This document is saved at http://www.fcc.gov/mmb/asd/decdoc/letter/1997--03--11--wjrz.html

IMPORTANT NOTE:: This document was originally prepared in Word Perfect 5.1. If the original document contained special formatting, such as boldface or italics, that information is missing from this version. Footnotes will show up in the text as (FNnumber), with the footnotes being replicated at the end of the document. Spacing, margins, tabs, page numbers, etc. may be changed too. If you need the complete document, download the Word Perfect 5.1 version.

                                Before the
                     Federal Communications Commission
                          Washington, D.C. 20554

In re Applications of                )
                                     )
KNOX BROADCASTING, INC.              )       File No. BMP-920528DA
                                     )
For Extension and Modification of                   File No. BMP-950125AB)
Construction Permit for Unbuilt Station)
WJRZ(AM), Toms River, New Jersey     )
                                     

                      MEMORANDUM OPINION AND ORDER


   Adopted:  February 20, 1997                                             Released: March 11, 1997

     By the Commission:

     1.  The Commission has before it an October 23, 1995 Petition for Reconsideration
(the
"Petition") filed by the New Jersey Broadcasters Association ("NJBA") and an October 23,
1995
Application for Review filed by Knox Broadcasting, Inc. ("Knox"), the licensee of
WJRZ-FM
and former permittee of WJRZ(AM), both Toms River, New Jersey.(FN1)  NJBA seeks
reconsideration and Knox seeks review of a September 14, 1995 letter decision (the "Letter
Decision") denying the above-referenced application of Knox to extend the construction
permit
for unbuilt station WJRZ(AM), Toms River, New Jersey (the "Station") and dismissing as
moot
the above-referenced  modification of permit application.  Global Radio, L.L.C. ("Global")
and
Interstate Broadcasting Company, Inc. ("Interstate") each filed oppositions to the Petition
for
Reconsideration and Application for Review.  For the reasons set forth below, we dismiss
the
Petition for Reconsideration and deny the Application for Review.(FN2)

                             Procedural Issues

     2.  NJBA is a trade association comprised of "virtually all" the radio and television
stations licensed to New Jersey communities.    Global contends, and we agree, that
NJBA's
Petition does not comply with the verification requirements of Section 1.52 of the
Commission's
rules.  Under this provision, a pro se petitioner must submit a declaration made before a
duly
authorized officer, e.g., a notary public, stating that the contents of the petition are true. 
Although some case precedent suggests that the Commission will not waive the verification
requirement, e.g., Belo Broadcasting Corporation, 39 RR2d 899, 901 n.4 (ALJ 1977), Section
1.3
of the Commission's rules plainly permits a waiver of any rule for "good cause shown."  47
C.F.R.  1.3.  In fact, the Commission has waived this requirement.  See, e.g., Lake City,
South
Carolina, 47 FCC 2d 1067, 1069 (1974).  We remind NJBA that our rules require a party
not
represented by an attorney to verify pleadings but find that waiver of Section 1.52 is
warranted
to permit thorough consideration of the issues raised in the proceeding.

     3.  Global also contends that NJBA has failed to show why it was not possible for
NJBA
to participate as a party in the initial stage of the proceeding or how its interests would be
adversely affected by the Letter Decision, as 47 C.F.R.  1.106 requires.  NJBA's failure to
participate in this case at the time the staff initially considered the application does not bar
the
association from seeking reconsideration of the staff action. The filing of a petition to deny
establishes a filer's "party" status, provided that the filer satisfies statutory requirements. 
See 47
U.S.C.  309(d)(1).  This option was not available to NJBA because a petition to deny does
not
lie against an extension of permit application. See  47 U.S.C.  309(c)(2)(D); 47 C.F.R. 
73.3584(a).  In any event, NJBA advocates the grant, not denial, of the application to
extend the
WJRZ permit.  However, had NJBA filed comments in support of the extension
application, this
action would not permit us to treat NJBA as a "party to the proceeding" for purposes of 47
C.F.R.  1.106 or 47 U.S.C.  405.  See, e.g., Dick Broadcasting Company, 8 FCC Rcd
3897,
3897 (1993) (finding that informal objector does not have "party" status to seek
reconsideration).(FN3)  Because the Communications Act of 1934, as amended, and the
rules
limit the opportunity for interested persons to participate, the Commission has permitted a
petitioner to contest matters relating to an extension of permit application on
reconsideration
when it had not participated previously.  See Rainbow Broadcasting Company, 9 FCC Rcd
2839,
2844 n.24 (1994) ("Rainbow Broadcasting Company I") (subsequent history omitted)
(finding that
existing station in market has standing to seek reconsideration of grant of extension
application
where no timely informal objection filed and no formal pleading schedule established).

     4.  Moreover, as a general matter, a trade association has standing to act on behalf of a
member where the association alleges that its member would suffer an injury as a result of
the
challenged action, and the injury is of a sort that would make out a justiciable case had an
association member challenged the action directly.  See Warth v. Seldin, 422 U.S. 490, 511
(1975); Office of Communication of the United Church of Christ v. FCC, 359 F.2d 999
(D.C.
Cir. 1966).  Here, any existing station in the market would have standing to seek
reconsideration
under the aggrieved/adversely affected test.  See FCC v. Sanders Bros., 309 U.S. 470 (1940). 
However, we have required associations to submit affidavits from local residents or
competitors
to meet the "party in interest" statutory threshold.  Eagle Radio, Inc., 9 FCC Rcd 836, 839
(1994)
(resident); Robert J. Maccini, Receiver, 10 FCC Rcd 9376 (1995) (competitor).  NJBA failed
to
include such an affidavit and its petition is dismissed.  See San  Luis Obispo Limited
Partnership,
11 FCC Rcd 9616 (1996) (dismissing petition for reconsideration where informal objector
fails
to establish in reconisderation petition that its interests were adversely affected by decision
below).

                                Background

     5.  Knox obtained the construction permit for unbuilt station WJRZ(AM) from its
predecessor in interest upon the Commission's December 28, 1990 grant of the parties'
assignment application.  See FCC Public Notice, Report No. 21021, released January 3,
1991. 
Two months later Knox filed an application to modify the construction permit.  On June
10, 1991
the Commission granted Knox's application to specify a new transmitter site and otherwise
modify the unbuilt WJRZ(AM) technical facilities.  The new construction permit gave
Knox
twelve months, until June 10, 1992,(FN4) to complete construction even though the rules
require
only a six-month authorization.  See 47 C.F.R.   73.3535(c).  On May 28, 1992 Knox filed
an
extension of permit application in which it stated it was "awaiting receipt" of the local
zoning
permit and pledged to order transmission equipment as soon as the "local authorization is
received."  A July 27, 1992 amendment predicted receipt of the local permit by July 31,
1992
and commencement of tower construction on "about  September 1, 1992."  In November
1994,
Knox filed a further amendment which disclosed, inter alia, its intention to propose
construction
at a new site.  Knox filed the associated modification of permit application on January 25,
1995.

     6.  Knox contends that the Letter Decision misapprehends its zoning argument.  Knox
maintains that in 1992 it diligently sought a permit from the Dover Township, New Jersey
Planning Board for the facilities specified in its then outstanding construction permit.  It
argues
that the award of the local permit just five weeks prior to the expiration of the WJRZ(AM)
permit prevented timely construction and therefore, that an extension is warranted. 
Secondly,
Knox argues that the Commission should credit certain steps it took toward construction at
a new
site after expiration of its permit.  These efforts were first disclosed in a November 1994
amendment (the "1994 Amendment") which revealed that Knox had failed to obtain a
reduction
in the purchase price of the authorized site and lacked sufficient funds to acquire this
property
during the construction period.  Subsequently, at some unspecified time following the
expiration
of the WJRZ(AM) permit, Knox succeeded in finding an alternative site at which it could
collocate its AM facilities with WJRZ-FM.  Knox claims to have nearly completed
construction
of its technical facilities at its proposed but as yet unauthorized site.  In all, Knox asserts
that it
has spent more than $400,000 to acquire the WJRZ(AM) permit, in unsuccessfully seeking
local
approval to construct at its authorized site, and to conduct field tests and substantially
construct
the Station at its new site.  Finally, Knox claims that its loss of financing constitutes an
additional
"circumstance beyond its control" which warrants extension of the WJRZ(AM) permit. 
The bank
on which Knox was relying for construction financing was declared insolvent in May 1991,
placed in receivership and sold to another financial institution which withdrew the loan
commitment in December 1991.  Although Knox provides no information about new
financing
sources, it claims to have sufficient funds to finish construction at the new site.

                                Discussion

     7.  The proper time frame for evaluating construction efforts is the most recent
construction period.  Rainbow Broadcasting Company I, 9 FCC Rcd at 2846-47; Rainbow
Broadcasting Company, 11 FCC Rcd 1167, 1167-68 and cases cited at n.7 (1995) ("Rainbow
Broadcasting Company II").  This policy is intended to safeguard the integrity of our
broadcast
station construction policy under which permittees are expected to construct and initiate
broadcast
operations promptly.  Construction activities during a post-authorization period are
undertaken
at a permittee's risk and are "simply...not germane" to the decision whether to grant an
extension
application.  Rainbow Broadcasting Company II, 11 FCC Rcd at 1168.  Moreover, the
Commission's consistent adherence to this policy has passed judicial muster.  Miami MDS
Company v. FCC, 14 F.3d 658, 660-61 (D.C. Cir. 1994).  Accordingly, our consideration of
the
WJRZ(AM) permit extension request is based on the actions which Knox took between
June 10,
1991 and June 10, 1992 to initiate broadcast operations.  

     8.  Zoning Issues.  Knox has failed by a significant margin to establish, pursuant to 47
C.F.R.  73.3534(b)(3), that it "has taken all possible steps to expeditiously resolve" all
problems
and proceed with construction.  To the contrary, Knox's responses to its zoning and
financing
difficulties evidence a lack of diligence.  Knox did not apply to the Dover Township
Planning
Board for a conditional use permit to construct its authorized facilities until January 10,
1992,
a full seven months after the grant of the modification application.  Two months later, on
March
5, 1992, Knox amended its use permit application.  Knox contends that prior to applying
for the
use permit it developed site plans and sought a number of other local approvals.  It
provides no
additional information or documentation regarding these efforts, such as the dates it applied
for
and obtained these consents or the complexity of the application process before each
jurisdiction. 
Knox also fails to explain why almost nine months elapsed before it was able to perfect the
conditional use permit application.

     9.  Moreover, Knox has been less than clear or consistent regarding the local zoning
approval process.  The extension application states that the local planning and zoning board
"approved" station construction on May 11, 1992, but that Knox was "still awaiting
receipt...of
the actual written permit....That permit is expected shortly."  Exhibit 1 to Extension
Application
(emphasis added).  An amendment filed two months later stated that "the permit is
expected
before July 31, 1992."  However, Knox also disclosed in its Opposition to Informal
Objection
that the planning board withheld final action on the permit application pending Knox's
satisfaction of certain conditions.  Knox concedes that it did not satisfy these requirements,
and
thus, that it never actually received zoning approval.  We are unable to conclude on this
record
that Knox diligently sought to resolve zoning problems during the construction period. 
See
Carolyn S. Hagedorn, 11 FCC Rcd 1695, 1696 (1996) (applicant must make specific and
detailed
showing or bear the risk that extension will be denied).

     10.  Progress Toward Construction.  Knox undertook certain construction efforts after
the WJRZ(AM) construction permit expired.  It contends that these actions weigh in favor
of
reversing the staff's action canceling the permit.  Knox argues that the Commission should
consider post-authorization construction where, as here, (1) an extension application
remains
pending for a substantial period of time and the cessation of construction efforts would be
"counterproductive;" and (2) the Commission "participates in, authorizes, and encourages"
post-
authorization construction-related expenditures.

     11.  We agree with Knox that the extension request was not processed promptly.  It
also
appears that Knox spent considerable sums to acquire the WJRZ(AM) permit.  While we
do not
condone staff processing delays, the Court in similar circumstances has directed the
Commission
to apply the one-in-three test under Section 73.3534 without regard to whether there has
been a
delay in processing.  Press Broadcasting Company v. FCC, 59 F.3d 1365, 1372 (D.C. Cir.
1995).
In that case, two years elapsed between the filing and denial of a sixth permit extension
request. 
During this post-authorization period, the permittee constructed a transmitter building and
initiated
litigation to secure a preferred position on an existing broadcast tower.  With regard to
WJRZ(AM), the extension application remained pending over three years during which
time Knox
purchased studio equipment and transmission system components, and incurred engineering
and
legal expenses.  On these analogous facts we follow the stated policy which "is expressly
designed to discourage applicants from attempting to rely on [post-authorization
construction]
efforts as a means to persuade the agency to grant extension requests,"  Rainbow II, 11
FCC Rcd
at 1167 (citations omitted), and do not consider Knox's post-June 10, 1992 efforts.  Having
undertaken no construction during the pendency of the WJRZ(AM) permit, Knox is not
entitled
to a permit extension on the basis of "substantial progress."  See 47 C.F.R.   73.3534(b)(2). 
It
would be particularly inappropriate to credit Knox's construction efforts in this case
because those
efforts relate to construction at the site specified in its pending modification application. 
See
Mansfield Christian School, 10 FCC Rcd 12589, 12590 (1995) (finding that proposed site
activities "not relevant" to evaluating construction efforts "especially where the applicant
has
taken no other steps toward constructing the authorized facility"); Community Service
Telecasters,
Inc., 6 FCC Rcd 6026, 6030 (1991) (rejecting preferred site activities).

     12.  Knox's list of other claimed expenses is, in general, of little support to its
argument. 
Knox now desires to collocate the WJRZ(AM) and WJRZ-FM studios and to utilize an
existing
tower for the WJRZ(AM) transmission facilities.  Knox has made no effort to document
construction expenditures tied specifically to the AM station.  It lists equipment purchases
of only
$25,000.  "Acquisition" expenditures of approximately $198,000 presumably relate to the
assignment to Knox of the WJRZ(AM) permit and therefore appear to constitute an
expense
which was incurred prior to the final construction period.  More generally, Knox has not
attempted to allocate to the periods before, during, and after the final construction period
the
remainder of its stated (but unsupported) expenditures of $402,000.  We are unable on this
record
to meaningfully assess Knox's post-authorization construction activities.

     13.  Moreover, we reject Knox's contentions that because it received a special field test
authorization ("SFTA") in 1994, it should face lesser burdens under Section 73.3534 and
that this
staff action creates equities in its favor.  We recognize that after receiving the SFTA, Knox
expended additional funds to conduct signal propagation studies at its proposed site.  Knox,
however, has made no effort to separate field test expenses which we believe could not
constitute
more than a minute fraction of the undocumented WJRZ(AM) construction expenditures it
claims. 
SFTAs, which are routinely granted by the staff, can be used to calculate ground
conductivities
and to determine technically acceptable station operating parameters.  The collection of this
technical data is not, however, relevant to the permit extension issues now before us.

     14.  Loss of Financing.  As noted above, the 1994 Amendment, filed more than two
years after Knox submitted the extension application seeking an extension of time to
construct
at its authorized site, revealed that in May 1991 the bank on which it was relying for
financing
had failed and that in December 1991 the acquiring bank formally rescinded the Knox loan
commitment.  1994 Amendment at 3.  Thus, Knox was financially incapable of closing on
the
acquisition of its proposed site when it received conditional zoning approval in May 1992. 
As
a result, it declined to satisfy a number of zoning approval conditions because certain of
these
required cash expenditures.  See Opposition to Informal Objection at 6-8.  The Letter
Decision
concluded that the business decision to conserve resources did not constitute a reason
beyond
Knox's control which would justify an extension of the permit under Section 73.3534(b)(3). 
See
New Orleans Channel 20, Inc., 100 FCC 2d 1401 (M.M.Bur. 1985), rev. denied, 104 FCC
2d
304, 313 (1986), aff'd 830 F.2d 361 (D.C. Cir. 1987); New Dawn Broadcasting, 63 RR2d
1198,
1199 (1987).

     15.  In its Application for Review, Knox renews the argument, first raised in the 1994
Amendment, that the loss of financing constituted an additional circumstance beyond its
control
warranting an extension of the WJRZ(AM) construction permit.  It contends that it
showed
diligence in its unsuccessful efforts to obtain financing from the successor bank and in
retaining
Media Services Group, Inc. to prepare and submit loan application packages to lending
institutions.  Knox claims that this entity distributed to "many major" but unnamed
lenders an
offering statement.  It also alleges, without providing any detailed information or
supporting
documentation, that the Knox principals sought other potential financing sources during
this
period.  These efforts proved unsuccessful.  Knox now claims that financing is available to
complete construction at its proposed site.

     16.  The Commission has repeatedly held that the unavailability of funds is not
considered
a circumstance "beyond the control" of a permittee and does not, therefore, justify
extension of
a construction permit.  See, e.g., Revision of FCC Form 301, 50 RR2d 381 (1981).  Nor
does
the collapse of financial arrangements, of itself, constitute a sufficient reason for not
building. 
E.g., High Point Community Television, Inc., 2 FCC Rcd. 2506, 2507 (1987).  We have
previously held that while a bank collapse may constitute a circumstance beyond the
permittee's
control, it "can rely on that fact to support [an] extension request only if [it] took all
possible
steps to resolve the problem and proceed with construction."  L.E.O. Broadcasting, Inc., 2
FCC
Rcd 1810, 1811 (M.M. Bur. 1987).  Knox's efforts were both tardy and insufficient. 
Horseshoe
Bay Centex Broadcasting Co., 5 FCC Rcd 7125 (1990) is plainly distinguishable on its facts. 
In
that case we extended an authorization where the permittee demonstrated, through the
submission
of voluminous documentation, that it had made "diligent and continual attempts to
complete
construction," id. at 7128, including obtaining a second loan commitment, initiating loan
discussion with two additional banks, constructing an access road, remodelling studio
facilities
and ordering transmitter and antenna during the authorization period.  Here, Knox made
very
limited efforts to obtain new financing.  Its proposal to the successor bank was denied. 
The
offering statement was published in May 1992, just one month prior to the permit's
expiration. 
Thus, it is unclear the extent to which Knox distributed these statements or engaged in
serious
follow-up discussions with new potential lenders during the construction period.

     17.  Section 73.1015 Violations.  In addition, we are troubled by the timing and content
of Knox's disclosures regarding its financing, the local zoning approval process, and
construction
time frames.  As of May 1991, several weeks prior to the grant of the modification
application,
Knox knew or should have known that its financing was, at best, uncertain.  Moreover,
there is
no question that Knox lost its financing no later than December 1991.  Nevertheless, Knox
stated
in the May 28, 1992 extension application that construction could be completed "within six
months of obtaining all approvals."  Extension Application, Question 6(c).  In the
Opposition to
Informal Objection Knox asserted that it "could on very short notice" comply with all
outstanding
land use issues.  Opposition to Informal Objection at 7.  However, Knox declined to satisfy
the
conditions imposed by the local zoning authority for a "simple" reason -- it "was unable to
purchase the site for which the Development Permit was sought."  Id.  We have difficulty
reconciling Knox's several assertions predicting receipt of final local approval with the fact
that
at the time these representations were made, Knox had decided not to take the very steps
necessary to complete the permitting process.  It is equally difficult to harmonize Knox's
six-
month construction time frame estimate with the fact that Knox lacked funding to acquire
the
authorized site or build the Station at the time the extension application setting forth this
estimate
was filed.

     18.  We are equally concerned by Knox's tardy disclosure of the collapse of its financial
plan.  Question 7(a) of FCC Form 307 requires an applicant for extension of a broadcast
construction permit to disclose the "reasons why construction has not been completed." 
Question
8 asks whether "all representations" in the underlying construction permit application are
true and
correct.  This includes the financial certification that "net liquid assets are on hand or that
sufficient funds are available from committed sources to construct and operate..." the
subject
station.  As discussed above, the specific dimensions of Knox's precarious financing were
only
disclosed in the 1994 Amendment, more than two years after the extension application was
filed.

     19.  As Knox asserts, and it appears to be the case, the cancellation of the WJRZ(AM)
loan commitment was the primary reason why station construction was not completed. 
An
applicant is required to be "fully forthcoming as to all facts and information relevant" to its
application.  Swan Creek Communications v. FCC, 39 F.3d 1217, 1222 (D.C. Cir. 1994). 
On
the record before us, we find that Knox was less than fully candid regarding the
prosecution of
local zoning approvals and its ability to construct WJRZ(AM).  Knox's failure to disclose
in
response to Question 7(a) of the extension application that it was without construction
financing
for at least the second half of the final authorization period as well as its affirmation of the
continuing accuracy of all information in the construction permit application at a time
when Knox
could not certify that it was financially qualified both constitute violations of 47 C.F.R.
 73.1015.  See KWQJ(FM), 10 FCC Rcd 8774 (1995) (permittees have obligation to
confirm
accuracy of information in original application before certifying in extension request that
such
information is accurate and complete);  see also 47 U.S.C.  308(b) (all applicants shall set
forth
such facts as the Commission may require); 47 U.S.C.  312 (Commission may revoke any
station license for false statements knowingly made in an application).

     20.  Although we do not believe that these actions constitute more than an isolated
failure
to provide true, complete and correct responses in the extension application, they do
involve
serious violations of the Commission's rules.  We admonish Knox for its violations of the
Commission's rules and caution Knox to take greater care in the future to ensure the
accuracy
and completeness of its representations to the Commission.  See KWQJ(FM), 10 FCC Rcd
at 
8776 (permittee admonished for failing to update information which was no longer
substantially
accurate and complete).  Because our action today affirms the staff cancellation of the
WJRZ(AM) construction permit, we view an admonishment as sufficient and conclude on
these
facts that no further sanctions against Knox are warranted. See Policy Regarding Character
Qualifications in Broadcast Licensing, 102 FCC 2d 1179, 1233-34 (1986) (subsequent history
omitted) ("Character Qualifications Policy") (47 C.F.R.  73.1015 adopted in 1986 to
provide the
Commission with greater flexibility to levy sanctions short of disqualification for licensee
and
applicant misrepresentations).  Knox's voluntary disclosure of certain financial information
in
amendments and pleadings supports our conclusion that Knox did not intend to deceive the
Commission about these zoning, financing and construction matters.  

     21.  ACCORDINGLY, IT IS ORDERED, That Knox is admonished for its violations
of
Section 73.1015 of the Commission's rules.

     22.  IT IS FURTHER ORDERED, That pursuant to Sections 1.106(j) and 1.115(g) of
the
Commission's Rules, 47 C.F.R.   1.106(j) and 1.115(g), we DISMISS the New Jersey
Broadcasters Association petition for reconsideration and DENY the Knox Broadcasting,
Inc.
application for review of the September 14, 1995 letter decision.

                                          FEDERAL COMMUNICATIONS COMMISSION



                                          William F. Caton
                                          Acting Secretary


FN1:  The Mass Media Bureau has referred the Petition to the Commission pursuant to 47
C.F.R.
 1.106(a).  The Petition and Application for Review make related objections to the staff
action
now before us.  Accordingly, we waive 47 C.F.R.  1.104 to expedite our review of these
matters.

FN2:  On October 23, 1995 Knox also filed a request for special temporary authority to
operate
in accordance with the facilities specified in the above-referenced modification application. 
Because we affirm the staff action denying the extension application and canceling the
WJRZ
permit, we deny this request.  For the same reason we dismiss as moot the December 6,
1995
Motion to Strike filed by Global.

FN3:  We note that there is no procedure under the Commission's rules for seeking
intervention
in non-hearing cases.  Cf. 47 C.F.R.  1.223 (permitting intervention in hearings involving
applications for construction permits and licenses).

FN4:  In this regard, the Letter Decision erroneously stated that the construction period
expired
on June 10, 1991.  We review the Letter Decision on the basis of the corrected factual
record.

Jump to:
ASD Main Page, ASD Alphabetical Index, FCC Search Engine
Most Requested Information, Filing an Application, Application Information, AM, FM and FM Translators & Boosters, Decisions, Links Within FCC, Links to Outside the FCC

Mass Media Bureau -- Federal Communications Commission