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



In the Matter of

Definition of Radio Markets

)
)
)


MM Docket No. 00-244



                 NOTICE OF PROPOSED RULE MAKING

   Adopted:  December 6, 2000           Released:  December 13, 2000

Comment date:  January 26, 2001
Reply Comment date:  February 12, 2001

By the Commission:  Chairman Kennard, and Commissioners Ness and Tristani issuing separate statements;
Commissioners Furchtgott-Roth and Powell concurring and issuing separate statements.

1.     We are adopting this Notice of Proposed Rule Making to seek comment on whether and how we
should modify the way in which we determine the dimensions of radio markets and count the number of
stations in them.  We are also seeking comment on whether and how we should amend the method by which
we determine the number of radio stations owned by a party in a radio market for the purpose of applying our
multiple ownership rules.  

Overview

2.     In 1991, we commenced a proceeding to relax our local and national radio ownership rules. We
ultimately established two market sizes that would determine the number of radio stations in which an entity
could have an attributable interest in a local area.  One tier included markets with 15 or more commercial
radio stations.  The other market tier consisted of markets with fewer than 15 stations.  A party could have
attributable interests in a different number of stations depending on the tier into which its market fell. This
decision required that we establish both how we would define a market and, because of the different treatment
of markets with less than 15 stations and those with 15 or more, how we would count the number of stations
in a market.  We determined that:

          we will define the radio market as that area encompassed by the principal community
     contours (i.e., predicted or measured 5 mV/m for AM stations and predicted 3.16 mV/m for
     FM stations) of the mutually overlapping stations proposing to have common ownership.

With regard to how we would count the number of stations in a market, we stated:

     [t]he number of stations in the market will be determined based on the principal 
     community contours of all commercial stations whose principal community contours
     overlap or intersect the principal community contours of the commonly-owned stations.

2.     In Section 202(b)(1) of the Telecommunications Act of 1996 ("1996 Act"), Congress directed the
Commission to increase the number of stations in a market in which a party could have a cognizable
ownership interest, providing that in the largest markets a single entity could own up to eight stations.  The
number of stations in which it could have such an interest would depend upon the number of commercial
stations in the market.  Our methods of defining a radio market and determining the number of stations in a
market, however, were not altered by the 1996 Act or by our Orders implementing that statute.
 
3.     Using this methodology, we evaluate whether a proposed transaction complies with our
ownership rules by first determining the boundaries of each market created by the transaction.  Thus, we
look to all stations that will be commonly owned after the proposed transaction is consummated and group
these stations into "markets" based on which stations have mutually overlapping signal contours.  A market is
defined as the area within the combined contours of the stations to be commonly owned that have a common
overlap.  For example, suppose an applicant proposes to own stations A, B, C and D.  The contours of stations
A, B and C each overlap the contours of the other two stations   that is, there is some area which the contours
of all three stations have in common.  Station D, on the other hand, overlaps the principal community contour
of station A, but not those of stations B or C.  Under our current definitions,the area encompassed by the combined contours of stations A, B and C form one "market" and the area within
the combined contours of stations A and D form another market.

4.     To determine the total number of stations "in the market," as defined above, we count all
stations whose principal community contours overlap the principal community contour of any one or more
of the stations whose contours define the market. Thus, in the market formed by the contours of stations A,
B and C, any station whose contour overlapped the contour of A, B or C would be counted as "in the
market."  We use a different methodology, however, to determine the number of stations that any single
entity is deemed to own in a given market.  For this purpose, we only count those stations whose principal
community contours overlap the common overlap area of all of the stations whose contours define the
market.  Thus, a station owned by the applicant that is counted as being "in the market" because its contour
overlaps the contour of at least one of the stations that create the market will not be counted as a station
owned by the applicant in the market unless its contour overlaps the area which the contours of all of the
stations that define the market have in common.  Referring to our example of the market formed by the
contours of stations A, B and C, station D would be counted as "in the market" because its contour overlaps
the contour of station A.  But, station D would not be counted as a station owned by the applicant in the
ABC market because station D's contour does not also overlap the contours of stations B and C.  In short,
the applicant's ownership of station D would not be counted against it in determining compliance with the
ownership cap in the ABC market.

5.     Our experience has led us to conclude that this framework may be having results that may frustrate
the structure of the statute and that are not in the public interest.  For example, under the existing policies and
rules, the Commission's Mass Media Bureau recently determined that Wichita, KS, is a market containing 52
stations and granted the assignment application for station KOEZ(FM) from Kansas Radio Assets to Journal
Broadcasting Corporation, giving Journal six stations, including 5 FM stations, in the Wichita market.  This is
well within the eight stations that a single owner would be permitted to own in a market with more than 45
stations under our rules implementing the 1996 Act.  Yet Arbitron, which defines radio markets for commercial
purposes, classifies Wichita as a 24-station market in which, under these rules, a single entity could only have
an interest in six radio stations, no more than 4 of which could be in the same service.  Similarly, under the
existing policies and rules, BIA data show that one party seeks to own nine stations in Youngstown, OH.  Yet
Arbitron data show only 23 commercial radio stations in the Youngstown metropolitan area.  In another
transaction, using the Commission's methodology, an applicant was able to show that Ithaca, NY, was a market
with at least 32 commercial radio stations.  Yet Arbitron data show only 9 commercial radio stations in the
Ithaca metropolitan area.

6.     Given such results, we question whether the use of overlapping signal contours is an appropriate
means of defining market boundaries and counting the number of stations in a market.  Our methodology
sometimes leads to results that are completely at odds with commercial market definitions and economic
reality, and may undermine the structure of the statute to allow levels of ownership that increase
commensurately with the size of the market.  Additionally, our methodology may encourage applicants to
structure transactions to fragment what are commercially considered single markets into a number of smaller
markets.  While a licensee may be within our ownership limit as to each of these fragmented markets, in the
aggregate it owns more stations than our rules would permit were these markets considered to be a single
market, as they are by commercial rating services and would be under any economically meaningful market
definition.

7.     The Commission has used this methodology for defining markets and counting stations in markets
since 1992. While the methodology has produced some odd results since its inception, it was not until the
ownership limits were substantially increased in 1996 that the methodology's potential to cause results at
odds with economic reality became clearly discernible.  Until then, the number of problems and their impact
were constrained, by the more modest numerical ownership limits and by a 25 percent audience share cap in
markets with 15 or more stations. 

8.     Another problem with this methodology was highlighted in the Commission's recent Pine Bluff
decision.  In that case, Seark Radio, Inc., sought to purchase one AM and two FM stations in Pine Bluff,
Arkansas.  Seark already had direct or attributable interests in three other stations in Pine Bluff and environs. 
A petitioner (Bayou Broadcasting, Inc.) filed a Petition to Deny claiming, in part, that the relevant market
contained 11 stations and that grant of the subject application would give Seark direct or attributable interests
in 6 of those stations.  Were this the case, it would have caused Seark to exceed the "cap" that one party can
have in an 11-station market because it would give it interests in more than 5 of the stations in the market.  In
a decision which we recently affirmed on review, the Mass Media Bureau determined that, under the
Commission's method for defining markets and counting the number of stations in a market, the stations
involved actually formed three separate markets.  Market 3 was formed by two mutually overlapping stations
attributable to Seark.  Two other stations were determined to contribute to this market.  One of those two
stations was owned by Seark.  However, because this station's principal community contour did not overlap the
principal community contours of both of the stations whose overlapping principal community contours
established the market, it was not counted as an attributable interest of Seark's in this market.  Thus, application
of our existing methodologies led to the determination that this Seark station would be counted as being "in the
market" for purposes of determining the base number of stations in that market.  But, the same station would
not be considered to be "in the market" for the purposes of determining how many stations in the market were
and would be owned by Seark, and thus whether Seark complied with the numerical station caps. 
Accordingly, strict compliance with our precedents in this area led to the conclusion that Seark had an
attributable interest in only two of the four stations in this market, notwithstanding its attributable interest in
a third station which counted as a station in the market for the purpose of determining the total number of
stations in the market.

Options

9.     Several options or approaches present themselves as possible means of addressing the
definitional issues raised in the preceding discussion.  With respect to the counting consistency issue
exemplified by the Pine Bluff case, the most direct solution might be simply to alter our counting
methodology and count against an applicant's ownership allowance in a given market any station that it
owned and that was included in determining how many stations were "in the market" for purposes of
assessing compliance with the local radio ownership rules.  Under this proposed approach, the applicant in
the Pine Bluff case would have been charged with ownership of three stations in a four-station market,
rather than two, and the transaction would not have complied with the numerical limits in our rules. This
would clearly and logically resolve the inconsistency in our present approach and produce more rational
results.  Moreover, this approach may better reflect the statute's structure, and lend consistency and
predictability to the commercial marketplace.  We invite comment on this approach.  Alternatively, we
could exclude from the count of the number of stations in a market, any stations owned by the applicant,
except the commonly owned stations that form the market.  We seek comment on this approach.  

10.    Another, broader approach might address both the counting anomaly and the discontinuity
between the Commission's and commercial rating services' definition of radio markets generally.  Under
this approach, we would eliminate our current market definition and, instead, rely on commercially
determined market definitions.  For example, we could adopt Arbitron radio metro market definitions and
simply rely on these commercial delineations to determine the total number of stations in any given market
and how many stations an applicant would control in that market.  Arbitron-defined markets have the
advantage that they attempt to reflect accurately the location of a station's listeners and the identity of
stations that are actually perceived by advertisers to be in a market.  Additionally, the Department of Justice
utilizes Arbitron markets in its competition analysis of radio station mergers.   However, the use of Arbitron
markets has the disadvantage that many radio stations are not in an Arbitron market.  Out of 3100 counties
in the United States, slightly less than 850 (containing, however, nearly 80 percent of the nation's
population) are in Arbitron markets.  Arbitron defines a geographic area based on county lines.  We
recognize that Arbitron metros do not encompass all the counties that can receive some of the radio signals
of the metro radio stations.  However, the radio stations included in the Arbitron metro do a significant
portion of their business in the counties that are included in the Arbitron metro.

11.    We seek comment on whether we should use Arbitron or other commercially defined markets. 
How should we determine the dimensions of a market when the stations involved are not located in a
commercially defined market?  If we use Arbitron or another commercially defined market, what should we
do when a market changes?  For example, population growth might result in a county that was in a single
market to later be split between two markets.  This could cause the number of stations in the market to drop,
placing some existing ownership combinations above the local ownership limits.  One approach to such
changes would be to disregard them (effectively grandfathering existing combinations) until such time as a
relevant application is filed, at which point we would apply the market definitions in effect at the time of the
application's filing or grant.  We seek comment on these and on alternative proposals.

12.    Alternatively, should we determine the number of stations in a market using a different contour
overlap standard?  For example, we could count as being in a market only those stations whose principal
community contours overlap or intersect the overlap area of the principal city contours of the stations whose
ownership is to be merged.  This might provide a superior gauge relative to the area with which we are most
concerned in merger situations with respect to both competition and diversity.  However, this standard might
be too restrictive and thus inappropriately thwart the relaxation of the ownership rules that the 1996 Act
contemplated.  Is there some other overlap standard that might more accurately provide a count of the number
of stations in a market?  Perhaps counting only those stations that overlap a certain percentage of the contour
of one or more of the mutually overlapping stations would provide accurate results.  What percentage would
be appropriate?  Another option would be simply to count only those stations that are actually heard in a
market.  What methodology should we use in the event we adopt this option?  We invite comment on all of
these alternatives.

Procedural Matters

13.    We do not propose that any rules and policies we adopt herein should be applied retroactively to
existing ownership combinations.  Those ownership arrangements were granted as being in the public interest
and in accordance with applicable Commission rules and policies.  There is no reason to disturb these
ownership combinations.

14.    Merger applications now pending or filed after the adoption of this Notice but before our final
decision in this proceeding present another case.  As a general matter, we will continue to process applications
under the existing standards, unless and until they are changed in this proceeding.  In cases raising concerns
about how we count the number of stations a party owns in a market, however, we will defer decision pending
resolution of that issue in this proceeding.  As we concluded in the 1998 Biennial Review Report, the "shifting
market definition" in our counting methodology "appears illogical and contrary to Congress' intent."  Given
this conclusion, it would be inappropriate to continue to apply this standard to pending and newly filed
applications.  We believe that the harm caused by application of this standard outweighs any harm caused by
the deferment of decision on these applications.  We intend to act expeditiously in this proceeding to ensure
that any such deferments are few in number and short in duration.

Administrative Matters

15.    Comments and Reply Comments.  Pursuant to Sections 1.415 and 1.419 of the Commission's
rules, 47 C.F.R.  1.415, 1.419, interested parties may file comments on before January 26, 2001, and reply
comments on or before February 12, 2001.  Comments may be filed using the Commission's Electronic
Comment Filing System (ECFS) or by filing paper copies.  See Electronic Filing of Documents in
Rulemaking Proceedings, 63 Fed. Reg. 24,121 (1998).  

16.    Comments filed through the ECFS can be sent as an electronic file via the Internet to
<http://www.fcc.gov/e-file/ecfs.html>.  Generally, only one copy of an electronic submission must be filed. 
If multiple docket or rulemaking numbers appear in the caption of this proceeding, however, commenters
must transmit one electronic copy of the comments to each docket or rulemaking number referenced in the
caption.  In completing the transmittal screen, commenters should include their full name, Postal Service
mailing address, and the applicable docket or rulemaking number.  Parties may also submit an electronic
comment by Internet e-mail.  To get filing instructions for e-mail comments, commenters should send an e-
mail to ecfs@fcc.gov, and should include the following words in the body of the message, "get form <your
e-mail address."  A sample form and directions will be sent in reply.  Parties who choose to file by paper
must file an original and four copies of each filing.   If more than one docket or rulemaking number appear
in the caption of this proceeding, commenters must submit two additional copies for each additional docket
or rulemaking number.  All filings must be sent to the Commission's Secretary, Magalie Roman Salas,
Office of the Secretary, Federal Communications Commission, 445 Twelfth Street, S.W.; TW-A325,
Washington, D.C. 20554.

17.    Parties who choose to file by paper should also submit their comments on diskette.  These
diskettes should be submitted to: Wanda Hardy, 445 Twelfth Street, S.W., Room, 2-C207, Washington,
D.C.  20554. Such a submission should be on a 3.5 inch diskette formatted in an IBM compatible format
using MS Word 97 for Windows or compatible software.  The diskette should be accompanied by a cover
letter and should be submitted in "read only" mode.  The diskette should be clearly labeled with the
commenter's name, proceeding (including the docket number in this case, MM Docket No. 00-244, type of
pleading (comment or reply comment), date of submission, and the name of the electronic file on the
diskette.  The label should also include the following phrase "Disk Copy - Not an Original."  Each diskette
should contain only one party's pleadings, preferably in a single electronic file.  In addition, commenters
must send diskette copies to the Commission's copy contractor, International Transcription Service, Inc.,
445 Twelfth Street, S.W., CY-B402, Washington, D.C. 20554.

18.    Comments and reply comments will be available for public inspection during regular business
hours in the FCC Reference Center, Federal Communications Commission, 445 Twelfth Street, S.W., CY-
A257, Washington, D.C.  20554.  Persons with disabilities who need assistance in the FCC Reference
Center may contact Bill Cline at (202) 418-0270, (202) 418-2555 TTY, or bcline@fcc.gov.  Comments and
reply comments also will be available electronically at the Commission's Disabilities Issues Task Force web
site: www.fcc.gov/dtf.  Comments and reply comments are available electronically in ASCII text, Word 97,
and Adobe Acrobat.

19.    This document is available in alternative formats (computer diskette, large print, audio cassette,
and Braille).  Persons who need documents in such formats may contact Martha Contee at (202) 4810-0260,
TTY (202) 418-2555, or mcontee@fcc.gov. 

20.    Ex Parte Rules.  This is a permit-but-disclose notice and comment rulemaking proceeding.  Ex
parte presentations are permitted except during the Sunshine Agenda period, provided they are disclosed as
provided in the Commission's Rules.  See generally 47 CFR Sections 1.1202, 1.1203, and 1.1206(a).

21.    Initial Regulatory Flexibility Analysis.  With respect to this Notice, an Initial Regulatory
Flexibility Analysis ("IRFA") is contained in Appendix A.  As required by Section 603 of the Regulatory
Flexibility Act, the Commission has prepared an IRFA of the possible significant economic impact on small
entities of the proposals contained in this Notice.  Written public comments are requested on the IRFA.  In
order to fulfill the mandate of the Contract with America Advancement Act of 1996 regarding the Final
Regulatory Flexibility Analysis, we ask a number of questions in our IRFA regarding the prevalence of
small businesses in the radio broadcasting industry.  Comments on the IRFA must be filed in accordance
with the same filing deadlines as comments on the Notice, but they must have a distinct heading designating
them as responses to the IRFA.

22.    Authority.  This Notice is issued pursuant to authority contained in Sections 4(i), 303, and 307 of
the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 303, and 307, and Section 202(h) of the
Telecommunications Act of 1996.

Ordering Clauses

23.    Accordingly, IT IS ORDERED that, pursuant to the authority contained in sections 1, 2(a), 4(i),
303, 307, 309, and 310 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 152(a), 154(i),
303, 307, 309, and 310, and Section 202(h) of the Telecommunications Act of 1996, this Notice of Proposed
Rulemaking is ADOPTED.

24.    IT IS FURTHER ORDERED that the Commission's Consumer Information Bureau, Reference
Information Center, SHALL SEND a copy of this Notice, including the Initial Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business Administration. 

                              FEDERAL COMMUNICATIONS COMMISSION




                              Magalie Roman Salas
                              Secretary
                          APPENDIX A


                   Initial Regulatory Flexibility Analysis

     As required by the Regulatory Flexibility Act (RFA), the Commission has prepared this present Initial
Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the
policies and rules proposed in this Notice of Proposed Rulemaking (Notice).  Written public comments are
requested on this IRFA.  Comments must be identified as responses to the IRFA and must be filed by the
deadlines for comments on the Notice provided above in paragraph 15.  The Commission will send a copy
of the Notice, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration
(SBA).  See 5 U.S.C.  603(a).  In addition, the Notice and the IRFA (or summaries thereof) will be
published in the Federal Register.  See id.

          A.   Need for, and Objectives of, the Proposed Rules
Section 202(h) of the Telecommunications Act of 1996 (1996 Act) requires the Commission to review all of
its broadcast ownership rules every two years commencing in 1998, and to determine whether any of these
rules are necessary in the public interest as the result of competition.  The 1996 Act also requires the
Commission to repeal or modify any regulation it determines to be no longer in the public interest.  The
Commission adopted a Notice of Inquiry in 1998 in compliance with this requirement.  (13 FCC Rcd 11276). 
The Commission believes that its present method of determining the dimensions of radio markets and/or of
counting the stations available in those markets may be having results that do not reflect the structure of the
Telecommunications Act with regard to the Commission's local radio ownership rules and may not be in the
public interest.  Present methodology may result in radio markets whose dimensions do not reflect actual
listening patterns or availability, artificially enhance the number of stations in those markets or artificially
fragment what may be single individual markets into several independent smaller markets, thereby allowing a
single owner to own a number of stations in a market in excess of what Congress intended. Our methodology
sometimes leads to results that are completely at odds with commercial market definitions and economic
reality, and thus does not advance the Telecommunications Act's structure of allowing levels of ownership that
increase commensurately with the size of the market. Additionally, the Commission determined in its biennial
review proceeding (MM Docket No. 98-35) that it appears that the way in which it determines the number of
radio stations that a party owns in a market may have lead to unintended results.  This Notice is designed to
solicit comment on proposals to assure that our definitions and methodologies more closely reflect commercial
realities and the intent of Congress.  Because Section 202(h) of the 1996 Act directs the Commission to repeal
or modify any broadcast ownership regulation it finds no longer in the public interest the Commission has
adopted this Notice to solicit comment on the modification of the subject policies and rules.


          B.   Legal Basis

This Notice is adopted pursuant to sections 1, 2(a), 4(i), 303, 307, 309, 310, of the Communications Act of
1934, as amended, 47 U.S.C.  151, 152(a), 154(i), 303, 307, 309, 310, and Section 202(h) of the
Telecommunications Act of 1996.

               C.   Description and Estimate of the Number of Small Entities To Which the
          Proposed Rules Will Apply

The RFA directs agencies to provide a description of, and, where feasible, an estimate of the number of small
entities that may be affected by the proposed rules, if adopted.  The RFA defines the term "small entity" as
having the same meaning as the terms "small business," "small organization," and "small governmental
jurisdiction.   In addition, the term "small business" has the same meaning as the term "small business
concern" under the Small Business Act.  A small business concern is one which: (1) is independently owned
and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established
by the SBA.

The SBA defines a radio broadcasting station that has $5 million or less in annual receipts as a small
business.  A radio broadcasting station is an establishment primarily engaged in broadcasting aural programs
by radio to the public.  Included in this industry are commercial, religious, educational, and other radio
stations.  The 1992 Census indicates that 96 percent of radio station establishments produced less than $5
million in revenue in 1992.  Official Commission records indicate that 11,334 individual radio stations were
operating in 1992.  As of September 30, 2000, Commission records indicate that 12,717 radio stations (both
commercial and noncommercial) were operating of which 2,140 were noncommercial educational FM radio
stations.  (Our multiple ownership rules, however, do not apply to noncommercial educational radio stations.) 
Applying the 1992 percentage of station establishments producing less than $5 million in revenue (i.e., 96
percent) to the number of commercial radio stations in operation, (i.e., 10,577) indicates that 10,154 of these
radio stations would be considered "small businesses" or "small organizations."  

          D.   Description of Projected Reporting, Recordkeeping, and Other Compliance
          Requirements

There currently are no recordkeeping or other compliance requirements associated with the subject rule and
policies.  The Notice proposes no new recordkeeping or other compliance requirements. 

          E.        Steps Taken to Minimize Significant Impact on Small Entities, and
          Significant Alternatives Considered
     
The RFA requires an agency to describe any significant alternatives that it has considered in reaching its
proposed approach, which may include the following four alternatives (among others): (1) the establishment
of differing compliance or reporting requirements or timetables that take into account the resources
available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting
requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and
(4) an exemption from coverage of the rule, or any part thereof, for small entities.

In fashioning its Report in the Commission's Biennial Review Proceeding (MM Docket No. 98-35) the
Commission considered a number of alternatives to the subject counting methodology policy.  These
alternatives were: (1) retention of the existing radio market definition policy; (2) modification of the
existing radio market definition policy; (3) retention of the existing rule  (47 CFR  73.3555(a)(3)(ii))
concerning counting the number of stations in the radio market; (4) modification of the existing rule
concerning counting the number of stations in the radio market; (5) retention of the existing policy for
counting the number of stations a party owns in a radio market; and (6) modification of the existing policy
for counting the number of stations a party owns in a radio market.  The Biennial Review Report tentatively
concluded that the existing policy for determining radio markets and counting methodology rule and policy
should be modified.  An alternative considered in this item is to maintain the status quo. However, the
Notice does propose to modify the current method of defining radio markets and to modify our station-
counting methodologies.  Alternatives (2), (4), and (6) may have a beneficial effect on small entities.  A
more accurate and predictable definition of radio markets, and improved counting methodologies may more
precisely determine the size of markets and the number of stations in them and allow the Commission to
achieve the results intended by Congress in passing the 1996 Act.  This could result in some small radio
stations facing competition from commonly owned local station groups that are more of the size Congress
intended than is the case under current Commission rules and policies. Any significant alternatives presented
in the comments received in response to the instant Notice will certainly be considered.

F.        Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed Rules
None.
                    


                           APPENDIX B
                                
                       Market Definition
This Appendix illustrates the methodology for identifying and counting stations to determine
compliance with Section 73.3555(a)(1).  The Commission's current definition of a radio market is "the area
encompassed by the principal community contours (i.e., predicted or measured 5 mV/m for AM stations and
predicted 3.16 mV/m for FM stations) of the mutually overlapping stations proposed to have common
ownership."  The number of stations in a market is considered to be "the number of commercial stations
whose principal community contours overlap, in whole or in part, with the principal community contours of
the stations in question."  This analysis examines one metropolitan area to show how stations have been
and can be combined in compliance with our rules.  It also illustrates how certain anomalies can occur given
the Commission's definition of a radio market. 

Our analysis focuses on stations in and around Youngstown, OH.  Youngstown was chosen only for
illustrative purposes and the combinations discussed in the illustrations comply with the current multiple
ownership rules.  Youngstown, OH is a medium-sized city between Cleveland, OH and Pittsburgh, PA.  It
is roughly 70 miles from both cities.  Arbitron (a radio listening survey service) has defined the
Youngstown-Warren metropolitan area (metro) as consisting of two Ohio counties, Mahoning and
Trumbull.  These two counties have a population of approximately 479,000 and generate retail sales of over
$5.1 billion per year.  The radio companies in these counties collect over $21 million per year.  The
Arbitron metro is ranked 104th among 277 metro areas that are identified and surveyed regularly.

A spreadsheet listing the stations identified with the Youngstown-Warren metro is provided as
Attachment I.  The attachment shows 23 "home market " stations, 11 FM and 12 AM stations.  The
spreadsheet also lists stations that have received a reportable listening share in the two Youngstown
counties.  These stations are identified as "Out of Market Stations" and there are 17 of those, 16 FM and 1
AM.

     BIA data show that Clear Channel Communications owns (or proposes to own)  nine stations in
the Youngstown metro (6 FM and 3 AM).  At first glance this may seem inconsistent with the current radio
ownership limits.  In the largest markets (markets with 45 or more stations), an owner may own up to eight
stations with not more than five in one service.  This result occurs because the relevant market or markets
for compliance with the radio rules is not the Youngstown metro area, but instead determined by radio
signal contour overlaps.

     To illustrate how the contour overlap rule works, we will look at the contours of the Clear Channel
stations and the contours of stations owned by Cumulus Broadcasting, Inc.  Attachment II shows the Clear
Channel contours, and Attachment III shows the Cumulus contours.  Each multiple ownership showing
consists of unique station contours and unique contour overlaps so it is impossible to illustrate all
combinations, but these two illustrate the basic process of identifying the "market."   

With respect to the Youngstown stations, the Clear Channel transaction creates two markets. The
darkened areas on the map of Attachment II represent the common overlap (or common intersection) of the
stations in each market.  Eight stations have a common intersection just east of downtown Youngstown, and
eight stations have a common intersection just north of downtown Youngstown.  Each market has seven
stations in common, WICT-FM, WTNX-FM, WMXY-FM, WBBG-FM, WRTK-AM, WKBN-AM, and
WNIO-AM.  Only WBTJ-FM is unique to the eastern market, and only WNCD-FM is unique to the
northern market.

For Clear Channel to be able to own all nine stations, it must show that some of those stations are
located in different radio markets with 45 or more stations, since otherwise it would violate the eight station
cap per market. To determine which stations overlap the markets in question, and thus are counted as
stations "in the market," an engineer is usually employed to determine station contours that overlap, in
whole or in part, the principal community contours of the stations in question.  The contours need not
overlap the area of intersection described above; they only need to overlap one (or more) of the contours in
question.    

We do not show all 45 stations in this appendix because of the difficulty in presenting that many
contours.  Illustrative examples show, however, the types of stations that can be used to satisfy the 45-
station count.  All of the Arbitron metro stations overlap with the contours in question for Clear Channel.
Including Clear Channel's nine stations, there are 23 home market stations that Clear Channel can count. In
addition, Clear Channel can count stations not identified with any Arbitron market (there are nearly 5000
such stations in the U.S.) that are located in counties adjacent to and nearby Youngstown.  Lastly, Clear
Channel can count relatively distant signals that overlap WKBN-AM's large principal community predicted
contour.  Attachment IV shows the contours of five distant stations that overlap WKBN-AM.  All five of
these stations can be counted in satisfying the 45 stations count.  These are not the only "distant" signals
that can be counted; they are used here only for illustrative purposes.  Three of the stations are licensed to
Cleveland, and two of the stations are licensed to Pittsburgh.  Only one of the five stations has a principal
community contour that reaches within twenty miles of Youngstown.  It can also be seen that WMMS-FM
and WMJI-FM in Cleveland have contours that just touch the contour of WKBN-AM as does WXDX-FM
in Pittsburgh.

The Cumulus transaction also creates two markets. The darkened areas on the map of Attachment
III represent the common overlap (or common intersection) of the stations in each market. Six stations have
a common intersection that covers the city of Youngstown, and five stations have a common intersection
between Sharon and Greenville, PA.  Each market has three stations in common, WHOT-FM, WYFM-FM
and WPIC-AM.  WQXK-FM, WBBW-AM and WSOM-AM are unique to the six station market, and
WWIZ-FM and WLLF-FM are unique to the five station market.  

For Cumulus to own all eight stations in Youngstown, it must show that in its six station market
there are at least 15 stations, and it must also show that there are 15 stations in the five station market,
because four of the stations are FM facilities.  In the six station market, Cumulus may include two stations
that it owns in Pennsylvania to satisfy the 15 station count.  Similarly, in the five station market, Cumulus
may include two stations that it owns in Salem and one station that it owns in Youngstown stations to
satisfy the 15 station count. 
                        SEE ATTACHMENT I                        SEE ATTACHMENT II                       SEE ATTACHMENT III                                
SEE ATTACHMENT IV                        STATEMENT OF CHAIRMAN WILLIAM E. KENNARD 

Re:  In the Matter of Definition of Radio Markets, Notice of Proposed Rulemaking
                           
                           
The Notice on the Definition of Radio Markets is a critical step in bringing the
Commission's rules in line with the commercial realities of the radio marketplace.  
                           
As I stated when the Commission recently issued the first Biennial Review of the
broadcast ownership rules, the Commission's current methodology for defining radio
markets and counting the number of stations in a market has the potential to produce
unanticipated and anti-competitive results in particular cases.
                           
Section 202 of the Telecommunications Act directed the Commission to expand
the limit on how many stations a party could own in a market.  Congress specified a sliding
scale of numerical limits depending on the size of the market that, for example, would
allow a party to own up to 8 commercial radio stations in a market with 45 stations, up to 7
stations in a market with 30-44 stations, and so on.  
                           
In some cases, the Commission's current methodology for defining radio markets
seems to be turning that statutory design on its head.  It may be allowing higher levels of
ownership in what commercial services consider to be much smaller markets.  
                           
Therefore, this methodology deserves a hard, careful look.  Our review will assist
the Commission in discharging its statutory responsibility to ascertain whether individual
radio transactions comply with the law and promote the public interest.  
                                                           
         Separate Statement of Commissioner Susan Ness
                           
Re:  In the Matter of Definition of Radio Markets, Notice of Proposed Rulemaking
                           
                           
The Commission's current method of defining local radio markets suffers
from a number of flaws that can and should be remedied in this proceeding.  That
said, I fear that the final rules we issue may be the gilded padlock on the proverbial
barn door, with the horse of consolidation galloping over the horizon.

     As this Notice points out, current radio market definition methods use different contour
overlap schemes to define commonly owned stations, on the one hand, and total stations in a
market, on the other, often leading to uneven results that bear no resemblance to market realities. 
For example, under our current contour overlap method, two competing groups operating in the
same city may be limited by two different station caps.  Since the Commission first implemented
the radio ownership changes mandated by Congress, see In Re: Implementation of Sections 202(a)
and 202(b)(1) of the Telecommunications Act of 1996, 11 FCC Rcd 12368 (1996), I have
highlighted the need to remedy this problem, see, e.g., Joint Statement of Commissioners Susan
Ness and Gloria Tristani, KBYB(FM), El Dorado, Arkansas, 13 FCC Rcd 15685 (1998).  Over the
last four years, however, the radio broadcast industry has consolidated considerably, with
transactions consummated under our current, flawed system of defining markets.  I hope we can
quickly conclude this proceeding so that we do not compound the problem with further delay.

     I also believe that, in the spirit of improving the law, we should be mindful of the law of unintended
consequences.  Any remedy we adopt must be applied prospectively and fairly, with cognizance of the
reasonable market expectations of parties who hold combinations lawfully assembled under our existing
rules.  Finally, whatever definition we adopt should be consistent with the intent of Congress in the
Telecommunications Act of 1996 in relaxing radio ownership restrictions.

                                                               
       SEPARATE STATEMENT OF COMMISSIONER GLORIA TRISTANI
                                
Re:  In the Matter of Definition of Radio Markets, Notice of Proposed Rulemaking
                     MMB Docket No. 00-244 
                                
     While today's Notice represents progress, it is only a small step on a long road.  It has come
so late, and at such great cost, that it is appropriate to reflect for a moment on the damage that the
Commission's delay has inflicted on the listening public.

     On August 14, 1998   almost two and a half years ago   Commissioner Ness and I issued
a statement raising the two identical issues that today's item implies could only recently be
discerned:  (1) that the Commission's rules prevent a meaningful assessment of market
concentration because they do not apply a consistent definition of radio "market"; and (2) that the
practice of treating any station whose principal community contour intersects with any mutually
overlapping station in the proposed combination as being in the same "market" can lead to
unrealistic results  Since that time, I have repeatedly banged the drum that our rules denied justice
to listeners and their communities.  Finally, in its June 20, 2000 Biennial Review Report, the
Commission tentatively concluded that "our definitions and methodologies in this area may be
having effects inconsistent with what Congress intended" and promised a Notice of Proposed
Rulemaking to correct the problem Regrettably, it has taken the Commission an additional six
months to issue today's 8-page Notice.

     This is not simply a matter of the Commission ignoring congressional directives and
common sense.  Real listeners in real communities have been harmed by a consolidation of the
airwaves that should not have been permitted to take place.  Across America, in cities like Omaha
(Nebraska), Wichita (Kansas), Youngstown (Ohio), Portland (Maine), Pine Bluff (Arkansas) and
Augusta (Maine) listeners have been deprived of the broadcast diversity to which they are entitled
and which the Commission is duty-bound to ensure.  For those communities, today's notice of
proposed rulemaking will provide cold comfort.  We must now move with dispatch to spare other
communities a similar fate. 

  Separate Statement of Commissioner Harold W. Furchtgott-Roth
                                
I concur in this rulemaking for the limited aim of rationalizing our arguably arbitrary and
capricious methodology of counting radio stations for purposes of section 202(b)(1).  Cf. Joint
Statement of Commissioners Ness and Tristani, KBYB(FM), El Dorado, Arkansas, 13 FCC Rcd
15685 (1998) (explaining that it makes no sense to count stations as in the relevant market for the
denominator but not the numerator of the 202(b) calculation).   My purpose is not, as this Notice
of Proposed Rulemaking unfortunately suggests, to change our definition of "markets" in order to
cut back on the concentration levels that Congress expressly set in the 1996 Telecommunications
Act.   

Nor is the NPRM correct in its suggestion that Congress could not have known or
understood the accepted administrative meaning of that term, and thus the actual import of its
revision of the radio limits, when it changed the radio market limits in the Communications Act. 
To the contrary, "it is well established that when Congress revisits a statute giving rise to a
longstanding administrative interpretation without pertinent change, 'the congressional failure to
revise or repeal the agency's interpretation is persuasive evidence that the interpretation is the one
intended by Congress.'" CFTC v. Schor, 478 U.S. 833, 845 (1986) (quoting NLRB v. Bell
Aerospace Co., 416 U.S. 267, 274-75 (1974)); see also FDIC v. Philadelphia Gear Corp., 476
U.S. 426, 436-437 (1986); Zenith Radio Corp. v. United States, 437 U.S. 443, 457 (1978).  

     Based on this narrow understanding of purpose   viz., to eliminate what seems to be an
irrational counting methodology, not to change the definition of a "market" for results-oriented,
counter-statutory purposes    I concur in this rulemaking.  I take no position, however, as to how to
resolve the numerator-denominator inconsistency, and I look forward to reviewing the comments
on this matter.

     CONCURRING STATEMENT OF COMMISSIONER MICHAEL K. POWELL
                                
                                
Re:In the Matter of Definition of Radio Markets, Notice of Proposed Rulemaking 
                                
I concur in the decision today to conduct a Notice of Proposed Rulemaking (NPRM) for the
limited purpose of harmonizing the counting methods we use to determine both the size, and the
number of stations in a radio market that count toward the ownership cap set forth in Section
202(b)(1).  To the extent that this NPRM addresses what may be an arbitrary distinction between
counting methods, I support its issuance.  I do, however, caution the Commission to avoid using
the rulemaking process as a means to circumvent specific statutory provisions and effectuate a
           different result than Congress intended. 
                                
The NPRM asks whether the Commission should adopt a different (and more
restrictive) method for determining the relevant market because our current definition "may
undermine the structure of the statute" and produce results "that are not in the public interest." 
My single greatest problem with this proposal is one of statutory interpretation.  The effect of
eliminating the Commission's current methodology and replacing it with a commercially
defined market (such as Arbitron) would be to shrink markets, and thereby substantially limit
the number of stations one could own.  When Congress adopted its radio ownership caps,
Commission regulations defined these markets in a particular way.  That way was the law of
the land.  The Arbitron market definitions were in existence, but they were not used for
regulatory purposes, and Congress did not specifically incorporate them.  I believe proper
statutory interpretation would lead one to conclude that Congress set its numerical limits
against the market definition that prevailed in regulation at the time, and not a definition that
        had not been used for this purpose previously. 
                               
For this reason, I concur in today's decision for the sole purpose of correcting what may
be an arbitrary counting methodology for determining the size and number of stations one may
                 own in a local radio market.