[Federal Register Volume 66, Number 238 (Tuesday, December 11, 2001)]
[Proposed Rules]
[Pages 63997-64000]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-30527]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MM Docket No. 01-317 and 00-244; FCC 01-329]
RIN 4217


Definition of Radio Markets

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: This document proposes changes to local ownership rules and 
policies concerning multiple ownership of radio broadcasting stations. 
The Commission examines the effect our current rules has had on the 
public and seeks comment to better serve our communities. This action 
is also intended to consider possible changes to our current local 
market radio ownership rules and policies in accordance with the 
Telecommunications Act of 1996. Because of the similarity of the issues 
presented in Multiple Ownership of Radio Broadcast Stations in Local 
Markets to those in the Matter of Definition of Radio Markets, the two 
actions were, in effect, consolidated.

[[Page 63998]]


DATES: Comments are due February 11, 2002. Reply comments are due March 
11, 2002.

ADDRESSES: Federal Communications Commission, 445 12th Street, SW., 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Joshi Nandan, Office of General 
Counsel, (202) 418-1755.

SUPPLEMENTARY INFORMATION: This is a synopsis of the Further Notice of 
Proposed Rule Making (``FNPRM'') in MM Docket No. 00-244, FCC 01-329, 
adopted November 8, 2001, and released November 9, 2001. The complete 
text of this FNPRM is available for inspection and copying during 
normal business hours in the FCC Reference Center, Room CY-A257, 445 
12th Street, SW., Washington, DC and may also be purchased from the 
Commission's copy contractor, Qualex International, Portals II, 445 
12th Street SW., Room CY-B-402, Washington, DC 20554, telephone (202) 
863-2893, facsimile (202) 863-2898, or via email [email protected]. 
This document is also available in alternative formats (computer 
diskette, large print, audio cassette, and Braille). Persons who need 
documents in such formats may contact Martha Contee at (202) 4810-0260, 
TTY (202) 418-2555, or [email protected]. The FNPRM can be found on the 
Internet at the Commission's website: http://www.fcc.gov.
    1. The issues presented herein, and the substance of this FNPRM are 
identical to those presented in the Notice of Proposed Rule Making, in 
the Matter of Rules and Policy Concerning the Multiple Ownership of 
Radio Broadcast Stations in Local Markets (MM Docket No. 00-317) 
published elsewhere in this issue of the Federal Register.
    2. Comments and Reply Comments. Pursuant to sections 1.415 and 
1.419 of the Commission's rules, interested parties may file. Comments 
are due February 11, 2002. Reply comments are due March 11, 2002. 
Comments may be filed using the Commission's Electronic Comment Filing 
System (ECFS) or by filing paper copies. See Electronic Filing of 
Documents in Rulemaking Proceedings, 63 FR 24121, May 1, 1998.
    3. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to http://www.fcc.gov/e-file/ecfs.html. 
Generally, only one copy of an electronic submission must be filed. If 
multiple docket or rulemaking numbers appear in the caption of this 
proceeding, however, commenters must transmit one electronic copy of 
the comments to each docket or rulemaking number referenced in the 
caption. In completing the transmittal screen, commenters should 
include their full name, Postal Service mailing address, and the 
applicable docket or rulemaking number. Parties may also submit an 
electronic comment by Internet e-mail. To get filing instructions for 
e-mail comments, commenters should send an e-mail to [email protected], and 
should include the following words in the body of the message, ``get 
form your e-mail address.'' A sample form and directions will be sent 
in reply. Parties who choose to file by paper must file an original and 
four copies of each filing. If more than one docket or rulemaking 
number appear in the caption of this proceeding, commenters must submit 
two additional copies for each additional docket or rulemaking number. 
All filings must be sent to the Commission's Secretary, Magalie Roman 
Salas, Office of the Secretary, Federal Communications Commission, 445 
Twelfth Street, SW., TW-A325, Washington, DC 20554.
    4. Parties who choose to file by paper should also submit their 
comments on diskette. These diskettes should be submitted to: Wanda 
Hardy, 445 Twelfth Street, SW., Room, 2-C207, Washington, DC 20554. 
Such a submission should be on a 3.5 inch diskette formatted in an IBM 
compatible format using WordPerfect 5.1 for Windows or compatible 
software. The diskette should be accompanied by a cover letter and 
should be submitted in ``read only'' mode. The diskette should be 
clearly labeled with the commenter's name, proceeding (including the 
docket number in this case, MM Docket Nos. 01-317, 00-244, type of 
pleading (comment or reply comment), date of submission, and the name 
of the electronic file on the diskette. The label should also include 
the following phrase ``Disk Copy--Not an Original.'' Each diskette 
should contain only one party's pleadings, preferably in a single 
electronic file. In addition, commenters must send diskette copies to 
the Commission's copy contractor, Qualex International, Portals II, 445 
12th Street, SW., Room CY-B402, Washington, DC 20554.
    5. Comments and reply comments will be available for public 
inspection during regular business hours in the FCC Reference Center, 
Federal Communications Commission, 445 Twelfth Street, SW., CY-A257, 
Washington, DC 20554. Persons with disabilities who need assistance in 
the FCC Reference Center may contact Bill Cline at (202) 418-0270, 
(202) 418-2555 TTY, or [email protected]. Comments and reply comments also 
will be available electronically at the Commission's Disabilities 
Issues Task Force web site: www.fcc.gov/dtf. Comments and reply 
comments are available electronically in ASCII text, Word 97, and Adobe 
Acrobat.
    6. Ex Parte Rules. This is a permit-but-disclose notice and comment 
proceeding. Ex parte presentations are permitted except during the 
Sunshine Agenda period, provided they are disclosed as provided in the 
Commission's Rules. See generally sections 1.1202, 1.1203, and 
1.1206(a).
    7. Initial Regulatory Flexibility Analysis (``IRFA''). As required 
by section 603 of the Regulatory Flexibility Act (``RFA''), the 
Commission has prepared an IRFA of the possible significant economic 
impact on small entities of the proposals contained in this FNPRM. 
Written public comments are requested on the IRFA. In order to fulfill 
the mandate of the Contract with America Advancement Act of 1996 
regarding the Final Regulatory Flexibility Analysis, we ask a number of 
questions in our IRFA regarding the prevalence of small businesses in 
the radio broadcasting industry. Comments on the IRFA must be filed in 
accordance with the same filing deadlines as comments on the FNPRM, but 
they must have a distinct heading designating them as responses to the 
IRFA. The Secretary shall send a copy of this FNPRM, including the 
IRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration (``SBA'') in accordance with section 603(a) of the RFA, 
Public Law 96-354, 94 Stat. 1164, 5 U.S.C. 601 et seq. (1981), as 
amended.
    8. Authority. This FNPRM is issued pursuant to authority contained 
in sections 4(i), 303, and 307 of the Communications Act of 1934, as 
amended, 47 U.S.C. 154(i), 303, and 307.
    9. Pursuant to the authority contained in sections 1, 2(a), 4(i), 
303, 307, 309, and 310 of the Communications Act, as amended, 47 U.S.C. 
151, 152(a), 154(i), 303, 307, 309, and 310 this FNPRM are adopted.
    10. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this FNPRM, including the 
IRFA, to the Chief Counsel for Advocacy of the SBA.

Initial Regulatory Flexibility Analysis

    11. As required by the Regulatory Flexibility Act of 1980, as 
amended, the Commission has prepared this present IRFA of the possible 
significant economic impact on a substantial number of small entities 
by the policies and rules proposed in this FNPRM. Written public 
comments are requested on this IRFA. Comments must be identified as 
responses to the IRFA and

[[Page 63999]]

must be filed by the deadlines for comments on the FNPRM. The 
Commission will send a copy of the FNPRM, including this IRFA, to the 
Chief Counsel for Advocacy of SBA. See 5 U.S.C. 603(a). In addition, 
the FNPRM and IRFA (or summaries thereof) will be published in the 
Federal Register.

Need for, and Objectives of, the Proposed Rules

    12. Application to and consent by the Commission are required under 
section 310 of the Communications Act before the sale of any licensed 
radio broadcast station may be consummated. The Commission may grant 
its consent only if it determines that ``the public interest, 
convenience and necessity will be served thereby.'' 47 U.S.C. 310(d). 
The effects of a proposed transaction on the diversity of voices and 
economic competition in a given market have long been core 
considerations in making this public interest determination. The 
Commission's concern for diversity and competition in broadcast markets 
has prompted us to adopt and maintain structural ownership rules 
intended to vindicate these interests. Until recently, these ownership 
rules have been sufficiently strict that we have not been presented 
with proposed transactions that comply with the ownership rules but 
nonetheless present economic concentration issues. The 
Telecommunications Act of 1996, however, substantially relaxed the 
Commission's local radio ownership rules. Heretofore, the Commission's 
radio ownership rules have been based strictly on the number of 
stations proposed for common ownership, without regard to the power or 
dominance of the stations that are being combined. This was not a 
problem under the former Commission rules which strictly circumscribed 
the number of radio stations that could be commonly owned in a local 
market. Now, however, under the new rules, which allow greater numbers 
of radio stations to be commonly owned in local markets, the Commission 
has encountered sales applications that propose transactions which 
comply with the numerical station limits but which result in 
substantial economic concentration in the relevant economic markets. In 
such cases, the Commission ``has an independent obligation to consider 
whether a proposed pattern of radio ownership that complies with the 
local ownership limits would otherwise have an adverse competitive 
effect in a particular radio market and thus, would be inconsistent 
with the public interest. 47 U.S.C. 309(a) (requiring the Commission to 
make a determination that the transfer or assignment of a broadcast 
license would be in the public interest).'' Accordingly, we are 
adopting this FNPRM to consider possible changes to our local radio 
ownership rules and policies.

Legal Basis

    13. This FNPRM is adopted pursuant to sections 1, 2(a), 4(i), 303, 
307, 309, and 310, of the Communications Act, 47 U.S.C. 151, 152(a), 
154(i), 303, 307, 309, and 310.

Description and Estimate of the Number of Small Entities To Which the 
Proposed Rules Will Apply

    14. The RFA directs agencies to provide a description of, and, 
where feasible, an estimate of the number of small entities that may be 
affected by the proposed rules, if adopted. The RFA defines the term 
``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction. In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one which: (1) is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the SBA.
    15. Pursuant to 5 U.S.C. 601(3), the statutory definition of a 
small business applies ``unless an agency after consultation with the 
Office of Advocacy of the SBA and after opportunity for public comment, 
establishes one or more definitions of such term which are appropriate 
to the activities of the agency and publishes such definition(s) in the 
Federal Register.'' A ``small organization'' is generally ``any not-
for-profit enterprise which is independently owned and operated and is 
not dominant in its field.'' Nationwide, as of 1992, there were 
approximately 275,801 small organizations. ``Small governmental 
jurisdiction'' generally means ``governments of cities, counties, 
towns, townships, villages, school districts, or special districts with 
a population of less than 50,000.'' As of 1992, there were 
approximately 85,006 such jurisdictions in the United States. This 
number includes 38,978 counties, cities, and towns; of these, 37,566, 
or 96 percent, have populations of fewer than 50,000. Thus, of the 
85,006 governmental entities, we estimate that 81,600 (91 percent) are 
small entities.
    16. The SBA defines a radio broadcasting station that has $5 
million or less in annual receipts as a small business. A radio 
broadcasting station is an establishment primarily engaged in 
broadcasting aural programs by radio to the public. Included in this 
industry are commercial, religious, educational, and other radio 
stations. Radio broadcasting stations, which primarily are engaged in 
radio broadcasting and which produce radio program materials, are 
similarly included. However, radio stations which are separate 
establishments and are primarily engaged in producing radio program 
material are classified under another NAICS code. The 1992 Census 
indicates that 96 percent (5,861 of 6,127) of radio station 
establishments produced less than $5 million in revenue in 1992. 
Official Commission records indicate that 11,334 individual radio 
stations were operating in 1992. As of June 30, 2001, Commission 
records indicate that 12,932 radio stations (both commercial and 
noncommercial) were operating of which 2,216 were noncommercial 
educational FM radio stations. Applying the 1992 percentage of station 
establishments producing less than $5 million in revenue (i.e., 96 
percent) to the number of commercial radio stations in operation, 
(i.e., 10,716) indicates that 10,287 of these radio stations would be 
considered ``small businesses'' or ``small organizations.'' These 
estimates may overstate the number of small entities because the 
revenue figures on which they are based do not include or aggregate 
revenues from non-radio affiliated companies.

Description of Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    17. The FNPRM proposes no new recordkeeping or other compliance 
requirements associated with the subject rules and policies. These 
rules amend the Commission's procedures and review processes and do not 
change existing documentation and application requirements.

Steps Taken To Minimize Significant Impact on Small Entities, and 
Significant Alternatives Considered

    18. The RFA requires an agency to describe any significant, 
specifically small business, alternatives that it has considered in 
reaching its proposed approach, which may include the following four 
alternatives (among others): (1) the establishment of differing 
compliance or reporting requirements or timetables that take into 
account the resources available to small entities; (2) the 
clarification, consolidation, or simplification of compliance or 
reporting requirements under the rule for small entities; (3) the use 
of performance, rather than design,

[[Page 64000]]

standards; and (4) an exemption from coverage of the rule, or any part 
thereof, for small entities.
    19. In this FNPRM, the Commission explores the underpinnings of two 
principles underlying the regulation of the radio broadcast industry, 
namely diversity and competition. The principles of diversity and 
competition are of particular import to small entities. Thus we seek 
comment on the general advantages and disadvantages of relying on 
numerical limits or other bright-line rules to guide our public 
interest determination versus conducting a case-by-case competitive 
analysis. The framework minimizes the impact on small entities by not 
subjecting to further competitive analysis transactions below a 
threshold level.
    20. This FNPRM invites comment on a number of alternative 
interpretations of the relationship between the revision of local radio 
ownership rules, embodied in section 202(b) of the Telecommunications 
Act of 1996 and the Commission's public interest mandate. Specifically, 
we propose alternative views on that relationship in the FNPRM, seek 
comment on these proposals, and invite additional possible 
interpretations of the relevant statutory provisions. Further, the 
FNPRM seeks comment on how the Commission's rules and policies 
concerning local radio ownership affect our goal of promoting 
diversity. In light of the fact that a majority of the radio 
broadcasting stations likely to be affected are small, we seek comment 
on the impact of industry consolidation on both viewpoint and source 
diversity.
    21. In addition to the principle of diversity, this FNPRM seeks 
comment on the principle of competition in the radio broadcast 
industry, with regard to the definitions of the marketplace and 
measurement of market share.

Federal Rules that May Duplicate, Overlap, or Conflict With the 
Proposed Rules

    22. None.

List of Subjects in 47 CFR Part 73

    Radio broadcasting.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 01-30527 Filed 12-10-01; 8:45 am]
BILLING CODE 6712-01-P