Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) GOCOM Communications, L.L.C. ) (Transferor) ) ) and ) File Nos. BTCCT-990517IA, IC, IE-IG, II-IK ) BTCTTV-990517IB ) BTCTT-990517ID ) ) Grapevine Television, L.L.C. ) (Transferee) ) ) For Consent to the Transfer of Control of) the Following Broadcast Licenses: ) KMID(TV), Midland, Texas ) Facility ID Nos. 35131 KNVN(TV), Chico, California ) 33745 KSPR(TV), Springfield, Missouri ) 35630 KTVE(TV), Eldorado, Arkansas ) 35692 WFXI(TV), Morehead City, North Carolina ) 37982 WYDO(TV), Greenville, North Carolina ) 35582 WGXA(TV), Macon, Georgia ) 58262 WKBN(TV), Youngstown, Ohio ) 75153 K12FM, Fort Stockton, Texas ) 35132 K18AO, Oroville/Paradise, California ) 33744 ) and ) ) Grapevine Television, L.L.C. ) (Transferor) ) ) and ) File Nos. BTCCT-990820IM ) BTCTT-990820IN ) Grapevine Broadcasting of Chico, L.L.C.) (Transferee) ) ) For Consent to the Transfer of Control of) the Following Broadcast Licenses: ) KNVN(TV), Chico, California ) Facility ID Nos. 33745 K18AO, Oroville/Paradise, California ) 33744 MEMORANDUM OPINION AND ORDER Adopted: October 29, 1999 Released: November 1, 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 unopposed applications seeking consent to transfer control of GOCOM Communications, L.L.C. (GOCOM), the parent of the licensees of the above-captioned television and television translator stations, from GOCOM's members to Grapevine Television, L.L.C. (Grapevine). Also before the Commission are applications to transfer control of the licensee of KNVN(TV), Channel 24 (NBC), Chico, California and television translator station K18AO, Oroville, California to Grapevine Broadcasting of Chico, L.L.C. (BTCCT-990820IM and BTCTT- 990820IN). 2. After the proposed transfer of control, the Grade B contours of stations directly or indirectly controlled by Grapevine will overlap with certain of the GOCOM stations in a manner conflicting with the Commission's existing television duopoly rule, Section 73.3555(b), which proscribes common ownership of stations whose Grade B contours overlap. Specifically, the Grade B contours of WALB-TV, Channel 10 (NBC), Albany, Georgia and WGXA(TV) overlap; the Grade B contours of KODE-TV, Channel 12 (ABC), Joplin, Missouri and KSPR(TV) overlap; and the Grade B contour of WWAY(TV), Channel 3 (ABC), Wilmington, North Carolina overlaps with the Grade B contours of WFXI(TV) and WYDO(TV). As a result, Grapevine has requested waivers of the Commission's television duopoly rule. In addition, GOCOM operates station WYDO(TV) as a satellite of station WFXI-TV and Grapevine requests Commission approval to continue this satellite operation, pursuant to Note 5 of Section 73.3555 of the Commission's rules. DUOPOLY WAIVERS 3. We shall first address Grapevine's requests for waivers of the Commission's television duopoly rule. Grapevine notes that the Commission adopted an interim policy applicable to requests for waiver of that rule. See 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 stated that it would be inclined to grant waivers of the rule, conditioned on the outcome of the rulemaking proceeding, provided that 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. Grapevine has submitted an engineering exhibit which shows that in each of the four potential duopolies referenced above, the stations are in separate DMAs and there is no Grade A overlap. Therefore, for each case of common ownership, Grapevine has requested conditional waiver of the duopoly rule. Discussion 4. At the time the proposed transfer of control applications were filed, the Commission did follow, as claimed by Grapevine, an interim policy that permitted conditional waiver of the duopoly rule, subject to the outcome of the then-pending local television ownership proceeding, provided that the commonly-owned stations were in separate DMAs with no Grade A overlap. 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 demonstrated compliance of Grapevine's ownership combinations with the new rules, it is no longer appropriate to follow the interim policy in disposing of Grapevine's waiver requests. Rather, we believe that we should afford Grapevine 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 Grapevine temporary waivers of the local television ownership rule for each of the four referenced combinations, subject to compliance with the requirements of the ownership order when those requirements come into effect. CONTINUED SATELLITE AUTHORITY 5. Grapevine also seeks authority to continue operating station WYDO(TV), Channel 14 (FOX), Greenville, North Carolina, as a satellite of station WFXI-TV, Channel 8 (FOX), Morehead City, North Carolina after the proposed transfer of control. In Television Satellite Stations, 6 FCC Rcd 4212, 4215 (1991), the Commission required all applicants seeking to transfer existing satellite stations and to continue those stations' satellite operation to demonstrate that the stations meet our satellite policy at the time of transfer of control. Pursuant to the Commission's satellite policy, an applicant is entitled to a presumption that its proposed satellite operation is in the public interest if it meets three criteria: (1) no City Grade contour overlap exists between the parent and the satellite; (2) the satellite would provide service to an underserved area; and (3) no alternative operator is ready and able either 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, we will evaluate the proposal on an ad hoc basis to determine whether other compelling circumstances warrant grant of the application. Id. at 4214. The satellite operation here fails to meet one of the three presumptive criteria. Nevertheless, as detailed below, we find compelling circumstances exist that warrant continued satellite authority. Discussion 6. In July 1997, the Commission approved satellite status for these stations not withstanding the fact that GOCOM could not establish that the areas served were underserved or that efforts to sell to anyone other than GOCOM had been made. KS Family Television, Inc., 12 FCC Rcd 11562. In so doing, we relied heavily on the demographics of WYDO(TV)'s market, the Greenville-New Bern- Washington DMA (ranked 105), the coverage characteristics of WYDO(TV)'s VHF network affiliate competitors, and the inability of WYDO(TV) to cover and adequately serve a substantial portion of the area and population within the DMA. In addition, analysis and statements from consulting and media brokerage firms buttressed GOCOM arguments that WYDO(TV) would be unlikely to survive as a stand-alone, full-service station and that an alternative operator would be unwilling to purchase and operate the station as such. In this application, Grapevine submits a recent opinion from the same financial consulting firm which reaffirms the previous analysis and adds that "even under the most optimistic set of assumptions, there is no reasonable likelihood that WYDO will be able to sustain itself financially as a stand-alone, full-service station." Further, Grapevine notes that because of combined operations and increased market coverage, WFXI(TV) and WYDO(TV) are able to co- produce a local evening newscast with the CBS affiliate, thus enabling WYDO(TV) to air a newscast with a Greenville emphasis. Based on all of the information provided, we believe that Grapevine has adequately demonstrated that the continued operation of WYDO(TV) as a satellite of WFXI(TV) is warranted and is consistent with our current satellite policy. CONCLUSION 7. Having found the applicants qualified in all respects, we conclude that grant of the applications to transfer control of GOCOM from its members to Grapevine will serve the public interest. We further conclude that grant of the applications to transfer control of KNVN(TV) from Grapevine to Grapevine Broadcasting of Chico, L.L.C. will also serve the public interest. 8. Accordingly, IT IS ORDERED, That the requests for temporary waivers of the duopoly rule, Section 73.3555(b) of the Commissions Rules, to permit common ownership of stations WALB-TV, Albany, Georgia and WGXA(TV), Macon, Georgia; stations KODE-TV, Joplin, Missouri and KSPR(TV), Springfield, Missouri; and stations WWAY(TV), Wilmington, North Carolina and WFXI(TV), Morehead City, North Carolina ARE GRANTED, subject to Grapevine's compliance with the requirements and procedures set forth in review of the Commissions 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 continued operation of WYDO(TV), Greenville, North Carolina as a satellite of WFXI(TV), Morehead City, North Carolina, pursuant to the satellite exception to Section 73.3555 of the Commission's Rules, IS GRANTED. 10. IT IS FURTHER ORDERED, That the applications for consent to transfer control of GOCOM Communications, L.L.C. from its members to Grapevine Television, L.L.C., File Nos. BTCCT-990517IA, IC, IE-IG, II-IK, BTCTTV-990517IB, and BTCTT-990517ID; and the applications for consent to transfer control of the licensee of KNVN(TV), Chico, California and K18AO, Oroville, California from Grapevine Television, L.L.C. to Grapevine Broadcasting of Chico, L.L.C., File Nos. BTCCT-990820IM and BTCTT-990820IN, ARE GRANTED, subject to the condition that the parties consummate each of the above-noted transfers of control simultaneously. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau