SEPARATE STATEMENT OF COMMISSIONER SUSAN NESS
In Re: Applications of Shareholders of AMFM, Inc. (Transferor) and Clear Channel Communications, Inc. (Transferee) for Consent to Transfer of Control of AMFM Texas Licenses Limited Partnership, et al.
The merger of the Clear Channel and AMFM radio station groups creates the largest radio licensee in U.S. history, resulting in roughly 900 stations under common ownership. Before the Telecommunications Act of 1996, broadcasters were limited to attributable interests in no more than 20 AM and 20 FM stations. (1) Thus, the combination approved in this order is over 22 times the maximum number of stations allowed just four years ago. Combinations of this magnitude irreversibly alter the competitive landscape for radio and change the very nature of radio broadcasting.
In the 1996 Act, Congress clearly instituted fundamental changes in the broadcast ownership limits. I believe that in approving the combination of roughly 900 stations in the Clear Channel/AMFM merger, we have adhered to both the letter and spirit of the 1996 Act.
While I voted to approve this merger, I write separately to comment on the duty of this Commission to determine whether a proposed transfer is in the public interest. Some of my colleagues argue that the Commission may not conclude that a combination results in an impermissible level of concentration, if the combination meets the numerical limits set forth in the 1996 Act. (2) I respectfully disagree.
The public interest standard was codified in the Communications Act of 1934 (3) and survived the 1996 amendments to that Act. The relevant provisions of the Telecommunications Act of 1996 established an absolute cap on the number of stations an entity may own in a given market and eliminated the numerical ceiling on nationwide ownership. (4) These provisions did not, however, require the Commission to approve a combination if the resultant ownership level were at or below the ceiling. In other words, they did not eliminate the "public interest" requirement codified elsewhere in the statute.
The Commission derives its authority from Congress. We must faithfully implement the laws Congress enacts and must not substitute our judgment for the will of the Congress, especially when that directive is clear. Regarding radio mergers, the Commission bears a very heavy burden to justify deviation from the numerical limits imposed by Congress. I believe, however, that Congress preserved the public interest test as a "pressure valve." As stewards of the public airwaves, we have an obligation to exercise our judgment carefully in operating that valve.
For example, I do not believe that Congress intended for the Commission to ignore the public interest where, as a result of a merger, one party owns all of the strongest radio facilities in a market and the combined market share approaches 100% --even if the codified ownership limits are observed. Moreover, the Commission's own flawed market definition creates a disparity in the number of stations one can own that serve the same community, depending upon the coverage of the owner's strongest signal. (5)
The radio marketplace has changed dramatically over the past four years. Ownership consolidation, the Internet, and satellite digital radio are rapidly transforming this audio service. It is timely to examine the impact of our ownership rules on the market, on programming, and on diversity of voices, as we determine what constitutes the "public interest." Such a determination is best made in the context of a rulemaking proceeding, after ample notice and public comment, rather than in the course of an adjudication.
Finally, fairness dictates that the radio industry be informed of the ownership "rules of the road" before companies enter into transactions. Consistency and adherence to predictable timeframes for completion of a merger review are critical to a properly functioning marketplace. We must not hold up approval (or disapproval) of license transfers while we debate matters more properly decided in a rulemaking.
1 47 C.F.R. § 73.3555(e)(1) (1992).
2 Telecommunications Act of 1996, Pub. L. No. 104-104, § 202(b) (1996).
3 See, e.g., 47 U.S.C. § 310(d) (Commission must find license transfers serve "the public interest, convenience, and necessity").
4 Telecommunications Act of 1996 at § 202(a).
5 See Dissenting Statement of Commissioner Susan Ness and Commissioner Gloria Tristani, In Re: Applications of Pine Bluff Radio, Inc. and Seark Radio, Inc., 14 FCC Rcd. 6594, 6606 (1999) (for purposes of counting the number of stations contributing to "the market," Commission counts any station whose principal community contour intersects with any mutually overlapping station in the proposed combination; when counting the number of stations an entity may own within that market, Commission shrinks "the market" to only those stations that overlap with every station proposing to have common ownership).