Cumulus Licensing LLC Star Broadcasting, Inc.

c/o Lewis J. Paper, Esq. c/o Timothy K. Brady, Esq.

Andrew S. Kersting, Esq. Law Offices of Timothy K. Brady

Dickstein Shapiro Morin & Oshinsky P.O. Box 71309

2101 L Street, N.W. Newnan, GA 30271-1309

Washington, D.C. 20037

Qantum of Ft. Walton Beach License Company, LLC

c/o John M. Pelkey, Esq.

Garvey Schubert Barer

1000 Potomac Street, N.W.

Flour Mill Building, 5^th^ Floor

Washington, D.C. 20007-3501

Re: WNCV(FM), Niceville, FL

Facility ID No. 10055

File No. BALH-20050502ACB

WYZB(FM), Mary Esther, FL

Facility ID No. 27469

File No. BALH-20050502ACC

WPGG(FM), Evergreen, AL

Facility ID No. 73395

File No. BALH-20050503AAW

WTKE(FM), Holt, FL

Facility ID No. 56374

File No. BALH-20050504AAO

Applications for Assignment of Licenses

Dear Counsel:

We have before us the above-captioned applications (the "Assignment
Applications") proposing to: (1) assign the licenses of stations
WNCV(FM), Niceville, Florida, and WYZB(FM), Mary Esther, Florida, from
Cumulus Licensing LLC ("Cumulus") to Star Broadcasting, Inc. ("Star");
and (2) assign the licenses of WPGG(FM), Evergreen, Alabama, and
WTKE(FM), Holt, Florida, from Star to Cumulus. We also have before us a
Petition to Deny ("Petition"), filed June 6, 2005, by Qantum of Ft.
Walton Beach License Company, LLC ("Qantum" or "Petitioner"[^1]), and a
one-page letter opposing the transaction, filed November 21, 2005, by
Media Access Project ("MAP").[^2] For the reasons stated below, we deny
the Petition and Objection, and grant the Assignment Applications,
subject to modifications of the agreements between Cumulus and Star.

**Background**

On February 14, 2003, the Commission granted an application to assign
the license for WTKE(FM) from Capstar TX Limited Partnership ("Capstar")
to Star,[^3] and subsequently, on May 27, 2004, granted an application
to assign the license for WTKE(FM) from Star to Qantum Communications
Corporation ("Qantum Corp.").[^4] Pursuant to the Capstar-Star
agreement, consummation of the initial assignment of WTKE(FM) from
Capstar to Star was contingent upon Commission approval of an
application to assign the license of WQYZ(FM), Ocean Springs,
Mississippi, from Golden Gulf Coast Broadcasting, Inc. to Capstar. As of
April 14, 2005, the WQYZ(FM) assignment application remained pending
before the Commission,[^5] and Star notified Qantum Corp. on that date
that it was terminating the parties' WTKE(FM) Asset Purchase
Agreement.[^6] Subsequently, on April 18, 2005, Star entered into an
Asset Exchange Agreement with Cumulus, whereby Cumulus would loan
\$850,000 to Star to enable Star to complete the purchase of WTKE(FM)
from Capstar,[^7] and Star would then sell WTKE(FM) to Cumulus in
exchange for Cumulus's station WYZB(FM) plus \$1,500,000. The parties
filed the subject applications seeking Commission consent to (1) assign
the license for WYZB(FM) from Cumulus to Star, and (2) assign the
license for WTKE(FM) from Star to Cumulus, on May 2, 2005, and May 4,
2005, respectively.

On April 13, 2004, the Commission granted an application to assign the
license for WPGG(FM) from Gulf Coast Broadcasting Co., Inc. ("Gulf
Coast") to Star.[^8] Due to financial difficulties, Star was unable to
consummate the assignment until a year later, when Cumulus loaned
\$1,500,000 to Star. The transaction closed shortly thereafter, on April
18, 2005. On the same date, Cumulus and Star also executed a separate
Asset Exchange Agreement (collectively, with the WTKE(FM)-WYZB(FM) Asset
Exchange Agreement, the "Agreements") whereby Star would assign WPGG(FM)
to Cumulus in exchange for Cumulus's station WNCV(FM) plus \$1,500,000.
The parties filed the subject applications seeking Commission consent to
(1) assign the license for WNCV(FM) from Cumulus to Star, and (2) assign
the license for WPGG(FM) from Star to Cumulus, on May 2, 2005, and May
3, 2005, respectively.

Qantum objects to the grant of the Assignment Applications on four
grounds. First, invoking the Commission's equity-debt-plus ("EDP")
attribution rule,[^9] Qantum alleges that Cumulus currently holds a
prohibited attributable interest in one too many same-service (FM)
stations in Arbitron's Ft. Walton Beach Metro Survey Area (the "Ft.
Walton Beach Metro") and is thus "unfit to assign its present licenses
or to be the assignee of the Star licenses."[^10] Second, Qantum asserts
that grant of the Assignment Applications would result in Cumulus having
an undue concentration of market power in the Ft. Walton Beach Metro.
Third, Qantum contends that Cumulus has guaranteed its market dominance
through contractual rights for itself and restrictions for Star that
will "ensur\[e\] that Star and others cannot effectively compete with
Cumulus" in the Metro.[^11] Finally, Qantum states that Cumulus used
loans to Star to induce Star to breach its agreement with Qantum for the
sale of WTKE(FM). MAP objects to grant of the Assignment Applications,
averring that the transactions are "egregiously anti-competitive" and
contrary to the public interest.

**Discussion**

***Prohibited Attributable Interest.*** Qantum's allegation that Cumulus
is already in violation of the Commission's local radio ownership rule
is premised on: (1) Cumulus's \$1.5 million loan to Star for the
purchase of WPGG(FM), which, according to Qantum, causes Cumulus to
"hold more than 33% of the total debt plus equity in Star and thus hold
an attributable interest in the station";[^12] and (2) the Commission's
reallocation of WPGG(FM) from Evergreen, Alabama, to Shalimar,
Florida,[^13] a community located within the Ft. Walton Beach Metro,
where Cumulus is currently the licensee of four FM stations and one AM
station.[^14] Cumulus counters that: (1) its \$1.5 million loan to Star
"represents less than 33 percent of the value of WPGG"[^15] and is thus
a non-attributable interest; and (2) WPGG(FM) is still licensed to and
operating in Evergreen, Alabama, and accordingly, should not be
considered part of the Ft. Walton Beach Metro.

For purposes of determining compliance with the numerical limits of the
local radio ownership rule, the Commission decided in its *Ownership
Order*[^16] to "count as being in an Arbitron Metro above-the-line
stations (i.e., stations that are listed as 'home' to that Metro) as
determined by BIA."[^17] The Commission will also count "any other
licensed full power commercial or noncommercial radio station whose
community of license is located within the Metro's geographic
boundary."[^18] BIA does not currently list WPGG(FM) as home to the Ft.
Walton Beach Metro or any other Arbitron Metro market. On March 25,
2005, the Commission approved the request to change WPGG(FM)'s community
of license from Evergreen, Alabama, to Shalimar, Florida.[^19]
Subsequently, on May 13, 2005, Star filed a minor modification
application for a construction permit to implement the community of
license change. Star's minor modification application, however, remains
pending before the Commission;[^20] WPGG(FM) is still operating in
Evergreen, Alabama. In fact, Qantum concedes that its Ft. Walton Beach
stations *do not* currently compete with WPGG(FM), but rather "*will
compete* with WPGG(FM) once that station's abandonment of Evergreen and
its relocation to Ft. Walton Beach is complete."[^21]

Because WPGG(FM) is neither currently listed by BIA as home to the Ft.
Walton Beach Metro, nor yet operating in a community located within the
Metro's geographic boundary, we do not count WPGG(FM) as part of this
Metro. Accordingly, we need not resolve the issue of whether Cumulus's
loan to Star caused Cumulus to obtain an attributable interest in
WPGG(FM) under the EDP rule, because even if such an interest were
attributable, as Qantum alleges, Cumulus would remain in compliance with
the Commission's local radio ownership rule.[^22] We thus reject
Qantum's first argument.

***Undue Market Concentration.*** Under the local radio ownership rule
now in effect,[^23] the Ft. Walton Beach Metro is the relevant
geographic market for evaluating compliance with the numerical limits
set forth in Section 73.3555(a) of the Commission's rules with respect
to stations WTKE(FM), WNCV(FM), and WYZB(FM).[^24] When it adopted its
bright-line, geography-based radio rule for rated markets, the
Commission concluded that "\[b\]y applying the numerical limits of the
local radio ownership rule to a more rational market definition, we
believe that, *in virtually all cases*, the rule will protect against
excessive concentration levels in local radio markets that might
otherwise threaten the public interest."[^25]

Qantum asserts that this is an extraordinary case in which the current
rules will not protect against excessive concentration levels.
Specifically, Qantum alleges that Cumulus currently controls 70 percent
of the radio advertising revenue in the Ft. Walton Beach Metro.
According to Qantum, upon consummation of the subject transactions, in
which Cumulus is trading two lower power stations for two higher power
stations,[^26] Cumulus will "nearly double the number of people, and
nearly triple the geographic area" served by its stations and thus
"further solidify \[its\] monopoly position" in the Ft. Walton Beach
Metro.[^27] Cumulus counters that the Assignment Applications fully
comply with the Commission's local radio ownership rule and that
Qantum's allegations are premised on nothing more than supposition and
speculation.[^28]

We are bound to give a "hard look" to petitions that allege that a
particular transaction is not in the public interest, notwithstanding
compliance with the new rule.[^29] The petitioner, however, faces a high
hurdle and must present specific allegations of fact sufficient to show
that a grant of the application would be *prima facie* inconsistent with
the public interest, and a substantial and material question is
presented to be determined by the Commission."[^30] We find that
Qantum's challenge ultimately fails under this standard and that
departure from the rule is unwarranted in this case. Qantum relies, in
large part, on advertising revenue shares in asserting its competition
concerns. The Commission, however, has concluded that ad revenue share
is of "decreasing relevance . . . as a barometer of competition"[^31]
and explicitly rejected arguments that it incorporate a market share
analysis into the local ownership rule.[^32] Moreover, even were we to
attempt to conduct such an analysis here, Qantum has failed to proffer
sufficient economic data to substantiate its claim of competitive harm.
For example, Qantum does not explain how it derives its 70 percent
revenue share figure for Cumulus, and otherwise provides no data to
support this figure.[^33] Further, Qantum's market concentration
allegations are based on an assumption that WPGG(FM), a station for
which no revenue estimates are reported by BIA, is part of the Ft.
Walton Beach Metro. As discussed above, we do not count WPGG(FM) as part
of this Metro.

Qantum further premises its competition concerns on the disparity
between the technical facilities of the subject stations. Specifically,
Qantum asserts that as a result of the station swaps, Cumulus will own
four of the most powerful stations in the Ft. Walton Beach Metro, thus
"leaving Cumulus's competitors to scrounge for market share with lesser
facilities"[^34] and making it "next to impossible for viable
competition to develop in the market."[^35] We find Qantum's speculative
prediction of an anti-competitive environment unpersuasive. Upon
consummation of the Assignment Applications, Cumulus will own two Class
C1 stations and one Class C2 station in the Ft. Walton Beach Metro. To
reiterate, we do not count WPGG(FM), a Class C2 station, as part of the
Metro. Even assuming *arguendo* that WPGG(FM) will ultimately operate in
this Metro, we are still unpersuaded by Cumulus's allegations. Other
stations with comparable or superior facilities will continue to compete
against Cumulus.[^36] Moreover, the Ft. Walton Beach Metro consists of
only Okaloosa County, a geographically small county along the coast of
Florida.[^37] As the Commission recognized in the *Ownership Order*,
"technically weaker stations may, of course, be strong competitors in
their markets, depending on a variety of factors such as format choice,
population coverage, and quality of programming."[^38] Accordingly, even
smaller stations can potentially cover a significant area of this small
Metro, thus serving a substantial portion of the population, and
effectively compete with the higher powered stations in the Metro.

Furthermore, we emphasize that our ultimate obligation is to consider
the potential benefits and harms of the transactions on the listening
public. As the Commission observed in the *Ownership Order*,
"\[p\]reserving competition for listeners is of paramount concern" in
our public interest analysis.[^39] The Commission stated that the
numerical limits approach is designed to promote competition by assuring
that a sufficient number of rivals are actively engaged in competition
for listening audiences.[^40] Grant of the Assignment Applications will
not alter the number of competitors in the Ft. Walton Beach Metro.
According to BIA data, six station owners currently compete in the
Metro, and six owners will remain in the Metro post-transaction.

In light of the above, we are unpersuaded that application of the new
radio ownership rule is inadequate to protect against competitive harm
in this case. We therefore analyze these transactions by applying the
numerical limits of Section 73.3555(a), using the Ft. Walton Beach Metro
as the relevant geographic market for stations WTKE(FM), WYZB(FM), and
WNCV(FM), and using the interim contour-overlap methodology for station
WPGG(FM). BIA reports 17 commercial and noncommercial educational radio
stations as home to the Ft. Walton Beach Metro. Cumulus currently owns
five stations in the Metro: WKSM(FM), WZNS(FM), WYZB(FM), WNCV(FM), and
WFTW(AM). Through its acquisition of WTKE(FM), and concurrent assignment
of WYZB(FM) and WNCV(FM) to Star, Cumulus would own one AM and three FM
stations in the Metro, which complies with the local radio ownership
rule.[^41] As already indicated above,[^42] Cumulus's acquisition of
WPGG(FM) also would comply with the rule. Further, if and when WPGG(FM)
implements its approved relocation to Shalimar, Florida and becomes a
part of the Ft. Walton Beach Metro, such that Cumulus would own one AM
and four FM stations in the Metro, Cumulus would remain in compliance
with the local radio ownership rule.

***"Anti-Competitive" Contractual Provisions.*** Qantum rests its third
argument on contract provisions that: (1) grant Cumulus an exclusive
option to acquire another station from Star \-- WBAU(AM), Ft. Walton
Beach, Florida; (2) grant Cumulus a 10-year right of first refusal with
respect to the two Cumulus stations now being sold to Star; (3) prohibit
Star and any successor-in-interest from instituting an adult
contemporary or country program format on WNCV(FM) or WYZB(FM) for a
period of five years; (4) allow Cumulus to obtain voting control over
Star in the event of Star's default on the loan repayment; and (5)
allegedly prohibit Star from acquiring any other stations until its
loans from Cumulus are re-paid.[^43] While we find no evidence on the
record to sustain Qantum's assertion that these provisions will "act as
real, practical barriers to competition,"[^44] we find, as explained
below, that three of the provisions are nevertheless contrary to
Commission rules and policies and must be modified prior to closing.

[Option and Right of First Refusal.]{.underline} Qantum argues Cumulus
can, and likely will, exercise its option and right of first refusal to
prevent any effective competitor from acquiring WBAU(AM), WNCV(FM), and
WYZB(FM) in the event Star opts to sell any of these stations. Cumulus,
in turn, asserts that these provisions are entirely consistent with
Commission policy and that Qantum's anti-competitive concerns are
premised on nothing more than speculation. We agree in part: we find
nothing untoward in the provision that grants Cumulus an option to
acquire WBAU(AM). We have frequently approved similar provisions, and
Qantum's speculative anti-competitive allegations have not convinced us
to reverse course here.[^45] If Cumulus exercises the option, the
parties will be required to obtain approval from the Commission. Qantum
can raise anti-competitive concerns at that time. We find, however, that
Cumulus's right of first refusal to re-acquire WNCV(FM) or WYZB(FM)
violates Section 73.1150 of the Commission's rules, which provides that
the assignor of a broadcast station license "may retain . . . no right
to reassignment of the license in the future."[^46] Accordingly, we
require the parties to delete the right of first refusal clause before
closing.

[Format Restriction]{.underline}. Section 12.17 of the Agreements
prohibits Star and any successor-in-interest from instituting an adult
contemporary or country program format, or any similar or derivative
format, on WNCV(FM) or WYZB(FM) for a period of five years. Qantum
asserts that this format restriction deprives Star of a fundamental
licensee right, permits Cumulus to exercise unauthorized control over
the stations, and ensures that Cumulus will not be subject to format
competition. Cumulus argues that the format restriction clause is
consistent with Commission policy, and moreover, will not preclude any
of the other stations in the market from maintaining or introducing
formats competitive with Cumulus stations. Neither Qantum nor Cumulus
cites to Commission precedent to support its arguments.

Although the Commission does not scrutinize or regulate programming
formats and does not consider programming format when making its
licensing decisions,[^47] it looks to whether the new licensee will
retain control and mandate the basic policies with respect to the
station's programming.[^48] The ultimate responsibility for selecting
programming material and establishing programming policies lies with the
licensee, and we have held this responsibility cannot be "unduly
fettered by contractual arrangements restricting the licensee in his
free exercise of his independent judgments."[^49]

We find that the Agreements' clause restricting Star from instituting
certain formats on WNCV(FM) and WYZB(FM) improperly infringes on Star's
programming responsibilities. As the new licensee of the stations, Star
must retain the flexibility to address the needs and interests of its
local communities, to react to changing audience tastes and preferences,
to respond to other competitors in the market, and to select its
programming accordingly.[^50] While Star ultimately may decide, at its
discretion, not to implement an adult contemporary or country format on
the stations, a contract barring the use of such formats, even for a
limited period, is impermissible. Accordingly, we require the parties to
delete the format restriction clause before closing.[^51]

[Stock Pledge Agreement.]{.underline} Qantum further asserts that the
parties' Stock Pledge Agreement gives Cumulus the right to influence
strongly, if not control, the future of Star and its stations.
Specifically, the Stock Pledge Agreement provides that Cumulus may, in
the event Star defaults on its Cumulus loans, vote all or any part of
Star's voting stock, or assign or transfer all or any part of that
voting stock into its own name.[^52] A controlling percentage of a
licensee's stock may be pledged as security for a loan if: (1) the
licensee/borrower retains voting rights in the stock, and thus control
of the station, even in the event of default; and (2) in the event of
default, the pledged stock is sold, subject to Commission approval, in a
manner, such as a public auction, that does not restrict the sale to the
lender.[^53] Such arrangements provide financial security for lenders
without jeopardizing the independence of the licensee.[^54] Because the
parties' Stock Pledge Agreement does not adhere to these restrictions,
we find it is inconsistent with Commission rules and policies. We
require the parties to revise the Stock Pledge Agreement accordingly
before closing.

***Star/Qantum Contractual Dispute.*** Finally, Qantum contends that
Star breached its agreement with Qantum for the sale of WTKE(FM), while
Star denies the alleged contract breach. We will not reach the merits of
this contractual dispute. The Commission has long held that it is not
the proper forum for the resolution of private contractual disputes and
that any redress should be sought in a local court of competent
jurisdiction.[^55] The alleged breach is already the subject of a
specific performance suit initially filed in a Florida District Court.
On August 9, 2005, the United States District Court for the Southern
District of Florida issued a preliminary injunction enjoining Star from,
*inter alia*, consummating the transaction contemplated in any agreement
with Cumulus or conveying the WTKE(FM) assets to any third party.[^56]
While the Court's preliminary injunction currently precludes Star and
Cumulus from closing the WTKE(FM) transaction, it does not forestall our
consideration of the Assignment Applications nor enjoin us from acting
on the applications.[^57] We emphasize, however, that our decision to
grant the Assignment Applications merely finds that the parties are
qualified under, and the proposed transactions do not violate, the
Communications Act of 1934, as amended, and the Commission's rules and
policies. As such, it is permissive only and does not prejudice the
outcome of the court proceeding and any relief to which the parties are
entitled under the civil suit.

**Conclusion**

Based on the evidence presented in the record, we find that neither
Qantum nor MAP has raised a substantial and material question of fact
warranting further inquiry. We further find that both Star and Cumulus
are qualified as assignees and that grant of the Assignment Applications
is consistent with the public interest, convenience, and necessity.
Accordingly, IT IS ORDERED, That the applications to (1) assign the
licenses of stations WNCV(FM), Niceville, Florida (File No.
BALH-20050502ACB) and WYZB(FM), Mary Esther, Florida (File No.
BALH-20050502ACC) from Cumulus Licensing LLC to Star Broadcasting, Inc.
and (2) assign the licenses of stations WPGG(FM), Evergreen, Alabama
(BALH-20050503AAW) and WTKE(FM), Holt, Florida (File No.
BALH-20050504AAO), from Star Broadcasting, Inc. to Cumulus Licensing
LLC, ARE GRANTED, subject to the modifications of the agreements between
Cumulus and Star as described above. These modifications must be made
prior to consummation of the assignments of licenses and are to be
reflected in all final agreements between the parties. Copies of the
agreements as modified shall be served on Peter H. Doyle, Chief, Audio
Division, Media Bureau, within 30 days of the date of this letter. IT IS
FURTHER ORDERED, That the June 6, 2005, Petition to Deny filed by Qantum
of Ft. Walton Beach License Company, LLC IS DENIED. Finally, IT IS
ORDERED That the letter filed November 21, 2005, by Media Access
Project, when treated as an Informal Objection, IS DENIED.

Sincerely,

Peter H. Doyle

> Chief, Audio Division
>
> Media Bureau

cc: Andrew Jay Schwartzman, Esq.

David E. Bailey, Jr.

[^1]: Qantum is the licensee of three stations in the Ft. Walton Beach
    vicinity: WFFY(FM), Destin, Florida; WMXZ(FM), Valparaiso, Florida;
    and WWAV(FM), Santa Rosa Beach, Florida.

[^2]: Cumulus and Star each filed an Opposition to the Petition on June
    21, 2005, to which Qantum filed a Reply on July 1, 2005. On August
    17, 2005, Qantum submitted a Supplement to its Reply, and on August
    19, 2005, Cumulus filed a Supplement to its Opposition. We consider
    herein all such pleadings in order to resolve this proceeding on the
    basis of a complete record. Petitions to deny the applications to
    assign WNCV(FM) and WYZB(FM) to Star were due by June 6, 2005, and
    petitions to deny the applications to assign WTKE(FM) and WPGG(FM)
    to Cumulus were due by June 13, 2005. The MAP letter, filed November
    21, 2005, fails to meet the requirements of a petition to deny. We
    will, however, treat the letter as an informal objection
    ("Objection"), pursuant to 47 C.F.R. § 73.3587.

[^3]: *See* BALH-20021224ACX.

[^4]: *See* BALH-20030922AFA. Qantum Corp. is the parent company of
    Petitioner.

[^5]: *See* BALH-20031125ALX (granted May 26, 2005).

[^6]: Section 17.1(g) of the Star-Qantum Asset Purchase Agreement
    ("Agreement") states, in relevant part, that the Agreement may be
    terminated "by written notice of either party to the other if the
    closing shall not have been consummated on or before the date
    eighteen months after the date of this Agreement, and the party
    seeking to terminate the Agreement is not then in breach of this
    Agreement." The 18-month deadline was March 5, 2005. *See*
    BALH-20030922AFA at Exh. 4.

[^7]: The assignment of WTKE(FM) from Capstar to Star was consummated
    July 5, 2005.

[^8]: *See* BALH-20031105AAA.

[^9]: The Commission's EDP attribution rule, 47 C.F.R. § 73.3555, Note
    2(i), provides, in relevant part, that a party's interest in a
    broadcast licensee is attributable if its equity and debt interests
    in the licensee "exceed 33 percent of the total asset value . . ."
    and the party "also holds an interest in a broadcast licensee . . .
    operating in the same market . . . ."

[^10]: Qantum Petition at 2.

[^11]: *Id.* at ii.

[^12]: *Id.* at 9; *see also supra* note 9.

[^13]: *See* *Evergreen, Alabama and Shalimar, Florida*, Report and
    Order, 20 FCC Rcd 6300 (March 25, 2005) ("*Shalimar Order*").

[^14]: According to BIA data made publicly available on January 3, 2006,
    there are 17 stations "home" to the Ft. Walton Beach Metro. Pursuant
    to Section 73.3555(a)(1)(iii) of the Commission's Rules, in a radio
    market with between 15 and 29 full-power commercial and
    noncommercial radio stations, one owner may hold up to six
    commercial stations, no more than four of which are in the same
    service. *See* 47 C.F.R. § 73.3555(a)(1)(iii).

[^15]: Cumulus Opposition at 14.

[^16]: *See 2002 Biennial Regulatory Review -- Review of the
    Commission's Broadcast Ownership Rules and Other Rules*, 18 FCC Rcd
    13620 (2003) ("*Ownership Order*"), *aff'd in part and remanded in
    part*, *Prometheus Radio Project, et al. v. F.C.C.*, 373 F.3d 372
    (2004), *cert. denied*, 125 S. Ct. 2902, 2903, 2904 (2005).  *See
    also Prometheus Radio Project, et al. v. F.C.C*., No. 03-3388 (3d
    Cir. Sept. 3, 2004) (lifting stay with respect to new local radio
    ownership rule).

[^17]: *Ownership Order*, 18 FCC Rcd at 13727.

[^18]: *Id.*

[^19]: *See Shalimar Order, supra* note 13. Qantum's May 10, 2005,
    Petition for Reconsideration of the *Shalimar Order* was recently
    denied. *See* *Evergreen, Alabama and Shalimar, Florida*, Memorandum
    Opinion and Order, DA 06-382 (February 24, 2006).

[^20]: *See* BPH-20050513ACW (accepted for filing June 3, 2005). On July
    6, 2005, Qantum filed an informal objection to the WPGG(FM) minor
    modification application.

[^21]: Qantum Petition at 1, n.2 (emphasis added).

[^22]: *See infra* note 24 and accompanying text.

[^23]: *See Ownership Order*, 18 FCC Rcd at 13724-37.

[^24]: 47 C.F.R. § 73.3555(a). Because, as noted above, WPGG(FM) is not
    currently in an Arbitron-rated market, we apply the interim
    contour-overlap methodology to determine whether Cumulus's proposed
    acquisition of WPGG(FM) complies with our local radio ownership
    rule, and find that it so complies. Under the contour-overlap
    methodology, the relevant radio market is defined by the area
    encompassed by the mutually overlapping principal community contours
    of the stations proposed to be commonly owned. *See Ownership
    Order*, 18 FCC Rcd at 13729-13730. Staff analysis confirms that
    there is no contour overlap between WPGG(FM) and any licensed
    station attributable to Cumulus. *See* BALH-20050503AAW at Exh. 15.
    The principal community contour of WPGG(FM) does overlap the
    principal community contour proposed in the pending application to
    relocate Cumulus station WLWI-FM, Montgomery, Alabama. However, even
    assuming the Commission grants the WLWI-FM modification application,
    Cumulus's common control of WPGG(FM) and the modified WLWI-FM would
    still comply with the local radio ownership rule under the interim
    contour-overlap methodology. *See* 47 C.F.R. § 73.3555(a)(1)(iv)
    (providing that in a local radio market with 14 or fewer stations, a
    single owner may own up to five commercial stations, no more than
    three of which are in the same service, except that the party may
    not own more than 50% of the stations in such market).

[^25]: *Ownership Order*, 18 FCC Rcd at 13813 (emphasis added).

[^26]: Cumulus is selling WYZB(FM), a Class C3 station, and WNCV(FM), a
    Class A station, to Star. Star, in turn, is selling WTKE(FM), a
    Class C1 station, and WPGG(FM), a Class C2 station, to Cumulus.

[^27]: Qantum Petition at ii, iii. MAP asserts that the Assignment
    Applications represent "one of the most egregiously anticompetitive
    transactions which \[it\] has ever encountered." MAP, however, does
    not provide any support whatsoever for this bold and bald statement.
    It merely refers the Commission to Qantum's Petition. We therefore
    find MAP's Objection to have no merit.

[^28]: Cumulus states that there is no evidence that its acquisition of
    WTKE(FM) and WPGG(FM), which is not yet even operating in the Ft.
    Walton Beach Metro, will increase its advertising revenue share in
    that Metro. Moreover, Cumulus contends, market shares are an
    ever-fluctuating, unreliable barometer of competition. *See* Cumulus
    Opposition at i.

[^29]: *See Ownership Order*, 18 FCC Rcd at 13647 (explaining that
    although "\[w\]e are confident that the modified rules will reduce
    the chances of precluding transactions that are in the public
    interest or, alternatively, permitting transactions that are not in
    the public interest . . . we are obligated to give a hard look both
    to waiver requests . . . as well as petitions to deny.").

[^30]: *Id.* at 13647, n.131 (citing 47 U.S.C. § 309(d) and case
    precedent (case citations omitted)).

[^31]: *Id.* at 13642.

[^32]: *Id.* at 13736-37.

[^33]: The most recent publicly available advertising revenue estimates
    from BIA show that Cumulus's market share will decline from 64.1%
    pre-transaction to 43.2% post-transaction. BIA's 43.2% estimate does
    not speculate on possible changes in WTKE(FM)'s revenue due to the
    station's recent facility upgrade, nor does it include any revenue
    for WPGG(FM), which is not yet operating in the Metro.

[^34]: Qantum Petition at ii.

[^35]: *Id.* at 13.

[^36]: For example, Carter Broadcasting, Inc. owns a Class C1 station in
    the Metro while Qantum is the licensee of two Class C2 facilities.

[^37]: The total area of Okaloosa County is 2,802 square kilometers, and
    13.5 percent of the area is water. The county has a population of
    181,460 people, according to 2004 U.S. Census Bureau estimates.
    *See* [www.co.okaloosa.fl.us](http://www.co.okaloosa.fl.us/);
    [www.census.gov](http://www.census.gov/).

[^38]: *Ownership Order*, 18 FCC Rcd at 13732.

[^39]: *Id.* at 13716. *See also id.* at 13641.

[^40]: *See id.* at 13716.

[^41]: *See* 47 C.F.R. § 73.3555(a)(1)(iii) (in a radio market with
    between 15 and 29 full-power, commercial and noncommercial radio
    stations, one owner may hold up to six commercial stations, no more
    than four of which are in the same service). Upon consummation of
    the Assignment Applications, Star would own one AM and two FM
    stations in the Metro, which also complies with the local radio
    ownership rule.

[^42]: *See* *supra* note 24.

[^43]: This allegation, as Cumulus explains, is based on Qantum's
    misreading of the language in the Agreements. The Agreements do not
    prevent Star from acquiring additional stations. In fact, subsequent
    to the execution of the Agreements, Star acquired additional
    stations. *See, e.g.,* BAL-20050425ACK (consummated July 22, 2005).
    We therefore find this allegation does not merit further
    consideration.

[^44]: Qantum Reply at ii.

[^45]: The option does not compel the conclusion that Cumulus will
    control Star or have the ability to exert improper influence. Our
    rules make it clear that a mere option to acquire does not convey
    control. *See* 47 C.F.R. §73.3555, Note 2(e); *see also* *Manahawkin
    Communications*, 17 FCC Rcd 342 (2001) (standing alone, an
    unexercised option does not represent a relinquishment of control).

[^46]: 47 C.F.R. § 73.1150. *See also Radio KDAN, Inc.,* 11 F.C.C.2d 934
    (1968), *recon. denied*, 13 R.R.2d 100 (1968), *aff'd sub nom., W.H.
    Hansen v. FCC*, 413 F.2d 374 (D.C. Cir. 1969).

[^47]: *See, e.g., FCC v. WNCN Listeners Guild*, 450 U.S. 582, 595
    (1981) ("Commission has provided a rational explanation for its
    conclusion that reliance on the market is the best method of
    promoting diversity in entertainment formats.").

[^48]: *See, e.g., Stereo Broadcasters, Inc.*, 55 F.C.C.2d 87 (1981*),
    recon. denied*, 50 R.R.2d 1346 (1982); *WHDH, Inc.*, 17 F.C.C.2d 856
    (1969), *aff'd sub nom.*, *Greater Boston Television Corp. v. FCC*,
    444 F.2d 841 (D.C. Cir. 1970), *cert. denied*, 403 U.S. 923 (1971).
    *See also* FCC Form 314, Worksheet #2, Question 3 (explaining that a
    sales contract must provide the assignee with ultimate control over
    station programming, without reservation, in order to comply fully
    with the Commission's rules and policies). Although a licensee may
    delegate certain functions on a day-to-day basis, ultimate
    responsibility for essential station operations, such as personnel,
    programming, and finances, is non-delegable. *See, e.g, WGPR, Inc.,*
    10 FCC Rcd 8140, 8145 (1995); *Southwest Texas Public Broadcasting
    Council*, 85 F.C.C.2d 713, 715 (1981).

[^49]: *Report on Editorializing*, 13 F.C.C.2d 1246, 1248 (1949). *See
    also Cosmopolitan Broadcasting Corp.*, 59 F.C.C.2d 558, 561 (1976),
    *recon. denied*, 61 F.C.C.2d 257 (1976) (non-renewal of license for
    abdicating control over programming to time broker).

[^50]: *See, e.g., National Ass'n for Better Broadcasting*, 55 F.C.C.2d
    800 (1975) ("this duty \[for programming decisions\] cannot be
    delegated and a licensee cannot, even unilaterally, foreclose its
    discretion and continuous responsibility to determine the public
    interest and operate in accordance with that determination.").

[^51]: *See, e.g., CFM Communications, LLC*, 20 FCC Rcd 9738 (MB May 24,
    2005) (requiring parties to modify contract provision that obligated
    new station owner to fill 85% of its broadcast time with paid or
    bartered programming), *grant rescinded on other grounds*, 20 FCC
    Rcd 10824 (MB June 20, 2005); *Twin States Broadcasting, Inc*., 42
    F.C.C.2d 1091 (1973) (disapproving initial agreement that required
    assignee to change to a progressive rock format under certain market
    conditions).

[^52]: *See* Sections 1 and 7 of Stock Pledge Agreement, attached at
    Exh. 4 to BALH-20050502ACB.

[^53]: *See Minority Ownership in Broadcasting*, 99 F.C.C.2d 1249, 1254
    (1985) ("*Minority Ownership*"); *see also* FCC Form 314, Worksheet
    #2, Question 5 (explaining that in order to certify that a stock
    pledge agreement complies fully with the Commission's rules and
    policies, the agreement must "expressly state that voting rights
    will remain with the assignee, even in the event of default . . .
    \[and\] indicate that, in the event of default, there will be either
    a public or private arm's length sale of the pledged interests . . .
    ."). The lender may secure an interest in the proceeds of the sale
    of the stock or station license. *See, e.g., Beach Television
    Partners*, 38 F.3d 535 (11^th^ Cir. 1994); *Cheskey*, 9 FCC Rcd 986
    (1994).

[^54]: *Minority Ownership*, 99 F.C.C.2d at 1254*.*

[^55]: *See, e.g., Listeners' Guild, Inc. v. FCC*, 813 F.2d 465, 469
    (D.C. Cir. 1987) (endorsing "the Commission's longstanding policy of
    refusing to adjudicate private contract law questions"); *John F.
    Runner, Receiver (KBIF)*, 36 R.R.2d 773, 778 (1976) (local court of
    competent jurisidiction, not the FCC, is the proper forum to resolve
    private disputes).

[^56]: *See Qantum Communications Corporation v. Star Broadcasting, Inc.
    and Ronald E. Hale, Sr.*, Case No. 05-21772-CIV-Martinez-Bandstra.
    The District Court has not resolved the substantive merits of the
    litigation. On November 10, 2005, Star filed a voluntary petition
    under Chapter 11 of the Bankruptcy Code in the United States
    Bankruptcy Court, Northern District of Florida, Pensacola Division,
    Case No. 05-35012-WSS. Accordingly, the Qantum-Star case has been
    removed from the District Court in Miami and is now pending before
    the Bankruptcy Court in Pensacola. *See* *Letter from David E.
    Bailey, Jr., Counsel for Star, to Andrew Jay Schwartzman,
    President/CEO of MAP* (December 1, 2005) (sent in response to MAP
    Objection and served on Donna C. Gregg, Chief, Media Bureau). On
    November 21, 2005, Star filed applications for the involuntary
    assignment of its station licenses for WBAU(AM), WTKE(FM), WIJK(FM),
    and WPGG(FM) to Star Broadcasting, Inc., Debtor-in-Possession. *See*
    BAL/BALH-20051121AOC-AOF. The Commission granted the applications on
    January 11, 2006, but the assignments have not yet been consummated.

[^57]: The Commission has routinely acted favorably on applications
    pending resolution of private contractual disputes. *See, e.g.,
    Decatur Telecasting, Inc.*, 7 FCC Rcd 8622 (1992).