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$/ 73.3555(c) one-to-a-market waiver /$

                                Before the
                         FEDERAL COMMUNICATIONS COMMISSION   DA 96-453
                          WASHINGTON, D.C.  20554
 

In re Application of )
          )
EBE Communications Limited Partnership          )
(Assignor))
          )
and       )     BALH-951130ED
          )
Harry J. Pappas      )
(Assignee))
          )
For Assignment of License of         )
KFRE(AM), Fresno, California         )

MEMORANDUM OPINION AND ORDER
   

   Adopted:  March 27, 1996          Released:  March 28, 1996 

By the Chief, Mass Media Bureau:

1.  The Commission, by the Chief, Mass Media Bureau, acting pursuant to delegated authority,
has before it the above-captioned application for assignment of license of KFRE(AM), Fresno,
California, from EBE Communications Limited Partnership ("EBE") to Harry J. Pappas
("Pappas").  There is a related request for 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.  The application is unopposed.  For the reasons stated below, we will grant
the waiver request and the assignment application.

2.  Pappas is currently the licensee of KMPH-FM, Hanford, California and KMPH(TV), Channel
26 (Fox affiliate), Visalia, California, a combination of facilities ordinarily precluded by the
one-to-a-market rule.  The Commission granted Pappas a permanent waiver of that rule to
own both of these stations in 1992.  See Liggett Broadcasting, Inc., 7 FCC Rcd 7124 (1992). 
By the instant application, Pappas seeks to acquire an AM station, KFRE(AM), in the Fresno-
Visalia market.  Since the Grade A contour of KMPH(TV) encompasses Fresno -- KFRE(AM)'s
city of license -- grant of the subject assignment application would create a new radio-
television combination that requires waiver of the one-to-a-market rule.  See 47 C.F.R. 
73.3555(c).  

              Request for Waiver of the One-to-a-Market Rule

3.  Pappas bases its waiver request on the one-to-a-market standards enunciated in the
Second Report and Order in MM Docket 87-7, 4 FCC Rcd 1741 (1989) ("Second Report and
Order"), recon. denied in part and granted in part ("Second Report and Order Recon."), 4 FCC
Rcd 6489 (1989).  Under these standards, the Commission presumptively favors requests
involving (1) stations serving the top 25 markets where at least 30 separately owned,
operated, and controlled stations will remain following the proposed combination; or (2)
"failed" stations (stations that have not been operational for a substantial period of time or
are involved in bankruptcy proceedings).  Otherwise, the requests must be evaluated under a
more rigorous case-by-case approach.  47 C.F.R.  73.3555(c) note 7.  

4.  Since Fresno-Visalia is the 57th largest Designated Market Area (DMA) in the country and
no claim of a "failed station" is made, Pappas' waiver request must be reviewed under the
case-by-case standard.  Under this standard, the Commission makes a public interest
determination based upon the following five criteria: (1) the public service benefits that will
arise from the joint operation of the facilities 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.  See Second Report and
Order, 4 FCC Rcd at 1753.  In support of its request, Pappas submits a showing which
addresses each of the five case-by-case factors.

5.  Benefits of Joint Operation.  Pappas contends that significant public service benefits and
cost savings will be realized if the Commission allows the proposed combination.  According
to Pappas, the consolidation of KFRE(AM) with KMPH-FM and KMPH(TV) will allow KFRE(AM) to
draw upon KMPH(TV)'s existing news-gathering equipment and resources resulting in
enhanced news and public affairs programming for KFRE(AM).  Pappas further states that
KMPH(TV)'s substantial news staff, which covers events and other important issues in the
local communities, will be expanded to include coverage for KFRE(AM).   Pappas also
maintains that KFRE(AM) would benefit from news resources at KMPH-FM, which it states
devotes almost all of its broadcasting to news -- including agricultural news in the heavily
agricultural San Joaquin valley.  Pappas states that if the sale is approved, KFRE(AM), which
previously broadcast a county music format, will switch to an all news/talk format and
KFRE(AM)'s news gathering capabilities will be greatly enhanced through access to Pappas'
existing news services and facilities.  Further, Pappas anticipates that joint operation of
KFRE(AM), KMPH-FM and KMPH(TV) will result in cost savings of between $165,000 and
$235,000 in the first year.  Specifically, Pappas anticipates savings of between $100,000 and
$150,000 through staff consolidation; $20,000 to $30,000 through combining administrative
functions such as payroll, accounting and personnel; $10,000 to $15,000 in a combined
engineering staff; $5,000 to $10,000 in reduced supply and promotional costs; and $30,000 in
studio rent.  

6.  Other Media Outlets/Types of Facilities.  Pappas is the licensee of stations KMPH-FM,
Hanford, California and KMPH(TV), Visalia, California.  Other than these facilities, it has no
other media interests in the market.  KFRE(AM) is a Class B station which operates on 940
kHz with a full time power of 50 kw using a directional antenna.  KMPH-FM is a Class B FM
station operating on 107.5 MHz with 20.3 kw effective radiated power (ERP) from an antenna
height of 784 feet above average terrain (HAAT).  KMPH(TV), a Fox affiliated UHF television
station, operates on Channel 26 with 3236 kw ERP from an antenna at 792 meters HAAT. 
Pappas asserts that, since there are fifteen FM stations with comparable facilities, there is
no danger that the proposed combination will dominate the market from a technical
standpoint.  Pappas further argues that, while KFRE(AM) has greater power than the other AM
stations in the market, it's low Fall 1995 Arbitron audience share figure of 1.6 percent
clearly indicates that it is not a dominant force.

7.  Economic Status.  While Pappas does not assert that the stations are "failed stations" as
defined by the Commission, it does maintain that KFRE(AM) and KMPH-FM are financially
troubled stations.  While EBE has not maintained separate financial records for KFRE(AM), it
estimates that KFRE(AM) incurred a net loss for 1995 of $188,270.  In addition, Pappas
asserts that KMPH-FM lost over $4.2 million from 1987 through April of 1992 and continues
to incur losses.  Specifically, Pappas contends that the operating losses increased from
$835,285 in 1993 to $862,183 in 1994 and finally to $896,635 through November of 1995 -- a
loss of more than $2.5 million since 1992.  

8.  Competition and Diversity in the Market.  The fifth factor is the nature of the relevant
market in light of the Commission's concerns about diversity and competition.  Pappas
asserts that the Fresno-Visalia Designated Market Area (DMA), which is ranked 57th in the
country by Nielsen, contains 11 television stations, 44 commercial radio stations and 6 non-
commercial radio stations, for a total of 61 stations, comprising 43 separately owned and
operated broadcast "voices."  Pappas also submits that the Fresno-Visalia market is served
by 11 low power television stations and translators licensed to 6 independent owners, 2 cable
systems with cable penetration of 50.6 percent, 7 daily newspapers and 14 weekly
newspapers.   Further, Pappas argues that the combined audience share of KFRE(AM) and
KMPH-FM would only be 3.4 percent, a figure exceeded by two other radio station
combinations in the market.  

                                Discussion

9.  In analyzing a case-by-case request for a waiver of the one-to-a-market rule, the
Commission's "goal in all situations 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 Rcd at 6491.  We conclude that, on
balance, Pappas' 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 Fresno-Visalia market.
  
10.  Pappas has shown that joint operation of the stations will result in yearly cost savings of
between $165,000 and $235,000.  Pappas has also demonstrated the potential for enhanced
programming and service benefits.  The proposed combination will strengthen KFRE(AM)'s
news gathering and reporting abilities by providing it access to KMPH-FM and KMPH(TV)'s
existing resources and local programming.  With respect to the types of facilities involved,
the Commission's "concern with the types of facilities merging under the authority of a one-
to-a-market waiver reflects our interest in assessing the potential impact of a proposed
combination of stations in a given market in order that we might predict and avoid any
significant adverse effect on diversity or competition from too powerful a combination." 
Great American Television and Radio Co., Inc., 4 FCC Rcd at 6349.  In this instance, we find
that Pappas has demonstrated that the level of competition and diversity in the Fresno-
Visalia market will remain high due to the number of remaining "voices" in the market.  See
para. 11, below.  While the technical facilities of the stations involved are significant, we find
that given the substantial competition in the market, the proposed combination does not
present issues of market dominance inconsistent with the public interest.  In addition,
Pappas has shown that, since it took over KMPH-FM in 1992, the station has suffered losses
of more than $ 2.5 million.  Further, while precise losses with respect to KFRE(AM) are
difficult to determine since the station has never been operated as a stand-alone facility
and separate figures are not available, Pappas has approximated that KFRE(AM)'s losses for
1995 were in excess of $188,000.  

11.  We further find that the market will be served by a sufficient number of media "voices"
and that the proposed combination will not create any undue concentration of ownership or
control of broadcast media in the Fresno-Visalia market.  Our independent analysis indicates
that after the assignment is approved, the Fresno-Visalia DMA -- ranked 57th in the
country -- will continue to be served by 19 AM stations, 35 FM stations and 12 UHF
television stations, for a total of 66 broadcast stations.  Of those stations, 38 radio stations
and 11 television stations will remain separately owned and operated, for a total of 49
separately owned and operated broadcast "voices" in the market.  In addition, other "voices"
in the market include 11 low power television stations and translators which provide
programming that wouldn't normally reach the area, 7 daily newspapers, 14 weekly
newspapers, and 2 separate cable systems with cable penetration of 50.6 percent.  In light of
the above, we are persuaded that the public benefits of common ownership of KFRE(AM),
KMPH-FM, and KMPH(TV) outweigh any negative effect on competition and diversity in the
Fresno-Visalia market that the combination will engender and that a waiver of the one-to-
a-market rule is therefore warranted.

12.  Accordingly, IT IS ORDERED, That the request for a waiver of the Commission's one-to-
a-market rule, 47 C.F.R.  73.3555(c), IS HEREBY GRANTED; and having found the applicant
fully qualified, the application for assignment of license (BALH-951130ED) of KFRE(AM),
Fresno, California from EBE Communications Limited Partnership to Harry J. Pappas IS
HEREBY GRANTED.



          FEDERAL COMMUNICATIONS COMMISSION


          Roy J. Stewart
          Chief, Mass Media Bureau

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