April 27, 1995

Re: WLUK-TV, Green Bay, Wisconsin and W40AN, Escanaba, Michigan: Applications for Assignment of License (MM-137-95)

Fox Television Stations would remain within our current ownership ceilings even if ownership of this station is attributed to Fox. For that reason I support granting this license to SF Green Bay License Subsidiary. I disagree, however, with the treatment of the ownership attribution issue, even though it is expressly conditioned upon the outcome of our Attribution rulemaking proceeding.

This Commission has a long history of attributing ownership where, as here, an aggregation of separately permissible tenets of ownership, taken together, reasonably leads to a conclusion that influence can be exercised over the affairs of the licensee. We now are in the process of amplifying and clarifying the conditions under which the Commission will attribute ownership in our Attribution rulemaking proceeding. The record is open in this proceeding, and I look forward to considering these issues later this year, but this case should have been decided under existing rules and precedent.

The facts presented in this case go significantly beyond those presented in the nearest factual situation in which the Commission has declined to attribute ownership. The issue here is the ability to influence, not control. As today's order explicitly recognizes, the question of what aggregation of relationships creates an attributable interest is very difficult, and best answered with the benefit of a full and carefully considered rulemaking record.

 In this case, considering the entire web of relationships, it stretches the imagination to believe that the potential for influence does not exist. Among the salient factors are:

• 45 percent of the cash equity investment in the licensee;

• 25 percent nonvoting stock with an option to increase shares up to 50 percent;

• option (at a later time) to convert nonvoting to voting stock;

• negotiation of the move of a key employee to the licensee as President and member of the three-member board, with broad authority over the station's business affairs and operations and regular involvement with his former employer regarding pro- gramming matters;

• the placement of an additional employee in a decision-making capacity at the licensee;

• 10-year contractual affiliation of the station; and

• approval rights over certain major decisions of the licensee.

Any one aspect of these relationships, standing alone, would not result in attribution of ownership under our rules. Surely the existence of all of these together provides a very different picture. In circumstances such as these, the whole is greater than the sum of its parts. And yet, anomalously, we are not finding attribution here, but would do so in another context if the sole relationship were ownership of five percent of the licensee's voting stock!

In our Attribution rulemaking we will be addressing these issues. In the interim, I do not wish to delay processing of license transactions. As a banker, I was involved in numerous broadcast ownership transactions, and I recognize the need for deals to move forward. But I also believe we need to apply an awareness of business realities to the transactions we review.

I am concerned about the step we are taking in this item. I fear it may be prejudicial to the outcome of the Attribution proceeding to expand our existing caselaw by permitting such close ties without attributing ownership. Perhaps more important, I think that it is unfair to all of those broadcasters who are complying with our rules for us to expand them here. A further danger is that some may, erroneously, regard today's decision as an invitation to push the envelope still further.

Pending completion of our Attribution proceeding, I believe that we should stay within the boundaries of our existing rules and precedent. Applying these rules fairly is the best way to ensure the continued existence of strong competitors and diverse voices in our broadcasting community.