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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) ) WNTZ-48, INC. ) (Assignor) ) ) and ) File No. BALCT-980115IS ) WHITE KNIGHT BROADCASTING ) OF NATCHEZ LICENSE CORPORATION ) (Assignee) ) ) For Consent to Assign the License of ) Station WNTZ-TV, Natchez, Mississippi) 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 WNTZ-TV, Channel 48 (FOX), Natchez, Mississippi, from WNTZ-48, Inc. to White Knight Broadcasting of Natchez License Corporation ("White Knight"). 2. White Knight Holdings, Inc., the ultimate parent company of White Knight, wholly owns the licensee of WVLA-TV, Channel 33 (NBC), Baton Rouge, Louisiana, whose Grade B contour overlaps WNTZ-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, White Knight 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, White Knight has submitted an engineering exhibit which shows the Grade B overlap area of WNTZ-TV and WVLA-TV. That Grade B overlap area consists of 3,631 individuals and 567.1 square kilometers, representing 1.9% of the population and 3.5% of the area within the Grade B contour of WNTZ-TV and 0.3% of the population and 2.1% of the area within the Grade B contour of WVLA-TV. There is no Grade A contour overlap of the two stations, which White Knight maintains, are located in separate, distinct markets. Specifically, White Knight notes that WNTZ-TV is located in the Alexandria, Louisiana, Designated Market Area ("DMA") (ranked 177th), while WVLA-TV is located in the Baton Rouge, Louisiana, DMA (ranked 98th). 4. White Knight contends that the overlap area is served by a variety of media voices. According to the engineering report submitted by White Knight, seven other television stations serve all or part of the overlap area. In addition, White Knight maintains that all or a portion of the overlap area is served by 24 radio stations (22 commercial radio stations and two noncommercial radio stations) and seven weekly newspapers. Further, it states, the counties comprising the overlap area are served by 17 cable systems. 5. White Knight asserts that grant of the instant waiver request will not result in an undue concentration of economic power in the WNTZ-TV and WVLA-TV overlap area, since both stations are non-dominant UHF stations. White Knight states that Nielsen data for 1997 indicate that WNTZ-TV (FOX) trails the NBC and ABC affiliates; while WVLA-TV (NBC) trails the ABC and CBS affiliates except for prime time. According to White Knight, the stations will continue to operate separately, each with its own local sales, programming and station staffs. 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 WNTZ-TV and WVLA-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 WNTZ-TV and WVLA-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 WNTZ-TV, Natchez, Mississippi, and WVLA-TV, Baton Rouge, Louisiana, 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, White Knight Broadcasting of Natchez License Corporation 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 WNTZ-TV, Natchez, Mississippi, from WNTZ-48, Inc. to White Knight Broadcasting of Natchez License Corporation (File No. BALCT-980115IS), IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau