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In Re Applications of LINT Co. (Assignor) and Emmis Television

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In Re Applications of LINT Co. (Assignor) and Emmis Television Federal Communications Commission DA 00-2199 Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) LINT Co. ) (Assignor) ) BALCT-20000517AAO ) Fac. ID 48575 and ) BALCT- 20000517AAP ) Fac. ID 48556 Emmis Television License Corporation of ) BALCT-20000517AAQ Albuquerque ) Fac. ID 48589 Emmis Television License Corporation of ) BALCT-20000517ACW Honolulu ) Fac. ID 36917 Emmis Television License Corporation of ) BALCT-20000517ACX West Virginia ) Fac. ID 36920 Emmis Television License Corporation of ) BALCT-20000517ACY Tucson ) Fac. ID 36914 Emmis Television License Corporation of ) BALCT-20000517ACZ Omaha ) Fac. ID 36912 (Assignees) ) BALCT-20000517ADA ) Fac. ID 36918 For Consent to Assign the Licenses for ) BALCT-20000517ADB Stations: ) Fac. ID 35190 ) BTCCT-20000517ACM KRQE(TV), Albuquerque, NM ) Fac. ID 35380 KBIM-TV, Roswell, NM ) BTCCT-20000517ADH KREZ-TV, Durango, CO ) Fac. ID 72358 KGMB(TV), Honolulu, HI ) BTCCT-20000517ADI KGMV(TV), Wailuku, HI ) Fac. ID 72359 KGMD-TV, Hilo, HI ) BTCCT-20000517ADJ WSAZ-TV, Huntington, WV ) Fac. ID 72361 KGUN(TV), Tucson, AZ ) BTCCT-20000517ADK KMTV(TV), Omaha, NE ) Fac. ID 72362 ) BTCCT-20000517ADM Lee Enterprises, Incorporated ) Fac. ID 67335 (Transferor) ) ) and ) ) Emmis Communications Corp. ) (Transferee) ) ) For Consent to Transfer Control of Subsidiary ) Licensees of Stations: ) Federal Communications Commission DA 00-2199 ) KOIN(TV), Portland, OR ) KSNW(TV), Wichita, KS ) KSNC(TV), Great Bend, KS ) KSNG(TV), Garden City, KS ) KSNK(TV), McCook, NE ) KSNT(TV), Topeka, KS ) MEMORANDUM OPINION AND ORDER Adopted: September 25, 2000 Released: September 27, 2000 By the Chief, Mass Media Bureau: 1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority, has before it for consideration the above-captioned applications whereby Lee Enterprises Incorporated (“Lee”), through its wholly owned subsidiary LINT Co. (“LINT”), seeks consent to assign the licenses for KRQE(TV), Channel 13 (CBS), Albuquerque, New Mexico; KBIM-TV, Channel 10 (CBS), Roswell, New Mexico; KREZ-TV, Channel 6 (CBS), Durango, CO; KGMB(TV), Channel 9 (CBS), Honolulu, Hawaii; KGMV(TV), Channel 3 (CBS), Wailuku, Hawaii; KGMD-TV, Channel 9 (CBS), Hilo, Hawaii; WSAZ-TV, Channel 3 (NBC), Huntington, West Virginia; KGUN(TV), Channel 9 (ABC), Tucson, Arizona; and KMTV(TV), Channel 3 (CBS), Omaha, Nebraska, to wholly owned subsidiaries of Emmis Communications Corporation (“Emmis”).1 Lee has also filed applications seeking consent to transfer control of the subsidiary licensees of the following stations to Emmis: KOIN(TV), Channel 6 (CBS), Portland, Oregon; KSNW(TV), Channel 3 (NBC), Wichita, Kansas; KSNC(TV), Channel 2 (NBC), Great Bend, Kansas; KSNG(TV), Channel 11 (NBC), Garden City, Kansas; KSNK(TV), Channel 8 (NBC), McCook, Nebraska and KSNT(TV), Channel 27 (NBC), Topeka, Kansas. In addition, Emmis will acquire 62 television translator and low power television stations from Lee.2 To permit timely closing of the transaction, Emmis requests a temporary, six-month waiver of the television duopoly rule in the Honolulu, Hawaii market. Emmis also requests a continuing satellite exception to the television duopoly rule in both the Honolulu, Hawaii, and Wichita- Hutchinson, Kansas markets, pursuant to Note 5 of Section 73.3555 of the Commission’s rules. Grape Radio (“Grape”), permittee of KRAZ(FM), Santa Ynez, California, filed an informal 1 Originally Lee was the proposed assignor for all the stations except the New Mexico stations, where a wholly owned subsidiary of Lee, New Mexico Broadcasting Corporation (“NMBC”), was the proposed assignor. On August 9, 2000, the Commission granted Form 316 applications assigning all of the stations to LINT, a new wholly owned subsidiary of Lee. Likewise, Emmis was originally the proposed assignee. On June 30, 2000, amendments were filed naming various wholly owned subsidiaries of Emmis as the proposed assignees. 2 A list of the assignment and transfer applications for the 62 television translator and low power television licenses is attached to this Memorandum Opinion and Order as Appendices A and B, respectively. 2 Federal Communications Commission DA 00-2199 objection on June 30, 2000.3 Temporary Duopoly Waiver Request 2. Emmis wholly owns Emmis Television License Corporation of Honolulu, the licensee of KHON-TV, Honolulu, Hawaii, along with its satellites KAII-TV, Wailuku, Hawaii, and KHAW- TV, Hilo, Hawaii. Upon grant of the applications, Emmis Television License Corporation of Honolulu will also be the licensee of KGMB(TV), Honolulu, Hawaii and associated satellite station KGMV(TV), Wailuku, Hawaii, and KGMD-TV, Hilo, Hawaii, which station rebroadcasts the signal of KGMB(TV). Common ownership of KHON-TV, Honolulu, and KGMB(TV), Honolulu, the two parent stations, would violate the Commission’s duopoly rule, 47 C.F.R. §73.3555(b)(1999), since they are located in the same DMA, their Grade B contours overlap and both stations are ranked within the top four in the DMA in terms of audience share.4 Emmis requests a six-month waiver of our duopoly rule, during which time it pledges to divest one of the two parent-satellite combinations. For the reasons set forth below, we will grant a six-month waiver of our duopoly rule, during which time Emmis must file the application or applications necessary to come into compliance with our duopoly rule in the Honolulu, Hawaii market. 3. Emmis states that the Commission has granted numerous temporary waivers of its ownership rules to accommodate multi-station transactions, which, according to Emmis, have included stations with total signal overlap in markets similar in size, or smaller than, Honolulu. Citing the Commission’s decision in Shareholders of CBS Corporation, Emmis asserts that a reasonable time for orderly divestiture of either the KHON-TV or KGMB(TV) combination outweighs the impact on diversity and competition from common ownership of the stations during a reasonable period following grant of the application. Shareholders of CBS Corporation,15 FCC Rcd 8230, 8243 (2000). Temporary waiver in this case, Emmis argues, would not unduly affect diversity and competition in the Honolulu market given the multiplicity of media voices. Emmis notes that 21 commercial television stations, 4 noncommercial educational television stations, 74 commercial and noncommercial radio stations, 11 low power television stations, 21 ITFS stations, 24 MDS stations, 11 cable systems having 88% market penetration, and 6 daily newspapers serve the Honolulu market. Emmis maintains, moreover, that grant of a temporary, six-month waiver is in the public interest since it will “promote commerce, encourage investment in the broadcast industry, and allow for the free transferability of broadcast licenses.” Stockholders of CBS Inc., 11 FCC Rcd 3733, 3755 (1996). 3 Grape subsequently filed identical informal objections against Emmis’ assignment applications for KZLA-FM, Los Angeles, California; WVRV(FM), East St. Louis, Illinois; WIL-FM and WRTH(AM), St. Louis, Missouri; and WKKX(FM), Granite City, Illinois. See File Nos. BALH-2000706AFL-AFS. 4 Under the Commission’s recently revised duopoly rule, which became effective November 16, 1999, an entity may own, operate or control two television stations licensed in the same Designated Market Area (DMA) (as determined by Nielsen Media Research) if: 1) the Grade B contours of the stations do not overlap; or 2) if at least one of the stations is not ranked among the top four stations in the DMA in terms of audience share and at least eight independently owned and operating full-power commercial and noncommercial television stations would remain post-merger in the DMA. 47 C.F.R. § 73.3555(b) (1999). 3 Federal Communications Commission DA 00-2199 4. Discussion. In the past, we permitted temporary waivers of our multiple ownership rules in order to facilitate multi-station transactions, especially when the waiver was incidental to the larger transaction. See, e.g., Milton S. Maltz, 13 FCC Rcd 15527 (1998); ITT-Dow Jones Television, 13 FCC Rcd 4678 (1998); AFLAC Broadcasting Group, 12 FCC Rcd 3907 (1997); Providence Journal Company, 12 FCC Rcd 2883 (1997); Stockholders of CBS Inc., 11 FCC Rcd 3733 (1996); and Telemundo Group Inc., 10 FCC Rcd 1104 (1994). However, since these decisions, we have substantially relaxed our television duopoly rule by providing broadcasters with the opportunity to take advantage of common ownership of two television stations in a given market under certain circumstances. See infra footnote 4. Nevertheless, despite relaxation of our local television multiple ownership rules, we continue to weigh requests for temporary waivers against our underlying goals of diversity and competition in the broadcast marketplace. See Shareholders of CBS Corporation, 15 FCC Rcd at 8243. 5. The applications at issue here involve the assignment or transfer of 15 full-service television and 62 television translator or low power television licenses, which qualifies as a “multi- station transaction” as defined in our previous decisions. After a careful review of the record, we conclude that the public interest will not be disserved by allowing Emmis six months from consummation to come into compliance with the revised duopoly rule in the Honolulu market. The stations to be commonly owned represent a small portion of this large transaction. In addition, the temporary waiver’s effect on competition and diversity in the Honolulu, Hawaii market is somewhat less consequential
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