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DEPARTMENT OF JUSTICE Constitution Avenue, NW., Washington, The 60-day period for public comments, DC 20001. (The United State’s during which two comments were Antitrust Division Certificate of Compliance with received as described below, expired on Provisions of the Antitrust Procedures July 23, 2003.1 Response to Public Comments on the and Penalties Act will be made available Proposed Final Judgment in United at the same location shortly after they I. Background States v. Univision Communications are filed with the Court.) Copies of any As explained more fully in the Inc. of these materials may be obtained upon Complaint and CIS, this transaction request and payment of a copying fee. Pursuant to the Antitrust Procedures raised competitive concerns relating to and Penalties Act, 15 U.S.C. 16(b)–(h), J. Robert Kramer II, the sale of advertising time on Spanish- the United States hereby publishes the Director of Operations, Antitrust Division. language radio stations in several two public comments on the proposed geographic markets. HBC is the nation’s Final Judgment in United States v. In the United States District Court for largest Spanish-language radio Univision Communications Inc., Civil the District of Columbia broadcaster. Univision, the largest No. 1:03V00758, filed in the United Civil Action No. 1:03CV00758; Judge: Hon. Spanish-language media company in the States District Court for the District of Rosemary M. Collyer Colombia, together with the responses United States, owns a significant equity of the United States to the comments. United States of America, Plaintiff, v. interest, and possesses governance On March 26, 2003, the United States Univision Communications Inc., and rights, in Entravision Communications filed a Complaint alleging that Hispanic Broadcasting Corporation, Corporation (‘‘Entravision’’), another Univision Communications Inc.’s Defendants, Response to Public Spanish-language media company that proposed acquisition of Hispanic Comments is HBC’s principal competitor in Broadcasting Corp. would substantially Pursuant to the requirements of the Spanish-language radio in many lessen competition in the sale of Antitrust Procedures and Penalties Act, markets. The Complaint alleges that, advertising time on Spanish-language 15 U.S.C. § 16(b)–(h) (‘‘Tunney Act’’), due to Univision’s substantial equity radio stations in many geographic the United States hereby responds to the interest and governance rights in markets, in violation of Section 7 of the public comments received regarding the Entravision, Univision’s proposed Clayton Act. The proposed Final proposed Final Judgment in this case. acquisition of HBC would substantially Judgment, filed at the same time as the After careful consideration of these lessen competition in provision of Complaint, requires Univision to comments, the United States continues Spanish-language radio advertising time exchange its Entravision shares for a to believe that the proposed Final to a significant number of advertisers in nonvoting equity interest, divest a Judgment will provide an effective and several geographic markets in the substantial portion of its ownership in appropriate remedy for the antitrust United States. Entravision, give up its seat on violation alleged in the Complaint. The The proposed Final Judgment, if Entravision’s Board of Directors, United States will move the Court for entered, would require Univision to eliminate certain rights Univision has to entry of the proposed Final Judgment reduce its equity interest in Entravision veto important Entravision actions, and after the public comments and this to 15 percent of the outstanding shares restrain certain conduct that would Response have been published in the interfere with the governance of Federal Register, pursuant to 15 U.S.C. within three years from the filing of the Entravision’s radio business. The 16(d). proposed decree and to 10 percent proposed Final Judgment particularly On March 26, 2003, the United States within six years of such filing. The requires Univision, presently owning filed the Complaint in this matter proposed decree would also require approximately thirty percent of alleging that the proposed acquisition of Univision to convert all of its Entravision, to divest down to fifteen- Hispanic Broadcasting Corporation Entravision equity into a nonvoting percent ownership within three years, (‘‘HBC’’) by Univision Communications, class of stock; to relinquish its right to and ten-percent ownership within six Inc. (‘‘Univision’’) would violate Section place directors on Entravision’s Board of years. Public comment was invited 7 of the Clayton Act, as amended, 15 Directors; to eliminate certain of within the statutory 60-day comment U.S.C. 18. Univision’s rights to veto important period. The public comments and the Simultaneously with the filing of the Entravision actions; and to refrain from repsonses of the United States thereto complaint, the United States filed a certain conduct that would interfere are hereby published in the Federal proposed Final Judgment and a with the governance of Entravision’s Register, and shortly thereafter these Stipulation signed by the United States radio business. documents will be attached to a and the defendants consenting to the Entry of the proposed Final Judgment Certificate of Compliance with entry of the proposed Final Judgment would terminate this action, except that Provisions of the Antitrust Procedures after compliance with the requirements the Court would retain jurisdiction to and Penalties Act and filed with the of the Tunney Act. Pursuant to those construe, modify, or enforce the Court, together with a motion urging the requirements, the United States filed a provisions of the proposed Final Court to enter the proposed Final Competitive Impact Statement (‘‘CIS’’) Judgment and to punish violations Judgment. Copies of the Complaint, the in this Court on May 7, 2003; published thereof. proposed Final Judgment, and the the proposed Final Judgment and CIS in Competitive Impact Statement are the Federal Register on May 21, 2003; 1 On September 22, 2003, the Federal currently available for inspection in and published a summary of the terms Communications Commission announced that it Room 200 of the Antitrust Division, of the proposed Final Judgment and CIS, granted Univision’s and HBC’s applications for Department of Justice, 325 Seventh together with directions for the transfer of control that were required in order for Street, NW., Washington, DC 20530 submission of written comments the transaction to proceed. See Memorandum Opinion and Order, FCC 03–218 (located at http:/ (telephone: 202–514–2481) and at the relating to the proposed Final Judgment, /hraunfoss.fcc.gov/edocs&_public/attachmatch/ Clerk’s Office, United States District in the Washington Post for seven days FCC–03–218A1.pdf.). Univision and HBC closed Court for the District of Columbia, 333 on May 23, 2003, through May 29, 2003. their merger the same day.

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II. Legal Standard Governing the affected by a proposed antitrust decree IV. The United States’ Response to Court’s Public Interest Determination must be left, in the first instance, to the Specific Comments Upon the publication of the public discretion of the Attorney General’’ Because both comments raise the comments and this Response, the (citations omitted)). general issue of whether the effects of United States will have fully complied Moreover, the United States is the merger should be analyzed in light with the Tunney Act and will move the entitled to ‘‘due respect’’ concerning its of an ‘‘overall’’ Spanish-language media Court for entry of the proposed Final ‘‘prediction as to the effect of proposed market, the United States will first Judgment as being ‘‘in the public remedies, its perception of the market respond to that issue. It will then interest.’’ 15 U.S.C. 16(e). The Court, in structure, and its view of the nature of respond to the specific points AAI and making its public interest the case.’’ Archer-Daniels-Midland Co., SBS raised concerning whether the determination, should apply to 272 F. Supp. 2d at 6 (citing Microsoft, remedy addresses the competitive harm deferential standard and should 56 F.3d at 1461). raised in the Complaint. withhold its approval only under A. Allegations Not Raised in the limited conditions. Specifically, the III. Summary of Public Comments Compliant Are Irrelevant to Whether the Court should review the proposed Final The United States received comments Proposed Final Judgment Is in the Judgment in light of the violations from two entities, the American Public Interest charged in the complaint and ‘‘withhold Antitrust Institute (‘‘AAI,’’ comment approval only if any of the terms appear attached as Exhibit 1) and Spanish 1. SBS’s Proposed Market and Alleged ambiguous, if the enforcement Broadcasting System, Inc. (‘‘SBS,’’ Harm Are Extraneous to the Competitive mechanism is inadequate, if third comment attached as Exhibit 2). Issues Raised in the Complaint parties will be positively injured, or if The Complaint alleges that the the decree otherwise makes ‘a mockery AAI takes the position that the United States’ CIS fails to address and evaluate relevant market consists of the provision of judicial power.’’’ Mass. School of of advertising time on Spanish-language ‘‘the consequences of this merger in Law v. United States, 118 F.3d 776, 783 radio stations to the significant number conventional terms in an overall market (D.C. Cir. 1997) (quoting United States of advertisers that consider Spanish- consisting of Spanish-language media, v. Microsoft Corp., 56 F.3d 1448, 1462 language radio advertising to be a examining such traditional criteria as (D.C. Cir. 1995)). particularly effective advertising advertising effects [and] the consumer It is not proper during a Tunney Act medium. See Complaint ¶¶12–15. SBS, interest in diversity of sources of review ‘‘to reach beyond the complaint however, takes the position that the political and cultural information.’’ AAI to evaluate claims that the government complaint should have raised additional cmt. at 1. AAI also states that the United did not make and to inquire as to why allegations of harm based on purported States’ CIS fails to explain why the they were not made.’’ Microsoft, 56 F.3d effects in a combined Spanish-language proposed Final Judgment does not at 1459; see also United States v. radio and television market. SBS cmt. at require the elimination of all rights Archer-Daniels-Midland Co., 272 F. 1–2. Supp. 2d 1, 6–7 (D.D.C. 2003) (rejecting Univision currently possesses in The Complaint’s market definition argument that court should consider Entravision and the divestiture of all does not extend to the issues raised by effects in markets other than those stock Univision holds in Entravision. SBS, nor should it. The market raised in the complaint); United States AAI cmt. at 1 n.2. These points are definition analysis in the Complaint v. Pearson PLC, 55 F. Supp. 2d 43, 45 similar to SBS’s comments on these properly begins by examining how (D.D.C. 1999) (noting that a court should issues and are addressed below. advertisers individually negotiate not ‘‘base its public interest Additionally, AAI argues that the transactions with radio broadcasters determination on antitrust concerns in Division should have considered indicia such as Entravision and HBC. The markets other than those alleged in the of harm to non-price competition, such resulting price for advertising time government’s complaint’’). Because as quality and innovation. reflects the circumstances of these ‘‘[t]he court’s authority to review the SBS, a Spanish-language radio individual negotiations and the decree depends entirely on the company that competes in many preferences of each advertiser. The government’s exercising its markets with HBC and Entravision, Complaint’s market definition reflects prosecutorial discretion by bringing a states that the United States should have these individualized negotiations by case in the first place,’’2 it follows that alleged harm in its Complaint based on looking at the options available to ‘‘the court is only authorized to review purported effects of the transaction on a individual advertisers. The Complaint the decree itself,’’ and not to ‘‘effectively ‘‘Spanish-language broadcasting alleges that a significant number of redraft the complaint’’ to inquire into market.’’ SBS cmt. at 1–2. SBS further advertisers exist who do not have other matters the United States might claims that the transaction will increase reasonable alternatives to advertising on have but did not pursue. Microsoft, 56 Univision’s incentives (1) to refuse to F.3d at 1459–60; see also United States Spanish-language radio; in other words, deal with or discriminate against v. Western Elec. Co., 993 F.2d 1572, these advertisers cannot effectively Spanish-language radio competitors 1577 (DC Cir. 1993) (noting that a switch to other media in the face of a who seek to advertise through Univision Tunney Act proceeding does not permit small but significant increase in the and (2) to force advertisers who wish to ‘‘de novo determination of facts and price of advertising time on Spanish- advertise through both radio and issues’’ because ‘‘[t]he balancing of language radio. This set of advertisers television to purchase time from both competing social and political interests forms the relevant market alleged in the Univision and HBC. Id. at 3. In addition, Complaint. SBS argues that the United States’ SBS does not appear to take issue 2 It is the United States’ responsibility to investigate a transaction and decide what remedy fails to solve the competitive with the theoretical framework allegations to raise in any challenge it may bring. concerns in the Spanish-language radio underlying the Complaint’s market See Heckler v. Chaney, 470 U.S. 821, 831–32 (1985) markets raised in the Complaint definition. Rather, it alleges that there is (‘‘[A]n agency’s decision not to prosecute or enforce, whether through civil or criminal process, because, according to SBS, Univision another market to consider; namely, a is generally committed to an agency’s absolute will be able to exercise undue influence purported market consisting of a set of discretion.’’). over Entravision. Id. at 1, 4–6. advertisers that are dependent on

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Spanish-language television and radio. Corp., 215 F. Supp. 2d 1, 14–15 (D.D.C. of a wide range of advertisers and The Complaint, however, makes no 2002) (describing legislative history review of over a million pages of such factual allegation. The proposed relating to CIS) (quoting 119 Cong. Rec. documents provided by the defendants market differs significantly from the one at 3452 (1973) (statement of Senator and other entities. In the end, the alleged in the Complaint and would Tunney)). To that end, the Tunney Act evidence did not support the claims require markedly different supporting provides that the CIS shall ‘‘recite’’ the proffered by the comments. facts to be justified. Moreover, market following: a. The evidence did not justify a definition is but one step toward the (1) The nature and purpose of the combined media market for advertisers. ultimate goal of determining proceeding; The United States has traditionally competitive effects. The Complaint (2) A description of the practices or treated radio and television as separate alleges that the transaction would likely events giving rise to the alleged antitrust markets. Past investigations cause anticompetitive effects with violation of the antitrust laws; involving general-market (English- regard to Spanish-language radio (3) An explanation of the proposal for language) media mergers revealed that (Complaint ¶¶ 24–27); it makes no such a consent judgment, including an few advertisers consider the two media allegations regarding a combined explanation of any unusual to be close substitutes; rather, most television and radio market. So, SBS circumstances giving rise to such advertisers viewed the two media as asks not only that the court redraft the proposal or any provision contained separate or complementary products complaint to include an additional therein, relief to be obtained thereby, given the qualitative differences market but also that the court impose a and the anticipated effects on between the two media.3 In examining competitive effects analysis based on competition of such relief; whether this ‘‘separate market’’ that new market to find cognizable (4) The remedies available to potential conclusion applied in this transaction, harm. private plaintiffs damages by the alleged the United States recognized that As discussed above, the United States violation in the event that such proposal Univision has a strong presence in is entitled to deference as to the case it for the consent judgment is entered in Spanish-language television and that, in brings, and, as Microsoft makes clear, it such proceeding; certain geographic markets, there are a is not proper during a Tunney Act (5) A description of the procedures limited number of other Spanish- review ‘‘to each beyond the complaint available for modification of such language television stations with ratings to evaluate claims that the government proposal; and that would be attractive to advertisers (6) A description and evaluation of did not make and to inquire as to why trying to reach Spanish-language alternatives to such proposal actually they were not made.’’ Microsoft, 56 F.3d viewers. Nevertheless, the evidence considered by the United States. at 1459. The Tunney Act does not garnered in this investigation showed authorize the Court to consider 15 U.S.C. 16(b). The United States’ CIS has satisfied all of these requirements. the same qualitative differences between allegations not raised in the Complaint television and radio that exist for based on concerns raised by a member More specifically, the CIS explains the nature and purpose of the proceeding (at general-market advertisers also exist for of the public. Accordingly, SBS’s Spanish-language advertisers. In the suggestion that the Complaint is 1–3), describes the events that gave rise to the alleged violation of the antitrust end, the investigation did not produce defective for failing to allege harm in a sufficient evidence to support the combined Spanish-language television law (at 3–9), explains the proposed Final Judgment (at 9–15), explains the proposition that a significant number of and radio market should be rejected as advertisers considered Spanish- a matter of law. remedies available to potential private litigants (at 15), explains the procedures language television and Spanish- The CIS Properly Addresses the Market available for modifying the proposed language radio to be sufficiently Effects Relevant to the Allegations in the Final Judgment (at 15–16), and interchangeable to support the Complaint ‘‘combined’’ market proposed by the describes and evaluates alternatives to 4 AAI takes the position that the United the proposed Final Judgment (at 16–17). comments. States has not satisfied its requirements There is simply no requirement that the b. The United States considered non under the Tunney Act because the CIS Government identify purported effects it price competition. AAI also argues that fails to identify the competitive effects did not allege in the Complaint or the United States should examine of the transaction in an ‘‘overall’’ explain why it did not make certain indicia of harm other than price, such Spanish-language media market and allegations in the Complaint. as quality and innovation. AAI cmt. at fails to justify the United States’ Accordingly, AAI’s challenge to the 4–5. The United States, in fact, decision not to challenge the transaction sufficiency of the CIS fails. considered such indicia during this based on those purported effects. This 3 position is not valid. Not only is the 3. The Government’s Investigation Did See, e.g., Complaint ¶¶ 11–14, United States v. Clear Channel Communications, No. 1:00CV02063 Court’s review limited to the case Not Demonstrate the Likelihood of Substantial Harm in an ‘‘Overall’’ (D.D.C. filed Aug. 29, 2000); Complaint ¶¶ 34–41, actually brought by the United States, United States v. Chancellor Media Company, Inc., there is no requirement that the United Spanish-Language Media Market No. CV–97–496 (E.D. N.Y. filed Nov. 6, 1997); States disclose its decision-making as to Although the United States has no Complaint ¶ 12, United States v. EZ Communications, Inc., No. 1:97CV00406 (D.D.C. cases it chooses not to initiate. Rather, legal obligation to address matters filed Feb. 27, 1997). the Tunney Act provides that the United raised in the Complaint, we note that 4 SBS’s submission does not provide a basis to States must inform the public about the the United States conducted an establish a combined Spanish-language television case it did initiate and explain how the extensive inquiry into the issue of and radio market. The letters that SBS attached to its comment as Exhibit A for the most part discuss proposed decree serves to resolve the whether the combination of Univision’s how certain advertisers depend on Spanish- competitive effects alleged in the Spanish-language television stations language media (a point with which the United Complaint. with HBC’s Spanish-language radio States does not disagree). Only two of the letters, The purpose of a CIS is to provide the stations in geographic regions where however, discuss the interchangeability of Spanish- language television and radio (May 27, 2003 letter public with ‘‘basic data about the both are located was likely to cause from Castor A. Fernandez; May 27, 2003 letter from decree’’ to allow for informed comment. significant anticompetitive effects. The Caballero TV & Cable sales); the rest are silent on See generally United States v. Microsoft inquiry included numerous interviews the issue.

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investigation. In this case, the market is audience ratings, as it is audience access aggressively against Entravision. SBS comprised of the competitive that is being sold to the advertisers. That cmt. at 1, 4–6.5 alternatives for certain advertisers competition benefits advertisers as Contrary to SBS’s assertions, the seeking to purchase commercial time on discussed above. It also benefits proposed Final Judgment will preserve Spanish-language radio stations. Market individual audience members (listeners competition between Entravision and participants compete on the basis of of radio stations) because stations will HBC by restricting Univision’s ability to both price and service (or ‘‘quality’’ or compete for their attention by offering control or influence Entravision’s radio ‘‘innovation’’). See, e.g., Complaint ¶ 14 high quality content. In this way, the business and by significantly reducing (relevant product market defined in relief in the Final Judgment that protects Univision’s equity stake in Entravision. terms of options available to certain advertising competition also serves to See CIS at 9–13 (describing specific advertisers facing ‘‘a small but protect individual audience members by means by which the proposed Final significant increase in the price of maintaining vigorous competition Judgment will preserve competition). advertising time on Spanish-language between the Spanish-language radio Addressing SBS’s first contention, as radio, or a reduction in the value of stations owned by Univision/HBC and stated in the CIS, Univision and services provided’’) (emphasis added). those owned by Entravision. Entravision have a long-standing As the Complaint and CIS state, d. The allegation that Univision may television relationship in which Entravision and HBC heavily promote refuse to deal with certain advertisers or Entravision broadcasts Univision their stations against each other in an impose tying arrangements does not programming on television stations effort to gain high ratings; they program warrant condemning the transaction. owned by Entravision. This relationship and format their stations in an effort to SBS alleges that the merger will provide is embodied in a pre-existing, long-term attract listeners away from each other; Univision an enhanced incentive to affiliation agreement that assigns rights they aggressively seek to acquire refuse to deal with or discriminate and responsibilities to both parties and stations; and they closely monitor each against Spanish-language radio also provides for Univision to act as other’s competitive positions. competitors who seek to advertise on Entravision’s national sales Complaint ¶ 19; CIS at 6. As explained Univision and will also provide representative for television advertising. in the CIS, the goal of the proposed Univision the ability to ‘‘tie’’ radio and In addition to the fact that this vertical Final Judgment is to protect such television advertising time for integration may yield certain vigorous price and nonprice advertisers who seek to use both efficiencies and consumer benefits, competition between Entravision and mediums. (SBS Cmt. at 3). The United there is nothing in this affiliation HBC by foreclosing the ability of a States did not find evidence upon agreement that allows Univision to combined Univision/HBC to improperly which to base a cause of action pursuant control any Entravision radio decision, influence Entravision’s strategic to SBS’s theory. If Univision engages in including decisions regarding the acquisition of radio stations. Moreover, decision making with regard to its radio the alleged conduct in the future, and if the decree itself mandates that the two business. See CIS at 9–11. Contrary to the conduct satisfies the requirements of companies act as independent entities AAI’s assumption, the United States an antitrust violation, then the United and there s no reason to believe that considered the many ways in which States (or a private plaintiff with Univision will violate the terms of the advertisers benefit from competition— standing) could challenge the conduct at decree (and thereby subject itself to not just price competition—in crafting that time. The mere speculation that Univision will violate the antitrust laws, contempt of court proceedings) by using its remedy. however, does not justify enjoining this its television relationship to influence c. The consideration of political and transaction. any Entravision strategic decision. The cultural viewpoints are extraneous to Division found no evidence to suggest antitrust enforcement. AAI also asserts B. SBS’s Assertions That the Proposed that the mere fact that a television that the United States should take into Final Judgment Will Not Remedy the affiliation agreement exists between account under its antitrust analysis Competitive Concerns Raised in the them enables Univision to unduly ‘‘consumer interest in diversity of Complaint Are Unfounded influence Entravision’s decisions with sources of political and cultural SBS asserts that the remedy will not respect to its radio business, the only information’’ within a combined address the competitive harms raised in area in which the combined Univision/ Spanish-language television and radio the Complaint because Univision will HBC will compete with Entravision. market. AAI cmt. at 1, 3–4. It is not the still have the ability to improperly Finally, Entravision has every incentive role of the United States to use the influence Entravision’s actions to the to operate its radio stations in a fully antitrust laws to regulate actual content detriment of radio competition between competitive manner. or to establish quotas for the types of Entravision and Univision/HBC. As to SBS’s second contention, programming that media stations must Specifically, SBS contends that (1) the although Univision will maintain a few broadcast. Accordingly, we do not seek existence of the television affiliation limited governance rights in Entravision to ensure in the context of a merger agreement between Univision and that it held prior to the contemplation review that media companies provide a Entravision will cause Entravision to of this merger, the proposed Final balance of political views or a proper mitigate its radio competition with a Judgment eliminates Univision’s ability mix of cultural issues as part of their combined Univision/HBC; (2) to exercise these rights over Entravision programming. The United States does Univision’s continued retention of radio decisions. The rights that are seek to ensure that content is limited shareholder ‘‘veto’’ rights in retained relate to the two entities’ determined in a competitive Entravision might foreclose television relationship, which is not a marketplace, however. The relevant competition-enhancing transactions; (3) basis of concern alleged in the product identified in the Complaint is the time period to complete the stock the provision of advertising time on divestitures called for in the proposed 5 As noted above, AAI asserts that the CIS fails Spanish-language radio stations; the Final Judgment is too long; and (4) to explain why Univision was not forced to relinquish all its shareholder ‘‘veto’’ rights in customer is an advertiser purchasing Univision’s ability to hold 10 percent of Entravision and to divest all its Entravision equity. that time. In order to supply this Entravision’s stock will cause AAI cmt. at 1 n.2. These points are addressed in product, media stations compete to gain Univision/HBC to compete less this response to SBS’s comments.

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Complaint. Univision will retain a V. Conclusion Re: U.S. v. Univision Communications, Civ. Action No. 1:03CV00758 modified right to veto a merger or After careful consideration of these transfer of ownership of Entravision. public comments, the United States has Dear Mr. Wade: These constitute the Although this right does impact Tunney Act comments of the American concluded that entry of the Proposed Antitrust Institute (‘‘AAI’’) in regard to the ultimate ownership of Entravision, it Final Judgment will provide an effective cannot be used to veto or influence day- acquisition of Hispanic Broadcasting and appropriate remedy for the antitrust Corporation (‘‘HBC’’) by Univision to-day decisions relating to radio violation alleged in the Complaint and Communications Inc. (‘‘Univision’’).1 competition or strategic decisions such is, therefore, in the public interest. The Competitive Impact Statement (‘‘CIS’’) as the buying or selling of individual Pursuant to Section 16(d) of the Tunney in this case appears to reflect an unduly radio stations. Act, the United States is submitting narrow interpretation of the Clayton Act. We With respect to SBS’s third these public comments and this have only minor quarrels with the standard contention, while the United States Response to the Federal Register for analysis embodied in the CIS insofar as it traditionally requires defendants to identifies horizontal overlaps in the Spanish- publication. After these comments and language radio industry and seeks to divest business assets as expeditiously this Response are published in the as possible to maintain their value and eliminate these overlaps through Federal Register, the United States will 2 ongoing capabilities, the relief sought divestitures. Our principal concern is with move this Court to enter the Proposed what the CIS fails to address. It should here is for divestiture of stock, the Final Judgment. evaluate the consequences of this merger in retention of which does not raise the conventional terms in an overall market Dated this 31st day of October, 2003. same spoliation concerns as the consisting of Spanish-language media, retention of business assets raises. Respectfully submitted, examining such traditional criteria as Moreover, based on our investigation, lll/s/ll advertising effects. In addition, it should we concluded that a forced divestiture William H. Stallings, evaluate the consumer interest in diversity of of equity within a short amount of time Litigation III Section, Antitrust Division, sources of political and cultural information United States Department of Justice, 325 within this more general market. could cause material hardship to 7th Street, NW., Suite 300, Washington, DC Entravision’s vitality as a significant 20530. I. The CIS Ignores the Elephant in the Room competitor (for example, a ‘‘fire-sale’’ of The CIS states that HBC is the nation’s Univision’s stock holdings in Certificate of Service largest Spanish-language radio broadcaster Entravision could depress Entravision’s The undersigned certifies that a copy and that Univision is the largest Spanish- stock price to the point that it would not language media company in the U.S. of the foregoing Response to Public Univision is described as having two be able to issue equity to fund potential Comments was served on the following acquisitions). Such hardship should be Spanish-language broadcast networks, counsel, by electronic mail in PDF Univision and Telefutura, one cable channel, avoided or minimized if at all possible format, this 31st day of October, 2003: Galavision, and several other Spanish- so as to maintain Entravision as a strong John M. Taladay, Howerey, Simon, language media operations, including competitor to the unified Univision/ Arnold & White L.L.P., 1299 Internet sites and services, music recording, HBC. The time period relfects a Pennsylvania Avenue, NW., distribution, and publishing. Univision also balancing designed to minimize the Washington, DC 20004–2402; has a 30-percent equity share in Entravision, potential harms to competition that which owns or operates 55 mostly-Spanish Neil W. Imus, Vinson & Elkins L.L.P., might arise from a divestiture that radio stations and 49 television stations that The Willard Office Building, 1455 proceeds either too slowly or too broadcast Univision programming. We are Pennsylvania Avenue, NW., not informed of Univision’s market share in rapidly. Washington, DC 20004–1008; Spanish-language television. Finally, responding to SBS’s fourth HBC owns or operates more than 60 radio contention, under the circumstances of and on the following entities by facsimile and U.S. Mail, on this same stations, virtually all broadcasting in this case, Univision’s ability to hold no Spanish. We are not informed of HBC’s more than 10 percent of Entravision’s date: market share in Spanish-language radio. And, equity will not give it control or even Albert A. Foer, The American Antitrust of course, we are not informed of market significant influence over Entravision’s Institute, 219 Ellicott Street, NW., shares in any combined Spanish-language business decisions. The decree Washington, DC 20008, (202) 276– media market. significantly restrains Univision’s 6002 (phone), (202) 966–8711 The Complaint is limited to the provision ability to participate in Entravision’s (facsimile); of advertising time on Spanish-language Claudia R. Higgins, Counsel for Spanish radio stations to advertisers that consider governance. For example, Univision Spanish-language radio to be a particularly will not be allowed: To suggest or Broadcasting Systems, Kaye Scholer effective medium. This is the only product nominate any candidate for LLP, 901 15th Street, NW., Suite 1100, market deemed relevant. Six metropolitan Entravision’s board of directors; to have Washington, DC 20005, (202) 682– areas are designated as the relevant Univision employees serve as 3653 (phone), (202) 682–3580 geographic markets. Entravision employees; to participate in (facsimile). The ‘‘elephant in the room’’ whose any Entravision board of directors lll/s/llllllllllll presence has been mentioned in the CIS but meeting ; to vote its equity; and to have William H. Stallings given no antitrust importance, is television. access to any of Entravision’s We recognize that the Antitrust Division has June 12, 2003 traditionally treated radio and television as competitively sensitive information. See James R. Wade Final Judgment, Section VI. Moreover, Chief, Litigation III Section, Antitrust 1 The AAI is an independent 501(c)(3) research, Univision’s reduced equity stake in Division, United States Dept. of Justice, 325 education, and advocacy organization described at Entravision is not sufficiently large to 7th Street, N.W., Suite 300, Washington, www.antitrustinstitute.org. affect competition between them given DC 20530 2 For example, we are puzzled by the CIS’s failure the market structure of the relevant Ce: Chairman Michael Powell, Federal to explain why the Proposed Final Judgment does 6 not require elimination of all shareholder rights that geographic markets at issue. Communications Commission Univision currently possesses in Entravision and for failing to explain why it allows Univision to 6 Cf. Archer-Daniels-Midland, 272 F. Supp. 2d at that two companies operated as independent retain any stock in Entravision. If these are simply 8 (crediting the Government’s statement in Tunney competitors notwithstanding one company’s partial the best compromises the Division could get, why Act proceeding that factual investigation showed equity ownership in the other). not say so?

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separate markets, in that there are so many the present merger does not involve III. Protecting the Public Interest Requires sources of information for English-speakers newspapers, one can not tell from the CIS Analysis of the Impact of This Acquisition that diversity of sources has not appeared to because the implications of putting the on Consumer Choice rise to an antitrust concern. But here we are leading Hispanic radio and TV stations under Based on what is said in the CIS, there is potentially face with a different situation. the same corporate control is not addressed. no evidence that the DOJ has considered Should television and radio directed at a In the section on Alternatives to the Proposed anything other than the probability of short- Spanish-speaking audience be deemed a Final Judgment, we are only told that the term price increases. Why no discussion of relevant market, not on the basis of Department considered a full trial on the such other traditional antitrust concerns as competition for advertising but on the basis merits and a proposal by the defendants for the effect on consumer choice? 5 There have of competition for the consumer’s attention? been many antitrust cases in which non-price Even though the merger, after the divestiture placing Entravision stock into a long-term factors were considered.6 As one example, in of overlap radio markets, will arguably not trust. United States v. Philadelphia National Bank, increase concentration in either the Having advised the public that the leading the Court expressed a concern with possible television or the radio market, will it reduce Spanish-language TV conglomerate was adverse effects of a bank merger on ‘‘price, in a significant way the diversity of sources acquiring the leading Spanish-language radio variety of credit arrangements, convenience of political and cultural information available company, the DOJ has the Tunney Act to the Spanish-speaking consumer? This also obligation to explain why it has made the of location, attractiveness of physical raises the question of the role of other aspects determination that this highly suggestive surroundings, credit information, investment of Spanish-language media, such as scenario is of no antitrust concern. The fact advice, service charges, personal accommodations, advertising, miscellaneous newspaper publishing and the Internet, that there are relevant antitrust markets for special and extra services* * *’’ 7 which are not discussed in the CIS. An Hispanic radio and Hispanic TV does not Theories of possible antitrust liability in appropriate larger Spanish-language market perclude the possibility that in certain First Amendment-related cases come from should be analyzed not only in traditional circumstances there may also be a larger many reputable sources. For example, Robert (advertising) terms but also in terms of relevant antitrust market, depending on what diversity of content sources.3 H. Lande and Neil W. Averitt have argued types of anticompetitive effects one is that consumer choice is no less a goal of II. The Hypothetical of the Dominating Voice concerned about. There is no inconsistency antitrust than competitive pricing.8 Maurice Consider the following hypothetical. There in being concerned both with advertising E. Stucke and Allen P. Grunes, two DOJ is a substantial group of Americans who only rates in radio markets and diversity of attorneys, have argued that it is proper to speak Spanish and whose sources of producers/editors of content in a more look beyond price effects to ‘‘the marketplace information are limited to Spanish-speaking general market for information or specifics of ideas’’ in order to consider non-price TV, Spanish-speaking radio, and Spanish- categories of information. dimensions of economic competition, such as speaking newspapers. A single corporation Let us be more precise about what diminished quality and choice.9 Joseph by acquisition gains control over all three information is lacking. Farrell, a former Chief Economist for the media. The head of that corporation would 1. What proportion of Spanish-speaking Antitrust Division, argued that price is be in the position to wield enormous consumers in the U.S. are completely or merely a synecdoche (a part representing the political and economic influence by highly dependent upon Spanish-language whole) for what we desire from competition determining what the Spanish-speaking sources of information? (Call this the ‘‘highly (i.e., innovation, quality, and price), and that community will know and believe. He or she dependent consumer market.’’) it does not always adequately represent the could determine what political candidates 2. What proportion of the highly package of desirables.10 Robert Pitofsky has will gain exposure to the Spanish-speaking dependent consumer market pre- and post- argued that non-economic political values electorate and whether that exposure will be merger depend on the merging parties as a such as the First Amendment can be relevant positive, negative, or neutral. Being able to principal source of information? and may justify a higher degree of scrutiny sway a substantial part of the Hispanic vote 11 3. What options apart from Univision and in certain cases. FTC Commissioner could determine the outcome of local, state, HBC are available to the highly dependent Thomas Leary has argued that diversity is an and national elections and the owner of this appropriate goal of antitrust.12 political power would be in position to make consumer market, pre- and post-merger? deals with a political party and with an 4. Using a variety of measures (e.g., 5 Although the Federal Communications Administration. The same corporation could advertising dollars, number of message recipients, contact hours), how substantial Commission has the opportunity to stop this merger dramatically influence within the Spanish- on ‘‘public interest’’ grounds, this possibility would speaking community which cultural trends, are these options in comparison to Univision not relieve the Department of Justice from fully products and services will be ignored, and HBC? What are the relevant market considering legitimate antitrust theories of denigrated or positively portrayed, thereby shares and HHI’s? competitive harm that coincidentally have the having a significant impact on the economy. We recognize that these are not easy benefit of protecting First Amendment values. This is the Hypothetical of a Dominating questions to answer, and that the answers 6 See Robert H. Lande, ‘‘Consumer Choice and Voice. will depend on the assumptions made about Antitrust,’’ 62 U. Pitt. L. Rev. 503, 508–512, and Are the assumptions of this hypothetical such matters as the definition of ‘highly cases cited therein. 7 far removed from the reality of the present dependent’. Nevertheless, with answers to 374 U.S. 363, 368 (1968). 8 acquisition?4 Aside from the distinction that these questions and explicitness about the ‘‘Consumer Sovereignty: A Unified Theory of Antitrust and Consumer Protection Law,’’ 65 assumptions used, one can begin to evaluate Antitrust L.J. 713, 715 (1997). 3 It is true that for much of radio and TV, the whether the Hypothesis of a Dominating 9 ‘‘Antitrust and the Marketplace of Ideas,’’ 69 consumer is not directly charged for consuming the Voice represents a realistic threat. Antitrust L.J. 249 at 297 (2001). product, although higher advertising costs may be 10 passed on to the consumer in product prices and ‘‘Thoughts on Antitrust and Innovation,’’ the consumer has opportunity costs that represent 15% do not speak the language well. Spanish is Speech to the National Economists Club, a kind of price to be paid for consumption. said to be the language most frequently spoken by Washington, DC (Jan. 25, 2001), at http:// Nonetheless, producers of, e.g., news, are in nearly 75% of adults in the top ten Hispanic www.usdoj.gov/atr/public/speeches/7402.pdf. competition with one another not only to gain metropolitan areas. If these figures are 11 Robert Pitofsky, The Political Content of advertisers, but to gain the consumer’s business. approximately correct, there appears to be reason to Antitrust, 127 U. PA. L. REV. 1051 (1979). Compare this with doctors who compete with one believe that at least a significant section of the 12 See Thomas B. Leary, ‘‘The Significance of another for their patient’s business, even though the Spanish-speaking community in the U.S. is highly Variety in Antitrust Analysis,’’ based on a speech medical bill may be paid by a third party. Would dependent on information it receives in Spanish delivered at the Steptoe & Johnson 2000 Antitrust not the importance of consumer choice in medical and that English is in these situations an inadequate Conference, on May 18, 2000, and available at http:/ care justify an antitrust case if the only two medical substitute. There are also studies demonstrating that /www.ftc.gov/speeches/leary/atljva4.htm: practices in a community were to merge, even if the commercial information conveyed in Spanish is far ‘‘It does not make sense to simply ignore the merger would be guaranteed by the doctors not to more persuasive to this group than information issue, however, because for many consumers affect the fees charged to health insurers? conveyed in English, even among those who are variety may be a more significant issue than price. 4 According to various sources, at least 9% of bilingual. Arguably, the same would be true of Consider the example of two chains of bookstores Hispanics do not speak English at all, and at least political information. Continued

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We are told in the CIS that the Court may perceptions of political influence, it is and television are good substitutes.1 From only review the remedy in relation to the essential that the Tunney Act’s public the perspective of these advertisers, an HBC/ violations that the U.S. has alleged in its interest oversight be fully informed, with all Univision combination is effectively a merger Complaint. It might be argued that the DOJ relevant major antitrust theories fully to monopoly, for it combines the dominant decision not to include a general Spanish- ventilated in the CIS. Spanish-language radio broadcaster (HBC) language media market in its complaint is the with the dominant Spanish-language Sincerely, end of the story. But, as the CIS quotes the television broadcaster (Univision).2 This Ninth Circuit, ‘‘The court’s role in protecting Albert A. Foer Spanish-language broadcasting market the public interest is one of insuring that the President. (defined from the perspective of advertisers government has not breached its duty to the for which Spanish-language television and July 18, 2003 public in consenting to the decree. The court radio are good substitutes) easily coexists is required to determine not whether a James R. Wade with a Spanish-language radio-only market particular decree is the one that will best Chief, Litigation III Section, Antitrust (defined form the perspective of other serve society, but whether the settlement is Division, U.S. Department of Justice, 325 advertisers). The Department’s Complaint ‘‘within the reaches of the public interest.’’ Seventh Street, NW., Suite 300, and Competitive Impact Statement are United States v. Bechtel Corp., 648 F.2d 660, Washington, DC. 20530 entirely silent on why the Department has 666 (9th Cir. 1981).’’ Because in practice a Re: United States v. Univision chosen to ignore the interests of advertisers complaint is drawn up by the DOJ at the Communications Inc., Civ. Action No. who are vulnerable to the enhanced market same time as a settlement order is drafted, 1:03CV00758 power HBC and Univision will enjoy as a the complaint is to some degree, in reality, result of their combination. not merely the cause of the settlement, but Dear Mr. Wade: Pursuant to the Antitrust Even accepting that Spanish-language the result of the settlement. Although we do Procedures and Penalties Act, 15 U.S.C. radio and Spanish-language television belong not want courts to displace the DOJ role of §§ 16(b)–(h), Spanish Broadcasting System, in separate markets, SBS disagrees with the determining what goes into a complaint, a Inc. (‘‘SBS’’) respectfully submits its Department’s conclusion that the only settlement that does not deal with obvious comments on the proposed Final Judgment competitive harm from this acquisition flows antitrust issues should not be approved until filed on March 26, 2003, by the Antitrust from Univision’s ownership of a significant the CIS adequately explains what is going on. Division of the U.S. Department of Justice stake in both Entravision and HBC. In this acquisition, the Complaint includes (‘‘Department’’) in connection with the Specifically, Univision’s acquisition of the facts about the two companies that would proposed acquisition of Hispanic dominant Spanish-language radio suggest to many observers that there may be Broadcasting Corporation (‘‘HBC’’) by broadcaster, HBC, will give Univision, the critically important competitive issues that Univision Communications Inc. dominant Spanish-language television go beyond the radio market. If the Tunney (‘‘Univision’’). broadcaster, an enhanced inventive to refuse Act is to protect the public interest, including A Univision and HBC combination raises to deal with or discriminate against Spanish- the perception that antitrust settlements are serious antitrust issues that the Department’s language radio competitors (such as SBS) not based on political considerations, both proposed Final Judgment fails to address. who seek to advertise through Univision. the public and the court must be provided The draft decree leaves unremedied Advertising on television is important for with sufficient information to determine significant harm to competition and promoting Spanish-language radio stations whether the complaint itself was consumers that surely will result from the and thus for surmounting the high entry unreasonably limited. combination of the dominant firm in barriers in Spanish-radio language that the The legislative genesis of the Tunney Act Spanish-language radio (HBC) with the Complaint identifies (Compl. ¶27). was concern that settlements might be made dominant firm in Spanish-language Moreover, after the merger, Univision/HBC on the basis of political rather than strictly television (Univision). Even if, as the will have the power to insist that Spanish- professional analysis. To expand the Department of Complaint posits, Spanish- Hypothetical of a Dominating Voice, if the language radio and television belong in 1 Letters expressing the views of such advertisers ownership of the merging parties happened separate markets, the remedy the Department can be found in a number of letters filed with the to be of the same political party as a Federal Communications Commission. See, e.g., selected fails to solve the competitive Letter from Phillip L. Verveer et al., Attorneys particular national Administration, allowing problem it identified: Univision’s significant the merger to proceed, subject only to a mild Willkie Farr & Gallagher to Marlene H. Dortch, influence over one of HBC’s closest Secretary, Federal Communications Commission radio divestiture, with the potential of competitors in Spanish-language radio, (June 2, 2003) (attachments), available at http:// political gain for the political party, this Entravision Communications Corporation gullfoss2.fcc.gov/prod/ecfs/comsrch_v2.cgi would be the type of politicization of (‘‘Entravision’’). The settlement only partially (proceeding No. MB02–235) (attached hereto as antitrust that the Tunney Act was intended and incompletely disentangles Univision and Exhibit A). These letters demonstrate that there are to remove. many advertisers for whom the relevant market for Entravision. Moreover, the inadequate We certainly do not charge that this analyzing this transaction is not properly confined remedy the Department selected requires six specific merger is being approved for to Spanish-language radio. years to implement, a period during which 2 political gain, but are trying to make a larger HBC’s 2003 10–K explains that it ‘‘is the largest the transaction will continue to harm point. In order to protect antitrust from Spanish-language radio broadcasting company.’’ competition and consumers. Accordingly, the Hispanics Broadcasting Corp. Form 10–K (Mar. 31, Court should reject the proposed Final 2003), available at http://www.sec.gov/Archives/ (or video rental stores) that compete in myriad Judgment as not within the reaches of the edgar/data922503/000104746903011344/ neighborhoods, with a largely local clientele. One public interest. a2107188z10-k.htm. Univision ‘‘is the dominant of the chains features best sellers or the most broadcaster of Spanish-language television in the popular films, the other chain has a more eclectic 1. SBS initially notes its disagreement with United States, capturing an approximate 81% offering; including a wider range of special interest the Department’s decision to confine its audience share.’’ Entravision Communications and ‘‘artistic’’ selections. If the first chain were to analysis to the product market for the Corporation Annual Report for 2001, at 25, acquire the second, there might well be some local ‘‘provision of advertising time on Spanish- available at www.entravision.com. HBC’s and price effects, but the most important effect on most language radio’’ (Compl. ¶ 14). The Univision’s combined dominance is illustrated by consumers (but, not all) is likely to be the effect on Department defined this market because letters and charts filed with the Federal variety if the combined store adopts the buyer’s Communications Commission. See Letter from business model. ‘‘[m]any local and national advertises’’ would Phillip L. Verveer et al., Attorneys Willkie Farr & ‘‘This reality does not mean that the merger ‘‘not turn to other media, including radio that Gallagher to Marlene H. Dortch, Secretary, Federal should be attacked on that account. It might well is not broadcast in Spanish, if faced with a Communications Commission (June 11, 2003) be, for example, that it is a lot easier for a potential small but significant increase in the price of (attached as Exhibit B) and Letter from Andres Jay new entrant to provide variety competition for the advertising time on Spanish-language radio’’ Schwartzman, President and CEO, Media Access merged enterprise than it would be to provide price or its equivalent (Id. emphasis added. The Project to Marlene H. Dortch, Secretary, Federal competition. What it does mean is that an initial Department, however, provides no Communications Commission (June 9, 2003) focus on a hypothetical price effect, according to available at http://gullfoss2.fcc.gov/prod/ecfs/ traditional Guidelines analysis, might miss the most justification for ignoring the many other comsrch_v2.cgi (proceeding No. MB02–235) important questions.’’ advertisers for whom Spanish-language radio (attached as Exhibit C).

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language advertisers who wish to advertise language television in the United States.’’ 3 A transactions. It plainly harms rather than through both radio and television purchase recent Entravision securities filing also benefits competition to require Entravision to time from both Univision and HBC rather strikingly illustrates the importance of the obtain its rival’s approval to undertake such than from the merged firm’s rivals, including affiliate agreement: Of an overall increase of actions. The Department should not hinder SBS. Such difficult-to-detect and subtle tying $1.5 million in revenue for Entravision over the competitive activities of third parties arrangements or refusals to deal—realistic the prior year, ‘‘$1.4 million was attributable through consent judgments. possibilities here—impair competition. See, to our Univision stations and 0.1 million was Third, the proposed Final Judgment would e.g., Lorain Journal Co. v. United States, 342 attributable to our Telfutura stations [a require Univision to reduce its equity stake U.S. 143 (1951). It is unrealistic to expect Univision network].’’4 in Entravision over a very lengthy period: to that, following the acquisition, advertisers The affiliate agreement plainly will give no more than 15 percent by March 2006 and to no more than 10 percent by March 2009. will stand up to the HBC/Univision colossus Entravision significant reason to pull its The Department acknowledges that this and challenge such practices themselves. The competitive punches against HBC once HBC is acquired by Univision. The Department divestiture is necessary to preserve Clayton Act properly is invoked to restrain competition; for Univision’s significant stake these restraints in their incipiency. recognizes this; for the proposed Final Judgment prohibits Univision from ‘‘using or in Entravision means that Univision/HBC The Department’s failure to grapple with attempting to use any rights or duties’’ under ‘‘would receive some significant benefit even any of the competitive problems posed by the affiliate agreement ‘‘to influence on sales it loses to Entravision’’ (CIS at 12). combining the dominant Spanish-language Entravision in the conduct of Entravision’s The Department nonetheless is willing to radio broadcaster with the dominant radio business’’ (Proposed Final Judgment tolerate the lessened competition and Spanish-language television broadcaster § VI.A.5). This remedy, however, is a mirage. consumer harm for as long as six years. should cause this Court to conduct an Univision need not actually use the affiliate Although the rapid sale of stock may be especially careful Tunney Act review. To be agreement to influence Entravision’s difficult to accomplish and impose costs sure, that review is largely confined to behavior. The mere fact that Univision might upon Univision, the costs of accomplishing determining whether the remedy the deny Entravision rights under the agreement, the transaction should not be borne by Department selected is a reasonable one for or even create disputes under the agreement, consumers. If owning the stock is the competitive problem identified in the will cause Entravision to compete less competitively harmful, Univision should be Department’s Complaint. See United States v. vigorously with HBC.5 Strikingly, the required to sell the stock as expeditiously as Microsoft Corp., 56 F.3d 1448, 1461–62 (D.C. Department has rejected such ‘‘behavioral’’ possible. The Department’s explanation for Cir. 1995). But when as here, the Department remedies in other circumstances, even when its unprecedented six-year divestiture has exercised its prosecutorial discretion to punishable by contempt if violated.6 The period—that requiring a faster sale by tailor its Complaint narrowly to the remedy Competitive Impact Statement provides no Univision protects against ‘‘adversely selected, the Court must pay special attention basis for believing that a ‘‘behavioral’’ affecting Entravision’s ability to raise capital’’ to ensure that the fit between remedy and remedy relating to the affiliate agreement will (CIS at 12)—fails to persuade. If the Department’s reasoning were valid, it would Complaint is indeed within the reaches of the be effective here. By contrast, blocking always permit divestitures to be made over public interest. As explained below, the fit Univision’s acquisition of HBC will preserve the course of several years; but that is here is very poor indeed. competition. obviously not the Division’s policy. And with Second, the proposed Final Judgment 2. The competitive problem the Compliant good reason: The longer the merging parties would allow Univision to retain shareholder identifies is that Univision’s significant hold assets that must be divested to preserve rights to veto major strategic decisions of control over, and its equity stake in, competition, the longer the period during Entravision, including any plans i) to merge, Entravision will cause HBC and Entravision which competition and consumers suffer. consolidate or reorganize all or substantially to pull their competitive punches once HBC The speculative fear that Entravision’s ability falls under Univision’s control. The proposed all of its assets; ii) to transfer a majority of to raise capital will be harmed by requiring Final Judgment seeks to preserve HBC/ its voting power; iii) to dissolve, liquidate or a shorter divestiture period is no warrant for Entravision competition by requiring terminate itself; as well as iv) to dispose of inflicting competitive harm on advertisers Univision to reduce its equity stake in any interest in any FCC licenses relating to and others. Entravision and to relinquish certain rights television stations that are Univision Fourth, the divestiture the Department Univision holds to control or influence affiliates (Competitive Impact Statement negotiated is insufficient to preserve Entravision’s competitive activities. For a (‘‘CIS’’) at 11). Each of these actions that competition. If the proposed Final Judgment number of reasons, the proposed Final Univision can veto may have significant is approved, Univision will continue to hold Judgment will not adequately protect competitive impact. If, for example, a ten percent stake in Entravision. Moreover, purchasers of radio advertising from the Entravision wanted to sell a radio station to, the Complaint alleges that Entravision and adverse consequences of Univision’s or merge with, a rival, the proposed Final HBC have combined market shares ranging proposed acquisition of HBC. Judgment leaves Univision with the power to from 70 percent to as much as 95 percent in First, the Department’s requirement that prevent possible competition-enhancing the several geographic markets (Compl. ¶ 21). Univision surrender certain rights and dilute It is plain that Univision will still financially its stock holding in Entravision fails to 3 Entravision Communications Corporation benefit from every advertising dollar HBC address the most significant way in which Annual Report for 2001, at 25, available at loses to Entravision and, therefore, that www.entravision.com. Univision/HBC will compete less vigorously Univision influences Entravision: through 4 Entravision Communications Corporation 10–Q, the Univision/Entravision affiliate agreement. than if Univision’s equity interest were at 7 (May 12, 2003), available at divested completely. The Competitive Impact As the Department’s Complaint explains, www.entravision.com. Statement fails to explain why a complete pursuant to this ‘‘long-term’’ agreement, 5 See, e.g., Letter from Arthur V. Belendiuk, ‘‘Extravision broadcasts Univision Counsel to National Hispanic Policy Institute, Inc., divestiture is inappropriate here. programming from Univision’s two networks to W. Kenneth Ferree, Esq., Chief, Media Bureau, Thus, for several reasons, the proposed Final Judgment leaves Entravision entangled on 49 television stations. As part of this Federal Communication Commission (July 11, with Univision in ways that will seriously affiliation agreement, Univision serves as 2003) (attached as Exhibit D). 6 harm competition. The Court accordingly Entravision’s sole representative for the sale For instance, the Department rejected Northwest Airline’s suggestion that creating a voting trust for should find that the Department’s proposed of television advertisements sold on a the stock it acquired in Continental Airlines would Final Judgment is not within the reaches of national basis’’ (Compl. ¶ 23). This prevent a diminution of competition between the the public interest. agreement is Entravision’s lifeblood. From it, two airlines. The Department explained: ‘‘Courts Respectfully submitted, Entravision obtains key programming and are understandably loathe to rely on ‘behavioral Claudia R. Higgins significant advertising revenue. As rules’ as a substitute for divestiture, even where the rules are court-ordered.’’ Trial Br. of the United Kaye Scholer LLP Entravision’s 2001 Annual Report explains, 901 15th Street, NW., Suite 1100, ‘‘Entravision has benefited enormously from States at 18, United States v. Northwest Airlines Corp. (No. 98–74611, filed Oct. 24, 2000) (emphasis Washington, DC 20005, (202) 682–3653, a close relationship with Univision’’ which is added), available at www.usdoj.gov/atr/cases/ Counsel for Spanish Broadcasting System, ‘‘the dominant broadcaster of Spanish- f7200/7288.htm. Inc.

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Dated: July 18, 2003. policy points relevant to the resolution of Let Me explain: One could safety say that Exhibits Attached. this important matter. (We note that the for the first time in U.S. History, there has submission, inexplicably, is not posted on been a CATERING to Spanish language, not United States v. Univision Communications, the ECFS site and thus remains unavailable so much out of a sociological sense of Inc., Civ. Action No. 1:03CV00758, to anyone seeking to follow the proposed responsibility, but out of the dire necessity of Comments on Behalf of Spanish transaction through the Commission’s Web the large and small American corporations to Broadcasting Inc., July 18, 2003, Exhibits A– site). open new markets to replace maturing ones D Finally, we note the unusual circumstance in the U.S. They do this by attracting an ever Exhibit A presented by today’s Commission vote growing group of people (the largest single fundamentally changing its principal media minority in the U.S.) which could not be June 2, 2003 ownership regulations (following the most otherwise addressed. There are 27 Latin Marlene H. Dortch exhaustive and comprehensive review of American countries with endless political Secretary, Federal Communications [the] broadcast rules ever undertaken’’) and and economic travails, which only serve to Commission, 445 12th Street, SW., the pendency of this major broadcasting increase the CONTINUOUS, NON- Washington, D.C. 20554 transfer application. As we are able to learn STOPPING Immigration WAVE to the LAND Re: Applications for Transfer of Control of the details of the new ownership rules, we of opportunity. Hispanic Broadcasting Corp., and Certain will submit our analysis of their significance Second: Are Spanish language video Subsidiaries, Licensees of KGBT (AM, for the Univision proposal. (television and cable) and radio substitutes Harlingen, Texas et al. (Docket No. MB 02– Respectfully submitted, for one another? 235, FCC File Nos. BTC–20020723ABL, et /s/ Philip L. Verveer I have no doubt that Spanish and English al.) Philip L. Verveer language media are in different markets from Dear Ms. Dortch: Spanish Broadcasting Sue D. Blumenfeld the perspective of advertising buys. A small, System, Inc. (‘‘SBS’’) has asked more than Michael G. Jones but significant non-transitory increase in twenty advertising agencies and advertisers David M. Don price in English language media will not with special knowledge of the Hispanic WILLKIE FARR & GALLAGHER, 1875 K induce the advertisers with whom I am community to address the nature and extent Street NW, Washington, DC 20006, familiar to shift their advertising to Spanish of the media marketplace in which they Telephone: (202) 303–1000, Facsimile: language media. Instead, they will absorb the conduct their business. Their responses are (202) 303–2000 price increase. The reverse also is true. The reason is that attached. and All of the responses indicate that English- for many products the target audience simply language broadcasting and Spanish-language Bruce A. Eisen cannot be reached unless it is addressed in (Hispanic) broadcasting constitute separate Allan G. Moskowitz their familiar language. Among other obvious markets. Many of them observe that the KAYE SCHOLER FIERMAN HAYS & bits of evidence, the major television Spanish-language broadcasting market HANDLER, LLP, 901 15th Street NW, Suite networks virtually never present a includes both radio and television. 1100, Washington, DC 20005 commercial in Spanish (or any language These propositions are fundamental to the Attorneys for Spanish Broadcasting System, other than English, for that matter). Commission’s analysis of the proposed Inc. Spanish language video and radio are Univision Communications, Inc.—Hispanic cc: Chairman Powell, Commissioner substitutes for many advertisers. Many Broadcasting Corp. merger. The agency and Abernathy, Commissioner Copps, advertise on both. Many sponsors are quite advertiser perspectives on the market address Commissioner Martin, Commissioner willing to allocate and reallocate percentages both competition and diversity, just as the Adelstein, Susan Eid, Stacy Robinson, of their ad budgets to video or to radio Commission must in connection with its Jordan Goldstein, Catherine Crutcher depending upon shifts in the price and public interest determination on the Bohigian, Johanna Mikes, Ken Ferree, ratings of one or the other. A small, but permissibility of requested transfers. David Brown, Scott R. Flick, Counsel for significant increase in price in one will shift The conclusions of the agency and Univision Communications, Inc., Roy R. purchases to the other for many products. advertiser executives conform with those the Russo, Counsel for Hispanic Broadcasting It is very common in negotiations over Commission has reached in other contexts. Corp. advertising rates, for agencies and clients to The Commission often and recently has make the claim, for example, that if recognized the existence of a separate May 27, 2003 concessions in price are not made, the Spanish language broadcasting market. It also To Whom It May Concern advertising will be placed on the other has recognized that television and radio are Dear Sir or Madam: I have been involved medium, video or radio as the case may be. part of the same product market for in the Hispanic Market USA since 1966 and I hope that you find this information fundamental Communications Act purposes. have owned my own firm for over 31 years. helpful. I would be happy to discuss it at The separate nature of the Hispanic During that time, I have placed national greater length if you would find it useful. broadcasting market means that the FCC may and local ads for a very wide variety of Sincerely, not rely exclusively on its cross-ownership companies, government agencies, and other Castor A. Fernandez, and multiple ownership rules in making its public and private institutions, large and President/Creative Director, Castor public interest determination. These small including Coca Cola, McDonald’s, May 27, 2003 heuristic devices may be a sufficiently Procter & Gamble, General Motors, Anheuser reliable basis for decision where transfers Busch, Castrol, Pizza Hut, Burger King to The Honorable Michael K. Powell implicate majority-language broadcasting. mention just a few. I am also the single Chairman, Federal Communications Their reliability cannot be assumed where largest individual receiver of Creative Commission, Washington, DC 20554 minority-language broadcasting is concerned. Awards in the industry, and was placed in Dear Mr. Chairman, My name is Eduardo In this case, the proposed merger moves the the Hispanic Market Hall of Fame (only 4 Caballero, President/CEO of Caballero TV & Hispanic market very decidedly in the recipients so far), in 2002. Cable Sales, an independent-Spanish TV direction of monopoly. Both the statute and I have been asked to address two issues: stations sales representative. ordinary prudence require that the decision First: Is there a separate advertising I started selling Spanish Media in February in this matter be the product of careful product market defined by the Spanish of 1962, as a local salesman for Radio Station analysis of record evidence and that it be language? In other words, are Spanish WBNX, New York City. I became its General reflected in a reasoned explanation. language media and English language media Sales Manager that same year. In this regard, SBS will respond to the substitutable for one another? I resigned in March of 1968 to become many factual assertions contained in the May The answer is an unequivocal: NO! General Sales Manager of Spanish TV Station 14, 2003, Univision submission shortly. English language media and Spanish WXTV, Channel 41, New York Market Unsurprisingly, we do not find Univision’s language media are NOT substitutable. There (licensed to Paterson, NJ). propositions probative of the substantive definitely is a separate advertising product Also in 1968, I became a VP and Director issues nor do we find Univision’s legal and market defined by the Spanish language. of National Sales for Spanish International

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Network (S.I.N., the predecessor of speaking consumer does not play any role in Caballero Spanish Media Inc., the Spanish Univision), with affiliate stations in San the marketing plans of ANY of the hundred media sales representative in this country. Antonio, Los Angeles, Fresno, New York, of national advertisers who are NOT His company started representing four Miami, San Francisco and Chicago. advertising in the Spanish language, simply Spanish TV stations (all of the independent In 1973 I resigned that position, as the because the Spanish market is not integrated Spanish stations existing at that time), and first—and only—Hispanic to be in charge of in their general market strategy, and as they fourteen Spanish radio stations (out of less national sales for any ‘‘national network’’ in say, ‘‘it has to be treated differently’’, than 35 existing stations). Eduardo also U.S., to start the first Spanish Radio National language and otherwise. syndicated a weekly Spanish movie, which Sales Representative in this Country Many times we were confronted with ran in twenty-nine television stations, almost (Caballero Spanish Media, Inc.), representing situations when general market agencies all of them general market stations, using over 140 Spanish radio stations. placed schedules on some of our represented Ricardo Montalban as the presenter, and with Amongst stations represented by CSM were stations; when they found out that we were the sponsorship of the Bristol Myers those owned and operated by Heftel broadcasting in Spanish, they canceled that company. Broadcasting, Tichenor Broadcasting Co. schedule because, according to them, they In 1976 Eduardo decided that he should be (both of these Companies were the were buying ‘‘radio’’ not ‘‘Spanish radio’’ or involved exclusively in radio, where he saw predecessors of the actual Hispanic they were buying ‘‘television’’ not ‘‘Spanish the greatest potential for C.S.M. His company Broadcasting Company—HBC), Spanish television’’. grew to represent over 140 Spanish radio Broadcasting System, Liberman Broadcasting, Still, today, we confront many situations stations from coast to coast, covering over Excel Broadcasting, the Z Network, etc. where most national (or general market) 95% of the Hispanic consumers in the CSM was sold in 1995 to the Interep advertisers do not buy any Spanish language country, opening opportunities for new radio Company (a General Market—English media because they (the advertisers) are not operators and hundreds of jobs for both, language—radio representative). Interep has ‘‘prepared’’ to go into the Spanish market. Hispanics and non-Hispanics. kept CSM, to this day, as a separate Spanish Another point I want to make is the In 1995, Eduardo sold C.S.M. to Interep, division. following. A General Market Network (radio and remained with the Company until the I remained with the Company until 1998, or television), to be considered as such, has beginning of 1999, when he left work on his when I undertook the creation of a TV (low to guarantee advertisers to cover about 80% new project, Caballero Television, owner and power stations) Network—MasMusica of the total U.S. population. In the case of operator of twelve LP television stations, all TeVe—to broadcast Spanish music, 24/7. At Spanish Networks, they are required to cover of them located in Central California and the present moment this programming is ONLY ABOUT 80% OF THE HISPANIC Texas. He created his own network—Mas broadcast over 21 Spanish TV stations within POPULATION. Certainly, those Hispanic Mu´ sica Teve-broadcasting 24 hours of music the U.S. ADIs where about 80% of the National videos. Caballero Television has offices in Most recently, since there is no any Hispanic population resides do not even get Dallas, New York Miami and Bakersfield, CA. advertising sales organization representing close to cover 80% of the General Population Recently, the Broadcasters’ Foundation independent TV stations—including mine of the U.S. This marks another very clear presented to Eduardo, The American and others—I have started a new—and separation between the General and the Broadcast Pioneer Award, as the first only—independent Spanish TV Spanish Markets. Hispanic to receive this award. representative sales organization, Caballero If I can be of any help to this Commission, In September 2002, Eduardo was honored TV & Cable Sales. please, do not hesitate to have any of your by the American Advertising Federation with I have been selling time for Spanish Media associates to contact me. the Mosaic Award. in United States (both radio and TV), for the Sinceramente, Eduardo lives with his wife of 41 years, last 42 years, uninterruptedly. I can say, Raquel, in Miami, Florida. They have a unequivocally and based on my professional Eduardo Caballero, Personal Bio daughter, Rosamaria, also a lawyer, who experience, the following: Eduardo Caballero was born in the Oriente graduated from Georgetown Law School. Unless an advertiser makes the decision to Province, Cuba. Went to school in Sagua de Married, with two daughters, Sofia and promote its products or services to the Ta´namo and Havana, where he obtained a Paloma, she lives, with husband P.J. Stafford, Hispanic consumer, in Spanish and, Degree as Doctor in Law from the Jose Marti in New York City. subsequently, creates a ‘‘Hispanic Budget’’, University. Eduardo is, or has been, involved in the there will not be schedules placed on any Started his own law firm with his wife, following organizations: Spanish Media. Raquel Miller-Caballero, also a lawyer, and Chairman-founder of the Hispanic arm of Unfortunately, that ‘‘Hispanic Budget’’, practiced that profession in Havana, until the the Media Partnership for a Drug Free when it does exist, amounts, at best, to a 1 end of 1961, when, in view of the political America. to 3% of the ‘‘general market budget’’ situation in his country, decided to come to Member of the U.S. Postal Service (although Hispanic consumers represent the United States as a political refugee. Marketing Advisory Board. about 14% of the total U.S. population, Under a program of relocation sponsored Founder of the Spanish Radio Association according to the Census Bureau). That brings, by the U.S. Government, he and Raquel went, of America. Former Member of the Board of the as a result, the situation where many of those first, to Dallas where he worked, Stations Representative Association (S.R.A.). advertisers’ Hispanic budgets cannot afford simultaneously, at a restaurant, as a host, and Former Member of the Board of Directors both television and radio schedules. at a department store, as a salesman; later on, of the Advertising Counsel. Many of those advertisers are willing to they went to New York where, in 1962, Former Member of the Arbitron Bi-lingual allocated and reallocate parts of their Eduardo started his career in broadcasting, Advisory Committee. Hispanic budgets to TV or to radio, landing a job as a salesman for a local Founder of the Association of Hispanic depending on changes of rates and the ability Spanish radio station (WBNX), through the Advertising Agencies (A.H.A.A.). of a particular medium to negotiate those offices of a client of his former law firm in Former Member of the Board of Trustees of rates. The fact is that Spanish language TV Cuba. the National Hispanic University (San Jose, and radio are substitutes for many Soon he became the first Hispanic in USA CA). advertisers. to hold the position of General Sales Manager Former Member of the Board of the Every advertiser in the U.S. considers this of a radio station. National Drop-out Prevention Foundation. to be a SEPARATE AND DISTINCTIVE In 1968 he helped to create what was He is also a proud member of the N.A.B. MARKET. In fact, most, if not all, of the still known as Spanish International Network and of the Pioneer Broadcasters, among many very few advertisers who have decided to (SIN), today Univision. He was appointed other organizations. advertise in the Spanish language have, first, first General Sales Manager for WXTV, funded a SPANISH ADVERTISING Channel 41, New York and soon after that, Hi Albert, as per your request, following BUDGETS, then created a SPANISH in 1969, he became an Executive VP and are my thoughts on why the Hispanic market MARKETING DEPARTMENT and, lastly, Director of National Sales for the Network. should be treated separately from the general chosen a SPANISH ADVERTISING AGENCY. In March of 1973 he resigned his position, market. As you know, I have over 15 years Without those three elements, the Spanish and, again, together with wife Raquel, started in the industry. Most of these years have

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been with agencies specializing in Hispanic Sources: Nielsen Universe Estimates 2002, differ based on country of origin. They marketing and advertising. I am currently Strategy Research, Yankelovich 2000, Center exercise sensitivities to these differences with Diario Las Americas, South Florida’s for Media Research 10/7/02. when creating an advertising message. first Hispanic daily newspaper. Advertising in Spanish-language is proven Important, as well, is not to stereotype this The U.S. Hispanic media market should be to be far more effective with Hispanics. market. According to the Roslow 2000 study on treated separately from the non-Hispanic Spanish language preference has not advertising effectiveness among U.S. decreased throughout the years as many had media market. Hispanics differ in many ways Hispanics: ad recall rises 61% for those predicted. It has actually increased. One from non-Hispanics: viewing in Spanish, communication is 57% contributor to the increase could be the • Larger households 3.4 vs. 2.5. more effective and persuasion is 5 times • greater. increasing acceptance of Spanish-language, Hispanics are younger 27.6 vs. 37.2. as well as, what many are calling ‘retro- • More HH with children 18 58% vs. 34%. Marketing to Hispanics should not only be in Spanish-language but should also be acculturation.’ Latinos are feeling more • Religion is more important in their lives, culturally relevant. Translation of general comfortable with their culture and the use of 80% vs. 46%. Spanish-language. Great contributions by • market copy is not an effective or efficient Language preference—over 90% of approach for delivering the target. Latinos in the areas of sports, entertainment, Hispanics speak some Spanish, over 70% Advertising should be culturally relevant and and business have laid out a new dynamic prefer to speak Spanish at home and over dialect sensitive. Agencies specializing in for Latino youths. They are more proud to be 50% prefer to speak Spanish on social Hispanic advertising and marketing a part of the Hispanic community and to be occasions. understand that accents and terminologies considered Latinos.

The Hispanic market is separated from household incomes are starting to catch up media market is a separate market for the general market by language and culture. with national averages. The Global Insight purpose of assisting the FCC in its ongoing Hispanics have different viewing and report estimates that Hispanic household review and analysis of the pending merger of listening patterns. That is why the top rated incomes should grow from 77% of the Univision Communications and Hispanic programs (overall—Hispanic & general national average in 2000 to 82% by 2020. The Broadcasting Corporation. market—source Nielsen Hispanic Station Selig Center for Economic Growth at the From a marketing standpoint the US Index) on television for Hispanics are University of Georgia says Hispanic Hispanic market is a separate marketplace. ‘novelas’ on Univision; and why the top disposable income will reach $926 billion in Marketing to Hispanics requires radio stations in major Hispanic markets are 2007, up some 60% from $580.5 billion last understanding of the cultural differences that Hispanic stations. Some Hispanics can be year. Meanwhile, non-Hispanic buying exist versus the General Consumer, reached through general market advertising power will grow less than 28%, to $8.9 understanding that creatively Spanish- efforts (spill), but the effectiveness and trillion. The Selig Center estimates that in language commercials need to reflect Latino impact of the message is not the same (per five years Hispanics will account for 9.4% of cultural nuances and queues to be fully Roslow 2000). Hispanics are more likely to the nation’s disposable income, up from effective in producing similar results versus buy brands that advertise to them in Spanish- 5.2% in 1990. the General English-language commercials. language. Many advertisers have become Both television and radio have seen the More than 50% of the US Hispanics are saver to the fact. In November Burger King growth. Advertising on Spanish-language TV Spanish-dominant. In the West Coast that Inc. set aside swathes of aisle space in nearly grew 16.5% last year, over twice the 7.6% number is closer to 60%. While long time 1,000 of its stores for videos dubbed in growth by all broadcast TV, estimates Gordon residents and US born Latinos speak English Spanish. In December, Kmart Corp. Hodge of investment bank Thomas Weisel so that they can function in mainstream announced the launch of an apparel line Partners. Today there are 8 times the number America, various factors which include, the named after Mexican pop star Thalia. P&G of Hispanic radio stations than there were 20 growing population, strong Hispanic created a magazine-style direct mail piece years ago. communities, and immigration keep fueling specific to Hispanics. 1980: 67 Hispanic Radio Stations the desire for Hispanics to hang on to their Some companies early to see the potential 2002: 600 Hispanic Radio Stations culture, their language and entertainment are cashing in Sales of Ford brand cars and Get the picture? It seems some major preferences. light trucks to the Hispanic market grew 40% companies have, and it sell $$$. They The Hispanic market is not one Monolithic in the past five years. After the company understand the importance of the Hispanic segment of the population, it is a complex started using Mexican bombshell Salma market. They see it as a separate market, and group comprised of many segments with Hayek to market its Lincoln brand last year, so should we. different cultural nuances and origins, united Hispanic purchases of Lincoln Navigators Sincerely, by one language. grew 12%, while sales to non-Hispanics were Leticla R. Pelaez Spanish-language media plays a very big flat, says a Ford Motor Co. spokeswoman. At Director of Advertising part in reaching out to the different segments Honda Motor Co.’s American arm, Latino of the population by continuing to supply purchases grew to 8.4% of all vehicles sold May 22, 2003 programming that feature relevant content last year from about 7% five years ago. Federal Communications Commission that speak to the Latino preferences. With the nation’s economy as a whole 445 Twelfth Street South, Washington, DC. In the case of Spanish-language TV, stagnating, the U.S. Hispanic population is 20554 Experience has shown that original emerging as one of the most promising To Whom It May Concern, My name is productions with familiar content such as motors for growth. Driving the growth is the Raquel Tomasino, I am Media Director of Latino entertainers, International dramas and population’s higher-than-average birth rate Castells & Associados and have been asked Futbol/Soccer is a formula for success. The and immigration. Additionally, Hispanic to comment on whether the U.S. Hispanic English-TV programming, such as ‘‘Charlie’s

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Angels’’ and ‘‘Reyes Y Ray’’ (Starsky & examples are Colgate-Palmolive left behind 3. Recruiting a Native Spanish Speaker To Hutch) remakes in Spanish that some by P&G, or Toyota topping Chevrolet. Critique Your Agency’s Creative networks tried to reproduce and run on Continual short-term messages lead to poor Just Like the General Market, Let the Spanish-TV proved to be unsuccessful. brand perception, discounting and brand Hispanic Consumers Be The Judge. Please Radio has become the optional source of erosion. You need a branding campaign with don’t say, ‘‘Juanita Garcia says the words are information and news not only about our ‘‘legs’’ and a multi-media mix, beyond TV to not right.’’ Regis & Kelly are not asking you homeland but our communities, with radio, OOH, DR, on-line, print, etc. to write their monologue, so don’t rely on commercials that we can actually understand your housekeeper to critique the work done and follow in our language. Radio also offers 7. Consistently Opting for General Market by a creative with a Masters and 15 years the variety in programming needed to finely ‘‘Transactions’’ experience. Do the same type of copy target the different segments of the Hispanic Stay True To The Brand, Seek Synergies research as the GM, qualitative or communities. With Hispanic Consumer Relevance. Look for quantitative, it all exists. Assure your Like the Central American who listen to synergies and commonalities between Hispanic ads deliver the strategic and Cumbias, the Caribbean’s who prefer Salsa, communication goals. the South American’s like Spanish-Rock and General and Hispanic consumer segments, the Mexican Community who love their but don’t force-fit. Transcreating GM 2. Hispanic Programs Must Pay Out in Rancheras and traditional sounds of Mexico. strategies or creative may work when the Incremental Volume concept transcends ethnicities or for short- As an agency it is important for us to Have a Measurable, Realistic and Agreed- educate our clients on the most effective way term promotions, but consistently employing this approach becomes ineffective. Just think Upon Hispanic ROI and Report Card. There to reach the Hispanic consumer. We are is a base cost for customer retention and about all the GM money you spend to responsible for creating advertising that is maintaining brand share, and the Hispanic identify that key consumer nugget, or that compelling, that builds awareness and program should not payout solely on consumer loyalty and at the end of the day breakthrough ad. Know the cultural nuances incremental sales. The reprt card should be we need to deliver these through the various, that affect your direction and define ad based on cumulative measures; Hispanic relevant forms of media vehicles. relevance. sales tracking, field surveys and pre/post That’s why we have a list of ten things to quantitive tracking studies. Don’trelegate avoid when marketing to Hispanics. Below is 6. Oversimplifying and Underestimating the Potential of the HCM Hispanic research to the back shelf. Employ a top line of the top ten things not to do by the proper research size and methodology to Liz Castell-Heard, President of Castells & Quantify the Hispanic Business Potential ensure the Hispanic sub-segments are well Asoicado: With Sound Research and Analysis. Put the defined and represented. 10. Approaching the Market as if It Were a stats to work and figure out the actual 1. Not Allowing Your Hispanic Agency To Monolithic Segment potential, by market, by account. Once you assess the huge potential, ‘‘package’’ it Challenge Status Quo ‘‘One-Size Fits All’’ Approach No Longer internally. Call it a profitable ‘‘division’’ or Demand High Performance From Your Works, Unless It’s just the Start. Hispanic establish a multi-discipline Hispanic Hispanic Agency. Demand the same level of marketing has evolved from the ‘70’s committee to facilitate its viability. excellence as your General Market agencies. ‘‘orphan’’ to the ‘‘childish’’ ‘80’s regional Be inclusive with your agency and set clear efforts; the post-pubescent 90’s of 5. Inadequate Allocation of Company goals and expectations. Think of your agency homogenization; and now to bicultural Resources to ‘‘Hispanic’’ as a marketing partner, as the more segmentation, as ‘‘Hispanic’’ grows up as an Proper Allocation of Hispanic Marketing knowledge shared, the better the work. Allow adult rich with complexities. It’s beyond Budgets and Resources Is Key. Inadequate Hispanic programs to evolve, flourish and country of origin—one generic ‘‘broadcast’’ pre-planning, sub-standard concepts, limited Spanish can be effective. It’s knowing what increase. Hire a true Hispanic agency, not a makes us tick; foreign-born (58%) or US ‘‘test efforts,’’ poor tactical executions and Hispanic ‘‘division,’’ or one—like Castells & born; Spanish-dominants (58%) or reaching lack of performance metrics devalue Asociados. bilinguals/English-dominants with Hispanic potential. Don’t say, ‘‘This is all we Sincerely, culturally-relevant English ads (like African- have for Hispanic this year.’’ Hispanic should Raquael Tomasino, American). It’s targeting various age targets be an integral part of the budget pre-planning EVP, Director of Media Services process. Assess Hispanic share vs. the GM; and influencers. Companies like McDonald’s The Honorable Michael Powell, Chairman and weigh the trade-offs of where you spend. who do this well, have very strong Hispanic Federal Communications Commission, 445 positions. The $2.4 Billion spent in Spanish is still less 12th Street, Southwest, Washington, D.C. than 4% of all ad dollars—But it’s changing 20554 9. Not Understanding Your ‘‘Hispanic’’ quickly as companies spend more; traditional Dear Chairman Powell: My name is Linda Category categories like packaged goods, newer Lane Gonza´lez, president of The VIVA Category Dynamics Don’t Automatically categories like telecomm, health, travel, Partnership, Inc., a Miami-based advertising Apply. Know & Embrace The Differences. entertainment, or high-tech. Your ‘‘Hispanic’’ category is not at the same agency specializing in the U.S. Hispanic point of its lifecycle development; and 4. Thinking Hispanics Are Effectively market. My professional experience over the Latinos are often behind on the learning Reached Via English Media past 15 years has been almost exclusively in the U.S. Hispanic market, having worked curve. Cultural and lifestyle differences affect Spanish Ads are Critical; English-language with some of the greatest pioneers of our perceptions, needs, motivations and Spillover Is Not Necessarily Effective. Don’t field, Lionel Sosa, Carlos Montemayor, Paul advertising. Demographic barriers may not say, ‘‘Half of Hispanics see our spots, they’re Castillo and others over the years on a variety exist; but perceptual barriers need to be the ones with the money.’’ Spanish media addressed, like in cable or banking. of accounts including Chrysler, Builder’s continues to grow; 70% of Hispanic TV Square, Cuervo, CBS, Verizon Wireless, 8. Not Having a Long-Term Hispanic Market viewing goes to Spanish, up from 45% in Uniroyal, Meow Mix, and Entenmann’s. Plan 1995. Spanish broadcast gets the majority of I have been asked to comment on whether Have a Consistent & Integrated Hispanic share even among bilinguals. To know what or not I believe the U.S. Hispanic media Strategic Branding and Retail Plan. You need to spend, apply a systematic budget formula market is actually a separate market. My to have bilingual training, people, operations; that accounts for Nielsen spill, Roslow answer is an emphatic yes. To which could multi-media advertising, promotions and PR. comprehension, population and CPP’s. be added an emphatic of course! Hispanics Some believe you don’t need a Hispanic Nationally, 10% of total dollars should go to are different in many ways: be it culture, branding campaign due to the myth of Spanish, 4% to English-Hispanic; in L.A., language, or the numerous customs and Hispanic brand loyalty. Hispanics will 30% to Spanish, 11–18% to English- traditions. Research shows that in-language respond and brand-switch. You can’t assume Hispanic. Hispanic median income is $49K programming is more impactful to the your established General Market or Latin (85 index vs. GM), so it’s highly likely Hispanic target when it connects on a deeper American efforts will bleed over. Classic Hispanics can afford your product. level, in language and culturally relevant.

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The Hispanic media market and its television stations broadcasting in their own culture or a growing consumer powerhouse numerous vehicles are a separate, relevant language. The Spanish language radio and loyal to their ethinicity. Time has proven that entity. From Nielsen to Arbitron—media is TV stations serve a distinct consumer base the latter is the correct assessment of this adapting and adjusting to the ever-growing with different brand awareness, tastes and market. Almost everyday, articles are Hispanic population. Nielsen has adjusted preferences. To be sure it’s a separate published in major newspapers throughout the way it measures audience levels due to population with different growth rates. the United States confirming the importance the exploding Hispanic numbers. Arbitron As the F.C.C. reviews the Univision/HBC of reaching Hispanics in their own language, continues to be challenged and is currently merger I hope the information highlighted showing sensitivity to their particular modifying their methodology on how to here will help provide direction and the right customs. accurately measure Hispanic audience levels. decision to this important question. The Hispanic market has evolved into a I hope my comments will be useful in the Sincerely. rich mosaic of cultures. Each segment with commission’s consideration of the U.S. Richard Cotter its own set of goals, music preferences and Hispanic media market as a separate and Senior Partner, USA Director of Local interests. There are two common relevant entity and in its review of the Broadcast denominators: Language and pride of culture. Univision/HBC merger. Endless research has shown time and time Very sincerely yours, May 2003 again that Hispanics respond better when Linda Land Gonza´lez, As a media executive, I’ve been asked to approached in espan˜ ol. The message is even President, The VIVA Partnership, Inc., 4141 comment on whether the US Hispanic media more effective if it is tailored to their N.E. 2nd Avenue, Suite 203E, Miami, FL market is a separate market from the general particular cultural background. Hispanic 33137 market. There is no question that the media, particularly radio and TV play a key Hispanic market is indeed separate and role in the success of any promotional effort May 27, 2003 should always be considered as such. targeted to this important market. Hispanics The Honorable Michael K. Powell There is ample evidence and factual depend on radio and TV for their news, Federal Communications Commission, 445 corroboration to conclude that this to be true. entertainment and lifestyle trends. Hispanic 12th Street, SW, Washington, 20024 The language of preference for many radio and TV are their emotional link to their Dear Chairman Powell: My name is Tere Hispanics, whether they are recent arrivals or roots. Zubizarreta, President & CEO of Zubi US born, is Spanish. The importance of the Hispanic media, in particular radio and Advertising. culture to Hispanics is such that parents TV, has evolved into a market in itself. Using I have been asked to comment on whether instill pride in language, customs, music and the most efficient technology and combing it the U.S. Hispanic media market is a separate dance to their children. In the mid seventies, with the characteristics of the Hispanics’ market. There’s no doubt that the Hispanic the US had about 50 Spanish-language radio simpatı´a, makes it stand out and be different media market is an entity completely stations in the entire country. Today over 600 from any other mass communication venue. separate from the ‘‘general market’’. radio stations dot the landscape with stations I trust that the views offered here may be As will be shown below, there is ample cropping up in markets where just 10 years useful in the consideration of the U.S. evidence and factual corroboration to ago no one would have guessed the need for Hispanic media market as a separate and conclude that the U.S. Hispanic media Spanish formats would be. relevant venue. market is a separate market. The same holds true for Spanish-language The Hispanic media market stands alone TV. We’ve seen the growth in the number of May 27, 2003 since it caters strictly to those U.S. residents networks and independent stations To Whom it May Concern: My name is Pat (33 million by 2000 census). In their native everywhere. Some markets, such as Chicago, Delaney. I am President of DMA and have language, taking into account cultural Miami and Los Angeles have at least five been in the advertising industry for over 27 idiosyncrasies and family values. Spanish-language TV options. years. I have planned and purchased all The media availability to address this The bottom line is, if you don’t speak mediums throughout the US for clients such market is professional in its programming Spanish, chances are you ignore Spanish- as: Reebok, Wendy’s International, BMW, and formats are according to the language media. Similarly, if you don’t speak AutoNation, Terminix, Rite Aid Drugs, Toys demographics in each of the major Hispanic English, or just simply prefer Spanish, R Us, just to name a few. markets. chances are you ignore English-language I have been asked to comment on whether This fact is particularly important when media. So if you’re not speaking to me in the the US Hispanic media market is a separate looking at the radio and TV networks as the language I prefer, I’m not listening to your market. Also, whether there is ample primary source of communication with this message. Few advertisers can afford to ignore evidence and factual corroboration to fast growing market. this market. conclude that the US Hispanic media market I hope the information provided will be There is no question as to the relevance of is a separate market: useful in the consideration of the U.S. this market, and ample evidence exists that The US Hispanic market is a separate Hispanic media market as a separate relevant it reached through Spanish-language media. market. Hispanics listen and watch various market. Emma Moya mediums differently than Anglos. With the Sincerely, VP/Client Services, Amistad Media Group, available research on Hispanics, it clearly Tere A. Zubizarreta 815 Brazos Street, Austin, Texas 78701 shows that while many Hispanics are bilingual, they still speak Spanish at home May 21, 2003 May 21, 2003 and do listen or watch Hispanic radio or TV. To Whom It May Concern, I’m Richard Ladies and Gentlemen: I am the Marketing It’s also substantiated by research that the Cotter, Senior Partner and Director of Local Director for the Historical Museum of number one radio or tv station in a given Broadcast for Mindshare. We’re one of the Southern Florida. My career in marketing market (eg. Los Angeles, Miami, etc.) is largest buyers of time on radio and television and advertising expands more than twenty Hispanic. This reflects all stations in a stations in America. years of experience in TV, radio and major market, not just Hispanic and indicates to an I’ve been asked to weigh in on the question publications in the Caribbean and United advertiser that a large percentage of their if Hispanics in the United States represent a States. potential customers are being missed if discreet market. The question is important I have been asked to offer some Hispanic media is not being purchased. In because it’s being used in the analysis by the observations about whether Hispanic media many markets, Hispanics account for over F.C.C. concerning the proposed merger of in the United States should be considered a 50% of the market. Univision Communications and Hispanic separate market venue from that of the Over the years I have found that with the Broadcasting Corporation. There’s ample general market. My answer is a definite, si, available research an advertiser can evidence and factual corroboration to por surpuesto. effectively reach their potential customers by conclude that the U.S. Hispanic media For the last two decades, major U.S. using both Hispanic and Anglo mediums. market is a separate market. corporations have debated whether or not to The research provides duplicated and First, the Hispanic media market is consider Hispanics just a minority group who unduplicated listenership/viewership of the separated from the rest by it’s own radio and will, in time, assimilate to the American media purchased to assure full coverage of

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both Hispanics and Anglos. Without this Ana, I hope this information helps you Commissions consideration as it reviews the research it would be a shot in the dark. with your survey and please understand this Univision/HBC merger. The central point is I hope this information provided will be is my opinion and not of Labatt USA. the US Hispanic media market is a separate useful in the consideration of the US Sincerely Yours, entity. First, the radio and TV stations which Hispanic media market as a separate relevant Nelson Quintero make up this market deal a separate market. District Manager Southeast Florida consumer base and communicate to it in a Sincerely, different language. Secondly, the markets May 21, 2003 Pat Delaney population base differs as does its brand Federal Communications Commission awareness and cost structure. May 23, 2003 445 Twelfth St. South, Washington, DC Turn the channel-tune your radio. Your To: Federal Communications Commission, 20554 eyes and ears should convince your mind Honorable Michael Powel To Whom It May Concern: My name is and heart this truly is a distinct market. Marci Neill I am the advertising coordinator Sid Paterson I am Mike Herrera. My experience is for Glendale Nissan/Infiniti. Miami, May 21, 2003 Florida Distributor Coordinator. I have I have been asked to comment on whether To Whom it may concern: I am Gonzalo J. worked in the Florida Market for 17 years in the U.S. Hispanic media market is a separate market, for the purpose of assisting the FCC Gonzalez, Managing Officer at BVK/Meka in the beer Industry. Fourteen years with Miami. My experience in the advertising Anheuser Busch and the last three with in its ongoing review and analysis of the pending merger of Univision industry includes over 15 years working with Presidente U.S.A. Presidente Beer is one of Communications and Hispanic Broadcasting most product categories in the United States, the leading beers in the U.S. that markets to Corporation. Spain and Latin America. Hispanic consumers across the country. The first and most obvious example would BVK MEKA is one the leading Hispanic I have been asked to comment on whether be separate languages. From there the list advertising and Public Relations marketing the U.S. Hispanic media market is a separate goes on and on to include the following, firms, and the Hispanic Division of BVK in market. separate location, population, growth rate, Milwaukee, ranked among the top 50 There is ample evidence and factual income level, brand preferences, and cost Advertising Agencies in the United States. corroboration to conclude that the U.S. basis, to name just a few of the reasons why Our current client list for the US Hispanic Hispanic media market is a separate market. as an advertiser it is critical to able to target market include SouthWest Airlines, Sprint Research companies such as Simmons Hispanic media, both TV and Radio as a PCS, Pfizer, South East Toyota, Samsonite, measures media habits, product and service separate market. Samsung and the Florida Anti-Tobacco usage, demographics and psychographics of I hope the Commission will take these campaign among others. Hispanic consumers across the country. factors into consideration when reviewing I have been asked to comment on whether In addition to the Nielsen media research the Univision/HBC merger. the U.S. Hispanic media Market should be is one of the market leaders in terms of Sincerely, considered as a separate market. Not only for providing quality measurement of Hispanic Maric Neill the proven effectiveness of the Spanish TV audiences. Advertising Coordinator. Language in communicating messages, but When Presidente Beer commences its also because of the different media habits and marketing planning and forecast our strategic To Whom It May Concern, my name is cultural relevance of programming, the approach is to identify the key markets Jaime Amoroso, general manager of Toyota of Hispanic media is and should be considered within our Demographic group and separate Manhattan. I’ve been in automotive sales for separate when planning, buying and within each market the hispanic and general over 15 years. evaluating broadcast media. market. This strategic marketing approach is I’ve been asked to give my opinion on the This fact has been proven by numerous used in all of our key markets across the question, ‘‘Do Hispanics in United States research developed by the most prestigious United States. represent a unique market?’’ The question is research companies, such as Nielsen, Roslow I hope the information provided will be been used in the consideration of the Institute, Scarborough, Strategy research, useful in the consideration of the U.S. pending merged between Univion among others. Communications and Hispanic Broadcasting. Hispanic media market as a separate relevant As a result of this, companies that measure The answer is clearly ‘‘YES’’. While we are market. and monitor broadcast media, such as Americans we are also Hispanics with so Sincerely, Nielsen and Arbitron, has adapted their many different things that make us unique Mike Herrera methodology in term of measuring Hispanics such as the foods we eat, our traditions, our Presidente U.S.A. across the country, publishing separate culture and so much more. We have our own To: Ana Figueroa Hispanic books with the results of their separate language with our own tastes, From: Nelson Quintero surveys. preferences and brand awareness. We have I hope the Point of View will be useful in Date: May 22, 2003 our own population with it’s own unique the consideration of the U.S. Hispanic media Re: Hispanic Survey growth rate. In reference to your questions regarding the We have distinct radio, television stations, market as a separate relevant market, and feel Hispanic media survey my personal opinion and programs that appeal specifically to us. free to contact me should you need to further is that Hispanic media should be maintained These stations and programs broadcast discuss this matter. separate from the general market. The directly to our community in our language Sincerely, Hispanic market is a different segment and with it’s own cost base, discreet Gonzalo J. Gonzalez, should be targetted differently. In the beer demographics and targets. It is unique and Managing Officer. industry we face these challenges everyday separate. May 21, 2003 trying to cross over to a complex ethnic As the F.C.C. reviews the Univision/HBC Federal Communications Commission market with such a Latin American influx merger I hope the information highlighted 445 12th Street, SW., Washington, DC 20554 and diversity. We are struggling trying to here will help provide direction and the right convey the same message. decision to this most important question. To Whom It May Concern: It is with great In reference to Radio, the audience of most Sincerely, concern that our firm has approached you listeners are probably working people or Jaime Amoroso regarding the proposed merger between HBC traveling in vehicles. During the most busy and Univision. traffic hours and lunch time most people are June 2, 2003 As a boutique firm in Coral Gables listening to the radio. This is a key time for To Whom It May Concern: I’ve owned and providing counsel in the areas of Advertising, messages and commercials to get across. For operated a radio and TV buying service in event marketing and public relations, we example; lunch hour at any restaurant, bar or New York City for many years. foresee the ramifications of this proposed cafe´ usually has a radio station playing. I I’d like to share my thoughts with you merger. We are a young firm, comprised of think today’s TV viewer’s are looking for concerning the Hispanic market in the hopes individuals who have been active in the specific shows, movies or the nightly news. my comments will be useful in the advertising industry in the South Florida

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marketplace for over a decade, particularly in The more I see the situations occur, the I have delivered this or very similar Hispanic media. We live in this market, and more I realize that there are still many people presentations on numerous occasions to a understand the unique elements it’s in South Florida and the U.S. that still don’t broad spectrum of general business and comprised of including how cyclical it is. get it. Hispanic marketing audiences. The most The South Florida market will severely suffer The Hispanic market is more than just a recent was at the Central Florida Hispanic if this merger happens. true and separate market from the general Chamber of Commerce. Our philosophy rests on the shoulders of market. It has several ‘‘sub-markets’’ within I have edited out only my personal innovation and we stand strong in our focus itself. It is more suffice to think that with just (humorous) anecdotes; actually, they were on providing unique and cost effective one campaign, or one spot, or one theory, we the best part. methods for our clients to achieve their can reach the entire Hispanic market. Best regards, marketing goals. However, we believe that Hispanics in the U.S. are truly diverse. South A COUNTRY WITHIN A COUNTRY the uniting of the nation’s number-one Florida alone has possibly the most diverse Spanish-language television operator and the Hispanic market in the country, comprised The U.S. Hispanic market is frequently number-one Spanish-language radio owner mostly of people from the Caribbean, Central referred to as ‘‘a country within a country resembles the Clear Channel model. and South America. * * * larger than Canada * * * the fourth Formulas such as this have truly made it Unquestionably, the same applies to all the largest Spanish speaking country in the difficult for agencies and local businesses Hispanic markets across the U.S. Hispanics hemisphere larger than Peru, Venezuela, such as ours to thrive in a marketplace where have become an important part of our Chile or Ecuador.’’. 42.6 million strong as it relates to placing media, there are very population with their rapid growth, as well (including Puerto Rico), the population is few competitors. as their increasing buying power as expected to grow by more than 1.7 million We are convinced that with such a merger consumers. This is a market with different per year. That’s 100,000 people every three taking effect, many areas of our industry will cultures, ideas, values and customs. weeks or 5,000 every day. be directly affected. Our concerns are the Therefore, it is critical that Hispanics be Hispanic purchasing power exceeded $630 strong negative effects on both the general as considered as a separate market in order to billion in 2002. In and of itself, it represents well as the Hispanic market. We are reach them effectively and allow prospective the 9th largest economy in the world, larger specifically concerned about the business advertisers to communicate with their than the GDP of Brazil, Spain and even practices and methodology that will powerful and evolving segment of our Mexico. All indices and economic ultimately impact the consumer. country. measurement standards reflect growth and We would also like to comment on the increased prosperity. In the decade between Thank you 1979 and 1999, the number of Hispanic issue of whether the Hispanic media market Tony Garcia is a separate one. Our firm firmly believes it families reaching the middle class (defined as is. Just to begin, this is a market that has its President, The Menda Group those earning between $40,000 and $140,000) increased 71.3% to 2.5 million, fully one- own consumer base that possess their own To Whom It May Concern, I’m Helane tastes, brand awareness, brand preferences, third of the total. Naiman. I have worked in media in New The numbers get even more interesting in media, cost basis, population and language. York City for over twenty five years and have How can one ignore the facts listed above? terms of business ownership. According to for the past five years owned my own ad American Demographics Magazine, Including both television and radio, it is agency/buying service, HN Media & evident that this market has its own unique Hispanics now account for the largest share Marketing, Inc. of minority entrepreneurs in the United set of separate characteristics, its own buying I’ve been asked to comment on whether the power, and its own consumer States, owning 40% of all such businesses. U.S. Hispanic media market is a separate The Census Bureau’s last economic census psychographics. market for the purpose of assisting the F.C.C. We implore the Commission to consider reported 1.2 million Hispanic owned in its ongoing review and analysis of the businesses with aggregate revenue in excess the ample evidence aforementioned. My firm pending merger between Univision could not feel more strongly about this of $1.86 billion. The 2002 estimate put the Communications and Hispanic Broadcasting figure at 2.3 million with $380 billion in matter. We respectfully seek your assistance Corporation. In my opinion it certainly is. in protecting the industry comprised of sales. In 2001, the census also reported Here are just a few reasons why. The Hispanic labor-force participation at 80.4% agencies and advertisers alike who realize Hispanic population has separate tastes. It how critical this matter is and how this (FYE 2000), higher than non-Hispanic white differs in brand awareness with a uniquely males as a whole proposed merger will affect the future of our different consumer base. Hispanics in the industry. We trust in the judgment of the It is evident that even official agencies United States have their own media. The consider this market a discrete entity within Commission and rely on its plight to protect market includes both radio and television the overall public’s interest. Please take our the larger marketplace measured and stations that broadcast in the Spanish reported accordingly. And while other plea into consideration. If need be, our firm language. is at your disposition as it relates to the minority markets are similarly measured in a I hope this information is useful to the number of areas, the Hispanic market stands Commission’s consideration of the U.S. Commission in their consideration of this Hispanic media market as a autonomous alone as a self-contained, differentiated, issue. As the FCC reviews the question of ‘‘country-like’’ entity within U.S. borders; market and its review of the Univision/HBC whether Hispanics in the United States are a merger. one from which specialized disciplines, separate market the answer is clearly-yes. professions, governmental institutions, NGOs Sincerely, Yours Truly, and even foreign policy initiatives, have Liza M. Santana, Helane Naiman, arisen and will continue to arise well into the President, Creativas Group Inc. President foreseeable future. This is not a matter of Note: The letter dated May 27, 2003 from opinion. It is a matter of fact extremely well May 22, 2003 Accentmarketing was not able to be grounded in logic, as we shall see: To Whom It May Concern: As an published in the Federal Register but a copy 1. Let’s consider the other two large advertising agency in the South Florida can be obtained from the U.S. Department of minority segments in the United States, market for over 7 years, and as an advertising Justice, 601 D Street, NW., Room 10–013, African-Americans (excluding Haitian- professional for over 13 years, I am always Washington, D.C. 20530 or you may call and Americans) and Asian Americans. African- asked the same question from many of my request a copy at (202) 514–2558. Americans speak English almost exclusively. advertisers: ‘‘How can I reach the Hispanic May 23, 2003. There are few direct linkages to African market?’’ countries of origin. Non-African Americans The question would seem to have a simple Mr. Raul Alarcon Jr. may easily communicate and participate in answer: ‘‘Just through some budget dollars to Chairman, Spanish Broadcasting System, this sub-segment at will. They are tied to the a couple of Hispanic stations, translate our 2601 South Bayshore Drive, Penthouse II, mainstream culture by language if not by current spot (some advertisers actually use Coconut Grove, FL 33133 color. their English spot in Spanish language Dear Raul, enclosed is a synopsis of my 2. The Asian-American segment is stations), and go with it!’’ position paper on the U.S. Hispanic market. composed by a multiplicity of cultures

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divided by language—Chinese (Mandarin that they were wrong about assimilation diversity purposes. The proposed Univision/ and Cantonese), Japanese, Korean, (which did not and will not take place), were HBC merger threatens to create substantial Vietnamese, Hindi, Bengali, Urdu, Malay, wrong to remain intransigently monolingual market power in numerous geographic Punjabi—the influence and economic as if it were a badge of honor and thus, with markets for Spanish-language broadcasting to advantages (cost-effectiveness) that spring very few exceptions and these only in the the detriment of advertisers, consumers, from critical mass are elusive if not multi-national arena, incapable of creating competition, and diversity. This letter impossible. Therefore, other than grassroots Hispanic divisions organically. Ultimately, submits data demonstrating the severity of marketing or media outlets serving small they had to buy the agencies. Most were enclaves, any Pan-Asian network or national motivated by profit potential others to keep that threat in the ten metropolitan areas with print vehicle would be either highly the market in check and under control. the largest Hispanic populations. fragmented in a multiplicity of languages or 6. The increasing acceptance of Mexican Attached hereto is a chart for each of the require English as the common denominator. Matriculas, the strengthening of Radio top ten Spanish-language broadcast markets 3. Language is the single most important Marti’s signal, NAFTA and the proposed displaying the market share of each characteristic of culture and Hispanics in the FTAA, point to Hispanic interests participant in terms of combined television United States are united by a common influencing the national agenda well beyond and radio advertising revenues for 2002.1 In language traced to Spanish colonizers the Congressional Hispanic Caucus. This is seven of the top ten markets, the combined regardless of whether these are viewed as understandable as Hispanics represent the ruthless conquistadors (Mexico) or brothers entity’s (Univision + HBC) post-merger country’s largest pool of bilingual, market share will equal or exceed 60%, and from the mother country (Cubans). If this transnational citizens. It may be a small in two of the top ten markets the combined were not the case, neither national broadcast percentage of the vast United States of networks nor national print media would be America, but a critical component of the entity’s market share will exceed 70%. viable business models. This isn’t to say that country’s hemispheric—perhaps global— Indeed, in San Antionio, the combined entity there aren’t English dominant Latinos, but aspirations. A country within a country will control a striking 80% of the market. rather that for marketing and indeed. Only in Brownsville/McAllen (13%) and communications purposes we include them New York (48%) will the combined entity in the mainstream universe just as we Exhibit B exclude non-Spanish speakers from the have a market share below 50%. When May 20, 2003 Hispanic consumer pool. Spanish dominant Entravision’s market share is included To Whom it May Concern: I am Julio Latinos then, by necessity, must rely on (Univision + HBC + Entravision), the Amparo. I have worked in the Hispanic Spanish language media even to exercise combined entity’s market share ranges from market as an owner of an independent their right to vote; bilingual Latinos may 48% in new York to 84% in Phoenix. For advertising agency for over 15 years. choose either language based on content or convenience, the table below summarized the self-identification. Considering that Latinos I have been asked to comment on the pending merger between Univision distribution of revenue shares for the are basically absent from general market combined entity, with and without media, being depicted as less than 2% of all Communications and Hispanic Broadcasting Entravision. As illustrated by the data in this characters (while more than 12% of the Corporation. An important question the population) and often in the most negative F.C.C. is facing is whether or not the U.S. table, the combined entity would account for roles, bilingual Hispanics are practically Hispanic market is separate market. a large majority of advertising revenues in 8 compelled to turn to Spanish language media First, we speak a different language. We (or 9) of the top ten markets. to see and/or hear themselves. have our own consumer base, our own and 4. This cultural phenomenon known as separate tastes. As an owner of an ad agency I can tell you Hispanics have their own brand Hispanic-America, and its need for in- 1 awareness for our own products. Our The charts were prepared using the following language communications that respects and methodology: The advertising data for both population growth is different, the cost embraces our multiracial identities, musical broadcast radio and broadcast television were structure of media is separate—we are a preferences and folkloric richness created the obtained from BIA, In., through its Media Access separate consumer base. Hispanic advertising industry. The Pro software (current as of June 5, 2003). BIA The Hispanic Media market—radio and TV Association of Hispanic Advertising provides station-level revenue and ownership data Agencies was organized in recognition that combined—is a separate and distinct market. for more than 13,000 radio stations and nearly 2,000 ours is a marketing sector that could not and Listen and you will hear with your ears we commercial television stations in the United States. would not be well served by general market are a separate market. Revenues from BIA are estimated using data from entities; the very same who for more than 30 I hope my comments will be useful in the its proprietary survey of station managers and years had been predicting with almost Commission’s consideration of the U.S. owners. For radio stations, BIA reports information evangelical fervor our assimilation and Hispanic media market as a separate relevant on station format. These data were supplemented demise. The truth is that Hispanic entity and in it review of the Univision/HBC with information from the 2002 Television and advertising and media professionals merger. Cable Factbook, 2002 U.S. Hispanic Market (a constitute a unique business specialty. As Julio Ampara, publication of Strategy Research Corporation), and managers, we must have as thorough an President. various internet websites, including understanding of the disciplines as our June 11, 2003 www.100000watts.com. monolingual, general market counterparts Marlene H. Dortch First, all of the radio and television stations and communicate in English with our clients, Secretary, Federal Communications broadcasting to the ten metropolitan areas with the bankers, the IRS and the 21 year old brand Commission, 445 12th Street, SW., largest Hispanic populations were identified. Using manager who has never traveled outside of Washington, DC 20554 information from BIA as well as internet-based Indiana, yet transcreate, transform, interpret research, each station’s language format was Re: Applications for Transfer of Control of and connect with our consumers in Spanish, determined. A radio station was classified as a Hispanic Broadcasting Corp., and Certain the language most likely to produce the sales Spanish-language station if a portion of the BIA Subsidiaries, Licensees of KGBT (AM, and economic benefits sought by our clients. format description was Spanish )BIA reports the Harlingen, Texas et al. (Docket No. MB 02– ‘‘Compre nuestro auto, nuestro jugo y traiga current format, which may not necessarily su dinero a nuestro banco.’’ It’s the American 235, FCC File Nos. BTC–20020723ABL, et correspond to the station’s format in 2002, although way. Consumer spending is the backbone of al.) we believe relevant changes, if any, to be minimal) our economy. And let’s be realistic, the Dear Ms. Dortch: Spanish Broadcasting or, alternatively, if it could be determined that a mainstream population base is experiencing System, Inc. (‘‘SBS’’) has submitted several portion of the station’s programming was in negative birth rates. All U.S. population filings for the record of this proceeding Spanish. Similarly, for television stations, a station growth is directly attributable to minority demonstrating that Spanish-language media was classified as Spanish-language if a portion of and immigrant sub-segments. The Census does not compete with English-language the station’s programming was in Spanish. Because says so. media. In other words, Enligh-language and all Univision television stations broadcast in 5. The wave of Hispanic agency Spanish-language broadcasting constitute Spanish, this decision rule provides a conservative acquisitions by general market firms shows separate markets for competition and estimate of Univision’s revenue share.

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CUMULATIVE DISTRIBUTION OF 2002 merger, the combined entity will have the SPANISH-LANGUAGE BROADCAST BROADCAST ADVERTISING REVENUE power to insist that Spanish-language ADVERTISING REVENUES, 2002 advertisers who wish to advertise through SHARES* both radio and television purchase time from [New York: Hispanic Population of 4.0 million] both Univision and HBC rather than from the Univision Univision + combined entity’s rivals. Such difficult-to- Percent Share + HBC HBC + detect and subtle tying arrangements or Entravision refusals to deal—realistic possibilities here— Univision ...... 41 impair competition. See, e.g., Lorain Journal SBS ...... 28 >80% ...... 1 Co. v. U.S., 342 U.S. 143 (1951). The Telemundo ...... 18 >70% ...... 2 5 resulting harm to competitors, including ≥60% ...... 7 7 HBC ...... 7 SBS, that is sure to follow will not only harm Other ...... 6 >50% ...... 8 9 advertisers, but also will impair diversity. >40% ...... 9 10 To meet its obligations under the Notes: Advertising revenue-based satellite * Numbers may differ from those obtained Communications Act, the FCC must program services that also offer Spanish-lan- from the charts due to rounding. undertake a detailed analysis of diversity and guage programming include services such as competition specific to a Spanish-language Galavision Cable Network, MTV Latin America These high market shares—including media markets implicated by this merger. In and Viva Television Network. above 70% in several markets—demonstrate addition to the materials submitted last week Sources: 2002 BIA, Inc.; 2002 Television that the merger will enable the new and filed today, SBS intends to file shortly and cable Factbook; 2002 U.S. Hispanic Mar- ket, Strategy Research Corporation. Univision/HBC to exercise substantial market with the Commission further information or monopoly power to the detriment of both demonstrating the severity of the threat to Spanish-speaking consumers and advertisers competition and diversity presented by the SPANISH-LANGUAGE BROADCAST who seek to reach that audience. For ‘‘a share proposed merger. ADVERTISING REVENUES, 2002 above 70% is usually strong evidence of Respectfully submitted, [Miami: Hispanic Population of 1.7 million] monopoly power’’ and ‘‘a share between 50% / s / Philip L. Verveer and 70% can occasionally show monopoly Philip L. Verveer power.’’ Broadway Delivery Corp. v. United Sue D. Blumenfeld Percent Parcel Service of Am., Inc., 651 F.2d 122, 129 Michael G. Jones (2nd Cir. 1981). Even a share below 50% can David M. Don Univision ...... 35 support a finding of monopoly power when WILLKIE FARR & GALLAGHER, 1875 K Telemundo ...... 20 other indicia of such power—such as the Street, NW., Washington, DC 20006, HBC ...... 20 high entry barriers present here—exist. See Telephone: (202) 303–1000 SBS ...... 15 id. The consequences of a monopoly in and Other ...... 9 Spanish-language broadcasting is not only Bruce A. Eisen Entravision ...... 0.20 higher rates for advertisers, but also a Allan G. Moskowitz substantial loss in diversity of voices. Notes: Advertising revenue-based satellite KAYE SCHOLER, LLP, 901 15th Street, NW., Moreover, where, as here, the combined program services that also offer Spanish-lan- Suite 1100, Washington, DC 20005 entity will control over 40% in all or guage programming include services such as Attorneys for Spanish Broadcasting System virtually all of the major relevant markets, Galavision Cable Network, MTV Latin America Inc. and Viva Television Network. diminished economic performance is likely. Sources: 2002 BIA, Inc.; 2002 Television See FTC v. Swedish match, 131 F. Supp. 2d cc: Chairman Michael K. Powell, Commissioner Kathleen Q. Abernathy, and cable Factbook; 2002 U.S. Hispanic Mar- 151, 166 (D.D.C. 2000) (‘‘Without attempting ket, Strategy Research Corporation. to specify the smallest market share which Commissioner Michael J. Copps, would still be considered to threaten undue Commissioner Kevin J. Martin, PANISH ANGUAGE ROADCAST concentration, we are clear that 30% presents Commissioner Jonathan S. Adelstein, S -L B a threat.’’ quoting United States v. Susan M. Eid, Stacy R. Robinson, Jordan B. ADVERTISING REVENUES, 2002 Philadelphia National Bank, 374 U.S. 321, Goldstein, Catherine Crutcher Bohigian, [Chicago: Hispanic Population of 1.6 million] 364 (1963)). In sum, the market shares shown Johanna Mikes, W. Kenneth Ferree, David Brown, Scott R. Flick, Counsel for here present a real risk of anticompetitive Percent harm to Spanish-language advertisers, as well Univision Communications, Inc., Roy R. Russo, Counsel for Hispanic Broadcasting as a critical loss of diversity to Spanish- Univision ...... 33 speaking Americans in these markets. Corp., Harry F. Cole, Counsel for Elgin FM Limited Partnership HBC ...... 30 Moreover, the merger threatens both SBS ...... 22 competition and diversity whether or not Telemundo ...... 8 Spanish-language television and radio PANISH ANGUAGE ROADCAST compete in the same market. The reason is S -L B Entravision ...... 4 that the merger gives Univision/HBC the ADVERTISING REVENUES, 2002 Other ...... 4 power to exclude competition even if [Los Angeles: Hispanic Population of 7.0 Notes: Advertising revenue-based satellite Spanish-language TV and radio belong in million] program services that also offer Spanish-lan- different markets. First, the Univision/HBC guage programming include services such as merger would raise already high entry Percent Galavision Cable Network, MTV Latin America barriers into Spanish-language radio. and Viva Television Network. Advertising on Spanish-language TV is Univision ...... 41 Sources: 2002 BIA, Inc.; 2002 Television important to a Spanish-language radio HBC ...... 19 and cable Factbook; 2002 U.S. Hispanic Mar- station’s ability to obtain significant Entravision ...... 5 ket, Strategy Research Corporation. audience. Indeed, several of SBS’s stations SBS ...... 6 only succeeded because of risky and Telemundo ...... 13 SPANISH-LANGUAGE BROADCAST expensive television advertising campaigns. Other ...... 15 ADVERTISING REVENUES, 2002 However, after its acquisition of HBC, Univision—which dominates Spanish- Notes: Advertising revenue-based satellite [Houston: Hispanic Population of 1.6 million] language television—will have an incentive program services that also offer Spanish-lan- guage programming include services such as Percent to refuse to deal with, or discriminate Galavision Cable Network, MTV Latin America against, Spanish-language radio competitors and Viva Television Network. (including SBS) who seek to advertise Sources: 2002 BIA, Inc.; 2002 Television Univision ...... 32 through Univision (and other properties) in and cable Factbook; 2002 U.S. Hispanic Mar- HBC ...... 42 order to advantage HBC. Second, after the ket, Strategy Research Corporation. Other ...... 19

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SPANISH-LANGUAGE BROADCAST AD- SPANISH-LANGUAGE BROADCAST AD- this case, and that leads to the conclusion VERTISING REVENUES, 2002—Con- VERTISING REVENUES, 2002—Con- that the transaction is contrary to the public interest. He made two specific points. tinued tinued First, Mr. Schwartzman discussed the [Houston: Hispanic Population of 1.6 million] [San Antonio: Hispanic Population of 1.2 extraordinary and insuperable barriers that million] any new entrant would face in trying to Percent compete with the combined Univision/HBC Percent entity. Unlike English language markets, a Telemundo ...... 6 competitor would face great difficulty in Other ...... 3 making the audience aware of its service, as Notes: Advertising revenue-based satellite Univision would control the principal means program services that also offer Spanish-lan- Notes: Advertising revenue-based satellite program services that also offer Spanish-lan- of promoting and advertising a new radio guage programming include services such as station, i.e., Spanish language broadcasting. Galavision Cable Network, MTV Latin America guage programming include services such as and Viva Television Network. Galavision Cable Network, MTV Latin America Moreover, Clear Channel, which would be Sources: 2002 BIA, Inc.; 2002 Television and Viva Television Network. one of the largest shareholders of the and cable Factbook; 2002 U.S. Hispanic Mar- Sources: 2002 BIA, Inc.; 2002 Television combined companies, is the largest owner of ket, Strategy Research Corporation. and cable Factbook; 2002 U.S. Hispanic Mar- outdoor advertising, which is the second ket, Strategy Research Corporation. most important advertising medium used for SPANISH-LANGUAGE BROADCAST this purpose. SPANISH-LANGUAGE BROADCAST Mr. Schwartzman then turned to how the ADVERTISING REVENUES, 2002 ADVERTISING REVENUES, 2002 Spanish language market should be treated [San Francisco/San Jose: Hispanic Population [Phoenix: Hispanic Population of 1.0 million] from a diversity perspective. He noted that of 1.4 million] under the FCC’s 1981 radio deregulation decision, broadcasters were freed from the Percent Percent obligation to serve every enumerated Univision ...... 47 audience segment in their community. They Univision ...... 48 HBC ...... 22 were, however, expected to demonstrate that Other ...... 19 Entravision ...... 15 they have met the problems needs and Entravision ...... 17 Telemundo ...... 9 interests of whatever niche audience segment HBC ...... 14 Other ...... 7 they might have chosen to serve. Plainly Telemundo ...... 2 then, the Commission treated Hispanic other Notes: Advertising revenue-based satellite minority communities as distinct for this Notes: Advertising revenue-based satellite program services that also offer Spanish-lan- purpose as well. program services that also offer Spanish-lan- guage programming include services such as In response to questioning from Ms. Eid, guage programming include services such as Galavision Cable Network, MTV Latin America Mr. Schwartzman explained that he thought Galavision Cable Network, MTV Latin America and Viva Television Network. Sources: 2002 BIA, Inc.; 2002 Television it was entirely logical for the Commission to and Viva Television Network. conduct an analysis of the impact of a Sources: 2002 BIA, Inc.; 2002 Television and cable Factbook; 2002 U.S. Hispanic Mar- ket, Strategy Research Corporation. transaction on particular segments of the and cable Factbook; 2002 U.S. Hispanic Mar- community while still including the same ket, Strategy Research Corporation. SPANISH-LANGUAGE BROADCAST stations in voice counts and other analyses of the entire market. Thus, the question of how SPANISH-LANGUAGE BROADCAST ADVERTISING REVENUES, 2002 many stations a particular broadcaster might ADVERTISING REVENUES, 2002 [Brownsville/McAllen: Hispanic Population of own in a market would be a separate issue 1.0 million] [Dallas/Ft. Worth: Hispanic Population of 1.3 from whether it held excessive power within million] the Spanish language submarket. Percent Sincerely, Percent Andrew Jay Schwartzman Entravision ...... 45 President and CEO Other ...... 30 Univision ...... 47 HBC ...... 13 cc. Susan Eid HBC ...... 22 Telemundo ...... 12 July 11, 2003 Telemundo ...... 20 Entravision ...... 8 Notes: Advertising revenue-based satellite W. Kenneth Ferree, Esquire Chief, Media Bureau, Federal Other ...... 3 program services that also offer Spanish-lan- guage programming include services such as Communications Commission, 445 12th Notes: Advertising revenue-based satellite Galavision Cable Network, MTV Latin America Street, NW., Room 3–C740, Washington, program services that also offer Spanish-lan- and Viva Television Network. DC 20554 guage programming include services such as Sources: 2002 BIA, Incl; 2002 Television and cable Factbook; 2002 U.S. Hispanic Mar- Re: Applications for Transfer of Control of Galavision Cable Network, MTV Latin America Hispanic Broadcasting Corp., and Certain and Viva Television Network. ket, Strategy Research Corporation. Subsidiaries, Licensees of KGBT(AM), Sources: 2002 BIA, Inc.; 2002 Television July 9, 2003 Harlingen, Texas et al. (Docket No. MB 02– and cable Factbook; 2002 U.S. Hispanic Mar- Marlene H. Dortch ket, Strategy Research Corporation. 235, FCC File Nos. BTC–20020723ABL et Secretary, Federal Communications al.). Commission, TW–A325, 445 12th Street, Dear Ms. Dortch: The National Hispanic SPANISH-LANGUAGE BROADCAST SW., Washington, DC 20554 Policy Institute, Inc. (‘‘NHPI’’) hereby replies ADVERTISING REVENUES, 2002 Re: Notice of Ex parte Presentation, MB 02– to the June 25, 2003 letter filed by Univision [San Antonio: Hispanic Population of 1.2 235 Communications, Inc. (‘‘Univision’’). In its million] Dear Ms. Dortch: On July 8, Andrew Jay letter Univision again restates its contention Schwartzman of the Media Access Project that, if the proposed merger with Hispanic Percent met with Susan Eid, Legal Advisor to the Broadcasting Corporation (‘‘HBC’’) is granted, Chairman to discuss the proposed transfer of Univision’s interest in Entravision Univision ...... 43 control of Hispanic Broadcasting Communications Corporation (‘‘Entravision’’) HBC ...... 37 Corporation. will be non-attributable. SBS ...... 10 Mr. Schwartzman took the position that the In arguing for a ‘‘bright-line’’ attribution Telemundo ...... 7 Commission should treat Spanish language test, Univision claims that it demonstrated in radio as a separate market for purposes of a December 9, 2002 letter to the Media

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Bureau that its interest in Entravision is has refused to provide this information. Univision’s relationship with Entravision below the 33% threshold equity/debt plus Without knowing the extent of equity, and is significantly different from previous (‘‘EDP’’) ratio. In fact, Univision failed to the extent of debt Univision, its officers and relationships that the FCC has found to be make any such showing. directors hold in Extravision, the FCC cannot non-attributable. For this reason, the cases Univision’s December 9, 2002 letter was determine whether Univision complies with Univision cites in support of its claim that its filed in response to a November 29, 2002 the EDP rule. interest in Entravision, will be Commission request for further information. Univision’s failure to produce information, nonattributable are inapposite. The Commission was responding to a NHPI which is easily obtained and uniquely within Univision debt and equity interests in showing, that Entravision had outstanding its control, permits the Commission to draw Entravision have historically been debts owed to Univision. Univision had the negative conclusion that if the attributable interest. Univision has a long previously represented to the Commission information were produced it would show relationship with Entravision as a business that ‘‘Univision has no debt interest in that Univision, post-merger, will still have an partner, program supplier, creditor and Entravision.’’ 1 The Commission ordered attributable interest in Entravision. Tendler financial backer. In return for Univision’s Univision to ‘‘explain the origin and nature v. Jaffe, 203 F.2d 14, 19 (D.C. Cir. 1953) support, Entravision has granted Univision of such accounts.’’ It further ordered (‘‘The omission by a party to produce significant rights, including the right to Univision to, ‘‘[p]rovide an audited financial relevant and important evidence of which he appoint two directors to its board and the statement to support any factual assertion, has knowledge, and which is peculiarly right to influence its core operations. As and a detailed showing demonstrating within his control, raises the presumption Entravision’s SEC 10K acknowledges, compliance with the Equity/Debt Plus that if produced the evidence would be ‘‘Univision has significant influence over our Rule.’’ 2 unfavorable to his cause.’’); International business.’’ Univision proposes to convert its In response to the Commission’s letter, Union, UAW v. National Labor Relations voting shares into non-voting shares and to Univision submitted certain documentation, Board, 459 F.2d 1329, 1336 (D.C. Cir. 1972) give up its rights to appoint directors, to which it claimed showed that it was in (‘‘the failure to bring before the tribunal some Entravision’s board. This, however, will not compliance with the Commission’s EDP rule. circumstance, document, or witness, when change the fundamental well-established However, the evidence Univision provided either the party himself or his opponent relationship between Univision and was incomplete and not audited.3 As NHPI claims that the facts would thereby be Entravision. stated in its December 16, 2002 letter: elucidated, serves to indicate, as the most In none of the case Univision sites, did the ‘‘Univision has again misled the natural inference, that the party fears to do Commission permitted an applicant to Commission and has failed to be forthcoming so, and this fear is some evidence that the convert a long-standing attributable and candid in its representations to the * * * document, if brought, would have relationship with another party into a non- Commission. * * * Entravision’s DEF 14A exposed facts unfavorable to the party.’’) attributable interest. For example, General shows that ‘‘Andrew Hobson, Executive Vice (quoting J. Wigmore, Evidence § 284, 3rd ed. Electric’s purchase of Telemundo fully President of Univision, holds 211,136 Class 1940); United States v. Robinson, 233 F.2d complied with the multiple ownership rules A shares of Entravision. The DEF 14A also 517, 519 (D.C. Cir. 1956) (‘‘[u]nquestionably without the need to convert previously held shows that Michael D. Wortsman, Co- the failure of a defendant in a civil case to attributable interests into non-voting, non- President of Univision Television Group, testify or offer other evidence within his attributable interests.5 If, for example, Inc., holds 56,136 Class A shares of ability to produce and which would explain General Electric’s proposed purchase of Entravision. or rebut a case made by the other side, may, Telemundo did not comply with the FCC’s ‘‘Entravision’s DEF 14A reports stock in a proper case, be considered a multiple ownership rules and General ownership of (1) persons or entities known circumstance against him and may raise Electric proposed to convert its attributable to be the beneficial owners of more than 5% presumption that the evidence would not be interest in NBC into a non-voting interest, of the outstanding shares of stock, (2) each favorable to his position’’); Washoe Shoshone and further, if the FCC had permitted such of its directors, and (3) certain key executives Broadcasting, 3 FCC Rcd 3948, 3952–53 (Rev. a transaction, then Univision would have a of the company. Mr. Hobson and Mr. Bd. 1988); Thornell Barnes v. Illinois Bell case on point. Wortsman’s share holdings were reported Telephone Co., 1 FCC 2d 1247, 1274 (Rev. Univision’s letter has little to say about its because, at the time, they were members of Bd. 1965). Univision’s failure to produce plan to retain the exclusive right to make Entravision’s board of directors. Entravision’s evidence permits the Commission to include national sales on behalf Entravision. Section DEF 14A does not require it to report shares that Univision’s interest in Entravision is 73.658(i) prohibits a television network from held by Univision insiders unless their attributable as a matter of law. representing individual stations, affiliated individual holdings exceed 5% of the Univision does not meet the FCC’s bright- with the network, for the sale of non-network outstanding shares. Thus, in addition to Mr. line EDP test. Even if Univision could time. In the 1970s, Univision’s predecessor Hobson and Mr. Wortsman, it is quite demonstrate that its interest in Entravision is entity argued that, as fledgling network, a possible that other Univision officers and below the 33% debt/equity threshold, its waiver of this rule was required to enhance directors hold Entravision shares. There may relationship with Entravision is such that it the development of Spanish language also be other Entravision debts owed to would still be able to continue to exert television.6 Univision’s letter merely states Univision that are not reported in SEC significant influence over key licensee that Telemundo was given the ‘‘exact same filings. Had an independent audit been deicsions. As the Commission has said: waiver.’’ Here again the situation is quite conducted, an honest and complete answer ‘‘In adopting the EDP rule, we affirm our different. In Telemundo II, there was no issue could have been provided.’’ tentative conclusion * * * that there is the concerning Telemundo’s inappropriate For the Commission to make a bright-line potential for certain substantial investors or exercise of control over its affiliates. In this determination concerning compliance with creditors to exert significant influence over case, the central question is, will Univision’s the EPD rule, it must know the percentage of key licensee decisions, even through they do exclusive right to make national sales on equity and debt a party holds. In this case, not hold a direct voting interest * * * which behalf of Entravision give Univision the right the commission knows that Entravision has may undermine the diversity of voices we to influence Entravision’s core operations, outstanding debts owed to Univision. What seek to promote. They may, through their especially its radio station holdings? the Commission does not know, is the contractual rights and their ongoing right to Univision’s letter cites, with approval, the amount and percentage of Entravision’s debt communicate freely with the licensee, exert Commission’s statement, ‘‘[t]he mass media owed to Univision. Also unknown, is how as much, if not more, influence or control attribution rules seek to identify those many shares of Entravision’s stock are held over some corporate decisions as voting interests in or relationships to licensees that by Univision’s officers and directors. See, equity holders whose interests are confer on their holders a degree of influence Section 73.3555, note 2. Here again Univision attributable.4’’ or control such that the holders have a

1 Univision Opposition to Petition to Deny, at p. 4 Review of the Commission’s Regulations 5 Telemundo Communications, Group, Inc., 17 11. Governing Attribution of Broadcast and Cable/MDS FCC Rcd 6958 (2002). Telemundo II). 2 FCC letter dated November 29, 2002. Interests, Report and Order, 14 FCC Red 12559, 6 Amendment of § 73.658(i) of the commission’s 3 Univision letter dated December 9, 2003. 12582–3 (1999) (‘‘Attribution Order’’). Rules, 5 FCC Rcd 7280 (1990).

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realistic potential to affect the programming Commissioner Michael J. Copps, adjustment assistance under Title II, decisions of licensees or other core operating Commissioner Kevin J. Martin, Chapter 2, of the Act. The investigations functions.’’ 7 The FCC, while granting a Commissioner Jonathan S. Adelstein, will further relate, as appropriate, to the waiver of the national spot sales rule to David Brown, Esquire (Media Bureau, determination of the date on which total Univision and Telemundo, maintained the FCC), Barbara Kreisman, Esquire (Video rule for other, non-Spanish language Division, Media Bureau, FCC), Lawrence or partial separations began or television networks. The FCC reasoned that N. Cohn, Esquire, (Counsel for The threatened to begin and the subdivision without the rule networks would be able to Shareholders of Hispanic Broadcasting of the firm involved. exert undue influence over affiliate Corp.), Scott R. Flick, Esquire (Counsel for The petitioners or any other persons programming decisions. The right to sell Univision Communications, Inc.), Harry F. showing a substantial interest in the Cole, Esquire (Counsel to Elgin FM Limited national spot advertising gives Univision subject matter of the investigations may significant rights to influence Entravision, Partnership) request a public hearing, provided such including, as the Commission has stated, the [FR Doc. 03–28791 Filed 11–20–03; 8:45 am] power to influence programming decisions. request is filed in writing with the At a minimum, the FCC should forbid BILLING CODE 4410–11–M Director, Division of Trade Adjustment Univision from making national spot sales on Assistance, at the address shown below, behalf of Entravision, if the proposed merger not later than December 8, 2003. is approved. DEPARTMENT OF LABOR Interested persons are invited to Converting Univision’s voting shares in Entravision into non-voting shares will not Employment and Training submit written comments regarding the fundamentally change the existing Administration subject matter of the investigations to relationship. Entravision has been and will the Director, Division of Trade continue to be dependent on Univision for it Investigations Regarding Certifications Adjustment Assistance, at the address continued survival. Univision, through its of Eligibility To Apply for Worker shown below, not later than December control of national sales and it absolute right Adjustment Assistance 8, 2003. to grant or deny new network affiliations, will be able to control financial decisions, Petitions have been filed with the The petitions filed in this case are programming and personnel at Entravision Secretary of Labor under section 221(a) available for inspection at the Office of owned radio stations, thus ensuring that of the Trade Act of 1974 (‘‘the Act’’) and the Director, Division of Trade Entravision’s radio stations will not compete are identified in the Appendix to this Adjustment Assistance, Employment with HBC’s radio stations. Such influence notice. Upon receipt of these petitions, and Training Administration, U.S. will diminish diversity and stifle Department of Labor, Room C–5311, 200 competition, two key aspects of the FCC local the Director of the Division of Trade Adjustment Assistance, Employment Constitution Avenue, NW., Washington, ownership rules. DC 20210. Sincerely, and Training Administration, has Arthur, Belendiuk instituted investigations pursuant to Signed at Washington, DC, this 17th day of Counsel to National Hispanic Policy section 221(a) of the Act. November 2003. Institute, Inc. The purpose of each of the Timothy Sullivan, cc: Chairman Michael K. Powell, investigations is to determine whether Director, Division of Trade Adjustment Commissioner Kathleen Q. Abemathy, the workers are eligible to apply for Assistance.

APPENDIX [Petitions instituted between 11/03/2003 and 11/07/2003]

Date of institu- Date of peti- TA–W Subject firm (petitioners) Location tion tion

53,405 ...... Authentic Fitness Corp. (Wkrs) ...... Los Angeles, CA ...... 11/03/2003 10/16/2003 53,406 ...... F/V Patricia Diann (Comp) ...... Cordova, AK ...... 11/03/2003 10/13/2003 53,407 ...... Alice Manufacturing (Wkrs) ...... Easley, SC ...... 11/03/2003 10/28/2003 53,408 ...... Elastic Corp. of America (Comp) ...... Woolwine, VA ...... 11/03/2003 10/21/2003 53,409 ...... Delta International Machinery (Comp) ...... Tupelo, MS ...... 11/03/2003 10/11/2003 53,410 ...... Nidec America Corporation (MA) ...... Canton, MA ...... 11/03/2003 10/28/2003 53,411 ...... Cognati Industries (GMP) ...... Bluffton, IN ...... 11/03/2003 10/08/2003 53,412 ...... Fort Payne Socks, Inc. (Comp) ...... Fort Payne, AL ...... 11/03/2003 10/29/2003 53,413 ...... MTD Southwest, Inc. (Comp) ...... Chandler, AZ ...... 11/03/2003 10/31/2003 53,414 ...... DuPont Photomasks, Inc. (Wkrs) ...... Danbury, CT ...... 11/03/2003 10/31/2003 53,415 ...... Elementis Chromium LP (Wkrs) ...... Corpus Christi, TX ...... 11/03/2003 05/02/2003 53,416 ...... Wolverine Pattern and Machine (IAM) ...... Saginaw, MI ...... 11/03/2003 10/31/2003 53,417 ...... National Pattern, Inc. (IAM) ...... Saginaw, MI ...... 11/03/2003 10/31/2003 53,418 ...... Springfield LLC (Comp) ...... Gaffney, SC ...... 11/03/2003 10/27/2003 53,419 ...... Encee Inc. (Wkrs) ...... Eden, NC ...... 11/03/2003 10/24/2003 53,420 ...... Surgical Specialties Corp. (Wkrs) ...... Ada, OK ...... 11/04/2003 11/04/2003 53,421 ...... Seamless Textiles (PR) ...... Humacao, PR ...... 11/04/2003 10/10/2003 53,422 ...... United Airlines (Wkrs) ...... Elk Grove, IL ...... 11/04/2003 11/03/2003 53,423 ...... Drexel Heritage Furniture Industries (Wkrs) ... Hildebran, NC ...... 11/04/2003 10/24/2003 53,424 ...... Clore Automotive (MN) ...... Eden Prairie, MN ...... 11/04/2003 10/30/2003 53,425 ...... Trane and American Standards Co’s (MN) .... White Bear Lake, MN ...... 11/04/2003 10/30/2003 53,426 ...... Neutronics, Inc. (Comp) ...... Phoenix, AZ ...... 11/04/2003 10/27/2003 53,427 ...... Puzzle-Craft (MN) ...... Wabasso, MN ...... 11/04/2003 10/28/2003 53,428 ...... Hawkeye Group (Wkrs) ...... Mediapolis, IA ...... 11/04/2003 10/23/2003 53,429 ...... R. Leon Williams Lumber Co. (ME) ...... Clifton, ME ...... 11/04/2003 10/23/2003

7 Univision, June 25, 2003 letter citing the Attribution Order at p. 12560, (emphasis added.

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