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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

March 20, 2000


Re: Mass Media Bureau Approval of Radio License Transfers
in Youngstown-Warren, Ohio and Lafayette, Louisiana

These cases are a good illustration of how the Commission's current radio ownership policies are not only illogical, but are doing serious damage to the public interest.

As an initial matter, these appear to be the latest in a series of transactions that should not have been approved under our rules limiting the number of stations an entity can own in a market.(1) In Youngstown, under the Commission's rules for counting the number of radio stations in a "market" (based on overlapping signal contours), Cumulus will own nine stations in two of the markets implicated by the deal. That exceeds the eight-station ownership limit that applies even to the nation's largest markets (those with 45 or more stations). Similarly, in Lafayette, Citadel will own eleven stations in one of the markets, well over the eight-station limit.

As in all of these cases, the Bureau's approval is accomplished through a bit of regulatory sleight-of-hand. After taking a broad definition of "market" to include all nine Cumulus stations in and around Youngstown, and all eleven Citadel stations in and around Lafayette (thus increasing the number of stations that Cumulus and Citadel can own in those markets), the Bureau then simply ignores some of those stations when counting how many stations Cumulus and Citadel will own towards the ownership cap. Tellingly, this practice of shrinking the market has never been codified as a Commission rule. And no wonder - there is no rational explanation for including some stations as being in the "market" for one purpose and not the other.

But the Commission's policies have real-world effects that go beyond bad economics. In Youngstown, if all proposed transactions are approved, the two largest competitors will control 95.8% of the revenue in the market; in Lafayette, the two largest competitors will control 71.2% of the revenue. There are two Commission policies that permit this to happen. First, we define radio markets by overlapping signal contours rather than economic reality. In the television duopoly context, we recently changed our definition of a local television market from a contour-based definition to a DMA-based definition. At the time, we stated that the DMAs "are a better measure of actual television viewing patterns, and thus serve as a good measure of the economic marketplace in which broadcasters, program suppliers and advertisers buy and sell their services and products."(2) The same reasoning could apply to radio Arbitron markets. Arbitron markets reflect the number of stations that actually target listeners in a particular community because they are the listeners that advertisers pay to reach. We ought to examine whether Arbitron markets would be a more accurate measure of marketplace reality. Youngstown and Lafayette, for instance, are not among the largest markets in the nation, and our ownership limits should reflect that fact.(3)

Next, the Commission compounds the problem by taking its contour definition of radio markets and engaging in the definitional game-playing described above. Thus, not only is the contour-based definition less realistic than Arbitron, but the Commission does not even apply a rational version of its less realistic choice. The end result is a local ownership rule that makes little sense, other than to provide cover for a level of concentration that would otherwise be indefensible.

We need to fix our local ownership rules or begin to meaningfully apply Section 310(d)'s public interest standard to these license transfers. We cannot continue to do neither.

1   See, e.g., Press Statement of Commissioner Gloria Tristani re: Applications for Radio License Transfers in Augusta-Waterville, Maine (rel. Feb. 28, 2000); Press Statement of Commissioner Gloria Tristani re: Mass Media Bureau's granting of applications to transfer radio licenses from Fuller-Jeffrey Broadcasting to Citadel Broadcasting in Portland, Maine (rel. Aug. 19, 1999); Dissenting Statement of Commissioners Susan Ness and Gloria Tristani, In re Applications of Pine Bluff Radio, Inc. and Seark Radio, Inc. File Nos. BAL-970103EA, BALH-970103EB, BALH-970103EC (rel. April 12, 1999); Joint Statement of Commissioners Susan Ness and Gloria Tristani, In re Station KBYB(FM), El Dorado, Arkansas, 13 FCC Rcd 15685 (1998).

2    See Report and Order, FCC 99-209 (rel. Aug. 6, 1999) para. 47.

3    Youngstown-Warren is the 89th largest Arbitron market and contains only 23 stations, meaning that Cumulus would be limited to no more than 6 stations (Cumulus will own 8). Similarly, Lafayette is the 128th largest Arbitron market and contains 29 stations, meaning that Citadel would also be limited to no more than 6 stations (Citadel will own 8).