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Federal Communications Commission DA 00-2199
Before the
Federal Communications Commission
Washington, D.C. 20554
In re Applications of
LINT Co.
(Assignor)
and
Emmis Television License Corporation of Albuquerque
Emmis Television License Corporation of Honolulu
Emmis Television License Corporation of West Virginia
Emmis Television License Corporation of Tucson
Emmis Television License Corporation of Omaha
(Assignees)
For Consent to Assign the Licenses for Stations:
KRQE(TV), Albuquerque, NM
KBIM-TV, Roswell, NM
KREZ-TV, Durango, CO
KGMB(TV), Honolulu, HI
KGMV(TV), Wailuku, HI
KGMD-TV, Hilo, HI
WSAZ-TV, Huntington, WV
KGUN(TV), Tucson, AZ
KMTV(TV), Omaha, NE
Lee Enterprises, Incorporated
(Transferor)
and
Emmis Communications Corp.
(Transferee)
For Consent to Transfer Control of Subsidiary Licensees of Stations:
KOIN(TV), Portland, OR
KSNW(TV), Wichita, KS
KSNC(TV), Great Bend, KS
KSNG(TV), Garden City, KS
KSNK(TV), McCook, NE
KSNT(TV), Topeka, KS
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BALCT-20000517AAO
Fac. ID 48575
BALCT- 20000517AAP
Fac. ID 48556
BALCT-20000517AAQ
Fac. ID 48589
BALCT-20000517ACW
Fac. ID 36917
BALCT-20000517ACX
Fac. ID 36920
BALCT-20000517ACY
Fac. ID 36914
BALCT-20000517ACZ
Fac. ID 36912
BALCT-20000517ADA
Fac. ID 36918
BALCT-20000517ADB
Fac. ID 35190
BTCCT-20000517ACM
Fac. ID 35380
BTCCT-20000517ADH
Fac. ID 72358
BTCCT-20000517ADI
Fac. ID 72359
BTCCT-20000517ADJ
Fac. ID 72361
BTCCT-20000517ADK
Fac. ID 72362
BTCCT-20000517ADM
Fac. ID 67335
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MEMORANDUM OPINION AND ORDER
Adopted: September 25, 2000 Released: September 27, 2000
By the Chief, Mass Media Bureau:
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The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority, has before it for consideration the above-captioned applications whereby Lee Enterprises Incorporated (“Lee”), through its wholly owned subsidiary LINT Co. (“LINT”), seeks consent to assign the licenses for KRQE(TV), Channel 13 (CBS), Albuquerque, New Mexico; KBIM-TV, Channel 10 (CBS), Roswell, New Mexico; KREZ-TV, Channel 6 (CBS), Durango, CO; KGMB(TV), Channel 9 (CBS), Honolulu, Hawaii; KGMV(TV), Channel 3 (CBS), Wailuku, Hawaii; KGMD-TV, Channel 9 (CBS), Hilo, Hawaii; WSAZ-TV, Channel 3 (NBC), Huntington, West Virginia; KGUN(TV), Channel 9 (ABC), Tucson, Arizona; and KMTV(TV), Channel 3 (CBS), Omaha, Nebraska, to wholly owned subsidiaries of Emmis Communications Corporation (“Emmis”).1 Lee has also filed applications seeking consent to transfer control of the subsidiary licensees of the following stations to Emmis: KOIN(TV), Channel 6 (CBS), Portland, Oregon; KSNW(TV), Channel 3 (NBC), Wichita, Kansas; KSNC(TV), Channel 2 (NBC), Great Bend, Kansas; KSNG(TV), Channel 11 (NBC), Garden City, Kansas; KSNK(TV), Channel 8 (NBC), McCook, Nebraska and KSNT(TV), Channel 27 (NBC), Topeka, Kansas. In addition, Emmis will acquire 62 television translator and low power television stations from Lee.2 To permit timely closing of the transaction, Emmis requests a temporary, six-month waiver of the television duopoly rule in the Honolulu, Hawaii market. Emmis also requests a continuing satellite exception to the television duopoly rule in both the Honolulu, Hawaii, and Wichita-Hutchinson, Kansas markets, pursuant to Note 5 of Section 73.3555 of the Commission’s rules. Grape Radio (“Grape”), permittee of KRAZ(FM), Santa Ynez, California, filed an informal objection on June 30, 2000.3
Temporary Duopoly Waiver Request
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Emmis wholly owns Emmis Television License Corporation of Honolulu, the licensee of KHON-TV, Honolulu, Hawaii, along with its satellites KAII-TV, Wailuku, Hawaii, and KHAW-TV, Hilo, Hawaii. Upon grant of the applications, Emmis Television License Corporation of Honolulu will also be the licensee of KGMB(TV), Honolulu, Hawaii and associated satellite station KGMV(TV), Wailuku, Hawaii, and KGMD-TV, Hilo, Hawaii, which station rebroadcasts the signal of KGMB(TV). Common ownership of KHON-TV, Honolulu, and KGMB(TV), Honolulu, the two parent stations, would violate the Commission’s duopoly rule, 47 C.F.R. §73.3555(b)(1999), since they are located in the same DMA, their Grade B contours overlap and both stations are ranked within the top four in the DMA in terms of audience share.4 Emmis requests a six-month waiver of our duopoly rule, during which time it pledges to divest one of the two parent-satellite combinations. For the reasons set forth below, we will grant a six-month waiver of our duopoly rule, during which time Emmis must file the application or applications necessary to come into compliance with our duopoly rule in the Honolulu, Hawaii market.
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Emmis states that the Commission has granted numerous temporary waivers of its ownership rules to accommodate multi-station transactions, which, according to Emmis, have included stations with total signal overlap in markets similar in size, or smaller than, Honolulu. Citing the Commission’s decision in Shareholders of CBS Corporation, Emmis asserts that a reasonable time for orderly divestiture of either the KHON-TV or KGMB(TV) combination outweighs the impact on diversity and competition from common ownership of the stations during a reasonable period following grant of the application. Shareholders of CBS Corporation,15 FCC Rcd 8230, 8243 (2000). Temporary waiver in this case, Emmis argues, would not unduly affect diversity and competition in the Honolulu market given the multiplicity of media voices. Emmis notes that 21 commercial television stations, 4 noncommercial educational television stations, 74 commercial and noncommercial radio stations, 11 low power television stations, 21 ITFS stations, 24 MDS stations, 11 cable systems having 88% market penetration, and 6 daily newspapers serve the Honolulu market. Emmis maintains, moreover, that grant of a temporary, six-month waiver is in the public interest since it will “promote commerce, encourage investment in the broadcast industry, and allow for the free transferability of broadcast licenses.” Stockholders of CBS Inc., 11 FCC Rcd 3733, 3755 (1996).
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Discussion. In the past, we permitted temporary waivers of our multiple ownership rules in order to facilitate multi-station transactions, especially when the waiver was incidental to the larger transaction. See, e.g., Milton S. Maltz, 13 FCC Rcd 15527 (1998); ITT-Dow Jones Television, 13 FCC Rcd 4678 (1998); AFLAC Broadcasting Group, 12 FCC Rcd 3907 (1997); Providence Journal Company, 12 FCC Rcd 2883 (1997); Stockholders of CBS Inc., 11 FCC Rcd 3733 (1996); and Telemundo Group Inc., 10 FCC Rcd 1104 (1994). However, since these decisions, we have substantially relaxed our television duopoly rule by providing broadcasters with the opportunity to take advantage of common ownership of two television stations in a given market under certain circumstances. See infra footnote 4. Nevertheless, despite relaxation of our local television multiple ownership rules, we continue to weigh requests for temporary waivers against our underlying goals of diversity and competition in the broadcast marketplace. See Shareholders of CBS Corporation, 15 FCC Rcd at 8243.
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The applications at issue here involve the assignment or transfer of 15 full-service television and 62 television translator or low power television licenses, which qualifies as a “multi-station transaction” as defined in our previous decisions. After a careful review of the record, we conclude that the public interest will not be disserved by allowing Emmis six months from consummation to come into compliance with the revised duopoly rule in the Honolulu market. The stations to be commonly owned represent a small portion of this large transaction. In addition, the temporary waiver’s effect on competition and diversity in the Honolulu, Hawaii market is somewhat less consequential given the level of competition and diversity that already exists. There will remain at least 13 independently owned and operating full-power commercial and noncommercial television stations, and a total of 27 independently owned broadcast media voices, within the Honolulu market post-merger during the short period we are permitting common ownership of KHON-TV and KGMB(TV). Given all of these facts, providing six months to divest the stations, we believe, will not harm diversity or hinder competition in a manner conflicting with the public interest. We will, however, prohibit Emmis from divesting the stations to any party whose acquisition would require waiver of our multiple ownership rules. Id.
Continuing Satellite Exceptions
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Emmis also requests continuing satellite exceptions pursuant to Note 5 of the television duopoly rule, 47 C.F.R. §73.3555(b), in both the Honolulu, Hawaii and Wichita-Hutchinson, Kansas markets. With respect to the Honolulu market, Emmis seeks a continuing satellite exception for KGMV(TV), Wailuku. In the Wichita-Hutchinson, Kansas DMA, Emmis filed a showing in support of its request to continue operating KSNC(TV), Great Bend, as a satellite of KSNW(TV), Wichita.
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Emmis bases its continuing satellite exception requests in the Honolulu, Hawaii and Wichita-Hutchinson, Kansas markets on the standards adopted in Television Satellite Stations, 6 FCC Rcd 4212, 4215 (1991) (subsequent citations omitted). Under that standard, applicants acquiring satellite stations must show that the stations meet our satellite policy at the time of the assignment. However, an applicant will be entitled to a presumption that satellite operation is in the public interest if it meets three criteria: (1) no City Grade contour overlap exists between the parent and the satellite; (2) the satellite would provide service to an underserved area; and (3) no alternative operator is ready and able either to construct or to purchase and operate the satellite as a full-service station. Id. at 4212. If an applicant cannot qualify for the presumption, we will evaluate the proposal on an ad hoc basis to determine whether other compelling circumstances warrant satellite status. Id. at 4214.
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In the Honolulu market, the satellite meets the first criterion because the City Grade contour of KGMV(TV) does not overlap the City Grade contour of KGMB(TV). In the Wichita-Hutchinson market, the satellite also meets the first criterion since the City Grade contour of KSNC(TV) does not overlap the City Grade contour of KSNW(TV). With respect to the second criterion, Emmis has demonstrated that KGMV(TV) provides service to an underserved area by using our “reception test.” That test deems an area underserved if 25% or more of the area within a proposed satellite’s Grade B contour, but outside the Grade B contour of the parent station, receives four or fewer services, not including the proposed satellite service. Thirty-three percent of the area within the KGMV(TV) Grade B contour, but outside the KGMB(TV) Grade B contour, receives 4 or fewer services. In the Wichita-Hutchinson market, Emmis has demonstrated that KSNC(TV) provides service to an underserved area by using our “transmission test.” That test is met if there are two or fewer full-service stations licensed to a proposed satellite’s community of license. No other full-service station is licensed to Great Bend, Kansas, KSNC(TV)’s community of license.
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Emmis does not base its satisfaction of the third criterion in either the Honolulu or Wichita-Hutchinson markets on efforts to sell the stations. Rather, with respect to Hawaii, Emmis argues that the Commission has historically noted the unique geographic and population distribution among the islands, and has recognized that, with the exception of Oahu, none of the islands are capable of sustaining a stand-alone station. Television broadcasters provide service to the outlying Hawaiian Islands by a network of satellite stations whose parent stations are located in Honolulu. See Argyle Television, Inc., 12 FCC Rcd 10737 (1997); Providence Journal Company, 12 FCC Rcd at 2889; and BBC License Subsidiary, LP, 10 FCC Rcd 10968 (1995). In fact, all six television stations licensed to Wailuku, Hawaii operate as satellites of parent stations licensed to Honolulu. While we do not believe that Emmis’ showing meets the third criterion of our “presumptive” satellite standard, we find that the showing is strong enough to justify continued satellite status under our ad hoc satellite standard. We agree with Emmis that the unique population distribution and geography in Hawaii constitute “compelling circumstances” warranting satellite status. Thus, we conclude, continued operation of KGMV(TV) as a satellite of KGMB(TV) would serve the public interest.
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With respect to the Wichita-Hutchinson market, we note that the Commission most recently approved continued satellite status for KSNC(TV) on June 28, 1995. At that time, the Commission relied on a submission demonstrating that KSNC(TV)’s coverage contour was inferior to several Wichita stations, with which it would have to compete were it a full-service station, and that its failure to cover Wichita, the dominant population, retail, and financial center for the area, further prevented it from being competitive in the market as a stand-alone station. The Commission also relied on a submission from Brian Cobb, a media broker and Managing Director of Media Venture Partners, who stated that he would be unwilling to list KSNC(TV) as a stand-alone station due to the small likelihood of financial success. It was Cobb’s opinion that KSNC(TV) could only survive as a satellite of a more viable station. Here Emmis submits the declaration of Allan Buch, Vice-President and General Manager of KSNW-TV, Wichita, Kansas, who states that the Great Bend area is “sparsely populated,” and has a declining economy. He further notes that Great Bend contains only one television translator and one low power television station, both of which are operated by stations licensed to Wichita. Again, while we do not believe that Emmis’ showing meets the third criterion of our “presumptive” satellite standard, we do believe that the showing is strong enough to justify continued satellite status under our ad hoc satellite standard. Emmis has demonstrated that the small population base within the satellite’s community of license, as well as the station’s small coverage area, constitute “compelling circumstances” warranting satellite status. Thus, we conclude, continued operation of KSNC(TV) as a satellite of KSNW(TV) would serve the public interest.
Grape Radio Informal Objection
11. Grape alleges that Emmis is a “win-at-all-costs, hurt-the-little-guy broadcast behemoth with suspect character qualifications to remain” a Commission licensee.5 Grape, holder of an unbuilt construction permit for KRAZ(FM), Santa Ynez, California, notes that KPWR License, Inc. (“KPWR License”), a wholly owned subsidiary of Emmis and licensee of KPWR(FM), Los Angeles, California, previously filed an informal objection seeking to prevent a move of KRAZ(FM)’s proposed transmitter site. See File No. BMPH-20000306ACZ. Grape’s informal objection rests on the assertion that KPWR License abused Commission processes by filing its informal objection in order to prevent construction of KRAZ(FM), and thereby enhance the signal of co-channel KPWR(FM) in the direction of Santa Ynez. In its response, Emmis maintains that the dispute between Grape and KPWR License is unrelated to the subject assignment and transfer applications and that Grape’s objection, moreover, fails to make out any violation of Commission rules or policies. Emmis further asserts that the informal objection filed against Grape’s modification application raised legitimate technical issues concerning KRAZ(FM)’s proposed facilities, since KRAZ(FM) would operate on a co-channel with KPWR(FM).
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We conclude that Grape has failed to raise a substantial or material question of fact that justifies designating this matter for hearing, or delaying grant of the instant applications. Astroline Communications Company LP, 857 F 2d 1556, 1561 (1988). In order to demonstrate that KPWR License abused Commission processes by filing a ‘strike’ pleading, Grape “must make a strong showing” that delay was a “primary and substantial purpose” behind the informal objection. William P. Johnson and Hollis P. Johnson, d/b/a Radio Carrollton, Inc., 69 FCC 2d 1139, 1150 (1978). In determining whether delay was a “primary and substantial” purpose, the Commission considers a number of factors, including: (1) statements by principals or officers of the licensee admitting an obstructive purpose; (2) the withholding of information relevant to a determination of the issues raised; (3) the absence of any reasonable bases for the allegations raised in the petition to deny; (4) economic motivation indicating a delaying purpose; and (5) other conduct of the licensee. Id., at 1151. Grape’s argument that KPWR License filed the informal objection in order to delay the grant of KRAZ(FM)’s modification application rests solely on circumstantial evidence, such as the timing of the informal objection, which allegedly indicates an intent to prevent competition in the Santa Ynez market. The Commission, however, will not “infer a ‘strike’ motive from the mere filing of a[n]” informal objection, even though KPWR License may have gained some benefit from normal processing delays. Id. Grape has submitted no extrinsic evidence that delay was a “primary and substantial purpose” behind filing the informal objection. Rather, it appears, KPWR License has concerns about potential interference with its station’s signal, which arises from the fact that both KRAZ(FM) and KPWR(FM) operate on the same frequency. Consequently, Grape’s informal objection is denied.
Conclusion
13. Having determined that the applicants are qualified in all respects, we find that grant of the applications will serve the public interest, convenience, and necessity.
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ACCORDINGLY, IT IS ORDERED, That the request for a temporary waiver of the duopoly rule, Section 73.3555(b), to permit common ownership of KHON-TV and KGMB(TV), IS GRANTED, subject to the condition that within six months of consummation of this transaction, Emmis Television License Corporation of Honolulu file the application or applications necessary to bring it into compliance with the duopoly rule.
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IT IS FURTHER ORDERED, That the requests for continued satellite authorization, pursuant to Note 5 of Section 73.3555, for KGMV(TV), Wailuku, Hawaii, and KSNC(TV), Great Bend, Kansas, ARE GRANTED.
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IT IS FURTHER ORDERED, That the informal objection filed by Grape Radio IS DENIED.
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IT IS FURTHER ORDERED, That the applications of LINT Co. for consent to assign the licenses of KRQE(TV), Albuquerque, New Mexico; KBIM-TV, Roswell, New Mexico; KREZ-TV, Durango, New Mexico; KGMB(TV), Honolulu, Hawaii; KGMV(TV), Wailuku, Hawaii; KGMD-TV, Hilo, Hawaii; WSAZ-TV, Huntington, West Virginia; KGUN(TV), Tucson, Arizona; and KMTV(TV), Omaha, Nebraska (File Nos. BALCT-20000517AA0-AAQ, BALCT-20000517ACW-ACZ, and BALCT-20000517ADA-ADB), and associated television translator and low power television stations, as listed in Appendix A, ARE GRANTED.
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IT IS FURTHER ORDERED, That the applications of Lee Enterprises, Inc. for consent to transfer control of the licensees of stations KOIN(TV), Portland, Oregon; KSNW(TV), Wichita, Kansas; KSNC(TV), Great Bend, Kansas; KSNG(TV), Garden City, Kansas; KSNK(TV), McCook, Nebraska; and KSNT(TV), Topeka, Kansas (File Nos. BTCCT-20000517ACM, BTCCT-20000517ADH-K, and BTCCT-20000517ADM), and associated television translator and low power television stations, as listed in Appendix B, ARE GRANTED.
FEDERAL COMMUNICATIONS COMMISSION
Roy J. Stewart
Chief, Mass Media Bureau
Appendix A
LINT Co., a wholly owned subsidiary of Lee Enterprises, Inc., seeks consent to assign the following television translator and low power television licenses to wholly owned subsidiaries of Emmis Communications Corporation:
Call Sign
|
Community of License
|
File Number
|
Facility ID Number
|
KO4NS
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Pagosa Springs, CO
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BALTTV-20000517AAR
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51292
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K56DO
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Pagosa Springs, CO
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BALTT-20000517AAS
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51294
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K13VW
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Chinle, AZ
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BALTTV-20000517AAT
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48570
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K67AF
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Many Farms, AZ
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BALTT-20000517AAU
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48582
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K26EP
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Dulce & Lumberton, NM
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BALTT-20000517AAV
|
48586
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K11JO
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Bloomfield & Blanco, NM
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BALTTV-20000517AAW
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48567
|
KO8FR
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Aztec, NM
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BALTTV-2000517AAX
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48577
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K21AX
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Farmington, NM
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BALTT-20000517AAY
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48562
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K02IL
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Pagosa Springs, CO
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BALTTV-20000517AAZ
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48590
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KO6JF
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Cortez, CO
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BALTTV-20000517ABA
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48592
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K42DI
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Bayfield & Ignacio, CO
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BALTT-20000517ABB
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48595
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K66AV
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Sumetha & Nutria, CO
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BALTT-20000517ABC
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48591
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K68AZ
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Durango/Hermosa, CO
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BALTT-20000517ABD
|
48593
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K65CG
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Alamagordo, NM
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BALTT-20000517ABE
|
47276
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K23BT
|
Farmington, NM
|
BALTT-20000517ABF
|
48594
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K09EP
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Grants/Milan, NM
|
BALTTV-20000517ABG
|
48560
|
K08LA
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Black Lake, NM
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BALTTV-20000517ABH
|
5487
|
K11NV
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Guadalupita, NM
|
BALTTV-20000517ABI
|
25509
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K13OX
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Mud Canyon, NM
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BALTTV-20000517ABJ
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48580
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K22EW
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Mora, NM
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BALTT-20000517ABK
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22272
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K38EC
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Eagle Next, NM
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BALTT-20000517ABL
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35562
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K44CJ
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Tucumcari, NM
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BALTT-20000517ABM
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48581
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K45EC
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Silver City, NM
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BALTT-20000517ABN
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35563
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K52DL
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Raton, NM
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BALTT-20000517ABO
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48588
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K57CF
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Carrizozo, NM
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BALTT-20000517ABP
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48564
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K67BG
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Caballo, NM
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BALTT-20000517ABQ
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48566
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K67FP
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Crownpoint, NM
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BALTT-20000517ABR
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48571
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K83AT
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Farmington, NM
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BALTT-20000517ABS
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48585
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K63DU
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Lordsburg, NM
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BALTT-20000517ABT
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48573
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K66BH
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Navajo Compressor Station, NM
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BALTT-20000517ABU
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19107
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K21FD
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Taos, NM
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BALTT-20000517ABV
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48572
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K11OD
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Carizozo, NM
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BALTTV-20000517ABW
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48552
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K13OY
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Mescalero, NM
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BALTTV-20000517ABX
|
48579
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K29DP
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Lordsburg, NM
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BALTT-20000517ABY
|
48587
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K43FI
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Las Vegas, NM
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BALTT-20000517ABZ
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48559
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K44DD
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Chama, NM
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BALTT-20000517ACA
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48558
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K47DI
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Coyote Canyon, NM
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BALTT-20000517ACB
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48569
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K57AW
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Deming, NM
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BALTT-20000517ACC
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48561
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K59BD
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Hornsby Ranch, NM
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BALTT-20000517ACD
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48568
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K67CE
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Gallina, NM
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BALTT-20000517ACE
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23045
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K69AE
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Colfax/Raton, NM
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BALTT-20000517ACF
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48568
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K06BN
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Wagon Mound, NM
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BALTTV-20000517ACG
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70695
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KO8ES
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Red River, NM
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BALTTV-20000517ACH
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13437
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K49BY
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Clovis, NM
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BALTT-20000517ACI
|
38551
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K69CQ
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Dora, NM
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BALTT-20000517ACJ
|
48557
|
K16BZ
|
Ruidoso, NM
|
BALTT-20000517ACK
|
48554
|
K59AB
|
Alamagordo, NM
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BALTT-20000517ACL
|
48563
|
K57BI
|
Waimea, HI
|
BALTT-20000ADC
|
36907
|
K69BZ
|
Lihue, etc., HI
|
BALTT-20000ADD
|
36909
|
W23BH
|
Charleston, WV
|
BALTTL-20000517ADE
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36921
|
K60FC
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Oro Valley/Tucson, AZ
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BALTT-20000517ADF
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36915
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K02BW
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Casa Adobes, AZ
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BALTTV-20000517ADG
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36911
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I.Appendix B
Lee Enterprises Inc. seeks consent to transfer control of subsidiaries holding the following television translator and low power television licenses to Emmis Communications Corporation:
Call Sign
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Community of License
| A.File Number | B.Facility ID Number |
K31CR
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Prineville, etc., OR
|
BTCTT-20000517CAN
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35373
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K34DC
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Astoria, OR
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BTCTT-20000517ACO
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35374
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K38CZ
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Lincoln City/Newport, OR
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BTCTT-20000517ACP
|
35371
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K11SE
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Bend, OR
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BTCTVL-20000517ACQ
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35384
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K52AK
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Prineville, etc., OR
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BTCTT-20000517ACR
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35381
|
K64BK
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The Dalles, OR
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BTCTT-20000517ACS
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35376
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K65AE
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Terrebonne, OR
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BTCTT-20000517ACT
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35375
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K52ET
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Tillamook, OR
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BTCTT-20000517ACU
|
67106
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K63AW
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Grays River, etc., WA
|
BTCTT-20000517ACV
|
35382
|
K06LZ
|
Salina, KS
|
BTCTTV-20000517ADL
|
72360
|
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