Peninsula Communications, Inc.

c/o Jeffrey D. Southmayd, Esq.

1220 19^th^ Street, N.W., Suite 400

Washington, D.C. 20036

KSRM, Inc.

c/o Peter Gutmann, Esq.

Womble Carlyle Sandridge & Rice, PLLC

1401 I Street, N.W., Seventh Floor

Washington, D.C. 20005

Northern Radio, Inc.

c/o David Tillotson, Esq.

4646 Charleston Terrace, N.W.

Washington, D.C. 20007

In re: **KZNZ(FM), Kasilof, AK**

Facility ID No. 78420

File No. BAPH-20060615ACZ

> **Application for Assignment of Construction Permit**

**Petition to Deny**

Dear Counsel:

We have before us the above-captioned application ("Assignment
Application") proposing to assign the construction permit of Station
KZNZ(FM), Kasilof, Alaska, from Northern Radio, Inc. to KSRM, Inc.
("KSRM"). On July 19, 2006, Peninsula Communications, Inc. ("PCI"), the
licensee of KPEN-FM, Soldotna, Alaska, and KXBA(FM), Nikiski, Alaska,
filed a Petition to Deny the Assignment Application.[^1] For the reasons
stated below, we deny the Petition to Deny and grant the Assignment
Application.

***Background.*** PCI states that grant of the Assignment Application
would add to KSRM's "already anti-competitive group of stations,"[^2]
providing KSRM with an unfair advantage over its competitors. PCI also
argues that the proposed transaction would violate Section 73.3555 of
the Commission's Rules.[^3]

***Discussion.*** With regard to PCI's competition claims, we initially
note that Station KZNZ(FM) is not located in a market that is rated by
Arbitron. In its extensive review of the broadcast ownership rules,[^4]
the Commission determined that, where transactions involve non-Arbitron
rated markets, it would continue to apply its contour-overlap
methodology, with certain modifications, to determine compliance with
the local radio ownership rule.[^5] While acknowledging that aspects of
this methodology are problematic, the Commission concluded that "its
temporary use during the pendancy of \[its ongoing\] rulemaking
proceeding cannot be avoided."[^6]

PCI argues that, in following the Commission's current methodology for
determining the relevant market, KSRM has "concoct\[ed\] its idea of
what it deems to be the relevant stations in the Kenai and Soldotna
radio market for the purposes of the Commission's current and previous
ownership rules."[^7] PCI argues that the relevant market for the
Assignment Application should be a "Central Kenai Peninsula market."
PCI's sole argument for adoption of such a market definition is that, in
an April 3, 1992, Petition to Deny the application for assignment of
license of KSLD(AM), Soldotna, Alaska, from King Communications to Cobb
Communications, Inc,[^8] KSRM, as licensee of Stations KSRM(AM),
Soldotna, Alaska and KWHQ-FM, Kenai, Alaska, asserted that "Kenai and
Soldotna comprise one market, the Central Kenai Peninsula."[^9] This
contention by KSRM in its 1992 Petition to Deny was made prior to the
adoption of the Commission's current local radio ownership rule,[^10]
and is in no way determinative of the appropriate methodology that the
Commission uses to ascertain compliance with the local radio ownership
limits. Accordingly, we find that PCI's argument is without merit.

Staff review confirms that the proposed transaction forms one radio
market, in which KSRM would own three FM stations and two AM stations in
a 15-station market.[^11] In a local radio market with between 15 and 29
stations, a single owner may own up to six commercial stations, no more
than four of which are in the same service.[^12] Accordingly, the
proposed transaction complies with the local radio ownership limits in
the subject market.

***Conclusion/Actions***. Based on the above, we find that the PCI has
not raised a substantial and material question of fact warranting
further inquiry. We further find that KSRM, Inc. is qualified as the
assignee and that grant of the Assignment Application is consistent with
the public interest, convenience and necessity. Accordingly, IT IS
ORDERED, that the Petition to Deny filed by Peninsula Communications,
Inc. IS DENIED, and that the application to assign the construction
permit of Station KZNZ(FM), Kasilof, Alaska (File No. BAPH-20060615ACZ)
from Northern Radio, Inc. to KSRM, Inc. IS GRANTED.

Sincerely,

Peter H. Doyle

Chief, Audio Division

Media Bureau

[^1]: KSRM filed an Opposition on August 1, 2006, and PCI filed a Reply
    on August 15, 2006.

[^2]: Petition to Deny at 2.

[^3]: 47 C.F.R. § 73.3555.

[^4]: *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*,
    Report and Order, 18 FCC Rcd 13620 (2003) ("*Ownership Report and
    Order*"), *aff'd in part and remanded in part,* *Prometheus Radio
    Project, et al. v. F.C.C.*, 373 F.3d 372 (3d Cir. 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).

[^5]: *See Ownership Report and Order*, 18 FCC Rcd at 13729-30 and
    13870-73.

[^6]: *Id.* at 13729.

[^7]: Petition to Deny at 2.

[^8]: File No. BAL-19920224EH.

[^9]: Petition to Deny at 4.

[^10]: As KSRM points out, PCI fails to acknowledge that the local radio
    market rules were vastly different in 1992. In 1992, ownership of
    two AM stations in the same market was prohibited by the multiple
    ownership rule. *See* 47 C.F.R. § 73.3555(a)(1) (1992).

[^11]: Post-transaction, the five stations that KSRM would own are
    KZNZ(FM), Kasilof, Alaska, KSRM(AM), Soldotna, Alaska, KSLD(AM),
    Soldotna, Alaska, KKIS-FM, Soldotna, Alaska and KWHQ-FM, Kenai,
    Alaska.

[^12]: 47 C.F.R. § 73.3555(a)(1)(iii).