10 FCC Red No. 5 Federal Communications Commission Record FCC 94-361 2. KABC-AM Radio, Inc. is a wholly-owned subsidiary of Before the Cap Cities, which also owns the corporate licensees of Federal Communications Commission KABC(AM), KLOS(FM) and KABC-TV, all licensed to Los Washington, D.C. 20554 Angeles, California.3 The Commission authorized Cap Cities to retain common ownership of these three stations in 1989 on the basis of Cap Cities© showing that the Los In re Application of Angeles market satisfied the Commission©s criteria for waiver of the one-to-a-market rule. See Capital Cities/ABC, Golden West Broadcasters Inc., 4 FCC Red 5498 (1989); see also In re Amendment of Section 73.3555 of the Commission©s Rules, the Broadcast (Assignor) Multiple Ownership Rules ("Second Report and Order"), 4 FCC Red 1741 (1989), recon. granted in part and denied in and File No. BAL-940503EA part ("Second Report and Order Recon."), 4 FCC Red 6489 (1989). Because the Grade A contour of KABC-TV encom KABC-AM Radio, Inc. passes all of Los Angeles, grant of the above-captioned (Assignee) application requires waiver of the one-to-a-market rule.4 3. Cap Cities bases its waiver request on the one-to- For Assignment of License of a-market waiver standards adopted in the Second Report KMPC(AM), Los Angeles, California and Order. Under these criteria, the Commission presump tively favors waiver requests involving station combinations serving the top 25 markets where there are at least 30 MEMORANDUM OPINION AND ORDER separately owned, operated and controlled broadcast li censees or "voices" after the proposed combination ("top Adopted: December 30, 1994; Released: February 21, 1995 25 market/30 voice standard"). See 47 C.F.R. §73.3555, n.7. It also favors requests involving "failed" broadcast stations, that is, stations that have not been operating for a substan By the Commission: tial period of time, e.g., four months, or that are involved in bankruptcy proceedings. Id. Other waiver requests are 1. The Commission has before it the above-captioned evaluated on a more rigorous case-by-case basis, as set forth application for assignment of license of KMPC(AM), Los in the Second Report and Order. While Cap Cities© waiver Angeles, California, from Golden West Broadcasters request meets the top 25 market/30 voice standard,5 it ("Golden West") to KABC-AM Radio, Inc., and a related nevertheless must be reviewed under the case-by-case stan request for waiver of 47 C.F.R. §73.3555(b), the Commis dard because, as noted, the proposed assignment of license sion©s one-to-a-market rule.1 On June 1, 1994, the Commis also relies upon the revised local radio ownership limits.6 sion received an informal objection to grant of the subject Under this standard, the Commission makes a public inter application from Thomas K. Van Amburg ("Van est determination based upon the following criteria: (1) the Amburg"). Van Amburg contends that the proposed assign potential public service benefits of joint operation of the ment of license contravenes prior Commission rulings re facilities; (2) the types of facilities involved; (3) the number garding ownership of local radio/television combinations by of media outlets owned by the applicant in the relevant KABC-AM Radio, Inc.©s parent corporation, Capital market; (4) the financial difficulties of the stations in Cities/ABC, Inc. ("Cap Cities"), as well as the "spirit and volved; and (5) the nature of the relevant" market in light intent" of the Commission©s radio ownership rule, 47 C.F.R. §73.3555(a)(l).2 1 Section 73.3555(b) of the Commission©s rules prohibits the §73.3555(a)(l). Cap Cities demonstrates that there are at least 15 common ownership of radio and television stations in the same radio stations whose contours overlap the contours of the pro market if the 2 mV/m contour of an AM station or the 1 mV/m posed commonly-owned stations. Because over 50 percent of contour of an FM station encompasses the entire community of principal community contour overlap of same service stations license of a commonly-owned television station, or, conversely, KABC(AM) and KMPC(AM) occurs within the Los Angeles, if the Grade A contour of a television station encompasses the California radio metre market, as defined by Arbitron, Inc., Cap entire community of license of a commonly-owned AM or FM Cities supplies audience share data from the most recent station. See 47 C.F.R. §73.3555(b). Arbitron survey available from that market at the time the 2 Van Amburg identifies himself as a member of a group of instant application was filed. See 47 C.F.R. §73.3555(a)(3)(iii). local broadcasters that unsuccessfully attempted to purchase Those data show that the combined audience share of KMPC(AM) from Golden West. Because Van Amburg©s opposi KABC(AM), KMPC(AM), and KLOS(FM) in the metro market tion was not served on the applicant and does not contain is 7.0 percent, and therefore below the 25 percent audience specific allegations of fact sufficient to show that Van Amburg is share limit set forth in the rule. a party in interest, his opposition will be considered as an 5 As set forth in paragraph 10, infra., the Los Angeles media informal objection pursuant to Section 73.3587 of the Commis market is the country©s second largest and contains 78 separate sion©s rules. See 47 C.F.R. §73.3587. broadcast "voices." 3 Cap Cities will hereafter be used to identify KABC-AM, " See In re Revision of Radio Rules and Policies, 1 FCC Red Radio, Inc., as well as the licensees of KABC(AM), KLOS-FM, 6387, 6394, n.40 (1992); see also Moosey Communications, Inc., 8 and KABC-TV. FCC Red 5247 (1993)(consideration of one-to-a-market waivers 4 Because the principal community contours of KMPC(AM) under the case-by-case standard still appropriate where new and KABC(AM) overlap. Cap Cities must also meet the require radio-TV combinations are created, pending the possible revi ments of the local radio ownership rule found in Section sion of the one-to-a-market rule in the outstanding TV owner 73.3555(a) of the Commission©s rules. See 47 C.F.R. ship proceeding in MM Docket No. 91-221). 2081 FCC 94-361 Federal Communications Commission Record 10 FCC Red No. 5 of the level of competition and diversity after the joint nighttime hours only. In support of its contention that the operation is implemented. See Second Report and Order, 4 subject facilities do not dominate the market, Cap Cities FCC Red at 1753-54. notes the presence of six other VHF television stations in 4. In support of its waiver request, Cap Cities submits a the Los Angeles market, as well as at least three other Class showing that addresses each of the five case-by-case factors.7 B FM stations and eleven AM stations with facilities com Cap Cities first asserts that the proposed combination of parable to KABC(AM) and KMPC(AM). KMPC(AM), KABC(AM), and KLOS(FM) will create effi 6. Third, with respect to the number of other media ciencies by combining management personnel, as well as outlets the applicant already owns in the relevant market, news, programming, and production staffs. Cap Cities con Cap Cities affirms it does not own any broadcast stations in tends that savings will be realized by consolidating radio the Los Angeles market other than KABC-TV, KLOS(FM), station sales offices, equipment sharing, and securing vol and KABC(AM). As previously noted, Cap Cities dem ume discounts on purchases of supplies and programming onstrates that for purposes of the Commission©s local radio services.8 Cap Cities also notes its intention to consolidate ownership rule, there are at least 15 radio stations whose its Los Angeles radio operations at the existing facilities of contours overlap the proposed commonly-owned radio sta KABC(AM) and KLOS(FM), reducing rent and utility ex tions and that the combined audience share of KLOS(FM), penses. With respect to benefits arising from its proposed KABC(AM), and KMPC(AM) in the Los Angeles metre ownership of KMPC(AM) and KABC-TV, Cap Cities main market is 7.0 percent. See note 4, supra. tains that although it intends to operate KMPC(AM) and 7. Fourth, with regard to the economic status of the KABC-TV separately, KMPC(AM)©s affiliation with KABC- stations involved in the proposed combination, Cap Cities TV will enable KMPC(AM) to avail itself of KABC-TV©s and Golden West state that KMPC(AM) sustained operating experience in the local employment market, particularly losses of $3.4 million in 1991, approximately $6.5 million KABC-TV©s access to recruitment sources and knowledge in 1992, and $6.9 million in 1993. Cap Cities and Golden of hiring conditions.9 Cap Cities further maintains that West also indicate that KMPC(AM)©s losses continued at a KMPC(AM)©s affiliation with Cap Cities© ABC Radio Net similar rate in 1994, and note that the station continued to work and the radio network©s affiliation with ABC Televi sustain losses notwithstanding Golden West©s implementa sion Network news operations will strengthen the news tion of a new program format in 1992. gathering resources of both KMPC(AM) and KABC-TV. In 8. The fifth factor relates to the nature of the relevant sum, Cap Cities estimates projected savings of $5.8 million market in light of the Commission©s concerns about diver annually from the proposed combination.- With respect to sity and competition.