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Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:d<d<BBoodBBddBoBddzzzzzzzzzzBBBBozdddddddYYYYY8888dddddddndddddYd2T) X-  #XP\  P6QXP#$// MO&O, KMPC(AM), Los Angeles, CA, FCC 94361 //$ $/ 73.3555(a) "onetoamarket" rule /$ $/ 73.3555(b) "onetoamarket" rule /$  X-2+ #XP\  P6QXP#Before the Q Federal Communications Commission FCC 94361 Washington, D.C. 20554 T T  X1-TP  X -In re Application of hh@h)pp  xx 0 x` `  hh@h)  X -Golden West Broadcastershh@h)pp  X -(Assignor)` `  hh@h) x` `  hh@h)  X-andx` `  hh@h)ppFile No. BAL940503EA(#(#X x` `  hh@h)  Xb-KABCAM Radio, Inc.hh@h)  XK-(Assignee)` `  hh@h) x` `  hh@h)  X-For Assignment of License ofhh@h)  X-KMPC(AM), Los Angeles, California@h)  X-  MEMORANDUM OPINION AND ORDER T  X-TP  X|-Adopted: December 30, 1994hh@h Released: xBy the Commission: x1. The Commission has before it the abovecaptioned application for assignment of license of KMPC(AM), Los Angeles, California, from Golden West Broadcasters ("Golden West") to KABCAM Radio, Inc., and a related request for waiver of 47 C.F.R. 73.3555(b),  X-the Commission's onetoamarket rule.vT XT"-ԍ Section 73.3555(b) of the Commission's rules prohibits the common ownership of radio and television stations in the same market if the 2 mV/m contour of an AM station or the 1 mV/m contour of an FM station encompasses the entire community of license of a commonlyowned television station, or, conversely, if the Grade A contour of a television station  X%-encompasses the entire community of license of a commonlyowned AM or FM station. See 47 C.F.R. 73.3555(b). On June 1, 1994, the Commission received an informal objection to grant of the subject application from Thomas K. Van Amburg ("Van Amburg"). Van Amburg contends that the proposed assignment of license contravenes prior"!0*0*0* "  X-Commission rulings regarding ownership of local radio/television combinations by KABCAM Radio, Inc.'s parent corporation, Capital Cities/ABC, Inc. ("Cap Cities"), as well as the "spirit  X-and intent" of the Commission's radio ownership rule, 47 C.F.R. 73.3555(a)(1).v  XK-ԍ Van Amburg identifies himself as a member of a group of local broadcasters that unsuccessfully attempted to purchase KMPC(AM) from Golden West. Because Van Amburg's opposition was not served on the applicant and does not contain specific allegations of fact sufficient to show that Van Amburg is a party in interest, his opposition will be considered as an informal objection pursuant to Section 73.3587 of the Commission's rules.  X-See 47 C.F.R. 73.3587. x2. KABCAM Radio, Inc. is a whollyowned subsidiary of Cap Cities, which also  X-owns the corporate licensees of KABC(AM), KLOS(FM) and KABCTV, all licensed to Los  Xv-Angeles, California.v  X--ԍ Cap Cities will hereafter be used to identify KABCAM, Radio, Inc., as well as the licensees of KABC(AM), KLOSFM, and KABCTV. 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 Angeles market  XH-satisfied the Commission's criteria for waiver of the onetoamarket rule. See Capital  X1-Cities/ABC, Inc., 4 FCC Rcd 5498 (1989); see also In re Amendment of Section 73.3555 of  X -the Commission's Rules, the Broadcast Multiple Ownership Rules ("Second Report and  X -Order"), 4 FCC Rcd 1741 (1989), recon. granted in part and denied in part ("Second Report  X -and Order Recon."), 4 FCC Rcd 6489 (1989). Because the Grade A contour of KABCTV  X -encompasses all of Los Angeles, grant of the abovecaptioned application requires waiver of  X -the onetoamarket rule./  X-ԍ Because the principal community contours of KMPC(AM) and KABC(AM) overlap, Cap Cities must also meet the requirements of the local radio ownership rule found in Section  X-73.3555(a) of the Commission's rules. See 47 C.F.R. 73.3555(a)(1). Cap Cities demonstrates that there are at least 15 radio stations whose contours overlap the contours of the proposed commonlyowned stations. Because over 50 percent of principal community contour overlap of same service stations KABC(AM) and KMPC(AM) occurs within the Los Angeles, California radio metro market, as defined by Arbitron, Inc., Cap Cities supplies audience share data from the most recent Arbitron survey available from that market at the  XW-time the instant application was filed. See 47 C.F.R. 73.3555(a)(3)(iii). Those data show that the combined audience share of KABC(AM), KMPC(AM), and KLOS(FM) in the metro market is 7.0 percent, and therefore below the 25 percent audience share limit set forth in the rule./ x3. Cap Cities bases its waiver request on the onetoamarket waiver standards  Xy-adopted in the Second Report and Order. Under these criteria, the Commission presumptively favors waiver requests involving station combinations serving the top 25 markets where there are at least 30 separately owned, operated and controlled broadcast licensees or "voices" after  X4-the proposed combination ("top 25 market/30 voice standard"). See 47 C.F.R. 73.3555, n. 7. "4T0*((" It also favors requests involving "failed" broadcast stations, that is, stations that have not been  X-operating for a substantial period of time, e.g., four months, or that are involved in  X-bankruptcy proceedings. Id. Other waiver requests are evaluated on a more rigorous caseby X-case basis, as set forth in the Second Report and Order. While Cap Cities' waiver request  X-meets the top 25 market/30 voice standard,  X-ԍ As set forth in paragraph 10, infra., the Los Angeles media market is the country's  X-second largest and contains 78 separate broadcast "voices." it nevertheless must be reviewed under the casebycase standard because, as noted, the proposed assignment of license also relies upon the  Xv-revised local radio ownership limits.vb  X -ԍ See In re Revision of Radio Rules and Policies, 7 FCC Rcd 6387, 6394, n. 40 (1992);  Xr -see also Moosey Communications, Inc., 8 FCC Rcd 5247 (1993)(consideration of onetoamarket waivers under the casebycase standard still appropriate where new radioTV combinations are created, pending the possible revision of the onetoamarket rule in the outstanding TV ownership proceeding in MM Docket No. 91221). Under this standard, the Commission makes a public interest determination based upon the following criteria: (1) the potential public service benefits of joint operation of the facilities; (2) the types of facilities involved; (3) the number  X1-of media outlets owned by the applicant in the relevant market; (4) the financial difficulties of the stations involved; and (5) the nature of the relevant market in light of the level of  X -competition and diversity after the joint operation is implemented. See Second Report and  X -Order, 4 FCC Rcd at 175354. x4. In support of its waiver request, Cap Cities submits a showing that addresses each  X -of the five casebycase factors.   X-ԍ It should be noted that "[n]ot all of the factors mentioned will be relevant in every  X-case." See Second Report and Order Recon., 4 FCC Rcd at 6491, para. 18. Cap Cities first asserts that the proposed combination of KMPC(AM), KABC(AM), and KLOS(FM) will create efficiencies by combining management personnel, as well as news, programming, and production staffs. Cap Cities contends that savings will be realized by consolidating radio station sales offices, equipment sharing, and  XK-securing volume discounts on purchases of supplies and programming services.KQ  XM-ԍ Cap Cities also observes that KMPC(AM) would realize the benefits of Cap Cities' corporate personnel, financial, accounting, engineering, and legal services currently provided to each of its Los Angeles broadcast stations. Cap Cities  X4-also notes its intention to consolidate its Los Angeles radio operations at the existing facilities of KABC(AM) and KLOS(FM), reducing rent and utility expenses. With respect to benefits arising from its proposed ownership of KMPC(AM) and KABCTV, Cap Cities maintains that although it intends to operate KMPC(AM) and KABCTV separately, KMPC(AM)'s affiliation with KABCTV will enable KMPC(AM) to avail itself of KABCTV's experience in the local  X-employment market, particularly KABCTV's access to recruitment sources and knowledge of"0*((q"  X-hiring conditions.   Xy-ԍ Cap Cities cites the Commission's decision in Guy Gannett Publishing Co., 7 FCC Rcd 1787 (1992), in support of its contention that the Commission recognizes that, in evaluating requests for waiver of the onetoamarket rule, efficiency benefits may result from common ownership of radio and television stations in the same market even if the stations will be operated separately. Cap Cities further maintains that KMPC(AM)'s affiliation with Cap Cities' ABC Radio Network and the radio network's affiliation with ABC Television Network news operations will strengthen the news gathering resources of both KMPC(AM) and KABCTV.  X-In sum, Cap Cities estimates projected savings of $5.8 million annually from the proposed  X-combination.   Xr -ԍ Cap Cities estimates that annual savings would include $1.7 million in personnel costs, $367,000 in rent and utility expenses, and $175,000 in programming expenses such as ratings service subscriptions and association dues. With respect to related public service and programming benefits, Cap Cities notes its intention to institute a format at KMPC(AM) that would include enhanced public affairs programming analogous to that offered by KABC(AM), which Cap Cities indicates airs  X_-both daily public affairs programming and regular public service announcements. _  X-ԍ Cap Cities asserts that, under its ownership, KMPC(AM) would air a talk radio format complementing that aired by KABC(AM), which Cap Cities notes airs regular programming addressing issues facing the Los Angeles community. Cap Cities further notes that combining KMPC(AM) with KABC(AM) would enable KMPC(AM) to avail itself of KABC(AM)'s community relations department, which Cap Cities notes has received numerous awards for outstanding public service. x5. Second, regarding the technical facilities involved, Cap Cities affirms that KABCTV is a VHF television station operating on Channel 7 with 141 kW effective radiated power ("ERP") and an antenna height of 3210 feet above average terrain ("HAAT"). KLOS(FM) is a Class B FM station operating on Channel 238 (95.5 MHz) with 50 kW ERP and an antenna height of 1200 feet HAAT. KABC(AM) is a Class B AM station operating full time on 790 kHz with a power of 5 kW using a directional antenna system during nighttime hours only. KMPC(AM) is a Class B AM station operating full time on 710 kHz with a power of 50 kW during daytime hours and 10 kW during nighttime hours using a directional antenna system during nighttime hours only. In support of its contention that the subject facilities do not dominate the market, Cap Cities notes the presence of six other VHF television stations in the Los Angeles market, as well as at least three other Class B FM stations and eleven AM stations with facilities comparable to KABC(AM) and KMPC(AM). x6. Third, with respect to the number of other media outlets the applicant already owns in the relevant market, Cap Cities affirms it does not own any broadcast stations in the Los Angeles market other than KABCTV, KLOS(FM), and KABC(AM). As previously noted, Cap Cities demonstrates that for purposes of the Commission's local radio ownership rule, there are at least 15 radio stations whose contours overlap the proposed commonlyowned"e# 0*((" radio stations and that the combined audience share of KLOS(FM), KABC(AM), and  X-KMPC(AM) in the Los Angeles metro market is 7.0 percent. See note 4, supra. x7. Fourth, with regard to the economic status of the stations involved in the proposed combination, Cap Cities and Golden West state that KMPC(AM) sustained operating losses of $3.4 million in 1991, approximately $6.5 million in 1992, and $6.9 million in 1993. Cap Cities and Golden West also indicate that KMPC(AM)'s losses continued at a similar rate in 1994, and note that the station continued to sustain losses notwithstanding Golden West's implementation of a new program format in 1992. x8. The fifth factor relates to the nature of the relevant market in light of the Commission's concerns about diversity and competition. Relevant indicia include the number of broadcast outlets, the number of separatelyowned and operated "voices" in the market, and the presence of cable and nonbroadcast media. As to the number of broadcast stations, the Commission has held that, in the context of a onetoamarket waiver, it will consider the  X -"relevant TV metro market for radio stations and the relevant ADI [Area of Dominant  X-Influence] TV market for TV stations." See Second Report and Order, 4 FCC Rcd at 1760, n. 101. Cap Cities represents that the Los Angeles ADI is ranked 2nd in the country and contains 32 AM stations, 36 FM stations, 24 TV stations, and over 30 daily newspapers. Cap Cities further represents that the broadcast stations in the market are owned and operated by 73 different "voices." Additionally, Cap Cities notes that the Los Angeles market is served by 126 separate cable systems having a penetration rate of 59 percent, and that over 81 percent of households have VCRs. Cap Cities argues that viewpoint diversity in Los Angeles exceeds that of any other market in the United States, and that the Los Angeles market has a greater number of independent broadcast "voices" than markets in which the Commission has recently granted requests for waiver of the onetoamarket rule under the casebycase  X-factors.o   X#-ԍ In support of its contentions, Cap Cities cites recent Commission actions granting one X -toamarket rule waivers in KVI(AM), 9 FCC Rcd 1330 (1994); BREM Broadcasting, 9 FCC  X-Rcd 1333 (1994); and Moosey Communications, Inc., 8 FCC Rcd 5247 (1993).o  x9. Van Amburg asserts that he offered to purchase KMPC(AM) from Golden West for $15 million, $2.5 million less than the purchase price agreed upon between Golden West and Cap Cities. Van Amburg contends that had the Commission enforced its previous rulings,  X7-which originally required Cap Cities to divest itself of radio station ownership in markets in which it also owns television stations, Cap Cities would be otherwise precluded from  X -increasing its radio ownership in the subject market.H  K  X$-ԍ In 1985, the Commission approved the merger of Capital Cities Communications and American Broadcasting Companies, Inc., and granted a temporary waiver of the onetoamarket rule to permit the new entity to retain common ownership of KABC(AM), KLOS(FM), and KABCTV for a period of 18 months following consummation of the"& 0*((&"  X-merger. Capital Cities Communications, Inc., 59 RR 2d 451 (1985). Prior to the required divestiture date, however, the Commission instituted a rulemaking proceeding in which it proposed to amend the multiple ownership rules and permit common ownership of television  XK-and radio stations in the larger television markets. See In re Amendment of Section 73.3555  X4-of the Commission's Rules, the Broadcast Multiple Ownership Rules, 2 FCC Rcd 1138 (1987). In view of the thenpending rulemaking, Cap Cities requested that the Commission extend the divestiture requirement for a period of up to six months after the effective date of  X-the Commission's action in that proceeding. See Capital Cities/ABC, Inc., 2 FCC Rcd 2539 (1987). Cap Cities subsequently availed itself of the "top 25 market/30 voice standard" for  X -onetoamarket rule waivers adopted by the Commission in the Second Report and Order in  X -order to retain ownership of the subject stations. See Capital Cities/ABC, Inc., 4 FCC Rcd  X -5498 (1989).H Van Amburg further contends that" |  0*((" radio ownership rules permitting common ownership of samemarket radio stations conferred an "unfair advantage" on Cap Cities in structuring its offer to purchase KMPC(AM) by enabling Cap Cities to base it valuation of the radio station on projected joint operating efficiencies unavailable to prospective buyers such as Van Amburg who own no other media outlets in the market.  Xv-x10. Discussion. In evaluating a request for waiver of the onetoamarket rule, the Commission's goal "is to permit the public to benefit from such efficiencies of operation as may be achieved through the use of common facilities and staff, consistent with the  X1-maintenance of diversity and vigorous competition within the market areas involved." See  X -Second Report and Order Recon., 4 FCC Rcd at 6491. We conclude that Cap Cities' showing in support of a waiver of the onetoamarket rules meets the Commission's caseby case criteria, and that a waiver in this instance is consistent with the public interest and would not  X -have an adverse effect on diversity and competition in the Los Angeles market.? |  X-ԍ Our conclusion takes into account the public interest in a strengthened radio service  X-made possible by waiver of the onetoamarket rule in this case. See In re Revision of Radio  X-Rules and Policies, 7 FCC Rcd at 6394, n. 40.? Cap Cities has shown that common ownership of KMPC(AM), KABC(AM), KLOS(FM), and KABCTV will create efficiencies resulting in significant cost savings and the potential for enhanced  X-programming and service benefits.R  X@ -ԍ Notwithstanding its contention that the proposed combination would result in projected savings of $5.8 million annually, Cap Cities only identifies specific savings of $2.24 million.  X"-See note 10, supra. We nonetheless find the projected savings to be significant.R In particular, joint operation of KMPC(AM) and KABC(AM) will enable KMPC(AM) to avail itself of KABC(AM)'s public affairs  Xb-programming and community relations department, resources that  could  enhance KMPC(AM)'s ability to air public service and public affairs programming, as well as its ability to assess the needs of listeners in the Los Angeles community. Additionally, the affiliation of KMPC(AM) with Cap Cities' ABC Radio Network and the radio network's  X-affiliation with ABC Television Network news operations could strengthen the news gathering"0*((" resources of KMPC(AM), enabling KMPC(AM) to better serve its community. Moreover, Cap Cities affirms that the proposed combination enhances prospects for profitable operation of KMPC(AM), which Cap Cities and Golden West note has incurred operating losses during each of the past three years under its present ownership. Cap Cities also demonstrates that  X-the proposed combination will not create any undue concentration of ownership or control of broadcast media in the Los Angeles market, which comprises the country's second largest ADI. Following the proposed acquisition of KMPC(AM), the market will be served by 67  X_-radio stations and 26 television stations.__  X-ԍ Although Cap Cities relies upon March 1989 data concerning the number of broadcast  X -outlets and independent "voices" in the Los Angeles market, we find that the market continues to be sufficiently diverse notwithstanding ownership and facilities changes during  X -the intervening five years. See Broadcasting & Cable Yearbook (1994); see also M Street  X| -Radio Directory (1995). Our conclusion, however, does not excuse applicants from their obligation to document waiver showings with information most recently available at the time of filing of their applications. Those 93 stations will be owned and operated by  XH-78 separate entities.H  X-ԍ Notwithstanding Cap Cities' assertion that following the proposed transaction the Los Angeles market would be served by 92 broadcast stations owned and operated by 73 separate entities, analysis by the Commission's staff indicates that following the transaction the relevant market will be served by 93 broadcast stations owned and operated by 78 separate entities. Other "voices" in the market include at least four major daily  X1-newspapers and cable television, which has a penetration rate of 58.9 percent. While the technical facilities of the stations involved are significant, we note that the proposed combination does not present issues of market concentration inconsistent with the public interest given the highly competitive environment in the Los Angeles market, both in terms of the number of other broadcast stations and the relevant market shares of the stations involved  X -in this transaction. D  X-Ѝ As documented by Cap Cities, in the Winter 1994 Arbitron Local Market Report for the Los Angeles Survey Area, KMPC(AM) was tied for a ranking of thirtyfifth with a 0.5 share, KABC(AM) ranked fifth with a 3.8 share, and KLOS(FM) ranked sixteenth with a 2.7  Xn-share. See KVI, Inc., 9 FCC Rcd 1330, n. 8 (1994). Thus, we are persuaded that the public benefits of common ownership and joint operation of KMPC(AM), KABC(AM), KLOS(FM), and KABCTV outweigh any negative effect on diversity and competition in the Los Angeles market that the combination might engender. As Cap Cities observes, the Commission has granted waivers of the oneto Xb-amarket rule under similar circumstances. See note 12, supra. x11. We find no merit to Van Amburg's contention that the Commission's "failure" to enforce prior divestiture conditions with respect to Cap Cities' ownership of radio stations in the Los Angeles market should preclude the proposed acquisition. As previously indicated, the Commission authorized Cap Cities to retain common ownership of KABCTV,  X-KABC(AM), and KLOS(FM) following a 1985 merger between Capital Cities"0*((r" Communications, Inc. and American Broadcasting Companies, Inc., on the basis of Cap Cities' prior showing that the proposed combination qualified for waiver of the onetoamarket rule under the "top 25 market/30 voices" waiver standard adopted by the Commission  X-in 1989. See note 13, supra. Van Amburg's contention that operating efficiencies available to multiple station owners such as Cap Cities enable such owners to value radio stations within their respective markets higher than prospective owners who do not currently own a station in  Xv-the relevant market may be true, but we do not see this as a reason to deny this waiver request. Rather, as explained above, in this context, where there will be 77 other "voices" in  XH-the market following the proposed sale of KMPC(AM), we fi nd the efficiencies created by this combination will result in tangible public service benefits. Indeed, in both the onetoamarket rulemaking proceeding and the radio ownership rulemaking proceeding, the Commission expressly determined that combinational efficiencies derived from common ownership of radio and television stations in local broadcast markets and from common ownership of same service radio stations in local markets were presumptively beneficial and would strengthen the competitive standing of combined stations, a circumstance that would enhance the quality of viewpoint diversity by enabling such stations to invest additional resources in programming and other service benefits provided to the public. As noted, Cap Cities has demonstrated that its proposed ownership of radio stations in the Los Angeles market complies with the Commission's radio ownership rules in all relevant respects, and  XK-Van Amburg has submitted no evidence to the contrary._K  X-ԍ With respect to Van Amburg's contention that he should be provided the opportunity to purchase KMPC(AM), we note that Section 310(d) of the Communications Act of 1934, as amended, provides, in relevant part, that in acting on any application for assignment of license the Commission may not consider whether the public interest, convenience, and necessity might be served by the assignment of the license to a person or entity other than the proposed  XQ-assignee. See 47 U.S.C. 310(d). Consequently, in the present case, we are precluded from considering the qualifications of anyone other than Cap Cities. x12. Accordingly, IT IS ORDERED, That the informal objection to grant of the abovecaptioned application filed by Thomas K. Van Amburg IS DENIED. Further, the request for a waiver of the Commission's onetoamarket rule, 47 C.F.R. 73.3555(b), IS HEREBY GRANTED, and, having found the parties thereto otherwise qualified, the application MMN(BAL "0*(("Ԍ MMN (BAL MMN 940503EA) for assignment of license of KMPC(AM), Los Angeles, California, from  X-Golden West Broadcasters to KABCAM Radio, Inc. IS HEREBY GRANTED.6  Xb-ԍ In response to Question 14 of Assignee's section of the abovecaptioned application for  XK-assignment of license, Capital Cities/ABC, Inc. has reported a decision in Shepard v.  X4-American Broadcasting Companies, Inc., No. 88954, (Memorandum Opinion and Order,  X-D.D.C. April 15, 1992), motion for reconsideration granted in part and denied in part,  X-(Memorandum Opinion and Order, September 3, 1993), judgment further modified,  X-(Memorandum Opinion in Support of Final Judgment, June 13, 1994), notice of appeal  X-docketed, July 7, 1994, constituting an adverse finding or adverse final action "taken by any court . . . with respect to the applicant or parties to this application in a civil . . . proceeding, brought under the provision of any law related to . . . fraudulent statements to another  X -governmental unit . . . ." The Shepard decision, which includes findings of litigationrelated misconduct against Cap Cities' subsidiary American Broadcasting Companies, Inc., is presently under appeal. Our action here granting the abovecaptioned application is without prejudice to whatever action, if any, the Commission may deem appropriate in connection  X7-with the Shepard findings, which are presently under review in connection with pending  X -applications for renewal of license filed by Cap Cities and its subsidiaries.6 x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x x` `  hh@William F. Caton x` `  hh@Acting Secretary