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MALTZj) (Transferor)j) j)  Xh -andj)File Nos. BTCCT980421IBG  XQ -j)pp BTCTT980430IA RAYCOM MEDIA, INC.j) (Transferee)j) j) For Consent to the Transfer of Controlj) of Malrite Communications Group, Inc., j) Licensee or Controlling Corporation of the j) Licensee of:j) j)  X-WFLX(TV), West Palm Beach, FLj)pp  Xk-WNWOTV, Toledo, OHj)pp  XT-WXIXTV, Newport, KY j)pp  X=-WOIO(TV), Shaker Heights, OHj)pp  X&-WLII(TV), Caguas, PR j)pp  X-WSURTV, Ponce, PR j)pp  X-W50AW, Vero Beach, FLj)pp  X-  MEMORANDUM OPINION AND ORDER lU  X-X` hp x (#%'0*,.8135@8:Iowans for WOITV, 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  X-  benefits outweigh any detriment which may occur from grant of the waiver. See, e.g., Iowa State  X~-  =University, 9 FCC Rcd at 48788. As with any waiver, it will only be granted if the Commission concludes that the waiver is in the public interest.  X;- ] 4. Currently, the Commission is reexamining its broadcast television ownership policies,   /including the duopoly rule. In the Telecommunications Act of 1996, Congress directed the  X -  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  X -  within the same television market.  See Section 202(c) of the Telecommunications Act of 1996,   Pub. L. No. 104104, 110 Stat. 56 (Feb. 8, 1996). Pursuant to that Congressional directive and  X -  xto update the record, the Commission released a second notice, the Television Ownership Second  X-  ZFurther Notice, to its pending television ownership proceeding. See Review of the Commission's  X-  Regulations Governing Television Broadcasting, Further Notice of Proposed Rule Making, 10 FCC Rcd 3524 (1995).  XF- 5. In the Television Ownership Second Further Notice, the Commission stated that it will   be inclined, during the pendency of the television ownership proceeding, to grant 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.   KIt 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  X-  istandard based on DMAs supplemented with a Grade A overlap criterion." Television Ownership  X-  Second Further Notice, 11 FCC Rcd at 21681. The Commission further stated that "we do not   believe granting waivers satisfying the proposed standard, and conditioning them on the outcome  X}-  =of this proceeding, will adversely affect our competition and diversity goals in the interim." Id.   yAdditionally, the Commission gave the staff delegated authority to act on applications seeking   waivers consistent with this interim policy. With regard to waiver requests not falling in this  X:-  category, i.e., those involving stations in the same DMA or with overlapping Grade A contours,   the Commission stated it would be disinclined to grant them during the pendency of the television  X-ownership proceeding absent extraordinary circumstances. Id.   X - Stations WNWOTV and WOIO(TV) Conditional Waiver  X"- 06. Waiver Showing. Preliminarily, Raycom asserts that the market circumstances which   justified the Commission's 1996 grant of a permanent duopoly waiver allowing Malrite's common   zownership of stations WNWOTV and WOIO(TV) have not significantly changed, and that   zcontinuation of the existing waiver is appropriate. In the alternative, Raycom maintains that   ystations WNWOTV and WOIO(TV) meet the Commission's interim policy on duopoly waivers   Zbecause no Grade A overlap exists between the stations, which are located in cities approximately"C',-(-(ZZ%"   105 miles apart and in separate markets, with station WNWOTV located in the Toledo, Ohio   Designated Market Area (DMA), ranked 66th in size, and station WOIO(TV) located in the Cleveland, Ohio DMA, ranked 13th in size.  7. Raycom also states that, as the Commission found at the time it granted Malrite a   permanent duopoly waiver, the predicted Grade B contour overlap between stations WNWOTV   and WOIO(TV) remains insubstantial since the technical facilities of the stations have not been   altered since 1996. In support, Raycom submits an Engineering Exhibit, which demonstrates that   mthe predicted Grade B overlap encompasses 352 square kilometers and 47,204 people,   representing 1.92 percent of the area and 2.25 percent of the population within station WNWO  TV's predicted Grade B contour, and 2.66 percent of the area and 1.35 percent of the population  X -  within station WOIO(TV)'s predicted Grade B contour. According to Raycom, though not de  X -  minimis, the Grade B overlap falls well within the range of those approved by the Commission in granting previous waivers.  8. In addition, Raycom contends that its common ownership of stations WNWOTV and   WOIO(TV), which remain affiliated with separate networks, will not impair the underlying   diversity and competition goals of the Commission's duopoly rule. To this end, Raycom asserts   that the degree of diversity has not changed since the 1996 waiver grant. Raycom claims that   [14 stations continue to provide Grade B or better service to the overlap area, with two of those   kstations serving virtually the entire area, and seven stations serving the entire overlap area.   /Furthermore, Raycom states, as in 1996, a wide variety of cable systems, radio stations and newspapers continue to serve the overlap area.  9. As for competition, Raycom indicates that nearly all of the overlap area falls in Erie   [and Huron Counties, which are part of the Cleveland DMA. In this regard, Raycom states that   station WOIO(TV), a UHF station licensed to the Cleveland DMA and affiliated with the CBS   >television network, faces stiff competition in the Cleveland market from three VHF stations,   GannettNBCowned station WKYCTV (Channel 3, NBC), FOXowned station WJWTV   (Channel 8, FOX) and Scripps Howard Broadcastingowned station WEWS(TV) (Channel 5,   .ABC). Raycom further notes that another CBSaffiliated station, WTOLTV, Toledo, provides   service to the overlap area. With respect to station WNWOTV, Raycom states that that station   receives no reportable Nielsen ratings in the Cleveland DMA, whose residents "naturally turn to   their local NBC affiliate . . . VHF station WKYCTV rather than to the NBC affiliate in Toledo,   .UHF station WNWOTV." Also with respect to diversity and competition in the overlap area,   KRaycom pledges to maintain separate management, programming and sales operations of stations   WNWOTV and WOIO(TV). Finally, Raycom concludes, the fact that grant of its requested   duopoly waiver will create no new television ownership combination, but merely maintain the status quo, mitigates against any adverse impact on diversity and competition in the overlap area.  Xl$-  10. Discussion. Given the clearly articulated policy in the Television Ownership Second  XW%-  Further Notice, we do not believe that grant of Raycom's request for a continuation of the  XB&-  permanent duopoly waiver accorded Malrite in 1996 is appropriate. See WHOATV, Inc., 11 FCC   Rcd 20041, 2004647, 20051 (1996). However, we believe that grant of a conditional waiver of"-',-(-(ZZ%"   Mthe duopoly rule, subject to the outcome of the pending ownership proceeding, is justified.   /Because the two stations are in separate DMAs and the stations' Grade A contours do not   overlap, the temporary common ownership of stations WNWOTV and WOIO(TV) would be  X-  consistent with the interim policy set forth in the Television Ownership Second Further Notice.   Moreover, our examination of the record presented here reveals nothing suggesting that we should  X-  ynot follow the established interim policy in this case. Accordingly, we conclude that grant of a   temporary waiver, conditioned on the applicant coming into compliance with the outcome of the   pending television ownership rulemaking proceeding within six months of its conclusion, will   serve the public interest, convenience and necessity. Any request to extend the conditional waiver   should be filed at least 45 days prior to the end of the sixmonth period and will be closely scrutinized.  X - Stations WUPW(TV), WNWOTV and WOIO(TV) Temporary Waivers  X - ^11. As mentioned supra  2, the predicted Grade B contours of stations WNWOTV,   Toledo, and WOIO(TV), Shaker Heights, overlap with that of Raycom's Toledo station,   0WUPW(TV). However, Raycom has filed an application to assign the license of station  X}-  WUPW(TV) in furtherance of an agreement to sell that station to STC Broadcasting. Given the   [pendency of that assignment application, Raycom requests two sixmonth, temporary duopoly   Mwaivers to permit its common ownership and control of the three stations during the period necessary to complete the sale of station WUPW(TV).  X - 12. Stations WOIO(TV) and WUPW(TV) Waiver Showing. According to Raycom,   stations WOIO(TV) and WUPW(TV) meet the Commission's interim duopoly policy because no   Grade A overlap exists between the stations which are located in separate markets, with station   =WOIO(TV) in the Cleveland DMA and station WUPW(TV) in the Toledo DMA. Furthermore,   Raycom describes the predicted Grade B overlap of the stations as very slight, constituting 1.49   Mpercent of the area and 1.19 percent of the population within station WOIO(TV)'s predicted   LGrade B contour, and 1.38 percent of the area and 2.91 percent of the population within station  Xk-  WUPW(TV)'s predicted Grade B contour. Raycom maintains that, while not de minimis, this degree of overlap is well within the range of overlaps permitted in recent duopoly waivers.  13. With regard to diversity and competition, Raycom claims that the   .WOIO(TV)/WUPW(TV) overlap area, which falls essentially in the same area of the Cleveland   DMA as the WOIO(TV)/WNWOTV Grade B overlap, enjoys a wide variety of media outlets.   Specifically, Raycom states that 14 other television stations provide Grade B or better service to   all or part of the overlap area, with two of those stations serving 99 percent, and seven of those  X!-  stations serving the entire, overlap area. See supra  8. Raycom also asserts that stations   WOIO(TV) and WUPW(TV) do not significantly compete in the overlap area, which chiefly falls   min the Cleveland DMA. In this regard, Raycom asserts that its FOXaffiliated station,   WUPW(TV), neither significantly competes, nor receives reportable ratings in the Cleveland   DMA, where residents instead view the local VHF, FOXowned station, WJWTV. Furthermore,   station WOIO(TV), a CBS affiliate, competes with at least one other CBS affiliate which provides   service to the overlap area, and faces strong competition in the Cleveland DMA from stations"-',-(-(ZZ%"  X-  zWKYCTV (NBC), WJWTV (FOX) and WEWS(TV) (ABC), supra  9. Also with respect to   the Commission's concerns regarding competition, Raycom pledges to continue the separate   operations of each station, including separate sales staffs, management and programming during the temporary waiver period.  X- 14. Stations WNWOTV and WUPW(TV) Waiver Showing. In turning to its other request,   Raycom acknowledges that stations WNWOTV and WUPW(TV) do not meet the Commission's   interim duopoly policy because their Grade A contours overlap and they are located in the same   market, the Toledo DMA. However, Raycom contends that, in other cases where stations failed   to meet the interim standard, the Commission has granted temporary waivers based on   "extraordinary circumstances," and has recognized that temporary duopoly waivers are appropriate   to encourage commerce by facilitating multiplestation transactions. According to Raycom, the   >multiplestation nature of the proposed transfer of control and the multitude of other media   \serving the overlap area create such "extraordinary circumstances," warranting grant of the requested waiver.  15. As for the degree of overlap, Raycom states that the predicted Grade B contour of   station WNWOTV encompasses the entire, somewhat smaller, predicted Grade B contour of   Lstation WUPW(TV). Raycom argues, however, that the degree of overlap is not determinative   in analyzing a temporary duopoly waiver request. Though the overlap here is substantial,   Raycom maintains that the Commission has found the degree of overlap a more critical concern   in cases involving permanent duopoly waiver requests than in cases, such as this one, involving   temporary requests. Raycom asserts, moreover, that the Commission has previously granted   temporary waivers to samemarket duopolies in markets larger and smaller than that involved in   this case, the Toledo DMA, in order to facilitate multiplestation transactions, such as the one at  X-issue here.)? {O>-  ԍ In support, Raycom refers to the Commission's grant of a temporary duopoly waiver in: (1) The Providence  {O-  KJournal Co., 12 FCC Rcd 2883, 2885 (1997), which involved a predicted Grade B overlap area representing 100   percent of the area and population within the Grade B contour of station KIROTV, Seattle, Washington, and 87   percent of the area and 98 percent of the population within the Grade B contour of station KINGTV, Seattle,  {Ob-  <Washington; and (2) Capital Cities/ABC, 11 FCC Rcd 5841 (1996), which involved a predicted Grade B overlap   Jrepresenting 100 percent of the area and population within the Grade B contour of station KCALTV, Los Angeles,   California, and 97.6 percent of the area and 99.4 percent of the population within the Grade B contour of station   KABCTV, Los Angeles, California. Raycom also notes that the Commission granted two temporary duopoly  {O-  ;waivers in AFLAC Broadcasting, Inc., 12 FCC Rcd 3907 (1997), which involved almost complete Grade A overlaps between samemarket stations in the HattiesburgLaurel and Savannah DMAs. )  16. According to Raycom, in at least two of those samemarket duopoly cases, the   jCommission noted that the temporary waivers were supported by the diversity of voices in the   DMAs at issue. To wit, Raycom claims that the WNWOTV/WUPW(TV) overlap area is served   by a high number of television stations and other media outlets. More specifically, Raycom states   ythat, excluding stations WNWOTV and WUPW(TV), five other fullservice television stations   serve the market, including two competitively stronger VHF stations, WTVGTV (Channel 13,"$h ,-(-(ZZ>"   ABC) and WTOLTV (Channel 11, CBS). In addition, 32 other television stations in adjacent   DMAs provide Grade B or better service to all or part of the overlap area, and 110 radio stations   are either licensed to communities within the overlap area, or provide service to that area from   adjacent counties. Raycom also points to the wide variety of alternative media in the Toledo   DMA, which includes 29 daily newspapers, 56 weekly publications, 28 cable operators with a   [cable penetration of 67 percent and four wireless cable operators. Given this level of diversity,   NRaycom concludes that "the brief period of coownership would not so adversely affect   Kcompetition and diversity as to outweigh the benefits of accommodating the reasonable business needs of this multistation, multimarket transaction."  !17. Raycom further claims that the different network affiliations of stations WNWOTV   and WUPW(TV), NBC and FOX, respectively, significantly minimizes the potential impact of   the requested temporary duopoly waiver on diversity and competition. Excluding stations   WNWOTV and WUPW(TV), moreover, the residents in the overlap area receive service from   up to four other NBCaffiliated stations and up to three other FOXaffiliated stations. As a final   matter related to competition, Raycom states that it will maintain the separate management, programming and sales operations of each station.  }18. Lastly, Raycom maintains that requiring an immediate divestiture of one of the   Toledo stations would pose an undue hardship on the parties without any meaningful public   interest benefits. On the other hand, grant of a temporary duopoly waiver for the limited time  X-  -needed to complete the sale of station WUPW(TV) would serve the public interest by, inter alia,   encouraging investment in the broadcast industry and allowing for the free transferability of broadcast licenses without undermining the diversity and competition goals of the duopoly rule.  X- 19. Discussion. Based on our review of the record in this case, we conclude that Raycom   has justified grant of a sixmonth, temporary waiver to permit its common ownership and control   of stations WUPW(TV) and stations WOIO(TV) and WNWOTV. Although we stated in the  X-  Television Ownership Second Further Notice that we would, during the pendency of the television   Lownership proceeding, be disinclined to grant waivers inconsistent with our interim policy, we   believe, based on the totality of the circumstances presented here, that brief, fixed waivers of the television duopoly rule are warranted.  {20. Along this line, the Commission has previously stated that it is not constrained from   granting a temporary waiver where circumstances "will not significantly frustrate the policies  X-  underlying the multiple ownership rules." Telemundo Group, Inc., Debtor in Possession, 10 FCC  X -  Rcd 1104, 1106 (1994) (quoting Family Television Corp., 59 RR2d 1344, 1348 (1986)). In light   Zof the numerous broadcast and other media voices serving the overlap areas in the Cleveland and   Toledo DMAs, we believe that allowing Raycom to commonly own and control station   LWUPW(TV) and stations WOIO(TV) and WNWOTV for a brief period will not undermine our   twin goals of promoting diversity in programming and viewpoints, and fostering economic   competition. Moreover, Raycom has pledged to operate these stations independently during its   <brief period of common ownership and control. We note, too, that the Commission has approved   .other samemarket duopoly waivers to facilitate multiplestation transactions, including a case"-',-(-(ZZ%"   Ninvolving samemarket stations in smaller DMAs than Toledo, whose Grade A contours  X-  overlapped. See AFLAC Broadcasting, Inc., 12 FCC Rcd 3907. As in the case of multiple  station transactions where the Commission has granted temporary waivers for duopolies   <inconsistent with the interim policy, we believe that grant of the waiver requested in this case will  X-  "promote commerce [and] encourage investment in the broadcast industry."  Stockholders of CBS  X-  /Inc., 11 FCC Rcd 3733, 3755 (1995). Based on these factors, we conclude that diversity and   competition in the Cleveland and Toledo DMAs will not be adversely affected by a short period   of common ownership and control of station WUPW(TV) and stations WOIO(TV) and WNWOTV.  21. Finally, the Commission has previously considered an applicant's expressed   commitment to divest a station involved in a duopoly as a factor in granting a temporary waiver.  X -  LSee ITTDow Jones Television, 13 FCC Rcd 4678 (MMB 1998); Providence Journal Company,   12 FCC Rcd at 2888. Raycom has not only expressed its commitment to divest station   iWUPW(TV), but has executed an agreement to sell the station to STC Broadcasting, and has filed   an assignment of license application in accordance with that agreement. Such actions corroborate Raycom's intention to divest station WUPW(TV) as expeditiously as possible.  22. For these reasons, we believe that grant of the requested waivers will serve the public   =interest, convenience and necessity. Accordingly, we will grant Raycom sixmonth waivers of   the television duopoly rule to permit its temporary common ownership and control of station   WUPW(TV) and stations WOIO(TV) and WNWOTV. Any request to extend these temporary   waivers should be filed at least 45 days prior to the end of the sixmonth period and will be closely scrutinized.  CONTINUED SATELLITE REQUEST  X- O23. Continued Satellite Showing. In furtherance of its proposed transfer of control,   jRaycom requests continued satellite status for station WSURTV, which operates as a satellite   of station WLII(TV). Note 5 to Section 73.3555 of the Commission's rules exempts from   application of the multiple ownership rules those television stations that are "satellite" operations.  XA-  In Television Satellite Stations, 6 FCC Rcd 4212, 4215 (1991) (Television Satellite Stations), the   Commission established the requirement that all applicants seeking to transfer or assign satellite   ]stations justify continued satellite status by demonstrating compliance with a threepart   "presumptive" satellite exemption standard applicable to new satellite stations. Alternatively,   applicants may demonstrate that there exist "other compelling circumstances" to warrant continued   satellite authorization. The presumptive satellite exemption is met if the following three public   interest criteria are satisfied: (1) there is no City Grade overlap between the parent and the   satellite; (2) the proposed satellite would provide service to an underserved area; and (3) no   =alternative operator is ready and able to construct or to purchase and operate the satellite as a  Xt$-  Lfullservice station. Id. at 421214. Applications meeting this criteria, when unrebutted, will be  X_%-  !viewed favorably by the Commission. Id. at 4214. If an applicant cannot qualify for the  XJ&-  presumption, we will evaluate the proposal on an ad hoc basis and grant the application if there  X5'-  are compelling circumstances that warrant approval. Id. While Raycom does not meet all three"5',-(-(ZZ%"   Kof the presumptive criteria, for the reasons discussed below, we find that the continued operation   ]of station WSURTV as a satellite of station WLII(TV), which have overlapping Grade B  X-contours, would be consistent with our policy based on an ad hoc analysis.  24. As an initial matter, Raycom concedes that it fails to meet the first two presumptive   criteria because citygrade contour overlap exists between the parent and satellite stations, here,   and station WSURTV does not provide service to an underserved area. For the purposes of the   second criterion, an area is deemed underserved if, under the "transmission test," there are two   or fewer fullservice stations already licensed to the proposed satellite community of license, or,   .under the "reception test," 25 percent or more of the area within the proposed satellite's Grade   ]B contour, but outside the parent's Grade B contour, receives four or fewer services, not   Lincluding the proposed satellite service. Raycom states that it fails the transmission test since   Ponce has four other commercial television stations. Of those stations, Raycom further remarks,   two operate as satellites of San Juan area stations, one rebroadcasts the programming of another   -San Juan station and one operates under a unique television broadcast system utilizing a number  X -  of speciallyauthorized high power booster stations across the island.e ? yO"-ԍ These are stations WKPV, WVOZ, WTIN and WSTE, respectively.e In noting the nature of the   other stations' operations, Raycom also asserts that the Commission has found satellite or   rebroadcast arrangements to be "`essential to the provision of programming choices to Ponce, a   kcommunity that is effectively isolated from the island's economic center in San Juan.' [citing  XM-  lCanal 48, Inc., 8 FCC Rcd 2193, 2194 (1993)]." Raycom indicates that it likewise fails the   reception test, suggesting that there is no area constituting at least 25 percent of station WSUR  zTV's Grade B contour which receives four or fewer services. However, Raycom argues that,   given the geographically small, highly concentrated nature of the Puerto Rican market, it would   be difficult for any television station to show a sufficient lack of predicted Grade B service to satisfy the reception test.  ^25. Notwithstanding its inability to satisfy the first two presumptive criteria, Raycom   icontends that Puerto Rico's special geographic characteristics warrant grant of continued satellite   exemption status for station WSURTV. More specifically, Raycom refers to the fact that the   Lentire island of Puerto Rico is one market, approximately 125 miles long and 40 miles wide, with   a central mountain range that not only separates the island from east to west, but divides it into   three basic areas, San Juan, Ponce and AguadillaMayaguez. In addition, the mountain range   Oseparates Ponce, which is served by station WSURTV, from the more populous San   <Juan/Caguas/Fajardo area served by station WLII(TV). Raycom asserts that the Commission has   ypreviously 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, but less populous areas of the island. Puerto Rico's special   geographic characteristics and their effect on overtheair coverage of television stations, Raycom   jfurther maintains, has formed the basis for the Commission's grant of satellite exemption status   [for other island stations, including repeated authorizations for station WSURTV to operate as a satellite of station WLII(TV). "l$ X,-(-(ZZF#"Ԍ ԙ26. With respect to the third criterion, which requires a showing that no alternative   Koperator is ready and able to purchase and operate the proposed satellite as a fullservice station,   Raycom begins by arguing that the Ponce area alone lacks the population and economic base to   sustain fullservice station operations. Like other Ponce stations, Raycom asserts, station WSUR  TV, has experienced serious financial difficulties. In support of this assertion, Raycom submits   a statement from John C. Chaffee, Jr., President and Chief Operating Officer of Estrella, in which   he relates the difficulties confronting television stations in Puerto Rico. Principally, Mr. Chaffee   refers to the serious financial problems stemming from the island's rugged terrain, which causes   j"grossly inferior signal coverage" and makes it impossible for station WLII(TV) at Caguas/San   Juan to cover Ponce on the south coast or communities on the west coast, or for a station in   Ponce, like station WSURTV, to cover adequately San Juan and the west coast. In addition, he   .relates the troubled financial history of station WSURTV, which was controlled and operated   by American Colonial Broadcasting Corporation (American Colonial) as a satellite of station   WLII(TV) from the early 1960s until 1981, when American Colonial became bankrupt and both   kstations ceased operations. According to Mr. Chaffee, in 1985, following approval from the   bankruptcy court, the Commission granted the new licensee of station WSURTV continued   satellite exemption status for that station, questioning its ability to operate independently when it had already failed as a satellite.  ^27. As described by Mr. Chaffee, moreover, Ponce is a smaller community which has   inot enjoyed economic growth and has uncertain prospects for large scale economic improvement.   Mr. Chaffee asserts that less than one percent of the total revenues generated by stations WSUR  TV and WLII(TV) derive from sales in the Ponce area, such revenues falling far below the costs   =of sustaining station WSURTV's operations. In Mr. Chaffee's opinion, there is no reasonable   likelihood that station WSURTV could operate as a fullservice, standalone station. Given that   =station's past financial trouble, the history of Puerto Rican television stations and the "unique   Ztechnical circumstances" in Puerto Rico, he reasons that, "no prudent business person . . . would   /be willing to invest in the acquisition of WSURTV for the purpose of operating it as a fullservice standalone station."  28. Also in support of the third criterion, Raycom submits a statement from Francis A.   ^L'Esperance III, Managing Director of Veronis, Suhlar & Associates, a New York firm  X -  specializing in mergers and acquisitions, who, inter alia, also worked as a media investment   .banker for 12 years. Like Mr. Chaffee, Mr. L'Esperance believes that it would be unreasonable   to expect to find a qualified buyer who would purchase station WSURTV and operate it as a   \fullservice, standalone facility. Mr. L'Esperance bases his opinion on station WSURTV's   Linsufficient revenues and the current environment in which buyers are aware of the impending   need to convert stations from NTSC to DTV service. In this regard, it is Mr. L'Esperance's view   -that "the revenues which could be generated by a standalone WSURTV would be substantially   insufficient to sustain a viable fullservice television operation," and would fall far short of   supporting the type of major expenditure necessary to convert the station's operations from NTSC   \to DTV. He believes, too, that "there is a need for the efficiencies of satellite operations for   MWSURTV to continue to supply offair program service to Ponce." For these reasons, Mr.   L'Esperance states that, if solicited to broker station WSURTV as a fullservice, standalone"%' ,-(-(ZZ%" station, he would respectfully decline.  X- _29. Discussion. In Television Satellite Stations, the Commission stated that if an  X-  xapplicant cannot qualify for the presumption, its proposal would be evaluated on an ad hoc basis,   and granted if there are compelling circumstances that warrant approval. 6 FCC Rcd at 4213.   =The Commission also indicated that the "degree of departure from the presumptive criteria will  Xz-  also influence our decision" under the ad hoc approach. Id. Here, the deviation is not   insubstantial given Raycom's inability to satisfy the first two presumptive criteria. However,   jRaycom has demonstrated the unlikelihood of finding an alternative operator who is ready and   .able to operate station WSURTV as a standalone facility, thereby meeting the third criterion.   We believe, moreover, that Raycom has shown compelling circumstances which justify satellite  X -  Zoperations under an ad hoc analysis. In this regard, we note that station WSURTV has operated   as a satellite of WLII(TV) for over 30 years, during which time it experienced serious financial   troubles resulting in bankruptcy. Furthermore, the record strongly suggests that Ponce, station   ZWSURTV's community of license, lacks the population and economic base to sustain fullservice   operations, and must therefore rely upon satellite authorizations, rebroadcasting and other   arrangements for the provision of television programming it otherwise would not receive. As   MRaycom also points out, the Commission has previously recognized the unique geographic   xcharacteristics of Puerto Rico, authorizing satellite operations "[t]o overcome these terrain limiting  XS-  conditions and to permit television operations to be viable . . . ." Hector Nicolau, 5 FCC Rcd  X>-6370, 6371 (1990); see also Canal 48, Inc., 8 FCC Rcd 2193.  |30. In view of these considerations, we believe that termination of continued satellite   ystatus to station WSURTV would deprive Ponce of service that, in all likelihood, would not be   provided by a standalone operation. Therefore, based on all of the information provided, we   conclude that Raycom's satisfaction of the third presumptive criterion and presentation of  X-  Zsufficiently compelling circumstances supports an ad hoc determination that a grant of continued   satellite exemption status for station WSURTV, pursuant to Note 5 of Section 73.3555, would  X-  jserve the public interest. See, e.g., Precht Communications, Inc., 13 FCC Rcd 8659 (1998). We   inote, however, that among the matters being reexamined in the Commission's broadcast television  X^-  ownership policies in the Television Ownership Second Further Notice is the continued exemption   .of satellite stations from broadcast ownership restrictions. Accordingly, we will condition the grant of this satellite proposal on whatever action is taken in that proceeding.  X-  hDCONCLUSION  l31. Having determined that the applicants are qualified in all respects, we find that grant   of the applications to transfer control of Malrite Communications Group, Inc. and Estrella   Brillante, Ltd. from Milton S. Malt to Raycom Media, Inc. will serve the public interest, convenience and necessity.   P32. Accordingly, IT IS ORDERED, That the request for a permanent waiver of the   ztelevision duopoly rule, Section 73.3555(b) of the Commission's rules, to permit the common   ownership of television stations WNWOTV, Toledo, Ohio and WOIO(TV), Shaker Heights,"5' ,-(-(ZZ%" Ohio IS DENIED.  33. IT IS FURTHER ORDERED, That the request for a conditional waiver of the   ztelevision duopoly rule, Section 73.3555(b) of the Commission's rules, to permit the common   !ownership by Raycom Media, Inc. of television stations WNWOTV, Toledo, Ohio and   WOIO(TV), Shaker Heights, Ohio IS GRANTED, subject to the outcome of the Commission's  Xv-  pending broadcast ownership rulemaking in MM Docket Nos. 91221 and 878. Should   divestiture be required as a result of that proceeding, the licensee is directed to file, within six   months from the release of the final order in MM Docket Nos. 91221 and 878, an application   for Commission consent to dispose of such station as would be necessary for Raycom Media, Inc. to come into compliance with the rules as provided in the final order.  34. IT IS FURTHER ORDERED, That the request for temporary waivers of the duopoly   rule, Section 73.3555(b), to permit common ownership and control of stations WUPW(TV),   WOIO(TV), and WNWOTV IS GRANTED, provided that within six months of the   Mconsummation of the transfer of control of stations WOIO(TV) and WNWOTV to Raycom   Media, Inc., Raycom must dispose of station WUPW(TV), or otherwise come into compliance with the broadcast multiple ownership rules.  35. IT IS FURTHER ORDERED, That the request of Raycom Media, Inc. for operation   of station WSURTV, Ponce, Puerto Rico, pursuant to the satellite exemption of Note 5 to 47   yC.F.R.  73.3555, IS GRANTED, subject to the outcome of the Commission's pending television ownership rulemaking in MM Docket Nos. 91221 and 878.  ^36. IT IS ORDERED, That the abovecaptioned applications for transfer of control of   yMalrite Communications Group, Inc. and Estrella Brillante, Ltd. from Milton S. Maltz to Raycom  X-Media, Inc., File Nos. BTCCT980421IBG and BTCTT980430IA, ARE GRANTED.? yO#-  Zԍ We note that on June 13, 1997, an indecency complaint was filed against station WLII(TV). Upon review   Zof the allegations in the complaint, we conclude that they do not raise a substantial and material question of fact   concerning Estrella's basic qualifications and, thus, do not preclude grant of the transfer of control application for   station WLII(TV). However, the application to transfer control of station WLII(TV) is granted without prejudice to whatever action, if any, may be appropriate with respect to the alleged indecent programming. ` `  hh,VFEDERAL COMMUNICATIONS COMMISSION  ` `  hh,VRoy J. Stewart  X - ` `  hh,VChief, Mass Media Bureau