Assignment Application For WTOK-FM, San Juan, PR
Washington, D.C. 20554
June 20, 2012
Released: June 20, 2012
MSG Radio, Inc.
c/o Lewis J. Paper, Esq.
c/o Anthony T. Lepore, Esq.
Andrew S. Kersting, Esq.
Law Offices of Anthony T. Lepore, Esq.
Pillsbury Winthrop Shaw Pittman LLP
P.O. Box 823662
2300 N Street, N.W.
South Florida, FL 33082
Washington, D.C. 20037
RAAD Broadcasting Corporation
c/o Christopher D. Imlay, Esq.
Booth, Freret, Imlay & Tepper, P.C.
14356 Cape May Road
Silver Spring, MD 20904
WTOK-FM, San Juan, PR
Facility ID No. 4936
File No. BALH-20090206ACE
Application for Assignment of License
We have before us the above-captioned application (the “Application”) for consent to the
assignment of license for station WTOK-FM (formerly WIAC-FM), San Juan, Puerto Rico (the “Station”
or “WTOK”), from MSG Radio, Inc. (“MSG”) to WIAC-FM, Inc. (“WFI”). The Application includes a
request by WFI for waiver of Section 73.3555(a) of the Commission’s Rules (the “Rules”),1 which sets
forth the limits on the number of stations a party may own in a local radio market (the “Waiver Request”).
We also have before us a Petition to Deny (“Petition”), filed March 18, 2009, by RAAD Broadcasting
1 47 C.F.R. § 73.3555(a).
Corporation2 (“RAAD”).3 For the reasons stated below, we deny the Petition, waive Section 73.3555(a),
and grant the Application.4
Background.Prior Station Transaction. On August 20, 2007, Luis A. Mejia (“Mejia”) filed an
application seeking consent to assign the Station’s license to MSG (the “Mejia Application”).5 Pursuant
to the Asset Purchase Agreement between Mejia and MSG (the “Mejia APA”), Mejia agreed to assign the
Station license and other intangibles associated with the Station, to MSG for the sum of four million
dollars ($4,000,000.00). In September 2007, the Commission received two Petitions to Deny the Mejia
Application, each alleging that Mejia and MSG lacked candor with the Commission by withholding
documents germane to the transaction. Petitioners purported to provide copies of: (1) an Asset Purchase
Agreement (the “Bestov APA”), dated August 10, 2007, between Bestov Broadcasting, Inc. of Puerto
Rico (“Bestov”)6 and Madifide, Inc. (“Madifide”), pursuant to which Bestov proposed to sell Madifide
tangible and intangible assets associated with the leases for the studio, office, and transmitter facilities
needed to operate the Station for a total price of twelve million five hundred thousand dollars
($12,500,000.00); and (2) an undated “Shared Services Agreement” (the “SSA”) between MSG and
Madifide, under which Madifide would provide MSG with access to the station's studio and tower. The
SSA excluded the sharing of other services including, but not limited to, MSG's employees, contractors,
sales, accounting, programming, and related advertising decisions. Madifide and WFI, the current
proposed assignee of WTOK, are commonly owned by members of the Soto family. The petitioners
alleged that these documents reflected an unauthorized transfer of control of the Station to the Soto-
controlled Madifide and that MSG was just an instrument in the transaction.
On May 2, 2008, the Media Bureau (the “Bureau”) sent a Letter of Inquiry to Mejia, MSG and
Madifide, requesting more information to determine whether MSG “will exercise a meaningful degree of
control over the Station’s programming.”7 The parties’ responses included copies of the Bestov APA,
SSA, and a non-finalized, non-executed Option Agreement between MSG and Madifide, proposing that
MSG extend to Madifide a two-year, irrevocable option to purchase the Station license when qualified to
do so under FCC rules and policies.
Ultimately, the Bureau, inter alia, rejected arguments that the agreements reflected an
unauthorized transfer of control. Specifically, the Bureau observed that the SSA “specifically excludes
the sharing of responsibilities essential for MSG to maintain control over the Station” and the Option
2 RAAD is the licensee of WXYX(FM), Bayamon, Puerto Rico, which is located in the same market as WTOK.
3 Also before us are the following pleadings: (1) Motion for Extension of Time, filed March 25, 2009, by MSG; (2)
Motion for Extension of Time to File Opposition, filed March 30, 2009, by WFI; (3) Opposition to Petition to Deny,
filed April 17, 2009, by MSG; (4) Opposition to Petition to Deny, filed April 20, 2009, by WFI; (5) Motion for
Extension of Time to File Consolidated Reply, filed May 5, 2009, by RAAD; and (6) Consolidated Reply to
Oppositions, filed May 5, 2009, by RAAD.
4 Arso Radio Corporation (“Arso”), an entity commonly-controlled by the principals of WFI, has raised the same
arguments contained in the WFI Waiver Request, regarding the application of the Arbitron Metro standard to Puerto
Rico, in other proceedings, and our action here does not prejudge the Commission’s disposition of Arso’s arguments
in the appropriate context. Although we are granting the Station WTOK assignment application below, any future
application by WFI to change or increase the Station’s facilities must be accompanied by a new showing of
compliance with the Commission’s local radio ownership rules and, if necessary, a new request for waiver of the use
of the Arbitron Puerto Rico Metro as the presumptive market in which the Station competes.
5 File No. BALH-20070820AGE.
6 Mejia is the 100 percent shareholder of Bestov.
7 See Letter to Luis A. Mejia, et al., Reference 1800B3-TSN (MB May 2, 2008) at 2.
Agreement “does not appear to reflect any undue influence on MSG’s operation if MSG were to obtain
the Station license.”8 Accordingly, on August 5, 2008, the Bureau granted the Mejia Application,9 and
the parties consummated on January 8, 2009. On February 6, 2009, MSG filed the subject Application
seeking the Commission’s consent to assign the Station’s license to WFI.
Waiver Request. WFI and/or its principals, the Soto family, currently have attributable interests
in 14 radio stations (six AM and eight FM) on the island of Puerto Rico.10 Thirteen of the 14 stations
were acquired through their demonstration of compliance with the Commission’s former methodology for
defining radio markets, which relied on the overlapping principal community contours of the commercial
radio stations that were proposed to be commonly owned.11
In the Ownership Order,12 however, the Commission adopted a new, geography-based definition
of radio markets based on Arbitron’s Metro Survey Areas (“Metros”), as reported by BIA.”13 This new
market definition is used to determine compliance with the numerical limits under Section 73.3555(a) in
Arbitron-rated markets, such as Puerto Rico. Under these new definitions, the island of Puerto Rico
constitutes a single Arbitron Metro, which, according to BIA, contains 115 commercial and 12
noncommercial stations.14 In this size market, a party may have a cognizable interest in up to eight
commercial stations, with no more than five in the same service (AM or FM).15 Thus, because the
number of radio stations in Puerto Rico in which WFI and/or its principals currently have ownership
8 See Luis A. Mejia, Memorandum Opinion and Order and Notice of Apparent Liability for Forfeiture, 23 FCC Rcd
11902, 11905 (MB 2008) (“Mejia”).
9 Id. The Mejia Order also imposed a $3,000 forfeiture on Mejia and MSG for failing to provide copies of drafts of
the SSA and Bestov APA. No party sought reconsideration or review of the Mejia Application grant, and that
action is final. The Bureau subsequently rejected MSG’s request for cancellation of the forfeiture. See Luis A.
Mejia, Forfeiture Order, 23 FCC Rcd 15242 (MB 2008), recon. denied, 26 FCC Rcd 11444 (MB 2011), application
for review pending.
10 Those stations are: WPRM-FM, San Juan, PR; WIVA-FM, Aguadilla, PR; WRIO(FM), Ponce, PR; WORA(AM),
Mayaguez, PR; WPRP(AM), Ponce, PR; WFDT(FM), Aguada, PR; WUNO(AM), San Juan, PR; WMIO(FM), Cabo
Rojo, PR; WFID(FM), Rio Piedras, PR; WLEO(AM), Ponce, PR; WZAR(FM), Ponce, PR; WCMN(AM), Arecibo,
PR; WCMN-FM, Arecibo, PR; and WNEL(AM), Caguas, PR.
11 The Soto family’s ownership of these 13 stations was subsequently grandfathered. See Ownership Order, infra
note 12, 18 FCC Rcd at 13808. The fourteenth station, WMIO(FM), was acquired through a waiver of Section
73.3555(a) of the Rules. See Luis A. Soto, Letter, 22 FCC Rcd 2549 (MB 2007) (“WMIO Waiver”).
12 See 2002 Biennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules
Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, 18 FCC Rcd 13620, 13711-13747 (2003)
(“Ownership Order”), aff’d in part and remanded in part, Prometheus Radio Project, et al. v. FCC, 373 F.3d 372
(2004) (“Prometheus Remand Order”), stay modified on rehearing, No. 03-3388 (3d Cir. Sept. 3, 2004)
(“Prometheus Rehearing Order”), cert. denied, 73 U.S.L.W. 3466 (U.S. June 13, 2005) (Nos. 04-1020, 04-1033,
04-1036, 04-1045, 04-1168 and 04-1177). See also Prometheus Radio Project. v. FCC, No. 08-3078 (3d Cir. Jul. 7,
2011) (affirming Commission's 2008 local radio ownership rule).
13 See Ownership Order, 18 FCC Rcd 13724-13728. Although the Third Circuit Court of Appeals subsequently
stayed the effective date of all the new rules set forth in the Ownership Order and continued that stay pending
review of the Commission’s action on remand, see Prometheus Remand Order, 373 F.3d at 435, the court partially
lifted the stay in response to the Commission’s Petition for Rehearing, such that the new local radio ownership rule
took effect on September 3, 2004. Prometheus Rehearing Order at 2.
14 BIA database, April 19, 2012.
15 See 47 C.F.R. § 73.3555(a)(i).
interests exceeds the limits imposed for a local radio market of its size (six radio stations and three FM
stations more than permitted), WFI cannot acquire Station WTOK absent a waiver.
On February 9, 2007, the Commission granted Arso, a corporation commonly controlled by the
members of the Soto family, a waiver of Section 73.3555(a) of the Rules, and granted an application to
assign the license for Station WMIO(FM), Cabo Rojo, Puerto Rico, from Bestov to Arso.16 The
Commission found that the unique characteristics of the Puerto Rico Arbitron Metro presented a
compelling case for departing from the Arbitron Metro as the presumptive definition of the local market
when determining whether the transaction complied with the local radio ownership rule.17 Accordingly,
the Commission reviewed the proposed acquisition using the interim contour-overlap methodology that
applies in non-Arbitron rated markets. WFI claims that the same conclusions apply here and requests a
waiver of the current rule, urging the Commission to review its proposed acquisition using the interim
contour-overlap methodology that applies in non-Arbitron rated markets.18
The Petition. RAAD objects to the grant of the instant Application on two grounds. First, RAAD
alleges that the Application is “part and parcel of an undisclosed scheme to permit unlawful assumption
of control of [the Station] by the Soto family of Puerto Rico.”19 RAAD contends that the 2007
assignment of the Station to “Mr. Reed [MSG] was part of a plan to warehouse the station with Mr. Reed,
while it was operated by the Sotos,” and that the current application is a “culmination of an ongoing effort
by the Sotos to legitimatize their de facto ownership, operation, and control of the station”20 To support
its allegations, RAAD primarily relies upon documents filed in conjunction with the 2007 Mejia
Application. RAAD also bases its conclusions on (1) its belief that some “key” MSG employees were
previously employees of the Sotos, and (2) the fact that MSG is using the Toca de To trademark used by
companies owned by the Sotos.
Second, RAAD contends that the WFI Waiver Request is unjustifiable and should be denied.
RAAD argues that the Commission’s prior decision to grant the WMIO(FM) waiver did not consider
market realities and Puerto Rico’s competitive environment. According to RAAD, grant of the instant
Application would result in the Soto family having an undue concentration of market power in the Puerto
Discussion.In assessing the merits of a petition to deny under Sections 309(d) of the
Communications Act of 1934, as amended (the “Act”), we first determine whether the petitioner makes
specific allegations of fact that, if true, would demonstrate that grant of the application would be prima
facie inconsistent with the public interest.21 If the Commission determines that the petitioner has satisfied
16 See WMIO Waiver, 22 FCC Rcd at 2553.
17 Id. at 2553.
18 As an attachment to its Waiver Request, WFI provides a Technical Statement which WFI claims demonstrates
compliance pursuant to the interim contour-overlap methodology, as discussed in the Ownership Order, 18 FCC
Rcd at 13729-30.
19 RAAD Petition at 1.
20 Id. at 2, 9.
21 See Astroline Communications Co. v. FCC, 857 F.2d 1556 (D.C. Cir. 1988). The Commission determines
whether a petitioner has met this threshold inquiry in a manner similar to a trial judge's consideration of a motion for
directed verdict: “if all the supporting facts alleged in the affidavits were true, could a reasonable fact finder
conclude that the ultimate fact in dispute had been established.” Gencom, Inc. v. FCC, 832 F.2d 171, 181 (D.C. Cir.
1987) (“Gencom”), cited in Edwin L. Edwards, Memorandum Opinion and Order and Notice of Apparent Liability,
16 FCC Rcd 22236, 22248 (2001).
the threshold determination, it proceeds to determine whether, on the basis of the application, the
pleadings filed, or other matters which the Commission may officially notice, the petitioner has presented
a “substantial and material question of fact” to warrant further inquiry.22 If no such question is raised and
the Commission otherwise makes the required public interest determination, it will deny the petition and
grant the application.
Unauthorized Transfer of Control. In determining whether there has been an unauthorized
transfer of control, the Commission employs a tripartite, fact-based test for control within the meaning of
Section 310(d) of the Act.23 Specifically, we have traditionally looked beyond legal title to see whether a
new entity or individual has obtained the right to determine basic operating policies of the station.24
Although a licensee or permittee may delegate certain functions on a day-to-day basis, the ultimate
responsibility for essential station operations, such as personnel, programming, and finances, is non-
RAAD’s allegation that the Soto family has obtained de facto control over the Station is premised
primarily on documents submitted in connection with the 2007 Mejia Application. RAAD asserts that a
“fresh look at the circumstances of that prior transaction” will show that the “Sotos are and have been in
control of [the Station] without prior Commission approval.”26 RAAD’s allegation is identical to the
argument that two separate petitioners advanced in the 2007 Mejia Application and is mostly predicated
on the same underlying factors. We previously considered and rejected the unauthorized transfer of
control claim and we will not revisit that decision here.27 Nevertheless, we have considered RAAD’s
allegation, primarily in light of the new, albeit scant, information that RAAD has provided, i.e.,
allegations regarding use of common employees and a common trade name.
RAAD asserts that the Soto family’s control over personnel is evidenced by the fact that “some of
the MSG employees in key positions were previously employees of the Sotos.”28 MSG’s abdication of
programming control is, according to RAAD, reflected in the fact that MSG is currently using the “Toca
de To” trademark, a tradename owned by a corporation controlled by the Soto family.29
22 Gencom, 832 F.2d at 181.
23 See 47 U.S.C. § 310(d) (prohibiting the transfer, assignment or disposal of any construction permit or station
license “in any manner, voluntary or involuntary, directly or indirectly … to any person except upon application to
the Commission and upon finding that the public interest convenience, and necessity will be served thereby”). See
also WGPR, Inc., Memorandum Opinion and Order, 10 FCC Rcd 8140, 8142-46 (2005) (“WGPR”), vacated on
other grounds sub nom., Serafyn v. FCC, 149 F.3d 1213 (D.C. Cir. 1998); Choctaw Broadcasting Corporation,
Memorandum Opinion and Order, 12 FCC Rcd 8534, 8538-39 (1997).
24 See WHDH, Inc., Memorandum Opinion and Order, 17 FCC 2d 856, 863 (1969), aff’d sub nom., Greater Boston
Television Corp. v. FCC, 444 F.2d 841 (D.C. Cir. 1970), cert denied, 403 U.S. 923 (1971).
25 See, e.g, WGPR, 10 FCC Rcd at 8145; Southwest Texas Public Broadcasting Council, Letter, 85 FCC 2d 713, 715
26 RAAD Petition at 4, 18.
27 See, e.g., ACME Television Licenses of Florida, LLC, Letter, 22 FCC Rcd 1656, 1658 (a petitioner cannot ask the
Commission to “look beyond the record based on concerns or allegations rejected by the Commission in prior
applications and initiate a broad inquiry regarding the parties’ potential or intent to violate the Commission’s rules in
28 RAAD Petition at 17-18.
29 RAAD also opines that because George Reed, the sole shareholder of MSG “has no other broadcast holdings and
is, on information and belief, a media broker,” it is obvious that MSG is a “straw party.” RAAD Petition at 9. MSG
RAAD’s allegation that the Soto family controls the Station’s personnel and programming is
based on inferences, conjecture, and erroneous information. It is clear from the terms of the agreements
that MSG has ultimate control over personnel and all programming decisions and policies, and RAAD
has provided no evidence that the agreements, in form or in practice, violate the Commission’s Rules.
The SSA is explicit with respect to employee control, maintaining that at “no time shall the MSG
personnel be an employee of, or independent contractor with, WFI [the Soto family], or vice versa.”30
Moreover, George Reed, the sole shareholder of MSG, has confirmed, under penalty of perjury, that
“neither WFI nor any other company (whether owned by members of the Soto family or otherwise)
exercises any control over MSG employees and consultants when they are performing tasks for the
Station,”31 and that “tasks involving programming are the sole province of me and the employees of
MSG.”32 The fact that some of the MSG employees previously worked for companies owned by the Soto
family does not indicate an abdication of control, as RAAD speculates. Rather, Mr. Reed has confirmed
that he hired the employees and is the only one who controls their activities.33 Similarly, MSG verifies
that the trademark agreement merely provides MSG with a license to use a trademark.34 It does not
confer any right on the Soto family to covertly control programming, as RAAD infers.35 To the contrary,
the fact that MSG has an explicit agreement to use the trademark indicates a legitimate, open business
arrangement, not evidence of a stealth assumption of control.
The agreements are explicit that Mr. Reed and MSG maintain ultimate control over the Station.36
RAAD has proffered no evidence that, in practice, the parties’ conduct is not in compliance with the
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has refuted RAAD’s allegation and illustrated that Mr. Reed has extensive experience at radio stations, working in
the areas of sales and programming, and is an experienced broadcaster with current ownership interests in six radio
stations. Moreover, regardless of Mr. Reed’s prior broadcast experience, the agreements are explicit that Mr. Reed
and MSG maintain ultimate control over the Station, and RAAD has failed to provide any evidence to show that this
is not true in practice.
30 See SSA at Section 2.2.1 – Personnel.
31 See Declaration of George R. Reed, attached as Exhibit to MSG Opposition.
32 See Declaration of George Reed at 2; SSA at Sections 2.1.6 and 2.2.2 (providing that “with the exception of the
provision of Provided Programming [the programming WFI provides, which shall not comprise more than 15% of
the programming on the Station during any week], neither WFI nor MSG will perform any duties with respect to
selecting or procuring programming”).
33 Mr. Reed explains that he hired Marnie Ferrer as the full-time General Manager of the Station. Ms. Ferrer had
previously been employed by a company owned by members of the Soto family. However, Mr. Reed states that Ms.
Ferrer “does not take any direction from any member of the Soto family or any company owned by members of the
Soto family in fulfilling her responsibilities as General Manager of the Station.” Declaration of George Reed at 1.
34 The tradename is owned by Caribbean Broadcasting Corporation, an affiliate of WFI. The programming slogan
was previously used by WCMN-FM, Arecibo, Puerto Rico.
35 See MSG Opposition at 16-17; Declaration of George Reed at 1-2 (declaring, under penalty of perjury, that the
“agreement relates solely to the use of a trademark owned by Caribbean Broadcasting Corporation and does not
involve in any way the selection or procurement of programming for the Station.”). Moreover, to ensure there was
no confusion regarding MSG’s adoption of the new programming slogan, Mr. Reed met with advertising agencies in
Puerto Rico to explain that MSG operates the Station. See WFI Opposition at 12.
36 See, e.g., SSA at Section 3.3 – Control of Station (providing that “MSG shall maintain ultimate control over the
operations of [the Station], including, but not limited to, management, programming, finances, editorial policies,
personnel, facilities and compliance with the Act, FCC Rules . . . .”).
terms of the agreements. Accordingly, having reviewed the agreements and the entire record before us,
we reject RAAD’s first argument that MSG and the Soto family engaged in an unauthorized transfer of
Waiver. The Commission's rules may be waived only for good cause shown.37 An applicant
seeking a rule waiver has the burden to plead with particularity the facts and circumstances that warrant
such action.38 The Commission must give waiver requests “a hard look,” but an applicant for waiver
“faces a high hurdle even at the starting gate”39 and must support its waiver request with a compelling
showing.40 The Commission may exercise its discretion to waive a rule where the particular facts make
strict compliance inconsistent with the public interest.41 In addition, the Commission may take into
account considerations of hardship, equity, or more effective implementation of overall policy on an
individual basis.42 However, waiver of the Commission's rules is appropriate only if both (i) special
circumstances warrant a deviation from the general rule, and (ii) such deviation will serve the public
interest.43 Applying these standards, we find that waiver of Section 73.3555(a) is appropriate in this
WFI’s Waiver Request is essentially identical to Arso’s WMIO(FM) waiver request, which the
staff granted in 2007.44 Specifically, in support of its Waiver Request, WFI relies on the Commission’s
statement in the Ownership Order that Arbitron Metros “are based on Metropolitan Areas (MAs)
established by the Office of Management and Budget (OMB),”45 It notes that this reasoning is
inapplicable here because OMB does not define, as an MA, the entire island of Puerto Rico.46 According
37 47 C.F.R. § 1.3.
38 See Columbia Communications Corp. v. FCC, 832 F.2d 189, 192 (D.C. Cir, 1987) (citing Rio Grande Family
Radio Fellowship, Inc. v. FCC, 406 F.2d 644, 666 (D.C. Cir. 1968)).
39 See WAIT Radio v. FCC, 418 F.2d 1153, 1157 (D.C. Cir. 1969) (“WAIT Radio”), cited in Ownership Order, 18
FCC Rcd at 13647. See also Thomas Radio V. FCC, 716 F.2d 921, 924 (D.C. Cir. 1983).
40 Greater Media Radio Co., Inc., Memorandum Opinion and Order, 15 FCC Rcd 7090 (1999) (citing Stoner
Broadcasting System, Inc., Memorandum Opinion and Order, 49 FCC 2d 1011, 1012 (1974)).
41 See Northeast Cellular Telephone Co. v. FCC, 897 F.2d 1164, 1166 (D.C. Cir. 1990) (citing WAIT Radio). See
also 47 C.F.R. § 1.3 (stating that rule provisions may be waived "for good cause shown"). The Commission
declined to adopt any specific waiver criteria relating to radio station ownership in the Ownership Order, but stated
that “[p]arties who believe that the particular facts of their case warrant a waiver of the local radio ownership rule
may seek a waiver under the general ‘good cause’ waiver standard in our rules.” Ownership Order, 18 FCC Rcd at
13746-47 (citing 47 C.F.R. § 1.3).
42 WAIT Radio, 418 F.2d at 1159; Northeast Cellular, 897 F.2d at 1166.
43 NetworkIP, LLC v. FCC, 548 F.2d 116, 125-128 (D.C. Cir. 2008); Northeast Cellular, 897 F.2d at 1166.
44 See WMIO Waiver, supra note 11.
45 See Ownership Order, 18 FCC Rcd at 13725. The term MAs includes both Metropolitan Statistical Areas
(MSAs) and Micropolitan Statistical Areas (Micro SAs). MSAs have at least one urbanized area of 50,000 or more
population, plus adjacent territory that has a high degree of social and economic integration with the core as
measured by commuting ties. Micro SAs have at least one urbanized area of at least 10,000 but less than 50,000
population, plus adjacent territory that has a high degree of social and economic integration with the core as
measured by commuting ties. Combined Statistical Areas are combined adjacent MSAs and Micro SAs. See OMB
Bulletin 10-02, at http://www.whitehouse.gov/omb/bulletins/fy2010/b10-02.pdf.
46 WFI states that Puerto Rico has eight Metropolitan Statistical Areas and three Combined Statistical Areas. See
List 5, Attachments to OMB Bulletin 03-04 (at http://www.whitehouse.gov/omb/bulletins/b03-04.html), which WFI
to WFI, OMB considers the presence of population centers in defining both MAs and MSAs and has
identified eight Metropolitan Statistical Areas (“MSAs”) in Puerto Rico.47 Further, WFI asserts that the
unique geography and topography of Puerto Rico make it impossible for stations across the island to
compete with each other. Accordingly, WFI asserts that the entire island of Puerto Rico, by definition,
cannot constitute a single Arbitron Metro.
The Commission previously found that the unique characteristics of the Puerto Rico Arbitron
Metro, including the extreme topography and unusual economic circumstances, justified a waiver of the
use of the Arbitron Puerto Rico Metro as the presumptive market in which Station WMIO(FM) competes.
We find that the same factors support a grant of the instant WTOK Waiver Request. The island of Puerto
Rico is approximately 125 miles long (east to west) and 35 miles wide (north to south), with a central
mountain range that not only separates the island from east to west, but also divides it into three basic
areas, San Juan, Ponce, and Aguadilla-Mayaguez. The Commission has previously acknowledged the
severely limiting effect Puerto Rico's unique mountainous terrain has on signal propagation, which
prevents stations in the more populous San Juan area from serving the two other main areas of the
island.48 In the WMIO Waiver, we found that the island’s extreme topography was a prime factor
justifying the waiver.49 Similarly, WTOK is impacted by the island’s unique topographical constraints,
making it unlikely that the station can be heard, let alone compete, in areas on the western part of the
island, some 120 kilometers away.
Further, Puerto Rico is unique in that the entire island, which is roughly the same size as
Connecticut, is treated as one market by Arbitron.50 Puerto Rico, however, consists of eight MSAs, five
Micro Statistical Areas, and three Combined Statistical Areas.51 MSAs generally approximate the
boundaries around centers of economic activity.52 Puerto Rico’s eight MSAs suggest that the island may
(…continued from previous page)
appends as Attachment 3 to its Waiver Request. The most current OMB MA list confirms that these numbers have
not changed. See OMB Bulletin 10-02.
47 Waiver Request at 3.
48 The Commission has found that a combination of the island’s topography and its geographic isolation places
Puerto Rico in a highly unusual position, and accordingly, it has, on numerous occasions, authorized exceptions to
the TV duopoly rule where satellite stations were at issue. See, e.g., Canal 48, Inc., Memorandum Opinion and
Order, 8 FCC Rcd 2193 (1993); Paxson Communications of San Juan, Memorandum Opinion and Order, 16 FCC
Rcd 14139 (2001).
49 See WMIO Waiver, 22 FCC Rcd at 2551, 2553.
50 As we previously acknowledged in the WMIO Waiver, Arbitron itself, in “Puerto Rico Radio Today” states that
Puerto Rico “can be compared to Connecticut. It is a little smaller, but with almost half a million more people.”
However, in addition to the inclusion of southern Connecticut in the New York radio market, Connecticut has
several Arbitron-rated radio markets. See Arbitron Inc., Puerto Rico Radio Today (2006 edition).
51 See OMB Bulletin 10-02, supra note 45; see also Standards for Defining Metropolitan and Micropolitan
Statistical Areas, 65 Fed. Reg. 82228 (2000).
52 The Commission has previously used the U.S. Census Bureau’s designation of MSAs to help define the applicable
market for determining compliance with cross-ownership limits in Puerto Rico. See, e.g., WLDI, Inc., Memorandum
Opinion and Order, 10 FCC Rcd 12150 (1995) (recognizing that the San-Juan Bayamon PMSA may be equivalent
to a radio market and the San Juan-Caguas-Arecibo CMSA may be equivalent to a television market)
have more centers of economic activity than the Arbitron Metro implies in this instance.53 Moreover,
since our grant of the WMIO Waiver in 2007, the Puerto Rico Metro has become a more competitive
market with 115 commercial stations, 12 noncommercial stations, and 71 separate owners of radio
stations.54 As we previously acknowledged, while there are other Arbitron markets that comprise more
than one MSA, Puerto Rico is the only such market that has the additional factors of geographic size,
topography, and sheer numbers of radio stations and station owners.55
Although RAAD concedes that the Commission may have “had some basis for allowing a waiver
of the duopoly rules in the WMIO case,”56 it contends that the WTOK Waiver Request is not justifiable
and should be denied. RAAD asserts that the Commission must consider market realities and Puerto
Rico’s competitive environment.57 RAAD estimates that a grant of the Waiver Request would increase
the Soto family’s market share to 26 percent of all radio revenues and “make an already alarmingly
difficult competitive situation decidedly, substantially worse.”58 According to RAAD, close to 60 percent
of all radio revenues are controlled by the top three companies: the Soto family’s Uno Radio Group, SBS
Spanish Broadcasting Systems, and Univision Radio. RAAD estimates that upon consummation of the
subject transaction, the top three groups will control from 62 to 70 percent of all radio revenues, and over
90 percent of all national campaigns, and the Soto’s market share will increase from 22 to 26 percent of
all radio revenues and over 30 percent of the national advertising campaigns.59 RAAD boldly predicts
that “if waivers like this are legitimatized by the Commission, market dominance by the top firms will be
RAAD relies primarily on advertising revenue shares in asserting its competition concerns. The
Commission, however, has concluded that ad revenue share is of “decreasing relevance . . . as a barometer
of competition”61 and explicitly rejected arguments that it incorporate a market share analysis into the
local ownership rule.62 Moreover, even were we to attempt to conduct such an analysis here, RAAD has
failed to proffer sufficient economic data to substantiate its claim of competitive harm. For example,
RAAD does not provide concrete data to explain how it derives its 26 percent revenue share estimate for
the Soto family.
RAAD further premises its competition concerns on the fact that WTOK is a Class B station
located in San Juan, the “major economic area of Puerto Rico.” RAAD asserts, without any support, that
53 Arbitron acknowledges that when analyzing Puerto Rico, there are several regions – San Juan, West, South, East,
North, and Northeast, and provides ratings data for Puerto Rico broken down by those regions. See Puerto Rico
Radio Today (2012 edition) at 2.
54 In 2007, there were 99 commercial stations, three noncommercial stations, as well as 53 separate owners of radio
stations in Puerto Rico.
55 We note that the Puerto Rico Radio Broadcasters Association filed comments in MB Docket 03-130, urging the
Commission to utilize OMB’s statistical areas as the alternative basis for determining the size and number of local
radio markets for the island of Puerto Rico.
56 RAAD Petition at 12.
58 Id. at 13.
59 Id. at 13.
61 Ownership Order, 18 FCC Rcd at 13642.
62 Id. at 13736-37.
it is “a fact that the Sotos and the two other entities own in the aggregate a dominant number of the
stations with optimum island coverage and power so that local or regional radio stations cannot compete
with them.”63 According to RAAD, grant of the Application will make it impossible for a healthy
competitive environment to develop. We are unpersuaded by RAAD’s unsubstantiated allegations. Upon
consummation of the Application, the Sotos will own one additional station, WTOK-FM, a Class B
station licensed to San Juan. However, many other stations with comparable facilities will continue to
compete against the Soto family.64 Moreover, as the Commission recognized in the Ownership Order,
technically weaker stations may, of course, be strong competitors in their markets, depending on a variety
of factors such as format choice, population coverage, and quality of programming.”65
Finally, we emphasize that our ultimate obligation is to consider the potential benefits and harms
of the transactions on the listening public. As the Commission observed in the Ownership Order,
“[p]reserving competition for listeners is of paramount concern” in our public interest analysis.66 We
need to ensure that a sufficient number of rivals are engaged in competition for listening audiences.
RAAD, in fact, concedes that “there are a respectable number of licensees not under the control of the
Sotos.”67 Grant of the Application will not alter this fact. According to BIA data, 71 station owners
currently compete in the Puerto Rico Metro, and 70 owners will remain in the Metro post-transaction.
Accordingly, we find RAAD’s speculative prediction of an anti-competitive environment
unpersuasive and find that the instant Waiver Request is not, as RAAD asserts, “unjustifiable.” Rather,
we find that the unique characteristics of the Puerto Rico present a compelling showing of special
circumstances that warrant departing from the Arbitron Metro as the presumptive definition of the local
market in determining whether the transaction complies with the local radio station ownership rule. On
the facts presented here, we find that it is in the public interest to grant the Waiver Request and utilize the
interim contour-overlap methodology that applies in non-Arbitron rated markets.
Multiple Ownership – Contour Overlap Methodology. We have evaluated the proposed
transaction applying the Commission’s interim contour-overlap methodology.68 Our analysis confirms
that the proposed transaction forms five separate radio markets and complies with the local radio
ownership limits in all five. In a local radio market with 30 to 44 radio stations, one owner may own up
to seven commercial radio stations, no more than four of which are in the same service (AM or FM), in
each market.69 In Market One, WFI would own three FM stations and two AM stations in a 43-station
market. In Market Two, WFI would own three FM stations and three AM stations in a 44-station market.
In Market Three, WFI would own four FM stations and two AM stations in a 44-station market.70
63 RAAD Petition at 14.
64 For example, Broadcasting and Programming Systems, Inc. owns a Class B station in San Juan; Clamor
Broadcasting Network is the licensee of a Class B station in Culebra.
65 Ownership Order, 18 FCC Rcd at 13732.
66 Id. at 13716. See also id. at 13641.
67 RAAD Petition at 14.
68 Under the contour-overlap methodology, the relevant radio market is defined by the area encompassed by the
mutually overlapping principal community contours of the stations proposed to be commonly owned. See
Ownership Order, 18 FCC Rcd at 13729-13730.
69 See 47 C.F.R. § 73.3555(a)(1)(ii).
70 Market 1: WTOK-FM, WPRM-FM, WZAR(FM), WUNO(AM), and WPRP(AM).
Market 2: WTOK-FM, WFID(FM), WPRM-FM, WUNO(AM), WNEL(AM), and WCMN(AM).
In a local radio market with 45 or more radio stations, one owner may own up to eight
commercial radio stations, not more than five of which are in the same service, in each market.71 In
Market 4, WFI would own five FM stations and two AM stations in a 45-station market. Finally, in
Market 5, WFI would have an interest in four FM stations and two AM stations in a 45 station market.72
Accordingly, evaluating the transaction using the interim contour-overlap methodology, WFI complies
with the local radio ownership rule.
Conclusion/Actions.Based on the evidence presented in the record, we find that RAAD has not
raised a substantial and material question of fact warranting further inquiry. We have examined the
Application and find that it otherwise complies with all applicable statutory and regulatory requirements,
and we find that grant of the Application would further the public interest, convenience, and necessity.
Accordingly, IT IS ORDERED, that Section 73.3555(a)(1)(iii) of the Commission’s Rules73 IS
WAIVED with respect to all interests held by WIAC-FM, Inc. and its officers, directors and stockholders
in the authorization for Station WTOK-FM, San Juan, Puerto Rico.74
IT IS FURTHER ORDERED, that the March 18, 2009, Petition to Deny, filed by RAAD
Broadcasting Corporation, IS DENIED.
IT IS FURTHER ORDERED, that the application (File No. BALH-20090206ACE) for consent
to assign the license for Station WTOK-FM, San Juan, Puerto Rico, from MSG Radio, Inc. to WIAC-FM,
Inc. IS GRANTED.
Peter H. Doyle
Chief, Audio Division
(…continued from previous page)
Market 3: WTOK-FM, WFID(FM), WPRM-FM, WZAR(FM), WCMN(AM), WUNO(AM).
71 See 47 C.F.R. § 73.3555(a)(1)(i).
72 Market 4: WTOK-FM, WCMN-FM, WZAR(FM), WPRM-FM, WFID(FM), WCMN(AM), and WUNO(AM).
Market 5: WTOK-FM, WFID(FM), WPRM-FM, WZAR(FM), WCMN(AM), and WUNO(AM).
73 47 C.F.R. § 73.3555(a)(1)(iii).
74 See note 4, supra.
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