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Petition for Reconsideration of Percy Squire denied.

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Released: April 18, 2013

Federal Communications Commission

Washington, D.C. 20554

April 18, 2013


DA 13-783

In Reply Refer to:
1800B3-CEG
Released:

April 18, 2013

Aaron P. Shainis, Esq.
Shainis & Peltzman, Chartered
1850 M Street N.W. Suite 240
Washington, D.C. 20036
David Oxenford, Esq.
Wilkinson Barker Knauer LLP
2300 N Street N.W. Suite 700
Washington, D.C. 20037
Percy Squire
Percy Squire Co., LLC
341 South Third Street Suite 10
Columbus, OH 43215
In re:

WVKO(AM), Columbus, Ohio

Facility ID No. 22341
File No. BR-20120529AHE

WVKO-FM, Johnstown, Ohio

Facility ID No. 58633
File No. BRH-20120529AHG

WASN(AM), Youngstown, Ohio

Facility ID No. 72100
File No. BR-20120529AHH

WGFT(AM), Campbell, Ohio

Facility ID No. 74164
File No. BR-20120529AHJ

Applications for Renewal of License

WRBP(FM), Hubbard, Ohio

Facility ID No. 63498
File No. BRH-20120529AHK

Application for Renewal of License

File No. BALH-20120612AAP

Application for Assignment

File No. BMLH-20120710AAS

Application to Modify License
Request for Waiver of Main Studio Rule


Petition for Reconsideration

Dear Counsel and Petitioner:
We have before us a Petition for Reconsideration (“Petition”) filed by Percy Squire (“Squire”) on
February 8, 2013, seeking reconsideration of the grant of the above-referenced applications for renewal of
stations WVKO(AM), Columbus, Ohio; WVKO-FM, Johnstown, Ohio; WASN(AM), Youngstown, Ohio;
WGFT(AM), Campbell, Ohio; and WRBP(FM), Hubbard, Ohio (the “Stations”).1 Squire also seeks
reconsideration of the grant of the assignment of the license for station WRBP(FM), Hubbard, Ohio, from
Bernard Ohio, LLC (“Bernard”) to Educational Media Foundation (“EMF”). Finally, Squire seeks
reconsideration of the above-captioned application filed by EMF for modification of the license for station
WRBP(FM) to operate as a noncommercial educational (“NCE”) station2 and accompanying main studio
waiver request to operate WRBP(FM) as a “satellite” of co-owned NCE station KLVR(FM), Middletown,
California (collectively, the “Applications”).3 We also have before us Bernard’s Opposition to Petition for
Reconsideration, filed February 27, 2013 (“Opposition”). For the reasons stated below, we deny the Petition.

Background.

Squire was the Managing Member and CEO of the former licensee of the five
Stations, Stop 26 Riverbend Licenses, LLC (“SRL”).4 In 2004, SRL entered into a loan agreement with
the predecessor of D.B. Zwirn Special Opportunity Fund, LP (“DBZ Onshore Fund”), a hedge fund then
managed by another Zwirn entity, D.B. Zwirn & Co. L.P. In July 2005, SRL filed for Chapter 11
bankruptcy. As a result of the bankruptcy, on January 22, 2007, the Stations were assigned to Bernard, an
indirect affiliate of DBZ Onshore Fund.5 In 2009, Fortress Investment Group (“Fortress”) took over
management of Zwirn’s various hedge funds, including DBZ Onshore Fund.
Over Squire’s Petitions to Deny, the Bureau granted Bernard’s Applications by a letter decision
released January 11, 2013 (“Letter Decision”).6 In the 10-page Letter Decision, the Bureau addressed at
length Squire’s two primary objections: (1) that DBZ Onshore Fund, which has an indirect equity interest
in the licensee, Bernard, has a prohibited level of foreign ownership due to alleged improper cash
transfers between the DBZ Special Opportunities Fund, Ltd. (“DBZ Offshore Fund”) and the DBZ
Onshore Fund; and (2) that the Stations are de facto controlled by Fortress, manager of the DBZ Onshore
Fund, without Commission authorization. The Bureau found that Squire had not presented any evidence
regarding, respectively, the foreign ownership percentages of DBZ Onshore Fund or Fortress’s alleged
unauthorized control over the personnel, finances, and programming of the Stations.7 As part of its
analysis, the Bureau stated that the Declarations of Dr. Glenn Cherry and David A. Schum, attached as
exhibits to Squire’s Petitions to Deny, related to different transactions, different licensees, and different
stations, and therefore were not relevant to the Applications.


1 Squire filed a substantially identical Amended Petition for Reconsideration on February 15, 2013.
2 47 C.F.R. § 73.1690(c)(9).
3 A “satellite” station meets all of the Commission’s technical rules. However, it originates no programming and
instead rebroadcasts the parent station’s programming. See Amendment of Multiple Ownership Rules, Memorandum
Opinion and Order, 3 R.R.2d 1554, 1562 (1964).
4 See Shareholders of Stop 26 Riverbend, Inc., Memorandum Opinion and Order, 27 FCC Rcd 6516, 6517 (2012).
5 See File Nos. BAL-20060301ACU; BALH-20060301ACV; BALH-20060301ACW; BAL-20060301ACX; and
BAL-20060301ACY. Bernard’s sole member is Rocklynn Radio, LLC (“Rocklynn”) (previously Bernard Radio
LLC). Rocklynn’s managing and sole voting member is RL Transition Corp and Rocklynn’s insulated non-
managing member (100 percent equity member) is DBZ Onshore Fund. Daniel B. Zwirn (“Zwirn”) is the sole
shareholder of RL Transition Corp. See File No. BTC-20090520ACI, Exhibit 1.
6 Aaron P. Shainis, Esq., Letter, 28 FCC Rcd 126 (MB 2013).
7 Letter Decision at 8.
2

In the Petition, Squire claims that the Bureau “misapprehended” his two primary arguments.
First, Squire contends that the Bureau “incorrectly focused on whether DBZ’s ownership structure was
changed by the cash transfers instead of whether DBZ violated the Communications Act by utilizing
foreign funds in excess of 25% to purchase radio licenses.”8 Such use of “foreign capital” to purchase
domestic radio stations is, according to Squire, “a flagrant violation of §310 [of the Communications Act]
and a threat to national security.”9 Second, Squire argues that the Bureau erred by disregarding his
unauthorized transfer of control arguments relating to other, different licensees and stations, because
“[t]he Petition to Deny alleged . . . repeated and serious violations by DBZ of the Act. There is no
requirement to prove violations only in connection with the licenses up for renewal.”10
In its Opposition, Bernard argues that because Squire’s submission was not sent to the correct
Commission contact, it is “fatally flawed” and should be dismissed on procedural grounds.11 On the
merits, Bernard argues that Section 310 places a limit only on foreign ownership, not on the use of
foreign capital to finance license acquisitions. Moreover, Bernard claims, Squire’s facts on this point are
purely speculative. Bernard also states that the Declaration of Dr. Glenn Cherry has no relevance to
Bernard, as it concerns a different transaction, different stations, and a different licensee.12

Discussion.

The Commission will consider a petition for reconsideration only when the petitioner
shows either a material error in the Commission's original order, or raises additional facts, not known or
existing at the time of the petitioner's last opportunity to present such matters.13 Squire has not met this
burden.
Procedure. Although Squire did not use the correct mailing address,14 the Petition was received
and date-stamped by the Commission mail room—and therefore considered “filed” under Section 1.7 of
the Commission’s rules—on February 8, 2013, well before the statutory deadline of February 11, 2013.15
Accordingly, we will consider Squire’s arguments on the merits.
Foreign Ownership. Squire contends that the purchase of a domestic radio station using “foreign
capital”—whether or not it results in an equity interest—is prohibited by Section 310 of the Act. We do
not agree. Section 310 is clear: A station license shall not be held by “any corporation directly or
indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned
of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or
by any corporation organized under the laws of a foreign country. . . .”16 Petitioner has adduced no
evidence, either below or on reconsideration, that more than 25 percent of DBZ Onshore Fund’s capital
stock is or was “owned of record or voted by aliens,” as prohibited by Section 310. Monies that merely
pass through the channels of international commerce, or are exchanged into or out of a foreign currency,
do not trigger Section 310 if they are not invested as equity capital—an ownership interest—in a U.S.


8 Petition at 3.
9 Id. (referring to 47 U.S.C. § 310(b)(4) (“Section 310”)).
10 Petition at 5.
11 Opposition at 2-3 (citing 47 U.S.C. §405(a); 47 C.F.R. §§ 1.4(b)(5), 1.106(f), 1.7; FCC Announces Change in
Filing Location for Paper Documents
, Public Notice, 24 FCC Rcd 14312 (2009) (“Filing Public Notice”)).
12 Opposition at 6.
13 See 47 C.F.R § 1.106(c),(d). See also WWIZ, Inc., Memorandum Opinion and Order, 37 FCC 685, 686 (1964),
aff'd sub nom. Lorain Journal Co. v. FCC, 351 F.2d 824 (D.C. Cir. 1965), cert. denied, 387 U.S. 967 (1966).
14 See Filing Public Notice, 24 FCC Rcd at 14312.
15 47 C.F.R. § 1.7. Staff also entered into the CDBS database that the Petition had been filed on February 8, 2013.
16 47 U.S.C. § 310(b)(4) (emphasis added).
3

radio station. Therefore, in the Letter Decision, the Bureau correctly examined whether DBS Onshore
Fund’s ownership structure was affected by the alleged cash transfers from DBZ Offshore Fund when
assessing Bernard’s compliance with Section 310, finding that Squire had failed to demonstrate that the
transfers resulted in an impermissible level of foreign ownership.
Unauthorized transfer of control. Squire argues that the Bureau should have taken into account
his factual allegations regarding transactions involving a different licensee and different stations when
assessing the Stations’ renewal applications. Under the plain terms of section 309(k)(1) of the Act, the
Commission cannot deny a renewal based on violations that occurred at a different station. Rather,
section 309(k)(1) states that the relevant findings must be made specifically “with respect to” the station
seeking renewal of its license.17 We also note that the particular allegations contained in the Declarations
of Dr. Glenn Cherry and David A. Schum were separately considered by the Bureau in another
proceeding and did not result in a finding of any rule violation.18 Accordingly, we find that the Bureau
properly rejected those materials submitted by Squire that did not relate to the Stations seeking renewal.

Conclusion

/

Actions

. We find that grant of the Applications was not in error and was consistent
with the public interest, convenience, and necessity. Accordingly, IT IS ORDERED that the Petition for
Reconsideration filed by Percy Squire on February 8, 2013, IS DENIED.
Sincerely,
Peter H. Doyle
Chief, Audio Division
Media Bureau


17 47 U.S.C. §309(k)(1).
18 See Urban Radio I, LLC, Debtor-in-Possession, Letter, Ref. No. 1800B3-MFW (MB Sept. 12, 2012).
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