[Federal Register Volume 67, Number 86 (Friday, May 3, 2002)]
[Notices]
[Pages 22429-22431]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-10996]


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FEDERAL COMMUNICATIONS COMMISSION

[MM Docket No. 02-38; FCC 02-53]


Air Virginia Inc. and Clear Channel Radio Licenses, Inc.

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this document, the FCC designates the application to assign 
radio station WUMX(FM), Charlottesville, Virginia from Air Virginia, 
Inc. (``Air Virginia'') to Clear Channel Radio Licenses, Inc. (``Clear 
Channel'') for hearing. The Commission cannot find, based on the 
record, that grant of this application is consistent with the public 
interest, convenience and necessity. Accordingly, pursuant to 47 U.S.C. 
309(e), the Commission designates the application for hearing to 
determine whether the public interest, convenience and necessity will 
be served by the grant of the application.

DATES: See Supplementary Information section for document filing dates.

ADDRESSES: Please file documents with the Investigations and Hearing 
Division, Enforcement Bureau, Federal Communications Commission, Room 
3-B431, 445 Twelfth Street, SW., Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Charles W. Kelley, Chief, 
Investigations and Hearing Division of the Enforcement Bureau, at (202) 
418-1420.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Hearing Designation Order, MM Docket No. 
02-38, adopted on February 14, 2002 and released on March 19, 2002. The 
full text is available for inspection and copying during normal 
business hours in the FCC Reference Center, Room CY-A257, 445 12th 
Street, SW., Washington, DC 20554. The complete text may be purchased 
from the Commission's copy contractor, Qualex International, 445 12th 
Street, W.W., Room CY-B402, Washington, DC 20554. The full text may 
also be downloaded at: www.fcc.gov. Alternative formats are available 
to persons with disabilities by contacting Martha Contee at (202) 418-
0260 or TTY (202) 418-2555.
    1. In March 1996, the Commission relaxed the numerical station 
limits in its local radio ownership rule in accordance with Congress's 
directive in section 202(b) of the Telecommunications Act of 1996. 
Since then, the Commission has received applications proposing 
transactions that would comply with the new limits, but that 
nevertheless could produce concentration levels that raised significant 
concerns about the potential impact on the public interest. In response 
to these concerns, the Commission concluded that it has an independent 
obligation to consider whether a proposed pattern of radio ownership 
that complies with the local radio ownership limits would otherwise 
have an adverse competitive effect in a particular local radio market 
and thus, would be inconsistent with the public interest. In August 
1998, the Commission also began flagging public notices of radio 
station transactions that would result in one entity controlling 50 
percent or more of the advertising revenues in the relevant Arbitron 
radio market or two entities controlling 70 percent or more of the 
advertising revenues in that market. On November 8, 2001, we adopted 
the Notice of Proposed Rulemaking in MM Docket No. 01-317 (``Local 
Radio Ownership NPRM''). We expressed concern that our current policies 
on local radio ownership did not adequately reflect current industry 
conditions and had led to unfortunate delays in the processing of 
assignment and transfer applications. Accordingly, we adopted the Local 
Radio Ownership NPRM to undertake a comprehensive examination of our 
rules and policies concerning local radio ownership and to develop a 
new framework that will be more responsive to current marketplace 
realities while continuing to address our core public interest concerns 
of promoting diversity and competition. In the Local Radio Ownership 
NPRM, we also set forth an interim policy to guide our actions on radio 
assignment and transfer of control applications pending a decision in 
this proceeding. Under our interim policy, we presume that an 
application that falls below the 50/70 screen will not raise 
competition concerns unless a petition to deny raising competitive 
issues is filed. For applications identified by the 50/70 screen, the 
interim policy directs the Commission's staff to conduct a public 
interest analysis, including an independent preliminary competitive 
analysis, and sets forth generic areas of inquiry for this purpose. The 
interim policy also sets forth timetables for staff recommendations to 
the Commission for the disposition of cases that may raise competitive 
concerns.
    2. On April 30, 2000, Clear Channel and Air Virginia filed an 
application proposing to assign the license of station WUMX(FM) from 
Air Virginia, Inc. to Clear Channel. Eure Communications (``Eure'') 
filed a petition to deny on May 26, 2000, alleging that the transaction 
would have anti-competitive effects on local advertisers in the local 
radio market. Clear Channel and Air Virginia filed oppositions to the 
petition to deny and Eure replied. Clear Channel currently owns five 
stations in the Charlottesville metro: WVAO-FM, Crozet, Virginia; WCYK-
FM, Staunton, Virginia; WVSY(FM), Ruckersville, Virginia; WKAV(AM), and 
WCHV(AM), Charlottesville, Virginia. In its Petition to Deny, Eure 
alleges that the proposed transaction would have anti-competitive 
effects on local advertisers in the Charlottesville metro. 
Specifically, Eure claims that based on BIA's 1999 revenue data, Clear 
Channel's local advertising revenue share, as a result of the 
acquisition, would increase from 30.8% to 53.6%, and Clear Channel's 
post-merger share combined with Eure's own share in the market, would 
be 94.2%. In addition, Eure argues that the proposed transaction would 
eliminate a competitor in the market, reducing the voices in the market 
from seven to six. Other than the stations owned by Eure and Clear 
Channel, Eure claims that there is only one other station in the 
market, WUVA(FM), that generates any revenue share. Clear Channel's 
dominance is also clear, according to Eure, when audience demographic 
shares are examined. Eure claims that Clear Channel's average local 
commercial audience share for fall 1999 would increase from 35.7 to 
45.7, constituting excessive market concentration. Finally, Eure argues 
that the proposed level of increase in concentration is inconsistent 
with antitrust principles and is unacceptable under what it asserts is 
the Department of Justice's (``DOJ'') primary indicator of market 
concentration. In opposition, Clear Channel argues that Eure has 
offered no concrete allegations as to how the proposed transaction 
would harm competition or how it would impose a barrier to Eure's 
ability to compete in the market. On November 15, 2001, the staff sent 
a letter requesting additional information from the parties to 
facilitate the competition analysis. Clear Channel responded to

[[Page 22430]]

the letter on December 5, 2001, and Eure filed comments on December 19, 
2001. We designate the application for hearing based on this record.
    3. Section 310(d) of the Communications Act of 1934, as amended, 
(the ``Communications Act''), 47 U.S.C. 310(d), requires the Commission 
to find that the public interest, convenience and necessity would be 
served by the assignment of Air Virginia's radio broadcast license to 
Clear Channel before that assignment may occur. Under the interim 
policy set forth in our Local Radio Ownership NPRM, we conduct a public 
interest analysis, including but not limited to an independent 
preliminary competition analysis of the proposed transaction based on 
publicly available information and information in the Commission's 
records. Under the interim policy, to decide whether a proposed 
assignment serves the public interest, we first determine whether it 
complies with the specific provisions of the Communications Act, other 
applicable statutes, and the Commission's rules, including our local 
radio ownership rules. If it does, we then consider any potential 
public interest harms of the proposed transaction as well as any 
potential public interest benefits to determine whether, on balance, 
the assignment serves the public interest. The Commission's analysis of 
public interest benefits and harms includes an analysis of the 
potential competitive effects of the transaction, as informed by 
traditional antitrust principles. However, the Commission's public 
interest evaluation is not limited to competition concerns but 
necessarily encompasses the broad aims of the Communications Act. These 
broad aims include, among other things, ensuring the existence of an 
efficient, nationwide radio communications service, available to 
everyone and promoting locally oriented service and diversity in media 
voices. Our public interest analysis therefore includes assessing 
whether the transfer will affect the quality of radio services or 
responsiveness to the local needs of the community, and whether it will 
result in the provision of new or additional services to listeners. 
Thus, under our interim policy, where a proposed transaction raises 
concerns about economic concentration, we will consider evidence that 
the particular circumstances of a case may mitigate any adverse impact 
to radio listeners that might otherwise result, as well as any evidence 
of benefits to radio listeners that might result from the proposed 
transaction. Ultimately, it is the potential impact of the transaction 
on listeners that will determine whether we can find that, on balance, 
grant of a particular radio station assignment or transfer of control 
application serves the public interest.
    4. Having concluded that the proposed transaction is consistent 
with the numerical limits set forth in our ownership rules, our interim 
guidelines instruct us now to turn to our competition analysis. Here, 
we find that the proposed transaction would create a market in which 
the combined market share of the top two group owners in the market 
would be 94.2%. Unlike other transactions we have considered, we find 
that Clear Channel has failed to demonstrate particular circumstances 
in this market sufficient to overcome a concern that this level of 
economic concentration in this market will harm the public interest. 
Rather, Clear Channel has presented only generic arguments challenging 
the parameters of our current competition analysis. On the basis of the 
information before us, we are unable to make the required finding that 
the public interest, convenience and necessity will be served by 
granting the captioned application in light of the question(s) raised 
in the context of our competition analysis. Accordingly, we will 
designate the assignment application for hearing to determine, pursuant 
to 47 U.S.C. 309(e), and based on the evidence to be adduced at 
hearing, whether the public interest, convenience and necessity will be 
served by the grant of the application.
    5. We direct the Administrative Law Judge (``ALJ'') to examine in 
an evidentiary hearing the particular circumstances of the 
Charlottesville market to determine whether the factual assumptions in 
paragraphs 18 through 28 of the Local Radio Ownership NPRM are correct. 
We further direct the ALJ to determine, in light of his conclusions, 
whether the transaction is likely to cause any anticompetitive harms, 
and to determine what, if any, public benefits would accrue from this 
transaction. Finally, we direct the ALJ to apply these findings to 
determine whether, on balance, grant of the application would serve the 
public interest.
    6. To defer further consideration of the application to assign the 
license of Station WUMX(FM), Charlottesville, Virginia from Air 
Virginia to Clear Channel in accordance with the interim policy, Air 
Virginia and Clear Channel must file a joint election to defer 
consideration of the application. Such election must be filed by April 
23, 2002.
    7. In the event the parties do not timely file the joint election 
set forth in the paragraph above, pursuant to 47 U.S.C. 309(e), the 
application to assign the license of station WUMX(FM), Charlottesville, 
Virginia from Air Virginia Inc. to Clear Channel Radio Licenses, Inc. 
is being designated for hearing at a time and place to be specified in 
a subsequent Order, to determine, in light of the evidence to be 
presented in the hearing, whether the public interest, convenience and 
necessity would be served by the grant of the above-captioned 
assignment application (File No. BALH-20000403/ABI).
    8. Pursuant to 47 U.S.C. 309(e), the burden of proof with the 
introduction of evidence and the burden of proof with respect to the 
issue specified in this Order will be upon Air Virginia and Clear 
Channel, the applicant parties in this proceeding.
    9. A copy of each document filed in this proceeding subsequent to 
the date of adoption of this Order must be served on the counsel of 
record appearing on behalf of the Chief, Enforcement Bureau. Parties 
may inquire as to the identity of such counsel by calling the 
Investigations and Hearing Division of the Enforcement Bureau at (202) 
418-1420. Such service must be addressed to the named counsel of 
record, Investigations and Hearing Division, Enforcement Bureau, 
Federal Communications Commission, 445 12th Street, Room 3-B431, 
Washington, DC 20554.
    10. The effectiveness of this Order is stayed until April 8, 2002. 
From March 19, 2002, until March 29, 2002, the parties may amend their 
application or file such other information with the Media Bureau as 
they deem relevant to ameliorate the competitive concerns identified in 
this Order.
    11. To avail themselves of the opportunity to be heard, Air 
Virginia and Clear Channel, pursuant to 47 CFR 1.221(c) and 1.221(e), 
in person or by their respective attorneys, must file in triplicate, a 
written appearance, stating an intention to appear on the date fixed 
for the hearing and present evidence on the issues specified in this 
Order. Such written appearance shall be filed by April 28, 2002. 
Pursuant to 47 CFR 1.221(c), if the parties fail to file an appearance 
within the specified time period, the assignment application will be 
dismissed with prejudice for failure to prosecute.
    12. Eure Communications, Inc. is being made a party to the 
proceeding pursuant to 47 CFR 1.221(d). To avail itself of the 
opportunity to be heard, Eure Communications, Inc., pursuant to 47 CFR 
1.221(e), in person or by its attorneys, must file in triplicate, a 
written appearance, stating its intention to appear on the date fixed 
for the

[[Page 22431]]

hearing and present evidence on the issues specified in this Order. 
Such written appearance shall be filed by April 28, 2002. If Eure 
Communications, Inc., fails to file an appearance within the time 
specified, it shall, unless good cause for such failure is shown, 
forfeit its hearing rights.
    13. The applicant, pursuant to 47 U.S.C. 311(a)(2), and 47 CFR 
73.3594, must give notice of the hearing within the time and in the 
manner prescribed, and must advise the Commission of the publication of 
such notice as required by 47 CFR 73.3594(g).
    14. The application to assign the licenses for station WUMX(FM), 
Charlottesville, VA from Air Virginia, Inc. to Clear Channel Radio 
Licenses, Inc. will be held in abeyance pending the outcome of this 
proceeding.
    15. The Commission's Consumer Information Bureau, Reference 
Information Center, will send copies of this Order to all parties by 
certified mail, return receipt requested.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-10996 Filed 5-2-02; 8:45 am]
BILLING CODE 6712-01-P