Federal Communications Commission DA 99-726

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

In re Application of ) ) Sullivan Broadcasting License Corp. ) ) For Modification of Facilities of ) File No. BPCT-960214KG WUTV, ) Buffalo, ) ) and ) ) For Modification of Facilities of ) File No. BPCT-96071 lKQ Television Station WUHF, ) Rochester, New York )

MEMORANDUM OPINION AND ORDER

Adopted: April 15, 1999 Released: April 16, 1999

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 unopposed applications to modify the facilities of television broadcast stations WUTV, Buffalo, New York and WUHF, Rochester, New York, filed by Sullivan Broadcasting License Corp. ("Sullivan"), licensee of both WUTV and WUHF. There is currently Grade B contour overlap between WUTV and WUHF, which originally was authorized by the Commission in Company, 8 FCC Red 855 (1993) and reaffirmed in ACT III Communications Holdings; LP., 11 FCC Red 5735 (1996). 1 Grant of the proposed modifications would increase the existing Grade B overlap between the two stations. Therefore, Sullivan has requested a permanent waiver of Section 73.3555(b) of our Rules, which governs television duopolies.

2. Waiver Request. The currently authorized Grade B overlap between WUTV and WUHF covers an area of 826 square kilometers with an overall population of 45,927. This authorized overlap area represents 11.3% of the service area and 3.5% of the population within WUTV's predicted Grade B contour and comprises 10.7% of the service area and 4.3% of the population within WUHF's Grade B contour area. Sullivan has submitted an engineering exhibit in support of its waiver request which shows that the predicted Grade B overlap in its proposal covers an area of 2,065 square kilometers with an overall population of 100,474. The engineering studies filed with the pending modification applications report that the new overlap would-contain 24% of the service area and 9.6% of the population for WUHF and 20.4% of the service area and 7.1 % of the population for WUTV. There is no Grade A contour overlap between the two stations.

1 When Sullivan acquired the licenses for WUTV and WUHF in 1996, it was operating under the name A-3 Acquisition , Inc. By letter dated January 4, 1996, the company notified the Commission that the name of the licensee of the stations was changed to Sullivan Broadcasting License Corporation. 6456 Federal Communications Commission DA 99-726

3. Sullivan contends that, although the proposed Grade B overlap is not de minimis, it is consistent with previously authorized waivers. Citing Weiger Broadcasting, FCC 96-204 (released May I 7, l 996)(granting waiver where Grade B population overlap figures were 16.12% and 4.6% and area overlap figures were 8.97% and 7.95%); Citadel Communications, 10 FCC Red 11, 910 (1995), affd sub nom., Busse Broadcasting Corp. v. FCC, 87 F.3d 1456 (D.C. Cir. 1996) (granting waiver where Grade B population overlap figures were 33.39% and 5.13% and area overlap figures were 5.3% and 2.5%); Taft Broadcasting Partners Limited Partnership, 7 FCC Red 855 (1992) (11.4% and 4.3% of the populations and 18% and 19 .2% of the areas).

4. Sullivan asserts that WUTV and WUHF serve two separate and distinct markets, with the transmitters for the two stations approximately 73 .6 miles apart. WUTV serves the Buffalo DMA, the 39th largest, and WUHF serves the Rochester DMA, the 74th largest. Sullivan contends that the two stations do not compete for advertising. Sullivan further contends that the demographics of each market remain distinct, with the Buffalo market having a larger minority population, a higher unemployment rate, a lower percentage of college educated persons, and a lower number of residents who are "management/professionals."

5. Sullivan maintains that the overlap area will continue to be served by numerous media voices. Sullivan states that ten television stations cover the overlap area (seven commercial stations and three public/educational stations) and construction has been authorized for a new television station on channel 51 at Batavia, New York, which is in the center of the overlap area. Sullivan further states that four cable systems serve parts of the overlap area. These cable systems are: Time Warner Communications, Stafford, New York (36 channels); Time Warner Communications, Albion, New York (48 channels); Time Warner Communications, Rochester, New York (77 channels); and Warsaw TV Cable Corp., Warsaw, New York (39 channels). Also, there are four radio stations licensed to communities within the predicted Grade B contour overlap.

6. Sullivan states that the two stations are operated independently and that it will continue to operate them independently. Each station has its own general manager, general sales manager, and program director and Sullivan uses the services of two different national advertising representatives for WUTV and WUHF. 2

7. Discussion. In adopting the duopoly rule's fixed standard of prohibiting 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 of Standard, 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 distinctness of the respective markets, the independence of the stations' operations, and the concentration of economic power resulting from the combination. See Iowa State University Broadcasting Corporation, 9 FCC Red 481, 487-88 (1993), affd sub nom. Iowans for WOI-TV, Inc. v. FCC, 50 F.3d 1096 (D.C. Cir. 1995); H&C

2 We note that Sullivan maintains that the public interest benefits that supported the Commission's original waiver and subsequent affirmation of the current WUTV/WUHF overlap remain in effect today. Sullivan states that it has continued to serve the public interest with the broadcast of Fox-31 Forum, a weekly half-hour public affairs program. Sullivan also airs a weekly, half-hour, locally produced, Saturday morning, children's program, Dr. Rock's Dinosaur Adventures, on WUHF. Furthermore, Sullivan asserts that it has developed another locally produced news program, Fox-31 Investigates, which airs for half and hour on Saturday and repeats on Sunday.

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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.

8. Currently, the Commission is reexamining its broadcast television ownership policies, including the duopoly rule. In January 1995, the Commission proposed a new analytical framework within which to evaluate its broadcast television ownership rules. See Review of the Commission's Regulations Governing Television Broadcasting, Further Notice of Proposed Rule Making, 10 FCC Red 3524 ( 1995) ("Television Ownership Further Notice''). Subsequent to the release of the Television Ownership Further Notice, 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) ("Telecomm Act"). In response to this Congressional directive in the Telecomm Act and to update the record, the Commission released the Television Ownership Second Further Notice.

9. The Commission stated in the Television Ownership Second Further Notice that it will be inclined, during the pendency of the television ownership proceeding, to grant temporary duopoly waivers to authorize common ownership of television stations that are in separate DMA's and whose Grade A contours do not overlap, conditioned on coming into compliance with the outcome of the proceeding within six months of its conclusion. Television Ownership Second Further Notice, 11 FCC Red at 21681. 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 DMA's supplemented with a Grade A overlap criterion." 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.

10. · Given the ·clearly articulated policy in the Television Ownership Second Further Notice, we do not believe that an unconditional grant of Sullivan's duopoly waiver is appropriate. See WHOA-TV, Inc., 11 FCC Red at 20046-47, 20051. However, we believe that grant of a conditional waiver of the duopoly rule, subject to the outcome of the pending ownership proceeding, is justified. The temporary common ownership of WUHF and WUTV would be consistent with the interim policy set forth in the Television Ownership Second Further Notice, as the stations are in separate DMAs and there is no Grade A overlap between WUHF and WUTV. Moreover, our examination of the record presented here reveals nothing suggesting that we should not follow the established interim policy in this case. Accordingly, we conclude that grant of a temporary waiver, conditioned on the resolution of the pending broadcast television ownership rulemaking, will serve the public interest, convenience and necessity. Any requests to extend this conditional waiver should be filed at least 45 days prior to the end of the six-month period and would be closely scrutinized. -Additionally, having found Sullivan to be qualified in all respects, we conclude that grant of the application for assignment of license would also serve the public interest.

11. Accordingly, IT IS ORDERED, That the request for permanent waiver of the television duopoly rule, Section 73.3555(b) of the Commission's Rules, to permit the common ownership of television stations WUTV-TV, Buffalo, New York, and WUHF, Rochester, New York, IS DENIED.

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12. IT IS FURTHER ORDERED, That a conditional waiver of Section 73.3555(b) of the Commission's rules, to permit the common ownership by Sullivan Broadcasting License Corp. of television stations WUTV-TV, Buffalo, New York, and WUHF, Rochester, New York, IS GRANTED, subject to the outcome of the Commission's pending broadcast ownership rulemaking in MM Docket Nos. 91-221 and 87-8. Should divestiture be required as a result of that proceeding, the permittee is directed to file, within six months from the release of the final order in MM Docket Nos. 91-221and87-8, an application for Commission consent to dispose of such station as would be necessary for Sullivan Broadcasting License Corp. to come into compliance with the rules as provided in the final order.

13. IT IS FURTHER ORDERED, That the applications for modification of the facilities of television stations WUTV-TV, Buffalo, New York (File No. BPCT-960214KG), and WUHF, Rochester, New York (File No. BPCT-96071 lKQ) ARE GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

Roy J. Stewart Chief, Mass Media Bureau

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