CONCURRING STATEMENT OF COMMISSIONER MICHAEL POWELL

Re: Applications of Shareholders of AMFM, Inc. (Transferor) and Clear Channel Communications, Inc. (Transferee) for Consent to the Transfer of Control of AMFM Texas Licenses Limited Partnership, et al., File Nos. BTC/BTCH/BTCFTB/BTCFT-19991116AJP-BDH, File Nos. BAL/BALH/BALFTB-20000328ACQ-AHJ, BAL-20000606ABT, BAL/BALH-20000407AAY-ABK, BAL/BALH-20000427AAT-ABD

I support the Commission's decision to grant the transfer of licenses from AMFM, Inc. to Clear Channel Communications, Inc. I write separately, however, to reiterate my continuing concern about the manner in which my colleagues apply our public interest authority in cases such as this. The approach is unnecessarily complex, redundant and ill-suited to meet the needs of the fast-paced, innovation-driven communications marketplace.

The Commission is required to examine a license transfer (often in the context of a merger) and determine if it is in the public interest. ⁽¹⁾

If it is, it will be approved. The public interest standard is exceedingly broad, offering very little to guide the Commission's examination. One can discern, however, three main concerns that the Commission has focused on in its public interest analysis. First, it considers whether the transaction would squarely violate the Communications Act. Second, it considers the effect of further concentration in the market and whether undue market power or other anticompetitive effects will result. Third, it considers how the transaction will affect diversity in the market.

In the context of mass media transactions, the Commission's analysis should be simplified by the extensive structural ownership rules Congress and the Commission have promulgated. For example, there are limits on the number of radio and television stations that can be owned in a local market. ⁽²⁾

There is a national television ownership cap. ⁽³⁾

There are rules against cross-ownership of different media. ⁽⁴⁾

And, there are cable horizontal ownership rules. ⁽⁵⁾

All of these rules have been developed to effectuate the twin goals of limiting the effect of market power and promoting diversity of viewpoints in the market. ⁽⁶⁾

The benefits of prophylactic rules--whether you agree or disagree with their content--arethat they are clear and provide some certainty to marketplace participants. Additionally, these rules are touted as having the benefit of administrative efficiency in reviewing combinations.

In other areas, Congress and the Commission have not set out strict structural rules. As a result, the Commission reviews these transactions in a more ad hoc, case-specific manner. This is the case with telephone mergers. In this area, there are no rules on the number of lines or central offices that a company may own. Indeed, the Commission has been criticized for arbitrary, ad hoc decisions on such mergers, for there were not clearly articulated rules, principles or standards to guide our review. Partially in response to this criticism, the Commission developed a four-prong standard to guide its review in such mergers. ⁽⁷⁾

In this case, one is left uncertain as to the applicability of the four-prong standard to broadcast mergers. ⁽⁸⁾

Nevertheless, under its purported analytical framework, the Commission reviewed the merger to determine if it would "otherwise serve the public interest," ⁽⁹⁾

even where clear structural rules apply and the applicants comply. Though the Commission has not reached a decision that differs from what the rule would require, the Order clearly has placed a marker down for the proposition that the Commission could override the result of the rule if it chose, based potentially on the vague four-prong standard or some other ambiguous standard of acceptable diversity and concentration. I reject this approach and lament the confusing and laborious course being set.

The extensive rulemaking proceedings used to develop our structural rules take full account of the Commission's diversity goals and concentration concerns, based on a very comprehensive record. By their very nature, such rules will always be both over-inclusive and under-inclusive. Yet, those marginal misapplications are thought to be balanced by the benefits of clarity and efficiency. All such benefits are eviscerated, however, if after applying the rule we then embark on an ad hoc review under the public interest standard with the real possibility of reaching a completely different result. I believe broadcasters are left to wonder what showing they must make to ensure a proposed license transfer will be approved. At a time when the Commission is being hotly criticized for taking too long to review mergers, I fail to see the wisdom of extending our review, applying two bodies of law designed to achieve the same basic objectives.

The four-prong test is hardly precise and indeed, in some parts, may be no more useful than the venerable "public interest" phrase itself. ⁽¹⁰⁾

I would adhere to a structural rule where applicable and not cloud its application with the specter of a decidedly more subjective review. ⁽¹¹⁾

I am particularly perplexed by this new-found commitment to case-specific review, especially by a Commission that touts the benefits of clarity and predictability in defense of its refusal to yield much on the structural rules when they are reviewed biennially.

I am troubled by the suggestion that the Commission might discount the effect of its own rules in a license transfer review using the four-prong test, but I am more deeply bothered by the growing view that it might disregard or discount fairly specific statutory provisions. For example, Congress established quite plainly the number of radio stations that could be commonly owned in a local market. ⁽¹²⁾

Yet, the Commission seems to be increasingly of the view that it could stop transactions that would not run afoul of these statutory limits on both concentration grounds (too much market power) and on diversity grounds (too few distinct voices left in the market). ⁽¹³⁾ If both of these bases are legitimate, what possibly did Congress mean by setting specific numbers of stations in a market? Congress' pronouncement must reflect either its comfort with that level of concentration, or its comfort with the level of remaining diversity. (The latter, in my view, being the case.) My colleagues seem to think these provisions are merely "suggestions."

In short, where there are clearly applicable structural rules, reflecting the Commission's or Congress' diversity and concentration judgments, I would find a license transfer to be in the public interest if the parties satisfied the rule. I would not engage in an additional, more subjective, evaluation to determine if the transfer would "otherwise serve the public interest," using the four-prong standard or some other ambiguous standard. This additional burden places more weight on a review process that is already laboring under the demands of a fast-moving market and an impatient Congress.