Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) MAX TELEVISION COMPANY ) (Transferor) ) ) and ) File Nos. BTCCT-980108IB ) BTCCT-980108IC SINCLAIR COMMUNICATIONS, INC. ) BTCTTL-980108ID (Transferee) ) ) For Consent to the Transfer of Control of) Stations ) ) WEMT(TV), Greeneville, Tennessee ) WKEF(TV), Dayton, Ohio ) W43BO, Marion, Virginia ) MEMORANDUM OPINION AND ORDER Adopted: August 24, 1999 Released: August 26, 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 applications for transfer of control of WEMT(TV), Channel 39 (FOX), Greeneville, Tennessee ("WEMT"), WKEF(TV), Channel 22 (NBC), Dayton, Ohio ("WKEF"), and low power television station W43BO, Channel 43, Marion, Virginia, from Max Television Company ("MTC") to Sinclair Communications, Inc. ("Sinclair"). 2. Sinclair indirectly controls the licensee of television station WLOS(TV), Channel 13 (ABC), Asheville, North Carolina ("WLOS"), whose Grade A and Grade B contours, respectively, overlap those of WEMT, one of the stations to be acquired herein. Sinclair also indirectly controls the licensee of WSTR-TV, Channel 64 (WBN), Cincinnati, Ohio ("WSTR"). The predicted Grade A and Grade B contours of WSTR, respectively, overlap those of WKEF, the other full-service television station being acquired by Sinclair. Additionally, Sinclair indirectly controls the licensee of WSYX(TV), Channel 6 (ABC), Columbus, Ohio ("WSYX"), whose predicted Grade A and Grade B contours, respectively, also overlap those of WKEF. Finally, Sinclair indirectly controls the licensee of WTTV(TV), Bloomington, Indiana ("WTTV"), whose Grade B contour intersects that of WKEF. Each of these combinations would violate the Commission's existing television local ownership (or duopoly) rule, which prohibits the common ownership of television stations whose Grade B contours overlap. 47 C.F.R.  73.3555(b). To resolve these potential violations, Sinclair seeks various waivers of our ownership rules. 3. First, Sinclair notes that in the Second Further Notice of Proposed Rule Making in MM Docket No. 91-221 (Review of the Commission's Regulations Governing Television Broadcasting), 11 FCC Rcd 21655 (1996) ("Television Ownership Second Further Notice"), the Commission adopted an interim policy applicable to waivers of the television duopoly rule. The policy stated that the Commission would be inclined to grant waivers of the rule, conditioned on the outcome of the rulemaking proceeding, only where the television stations to be commonly owned were located in separate Designated Market Areas ("DMAs") and there was no Grade A contour overlap between them. Sinclair therefore seeks a conditional waiver of the duopoly rule with respect to the WTTV/WKEF combination, but seeks only nine-month, temporary waivers of the rule to permit it time to divest one of the stations in each of the three other combinations. Sinclair provided a complete showing under our existing precedent to justify grant of these temporary waivers of the duopoly rule. 4. In "Comments" filed in connection with the WEMT/WLOS waiver request, Holston Valley Broadcasting Corporation ("Holston") maintains that Sinclair seeks to create a "daisy chain" of three commonly-controlled television stations with extensive coverage overlap, resulting in "a potentially dangerous threat to competition" in the Bristol, Virginia-Kingsport-Johnson City, Tennessee DMA ("Tri-Cities DMA"), to which WEMT (but not WLOS) is licensed. In this regard, Holston notes that the predicted City Grade contour of WEMT encompasses Asheville, North Carolina, the community of license of WLOS, and the predicted City Grade contour of WLOS comes very close to Greeneville, Tennessee, the community of license of WEMT. Additionally, says Holston, WEMT's transmitter site is closer to Asheville (located in the Greenville-Spartanburg, South Carolina-Asheville, North Carolina-Anderson, South Carolina DMA ("Asheville DMA")) than it is to Kingsport and Johnson City, Tennessee, two of the three principal communities in the Tri-Cities DMA. Holston also contends that a time brokerage agreement with a subsidiary of Glencairn, Ltd., gives Sinclair effective control over a third television station in the market, WFBC-TV, Anderson, South Carolina ("WFBC"), whose Grade A and City Grade contours overlap those of WLOS. Holston believes that there is already cause for concern regarding media concentration in the Tri-Cities DMA, because WJHL-TV, Johnson City, Tennessee, and a daily newspaper published in nearby Bristol are both controlled by a single entity, Media General, Inc. Finally, Holston maintains that Sinclair's acquisition of WEMT will adversely affect the ability of other stations in the market to acquire syndicated television programming. Specifically, Holston asserts that at a recent meeting of the National Association of Television Program Executives, several syndicators stated that either Sinclair had "a hold" on specific program products, or no decision can be made with respect to certain shows until Sinclair determines whether it wants them for WEMT. Discussion 5. As Sinclair has noted, at the time the subject applications were filed, we followed an interim policy that permitted conditional waiver of the duopoly rule, subject to the outcome of the then-pending local television ownership proceeding, only where the stations to be commonly owned were licensed to separate DMAs and there was no Grade A overlap between them. Television Ownership Second Further Notice, 11 FCC Rcd at 21681. On August 5, 1999, however, the Commission adopted a Report and Order in the local television ownership proceeding, revising the duopoly rule to permit common ownership of two television stations located in separate DMAs regardless of contour overlap between them. Review of the Commission's Regulations Governing Television Broadcasting, Report and Order, MM Docket No. 91-221, FCC 99-209 (released August 6, 1999) ("Report and Order"). The proposed transaction appears to comply with the new rules as the stations in each combination are located in separate DMAs. These rules, however, are not yet in effect. Nonetheless, given the Commission's decision and the apparent compliance of Sinclair's ownership combinations with the new rules, it is no longer appropriate to follow the interim policy in disposing of Sinclair's waiver requests. Rather, we believe that we should afford Sinclair a temporary waiver to accommodate its merger transaction and the opportunity to make a showing, if it so elects, that it could retain the stations under our new rules once they become effective. Accordingly, we will grant Sinclair temporary waivers of the local television ownership rule for each of the four referenced combinations, subject to compliance with the requirements of the ownership and attribution orders when those requirements come into effect. 6. With respect to the Comments filed by Holston, we find no basis for Holston's assertion that Sinclair's ownership of WEMT and WLOS and its LMA with WFBC will give Sinclair undue influence in the Tri-Cities DMA. As a threshold matter, we note that Holston overstates the extent of the overlap between WEMT and WLOS because it does not take into account the mountainous terrain which separates the two stations. In addition, WLOS and WFBC are licensed to communities in the Asheville DMA, not the Tri-Cities DMA. While Holston asserts that Sinclair "effectively controls" WFBC, it has not argued that the LMA between Sinclair and the licensee of WFBC fails to comply with the Commission's rules and policies. Furthermore, Holston's hearsay allegations regarding Sinclair's influence over syndicated programming in the market, even if true, fall far short of demonstrating that Sinclair dominates the market to such an extent so as to provide a basis for denying the temporary waiver request. In any event, under the rules and policies just adopted by the Commission in its local television ownership and attribution proceedings, same-market LMAs will be attributable ownership interests and parties to such agreements, depending on when the LMA was entered, will be either grandfathered or afforded a two-year term to bring their agreements into compliance with the new ownership rules. In either case, Sinclair's LMA with WFBC does not raise a bar to this transaction. CONCLUSION 7. Having determined that the applicants are qualified in all respects, we find that grant of the above-captioned transfer of control applications will serve the public interest, convenience and necessity. 8. Accordingly, IT IS ORDERED, That the request for a temporary waiver of the duopoly rule, Section 73.3555(b), to permit common ownership of WEMT(TV), Greeneville, Tennessee and WLOS(TV), Asheville, North Carolina, IS GRANTED, subject to Sinclair's compliance with the requirements and procedures set forth in Review of the Commission's Regulations Governing Television Broadcasting, Report and Order, MM Docket No. 91-221, FCC 99-209 (released August 6, 1999). 9. IT IS FURTHER ORDERED, That the request for a temporary waiver of the duopoly rule, Section 73.3555(b), to permit common ownership of WKEF(TV), Dayton, Ohio and WSTR-TV, Cincinnati, Ohio, IS GRANTED, subject to Sinclair's compliance with the requirements and procedures set forth in Review of the Commission's Regulations Governing Television Broadcasting, Report and Order, MM Docket No. 91-221, FCC 99-209 (released August 6, 1999). 10. IT IS FURTHER ORDERED, That the request for a temporary waiver of the duopoly rule, Section 73.3555(b), to permit common ownership of WKEF(TV), Dayton, Ohio and WSYX(TV), Columbus, Ohio, IS GRANTED, subject to Sinclair's compliance with the requirements and procedures set forth in Review of the Commission's Regulations Governing Television Broadcasting, Report and Order, MM Docket No. 91-221, FCC 99-209 (released August 6, 1999). 11. IT IS FURTHER ORDERED, That the request for a temporary waiver of Section 73.3555(b) of the Commission's rules to permit the common ownership by Sinclair of television stations WKEF(TV), Dayton, Ohio and WTTV(TV), Bloomington, Indiana, IS GRANTED, subject to Sinclair's compliance with the requirements and procedures set forth in Review of the Commission's Regulations Governing Television Broadcasting, Report and Order, MM Docket No. 91-221, FCC 99-209 (released August 6, 1999). 12. IT IS FURTHER ORDERED, That the applications to transfer control of WEMT(TV), Greeneville, Tennessee, WKEF(TV), Dayton, Ohio, and W43BO, Marion, Virginia, from Max Television Company to Sinclair Communications, Inc. (File Nos. BTCCT/BTCTTL-980108IB-ID), ARE GRANTED. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau