Federal Communications Commission DA 08-523 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of Applications for Transfer of Control of WWBT, Inc. WBTV, Inc. WCSC, Inc. To Raycom Holdings, LLC ) ) ) ) ) ) ) ) ) ) ) File Nos. BTCCT-20071116ADG BTCCT-20071116ACX BTCCT-20071116ACZ MEMORANDUM OPINION AND ORDER Adopted: March 25, 2008 Released: March 25, 2008 By the Chief, Media Bureau: 1. The Commission, by the Chief, Media Bureau, pursuant to delegated authority, has before it for consideration the unopposed applications to transfer control of WWBT, Inc., licensee of WWBT(TV), Richmond, Virginia, WCSC, Inc., licensee of WCSC-TV, Charleston, South Carolina, and WBTV, Inc., licensee of WBTV(TV), Charlotte, North Carolina, from Lincoln Financial Media Company to Raycom Holdings, LLC (“Raycom”), an indirect subsidiary of Raycom Media, Inc.1 Grant of the transfer of WWBT(TV) would create a television duopoly in the Richmond-Petersburg, Virginia Designated Market Area (“Richmond DMA”) that is not permissible under Section 73.3555(b) of the Commission’s rules (the “local television ownership rule”).2 Accordingly, Raycom has requested a temporary six-month waiver following consummation of the instant transaction to come into compliance with this rule. We grant the requested waiver and the applications, subject to the conditions set forth below. 2. Multiple Ownership Waiver. Under the local television ownership rule, a party may own two television stations in the same DMA if (1) the Grade B contours of the two stations do not overlap, or (2) if eight or more independently owned and operating commercial and noncommercial television stations would remain in the DMA post-merger and at least one of the stations is not ranked within the top four stations in the DMA in terms of audience share. 1 The Facility ID Numbers for the above-captioned stations are: WWBT(TV), Richmond, Virginia-30833; WBTV(TV), Charlotte, North Carolina-30826; and WCSC-TV, Charleston, South Carolina-71297. 2 47 C.F.R. § 73.3555(b) (2002). On February 4, 2008, the Commission released its 2006 Quadrennial Review Order, in which it decided to make no changes to the local television ownership rule currently in effect. 2006 Quadrennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, MB Docket No. 06-121, Report and Order and Order on Reconsideration, FCC 07-216 (rel. Feb. 4, 2008). Federal Communications Commission DA 08-523 2 3. Raycom, through another subsidiary, owns WTVR-TV, Richmond, Virginia, which operates in the same Richmond DMA as WWBT(TV). There are currently six independently owned television stations in the Richmond DMA, of which five would be independently owned following grant of the WWBT(TV) application. Because the Richmond DMA will contain only five independently owned and operating commercial and non-commercial television stations after consummation, Raycom may only have an attributable interest in one station in the market. Thus, the instant transaction will result in Raycom exceeding the numerical ownership limit of the local television ownership rule by one television station. In its temporary waiver request, Raycom argues that the existing diversity of voices and competition in the Richmond DMA, together with Raycom’s commitment to maintain separate operations of the two stations during the interim period, would mitigate even the potential for impact on the underlying goals of the local television ownership rule. 4. In this regard, Raycom contends that the Richmond DMA achieves a level of media diversity and competition similar to or greater than the markets in which the Commission previously has granted temporary local television ownership waivers.3 Raycom notes that over 89.8% of the households in the Richmond DMA subscribe to some form of MVPD service, and there is a cable television penetration rate of 62% (314,220 households).4 Further, Raycom states that DBS providers EchoStar and DIRECTV serve viewers in the Richmond DMA, and both offer local-into-local delivery of broadcast television stations directly to their Richmond subscribers. Raycom goes on to state that Richmond residents also have access to two Satellite Digital Audio Radio Services, Sirius and XM Radio, each offering nearly 200 digital audio channels. Raycom adds that additional diversity of voices and competition for advertising revenues in the market is supplied by 39 radio stations, including 19 Arbitron independent radio voices. Finally, Raycom asserts that two daily newspapers and seven weekly newspapers are published in the market, including The Richmond Times-Dispatch, a local daily newspaper published by Media General, Inc. 5. As a further safeguard to preserve media diversity and competition in the Richmond DMA, Raycom avers that it will not seek to realize any economies of scale in the Richmond market and it will maintain the separate management, programming and sales operations of the stations during the limited waiver period. Raycom states that it will maintain the services of WWBT(TV)’s existing national sales representative firm until divestiture is accomplished and will insulate each station’s staff from all proprietary or confidential information held by the other Richmond station. In addition, Raycom asserts that it will continue WWBT(TV)’s existing efforts to provide programming responsive to the needs and interests of the local Richmond community. 6. Finally, Raycom commits to achieving prompt compliance with the local television ownership rule. According to Raycom, it has already begun the process of searching for a qualified buyer for one of the Richmond stations. It has also engaged the services of Belmoro Corporate Advisors, LLC, an experienced broadcast financial advisory firm. Even at this early stage, states Raycom, it has received preliminary expressions of interest from and has entered into confidentiality agreements with four different entities. In addition, Raycom recently filed an amendment in which it reports that it intends to sell WTVR-TV, and has entered into a legally binding agreement with the Antitrust Division of the United States Department of Justice (“”DOJ”). 3 See, e.g., Applications for Transfer of Control of the Liberty Corporation, 21 FCC Rcd 244, 245 (2006) (noting markets where two, three, and five independent television voices would exist for the brief waiver period); see also Applications of AFLAC Broadcasting Group, Inc., 12 FCC Rcd 3907 (1997). 4 According to Raycom, cable television service is provided by 23 cable systems owned by eight different cable operators, including local cable service provided by Comcast Communications, Inc. Federal Communications Commission DA 08-523 3 7. Pursuant to that agreement, Raycom has committed to operating the stations as separate entities so as to maintain full competition between them pending divestiture. If Raycom has not divested WTVR-TV within three months of the closing of the instant transaction, the DOJ will have the right to file a Consent Decree and Hold Separate Stipulation and Order, which, among other things, will provide that: (1) upon the filing of the Consent Decree, Raycom will have an additional 30 days (subject to extensions not to exceed 60 days) to complete the divestitures on its own; and (2) if Raycom fails to complete the divestitures in a timely fashion consistent with the Consent Decree, on application by the DOJ, a trustee will be appointed to complete the divestitures, subject to DOJ review and approval. 8. Based on the facts presented, we believe that Raycom’s request for a temporary six- month waiver of the local television ownership rule is warranted. We reach this conclusion based on Raycom’s promise to operate the Richmond stations independently and, consistent with its agreement with DOJ, Raycom’s assurance that it will achieve divestiture of WTVR-TV, Richmond, Virginia, within six months.5 Furthermore, in multiple-station, multiple-market transactions, the Commission has granted temporary waivers of its rules to permit an orderly disposition of assets and avoid forced sales.6 9. Having found the applicants fully qualified, we conclude that grant of the subject applications would serve the public interest. ACCORDINGLY, IT IS ORDERED THAT the request for a temporary six-month waiver of the Commission’s local television ownership rule, 47 C.F.R. § 73.35555(b) to permit common ownership by Raycom Holdings, LLC of WTVR-TV, Richmond, Virginia and WWBT(TV), Richmond, Virginia, in the Richmond-Petersburg, Virginia DMA IS GRANTED, subject to the condition that within six months of the consummation of this transaction, an application is filed with the Commission to dispose of such station as would be necessary for Raycom Holdings, LLC to come into full compliance with 47 C.F.R. § 73.35555(b). FURTHERMORE, IT IS ORDERED THAT the applications to transfer control of WWBT, Inc., WBTV, Inc., and WCSC, Inc. to Raycom Holdings, LLC ARE GRANTED. FEDERAL COMMUNICATIONS COMMISSION Monica Shah Desai Chief, Media Bureau 5 In seeking to divest station WTVR-TV, we encourage Raycom to make every effort to provide notice to women and minorities of the availability of the station for sale. 6 See e.g., Univision Communications, Inc., 22 FCC Rcd 5842 (2007).