96-26313. Waiver of the Newspaper/Broadcast Cross-Ownership Restriction  

  • [Federal Register Volume 61, Number 200 (Tuesday, October 15, 1996)]
    [Proposed Rules]
    [Pages 53694-53698]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 96-26313]
    
    
    =======================================================================
    -----------------------------------------------------------------------
    
    FEDERAL COMMUNICATIONS COMMISSION
    
    47 CFR Ch. I
    
    [MM Docket No. 96-197; FCC 96-381]
    
    
    Waiver of the Newspaper/Broadcast Cross-Ownership Restriction
    
    AGENCY: Federal Communications Commission.
    
    ACTION: Notice of inquiry.
    
    -----------------------------------------------------------------------
    
    SUMMARY: The Commission seeks comment on the adoption of a new policy 
    under which it will consider requests for waiver of the newspaper/
    broadcast cross-ownership restriction with respect to proposed 
    newspaper/radio combinations. The intended effect is to provide more 
    clarity and certainty to Commission policy with respect to such 
    combinations.
    
    DATES: Comments are due by December 9, 1996, and reply comments are due 
    by January 8, 1997.
    
    ADDRESSES: Federal Communications Commission, 1919 M Street, N.W., 
    Washington, D.C. 20554.
    
    FOR FURTHER INFORMATION CONTACT: Roger Holberg, Mass Media Bureau, 
    Policy and Rules Division (202) 418-2134.
    
    SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
    Notice of Inquiry in MM Docket No. 96-197, FCC 96-381, adopted May 9, 
    1996, and released May 20, 1996. The complete text of this NOI is 
    available for inspection and copying during normal business hours in 
    the FCC Reference Center (Room 239), 1919 M Street, N.W., Washington, 
    D.C., and also may be purchased from the Commission's copy contractor, 
    International Transcription Service, (202) 857-3800, 2100 M Street, 
    N.W., Suite 140, Washington, DC 20037.
    
    Synopsis of Notice of Inquiry
    
        1. Introduction. In 1975, the Commission adopted its rule (47 CFR 
    73.3555(d)) prohibiting the common ownership of commercial broadcast 
    stations and newspapers in the same community.1 Although 
    divestiture of existing local newspaper/broadcast combinations was not 
    required except in ``egregious'' cases, the Commission did intend the 
    rule to prevent the creation of new combinations, including those 
    created by the sale of a ``grandfathered'' newspaper-broadcast 
    combination to the same party.2
    ---------------------------------------------------------------------------
    
        \1\ Multiple Ownership of Standard, FM, and Television Broadcast 
    Stations, Second Report and Order, 40 FR 6449, 50 FCC 2d 1046 (1975) 
    (``Second Report and Order''), recon., 40 FR 24729, 53 FCC 2d 589 
    (1975) (``Recon. Order''), aff'd sub nom. Federal Communications 
    Commission v. National Citizens Committee for Broadcasting, 436 U.S. 
    775 (1978). The provisions of 47 CFR 73.3555 do not apply to 
    noncommercial educational FM and TV stations. See 47 CFR 73.3555(f).
        \2\ Second Report and Order, supra at 1076.
    ---------------------------------------------------------------------------
    
        2. Like all of our multiple ownership rules, the newspaper/
    broadcast cross-ownership rule rests on the twin goals of promoting 
    diversity of viewpoint and economic competition.3 Of these two 
    goals, the Commission made it clear when adopting the rule that 
    fostering diverse viewpoints from antagonistic sources is at the heart 
    of its licensing responsibility. It determined that, as a general rule, 
    granting a broadcast license to an entity in the same community as that 
    in which the entity also publishes a newspaper would harm local 
    diversity.4 The Commission nonetheless noted its expectation that 
    there could be meritorious waiver requests.5 Accordingly, it set 
    forth the
    
    [[Page 53695]]
    
    grounds that it would consider pertinent to such requests. First, the 
    Commission stated that inability to sell the station would constitute a 
    basis for a waiver.6 Refusal to grant a waiver under such 
    conditions would work a forfeiture, a result contrary to the 
    Commission's intent. Second, the Commission stated that it would waive 
    the rule upon a showing that the only sale possible would be at an 
    artificially depressed price.7 Third, the Commission contemplated 
    waiving the rule if it could be shown that the separate ownership and 
    operation of the newspaper and the broadcast station could not be 
    supported in the locality.8 Finally, the Commission indicated that 
    it would waive the rule if it could be shown, for whatever reason, that 
    the purposes of the rule would be disserved by its application.9 
    In this regard, the Commission stated that while it would consider the 
    specifics of any particular situation, it would not relitigate in the 
    guise of a waiver request issues that it had previously considered and 
    rejected in adopting the rule. The Supreme Court in upholding the rule 
    specifically noted the availability of waivers of the rule, 
    particularly where the station and newspaper could not survive under 
    separate ownership, as underscoring the reasonableness of the 
    rule.10
    ---------------------------------------------------------------------------
    
        \3\ Id. at 1074.
        \4\ Id. at 1075.
        \5\ Although the waiver standards were discussed in the Second 
    Report and Order, supra, in conjunction with the ``egregious'' cases 
    in which divestiture was required, they are the standards that have 
    subsequently been applied in virtually all newspaper/broadcast 
    cross-ownership waiver cases.
        \6\ Id. at 1085.
        \7\ Id. at 1084; see also Hopkins Hall Broadcasting, Inc., 10 
    FCC Rcd 9764 (1995)
        \8\ Second Report and Order, supra at 1085.
        \9\ Id.
        \10\ FCC v. National Citizens Committee for Broadcasting, supra 
    at 802 n. 20.
    ---------------------------------------------------------------------------
    
        3. The Commission has stated that ``the broadcast-newspaper cross-
    ownership rule will be waived only in cases where application of the 
    rule would be `unduly' harsh.'' 11 Moreover, requests for 
    permanent waiver of the rule have a ``considerably heavier'' burden 
    than do requests for its temporary waiver.12 The Commission has 
    granted only two permanent newspaper/broadcast waivers. Both involved 
    television stations. In Field Communications Corp., 65 FCC 2d 959 
    (1977), Field Communications Corp. (``Field'') published two daily 
    newspapers in Chicago. As a result of the proposed transaction, a 
    subsidiary of Field would reacquire ownership of a Chicago television 
    station in which Field had previously sold a majority interest to the 
    instant assignor. The only other permanent waiver of the newspaper/
    broadcast cross-ownership rule involved the reacquisition of the New 
    York Post newspaper by NYP Acquisition Corp., a subsidiary of The News 
    Corporation Limited (``News Corp.''). In granting the waiver, the 
    Commission relied on ``special circumstances,'' considered in tandem 
    with an evaluation of the diversity and competitiveness of the New York 
    market.13
    ---------------------------------------------------------------------------
    
        \11\ NewCity Communications of Massachusetts, Inc., 10 FCC Rcd 
    4985, 4986 n. 8 (1995). (In NewCity we dismissed the applicant's 
    application on other grounds and did not reach the issue of whether 
    to grant a waiver of the newspaper/broadcast cross-ownership 
    restriction.) See also Second Report and Order, supra at 1077.
        \12\ News America Publishing Inc. v. FCC, 844 F.2d 800, 803 
    (D.C. Cir. 1988); see also Hopkins Hall Broadcasting, supra at 9764; 
    Capital Cities/ABC, Inc., 11 FCC Rcd 5841 (1996). See also, Owosso 
    Broadcasting Co. (Stay Request), 60 RR 2d 99 (1986) (grant of 
    temporary waiver in which to divest in ``egregious'' case).
        \13\  Fox Television Stations Inc., 8 FCC Rcd 5341, 5349 (1993); 
    aff'd sub nom. Metropolitan Council of NAACP Branches v. FCC, 46 
    F.3d 1154 (D.C. Cir. 1995).
    ---------------------------------------------------------------------------
    
        4. For several years Congress precluded the Commission from 
    spending authorized funds ``to repeal, retroactively apply changes in, 
    or to begin or continue a reexamination of the rules and the policies 
    established to administer'' the newspaper/broadcast cross-ownership 
    restriction.14 In the Commission's 1994 appropriation, however, 
    Congress provided that the Commission could ``amend policies with 
    respect to waivers'' of the broadcast-newspaper cross-ownership 
    rule.15 In the legislative history of the 1994 Appropriations Act, 
    Congress clarified its intent and set forth guidelines for Commission 
    consideration of waiver requests involving daily newspapers and radio 
    stations. The legislative history of that Act indicates a congressional 
    intent that such ``new policy allow such waivers to be granted only in 
    the top 25 markets [with] at least 30 [remaining] independent broadcast 
    voices'' provided that the Commission make ``a separate affirmative 
    determination that [the transaction] is otherwise in the public 
    interest, based upon the applicants' showing that there are specified 
    benefits to the service provided to the public sufficient to offset the 
    reduction in diversity which would result from the waiver.'' 16
    ---------------------------------------------------------------------------
    
        \14\  See, e.g., Department of Justice and Related Agencies, 
    Appropriations Act, 1993, Pub. L. 102-395, 106 Stat. 1828 (1992). 
    These appropriations restrictions were continued in effect through 
    subsequent appropriations legislation and continuing resolutions 
    that funded the agency until April 26, 1996, when a budget was 
    enacted. See Departments of Commerce, State, Justice, the Judiciary 
    and Related Agencies for FY '96, Pub. L. 104-134, 110 Stat. 1321. 
    The restriction on repealing, retroactively applying or reexamining 
    the newspaper/broadcast cross-ownership rule is no longer contained 
    in this Agency's appropriation legislation.
        \15\ 107 Stat. 1167 (1993).
        \16\ Id. at 2-3.
    ---------------------------------------------------------------------------
    
        5. The legislative history also indicates that Congress intended 
    the Commission to examine, on a case-by-case basis, requests for 
    waivers in other circumstances upon a showing of ``unique public 
    benefits.'' 17 As we noted in Capital Cities/ABC, Inc., supra, 
    this was not a directive requiring the Commission to grant waivers in 
    such ``top 25/30 voice'' situations or otherwise to modify our waiver 
    policy.18 Instead, it reflected congressional intent that, if we 
    modified our waiver policy for newspaper/radio combinations, we (1) 
    require a showing that the proposed combination met the ``top 25/30 
    voice'' standard, and (2) make ``a separate affirmative determination'' 
    in each case that ``the specified benefits'' to the public would offset 
    ``the reduction in diversity.'' This second element suggests that 
    Congress did not intend that the Commission routinely grant waiver 
    requests because the first element is established but, instead, that we 
    require a showing of specific public interest benefits flowing from a 
    waiver. In any event, the ``top 25/30 voice'' language was not included 
    by Congress in either the text of our 1995 or 1996 appropriations acts 
    or their accompanying conference reports, and the proscription against 
    spending funds to reevaluate policies related to the rule has been 
    eliminated.19 Subsequently, on February 8, 1996, President Clinton 
    signed into law the Telecommunications Act of 1996, omnibus legislation 
    which, inter alia, removed national radio station ownership caps but 
    imposed a legislative ceiling on the number of stations that could be 
    commonly owned in a local market. The Telecommunications Act of 1996 
    addresses other cross-ownership issues, and the legislative history of 
    that Act reveals that the House of Representatives explicitly 
    considered and rejected changes to the newspaper/broadcast cross 
    ownership rules.20 Thus, while the Commission now clearly has the 
    authority to reevaluate its waiver policy for newspaper-broadcast 
    combinations it is without specific
    
    [[Page 53696]]
    
    guidance on whether or how that authority should be exercised.
    ---------------------------------------------------------------------------
    
        \17\ Id. at 3.
        \18\ Capital Cities/ABC, Inc., supra at 5889.
        \19\ See Department of Justice and Related Agencies, 
    Appropriations Act, 1995 Pub. L. No. 103-317, 108 Stat. 1724, 1737-
    38 (1994); H. Rep. 103-708, filed August 16, 1994; see also 
    Departments of Commerce, State, Justice, the Judiciary and Related 
    Agencies for FY '96, Pub. L. No. 104-134, 110 Stat. 1321; H. Rep. 
    104-537, filed April 25, 1996.
        \20\ 141 Cong. Rec. E-1571 (August 1, 1995).
    ---------------------------------------------------------------------------
    
    Discussion
    
        6. We are issuing this NOI in order to solicit comment on what, if 
    any, changes we should make in our newspaper/broadcast cross-ownership 
    waiver policy with respect to newspaper/radio combinations. Since 1975 
    when the newspaper/broadcast cross-ownership rule was adopted, the 
    number of radio stations licensed has increased from 8,265 21 to 
    12,076,22 a 46 percent increase. Meanwhile, since the rule's 
    adoption the number of English language daily newspapers has shrunk 
    from 1,756 23 to approximately 1,556,24 an 11 percent drop. 
    However, during that same period, radio ownership limitations have been 
    amended from allowing common ownership of only a single AM and single 
    FM radio station in the same market to the current regulatory regime in 
    which, depending on the number of voices in a market, as many as eight 
    radio stations (no more than five of which may be in the same service) 
    may be commonly owned. This allows far more concentration of radio 
    ownership on the local level than was available when the newspaper/
    broadcast cross-ownership restrictions were adopted. Nevertheless, 
    there may be markets in which allowing waiver of the cross-ownership 
    restriction would be healthy for the maintenance of diversity. This 
    could occur, for example, in markets where a newspaper is failing and 
    the only prospective purchaser is the owner of a local radio station. 
    There may also be cases where cross-ownership, while not necessary to 
    the viability of one or both outlets, could lead to benefits such as 
    increased dissemination of news and information in the relevant local 
    market and have only a negligible effect on ownership diversity and 
    competition.25 On the other hand, we recognize the powerful market 
    presence that many newspapers have in their local markets and we ask 
    for comment concerning whether this distinguishes newspaper/radio 
    cross-ownership from other cross-ownership situations.
    ---------------------------------------------------------------------------
    
        \21\ Broadcasting and Cable Yearbook--1995 at B-655.
        \22\ See FCC News Release, ``Broadcast Station Totals as of May 
    31, 1996,'' (June 6, 1996).
        \23\ Information Please Almanac - 1980, Simon and Schuster, 643 
    (1979). (Source: Editor and Publisher Yearbook, 1979.)
        \24\ Information Please Almanac - 1995, Houghton Mifflin 
    Company, 315 (1995). (Source: Editor and Publisher International 
    Yearbook, 1994.) This figure is as of February 1, 1994.
        \25\ For a more complete discussion of the Commission's 
    diversity concerns, new approaches to diversity and other diversity 
    related issues, see Further Notice of Proposed Rule Making in MM 
    Docket Nos. 91-221 and 87-8, 60 FR 6490, 10 FCC Rcd 3524, 3546-59 
    (1995).
    ---------------------------------------------------------------------------
    
        7. Therefore, we are soliciting comment on what changes, if any, 
    may be desirable in our waiver policy with respect to newspaper/radio 
    cross-ownership situations and whether we should adopt objective 
    criteria for evaluating waiver requests. For example, should we adopt a 
    waiver policy in which a transaction is in the public interest if it is 
    in a market of specified numerical rank or larger and a specified 
    number of independently owned voices would remain? Alternatively, 
    should a waiver test turn on whether a specified minimum number of 
    voices remains after the transaction without reference to market rank? 
    Should such a waiver test only apply where the applicant owns no more 
    than, for instance, a single station in each broadcast service in the 
    community? What public interest benefits might be sufficient to 
    overcome any detrimental effects from a reduction in diversity of 
    voices? 26
    ---------------------------------------------------------------------------
    
        \26\ A market rank/independent voice test would be similar to 
    one of the tests contained in Section 73.3555, Note 7, of our Rules 
    for favorable Commission consideration of one-to-a-market rule 
    waivers. In one-to-a-market waiver cases, the Commission ``looks 
    favorably'' upon waiver applications (1) in top 25 markets where 
    there will remain 30 independent voices after grant of the waiver, 
    or (2) where a failing station is involved. The Commission also will 
    consider on a case-by-case basis waiver requests founded on other 
    grounds. In Section 202(d) of the Telecommunications Act of 1996 
    Congress instructed the Commission to replace the ``top 25 markets'' 
    provision of the waiver standard with a ``top 50 markets'' standard, 
    ``consistent with the public interest, convenience, and necessity.'' 
    Should we consider a ``top 50 market/30 voice'' waiver standard for 
    combinations of no more than one FM, one AM, and a newspaper as 
    well?
    ---------------------------------------------------------------------------
    
        8. If we adopt an objective test based on number of voices and 
    market size, a number of questions arise. One general set of questions 
    concerns what other media outlets in the local market we should 
    consider in computing the number of independent voices, and how we 
    should assess those outlets in evaluating waiver requests. For purposes 
    of a newspaper/radio cross-ownership waiver standard, if we adopt an 
    objective test for favorable waiver consideration, should we count both 
    radio and television voices and, if so, should we count them equally? 
    We have previously determined that a television station is, relatively 
    speaking, more a source of news than is a radio station. In adopting 
    the rule at issue, we stated, ``[r]ealistically, a radio station cannot 
    be considered the equal of either the paper or the television station 
    in any sense, least of all in terms of being a source for news or for 
    being the medium turned to for discussion of matters of local 
    concern.'' 27 Does this lead to the conclusion that they should be 
    counted differently in assessing the number of independent voices that 
    would remain after a waiver? Should we give equal consideration to 
    waiver requests irrespective of the strength of the particular media 
    outlets involved or should we, for example, give different 
    consideration to requests depending on whether the newspaper involved 
    is a major paper or the radio station involved has a certain level of 
    market penetration, has a certain level of authorized power, or is of a 
    particular class of station? Should we favor newspaper/radio 
    combinations only if the proposed purchaser would hold no more than a 
    specified number of radio stations in the market after the transaction 
    and a specified minimum level of independent voices remains?
    ---------------------------------------------------------------------------
    
        \27\ Second Report and Order, supra at 1083.
    ---------------------------------------------------------------------------
    
        9. Two separate but related matters concern which radio stations to 
    count in assessing the number of independent voices and whether to 
    count non-broadcast media. When we count the number of radio stations 
    in a radio market for purposes of the radio duopoly rule, we count only 
    commercial radio stations. For purposes of the one-to-a-market waiver 
    standard we count both commercial and noncommercial radio and 
    television stations. Should we count both commercial and noncommercial 
    stations when determining the number of independent voices for purposes 
    of newspaper/radio cross-ownership waivers? Are there other media that 
    should also be included in calculating the number of independent voices 
    that would remain after the waiver? For example, should we also count 
    other independently owned daily newspapers published in the radio 
    station's community if our determination that they are more a source of 
    discussion concerning local issues than are radio stations remains 
    valid? 28 Should we count the presence of cable or other video 
    delivery services? At first blush, we do not believe that most such 
    non-broadcast video services should be counted in any waiver standard 
    because the newspaper/radio rule is particularly bound up with issues 
    of local diversity, and many alternative video delivery services do not 
    provide programming on local issues. However, there are some cable 
    systems that carry local cable news channels. Additionally, many cable 
    systems have public, educational and governmental access channels which 
    cover local government and local schools and serve as forums for the
    
    [[Page 53697]]
    
    discussion of issues of local concern. Should the presence of such a 
    channel on a local cable system count as an independent voice? 29
    ---------------------------------------------------------------------------
    
        \28\ Id.
        \29\ We have previously tentatively concluded in our television 
    ownership proceeding (MM Docket No. 91-221) that we would consider 
    cable systems as contributing to diversity under some circumstances, 
    and to some extent, and invited comment. Further Notice of Proposed 
    Rule Making in MM Docket Nos. 91-221 and 87-8, 10 FCC Rcd 3524, 3556 
    (1995). We concluded that other video suppliers could not be 
    included because they are neither as ubiquitous as cable nor do they 
    have the capability for local origination that cable has. Id. at 
    3557. Finally, we tentatively concluded that neither a radio station 
    nor a newspaper were the equivalent of a broadcast television 
    station for diversity purposes and are not fungible for diversity 
    purposes on a ``one-for-one'' basis. Id. at 3557-58.
    ---------------------------------------------------------------------------
    
        10. Another set of questions concerns to what local markets any 
    waiver should apply, and whether or not we should redefine how we 
    measure the appropriate geographic scope of the market. Is there some 
    standard other than a top 25 markets/30 voices, or top 50 markets/30 
    voices formulations for the rank of the market or number of voices that 
    should be used? Indeed, should we consider market rank at all or, 
    instead, simply rely on the number of independent voices that would 
    remain after the waiver.
        11. We also seek comment on defining the geographic market for 
    purposes of assessing diversity and competition in waiving the rule. 
    Under our existing cases, the geographic area to be considered in 
    evaluating a radio/newspaper cross-ownership waiver is the area of 
    overlap between the defining signal contour of the radio station (1 mV/
    m for FM and 2 mV/m for AM) and the area of significant circulation of 
    the newspaper. In Capital Cities/ABC, Inc., supra, we rejected Disney's 
    argument that we consider all stations licensed to the Detroit DMA to 
    determine whether Disney could commonly own a Detroit station and a 
    newspaper published in Pontiac. Should this standard continue to guide 
    our consideration of waiver requests involving newspaper/radio cross-
    ownership and, if so, should it be revised in any way? Should the 
    Commission take into account the possibility that even major outlets 
    serving a metropolitan market may underserve suburban communities in 
    the metro region, leaving smaller newspapers and broadcast outlets 
    concentrating on the suburbs as the only outlets of any consequence for 
    the suburban resident? In this regard, we seek comment on the extent to 
    which metropolitan outlets concentrate on big city issues and elections 
    with little, if any, coverage of suburban issues and candidates. It 
    could be argued that common ownership of a radio station and a 
    newspaper expressly focused on the urban centers could have much 
    greater impact on viewpoint diversity than a simple count of voices 
    might suggest. Should those major metropolitan media outlets be counted 
    in the same way as voices located in and serving the neighboring market 
    where the overlap is of the neighboring market?
        Alternatively, should different criteria be developed? If so, what 
    criteria should be used? There are a number of definitions of the 
    geographic ``market'' that the Commission has utilized in various 
    contexts. Our one-to-a-market waiver standard considers ``television 
    licensees in the relevant ADI television market and radio licensees in 
    the relevant television metropolitan market.'' 30 While this 
    provision may be appropriate in the one-to-a-market context, in which 
    television stations are involved, is it also usable in the radio/
    newspaper context, where ownership of television stations is not 
    involved? We note in this regard that television stations do appear to 
    compete with newspapers in the adverstising market and do function as a 
    significant source of news and information.
    ---------------------------------------------------------------------------
    
        \30\  Section 73.3555 Note 7(1) of the Commission's Rules.
    ---------------------------------------------------------------------------
    
        13. In implementing provisions of the Telecommunications Act of 
    1996,31 we noted that we would continue to define the relevant 
    radio market for purposes of the radio contour overlap rules ``as the 
    area encompassed by the principal community contours (i.e., predicted 
    or measured 5 mV/m for AM stations and predicted 3.16 mV/m for FM 
    stations) of the mutually overlapping stations proposing to have common 
    ownership.'' 32 Does this market definition provide useful 
    guidance for evaulating requests for waiver of the radio/newspaper 
    cross-ownership rule?
    ---------------------------------------------------------------------------
    
        \31\ Pub. L. 104-104, 110 Stat. 56 (1996).
        \32\ Order, Implementation of Sections 202(a) and 202(b)(1) of 
    the Telecommunications Act of 1996, FCC 96-90, 61 F.R. 10689 
    (released March 8, 1996) at para 4. (Footnotes omitted.) See also 47 
    C.F.R. Sec. 73.3555(a)(3)(ii).
    ---------------------------------------------------------------------------
    
        14. Finally, we request comments on whether the radio metro market, 
    as designated by a nationally recognized ratings service, may be a 
    viable alternative. In this regard, we ask commenters to address the 
    question of whether broadcast outlets licensed to other communities in 
    the radio metro market can be counted on to provide programming on 
    local issues in the station's community of license or the newspaper's 
    community of publication or area of circulation?
        15. Resolving how to define the boundaries of the relevant market 
    does not entirely resolve the issue. Should we count stations as being 
    in the relevant market only if they completely encompass the market 
    with a certain quality signal contour; or should media outlets be 
    counted as voices in the relevant market if a certain quality signal 
    contour overlaps any portion of the relevant market? If the latter, 
    should we establish a certain portion of the relevant market, either in 
    terms of area or population, that they must overlap in order to counted 
    as voices in that market? What level of overlapping signal contour 
    would be the appropriate measure in order to capture accurately those 
    media outlets that should be counted in assessing the diversity and 
    competition effects of waiving the newspaper/radio cross-ownership rule 
    in a local market?
        16. Are there other objective criteria besides the number of 
    independent voices and market size that we should specify that should 
    warrant a waiver, such as saving a failing station or newspaper, 
    reacquisition of a media property by a former owner so that the waiver 
    would not truly be creating a new combination in the market, etc.? In 
    situations meeting whatever objective criteria we may adopt should we 
    also require a showing of special circumstances? What salient factors 
    should the Commission weigh in determining whether the specific public 
    benefits flowing from the proposed radio/newspaper combination overcome 
    the reduction in diversity of voices? Should applicants seeking a 
    waiver of the newspaper/radio cross-ownership rule be required to 
    demonstrate that diversity will not be diminished, and the public 
    interest will be served, by grant of the waiver? For example, to 
    address the issues potentially raised in suburban communities, should 
    the parties involved be required to describe specific plans or efforts 
    to enhance coverage of events in a smaller community within the 
    metropolitan region? How can we properly evaluate whether the proposed 
    acquisition will serve the people in such neighboring municipalities 
    and whether it will increase content diversity in such places? We seek 
    comment on these issues.
        17. Finally, as we indicated above, the newspaper/radio cross-
    ownership rule stands on another foundation in addition to diversity, 
    that of competition. As we stated in the Second Report and Order, 
    ``Daily newspapers tend to be much larger enterprises than television 
    stations. Radio stations are
    
    [[Page 53698]]
    
    significantly smaller than either.'' 33 Accordingly, any move 
    toward loosening the waiver requirements in this context must also be 
    assessed in terms of competition. A waiver that might be acceptable in 
    terms of its impact upon diversity might create such market power in a 
    single entity that it would not be tolerable in terms of competition. 
    In this regard, we note that in 1995, local newspapers captured 49% of 
    local advertising expenditures (20.1% of all advertising) as against a 
    total of 13.3% of local advertising (5.5% of all advertising) captured 
    by radio stations.34 And the 49% share is usually captured by a 
    single newspaper while the 13.3% radio share is typically divided among 
    a number of radio stations. In considering newspaper/radio waiver 
    requests, should we consider from a competition standpoint the size of 
    the newspaper involved? That is, should we view a proposed newspaper/
    radio combination differently if it involves a large major daily 
    newspaper rather than a small, but not failing, local daily? If so, 
    what test should we use to measure the size or competitive power of the 
    newspaper involved in a waiver request? Should we require information 
    on the percentage of local advertising dollars that the newspaper 
    commands? Alternatively, should we look at the percentage of such 
    dollars that would be commanded by the proposed newspaper/radio 
    combination? 35 How should we determine whether the proposed 
    newspaper/radio combination will possess market power? If we establish 
    a test based on the proportion of local advertising dollars that the 
    proposed combination would command, should we establish an objective, 
    bright line benchmark and, if so, what should that level be? What other 
    objective test might we use to determine whether a proposed local 
    newspaper/radio combination would possess such market power that our 
    competition concerns would be undermined by grant of a waiver? Will 
    entry barriers for prospective radio broadcasters or newspaper owners 
    be increased by relaxation of our waiver policy? What impact, if any, 
    should the size of the media outlets involved also have on our 
    diversity analysis?
    ---------------------------------------------------------------------------
    
        \33\ Second Report and Order, supra at 1057.
        \34\ McCann-Ericson, U.S. Advertising Volume, Advertising Age 
    (May 20, 1996).
        \35\ Given the present ability of an entity or individual to 
    obtain attributable ownership interests in up to eight radio 
    stations in a single market (depending on the number of stations in 
    the market) a different case might be presented by a situation in 
    which the licensee of several stations in a market purchases, or is 
    purchased by, a major daily newspaper in that market than would be 
    presented if a single station/newspaper combination was proposed.
    ---------------------------------------------------------------------------
    
    Administrative Matters
    
        I. Pursuant to applicable procedures set forth in Sections 1.415 
    and 1.419 of the Commission's Rules, 47 CFR 1.415 and 1.419, interested 
    parties may file comments on or before December 9, 1996, and reply 
    comments on or before January 8, 1997. To file formally in this 
    proceeding, you must file an original plus six copies of all comments, 
    reply comments, and supporting comments. If you want each Commissioner 
    to receive a personal copy of your comments, you must file an original 
    plus eleven copies. You should send comments and reply comments to 
    Office of the Secretary, Federal Communications Commission, 1919 M 
    Street, N.W., Washington, D.C. 20554. Comments and reply comments will 
    be available for public inspection during regular business hours in the 
    FCC Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C. 
    20554.
        II. This is a non-restricted notice and comment rulemaking 
    proceeding. Ex parte presentations are permitted, except during the 
    Sunshine Agenda period, provided they are disclosed as provided in the 
    Commission Rules. See generally 47 CFR 1.1202, 1.1203, and 1.1206(a).
    
    Ordering Clause
    
        III. Accordingly, it is ordered that pursuant to the authority 
    contained in Sections 4 and 303 of the Communications Act of 1934, as 
    amended, 47 U.S.C. Sections 154 and 303, this Notice of Inquiry is 
    adopted.
    
    Federal Communications Commission.
    William F. Caton,
    Acting Secretary.
    [FR Doc. 96-26313 Filed 10-11-96; 8:45 am]
    BILLING CODE 6712-01-P
    
    
    

Document Information

Published:
10/15/1996
Department:
Federal Communications Commission
Entry Type:
Proposed Rule
Action:
Notice of inquiry.
Document Number:
96-26313
Dates:
Comments are due by December 9, 1996, and reply comments are due by January 8, 1997.
Pages:
53694-53698 (5 pages)
Docket Numbers:
MM Docket No. 96-197, FCC 96-381
PDF File:
96-26313.pdf
CFR: (1)
47 CFR None