9 FCC Red No. 18 Federal Communications Commission Record FCC 94-206 application if there are other compelling circumstances Before the that warrant approval. For the reasons set forth below, we Federal Communications Commission find that the proposed operation of WICD(TV) as a satellite Washington, D.C. 20554 is consistent with our policy. 3. In support of its request that WICD(TV) be permitted to operate as a satellite of WICS-TV, the applicant contends In Re Application of that its proposal meets the three criteria for presumptive grant. First, the applicant states, there is no overlap of the PLAINS TELEVISION PARTNERSHIP City Grade contours of the two stations. Second, (Assignor) WICD(TV)©s area of service is underserved in accordance with the Commission©s "transmission test." Finally, the applicant argues that no party would be willing and able to and File No. BALCT-931124KJ operate WICD(TV) on a stand-alone basis because of the nature of the Springfield-Decatur-Champaign market. In GUY GANNETT PUBLISHING CO. addition, the applicant argues that the Grade B overlap of (Assignee) WICS-TV and WICD(TV) only amounts to 2.6% of the population in the WICD(TV) contour and 2% in the For Consent to Assign the License for Station WICS-TV contour. The applicants point out that the Com WICD(TV), Champaign, IL mission found a similar overlap to be insubstantial when it approved the operation of WCCU(TV) (Urbana) as a sat ellite of WRSP-TV (Springfield). Springfield Independent MEMORANDUM OPINION AND ORDER Television, 3 FCC Red 1606, 1607 (1988). Further, the applicant states that approximately 11,348 people, or 1.1% Adopted: August 4, 1994; Released: August 25, 1994 of the total population served by the combined Grade B contours of WICD(TV) and WICS-TV reside within the Grade B contour overlap area. By the Commission: 1. The Commission has before it the unopposed DISCUSSION application to assign the license of television station 4. With regard to the first criterion of the public interest WICD(TV) (NBC), Channel 15, Champaign. Illinois, from presumption, the applicant has submitted an engineering Plains Television Partnership ("Plains") to Guy Gannett study which demonstrates that the present City Grade con Publishing Co. ("Gannett"). Gannett is the licensee of tours of WICD(TV) and WICS-TV will not overlap. Thus, WICS-TV (NBC). Channel 20, Springfield, Illinois. The the satellite proposal meets the first component of the Grade B contours of WICD(TV) and WICS-TV overlap. presumption. Thus, Gannett proposes to operate WICD(TV) as a satellite of WICS-TV, 1 in accordance with the satellite exception to 5. With respect to the second criterion, the applicant has the duopoly prohibition set forth in Note 5 to Section demonstrated that the area is underserved using one of our 73.3555 of the Commission©s Rules.2 two tests. The first is a "transmission test," which defines as "underserved" an area with two or fewer full-service sta 2. Under our satellite policy, See Television Satellite Sta tions licensed to the community.4 The applicant has shown tions, 6 FCC Red 4212 (1991),3 an applicant for television that there is only one other full-service television station satellite status is entitled to a presumption that the pro licensed to Champaign, television station WCIA-TV. Ac posed satellite operation is in the public interest if it meets cordingly, the applicant©s proposal meets the second cri three criteria: (1) there is no City Grade contour overlap terion for the satellite presumption. between the parent and the satellite: (2) the proposed satellite would provide service to an underserved area: and 6. Finally, to qualify for the presumption, an applicant (3) no alternative operator is ready and able to construct or must demonstrate that no alternative operator is ready and to purchase and operate the satellite as a full-service sta able to construct or to purchase and operate the proposed tion. Id. at 4213-14. The Commission will view favorably satellite as a full-service station. Initially, it should be noted applications that qualify for the presumption and are that WICD(TV) has never been operated as an indepen unrebutted by an opposing party. Id. at 4214. If an ap dent, stand-alone station, nor has it been offered for sale. plicant cannot qualify for the presumption, we will evalu See note 1. The applicant makes a claim that WICD(TV) ate the proposal on an ad hoc basis and grant the should be treated as a new or unbuilt station and that the request for satellite status therefore does not require a 1 We note that WICD(TV) has been operated under a Joint television satellite stations, which invites comment on whether Operating Agreement (the "JOA") with WICS-TV since 1980. television satellites should be exempted from the 12-station Under the JOA, the two stations have utilized certain common limit set out in the multiple ownership rules. Second Further personnel, jointly sold advertising and purchased film products, Notice of Proposed Rulemaking in Docket No. 87-8, 6 FCC Red and simultaneously broadcast certain network and non-network 5010 (1991). Grant of the application now before us will not programming. When Gannett purchased WICS-TV in 1985, it implicate the 12-station rule. assumed the JOA, which provides, in general, that WICS-TV 3 Although a petition for stay and partial reconsideration is makes available the funds to operate both stations and that pending, that petition does not raise matters germane to the revenues are shared 65% to WICS-TV and 35% to WICD(TV). issues under consideration herein. The JOA expires in 1995, and Gannett has decided not to renew 4 We have also defined an "underserved area" in terms of a the agreement. "reception test," but that test is not material here. See Televi 2 We note that there is an outstanding proceeding concerning sion Satellite Stations 6 FCC Red at 4215. 4435 FCC 94-206 Federal Communications Commission Record 9 FCC Red No. 18 showing that no alternative operator is willing and able to it now broadcasts. The analysis calculates that as a result of purchase the station and operate it as a stand-alone facility. the decline in program quality and the consequent erosion The applicant premises its claim on the odd size of its of i:he number of station viewers, WICD(TV) would suffer market, on overall broadcaster diversity in the market, on a decrease in operating cash flow from $63,000 in 1993 to precedent involving other satellite requests in the same a loss of $39,000 in 1997. The analysis further estimates a ADI, and on an economic study explaining the non-via decline in net after-tax cash flow from $13,000 in 1993 to a bility of WICD(TV) as an independent station. Although loss of $89.000 in 1997. The analysis computes a cumula these arguments do not persuade us that WICD(TV) should tive present value loss of $123,000 by the end of 1997.9 Ac be treated as a new or unbuilt station, they do justify cording to the applicants, the geographic configuration and satellite operation based on our ad hoc analysis. the competitive nature of the Springfield-Decatur- 7. Ad hoc analysis. Applicants note that WICD(TV)©s Champaign ADI make WICD(TV) an unattractive property market, the Springfield-Decatur-Champaign ADI, is an area to prospective purchasers. Indeed, a principal of Harrison, extending more than 150 miles from east to west and Bond and Pecaro opined that "no rational investor would containing three large cities.5 Of these cities, applicants contemplate acquiring WICD(TV) to operate it as a full- note, only Decatur is centrally located, while Champaign is service, stand-alone entity, given the dismal prospect for its located on the eastern side of the market. Consequently, profitability ..." The applicant therefore concludes that an WICD(TV) in Champaign cannot cover its entire market, attempt to sell the station to such a purchaser would be and the station would be at a competitive disadvantage, unavailing and that satellite operation is the only possibil applicants claim, if it were forced to operate on a stand ity for keeping WICD(TV) in operation. alone basis. Specifically, applicants note that 24 commer 9. The applicant has demonstrated convincingly the cial television stations can be viewed over the air in the ecomonic difficulties which would prevent WICD(TV) ADI and that seven commercial and three educational from operating successfully on a stand-alone basis, after the television stations are licensed to communities within the expiration of the JOA. As we previously noted, the geo market.6 In addition. 25 radio stations are licensed to com graphic area of the Springfield - Decatur - Champaign munities in the market, including fourteen in Champaign- market, which has fallen from the 64th largest television Urbana. Further, applicants state that cable penetration is market in 1988 to the 74th today, is unusual due to its 70% throughout the ADI and that six newspapers of either extreme length, and only stations that are centrally located daily or weekly circulation serve the Champaign-Urbana or have the use of other facilities can serve the entire area.8 Applicants contend that the plethora of communica market. See Springfield Independent Television, 3 FCC Red tions sources in the market represent formidable competi at 1607. We believe that the Springfield - Decatur - tion which would inhibit WICD(TV)©s ability to function Champaign market is not likely to support the operation of on a stand-alone basis. Applicants note that the Commis WICD(TV) as a stand-alone, full-service station.