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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 Applications of ) MM Docket No. 90-638 ) HEIDI DAMSKY ) File No. BPH-880816MW ) WEDA, LTD. ) File No. BPH-880816NR ) HOMEWOOD PARTNERS, INC. ) File No. BPH-880816NU ) For Construction Permit for a ) New FM Station on Channel 247A ) in Homewood, Alabama ) MEMORANDUM OPINION AND ORDER Adopted: April 30, 1998 ; Released: May 6, 1998 By the Commission: 1. This Memorandum Opinion and Order approves a settlement agreement submitted September 12, 1997, by Homewood Partners, Inc. (HPI) and WEDA, Ltd. (WEDA). It also affirms an initial decision which finds that the third applicant in this proceeding, Heidi Damsky, is financially unqualified. I. BACKGROUND 2. Damsky, HPI, and WEDA are the remaining applicants in this proceeding for a new FM radio station on Channel 247A in Homewood, Alabama. In an Initial Decision, Administrative Law Judge Joseph Chachkin (ALJ) concluded that HPI's application should be granted and the other two denied. Heidi Damsky, 7 FCC Rcd 5244 (I.D. 1992). He found that Damsky had failed to demonstrate the requisite financial qualifications to be a Commission licensee. 7 FCC Rcd at 5258  180. Of the remaining applicants, the ALJ held that HPI was preferred over WEDA based on its integration of ownership into management as enhanced by minority participation. Id. at 5261  202. The former Review Board, without ruling on the exceptions to the initial decision, remanded the proceeding to the ALJ for further hearings because of allegations that HPI had misrepresented its ownership structure and that it was financially unqualified. Heidi Damsky, 8 FCC Rcd 6242 (Rev. Bd. 1993). Following further hearings, the ALJ found in a Supplementary Initial Decision that HPI had committed no misconduct and was financially qualified. Heidi Damsky, 9 FCC Rcd 4011 (S.I.D. 1994). Exceptions to the Initial Decision and Supplementary Initial Decision remain pending before the Commission. 3. On February 25, 1994, this case became subject to the freeze on comparative proceedings resulting from the action of the United States Court of Appeals for the District of Columbia Circuit in Bechtel v. FCC, 10 F.3d 875 (D.C. Cir. 1993), which held that the integration criterion was arbitrary and capricious and therefore unlawful. See Public Notice, 9 FCC Rcd 1055 (1994). The Commission modified its freeze policy to provide that, if the parties to a proceeding reached a settlement that was contingent upon the resolution of specific basic qualifying issues, such issues would be adjudicated, and the settlement ruled on. Public Notice, 9 FCC Rcd 6689 (1994). 4. The parties, other than Damsky, now propose such a settlement, contingent on Damsky's disqualification. II. DISCUSSION A. Settlement Agreement 5. Under the terms of the settlement, HPI and WEDA would merge to form a new entity, Homewood Radio Co., LLC (Homewood Radio), in which each would have a 50 percent interest. WEDA's application would be amended to substitute Homewood Radio and HPI's application would be dismissed. The settlement also calls for Homewood Radio to enter into a local marketing agreement (LMA) with a nonparty, Cox Radio, Inc. (Cox). Cox would (1) furnish Homewood Radio with a $1 million line of credit to fund the construction of the station and the reimbursement of WEDA and HPI, and (2) provide programming for the station on a full time basis and retain revenues from the sale of advertising time, in return for a payment of $33,000 a month. Cox would have a two-year option, beginning from the commencement of program test authority, to purchase the radio station for $5.5 million and the assumption of a certain loan. Homewood Radio, in turn, would have the right, beginning 30 days after the commencement of program test authority, to buy out Cox's rights for $1 million plus 50% of any amount over $5.5 million received upon sale of the station to a third party. Homewood Radio would also have the right, beginning five years after the commencement of program test authority, to require Cox to purchase a 49 percent interest in the station for $7 million. 6. The Mass Media Bureau supports approval of the settlement. Damsky opposes the settlement. Damsky alleges that the settlement reflects the for-profit sale of the unbuilt station's construction permit to Cox in violation of 47 C.F.R.  73.3597(c)(2), which limits such sales to the applicant's legitimate and prudent expenses, and 47 C.F.R.  73.3525(a)(3), which limits reimbursement in settlements to the applicants' legitimate and prudent expenses. In this regard Damsky argues that Section 3002(a)(3) of the Balanced Budget Act of 1997, Pub. L. No. 105-33 111 Stat. 251 (1997), which provides that, with respect to applicants with competing applications filed prior to July 1, 1997, the Commission shall "waive any provisions of its regulations necessary to permit such persons to enter into an agreement to procure the removal of a conflict between their applications" during a 180-day period, does not apply to partial settlements such as this one. Damsky also argues that the settlement is inconsistent with Rebecca Radio of Marco, 5 FCC Rcd 937 (1990), in which the Commission indicated that it would generally not permit third party buy- outs. Finally, Damsky argues that WEDA and HPI should be disqualified for allegedly listing the Homewood station with a broker for sale and then allegedly lying about this fact. 7. We approve the proposed settlement, which closely resembles the settlement we approved in Gonzales Broadcasting, Inc., 12 FCC Rcd 12253 (1997). As in Gonzales, to the extent the settlement might otherwise be called into question by provisions of our rules imposing limits on settlement terms, the Balanced Budget Act directs us to waive such limitations. Thus, we waive, to the extent necessary, the provisions of 47 C.F.R.  73.3525(a)(3). In addition, the settlement does not implicate the policy against "white knight" settlements enunciated in Rebecca Radio, since the parties do not propose a transfer of control to Cox. The parties' LMA agreement specifically states that Homewood Radio will retain ultimate control over all operations of the proposed station. If, in the future, the parties elect to exercise one of the options contained in the settlement, Commission consent would have to be sought, the Commission would have to review the qualifications of Cox, and the Commission would have to make a public interest finding before any proposed transfer of control to Cox could be consummated. Moreover, even if the settlement did implicate Rebecca Radio, we would be inclined to waive the policy and make a determination concerning Cox's qualifications. Like the settlement limit rules, the policy is intended to deter the filing of abusive applications by limiting the opportunities for applicants to be bought out. 5 FCC Rcd at 937-38  5-6. We believe that under the present circumstances and consistent with the intent of Congress, the interest of facilitating settlements would outweigh such considerations. See Implementation of Section 309(j) of the Communications Act, FCC 97- 397 (Nov. 26, 1997) at  26. 8. We find no merit to Damsky's argument that the Balanced Budget Act was not intended to apply to the settlement in question because it is a partial settlement. The statutory language contains no exclusion of partial settlements and neither does the legislative history. Moreover, in this case, given our disqualification of Damsky, the settlement agreement is a full- market settlement agreement between all qualified parties. Thus, the settlement here would avoid mutual exclusivity and the potential need for competitive bidding to award the license, thereby falling squarely within the underlying purpose of the waiver provision. There is also no merit to Damsky's allegations that she was arbitrarily excluded from the settlement. Settlements are by nature private contractual arrangements. Parties have no legal right to be included in a settlement. See Anax Broadcasting, Inc., 88 FCC 2d 607, 611  10 (1981). 9. We find that Damsky's allegations that the parties listed the construction permit for this facility with a broker fail to raise a substantial and material question of fact that would warrant adding an issue against WEDA and HPI. Specifically, Damsky alleges that HPI and WEDA have attempted to "peddle" the unbuilt construction permit for an amount in excess of that provided by section 73.3597(c)(2) of the rules, which prohibits the for-profit sale of a permit. Damsky alleges that a media broker named John L. Pierce told her attorney that he (Pierce) learned from "Frank" Rizzo, at Blackburn & Company, that the Homewood construction permit had been listed for sale with an asking price of $5 million. Although Pierce did not mention HPI or WEDA by name, those two parties produced a responsive statement from Anthony Rizzo at Blackburn, indicating that HPI and WEDA had retained him on July 8, 1997 merely to assist them in finding an LMA joint venturer in the event they were able to settle the Homewood proceeding. See Declaration Under Penalty of Perjury of Tony Rizzo, dated July 31, 1997. According to Rizzo (who indicates that there is no "Frank" Rizzo at Blackburn), Pierce called him on or about June 27, 1997 inquiring about the Homewood station. Rizzo represents that he told Pierce he had not (as of June 27) been retained to deal with the Homewood station and denies that he quoted Pierce an "asking price." The settlement agreement now confirms that HPI and WEDA sought a partner for an LMA plan, as Rizzo indicated. That, and the fact that Pierce claims no first-hand knowledge of the dealings between Blackburn and the parties here, leads to the conclusion that Pierce's statement does not raise a substantial and material question of fact as to whether the parties intended to sell the construction permit in violation of the Commission's rules. 10. Damsky also alleges that the terms of the settlement confirm that WEDA and HPI lied in claiming that Blackburn had been retained merely to find an LMA joint venturer and denying that they listed the station to sell the construction permit. Damsky points out that in addition to establishing an LMA, the settlement gives Cox a purchase option for $5.5 million, a figure similar to that quoted by Pierce. 11. We find that the fact that the settlement contains a purchase option also does not raise a substantial and material question of fact about whether WEDA and HPI lied when they denied that they listed the facility in order to "peddle" the construction permit. Joint Opposition to Petition to Enlarge Issues and to Remand for Further Hearing Proceedings, filed July 31, 1997, at 8. The evidence indicates that WEDA and HPI did not conceal that their contemplated LMA arrangement would be associated with a purchase option. Rather, they implied that a purchase option could be part of their settlement package by relying on precedent in which a purchase option was an element in settlement agreements involving LMA's. They stated (Joint Opposition at 7) that: . . . WEDA made the decision to seek out a broker who could advise WEDA (and [HPI], if a merger were successfully concluded) on an LMA party for the Homewood station. . . . The Commission has previously approved LMA arrangements as part of a settlement that concluded comparative cases. Woods Communications Group, Inc., 11 FCC Rcd 5776 ( 3) (1996); Poder Broadcasting, Inc., 11 FCC Rcd 3491 (Rev. Bd. 1996). The LMAs in the cases cited were associated with purchase options. Woods, 11 FCC Rcd at 5776  7; Poder, 11 FCC Rcd at 3491  6. B. HPI'S Qualifications 12. Before we can approve the settlement, we must also address pending exceptions relating to HPI's qualifications to be a licensee. When HPI filed its application on August 16, 1988, it was organized as a general partnership, with Willie Huff, his wife Deborah Huff, and Adrienne Lee, each having a 1/3 partnership interest. 8 FCC Rcd at 6242  2. Subsequently, on March 8, 1991, the applicant filed an amendment substituting a newly formed corporation for the original partnership. Id. The original partners each hold Class A voting stock in the new entity representing a 20 percent equity interest apiece, while two new principals, Franklin P. Hopkins and W. James Ellison, each hold shares of Class B nonvoting stock also representing 20 percent equity. The designated issues concern whether Hopkins and Ellison held interests prior to incorporation that were concealed from the Commission. The ALJ concluded that there were no undisclosed interests. 9 FCC Rcd at 4018  61-68. Damsky filed exceptions on the issues. 13. The ALJ made findings concerning the involvement of Hopkins and Ellison in the applicant's formation. The ALJ found that the formation of the applicant was initiated after Lee consulted with her attorney, Marvin L. Stewart, Jr., who assisted in recruiting the Huffs as partners. 9 FCC Rcd at 4011-12  3-5. Stewart also assisted in engaging Lawrence J. Bernard as the venture's communications counsel. Bernard suggested that the applicant be formed as a general partnership. The ALJ found that, around the time the application was prepared and filed, Bernard advised Huff and Stewart about the possibility of incorporating to allow the participation at a later time of passive investors in the application. Id. at 4012  6-7. At about the same time, Huff approached Hopkins and Stewart approached Ellison about becoming involved. Id. at 4012  9, 12. On August 28, 1988, shortly after the application was filed, Hopkins wrote a check to the applicant for $1,200. Id. at 4012  9. The check contained the notation: "Ownership 20% of Homewood Partners." Similarly, on August 31, 1988, Ellison wrote a check for $1,200, with the notation: "20% interest Radio." Id. at 4012  13. Despite the notations on the checks, the ALJ accepted the principal's explanation that the money represented "loans" or "refundable deposits" advanced in anticipation of acquiring a passive investment interest in the applicant in the future. He found that it was understood that Hopkins and Ellison had no present ownership interest in the partnership. Id. at 4012-13  8, 16, 4018-19  64, 66. 14. In addition to the principals' testimony, the ALJ accepted as probative a contemporaneous handwritten ledger maintained by Huff tracking the applicant's finances. 9 FCC Rcd at 4013-14  19-26, 4019  67. The ledger characterizes the payments by Hopkins and Ellison as "loans" and "notes payable" (although no written note was executed). By contrast, the ALJ rejected as unreliable computerized records, created by Huff around the same time, using a financial management program called Dollars and $ense. Id. at 4014-15  27-33, 4019  68. Those records could be interpreted as treating Hopkins' and Ellison's payments as capital contributions. 15. The ALJ found that the decision to incorporate was made in February 1991 at the time that the hearing designation order was released and the applicant selected a new communications counsel. 9 FCC Rcd at 4013  17-18. The ALJ further found that documents related to the incorporation process make clear that Hopkins and Ellison were treated as purely passive investors. 16. Damsky asserts that the notations on the checks reveal that Hopkins and Ellison acquired an undisclosed partnership interest in 1988. Damsky maintains that the principals' testimony denying that the payments reflected the acquisition of present interests is confusing, inconsistent, and lacking in credibility. She also maintains that the computerized records are more probative than the handwritten ledger and confirm that the payments were capital contributions. According to Damsky, the contemporaneous documents reveal that the "loan" /"refundable deposit" explanation was a belated invention. 17. We agree with the ALJ that the record supports HPI's claim that Hopkins and Ellison had no undisclosed interest in the application. Although Damsky takes issue with the quality of the testimony that the checks represented loans and that Hopkins and Ellison acquired no present partnership interest, the ALJ specifically found that: "The Presiding Judge has had an opportunity to observe [HPI's] witnesses and finds their testimony forthcoming, candid, and entirely believable." 9 FCC Rcd at 4018-19  64, 66. Such credibility findings are entitled to great deference. See Walnut Creek Honda Associates v. NLRB, 89 F.3d 645, 648 (9th cir. 1996); Barker v. Shalala, 40 F.3d 789, 795 (6th Cir. 1994); WHW Enterprises, Inc. v. FCC, 753 F.2d 1132, 1141-42 (D.C. Cir. 1985). 18. Moreover, the record contains documentary evidence that supports the testimony that Hopkins and Ellison advanced the money in anticipation of possibly acquiring a passive investment interest in the future. A letter from HPI's original communications counsel to Stewart, dated August 24 , 1988 (HPI Exh. 12 at 1), before Hopkins and Ellison executed the checks, confirms that the parties were already discussing at that time the possible "formation of a corporation with two classes of stock, voting and non-voting, so that passive investors might participate." (Counsel testified that the telephone conversations that gave rise to the letter were conference calls involving Stewart, Huff, and Lee. HPI Exh. 19 at 1-2.) As a February 9, 1991 letter from Stewart to the principals (Damsky Exh. 16) confirms, however, the actual decision to incorporate was not made until shortly before the applicant was actually incorporated. Id. at 2 ("[Communications counsel] strongly recommends that our decision to incorporate be made within the next three (3) or four (4) days. . . . " [Emphasis in original]). 19. This evidence is fully consistent with a finding that at the time Hopkins and Ellison advanced the funds, and for a considerable period afterwards, they believed that they might eventually acquire passive stock interests, but did not know for sure. Thus, it can be inferred that they advanced the funds on the understanding, that if they did acquire a stock interest, the payments would be treated at that time as a capital contribution, but that if no interest was acquired, the funds would be repaid as a "loan" or "deposit." In either case, the payments did not reflect the acquisition of a present partnership interest and the distinction between the terms "loan" and "deposit" is unimportant. 20. A letter from HPI's current communications counsel to HPI's principals sent at the time HPI was incorporated corroborates the understanding that, while use of terms "loan" and "deposit" reflects an undesirable confusion and ambiguity, it is an accurate representation of the parties' intent and thus was not intended to conceal the acquisition of a present partnership interest by Hopkins and Ellison. In the letter, counsel indicates that he reviewed draft minutes of the incorporation meeting (Damsky Exh. 19 at 1) which recited: "The Chairman reminded those present that Franklin Hopkins, W. James Ellison and Star Ellison had made loans or refundable deposits previously." Counsel wrote (Damsky Exh. 17 at 3): . . . I am concerned with the sentence describing the "loans or refundable deposits" with reference to Mr. and Mrs. Ellison and Mr. Hopkins. Even though I know this is the case, I am concerned that the description raises questions. I would be more comfortable if the sentence could describe exactly what took place (i.e. was it a loan or a refundable deposit). [Emphasis added.] In response to counsel's concern, the minutes actually adopted (Damsky Exh. 21) state: "The Chairman reminded those present that two additional individuals, Franklin Hopkins and W. James Ellison, had contacted the Partnership subsequent to its application about the possibility of the creation of a corporation in which they could become non-voting shareholders . . . . " 21. Like the ALJ, we find that the record indicates that the payments by Hopkins and Ellison were treated as loans in the applicant's contemporaneous financial documents. We agree with the ALJ in this regard that the handwritten ledger (HPI Exh 9), rather than the computerized information (Damsky Exh. 14) is probative of applicant's treatment of the payments by Hopkins and Ellison. Huff testified that, since the formation of the applicant, he maintained a ledger of the applicant's financial activities on an 8 1/2" x 11" yellow pad (although the entries were not necessarily made the same day as the event). HPI Exh. 13 at 5-6  12. At that time, he had also been using a computer program called "Dollars and $ense" to keep track of his household finances. Id. at 7  15; Tr. 1477, 1481. Floppy diskettes introduced at the hearing, showed that on January 2, 1989, Huff had made a backup of data entered into "Dollars and $ense" regarding the applicant. Tr. 1476-77, 1484. Huff testified that he had no independent recollection of making these data entries and speculated that he could have made them while familiarizing himself with the program and with business accounting. HPI Exh 13 at 8-9  15-17; Tr. 1466-67, 1477- 78. He testified that later, in January 1991, when HPI applied for bank financing, he began keying data into the computer in earnest. Id. Thus, Huff testified that in August 1988, when Hopkins and Ellison made their payments, the handwritten ledger, not the computer program, was the official record of the applicant's finances. 22. An examination of the documentary evidence is fully consistent with Huff's testimony. The handwritten ledger (HPI Exh. 9) has every appearance of being the applicant's formal record of its finances. It contains detailed listings of payments for the applicant covering the years 1988- 91. These include the payments by Hopkins and Ellison, which are characterized as "loans" and "notes payable." For reasons amply discussed by the ALJ (9 FCC Rcd at 4013-14  19-26, 4019  67), there is no reason to doubt the accuracy of the ledger, for example, because it contains erasures. There is no reason to believe that the erasures reflects a doctoring of the ledger, as opposed to routine corrections made in the process of recording the data. Similarly, there is nothing suspicious in the fact that some sheets were torn out of the pad on which the ledger was kept, apparently for other uses. See Tr. 1498-1501. 23. By contrast, there is no basis to conclude that the January 1989 computer backups (Damsky Exh. 14) reflect formal record keeping. The printouts made from the floppy diskettes contain virtually no user-entered data, such as entries for individual transactions. There is merely a summary listing $6,000 for "capital stock," $409 for "notes payable," and $1,723 for "Cash on Hand." Damsky Exh 14 at 7, 47. Because these figures are not supported by records of any specific payments, there is no basis to attribute any particular significance to them. Moreover, the record also contains computer printouts from the later time period in which Huff testified that he did use the computer program to keep formal records for the applicant. These records (Damsky Exh. 9 at 4), like the handwritten ledger, reflect individual transactions and describe the payments by Hopkins and Ellison as "loans" and "notes payable." In sum, the record establishes that HPI did not misrepresent the interests of Hopkins and Ellison. It is fully qualified. C. Damsky's Qualifications 24. As noted above, the settlement is conditioned on Damsky's disqualification, which is the subject of pending exceptions. The ALJ found that Damsky was financially unqualified when she filed her application on August 16, 1988. He found that, although Damsky certified in her application that she was financially qualified, she had not made serious and reasonable efforts to ascertain her costs and did not have reasonable assurance of net liquid assets to meet her costs. 7 FCC Rcd at 5258  180. With respect to the costs, Damsky testified that she had gotten a "ballpark" estimate from her consulting engineer, that it would cost around $300,000 to construct the station. Id. at 5244-45  6-9. The engineer, however, did not itemize what was included in the figure or even distinguish between construction costs and initial operating costs. Damsky had no knowledge of what the figure covered. She did not, for example, discuss with the engineer specific items of equipment, how many employees the station would have, or the costs of the transmitter site or the studio. She saw no documentation and prepared no written budget. The ALJ found that this reflected a failure meaningfully to ascertain costs that was disqualifying by itself. Id. at 5258  181. 25. With respect to the availability of funds, Damsky's certification of funds availability was based on a "casual" conversation with her husband, Martin Damsky, in which she asked him whether "we had enough to do this." 7 FCC Rcd at 5245  10. Mr. Damsky assured her that they had enough to do the project based on his knowledge of their financial situation, his banking relationship, and the condition of the Damsky Paper Company, a family business. Id. at 5245  11. At the hearing, he produced a financial statement dated June 1, 1988 (which Mrs. Damsky had not seen at the time of certification) claiming total assets of $809,000 and a net worth of $759,000. Id. at 5245  12-13. 26. The ALJ found that Damsky's reliance on a "casual" conversation with her husband, without reviewing her husband's financial statement, reflected a failure to ascertain whether sufficient financial resources existed at the time of certification. 7 FCC Rcd at 5258-59  182. Moreover, the ALJ found that Mr. Damsky did not intend to fund the project out of his own assets. but rather to obtain a bank loan, of which he had no assurance at the time of certification. Id. Finally, the ALJ found that the Damskys failed to demonstrate the availability of sufficient liquid assets to meet the $300,000 in estimated costs. Id. at 5259  183, Specifically, the ALJ found that: (1) $103,000 in marketable securities had not been specifically identified and documented, (2) Mr. Damsky did not demonstrate his ability to withdraw $140,000 in retained earnings from Damsky Paper Company, (3) the Damskys did not submit appraisals of various non-liquid assets, and (4) Damsky did not show that Mr. Damsky's personal liability on a $1.5 million line of credit extended to the Damsky Paper Company did not affect his ability to use his assets to finance the proposed station. 27. In her exceptions, Damsky contends that the ALJ erred in finding her financially unqualified. She asserts that she reasonably ascertained her estimated costs by asking her consulting engineer, who informed her that she would need approximately $275,000 to $300,000. She further asserts that Mr. Damsky categorically agreed to support the project and that his balance sheet indicates that he had well over $300,000 in liquid assets in 1988. She maintains that there is no showing that Mr. Damsky's ability to use his assets is impaired by his guarantee of the Damsky Paper Company's loans. She contends that Commission precedent did not require her to prepare documentation of her costs and fund availability at the time she certified her financial qualifications. Additionally, Damsky observes that she proffered at hearing both a detailed budget and a commitment letter from the First Alabama Bank on June 20, 1991. She faults the ALJ for rejecting this evidence. She claims that if she is financially unqualified, WEDA is also unqualified. 28. We agree with the ALJ that Damsky failed to establish her financial qualifications. We note initially that we give no consideration to Damsky's argument that if WEDA is found qualified so must she. WEDA's financial qualifications are not before us. Although HPI filed exceptions to the ALJ's conclusion that WEDA is financially qualified, HPI withdrew those exceptions in connection with the settlement. Joint Request for Approval of Settlement Agreement, filed September 12, 1997, at 12  30. Damsky filed no exceptions to the ALJ's findings and therefore waived her right to contest the issue. 47 C.F.R.  1.277(a). Damsky did file exceptions to the ALJ's order approving a financial amendment by WEDA, but that pleading fails to point out with particularity material errors in the ALJ's ruling. Exceptions of Heidi Damsky, filed September 20, 1994. We therefore deny that part of her exceptions for lack of specificity. 29. Turning to the merits of Damsky's qualifications, at the time Damsky filed her application, the version of the application form then in use permitted applicants to certify their financial qualifications. See Revision of Application for Construction Permit for Commercial Broadcast Station (Form 301), 50 RR 2d 381 382  6 (1981). Applicants were not required, as they had been previously, to submit documentation of their estimated costs and proposed funding with their applications (or even to prepare documentation at that time). They were, however, required to provide probative evidence at the hearing that they had at the time of certification: (1) engaged in serious and reasonable efforts to ascertain predictable construction and operation costs, and (2) had sufficient net liquid assets on hand or committed sources of funds to construct and operate for three months without revenues. Northampton Media Associates, 4 FCC Rcd 5517, 5519  15 (1989). 30. We find that Damsky fell short of meeting either of those standards. As the Review Board held in Victorson Group, Inc., 6 FCC Rcd 1697, 1700  19 (Rev. Bd. 1991), a serious and reasonable attempt to ascertain costs involves something more than having a "general sense" or "ballpark" figure for costs. In adopting the certification procedure, we made clear that we did not intend to allow applicants to simply certify their qualifications and formulate a proposal afterwards. See Aspen FM, Inc., 6 FCC Rcd 1602, 1603  13 (1991). We believe that this reasonably implies that the applicant must give some consideration to the particulars of a proposal, including specific costs. The hearing record makes abundantly clear, as accurately reflected by the Initial Decision, that Damsky gave no consideration to any specific costs at the time she certified her financial qualifications. Having failed to formulate a specific proposal at the time of certification, Damsky did not have good cause to substitute a detailed proposal at hearing. See Aspen, supra, at 1603-04  13. Thus, the ALJ correctly rejected her attempt to do so. 31. We further find that Damsky did not have a committed source of funds to construct and operate the station. The record indicates that, while Mr. Damsky committed to supporting his wife's project, he intended to obtain a bank loan and did not commit to using his personal assets. He testified (Tr. 1109-10): . . . Heidi came to me and asked me if we could raise $250 or 300,000 if she were to get involved with this radio station. There was no reference made as to whether this was liquid, illiquid, quick assets, long-term assets. She asked me could we come up with the money and I assured that we could, based on my knowledge of our financial situation, my knowledge of my banking relationship, my knowledge of the condition of Damsky Paper Company. When asked directly about his intention to use his own assets, Mr. Damsky indicated that, at the time, he had made no decision to use his own assets for the project (Tr. 1112-13): Q So it's fair to say, then, I think, in August of 1988, it was not your intention to withdraw the $140,000 from the retained earnings, sell all those marketable securities and withdraw all of the cash out of the bank and hand it over to Mrs. Damsky for this project? A No. It was never my intention. I was never put in a position of making that type of valuation of a situation. In other words, had I been put on the spot in 1988, I guess I would have had to make that decision. It seems to me a very hypothetical thing. My wife came to me and requested from our joint family moneys, money I felt was very, very important to her and I felt we could afford and perhaps have to give up or liquidate other things that -- I believe my response at that time would have been, absolutely, I'm behind you 100 percent, whatever you want. 32. Mr. Damsky's expectation that he could raise the necessary money may well have been realistic and, if faced with the decision, he might have decided to use his liquid assets. Nevertheless, at the time she certified her financial qualifications, Ms. Damsky did not have a firm commitment, as the Commission requires, either from a bank or from Mr. Damsky to use their funds. See Janice Fay Surber, 5 FCC Rcd 6155, 6159  26 (Rev. Bd. 1990) (applicant not qualified where bank merely invited applicant's husband to file a loan application but made no commitment). Absent a committed source of funding at the time of certification, Damsky did not have good cause to substitute a bank commitment letter at hearing. See Aspen, supra, at 1603-04  13. Thus, as with the case of Damsky's proffered budget, the ALJ correctly rejected her attempt to introduce evidence at hearing. Because we find that Mr. Damsky made no commitment regarding the use of his liquid assets, it is unnecessary for us to reach the question of whether he indeed had $300,000 in liquid assets in 1988. III. CONCLUSIONS AND ORDERING CLAUSES 33. In view of the foregoing, we find that the parties' Joint Request complies in all respects with the provisions of 47 U.S.C.  311(c) and the pertinent requirements of 47 C.F.R.  73.3525(a). The applicants have provided sworn statements that there is no other consideration for the dismissal of their applications, that their applications were not filed for the purpose of reaching or carrying out a settlement agreement, and that approval of the agreement will serve the public interest by facilitating the institution of new FM service to Homewood, Alabama, and by terminating this litigation. We waive, to the extent necessary, Section 73.3525(a)(3), and approve the settlement. The settlement does not implicate the Commission's policy against third-party settlements reflected in Rebecca Radio. The settling applicants are found fully qualified and Damsky is found unqualified. 34. ACCORDINGLY, IT IS ORDERED, That the Exceptions of Heidi Damsky to Initial decision of Administrative Law Judge Joseph Chachkin and Brief in Support of Exceptions, filed September 17, 1992, and the Exceptions of Heidi Damsky, filed September 20, 1994 ARE DENIED. 35. IT IS FURTHER ORDERED, That the Petition to Enlarge Issues and to Remand for Further Hearing Proceedings, filed July 10, 197, by Heidi Damsky, IS DENIED. 36. IT IS FURTHER ORDERED, That, the relevant issues having already been fully argued on the existing record, the Motion for Leave to File Responsive Pleading to "Reply to Consolidated Responses to Joint Request for Approval of Settlement Agreement," filed October 14, 1997, by Heidi Damsky IS DENIED. 37. IT IS FURTHER ORDERED, That the Joint Request for Approval of Settlement Agreement, filed September 12, 1997, by Homewood Partners, Inc. and WEDA, Ltd., IS GRANTED, the associated settlement IS APPROVED, that, good cause having been shown, the Petition for Leave to Amend, filed September 12, 1997, by Homewood Partners, Inc. and WEDA, Ltd. and the Petition for Leave to Amend, filed December 15, 1997, by WEDA, Inc. ARE GRANTED, and that the application of WEDA, Ltd. (File No. BPH-880816NR), as amended, IS GRANTED, the application of Homewood Partners, Inc. (File No. BPH- 880816NU) IS DISMISSED, and the application of Heidi Damsky (File No. BPH-880816MW) IS DENIED. 38. IT IS FURTHER ORDERED, That the Contingent Exceptions and Consolidated Supporting Brief of Homewood Partners, Inc., filed September 18, 1992, the Brief and Exceptions to Initial Decision, filed September 18, 1992, by WEDA, Inc., and the Brief and Exceptions to Supplemental Initial Decision, filed September 22, 1994, by WEDA, Inc. ARE DISMISSED. 39. IT IS FURTHER ORDERED, That this proceeding IS TERMINATED. FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary