Federal Communications Commission DA 98-1627

Before the Federal Communications Commission Washington, D.C. 20554

In re Applications of ) ) MILTON S. MALTZ ) (Transferor) ) ) and ) FileNos. BTCCT-980421IB-G ) BTCTT-980430IA , INC. ) (Transferee) ) ) For Consent to the Transfer of Control ) of Malrite Communications Group, Inc., ) Licensee or Controlling Corporation of the ) Licensee of: ) ) WFLX(TV), West Palm Beach, FL ) WNWO-TV, Toledo, OH ) WXIX-TV, Newport, KY ) WOIO(TV), Shaker Heights, OH ) WLII(TV), Caguas, PR ) WSUR-TV, Ponce, PR ) W50AW, Vero Beach, FL )

MEMORANDUM OPINION AND ORDER

Adopted: August 13, 1998 Released: August 13, 1998

By the Chief, Mass Media Bureau:

1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority, has before it the above-captioned, unopposed applications seeking consent to the transfer of control of Malrite Communications Group, Inc. (Malrite) and Estrella Brillante, Ltd. (Estrella)1 from Milton S. Maltz to Raycom Media, Inc. (Raycom). Malrite is the licensee of television stations WFLX(TV) (Channel 29, FOX), West Palm Beach, Florida, WNWO-TV (Channel 24, NEC), Toledo, , WXIX-TV (Channel 19, FOX), Newport, Kentucky,

1 Malrite controls the general partner of Estrella_ Federal Communications Commission DA 98-1627

WOIO(TV) (Channel 19, CBS), Shaker Heights, Ohio and low power W50AW, Vero Beach, Florida. The predicted Grade B contours of stations WNWO-TV and WOIO(TV) overlap, and Malrite has commonly-owned those stations since 1996, pursuant to the grant of a permanent waiver of Section 73.3555(b), the Commission©s rule, 47 C.F.R. Section 73.3555(b). WNWO Associates, 11 FCC Red 18596 (1996). Estrella is the licensee of WLII(TV) (Channel 11, Ind.), Caguas, Puerto Rico and WSUR-TV (Channel 9, Ind.), Ponce, Puerto Rico. Station WSUR-TV has operated as a satellite of station WLII(TV) for over 30 years, having previously been granted satellite exemption status pursuant to Note 5 to Section 73.3555 of the Commission©s Rules, which exempts from application of the multiple ownership rules those television stations that are "satellite" operations.

2. Raycom controls the corporate licensees of 21 full-service television stations, four "satellite" television stations, one FM radio station and one AM radio station. The Grade B contour of one of its television stations, WUPW(TV) (Channel 36, FOX), Toledo, Ohio, overlaps the Grade B contours of stations WNWO-TV and WQIO(TV), thereby implicating the Commission©s duopoly rule. In view of these facts and to effect the proposed transfer of control, Raycom makes three requests with respect to the multiple ownership rules. First, to permit its common ownership and control of stations WNWO-TV and WOIO(TV), Raycom seeks either: (1) a continuation of the 1996 duopoly waiver; or (2) a waiver of the duopoly rule conditioned upon the outcome of the Commission©s pending broadcast television ownership rulemaking concerning the duopoly and other multiple ownership rules. See Review of the Commission©s Regulations Governing Television Broadcasting, Second Further Notice ofProposed Rule Making, 11 FCC Red 21655 (1996) (Television Ownership Second Further Notice). Second, Raycom asks for six-month, temporary duopoly waivers to permit its common ownership and control of stations WUPW(TV), WNWO-TV and WOIO(TV) during the "brief period necessary to divest" station WUPW(TV). An application to assign the license for that station to STC Broadcasting, Inc. (STC Broadcasting) was filed on July 31, 1998 (BALCT-980731KE). Third, Raycom requests continued satellite exemption status for station WSUR-TV so that it may commonly own that station and station WLII(TV). For the reasons discussed below, we will grant Ray corn©s requests for conditional and temporary duopoly waivers and continued satellite exemption status, as well as the proposed transfer of control transaction.

DUOPOLY WAIVER REQUESTS

Duopoly Standard

3. In adopting the duopoly rule©s fixed standard of a prohibited overlap of Grade B service contours, the Commission also acknowledged the need for "flexibility" in that rule©s application, noting that waivers should be granted where rigid conformance to the rule would be "inappropriate." Multiple Ownership ofStandard, FM and Television Broadcast Stations, 45 FCC 2d 1476, 1479 n.12, recon. granted in part, 3 RR 2d 1554 (1964). To that end, the Commission has developed a set of factors to be considered when evaluating an applicant©s request for waiver of the duopoly rule, including the extent of the overlap, the number of media voices available in the overlap area, the distinctiveness of the respective markets, the independence of the stations©

15528 Federal Communications Commission DA 98-1627 operations, and the concentration of economic power resulting from the combination. See Iowa State University Broadcasting Corporation, 9 FCC Red 481, 487-88 (1993), aff©d sub nom. lowansfor WO1-TV, Inc. v. FCC, 50 F.3d 1096 (D.C. Cir. 1995); H&C Communications, Inc., 9 FCC Red 144, 146 (1993). After weighing the factors, the Commission considers any public interest benefits proposed by the applicant to determine whether, in light of the overlap, the benefits outweigh any detriment which may occur from grant of the waiver. See, e.g., Iowa State University, 9 FCC Red at 487-88. As with any waiver, it will only be granted if the Commission concludes that the waiver is in the public interest.

4. Currently, the Commission is reexamining its broadcast television ownership policies, including the duopoly rule. In the Telecommunications Act of 1996, Congress directed the Commission to conduct a rulemaking proceeding to determine whether to retain, modify or eliminate existing limitations on the number of television stations that an entity may control within the same television market. See Section 202(c) of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (Feb. 8, 1996). Pursuant to that Congressional directive and to update the record, the Commission released a second notice, the Television Ownership Second Further Notice, to its pending television ownership proceeding. See Review of the Commission©s Regulations Governing Television Broadcasting, Further Notice of Proposed Rule Making, 10 FCC Red 3524 (1995).

5. In the Television Ownership Second Further Notice, the Commission stated that it will be inclined, during the pendency of the television ownership proceeding, to grant duopoly waivers involving stations in different DMAs with no overlapping Grade A contours, conditioned on coming into compliance with the outcome of the proceeding within six months of its conclusion. It also noted there its tentative conclusion that the record in that proceeding "supports relaxation of the geographic scope of the duopoly rule from its current Grade B overlap standard to a standard based on DMAs supplemented with a Grade A overlap criterion." Television Ownership Second Further Notice, 11 FCC Red at 21681. The Commission further stated that "we do not believe granting waivers satisfying the proposed standard, and conditioning them on the outcome of this proceeding, will adversely affect our competition and diversity goals in the interim." Id. Additionally, the Commission gave the staff delegated authority to act on applications seeking waivers consistent with this interim policy. With regard to waiver requests not falling in this category, i.e., those involving stations in the same DMA or with overlapping Grade A contours, the Commission stated it would be disinclined to grant them during the pendency of the television ownership proceeding absent extraordinary circumstances. Id.

Stations WNWO-TV and WOIO(TV) Conditional Waiver

6. Waiver Showing. Preliminarily, Raycom asserts that the market circumstances which justified the Commission©s 1996 grant of a permanent duopoly waiver allowing Malrite©s common ownership of stations WNWO-TV and WOIO(TV) have not significantly changed, and that continuation of the existing waiver is appropriate. In the alternative, Raycom maintains that stations WNWO-TV and WOIO(TV) meet the Commission©s interim policy on duopoly waivers because no Grade A overlap exists between the stations, which are located in cities approximately

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