[Federal Register Volume 62, Number 64 (Thursday, April 3, 1997)]
[Notices]
[Pages 15929-15938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8460]


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DEPARTMENT OF JUSTICE

Proposed Final Judgment and Competitive Impact Statement; United 
States of America versus EZ Communications, Inc. and Evergreen Media 
Corporation

    Notice is hereby given pursuant to the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec. 16(b)-(h), that a proposed Final 
Judgment, Stipulation, and

[[Page 15930]]

Competitive Impact Statement have been filed with the United States 
District Court for the District of Columbia in United States v. EZ 
Communications, Inc. and Evergreen Media Corporation Civ. Action No. 97 
CV 406. The proposed Final Judgment is subject to approval by the Court 
after the expiration of the statutory 60-day public comment period and 
compliance with the Antitrust Procedures and Penalties Act, 15 U.S.C. 
Sec. 16(b)-(h).
    Plaintiff filed a civil antitrust Complaint on February 27, 1997, 
alleging that a proposed swap and acquisition of radio stations in 
Charlotte, North Carolina between EZ Communications, Inc. (``EZ'') and 
Evergreen Media Corporation (``Evergreen'') would violate Section 7 of 
the Clayton Act, 15 U.S.C. Sec. 18. The Complaint alleges that EZ and 
Evergreen both own and operate numerous radio stations throughout the 
United States, and that they each own and operate radio stations in the 
Charlotte, North Carolina metropolitan area. The combined transactions 
would give EZ a significant share of the radio advertising market in 
the Charlotte metropolitan area. As a result, the combination of these 
stations would lessen competition substantially in the sale of radio 
advertising time in the Charlotte metropolitan area.
    The prayer for relief seeks: (a) An adjudication that the proposed 
transactions described in the Complaint would violate Section 7 of the 
Clayton Act; (b) preliminary and permanent injunctive relief preventing 
the consummation of such transactions; (c) an award to the United 
States of the costs of this action; and (d) such other relief as is 
proper.
    Shortly before this suit was filed, a proposed settlement was 
reached that permits EZ to complete its transactions with Evergreen, 
yet preserves competition in the market in which the transactions would 
raise significant competitive concerns. A Stipulation and proposed 
Final Judgment embodying the settlement were filed at the same time the 
Complaint was filed.
    The proposed Final Judgment orders EZ to divest WRFX-FM, currently 
owned by Evergreen. Unless the plaintiff grants a time extension, EZ 
must divest this radio station either within six months after the 
filing of the Complaint or within five (5) business days after notice 
of entry of the Final Judgment, whichever is later. If EZ does not 
divest WRFX-FM within the divestiture period, the Court shall, upon 
plaintiff's application, appoint a trustee to sell the assets. The 
proposed Final Judgment also requires EZ to ensure that, until the 
divestiture mandated by the Final Judgment has been accomplished, WRFX-
FM will be operated independently as a viable, ongoing business, and 
kept separate and apart from defendant EZ's other Charlotte radio 
stations. Further, the proposed Final Judgment requires defendants to 
give plaintiff prior notice regarding future radio station acquisitions 
or certain agreements pertaining to the sale of radio advertising time 
in Charlotte.
    A Competitive Impact Statement filed by the United States describes 
the Complaint, the proposed Final Judgment, and remedies available to 
private litigants.
    Public comment is invited within the statutory 60-day comment 
period. Such comments, and the responses thereto, will be published in 
the Federal Register and filed with the Court. Written comments should 
be directed to Craig W. Conrath, Chief, Merger Task Force, Antitrust 
Division, 1401 H Street, N.W., Suite 4000, Washington, D.C. 20530 
(telephone: (202) 307-0001). Copies of the Complaint, Stipulation, 
proposed final Judgment and Competitive Impact Statement are available 
for inspection in Room 215 of the U.S. Department of Justice, Antitrust 
Division, 325 7th Street, N.W., Washington. D.C. 20530 (telephone: 
(202) 514-2481) and the office of the Clerk of the United States 
District Court for the District of Columbia, 3rd Street and 
Constitution Avenue, N.W., Washington, D.C.
    Copies of any of these materials may be obtained upon request and 
payment of a copying fee.
Constance K. Robinson,
Director of Operation Antitrust Division.

United States District Court For the District of Columbia

    United States of America, Plaintiff, v. EZ Communications, Inc. 
and Evergreen Media Corporation, Defendants. Civil Action No. 
1:97CV00406, Filed 2/27/97, Judge Oberdorfer.

Stipulation and Order

    It is stipulated by and between the undersigned parties, by their 
respective attorneys, as follows:
    (1) The Court has jurisdiction over the subject matter of this 
action and over each of the parties hereto, and venue of this action is 
proper in the United States District Court for the District of 
Columbia.
    (2) The parties stipulate that a Final Judgment in the form hereto 
attached may be filed and entered by the Court, upon the motion of any 
party or upon the Court's own motion, at any time after compliance with 
the requirements of the Antitrust Procedures and Penalties Act (15 
U.S.C. Sec. 16), and without further notice to any party or other 
proceedings, provided that plaintiff has not withdrawn its consent, 
which it may do at any time before the entry of the proposed Final 
Judgment by serving notice thereof on defendants and by filing that 
notice with the Court.
    (3) Defendants shall abide by and comply with the provisions of the 
proposed Final Judgment pending entry of the Final Judgment, or until 
expiration of time for all appeals of any Court ruling declining entry 
of the proposed Final Judgment, and shall, from the date of the signing 
of this Stipulation by the parties, comply with all the terms and 
provisions of the proposed Final Judgment as though the same were in 
full force and effect as an order of the Court.
    (4) Defendants shall not consummate the transaction sought to be 
enjoined by the complaint herein before the Court has signed this 
Stipulation and Order.
    (5) This Stipulation shall apply with equal force and effect to any 
amended proposed Final Judgment agreed upon in writing by the parties 
and submitted to the Court. In the event that, as contemplated by 
defendants, the WRFX-FM Assets are transferred by defendant Evergreen 
Media Corporation (``Evergreen'') to defendant EZ Communications, Inc. 
(``EZ'') or to a trust approved by plaintiff and the FCC prior to the 
entry of the attached Final Judgment, then an amended Complaint and 
proposed Final Judgment which do not name Evergreen as a defendant 
shall promptly be filed herein and submitted to the Court.
    (6) The parties recognize that there could be a delay in obtaining 
approval by or a ruling of a government agency related to either the 
transfer of the WRFX-FM Assets to EZ or to an approved trust, described 
in paragraph (5) above, or the divestiture required by Section IV of 
the Final Judgment, notwithstanding the good faith efforts of 
defendants and any prospective Acquirer, as defined in the Final 
Judgment. In this circumstance, plaintiff will, in the exercise of its 
sole discretion, acting in good faith, give special consideration to 
forbearing from applying for the appointment of a trustee pursuant to 
Section V of the Final Judgment, or from pursuing legal remedies 
available to it as a result of such delay, provided that: (a) 
defendants have entered into a definitive agreement to divest the WRFX-
FM Assets, and such agreement and the Acquirer have been approved by 
plaintiff; (b) all papers necessary to

[[Page 15931]]

secure any governmental approvals and/or rulings to effectuate such 
divestiture (including but not limited to FCC, SEC and IRS approvals or 
rulings) have been filed with the appropriate agency; (c) receipt of 
such approvals are the only closing conditions that have not been 
satisfied or waived; and (d) defendants have demonstrated that neither 
they nor the prospective Acquirer are responsible for any such delay.
    (7) In the event (a) plaintiff withdraws its consent, as provided 
in paragraph 2 above, or (b) the proposed Final Judgment is not entered 
pursuant to this Stipulation, the time has expired for all appeals of 
any Court ruling declining entry of the proposed Final Judgment, and 
the Court has not otherwise ordered continued compliance with the terms 
and provisions of the proposed Final Judgment, then the parties are 
released from all further obligations under this Stipulation, and the 
making of this Stipulation shall be without prejudice to any party in 
this or any other proceeding.
    (8) Defendants represent that the divestiture ordered in the 
proposed Final Judgment can and will be made, and that defendants will 
later raise no claim of hardship or difficulty as grounds for asking 
the Court to modify any of the divestiture provisions contained 
therein.

    Dated: February 26, 1997.

    For Plaintiff United States of America

Dando B. Cellini,
U.S. Department of Justice, Antitrust Division, Merger Task Force, 1401 
H Street, NW., Suite 4000, Washington, DC 20005, (202) 307-0829.

    So Ordered.

----------------------------------------------------------------------
United States District Judge

    For Defendant EZ Communications, Inc.

Ray V. Hartwell, III,
Andrew J. Strenio, Jr.,
Hunton & Williams,
1900 K Street, NW, Washington, DC 20006-1109, (202) 955-1639.

    For Defendant Evergreen Media Corporation.

Bruce J. Prager,
Latham & Watkins,
885 Third Avenue, New York, NY 10022-4802, (212) 906-1272.

Final Judgment

    Whereas, plaintiff, the United States of America, having filed its 
Complaint herein on February 27, 1997, and defendants EZ 
Communications, Inc. (``EZ'') and Evergreen Media Corporation 
(``Evergreen''), by their attorneys, having consented to the entry of 
this Final Judgment without trial or adjudication of any issue of fact 
or law herein, and without this Final Judgment constituting any 
evidence against or an admission by any party with respect to any issue 
of law or fact herein;
    And whereas, defendants have agreed to be bound by the provisions 
of this Final Judgment pending its approval by the Court;
    And whereas, the purpose of this Final Judgment is prompt and 
certain divestiture of certain assets to assure that competition is not 
substantially lessened;
    And whereas, plaintiff requires defendants to make certain 
divestitures for the purpose of remedying the loss of competition 
alleged in the Complaint;
    And whereas, defendants have represented to plaintiff that the 
divestiture ordered herein can and will be made and that defendants 
will later raise no claims of hardship or difficulty as grounds for 
asking the Court to modify any of the divestiture provisions contained 
below;
    Now, therefore, before the taking of any testimony, and without 
trial or adjudication of any issue of fact or law herein, and upon 
consent of the parties hereto, it is hereby ordered, adjudged, and 
decreed as follows:

I. Jurisdiction

    This Court has jurisdiction over each of the parties hereto and 
over the subject matter of this action. The Complaint states a claim 
upon which relief may be granted against defendants EZ and Evergreen, 
as hereinafter defined, under Section 7 of the Clayton Act, as amended 
(15 U.S.C. 18).

II. Definitions

    As used in this Final Judgment:
    A. EZ means defendant EZ Communications, Inc., a Virginia 
corporation with its headquarters in Fairfax, Virginia, and includes 
its successors and assigns (specifically including without limitation 
American Radio Systems Corporation (``ARS''), a Delaware corporation 
headquartered in Boston, Massachusetts, which has agreed to acquire EZ 
through merger), its subsidiaries, and directors, officers, managers, 
agents and employees acting for or on behalf of EZ.
    B. Evergreen means defendant Evergreen Media Corporation, a 
Delaware corporation with its headquarters in Irving, Texas, and 
includes Evergreen's successors and assigns, its subsidiaries, and 
directors, officers, managers, agents and employees acting for or on 
behalf of Evergreen.
    C. WRFX-FM Assets means all of the assets, tangible or intangible, 
used in the operation of the WRFX 99.7 FM radio station in the 
Charlotte Area, including but not limited to all real property (owned 
and leased) used in the operation of that station; all broadcast 
equipment, personal property, inventory, office furniture, fixed assets 
and fixtures, materials, supplies and other tangible property used in 
the operation of that station; all licenses, permits, authorizations 
and applications therefor issued by the Federal Communications 
Commission (``FCC'') and other governmental agencies related to that 
station, all contracts, agreements, leases and commitments of 
defendants pertaining to that station and its operations; all 
trademarks, service marks, trade names, copyrights, patents, slogans, 
programming materials and promotional materials relating to that 
station, and all logos and other records maintained by defendants or 
that station in connection with its business.
    D. Charlotte Area means the Charlotte, North Carolina Metro Survey 
Area as identified by The Arbitron Radio Market Report for Charlotte 
(Fall 1996), which is made up of the following counties: Union, York, 
Cabarrus, Rowan, Mecklenburg, Lincoln and Gaston.
    E. Acquirer means the entity to whom defendants divest the WRFX-FM 
Assets under this Final Judgment.
    F. EZ Radio Station means any radio station owned by EZ and 
licensed to a community in the Charlotte Area, other than WRFX-FM.
    G. Non-EZ Radio Station means any radio station licensed to a 
community in the Charlotte area that is not an EZ Radio Station.

III. Applicability

    A. The provisions of this Final Judgment apply to the defendants, 
their successors and assigns (specifically including without limitation 
ARS), their subsidiaries, affiliates, directors, officers, managers, 
agents and employees, and all other persons in active concert or 
participation with them who shall have received actual notice of this 
Final Judgment by personal service or otherwise, specifically including 
any trustee or trustees appointed by defendants pursuant to an FCC 
License Trust Agreement or an FCC Assets Trust Agreement applicable to 
the WRFX-FM Assets.
    B. The defendants shall require, as a condition of the sale or 
other disposition of all or substantially all of the assets used in 
their business of owning and operating their portfolio of radio 
stations in the Charlotte Area, that the acquiring party or parties 
agree to be bound by the provisions of this Final

[[Page 15932]]

Judgment; provided, however, defendants need not obtain such an 
agreement from an Acquirer in connection with the divestiture of the 
WRFX-FM Assets.

IV. Divestiture of WRFX-FM Assets

    A. Defendant EZ is hereby ordered and directed, in accordance with 
the terms of this Final Judgment, within six (6) months after the 
filing of the compliant in this action, or within five (5) business 
days after notice of entry of this Final Judgment, whichever is later, 
to divest the WRFX-FM Assets to an Acquirer acceptable to plaintiff, in 
its sole discretion. Unless plaintiff otherwise consents in writing, 
the divestiture pursuant to Section IV of this Final Judgment, or by 
the trustee appointed pursuant to Section V, shall include all the 
WRFX-FM Assets and shall be accomplished in such a way as to satisfy 
plaintiff, in its sole discretion, that the WRFX-FM Assets can and will 
be used by an Acquirer as a viable, ongoing commercial radio business. 
The divestiture, whether pursuant to Section IV or V of this Final 
Judgment, shall be made (1) to an Acquirer that, in the sole judgment 
of plaintiff, has the capability and intent of competing effectively, 
and has the managerial, operational and financial capability to compete 
effectively as a radio station operator in the Charlotte Area; and (2) 
pursuant to agreements the terms of which shall not, in the sole 
judgment of plaintiff, interfere with the ability of the Acquirer to 
compete effectively.
    B. Defendant EZ agrees to use its best efforts to divest the WRFX-
FM Assets, and to obtain all regulatory approvals necessary for such 
divestiture, as expeditiously as possible. Plaintiff, in its sole 
discretion, may extend the time period for the divestiture for two (2) 
additional thirty (30)-day periods of time, not to exceed sixty (60) 
calendar days in total.
    C. In accomplishing the divestiture ordered by this Final Judgment, 
defendant EZ promptly shall make known, by usual and customary means, 
the availability of the WRFX-FM Assets. Defendant EZ shall inform any 
person making a bona fide inquiry regarding a possible purchase that 
the sale is being made pursuant to this Final Judgment and provide such 
person with a copy of the Final Judgment. Defendant EZ shall make known 
to any person making an inquiry regarding a possible purchase of the 
WRFX-FM Assets that the assets described in Section II (C) are being 
offered for sale. Defendants also shall offer to furnish to all bona 
fide prospective purchasers, subject to customary confidentiality 
assurances, all information regarding the WRFX-FM Assets customarily 
provided in a due diligence process, except such information that is 
subject to attorney-client privilege or attorney work-product 
privilege. Defendants shall make available such information to 
plaintiff at the same time that such information is made available to 
any other person.
    D. Defendants shall permit bona fide prospective purchasers of the 
WRFX-FM Assets to have access to personnel and to make such inspection 
of the assets, and any and all financial, operational or other 
documents and information, as is customary in a due diligence process.
    E. Defendants shall not interfere with any efforts by any Acquirer 
to employ the general manager or any other employee of WRFX-FM.

V. Appointment of Trustee

    A. In the event that EZ has not divested the WRFX-FM Assets within 
the time period specified in Section IV above, the Court shall appoint, 
on application of plaintiff, a trustee selected by plaintiff to effect 
the divestiture of the assets.
    B. After the trustee's appointment has become effective, only the 
trustee shall have the right to sell the WRFX-FM Assets. The trustee 
shall have the power and authority to accomplish the divestiture at the 
best price than obtainable upon a reasonable effort by the trustee, 
subject to the provisions of Section V and VII of this Final Judgment 
and consistent with FCC regulations, and shall have such other powers 
as the Court shall deem appropriate. Subject to Section V (C) of this 
Final Judgment, the trustee shall have the power and authority to hire 
at the cost and expense of defendant EZ any investment bankers, 
attorneys or other agents reasonably necessary in the judgment of the 
trustee to assist in the divestiture, and such professionals or agents 
shall be solely accountable to the trustee. The trustee shall have the 
power and authority to accomplish the divestiture at the earliest 
possible time to purchaser acceptable to plaintiff in its sole 
judgment, and shall have such other powers as this Court shall deem 
appropriate. EZ shall not object to the sale of the WRFX-FM Assets by 
the trustee on any grounds other than the trustee's malfeasance. Any 
such objection by EZ must be conveyed in writing to plaintiff and the 
trustee no later than fifteen (15) calendar days after the trustee has 
provided the notice required under Section VII of this Final Judgment.
    C. The trustee shall serve at the cost and expense of EZ, on such 
terms and conditions as the Court may prescribe, and shall account for 
all monies derived from the sale of the assets sold by the trustee and 
all costs and expenses so incurred. After approval by the Court of the 
trustee's accounting, including fees for its services and those of any 
professionals and agents retained by the trustee, all remaining monies 
shall be paid to EZ, and the trustee's services shall then be 
terminated The compensation of such trustee and of any professionals 
and agents retained by the trustee shall be reasonable in light of the 
value of the divestiture and based on a fee arrangement providing the 
trustee with an incentive based on the price and terms of the 
divestiture and the speed with which it is accomplished.
    D. Defendants shall take no action to interfere with or impede the 
trustee's accomplishment of the divestiture of the WRFX-FM Assets, and 
shall use their best efforts to assist the trustee in accomplishing the 
required divestiture, including best efforts to effect all necessary 
regulatory approvals. Subject to a customary confidentiality agreement, 
the trustee shall have full and complete access to the personnel, 
books, records and facilities related to the WRFX-FM Assets, and 
defendants shall develop such financial or other information as may be 
necessary for the divestiture of the WRFX-FM Assets. Defendants shall 
permit prospective purchasers of the WRFX-FM Assets to have access to 
personnel and to make such inspection of physical facilities and any 
and all financial, operational or other documents and information as 
may be relevant to the divestiture required by this Final Judgment.
    E. After its appointment becomes effective, the trustee shall file 
monthly reports with defendant EZ, plaintiff and the Court, setting 
forth the trustee's efforts to accomplish divestiture of the WRFX-FM 
Assets as contemplated under this Final Judgment; provided, however, 
that to the extent such reports contain information that the trustee 
deems confidential, such reports shall not be filed in the public 
docket of the Court. Such reports shall include the name, address and 
telephone number of each person who, during the preceding month, made 
an offer to acquire, expressed an interest in acquiring, entered into 
negotiations to acquire, or was contacted or made an inquiry about 
acquiring, any interest in the WRFX-FM Assets, and shall describe in 
detail each contact with any such person during that period. The 
trustee shall maintain full records of all efforts made to divest these 
assets.

[[Page 15933]]

    F. Within six (6) months after its appointment has become 
effective, if the trustee has not accomplished the divestiture required 
by Section IV of this Final Judgment, the trustee shall promptly file 
with the Court a report setting forth (1) the trustee's efforts to 
accomplish the required divestiture, (2) the reasons, in the trustee's 
judgment, why the required divestiture has not been accomplished, and 
(3) the trustee's recommendations; provided, however, that to the 
extent such reports contain information that the trustee deems 
confidential, such reports shall not be filed in the public docket of 
the Court. The trustee shall at the same time furnish such reports to 
plaintiff and defendant EZ, which shall each have the right to be heard 
and to make additional recommendations. The Court shall thereafter 
enter such orders as it shall deem appropriate to accomplish the 
purpose of this Final Judgment, which shall, if necessary, include 
extending the term of the trustee's appointment.

VI. Preservation of Assets/Hold Separate

    Until the divestiture of the WRFX-FM Assets required by Section IV 
of the Final Judgment has been accomplished:
    A. Defendants shall take all steps necessary to operate WRFX-FM as 
a separate, independent, ongoing, economically viable and active 
competitor to defendant EZ's other stations in the Charlotte Area, and 
shall take all steps necessary to ensure that, except as necessary to 
comply with Section IV and paragraphs B and C of this Section of the 
Final Judgment, the management of said station, including the 
performance of decision-making functions regarding marketing and 
pricing, will be kept separate and apart from, and not influenced by, 
defendant EZ.
    B. Defendants shall use all reasonable efforts to maintain and 
increase sales of advertising time by WRFX-FM, and shall maintain at 
1996 or previously approved levels for 1997, whichever are higher, 
promotional advertising, sales, marketing and merchandising support for 
such radio station.
    C. Defendants shall take all steps necessary to ensure that the 
assets used in the operation of WRFX-FM are fully maintained. WRFX-FM's 
sales and marketing employees shall not be transferred or reassigned to 
any other station, except for transfer bids initiated by employees 
pursuant to defendants' regular, established job posting policies, 
provided that defendants give plaintiff and Acquirer ten (10) day's 
notice of such transfer.
    D. Defendants shall not, except as part of a divestiture approved 
by plaintiff, sell any WRFX-FM Assets.
    E. Defendants shall take no action that would jeopardize the sale 
of the WRFX-FM Assets.
    F. Defendants shall appoint a person or persons to oversee the 
assets to be held separate and who will be responsible for defendants' 
compliance with Section VI of this Final Judgment.

VII. Notification

    Within two (2) business days following execution of a binding 
agreement to divest, including all contemplated ancillary agreements 
(e.g., financing), to effect any proposed divestiture pursuant to 
Section IV or V of this Final Judgment, defendant EZ or the trustee, 
whichever is then responsible for effecting the divestiture, shall 
notify plaintiff of the proposed divestiture. If the trustee is 
responsible, it shall similarly notify defendant EZ. The notice shall 
set forth the details of the proposed transaction and list the name, 
address and telephone number of each person not previously identified 
who offered to, or expressed an interest in or a desire to, acquire any 
ownership interest in WRFX-FM Assets, together with full details of 
same. Within fifteen (15) calendar days of receipt by plaintiff of such 
notice, plaintiff may request from defendants, the proposed purchaser 
or purchasers, any other third party, or the trustee, if applicable, 
additional information concerning the proposed divestiture, the 
proposed purchaser, and any other potential purchaser. Defendants and 
the trustee shall furnish any additional information requested within 
fifteen (15) calendar days of the receipt of the request. Within thirty 
(30) calendar days after receipt of the notice or within twenty (20) 
calendar days after plaintiff has been provided the additional 
information, whichever is later, plaintiff shall provide written notice 
to defendants and the trustee, if there is one, stating whether or not 
it objects to the proposed divestiture. If plaintiff fails to object 
within the period specified, or if plaintiff provides written notice to 
defendants and the trustee, if there is one, that it does not object, 
then the divestiture may be consummated, subject only to defendants' 
limited right to object to the sale under Section V(B) of this Final 
Judgment. A divestiture proposed under Section IV shall not be 
consummated if plaintiff objects to it. Upon objection by plaintiff, or 
by defendant EZ under the proviso in Section V(B), a divestiture 
proposed under Section V shall not be consummated unless approved by 
the Court.

VIII. Financing

    Defendants are ordered and directed not to finance all or any part 
of any purchase by an Acquirer made pursuant to Sections IV or V of 
this Final Judgment without the prior written consent of plaintiff.

IX. Affidavits

    A. Within twenty (20) calendar days of the filing of this Final 
Judgment and every thirty (30) calendar days thereafter until the 
divestiture has been completed, whether pursuant to Section IV or 
Section V of this Final Judgment, defendants shall deliver to plaintiff 
an affidavit as to the fact and manner of defendants' compliance with 
Section IV or V of this Final Judgment. Each such affidavit shall 
include, inter alia, the name, address and telephone number of each 
person who, at any time after the period covered by the last such 
report, was contacted by defendants, or their representatives, made an 
offer to acquire, expressed an interest in acquiring, entered into 
negotiations to acquire, or made an inquiry about acquiring, any 
interest in the WRFX-FM Assets, and shall describe in detail each 
contact with any such person during that period. Each such affidavit 
shall also include a description of the efforts that defendants have 
taken to solicit a buyer for the WRFX-FM Assets.
    B. Within twenty (20) calendar days of the filing of this Final 
Judgment, defendants shall deliver to plaintiff an affidavit which 
describes in reasonable detail all actions defendants have taken and 
all steps defendants have implemented on an on-going basis to preserve 
WRFX-FM pursuant to Section VII of this Final Judgment. Defendants 
shall deliver to plaintiff an affidavit describing any changes to the 
efforts and actions outlined in their earlier affidavit(s) filed 
pursuant to this Section within fifteen (15) calendar days after such 
change is implemented.
    C. Defendants shall preserve all records of all efforts made to 
preserve WRFX-FM and to divest the WRFX-FM Assets.

X. Notice

    A. Unless such transaction is otherwise subject to the reporting 
and waiting period requirements of the Hart-Scott-Rodino Antitrust 
Improvements Act of 1976, as amended, 15 U.S.C. 18a (the ``HSR Act''), 
EZ, without providing advance notification to the plaintiff, shall not 
directly or indirectly acquire any assets of or any interest, including 
any financial, security, loan, equity, or

[[Page 15934]]

management interest, in any Non-EZ Radio Station.
    B. EZ, without providing advance notification to the plaintiff, 
shall not directly or indirectly enter into any agreement or 
understanding that would allow EZ to market or sell advertising time or 
to establish advertising prices for any Non-EZ Radio Station.
    C. Notification described in (A) and (B) above shall be provided to 
the United States Department of Justice in the same format as, and per 
the instructions relating to, the Notification and Report Form set 
forth in the Appendix to Part 803 of Title 16 of the Code of Federal 
Regulations as amended, except that the information requested in Items 
5-9 of the instructions must be provided only with respect to EZ Radio 
Stations in the Charlotte Area. Notification shall be provided at least 
thirty (30) days prior to acquiring any such interest or entering any 
such agreement covered in (A) or (B) above, and shall include, beyond 
what may be required by the applicable instructions, the names of the 
principal representatives of the parties to the agreement who 
negotiated the agreement, and any management or strategic plans 
discussing the proposed transaction. If within the 30-day period after 
notification, representatives of the plaintiff make a written request 
for additional information, defendants shall not consummate the 
proposed transaction or agreement until twenty (20) days after 
submitting all such additional information. Early termination of the 
waiting periods in this paragraph may be requested and, where 
appropriate, granted in the same manner as is applicable under the 
requirements and provisions of the HSR Act and rules promulgated 
thereunder.
    D. This Section shall be broadly construed and any ambiguity or 
uncertainty regarding the filing of notice under this Section shall be 
resolved in favor of filing notice.

XI. Compliance Inspection

    For the purpose of determining or securing compliance with the 
Final Judgment and subject to any legally recognized privilege, from 
time to time:
    A. Duly authorized representatives of the plaintiff, including 
consultants and other persons retained by the plaintiff, shall, upon 
written request of the United States Attorney General, or of the 
Assistant Attorney General in charge of the Antitrust Division, and on 
reasonable notice to defendants made to their principal offices, be 
permitted:
    (1) Access during office hours of defendants to inspect and copy 
all books, ledgers, accounts, correspondence, memoranda and other 
records and documents in the possession or under the control of 
defendants, who may have counsel present, relating to any matters 
contained in this Final Judgment; and
    (2) Subject to the reasonable convenience of defendants and without 
restraint or interference from defendants, to interview directors, 
officers, employees and agents of defendants, who may have cousel 
present, regarding any such matters.
    B. Upon the written request of the Untied States Attorney General, 
or of the Assistant Attorney General in charge of the Antitrust 
Division, made to defendants' principal offices, defendants shall 
submit such written reports, under oath if requested, with respect to 
any of the matters contained in this Final Judgment as may be 
requested.
    C. No information or documents obtained by the means provided in 
Section IX or this Section XI shall be divulged by any representative 
of the Untied States to any person other than a duly authorized 
representative of the Executive Branch of the United States, except in 
the course of legal proceedings to which plaintiff is a party 
(including grand jury proceedings), or for the purpose of securing 
compliance with this Final Judgment, or as otherwise required by law.
    D. If at the time information or documents are furnished by a 
defendant to plaintiff, and such defendant represents and identifies in 
writing the material in any such information or documents to which a 
claim of protection may be asserted under Rule 26(c)(7) of the Federal 
Rules of Civil Procedure, and such defendant marks each pertinent page 
of such material, ``Subject to claim of protection under Rule 26(c)(7) 
of the Federal Rules of Civil Procedure,'' then ten (10) calendar days' 
notice shall be given by plaintiff to such defendant prior to divulging 
such material in any legal proceeding (other than a grand jury 
proceeding) to which such defendant is not a party.

XII. Retention of Jurisdiction

    Jurisdiction is retained by this Court at any time for such further 
orders and directions as may be necessary or appropriate for the 
construction, implementation or modification of any provisions of this 
Final Judgment, for the enforcement of compliance herewith, and for the 
punishment of any violation hereof.

XIII. Termination

    Unless this Court grants an extension, this Final Judgment will 
expire upon the tenth anniversary of the date of its entry.

XIV. Public Interest

    Entry of this Final Judgment is in the public interest.

Certificate of Service

    I, Dando B. Cellini, hereby certify that, on February 27, 1997, I 
caused the foregoing documents to be served on defendants EZ 
Communications, Inc. and Evergreen Media Corporation by having a copy 
mailed, first-class postage prepaid, to:

Ray V. Hartwell, III,
Andrew J. Strenio, Jr.,
Hunton & Williams,
1900 K Street, NW, Washington, DC 20006-1109, (202) 955-1639, Counsel 
for EZ Communications, Inc.
Bruce J. Prager,
Latham & Watkins,
885 Third Avenue, New York, NY 10022-4802, (212) 906-1272, Counsel for 
Evergreen Media Corporation.
Dando B. Cellini.

Competitive Impact Statement

    Plaintiff, the United States of America, pursuant to Section 2(b) 
of the Antitrust Procedures and Penalties Act (``APPA''), 15 U.S.C. 
Sec. 16(b)-(h), files this Competitive Impact Statement relating to the 
proposed Final Judgment submitted for entry in this civil antitrust 
proceeding.

I. Nature and Purpose of the Proceeding

    Plaintiff filed a civil antitrust Complaint on February 27, 1997, 
alleging that a proposed swap and acquisition of radio stations in 
Charlotte, North Carolina between EZ Communications, Inc. (``EZ'') and 
Evergreen Media Corporation (``Evergreen'') would violate Section 7 of 
the Clayton Act, 15 U.S.C. Sec. 18. The Complaint alleges that EZ and 
Evergreen both own and operate numerous radio stations throughout the 
United States, and that they each own and operate radio stations in the 
Charlotte, North Carolina metropolitan area. The combined transactions 
would give EZ a significant share of the radio advertising market in 
the Charlotte metropolitan area. As a result, the combination of these 
stations would lessen competition substantially in the sale of the 
radio advertising time in the Charlotte metropolitan area.\1\
---------------------------------------------------------------------------

    \1\ Prior to, and independent of, the transactions giving rise 
to this action, EZ and other radio station owners had announced 
plans to swap radio stations. The swaps would have eliminated 
existing competition and resulted in EZ dominating the country 
format--and its listeners--and SFX Broadcasting Inc. dominating the 
rock format--and its listeners. These transactions were abandoned 
following the Department of Justice's investigation into whether the 
swaps were a device to allocate Charlotte's advertisers in such a 
way as to lessen competition between the two station groups. 
Therefore, it was not necessary to seek relief regarding these swaps 
in this Complaint.

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[[Page 15935]]

    The prayer for relief seeks: (a) an adjudication that the proposed 
transactions described in the Complaint would violate Section 7 of the 
Clayton Act; (b) preliminary and permanent injunctive relief preventing 
the consummation of such transactions; (c) an award to the United 
States of the costs of this action; and (d) such other relief as is 
proper.
    Shortly before this suit was filed, a proposed settlement was 
reached that permits EZ to complete its transactions with Evergreen, 
yet preserves competition in the market in which the transactions would 
raise significant competitive concerns. A stipulation and proposed 
Final Judgment embodying the settlement were filed at the same time the 
Complaint was filed.\2\
---------------------------------------------------------------------------

    \2\ In a related transaction, American Radio Systems Corporation 
(``ARS'') has agreed to acquire EZ through merger. Should the 
proposed merger be consummated, ARS will succeed to EZ's obligations 
under the proposed Final Judgment.
---------------------------------------------------------------------------

    The proposed Final Judgment orders EZ to divest WRFX-FM, currently 
owned by Evergreen. Unless the plaintiff grants a time extension, EZ 
must divest this radio station either within six months after the 
filing of the Complaint or within five (5) business days after notice 
of entry of the Final Judgment, whichever is later. If EZ does not 
divest WRFX-FM within the divestiture period, the Court shall, upon 
plaintiff's application, appoint a trustee to sell the assets. The 
proposed Final Judgment also requires EZ to ensure that, until the 
divestiture mandated by the Final Judgment has been accomplished, WRFX-
FM will be operated independently as a viable, ongoing business, and 
kept separate and apart from defendant EZ's other Charlotte radio 
stations. Further, the proposed Final Judgment requires defendants to 
give plaintiff prior notice regarding future radio station acquisitions 
or certain agreements pertaining to the sale of radio advertising time 
in Charlotte.
    The plaintiff and the defendants have stipulated that the proposed 
final Judgment may be entered after compliance with the APPA. Entry of 
the proposed Final Judgment would terminate this action, except that 
the Court would retain jurisdiction to construe, modify, or enforce the 
provisions of the proposed Final Judgment and to punish violations 
thereof.

II. The Alleged Violations

A. The Defendants
    Defendant EZ is a Virginia corporation with its headquarters in 
Fairfax, Virginia. It currently operates 23 radio stations throughout 
the United States, including two radio stations in Charlotte. In 1996 
EZ reported revenues of approximately $14 million from its Charlotte 
stations.
    Evergreen is a Delaware corporation headquartered in Irving, Texas. 
It owns and operates 41 radio stations nationwide, including five 
stations in the Charlotte area. In 1996 Evergreen derived approximately 
$22 million in revenues from its Charlotte stations.
B. Description of the Events Giving Rise to the Alleged Violations
    On August 27, 1996, EZ entered into an agreement to swap two of its 
radio stations in Philadelphia for five of Evergreen's stations in 
Charlotte, North Carolina. In addition, EZ agreed to purchase another 
Charlotte radio station Evergreen for $10 million. The result of these 
two transactions, as is more fully discussed below, would be to give EZ 
a significant share of the radio advertising market in Charlotte, as 
well as a significant percentage of advertising directed to certain 
target audiences in Charlotte.
    EZ and Evergreen previously have competed for the business of local 
and national companies seeking to advertise in the Charlotte area. 
Because the proposed transactions between EZ and Evergreen would have 
eliminated this competition, they precipitated the government's suit.
C. Anticompetitive Consequences of the Proposed Transaction
    1. Sale of Radio Advertising Time in Charlotte. The Complaint 
alleges that the provision of advertising time on radio stations 
serving the Charlotte, North Carolina Metro Service Area (``MSA'') 
constitutes a line of commerce and section of the country, or relevant 
market, for antitrust purposes. The Charlotte MSA is the geographical 
unit for which Arbitron furnishes radio stations, advertisers and 
advertising agencies in Charlotte with data to aid in evaluating radio 
audience size and composition. Advertisers use this data in making 
decisions about which radio station or combination of radio stations 
can deliver their target audiences in the most efficient and cost-
effective way. The Charlotte MSA includes seven countries: Union, York, 
Cabarrus, Rowan, Mecklenburg, Lincoln and Gaston.
    Local and national advertising that is placed on radio stations 
within the Charlotte MSA is aimed at reaching listening audiences 
within the Charlotte MSA, and radio stations outside of the Charlotte 
MSA do not provide effective access to this audience. Thus, if there 
were a small but significant nontransitory increase in radio 
advertising prices within the Charlotte MSA, advertisers would not buy 
enough advertising time from radio stations located outside of the 
Charlotte MSA to defeat the increase.
    Radio stations earn their revenues from the sale of advertising 
time to local and national advertisers. Many local and national 
advertisers purchase radio advertising time in Charlotte because they 
find such advertising preferable to advertising in other media for 
their specific needs. For such advertisers, radio time (a) may be less 
expensive and more cost-efficient than other media at reaching the 
advertiser's target audience (individuals most likely to purchase the 
advertiser's products or services); (b) may reach certain target 
audiences that cannot be reached as effectively through other media; or 
(c) may offer promotional opportunities to advertisers that they cannot 
exploit as effectively using other media. For these and other reasons, 
many local and national advertisers in Charlotte who purchase radio 
advertising time view radio either as a necessary advertising medium 
for them or as a necessary advertising complement to other media.
    Although some local and national advertisers may switch some of 
their advertising to other media rather than absorb a price increase in 
radio advertising time in Charlotte, the existence of such advertisers 
would not prevent radio stations from raising their prices a small but 
significant amount. At a minimum, stations could raise prices 
profitably to those advertisers who view radio either as a necessary 
advertising medium for them, or as a necessary advertising complement 
to other media. Radio stations, which negotiate prices individually 
with advertisers, can identify those advertisers with strong radio 
preferences. Consequently, radio stations can charge different 
advertisers different rates. Because of this ability to price 
discriminate between different customers, radio stations may charge 
higher rates to advertisers that view radio as particularly effective 
for their needs, while maintaining lower rates for other advertisers.
    2. Harm to Competition. The Complaint alleges that EZ's proposed 
station swaps and acquisition with Evergreen would lessen competition 
substantially in the provision of radio

[[Page 15936]]

advertising time in the Charlotte MSA. First, the proposed transactions 
would create further market concentration in an already highly 
concentrated market, and EZ would control a substantial share of the 
advertising revenues in this market. EZ's market share of radio 
advertising revenues would increase to 55 percent after the proposed 
transactions. According to the Herfindahl-Hirschman Index (``HHI''), a 
widely-used measure of market concentration defined and explained in 
Appendix A, EZ possesses a pretransaction HHI of 2198, which would rise 
by 1440 points to 3638 after the transactions. This substantial 
increase in concentration is likely to give EZ the unilateral power to 
raise advertising prices and reduce the level of service provided to 
advertisers in the Charlotte radio market.
    Furthermore, the proposed transactions would eliminate head-to-head 
competition between EZ and Evergreen for advertisers seeking to reach 
specific audiences. Advertisers select radio stations to reach a large 
percentage of their target audience based upon a number of factors, 
including, inter alia, the size of the station's audience, the 
characteristics of its audience, and the geographic reach of a 
station's signal. Many advertisers seek to reach a large percentage of 
their target audience by selecting those stations whose audience best 
correlates to their target audience. Today, EZ's two stations and 
several of Evergreen's stations compete head-to-head to reach the same 
audiences and, for many local and national advertisers buying time in 
Charlotte, the stations are close substitutes for each other based on 
their specific audience characteristics. The proposed transactions 
would eliminate such competition, notably including competition for 
advertisers seeking to reach male listeners in Charlotte.
    Advertisers seeking to reach male listeners in Charlotte currently 
help ensure competitive rates by ``playing off'' Evergreen stations 
against EZ stations. Because the direct competition between the 
Evergreen and EZ stations would be eliminated by the proposed 
transactions, and because advertisers seeking to reach male listeners 
would have inferior alternatives as a result of the transactions, the 
transactions would give EZ the ability to raise its rates and reduce 
the quality of its services to some of its advertisers on its Charlotte 
stations. This is particularly true because of EZ's ability to charge 
different prices to different advertisers.
    Format changes are unlikely to deter the anticompetitive 
consequences of these transactions. If EZ raised prices or lowered 
services to those advertisers who buy EZ and Evergreen stations because 
of their strength in delivering access to certain specific audiences, 
non-EZ radio stations in Charlotte would not be induced to change their 
formats to attract a greater share of the same listeners and to serve 
better those advertisers seeking to reach such listeners. Successful 
radio stations are unlikely to undertake a format change solely in 
response to small but significant increases in price being charged to 
advertisers by a multi-station firm such as EZ, because they would 
likely lose a substantial portion of their existing audiences. Even if 
less successful stations did change format, they still would be 
unlikely to attract enough listeners to provide a suitable alternative 
to EZ.
    Finally, new entry into the Charlotte radio advertising market is 
highly unlikely in response to a price increase by EZ. No unallocated 
radio broadcast frequencies exist in Charlotte. Also, stations located 
in adjacent communities cannot boost their power so as to enter the 
Charlotte market without interfering with other stations on the same or 
similar frequencies, a violation of Federal Communications Commission 
(``FCC'') regulations.
    For all of these reasons, plaintiff concludes that the proposed 
transactions would lessen competition substantially in the sale of 
radio advertising time in the Charlotte MSA, eliminate actual 
competition between EZ and Evergreen, and result in increased prices 
and reduced quality of service for radio advertising time in the 
Charlotte MSA, all in violation of Section 7 of the Clayton Act.

III. Explanation of the Proposed Final Judgment

    The proposed Final Judgment would preserve competition in the sale 
of radio advertising time in the Charlotte MSA. It requires the 
divestiture of WRFX-FM, Charlotte's most popular station among male 
listeners. This relief will reduce the market share in advertising 
revenues EZ would have achieved through the proposed transactions from 
over 55 percent to about 40 percent of the Charlotte radio market. The 
divestiture will preserve choices for advertisers and help ensure that 
radio advertising rates in Charlotte do not increase and that services 
do not decline as a result of the combined transactions.
    Unless plaintiff grants an extension of time, EZ must divest WRFX-
FM either within six months after the Complaint has been filed or 
within five (5) business days after notice of entry of the Final 
Judgment, whichever is later. Until the divestiture takes place, WRFX-
FM will be maintained as a viable and independent competitor to EZ's 
other stations in the Charlottee MSA.
    If EZ fails to divest WRFX-FM within the time periods specified in 
the Final Judgment, the Court, upon plaintiff's application, shall 
appoint a trustee nominated by plaintiff to effect the divestiture. If 
a trustee is appointed, the proposed Final Judgment provides that EZ 
will pay all costs and expenses of the trustee and any professionals 
and agents retained by the trustee. The compensation paid to the 
trustee and any persons retained by the trustee shall be both 
reasonable in light of the value of WRFX-FM, and based on a fee 
arrangement providing the trustee with an incentive based on the price 
and terms of the divestiture and the speed with which it is 
accomplished. After appointment the trustee will file monthly reports 
with the plaintiff, defendant EZ and the Court, setting forth the 
trustee's efforts to accomplish the divestiture ordered under the 
proposed Final Judgment. If the trustee has not accomplished the 
divestiture within six (6) months after its appointment, the trustee 
shall promptly file with the Court a report setting forth (1) the 
trustee's efforts to accomplish the required divestiture, (2) the 
reasons, in the trustee's judgment, why the required divestiture has 
not been accomplished, and (3) the trustee's recommendations. At the 
same time the trustee will furnish such report to the plaintiff and 
defendant EZ, who will each have the right to be heard and to make 
additional recommendations.
    The proposed Final Judgment requires that defendants maintain WRFX-
FM separate and apart from defendant EZ's other Charlotte stations, 
pending divestiture. The Judgment also contains provisions to ensure 
the WRFX-FM will be preserved, so that this station remains a viable, 
aggressive competitor after divestiture.
    The proposed Final Judgment also prohibits EZ from entering into 
certain agreements with other Charlotte radio stations without 
providing at least thirty (30) days' notice to the Department of 
Justice. Specifically, EZ must notify the Department before acquiring 
any interest in another Charlotte radio station. Such acquisitions 
could raise competitive concerns but might be too small to be reported 
otherwise under the Hart-Scott-Rodino (``HSR'') premerger notification 
statute. Moreover, EZ may not agree to sell radio advertising time for 
any other Charlotte radio station without providing plaintiff with 
notice. In particular, the provision requires EZ to notify the 
Department before it enters

[[Page 15937]]

into any Joint Sales Agreements (``JSAs''), where one station takes 
over another station's advertising time, or any Local Marketing 
Agreements (``LMAs''), where one station takes over another station's 
broadcasting and advertising time, or other comparable arrangements in 
the Charlotte area. Agreements whereby EZ sells advertising for or 
manages other Charlotte area radio stations would effectively increase 
its market share in this MSA. Despite their clear competitive 
significance, JASs probably would not be reportable to the Department 
under the HSR Act. Thus, this provision in the proposed Final Judgment 
ensures that the Department will receive notice of and be able to act, 
if appropriate, to stop any agreements that might have anticompetitive 
effects in the Charlotte market.
    The relief in the proposed Final Judgment is intended to remedy the 
likely anticompetitive effects of EZ's proposed transactions with 
Evergreen in Charlotte. Nothing in this Final Judgment is intended to 
limit the plaintiff's ability to investigate or to bring actions, where 
appropriate, challenging other past or future activities of defendants 
in the Charlotte MSA.

IV. Remedies Available to Potential Private Litigants

    Section 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any 
person who has been injured as a result of conduct prohibited by the 
antitrust laws may bring suit in federal court to recover three times 
the damages the person has suffered, as well as costs and reasonable 
attorneys' fees. Entry of the proposed Final Judgment will neither 
impair nor assist the bringing of any private antitrust damage action. 
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C. 
Sec. 16(a), the proposed Final Judgment has no prima facie effect in 
any subsequent private lawsuit that may be brought against defendants.

V. Procedures Available for Modification of the Proposed Final Judgment

    The plaintiff and the defendants have stipulated that the proposed 
Final Judgment may be entered by the Court after compliance with the 
provisions of the APA, provided that the plaintiff has not withdrawn 
its consent. The APPA conditions entry upon the Court's determination 
that the proposed Final Judgment is in the public interest.
    The APPA provides a period of at least sixty (60) days preceding 
the effective date of the proposed Final Judgment within which any 
person may submit to the plaintiff written comments regarding the 
proposed Final Judgment. Any person who wishes to comment should do so 
within sixty (60) days of the date of publication of this Competitive 
Impact Statement in the Federal Register. The plaintiff will evaluate 
and respond to the comments. All comments will be given due 
consideration by the Department of Justice, which remains free to 
withdraw its consent to the proposed Final Judgment at any time prior 
to entry. The comments and the response of the plaintiff will be filed 
with the Court and published in the Federal Register.
    Written comments should be submitted to: Craig W. Conrath, Chief, 
Merger Task Force, Antitrust Division, United States Department of 
Justice, 1401 H Street, NW; Suite 4000, Washington, DC 20530.
    The proposed Final Judgment provides that the Court retains 
jurisdiction over this action, and that the parties may apply to the 
Court for any order necessary or appropriate for the modification, 
interpretation or enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final Judgment

    Plaintiff considered, as an alternative to the proposed Final 
Judgment, a full trial on the merits of its Complaint against 
defendants. Plaintiff is satisfied, however, that the divestiture of 
WRFX-FM and other relief contained in the proposed Final Judgment will 
preserve viable competition in the sale of radio advertising time in 
the Charlotte MSA. Thus, the proposed Final Judgment would achieve the 
relief the government would have obtained through litigation, but 
avoids the time, expense and uncertainty of a full trial on the merits 
of the Complaint.

VII. Standard of Review Under the APPA for Proposed Final Judgment

    The APPA requires that proposed consent judgments in antitrust 
cases brought by the United States be subject to a sixty (60) day 
comment period, after which the Court shall determine whether entry of 
the proposed Final Judgment ``is in the public interest.'' In making 
that determination, the Court may consider--

    (1) The competitive impact of such judgment, including 
termination of alleged violations, provisions for enforcement and 
modification, duration or relief sought, anticipated effects of 
alternative remedies actually considered and any other 
considerations bearing upon the adequacy of such judgment;
    (2) The impact of entry of such judgment upon the public 
generally and individuals alleging specific injury from the 
violations set forth in the complaint including consideration of the 
public benefit, if any, to be derived from a determination of the 
issues at trial. 15 U.S.A. Sec. 16(e).
    As the United States Court of Appeals for the D.C. Circuit recently 
held, this statute permits a court to consider, among other things, the 
relationship between the remedy secured and the specific allegations 
set forth in the government's complaint, whether the decree is 
sufficiently clear, whether enforcement mechanisms are sufficient and 
whether the decree may positively harm third parties. See United States 
v. Microsoft, 56 F.3d 1448, 1461-62 (D.C. Cir. 1995).
    In conducting this inquiry, ``[t]he Court is nowhere compelled to 
go to trial or to engage in extended proceedings which might have the 
effect of vitiating the benefits of prompt and less costly settlement 
through the consent decree process.'' \3\ Rather,
---------------------------------------------------------------------------

    \3\ 119 Cong. Rec. 24598 (1973). See United States v. Gillette 
Co., 406 F. Supp. 713, 715 (D. Mass. 1975). A ``public interest'' 
determination can be made properly on the basis of the Competitive 
Impact Statement and Response to Comments filed pursuant to the 
APPA. Although the APPA authorizes the use of additional procedures, 
15 U.S.C. 16(f), those procedures are discretionary. A court need 
not invoke any of them unless it believes that the comments have 
raised significant issues and that further proceedings would aid the 
court in resolving those issues. See H.R. Rep. 93-1463, 93rd Cong. 
2d Sess. 8-9 (1974), reprinted in U.S.C.C.A.N. 6535, 6538.

[a]bsent a showing of corrupt failure of the government to discharge 
its duty, the Court, in making its public interest findings, should 
* * * carefully consider the explanations of the government in the 
competitive impact statement and its responses to comments in order 
to determine whether those explanations are reasonable under the 
---------------------------------------------------------------------------
circumstances.

United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. 
para.61,508, at 71,980 (W.D. Mo. 1977).

    Accordingly, with respect to the adequacy of the relief secured by 
the decree, a court may not ``engage in an unrestricted evaluation of 
what relief would best serve the public.'' United States v. BNS, Inc., 
858 F.2d 456, 462 (9th Cir. 1988), citing United States v. Bechtel 
Corp., 648 F.2d 660, 666 (9th Cir.), Cert. denied, 454 U.S. 1083 
(1981); see also Microsoft, 56 F.3d at 1460-62. Precedent requires 
that--

the balancing of competing social and political interests affected 
by a proposed antitrust consent decree must be left, in the first 
instance, to the discretion of the Attorney General. The court's 
role in protecting the public interest is one of insuring that the 
government has not breached its duty to the public in consenting to 
the decree. The court is required to

[[Page 15938]]

determine not whether a particular decree is the one that will best 
serve society, but whether the settlement is ``within the reaches of 
the public interest.'' More elaborate requirements might undermine 
the effectiveness of antitrust enforcement by consent decree.\4\

    \4\ Bechtel, 648 F.2d at 666 (citations omitted) (emphasis 
added); see BNS, 858 F.2d at 463; United States v. National 
Broadcasting Co., 449 F. Supp. 1127, 1143 (C.D. Cal. 1978); 
Gillette, 406 F. Supp. at 716. See also Microsoft, 56 F.3d at 1461 
(whether ``the remedies [obtained in the decree are] so inconsonant 
with the allegations charged as to fall outside of the `reaches of 
the public interest' '') (citations omitted).

    The proposed Final Judgment, therefore, should not be reviewed 
under a standard of whether it is certain to eliminate every 
anticompetitive effect of a particular practice or whether it mandates 
certainty of free competition in the future. Court approval of a final 
judgment requires a standard more flexible and less strict than the 
standard required for a finding of liability. ``[A] proposed decree 
must be approved even if it falls short of the remedy the court would 
impose on its own, as long as it falls within the range of 
acceptability or is `within the reaches of public interest.' '' \5\
---------------------------------------------------------------------------

    \5\ United States v. American Tel. and Tel Co., 552 F. Supp. 
131, 151 (D.D.C. 1982), aff'd sub nom. Maryland v. United States, 
460 U.S. 1001 (1983), quoting Gillette Co., 406 F. Supp. at 716 
(citations omitted); United States v. Alcan Aluminum, Ltd., 605 F. 
Supp. 619, 622 (W.D. Ky. 1985).
---------------------------------------------------------------------------

    This is strong and effective relief that should fully address the 
competitive harm posed by the proposed transactions.

VIII. Determinative Documents

    There are no determinative materials or documents within the 
meaning of the APPA that were considered by the plaintiff in 
formulating the proposed Final Judgment.

    Respectfully submitted,
Dando B. Cellini,
Merger Task Force, U.S. Department of Justice, Antitrust Division, 1401 
H Street, N.W.; Suite 4000, Washington, D.C. 20530, (202) 307-0829.

    Dated: March 20, 1997.

Exhibit A--Definition of HHI and Calculations for Market

    ``HHI'' means the Herfindahl-Hirschman Index, a commonly accepted 
measure of market concentration. It is calculated by squaring the 
market share of each firm competing in the market and then summing the 
resulting numbers. For example, for a market consisting of four firms 
with shares of thirty, thirty, twenty and twenty percent, the HHI is 
2600 (302 + 302 + 202 + 202 = 2600). The HHI takes 
into account the relative size and distribution of the firms in a 
market and approaches zero when a market consists of a large number of 
firms of relatively equal size. The HHI increases both as the number of 
firms in the market increases and as the disparity in size between 
those firms increases.
    Markets in which the HHI is between 1000 and 1800 points are 
considered to be moderately concentrated, and those in which the HHI is 
in excess of 1800 points are considered to be concentrated. 
Transactions that increase the HHI by more than 100 points in 
concentrated markets presumptively raise antitrust concerns under the 
Merger Guidelines. See Merger Guidelines Sec. 1.51.

Certificate of Service

    I, Dando B. Cellini, hereby certify that, on March 20, 1997, I 
caused the foregoing document to be served on defendants EZ 
Communications, Inc. and Evergreen Media Corporation by having a copy 
mailed, first-class, postage prepaid, to:

Ray V. Hartwell, III,
Andrew J. Strenio, Jr.,
Hunton & Williams,
1900 K Street, NW, Washington, DC 20006-1109, (202) 955-1639, Counsel 
for EZ Communications, Inc.
Bruce J. Prager,
Latham & Watkins,
885 Third Avenue, New York, NY 10022-4802, (212) 906-1272, Counsel for 
Evergreen Media Corporation.
Dando B. Celini.
[FR Doc. 97-8460 Filed 4-2-97; 8:45 am]
BILLING CODE 4410-11-M