Federal Communications Commission Record FCC 88·407

4 FCC Red No.4 Federal Communications Commission Record FCC 88·407 SUMMARY 98 Before the Federal Communications Commission FINAL REGULATORY FLEXIBILITY ANALYSIS Washington, D.C. 20554 PAPERWORK REDUCTION ACT STATEMENT MM Docket No. 87·7 APPENDIX In the Matter of INTRODUCTION 1. By this action. the Commission is relaxing its pro Amendment of Section 73.3555 hibition against the common ownership of radio and tele~ of the Commission's Rules, the vision stations in the same television market, which is Broadcast Multiple Ownership Rules contained in Section 73.3555(b) of the Commission's Rules 1 (also known as the "one-to-a-marketll or "radio television cross-ownership II rule). Although we are ~etain SECOND REPORT AND ORDER ing the rule, we are adopting a waiver policy under which we will look with favor upon certain waiver,.... requests Adopted: December 12, 1988; Released: February 23, 1989 when the criteria specified herein are met. First, we will tend to look favorab.ly upon waiver applications involving By the Commission: Commissioner Dennis dissenting radio and television station c;ombinations in the top 25 in part and concurring in part with statement at later television markets where there will be· at least 30 sepa date. rately owned. operated and controlled broadcast licensees or "voices" after the proposed merger. Second, we will also look favorably upon requests involving "failed" sta TABLE OF CONTENTS tions that have not been operated for a substantial period of time or that are involved in bankruptcy proceedings. Subject Paragraph We will consider other waiver applications on a more rigorous case-by-case, basis which will place particular INTRODUCTION I emphasis on the potential benefits of the combination, the types of facilities ,involved, the number of stations already BACKGROUND 5 owned by the applicant, the financial difficulties of the station(s), and the nature of the market in light of our DISCUSSION 7 diversity and competition concerns. In the context of a waiver of the radio-TV cross-ownership rule. we will not PART ONE - POLICY CONCERNS UNDERLYING grant any application if the proposed combination would THE LOCAL OWNERSHIP RULES 8 result in anyone entity holding an attributable interest in more than one AM and one FM radio station within any single television "metro" market, as defined by Arbitron I. Viewpoint Diversity and Economic Ratings Company. This limitation is not intended to pre Competition Concerns 9 clude the acquisition of stations when no waiver is re quire,d. A. Availability of Media Outlets II 2. Our decision to establish this new waiver policy is B: Viewpoint Diversity 15 based on our experience in implementing the one-to C. Economic Competition 25 a-market rule, the substantial growth in the number of media outlets in markets of all sizes since the rule was II. Benefits from Joint Ownership of ""'- adopted, and data submitted by commenters concerning the benefits of joint station ownership. We conclude that Stations in the Same Market 38 the public interest would best be served by facilitating waivers of the rule under certain circumstances. particu A. Efficiency Benefits 39 larly for combinations located in markets with many com B. Programming Benefits 54 peting voices or involving "failed" stations. We believe C. Other Service Benefits '64 that this modest new policy sufficiently meets the needs of the present while permitting us over time to assess the PART TWO -- MODIFICATION OF THE RADIO-TV -'general ramifications of mOdifying the rule. Furthermore, this incremental appro3:ch best serves the public interest CROSS-OWNERSHIP RULE 69 and best achieves our continuing goals of encouraging diversity and competition because it takes into account I. Top 25 Markets and Failed Station the fact that at some point the benefits of allowing com Waiver Standards 75 bined station operations may outweigh the costs of relax ing such ownership restriction"s with respect to our A. "Top 25 Marketsl30 Voices" Standard 76 traditional diversity and competition goals. B. "Failed Station" Standard 86 3. The NOIiee of Proposed Rule .Waking in this proceed -'. ing (Noliee), 2 released on February 20. \987. set forth II. Case-by-Case Review . 90 several rather narrow .proposals for relaxing two local ownership rules. The first proposal. to modify the radio 1741 fCC 88·407 Federal Communications Commission Record 4 FCC Red No.4 I'duopoly" rule to allow a greater degree of overlap be activation'of an unused TV allocation and/or would result tween station- contours. was recently adopted in the First in a first ·or second TV station in a community or mar Report and Order in this proceeding. ] Specifically, we ket' relaxed the radio ·'duopolyl1 cute to a principal-city con 6. Based on our experience in implementing this rule tour standard (the 5 mV/m standard for AM stations and and the record in this proceeding, we have decided to 3.16 mV/m standard for FM stations). Second. the Notice liberalize the cross-ownership prohibition to a modest proposed relaxing the radio-TV cross-ownership rule to degree by adopting a policy regarding waivers of the rule allow the common ownership of certain radio-TV COm- on a case-by-case basis for proposed radio-TV combina· binations. tions if certain specified factors are met. This relaxed 4. As we stated in the First Report and Order. more than standard is discLlssed in more detail in Part Two, i"nfra. fifty parties filed comments and reply comments in re sponse to the Notice. Although four commenters opposed the proposed modifications to the radio-TV -cross-owner DISCUSSION ship rule,4 the overwhelming majority of commenters 7. Our discussion is divided into two parts. In Part One provided strong support for relaxing the rule. In fact, we will address the basic policy c'oncerns underlying; the many commenters supported complete elimination of radio-TV cross-ownership rule. Specifically, we. will dis both rules, despite the fact that such an approach was not cuss the substantial growth in local media markets and among the options set forth in the Notice. Having care the effects that this growth has had on economic competi fully reviewed all of these comments, which are summa tion and viewpoint diversity throughout different sized rized in Part One, we find that the current radio-TV local markets. We will also consider the 'costs and benefits cross-ownership rule should be· relaxed to a limited de of mOdifying the radio-TV cross-ownership rule, in~luding gree. However, we have decided not to pursue our origi three important types of benefits resulting from the group nal proposal to eliminate the rule partially for all or most ownership dfstations on a lodd level -... economic efficien AM radio-TV combinations. Instead, we are adopting a cies and cost savings resulting therefrom. service benefits new, more relaxed case-by-case waiver policy for all po to the public, and programming benefits.. In Part Two we tential radio-TV combinations under which we' will look will apply these general considerations to the radio-TV favorably upon waiver requests that meet either of two cross-ownership ,rule to determine whether we should standards set forth below and review all other applications adopt a new policy for waivers of the rule on a case based on the public interest criteria specified herein. This by-case basis. decision reflects our desire to act cautiously to weigh the benefits and costs of proposed mergers and to continue to obtain evidence concerning the ramifications of modifying PART ONE •• POLICY CONCERNS this long-standing rule. UNpERLYING THE LocAL OWNERSHIP RULES 8. In view,;oLthe record in this proceeding and the overwhelming support of the comments received, we con BACKGROUND clude that the, prohibition against commoil ownership of 5. Six years after tne fixed overlap standard of the radio and TV stations in the saine market should .be "duopolyll rule was adopted in 1964, the Commission liberalized by the adoption of a new waiver policy. We promulgated its "one-to-a-market" or radio-TV cross-.own believe that this action reflects the substantial growth and s ership rule. In essence, the rule prohibits a party from availability of media outlets in local markets, as well as owning a commercial radio station (or an AM-FM com the significant efficiencies and public service benefits tha,t bination) and a commercial television station in the same can be obtained from joint ownership. This approach market. The rule accomplishes this goal by prohibiting sufficiently meets the needs of the present while the common ownership of radio and TV stations if the 2 permitting us to take a second look to ensure that any mVIm groundwave contour of an AM station or the 1 further modification or elimination of t-his rule is fully mV/m contour of an FM station encompasses the entire warranted. The following section discusses our specific community of license of a television station, or, con findings" in this proceeding in light of our traditional versely, if the Grade A contour of a television station diversity and competition concerns. including the costs of encompasses the entire community of license of an AM this approach, and the subsequent section describes the or FM station. However, in order to foster the develop substantial benefits resulting from joint station ownership. ment of UHF television, the Commission also created an exception to the rule under which proposed combinations of radio and UHF television stations in any given market I. Viewpoint Diversity and would be considered on a case-by-case basis to determine Economic Competition Concerns whether common ownership of such stations would be in 6 9.

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