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Concurring in Part and Dissenting in Part

In the Matter of the Applications of Shareholders of AMFM, Inc. and Clear Channel Communications, Inc., for Consent to the Transfer of Control of AMFM Texas Licenses Limited Partnership, et al.

Although I support today's decision to approve the transfer of AMFM, Inc.'s licenses to Clear Channel Communications, Inc., I cannot support the majority's determination to once again supplement the review of the Justice Department and the detailed provisions of our rules with an amorphous public interest analysis. As I have explained previously, this analysis is not only duplicative of the efforts of other federal agencies, but the four-factored test upon which it is based is so loose as to be practically limitless in its reach. (1)

In the particular context of radio transactions, the Commission's "public interest" review focusing on concentration of ownership adds insult to injury. As I have said in prior radio license transfer proceedings,

the Commission is [unlawfully] using its generalized "public interest" authority under section 310 to override and effectively nullify the specific judgments that Congress made about acceptable levels of concentration in radio in section 202(b) of the '96 Act[, which sets statutory caps for local radio ownership.] The creation of a regulatory scheme under section 310 that limits ownership to a greater degree than does section 202(b), the specific section on ownership limits, is an end-run around Congress' policy judgment. What authority does the Commission have to "conduct additional analysis of the ownership concentration in the relevant market" when that concentration is expressly permissible under the Communications Act? Whatever the role of competitive analysis as a general matter, it is clear to me that in the radio context, Congress has plucked that issue -- as expressed in ownership limits -- out of the ambit of the public interest standard. . . .

In short, the Commission cannot use section 310 to deprive a party of ownership rights to which he is entitled under subsection 202(b). (2) Unfortunately, this Order again assumes the authority to do just that.

Furthermore, I must note the nonsensical lengths to which this Order goes in the rote application of its new economic analysis. I fail to see the point of analyzing the "competitive effects" of the license transfers in those markets where Clear Channel currently owns no stations. (3) By definition, there will be no increase in the concentration of ownership levels in these markets; ownership will simply change hands.

Finally, I cannot let pass a deeply disturbing suggestion on the face of the Chairman's statement. Specifically, he states that:

When Clear Channel announced this merger, its Chairman publicly and voluntarily committed that Clear Channel would provide opportunities for minority companies to purchase stations divested as a result of this transaction. Clear Channel followed through on this commitment. To complete this merger, Clear Channel will spin off approximately 40 stations to small and minority businesses. These spin-offs represent the most significant one-time increase in minority ownership in history and mitigate somewhat the concentration problems presented by this combination.

Separate Statement of Chairman William E. Kennard. (4) If the approval of these proposed license transfers were conditioned on an understanding - express or otherwise - that Clear Channel sell any divested stations to buyers of a particular race, this entire Order would be infected by a flagrant violation of the Equal Protection Clause.

Over and over again, the Supreme Court has held, and the lower courts have reaffirmed, that government decisionmaking on the basis of race is presumptively unconstitutional. (5) Just as in City of Richmond v. Croson, (6) in which the Court struck down a minority set-aside for construction contracts, any condition that Clear Channel sell a certain amount of stations to minority buyers would "den[y] certain citizens the opportunity to compete for [those stations] based solely upon their race." (7)

Here, of course, there is no evidence that minority buyers of radio stations historically have been discriminated against in the marketplace -- the bare minimum one would have to show in order successfully to defend a buyer's preference such as the implied one. Given the lack of any proof of this sort, a reviewing court would likely suspect the "illegitimate" regulatory motive of "simple racial politics," (8) to use the Court's phrase, to lurk behind the condition.

Whether the Commission (9) can evade judicial review of this transparent circumvention of the core requirements of Equal Protection by omitting discussion of the spin-offs from the Order, and instead relying on extra-record "voluntary" commitments by the regulated party, remains to be seen. (10)

For the foregoing reasons, I concur only in the license transfer approval and dissent from those sections of the Order that engage in the additional economic analysis of the transfers.


1   See e.g., Separate Statements of Commissioner Harold W. Furchtgott-Roth, In Re Applications for Consent to the Transfer of Control of Licenses and Section 214 Authorizations from MediaOne Group, Inc., Transferor, to AT&T Corp. Transferee, CS Docket No. 99-251 (rel. June 6, 2000); In Re Applications of Ameritech Corp., Transferor, and SBC Communications Inc., Transferee, for Consent to Transfer Control of Corporations Holding Commission Licenses and Lines Pursuant to Sections 214 and 310(d) of the Communications Act and Parts 5, 22, 24, 25, 63, 90, 95 and 101 of the Commission's Rules, CC Docket No. 98-141 (rel. Oct. 8, 1999). The Commission is scrupulously vague as to whether this Order applies the four-factored test. See supra at note 9. I assume that the test is recited here for some substantive reason and thus address it merits; surely it would verge on the arbitrary to apply the test in every Bureau but the Mass Media Bureau. At the same time, I must note that even this capacious test cannot be read to encompass the Order's economic analysis of concentration issues: that analysis is not related to the Act or our regulations (prongs one and two) (indeed, all statutory and regulatory provisions on local ownership limits are satisfied here), nor does it have to do with enforcement of the Act (prong three) or the identification of affirmative benefits (prong four).

2   Separate Statement of Commissioner Harold Furchtgott-Roth in In Re Application of Great Empire Broadcasting, Inc. and Journal Broadcast Corp. for Transfer of Control of Omaha Great Empire Broadcasting, Inc., Licensee of WOW(AM) and WOW(FM), Omaha, Nebraska, 14 FCC Rcd 11145 (1999) (emphasis added).

3   See supra at paras. 16-22.

4   Although the Chairman's statement formally denies reliance on this action by Clear Channel, see Kennard Statement at 1 (asserting that conduct of divestitures was "unrelated to our analysis"), the rest of the statement belies this disclaimer. The statement makes plain that he considered the sales to minority buyers as a factor that mitigated the increased concentration created by the merger, thus helping him to see his way clear to final approval of these transfers. See id (stating that "the way Clear Channel conducted these divestitures provided a significant additional benefit"); id. (stating that "the spin-offs do not assuage all" - but therefore presumably some - "of my concerns about increasing concentration"). Moreover, as a matter of simple common sense, if the spin offs were not relevant to the Chairman as decisionmaker, why are they mentioned, indeed lauded, in his official statement? The disclaimer is legal boilerplate, designed as a shield against the issue I raise here. Finally, even if one accepts the assertion that the spin offs were not pertinent to official decisionmaking here, which, as I have tried to explain, strains credulity in light of the Chairman's own statement, statements like this are still inappropriate. For they suggest that regulated companies may earn regulatory brownie points by engaging in certain conduct (which would be clearly illegal if required by government) favored by agency officials.

See also Press Release, Statement of FCC Chairman William Kennard on Minority Broadcast Ownership (Feb. 16, 1999) ("I am encouraged to learn that Clear Channel Communications and Jacor Communications have agreed to sell nine radio stations to three minority-owned companies as part of the proposed Jacor/Clear Channel merger. While I have not reviewed the full details of these particular transactions and cannot comment on the specifics of the pending merger, I do want to commend these companies for their commitment to seeking out minority broadcasters as potential buyers and for their willingness to step forward and offer new station ownership opportunities to minority companies.").

5   See, e.g., Adarand Constructors, Inc. v. Pena, 515 U.S. 200 (1995); Lutheran Church-Missouri Synod v. FCC, 141 F.3d 344 (1998).

6   488 U.S. 469 (1989).

7   Id. at 493.

8   Id.

9   Although I use the term "Commission," I cannot say with certainty who did and did not participate in this apparent agreement (although the Chairman clearly thinks that he did) because I was not privy to any "promise[s]" that were given or received in connection with these applications for license transfers.

10   On top of the constitutional dimensions of the Chairman's suggestion regarding the spin-offs, I have procedural and jurisdictional concerns. First, the condition that he mentions is entirely extra-record, thus raising problems under the Administrative Procedure Act. Allusions to extra-record conditions have the additional and unfortunate effect of making outside parties wonder what other, unknown conditions might be attached to this transfer; such impressions are highly damaging to the institutional authority of this Commission. Second, nothing in the Communications Act indicates statutory authority to designate buyers of broadcast property sold to comply with the Act or our rules.