WPCbN 2?BJZECourier3|j#Xj\  P6G;XP#HP LaserJet 4M (PCL) lpt2HPLA4MP0.PRSx  @\+[X@ X-#Xj\  P6G;yoXP#2,qKXCourierTimes New Roman"i~'^:DPddDDDdp4D48dddddddddd88pppX|pDL|pp||D8D\dDXdXdXDdd88d8ddddDL8ddddX`(`lD4l\DDD4DDDDDDDDd8XXXXXX|X|X|X|XD8D8D8D8ddddddddddXdbdddpdXXXXXlX~|X|X|X|XdddldldD8DdDDDdplld|8|P|D|D|8dvddddDDDpLpLpLpl|T|8|\ddddddl|X|X|Xd|DdpL|Dd~4ddC$CWxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHxxH\dDXddddd8@d<@d<DDXXdDDxddzHxxHvppDXd<"dxtldpxxd<?xxx,!x6X@`7X@7jC:,Xj\  P6G;XP\ @^5q.$h';U7G;A 7X-#Xj\  P6G;yoXP#2\^7n Z]3|jCourierUniversTimes New RomanTimes New Roman ItalicHP LaserJet 4M (PCL) lpt2HPLA4MP0.PRSx  @\+[X@ ?<  #x6X@`7?X@#2Jvpktka8DocumentgDocument Style StyleXX` `  ` a4DocumentgDocument Style Style . a6DocumentgDocument Style Style GX  a5DocumentgDocument Style Style }X(# 2 |v! t  a2DocumentgDocument Style Style<o   ?  A.  a7DocumentgDocument Style StyleyXX` ` (#` BibliogrphyBibliography:X (# a1Right ParRight-Aligned Paragraph Numbers:`S@ I.  X(# 2  z !  a2Right ParRight-Aligned Paragraph Numbers C @` A. ` ` (#` a3DocumentgDocument Style Style B b  ?  1.  a3Right ParRight-Aligned Paragraph Numbers L! ` ` @P 1. ` `  (# a4Right ParRight-Aligned Paragraph Numbers Uj` `  @ a. ` (# 2  s; a5Right ParRight-Aligned Paragraph Numbers _o` `  @h(1)  hh#(#h a6Right ParRight-Aligned Paragraph Numbersh` `  hh#@$(a) hh#((# a7Right ParRight-Aligned Paragraph NumberspfJ` `  hh#(@*i) (h-(# a8Right ParRight-Aligned Paragraph NumbersyW"3!` `  hh#(-@p/a) -pp2(#p 2mTech InitInitialize Technical Style. k I. A. 1. a.(1)(a) i) a) 1 .1 .1 .1 .1 .1 .1 .1 Technicala1DocumentgDocument Style Style\s0  zN8F I. ׃  a5TechnicalTechnical Document Style)WD (1) . a6TechnicalTechnical Document Style)D (a) . 2&{!a2TechnicalTechnical Document Style<6  ?  A.   a3TechnicalTechnical Document Style9Wg  2  1.   a4TechnicalTechnical Document Style8bv{ 2  a.   a1TechnicalTechnical Document StyleF!<  ?  I.   2X3!Ta7TechnicalTechnical Document Style(@D i) . a8TechnicalTechnical Document Style(D a) . Doc InitInitialize Document Stylez   0*0*0*  I. A. 1. a.(1)(a) i) a) I. 1. A. a.(1)(a) i) a)DocumentgPleadingHeader for Numbered Pleading PaperE!n    X X` hp x (#%'0*,.8135@8:>iiffSSxSrff8SS?"xxSxXxxS姧0 S88xcxxxxxxxxxx8S{g]ix{S8ixSi`xlxxxxxxxxxxYxxxxxxofxGcxxxxxxxSxxxxxxxJxxxxJxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx8xxx8xxx8xxx8xxxxxxxxxxxxx{]iY]S{Y`MfGx`Y.(oS{V]x]iG`x`cYccJiMrYuxPr{{`x8irr{Y]rrz88iiii{xiiirrr{8`SJ8Muu]daqqZZnn{{xu{{M{aZZ5M5M҅P?k"i~'^"(22TN"""28"2222222222888,\HBBH>8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""TTuuuuu:uuuuu!u:''uuuuuTEuuTTTTTTTTTT'u:VHAIuuTuV:'IT:ICT[LuuTTTTTTTTTTuuuuu?uTTTTuuuuuuuuuuuuuuuuuuuTTuuuuuuaNG[uTuuu2ETTTTuuuuuuTTT:TTuTTuuuTTT4TTTT4TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT'TTT'TTT'TTT'TTTTTTTTTTTTTVAI?A:V?C6G2TCY? N:V-provide the lending broadcaster with de facto control of the borrower. See InterUrban  X)-Broadcasting of Cincinnati, Inc., supra, 10 FCC Rcd at 8779. It has also been determined  X-that a lender holding a potential stock ownership (e.g., options or warrants convertible to  X-voting stock) is not considered (without more) a real party in interest. See Urban  X-Telecommunications Corp., 7 FCC Rcd 3867, 3869 (1992); Barry Skidelsky, 7 FCC Rcd 1, 34 (Rev. Bd. 1992). As for Liggett's options to purchase the stations (which are only exercisable upon prior Commission approval), the Commission has repeatedly held that options and warrants are only attributable upon exercise, as Section 73.3555 Note 2(f) of the  X-Rules specifically states.X yO#-#X\  P6G;H;P#э Section 73.3555(f), 47 C.F.R.  73.3555 Note 2(f), states in pertinent part as follows: "Holders of debt and instruments such as warrants, convertible debentures, options or other nonvoting interests with rights of conversion to voting interests shall not be attributed unless and until conversion is effected." BBC License Subsidiary L.P., 10 FCC Rcd 7926, 7933 (1995);  X{-WWORTV, Inc. 6 FCC Rcd 6569, 6572 n. 13 (1991). Especially because Liggett has no present equity interest in Jencom, the combination of Liggett's options and its provision of personal guarantees does not present a substantial and material issue of fact as to whether Liggett is a real party in interest in Jencom."8 *6)6)\"ԌxNor do the advantageous terms afforded to Jencom by Liggett for the purchase of WJIM(AM)/FM and WVIC/WVFN raise a substantial and material question of fact as to whether Liggett has an undisclosed ownership interest in Jencom or the ability to control the stations. Liggett's own interest in acquiring WITL as expeditiously as possible is a reasonable explanation for making the stations available to Jencom on advantageous terms, rather than placing the stations on the market and awaiting a buyer. The prior business relationship between Mr. Liggett and Mr. Jenson is also a valid explanation for these beneficial terms, as is the extension of an option to Liggett to acquire the stations at a later date. Nor does the lease of studio space from Liggett to Jencom give rise to an inference of control by Liggett over Jencom's stations, especially where Liggett and Jencom have submitted sworn statements to the contrary. We have no basis to doubt the validity of their sworn statements that the studio lease will be an armslength arrangement, and the proximity of their respective stations' operations does not, in itself, raise a substantial and material question of fact as to whether Liggett will control Jencom's stations. xWe also reject Regional's contention that the arrangements involving Station WMMQ provide evidence of control by Liggett over Jencom. According to Regional, Jencom will provide programming and sales for station WMMQ pursuant to an LMA, while Liggett, which holds an option to purchase WMMQ, has a provision in its option agreement whereby it will hold WMMQ's licensee "harmless . . . with regard to the operation of WMMQ." There is no basis to conclude that these two agreements are intertwined in a manner which demonstrates ultimate control of Jencom by Liggett. No substantial and material issue of fact is raised by these relationships with WMMQ. xIn addition, the cases relied on by Regional in support of its claim that the facts in the present case give rise to a real party in interest issue do not support that conclusion. In  X-Pleasure Island Broadcasting, Inc., 6 FCC Rcd 4163 (Rev. Bd. 1991), the Review Board refused to add a real party in interest where one of three shareholders of a corporate applicant had little understanding of her corporate duties and had relied for advice on her husband, an experienced broadcaster. Here, there is little question that Mr. Jenson has the background and experience to act on his own behalf in operating the stations. Nor does the Board's decision  X9-in KOWL, Inc., 49 FCC 2d 964 (Rev. Bd. 1974), support the finding that Liggett is the real party in interest in Jencom's applications. There the Board concluded that a real party in interest issue was warranted where the alleged real party's son had undertaken initial development of the project prior to his arrest on drug charges, at which time the son supposedly withdrew from the project. The father nonetheless agreed to buy all the station's equipment and lease it to the applicant and also agreed to lend the applicant all the applicant's first year operational expenses, with no collateral or payments for the first year. By contrast, in the present case, Jencom arranged the station acquisition financing directly with an independent financial institution, and Liggett is not lending any funds to Jencom.  XU%-xCrossInterest Policy. We agree with Liggett and Jencom that the proposed transactions do not violate the crossinterest policy. The crossinterest policy considers the impact of "meaningful" nonattributable interests that are held by persons with attributable  X(-interests in other stations in the market. See Notice of Inquiry in MM Docket No. 87154,"(*6)6)&"  X-Reexamination of the Commission's CrossInterest Policy, 2 FCC Rcd 3699 (1987).$ {Oy-#X\  P6G;H;P#э The cited Notice of Inquiry questions the continued efficacy of the crossinterest policy. This inquiry proceeding was subsequently combined with the Commission's rule making proceeding on reexamination of the  {O -attribution rules. Notice of Proposed Rule Making in MM Docket Nos. 94150, 9251, and 87154, 10 FCC Rcd 3606 (1995).  However, as noted by Liggett and Jencom, after the revision of the multiple ownership rules to allow an increase in the number of stations that can be owned locally, one entity could own WJIM(AM), WJIMFM, WITLFM, WVFN(AM), WVICFM, and WFMK(FM). In such a case where all the stations at issue can be commonly owned in compliance with the rules, the  X-Commission has declined to raise a crossinterest issue. See FM Broadcasters of Douglas  Xz-County, 10 FCC Rcd 10429, 10231 (1995); Kern Broadcasting Corp., 10 FCC Rcd 6584, 6588 (1995). Moreover, in the present case, both Mr. Jenson and Mr. Liggett have attested that WJIM(AM)/FM and WVIC/WVFN will be operated independently of Liggett's stations as fully competitive outlets, and Regional has provided no facts to contradict these statements. There is, therefore, no basis for questioning these representations. In addition we do not believe that the provision of guarantees by Liggett's owners for the benefit of Jencom's lender, nor the other advantageous sales terms discussed above, require invocation of the  X -crossinterest policy.#   yO@-#X\  P6G;H;P#э By amendments filed March 21, 1996, Jencom reported that James Jenson had resigned as President of Liggett Broadcast, Inc. Therefore Mr. Jenson has already severed his "key employee" relationship with Liggett.# See Dick Broadcasting Co., Inc., of Tennessee, 47 FCC 2d 1051  X -(1974); Cleveland Television Corp., 91 FCC 2d 1129, rev. denied, FCC 83235 (May 18,  X -1983), aff'd Cleveland Television Corp. v. FCC, 732 F.2d 962 (D.C. Cir. 1984).  X-xLack of Candor/Misrepresentation. We also reject Regional's contention that Jencom and Liggett lacked candor with, or made misrepresentations to, the Commission, and that they withheld materially significant information from the Commission. As noted above, Regional points to four areas of information where it claims these parties have withheld critical information: (1) in failing to disclose in the WJIM assignment application that Liggett paid more for WJIM(AM)/FM than it was selling them to Jencom for; (2) in failing to disclose in the WJIM application that Liggett had already contracted to purchase WITL, which application was not filed until after the deadline for filing petitions to deny the WJIM assignments; (3) in stating that Liggett will have no ability to influence the operations and programming of WJIM(AM)/FM after the closing; (4) in failing to disclose that Liggett was "subsidizing" Jencom's purchase of WVIC/WVFN by tying Jencom's purchase of that station to Liggett's purchase of WITL from the same seller, MSP, at an inflated price. xWith respect to the price that Liggett paid for WJIM(AM)/FM in 1993, which price was significantly higher than Jencom will pay for the stations, we note that the price an assignor previously paid for a station being sold is not requested anywhere in the application form. Therefore, Jencom and Liggett cannot be faulted for "failing" to disclose that price, especially where that price is found anyway in the Commission's records concerning the previous assignment. As for the alleged failure to report in the WJIM application that Liggett had simultaneously contracted to obtain an assignment of WITL and that Jencom was also"   *6)6)" going to acquire WVIC/WVFN, again the Form 314 application (at Question 6) only specifically asks about broadcast applications currently "pending" before the Commission, and the WITL and WVIC/WVFN applications, which involved a third party, MSP, were not yet on file at the time the WJIM application was filed. MSP's President states in his Declaration that MSP did not receive signed copies of the WITL and WVIC/WVFN assignment agreements until December 20, 1995, and we have no basis to question MSP's sworn statement in this regard. Moreover, Jencom's intended acquisition of WVIC/WVFN was disclosed in the WJIM application in Attachment A to Exhibit 4, the option agreement. We must also recognize that the time frame for filing the relevant applications may well, as MSP and Liggett assert, have been disrupted by the several weeks of governmental shutdowns in December 1995 through January 1996. Especially in view of Liggett's and Jencom's public announcements regarding these related assignments, we cannot conclude that these parties were engaging in any attempt to mislead the Commission regarding the full range of the transactions involved here. Indeed, virtually all of Regional's allegations regarding the supposed withholding of information comes from these public statements and from the information actually filed by the parties. xRegional's assertion that Liggett falsely stated that it will have no power or authority to control the Jencom stations' programming or operations is based primarily on the fact that Jencom will lease studio space from Liggett for its stations. We do not believe that an inference of control can be made from this fact sufficient to contradict the declarations of Mr. Liggett and Mr. Jenson expressly denying that Liggett will have any such involvement. As for the allegation that Jencom's purchase of WVIC/WVFN is being "subsidized" by Liggett paying MSP a "premium" for WITL, again, the Form 314 assignment application does not specifically ask a question that would elicit such information, and we cannot conclude that Jencom and Liggett lacked candor in failing to respond to a question not asked.  X-xThreats of Retaliatory Petitions. Finally, Regional's claim that Liggett and Jencom's attorneys, during the February 12, 1996, settlement conference, threatened to file objections against Regional's stations if Regional did not dismiss its petitions to deny the present assignments, cannot be credited. Without reaching the question of whether such allegations, if true, are violative of the Commission's rules or policies, we note that these allegations were made by Regional under Section 309(d)(1) of the Communications Act as part of its effort to have the Commission deny the assignments. As such, these allegations are subject to the express requirement of Section 309(d)(1) that "allegations of fact shall, except for those of which official notice may be taken, be supported by affidavit of a person or persons with personal knowledge thereof." Regional's allegations of threats found in its February 14, 1996, Supplement to Petition to Deny and Statement for the Record are not supported by affidavits  X"-or declarations of the Regional attorneys who were present at the settlement conference. " yO%-#X\  P6G;H;P#э Indeed, Regional's Supplement does not attempt to provide quotations of the statements allegedly made by Liggett's attorneys, relying instead on characterizations and descriptions of the alleged threats. Nor did such supporting affidavits or declarations accompany Regional's February 26, 1996, Reply to Opposition to Supplement to Petition to Deny and Statement for the Record, which"h$  *6)6)F#" was filed in response to Liggett's and Jencom's attorneys' declarations under penalty of perjury denying that they had made any such threats against Regional. Thus, we will dismiss these allegations without further consideration.  X-xConclusion. In light of the above, Regional's December 13, 1995, Petition to Deny the application to assign the licenses of Stations WJIM(AM)/FM from Liggett Broadcast, Inc., to Jencom Broadcasting, Inc.; Regional's February 23, 1996 Petition to Deny the application to assign the license of Station WITLFM from MSP Communications, Inc., to Liggett Broadcast, Inc.; and Regional's March 29, 1996, Petition to Deny and Motion to Consolidate the application to assign the licenses of Stations WVFN(AM)/WVICFM from MSP Communications, Inc., to Jencom Broadcasting, Inc., ARE DENIED. Having found that Liggett and Jencom are qualified to assign and purchase Stations WJIM(AM) and WJIMFM and that the sale would further the public interest, convenience, and necessity, we GRANT that application. Having found that MSP and Liggett are qualified to assign and purchase Station WITLFM and that the sale would further the public interest, convenience, and necessity, we GRANT that application. Having found that MSP and Jencom are qualified to assign and purchase Stations WVFN(AM) and WVICFM and that the sale would further the public interest, convenience, and necessity, we GRANT that application. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhLinda Blair, Chief x` `  hhAudio Services Division x` `  hhMass Media Bureau