tion, filing and advocacy of their applications. Accordingly, we will approve reimbursement of the specified amounts. 7. Because the applicants propose service to different communities, we are required to determine the applicability of Section 307(b) of the Communications Act of 1934, as amended. Specifically, Section 1.525(b)(1) of our Rules states that if we find that withdrawal of an application would unduly impede achievement of the objectives of Section 307(b), then other persons should be afforded an opportunity to apply for the facilities to be withdrawn before action is taken on the pending request for approval of agreement. The three Section 307(b) priorities identified in the First Report and Order on Revision of FM Broadcast Rules, 40 FCC 662, 664 (1962), are as follows: (1) provision of some service to all of the nation, or as much as possible; (2) provision of as many program choices to as many listeners as possible; and (3) service of local origin to as many communities as possible. See WBVM Associates, FCC 78-575, 43 RR 2d 1532 (1978). With respect to the first priority,5 those areas which would be served exclusively by the Bradwin proposal now receive at least five aural services during the day and one service at night. Withdrawal of the Bradwin application will therefore leave no areas unserved. As for the second and third priorities, not only does West Virginia propose a larger overall service area and a larger exclusive service area than does Bradwin, but the applicant would also provide a first local service to Mount Hope in contrast with Bradwin's planned third aural service for Oak Hill. West Virginia is thus to be preferred under the second and third Section 307(b) priorities while neither applicant can claim a preference under the first. 8. Based on these considerations, we conclude that a grant of the West Virginia application would not unduly impede the objectives of Section 307(b) and that publication is not required. We have examined the agreement and the accompanying affidavits and find also that the parties have otherwise complied with the requirements of Section 311 of the Communications Act of 1934, as amended, and Section 1.525 of our Rules. Finally, we find that West Virginia Broadcasting, Inc. is qualified to construct and operate as proposed and that a grant of its application would serve the public interest. 9. Accordingly, IT IS ORDERED, That the joint petition for approval of agreement IS GRANTED, that the applications of Stuart 5 As West Virginia and Epperson propose essentially the same service to the same area, our comparison here is between the West Virginia proposal and the Bradwin proposal. 6 In accordance with Note 8 of Section 73.37 of our Rules, we are including in our calculation pending cut-off applications for a new FM station at Summersville, West Virginia. W. Epperson and Bradwin Corporation ARE DISMISSED, and that the application of West Virginia Broadcasting, Inc. IS GRANTED. FEDERAL COMMUNICATIONS COMMISSION, Character Qualifications, Effect Of Misrepresentation Petition to deny voluntary transfer of control of b/c licensee alleging that transferees lack requisite character qualifications to be a licensee, denied-no showing of fact. Allegation that Commission cannot act pending state court proceeding arising out of facts related to transfer is moot. FCC 79-631 BEFORE THE FEDERAL COMMUNICATIONS COMMISSION In Re Application of WASHINGTON, D.C. 20554 Texas Media Group, Inc. Frank J. Gerow, Raymond Reid, Page W. Nelson, Joe Glenn Thompson (Transferors) and Arnold Malkan as Trustee for himself, Audrey Malkan, Matthew Malkan and E.C. Stein, Jr. (The Malkan Group) (Transferees) For the Voluntary Transfer of Control of Approximately 51 Percent of Texas Media Group, Inc., Licensee of Station KZFM(FM), Corpus Christi, Texas File No. BTC-8419 MEMORANDUM OPINION AND ORDER (Adopted: October 10, 1979; Released October 19, 1979) BY THE COMMISSION: COMMISSIONER JONES ABSENT. 1. We have before us for consideration: (a) the above-captioned application; (b) a petition to deny, timely filed against the application by Roger H. Stoner; and (c) pleadings in opposition and reply. 2. Petitioner has alleged that some of the transferors had agreed to transfer their interest in Texas Media Group, Inc. (Texas Media) to him and he has filed an action for specific performance in the Texas state courts to protect his alleged interest. We find he has standing to file the instant petition. Granik v. FCC, 234 F. 2d 682 (D.C. Cir. 1956). 3. Petitioner contends that the Commission cannot act upon the instant transfer application until a lawsuit involving Stoner, the Malkan Group and Texas Media has been resolved by final order in the courts of the state of Texas. Petitioner also raises questions concerning the character qualifications of the transferees based upon allegations that: (a) Radio Corpus Christi, Inc. (RCC), controlled by the Malkan Group, filed a "sham" pleading in the form of a "strike" petition to deny the application for assignment of station KMIO(FM), Sinton, Texas, from Sinton Broadcasting Company, Inc. to Cathexis: KNCN, Inc. (BALH-2253, granted August 5, 1976, Sinton Broadcasting Company, Inc., 38 RR 2d 341 (1976)); (b) the Malkan Group made misrepresentations in its renewal application for station KEYS, Corpus Christi, Texas; and (c) Arnold and Audrey Malkan engaged in misconduct with respect to their efforts to purchase the controlling interest in Texas Media. 4. For the reasons set forth below, we believe that Stoner has failed to raise a question of law that requires the Commission to delay action on this application and further, Stoner has failed to raise a substantial and material question of face concerning the Malkan Group's character qualifications to become the licensee of KZFM(FM), Corpus Christi, Texas. Therefore, the petition to deny will be denied. 5. Stoner is Texas Media's largest stockholder, with 49 percent of the licensee's stock. He states that on August 21, 1976, two other stockholders, Joe Glenn Thompson and Dr. Page W. Nelson, agreed to sell him their 11% interest, and that on August 26, 1976, he submitted a formal agreement for their signatures. However, according to Stoner, on August 28, 1976, the Malkans tendered to all five Texas Media stockholders, Stoner, Thompson, Nelson, Dr. Frank J. Gerow, and Dr. Raymond Reid, an offer to purchase all the Texas Media stock, and as a result Thompson and Nelson repudiated their agreement with him. Stoner then sued in the Harris County (Texas) District Court, for specific performance of his agreement with Thompson and Nelson, and temporary injunctive relief to halt the Malkan Group's purchase. Texas Media counterclaimed, seeking injunctive relief to gain possession of KZFM and its records from Stoner.1 The Malkans' intervened, seeking damages from Stoner. On July 15, 1977, the court found in favor of Texas Media and the Malkans, granting damages as well as broad injunctive relief. On August 23, 1978, that decision was affirmed by the Court of Civil Appeals for the Tenth Supreme Judicial District of Texas in Case No. 5854, Stoner v. Thompson. On March 14, 1979, the Texas Supreme Court affirmed the Court of Appeals' decision except with respect to the award of $50,000 in money damages from Stoner to Texas Media. Thereafter the Texas Supreme Court denied Stoner's motion for rehearing on April 11, 1979. 6. Stoner alleges that if the Commission acts on the instant application prior to a final resolution of this lawsuit in the Texas courts, those courts might be influenced by the Commission's decision respecting the transfer of control. Granik v. FCC, supra. Although 1 Until July 18, 1977, Stoner was general manager of KZFM and maintained physical control of the station's premises and records. this proposition may have had some validity at the time of the filing of the petition to deny on September 15, 1977, the denial of the motion for rehearing by the Texas Supreme Court on April 11, 1979, resolves this litigation and moots Stoner's allegation. KMIO Assignment 7. Stoner bases his conclusion that the petition to deny the assignment of KMIO filed by the Malkan Group on behalf of Radio Corpus Christi, Inc.2 was a "sham" pleading and, therefore, a strike petition on the following grounds: (1) the Commission dismissed the petition to deny filed by the Malkans, finding it to be without merit; (2) the Malkan Group neither ught reconsideration by the Commission nor court review of the Com nission decision, Sinton Broadcasting Company, Inc., 38 RR 2d 341 (1976); (3) the Sinton decision occurred prior to the Malkan Group's efforts to acquire KZFM and the Malkan Group initiated efforts to acquire KZFM within a day after the release of the decision;3 and (4) the Commission did not deal with a material question of fact in Sinton, raised by the denial of a member of the Malkan Group, E. C. Stein, that he and the Malkan group threatened to do anything possible to prevent the sale of KMIO if Stoner did not sell to the Malkan group. 8. The Commission's criteria for determining "strike petitions" are set out in Radio Carrollton, 43 RR 2d 29 (1978); Accordingly, in order to justify specification of a strike petition issue, the charging party must make a strong showing that delay is the primary and substantial purpose behind a petition to deny . . In determining this primary delaying purpose, we shall consider several factors, which, depending on the particular facts, may or may not all be present in the same case. The following factors are the principal ones which we consider as significant indications a petition to deny was filed primarily or substantially for purpose of delay. (a) Statements by the licensee's principals or officers admitting the obstructive purpose. (b) [misrepresentation] or withholding information relevant to disposition of the requested issues . . . (c) The absence of any reasonable basis for the adverse allegations in the petition. Should it appear that the allegations in the petition are specious, with little or no factual or legal basis, such evidence would tend to raise the question whether petitioner was acting in good faith. (d) Economic motivation indicating a delaying purpose. However, we will not infer a 'strike' motive from the mere filing of a petition to deny, even though some 'benefit' may accrue to the licensee from normal processing delays. . .4 2 RCC is the licensee of station KEYS, Corpus Christi, Texas, a competitor of KMIO, Sinton, Texas. The Malkans are principals in RCC. RCC's petition in Sinton alleged that the proposed assignee was not financially qualified. The Commission denied the petition and granted the application. Sinton Broadcasting Company, Inc., supra. Stoner was not a party to that proceeding. 3 Stoner adds the allegation that the Commission's News Release of Sinton, supra, preceded the release of the Commission's Opinion and Order by a day even though the Opinion and Order was adopted by the Commission a week earlier. Although this bare statement may be true, no conclusion is drawn by Stoner; standing by itself, this allegation raises no substantial and material question of fact. 4 We denied a petition for reconsideration of Radio Carrollton, supra, in Radio |