******************************************************** 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 ) ) SAMUEL M. ALTDOERFFER, III ) SAMUEL M. ALTDOERFFER, IV ) FRANK H. ALTDOERFFER, II ) JOHN D. ALTDOERFFER ) NANCY B. ALTDOERFFER ) NANCY A. JONES ) (TRANSFERORS) ) ) and )File Nos. BTC-961015GJ )BTCH-961015GK CLEAR CHANNEL METROPLEX, INC.) (TRANSFEREE) ) ) For Transfer of Control of Peoples) Broadcasting Company, Licensee of ) ) WLAN(AM), Lancaster, Pennsylvania) WLAN-FM, Lancaster, Pennsylvania) MEMORANDUM OPINION AND ORDER Adopted: May 20, 1997 Released: July 3, 1997 By the Commission: Introduction 1. The Commission has under consideration (1) the above-captioned applications for transfer of control of 100 percent of the stock of Peoples Broadcasting Company ("Peoples"), licensee of WLAN(AM) and WLAN-FM, Lancaster, Pennsylvania, from Samuel M. Altdoerffer, III; Samuel M. Altdoerffer, IV; Frank H. Altdoerffer, II; John D. Altdoerffer; Nancy B. Altdoerffer; and Nancy A. Jones to Clear Channel Metroplex, Inc. ("Clear Channel"), a subsidiary of Clear Channel Communications; and (2) a related request for a permanent waiver of 47 C.F.R.  73.3555(c), the Commission's one-to-a-market rule. The applications and the waiver request are unopposed. For the reasons set forth below, we deny the permanent waiver request, grant a temporary, conditional waiver, and grant the transfer of control applications. Background 2. Clear Channel Television Licenses, Inc., another subsidiary of Clear Channel Communications, is the licensee of WHP-TV, Harrisburg, Pennsylvania, a UHF CBS affiliate. Harrisburg is part of the Harrisburg-Lancaster-Lebanon-York, Pennsylvania Designated Market Area ("Harrisburg DMA"). Clear Channel Television Licenses, Inc. also has an LMA with WLYH-TV, Lancaster, Pennsylvania, a UHF CBS affiliate. The Grade A contour of WHP-TV encompasses Lancaster, WLAN's and WLAN-FM's community of license. Accordingly, Clear Channel now seeks a waiver of the Commission's one-to-a-market rule in order to permit it to hold ownership interests in these radio stations and WHP-TV. 3. Clear Channel bases its waiver 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 ("Second Report and Order"), recon. granted in part, denied in part, 4 FCC Rcd 6489 (1989) ("Second Report and Order Recon."). Under these criteria, the Commission presumptively favors waiver requests involving top 25 market station combinations where at least 30 separately owned, operated and controlled broadcast licenses or "voices" remain after the proposed combination is consummated, the so-called top 25 market/30 voice standard. The Commission also favors requests involving failed broadcast stations, that is, stations that have not been operating for a substantial period of time, e.g., four months, or that are involved in bankruptcy proceedings. See 47 C.F.R. 73.3555, note 7. Waiver requests not eligible for consideration under either the top 25 market/30 voice standard or the failed station standards are subject to a more rigorous case-by-case review, as set forth in the Second Report and Order. 4. The Harrisburg DMA is the 44th largest television market. Clear Channel states that the proposed transfer of control does not involve "failed" stations. Therefore, this waiver request must be evaluated under the case-by-case standard, which takes into account the following criteria: (1) the potential public service benefits of joint operation of the facilities, such as the 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 the joint operation is implemented. See Second Report and Order, 4 FCC Rcd at 1753-54. Not all of these factors may be relevant in every case. See Second Report and Order Recon., 4 FCC Rcd at 6491. Clear Channel submits a showing which addresses each of the five criteria. Waiver Showing 5. Benefits of Joint Operation. Clear Channel estimates $270,000 in savings annually from common ownership of WHP-TV, WLAN and WLAN-FM. This savings will include $120,000 in administrative salary reductions resulting from combined staff efficiencies and $150,000 per year in station cross-promotions. Clear Channel also intends to engage in joint promotion of public service campaigns and other community events. It asserts that the total cost savings derived from common ownership of the television station and the two radio stations will make it possible to provide additional public service programming to Harrisburg and Lancaster. 6. Other Media Outlets/Types of Facilities. UHF station WHP-TV operates on channel 21, with an authorized power of 1,200 kW maximum visual effective radiated power at 1220 feet height above average terrain ("HAAT"). WHP-TV competes with one VHF station licensed to Lancaster. There are also two UHF stations currently with higher power than WHP-TV which are licensed to Harrisburg and York. WLAN operates on 1390 kHz with authorized power of 5 kW daytime and 1 kW nighttime. WLAN-FM is a 50 kW station operating at 500 feet HAAT. Clear Channel asserts that the radio facilities that it proposes to own are comparable to other stations in the market. Specifically, Clear Channel points out that, like WLAN-FM, there are four FM stations with authorized power of 50 kW that will not be under Clear Channel's control. With regard to the AM facilities, there are five AM stations with the same authorized power as WLAN (5 kW), none of which will be under Clear Channel's control. Clear Channel owns no other media outlets in the Harrisburg market. Clear Channel does have an LMA with WLYH-TV (Channel 15), a "2" share UHF station. Clear Channel states that three other television stations in the market, not owned by Clear Channel, have substantially higher audience shares: WGAL-TV (VHF; NBC affiliate; "25" share); WHTM-TV (UHF; ABC affiliate; "14" share); and WPMT-TV (UHF; Fox affiliate; "7" share). WHP-TV's market share is "12." 7. Financial Condition. Clear Channel states that none of the broadcast stations at issue is in financial distress. 8. Competition and Diversity. Clear Channel asserts that its ownership of WHP-TV, WLAN and WLAN-FM would have no significant impact upon media diversity or advertising competition in the highly competitive Harrisburg market. The Harrisburg DMA has 578,910 television households. Clear Channel has provided a showing which indicates that there are 18 AM stations and 30 FM stations licensed in the Harrisburg television metro market and 1 VHF station and 6 UHF stations licensed in the Harrisburg DMA. These 48 radio stations and 7 television stations are licensed to 45 separate owners. Clear Channel states that a wide variety of other media also are available, including local newspapers, cable television, and four low power television stations. In particular, Clear Channel states that the Harrisburg market is served by 39 cable operators, reaching 71.4 percent of total households. In addition, there are 460,500 VCR households (81 percent penetration rate), and ten daily newspapers and 15 weekly publications. Discussion 9. Local Marketing Agreement. Before considering Clear Channel's request for a waiver of the one-to-a-market rule, we must determine what weight, if any, we should accord Clear Channel's existing LMA with WLYH-TV in assessing that request. Currently, television LMAs are not attributable to the brokering station, nor, taken alone, are they considered a "meaningful" relationship within the scope of the cross-interest policy. At present, therefore, we will not accord significance to Clear Channel's existing television LMA in evaluating its ownership waiver request. We note, however, that we have proposed to attribute television LMAs to the brokering station where the stations involved are in the same market and the brokerage arrangement includes more than 15% of the brokered station's weekly broadcast hours. Further Notice of Proposed Rulemaking, MM Docket Nos. 94-150, 92-51 and 87-154, FCC 96-436 at para. 27 (released November 7, 1996). Further, we have proposed that any LMA which would be attributable for duopoly rule purposes under this approach "would also count in applying our other ownership rules, including, for example . . . the one-to-a-market rule (or radio-television cross-ownership rule)." Id. (footnotes omitted). And, while we have proposed to grandfather those LMAs -- such as the LMA here -- that were entered into prior to the November 5, 1996 adoption date of the Second Further NPRM, we have also indicated that we would "reserve the right . . . to invalidate an otherwise grandfathered LMA in circumstances that raise particular competition and diversity concerns, such as those that might be presented in very small markets." Id. at para. 88. Our decision here in no way prejudges the resolution of LMA attribution in our pending ownership and attribution proceedings. Thus, if we establish final rules for attributing and grandfathering LMAs, we would also assess whether the class of transactions involving radio, television and LMA interests, such as those involved in this case, should be permitted to continue. Consistent with our treatment of transactions raising similar issues, we will condition the one-to-a-market waiver we grant here on the outcome of these rulemakings. See REP WWBB G.P., at para. 11; S.E. Licensee G.P., 11 FCC Rcd 16727, 16732 (1996). 10. One-to-a-Market Waiver. Clear Channel would realize substantial cost savings and economic benefits from the joint ownership of WHP-TV, WLAN and WLAN-FM. In total, Clear Channel projects that consummation of the proposed acquisition would produce immediate annual savings of $270,000. In addition, Clear Channel states that the stations will undertake cross- promotions, which we have recognized as "one of the most significant benefits of joint ownership of radio and television stations in the same market." Second Report and Order, 4 FCC Rcd at 1747 (footnote omitted). 11. The Commission has stated that "combinations involving UHF TV, small AM or Class A FM stations may provide relatively greater public interest benefits and impose relatively fewer public interest costs." See Second Report and Order, 4 FCC Rcd at 1753. The combination for which the instant waiver is requested involves a UHF station, WHP-TV, which competes in the Harrisburg market with one VHF and five UHF stations, two of which garner larger audience share ratings than WHP-TV. Although WLAN-FM is a 50 kW station, Clear Channel has shown that four other FM stations in the market not under Clear Channel's control also are authorized to operate at 50 kW. Additionally, WLAN is a 5 kW daytime/1 kW nighttime AM station. Given the substantial competing facilities in the Harrisburg market, we find on balance that the proposed transfer of control of Peoples does not present issues of market dominance inconsistent with our core competition and diversity concerns. 12. Although Clear Channel states that none of the broadcast stations at issue is in financial distress, we have previously indicated that not all five factors need be present to justify a one-to-a- market waiver. See Second Report and Order Recon., 4 FCC Rcd at 6491; Great American Television and Radio Co., Inc., 4 FCC Rcd 6347, 6349 (1989). We have also granted a number of one-to-a-market waivers where there was no finding that any of the stations were financially troubled. See, e.g., Louis C. DeArias, 11 FCC Rcd at 3666; Atla Gulf FM, Inc., 10 FCC Rcd 7750, 7751 (1995); Secret Communications, L.P., 10 FCC Rcd 6874, 6877 (1995). 13. Finally, we are persuaded that the proposed combination will not create any undue concentration of ownership or control of the broadcast media in the Harrisburg market. The market is highly competitive, both in terms of the station market shares and the number of other broadcast outlets. We have confirmed Clear Channel's assertion that there are 18 AM stations and 30 FM stations licensed in the Harrisburg television metro market and 1 VHF station and 6 UHF stations licensed in the Harrisburg DMA. These 48 radio stations and 7 television stations are licensed to 45 separate owners. It also appears that a wide variety of other media are available, including 39 cable systems, which reach 71.4 percent of total households, ten daily newspapers, 15 weekly publications, and four low power television stations. We have waived  73.3555(c) in similar circumstances. See Louis C. DeArias, 11 FCC Rcd at 3666 (31 separate voices, 2 daily newspapers, and 57.9 percent cable penetration); Moosey Communications, Inc., 8 FCC Rcd 5247, 5249 (1993) (24 separate voices, 1 daily newspaper, and 73 percent cable penetration); Liggett Broadcast, Inc., 7 FCC Rcd 7124, 7125-26 (1992) (28 separate voices, 7 daily newspapers, and 51 percent cable penetration); South Central Communications Corp., 5 FCC Rcd 6697, 6698-99 (1990) (26 separate voices, 2 daily newspapers, and 61.9 percent cable penetration). 14. With respect to economic concentration and competition, our independent analysis indicates that WLAN(AM)/-FM garner a 17.4 percent share of the radio advertising revenue in the Lancaster market, while WHP-TV garners 12.9 percent of television advertising revenue. Together, these stations garner 13.5 percent of the market's broadcast advertising revenue. Based on these revenue shares, we do not believe that the proposed transfer of control would affect unduly diversity and competition in the Harrisburg market. 15. We conclude that a temporary, conditional waiver is warranted. The Harrisburg market is both diverse and highly competitive, and this transaction involves a non-dominant UHF television station. While Clear Channel's commonly-owned facilities are technically significant, competing facilities do exist. Moreover, the economic efficiencies and program service benefits that would result from the consummation of the proposed transaction support grant of a temporary, conditional waiver. Ordering Clauses 16. Accordingly, IT IS ORDERED, That the request for a permanent waiver of the Commission's one-to-a-market rule, 47 C.F.R. 73.3555(c), to permit common ownership of Stations WLAN and WLAN-FM, Lancaster, Pennsylvania IS HEREBY DENIED. 17. IT IS FURTHER ORDERED, That a temporary waiver to permit common ownership of Stations WLAN and WLAN-FM, Lancaster, Pennsylvania IS HEREBY GRANTED, subject to the outcome in the pending television ownership rulemaking proceeding, Second Further Notice of Proposed Rulemaking, MM Docket Nos. 91-221 & 87-8, FCC 96-438 (released November 7, 1996), and in the pending broadcast attribution proceeding, Further Notice of Proposed Rulemaking, MM Docket Nos. 94-150, 92-51 and 87-154, FCC 96-436 (released November 7, 1996). Should divestiture be required as a result of those proceedings, Clear Channel Metroplex, Inc. is directed to file an application for Commission consent to sell the necessary station(s) within six months from the release of the Orders in those proceedings. 18. IT IS FURTHER ORDERED, That, having found the applicants fully qualified, the above-captioned applications for transfer of control of Peoples Broadcasting Company, licensee of WLAN and WLAN-FM, Lancaster, Pennsylvania, from Samuel M. Altdoerffer, III; Samuel M. Altdoerffer, IV; Frank H. Altdoerffer, II; John D. Altdoerffer; Nancy B. Altdoerffer; and Nancy A. Jones to Clear Channel Metroplex, Inc. (File Nos. BTC-961015GJ and BTCH-961015GK) IS HEREBY GRANTED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary