[Federal Register Volume 67, Number 162 (Wednesday, August 21, 2002)]
[Notices]
[Pages 54211-54213]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21339]


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FEDERAL COMMUNICATIONS COMMISSION

[MM Docket No. 02-137; FCC 02-167]


Sheldon Broadcasting, Ltd. and Clear Channel Broadcasting 
License, Inc.

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: In this document, the FCC designates the application to assign 
the license of radio station KLFX(FM), Nolanville, Texas, from Sheldon 
Broadcasting, Ltd. (``Sheldon'' to Clear Channel Broadcasting Licenses, 
Inc. (``Clear Channel''). 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 grant of the application.

DATES: See SUPPLEMENTARY INFORMATION section for document filing dates.

[[Page 54212]]


ADDRESSES: Please file documents with the Investigations and Hearing 
Division, Enforcement Bureau, Federal Communications Commission, Room 
3-B431, 445 12th Street, SW., Washington, DC 20554.

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

SUPPLEMENTARY INFORMATION: This is a summary of the Federal 
Communications Commission's Hearing Designation Order, MM Docket No. 
02-137, adopted on June 5, 2002 and released on July 10, 2002. The full 
text is available for inspection and copying during normal business 
hours in the FCC Reference Information Center, Room CY-A257, 445 12th 
Street, SW., Washington, DC 20554. The full text may also be purchased 
from the Commission's copy contractor, Qualex International, Room CY-
B402, 445 12th Street, SW., Washington, DC 20554, telephone (202) 863-
2983, facsimile (202) 863-2898, or via e-mail at [email protected], or 
may be viewed via the internet at: http://www.fcc.gov/Document_ 
Indexes/Media/2002_index_MB_Order.html. Alternative formats are 
available to persons with disabilities by contacting Martha Contee at 
(202) 418-0260 or TTY (202) 418-2555.

Synopsis of the Order

    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, 16 FCC Rcd 
19861, 66 FR 63986, December 11, 2001 (``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 that 
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 competition 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 competition 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 competition concerns.
    2. On August 13, 2001, Clear Channel and Sheldon filed an 
application proposing to assign the license of station KLFX(FM) from 
Sheldon to Clear Channel. The application was unopposed. Clear Channel 
currently is the licensee of two stations in the Killeen-Temple, Texas 
Arbitron metro: KASZ(FM), Gatesville, Texas, and KIIZ(FM), Killeen, 
Texas.
    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 Sheldon's radio broadcast license to Clear 
Channel before the 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 
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, we 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 98.2%. 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. To the 
extent Clear Channel presents generic arguments challenging the 
parameters of our current competition analysis, we will address

[[Page 54213]]

such concerns in the context of the Local Radio Ownership NPRM and need 
not consider them here. Rather, we look only to the record of this case 
to determine whether there are unique facts that persuade us that grant 
of this assignment application would serve the public interest despite 
the apparent economic concentration it will create. 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 subject application. Accordingly, we will designate the 
assignment applications 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 Killeen-
Temple, Texas metro to determine whether the factual assumptions in 
Section III.C. of the Hearing Designation Order are correct. We further 
direct the ALJ to determine, in light of his or her 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 KLFX(FM), Nolanville, Texas, from Sheldon to Clear 
Channel in accordance with the interim policy, Sheldon and Clear 
Channel must file a joint election to defer consideration of the 
application. Such election must be filed by September 5, 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 KLFX(FM), Nolanville, 
Texas, from Sheldon to Clear Channel is 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-
20010813AAM).
    8. Pursuant to 47 U.S.C. 309(e), the burden of proof with respect 
to both the introduction of evidence and the issue specified in this 
Order shall be upon Sheldon 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 Hearings Division of the Enforcement Bureau at (202) 
418-1420. Such service must be addressed to the named counsel of 
record, Investigations and Hearings Division, Enforcement Bureau, 
Federal Communications Commission, 445 12th Street, SW, Room 3-B431, 
Washington, DC 20554.
    10. The effectiveness of this Order is stayed until September 10, 
2002, no less than 10 days prior to which the parties may amend their 
application or file such other information with the Media Bureau as 
they deem relevant to ameliorate the competition concerns identified in 
this Order.
    11. To avail themselves of the opportunity to be heard, Sheldon 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 September 10, 2002. Pursuant 
to 47 CFR 1.221(c) of the Commission's rules, 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. The applicants, 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).
    13. The application to assign the licenses of station KLFX(FM), 
Nolanville, Texas, from Sheldon to Clear Channel will be held in 
abeyance pending the outcome of this proceeding.
    14. The Commission's Consumer and Governmental Affairs 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. 02-21339 Filed 8-20-02; 8:45 am]
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