Federalcommunications Commission Record 11 FCC Red No

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FCC 96-15 FederalCommunications Commission Record 11 FCC Red No. 7

BACKGROUND/PLEADINGS Before the 2. Spokane Television, Inc. ("STI"), the parent company Federal Communications Commission of QueenB, is currently the licensee of ABC-affiliated VHF Washington, D.C. 20554 station KXLY-TV, licensed to· Spokane, Washington. STI, through another subsidiary, is also the licensee of KXLY(AM) and KXLY-FM, both licensed to Spokane, In re Application of Washington. By the instant application, QueenB seeks to acquire another AM and FM station in the Spokane mar Louis C. DeArias, Receiver ket. The transaction would comply with the Commission's 3 (Assignor) revised local radio ownership rules. However, grant of the subject assignment applications would create a new radio television combination that requires waiver of the one and BAL-950518EA to-a-market rule because the 2 mV/m service contour of BALH-950518EB KTRW and the 1 mV/m service contour of KZZU-FM encompass Spokane, KXLY-TV's city of license. See 47 QueenB Radio, Inc. C.F.R. § 73.3555(c). Accordingly, QueenB requests waiver (Assignee) of the one-to-a-market rule. QueenB requests waiver of the rule pursuant to the "failed station" standard and submits For Assignment of License of that the stations are presently being operated by DeArias pursuant to a court-ordered receivership and that the li KTRW(AM) and KZZU-FM, censee's parent corporation has been involved in bank Spokane, Washington ruptcy or receivership proceedings since 1990. Alternatively, OueenB submits a specific factual showing pursuant to the "case-by-case" standard.4 MEMORANDUM OPINION AND ORDER 3. Petition to Deny. RBI, in its petition, contends that KTRW and KZZU-FM are not "failed stations" as argued Adopted: January 22, 1996; Released: February 2, 1996 by QueenB. According to RBI, there is no evidence that the stations were placed in bankruptcy because they were By the Commission: Commissioner Barrett concurring unable to compete successfully in the Spokane market. In and issuing a statement. fact, RBI suggests that the stations are "solidly profitable" and ''capable of sustaining themselves" and were placed 1. The Commission has before it the above-captioned into bankruptcy and receivership proceedings solely as a applications for assignment of license of KTRW(AM) and result of the inability of the parent company of the prior KZZU-FM, Spokane, Washington, from Louis C. DeArias, licensee to pay the debts it incurred in financing its ac Receiver ("DeArias") to QueenB Radio, Inc. ("OueenB"), quisition of other stations. RBI presents the only financial and a related request for waiver of 47 C.F.R. § 73.3555(c), data available to it, data that was made available to prospec the Commission's one-to-a-market rule. 1 Rook Broadcasting tive purchasers at a time the stations were marketed for of Idaho, Inc. ("RBI"), licensee of KCDA(FM), Coeur d sale. It states that the information shows that the stations Alene, Idaho, filed a petition to deny the assignment ap generated an operating cash flow of $125,349 and a net plication on July 3, 1995.2 In light of the following, we will income of $23,972 in calendar year 1992, and that the deny the petition to deny and grant the waiver request and stations generated $47,090 in cash flow and experienced a the assignment applications. net operating loss of only $3,904 through the first seven months of 1993, indicating that the stations were on track to earn a solid net profit in 1993. RBI also submits that KTRW and KZZU-FM are market leaders in audience share ratings and, in fact, based upon the most recent Arbitron survey for the Spokane market, KZZU-FM is rated the number one station in the market. RBI further argues that DeArias failed to adequately market the stations

1 Section 73.3555(c) of the Commission's rules prohibits the that market and the proposed combination does not lead to common ownership of radio and television stations in the same "excessive concentration in the local market." Excessive con market if the 2 mV/m contour of an AM station or the 1 mV/m centration will be presumed where the stations to be jointly contour of an FM station encompasses the entire community of owned have a combined audience share exceeding 25 percent. 47 license of a television station or. conversely, if the Grade A C.F.R. § 73.3555(a)( !)(ii); In re Revision of Radio Rules and contour of a television station encompasses the entire commu Policies, 7, FCC Red 2755 ( 1992), recon. granted in part and nity of license of an AM or FM station. See 47 C.F.R. § denied in part, 7 FCC Red 6387, 6393 ("Radio Rules 73.3555( c). Recon.")(1992). OueenB has demonstrated that there are more 2 On July 21, 1995, QueenB filed an opposition to RBl's than 15 commercial radio stations within the relevant market petition, and on August 2, 1995, RBI filed a reply. Further, on and the combined audience share of KXLY(AM), KXLY-FM, September 1, 1995, QueenB filed a supplement to its opposition, KTRW(AM), and KZZU-FM is 21.0 percent. Accordingly, the and on September 7, 1995, RBI filed a motion to strike proposed combination of radio stations satisfies the local radio QueenB's supplement. ownership provisions of our rules. 3 The Commission's revised local radio ownership rules, codi 4 See para. 6, infra. fied in 47 C.F.R. § 73.3555(a), permit a single entity to own up to two AM and two FM commercial radio stations in a single market if there are 15 or more commercial radio stations in

3662 11 FCC Red No. 7 Federal Communications Commission Record FCC 96-15

to prospective buyers who would not need a waiver of the asserts that the receiver is selling the stations to the first one-to-a-market rule to own the stations and/or who would potential buyer to provide substantial money up front and pay more than was offered by QueenB. Specifically, RBI adequate financial backing to guarantee payment of the full contends that DeArias failed to provide potential buyers purchase price. QueenB argues that the offers cited by RBI with adequate financial information on the stations and to were rejected out of hand by the Receiver based upon the actively encourage serious offers.5 RBI also asserts that prospective purchasers' credit worthiness and the terms of entities that own both radio and television stations in a the offers. QueenB also points out that, prior to the filing single market enjoy certain competitive advantages and of the assignment application, the Court set up a hearing argues that STI and QueenB, based on past practices, will whereby any interested party could acquire the stations by engage in anti-competitive activities to further protect their "overbidding" QueenB's $1.75 million purchase price. interests.6 According to RBI, the Spokane radio market is However, no other interested parties attended the hearing already highly concentrated and allowing QueenB to ac or entered competing bids. QueenB further contends that quire KTRW and KZZU-FM may ultimately force the re the Receiver, at all times, engaged in reasonable efforts to maining independent stations out of business and further sell the stations at a reasonable price and on terms that reduce competition andP diversity in the market.7 Finally, were in the best interest of the stations' creditors. Finally, in light of these factors, RBI also questions the adequacy of QueenB argues that RBI has failed to present evidence that QueenB's showing in support of its alternative case-by-case it systematically excluded competitors from advertising on waiver request. KXLY-TV and maintains that it has, in fact, accepted ad 4. Opposition to Petition to Deny. QueenB maintains that vertisements from various competitors in the market in the the cause of the financial difficulties of the licensee's par past and will continue to do so in the future. QueenB ent company or the financial stability of the specific sta submits that KXLY-TV's refusal to accept advertising for tions involved in a transaction is not controlling in a KISC(FM) was based on the unusually high demand for "failed station" waiver. According to QueenB, the only advertising during the rating period in question and did precondition to grant of a "failed station" waiver is that the not involve anti-competitive activities. stations are off the air for a substantial period of time or 6. Waiver Standards/Request. The Commission enunciated are involved in bankruptcy proceedings. QueenB further its standards for reviewing requests for waiver of its one argues that the Commission has expanded the definition of to-a-market rule in the Second Report and Order in MM bankruptcy proceedings to include stations which are in Docket 87-7, 4 FCC Red 1741 (1989) ("Second Report and receivership. Thus, QueenB asserts that since the stations Order"), recon. denied in part and granted in part ("Second are in receivership, QueenB is presumptively entitled to a Report and Order Recon."), 4 FCC Red 6489 (1989). Under "failed station" waiver without regard to the current finan these standards, the Commission will "look favorably cial status of the stations. QueenB characterizes RB l's asser upon" waiver applications involving (1) stations serving the tions that the stations are market leaders and solidly top 25 markets where at least 30 separately owned, op profitable as misleading. QueenB contends that high au erated, and controlled stations will remain following the dience shares and a positive cash flow during receivership proposed combination; or (2) "failed" stations (stations that does not necessarily reflect financial stability. QueenB have not been operational for a substantial period of time maintains that KZZU-FM's high audience share is directly or are involved in bankruptcy proceedings). Otherwise, the attributable to the station's excellent management and on applicants must be evaluated under the more rigorous case air talent and asserts that management and talent can leave by-case standard. 47 C.F.R. § 73.3SSS(c) note 7. Under this the station at any time and are extremely difficult to re analysis, the Commission makes a public interest deter place. Further, QueenB argues that since the stations are in mination based upon five criteria. The five criteria are: (1) receivership and are not paying the debts that were accu~ the public service benefits that will arise from the joint mutated prior to the receivership, the positive cash flow operation of the facilities such as economies of ~cale, cost cited by RBI is an inaccurate portrait of the overall finan savings and programming and service benefits; (2) the types cial status of the stations. of facilities involved; (3) the number of media outlets 5. Additionally, QueenB maintains that the stations have owned by the applicant in the relevant market; (4) the been diligently marketed for the five years they have been financial difficulties of the stations involved; and (5) the involved in bankruptcy or receivership proceedings and

5 Jn this regard, RBI asserts that in November. 1993, Lance advertising was specifically rejected because KISC(FM) and International, Inc. submitted an offer to purchase the stations KXL Y-FM had the same format and KXL Y-TV was protecting for $1.2 million, with a future payment of $300,000 should KXL Y-FM from the format conflict. Lance International, Inc. sell the stations within 5 years for 7 According to RBI, the Spokane radio market has three group more than $2 million. Lance International, Inc. later increased owners of eleven stations which capture in excess of 80% of the its offer to $2 million. RBI also maintains that its president, market's radio revenues. This situation. it claims, has caused John Rook, offered $2 million for the stations. According to RBl's station KCDA to lose 42% of its revenues despite an RBI, neither offer was encouraged by DeArias or the stations' audience increase, forcing the station to all but eliminate local creditors. issues-based programming and to turn to a satellite program 6 Specifically, RBI claims that KXL Y-TV has refused to accept service. This situation, RBI argues, will be exacerbated by the advertising for station KISC(FM), which competes wiih KXLY proposed acquisition. RBI adds that QueenB's parent is the FM. RBI maintains that this was done to protect KXL Y-FM permittee of two and licensee of one low power television from competition from another FM station with a similar for stations in the Spokane market -- K40EE, Pullman, Washing mat. To support this contention, RBI submits a hearsay declara ton; K20EM, Coeur d Alene, Idaho; and Kl lGD, Spokane, tion from Kosta Pandis, KISC(FM)'s general manager, which Washington -- which will add to the degree of market power states that KISC(FM)'s advertising agent was informed by which QueenB will exercise. KXLY-TV's sales representative that KISC(FM)'s request for

3663 FCC 96-15 Federal Communications Commission Record 11 FCC Red No. 7

nature of the relevant market in light of the level of ment in community projects and public interest campaigns. competition and diversity after joint operation is imple To support this contention, QueenB lists the numerous mented. See Second Report and Order, 4 FCC Red at 1753.8 community projec.ts and campaigns KXLY(AM)-FM-TV has 7. In the proceeding revising the radio ownership rules, been involved in recently and indicates its commitment to 10 the Commission noted that "[p )ossible revisions to the expand such efforts to include KTRW and KZZU-FM. one-to-a-market prohibition, including the impact of the 9. Other Media Outlets/Types of Facilities. QueenB is the revised radio ownership limits, [were] being addressed in licensee of stations KXLY(AM)-FM-TV, the permittee of the [outstanding] television ownership proceeding." Radio two unbuilt low power television stations, and the licensee Rules Recon., 7 FCC Red 6387, 6394 at n.40. The Commis of one low power television station in the Spokane market. sion further indicated that, until the one-to-a-market issue Other than these facilities, it has no other media interests is resolved, it would consider all waiver requests involving in the market. KXLY(AM) is a Class B station which local radio ownership limits under a case-by-case analysis. operates on 920 kHz with a full time power of 5,000 watts Id.; see also Moosey Communications, Inc., 8 FCC Red using a non-directional antenna. KXLY-FM is a Class C 5247, 5247 (1993); KV!, Inc., 9 FCC Red 1330, 1330 at n.3 FM station operating on 99.9 MHz with 37,000 watts effec (1994). This case-by-case approach remains applicable to tive radiated power (ERP) from an antenna height of at day. Therefore, while QueenB argues that KTRW and 2,998 feet above average terrain (HAAT). KXLY-TV, which KZZU-FM are "failed stations," it nevertheless must justify is co-located with KXLY-FM, is an ABC-affiliated VHF its waiver request under the more rigorous "case-by-case" television station operating on Channel 4 with 48,000 watts standard. In support of its waiver request, QueenB submits visual and 9,550 watts aural power from an antenna at a showing which addresses each of the five case-by-case 3,060 feet HAAT. During the day, KTRW(AM), a Class B factors. station, operates on 970 kHz with a full time power of 8. Benefits of Joint Operation. Regarding the potential 5,000 watts using a directional antenna, while at night it public service benefits of joint operation, QueenB 'contends reduces its power to 1,000 watts. KZZU-FM is a Class C that significant cost savings, economies of scale, as well as FM station operating on 92.9 MHz with 81,000 watts ERP programming and service benefits will be realized if the from an antenna height of 2,080 feet HAAT. QueenB Commission allows the proposed combination. QueenB asserts that, even though the combined power and coverage anticipates substantial programming and public service of the stations will be substantial, competition and diversity benefits through the more widespread availability of local in the market will not be unduly affected and argues that news coverage and public service programming. OueenB the Commission has waived the one-to-a-market rule in estimates that joint ownership of the stations would result similar circumstances.11 in cost savings of approximately $218,000 to $250.000 per 10. Economic Status. QueenB argues that the stations are year.9 OueenB also indicates that joint ownership would "failed stations" since they have been involved in bank give KTRW and KZZU-FM unlimited access to the news ruptcy or receivership proceedings for more than five resources of KXLY(AM)-FM-TV resulting in better cov years. According to QueenB, the previous licensee, erage of breaking news, emergency situations, live coverage Highsmith Broadcasting Corporation, filed for protection of community events and press conferences, interviews, under Chapter 11 on June 13, 1990, 12 and filed for the local traffic reports, and KXLY(AM)-FM-TV's news bureau current receivership on February 4, 1992. 13 The February at the state capital. Additionally, KTRW and KZZU-FM 4, 1992 transaction was supported by a court order indicat would have access to KXLY(AM)-FM-TV's weather center ing that DeArias had been appointed receiver for the pur staffed by professional meteorologists. Further, according to pose of operating, marketing, and selling all of the assets of QueenB, the proposed combination will result in increased Olympia Broadcasting Corporation, Highsmith Broadcast local programming, such as "Newsffalk Live", "Host Du ing Corporation's parent company, in a timely manner. Jour Week," and "Sportstalk." QueenB also anticipates that QueenB also submits affidavits from Kent Duerfeldt, the proposed combination will result in increased involve- Senior Portfolio Manager of Greyhound Financial Cor-.

8 The Commission noted that "[njot all of the factors men 11 Specifically, OueenB argues that in BREM Broadcasting, 9 tioned will be relevant in every case." Second Report and Order FCC Red 1333 (1994), the Commission allowed the Recon., 4 FCC Red at 6491, para. 18. See also South Central grandfathered licensee of an AM/FM combination and network Communications Corporation, 5 FCC Red 6697, 6698 (1990) (all affiliated VHF television station to acquire another AM/FM five criteria need not be satisfied as a precondition to grant of a combination in the Mobile, Alabama/Pensacola, Florida market. waiver). Further, QueenB contends that in KV/, Inc., 9 FCC Red 1330 9 OueenB anticipates that the joint operation of KTRW, ( 1994). the Commission permitted the common ownership of KZZU-FM, KXLY(AM), KXLY-FM, and KXLY-TV will result two AM stations, one FM station, and a network affiliated VHF in estimated annual savings of $57,000 through sharing a single television station in the Seattle, Washington market. Finally, general manager, $50,000 to $55,000 in receiver's fees, $15.000 OueenB points out that in llr!oosey Communications, Inc., 8 FCC through the elimination of outside engineering services, $10,000 Red 5247 ( 1993), the Commission waived the one-to-a-market to $20,000 in combined sales and management staffs, $5,000 to rule to allow the common ownership of one AM station, two $10,000 in discounts for general services, $3,000 to $5,000 FM stations, and a UHF television station. through the bulk purchases of office supplies, $58,000 in rent, 12 The Commission granted an application for involuntary $5,000 through the potential consolidation of microwave facili transfer of control of Highsmith Broadcasting Corporation from ties, and $15,000 to $25,000 in promotional expenses, for a total Olympia Broadcasting Corporation to Olympia Broadcasting of between $218,000 and $250,000 per year. Corporation, Debtor-in-Possession on July 26, 1990. See BTC- JO Such programs include: The Annual Radiothon for the 900709GP and BTCH-900709GQ. Battered Women's Shelter, Kidsweek, Junior Bloomsday Run, 13 See BAL-920408EF and BALH-920407EG, granted April 29, Fight Hunger Day, Child Abuse Prevention Day, Coats 4 Kids 1992. Campaign, Family First Campaign, Annual Spring Cleanup Pro gram.

3664 11 FCC Red No. 7 Federal Communications Commission Record FCC 96-15 poration, and Kent Mordy, Director of Financial Advisory 13. With respect to KTRW and KZZU-FM's economic Services of Cooper & Lybrand, L.L.C., to further corrobo status, generally stations falling within the ambit of the rate its assertion that Olympia Broadcasting Corporation "failed station" presumption would be able to show that was insolvent and lacked sufficient means to continue op the stations are financially compromised under the case eration of its stations. by-case criteria. The Commission has determined that once 11. Competition and Diversity in the Market. The final a station has become involved in bankruptcy proceedings factor is the nature of the relevant market in light of the "competition or diversity in a particular local market can Commission's concerns about diversity and competition. not be improved by forbidding joint ownership _of that To determine the number of broadcast outlets in the mar station with another local station." Second Report and Or ket the Commission considers the number of separately der, 4 FCC Red at 1753. However, applicants requesting a owned and operated "voices" and the degree of cable and waiver of the one-to-a-market rule under the "failed sta other non-broadcast media penetration. As to the market tion" standard are "required to provide relevant docu definition within which to count the number of broadcast mentation, i.e., proof of the length of time that the station stations, in the context of a one-to-a-market waiver, we has been off-air, or proof that it is involved in bankruptcy consider "the relevant TV metro market for radio stations proceedings." Id. at 1752. Further, the Commission specifi and the relevant ADI [Arbitron Area of Dominant Influ cally allowed that "petitioners who submit petitions to ence] TV market for TV stations." Second Report and Or deny might be able to rebut the [failed station] waiver der, 4 FCC Red at 1760, n.101. QueenB asserts that the request." Second Report and Order, 4 FCC Red at 1752. Spokane area, ranked as the 78th ADI in the country, will 14. QueenB asserts that because KTRW and KZZU-FM be served by 43 radio stations and by 10 television stations, have been involved in bankruptcy or receivership proceed for a total of 34 separately owned and operated broadcast ings for the past five years and the Commission has ex "voices." 14 In addition, QueenB maintains that there are 24 panded its definition of "failed stations" to include low power television stations, 9 of which are separately receiverships,15 it meets the "failed station" definition and owned and operated. Finally, OueenB states that Spokane need not make an additional showing to satisfy the finan is served by 2 daily newspapers, several weekly newspapers, cial difficulty criteria of the case-by-case standard. Under 1 bi-weekly newspaper, and cable penetration is 57.9 the circumstances presented here, we disagree. percent. QueenB concludes that the proposed combination 15. Absent any evidence of bad faith, the Commission will increase its competitiveness in the Spokane market but generally considers a station in bankruptcy or receivership will not permit it to wield undue market power. as meeting the "failed station" presumption and tradition ally defers to the Court's jurisdiction regarding the finan cial status of the debtor licensee. See Dennis Elam, Chapter DISCUSSION Seven Trustee for Bakcor Communications, Inc. and Bakke 12. Analysis of Waiver Request. In evaluating a request Communications, Inc. ("Dennis Elam"), 8 FCC Red 5185, for a waiver of the one-to-a-market rule, "our goal in all 5186 (1993); Radio Management, 7 FCC Red at 2961. In the situations is to permit the public to .benefit from such absence of any contrary evidence, the Commission will efficiencies of operation as may be achieved through the generally consider court determined corporate insolvency use of common facilities and staff, consistent with the to be dispositive in the application of the "failed station" maintenance of diversity and vigorous competition within presumption. In Dennis Elam and Radio Management, the the market areas involved." Second Report and Order Commission refused to look behind the court proceedings Recon., 4 FCC Red at 6491. We conclude that, on balance, to seek further evidence of the applicant"s financial failure. QueenB's showing in support of ·a waiver of the one However, in both cases there was evidence that the stations to-a-market rule meets our case-by-case criteria, and that a in question were losing money. See also Sam Jones, Jr., waiver in this instance is in the public interest and would Successor Liquidator for Forward of Kansas, 10 FCC Red not have an adverse effect on diversity and competition in 5330, 5342 ( 1995) (objections "do not include evidence to the Spokane market. QueenB has shown that joint opera support the assertion that the stations are now financially tion of the stations will- result in cost savings of approxi viable and do not substantiate the assertion that the stations mately $218,000 to $250,000 annually. OueenB has also will not be forced to discontinue operation if this transac demonstrated the potential for enhanced programming and tion is not approved. Consequently, there is no basis to go service benefits. The proposed combination will strengthen behind the bankruptcy proceeding to consider the financial KTRW and KZZU-FM's news, weather and sports report condition of the station."). ing abilities by providing them access to 16. Here, however, RBI has presented evidence as to the KXLY(AM)-FM-TV's existing resources and permit in financial stability and market status of KTRW and KZZU creased coverage of fast breaking news and emergency situ FM. Based upon this information, we conclude that RBI ations, live coverage of community events, and increased has presented sufficient evidence that KTRW and KZZU local programming. Further, joint operation will enhance FM are not financially compromised and that it then KTRW and KZZU-FM's public service and public affairs became incumbent upon QueehB to demonstrate either programming through the resources and experience of that these particular stations were in fact financially dis KXLY(AM)-FM-TV and will result in increased involve tressed or that the circumstances surrounding the receiver ment in community affairs. ship proceeding involving the stations' corporate parent

14 We note that the figures supplied by QueenB regarding the 29 (original waiver request) to 34 (opposition to the petition to number of remaining separate radio and television "voices" in deny). Further, RBI, in its reply, concedes that 29 separate the Spokane market after the proposed acquisition varies from broadcast "voices" will remain in the market. Reply at 8. 15 Radio Management Services, Receiver ("Radio Management"), 7 FCC Red 2959, 2961 (1992).

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would negatively impact on the stations' continued ability 20. Other Issues. We find no merit to RBI's assertion that to operate in the public interest. QueenB has failed to the Receiver failed to adequately market the stations to meet this burden. buyers who would not require a waiver of the one-to 17. In light of these circumstances, QueenB has failed to a-market rule. QueenB has clearly demonstrated that demonstrate that KTRW and KZZU-FM are entitled to KTRW and KZZU-FM have been available for sale for a consideration as stations experiencing financial difficulties reasonable amount of time at a reasonable price, see Sec in the Spokane market. However, as noted previously, not ond Report and Order at 1753, and it has adequately ex all five of the case-by-case factors must be satisfied as a plained the grounds for the Receiver's rejection of previous precondition to grant of a waiver and QueenB's failure to offers. Furthermore, in order to ensure that all interested demonstrate that the stations to be acquired are themselves parties had one final opportunity to submit any alternative in financial distress does not bar grant of its waiver request offers for the station, the Superior Court of Washington for pursuant to the case-by-case standard. See generally Second Spokane County, prior to approving the sale of the stations Report and Order Recon., 4 FCC Red 6489 ( 1989); South to QueenB, held a hearing at which any interested party Central Communications Corporation, 5 FCC Red 6697 could "overbid" QueenB's agreed upon $1.75 million pur (1990). chase price. Neither Lance International, Inc., RBI, nor 18. With respect to the types of facilities involved, the any other party appeared at the hearing and entered a bid. Commission's concern with the strength of the technical 21. Finally, we reject RBI's allegations that QueenB's facilities pursuant to a one-to-a-market waiver reflects our parent corporation has engaged in anti-competitive activity continuing concern regarding the potential impact the pro ·in promoting its radio stations and can be expected to posed combination may have on competition and diversity continue this practice upon its acquisition of KTRW and in a give~ market. However, as the level of competition KZZU(FM). It is well established that broadcast stations are and diversity in a market increases, our concerns grounded not common carriers and thus retain the right to select in the technical strength of the combining facilities de certain advertisers and reject others. Columbia Broadcasting crease. In markets with a substantial number of separately System, Inc. v. Democratic National Committee, 412 U.S. 94 owned and operated "voices," even the merger of powerful (1973). This right, however, is not unlimited. For example, stations might not have a perceptible negative effect on federal anti-trust laws may prohibit a broadcaster from competition and diversity in that market. See Great Ameri using its station to gain a competitive advantage in the can Television and Radio Co., Inc., 4 FCC Red 6347, 6349 licensee's other businesses. In the past, the Commission (1989). In this instance, we find that QueenB has dem prohibited the use of a broadcast station (1) to promote onstrated that the level of competition and diversity in the other, non-broadcast business owned by the licensee, and Spokane market will remain high due to the number of (2) for personal advantage in other business activities, i.e., remaining "voices" in the market. See para. 19, below. as a trade weapon or to gain a competitive advantage. Thus, while the technical facilities of the stations involved However, in 1985, the Commission determined that regula are significant and KZZU-FM has been ranked the number tion of these practices was unnecessary and one FM station in the market in terms of audience share counterproductive.17 The Commission further held that (9.6%), we find that given the substantial competition in "[w)here the practices do not amount to antitrust viola the Spokane market, the proposed combina.tion does not tions, we think they are unlikely to have serious harmful present issues of market dominance inconsistent with the effect." Elimination of Unnecessary Broadcast Regulation in public interest. 16 MM Docket 83-842, 57 RR 2d 913, 921 (1985). In this 19. We further find that the market will be served by a case, the conduct challenged by RBI has not been found to number of media "voices" and that the proposed combina violate the antitrust laws. Indeed the conduct at issue tion will not create any undue concentration of ownership would not have been examined by the Commission even or control of broadcast media in the Spokane market. Our prior to the 1985 Policy Statement and Order in Elimina independent analysis indicates that after the assignment is tion of Unnecesssary Broadcast Regulation. Thus, RBI has approved, the Spokane market will be served by at least 11 failed to make a prima facie case that the refusal to sell AM stations, 22 FM stations, 7 VHF television stations and advertising time to KISC(FM) constituted actionable anti 3 UHF television stations. Of those stations. 22 radio sta competitive activity. tions and 9 television stations will remain separately owned 22. Conclusion. RBI has failed. to raise a substantial and and operated, for a total of 31 separately owned and op material question of fact that QueenB's waiver request and erated broadcast "voices" in the market. In addition, other grant of these applications would be inconsistent with the ·"voices" in the market include 2 daily newspapers, several public interest. In view of the foregoing, and having deter weekly newspapers, 1 bi-weekly newspaper, and 24 low mined that the applicants are qualified in all other respects, power television stations, 9 of which are independently we find that grant of the applications would serve the owned and operated. Cable penetration is 57.9 percent. public interest.

16 We find no basis to RBI's argument that allowing this four-station (2 AM and 2 FM) combinations in the Spokane transaction may ultimately force independent stations out of market have technical facilities that match or exceed the tech business and further reduce competition and diversity in the nical facilities of the proposed combination herein. Spokane market. The contention is speculative and inconsistent 17 Specifically, the Commission held that "ltlo the extent the with the level of competition and diversity in the market. policies cover areas regulated by the antitrust laws, other agen Further, we note that there are competing technical facilities of cies such as the Department of Justice or the Federal Trade the same class in the Spokane market. For example, there are Commission have primary enforcement responsibility." Elimi six additional VHF television stations, one Class A. AM station, nation of Unnecessary Broadcast Regulation in MM Docket seven additional Class 8 AM stations, one Class Cl FM station, 83-842, 57 RR 2d 913, 921 (1985). and ten additional Class C FM stations. Further, two other

3666 11 FCC Red No. 7 Federal Communica.tions Commission Record FCC 96-15

OTHER MATTERS 23. The Commission has generally delegated to the Chief, Mass Media Bureau, the authority to act on petitions or requests for waiver of the Commission's rules, whether or not accompanied by an application, when such petitions or requests do not contain new or novel arguments not pre viously Considered by the Commission and do not present facts or arguments which appear to justify a change in Commission policy. See 47 C.F.R. §0.283. In light of the substantial number of recently decided Commission cases involving waivers of the one-to-a-market rule, the Commis sion hereby authorizes the staff to rule on uncontested one-to-a-market cases that involve stations in the top 100 television markets that are clearly consistent with prior Commission precedent, i.e., which present no new or novel issues. 24. Accordingly, IT IS ORDERED, that the July 3, 1995 petition to deny filed by Rook Broadcasting of Idaho, Inc. IS HEREBY DENIED, the request for waiver of the Com mission's one-to-a-market rule, 47 C.F.R. § 73.3555(c), IS HEREBY GRANTED, and the applications for assignment of licenses (BAL-950518EA and BALH-950518EB) of KTRW(AM) and KZZU-FM, Spokane, Washington, from Louis C. DeArias, Receiver to QueenB Radio, Inc. ARE HEREBY GRANTED.

FEDERAL COMMUNICATIONS COMMISSION

William F. Caton Acting Secretary

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