May 3, 2000

In the Matter of the Applications of Shareholders of CBS Corporation (Transferor) and Viacom, Inc. (Transferee) For Transfer of Control of CBS Corporation and Certain Subsidiaries, Licensees of KCBS-TV, Los Angeles, CA et al.

I concur in the fundamental decision to grant CBS’s application to transfer radio licenses to Viacom, Inc. I also concur in the Order’s disposition of matters relating to the dual network rule, national ownership cap, local television ownership rules, satellite waivers, and petitions to deny this transfer. Although I strongly support timely deregulatory action on our ownership rules in the context of the broadcast biennial review, I must at the same time acknowledge their current legal force and effect and therefore agree with their application to the instant license transfer request.

I must dissent, however, from application of the radio-television cross ownership rule to CBS/Viacom because that rule shrinks the combined entity’s statutory right to local radio ownership. To my mind, such a result is in derogation of statutory right and thus untenable under the Administrative Procedure Act. See 5 U.S.C. section 706 (providing that a “reviewing court shall . . . hold unlawful and set aside agency action . . . found to be . . . short of statutory right”).

As I stated in last year’s review of local broadcast ownership rules:

I believe that limitations on radio ownership under the one-to-a-market rule that constrict the statutory radio ownership caps in section 202(b) of the Telecommunications Act of 1996 are legally unsound. As [here],there are instances where ownership of a television station in addition to radio stations will trigger application of the one-to-a-market rule, which may impose lower caps on radio ownership than does section 202(b).

For example, under section 202(b), a broadcaster is affirmatively and specifically authorized to own as many as 8 stations in certain local markets. See 47 U.S.C. section 202(b) (“[I]n a radio market with 45 or more commercial radio stations, a party may own, operate, or control up to 8 commercial radio stations, not more than 5 of which are in the same service.”). But under the Commission’s one-to-a-market rule, which was promulgated pursuant to the generalized public interest standard, a party may not, contrary to the express language of section 202(b), own 8 radio stations if it happens to also own a television station in that market. In such a situation, the party can own only 1 television and 7 radio stations or 2 television and 6 radio stations. See Local Ownership Report at para. 9 & n.19.

This contraction of statutory ownership rights is exactly what happened to CBS/Viacom in the Sacramento, Baltimore, Los Angeles, Chicago, and Dallas-Fort Worth markets. See Memorandum Opinion & Order at paras. 29-36. Under section 202(b), as long as there are 45 radio stations in the market (an issue the Order does not even address), CBS/Viacom is by federal statute affirmatively entitled to own 8 radio stations. Yet by dint of the radio-television cross-ownership rule, the Commission forces the company to divest itself of property in order to fall within a wholly regulatory, more restrictive limit.

Again, as I have previously explained:

Nothing in section 202(b). . . indicates that radio ownership rights are contingent on non-ownership of a television station. Section 202(b) is not phrased in the conditional; it does not say that ownership of other kinds of communications properties should adversely affect the rights established by that section. Nor are the ownership rights created there limited to "radio-only" combinations, as the Commission [calls them]; rather, the provision simply speaks of radio ownership, without reference to broadcast combinations.

The one-to-a-market rule is, of course, based on the generalized "public interest" standard, whereas the caps established in 202(b) are very specific. Regulations promulgated under the general public interest grant of authority should not trump such particularized decisions by Congress. In short, the Commission cannot by rulemaking shrink statutorily granted ownership rights.

While I have my policy and even constitutional concerns with the other ownership limits applied today and hope to see them soon repealed or modified, none of them is clearly in derogation of a positive statutory right to ownership at defined levels. Because this is true of the radio-television cross-ownership rule, its operation in this Order appears to violate the Administrative Procedure Act. I cannot vote for such action, especially where, as here, the limit in question is not statutorily required.

Finally, I note my hope and expectation that other license transfer applicants will be subject to the same straightforward approach to section 309 taken in this Order – namely, application of existing statutory provisions and Commission rules to the proposed transfer, without a separate (and usually more restrictive) analysis taken pursuant to the public interest standard. I also hope and expect that other license transfer applicants will receive the same reasonable treatment when it comes to objections grounded in antitrust theory – that is, deferral to the Department of Justice. See Memorandum Opinion and Order at para. 16 (suggesting that concerns regarding potential abuse of market power should be addressed not by the Commission but by antitrust authorities); id. at n. 13 (noting that DOJ has examined the specific issue of concentration in program supply markets and thus declining to address the matter).

For the foregoing reasons, I concur in part but dissent from the relevant radio-television part of this decision.