**DA 08-1891**

*In Reply Refer to:*

1800B3-RDH

Released: August 12, 2008

Stephen Diaz Gavin, Esq.

Janet Fitzpatrick Moran, Esq.

Carly T. Didden, Esq.

Patton Boggs LLP

2550 M Street, N.W.

Washington, DC 20037-1350

In re: WWHK(FM) (Formerly WOTX-FM)

Concord, New Hampshire

Facility Id No. 8683

Capitol Broadcasting Corporation, Inc.

File No. BTCH-20050105ACS

> **Request for Temporary Waiver and/or Stay**

Dear Counsel:

We have before us an April 30, 2008, "Request for Temporary Waiver
and/or Stay" ("Request") filed on behalf of Nassau Broadcasting I, LLC
("Nassau"). The Request seeks a temporary waiver of the Commission's
attribution rule for in-market Joint Sales Agreements ("JSA") or, in the
alternative, a temporary stay of Section 73.3555 Note 2(k)(1) ("Note 2")
until the final disposition of Nassau's pending Application for Review
of the Media Bureau's March 31, 2008, decision dismissing the referenced
application (the "Application").[^1] For the reasons set forth below, we
deny the Request for both waiver and stay.

**Background.** On January 5, 2005, the parties filed the Application,
which sought Commission approval for transfer of control of Capitol
Broadcasting Corporation ("Capitol"), licensee of Station WWHK(FM),
Concord, New Hampshire (the "Station"), from Concord Broadcasting, LLC,
("Concord"), the 100 percent shareholder of Capitol, to Nassau. In the
Application, Nassau and Concord claimed that, after the transaction,
Nassau would own four stations in the Manchester, New Hampshire, Metro
market ("Manchester Metro"). Included in the Application was a JSA
between Nassau and Capitol, executed on July 16, 2004, pursuant to which
Nassau would sell advertising on WWHK(FM), manage the station's traffic
and billing functions, and receive all revenue from the sale of
advertising on the station.[^2] In September of 2004, Arbitron announced
the creation of the new Concord, New Hampshire, Metro market ("Concord
Metro"). On January 26, 2005 -- before the staff had finished its
evaluation of the transfer application and before the statutory petition
to deny period had run, WWHK(FM) was first reported as "home" to the
Concord Metro.[^3] Utilizing the most recent data available in analyzing
the application, the staff determined that only one of Nassau's four
stations would be in the Manchester Metro, while the remaining three
would be in the newly created Concord Metro. Because Nassau already owns
five stations in the 26-station Concord Metro, consummation of the
proposed transaction would result in Nassau holding seven FM stations
and one AM station in the Concord Metro. This would exceed the
six-station total market limit and four-station FM sub cap limit for the
Concord Metro.[^4] The Bureau Staff therefore dismissed the Application
on February 3, 2006.[^5] Nassau and Concord sought reconsideration of
that decision, arguing that there should be a two-year waiting period
before a change in an Arbitron Metro would bar a desired station
acquisition. The staff rejected that argument and denied reconsideration
in the *WWHK Order*. Nassau subsequently filed a timely Application for
Review of that decision by the full Commission. It also filed the
instant Request directed to the Media Bureau.

In its Request, Nassau first asks that the Bureau waive Section 73.3555,
Note 2(k)(1) of the Commission's Rules (the "Rules")[^6] to enable
WWHK(FM) to maintain its in-market JSA for WWKH(FM) until the Commission
acts on the Application for Review.[^7] Nassau argues that a waiver is
warranted because it would allow Nassau to continue to prosecute its
Application for Review. If the Bureau fails to grant a waiver of the
in-market JSA attribution rule, it continues, "then it will have
effectively denied the Nassau Petition by concluding WWHK is part of the
Concord Arbitron Metro Market rather than the Manchester Arbitron Metro
Market, the station's designation when the parties entered into the
\[stock purchase\] Agreement and the WWHK(FM) JSA."[^8] It contends that
it is requesting the waiver "solely to allow it to maintain its ability
to operate WWHK(FM) under the JSA until the Commission decides the
Nassau Application for Review on the merits."[^9] Nassau asserts that
the Commission has deferred required divestitures pending the outcome of
a rulemaking to determine if relaxation of the "one-to-a-market" rule
was in the public interest,[^10] and states that grant of the instant
waiver request will not frustrate the intent of the Commission's
multiple ownership rules.

In the alternative, Nassau requests a stay of the Commission's rule
requiring attribution of in-market JSAs to enable it to continue its JSA
for WWHK(FM). Nassau considers it likely that it will prevail on the
merits of its application for review and that both it and Capitol will
suffer irreparable harm absent grant of a stay. Without the stay, Nassau
contends, Capitol will be forced to operate the station on a stand-alone
basis in a market it decided to exit when it entered into the stock
purchase agreement with Nassau. It also claims that both Capitol and
Nassau will suffer financial loss as a result of the termination of the
JSA. Nassau will lose the advertising revenue it collects under the JSA,
and Capitol "will be forced to rush to find alternatives to run the
station and to find advertising for WWHK if the JSA is required to be
unwound."[^11] Granting the stay, Nassau continues, will allow both
Nassau and Capitol to maintain the status quo and the interim
arrangements they entered into while the Commission considers their
Application for Review. For these same reasons, Nassau believes that a
stay is in the public interest.

**Discussion.** Our longstanding case law on waivers provides that
deviation from the general rule (in this case Section 73.3555 Note
2(k)(1) of the Rules) is justified only where special circumstances
exist and the public interest will be served.[^12] Additionally,
requests for waiver must demonstrate that the underlying purpose of the
rule of which waiver is sought would not be served or would be
frustrated by application to the particular case and that a grant of the
request for waiver would be in the public interest.[^13] As discussed
below, Nassau has not met these criteria.

*Waiver Request.* The Commission has previously determined that, where
the brokering entity owns or has an attributable interest in one or more
stations in the local market and the joint advertising sales amount to
more than 15 percent of the brokered station's weekly advertising time,
the brokering entity should be attributed with an interest in the
brokered station.[^14] The Commission undertook this action because of
its concerns regarding the impact of in-market JSAs on competition in
local radio markets. Specifically, it determined that, where one station
owner controls a large percentage of the advertising time in a
particular market, it has the ability potentially to exercise market
power.[^15] Thus, it concluded, JSAs raise concerns regarding the
ability of smaller broadcasters to compete and may negatively affect the
health of the local radio industry generally.[^16] For this reason, the
Commission determined, and the Third Circuit Court of Appeals agreed,
that in-market JSAs involving more than 15 percent of the brokered
station's weekly advertising time provided the brokering entity with a
level of control or influence that would realistically allow holders of
such influence to affect core operating functions of a station, and give
them an incentive to do so.[^17] It provided all licensees with a
two-year period to come into compliance. The deadline for terminating
non-compliant JSAs was September 3, 2006.[^18]

Nassau has not demonstrated any reason or special circumstance why it
should be permitted to prolong an arrangement the Commission has
determined is inimical to competition or explained why the Commission's
concerns with the competitive of effects of such JSAs would be better
served by waiver of the rule. Instead, it simply points to the pendency
of its Application for Review and the fact that the Arbitron Metro
definition changed causing certain stations to be reclassified as
in-market stations. As the court found in upholding the Commission's
in-market JSA attribution decision, "station owners have no vested right
in the continuation of any particular regulatory scheme."[^19] Nassau
had no legitimate expectation that a Concord Arbitron Metro would not be
created; on the contrary, it knew at the time the Application was filed
of the imminent creation of the Concord Arbitron Metro. Nor has it
demonstrated any special circumstances that would cause us not to
attribute the JSA now that WWHK(FM) is in that market.

Moreover, Nassau's reference to instances in which the Commission
deferred required divestitures pending the outcome of a rulemaking to
determine if relaxation of the "one-to-a-market" rule was in the public
interest is inapposite here. The Commission has already spoken to the
issue of JSAs and required the termination of all noncompliant JSAs by
September 3, 2006. While a waiver might serve Nassau's private
interests, it has made no showing that it would serve the public
interest. We believe that the public interest in maintaining a
competitive balance in the Concord Metro is best served by terminating
the JSA so that it will comply with the ownership limit for the Concord
market.

*Request for Stay.* Nassau's request to stay the effectiveness of Note 2
is subject to dismissal on numerous procedural grounds. As an initial
matter, Section 1.44(e) of the Rules requires that a stay request must
be filed as a separate pleading.[^20] Nassau, however, combined is
waiver and stay requests in a single pleading. The Request, thus, is
subject to dismissal on this basis alone.

Pursuant to Section 1.429(k) of the Rules, "upon good cause shown, the
Commission will stay the effective date of a rule pending a decision on
the petition for reconsideration."[^21] Nassau filed its request with
the Media Bureau. Even if we were to ignore clear and contrary
Commission pronouncements on Note 2, the Bureau is without authority to
stay any Commission order. Accordingly, the Bureau cannot grant the
relief which Nassau seeks. The purpose of this section is to avoid
irreparable harm while the Commission considers petitions for
reconsiderations challenging newly adopted rules. However, Note 2 is not
in this procedural posture, *i.e.,* there are no pending petitions for
reconsideration. To the contrary, the Commission released an order
several months prior to the filing of the Request in which it
specifically declined to reconsider the decision to attribute JSAs and
denied numerous petitions challenging various aspects of the new JSA
rule.[^22] Accordingly, the stay request also is subject to dismissal on
this basis. Finally, we note that the stay request concerns a Rule that
has been in effect for nearly four years. In similar circumstances, the
Commission concluded that a stay would be "impossible" and treated the
request as one for a waiver of the disputed rule.[^23]

Notwithstanding these many procedural infirmities, we also note that
Nassau also has failed to demonstrate that a stay is appropriate. In
evaluating a request for stay, we must ask the following: 1) has the
petitioner made a strong showing that it is likely to prevail on the
merits of its appeal; 2) has the petitioner shown that without such
relief it will be irreparably injured; 3) would the issuance of a stay
substantially harm other parties interested in the proceedings; and 4)
where is the public interest.[^24] Nassau has failed to demonstrate a
likelihood it will prevail on the merits, that absent a stay it will
suffer irreparable harm, and that the public interest dictates a stay
should be granted.

With regard to the merits, as noted above, the Commission recently and
explicitly declined to reconsider its decision in the *2002 Biennial
Review* Order to attribute in-market JSAs.[^25] It also specifically
declined to reconsider its "grandfathering and transition" issues such
as the two-year period for terminating non-compliant JSAs.[^26]

Moreover, as the staff clearly explained in the *WWHK Order*, the
Commission generally requires applicants to provide the most current
relevant information available and relies on that information. However,
the Commission created an exception to this policy in the *2002 Biennial
Review Order* in one specific circumstance: a party may not receive the
*benefit* of a change in Arbitron Metro boundaries unless that change
has been in place for at least two years. This exception safeguards
against companies successfully petitioning Arbitron to change Metro
boundaries and manipulating data to circumvent the local radio ownership
rule.[^27] As pointed out in the *WWHK Order,* there is no reason to
have a similar waiting period in cases such as the present one, because
we do not believe an applicant would manipulate Arbitron data in a
manner adverse to its interests. Nassau has not demonstrated to the
staff why the two-year waiting period should apply in its case. To the
contrary, the exception appears inapplicable on its face to the present
circumstances.

Nassau has also failed to demonstrate irreparable harm. To constitute
"irreparable harm," the injury must be "both certain and great \[and\]
it must be actual and not theoretical.[^28] Therefore, to demonstrate
irreparable harm, Nassau must provide "proof indicating that the harm
\[it alleges\] is certain to occur in the near future."[^29] Recoverable
monetary loss may constitute irreparable harm only where the loss
threatens the very existence of the movant's business.[^30]

Nassau simply alleges that "\[w\]ithout a stay, Capitol will be
operating a station on a stand-alone basis in a market that it decided
to exit when it entered into the original agreement with Nassau. Nassau
will suffer financial loss as a result of the termination of the WWHK
JSA and Capitol will be forced to make other, last minute and temporary
arrangements for selling advertising on WWHK."[^31] Nowhere does it
allege that these harms are certain and great or anything more than
theoretical. Nor do they threaten the very existence of either party's
business. Requiring a licensee to sell advertising time on its own
station is unlikely to threaten that station's viability. Indeed, any
losses are speculative and may be of limited duration, as the parties
may of course reinstitute the JSA should the Commission overturn the
*WWHK Order*.

There is no public interest in prolonging an arrangement that provides
Nassau with

attributable interests in Concord Metro stations above the limit which
the Commission considers necessary to protect competition in this local
radio market. While Nassau has pointed to (speculative) harms to the
private interests of both it and Capitol that would result from the
denial of its stay request, Nassau has not demonstrated any public
interest benefit to grant of a stay while it pursues its Application for
Review, and we discern no such benefits. As discussed above in
connection with Nassau's waiver request, we believe that the public
interest is better served here by requiring Nassau to comply with the
local radio ownership rules. We note that, although the JSA here was
executed on July 16, 2004, prior to the effective date of the in-market
JSA attribution rule, it was not terminated prior to September 3, 2006,
despite the explicit Commission directive that all non-compliant JSAs be
terminated by that date and despite the fact that the Application had
been dismissed on February 6, 2006. We believe, therefore, that Nassau
has been in violation of Section 73.3555 of the Rules since September 3,
2006, and we will refer this matter to the Enforcement Bureau.

**Ordering Clauses.** Accordingly, IT IS ORDRED that the "Request for
Temporary Waiver and/or Stay" filed by Nassau Broadcasting I, LLC, IS
DENIED. Nassau IS ORDERED to take all steps necessary to come into
compliance immediately with the Commission's Rules.

IT IS FURTHER ORDERED that the Joint Sales Agreement between Nassau
Broadcasting I, LLC, and Concord Broadcasting LLC, with regard to
Station WWHK(FM) Concord, New Hampshire, SHALL BE TERMINATED IMMEDIATELY
AND THE COMMISSION SHALL BE NOTIFIED of such termination within 10 days
of the release of this decision.[^32] No request for reconsideration or
other

appeal shall excuse compliance with these orders. Upon notification of
the termination of the JSA, the

Media Bureau will address the enforcement issues relating to Nassau's
violation of Section 73.3555(a) of the Commission's Rules.

Sincerely,

Peter H. Doyle

Chief, Audio Division

Media Bureau

cc: David G. O'Neil, Esq.

Capitol Broadcasting Corporation, Inc.

Concord Broadcasting, LLC

[^1]: *Letter to Capitol Broadcasting Corporation, Concord Broadcasting,
    LLC, and Nassau Broadcasting I, LLC*, 23 FCC Rcd 5478 (MB
    2008)("*WWHK Order*").

[^2]: *See* Application, Attachment 6, Joint Sales Agreement, at Section
    4.1.

[^3]: *WWHK Order,* 23 FCC Rcd at 5480.

[^4]: *See* 47 C.F.R. § 73.3555(a)(1)(iii).

[^5]: *See Broadcast Actions,* Public Notice, Report No. 46168 (Feb. 8,
    2006)("Public Notice").

[^6]: 47 C.F.R. §73.3555 Note 2(k)(1) ("Note 2").

[^7]: Pursuant to Section 73.3555 Note 2(k)(1), a JSA that exceeds 15
    percent of the weekly advertising time of a station is attributable
    to a party that owns other stations in the same market. Nassau has
    an attributable interest in the Station giving it interests which
    exceed the number of attributable interests allowed to an entity in
    a market the size of the Concord Metro pursuant to Section
    73.3555(a)(1)(iii) of the Rules.

[^8]: Request at 5 -- 6.

[^9]: *Id.* at 6.

[^10]: Request at 6, *citing Letter to Capital Cities/ABC, Inc.,* By
    Direction Letter, 2 FCC Rcd 2539 (1987). There, the Commission
    stayed the need for divestiture due to its proposal in a separate
    proceeding to eliminate the AM/VHF cross-ownership rule because of
    the public interest benefits such cross-ownership could bring.

[^11]: Request at 8.

[^12]: *See Northeast Cellular Telephone Co. v. FCC,* 897 F.2d 1164,
    1166 (D.C. Cir. 1990)(citing *WAIT Radio v. FCC,* 418 F.2d 1153,
    1157-59 (D.C. Cir. 1969)("*WAIT Radio*").

[^13]: *See WAIT Radio,* 418 F.2d at 1157.

[^14]: *See 2002 Biennial Regulatory Review -- Review of the
    Commission's Broadcast Ownership Rules and Other Rules Adopted
    Pursuant to Section 202 of the Telecommunications Act of 1996*, 18
    FCC Rcd 13620, 13711-47 (2003) ("*2002 Biennial Review Order*"),
    *aff'd in part and remanded in part, Prometheus Radio Project, et
    al. v. FCC*, 373 F.3d 372 (2004) ("*Prometheus*"), *stay modified on
    rehearing*, No. 03-3388 (3d Cir. Sep. 3, 2004), *cert. denied*, 73
    U.S.L.W. 3466 (U.S. June 13, 2005) (Nos. 04-1020, 04-1033, 04-1036,
    04-1045, 04-1168, and 04-1177).

[^15]: *2002 Biennial Review Order*, 18 FCC Rcd at 13744.

[^16]: *Id*.

[^17]: *Id.* at 13745. *See also Prometheus,* 373 F.3d at 429.

[^18]: *2002 Biennial Review Order,* 18 FCC Rcd at 13746 ¶ 325. *See
    also Media Bureau Announces Requirement to File Certain Radio Joint
    Sales Agreements*, Public Notice, 20 FCC Rcd 1, 2 n.8 (MB 2005). As
    a result of a partial stay of the new rules, all licensees were
    given more than three years from the adoption of the new rule to
    terminate non-compliant JSAs.

[^19]: *Prometheus*, 373 F.3d at 430, citing *Folden v. United States*,
    56 Fed. Cl. 43, 61 (2003).

[^20]: 47 C.F.R. § 1.44(e) ("Any such request which is not filed as a
    separate pleading will not be considered by the Commission.).

[^21]: 47 C.F.R. § 1.429(k).

[^22]: *See 2006 Quadrennial Review -- Review of the Commission's
    Broadcast Ownership Rules and Other Rules Adopted Pursuant to
    Section 202 of the Telecommunications Act of 1996,* Report and Order
    and Order on Reconsideration, 23 FCC Rcd 2010, 2081 ¶ 137 (2008)
    ("*2006 Quadrennial Review*").

[^23]: *Southern Bell Telephone and Telegraph Company's Petition for
    Limited Stay and Waiver of the Commission's Third Computer Inquiry
    Rules Governing Common Carrier Provision of Low Level Protocol
    Conversion*, 4 FCC Rcd 2748, 2749 and n.34 (Com. Car. Bur. 1989).

[^24]: *Washington Metropolitan Area Transit Commission v. Holiday
    Tours, Inc.,* 559 F.2d 841, 843 (D.C. Cir. 1971).

[^25]: *See 2006 Quadrennial Review*, 23 FCC Rcd at 2081.

[^26]: *Id.* at 2081-2.

[^27]: *See 2002 Biennial Review Order*, 18 FCC Rcd at 13726.

[^28]: *See Wisconsin Gas Co. v. FERC,* 758 F.2d 669, 674 (D.C. Cir.
    1985).

[^29]: *Id.*

[^30]: *Washington Metropolitan Area Transit Commission v. Holiday
    Tours, Inc.,* 559 F.2d at 843 n.2.

[^31]: Request at 7 -- 8.

[^32]: Notification of the termination shall be made by letter to Peter
    H. Doyle, Chief, Audio Division, Media Bureau, Federal
    Communications Commission, 445 12^th^ Street, S.W., Washington, DC
    20554.