******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 Applications of ) ) Retlaw Broadcasting of Eugene, L.L.C. ) (Assignor) ) ) and ) File Nos. BALCT-981203RR ) BALCT-981203RS Fisher Broadcasting, Inc. ) BALTTV- 981203RT (Assignee) ) BALTTV-981203RU ) BALTTV-981203RV For Consent to Assign the Licenses of Stations ) BALTTV-981203RW KVAL-TV, Eugene, Oregon ) KCBY-TV, Coos Bay, Oregon ) K04DR, Eugene, Oregon ) K02DB, Scottsburg, Oregon ) K07KZ, Squaw Valley, Oregon ) K33CP, Gold Beach, Oregon ) ) and ) ) Retlaw Broadcasting of Yakima, L.L.C. ) (Assignor) ) ) and ) File Nos. BALCT-981203RB ) BALCT-981203RC Fisher Broadcasting, Inc. ) BALCT-981203RD (Assignee) ) ) For Consent to Assign the Licenses of Stations ) KIMA-TV, Yakima, Washington, ) KLEW-TV, Lewiston, Idaho ) KEPR-TV, Pasco, Washington ) ) and ) ) Retlaw Broadcasting of Idaho Falls, L.L.C. ) (Assignor) ) ) and ) File Nos. BALCT-981203RE ) BALTTV-981203RF Fisher Broadcasting, Inc. ) BALTTV-981203RG (Assignee) ) BALTTV-981203RI ) For Consent to Assign the Licenses of Stations ) KIDK(TV), Idaho Falls, Idaho, ) K10AQ, Challis, Idaho, ) K11CP, Lava Hot Springs, Idaho ) K65AZ, Burley, Idaho ) ) and ) ) Retlaw Broadcasting of Boise, L.L.C. ) (Assignor) ) ) and ) File Nos. BALCT-981203RJ ) BALTTV-981203RK Fisher Broadcasting, Inc. ) BALTTV-981203RL (Assignee) ) BALTTV-981203RM ) BALTTV-981203RN For Consent to Assign the Licenses of Stations ) BALTTV-981203RO KBCI-TV, Boise, Idaho, ) BALTTV-981203RP K09HS, Glenns Ferry, Idaho, ) BALTTV-981203RQ K10FD, McCall/North Meadows, Idaho, ) K10GQ, Huntington, Oregon, ) K11GR, Cascade, Idaho, ) K11LS, Jordan Valley, Oregon, ) K13AI, Lowman, Idaho ) K55GM, Cambridge, Idaho ) ) and ) ) Retlaw Broadcasting of Fresno, L.L.C. ) (Assignor) ) ) and ) File No. BALCT-981203RA ) Fisher Broadcasting - Fresno, L.L.C. ) (Assignee) ) ) For Consent to Assign the License of Station ) KJEO(TV), Fresno, California ) ) and ) ) Retlaw Broadcasting of Augusta, L.L.C. ) (Assignor) ) ) and ) File No. BALCT-981203RX ) Fisher Broadcasting - Georgia, L.L.C. ) (Assignee) ) ) For Consent to Assign the License of Station ) WFXG(TV), Augusta, Georgia ) ) and ) ) Retlaw Broadcasting of Columbus, L.L.C. ) (Assignor) ) ) and ) File No. BALCT-981203RY ) Fisher Broadcasting - Georgia, L.L.C. ) (Assignee) ) ) For Consent to Assign the License of Station ) Station WXTX(TV), Columbus, Georgia ) ) and ) ) Retlaw Enterprises, Inc. ) (Assignor) ) ) and ) File No. BALTTV-981203RZ ) Fisher Broadcasting, Inc. ) (Assignee) ) ) For Consent to Assign the License of Station ) K07KS, South Park, Wyoming ) ) and ) ) Retlaw Broadcasting ) of Eugene, L.L.C. ) (Transferor) ) ) and ) File Nos. BTCCT-981203IC ) BTCTTV-981203ID Fisher Broadcasting, Inc. ) BTCTTV-981203IE (Transferee) ) BTCTTV-981203IF ) BTCTTV-981203IG For Consent to Transfer Control of ) BTCTTV-981203IH South West Oregon Television Broadcasting ) BTCTTV-981203II Corporation, Licensee of Stations ) KPIC(TV), Roseburg, Oregon, ) K02AU, Sutherlin, Oregon, ) K07PP, Camas Valley, Oregon ) K11GH, Canyonville, Oregon ) K12IA, Oakland, Oregon ) K13HM, Myrtle Creek, Oregon ) K58DA, Glendale, Oregon ) MEMORANDUM OPINION AND ORDER Adopted: April 16, 1999 Released: April 20, 1999 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 applications to assign the license or transfer control of 11 television and 21 television translator stations. The applications, which are unopposed, were filed simultaneously and arise from a single proposed transaction for the sale of assets by Retlaw Enterprises, Inc. and entities subject to its control (Retlaw) to Fisher Broadcasting, Inc. and entities subject to its control (Fisher). Fisher also seeks a conditional waiver of the television duopoly rule, 47 C.F.R. 73.3555(b), with respect to the proposed assignment of the license for Station KVAL-TV, Eugene, Oregon. Finally, Fisher requests continuing satellite authority for four stations currently operating under the satellite exception to the television duopoly rule: KCBY-TV, Coos Bay Oregon, and KPIC(TV), Roseburg, Oregon, which are satellites of KVAL-TV, Eugene, Oregon; and KEPR- TV, Pasco, Washington, and KLEW-TV, Lewiston, Idaho, satellites of KIMA-TV, Yakima, Washington. For the reasons stated below, we will grant Fisher's request for a conditional waiver of the television duopoly rule and its requests for continuing satellite authority. Conditional Duopoly Waiver Request 2. Fisher is the licensee of KATU(TV) (Channel 2, ABC), Portland, Oregon, whose Grade B contour overlaps that of KVAL-TV (Channel 13, CBS), Eugene, Oregon, which Fisher is seeking to acquire. Such overlap is prohibited by the Commission's television duopoly rule, 47 CFR  73.3555(b). To allow common control of KVAL-TV and KATU(TV), Fisher requests a waiver pursuant to the conditional waiver policy announced by the Commission in connection with its pending review of the duopoly rule. See Review of the Commission's Regulations Governing Television Broadcasting, 11 FCC Rcd 21655 (1996) (Television Ownership Second Further Notice). 3. Extent of the Overlap. Fisher's engineering exhibit demonstrates that there will be no Grade A contour overlap of the facilities of KVAL-TV, which is located in the Eugene, Oregon DMA (120th-ranked television market) and those of KATU(TV), which is located in the Portland, Oregon DMA (ranked 24th). According to Fisher's calculations, the current Grade B overlap area of the facilities of KVAL-TV and KATU(TV) encompasses 356,712 individuals and 5,936 square kilometers, comprising approximately 46.4% of the population and 17.6% of the land area within the Grade B contours of KVAL-TV and 16.8% of the population and 14.4% of the land area within KATU(TV)'s Grade B contour. In 1998, Fisher was granted a construction permit to upgrade the facilities of KATU(TV), which will increase the area of Grade B overlap between the stations but will not cause the stations' Grade A contours to overlap. See File No. BPCT-960624KG (permit granted July 17, 1998). After implementation of that upgrade, the overlap area created by the intersection of the Grade B contours of KVAL-TV and KATU will encompass 6,776 square kilometers and 365,056 individuals, constituting 47.5% of the population and 20.1% of the land area within the Grade B contour of KVAL-TV and 16.9% of the population and 15.3% of the area within the Grade B contour of KATU. Fisher maintains that these figures are comparable to the extent of overlap the Commission has found acceptable in prior cases. 4. Number of Media Voices in the Overlap Area. Fisher calculates that 11 other television stations (eight commercial and three noncommercial educational) provide Grade B service to some portion of the population in the Grade B overlap area. One of those stations provides Grade B service to the entire Grade B overlap area. These same television stations will serve the Grade B overlap area after implementation of the proposed KATU upgrade. Fisher represents that 37 FM radio stations provide 1mV/m coverage to some portion of the overlap area, and that 17 AM radio stations provide 2mV/m groundwave coverage to portions of the overlap area. In addition, Fisher demonstrates that 29 cable systems, operated by 15 separate operators, serve counties in the KVAL- TV/KATU overlap area and offer, on average, 32 channels of video programming. Fisher notes that, within the overlap area, there are two daily and 11 weekly newspapers. Consequently, Fisher concludes that a large number of media voices are available in the overlap area and the common ownership of KVAL-TV and KATU will not result in any significant diminishment of media voices. 5. Independence of the Stations. Fisher states that, with respect to the independence of the stations, it will operate KVAL-TV and KATU on a separate and independent basis. Both stations will continue to use their own local sales, programming, news and office staffs. 6. Concentration of Economic Power. Finally, Fisher states that the common ownership of the stations will not result in undue concentration of economic power within the overlap area. Fisher notes that the two stations have different network affiliations, which they will maintain. KVAL-TV is a CBS affiliate operating on VHF Channel 13 at an effective radiated power of 316 kilowatts from an antenna 451 meters above average terrain. KATU is an ABC affiliate operating on VHF Channel 2 at an effective radiated power of 100 kilowatts from an antenna 475 meters above average terrain. 7. 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. 8. 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, 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. 9. 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 DMA's 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." Television 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 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. 10. We believe that grant of a conditional waiver of the duopoly rule, subject to the outcome of the pending ownership proceeding, is justified in this case. The common ownership of KATU and KVAL-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 contour overlap between them. 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 a temporary waiver, conditioned on Fisher coming into compliance with the outcome of the pending broadcast television ownership rulemaking, will serve the public interest, convenience and necessity. Any requests 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. Continued Satellite Exemption Requests 11. Among the television stations that are the subjects of the pending applications are four stations currently operating as television satellites. Specifically, KCBY-TV (Channel 11, CBS), Coos Bay, Oregon, and KPIC(TV) (Channel 4, CBS), Roseburg, Oregon, operate as satellites of KVAL- TV (Channel 13, CBS), Eugene, Oregon. KEPR-TV (Channel 19, CBS), Pasco, Washington, and KLEW-TV (Channel 3, CBS), Lewiston, Oregon, are satellites of KIMA-TV (Channel 29, CBS), Yakima, Washington. From their inception, all of these stations have been operated as satellite stations and Fisher requests continued satellite status. These four satellite stations, Fisher asserts, presumptively qualify under the Commission's three-part standard for a satellite exception to the multiple ownership rules. 12. In Television Satellite Stations, 6 FCC Rcd 4212, 4215 (1991), the Commission established the requirement that all applicants seeking to transfer or assign satellite stations justify continued satellite status by demonstrating compliance with a three-part "presumptive" satellite exemption standard applicable to new satellite stations. Alternatively, applicants may demonstrate that there exist "other compelling circumstances" to warrant continued satellite authorization. The presumptive satellite exemption is met if the following three public interest criteria are satisfied: (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. Id. at 4212. If an applicant cannot qualify for the presumption, the Commission will evaluate the proposal on an ad hoc basis, and grant the application if there are compelling circumstances that warrant approval. 13. KCBY-TV and KPIC(TV). Regarding the first criterion for a "presumptive" satellite exemption, Fisher demonstrates that no City Grade contour overlap exists between the authorized facilities of the satellite stations, KCBY-TV and KPIC(TV), and the authorized facilities of their parent station, KVAL-TV. As to the second criterion, an applicant can use one of two different tests to demonstrate that an area is underserved. Under the "transmission test," a proposed satellite community of license is considered underserved if there are two or fewer television stations already licensed to it. Television Satellite Stations, 6 FCC Rcd at 4215. Alternatively, under the "reception test," a community of license qualifies as underserved if 25% or more of the area within the satellite station's Grade B contour, but outside the parent's Grade B contour, receives four or fewer services, excluding the satellite station's service. Id. Review of Fisher's submission shows that KCBY-TV and a satellite of another full-service Eugene television station, are the only full-service television stations licensed to Coos Bay, Oregon. As to KPIC(TV), 49.8% of the area within KPIC's Grade B contour, but outside KVAL-TV's Grade B contour, receives four or fewer television services. Accordingly, Fisher argues, the Coos Bay and Roseburg communities are both underserved. 14. With respect to the third criterion, an applicant must show that no alternative operator is ready and able to construct, or to purchase and operate, the proposed satellite as a full-service station. Fisher argues that it is patently evident that no alternative operator could purchase and operate either KCBY-TV or KPIC as economically viable, full-service stations, operated on a stand- alone basis. Fisher explains that both stations have been operated as satellites of KVAL-TV for 40 years, and in that time, no party has expressed interest in purchasing or operating either of the stations as a stand-alone facility. 15. Fisher also contends that neither KCBY-TV nor KPIC could gain access to network and certain syndicated programming, because licensing rights for network programming and the most popular syndicated programming are already held by Eugene television stations under agreements that typically provide for DMA-wide exclusivity. Moreover, Fisher continues, neither station could afford to purchase the licensing rights for popular sports programming, such as University of Oregon basketball and football, currently provided by KVAL-TV. Fisher explains that the financial prospects of both stations are limited by the characteristics of the areas that they service, which Fisher characterizes as secluded by either rough terrain or geographic remoteness and served by stations with limited service contours. In addition, the stations would be forced to compete against the KMRT, KMTZ, KMTX-TV parent/satellite operation. Fisher argues that the inability of KCBY-TV and KPIC(TV) to obtain popular programming, coupled with competition from other satellite stations operating in their respective markets, would cause viewership to decline until the stations fell into "death spirals" characterized by declining advertising revenues, increasingly less attractive programming, and declining viewership. 16. Fisher states that anyone attempting to operate KCBY-TV or KPIC on a stand-alone basis would not be able to originate local news programming of the sort currently produced by KVAL-TV and its satellites. For instance, Fisher represents that KTVC(TV) in Roseburg, the only commercial stand-alone facility in the DMA not licensed to Eugene, does not currently produce any local news programming. In light of the geographic characteristics of Coos Bay and Roseburg, their respective populations, and the programming and financial limitations to which KCBY-TV and KPIC would be subject, Fisher concludes that it is highly unlikely that any alternative operators would be interested in operating either station on a stand-alone basis as a full-service station. Accordingly, Fisher maintains that all three of the criteria set forth in the Satellite Policy Statement are met, and the continued operation of KCBY-TV and KPIC(TV) as satellites of KVAL-TV is presumptively in the public interest. 17. Finally, Fisher argues that ad hoc analysis, applied in cases where an applicant is unable to qualify for the presumption that the proposed satellite operation is in the public interest, also supports grant of the satellite waiver requests. Fisher notes that these satellites provide the only over-the-air CBS network programming to viewers in Coos Bay and Roseburg. Fisher states that the economies made possible by the current satellite arrangements enable KCBY-TV and KPIC to produce seven minutes of local news inserts every day, which those stations incorporate into regularly scheduled news programs originated by their parent. Moreover, Fisher explains that working in conjunction with the large news gathering staff employed by KVAL-TV enables KCBY-TV and KPIC to originate and broadcast occasional programs covering local special events. This programming, Fisher represents, is not provided in Coos Bay or Roseburg by any other television licensee. Similarly, Fisher points out that the parent/satellite arrangement permits television viewers in Coos Bay and Roseburg to receive KVAL-TV's exclusive coverage of the University of Oregon's football and basketball games. Finally, Fisher states that sharing production and administrative facilities with KVAL-TV enables KCBY-TV and KPIC to broadcast live news reports spanning the entire market and to provide full weather forecasts, prepared by KVAL-TV's full-time meteorologist, for Coos Bay and Roseburg. 18. Fisher provides expert support for its request for continuing satellite exemptions in the form of a letter from Frank J. Higney, Vice President of Kalil & Co., Inc., a national media brokerage firm. In his letter, Mr. Higney confirms that the Eugene DMA, the 120th largest DMA, is a geographically expansive market whose financial, retail and population center is Eugene, Oregon. Mr. Higney states that Coos Bay and Roseburg are small communities located a substantial distance from Eugene and separated from Eugene by mountainous terrain that makes it difficult to receive over-the-air coverage from television stations licensed to Eugene. In addition, Mr. Higney points out that the predicted Grade B signals of KCBY-TV and KPIC(TV) do not reach Eugene, giving those stations no realistic chance of acquiring an affiliation with any of the established broadcast networks because the populations covered by each of their signals is minimal (20,000 homes for KCBY-TV and 27,000 homes for KPIC). Moreover, Mr. Higney notes that ABC, CBS, NBC, and Fox each already have affiliates in the DMA, so it would be unlikely that the networks would be willing to grant a second affiliation in the market to a marginal stand-alone station. Finally, Mr. Higney states that KCBY-TV and KPIC(TV) would have to compete with the Eugene stations in the purchase of programming at Eugene program rates, and he concludes that, given their small coverage areas, KCBY and KPIC would be unlikely to generate sufficient sales revenues to pay the necessary programming rates. 19. Mr. Higney states that if KCBY-TV and KPIC(TV) were converted to full-service, stand- alone television stations, they would not be financially viable. He bases his determination on the fact that personnel and programming costs constitute some of the largest operating costs of a television station, and each station therefore would have to generate considerable revenues to maintain its operations. Mr. Higney does not believe that the advertising revenues that could be generated in either Coos Bay or Roseburg would be sufficient to cover the costs of outfitting, staffing, and programming a full-service, stand-alone television station. He further notes that KTVC(TV), the only other station licensed to Roseburg, has struggled to survive and, to his knowledge, has not been profitable in any of the ventures that it has undertaken, including its current operation as a PAX affiliate and past operations as an independent and as a WB affiliate. For all of those reasons, Mr. Higney concludes that there is no reasonable likelihood of finding an alternative operator willing and able to operate either KCBY-TV or KPIC(TV) as a financially viable full-service, stand-alone facility. 20. KEPR-TV and KLEW-TV. With respect to the first criterion for a presumptive satellite exemption, Fisher demonstrates that there is no City Grade contour overlap between the authorized facilities of the satellite stations, KEPR-TV and KLEW-TV, and the authorized facilities of their parent station, KIMA-TV. Fisher states that the second criterion for a "presumptive" satellite exemption, that the proposed satellite would provide service to an underserved area, also is satisfied, because KEPR-TV and KLEW-TV are the only full-service television stations in their respective communities of license. Fisher thus asserts that both KEPR-TV and KLEW-TV meet the requirement that a satellite television station provide service to an underserved area. 21. Fisher further argues that no alternative operator could purchase and operate KEPR-TV or KLEW-TV as an economically viable full-service station. Fisher explains that KIMA-TV provides both KEPR-TV and KLEW-TV with network and syndicated programming which neither satellite could generate sufficient revenues to purchase on its own. In addition, Fisher states that the Pasco- Richland-Kennewick Tri-Cities area is separated from Yakima and much of northwest Washington by mountainous terrain, which limits those communities' sources of over-the-air network programming to the satellite operations of the Yakima network affiliates. Moreover, the Yakima network affiliates have exclusive DMA-wide licensing rights for network and syndicated programming pursuant to long-standing agreements, making it impossible for a stand-alone station in the Tri-Cities area to gain access to network programming or the most popular syndicated programming. Fisher states that KLEW-TV also is geographically isolated from the other commercial stations in its DMA, which are all licensed to Spokane, and no other station provides over-the-air service to Lewiston. Fisher contends that neither KEPR-TV nor KLEW-TV, operating as stand- alone stations, could gain access to network and the most popular syndicated programming. This limitation, Fisher argues, would cause declining viewership and, thus, advertising sales, leading to further audience losses due to decreased program purchasing power and the inability to originate local programming. 22. Finally, Fisher contends that ad hoc analysis supports grant of the continuing satellite waiver requests for KEPR-TV and KLEW-TV. Fisher explains that the parent-satellite operation of KIMA-TV, KEPR-TV, and KLEW-TV provides residents of Pasco and Lewiston with network and syndicated programming that is not available from any other source. Fisher reiterates that television viewers in Pasco and Lewiston can only receive over-the-air CBS programming by means of these satellite stations, and notes that the Commission's Satellite Policy Statement expressly listed the sole availability of network service through a satellite as a "compelling circumstance" justifying approval of proposed satellite operation even without the benefit of the presumptive satellite exemption. 6 FCC Rcd at 4214. Fisher contends that the satellite arrangement has enabled KEPR-TV and KLEW- TV to produce local programming, including local news, that those stations could not originate absent their parent-satellite relationship with KIMA-TV. 23. Frank J. Higney also provides a broker's opinion in support of Fisher's contention that neither KEPR-TV nor KLEW-TV is economically viable as a stand-alone, full-service television station. Mr. Higney confirms that the Yakima-Pasco-Richland-Kennewick DMA is a geographically expansive market divided into two distinct metro areas: the Yakima area and the Pasco-Richland- Kennewick Tri-Cities area. He concurs that the market's geographic area and terrain preclude over- the-air coverage of the entire DMA by the signal of any single television station. He notes that the four major network affiliates, including KIMA-TV, are all licensed to Yakima, and each of those stations other than the Fox affiliate operates a satellite station in either Pasco, Richland, or Kennewick, in an effort to serve portions of the market that the primary affiliate could not otherwise reach. Mr. Higney states that, in his experience, even in the smallest television markets (those ranked 190th or smaller), the costs of operating a full-service television station are not substantially less than in larger markets due to the fixed nature of the costs involved in the business. He therefore believes that KEPR-TV, if operated on a stand-alone basis, could not generate revenues sufficient to cover the fixed costs of a full-service television station. Moreover, he predicts that, as a stand-alone operation, KEPR-TV would be severely handicapped in its attempts to compete for television advertising revenues in the Tri-Cities area, because KEPR's fixed costs would be much higher than those of its competitors, all of which are satellites of network affiliates licensed to Yakima. Mr. Higney therefore concludes that there is no reasonable likelihood of finding an alternative operator willing and able to operate KEPR-TV as a financially viable full-service, stand-alone facility. 24. Similarly, Mr. Higney believes that it would not be feasible to operate KLEW-TV, licensed to Lewiston, Idaho, and part of the Spokane DMA, as a financially viable full-service, stand- alone television station. He notes that KLEW-TV, with an average weekly circulation of approximately 28,000 of the 375,000 television households within the DMA, does not place a Grade B signal over Spokane, where all of the other commercial television stations in the DMA are located. Because the population covered by KLEW-TV's signal is minimal, he believes that the station would have no realistic chance of acquiring an affiliation with any of the established broadcast networks. In addition, he doubts that ABC, CBS, NBC, or Fox, each of which already has an affiliate in the DMA, would be willing to grant a second affiliation in the market to a marginal stand-alone station. Finally, he determines that the advertising revenues that could be generated in the small communities served by KLEW-TV would not be sufficient to cover the costs of outfitting, staffing, and purchasing programming at Spokane program rates. Mr. Higney therefore concludes that there is no reasonable likelihood of locating an alternative operator to operate KLEW-TV as a financially viable full-service, stand-alone facility. 25. Discussion. The information submitted by Fisher satisfies the first two criteria for a satellite exemption to the multiple ownership rules for all four satellite stations. There is no City Grade signal overlap between any satellite station and its parent, and all four satellites provide service to underserved areas. In addition, based on all of the information provided by Fisher, including the statements of Mr. Higney, we believe that Fisher has demonstrated the unlikelihood of finding an alternative buyer ready and able to operate any of its four satellite stations on a stand-alone basis. 26. Each satellite station's signal covers only a minor portion of the DMA, making it unlikely that the station could obtain network affiliation as a stand-alone operation. The improbability of gaining access to network programming or popular syndicated programming, coupled with the relatively small number of households reached by the signals of each of the four stations, make it unlikely than any of the satellite stations could generate advertising revenues sufficient for a financially viable stand-alone, full-service television station. We note that KLEW-TV is the only commercial television station licensed to Lewiston, Idaho, while KCBY-TV and KEPR-TV are licensed to communities (Coos Bay Oregon, and Pasco, Washington, respectively) where the only other commercial television stations are satellites of stations affiliated with other networks. See John E. Hayes and William C. Zortman, 13 FCC Rcd 9407 (Mass Med. Bur. 1998). The fourth satellite station, KPIC(TV), is licensed to Roseburg, Oregon. Although a stand-alone station, KTVC(TV), is licensed to Roseburg, Fisher has persuaded us that it would be unlikely to locate an alternative buyer willing and able to operate KPIC(TV) as a financially viable stand-alone, full-service station. We have determined that KPIC(TV) already maintains its own studio, and Fisher has committed to maintaining that studio following the proposed transaction. This commitment is consistent with the Commission's general policy regarding a satellite station licensed to the same community as a stand- alone television station. See KMTR, Inc., 7 FCC Rcd 1025 (1992). 27. The improbability of operating KCBY-TV, KPIC(TV), KEPR-TV, or KLEW-TV as a financially viable stand-alone, full-service television station demonstrates the unlikelihood of locating an alternative buyer to operate any of the stations on such basis. In addition, maintenance of the existing parent-satellite relationships will ensure the continued off-air availability of CBS network service in the satellite stations' respective communities. In view of the showing presented above, we find that the continued operation of KCBY-TV, KPIC(TV), KEPR-TV, and KLEW-TV as satellites of their respective parent stations, KVAL-TV and KIMA-TV, would be in the public interest. Among the matters being reexamined in the Commission's broadcast television ownership policies in the Television Ownership Second Further Notice is the continued exemption of satellite stations from broadcast ownership restrictions. Accordingly, we will condition the grant of these satellite proposals on whatever action is taken in that proceeding. Conclusion 28. Having determined that the applicants are qualified in all respects, we conclude that the grant of these applications would serve the public interest, convenience, and necessity. 29. Accordingly, IT IS ORDERED, that the request for a conditional waiver of Section 73.3555(b) IS GRANTED to permit the common ownership of KATU(TV) and KVAL-TV, 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, Fisher 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. 30. IT IS FURTHER ORDERED, that the requests for operation of KCBY-TV, Coos Bay, Oregon, KPIC(TV), Roseburg, Oregon, KEPR-TV, Pasco, Washington, and KLEW-TV, Lewiston, Idaho, pursuant to the satellite exemption of Note 5 to Section 73.3555, 47 C.F.R.  73.3555, ARE GRANTED, subject to the outcome of the Commission's pending television ownership rulemaking in MM Docket Nos. 91-221 and 87-8. 31. IT IS FURTHER ORDERED, that the above-captioned applications for assignment of license and transfer of control ARE GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau