[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 This Order is intended solely to correct the outdated 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