Federal Communications Commission DA 99-687

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

In re Applications of ) ) KVUE-TV, INC. ) (Assignor) ) ) and ) File No. BALCT-990303IA ) GREAT WESTERN BROADCASTING ) CORP. ) (Assignee) ) ) For· Consent to the Assignment of License of ) Station KVUE-TV, Austin, Texas ) ) ) GREAT WESTERN BROADCASTING ) CORP. ) (Assignor) ) ) and ) File No. BALCT-990303IB ) KVUE-TV, INC. ) (Assignee) ) ) For Consent to the Assignment of License of ) Station KXTV(TV), Sacramento, California )

MEMORANDUM OPINION AND ORDER

Adopted: April 8, 1999 Released: April 9, 1999

By the Chief, Mass Media Bureau:

1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority, has before it for consideration the above-captioned unopposed applications for assignment of license of KVUE-TV, Channel 24 (ABC), Austin, Texas, from KVUE-TV, Inc., an indirect wholly-owned subsidiary of Gannett Co., Inc. ("Gannett") to Great Western Broadcasting Corp., a wholly-owned subsidiary of A. H. Belo Corporation ("Belo"), and the assignment of license of KXTV(TV), Channel 10 (ABC), Sacramento, California, from Belo to Gannett.

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2. Another subsidiary of A. H. Belo Corporation is the licensee of KENS-TV, Channel 5 (CBS), San Antonio, Texas, whose Grade B contour overlaps the Grade B contour ofKVUE-TV, the station to be acquired by Belo. Common ownership of stations with such Grade B overlap violates the Commission's television duopoly rule, 47 C.F.R. § 73.3555(b). Accordingly, Belo has requested a waiver of the television duopoly rule to permit common ownership of KVUE-TV and KENS-TV, conditioned on the requirement that Belo come into compliance with the outcome of the pending television ownership rulemaking proceeding within six months of its conclusion.

Duopoly Waiver Showing

3. As demonstrated in Belo's engineering report, the predicted Grade B overlap of KVUE­ TV and KENS-TV encompasses 6,866 square kilometers and 192,881 individuals. This represents 31.9% of the area and 20.0% of the population within the Grade B contour of KVUE­ TV, and 16.9% of the area and 11.6% of the population within the Grade B contour of KENS­ TV. The stations' Grade A contours do not overlap. Belo further notes that the stations are assigned to different Designated Market Areas ("DMAs"): KVUE-TV to the Austin DMA, ranked 60th, and KENS-TV to the San Antonio DMA, ranked 37th. Accordingly, Belo contends that the proposed combination complies with the Commission's "separate DMA/no Grade A overlap" interim policy regarding duopoly waivers.

4. Belo further maintains that the proposed combination presents no basis for departing from the interim policy. As an initial matter, Belo notes that the extent of the overlap falls within the range of overlaps previously approved by the Commission. Additionally, Belo asserts that the availability of a multitude of media voices in the overlap area demonstrates that common ownership of the Austin and San Antonio television stations will not adversely affect competition or diversity. According to Belo, 15 television stations (excluding KVUE-TV and KENS-TV) provide Grade B or better service to all or part of the overlap area, including six television stations serving at least 90% of the overlap area. In addition, states Belo, listeners in the overlap area are served by numerous radio stations, including at least 10 AM and seven FM stations which serve the entire overlap area. In addition, 30 FM stations provide service to portions of the overlap area. As to non-broadcast media, Belo identifies 23 cable systems and four daily newspapers serving counties within the overlap area. Belo also notes that stations KVUE-TV and KENS-TV are not only assigned to different DMAs, they are also affiliated, and will remain affiliated, with different national networks (KVUE-TV with ABC, and KENS-TV with CBS). Furthermore, Belo represents that it will maintain separate management, programming and sales operations of the two stations.

Discussion

5. In auopting the duopoly rule's fixed standard of prohibiting overlap of Grade B service contours, the Commission also acknowledged the need for "flexibility" in that rule's application, noting that waivers should be granted where rigid conformance to the rule would be

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"inappropriate." Multiple Ownership ofStandard, FM and Television Broadcast Stations, 45 FCC 2d 1476, 1479 n.12, recon. granted in part, 3 RR 2d 1554 (1964). To that end, the Commission has developed the following set of factors to be considered when evaluating an applicant's request for waiver of the duopoly rule: the extent of the overlap; the number of media voices available in the overlap area; the distinctiveness of the respective markets; the independence of the stations' operations; and the concentration of economic power resulting from the combination. See Iowa State University Broadcasting Corporation, 9 FCC Red 481, 487-88 (1993), aff'd sub nom. Iowans for WOl-TV, Inc. v. FCC, 50 F.3d 1096 (D.C. Cir. 1995); H&C Communications, Inc., 9 FCC Red 144, 146 (1993). After weighing the factors, the Commission considers any public interest benefits proposed by the applicant to determine whether, in light of the overlap, the benefits outweigh any detriment which may occur from grant of the waiver. See, e.g., Iowa State University, 9 FCC Red at 487-88. As with any waiver, it will only be granted ifthe Commission concludes that the waiver is in the public interest.

6. Currently, the Commission is reexamining its broadcast television ownership policies, including the duopoly rule. In January 1995, the Commission proposed a new analytical framework within which to evaluate its broadcast television ownership rules. See Review of the Commission's Regulations Governing Television Broadcasting, Further Notice ofProposed Rule Making, IO FCC Red 3524 (1995) ("Television Ownership Further Notice''). Subsequent to the release of the Television Ownership Further Notice, Congress directed the Commission to conduct a rulemaking proceeding to determine whether to retain, modify or eliminate existing limitations on the number of television stations that an entity may control within the same television market. See Section 202(c) of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (Feb. 8, 1996) ("Telecom Act"). In response to this Congressional directive in the Telecom Act and to update the record, the Commission released the Review of the Commission's Regulations Governing Television Broadcasting, Second Further Notice of Proposed Rule Making, 11 FCC Red 21655 (1996) ("Television Ownership Second Further Notice'').

7. The Commission stated in the Television Ownership Second Further Notice that it will be inclined, during the pendency of the television ownership proceeding, to grant temporary duopoly waivers to authorize common ownership of television stations that are in separate DMAs and whose Grade A contours do not overlap, conditioned on coming into compliance with the outcome of the proceeding within six months of its conclusion. It also noted there its tentative conclusion that the record in that proceeding "supports relaxation of the geographic scope of the duopoly rule from its current Grade B overlap standard to a standard based on DMAs supplemented with a Grade A overlap criterion." Television Ownership Second Further Notice, 11 FCC Red ~t 21681. The ~ommission further stated that "we do not believe granting waivers satisfying the proposed standard, and conditioning them on the outcome of this proceeding, will adversely affect our competition and diversity goals in the interim." Id.

8. With respect to the proposed common ownership of KVUE-TV and KENS-TV, we believe that grant of a conditional waiver of the duopoly rule, subject'to the outcome of the pending

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ownership rulemaking, is justified. The temporary common ownership of the Austin and San Antonio stations would be consistent with the interim policy set forth in the Television Ownership Second Further Notice, as the stations are in separate DMAs and there is no Grade A signal contour overlap between them. Moreover, our examination of the record presented here reveals nothing suggesting that we should not follow the established interim policy in this case. The extent of the Grade B overlap, although not de minimis, falls well within the range of those we have approved in previous cases. We note also that the stations are affiliated- with different national networks and serve different markets. Additionally, numerous broadcast stations will continue to provide service to the overlap area after the proposed assignment. Accordingly, we conclude that grant of a temporary waiver, conditioned on Belo coming into compliance with the outcome of the pending television ownership rulemaking proceeding within six months of its conclusion, will serve the public interest, convenience and necessity. Any request to extend this conditional waiver should be filed at least 45 days prior to the end of the six-month period and would be closely scrutinized.

Conclusion

9. Having determined that the applicants are qualified in all respects, we find that grant of the above-captioned applications will serve the public interest, convenience and necessity. 10. Accordingly, IT IS ORDERED, That the request for waiver of the Commission's duopoly rule, 47 C.F.R. § 73.3555(b), to allow common ownership by A.H. Belo Corporation ofKVUE­ TV, Austin, Texas, and KENS-TV, San Antonio, Texas, IS GRANTED, subject to the outcome. of the Commission's pending broadcast television ownership rulemaking in MM Docket Nos. 91- 221 and 87-8. Should divestiture be required as a result of that proceeding, the licensee is directed to file, within six months from the release of the final order in MM Docket Nos. 91-221 and 87-8, an application for Commission consent to dispose of such station as would be necessary for the liceJ!See to co~e into compliance with the rules as provided in the final order. 11. IT IS FURTHER ORDERED, That the applications for consent to the assignment of license ofKVUE-TV, Austin, Texas, from KVUE-TV, Inc., to Great Western Broadcasting Corp., and KXTV(TV), Sacramento, California, from Great Western Broadcasting Corp. to KVUE-TV, Inc. (File Nos. BALCT-9903031A-IB) ARE GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

Roy J. Stewart Chief, Mass Media Bureau

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