Federal Communications Commission DA 98-228
Before the
Federal Communications Commission
Washington, D.C. 20554
In re Application of
Citadel License, Inc.
(Assignor)
and
Maranatha Broadcasting Co., Inc.
(Assignee)
File No. BAL-970820EA
For Assignment of License of
WEST(AM) Easton, Pennsylvania
MEMORANDUM OPINION AND ORDER
Adopted: February 5, 1998 Released: February 6, 1998
By the Chief, Mass Media Bureau:
1. - The Commission by the Chief, Mass Media Bureau, acting pursuant to delegated
authority, has before it: (1) the above-captioned unopposed application for assignment of the
license of WEST(AM) Easton, Pennsylvania from Citadel License, Inc. ("Citadel") to Maranatha
Broadcasting Co., Inc. ("MBC"); and (2) a related request for permanent waiver of 47 C.F.R
§73.3555(c), the Commission's one-to-a-market rule, which restricts common radio and television
station ownership in the same market.'
2. MBC is the licensee of independent UHF station WFMZ-TV, Allentoi,
Pennsylvania.2 Grant of the instant assignment application would create a new radio-television
station combination because the Grade A contour of WFMZ(TV) encompasses the entire
Section 73 .3555(c) of the Commissions rules prohibits the common ownership of radio and television stations
in the same market if the 2 mV/rn contour of an AM station or the 1 mV/rn contour of an FM station encompasses
the entire community of license of a television station or, conversely, if the Grade A contour of a television station
encompasses the entire community of license of an AM or FM station.
2 MBC states that the subject application and waiver request are contingent upon FCC approval of the
assignment of the licenses for WFMZ(FM), Allentown, Pennsylvania, and W253AC, Reading, Pennsylvania, from
MBC to Citadel (File Nos. BALH-970721GF and BALFT-970721TW, respectively) and consummation of these
transactions by the parties. On September 5, 1997, the Commission approved the assignment of these stations'
licenses to Citadel, fmding that Citadel's proposed combination of two FM stations is consistefit with the radio
contour overlap rule, 47 C.F.R. Section 73.3555(a). On C)ctober 21, 1997, MBC and Citadel consummated the sale
of WFMZ(FM) ana W253AC to Citadel. WFMZ(FMs call letters were changed to WLEV(FM) effective September
2, 1997.
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Federal Communications Commission DA 98-228
community of license of WEST(AM). The application and the waiver request are unopposed.
For the reasons set forth below, we grant the assignment application and a permanent waiver of
our one-to-a-market rule.3
One-to-a-Market Waiver Showing
3. MBC bases its request on the one-to-a-market waiver standards adopted in the Second
Report and Order in MM Docket No. 87-7, 4 FCC Rcd 1741 (1989) ("Second Report and
Order"). recon. granted in part and denied in part, 4 FCC Rcd 6489 (1989) ("Second Report and
Order R& on."). Under these criteria, the Commission presumptively favors waiver requests
involving station combinations serving the top 25 markets there there are at least 30 separately
owned, operated, and controlled broadcast licensees or "voices" after the proposed combination
("top 25 marketl3O voice standard").4 The Commission also favors waiver requests involving
"failed" broadcast stations, that is, stations that have not been operating for a substantial period
of time or that are in bankruptcy proceedings. Otherwise, the requests must be evaluated under
a more rigorous case-by-case approach. See 47 C.F.R § 73.3555, note 7.
4. The TV and AM stations at issue here are licensed to Allentown and Easton.
respectively, both of which are located in the 4th-ranked Philadelphia DMA. MBC, however.
submits its waiver request pursuant to the case-by-case standard because it states that its waiver
request does not fall into either of the circumstances for a presumptive waiver. i.e., top 25
marketl30 voice standard or failed station status. Specifically, MBC claims that the relevant
radio market should be limited to those stations providing principal community service to some
portion of Northampton County, which includes Easton, the community of license for
WEST(AM). As discussed below, we agree with MBC that it is not entitled to a presumptive
waiver under the "top 25 marketl30 voice" standard. We have previously determined that where
the DMA covers a large area and the stations at issue compete only in a smaller community, our
analysis would focus on the local community rather than the DMA. Burt H Oliphant. 10 FCC
Red 2708, 2711(1995), citing Duane I Pouch, 4 FCC Rcd 5596, 5597 (1989). In this case.
consistent with this precedent, we will consider as competing facilities those television stations
that provide Grade A or Grade B coverage of the Allentown-Bethiehem-Easton area, as well as
those radio stations included in Arbitron's Allentown-Bethlehem Radio Metro Market. We find
The Mass Media Bureau has delegated authority to act on uncontested one-to-a-market waiver requests that
involve stations in the top 100 television markets and that present no new or novel issues. Louis C DeArias,
Receiver, 11 FCC Rcd 3662, 3667 (1996) ("L)eAria"). This case presents no new or novel issues, and the stations
in the proposed combination are located in the Philadelphia designated market area ("DMA"), the 4th largest U.S.
television market, 1997 Television & Cable Factbook.
' Pursuant to the statutory directive "to extend its [one-to-a-market] waiver policy to any of the top 50 markets.
consistent with the public interest, convenience and necessity," under the Telecommunications Act of 1996. Pub. L.
No. 104104, § 202(d), 110 Stat. 56 (1996), the Commission is considering a proposal to implement extension of
the waiver policy in the Review of the Commission's Regidations Governing Television Broadcast Ownersh4z Second
Further Notice ofProposed Rule Mzking, in MM Docket Nos. 91-221 and 87-8, 11 FCC Rcd 21655, 21685 (1996)
("Second Further NPR?f').
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Federal Communications Commission DA 98-228
that MBC's case-by-case showing satisfies the criteria for a permanent waiver.
5. Under the case-by-case standard, the Commission makes a public interest
determination based upon the following five criteria (1) the potential public service benefits that
will arise from the joint operation of the facilities involved, such as economies of scale cost
savings and programming and service benefits, (2) the types of facilities involved, (3) the number
of media outlets owned by the applicant in the relevant market; (4) the financial difficulties of
the stations involved; and (5) the nature of the relevant market in light of the level of competition
and diversity after joint operation is implemented. Second Report and Order, 4 FCC Rcd at
1753-54 In enunciating the five factors to be considered under the case-by-case standard, the
Commission noted that not all five factors must be satisfied in each case, but rather the overall
consideration of these factors must weigh in favor of granting the waiver request Second Report
and Order Recon, 4 FCC Red at 6491 In support of its waiver request, MBC submits a
showing which addresses each of the five factors.
6 Public Sen'ice Benefits of Joint Operation. MBC contends that the proposed
combination of WEST(AM) and WFMZ-TV would create efficiencies through the sharing of
managerial, technical, and news personnel and would result in projected cost savings of more
than $123,000 annually MBC anticipates that combining the news operations of the two stations
will result in increased television news coverage of issues important to the local communities
Additionally, WEST(AM) will have access to the regional news coverage provided by the
WFMZ-TV news department to enhance its news and public affairs programming.
7. Types of Facilities. MBC states that WEST(AM), Easton, the radio station it proposes
to acquire, is among the least powerful stations serving Northampton County which is located
in the Allentown-Bethlehem, Pennsylvania Radio Metro Market. WEST(AM) is a Class C station
that operates on 1600 kHz at 1,000 watts of power both day and nighttime MBC already owns
WFMZ-TV, a UHF station that operates on Channel 69 at 1,070 watts visual from a transrmtter
at a height above average terrain of 1,027 feet MBC asserts that neither station is dominant in
the audience ratings. MBC states further that according to Arbitronts Allentown-Bethlehem-
Easton Radio Market Report, WEST(AM) has had an average quarter hour share of radio
listening of 1.8 over the past five rating periods in contrast to the shares of the FM stations in
the market which vaiy from 7 to 13. Although independent UHF station WFMZ-TV is the fourth
ranked television station behind the three network affiliates, MBC notes that the station only has
an audience share of 3 in Lehigh County, where Allentown is located, which is the nearest county
to Northampton for which county-by-county television audience share data are available.
8. Other Media Outlets. Aside from the proposed AM-TV combination, MBC will not
own any other commercial media outlets in the market However, the majority shareholder of
MBC is also an officer and director of United Educational Broadcasting, Inc which is an
applicant for a construction permit for a new noncommercial educational FM translator station
on Channel 294D at Allentown, Pennsylvania.
9. Economic Status. MBC states that although WEST(AM) and WFMZ-TV are not failed
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Federal Communications Commission DA 98-228
stations, "both require a paired station in order to be viable." WFMZ-TV was jointly operated
by MBC with WLEV(FM) while WEST(AM) was jointly operated by Citadel with WCTO(FM).5
As indications of the competitive nature of the market and the need for the paired proposal, MBC
asserts that other AM radio stations in the market are owned in combination with FMs, are
operated under a Local Marketing Agreement, or share personnel and facilities with another
station. Moreover, according to MBC, WFMZ-TV has never made a profit in its 20 years of
operation.
10. Competition and Diversity in the Mlirket. The final factor in MBCs showing is the
nature of the relevant market in light of the Commission's concerns about diversity and
competition. Typically, we will consider the relevant TV metro market for radio stations and the
relevant DMA for TV stations. See Second Report and Order, 4 FCC Red at 1760, n.101.
However, in several cases in which the relevant DMA was very large but the stations involved
in a transaction competed only in a relatively small local community, we have used alternative
methods for determining the number of relevant voices. See Atlantic Morris Broadcasting, 10
FCC Red 9495 (1995); Glendive Broadcasting Corp., 10 FCC Red 2708, 2711 (1994); Duane
.1 Pouch, 4 FCC Red 5596, 5597 (1989). See Thiad S/gvaves, 12 FCC Red 6102, 6105 (1997)
citing Gadsden Broadcasting Co., 10 FCC Red 8741, 8743 n.4 (1995). MBC uses the
Philadelphia DMA for TV stations but asserts that the Allentown-Bethlehem Arbitron radio
market is appropriate for radio stations because it includes only those stations that provide city
grade services over some portion of Northampton County, in which Easton, the community of
license of WEST(AM) is located. MBC states that there are a total of 16 commercial radio
stations including WEST(AM) that place a principal community contour over Northampton
County. MBC notes that its proposed AM-UHF combination will compete with several existing
combinations of group-owned radio stations in the market. With regard to the television market,
MBC states that the Philadelphia DMA is the appropriate market since WFMZ-TV is designated
as part of that DMA according to Nielsen. MBC states that there are a total of 15 commercial
TV stations in the Philadelphia DMA. Following the completion of the proposed combination,
MBC asserts that there will be a total of 26 separately owned broadcast media entities.
Discussion
11. At the outset, we note that the pending television ownership proceeding, in which the
Commission is considering eliminating or modifying the one-to-a- market rule, does not preclude
consideration of MBC's request for a permanent one-to-a-market waiver. In the Second Further
NPRMIn the television ownership proceeding, we stated that waiver requests submitted pending
resolution of the proceeding will be considered under the current criteria for evaluating such
requests. Second Further NPR 11 FCC Red at 21689 n. 130. Thus, the Second Further NPRM
contemplates approval of permanent, unconditional waivers to allow radio-television combinations
that do not propose common ownership of stations exceeding a combination of one television
station, two AM stations and two FM stations, as long as the requested waivers are clearly
See n. 2, szq,ra.
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Federal Communications Commission DA 98-228
consistent with Commission precedent. See id MBC's proposed combination of one UHF
television station and one AM radio station is consistent with that approach. See, e.g., Alabama
Universal Corporation, FCC 97-13 (Apr. 18, 1997).
12. In evaluating a request for a permanent waiver of the one-to-a-market rule, the
Commission's goal "is to permit the public to benefit from such efficiencies of operation as may
be achieved through the use of common facilities and staff, consistent with the maintenance of
diversity and vigorous competition within the market areas involved." Second Report and Order
Recon., 4 FCC Red at 6491. The Commission does not require that all five case-by-case criteria
be satisfied as a precondition of a waiver, but rather that the overall consideration of these factors
weighs in favor of the public interest. Id at 6493; Second Report and Order, 4 FCC Red at
1753. We conclude that, on balance, MBC meets our case-by-case criteria, and that a permanent
waiver in this instance would not adversely affect competition and diversity in the relevant
market.
13. As to the first criterion, the potential public service benefits of joint oership, the
Commission considers the public service benefits that could result from the proposed radio-
television combination, such as projected economies of scale, cost savings and program and
service benefits. Second Report and Order, 4 FCC Red at 1753. MBC has demonstrated that
joint operation of WEST(AM) and WFMZ-TV will result in substantial cost savings of
approximately $123,000 annually. These cost savings will translate into public service and
programming improvements. In this regard, MBC states that the consolidation of the stations'
news operations will result in increased local and regional news coverage.
14. With regard to technical facilities, the Commission aims to predict and avoid any
significant adverse effects on diversity or competition from too powerful a combination. See
Great American Television and Radio Co., Inc., 4 FCC Red 6347,6349(1989). our independent
analysis of MBC's showing confirms that WEST(AM), a Class C station operating at 1,000 watts
of power, is in fact among the least powerful radio stations serving Northampton County. The
market is served mostly by Class B AM and FM stations, operating in a range between 500 and
50,000 watts of power. In comparing the technical facilities of independent UHF station WFMZ-
TV with other stations in the market, our analysis shows that there are 8 other UHF stations
including affiliates of FOX, WB, and UPN that provide Grade A or B service to the Allentown-
Bethlehem-Easton area Of those 8 other UHF stations, 6 have technical facilities that are
comparable to those of WFMZ-TV.6 Additionally, there are 3 VHF stations, including affiliates
of ABC, NBC and CBS providing Grade A or B service to the area. See Burt H Olphcmt, 10
FCC Red 2708(1995) (alternative method for counting voices used to limit market to Glendive
within Mlnot-Bismarck-Dickinson, ND-Glendive, MF ADI). Aside from WFMZ(TV) and
WEST(AM), MBC will own no other media outlets in the Philadelphia DMA. We find based
6 WFMZ-1V has a pending application for modification of its facilities, to increase visual po'.wr from 1070kw
to 1783 kw and to increase antenna height above average tenain from 1,026 feet to 1,027 feet (File No. BMPCr-
9605 15KE).
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Federal Communications Commission DA 98-228
on the foregoing, that the proposed combination does not present issues of market dominance
from a technical standpoint that would be inconsistent with the public interest.
15. As regards the financial status of the stations involved in the proposed combination,
MBC has not submitted any financial data for WEST(AM), nor does it claim that the station is
a "failed station." Although MBC has asserted that WFMZ-TV has sustained operating losses
for the past 20 years and that WFMZ-TV and WEST(AM) need to operate as paired stations in
order to be competitive, without supporting financial data, we can accord these assertions little
weight. However, not all five factors need be present to justif' grant of a waiver. Second Report
and Order Recon., 4 FCC Red at 6491 We have granted a number of one-to-a-market waivers
where there was no finding that any of the stations were in financial distress. See, e.g., Louis
C. DeArias, 11 FCC Red 3662 (1996); Alta Gulf FM Inc., 10 FCC Red 7750 (1995); Heny
Broadcasting Co., 11 FCC Red 1175 (1995); Atlantic Morris Broadcasting Inc., 10 FCC Red
9495 (1995); Secret Communications Ltd, 10 FCC Red 6874 (1995).
16. With respect to economic concentration and competition in the context of one-to-a-
market waiver requests, we usually consider the combined advertising revenue share of the
proposed radio/television combination in the relevant market. See, e.g., New City
Communication, Inc., 12 FCC Red 3929 (1997). Here, our independent inquiry indicates that
WEST(AM)'s advertising share in the Menton-Beth1ehem Arbitron radio market was 1.4% in
1996. However, WFMZ-TV does not have a reportable share of advertising revenue in the
Philadelphia DMA. See Id Because its audience share is only a "3 in Lehigh County," we
conclude that WFMZ-TV's share of the television advertising revenue in the A1lento-
Bethlehem market is not so substantial that combined ownership ofWEST(AM) and WFMZ-TV
would have a significant negative impact on competition for broadcasting advertising revenue in
the Allentown-Bethlehem area.
17. Finally, we find that a sufficient number of media "voices" will continue to serve the
relevant market and that the proposed combination will not create any undue concentration of
ownership or control of the broadcast media therein. As noted above, in considering one-to-a-
market waiver requests, the Commission typically counts the television stations in the relevant
Nielsen Designated Market Area and radio stations in the relevant television metro market.8
However, because \NEST(AM) is licensed to Easton in Northampton County, which is located
Advertising revenue data is obtained form BIA Publications, Inc.'s Radio Master Access and Tlevision Master
Access data bases.
8 As to the market definition within which to count the number of broadcast stations in the context of a
one-to-a-market waiver, the Commission considers "the relevant TV metro market for radio stations and the relevant
ADI [Arbitron Area of Dominant Influence} TV market for TV stations." Second Report and Order, 4 FCC Rcd
at 1760 n. 101. Ho'cever, since Arbilron no longer compiles ADI data, we now accept showings using the Nielsen
DMA in determining the number of broadcast "voices" in the relevant market See MèdidComnvinications Partners
LP., 10 FCC Red 8116 n3 (1995); see also Further Notice ofProposed Rulemaking, MM Dockets Nos. 91-221 and
87-8, 10 FCC Red 3524, 3539 n.59 (1995).
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Federal Communicatiois Commission DA 98-228
in the northernmost part of the Philadelphia DMA and outside of the defined television metro
market, we accept MBC's alternative method of counting only those radio stations that are either
licensed to communities in Northampton or that place a principal community service contour over
Northampton County.
18. Although MBC used the Philadelphia DMA to count the number of television voices
in its case-by-case showing, we find that only those television stations that provide Grade A or
B service to the Allentown-Bethiehem-Easton area should be included in the count of broadcast
media serving the relevant market. This is a better approach in view of the fact that the subject
AM and TV stations are located in the northernmost part of the DMA, at a distance of
approximately 40 to 50 miles from Philadelphia and an even greater distance of approximately
80 to 100 miles from Delaware and southern New Jersey, which is also included in the
Philadelphia DMA Although the Philadelphia DMA consists ofstations licensed to communities
over a wide geographic area throughout Pennsylvania, Delaware, and New Jersey, not all of the
Philadelphia DMA stations, would compete with IVIBC's proposed AM-TV combination in the
Allentown-Bethiehem-Easton area. Thus, we include the television stations licensed to
Philadelphia whose Grade A or B contours reach Allentown-Bethiehem-Easton, but exclude the
New Jersey and Delaware stations which do not provide service to that area. See, e.g., Spectrum
Radio, Inc., 12 FCC Red 1667(1997) (presumptive waiver under top 25 market'30 voice standard
denied where no AM, FM, or TV licensed to 16th ranked Miami/Ft. Lauderdale DMA provided
principal community service to Key West, the city of license of the proposed radio-TV
combination). Thus, based upon our independent analysis of MBC's showing the market will be
served by a total of 20 radio (9 AMs and 11 FMs) and 12 TV stations. Following the proposed
acquisition of WEST(AM) by MBC to be operated with WFTvIZ-TV, these 32 broadcast outlets
will be owned and operated by 27 separate entities, the same number of voices as before the
assignment, since MBC and Citadel are exchanging radio stations in related sales.9
19. We conclude that, on balance, MBC's case-by-case showing in support of a waiver
of the one-to-a-market rule meets our case-by-case criteria, and that a waiver in this instance
would not adversely affect competition and diversity in the relevant market.
20. Accordingly, IT IS ORDERED, that the request for waiver of the Commissionts
one-to-a-market rule, 47 C.F.R Section 73.3555(c), to permit common ownership ofWEST(AM)
Easton, Pennsylvania and WFMZ-TV, Allentoi, Pennsylvania, IS HEREBY GRANTED;
See n.2, supra.
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!1e1 Communications Commission DA 98-228
21. IT IS FURTHER ORDERED, that, having found the applicants fully qualified, the
above-captioned applications to assign the license of WEST(AM) Easton, Pennsylvania from
Citadel License, Inc. ("Citadel") to Maranatha Broadcasting Co., Inc., IS HEREBY GRANTED.
FEDERAL COMMUNICATIONS COMMISSION
Roy J. Stewart
Chief, Mass Media Bureau
2707