******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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 ) ) WILLIAM S. DAUGHERTY III ) ) For Reinstatement of Expired Permit ) File No. BPH-941026JA for Station WXJJ(FM), Mt. Vernon, ) Kentucky ) ) ) WILLIAM S. DAUGHERTY III ) (Assignor) ) ) and ) ) VERNON R. BALDWIN ) (Assignee) ) ) For Assignment of the Construction ) File No. BAPH-960531GL Permit of Station WXJJ(FM), Mt. ) Vernon, Kentucky ) MEMORANDUM OPINION AND ORDER Adopted: June 6, 1997 Released: June 12, 1997 By the Commission: 1. The Commission has before it the December 13, 1996 Application for Review filed by William S. Daugherty III ("Daugherty"). Daugherty seeks review of the November 26, 1996 Mass Media Bureau action which: (1) granted the petition for reconsideration filed by Cumberland Media, Inc. ("CMI"), licensee of Station WRVK(AM), Mt. Vernon, Kentucky; (2) denied the captioned application for reinstatement of the construction permit for Station WXJJ(FM), Mt. Vernon; (3) cancelled the WXJJ(FM) construction permit and deleted the WXJJ call letters; and (4) dismissed as moot the captioned application (File No. BAPH-960531GL) to assign the WXJJ(FM) permit from Daugherty to Vernon R. Baldwin, Inc. See Letter to William S. Daugherty III from the Chief, Audio Services Division, Mass Media Bureau, November 25, 1996 (reference 1800B3-JR) ("staff action"). CMI filed an Opposition to the Application for Review on December 27, 1996 and Daugherty a Reply on January 13, 1997. For the reasons set forth below, review is denied. 2. Background. Daugherty's application for a construction permit for WXJJ(FM) was granted April 30, 1990 with a construction period ending October 30, 1991. In subsequent years Daugherty received one modification, one extension, and three reinstatements of the permit, each of which he allowed to expire. At issue here is a fourth reinstatement request (in effect, the fifth extension of time to construct sought by Daugherty), as well as an additional extension request (the sixth extension request overall) which was filed prior to staff action on the fourth reinstatement request. The reinstatement application was granted, and the additional extension request was dismissed as unnecessary by the staff on August 23, 1996. 3. CMI sought reconsideration of the August 23, 1996 grant of Daugherty's request to reinstate his expired permit and filed an informal objection to a subsequently filed proposed assignment application. CMI argued in support of reconsideration that Daugherty failed to show sufficient construction progress to support extension or replacement of the WXJJ(FM) permit and that Daugherty had misrepresented his actual construction progress in the reinstatement request. Subsequently, after evaluating CMI's request and Daugherty's response to a staff inquiry, the staff reversed the reinstatement grant and cancelled the permit, because Daugherty had not met the criteria set forth in 47 C.F.R. 73.3534. The staff action indicated that there had been "very little actual progress towards constructing WXJJ(FM)" during the last construction period. Staff action at p. 5. The staff decision noted that, in light of its determination that reinstatement of the WXJJ(FM) permit was not warranted, it need not address CMI's allegations of misrepresentations by Daugherty regarding his construction efforts. Daugherty thereafter filed the instant application for review. 4. Discussion. Daugherty first argues that in fact he made "substantial" progress during his last construction period and that an extension of his permit was therefore warranted under 47 C.F.R. 73.3534(b) (extension of time to construct justified where "substantial construction progress has been made"). Specifically, Daugherty argues that during the relevant period he purchased a transmitter building which "remains at [his] home" and which he intended at some point to "haul[ ] up the mountain" to the site, that he made a $2500 payment on computer hardware and software to be used at the station, that he continued to make payments on vacant space to be used as the WXJJ(FM) studio, and that he "completed gradework and installed drain tiles" on the access road. In this regard, the staff decision quotes passages from both the most recent prior extension request (the third reinstatement) wherein Daugherty states that "the tower site is complete with an access road [and] electrical service. . . " and the nearly identical statements of progress made in the instant extension request (the fourth reinstatement). In light of this earlier statement and the extension "credit" Daugherty had already received for it, the staff properly gave little weight to the access road claims made in the instant extension request. However, we are aware of no Commission precedent to support the conclusion that the level and type of activity described by Daugherty warrants an extension of time to construct, and we agree with the staff that Daugherty's claimed construction progress constituted "very little actual progress towards constructing WXJJ(FM)" and that such incrementally insignificant progress cannot be considered "substantial." See, e.g., Stephen E. Powell, 11 FCC Rcd 11,925 (1996) (permit cancelled when permittee had not received and installed equipment necessary to initiate station operations); Deleted Station WPHR(FM), 11 FCC Rcd 8513, 8518 (1996) (oral agreement for studio lease insufficient to warrant extension); Golden Eagle Communications, Inc., 6 FCC Rcd 5127 (1991), recon. denied, 7 FCC Rcd 1752 (1992) (extension denied despite deposit with equipment suppliers where permittee failed to demonstrate substantial and sustained construction progress); Community Service Telecasters, Inc., 6 FCC Rcd 6026, 6028 (1991) (extension denied where applicant acquired no equipment and erected no tower); High Point Community Television, Inc., 2 FCC Rcd 2506, 2507 (1987) (acquisition of studio and office equipment insufficient to warrant extension). 5. Daugherty further argues that his extension request has not been accorded treatment consistent with other permittees, referencing F.B.C., Inc. ("FBC"), 3 FCC Rcd 4595 (M.M.Bur. 1988), and Rainbow Broadcasting Co., 9 FCC Rcd 2839 (1994) ("Rainbow"). According to Daugherty, in FBC the Mass Media Bureau determined that the permittee had made "substantial progress" where it ordered a tower, transmitter, and antenna and partially completed construction of a transmitter building. In contrast, Daugherty asserts that he already had a tower (on site but not erected), acquired a constructed transmitter building, continued rent payments on studio space, and made a "substantial" down payment for computer hardware and software. Daugherty thus claims that additional time is warranted because he made more construction progress than the applicant in FBC. 6. However, FBC supports rather than undercuts the staff's conclusion that Daugherty failed to make substantial progress toward construction of WXJJ(FM) in the pertinent construction period. In FBC, not only had the permittee completed construction of and substantially furnished its transmitter and studio building, but it had ordered its tower, antenna, and transmitter, the latter two of which were being shipped. Significantly, all of these activities occurred within the initial construction period established for television stations, not over the course of seven years as in the instant case. FBC, 3 FCC Rcd at 4595, 2. The FBC permittee also made a convincing showing that circumstances beyond its control, i.e., the unavailability of its transmitter site despite several attempts to resolve the problem by locating a new site, prevented timely completion of construction. FBC, supra, 3 FCC Rcd at 4597. 7. The other case cited by Daugherty, Rainbow, is likewise inapposite. According to Daugherty, the Commission reinstated a television permit in Rainbow under "very similar" circumstances, e.g., construction of a transmitter building and maintenance of a tower space lease. Contrary to Daugherty's assertions, however, Rainbow did not turn on the issue of whether or not the applicant had made substantial progress toward construction of the station involved. Rather, the Rainbow applicant faced a judicial appeal which the Commission decided rendered its permit grant not final and, consequently, justified the fact that the permittee did not proceed to finish construction of its authorized television facilities. The Commission specifically noted that "[i]t would have been unreasonable to have . . . expected Rainbow to proceed with construction while faced with the uncertainties resulting from the appellate challenges to its construction permit." Rainbow, supra, 9 FCC Rcd at 2846. Daugherty also asserts that he should be given special consideration because he requested and received only a 90-day extension when he could have requested and received a 180- day extension. According to Daugherty, the Commission considered a similar "shortened" period a "mitigating" factor in Rainbow. However, Daugherty's reliance on Rainbow in this context is misplaced. The Commission held in Rainbow that, due to the appellate challenges to its construction permit grant, the permittee had not been afforded the normal 24-month construction period allotted television permittees under 47 C.F.R. 73.3598; it therefore could receive "automatic" extensions of its permit so long as, in their totality, such extension grants afforded the permittee no less than the full 24 months (from the date its permit grant became final) to which it was entitled. Rainbow, 9 FCC Rcd at 2846. Here, Daugherty received the full 18-month initial construction period to which he was entitled as a radio permittee under Section 73.3598; he therefore does not qualify for any "automatic" extensions, and his situation cannot be analogized to that in Rainbow. 8. Finally, we conclude that the staff action was not, as Daugherty argues, deficient for failing to address CMI's misrepresentation allegations, inasmuch as the determination was not predicated on those charges. Rather, the staff action was properly based upon a determination that Daugherty had not made sufficient construction progress during the most recent applicable construction term to warrant additional time to construct. Upon reaching such a conclusion, which warranted cancellation of the WXJJ(FM) permit and deletion of its call sign, the staff had no obligation to evaluate CMI's misrepresentation claims. Daugherty also questions the relevance of the "extensive" discussion of his prior requests for additional time to construct. The recitation was, in fact, relevant for purposes of evaluating the extension of time request, insofar as it served to demonstrate the extent of Daugherty's construction progress, or the lack of it, during the most recent construction period. See e.g., note 7. 9. Conclusion/action. Accordingly, for the reasons stated above and pursuant to 47 C.F.R. 1.115(g), the Application for Review filed December 13, 1996 by William S. Daugherty III IS DENIED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary