******************************************************** 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 Application of ) ) WOODS TELEVISION COMPANY, L.L.C.) (Assignor) ) ) and ) File No. BALCT-981218IC ) WAITT LICENSE COMPANY OF ) ALABAMA, L.L.C. ) (Assignee) ) ) For Consent to the Assignment of the ) License for Station WDFX-TV, ) Ozark, Alabama ) MEMORANDUM OPINION AND ORDER Adopted: May 26, 1999 Released: May 28, 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 the above-captioned, uncontested application seeking consent to assign the license for station WDFX-TV (Channel 34, Fox), Ozark, Alabama from Woods Television Company, L.L.C. (Woods Television) to Waitt License Company of Alabama, L.L.C., whose sole member is Waitt Broadcasting, Inc. (Waitt). 2. Waitt wholly owns the licensee of station WPGX(TV) (Ch. 28, Fox), Panama City, Florida. Because the predicted Grade B contours of stations WDFX-TV and WPGX(TV) overlap, Waitt requests a permanent waiver of the Commission's duopoly rule, 47 C.F.R. Section 73.3555(b), to permit its common ownership of the two stations, or, in the alternative, a temporary waiver conditioned upon the outcome of the Commission's 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, 11 FCC Rcd 21655 (1996) (Television Ownership Second Further Notice). According to Waitt, grant of the requested duopoly waiver would be consistent with Commission precedent and would serve the public interest. For the reasons discussed below, we will grant Waitt's request for a conditional duopoly waiver, as well as the proposed assignment application. DUOPOLY WAIVER 3. Waiver Showing. In support of its duopoly waiver request, Waitt submits an engineering exhibit which shows that no Grade A overlap exists between stations WDFX-TV and WPGX(TV), which are located in cities 80 miles apart and in separate Designated Market Areas (DMA), with station WDFX-TV in the Dothan, Alabama DMA, ranked 173rd in size, and station WPGX(TV) in the Panama City, Florida DMA, ranked 157th in size. Waitt also describes the predicted Grade B contour overlap between stations WDFX-TV and WPGX(TV) as encompassing 873 square kilometers and 11,100 people. This represents 9.9 percent of the area and 4.9 percent of the population within station WDFX-TV's predicted Grade B contour, and 8.7 percent of the area and 5.4 percent of the population within station WPGX(TV)'s Grade B contour. Waitt contends that this degree of overlap falls well within the range of previous duopoly waiver cases approved by the Commission. 4. As for the number of media voices in the overlap area, Waitt indicates that, excluding stations WDFX-TV and WPGX(TV), seven full-service television stations (five commercial and two non-commercial) provide service to some portion of the Grade B overlap area. Further, Waitt claims that the overlap area receives service from a minimum of four and a maximum of six of those television stations. The overlap area also receives radio service from 15 AM radio stations and 19 FM radio stations. According to Waitt, the Dothan and Panama City DMAs contain numerous other media outlets available to viewers. More specifically, Waitt states that two other television stations, both commercial and network-affiliated, and 27 radio stations, including 23 commercial stations, are licensed to communities within the Dothan DMA, and five other television stations, including four commercial stations, and 20 radio stations, including 16 commercial stations, are licensed to communities within the Panama City DMA. Finally, Waitt asserts, the Dothan DMA is served by two daily and three weekly newspapers, the Panama City DMA is served by one daily newspaper and both DMAs have a cable penetration rate of 68 percent. 5. With respect to the Commission's concerns regarding the effect of the combination on competition, Waitt notes that Ozark and Panama City, the communities of license of stations WDFX-TV and WPGX(TV), respectively, are in separate and distinct markets, and contends that "the number of media voices in the overlap area is more than sufficient to ensure adequate competition and diversity of programming." Waitt anticipates, moreover, that the two stations will maintain separate sales staffs and programming departments. Based on all of these considerations, Waitt concludes that grant of the instant assignment application will not undermine the fundamental policies served by the duopoly rule. 6. Discussion. In adopting the duopoly rule's fixed standard of a prohibited 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 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 that 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 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." 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. 9. Given the clearly articulated policy in the Television Ownership Second Further Notice, we do not believe that an unconditional grant of Waitt's duopoly waiver is appropriate. See WHOA-TV, Inc., 11 FCC Rcd 20041, 20046-47, 20051 (1996). However, 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 stations WDFX-TV and WPGX(TV) 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 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 Waitt coming into compliance with the outcome of the pending broadcast 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 will be closely scrutinized. CONCLUSION 10. Having determined that the applicants are qualified in all respects, we find that grant of the applications to assign the license of television station WDFX-TV, Ozark, Alabama from Woods Television Company, L.L.C. to Waitt License Company of Alabama, L.L.C. will serve the public interest, convenience and necessity. 11. Accordingly, IT IS ORDERED, That the request for a permanent waiver of the television duopoly rule, Section 73.3555(b) of the Commission's rules, to permit the common ownership of television stations WDFX-TV, Ozark, Alabama and WPGX(TV), Panama City, Florida, IS DENIED. 12. 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 WDFX-TV, Ozark, Alabama and WPGX(TV), Panama City, Florida, 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 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 as would be necessary for it to come into compliance with the rules as provided in the final order. 13. IT IS FURTHER ORDERED, That the application for consent to the assignment of license for station WDFX-TV, Ozark, Alabama from Woods Television Company, L.L.C. to Waitt License Company of Alabama, L.L.C., File No. BALCT-981218IC, IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau