WPCs 2BJZ Courier3|wQUx6X@`7X@HP LaserJet 5Si LPT2:l)RM 700HPLAS5SI.PRSx  @\z$^X@26 ZFv@3|wHP LaserJet 5Si LPT2:l)RM 700HPLAS5SI.PRSXj\  P6G;\z$^XP X- I. A. 1. a.(1)(a) i) a) 1. 1. 1. a.(1)(a) i) a)#X\  P6G;ɒP#X01Í ÍX01Í Í#Xj\  P6G;ynXP#a8DocumentgDocument Style StyleXX` `  ` 2pkXk.a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  a5DocumentgDocument Style Style }X(# a2DocumentgDocument Style Style<o   ?  A.  2,vt{ a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` 2% ^   f a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h 2W    a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p Tech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technical2Qa1DocumentgDocument Style Style\s0  zN8F I. ׃  a5TechnicalTechnical Document Style)WD (1) . a6TechnicalTechnical Document Style)D (a) . a2TechnicalTechnical Document Style<6  ?  A.   2M_a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   a1TechnicalTechnical Document StyleF!<  ?  I.   a7TechnicalTechnical Document Style(@D i) . 238e<a8TechnicalTechnical Document Style(D a) . Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""2"2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""><q*"xxxxWWxxxWWkkxxxA.SSxSSJJSJS+SSSSS8SSSSSSSSS.xJxJxJxJxJorJiJiJiJiJ8.8.8.8.{SxSxSxSxS{S{S{S{SxSxJ{SxSxSxS{S`SxIxSxIqIqIrSrS{dgIiSiSgIxSxSxSxSxS{S{S8.SSSS8Sz]SSuSg/g-  the combination. See Iowa State University Broadcasting Corporation, 9 FCC Rcd 481, 48788  Y)-  w(1993), aff'd sub nom. Iowans for WOITV, Inc. v. FCC, 50 F.3d 1096 (D.C. Cir. 1995); H&C  Y-  Communications, Inc., 9 FCC Rcd 144, 146 (1993). After weighing the factors, the   yCommission considers any public interest benefits proposed by the applicant to determine   whether, in light of the overlap, the benefits outweigh any detriment which may occur from  Y-  grant of the waiver. See, e.g., Iowa State University, 9 FCC Rcd at 48788. As with any   <waiver, it will only be granted if the Commission concludes that the waiver is in the public interest.  Yw- j 4. Currently, the Commission is reexamining its broadcast television ownership policies,   including the duopoly rule. In the Telecommunications Act of 1996, Congress directed the  YI-  Commission to conduct a rulemaking proceeding to determine whether to retain, modify or   <eliminate existing limitations on the number of television stations that an entity may control  Y-  Ywithin the same television market.  See Section 202(c) of the Telecommunications Act of 1996,   Pub. L. No. 104104, 110 Stat. 56 (Feb. 8, 1996). Pursuant to that Congressional directive and  Y-  to update the record, the Commission released a second notice, the Television Ownership Second  Y -  I Further Notice, to its pending television ownership proceeding. See Review of the Commission's  Y!-  Regulations Governing Television Broadcasting, Further Notice of Proposed Rule Making, 10 FCC Rcd 3524 (1995).  Y$- 5. In the Television Ownership Second Further Notice, the Commission stated that it will   be inclined, during the pendency of the television ownership proceeding, to grant duopoly   v 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"?',-(-(ZZP("   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."  Y-  JTelevision Ownership Second Further Notice, 11 FCC Rcd at 21681. 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  Yx-  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. With regard  YL-  to waiver requests not falling in this category, i.e., those involving stations in the same DMA   ,or with overlapping Grade A contours, the Commission stated it would be disinclined to grant   them during the pendency of the television ownership proceeding absent extraordinary  Y -circumstances. Id.   X - Temporary Waiver Showing  6. Stations KCRATV and KSBW(TV) do not presently meet the Commission's interim   duopoly policy because, although they are located in separate Designated Market Areas (DMA),  Y-  with station KCRATV in the SacramentoStocktonModesto, California DMA, ranked 20th in   xsize, and station KSBW(TV) in the MontereySalinas, California DMA, ranked 121st in size,  YS-  their Grade A contours overlap. As mentioned supra 2, however, HearstArgyle holds an   outstanding construction permit to relocate station KSBW(TV)'s facilities to Fremont Peak  Y'-  which, inter alia, will eliminate the Grade A overlap between the stations. During the time that   hHearstArgyle constructs the new KSBW(TV) facilities on Fremont Peak, however, the stations   will continue to operate with overlapping Grade A and Grade B contours. Therefore, to permit   its common ownership of the stations for the period necessary to complete construction of the   new KSBW(TV) facilities on Fremont Peak, HearstArgyle requests a temporary waiver of the   duopoly rule, beginning nine months from the consummation date of its acquisition of station  Y-KCRATV. d yO-  YЍ HearstArgyle believes that it can accomplish the construction and relocation of station KSBW(TV)'s facilities   within that ninemonth period, and, in an amendment filed on December 1, 1998, promises to provide the   YCommission with status reports every 90 days on the construction of station KSBW(TV)'s new facilities at Fremont   Peak pursuant to its outstanding construction permit. As for the current status of the relocation and construction,   HearstArgyle states that station KSBW(TV) owns the land on which it proposes to construct the authorized facilities,   has well as the existing communications tower on which it proposes to locate its antenna. Though FAA approval has   already been secured, station KSBW(TV) awaits approval of Monterey County in order to proceed with construction,   and local counsel retained by the station has advised it that the construction would be consistent with local law. In   addition, while station KSBW(TV) has ordered an antenna, it has been informed by the antenna manufacturer,   Dielectric, that, because of production backlogs relating to DTV, it will take approximately six months to receive   ;the antenna. Further, according to its discussions with suppliers, station KSBW can secure the transmission line and   transmitter within three months or so from the date of order. HearstArgyle states that, after securing the necessary   Lbuilding permit, construction of a small building to house the transmitter will take only a few weeks. In sum,   HearstArgyle maintains that, once the antenna and other materials necessary to construct the facilities are received, construction should take only a matter of weeks and should be completed by the end of June 1999.  "H ,-(-(ZZO"Ԍ 7. In support, HearstArgyle addresses the traditional factors the Commission considers  Y-  when evaluating a request for waiver of the duopoly rule, see supra 3. According to Hearst  Argyle, the Grade B overlap encompasses 14,890 square kilometers and 5,713,989 people,   Zrepresenting 29.4 percent of the area and 66.3 percent of the population within the Grade B   contour of station KCRATV, and 48.3 percent of the area and 87.7 percent of the population   Kwithin the Grade B contour of station KSBW(TV). This degree of Grade B overlap, Hearst  yArgyle contends, falls within the range of those approved by the Commission in granting   previous temporary duopoly waivers. As for the Grade A overlap, that area encompasses 878   square kilometers and 143,626 people, representing 5.3 percent of the area and 4.9 percent of   the population within the Grade A contour of station KCRATV, and 5.2 percent of the area and   4.5 percent of the population within the Grade A contour of station KSBW(TV). HearstArgyle   maintains that this degree of Grade A overlap is significantly less than that recently approved  Y -by the Commission. Citing Granite Broadcasting Corporation, 13 FCC Rcd 13035 (1998).  =8. Next, HearstArgyle argues that a large number of media voices exist both within the   Koverlap area and in the affected markets. Specifically, HearstArgyle claims that, excluding   kstations KCRATV and KSBW(TV), a maximum of 26, and a minimum of 15, Grade B   television services, and numerous FM 60 dBu radio services are available within the Grade A   overlap area. As for the affected markets, HearstArgyle refers to the ten other television   xstations, including eight commercial stations, licensed to cities within the Sacramento DMA,   which has a cable penetration rate of 64 percent, and to the three other television stations, all   Zcommercial stations, licensed to cities within the MontereySalinas DMA, which has a cable   penetration rate of 78 percent. In addition, HearstArgyle reports that the majority of the entire   overlap area lies in a third market, the San FranciscoOaklandSan Jose DMA, ranked the 5th   Ylargest market in the country. Nineteen commercial and five noncommercial television stations   are licensed to that market, which has a cable penetration rate of 71 percent. Based on these   ifacts, HearstArgyle concludes that, even with the temporary common ownership of stations   KCRATV and KSBW(TV), a diversity of other media outlets provides numerous viewpoints within the overlap area, as well as the stations' respective DMAs.  YR-  9. With respect to the Commission's concerns regarding the distinctiveness of the   Ymarkets and the effect of the combination on competition, HearstArgyle states that the stations   are located in cities approximately 180 miles apart and in separate DMAs. According to Hearst  Argyle, moreover, "[t]he fact that [KCRATV and KSBW(TV)] are in different DMAs evidences   that they are not direct competitors." As additional evidence that the proposed combination will   not have an adverse effect on competition, HearstArgyle submits the following: (1) a statement   from the general manager of station KCRATV, in which he claims that he is aware of no   instance in which an advertiser seeking to reach television households in the MontereySalinas   DMA has purchased advertising time on station KCRATV; and (2) a statement from the general   ;manager of station KSBW(TV), in which he claims that he is aware of no instance in which an   advertiser seeking to reach television households in the SacramentoStocktonModesto DMA has   purchased advertising time on station KSBW(TV). Further, HearstArgyle pledges to operate   stations KCRATV and KSBW(TV) separately during the ninemonth, temporary waiver period, with each station having its own local sales, programming and news staffs."'',-(-(ZZP("Ԍ ԙ10. Given these considerations, HearstArgyle concludes that grant of a ninemonth,   Jtemporary waiver would be consistent with Commission precedent and would not frustrate the   policies underlying the multiple ownership rules. To buttress its argument, moreover, Hearst  Argyle states its intention to use this same ninemonth, temporary waiver period to coordinate   the collocation of KSBW(TV)'s analog and digital facilities, as well as the digital facilities of other television stations, at the new Fremont Peak site.  X_- Discussion  Y1- y11. Although the Commission stated in the Television Ownership Second Further Notice   v that, during the pendency of the television ownership proceeding, it would be disinclined to grant   waivers inconsistent with its interim policy, the Commission has also previously stated that it   is not constrained from granting a temporary waiver where circumstances "will not significantly  Y -  frustrate the policies underlying the multiple ownership rules." Telemundo Group, Inc., Debtor  Y -  in Possession, 10 FCC Rcd 1104, 1106 (1994) (quoting Family Television Corp., 59 RR2d 1344,   1348 (1986)). We believe that the circumstances presented, here, warrant the grant of a nine  ;month, temporary waiver of the duopoly rule to permit HearstArgyle's common ownership of   istations KCRATV and KSBW(TV). In accordance with its outstanding construction permit,   HearstArgyle intends to complete the relocation and construction of station KSBW(TV)'s   ;facilities, thereby eliminating the Grade A overlap between that station and station KCRATV,   within the ninemonth, temporary waiver period. Further, HearstArgyle has already taken steps   to relocate and construct station KSBW(TV)'s new facilities, and has promised to provide the   KCommission with status reports every 90 days regarding the progress of such relocation and   construction. We note, too, that this relocation of station KSBW(TV) will result in the   collocation of its analog and digital facilities and the digital facilities of other television stations.   YCollocation of these facilities will serve the public interest by reducing the need for modifying   existing broadcast towers or constructing new towers to house digital television facilities, and by ameliorating adjacent channel interference concerns.  12. Furthermore, allowing HearstArgyle's common ownership of the stations for this   brief, ninemonth period will not undermine our goals of promoting diversity in programming   and viewpoints and fostering economic competition, given the large number of media voices   wserving the overlap area, which lies mostly in the San Francisco DMA, the fifth largest market,   the location of the stations in separate markets and Hearst Argyle's pledge to operate stations   KCRATV and KSBW(TV) separately during the waiver period. We also note that, to facilitate   jcertain transactions, the Commission has previously approved temporary waivers in cases   <involving a greater degree of Grade A and Grade B contour overlap and, in some instances,  Y!-  smaller and less competitive markets."!d {O,$-  Kԍ See Capital Cities/ABC, 11 FCC Rcd 5841 (1996) (granting temporary waiver to allow common ownership   iof two stations in the 2nd ranked Los Angeles DMA, where Grade B overlap represented 100 percent of the area   and population within the Grade B contour of station KCALTV, Los Angeles, California, and 97.6 percent of the  yO&-  ;area and 99.4 percent of the population within the Grade B contour of station KABCTV, Los Angeles, California);  {ON'-  The Providence Journal Co., 12 FCC Rcd 2883, 288588 (1997) (granting temporary waiver to allow common"N',-(-('"   ownership of two stations in the 12th ranked SeattleTacoma DMA, where Grade B overlap was nearly 100%;  {OX-  AFLAC Broadcasting, Inc., 12 FCC Rcd 3907 (1997) (allowing temporary common ownership of two stations in   100th largest DMA, Savannah, and two stations in 165th largest DMA, HattiesburgLaurel, where Grade A and Grade B overlap was almost complete). In fact, the Commission recently approved a ninemonth,"!,-(-(ZZ""   temporary waiver in a case involving a greater degree of Grade A and Grade B contour overlap   ybetween two stations, one located in the San Francisco DMA and the other located in the  Y-  MontereySalinas DMA.zd {O5-  ԍ  See Granite Broadcasting Corporation, 13 FCC Rcd 13035(1998), recon. pending (granting ninemonth,   Ztemporary waiver to allow common ownership of stations KNTV(TV) and KOFYTV, located in the Monterey  Salinas and San Francisco DMAs, respectively, where the Grade A overlap area constituted 25.9 percent of the area   ;and 67.1 percent of the population within the Grade A contour of station KNTV(TV), and 42.3 percent of the area and 42.9 percent of the population within the Grade A contour of station KOFYTV).z Based on these factors, we conclude that diversity and competition   yin the Sacramento and MontereySalinas DMAs will not be adversely affected by a fixed,   temporary period of common ownership and control of stations KCRATV and KSBW(TV).  13. For these reasons, we conclude that grant of the requested waiver will serve the   public interest, convenience and necessity. Accordingly, we will grant HearstArgyle a nine  xmonth waiver of the television duopoly rule to permit its temporary common ownership and   control of stations KCRATV and KSBW(TV). Any request to extend this temporary waiver   should be filed at least 45 days prior to the end of the ninemonth period and will be closely scrutinized.  X - Conditional Waiver Showing  14. Turning to its second waiver request, HearstArgyle asserts that station KCRATV  Y-  and station KSBW(TV), as modified, see supra 6, meet the Commission's interim duopoly  Y{-  policy. In support, HearstArgyle submits an engineering exhibit which shows that no Grade   ;A overlap will exist between station KCRATV, which is in the Sacramento DMA, and station   KSBW(TV), as modified, which is in the MontereySalinas DMA. In addition, HearstArgyle   describes the predicted Grade B contour overlap between stations KCRATV and KSBW(TV),   as modified, as encompassing 11,059 square kilometers and 3,180,016 people, representing 21.8   percent of the area and 36.9 percent of the population within station KCRATV's predicted   Grade B contour, and 36.2 percent of the area and 78.7 percent of the population within station   wKSBW(TV)'s predicted Grade B contour. HearstArgyle asserts that this degree of overlap falls well within the range of previous duopoly waiver cases approved by the Commission.  _15. Further, HearstArgyle maintains that, excluding stations KCRATV and   =KSBW(TV), 26 commercial television stations and six noncommercial television stations   provide service to part or all of the Grade B overlap area. Of those 32 television stations,   HearstArgyle states, the maximum number of Grade B television services available in any   iportion of the overlap area is 27, and the minimum number of such services available in any   portion of the overlap is 2. Along with video service offerings, the overlap area also receives""d ,-(-(ZZ"  Y-  radio service from 54 commercial and 17 noncommercial FM radio stations. d yOy-  ԍ In his Engineering Statement filed in support of HearstArgyle's waiver request, Bernard R. Segal, P.E., a   ;consulting engineer, states that a demonstration of the AM station signals that are available within the overlap area   ,has not been undertaken. Based on his experience, however, he believes that the number of AM 0.5 mV/m daytime signals that are available would be approximately the same as the number of FM signals. Based on its  Y-  analysis of the overlap area, as well as the Sacramento, Salinas and San Francisco DMAs, see  Y-  supra 8, HearstArgyle concludes that, even with the common ownership of stations KCRATV   xand KSBW(TV), a diversity of other media outlets provides numerous viewpoints within the overlap area and the stations' respective DMAs.  Y-  Yz-  16. Finally, HearstArgyle reiterates its statements made in the ninemonth, temporary   waiver request with respect to the distinctiveness of the affected markets and the effect of the  YL-  combination on competition, see supra 9, and likewise pledges to operate stations KCRATV   X and KSBW(TV) separately during the conditional waiver period, with each station having its own local sales, programming and news staffs.  X - Discussion  Y -  17. Based on the Commission's interim ownership policy outlined in the Television  Y -  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. Because the two   ;stations are in separate DMAs and the Grade A contours of station KCRATV and KSBW(TV),   as modified, will not overlap, the temporary common ownership of stations KCRATV and  YU-  KSBW(TV) would be consistent with the interim policy set forth in the Television Ownership  Y@-  Second Further Notice. Moreover, our examination of the record presented here reveals nothing  Y+-  suggesting that we should not follow the established interim policy in this case. Accordingly,   .we conclude that grant of a temporary waiver, conditioned on the applicant coming into   compliance with the outcome of the pending television ownership rulemaking proceeding within   Ksix months of its conclusion, will serve the public interest, convenience and necessity. Any   Jrequest to extend the conditional waiver should be filed at least 45 days prior to the end of the sixmonth period and will be closely scrutinized. _@CONCLUSION  18. Having determined that the applicants are qualified in all respects, and based upon   <the information and representations made before us, we find that grant of the application to   transfer control of Kelly Broadcasting Company, the licensee of station KCRATV, Sacramento,   from J.S. Kelly, L.L.C. to Kelly Acquisition Corp. will serve the public interest, convenience and necessity.  {19. Accordingly, IT IS ORDERED, That the request for a temporary waiver of the   duopoly rule, Section 73.3555(b), to permit common ownership and control of television stations"!,-(-(ZZ""   KCRATV, Sacramento, California, and KSBW(TV), Salinas, California IS GRANTED,   provided that, within nine months of the consummation of this transfer of control, HearstArgyle   Stations, Inc. commences operation pursuant to the modification granted in File No. BPCT980828KE.  !20. IT IS FURTHER ORDERED, That the request for a conditional waiver of the   television duopoly rule, Section 73.3555(b) of the Commission's rules, to permit the common   ownership of television stations KCRATV, Sacramento, California, and KSBW(TV), Salinas,   =California IS GRANTED, subject to the outcome of the Commission's pending broadcast  Y1-  hownership rulemaking in MM Docket Nos. 91221 and 878. Should divestiture be required as   a result of that proceeding, the licensee is directed to file, within six months from the release   hof the final order in MM Docket Nos. 91221 and 878, an application for Commission consent   to dispose of such station as would be necessary to come into compliance with the rules as provided in the final order.   21. IT IS FURTHER ORDERED, That the application for consent to transfer control   of Kelly Broadcasting Company, the licensee of station KCRATV, Sacramento, California,   0from J.S. Kelly, L.L.C. to Kelly Acquisition Corp., File No. BTCCT980828IA, IS GRANTED.  h FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau  Y- h