[Federal Register Volume 59, Number 185 (Monday, September 26, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-23659]
[[Page Unknown]]
[Federal Register: September 26, 1994]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 73
[MM Docket No. 91-140; DA 94-1013]
Revision of Radio Rules and Policies
agency: Federal Communications Commission.
action: Final rule; correction of rule and confirmation of effective
date.
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summary: This Order confirms that the stay of certain changes to the
FCC's multiple ownership rule was lifted on September 16, 1992, and
reprints the corrected rule in its entirety. The Mass Media Bureau
takes this action to ensure that the correct version of the rule is
printed in the Code of Federal Regulations. Because the stay was lifted
in an ordering clause to a Commission document but not in the Federal
Register summary associated with that document, the lifting of the stay
was not recognized by the Federal Register. As a result, the rule is
currently printed in the Code of Federal Regulations as if the stay was
still in effect. This Order is intended solely to correct the outdated
version of the multiple ownership rule; no substantive rule changes
have been made.
effective date: September 26, 1994.
for further information contact: Jane Hinckley Halprin, Mass Media
Bureau, Policy and Rules Division, (202) 632-7792.
SUPPLEMENTARY INFORMATION:
Order
Adopted: September 15, 1994
Released: September 19, 1994
In the Matter of: Revision of Radio Rules and Policies.
By the Acting Chief, Mass Media Bureau:
1. In its Report and Order in MM Docket No. 91-140, 7 FCC Rcd 2755
(1992), 57 FR 18089 (April 29, 1992), the Commission amended 47 CFR
73.3555. The effective date of the changes adopted in the Report and
Order was subsequently deferred pending resolution of petitions for
reconsideration. Order Deferring Effective Date in MM Docket No. 91-
140, FCC 92-351 (released July 30, 1992), 57 FR 35763 (Aug. 11, 1992).
The stay of the effective date was lifted by Memorandum Opinion and
Order in MM Docket No. 91-140, 7 FCC Rcd 6387 (1992), 57 FR 42701
(September 16, 1992). Because the stay was lifted in an ordering clause
to the document rather than in the Appendix that contained the modified
rules, the lifting of the stay was not picked up by the Federal
Register. As a result, the rule is currently printed in the Code of
Federal Regulations as if the stay was still in effect.
2. This Order is intended solely to correct the outdated version of
Section 73.3555 currently printed in the Code of Federal Regulations.
No substantive changes have been made to the rules; notice and comment
are therefore unnecessary. See 5 U.S.C. 553(b)(3). The correct version
of Sec. 73.3555 is printed in its entirety below.
3. Accordingly, it is ordered that 47 CFR Sec. 73.3555 is amended
as set forth below.
List of Subjects in 47 CFR Part 73
Radio broadcasting.
Federal Communications Commission.
Renee Licht,
Acting Chief, Mass Media Bureau.
Rule Changes
Part 73 of Title 47 of the U.S. Code of Federal Regulations is
amended to read as follows:
PART 73--RADIO BROADCAST SERVICES
1. The Authority Citation for Part 73 continues to read as follows:
Authority: 47 U.S.C. 154, 303, 334.
2. The stay of the effective date of Sec. 73.3555 was lifted by
publication of a Memorandum Opinion and Order in MM Docket No. 91-140
in the Federal Register at 57 FR 42701 (September 16, 1992), and
Sec. 73.3555 is revised to read as follows:
Sec. 73.3555 Multiple ownership.
(a)(1) Radio contour overlap rule. No license for an AM or FM
broadcasting station shall be granted to any party (including all
parties under common control) if the grant of such license will result
in overlap of the principal community contour of that station and the
principal community contour of any other broadcasting station directly
or indirectly owned, operated, or controlled by the same party, except
that such license may be granted in connection with a transfer or
assignment from an existing party with such interests, or in the
following circumstances:
(i) In radio markets with 14 or fewer commercial radio stations, a
party may own up to 3 commercial radio stations, no more than 2 of
which are in the same service (AM or FM), provided that the owned
stations, if other than a single AM and FM station combination,
represent less than 50 percent of the stations in the market.
(ii) In radio markets with 15 or more commercial radio stations, a
party may own up to 2 AM and 2 FM commercial stations, provided,
however, that evidence that grant of any application will result in a
combined audience share exceeding 25 percent will be considered prima
facie inconsistent with the public interest.
Note to paragraph (a)(1)(ii): When evaluating audience share
evidence submitted under Sec. 73.3555(a)(1)(ii), the Commission will
consider data that eliminates statistical anomalies, provides a
better focused survey area or includes revenue data or other
relevant information. Where applicants certify that they do not have
readily available audience share data, they may substitute other
information that can serve as a proxy for such data. See Memorandum
Opinion and Order in MM Docket No. 91-140, 7 FCC Rcd 6387 (1992), 57
FR 42701 (Sept. 16, 1992).
(iii) Overlap between two stations in different services is
permissible if neither of those two stations overlaps a third station
in the same service.
(2)(i) Where the principal community contours of two radio stations
overlap and a party (including all parties under common control) with
an attributable ownership interest in one such station brokers more
than 15 percent of the broadcast time per week of the other such
station, that party shall be treated as if it has an interest in the
brokered station subject to the limitations set forth in paragraphs (a)
and (e) of this section. This limitation shall apply regardless of the
source of the brokered programming supplied by the party to the
brokered station.
(ii) Every time brokerage agreement of the type described in
paragraph (a)(2)(i) of this section shall be undertaken only pursuant
to a signed written agreement that shall contain a certification by the
licensee or permittee of the brokered station verifying that it
maintains ultimate control over the station's facilities, including
specifically control over station finances, personnel and programming,
and by the brokering station that the agreement complies with the
provisions of paragraphs (a)(1) and (e)(1) of this section.
(iii) Any party operating in conflict with the requirements of
paragraph (a)(2)(ii) of this section on September 16, 1992 shall come
into compliance within one year thereafter.
(3) For purposes of this paragraph:
(i) The ``principal community contour'' for AM stations is the
predicted or measured 5 mV/m groundwave contour computed in accordance
with Sec. 73.183 or Sec. 73.186 and for FM stations is the predicted
3.16 mV/m contour computed in accordance with Sec. 73.313.
(ii) The number of stations in a radio market is the number of
commercial stations whose principal community contours overlap, in
whole or in part, with the principal community contours of the stations
in question (i.e., the station for which an authorization is sought and
any station in the same service that would be commonly owned whose
principal community contour overlaps the principal community contour of
that station). In addition, if the area of overlap between the stations
in question is overlapped by the principal community contour of a
commonly owned station or stations in a different service (AM or FM),
the number of stations in the market includes stations whose principal
community contours overlap the principal community contours of such
commonly owned station or stations in a different service.
(iii) A station's ``audience share'' is the average number of
persons age 12 or older on an average quarter hour basis, Monday-
Sunday, 6 a.m.-midnight, who listen to the station, expressed as a
percentage of the average number of persons listening to AM and FM
stations in that radio metro market or a recognized equivalent, in
which a majority of the overlap between the stations in question takes
place. The ``combined audience share'' is the total audience share of
all AM or FM stations that would be under common ownership or control
following a proposed acquisition. In situations where no metro market
or recognized equivalent exists, the relevant audience share data are
the data for all counties that are within the principal community
contours of the stations in question, in whole or in part.
(iv) ``Time brokerage'' is the sale by a licensee of discrete
blocks of time to a ``broker'' that supplies the programming to fill
that time and sells the commercial spot announcements in it.
(b) Television contour overlap (duopoly) rule. No license for a TV
broadcast station shall be granted to any party (including all parties
under common control) if the grant of such license will result in
overlap of the Grade B contour of that station (computed in accordance
with Sec. 73.684) and the Grade B contour of any other TV broadcast
station directly or indirectly owned, operated, or controlled by the
same party.
(c) One-to-a-market ownership rule. No license for an AM, FM or TV
broadcast station shall be granted to any party (including all parties
under common control) if such party directly or indirectly owns,
operates or controls one or more such broadcast stations and the grant
of such license will result in:
(1) The predicted or measured 2 mV/m groundwave contour of an
existing or proposed AM station, computed in accordance with
Sec. 73.183 or Sec. 73.186, encompassing the entire community of
license of an existing or proposed TV broadcast station(s), or the
Grade A contour(s) of the TV broadcast station(s), computed in
accordance with Sec. 73.684, encompassing the entire community of
license of the AM station; or
(2) The predicted 1 mV/m contour of an existing or proposed FM
station, computed in accordance with Sec. 73.313, encompassing the
entire community of license of an existing or proposed TV broadcast
station(s), or the Grade A contour(s) of the TV broadcast station(s),
computed in accordance with Sec. 73.684, encompassing the entire
community of license of the FM station.
(d) Daily newspaper cross-ownership rule. No license for an AM, FM
or TV broadcast station shall be granted to any party (including all
parties under common control) if such party directly or indirectly
owns, operates or controls a daily newspaper and the grant of such
license will result in:
(1) The predicted or measured 2 mV/m contour of an AM station,
computed in accordance with Sec. 73.183 or Sec. 73.186, encompassing
the entire community in which such newspaper is published; or
(2) The predicted 1 mV/m contour for an FM station, computed in
accordance with Sec. 73.313, encompassing the entire community in which
such newspaper is published; or
(3) The Grade A contour of a TV station, computed in accordance
with Sec. 73.684, encompassing the entire community in which such
newspaper is published.
(e)(1) National multiple ownership rule. No license for a
commercial AM, FM or TV broadcast station shall be granted, transferred
or assigned to any party (including all parties under common control)
if the grant, transfer or assignment of such license would result in
such party or any of its stockholders, partners, members, officers or
directors, directly or indirectly, owning, operating or controlling, or
having a cognizable interest in:
(i) More than 18 AM or more than 18 FM stations, or more than 20 AM
or more than 20 FM stations two years after the effective date of this
rule, provided, however, that an entity may have an attributable but
noncontrolling interest in an additional 3 AM and 3 FM stations that
are small business controlled or minority-controlled;
(ii) More than 14 television stations; or
(iii) More than 12 television stations that are not minority-
controlled.
(2) No license for a commercial TV broadcast station shall be
granted, transferred or assigned to any party (including all parties
under common control) if the grant, transfer or assignment of such
license would result in such party or any of its stockholders,
partners, members, officers or directors, directly or indirectly,
owning, operating or controlling, or having a cognizable interest in,
either:
(i) TV stations which have an aggregate national audience reach
exceeding thirty (30) percent, or
(ii) TV stations which have an aggregate national audience reach
exceeding twenty-five (25) percent and which are not minority-
controlled.
(3) For purposes of this paragraph:
(i) National audience reach means the total number of television
households in the Arbitron Area of Dominant Influence (ADI) markets in
which the relevant stations are located divided by the total national
television households as measured by ADI data at the time of a grant,
transfer or assignment of a license. For purposes of making this
calculation, UHF television stations shall be attributed with 50
percent of the television households in their ADI market. Where the
relevant application forms require a showing with respect to audience
reach and the application relates to an area where Arbitron ADI market
data are unavailable, then the applicant shall make a showing as to the
number of television households in its market. Upon such a showing, the
Commission shall make a determination as to the appropriate audience
reach to be attributed to the applicant.
(ii) TV broadcast station or TV station excludes stations which are
primarily satellite operations.
(iii) Minority-controlled means more than 50 percent owned by one
or more members of a minority group.
(iv) Minority means Black, Hispanic, American Indian, Alaska
Native, Asian and Pacific Islander.
(v) Small business means an individual or business entity which, at
the time of application to the Commission, had, including all
affiliated entities under common control, annual revenues of less than
$500,000 and assets of less than $1,000,000.
(f) This section is not applicable to noncommercial educational FM
and noncommercial educational TV stations.
Note 1: The word ``control'' as used herein is not limited to
majority stock ownership, but includes actual working control in
whatever manner exercised.
Note 2: In applying the provisions of this section, ownership
and other interests in broadcast licensees, cable television systems
and daily newspapers will be attributed to their holders and deemed
cognizable pursuant to the following criteria:
(a) Except as otherwise provided herein, partnership and direct
ownership interests and any voting stock interest amounting to 5% or
more of the outstanding voting stock of a corporate broadcast
licensee, cable television system or daily newspaper will be
cognizable;
(b) No minority voting stock interest will be cognizable if
there is a single holder of more than 50% of the outstanding voting
stock of the corporate broadcast licensee, cable television system
or daily newspaper in which the minority interest is held;
(c) Investment companies, as defined in 15 U.S.C. 80a-3,
insurance companies and banks holding stock through their trust
departments in trust accounts will be considered to have a
cognizable interest only if they hold 10% or more of the outstanding
voting stock of a corporate broadcast licensee, cable television
system or daily newspaper, or if any of the officers or directors of
the broadcast licensee, cable television system or daily newspaper
are representatives of the investment company, insurance company or
bank concerned. Holdings by a bank or insurance company will be
aggregated if the bank or insurance company has any right to
determine how the stock will be voted. Holdings by investment
companies will be aggregated if under common management.
(d) Attribution of ownership interests in a broadcast licensee,
cable television system or daily newspaper that are held indirectly
by any party through one or more intervening corporations will be
determined by successive multiplication of the ownership percentages
for each link in the vertical ownership chain and application of the
relevant attribution benchmark to the resulting product, except that
wherever the ownership percentage for any link in the chain exceeds
50%, it shall not be included for purposes of this multiplication.
[For example, if A owns 10% of company X, which owns 60% of company
Y, which owns 25% of ``Licensee,'' then X's interest in ``Licensee''
would be 25% (the same as Y's interest since X's interest in Y
exceeds 50%), and A's interest in ``Licensee'' would be 2.5%
(0.1 x 0.25). Under the 5% attribution benchmark, X's interest in
``Licensee'' would be cognizable, while A's interest would not be
cognizable.]
(e) Voting stock interests held in trust shall be attributed to
any person who holds or shares the power to vote such stock, to any
person who has the sole power to sell such stock, and to any person
who has the right to revoke the trust at will or to replace the
trustee at will. If the trustee has a familial, personal or extra-
trust business relationship to the grantor or the beneficiary, the
grantor or beneficiary, as appropriate, will be attributed with the
stock interests held in trust. An otherwise qualified trust will be
ineffective to insulate the grantor or beneficiary from attribution
with the trust's assets unless all voting stock interests held by
the grantor or beneficiary in the relevant broadcast licensee, cable
television system or daily newspaper are subject to said trust.
(f) Holders of non-voting stock shall not be attributed an
interest in the issuing entity. Holders of debt and instruments such
as warrants, convertible debentures, options or other non-voting
interests with rights of conversion to voting interests shall not be
attributed unless and until conversion is effected.
(g)(1) A limited partnership interest shall be attributed to a
limited partner unless that partner is not materially involved,
directly or indirectly, in the management or operation of the media-
related activities of the partnership and the licensee or system so
certifies.
(2) In order for a licensee or system to make the certification
set forth in paragraph (g)(1) of this section, it must verify that
the partnership agreement or certificate of limited partnership,
with respect to the particular limited partner exempt from
attribution, establishes that the exempt limited partner has no
material involvement, directly or indirectly, in the management or
operation of the media activities of the partnership. The criteria
which would assume adequate insulation for purposes of this
certification are described in the Memorandum Opinion and Order in
MM Docket No. 83-46, FCC 85-252 (released June 24, 1985), as
modified on reconsideration in the Memorandum Opinion and Order in
MM Docket No. 83-46, FCC 86-410 (released November 28, 1986).
Irrespective of the terms of the certificate of limited partnership
or partnership agreement, however, no such certification shall be
made if the individual or entity making the certification has actual
knowledge of any material involvement of the limited partners in the
management or operation of the media-related businesses of the
partnership.
(h) Officers and directors of a broadcast licensee, cable
television system or daily newspaper are considered to have a
cognizable interest in the entity with which they are so associated.
If any such entity engages in businesses in addition to its primary
business of broadcasting, cable television service or newspaper
publication, it may request the Commission to waive attribution for
any officer or director whose duties and responsibilities are wholly
unrelated to its primary business. The officers and directors of a
parent company of a broadcast licensee, cable television system or
daily newspaper, with an attributable interest in any such
subsidiary entity, shall be deemed to have a cognizable interest in
the subsidiary unless the duties and responsibilities of the officer
or director involved are wholly unrelated to the broadcast licensee,
cable television system or daily newspaper subsidiary, and a
statement properly documenting this fact is submitted to the
Commission. [This statement may be included on the appropriate
Ownership Report.] The officers and directors of a sister
corporation of a broadcast licensee, cable television system or
daily newspaper shall not be attributed with ownership of these
entities by virtue of such status.
(i) Discrete ownership interests will be aggregated in
determining whether or not an interest is cognizable under this
section. An individual or entity will be deemed to have a cognizable
investment if:
(1) The sum of the interests held by or through ``passive
investors'' is equal to or exceeds 10 percent; or
(2) The sum of the interests other than those held by or through
``passive investors'' is equal to or exceeds 5 percent; or
(3) The sum of the interests computed under paragraph (i)(1) of
this section plus the sum of the interests computed under paragraph
(i)(2) of this section is equal to or exceeds 10 percent.
Note 3: In cases where record and beneficial ownership of voting
stock is not identical (e.g., bank nominees holding stock as record
owners for the benefit of mutual funds, brokerage houses holding
stock in street names for the benefit of customers, investment
advisors holding stock in their own names for the benefit of
clients, and insurance companies holding stock), the party having
the right to determine how the stock will be voted will be
considered to own it for purposes of these rules.
Note 4: Paragraphs (a) through (e) of this section will not be
applied so as to require divestiture, by any licensee, of existing
facilities, and will not apply to applications for increased power
for Class C stations, to applications for assignment of license or
transfer of control filed in accordance with Sec. 73.3540(f) or
Sec. 73.3541(b), or to applications for assignment of license or
transfer of control to heirs or legatees by will or intestacy if no
new or increased overlap would be created between commonly owned,
operated or controlled broadcast stations in the same service and if
no new encompassment of Communities proscribed in paragraphs (c) and
(d) of this section as to commonly owned, operated or controlled
broadcast stations or daily newspaper would result. Said paragraphs
will apply to all applications for new stations, to all other
applications for assignment or transfer, and to all applications for
major changes in existing stations except major changes that will
result in overlap of contours of broadcast stations in the same
service with each other no greater than already existing. (The
resulting areas of overlap of contours of such broadcast stations
with each other in such major change cases may consist partly or
entirely of new terrain. However, if the population in the resulting
areas substantially exceeds that in the previously existing overlap
areas, the Commission will not grant the application if it finds
that to do so would be against the public interest, convenience or
necessity.) Commonly owned, operated or controlled broadcast
stations with overlapping contours or with community-encompassing
contours prohibited by this section may not be assigned or
transferred to a single person, group or entity, except as provided
above in this note and by Sec. 73.3555(a). If a commonly owned,
operated or controlled broadcast station and daily newspaper fall
within the encompassing proscription of this section, the station
may not be assigned to a single person, group or entity if the
newspaper is being simultaneously sold to such single person, group
or entity.
Note 5: Paragraphs (a) through (e) of this section will not be
applied to cases involving television stations that are
``satellite'' operations. Such cases will be considered in
accordance with the analysis set forth in the Report and Order in MM
Docket No. 87-8, FCC 91-182( released July 8, 1991), in order to
determine whether common ownership, operation, or control of the
stations in question would be in the public interest. An authorized
and operating ``satellite'' television station, the Grade B contour
of which overlaps that of a commonly owned, operated, or controlled
``non-satellite'' parent television broadcast station, or the Grade
A contour of which completely encompasses the community of
publication of a commonly owned, operated, or controlled daily
newspaper, or the community of license of a commonly owned,
operated, or controlled AM or FM broadcast station, or the community
of license of which is completely encompassed by the 2 mV/m contour
of such AM broadcast station or the 1 mV/m contour of such FM
broadcast station, may subsequently become a ``non-satellite''
station under the circumstances described in the aforementioned
Report and Order in MM Docket No. 87-8. However, such commonly
owned, operated, or controlled ``non-satellite'' television stations
and AM or FM stations with the aforementioned community
encompassment, may not be transferred or assigned to a single
person, group, or entity except as provided in Note 4 of this
section. Nor shall any application for assignment or transfer
concerning such ``non-satellite'' stations be granted if the
assignment or transfer would be to the same person, group or entity
to which the commonly owned, operated, or controlled newspaper is
proposed to be transferred, except as provided in Note 4 of this
section.
Note 6: For the purposes of this section a daily newspaper is
one which is published four or more days per week, which is in the
English language and which is circulated generally in the community
of publication. A college newspaper is not considered as being
circulated generally.
Note 7: The Commission will entertain requests to waive the
restrictions of paragraph (c) of this section on a case-by-case
basis. The Commission will look favorably upon waiver applications
that meet either of the following two standards:
(1) Those involving radio and television station combinations in
the top 25 television markets where there will be at least 30
separately owned, operated and controlled broadcast licensees after
the proposed combination, as determined by counting television
licensees in the relevant ADI television market and radio licensees
in the relevant television metropolitan market;
(2) Those involving ``failed'' broadcast stations that have not
been operated for a substantial period of time, e.g., four months,
or that are involved in bankruptcy proceedings. For the purposes of
determining the top 25 ADI television markets, the relevant ADI
television market, and the relevant television metropolitan market
for each prospective combination, we will use the most recent
Arbitron Ratings Television ADI Market Guide. We will determine that
number of radio stations in the relevant television metropolitan
market and the number of television licensees within the relevant
ADI television market based on the most recent Commission ownership
records.
Other waiver requests will be evaluated on a more rigorous case-
by-case basis, as set forth in the Second Report and Order in MM
Docket No. 87-7, FCC 88-407, released February 23, 1989, and
Memorandum Opinion and Order in MM Docket No. 87-7, FCC 89-256,
released August 4, 1989.
Note 8: Paragraph (a)(1) of this section will not apply to an
application for an AM station license in the 535-1605 kHz band where
grant of such application will result in the overlap of 5 mV/m
groundwave contours of the proposed station and that of another AM
station in the 535-1605 kHz band that is commonly owned, operated or
controlled if the applicant shows that a significant reduction in
interference to adjacent or co-channel stations would accompany such
common ownership. Such AM overlap cases will be considered on a
case-by-case basis to determine whether common ownership, operation
or control of the stations in question would be in the public
interest. Applicants in such cases must submit a contingent
application of the major or minor facilities change needed to
achieve the interference reduction along with the application which
seeks to create the 5 mV/m overlap situation.
Note 9: Paragraph (a)(1) of this section will not apply to an
application for an AM station license in the 1605-1705 kHz band
where grant of such application will result in the overlap of the 5
mV/m groundwave contours of the proposed station and that of another
AM station in the 535-1605 kHz band that is commonly owned, operated
or controlled. Paragraphs (d)(1)(i) and (d)(1)(ii) of this section
will not apply to an application for an AM station license in the
1605-1705 kHz band by an entity that owns, operates, controls or has
a cognizable interest in AM radio stations in the 535-1605 kHz band.
Note 10: Authority for joint ownership granted pursuant to Note
9 will expire at 3 a.m. local time on the fifth anniversary for the
date of issuance of a construction permit for an AM radio station in
the 1605-1705 kHz band.
[FR Doc. 94-23659 Filed 9-23-94; 8:45 am]
BILLING CODE 6712-01-M
