**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | *  | MM Docket No. 99-153         |
|                                  | *) |                              |
| READING BROADCASTING, INC.       | ** | File No. BRCT-940407KF       |
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| For Renewal of License of        | *  | File No. BPCT-940630KG       |
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| Station WTVE(TV), Channel 51     | ** |                              |
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| Reading, Pennsylvania            | *  |                              |
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| And                              | ** |                              |
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| ADAMS COMMUNICATIONS             | *  |                              |
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| CORPORATION                      | ** |                              |
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| For Construction Permit for a    | *  |                              |
| New                              | *) |                              |
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| Television Station to Operate on |    |                              |
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| Channel 51, Reading,             | *) |                              |
| Pennsylvania                     | ** |                              |
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+----------------------------------+----+------------------------------+

**APPEARANCES**

[Thomas J. Hutton]{.underline}, [Eric Fishman]{.underline}, and [C.
Dennis Southard, IV]{.underline} on behalf of Reading Broadcasting,
Inc.; [Gene A. Bechtel]{.underline} and [Harry F. Cole]{.underline} on
behalf of Adams Communications Corporation; [Erwin G.
Krasnow]{.underline}, [Eric T. Werner]{.underline}, and [Michael M.
Pratt]{.underline} on behalf of Micheal L. Parker; and [Charles W.
Kelley]{.underline} and [James W. Shook]{.underline} on behalf of the
Chief, Enforcement Bureau.

**DECISION**

**Adopted:** July 3, 2002 **Released:** July 11, 2002

By the Commission:

**I. PRELIMINARY STATEMENT**

1\. In this decision, we reverse the Initial Decision of Administrative
Law Judge Richard L. Sippel, which denied the renewal application of
Reading Broadcasting, Inc. (RBI) and granted the competing application
of Adams Communications Corporation (Adams) for a construction permit.
We find that RBI is the comparatively superior applicant here, despite a
minimal past record in operating the station. In so doing, we dispose of
the last remaining "comparative renewal" proceeding, in which an
incumbent licensee faces a comparative challenge from a construction
permit applicant for the same facilities. Congress, by [Act of February
8, 1996]{.underline}, Pub. Law 104-104, 110 Stat. 56, [codified
as]{.underline} 47 C.F.R. § 309(k)(4), prohibited the comparative
consideration of renewal applicants filed after May 1, 1995. In
[Implementation of Section 309(j) of the Communications
Act]{.underline}, 13 FCC Rcd 15920, 16005-06 ¶¶ 212-14 (1998), discussed
further at paragraph 73, below, the Commission determined that, auctions
not being a legally available option, it would apply the factors set
forth in [Policy Statement on Comparative Broadcast
Hearings]{.underline}, 1 FCC 2d 393 (1965), consistent with existing
case law, to resolve the few remaining comparative renewal cases
including this one.

**I. BACKGROUND**

2\. RBI seeks renewal of its license to operate station WTVE(TV),
Channel 51, Reading, Pennsylvania. In addition to the standard
comparative issue, issues were designated as to the basic qualifications
of RBI and Adams to be licensees. The first issue seeks to determine
whether RBI's principal Micheal L. Parker (Parker) made
misrepresentations or lacked candor before the Commission in reporting
his previously adjudicated misconduct. The second issue concerns
allegations that Adams abused the Commission's processes by filing its
application for an improper purpose.

3\. Administrative Judge Richard L. Sippel (ALJ) granted Adam's
competing application and denied RBI's renewal application. [Reading
Broadcasting, Inc.]{.underline}, FCC 01D-01 (ALJ Apr. 5, 2001) (ID). The
ALJ resolved both basic qualifications issues favorably to the
respective applicants. The ALJ concluded that Adams had not filed its
application for the improper purpose of obtaining a settlement and that
Adams' principals had not lacked candor in their testimony on the
subject. ID at ¶ 247. Turning to RBI, the ALJ held that Parker, who is
RBI's president, a director, and a shareholder, had given false and
misleading information in a series of applications, concerning his prior
involvement in misconduct. ID at ¶ 235. Although the ALJ concluded that
Parker was unqualified to be a Commission licensee, the ALJ further held
that RBI was not disqualified provided that it severed its relationship
with Parker. [Id]{.underline}.

4\. Having found both applicants basically qualified, the ALJ resolved
the comparative issue favorably to Adams. He ruled that RBI was not
entitled to a renewal expectancy because WTVE(TV)'s programming had been
deficient during the relevant 1989-94 license term and because Parker
had violated the Commission's rules by transferring control of the
station without authorization and by violating the Commission's
reporting requirements. ID at ¶ 246. The ALJ awarded Adams a slight
comparative preference for diversification because Parker had interests
in existing broadcast stations. ID at ¶ 249. He also gave Adams a slight
preference for comparative coverage. ID at ¶ 250. In the ALJ's view,
these advantages outweighed RBI's slight preferences for local residence
and civic activities. ID at ¶¶ 251-52.

5\. Now before the Commission are exceptions to the initial decision
filed by RBI, and related pleadings.[^1] For the reasons set forth
below, we will reverse the initial decision. We find that neither Adams
nor RBI's Parker committed disqualifying misconduct, that RBI is not
entitled to a renewal expectancy based on its past operation of
WTVE(TV), but that RBI is comparatively superior to Adams.

**II. ADAMS' ABUSE OF PROCESS ISSUE**

6\. [Initial Decision]{.underline}. In considering Adams' basic
qualifications, the ALJ credited Adams' claim that it did not abuse the
Commission's processes[^2] by filing its application for the purpose of
reaching a settlement, as opposed to having a bona fide intention to own
and operate a broadcast station.[^3] In reaching his decision, the ALJ
considered evidence submitted by RBI that most of Adams' principals had
previously been principals of Monroe Communications Corporation
(Monroe), which had filed a comparative challenge against a television
station in Chicago. ID at ¶ 154. Although the Commission granted
Monroe's application after lengthy proceedings, Monroe's principals did
not operate the station, but instead agreed to a settlement in which
they dismissed their application in return for a buy-out of
approximately \$17.5 million. However, the ALJ noted that the
Commission, in approving the Chicago settlement, found that Monroe had
not filed for the purpose of reaching a settlement. [Id]{.underline}.
The ALJ also credited testimony that Monroe's principals would have
operated the station except that they believed that they would not be
able to produce Spanish language programming equal to the station's
existing programming. ID at ¶ 239.

7\. The ALJ also considered testimony as to Adams' motives for filing
the Reading application. He found that Adams' principals believed that
home shopping stations such as WTVE(TV) generally did not serve the
public interest because such stations did not originate local
programming, and that these stations were vulnerable to a comparative
renewal challenge. ID at ¶¶ 157-58. The Adams principals formulated a
strategy under which they would challenge a home shopping station
regardless of where it was located. ID at ¶ 158. After encountering
difficulties acquiring a transmitter site needed to mount a challenge in
Marlborough, Massachusetts, Adams' principals pursued the Reading market
as the next available opportunity. [Id]{.underline}. at ¶¶ 158-59. The
ALJ credited testimony that, in pursuing this strategy, Adams'
principals had acted out of a primary motive to acquire a station at low
cost. ID at ¶¶ 156-57, 159.

8\. In reaching this conclusion, the ALJ discounted the significance of
circumstances that could arguably be interpreted as suggesting a lack of
serious interest in operating a broadcast station in Reading. For
example, the ALJ found that Adams had no connection with the Reading
area and "it cannot be accepted that they picked RBI from a list of
renewals out of concern at the time of target selection for the
interests of the local viewers of Channel 51." [ID]{.underline} at ¶
157. Additionally, he found that Adams' investigation of Reading
reflected "uncontrolled, haphazard methodology." [Id]{.underline}. at ¶
160. He noted in particular, an incident, the significance of which the
parties hotly disputed. In May 1994, Adams principal Howard N. Gilbert
hired a man named Paul Sherwood to tape WTVE(TV)'s programming, so that
Gilbert could review the station's public service offerings. ID at ¶¶
161-66. Sherwood, however, mistakenly taped not WTVE(TV), but the "Home
Shopping Club" cable channel. Although Gilbert reviewed the tapes, he
did not discover that he was not watching WTVE(TV) until after this
proceeding commenced in 1999. The ALJ did not consider these lapses to
be a demonstration that Adams lacked a serious intent to construct and
operate the station.

9\. The ALJ also found no indication that Gilbert's eventual
participation in settlement talks with the Spanish language network,
Telemundo, whose programming was by this time being carried by WTVE(TV),
demonstrated that Adams had filed its application with an intent to
settle. ID at ¶¶ 170-73. According to the ALJ, Adams' attorney told
Telemundo attorney, Anne Swanson, that, while Adams planned to pursue
its application, it "would not say 'no' to a settlement." ID at ¶ 170.
Swanson asked Gilbert for a settlement figure, but Gilbert would not
give one because Adams had not valued the station. Gilbert agreed that
Adams would pay one-third of the cost of an appraisal and indicated that
he would be "reasonable" about a settlement. ID at ¶¶ 171-72. RBI,
however, did not participate in the settlement talks and the settlement
did not materialize. The ALJ found that "Gilbert was prepared to
negotiate a serious settlement in 1999," but that he was not the
initiator of the discussions. ID at ¶ 172, 243. Similarly, the ALJ did
not find it dispositive of an intent to settle that the fee agreement
between Adams and its attorneys (who were also Monroe's attorneys)
provided that the attorneys would receive twice their usual hourly rate
if Adams application were granted or if the application were dismissed
on "economically favorable" terms, including a settlement for reasonable
and prudent expenses. [ID]{.underline} at ¶ 174.

10\. Viewing the totality of the circumstances, the ALJ ultimately
concluded that Adams did not file its application for the purpose of
reaching a settlement, which would have been an abuse of process.
[See]{.underline} [Garden State Broadcasting Limited Partnership v.
FCC]{.underline}, 996 F.2d 386 (D.C. Cir. 1993). For the reasons noted
in paragraph 6, [supra]{.underline}, he did not believe that the
participation of Adams' principals in the earlier Monroe application
reflected adversely on their motives for filing in Reading. ID at ¶ 239.
He concluded that, in view of the Commission policy limiting settlements
to expenses, and then only after a hearing, it would not have been
realistic for Adams' principals to file for the purpose of achieving a
settlement, and it was credible that they intended to seek a
construction permit. ID at ¶ 240. Additionally, the ALJ observed that
Adams had shown concern for programming and had taken serious steps to
litigate its application. ID at ¶¶ 241-42. Finally, the ALJ believed
that WTVE(TV), which was only recently emerging from bankruptcy, was not
a logical target for an applicant seeking a cash settlement. ID at ¶
244.

11\. [Exceptions]{.underline}. In its exceptions, RBI contends that the
ALJ's conclusion that Adams filed its application for the purpose of
owning and operating a station cannot be reconciled with Gilbert's
original testimony that Adams' had a different motive for filing --
namely, to set a precedent that the home shopping format was generally
contrary to the public interest. RBI sees Adams' application as a
continuation of the pattern of conduct manifested by the Chicago
settlement in which they file an application to make a point and then
settle even if they are granted the facility. RBI accuses Adams'
principals of lacking candor in describing and producing documents
regarding their settlement talks with Telemundo and their effort to
ascertain Reading's programming needs. According to RBI, a motive to
settle would be disqualifying, even if it were not the primary motive
for filing. RBI also contends that the Adams fee agreement with counsel
betrays an intention to settle because, for purposes of compensating
counsel, it treats settlement as equivalent to grant of the application.

12\. Adams responds that the ALJ carefully analyzed the testimony of
Adams' witnesses and specifically found that testimony credible.
[See]{.underline} ID at ¶ 245. The Enforcement Bureau agrees with the
ALJ that no abuse of process occurred, although it found the testimony
of Adams' witnesses troubling in some respects.

13\. [Discussion]{.underline}. This issue presents a close question as
to whether Adams' primary motive was to operate the station or to obtain
a settlement. As an initial matter, we disagree with RBI's suggestion
that Adams' application would be abusive even if an intention to settle
was only a secondary motive. Our cases make clear that, to constitute
abuse, an improper motive, such as a motive to settle, must be the
primary and substantial purpose of the filing. [See]{.underline} [Radio
Carrollton]{.underline}, 69 FCC 2d 1139, 1150-51 ¶¶ 24-26 (1978),
r[econ. denied]{.underline}, 72 FCC 2d 264 (1979).[^4] [See
also]{.underline} [Faulkner Radio, Inc. v. FCC]{.underline}, 557 F.2d
866, 875 (D.C. Cir. 1977). Thus, Adams' application would represent an
abuse of process only if it was filed for the primary purpose of
obtaining a settlement. [See also]{.underline} 47 C.F.R. §
73.3525(b)(2).

14\. We find that the record raises a substantial question as to whether
Adams' primary interest was in owning and operating a station or whether
the application was filed for other purposes with the ultimate
expectation of settlement. Testimony by Adams' principal, Gilbert,
suggests that the group's primary motivation was to influence Commission
policy regarding home shopping stations generally, rather than obtaining
ownership of a broadcast station. He acknowledged that the group's
interest was in public service broadcasting nationwide, as opposed to
Reading in particular, and termed the group "crusaders" in this regard.
Tr.1131-32. He said that he knew of no station with a home shopping
format that served the public interest, that there was nothing unique
about Reading, and that Reading was chosen simply because it was the
next available station up for renewal.[^5] Tr. 1119, 1122-24. He
testified: "\[T\]he problem is how to get FCC to make a statement and do
something so you would change the nature of broadcasting." Tr. 1118. He
further testified that: "If we win this case, and you have to have a
reasonable amount of public service broadcasting, Home Shopping Network
isn't going to work." Tr. 1120. He explained that the group did not
offer to buy a home shopping station because: "That wouldn't have
achieved the result we were trying to achieve." Tr. 1115. He then drew
an analogy to the Chicago proceeding, in which Monroe settled: "We'd
been successful in Monroe, in first knocking off pay TV. Equally or more
important, as it came, we stopped pornography in the United States."
[Id]{.underline}.

15\. Gilbert's testimony further suggests that Adams' principals gave
little attention to the things that reasonable business people typically
do in preparing to acquire a station. According to Gilbert, the group
had no written analysis of the demographics of the Reading market and
was not interested in researching the revenue of WTVE(TV). Tr. 1065-66.
They did not research the potential value of the construction permit
they were applying for. Tr. 1066. [See also]{.underline} Tr. 2530
(indicating that Adams also did not research the Marlborough,
Massachusetts station). Even the ALJ found that the "evidence of
\[Adams\] investigating the needs of the community is accorded little
weight." ID at ¶ 160. Additionally, the fee arrangement between Adams
and its attorneys suggests that Adams viewed settlement as no less
favorable an outcome than grant of a construction permit. The agreement
provides that the attorneys would receive approximately one-half their
usual fee for litigating the case, but that they would receive twice
their usual fee if: "(a) the Adams application is ultimately granted, or
(b) the Adams proceeding is resolved through a settlement which is
economically favorable for Adams (including, for example, a resolution
which entitles Adams to reimbursement for its reasonable and prudent
expenses . . . . " RBI Exh. 21. By contrast, the earlier Monroe fee
agreement (involving the same attorneys) provided that the attorneys
would receive twice their usual rate if the Monroe application were
granted, but only their usual rate if the application were dismissed
pursuant to a settlement agreement. RBI Exh. 20.

16\. Weighing against these circumstances, is the fact that the ALJ
specifically found credible the testimony of Adams' principals that they
intended to operate the station. He held that:

There has been a careful analysis of the testimony of Adams principals
regarding motive for filing, the Telemundo settlement and programming
discussions, the taping episode, and the temporary lapse of Adams'
corporate status. The testimony of Adams principals, while not crisp,
clear and concise in all respects, has not misrepresented any material
facts, has not misstated any facts of decisional significance, has not
distorted the record, has not been misleading, and has not been lacking
in candor.

ID at ¶ 245. This testimony indicates that Adams filed its challenge as
a way to obtain a station. Tr. 2429-30, 2467-68. It also indicates that
Adams intended to operate the station as a Spanish language station. Tr.
1126-27, 2444-45; RBI Exh. 45 at 9-11. We believe that the ALJ's
determination of the credibility of Adams' witnesses is entitled to
deference. [See]{.underline}, [e.g.]{.underline}, [TeleSTAR,
Inc.]{.underline}, 2 FCC Rcd 5, 13 ¶ 23 (Rev. Bd. 1987),
[citing]{.underline}, [Penasquitos Village, Inc. v. NLRB]{.underline},
565 F.2d 1074, 1078-80 (9^th^ Cir. 1977). While the ALJ did not make
specific demeanor findings in his initial decision, the record indicates
that he actively participated in questioning witnesses concerning this
issue. [See]{.underline}, [e.g.]{.underline}, Tr. 2452-58. Given the
close attention that the ALJ manifestly paid to the live testimony, it
would be unreasonable to suppose that he could have reached the
conclusion he did in the preceding quotation unless his observation of
the witnesses satisfied him that they were credible. This factor
distinguishes the present case from [Garden State Broadcasting Limited
Partnership v. FCC]{.underline}, 996 F.2d 386, 391-92 (D.C. Cir. 1993),
in which an applicant's claimed motivation for filing was shown to be a
fabrication.

17\. We have examined the other various factual issues that RBI argues
demonstrate that Adams had no interest in operating the station and that
it intended to settle. We find that this evidence is ambiguous at best
and thus does not provide a basis to reject the ALJ's conclusion that
the testimony of Adams' principals establishes that they intended to
operate the station. Adams' willingness to engage in settlement
discussions with Telemundo does not demonstrate that settlement was
Adams' primary motive. While the testimony concerning the Telemundo
settlement discussions indicates that Gilbert seriously explored the
possibility of settlement, Telemundo's attorney recalled that Gilbert
planned to pursue his application. Tr. 2221. She also recalled that
Gilbert expressed an interest in becoming a Telemundo affiliate in the
event the Adams application was granted. Tr. 2262, 2278, 2281-82.
Similarly, Adams' carelessness in attempting to tape WTVE(TV)'s
programming does not by itself establish that Adams had no real interest
in investigating WTVE(TV)'s allegedly poor performance as preparation
for operating the station. Under these circumstances, we do not see a
firm basis to reject the ALJ's findings on this issue, and we therefore
affirm the ALJ's conclusion that Adams did not abuse the Commission's
processes in filing its application. Similarly, we find no basis to
conclude Adams' witnesses committed misrepresentations in their
testimony. As noted, the ALJ closely observed these witnesses and found
no significant misconduct in the asserted discrepancies advanced by RBI.
Our own review of the record provides no substantial basis to disagree
with the ALJ's conclusions in this regard.

**III. RBI MISREPRESENTATION/ LACK OF CANDOR ISSUE**

18\. [Initial Decision]{.underline}. The ALJ found that RBI's president,
director, and shareholder, Micheal L. Parker made misrepresentations and
lacked candor before the Commission. He found that Parker made false and
misleading statements concerning misconduct in which Parker was involved
that was found in two prior Commission proceedings discussed below. ID
at ¶¶ 223-32.

19\. *San Bernardino Proceeding*. In the San Bernardino comparative
proceeding, the presiding Administrative Law Judge found that Parker was
an undisclosed real-party-in-interest in an application filed by San
Bernardino Broadcasting Limited Partnership (SBBLP). [Religious
Broadcasting Network]{.underline}, 2 FCC Rcd 6561, 6567 ¶ 60 (ALJ 1987).
The Presiding Judge disqualified SBBLP and, alternatively, held that
SBBLP was not entitled to comparative integration credit. The Review
Board did not reach the issue of SBBLP's basic qualifications, but
affirmed the denial of integration credit. [Religious Broadcasting
Network]{.underline}, 3 FCC Rcd 4085 (Rev. Bd. 1988). The Board held:

> We affirm, [con brio]{.underline}, the ALJ\'s refusal to award
> \"integration\" credit to \[SBBLP\]**;** its application was and
> remains a travesty and a hoax**.** We need not repeat, point-by-point,
> all of the findings of fact which the ALJ has set out to support his
> conclusion that the progenitor and the real-party-in-interest of
> \[SBBLP\] is definitely not Van Osdel, she being merely a fig leaf for
> the true kingpin of \[SBBLP\], one Michael Parker, who currently holds
> an interest in numerous other broadcast permits (I.D., para. 61), and
> who could not in his own identity have hoped to prevail in this very
> close comparative contest.
>
> \* \* \* \*
>
> \[W\]e find no error in the ALJ\'s core conclusion that Van Osdel is
> neither the sole nor dominant management figure purported by
> \[SBBLP\], but a convenient vizard. She can claim no serious or
> material role in SBB\'s most elementary affairs. \[SBBLP\] is a
> transpicuous sham, [compare]{.underline} [Pacific
> Television]{.underline}, [supra]{.underline}, and the ALJ justly
> rejected its attempted fraud.

3 FCC Rcd at 4090 ¶¶ 16, 18. [See]{.underline} ID at ¶¶ 119-20.
Subsequently, the Review Board approved a settlement, under which SBBLP
withdrew its application in return for a payment of \$850,000.
[Religious Broadcasting Network]{.underline}, 5 FCC Rcd 6362 (Rev. Bd.
1990); ID at ¶ 121.

20\. *Mt. Baker Proceeding*. In a second proceeding, Mt. Baker
Broadcasting Company, Inc., an entity controlled by Parker, sought
reinstatement of a construction permit for a new station at Anacortes,
Washington that had been cancelled for failure to construct in a timely
fashion. [Mt. Baker Broadcasting Co., Inc.]{.underline}, 3 FCC Rcd 4777
(1988). Notwithstanding Mt. Baker's asserted good faith efforts to
complete construction on a timely basis, the Commission denied
reinstatement, finding that the facilities that Mt. Baker eventually
constructed were at variance with those authorized. The Commission
rejected Mt. Baker's suggestion that its construction permit could be
reinstated and a forfeiture imposed:

Mt. Baker contends that the imposition of a forfeiture is often the
penalty for unauthorized construction of a broadcast station. \[A\]
forfeiture might be appropriate in some cases where construction differs
by a modest degree from the facilities authorized. The departure in this
case is clearly not modest; for example, operation with 10.3 kW ERP,
compared to 3630 kW authorized. In addition, there are no significant
mitigating circumstances in this case, but there are substantial
aggravating factors. In that regard, improper construction did not occur
through error or inadvertence; the facts clearly indicate an effort to
deceive the Commission**.** A license application would have revealed
what had been built and would, almost certainly, have been denied, but
Mt. Baker did not file one, and the deception was not uncovered until
the Field Operations Bureau inspection.

3 FCC Rcd at 4778 ¶ 8. [See]{.underline} ID at ¶ 122.

21\. *Alleged Misrepresentations and Lack of Candor Concerning These Two
Proceedings*. Thereafter, Parker filed several applications, including
transfer and assignment applications. Question 4 of the version of Forms
314 and 315 in effect at the time, dealing with the
assignee's/transferee's qualifications, asked:

\(a\) Has an adverse finding been made, adverse final action taken or
consent decree approved by any court or administrative body as to the
applicant or any party to the application in any civil or criminal
proceeding brought under the provisions of any law related to the
following: any felony, antitrust, unfair competition, fraud, unfair
labor practices, or discrimination?

\(b\) Is there now pending in any court or administrative body any

proceeding involving any of the matters referred to in 4(a)?

If the answer to (a) or (b) above is Yes, attach as Exhibit No.
\_\_\_\_, a full disclosure concerning the persons and matters involved,
identifying the court or administrative body and the proceeding (by
dates and file numbers), stating the facts upon which the proceeding was
based or the nature of the offense committed, and disposition or current
status, of the matter. Information called for by this question which is
already on file with the Commission need not be refiled provided: (1)
the information is now on file in another application or FCC form filed
by or on behalf of transferee; (2) the information is identified fully
by reference to the file number (if any); the FCC form number and the
filing date of the application or other form containing the information
and the page of paragraph referred to; and (3) after making the
reference, the transferee states, \"No change since date of filing."

Question 7 asked:

Has the applicant or any party to this application had any interest in
or connection with the following:

\(a\) an application which has been dismissed with prejudice by the
Commission?

\(b\) an application which has been denied by the Commission?

\(c\) a broadcast station, the license of which has been revoked?

\(d\) an application in any Commission proceeding which left unresolved
character issues against the applicant

\(e\) If the answer \-\-- is Yes, state in Exhibit No. \--, the
following information

\(i\) name of party,

\(ii\) nature of interest, giving dates,

\(iii\) call letters of station,

\(iv\) location.

22\. Parker gave answers to these questions in six applications filed
between March 2, 1989 and August 3, 1992. In a March 2, 1989 transfer
application for Station KWBB(TV), San Francisco, California, Parker
answered 4(a) and 4(b) "no," 7(a) and 7(b) "yes" and 7(c) and 7(d) "no."
ID at ¶¶ 125-27. The application included a narrative statement relating
to the Mr. Baker proceeding that read as follows:

Micheal L. Parker, Vice President and a director of West Coast, \... is
an officer, director, and shareholder of Mt. Baker Broadcasting Co.,
which was denied an application for extension of time of its
construction permit for KORC(TV), Anacortes, Washington, FCC File No.
BMPCT-8607OIKP. See Memorandum Opinion and Order, FCC 88-234, released
August 5, 1988.[^6]

He did not, however, report the San Bernardino proceeding. Parker gave
identical answers in a December 8, 1989 Form 346 application for a new
low power television station in Los Angeles, California.[^7] ID at ¶
128.

23\. Later, in a July 21, 1991 transfer application for Station WHRC-TV,
Norwell, Massachusetts, Parker answered Question 4 and 7 as he had
before, but included for the first time, a narrative concerning the San
Bernardino proceeding in response to Question 7, which read:

Although neither an applicant nor the holder of an interest in the
applicant to the proceeding, Micheal Parker\'s role as a paid
independent consultant to San Bernardino Broadcasting Limited
Partnership \[\"SBBLP\"\], an applicant in MM Docket No. 83-911 for
authority to construct a new commercial television station on Channel 30
in San Bernardino, CA, was such that the general partner in \[SBBLP\]
was held not to be the real party in interest to that applicant and
that, instead, for purposes of the comparative analysis of \[SBBLP\'s\]
integration and diversification credit, Mr. Parker was deemed such.
[See]{.underline} [Religious Broadcasting Network et. al]{.underline}.,
FCC 88R-38, released July 5, 1988. MM Docket 83-911 was settled in 1990
and Mr. Parker did not receive an interest of any kind in the applicant
awarded the construction permit therein, Sandino Telecasters, Inc.
[See]{.underline} [Religious Broadcasting Network et. al.]{.underline},
FCC 9OR-101, released October 31, 1990.

ID at ¶ 129-30. Parker gave similar answers in the November 13, 1991
assignment application for WTVE(TV), Reading, Pennsylvania, the June 4,
1992 assignment application for Station KTMD(TV), Twenty Nine Palms,
California, and the August 3, 1992 assignment application for AM
International Broadcast Station KCBI, Dallas, Texas. ID at ¶¶ 134-36.

24\. With respect to the Dallas application, the Commission's staff
processing that application requested additional information regarding
whether character issues had been added or requested in the proceedings
specified in Parker's answer to Question 7. ID at ¶ 136. Parker then
submitted an amendment to the application, stating:

Two If By Sea Broadcasting Corporation (\"Two If By Sea\") has applied
for authority to acquire Station KCBI from Criswell Center for Biblical
Studies. As part of that application, Two If By Sea listed applications
in which its officers, directors and principals had held interests and
which were dismissed at the request of the applicant. This will confirm
that no character issues had been added or requested against those
applicants when those applications were dismissed.

However, a character issue ([i.e.]{.underline}, the
real-party-in-interest issue) had been added against the dismissing
applicant, SBBLP, in the San Bernardino proceeding.

25\. *ALJ's Conclusions*. The ALJ faulted Parker's responses for three
reasons.[^8] First, the ALJ found that Parker should have answered "yes"
to Question 4 because the reference to "fraud" in that question was
sufficiently broad to encompass the findings made in the Mt. Baker and
San Bernardino proceedings. ID at ¶ 123. He found that Parker's response
of "no" to Question 4 was false and misleading. ID at ¶¶ 223-25. In
addition, the ALJ found that Parker's amendment to the Dallas
application was false and misleading. ID at ¶ 229. According to the ALJ,
Parker should have reported the Commission's finding in Mt. Baker that
there had been an "effort to deceive" although no issue had been added
in that case. More importantly, a character issue clearly had been added
in the San Bernardino proceeding. Although the ALJ found Parker's
conduct disqualifying, he held that RBI would not be found unqualified
if it severed its relationship with Parker.[^9] ID at ¶¶ 233-35.

26\. [Exceptions]{.underline}. RBI and Parker dispute the ALJ's finding
that Parker committed misconduct. They assert that the ALJ misconstrued
the scope of Question 4, which, they say, refers to non-FCC misconduct.
They also assert that the fact Parker reported the Mt. Baker and San
Bernardino proceedings in response to Question 7 rebuts any inference
that his failure to answer Question 4 in the affirmative was intended to
mislead the Commission. Additionally, they maintain that Parker relied
on the advice of counsel in preparing the Dallas amendment.

27\. Adams supports the ALJ's findings. Moreover, Adams contends that
Parker's misconduct should also disqualify RBI. The Enforcement Bureau
agrees with RBI that Question 4 relates to non-FCC misconduct. The
Bureau, however, agrees with Adams that the Dallas amendment lacked
candor and that if Parker is disqualified, so is RBI.

28\. [Discussion]{.underline}. Although Parker's responses were not
satisfactory in all respects, we find that the ALJ's conclusion that
Parker committed disqualifying misconduct is flawed and not supported by
the record as a whole. We agree with RBI, Parker, and the Bureau that
Question 4 referred to adverse findings by courts and administrative
bodies other than the FCC. The requirements of Question 4 derive from
the determinations in the Commission's policy statements on character as
to what types of misconduct are relevant to an applicant's
qualifications. The policy statements consistently discuss the types of
misconduct listed under Question 4 as "non-FCC" misconduct,
[i.e.]{.underline}, "misconduct which may be a violation of law but does
not specifically contravene the Communications Act or any specific
Commission rule or policy." [Character Qualifications]{.underline}, 102
FCC 2d 1179, 1183 n. 11 (1986). [See]{.underline} [Character
Qualifications]{.underline}, 102 FCC 2d at 1193-1208 ¶¶ 31-52. [See
also]{.underline} [Policy Regarding Character Qualifications in
Broadcast Licensing]{.underline}, 5 FCC Rcd 3252, ¶¶ 3-4 (1990),
[modified]{.underline}, 6 FCC Rcd 3448 (1991). Likewise, the
instructions to the current forms clarify that the question seeks
information regarding non-FCC misconduct:

An assignee must disclose in response to Item 8 \[the current
counterpart to Question 4\] whether it or any party to the application
has been the subject of a final adverse finding with respect to certain
relevant non-broadcast matters.

FCC 314 Instructions, Instructions for Section III --Assignee, Item F
(Apr. 2001). Moreover, the Bureau advocates this interpretation.

29\. Accordingly, we find that Question 4 did not require Parker to
report proceedings before the FCC, and his answer to Question 4 was
therefore appropriate. Moreover, we agree with RBI and Parker that it
would be incongruous to find that Parker lacked candor in failing to
report the Mt. Baker and San Bernardino proceedings in response to
Question 4, when he did report those same proceedings under Question 7
once they were resolved.

30\. We next address whether Parker's response contained in the Dallas
amendment lacked candor. This is a closer question, but we conclude that
the record does not support disqualification. Parker's response to the
staff's question: "This will confirm that no character issues had been
added or requested against those applicants when those applicants were
dismissed" (RBI Exh. 46 , Att. J at J3; Adams Exh. 55 at 3) was
inaccurate in that a real-party-in-interest issue, [i.e.]{.underline},
an issue potentially bearing on character, had been added against SBBLP
in the San Bernardino proceeding.[^10] Moreover, Parker admits that he
reviewed the amendment and was aware that an issue had been added in the
San Bernardino proceeding. Tr. 1991-92. However, Parker explained that
he answered as he did because he believed that the issues in the San
Bernardino proceeding had been resolved favorably to him at the time the
application was dismissed. In short, Parker viewed the thrust of the
staff member's question to be whether [unresolved]{.underline} character
issues had been added. He testified:

> . . . \[M\]y belief was that there weren't any issues that were
> outstanding in 1992 in this case; that it had been resolved. . . . I'm
> simply saying, in 1992, it was clearly my understanding that there
> were no issues pending and that they had been resolved in that case .
> . . in terms of responding to the Commission, I thought I was signing
> an accurate statement. . . . And I believe that . . . there weren't
> any \[character issues\] added or requested at the time \[the
> applications\] were dismissed. . . . \[T\]his sentence deals with when
> \[the application\] was dismissed. \[I\]n terms of an adverse finding
> that would haunt me forever, I did not believe that to be the case,
> and clearly, I believe, that when the \[R\]eview \[B\]oard approved
> the settlement . . . I believed that all adverse rulings had been
> resolved . . . .

Tr. 2027-28, 2030, 2065, 2067, 2070. He further testified that his
response reflected an opinion letter and long discussion with his
communications counsel, Clark Wadlow, as to the significance of the
various rulings in the San Bernardino proceeding. Tr. 2008-09, 2024.

31\. We find that, on balance, the record as a whole does not support
the conclusion that Parker's response was consciously intended to
deceive the Commission. His earlier narrative response to Question 7
([see]{.underline} paragraph 23, [supra]{.underline}) effectively rebuts
the inference that the amendment was intended to conceal from the staff
the existence of the real-party-in-interest issue or the Board's ruling.
On the contrary, the narrative response refers to both the issue and the
Board\' ruling, albeit without further elaboration. In view of the fact
that Parker had already voluntarily put this information before the
Commission, we see no reason to infer that he somehow intended to
conceal this information by not mentioning the real-party-in-interest
issue and the Board's ruling a second time, in response to the staff's
inquiry. In this regard, the record does not indicate that the staff
requested the amendment because it wanted more information than was
already supplied in the narrative. Rather, the parties stipulated that
the staff member involved requested the amendment pursuant to her usual
practice of asking whether character issues had been sought or added, in
all cases where an applicant identified prior FCC applications that had
been dismissed. Bureau Exh. 2 at 2-3 ¶¶ c-e. Parker had no reason to
know that in requesting the amendment the staff had not fully considered
the information that he had already disclosed.

32\. Moreover, the record directly corroborates Parker's contention that
he had no motive to conceal the rulings regarding the
real-party-interest issue, because his counsel had advised him that the
real-party-in-interest issue had been resolved in a manner that did not
reflect adversely on his character. The opinion letter, written a year
and a half before the Dallas amendment was filed, states in its
entirety:

You have asked our opinion on the impact on your qualifications to be a
principal in an FCC licensee of the conclusions on the
real-party-in-interest issue against San Bernardino Broadcasting Limited
Partnership ("SBBLP"), an applicant in the Channel 30, San Bernardino,
California licensing proceeding before the FCC.

As you are aware, we were counsel to a competing applicant in that
proceeding. Since we had (and still have) an attorney-client
relationship with you, we were not directly involved in the trial of
that issue. However, we have reviewed the decision and are generally
familiar with the facts and issues involved.

It is our opinion that the Administrative Law Judge ("ALJ") simply
concluded that SBBLP had failed to report your activities and
involvements with SBBLP -- which the ALJ found to be such as to make you
a real-party-in-interest. However, the ALJ did not find that you had
done anything irmproper \[[sic]{.underline}\] or that anything you had
done reflected adversely on you.

As I mentioned above, we have continued to represent you in other FCC
proceedings, as we have for the last eight or ten years. You serve as a
principal of other FCC licensees. We are aware of no question that has
ever been raised as to your qualifications to hold such a position.

Please do not hesitate to contact me if you need further information on
this subject.

Letter from R. Clark Wadlow to Mr. Micheal L. Parker (Feb. 18, 1991);
RBI Exh. 46, Att. D; Adams Exh. 58. The records of Wadlow's firm
disclose that Parker was billed for a 45 minute teleconference regarding
character issues on February 18, 1991, the day the letter was written.
This is consistent with Parker's testimony that the letter reflects a
long discussion of the matter between himself and Wadlow. Adams Exh. 59.
Wadlow testified at the hearing that, in light of the Board's approval
of a settlement in the San Bernardino proceeding, he believed that no
findings adverse to Parker had been made.[^11] Tr. 1822, 1829, 1854-55.

33\. Although Wadlow's letter did not warrant Parker's statement that no
issue had been added (since one had been),[^12] it tends to rebut the
inference that Parker had a motive to deflect Commission scrutiny from
the real-party-in-interest issue, which Wadlow said did not reflect
adversely on Parker's qualifications. In interpreting the technical
significance of the San Bernardino decision with respect to his
qualifications to be a licensee, Parker could reasonably rely on the
advice of counsel.[^13] [See]{.underline} [Fox Television Stations,
Inc.]{.underline}, 10 FCC Rcd 8452, 8478 ¶ 60, 8500-01 ¶ 119 (1995).
Parker did not have notice that, contrary to Wadlow's advice, the
Commission viewed the San Bernardino proceeding as raising questions
that affected Parker's ability to acquire stations, until five years
later, when the Commission held in the Hartford, Connecticut assignment
proceeding that "Serious character questions also remain regarding the
assignee Parker/TIBS." [Two If By Sea Corp.]{.underline}, 12 FCC Rcd
2254, 2257 (1997). Until the petitioner to deny in the Hartford
proceeding argued that the San Bernardino proceeding raised such
questions, the Commission routinely granted Parker- related
applications, despite the fact that his response to Question 7 included
a reference to the San Bernardino proceeding. Four of these applications
had been granted by the time of the Dallas amendment. We agree with the
Bureau's observation that the Commission's prior actions involving
Parker created a "climate of ambiguity" that could reasonably have led
him (and his counsel) to believe that the issue had been resolved in a
manner that did not affect his qualifications. [See]{.underline}
Bureau's Proposed Findings and Conclusions of Law at 63-64 ¶ 129; Reply
Findings and Conclusions of Law at 9-10 ¶ 18, 14 ¶ 23. We are satisfied
that Parker believed that the staff's question focused on unresolved
character issues and that Parker believed that no such issues remained.

34\. In view of the foregoing, we find there is no reason to believe
that Parker's response resulted from an intent to conceal incriminating
information or that it constitutes a misrepresentation or lack of
candor. The ALJ's misinterpretation of Question 4 and his failure to
give adequate consideration to the factors discussed above undermine the
ALJ's opinions as to Parker's credibility.[^14] Accordingly, we decline
to follow Adams' suggestion that the ALJ's opinions as to Parker's
credibility should be given deference. Therefore, we disagree that
Parker needs to sever his ties with RBI for RBI to remain qualified.

**IV. RBI's RECORD -- COMPLIANCE**

35\. [Initial Decision]{.underline}. The ALJ considered WTVE's
performance for the license term beginning August 1, 1989 and ending
August 1, 1994 to determine whether RBI was entitled to a renewal
expectancy in the comparative analysis. ID at ¶ 47. He evaluated
WTVE(TV)'s performance using five factors derived from the Review
Board's decision in [Fox Television Stations, Inc.]{.underline}, 8 FCC
Rcd 2361, 2366-68 (Rev. Bd. 1993), [recon. denied]{.underline}, 8 FCC
Rcd 3583 (Rev. Bd. 1993), [modified]{.underline}, 9 FCC Rcd 62 (1993),
[aff'd sub nom.]{.underline} [Rainbow Broadcasting, Inc. v.
FCC]{.underline}, 1995 WL 22486 (D.C. Cir. 1995). These five factors
are: (1) the efforts made to ascertain community needs and interests;
(2) the programming response to those needs and interests; (3) the
incumbent\'s reputation in the community for serving the needs and
interests; (4) the record of compliance with the Communications Act and
the Commission\'s rules and policies; (5) evidence of community outreach
in providing a forum for the expression of local views. With respect to
the fourth factor, although the ALJ found RBI qualified to be a
licensee, he held that Parker's misrepresentations and lack of candor
were relevant to whether RBI was entitled to a renewal expectancy in the
comparative analysis. ID at ¶ 110. The ALJ also found that Parker was
responsible for other violations that detracted from RBI's record during
the license term. ID at ¶¶ 203, 246. Specifically, he found that Parker
had effectuated an unauthorized transfer of control of WTVE(TV) and had
failed to disclose to the Commission the facts related to this
occurrence. The ALJ further found that Parker had violated the
Commission's reporting rules in other respects.

36\. The ALJ found that the unauthorized transfer of control was related
to changes in ownership in connection with RBI's Chapter 11 bankruptcy
proceeding. RBI was in bankruptcy from 1986 until March 12, 1992. ID at
¶ 56. RBI's 1988 Ownership Report indicated that RBI had 50,000
outstanding shares of stock divided among 18 stockholders. ID at ¶ 33.
The largest stockholders were Dr. Henry Aurandt and his wife, who held
18,000 shares. In 1989, as part of its effort to resolve its bankruptcy,
RBI entered into a Management Services Agreement (MSA) with Parker, who
was an experienced broadcaster, and his company, Partel, Inc. (Partel).
ID at ¶ 33-34. RBI filed the MSA with the bankruptcy court in 1989, but
did not file the MSA with the Commission until 1997. (The MSA was,
however, mentioned in a pleading filed in 1992. ID at ¶¶ 45, 111.) In
conjunction with the MSA, Parker became president and a director of RBI,
with full authority to conduct the operations of WTVE(TV). ID at ¶
34-35.

37\. Parker led efforts to implement a Chapter 11 reorganization plan.
The reorganization plan approved by the bankruptcy court called for the
cancellation of RBI's existing stock and the issuance of new stock. ID
at ¶ 36. In anticipation of the plan becoming effective, RBI, on August
14, 1991, filed a short form transfer of control application, seeking
Commission approval of the assignment of WTVE(TV) from RBI, as
debtor-in-possession, to RBI. The short form was used because, despite
the issuance of stock to new stockholders, including Partel, it appeared
that RBI's existing stockholders would continue to own more than 50
percent of RBI's stock. The Commission approved the transfer on August
27, 1991, specifying that the transfer must be consummated by October
28, 1991. [Id]{.underline}.; Adams Exh. 22.

38\. As set forth in the August 14 application, Partel, Parker's
company, would own 118,467 of the 399,044 new shares, replacing Aurandt
as the largest single stockholder. ID at ¶ 37. This resulted in a
conflict between Parker and Aurandt over control of RBI. On September
14, 1991, Aurandt called a stockholder's and directors meeting that
purported to terminate the MSA, based on Parker's alleged "malfeasance."
ID at ¶ 38. Parker contested this action, and, on October 15, 1991,
issued new stock, with some variations from the number of shares
reported to the Commission. ID at ¶¶ 38-39. Parker then requested and
received an extension of time from the Commission, until December 27,
1991, to consummate the transfer of control. ID at ¶ 41. On October 30,
1991, Parker convened a meeting of stockholders and directors to elect a
new board of directors and to resolve the dispute with Aurandt. ID at ¶
42.

39\. On November 13, 1991, after the stock had been issued on October
15, RBI filed a long form transfer application indicating that shares in
RBI would increase to 419,038. ID at ¶ 43. The long form application was
intended to supersede the short form, since it appeared that more than
50 percent of RBI's stock ultimately might pass to new stockholders. The
Commission approved the long form transfer on February 14, 1992. The ALJ
found that prior to Commission approval of the long form application
Parker already fully controlled RBI and Parker "knew that to be the
fact." ID at ¶ 43. [See also]{.underline} ID at n.8. (Parker admitted
that, as of October 30, 1991, he had effective voting control of RBI.)

40\. The ALJ found that an unauthorized transfer of control occurred
when in October 1991, control passed to a new group of stockholders
appointed and led by Parker. ID at ¶ 214. The ALJ observed that the
November 13, 1991 transfer application did not reflect that new stock
had already been issued in October and that new directors loyal to
Parker had been elected. Rather, the application erroneously reflected
RBI's old ownership structure and directors. Similarly, ownership
reports in 1992 and 1993 failed to list the new directors. ID at ¶¶
45-46. According to the ALJ, "The Commission was deprived of sufficient
information concerning the corporate control of RBI" during this period.
ID at ¶ 46. The ALJ found that "The ultimate travesty was holding back
from disclosing to the Commission until 1997, the fact and effect of the
MSA." ID at ¶ 215.

41\. Additionally, the ALJ found that RBI had been untimely in reporting
a May 1998 Network Affiliation Agreement with Telemundo. The Telemundo
Agreement was required to be reported because it gave Telemundo an
option to acquire WTVE(TV). ID at ¶¶ 114-17.

42\. [Exceptions]{.underline}. RBI denies that Parker ever improperly
controlled RBI, since he acted with the approval of RBI's stockholders.
RBI maintains that Parker appropriately sought Commission approval for
the changes in ownership related to the reorganization. According to
RBI, the reporting failures were inadvertent and reflected no motive to
deceive the Commission. Additionally, RBI argues that the ALJ should not
have considered the 1998 reporting violation involving the Telemundo
Agreement, since it occurred after the license term in question. Adams
and the Bureau support the initial decision's determination that these
deficiencies reflect adversely on RBI's eligibility for a renewal
expectancy.

43\. [Discussion]{.underline}. We find that the record in this case does
not disclose misconduct that significantly detracts from RBI's record
during the 1989-94 license term. As the preceding section of this
decision indicates, we find that Parker did not lack candor in his
reporting of the Mt. Baker and San Bernardino rulings to the
Commission.[^15] Moreover, we find no basis to conclude that Parker
knowingly effectuated an unauthorized transfer of control of WTVE(TV).
The record reveals no more than that, in a complex and contentious
bankruptcy proceeding, RBI fumbled its reporting obligations.

44\. RBI timely sought and received Commission approval for transferring
control of WTVE(TV). On August 14, 1991, RBI filed a "short form" or
"pro forma" application for the assignment of WTVE(TV) from RBI, as
debtor-in-possession, to RBI. Adams Exh. 21. The use of a short form
application is appropriate in the case of corporate reorganizations that
do not involve a "substantial change" in ownership. 47 C.F.R. §
73.3540(f)(4). [See]{.underline} also 47 U.S.C. § 309(c)(2)(B). The test
for substantiality is generally: (a) whether 50 percent or more of the
stock is being transferred, and (b) whether, as a result of the
transaction, 50 percent or more of the outstanding stock will be held by
a person or persons whose qualifications have not been approved or
passed on in a long form application for the particular station
involved. [See]{.underline} [Barnes Enterprises, Inc.]{.underline}, 55
FCC 2d 721, 725 ¶ 8 (1975). In this case, of the 399,044 shares proposed
to be issued, 56.7 percent would go to existing RBI stockholders.
Partel, a new shareholder, would become the largest single stockholder
with a 29.7 percent interest, while Aurandt's interest would drop from
36 percent to 18.7 percent. Adams Exh. 21. On these facts, the short
form application could arguably be used, although given the degree of
Parker's influence as the single largest stockholder, a long form would
have been preferable.

45\. When Parker issued stock on October 15, 1991, the shares issued
differed from those specified in the application in four respects.
[See]{.underline} Adams Exh. 24. First, 3,960 shares for new stockholder
Meyer Weiner were never issued.[^16] Second, an additional 5,935 shares
were issued to Partel with an option for RBI creditor Meridian Bank to
purchase them for \$1 a share. Parker explained that this had been done
in return for Meridian's forbearance of an overdue payment. Tr. 800-01.
Third, Parker refrained from issuing 50,812 shares to Aurandt. Parker
testified that on July 31, 1991, a federal district court entered a
judgment against Aurandt and, on October 11, 1991, Parker was served
with an order garnishing Aurandt's stock to satisfy the judgment.
Reading Exh. 15; Tr. 888-89, 916. Parker withheld the stock pursuant to
the garnishment order.[^17] Adams Exh. 28 at Exh. 4. Fourth, Parker
issued 17,674 shares to an entity called STV Reading, Inc. (STVR).
Parker explained that STVR, which was owned mainly by Aurandt, was an
RBI creditor that elected to take an equity interest in lieu of partial
repayment of debt.[^18] Tr. 910, 975.

46\. As a result of these differences, of the stock actually issued,
only 47.6 percent remained in the hands of existing stockholders, while
4.8 percent went to STVR. Thus, if STVR is considered a new stockholder,
Parker should have sought long form approval before issuing the stock.
However, since Aurandt owned some 90 percent of STVR, it was reasonable
for Parker not to treat STVR as a new stockholder and to rely on the
Commission's short form authorization in issuing the stock. Moreover,
less than a month later, RBI filed an updated, long-form transfer
application on November 13, 1991, anticipating the possibility that the
ultimate disposition of Aurandt's shares would require such approval.
Adams Exh. 28. Accordingly, even if a long form should have been filed
prior to the issuance of new stock, the record does not warrant a
finding that Parker acted in bad faith in filing a short form.

47\. Additionally, we find no basis to conclude that the failure of the
long form to disclose the prior issuance of stock was the result of a
deliberate deception. When asked whether he felt that he had an
obligation to report the prior issuance of the stock, Parker testified
that:

. . . \[I\]t really made no difference. . . Frankly, I don't think I
thought about it at all. I had FCC counsel dealing with these matters.
And my understanding is that there is no transfer, whether it is
reported or unreported, that the 316 \[short form\] was for the purposes
of coming from debtor in possession to the new corporation. But if you
compared the old ownership to the new ownership, there was no transfer
of control. . . . I don't recall the issue coming up even, [^19] did I
need to disclose to the Commission that we've issued the shares or not.
And I think the representations we made in the 315 \[long form\] for the
transfer demonstrated to the Commission where our problem was.

Tr. 922-23. Although Parker's terminology is somewhat confusing, he
offers a credible explanation for why he did not refer to the prior
issuance of stock in the long form application. As noted above, the
Commission's generally applicable test requires use of a long form
application whenever 50 percent or more of a corporation's stock passes
to "new" stockholders. As discussed previously, Parker's issuance of
stock on October 15, 1991 can be seen as transferring less than 50
percent of RBI's stock to new stockholders. This gave him a basis to
believe that his issuance of stock was legitimately authorized pursuant
to approval of his short form application, and he therefore had no
motive to conceal the issuance of this stock. Parker's subsequent
understanding that future events might potentially result in the
ultimate transfer of more than 50 percent of RBI's stock to new
stockholders gave Parker reason to request long form authority in
anticipation of these events. It did not, however, undermine the basis
on which Parker issued the stock on October 15, which reflected only the
immediate impact of the transfer. As long as Parker obtained long form
authority before the contingencies that might have resulted in a
substantial change of ownership actually occurred, Parker's conduct did
not violate the rules. A full explanation of the intermediate steps
involved in the transfer would have been desirable, but its omission
does not imply that Parker was attempting to conceal improper conduct.

48\. A related matter also involved STVR. Parker admits that at the
shareholder's meeting on October 30, 1991, at which new directors were
elected, he voted the STVR shares pursuant to invalid proxies that he
obtained from STVR's minority owners. Tr. 636, 970, 975-78.[^20] The
invalid proxies, however, did not have a substantial impact on the
control of RBI. The minutes of the October meeting indicate that
Parker's slate of candidates received 249,311 votes, representing 67.7
percent of issued shares, 59.5 percent of authorized shares (including
Aurandt's unissued shares), and over 90 percent of the votes
participating at the meeting. Adams Exh. 30 at 38, 43, 70. We note that
legal proceedings between Parker and Aurandt eventually, in August 1992,
resulted in a settlement agreement stating that:

. . . \[A\]ll parties hereto agree that the Parker Board shall be deemed
the validly elected and duly authorized board of directors as of October
30, 1991, \[and\] that all actions taken by such board shall be deemed
valid acts of the corporation . . . .

Adams Exh. 27. In view of these circumstances, to infer that Parker
intended to conceal the new directors, who Parker contended were validly
elected, is pure speculation. Parker's claim that RBI's failure to
update the listing of its directors in a timely fashion was an oversight
is entirely credible. Tr. 812.

49\. More generally, we find no foundation for the ALJ's finding that:
"Mr. Parker . . . succeeded in snatching control from an unwilling board
of directors." ID at ¶ 216. Parker's actions were consistent with the
reorganization plan confirmed by the bankruptcy court. The record
indicates that the plan was unanimously approved in August 1991 by RBI's
former board of directors, including Aurandt. RBI Exh. 16. The minutes
of a shareholder' meeting on November 7, 1990, shows that Parker urged
the old stockholders to vote for the reorganization plan because their
consent was essential for its approval by the bankruptcy court. Adams
Exh. 13 at 10. [See also]{.underline} 11 U.S.C. §§ 1121-29. As the
settlement discussed in the preceding paragraph indicates, we have no
reason to treat the September 14, 1991 actions instigated by Aurandt as
having any validity.

50\. Finally, we see no basis to find that Parker intentionally
concealed the MSA. Parker testified that he thought the MSA had been
disclosed. Tr. 625-26. Although RBI neglected to file the MSA with the
Commission in a timely manner, the agreement was in effect a public
document that RBI submitted for approval of the bankruptcy court, which
approved the agreement on August 28, 1990, a year before Parker's
supposed "coup." Adams Exh. 14 at 10; 18, 19 at 15; Tr. 626. The
existence of the MSA was disclosed to the Commission when RBI routinely
reported in a February 7, 1992 amendment to the transfer application an
order of the bankruptcy court confirming RBI's plan of reorganization.
Adams Exh. 30 at 8. There has been no showing that the terms of the MSA
provided a motive to conceal it. All of this suggests, as do the
circumstances discussed in the preceding paragraphs, that RBI's
reporting deficiencies reflect its preoccupation with the bankruptcy
proceeding and poor communications between RBI and its counsel, rather
than any intentional misconduct. We will not give these matters
significant weight in assessing RBI's record during the 1989-94 license
term.[^21] However, even if we did, they would simply buttress the
finding made in the next section that RBI's record of performance during
the 1989-94 license term was minimal and does not warrant a renewal
expectancy.

**IV. RBI's RECORD -- OTHER FACTORS**

51\. [Initial Decision.]{.underline} During the 1989-94 license term,
WTVE(TV) carried a "home shopping" format and was an affiliate of the
Home Shopping Network. ID at ¶¶ 52, 54. Because the home shopping format
occupies 53-55 minutes per hour, WTVE(TV)'s non-entertainment
programming was mainly limited to the five to seven minute breaks in
home shopping programming. ID at ¶¶ 60-61. During some time periods,
such as weekends and holidays, non-entertainment programs of more than
15 minutes were aired. Specific short programs were not regularly
scheduled and were not reflected in newspaper television listings.

52\. WTVE(TV)'s financial condition affected its non-entertainment
programming. From the beginning of the license term until March 12,
1992, RBI was in Chapter 11 bankruptcy. ID at ¶ 56. Even after it
emerged from bankruptcy, the station always operated at a loss. ID at ¶
57. The resulting reductions in facilities and staff adversely affected
the station's production of public service programming. ID at ¶ 58-59.
In particular, Parker did not divert funds from profitable operations to
support public service programming and adopted a policy of limiting the
production of public service programming to cut costs.

53\. By RBI's account, the amount of non-entertainment programming
increased during the course of the license term from 2.2 percent in 1989
to 7.6 percent in 1994. Some 35 percent of the programming was in the
form of public service announcements. Adams credits the station with
somewhat less non-entertainment programming. ID at ¶ 48.

54\. Station personnel testified that during the license term, the staff
ascertained community needs by reviewing local newspapers, contacting
members of the community, and receiving materials from various
organizations. The staff also sent questionnaires to community leaders
and schools and conducted interviews. ID at ¶¶ 49-51. However, the
testimony indicated that formal ascertainment did not provide a large
input into station programming and the staff mostly relied on their
informal judgment as to what programming they deemed pertinent to
community needs. ID at ¶ 51.

55\. RBI listed several two to three minute programs, some of which were
produced by the station, as responsive to community needs. ID at ¶¶
62-74. These included: (1) "Streetwise" (interviews on local issues),
(2) "In Touch" (interviews on community topics), (3) "News to You" (from
a satellite feed), (4) "Healthbeat" or "Health Report" (from a news
company, with local wrap arounds), (5) "Elderly Report" (from a news
company, with local wrap arounds), (6) "Community Outreach" (interviews
of local interest), (7) "Take 3" (produced by local youths), (8) "Kids
Korner" (RBI produced program dealing with issues of interest to
children), (9) programming produced by the Pennsylvania State House,
(10) "Informative Moment" (Hispanic-oriented interviews), (11) "For the
People (RBI produced political program), and (12) "Around Our town"
(locally produced community events). Many of these shows were introduced
during the 1992-94 time period.

56\. Other programming included PSAs. During the license term, WTVE(TV)
averaged 30 to 50 PSAs a day. Some were locally produced and some
obtained from various organizations. Two PSAs won awards from the
Pennsylvania Association of Broadcasters. ID at ¶¶ 75-76. During the
latter part of the license term, WTVE also carried a variety of 30
minute children's' programs on weekend mornings. ID at ¶¶ 77-83. Other
long-form programming sometimes included documentaries and specials. ID
at ¶ 84. WTVE(TV) broadcast local weather reports but no local news. ID
at ¶¶ 85-86. WTVE(TV) also carried a variety of religious programs.

57\. At the hearing RBI presented favorable testimony from 16 community
witnesses concerning WTVE(TV)'s programming. ID at ¶¶ 88-103. Adams
presented adverse testimony from five community witnesses, mainly
complaining about the lack of local news. ID at ¶¶ 104-08.

58\. The record also reflects WTVE(TV)'s community outreach activities.
ID at ¶ 109. These included fund raisers, educational programs, and
assistance to local law enforcement authorities. WTVE(TV) also produced
a program for a local hospital, donated space for a local public
television station, and participated in programs opposing drunk driving
and supporting women's careers in broadcasting.

59\. The ALJ found ALJ's programming during the 1989-94 license term
"minimal" and undeserving of a renewal expectancy. ID at ¶¶ 203, 246. He
found that WTVE(TV)'s ascertainment efforts fell short of the "extensive
measures" considered substantial in past cases. ID at ¶ 194. He also
found that WTVE(TV)'s non-entertainment programming was quantitatively
minimal, that it lacked regularly-scheduled news and public affairs
programming, and that it relied excessively on PSA type programming. ID
at ¶¶ 194, 198-99. He found that WTVE(TV)'s community reputation was, at
best, mixed and that the station's outreach programs, while commendable,
were insufficient to overcome its minimal programming performance. ID at
¶¶ 201-02.

60\. [Exceptions]{.underline}. RBI contends that the ALJ understated the
merit of its programming. RBI asserts that its staff made serious
efforts to ascertain community needs and that the amount and type of
programming was substantial considering the constraints of the home
shopping format and WTVE(TV)'s precarious financial condition. It argues
that, in view of deregulation, not every television station in a market
needs to present regularly scheduled news and public affairs
programming. Additionally, RBI contends that the ALJ gave insufficient
weight to the favorable testimony of community witnesses and the
station's community outreach efforts. Adams and the Bureau support the
ALJ's finding that WTVE(TV)'s program performance was minimal.

61\. [Discussion]{.underline}. We agree with the ALJ, the Bureau, and
Adams that WTVE(TV)'s performance during the 1989-94 license terms was
minimal and not deserving of a renewal expectancy. We have already
considered the fourth of the ALJ's five factors in the preceding section
discussing compliance with the Act and the Commission's rules. We now
consider the remaining factors.

62\. We generally agree with the ALJ that WTVE(TV)'s ascertainment
efforts were unexceptional. This factor, however, has little probative
value. The Commission long ago determined that requiring adherence to
specific ascertainment procedures did not serve the public interest.
[See]{.underline} [Deregulation of Radio]{.underline}, 84 FCC 2d 968,
993 ¶ 56 (1981). The Commission stated: "To the extent that parties may
wish to raise questions concerning \[ascertainment\] efforts, such
questions should be directed to the realities of the program proposal of
the applicants, or the responsiveness of licensees, rather than to the
ritual of ascertainment." [Id]{.underline}. We will therefore turn to
WTVE(TV)'s programming and not dwell on the specifics of WTVE(TV)'s
ascertainment procedures.

63\. During the 1989-94 license terms, WTVE(TV) carried little
non-entertainment programming. For most of the term, the station carried
no regularly scheduled news. Adams Exh. 2 at 3. RBI's own data indicates
that it carried an average of 3.35 percent total non-entertainment
programming and 2.15 percent locally-produced programming.[^22] By
contrast, in [Video 44]{.underline}, 5 FCC Rcd 6383, 6383 ¶ 6, 6385 ¶ 18
(1990), [recon. denied]{.underline}, 6 FCC Rcd 4948 (1991), the
Commission characterized as "substantial" the record of an independent
UHF television that station that averaged a much higher 0.92 percent
news, 16.54 percent total non-entertainment programming and 4.37 percent
local programming. Even after the station in [Video 44]{.underline}
engaged in a "wholesale abandonment" of public service programming, it
still carried 4-5 percent non-entertainment programming, an amount
higher than the 3.35 percent average for WTVE(TV).

64\. Additionally, WTVE(TV) relied heavily on PSAs in responding to
ascertained needs. During the license term, by our calculation, an
average of 60.53 percent of WTVE(TV)'s non-entertainment programming was
in the form of PSAs.[^23] Although we believe that PSAs can be an
effective means of meeting community needs, we have admonished licensees
not to rely on PSAs as the primary method of responding to ascertained
needs. [Public Service Announcements]{.underline}, 81 FCC 2d 346, 368-69
¶ 47 (1980).

65\. The fact that WTVE(TV) utilized a home shopping format does not
warrant a different conclusion. In finding that home shopping stations
could adequately address the needs and interests of the community, the
Commission determined that home shopping stations would have to comply
with the same rules as other television broadcast stations.
[Implementation of Section 4(g) of the Cable Television Consumer
Protection and Competition Act of 1992]{.underline}, 8 FCC Rcd 5321,
5327 ¶ 31 (1993). Moreover, in approving the home shopping format, the
Commission specifically cited data indicating that the home shopping
format was compatible with the presentation of a substantial quantity of
public service programming. For example, the Commission noted with
approval the assurances of a large home shopping broadcaster. The
broadcaster indicated that its stations significantly exceeded the
guidelines that the Commission formerly applied to identify stations
warranting review because of minimal performance, [i.e.]{.underline},
five percent news and public affairs programming, five percent local
programming, and 10 percent total non-entertainment programming.
[Id]{.underline}. at 5327 ¶ 30. The broadcaster represented that its
stations averaged 7.6 percent news and public affairs programming, 7.6
percent local programming, and 10.2 percent total non-entertainment
programming. Accordingly, WTVE(TV) did not measure up to the factual
expectations that supported the Commission's favorable conclusions
regarding the home shopping format.

66\. Aside from its quantitative deficiencies, WTVE(TV)'s programming
generally appears to have been responsive to local needs and interests,
if not to an exceptional degree. The station's non-entertainment
programs were presented throughout the day, but their extremely short
duration, typically three minutes or less, reduced their impact. The
station appears to have enjoyed a generally favorable impression in the
community, but some witnesses noted the absence of news coverage.
[Compare]{.underline} ID at ¶¶ 88-103 [with]{.underline} ¶¶ 104-08.
WTVE(TV)'s community outreach activities, while meritorious, have little
significance. A station's entitlement to a renewal expectancy depends
primarily on it record of programming and compliance. Activities
unrelated to programming have lesser relevance. [See]{.underline}
[Policies and Rules Concerning Children's Television
Programming]{.underline}, 6 FCC Rcd 2111, 2115 ¶ 28 (1991).

67\. To some extent, WTVE(TV)'s, unimpressive record simply reflects its
poor financial condition during the 1989-94 license term. As noted
previously, the station was in bankruptcy until early 1992. The record
indicates that the station was never profitable. RBI Exh.5 indicates
that the station consistently suffered losses during the license term,
ranging from \$443,575 in 1989 to \$29,999 in 1994. WTVE(TV)'s improving
financial picture corresponded to a rise in the amount of public service
programming. During the license term, the amount of non-entertainment
programming rose from 2.20 percent in the third quarter of 1989 to 7.55
percent in the second quarter of 1994.[^24] Similarly, the amount of
locally-produced programming rose from 1.64 percent in the third quarter
of 1989 to 5.16 percent in the second quarter of 1994.[^25] Financial
shortcomings cannot, however, fully mitigate inadequate programming.
[See]{.underline} [Simon Geller]{.underline}, 102 FCC 2d 1443, 1447 ¶ 10
(1985). In sum, WTVE(TV)'s quantitative deficiencies and overuse of PSAs
are decisive in establishing a minimal broadcast record, notwithstanding
the station's home shopping format and poor financial condition. RBI
will not receive a renewal expectancy to be factored into the
comparative analysis that follows.

**V. COMPARATIVE FACTORS**

68\. [Initial Decision]{.underline}. Having determined that RBI was not
entitled to a renewal expectancy, the ALJ considered the other factors
relevant to the comparison between RBI and Adams: local residence and
civic involvement, broadcast experience, comparative coverage, and
diversification of ownership. ID at ¶ 248.

69\. The ALJ awarded RBI "marginal" or "slight" credit for local
residence and civic involvement. ID at ¶¶ 219, 251. He found that 27 of
RBI's stockholders lived in WTVE(TV)'s service area and that three had
significant civic involvement. ID at ¶¶ 25-27. Adams principals had no
local residence or civic involvement. ID at ¶ 24. The ALJ diminished
RBI's preference under this factor because of WTVE(TV)'s poor broadcast
record. ID at ¶ 219.

70\. The ALJ found that two RBI shareholders had broadcast experience
and that none of Adam's principals had any. ID at ¶¶ 24, 28-31. The ALJ,
however, awarded RBI no credit for this factor.

71\. The ALJ awarded Adams a "slight credit" for comparative coverage.
ID at ¶ 250.[^26] WTVE(TV) currently serves 3,119,889 persons, whereas
Adams proposes to serve 4,260,920, 37 percent more. ID at ¶ 21. All of
these persons receive at least six other television signals. ID at ¶ 20.
The ALJ noted that in 1990 RBI received a construction permit that would
allow it to use new facilities that would increase its coverage to 75
percent more than Adams'. ID at ¶ 22. The ALJ did not, however, credit
RBI with the coverage of this unconstructed facility. He found that RBI
had not obtained a waiver of the Commission policy requiring
construction within three years of the grant. ID at ¶ 22. He also found
that RBI had not shown a reasonable likelihood that it would be able to
construct on its new site, since RBI has been embroiled in a zoning
dispute with local authorities. ID at ¶ 23.

72\. The ALJ also awarded Adams a "slight merit" for diversification. ID
at ¶ 249.[^27] He found that the only one of Adams' principals with an
existing media interest had pledged to divest this interest if Adams'
application is granted. ID at ¶ 13. He found that Parker, RBI's largest
single stockholder, owned Two If By Sea Broadcasting Corporation, the
licensee of Station KVMD(TV), Twenty Nine Palms, California, an
international AM station in Dallas, Texas, and an FM translator station
in Upland, California, and the former proposed assignee of Station
WHCT(TV), Hartford Connecticut.[^28] ID at ¶ 17; RBI Exh. 4. The ALJ
gave greatest weight to the two television stations. ID at ¶¶ 217, 249.

73\. Overall, the ALJ concluded that Adams preferences for
diversification and comparative coverage outweighed RBI's advantages for
local residence and civic involvement, which were discounted because of
WTVE(TV)'s unmeritorious programming. ID at ¶ 252.

74\. [Exceptions]{.underline}. RBI asserts that it is comparatively
superior to Adams. RBI faults the ALJ for not giving it credit for the
coverage of the transmitter site covered by the construction permit. RBI
also asserts that its advantages for local residence, civic involvement,
and broadcast experience are entitled to greater weight, especially in
comparison to Adams' slight diversification advantage. Adams supports
the analysis of the initial decision on these points.

75\. [Discussion]{.underline}. We find that the ALJ understated RBI's
comparative preferences. As an initial matter, we reject Adams'
contention that the Court of Appeal's opinion in [Bechtel v.
FCC]{.underline}, 10 F.3d 875 (D.C. Cir. 1993), mandates that we not
give weight to factors such as local residence, civic activities, and
broadcast experience. [Bechtel]{.underline} held that the Commission's
former practice of giving comparative weight to the proposed integration
of ownership into management was arbitrary and capricious and that the
factor was therefore invalid. Under the Commission's former practice,
the factors of local residence, civic activities, and broadcast
experience were treated as qualitative enhancements of integration.
Adams suggests that the invalidity of integration as a criterion implies
the invalidity of the three qualitative enhancements as well.

76\. The Commission has already considered the implications of
[Bechtel.]{.underline} We held that it would be pointless to attempt to
devise an entirely new set of comparative factors for the small number
of remaining comparative renewal cases, of which this case is the last.
[Implementation of Section 309(j) of the Communications
Act]{.underline}, 13 FCC Rcd 15920, 16005-06 ¶¶ 212-14 (1998). Instead,
we invited parties to these cases to present whatever evidence they
deemed appropriate and indicated that we would attempt to decide cases
as nearly as possible pursuant to pre- [Bechtel]{.underline} standards.
We continue to believe that this is the fairest, most expeditious way to
address this case. Moreover, we do not read the court's decision in
[Bechtel v. FCC]{.underline} as criticizing the continued use of local
residence or broadcast experience as criteria. In striking down the
Commission's practice of awarding frequently decisive credit for
quantitative integration, the court observed disapprovingly: "An
applicant whose proposed owner-manager knows nothing about either
broadcasting or the community \[who proposes to be integrated
full-time\] will handily win an integration preference over one whose
proposed owner-manager is a veteran broadcaster who has spent his whole
life in the station's community \[but who proposes to be integrated
part-time\]." 10 F.3d at 882. For these reasons, we do not believe that
[Bechtel]{.underline} precludes an award of credit for local residence
and broadcast experience under these circumstances.

77\. Turning to the facts of this case, we find that the ALJ understated
the credit due RBI for local residence, civic activities, and broadcast
experience. RBI Exh. 2 indicates that 35 of RBI's 50 stockholders[^29]
live within WTVE(TV)'s service area, including Reading and its suburbs.
The ALJ denied RBI credit for eight of these stockholders, because they
were not stockholders during the 1989-94 license term. ID at ¶ 25. This
was an error. Unlike the renewal expectancy analysis, which focuses on
the licensee's performance during the relevant license term, factors
such as local residence are based on the applicants' proposals as of the
appropriate cutoff date established for the proceeding, in this case
April 30, 1999. [See]{.underline} [Public Notice]{.underline}, Rep. No.
24457A (Mar. 26, 1999). Until the cutoff date, the parties are free to
upgrade their proposals. We therefore credit RBI with the claimed local
residence of 35 stockholders.

78\. Similarly, the ALJ denied RBI credit for eight of 11 stockholders
listed as having records of civic activities because RBI did not
indicate either that these individuals were stockholders during 1989-94
or that their civic activities occurred during those years. ID at n.4.
For the reasons discussed above, this was error and RBI is entitled to
credit for all 11 stockholders.[^30]

79\. The ALJ also denied RBI credit for one of three of its principals
with broadcast experience, because he was not a stockholder during the
license term. ID at ¶ 32. Again for the reasons discussed above, RBI is
entitled to credit for this individual. Moreover, although the ALJ made
findings concerning the broadcast experience of its principals, he did
not include this factor in his overall comparative analysis. ID at ¶¶
219, 252. We will give weight to this factor.

80\. More significantly, the ALJ "substantially discounted" RBI's credit
for all of these factors based on WTVE(TV)'s minimal past broadcast
record. ID at ¶¶ 219, 252. The Court of Appeals, however, disapproved
this line of analysis in [Committee for Community Access v.
FCC]{.underline}, 737 F.2d 74, 79-82 (D.C. Cir. 1984). In that case, the
Commission diminished a renewal applicant's credit for diversification
and integration based on the applicant's insubstantial past record. The
court faulted the Commission for ignoring its customary treatment of
integration and diversification as predictive of public interest
benefits in favor of a "functional analysis" that ignored the renewal
applicant's advantages under these criteria. The ALJ here adopted the
same invalid analysis. In view of the foregoing, and the fact that Adams
claims no credit for local residence, civic activities, or broadcast
experience, RBI is entitled to a substantial preference for these
factors.

81\. Recent events have complicated the resolution of the comparative
coverage issue. The ALJ credited Adams with 33 percent (by our
computation 37 percent) greater coverage that Adams' proposed site would
provide as compared with RBI's current site. ID at ¶ 21. Because all of
the areas that are, or would be served, by the respective proposals
receive at least six other television signals (ID at ¶ 20), the ALJ
awarded only a slight preference to Adams.

82\. The ALJ declined to award RBI credit for the coverage of unbuilt
facilities covered by a construction permit issued to RBI in 1990, which
would give RBI 73 percent greater coverage than Adams' proposal. ID at
¶¶ 22-23; RBI Exh. 48. The ALJ observed that RBI has been embroiled in
litigation with Earl Township, in which the site is located, over a
zoning dispute and that the original term of the construction permit had
expired. [See also]{.underline} RBI Exh. 12, Tab B (request for
automatic extension of the construction permit); Adams Exh. 41
(stipulated facts [Earl Township v. Reading Broadcasting,
Inc.]{.underline}). Consequently, he found that RBI had not shown
reasonable assurance that the site would be available.

83\. On April 30, 2001, RBI submitted a Section 1.65 Statement reporting
that the Commonwealth Court of Pennsylvania had upheld an injunction
against construction of RBI's proposed tower. RBI also submitted an
amendment to the construction permit substituting a modification of
RBI's current transmitter site for the disputed proposed site. The
amended construction permit would give RBI 29 percent more coverage than
Adams.

84\. We will not attempt to resolve the ambiguous status of RBI's
construction permit at this time. The slight preference that the ALJ
awarded Adams as compared with RBI's current facilities should not be
dispositive of this case. The new areas to be served by Adams already
receive an abundance of television signals. The addition of one more
should not decide this case unless the comparison is otherwise
essentially deadlocked. As discussed below, we do not find that to be
the case.

85\. The key issue then is the relative weight due RBI's advantages for
local residence, civic activities, and broadcast experience, and Adam's
advantage for diversification, resulting from Parker's ownership of
distant television interests. As RBI points out, this case resembles
cases such as [Pueblo Radio Broadcasting Service]{.underline}, 5 FCC Rcd
4829, 4832 ¶ 17 (Rev. Bd. 1990) and [Richard P. Bott, II]{.underline}, 4
FCC Rcd 4924, 4930 ¶ 27 (Rev. Bd. 1989), in which similar advantages
outweighed smaller diversification preferences. We believe that the same
result is warranted here. We give weight to local residence and civic
activities because it indicates "knowledge of and interest in the
welfare of the Community." [Policy Statement on Comparative Broadcast
Hearings]{.underline}, 1 FCC 2d 393, 396 (1965). In this case, there is
a clear difference between the applicants: RBI is a predominantly local
entity with broadcast experience; Adams is not. In comparison, the
impact of Parker's interests on the diversification of media ownership
"generally in the United States"[^31] has little significance.

**VI. SUMMARY**

86\. In view of the foregoing, we will reverse the initial decision,
grant RBI's renewal application, and deny Adams' application for a
construction permit. The record in this case does not support a
conclusion that either Adams or RBI's Parker committed disqualifying
misconduct. RBI's record in operating WTVE(TV) during the 1989-94
license term was minimal and RBI is not entitled to a renewal expectancy
in the comparative evaluation of its application against Adams'.
Nevertheless, RBI's local involvement and broadcast experience are
entitled to the most weight in this case, giving it a clear advantage
over Adams.

**VII. PROCEDURAL MATTER**

87\. RBI complains that the ALJ exceeded his authority in ordering, in a
Protective Order, RBI to reimburse Telemundo in the amount of \$6,804
for expenses Telemundo incurred in responding to an RBI subpoena.
[Reading Broadcasting, Inc.]{.underline}, FCC 00M-48 (Jul. 18, 2000). We
agree. In ordering RBI to pay Telemundo's expenses, the ALJ relied on 47
C.F.R. § 1.313, which authorizes protective orders relating to discovery
and provides that: "The \[ALJ's\] ruling . . . may specify any measures
. . . to protect any party or deponent from annoyance, expense,
embarrassment or oppression." The Commission, however, does not
interpret this section as authorizing the reimbursement of expenses. The
ALJ cited no other authority to support his order for RBI to pay
Telemundo's expenses.[^32] Without such authority, the order was
improper, and we will vacate it.

**VII. ORDERING CLAUSES**

88\. ACCORDINGLY, IT IS ORDERED, that the Protective Order of
Administrative Law Judge Richard L. Sippel, FCC 00M-48 (Jul. 18, 2000)
IS VACATED.

89\. IT IS FURTHER ORDERED, That Reading Broadcasting, Inc.'s Exceptions
to Initial Decision of Administrative Law Judge Richard Sippel, filed
May 21, 2001 ARE GRANTED, and the Brief in Support of Initial Decision
and Contingent Exceptions of Adams Communications Corporation, filed May
21, 2001, ARE DENIED.

90\. IT IS FURTHER ORDERED, That the Initial Decision of Administrative
law Judge Richard L. Sippel, FCC 01D-01 (ALJ Apr. 5, 2001) IS MODIFIED
to the extent indicated above.

91\. IT IS FURTHER ORDERED, That the application of Reading
Broadcasting, Inc. for renewal of its license to operate Station
WTVE(TV), Reading, Pennsylvania (FILE NO. BRCT-940407KF) IS GRANTED and
the application of Adams Communications Corporation for a construction
permit (File No. BPCT-940630KG) IS DENIED.

92\. IT IS FURTHER ORDERED, That the Letter from Gene A. Bechtel and
Harry Cole to Christopher Wright, General Counsel (Nov. 24, 1999) IS
DISMISSED as moot.

93\. IT IS FURTHER ORDERED, That this proceeding IS TERMINATED.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

**APPENDIX**

**Quantity (in minutes per quarter) of various types of
non-entertainment programming presented on WTVE(TV) during the 1989-94
license term. Figures derived from RBI Exh. 8, App. A.**

![](media/image1.wmf){width="5.545138888888889in" height="3.61875in"}

![](media/image2.wmf){width="5.425in" height="3.790277777777778in"} .

[^1]: Before the Commission are: (1) Reading Broadcasting, Inc.'s
    Exceptions to Initial Decision of Administrative Law Judge Richard
    Sippel, filed May 21, 2001, and reply, filed May 31, 2001, by Adams;
    (2) Brief in Support of Initial Decision and Contingent Exceptions
    of Adams Communications Corporation, filed May 21, 2001, and a reply
    filed May 31, 2001, by RBI; and (3) a consolidated reply, filed May
    31, 2001, by the Enforcement Bureau. By Order, FCC 01-251 (Sept. 13,
    2001), we accepted the Consolidated Exceptions and Brief of Micheal
    L. Parker to the Initial Decision of Administrative Law Judge
    Richard L. Sippel, filed May 21, 2001, as an amicus brief; RBI and
    Adams filed replies on September 24, 2001.

[^2]: The term "abuse of process" can generally be defined as the use of
    a Commission process, procedure, or rule to achieve a result which
    that process, procedure, or rule was not designed or intended to
    achieve, or, alternatively, use of such process, procedure, or rule
    in a manner which subverts the underlying purpose of that process,
    procedure, or rule. [See]{.underline} [Formulation of Policies and
    Rules Relating to Broadcast Renewal Applicants]{.underline}, 4 FCC
    Rcd 4780, 4793 n. 3 (1989).

[^3]: At the time RBI raised allegations of abuse of process against
    Adams, Adams filed a letter with the Office of General Counsel
    asking that office to take appropriate action. Letter from Gene A.
    Bechtel and Harry Cole to Christopher Wright, General Counsel (Nov.
    24, 1999). In light of our action herein, we will dismiss the letter
    as moot.

[^4]: [Millar v. FCC]{.underline}, 707 F.2d 1530 (D.C. Cir. 1530), cited
    by RBI, affirmed Commission policy that was subsequently clarified
    by [Radio Carollton]{.underline}.

[^5]: At one point, Gilbert testified: "This isn't a great place to be,
    Reading." Tr. 1119.

[^6]: He also noted that a petition for reconsideration of the Mt. Baker
    ruling was pending at the time.

[^7]: The wording of Question 4 on Form 346 differed from that on the
    assignment and transfer applications in that it referred to "fraud
    before another governmental unit." ID at ¶ 124. In view of this
    wording, the ALJ found that Parker could legitimately answer
    Question 4 in the negative on Form 346.

[^8]: The ALJ termed Parker's failure to mention the San Bernardino
    proceeding in the San Francisco and Los Angeles applications as
    "negligent." ID at ¶ 227. The ALJ, however, found no lack of candor
    in this regard. He found that Parker's narrative responses were
    "incomplete" but not "willfully misleading." ID at ¶ 226.

[^9]: In response to the ALJ's findings, RBI submitted a "Section 1.65
    Statement" on May 21, 2001, indicating that Parker had resigned as
    president and director of RBI, that his stock interests had been
    placed in a voting trust or otherwise transferred, and that a
    management agreement between Parker and RBI had been terminated.

[^10]: No character issue had been added or requested in the Mt. Baker
    proceeding.

[^11]: [But see]{.underline} [Allegan County Broadcasters,
    Inc.]{.underline}, 83 FCC 2d 371 (1980), which permits the
    reimbursement of a dismissing applicant despite unresolved issues
    concerning the applicant's character.

[^12]: Both Wadlow and attorney Eric S. Kravetz, who drafted the
    amendment, testified that they would not have stated that no issue
    had been added. Tr. 1813, 2372-73. Wadlow further testified that he
    was aware that a character issue had been added in the San
    Bernardino proceeding, but that he believed the final settlement
    constituted a resolution of the character issue that did not reflect
    adversely on Parker. Tr. 1822. Parker testified that it was this
    understanding that made him believe that any character issue had
    been dismissed, so that his amendment was correct. Tr. 2065.

[^13]: Moreover, Wadlow's advice was not unreasonable on its face. As
    the Commission subsequently held, a finding that a person is a
    real-party-in-interest does not necessarily reflect adversely on
    that person's character. [See]{.underline} [Evansville Skywave,
    Inc.]{.underline}, 7 FCC Rcd 1699, ¶¶ 13-14 (1992) (an applicant's
    failure to demonstrate that its ownership structure will be
    effectuated as described does not, without more, raise a question of
    egregious misconduct).

[^14]: In particular, the ALJ had no basis for finding that certain
    testimony by Parker (Tr. 2652), in which Parker disagreed with the
    ALJ's characterization of his previous testimony, showed an "added
    lack of candor." ID at ¶ 231.

[^15]: The amendment to the Dallas application, which contained the
    inaccurate statement, was not filed on behalf of RBI and is
    therefore irrelevant to RBI's record of compliance.

[^16]: Weiner apparently withdrew as a stockholder.

[^17]: Absent a finding that Parker's action was not an appropriate
    response to the garnishment order, we find no basis for the ALJ's
    apparent disapproval of Parker's "power" to withhold stock from
    Aurandt. ID at ¶ 40.

[^18]: In view of Parker's unrebutted testimony that Aurandt elected to
    have stock issued to STVR, we see no basis for the ALJ to find that
    Parker "caused the issuance" of shares to STVR. ID at ¶ 40.

[^19]: Like the the transfer application, transmittal letters from RBI's
    communications counsel to the Commission dated January 29, 1992
    (Adams Exh. 29) and February 7, 1992 (Adams Exh. 30) speak of the
    stock issuance in prospective terms, suggesting that counsel was
    unaware that the stock had been issued.

[^20]: He also used the invalid proxy at a shareholders meeting on
    February 4, 1992 that ratified the results of the previous meeting.
    Adams Exh. 13 at 74-121.

[^21]: RBI's alleged failure to timely report the 1998 Telemundo Network
    Affiliation Agreement occurred after the close of the 1989-94
    license term and will therefore not be considered. Likewise, Adams'
    allegation that RBI failed to report, after the close of the license
    term, the involvement in RBI's affairs of Thomas Root, an individual
    found to have committed misconduct, is of no consequence.

[^22]: [See]{.underline} Appendix. These figures were derived from RBI
    Exh. 8, App. A, which lists the number of minutes per quarter of
    various types of non-entertainment programming during the 1989-94
    license term. Supporting data for the first two quarters of 1990 was
    unavailable. The data presented in RBI Exh. 8, App. A is somewhat at
    variance with the data presented in RBI Exh. 8, App. B, which
    compiles data based on "composite weeks."

[^23]: [See]{.underline} Appendix. For purposes of its exhibit, RBI
    classified presentations of less than two minutes as PSAs and
    programs of two minutes or more as programs. Tr. 392-93. The data
    presented in RBI Exh. 8, App. B indicates a somewhat lower
    percentage.

[^24]: [See]{.underline} Appendix.

[^25]: [See]{.underline} Appendix.

[^26]: The ALJ originally characterized this as a "very slight
    preference." ID at ¶ 218.

[^27]: The ALJ originally characterized this as a "significant
    preference." ID at ¶ 217.

[^28]: After the close of the record in this case, the Hartford license
    was awarded to a third party pursuant to a settlement. ID at n2.

[^29]: As indicated by the ownership report dated March 31, 1999,
    incorporated in RBI Exh. 11.

[^30]: The ALJ also faulted RBI for not indicating that the civic
    activities occurred within WTVE(TV)'s service area. The descriptions
    for 10 of the eleven stockholders contained in RBI Exh. 2, however,
    indicate communities within WTVE(TV)'s service area. The remaining
    stockholder, David Mann, lived in a suburb of Reading itself, making
    it appropriate to conclude that his activities occurred within the
    service area.

[^31]: [Policy Statement on Comparative Broadcast Hearings]{.underline},
    1 FCC 2d at 394 (indicating that distant interests are entitled to
    the least weight in the diversification analysis).

[^32]: [Compare]{.underline} Fed. R. Civ. Proc. Rule 45(c)(1), which
    authorizes District Courts to "impose upon the party or attorney
    \[causing undue burden or expense\] . . . an appropriate sanction,
    which may include, but is not limited to, lost earnings and
    reasonable attorneys fee."