Federal Communications Commission Record 5 FCC Red No

FCC 90D·33 Federal Communications Commission Record 5 FCC Red No. 15

and the following issues, relevant to those remaining ap Before the plicants prosecuting their applications, were specified for Federal Communications Commission adjudication in this proceeding: Washington, D.C. 20554 (1) If a final environmental impact statement is issued with respect to Victorson, Eison, Taylor, or Best in which it is concluded that the proposed MM Docket No. 88-558 facility is likely to have an adverse effect on the quality of the environment, to determine whether In re Applications of the proposal is consistent with the National Envi ronmental Policy Act, as implemented by 46 C.F.R. VICTORSO~ File No. BPH-870918MF §§1.1301-1319; GROUP, INC. (2) To determine whether the proposal of Taylor would provide coverage of the city sought to be EISON AND File No. BPH-870918MJ served, as required by 47 C.F.R. §73.315(a), and if ASSOCIATES, not whether circumstances exist which would war LIMITED rant waiver of that Section; (3) To determine whether there is a reasonable pos R.B. LEE RUST File No. BPH-870918MQ sibility that the tower height and location proposed by Victorson. Eison, Taylor and Best would con TAYLOR File No. BPH-870918NE stitute a hazard to air navigation; COMMUNICATIONS (4) To determine with respect to Eison whether the OF ROCHESTER applicant is financially qualified: (5) To determine which of the proposals would, on CHRISTIAN a comparative basis, best serve the public interest; DISCERNER, INC. File No. BPH-870918NB and (6) To determine, in light of the evidence adduced BEST BROADCASTING File No. BPH-870918NN pursuant to these specified issues, which of the ap· COMPANY, L.P. plications should be granted, if any.

For a Construction Permit for a 2. Subsequent to the release of the HDO, Memorandum Opinion and Order, FCC 89M-1915, released July 20, New FM Station on Channel 290A 1989, enlarged the issues against Best to include the fol in Rochester. New York lowing two additional issues (issues 7 and 8):

Appearances (7) To determine whether or not Best is financially qualified to construct and operate its proposed sta Shelley Sadowsky and Heidi P. Sanche on behalf of tion for three months without revenues, and, if not, Victorson Group, Inc.; ,'.fichael Drayer and Michael H. to determine the effect thereon on its basic quali Rosenbloom on behalf of Eison & Associates; Richard A. fications to be a Commission licensee; and Helmick on behalf of R. B. Lee Rust: Nora E. Garrote on behalf of Taylor Communications of Rochester; James C. (8) To determine whether or not Best engaged in Oyster on behalf of Christian Discerner, Inc.; and William misrepresentations in certifying as to its financial Crispin and William E. Kennard on behalf of Best Broad qualifications, and, if so, to determine the effect casting Company, L.P. thereon on its basic qualifications to be a Commis sion licensee.

INITIAL DECISION OF ADMINISTRATIVE 3. The air hazard issues (issue No. (3)) specified against LAW JUDGE JOHN M. FRYSIAK Taylor. Victorson and Best, as well as the principal city coverage issue (issue No. (2)) against Taylor were resolved Issued: July 3, 1990; Released: July 16, 1990 in favor of those applicants by Memorandum Opinion and Order, FCC 89M-662. released March 1, 1989. The contin gent environmental impact issue (issue No. (1)) and the PRELIMINARY STATEMENT air hazard issue (issue No. (3)) against Eison were, respec 1. This proceeding involves the mutually exclusive ap tively eliminated from the HDO and resolved in Eison's plications of Victorson Group, Inc. ("Victorson"), Eison favor by Order, FCC 89M-775, released March 13, 1989. and Associates, Limited ("Eison"), Taylor Communica The contingent environmental impact issue (issue No. (1)) tions of Rochester ("Taylor"), Christian Discerner,. Inc. against Victorson was deleted from the HDO by Order, ("Discerner"), Best Broadcasting Company, L.P. ("Best") FCC 89M-1671, released June 15, 1989. The contingent and R.B. Lee Rust ("Rust"). 1 These mutually exclusive environmental impact issue (issue No. (1)) against Taylor applications were set for hearing in Hearing Designation was deleted from the HDO by Order, FCC 89M-1670, Order, ("HDO") DA 88-1846, released January 10, 1989, released June 15, 1989. The contingent environmental

4506 5 FCC Red No. 15 Federal Communications Commission Record FCC 90D-33 impact issue (issue No. (1)) against Best was deleted from 7. In particular, Eison budgeted $441,500 to meet its the HDO by Order, FCC 90M-236, released February 7, projected expenses for construction and the first three 1990. months' operation of the station without recourse to an 4. A prehearing conference was held on June 7, 1989 ticipated revenues (Eison Exh. 6A). Of this amount, and hearings were held on September 25-29, 1989. The $130,000 has been estimated to cover preoperational legal hearing record in this proceeding was closed by the Pre and FCC filing fees, and an additional $201,000 has been siding Officer at the conclusion of the September 29, 1989 estimated to cover engineering, installation, equipment hearing session. Order, FCC 89M-2395, released October and other preoperational expenses and construction costs 4, 1989. prior to the commencement of operation (Id.). The re maining $110,500 has been budgeted for its estimated first three months of operation (/d.). Eison's budget includes Findings of Fact an equipment proposal from the Harris Corporation dated December 9, 1987 (Eison Exh. 6A at 7-35). Basic Qualifying Issue • Financial Qualification 8. Eison relies on a letter from the First National Bank in Durant, Oklahoma, stating the bank's willingness to 5. Eison and Associates, Limited. A financial qualifica provide a total of $600,000 in loan financing for the tion issue was designated against Eison in the HDO be Eison application (Eison Exh. 6B). As indicated in the cause Eison indicated in response to Section III of the bank's letter, $200,000 has been made immediately avail FCC Form 301 (October 1986 edition) that it was pres able as a line of credit to Allen Wheeler and David Webb ently unable to certify that it was financially qualified, but Jr., Eison's limited partners, to fund the prosecution and that its financial proposal was being formulated (HDO at pregrant expenses associated with the application (Eison para. 11). Eison amended its application on February 16, Exh. 6B). The $200,000 line of credit is secured by the 1989, reporting that its financial proposal had been ar personal guarantees of Messrs. Webb and Wheeler, and by ranged and that it was now financially qualified a $100,000 certificate of deposit. set aside by Messrs. (Victorson Exh. 8). By Jfemorandum Opinion and Order, Wheeler and Webb on a deposit at the First National FCC 89M-952, released March 24, 1989, Eison's amend Bank in Durant (Eison Exh. 6B). In addition. the bank ment was accepted. Because of the questions raised in has stated its willingness to extend a loan to Eison in the opposition to it, Eison's Motion for Summary Decision amount of $400,000 for the purposes of construction and on the designated financial qualification issue, filed con operation of the station for the first three months if Eison temporaneously with the February 16, 1989 amendment, is successful in obtaining the construction permit (Id.). was denied by the same Memorandum Opinion and Order. Eison's limited partners, Messrs. Wheeler and Webb, and its general partner, Carvin Eison, have confirmed in writ 6. Eison's September 11, 1989 further financial quali ing their willingness to personally guarantee and fication amendment and its direct case exhibit on the collateralize, to the extent indicated, the loan from the designated financial qualifications issue both included ( l) First National Bank (Eison Exhs. 6C and 6D). revised budgetary information reflecting an upward revi sion of $81,250 in Eison's estimate over the budgetary 9. Instead of relying on the line of credit, the partners information supplied in the February 16, 1989, amend have thus far made $100,781 in capital contribution from ment (Eison Exh. 6A at 4-6); 2 (2) a letter dated August their own funds in support of the application (Eison 30, 1989 from the First National Bank in Durant, Okla Exhs. 6 and 8). These funds were influxed directly by the homa, to Messrs. Webb and Wheeler (replacing the Feb partners without reference to any loans, with the excep ruary 8, 1989 letter) providing for $600,000 in total loan tion of funds in the amount of $21,695 made available by financing available for the prosecution of the Eison ap Messrs. Wheeler and Webb to Mr. Eison to cover his plication and subsequent construction and initial opera capital contribution commitments under the Amended tion of the station (Eison Exh. 6B at 36-37); (3) a letter Agreement of Limited Partnership (Eison Exhs. 6, 6E, 6F, dated August 10, 1989, from Messrs. Webb and Wheeler 7 and 8). The funds loaned to Mr. Eison by Messrs. Webb to John P. Martin, Vice President of the First National and Wheeler are evidenced by a Loan Agreement and a Bank in Durant confirming their willingness to personally Promissory Note (Eison Exhs. 6E and 6F). Aside from guarantee any funding extended by the bank for the FM these loaned funds, Mr. Eison has contributed $3,500 of station (Eison Exh. 6C at 38); (4) a letter dated September his own funds to Eison (Eison Exh. 6 at 3; Tr. 327, 334, 5. 1989, from Carvin Eison to John P. Martin, Vice 344-45, 396). President of the First National Bank in Durant confirm 10. Best Broadcasting Company, L. P. Wyoma Best, the ing his willingness to personally guarantee funding for the sole general partner of Best, certified that Best was finan construction and operational expenses loan (Eison Ex h. cially qualified to construct and operate the proposed FM 6D at 39); ( 5) a loan agreement dated September 1, 1989, station for three months without recourse to revenues by and between Carvin Eison and Messrs. Webb and when the Best application was originally filed with the Wheeler (Eison Exh. 6E at 40-44); and (6) a Promissory Commission on September 18, 1989 (Tr. 942-43). Note dated September 6, 1989, in the amount of $21,695 11. The financial qualification and certification issues from Carvin Eison to Messrs. Webb and Wheeler (Eison against Best were added in light· of the deposition testi Exh. 6F at 45-46). Eison's direct case exhibits on the mony of Best's sole general partner, Wyoma Best, which financial qualifications issue also included its original De revealed that prior to filing the Best application and cember 9, 1987 Harris equipment proposal (Eison Exh. 6 certifying the applicant financially qualified, Wyoma Best at 7-35); Eison's Amended Agreement of Limited Partner had not prepared an adequate budget of anticipated costs ship dated March 30, 1989 (Eison Exh. 7); and a Septem and did not have reasonable assurance of available funds. ber 8, 1989 Amendment to Eison's Amended Agreement In particular, Wyoma Best testified at her deposition that of Limited Partnership (Eison Exh. 8). she had no written cost estimates, had only a general idea of equipment costs, and had a September 15, 1987 letter

4507 FCC 90D-33 Federal Communications Commission Record 5 FCC Red No. 15 from Ragan A. Henry which discussed his loaning funds did not ask for, see, or review a personal financial state only for construction costs (as distinguished from the first ment from Best's 79.9% limited partner Vincent Henry three months operating costs) and which was missing (Tr. 739-40, 951). There is no evidence in the record that other key terms. Further, she had never seen any docu she ever asked for or reviewed a personal financial state mentation regarding Ragan Henry's assets, relying instead ment from Ragan Henry. Mr. Ragan Henry is the only upon oral assurances from Best's counsel, David Honig, person to whom Mrs. Best made a request for financing regarding Ragan Henry's purported financial capacity. 3 prior to the filing of the Best application (Tr. 932). She See Eison's June 19, 1989 Motion to Enlarge Issues. Best's did not contact any bank or other financial institution to July 3, 1989, Opposition to Motion to Enlarge Issues arrange financing for the Best application or for construc admitted that no written budget or financial plan existed tion and initial operating expenses (Tr. 933). prior to the filing of the Best application. 17. Ragan Henry's expressed willingness of September 12. The only direct evidence on Best's basic qualifying 15, 1987 to "personally lend Best ... up to $300,000 ... financial qualification and financial certification misrepre to build the station" did not state the terms of the poten sentation issues received into evidence was that which was tial loan, any anticipated repayment time frame or timely exchanged by Best on the September 11, 1989 deferment possibilities (Best Exh. 6). Nor did the Septem direct case exhibit exchange date. This evidence consisted ber 15, 1987 letter provide any additional information or of five exhibits. Best Exhibit 5 is a letter dated September any documentation regarding Ragan Henry having suffi 14, 1987, from Frederick Blake to Wyoma Best with an cient monies available in readily convertible assets to pay attached contract (Tr.866-68). Best Exhibit 6 is a letter for the cost of construction (Id. Tr. 932). dated September 15, 1987, from Ragan A. Henry to 18. Although Ragan Henry required personal guaran Wyoma Best. Best Exhibit 7 is a letter dated February 21, tees from Wyoma Best and Vincent Henry, none were 1989, from Ragan A. Henry to Wyoma Best. Best Exhibits provided prior to the filing of the application and were 8 and 9 are redacted Statements of Assets and Liabilities not drawn up until the eve of the hearing (September 21, of Ragan A. Henry dated August 3, 1987 and July 12, 1989) (Tr. 770-71, 776-881). 1989, respectively. The only unmasked portions of Best 19. Vincent Henry, who at the time the Best application Exhibits 8 and 9 are the title, date and the lump sum total was filed, held a 79.9% limited partnership interest, had assets, total liabilities and approximate net worth (Tr. no involvement in the financial certification (Tr. 726). He 869-75). was not responsible for putting together any of the finan 13. Best attempted to supplement its direct case exhibits cial aspects of the application (Tr. 746-47) and never with three additional documents (Tr. 709-18) -- the tran sought or even discussed financing for Best with his father script of the deposition of David E. Honig taken by Ragan Henry (Tr. 757-58). counsel for Eison on September 14, 1989 (subsequently 20. Mrs. Best testified that Best was relying upon herself identified as Best Exh. 11 (Tr. 929)), the transcript of the and Vincent Henry personally for all litigation expenses deposition of Ragan A. Henry taken by counsel for Eison (Tr. 950). However, neither one received any personal on September 14, 1989 (subsequently identified as Best financial information from the other (Tr. 734-36, 739-40, Exh. 12 (Tr. 929-30)), and an Agreement dated September 811, 951). 21, 1989 (subsequently identified as Best Exh. 10, Tr. 772-73). Each was rejected (Tr. 709-18, 875-76). 21. Prior to the filing of the Best application, a limited partnership agreement between Wyoma Best and Vincent 14. There is no evidence in the record that indicates Henry was executed (Eison Exh. 14; Tr. 740-41, 750-51).4 that Best ever prepared a budget or estimate of financial Pursuant to the express terms of the limited partnership requirements necessary to construct and operate the pro agreement, the sum total of the partners' financial obliga posed facilities for three months without revenue. Mrs. tion to the partnership was $5,000 (Eison Exh. 14 at Best engaged the services of Frederick Blake, a manage §§4.01 and 4.02). Any additional monies needed for pros ment consultant with Blake & Associates, to develop a ecution of the application could be influxed by either business plan for Best before September 17, 1987 (Best capital contributions or loans, but no requirement or Exh. 5). However, at the specific request of Mrs. Best, Mr. obligation to do so existed (Eison Exh. 14 at §4.05; Tr. Blake did not prepare the business plan for Best (Tr. 740-44). Despite the apparent understandings of both 867). Wyoma Best and Vincent Henry that litigation costs 15. Mrs. Best did receive from Best's communications would run to at least $30,000 just to cover costs through counsel prior to the filing of the Best application an oral the Initial Decision, no provision was ever made in any estimate of $30,000 for legal prosecution costs, which agreement between them to assure the availability of this included his legal fees, FCC filing fees, and the compara amount of money (Tr. 743-45, 802-03, 815-16, 855-56; tive hearing fee through the Initial Decision. Best's local 946-47, 950; Eison Exh. 14). counsel projected the costs of drafting a limited partner 22. Vincent Henry in the spring of 1989 decided to ship agreement at $800 (Tr. 943, 946, 949-950, 953, 957). reduce his liability and financial responsibility by reduc In discussing the project with Vincent Henry, Best's ing his equity interest in Best (Tr. 842-43; 971-72). Fol 79.9% limited partner, prior to the filing of the applica lowing Vincent Henry's decision to halve his equity by tion, Mrs. Best told him that construction costs would selling a 40% limited partnership equity interest in Best amount to approximately $300,000 (Tr. 745). By letter back to the partnership, Wyoma Best contacted Emilio dated September 15, 1987, Mrs. Best was advised by Serrano, the President of Ibero American Investors Corp. Ragan Henry that he would loan to Best, subject to ("Ibero") regarding that company becoming a limited certain contingencies, $300,000 to build the proposed sta partner in Best (Tr. 881, 933-34, 980-87). tion (Best Exh. 6). 23. On June 13, 1989, Ibero loaned Best $22,750 (Eison 16. Prior to the filing of the Best application, Mrs. Best Exh. 24; Tr. 1043, 1060). Ibero had not, at that time, did not review any financial statements. She did not re received SBA approval to become a limited partner in view her own financial statement (Tr. 951-52, 987). She

4508 5 FCC Red No. 15 Federal Communications Commission Record FCC 90D·33

Best (Tr. 987-91). The $22,750 loan is evidenced by a stock, 100 of them voting, and 100 non-voting shares. Promissory Note carrying a 13% per annum interest rate, Seventy shares of voting stock have been issued, and 30 signed by Wyoma Best individually and in her capacity as shares of non-voting stock. The officers, directors, and general partner of Best on August 4, 1989 (Eison Exh. 23; shareholders of Victorson are Scott Gudell, President, Di Tr. 987). Pursuant to the express terms of the Note, rector, and owner of 40 shares of voting stock (57.2% of payments in the amount of $689.65 per month are due to the voting stock); Jerdine Johnson, Secretary, Director, commence on July 13, 1990, with the entire principal and and owner of 15 shares (or 21.4%) of voting stock; Kath interest due and payable by June 13, 1994 (Eison Exh. 24; leen McGraw, Treasurer, Director, and owner of 15 Tr. 995-96). shares (21.4%) of voting stock; and Vincent Micciche, Jr., 24. Following receipt of SBA approval, Ibero became a owner of 30 shares of non-voting stock (Victorson Exh. 1; 20% limited partner in Best on July 21, 1989, after Mr. Tr. 31). All decisions have been made, and will be made, Serrano signed the amendment to the limited partnership by Gudell, Johnson, and McGraw (Tr. 43, 64, 103, 155). agreement in his capacity as President of Ibero (Tr. 29. Neither Victorson nor any of its individual voting 936-37, 988-91, 1048-49; Eison Exh. 22). At that time, or non-voting shareholders holds any ownership interest, Ibero made a $2,500 capital contribution to Best (Tr. office, or directorship in any medium of mass commu 1061). On or about August 4, 1989, Ibero disbursed an nications (Victorson Exh. 2; Tr. 32; see also Victorson additional $5,000 to Best (Tr. 1018). Thus, as of the Exhs. 3-5). hearing, Ibero had influxed a total of $30,250 into Best 30. Scott Gudell will be the General Manager of (Tr. 1062). Victorson's proposed FM station. He will have overall 25. Mr. Serrano understands that, by the express terms responsibility for all station operations. Gudell, along with of the amended limited partnership agreement, Wyoma Johnson and McGraw, will establish station policies and Best has the right to request funds from Ibero, but that he will directly oversee the station's sales department Ibero has no obligation to influx monies into Best, be (Victorson Exh. 3; Tr. 32, 48, 76). Gudell is currently yond its initial $2,500 capital contribution (Tr. 1061-64; employed as a contributing writer and account executive Eison Exh. 22). When Ibero became a 20% limited part with Freetime Magazine in Rochester, which publishes ner, Serrano understood the total estimated litigation ex there and in Buffalo. He has held those positions since penses for the entire project could be as high as $60,000 August 1980, has been an account executive since July to $75,000 (Tr. 1065-66). Prior to September 19, 1989, 1981 and Senior Account Executive since summer. 1982. neither Wyoma Best, Mr. Serrano, nor the lbero Board of If Victorson's application is granted, he will terminate his Directors had ever discussed the possibility of forbearing employment with Freetime Magazine or any other employ payment on Ibero's loans to the partnership (Tr. ment he may have in order to work full-time (a mini 998-1002, 1078-81). mum of 40 hours per week) at Victorson's FM station 26. On July 21, 1989, Mr. Julio Vasquez became a 20% (Victorson Exh. 3; Tr. 31, 46). Gudell is operating under equity limited partner in Best and made a $2,500 capital a restrictive covenant with his current employer, but it contribution (Tr. 1092). He understood at that time that applies to his future involvement in print, not broadcast he had no obligation to put any additional money into media (Tr. 69, 104). Best (Tr. 1094-95). He also understood at that time that 31. Gudell has resided in Rochester or its suburbs the total cost of the project, for purposes of ascertaining (within the predicted coverage contour of the proposed his 20% liability, was $60,000 over a three-year period station) since his birth in 1953 (Victorson Exh. 3; Tr. 30, (Tr. 1092-96). Vasquez was prepared to invest up to 69). $12,000 when he became a 20% limited partner (Tr. 32. Gudell has a B.S. degree in communication arts, 1094, 1096). He understood that these funds would be and an associate of science degree in Business Administra used for prosecution costs (Tr. 1098-99, 1103). However, tion. From October 1979 to July 1981, he worked as a he had never seen, at that time, any financial statement technical director with WUHF-TV, channel 30, in Roch for Best, any budgets, or any projections of legal expenses ester. He implemented operating procedures for the sta (Tr. 1098-99). tion and technically directed live programming and 27. On August 4, 1989, a partnership meeting was held switching, supervising two engineers. From June 1980 to for the purpose of discussing additional funding needs of September 1983, he worked as a producer with radio the partnership (Tr. 964-65). Wyoma Best had prepared, station WNYR, Rochester, a sister station to WUHF-TV. for presentation at the meeting, a budget of anticipated In addition to production, his duties included research, litigation costs which showed a bottom line of $63,250, writing, interviews, voicing and hosting an album review exclusive of an undetermined amount due for legal fees program (Victorson Exh. 3). not billed by David Honig since January 2, 1989 (Tr. 33. Gudell has been a member of the Rochester Profes 964-71; Eison Exh. 21). This projected $63,250 was only sional Sales Association of the Chamber of Commerce to cover the period from July through December, 1989 since 1984, its Treasurer from 1986 through 1989, and (Tr. 965-66). Neither Vincent Henry, Emilio Serrano, nor Vice President since 1988. In addition, he has been a Julio Vasquez were apparently aware that the $63,250 member of the Advertising Council of Rochester since total was not meant to cover the entire projected litigation 1986. He has also belonged to Citizens for a Quality expenses through to grant (Tr. 826-27, 1066, 1092-93). Philharmonic since 1987, and co-chaired its marketing committee form January 1988 through September 1988 Standard Comparative Issues (Victorson Exh. 3). 28. Victorson Group, Inc. Victorson is a corporation 34. Jerdine Johnson, a Black female, will be Victorson's organized under the laws of the State of New York. Its full-time (40 hours or more per week) News and Public certificate of incorporation was filed with the New York Affairs Manager, overseeing the development and produc State Department of State on September 4, 1987. tion of all news and public affairs programming. She will Victorson has authorized the issuance of 200 shares of act as liaison with the Rochester community and its or-

4509 FCC 90D-33 Federal Communications Commission Record 5 FCC Red No. 15 ganizations, and will be in charge of the station's EEO Rochester) (Victorson Exh. 5; Tr. 140-41). Irondequoit is program. Johnson will be involved with Gudell and contiguous to Rochester and within Victorson's proposed McGraw in the establishment of the station's policies city-grade contour; Webster is to the northwest of Roches (Victorson Exh. 4; Tr. 113). ter, and within Victorson's proposed 1 mV/m contour. 35. Johnson has lived in Rochester since 1969. During 40. In 1968, McGraw began her career in broadcasting the past school year, while still residing in Rochester, she as a bookkeeper at WHEC-TV and Radio in Rochester, attended Pratt Institute, studying Community Economic where she was responsible for the radio station's billing Development. Her current position is the Executive Di and for the radio and television stations' cash receipts. In rector of the North East Block Club Alliance (NEBCA), a March 1972, she began to work at W AXC(AM) as a community-based organization funded by the New York bookkeeper/billing supervisor until October 1977. From State Division of Housing and Community Renewal, October 1977 to January 1979, she worked as where she manages a $300,000 annual budget and super bookkeeper/officer manager for Radio Station WWWG vises a staff of seven in housing rehabilitation and devel with responsibility for all accounting functions for that opment, crime prevention and community organization. station and for the licensee's co-owned station in Bakers If Victorson's application is granted, she will terminate field, California and its billboard company in New York her current or any other employment to work full-time at City. In January 1979, she became business manager of the station (Victorson Exh. 4; Tr. 138). radio stations WEZO!WNYR, Rochester, where she super 36. Johnson's Rochester civic activities include: vised the accounting department and all accounting func tions until April 1983. In January 1980, she also became business manager for WUHF-TV, the radio stations' sister Member of the board of directors of Housing Op station. She remains as business manager of that television portunities from 1987 to 1988; station at this time. Her current duties, which will be Member of the board of directors of the National similar to those she will perform at Victorson's proposed Forum of Black Public Administrators from 1988 to station (except that she does not expect to supervise any the present; one in the accounting department when Victorson's sta Member of the board of directors of Action for a tion first commences operations) are the supervision of Better Community Parent Group from 1985 to the accounting department and all accounting functions, 1986; including supervision of all monthly activity, monthly closing of the financial statements, budget analysis, insur Member of the board of directors of Susan B. ance reporting, amortization schedules, cash management, Anthony Cooperative from 1986 to the present; personnel records, collections, preparation for budgets Member of the board of directors of the Jesse James and involvement in strategic planning (Victorson Exh. 5; Counseling Center from 1987 to the present; Eison Exh. 13; Tr. 147-48, 151). Member of the board of directors of the Urban 41. McGraw was a founding member of the Rochester League from 1986 to the present; Chapter of American Women in Radio and Television in 1981, and served as the Treasurer of the group from 1981 Treasurer of the Neighborhood Preservation Coali to 1984 (Victorson Exh. 5). tion from 1987 to 1989; and 42. Victorson intends to install auxiliary power gener Recently appointed to the Rochester Fight-Back ators at the studio and transmitter sites to enable the Task Force on Substance Abuse (Victorson Exh. 4). station to maintain its operations in the event of a power outage (Victorson Exh. 6; Tr. 32). 37. In addition, Johnson coordinates a residential and 43. Eison and Associates, Limited. Eison is a limited commercial development project involving the City of partnership formed under the laws of the State of New Rochester, the Lewis Street Center, Genesee Settlement York (Eison Exh. 1). The general partner of Eison is House, Marketview Heights Association, NEBCA, and the Carvin Eison and the limited partners are Allen Wheeler Urban League Economic Development Corporation. She and David Webb, Jr. (Id.). Mr. Eison holds a 25% part also volunteered for a juvenile class of IBPOE Elk in nership equity interest in and possesses 100% voting con 1985, organized one hundred community fashion shows trol of Eison (!d.). The limited partners, Messrs. Wheeler for charitable fundraising from 1981 to 1986, and she has and Webb, are passive investors in Eison, each holding a belonged to the Eldorado Temple of the Improved 37.5% partnership equity interest and no power to con Benevolent Protective Order of the Elks since 1988. Be trol the business of the partnership (!d.). fore she assumed her current paid position with NEBCA, 44. Eison's Amended Agreement of Limited partnership she volunteered as its president from September to De vests the control and direction of the business and oper cember 1986 (Victorson Exh. 4). ations of the partnership in the general partner and pro 38. Kathleen McGraw, a female, proposes to be hibits the limited partners from exercising control or Victorson's full-time ( 40 hours or more per week) Busi participating in the control of the business and/or oper· ness Manager, coordinating all of the station's financial ations of the partnership (Eison Exh. 1, 7 at §§4, 5). operations. She will be involved with Johnson and Gudell Eison's Amended Agreement of Limited Partnership con in establishing station policies and overseeing station op tains all of the provisions for insulation of limited part erations. McGraw will terminate her employment in or ners delineated by the Commission in its Ownership der to assume her position at Victorson's proposed station Attribution Rules, 47 C.F.R. §73.3555 Note 2(g)(2) (Eison (Victorson Exh. 5; Tr. 141). Exh. 7 at §5). In addition, Eison has certified to the 39. McGraw lived in Rochester from 1962 to 1973. She Commission that no limited partner will be involved in then lived in Webster, New York for two years, and since any material respect in the management operation of the 1975, she has lived in Irondequoit, one-quarter mile out proposed Rochester station (Eison Exh. 1). side the city limits of Rochester (her mailing address is in

4510 5 FCC Red No. 15 Federal Communications Commission Record FCC 90D-33

45. The current ownership and ownership structure of proposal (Tr. 241-46, 369-71). The record indicates that Eison have gone through an evolutionary process. The Garth Fagan and David Rose also looked for investors and Eison application was originally filed on September 18, attempted to arrange financing (Tr. 242, 250-51, 369-73). 1987, with Carvin Eison as the sole proprietor (Tr. 234, Rose obtained a bank letter, but it was considered 490-91). Mr. Eison first learned from Garth Fagan that unacceptable by Carvin Eison and Eison's counsel (Tr. Channel 290A in Rochester was available for application 242). approximately three weeks prior to the application filing 49. On the B-date, the original application was amend deadline (Tr. 223, 224, 356). ed to reflect the formation of the limited partnership, 46. During the short time prior to the application filing with Carvin Eison as the sole general partner with a 25% deadline, Carvin Eison had several discussions regarding equity interest and with limited partners holding a 75% this opportunity with Garth Fagan, Linda Chiavaroli and passive equity interest (Victorson Exh. 7). Since adequate David Rose, who would eventually become the original financing arrangements had still not be made, Carvin limited partners of Eison (Tr. 224-26, 230, 343). Garth Eison was unable to certify the applicant financially quali Fagan is a close friend and business associate of Carvin fied. Thus. the financial qualification issue was subse Eison (Tr. 224-255). Eison had done videotape, produc quently designated against Eison in the HDO. See supra, tion and promotion work for Fagan's dance troupe for Part II Al. many years (Tr. 224-25). Mr. Fagan first learned of the 50. Following the filing of Eison's B-date amendment, radio station opportunity from Ms. Linda Chiavaroli, a Mr. Eison and his three limited partners, Fagan, resident of California, who had learned of the opportunity Chiavaroli and Rose. continued to search for investors or from Michael H. Rosenbloom, who subsequently became other means of arranging sufficient financing for the ap Eison's counsel (Tr. 226-230). David Rose is the owner plicant (Tr. 242, 246, 248, 277, 370-74, 382, 384, 433). By and chief executive officer of Telesis Productions, Inc. the end of 1988, their efforts remained unfruitful and (Tr. 230). assistance was sought from communications counsel (Tr. 47. Prior to the filing of the application, these four 248, 271-72. 279-80. 371). Carvin Eison continued to individuals agreed in principle to form a limited partner maintain control over the business and affairs of the ship with each holding 25% of the equity and 25% of the partnership, communications with counsel paid partner financial obligation, and that Carvin Eison would be the ship bills, handled required publications and periodically general partner and the other three would be passive informed the limited partners of the progress of the oper limited partners (Tr. 233-34, 237-38. 343, 491-92). Carvin ations of the partnership business in compliance with Eison retained Mr. Rosenbloom as Eison's communica §4(h) of the Eison limited partnership agreement (Tr. tions counsel and communicated with Mr. Rosenbloom 275, 277, 386-87, 343, 493-95, 520-23: Victorson Exh. 7 and his firm (Tr. 432). He also retained and commu §f(h)). nicated with Eison's FCC engineering consultant, Alvin 51. At the time the HDO was released, Eison had not Andrus (Tr. 232, 433). Mr. Eison was solely responsible yet been able to arrange adequate financing. Faced with a for and directed all aspects of the preparation and filing $6,000 hearing fee due by January 27, 1989. and a 30-day of the application. Although it was intended that the time frame within which to secure the requisite financing applicant entity be owned by Carvin Eison, Garth Fagan. if the application were to be amended as of right under Linda Chiavaroli and David Rose, as a limited partner Section 73.3522(b) of the Commission's Rules. Carvin ship, the application was actually filed on September 18, Eison asked communications counsel Michael 1987, by Carvin Eison as sole proprietor (Tr. 234, Rosenbloom to attempt to secure prospective investors 237-38). Mr. Eison filed in his sole capacity because he (Tr. 279-80, 282-84, 288, 296-97, 497-98). Shortly before and Fagan, Chiavaroli and Rose were unable to finalize the due date for the $6,000 hearing fee, counsel located all the details of the limited partnership in the short two prospective investors -- Messrs. Webb and Wheeler three-week period prior to the filing deadline (Tr. 234, are long-term clients of counsel's firm, have utilized Mr. 490-91). At the time of filing, Carvin Eison was unable to Rosenbloom's services as a communications attorney in certify that the applicant was financially qualified and he other broadcast station ownership situations, are sophisti so noted on the application (Tr. 235). cated businessmen and have been personal friends and 48. Subsequent to the filing of the application, two business associates for over 20 years (Tr. 541, 571, 575, primary tasks needed to be accomplished before the De 577, 612-14). cember 31, 1989, B-date; formation of the limited partner 52. Based upon instructions from Carvin Eison, counsel ship and appropriate financial arrangements so that a provided Messrs. Webb and Wheeler with information certification of financial qualification could properly be regarding the Eison application. including financial in made (Tr. 237), 368- 69). During the next three months formation (Tr. 296-97, 497-98, 525, 577-78). Messrs. Webb in connection with the formation of the limited partner and Wheeler understood that the limited partners of ship, a limited partnership agreement was negotiated, Eison were unable to continue to finance the prosecution drafted and executed (Tr. 237. 254-58. 264-65, 378. of the applicant, that financing for the construction and 380-81, 492-95, 532-33: Victorson Exh. 7). Carvin Eison initial operation of the proposed station had not been unsuccessfully looked for an additional general partner to obtained, and that the hearing fee was to be paid to the strengthen the application (Tr. 239-40, 377-78, 381. 492); FCC by January 27, 1989 (Tr. 546, 579-80). and capital contributions were made (Tr. 232, 257-58. 53. Messrs. Webb and Wheeler also knew that Carvin 260-61, 494; Victorson Exh. 7). In connection with ar Eison was out of the country and that no final arrange ranging financing, Carvin Eison, with assistance of coun ment could be struck until he returned and met with sel. formulated a construction and operating budget and them5 (Tr. 295, 547-50, 581-82, 584). However, based obtained an equipment proposal (Tr. 206-07, 213-14, 394, upon lengthy discussion with Eison's counsel, the strength 425). Mr. Eison also sought out additional potential inves of their prior association with counsel and his firm, and tors in the applicant who could assist in financing the their trust in counsel's recommendation, Messrs. Webb

4511 FCC 90D-33 Federal Communications Commission Record 5 FCC Red No. 15 and Wheeler agreed to risk $6,000 in exchange for the limited partnership agreement was then prepared and ex potential opportunity to replace Eison's existing 75% ecuted by Messrs. Eison, Wheeler and Webb in March limited partners (Tr. 288, 293-94, 296, 298, 324, 54 7-48, 1989 (Eison Exh. 7; Tr. 338, 509-10. 562-63, 572-73) 556, 578-79, 583-86). 56. Neither Eison nor its sole controlling general part 54. In compliance with instructions from Carvin Eison, ner, Carvin Eison, hold directly or indirectly any owner counsel and Eison were also in overseas telephone contact ship interest in any licensee or permittee of any television throughout the early negotiations with Messrs. Webb and or radio station, in any cable television system, in any Wheeler (Tr. 292, 298). Mr. Eison agreed that Eison daily newspaper, or in any other media of mass commu would accept the $6,000 from Webb and Wheeler for the nications, with the exception of their interest in the Eison filing fee, but that no arrangement could be finalized application itself (Eison Exh. 2). unless and until Eison met with Webb and Wheeler and 57. Mr. Eison was employed from March 1979 to Sep approved of their association with Eison as limited part tember 1987 at Station WXXI-TV (PBS), Rochester, New ners (Tr. 293, 295, 298, 324, 525-26). Messrs. Webb and York (Eison Exh. 2). Initially he was employed as a Wheeler then wired communications counsel $6,000 for videographer for Station V.'XXI-TV (!d.). Mr. Eison then the filing fee to keep the Eison application going at least worked for two years as coordinating producer to obtain until a meeting could be arranged with Carvin Eison grants for program production at the station and to dis upon his return from France (Tr. 298, 325-29, 581-84). tribute grant money to producers for the creation and Subsequent to influxing the $6.000 to Eison and prior to production of original programming to be broadcast on meeting Carvin Eison, Messrs. Webb and Wheeler also WXXI-TV (ld.). For the last five years of his employment arranged for a $400,000 ear-marked loan to them from at Station WXXI-TV he served as a programming pro the First National Bank in Durant, Oklahoma, for the ducer/director (ld., Tr. 196). Mr. Eison tendered his res purpose of construction and initial operation of the pro ignation, effective September 25, 1987, from WXXI-TV spective Rochester radio station (Tr. 316, 325. 506-07. (ld.). Mr. Eison is no longer affiliated with the station 559-61; Victorson Exh. 8 at 40). This was done at Mr. (!d.). Eison ·s request, which counsel relayed to Webb and 58. Thereafter, Mr. Eison was employed by Telesis Pro Wheeler (Tr. 311). ductions, Inc .. a company engaged in the production of 55. Thereafter, a meeting was scheduled for February programming for television, which is owned by former 14, 1989, in Dallas. Texas, between Carvin Eison and Eison limited partner, David Rose (Eison Exh. 2). Mr. Messrs. Webb and Wheeler (Tr. 302, 587). Mr. Eison resigned from his position at Telesis Productions, Rosenbloom also attended this meeting, which lasted for Inc. on April 18, 1989 (ld.). Also in March or April 1989, four to five hours (Tr. 302, 588). During the course of the Mr. Eison formed a television and motion picture pro meeting, background information on Eison. Webb and duction company under the name Eison Telepictures, Inc. Wheeler was exchanged including information regarding (!d., Tr.357). Mr. Eison is the sole stockholder of this their respective existing media interests (Tr. 321-22, company (Eison Exh. 2: Tr. 346). Mr. Eison will fully 414-15, 428-29, 538, 588-91, 607-08); Carvin Eison agreed withdraw from any employment or business pursuits in to accept Messrs. Webb and Wheeler as substitute limited the event Eison's application is granted (Eison Exh. 3; Tr. partners (Tr. 302-03); Webb and Wheeler agreed to re 351 ). Mr. Eison also testified that if Eison were granted place the original limited partners of Eison (Tr. 304, the Rochester FM construction permit, he would with 545-46); and the terms of the arrangement were negoti draw from Eison Telepictures, Inc., and, if necessary, ated (Tr. 317, 337, 551, 555, 598). In particular. Webb dissolve the business (Tr. 349-52, 364 ). and Wheeler agreed to buy out the original limited part 59. Allen Wheeler, a passive investor in Eison holding a ners for an amount equal to their respective capital con 37.5% partnership equity interest and no power to con tributions to date (totalling $6,110) (Tr. 262. 277, 303-04, trol the business of the partnership, is a limited partner 326, 495, 545-47, 552-54, 589-90); to pay all outstanding with a 10.52% interest in KIFM Broadcasting Limited debts of the partnership (Tr. 277. 305, 326, 554-55); to Partnership, the permittee of Station KIFM(FM), San loan up to $400,000 to Eison for the purpose of funding Diego, California (Eison Ex h. 2; Tr. 197, 543-44, 570). the construction and initial operation of the proposed Rochester radio station (Tr. 307, 505-06, 552-54; 60. David E. Webb, Jr., a passive investor in Eison Victorson Exh. 8 at 38); to pay 75% of all remaining holds a 37.5% partnership equity interest and no power prosecution costs (Tr. 303-04. 552-54 ): to personally loan to control the business of the partnership, had no media ownership interests other than his interest in the instant Carvin Eison such funds as he might require to meet his 6 25% capital contribution obligation to Eison (Tr. 317-20, application until recently (Tr. 607, 611-12). 504-05, 536, 552-54, 594-95; Victorson Exh. 8 at 38); and 61. Carvin Eison. the sole controlling general partner of to accept repayment of any loans to Eison from his share Eison and Associates. Limited. proposes to be integrated of the proposed station's proceeds beginning six months into the day-to-day management of Eison's proposed FM after operation and extending over a five-year period broadcast station in Rochester on a full-time basis of at thereafter (Tr. 552-54, 595; Victorson Exh. 8 at 38). least five days and 40 hours per week if Eison's applica Carvin Eison amended the Eison application on February tion is granted (Eison Exh. 3). Mr. Eison will serve as 16, 1989, to report that Eison was now financially quali General Manager of the proposed station (Eison Exh. 3). fied to construct and operate the proposed station for As General Manager, he will oversee the activities of all three months without recourse to revenues, and that station departments, determine all station policies, and Messrs. Webb and Wheeler would replace Eison's original supervise the day-to-day operations of the entire station, limited partners (Victorson Exh. 8; Tr. 300-02, 310-11, including, but not limited to, the areas of programming, 316-17, 333-37, 418-22, 499-501, 507). An amended Eison promotion, technical operations. and business affairs (ld.). Mr. Eison consistently testified during cross-examination that he was firmly committed to work at the proposed FM

4512 5 FCC Red No. 15 Federal Communications Commission Record FCC 900-33 station on a full-time basis as General Manager and would 71. Rust is 38 years of age, married, and the father of withdraw from any and all· other business pursuits to two children. He attended the University of Rochester fulfill his commitment (Tr. 348-53, 363-66, 428). (September 1969-June 1971) and the University of Wis 62. Mr. Eison is a Black male and a citizen of the consin-Madison (September 1971-June 1973); he received United States (Eison Exh. 4). He has resided in Rochester, a Bachelor of Arts Degree with a major in journal New York, on a permanent, full-time basis since 1975 ism/mass communications. Rust also holds a general ra (Id.). If Eison is successful in this proceeding and is dio/telephone operator's license. Since graduation from· granted a construction permit, he will remain a full-time, college in 1973, Rust has been principally employed in permanent resident of Rochester (ld.). radio broadcasting. He currently is employed part-time as 63. Since 1976, Mr. Eison has been the videographer Program Coordinator/Operations Manager of noncommercial educational (public) Broadcast Station for Garth Fagan's Bucket Dance, an internationally re WGMC(FM), Greece, New York and as an announc nowned dance troupe based in Rochester (ld.). His re sponsibilities include the production of promotional er/programmer for commercial Broadcast Station material for radio and television and the operation of WRMM-FM, Rochester New York. In 1982, he established electronic field production equipment (Id., Tr. 366-67). Signal Mountain Productions and continues to own and operate that company on a part-time basis; Signal Moun 64. From March 1979 to September 1987. he was em tain Productions provides music recording and ployed at Station WXXI-TV ~PBS), Rochester, New York audio/visual production services as well as record and tape (Eison Exh. 4). During his last five years at WXXI-TV, he distribution services (Rust Exh. 1; Tr. 626-33). was a programming producer/director (Eison Exh. 4; Tr. 198). 72. From 1983 until the present, Rust has resided with in the 1.0 mV/m service area of the proposed station and 65. From October 1987 to April 1989, Mr. Eison was a currently resides in Webster. New York. During 1969-71, producer and director at Telesis Productions. Inc., a com while he was a student attending the University of Roch pany engaged in the production of programming for tele ester, he resided in Rochester, New York. From 1962-65, vision (Eison Exh. 4). he resided with his parents in Pittsford, New York, a 66. In the Spring of 1989. Mr. Eison formed his own suburb of Rochester (Rust Exh. 1; Tr. 629). production company, Eison Telepictures International. 73. Rust has extensive radio broadcast experience. Fol Inc., located in Rochester, New York (Eison Exh. 2; Tr. lowing is a listing of his broadcast positions, duties, and 346-4 7' 357). dates of employment: 67. Between 1975 and 1978 Carvin Eison donated time. i.e., teaching class three times a week. to the "All of Us" WRUR-FM 11/69-Sn1 Student programmer arts workshop. an organization funded in part by the City Rochester, NY of Rochester. to teach photography and video production. Since 1976 until the present. Mr. Eison has. on occasion, WRNL-AM 6n3-8n4 Announcer programmer Richmond, VA overnight Jazz/Album donated his services as videographer and archivist for the Rock show; audio/ radio Garth Fagan Bucket Dance, a dance troupe based in technician Rochester. Between 1983 and 1987. Carvin Eison attended Rust Communications 4n5-6n7 Programmer/Producer Career Day at various local high schools to assist and Group, Inc. for automated music tape service used by 5 advise students considering television and independent group FM stations. video production careers: in 1984 he received a certificate Adult Contemporary/ in appreciation for his conducting a workshop on careers Album Rock formats in communications for the students of the Rochester Edu WR.XL-FM m5-5n9 Program Director for Richmond, VA Album Rock format; cational Opportunity Center. In 1986. he donated his staff announcer; services to produce a videotape to support and promote programmer for weekly the activities of the Association of Black Communicators, Jazz show an organization whose purpose is to further the aspira WRNL-AM, WRXL-FM JOn9-1180 Acting Chief engineer Richmond, VA 5 kw directional AM, tions of Black communications professionals in the Roch 1-lO kw FM ester area (Eison Ex h. 4 ). WEER-FM 8/80-1182 Announcer, programmer 68. Auxiliary Power. Eison proposes to install auxiliary Warrenton, VA for Album Rock, Jazz, power equipment at both its studio and its transmitter in Folk formatted station Rust Communications 9/81-5182 Group Programming order to keep the station on the air in the event of a local Group, Inc. Supervisor for Country, power failure (Eison Exh. 5; Tr. 206-20). Adult Contemporary, 69. R. B. Lee Rust. R.B. Lee Rust is an individual Contemporary Hits for matted stations applicant, operating as a sole proprietor, for the Rochester WHAM-AM 9/83-3/85 Operations Director FM frequency (Rust Exh. 1). Rochester, NY WHFM-FM 8/84-3/85 Music Director, 70. R.B. Lee Rust intends to work full-time (a mini Rochester, NY Contemporary/Classic mum of 40 hours per week) as General Manager of the Hits format proposed station and will be responsible for hiring and WGMC-FM 10/86-present Announcer, programmer supervising all department heads and key employees, de Greece, NY velopment, determination, and implementation of all sta WKLX-FM 3187-11/87 Announcer/Programmer Rochester, NY "The Jazz Show" tion policies, and compliance with all Commission WGMC-FM 7188-present Operations coordinator policies and regulations. Rust will withdraw from all oth Greece, NY and technician er business, employment or other activities which would WRMM-FM 9/89-present Announcer/Programmer interfere with his integration commitment. Rochester, NY "Rochester's Jazz Life" (Rust Exh. 1).

4513 FCC 900·33 Federal Communications Commission Record 5 FCC Red No. 15

74. From 1987 until the present, Lee Rust has been a University (B.A. 1969) and holds law degrees from volunteer programmer for Public Radio Station American University (J.D. 1972) and George Washington WGMC(FM), Greece, New York, and has performed vol University (L.L.M. 1976). Mr. Oyster has been engaged in unteer (unpaid) work in the range of approximately the practice of communications law since 1974 and as a three-four hours per week at the station. Rust is a mem sole practitioner since 1985 (Discerner Exh. 1). Oyster ber (1986-present) of the Pyramid Arts Center, a commu currently devotes 30 hours per week on the average to the nity experimental performing and graphic arts practice of communications law; his law practice is the organization located in Rochester, New York, and donated sole source of income to support his wife and four chil his services to the Amnesty International Concert, which dren. If Discerner's application is granted, Oyster intends occurred at the Pyramid Arts Center (Rust Exh. 1; Tr. to reside in Rochester and to continue to practice com 624-628). munications law from Rochester, but to limit his time to 75. Rust proposes to install auxiliary power generating that endeavor to no more than 10 hours per week .(Tr. equipment at the transmitter and studio sites to assure 638-41). continuous service in the event of a commercial power 83. Discerner's sole principal, James L. Oyster, is Presi failure (Rust Exh. 2). dent and sole owner of Salt of the Earth Broadcasting, 76. Taylor Communications of Rochester, Inc. Taylor is a Inc., the general partner of Salt of the Earth Broadcasting, corporation organization under the laws of the Common Limited, permittee of WSNR-TV, Syracuse, New York. If wealth of Massachusetts {Taylor Exh. 1). Its mailing ad Discerner's application is granted, Mr. Oyster will divest dress is Golden Bear Plaza, 11760 U.S. Highway 1, Suite himself of all other cognizable media interests (Discerner 303, North Palm Beach, Florida 33408 (/d.). John J. Exh. 1). Taylor III owns 36.2% of the voting stock, and serves as 84. Mr. Oyster will divest himself of all other cog President, Treasurer, and a Director of the applicant (!d.). nizable media interests should Discerner be awarded the Lillian M. Taylor owns 12.8% of the voting stock, and permit in the comparative hearing. Mr. Oyster is pres serves as Clerk and a Director of the applicant {!d.). ently president and sole owner of Salt of the Earth Broad Henri J. DesPlaines does not have any ownership in the casting, Inc., general partner of Salt of the Earth applicant, but serves as the Executive Vice President {/d.). Broadcasting, Ltd., permittee of WSNR-TV, Syracuse, New 77. Integration. The principals of Taylor do not propose York (Channel 43) (Discerner Exh. 1). to be integrated in the operations of the proposed station 85. Best Broadcasting Company, L. P. Best is a New on a day-to-day basis (Taylor Exh. 2). York limited partnership whose sole general partner is 78. Diversification. John J. Taylor, Jr., Lillian M. Taylor Wyoma Best. Ms. Best holds 20.1% equity interest in the and John J. Taylor III own 51%, 12.8%, and 38.2%, partnership. The limited partners are Vincent · Henry respectively, of J.J. Taylor Companies, Inc. (Taylor Exh. (39.9% equity), lbero American Investors Corp. (20% 4). John J. Taylor, Jr. is Chief Executive Officer. Chair equity interest) and Julio Vasquez (20% equity) (Best man of the Board and a Director (Id.). Lillian M. Taylor Exh. 1). is Clerk and a Director (/d.). John J. Taylor III is Presi 86. Best Exh. 1 at 1. Ibero American Investors Corp. is dent, Treasurer, Chief Operating Officer, and Director a Minority Small Business Investment Company (/d.). Henri J. DesPlaines is Executive Vice President and ("MSBIC"), which is wholly-owned by Ibero American Chief Financial Officer (/d.). J.J. Taylor Companies, Inc. Action League, a tax exempt, nonprofit social service is the licensee of WCOD(FM), Hyannis, Massachusetts, organization (/d.). WTHT(FM). Portland, Maine, WEAT(AM) and WEAT 87. At the time of the filing of Best's application, FM, West Palm Beach, Florida. and WIVY(FM), Jackson Vincent Henry was the sole limited partner with a 79.9% ville, Florida (/d.). J.J. Taylor Companies, Inc. has limited partnership interest. Best's limited partnership entered into agreements to sell station WTHT(FM) to agreement was amended effective July 21. 1989 to reflect Fuller-Jeffrey Broadcasting Corporation of the Great State the ownership structure described above (Tr. 937; Eison of Maine and to acquire station WHLY(FM), Leesburg, Exh. 22). Florida, from General Broadcasting of Florida, Inc. (/d.). 88. Wyoma Best, Best's sole general partner, will work 79. John J. Taylor, Jr., Lillian M. Taylor, and John J. at Best's proposed station as general manager on a full Taylor III own stock in Taylor Communications of Syra time basis (at least 40 hours per week) (Best Exh. 3 at 1). cuse, Inc., an applicant for a permit to construct a new As general manager, Ms. Best will have ultimate respon FM station on Channel 290A, Syracuse, New York (!d.). sibility for all management, administrative, budgetary and John J. Taylor. Jr. is 51% percent shareholder, Clerk, and programming decisions relating to the operation of the a Director {/d.). John J. Taylor III is a 36.2% shareholder, station (/d.). President, Treasurer, and a Director ·(/d.). Henri J. 89. Ms. Best is currently employed full-time as the Vice DesPlaines is Executive Vice President (/d.). President for Communications, of the Rochester Chamber 80. Auxiliary Power. Taylor proposes to install auxiliary of Commerce. In the event that Best's application is grant power generating equipment at both the studio and trans ed, Ms. Best will resign her employment with the Cham mitter sites to ensure continued operation in the event of ber of Commerce (or any other full-time employment a power outage (Taylor Exh. 4). position that she may hold at that time), to fulfill her 81. Christian Discerner, Inc. Discerner is a non-profit integration commitment {/d.). tax-exempt organization. James L. Oyster is the sole of 90. Ms. Best resided continuously in Rochester, New ficer and director of the corporation (Discerner Exh. 1). York, from June, 1965 until February 7, 1989, at which 82. James Oyster intends to work full-time (a minimum time she moved to her current residence in Victor, New of 40 hours per week) as general manager of the proposed York (Best Exh. 3 at 1). Ms. Best's current residence in station and will be responsible for the day-to-day opera Victor, New York is within the 1 mV/m contour of Best's tion of the station. Mr. Oyster is a graduate of Duke proposed station (Id.; Tr. 1035).

4514 5 FCC Red No. 15 Federal Communications Commission Record FCC 90D·33

91. Ms. Best is a Black woman (Best Exh. 3 at 1). 1989), and a $200,000 line of credit made available to 92. Wyoma Best's civic activities are extensive and in limited partners Webb and Wheeler from the First Na clude the following: Urban League of Rochester (member, tional Bank in Durant, Oklahoma. To meet its construc 1969-present and board member, 1985-present); Citizens tion and initial operating expenses of $311,500, Eison is Commission for Quality Education 1969); Rochester relying on a $400,000 loan from First National Bank in Board of Education (1970-71); Rochester City Charter Durant, Oklahoma. The general and limited partners have Commission (member and committee head, 1972-73); complied with the bank's request to confirm their willing Monroe County Human Relations Commission (1973-77); ness to personally guarantee and collateralize the 400,000 United Way of Rochester (board member, 1977-present); loan from the bank. Commission on Quality Education (1980-82); Ibero 98. In light of the foregoing, it is ruled that Eison has American Investors Corporation, a MSBIC owned by a the reasonable assurance that sufficient funds are available non-profit Hispanic civil rights organization, lbero Ameri from committed sources to prosecute its application and can Action League (board member and committee chair, to construction and operate its proposed facilities for 1981-present); Rochester Riverside Convention Center three months without revenue. See e.g., Northampton Me (board member, 1984-present); Martin Luther King Com dia Associates, 4 FCC Red. 5517 (1989). Accordingly, the mission (1986-present); and Rochester Brainpower Advi financial qualification issue designated with respect to sory Board (1987-present). In 1980, Ms. Best received a Eison in the HDO IS RESOLVED in its favor. major achievement award from the Monroe County Hu man Relations Commission for her work in connection Financial Qualification and Financial Certification Mis with that organization (Best Exh. 3). representation Issues· Best Broadcasting Company, L. P. 93. Wyoma Best was employed at Station WHEC-TV, 99. Commission precedent holds that in order to prove Rochester, New York, from March 1972 through Decem reasonable assurance of financial qualifications at the time ber 1979 where she performed duties of a reporter, of certification, the applicant must adduce probative evi moderator and news anchor (Best Exh. 3). dence that, prior to certification, it engaged in serious and 94. Best holds no attributable interests in a medium of reasonable efforts to ascertain predictable construction mass communications (Best Exh. 2 at 1). Wyoma Best, and operation costs. And to establish the availability of Best's sole general partner, has served since 1982 as a funds to meet these estimated expenses, the applicant member of the Board of Directors of Greater Rnchester must provide substantial and reliable evidence showing Cable, Inc. ("GRCI"), which operates a residential cable sufficient net liquid assets on hand, or committed sources television system serving the city of Rochester, New York of funds to construct and operate for three months with (Id.). Ms. Best owns no stock in GRCI and is neither an out revenue. See, Northampton Media Associates, (supra.) officer or employee of GRCI; her exclusive role is that of 100. There is no evidence in the record that indicates an outside director. Ms. Best pledges to resign as a direc that Wyoma Best ever prepared a budget or estimate of tor of GRCI in the event that Best's application is granted financial requirements necessary to construct and operate (Best Exh. 2 at 1). 7 the proposed facilities for three months without revenue. 95. Auxiliary Power. Best proposes to install auxiliary Wyoma Best did receive an oral estimate from commu generators at the studio and transmitter sites (Best Exh. nications counsel of 30,000 for pre-grant litigation costs 4). through the Initial Decision. However, there is no record evidence of how a 300,000 estimate for construction costs was arrived at. There is also no evidence regarding es Conclusions of Law timates of operating costs. Basic Qualifying Issues 101. Additionally, not only did Wyoma Best fail to establish a basis for projected pre and post grant cost Financial Qualification Issue • Eison and Associates estimates, she also failed to secure reasonable assurance of 96. Eison's initial written budget included $100,000 for sufficient funds available to meet the projected costs. She estimated preoperational legal and FCC filing fees,$81,000 relied on receiving a loan from Ragan Henry, but his for preoperational construction, equipment and installa September 15, 1987 letter to her only offered to fund tion costs and $79,250 for three months operation without construction costs. No mention was made of pre-grant or recourse to revenues, for a total budget of $360,250. To operational costs. Additionally, Best did not establish that meet these costs Eison relied on a loan from Messrs. Ragan Henry as an individual (i.e., not a banking institu Webb and Wheeler in the amount of up to $400,000. The tion) was financially capable of making the loan. Further requisite reasonable assurance of the availability of these more, Ragan Henry's requirement of personal guarantees funds to Webb and Wheeler was provided by a letter from from the Best partner's was not complied with at the time the First National Bank of Durant, Oklahoma. Messrs. of the certification. Webb and Wheeler also agreed to loan Carvin Eison 102. Finally, although pre-grant costs were to be met by sufficient funds as needed to make his own capital con Vincent Henry and Wyoma Best, neither supplied finan tributions. cial statements as to their respective wherewithal to fund 97. Subsequently, Eison revised and increased its budget pre-grant expenses. estimates which included $130,000 for preoperational le 103. In light of the foregoing, it is ruled that at the time gal and FCC fees, $201,000 for preoperational engineer Wyoma Best certified to the Commission that Best was ing, equipment, installation and construction costs and financially qualified, she did not possess the reasonable $110,500 for the first three months operating costs, for a assurance of the availability of sufficient funds for the total estimated budget of $441,500. To meet prosecution prosecution of the application and for the construction and pre-grant costs, Eison is relying on capital contribu and initial operation of the station and that she knowingly tions made by its partners ($100,781 as of September 8, misrepresented to the Commission that she had such rea-

4515 FCC 90D-33 Federal Communications Commission Record 5 FCC Red No. 15 sonable assurance. Accordingly, Best Broadcasting Com Eison actively participated in all phases of the prosecution pany, L.P. (File No. BPH-870918NN) IS DISQUALIFIED of the application and that he was the sole principal who for filing a false financial certification. ever managed and controlled the applicant. The record 104. The record shows that Best is also presently finan also shows that none of Eison's limited partners either in cially unqualified. There still is no record proof of any the pre-formation stage or in the pre-organizational stage basis for Best's cost estimates. Secondly, although Wyoma ever intended to participate in management or exercise Best ~eceived a second letter from Ragan Henry which any degree of control. The actions done by the limited now mcluded a reference to operational costs the letter partners in seeking or securing financial funding are per did not specify the repayment terms of the proposed loan. fectly permissible under Commission policy and The personal guarantees of Best's partners were never precedent. Ownership Attribution Reconsideration Order, supplied to Ragan Henry as requested in his commitment 58 RR 2d 604; Cuban - American Limited, 2 FCC Red letter. Although Ragan Henry supplied his financial state 3264 (Rev. Bd. 1987). The contacts that Mr. Eison had ments for the hearing, almost all of the financial informa with Eison's limited partners did not compromise Mr. tion was redacted rendering them meaningless. Eison's total control of the applicant or the process of the . 105. Based on the record evidence, Best failed to carry application. The business arrangements between Mr. Its burdens of proof and proceeding with the evidence Eison and Messrs. Webb and Wheeler were properly and with respect to the financial certification issue. It is con timely concluded prior to the Eison February 16, 1989 cluded that Best does not have the reasonable assurance of Amendment. All of the reporting and disclosures made by sufficient funds readily available for prosecution, con Eison were timely filed. Finally, the record shows no struction or initial operation of the proposed station and impediment to Mr. Eison being able to carry out his IS HEREBY DISQUALIFIED. full-time integration pledge. Mr. Eison has testified that he will withdraw from his present business. Standard Comparative Issue 111. Mr. Eison's proposed integration is enhanced by his local residence, minority status, civic involvement and 106. All of the applicants except Best have been found broadcast experience. basically qualified. Since Best has failed to meet basic qualifying issues, its application is denied, and Best is not 112. R. B. Lee Rust. Rust will be credited with 100% entitled to comparative consideration. full-time integration credit the participation of its sole principal as general manager. Mr. Rust's proposed in tegration is enhanced by his local residence, civic partici Diversification pation and broadcast experience. 107. Victorson, Eison, Rust, Christian Discerner have 113. Taylor. Taylor does not seek any quantitative no media interests cognizable under the diversification integration credit, nor is it entitled to any residual qualita criteria. Accordingly no comparative demerit is incurred tive enhancement credit. by any of them under the diversification criterion. 114. Christian Discerner. Discerner will be credited with 108. Taylor's principals own four radio stations which the 100% full-time integration credit for the participation are located in Massachusetts, Maine and Florida. Since all of James Oyster as general manager of the proposed sta of Taylor's attributable broadcast interests are in out-of tion. Mr. Oyster had promised that he would withdraw st~te areas and distant f~om Rochester, New York, Taylor from the practice of law completely if required in order will be assessed a slight to moderate diversification to meet the integration commitment. There is no record demerit. See Hispanic Owners, Inc., 99 FCC 2d 1180, 57 evidence that would cast doubt on Mr. Oyster's ability or RR 2d 695 (Rev. Bd. 1985). intent to effectuate his integration piedge. Mr. Oyster's integration proposal is enhanced for his proposed future Integration local residency. 10_9. Victorson. V_ictorson is entitled to 100% integration credit for the full-time participation of its principals Scott Auxiliary Power Gudell (57.2% of the voting stock), Jerdine Johnson 115. All applicants have proposed auxiliary power fa (21:4% voting control) and Kathleen McGraw (21.4% cilities at both the studio and transmitter site and each is votmg control). Each will hold a position enumerated by entitled to a slight preference for proposing auxiliary the Commission as managerial. See Policy Statement on power facilities. Comparative Broadcast Hearings, 1 FCC 2d 393, 5 RR 1901 (1965). There is no record evidence of any impedi ment that would hinder any of Victorson's integrated Ultimate Conclusions principals from performing their respective outlined tasks. Gu_dell's participation is enhanced by his lifelong local 116. Victorson, Eison, Rust and Discerner merit full residency, broadcast experience and civic involvement. time quantitative integration credit. Taylor with no in Johnson's participation is enhanced by her local tegration proposed is eliminated. Best has been residency, civic participation, and her female and minor disqualified. Discerner's integration proposal only is en ity status. McGraw's participation is enhanced by her hanced by Mr. Oyster's promise of future local residence, local residency, civic involvement, female status and and in light of the remaining applicants' stronger en broadcast experience. hancement credits it too must be eliminated. As between Eison and Rust, Eison's proposal is preferred because 110. Eison. Eison will be credited with 100% full-time Eison bests Rust by virtue of its minority status credit and integration for the participation of its general partner greater local residence credit. As between Eison and Carvin Eison. The competing applicants complain of al Victorson, Eison is the winner because it receives greater leged irregularities in the operation of Eison which they credit for minority status (100% vs. 21.4%), and broadcast believe compromise Eison's integration proposal but those experience (100% vs. 78.6% ). Victorson gets greater fe- arguments are rejected. The record clearly shows that Mr.

4516 5 FCC Red No. 15 Federal Communications Commission Record FCC 90D·33 male status credit ( 42.8% vs. 0% ), but this does not 4 A draft limited partnership agreement was sent by Ragan outweigh Eison's minority status credit advantage. Minor Henry to Best's local counsel, James Locke. See Order, FCC ity enhancement is equivalent to local residence. See Ra 89M-1666, released June 14, 1989 (Tr. 1025). dio Jonesboro, Inc., 100 FCC 2d 941, 945, 57 RR 2d 1564 5 Mr. Eison was in France during the latter part of January (1985). See also, Religious Broadcasting Network, 3 FCC 1989. Although he understood from counsel that this was an Red 4085, 4101, 65 RR 2d 56 (Rev. Bd. 1988). Addition inopportune time to travel overseas (with the vital hearing ally, Mr. Eison's civic participation credit is of greater deadline approaching at the Commission), it was imperative that weight than Mr. Gudell's. he make the trip for personal reasons (Tr. 284-65, 292, 496-97, Accordingly, IT IS ORDERED that unless an appeal 524-26). from this Initial Decision is taken by a party, or the 6 On October 30, 1989, an application to assign the license of Commission reviews the decision on its own motion in Station KBIX(AM), Muskogee, Oklahoma and the construction accordance with Section 1.276 of the Rules, the applica permit for Station KBIX(FM), Wagoner, Oklahoma, from Em tion of Eison and Associates, Limited (File No. BPH- body Broadcasting Company to BIX Broadcasting Company was 870918MJ) for a construction permit for a new FM filed with the Commission. See File Nos. BAL-891030EB and station on Channel 290A at Rochester, New York IS BAPH-891030EC. David E. Webb, Jr. is the sole shareholder, the GRANTED, and the applications of Victorson Group, Chief Executive Officer and President of BIX Broadcasting Inc. (File No. BPH-870918MF), R.B. Lee Rust (File No. Company. BPH-870918MQ), Taylor Communications of Rochester 7 Ms. Best's divestiture commitment was reported in BBC's (File No. BPH-870918NE), and Christian Discerner, Inc. 8 application as originally filed. See Application of Best Broadcast (File No. BPH-870918NB) ARE DENIED ing Company, L.P., File No. BPH-870918NN, Exhibit No. 1). 8 In the event exceptions are not filed within 30 days after the FEDERAL COMMUNICATIONS COMMISSION release of this Initial Decision and the Commission does not review the case on its own motion, this Initial Decision shall become effective 50 days after its public release pursuant to Rule 1.276(d).

John M. Frysiak Administrative Law Judge

FOOTNOTES 1 Eight other applications were dismissed as follows: Donna B. Crawford (at request of applicant), Order, FCC 89M-4841, re leased February 13, 1989; Community Broadcasting Foundation, Inc., Rochester Broadcasting Corporation, Agape Radio, Inc. and Dolores Boyd, d/b/a Lake Broadcasting, Inc. (failure to pros ecute), Order, FCC 89M-504, released February 15, 1989; Knight Radio, Inc. (at request of applicant), Order, FCC 89M-1405, released May 10, 1989; Upstate FM Limited Partnership (failure to prosecute, Order, FCC 89M-2380, released September 29, 1989; and SpaceCom, Inc. (at request of applicant), Order, FCC 89M-2383, released October 2, 1989. 2 Eison's September 11, 1989 amendment contained a state ment describing the upward revisions in the budgetary informa tion and explaining that the upward revisions were made in light of the availability of significant financing to Eison through the financial assistance of limited partners Webb and Wheeler and do not reflect any lack of support for Eison's earlier cost estimates. The increase in the projected financial requirements from the original December .1987, budget estimate of $360,250 to the upwardly revised September 1989 budget of $441,500 in cludes increases in estimated pregrant legal expenses ~nd preoperational miscellaneous contingency expenses; and in creases in initial three months operational expenses for music licensing, for payroll for sales, general and administrative em ployees, for transmitter building rent, and for miscellaneous contingency expenses (See also Tr. 391-94. 435-43, 530). 3 Ragan Henry is not a party to the Best application. He is the father of Vincent A. Henry, a limited partner in Best who originally held a 79.9% limited partnership interest in the ap plicant, which was later reduced to 39.9% (Best Ex. 1; Tr. 758, 828-29; 979-80). Ragan Henry requires members of his family to be equity owners in applicants before he will provide the ap plicant with a financing letter (Tr. 763-68).

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