**DA 07-1487**

In Reply Refer to:

1800B3-RDH

Released: March 29, 2007

David D. Oxenford, Esq.

Davis Wright Tremaine LLP

1500 K Street, N.W.

Suite 450

Washington, D.C. 20005

Charles R. Naftalin, Esquire

Holland & Knight LLP

2099 Pennsylvania Avenue, N.W.

Suite 100

Washington, D.C. 20036

Robert Lewis Thompson, Esq.

Smithwick & Belendiuk, PC

5028 Wisconsin Avenue, N.W.

Suite 301

Washington, D.C. 20016

Howard J. Braun, Esq.

Katten Muchin Rosenman LLP

1025 Thomas Jefferson Street, N.W.

East Lobby, Suite 700

Washington, D.C. 20007

In re: WICK(AM), Scranton, PA

Facil. ID No. 36489

File No. BAL-20050707AAU

WYCK(AM), Plains, PA

Facil. ID No. 36835

File No. BAL-20050707AAP

WWRR(FM), Scranton, PA

Facil. ID No. 36508

File No. BALH-20050707AAT

**Applications for Assignment of License Petition for Reconsideration**

Dear Counsel:

This letter concerns the captioned applications of Lancom, Inc.
("Lancom"), Lane Broadcasting Corporation ("LBC"), LB Radio Corporation
("LB") and Bold Gold Media Group ("BGMG") (collectively, the "Parties")
for consent to assign to BGMG the licenses for Stations WICK(AM),
Scranton, Pennsylvania, by Lancom; WYCK(AM), Plains, Pennsylvania, by
LB; and WWRR(FM), Scranton, Pennsylvania, by LBC (collectively, the
"Applications" and each, an "Application").[^1] The Applications were
granted by the Audio Division of the Media Bureau (the "Bureau") by
letter dated December 9, 2005.[^2] On January 9, 2006, Leslie C. Quick
III ("Quick") filed a Petition for Reconsideration (the "Petition") of
the Staff Decision.[^3] For the reasons set forth below, we dismiss the
Petition.

**Background.** Douglas V. Lane ("Lane") was the 80 percent shareholder
of Lancom and LBC and the sole shareholder of LB (Lancom, LBC and LB,
collectively, the "Sellers"). In March 2005, he was convicted in
Lackawanna County, Pennsylvania, of several felony counts involving
child molestation and child pornography. Lane was sentenced to a prison
term in October 2005 and is currently incarcerated. He is appealing his
convictions and sentence. On July 7, 2005, the Parties filed the
Applications. Under the terms of the Parties' Asset Purchase Agreement
(the "APA"), as consideration for the Stations, BGMG agreed to pay the
Sellers \$1.925 million, less the total amount of any pre-closing loans
made by BGMG to Sellers for the operation of the Stations. The sale
proceeds would be used to pay all taxes due and to satisfy all
liabilities relating to the Stations' assets. The proceeds also would be
used to pay all valid and reasonably documented claims of Sellers'
creditors and to fund a \$100,000 post-closing escrow for potential
Sellers' liabilities relating to the Stations. Additionally, a
non-refundable \$300,000 payment would be made from the proceeds to the
Lackawanna County General Fund (the "LCGF") at closing, for distribution
to Lane's victims and to local agencies that assist abused children.[^4]
Under the APA, no payment would be made -- directly or indirectly -- to
any shareholder of Sellers, including Quick, unless Lane was exonerated
of all felony charges. Any remaining proceeds would be placed in a
post-closing trust. If any felony conviction of Lane was sustained in a
final determination, all funds remaining in the post-closing trust would
be distributed to the LCGF.

On December 9, 2005, the Bureau granted the Applications, including that
involving Station WICK(AM). The Staff Decision explained that, while the
Commission's *Jefferson Radio*[^5] policy generally precludes
consideration of a license assignment application where a character
issue has been resolved or is pending against the proposed assignor, the
public interest benefits that would accrue from consummation of the
proposed transaction here warranted variance from that approach. In this
case, those public interest benefits included: (1) substantial payments
to victims of Lane's conduct and to designated social service agencies;
(2) no payments or other direct benefits to any shareholder of the
Sellers from the sale; (3) Lane's full withdrawal from broadcasting;
and; (4) the continuation of radio service by the Stations to listeners
in the Scranton area.[^6]

In his Petition, Quick argues that the Staff Decision took away his
rights as a minority (20 percent) shareholder of Lancom, interfered with
those rights under state law, and extinguished his economic interest
without benefit of due process. Quick contends that, in depriving him of
any sale proceeds, he is being punished "for the sins of another" and
that this taking the proceeds for his investment in Lancom constitutes
an unlawful seizure of his property. Accordingly, he asks that the
Bureau "reconsider its decision and clarify that Mr. Quick must receive
an equitable portion of the proceeds of the sale of WICK(FM)." [^7]

In their Joint Opposition, Lancom, BGMG and the District Attorney argue
that Section 1.106(b) of the Commission's rules[^8] required Quick to
demonstrate in his Petition both the manner in which his interests were
adversely affected by grant of the Applications and good reason why it
was not possible for him to have participated in the earlier stages of
the proceeding involving those Applications. The Joint Opposition states
that, because Quick did not make this latter showing, his Petition
should be dismissed. Additionally, the Joint Opposition contends that
the Petition is an abuse of the Commission's processes because it: (1)
fails to comply with Section 1.106(b)(1) of the Commission's rules; (2)
is premised on civil law claims outside the Commission's jurisdiction;
and (3) opposes each of the Applications although Quick only had an
interest in one of the Sellers, Lancom. Finally, the Joint Opposition
asserts that Quick's claims, as stated in the Petition, each revolve
around state corporate law and involve his rights as a minority
shareholder under those laws and, accordingly, are beyond the
Commission's jurisdiction.

In his Reply, Quick states that, under the initial version of the APA,
he, as an innocent minority shareholder in Lancom, would have recouped
his investment in Lancom from the proceeds of the sale of Station
WICK(AM). For this reason, he claims that he did not object to the
WICK(AM) Application at the petition to deny stage because he supported
the sale under those conditions. The revision of the proposal to
preclude Quick's receipt of any of the sale proceeds, was, he contends,
not known or even agreed to by the Parties until October 2005, long
after the 30-day post-public notice period for the filing of petitions
to deny had passed. Therefore, he asserts, he had no reason to file a
petition to deny, and his instant Petition is appropriate because it
alleges material error in the Staff Decision. Moreover, he asserts that
he received no notice "directly from the company" that the Applications
would be amended to forbid payments to innocent shareholders of the
Sellers.[^9] Additionally, Quick maintains that he does not seek to
involve the Commission in issues of state law but, instead, that the
Staff Decision overstepped the Commission's authority by resolving
private contractual issues when it conditioned the assignment of the
WICK(AM) license on the elimination of his minority shareholder rights
in Lancom.

**Discussion.** As an initial matter, Quick has not adequately
demonstrated why he did not participate earlier in the proceeding -- a
prerequisite to our substantive consideration of his instant Petition.
Section 405(a) of the Communications Act of 1934, as amended, provides
that a petition for reconsideration may be filed by: (1) a party to a
proceeding, or (2) "any other person aggrieved or whose interests are
adversely affected by" the underlying decision.[^10] Although Quick is
not a party to this proceeding because he failed to file a petition to
deny or otherwise object to the Applications, he may petition for
reconsideration under the second, "aggrieved or adversely affected"
test, if he can demonstrate why it was not possible for him to have
participated earlier.[^11] Although Quick could not have filed a
petition to deny after the 30-day filing period had expired with regard
to the amendment which extinguished his right to share in the sale
proceeds as a result of his interest in Lancom, he could have filed an
informal objection.[^12] The Commission has previously determined that,
where a petitioner is precluded from filing a petition to deny, its
submission of an informal objection is sufficient to confer standing to
file a reconsideration petition.[^13] Where, however, such a potential
participant could have, but did not, file an informal objection, the
Commission has found that it lacks standing to then file a
reconsideration petition.[^14] Accordingly, Quick has not met the burden
imposed by Section 1.106(b)(1) of the Commission's rules of
demonstrating why he could not have participated earlier by means of
filing an informal objection. Accordingly, we decline to consider the
merits of his Petition.[^15]

Even if we were to consider Quick's substantive arguments, they are
without merit. The Application to assign the WICK(AM) license from
Lancom to BGMG, and the amendment thereto, were each duly executed by
Virginia B. Lane, an authorized Lancom officer and director acting
within her

legal authority to bind the company. Contrary to Quick's contention that
the Bureau was somehow complicit in the inclusion in the terms of the
sale that no shareholder of the Sellers, including Quick, would receive
proceeds from the transaction as long as Lane's conviction stood,[^16]
the Bureau only approved what had been negotiated and proposed by the
Parties before it in Applications to which no one, including Quick, had
filed an opposition. For the reasons noted in the Staff Decision and
above, the Bureau, in the exercise of its delegated statutory authority
and in its sound discretion, determined that its grant of the
Applications and approval of the proposed sale of the Stations would
serve the public interest. Quick has not demonstrated that the Bureau
acted outside that authority or otherwise abused its discretion in so
granting the Applications. If Quick believes that any of the Parties
somehow violated his rights as a Lancom shareholder, his remedy is
before a state court, which is the appropriate forum to resolve the
contract, corporate law, and minority shareholder rights claims that he
raises in his Petition.[^17] The Commission has consistently left to
local courts of appropriate jurisdiction the consideration and
resolution of disputes regarding such issues.[^18] Accordingly, it has
generally declined to consider issues of a licensee's compliance with
the requirements of state corporate law where, as here, no challenge has
been made before a state court.[^19]

**Conclusion/Actions.** In his Petition, Quick fails to demonstrate why
he could not have earlier participated in the Bureau's consideration of
the Applications for approval of the assignment of Stations WICK(AM),
WWRR(FM), and WYCK(AM), or any material error in the Staff Decision
granting those Applications.

Accordingly, for the reasons set forth above, Quick's Petition for
Reconsideration IS DISMISSED.

Sincerely,

Peter H. Doyle

Chief, Audio Division

Media Bureau

[^1]: Stations WICK(AM), WYCK(AM) and WWRR(FM) are collectively referred
    to herein as the "Stations."

[^2]: *See Letter to Charles R. Naftalin, Esquire and Robert Lewis
    Thompson, Esquire,* 20 FCC Rcd 19373 (MB 2005) (the "Staff
    Decision").

[^3]: Lancom, BGMG and the District Attorney for Lackawanna County,
    Pennsylvania (the "District Attorney"), filed a "Joint Opposition to
    Petition for Reconsideration and Request for Other Relief" (the
    "Joint Opposition") on January 24, 2006, to which Quick replied on
    February 3, 2006, by "Reply to Joint Opposition to Petition for
    Reconsideration and Request for Other Relief" (the "Reply").

[^4]: A separate agreement, dated October 7, 2005, between Lane and the
    District Attorney, who was the prosecuting attorney at the Lane
    criminal trial, sets forth the distribution plan for funds paid into
    the LCGF. The non-refundable \$300,000 payment would be disbursed to
    victims of Lane and to Lackawanna County non-profit agencies that
    assist abused children. The residual distribution from the
    post-closing trust to the LCGF would be disbursed in a manner
    directed by the District Attorney.

[^5]: *See Jefferson Radio Corp. v. FCC,* 340 F.2d 781 (D.C. Cir. 1964).

[^6]: *Staff Decision,* 20 FCC Rcd at 19375.

[^7]: Petition at 7.

[^8]: 47 C.F.R. § 1.106(b).

[^9]: Quick acknowledges that while his counsel discussed the status of
    the proceeding with Lancom's counsel "from time to time," he
    received no information that the Application was to be so amended
    "until well after the Petition to Deny date." Reply at 5.

[^10]: 47 U.S.C. § 405(a); *see also* 47 C.F.R. § 1.106(b)(1).

[^11]: *See* 47 C.F.R. §1.106(b)(1).

[^12]: *See* 47 C.F.R. § 73.3587.

[^13]: *See Cloud Nine Broadcasting, Inc.,* Letter*,* 10 FCC Rcd 11555,
    11556 (1995).

[^14]: *See Davidson County Broadcasting Co., Inc,* Memorandum Opinion
    and Order, 8 FCC Rcd 1689, 1690 (1993).

[^15]: We do not find Quick's filing of his Petition to constitute an
    abuse of the Commission's processes, as claimed in the Joint
    Opposition. The Commission has defined "abuse of process" as
    "serious willful misconduct that directly threatens the integrity of
    the Commission's licensing processes." *Policy Regarding Character
    Qualifications in Broadcast Licensing,* 102 FCC 2d 1179, 1211
    (1986). Contrary to the assertions in the Joint Opposition, Quick's
    Petition, while not subject to our consideration for the
    above-stated reasons, does not "flout the Commission's procedures"
    simply because we concluded that his arguments are unavailing.
    Additionally, we do not find that Quick abused the Commission's
    processes by seeking reconsideration of the grant of the
    Applications for approval of the sale of all three Stations by
    companies that Lane controlled. It is not altogether clear from the
    pleadings that Quick objected to the other two Applications- his
    requested remedy was that the Bureau revise its disposition and
    restore his rights as a Lancom shareholder. Moreover, although Quick
    only had an interest in one of the Sellers, he is seeking to be
    compensated from his interest in Lancom from the consolidated
    proceeds of the challenged transactions. Finally, while the Joint
    Opposition claims that Quick's Petition raises matters such as his
    rights under state law (Joint Opposition at 11), we do not find that
    his doing so constituted deliberate misconduct or threatened the
    integrity of the Commission's licensing processes. In sum, the Joint
    Opposition does not demonstrate, and we do not find, that Quick's
    filing of the Petition constitutes an abuse of process.

[^16]: Petition at 3 ("In essence, the Media Bureau has extinguished all
    of the rights of Mr. Quick as a shareholder under corporate law,
    without involving Mr. Quick in the process in any way.")

[^17]: Contrary to Quick's claim, the Staff Decision did not adjudicate
    a contractual dispute or private claim, or actively usurp his
    private shareholder rights. (Reply to Joint Opposition at 5.) The
    Bureau's action made no ruling on or interpretation of Pennsylvania
    state contract or corporate law. As noted above, the Bureau merely
    granted the Applications and approved the transaction negotiated by
    and presented by the Parties.

[^18]: *See Northwest Broadcasting, Inc*., Memorandum Opinion and Order,
    12 FCC Rcd 3289, 3293 (1997); *see also John F. Runner*, Memorandum
    Opinion and Order, 36 RR 2d 773 (1976) and *Transcontinental
    Television Corp.,* Memorandum Opinion and Order, 21 RR 945 (1961).

[^19]: *Fatima Response, Inc.,* Memorandum Opinion and Order, 14 FCC Rcd
    18543, 18544 (1999); *see also North American Broadcasting Co.,
    Inc.,* Memorandum Opinion and Order, 15 FCC 2d 979, 983 (1969)
    ("With regard to the status of any previous corporate action, the
    Commission has traditionally declined to interfere in questions of
    alleged State law violations where no challenge has been made in the
    State courts and the determination is one that is more appropriately
    a matter of State resolution.").