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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 Applicatio n of) ) WLAJ LICENSE, INC. ) (Assignor) ) ) and ) File No. BALCT-980227IQ ) FREEDOM BROADCASTING ) OF MICHIGAN, INC. ) (Assignee) ) ) For Consent to Assign the License of ) Station WLAJ(TV), Lansing, Michigan ) MEMORANDUM OPINION AND ORDER Adopted: June 22, 1998 Released: June 24, 1998 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 seeking consent to assign the license of station WLAJ(TV), Channel 53 (ABC), Lansing, Michigan, from WLAJ License, Inc. to Freedom Broadcasting of Michigan, Inc. ("Freedom"). 2. Freedom is the approved assignee of WWMT(TV), Channel 3 (CBS), Kalamazoo, Michigan, whose Grade B contour overlaps WLAJ(TV)'s Grade B contour. Common ownership of stations with such Grade B overlap violates the Commission's duopoly rule, 47 C.F.R.  73.3555(b). Accordingly, Freedom requests that the Commission grant a waiver of that rule, conditioned upon the outcome of the Commission's pending broadcast television ownership rulemaking proceeding. See Review of the Commission's Regulations Governing Television Broadcasting, Second Further Notice of Proposed Rulemaking, 11 FCC Rcd 21655 (1996) (Television Ownership Second Further Notice). 3. Duopoly Waiver Request. In support of its waiver request, Freedom has submitted an engineering exhibit which shows the Grade B overlap area of WLAJ(TV) and WWMT(TV). The Grade B overlap area consists of 597,224 individuals and 6,890 square kilometers, representing 25.6% of the population and 23.6% of the area within the Grade B contour of WWMT(TV) and 70.8% of the population and 57.7% of the area within the Grade B contour of WLAJ(TV). There is no Grade A contour overlap of the two stations, which Freedom maintains, are located in separate, distinct markets. Specifically, Freedom notes that WLAJ(TV) is located in the Lansing, Michigan Designated Market Area ("DMA") (ranked 106th), while WWMT(TV) is located in the Grand Rapids-Kalamazoo-Battle Creek, Michigan, DMA (ranked 37th). 4. Freedom contends that the overlap area is served by a variety of media voices. According to the engineering report submitted by Freedom, four television stations serve all of the overlap area and 15 television stations cover some portion of the overlap area. In addition, Freedom maintains that the entire population of the overlap area receives a 60 dBu signal from at least one full-service FM station, and twelve AM stations have transmitters located within the overlap area. Further, states Freedom, the communities within the overlap area are served by 11 cable systems, and 20 newspapers (eight dailies, 10 weeklies, one bi-monthly and one monthly). 5. Given the multitude of competing media outlets serving the overlap area, Freedom asserts that grant of the instant waiver request will not result in an undue concentration of economic power in that area. It further represents that each station will be operated separately with its own staff, each station will maintain its separate network affiliation, and each station will make its own programming decisions. 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 the following set of factors to be considered when evaluating an applicant's requests for waiver of the duopoly rule: the extent of the overlap, the number of media voices available in the overlap area, the distinctiveness 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) ("Telecom Act"). In response to this Congressional directive in the Telecom Act and to update the record, the Commission released the Television Ownership Second Further Notice. 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 to authorize common ownership of television stations that are in separate DMA's and whose Grade A contours do not overlap, conditioned on coming into compliance with the outcome of the proceeding within six months of its conclusion. Television Ownership Second Further Notice, 11 FCC Rcd at 21681. 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 DMA's supplemented with a Grade A overlap criterion." 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 policy outlined in the Television Ownership Second Further Notice, we believe that grant of a conditional waiver of the duopoly rule, subject to the outcome of the pending ownership proceeding, is justified. The temporary common ownership of WLAJ(TV) and WWMT(TV) would be consistent with the interim policy set forth in the Television Ownership Second Further Notice, as the stations are in separate DMA's and there is no Grade A overlap between WLAJ(TV) and WWMT(TV). 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 the grant of a temporary waiver, conditioned on the applicant coming into compliance with the outcome of the pending television ownership rulemaking proceeding within six months of its conclusion, will serve the public interest, convenience and necessity. Any request to extend this conditional waiver should be filed at least 45 days prior to the end of the six-month period and would be closely scrutinized. 10. ACCORDINGLY, IT IS ORDERED, That the request for conditional waiver of Section 73.3555(b) of the Commission's Rules, to permit the common ownership of television stations WLAJ(TV), Lansing, Michigan, and WWMT(TV), Kalamazoo, Michigan, IS GRANTED, subject to the outcome of the Commission's pending broadcast television ownership rulemaking in MM Docket Nos. 91-221 and 87-8. Should divesture be required as a result of that proceeding, Freedom Broadcasting of Michigan, Inc. 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 as would be necessary for it to come into compliance with the rules as provided in the final order. 11. IT IS FURTHER ORDERED, That the application for consent to assign the license of station WLAJ(TV) Lansing, Michigan from WLAJ License, Inc. to Freedom Broadcasting of Michigan, Inc. (File No. BALCT-980227IQ), IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau