[Federal Register Volume 63, Number 61 (Tuesday, March 31, 1998)]
[Proposed Rules]
[Pages 15353-15362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8276]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Chapter I

[MM Docket No. 98-35; FCC: 98-37]


Broadcast Services; Radio Stations, Television Stations

AGENCY: Federal Communications Commission.


[[Page 15354]]


ACTION: Review of rules; notice of inquiry.

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SUMMARY: Pursuant to the requirements of Section 202(h) of the 
Telecommunications Act of 1996, the Commission issues this Notice of 
Inquiry soliciting comment on whether any or all of its broadcast 
ownership rules are no longer in the public interest as the result of 
competition.

DATES: Comments are due by May 22, 1998, and reply comments are due by 
June 22, 1998.

ADDRESSES: Federal Communications Commission, 1919 M Street, N.W., 
Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Roger Holberg, Mass Media Bureau, 
Policy and Rules Division (202)418-2134 or Dan Bring, Mass Media 
Bureau, Policy and Rules Division (202)418-2170.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's 
Notice of Inquiry in MM Docket No. 98-35, FCC 98-37, adopted March 12, 
1998, and released March 13, 1998. The complete text of this Notice of 
Inquiry is available for inspection and copying during normal business 
hours in the FCC Reference Center (Room 239), 1919 M Street, N.W., 
Washington, D.C., and may also be purchased from the Commission's copy 
contractor, International Transcription Service, (202)857-3800, 1231 
20th Street, N.W., Washington, D.C. 20036. The Notice of Inquiry is 
also available on the Internet at the Commission's web site: http://
www.fcc.gov.

Synopsis of Notice of Inquiry

I. Introduction

    1. This Notice of Inquiry is the first step in our biennial 
ownership review of the broadcast ownership and other rules as required 
by section 202(h) of the Telecommunications Act of 1996 (``Telecom 
Act'').1 That section provides:

    \1\ Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 
56 (1996). Also required by that section is the biennial review of 
rules adopted pursuant to sections 202(a)-(f) of the 
Telecommunications Act. These include rules pertaining to cable as 
well as broadcast cross-ownership.
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    The Commission shall review its rules adopted pursuant to this 
section and all of its ownership rules biennially as part of its 
regulatory reform review under section 11 of the Communications Act 
of 1934 and shall determine whether any of such rules are necessary 
in the public interest as the result of competition. The Commission 
shall repeal or modify any regulation it determines to be no longer 
in the public interest.

    Section 11 of the Communications Act of 1934, as 
amended,2 similarly provides that under the statutorily 
required review, the Commission ``shall determine whether any such 
regulation is no longer necessary in the public interest as a result of 
meaningful economic competition'' and requires that the Commission 
``shall repeal or modify any regulation it determines to be no longer 
necessary in the public interest.''
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    \2\ 47 U.S.C. 161.
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    2. Once this phase is completed, we will review the comments and 
issue a report. In the event we conclude there is good reason to 
believe that any of the rules within the scope of the review, or 
portions thereof, should be repealed or modified, we will issue the 
appropriate Notice(s) of Proposed Rule Making.

II. Framework for Review

    3. For more than a half century, the Commission's regulation of 
broadcast service has been guided by the goals of promoting competition 
and diversity.3 Competition is an important part of the 
Commission's public interest mandate because it promotes consumer 
welfare and the efficient use of resources.4 Diversity, 
particularly diversity of viewpoints, is the other important part of 
the Commission's public interest mandate. The Commission's viewpoint 
diversity objective promotes a goal the Supreme Court has stated 
underlies the First Amendment. As the Court has said, the First 
Amendment ``rests on the assumption that the widest possible 
dissemination of information from diverse and antagonistic sources is 
essential to the welfare of the public* * *.'' 5 Promoting 
diversity in the number of separately owned outlets has contributed to 
our goal of viewpoint diversity by assuring that the programming and 
views available to the public are disseminated by a wide variety of 
speakers. Moreover, our diversity concerns are separate from our goal 
of promoting competition. Indeed, the Supreme Court has recently stated 
that ``[f]ederal policy* * *has long favored preserving a multiplicity 
of broadcast outlets regardless of whether the conduct that threatens 
it is motivated by anticompetitive animus or rises to the level of an 
antitrust violation.'' 6
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    \3\ For a short history of the Commission's broadcast ownership 
regulations, see Further Notice of Proposed Rule Making in MM Docket 
Nos. 91-221 and 87-8, 10 FCC Rcd 3524, 3526-29 (1995)(hereinafter 
``TV Ownership Further Notice'').
    \4\ Revision of Radio Rules and Policies, 7 FCC Rcd 2755 (1992), 
recon. granted in part, 7 FCC Rcd 6387 (1992), further recon., 9 FCC 
Rcd 7183 (1994).
    \5\ Associated Press v. United States, 326 U.S. 1, 20 (1945); 
accord Federal Communications Commission v. National Citizens 
Committee for Broadcasting, 436 U.S. 775 (1978).
    \6\ Turner Broadcasting System, Inc. v. FCC, 117 S.Ct. 1174 
(1997)(citations omitted).
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    4. We also note that the definition of economic markets (i.e., 
product and geographic markets) is an important step in the assessment 
of current levels of competition that section 202(h) and section 11 
require in order to determine whether such competition has eliminated 
the need for our broadcast rules. The Commission has previously 
identified three economic markets in which broadcasters operate: the 
market for delivered video programming; the advertising market; and the 
program production market. In addition, we tentatively considered that 
cable television directly competes with broadcast television stations 
in each of these markets, and that broadcast radio and newspapers 
compete with television in the local advertising market. While we also 
sought comment on whether other suppliers of video programming (e.g., 
Multichannel Multipoint Distribution Service (MMDS), Direct Broadcast 
Satellite (DBS), etc.) compete with broadcast television stations, we 
stated that it may not be appropriate to include them because their 
current market penetration is so low that they are not relevant 
substitutes to a majority of Americans.7 Commenters are 
invited to address the correctness of these tentative considerations, 
as well as their applicability to the instant proceedings. After 
exploring the issue of which media compete with broadcasting in each of 
the economic markets, the competitive analysis then focuses upon 
whether and to what extent market power exists and is being exercised, 
and what effect our ownership rules have on the existence and exercise 
of market power in each of these markets.
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    \7\ TV Ownership Further Notice, supra at 3538.
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    5. Our diversity analysis focuses upon the ability of broadcast and 
non-broadcast media to advance the three types of diversity (i.e., 
viewpoint, outlet and source) our broadcast ownership rules have 
attempted to foster. Viewpoint diversity refers to helping to ensure 
that the material presented by the media reflect a wide range of 
diverse and antagonistic opinions and interpretations. Outlet diversity 
refers to a variety of delivery services (e.g., broadcast stations, 
newspapers, cable and DBS) that select and present programming directly 
to the public. Source diversity refers to promoting a variety of 
program or information

[[Page 15355]]

producers and owners.8 In the TV Ownership Further Notice we 
sought comment on whether nonbroadcast outlets contributed to our 
diversity goals. We tentatively considered that cable television, as 
well as broadcast television, provides diversity in this market given 
that cable has the capability for local origination of programming.
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    \8\ See TV Ownership Further Notice, supra at 3547-51.
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    6. We propose to apply this framework to evaluate whether our rules 
continue to be in the public interest as required by the Telecom Act. 
We seek comment on this proposal. In performing our section 202(h) 
review, we will consider the effect of meaningful competition that has 
developed and the extent to which this competition has been furthered 
by our rules. We also seek comment on the relevance to the framework of 
the Commission's assessment of the state of competition in the multi-
channel video programming delivery services (MVPDs) market contained in 
the Cable Competition Report,9 which was released subsequent 
to our TV Ownership Further Notice. Furthermore, we seek comment on how 
the Commission's assessment of the competitive effects of the Bell 
Atlantic/NYNEX merger bears on our analysis here.10 We also 
seek data, studies and any other information relevant to our 
consideration of these competition and diversity issues.
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    \9\ Fourth Annual Report, in the Matter of Annual Assessment of 
the Status of Competition in Markets for the Delivery of Video 
Programming, CS Docket 97-141 (adopted December 31, 1997) (''Video 
Competition Report'').
    \10\ See Memorandum Opinion and Order In the Application of 
NYNEX Corporation, 12 FCC Rcd 19985 (1997).
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III. Rules To Be Reviewed

    7. In this Notice of Inquiry we describe each of the rules that are 
within the scope of our biennial broadcast ownership review. We seek 
comment on any other rules commenters believe should be included in 
this review. The rules are grouped into three categories. The first 
group are those broadcast ownership rules that are currently being 
examined in pending Commission proceedings. The second group are those 
broadcast ownership rules that have recently been changed to implement 
provisions of the Telecom Act of 1996.11 Finally, the third 
group are the remaining broadcast ownership rules.
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    \11\ We will not be reviewing herein the elimination of national 
radio ownership limits (Order, 11 FCC Rcd 12368 (1996)) or cable/
network cross-ownership restrictions (Order in CS Docket No. 96-56, 
11 FCC Rcd 15115 (1996)) because neither is a ``rule adopted 
pursuant to'' section 202(h) or an existing broadcast ownership 
rule. Additionally, although these subjects are referred to in 
section 202(f)(2) of the Telecom Act, the Commission has not revised 
any rules pertaining to ensuring cable carriage, channel 
positioning, or nondiscriminatory treatment of broadcast stations by 
cable systems. Accordingly, these subjects, will not be expressly 
and separately addressed except as set forth.
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Rules Currently Subject to Outstanding Proceedings

    8. Several of the Commission's broadcast ownership rules are 
currently the subject of open proceedings. They are as follows:
     The television ``duopoly'' rule, which states that a party 
may not own, operate or control two or more broadcast television 
stations with overlapping ``Grade B'' signal contours.12
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    \12\ 47 CFR 73.3555(b). This rule is currently under 
consideration in MM Docket Nos. 91-221 and 87-8. See Notice of 
Proposed Rule Making in MM Docket No. 91-221, 7 FCC Rcd 4111(1992); 
TV Ownership Further Notice, supra; Second Further Notice of 
Proposed Rule Making in MM Docket Nos. 91-221 and 87-8, 11 FCC Rcd 
21655 (1996).
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     The ``one-to-a-market'' rule, which generally prohibits 
the common ownership of a television and a radio station in the same 
market.13 In 1989, the Commission amended the rule to 
specify that it would ``look favorably'' on requests for waiver of the 
restriction in the Top 25 television markets if, after the merger, at 
least 30 independently owned broadcast voices remained, or if the 
merger involved a ``failed station.'' Case-by-case review of waiver 
requests is also provided for in instances where the presumptive waiver 
criteria are not present. Section 202(d) of the Telecom Act directed 
the Commission to extend its presumptive waiver policy to the Top 50 
television markets if it finds that doing so would be in the public 
interest.14
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    \13\ 47 CFR 73.3555(c). This rule is also currently under review 
in MM Docket Nos. 91-221 and 87-8.
    \14\ See note 12, supra.
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     the daily newspaper/radio cross-ownership rule 
15 which generally prohibits the common ownership of a daily 
newspaper and a radio station in the same community. The outstanding 
proceeding examines whether the Commission should modify the existing 
waiver policy for this rule.16
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    \15\ 47 CFR 73.3555(d). The rule applies to all newspaper/
broadcast cross-ownership situations. Only the waiver policy with 
respect to newspaper/radio combinations is currently under review in 
another proceeding.
    \16\ See Notice of Inquiry in MM Docket No. 96-197, 11 FCC Rcd 
13003 (1996).
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    9. We believe that our ongoing review of these rules in the 
outstanding proceedings satisfies the requirements of section 202(h) of 
the Telecom Act.17 We anticipate taking action in those 
proceedings during 1998 independently of the instant review. We 
consequently seek no additional comment on these rules in this Notice 
of Inquiry. Nor do we seek comment on our attribution standards. Our 
attribution rules define what the Commission will consider a cognizable 
interest for purposes of its ownership rules. They do not of themselves 
establish limits on ownership or restrict cross-ownership combinations. 
Furthermore, they are currently under consideration in MM Docket Nos. 
94-150, 92-51, and 87-154.18
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    \17\ In the Conference Report accompanying the Telecom Act, it 
is stated that the, ``conferees are aware that the Commission 
already has several broadcast deregulation proceedings underway. It 
is the intention of the conferees that the Commission continue with 
these proceedings and conclude them in a timely manner.'' H.R. Rep. 
104-458, at 164.
    \18\ See Notice of Proposed Rule Making in MM Docket Nos. 94-150 
et al., 10 FCC Rcd 3606 (1995); Further Notice of Proposed Rule 
Making in MM Docket Nos. 94-150 et al., 11 FCC Rcd 19895 (1996).
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Rules Recently Changed by Section 202 of the Telecom Act

    10. The Commission modified/eliminated several of its ownership 
rules in accordance with section 202 of the Telecom Act. Section 202(h) 
of the Act directs the Commission, without limitation, to review its 
broadcast ownership rules as part of the biennial ownership review. 
Parties are invited to provide data or other information which would 
indicate whether some, or all, of the remaining rules are no longer in 
the public interest. In this proceeding we will review the impact of 
the remaining rules on competition and diversity and discuss our 
analysis in the report we issue.
    11. In the course of this review, we will examine the effect these 
rule changes have had, thus far, on the structure and trends in media 
markets and their impact on our competition and diversity goals. We 
propose to make this assessment by developing a record examining the 
changes in the structure of the industry (horizontal concentration and 
vertical integration) and financial performance in media markets, as 
well as changes in diversity. Examining the structure of an industry 
provides information about the industry's conduct and performance. For 
example, horizontal concentration can give firms sufficient market 
power to raise rates above competitive levels or otherwise engage in 
anti-competitive activity, although it can also result in new 
efficiencies that accrue to the

[[Page 15356]]

benefit of consumers. Examining changes in ownership will provide 
information on the effects on diversity.
    12. Parties are invited to provide us with relevant information, 
but our review will also be informed by publicly available information, 
e.g., BIA and Compustat. Toward this end, we include data and a 
preliminary assessment of some of these effects. We invite parties to 
comment on the information we present as well as to provide additional 
data that will shed light on the effects of these rule changes in the 
media market.
    13. National Television Ownership Rule. Section 202(c)(1) of the 
Telecom Act directed the Commission to modify its rules to eliminate 
the numerical limit on the number of broadcast television stations a 
person or entity could own nationwide and to increase the audience 
reach cap on such ownership from 25 percent to 35 percent of television 
households. The Commission amended section 73.3555(e) of its Rules to 
reflect this change.19
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    \19\ Order, 11 FCC Rcd 12374 (1996).
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    14. It is clear that there has been some consolidation of 
television stations since the Telecom Act. However, most of the top 25 
television group owners remain significantly below the 35 percent reach 
cap, with only Fox's and CBS's television stations reaching more than 
30 percent of U.S. households. The industry continues to be 
unconcentrated at the national level, with our estimate of the 
Herfindahl-Hirschman Index (HHI) still below 1000, increasing from 264 
in 1996 to 308 in 1997.20
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    \20\ The HHI is a standard measure of economic concentration. 
The Department of Justice uses the HHI as part of its evaluation of 
market competition. They generally consider a market to be 
unconcentrated if the HHI is below 1000. HHIs are calculated by 
summing the square of each television owner's percentage of total 
television station revenues. The data for our estimate of the HHI 
comes from the BIA database which estimates station, owner, and 
market revenues. The revenue estimate combines national and local 
advertising revenue for each station, owner, and market. The 1997 
HHI uses 1997 ownership data, combined with 1996 revenues, and the 
1996 HHI uses 1996 ownership data, combined with 1995 revenues.
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    15. We seek comment on the effect of this rule on competition and 
diversity and whether this rule is no longer necessary in the public 
interest as the result of competition. What effect has it had on 
competition in the national advertising market or the program 
production market at the national level? How does the rule affect 
existing television networks or the formation of new networks? We also 
seek information on the extent of economies of scale realized as a 
result of the consolidation permitted by the Telecom Act.
    16. Local Radio Ownership Rules. Section 202(b) of the Telecom Act 
directed the Commission to relax its radio multiple ownership rules to 
allow common ownership of up to eight radio stations on the local 
level, depending on the number of stations in the market. The 
Commission has revised its Rules to reflect this mandate.21
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    \21\ Section 202(a) of the Telecom Act directed the Commission 
to eliminate its national radio ownership restrictions. The 
Commission amended its rules so that there are now no limits on the 
number of radio stations that may be owned nationally. Order, 11 FCC 
Rcd 12368 (1996).
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    17. We will include in the record of this proceeding an FCC staff 
report which reviews the response of the radio industry to the revised 
rules from March, 1996 to November, 1997. We invite comment on the 
information set forth in this staff report. As the report documents, 
the number of commercial radio stations has increased 2.5 percent from 
10,222 to 10,475. At the same time, there has been a tremendous 
increase in the number of station transactions since the passage of the 
Telecom Act resulting in an increase in industry concentration. At the 
national level, the number of owners of commercial radio stations has 
declined by 11.7 percent from 5,105 to 4,507. This decline is primarily 
due to mergers between existing owners. The result of these mergers has 
been to change the ranking and composition of the top radio station 
owners.
    18. At the local level, there has been a downward trend in the 
number of radio station owners in Arbitron radio Metro markets. The 
average number of radio station owners across all radio Metro markets 
declined from 12 to 11, a loss of about one owner per market. The top 
10 radio Metro markets experienced an average loss of 3 owners per 
market, from about 30 owners to about 27 owners per market. The 
smallest radio Metro markets (markets 101-265) experienced an average 
loss of about one owner per market, from about 9 owners to 8 owners. 
Further, the top owners in each Metro market generally account for an 
increasing share of total radio advertising revenues in these markets. 
For example, the top four radio owners in each Metro market, on 
average, account for about 90 percent of their Metro market's total 
revenues, compared to about 80 percent in March, 1996. The staff report 
also indicates that the average number of distinct radio formats across 
all radio Metro markets is 10, remaining unchanged from March, 1996, to 
March, 1997.
    19. At the industry level, the staff report indicates that publicly 
traded companies whose primary business is radio broadcasting are 
experiencing robust financial performance. Operating margins have 
increased slightly, while their profit margins have varied. This is 
largely a result of their increased debt loads. Advertising revenues 
have been sufficient, to date, to generate positive cash flow on an 
industry-wide basis. This health is reflected in stock returns better 
than those of the typical S&P 500 company. The market's valuation of 
radio companies suggests that the market is foreseeing future earnings 
growth in this industry. The observed consolidation of the radio 
industry appears to have had positive financial consequences for these 
radio companies.
    20. We invite parties to comment on the effect of the local radio 
ownership limits on competition in radio. What has been the effect on 
competition in the program delivery market? What has been the effect on 
competition in the local advertising market? In this regard, the TV 
Ownership Further Notice noted that television (broadcast and cable) 
and newspapers provided some level of competition to radio in the local 
advertising market.22 Is there greater efficiency at the 
local level due to consolidation? We ask commenters to provide data 
documenting any economic efficiencies and specific cost savings.
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    \22\ The program production market is national in scope and is, 
thus, unaffected by changes in the local radio rule. We further note 
that in reviewing radio station mergers under the antitrust laws, 
the Department of Justice has taken the position that radio stations 
form a distinct local advertising market and that newspapers, cable, 
and broadcast television stations are not effective substitutes to 
radio stations in this market. See Address of Joel I. Klein, 
Assistant Attorney General, Antitrust Division of the Department of 
Justice, ``DOJ Analysis of Radio Mergers'' (Feb. 19, 1997) 
(available at http://www.usdoj.gov/atr/speeches/jik97219.htm).
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    21. We also seek comment on the impact on diversity in radio. Are 
the current ownership limits set forth in our rules no longer necessary 
in the public interest? For example, has coverage of news and public 
affairs been enhanced as a result? We also note that there has been a 
drop in the number of minority-owned radio broadcast stations, as 
reported in the annual report released by National Telecommunications 
and Information Administration.23 It has been argued that 
the change in the radio ownership rules has been detrimental to the 
enhancement of ownership by

[[Page 15357]]

minorities and women in the provision of radio service. The Commission 
has a statutory obligation under section 309(j) of the Act as well as 
an historic commitment to encouraging minority participation in the 
telecommunications industry.24 We seek comment on the 
relationship between these ownership limits and the opportunity for 
minority broadcast station ownership. We also seek comment on any 
similar effects on female ownership of broadcast facilities. We invite 
commenters to address judicial considerations in this regard.
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    \23\ Minority Commercial Broadcast Ownership in the U.S., a 
report of the Minority Telecommunications Development Program, 
National Telecommunications and Information Administration (August 
1997). In this report, the number of minority-owned commercial radio 
stations declined from 312 in 1995 to 284 in 1996/97. There are no 
statistics available concerning female ownership of broadcast 
facilities.
    \24\ For a brief historic overview, see generally Notice of 
Proposed Rule Making in MM Docket Nos. 94-149 and 91-140, 10 FCC Rcd 
2788 (1995).
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    22. We invite comment on whether, given the issues raised above, we 
should modify the local radio ownership rules in any respect. 
Specifically, we seek comment on whether the way in which we count 
stations for purposes of applying our local radio ownership rule should 
remain the same or be modified in order to more realistically account 
for the number of stations in a market. We ask parties to be specific 
in any such proposals they advocate.
    23. Dual Network Rule. Section 202(e) of the Telecom Act directed 
the Commission to revise its ``dual network'' rule.25 Under 
the prior dual network rule, the Commission generally prohibited a 
party from affiliating with a network organization that maintained more 
than one network of television broadcast stations. The Telecom Act 
directed the Commission to revise the rule to permit a television 
broadcast station to affiliate with a person or entity that maintains 
two or more networks of television broadcast stations unless such 
networks are composed of: 1) two or more persons or entities that were 
``networks'' on the date the Telecom Act was enacted; 26 or 
2) any such network and an English-language program distribution 
service that on the date of the Telecom Act's enactment provided 4 or 
more hours of programming per week on a national basis pursuant to 
network affiliation arrangements with local television broadcast 
stations in markets reaching more than 75 percent of television 
households.27 The Commission amended its dual network rule 
to reflect this directive.28 We believe, at this time, that 
no broadcast television network has begun to deliver a dual stream of 
video programming. We seek comment on whether the current dual network 
rule is no longer in the public interest.
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    \25\ 47 CFR 73.658(g).
    \26\ A ``network'' is defined with reference to 47 CFR 
73.3613(a)(1) for this purpose.
    \27\ The Conference Report stated that the Commission was being 
directed to revise its dual network rule ``to permit a television 
station to affiliate with a person or entity that maintains two or 
more networks unless such dual or multiple networks are composed of 
(1) two or more of the four existing networks (ABC, CBS, NBC, FOX) 
or, (2) any of the four existing networks and one of the two 
emerging networks (WBTN, UPN).'' S. Rep. No. 230, 104th Cong., 2d 
Sess. at 163.
    \28\ Order, 11 FCC Rcd 12374 (1996).
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The Remaining Rules

    24. The UHF Television Discount. The national television ownership 
rule states that an entity may own any number of television stations 
(subject to the restrictions of the local ownership rule) so long as 
the combined audience reach of the stations does not exceed 35 percent, 
as measured by the number of television households in their respective 
ADIs. Under our rules, UHF television stations are attributed with 50 
percent of the television households in their ADI market.29 
The Commission has stated that it would review the UHF discount in the 
biennial ownership review.30
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    \29\ 47 CFR 73.3555(e)(2)(i).
    \30\ Notice of Proposed Rule Making in MM Docket Nos. 96-222, 
91-221 and 87-8, 11 FCC Rcd 19949, 19956 (1996).
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    25. The Commission adopted the UHF discount in 1985 due to concerns 
that UHF station signals generally cannot reach as large an audience as 
VHF station signals.31 Since that time we have observed in 
other contexts that this UHF signal disparity has been ameliorated over 
the years.32 This is due in part to improved television 
receiver designs, as well as the fact that many households receive 
broadcast channels via cable rather than by over-the-air transmission. 
When the UHF discount was adopted in 1985, cable passed approximately 
60 percent of all television households 33 and had 
approximately 32 million subscribers.34 Today, the pass rate 
has risen to 97.1 percent with approximately 64.2 million 
subscribers.35 Moreover, the Supreme Court has recently 
upheld the constitutionality of the ``must-carry'' rules which require 
cable systems to carry local television broadcast 
stations.36 Parties have nonetheless urged us to continue 
the UHF discount policy given the significant number of television 
households that do not subscribe to cable.37
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    \31\ See Memorandum Opinion and Order in Gen. Docket No. 83-
1009, 100 FCC 2d 74, 92-94 (1985).
    \32\ See Report and Order in MM Docket No. 94-123, 11 FCC Rcd 
546, 583-86 (1995) (repealing the prime time access rule); Report 
and Order in MM Docket No. 87-68, 3 FCC Rcd 638 (1988), clarified 4 
FCC Rcd 2276 (1989) (eliminating the policy under which applications 
to initiate or improve VHF service were considered contrary to the 
public interest if they threatened adverse economic impact on 
existing or potential UHF stations).
    \33\ Estimate based on data in Television Factbook (Cable and 
Services volume, 1986 ed.), pp. A39 and A44.
    \34\ See 1997 Television and Cable Factbook at F-1.
    \35\ Fourth Annual Report, supra at para. 14-15.
    \36\ Turner Broadcasting Systems., Inc. v. FCC, 117 S. Ct. 1174 
(1997).
    \37\ See Notice of Proposed Rule Making in MM Docket No. 96-222, 
11 FCC Rcd 19952-54 (1996) (summarizing comments on issue of whether 
UHF discount policy should be retained).
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    26. We request comment in this proceeding on whether the UHF 
discount should be retained, modified, or eliminated. In this regard, 
commenters may wish to address whether the discount, at its current 
level, remains appropriate in light of the decreasing disparity between 
VHF and UHF television due to improvements in transmission and 
reception technology, cable carriage of UHF television stations under 
our must-carry rules, and increasing cable penetration. Is there any 
evidence that the current UHF discount provides a competitive advantage 
to networks that own UHF stations? While the audience reach of many 
group owners are unaffected, the reach of several group owners, 
including Fox and Paxson, would exceed the national reach cap were it 
not for the discount. Should we decide that the discount be retained in 
some form for analog television, does it make sense to retain such a 
discount at all once we have transitioned to digital television 
transmission? At that time, we expect broadcast television stations 
will be operating on ``core'' channels, most of which are currently 
allotted to UHF television.38 Finally, if the discount were 
reduced or eliminated, in what manner should group owners that exceed 
the new limits be grandfathered?
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    \38\ See Memorandum Opinion and Order on Reconsideration of the 
Sixth Report and Order in MM Docket No. 87-268, FCC 98-24 (released 
February 23, 1998).
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    27. Daily Newspaper/Broadcast Cross-ownership Rule. The daily 
newspaper/broadcast cross-ownership rule prohibits the common ownership 
of a broadcast station and a daily newspaper in the same 
locale.39 The Commission adopted the rule in 
1975.40 Like all of

[[Page 15358]]

our multiple ownership rules, the newspaper/broadcast cross-ownership 
rule rests on the twin goals of promoting diversity and economic 
competition.41 The Commission determined that, as a general 
rule, granting a broadcast license to an entity in the same community 
as that in which the entity also publishes a newspaper would harm 
diversity.42 Although the Commission, in adopting the rule, 
noted its expectation that there could be meritorious waiver requests, 
it set forth very stringent waiver criteria.43 As a result, 
only two cases, both involving television/newspaper combinations, have 
been found to warrant permanent waiver of the rule.44
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    \39\ The rule provides that: 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. 47 CFR 73.3555(d).
    \40\ Multiple Ownership of Standard, FM, and Television 
Broadcast Stations, Second Report and Order, 50 FCC 2d 1046 (1975) 
(``Second Report and Order''), recon., 53 FCC 2d 589 (1975) 
(``Recon. Order''), aff'd sub nom. Federal Communications Commission 
v. National Citizens Committee for Broadcasting, supra. The 
provisions of 47 CFR 73.3555 do not apply to noncommercial 
educational FM and TV stations. See 47 CFR 73.3555(f).
    \41\ Second Report and Order, supra at 1074.
    \42\ Id. at 1075.
    \43\ The criteria are: 1) inability to sell the station; 2) the 
only possibility of the station's sale would be at an artificially 
reduced price; 3) separate ownership and operation of the newspaper 
and the broadcast station could not be supported in the locality; 
and 4) the purposes of the rule would be disserved by its 
application or application of the rule would be unduly harsh.
    \44\ Field Communications Corp., 65 FCC 2d 959 (1977); Fox 
Television Stations Inc., 8 FCC Rcd 5341, 5349 (1993); aff'd sub 
nom. Metropolitan Council of NAACP Branches v. FCC, 46 F.3d 1154 
(D.C. Cir. 1995). In both cases, the combination had previously been 
owned by the same or substantially the same parties.
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    28. In 1996, the Commission opened an inquiry to consider amending 
the waiver policy with respect to newspaper/radio 
combinations.45 Since the scope of this biennial ownership 
review encompasses the issues raised in the outstanding NOI, we will 
place the comments we have already received into the record of this 
review and take them into account in our review of the broader rule.
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    \45\ See Notice of Inquiry in MM Docket No. 96-197, supra.
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    29. Additionally, we note that a Petition for Rulemaking seeking 
elimination of the rule in its entirety was filed by the Newspaper 
Association of America (``NAA'') on April 28, 1997.46 We 
will place this filing in the record of this proceeding and invite 
comment on the merits of the petition.
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    \46\ See Newspaper Association of America, Petition for 
Rulemaking in the matter of amendment of section 73.3555 of the 
Commission's Rules to eliminate restrictions on newspaper/broadcast 
station cross-ownership (April 28, 1997) (``NAA Petition'').
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    30. Generally, the NAA Petition argues that in adopting the rule 
there never was a record of evidence that cross-owned stations engaged 
in anti-competitive practices. NAA further argues that, whatever the 
FCC's original reasons for the rule were, ``[i]n the abundantly diverse 
and highly competitive mass media marketplace of the late 1990s, 
maintenance of these selective cross-ownership restrictions is 
unnecessary, discriminatory, and unjustifiable.'' 47 NAA 
points to relaxation in other Commission ownership rules 48 
and argues that the newspaper/broadcast cross-ownership rule unfairly 
singles out newspaper publishers, denying them the ability to realize 
efficiencies and synergies while leaving their competitors free to do 
so.49 NAA also argues that relaxation of the newspaper/
broadcast cross-ownership rule will help preserve newspapers and 
broadcast stations as viable media outlets and enhance diversity. 
Finally, NAA asserts that the rule is inconsistent with the First 
Amendment and that courts today would require a far stronger showing 
than was made in 1975 to support such a direct limitation on the free 
speech rights of a particular class of citizens.'' 50
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    \47\ Id. at 16.
    \48\ Id. at 40.
    \49\ Id. at 38 et seq.
    \50\ NAA Petition at 46.
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    31. A number of parties, however, have argued for the continuation 
of the rule. Supporters of the rule commenting in the Notice of Inquiry 
on our newspaper/radio waiver policy contend that daily newspapers 
often dominate the local advertising market and to give a party with 
such dominance a broadcast outlet would allow it to exercise market 
power with respect to the local advertising market.51 
Supporters also contend that newspaper/broadcast combinations would 
give a single entity too much of a voice with respect to forming 
opinion on public issues. The new media pointed to by opponents of the 
rule, they state, do not add significant local viewpoints, are not 
locally based, and do not provide news or information on local 
issues.52 Although supporters of the rule agree that cable 
television and the Internet have the potential to facilitate debate on 
local issues, they dispute that they yet serve that purpose to any 
significant degree and argue that these media are costly and do not 
reach large segments of the community.53
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    \51\ See Comments of David E. Hoxeng d/b/a ADX Communications in 
MM Docket No. 96-197 at 2. Hoxeng provides as an example San 
Antonio, TX, where, he states, the cost-per-thousand to newspaper 
advertisers skyrocketed following the buyout and closure of one San 
Antonio daily by the other. Id. at 2-3. See also Comments of 
Tennessee Association of Broadcasters filed in MM Docket No. 96-197 
at 5.
    \52\ See Joint Comments of Black Citizens for a Fair Media et 
al. filed in MM Docket No. 96-197 at 18-19.
    \53\ Id.
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    32. We invite comment on these competing positions with respect to 
the newspaper cross-ownership restriction. We specifically ask 
commenters to address whether the rule should be retained, modified or 
eliminated.
    33. Competitive Effects on the Market for Delivered Programming. 
Since newspapers do not operate in the market for delivered video or 
audio programming, allowing cross-ownership between television and 
newspapers in a local market would not appear to harm competition in 
the market for delivered video or video programming. We invite comment 
on this view.
    34. Competitive Effects on the Market for Advertising. In the TV 
Ownership Further Notice we tentatively considered that the local 
advertising market includes video advertising (broadcast and cable), 
radio advertising and newspaper advertising.54 Total local 
advertising revenue for radio, television, newspaper, and cable was $68 
billion in 1996. Local radio accounted for $12 billion (17.2 percent of 
the total), television accounted for $21 billion (30.3 percent), 
newspapers accounted for $34 billion (49.7 percent), and cable 
accounted for $2 billion (2.9 percent).55 Permitting the 
owner of a broadcast TV or radio station to own a newspaper, or vice 
versa, could give the company the market power to raise local radio, 
television, and/or newspaper advertising rates, depending on the market 
share of the combined entity. We invite comment and evidence on this 
issue, and on the levels of local advertising share that might give 
rise to competitive concern. Commenters may also wish to comment on 
NAA's views concerning competition in the advertising market. While 
newspaper local advertising revenue may be as large as combined 
television and radio local advertising revenues, NAA argues that it 
includes newspaper classified advertisements, a market in which 
broadcast stations do not compete with newspapers.
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    \54\ Allowing such joint ownership should have no effect on 
competition in the national advertising market because of 
differences in the geographic dimensions of this market.
    \55\ ''Estimated Annual U.S. Advertising Expenditures 1990--
1996,'' Prepared for Advertising Age by Robert J. Coen, McCann-
Erickson.
---------------------------------------------------------------------------

    35. Competitive Effects on the Program Production Market. 
Newspapers, being a print medium, are not a participant in the video 
and audio program production markets. Thus, relaxing this rule would 
not appear to

[[Page 15359]]

harm competition in these supply markets. We invite comment on this 
view.
    36. Other Economic Effects. Broadcaster and newspaper interests 
have long made the argument that the quality of news and public affairs 
programming to the public, a core concern of the Commission, could be 
enhanced if broadcasters could share in the expertise of a newspaper's 
operations. We seek comment on this issue. Could the same beneficial 
results be achieved through non-attributable joint ventures? Studies 
documenting and comparing the news and public affairs programming of 
existing newspaper/broadcast combinations with the news and public 
affairs programming of broadcast facilities that are not owned by a 
newspaper in the same geographic market would be particularly 
informative.
    37. Similar claims have been made with respect to efficiencies 
realized as a result of the combination's advertising sales force. 
While any realized reduction in expenses could make the joint 
enterprise more economically viable than the separate operations were 
before the combination took place, we are most interested in whether 
such efficiencies would produce benefits for broadcast audiences and 
advertisers. We seek comment on this view.
    38. Effects on Diversity. The newspaper/broadcast cross-ownership 
rule is intended to promote media diversity on the local level. The 
maintenance of such diversity has been a central Commission objective 
since its establishment. However, there have been changes since the 
rule was adopted. For example, the Commission now allows some cross-
ownership between television and radio stations in the same local 
market and Congress has directed us to relax our local radio ownership 
limitations. In addition, there has been an increase in the number of 
radio and TV stations and local newspapers. We must examine the rule in 
this context, but with a full recognition of the importance of 
diversity in local markets. Clearly, combined operations reduce the 
number of separately owned outlets. We seek comment on the impact of 
this reduction on the public interest. We also seek comment on whether 
and to what extent, newspapers and broadcast stations under common 
ownership express contrasting points of view or cover each other in a 
critical manner.
    39. In this regard, we point out that television, newspapers, and 
radio continue to be America's major source of news.56 The 
Roper survey found that more than two-thirds of Americans usually get 
their news from television, and 37 percent from newspapers. 
57 The survey indicated that Americans also rely on radio as 
a news source, but to a lesser extent than television and newspapers. 
We consequently wish to proceed cautiously in this area and seek 
comment on how the public's reliance on these media for news would be 
affected if we were to relax this rule.
---------------------------------------------------------------------------

    \56\ America's Watching: Public Attitudes Toward Television 
1997, Roper Starch Worldwide Inc.
    \57\ Respondents were permitted to name more than one news 
source.
---------------------------------------------------------------------------

    40. The combination of a large daily newspaper and a large 
broadcast station could have a significant impact on diversity. We seek 
comment on whether the impact on diversity depends on the relative size 
of the newspaper and broadcast facility involved in a potential merger. 
Commenters should also address NAA's argument that various pay video 
delivery services and other informational media, together with an 
increase in broadcast stations and weekly newspapers, sufficient to 
assure diversity in the absence of the rule? Or, as argued by opponents 
of relaxation of the rule, are such other informational media too 
limited in availability or use, or do such media provide insufficient 
information on issues of local concern to offset the loss of diversity 
on the local level that would accompany elimination or relaxation of 
the newspaper/broadcast cross-ownership rule? We also seek comment on 
how diversity is served in suburban markets where the appropriate 
outlets to be examined may include metropolitan television and radio 
stations and community or suburban newspapers rather than newspapers in 
the major city.
    41. Cable/Television Cross-ownership Rule. Section 76.501(a) of the 
Commission's Rules effectively prohibits common ownership of a 
broadcast television station and cable system in the same local 
community.58 The Telecom Act eliminated a similar statutory 
prohibition.59
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    \58\ The rule prohibits a cable operator from carrying any 
broadcast television station if it directly or indirectly owns, 
operates, controls, or has an interest in a television broadcast 
station whose predicted Grade B signal contour overlaps any part of 
the area within which its cable system is serving subscribers.
    \59\ See Subsection 202(i) of the Telecom Act.
---------------------------------------------------------------------------

    42. The rule was adopted in 1970 in order to further the 
Commission's policy of promoting diversity in local mass communications 
media.60 In adopting the rule, the Commission made clear 
that it was avoiding any ban on joint ownership of a television 
broadcast station and cable system not located in the same area. ``It 
is not our desire to keep television broadcasters out of the CATV 
industry, but to avoid over-concentrations of media control . . . we 
should have no objection to exchange of CATV systems among broadcasters 
which would maintain their involvement in the CATV industry while 
eliminating local cross-ownerships.'' 61
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    \60\ Amendment of Part 74, Subpart K, of the Commission's Rules 
and Regulations Relative to Community Antenna Television Systems; 
and Inquiry Into the Development of Communications Technology and 
Services to Formulate Regulatory Policy and Rulemaking and/or 
Legislative Proposals, Second Report and Order, in Docket No. 18397, 
23 F.C.C. 2d 816, 820 (1970).
    \61\ Id. at 821.
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    43. This is the first time since adopting the cable/television 
cross-ownership rule that the Commission has reviewed the rule. Indeed, 
since 1984, the rule was required by statute.62 When the 
Telecom Act eliminated the statutory provision, the Conference Report 
clarified that repeal of the prohibition should not prejudge the 
outcome of any review by the Commission of its rules regarding cable/
broadcast cross-ownership.63 The Telecom Act also eliminated 
our rule prohibiting broadcast television networks from owning or 
controlling cable systems.64 While broadcast television 
networks are now statutorily permitted to buy cable systems, they are 
still generally precluded from doing so on any significant basis by the 
cable/broadcast cross-ownership rule, because the networks are also 
broadcast television licensees. We seek comment on whether this rule 
should be retained, modified or eliminated.
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    \62\ The Cable Communications Policy Act of 1984 added section 
613 of the Communications Act of 1934, as amended (47 U.S.C. 533). 
Section 613(a)(1) of the Act provided that ``It shall be unlawful 
for any person to be a cable operator if such person, directly or 
through 1 or more affiliates, owns or controls, the licensee of a 
television broadcast station and the predicted grade B contour of 
such station covers any portion of the community served by such 
operator's cable system.'' That provision was eliminated by section 
202(i) of the Telecom Act.
    \63\ House Rep. No. 458, 104th Cong., 2d Sess. at 164.
    \64\ See Subsection 202(f) of the Telecom Act.
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    44. Effects on the Market for Delivered Programming. Television 
stations compete in the market for delivered video programming with 
cable system operators, wireless cable operators and possibly with DBS 
operators serving their ``local'' market. We note that in its Fourth 
Annual Report on the status of competition in the market for the 
delivery of multichannel video programming, the Commission stated that 
``local markets for the delivery of

[[Page 15360]]

video programming generally remain highly concentrated and continue to 
be characterized by some barriers to entry and expansion by potential 
competitors to incumbent cable systems.'' 65 While the 
ability of the broadcast spectrum to compete as a transmission medium 
with cable is effectively limited by the amount of broadcast spectrum 
and channels that are assigned to television markets, the Report notes 
that DTV has the potential to allow the broadcasters to become more 
effective competitors with cable companies in the multichannel video 
programming distribution market. 66
---------------------------------------------------------------------------

    \65\ Fourth Annual Report, supra at para. 11. Section 628(g) of 
the Communications Act of 1934, as amended, requires the Commission 
to report annually to Congress on the status of competition in the 
market for the delivery of video programming. Congress imposed this 
annual reporting requirement as one means of obtaining information 
on the competitive status of markets for the delivery of 
multichannel video programming delivery that would aid both Congress 
and the Commission in determining when there was competition 
sufficient to reduce or eliminate many of the regulatory restraints 
imposed on the cable industry.
    \66\ Fourth Annual Report, supra at para. 95.
---------------------------------------------------------------------------

    45. We seek comment on the relevance of our conclusions in the 
Fourth Annual Report on our consideration of competitors to broadcast 
television. We seek comment on whether these changed market 
circumstances render our rule unnecessary. Also, we seek comment on the 
possible effects that repeal or relaxation of the cable/television 
cross-ownership rule may have on the market for delivered programming 
in particular. Would common ownership of a cable system and a 
television station increase or diminish the program choices, or the 
preferred programs, available to audiences? Would repeal or relaxation 
raise competition concerns in this market? Could relaxation of the rule 
result in public interest benefits? Could the same beneficial results 
be achieved through non-attributable joint ventures? Should a 
distinction be made in judging the effect of this rule on local versus 
national programming?
    46. Effects on the Market for Advertising. Allowing joint ownership 
of a television station and a cable system in a local market might give 
the joint owner the economic power to raise its advertising rates 
within the local service area if, by virtue of the combination, the 
local market became concentrated.67 Evidence on whether 
significant market power in the local advertising market already exists 
is mixed. As we stated earlier, total local advertising for these media 
was $68.5 billion in 1996. Local cable advertising revenues were small 
($2.0 billion, 2.9 percent of total local advertising) when compared to 
local commercial broadcast television station advertising revenues 
($20.7 billion, 30.3 percent of total local advertising), but they are 
increasing in size and importance.68 Radio local advertising 
revenues accounted for $11.7 billion (17.2 percent of total local 
advertising) and newspaper accounted for $34 billion (49.7 percent of 
total local advertising). Prior studies have found mixed evidence 
regarding the impact of cable on broadcast TV station advertising 
revenues.69 Thus, at this time, it is not clear whether 
cable system operators offer effective competition to broadcast station 
operators in providing local advertising.70
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    \67\ Allowing such joint ownership should have no effect on 
competition in the national advertising market because of 
differences in the geographic dimensions of this market.
    \68\ ``Estimated Annual U.S. Advertising expenditures 1990-
1996,'' Prepared for Advertising Age by Robert J. Coen, McCann-
Erickson. See also Bernstein Research, Network Television Primer, 
February 1998 at 6 (showing advertising growth rates for cable 
networks and television).
    \69\ TV Ownership Further Notice, supra at 3571.
    \70\ Id.
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    47. When considering advertising substitutes, we recognize that 
while many firms use a mix of video, audio, print, and other media to 
advertise their products and services, some firms may rely on video 
advertising almost exclusively and are, therefore, most affected by any 
market power that might be created by a modification to this rule. We 
have previously noted that it is not clear how substitutable radio and 
newspaper local advertising is for broadcast television local 
advertising.71 We seek information and data about the 
appropriate scope of the product and geographic advertising market 
within which television stations and cable systems compete. Statistical 
evidence supporting fact-based analysis on the substitutability of 
these media in the local advertising market will especially be welcome.
---------------------------------------------------------------------------

    \71\ Id.
---------------------------------------------------------------------------

    48. Effects on the Program Production Markets. We specifically seek 
comment on whether the cable/broadcast television rule is no longer 
necessary in light of the current state of the program production 
market. The program market could be affected if Commission modification 
or elimination of the cable/television cross-ownership rule permitted a 
cable/television combination to exercise market power in the purchase 
of video programming for delivery in the local market. We seek comment 
on whether cable/broadcast television combinations could exercise 
monopsony power--i.e., the ability of the cable/television combination 
to artificially restrict the price paid for programming. We solicit 
evidence on the potential market power in the program production market 
if we were to eliminate or relax the cable/television cross-ownership 
rule. Specifically, we seek comment on whether other broadcast stations 
and alternative providers of delivered video programming (e.g., MMDS 
and DBS) may mitigate a cable/television combination's potential for 
monopsony power by providing program producers with additional local 
outlets for their product. We ask commenters to address whether our 
analysis of this issue is affected by whether the programming in 
question is network-provided programming, syndicated programming sold 
on a national basis, or programming produced for particular local 
markets. We also seek comment on the potential for a cable/television 
combination to deny alternative providers of delivered video 
programming access to the programming of the television station 
involved in the cable/television combination. On a related matter, we 
seek comment on whether our channel positioning and must-carry rules 
provide sufficient protection to ensure that if a cable company owns a 
local television station, the cable company could not discriminate in 
favor of its owned television station.
    49. Other Economic Effects. Allowing cable/television cross-
ownership within a local market may permit an entity to realize 
economies of scale, reducing the costs of operations. Joint ownership 
may permit cost-sharing in administrative and overhead expenses, 
sharing of personnel, joint advertising sales, and the pooling of 
resources for local program production (such as news and public affairs 
programming). The cost savings from these economies could then be used 
to provide better programming to the public, better coverage of local 
issues and possibly lower the cost of advertising and/or increase the 
quality of service available to advertisers. We seek evidence from 
commenters of the existence and magnitude of such economies and whether 
they can be reached through alternatives to common ownership, e.g., 
joint ventures. In addition, we ask commenters to describe how likely 
such economies are to be passed on to audiences and advertisers.
    50. Effects on Diversity. Our concern with diversity is most acute 
with respect to local ownership issues. Both television and competing 
video outlets are viewed at the local level. We ask

[[Page 15361]]

commenters to address the impact on diversity if we were to modify or 
eliminate the cable/television cross-ownership rule. Would any and all 
cable/television combinations lead to greater harm to diversity than 
other ownership combinations that Congress or the Commission permit? 
Since cable and broadcast television may be the closest substitutes in 
the video marketplace, should the Commission be especially vigilant in 
promoting diversity in the context of this rule?
    51. Experimental Broadcast Stations. Subpart A of part 74 of the 
Commission's Rules 72 provides for the licensing of 
experimental broadcast stations. These are stations ``licensed for 
experimental or developmental transmissions of radio telephony, 
television, facsimile, or other types of telecommunication services 
intended for reception and use by the general public.'' 73 A 
multiple ownership rule pertaining to experimental broadcast stations 
prohibits any person (or persons under common control) from controlling 
directly or indirectly two or more experimental broadcast stations 
unless it can be shown that the research program requires the licensing 
of two or more separate stations.74
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    \72\ 47 CFR 74.101--74.184.
    \73\ 47 CFR 74.101.
    \74\ 47 CFR 74.134.
---------------------------------------------------------------------------

    52. Because this is an ownership rule pertaining to a type of 
broadcast station, we believe that section 202(h) of the Telecom Act 
requires the Commission to review the rule as part of its biennial 
broadcast ownership review. However, experimental broadcast stations 
generally are prohibited from providing regular program 
service.75 Accordingly, it does not appear that they 
significantly participate in competitive or diversity markets. 
Nevertheless, we seek comment on whether this rule remains in the 
public interest.
---------------------------------------------------------------------------

    \75\ 47 CFR 74.182.
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IV. Waivers

    53. As we begin this first biennial review of our broadcast 
ownership rules, we believe it is important to review and restate our 
approach to granting conditional waivers of broadcast ownership rules 
which are under active consideration by the Commission in a rulemaking 
or inquiry proceeding. Generally, we have not granted conditional 
waivers of a broadcast ownership rule simply on the grounds that the 
rule was the subject of an ongoing rulemaking or inquiry proceeding, 
believing that such a blanket approach would make our enforcement 
processes unworkable and would subject our regulatees to undesirable 
levels of uncertainty. Perhaps more importantly, such an approach would 
necessarily assume that compliance with the subject rule during the 
pendency of its review was not in the public interest, an assumption 
which would ordinarily lack a substantial record basis at the notice of 
inquiry or notice of proposed rulemaking stage of a proceeding. 
Nonetheless, there are limited areas of our broadcast ownership waiver 
practice where we have consciously departed from this general approach.
    54. For example, in certain cases in recent years the Commission 
has granted interim waivers or extensions where a pending proceeding is 
examining the rule in question, the Commission concludes that the 
application before it falls within the scope of the proposals in the 
proceeding, and a grant of an interim waiver would be consistent with 
the Commission's goals of competition and diversity. This is most 
likely to occur where protracted rulemaking proceedings are involved 
and where a substantial record exists on which to base a preliminary 
inclination to relax or eliminate a rule. An example of this situation 
involves the TV duopoly rule geographic market standard currently under 
review in our local ownership rulemaking.76
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    \76\ See Second Further Notice in MM Docket No. 91-221 & 87-7, 
11 FCC Rcd 21655, 21681 (1996) (Commission states that granting 
waivers satisfying the proposed standard would not adversely affect 
its competition and diversity goals in the interim).
---------------------------------------------------------------------------

    55. In contrast to those situations, in our first biennial review 
of our broadcast ownership rules, we do not believe it appropriate to 
provide for conditional waiver of any of the ownership rules under 
review in this proceeding solely because of the pendency of this 
review. Here, for example, we do not have a protracted proceeding or 
substantial record on any of these rules that leads us to initial 
conclusions about any specific proposals to modify or eliminate any of 
the rules at issue here. In addition, we do not have substantial waiver 
experience suggesting an appropriate course of action regarding the 
rules under review herein. We retain, of course, both the right and the 
obligation to review any request for waiver of our rules based upon the 
specific facts in a particular case. What is important is whether the 
public interest would be served by a grant of the waiver.77
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    \77\ See WAIT Radio v. FCC, 418 F.2d 1153, 1157 (D.C. Cir. 
1969).
---------------------------------------------------------------------------

    56. We are aware that in at least one case a conditional waiver of 
the radio-newspaper cross-ownership rule has been granted based upon 
the pendency of a proceeding.78 To the extent that this 
decision suggests that the pendency of a proceeding by itself would be 
sufficient basis for a waiver, it is superseded, although as a matter 
of equity we do not alter its governance of the situation to which it 
was addressed.79
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    \78\ Letter to Joel Rosenbloom from Chief, Mass Media Bureau 
concerning ABC/Capital Cities-Disney Company merger, dated October 
24, 1996, p. 2.
    \79\ We note that the staff, on March 6, 1998, granted an 
extension of the Tribune Company's temporary waiver to commonly own 
a television station and newspaper in the Miami, Florida market. 
Stockholders of Renaissance Communications Corporation, DA 98-456 
(MMB March 6, 1998). That action was based on special circumstances 
and does not, in our view, stand in contradiction to the conditional 
waiver standard we articulate here.
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V. Conclusion

    57. By this Notice, we solicit comments on these and any other 
issues pertinent to our review of our broadcast ownership and other 
rules. Commenters should frame their discussion and analysis in a 
manner consistent with our framework for addressing our historic 
competition and diversity concerns. We ask commenters to provide data 
and evidence to support their positions so as to facilitate objective 
analysis of the issues raised.

Administrative Matters

    58. Pursuant to applicable procedures set forth in sections 1.415 
and 1.419 of the Commission's Rules, 47 CFR 1.415 and 1.419, interested 
parties may file comments on or before May 22, 1998, and reply comments 
on or before June 22, 1998. To file formally in this proceeding, you 
must file an original plus six copies of all comments, reply comments, 
and supporting comments. If you want each Commissioner to receive a 
personal copy of your comments, you must file an original plus eleven 
copies. You should send comments and reply comments to Office of the 
Secretary, Federal Communications Commission, 1919 M Street, N.W., 
Washington, D.C. 20554. Comments and reply comments will be available 
for public inspection during regular business hours in the FCC 
Reference Center (Room 239), 1919 M Street, N.W., Washington, D.C. 
20554. Copies may be obtained through the Commission's contract copier, 
International Transcription Service, Inc., 1231 20th Street, N.W., 
Washington, DC 20036. ITS can also be reached at (202)857-3800 or by 
facsimile at (202)857-3805.
    59. Subject to the provisions of 47 CFR 1.1203 concerning 
``Sunshine

[[Page 15362]]

Period'' prohibitions, this proceeding is exempt from ex parte 
restraints and disclosure requirements pursuant to 47 CFR 1.1204(b)(1).
    60. Accordingly, it is ordered that pursuant to the authority 
contained in sections 4, 11, 303, and 403 of the Communications Act of 
1934, as amended, 47 U.S.C. 154, 161, 303, and 403, and 202(h) of the 
Telecommunications Act of 1996, this Notice of Inquiry is adopted.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-8276 Filed 3-30-98; 8:45 am]
BILLING CODE 6712-01-P