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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 ) ) BUCK OWENS PRODUCTION ) COMPANY, INC. ) (Assignor) ) ) and ) File No. BALCT-970624IA ) UNIVISION TELEVISION ) GROUP, INC. ) (Assignee) ) ) For Consent to the Assignment of the) License for Television Station ) KUZZ-TV, Bakersfield, California) MEMORANDUM OPINION AND ORDER Adopted: September 4, 1997 Released: September 5, 1997 By the Chief, Mass Media Bureau: 1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority, has before it for consideration the above-captioned unopposed application to assign the license for television station KUZZ-TV, Channel 45 (UPN), Bakersfield, California ("KUZZ"), from Buck Owens Production Company, Inc. to Univision Television Group, Inc. ("Univision"). Subsidiaries of Univision are the licensees of stations KMEX-TV, Channel 34 (UNI), Los Angeles, California ("KMEX"), and KFTV(TV), Channel 21 (UNI), Hanford, California ("KFTV"). Because the Grade B contour of KUZZ overlaps the Grade B contours of KMEX and KFTV, Univision requests waivers of the Commission's television duopoly rule, Section 73.3555(b), to allow common ownership of KUZZ, KMEX and KFTV, conditioned upon the outcome of the pending broadcast television ownership rulemaking concerning the duopoly and other multiple ownership rules. See Review of the Commission's Regulations Governing Television Broadcasting, Second Further Notice of Proposed Rule Making, FCC 96-438 (released Nov. 7, 1996) ("Television Ownership Second Further Notice"). 2. Duopoly Waiver Requests. In support of its waiver requests, Univision has submitted an engineering exhibit which shows that there is no Grade A contour overlap between KUZZ and KMEX, or between KUZZ and KFTV. According to Univision, the population within the Grade B overlap area of KUZZ and KMEX consists of 1,937 individuals, representing 0.3% and 0.01% of the population within the KUZZ and KMEX Grade B contours, respectively. The overlap of the Grade B contours of KUZZ and KMEX covers an area of 1,294 square kilometers, comprising 6.3% and 5.6% of the land area within the KUZZ and KMEX Grade B contours, respectively. Similarly, Univision states that the population within the overlap area of KUZZ and KFTV consists of 27,961 individuals, representing 4.9% and 2.3% of the population within the KUZZ and KFTV Grade B contours, respectively. The overlap of the Grade B contours of KUZZ and KFTV covers an area of 720 square kilometers, comprising 3.5% and 2.7% of the land area within the KUZZ and KFTV Grade B contours, respectively. Univision contends that the land area and population overlaps herein are within the range that the Commission has permitted in previously approved waivers. See, e.g., San Diego Television, Inc., 11 FCC Rcd 14689 (1996) (granting waiver where Grade B population overlap was 3.1% and 13.4%, and area overlap was 7.5% and 19.2%); Act III Communications Holdings, L.P., 11 FCC Rcd 5735 (1996) (granting waiver where Grade B population overlap was 4.5% and 3.5%, and area overlap was 10.9% and 11.5%). 3. Univision asserts that the three stations serve distinct markets. KUZZ is located in the Bakersfield, California Designated Market Area ("DMA"), ranked 108th, whereas KMEX is located in the Los Angeles DMA, ranked 2nd, and KFTV is located in the Fresno-Visalia DMA, ranked 56th. Univision notes that duopoly waivers have previously been granted in cases where market size disparities of this nature existed. See, e.g., Gannett Co., Inc., DA 97-1635 (released Aug. 4, 1997) at  4 (waiver granted where proposed duopoly involved the 10th and 124th largest markets); WNAL- TV, Inc., DA 97-867 (released April 25, 1997) at  5 (waiver granted where proposed duopoly involved the 10th and 51st largest markets). Univision also notes that KMEX and KFTV are affiliates of Univision Network and broadcast exclusively in Spanish, while KUZZ is an affiliate of United Paramount Network and broadcasts exclusively in English. 4. Additionally, Univision maintains that the KUZZ/KMEX and KUZZ/KFTV overlap areas will remain well-served by numerous broadcast voices. Univision's engineering exhibit states that 11 commercial full-power television stations, two noncommercial educational television stations and one low power television/TV translator station provide Grade B or better service to various parts of the KUZZ/KMEX overlap area. According to Univision, the KUZZ/KMEX overlap area is also served by 21 FM stations and five AM stations. The engineering report further states that six commercial full-power television stations and five low-power/TV translator stations provide Grade B or better service to various parts of the KUZZ/KFTV overlap area. Additionally, Univision states that the KUZZ/KFTV overlap area is served by 14 FM stations and eight AM stations. Univision contends that the number of broadcast voices in the overlap areas compares favorably to other cases in which the Commission has granted waivers of the duopoly rule. See, e.g., WNAL-TV, Inc., DA 97-867 (released April 25, 1997) at  7 (waiver granted where overlap area was served by 13 AM, 12 FM and three television stations). 5. Univision asserts that the proposed common ownership fully complies with the Commission's two-pronged interim duopoly policy because, as stated above, the stations are in separate DMAs and their Grade A contours do not overlap. Thus, argues Univision, conditional waivers are warranted in this case. 6. Discussion. In adopting the duopoly rule's fixed standard of prohibiting overlap of Grade B service contours, the Commission also acknowledged the need for "flexibility" in that rule's application, noting that waivers should be granted where rigid conformance to the rule would be "inappropriate." Multiple Ownership of Standard, FM and Television Broadcast Stations, 45 FCC 2d 1476, 1479 n.12, recon. granted in part, 3 RR 2d 1554 (1964). To that end, the Commission has developed a set of factors to be considered when evaluating an applicant's request for waiver of the duopoly rule, including the extent of the overlap, the number of media voices available in the overlap area, the distinctness of the respective markets, the independence of the stations' operations, and the concentration of economic power resulting from the combination. See Iowa State University Broadcasting Corporation, 9 FCC Rcd 481, 487-88 (1993), aff'd sub nom. Iowans for WOI-TV, Inc. v. FCC, 50 F.3d 1096 (D.C. Cir. 1995); H&C Communications, Inc., 9 FCC Rcd 144, 146 (1993). After weighing the factors, the Commission considers any public interest benefits proposed by the applicant to determine whether, in light of the overlap, the benefits outweigh any detriment which may occur from grant of the waiver. See, e.g., Iowa State University, 9 FCC Rcd at 487-88. As with any waiver, it will only be granted if the Commission concludes that the waiver is in the public interest. 7. Currently, the Commission is reexamining its broadcast television ownership policies, including the duopoly rule. In January 1995, the Commission proposed a new analytical framework within which to evaluate its broadcast television ownership rules. See Review of the Commission's Regulations Governing Television Broadcasting, Further Notice of Proposed Rule Making, 10 FCC Rcd 3524 (1995) ("Television Ownership Further Notice"). Subsequent to the release of the Television Ownership Further Notice, Congress directed the Commission to conduct a rulemaking proceeding to determine whether to retain, modify or eliminate existing limitations on the number of television stations that an entity may control within the same television market. See Section 202(c) of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (Feb. 8, 1996) ("Telecomm Act"). In response to this Congressional directive in the Telecomm Act and to update the record, the Commission released the Television Ownership Second Further Notice. In that Second Further Notice, the Commission tentatively concluded to authorize common ownership of television stations that are in separate DMAs and whose Grade A contours do not overlap. Television Ownership Second Further Notice at  57. 8. The Commission stated in the Television Ownership Second Further Notice that it will be inclined, during the pendency of the television ownership proceeding, to grant temporary duopoly waivers involving stations in different DMAs with no overlapping Grade A contours, conditioned on coming into compliance with the outcome of the proceeding within six months of its conclusion. It also noted there its tentative conclusion that the record in that proceeding "supports relaxation of the geographic scope of the duopoly rule from its current Grade B overlap standard to a standard based on DMAs supplemented with a Grade A overlap criterion." Id. at  57. The Commission further stated that "we do not believe granting waivers satisfying the proposed standard, and conditioning them on the outcome of this proceeding, will adversely affect our competition and diversity goals in the interim." Id. Additionally, the Commission gave the staff delegated authority to act on applications seeking waivers consistent with this interim policy. 9. Based on the Commission's interim ownership policy outlined in the Television Ownership Second Further Notice, we believe that a grant of conditional waiver of the duopoly rule, subject to the outcome of the pending ownership proceeding, is justified. The temporary common ownership of KUZZ, KMEX and KFTV would be consistent with the interim policy set forth in the Television Ownership Second Further Notice, as the stations are in separate DMAs and there is no Grade A overlap between KUZZ and KMEX, or between KUZZ and KFTV. Moreover, our examination of the record presented here reveals nothing suggesting that we should not follow the established interim policy in this case. Accordingly, we conclude that grant of temporary waivers, conditioned on the resolution of the pending broadcast television ownership rulemaking, will serve the public interest, convenience and necessity. Any requests to extend these conditional waivers should be filed at least 45 days prior to the end of the six-month period and would be closely scrutinized. Additionally, having found Univision to be qualified in all respects, we conclude that grant of the application for assignment of license would also serve the public interest. 10. Accordingly, IT IS ORDERED, That the requests for conditional waiver of the television duopoly rule, Section 73.3555(b) of the Commission's rules, to permit the common ownership by Univision Television Group, Inc. of television stations KUZZ-TV, Bakersfield, California, KMEX- TV, Los Angeles, California, and KFTV(TV), Hanford, California, ARE GRANTED, subject to the outcome of the Commission's pending broadcast ownership rulemaking in MM Docket Nos. 91-221 and 87-8. Should divestiture be required as a result of that proceeding, the licensee is directed to file, within six months from the release of the final order in MM Docket Nos. 91-221 and 87-8, an application for Commission consent to dispose of such station(s) as would be necessary for Univision Television Group, Inc. to come into compliance with the rules as provided in the final order. 11. IT IS FURTHER ORDERED, That the application for assignment of license of KUZZ-TV, Bakersfield, California, from Buck Owens Production Company, Inc. to Univision Television Group, Inc. (BALCT-970624IA) IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau