BEFORE THE Federal Communications Commission WASHINGTON, D. C. 20554
In re ) MB Docket No. 17-85 ) Entercom Communications and ) Lead File No. CBS Radio Seek Approval to ) BTCH-20170320AHE Transfer Control of and Assign ) FCC Authorizations and Licenses ) ) TO: Office of the Secretary ) ) ATTN: Chief, Media Bureau )
REPLY TO OPPOSITION TO PETITION TO DISMISS OR DENY
Edward R. Stolz II d/b/a Royce International Broadcasting
Company (Stolz), Golden State Broadcasting, LLC (Golden), Silver
State Broadcasting, LLC (Silver) and Major Market Radio, LLC
(Major) (collectively “Petitioners”), by their attorney, hereby respectfully submits this Reply to the “Opposition to Petition to
Dismiss or Deny” filed May 11, 2017 by CBS Corporation, CBS
Radio, Inc. (collectively “CBS”) and Entercom Communications
Corp. (“Entercom”). In so doing, the following is shown:
Timeliness
1. Reply pleadings in this matter are due on May 18, 2017.
This pleading is therefore timely filed.
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Standing
2. Neither Entercom nor CBS appear to contest the competitor standing of each of Petitioners. Petitioners therefore must each be granted status as an intervenor and party respondent in such a hearing.
The San Francisco and Sacramento Applications Are Still Defective
3. At page 3 of its Opposition, CBS and Entercom concede that “the parties have not yet determined which 14 stations will be divested”. Therefore, what the Commission has before it is a request by CBS and Entercom to permit Entercom as the surviving entity of the proposed merger to be the beneficial owners of 10 radio stations (7 FM and 3 AM) in the Sacramento market, and 11 radio stations (9 FM and 2 AM) in the San Francisco market.
4. As Petitioners noted in their Petition to Dismiss or
Deny, this is a patent violation of Section 73.3555(a)(1)(i), which limits common ownership of stations in a market such as
Sacramento to eight (8) stations, no more than five (5) in any one service.
5. Petitioners remind the Commission that its public notice in this matter, DA 17-299, acknowledged that Entercom,
CBS, Evers and the EDT were in violation of Section
73.3555(a)(1)(i), and stated the following (footnotes omitted): - 3 -
6. CBS and Entercom were on notice of this matter, but have failed to deal with it in a timely matter. It seems to us that they should have waited to get their station spin off plan in place before they filed the applications in this Docket. CBS and Entercom are not entitled to special treatment by the agency.
Such special treatment would be in direct contradiction to
President Trump’s directive to federal agencies to “drain the swamp”.
7. Six days ago, the Commission’s staff enforced strict compliance upon a regulatee unrelated to this proceeding. The
ERIE Radio Co., LLC, DA 17-447, 2017 WL 2106208 (Chiefs, Auctions and Spectrum Access Division, Wireless Telecommunications Bureau and Audio Division, Media Bureau, May 12, 2017). The regulatee paid a required auction payment one day out of time, and the
Commission staff rejected its request for waiver and dismissed its application for a construction permit for a new FM station at
Westfield, New York.
8. The Commission’s staff cannot logically or legally impose strict compliance on the Westfield applicant, and give indefinite deference to CBS and Entercom. - 4 -
9. Right now, the CBS and Entercom applications in the above-entitled proceeding relative to the Sacramento market stations are defective and cannot be granted because the result they seek violates Section 73.3555(a)(1)(i) of the Commission’s
Rules. Section 73.3566(a) of the Rules and FCC case precedent require that these applications be summarily dismissed: Richard
A. Helmick, Esq. (Tri-Cities/Yakima Divestiture Trust), 26 FCC
Rcd 10715 (Media Bureau, 2011).
Requirement of New Public Notice
10. CBS and Entercom take issue with Petitioners’ position that, should the Commission allow the above-captioned applicants remain on file and to amend, the Commission would be required by
47 U.S.C. §309(b) to specify a new period of no less than thirty days for the public to file petitions. 47 U.S.C. §309(b).
11. CBS and Entercom argue on page 5 of their Opposition that our understanding of the statute is incorrect, because their amendments would be “minor” pursuant to Section 73.3578 of the
Rules. They also seem to argue that they don’t need to tell the
FCC what their plans are before the FCC grants their application.
This is contrary to the undersigned’s experience representing assignment and transfer clients, where the Audio Division staff routinely flyspeck Form 314 and 315 applications to understand how the transactions are to be carried out; failure to satisfy the staff results in the application not being granted. CBS and - 5 -
Entercom are asking for special treatment which is denied to others.
12. Petitioners are unable to comprehend how CBS and
Entercom can submit a “minor amendment” to their applications so that the merger survivor, Entercom, is the beneficial owner of no more than 5 FM and 3 AM stations after the merger. They need to come up with a bona fide unrelated third party or parties to spin off two or more FM stations; amendments to the applications for whatever Sacramento market stations they choose to spin off to such bona fide third parties would necessarily be “major change” applications, because Elliot Evers as Trustee would no longer have more than a 50.1% controlling legal interest in these stations.
13. However, Entercom and CBS should not be allowed to amend their applications. They had their chance to come into compliance with FCC Rules. They failed to do so. Section
73.3566(a)(1) and the strict compliance recently enforced against another FCC regulatee demand that the Commission dismiss the applications involved in the above-captioned proceeding.
Unresolved Issues Against Entercom’s Sacramento Cluster
14. The complicity of Entercom in the death of Jennifer Lea
Strange and its effect on the basic qualifications of Entercom to be a Commission license stand unresolved on this record.
Petitioners stand by their assertions that Entercom lacks the basic character qualifications to be a Commission licensee, and - 6 -
that their Petition to Dismiss or Deny effectively demonstrated
this. Petitioners called upon the Commission to rule on the
January 9, 2017 Petition to Enlarge Issues filed by the
Intervenors in the KDND hearing which was never acted upon by
Chief ALJ Sippel. Petitioners called upon the Commission to act
consistently with its precedent in Western Cities Broadcasting,
Inc., DA 90-1355, 5 FCC Rcd 6177 (Audio Services Division, 1990).
Because there is a substantial and material question as to
whether Entercom lacks basic character qualifications, its
applications cannot be granted at this stage. Cf. Jefferson
Radio Co., Inc. v. FCC, 340 F.2d 781 (1964) (a seller lacking
character qualifications cannot transfer a broadcast license as
it has nothing to sell; the converse must also be true about a
buyer lacking character qualifications).
15. We are constrained to reassert that the death of
Jennifer Lea Strange was an event that shocked the conscience.
We note that Vice-President Pence has proclaimed at the March for
Life in Washington, DC on January 27, 2017 that the Trump
administration “will not rest until we restore a culture of life
in America”1. Therefore, the public interest cries out for a
full and fair hearing on all requested issues against Entercom.
1https://www.theatlantic.com/politics/archive/2017/01/trump-pledges- allegiance-to-pro-life-america/514745/ - 7 -
16. Entercom tried a clever move to sidestep the FCC hearing process by turning in the KDND license. Because of accounting procedures, it is quite possible that Entercom may not have suffered any economic penalty, because of write-offs, particularly since to effectuate the merger; Entercom would have had to spin off the KDND license and pay federal and state income taxes on the gain from the sale. Before the FCC lets Entercom get away, it needs to determine the economic consequences from the return for cancellation of the KDND license.
Conclusion
WHEREFORE, Petitioners urge that the Commission dismiss all above-captioned applications relative to the Sacramento radio market, as, collectively, they violate Section 73.3555(a)(1)(i), and consequently must be dismissed as inadvertently accepted for filing pursuant to Section 73.3566(a) of the Commission’s Rules; or, in the alternative
WHEREFORE, Petitioners urge that the Commission designate for hearing all applications related to Entercom/CBS’s cluster in the Sacramento, California upon the hearing issues specified by the Commission in its October 27, 2016 Hearing Designation Order,
FCC 16-153, at ¶83, 31 FCC Rcd at 12229-12230, to wit:
(a) To determine whether Entercom designed and conducted a contest that was inherently dangerous; (b) To determine whether Entercom increased the danger to the contestants in the “Hold Your Wee for a Wii” contest by changing the contest terms; - 8 -
(c) To determine whether Entercom was aware of the potential dangers of the “Hold Your Wee for a Wii” contest and water intoxication; (d) To determine whether Entercom failed to protect the contestants of the “Hold Your Wee for a Wii” contest from its potential dangers; (e) To determine whether Entercom failed to warn the contestants of the “Hold Your Wee for a Wii” contest of the contest's potential dangers; (f) To determine whether Entercom prioritized entertainment value over the welfare of contestants of the “Hold Your Wee for a Wii” contest; (g) To determine whether Entercom failed to properly train and exercise appropriate supervision of Station KDND(FM) staff and the “Hold Your Wee for a Wii” contest to ensure the safety of the contestants; (h) To determine, in light of the evidence adduced under the foregoing issues and the totality of circumstances, whether Entercom License, LLC operated Station KDND(FM) in the public interest during the most recent license term; and (i) To determine, in light of the evidence adduced under the foregoing issues and the totality of circumstances, whether Entercom's Applications for Renewal of License for KDND(FM), File Nos. BRH-20130730ANM and BRH-20050728AUU, should be granted.
WHEREFORE, Petitioners also urges the Commission to designate for hearing the following issues which were proposed by the KDND Intervenors in their “Petition to Enlarge Issues” filed with the FCC on January 9, 2017:
To determine whether Entercom Sacramento, a subsidiary of Entercom, failed to properly train and exercise appropriate supervision of staff with respect to FCC compliance matters at stations KUDL (FM); KIFM (AM); KKDO (FM); KRXQ (FM) and KSEG (FM);
To determine, light of the evidence adduced under the foregoing issues and the totality of circumstances, whether Entercom License, LLC operated Stations KUDL (FM); KIFM (AM); KKDO (FM); KRXQ (FM) and KSEG (FM) in the public interest during the most recent license term;
To determine, light of the evidence adduced under the foregoing issues and the totality of circumstances, whether Entercom's applications for renewal of licenses should be granted, as follows: KUDL(FM) File No. BRH-20l30730ANC KIFM(AM) File No. BRH-20130730ANG KKDO(FM) File No. BRH-20130730AND KRXQ(FM) File No. BRH-20130730ANI KSEG(FM) File No. BRH-20130730ANK - 9 -
To determine, light of the evidence adduced under the foregoing issues and the totality of circumstances, whether Entercom License LLC possesses the necessary character attributes of reliability and legal compliance to be a Commission licensee of Stations KDND (FM), KUDL (FM); KIFM (AM); KKDO (FM); KRXQ (FM) and KSEG (FM);
To determine whether Entercom License LLC violated Section 73.3588 of the Rules, by failing to report to existence or terms of a settlement agreement, whereby judgment creditors in the case of William A. Strange et al. v. Entercom Sacramento LLC et al. agreed to dismiss their FCC filing pending against the defendants
And, WHEREFORE, Petitioners urge the Commission to grant each of them intervenor/party-in-interest status.
Respectfully submitted,
EDWARD R. STOLZ II, d/b/a ROYCE INTERNATIONAL BROADCASTING COMPANY GOLDEN STATE BROADCASTING, LLC SILVER STATE BROADCASTING, LLC MAJOR MARKET RADIO, LLC
By Dennis J. Kelly Their Attorney
LAW OFFICE OF DENNIS J. KELLY Post Office Box 41177 Washington, DC 20018 Telephone: 202-293-2300 E-mail: [email protected]
DATED: May 18, 2017 CERTIFICATE OF SERVICE
It is hereby certified that true copies of the foregoing “Reply, etc.” has been served by e-mail and first- class United States mail, postage prepaid, or by e-mail only where shown by “*”, on this 18th day of May, 2017 upon the following:
Meredith S. Senter, Jr., Esquire Laura M. Berman, Esquire Lerman Senter PLLC 2001 L Street, NW, Suite 400 Washington, DC 20036 [email protected] [email protected] Counsel for CBS Corporation and CBS Radio, Inc.
David H. Solomon, Esquire J. Wade Lindsay, Esquire Wilkinson Barker Knauer, LLP 1800 M Street, NW, Suite 800N Washington, DC 20036 [email protected] [email protected] Counsel for Entercom Communications Corp.
Carrie A. Ward, Esq. Entercom Communications Corp. Entercom License, LLC 401 E. City Avenue, Suite 809 Bala Cynwyd, PA 19004-1900 [email protected]
Nancy A. Ory, Esq. Lerman Senter PLLC 2001 L Street, NW, Suite 400 Washington, DC 20036 [email protected] Counsel for Entercom Divestiture Trust
Michael Wagner, Esq.* Audio Division, Media Bureau Room 2-A523 Federal Communications Commission Washington, DC 20554 [email protected]
Stephen Svab, Esq.* Audio Division, Media Bureau Room 2-A802 Federal Communications Commission Washington, DC 20554 [email protected]
Dennis J. Kelly