City overlap area, in addition to WCTV(TV), WALB-TV and WJHG-TV, 11 Grade B or better signals reach viewers within all or part of the overlap area, including eight commercial stations. Our analysis of Gray©s engineering exhibit confirms that approximately .2% of the population receive only two additional signals, while 98% of the population within this overlap area receive four other television stations, 71.4% of the population receive as many as five or more stations, and some of the population within the overlap receive as many as seven additional stations.

37. Lastly, the nearly de minimis population within the triple overlap area, are served by six or seven additional television stations, four, and in most places five, of which are commercial. In this instance we believe that a sufficient number of voices exists to justify a brief, six-month waiver. Once again, we base this conclusion hi large part on Gray©s pledge to continue separate operation of the stations, thereby insuring that the brief period of common ownership will not result in increased economic concentration in the market

38. After considering the traditional factors, the Commission examines the public interest benefits offered by the applicant hi order to determine whether these benefits tilt the balance in favor of granting a duopoly waiver. See, e.g., Stockholders of CBS Inc., 11 FCC Red at 3762; Station Partners, 10 FCC Red 12383, 12387; H&C Communications, 9 FCC Red 144, 146 (1993). In this regard, we note that because Gray has pledged to divest of both WALB-TV and WJHG-TV, grant of these temporary waiver requests will result in the elimination of the existing WALB-TV/WJHG-TV duopoly. Temporarily waiving the duopoly rule will also result hi ending the long-standing common ownership of The Albany Herald newspaper and a local commercial television station, WALB-TV. Breaking up these existing television duopoly and newspaper television combinations a result which can only be achieved hi the circumstances of this case through the voluntary actions of Gray will further the primary goal of both our duopoly rule and our newspaper-broadcast cross-ownership rule fostering maximum competition hi broadcasting, and promoting diversification of programming sources and viewpoints at the local level. See Multiple Ownership Rules, 22 FCC 2d 306, 307 (duopoly rule); Multiple Ownership ofStandard, FM, and Television Broadcast Stations, Second Report and Order, 50 FCC 2d 1046

13064 Federal Communications Commission FCC 96-395

(1975) (newspaper-broadcast cross-ownership rule).10 We conclude that the ultimate, permanent increase in ownership diversity resulting from the break-up of these combinations is compelling and outweighs any transient adverse impact on diversity and competition that grant of these temporary waivers may have on the affected markets.

39. With respect to the specific programming benefits Gray has identified regarding the Thomasville-Panama City combination, Gray proposes to improve the information exchange between the two communities by sharing weather information, by connecting the state capital of Tallahassee with Panama City through the production of a weekly one-half hour program on the activities of the Florida Senate and House of Representatives, and by producing and developing programming of interest to viewers in both markets. Even if a communications link between Tallahassee and Panama City already exists via the public television station and Ashling©s own program aired on its WPGX-TV, Panama City, this does not render "redundant" Gray©s pledge to add additional programming. In fact, the airing of two such programs furthers the Commission©s diversity goal, which is grounded hi the theory that " the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public . . . ." See, e.g., Multiple Ownership of Standard, FM, and Television Broadcast Stations, Second Report and Order, 50 FCC 2d 1046, 1048 (1975) (quoting Associated Press v. United States, 326 U.S. 1, 20 (1945)).

40. Contrary to Ashling©s assertions, neither the sharing of information between the Thomasville and Panama City stations, nor the broadcast by WCTV(TV) of a WALB-TV children©s program contradicts Gray©s pledge to operate the stations separately. At least with respect to our concerns about economic competition, we do not believe that the sharing of news, weather and other information resources between the stations, as pledged by Gray, undermines the benefits that separate operation will bring. Thus, for the reasons stated above, we conclude that grant of these temporary waivers is warranted.

OTHER MATTERS

Misrepresentation/Lack of Candor

41. In its petition, Ashling alleges that Gray has misrepresented its intentions and will not actually divest of the stations. Even if it does ultimately divest, Ashling contends that Gray has shown lack of candor in failing to inform the Commission that any eventual sale of the stations would apparently be contingent on the buyer allowing Gray to operate the stations after the sale. As "irrefutable evidence" of the allegations concerning the divestiture of WALB-TV, Ashling

10 We reject Ashling©s argument that reexamination of Gray©s ownership of both WALB-TV and of The Albany Herald is warranted because grant of the instant transaction will change the circumstances under which we granted the newspaper-broadcast combination. Since the purchase by Gray of WCTV(TV) does not trigger application of the rule, 47 CJ.R. §73.3555(d), our policy does not requite reexamination of that waiver. Multiple Ownership of Standard, FM, and Television Broadcast Stations, Second Report and Order, 50 FCC 2d at 1076.

13065 Federal Communications Commission FCC 96-395 attaches to its petition a February 9, 1996 article from The Albany Herald, which quotes WALB- TV©s station president and general manager, Jere Pigue, as saying that "Gray Communications doesn©t intend to let go of WALB" and that Gray intends to use "every legal means available" to continue to own WALB or at least operate the station. As further evidence of its WALB-TV- related allegations, Ashling provides the transcript of a videotaped interview of Pigue conducted on February 7, 1996 by a reporter from WFXL-TV, the only other television station licensed to Albany in which Pigue makes several statements concerning Gray©s plans to keep WALB-TV and states that, should Gray be required to sell the station, "there are other legal ways of operating television stations without ownership, and those are avenues we have to look at if indeed they don©t change the rules."

42. With respect to allegations that Gray intends to retain WJHG-TV, Panama City, Ashling furnishes the declaration of Andrew Shore, the news director of its own Panama City station, WPGX-TV who interviewed WJHG-TV president and general manager John Ray. According to that declaration, Ray told Shore that "WJHG-TV is not for sale and never has been for sale" and that "because of the newly passed telecommunications bill, Gray hoped that it would be able to keep all three stations (WALB-TV, WJHG-TV, and WCTV)." Ray, according to a declaration from Tom Najjar, a Panama City businessman who hosts a public affairs show on Ashling©s WPGX-TV, stated in a recent conversation with Najjar that "I told Andy Shore that we©re not for sale, never have been for sale."

43. In its opposition, Gray President and Chief Executive Officer, Ralph Gabbard states in a declaration that "I speak for the Company in this matter," not general managers Jere Pigue or John Ray. Their remarks, states Gabbard, were designed to "alleviate employee concern about their futures at the stations" and while they "may have been overly optimistic about the prospects for deregulation, they were not intended to suggest disrespect for the FCC©s processes or contempt for any divestiture order it may issue." Until the law changes, adds Gabbard, Gray will "proceed on the assumption" that it will be required to divest, both the Albany and Panama City stations. "Once the WCTV acquisition closes," states Gabbard, "Gray will intensify its search, which has already resulted in one serious preliminary discussion, for potential swap buyers of WALB-TV and WJHG-TV."

44. Gray further contends that Ashling©s interpretation of the statements made by Ray and Pigue "is highly strained and flawed in numerous key respects." Gray then asserts that Ashling focuses on Pigue©s quote in The Albany Herald news article pertaining to Gray©s desired retention of the Albany station, WALB-TV, but ignores Pigue©s statements that Gray©s actual retention of the station depends entirely on the outcome of the duopoly rule making. Also, Gray notes a discrepancy between the text of the petition and the appended declaration of Shore concerning Ray©s statement regarding sale of WJHG. In response, Ashling submits a second declaration from Shore claiming that Ray had stated that WJHG-TV "never will be for sale." Petitioner further asserts that rather than attempting to refute or clarify the statements at issue, Gray only submits a declaration from Gabbard which "attempts to reinterpret" the meaning of the general managers© statements as being uttered in order to comfort concerned station employees. Ashling points out that Pigue and Ray did not make these "complex and thought-out" statements to employees, but

13066 Federal Communications Commission FCC 96-395 rather, to members of the press and public.

45. Ashling also contends that regardless of who is authorized to speak for Gray, Pigue and Ray are "eyewitnesses" to the corporate planning of Gray. To the extent Gabbard now claims that the general managers apparently misunderstood Gray©s intention to divest, argues Ashling, he does not explain how both Pigue and Ray obtained the "same ©misunderstanding."1 Even Gabbard himself, asserts Ashling, stated to Bruce Anderson, an attorney hired by Ashling to pursue negotiations with Gray for the acquisition of WALB-TV, that the stations are not for sale. In his declaration, Anderson states that during a telephone conversation with Mr. Gabbard "to discuss the multiple ownership issue and my client©s continued interest in negotiating for the purchase of WALB-TV.... Mr. Gabbard responded that neither WALB-TV nor WJHG-TV was for sale."

46. Based on the "numerous misrepresentations and lack of candor" exhibited by Gray, Ashling concludes, the Commission cannot rely on the assertions of Gray in considering the waiver request. Nor can Gray be trusted, adds Ashling, to comply with the Commission©s waiver policies should waiver be granted. The Commission, according to Ashling, "may need" to designate the application for hearing in order to make a determination as to Gray©s fitness to be the licensee of WCTV(TV).

47. Discussion: We find Ashling©s allegations both speculative and unsupported. Regardless of the press accounts and hearsay declarations presented by Ashling, in a sworn statement Gray President and Chief Executive Officer Ralph Gabbard has refuted all of these allegations, and has reaffirmed Gray©s commitment to file applications in order to come into compliance with the Commission©s rules prior to the expiration of the waiver period. Moreover, regarding the newspaper stories recounting Pigue©s statements, we note that the Commission has consistently declined to accord evidentiary weight to press accounts unsubstantiated by an affidavit of someone with personal knowledge of the facts recounted. See News International, PLC., 97 FCC 2d 349, 358 (1984); 47 U.S.C. §309. Similarly, we find the hearsay declarations of Andrew Shore and Tom Najjar to have no probative value. 47 U.S.C. §309. Finally, we note that all applicants certify as to the truth of the representations made in their applications. See FCC Form 314 at 9. In the instant application, Ralph Gabbard signed the application on behalf of Gray. We refuse to assume, based entirely on Ashling©s speculative lack of candor claim or its unsupported misrepresentation claim, that Gray will not abide by its promise to divest the stations. 11

Ownership and Control of Gray r 48. For the first time in its Reply, Ashling contests the actual control of Gray. It begins by labelling as "more than a little overstated" Gray©s assertion that it is "©a longtime (over 40 years)

11 We also find Ashling©s claim that Gray has lacked-candor by not informing the Commission that it intends to try to operate WALB-TV and WJHG-TV after divestiture to be both speculative and unsupported.

13067 Federal Communications Commission FCC 96-395

Commission licensee©" and questions for the first time hi its pleadings the actual extent of Gray stock held by principals of Bull Run Corporation (Bull Run), the largest shareholder of Gray, and the involvement of these principals in Gray©s operation. To support its allegation Ashling discusses the history of ownership of Gray since 1993. In 1993 the Executor of the Estate of the late James H. Gray Sr. entered into an agreement to sell the estate©s remaining stock in Gray, representing approximately 25% of the company©s stock, to Bull Run.12 In order to avoid having to break up its newspaper-television combination in Albany, asserts Ashling, Gray sought consent to this transfer as a. pro forma transfer via short-form FCC From 316 application which, unlike transfers conducted via long-forms, does not result in loss of grandfathered status for these combinations. Ashling notes that in that application, Gray argued for pro forma treatment based on its assertion that while the Gray Estate would be relinquishing de facto control, no one would be acquiring control of the corporation, and on statements by Gray disclaiming any intention by Bull Run to become involved in Gray©s media operations. See Letter from Barbara A. Kreisman, Chief, Video Services Division, to Richard A. Lederer, President, Fish & Lederer Investment Counsel, Inc. (July 16, 1993). Ashling questions whether Gray has revealed the actual extent of the stock ownership in Gray held by Bull Run and the involvement of Bull Run principals in Gray©s operation.

49. In particular, with respect to stock ownership, Ashling states that hi various filings, including a 1995 SEC Proxy Statement, Exhibit 2 to the 1995 FCC Ownership Report, and a substitute Exhibit 2 to that report, filed hi 1996, Gray indicates different stock ownership percentages for J. Mack Robinson, a director of both Gray and Bull Run, and Bull Run©s largest shareholder which, claims petitioner, raises questions concerning the actual interest of Bull Run principals in Gray. Petitioner notes that according to Gray©s Ownership Report, Robert S. Prather, Jr., Bull Run©s President and Chief Executive Officer and a Gray Director has an interest of "less than 5%" hi Gray and Hilton H. Howell, Jr., the third Bull-Run appointed director, appears based on the 1995 Proxy Statement to have owned approximately 2% of Gray stock. Ashling thus concludes that "the aggregate beneficial stockholdings of Bull Run©s representatives on Gray©s board of directors may already exceed 50% of Gray©s stock," which exceeds the 25% share approved by the Commission hi the 1993 pro forma transfer. Ashling also contends that a voting agreement referenced hi a letter from Gray to Bull Run hi connection with that transfer provides the means for Bull Run principals to control the votes of additional Gray shareholders.

50. Based on the information provided by Bull Run hi its 1994 Annual Report, Ashling also argues that Bull Run has broken its 1993 "for-investment-only pledge" to the Commission by bidding on behalf of Gray for the acquisition of two television stations hi Kentucky, and for structuring on behalf of Gray the acquisition of two Georgia newspapers and a Georgia television station. Additionally, Ashling states that both Robinson and Prather are two of three members of Gray©s Management Personnel Committee, which the Proxy Statement describes as responsible for making "recommendations with respect to executive salaries, bonuses and compensation and

12 In 1991 the Executor of Gray©s estate transferred 26% of the corporation©s stock from Gray©s Estate, which at the time held 51% of the stock, back to the corporation, thus reducing the estate©s stock to 25%.

13068 Federal Communications Commission FCC 96-395

to serve as the Nominating Committee with respect to the principal officers and other committees of the Board of Directors, as well as making nominations respecting membership to the Board of Directors of the Company." Given these facts, petitioner argues, the Commission should inquire "into whether Gray is the forty-year licensee it claims to be, or whether control of Gray has been transferred, requiring the breakup of Gray©s Albany newspaper/television combination."

51 . Discussion: We find nothing in Ashling©s allegations regarding the control of Gray, to raise a basis for denial of the assignment application or grounds for a hearing. In approving the pro forma transfer of stock to Bull Run in 1993, the staff rejected an objection which claimed that the proposed transfer, involving the relinquishment of de facto control of Gray by the Estate of Gray, and the acquisition of the remaining 25% held by the Estate by Bull Run, would result in the transfer of control of the licensees to new owners. The staff based its denial of that objection and approval of the transaction via short form on the grounds that while the Estate was relinquishing control of Gray, neither Bull Run, nor any other entity, was acquiring either de facto or dejure control of Gray. In particular, the staff noted that although Bull Run would hold the largest single block of stock in Gray, it would not have control of the company because it represented in an agreement between itself and the Estate, that it would hold the stock in Gray for investment purposes only. In that agreement Bull Run further represented that it would "nominate no more than 3 of Gray©s 10 directors" and would "not select or direct the role of the other 7 directors. Further," the agreement provided that "no individual associated with Bull Run will serve as an officer or key employee of Gray." Additionally, the parties noted that "[sjhould these circumstances change, the parties have agreed to file an appropriate application with the Commission." Id. at 2-3.

52. We do not believe that Ashling has raised a substantial and material question of fact as to whether, since the 1993 pro forma transfer, Bull Run has assumed either dejure or de facto control of Gray. Ashling insinuates that Bull Run may have assumed dejure control of Gray by virtue of the aggregate beneficial stockholdings of Bull Run©s representatives on Gray©s board of directors, which Ashling alleges may be over 50%, thus exceeding the 25% approved by the Commission in 1993. The Bull Run Corporation, however, has not substantially increased the amount of stock it holds indirectly in Gray. Moreover, based upon our review of the detailed ownership information for each of the principals and cognizable stockholders of Gray contained in the 1995 Ownership Report, and the similar information contained in Section n, and the amendments thereto, in the instant assignment applications, we conclude that the holdings of Robinson, Prather and Howell, the three Bull Run stockholders referred to by Ashling, have not exceeded and do not currently exceed 50%.13 Finally, to the extent that Ashling implies that the

13 Nor do we accept Ashling©s contention that Bull Run has assumed affirmative control of Gray via the Voting Agreement which the two companies entered in conjunction with the 1993 pro forma transfer. That Voting Agreement was referenced in the June 21,1993 letter agreement between Gray and Bull Run submitted with the pro forma application. In that letter agreement, the parties confirmed that Bull Run would enter a Stock Purchase Agreement and a Voting Agreement with Gray. Ashling now asserts that the Voting Agreement could provide means for Bull Run principals to control the votes of additional Gray shareholders. We find no merit in this hypothesis, and point out that in the instant application, Gray certified that it does not have any voting agreements related to

13069 Federal Communications Commission FCC 96-395 direct and indirect interests of the Bull Run representatives on Gray©s board should-be combined and added to Bull Run©s interest in order to determine whether Bull Run has assumed control of Gray, we find no justification for such aggregation under our current rules and policies.

53. Next, we find that none of the facts mentioned by Ashling demonstrate that Bull Run has assumed control of Gray. In emphasizing that pledge as part of its grant of the pro forma transfer, the staff sought to demonstrate that Bull Run was not acquiring de facto control of Gray. To this end, the staff recognized that while Bull Run would hold an attributable interest in Gray through its stock holdings, and would have the ability to nominate three of the Gray directors, it would not control Gray. The mere fact that Bull Run may have participated in the structuring of certain media transactions or bid for certain media properties on behalf of Gray, does not indicate that Bull Run controls Gray. Furthermore, the fact that two of the Bull Run representatives on Gray©s board sit on its three person Management Personnel Committee, which meets in order to make recommendations to the Gray board regarding compensation for its executives, serves as the Nominating Committee with respect to the principal officers and other committees of the Gray Board, and makes nominations respecting membership to the Board, does not indicate that Bull Run controls Gray. In fact, by allowing Bull Run principals to sit on the Gray Board, the staff expressly permitted such activity. Lastly, we note that Gray has continued to honor its other pledges, made as part of the 1993 transfer, that no individual associated with Bull Run would serve as an officer or key employee of Gray, that Bull Run would nominate no more than three of Gray©s directors and that it would not select or direct the role of the other Gray directors.14 Thus, Ashling has failed to raise a substantial and material question regarding control of Gray.15

ownership or future ownership rights. See File Nos. BALCT-960116IA-IB, Section II, Question 15.

14 We note that at the time we granted the pro forma transfer, Gray had a ten member board. Currently, the Gray board consists of eight members. Nevertheless, we find that Bull Run has not assumed control of Gray by virtue of the fact that three of its principals sit on the Gray Board, since these principals still represent a minority of that Board.

15 We note that, on September 10, 1996, Mr. Gabbard, the President and CEO of Gray unexpectedly died. In amendments to its application reflecting this fact, the parties indicated that Mr. J. Mack Robinson, a director and stockholder of Bull Run and a director of Gray, was appointed on a temporary basis to succeed Mr. Gabbard in these offices. Further, according to Gray, "in order to fill other functions in which Mr. Gabbard had collaborated with Robert S. Prather, Jr., Mr. Prather was named to fill a newly created office in Gray, Executive Vice President- Acquisitions. Mr. Prather is the President and CEO of Bull Run Corporation which, as previously disclosed to the FCC ... is involved in developing and furthering Gray©s acquisition strategies. Mr. Prather©s service in this office is also a temporary response to Mr. Gabbard©s death." We do not view these appointments as a violation of the pledge made in support of the pro forma transfer of control application granted by the Commission in 1993, see supra UK 51, 53, or as reflecting bad faith on the part of Gray in light of the unforeseen circumstances here. Nor do we believe that these transient positional interests alter our determination that Bull Run has not acquired de facto control of Gray. We rely, however, on Gray©s representation that the appointments of Messrs. Robinson and Prather are, in essence, emergency, stop-gap measures which will endure only for a very limited period.

13070 Federal Communications Commission FCC 96-395

CONCLUSION

54. For the reasons stated above, we conclude that grants of Gray©s request for temporary six month duopoly waivers is warranted. Additionally, we find that the applicants are fully qualified, and that grant of the proposed assignment would serve the public interest, convenience, and necessity.

55. Accordingly, IT IS ORDERED, That the petition to deny the applications filed by Ashling Broadcasting Group, Inc. IS DENIED, and the petitions to deny filed by SGA Associates, Inc. and General Management Consultants, Inc. ARE DISMISSED.

56. IT IS FURTHER ORDERED that the request for waiver of the Commission©s duopoly rule, Section 73.3555(b), to permit common ownership of television stations WALB-TV, Albany, Georgia, WCTV(TV), Thomasville, Georgia and WJHG-TV, Panama City, Florida ARE GRANTED, but within six months of the consummation of the instant transaction, Gray Communications Systems, Inc. is directed to file applications for Commission consent to assign the licenses of WALB-TV and WJHG-TV.

57. IT IS FURTHER ORDERED, That the application for consent to the assignment of license of station WCTV(TV) from John H. Phipps, Inc. to WCTV Licensee Corp., and the application for consent to the assignment of license of WKXT-TV from Knoxville, Channel 8 Limited Partnership to WKXT Licensee Corp., ARE GRANTED, subject to the condition that should the Media Acquisition Partners, L.P. to Gray Communications Systems, Inc. transaction not be consummated within ten minutes of consummation of the John H. Phipps, Inc. to Media Acquisition Partners, L.P. transaction, then control of the licensees remains with John H. Phipps, Inc.

FEDERAL COMMUNICATIONS COMMISSION

William F. Caton Acting Secretary

13071