******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Application of ) ) THE GLYN WYLER AND ) KARL O. WYLER, SR. FOUNDATION ) (Transferor) ) ) and )File Nos.BTC-970319IX )BTCH-970319IY COMCORP OF EL PASO, INC. ))BTCCT-970319IZ (Transferee) ) ) For Consent to the Transfer of Control of ) Tri-State Broadcasting Co., Inc., Licensee of ) KTSM-TV, KTSM-FM and KTSM(AM), ) El Paso, Texas ) MEMORANDUM OPINION AND ORDER Adopted: July 23, 1997Released: July 24, 1997 By the Chief, Mass Media Bureau: 1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority, has before it the above-captioned applications seeking consent to the transfer of control of Tri-State Broadcasting Co., Inc. ("Tri-State"), the licensee of television station KTSM-TV (NBC, Channel 9) and radio stations KTSM-FM and KTSM(AM), all in El Paso, Texas, from The Glyn Wyler and Karl O. Wyler, Sr. Foundation to ComCorp of El Paso, Inc. ("ComCorp El Paso"). Also pending before the Commission are two groups of pro forma applications (Form 316s), one for the assignment of stations KTSM-TV, KTSM-FM and KTSM(AM) from Tri-State, as controlled by ComCorp El Paso, to ComCorp El Paso (File Nos. BALCT-970321IC, BALH-970321IB and BAL- 970321IA), and the other for the assignment of those stations from ComCorp El Paso to its wholly- owned subsidiary, ComCorp El Paso License Corp. (File Nos. BALCT-970321IF, BALH-970321IE and BAL-970321ID). 2. Stations KTSM-TV, KTSM-FM and KTSM(AM) have been jointly owned and operated for 35 years. So that it may continue the common ownership and operation of the television and radio stations, ComCorp El Paso requests a permanent waiver of 47 C.F.R.  73.3555(c), the Commission's one-to-a-market rule, which generally proscribes the common ownership of television and radio stations in the same market. Though no new one-to-a-market combination will be created here, the contemplated transfer of control of KTSM-TV, KTSM-FM and KTSM(AM) to ComCorp El Paso requires a renewed one-to-a-market showing based on current market conditions. For the reasons discussed below, we will grant the transfer of control and the pro forma assignment applications, all of which are unopposed. REQUEST FOR WAIVER OF THE ONE-TO-A-MARKET RULE 3. ComCorp El Paso bases its waiver request on the one-to-a-market standards adopted in the Second Report and Order in MM Docket No. 87-7, 4 FCC Rcd 1741 (1988) (Second Report and Order), recon. denied in part and granted in part, 4 FCC Rcd 6489 (1989) (Second Report and Order Recon.). In accordance with these standards, the Commission presumptively favors requests involving: (1) stations serving the top 25 markets where at least 30 separately owned, operated and controlled stations will remain following the proposed combination; or (2) "failed" stations, i.e., stations which have not been operating for a substantial period of time or are involved in bankruptcy proceedings. Otherwise, waiver requests must be evaluated under the more rigorous case-by-case standard. 47 C.F.R.  73.3555(c), n.7. ComCorp El Paso submits its waiver request pursuant to the case-by-case standard because El Paso is the 99th largest Designated Market Area (DMA) in the country and because KTSM-TV, KTSM-FM and KTSM(AM) are not failed stations. 4. Under the case-by-case standard, the Commission makes a public interest determination by weighing five factors: (1) the potential public benefits of joint operation of the facilities, such as economies of scale, cost savings, and programming and service benefits; (2) the types of facilities involved; (3) the number 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 the light of the level of competition and diversity after the joint operation is implemented. See Second Report and Order, 4 FCC Rcd at 1753. 5. Benefits of Joint Operation. ComCorp El Paso asserts that KTSM-TV, KTSM-FM and KTSM(AM) have been jointly owned and operated for 35 years, resulting in operating efficiencies which have permitted enhanced programming for local residents. In particular, ComCorp El Paso claims that the common ownership of KTSM-TV and KTSM(AM) has enabled KTSM(AM) to broadcast an all-news/talk format, the only one of its kind in the El Paso market other than that of a sports talk station. This format, ComCorp El Paso maintains, depends on KTSM-TV's news department, which supplies news and news personnel to KTSM(AM) and provides the AM station with access to news gathering, production and editing equipment. KTSM-TV's news anchors and/or news reporters, moreover, air daily news broadcasts on KTSM(AM), including five local news reports each morning, four news updates each afternoon, a five-minute news, weather and sports update, and an evening news simulcast each evening. ComCorp El Paso also states that KTSM-TV broadcasts weather and news updates on KTSM-FM, and routinely simulcasts local breaking news stories, in lieu of regular programming, on both radio stations for the benefit of motorists in their cars. 6. According to ComCorp El Paso, separation of the television station from the radio stations would generate substantial cost increases, which in turn would "seriously undermine the ability to continue the all-news/talk format on the AM facility." These asserted cost increases, resulting from the discontinuation of the stations' common ownership and operation, would total at least $170,000 per year from the separate expenses of leasing or purchasing tower space ($20,000), operational costs such as personnel, power/electricity and phone systems ($50,000 -$100,000) and increasing the radio staff by at least five people ($100,000 - $150,000). ComCorp El Paso estimates additional costs of at least $250,000 for the acquisition or leasing of new studios, plus remodeling ($200,000), the reconfiguration of studio/transmitter links ($25,000) and the purchase of news gathering, production and editing equipment ($25,000 - $50,000). ComCorp El Paso contends that, without connection to a local television news department, KTSM(AM) could neither afford to gather, produce, edit and broadcast its own local El Paso news and weather, nor economically justify the acquisition of sophisticated news gathering, production and editing equipment typically found in television news departments. In addition, ComCorp El Paso claims that, without common ownership, KTSM(AM) and KTSM(FM) would be unable to broadcast continuous live newscasts to their listeners during emergencies and other events as they do by simulcasting such newscasts produced by, and aired on, KTSM-TV. The continued combination of the three stations "will permit improved coverage of news and other stories of interest to the FM audience." ComCorp El Paso also states that it will use the combination to improve the news and public affairs programming on KTSM-FM. 7. Other Media Outlets/Types of Facilities. ComCorp El Paso asserts that it presently owns no media outlets in the El Paso market. In describing the types of facilities involved, ComCorp El Paso states that KTSM-TV operates on Channel 9 at an Effective Radiated Power (ERP) of 316 kW, and an antenna height above average terrain (HAAT) of 582 meters. According to ComCorp El Paso, for viewership KTSM-TV competes with 12 other television stations in the El Paso DMA, five of which have comparable facilities to that of KTSM-TV. KTSM-FM is a Class C FM station operating on Channel 260 (99.9 MHz), with an ERP of 100 kW and an HAAT of 555 meters. KTSM(AM) is a Class B station which operates on 1380 kHz, 5 kilowatts power, unlimited hours. ComCorp El Paso claims that KTSM-FM competes for listeners with 27 other FM radio stations and that KTSM(AM) competes with 24 other AM stations in the market. In addition, ComCorp El Paso contends that of the 27 rival FM stations, 14 have facilities comparable to that of KTSM-FM, while of the 24 rival AM stations, five have superior and five have comparable facilities to that of KTSM(AM). ComCorp El Paso thereby concludes that, from a facilities perspective, KTSM-TV, KTSM-FM and KTSM(AM) are not a dominant combination. 8. Financial Difficulties. Regarding financial difficulties of the stations, ComCorp El Paso claims that, following the death in 1990 of Karl Wyler, the majority stockholder of Tri-State, the finances of the stations suffered. However, ComCorp El Paso neither specifies the previous financial difficulties experienced by the stations, nor asserts any present financial difficulties. 9. Effect on Diversity and Competition. The final factor ComCorp El Paso addresses concerns the nature of the relevant market vis-a-vis the Commission's concerns about diversity and competition. As an initial matter, ComCorp El Paso contends that the proposed transfer of control will have no effect on diversity or competition in the El Paso market since KTSM-TV, KTSM-FM and KTSM(AM) have been commonly owned and operated for 35 years. ComCorp El Paso further argues that the El Paso market "currently contains, and will continue to contain, a remarkably diverse array of media outlets." In support, ComCorp El Paso asserts that, including KTSM-TV, KTSM-FM and KTSM(AM), a total of 25 AM radio stations (11 domestic and 14 Mexican stations), 28 FM stations (20 domestic and eight Mexican stations) and 13 television stations (10 domestic and three Mexican stations) are licensed to the El Paso market. Of the 41 domestic stations in the market, ComCorp of El Paso maintains that there are, and will remain after consummation of the proposed transfer of control, 26 independent voices. According to ComCorp of El Paso, LPTV/television translator and FM translator stations licensed to the El Paso market also contribute to diversity and competition in the market, as do the services provided by Direct-to-Home satellite dish and DBS operators and a wireless cable system. ComCorp of El Paso further represents that the El Paso market has a 61% cable penetration and is served by three daily newspapers, the El Paso Times, the Herald-Post and the Las Cruces Sun News, and at least four weekly newspapers published in the market. Moreover, ComCorp cites to three daily newspapers published in Mexico which also serve the El Paso market. 10. Discussion. The Commission's goal in evaluating a case-by-case request for waiver of the one-to-a-market rule 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 maintenance of diversity and vigorous competition within the market areas involved." Second Report and Order Recon., 4 FCC Rcd at 6491. We conclude that, on balance, ComCorp El Paso's showing in support of its request for waiver of the one-to-a-market rule meets our case-by-case criteria, that a waiver in this instance is in the public interest, and that the waiver would not adversely affect competition and diversity in the El Paso market. 11. As to the first criterion, the potential public service benefits of joint ownership, the Commission considers the public service benefits that will result from the proposed radio-television combination, such as projected economies of scale, cost savings, and programming and service benefits. Second Report and Order, 4 FCC Rcd at 1753. ComCorp El Paso has shown that the substantial cost efficiencies derived from the joint operation of KTSM-TV, KTSM-FM and KTSM(AM) will continue under ComCorp El Paso's common ownership of the stations. In particular, ComCorp El Paso anticipates annual cost savings amounting to at least $170,000 from the continued consolidation of leasing tower space and operational costs such as personnel, power/electricity and phone systems, and further savings of at least $250,000 from the one-time costs of acquiring new studios, reconfiguring studio/transmitter links and purchasing news gathering, production and editing equipment. According to ComCorp El Paso, continued joint ownership will ensure the continuation of the distinctive all-news/talk format on KTSM-AM, which depends on the news gathering staff and equipment of KTSM-TV, "the number one television news station in the market." KTSM-FM likewise relies on KTSM-TV for its radio broadcast of weather and news updates and routine simulcasts of local breaking news stories. Additionally, ComCorp El Paso pledges to use the combination to improve the news and public affairs programming on KTSM-FM. 12. With respect to the types of facilities involved, the Commission endeavors to predict and avoid any significant adverse effect on diversity or competition from too powerful a combination. Second Report and Order Recon., 4 FCC Rcd at 6349. We note, first, that the facilities of KTSM- TV and KTSM-FM are the maximum and near maximum permitted for a full-service VHF station and Class C FM station, respectively. While KTSM(AM)'s facilities are less than the maximum permitted for a Class B station, they are not insubstantial. Nevertheless, we find that given the significant competition in the El Paso market, continuation of this TV/FM/AM combination does not present issues of market dominance inconsistent with the public interest. Our analysis indicates that KTSM-TV, a VHF station and NBC affiliate, competes with three VHF stations (two commercial and one non-commercial), and six UHF stations (four commercial and two non- commercial) in its DMA. Our analysis also reveals that two of the commercial VHF stations are affiliated with ABC and CBS, and that two of the commercial UHF stations are affiliated with Fox and the Warner Brothers Network. In addition, ComCorp El Paso has shown that KTSM-FM and KTSM(AM) compete against comparable and/or superior facilities in the El Paso television metropolitan market. KTSM-FM, a Class C station, experiences substantial competition from 12 other FM stations, nine of which are Class C and eight of which are commercial stations. KTSM(AM), a Class B station, competes with eight other AM stations, six of which are also Class B stations. 13. As for financial difficulties, in its review the Commission "will consider information related to whether a station has long been offered for sale, to no avail." Second Report and Order, 4 FCC Rcd at 1753. The Commission has advised applicants relying on this factor to submit "appropriate documentation, including a history of the station's past financial losses and predictions of projected losses for the next several years." Id. at 1760 n.103. Notwithstanding its undocumented reference to the stations' past financial suffering, ComCorp El Paso has not shown that KTSM-TV, KTSM-FM and KTSM(AM) presently experience financial difficulties. However, the Commission has acknowledged that not all of the case-by-case factors are relevant in every case. See Second Report and Order Recon., 4 FCC Rcd at 6491. 14. Finally, ComCorp El Paso has demonstrated that its proposed joint ownership and operation of KTSM-TV, KTSM-FM and KTSM(AM) will not diminish competition or diversity in El Paso, the 99th television market. ComCorp El Paso presently owns no other broadcast stations in the El Paso market and its acquisition of KTSM-TV, KTSM-FM and KTSM(AM) will continue in effect a common ownership pattern that has operated in the El Paso market for 35 years. Moreover, there are substantial numbers of competing broadcast and other media voices in this market. According to our analysis, upon grant of the proposed transfer of control and exclusive of the stations considered therein, El Paso will continue to be served by eight AM stations, 12 FM stations, three VHF television stations and six UHF television stations. Of these 29 broadcast stations, we find that the El Paso market is served by 20 separately-owned and operated broadcast "voices." Several cable systems having a collective 61% penetration rate and three domestically published daily newspapers, along with other services, also contribute to the media diversity in the El Paso market. For the foregoing reasons, we are persuaded that the public interest benefit of ComCorp El Paso's common ownership and operation of KTSM-TV, KTSM-FM and KTSM(AM) warrants a waiver of the one-to-a-market rule. CONCLUSION 15. Having determined that the applicants are qualified in all respects, we find that grant of the transfer of control and pro forma assignment applications will serve the public interest, convenience and necessity. 16. Accordingly, IT IS ORDERED, That the request for a permanent waiver of the Commission's one-to-a-market rule, 47 C.F.R.  73.3555(c), to allow ComCorp El Paso's common ownership and operation of stations KTSM-TV, KTSM-FM and KTSM(AM) IS GRANTED. 17. IT IS FURTHER ORDERED, That the above-captioned applications for the transfer of control of Tri-State Broadcasting Co., Inc., licensee of television station KTSM-TV and radio stations KTSM-FM and KTSM(AM) from The Glyn Wyler and Karl O. Wyler, Sr. Foundation to ComCorp of El Paso, Inc. (File Nos. BTC-970319IX, BTCH-970319IY and BTCCT-970319IZ) ARE GRANTED, subject to the condition that the parties may not consummate the transfer of control transaction until such time as the Commission has granted the pending license renewal applications for stations KTSM-FM and KTSM(AM), El Paso, Texas. 18. IT IS FURTHER ORDERED, That the applications for the pro forma assignments of licenses of stations KTSM-TV, KTSM-FM and KTSM(AM) from Tri-State Broadcasting Co., Inc. to ComCorp El Paso, Inc. (File Nos. BALCT-970321IC, BALH-970321IB and BAL-970321IA) ARE GRANTED. 19. IT IS FURTHER ORDERED, That the applications for the pro forma assignments of licenses of stations KTSM-TV, KTSM-FM and KTSM(AM) from ComCorp El Paso, Inc. to ComCorp El Paso Licensee, Inc. (File Nos. BALCT-970321IF, BALH-970321IE and BAL- 970321ID) ARE GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau