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FCC Denies Challenge to Saga’s Ithaca Acquisitions

ITHACA — The 5-station cluster operated by Saga Communications will be allowed to stand, after the FCC denied an “Application for Review” filed by the Finger Lakes Alliance for Independent Media. But two FCC commissioners called their agreement “reluctant” in a separate statement.

As the FCC’s official ruling (PDF) details, the legal battle goes back to 2005, when Saga first purchased stations WHCU, WYXL, WQNY and WNYY (then WTKO) from Eagle Broadcasting.  FLAIM argued that the sale would give Saga too an unfairly large share of the market’s listening audience and advertising revenue.  The FCC denied that original claim, stating that, based on market definitions and the number of available signals, Saga was not violating market ownership limits.  

When Saga purchased Cortland’s WIII and WKRT from Citadel at the end of 2006, the FCC ruled Saga could only own five stations; as a result, Saga immediately divested WKRT to Bible Broadcasting Network (and it has since been renamed WYBY).

However, FLAIM filed a Supplement to the original claim in early 2007, arguing Saga’s addition of WIII “will result in increased market power as well as decreased diversity and competition in Ithaca.”  FLAIM asked the FCC to require Saga to divest one more station.

On Wednesday, the FCC ruled Saga’s cluster is permitted to stand as-is, and FLAIM’s arguments are “moot.”  Explaining its decision, the FCC discredits certain arguments FLAIM makes in disputing the basis for the market boundaries and station “listenability” in determining whether Saga controls too much of the market.

FCC Commissioners Michael Copps and Jonathan Adelstein filed a separate statement (PDF) stating they “reluctantly” concur with their colleagues.  Copps and Adelstein question the methodology through which the majority decision was reached:

The majority acknowledges that we must give a “hard look” to such allegations—even if the transfers comply with our general local radio ownership caps.   Unfortunately, the majority fails to apply its own “hard look” standard, giving short shrift to many of petitioner’s allegations.

The duo goes on say their decision to join the majority was based on “a record that makes it difficult to assess the true impact of this transaction on competition, localism, and diversity in the Ithaca market.”

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