In the Matter of )

)

A.L.Z BROADCASTING, INC. )

)

) File No. BRH-970530E7

)

Application for Renewal of License ) Facility ID \# 2185

For Station KKYZ(FM) )

Sierra Vista, Arizona )

# **MEMORANDUM OPINION AND ORDER**

**Adopted:** October 23, 2000 **Released:** October 27, 2000

By the Commission:

1\. The Commission has before it an Application for Review filed July
15, 1998 by Nationwide Communication Specialists ("Nationwide").[^1]
Nationwide requests review of a June 10, 1998 letter ruling ("staff
decision") by the Chief, Audio Services Division, Mass Media Bureau
("Bureau") denying Nationwide's Informal Objection and granting the
license renewal application of A.L.Z Broadcasting, Inc. ("ALZ") for
Station KKYZ (FM), Sierra Vista, Arizona.[^2] For the reasons set forth
below, we uphold the staff decision and deny the application for review.

2\. [Background/Arguments]{.underline}. In its informal objection,
Nationwide contended that: (1) ALZ has made misrepresentations in
previous filings to the Commission; and (2) ALZ is seeking to renew a
bare license. In its Application for Review, Nationwide reiterates the
arguments raised in its informal objection and argues that the Bureau
erred in applying the legal standard for consideration of informal
objections set forth in [WWOR-TV, Inc]{.underline}., 6 FCC Rcd 193, 197
n.10 (1990).[^3]

3\. [Discussion]{.underline}. Initially, we note that this case centers
primarily on a private dispute between the parties concerning payment
for acquisition and construction of the KKYZ(FM) transmission tower.
Specifically, Nationwide claims that it spent substantial funds on
acquisition of an antenna tower, "tower shelter" (for housing the
station's transmitter), and a length of coaxial cable on behalf of ALZ,
while ALZ disavows any contractual obligation to pay Nationwide for
these items.[^4] Such disputes are within the province of a local court
of competent jurisdiction, not the Commission. [See]{.underline} [Kirk
Merkley, Receiver]{.underline}, 94 FCC 2d 829, 828 (1983); [D.H.
Overmyer]{.underline}, 94 FCC 2d 117, 123 (1983).

4\. That said, we find that Nationwide's arguments were thoroughly
considered and properly resolved by the staff. In particular, we reject
Nationwide's argument that the Bureau misapplied the legal standard for
evaluating informal objections set out in [WWOR-TV, Inc.]{.underline},
[supra]{.underline}. Nationwide claims that the Bureau disregarded
allegations of fact supported by affidavits and documentary evidence,
drawing its own "plainly incorrect inferences" even in the absence of
any rebuttal evidence from ALZ. Nationwide is incorrect. In the staff
decision, the Bureau pointed out that Nationwide had failed to present
sufficient information to raise a substantial and material question of
fact concerning grant of ALZ's application, noted deficiencies in
Nationwide's presentation, and accordingly rejected its arguments.

5\. *Misrepresentation*. Nationwide alleged three instances of
misrepresentation by ALZ: (1) ALZ misrepresented in an application for
extension of the KKYZ(FM) permit that "\$100,000 has now been spent" to
build its tower, indicating that ALZ had incurred that expense, when in
fact Nationwide had incurred the expense for the tower and attendant
coaxial cable;[^5] (2) ALZ misrepresented in its original construction
permit application that it would "install emergency generators as
required to operate the station upon failure of the commercial power
supply," when in fact no emergency generator had been installed; and (3)
ALZ misrepresented that it was financially qualified to construct the
station because ALZ principal Zumuano has not paid the money Nationwide
claims it is owed by ALZ.

6\. Regarding the first allegation, as the Bureau noted, the phrase
"\[money\] has been expended" does not "specifically aver" that ALZ, not
Nationwide, made the expenditure. In any event, ALZ clearly indicated in
an exhibit to the application that Nationwide was arranging for the
acquisition and installation of KKYZ(FM) tower and transmission
facilities, submitting a letter from Nationwide to Zumuano to that
effect as part of the application. We agree with the Bureau that with
this letter ALZ adequately disclosed the financial arrangement at issue
and thus that misrepresentation allegations surrounding the issue are
properly rejected. Regarding the second allegation, concerning ALZ's
statement that emergency generators would be installed "as required,"
the Bureau correctly noted that the statement was not of decisional
significance in the award of the KKYZ(FM) permit to ALZ. The ALZ permit
resulted from a joint settlement[^6] and therefore ALZ was not compelled
to implement the pledge. [See]{.underline} [Ruarch
Associates]{.underline}, 103 FCC 2d 1178 (1986) (it is permissible for
applicants to depart from their comparative commitments in an
application that was granted as part of a universal settlement); [^7]
[Proposals to Reform the Commission's Comparative Hearing Process to
Expedite the Resolution of Cases]{.underline}, 6 FCC Rcd 3403 (1991)
(Commission amends 47 C.F.R. §73.1620(g) to require report of deviation
from certain comparative proposals only when grant resulted from
post-designation settlement or favorable decision on comparative
grounds). In any event, Nationwide does not provide evidence that ALZ
never intended to honor its auxiliary power representation. Regarding
the third allegation, concerning ALZ's financial qualifications, the
Bureau again correctly concluded that ALZ's alleged failure to pay a
bill, even if true, does not establish that ALZ's certification that it
was financially qualified to construct KKYZ(FM) was a misrepresentation.

7\. Turning to Nationwide's bare license allegation, and setting aside
the question of whether the allegation is properly raised in the renewal
context,[^8] we note that Nationwide's claim that ALZ does not own its
tower or tower-related equipment is insufficient to establish that ALZ
has no other assets to accompany the KKYZ(FM) license. The Commission
has not considered a transaction as proposing the sale of a "bare
license" if the licensee holds rights to the accompanying station
facilities under a lease. [See]{.underline} [American Music Radio and
KHYM, Inc]{.underline}., 10 RCC Rcd 87269, 8772 (1995); [Public Service
Enterprises, Inc]{.underline}., 69 FCC 2d 967, 972-3 (1978). ALZ has
recently submitted an inventory of equipment it claims to own for use in
Sta[t]{.underline}ion KKYZ-FM operations and states that it has leased a
studio and business offices for the last three years for the
administration of Station KKYZ-FM.[^9] This list constitutes evidence of
sufficient assets to counter Nationwide's allegation.

8\. Accordingly, in light of the above discussion, IT IS ORDERED,
pursuant to authority granted by Section 5(c)(5) of the Communications
Act, 47 U.S.C. Section 155(c)(5), and Section 1.115(g) of the
Commission's Rules, 47 C.F.R. Section 1.115(g), that the application for
review filed July 15, 1998 by Nationwide Communication Specialists IS
DENIED.

###  FEDERAL COMMUNICATIONS COMMISSION

###  Magalie Román Salas

###  Secretary

[^1]: ALZ Broadcasting responded on January 27, 2000, pursuant to an
    informal staff request. The Commission, in its discretion, can
    consider this information to the extent necessary to resolve the
    instant allegations. 47 C.F.R. Section 73.3514.

[^2]: Letter to Henry E. Crawford, Esq*.*, reference 1800B3-BSH (M.M.
    Bur., June 10, 1998).

[^3]: Under [WWOR-TV]{.underline}, 6 FCC Rcd 193, 197 n.10 (1990) the
    Commission, in evaluating an informal objection under 47 C.F. R.
    Section 73.3587, will review the objectors' pleadings "to determine
    whether it has alleged properly supported facts that, if true, would
    establish a substantial and material question of fact that a grant
    of the application would be inconsistent with the public interest."

[^4]: [See]{.underline}, [e.g.]{.underline}, Informal Objection, Exhibit
    1 (July 25, 1997 Declaration of Cheryl L. Wood, General Partner,
    Nationwide), and January 27, 2000 filing containing the declaration
    of Edward Bolding, Esq., ALZ's counsel.

[^5]: The parties engage in a debate concerning a Nationwide invoice for
    \$5,032.24 which has a stamp indicating "PAID" with the handwritten
    notation "In Full." Nationwide claims that it, not ALZ paid this
    bill but that ALZ wrote "PAID" on the invoice and then submitted it
    to the Commission to demonstrate that ALZ had spent money to
    construct the station. ALZ contradicts the implication that it
    improperly wrote "PAID" on the document by submitting a photocopy of
    a three-page facsimile sent from Nationwide's Cheryl Wood to ALZ's
    Counsel Edward Bolding "paid receipt for your records" and the
    invoice in question.

[^6]: [Letter to Ana L. Zumuano and Karol E. George]{.underline},
    reference 8920-MT (M.M. Bur., August 27, 1990).

[^7]: Nationwide cites [Rem Malloy Broadcasting]{.underline}, 5 FCC Rcd
    3988 (Rev. Bd. 1990) as authority that ALZ's statements concerning
    emergency generators were of decisional significance in the award of
    the KKYZ(FM) permit to ALZ. However, [Rem Malloy
    Broadcasting]{.underline} is inapposite. In [Rem Malloy
    Broadcasting]{.underline}, the issue was whether the pledge resulted
    in a comparative advantage during a hearing. In the instant case,
    the license for WWYZ was not granted as part of a hearing. [Letter
    to Ana L. Zumano and Karol E. George]{.underline}, reference 8920-MT
    (M.M. Bur. August 29, 1990).

[^8]: Nationwide cites no cases, and we are aware of none, in which the
    Commission discussed the "bare license" policy in the context of the
    license renewal of an operating station. [See]{.underline}
    [e.g.]{.underline}, [Edward B. Mulrooney]{.underline}, 13 FCC 2d 946
    (1968), [Donald L. Horton]{.underline}, 10 FCC 2d 271, 273 (1967),
    and [Bonanza Broadcasting Corp.]{.underline}, 10 FCC 2d 906 (1967).

[^9]: [See]{.underline} January 25, 2000 filing containing the
    Declaration of Edward P. Bolding and Exhibit K.