September 17, 1996

Separate Statement
Commissioner Susan Ness

Re: Shareholders of Citicasters, Inc. and Jacor Communications, Inc.

It is with some misgiving that I vote today to approve the transfer of control of Citicasters Co. to Jacor Communications. The transaction would increase Jacor's concentration in the radio advertising market and add a VHF television station to the lineup.

Because of Jacor's dominant position in the Cincinnati market, the Department of Justice chose to review this transaction for compliance with the antitrust laws. In a settlement with the Department of Justice, Jacor is required to divest WKRQ(FM) within six months, at which time it is expected that Jacor's share of the Cincinnati radio advertising market will drop to just below 50 percent. To my knowledge, no other group owner has acquired such a high level of concentration in a radio market of this size or larger.

Such market power is of concern for two reasons. First, there is a point at which would-be competitors shy away from a market due to overconcentration. Secondly, control or influence over so many strong broadcast facilities can lead to market distortions and a diminution of independent voices, potentially undermining diversity of programming. Big is not necessarily bad. However, the public is not well served if market power is coupled with anti-competitive behavior.

Thus, I am troubled by Jacor's efforts to secure even greater market power by agreeing to finance a competitor's purchase of a non-Jacor station in Cincinnati. Jacor entered into this transaction while its settlement with the Department of Justice was pending, apparently without informing the Department.

In the proposed consent decree filed with the United States District Court for the Southern District of Ohio on August 5, 1996, Jacor had expressly agreed, among other things, to provide advance notification to the Department of Justice before acquiring any assets of or equity in any non-Jacor station in the Cincinnati market. Jacor has now advised the Justice Department that it will no longer finance that acquisition and has agreed to modifications to the proposed consent decree.

Jacor also has non-ownership relationships with three other Cincinnati radio stations controlled by Charles E. Reynolds. In approving a prior transaction, the Commission accepted representations by Jacor that limit the joint sales of advertising time on those facilities. Those restrictions will continue to apply.

The FCC order today requires Jacor to seek prior Commission approval of any agreements or understandings that would allow Jacor to market or sell advertising time for any non-Jacor station in Cincinnati, with certain limited exceptions. Under these circumstances, I approve this transaction.