Federal Communications Commission FCC 96-481 Before the Federal
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Federal Communications Commission FCC 96-481 Before the Federal Communications Commission Washington, D.C 20554 In re Application of ) ) WPRA, Inc. ) (Transferor) ) ) and ) BTC-960318EE ) Empresas Bechara, Inc. ) (Transferee) ) ) For Transfer of Control of Licensee of ) WPRA(AM), Mayaguez, Puerto Rico ) MEMORANDUM OPINION AND ORDER Adopted: December 16, 1996 Released: January 3,1997 By the Commission: 1. The Commission has before it the above-captioned application for transfer of control of the licensee of WPRA(AM), Mayaguez, Puerto Rico, from WPRA, Inc. to Empresas Bechara, Inc. ("EBI"). There is a related request for permanent waiver of 47 C.F.R. § 73.3555(c), the Commission©s one-to-a-market rule, which restricts common radio and television station ownership in the same market1 The application is unopposed. For the reasons stated below, we will grant the waiver request and the application for transfer of control of the licensee. 2. Jose A. Bechara, Sr, Chairman of the Board and the single-largest stockholder with a 30.14% interest in the proposed transferee, EBI, is also a director and holder of a non- cognizable 21.3 % minority stock interest in Western Broadcasting Corp. of Puerto Rico ("Western"), licensee of independent VHP television station WOLE-TV, Aguadilla, Puerto Rico.2 ©Section 73.3555(c) of the Commission©s rules prohibits the common ownership of radio and television stations in the same market if the 2 mV/m contour of an AM station or the 1 mV/m contour of an FM station encompasses the entire community of license of a television station or, conversely, if the Grade A contour of a television station encompasses the entire community of license of an AM or FM station. S§£ 47 C.F.R § 73.3555(c). 2Mr. Bechara©s 21.3% stock interest in Western is not cognizable under the Note 2(b) exception to 47 C.F.R. Sec. 73.3555 because a single stockholder, Du Art Film Laboratories, holds a controlling 63.8% interest in that company. However, he has an attributable interest in the WOLE-TV licensee through his position as a director, 2581 Federal Communications Commission FCC 96-481 Since 1959, Mr. Bechara has also held an interest as a principal and controlling shareholder of WKJB AM-FM, Inc., licensee of Stations WKJB(AM) and WKJB-FM, Mayaguez, Puerto Rico.3 As a result of the instant transaction, Mr. Bechara, through EBI, will acquire a cognizable interest in WPRA(AM), Mayaguez, Puerto Rico, in the Mayaguez-Aguadilla market. The proposed acquisition complies with local radio ownership provisions of the recently amended multiple ownership rules, 47 C.F.R. Sec. 73.3555(a)(l).4 However, since the Grade A contour of WOLE- TV encompasses Mayaguez WPRA(AM)©s city of license grant of the subject transfer of control application would result in Mr. Bechara having attributable interests in radio and television stations which require a waiver of the one-to-a-market rule. See 47 C.F.R, § 73.3555(c). Request for Waiver of the One-to-a-Market Rule 3. EBI bases its waiver request on the one-to-a-market standards enunciated in the Second Report and Order in MM Docket 87-7, 4 FCC Red 1741 (1989) ("Second Report and Order"), recon. denied in part and granted in part ("Second Report and Order Recon."i 4 FCC Red 6489 (1989). Under these standards, the Commission presumptively favors requests involving (1) stations serving the top 25 markets where at least 30 separately owned, operated, and controlled stations will remain following the proposed combination; or (2) "failed" stations (stations that have not been operational for a substantial period of time or are involved in bankruptcy proceedings). Otherwise, the requests must be evaluated under a more rigorous case- by-case approach. 47 C.F.R. § 73.3555(c) note 7. 4. Since Mayaguez-Aguadilla is situated in Puerto Rico and not ranked by Arbitron as part of the U.S. television Area-of-Dominant Influence ("ADI") nor by Neilsen through statistics reflecting Designated Market Areas ("DMA"), and no other comparable national rating service applies to Puerto Rican markets, the waiver provisions applicable to the top-25 TV markets cannot be readily applied. In similar situations, the Commission has found it unnecessary to determine whether alternative data support a presumptive waiver under the top-25 TV market/30- voice standard, where, as here, the case-by-case standard for a one-to-a-market waiver has been met. See WLDI. Inc. (WRAirAMl San Juan. Puerto Rico). 10 FCC Red 12,150, 12,151 (1995). under Note 2(h) to 47 C.F.R. Sec. 73.3555. HJnder the grandfathering provisions attending the adoption of the one-to-a-market rule, Mr. Bechara©s interests in WOLE-TV and WKJB AM-FM were not required to be divested. See Amendment of Commission Rules Relating to Multiple Ownership. 22 FCC 2d 306 (1970) (subsequent history omitted). 4Mr. Bechara©s proposed ownership interest in two AM stations and one FM station with overlapping signals complies with the local ownership rules which permit the common ownership of two AM stations and one FM station in markets with as few as six stations; in a radio market with 45 or more commercial radio stations, as here, a party may own, operate, or control up to eight commercial radio stations, not more than five of which are in the same service. 47 C.F.R. Sec. 73.3555(aXlXO- F r *e purpose of applying the local radio ownership rules, the applicant has submitted the required contour overlap showing which indicates that the relevant market contains 61 radio stations. Accordingly, the proposed transaction complies with the local radio ownership rules. 2582 Federal Communications Commission FCC 96-481 Moreover, no claim of a "failed station" is made. Under the case-by-case standard, the Commission makes a public interest determination based upon the following five criteria: (1) the public service benefits that will arise from the joint operation of the facilities such as economies of scale, cost savings and programming and service benefits; (2) the types of facilities involved; (3) the number of media outlets owned by the applicant in the relevant market; (4) the financial difficulties of the stations involved; and (5) the nature of the relevant market in light of the level of competition and diversity after joint operation is implemented Se£ Second Report and Order. 4 FCC Red at 1753. In support of its request, EBI submits a showing which addresses those case-by-case factors applicable to its present situation.5 __ 5. Benefits of Joint Operation. EBI acknowledges mat the nature of the instant waiver request, which does not propose joint-ownership and operation of WOLE-TV and WPRA(AM), but instead, the common directorship of Mr. Jose A. Bechara, Sr., does not present the type of cost-savings typically found in prior joint TV-radio ownership combinations approved by the Commissioa Nevertheless, EBI maintains that approval of the proposed transaction would allow the continued consolidation of the WPRA(AM) and WKJB(AM)-FM studios.6 Specifically, EBI argues that WPRA(AM) will continue to share the same production and studio facilities as WKJB (AM)-FM, which will increase WPRA(AM)©s news-reporting capabilities and provide the station with access to an Associated Press newswire-facility, as well as otherwise unavailable access to prominent local political and social figures who frequent the WKJB studios. Moreover, the continued consolidation of the radio facilities will afford WPRA(AM) the ability to resist the current trend of local broadcasters offering only rebroadcasted programming originated in San Juan, permitting it instead to focus on concerns relevant to the Mayaguez community. In addition, EBI©s participation would provide an infusion of resources to allow relocation of the station©s transmitter and antenna from its current flood-prone site to the WKJB site, and there provide auxiliary power, thus enabling the station to remain on air during floods, tropical storms, and other commercial power interruptions. Based on EBI©s participation, the transferee contends that it would also be able to explore other technical improvements including a power increase, which it cannot now afford. Further, EBI estimates that the joint-operation of the radio stations will result in annual savings of in excess of $100,000 through staff consolidation, combined administrative functions, and reduced rent. 6. Other Media Outlets/Types of Facilities. As noted above, EBI©s principal, Mr. Jose A. Bechara, Sr., has attributable interests in WKJB(AM)-FM, Mayaguez, and WOLE-TV, 5We note that not all five of the factors mentioned are necessarily relevant in each case. Second Report and Order Recon.. 4 FCC Red at 6491, para. 18; South Central Communications Corporation. 5 FCC Red 6697, 6698 (1990). 6WPRA(AM)©s current licensee, WPRA, Inc. is constituted of certain principals of WKJB AM-FM, Inc., although not including Mr. Jose A. Bechara, Sr. Consolidation of the WPRA(AM) and WKJB(AM)-FM studios commenced following the Commission©s recent approval of WPRA, Inc.©s acquisition of WPRA. EBI maintains that such consolidation will continue subsequent to Commission approval of the instant transaction and associated waiver request, resulting in the continuation of substantial cost savings to the AM station. 2583 Federal Communications Commission FCC 96-481 Aguadilla Other than these facilities, he has no other media interests in the market. WPRA is an unlimited-time Class B AM station which operates on 990 kHz at 1 kW power from a non- directional antenna. WKJB(AM) is also a Class B AM station which operates on 710 kHz at day-time power of 10 kW and .75 kW night-time power from a non-directional antenna WKJB- FM is a Class B FM station operating on 99.1 MHz with 25 kW effective radiated power (ERP) from an antenna height of 601 meters height above average terrain (HAAT).