[Federal Register Volume 89, Number 32 (Thursday, February 15, 2024)]
[Rules and Regulations]
[Pages 12196-12229]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-02577]



[[Page 12195]]

Vol. 89

Thursday,

No. 32

February 15, 2024

Part VI





Federal Communications Commission





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47 CFR Part 73





2018 Quadrennial Regulatory Review--Review of the Commission's 
Broadcast Ownership Rules; Final Rule

  Federal Register / Vol. 89, No. 32 / Thursday, February 15, 2024 / 
Rules and Regulations  

[[Page 12196]]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket No. 18-349; FCC 23-117; FR ID 200880]


2018 Quadrennial Regulatory Review--Review of the Commission's 
Broadcast Ownership Rules

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) retains the broadcast ownership rules with minor 
modifications in compliance with the Telecommunications Act of 1996 
which requires the Commission to review its broadcast ownership rules 
quadrennially to determine whether they are necessary in the public 
interest as a result of competition. Specifically, the Commission 
retains the Dual Network Rule, modifies the Local Radio Ownership Rule 
to make permanent the interim contour-overlap methodology long used to 
determine ownership limits in areas outside the boundaries of defined 
Nielsen Audio Metro markets and in Puerto Rico, and modifies the Local 
Television Ownership Rule to reflect changes that have occurred in the 
television marketplace and current industry practices.

DATES: Effective March 18, 2024, except for changes to Commission Forms 
required as the result of the rule amendments adopted herein which are 
delayed indefinitely. The Commission will publish a document in the 
Federal Register announcing the effective date for changes to the 
Commission Forms.

FOR FURTHER INFORMATION CONTACT: Ty Bream, [email protected], of the 
Industry Analysis Division, Media Bureau, (202) 418-0644.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order, FCC 23-117, adopted on December 22, 2023, and released on 
December 26, 2023. The full text of this document is available at 
https://docs.fcc.gov/public/attachments/FCC-23-117A1.pdf and via 
electronically via the search function on the Commission's Electronic 
Document Management System (EDOCS) web page at https://www.fcc.gov/edocs. Documents will be available electronically in ASCII, Microsoft 
Word, and/or Adobe Acrobat. Alternative formats are available for 
people with disabilities (Braille, large print, electronic files, audio 
format, etc.) and reasonable accommodations (accessible format 
documents, sign language interpreters, CART, etc.) may be requested by 
sending an email to [email protected] or calling the Commission's Consumer 
and Governmental Affairs Bureau at (202) 418-0530 (voice), 1-844-4-FCC-
ASL (1-844-432-2275 (videophone).

Synopsis

I. Introduction

    1. With this Report and Order (Order), we bring to a close the 2018 
Quadrennial Review proceeding. In this Order, we retain the existing 
media ownership rules and adopt minor modifications that better tailor 
them to the current media marketplace. The record of this proceeding 
demonstrates that while the media industry has experienced both 
unforeseen challenges and substantial changes since the last 
quadrennial review, broadcasters retain a uniquely important role 
serving the American public in their local communities. The COVID-19 
pandemic has underscored the importance of readily available and easily 
accessible news and information at the local community level, for which 
broadcast outlets remain a critical source. Despite the proliferation 
of new forms and sources of programming, broadcast television and radio 
remain essential to achieving the Commission's goals of competition, 
localism, and viewpoint diversity.
    2. Based on our careful review of the record, we find that our 
existing rules, with some minor modifications, remain necessary in the 
public interest. Specifically, we retain the Dual Network Rule and the 
Local Radio Ownership Rule, the latter of which we modify only to make 
permanent the interim contour-overlap methodology long used to 
determine ownership limits in areas outside the boundaries of defined 
Nielsen Audio Metro markets and in Puerto Rico. We likewise retain the 
Local Television Ownership Rule with modest adjustments to reflect 
changes that have occurred in the television marketplace. The existing 
Local Television Ownership Rule ensures competition among local 
broadcasters while allowing for flexibility should the circumstances of 
local markets justify it. Accordingly, today we update the methodology 
for determining station ranking within a market to better reflect 
current industry practices, and we expand the existing prohibition on 
use of affiliation to circumvent the restriction on acquiring a second 
top-four ranked station in a market. We find that the modifications 
adopted today will enable the Commission to promote competition, 
localism, and viewpoint diversity more effectively going forward.

II. Background

    3. Consistent with the statutory requirement directing the 
Commission to review its media ownership every four years, the 
Commission initiated this Quadrennial Review on December 12, 2018, by 
adopting a Notice of Proposed Rulemaking (NPRM), 84 FR 6741 (Feb. 28, 
2019). In the NPRM, the Commission sought comment on whether the three 
media ownership rules subject to this review--the Local Radio Ownership 
Rule, the Local Television Ownership Rule, and the Dual Network Rule--
remain necessary in the public interest in their current forms or 
whether the rules should be modified or eliminated.
    4. At the time the NPRM was released, litigation was still pending 
as a result of the Report and Order that concluded the 2010 and 2014 
Quadrennial Reviews (2010/2014 Quadrennial Review Order), 81 FR 76220 
(Nov. 1, 2016), and a subsequent Order on Reconsideration (2010/2014 
Quadrennial Review Order on Reconsideration), 83 FR 733 (Jan. 8, 2018). 
In the 2010/2014 Quadrennial Review Order, the Commission resolved its 
2010 and 2014 proceedings and kept five structural ownership rules 
largely intact: the Local Television Ownership Rule, the Local Radio 
Ownership Rule, the Newspaper/Broadcast Cross-Ownership Rule, the 
Radio/Television Cross-Ownership Rule, and the Dual Network Rule. In 
addition, the 2010/2014 Quadrennial Review Order reinstated the 
Commission's previous revenue-based eligible entity standard as a means 
to promote broadcast ownership by small businesses and new entrants. 
Under this standard an ``eligible entity'' is any entity that qualifies 
as a small business under revenue-based standards established by the 
Small Business Administration. In turn, the Commission's rules afford 
such qualified eligible entities additional flexibility, for example, 
by extending the time required to construct a broadcast facility or 
raising the threshold at which ownership strictures are triggered. 
Several parties filed Petitions for Reconsideration of the 2010/2014 
Quadrennial Review while others sought judicial review in the D.C. 
Circuit Court of Appeals and the Third Circuit Court of Appeals.
    5. On November 16, 2017, the Commission responded to the Petitions 
for Reconsideration and adopted an 2010/2014 Quadrennial Review Order 
on Reconsideration, which, among other things, reversed certain 
elements of the

[[Page 12197]]

2010/2014 Quadrennial Review Order, most notably by repealing the 
Newspaper/Broadcast Cross-Ownership Rule and the Radio/Television 
Cross-Ownership Rule and revising the Local Television Ownership Rule. 
Specifically, the Commission revised the Local Television Ownership 
Rule by eliminating the prior Eight-Voices Test and adopting a case-by-
case review process for proposed transactions involving new 
combinations of top-four rated stations in a local market. Though it 
declined to revise the market definition relied on in the Local Radio 
Ownership Rule, the Commission adopted a presumption for certain 
transactions involving embedded markets. Embedded markets are smaller 
markets that are located within the boundaries of a larger Nielsen 
Audio Metro market. The Commission also eliminated the Television Joint 
Sales Agreement Attribution Rule readopted in the 2010/2014 Quadrennial 
Review Order, while retaining the Shared Services Agreement disclosure 
requirements adopted therein. A joint sales agreement (JSA) is an 
agreement that authorizes one station (the broker or the brokering 
station) to sell some or all of the advertising time on another station 
(the brokered station). Further, the Commission adopted an Incubator 
Program and sought comment on how to structure and implement the 
program.
    6. On August 2, 2018, after notice and comment, including 
consultation with the Commission's Advisory Committee on Diversity and 
Digital Empowerment (ACDDE), the Commission adopted the Incubator 
Order, which established an incubator program for radio broadcasters 
designed to increase diversity by addressing the barriers to new and 
diverse station ownership, in particular lack of access to capital and 
operational expertise. The Incubator Order provided a structure whereby 
established AM and FM broadcasters could offer financial, technical, 
and operational assistance to new and diverse entrants. In return for 
successful incubation, established broadcasters could receive a limited 
waiver of the Local Radio Ownership Rule, allowing them to acquire 
another station in a market that would otherwise be prohibited by the 
Local Radio Ownership Rule, provided the market is ``comparable'' to 
the market in which the broadcaster successfully incubates another 
station. The Commission considered a market to be ``comparable'' to the 
market where the incubation relationship occurred ``if, at the time the 
incubating entity seeks to use the reward waiver, the chosen market and 
the incubated market fall within the same market size tier under our 
Local Radio Ownership Rule and the number of independent owners of 
full-service, commercial and noncommercial radio stations in the chosen 
market is no fewer than the number of such owners that were in the 
incubation market at the time the parties submitted their incubation 
proposal to the Commission.''
    7. Several parties sought review of the 2010/2014 Quadrennial 
Review Order on Reconsideration in the D.C. Circuit and Third Circuit 
Court of Appeals. These petitions were consolidated before the Third 
Circuit Court of Appeals with the previously filed reviews of the 2010/
2014 Quadrennial Review Order. On September 23, 2019, the Third Circuit 
vacated and remanded the bulk of the Commission's actions in the 2010/
2014 Quadrennial Review Order on Reconsideration, opining that the 
Commission had failed to consider adequately how the rule changes would 
impact female and minority ownership. On December 20, 2019, the Media 
Bureau issued an Order reinstating the rules as set forth in the 2010/
2014 Quadrennial Review Order.
    8. In the wake of the Third Circuit's decision, the Commission and 
broadcast industry petitioners filed separate Petitions for Writ of 
Certiorari before the Supreme Court, each asking the Supreme Court to 
review and overturn the Third Circuit's decision on different grounds. 
On October 2, 2020, the Supreme Court granted the petitions for a writ 
of certiorari and consolidated the cases, ultimately hearing oral 
argument on January 19, 2021. On April 1, 2021, the Supreme Court, in a 
unanimous opinion, upheld the rules as adopted and eliminated in the 
Commission's 2010/2014 Quadrennial Review Order on Reconsideration. The 
Supreme Court reaffirmed the Commission's ``broad authority to regulate 
broadcast media in the public interest'' and stated that under the 
Administrative Procedure Act's arbitrary and capricious standard, a 
court may not substitute its own policy judgment for that of the agency 
so long as the action is reasonable and reasonably explained. In this 
instance, the Supreme Court found that the Commission appropriately 
analyzed the evidence and data it had before it, and came to a 
reasonable conclusion that the rules no longer served the public 
interest. Finally, the Court noted that it did not reach, and therefore 
left undisturbed, issues regarding whether section 202(h) authorizes or 
requires the Commission to consider, or prohibits the Commission from 
considering, minority and female ownership when it conducts its 
quadrennial reviews.
    9. Accordingly, the Supreme Court upheld the Commission's decision 
to eliminate the Newspaper/Broadcast Cross-Ownership and Radio/
Television Cross-Ownership Rules and revise the Local Television 
Ownership Rule. It also upheld the Commission's decision to eliminate 
the Television Joint Sales Agreement Attribution Rule while retaining 
the Shared Services Agreement disclosure requirements. The Court 
likewise upheld the Commission's decisions on the ``eligible entity'' 
definition and the creation of a diversity incubator program.
    10. On June 4, 2021, the Media Bureau adopted an order, 86 FR 34627 
(June 30, 2021), reinstating the 2010/2014 Quadrennial Review Order on 
Reconsideration, the Incubator Order, as well as the revenue-based 
eligible entity definition from the 2010/2014 Quadrennial Review Order. 
Moreover, cognizant of how much time had passed since the original 
comment period closed, the Bureau released a public notice, 86 FR 35089 
(July 1, 2021), seeking to refresh the record in the 2018 Quadrennial 
Review proceeding and received extensive comment. The Bureau asked 
commenters to review and comment on any materials that had been filed 
in the proceeding since the original comment period closed. The Media 
Bureau also sought any new and relevant information, including new 
empirical and statistical evidence, proposals, and detailed analysis. 
Additionally, the Bureau sought comment on how the media marketplace 
had evolved since early 2019 and whether new technological innovations 
had spurred noticeable trends or changed industry practices, as well as 
how any trends had impacted how consumers obtain local and national 
news and information.

III. Standard of Review

    11. We reaffirm in this proceeding the long-standing framework 
under section 202(h) of the Telecommunications Act of 1996, pursuant to 
which we examine the rules subject to the Quadrennial Review to 
determine if they remain necessary in service of our three traditional 
policy goals--competition, localism, and viewpoint diversity. We find 
that the language of the statute, judicial precedent, and the record in 
this proceeding support retaining our traditional multi-factor 
approach, and we reject suggestions that we re-interpret the statute as 
requiring solely a competition-centric review. In addition, consistent 
with past Commission determinations, we find

[[Page 12198]]

that section 202(h) grants us discretion to make rules more or less 
stringent to ensure they serve the public interest. We also conclude 
that under this approach, and consistent with past reviews, we will 
consider whether our existing rules are consistent with minority and 
female ownership and to evaluate potential harms, if any, to minority 
and female ownership that would result from any changes we make 
thereto.
    12. As stated above, the media ownership rules subject to this 
Quadrennial Review are the Local Radio Ownership Rule, the Local 
Television Ownership Rule, and the Dual Network Rule. These rules are 
found, respectively, at 47 CFR 73.3555(a), (b), and 47 CFR 73.658(g). 
Section 202(h) of the Telecommunications Act of 1996 requires the 
Commission to review these rules every four years to determine whether 
they ``are necessary in the public interest as the result of 
competition'' and to ``repeal or modify any regulation [the Commission] 
determines to be no longer in the public interest.'' Consistent with 
the guidance of the Third Circuit, the Commission has previously 
considered the language ``necessary in the public interest'' to be a `` 
`plain public interest' standard under which `necessary' means 
`convenient,' `useful,' or `helpful,' not `essential' or 
`indispensable.' '' Furthermore, the Commission has applied the 
principle that there is no ``presumption in favor of repealing or 
modifying the ownership rules,'' but rather, that the Commission has 
the discretion ``to make [the rules] more or less stringent.'' 
Accordingly, the Commission's review under section 202(h) focuses on 
determining whether there is a reasoned basis for retaining, repealing, 
or modifying each rule consistent with our long-standing public 
interest goals of competition, localism, and viewpoint diversity.
    13. Parties presented arguments related to the proper 
interpretation of section 202(h) to the Supreme Court in FCC v. 
Prometheus. Subsequent to the Supreme Court's decision, in the 2021 
Update Public Notice, the Media Bureau sought comment on various 
issues, including whether there were any legal factors that the 
Commission should consider as part of its 2018 Quadrennial Review. In 
response, several commenters opine regarding how the Commission should 
interpret section 202(h) going forward in the wake of FCC v. 
Prometheus, as well as their views regarding the impact of the Supreme 
Court's decision on the Commission's consideration of minority and 
female ownership in this proceeding.
    14. As we have many times in the past, and consistent with 
Congress's directive in section 202(h), we review the rules that are 
subject to the Quadrennial Review to determine whether they are 
necessary in the public interest as the result of competition and with 
the express statutory purpose of repealing or modifying any rule that 
is no longer in the public interest. In conducting that review, our 
determination as to whether the rules remain necessary in the public 
interest focuses primarily on our longstanding policy goals of 
competition, localism, and viewpoint diversity. In addition to those 
core policy goals, the Commission has also considered whether its rules 
are consistent with, and the effect, if any, changes to its rules would 
have on, minority and female ownership of broadcast stations, and we do 
so as well.
    15. As noted above, the Supreme Court did not consider the Third 
Circuit's prior conclusions regarding the interpretation of section 
202(h)--in fact, the Supreme Court explicitly declined to reach such 
issues. Therefore, as an initial matter, the Third Circuit's guidance, 
as well as the Commission's application of that guidance in past 
quadrennial reviews, continues to inform our analysis. Consistent with 
that precedent, and as discussed in more detail below, we reject calls 
to depart from precedent or to reinterpret section 202(h) in a manner 
that would abandon our traditional multi-factor framework in favor of 
an approach focused solely on competition or that would permit only the 
relaxation or elimination of the rules.
    16. First, consistent with the Third Circuit's guidance in 
Prometheus I and Commission precedent, we continue to find that 
``necessary in the public interest'' is a `` `plain public interest' 
standard under which `necessary' means `convenient,' `useful,' or 
`helpful,' not `essential' or `indispensable.' '' The Commission has 
applied this interpretation repeatedly in its previous quadrennial 
reviews, and we continue to find that this understanding of ``necessary 
in the public interest'' is the most reasonable and logical 
interpretation.
    17. Second, we decline NAB's invitation to re-interpret section 
202(h) in order to find a presumption in favor of deregulation, and we 
disagree with the assertion that section 202(h) only allows for the 
repeal or relaxation of a rule. Rather, as we have concluded in prior 
quadrennial reviews and the courts have upheld, we find that the 
Commission may ``make [the rules] more or less stringent'' after 
reviewing and considering the state of competition in the media 
marketplace. As the Third Circuit held in Prometheus I, section 202(h) 
does not carry a presumption in favor of deregulation, nor is it a 
``one-way ratchet.'' We continue to find that the iterative process 
established by section 202(h) compels us to ``repeal or modify any 
regulation [the Commission] determines to be no longer in the public 
interest.'' Based on the plain language of this directive, and the use 
of the word ``modify,'' we reiterate that the Commission is not merely 
relegated to repealing or relaxing a rule that, over time, has become 
unnecessary or obsolete. Instead, where an existing rule as written is 
``no longer in the public interest,'' the Commission can modify that 
rule (for instance, by making it more or less restrictive, changing the 
structure of the rule, or closing loopholes) to ensure that the rule 
better serves the public interest. Contrary to NAB's suggestion, the 
logic of a deregulatory presumption undercuts the references in section 
202(h), in both its text and legislative history, to evaluating the 
rules in the public interest. We further believe that it would be 
counter to the public interest to deregulate by either repeal, 
relaxation, or inaction (e.g., by ignoring competitive developments 
that run counter to the public interest) to the point that a few 
entities may dominate a media market. There is no indication that it 
was Congress's intention when it passed the 1996 Telecommunications Act 
to adopt a presumption in favor of deregulation, or to alter the then 
established principle under the Administrative Procedure Act (APA) that 
if there is any presumption, it is not against regulation but against 
changes in current policy that are not justified by the rulemaking 
record.
    18. Third, we agree with commenters who assert that FCC v. 
Prometheus reaffirmed our broad statutory authority to regulate 
broadcast stations in the public interest. As the Supreme Court noted, 
agencies are entitled to deference assuming that they act in a ``zone 
of reasonableness'' and have ``reasonably considered the relevant 
issues and reasonably explained the decision.'' The Supreme Court held 
further in City of Arlington, Tex. v. FCC, that any statutory 
ambiguities should be ``resolved, first and foremost, by the agency'' 
so long as the agency stays ``within the bounds of reasonable 
interpretation.'' Accordingly, we conclude that the Commission has 
considerable latitude in our interpretation and application of section 
202(h), and the Supreme Court's recent decision in FCC v. Prometheus 
only

[[Page 12199]]

affirms this conclusion by underscoring the Commission's broad 
discretion.
    19. Accordingly, we reaffirm that our assessment of whether the 
structural ownership rules remain in the public interest continues to 
focus on the Commission's longstanding policy goals of competition, 
localism, and viewpoint diversity. The Commission has long held that 
the public interest is furthered by promoting the principles of 
competition, localism, and viewpoint diversity to ensure that a small 
number of entities do not dominate a particular media market, a holding 
we reaffirm in this current Quadrennial Review. Indeed, as early as the 
1998 Biennial Review (the first review required by section 202(h)), the 
Commission rejected calls by commenters to consider only competition in 
the context of section 202(h) reviews. Looking at the statutory 
language of section 202(h), the Commission noted at the time that the 
phrases ``necessary in the public interest'' and ``as the result of 
competition'' could not be separated and, read together, the language 
``appears to focus on whether the public interest basis for the rule 
has changed as a result of competition, and does not appear to be 
intended to limit the factors we should consider.'' Further, the 
Commission noted that, in the legislative history of the 1996 
Telecommunications Act, Congress expressed diversity concerns regarding 
the media marketplace. For example, the legislative history highlights 
the national need to promote ``diversity of media voices, vigorous 
economic competition, technological advancement, and promotion of the 
public interest, convenience, and necessity'' and twice pairs diversity 
with competition as factors for the Commission's consideration in its 
decisions regarding the marketplace. The Senate Conference Report 
states that ``in the Commission's proceeding to review its television 
ownership rules generally, the Commission is considering whether 
generally to allow such local cross ownerships, including combinations 
of a television station and more than one radio station in the same 
service. The conferees expect that the Commission's future 
implementation of its current radio-television waiver policy, as well 
as any changes to its rules it may adopt in its pending review, will 
take into account the increased competition and the need for diversity 
in today's radio marketplace that is the rationale for subsection 
(d).'' It also states that ``the Commission may also permit VHF/VHF 
combinations where it determines that doing so will not harm 
competition and diversity.''
    20. In light of our continued adherence to this approach, and based 
on the record, our discretion, and the text of section 202(h), we 
reject calls to revise the Commission's longstanding approach in favor 
of reading the statute narrowly to focus on, or elevate, either the 
reference to the ``public interest'' or the reference to 
``competition'' individually and in the absence of the other. Instead, 
we agree with commenters who suggest that we embrace a `` `plain public 
interest' standard'' that does not place emphasis on one public 
interest goal over another and continue to read the phrase ``necessary 
in the public interest as the result of competition'' in its entirety 
and in a manner that we find logically marries the two references. We 
continue to find that such an interpretation appropriately recognizes 
the importance and meaning of the phrase ``necessary in the public 
interest,'' which Congress affirmatively included and has long been 
read to encompass several important public policy goals, alongside the 
distinct term ``competition,'' which is consistent with the larger 
thematic context of the 1996 Act. The broader scope of the public 
interest inquiry is also reflected in the additional language in 
section 202(h), which defines the inquiry as whether these rules are 
``no longer in the public interest,'' a term not limited to a focus on 
effects on competition. Thus, throughout Quadrennial Reviews over the 
years, the Commission has modified and eliminated rules that it deemed 
to be ``no longer in the public interest.'' Those inquiries have not 
been confined to effects on competition, but have included analyses of 
viewpoint diversity and localism as well. At some point, then, 
competition might reach a point where, as the result of such 
competition, certain of our rules would be ``no longer in the public 
interest'' to achieve the Commission's stated public interest goals. 
Quadrennial review is the forum in which the Commission takes account 
of that progress in light of all three of these goals.
    21. Accordingly, we disagree with NAB's interpretation that 
Congress intended to elevate competition as the ``preeminent factor'' 
to guide the Commission's review under section 202(h), and we reject 
the attempt to revisit this long-resolved issue. We similarly disagree 
with NAB's contention that the tenets of statutory interpretation, 
including the reference to competition in section 202(h) (rather than 
any other specific public interest factors), support its interpretation 
that the Commission's section 202(h) review should consider competition 
as the primary factor in evaluating the rules. As noted above, the text 
of section 202(h) requires the Commission to determine whether our 
rules remain ``necessary in the public interest as the result of 
competition.'' In the past, the Commission has consistently interpreted 
the reference in section 202(h) to the ``public interest'' as 
incorporating our traditional policy objectives under that standard, 
namely, competition, localism, and viewpoint diversity. Congress 
envisioned a future where changes in the amount and type of competition 
could one day render some or all of our structural media ownership 
rules unnecessary. The crux of the phrase, and indeed of section 
202(h), however, is whether these competitive market forces are 
satisfying the public interest objectives that our rules are intended 
to serve, such that our rules are ``no longer necessary . . . as the 
result of competition.'' Ultimately, we cannot ignore the fact that 
Congress included the words ``public interest'' in section 202(h), and 
those words need to be treated as prominently and with equal reverence 
as the mention of competition. For instance, had Congress wished to do 
so, it could have omitted the phrase ``public interest'' and simply 
directed the Commission to review its rules to determine whether ``any 
such rules are necessary as the result of competition.'' Instead, 
Congress elected to include the concept of the ``public interest'' 
together with that of competition, knowing full well that service to 
public interest, convenience, and necessity is the foundation of the 
Commission's rules. And as noted above, it underscored that more 
general reference to the public interest analysis in describing the 
inquiry as whether rules are ``no longer in the public interest.'' We 
conclude that there was a reason Congress used these references to the 
public interest, and that it is reasonable to interpret these 
references in light of all three of the well-established criteria for 
that public interest analysis. Similarly, NAB suggests that, had 
Congress chosen to, it could have omitted the phrase ``as the result of 
competition'' and simply instructed the Commission to determine whether 
a rule remains ``necessary in the public interest,'' thereby making 
competition co-equal with other public interest goals. NAB asserts that 
Congress's decision to do otherwise and to specifically mention 
competition was intended to single out one particular element of the 
public interest analysis. Contrary to NAB's position, however, it

[[Page 12200]]

does not follow that Congress's inclusion of the phrase ``as the result 
of competition'' indicates Congress intended to elevate competition 
among other traditional public interest goals. Rather, as we have 
explained, Congress's inclusion of the phrase ``as the result of 
competition'' reflects an ongoing statutory directive to the Commission 
to account for the results of an evolving competitive landscape in 
evaluating the continued necessity of its structural ownership rules to 
fulfill its public interest goals. This seems perfectly logical given 
the changes brought about, and envisioned, by the 1996 Act. As we 
discuss in more detail below and with respect to our individual rules, 
this involves evaluating whether the media marketplace has delivered--
and would continue delivering absent our rules--each of the public 
interest benefits of competition, localism, and viewpoint diversity 
that our rules seek to further. If not--that is, if the competitive 
marketplace would not deliver these benefits in the absence of our 
rules--we conclude that our rules still remain ``necessary in the 
public interest,'' and we cannot conclude that such rules are ``no 
longer in the public interest,'' even after accounting for the results 
of competition to date. Contrary to NAB's concerns, then, we do not 
interpret section 202(h) in a way that would ignore or read the word 
``competition'' out of the statute; instead, we interpret it in a way 
that gives meaning to that word in context. By contrast, we find that 
NAB's interpretation would read out the reference to the ``public 
interest,'' which even at the time of the 1996 Act, was a longstanding 
and well-known term in the context of the Commission's media 
regulation. Over the years, the Commission has further fleshed out that 
term in the context of the Quadrennial Review to encompass three 
tangible public interest goals--competition, localism, and viewpoint 
diversity--which have been further interpreted, articulated, and 
defined with substantial detail through the Commission's Quadrennial 
Review notices and orders. As such, contrary to NAB's arguments, we 
find that there is no non-delegation problem with our interpretation, 
because we are not interpreting our public interest mandate to be 
unmoored from any defined or articulable policy goal. Instead, we have 
articulated three clear and longstanding policy goals--competition, 
localism, and viewpoint diversity--that have long been aligned with the 
public interest standard applicable to the media marketplace. We find 
that this interpretation is consistent with how the Commission has 
applied the standard over time and best reconciles the two phrases 
within it--``necessary in the public interest'' and ``as the result of 
competition.'' Even if, for argument's sake, one accepts NAB's 
contention that section 202(h) is focused first and foremost on 
competition, it raises a subsequent question about what the threshold 
is for how much competition is necessary to justify elimination of a 
rule. Our consistent interpretation essentially speaks to that 
subsequent question, in that it asks if there is competition sufficient 
to produce the public interest benefits the Commission has 
traditionally looked to the rules to foster. Moreover, as we discuss 
below with regard to particular rules, we find that even under a 
competition-only standard, loosening our rules and allowing additional 
consolidation (or, under some proposals, unlimited consolidation) would 
cause substantial harm to the public interest. Moreover, despite NAB's 
interest in relitigating this issue, nothing in the Supreme Court's 
decision in FCC v. Prometheus warrants revisiting the Commission's 
established interpretation of section 202(h).
    22. To be clear, competition has always been, and remains, a key 
consideration in the Commission's Quadrennial Review process, but it is 
not the only consideration encompassed by the public interest standard 
or by section 202(h). As discussed below, we remain committed to 
examining the media marketplace, acknowledging new and additional forms 
of competition where they exist, and evaluating whether market forces--
as they have evolved--satisfy public interest objectives, such that our 
rules as currently devised are no longer ``necessary in the public 
interest as the result of competition.'' We note that NAB recommends 
the Commission review each ownership rule based upon the public 
interest rationale at the time it was adopted to see if competition had 
rendered it no longer necessary, and, according to NAB, once a rule is 
deemed to no longer serve a particular goal, the Commission should no 
longer test the rule's relationship to that goal. We do not think 
section 202(h) demands such a narrow approach--i.e., its quadrennial 
nature and the statutory reference to the ``public interest'' suggest 
an intent to be flexible in accounting for new, different, or changed 
rationales over time--and as NAB notes, historically, the rationales 
for certain rules have evolved over time as part of the quadrennial 
review process.
    23. Finally, even as we reaffirm here that our traditional policy 
goals of competition, localism, and viewpoint diversity continue to 
serve as the lodestars to guide us in our Quadrennial Review 
proceeding, we note that the Commission has traditionally also 
considered other aspects of the public interest, including the impact 
of its ownership rules on minorities and women. In particular, and as 
the Supreme Court noted in FCC v. Prometheus, ``[t]he FCC has also said 
that, as part of its public interest analysis under section 202(h), it 
would assess the effects of the ownership rules on minority and female 
ownership.'' While NAB challenges the notion of considering the impact 
of the media ownership rules on minority and female ownership in our 
quadrennial reviews, arguing that the Supreme Court did not say that 
the Commission has to consider minority and female ownership as part of 
the Quadrennial Review proceeding, we continue to find that our public 
interest standard is broad and that the impact of our rules on 
broadcast ownership by minorities and women remains an important part 
of our multi-factor public interest inquiry. Indeed, the Supreme Court 
did not say we have to consider any particular policy goal. In fact, as 
NAB notes and discussed above, the Supreme Court did not reach the 
question of section 202(h) interpretation at all. Under this precedent, 
we are not bound to consider the three traditional policy goals of 
competition, localism, and viewpoint diversity. Moreover, we do not 
have to consider minority and female ownership as an important part of 
our larger public interest goal of diversity (which, most notably and 
historically, includes viewpoint diversity). Nonetheless, the Supreme 
Court did not alter the Commission's discretion to consider these 
factors, in the manner we choose, and we elect in this proceeding, as 
the Commission has previously, to do so. Accordingly, as we have in the 
past, we continue to consider whether our current rules are consistent 
with (i.e., do not disserve) opportunities for minority and female 
ownership and whether any proposed changes to those rules would be 
likely to result in harm to minority and female ownership.
    24. In this way, consideration of the impact of our rules on 
minority and female ownership is related to, and consistent with, the 
broader aim of our structural ownership rules in ensuring the diffuse 
ownership of broadcast stations. As the Commission has noted in the 
past, a general policy goal of

[[Page 12201]]

diversity may encompass different forms of diversity. One central goal 
of our structural ownership rules, in particular, has been, and 
remains, promoting a diversity of viewpoints. Our rules do so by 
limiting the aggregation of stations in any single entity's hands and 
thereby fostering a multiplicity of speakers. The Commission, in 
general, also has recognized the disproportionately low number of 
stations owned by minorities and women and has embraced the objective 
of better understanding and addressing this situation. By limiting the 
aggregation of stations among a few owners, we continue to conclude 
that our existing ownership limits preserve ownership opportunities for 
many different types of owners, including minority and female owners.
    25. As has always been the case in the Commission's application of 
section 202(h), the public interest analysis required by the statute 
has been conducted as a multi-factor review in which no one factor is 
controlling. To the extent there are conflicts between competing goals 
(e.g., a rule or rule change would promote one factor while harming 
another), the Commission weighs the effects and determines whether, on 
balance, the rule serves the public interest. Consideration of minority 
and female ownership is no exception to that approach.
    26. We conclude that the record in the current proceeding does not 
establish concrete, affirmative steps the Commission can or should take 
with respect to our structural ownership rules to address concerns 
regarding minority and female ownership, but we remain committed to 
examining barriers to minority and female ownership of broadcast 
stations and expect that the upcoming 2022 Quadrennial Review 
proceeding will provide an opportunity to examine more specifically 
what can or should be done within the context of our structural 
ownership rules. In addition, we note that the Commission has taken 
several actions beyond its quadrennial reviews, such as improving its 
collection and analysis of broadcast station ownership information on 
FCC Form 323 and 323-E, and chartering the Communications Equity and 
Diversity Council (CEDC), that are intended to provide the Commission 
with more information about the state of minority and female broadcast 
ownership and to promote the important goal of increasing such 
ownership. Moreover, we remain committed, as Free Press suggests, to 
analyzing how changes to broadcast ownership rules may impact future 
opportunities for women and minorities. Indeed, the Commission's Office 
of Economics and Analytics recently conducted an analysis and released 
a white paper on minority ownership of broadcast television stations 
that will continue to inform our understanding of the television market 
and the diversity of ownership. And, as discussed below with respect to 
our rules, we find in this proceeding that our existing rules remain 
consistent with the objective of improving ownership diversity, 
including minority and female ownership, and would cause no harm.

IV. Media Ownership Rules

A. Local Radio Ownership Rule

    27. As explained below, we conclude that the Local Radio Ownership 
Rule--which limits both the total number of radio stations an entity 
may own within a local market and the number of radio stations within 
the market that the entity may own in the same service (AM or FM)--
remains necessary to promote the Commission's public interest goals of 
competition, localism, and viewpoint diversity, in accordance with our 
foregoing analysis. We therefore retain the current rule. The only 
modification we adopt is to make permanent the interim contour-overlap 
methodology long used to determine ownership limits in areas outside 
the boundaries of defined Nielsen Audio Metro markets and in Puerto 
Rico.
    28. We decline commenters' requests to modify our presumption 
regarding embedded markets adopted in 2017. Likewise, we reject calls 
to eliminate or ease the rule's ownership limits in an effort to help 
station owners stem the loss of listeners and advertising revenues. We 
take seriously the challenging circumstances confronting broadcast 
radio in today's media marketplace, but the record does not persuade us 
that further consolidation would meaningfully address the problems 
radio faces. Rather, additional consolidation within radio markets is 
not only likely to decrease competition, viewpoint diversity, and 
localism but also is inconsistent with our statutory mandate to 
disseminate licenses as widely as possible. Ultimately, we find that 
allowing one entity to own more radio stations in a market than 
currently permitted would harm competition without achieving the 
benefit sought by some of enabling station owners to compete more 
effectively with social media companies and national advertising 
platforms like Google and Facebook.
    29. The Local Radio Ownership Rule allows an entity to own: (1) up 
to eight commercial radio stations in radio markets with at least 45 
radio stations, no more than five of which may be in the same service 
(AM or FM); (2) up to seven commercial radio stations in radio markets 
with 30-44 radio stations, no more than four of which may be in the 
same service (AM or FM); (3) up to six commercial radio stations in 
radio markets with 15-29 radio stations, no more than four of which may 
be in the same service (AM or FM); and (4) up to five commercial radio 
stations in radio markets with 14 or fewer radio stations, no more than 
three of which may be in the same service (AM or FM), provided that the 
entity does not own more than 50% of the radio stations in the market 
unless the combination comprises not more than one AM and one FM 
station. The limitation on the number of stations an entity may own in 
a single service, AM or FM, is typically referred to as the subcap 
limit. Overlap between two stations in different services is allowed if 
neither of those stations overlaps a third station in the same service. 
When determining the total number of radio stations within a market, 
only full-power commercial and noncommercial radio stations are counted 
for purposes of the rule. Radio markets are defined by Nielsen Audio 
Metros where applicable, and the contour-overlap methodology is used in 
areas outside of defined and rated Nielsen Audio Metro markets. An 
exception to this market definition approach is Puerto Rico, where the 
contour-overlap methodology applies even though Puerto Rico is a 
Nielsen Audio Metro market.
    30. In its last quadrennial review, the Commission concluded that 
local radio ownership limits promote competition, a public interest 
benefit that the Commission found to be a sufficient basis for 
retaining the current rule. Additionally, the Commission affirmed its 
previous findings that competitive local radio markets help promote 
viewpoint diversity and localism, and it deemed the rule consistent 
with the Commission's goal of promoting minority and female broadcast 
ownership. Accordingly, the Commission retained the rule without 
modification, although it provided several clarifications regarding the 
rule's implementation. Subsequently, on reconsideration, the Commission 
adopted a presumption to use in evaluating transactions involving radio 
stations within embedded markets (i.e., smaller markets, as defined by 
Nielsen Audio, that are contained within the boundaries of a larger 
Nielsen Audio Metro market) where the parent market currently has 
multiple embedded markets (i.e., New York, NY and

[[Page 12202]]

Washington, DC). A transaction would qualify for the presumption if the 
applicants demonstrated: (1) compliance with the numerical ownership 
limits in each embedded market using the Nielsen Audio Metro 
methodology, and (2) compliance with the ownership limits in the parent 
market using the contour-overlap methodology applicable to undefined 
markets in lieu of the Commission's ordinary parent market analysis. 
The presumption supports waiving the numerical ownership limits in 
existing parent markets where an applicant can demonstrate both 
compliance with the numerical ownership limits in the embedded market, 
as well as compliance with the ownership limit using the contour 
overlap method. The Commission stated that the presumption would apply 
pending further consideration of embedded market transactions in this 
2018 quadrennial review.
    31. The NPRM asked generally whether the current Local Radio 
Ownership Rule remains necessary in the public interest to promote 
competition, localism, or viewpoint diversity. It also sought comment 
on several specific issues regarding the radio rule, including whether 
to retain the rule's current market definition, market size tiers, 
numerical limits, and AM/FM subcap limits. In particular, the NPRM 
sought comment on whether the Commission should make permanent use of 
the contour-overlap methodology for areas not within Nielsen Audio 
Metro markets. In addition, it asked about the treatment of embedded 
markets and the effect of the rule on minority and female ownership.
    32. For the reasons discussed below, we find that the Local Radio 
Ownership Rule remains necessary in the public interest as the result 
of competition. There is no question that the broader media environment 
within which broadcast radio operates has changed dramatically since 
the radio rule was enacted in 1996. Consumer choice in audio 
entertainment has grown with the launch of satellite radio, the 
introduction of audio streaming services, and the proliferation of 
podcasts. There is no consensus in the record, however, regarding 
whether changes to the Local Radio Ownership Rule would enable radio 
owners to respond to these developments more effectively, or even, if 
so, whether those benefits would outweigh potential harms to 
competition, localism, or viewpoint diversity. The commenters were 
deeply divided in their responses to almost every issue raised in the 
NPRM. As discussed below, after considering the conflicting arguments 
in the record, and the split that exists even within the radio 
industry, we agree with those commenters asserting that loosening the 
rule would harm competition to the detriment of listeners.
    33. Market Definition. As in the past, we continue to find that the 
relevant market to consider for purposes of the Local Radio Ownership 
Rule is the radio listening market. We further find that due to the 
unique characteristics of broadcast radio, it would not be appropriate 
to include satellite or non-broadcast audio sources, such as internet 
streaming services, in that market at this time. Notably, this finding 
is consistent with our findings in prior quadrennial reviews, where we 
looked at the unique characteristics of broadcast radio and the lack of 
substitutability with other audio sources, elements that remain 
fundamentally unaltered in spite of larger marketplace changes.
    34. Moreover, we find that the nature of the larger advertising 
market, in which advertising dollars have always flowed between 
different sectors in accordance with advertiser preferences, does not 
compel us to revise the way we view broadcast radio's unique place 
within the audio landscape or the distinct market within which radio 
stations operate. First, we note that the U.S. Department of Justice 
(DOJ) consistently has found broadcast radio advertising to constitute 
a distinct product market. We recognize that some local businesses may 
have shifted increasing shares of their advertising budgets to internet 
platforms, such as Facebook and Google, while at the same time buying 
fewer radio advertisements. We also note, however, that the broader 
reach of radio advertising offers different benefits than the targeted 
advertising offered by Facebook and Google, such that at least some 
advertisers do not view them as substitutes. In addition, recent data 
indicate that broadcast radio dominates listening among ad-supported 
audio sources. We find that, within the broader advertising ecosystem, 
there still remains a distinct broadcast radio advertising market, such 
that our existing rule promotes competition among local radio stations 
through competition for advertising dollars, as well as along other 
dimensions that directly benefit listeners (e.g., quality, choice of 
offerings, innovation, among others). Moreover, for the reasons stated 
below, it is primarily as a result of this competition that broadcast 
radio stations are spurred continually to look for ways to improve 
service to the listening public.
    35. Although we acknowledge, as commenters contend, that there is 
today a broader audio landscape that includes a variety of audio 
options for consumers, many of which did not exist a decade or two ago, 
we continue to find that within that broader landscape, free over-the-
air broadcast radio maintains a unique place and that radio stations 
compete primarily with other radio stations for listeners. Accordingly, 
we reject commenters' claims that we must revise our market definition 
to reflect the ``expanding universe of content providers'' and should 
include non-broadcast sources of audio content such as Sirius XM/
Pandora, Spotify, YouTube Music, Apple Music, and Amazon Music. As the 
Commission previously has found, although the broader marketplace for 
the delivery of audio programming includes satellite and online audio 
sources, along with traditional broadcast radio, there are significant 
differences in the availability, reach, consumer engagement, and cost 
of these services, such that they deliver different value propositions 
to consumers. Significantly, of the various options available in the 
broader audio marketplace, generally speaking, only terrestrial 
broadcast radio both is available without a paid subscription and does 
not require access to internet service. Not only does this 
accessibility make broadcast radio uniquely and widely available, it 
also makes it a lifeline for many Americans, especially in times of 
local emergencies. In its Fourteenth Broadband Deployment Report, the 
Commission determined that despite significant gains in delivering 
access to broadband, in 2019, at least 14.46 million Americans, or 
about 4% of the population, still lacked access to fixed terrestrial 
broadband service at a standard speed of 25/3 Mbps. Additionally, the 
Commission found that the adoption of fixed terrestrial broadband in 
the 10/1 Mbps speed tier was 67.2% among households in the quartile 
with the lowest poverty rate, versus 40.7% among households in the 
quartile representing the highest poverty rate. As commenters observe, 
radio is a trusted and essential source of public safety information 
during emergencies and in times of crises.
    36. We also continue to find that the local nature of broadcast 
radio makes it unique within the broader audio landscape. In 
particular, we note that broadcast radio is alone within the audio 
landscape in having an affirmative obligation to serve the needs and 
interest of the local community. As

[[Page 12203]]

part of their license obligations, each quarter, radio station 
licensees are required to submit a list of programs that treat issues 
faced by the local community. Such programs may include local news and 
public affairs programming. Moreover, there is evidence that being 
local is the defining value proposition that many radio stations see 
themselves as providing to consumers. As commenters point out, radio 
programming includes offerings with a community focus, such as program 
hosts that are known within the locality, music by local bands, 
reporting on local sports teams, and sponsorship of neighborhood 
festivals, which other audio services do not provide. As the 
Commission's 2022 Communications Marketplace Report states, ``promoting 
a local on-air personality as the `face' of a station may be an 
important way for a station to distinguish or brand itself from other 
stations in its market.''
    37. In addition, even with the emergence of new audio services and 
platforms, radio listenership remains strong and dominant within the 
broader audio marketplace in many key respects. Although commenters 
warn that the decline of radio listening during the pandemic is not 
likely to rebound to pre-pandemic levels, it is premature to determine 
whether the pandemic will have long-term effects on local radio. We 
find that forecasts of future declines of radio listenership and 
revenue are speculative, and therefore unreliable for the purposes of 
this review. Certainly, commenters provide some evidence that time 
spent listening to broadcast radio has declined, especially among 
younger audiences. Nonetheless, in 2018, Edison Research's ``Share of 
Ear'' report allocates the share of time spent listening to audio 
sources for Americans aged 13 years old and over as follows: 46% 
terrestrial broadcast radio, 14% streaming audio, 12% owned music, 11% 
YouTube, 7% SiriusXM satellite radio, 5% TV Music channels, 3% 
podcasts, and 2% other sources. Similarly, a more recent Share of Ear 
report indicated that, in 2021, the total share of time spent listening 
to AM/FM radio remained the highest at 38%, and the share of time spent 
listening to podcasts had risen to only 5%. Additionally, while the gap 
in usage between broadcast and online audio programming has declined 
over time, terrestrial broadcast radio remains dominant and the number 
of weekly listeners to broadcast radio in the United States remains 
relatively stable. Moreover, historically, easy access to AM/FM radio 
inside automobiles has been a distinctive characteristic and advantage 
of broadcast radio, and in-car radio listening has rebounded as people 
return to their cars following the height of the pandemic. By contrast, 
some commenters claim that radio's dominance over in-car listening is 
fading as Bluetooth and satellite radio capabilities become standard 
features in new cars. While there is no question that consumers are 
increasingly finding new audio sources to consume while driving, 
broadcast radio remains the clear top choice. Inside the home, we 
acknowledge there is a decreasing number of radios in households with 
the ubiquity of digital devices, like smartphones and smart speakers, 
that provide access to an array of audio content. Nonetheless, evidence 
further suggests that, even within the evolving marketplace, broadcast 
radio stations are embracing these new devices and finding additional 
ways to reach listeners.
    38. Ultimately, we agree with iHeart that ``competitive pressures 
across platforms within the audio ecosystem are not determinative of 
what is the relevant market'' for purposes of our Local Radio Ownership 
Rule. We reject NAB's suggestion that the relevant competition is for 
``the public's attention and time.'' Since its inception, radio has 
competed with other types of entertainment for the public's attention 
and time. Television, movies, books, newspapers, magazines, concerts, 
plays, and all manner of activities present consumers with countless 
options for how to spend their time or be entertained or informed. 
Today's consumers have a broad selection of audio options that can be 
accessed on an increasing number of devices, but that does not mean 
competition among local radio stations should be weakened or that 
consumers and advertisers consider non-broadcast options to be 
appropriate substitutes for local radio.
    39. As we have acknowledged, in recent years, the audio landscape 
has seen the growth of streaming music services that have amassed 
millions of subscribers. Nonetheless, there is evidence that consumers 
may be most directly substituting online audio services for what would 
once have been purchases of recorded music rather than for live, local, 
free broadcast radio, and that consumers still flock to broadcast radio 
for elements that other audio sources in the marketplace are not 
currently providing. For instance, while advertising dollars may have 
started to flow to other sources over time, in filings with the 
Securities and Exchange Commission (SEC), iHeart (the largest radio 
station owner by revenue, number of stations, and number of markets) 
suggests that within the broader audio marketplace, there are distinct 
sectors that vie separately for listeners, and in some respects, serve 
as complements to one another. Specifically, iHeart states:

    Within the audio industry, companies operate in two primary 
sectors: [1] The `music collection' sector, which essentially 
replaced downloads and CDs and [2] The `companionship sector, [in] 
which people regard radio and podcasting personalities as their 
trusted friends and companions on whom they rely to provide news on 
everything from entertainment, local news, storytelling, information 
about new music and artists, weather, traffic and more. We operate 
in the second sector and use our large scale and national reach in 
broadcast radio to build additional complementary platforms.

    As iHeart suggests, in general, broadcast radio continues to serve 
a distinct role in the marketplace by providing important 
entertainment, information, and ``companionship'' to listeners that 
other forms of audio content likely do not. Moreover, by contrast, 
online streaming services that offer access to tens of millions of 
songs and other audio tracks to listeners on demand are perhaps 
situated more directly as substitutes for traditional purchased music 
collections.
    40. For the reasons stated above, we find that the local radio 
listening market remains a distinct market for purposes of our Local 
Radio Ownership Rule analysis. We conclude that allowing further 
concentration within local radio markets would disserve listeners by 
jeopardizing the aspects of radio that make it a unique and appealing 
service.
    41. Market Size Tiers and Numerical Limits. Based on the record of 
this proceeding, we find that the Local Radio Ownership Rule as 
currently designed remains necessary in the public interest as the 
result of competition, and we reject proposals in the record to modify 
its market size tiers or numerical limits at this time. For example, 
NAB urges the Commission to repeal the radio rule entirely, or at a 
minimum, to loosen restrictions in the top 75 Nielsen Audio Metro 
markets to allow a single entity to own or control up to eight 
commercial FM stations, with no cap on AM ownership, and, outside of 
the top 75 Nielsen markets and in unrated markets, to allow a single 
entity to own or control an unlimited number of AM and FM stations. NAB 
also proposes that an owner in the top 75 markets be permitted to own 
up to two additional FM stations (for a total of 10 FMs) in a market 
after successfully participating in the Commission's incubator program. 
As discussed below, we find that the

[[Page 12204]]

existing rule continues to serve the public interest, that the record 
does not establish that permitting greater consolidation would benefit 
either the radio industry or the listening public, and that proposals 
to loosen the rule would reduce competition among broadcast radio 
stations to the detriment of listeners. For these reasons, we also 
reject various other proposals to relax the radio restrictions.
    42. We find that the current tiers and limits maintain an 
appropriate level of competition in the local radio markets to the 
benefit of listeners and the public. Ever since Congress established 
these demarcations more than two and a half decades ago, the Commission 
consistently ``has found that setting numerical ownership limits based 
on market size tiers remains the most effective method for preventing 
the acquisition of market power in local radio markets.'' We disagree 
with the notion that changes in the broader audio environment require a 
restructuring of the rule's market size tiers or numerical limits. Not 
only do we find that the current limits promote our policy goals, but, 
as discussed below we conclude that allowing further consolidation 
would not ensure that local radio stations retain their listeners and 
advertisers. In addition, we note that the market tiers that NAB 
proposes would be determined by the size of the population in the 
Nielsen Audio Metro market. The current rule uses Nielsen markets as a 
starting point, but its tiers depend on the number of radio stations in 
the Nielsen market, rather than on how many people live in the market. 
Because the rule limits the number of stations an entity may own within 
a local market, we find that the most consistent and relevant measure 
upon which to base the rule's tiers is the total number of stations in 
the market, a concept that has been applied as part of the rule for 
many years, is well understood, and provides a degree of certainty to 
applicants. Under the rule, if there are more total stations in a 
market, an entity can own more stations. In effect, this ensures that a 
certain number of stations in a market would not be owned by a single 
entity. By contrast, NAB's proposal would permit ownership of eight 
stations in each of the top 75 markets as ranked by population, 
regardless of the total number of stations (or number of stations 
available to be owned by other entities) in the market. NAB's proposal 
to eliminate all ownership limits in most markets and retain only FM 
limits in the largest 75 markets would represent a radical departure 
from the existing numerical limits and would allow an increase in 
consolidation that would significantly decrease existing competition.
    43. Commenters in favor of loosening radio ownership limits suggest 
that the broadcast radio industry, in general, is in dire need of 
relief and contend that its viability may be at stake if additional 
consolidation is not permitted. Other commenters, however, assert that 
the survival of the radio industry depends on keeping ownership limits 
in place to prevent massive consolidation that could result in a few 
national owners buying all or most of the stations in a market and 
piping in preset programming from distant headquarters. These 
commenters contend that relaxing the rule to ``save'' radio under NAB's 
plan would have the opposite effect: destroying what is the very 
essence of local radio. We recognize that the record contains evidence 
showing that broadcast radio has experienced declines in listening 
shares and in advertising revenues in recent years, while streaming 
audio has seen growth in both areas. We further realize that broadcast 
radio, like other industries, has faced and continues to face 
challenges as technologies, market dynamics, and consumer behaviors 
evolve. Notwithstanding these challenges, we continue to find, as 
compelled by the instruction of section 202(h), that the current 
structure of the ownership rule remains necessary to promote the 
Commission's public interest goals. Moreover, we note that in any 
action that affects licensing, the Commission must be mindful of 
Congress' directive to avoid excessive concentration of licenses and to 
disseminate licenses widely. Allowing all radio stations in a market to 
be licensed to one entity would demand an exceptional justification 
given this directive. In FCC v. Prometheus, the Supreme Court 
recognized the Commission's longstanding policy of ``ensuring that a 
small number of entities do not dominate a particular media market.'' 
In any event, we remain highly skeptical that permitting additional 
consolidation beyond that currently allowed under our rule is warranted 
or would address radio's stated woes.
    44. For one thing, as we note above, broadcast listenership within 
the broader audio landscape remains relatively strong despite declines 
in radio's popularity. In addition, broadcast radio revenue--the 
lifeblood of the industry--has shown signs of stability over the past 
decade. As the Commission found in its most recent Communications 
Marketplace Report, ``the primary source of revenue for commercial 
terrestrial radio stations is advertising'' and while ``total broadcast 
radio revenue dropped to $13.7 billion in 2020,'' revenue then ``rose 
to $14.8 billion in 2021, resulting in a net decline of approximately 
17% from 2019 to 2021, due largely to the drop in demand for 
advertising due to the COVID-19 pandemic.'' In fact, broadcast radio 
advertising revenue remained virtually flat from 2010 to 2019, which 
obviously is not preferable to steep growth, but also is not indicative 
of a prolonged or pronounced decline. Moreover, as broadcast radio 
companies expand into other parts of the audio marketplace (streaming, 
podcasts, etc.), online revenue for broadcast radio has seen 
substantial growth and stands as an ``area of potential growth'' going 
forward. Perhaps tellingly, the total number of broadcast radio 
stations remained fairly steady, and actually increased slightly, 
between 2015 and 2020, suggesting there has not been a massive 
shuttering of radio stations due to financial stress.
    45. We understand that radio stations depend on advertising 
revenues to survive and to provide free, over-the-air programming, as 
they have since the inception of broadcasting. However, evidence does 
not appear to show that owning more stations necessarily correlates to 
being able to attain proportionally more revenue (i.e., the number of 
owned stations and the net advertising revenue per station vary 
considerably among the top ten largest radio companies by net 
advertising revenue). While we recognize that adding more stations to a 
radio owner's local holdings may offer some benefit to the owner, 
including the ability to reduce costs, it would come at a tradeoff to 
the public interest, and we agree, moreover, with those commenters who 
contend that it would not reverse the overall downward trend in the 
amount of time that American consumers spend listening to broadcast 
radio or encourage local advertisers to increase their radio 
advertising budgets, both of which our rule cannot address. Although 
NAB and others provide evidence that broadcast radio is losing 
advertising revenue to online platforms and digital audio, we find that 
greater consolidation is unlikely to improve the ability of local radio 
owners to regain their advertising losses, particularly given the 
dissimilar value propositions that they and large technology companies 
offer to advertisers. We agree with those commenters who assert that if 
further consolidation were allowed, smaller and independent radio 
stations could be

[[Page 12205]]

sacrificed needlessly based on an unrealistic premise that ever larger 
radio owners are the answer to compete for advertising on a level 
playing field with large technology companies. Or as one commenter put 
it, radio ``will never out-Google Google, or out-Facebook Facebook.''
    46. In any event, our conclusion that the current radio rule 
remains necessary in the public interest as the result of competition 
rests on the premise that the listening public is the constituency that 
the rule is intended to serve. The purpose of the rule is to ensure 
competition among broadcast radio stations within a market so that 
radio owners are motivated to provide the highest quality of service to 
the public. Reducing the number of competitors in a local market puts 
that quality of service at risk, threatens viewpoint diversity, and may 
reduce the amount of local programming available. Some commenters 
contend that if an owner is allowed to acquire the competing stations 
in a market, it will diversify the programming formats on its newly-
acquired stations because it will not want to compete with itself. One 
has to question, however, whether that owner would maintain the same 
quality of service on its stations without facing external competition 
from other station owners. Furthermore, evidence in the record suggests 
that as the radio industry has become more consolidated over time, some 
types of formats have been reduced.
    47. Notably, the existing rule already allows a generous amount of 
common ownership within a radio market and does not limit ownership 
across markets, nor, any longer, across other media such as newspapers, 
television stations, or cable systems. For example, in the largest 
radio markets, one owner may own as many as eight radio stations, and 
up to five in the same service, and that same owner is permitted to own 
stations up to the limit in every local market in the country. 
Moreover, since the passage of the 1996 Act, considerable consolidation 
already has taken place within the radio industry, and there is 
mounting evidence that it has not been without at least some negative 
effects for consumers. As some commenters observe, such consolidation 
has resulted in the homogenization of content; less local programming; 
fewer market entry opportunities for new or small owners, including 
minorities and women; employee layoffs; and competitive harm to the 
smaller station owners striving to remain in the market. The result is 
that, even under the current Local Radio Ownership Rule, there are some 
radio companies with hundreds of radio stations around the country and 
many radio markets are already quite concentrated, a fact that the 
Commission highlighted in the last quadrennial review.
    48. For instance, we find that within local radio markets, the 
largest station group owners continue to dominate other radio stations 
in terms of audience and revenue share. Specifically, evidence shows 
that the largest owners of commercial stations continue to enjoy 
substantial advantages in revenue share--on average, the largest 
station group in each Nielsen Audio Metro market has a 46.7% share of 
the market's total radio advertising revenue, with the two largest 
owners accounting for 73.9% of the revenue. In more than a third of all 
Nielsen Audio Metro markets, the top two commercial station owners 
control at least 80% of the radio advertising revenue. According to BIA 
data, in the 50 largest markets, on average, the top two firms account 
for 62.3% of radio advertising revenue in the market; in the 100 
smallest markets, on average, the top two firms account for 81% of 
market revenue. With respect to ratings, the top four station group 
owners continue to dominate audience share. BIA data indicate that the 
four firm market concentration ratios (i.e., the percentage of audience 
share attributed to the four largest firms in the market) average 97.2% 
in smaller markets and 89.7% in the 50 largest markets. Even without 
accounting for the market shares of station groups beyond the largest, 
these data reflect the high level of concentration in local radio 
markets, where on average the top station group owner's advertising 
revenue share hovers between 40 and 50 percent. We therefore do not 
find that the current rule is overly burdensome or unduly restrictive, 
or that relaxing the existing numerical limits would promote 
competition in a manner that would be consistent with the public 
interest. The Herfindahl-Hirschman Index (HHI) is a commonly accepted 
measure of market concentration. The HHI is calculated by squaring the 
market share of each firm competing in the market and then summing the 
resulting numbers. For example, for a market consisting of four firms 
with shares of 30, 30, 20, and 20 percent, the HHI is 2,600 (302 + 302 
+ 202 + 202 = 2,600). The U.S. Department of Justice (DOJ) and Federal 
Trade Commission (FTC) generally consider markets in which the HHI is 
between 1,500 and 2,500 points to be moderately concentrated and 
consider markets in which the HHI is in excess of 2,500 points to be 
highly concentrated. Under an HHI analysis, in a market where the 
market share leader has a share in excess of 50%, the market would be 
considered highly concentrated on the basis of that one firm alone 
(i.e., 502 = 2,500). In a market where the market share leader has a 
share in excess of roughly 40%, the market would be considered 
moderately concentrated on the basis of that one firm alone (i.e., 402 
= 1,600). Arithmetically, the addition of other firms' market shares 
would not make the market any less concentrated under an HHI analysis, 
as all market shares, no matter the quantity or size, are additive to 
the total HHI value for the market and that value would only increase 
with the addition of market share information for other firms.
    49. Indeed, we find that the current rule remains a backstop 
against further excessive consolidation. When the Commission repealed 
the Radio/Television Cross-Ownership Rule in 2017, it reasoned that any 
negative effects would be mitigated by the continued operation of the 
Local Radio and Local Television Ownership Rules, which would act as 
constraints on undue concentration. There is some evidence that, 
although a considerable amount of consolidation has occurred, the rule 
has prevented further excessive consolidation. For instance, although 
the market share information cited above reflects a high degree of 
concentration among the largest firms, it also appears that those 
numbers have remained fairly stable for the past decade or so under the 
existing ownership limits. For instance, the average advertising 
revenue market share of the largest station group in each market 
increased only slightly from 45% in 2012 to approximately 47% in 2022. 
Similarly, the combined market share for the top two station owners 
increased from 73% in 2012 to approximately 74% in 2022.
    50. On the other hand, NAB's proposal of eliminating all limits in 
most markets and retaining only FM limits in the largest 75 markets 
would exacerbate the dominance of the larger firms. It would permit 
consolidation to the level of monopolization or near monopolization in 
many, if not most, markets. It would mean, for many markets, the 
potential to move from moderately concentrated today, under traditional 
antitrust standards, to another level of concentration altogether, and 
for others that are already highly concentrated, it would mean making 
them even more so. For instance, based on 2021 data from BIA Kelsey 
Media Access Pro, HHIs for advertising revenue share in radio

[[Page 12206]]

markets finds that there is one market with low concentration, 49 
markets that are moderately concentrated, and 203 markets that are 
highly concentrated. For listening share among commercial stations, 
there are no markets with low concentration, 40 markets that are 
moderately concentrated, and 213 markets that are highly concentrated. 
Under NAB's proposal, every one of these 253 markets would carry the 
risk of becoming highly concentrated or becoming even more highly 
concentrated if already so. Practically speaking, this effect could be 
particularly pronounced in the smallest markets (i.e., those outside 
the top 75) where NAB's proposal to remove limits altogether would 
represent a radical departure from the current limits. For instance, 
most of the 178 markets outside the top 75 would be classified in one 
of the two smallest tiers per our existing rule (Tier 3 or Tier 4), 
with the majority (108) being considered Tier 3 and having, on average, 
10.3 commercial FM stations. Under NAB's proposal, then, in those 108 
markets, an owner could increase its ownership from a maximum of four 
FM stations today to ten or more FM stations (or all such stations in 
the market). The potential effect on competition inherent in NAB's 
proposal--which, as noted, is substantial--does not even account for 
any practical administrative difficulties that could be present with 
transitioning to a completely new approach to radio limits that sets a 
size cutoff based on Nielsen ranking (by households) rather than the 
number of stations in a market.
    51. Surely, further consolidation could have benefits for certain 
radio owners, but such benefits are not worth the cost of the real and 
likely harms that would result to the listening public from a further 
reduction in competition. In particular, we find that undue 
consolidation is likely to lead to radio stations becoming less 
responsive to the needs and interests of their local communities. As 
the Commission has noted previously, ``[b]ecause stations have a duty 
to serve the needs of their local communities, localism has been a 
cornerstone of broadcast regulations for decades.'' We find that the 
cost pressures and incentives associated with consolidation could be 
expected to work against the provision of programming responsive to 
local issues. Specifically, we think the cost incentives in favor of 
repurposing content on multiple stations--a practice that would be 
expected to expand with ownership of more stations in local markets--
would work against vigorous competition for service responsive to local 
needs.
    52. In addition, we note that some commenters raise concerns about 
the effects that loosening limits on FM ownership could have on the AM 
band. Specifically, commenters opposing NAB's proposal argue that 
eliminating the FM limit in the majority of radio markets and raising 
it from five to eight stations in the largest 75 markets would devalue 
the AM band by causing the migration of AM station owners to the FM 
band. They argue that migrating AM station owners would take audiences, 
advertising, programming, investment of capital, resources, and talent 
with them. They assert that the result would be counterproductive to 
the Commission's AM revitalization efforts and would undermine the 
Commission's incubator program by removing or reducing the incentive to 
participate in the program. NAB counters that its proposal, in fact, 
would promote AM revitalization by allowing owners to acquire more AM 
stations. It contends that radio stations in smaller markets need the 
regulatory relief its proposal would provide and that AM stations, in 
particular, are struggling. Because we decline to adopt NAB's proposal, 
we need not reach a determination on whether the proposal would have a 
deleterious impact on the AM band due to a purported exodus of owners 
that commenters claim would occur.
    53. We acknowledge that even under the existing rule there may be 
instances in which smaller owners are increasingly finding it difficult 
to remain viable in the current radio industry (a fact that is perhaps 
not surprising given the dominance of the largest firms). While NAB and 
others present this as a rationale in favor of further consolidation, 
i.e., to allow larger firms to buy struggling smaller firms, we 
disagree. Rather, we agree with those commenters that assert that 
loosening the current rule would result in the disappearance of smaller 
stations from the market entirely, either because they would be more 
vulnerable to acquisition or because they would be unable to compete 
with the larger station groups that would expand their dominance if 
further consolidation was permitted. Excessive aggregation through 
acquisition of stations of any size disserves our policy goals of 
competition, diversity, and localism. In any event, we continue to find 
that there is ample leeway under the current rule for additional 
consolidation within limits. For instance, in looking at the ten 
largest radio station owners (by net advertising revenue), none has an 
average of more than five radio stations per market, suggesting there 
are markets where these companies could acquire additional stations, 
even under the current rule. What the current rule does constrain, 
however, is the further aggregation of market share by an already 
dominant firm in a local market. Put another way, even if it would be 
efficient for a struggling firm to exit the market, it does not follow 
that an in-market competitor has to be, or should be, the one to 
acquire that firm. Instead, we find that a new entrant (or at least a 
new market entrant) would be preferable from the perspective of 
competition and diversity, and our current rule is conducive to such an 
outcome. The ten largest radio station owners, on average, own stations 
in 43 markets, suggesting there may be more markets they could enter to 
pursue cost efficiencies and economies of scale under the current rule.
    54. AM/FM Subcaps. We conclude that, like the market tiers and 
associated ownership limits, the sub-limits on AM and FM ownership 
within the Local Radio Ownership Rule also remain necessary in the 
public interest given the current audio marketplace. The radio rule's 
AM/FM subcaps limit the number of radio stations from the same service, 
i.e., AM or FM, that an entity may own in a single market. Currently, a 
broadcaster may not own more than five AM or five FM stations in 
markets in the largest market tier, four AM or four FM stations in 
markets in the two middle-sized tiers, or three AM or three FM stations 
in markets in the smallest tier. These subcaps, which were set by 
Congress in 1996, are intended to prevent excessive concentration in a 
particular service, to foster market entry, and to promote competition 
by accounting for the technological and marketplace differences between 
AM and FM stations.
    55. We find that the AM/FM subcaps continue to serve these 
purposes. The subcaps help prevent excessive common ownership of either 
AM or FM stations in a local market. Retaining a cap specific to FM 
stations addresses the concerns of commenters that relaxing or removing 
the FM subcaps potentially could cause AM stations to migrate to the FM 
band, resulting in a diminished AM band where lower-cost market entry 
opportunities for small owners, including minorities and women, are 
most likely. Moreover, despite the growing use of FM translators to 
transmit AM signals and the transition of some AM stations to digital 
radio, disparities between the AM and FM services persist. iHeart 
provides evidence that the number of AM stations has declined while the 
number

[[Page 12207]]

of FM stations has increased, and it states that quantitative data for 
audience listening and advertising revenue demonstrate ``a large and 
increasing competitive gap between AM and FM radio stations'' from 2010 
to 2018. In the interest of preventing undue concentration among local 
stations in either band, we reject the proposals in our record aimed at 
modifying or eliminating the rule's subcaps.
    56. Though iHeart and other commenters contend that elimination of 
the AM subcap would provide needed relief to the struggling AM band 
without risk of harming competition, we disagree. iHeart's proposal to 
remove all limits and subcaps on AM stations while retaining all 
current limits and subcaps on FM stations would not create a risk of 
migration of AM owners to the FM band, which is one concern that has 
been raised regarding FM deregulation. However, we agree with those 
commenters who contend that AM deregulation would allow large owners of 
AM stations to buy up the smaller AM stations in their markets and 
could lead to excessive concentration within the AM band. iHeart 
asserts that there is no longer a risk of concentration in the AM band 
given ``increasingly steep declines in audience listening to AM 
stations and the continuing erosion of advertiser revenue experienced 
by AM stations, especially when compared to FM stations.'' However, we 
find that although AM stations overall tend not to achieve the ratings 
or revenues of FM stations, this disparity is by no means a universal 
truth. For instance, in each of the top five markets, there is an AM 
station among the top three stations in revenue. Additionally, 
throughout the 253 Nielsen Audio Metro markets, there are 124 a.m. 
stations ranked in the top five in terms of all-day audience share, or 
approximately 10% of all top-five stations in those markets. 
Specifically, across all 253 Nielsen Audio Metro markets, there are 
1,265 total stations that would be ranked in the top five (discounting 
any potential ties for the number five ranking), which means that AM 
stations account for approximately 9.8% percent of the top five 
stations in these markets. So although, in general, FM stations may 
continue to enjoy some competitive advantages over AM stations, there 
continue to be many strong AM stations and AM remains a vital service. 
Further, four out of the top ten (and seven out of the top twenty) 
radio stations in the United States (as ranked by net advertising 
revenue for 2021) are AM stations. Therefore, it cannot be presumed 
that AM stations would not be targets for acquisition if AM 
restrictions were eliminated. Regardless, even in markets where AM 
stations are not among the highest-ranked stations in the market, the 
AM limits and subcaps promote a competitive AM band by preventing 
excessive concentration.
    57. In addition, we find that reduced competition in the AM band 
would threaten the band's distinctive qualities. Notably, some 
commenters observe that the AM band, in particular, includes more small 
broadcasters than the FM band, including minority and female licensees, 
and that it is important to preserve that diversity of ownership. AM 
stations also include more Spanish and Ethnic, News, Sports, and Talk 
formats relative to FM stations. Despite competitive developments that 
have continued to affect the AM and FM bands, relative to each other, 
we find that the public interest benefits of maintaining diffuse 
ownership within the AM and FM bands continue to support retaining the 
AM and FM subcaps.
    58. Methodology for Determining Compliance in Non-Nielsen Audio 
Markets. We will make permanent the Commission's contour-overlap 
methodology that has been used on an interim basis to determine 
compliance with ownership limits in areas that are not within defined 
Nielsen Audio Metro markets. At the time the Commission adopted the use 
of Nielsen Audio Markets (formerly Arbitron Metro markets), it 
acknowledged that not all portions of the country fall into a market 
area defined by Arbitron or later Nielsen. In fact, a significant 
portion of the country, both in terms of geography and population is 
not located in such rated/defined markets, meaning that another method 
must be employed in those instances to determine the number of stations 
in a given market. Accordingly, the Commission previously stated that 
it would continue to use the former ``contour-overlap methodology'' to 
determine the relevant geographic market for purposes of ascertaining 
compliance with the relevant radio ownership market tiers and caps. In 
adopting the Arbitron Metro (now Nielsen Audio Metro) market definition 
for purposes of the radio rule in the 2002 Biennial Review Order, the 
Commission stated that the contour-overlap methodology would continue 
to apply to undefined markets on an interim basis while it explored the 
potential for a better substitute. While the Commission continued to 
apply the methodology on an interim basis, it adopted changes to the 
methodology that minimized what it found to be the more problematic 
aspects of that approach. Specifically, the Commission excluded from 
the market calculation radio stations that are commonly owned with the 
stations seeking to be combined and radio stations whose transmitter 
site is more than 92 kilometers (58 miles) from the perimeter of the 
mutual overlap area. Under this approach, the relevant geographic 
market is defined by the cluster of stations with overlapping signal 
contours of a given strength. The contour-overlap methodology for 
defining radio markets and counting the radio stations that are in 
those markets uses the principal community contours of the commercial 
radio stations that a party seeks to own. The relevant radio market is 
defined as the area encompassed by the principal community contours of 
the commonly owned radio stations whose contours mutually overlap. 
Principal community contours also are used to count the number of radio 
stations in a radio market, that is, to determine the size of the 
market for purposes of applying the ownership limits. Specifically, in 
addition to the radio stations whose contours form the market, any 
station whose principal community contour intersects the market is 
considered to be in the relevant market. Although the Commission was 
initially critical of the contour-overlap methodology, and indeed 
abandoned it in favor of using markets defined by Arbitron or Nielsen 
ratings where such markets exist, it has continued to use the approach 
now on an ``interim'' basis for nearly 20 years for those areas that 
fall outside a rated market. In that time, and in various quadrennial 
proceedings, the Commission has invited commenters to offer 
alternatives to the methodology for use in non-rated areas, but 
ultimately has found no reason to revisit the approach. Rather, it has 
found previously that the revised contour-overlap methodology appeared 
to be working well.
    59. Seeking to resolve the issue once and for all, and either 
remove the ``interim'' label or else find a suitable replacement, the 
Commission once again called for any potential alternatives to the 
contour-overlap method in the NPRM. The record neither offers any new 
alternative to the method, nor any opposition to its continued use in 
those areas of the country that are outside of a rated Nielsen Audio 
Market. Accordingly, because we find that the approach has worked 
sufficiently well for the past 20 years and is familiar to both radio 
broadcasters and Commission staff, we will make permanent the 
Commission's

[[Page 12208]]

contour-overlap methodology that has been used on an interim basis to 
determine ownership limits in areas that are not within defined Nielsen 
Audio Metro markets. Therefore, going forward, parties proposing a 
radio station combination involving one or more stations whose 
communities of license are not located within a Nielsen Audio Market 
must show compliance with the local radio ownership rule using the 
contour-overlap methodology.
    60. Embedded Markets. We decline requests from commenters to modify 
our presumption regarding embedded markets, which was originally 
adopted in 2017 and made applicable pending further consideration of 
embedded market transactions in this 2018 Quadrennial Review 
proceeding. We now complete our 2018 Quadrennial Review and retain the 
presumption in its current form. As described above, embedded markets 
are smaller markets, as defined by Nielsen Audio, that are contained 
within the boundaries of a larger Nielsen Audio Metro market. In 
general, entities seeking to acquire a radio station in an embedded 
market must satisfy, separately, the numerical limits of the Local 
Radio Ownership Rule for both the embedded market and the overall 
parent market. In addition, our current policy includes a presumption 
in favor of waiving the general rule for radio stations in embedded 
markets where the parent market contains multiple embedded markets, 
provided two conditions are satisfied: (1) compliance with the 
numerical ownership limits using the Nielsen Audio Metro methodology in 
each embedded market, and (2) compliance with the ownership limits 
using the contour-overlap methodology applicable to undefined markets--
in lieu of evaluating compliance with the numerical limits in the 
overall parent market. Currently, the only two markets for which the 
presumption is relevant--i.e., parent markets that contain multiple 
embedded markets--are New York, NY, and Washington, DC, and application 
of the presumption is limited to these markets.
    61. We find that the record, and the lack of applications received 
to date, supports not making any changes to our embedded markets 
policies at this time. In particular, we reject suggestions that we 
eliminate the policy that counts an embedded market station in both the 
embedded market and in the parent market in favor of counting embedded 
market stations only within an embedded market. In addition, we reject 
the suggestion that the waiver presumption should be extended to any 
and all future situations with multiple embedded markets, beyond New 
York and Washington, DC. Instead, after evaluating the presumption in 
the 2018 Quadrennial Review proceeding, we retain the presumption in 
its current form. We agree that Connoisseur Media and others have 
demonstrated evidence in the past that embedded market stations 
primarily compete for listeners within the confines of their own 
embedded market, that is, against stations located within their own 
embedded market and those stations located in the main city of the 
parent market whose signals reach the embedded market (but not against 
stations in other embedded markets). It is precisely for these reasons 
that the Commission adopted the presumption in 2017. Nonetheless, we 
find that the proposal not to count embedded market stations toward an 
entity's compliance with the limits in the parent market could lead to 
excessive concentration, allowing a single owner to combine parent 
market stations together with those in embedded markets in a way that 
harms competition within the embedded market. For instance, within the 
New York, NY parent market, suppose an entity owns eight stations, four 
in each of two embedded markets. If those stations do not count toward 
the limits in the parent market, then the entity would be free to 
acquire up to eight non-embedded stations in the New York, NY parent 
market. If, as Connoisseur Media claims, New York parent market 
stations compete for listeners in outlying embedded markets, then this 
change could effectively allow an entity to own a total of sixteen 
stations, twelve of which, according to Connoisseur Media's claims, 
would be competing in each of two embedded markets (i.e., the four 
embedded market stations each competing within their respective 
embedded markets as well as the eight non-embedded parent market 
stations that presumably compete in each of the two embedded markets as 
well). Moreover, absent further experience with the existing 
presumption in practice, we remain unconvinced that there is a 
demonstrated need, or that it would be wise, to adopt additional 
flexibility at this time. For these same reasons, we decline to 
automatically extend the waiver presumption to all future situations 
involving multiple embedded markets.
    62. When the Commission adopted the embedded market presumption in 
2017, it stated that the presumption would ``give Connoisseur--and 
other parties--sufficient confidence with which to assess possible 
future actions.'' We find that this continues to be the case, as the 
presumption favors an entity's ability to invest in multiple embedded 
markets without the stations it owns in one embedded market counting 
against its ownership of stations in the other. Moreover, the 
Commission anticipated that future transactions utilizing the 
presumption would ``help inform our subsequent review of . . . the 
treatment of embedded market transactions.'' In fact, however, during 
the time since 2017 that the presumption has been in effect, no party 
has filed an application seeking to avail itself of the presumption. 
Moreover, the record in this proceeding contains no evidence to 
indicate that the current presumption is deterring such transactions or 
that that the presumption would be inadequate to facilitate their 
successful completion where the criteria of the presumption could be 
met. As a result, we find that the Commission is providing sufficient 
flexibility and certainty to prospective applicants and that we do not 
have any further experience or information supporting further policy or 
rule changes at this time. With regard to Connoisseur Media's 
suggestion that our policy should apply to all future parent markets 
with multiple embedded markets, we find that it would be speculative 
and premature to consider how we will apply the presumption to all such 
future markets without understanding the particular competitive 
dynamics of those markets. As Connoisseur Media claims, the drawing of 
embedded markets is, at least in some sense, a function of geography, 
such that the competitive dynamics of future markets may or may not 
resemble those of the current two to which the presumption applies. It 
is possible that, even if applied to other markets, the presumption 
could be overcome by factors in future markets that we have not 
observed in the New York, NY or Washington, DC markets.
    63. Minority and Female Ownership. We find that the record provides 
no reason for the Commission to reevaluate its conclusions in the 2010/
2014 Quadrennial Review Order that the current Local Radio Ownership 
Rule remains consistent with the Commission's goal of promoting 
minority and female ownership of broadcast radio stations. We retain 
the rule for the reasons stated above, particularly to promote 
competition among broadcast radio stations in local markets. The record 
does not contain persuasive evidence that relaxing the rule would boost 
minority or female radio ownership. To the contrary,

[[Page 12209]]

several commenters contend that loosening ownership restrictions could 
make it more difficult for minority and women owners to remain and/or 
to enter the local radio market. For example, NABOB opposes any changes 
to the local radio ownership rule and notes that increased 
consolidation of ownership in the broadcast industry reduces 
opportunities for minorities to enter the business or to grow. In 
contrast, NAB states that the best way to encourage broadcast ownership 
by new entrants, including minority and female owners, is to ensure 
access to capital and argues that the existing rule impedes investment 
in broadcasting by making other unregulated forms of media more 
attractive. We note that a balance must be struck between incentivizing 
investment in broadcasting and ensuring that station-buying 
opportunities exist for new entrants. We find that the existing rule 
strikes the appropriate balance, especially considering that investment 
by new entrants is less likely in a market that is highly concentrated. 
We note that simply eliminating ownership limits would allow more 
consolidation. We also share commenters' concerns that allowing greater 
consolidation could increase the challenges many of these relatively 
smaller stations face in competing for revenue in the marketplace and 
could reduce opportunities for new entrants, including minority and 
women owners, to participate in the market.
    64. In this context, we note, as discussed above, that the 
Commission has taken several actions, such as improving its collection 
and analysis of ownership information on FCC Form 323/323-E, exploring 
access to capital through its re-chartered CEDC, and implementing the 
radio incubator program, that are intended to provide the Commission 
with more information about the state of minority and female broadcast 
ownership, or that seek to further the important goal of increasing 
minority and female ownership, objectives to which we remain committed.
    65. Cost-Benefit Analysis. The NPRM asked how the Commission should 
compare the benefits and costs of retaining, modifying, or eliminating 
the Local Radio Ownership Rule. As discussed above, commenters disagree 
regarding whether rule modifications would enable radio owners to 
respond more effectively to changes in the broader audio environment, 
or even, if so, whether any such benefits would outweigh potential 
harms to competition, localism, or viewpoint diversity. For all the 
reasons explained above, we conclude that any potential benefits that 
further consolidation might offer larger radio owners are outweighed by 
potential costs to the consumer stemming from such harms as weakened 
competition within the local broadcast radio market, increased 
homogenization of content, less local programming, the disappearance of 
stations from the market, and fewer opportunities for new and diverse 
market entrants.

B. Local Television Ownership Rule

    66. In this section, we retain the existing Local Television 
Ownership Rule subject to minor modifications. As an initial matter, we 
find that the rule remains necessary to promote the Commission's public 
interest goals of competition, localism, and viewpoint diversity. 
Specifically, we find that the Local Television Ownership Rule remains 
necessary to promote these goals given the unique obligations broadcast 
licensees have as trustees of the public's airwaves to serve their 
local communities.
    67. In reaching our conclusion, we find that the relevant market 
for the rule should continue to focus on broadcast television stations, 
as no other source of video programming provides a substitute for 
broadcast television, and we retain the current numerical ownership 
limits. We also retain as a condition of common ownership that a 
broadcaster cannot acquire two stations ranked in the top four in 
audience share in a market--known as the Top-Four Prohibition--unless, 
at the request of an applicant, the Commission finds that such an 
acquisition serves the public interest, convenience, and necessity on a 
case-by-case basis. The Top-Four Prohibition does not prohibit a 
broadcaster from ending up with two top-four stations through organic 
growth. But we modify the methodology of the Top-Four Prohibition to 
reflect better the current state of broadcast industry practices. 
Specifically, as detailed further below, under the revised Local 
Television Ownership Rule adopted herein, a television station's 
audience share ranking in a Nielsen Designated Market Area (DMA) will 
be determined based on the combined audience share of all free-to-
consumer, non-simulcast multicast programming airing on streams owned, 
operated, or controlled by that station as measured by Nielsen Media 
Research or by any comparable audience ratings service. The Nielsen 
Company assigns each broadcast television station to a designated 
market area (DMA). The DMA boundaries and DMA data are owned solely and 
exclusively by Nielsen. Each DMA is a group of counties that form an 
exclusive geographic area in which the home market television stations 
hold a dominance of total hours viewed. There are 210 DMAs, covering 
the entire continental United States, Hawaii, and parts of Alaska. Some 
station owners simultaneously broadcast the primary programming stream 
of a second station they own on the nonprimary multicast stream of the 
other station they own in the same market. A nonprimary multicast 
stream is typically designated by appending a ``.2'' or greater digit 
to the channel number to distinguish such streams from a station's 
primary stream which usually is designated with a ``.1'' suffix. We 
update the relevant daypart used to make audience share and ratings 
determinations to the metric that, based on Commission experience and 
consultation, most accurately reflects a station's true performance 
given changes in the broadcast industry. Because the same daypart is 
also used to make audience share and ratings determinations in the 
context of failing stations waivers as provided in Note 7 to section 
73.3555 of the Commission's rules, we find that our update to the 
methodology of the Top-Four Prohibition logically leads us to update 
also the failing station waiver methodology with respect to the daypart 
used. We also specify a definite time period over which ratings data 
should be averaged to minimize the impact of anomalous ratings periods.
    68. In addition, we extend a previously adopted measure in order to 
prevent further circumvention of the Top-Four Prohibition and ensure 
the efficacy of the Local Television Ownership rule. Pursuant to the 
changes we adopt herein, an entity will not be permitted to acquire a 
network affiliation and place it on a station or broadcast signal that 
is otherwise not counted as a station for purposes of the Local 
Television Ownership Rule as a way to circumvent the prohibition on 
such affiliation acquisitions adopted in the 2010/2014 Quadrennial 
Review Order. We retain the shared service agreement (SSA) disclosure 
requirement to continue providing transparency regarding the extent of 
cooperation and coordination between competing stations in a market. We 
also find that retaining the rule continues to preserve opportunities 
for a variety of different owners, including minority and female 
owners, who can contribute to the multiplicity of speakers in a market. 
Lastly, we find that the public interest benefits achieved by retaining 
the rule with the adopted changes outweigh the

[[Page 12210]]

potential economic cost of continued compliance with the rule.
    69. The Local Television Ownership Rule limits the number of full 
power television stations an entity may own within the same local 
market. The Local Television Ownership Rule provides that an entity may 
own up to two television stations in the same Nielsen DMA if: (1) the 
digital noise limited service contours (NLSCs) of the stations (as 
determined by Section 73.622(e) of the Commission's rules) do not 
overlap; or (2) at the time the application to acquire or construct the 
station(s) is filed, at least one of the stations is not ranked among 
the top-four stations in the DMA, based on the most recent all-day (9 
a.m.-midnight) audience share, as measured by Nielsen Media Research or 
by any comparable professional, accepted audience ratings service. With 
respect to the latter provision--the Top-Four Prohibition--an applicant 
may request that the Commission examine the facts and circumstances in 
a market regarding a particular transaction, and based on the showing 
made by the applicant in a particular case, make a finding that 
permitting an entity to directly or indirectly own, operate, or control 
two top-four television stations licensed in the same DMA would serve 
the public interest, convenience, and necessity. The Commission 
considers showings that the Top-Four Prohibition should not apply due 
to specific circumstances in a local market or with respect to a 
specific transaction on a case-by-case basis.
    70. The NPRM sought comment on the effects of rule changes made in 
the 2010/2014 Quadrennial Review Order on Reconsideration and raised 
several issues for consideration related to changes in the video 
programming industry. In particular, the NPRM sought comment on whether 
the current version of the Local Television Ownership Rule remained 
necessary in the public interest as a result of competition. The NPRM 
also sought comment on whether the Local Television Ownership Rule is 
necessary to promote localism or viewpoint diversity. In response to 
broadcaster claims in previous quadrennial review proceedings that non-
broadcast sources of video should be considered substitutes for 
broadcast video, the NPRM sought comment on whether and to what extent 
this was true, as well as how to incorporate non-broadcast video into 
market definition analyses. The NPRM then asked whether changes in the 
video programming industry support modification of the numerical limit 
of owning up to two television stations in the same market. If the 
Commission retained the Local Television Ownership Rule and the 
existing limits, the NPRM asked whether the Top-Four Prohibition should 
be retained or modified. The NPRM then sought comment on the prevalence 
of, and how to account for, broadcast stations placing content from the 
Big Four broadcast networks (ABC, CBS, NBC, Fox) on multicast streams 
and low power television stations. As a matter of diligence, the NPRM 
also sought comment on the implications, if any, of the television 
broadcast incentive auction and of the new broadcast television 
transmission standard. The NPRM also asked if the Commission should 
continue to require the filing of SSAs. Regarding minority and female 
television owners, the NPRM sought comment on how retaining, modifying, 
or eliminating the local television rule might affect minority and 
female ownership including potential entry into the market by these 
types of owners. Finally, the NPRM sought quantifications of the costs 
and benefits of its proposed changes.
    71. We find that the Local Television Ownership Rule remains 
necessary to promote the Commission's public interest goals of 
competition, localism, and viewpoint diversity. No other source of 
video programming serves local communities as broadcast television 
does, particularly at low, or no, cost to consumers. The rule promotes 
competition among local broadcast television stations that, to this 
day, remain the only entities in the video marketplace that are 
licensed by the Commission with use of the airwaves to provide a 
broadcast television service, in exchange for a unique obligation to 
serve the public interest. Furthermore, although primarily focused on 
competition, as detailed further below, the rule continues to promote 
localism, as broadcasters have a unique obligation to supply 
programming of interest to their local communities and stations are 
likely to be more responsive to those local interests where there are 
other local competitors. The Commission has previously stated that a 
competition-based rule, while not designed specifically to promote 
localism, may still have such an effect. The Commission has 
consistently found that broadcast licensees have an obligation to air 
programming that is responsive to the needs and interests of their 
communities of license. Similarly, the rule promotes viewpoint 
diversity by preserving opportunities for non-commonly owned stations 
to air a multitude of viewpoints through independent choices regarding 
the local news and other local programming on their stations.
    72. Accordingly, for these reasons we find that the Local 
Television Ownership Rule remains necessary in the public interest. We 
discuss below the various elements of the rule, the goals the rule 
serves, as well as adopt several key modifications to update 
application of the rule and to ensure its continued efficacy.
    73. Market definition. After careful review, we continue to find 
that broadcast television remains unique and non-substitutable with 
other sources of video programming, particularly with respect to 
fulfilling our traditional public interest objectives of competition 
(e.g., in terms of competition among local broadcast television 
stations and with respect to local programming), localism (e.g., in 
terms of supplying locally responsive programming), and viewpoint 
diversity (e.g., in terms of airing a multitude of viewpoints through 
local news and other local programming). Although some commenters 
contend that by defining the market to include only broadcast 
television the Commission fails to account for the myriad of video 
programming options now available to consumers, the Commission has 
acknowledged for some time the availability of other forms of video 
programming, even while continuing to find that broadcast television 
remains its own distinct market. Indeed, from video cassette recorders 
and DVDs, to subscription cable television services, to on-demand 
streaming services, video programming alternatives to free over-the-air 
broadcast television have existed for decades in a number of forms. The 
critical question in Quadrennial Review has been and continues to be 
whether and to what extent such video programming options can be 
considered substitutes to broadcast programming, or put another way, 
whether competitive market forces alone are proving sufficient to 
create a video marketplace that satisfies the public interest 
objectives long associated with broadcast television, such that our 
Local Television Ownership Rule can be deemed no longer ``necessary in 
the public interest as the result of competition.''
    74. Although there are far more sources of video programming 
available today than there were when the Local Television Ownership 
Rule was first adopted, most commenters assert that non-broadcast 
programming is not a substitute to broadcast programming, which remains 
unique. We agree. The Commission has previously found that

[[Page 12211]]

the video programming market is distinct from other media markets 
because consumers do not view non-video media (e.g., audio or print 
media) as good substitutes for watching video, and there is no evidence 
in the current record that would disturb this finding. Notably, cable, 
satellite, and streaming media all have higher consumer fees as they 
require an additional service, such as internet access or cable or 
satellite service, as well as, often times, a subscription fee, in 
contrast to broadcast media, which consumers can access freely over the 
air, a distinction that keeps non-broadcast media from being a 
comparable alternative to broadcast television, especially for price 
conscious consumers. To this point, estimates suggest that 15% of U.S. 
television households (or 18 million households) use free, over-the-air 
television, a percentage that has increased in recent years, 
particularly as the number of consumers subscribing to pay TV 
alternatives continues to decline significantly.
    75. Moreover, the record reflects that despite its growing 
prevalence, online video still largely complements, rather than 
competes with, broadcast television. In fact, some streaming services 
include local broadcast programming as part of their linear channel 
offerings. While broadcasters assert that they compete with a myriad of 
sources that now provide video programming, competition from other 
video programming sources appears to be mostly focused on advertising 
revenue, which is but one of the facets of competition among local 
broadcast television stations. In general, non-broadcast sources of 
video programming do not compete with broadcasters for retransmission 
consent fees, network affiliations, or the provision of local 
programming, which continue to remain largely unique to broadcast 
television. Retransmission consent fees are unique to broadcast 
stations, and the broadcast content for which MVPDs pay retransmission 
consent fees has special appeal to television viewers in comparison to 
any other type of video content to the point where viewers do not 
consider any other video programming to be substitutes for such 
broadcast content. The largest national networks (ABC, CBS, Fox, and 
NBC) affiliate with broadcast stations for over-the-air delivery of 
their programming. Moreover, while broadcasters may be seen as 
participating in various markets or competing along various dimensions 
(including, among others, the sale of local or non-local advertising; 
the creation, acquisition, and provision of local, syndicated, or 
national programming; and the acquisition of on-air talent), the 
provision of local programming remains a hallmark of broadcast 
television and an area where viewers directly benefit from competition 
among local broadcast television stations.
    76. We note that our market definition is also consistent with the 
Department of Justice's (DOJ's) approach, which considers local 
broadcast television to be its own market in antitrust analysis. The 
Department of Justice examines local television broadcasters competing 
in the spot advertising market and competition for retransmission 
consent licensing fees in local television markets. DOJ has rejected 
the assertions of broadcasters that non-broadcast sources of video 
programming should be considered competitors to broadcast television in 
the context of analyzing transactions, focusing on the spot advertising 
product market in local television markets. Although DOJ's analysis has 
focused historically on competition for advertising, whereas the 
Commission's rule considers competition in a number of areas, including 
audience share, we find DOJ's approach further supports, and is 
consistent with, our own.
    77. As we have concluded in previous quadrennial reviews, there are 
strong public interest reasons for promoting competition among local 
broadcast television stations. Promoting competition among local 
television stations prevents local broadcasters from demanding higher 
retransmission consent fees and charging higher rates for local 
businesses seeking to purchase advertising time on local stations, 
costs that may be passed on to consumers. Moreover, competition spurs 
quality improvements by broadcast television stations that benefit 
consumers, including through reinvestment in stations, expanded 
programming choices, and technological innovation.
    78. Spurring competition among broadcast television stations also 
promotes localism, as licensees seek to differentiate themselves while 
fulfilling their obligation to air programming responsive to the needs 
and interests of their local communities. For many stations, that 
includes local news and information programming. In contrast to other 
sources of video programming, broadcast stations are particularly well 
situated to cover local news, as stations are licensed to local 
communities to facilitate locally responsive content and information. 
Indeed, the record contains numerous assertions from broadcasters that 
the local programming they provide is unique and unduplicated by any 
other video programming provider. The Leadership Conference on Civil 
and Human Rights (LCCHR) states that 77% of Americans get most of their 
local news from broadcast sources, while only 23% get local news from 
online only sources, little of which is actually created by online 
outlets since much of the news consumed online are uploaded videos of 
television broadcast news.
    79. Although much local news is undoubtedly cost intensive to 
produce, we reject the broadcasters' assertions that in order to 
preserve localism we must allow greater consolidation than is permitted 
under our current rule. As an initial matter, there is evidence that 
despite some declines in audience size over time, there remains 
significant demand for local television news, and the amount of local 
news on television has increased over time. Moreover, contrary to 
claims that absent consolidation television stations cannot continue to 
produce local news, Nielsen data shows that the number of stations 
airing local news actually increased slightly in a four year period 
from 2017 to 2021. Nielsen Local TV View shows there were 976 stations 
airing at least one verified local news program in November 2017 and 
992 such stations in November 2021. Also, Nielsen data demonstrates 
that while almost 20% of markets saw an increase in the number of 
stations airing local news, only 10% of markets saw a decrease and 70% 
of markets saw no change. The Commission examined Nielsen data in all 
available markets in November 2017 and November 2021 to identify any 
station that aired at least one program categorized as local news by 
Nielsen and then used program titles to verify that programming was 
correctly classified as local news. Notably, only the top 50 markets 
saw more decreases than increases in the number of stations airing 
local news. According to Nielsen data, all of the top 50 markets have 
at least four broadcast stations airing local news, and the 
overwhelming majority of these markets have at least six stations 
airing local news. In markets ranked 51 and lower, where broadcasters 
argue the need to consolidate is particularly acute, the number of 
markets that saw increases in stations airing local news outnumbered 
those that saw decreases. Further, studies by the Radio Television 
Digital News Association (RTDNA) found that the number of stations 
originating local news (i.e., the number of stations producing local 
news) increased slightly from 2017 to 2021. These studies found that 
703 stations originated local news in 2017 and 707 stations originated 
local news in 2021.

[[Page 12212]]

Just as the record does not demonstrate that consolidation, as opposed 
to competition to meet audience demand, is what drove increases in 
local news over time, we similarly cannot conclude that additional 
consolidation is necessary to preserve these gains, much less to 
preserve the ability of stations to produce local programming at all or 
to otherwise serve their local communities as required as licensees.
    80. Regarding the Market Size and Television News study conducted 
by OEA that concluded small and mid-sized markets are unlikely to 
support four independent local news operations, we note that the study 
itself mentions that it examines but one dimension to consider when 
determining the desirability of consolidation. In the authors' 
preferred specification, only markets with more than 615,000 TV 
households were predicted to support at least four independent local 
news operations. We carefully reviewed other studies submitted in the 
record to show that consolidation improves local news coverage or makes 
production of local programming feasible. We also note the report of 
Professor Thomas Hubbard whose analysis shows that local news is not 
declining and has actually increased. Although there appears to be 
agreement that the amount of local news has increased, there remains 
disagreement on whether this growth is due to consolidation or part of 
an industry-wide trend to increase local news. We also note 
disagreement regarding the role of scale economies in the provision of 
local news relative to the increasing practice of contracting and 
sharing local news between stations. Finally, we note disagreement 
around what constitutes local news. We found the empirical studies and 
arguments helpful to our deliberations and decisions. We also note that 
the Local Television Ownership Rule has never been designed to ensure, 
and does not prescribe markets should or must have, at least four 
independent news operations. Rather, as discussed below, the rule helps 
ensure a level of viewpoint diversity so that there is an opportunity 
for as many independent news operations as a market can support, even 
if some markets have less independent local news operations and some 
have more, as they always have. In markets where there may be fewer 
independent news operations already, greater consolidation would not 
create new independent news operations and would only decrease the 
diversity of voices in the providers of local news.
    81. We also find that the rule remains important for helping to 
ensure viewpoint diversity in a local market. While the Local 
Television Ownership Rule remains first and foremost competition-
focused, our policy goals are not unrelated or mutually exclusive, and 
the rule continues to promote viewpoint diversity as well. We continue 
to find that the competition-based rule helps to ensure the presence of 
a number of independently owned broadcast television stations in the 
local market, thereby indirectly increasing the likelihood of a variety 
of viewpoints (including a variety of viewpoints within local 
programming) and preserving ownership opportunities for new entrants. 
Numerous commenters agree and state that the rule remains necessary to 
promote viewpoint diversity. We recognize, as NAB points out, that the 
Commission concluded in a prior Quadrennial Review that the rule was 
not necessary to promote viewpoint diversity due to the presence of 
``other types of media, such as radio, newspapers, cable, and the 
internet [that] contribute to viewpoint diversity in local markets.'' 
Although it remains true that there are various types of media 
available to consumers within local markets, we reject the Commission's 
prior conclusion that the rule is not necessary to promote viewpoint 
diversity. As we have described herein, the provision of local 
programming remains a defining characteristic of television stations, 
one that has grown, even as other sources of local content have 
disappeared or have repurposed local television content for their own 
platforms. Moreover, as we have reiterated, our rule serves to maintain 
diffuse ownership of this key platform--a local television station--
among a wide variety of owners and types of owners, thereby promoting 
the interest in a multiplicity of speakers, particularly with respect 
to local issues and the needs and interests of local communities.
    82. Numerical Limit. We find that permitting ownership of up to two 
stations in a local market continues to strike the appropriate 
competitive balance of enabling some efficiencies of common ownership 
while maintaining a level of competition amongst broadcast television 
stations to ensure that they continue to serve the public interest. No 
commenter argues that the numerical limit should be tightened to permit 
ownership of only one station in a market. Indeed, we recognize that 
common ownership subject to the restrictions of the current rule can 
create operating efficiencies, which potentially could lead to public 
interest benefits if a local broadcast station chooses to invest more 
resources in programming that meets the needs of its local community as 
a result of those efficiencies. However, such efficiencies come at the 
expense of reducing competition and diversity and must be balanced 
accordingly.
    83. Given our determination of the relevant market, above, we do 
not find that the current state of the local television marketplace 
justifies ownership of a third in-market station. Broadcast commenters 
suggest that permitting ownership of a third, or additional, in-market 
station would enable broadcasters to compete more effectively, 
especially in large markets with a large number of full-power 
commercial stations. We do not find adequate support, however, for the 
notion that allowing ownership of a third station would generate public 
interest benefits outweighing potential public interest harms. The 
hypotheticals cited by commenters do not state why adding a third low-
ranked station would grant a combination of two other lower ranked 
stations efficiencies and benefits above and beyond what a combination 
of two stations could achieve. While greater consolidation may lead to 
more operating efficiencies for the commonly owned stations, such 
consolidation also would mean the loss of an independent station 
operator, to the detriment of competition, localism, and viewpoint 
diversity. We find that any such marginal additional efficiency fails 
to outweigh the countervailing harms to these public interest goals. 
Excessive consolidation from a lack of ownership restrictions threatens 
the Commission's competition and diversity goals by jeopardizing the 
continued existence and operations of small and mid-sized broadcasters 
that may be bought out by larger competitors instead of, as broadcast 
commenters suggest, enabling them to combine to become more effective 
competitors to the larger stations.
    84. Based on Nielsen viewership data over the period May 2021 to 
April 2022 and advertising revenue data for 2021 from BIA Kelsey Media 
Access Pro, the majority of television markets are already highly 
concentrated according to the 2010 Horizontal Merger Guidelines. The 
guidelines classify market concentration using HHI. The Commission 
examined Nielsen viewership data over the period May 2021 to April 2022 
to compute the viewership HHIs. The Commission examined ad revenue data 
for 2021 from BIA Kelsey Media Access Pro to compute the advertising 
revenue HHIs. Even taking into account viewership of all noncommercial 
full-power television, Class A, and LPTV stations

[[Page 12213]]

and any associated multicast streams in addition to all full-power 
commercial television stations, 147 of the 210 local television markets 
have viewership HHIs of greater than 2,500, meaning they are highly 
concentrated. Likewise, factoring in advertising revenue from all 
commercial full-power television, Class A, and LPTV stations and any 
associated multicast streams, 166 markets have advertising revenue HHIs 
of greater than 2,500. Given the current levels of concentration in 
television markets, we find no grounds to loosen the existing numerical 
limits.
    85. Top-Four Prohibition. We retain the general prohibition on 
common ownership of two stations ranked in the top four of audience 
share in a market, along with the ability to allow such combinations on 
a case-by-case basis. At the same time, however, given changes in 
broadcast industry practice, we update our methodology used to 
implement this part of our rule. Specifically, we update the audience 
share metric used to determine a station's in-market ranking and 
clarify that ratings data should be averaged over the 12-month period 
preceding a transaction. Additionally, we incorporate the ratings of a 
station's multicast streams, to the extent such streams have measurable 
ratings, to reflect a station's total audience share more accurately.
    86. Consistent with the Commission's prior decisions, we continue 
to find that a combination involving two of the top-four stations in a 
market would be the most detrimental to competition, and thus the 
public interest. We continue to find that top-four combinations would 
often result in a single entity obtaining a significantly larger market 
share than other entities in the market and that such combinations 
could create welfare harms such as reduced incentives for local 
stations to improve their programming, as allowing former rivals to 
combine would reduce incentives to compete vigorously against one 
another. Notably, there are still four major broadcast networks (ABC, 
CBS, NBC, and Fox), and the programming from these networks continues 
to be the most highly rated. These top-four broadcast television 
networks continue to have a distinctive ability to attract large 
primetime audiences on a regular basis, and generally the top-four 
stations in any market are affiliated with these highly-viewed 
networks. Accordingly, we continue to find that the ability to attract 
mass audiences distinguishes the top ranked stations in local 
television markets so that owning two such stations in a market should 
be prohibited. We find further that top-four ranked stations are also 
still the most likely stations to originate local news. Accordingly, 
prohibiting top-four combinations helps ensure a diversity of voices 
among those stations providing such coverage of local issues. We note 
that, in the past, the Commission has cited the typical gap in ratings 
between the fourth and fifth ranked stations in a market as supporting 
the Top-Four Prohibition. To the extent there are situations where, for 
instance, a large gap in ratings occurs between the third and fourth 
ranked stations in a market (rather than between the fourth and fifth 
ranked stations), the fact remains that there is substantial 
concentration of audience share among the top-ranked stations in most 
markets and such situations may be indicative of the largest stations 
in a market exploiting loopholes in our rule (which we address today) 
to increase their market shares. For instance, our rule was 
historically premised on the notion that four full power stations in a 
market corresponded with four Big Four network affiliates. However, as 
discussed below, there are now numerous examples where entities have 
moved programming from what had been top-four rated stations (including 
Big Four network affiliates) to low power stations or multicast 
streams, such that what had been top-four rated station programming now 
may be aggregated on fewer than four full power stations (or among 
fewer than four separate owners) in a market. Accordingly, even if, 
say, the top three full power stations, rather than the top four full 
power stations, may dominate audience share in some markets, it 
certainly does not follow that one of those three stations 
categorically should be permitted to acquire the fourth ranked station 
and increase its market share even more. Rather than eliminating the 
Top-Four Prohibition, we find that the flexibility of the case-by-case 
approach to consider combinations of top-four rated stations is better 
suited to address broadcasters' concerns about the viability of 
stations in smaller markets or situations in which there may no longer 
be a clear-cut distinction between the top-four rated stations and the 
rest of the stations in a market.
    87. We note that the Top-Four Prohibition's case-by-case approach 
serves an important purpose by affording flexibility to the Commission 
and licensees to consider combinations of highly ranked stations in 
unique circumstances. And we are not persuaded by the sweeping claims 
that for the broadcast television industry to remain viable, 
broadcasters must be given greater opportunities to consolidate without 
reference to such circumstances. Nor do such claims change our 
conclusion about the actual objective of the quadrennial review, which 
is to review our rules to ensure that they remain necessary in the 
public interest as a result of competition to promote the Commission's 
public interest goals of competition, localism, and diversity. As the 
record demonstrates, broadcast television stations have multiple 
streams of revenue that support them. One stream, advertising revenue, 
has remained fairly steady in recent years, even while, broadcasters 
assert, they have lost advertising dollars to other sources of video 
programming. According to a Pew Research Center analysis of MEDIA 
Access Pro & BIA Advisory Services data, local television over-the-air 
advertising revenue follows a cyclical pattern that sees significant 
increases from political advertising during even-numbered elections 
years. By contrast, other industries besides broadcast television 
(e.g., print advertising, newspaper classifieds, and direct-mail 
advertising) have seen precipitous and lasting declines in advertising 
revenue concomitant with the growth of online advertising. In light of 
this, it is possible that online advertising is not siphoning 
advertising dollars only, or even primarily, away from broadcast 
sources. Stations increasingly are also generating revenue from digital 
advertising and the distribution of their programming on digital 
platforms. Most importantly, as discussed above, many broadcast 
television stations also receive per subscriber fees from video 
programming distributors in exchange for retransmitting their broadcast 
programming. Retransmission consent fees remain a significant source of 
station revenue and one that, at least for now, is expected to continue 
growing. Ultimately, we find assertions regarding the future of 
retransmission consent fees to be speculative and that retransmission 
consent fee revenue continues to grow, in spite of predictions that 
they may flatten out or decrease at some point in the future. We note 
further that technological developments in broadcast television could 
create opportunities for other revenue sources from new digital 
services ancillary to ATSC 3.0. ATSC 3.0 is a television transmission 
standard currently being developed by broadcasters with the intent of 
merging the capabilities of over-the-air broadcasting with the 
internet's broadband viewing and information

[[Page 12214]]

delivery methods while using the same 6 MHz channels presently 
allocated for digital television.
    88. We find that on the whole, the record does not demonstrate an 
imminent threat to the viability of broadcast television at this time 
that would either warrant, or, more importantly, be remedied by 
loosening or eliminating the Top-Four Prohibition. Broadcast commenters 
argue for the Top-Four Prohibition to be repealed because they claim it 
prevents consolidation that is crucial for broadcasters to continue 
serving the public interest. Conversely, ATVA and NCTA assert that the 
rule must be retained to protect consumers from rising costs due to 
pass through of retransmission consent fee increases that result when 
broadcasters are able to negotiate retransmission consent fees for two 
top-four stations jointly in a market. Even if we were to accept 
broadcasters' arguments that certain broadcast television stations in 
certain markets (e.g., smaller markets) are struggling to produce local 
programming due to an inherently limited revenue base and may benefit 
from consolidation, such a finding would not support relaxing the local 
television rule in all markets. Broadcasters would have us eliminate 
all ownership restrictions in all markets to enable consolidation that 
may only be of some benefit to certain stations in certain markets. 
Some commenters support relaxation of the rules only for smaller 
markets. As discussed below, we find that the local television rule's 
case-by-case approach allows for the Commission to address the 
challenges faced by small and other uniquely situated markets. The 
case-by-case flexibility contained in the current rule is intended to 
account for the practical challenges some stations may face.
    89. We find that the case-by-case approach has allowed the 
Commission to maintain the proper balance between ensuring that no 
market is excessively concentrated and allowing flexibility in 
particular circumstances. Although some commenters state that the case-
by-case approach offers inadequate relief because of the lack of any 
defined criteria for granting relief, the Commission previously offered 
several examples of information that could help establish whether 
application of the Top-Four Prohibition would be in the public 
interest, such as (1) ratings share data of the stations proposed to be 
combined compared with other stations in the market; (2) revenue share 
data of the stations proposed to be combined compared with other 
stations in the market, including advertising (on-air and digital) and 
retransmission consent fees; (3) market characteristics including 
population and the number and types of broadcast television stations 
serving the market (including any strong competitors outside the top-
four rated broadcast television stations); (4) the likely effects on 
programming meeting the needs and interests of the community; and (5) 
any other circumstances impacting the market, particularly any 
disparities primarily impacting small and mid-sized markets. Variations 
in local markets and specific transactions make it impractical to 
provide an exhaustive set of criteria for the case-by-case analysis, 
but we will continue to monitor transactions and the marketplace in the 
course of further reviews and identity additional factors as it is 
useful to do so. Moreover, we note that pursuant to the previously 
articulated factors and even in the absence of rigid criteria, the 
Commission granted three case-by-case requests for flexibility 
affecting five DMAs before the provision was temporarily vacated and 
subsequently restored by the courts, demonstrating the utility of the 
case-by-case approach under appropriate circumstances.
    90. We decline to adopt presumptions in favor of top-four 
combinations at this time and based on the current record as 
recommended by some commenters. Gray suggests that the Commission 
should adopt presumptions in favor of top-four combinations where an 
entity commits to improving local news. Although the Commission has 
considered additional local programming to be a factor in previous 
requests, we find that creating a presumption in all such requests may 
detract from examining the unique circumstances of a market, such as 
the level of local programming already present or the relative strength 
of the stations in the market, as intended by the case-by-case 
approach. Also, ION Media argues that top-four combinations should be 
presumed to comply with the rules, and the burden should be on 
opponents of a proposed top-four combination to show that it would 
violate the Commission's policies. We do not find that there is 
adequate record support for changing the Commission's previous 
conclusion regarding the anticompetitive nature, in general, of 
combinations of top-four ranked stations in the same market. As the 
Commission has stated, we find that most combinations of top-four 
ranked stations would result in a single entity obtaining a 
significantly larger market share than others in the market and that 
such combinations would create public interest harms. Furthermore, the 
impact of top-four station combinations could vary greatly depending on 
factors such as the relative strength of the stations in the market, 
which would weigh against creating a presumption based on other 
factors. Therefore, we find it preferable to allow for exceptions to 
the prohibition rather than to presume such combinations should be 
allowed.
    91. Finally, we adopt two modifications to elements of the Top-Four 
Prohibition to better reflect current broadcast industry practices. 
While commenters for the most part either support retaining the Top-
Four rule as-is or repealing it completely, we find that it is 
appropriate to update the methodology used to determine whether a 
station is ranked among the top-four stations in a Nielsen DMA to 
comport with current market realities. We retain the language in the 
rule that allows for consideration of other comparable audience 
measuring services in addition to Nielsen to keep flexibility in the 
rule. The first modification updates the audience share metric used to 
determine a station's in-market ranking and specifies that ratings data 
must be averaged over a 12-month period preceding any transaction. The 
second modification clarifies that, because the rule only references 
``stations,'' the ratings of multicast streams will be aggregated with 
the ratings of all non-simulcast programming airing on streams owned, 
operated, or controlled by the same station, provided that such streams 
have measurable ratings reported by an audience measuring service and 
are not the simulcast stream of another in-market station.
    92. First, we modify the provision in the current rule that 
determines market ranking to use the Sunday to Saturday, 7AM to 1AM 
daypart in order to reflect more accurately a station's performance in 
terms of audience share. In addition, we delegate to the Media Bureau 
the authority to update the relevant FCC forms to conform with the 
changes we adopt today. Previously, the rule determined market ranking 
``based on the most recent all-day (9 a.m.-midnight) audience share, as 
measured by Nielsen Media Research or by any comparable professional, 
accepted audience ratings service.'' The NPRM sought comment on whether 
this data point is still the most useful for accurately determining a 
station's ranking for purposes of the Top-Four Prohibition. As Gray and 
Nielsen indicate, that daypart, which is also used for evaluating 
failing station waiver requests, does not accurately reflect a 
station's full performance in light of programming changes over the 
years, including the addition of early

[[Page 12215]]

morning programming. In particular, we expect that expanding the 
daypart will capture more local news, an important part of a station's 
programming and a driver of viewership that stations have begun airing 
earlier in the day than in the past. Moreover, using the 7AM to 1AM 
daypart, as opposed to a 24-hour reporting period, avoids ``minor 
fluctuations'' in ratings during nighttime hours when some stations may 
not transmit video programming. Lastly, given that the existing 9AM to 
midnight daypart is also used for determining audience share for 
purposes of evaluating failing station waiver requests, we find that 
using the new 7AM to 1AM daypart in the failing station waiver context 
going forward makes sense logically for the same reasons discussed 
above and to maintain consistency in the Commission's methods. We find 
that making this change is the logical outgrowth of updating the Top-
Four Prohibition since the use of audience measurements in both 
contexts serves the same purpose in allowing the Commission to evaluate 
a station's performance in its local market, and the same measurement 
has historically been used for both.
    93. We also specify that, for purposes of determining a station's 
in-market ranking under the Local Television Ownership Rule, the rule 
will require submission of ratings averaged from available data over a 
12-month period immediately preceding the date of application rather 
than an average over a shorter ratings period or a snapshot of a single 
such data point (i.e., ratings at the time an assignment of license or 
transfer of control application is filed with the Commission). Also, 
where the station or stations at issue have changed network 
affiliations within the preceding 12 months, the ratings should be 
averaged for the period since the affiliation change took place so as 
to most accurately reflect the ratings position of the station or 
stations at the time of application. While the NPRM sought comment on 
whether the Commission should clarify the phrase ``at the time the 
application to acquire or construct the station(s) is filed'' with 
respect to the appropriate ratings data applicants submit for 
consideration, we received no comments responsive to this question. We 
note that ratings data have become available on a more frequent (and 
more frequently updated) basis than in the past and are now accessible 
for many different time periods. We find that replacement of the phrase 
``most recent'' in favor of establishing a defined time period in this 
manner will enable a more complete understanding of the market and the 
competition among stations within it. Such information will in turn 
better inform the Commission and public as to whether a proposed 
transaction is in the public interest. In particular, such an approach 
will provide a more accurate assessment of a station's true market 
position by minimizing the impact of seasonal or one-off monthly 
ratings anomalies (typically the result of sporting events or seasons) 
and also reduce opportunities for gamesmanship based on the lack of a 
clearly established timeframe in the rule's language. For example, 
applicants would have less incentive to time a transaction or 
application filing to correspond with a period where a station 
experiences abnormally low ratings. Finally, the consideration of 
ratings averaged over a 12-month period will apply to all instances 
that involve determinations of whether stations are ranked in the top-
four, including applications of Note 11 to section 73.3555 and its 
extension as described below.
    94. Second, going forward we will aggregate the audience share of 
all free-to-consumer non-simulcast multicast programming airing on 
streams owned, operated, or controlled by a single station to determine 
the station's audience share and ranking in a market (to the extent 
that such streams are ranked by Nielsen or a comparable professional, 
accepted audience ratings service). The NPRM sought comment on whether 
and how the Commission should evaluate multicast streams for purposes 
of the Local Television Ownership Rule. The existing rule does not 
specify that it includes multicast streams, but we find that ignoring 
such streams when evaluating a station's in-market audience share is no 
longer appropriate given the proliferation of such programming and the 
industry trend toward carriage of major network affiliate programming 
on such streams. To the extent that a nonprimary multicast stream has 
measurable audience ratings, not accounting for such ratings when 
evaluating a station's performance would seem to ignore a potentially 
significant portion of the station's service and competitive strength 
within the market. Some multicast streams have ratings reported by 
audience ratings services while others do not. We find that, to the 
extent Nielsen or a comparable professional, accepted audience ratings 
service reports ratings for a multicast stream, such a stream is 
significant enough to be included in its station's audience ratings 
measurement. The use of multicasting has grown in prevalence over the 
years and is expected to continue to grow as a way for broadcasters to 
expand their offerings and distribution. Although accounting for 
nonprimary multicast streams may not have affected a station's ratings 
significantly in the past, such streams may have an impact on ratings 
now and in the future, and thus including them in ratings should 
provide a better indicator of the competitive strength and health of a 
station than simply focusing on a single stream. As noted, some 
stations are even placing programming affiliated with major broadcast 
networks on nonprimary multicast streams, making it all the more 
important to consider in our analysis when possible.
    95. We limit aggregation to free-to-consumer programming airing on 
streams owned, operated, or controlled by a station because stations 
make such streams available to consumers over the air as part of their 
broadcast signal. We also do not count simulcast streams airing the 
programming of another station, because, based on Commission 
experience, the ratings for such streams typically are measured by 
audience ratings services as part of the ratings for their originating 
stations. Accordingly, because the multicast stream's ratings are not 
separately reported, we do not aggregate the programming's ratings in 
order to avoid double counting ratings already attributed to another 
station. In other words, if a station utilizes one of its nonprimary 
multicast streams to simulcast the primary programming stream of 
another station, the ratings of that simulcast stream will not be 
aggregated in determining the overall ratings of the station. Through 
these limitations, we find that aggregation will capture a station's 
true ratings by focusing on programming originating from that station 
and broadcast in the same manner as traditional television signals.
    96. Similarly, we are aware that some broadcast stations may be 
hosting programming of other stations on a temporary basis during the 
transition to ATSC 3.0. We clarify that only the ratings of programming 
owned or controlled by a station and airing on the station's multicast 
streams will be aggregated. Consistent with the way such streams are 
licensed, we do not find that hosting the ATSC 1.0 signal of another 
station for purposes of the transition amounts to operating the 
signal's programming. In other words, if Station A is hosting Station 
B's ATSC 1.0 signal on one of its multicast streams, Station B's ATSC 
1.0 ratings will not be aggregated with Station A's

[[Page 12216]]

multicast streams (which are airing programming belonging to Station 
A). Rather, Station B's ATSC 1.0 ratings will be aggregated with those 
of Station B's streams depending on how audience ratings services 
choose to incorporate ATSC 1.0 and 3.0 ratings into their measurements.
    97. Anti-Circumvention Measures. Note 11 to section 73.3555 of the 
Commission's rules prohibits certain types of acquisitions of a network 
affiliation by one station from another station in the same market that 
the Commission has found to be the functional equivalent of an 
assignment or transfer of control from the standpoint of our Local 
Television Ownership Rule. For example, since the last quadrennial 
review, the Commission has taken action against certain affiliation 
acquisitions that violate Note 11. Today we take further action to 
expand the measure contained in Note 11 to prevent other means of 
circumventing the Top-Four Prohibition. In response to the NPRM's 
questions about entities placing major network affiliations on 
multicast streams and LPTV stations, parties have raised in the record, 
and the Commission has observed itself, that some station owners appear 
to be circumventing the prohibition on network affiliation 
acquisitions--and hence the Top-Four Prohibition--by acquiring the 
network-affiliated programming of another top-four full power station 
in the DMA, either alone or in conjunction with other tangible and non-
tangible assets and then placing that programming on the multicast 
stream of an existing full power station or on an LPTV station in the 
same DMA, neither of which is counted for purposes of the Local 
Television Rule. Because we view such actions as undermining our Local 
Television Rule, we revise the language in Note 11 to extend the 
existing prohibition on certain network affiliation acquisitions to 
prohibit such behavior in the future and ensure the efficacy of our 
rule.
    98. We take this action to preserve the efficacy of the Top-Four 
Prohibition because we find it necessary to prevent further 
exploitation of unintended ambiguities or gaps in the rule. Such 
exploitation harms competition and denies consumers the benefits of 
competition. Therefore, we find that our actions are consistent with 
the statutory mandate of section 202(h) to modify a rule so that the 
rule continues to serve the public interest.
    99. The record demonstrates that there are two methods through 
which parties have been able to achieve results that are inconsistent 
with the policy objectives and intent of the Top-Four Prohibition 
rule's Note 11 provision. Although different in certain respects, the 
two methods both avoid acquisition of another full-power station in the 
same local market and instead rely on use of broadcast facilities or 
transmissions that have not been subject to the ownership limitations 
placed on full-power facilities. For the sake of clarity, we employ 
hypothetical examples to illustrate the methods in operation. 
Accordingly, consider situations involving two independently owned, 
full-power stations among the top four stations (as measured by 
ratings) in the same local market. Station A is affiliated with Network 
YYY and Station B is affiliated with Network ZZZ.
     Under the first scenario, the licensee of Station A 
acquires Station B's Network ZZZ affiliation but, stymied by the 
ownership rules from also buying Station B outright, instead places the 
Network ZZZ affiliation on an LPTV station that the licensee of Station 
A already owns in the market. This action comports with the 
Commission's regulations to date because LPTV stations have been exempt 
from the Local Television Ownership Rule's restrictions.
     Under the second scenario, the licensee of Station A still 
acquires Station B's Network ZZZ affiliation but simply places it on 
one of Station A's own digital multicast streams. This action also 
comports with the Commission's regulations to date because the agency 
has not treated a licensee's multiple programming streams on a single 
station (e.g., a primary and one or more multicast stream) to be the 
functional equivalent of operating two stations.
    100. However, the use of an LPTV station or multicast stream in 
these manners to air top-four rated programming acquired from an in-
market competitor results in the acquiring party's obtaining the 
equivalent of a second top-four rated station in terms of audience and 
revenue share in the local market. In this manner, parties have 
obtained the programming and non-license assets of a competing, in-
market full power television station, typically without the need or 
opportunity for any review by the Commission, as no broadcast station 
license is being transferred. Further, by acquiring the network 
affiliation and most valuable non-license assets from the former 
station, these machinations typically result in the removal of a 
commercial full power competitor from the market. Therefore, such 
actions are inconsistent with the Top-Four Prohibition because they 
allow excessive aggregation of viewers and revenue among top stations 
in the market, which harms competition and the competitive benefits 
that flow to consumers.
    101. While some broadcast commenters characterize the placing of 
major network (e.g., ABC, CBS, NBC, Fox) content on non-primary 
multicast streams and LPTVs as legitimate efforts to improve their 
stations' programming and to increase the availability of quality 
programming in local markets, that does not always appear to be the 
case. Instead, rather than representing genuine attempts by stations to 
compete better through organic growth, such transactions often appear 
to be intentionally manufactured to skirt the prohibitions on excessive 
market concentration. Commenters have identified instances, and we are 
aware of others that, if not clearly intentional, at least appear to be 
deliberately exploiting these loopholes. For example, ATVA identifies 
six markets where Sinclair put a newly acquired network affiliation and 
programming on a multicast stream where the existing prohibitions would 
have prohibited Sinclair from putting the programming on separate full-
power stations. ATVA also characterizes Gray's use of LPTV and 
multicasting to cure an apparent Note 11 violation as a ``form over 
substance'' move since the end result is still the same accumulation of 
top-four affiliations and programming by one entity.
    102. We note that, in the past, placing major network affiliations 
on LPTV stations or multicast streams happened relatively rarely and 
often enabled broadcasters to bring such network programming to so-
called ``short markets,'' that is markets that do not have enough full 
power commercial stations to accommodate all of the major networks on 
their own individual full power stations. Indeed, the Commission has 
considered previously the prevalence of dual Big-Four network 
affiliations on multicast streams and expressed its intent to monitor 
the issue. While in the past such situations were relatively limited, 
circumstances have changed. ATVA and NCTA state that such network 
affiliation arrangements and acquisitions are increasingly being used 
to circumvent the Top-Four Prohibition and its ban on using an 
agreement or series of agreements to effectuate an acquisition of 
another station's programming (i.e., affiliation acquisitions or swaps) 
by enabling entities to acquire affiliations and non-license assets and 
placing them on

[[Page 12217]]

multicast streams or LPTV stations to avoid running afoul of the 
existing ban. ATVA identifies 121 instances of this perceived rule 
circumvention, 46 of which have occurred in true short markets as 
determined by ATVA. ATVA also notes that several such affiliation 
arrangements occur in the top 100 Nielsen DMAs, further indicating that 
they are not limited to the smallest markets where the number of full 
power stations would be more limited. We agree with ATVA and NCTA that 
the number of instances where top-four rated programming appears on 
nonprimary multicast streams or low power stations now vastly outnumber 
the occurrence of actual ``short markets'' where there are an 
inadequate number of full power stations to host each major network on 
its own full power station.
    103. The Commission has encountered similar circumvention of the 
Top-Four Prohibition in the past and adopted Note 11 in response. 
However, because Note 11's language concerns only stations within the 
meaning of the Local Television Ownership Rule (full power stations), 
the existing prohibition does not currently restrict the use of LPTV 
stations or multicast streams for the reasons discussed above. 
Therefore, we expand Note 11 by adding the following language in order 
to address some of the new affiliation acquisition practices described 
above:

    Further, an entity will not be permitted through the execution 
of any agreement (or series of agreements) to acquire a network 
affiliation, directly or indirectly, if the change in network 
affiliation would result in the affiliation programming being 
broadcast from a television facility that is not counted as a 
station toward the total number of stations an entity is permitted 
to own under paragraph (b) of this section (e.g., a low power 
television station, a Class A television station, etc.) or on any 
television station's video programming stream that is not counted 
separately as a station toward the total number of stations an 
entity is permitted to own under paragraph (b) of this section 
(e.g., non-primary multicast streams) and where the change in 
affiliation would violate this Note were such television facility 
counted or such video programming stream counted separately as a 
station toward the total number of stations an entity is permitted 
to own for purposes of paragraph (b) of this section.

    104. With the above expansion of Note 11, the Commission going 
forward will not permit an entity to acquire the network affiliation of 
another in-market station and then place that affiliation on ``a 
television facility that is not counted as a station toward the total 
number of stations an entity is permitted to own under [the Local 
Television Ownership Rule contained in] paragraph (b) of [section 
73.3555]'' such as an LPTV station or any other class of television 
station exempted from the ownership rules, if the affiliation could not 
be placed on a station that is counted ``toward the total number of 
stations an entity is permitted to own for purposes of [the Local 
Television Ownership Rule contained in] paragraph (b) of [section 
73.3555],'' namely, a full-power commercial station. The Commission 
also will not permit an entity to acquire the network affiliation of 
another in-market station and then place that affiliation on ``any 
television station's video programming stream that is not counted 
separately as a station toward the total number of stations an entity 
is permitted to own under [the Local Television Ownership Rule 
contained in] paragraph (b) of [section 73.3555]'' be it a .2, .3, or 
.4 multicast stream, if the affiliation could not be placed on a 
station that is counted ``toward the total number of stations an entity 
is permitted to own for purposes of [the Local Television Ownership 
Rule contained in] paragraph (b) of [section 73.3555].'' This 
restriction applies to streams that an entity owns, operates, or 
controls even when those streams are being hosted by another station in 
which the entity has no cognizable interest. We believe these changes 
will suffice to resolve the loopholes identified above and to ensure 
the efficacy of the Top-Four Prohibition and the public interest 
benefits that flow therefrom. Our revision of Note 11 to prevent other 
means of circumventing the Top-Four Prohibition is not a content-based 
restriction on speech. The prohibition on affiliation acquisitions 
involving two top-four stations does not consider content but rather 
market concentration. As with Note 11 when adopted in the 2010/2014 
Quadrennial Review Order, the extension adopted today will apply on a 
prospective basis. The extension will apply to all applications filed 
after the release date of this Order and transactions entered into 
after the release date of this Order. Where their actions have not 
otherwise violated current rules, parties that prior to the release of 
this Order had acquired the affiliation of a top-four rated television 
station and placed it on a multicast stream and/or a low power 
television station in a manner that would violate Note 11 as revised 
herein will not be subject to divestiture. All future transactions will 
be required to comply with the Commission's rules then in effect. Such 
grandfathered arrangements will not be transferable or assignable. 
Instead, proposed sales involving such grandfathered station 
arrangements in existence as of this Order's release date will be 
subject to Commission review upon application to transfer or assign the 
license or licenses of the station or stations involved. Consistent 
with prior applications of Note 11, entities may seek case-by-case 
examination of such proposed transactions and seek Commission approval 
to transfer or assign the grandfathered arrangement. Just as with pre-
existing combinations of top-four stations that applicants seek to 
transfer intact, this approach will enable the Commission to weigh 
potential harms and benefits of permitting the arrangement to continue, 
including any unique circumstances of the market and potential effects 
related to service disruption to viewers.
    105. We find that our approach today closes loopholes to Note 11 
and the Top-Four Prohibition while continuing to support legitimate 
uses of both LPTV and multicast streams. We note that our amendment to 
Note 11 narrowly targets actions by which broadcast stations 
effectively seek to circumvent application of the Top-Four Prohibition 
and the need for the Commission's transaction review, actions that 
typically result in the elimination of an in-market competitor station. 
The rule change we adopt today does not inhibit organic growth, 
expansion, or changes in station programming, nor does it impact 
affiliation changes initiated by a network itself. For example, where a 
network, absent any undue direct or indirect influence from a broadcast 
entity, chooses to move its affiliation from one station to another in 
the market (perhaps because the network is no longer satisfied with the 
existing affiliate station and the other station has demonstrated 
superior operation and thus earned the affiliation on merit), such a 
change in affiliation is not a circumvention of Note 11. A broadcast 
commenter points out that the Commission declined to restrict instances 
where a station acquired a multicast affiliation with a major network 
through direct negotiations with the network rather than with the 
existing local affiliate. The Commission did state that Note 11 would 
not apply in situations where a network offers an existing duopoly 
owner a top-four-rated affiliation (perhaps because the network is no 
longer satisfied with the existing affiliate station and the duopoly 
owner has demonstrated superior station operation and thus earned the 
affiliation on merit) because such a circumstance represents organic 
growth of the station and not a transaction that is the functional 
equivalent of an assignment

[[Page 12218]]

or transfer of control from the standpoint of our Local Television 
Ownership Rule. In contrast, circumstances where a station induces an 
existing local affiliate to terminate its affiliation with its network 
so that the station can then affiliate with the same network clearly 
falls outside of the situation described by the Commission.
    106. In adopting this approach, we reject suggestions that the 
Commission should eliminate the exemption of LPTV stations for purposes 
of the Top-Four Prohibition, except in markets without at least four 
full-power stations. That approach would effectively eliminate the 
existing provision in our rules exempting LPTV stations from the local 
television ownership restrictions. When the Commission adopted its 
rules exempting LPTV stations from the ownership restrictions, 47 FR 
21468 (May 18, 1982), it found that LPTVs were limited by their 
coverage, operation, and secondary status, and that such limitations 
weighed in favor of ``permitting experienced participants in the market 
to pioneer the low power service.'' It found further that pioneering 
the creation of such low power service outweighed the Commission's 
traditional concerns regarding multiple ownership. Accordingly, LPTV 
stations have never been subject to the Commission's multiple ownership 
rules, nor seen as entirely equivalent to full power television 
stations. At this time, we do not find that the record supports 
completely abandoning this previous determination or fully extending 
the local television ownership restriction to LPTV.
    107. Similarly, we reject ATVA's suggestion that the Commission 
prevent a station in a market with four or more full-power or LPTV 
stations from multicasting two or more streams of top-four network 
affiliated programming. As the Commission has found in the past, a 
significant benefit of the multicast capability is the ability to bring 
more local network affiliates to smaller markets, thereby increasing 
access to popular network programming and local news and public 
interest programming tailored to the specific needs and interests of 
the local community, and we do not wish to constrain this ability 
unnecessarily. However, the record does contain indications that some 
entities currently may be using the fact that multicast streams and 
LPTV stations are exempt from the ownership rules to circumvent the 
Commission's local television ownership restrictions, indications that 
are corroborated by the Commission's own aforementioned experience. 
Such circumvention runs directly against the intended purpose of 
exempting LPTV and multicast streams, which was expected to benefit 
competition in the form of new programming alternatives and increasing 
the availability of network programming respectively. In adopting the 
LPTV exemption, the Commission believed that excluding LPTV from 
ownership restrictions would ``foster a low power service that can grow 
to provide program alternatives to full service stations and cable 
systems in a manner that increases competition in the marketplace and 
thus enhances the telecommunications service available to the public.'' 
Therefore, although we do not change the Top-Four Prohibition's 
methodology with respect to LPTV and multicast streams in general, we 
nevertheless find our action today appropriate to address when entities 
seek to exploit the exemption in ways that circumvent our rules and 
result in market concentration, considering both the exemptions' 
original pro-public interest purposes and the clear intent of the Top-
Four prohibition.
    108. We recognize that in the future licensees may devise other 
ways to read our rules narrowly or to manufacture transactions that 
circumvent the intended purpose of the Top-Four Prohibition. At this 
time, the Commission will not prohibit conduct other than that which we 
have observed to be circumventing the purpose of established rules, as 
there remain compelling reasons for low power and satellite television 
stations to remain transferable and otherwise exempt from our ownership 
rules. Although the NPRM sought comment on satellite stations as 
another type of television station exempted from ownership restrictions 
through which an entity could air multiple major network-affiliated 
programming, the record does not indicate that satellite stations are 
being misused in such a way. In any case, the language of the 
modification to Note 11 includes any station that is not counted for 
purposes of the local ownership restriction and is not limited to LPTV 
or multicast streams as the only possible methods for circumvention. 
However, we stress that this should not be interpreted as an invitation 
for licensees to invent creative ways to circumvent the clear intent of 
our ownership rules, and the Commission stands ready to take further 
action as necessary. Finally, we note that if an entity believes the 
Top-Four Prohibition and Note 11 should not apply to its plan to place 
on a low power station or multicast stream an affiliation or affiliated 
programming acquired from another top-four station in the same market, 
the entity may seek case-by-case consideration under the Local 
Television Ownership Rule. Put another way, just as entities may seek 
case-by-case review of a top-four combination that would otherwise 
violate the Top Four Prohibition, entities may also seek case-by-case 
consideration of an affiliation acquisition that we would consider 
effectively equivalent to a top-four acquisition and that would 
otherwise violate Note 11 of our rule. In small markets, the Commission 
may look favorably upon a request for consideration where, if Note 11 
were to be applied, the result would be fewer programming streams in 
the market than there were before (e.g., an assignment or transfer of 
control of a grandfathered combination where coming into compliance 
with Note 11 would result in the loss of an existing top four stream 
from the market).
    109. Broadcast Spectrum Auction and Next Generation Broadcast 
Television Transmission Standard. We conclude that neither the 
television broadcast incentive auction, conducted in 2016, nor the 
related repack of the television spectrum, concluded in late 2020, had 
any significant effects on local television ownership or implications 
for retention or modification of the Local Television Ownership Rule. 
Nor do we find that the adoption and deployment of the new broadcast 
television transmission standard should have any effect on the Local 
Television Ownership Rule.
    110. First, we find that the auction and resulting repack did not 
significantly affect the ownership ranks or our consideration of the 
ownership rules. As we noted in the Public Notice seeking to update the 
record of this proceeding, only 41 television stations permanently 
discontinued operations as a result of the auction. All other stations 
involved in the auctions are still available to their viewers because 
they chose to implement channel sharing arrangements or moved from the 
UHF to the VHF band. The 41 television stations that surrendered their 
licenses represented less than 2% of the 2,148 full power and Class A 
stations that existed at the time. Furthermore, only 19 of the 41 
stations that surrendered their licenses and terminated service were 
full power commercial stations, which represents a reduction of 1.38% 
of the 1,373 full power commercial stations counted in the most recent 
broadcast station totals. In sum, we find the impact of the incentive 
auction and resulting repack of the television spectrum on ownership to 
be negligible.

[[Page 12219]]

    111. Second, the record does not indicate that the broadcasters' 
voluntary transition to the ATSC 3.0 transmission standard has any 
immediate or direct implication for the ownership rules. Although we 
noted above that new digital services ancillary to ATSC 3.0 could 
create revenue opportunities for broadcast stations that belie a bleak 
outlook of the broadcast industry, we do not find that the benefits of 
ATSC 3.0 have been actualized to the point where we could draw any more 
direct implications until the new transmission standard becomes more 
widely deployed. There is no evidence in the record that use of 3.0 
allows anyone to own more or less stations, creates any loopholes to 
our rules, or affects any of the conclusions underlying our actions in 
this proceeding. We will continue to monitor any innovations and 
developments that could affect television industry practices or 
otherwise call into question the premises under which the ownership 
restrictions were adopted.
    112. Shared Service Agreements. We conclude that the SSA disclosure 
requirement should be retained to maintain transparency as to the 
extent of common operation between broadcast stations. We agree with 
the only commenter who mentions the SSA disclosure requirement in the 
record, who contends that the rule should be retained because SSA 
disclosure facilitates the Commission's analysis of the broadcast 
industry and allows the public to analyze ownership diversity in the 
industry, recognizing that consolidation of operations could limit 
competition and diversity.
    113. No commenter provides a reason for eliminating this 
requirement, and so in the interest of maintaining transparency, we 
conclude that the disclosure of SSAs should continue. As when the 
Commission adopted the SSA disclosure requirement six years ago, we 
find that the requirement continues to be useful for the public and the 
Commission to monitor the content, scope, and prevalence of SSAs, as 
well as to evaluate the impact of these agreements on the Commission's 
public interest policy goals. Despite calls from some commenters for 
greater oversight or action by the Commission, we note that the NPRM in 
this proceeding did not seek comment on attributing SSAs, Joint Sales 
Agreements, or any other contractual relationships between stations in 
the same market, and we therefore do not have an adequate record to 
take further action in this order with respect to such agreements. The 
Commission eliminated attribution for television JSAs and did not seek 
comments on reestablishing attribution in the NPRM. Several commenters 
nevertheless call on the Commission to attribute sharing arrangements, 
which they perceive as a loophole to the ownership restrictions.
    114. Minority and Female Ownership. We find that retaining the 
existing ownership limits continues to preserve opportunities for 
ownership diversity, including minority and female ownership. As in 
past quadrennial reviews, we retain the existing Local Television 
Ownership Rule for the reasons stated above, primarily to promote 
competition among broadcast television stations in local markets. 
Nevertheless, we also find that retaining the existing rule can promote 
opportunities for diversity in local television ownership. Broadcast 
commenters state that the best way to encourage broadcast ownership by 
new entrants, including minority and female owners, is to ensure access 
to capital by removing rules that impede investment and by 
incentivizing existing broadcast owners to provide capital to new 
entrants. As stated earlier with regard to radio, we find that the 
existing rule strikes the appropriate balance between incentivizing 
investment in broadcasting and ensuring that station-buying 
opportunities exist for new entrants in a market, particularly since 
investment by new entrants is less likely in a market that is highly 
concentrated. We share the concerns of commenters such as LCCHR, Free 
Press, NABOB, NHMC, and UCC et al. that media consolidation could 
further increase entry barriers for ownership by people of color and 
women by decreasing the likelihood that television stations would be 
sold to a new entrant. In addition, the Commission has observed some 
evidence that divestitures and other transactions made to comply with 
the existing ownership limits have resulted in new entrants, including 
minority and female owners, entering into local television markets.
    115. Ultimately, we find there is no basis to conclude that 
retaining the Local Television Ownership Rule with the slight 
modifications we adopt above will harm minority and female ownership. 
If anything, we believe that retention and modification of the rule 
will maintain a level of competition and multiplicity of speakers that 
could allow room for entry into the market, including by minority or 
female owners. We do not find that our modifications to the Top-Four 
Prohibition will have a negative impact on minority and female 
ownership as the modifications simply support the competitive purposes 
of the overall television ownership rule. In addition, the 
modifications will apply on a prospective basis, and the case-by-case 
approach provides the opportunity for flexibility in application of the 
Top-Four Prohibition should it prove necessary. As the Commission has 
stated in the past, ensuring ``the presence of independently owned 
broadcast television stations in the local market [indirectly 
increases] the likelihood of a variety of viewpoints and preserving 
ownership opportunities for new entrants.'' We continue to believe this 
to be the case. Accordingly, we find that retaining the Local 
Television Ownership Rule as modified furthers the public interest by 
ensuring the potential for new and diverse entrants.
    116. Cost-Benefit Analysis. In light of the lack of record on the 
specific costs or benefits of this rule, and the limited nature of the 
modifications we adopt today, we believe that the public interest 
benefits achieved by retaining the rule as so modified outweigh the 
potential economic cost of complying with this long-standing structural 
ownership rule. While the NPRM sought quantifications of the costs and 
benefits of its proposed changes, we note that commenters did not 
provide such quantifications in the record. For all the reasons 
explained in the discussion above, we conclude that the public interest 
benefits promoted by the rule outweigh the cost of compliance with the 
rule. Also, any potential benefits that further consolidation might 
offer television station owners are outweighed by potential public 
interest costs to the consumer in the form of harms resulting from 
weakened competition within the local broadcast television market, less 
viewpoint diversity in the only entities producing local programming, 
and fewer opportunities for new market entrants.

C. Dual Network Rule

    117. We find that the Dual Network Rule, which effectively 
prohibits a merger between the Big Four broadcast networks 
(specifically, ABC, CBS, Fox, and NBC), remains necessary in the public 
interest to protect and promote both competition and localism. With 
regard to competition, we find that the Big Four broadcast networks 
have a unique ability to regularly attract large, national audiences, 
which separates them from other broadcast and cable networks. And given 
their large audience shares, the Big Four broadcast networks earn 
higher rates from advertisers seeking to consistently reach mass 
audiences than other networks are able to earn. We find that loosening 
the rule to allow a combination between Big Four broadcast networks 
would lessen

[[Page 12220]]

competition for advertising revenue and likely subsequently result in 
the remaining networks paying less attention to viewer demand for 
innovative, high-quality programming. With regard to localism, we find 
that the Dual Network Rule increases the bargaining power of local 
broadcast affiliates and enables them to influence Big Four broadcast 
network programming decisions in ways that better serve the interests 
of their local communities.
    118. The Dual Network Rule states: ``A television broadcast station 
may affiliate with a person or entity that maintains two or more 
networks of television broadcast stations unless such dual or multiple 
networks are composed of two or more persons or entities that, on 
February 8, 1996, were `networks' as defined in Sec.  73.3613(a)(1) of 
the Commission's regulations (that is, ABC, CBS, Fox and NBC).'' 
Section 73.3613(a)(1) in turn defines ``network'' as ``any person, 
entity, or corporation which offers an inter-connected program service 
on a regular basis for 15 or more hours per week to at least 25 
affiliated television licensees in 10 or more States; and/or any 
person, entity, or corporation controlling, controlled by, or under 
common control with such person, entity or corporation.'' Therefore, 
the rule allows common ownership of multiple broadcast networks, but 
effectively prohibits a merger between or among the Big Four broadcast 
networks, ABC, CBS, Fox and NBC. The Dual Network Rule has existed 
since the 1940s and has remained largely unchanged except for a 
revision in response to the Telecommunications Act of 1996. In the 
Telecommunications Act of 1996 Congress permitted common ownership of 
two or more broadcast networks, but not a merger among ABC, CBS, Fox or 
NBC, or between one of these networks and the two largest emerging 
networks, UPN or WB. In 2001, after concluding in its 1998 Biennial 
Review that the rule as applied to UPN and WB might no longer be in the 
public interest, the Commission further modified the dual network rule 
to permit a Big Four network to merge with or acquire UPN or WB. In the 
NPRM, the Commission sought comment on whether the Dual Network Rule 
remained necessary in the public interest to protect competition and 
localism as the Commission previously held in its 2010/2014 Quadrennial 
Review Order. Specifically, the Commission sought comment on whether 
broadcast networks still participated in the video marketplace by (1) 
assembling and distributing a collection of programming suitable for 
large, national audiences, and (2) selling advertising based on this 
programming to large, national advertisers. The Commission further 
asked if the Big Four broadcast networks still outperform their 
broadcast and cable counterparts in terms of viewership and advertising 
revenue such that they represent a ``strategic group'' within the 
marketplace. The Commission also asked how online video distributors 
and digital advertisers have affected competition for national 
broadcast television advertising. Finally, the Commission sought 
comment on whether the rule still promotes an important and sufficient 
balance between the national interests of the Big Four broadcast 
networks and the local interests and obligations held by their local 
affiliates. The Commission received little comment focused on the Dual 
Network Rule in response to the NPRM and the 2021 Update Public Notice. 
In the record, there appears to be nominal interest in changing the 
rule while a handful of other commenters call for the Commission to 
retain the rule without modification.
    119. After careful review, we find that the Dual Network Rule 
remains necessary in the public interest despite marketplace changes, 
as it continues to foster our core policy goals of competition and 
localism. Consistent with our findings in the past, we find that the 
rule promotes competition in the provision of programming suitable for 
large, national audiences and the sale of national advertising time and 
furthers localism by maintaining a balance among the Big Four broadcast 
networks and their affiliate groups.
    120. Competition. The Big Four broadcast networks continue to hold 
a unique position in the video marketplace. They earn higher and more 
consistent ratings on linear television than other broadcast and cable 
networks. With their high ratings, the Big Four broadcast networks in 
turn are highly sought after by advertisers seeking to reach large, 
national audiences. The Big Four broadcast networks largely compete 
amongst themselves for such advertising revenue, and to differentiate 
themselves, they attempt to produce programming that will generate the 
highest ratings possible from the widest audiences. We find that such 
competition for revenue and audience share serves the public interest 
by spurring the networks to compete to develop and deliver programming 
that is innovative, high-quality, and of interest to the viewers. If 
two of the networks were to merge, competition for this advertising 
revenue would lessen and the networks would be less incentivized to 
compete for viewers by providing a national television product that is 
desired by viewers. Accordingly, we find that the Dual Network Rule 
remains necessary in the public interest to promote competition in the 
provision of programming suitable for large, national audiences and the 
sale of national advertising time.
    121. This conclusion is supported by data that show the Big Four 
broadcast networks are in a class of their own when it comes to 
producing national programming and selling national advertising time 
such that a merger among these networks would reduce competition and 
would be likely to increase these networks' ability to create barriers 
to entry. As demonstrated by the data below, a review of both the total 
primetime ratings of the networks and the primetime ratings of 
individual shows reveals that, in general, the Big Four broadcast 
networks consistently attract the largest audiences, greatly exceeding 
the ratings of their broadcast and cable counterparts. Over the last 
several years, cable networks, as well as some online services, have 
produced some high-quality television series that can draw high ratings 
comparable to the Big Four broadcast networks or reach sizeable 
audiences. These shows are the result of significant investments and 
many are critically acclaimed and garner media attention. However, as 
discussed below, this programming still does not achieve the sort of 
consistent audience share and advertising revenue that the programming 
of the Big Four broadcast networks generate. And we continue to find 
that the Big Four broadcast networks form a unique and discrete group 
within the video marketplace.
    122. For example, the most popular show outside of National 
Football League programming in the 2021-2022 television season was 
Yellowstone airing on the basic cable channel Paramount Network 
(formerly SpikeTV), which averaged 11.312 million total viewers across 
its fourth season. This cable network show has surged in popularity 
since its premiere in 2018. However, Nielsen ratings data reveal that 
Yellowstone is not only the only program aired by Paramount Network to 
make it on the annual list of the 100 most-popular shows judged by 
average total viewers, but also is the only non-NFL affiliated program 
from any cable network that makes it into the top 70 most-watched 
shows. The next highest rated show aired by a cable network is the 
cable network History's Curse of Oak Island, which ranks 72nd with a

[[Page 12221]]

3.611 million total viewers average. In contrast, the non-sports 
programming of the Big Four broadcast networks dominates the list with 
25 of the top 30 shows averaging at least 7 million total viewers in 
the 2021-2022 season. Notably, CBS had 14 of those shows; NBC had 
seven; and Fox and ABC each had two. Further, of the 39 non-sports 
telecasts on the list of 100 most-watched telecasts, all but two aired 
on a Big Four broadcast network.
    123. Further indicating the unique status of the Big Four broadcast 
networks, sports leagues seeking to reach the largest audiences 
generally seek to enter into rights agreements with those networks in 
part because of their proven ability to reach a mass audience. Due to 
the revenues they are able generate by packaging and distributing 
sports programming alongside other highly rated network programming, 
the Big Four broadcast networks are also in a unique position to pay 
substantial fees to control the television rights for sports leagues. 
In return, sports programming historically has generated, and continues 
to generate, high advertising revenues for the networks in return. 
Nielsen ratings data for 2021shows that the Big Four broadcast networks 
carried sports programming from the NFL, MLB, NBA, the Olympics, and 
NCAA that dominated the list of highest rated telecasts, representing 
40 of the top 50 and 51 of the top 100 telecasts. Moreover, based on 
the same data, sports programming on the Big Four broadcast networks 
represented 39 of the top 50 telecasts watched by the highly sought 
after 18-49 demographic. Sports programming airing on cable networks 
represented only 9 of the top 50 telecasts for the 18-49 demographic. 
We agree with WGAW that sports leagues have significant incentives to 
prefer to negotiate programming rights with the Big Four broadcast 
networks given their proven ability to reach the largest audiences with 
fewer of the technical issues sometimes associated with online 
platforms and, in return, have the potential to draw the largest 
advertising revenues. While we recognize that some leagues are 
experimenting with shifting some programming online, most notably, the 
NFL moving Thursday Night Football to Amazon Prime, it appears that 
airing programming on a Big Four broadcast network continues to be the 
most reliable way to reach the largest, most consistent audience 
possible. The continued dominance of the Big Four broadcast networks in 
offering the premier sports leagues and events demonstrates further 
that these four networks remain distinct from other programming 
channels or networks in the video marketplace.
    124. Comparing data regarding the average primetime rating of the 
Big Four broadcast networks to the top cable networks further 
demonstrates the strength of the Big Four broadcast networks. Despite 
some individual cable network programs earning high ratings, the 
average primetime rating of the Big Four broadcast networks has 
remained larger than the audience size for even the most popular cable 
networks. In 2016, the average primetime rating for the Big Four 
broadcast networks was 3.78, while the average primetime rating of the 
four highest-rated cable networks (Fox News Channel, ESPN, TBS, and 
HGTV) was 1.45--roughly a 62% difference. Because Spanish-language 
networks reach a different audience (i.e., those viewers who speak 
Spanish), only English-language cable networks are included in these 
averages. We note that if Spanish-language networks were included, it 
would not greatly impact the analyses or lead us to change our ultimate 
conclusions. Moreover, the Big Four broadcast networks' average 
primetime rating was more than four times larger than that of the next-
highest rated English-language broadcast network (The CW). At first 
glance, more recent data show the gap in primetime ratings between the 
Big Four broadcast networks and either the top cable networks or the 
next largest broadcast network is tightening. For example, in 2020, the 
Big Four broadcast networks averaged a primetime rating of 2.54 while 
the four highest rated cable networks (Fox News Channel, MSNBC, ESPN, 
and CNN) average a 1.88 rating, which is approximately a 26 percent 
difference. The average primetime rating of the Big Four broadcast 
networks was nearly three times the size of the next highest broadcast 
network, ION. While smaller than in the past, the percentage 
differences between the Big Four broadcast networks and all other 
networks remain significant.
    125. Moreover, it should be noted that much of the increased cable 
network ratings in 2020 were the result of cable news programming that 
surged in popularity during the election season on Fox News Channel, 
MSNBC, and CNN. If Fox News Channel, MSNBC, and CNN, which are 
categorized as more specialty news networks rather than general/variety 
networks, are removed and one adds the three next highest rated cable 
networks (Hallmark Channel, HGTV, and TLC), the average of the top four 
cable networks is reduced to a 1.15 rating, which is roughly a 55 
percent difference with the Big Four broadcast networks. We also note 
that the differences become much greater when one excludes all 
vertically integrated cable networks (i.e. cable networks that share 
the same parent company as a Big Four broadcast network). In 2020, the 
average primetime rating for the four highest rated non-vertically 
integrated cable networks (CNN, Hallmark Channel, HGTV, and TLC) was 
1.16, which is roughly a 55 percent difference with that of the Big 
Four. We also note that sports and cable news programming is often 
produced for a more niche audience rather than for a national, mass 
audience, the type of competition which the Dual Network Rule seeks to 
promote. If one considers only broadcast and cable networks that S&P 
Global categorizes as ``General/Variety,'' the four highest rated, 
English-language networks in 2020 were TBS, ION, Investigation 
Discovery, and USA with an average primetime rating of 0.77--less than 
a third of the Big Four broadcast networks.
    126. Beyond just the primetime hours, the Big Four broadcast 
networks also still boast a significant advantage in terms of the 24-
hour average ratings, despite an increase for cable networks' ratings 
in recent years. In 2020, the average 24-hour rating for the Big Four 
broadcast networks was a 1.97 compared to a 1.15 for the four highest 
rated cable networks (Fox News Channel, MSNBC, CNN, and Hallmark 
Channel).
    127. In addition to the disparity in ratings, there continues to be 
a wide disparity in the advertising rates charged by the Big Four 
broadcast networks and the advertising rates charged by other broadcast 
and cable networks, supporting our view that the Big Four broadcast 
networks retain distinct characteristics and pursue distinct business 
interests and strategies, such that they remain a separate strategic 
group within the larger video marketplace. Recent data show that the 
Big Four broadcast networks generally charge higher advertising rates 
than cable networks. According to S&P Global Market Intelligence data 
for 2020, the average advertising rate among the Big Four broadcast 
networks, as estimated in cost per thousand views (referred to as cost 
per mille or CPM), was approximately $23.68. By contrast, the four 
highest CPMs among cable networks for the same period (ESPN, MTV, 
Discovery Channel, and Bravo) had an average of approximately $19.39, 
which is approximately 19 percent less than that of the Big Four 
broadcast networks. This gap increases if one excludes ESPN,

[[Page 12222]]

which is owned by Disney, the parent company of broadcast network ABC, 
and a network with a uniquely high CPM as a result of its sports 
programming. Without ESPN, the Big Four cable networks (MTV, Discovery 
Channel, Bravo, and Food Network) average $15.40, a 35 percent 
difference as compared to the CPM garnered by the Big Four broadcast 
networks. Of note, the 2010/2014 Quadrennial Review Order stated there 
was a 44% gap in CPMs between the Big Four broadcast networks and the 
four highest CPMs among non-sports cable networks in 2014. While one 
may contend that the gap is lessening, we still find a 36% gap to be 
significant. Data from 2017 reveal that this gap in advertising rates 
has stayed steady in recent years. In 2017, the Big Four broadcast 
networks earned an average CPM of $21.43 and the four highest CPMs 
among cable networks (ESPN, MTV, Bravo, and Discovery Channel) averaged 
$17.46--a difference of approximately 19 percent. If one was to exclude 
ESPN (and replace with next highest, TNT), the CPM average of the top 
four cable networks drops to $14.32, which is approximately a 33 
percent difference.
    128. Data on net advertising revenues earned by the various top 
networks provide additional evidence that the Big Four broadcast 
networks have a definite appeal to advertisers seeking consistent, 
large national audiences. In these data as well, we find a wide 
disparity between the net advertising revenue of the Big Four broadcast 
networks and the comparable top four cable networks. For example, in 
2021 the Big Four broadcast networks earned an average of $3.102 
billion. In comparison, the four cable networks with the highest net 
advertising revenue totals (ESPN, Fox News Channel, HGTV, and TBS) 
averaged $1.242 billion in estimated net advertising revenues. This 
represents close to a third of the average amount received by the Big 
Four broadcast networks. The difference is even wider when comparing 
the net advertising revenues of the Big Four broadcast networks to the 
next best performing English-language broadcast network. In 2021, ION 
earned $463 million in net advertising revenue--nearly a seventh of the 
average earned by the Big Four broadcast networks.
    129. In sum, we find that the data support our conclusion that that 
the Big Four broadcast networks retain distinct characteristics and 
strategies that drive competition among this group and warrant 
retention of the Dual Network Rule. We find that these four broadcast 
networks continue to be uniquely capable of attracting large audiences 
of a size that individual cable networks and other broadcast networks 
cannot consistently replicate. For advertisers seeking to reach a 
national audience, and for sports leagues seeking to reach the largest 
audiences, the Big Four broadcast networks remain the outlets able to 
guarantee them a consistent, large national audience. We thus agree 
with WGAW that the Big Four broadcast networks still operate as a 
strategic group and their programming is a distinct non-substitutable 
advertising product for those attempting to reach mass audiences. While 
on certain occasions, a cable network may compete with the Big Four 
broadcast networks for high ratings, cable networks have not been shown 
to replicate the same ratings success sustained by the Big Four 
broadcast networks.
    130. While we recognize that there have been significant changes in 
technology and media consumption in the video marketplace since our 
last quadrennial review, most notably from the continued growth of 
online video options, we disagree with the Network Commenters that the 
Dual Network Rule is no longer in the public interest as a result of 
these newer outlets. As described above, we continue to find that the 
mass appeal of Big Four broadcast programming sets it apart in the 
video marketplace. With respect to online programming, although not 
directly comparable to ratings for traditional television, lists are 
routinely published identifying the most streamed series and movies, 
the overwhelming majority of which appear on services best described as 
subscription video-on-demand (or SVOD) services. Although SVOD services 
offer notable original content and garner many millions of subscribers, 
as their descriptive moniker implies, these services pursue different 
strategies and offer different value propositions as compared to the 
Big Four broadcast networks. For instance, the Big Four broadcast 
networks offer live or linear programming intended to garner mass 
audiences and funded in large part through advertising revenues. Such 
network programming is available for free and over-the-air from 
broadcast television stations (i.e., without requiring internet access 
or a paid subscription) as well as on pay TV (i.e., MVPDs) and 
streaming online. Conversely, SVODs offer individual, on-demand 
programming for their customers--generally not live or linear national 
programming. Further, SVODs are primarily subscription based models, 
charging viewers fees for access, and with programming intended to 
drive subscriptions to the service and to retain existing subscribers. 
Moreover, as subscription-based services, SVODs do not compete with the 
Big Four broadcast networks for national advertising revenue. As 
previously stated, the goal of the Dual Network Rule is to foster 
competition in the provision of primetime entertainment programming and 
the sale of national advertising time. We find that retention of the 
rule continues to incentivize the Big Four broadcast networks to 
compete for viewers by producing a national television product that is 
desired by viewers. Allowing a merger between two of the Big Four 
broadcast networks, either based on competition from cable networks or 
the perceived competition from SVODs, would not promote the creation of 
more national programming, but instead, could lead to less national 
programming with wide audience appeal. In addition, we also agree with 
WGAE that the Dual Network Rule has not prevented the networks' parent 
companies from creating their own SVOD platforms that compete in the 
video marketplace.
    131. In reaching our conclusion that the rule remains in the public 
interest, we also disagree with the Network Commenters that new 
competition for advertising revenue from digital platforms and social 
media companies, supports eliminating the Dual Network Rule at this 
time. Instead, as described above, we find that the Big Four broadcast 
networks offer a unique advertising product that reaches the largest 
audience possible, something that is not routinely matched by either 
cable networks or SVODs. Indeed, we find that there is still a market 
for advertisers trying to reach a national audience via linear 
television. Media buyer Magna states that national broadcast and cable 
television generated $39 billion in 2021, which marked a 7% increase 
over the previous year. Moreover, advertising over television is often 
viewed as unique in that it can protect brand safety by allowing brands 
to choose when they want an ad to be aired in contrast with less 
controllable digital advertising where a brand may appear in 
circumstances beyond the control of the corporation placing the ad.
    132. Accordingly, the Dual Network Rule remains necessary in the 
public interest to promote competition in the provision of programming 
suitable for large, national audiences and the sale of national 
advertising time.
    133. Localism. We find that the Dual Network Rule also remains 
necessary to foster the Commission's goal of localism. Viewers benefit 
from localism when an affiliate station is able to

[[Page 12223]]

preempt national, network programming without fear of repercussion so 
that the affiliate station can air programming it feels is of 
preeminent importance to the local viewer. Eliminating the rule would 
increase the bargaining power of the Big Four broadcast networks over 
the local affiliates, which would then reduce the ability of the 
affiliates to influence network programming decisions or exert their 
own independence from their affiliated network in a manner that best 
serves the needs of their local communities. This balance is important 
because the networks and the local affiliates have differing incentives 
and obligations. Broadcast networks design their programming to reach 
the largest audience possible as well as to maximize advertising 
revenue. Local affiliates, by contrast, have obligations and incentives 
to serve their local communities by offering local news and other 
programming. The 2022 Communications Marketplace Report notes that 
``[d]espite COVID-related budget cuts, in 2020, 1,116 television 
stations aired local news.'' Thus, while local affiliates typically 
want the most popular programming a network has to offer, an affiliate, 
nonetheless, may wish to offer input to a network on its programming so 
that it better serves the specific needs and interests of its specific 
local community or preempt network programming for programming that is 
important for its local community.
    134. We agree with the Network Affiliates that the reduction in the 
number of networks resulting from a Big Four network merger would 
reduce the bargaining power for affiliates. With fewer networks, 
affiliates would be less able, if at all, to use the availability of 
other top, independently owned networks as a bargaining tool to exert 
influence on the programming decisions of its network, including with 
regard to program content and scheduling. For similar reasons, we also 
find that the existence of other networks gives affiliates more leeway 
to raise locally oriented concerns with network programming or decide 
to preempt network programming in favor of programming that may better 
fit the local needs of their communities. We also find that the dual 
network rule potentially provides a local affiliate with an additional 
affiliation option should it come to an affiliation negotiation impasse 
with a network.
    135. In addition, we find that the increases in affiliation fees 
paid by the local affiliates to the Big Four broadcast networks in 
recent years are evidence of the considerable leverage the Big Four 
broadcast networks already hold in their negotiations with affiliates. 
And we conclude that eliminating the Dual Network Rule would upset the 
existing balance between networks and affiliates to the detriment of 
local viewers. As the Network Affiliates note, networks originally 
provided content to the local affiliates for free or in exchange for 
advertising availabilities. However, the Big Four broadcast networks 
now draw significant sums of revenue via reverse compensation from the 
local affiliates. Notably, much of this revenue is derived from 
retransmission consent revenue, at least some of which could otherwise 
be expected to flow back into local station operations but is instead 
redirected towards national programming produced by the networks. 
According to one estimate, total industrywide reverse compensation 
payments paid by affiliates to broadcast networks have increased from 
roughly $300 million in 2010 to $2.9 billion in 2017. The Affiliates 
report that some pay as much as 70% of their retransmission consent 
revenue to the network, and S&P Global estimates that nearly 50% of all 
retransmission consent revenue of the Big Four affiliated stations went 
back to the networks in 2019. We find that eliminating or loosening the 
Dual Network Rule would only increase the leverage of the networks at 
the potential expense of local affiliates and their commitment to the 
needs and interests of local viewers.
    136. For these reasons, we agree with the Network Affiliates that 
the Dual Network Rule is a ``reinforcing mechanism'' that helps 
maintain the balance between the national goals of the networks and the 
local commitments of the affiliates, and it thus remains necessary to 
foster localism. If two of the Big Four broadcast networks were to 
merge, local broadcast affiliates would have fewer options to re-
affiliate with a national network and would have a reduced ability to 
influence the programming decisions of the networks--at a detriment to 
their local communities. Accordingly, we find the rule also continues 
to be necessary in the public interest to promote localism, and we 
retain the rule without modification.
    137. Finally, we disagree with the Network Commenters that 
traditional antitrust protections would sufficiently protect the public 
interest if we modified the Dual Network Rule to be no longer an ex 
ante prohibition. As we have stated previously, a traditional antitrust 
analysis does not consider the harms the Dual Network Rule protects 
against, namely, that a merger may ``restrict the availability, price, 
and quality of primetime entertainment programming and the bargaining 
power and influence of network affiliate stations, harming consumers 
and localism.'' In addition, while a fact-specific public interest 
review by the Commission would remain, the information and data already 
before us provide a general picture of what a merger between two of the 
Big Four broadcast networks may look like, and we find that such a 
merger would harm competition and localism such that the ex ante 
prohibition remains appropriate.
    138. Minority and Female Ownership. In the NPRM, we sought comment 
on how, if at all, the Dual Network Rule impacts female and minority 
ownership of broadcast stations; however, no commenters responded to 
the issue. Due to the rule's focus on mergers between the Big Four 
broadcast networks rather than the ownership of broadcast stations in 
local markets, and the absence of relevant comment in the record, we 
find that the rule likely does not have a meaningful impact on female 
and minority ownership of broadcast stations.
    139. Cost Benefit Analysis. In the NPRM, we sought comment on the 
costs and benefits of retaining, modifying, or eliminating the Dual 
Network Rule with an emphasis on data regarding the economic impact any 
decision may have. While commenters provided data about the relative 
market strength of the Big Four broadcast networks, no commenters 
addressed data as to the rule's costs and benefits. Ultimately, for the 
reasons explained in the discussion above, we find that the benefits of 
maintaining the Dual Network Rule outweigh the costs. Specifically, we 
find that the benefits consumers receive by keeping the Big Four 
broadcast networks intact (e.g., the increased quality and quantity of 
national programming; maintenance of balance between networks and 
affiliates) outweigh the potential costs of the rule, which might 
include preventing the increased economy of scale that two merged 
networks could attain.

V. Diversity Related Proposals

    140. Consistent with commitments made by the Commission in the 
2010/2014 Quadrennial Review Order, the NPRM sought comment on three 
long-pending proposals that had previously been put forward by the 
Multicultural Media, Telecom and internet Council (MMTC), only one of 
which continues to receive support for review in a rulemaking and each 
of which we decline to adopt today. In the 2010/2014 Quadrennial Review 
Order, the Commission stated that it would

[[Page 12224]]

evaluate the feasibility of extending cable procurement type rules to 
the broadcast industry and also consider further the ideas of tradeable 
diversity credits and two formulas related to broadcast diversity. The 
Commission committed to soliciting input on these particular ideas in 
the document initiating the next quadrennial review of the media 
ownership rules. The first proposal, extending cable procurement 
requirements to broadcasters, is one we will continue to consider 
outside of this proceeding. We decline to pursue the other proposals--
developing a model for market-based tradeable ``diversity credits'' to 
serve as an alternative method for adopting ownership limits and 
adopting formulas aimed at creating media ownership limits that promote 
diversity--given the lack of current support for them and the lack of 
detail in the record about how they would be implemented.
    141. While, for reasons discussed below, we do not adopt these 
specific proposals at this time, we continue to look for ways to 
address the lack of diversity in media ownership and the broader media 
ecosystem. For example, we recognize the calls in this proceeding to 
reinstate the tax certificate program in order to foster ownership of 
broadcast stations by minorities and women, and we urge Congress to 
heed these requests from both broadcasters and public interest groups 
alike. Indeed, the Commission has long-supported reinstatement of the 
tax certificate program, recognizing its proven ability to broaden the 
diversity of media ownership. In addition to seeking ways to enhance 
ownership diversity within the broadcast sector, we continue to search 
for and develop more accurate information about the level of diversity 
within the broadcast sector. In this regard, as mentioned above, the 
Commission's Office of Economics and Analytics recently released a 
white paper on minority ownership of broadcast television stations that 
will continue to inform our understanding of the television market and 
the diversity of ownership. As another example, we note that the Media 
Bureau recently sought public comment on a petition for rulemaking 
filed by FUSE, LLC, and other public interest groups regarding the 
establishment of an annual report on the diversity of video programming 
content vendors. We turn below to the proposals raised in the NPRM.
    142. Extension of Cable Procurement Regulation. First, we determine 
that the issue of whether to extend the cable procurement requirement 
to other Commission regulatees should be reviewed outside the context 
of the quadrennial review, which per statutory mandate focuses on our 
media ownership rules. As part of the 1992 Cable Act, Congress 
established the so-called cable procurement requirement, which directs 
operators of cable systems to: ``encourage minority and female 
entrepreneurs to conduct business with all parts of its operation; and 
. . . analyze the results of its efforts to recruit, hire, promote, and 
use the services of minorities and women and explain any difficulties 
encountered in implementing its equal employment opportunity program.'' 
Based on this statutory requirement, the Commission promulgated section 
76.75(e), which provides that a cable system must: ``[e]ncourage 
minority and female entrepreneurs to conduct business with all parts of 
its operation.'' The rule explains that ``[f]or example, this 
requirement may be met by: (1) Recruiting as wide as possible a pool of 
qualified entrepreneurs from sources such as employee referrals, 
community groups, contractors, associations, and other sources likely 
to be representative of minority and female interests.''
    143. In response to MMTC's proposal, the NPRM sought comment on the 
Commission's statutory authority to extend the cable procurement 
requirement to broadcasters, given that the cable requirement flows 
directly from the statutory mandate pertaining to the cable industry 
contained in the 1992 Cable Act. In addition, the Commission sought 
comment on whether by specifically identifying minority and female 
entrepreneurs, the proposed rule would classify those entrepreneurs 
differently from others such as to trigger heightened judicial 
scrutiny, and, if so, whether such a proposed rule could be modified in 
some way to avoid legal impediments. The NPRM also sought data 
demonstrating whether the cable procurement rule had in fact had a 
beneficial impact on minority and female participation, as well as 
input on the likelihood of similar impacts in the broadcast sector if 
the requirement was extended, given the differences between the cable 
and broadcast industries.
    144. This proposal garnered extremely limited comment, with sparse 
support. In particular, commenters failed to address the substantive 
statutory authority and constitutional issues the Commission set forth 
in the NPRM. Moreover, MMTC, which initially proposed the extension of 
the cable procurement requirement to broadcasters, has over the course 
of this proceeding broadened its request to now suggest an extension of 
the requirement to all Commission regulated entities, not just 
broadcast licensees. Further, MMTC now recommends that the Commission 
consider the broader request in the context of a new docket.
    145. In light of this, we determine today to terminate review of 
this issue in the context of our quadrennial review of the structural 
ownership rules applicable to broadcasting. Rather, we defer to a later 
date whether to commence a separate proceeding regarding extension of 
the cable procurement requirement to other Commission regulated 
entities. While we will continue to consider this proposal, we note 
that substantively the issue of procurement does not fall within the 
ambit of our quadrennial review proceedings, which are conducted 
pursuant to the statutory requirement to review our broadcast ownership 
rules every four years to determine whether they remain ``necessary in 
the public interest as the result of competition.'' Nevertheless, 
because the Commission's prior commitment to seek comment on the 
extension of the cable procurement requirement stemmed from previous 
litigation before the Third Circuit involving the broadcast ownership 
rules, the Commission found it appropriate to seek comment on this 
proposal in the context of the 2018 Quadrennial Review proceeding. 
Given the limited comment on the extension of the cable procurement 
requirement in the instant proceeding, the significant remaining open 
issues, and the specific request to broaden the scope of this issue to 
all FCC-regulated industries and entities in a separate proceeding, we 
decline to pursue the issue further in the context of the quadrennial 
review proceedings.
    146. Other Diversity Proposals. In addition to the cable 
procurement proposal, the Commission also committed in the 2010/2014 
Quadrennial Review Order to seek comment on two other diversity-related 
proposals floated in prior proceedings, both of which we decline to 
adopt for lack of support. These proposals were described as: (1) 
developing a model for market-based tradeable ``diversity credits'' to 
serve as an alternative method for adopting ownership limits; and (2) 
adopting a ``tipping point'' formula and/or a ``source diversity 
formula.'' While the concept of diversity credits was not well-defined 
when initially proposed to the Commission in 2002, the general idea 
appears to be that a system of ``diversity credits'' could be created 
that could be traded in a market-based system and redeemed by the buyer 
of a broadcast station to offset any increased concentration that would 
result from the proposed transaction.

[[Page 12225]]

The diversity credits concept was further refined in 2004, with the 
idea being that the number of diversity credits attached to each 
license would be commensurate with the extent to which the licensee of 
the station was considered to be socially and economically 
disadvantaged. The diversity credits proposal suggested that when a 
transaction occurred that was deemed to promote diversity (and here the 
proponents suggested a transaction that would result in the breakup of 
a local radio ownership cluster, or the sale of a station to a socially 
and economically disadvantaged business), the Commission would award 
the seller additional diversity credits commensurate with the extent to 
which the transaction promotes diversity. Similarly, when a transaction 
reduced diversity (perhaps by creating an ownership combination or 
expanding an ownership cluster), the Commission would require the 
submission of a certain number of diversity credits from the buyer, 
commensurate with the extent to the which the transaction reduced 
diversity. In 2002, MMTC proposed the ``tipping point formula'' as an 
alternative to the approach the Commission used at the time of flagging 
radio station transactions that, based on an initial analysis, would 
result in a level of local radio concentration implicating public 
interest concerns for maintaining diversity and competition. MMTC's 
tipping point formula was based on the premise that platforms should 
not control so much advertising revenue that well run independents 
cannot survive or offer meaningful local service. The source diversity 
formula appears to seek to measure the level of consumer welfare 
derived from viewpoint diversity in the broadcast market. It was 
suggested that the source diversity formula could be used as a 
thermometer to determine whether a national or local market manifests 
strong diversity, moderate diversity, or slight diversity. It was 
proposed that the Commission conduct a negotiated rulemaking to 
determine what significance to accord to various temperature readings 
on the HHI for a Diversity thermometer. For example, what temperatures 
would reflect poor health, versus measurements indicative of strong 
health. Because many details associated with these proposals had never 
been developed when the ideas were presented previously, the NPRM 
sought to unpack these dormant issues and asked many specific questions 
about the proposals. The Commission sought to elicit answers about 
threshold matters such as statutory authority, key definitions, 
feasibility, and the continued relevance of the proposals given the 
significant passage of time since they were initially put forth.
    147. There was extremely limited comment on these proposals, with 
most commenters either opposing the ideas or finding the proposals 
themselves to lack sufficient specificity. MMTC, the chief proponent of 
these ideas, itself notes that perhaps the proposals are not well-
suited for review in a notice and comment rulemaking and might be more 
appropriately considered in some other forum. Given the sparse record 
on these proposals and the lack of any additional guidance in the 
record about how they would operate in practice and integrate into the 
Commission's structural ownership rules, we decide today to terminate 
further review of these proposals.

VI. Procedural Matters

    148. Final Regulatory Flexibility Analysis. As required by the 
Regulatory Flexibility Act of 1980, as amended (RFA), the Commission 
has prepared a Final Regulatory Flexibility Analysis (FRFA) of the 
possible significant economic impact on small entities of the policies 
and rules addressed in the Report and Order.

A. Need for, and Objectives of, the Report and Order

    149. The Report and Order (Order) concludes the 2018 Quadrennial 
Review of the broadcast ownership rules, which were initiated pursuant 
to Section 202(h) of the Telecommunications Act of 1996 (1996 Act). The 
Commission is required by statute to review its media ownership rules 
every four years to determine whether they ``[a]re necessary in the 
public interest as the result of competition'' and to ``repeal or 
modify any regulation it determines to be no longer in the public 
interest.''
    150. The media ownership rules that are subject to this quadrennial 
review are the Local Radio Ownership Rule, the Local Television 
Ownership Rule, and the Dual Network Rule. These rules are found, 
respectively, at 47 CFR 73.3555(a), (b) and 73.658(g). Ultimately, 
while the Commission acknowledges the impact of new technologies on the 
media marketplace, it concludes that some limits on broadcast ownership 
remain necessary to safeguard and promote the Commission's policy goals 
of fostering competition, localism, and diversity. Based on our careful 
review of the record, we find that our existing rules, with some minor 
modifications, remain necessary in the public interest.
    151. Specifically, we retain the Dual Network Rule and the Local 
Radio Ownership Rule, which we modify only to make permanent the 
interim contour-overlap methodology long used to determine ownership 
limits in areas outside the boundaries of defined Nielsen Audio Metro 
markets and in Puerto Rico. We likewise retain the Local Television 
Ownership Rule with modest adjustments to reflect changes that have 
occurred in the television marketplace. The existing Local Television 
Ownership Rule ensures competition among local broadcasters while 
allowing for flexibility should the circumstances of local markets 
justify it. Accordingly, today we update the methodology for 
determining station ranking within a market to better reflect current 
industry practices, and we extend the existing prohibition on 
circumventing the ownership of two top-four ranked stations in a 
market. We find that the modifications adopted today will enable the 
Commission to promote competition, localism, and viewpoint diversity 
more effectively going forward.
    152. Local Radio Ownership Rule. The Commission determines that the 
Local Radio Ownership Rule remains necessary in the public interest as 
the result of competition. The purpose of the rule is to ensure 
competition between broadcast radio stations within a market so that 
radio owners are motivated to provide the highest quality of service to 
the public. In addressing the public interest, the Commission notes 
that competition stems from the premise that the listening public, not 
the advertising industry, is the constituency that the rule is intended 
to serve. If radio owners were allowed to acquire more radio stations 
than allowed by the rule, the Commission expresses skepticism whether 
owners would be able to maintain the same level of service on their 
stations given reduced competition. Further, the Commission states that 
allowing one entity to own more radio stations in a market than 
currently permitted would threaten the viability of smaller stations. 
In the Order, the Commission articulates that the rule already allows a 
generous amount of common ownership within a market and does not limit 
ownership across markets.
    153. The Order leaves the market definition in place because it 
reflects the type of competition that the rule was intended to 
promote--competition between local radio stations. The Order also 
preserves the existing market size tiers and numerical limits. The 
Commission finds that the current tiers and limits prevent 
consolidation to the

[[Page 12226]]

level of monopolization or near monopolization in many, if not most, 
markets. As to the Commission's AM/FM subcaps, the Order leaves in 
place the existing limits, and notes that lifting them would have 
deleterious impacts on the AM band, including excessive, undue 
concentration of ownership. The Order declines to revise the 
presumption for certain embedded markets because the existing 
presumption sufficiently addresses concerns regarding stations in 
embedded markets.
    154. Local Television Ownership Rule. The Commission finds that the 
Local Television Ownership Rule remains necessary to promote 
competition among broadcast television stations in local markets as 
there are still market characteristics unique to broadcast television. 
The Commission also finds that ensuring broadcast television stations 
remain independently owned and competitive in providing programming 
that serves the interests and needs of local communities promotes 
localism goals more effectively than permitting greater consolidation.
    155. The Commission observes that the numerical limits set under 
the rule continue to strike the appropriate balance of enabling some 
efficiencies of common ownership while maintaining a level of 
competition amongst broadcast television stations to ensure that they 
continue to serve the public interest. Likewise, the Order holds that 
the Top-Four Prohibition, and its case-by-case approach, strikes a 
reasonable balance between preserving and supporting enhancements of 
the public interest standards of competition, localism, and diversity 
with occasional incidences of acquisitions under special circumstances 
that warrant an exception to the prohibition. Reflecting the 
Commission's commitment to accurate measurements of the industry for 
purposes of this rule, the Order revises the Commission's methodology 
used to determine market ranking and performance of stations. To 
preserve the intended purpose of the prohibition, the Order seeks 
changes to the rule that would effectively close loopholes used by some 
broadcast stations to acquire affiliations from top-four rated full-
power stations and moving such affiliations to multicast streams or low 
power stations.
    156. The Commission finds that the rule is consistent with the 
objective of fostering minority and female ownership within the 
industry. Thus, retaining the existing ownership limits preserves 
opportunities for greater ownership diversity. Media consolidation, 
which the Commission believes would increase were the rule to be 
relaxed or eliminated, would result in additional entry barriers and 
decrease the likelihood that television stations would be sold to a new 
entrant, including a minority or female owner. As the Commission 
observes, evidence shows that divestitures and other transactions made 
to comply with the existing ownership limits have resulted in new 
entry, including by minority and female owners, into local television 
markets.
    157. Dual Network Rule. In the Order, the Commission finds that the 
Dual Network Rule remains necessary in the public interest to protect 
and promote competition in the provision and creation of primetime 
entertainment programming and the sale of national advertising time. 
Based on the record collected in the 2018 Quadrennial Review, the 
Commission finds that the Big Four broadcast networks (ABC, CBS, Fox, 
and NBC) have a unique ability to regularly attract large primetime 
audiences, which separates them from other broadcast and cable 
networks.
    158. The Big Four broadcast networks comprise a strategic group in 
the national advertising marketplace and compete mostly amongst 
themselves for advertisers that seek to reach large, national audiences 
consistently and are willing to pay a premium to reach that audience. 
The Commission finds that the Big Four broadcast networks invest in and 
create innovative high-quality programming particularly during 
primetime that will draw advertisers and thus bring in the highest 
advertising revenues. The merger of two of the Big Four broadcast 
networks would subsequently decrease that competition, leaving 
advertisers with fewer options to reach a mass audience, and would also 
reduce the remaining networks' need to produce the innovative 
programming desired by viewers.
    159. The Order also determines that the Dual Network Rule is 
necessary to foster the Commission's goal of localism. Specifically, 
the Commission finds that eliminating the rule would increase the 
bargaining power of the networks over the local affiliates, which would 
then reduce the ability of the affiliates to influence network 
programming decisions or exert their own independence from their 
affiliated network in a manner that best serves their local 
communities.

B. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA

    160. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an initial Regulatory Flexibility Act Analysis (IRFA) 
was incorporated in the Notice of Proposed Rulemaking (NPRM), released 
in December 2018. The Federal Communications Commission (Commission) 
sought written public comment on the proposals in the NPRM, including 
comment on the IRFA. There were no comments filed that specifically 
addressed the proposed rules and policies presented in the IRFA.

C. Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration

    161. Pursuant to the Small Business Jobs Act of 2010, which amended 
the RFA, the Commission is required to respond to any comments filed by 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA) and to provide a detailed statement of any change made to the 
proposed rules as a result of those comments. The Chief Counsel did not 
file any comments in response to the proposed rules in this proceeding.

D. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply

    162. 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 rules adopted herein. The RFA generally 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.
    163. Television Broadcasting. This industry is comprised of 
``establishments primarily engaged in broadcasting images together with 
sound.'' These establishments operate television broadcast studios and 
facilities for the programming and transmission of programs to the 
public. These establishments also produce or transmit visual 
programming to affiliated broadcast television stations, which in turn 
broadcast the programs to the public on a predetermined schedule. 
Programming may originate in their own studio, from an affiliated 
network, or from external sources. The SBA small business size standard 
for this industry classifies businesses having $41.5 million or less in 
annual receipts as

[[Page 12227]]

small. 2017 U.S. Census Bureau data indicate that 744 firms in this 
industry operated for the entire year. Of that number, 657 firms had 
revenue of less than $25,000,000. Based on this data we estimate that 
the majority of television broadcasters are small entities under the 
SBA small business size standard.
    164. As of June 2023, there were 1,375 licensed commercial 
television stations. Of this total, 1,256 stations (or 91.3%) had 
revenues of $41.5 million or less in 2022, according to Commission 
staff review of the BIA Kelsey Inc. Media Access Pro Television 
Database (BIA) on April 7, 2023, and therefore these licensees qualify 
as small entities under the SBA definition. In addition, the Commission 
estimates as of June 2023, there were 383 licensed noncommercial 
educational (NCE) television stations, 381 Class A TV stations, 1,902 
LPTV stations and 3,123 TV translator stations. The Commission, 
however, does not compile and otherwise does not have access to 
financial information for these television broadcast stations that 
would permit it to determine how many of these stations qualify as 
small entities under the SBA small business size standard. 
Nevertheless, given the SBA's large annual receipts threshold for this 
industry and the nature of these television station licensees, we 
presume that all of these entities qualify as small entities under the 
above SBA small business size standard.
    165. Radio Stations. This industry is comprised of ``establishments 
primarily engaged in broadcasting aural programs by radio to the 
public.'' Programming may originate in their own studio, from an 
affiliated network, or from external sources. The SBA small business 
size standard for this industry classifies firms having $41.5 million 
or less in annual receipts as small. U.S. Census Bureau data for 2017 
show that 2,963 firms operated in this industry during that year. Of 
this number, 1,879 firms operated with revenue of less than $25 million 
per year. Based on this data and the SBA's small business size 
standard, we estimate a majority of such entities are small entities.
    166. The Commission estimates that as of June 30, 2023, there were 
4,463 licensed commercial AM radio stations and 6,675 licensed 
commercial FM radio stations, for a combined total of 11,138 commercial 
radio stations. Of this total, 11,136 stations (or 99.98%) had revenues 
of $41.5 million or less in 2022, according to Commission staff review 
of the BIA Kelsey Inc. Media Access Pro Database (BIA) on April 7, 
2023, and therefore these licensees qualify as small entities under the 
SBA definition. In addition, the Commission estimates that as of June 
30, 2023, there were 4,236 licensed noncommercial (NCE) FM radio 
stations, 1,989 low power FM (LPFM) stations, and 8,935 FM translators 
and boosters. The Commission however does not compile, and otherwise 
does not have access to financial information for these radio stations 
that would permit it to determine how many of these stations qualify as 
small entities under the SBA small business size standard. 
Nevertheless, given the SBA's large annual receipts threshold for this 
industry and the nature of radio station licensees, we presume that all 
of these entities qualify as small entities under the above SBA small 
business size standard.
    167. We note, however, that in assessing whether a business concern 
qualifies as ``small'' under the above definition, business (control) 
affiliations must be included. Our estimate, therefore, likely 
overstates the number of small entities that might be affected by our 
action, because the revenue figure on which it is based does not 
include or aggregate revenues from affiliated companies. In addition, 
another element of the definition of ``small business'' requires that 
an entity not be dominant in its field of operation. We are unable at 
this time to define or quantify the criteria that would establish 
whether a specific radio or television broadcast station is dominant in 
its field of operation. Accordingly, the estimate of small businesses 
to which the rules may apply does not exclude any radio or television 
station from the definition of a small business on this basis and is 
therefore possibly over-inclusive. An additional element of the 
definition of ``small business'' is that the entity must be 
independently owned and operated. Because it is difficult to assess 
these criteria in the context of media entities, the estimate of small 
businesses to which the rules may apply does not exclude any radio or 
television station from the definition of a small business on this 
basis and similarly may be over-inclusive.

E. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    168. The Order requires modification of several FCC forms and their 
instructions: (1) FCC Form 301, Application for Construction Permit for 
Commercial Broadcast Station; (2) FCC Form 314, Application for Consent 
to Assignment of Broadcast Station Construction Permit or License; and 
(3) FCC Form 315, Application for Consent to Transfer Control of 
Corporation Holding Broadcast Station Construction Permit or License. 
The change will involve replacing instructions on the forms for the 
Local Television Ownership Rule, which stated that ``among the top four 
stations in the DMA, based on the most recent all-day (9:00 a.m.-
midnight) audience share as determined by Nielsen or a comparable 
professional survey organization . . .'' The instruction's will be 
modified to incorporate the new standard measurement of ``Sunday to 
Saturday, 7AM to 1AM daypart'' in order to more accurately reflect a 
station's performance in terms of audience share. In addition, ratings 
data submitted will now need to be averaged over the 12-month period 
preceding a transaction. The impact of these minor changes will be the 
same on all entities, and we do not anticipate that compliance will 
require the expenditure of any additional resources or place additional 
burdens on small businesses.
    169. As a result of these modified reporting requirements, we do 
not believe that small businesses will need to hire additional 
professionals (e.g., attorneys, engineers, economists, or accountants) 
to comply with the updated standard under the Local Television 
Ownership Rule's Top-Four Prohibition. Further, the Order delegates to 
the Media Bureau the authority to update FCC forms to conform with the 
rule changes adopted therein.

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

    170. The RFA requires an agency to provide, ``a description of the 
steps the agency has taken to minimize the significant economic impact 
on small entities. . .including a statement of the factual, policy, and 
legal reasons for selecting the alternative adopted in the final rule 
and why each one of the other significant alternatives to the rule 
considered by the agency which affect the impact on small entities was 
rejected.''
    171. In conducting the quadrennial review, the Commission has three 
chief alternatives available for each of the Commission's media 
ownership rules--eliminate the rule, modify it, or, if the Commission 
determines that the rule is ``necessary in the public interest,'' 
retain it. The Commission finds that the rules adopted in the Order, 
which are intended to achieve the policy goals of competition, 
localism, and diversity, will continue to benefit small entities by 
fostering a media marketplace in which small entities are better able 
to compete and sustain services to their communities. The Commission 
discusses below several ways in which

[[Page 12228]]

the rules may benefit small entities as well as steps taken, and 
significant alternatives considered, to minimize any potential burdens 
on small entities.
    172. In consideration of the burdens that paperwork can place 
especially on small entities with limited resources, this Order 
proposes no new reporting requirements, performance standards or other 
compliance obligations, although, as discussed above, it modifies, as 
necessary, certain existing reporting forms.
    173. Local Radio Ownership Rule. In the Order, the Commission finds 
that the Local Radio Ownership Rule remains necessary in the public 
interest. The Commission finds that retaining the rule will foster the 
ability of all stations, large and small alike, to operate in a 
competitive environment. Without the rule, the Commission finds that 
the competitive and business environment for smaller stations could 
deteriorate due to consolidation among dominant firms, such that many 
smaller stations may be forced to exit their respective markets. By 
preserving the rule in the Order, the Commission states that 
opportunities for diffuse ownership are preserved.
    174. In the Order, the Commission preserves the AM/FM subcap 
limits. The Order preserves the subcaps, finding that they contribute 
necessary support to the public interest factors of competition, 
localism, and diversity. As to commenters' recommendation that the 
Commission should dispense with the subcaps altogether, the Commission 
expresses concern that without the rule, smaller stations could face an 
influx of larger station-group acquisitions, which would lead to 
increased concentration of ownership and a race to the bottom for 
purposes of competition and local content.
    175. Local Television Ownership Rule. The Order retains the Local 
Television Ownership Rule subject to some small modifications. Notably, 
the Commission ends the loophole for the Top-Four Prohibition's limit 
on certain broadcast network affiliation acquisitions through some 
broadcasters' use of multicast streams and LPTV stations. The 
Commission modifies the provision in the current rule that determines 
market ranking and performance according to Nielsen or other 
substitutable data. The Order adopts a ``Sunday to Saturday, 7AM to 1AM 
daypart'' to determine audience share ``from ratings averaged over a 
12-month period immediately preceding the date of application'' as the 
new standard for the Top-Four Prohibition (and in concert with it, 
adopts the 7AM to 1AM daypart for failing station waivers as well). 
Further, to accurately measure a station's audience share and ranking, 
the Order establishes a new methodology by which the Commission will 
aggregate the audience share of all free-to-consumer non-simulcast 
multicast programming airing on streams owned, operated, or controlled 
by a station. The Commission believes that this adjustment will better 
equip the agency to measure stations' performance and competitive 
strength within a given market. In the Commission's analysis of the 
Local Television Ownership Rule, detailed consideration is given in 
analyzing the effects on consumers and broadcasters of the rule's 
preservation, the rule's absence, or the rule's modification. The 
Commission's evaluation of small business involvement in the local 
television marketplace ultimately favors a preservation of a modified 
version of the rule, as further explained below.
    176. The Commission finds that the rule, as modified, will help to 
ensure that ownership structures and concentrations within local 
television markets do not pose obstacles to entry for small entities. 
The Commission finds that leaving the rule in place will actually allow 
for more firms, including those falling under the definition of small 
entity, to gain entry into or to preserve their already existing 
involvement within local markets as well as to compete effectively 
against other stations. Preserving the rule helps to mitigate and 
minimize those negative economic impacts resulting from enlarged market 
concentration, and in turn minimized competition, were broadcast 
station groups allowed to acquire stations within markets without 
reasonable limitation. The modifications established in the Order, 
which close affiliation loopholes, work to ensure the integrity of the 
rules necessary for the maintenance of business environments in which 
small stations can seek entrance and growth. Likewise, modifications to 
the provisional standard for the measurement of market ranking and 
performance will promote the interests of small entities because the 
new standard will offer a clearer snapshot of what market competition 
exists among broadcasters in a given DMA.
    177. Dual Network Rule. The Order preserves the Dual Network Rule, 
which effectively prohibits a merger between the Big Four broadcast 
networks (specifically, ABC, CBS, Fox, and NBC). By keeping the rule in 
place, the Commission finds that the bargaining power of local 
broadcast affiliates, including many small entities, is promoted by 
enabling such entities to better influence top-four network programming 
decisions in ways that better serve the interests of local communities. 
Unlike the Big Four broadcast networks, which design their shows with 
the goal of producing the largest national audience possible, small 
broadcast affiliates typically design their programming to serve niche 
audiences. Such design is indicative of local broadcasters' 
independence from their affiliated network. Such independence often 
times is reflective of local content that best serves the particular 
and localized needs of individual communities. The Commission finds 
that the bargaining power of affiliates would diminish were there to be 
a reduction in the number of the Big Four broadcast networks. The 
lasting economic impacts from the retreat of such bargaining power may 
diminish local broadcasters' abilities to provide the type of local 
programming that the Commission believes increases competition for 
local audiences. Thus, by eliminating the Dual Network Rule, local 
affiliates would be further displaced from the networks in terms of 
their negotiating power.
    178. In summary, the Commission agrees with the local affiliates 
that the Dual Network Rule is a ``reinforcing mechanism'' that helps 
maintain local commitments of the affiliates, and it thus remains 
necessary to foster localism and the health of affiliates, including 
many small entities. If two of the Big Four broadcast networks were to 
merge, affiliates would have fewer options to re-affiliate with a 
national network and would have a reduced ability to influence the 
programming decisions of the networks--at a detriment to both the 
affiliate networks and their local communities.

G. Report to Congress

    179. The Commission will send a copy of the Order, including this 
FRFA, in a report to Congress pursuant to the Congressional Review Act. 
In addition, the Commission will send a copy of the Order, including 
the FRFA, to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the Order and FRFA (or summaries thereof) 
will also be published in the Federal Register.
    180. Final Paperwork Reduction Act Analysis. This document does not 
contain new or modified information collection requirements subject to 
the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In 
addition, therefore, it does not contain any new or modified 
information collection burden for small business concerns with fewer 
than 25 employees, pursuant to

[[Page 12229]]

the Small Business Paperwork Relief Act of 2002, Public Law 107-198, 
see 44 U.S.C. 3506(c)(4). This document may contain non-substantive 
modifications to approved information collection(s). Any such 
modifications will be submitted to OMB for review pursuant to OMB's 
non-substantive modification process.
    181. Congressional Review Act. The Commission has determined, and 
the Administrator of the Office of Information and Regulatory Affairs, 
Office of Management and Budget concurs, that this rule is ``non-
major'' under the Congressional Review Act, 5 U.S.C. 804(2). The 
Commission will send a copy of the Order to Congress and the Government 
Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

VII. Ordering Clauses

    182. Accordingly, it is ordered, that pursuant to the authority 
contained in sections 1, 2(a), 4(i), 303, 307, 309, 310, and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 151, 152(a), 154(i), 
303, 307, 309, 310, and 403, and section 202(h) of the 
Telecommunications Act of 1996, this Report and Order is adopted. The 
Report and Order and rule modifications attached to Appendix A of the 
document shall be effective thirty (30) days after publication of the 
text or summary thereof in the Federal Register, except that any non-
substantive changes to Commission Forms required as the result of the 
rule amendments adopted herein will not become effective until approved 
by the Office of Management and Budget.
    183. it is further ordered, that, should no petitions for 
reconsideration or petitions for judicial review be timely filed, the 
proceeding MB Docket No. 18-349 is terminated.
    184. It is further ordered, that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.
    185. It is further ordered, that the Office of the Managing 
Director, Performance Evaluation and Records Management shall send a 
copy of this Report and Order in a report to be sent to Congress and 
the Government Accountability Office pursuant to the Congressional 
Review Act, 5 U.S.C. 801(a)(1)(A).

List of Subjects in 47 CFR Part 73

    Radio, Television.


Federal Communications Commission.
Marlene Dortch,
Secretary. Office of the Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 73 as follows:

PART 73--RADIO BROADCAST SERVICES

0
1. The authority citation for part 73 continues to read as follows:

    Authority: 47 U.S.C. 154, 155, 301, 303, 307, 309, 310, 334, 336 
and 339.


0
2. Amend Sec.  73.3555 by revising paragraphs (b)(1)(ii) and (b)(2) and 
Note 11 to read as follows:


Sec.  73.3555  Multiple ownership.

* * * * *
    (b) * * *
    (1) * * *
    (ii) At the time the application to acquire or construct the 
station(s) is filed, at least one of the stations is not ranked among 
the top four stations in the DMA, based on the Sunday to Saturday, 7AM 
to 1AM daypart audience share from ratings averaged over a 12-month 
period immediately preceding the date of application, as measured by 
Nielsen Media Research or by any comparable professional, accepted 
audience ratings service. For any station broadcasting multiple 
programming streams, the audience share of all free-to-consumer non-
simulcast multicast programming airing on streams owned, operated, or 
controlled by a single station shall be aggregated to determine the 
station's audience share and ranking in a DMA (to the extent that such 
streams are ranked by Nielsen or a comparable professional, accepted 
audience ratings service).
    (2) Paragraph (b)(1)(ii) of this section (Top-Four Prohibition) 
shall not apply in cases where, at the request of the applicant, the 
Commission makes a finding that permitting an entity to directly or 
indirectly own, operate, or control two television stations licensed in 
the same DMA would serve the public interest, convenience, and 
necessity. The Commission will consider showings that the Top-Four 
Prohibition, including note 11 to this section, should not apply due to 
specific circumstances in a local market or with respect to a specific 
transaction on a case-by-case basis.
* * * * *

    Note 11 to Sec.  73.3555:  a. An entity will not be permitted to 
directly or indirectly own, operate, or control two television 
stations in the same DMA through the execution of any agreement (or 
series of agreements) involving stations in the same DMA, or any 
individual or entity with a cognizable interest in such stations, in 
which a station (the ``new affiliate'') acquires the network 
affiliation of another station (the ``previous affiliate''), if the 
change in network affiliations would result in the licensee of the 
new affiliate, or any individual or entity with a cognizable 
interest in the new affiliate, directly or indirectly owning, 
operating, or controlling two of the top-four rated television 
stations in the DMA at the time of the agreement. Parties should 
also refer to the Second Report and Order in MB Docket No. 14-50, 
FCC 16-107 (released August 25, 2016).
    b. Further, an entity will not be permitted through the 
execution of any agreement (or series of agreements) to acquire a 
network affiliation, directly or indirectly, if the change in 
network affiliation would result in the affiliation programming 
being broadcast from a television facility that is not counted as a 
station toward the total number of stations an entity is permitted 
to own under paragraph (b) of this section (e.g., a low power 
television station, a Class A television station, etc.) or on any 
television station's video programming stream that is not counted 
separately as a station toward the total number of stations an 
entity is permitted to own under paragraph (b) of this section 
(e.g., non-primary multicast streams) and where the change in 
affiliation would violate this Note were such television facility 
counted or such video programming stream counted separately as a 
station toward the total number of stations an entity is permitted 
to own for purposes of paragraph (b) of this section.


[FR Doc. 2024-02577 Filed 2-14-24; 8:45 am]
BILLING CODE 6712-01-P