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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554
     
    In Re Applications of)
     )
    KS FAMILY TELEVISION, INC.)
      (Assignor))
     )
    and)File No. BALCT-970422IA
     )
     GOCOM LICENSE L.L.C.)
      (Assignee))
     )
 For Consent to Assign the License for Station)
  WYDO(TV), Greenville, North Carolina)

                  MEMORANDUM OPINION AND ORDER

    Adopted: July 31, 1997 Released:  August 4, 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 unopposed application to assign the license of station WYDO(TV), Fox,
Channel 14, Greenville, North Carolina, from KS Family Television, Inc. ("KS Family") to GOCOM
License L.L.C. ("GOCOM").  GOCOM is the licensee of station WFXI(TV), Fox, Channel 8,
Morehead City, North Carolina, and the permittee for unbuilt station WFXZ-TV, Channel 35,
Jacksonville, North Carolina, which is authorized to operate as a satellite of WFXI(TV).  The
predicted Grade B contour of WYDO(TV) will overlap with the predicted Grade B contours of
commonly owned WFXI(TV) and WFXZ-TV in contravention of Section 73.3555 of the
Commission's rules, 47 C.F.R.  73.3555.  Thus, GOCOM proposes to operate WYDO(TV) as a
satellite of WFXI(TV), in accordance with the satellite exception to the duopoly prohibition set forth
in Note 5 to Section 73.3555.

     2.  Under our satellite policy, set forth in Television Satellite Stations Review of Policy and
Rules, Report and Order, 6 FCC Rcd 4212 (1991) (hereinafter Television Satellite Order), an
applicant for television satellite status is entitled to a presumption that the proposed satellite
operation is in the public interest if the applicant meets three criteria: (1) there is no City Grade
overlap between the parent and the satellite; (2) the proposed satellite would provide service to an
underserved area; and (3) no alternative operator is ready and able to construct or to purchase and
operate the satellite as a full-service station.  The Commission will view favorably applications that
qualify for the presumption and are unrebutted by an opposing party.  Id. at 4214.  If an applicant
is unable to qualify for the presumption, we will evaluate the proposal on an ad hoc basis and grant
the application if there are other compelling circumstances that warrant approval.  Id.

     3.  WYDO(TV) has operated under a programming agreement with WFXI(TV) since
November 1992.  Under the programming agreement, WYDO(TV) carries programming originating
on WFXI(TV), including Fox Television Network programming.  Applicants assert that the satellite
proposal is, in essence, a request "to continue the status quo with respect to much of the
programming" aired by WYDO(TV).  Applicants attempt to justify their request that WYDO(TV)
be permitted to operate as a satellite of WFXI(TV) by contending that their request meets all three
criteria for a presumptive satellite waiver.  Although we conclude that their request does not meet
all three criteria for a presumptive satellite waiver, for the reasons set forth below, we find that the
proposed operation of WYDO(TV) as a satellite is consistent with our policy.

     4.  With respect to the first criterion for the presumption, applicants have submitted an
engineering study which demonstrates that the City Grade contours of WYDO(TV) and WFXI(TV)
do not overlap.  Thus, the satellite proposal meets the first component of the presumption.

     5.  Regarding the second criterion, an applicant can use either of two different tests to
demonstrate that an area is underserved.  Here, applicants attempt to satisfy this criterion solely by
use of the "transmission test," under which a proposed satellite's community of license is considered
underserved "if there are two or fewer full-service stations already licensed to it."  Television
Satellite Order, 6 FCC Rcd at 4215.  Stations considered licensed to a community for purposes of
this test include all educational, regular TV and TV satellite stations.  Id.  There are two full-service
television stations besides WYDO(TV) licensed to Greenville, WNCT-TV and WUNK-TV, but
applicants assert that the station for which satellite status is sought does not count for purposes of
the transmission test.  We disagree.  While the Television Satellite Order clearly excludes the
proposed satellite station from consideration pursuant to the other test of underservice to an area, the
"reception test," there is no such language with respect to the transmission test.  See id.  In addition,
we consistently have included in our transmission test analysis a licensed station for which satellite
status is sought.  See, e.g., Kelso Partners IV, L.P., 11 FCC Rcd 8764 (1996); Stauffer
Communications, Inc., 10 FCC Rcd 5165 (1995).  To the extent that the applicant implies that
WYDO(TV), because of its existing programming agreement with WFXI(TV), should be regarded
as a "new" station that is not includable under the transmission test analysis, we also reject such an
argument.  See Plains Television Partnership, 9 FCC Rcd 4435 (1994).  Thus, with three full-service
television stations licensed to Greenville, applicants' satellite proposal fails to meet the transmission
test.

     6.  With respect to the third presumptive criterion, KS Family has not attempted to
demonstrate any efforts to sell WYDO(TV) to anyone other than GOCOM.  Applicants explain,
however, that WYDO(TV) was not listed with a broker or offered for general sale recently due to
the existing option purchase agreement that GOCOM had acquired from the former licensee of
WFXI(TV).  Because applicants have not satisfied all of the components of the presumptive satellite
standard, we will evaluate their proposal on an ad hoc basis.

     7.  Applicants assert that WYDO(TV) is not economically viable as a stand-alone station and
therefore no alternative buyer could exist who would be willing to operate it as such.  At the core
of this assertion is WYDO(TV)'s inability to cover the entire market with its signal.  Applicants note
that WYDO(TV)'s market, the Greenville-New Bern-Washington Designated Market Area
("DMA"), encompasses an area extending 154 miles from east to west and 121 miles from north
to south, and that the population is spread out, as there is no large, core city in the market. 
WYDO(TV)'s predicted Grade B contour serves all or portions of only ten of the seventeen counties
in the DMA.  In contrast, applicants state, the ABC, CBS and NBC affiliates in the market, which
operate on VHF channels, all cover nearly the entire DMA.  Applicants recite figures demonstrating
that the Grade B area of WYDO(TV) is at most one-quarter the size of the Grade B area served by
its VHF competitors, and the population served is at most 38% of the population served by the VHF
stations.  Consequently, applicants claim that WYDO(TV) would be at a substantial competitive
disadvantage if it were forced to operate as a stand-alone station.  Indeed, applicants also submit
Nielsen statistics showing that the highest audience share achieved by WYDO(TV) from July, 1993
through July, 1996 was 3%.

     8.  In further support of their assertions that WYDO(TV) is not economically viable as a
stand-alone station and that no alternative buyer exists who would be willing to operate it as such,
applicants submit an economic analysis of the viability of WYDO(TV) as a stand-alone, full-service
independent station serving the Greenville-New Bern-Washington market.  The analysis, performed
by Susan D. Harrison of Susan Harrison Associates, Inc., a consulting firm specializing in financial
and economic analyses for the broadcast industry, buttresses applicants' contentions regarding
WYDO(TV)'s competitive disadvantage in the market, and concludes that, even making optimistic
assumptions, "there is absolutely no reasonable likelihood that WYDO(TV) will be able to sustain
itself financially as a stand-alone, full-service station," and no prudent businessperson would be
willing to invest in the acquisition of WYDO(TV) for the purpose of operating it as one. 
Specifically, Ms. Harrison reasons that not only would WYDO(TV)'s severe competitive handicap
in the market manifest itself in hampered advertising sales efforts, but it would also be exacerbated
by the lesser quality programming but higher programming costs that WYDO(TV) would face as
the fifth commercial stand-alone station in the market.  Nonetheless, using optimistic assumptions
regarding factors such as WYDO(TV)'s likely audience share and operating costs as a stand-alone
station, Ms. Harrison projects that over a five year period, spanning 1997-2001, WYDO(TV) would
suffer a cumulative present value loss of $2,293,000.  Furthermore, she calculates that, optimistically
assuming that WYDO(TV) could be sold at the end of five years for a multiple of two-and-a-half
times its net revenues in the fifth year, the seller would still incur a net loss of $633,000.  Therefore,
Ms. Harrison concludes, "the idea that today's hypothetical purchaser would achieve his return on
investment through a sale of the station at a later date is unlikely to the point of dismissibility."

     9.  As further support for applicants' contentions, applicants submit a letter from Brian E.
Cobb, an experienced broadcast broker and founding partner of Media Venture Partners, a national
media brokerage firm, indicating that WYDO(TV) is not marketable as a stand-alone, full-service
facility.  Cobb opines that in a small market, such as the Greenville-New Bern-Washington DMA,
it is necessary for a station's signal to cover the entire market in order for the station to be successful. 
Cobb concludes that WYDO(TV)'s chance of economic survival as a stand-alone station "is slight,"
based on its insufficient signal coverage of the DMA, the ability of VHF competitors to cover the
DMA, and the "lack of any prospects of meaningful network affiliation."  He states that were he
asked to list the station, he would have "no interest in doing so" because it would be a difficult
station to market on a stand-alone basis, and he would not feel comfortable brokering it because it
"could damage the well being of the buyer."

     10.  We find that applicants have adequately demonstrated that WYDO(TV) likely will not
be able to survive as a stand-alone, full-service station in the Greenville-New Bern-Washington
DMA, and, therefore, it is highly unlikely that an alternative operator would be willing to purchase
it to operate it as such.  WYDO(TV) has been able to garner only a minuscule audience share while
rebroadcasting a full complement of Fox network programming, and the station's inability to cover
a significant portion of the market will likely hamper its efforts to improve those figures.  We
further note that WYDO(TV) is projected to lose nearly 2.3 million dollars over the next five years,
if operated as a stand-alone station.  As the Commission recently explained, its satellite station
policy, "resting in significant part on the satellite station's questionable financial viability as a stand-
alone operation, has furthered [its] ownership policies by adding additional voices to local television
markets where otherwise no additional voices might have emerged.  Review of the Commission's
Regulations Governing Television Broadcasting, Television Satellite Stations Review of Policy and
Rules, Second Further Notice of Proposed Rule Making, 11 FCC Rcd 21655, 21672 (1996).  See
also Sidney T. Warner, 3 FCC Rcd 4034, 4035 (1988).  Based on the information before us, we find
that the operation of WYDO(TV) as a satellite of WFXI(TV) is warranted and is consistent with our
current satellite policy.

     11.  In view of the foregoing, we conclude, having found that the applicants are qualified in
all other respects, that grant of the application would serve the public interest, convenience, and
necessity.

     12.  Accordingly, IT IS ORDERED, That the request for operation of station WYDO(TV),
Greenville, North Carolina, pursuant to the satellite exception to Section 73.3555(b) of the
Commission's Rules, IS GRANTED.

     13.  IT IS FURTHER ORDERED, That the application for consent to assign the license of
station WYDO(TV) from KS Family Television, Inc. to GOCOM License L.L.C. (File No. BALCT-
970422IA), IS GRANTED.

                                                            FEDERAL COMMUNICATIONS COMMISSION
                                                            
                                                            
                                                            
                                                            Roy J. Stewart
                                                            Chief, Mass Media Bureau