******************************************************** 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 ) Brawley Broadcasting Co. and ) KAMP, Inc. ) (Assignors) ) ) and ) File Nos. BALH-980225GJ, ) BAPLH-980225GK, and BAL-980225EA Entravision Holdings., L.L.C.)(Assignee) ) ) For Assignment of Licenses of ) Stations KWST(FM), Brawley, California) KMXX(FM), Imperial, California ) KAMP(AM), El Centro, California ) ) MEMORANDUM OPINION AND ORDER Adopted: September 28, 1998 Released: October 21, 1998 By the Commission: Commissioner Tristani dissenting. 1. The Commission has before it: (1) the above-captioned applications for assignment of licenses of KWST(FM), Brawley, California and KMXX(FM), Imperial, California, from Brawley Broadcasting Company ("Brawley Broadcasting") to Entravision Holdings, L.L.C. ("Entravision"); (2) the above-captioned application for assignment of license of KAMP(AM), El Centro, California from KAMP, Inc. to Entravision; (3) a related request for a permanent waiver of the Commission's one-to-a-market rule, which restricts common radio and television station ownership in the same market; (4) an informal objection to the assignment applications filed by Reverend Jerome Wilkins, President of the California Black Caucus, ("Wilkins") on August 10, 1998; and (5) an opposition to the informal objection filed by Entravision on September 4, 1998. 2. Entravision is a California limited liability company, and is the permittee and licensee of various full and low power television and radio stations in California, Colorado, Nevada, and Texas. Entravision is the permittee of operating VHF television station KVYE(TV), channel 7, El Centro, California. Grant of the instant assignment applications would create a new radio-television combination because the 1 mV/m contour of KWST(FM), the 1 mV/m contours for both the licensed and authorized modified facilities of KMXX(FM), and the daytime 2 mV/m contour of KAMP(AM), each encompass the entire city of license of KVYE(TV) in El Centro, California. 3. In the informal objection, Wilkins asserts that Entravision should not be permitted to purchase the three radio stations which together with KVYE(TV) ". . . comes pretty close to a monopoly." Wilkins asserts further that an African-American should be allowed to make an offer to purchase at least one of the radio stations. Moreover, Wilkins contends that the interests of the English speaking and African-American communities will go unserved by the Spanish language programming of the stations. Wilkins notes that KMXX(FM) is already a Spanish language station and alleges that Entravision plans to change the format of the other two radio stations to Spanish language programming. 4. In response, Entravision argues that its proposed acquisition of the three radio stations is consistent with the Commission's multiple ownership rules and notes further that Wilkins failed to provide any evidence that the sellers were able to monopolize the radio market with their ownership of the radio stations or that Entravision's proposed ownership would have a monopolistic effect. Moreover, Entravision asserts that it has demonstrated through its showing for a one-to-a-market waiver that the benefits of its proposed common ownership of the stations, to the market in general and to the Hispanic community in particular, outweigh any possible negative effects. As for Wilkins's assertion that an African-American buyer should be considered to serve the English-speaking and African-American communities, Entravision argues that the Commission is forbidden by Section 310(d) of the Communications Act of 1934, as amended, to compare the proposed assignee with any other entity not proposed in the assignment applications. Additionally, Entravision notes that it is Commission policy not to interfere with a licensee's programming decisions. For the reasons stated below, we deny the informal objection and grant the assignment applications and the related permanent waiver request. Request for Waiver of the One-to-a-Market Rule 5. Entravision bases its request on the one-to-a-market waiver standards adopted in the Second Report and Order in MM Docket No. 87-7, 4 FCC Rcd 1741 (1989) ("Second Report and Order"), recon. granted in part and denied in part, 4 FCC Rcd 6489 (1989) ("Second Report and Order Recon."). Under these criteria, the Commission presumptively favors waiver requests involving station combinations serving the top 25 markets where there are at least 30 separately owned, operated, and controlled broadcast licensees or "voices" after the proposed combination ("top 25 market/30 voice standard"). The Commission also favors waiver requests involving "failed" broadcast stations, that is, stations that have not been operating for a substantial period of time or that are in bankruptcy proceedings. Otherwise, the requests must be evaluated under a more rigorous case-by-case approach. See 47 C.F.R.  73.3555, note 7. 6. We shall review Entravision's waiver request under the case-by-case standard because Yuma, Arizona-El Centro, California ("Yuma-El Centro") is the 176th largest Designated Market Area ("DMA") in the country and there is no claim that any of the stations, KWST(FM), KMXX(FM) or KAMP(AM) is a "failed station," as defined by the Commission. Moreover, evaluation of the waiver request under the case-by- case standard is appropriate because the proposed transactions involve the common ownership of more than one same-service radio station with a television station. See Memorandum Opinion and Order, MM Docket 91-140, 7 FCC Rcd 6387, 6394 n. 40 (1992); see also Moosey Communications, Inc., 8 FCC Rcd 5247 (1993). Under the case-by-case standard, the Commission makes a public interest determination based upon the following five criteria: (1) the potential public service benefits that will arise from the joint operation of the facilities involved, such as economies of scale, cost savings and programming and service benefits; (2) the types of facilities involved; (3) the number of media outlets owned by the applicant in the relevant market; (4) the financial difficulties of the stations involved; and (5) the nature of the relevant market in light of the level of competition and diversity after joint operation is implemented. Second Report and Order, 4 FCC Rcd at 1753- 54. In enunciating the five factors to be considered under the case-by-case standard, the Commission noted that not all five factors must be satisfied in each case, but rather the overall consideration of these factors must weigh in favor of granting the waiver request. Second Report and Order Recon., 4 FCC Rcd at 6491. In support of its waiver request, Entravision submits a showing which addresses each of the five factors. 7. Benefits of Joint Operation. Entravision estimates direct annual savings of approximately $198,900 resulting from the sharing of technical facilities and consolidation of staffs. Specifically, these cost savings include $50,400 in rent and $8,500 in utilities from the use of one common operating facility and approximately $140,000 in employee salaries and benefits from the sharing of managerial, engineering, and administrative personnel. In addition, Entravision states that because it will be able to make group purchases of programming, goods and services, these stations will be operated at a lower cost structure than in their present condition. With these cost savings, Entravision states that the programming and community service efforts of the stations will be enhanced. KMXX(FM) is a Spanish language station while the other two radio stations KWST(FM) and KAMP(AM) broadcast in English. Entravision notes that the Yuma-El Centro Market is approximately 61% Hispanic and that its TV station KVYE, an affiliate of Univision, is the first full-time Spanish language television service to be provided in the market. By combining the resources of all the stations, Entravision intends to improve local news and weather services in general and to improve Spanish language news and weather broadcasts in particular. While KVYE(TV) includes local news stories in its early and late evening newscast, the radio stations currently provide limited news programming according to Entravision. Moreover, Entravision claims that the tropical storm effects of El Nino have shown the need to increase Spanish language weather reporting in the market. Entravision states that the combined operation of these stations will enable it to purchase meteorological services so that the stations can broadcast weather emergencies in English and Spanish. Other programming benefits for the radio stations include improvement of public affairs programming and development of public service announcements through the appointment of a community affairs manager who will work with the Hispanic community to ascertain topics for broadcast in Spanish and English. Lastly, Entravision intends to expand its participation in local community affairs by increasing its support for local civic organizations and by initiating an internship program for area youth. 8. Types of Facilities/Other Media Outlets. Among the radio stations Entravision seeks to acquire: (1) KWST(FM) is a Class B FM station licensed to operate on 94.5 MHz at 50 kW effective radiated power ("ERP") from an antenna at 61 meters height above average terrain ("HAAT"); (2) KMXX(FM) is a Class A FM station licensed to operate on 99.3 MHz but was granted a construction permit to increase its facilities to 6 kW ERP from an antenna at 92 meters HAAT; and (3) KAMP(AM) is a Class B AM station licensed to operate on 1430 kHZ at 1 kW ERP daytime and 0.036 kW ERP nighttime. Entravision states that the radio stations it proposes to acquire will compete with 10 other AM and 12 other FM stations. Entravision submits engineering exhibits which indicate that most of the competing radio stations have comparable if not superior technical facilities. With regard to TV stations, Entravision's KVYE(TV), a Univision affiliate, is a VHF station which is authorized to operate on channel 7 at 316 kW visual ERP from an antenna at 389 meters HAAT. Entravision indicates that there are three other VHF TV stations with superior facilities serving the market. Additionally, Entravision reports that its owner holds no other media interests in the Yuma-El Centro DMA, the 176th largest. 9. Economic Status. Entravision indicates that none of the stations in its proposed combination is experiencing financial difficulties. 10. Competition and Diversity in the Market. Entravision asserts that its acquisition of KMXX(FM), KWST(FM), and KAMP(AM) will not affect diversity and competition in the Yuma-El Centro Market. According to Entravision, there are 22 other radio stations serving the market that are owned by 14 separate owners. In addition to KVYE(TV), Entravision states that there are three other commercial VHF television stations and an outstanding construction permit for a new UHF TV station. Entravision also indicates that there is a variety of other media available. Specifically, Entravision reports that the market is served by two daily newspapers and has a 67% cable penetration rate. With regard to the impact on advertising shares in the market, Entravision notes that KVYE(TV) is a Spanish-language station that is specifically tailored to the Spanish speaking community rather than to the market in general. In light of this fact, Entravision asserts that the proposed combination consisting of an existing group of commonly owned radio stations with a struggling new Spanish-language TV station will not have a significant negative impact on broadcast advertising revenues. Discussion 11. At the outset, with respect to Wilkins's argument that an African-American should be allowed to purchase at least one of the radio stations, we agree with Entravision that the Commission is barred by Section 310(d) of the Communications Act of 1934, as amended, from considering a buyer other than the one proposed in the assignment application. See 47 U.S.C.  310(d); Dorothy J. Owens, Debtor-in-Possession, 5 FCC Rcd 6615 (1990) (denying petitions to deny assignment of license which raised inter alia the consideration of other potential buyers and granting permanent one-to-a-market waiver). 12. Radio Ownership Rules. We turn now to Entravision's compliance with our local radio ownership rules. 47 C.F.R. 73.3555(a)(1). Our analysis of the data Entravision has submitted indicates that the radio market formed by the mutually overlapping contours of its proposed commonly owned radio stations consists of 7 commercial radio stations. Under our rules, in a radio market with 14 or fewer commercial radio stations, a party may own, operate, or control up to 5 commercial radio stations, provided that no more than 3 of the commonly owned or operated stations are in the same radio service (AM or FM), and that the total number of stations owned, operated, or controlled does not constitute more than 50% of the total number of commercial radio stations in the market. Entravision's proposed ownership of two commercial FM radio stations and one commercial AM radio station in this market complies with the numerical local ownership cap for radio stations. Moreover, our review of the record in this case reveals no other circumstances that would preclude grant of the applications under the radio ownership rules. We conclude that, with respect to local radio ownership, Entravision's acquisition of KAMP(AM), KMXX(FM), and KWST(FM) would serve the public interest. 13. One-to-a-Market Waiver. In evaluating a request for a permanent waiver of the one-to-a-market rule, the Commission's goal "is to permit the public to benefit from such efficiencies of operation as may be achieved through the use of common facilities and staff, consistent with the maintenance of diversity and vigorous competition within the market areas involved." Second Report and Order Recon., 4 FCC Rcd at 6491. The Commission has recognized that "[i]n smaller markets, where competition is usually more limited, of particular importance would be demonstrated financial difficulties and the practical question of whether a waiver grant . . . would in fact increase or decrease the vigor of competition and diversity in the market." Id. at 6491-6492. We conclude that Entravision's showing in support of a waiver of the one-to-a-market rule meets our case-by-case criteria, and that a permanent waiver in this instance is consistent with the public interest and would not have an adverse effect on diversity and competition in the Yuma-El Centro DMA. 14. Entravision has shown that common ownership and joint operation of KVYE(TV) and KMXX(FM), KWST(FM), and KAMP(AM) will result in significant cost savings, operating efficiencies, and programming benefits. Entravision has projected annual savings of approximately $198,900 resulting from the consolidation of operating facilities and personnel. Entravision has represented that these cost savings will enable it to improve TV and radio programming geared to the needs and interests of the growing Hispanic community and the local community at large. Although Wilkins objects to Entravision's Spanish language programming, we note that the Commission does not regulate or scrutinize programming formats, nor does it take programming formats into consideration when considering assignment applications. See Entertainment Formats, 60 FCC 2d 858 (1976), recon. denied, 66 FCC 2d 78 (1977), rev'd sub nom. WNCN Listeners Guild v. FCC, 610 F.2d 838 (D.C. Cir. 1979), rev'd, 450 U.S. 582 (1981); see also Buckley Broadcasting Corporation of California, 9 FCC Rcd 1930 (1994) (denying informal objections to sale of AM-FM stations based on allegations that assignee planned to change programming format and granting one-to-a-market waiver). Thus, Entravision is afforded discretion in its programming decisions and the Commission will not interfere absent a showing that Entravision has abused this discretion. In this regard, Entravision plans to increase local news and emergency weather coverage for broadcast in Spanish and in English. Moreover, Entravision plans to appoint a Community Affairs Manager to work with representatives of the Hispanic community to develop subjects and provide guests for locally produced public affairs programming and public service announcements for Spanish and English broadcasts. Finally, Entravision states that with the combined resources of its proposed TV and radio combination, it will expand its participation in local community events by increasing its support of area civic and nonprofit groups and by instituting an internship program. 15. With regard to technical facilities, the Commission aims to predict and avoid any significant adverse effects on diversity or competition from too powerful a combination. See Great American Television and Radio Co., Inc., 4 FCC Rcd 6347, 6349 (1989). Our independent analysis of Entravision's showing indicates that KAMP(AM), a Class B station, operating at 1 kW ERP day and 0.036 kW ERP nighttime competes with at least three other Class B AM stations, all of which operate at the same daytime power but operate at superior nighttime power. As for KWST(FM), a Class B FM station, operating at 50 kW ERP from an antenna at 61 meters HAAT, there are two other Class B FM stations, one of which has comparable technical facilities. As for KMXX(FM), a Class A FM station, with a construction permit to modify its facilities to operate at 6 kW ERP from an antenna at 92 meters HAAT, our independent analysis shows that there are at least seven other Class A FM stations, one of which has facilities comparable to KMXX(FM)'s construction permit. Additionally, the market is served by a Class C1 and a C2 FM station, each with greater technical facilities than either KMXX or KWST. As for KVYE(TV), a VHF TV station (a Univision affiliate) authorized to operate on channel 7 at 316 kW visual ERP from an antenna at 389 meters HAAT, our independent analysis indicates that there are three other VHF stations including an affiliate of CBS, an affiliate of NBC, and a third VHF station that is affiliate of both FOX and UPN, all with comparable technical facilities. Additionally, a construction permit has been granted for a new UHF-TV station. Aside from its proposed TV and radio combination, Entravision will hold no other broadcast interests in the Yuma-El Centro Market. Therefore, we find that the proposed combination does not present issues of market dominance from a technical standpoint that would be inconsistent with the public interest. 16. Entravision states that none of the stations in its proposed combination is a failed station or is experiencing financial difficulties. However, we previously have indicated that not all five factors need be present to justify grant of a waiver. Second Report and Order Recon., 4 FCC Rcd at 6491. We also have granted a number of one-to-a-market waivers where there was no finding that any of the stations were in financial distress. See, e.g., DeArias, 11 FCC Rcd at 3666; Alta Gulf FM, Inc., 10 FCC Rcd 7750, 7751 (1995); Secret Communications Ltd., 10 FCC Rcd 6874, 6877-79 (1995). 17. With regard to the potential impact of the waiver on diversity and competition, our independent analysis of Entravision's showing, confirms that after the assignment is approved, the Yuma-El Centro Market will be served by 4 VHF stations, and 20 commercial and noncommercial radio stations (13 FM and 7 AM). Upon consummation of the proposed transaction, these 24 broadcast stations will be licensed to 13 separate owners. Our analysis further shows that there is a cable penetration rate of 66% and according to Entravision there are two daily newspapers. This level of competition and diversity that would be present in the Yuma-El Centro after the proposed combination is consistent with the level we have approved in previous waiver cases involving similar markets. See, e.g. Pennino Broadcasting Corp., 12 FCC Rcd 10752 (1997) (12 "voices in 164th DMA); Twenty First Century Broadcasting, Inc., 12 FCC Rcd 6974 (1997) (12 "voices" in the 140th DMA); Westar Broadcasting Group, Ltd., 11 FCC Rcd 11,221 (1996) (15 "voices" in the 188th ranked market); Perry Television, Inc., 5 FCC Rcd 1667 (Rev. Bd. 1990) (14 "voices" in the 130th ranked market). 18. With respect to economic concentration and competition in the context of one-to-a-market waiver requests, we usually consider the combined advertising revenue share of the proposed radio/television combination in the relevant market. See, e.g. Stockholders of Infinity Broadcasting Corp., 12 FCC Rcd 5012 (1996). Our independent analysis indicates that KVYE(TV) garners 6.25% of the TV advertising revenues, as reported in the BIA Publications, Inc.'s ("BIA") Television Master Access Database. Radio advertising revenues for the stations at issue are unavailable because they are not located in an Arbitron radio metro market for which BIA Radio Master Access Database reports such data. Nor are we able to independently determine advertising revenue shares for any geographical area that may constitute a functional equivalent of an Arbitron radio metro market in this case. Thus, we are unable to determine the combined radio/TV advertising share for Entravision's proposed combination. Nevertheless, based on the advertising revenue share of KVYE(TV) and the fact that the radio stations at issue compete with comparable or technically superior facilities, we conclude that the proposed combination will not have an adverse effect on competition in this area. Although Wilkins, in the informal objection asserts that Entravision's ownership of this radio-television combination would lead to undue concentration, his assertion is unsubstantiated, and thus amounts to speculation. Overall, Entravision has demonstrated that economic efficiencies and public interest benefits will be gained and such benefits support the grant of a permanent waiver. Based on the totality of circumstances, and our treatment of waiver requests from licensees serving similar size markets, we conclude that grant of the one-to-a-market permanent waiver request would be in the public interest. 19. Accordingly, IT IS ORDERED, that the informal objection to grant of the above-captioned assignment applications filed by Reverend Jerome Wilkins, IS HEREBY DENIED. 20. IT IS FURTHER ORDERED, that the request for permanent waiver of the Commission's one-to-a-market rule, 47 C.F.R. Section 73.3555(c), to permit common ownership of KAMP(AM), El Centro, KMXX(FM), Imperial, KWST(FM), Brawley and KVYE(TV), El Centro, all in California, IS HEREBY GRANTED. 21. IT IS FURTHER ORDERED, that having found the applicants fully qualified, the above-captioned applications to assign the licenses of KWST(FM), Brawley, California and KMXX(FM), Imperial, California, from Brawley Broadcasting Co. to Entravision Holdings, L.L.C. and to assign the license of KAMP(AM), El Centro, California from KAMP, Inc. to Entravision Holdings, L.L.C. ARE HEREBY GRANTED. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary