**DA 06-1740**

***In Reply Refer to:***

1800B3-PHD

Released: September 1, 2006

Peter Jacob Riehm, Esq.

Wiley, Rein & Fielding

1776 K Street, NW

Washington, DC 20006

In re: KGNC(AM)/-FM, Amarillo, TX

File Nos. BR-20050401BAJ

BRH-20050401BAH

Facility ID Nos: 63159 and 63161

Dear Mr. Riehm:

We have before us the referenced applications (the "Renewal
Applications") of MCC Radio, LLC ("Morris") for the renewal of the
station licenses of KGNC(AM) and KGNC-FM, Amarillo, Texas. Also before
us is a Morris "Statement Concerning Compliance With Local Ownership
Rules." The Statement is filed in connection with a joint sales
agreement (the "KXGL JSA") between Morris and JMJ Broadcasting Company,
Inc. ("JMJ"), the licensee of KXGL(FM), Amarillo, Texas. For the reasons
set forth below, we will defer the requirement to terminate the KXGL JSA
or otherwise come into compliance with the Commission's ownership rules
until six months after the outcome of the Commission's ownership
proceeding now on remand from the Third Circuit.

**Background.** A Morris affiliate publishes the *Amarillo Globe-News.*
In 1996, the Commission granted Morris a waiver to permit the temporary
common ownership of KGNC(AM) and KGNC-FM (collectively, the "Stations")
and the *Amarillo Globe-News.*[^1] Subsequently, the Mass Media Bureau
extended the waiver, conditioning any potential divestiture of the
Stations on the outcome of a *Notice of Inquiry* on newspaper/radio
cross-ownership.[^2] Thereafter, the Commission terminated that
proceeding but extended the Morris waiver and other similar
cross-ownership waivers subject to the outcome of the
newspaper/broadcast rule making commenced in 2001.[^3]

Morris and JMJ entered in the KXGL JSA in 2002, prior to the
Commission's 2003 order which made certain joint sales agreements
("JSAs") attributable for certain purposes.[^4] Based on this *2002
Biennial Review Order* and the Third Circuit's partial lifting of its
stay on the effectiveness of the order a year later, radio stations must
terminate non-rule compliant JSAs by September 3, 2006.[^5] Morris
contends that the KXGL JSA is not attributable for the purpose of the
newspaper/broadcast cross-ownership restriction. Rather, it argues that
the JSA rule, as set forth in Note 2(k) to Section 73.3555, applies only
to the local radio ownership and the stayed cross-media limit rules. In
this regard, Morris notes that it complies with the local radio
ownership limit in Amarillo when the KXGL JSA is treated as such a
cognizable interest. Morris holds interests in 2 FMs and 1 AM in the
28-station Amarillo market, significantly fewer than the six stations,
including four same-service stations, permitted in this Arbitron-rated
market.

Morris argues in the alternative that were the Commission to deem the
KXGL JSA attributable for purposes of the current newspaper/radio
cross-ownership rule, good cause exists to waive or stay the effective
date of any termination deadline. It claims that the current rule is
likely to be eliminated or relaxed in the near future, thus eliminating
the need for contract termination. It also contends that a waiver or
stay would promote localism and diversity, and that JSA termination
would threaten the continued financial stability of KXGL(FM).

**Discussion.** It is undisputed that the KXGL JSA is attributable for
the purpose of determining whether Morris's cognizable interests in the
Amarillo market comply with our local radio ownership limits. We agree
with Morris that when so treated, Morris complies with the rule. Thus,
termination of the KXGL JSA on this basis is not required.

However, the pendency of the Renewal Applications creates an additional
issue. The Renewal Applications provide the first opportunity to pass on
the newly attributable cross-ownership interest. We find, consistent
with the policy that the Commission has followed for over thirty years,
that we should do so. Thus, grant of the Renewal Applications requires
either termination of the JSA or a waiver of the rule prohibiting any
party from holding an attributable interest in a daily newspaper and a
radio station.[^6]

A waiver is appropriate only if special circumstances warrant a
deviation from the general rule and such deviation will serve the public
interest.[^7] Moreover, when the Commission waives a rule it must
explain why the waiver would not undermine the policy served by the
rule.[^8] We are persuaded that a waiver would maintain a competitive
local radio market, while promoting localism and diversity. The Amarillo
radio market has three competitive, dominant owners: Clear Channel
Communications Inc., with 4 FMs and one AM (23 percent market revenue
share); Cumulus Media Inc., with 4 FMs and 2 AMs (29.2 percent), and
Morris, with 1 FM, 1 FM JSA, and 1 AM (36.3 percent). Thus, waiver of
the JSA termination requirement does not raise local radio market
competitive concerns.

KXGL(FM) is the sole station owned by JMJ in the Amarillo market. JMJ
entered into the KXGL JSA shortly after emerging from receivership.
Since that time Morris states that the station has emerged as a strong,
independent voice in the Amarillo market. JMJ is solely responsible for
all programming decisions. It employs a full-time news correspondent and
airs live newscasts twice hourly during both the morning and afternoon
drive time programming segments. It employs a live announcer during all
air shifts. Over the past four years it has an exemplary record of
sponsoring and promoting a wide range of social service, fraternal, and
charitable organizations and activities. We find credible Morris's
contention that the JSA has permitted KXGL(FM) to become a significant
voice in the Amarillo radio market and community.

**Conclusion.** Based on our review of the Renewal Applications, we find
no evidence of serious violations of the Act or the Commission's Rules
or of other violations that, when considered together, evidence a
pattern of abuse. Further, we find that Stations KGNC(AM) and KGNC-FM
have served the public interest, convenience, and necessity during their
respective license terms. Thus, there is no need for further inquiry
regarding grant of the Renewal Applications and we will grant those
applications.[^9]

Accordingly, IT IS ORDERED, that Section 73.3555(d) of the Commission's
rules is waived to the extent indicated herein. IT IS FURTHER ORDERED,
that the requirements that Morris Radio, LLC divest stations KNGC(AM)
and KNGC-FM, and that Morris terminate the Joint Sales Agreement with
JMJ Broadcasting Company, Inc. or otherwise come into compliance with
the Commission's rules, ARE DEFERRED for a period up to six months after
the effective date of the Commission's action in MM Docket Nos. 00-244,
01-317, 01-235, 02-277, and MB Docket No. 06-121. IT IS FURTHER ORDERED,
that the applications for renewal of license for Stations KGNC(AM) (File
No. BR-20050401BAJ) and KGNC-FM (File No. BRH-20050401BAH) ARE GRANTED.

Sincerely,

Peter H. Doyle

Chief, Audio Division

Media Bureau

cc: JMJ Broadcasting Company, Inc.

[^1]: *See Stauffer Amarillo Radio Trust,* Memorandum Opinion and Order,
    11 FCC Rcd 14865, 14868 (1996).

[^2]: *See Letter to James Bayes,* Ref. 1800-IB (MMB Aug. 11, 1997).

[^3]: *See Cross-Ownership of Broadcast Stations and Newspapers;
    Newspaper/Radio Cross-Ownership Waiver Policy,* Order and Notice of
    Proposed Rule Making, 16 FCC Rcd 17283, 17286 n.16 (2001).

[^4]: *See 2002 Biennial Regulatory Review -- Review of the Commission's
    Broadcast Ownership Rules and Other Rules Adopted Pursuant to
    Section 202 of the Telecommunications Act of 1996*, 18 FCC Rcd
    13620, 13746 (2003) ("*2002 Biennial Review Order*"), *aff'd in part
    and remanded in part, Prometheus Radio Project, et al. v. FCC*, 373
    F.3d 372 (2004) ("*Prometheus*"), *stay modified on rehearing*, No.
    03-3388 (3d Cir. Sep. 3, 2004) ("*Prometheus Rehearing Order*"),
    *cert. denied*, 73 U.S.L.W. 3466 (U.S. June 13, 2005) (Nos. 04-1020,
    04-1033, 04-1036, 04-1045, 04-1168, and 04-1177). The Commission
    recently issued a Further Notice of Proposed Rule Making in response
    to *Prometheus*. *See 2006 Quadrennial Regulatory Review -- Review
    of the Commission's Broadcast Ownership Rules and Other Rules
    Adopted Pursuant to Section 202 of the Telecommunications Act of
    1996*, FCC 06-93 (rel. July 24, 2006) (*"2006 Quadrennial Review
    NPRM")*.

[^5]: *See Prometheus Rehearing Order. See also Media Bureau Announces
    Requirement to File Certain Radio Joint Sales Agreements,* Public
    Notice, 20 FCC Rcd 1 n.8 (MB 2005).

[^6]: *See* 47 C.F.R. § 73.3555(d) (2002) (prohibiting the grant of any
    license if a party holds both an interest in the licensee entity and
    a daily newspaper published in the same community).

[^7]: *Northeast Cellular Telephone Co. v. FCC,* 897 F.2d 1164, 1166
    (D.C. Cir. 1990) (*citing WAIT Radio v. FCC,* 418 F.2d 1153, 1157-59
    (D.C. Cir 1969). *See also Industrial Broadcasting Co. v. FCC,* 437
    F.2d 680 (D.C. Cir. 1970).

[^8]: *See WAIT Radio v. FCC,* 418 F.2d at 1157.

[^9]: *See* 47 U.S.C. § 309(k).