**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+----+------------------------------+
| In re Applications of            | *  | NAL/Acct. No. 200841410021   |
|                                  | *) |                              |
| **Mid Atlantic Network, Inc.,**  | ** | FRN: 0007164544              |
|                                  |    |                              |
| Assignor                         | *  | File No. BAL-20070514AEN     |
|                                  | *) |                              |
| and                              | ** | Facility ID No. 41809        |
|                                  |    |                              |
| **Centennial Licensing II,       | *  | File No. BAL-20070514AEN     |
| L.L.C.,**                        | *) |                              |
|                                  | ** | Facility ID No. 41810        |
| Assignee                         |    |                              |
|                                  | *  | File No. BALH-20070514AEO    |
| For Consent to Assignment of     | *) |                              |
| Licenses of                      | ** | Facility ID No. 41813        |
|                                  |    |                              |
| WINC(AM), Winchester, Virginia   | *  | File No. BAL-20070514AEP     |
|                                  | *) |                              |
| WINC-FM, Winchester, Virginia    | ** | Facility ID No. 41812        |
|                                  |    |                              |
| WFVA(AM), Fredericksburg,        | *  | File No. BALH-20070514AEQ    |
| Virginia                         | *) |                              |
|                                  | ** | Facility ID No. 60363        |
| WBQB(FM), Fredericksburg,        |    |                              |
| Virginia                         | *  | File No. BALH-20070514AER    |
|                                  | *) |                              |
| WWRE(FM), Berryville, Virginia   | ** | Facility ID No. 60362        |
|                                  |    |                              |
| WWRT(FM), Strasburg, Virginia    | *  | File No. BALH-20070514AES    |
|                                  | *) |                              |
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+----------------------------------+----+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**AND**

**NOTICE OF APPARENT LIABILITY FOR FORFEITURE**

**Adopted: May 7, 2008 Released: May 8, 2008**

By the Chief, Audio Division, Media Bureau:

**I. INTRODUCTION**

1.  The Commission has before it the above-captioned applications (the
    "Applications"), as amended,[^1] of Mid Atlantic Network, Inc.,
    ("Mid Atlantic") for consent to assign to Centennial Licensing II,
    L.L.C. ("Centennial Licensing II") the licenses for the following
    stations: WINC(AM) and WINC-FM, Winchester, Virginia; WFVA(AM) and
    WBQB(FM), Fredericksburg, Virginia; WWRE(FM), Berryville, Virginia;
    and WWRT(FM), Strasburg, Virginia (collectively the "Stations"). We
    also have before us a June 18, 2007, Informal Objection
    ("Objection") filed jointly by Gary E. Burns ("Burns") and 3
    Daughters Media, Inc. ("3 Daughters" and collectively, the
    "Objectors").[^2] In this *Memorandum Opinion and Order and Notice
    of Apparent Liability for Forfeiture ("NAL")* issued pursuant to
    Sections 309(e) and 503(b) of the Communications Act of 1934, as
    amended (the "Act"), and Section 1.80 of the Commission's Rules (the
    "Rules"),[^3] by the Chief, Audio Division, Media Bureau, by
    authority delegated under Section 0.283 of the Rules,[^4] we grant
    in part and deny in part the Objection, conclude that Centennial
    Licensing II is apparently liable for a monetary forfeiture in the
    amount of eight thousand dollars (\$8,000), and grant the
    Applications as conditioned herein.

**II. BACKGROUND**

2.  Previously, Burns assigned the license of Station WLNI(FM),[^5]
    Lynchburg, Virginia, part of the Roanoke-Lynchburg Arbitron Metro
    (the "Metro Area") to Centennial Broadcasting, L.L.C. ("Centennial
    Broadcasting"), which has an attributable interest[^6] in Centennial
    Licensing II. As part of that assignment, on February 28, 2005,
    Burns, 3 Daughters' sole shareholder, officer, and director, entered
    into a "Non-Solicitation and Consulting Agreement"[^7] ("Non-Compete
    Agreement") with Centennial for which he received \$25,000 in
    additional and separate compensation.[^8] A provision in the
    Non-Compete Agreement prohibits Burns, directly or through a
    business entity, from operating a radio station in the Metro Area
    for a period of five years if the station utilizes a "format
    substantially similar" to that used by WLNI(FM) on its consummation
    date.[^9]

3.  Subsequently, 3 Daughters acquired Station WBLT(AM),[^10] Bedford,
    Virginia, also in the Metro Area, and changed its programming to a
    format which Centennial believed was in violation of the Non-Compete
    Agreement. On February 17, 2006, Centennial filed a motion in the
    United States District Court for the Western District of Virginia
    ("District Court") seeking an injunction against the Objectors. On
    March 20, 2006, the District Court issued a preliminary injunction
    against the Objectors which

    became permanent on September 29, 2006, and was affirmed, on appeal,
    by the United States Court of Appeals for the Fourth Circuit. [^11]
    The Permanent Injunction provided that:

    Burns is PERMANENTLY ENJOINED from participating in or being in any
    manner connected with the ownership, operation, management or
    control of any commercial AM or FM broadcast business at any
    broadcasting station that is included in the Roanoke-Lynchburg
    Arbitron Metro radio market for a period of five years if that
    business station uses the following programming formats \[defined in
    a footnote\]: All Talk, News/Talk, Full Service Talk or Specialized
    Talk with a focus on current events and/or politics. Defendant 3
    Daughters, Inc. is PERMANENTLY ENJOINED from the same so long as
    Gary Burns is directly or indirectly its licensee, principal, agent,
    consultant, employee, proprietor, partner, lender, shareholder,
    director, or officer.[^12]

4.  While Centennial's litigation was pending, the Objectors filed, on
    June 13, 2006, a complaint with the Enforcement Bureau (the
    "Complaint") which raises nearly identical issues as presented in
    the Objection; the Complaint was also submitted in this proceeding
    as an attachment to the Reply.[^13] Therefore, we will also consider
    the Complaint herein. The Objectors contend that, when Centennial
    sought to judicially enforce the Non-Compete Agreement's format
    restriction, it violated Section 310(d) of the Act. [^14]
    Furthermore, the Objectors argue, Centennial's violation of the Act
    is ongoing due to the District Court's Permanent Injunction
    enforcing the format restriction. Therefore, the Objectors request
    that the Commission deny the Applications, issue the maximum
    permissible forfeiture (\$325,000), and order that Centennial move
    to dissolve the Permanent Injunction, or alternatively, designate
    the Applications for hearing.

**III. DISCUSSION**

5.  Pursuant to Section 309(e) of the Act, informal objections must
    provide properly supported allegations of fact that, if true, would
    establish a substantial and material question of fact that grant of
    the application would be *prima facie* inconsistent with the public
    interest.[^15] We will consider the Objection based on this standard
    of review.

6.  *Procedural Issues.* Centennial raises two procedural issues against
    the Objection. First, Centennial argues that the Objection should be
    dismissed because "Centennial Broadcasting---the entity against
    which the allegations in the Informal Objection are directed---is
    not a party to the Applications."[^16] Centennial concedes, however,
    that Centennial Broadcasting and Centennial Broadcasting II, the
    parent of the assignee, are "affiliated."[^17] Moreover, Centennial
    admits that the original Exhibit 11 to the Applications mistakenly
    identified Centennial Broadcasting as the assignee's parent
    company.[^18] Subsequently, after Centennial corrected its error,
    the Objectors amended the Objection to include "those entities and
    individuals with attributable interests in both Centennial
    Broadcasting and Centennial Broadcasting II."[^19] Therefore, we
    find this procedural argument warrants no further consideration.

7.  Next, Centennial asserts that the doctrine of *res judicata*[^20]
    precludes the Commission's consideration of the Objection.
    Centennial contends that the District Court has previously
    considered and rejected the Objectors' argument that Centennial
    violated Section 310(d) of the Act by enforcing the Non-Compete
    Agreement.[^21] The Objectors counter that at issue before the
    District Court was the contractual enforceability of the Non-Compete
    Agreement whereas the issue before the Commission in the Objection
    is whether Centennial's enforcement of the Non-Compete Agreement
    violates Section 310(d) of the Act.

8.  In order for r*es judicat**a* to apply the following factors must be
    present:

> The prior action must have: (1) shared a common nucleus of operative
> facts with the subsequent action; (2) resulted in a final judgment on
> the merits; and (3) involved the same parties or their privies. If
> these elements are present, *res judicata* operates to bar the
> subsequent litigation not only of the claims actually litigated in the
> earlier action, but also of any claims that could have been litigated
> in the earlier action.[^22]

9.  The alleged violation of the Act is an issue separate and distinct
    from the issue of whether the Non-Compete Agreement is enforceable
    under state contract law.[^23] The Fourth Circuit acknowledged these
    distinct issues when it stated, "that a party may violate (the Act)
    by invoking equitable remedies for breach of contract without
    obtaining the FCC's consent has no bearing on the enforceability of
    the underlying contract."[^24] A review of the District Court's
    ruling plainly reveals that its decision addressed the Non-Compete
    Agreement's enforceability under Virginia state contract law and not
    the Act. For example, the District Court declared that the
    Non-Compete Agreement "clearly qualifies for the relaxed standards
    that apply in the sale of business context, and is enforceable under
    Virginia law."[^25] Moreover, the District Court, in specifically
    rejecting the Objectors' argument that the Non-Compete Agreement was
    unenforceable under state law because it violated the Act, observed:

> The FCC will not approve license applications or transfers when the
> new licensee's ability to operate a station or select programming is
> unduly inhibited by contractual terms, and will make removal of those
> terms a condition of approval. Defendant \[the Objectors\] has not,
> however, cited any cases for the proposition that FCC rules and
> decisions governing license transfers and applications -- which are
> FCC actions -- alter state contract law or are mandatory on courts. In
> *In Re Roman*, the FCC took quite the opposite position, stating,
> "Congress has not preempted the field of contracts relating to
> broadcasting \[and\] there is no conflict between State and Federal
> policy as to the covenant not to compete . . ." Indeed it is precisely
> because such terms are valid that the FCC requires that they be
> deleted from contracts . . . . If such terms were preempted and
> therefore unenforceable, there would be no need to delete them.
>
> According to Defendants, the FCC was not informed of the agreement in
> Burns' license application for WBLT(AM), and thus had no opportunity
> to pass on its appropriateness, or to demand the restriction be
> modified as a condition of licenses approval. Any conflict between his
> duties as licensee and his contractual obligations is of his own
> making and does not merit relief from the Court.[^26]

10. With regard to the breach of contract issues, the Commission's
    longstanding policy is that it will defer to courts of competent
    jurisdiction in the interpretation and enforcement of contractual
    rights between parties.[^27] The Commission has noted that "by this
    approach, we have preserved the Commission\'s exclusive authority to
    make public interest determinations on licensing matters while
    recognizing the role of state and local courts in adjudicating
    private contractual disputes."[^28] Therefore, we find that *res
    judicata* applies to the state contract issue, but it does not apply
    to the issue of whether Centennial's successful enforcement of the
    Non-Compete Agreement violates the Act.

11. *Substantive Issue.* The Objectors argue that Centennial lacks the
    requisite character to be a Commission licensee because it obtained
    unauthorized control over Station WBLT(AM) when the District Court
    granted Centennial's motion to enforce the parties' Non-Compete
    Agreement. In support, the Objectors cite the *Citicasters*
    decision, in which the Enforcement Bureau issued a \$25,000
    forfeiture "for seeking equitable relief from a court that
    effectively restricted a licensee's ability to control programming
    policies and decisions."[^29] Thus, the Objectors argue, "just as in
    *Citicasters*, Centennial initiated litigation here in an effort to
    enforce a private contract and thereby restrict 3 Daughters' ability
    to program WBLT(AM) . . . ."[^30] In addition, the Objectors cite
    *Cumulus* for the proposition that "contract provisions that contain
    radio station format restrictions . . . are impermissible because
    they deprive the licensee of control over station programming."[^31]
    According to the Objectors, "the effect of the Format Restriction
    here . . . is identical to the format restriction rejected by the
    FCC in *Cumulus* . . . ."[^32]

12. In response, Centennial argues that the Commission has previously
    approved the Non-Compete Agreement. It notes that the Non-Compete
    Agreement was submitted to the Commission in connection with the
    2004 WLNI(FM) assignment application.[^33] Moreover, Centennial
    observes that "Burns certified to the Commission \[in the
    application\] . . . that the attached Non-solicitation and
    Consulting Agreement fully complied with Commission rules and
    policies."[^34] Thus, Centennial asserts that the Commission
    approved the Non-Compete Agreement when it granted the WLNI(FM)
    assignment application. We disagree. As the Objectors note,
    Commission staff do not routinely scrutinize contracts submitted as
    part of the review of assignment applications. [^35] Hence, the
    Commission has declared that the grant of an assignment application
    does not "establish either the acceptability of a particular
    contract term or the correctness of an applicant\'s rule
    interpretation in future application proceedings. Reliance on a
    prior Commission action would be appropriate only where a decision
    disposing of the prior application plainly considered and found
    acceptable the pertinent contract term or rule interpretation."[^36]
    No such decision was issued in connection with the WLNI(FM)
    assignment application. Were the staff to have reviewed the
    Non-Compete Agreement in connection with the WLNI(FM) assignment
    application, it would have requested deletion of that contractual
    provision as in *Cumulus*. Accordingly, it is now apparent that
    Burns and Centennial Broadcasting each falsely certified that the
    contractual documents complied fully with the Commission's Rules and
    policies. However, it is well settled that the Commission's
    authority to revisit final actions is generally limited to the
    correction of ministerial errors that underlie or occur in the
    process of taking action.[^37] The decision to grant a license
    application is typically a discretionary, rather than ministerial,
    action.[^38] Accordingly and regrettably, we are without authority
    to initiate forfeiture proceedings with regard to these false
    certifications, which occurred in the context of the now-final
    proceeding granting the WLNI(FM) assignment application.
    Nevertheless, we express our strong disapprobation to Burns and
    Centennial Broadcasting for agreeing to this contract term and for
    failing to make the requisite application disclosures.   Any future
    application filed by either of these parties will be subject
    to a higher level of scrutiny.  

13. Next, Centennial contends, in *Citicasters* judicial enforcement had
    the effect of stripping the current licensee of ultimate control
    over programming at a brokered station. Here, Centennial states, the
    restrictive covenant in the Non-Compete Agreement was executed
    before 3 Daughters acquired WBLT(AM) and merely "carves out a narrow
    restriction on programming that does not approach the wholesale
    delegation addressed by the *Citicasters* decision."[^39] The degree
    to which the provision contained in the Non-Compete Agreement
    restricts 3 Daughters' control over Station WBLT(AM), while
    relevant, is not dispositive. Although there is no general
    Commission proscription on the scope of non-compete covenants,[^40]
    such agreements cannot interfere with licensee control over the
    basic operating policies of the station, i*.e*., programming,
    personnel, and finances.[^41] A licensee must retain "the ultimate
    responsibility for selecting programming material and establishing
    programming policies . . . and . . . this responsibility cannot be
    'unduly fettered by contractual arrangements restricting the
    licensee in his free exercise of his independent judgments.'"[^42]
    Under the Non-Compete Agreement, however, 3 Daughters is not
    permitted to utilize on its Station a "format substantially similar"
    to that used by WLNI(FM) on its consummation date.[^43] While we
    need not repeat the parties' arguments, detailed extensively in
    their litigation, as to what constitutes "substantially similar"
    programming, we find that the Non-Compete Agreement unquestionably
    restricts 3 Daughters' ability to control Station WBLT(AM)'s
    programming. In particular, the restriction limits 3 Daughters'
    "flexibility to address the needs and interests of its local
    communities, to react to changing audience tastes and preferences,
    to respond to other competitors in the market, and to select its
    programming accordingly."[^44]

14. We find unpersuasive Centennial's contention that the format
    restriction is permissible because it is "reasonable as to duration
    and geographic scope."[^45] In *Citicasters*, the broker's
    unauthorized control over the licensee's programming occurred over
    only three months.[^46] Similarly, in *Cumulus,* the Media Bureau
    objected to a provision that restricted the assignee from certain
    programming formats for a period of five years, the same length of
    time specified in the Non-Compete Agreement here.[^47] These
    decisions are consistent with the Commission longstanding policy
    that a licensee must "retain control over programming content at all
    times."[^48] In short, "a contract barring the use of such formats,
    even for a limited period, is impermissible."[^49]

15. Thus, we find that Centennial apparently violated Section 310(d) of
    the Act and Section 73.3540[^50] of the Rules when it sought and
    received an injunction restricting the programming format that 3
    Daughters could utilize at WBLT(AM). In this regard, we note that
    control over any one of the three areas essential to station
    operation is sufficient for a finding of an unauthorized transfer or
    an unauthorized assumption of control.[^51] The unauthorized control
    commenced on March 20, 2006, when the District Court issued the
    preliminary injunction enforcing the format restriction contained in
    the Non-Compete Agreement and continues unabated to the present.

16. *Proposed Forfeiture.* Next, having found that Centennial apparently
    violated the Act and the Rules, we must determine the appropriate
    sanction for the violations. The Objectors request that Centennial
    be cited for the maximum allowable forfeiture amount (\$325,000) and
    be ordered to move to dissolve the District Court's injunction; or
    in the alternate, that a Commission hearing be ordered to determine,
    among other things, whether Centennial possesses the requisite
    character qualifications to be a Commission licensee. In opposing
    the requested relief, Centennial notes that neither licensee in
    *Citicasters* or *Cumulus* was found to have lacked the necessary
    character qualifications. As discussed below, we believe that a
    forfeiture is appropriate in this case.

17. Under Section 503(b)(1)(B) of the Act, any person who is determined
    by the Commission to have willfully or repeatedly failed to comply
    with any provision of the Act or any rule, regulation, or order
    issued by the Commission shall be liable to the United States for a
    forfeiture penalty.[^52] Section 312(f)(1) of the Act defines
    willful as "the conscious and deliberate commission or omission of
    \[any\] act, irrespective of any intent to violate" the law.[^53]
    The legislative history to Section 312(f)(1) of the Act clarifies
    that this definition of willful applies to both Sections 312 and
    503(b) of the Act,[^54] and the Commission has so interpreted the
    term in the Section 503(b) context.[^55] Section 312(f)(2) of the
    Act provides that "\[t\]he term 'repeated,' when used with reference
    to the commission or omission of any act,

    means the commission or omission of such act more than once or, if
    such commission or omission is continuous, for more than one
    day."[^56]

18. The Commission's *Forfeiture Policy Statement* and Section
    1.80(b)(4) of the Rules establish a base forfeiture amount of
    \$8,000 for an unauthorized substantial transfer of control.[^57] In
    determining the appropriate forfeiture amount, we may adjust the
    amount upward or downward by considering the factors enumerated in
    Section 503(b)(2)(D) of the Act, including "the nature,
    circumstances, extent and gravity of the violation, and, with
    respect to the violator, the degree of culpability, any history of
    prior offenses, ability to pay, and such other matters as justice
    may require."[^58]

19. After review of the record, we find that imposition of a forfeiture
    for the base amount is warranted. As an initial matter, we note
    that, unlike *Citicasters*, where the broker obtained judicial
    enforcement of an agreement to *provide all* of the station's
    programming, here the Non-Compete Agreement does not require the
    licensee to accept a third party's programming, but instead is
    limited to restricting Station WBLT(AM)'s choice of formats. Also,
    the record indicates that Burns shares culpability with Centennial
    for the violation because he was separately compensated \$25,000 for
    agreeing to the format restriction and actively negotiated the
    unlawful provision.[^59] Moreover, Burns previously certified to the
    Commission that the Non-Compete agreement complied with the Act and
    Commission rules and policies. As a going forward matter, we caution
    all applicants that they will be held strictly accountable for
    disclosing *any* contract terms that may not fully comply with this
    Commission policy.   If any transaction agreement contains a
    provision that does not fully comply with Commission rules and
    policies, the relevant certification in the application form should
    be \"No\" and an explanatory exhibit attached. 

20. Thus, based upon the information before us and taking into
    consideration the factors expressed in Section 503(b)(2)(D)of the
    Act, we find that a forfeiture in the amount of eight thousand
    dollars (\$8,000) is appropriate. We do not find, on the basis of
    the record before us, that Centennial's actions seeking judicial
    enforcement of the Non-Compete Agreement raise a substantial and
    material question of fact regarding Centennial Licensing II's basic
    qualifications to be Commission licensee of the subject stations.
    However, we will condition the grant of the Applications on
    Centennial's compliance with the Act by taking all necessary actions
    to dissolve the Permanent Injunction against 3 Daughters and Gary
    Burns and refraining from further attempts to enforce the format
    restriction covenant in the Non-Compete Agreement.[^60]

**IV. ORDERING CLAUSES**

21. Accordingly, IT IS ORDERED, pursuant to Section 503(b) of the
    Communications Act of 1934, as amended, and Section 1.80 of the
    Commission's Rules, that Centennial Licensing II, L.L.C., is hereby
    NOTIFIED of its APPARENT LIABILITY FOR FORFEITURE in the amount of
    eight thousand dollars (\$8,000) for its apparent willful and
    repeated violation of Section 310(d) of the Communications Act of
    1934, as amended, and Section 73.3540 of the Commission's Rules.

22. IT IS FURTHER ORDERED, pursuant to Section 1.80 of the Commission's
    Rules, that, within thirty (30) days of the release date of this
    Letter*,* Centennial Licensing II, L.L.C., SHALL PAY the full amount
    of the proposed forfeiture or SHALL FILE a written statement seeking
    reduction or cancellation of the proposed forfeiture.

23. Payment of the proposed forfeiture must be made by check or similar
    instrument, payable to the order of the Federal Communications
    Commission.  The payment must include the NAL/Acct. No. and FRN No.
    referenced in the caption above.  Payment by check or money order
    may be mailed to Federal Communications Commission, at P.O. Box
    979088, St. Louis, MO  63197-9000.  Payment by overnight mail may be
    sent to U.S. Bank---Government Lockbox #979088, SL-MO-C2-GL, 1005
    Convention Plaza, St. Louis, MO  63101.  Payment by wire transfer
    may be made to ABA Number 021030004, receiving bank: TREAS NYC, BNF:
    FCC/ACV\--27000001 and account number as expressed on the remittance
    instrument.  If completing the FCC Form 159, enter the NAL/Account
    number in block number 23A (call sign/other ID), and enter the
    letters "FORF" in block number 24A (payment type code).

24. The response, if any, must be mailed to Office of the Secretary,
    Federal Communications Commission, 445 12^th^ Street, S.W.,
    Washington D.C. 20554, ATTN: Peter H. Doyle, Chief, Audio Division,
    Media Bureau, and MUST INCLUDE the NAL/Acct. No. referenced above.

25. The Commission will not consider reducing or canceling a forfeiture
    in response to a claim of inability to pay unless the respondent
    submits: (1) federal tax returns for the most recent three-year
    period; (2) financial statements prepared according to generally
    accepted accounting practices ("GAAP"); or (3) some other reliable
    and objective documentation that accurately reflects the
    respondent's current financial status. Any claim of inability to pay
    must specifically identify the basis for the claim by reference to
    the financial documentation submitted.

26. Requests for full payment of the forfeiture proposed in this *NAL*
    under the installment plan should be sent to: Associate Managing
    Director-Financial Operations, 445 12th Street, S.W., Room 1-A625,
    Washington, D.C. 20554.[^61]

27. IT IS FURTHER ORDERED IT IS ORDERED, that the Informal Objection
    filed by Gary E. Burns and 3 Daughters Media, Inc., IS GRANTED in
    part and DENIED in part.

28. IT IS FURTHER ORDERED, that the Applications (File Nos.
    BAL-20070514AEN; BALH-20070514AEO; BAL-20070514AEP;
    BALH-20070514AEQ; BALH-20070514AER and BALH-20070514AES) for consent
    to assign the licenses of Stations WINC(AM), Winchester, Virginia;
    WINC-FM, Winchester, Virginia; WFVA(AM) Fredericksburg, Virginia
    WBQB(FM), Fredericksburg, Virginia; WWRE(FM), Berryville, Virginia;
    and WWRT(FM), Strasburg, Virginia, from Mid Atlantic Network, Inc.
    to Centennial Licensing II, L.L.C., ARE GRANTED, SUBJECT TO THE
    FOLLOWING CONDITIONS:

    \(1\) That the Permanent Injunction against Gary E. Burns and 3
    Daughters Media, Inc. shall be dissolved prior to the consummation
    of the transaction approved herein, and

    \(2\) That all Centennial companies defined herein (*i.e*.,
    Centennial Broadcasting, L.L.C., Centennial Broadcasting II, L.L.C.,
    Centennial Licensing, L.L.C., and Centennial Licensing II, L.L.C.)
    all of their principals, agents, and persons or entities with
    attributable interests in any Centennial company shall refrain from
    any further attempts to enforce the format restriction covenant
    contained in the February 28, 2005, Non-Solicitation and Consulting
    Agreement by and between Centennial Broadcasting, L.L.C., and
    Gary E. Burns.

29. IT IS FURTHER ORDERED that copies of this letter shall be sent, by
    First Class and Certified Mail, Return Receipt Requested, to
    Centennial Licensing II, L.L.C., c/o Michael H. Shacter, Esquire,
    Womble Carlyle Sandridge & Rice, Seventh Floor, 1401 Eye Street,
    N.W.,Washington, DC 20005; Mid Atlantic Network, Inc., c/o David M.
    Silverman, Esquire, Davis Wright Tremaine, L.L.P., 1919 Pennsylvania
    Avenue, N.W., Suite 200,Washington, DC 20006; and Gary E. Burns and
    3 Daughters Media, Inc., c/o Mark J. Prak, Esquire, Brooks Pierce
    McLendon Humphrey & Leonard, L.L.P., Wachovia Capitol Center, Suite
    1600, P.O. Box 1800,Raleigh, NC 27602.

FEDERAL COMMUNICATIONS COMMISSION

Peter H. Doyle

Chief, Audio Division

> Media Bureau

[^1]: The applications were amended on July 6, 2007, and July 27, 2007.

[^2]: On July 6, 2007, Centennial Licensing II filed an "Opposition to
    Informal Objection" ("Opposition") to which the Objectors replied on
    July 17, 2007 ("Reply"). Later, on November 19, 2007, the Objectors
    filed a "Supplement to the Informal Objection" ("Supplement") that
    Centennial Licensing II responded to on November 21, 2007 ("Response
    Letter").

[^3]: 47 U.S.C. §§ 309(e), 503(b); 47 C.F.R. § 1.80.

[^4]: See 47 C.F.R. § 0.283.

[^5]: File No. BALH-20041110ACM. Subsequently, Centennial Broadcasting
    assigned Station WLNI(FM) to its wholly owned subsidiary Centennial
    Licensing, L.L.C. ("Centennial Licensing"). *See* File No.
    BALH-20060309AAD.

[^6]: In its July 6, 2007 amendments, Centennial Licensing II corrected
    Exhibit 11 to the Applications to identify Centennial Broadcasting
    II, L.L.C., ("Centennial Broadcasting II") as its parent company,
    rather than Centennial Broadcasting as previously listed. For
    convenience, unless referring to a specific Centennial entity only,
    we will collectively refer to the Centennial companies: "Centennial
    Licensing;" "Centennial Licensing II;" "Centennial Broadcasting;"
    and "Centennial Broadcasting II" as "Centennial."

[^7]: A copy of the Agreement was submitted in conjunction with the
    WLNI(FM) assignment application.

[^8]: Non-Compete Agreement at ¶2, Exhibit B, Objection.

[^9]: *Id*. at 1-2.

[^10]: File No. BAL-20050721ABJ.

[^11]: Exhibits C and E, Objection, (*Centennial Broadcasting, LLC v.
    Gary E. Burns; 3 Daughters Media, Inc.,* Memorandum Opinion and
    Order, CA No. 6:06-CV00006 (W.D. Va. Sep. 29, 2006) ("Permanent
    Injunction") *aff'd* No. 06-2098, slip op (4^th^ Cir. Nov. 16,
    2007)). In addition, on June 8, 2006, the District Court denied the
    Objectors' *Motion to Dissolve Preliminary Injunction,* Memorandum
    Opinion and Order, CA No. 6:06-CV00006 (W.D. Va. Jun. 8, 2006)
    ("Motion to Dissolve"), Exhibit C, Reply.

[^12]: Permanent Injunction at 22-23, Exhibit E, Objection (footnotes
    omitted).

[^13]: Exhibit A, Reply. We note that pursuant to 47 C.F.R. §
    1.1202(d)(2), the filing of the previously unserved informal
    Complaint did not create any parties (or a proceeding) for purposes
    of the *ex parte* rules.

[^14]: Section 310(d) of the Act, provides that "\[n\]o construction
    permit or station license, or any rights thereunder, shall be
    transferred, assigned, or disposed of in any manner, . . . to any
    person except upon application to the Commission and upon a finding
    by the Commission that the public interest, convenience, and
    necessity will be served thereby." 47 U.S.C. § 301(d). The authority
    to determine whether a Section 310(d) violation has occurred lies
    *exclusively* with the Commission. *See Radio Station WOW v.
    Johnson*, 326 U.S. 120, 130, 131-132 (1945). In contrast, the cases
    cited by Centennial, in its Opposition, where *res judicata* was
    applied did not concern issues under the Commission's sole
    jurisdiction. Reply at 3-4.

[^15]: 47 U.S.C. § 309(e). *See also Area Christian Television, Inc.*,
    Memorandum Opinion and Order, 60 R.R. 2d 862 (1986) (informal
    objections, like petitions to deny, must contain adequate and
    specific factual allegations sufficient to warrant the relief
    requested).

[^16]: Opposition at 3.

[^17]: *Id.* In addition, a review of the Commission's records indicates
    that both Centennial Broadcasting II and Centennial Broadcasting
    essentially share the same ownership structure. *See* Application
    File No. BOA-20070531AGW and Exhibit 11, as amended, to the
    Applications.

[^18]: Opposition at 3. *See also* note 6 *supra*.

[^19]: Reply at 3.

[^20]: *Res judicata* is a doctrine by which "the judgment, if rendered
    upon the merits, constitutes an absolute bar to a subsequent action"
    by those parties. *Teleservices Industry Association, Complainant v.
    AT&T Corp. Defendant*, Memorandum Opinion and Order, 15 FCC Rcd
    21454 (EB 2000) ("*TIA v AT&T*") quoting *Cromwell v. Sac County,*
    94 US 351, 352 (1876). *See also,* *Allen v. McCurry*, 449 U.S. 90,
    94 (1980) (\"a final judgment on the merits of an action precludes
    the parties or their privies from relitigating issues that were or
    could have been raised in that action\").

[^21]: Opposition at 3-4.

[^22]: *TIA. v AT&T*, 15 FCC Rcd at 21454.

[^23]: *See e.g .Citicasters,* Notice of Apparent Liability for
    Forfeiture, 16 FCC Rcd 3415, 3419 (EB 2001) *application for review
    denied,* 16 FCC Rcd 14137 (2001), *reconsideration denied*, 17 FCC
    Rcd 1997 (2002) ("*Citicasters*") (assessment of licensee
    obligations under the Act is not an adjudication of contractual
    rights and obligations).

[^24]: Supplement at 17 note 8.

[^25]: Permanent Injunction at 17, Exhibit E, Objection.

[^26]: *Id*. at 18-19 (footnote and citations omitted). Previously, the
    District Court considered whether to dissolve the injunction due to
    Commission precedent in *Cumulus Licensing, LLC,* Letter, 21 FCC Rcd
    2998 (MB 2006) ("*Cumulus").* *See* Motion to Dissolve at 6-7,
    Exhibit C, Reply. In *Cumulus,* the Media Bureau required the
    parties to an assignment application to delete from the purchase
    agreement a format restriction that limited the assignee's ability
    to program its newly acquired station. In dicta, the District Court
    opined that "neither the rule of *Cumulus* *Licensing* nor the
    Commission's policy concerns are applicable \[here, because\] . . .
    it is the assignor-vendor (Burns) who is subject to a restrictive
    covenant, not the assignee-vendee (Centennial)." *Id.* at 7.

[^27]: *See Abundant Life, Inc.,* Memorandum Opinion and Order, 16 FCC
    Rcd 4972, 4974 (2001), citing *North American Broadcasting, Inc.*,
    Memorandum Opinion and Order, 15 FCC 2d 979, 983 (Rev. Bd. 1969).

[^28]: *Arecibo Radio Corporation v. FCC*, Memorandum Opinion and Order,
    101 FCC 2d 545 (1985).

[^29]: Objection at 7. In *Citicasters,* the licensee for Station
    WBTJ(FM) agreed in a TBA to accept the broker's programming.
    Subsequently, after the licensee sought to terminate the TBA, the
    broker obtained a temporary restraining order requiring the licensee
    to receive court approval before providing programming on the
    Station.

[^30]: Objection at 7-8.

[^31]: *Id.* at 9.

[^32]: *Id*.

[^33]: *See supra* note 7.

[^34]: Opposition at 6.

[^35]: *1998 Biennial Regulatory Review---Streamlining of Mass Media
    Applications,* Report and Order, 13 FCC Rcd 23056, 23076 (1998).

[^36]: *Id.*

[^37]: *County of San Mateo, CA*, Memorandum Opinion and Order, 14 FCC
    Rcd 16501, 16503-04 (2001) (*citing American Trucking Ass'n v.
    Frisco Transp. Co*., 358 U.S. 133, 145-46 (1958)).

[^38]: *Id.* at 16504 (finding that grant of application was not
    ministerial and, thus, could not be reconsidered more than thirty
    days after it became final).

[^39]: Opposition at 7.

[^40]: *See e.g. Raul Santiago Roman*, Decision, 38 FCC Rcd 290, 294
    (Rev.Bd.1965) (permitting non-compete covenants where: 1) ancillary
    to the sale of a business; 2) designed to prevent a seller with an
    ongoing, competing business from impairing the value of the property
    or business sold by immediately attracting the existing customers of
    the transferred business; and 3) reasonably limited as to duration
    and geographic scope.).

[^41]: *Stereo Broadcasters, Inc.*, Memorandum Opinion and Order, 87 FCC
    2d 87 (1981), *recon denied*, 50 RR 2d 1346 (1982).

[^42]: *Cumulus*, 21 FCC Rcd at 3005 (quoting *Report on
    Editorializing*, 13 FCC 2d 1246, 1248 (1949)).

[^43]: The restriction provides:

    > Except as provided in the next sentence, Covenantor \[Burns\]
    > further agrees that at no time during the Restricted Period will
    > he directly or indirectly, whether as owner licensee, principal,
    > agent, consultant, employee, proprietor, partner, lender, or
    > shareholder, director or officer of a corporation (or similar
    > position in any other entity), or in any other capacity, other
    > than as employee or contractor of Buyer, engage in, own, manage,
    > operate, control, or otherwise participate in or be in any manner
    > connected with the ownership, operation, management or control of
    > any commercial AM or FM broadcast business at any radio
    > broadcasting station that is included in the Roanoke-Lynchburg
    > Arbitron Metro radio market *if such station utilizes a
    > programming format substantially similar to any format used by the
    > Station* \[WLNI(FM)\] *on the date Buyer acquires the Station*;
    > provided, however, that ownership of less than 5% of the
    > outstanding stock of any publicly traded corporation shall not be
    > prohibited solely by reason thereof. Covenantor's ownership and
    > operation of Radio Stations WMNA-FM and WMNA(AM), Gretna,
    > Virginia, are specifically excluded from the restrictions in this
    > paragraph.

    Non-Compete Agreement at ¶ 2, Exhibit B, Objection. (emphasis
    added).

[^44]: *See, e.g., National Ass'n for Better Broadcasting,* Letter, 55
    FCC 2d 800 (1975) ("this duty \[for programming decisions\] cannot
    be delegated and a licensee cannot, even unilaterally, foreclose its
    discretion and continuous responsibility to determine the public
    interest and operate in accordance with that determination.").

[^45]: Opposition at 8.

[^46]: 16 FCC Rcd at 3420 (violation continued from August 22, 2000,
    until November 12, 2000).

[^47]: 21 FCC Rcd at 3005.

[^48]: *Cosmopolitan Broadcasting Corp.*, Decision, 59 FCC 2d 558, 561
    (1976) (quoting *United Broadcasting of New York*, 4 RR 2d 167, 173
    (1965).

[^49]: *Cumulus*, 21 FCC Rcd at 3006.

[^50]: 47 § 73.3540.

[^51]: *See, e.g., Hicks Broadcasting of Indiana, LLC,* Hearing
    Designation Order, 13 FCC Rcd 10662, 10677 (1998) ("Control over any
    one of the areas of personnel, programming and finances would be
    sufficient for a finding of *de facto* control.").

[^52]: 47 U.S.C. § 503(b)(1)(B). *See also* 47 C.F.R. 1.80(a)(1).

[^53]: 47 U.S.C. § 312(f)(1).

[^54]: *See* H.R. Rep. No. 97-765, 97^th^ Cong. 2d Sess. 51 (1982).

[^55]: *See Southern California Broadcasting Co.*, Memorandum Opinion
    and Order, 6 FCC Rcd 4387, 4388 (1991).

[^56]: 47 U.S.C. § 312(f)(2).

[^57]: *See Forfeiture Policy Statement and Amendment of Section 1.80(b)
    of the Rules to Incorporate the Forfeiture Guidelines*, Report and
    Order, 12 FCC Rcd 17087, 17113-15 (1997) *("Forfeiture Policy
    Statement"),* *recon. denied*, 15 FCC Rcd 303 (1999); 47 C.F.R. §
    1.80(b)(4), note to paragraph (b)(4), Section I.

[^58]: 47 U.S.C. § 503(b)(2)(D); *see also Forfeiture Policy Statement,*
    12 FCC Rcd at 17100; 47 C.F.R. § 1.80(b)(4).

[^59]: The District Court, citing Burns' testimony, observed that the
    format restriction represented a "compromise, between Burns, who
    wished to continue in the radio business in his home area, and
    Centennial, which had originally proposed a non-compete prohibiting
    Burns from owning any radio stations in the area." Permanent
    Injunction at 4-5, Exhibit E.(citing Burns' Affidavit).

[^60]: Any contractual causes of actions that the parties may have
    against each other as a result of our decision should be presented
    to a court of competent jurisdiction. *See supra* note 27.

[^61]: *See* 47 C.F.R. § 1.1914.