KEXL, ) Pierce, NE Facility ID No
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Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) WJAG Incorporated, ) Docket No. _______________ ) FM Broadcast Station KEXL, ) Pierce, NE Facility ID No. 170494 ) To: Office of the Secretary, Federal Communications Commission Attn: Chief, Audio Division, Media Bureau PETITION FOR WAIVER WJAG Incorporated (“WJAG Inc.”), by its undersigned counsel and pursuant to Section 1.3 of the Commission’s rules,1 hereby respectfully requests waiver of the Commission’s Newspaper-Broadcast Cross-Ownership rule (the “NBCO Rule”),2 as reinstated following the Third Circuit’s September 2019 decision.3 Specifically, for the reasons stated herein, WJAG Inc. requests that the FCC waive the NBCO Rule to permit the continued common ownership of KEXL(FM), Pierce, Nebraska (Facility ID No. 170494) (“KEXL”) and The Norfolk Daily News. As further detailed below, grant of WJAG Inc.’s requested waiver is warranted, and is in the public interest. 1 47 C.F.R. § 1.3. 2 Id. at § 73.3555(d)(1)(ii) (“No party (including all parties under common control) may directly or indirectly own, operate, or control a daily newspaper and a full-power commercial broadcast station (AM, FM, or TV) if . The predicted or measured 1 mV/m contour of the FM station (computed in accordance with § 73.313) encompasses the entire community in which the newspaper is published . .” (emphasis added)). 3 Prometheus Radio Project v. FCC, 939 F.3d 567, 573 (3rd Cir. 2019) (“Prometheus IV”), cert. granted, 594 U.S. ---, Nos. 19-1231, 19-1241 (U.S., Oct. 2, 2020). 1 BACKGROUND The Huse Family holds direct attributable interests in The Norfolk Daily News and KEXL, which both serve Norfolk, Nebraska.4 The Huse Family has provided the residents of Norfolk, Nebraska with quality local news and information sources since the late 19th Century beginning with acquisition of The Norfolk Daily News in 1888. Five generations of the Huse Family have now ran the newspaper. In the early 1920s, Huse Family experimented with radio by commencing operations with WJAG(AM), Norfolk, Nebraska (Facility ID No. 73121) (“WJAG”) – long before the FCC’s inception in 1934. In 1971, WJAG Inc. commenced operations with a second radio station, KQKX(FM) (formerly KEXL), Norfolk, Nebraska (Facility ID No. 73122) (“KQKX”). Finally, in 2009, WJAG Inc. was granted a license for KEXL.5 KEXL’s service contour currently encompasses the entirety of Norfolk, Nebraska, which is The Norfolk Daily News’ community of publication.6 When KEXL’s license was granted in 2009, however, KEXL was constructed so as not to encompass Norfolk, Nebraska with the entirety of its predicted service contour in compliance with the NBCO Rule.7 In reliance on the Commission’s repeal of the NBCO Rule in November 2017,8 WJAG Inc. made a series of modifications to KEXL’s facilities, thereby significantly expanding KEXL’s service area. First, 4 See LMS File No. 0004992103 (2019 Biennial Ownership Report). 5 See CDBS File No. BLH-20091030AFQ. 6 A waiver of the NBCO Rule is not being filed by WJAG Inc. with respect to WJAG and KQKX because those stations were grandfathered in when the NBCO Rule went into effect in 1975. 7 See CDBS File Nos. BLH-20091030AFQ & BMPH-20091015ABB. 8 2014 Quadrennial Regulatory Review, Order on Reconsideration and Notice of Proposed Rulemaking, 32 FCC Rcd. 9802, 9806, ¶ 8 (2017) (“NBCO Rule Repeal Order”). 2 on March 3, 2018, WJAG Inc. filed a modification of license application to increase KEXL’s power to the maximum authorized for an FM Class 3 station.9 The FCC granted that application on April 20, 2018.10 Then, on June 6, 2018, WJAG Inc. filed a construction permit application for KEXL to upgrade KEXL to a Class C2 station, and to increase KEXL’s power using a non- directional antenna.11 That application was granted on August 7, 2018.12 Finally, WJAG Inc. filed a license to cover application for KEXL’s new Class C2 facilities, which was granted by the Commission on February 1, 2019.13 The result of these modifications to KEXL’s facilities was that KEXL’s service area was expanded to encompass the entirety of the Norfolk, Nebraska community. Therefore, following the Third Circuit’s reinstatement of the NBCO Rule in Prometheus IV, WJAG Inc. is currently not in compliance with the NBCO Rule because KEXL’s predicted service contour now encompasses the entirety of Norfolk, Nebraska – which is the community of publication for the commonly-owned newspaper, The Norfolk Daily News. DISCUSSION The FCC may grant a waiver for good cause shown.14 A waiver is appropriate where the particular facts make strict compliance inconsistent with the public interest.15 In addition, the FCC may take into account considerations of hardship, equity, or more effective implementation 9 CDBS File No. BMLH-20180305AAN. 10 Id. 11 CDBS File No. BPH-20180606AAG. 12 Id. 13 CDBS File No. BLH-20190102AAZ. 14 47 C.F.R. § 1.3. 15 Ne. Cellular Tel. Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990). 3 of overall policy on an individual basis.16 Such a waiver is appropriate if special circumstances warrant a deviation from the general rule, and such deviation will serve the public interest.17 Specifically, waiver of the NBCO Rule “will be granted so long as the applicants can demonstrate that viewpoint diversity will not be unduly harmed as a result of the proposed combination.”18 As demonstrated below, these requirements are met for WJAG Inc.’s requested waiver. A. WJAG Inc. Relied Upon the FCC’s Repeal of the NBCO Rule in Expanding KEXL’s Service Area WJAG Inc. filed a series of applications to expand KEXL’s service area following the Commission’s repeal of the NBCO Rule in November 2017. Following the reinstatement of the NBCO Rule by the Third Circuit’s September 2019 decision in Prometheus IV, however, WJAG Inc. now finds itself in violation of the reinstated rule. To date, the Commission has not issued any guidance on what broadcast licensees finding themselves in this situation are to do following the Prometheus IV decision. Accordingly, as the result of the Third Circuit’s recent reinstatement of the NBCO Rule, WJAG Inc. is now relying upon the FCC’s earlier guidance in the Second Report and Order to request a waiver of the NBCO Rule. In the Second Report and Order, the Commission stated that it would grandfather “to the extent required, any existing newspaper/broadcast combinations that no longer comply with the NBCO Rule . to the extent grandfathering/permanent waivers are still necessary to permit 16 WAIT Radio v. FCC, 418 F.2d 1153, 1159 (D.C. Cir. 1969), cert. denied, 409 U.S. 1027 (1972); Ne. Cellular, 897 F.2d at 1166. 17 Ne. Cellular, 897 F.2d at 1166. 18 2014 Quadrennial Regulatory Review, Second Report and Order, 31 FCC Rcd. 9864, 9940, ¶ 188 (2016) (“Second Report and Order”). 4 common ownership.”19 Specifically, the Commission grandfathered existing newspaper/ broadcast combinations which no longer complied with the NBCO Rule due to the FCC’s modifications of that rule.20 Essentially, the FCC permitted the continued existence of previously-compliant newspaper/broadcast combinations despite changes in the NBCO Rule which made those combinations non-complaint under the revised rule. Similarly here, WJAG Inc. relied upon the Commission’s repeal of the NBCO Rule to expand KEXL’s service contour to encompass all of Norfolk, Nebraska to create a lawful newspaper/broadcast combination within that community. Following the Third Circuit’s reinstatement of the NBCO Rule in Prometheus IV, however, WJAG Inc. now finds itself non- compliant with the reinstated rule through no fault of its own. The Commission should grant WJAG Inc. similar grandfathered treatment as it did for broadcasters in the Second Report and Order because WJAG Inc.’s newspaper/broadcast combination was lawful at the time it was created. B. The NBCO Rule is Outdated As recognized by the FCC, the NBCO Rule is outdated and does not reflect the realities of the current marketplace. The Commission adopted the NBCO Rule in 1975 – a time in which broadcasters and newspapers were the dominant media sources.21 Since that time, however, “the media marketplace has seen an explosion in the number and variety of sources of local news and 19 Second Report and Order, 31 FCC Rcd. at 9941, ¶ 191 (emphasis added) (citing 2014 Quadrennial Regulatory Review, Further Notice of Proposed Rulemaking and Report and Order, 29 FCC Rcd. 4371, 4445, ¶ 166 n.481 (2014) (“FNPRM”)). 20 Id. See also FNRPM, 29 FCC Rcd. at 4444, ¶ 166 (proposing to permit the grandfathering of existing newspaper/television combinations rendered noncompliant due to a transition from analog to digital television contours for purposes of the NBCO Rule). 21 See NBCO Rule Repeal Order, 32 FCC Rcd. at 9811, ¶¶ 16-17. 5 information . .”22 The diversification of the media marketplace is largely the result of the “‘the Internet [] transform[ing] the American people’s consumption of news and information.’”23 The media marketplace of the Twenty-First Century is now a “‘nuanced ecosystem of community news and information,’ in which ‘Americans turn to a wide range of platforms to get local news and information’” – far beyond the traditional newspaper and broadcast news outlets.24 Thus, the continued application of the NBCO Rule to the media marketplace is no longer in the public interest. As the FCC noted in the NBCO Rule Repeal Order, the “‘newspaper industry is now in crisis’” as a result of Americans’ shift in media and news consumption to online sources.25 The Commission observed that the NBCO Rule “does not promote localism and actually may hinder it by preventing local news outlets from achieving efficiencies by combining resources needed to gather, report, and disseminate local news and information.”26 Indeed, the Commission found that repealing the NBCO Rule – and thereby permitting newspaper/broadcast combinations – would actually “increase[e] the quantity and quality of local news and information they provide in the local markets.”27 Accordingly, improvement in the quantity and quality of local news 22 Id.