Federal Communications Commission Record 9 FCC Red No

FCC 93-368 Federal Communications Commission Record 9 FCC Red No. 1

area, while the geographic area of predicted overlap is Before the "relatively insubstantial," coming within the "low end" of Federal Communications Commission the range of duopoly waiver cases the Commission has Washington, D.C. 20554 granted.© In support of these contentions, Pulitzer cites two engineering studies of the overlap area between KCCI-TV and KETV. The first study, based upon the standard predic In re Application of tion method, indicates that the Grade B contour of KCCI- TV encompasses 44.935 square kilometers (17,349 square H & C COMMUNICATIONS, INC. miles) and 920,776 persons while the Grade B contour of KETV encompasses 35,082 square kilometers (13,545 (Assignor) square miles) and 1.105 million persons. Based on these figures, the overlap area of 1,153 square kilometers (445 and File No. BALCT-930308KE square miles) inhabited by 9,349 persons represents 2.6 percent of KCCI-TV©s Grade B contour area and 1.0 KCCI TELEVISION. INC. percent of its population, and 3.3 percent of KETV©s Grade (Assignee) B contour area and 0.8 percent of its population; 3. Pulitzer©s second engineering study, based on field For Assignment of the License of, strength measurements, indicates an overlap area roughly Television Station KCCI-TV, three-fifths the geographic size of that obtained via the standard prediction method, with approximately 3,900 few Des Moines, Iowa er persons. The overlap area based upon these field strength measurements, therefore, constitutes only 1.6 percent of KCCI-TV©s Grade B contour area and 0.6 MEMORANDUM OPINION AND ORDER percent of its population, and 2.1 percent of KETV©s Grade B contour area and 0.5 percent of its population. Field Adopted: July 22, 1993; Released: July 30, 1993 strength measurements also reveal, Pulitzer argues, that the overlap area represents only 0.9 percent of the area and 0.3 By the Commission: Commissioner Barrett concurring percent of the population of the combined Grade B con and issuing a statement. tours of the two stations. 4. Moreover, Pulitzer characterizes the overlap area, 1. The Commission has before it for consideration the whether arrived at by the prediction method or field unopposed application for assignment of the license of strength measurements, as "heavily rural," 96 percent of television station KCCI-TV, Channel 8 (CBS), Des Moines, which is farmland and all of which lies outside any Stan Iowa, from H & C Communications, Inc. to KCCI Televi dard Metropolitan Statistical Area. The overlap area, Pul sion. Inc.. a wholly owned subsidiary of Pulitzer Broadcast itzer states, contains only two counties, Audubon and Cass, ing Company (Pulitzer). 1 Pulitzer is the licensee of KETV, both in Iowa, with 11 small towns, the largest of which has Channel 7 (ABC), Omaha, Nebraska. Because the Grade B a population of less than 2,500 persons. contour of station KCCI-TV overlaps with that of television 5. The diversity of voices available to the population in station KETV, Pulitzer has requested a waiver of the du the overlap area, the second factor Pulitzer notes the Com opoly rule, Section 73.3555(b) of the Commission©s Rules, mission considers in its evaluation of duopoly waiver re which generally proscribes common ownership of two tele quests, is "substantial" in its own case, with one vision stations whose Grade B contours overlap. noncommercial and four commercial television stations, in addition to KCCI-TV and KETV, serving the entire area.3 Additionally, six of the largest 11 towns in the overlap area WAIVER REQUEST are served by cable television systems offering as many as 2. In support of its waiver request, Pulitzer relies on the 27 channels.4 Common ownership of KCCI-TV and KETV several factors cited by the Commission in previous cases will not diminish the current level of diversity in that both in which it has granted waiver of the duopoly rule. First. stations, according to the declaration of Ken J. Elkins, Pulitzer asserts, the population in the predicted overlap Pulitzer president and chief executive officer, will continue area is de minimis, comprising one percent or less of the total number of persons in each station©s Grade B contour

1 Pulitzer amended its application on May 20, 1993 to change Citadel Communications Company. Ltd., 8 F.C.C. Red 855 the assignee to KCCI Television, Inc. in lieu of Pulitzer Broad (1993)(11.3% and 10.7%); and Taft Broadcasting Partners Limit casting Company. However, we will refer to KCCI Television, ed Partnership, 7 F.C.C. Red 2854 (1992)(18% and 19.2%). Inc. as Pulitzer so as to avoid confusion with KCClrTV, the 3 Those stations are: KDIN-TV (noncommercial), Des Moines, television station. Iowa: KMTV (CBS), Omaha, Nebraska; WHO-TV (NEC), Des 2 The cases cited by Pulitzer are: Thomas J. Flatley, 1 F.C.C. Moines, Iowa; WOI-TV (ABC), Ames, Iowa: and WOWT (NEC), Red 4242 (1992)(0.99% and 2.0% of the area of the stations© Omaha, Nebraska. Grade B contours); Weigel Broadcasting Co., 4 F.C.C. Red 6200 4 The largest of those towns, Audubon, population 2,400. is (1989)(2.02% and 4.47%); Pegasus Broadcasting, Inc., 7 F.C.C. served by a cable system offering 24 channels, 8 of which are Red 8625 (1992), recon. pending (7.7% and 6.9%); Silver King off-the-air signals; Kimball, population 362, and Elk Horn, pop Broadcasting of Vineland , Inc.. 2 F.C.C. Red 324 (1986), recon. ulation 1,440, are served by a system offering 27 channels with denied, Press Broadcasting Co., 3 F.C.C. Red 6640 (1988), affd nine off-the-air signals; and Exira, population 978. Cumberland, sub nom. Office of Communication of the United Church of population 351, and Massena, population 518, are served by a Christ v. FCC, 911 F.2d 803 (D.C. Cir. 1990)(10.4% and 9.8%); system offering 15 channels with seven off-the-air signals. How-

144 9 FCC Red No. 1 Federal Communications Commission Record FCC 93-368 their separate network affiliations and KCCI-TV will enjoy children©s programming in Des Moines, similar to its wide autonomy in news, public affairs and other program "Videomax" television show, which is targeted to children ming decisions. ages 11 to 15. Local teenagers host the show and produce 6. The third factor scrutinized in duopoly waiver re features on a variety of topics. Finally, KETV©s new quests, Pulitzer states, the separateness of the respective Kavouras Weather System, Pulitzer notes, will be made markets, each with distinct service needs, economies and available to KCCI-TV. to aid in the. tracking of severe advertisers, is present here. KCCI-TV, located in the Des storms and weather patterns travelling from west to east. Moines area of dominant influence (ADI), the nation©s Common ownership will enable KETV in Omaha, situated 70th largest television market, and KETV, located within west of KCCI-TV in Des Moines. to send weather-related the Omaha ADI, the 73rd largest television market, trans information via satellite or microwave transmission so as to mit from sites approximately 130 miles apart. The discrete improve KCCI-TV©s weather reporting services. ness of the markets and the distance between the stations, Pulitzer argues, is illustrated by the local news and public affairs programming offered by each station. Because DISCUSSION KCCI-TV©s community of license, Des Moines. is the state 9. The ultimate objective of the duopoly rule, as well as capital of Iowa, Pulitzer maintains, its nonentertainment of the other multiple ownership rules, is to promote maxi programming focuses on issues pertinent to the people of mum diversification of program and service viewpoints and Iowa, and its weekly, locally produced public affairs pro to prevent an undue concentration of economic power gram, "Straight Talk," is representative of that focus. contrary to the public interest. Multiple Ownership Rules, KETV, by contrast, produces its local news and public 22 F.C.C. 2d 306. 307 (1970), recon. granted in part, 28 affairs programming, such as "Viewpoint" and "Kaleido F.C.C. 2d 662 (1971). In adopting the duopoly rule©s fixed scope," with a concentration on events and issues geared to standard of a prohibited overlap of Grade B service con Nebraska viewers. tours, the Commission sought to provide a greater degree 7. As for the Commission©s concern with regard to of certainty than under its prior rule, which prohibited the undue concentration of control, Pulitzer states, the overlap common ownership of television stations serving "substan area is completely within two counties, Audubon and Cass, tially the same service area." Multiple Ownership of Stan each of which is assigned to a separate ADI. Not only are dard, FM and Television Broadcast Stations, 45 F.C.C. 1476, the population and area in the overlap sector split between 1476 n.l, recon. granted in part, 3 R.R. 2d 1554 (1964). the Des Moines and Omaha markets, Pulitzer adds, but it However, the Commission maintained a policy of "flexibil is unlikely that a common owner of KCCI-TV and KETV ity," noting that the rule could be waived in cases where its could dominate public opinion in an area in which there application would be "inappropriate." Id. at 1479 n.12: is a competing CBS affiliate, KMTV, Omaha, and a com John Hay Whitney, 28 F.C.C. 2d 736. 752 (1971). Accord peting ABC affiliate, WOI-TV, Ames, Iowa. Moreover, Pul ingly, the Commission has granted waivers of the duopoly itzer asserts, neither station competes in the overlap area rule where signal overlap is de minimis, see, e.g., Hubbard for advertising. From January 1, 1992 to the present, ac Broadcasting, Inc., 2 F.C.C. Red 7374 (1987), or where the cording to Pulitzer, KCCI has solicited no local, regional or public interest benefits to be gained from waiving the rule national advertising in the overlap area. Similarly, all of would be greater than any detrimental effects resulting KETV©s 1992 local advertising was generated from from the overlap. See, e.g., Capital Cities Communications, businesses within its own market, the Omaha ADI, with Inc., 59 R.R. 2d 451, 465 (1985)(applicant proposed to the sole exception of its annual "Home in the Heartland" provide special programming to areas without their own program, which was solicited to advertisers in Elkhorn, local commercial VHP service). Iowa, a town located in the overlap area and in the Des 10. As for the de minimis overlap standard, our past Moines market. Under Pulitzer ownership, Pulitzer presi waiver cases have generally characterized this as an overlap dent and CEO Elkins pledges, neither KCCI-TV nor KETV area representing less than one percent of both the area will solicit advertising in the overlap area. and the population of the Grade B contour of each station. 8. Finally, Pulitzer maintains that not only would grant E.g., Hubbard Broadcasting, Inc., 2 F.C.C. Red at 7374; of its waiver request not contravene the fundamental poli Acadian Television Corp., 51 R.R. 2d 743. 746 (1982); cies served by the duopoly rule, but the benefits to be KSOO-TV, Inc., 43 F.C.C. 2d 879, 880 (1973). In the case achieved by its proposal would be in the public interest. before us, we note that the extent of the overlap, as deter First, Elkins represents that Pulitzer is "committed" to mined by the standard prediction model.5 falls short of this adding a locally produced weekday 5:00 p.m. news pro strict standard. However, the geographic area encompassed gram to KCCI-TV©s programming schedule, resulting in by the intersection of the two stations© Grade B contours is one hour of nightly local news, one-half hour before and well within the range of our past waiver cases, while the one-half hour after the CBS Evening News. Second, Elkins corresponding populations are each one percent or less, states that Pulitzer is also committed to producing local one of the smallest percentage combinations of any non- de

ever, Pulitzer maintains that the relatively modest level of cable elevation of the 3.2 to 16.1 kilometers (2 to 10 mile) sector" penetration in the overlap area, 51 percent in Audubon County used in the prediction method. Pulitzer has failed to dem and 37.6 percent in Cass County, may be due to the utilization onstrate that the terrain in the Iowa-Nebraska area covered by of rooftop antennas by many residents. the Grade B contours of KCCI-TV and KETV deviates from 5 We find that Pulitzer has failed to comply with the prerequi that in the prediction model. Accordingly, we shall rely upon site for submission of field measurements. Section 73.684(f) only the Pulitzer engineering data based upon the prediction allows an applicant to supplement the required prediction method. However, even if we were to rely upon the field model calculations with an alternative method, such as field strength measurements, both the overlap area and population measurements, in cases where the terrain in the general direc percentages would not comport with the Commission©s de tion from the antenna site "departs widely from the average minimis standard.

145 FCC 93-368 Federal Communications Commission Record 9 FCC Red No. 1 minimis duopoly case in which we have granted waiver. FEDERAL COMMUNICATIONS COMMISSION See, e.g., Sunshine Television, Inc., FCC 93-259, released May 21, 1993(0.62 percent and 1.15 percent of the overlap ping stations© Grade B contour populations); Thomas J. Flatley, 1 F.C.C. Red 4242 (1992)(0.27 percent and 1.13 percent of the stations© populations); Weigel Broadcasting William F. Caton Co., 4 F.C.C. Red 6200, 6200 (1989)(5.8 percent and 1.26 percent of the stations© populations). Thus, while not con Acting Secretary stituting a strict de minimis overlap of population or area, this combination would fall well within the Commission©s recent decisions regarding the minimum overlap permitted in a duopoly context. 11. We find that any detrimental effect of the minimal overlap present here is outweighed by the public interest benefits to be gained from a waiver of the duopoly rule. The public interest factors we consider include the number of media voices in the overlap area, the distinctiveness of the respective markets, the independence of the stations© operations with regard to programming and advertising, and the concentration of economic power. First, although cable penetration is not substantial, viewers in the overlap area will nonetheless be provided with a diversity of voices, specifically another ABC, another CBS and two NBC affili ates, in addition to a noncommercial station, all of which provide a Grade B signal to the entire overlap area. And Pulitzer©s pledge to maintain both KCCI-TV and KETV as separate network affiliates further advances the Commis sion©s diversity objective. 12. We are also persuaded that another Commission objective, the prevention of undue concentration of eco nomic power, will not be compromised by Pulitzer©s com mon ownership of KCCI-TV, broadcasting from Des Moines, Iowa, the center of the 70th largest television market, and of KETV, broadcasting 130 miles away in Omaha, Nebraska, the center of the 73rd largest market. Historically, neither of the stations typically compete for advertisers in the overlap area and Pulitzer pledges that neither will do so in the future. In any event, the presence in the overlap area of the Grade B signal of another CBS affiliate to challenge KCCI-TV and of another ABC affiliate to challenge KETV should continue to foster robust com petition. 13. Finally, Pulitzer has proposed to augment KCCI-TV©s programming with an additional half hour of local news each weeknight, to enhance KCCI-TV©s programming for children and to expand its weather coverage using state- of-the-art equipment based in Omaha. The Commission previously has taken these public interest factors into ac count when evaluating waiver requests, and we find that Pulitzer©s pledges provide additional support for grant in this case. See, e.g., Taft Broadcasting Partners Limited Part nership, 7 F.C.C. Red 2854, 2855 (1992). Consequently, we are persuaded, based solely upon factors developed in past duopoly cases, that granting Pulitzer a waiver is in the public interest and is consistent with the objectives of the multiple ownership rules. 14. Accordingly, IT IS ORDERED, That the request by KCCI Television, Inc. for waiver of the duopoly rule, Sec tion 73.3555(b), to permit common ownership of television stations KCCI-TV and KETV. IS GRANTED and That the application seeking consent to the assignment of the license for KCCI-TV from H&C Communications, Inc. to KCCI Television, Inc., BALCT-930308KE, IS GRANTED.

146 9 FCC Red NO. i______Federal Communications Commission Record FCC 93-368

CONCURRING STATEMENT

COMMISSIONER ANDREW C. BARRETT RE: Assignment of the License of Television Station KCCI-TV, Des Moines, Iowa

This Memorandum Opinion and Order grants a waiver request of the television duopoly rules in order to allow common ownership of KCCI- TV and KETV in Des Moines, IA. In particular, H&C Communications seeks consent to assign the license for KCCI-TV to KCCI Television, Inc., a wholly owned subsidiary of Pulitzer Broadcasting Company, which is the licensee of television station KETV of Omaha, Nebraska. Because the grade B contours of KCCI-TV and KETV overlap, Pulitzer has requested waiver of the duopoly rule. In this Memorandum Opinion and Order. I support the assessment of the merits of this waiver, particularly because a denial would result in over 37,000 people losing KCCI-TV©s Grade B signal and nearly 20,000 people losing off-the-air service of a CBS affiliate. In addition, the area involved in the overlap is essentially rural, and neither station competes in the overlap area for advertising, such that this combination is unlikely to result in undue concentration of economic power due to the relevant markets. Furthermore, this instance represents one of the smallest combinations of any non-de minimis duopoly case given the geographic areas and populations involved, which should indicate that this case is appropriately addressed by waiver. I concur, however, due to my concern that the Commission is taking this action through the waiver process. In particular, while the Commission©s rulemaking proceeding has. sought comment regarding the public interest considerations of modifying the multiple ownership rule, 1 the Commission has chosen not to use this valuable input and, subsequently, has decided to modify the rule by granting individual waivers. 2 In these previous instances, I dissented from the Commission©s decision on the grounds that there was no need to grant a permanent duopoly waiver for circumstances that had already been granted waivers pending the outcome of the television ownership proceeding. Contrary to the Commission©s policy prior to Pegasus.

1 Notice of Proposed Rulemaking in MM Docket Mo. 91-221, 7 FCC Red 4111 (1991) . 2 See In re; Act III Broadcasting of Buffalo. 8 FCC Red 885 (1993) (Dissenting statement of Commissioner Andrew C. Barrett). See also Pegasus Broadcasting. 7 FCC Red 8625 (1992) (Dissenting Statement of Commissioner Andrew C. Barrett).

147 FCC 93-368 Federal Communications Commission Record 9 FCC Red NO. i

the recent cases did not follow the practice of granting waivers in instances where (1) the overlap of the relevant service areas was minimis. (2) the combination would improve service to an unserved or underserved area, or (3) the waiver would preserve a failing station. Thus/ in those instances, I expressed concern that allowing the waiver could restrict the Commission©s ability to decide the television ownership issue in the future. I continue to believe that the Commission will best serve the public with respect to the television ownership issue by relying on the rulemaking process rather than the waiver process where the situations do not meet the past criteria. Because the circumstances involved in this case are sufficiently similar to past de minj.mis cases, I concur in the decision in thid Memorandum Opinion and Order.

148