Re: Disposition of Applications for the Transfer of Control of Certain Radio Licenses.
In the 1996 Telecommunications Act, Congress eliminated the limit on the
number of radio stations a single entity could own nationally and significantly relaxed the
limits the Commission had placed on ownership of radio stations in a local market.1 As a
result, we have witnessed unprecedented consolidation in the radio industry.
A genuine concern about increased levels of concentration in local radio markets
stemming from this consolidation led the Mass Media Bureau to start "flagging" certain
radio sales cases.2 The process was intended to scrutinize certain applications more
closely and subject those transactions to further competitive analysis. Since commencing
this process in 1998, the Commission has struggled with the disposition of these cases;
attempting to balance the important goals of competition and diversity with the legitimate
expectation of parties that their applications will be reviewed in a timely fashion.
The underlying difficulty in articulating a policy rationale and establishing clear
rules for a market competition analysis is that the Commission may run afoul of the
Statute. Congress established quite plainly the number of stations that could be
commonly owned in a local market--- and the proposed transfers in all of the flagged
cases comply with theses numerical caps. Does the Commission have the authority to
conduct a separate competition analysis and review, which would discount these specific
statutory provisions, because it has concerns, however genuine, about the level of
concentration in local radio markets?
This is the conundrum under which the Commission has struggled to find a
legally sustainable basis for disposing of these cases. It has been unable to do so for
nearly three years. As a consequence, a substantial number of cases have been awaiting
action, some for over two years. While I am sensitive to the issues raised by the
concentration levels in some of these cases, I do not believe the public interest is served
by inaction. Further delay is neither warranted nor just.
Therefore, after consultation with my colleagues, I asked the Bureau to review
this difficult backlog of cases and make decisions on these transfer applications. Today,
the Bureau took an important first step in addressing this backlog; disposing of 32
transactions, approximately 75% of the pending applications. The Bureau found that
based on existing rules and Commission precedent, these cases did not warrant further
delay. Over the coming weeks, the Bureau will continue this process of backlog
reduction with the remaining cases.
The Commission will have an opportunity in the pending rulemaking on radio
market definitions to review its implementation of the numerical limits imposed by the
Act. To the extent that the Commission's existing rules for determining the size and the
number of stations that count toward the cap has led to higher levels of ownership than
Congress intended, we will fix that problem. If the Commission determines that further
competitive analysis is warranted, we will consider such changes consistent with the Act
and in a proceeding that affords full and open debate on the issues.
1. See Section 202 (a) and (b), Telecommunications Act of 1996.
2. The Commission identifies for further competitive review ("flags") those applications that would result in
one entity controlling 50% or more of the advertising revenues in the relevant market or two entities
controlling 70% or more of the advertising revenues in the market.
