**DA 07-2042**

**Released: May 10, 2007**

Bend Cable Communications, LLC

c/o David M. Silverman, Esq.

Cole, Raywid & Braverman, LLP

1919 Pennsylvania Avenue, N.W.

Suite 200

Washington, D.C. 20006

Meredith Corporation

c/o John R. Feore, Jr., Esq.

Dow Lohnes PLLC

1200 New Hampshire Avenue, N.W.

Washington, D.C. 20036

Gregory C. Lawhon, Esq.

General Counsel

News-Press & Gazette Company

215 West 18^th^ Street #202

Kansas City, Missouri 64108

Re: Application for Assignment of License

KFXO-LP, Bend, Oregon

File No. BALTTA-20060817ABZ

Facility ID No. 35464

Dear Counsel:

This is in regard to the above-referenced application for consent to
assign the license of Class A Station KFXO-LP, Bend, Oregon,[^1] from
Meredith Corporation ("Meredith"), to NPG of Oregon, Inc. ("NPG of
Oregon"), a subsidiary of the News-Press & Gazette Company ("NPG"). On
September 21, 2006, Bend Cable Communications, LLC ("Bend Cable"), a
multichannel video programming provider serving the Bend, Oregon,
market, filed a Petition to Deny the assignment application. Meredith
and NPG filed separate oppositions on October 25, 2006, and Bend Cable
filed a reply on November 27, 2006. Bend Cable argues that, "\[w\]hile
the proposed transaction technically complies with the Commission's
multiple ownership rules, it is likely to have an anticompetitive
effect," on the Bend, Oregon market.[^2] For the reasons set forth
below, we deny the Petition to Deny and grant the assignment
application.[^3]

*Background.* NPG of Oregon is the current licensee of Station KTVZ(TV),
Bend, Oregon, an NBC affiliate, and, according to Bend Cable, the only
"operational full power television station in the Bend market
broadcasting in both analog and digital."[^4] Bend Cable acknowledges
that common ownership of Station KTVZ(TV) and Station KFXO-LP, a Fox
affiliate, would comply with the broadcast multiple ownership rule since
there is no limit on the number of low-power or Class A television
stations a licensee may own. Bend Cable contends, however, that broader
antitrust concerns must be considered in the Commission's public
interest analysis. Bend Cable argues that, when considering broadcast
television advertising as the relevant product market and the Bend,
Oregon Nielsen Designated Market Area ("DMA") as the relevant geographic
market, the instant transaction would lead to excessive market
concentration. Bend Cable cites the Herfindahl-Hirschman Index ("HHI")
and the U.S. Department of Justice ("DOJ") in maintaining that the
proposed merger would pose a threat to competition.

NPG responds that the Commission's multiple ownership rules have always
permitted licensees "to own an unlimited number of TV translators, LPTV
stations and Class A TV stations" in any market, and that such a policy
is sound since these TV stations "are only 'secondary services,' subject
to total displacement by full-power TV stations at any time."[^5] NPG
states that, even assuming the Commission were to consider antitrust
issues as part of its public interest analysis in this case, Bend Cable
has failed "to support its core argument with anything but opinion and
unsupported allegations, wholly devoid of probative evidence."[^6] NPG
argues that the Commission has not applied DOJ standards in its review
of assignment applications for full-power, much less low-power,
television stations. NPG has further submitted a market study concluding
that the relevant product market is not broadcast television
advertising, as alleged by Bend Cable, but rather "local media
advertising," which includes advertising sold by newspapers, cable
systems, radio stations, and television stations. According to NPG, NPG
of Oregon "currently has 9.2% of local media advertising revenues and,
upon acquiring KFXO-LP, would have approximately 14.2%."[^7] Thus,
according to NPG, the transaction would not lead to excessive market
concentration.

Meredith reiterates many of the same arguments made by NPG. Meredith
adds that Bend Cable's estimate of NPG of Oregon's revenue share is "not
attributed to anyone -- not an expert economist, a third party data
collector, or a person with actual knowledge of the facts," and that
Bend Cable's "conclusions about unspecified harms befalling consumers
and the public interest lack any support other than the generic
declaration of Bend Cable's own CEO."[^8] Meredith notes that a
full-power television station affiliated with NBC and a PBS station
currently operate in the Bend DMA and that a full-power ABC affiliate
signed on in September 2006. Meredith further states that a CBS
affiliate licensed to Portland, Oregon also serves viewers in the Bend,
Oregon DMA. In addition to these full-power stations, there are 4 Class
A television stations licensed to the Bend, Oregon DMA, including the
Fox affiliate Station KFXO-LP, a Univision affiliate, and two
independents. Meredith notes that, in addition to these 4 Class A
television stations, "43 LPTV stations within 60 miles of the center of
Bend currently compete for viewers and revenue."[^9]

*Discussion*. Section 310(d) of the Act provides that no station license
shall be transferred or assigned until the Commission, upon application,
determines that the public interest, convenience, and necessity will be
served thereby.[^10] In making this assessment, the Commission must
first determine whether the proposed transaction would comply with the
specific provisions of the Act,[^11] other applicable statutes, and the
Commission's rules.[^12] In this case, Bend Cable acknowledges that the
transaction does not violate any Commission rule, but instead argues
that grant of the application would nevertheless be contrary to the
public interest.

The Commission analyzes such allegations according to a two-step
process. First, the petition must contain specific allegations of fact
sufficient to show that such a grant would be *prima facie* inconsistent
with the public interest.[^13] This first step of the public interest
analysis "is much like that performed by a trial judge considering a
motion for directed verdict: if all the supporting facts alleged in the
affidavit were true, could a reasonable factfinder conclude that the
ultimate fact in dispute had been established."[^14] If the petition
meets the first step, the Commission will designate the application for
hearing if the allegations, together with any opposing evidence before
the Commission, raise a substantial and material question of fact as to
whether grant would serve the public interest, or if the Commission is
otherwise unable to conclude that granting the application would serve
the public interest.[^15] In this case, we find that the petition has
failed to show that grant of the application would be *prima facie*
inconsistent with the public interest.

The Commission's multiple ownership rules are intended to promote
competition, diversity and localism in the mass media, essential goals
"in carrying out \[the Commission's\] statutory mandate of ensuring that
broadcast licensees serve the 'public interest, convenience, and
necessity.'"[^16] As recently as the *2002 Biennial Review Order*, the
Commission determined that bright-line rules, as opposed to a
case-by-case analysis is the best means of ensuring the goals of
competition and diversity are met while at the same time providing
certainty to outcomes, conserving resources, reducing administrative
delays, lowering transaction costs, increasing transparency of our
process, and ensuring consistency in decisions.[^17]

Under the broadcast multiple ownership rule, a party may own, operate or
control two television stations within the same Nielsen Designated
Market Area (DMA) if the Grade B contours of the stations do not
overlap, or if eight or more independently owned and operating
commercial and noncommercial television stations will be licensed to the
DMA and at least one of the stations is not ranked within the top four
stations in the DMA in terms of audience share.[^18] Low power and Class
A television stations, however, are not subject to the numerical
ownership limits of section 73.3555(b). In the case of Class A
television stations, the Commission concluded that Congress in passing
the Community Broadcasters Protection Act of 1999[^19] intended "that
Class A stations be exempt from existing common ownership requirements
and that this exemption should apply when a license is subsequently
transferred to a buyer with other media interests."[^20] The Commission
has also stated that there are no ownership limits on low power
television stations because such stations have limited coverage areas
and operate under restricted power.[^21] Class A stations operate under
the same power limitations as low-power television stations.[^22]

Even were we to apply a case-by-case approach, Bend Cable has failed to
proffer sufficient economic data to permit meaningful economic analysis
or substantiate its claim of competitive harm. Bend Cable's statements
concerning competition are speculative and unsupported by extrinsic
evidence. Also, Bend Cable has provided no data to support its position
that the proper product market is broadcast television advertising. Both
NPG and Meredith, on the other hand, have provided specific expert
testimony as to why the proper product market is the broader "local
media advertising." Thus, we find no reason to depart from our
established standards in determining which broadcast services are
subject to the numerical ownership limits of the broadcast television
multiple ownership rule.

Based on the evidence presented in the record, we find that grant of the
above-captioned assignment application is consistent with the public
interest, convenience and necessity. Accordingly, IT IS ORDERED, that
the September 21, 2006, Petition to Deny of Bend Cable Communications,
LLC, IS DENIED, and that the application to assign the license of
Station KFXO-LP, Bend, Oregon (File No. BALTTL-20060817ABZ) from
Meredith Corporation to NPG of Oregon, Inc. IS GRANTED.

Sincerely,

Barbara A. Kreisman

> Chief, Video Division
>
> Media Bureau

cc: Robert Lewis Thompson, Esq.

Smithwick & Belendiuk, PC

5028 Wisconsin Avenue, NW

Suite 301

Washington, D.C. 20016

[^1]: On August 31, 2001, the Commission authorized Station KFXO-LP to
    operate as a Class A station. *See* BLTTA-20010712AII.

[^2]: *Bend Cable Petition to Deny*, at 1.

[^3]: We will exercise our discretion and consider all of the pleadings,
    and allegations raised therein, that have been filed by the parties.
    Thus, we need not determine whether Bend Cable has formal standing
    as a party in interest under section 309(d) of the
    Telecommunications Act of 1934 (the "Act").

[^4]: *Bend Cable Petition to Deny*, at 2.

[^5]: *NPG Opposition* at 3.

[^6]: *Id.* at 4.

[^7]: *Id.* at 7.

[^8]: *Meredith Opposition* at 5.

[^9]: *Id.* at 12.

[^10]: 47 U.S.C. § 310(d).

[^11]: *See SBC Communications Inc. and AT&T Corp. Applications for
    Approval of Transfer of Control,* 20 FCC Rcd 18290, 18300 (2005)
    ("*SBC-AT&T Order*"); V*erizon Communications, Inc. and MCI, Inc.
    Applications for Approval of Transfer of Control,* 20 FCC Rcd 18433,
    18442-43 (2005) ("*Verizon-MCI Order*").

[^12]: *See, e.g., SBC-AT&T Order*, 20 FCC Rcd at 18300; *Verizon-MCI
    Order*, 20 FCC Rcd at 18442-43.

[^13]: 47 U.S.C. §309(d)(1); *Astroline Communications Co. Ltd.
    Partnership v. FCC,* 857 F.2d 1556 (D.C. Cir. 1988) ("Astroline").

[^14]: *Gencom, Inc. v. FCC*, 832 F.2d 171, 181 (D.C. Cir. 1987). *See
    also Serafyn v. FCC*, 149 F.3d 1213, 1216 (D.C. Cir. 1998)
    (affirming two-step public interest analysis).

[^15]: *Astroline*, 857 F.2d at 1561; 47 U.S.C. §309(e).

[^16]: *In the Matter of Review of the Commission's Regulations
    Governing Television Broadcasting*, 14 FCC Rcd 12903, 12907 (1999)
    (subsequent history omitted) ("*1999 Television Ownership Order*").
    *See, also, In the Matter of 2002 Biennial Regulatory Review --
    Review of the Commission's Broadcast Ownership Rules and Other Rule
    Adopted Pursuant to Section 202 of the Telecommunications Act of
    1996*, 18 FCC Rcd 13620 (2003) ("*2002 Biennial Review Order*"),
    *aff\'d in part and remanded in part*, [*P**rometheus Radio Project
    et al. v. F.C.C.*, 373 F.3d 372 (3d Cir.
    2004)](http://web2.westlaw.com/find/default.wl?DB=506&SerialNum=2004624170&FindType=Y&AP=&fn=_top&rs=WLW6.08&mt=Communications&vr=2.0&sv=Split)
    (\"*P**rometheus Remand Order*\"), *stay modified on rehearing*, (3d
    Cir. Sept. 3, 2004) (\"*P**rometheus Rehearing Order*\").

[^17]: *2002 Biennial Review Order*, 18 FCC Rcd at 13645.

[^18]: 47 C.F.R. §73.3555(b) (2002).

[^19]: 47 U.S.C. § 336(f).

[^20]: *In the Matter of Establishment of a Class A Television Service*,
    15 FCC Rcd 6355, 6392 (2000) (subsequent history omitted).

[^21]: *See Report and Order, An Inquiry into the Future Role of Low
    Power Television Broadcasting and Television Translators in the
    National Telecommunications System*, 51 RR 2d at 516-17 (Low power
    television stations not subject to ownership rule because these
    stations \"have limited coverage potential, which effectively limits
    the area from which advertising support may be garnered; their
    secondary status poses the possibility that they might be required
    to alter facilities or cease operation at any time; the majority of
    channel availabilities are in rural areas, where viability generally
    is less certain than in urbanized areas\").

[^22]: *In the Matter of Establishment of a Class A Television Service*,
    15 FCC Rcd at 6367-68.