FEDERAL COMMUNICATIONS COMMISSION

**445 12^th^ Street, S.W.**

**Washington, D.C. 20554**

January 31, 2003

Released: February 3, 2003

***In Reply Refer to:***

> 1800B3-JWB

DA 03-345

Harry C. Martin, Esq.

Harry F. Cole, Esq.

Alison J. Shapiro, Esq.

Fletcher, Heald & Hildreth, P.L.C.

1300 North 17^th^ Street

11^th^ Floor

Arlington VA 22209

John P. James, Esq.

Lommen, Nelson, Cole & Stageberg, PA

1800 IDS Center

80 South Eighth Street

Minneapolis MN 55042

Lee W. Shubert, Esq.

Katten Muchin Zavis Rosenman

1025 Thomas Jefferson Street, N.W.

East Lobby, Suite 700

Washington, D.C. 20007-5201

Re: KBMW(AM), Breckenridge, Minnesota

Facility ID No. 70500

File No. BAL-20020513AAO

Application for Consent to Assignment of License

Dear Counsel:

We have before us the above-captioned application ("Application") of W-B
Broadcasting, Inc. ("W-B"), and Monterey Licenses, LLC ("Monterey"), a
wholly owned subsidiary of Triad Broadcasting Company, LLC
("Triad").[^1] The Application seeks our consent to the assignment from
W-B to Triad of the license of broadcast station KBMW(AM), Breckenridge,
Minnesota. On June 24, 2002, Randy K. Holland Investments, LLC
("Holland"), the licensee of KGBZ(FM), Harwood, North Dakota, timely
filed a Petition to Dismiss or Deny (the "Petition"). Triad filed an
Opposition to Petition to Dismiss or Deny on July 1, 2002 (the
"Opposition"), and on July 31, 2002, Holland filed its Reply to
Opposition to Petition to Dismiss or Deny (the "Reply").[^2] Based on
the record before us, and for the reasons set forth herein, we find that
grant of the Application is consistent with the public interest.

**Background.** KBMW(AM)'s community of license, Breckenridge, is in
Wilkin County, Minnesota. The Arbitron "metro"[^3] nearest to
Breckenridge is the Fargo, ND-Moorhead, MN, metro ("Fargo metro")
defined by Cass County, North Dakota, and Clay County, Minnesota. The
Petition cites to BIA[^4] data listing five Triad-owned stations "home"
to the Fargo metro.[^5] BIA also lists Holland's station KGBZ(FM),
Harwood, North Dakota, as home to the Fargo metro. KBMW(AM), however, is
neither assigned by Arbitron to any metro nor listed by BIA as an
out-of-market ("below the line") station \-- *i.e*.*,* one that has
historically received revenue or audience share \-- in the Fargo metro.

In proposed sales of radio stations that, like this one, are not
assigned to an Arbitron metro, we do not ordinarily subject the
transaction to a competition analysis.[^6] In this case, however, as
discussed in detail below, Holland claims that the proposed transaction
will have adverse effects on competition, particularly with respect to
Holland's KGBZ(FM). We must therefore evaluate Holland's claim prior to
determining whether or not grant of the Application is in the public
interest. In so doing, we are guided by the Commission's interim policy
governing so-called "flagged" sales transactions.[^7] Holland raises no
issues other than competition.[^8]

Holland's claim regarding adverse competitive effects is premised on
assertions that lack precision regarding the relevant geographic market
and market participants. The resulting ambiguity makes our task more
difficult, as it is not clear whether Holland is arguing that the Fargo
metro is appropriately used for our analysis of this transaction, or
whether some other unique market should be used. Holland rarely uses the
term "metro," a term the Commission has used in its numerous decisions
to describe the Arbitron-defined geographic market typically evaluated
in flagged cases. Throughout its pleadings, Holland uses a variety of
terms other than "metro," such as, for example, "the Fargo-Moorhead
radio market,"[^9] "the Arbitron radio market,"[^10] "the region,"[^11]
"Fargo/Moorhead"[^12] and several others.[^13] Holland never explains
whether it intends the same meaning by these various terms or whether
the inconsistent use of terminology is purposeful to convey different
geographic boundaries.

One might infer nonetheless from certain of Holland's statements that it
assumes that the Fargo metro is the relevant geographic market in this
case. For example, in its Petition, Holland references the presumption
under our interim policy that "the Arbitron metro market is the relevant
geographic market."[^14] Holland also cites to Arbitron's
"Fargo-Moorhead (North Dakota/Minnesota) radio market" as ranked 215^th^
in the nation, which corresponds to Arbitron's metro ranking system and
therefore, presumably, the Arbitron-defined Fargo metro.[^15] Under the
heading "Market Participants," Holland discusses and includes as an
exhibit the BIA data for the Fargo metro.[^16] Holland repeatedly cites
these BIA data and does not provide data for a larger or otherwise
different geographic area or set of market participants.[^17] Holland
states, for example, that the revenue share for Triad's five stations is
"nearly forty percent . . . of the radio revenues in the Fargo-Moorhead
radio market,"[^18] presumably meaning the Fargo *metro,* as Holland
cites in that instance to the BIA metro data, listing the five in-metro
stations Triad currently owns. Holland likewise cites to the BIA metro
data in stating that, when Triad's share is combined with that of Clear
Channel Communications, Inc. ("Clear Channel"), which owns six in-metro
stations, the total revenue share is more than 91%.[^19] Holland alleges
that the addition of KBMW(AM) to "Triad's stable . . . only can
exacerbate the revenue and audience disparity attributable to
Triad/Monterey and Clear Channel by adding more bulk to the
Triad/Monterey broadcast station cluster,"[^20] presumably referring to
the Triad/Clear Channel cluster in the metro.

At the same time, Holland makes other statements from which it would be
reasonable to conclude that Holland intends the use of some other,
perhaps larger, relevant geographic market for our analysis. Holland
notes in its Reply that the Commission determines relevant geographic
market on a case-by-case basis "without a presumption" when dealing with
a station not assigned to any Arbitron metro.[^21] The definition of
"market" for competition analyses, Holland states, "plainly is not
locked only to BIA or Arbitron data."[^22]

Holland's assertions regarding market participants are intertwined with
those concerning geographic market and are similarly imprecise. In the
initial Petition, Holland does not assert that KBMW(AM) or its current
owner participates in the Fargo metro. In rebuttal to Triad's
Opposition, Holland argues that the "fact that \[KBMW(AM)\] is not rated
. . . does not mean that \[it\] is not included in the Arbitron market
for Fargo/Moorhead."[^23] Holland further asserts that KBMW(AM)'s 0.5
mV/m contour "reaches far beyond" the cities of Fargo and Moorhead and
that the station "has carried advertising for at least a half-dozen
business enterprises that have their principal business locations in
Fargo/Moorhead."[^24] Holland thus claims that KBMW(AM) derives
advertising revenue from the "Fargo-Moorhead radio market"[^25] and
functions "as an element of" that market.[^26] According to Holland,
these facts support the argument that the proposed transaction will have
a measurable competitive impact on the "Fargo-Moorhead radio
market."[^27]

Holland also states that KBMW(AM) "is included within the Arbitron radio
market, because Wilkin County, Minnesota, is included within the
Arbitron \[Fargo-Moorhead, ND-MN Total Service Area ("TSA")\]."[^28]
Holland explains that the Arbitron-defined TSA encompasses the "'Metro
Survey Area and all adjacent counties in which Metro licensed stations
achieve the level of listening required to meet' Arbitron's TSA
qualification criteria."[^29] Triad's station KLTA(FM), also licensed to
Breckenridge in Wilkin County, "appears in BIA and Arbitron data as a
rated station in the Fargo/Moorhead market."[^30] According to Holland,
"KLTA, therefore, meets Arbitron's TSA qualification criteria, and
thereby qualifies Wilkin County, Minnesota, as an element of the
Arbitron radio market*.*"[^31] That factor in turn, Holland asserts,
"subsumes KBMW, by default, in the Fargo/Moorhead radio market."[^32]

From these statements, it is reasonable to infer Holland's belief that
because one station located in Wilkin County, KLTA(FM), is listed by BIA
as in the Fargo metro, all stations located in Wilkin County, including
KBMW(AM), are participants in the Fargo metro. Holland's statements
about the Fargo-Moorhead TSA also suggest Holland's belief that all
stations located in the TSA should be deemed participants in the metro.
The only data that Holland produces for calculating market revenue
shares, however, are for the stations reported by BIA in the Fargo
metro, as discussed above.

Triad argues that KBMW(AM) is not in the "Fargo-Moorhead metro market"
and that, therefore, its acquisition of that station cannot harm
competition there.[^33] Triad points out that none of the revenue,
audience or other market data cited by Holland pertains to KBMW(AM) or
its owner, W-B. According to Triad, Holland does not provide any support
for its "notion that KBMW has any measurable audience or revenue share
in the Fargo-Moorhead market."[^34] Regarding signal contours, Triad
notes that KBMW(AM)'s predicted 5 mV/m contour does not reach "the Fargo
metro market" and that, although its predicted 2 mV/m contour reaches
slightly into that area, it still falls about ten miles short of both
Fargo and Moorhead.[^35] Triad's engineering expert states that "KBMW
fails to place a competitive signal over any meaningful portion of \[the
Fargo\] metro area . . . ."[^36] Triad also notes that the trade press
article cited by Holland indicates "\[i\]t's a stretch to say that
KBMW-AM is in the Fargo market . . . ."[^37]

With respect to KGWB(FM), Wahpeton, North Dakota (in Richland County),
currently licensed to Guderian Broadcasting, Inc. ("GBI")**,** Holland
alleges that Triad is attempting to add further to its economic power in
the "Fargo-Moorhead radio market" through its involvement with this
station.[^38] Like KBMW(AM), KGWB(FM) is not assigned by Arbitron to any
metro and is not listed by BIA as having historically received a revenue
or listener share in the Fargo metro. Holland notes that Triad (through
a subsidiary) sells advertising time on this station pursuant to a joint
sales agreement ("JSA").[^39] Triad also has an option to buy KGWB(FM),
but is currently prohibited from owning an additional station in the
market pursuant to our local radio ownership rules, 47 C.F.R. §
73.3555(a).[^40]

While Holland concedes that the JSA is consistent with Commission rules,
Holland alleges that because KGWB(FM) "also serves the Fargo-Moorhead
radio market," the JSA has adverse implications for Triad's revenue
concentration in the market.[^41] According to Holland, this is
particularly so in light of GBI's plans to move the station's
transmitter closer to Fargo, change its frequency from 107.1 to 106.9
MHz, and upgrade it from a Class A facility to a Class C2 facility.[^42]
Holland alleges that as a result, KGWB(FM) "economically will be in
lockstep with all the Triad/Monterey stations in the Fargo-Moorhead
radio market, thereby amplifying Triad's audience, marketing, business,
and colossal economic clout."[^43] Holland asks that we set aside the
JSA or

"investigate the implications of the JSA."[^44]

Triad emphasizes that it does not own KGWB(FM) and that therefore the
licensee's relocation of the transmitter "should not be a factor in the
Commission's deliberations" on the Application.[^45] Moreover, Triad
asserts, KGWB(FM) does not participate in the Fargo metro, as
demonstrated by the BIA and Arbitron materials relied upon by
Holland.[^46] Therefore, Triad argues, the JSA with KGWB "will have no
cognizable effect on economic concentration in the Fargo-Moorhead metro
market."[^47]

**Discussion.** We reiterate that Holland's treatment of the relevant
geographic market and market participants lacks precision and clarity.
Assuming that Holland is arguing that the relevant geographic market for
evaluating the impact of this proposed transaction is the Fargo metro
and that KBMW(AM) participates in that metro, Holland has not adequately
supported such an argument. Holland has not challenged the Arbitron data
as reported by BIA, which do not include KBMW(AM) or W-B in the Fargo
metro. Nor has Holland provided alternative data or other information
sufficient to support its claim that KBMW(AM) competes with KGBZ(FM) or
other stations in the metro. The evidence regarding signal contours
establishes that KBMW(AM) reaches some listeners in the Fargo metro.
While certain enterprises in the Fargo metro might purchase advertising
time on KBMW(AM), this does not necessarily establish that Fargo
advertisers are relying on such advertising to reach Fargo metro
listeners. Rather, it is reasonable to presume that such advertising is
targeted to Breckenridge listeners. Notably, the advertisers Holland
lists as advertising on KBMW(AM) are entities that draw clientele from a
large regional area, not just from Fargo and Moorhead and communities
within the metro.[^48] Holland offers no evidence that KBMW(AM) derives
a sizable percentage of its advertising revenues from these Fargo metro
entities or has sales people devoted to the Fargo metro.

We also reject Holland's contention that KBMW(AM) is properly analogized
to KLTA(FM). KLTA(FM) operates at 100 kW, has a reportable revenue and
audience share in the Fargo metro according to BIA data, as cited by
Holland,[^49] and broadcasts from a tower five miles from the Fargo
metro. KBMW(AM), however, operates at only 1 kW, broadcasts from a tower
25-30 miles from the Fargo metro and, as Holland concedes, "does not, or
has not, achieved sufficient survey diary responses to be rated" by BIA
as being in the Fargo metro.[^50]

We further find without merit the notion that, because KLTA(FM) is in
Wilkin County, which is in Arbitron's Fargo TSA, KBMW(AM) should be
deemed a participant in the Arbitron metro. By this logic, all stations
in the TSA should be considered participants in the metro. Holland
cannot cite to any radio assignment case in which we have found it
reasonable to deem all the stations located in a TSA as participants in
a metro, and Holland does not cite to factors that provide a basis for
doing so here.[^51] Moreover, Holland has not provided revenue data for
\-- or even identified \-- all the other stations in Wilkin County, let
alone the other counties in the TSA, that would be included in our
competition analysis, even were we to adopt such an approach for this
transaction.

Assuming, arguendo, that Holland is, instead, asserting that a unique
"Fargo-Moorhead radio market" other than the Arbitron-defined Fargo
metro is the relevant geographic market for our analysis, Holland has
not provided the requisite support for such an assertion. Holland is
correct in stating that, in radio transactions involving non-Arbitron
rated stations, we are not bound by our interim policy presumptions and
may determine the relevant geographic market based on the particular
facts of the transaction. The burden, however, is on the requesting
party \-- in this case, Holland \-- to provide adequate information to
define a unique geographic market. Holland has provided no such
information. Holland also fails to provide any alternative revenue or
audience share data to assess a specific group of stations that might be
competing in a market different from the Fargo metro.

Likewise with respect to KGWB(FM), Holland has not demonstrated that
this station is properly considered a participant in the Fargo metro.
Hence, even if we were to evaluate for competition purposes Triad's
revenues earned through the JSA (which revenues Holland has, in any
event, not provided to us), such revenues are not appropriately
considered with the revenues of any in-metro stations, including
Triad's. To the extent that Holland may be arguing that we use a
different geographic market other than the metro to evaluate the impact
of the JSA, Holland has failed to provide data to establish a unique,
clearly defined geographic market in which both KBMW(AM) and KWGB(FM)
compete.

In sum, Holland has not provided any evidence to persuade us that,
contrary to the BIA data, KBMW(AM) participates in the Fargo metro.
Consequently, we conclude that the proposed assignment is not likely to
harm competition either within the metro generally or, specifically,
with respect to KGBZ(FM). Moreover, Holland has not established any
other relevant geographic market for evaluating the competitive effects
of the proposed sale of KBMW(AM). We are thus unable to conclude that
the proposed sale is likely to harm competition in any particular
market.

**Conclusion.** Based on our review of the record, we find no
substantial and material question of fact to warrant further inquiry or
designate the Application for hearing. We find that Monterey Licenses,
LLC is qualified as the assignee and that grant of the Application is
consistent with the public interest, convenience and necessity.
Accordingly, IT IS ORDERED that the application to assign the license
for station KBMW(AM), Breckenridge, Minnesota, from W-B Broadcasting,
Inc., to Monterey Licenses, LLC (File No. BAL-20020513AAO) IS GRANTED.
IT IS FURTHER ORDERED that the Petition to Dismiss or Deny the
Application, filed by Randy K. Holland Investments, LLC, IS DENIED.

Sincerely,

Peter H. Doyle, Chief

Audio Division

Media Bureau

[^1]: Throughout this decision, we generally refer to Monterey as Triad.

[^2]: On July 3, 2002, Holland filed a Motion for Extension of Time
    ("Motion") to file its Reply to the Opposition. Counsel for Triad
    and W-B raised no objection and we hereby grant the Motion. On
    September 30, 2002, Holland filed a Petition to Convert the Status
    of the Proceeding ("Petition to Convert"), asking (a) that a letter
    to Commission Chairman Michael Powell from U.S. Representative Jim
    Ramstad ("Ramstad Letter") be deemed an *ex parte* presentation in
    violation of the Commission's rules, and (b) that this proceeding be
    converted from "restricted" to "permit-but-disclose" under the
    Commission's *ex parte* rules. *See* 47 C.F.R. § 1.1200(a) *et seq.*
    On October 1, 2002, counsel for Triad filed a letter opposing the
    Petition to Convert. By letter dated November 7, 2002, the Chief,
    Audio Division, Media Bureau, denied the Petition to Convert,
    finding that the Ramstad Letter had been served on Holland and was
    not an *ex parte* presentation, and also that the public interest
    would not be served by changing the status of this proceeding.

[^3]: A metro is a metropolitan area defined by the Arbitron rating
    service, which is used by radio stations and radio advertisers in
    negotiating and determining advertising rates.

[^4]: BIA is a communications and information technology, investment
    banking, consulting, and research firm. BIA provides strategic
    funding, consulting and financial services to the
    telecommunications, Internet, and media/entertainment industries.
    Unless otherwise specified, references throughout this document to
    BIA data refer to the BIA data cited by Holland.

[^5]: These stations are KQWB(FM), KVOX(FM), KLTA(FM), KPFX(FM), and
    KQWB(AM).

[^6]: *See Rules and Policies Concerning Multiple Ownership of Radio
    Broadcast Stations in Local Markets* ("*Local Radio Ownership
    NPRM*"), 16 FCC Rcd 19861, 19895 ¶¶ 85-86 n.137.

[^7]: *Local Radio Ownership NPRM*, 16 FCC Rcd at 19894-97 ¶¶ 84-89.

[^8]: In the "Conclusion" sections of its Petition and its Reply,
    Holland also asks that we "defer consideration of the Application
    pending the outcome of the FCC's omnibus proceeding respecting the
    multiple ownership rules . . . ." Petition at 15; Reply at 11-12.
    Holland does not suggest a basis for doing so, however, and does not
    otherwise elaborate on this point. In any event, we find no grounds
    for deferral based on the evidence of record in this case.

[^9]: *See, e.g.,* Petition at i, 3; Reply at i, 5.

[^10]: *See, e.g.,* Reply at 4.

[^11]: *See, e.g.,* Petition at i, 4: Reply at ii.

[^12]: *See, e.g.,* Reply at 8.

[^13]: The other terms used by Holland are "the Fargo, North Dakota,
    area" (*e.g.*, Petition at 2), "the market" (*e.g.*, Petition at
    4-5), "the Arbitron metro market" (*e.g.,* Petition at 8), "the
    Arbitron market for Fargo/Moorhead" (*e.g.*, Reply at 5), "the
    Fargo-Moorhead market" (*e.g.*, Petition at i, 4; Reply at i), and
    "the radio market" (*e.g.*, Petition at i, 4; Reply at ii).

[^14]: Petition at 8 (citing the *Local Radio Ownership NPRM*).

[^15]: *Id.* at 1 n.1. *See also id.* at 8 n.17 (referencing other
    Arbitron-ranked metros as being distant "from Fargo").

[^16]: *Id.* at 9-10 & Exhibit 4.

[^17]: Petition at i, 4, 5 (citing also various BIA data for the Fargo
    metro to estimate the listening shares of Triad's and Clear
    Channel's stations), 9-10, 11-12 (Herfindahl-Hirschman data for
    stations in the Fargo metro); Reply at i-ii, 8.

[^18]: Petition at 5. *See also id.* at 10 (providing a chart of
    licensees and their respective revenue and audience shares as
    reported by BIA for the Fargo metro).

[^19]: Petition at i, 10; Reply at ii.

[^20]: Petition at 10.

[^21]: Reply at 3 (citing *Local Radio Ownership NPRM*, 16 FCC Rcd at
    19896 n.138).

[^22]: *Id.* at 3 (emphasis omitted) (citing *Gowdy FM 95, Inc.*, 17 FCC
    Rcd 5449, 5451 (2002) ¶ 7).

[^23]: *Id.* at 5.

[^24]: *Id.* at 6-7.

[^25]: *Id.* at i.

[^26]: *Id*. at 6.

[^27]: *Id.* at 8.

[^28]: *Id.* at 5.

[^29]: *Id.* at 4 (emphasis omitted) (citing Arbitron Radio's "May 2001
    Update," which is included as Attachment 1 to the Reply, explaining
    how Arbitron has changed its TSA qualification criteria).

[^30]: *Id.* at 4.

[^31]: *Id.*

[^32]: ^?^ *Id.* at 5.

[^33]: Opposition at 2-4.

[^34]: *Id.* at 4 (emphasis omitted).

[^35]: *Id.* at 3 n.6 and Exhibit C (Engineering Statement in Support of
    Opposition to Petition to Dismiss or Deny, by Carl E. Smith
    Consulting Engineers) ("Engineering Statement"), Figure 1.0.

[^36]: Engineering Statement at 1.

[^37]: Opposition at 3 n.6 (citing Petition, Exhibit 2, referencing
    article by Jack Messmer, *Triad Expands Fargo Cluster*, [Radio
    Business Report]{.smallcaps} (May 20, 2002)).

[^38]: Petition at 3 n.5; Reply at 8-9.

[^39]: Petition at 3, 7 n.13.

[^40]: *See id.* at 7 n.13. Triad voluntarily submitted a copy of the
    JSA and the Option agreement with the Application.

[^41]: Petition at 3-5; Reply at 8-9.

[^42]: ^?^ Petition at 3 n.5. The Commission granted a construction
    permit for these minor modifications on July 8, 2002. *See* Public
    Notice, *Broadcast Actions*, Report No. 45274, released July 11,
    2002. Holland did not contest the minor modification application.

[^43]: Petition at 12. *See also* *id.* at 3 n.5, 7 n.13; Reply at 9
    n.18.

[^44]: Petition at 4. *See also id.* at 16; Reply at 12.

[^45]: Opposition at 5.

[^46]: *Id.*

[^47]: *Id.*

[^48]: The businesses that Holland lists are a home siding company,
    motels, an entertainment arena, a large hospital and health care
    facility, a speedway, and a medical testing facility. *See* Reply at
    6. The hospital/health care facility, for example, has offices in
    more than 30 locations throughout Minnesota and North Dakota. *See*
    MeritCare, Locations,
    http://www.meritcare.com/guidebook/directories/ locationlist.asp
    (visited Nov. 20, 2002).

[^49]: Petition, Exhibit 3.

[^50]: Reply at 5.

[^51]: If Holland's intent is to assert that the relevant geographic
    market is the Fargo-Moorhead, ND-MN TSA, we note that, to date, the
    Commission has not accepted a TSA as the relevant geographic market
    in a radio station merger. *See, e.g.,* *Golden Triangle Radio,
    Inc.*, 17 FCC Rcd 5373, 5380 (2002) ¶ 22.