Federal Communications Commission DA 97-1709 Before the Federal Communications Commission Washington, D.C 20554 In re Request of: ) ) Young Broadcasting, Inc. ) ) For Waiver of the Duopoly Rule ) MEMORANDUM OPINION AND ORDER Adopted: August 8,1997 Released: August 11,1997 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 request for extension of divestiture period and for permanent waiver of the Commission©s television duopoly rule. This request is related to Broad Street Television, L.P., 11 FCC Red 12398 (1996), in which the Commission approved the assignment of KWQC-TV, Channel 6, (NBC) Davenport, Iowa to Young Broadcasting, Inc. ("Young"). Because the Grade B contour of KWQC-TV overlapped the Grade B contour of Young©s WTVO(TV), Channel 17 (ABC), Rockford, Illinois, Young sought and was granted a temporary six-month waiver of the duopoly rule to divest WTVO(TV).© Since that time the Commission has proposed changes to its television duopoly rule and adopted an interim waiver policy that would permit common ownership of KWQC-TV and WTVO(TV). See Review of the Commission©s Regulations Governing Television Broadcasting, Second Further Notice of Proposed Rule Making, FCC 96-438 (released November 7, 1996) (Television Ownership Second Further Notice). Young now requests a permanent duopoly waiver to allow common ownership of KWQC-TV and WTVO(TV). 2. 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 our broadcast television ownership rules. See Review of the Commission©s Regulations Governing Television Broadcasting, Further Notice ofProposed Rule Making, 10 FCC Red 3524 (1995) (Television Ownership Further Notice). Subsequent to the release of that 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- 1 The television duopoly rule, 47. C.F.R. §73.3555(b), proscribes common ownership of television stations with overlapping Grade B contours. 4810 Federal Communications Commission DA 97-1709 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 Television Ownership Second Further Notice. In that Second Further Notice, the Commission tentatively concluded to authorize common ownership of television stations that are in separate Designated Market Areas (DMAs) and whose Grade A contours do not overlap. Television Ownership Second Further Notice at f57. 3. 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 duopoly waivers involving stations hi different DMAs with no overlapping Grade A contours, conditioned on coming into compliance with the outcome of the proceeding within six months of its conclusion. It also noted 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 DMAs supplemented with a Grade A overlap criterion." Id. at f 57. 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. Id 4. In Broad Street Television. L.P., the Commission determined that Young©s request for temporary waiver of the duopoly rule to permit common ownership of KWQC-TV and WTVO(-TV) was hi the public interest. It based that determination on the proposal©s consistency with the factors set out in previous duopoly waiver cases. See, e.g., Iowa State University, 9 FCC Red 481, 487-88 (1993) offd sub nom. lowans for WOl-TV Inc. v. FCC, 50 F. 3d 1096 (D.C. Cir. 1995). Specifically, the Commission took into account the numerous other television stations and other broadcast services in the overlap area, as well as the distinctness of the markets served by the two stations. The Commission noted that KWQC-TV is licensed to Davenport in the Davenport, Iowa/Rock Island-Moline, Illinois DMA, which is the country©s 88th largest market, and WTVO(TV) is licensed to Rockford, the 136th largest DMA. The Commission also looked at the extent of the overlap, which represented 4.7% of the service area and 5.9% of the population within KWQC-TV©s Grade B service contour and 16.6% of the service area and 11.1% of the population within WTVO(TV)©s Grade B service contour, and noted that although not de minimis, the overlap was not so large as to require a finding that the stations served substantially the same area. Also noting Young©s representations concerning specific public interest benefits resulting from the proposed transaction, it granted Young six months to divest station WTVO-TV and to come into compliance with the Commission©s rules. 5. With regard to the current request, Young has submitted an engineering exhibit which shows that it has increased the operating power of WTVO(TV) to reach an additional 150,000 persons while reducing the overlap between the two stations to 4.5% of the service area and 4.7% of the population within KWQC-TV©s Grade B service contour and 13.1% of the service area and 7.2% of the population within WTVO(TV)©s Grade B service contour. The stations© Grade A contours do not overlap and they continue to be located in separate DMAs. Young also states 4811 Federal Communications Commission DA 97-1709 that it has fulfilled its public interest commitments that justified grant of the six-month waiver.2 But in light of the "significant changes in the television marketplace sparked by passage of the Telecommunications Act of 1996," Young states that it must "continue to grow to remain an effective competitor in the new television regime" and thus requests a permanent waiver of the duopoly rule. 4. Given the clearly articulated policy in the Television Ownership Second Further Notice, we do not believe that an unconditional grant of the requested duopoly waiver is appropriate. See WHOA-TV, Inc.. FCC 96-458 at ffl2-13, 27 (released December 10, 1996). However, we believe that grant of a conditional waiver of the duopoly rule, subject to the outcome of the pending ownership rulemaking, is justified. See, Gannett Co., Inc., DA 97-1635 (released August 4, 1997); KNSD Licensee, Inc., DA 96-1848 (released November 7, 1996). Moreover, our examination of the record, including Young©s showings in support of its original waiver request, our conclusion based on that showing that temporary waiver was warranted, and the public interest benefits resulting from grant of that waiver, reveals nothing suggesting that the Commission©s interim policy is inapplicable to 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. 5. 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 by Young Broadcasting, Inc. of television stations KWQC-TV, Davenport, Iowa and WTVO(TV), Rockford Illinois, IS DENIED; however, a conditional waiver of Section 73.3555(b) IS GRANTED to permit the common ownership of stations KWQC-TV, Davenport, Iowa and WTVO(TV), Rockford Illinois, 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 licensee is directed to file, within six months from release of the final order in MM Docket Nos. 91-221 and 87-8, an application for Commission consent to dispose of such station as would be necessary for Young Broadcasting, Inc. to come into compliance with the rules as provided in the final order. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau 2 Young reports that, as promised, it has commenced ascertainment procedures to determine the community©s major concerns about children; instituted responsive measures to enhance children©s programming including the addition of new programming; hired an additional news person to cover the underserved Dubuque area; and obtained access to a satellite uplink truck. 4812.