**DA 06-1924** *In Reply Refer to:*

1800B3-MFW

Mr. Samuel O'Brien, President

Hoyt Sherman Place Foundation

1501 Woodland Avenue

Des Moines, IA 50309

Mr. Preston Daniels

Employee & Family Resources, Inc.

Suite 930

505 Fifth Avenue

Des Moines, IA 50309

Mr. Randy Henry

Florida Public Radio, Inc.

505 Josephine Street

Titusville, FL

In re: **Hoyt Sherman Place Foundation**

**NEW (LPFM), Des Moines, IA**

**Facility ID No. 134908**

Application to Assign Construction Permit

File No. BAPL-20060216AAY

Informal Objection

Gentlemen:

This letter refers to the captioned application of Hoyt Sherman Place
Foundation ("Hoyt"), permittee of a new low power FM ("LPFM") station in
Des Moines, Iowa, to assign the permit and sell the assets of that
facility to Employee & Family Resources, Inc. ("EFR"). On March 6, 2006,
Florida Public Radio, Inc. ("FPR") filed an Informal Objection to the
assignment application (the "Objection").[^1] For the reasons set forth
below, we deny FPR's Objection and grant the assignment application.

**Discussion**. *Permit expiration*. In its Objection, FPR first argues
that the Commission cannot grant the subject assignment application
because Hoyt's construction permit for the Des Moines LPFM facility has
expired. Accordingly, states FPR, there is nothing to assign. In support
of this contention, FPR states that the construction permit for the Des
Moines facility[^2] was issued on February 27, 2004, and, pursuant to
the terms of the permit itself and Section 73.3598(a) of the
Commission's Rules,[^3] expired 18 months after that date, on or about
August 27, 2005. FPR acknowledges that the Commission has granted LPFM
permittees the opportunity to seek a waiver of the 18-month construction
deadline, even if the requirements for "tolling" the permit have not
been met,[^4] if the permittee:

> demonstrates that it cannot complete construction within the allotted
> 18 months for reasons beyond its control, that it reasonably expects
> to be able to complete construction within the additional 18 months
> that the construction permit would provide, and that the public
> interest would be served by the extension.[^5]

FPR states that "there is no record . . . that Hoyt ever sought a waiver
to extend its \[construction permit\]" and that, even if Hoyt had filed
an appropriate waiver request, there is no indication that the failure
to construct was for reasons beyond Hoyt's control.[^6]

FPR is incorrect. On August 15, 2005, Hoyt filed a request for waiver of
Section 73.3598 of the Rules. Hoyt stated that it had acquired all
necessary equipment to operate the station but would be unable to
complete construction by the expiration date because, between the time
it initially toured its proposed studio space and the time it took
possession of that property, the owner had stripped the facilities down
to the concrete walls, removing all bathrooms, carpeting, soundproofing,
etc. Hoyt indicated that it was in the process of reinstalling those
items and would be able to complete construction if granted additional
time. The waiver request, which Hoyt amended on August 16, 2005, was
unopposed. The Bureau staff granted the waiver and established February
27, 2007, three years from the date of the initial permit, as the
expiration date of the Des Moines LPFM station's construction
permit.[^7] This revised expiration date is reflected in the
Commission's CDBS data base.

*Waiver of Section 73.865*. In its Objection, FPR also argues that Hoyt
has failed to justify its request for waiver of Section 73.865 of the
Commission's Rules,[^8] which prohibits all but involuntary and *pro
forma* transfers and assignments of LPFM stations.

In the *Second Order and Further Notice*, the Commission examined the
issue of allowing LPFM permittees and licensees to assign their
authorizations, which had been prohibited in the *Report and Order*
authorizing and instituting the LPFM service.[^9] The Commission stated
that, while it considered the parameters under which LPFM stations may
be transferred or assigned, it would delegate to the Media Bureau the
authority to waive Section 73.865 of the Rules "upon a determination
that such waiver will maximize spectrum use for low power FM
operations."[^10] The Commission listed several circumstances in which
waiver might be appropriate,[^11] cautioning that the list was not
exhaustive but that, "until we have further considered the
transferability issue, we do not believe that waiver is appropriate to
permit the for-profit sale of an LPFM station to any entity or the
transfer of an LPFM station to a non-local entity or entity that owns
another LPFM station."[^12]

In the application, Hoyt indicates that it "has determined that the New
LPFM \[station\] should be owned and operated by a compatible local
organization rather than by \[Hoyt\]" and requests waiver of Section
73.865 of the Rules.[^13] The parties claim that the proposed
transaction meets all of the conditions set forth in Paragraph 20 of the
*Second Order and Further Notice*, because: (1) no payment has been made
or will be made in connection with the transaction;[^14] (2) the
assignment is to a local entity which has its headquarters in Des
Moines, within 10 miles of Hoyt's headquarters; and (3) neither EFR nor
its officers or board members have any other media interests and "all
are in compliance with all other requirements of an LPFM permittee such
as U.S. citizenship."[^15]

In its Objection, FPR argues that Hoyt has failed to justify its request
for waiver of Section 73.865 of the Rules. Based on the illustrative
list set forth in the *Second Order and Further Notice*, FPR argues that
there has been no change in Hoyt's governing board, there is no
partnership between the assignor and assignee, and this is not an
instance of a licensee's inability to continue operations, as the
transaction involves an unbuilt construction permit and there are no
operations to continue. The three factors addressed by the parties in
the waiver request are "all well and good," states FPR, but they are
insufficient to support a waiver of Section 73.865 of the Rules.[^16]

In opposition, Hoyt and EFR argue that Hoyt has, in fact, justified a
waiver of Section 73.865. They reference the language in Attachment 4 to
the application that Hoyt had determined that the new LPFM station
should be "owned and operated by a compatible local organization" rather
than by Hoyt. This determination, they state, was:

> Based primarily on the economic demands of construction and operation
> of the New LPFM \[station\] which demands could be better met by an
> organization such as EFR which is larger, has more broad-based
> community support and, consequently, more resources available to it to
> provide local programming, information and public service
> opportunities of the type originally envisioned by Hoyt. Hoyt is a
> limited-purpose entity with finite resources which its Board has
> determined must be directed to other priorities. Hoyt believes EFR is
> better situated to provide the local market with a community-oriented
> broadcast alternative of the variety and content Hoyt had
> intended.[^17]

Hoyt and EFR also state that the application meets the criteria set
forth in Paragraph 20 of the *Second Order and Further Notice.*

Hoyt and EFR amended the assignment application on May 8, 2006, to
supply additional information bearing on the request for waiver. They
indicate that the "Hoyt Sherman Place Foundation" is the organization
created to seek and provide funding for Hoyt Sherman Place, a museum and
performing arts center built in 1877 by prominent local businessman Hoyt
Sherman. When Hoyt originally filed the application, it believed "that
operation of the LPFM station could facilitate both public awareness of
Hoyt Sherman Place and its event offerings, as well as being an
additional tool to augment the fundraising activities of \[the Hoyt
Sherman Place Foundation\]."[^18] Subsequently, Hoyt determined that the
costs involved in constructing and operating the station would detract
from its core responsibilities and "create a drain on its personnel and
financial resources."[^19] It therefore agreed to convey the LPFM permit
to EFR, "an early supporter of the LPFM concept and of HSPF's efforts to
provide local, community oriented programming."[^20]

We believe that the statement in the assignment application that Hoyt
"has determined that the New LPFM \[station\] should be owned and
operated by a compatible local organization rather than by \[Hoyt\]" is
undocumented and too vague and general to justify a waiver of Section
73.865, even under the flexible standard set forth in the *Second Order
and Further Notice.* Nevertheless, the opposition pleading and the May
8, 2006, amendment to the application clearly indicate that Hoyt seeks
to assign the Des Moines LPFM permit because it cannot afford to build
and operate the station. This ground is sufficient under the *Second
Order and Further Notice* to justify waiver of Section 73.865.
Additionally, the permit is to be assigned for no consideration, and
Hoyt and EFR have demonstrated that EFR is a local entity qualified to
hold an LPFM authorization.

Moreover, we have reviewed the assignment application. We find that it
otherwise complies with all statutory and regulatory requirements, that
EFR is qualified to own and operate the Des Moines LPFM station, and
that approval of the application will further the public interest,
convenience, and necessity.

Accordingly, the March 6, 2006, Informal Objection filed by Florida
Public Radio, Inc. IS DENIED, Section 73.865 of the Commission's Rules
IS WAIVED, and the application (File No. BAPL-20060216AAY) to assign
construction permit No. BNPL-20010614AFN from Hoyt Sherman Place
Foundation to Employee & Family Resources, Inc. IS GRANTED. The
authorization is enclosed.

Sincerely,

Peter H. Doyle

Chief, Audio Division

Media Bureau

cc: Russell C. Powell, Esq.

G. Thomas Sullivan, Esq.

Gregory P. Page, Esq.

[^1]: The Objection indicates that it was served on the permittee, Hoyt.
    Hoyt and EFR jointly filed a Response to Informal Objection on April
    28, 2006.

[^2]: File No. BNPL-20010614AFN.

[^3]: 47 C.F.R. § 73.3598(a).

[^4]: *Creation of a Low Power Radio Service*, Second Order on
    Reconsideration and Further Notice of Proposed Rule Making*,* 20 FCC
    Rcd 6563, 6574 (2005) ("*Second Order and Further Notice*").

[^5]: *Id*.

[^6]: ^?^ Objection at 2.

[^7]: *Letter to Gregory P. Page, Esq.¸* Reference 1800B-IB (MB Sep. 13,
    2005).

[^8]: 47 C.F.R. §73.865.

[^9]: *Creation of a Low Power Radio Service*, Report and Order, 15 FCC
    Rcd 2205 (2000); *see also* 47 C.F.R. § 73.865 (LPFM authorizations
    may not be transferred or assigned except in cases of involuntary or
    *pro forma* transfers or assignments).

[^10]: *Second Order and Further Notice*, 20 FCC Rcd at 6571 ¶ 20.

[^11]: The Commission stated that:

    > For example, waiver may be appropriate, assuming the public
    > interest would be served, in certain circumstances: a sudden
    > change in the majority of a governing board with no change in the
    > organization's mission; development of a partnership or
    > cooperative effort between local community groups, one of which is
    > the licensee; and transfer to another local entity upon the
    > inability of the current licensee to continue operations. This is
    > not an exhaustive list of circumstances appropriate for waiver.

    *Id.*

[^12]: *Id.*

[^13]: File No. BAPL-20060216AAY, Attachment 4.

[^14]: The parties indicate that EFR is paying the expenses related to
    the filing of the assignment application. *Id.*

[^15]: *Id*. at 2.

[^16]: Objection at 5.

[^17]: Response to Informal Objection at 2.

[^18]: File No. BAPL-20060216AAY, May 8, 2006 amendment, Exhibit 1.

[^19]: *Id*.

[^20]: *Id*.