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, )

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,

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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 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.

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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.

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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). WOLE-TV operates independently on Channel 12 with 275 kW ERP from an antenna height at 665 meters HAAT. EBI asserts that, in view of the facilities involved, there is no danger that the proposed combination will dominate the market from a technical standpoint. EBI indicates that although only one other AM station has comparable facilities to WKJB(AM), 14 out of 40 AM stations in die market have facilities more powerful than those of WPRA(AM), and 10 of 21 FM stations have facilities superior to those of WKJB-FM In addition, six out of 18 TV stations in the market have facilities substantially superior to those of WOLE-TV. Although EBI also contends that co-owned combinations WORA/WIOB-FM, Mayaguez, PR, and WTVA-FM/WOYE-FM, Mayaguez, PR, "overshadow" the facilities of the proposed combination "in terms of technical facilities and audience performance ratings," we note that such claim is accurate, from a technical standpoint, only as it pertains to the WORA/WIOB-FM combination. 7. Moreover, EBI submits March 1996 audience share data from Asesores, Inc. in support of its waiver request.7 It contends that the low combined average audience share figure of 6.2% for WPRA(AM) and WKJB(AM)/FM for the most recent rating period clearly indicates that they are not a dominant economic force.8 It notes that this audience share figure is subordinate to the 15.7% and 13.4% average audience share figures enjoyed by competitors WTVA-FM and WOYE- FM, respectively.9 EBI further indicates that the combined average audience share for the three radio stations involved actually declined from slightly higher figures obtained during rating periods in 1995. 8. Economic Status. While EBI does not assert that the stations are "failed stations" as defined by the Commission, it does indicate that operating WPRA(AM) as a stand-alone facility

7EBI has provided audience share dala prepared by Asesores, Inc., whose service, it contends, functions as "the Puerto Rican equivalent of Arbitron." We have accepted showings based on data prepared by Asesores, Inc. in other cases involving Puerto Rico. See WLDI. Inc.. sups at 12,151.

"EBI relies on audience-share data prepared by Asesores, Inc. reflecting the western geographic region of Puerto Rico, where the subject stations are located and compete for listeners. EBI further indicates that metro-share data based on the specific Mayaguez-Aguadilla market is unavailable.

9EBI notes that published ratings for Puerto Rican television stations are unavailable but that WOLE-TV, a VHF- facility, competes with WAPA-TV, Channel 5, whose facilities are considered superior, and which has also combined with Teleonce, Channel 11, to form an independent network which holds the leading position in Mayaguez viewership.

2584 Federal Communications Commission FCC 96-481 results in an estimated annual loss in excess of $100,000.10 EBI further indicates that, without the continued consolidation of the WPRA(AM) and WKJB(AM)-FM studios, the long-torn viability of WPRA(AM) is threatened 9. Competition and Diversity in the Market The final factor applicable in the instant case is the nature of the relevant market in light of the Commission©s concerns about diversity and competitioa EBI asserts that the Mayaguez-Aguadilla market will remain diverse after consummation of the proposed transaction. In a prior case involving Puerto Rican markets not ranked by national ratings services, the Commission utilized the U.S. Census Bureau©s designation of Metropolitan Statistical Areas ("MSAs") to help define the applicable broadcast markets. See WLDIr Inc.. supra. In the instant case, EBI asserts that the Mayaguez-Aguadilla market can be defined as a combination of the Mayaguez and Aguadilla MSAs.11 According to EBI, four radio stations and three television stations are licensed to Aguadilla itself, and three additional radio stations and five television stations are licensed to communities within the Aguadilla MSA. In addition, nine radio stations and four television stations are licensed to Mayaguez, and six additional radio stations are licensed to communities within the Mayaguez MSA All told, the relevant market consists of twenty-two radio stations, with sixteen separate owners, and nine separately owned television stations, for a total of thirty-one broadcast stations with twenty-five separate "voices." EBI also submits that the relevant market is served by eight separately owned low-power television stations, two cable systems with cable penetration of at least 25%, two weekly newspapers of local circulation, and four newspapers of regional circulation.

Discussion 10. In analyzing a case-by-case request for a waiver of the one-to-a-market rule, the Commission©s "goal in all situations is to permit the public to benefit from such efficiencies of operation as may be achieved through the use of common faculties and staff; consistent with the maintenance of diversity and vigorous competition within the market areas involved." Second Report and Order Recon.. 4 FCC Red at 6491. We conclude that, on balance, EBI©s showing in support of a waiver of the one-to-a-market rule meets our case-by-case criteria, and that a waiver in mis instance would not adversely affect competition and diversity in the Mayaguez-Aguadilla market

10EBI estimates that current revenue for WPRA(AM) does not exceed $8,260 per month, although its break even figure for stand-alone operation is approximately $18,000 per month. "According to the U.S. Census Bureau, a Metropolitan Area ("MA") in Puerto Rico must contain either a place with a minimum population of 50,000 or a Census Bureau-defined urbanized area and a total MA population of at least 100,000, comprising one or more "municipios" (the Puerto Rican equivalent of counties), that possess close economic and social relationships. The Census Bureau further classifies MAs as MSAs or Consolidated Metropolitan Statistical Areas ("CMSAs") divided into Primary Metropolitan Statistical Areas ("PMSAs"). In the instant case, as distinguished from the WLDI. Inc. case, the Mayaguez and Aguadilla communities are reflected as separate "free standing" MSAs, and not classified as PMSA components of a larger CMSA.

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11. EBI, through its principal Bechara, cannot propose joint operation of the television and radio stations involved, or the consolidation of their facilities, since Bechara does not control the operation of the television station. We recognize, and the petitioner acknowledges, that the traditional benefits of common ownership of a television station and a radio station in the same market efficiencies derived from that cross-service ownership are not present here. Given the grandfathered nature of the existing WOLE-TVAVKJB(AM)-FM combination, the only means of achieving the demonstrated benefits of joint ownership of WPRA(AM) and WKJB(AM)-FM without granting a one-to-a-market waiver would be to require divestiture of WOLE-TV. This is neither sought by the parties nor an equitable resolution based on the factsjpresent in this case. We also recognize that certain of the benefits resulting from the joint ownership of the radio stations will continue even if EBI does not acquire control of WPRA(AM). in this regard, WPRA(AM) presently has access to WKJB(AM)-FMs local programming resources and WPRA©s operating losses as a stand-alone facility have been signifigantly offset by its consolidated operation as part of the radio combination. Nevertheless, EBI has demonstrated that the proposed radio combination presents the potential for certain benefits consistent with the public interest. It maintains that approval of the transaction will provide WPRA(AM) access to EBI©s greater financial resources, and enable substantial technical improvements to be made at the station which would not otherwise take place. Those improvements include a possible power upgrade and relocation of the transmitter to the WKJB-FM site and the installation of auxiliary power to allow uninterrupted operation during emergencies, including periods of adverse weather conditions, and during power outages. 12. With respect to the types of facilities involved, the Commission©s "concern with the types of facilities merging under the authority of a one-to-a-market waiver reflects our interest in assessing the potential impact of a proposed combination of stations in a given market in order that we might predict and avoid any significant adverse effect on diversity or competition from too powerful a combination." Great American Television and Radio Co.r Inc.. 4 FCC Red at 6349. In this instance, EBI has demonstrated that the level of competition and diversity in the Mayaguez-Aguadilla market will remain high due to the number of remaining "voices" in the market. See para. 12, below. While the technical facilities of the stations involved are not insignificant, they are not, given the substantial competition in the market, such as would present issues of market dominance inconsistent with the public interest. 13. Further, the market will be served by a substantial number of competing media "voices" and the proposed combination will not create any undue concentration of ownership or control of broadcast media in the combined radio-television market. After the transfer of control is approved and consummated, the Mayaguez-Aguadilla market will continue to be served by twenty-two AM and FM stations and nine television stations, for a total of thirty-one

2586 Federal Communications Commission FCC 96-481 broadcast stations.12 Of those stations, sixteen radio stations and nine television stations will remain separately owned, for a total of twenty-five separately owned broadcast "voices" in the market. In addition, other "voices" in the market include eight separately-owned low-power television stations which provide rjrogramming that would not normally reach the area, six newspapers, and two separate cable systems with cable penetration of approximately 25%. In light of the above, we are persuaded that the public benefits of common ownership of WPRA(AM), WKJB(AM), WKJB-FM, and WOLE(TV) outweigh any negative effect on competition and diversity in the Mayaguez-Aguadilla market that the combination will engender and that a waiver of the one-to-a-market rule is therefore warranted 14. Accordingly, IT IS ORDERED, That the request for a waiver of the Commission©s one-to-a-market rule, 47 C.F.R. § 73.3555(c), IS HEREBY GRANTED; and having found the applicant fully qualified, the application for transfer of control of the licensee of WPRA(AM), Mayaguez, Puerto Rico, from WPRA, Inc. to Empresas Bechara, Inc. (BTC-960318EE), IS HEREBY GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

William F. Caton Acting Secretary

12 As noted, Neilsen does not designate DMAs or television metro markets for Puerto Rico and no other national ratings service designates equivalent markets. Therefore, we must determine what would be an appropriate alternative "market" for purposes of counting the number of broadcast stations which compete with the stations in the proposed combination. Here, WOLE-TVs Grade A contour encompasses the geographic area of both the Mayaguez and Aguadilla MSAs and the principal-community contours of the radio stations that are licensed to the communities contained therein. Therefore, it is appropriate to count as a competing television voice, those television stations licensed to those communities. With respect to the number of competing radio stations, it is appropriate to count those stations licensed to Mayaguez and Aguadilla, where the proposed co-owned radio stations are licensed, as well as any other radio stations licensed to communities encompassed by the principal community contours of any of the proposed co-owned radio stations. In other one-to-a-market waiver cases, the Commission has used "alternative" showings, where appropriate, to determine the appropriate number of competing broadcast voices. See, United Radio Group. Inc.. 7 FCC Red 2207 (1992); Duane J. Polich. 4 FCC Red 55% (1989).

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