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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 Application s of) ) ABILENE RADIO AND TELEVISION ) COMPANY ) (Assignor) ) ) and ) File Nos.: BALCT-970722KO/KP ) STC LICENSE COMPANY ) (Assignee) ) ) For Consent to the Assignment of License ) of Stations KRBC-TV, Abilene, Texas ) and KACB-TV, San Angelo, Texas ) MEMORANDUM OPINION AND ORDER Adopted: February 10, 1998 Released: February 12, 1998 By the Chief, Mass Media Bureau: 1. The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority, has before it for consideration the above-captioned unopposed applications for assignment of the licenses of television stations KRBC-TV, Channel 9 (NBC), Abilene, Texas ("KRBC") and KACB-TV, Channel 3 (NBC), San Angelo, Texas ("KACB") from Abilene Radio and Television Company ("Abilene") to STC License Company ("STC"). KACB has operated as a satellite of KRBC since KACB began operations in 1962; however, STC proposes to operate KACB as a full-service station. Because the Grade B contour of KRBC overlaps the Grade B contour of station KACB, STC requests a permanent waiver of the Commission s television duopoly rule (47 CFR  73.3555(b)) to allow common ownership of the stations, or, in the alternative, a temporary duopoly waiver conditioned upon the outcome of the pending broadcast television ownership rulemaking concerning the duopoly and other multiple ownership rules. See Review of the Commission's Regulations Governing Television Broadcasting, Second Further Notice of Proposed Rule Making in MM Docket Nos. 91-221 and 87-8, FCC 96-438 (released Nov. 7, 1996) ("Television Ownership Second Further Notice"). 2. Duopoly Waiver Request. In support of its waiver request, STC has submitted an engineering exhibit which shows that there is no Grade A contour overlap between KRBC and KACB. According to STC, the Grade B overlap area of KRBC and KACB encompasses 16,167 individuals and 5,700 square kilometers, comprising approximately 7.2% of the population and 20.9% of the land area within KRBC s Grade B contour, and 13.5% of the population and 32.7% of the land area within KACB s Grade B contour. While recognizing that the extent of overlap is not de minimis, STC contends that it is "not so large as to require a finding that the stations serve the same market," quoting Sunshine Television, Inc., 8 FCC Rcd 4428, 4432 (1993). STC further asserts that the KRBC/KACB overlap is within the range that the Commission has previously approved. 3. Next, STC maintains that the overlap area will remain well-served by numerous media voices. STC s engineering exhibit demonstrates that four full-power television stations (excluding KRBC and KACB) serve the overlap area, three of which serve 95% or more of the area. A supplemental engineering report submitted by STC indicates that the overlap area is served by 21 commercial radio stations (7 AM, 14 FM). Additionally, according to STC, 87% of the residents of the overlap area have access to cable service. STC also contends that the residents of the overlap area are served by a number of independent print media, as four daily newspapers are published in the Abilene-Sweetwater market and one daily newspaper is published in the San Angelo market. 4. STC asserts that KRBC and KACB serve separate and distinct markets, noting that the stations are located in different DMA's (Sweetwater-Abilene, ranked 160th, and San Angelo, ranked 195th) and licensed to communities separated by more than 90 miles. STC maintains that the stations' location in separate DMA's establishes that they do not compete for programming, viewers or advertisers. Although the station does not yet have the ability to originate local programming, STC avers that it intends to apply for microwave facilities so that programming can be originated live at KACB's studio without the need to transport tapes to the station's transmitter location. According to STC, the proposed acquisition of KRBC and KACB represents a "unique opportunity" to serve the public interest in that no other entity has suggested operating KACB as anything other than a satellite of KRBC. 5. With respect to the effect of the proposed combination on the concentration of economic power in the region, STC notes that the Commission has stated that "as the video marketplace becomes increasingly competitive, as it is today, the potential diversity and competition detriments from overlapping signal contours generally decrease." Citadel Communications Co., 8 FCC Rcd 855, 858 (1993). Pointing to the multitude of competing media in the San Angelo and Abilene markets, STC contends that the likelihood that the common ownership of KRBC and KACB will result in undue concentration of economic power is further reduced. Moreover, says STC, since KRBC and KACB have been commonly owned and operated for more than 25 years, the proposed common ownership of the two stations by STC would in no way diminish economic competition in the region. 6. Discussion. In adopting the duopoly rule s fixed standard of prohibiting overlap of Grade B service contours, the Commission also acknowledged the need for flexibility in that rule s application, noting that waivers should be granted where rigid conformance to the rule would be inappropriate. Multiple Ownership of Standard, FM and Television Broadcast Stations, 45 FCC 1476, 1479 n.12, recon. granted in part, 3 RR2d 1554 (1964). To that end, the Commission has developed a set of factors to be considered when evaluating an applicant s request for waiver of the duopoly rule, including the extent of the overlap, the number of media voices available in the overlap area, the distinctiveness of the respective markets, the independence of the station s operations, and the concentration of economic power resulting from the combination. See Iowa State University Broadcasting Corporation, 9 FCC Rcd 481, 487-88 (1993), aff d sub nom. Iowans for WOI-TV, Inc. v. FCC, 50 F.3d 1096 (D.C. Cir. 1995); H & C Communications, Inc., 9 FCC Rcd 144, 146 (1993). After weighing the factors, the Commission considers any public interest benefits proposed by the applicant to determine whether, in light of the overlap, the benefits outweigh any detriment which may occur from grant of the waiver. See, e.g., Iowa State University, 9 FCC Rcd at 487-88. As with any waiver, it will only be granted if the Commission concludes that the waiver is in the public interest. 7. Currently, the Commission is reexamining its broadcast television ownership policies, including the duopoly rule. In January 1995, the Commission proposed a new analytical framework within which to evaluate its broadcast television ownership rules. See Review of the Commission s Regulations Governing Television Broadcasting, Further Notice of Proposed Rule Making, 10 FCC Rcd 3524 (1995) ( Television Ownership Further Notice ). Subsequent to the release of the Television Ownership Further Notice, Congress directed the Commission to conduct a rulemaking proceeding to determine whether to retain, modify or eliminate existing limitations on the number of television stations that an entity may control within the same television market. See Section 202(c) of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56,111 (Feb. 8, 1996) ( Telecomm Act ). In response to this Congressional directive in the Telecomm Act and to update the record, the Commission released the Television Ownership Second Further Notice. See supra. In that Second Further Notice, the Commission tentatively concluded to authorize common ownership of television stations that are in separate DMA's and whose Grade A contours do not overlap. Television Ownership Second Further Notice, 11 FCC Rcd at 21681,  57. 8. The Commission stated in the Television Ownership Second Further Notice that it will be inclined, during the pendency of the television ownership proceeding, to grant temporary duopoly waivers involving stations in different DMAs with no overlapping Grade A contours, conditioned on coming into compliance with the outcome of the proceeding within six months of its conclusion. It also noted there its tentative conclusion that the record in that proceeding supports relaxation of the geographic scope of the duopoly rule from its current Grade B overlap standard to a standard based on DMAs supplemented with a Grade A overlap criterion. Id. The Commission further stated that we do not believe granting waivers satisfying the proposed standard, and conditioning them on the outcome of this proceeding, will adversely affect our competition and diversity goals in the interim. Id. Additionally, the Commission gave the staff delegated authority to act on applications seeking waivers consistent with this interim policy. 9. Given the clearly articulated policy in the Television Ownership Second Further Notice, we do not believe that an unconditional grant of STC's duopoly waiver is appropriate. See WHOA-TV, Inc., 11 FCC Rcd at 20046-47, 20051. However, we believe that grant of a conditional waiver of the duopoly rule, subject to the outcome of the pending ownership proceeding, is justified. The temporary common ownership of KRBC and KACB would be consistent with the interim policy set forth in the Television Ownership Second Further Notice, as the stations are in separate DMAs and there is no Grade A overlap between KRBC and KACB. Moreover, our examination of the record presented here reveals nothing suggesting that we should not follow the established interim policy in this case. Accordingly, we conclude that grant of a temporary waiver, conditioned on the resolution of the pending broadcast television ownership rulemaking, will serve the public interest, convenience and necessity. Any requests to extend this conditional waiver should be filed at least 45 days prior to the end of the six-month period and would be closely scrutinized. 10. Lastly, we believe that STC's proposal to operate KACB as a full-service station, after more than 25 years as a satellite of KRBC, will benefit viewers in the San Angelo area. In sum, having found STC to be qualified in all respects, we conclude that grant of the applications for assignment of license would serve the public interest. 11. Accordingly, IT IS ORDERED, That the request for permanent waiver of the television duopoly rule, Section 73.3555(b) of the Commission's Rules, to permit the common ownership of television stations KRBC-TV, Abilene, Texas, and KACB-TV, San Angelo, Texas, IS DENIED. 12. IT IS FURTHER ORDERED, That the request for conditional waiver of Section 73.3555(b) of the Commission's rules, to permit the common ownership by STC License Company of television stations KRBC-TV, Abilene, Texas, and KACB-TV, San Angelo, Texas, IS GRANTED, subject to the outcome of the Commission's pending broadcast ownership rulemaking in MM Docket Nos. 91-221 and 87-8. Should divestiture be required as a result of that proceeding, the assignee is directed to file, within six months from the release of the final order in MM Docket Nos. 91-221 and 87-8, an application for Commission consent to dispose of such station as would be necessary for STC License Company to come into compliance with the rules as provided in the final order. 13. IT IS FURTHER ORDERED, That the applications for assignment of license of KRBC-TV, Abilene, Texas and KACB-TV, San Angelo, Texas from Abilene Radio and Television Company to STC License Company (File Nos. BALCT-970722KO/KP) ARE GRANTED, subject to the condition that STC License Company shall construct a main studio for KACB-TV in compliance with Section 73.1125 of the Commission's rules within one year after consummation. FEDERAL COMMUNICATIONS COMMISSION Roy J. Stewart Chief, Mass Media Bureau