Media Ownership: Economic Factors Influence the Number of Media  
Outlets in Local Markets, While Ownership by Minorities and Women
Appears Limited and Is Difficult to Assess (12-MAR-08,		 
GAO-08-383).							 
                                                                 
The media industry plays an important role in educating and	 
entertaining the public. While the media industry provides the	 
public with many national choices, media outlets located in a	 
local market are more likely to provide local programs that meet 
the needs of residents in the market compared to national	 
outlets. This report reviews (1) the number and ownership of	 
various media outlets; (2) the level of minority- and women-owned
broadcast outlets; (3) the influence of economic, legal and	 
regulatory, and technological factors on the number and ownership
of media outlets; and (4) stakeholders' opinions on modifying	 
certain media ownership laws and regulations. GAO conducted case 
studies of 16 randomly sampled markets, stratified by population.
GAO also interviewed officials from the Federal Communications	 
Commission (FCC), the Department of Commerce, trade associations,
and the industry. Finally, GAO reviewed FCC's forms, processes,  
and reports.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-383 					        
    ACCNO:   A81282						        
  TITLE:     Media Ownership: Economic Factors Influence the Number of
Media Outlets in Local Markets, While Ownership by Minorities and
Women Appears Limited and Is Difficult to Assess		 
     DATE:   03/12/2008 
  SUBJECT:   Broadcasting					 
	     Competition					 
	     Cooperative agreements				 
	     Data collection					 
	     Data integrity					 
	     Economic analysis					 
	     Economic development				 
	     Federal law					 
	     Federal regulations				 
	     Mass media 					 
	     Minorities 					 
	     Minority businesses				 
	     Program evaluation 				 
	     Radio						 
	     Reporting requirements				 
	     Risk factors					 
	     Standards evaluation				 
	     Strategic planning 				 
	     Television 					 
	     Women						 
	     Women-owned businesses				 
	     Program goals or objectives			 

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GAO-08-383

   

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material separately. 

Report to the Chairman, Subcommittee on Telecommunications and the 
Internet, Committee on Energy and Commerce, House of Representatives: 

United States Government Accountability Office: 

GAO: 

March 2008: 

Media Ownership: 

Economic Factors Influence the Number of Media Outlets in Local 
Markets, While Ownership by Minorities and Women Appears Limited and Is 
Difficult to Assess: 

GAO-08-383: 

GAO Highlights: 

Highlights of GA)-08-383, a report to the Chairman, Subcommittee on 
Telecommunications and the Internet, Committee on Energy and Commerce, 
House of Representatives. 

Why GAO Did This Study: 

The media industry plays an important role in educating and 
entertaining the public. While the media industry provides the public 
with many national choices, media outlets located in a local market are 
more likely to provide local programs that meet the needs of residents 
in the market compared to national outlets. This report reviews (1) the 
number and ownership of various media outlets; (2) the level of 
minority- and women-owned broadcast outlets; (3) the influence of 
economic, legal and regulatory, and technological factors on the number 
and ownership of media outlets; and (4) stakeholdersâ opinions on 
modifying certain media ownership laws and regulations. 

GAO conducted case studies of 16 randomly sampled markets, stratified 
by population. GAO also interviewed officials from the Federal 
Communications Commission (FCC), the Department of Commerce, trade 
associations, and the industry. Finally, GAO reviewed FCCâs forms, 
processes, and reports. 

What GAO Found: 

The numbers of media outlets and owners of media outlets generally 
increase with the size of the market; markets with large populations 
have more television and radio stations and newspapers than less 
populated markets. Additionally, diverse markets have more outlets 
operating in languages other than English, contributing to a greater 
number of outlets. Some companies participate in operating agreements 
wherein two or more media outlets might, for example, share content. As 
such, these agreements may suggest that the number of independently 
owned media outlets might not always be a good indicator of how many 
independently produced local news and other programs are available in a 
market. Finally, the Internet is expanding access to media content and 
competition. 

On a biennial basis, FCC collects data on the gender, race, and 
ethnicity of broadcast owners to, according to FCC, position itself and 
the Congress to assess the need for, and success of, programs to foster 
minority and women ownership. However, these data suffer from three 
weaknesses: (1) exemptions from filing for certain types of broadcast 
stations, (2) inadequate data quality procedures, and (3) problems with 
data storage and retrieval. These weaknesses limit the benefits of this 
data collection effort. While reliable government data are lacking, 
available evidence suggests that ownership of broadcast outlets by 
minorities and women is limited. Several barriers contribute to the 
limited levels of ownership by these groups, including a lack of easy 
access to sufficient capital. 

A variety of economic, legal and regulatory, and technological factors 
influence media ownership. Two economic factorsâhigh fixed costs and 
the size of the marketâappear to influence the number of media outlets 
in a market, the incentive to consolidate, and the prevalence of 
operating agreements. By limiting the number and types of media outlets 
that a company can own, various laws and regulations affect the 
ownership of media outlets. Technological factors, such as the 
emergence of the Internet, have facilitated entry for new companies, 
thereby increasing the amount of content and competition. 

Stakeholders expressed varied opinions on modifications to media 
ownership rules. Most business stakeholders expressing an opinion on 
various media ownership rules were more likely to report that the rules 
should be relaxed or repealed. In contrast, nonbusiness stakeholders 
who expressed an opinion on the rules were more likely to report that 
the rules should be left in place or strengthened. Both business and 
nonbusiness stakeholders who expressed an opinion on a previously 
repealed tax certificate program supported either reinstating or 
expanding the program to encourage the sale of broadcast outlets to 
minorities. 

What GAO Recommends: 

To more effectively monitor and report on the ownership of broadcast 
outlets by minorities and women, GAO recommends that FCC identify 
processes and procedures to improve the reliability of its data on 
gender, race, and ethnicity. FCC provided technical comments that were 
incorporated where appropriate. 

To view the full product, including the scope and methodology, click on 
GAO-08-383. For more information, contact JayEtta Z. Hecker, (202) 512-
2834, [email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Numbers of Media Outlets and Owners Generally Increase with Market 
Size, Although Operating Agreements May Reduce the Effective Number of 
Independent Outlets: 

Ownership of Broadcast Outlets by Minorities and Women Appears Limited, 
but Comprehensive Data Are Lacking: 

A Variety of Economic, Legal and Regulatory, and Technical Factors 
Influence Media Ownership: 

Stakeholders' Opinions Varied on Modifications to Media Ownership 
Rules, but Business Stakeholders Were More Likely to Favor 
Deregulation: 

Conclusion: 

Recommendation for Executive Action: 

Agency Comments: 

Appendix I: Scope and Methodology: 

Appendix II: Results from Case Study Locations: 

Appendix III: Organizations and Individuals Interviewed: 

Appendix IV: Comments from the Federal Communications Commission: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Number of Full-Power Television and Radio Stations and Daily 
Newspapers: 

Table 2: Number of Cable and DBS Subscribers: 

Table 3: Number of Outlets in the Top Three Markets--New York, Los 
Angeles, and Chicago: 

Table 4: Number of Outlets in the Largest City of the Large Markets-- 
Miami/Fort Lauderdale, Charlotte, Nashville, and Wilkes Barre/ 
Scranton: 

Table 5: Number of Outlets in the Largest City of the Medium-Size 
Markets--Tucson, Springfield, Chattanooga, Cedar Rapids/Waterloo/Iowa 
City/Dubuque, and Myrtle Beach/Florence: 

Table 6: Number of Outlets in the Small Markets--Terre Haute, Sherman/ 
Ada, Jackson, and Harrisonburg: 

Table 7: Local Media Markets Selected for Analysis: 

Table 8: Numbers of Outlets and Owners by Media Sector for the New York 
City DMA: 

Table 9: Numbers of Outlets and Owners by Media Sector for the Los 
Angeles DMA: 

Table 10: Numbers of Outlets and Owners by Media Sector for the Chicago 
DMA: 

Table 11: Numbers of Outlets and Owners by Media Sector for the Miami/ 
Fort-Lauderdale DMA: 

Table 12: Numbers of Outlets and Owners by Media Sector for the 
Charlotte DMA: 

Table 13: Numbers of Outlets and Owners by Media Sector for the 
Nashville DMA: 

Table 14: Numbers of Outlets and Owners by Media Sector for the Wilkes 
Barre/Scranton DMA: 

Table 15: Numbers of Outlets and Owners by Media Sector for the Tucson 
DMA: 

Table 16: Numbers of Outlets and Owners by Media Sector for the 
Springfield DMA: 

Table 17: Numbers of Outlets and Owners by Media Sector for the 
Chattanooga DMA: 

Table 18: Numbers of Outlets and Owners by Media Sector for the Cedar 
Rapids DMA: 

Table 19: Numbers of Outlets and Owners by Media Sector for Florence: 


Table 20: Numbers of Outlets and Owners by Media Sector for the Terre 
Haute DMA: 

Table 21: Numbers of Outlets and Owners by Media Sector for the 
Sherman/Ada DMA: 

Table 22: Numbers of Outlets and Owners by Media Sector for the Jackson 
DMA: 

Table 23: Numbers of Outlets and Owners by Media Sector for the 
Harrisonburg DMA: 

Table 24: Organizations and Individuals Interviewed: 

Abbreviations: 

DBS: direct broadcast satellite: 

DMA: Designated Market Area: 

FCC: Federal Communications Commission: 

MSA: metropolitan statistical area: 

MVPD: multichannel video program distributor: 

NTIA: National Telecommunications and Information Administration: 

PBS: Public Broadcasting Service: 

UHF: ultra-high frequency: 

United States Government Accountability Office: 

Washington, DC 20548: 

March 12, 2008: 

The Honorable Edward J. Markey: 
Chairman: 
Subcommittee on Telecommunications and the Internet: 
Committee on Energy and Commerce: 
House of Representatives: 

Dear Mr. Chairman: 

The media play an important role in educating and entertaining the 
public and fostering an informed citizenry. Since the nation's 
founding, newspapers have gathered and disseminated the news of the 
day, thereby helping citizens become informed voters. In the early 20th 
century, the emergence of radio and television expanded the options for 
educating and entertaining the public, and in the 21st century, the 
Internet delivers information and entertainment from a virtually 
limitless supply of sources. Whereas most citizens were formerly 
limited to a newspaper or newspapers in their local area, citizens 
today with an Internet connection can read publications from around the 
world. 

Given the vital role of the media in American life, the ownership of 
media outlets has been a long-standing concern of the Congress. The 
Federal Communications Commission (FCC) regulates many aspects of the 
media industry, including radio and television stations and cable and 
satellite service. In the Telecommunications Act of 1996 (1996 Act), 
the Congress required that FCC periodically review its broadcast 
ownership rules.[Footnote 1] In 2003, FCC released an order that 
altered its existing broadcast ownership rules. This order generated 
significant public debate, and more than 500,000 comments were filed 
with FCC. The U.S. Court of Appeals for the Third Circuit affirmed some 
of FCC's rule changes while remanding others for further justification 
or modification.[Footnote 2] In response to the court's decision and 
the congressional mandate for periodic review of its rules, FCC opened 
another proceeding to assess its broadcast ownership rules. This 
proceeding also attracted significant attention from both the public 
and the Congress, with concerns arising about the level of 
consolidation in the media industry. On February 4, 2008, FCC released 
a rule concluding its latest review of the broadcast ownership rules. 

While today's media environment provides the public with numerous 
programming choices from across the country, media outlets in local 
markets remain a concern for policymakers. With cable and satellite 
service, the public can receive programming from nationwide outlets, 
such as CNN and FOX News, and television stations in adjacent markets. 
However, media outlets located in a market are more likely to provide 
local news, public affairs, and political programming addressing the 
needs of residents in that market, such as coverage of local political 
campaigns, compared to nationwide and adjacent-market outlets. 
Reflecting the importance of local media outlets, localism is one of 
FCC's three policy goals for media ownership, along with competition 
and diversity. 

You asked us to examine the current status of media ownership. On 
December 14, 2007, we provided preliminary information on our review of 
media ownership.[Footnote 3] This report discusses (1) the number and 
ownership of various media outlets; (2) the level of minority-and women-
owned broadcast outlets; (3) the influence of economic, legal and 
regulatory, and technological factors on the number and ownership of 
media outlets; and (4) stakeholders' opinions on modifying certain 
media ownership laws and regulations. 

To respond to the objectives of this report, we interviewed officials 
from FCC, the National Telecommunications and Information 
Administration (NTIA) of the Department of Commerce, and trade 
associations. Additionally, we interviewed 102 industry officials and 
experts, selected based on industry sector (radio and television 
stations, broadcast networks, newspapers, cable, satellite, and 
Internet), geographic service territory, size of the media outlet, and 
professional publications (for experts). See appendix III for a 
complete list of individuals and organizations that we interviewed. To 
assess the number and ownership of media outlets, we conducted case 
studies in 16 Nielsen Designated Market Areas (DMA).[Footnote 4] To 
select the 16 case study markets, we used a stratified random sample 
methodology: we (1) randomly selected 4 case study markets from each of 
3 market strata (large, medium, and small),[Footnote 5] (2) selected 
the 3 largest markets as a separate stratum,[Footnote 6] and (3) 
judgmentally selected 1 market from the medium-size category to test 
our data collection and structured interview methodology.[Footnote 7] 
The 16 markets that we analyzed include approximately 20 percent of all 
television households in the United States. In each case study market, 
we identified the number of television and radio stations, newspapers 
(daily and weekly), and cable and satellite television operators 
present in the central city of the DMA. We also identified the number 
of owners of these outlets. We did not identify low-power stations or 
local Web pages. See appendix I for a more detailed discussion of our 
overall scope and methodology. 

We conducted this performance audit from February 2007 through March 
2008 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

Results in Brief: 

The numbers of media outlets and owners of media outlets generally 
increase with the size of the market, although operating agreements may 
reduce the effective number of independent outlets. Markets with large 
populations have more radio and television stations and newspapers than 
less populated markets. For example, in New York City, the nation's 
largest market, we identified 21 television stations and 73 radio 
stations. In contrast, we found 2 television stations and 16 radio 
stations in Harrisonburg, Virginia, the smallest market in our review. 
In more diverse markets, we also observed more radio and television 
stations and newspapers operating in languages other than English, 
which contributed to a greater number of outlets. Some companies 
participate in agreements to share content or agreements that allow one 
entity to produce programming or sell advertising through two outlets, 
among other agreements. In our review, these agreements were prevalent 
in a variety of markets but not in the top three markets, suggesting 
that market size may influence the benefits that firms achieve through 
such arrangements. To some degree, these agreements may suggest that 
the number of independently owned media outlets in a market might not 
always be a good indicator of how many independently produced local 
news or other programs are available in a market.[Footnote 8] For 
example, in Wilkes Barre/Scranton, Pennsylvania, we identified eight 
television stations and seven owners; however, because of various 
operating agreements, there are three loose commercial groupings in the 
market. While the numbers of outlets and owners vary with market size, 
the Internet is expanding access to media content and competition. For 
example, individuals can access content from a virtually limitless 
supply of sources. However, we observed few independent news Web sites 
in our case study markets, as most of the Web sites that we found were 
affiliated with one or more traditional media outlets. 

Ownership of broadcast outlets by minorities and women appears limited, 
but comprehensive data are lacking. FCC collects data on the gender, 
race, and ethnicity of radio and television station owners biennially 
through its Ownership Report for Commercial Broadcast Stations, or Form 
323. However, we found that these data suffer from three weaknesses: 
(1) exemptions from filing for certain types of broadcast stations, 
such as noncommercial stations; (2) inadequate data quality procedures; 
and (3) problems with data storage and retrieval. While reliable 
government data on ownership by minorities and women are lacking, 
available evidence from industry stakeholders and experts we 
interviewed, as well as government and nongovernment reports, suggest 
that ownership of broadcast outlets by these groups is limited. For 
example, reports by Free Press, a nongovernmental organization, found 
that women and minorities own about 5 percent and 3 percent of full- 
power television stations, respectively, and about 6 percent and 8 
percent of full-power radio stations, respectively.[Footnote 9] We 
identified three primary barriers contributing to the limited levels of 
ownership by minorities and women. These barriers include (1) the large 
scale of ownership in the media industry, (2) a lack of easy access to 
sufficient capital for financing the purchases of stations, and (3) the 
repeal of the tax certificate program--which allowed for the deferral 
of capital gains taxes on the sale of broadcast outlets and thereby 
provided financial incentives for incumbents to sell stations to 
minorities. Because more accurate, complete, and reliable data would 
allow FCC to better assess the impact of its rules and regulations and 
allow the Congress to make more informed legislative decisions, we are 
recommending that FCC take steps to improve the reliability and 
accessibility of its data on the gender, race, and ethnicity of 
broadcast outlet owners. 

A variety of economic, legal and regulatory, and technological factors 
influence media ownership. Two significant economic factors--the 
prevalence of high fixed costs and the size of the local market--appear 
to influence the number and ownership of media outlets. For example, 
high fixed costs produce incentives for companies to consolidate--to 
own multiple outlets--or develop operating agreements with other 
companies to distribute content across multiple outlets, thereby 
spreading the fixed costs across a greater number of outlets. 
Stakeholders with whom we spoke also cited a variety of legal and 
regulatory factors that influence the ownership of media outlets. These 
factors include the local television and radio station ownership 
limits, FCC's cross-media ownership prohibitions, and the 1996 Act. By 
limiting the number and types of outlets that a company can own, the 
laws and regulations affect ownership of media outlets. However, 
stakeholders held differing views on the level of influence individual 
policies may have on current ownership. Lastly, stakeholders reported 
that technological factors, such as the emergence of the Internet, have 
facilitated entry for new companies, thereby increasing the amount of 
content and competition. However, stakeholder opinions varied over the 
significance of new media entrants, such as individual Web pages and 
blogs. 

Stakeholders expressed varied opinions on modifications to media 
ownership rules, but business stakeholders were more likely to favor 
deregulation. Most business stakeholders expressing opinions on various 
media ownership rules were more likely to report that they should be 
relaxed or repealed. In contrast, nonbusiness stakeholders who 
expressed opinions on the rules were more likely to report that the 
rules should be left in place or strengthened. For example, 22 of 31 
business stakeholders favored repealing regulations that limit the 
number of local television and radio stations that a single company can 
own, while 14 of 19 nonbusiness stakeholders favored strengthening or 
leaving the rules in place. Similarly, 11 of 22 business stakeholders 
favored increasing or repealing the cap that limits ownership of 
television stations nationwide, while 11 of 15 nonbusiness stakeholders 
favored leaving the cap at its current level or lowering the cap, 
further restricting ownership of television stations. Alternatively, 
both business and nonbusiness stakeholders who expressed an opinion on 
a previously repealed tax certificate program supported either 
reinstating or expanding the program to encourage the sale of broadcast 
outlets to minorities. 

We provided a draft of this report to FCC for its review and comment. 
FCC provided technical comments that we incorporated where appropriate. 
FCC's written comments appear in appendix IV. 

Background: 

FCC regulates many aspects of television and radio station ownership. 
Laws and regulations limit the ownership of television stations, both 
nationwide and locally, and limit the ownership of radio stations 
locally. Since the 1970s, the number of media outlets has increased 
dramatically, with large increases in the number of television and 
radio stations; additionally, the number of broadcast networks has 
increased. More recently however, some segments of the media industry 
have undergone consolidation, with a few companies acquiring a 
significant number of outlets. 

Laws and Regulations: 

Through provisions in the Communications Act of 1934, as amended, FCC 
regulates various aspects of television, radio, cable, and satellite 
service. FCC has three policy goals for media ownership: competition, 
diversity, and localism; in the case of diversity, FCC identified 
viewpoint, outlet, program, source, and minority and female diversity. 
On December 18, 2007, FCC took action on a number of items impacting 
media ownership. FCC revised its ban on the ownership of a newspaper 
and broadcast station in the same market.[Footnote 10] FCC set a cap on 
the number of subscribers that a cable operator can serve nationwide 
and sought comments on vertical ownership limits and cable and 
broadcast attribution rules.[Footnote 11] FCC also adopted rules to 
help new entrants and small businesses, including minority-and women- 
owned businesses with access to financing, such as modifying the 
commission's construction permit deadlines, and adopted a notice of 
proposed rule making that, among other things, sought comment on how 
best to improve collection of data regarding the gender, race, and 
ethnicity of broadcast licenses.[Footnote 12] Finally, FCC adopted a 
report on broadcast localism and a notice of proposed rule 
making.[Footnote 13] 

Six restrictions on the ownership of television stations, radio 
stations, and broadcast networks follow: 

* National television ownership cap. A single entity can own any number 
of television stations nationwide as long as the stations collectively 
reach no more than 39 percent of national television 
households.[Footnote 14] For purposes of calculating the 39 percent 
limit, ultra-high frequency (UHF) television stations are attributed 
with 50 percent of the television households in their market, which FCC 
refers to as the UHF discount. 

* Local television ownership limit. A single entity can own two 
television stations in the same DMA if (1) the "Grade B" 
contours[Footnote 15] of the stations do not overlap or (2) at least 
one of the stations is not ranked among the top four stations in terms 
of audience share and at least eight independently owned and operating 

full-power commercial or noncommercial television stations would remain 
in the DMA. 

* Local radio ownership limit. A single entity can own up to 5 
commercial radio stations, not more than 3 of which are in the same 
service (that is, AM or FM), in a market with 14 or fewer radio 
stations, except that an entity can not own, operate, or control more 
than 50 percent of the stations in a market; up to 6 commercial radio 
stations, not more than 4 of which are in the same service, in a market 
with 15 to 29 radio stations; up to 7 commercial radio stations, not 
more than 4 of which are in the same service, in a market with 30 to 44 
radio stations; and up to 8 commercial radio stations, not more than 5 
of which are in the same service, in a market with 45 or more radio 
stations.[Footnote 16] 

* Newspaper-broadcast cross-ownership ban. Following the effective date 
of a new approach released by FCC on February 4, 2008, the commission 
will presume that a proposed newspaper-broadcast transaction is in the 
public interest if it meets the following test: (1) the market at issue 
is one of the 20 largest DMAs; (2) the transaction involves the 
combination of only 1 major daily newspaper and only 1 television or 
radio station; (3) if the transaction involves a television station, at 
least 8 independently owned and operating major media voices would 
remain in the DMA following the transaction;[Footnote 17] and (4) if 
the transaction involves a television station, that station is not 
among the top 4 ranked stations in the DMA. All other proposed 
newspaper-broadcast transactions would be presumed not in the public 
interest.[Footnote 18] This new approach will replace an absolute ban, 
which prohibits a single entity from having common ownership of a full- 
power television or radio station and a daily newspaper if the 
television station's "Grade A" contour[Footnote 19] or the radio 
station's principal community service area completely encompasses the 
newspaper's city of publication.[Footnote 20] 

* Television-radio cross-ownership limit. A single entity can own up to 
2 television stations (if permitted under the local television multiple 
ownership cap) and up to 6 radio stations (if permitted under the local 
radio multiple ownership cap) or 1 television station and 7 radio 
stations in a market with at least 20 independently owned media voices 
remaining post merger; up to 2 television stations and up to 4 radio 
stations in a market with at least 10 independently owned media voices 
remaining post merger; and 1 television station and 1 radio station 
regardless of the number of independently owned media voices.[Footnote 
21] 

* Dual network rule. A single entity can own multiple broadcast 
networks, but cannot own two or more of the top four networks (that is, 
ABC, CBS, FOX, and NBC). 

In its December 18, 2007, action, FCC adopted rules limiting the number 
of subscribers that a cable operator can serve nationwide. While FCC 
first set limits on the number of subscribers that a cable operator 
could serve in 1993 and later modified its rules in 1999, the Court of 
Appeals for the District of Columbia Circuit reversed and remanded 
those rules.[Footnote 22] FCC's new rules set the number of subscribers 
that a cable operator can serve at 30 percent nationwide. 

Trends in Media Outlets: 

Since the 1970s, the number of media outlets has increased 
dramatically, with large increases in the number of television and 
radio stations. In the case of television, the number of full-power 
television stations increased from 875 in 1970 to 1,754 in 2006; this 
increase occurred in both commercial and noncommercial educational 
television stations.[Footnote 23] Moreover, the number of broadcast 
networks that supply programming to stations across the country 
increased from three major networks (ABC, CBS, and NBC) to four major 
networks (ABC, CBS, FOX, and NBC) and several smaller networks, such as 
The CW Television Network, MY Network TV, and ION Television Network. 
In the case of radio, the number of full-power radio stations more than 
doubled, from 6,751 stations in 1970 to 13,793 stations in 2006, with 
increases in AM, FM, and FM educational stations.[Footnote 24] Daily 
newspapers illustrate a different trend--decreasing from 1,763 in 1970 
to 1,447 in 2006. While the number of morning newspapers increased from 
334 in 1970 to 833 in 2006, the number of evening newspapers decreased 
by more than half, from 1,429 to 614. Table 1 illustrates the trends in 
television and radio stations and newspapers. 

Table 1: Number of Full-Power Television and Radio Stations and Daily 
Newspapers: 

Media category: Television stations; 
Number of outlets by year: 1970: 875; 
Number of outlets by year: 1990: 1,465; 
Number of outlets by year: 2006: 1,754. 

Media category: Commercial; 
Number of outlets by year: 1970: 691; 
Number of outlets by year: 1990: 1,112; 
Number of outlets by year: 2006: 1,373. 

Media category: Noncommercial educational; 
Number of outlets by year: 1970: 184; 
Number of outlets by year: 1990: 353; 
Number of outlets by year: 2006: 381. 

Media category: Radio stations; 
Number of outlets by year: 1970: 6,751; 
Number of outlets by year: 1990: 10,770; 
Number of outlets by year: 2006: 13,793. 

Media category: AM; 
Number of outlets by year: 1970: 4,269; 
Number of outlets by year: 1990: 4,978; 
Number of outlets by year: 2006: 4,751. 

Media category: FM; 
Number of outlets by year: 1970: 2,083; 
Number of outlets by year: 1990: 4,357; 
Number of outlets by year: 2006: 6,252. 

Media category: FM educational; 
Number of outlets by year: 1970: 399; 
Number of outlets by year: 1990: 1,435; 
Number of outlets by year: 2006: 2,790. 

Media category: Daily newspapers; 
Number of outlets by year: 1970: 1,763; 
Number of outlets by year: 1990: 1,643; 
Number of outlets by year: 2006: 1,447. 

Media category: Morning; 
Number of outlets by year: 1970: 334; 
Number of outlets by year: 1990: 559; 
Number of outlets by year: 2006: 833. 

Media category: Evening; 
Number of outlets by year: 1970: 1,429; 
Number of outlets by year: 1990: 1,084; 
Number of outlets by year: 2006: 614. 

Source: GAO analysis of data from FCC and the Newspaper Association of 
America. 

[End of table] 

Since the 1970s, the number of households subscribing to a multichannel 
video program distributor (MVPD) has increased significantly, thereby 
increasing the programming options available to many households. The 
two most prominent MVPD platforms are cable and direct broadcast 
satellite (DBS) services. Since 1975, the number of households 
subscribing to cable service has increased from approximately 10 
million to nearly 66 million in 2006, and since 1995, the number of 
households subscribing to DBS service has increased from 2.2 million to 
over 29 million in 2006.[Footnote 25] Table 2 illustrates the number of 
cable and DBS subscribers. According to FCC's most recent report on 
cable industry prices, the average cable operator provided over 70 
channels of programming, thereby expanding the programming options 
available to subscribers of these services.[Footnote 26] These 
nonbroadcast networks include a variety of national outlets--such as 
CNN, Discovery Channel, ESPN, and FOX News-- as well as regional 
outlets--such as the California Channel, Comcast SportsNet Chicago, and 
New England Cable News. 

Table 2: Number of Cable and DBS Subscribers: 

Service: Subscribers by year (in millions): 1975: 9.8; 
Subscribers by year (in millions): 1985: 35.4; 
Subscribers by year (in millions): 1995: 61.6; 
Subscribers by year (in millions): 2006: 65.6. 

Service: DBS; 
Subscribers by year (in millions): 1975: 0.0; 
Subscribers by year (in millions): 1985: 0.0; 
Subscribers by year (in millions): 1995: 2.2; 
Subscribers by year (in millions): 2006: 29.1. 

Service: Total; 
Subscribers by year (in millions): 1975: 9.8; 
Subscribers by year (in millions): 1985: 35.4; 
Subscribers by year (in millions): 1995: 63.8; 
Subscribers by year (in millions): 2006: 94.7. 

Source: GAO analysis of data from FCC; the National Cable and 
Telecommunications Association; The DirecTV Group, Inc. 10-K; and 
EchoStar Communications Corporation 10-K. 

[End of table] 

Trends in Media Ownership: 

While the number of media outlets has increased, the ownership of 
outlets has evolved. In 1995, FCC eliminated the Financial Interest and 
Syndication Rules, which had limited the ability of broadcast networks 
to have ownership interest in programming broadcast on their 
network.[Footnote 27] Subsequently, the broadcast networks increasingly 
became affiliated with companies providing program production services. 
The Walt Disney Company acquired ABC, Viacom acquired CBS, and NBC 
joined forces with Universal Pictures. News Corporation--which launched 
the Fox Broadcasting Network in 1986--also owns several production 
studios, including 20th Century Fox. Each of the four major broadcast 
networks owns television stations that reach more than 20 percent of 
the nation's television households. Other significant owners of 
television stations include ION Media Networks, Tribune Company, and 
Broadcasting Media Partners, Inc.[Footnote 28] Following passage of the 
1996 Act, several companies acquired a large number of radio stations. 
Clear Channel owned over 1,000 radio stations throughout the United 
States, and Cumulus Broadcasting and Citadel Communications each owned 
over 200 stations. 

The cable industry also experienced evolution in the ownership of some 
properties. Cable operators, who distribute programming to subscribers, 
are pursuing a strategy of regional clustering; this strategy involves 
acquiring the cable systems throughout a geographic region. In its most 
recent report on video competition, FCC estimated that there were 118 
clusters with approximately 51.5 million subscribers.[Footnote 29] 
Comcast and Time Warner Cable have emerged as the largest cable 
operators, with 26.8 and 16.6 million subscribers, 
respectively.[Footnote 30] While cable operators provide many 
nonbroadcast networks to their subscribers, many nonbroadcast networks 
are owned by cable operators or broadcast networks. For example, among 
the nonbroadcast networks with the most subscribers, CNN and TNT are 
affiliated with Time Warner, ESPN is affiliated with Disney, USA 
Network is affiliated with NBC-Universal, and Discovery Channel is 
affiliated with Cox, a large cable operator. On December 18, 2007, FCC 
adopted a further notice that seeks comment on vertical ownership 
limits and cable and broadcast attribution rules, including for 
example, the extent to which vertical integration can lead to 
foreclosure of entry by unaffiliated programmers. 

In recent years, some companies have taken steps to sell assets. In 
2005, Viacom split into two separate companies: Viacom and CBS 
Corporation.[Footnote 31] The new Viacom includes many of the cable 
networks, such as MTV and Nickelodeon, and CBS Corporation includes the 
broadcast network and CBS television and radio stations. In 2006, The 
McClatchy Company acquired Knight Ridder, one of the nation's largest 
newspaper companies, and subsequently sold 12 former Knight Ridder 
newspapers. For example, The Philadelphia Inquirer and Philadelphia 
Daily News, former Knight Ridder newspapers, are currently owned by 
Philadelphia Media Holdings LLC, a private company. Also in 2006, Clear 
Channel announced plans to sell 448 radio stations, all in markets 
outside the top 100, and its entire television station group.[Footnote 
32] More recently, The New York Times Company sold its television 
stations and one of its radio stations. Alternatively, the two 
satellite radio companies--Sirius and XM--have proposed a merger that, 
if approved, would leave one company providing satellite radio service. 

Numbers of Media Outlets and Owners Generally Increase with Market 
Size, Although Operating Agreements May Reduce the Effective Number of 
Independent Outlets: 

Markets with large populations have more television, radio, and 
newspaper outlets than less populated markets. In more diverse markets, 
we also observed more radio and television stations and newspapers 
operating in languages other than English, which contributed to a 
greater number of outlets. Some companies participate in agreements to 
share content or agreements that allow one entity to produce 
programming or sell advertising through two outlets, among other 
arrangements. In our case study markets, these agreements were 
prevalent in a variety of markets, but not in the top three markets-- 
New York, Los Angeles, and Chicago. Finally, we found that the Internet 
expands access to media content; however, we observed few news Web 
sites in our case study markets that were unaffiliated with traditional 
media outlets. 

The Size of Markets Broadly Influences the Number of Media Outlets and 
Owners: 

Markets with large populations have more television, radio, and 
newspaper outlets than less populated media markets. Additionally, the 
presence of a large Hispanic population in the media market increases 
the number of outlets, as owners seek to provide Spanish-language 
outlets in addition to the full range of English-language outlets 
supported by the population level. 

Top Three Markets: 

The top three media markets--New York, New York (1); Los Angeles, 
California (2); and Chicago, Illinois (3)--have several attributes that 
set them apart from other markets. First, these markets have very large 
populations. Each of these markets has more than 3 million households. 
Second, these markets have very diverse populations.[Footnote 33] For 
example, New York is the largest African-American media market and the 
second-largest Asian and Hispanic media market, Los Angeles is the 
largest Asian and Hispanic media market and the sixth-largest African- 
American media market, and Chicago is the third-largest African- 
American media market and the fifth-largest Asian and Hispanic media 
market. Third, these markets generally have high average household 
disposable income;[Footnote 34] the New York market ranks fourth 
highest in the United States, the Los Angeles market ranks twenty- 
fourth, and the Chicago market ranks seventh. Finally, these markets 
also are the production and distribution points for much of the media 
content in the United States--from films, television shows, and radio 
programs to magazines and periodicals. 

The top three media markets differ qualitatively from other markets in 
the large and varied number of media outlets present in these markets. 
The combination of large populations and relatively high disposable 
income helps produce substantial advertising revenues for the media 
outlets in these markets. These markets have more television and radio 
stations and more newspapers than other media markets, and competition 
for cable service from overbuilders also is more likely in these 
markets.[Footnote 35] Since these markets have diverse populations, 
each market has numerous broadcast outlets that provide content in 
languages other than English. While Spanish is the most common language 
for non-English media, outlets for content in Chinese, Korean, and 
other languages are also present.[Footnote 36] Table 3 indicates how 
many outlets are located in the top three markets. 

Table 3: Number of Outlets in the Top Three Markets--New York, Los 
Angeles, and Chicago: 

Industry segment: Television stations; 
Number of outlets: New York: 21; 
Number of outlets: Los Angeles: 24; 
Number of outlets: Chicago: 16. 

Industry segment: Radio stations; 
Number of outlets: New York: 73; 
Number of outlets: Los Angeles: 69; 
Number of outlets: Chicago: 65. 

Industry segment: Daily newspapers; 
Number of outlets: New York: 5; 
Number of outlets: Los Angeles: 2; 
Number of outlets: Chicago: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[End of table] 

FCC's rules allow greater group ownership of media outlets in these 
three markets because of their size. There are four television 
duopolies--common ownership of two television stations--in New York, 
three duopolies in Los Angeles, and three duopolies in Chicago. In 
addition, several companies own multiple radio stations in these 
markets; FCC's rules allow for common ownership of eight radio 
stations, no more than five of which can be in the same service (AM or 
FM) in these markets. There are some jointly owned newspaper and 
television stations and newspaper and radio stations in each of these 
markets.[Footnote 37] Even with the allowance for group ownership, 
these three markets still possess a great number of owners who each 
operate a single broadcast outlet in either radio or television in the 
respective market. Appendix II provides a more detailed description of 
the media ownership for all 16 case study markets. 

Large Markets: 

Of the four large markets we studied--Miami/Fort Lauderdale, Florida 
(16); Charlotte, North Carolina (26); Nashville, Tennessee (30); and 
Wilkes Barre/Scranton, Pennsylvania (53)--the Miami/Fort Lauderdale 
market has the most television stations and in this respect more 
closely resembles the top three media markets than the other large 
media markets.[Footnote 38] This is due to the large number of Spanish- 
language outlets present; the Miami/Fort Lauderdale area is the third- 
largest Hispanic media market in the United States. In addition to 
television stations, the Miami/Fort Lauderdale market has three daily 
newspapers, two of which are in Spanish. The other three media markets 
in this size category have fewer television stations. Only the Miami/ 
Fort Lauderdale market had competition for cable service, which also is 
present in the top three markets.[Footnote 39] The number of outlets 
decreased markedly between the three larger markets in this category 
and Wilkes Barre/Scranton (the 53rd-largest market). We could not 
determine if this was due to a change in the number of outlets that can 
be supported between the 30th-largest market (Nashville) and the 53rd- 
largest market, the lack of a core urban area in Wilkes Barre/Scranton, 
or the relatively weak economy prevalent in Wilkes Barre/Scranton. See 
table 4 for the number of outlets in the large case study markets. 

Table 4: Number of Outlets in the Largest City of the Large Markets-- 
Miami/Fort Lauderdale, Charlotte, Nashville, and Wilkes Barre/ 
Scranton: 

Industry segment: Television stations; 
Number of outlets: Miami: 16; 
Number of outlets: Charlotte: 12; 
Number of outlets: Nashville: 12; 
Number of outlets: Scranton: 8. 

Industry segment: Radio stations; 
Number of outlets: Miami: 47; 
Number of outlets: Charlotte: 37; 
Number of outlets: Nashville: 52; 
Number of outlets: Scranton: 24. 

Industry segment: Daily newspapers; 
Number of outlets: Miami: 3; 
Number of outlets: Charlotte: 1; 
Number of outlets: Nashville: 2; 
Number of outlets: Scranton: 1. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[End of table] 

Medium-Size Markets: 

The medium-size markets we analyzed are Tucson, Arizona (68); 
Springfield, Missouri (76); Chattanooga, Tennessee (86); Cedar Rapids/ 
Waterloo/Iowa City/Dubuque, Iowa (89); and Myrtle Beach/Florence, South 
Carolina (105).[Footnote 40] Similar to the Miami/Fort Lauderdale 
market, the Tucson market has more television stations than the other 
case study markets in its size category, mainly because of the 
relatively large Hispanic population in this medium-size market. There 
are eight English-language television stations in Tucson, which is 
similar to the number in the other four medium-size markets. However, 
Tucson has a relatively large Hispanic population and therefore 
possesses a larger number of media outlets due to the presence of 
Spanish-language television and radio stations. Television markets 
which lack a dominant urban area and contain two or more large towns 
located some distance apart are often split into smaller radio 
markets.[Footnote 41] The Cedar Rapids/Waterloo/Iowa City/Dubuque DMA 
contains three Arbitron radio markets and the Myrtle Beach/Florence DMA 
is split into two separate Arbitron radio markets. See table 5 for the 
number of outlets in the medium-size case-study markets. 

Table 5: Number of Outlets in the Largest City of the Medium-Size 
Markets--Tucson, Springfield, Chattanooga, Cedar Rapids/Waterloo/Iowa 
City/Dubuque, and Myrtle Beach/Florence: 

Industry segment: Television stations; 
Number of outlets: Tucson: 11; 
Number of outlets: Springfield: 6; 
Number of outlets: Chattanooga: 8; 
Number of outlets: Cedar Rapids: 9; 
Number of outlets: Florence: 6. 

Industry segment: Radio stations; 
Number of outlets: Tucson: 38; 
Number of outlets: Springfield: 26; 
Number of outlets: Chattanooga: 32; 
Number of outlets: Cedar Rapids: 25; 
Number of outlets: Florence: 13. 

Industry segment: Daily newspapers; 
Number of outlets: Tucson: 2; 
Number of outlets: Springfield: 2; 
Number of outlets: Chattanooga: 1; 
Number of outlets: Cedar Rapids: 1; 
Number of outlets: Florence: 1. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[End of table] 

Small Markets: 

The small markets we analyzed are Terre Haute, Indiana (151); Sherman, 
Texas/Ada, Oklahoma (161); Jackson, Tennessee (174); and Harrisonburg, 
Virginia (181).[Footnote 42] These small markets are characterized by 
significantly fewer media outlets--television stations, radio stations, 
and newspapers--than the larger markets. Table 6 illustrates the number 
of outlets in the small case study markets. Hence, for these markets, 
the conversion to digital broadcasting offers the possibility to 
improve the free, over-the-air choices to residents. Already, 
commercial television stations in Sherman/Ada and Harrisonburg use a 
second digital channel to provide the signal from a broadcast network 
that is not otherwise present in the market. For example, WHSV in 
Harrisonburg, an ABC affiliate, broadcasts the FOX network on one of 
the station's digital channels. 

Table 6: Number of Outlets in the Small Markets--Terre Haute, Sherman/ 
Ada, Jackson, and Harrisonburg: 

Table 6: Number of Outlets in the Small Markets--Terre Haute, 
Sherman/Ada, Jackson, and Harrisonburg: 

Industry segment: Television stations; 
Number of outlets: Terre Haute: 5; 
Number of outlets: Sherman/Ada: 2; 
Number of outlets: Jackson: 3; 
Number of outlets: Harrisonburg: 2. 

Industry segment: Radio stations; 
Number of outlets: Terre Haute: 18; 
Number of outlets: Sherman/Ada: 23; 
Number of outlets: Jackson: 21; 
Number of outlets: Harrisonburg: 16. 

Industry segment: Daily newspapers; 
Number of outlets: Terre Haute: 1; 
Number of outlets: Sherman/Ada: 1; 
Number of outlets: Jackson: 1; 
Number of outlets: Harrisonburg: 1. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[End of table] 

Some Media Companies Participate in Operating Agreements: 

Some media companies participate in operating agreements that involve a 
partnership between two or more outlets. For example, some media 
companies participate in agreements to share content among several 
outlets. Other media companies participate in agreements wherein one 
company produces content or sells advertising through its own outlets 
and another company's outlets. These operating agreements are referred 
to, either by industry participants or FCC's rules, by a variety of 
names, including joint sales agreements, local marketing agreements, 
and time brokerage agreements.[Footnote 43] FCC's attribution rules-- 
which seek to identify those interests in or relationships to licensees 
that have a realistic potential to affect the programming decisions of 
licensees or other core operating functions--apply to several types of 
operating agreements.[Footnote 44] Additionally, the Newspaper 
Preservation Act of 1970 allows two competing newspapers in one 
community to merge some operations to help ensure the survival of both 
newspapers; the resulting arrangements are referred to as joint 
operating agreements.[Footnote 45] 

In our 16 case study markets, we found several instances of media 
companies participating in operating agreements. We found these 
agreements in a variety of markets but not in the top three markets, 
suggesting that market size may influence the benefits that companies 
realize through such agreements. We found television stations 
participating in operating agreements in five markets--Nashville, 
Wilkes Barre/Scranton, Springfield, Myrtle Beach/Florence, and Terre 
Haute. In Springfield, there were two operating agreements between 
television stations and in Wilkes Barre/Scranton there were three 
operating agreements between television stations. We also found 
operating agreements between radio stations in Harrisonburg and 
Nashville. Finally, in Tucson, the two competing daily newspapers 
participate in a joint operating agreement. 

In addition to formal operating agreements, media companies in a market 
often maintain informal content-sharing arrangements with each other. 
These most often cross different types of media, rather than occurring 
among competitors within the same industry segment. In our case study 
markets, we found a newspaper sharing articles with a television 
station; a newspaper sharing articles with a radio station in return 
for advertising spots; and a newspaper sharing journalists with a 
television station. In markets with common ownership of a radio or 
television station and a newspaper, such sharing of content and 
journalism resources occurred as a matter of course. We also found some 
contractual sharing of content between media outlets of the same type. 
Most often, one television station produced local news programs for 
other stations in the same market. 

To some extent, these operating agreements may reduce the number of 
independent outlets. For example, in Wilkes Barre/Scranton, we 
identified eight television stations. However, one owner of two 
stations participated in an agreement with a third station. 
Additionally, the remaining four television stations participated in 
two separate agreements--each agreement covering two stations. Thus, 
while there are eight television stations and seven owners in Wilkes 
Barre/Scranton, there are three loose commercial groupings in the 
market. Similarly, in Springfield, while there are six television 
stations, four stations participate in two separate agreements. This 
example suggests that the number of independently owned outlets in a 
given market might not always be a good indicator of how many 
independently produced local news or other programs are available in a 
market. 

The Internet Is Expanding Access to Media Content: 

The Internet delivers content from a virtually limitless supply of 
sources. For example, while residents of New York can read The New York 
Times, residents in Harrisonburg with access to the Internet also can 
read this publication. Most of the traditional media outlets-- 
newspapers, radio stations, and television stations--in our case study 
markets maintain a Web site. This provides another means for residents 
to access the content of these outlets. However, we identified few news 
Web sites in our case study markets that were unaffiliated with the 
traditional media outlets. While there are many blogs and Web sites, 
when we spoke with stakeholders about assessing the number of "voices" 
in a media market, there was no consensus on how to count Internet 
outlets. Some stakeholders said that audience size was less important 
than the existence of many potential voices, while other stakeholders 
said that voices on the Internet mattered only when they reached an 
audience above a certain minimum size. Further, some stakeholders said 
that journalistic content was important, such as that arising from news 
gathering and investigations. 

Ownership of Broadcast Outlets by Minorities and Women Appears Limited, 
but Comprehensive Data Are Lacking: 

While FCC collects data on the gender, race, and ethnicity of radio and 
television station owners every 2 years through its Ownership Report 
for Commercial Broadcast Stations, or Form 323, we found that these 
data have several weaknesses that undermine their usefulness for 
tracking and periodically reporting on the status of minority and women 
ownership. These weaknesses include (1) exemptions from filing for 
certain types of broadcast stations, such as noncommercial stations; 
(2) inadequate data quality procedures; and (3) problematic data 
storage and retrieval. Moreover, there are no other reliable government 
sources on the status of minority and women ownership. Nevertheless, 
the available evidence from industry stakeholders and experts we 
interviewed, as well as government and nongovernment reports, suggests 
that ownership of broadcast outlets by these groups is limited. We 
identified three primary barriers contributing to the limited levels of 
ownership by minorities and women. These barriers include (1) the large 
scale of ownership in the media industry, (2) a lack of easy access to 
sufficient capital for financing the purchases of stations, and (3) the 
repeal of the tax certificate program, which provided financial 
incentives for incumbents to sell stations to minorities. 

FCC Lacks Comprehensive Data on Ownership of Broadcast Outlets by 
Minorities and Women: 

Diversity has been a long-standing policy goal of FCC, including 
ownership by minorities and women. In 1998, FCC issued rules to collect 
data on the gender, race, and ethnicity of broadcast licensees. FCC 
decided to collect these data through its Annual Ownership Report, or 
Form 323. FCC noted that it was appropriate to develop "precise 
information on minority and female ownership of mass media facilities" 
and "annual information on the state and progress of minority and 
female ownership," thereby positioning "both Congress and the 
Commission to assess the need for, and success of, programs to foster 
opportunities for minorities and females to own broadcast 
facilities."[Footnote 46] FCC began collecting these data in 1999. 

The Form 323 is the only mechanism through which FCC collects 
information on the gender, race, and ethnicity of broadcast owners. FCC 
requires all commercial AM and FM radio stations and television 
stations to report the gender, race, and ethnicity of each owner with 
an attributable interest[Footnote 47] on the Form 323. Owners and 
licensees must file the Form 323 every 2 years, whenever there is a 
transfer of control or assignment, or after the grant of a construction 
permit for a new commercial broadcast station. 

As FCC's only information source on owners' gender, race, and 
ethnicity, the Form 323 data potentially could be used to determine and 
periodically report on the level of minority and women broadcast 
ownership. However, we identified several weaknesses that limit the 
usefulness of the Form 323 data.[Footnote 48] 

* Filing exemptions. Sole proprietors, partnerships, and noncommercial 
stations are not required to file the Form 323.[Footnote 49] Since the 
data from Form 323 do not include stations owned by sole proprietors, 
partnerships, or noncommercial stations, it is not possible to use the 
Form 323 data to identify either the full universe of broadcast 
stations owned by minorities and women or the number of minority and 
women owners. FCC also does not require the filing of the Form 323 for 
low-power stations. 

* Data quality procedures. According to FCC officials, FCC does not 
verify or periodically review the gender, race, and ethnicity data 
submitted on the Form 323. According to these officials, a staff person 
from FCC's Video Division reviews submitted Form 323s and this staff 
person focuses on ensuring compliance with the commission's multiple 
ownership and citizen ownership rules. These officials told us that 
station owners were responsible for determining the accuracy of their 
Form 323 submissions. Should an error be found by the owner, FCC 
requires the owner to submit an additional Form 323. 

* Data storage and retrieval. Companies must file the Form 323 
electronically. However, FCC allows owners to provide attachments with 
their electronic filing of the Form 323. These attachments may include 
the gender, race, and ethnicity data. Since these data are not entered 
into the database, the data are unavailable for electronic query. Of 
further concern, the database retains all submitted Form 323s, even 
forms that contain incorrect information and have since been updated 
with a corrected Form 323. Thus, any aggregation or summary of the Form 
323 records through electronic query is unreliable according to FCC 
officials. 

FCC has taken some steps to address concerns with the Form 323 data, 
but overall some weaknesses remain. According to FCC officials, FCC 
added an amendment process to the Form 323 interface, thereby allowing 
owners to modify information on a previously submitted Form 323. FCC 
also put in place edit checks that preclude owners from skipping 
questions, including questions on the owners' gender, race, and 
ethnicity. However, FCC still allows attachments for Form 323s to be 
submitted and has no regular review mechanism for these attachments to 
determine if the owners provided correct information biennially as 
required. Moreover, there are no consequences for misfiling that would 
encourage accurate, complete, and timely submission of the Form 323. On 
December 18, 2007, FCC adopted a Notice of Proposed Rulemaking that 
seeks comment on how the commission can best improve its collection of 
data regarding the gender, race, and ethnicity of broadcast 
licensees.[Footnote 50] 

Ownership of Broadcast Outlets by Minorities and Women Appears Limited: 

While reliable government data on ownership by minorities and women are 
lacking, ownership of broadcast outlets by these groups appears 
limited. According to the industry stakeholders and experts we 
interviewed, the level of ownership by minorities and women is limited. 
Recent studies generally support this conclusion. Three reports 
commissioned by FCC as part of its broadcast ownership proceeding found 
relatively limited levels of ownership of television and radio stations 
by minorities and women. Further, in a 2006 report, Free Press found 
that for full-power television stations, women and minority ownership 
was about 5 percent and 3 percent, respectively.[Footnote 51] 
Specifically, the report noted that women owned a majority stake in 67 
of 1,349 full-power commercial television stations and minorities owned 
44 stations, 9 of which were owned by one company. In another report, 
Free Press estimated that women owned approximately 629 of 10,506 (or 6 
percent) of full-power radio stations and minorities owned 812 stations 
(or 8 percent) of full-power radio stations.[Footnote 52] 

Minorities and Women Encounter a Variety of Barriers to Ownership of 
Broadcast Outlets: 

According to prior government reports and industry stakeholders and 
experts we interviewed, three factors help explain the relatively small 
percentages of minority and women broadcast owners. 

Scale of ownership. In 2000, FCC and the National Telecommunications 
and Information Administration (NTIA) released separate reports 
suggesting that the current scale of ownership had been detrimental for 
minority and women ownership of broadcast outlets. In 2000, FCC 
commissioned a report that found industry deregulation in 1996 and the 
resulting consolidation had produced significant barriers to new entry 
and to the viability of small, minority-and women-owned 
companies.[Footnote 53] The report cited inflated station prices and 
disparate advertising revenues. NTIA's report included similar 
observations about the impact of consolidation on station prices and 
advertising revenue.[Footnote 54] 

Industry representatives and experts we interviewed also identified the 
scale of ownership as a barrier for minorities and women. Thirty-six of 
56 interviewees who mentioned barriers to ownership reported that the 
consolidation of broadcast ownership had been detrimental for minority 
and women ownership. According to these industry representatives and 
experts, the scale of current ownership mattered in several important 
ways. First, few stations are made available for purchase, limiting 
opportunities for the entry of new owners, such as minorities and 
women. Second, incumbent owners may prefer to trade stations with other 
incumbent owners rather than sell stations. Given the limited ownership 
by minorities and women today, trading does little to expand their 
ownership. Third, when stations become available for sale, investors 
and other financing entities prefer multiple station purchases rather 
than single station purchases in order to capture economies of scale. 
Like trading, such transactions favor incumbent companies that are well-
established over new entrants such as minorities and women. Lastly, the 
scale of the industry affects the viability of current and prospective 
minority and women owners, since these owners must often compete with 
large conglomerate owners with sizable market share and greater 
resources. 

Access to capital. Both FCC's and NTIA's reports on minority and women 
ownership also included discussion and findings on the role of capital 
and the lack thereof for minorities and women. According to FCC's 
commissioned report, access to capital was the barrier most often cited 
by study participants. The report found that banks often repeatedly 
rejected minority broadcast owners as applicants for a variety of 
reasons, ranging from racial discrimination to a lack of familiarity 
with the industry on the part of the bank. Similarly, NTIA's report 
noted the importance of access to capital and described public and 
private sources of financing for minorities and women. The report 
concluded that despite these sources, access to capital continued to be 
a key concern. 

Industry stakeholders and experts we interviewed also mentioned the 
importance of access to capital and financing and the challenge it 
presents to minority and women ownership. Thirty-five of 56 
interviewees reported that a lack of access to capital impeded greater 
entry by minorities and women into the broadcast industry. In 
particular, these industry representatives and experts described two 
ways in which the barrier posed by a lack capital is compounded by the 
nature of station sales and FCC rules. First, since stations generally 
do not advertise their properties for sale, individuals and companies 
looking to purchase a station must have cash on hand. Prospective 
buyers cannot wait for an announced sale and then acquire financing. 
This is a challenge for minority and women broadcasters, who often lack 
information on upcoming station sales and generally have fewer 
financial resources. Second, sellers are deterred from working with 
buyers who lack capital since any equity remaining in the station would 
be considered attributable interest under FCC's rules. Retaining 
attributable interest in one property could make it difficult for these 
owners to buy different properties in the same market, due to FCC's 
local ownership limits. Consequently, sellers would forgo working with 
prospective buyers who lack readily available capital rather than 
assume any risk to potential future acquisitions. 

Repeal of the tax certificate program. From 1978 to 1995, FCC operated 
a tax certificate program under section 1071 of the Internal Revenue 
Code that provided for the seller of a broadcast station to defer 
capital gains taxes on the sale if the station was sold to a minority- 
owned company. In 1995, the Congress repealed this program. During this 
period, FCC issued a total of 328 tax certificates for use in broadcast 
station transactions (285 for radio station sales and 43 for television 
station sales). Both FCC's and NTIA's reports on minority and women 
ownership cited the importance of the tax certificate as an incentive 
for incumbent broadcast owners to advertise and work with prospective 
minority buyers. FCC's commissioned report described the tax 
certificate program as the "single most effective program in lowering 
market entry barriers and providing opportunities for minorities to 
acquire broadcast licenses in the secondary market."[Footnote 55] 
NTIA's report also found that the program fostered minority ownership. 
Many experts we interviewed also agreed that this program was important 
for promoting minority ownership. Twenty-five of 56 stakeholders we 
interviewed said that the elimination of the tax certificate program 
was a factor in the current limited level of minority-owned broadcast 
stations. 

A Variety of Economic, Legal and Regulatory, and Technical Factors 
Influence Media Ownership: 

Economic factors--including high fixed costs and the size of the 
market--influence the number of media outlets available in markets, the 
presence of operating agreements between outlets, and incentives for 
firms to consolidate their operations. Legal and regulatory factors 
appear to influence ownership of media outlets as well, by constraining 
the number and types of media outlets that a single entity can own. 
Lastly, technological factors, such as the emergence of the Internet, 
appear to facilitate entry by allowing entry with limited investment; 
however stakeholders' opinions varied on the significance of these 
entrants on media markets. 

High Fixed Costs and Local Market Size Are Important Economic Factors 
that Influence the Number and Ownership of Media Outlets: 

We found that fixed costs are prevalent in the media industry and are 
an important economic factor influencing the number and ownership of 
media outlets. Fixed costs refer to those costs that do not change with 
the number of units produced or sold. Fifty-two of 102 stakeholders we 
interviewed mentioned that high fixed costs are a factor influencing 
media ownership, and the academic literature also highlighted the 
importance of fixed costs. For example, in broadcast network 
television, two stakeholders reported that the fixed costs of producing 
1 hour of programming range from $3 million to $5 million--regardless 
of how many viewers the programming attracts. Similarly for newspapers, 
the costs of purchasing a printing press and producing and editing news 
stories are not very sensitive to the number of copies a newspaper 
produces or sells. Stakeholders also reported high fixed costs for 
radio and television stations, cable television, and DBS. 

The size of the local market also is an important economic factor 
influencing the number and ownership of media outlets, since market 
size broadly determines an outlet's potential for generating 
advertising revenues. For example, several stakeholders reported that 
although the costs of operating television and radio stations are 
similar regardless of market size, smaller markets have smaller 
audiences and fewer local advertisers for station operators to pursue. 
Accordingly, stakeholders reported that owners are less likely to sell 
stations in large markets than in smaller markets. According to data 
from Bear, Stearns and Company, Inc., 4 of the 137 television station 
transactions announced in the first two quarters of 2007 involved 
stations broadcasting in the top three markets. Conversely, 
stakeholders representing a large radio group owner and a national 
television broadcaster both reported that their companies are currently 
selling stations in smaller markets. 

Both high fixed costs and market size have implications for the number 
of outlets in a given market, the presence of operating agreements 
between outlets, and incentives for firms to consolidate their 
operations in local and national markets. 

* Number of outlets. Market size and fixed costs influence the number 
of outlets in a market. The size of the market broadly determines the 
advertising revenues available to outlets in the market. In addition, 
costs in the media industry do not vary considerably between large and 
small markets. Therefore, large markets can generally support more 
outlets than small markets. Twenty-six interviewed stakeholders 
mentioned that the size of the market influences the number of outlets 
available, and 10 stakeholders reported that markets with larger 
populations and advertising revenues can support more media outlets and 
owners than smaller markets. For example, in New York--the largest 
market--we identified 21 television stations and 15 separate owners for 
those stations. In contrast, in Harrisonburg, Virginia--the smallest 
market in our review--we identified only 2 broadcast television 
stations and 2 separate owners, one of which was a public television 
station. Similarly, in the newspaper industry, several stakeholders 
reported that most newspaper markets can support only one daily 
newspaper because of high fixed costs in the industry. Accordingly, 9 
of the 16 markets we evaluated had one daily newspaper, and 4 markets 
supported two newspapers.[Footnote 56] 

* Operating agreements. The size of a local market and high fixed costs 
produce incentives for media outlets to enter into operating agreements 
with other local outlets. Specifically, we found that outlet owners in 
markets with smaller advertising revenues have incentives to enter into 
operating agreements with other outlets to spread fixed costs across 
multiple outlets to maximize their profitability. Thirty interviewed 
stakeholders reported that the size of the market can influence the 
need for such operating agreements. In our case study analyses, we 
identified 9 operating agreements between 17 television stations in 5 
markets. [Footnote 57] We found these arrangements in a variety of 
markets, but not in the top three markets. It appears that medium-size 
markets are better suited to these arrangements than small markets 
because they offer a larger pool of potential outlet partners than 
would be available in smaller markets. Furthermore, two stakeholders 
reported that these agreements may increase the number of outlets 
available in a market by helping weaker stations remain in operation 
and by bringing new broadcasting networks into a market. 

* Local and national consolidation. The combination of high fixed costs 
and market size also encourages media consolidation both within local 
markets and nationwide. Because competition for advertising revenues 
among radio and television broadcast stations occurs at the local 
level, nine stakeholders representing television, radio, and newspaper 
companies reported that their industries have incentives to consolidate 
operations across multiple outlets to reduce their fixed costs and 
claim a larger share of available advertising revenues. For example, 
six stakeholders reported that owning multiple stations in a local 
market allows a single owner to program its stations with diverse 
formats to reach a larger share of local listeners and provide multiple 
channels for advertisers. Media firms likewise have incentives to seek 
economies of scale and consolidate their operations nationally. For 
example, stakeholders reported that the cable industry has consolidated 
in recent years to cluster local systems into wider regional networks 
to reach larger audiences and serve a wider range of advertisers. 
Stakeholders also reported that serving a wider network of subscribers 
gives cable operators greater leverage in negotiating agreements to 
carry programming produced by broadcast and cable television networks. 
In the newspaper industry, one national newspaper company reported that 
it publishes almost 1,000 nondaily newspapers across the country, which 
enables the company to offer flexible advertising packages to national 
and local advertisers. 

Stakeholder Perspectives Vary on the Influence of Legal and Regulatory 
Factors on Media Ownership: 

In addition to economic factors, several legal and regulatory policies 
appear to have influenced media ownership, including local television 
and radio station ownership limits, the newspaper-broadcast cross 
ownership ban, and the 1996 Act. However, stakeholder perspectives 
varied on the extent to which the individual policies may have 
influenced current ownership. 

* Local television and radio station ownership limits. FCC's rules 
limit the number of radio stations, television stations, and 
combinations of radio and television stations that a single entity can 
own; as such, the rules influence the ownership of these media outlets. 
Twenty-three of 29 industry stakeholders we spoke with cited either the 
local radio or television limits as a factor influencing the ownership 
of media outlets. Several stakeholders reported that the local 
television ownership limit--which permits ownership of two television 
stations in larger markets--allows over-the-air television stations to 
better compete with other media outlets, including cable television and 
DBS providers, which have significantly more channels and air time to 
sell advertising. Several other stakeholders reported that this rule 
would be more beneficial if it were permitted in smaller markets to 
preserve struggling outlets, rather than in large markets where 
advertising revenues are greater. With regard to radio, several 
industry stakeholders reported that the local ownership caps limit 
consolidation in markets where companies were operating at the 
ownership limits. 

* Newspaper-broadcast cross ownership ban. By limiting the markets 
where a single entity can have common ownership of a daily newspaper 
and a broadcast outlet, FCC's rules affect the ownership of these media 
outlets. Stakeholders from three companies with newspaper holdings 
reported that the potential synergies and economic benefits to cross- 
ownership are overstated; two stakeholders reported that differences 
between television and newspaper cultures and products limit 
collaboration between the two platforms. On the other hand, three 
companies owning both newspapers and television stations in the same 
market reported that cross-ownership offers synergies such as improved 
sharing of resources and information between outlets. Similarly, 
stakeholders from two companies indicated that cross-ownership has 
helped their outlets produce more in-depth, local news than they would 
otherwise be able to provide. 

* Telecommunications Act of 1996. The 1996 Act loosened restrictions on 
the ownership of radio stations--allowing greater ownership of local 
radio stations and eliminating nationwide limits on ownership of radio 
stations. Twenty of 45 nonbusiness stakeholders, such as academics, 
industry associations, and think tanks, identified the 1996 Act as a 
factor influencing media ownership; 9 of 57 business stakeholders 
similarly identified the 1996 Act. Three stakeholders reported that the 
changes in the 1996 Act brought capital, business expertise, and 
content diversity to the radio industry, as new entrants sought to 
invest in underfunded radio stations. Alternatively, several other 
stakeholders reported that the 1996 Act resulted in overconsolidation 
in the radio industry, as many small operators were bought out by 
conglomerate owners. 

Technological Factors Appear to Facilitate New Entry: 

New technologies appear to facilitate entry, thereby promoting new 
content and competition. In particular, the Internet provides new 
opportunities for individual citizens and companies to produce their 
own Internet publications with little investment. For example, 
individuals and companies no longer need to acquire a broadcast license 
and invest in broadcast facilities to distribute content to a wide 
audience. Forty-four stakeholders told us that the Internet creates an 
abundance of outlets, while only 17 disagreed. The Pew Internet & 
American Life Project, an Internet-focused research center, found that 
in 2003, "more than 53 million American adults had used the Internet to 
publish their thoughts, respond to others, post pictures, share files 
and otherwise contribute to the explosion of content available online." 
Additionally, 67 of 102 stakeholders mentioned competition from new 
entrants from the Internet or new telecommunications services as a 
factor influencing media ownership. For example, six newspaper industry 
stakeholders reported that industry revenues have suffered from the 
availability of low-cost or free classified advertising services 
available on the Internet. 

While many stakeholders reported that the Internet creates an abundance 
of outlets, opinions varied as to the significance of these outlets. 
For example, several stakeholders cited increases in the number of 
outlets available on the Internet, such as blogs, but said there is 
little evidence that these outlets are widely read or are journalistic 
substitutes for newspapers. Similarly, several other stakeholders 
estimated that a significant portion of the content available on these 
Web sites originates from large, established media firms such as 
newspapers. 

Stakeholders' Opinions Varied on Modifications to Media Ownership 
Rules, but Business Stakeholders Were More Likely to Favor 
Deregulation: 

The stakeholders we interviewed seldom agreed on proposed modifications 
to media ownership rules. However, most business stakeholders 
expressing opinions on these rules were more likely to report that they 
should be relaxed or repealed. In contrast, nonbusiness stakeholders 
who expressed opinions on the rules were more likely to report that the 
rules should be left in place or strengthened. Both business and 
nonbusiness stakeholders who expressed an opinion on the previously 
repealed tax certificate program supported either reinstating or 
expanding the program to encourage the sale of broadcast outlets to 
minorities. 

* Newspaper-broadcast cross-ownership ban. As mentioned earlier, on 
December 18, 2007, FCC modified its rules to permit common ownership of 
a daily newspaper and broadcast outlet in some markets. Prior to FCC's 
action, the stakeholders we spoke with were fairly evenly divided on 
whether FCC should modify its rule prohibiting cross-ownership of 
newspapers and broadcast outlets in the same local area. Of the 50 
stakeholders expressing an opinion on the matter, 27 reported that the 
rule should be repealed and 23 said that the rule should either be left 
as is or strengthened. However, among business and nonbusiness 
stakeholders interviewed, there were clear differences in opinion on 
this issue. Fourteen of 20 nonbusiness stakeholders were in favor of 
strengthening or leaving the rule in place. In contrast, 21 of 30 
business stakeholders were in favor of repealing the regulation. For 
example, 13 of 14 stakeholders from multisector media companies stated 
the rule should be repealed. 

* Local television and radio ownership limits. Stakeholders were fairly 
evenly divided on whether FCC should alter rules limiting the number of 
broadcast television and radio stations a single entity can own in a 
local market. Of the 50 stakeholders expressing an opinion on the 
matter, 27 said that the rules should be repealed and 23 said that the 
rule should either be left as is or strengthened. However, opinions 
within stakeholder segments were more consistent. Fourteen of 19 
nonbusiness stakeholders were in favor of strengthening or leaving the 
rules in place, while 22 of 31 business stakeholders were in favor of 
repealing the regulations. 

* National television ownership cap. The majority (65 of 102) of 
stakeholders expressed no opinion on this issue. Of the 37 who did 
express an opinion, 22 said that the cap should be left as is or 
lowered, further restricting ownership, while 15 favored raising or 
repealing the cap. But these results differed for nonbusiness and 
business stakeholders. Whereas 11 of 15 nonbusiness stakeholders stated 
that the cap should be left as is or lowered, further restricting 
ownership, 11 of 22 business stakeholders indicated that the cap should 
raised or repealed. 

* Reinstitution of minority tax certificate program. Of the 102 
stakeholders interviewed, most (72) expressed no opinion as to whether 
the minority tax certificate program should be reinstated. However, 
among the 30 stakeholders who mentioned this issue, there was broad 
consensus in favor of reinstating some version of this program. Twenty- 
eight of these 30 stakeholders indicated that the program should be 
either reintroduced without changes or expanded, and 2 said that the 
program was not needed and should not be reinstated. 

Conclusion: 

The media serve an important function in American life through their 
role in disseminating news, information, and entertainment. Though 
media options vary by local market, the overall growth in the 
communications industry and the emergence of the Internet have provided 
unprecedented levels of media choices to the American public. At the 
same time, economic forces appear to encourage local and national 
consolidation and operating agreements that reduce the number of 
independent voices. Moreover, though smaller owners, including 
minorities and women, have opportunities to enter the media industry by 
way of Internet-based and niche publications, these groups continue to 
face long-standing challenges to the ownership of radio and television 
stations. Since 1999, FCC has collected data on the gender, race, and 
ethnicity of radio and television station owners. In undertaking this 
effort, FCC noted that it was appropriate to develop "precise 
information on minority and female ownership of mass media facilities" 
and "annual information on the state and progress of minority and 
female ownership," thereby positioning "both Congress and the 
Commission to assess the need for, and success of, programs to foster 
opportunities for minorities and females to own broadcast facilities." 
Yet, data weaknesses stemming from how the data are collected, 
verified, and stored limit the benefits of this effort. Further, more 
accurate and reliable data would allow FCC to better assess the impact 
of its rules and regulations and would enable the Congress to make more 
informed legislative decisions about issues such as whether to 
reinstate the tax certificate program. While FCC recently adopted a 
Notice of Proposed Rulemaking regarding its data on broadcaster 
licensee gender, race, and ethnicity, this process has only recently 
begun and its outcome is unclear. 

Recommendation for Executive Action: 

To more effectively monitor and report on the ownership of broadcast 
outlets by minorities and women, we recommend that the Chairman, FCC, 
identify processes and procedures to improve the reliability of FCC's 
data on gender, race, and ethnicity so that these data can be readily 
used to accurately depict the level, nature, and trends in minority and 
women ownership, thereby enabling FCC and the Congress to determine how 
well FCC is meeting its policy goal of diversity in media ownership. 

Agency Comments: 

We provided a draft of this report to FCC for its review and comment. 
FCC provided technical comments that we incorporated where appropriate. 
FCC did not provide comments on our recommendation. FCC's written 
comments appear in appendix IV. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the date of this letter. At that time, we will send copies of this 
report to the appropriate congressional committees and to the Chairman 
of the Federal Communications Commission. We will also make copies 
available to others upon request. In addition, the report will be 
available at no charge on the GAO Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-2834 or [email protected]. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this report. Contact information and major 
contributors to this report are listed in appendix V. 

Sincerely yours, 

Signed by: 

JayEtta Z. Hecker: 

Director, Physical Infrastructure Issues: 

[End of section] 

Appendix I: Scope and Methodology: 

To assess the current ownership of media outlets, we used a case study 
methodology. The case studies consisted of the largest city in 16 
Nielsen Designated Market Areas (DMA). To select the case study DMAs, 
we used a stratified random sample. We obtained the 2007 list of DMAs 
from the Nielsen Media Research Web site. We stratified the DMAs by 
size and randomly selected four large, four medium-size, and four small 
markets for the case study analysis. We defined large markets as those 
with 500,000 to 3 million households; medium-size markets as those with 
150,000 to 499,999 households; and small markets as those with fewer 
than 150,000 households. In addition to the 12 random selections, we 
selected the top three markets (New York, Los Angeles, Chicago) as a 
separate take-all stratum and selected Tucson as a test market in which 
to count outlets because of its large Hispanic population. 

Within each market, we counted the number of television stations, radio 
stations, newspapers, and multichannel video programming distributors 
(MVPD) and the owners of these outlets. We considered outlets available 
to residents in the largest city to avoid counting multiple outlets not 
present throughout the market; outlets not counted primarily consist of 
weekly suburban newspapers not published in the largest city. Below we 
discuss our approach to counting television stations, radio stations, 
newspapers, and multichannel video programming distributors. 

Television stations. We used the Warren Television and Cable Factbook: 
Online to count the number of full-power television stations located in 
each market. We included both commercial and noncommercial full-power 
television stations in our count of stations. We used company Web sites 
and ownership data that stations filed with the Federal Communications 
Commission (FCC) through its Form 323 to determine the ownership of the 
station. For commercial stations, we counted the owner as the ultimate 
legal entity on whose behalf the ownership was registered with FCC. 
This provided an accurate count of group ownership, as well as 
identified any multiple station ownership within a single market. 

Radio stations. We first determined the largest city located within 
each television market. Some selected case study markets had multiple 
core cities; we used Miami for the Miami/Fort Lauderdale DMA, Scranton 
for the Wilkes Barre/Scranton DMA, Florence for the Myrtle Beach/ 
Florence DMA, and Cedar Rapids for the Cedar Rapids/Waterloo/Iowa City/ 
Dubuque DMA. We used FCC data to determine the number of full-power 
commercial and noncommercial radio stations located within close 
listening distance of the city.[Footnote 58] Due to its large 
geographic area and sparse population, we identified the four most 
populous counties in the Sherman/Ada DMA and determined the number of 
radio stations located within 20 miles of the largest town in each 
county.[Footnote 59] We adopted this approach because the market is too 
small to have an Arbitron radio market.[Footnote 60] The Sherman/Ada 
market also is located between the Oklahoma City and Dallas/Fort Worth 
markets, so we used an atlas to ensure that the radio stations located 
within 20 miles of Ada, Oklahoma, and Sherman, Texas, both located on 
the geographical edge of the DMA, were physically located inside the 
Sherman/Ada DMA. 

Our methodology produced counts of radio stations that may not match 
the actual number of full-power radio stations located in a DMA for one 
or both of the following reasons. First, the DMA may contain more than 
one Arbitron radio market, such as in the Cedar Rapids/Waterloo/Iowa 
City/Dubuque DMA and we counted radio stations from only one radio 
market. Second, the DMA is geographically large and the number of full- 
power commercial and noncommercial radio stations located within close 
listening distance of the core city does not capture all of the radio 
stations. 

Newspapers. We used Bowker's News Media Directory to identify the 
daily, weekly, ethnic, religious, and special interest publications 
whose area of dominant influence included the core urban area. We 
counted daily and weekly newspapers separately and combined the ethnic, 
religious, and special interest publications into the "other" category. 
We also surveyed Web sites of the major daily newspapers in the core 
urban area of each of our case study markets to determine if there were 
any additional publications not contained in Bowker's News Media 
Directory. We also used the directory from the New American Media 
organization to identify additional ethnic publications available in 
New York, Los Angeles, Chicago, Miami, Charlotte, Nashville, and 
Chattanooga.[Footnote 61] This source did not list publications for the 
other case study markets. Fieldwork in the Nashville and Tucson markets 
turned up additional publications that were missing in our data source. 
Our data sources likely undercount small local weeklies and other types 
of independent journals. 

Multichannel video programming distributors. We obtained the list of 
cable operators in each state from FCC's database of registered cable 
operators ([hyperlink, 
http://www.fcc.gov/mb/engineering/liststate.html]). We used the Warren 
Television and Cable Factbook to verify that a cable company listed in 
the FCC database provided service in the core urban area. If the market 
contained more than one urban area, we used the largest city (e.g., 
Miami). In addition to cable companies, we included both direct 
broadcast satellite companies (DirecTV and EchoStar). The minimum MVPD 
count a market could have with this methodology is three. Any number 
greater than three reflects the presence of a cable overbuilder or a 
telecommunications company that is offering subscription television 
services in the core urban area of the DMA. 

In addition to case studies, we reviewed the relevant literature and 
conducted interviews to assess the current ownership of media outlets. 
We identified studies through a general literature review. We 
interviewed agency officials at FCC and the National Telecommunications 
and Information Administration (NTIA) about media ownership policies. 
We also identified 102 stakeholders in academia, think tanks, 
nonprofits, and media companies and interviewed them to obtain their 
views on FCC's ownership policies and issues affecting media ownership. 
We used the same structured interview for all interviewees and analyzed 
the content of the interview responses. To ensure consistent analysis 
of the interview responses, we had two reviewers independently apply 
the content analysis tool to each interview write-up and standardized 
the coding to ensure reliability. We cross-tabulated the interview 
content to determine patterns in responses and the extent to which 
interview subjects supported particular positions. 

To identify the economic, legal and regulatory, and technological 
factors affecting media ownership, we reviewed the relevant literature, 
studies, and regulations and conducted interviews. We obtained and 
analyzed data on the radio and television industries from Bear, Stearns 
and Company, Inc. We obtained data from the Census Bureau's 2006 
American Community Survey to study the economic and demographic 
characteristics of households in the metropolitan statistical area 
around the central city in each case study DMA. We obtained data on the 
average household effective buying income for each DMA from the 
Television Bureau of Advertising for all 210 DMAs; we also obtained the 
list of top 25 Hispanic, African-American, and Asian media markets from 
the bureau. We reviewed the relevant economic literature and studies on 
media ownership. We reviewed relevant legislation and FCC notices, 
orders, and reports to assess legal factors. We also obtained 
information on economic, legal and regulatory, and technological 
factors from industry stakeholders as part of the structured interview 
process. 

To describe the levels of minority and women ownership of broadcast 
outlets, to identify factors that help explain these levels, and to 
assess FCC's data collection efforts, we reviewed relevant reports, 
interviewed agency officials and industry stakeholders, and analyzed 
FCC's forms and processes. To describe the levels of minority and women 
ownership of broadcast outlets, and factors affecting their ownership, 
we interviewed industry stakeholders, FCC and NTIA officials, and 
members of FCC's Advisory Committee on Diversity for Communications in 
the Digital Age. We also reviewed relevant reports prepared by or for 
FCC, NTIA, and nongovernment organizations (such as Free Press). To 
determine FCC's data collection efforts, we reviewed the relevant 
regulatory forms (such as FCC's Form 323), and FCC documents and 
commissioned reports. Additionally, we interviewed FCC officials 
responsible for collecting the Commission's data on broadcast ownership 
about the completeness and quality of the information in their 
databases. Because of inadequacies in the FCC ownership data, evidence 
suggesting limited ownership of media outlets by minorities and women 
comes from stakeholder opinions, as well as studies commissioned by FCC 
and prepared by NTIA and nongovernment organizations. 

We conducted this performance audit from February 2007 through March 
2008 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: Results from Case Study Locations: 

To study the nature and level of media ownership, we randomly selected 
12 case study markets, including 4 from each of three market strata-- 
large, medium, and small. In addition, we selected the three largest 
markets as a separate stratum and judgmentally selected an extra market 
from the medium stratum (Tucson) to test our methodology for data 
collection and structured interviews. Information about the markets we 
selected for case study analysis appears in table 7. These media 
markets account for about 20 percent of all television households in 
the United States. For information about our methodology for counting 
outlets in each media market, see appendix I. 

Table 7: Local Media Markets Selected for Analysis: 

2007 Nielsen size rank: 1; 
Designated market area: New York, N.Y; 
Number of TV households: 7,366,950; 
Percentage of U.S. market: 6.616; 
Stratum: Very Large. 

2007 Nielsen size rank: 2; 
Designated market area: Los Angeles, Calif; 
Number of TV households: 5,611,110; 
Percentage of U.S. market: 5.039; 
Stratum: Very Large. 

2007 Nielsen size rank: 3; 
Designated market area: Chicago, Ill; 
Number of TV households: 3,455,020; 
Percentage of U.S. market: 3.103; 
Stratum: Very Large. 

2007 Nielsen size rank: 16; 
Designated market area: Miami-Ft. Lauderdale, Fla; 
Number of TV households: 1,538,620; 
Percentage of U.S. market: 1.382; 
Stratum: Large. 

2007 Nielsen size rank: 26; 
Designated market area: Charlotte, N.C; 
Number of TV households: 1,045,240; 
Percentage of U.S. market: 0.939; 
Stratum: Large. 

2007 Nielsen size rank: 30; 
Designated market area: Nashville, Tenn; 
Number of TV households: 944,100; 
Percentage of U.S. market: 0.848; 
Stratum: Large. 

2007 Nielsen size rank: 53; 
Designated market area: Wilkes Barre- Scranton, Pa; 
Number of TV households: 590,170; 
Percentage of U.S. market: 0.530; 
Stratum: Large. 

2007 Nielsen size rank: 70; 
Designated market area: Tucson (Sierra Vista), Ariz; 
Number of TV households: 433,310; 
Percentage of U.S. market: 0.389; 
Stratum: Medium. 

2007 Nielsen size rank: 76; 
Designated market area: Springfield, Mo; 
Number of TV households: 402,310; 
Percentage of U.S. market: 0.361; 
Stratum: Medium. 

2007 Nielsen size rank: 86; 
Designated market area: Chattanooga, Tenn; 
Number of TV households: 347,380; 
Percentage of U.S. market: 0.312; 
Stratum: Medium. 

2007 Nielsen size rank: 89; 
Designated market area: Cedar Rapids- Waterloo-Iowa City & Dubuque, 
Iowa; 
Number of TV households: 333,270; 
Percentage of U.S. market: 0.299; 
Stratum: Medium. 

2007 Nielsen size rank: 105; 
Designated market area: Myrtle Beach- Florence, S.C; 
Number of TV households: 272,340; 
Percentage of U.S. market: 0.245; 
Stratum: Medium. 

2007 Nielsen size rank: 151; 
Designated market area: Terre Haute, Ind; 
Number of TV households: 144,880; 
Percentage of U.S. market: 0.130; 
Stratum: Small. 

2007 Nielsen size rank: 161; 
Designated market area: Sherman-Ada, Tex., Okla; 
Number of TV households: 124,330; 
Percentage of U.S. market: 0.112; 
Stratum: Small. 

2007 Nielsen size rank: 174; 
Designated market area: Jackson, Tenn; 
Number of TV households: 95,070; 
Percentage of U.S. market: 0.085; 
Stratum: Small. 

2007 Nielsen size rank: 181; 
Designated market area: Harrisonburg, Va; 
Number of TV households: 87,630; 
Percentage of U.S. market: 0.079; 
Stratum: Small. 

Source: GAO analysis of Nielsen 2007 television ratings data. 

[End of table] 

The Three Largest Media Markets: 

New York, New York (1): 

The New York City designated market area (DMA) is the largest media 
market in the United States, with over 7 million households. This media 
market comprises 13 counties in northern New Jersey, 1 county in 
southwest Connecticut, 1 county in northeastern Pennsylvania, and 14 
counties in New York, including all those on Long Island and the five 
boroughs. The New York City DMA is the largest African-American media 
market, the second-largest Asian media market, and the second-largest 
Hispanic media market in the United States. In terms of average 
household disposable income,[Footnote 62] the New York City DMA ranks 
fourth highest in the United States, making it a very attractive market 
for a broadcast media outlet. 

The four major networks (ABC, CBS, FOX, and NBC) own and operate their 
local broadcast television affiliates in New York. (In smaller 
television markets, the major networks are less likely to own and 
operate their local affiliates.) One company owns three television 
stations, all of which broadcast in Spanish. There are seven 
noncommercial Public Broadcasting Service (PBS) affiliates, several 
independent stations, and three Spanish-language network affiliates 
among the remaining broadcast television stations. 

The owners of radio outlets in the New York media market include 
several large national media companies with five or six outlets each 
and 28 entities with a single outlet in the market. Therefore, about 
two-thirds of the owners in the New York City DMA are operating a 
single radio outlet.[Footnote 63] The majority of the radio stations in 
this market broadcast in English, several broadcast in Spanish, and one 
broadcasts in Cantonese. In the aggregate, the 73 radio stations in the 
New York media market provide listeners with a wide variety of content. 

There is more cross-ownership of newspapers and broadcast outlets in 
the New York market than in other media markets, but there is also more 
diversity in specialty publications. News Corporation owns The Wall 
Street Journal, The New York Post, and two broadcast television 
stations (WWOR and WNYW); The New York Times Company owns The New York 
Times daily newspaper and a radio station (WQXR); and Tribune Company 
owns one Spanish-language daily newspaper (Hoy) and one television 
station (WPIX). New York is the center of the publishing industry in 
the United States and far more specialty publications are located here 
than in other media markets. 

Table 8: Numbers of Outlets and Owners by Media Sector for the New York 
City DMA: 

Industry segment: Broadcast television; 
Number of outlets: 21; 
Numbers of owners: 15. 

Industry segment: Radio; 
Number of outlets: 73; 
Numbers of owners: 44. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 5; 
Numbers of owners: 5. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 41; 
Numbers of owners: 18. 

Industry segment: Newspaper[A]: * Other[B]; 
Number of outlets: 177; 
Numbers of owners: 136. 

Industry segment: Multichannel video program distributor[C]; 
Number of outlets: 4; 
Numbers of owners: 4. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Reflects availability in New York City. In addition to those 
newspapers identified by Bowker's, we found 51 other newspapers listed 
for New York City in the online version of the National Ethnic Media 
Directory, but were not able to identify the ownership for all of the 
newspapers. These 51 newspapers are not included in the table because 
of this. 

[B] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[C] Three cable companies operate in New York City, but their service 
territories do not overlap. A representative household has one of these 
companies available plus an overbuilder (i.e., a competing cable 
company in a market formerly licensed exclusively to another cable 
company) and both satellite television companies, DirecTV and EchoStar. 

[End of table] 

Los Angeles, California (2): 

The Los Angeles DMA is the second-largest media market in the United 
States, with over 5.6 million households. It includes eight counties in 
southern California and stretches from the Pacific Coast east to 
Nevada. The Los Angeles DMA is the largest Hispanic media market, the 
largest Asian media market, and the sixth-largest African-American 
media market in the United States. This media market ranks 24th in the 
nation for average household disposable income, the lowest ranking 
among the three largest media markets. 

The four major networks (ABC, CBS, FOX, and NBC) own and operate their 
local broadcast television affiliates in the Los Angeles DMA, just as 
they do in the New York City DMA. One of these networks owns three 
stations in this market while two other networks each own two stations. 
Los Angeles has more broadcast television stations than New York; more 
stations broadcast in Spanish and there are two Asian-language stations 
in Los Angeles. 

The Los Angeles DMA is the largest radio market in the country. 
According to advertising data for 2005, radio stations in the Los 
Angeles DMA[Footnote 64] competed for over $1 billion of advertising 
revenue, exceeding the advertising revenue for the next largest (New 
York) and the third-largest (Chicago) radio advertising markets by over 
$200 million and about $500 million, respectively. The Los Angeles DMA 
is somewhat more concentrated: one owner has reached the FCC cap of 
eight stations and another is close to the cap with seven stations. By 
contrast, no radio station owner in New York has reached the eight- 
station cap. Fewer stations are operated by a single owner in Los 
Angeles (20) than in New York (28), yet over half the Los Angeles 
station owners (about 59 percent) operate a single station. The large 
number of radio stations in Los Angeles provides a wide variety of 
content, and about a quarter of the stations broadcast in a language 
other than English, including 13 in Spanish, 3 in Korean, and 2 in 
Chinese. Stations located in Mexico and in neighboring U.S. media 
markets can also be heard in all or portions of the Los Angeles DMA, 
enhancing the market's diversity. 

Fewer newspapers are located in Los Angeles than in the New York DMA, 
yet the number is still large compared with other media markets. There 
is one instance of cross-ownership: Tribune Company owns the Los 
Angeles Times and a broadcast television station (KTLA) in this market. 

Table 9: Numbers of Outlets and Owners by Media Sector for the Los 
Angeles DMA: 

Industry segment: Broadcast television; 
Number of outlets: 24; 
Number of owners: 19. 

Industry segment: Radio[A]; 
Number of outlets: 69; 
Number of owners: 34. 

Industry segment: Newspaper[B]: * Daily; 
Number of outlets: 2; 
Number of owners: 2. 

Industry segment: Newspaper[B]: * Weekly; 
Number of outlets: 15; 
Number of owners: 5. 

Industry segment: Newspaper[B]: * Other[C]; 
Number of outlets: 73; 
Number of owners: 59. 

Industry segment: Multichannel video program distributor[D]; 
Number of outlets: 4; 
Number of owners: 4. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Does not include four Mexican stations whose broadcasts are 
retransmitted in Los Angeles or stations from neighboring media markets 
whose broadcasts can be heard in portions of the Los Angeles DMA. 

[B] Reflects availability in the city of Los Angeles. In addition to 
the newspapers in the listed sources, we found 54 other newspapers 
listed for the city of Los Angeles in the online version of the 
National Ethnic Media Directory, but we were not able to identify the 
ownership for all of them. These 54 newspapers are not included in the 
table because of this. 

[C] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[D] Four cable companies operate in the city of Los Angeles, but their 
service territories do not overlap. A representative household has one 
of these companies available plus a telephone company offering fiber 
optic service and both satellite television companies. 

[End of table] 

Chicago, Illinois (3): 

The Chicago DMA is the third-largest media market in the United States, 
with over 3.4 million households. It contains 11 counties in northern 
Illinois and 5 counties in northwest Indiana. Chicago is the third- 
largest African-American media market, the fifth-largest Asian market, 
and the fifth-largest Hispanic media market in the United States. The 
Chicago DMA has the seventh-highest average household income in the 
nation. 

The Chicago DMA has eight fewer broadcast television stations than the 
Los Angeles DMA; there are four fewer Spanish-language, no Asian- 
language, and three fewer independent English-language stations in 
Chicago. The Chicago DMA also has five fewer television stations than 
the New York DMA. Radio outlet ownership is similar to that in Los 
Angeles--there are 2 owners that operate seven stations each in this 
market. Radio ownership is characterized by a few companies operating 
near the FCC ownership limit while 27 of the 38 owners (or 71 percent) 
own and operate a single radio station. 

Chicago has one instance of cross-ownership--under a waiver from FCC, 
Tribune Company owns two daily newspapers, the Chicago Tribune and Hoy, 
a Spanish-language daily; a television station, WGN; and a radio 
station, WGN-AM, in this media market. 

Table 10: Numbers of Outlets and Owners by Media Sector for the Chicago 
DMA: 

Industry segment: Broadcast television; 
Number of outlets: 16; 
Number of owners: 13. 

Industry segment: Radio; 
Number of outlets: 65; 
Number of owners: 38. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 3; 
Number of owners: 3. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 17; 
Number of owners: 11. 

Industry segment: Newspaper[A]: * Other[B]; 
Number of outlets: 52; 
Number of owners: 47. 

Industry segment: Multichannel video program distributor[C]; 
Number of outlets: 4; 
Number of owners: 4. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Reflects availability in the city of Chicago. In addition to the 
newspapers in the listed sources, we found 35 other newspapers listed 
for Chicago in the online version of the National Ethnic Media 
Directory, but were not able to identify the owners of all of them. 
These 35 newspapers are not included in the table because of this. 

[B] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[C] Two cable companies operate in the city of Chicago, but their 
service territories do not overlap. A representative household has one 
of these companies available plus an overbuilder and both satellite 
television companies. 

[End of table] 

Large Media Markets: 

After the top three markets, we defined large media markets as those 
with between 500,000 and 3 million households. There are 59 media 
markets in this size category, ranging from Philadelphia (4) to Tulsa 
(62). We randomly selected four of these markets for case study 
analysis. 

Miami/Fort Lauderdale, Florida (16): 

The Miami/Fort-Lauderdale DMA includes 1.5 million households, making 
it the 16th-largest media market in the nation. It is the 3rd-largest 
Hispanic media market in the United States, after New York and Los 
Angeles; the 10th-largest African-American media market; and the 23rd- 
largest Asian media market. The average household disposable income for 
the DMA ranks 33rd in the nation, yet the advertising revenue for radio 
ranks 11th. 

Although the Miami/Fort Lauderdale DMA has about 2 million fewer 
households than the Chicago DMA, both markets support 16 broadcast 
television outlets. In Miami, these include affiliates of the eight 
primary English-language commercial networks,[Footnote 65] five Spanish-
language stations, and three public television stations. Three of the 
English-language affiliates are owned and operated by two of the four 
major television networks. Commercial television stations that are 
owned and operated by the major networks are characteristic of our 
large case study media markets. Sixteen, or two-thirds, of the radio 
station owners operate a single outlet in the Miami/Fort Lauderdale 
DMA--the same proportion as in the New York City DMA. One company owns 
seven radio stations. 

This city supports two Spanish-language daily newspapers in addition to 
the English-language newspaper. Among the other newspapers available to 
residents are several Spanish-language weeklies and an African- 
American-focused weekly. 

Table 11: Numbers of Outlets and Owners by Media Sector for the Miami/ 
Fort-Lauderdale DMA: 

Industry segment: Broadcast television; 
Number of outlets: 16; 
Number of owners: 13. 

Industry segment: Radio; 
Number of outlets: 47; 
Number of owners: 24. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 3; 
Number of owners: 2. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 5; 
Number of owners: 5. 

Industry segment: Newspaper[A]: * Other[B]; 
Number of outlets: 10; 
Number of owners: 10. 

Industry segment: Multichannel video program distributor[C]; 
Number of outlets: 4; 
Number of owners: 4. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Reflects availability in Miami. In addition to the newspapers in 
the listed sources, we found 14 other newspapers listed for Miami in 
the online version of the National Ethnic Media Directory, but were not 
able to identify the ownership for all of them. These 14 newspapers are 
not included in the table because of this. 

[B] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[C] One cable company operates in Miami. A representative household has 
this company available plus a telephone company offering digital cable 
and both satellite television companies. 

[End of table] 

Charlotte, North Carolina (26): 

Charlotte is the 26th-largest media market in the United States, with 
over 1 million households. It is the 16th-largest African- American 
media market, but is not among the top 25 Hispanic or Asian media 
markets in the United States. 

The broadcast television market here includes a higher percentage of 
noncommercial stations and more duopolies--one company owning two 
stations--than do the case study media markets described thus far. 
Specifically, 4 of the DMA's 12 broadcast television stations, or 33 
percent, are noncommercial and are affiliated with PBS. Among the 8 
commercial television stations, there are two duopolies, and 2 of the 
noncommercial PBS stations have one owner, a local university. All of 
the commercial stations broadcast in English, meaning that residents in 
this DMA who desire media content in languages other than English must 
subscribe to a cable or satellite television service. 

In terms of radio advertising revenue, Charlotte is the 29th- largest 
market. Fewer radio stations are located within listening distance of 
the core city limits than in Miami or Nashville. Ownership of radio 
outlets is more concentrated in Charlotte than in the larger markets. 
There are 17 owners, including 1 large national media company that owns 
7 radio stations in this market and 10 commercial and noncommercial 
owners that each operates a single station in the market. 

Table 12: Numbers of Outlets and Owners by Media Sector for the 
Charlotte DMA: 

Industry segment: Broadcast television; 
Number of outlets: 12; 
Number of owners: 9. 

Industry segment: Radio; 
Number of outlets: 37; 
Number of owners: 17. 

Industry segment: * Daily; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: * Weekly; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: * Other[B]; 
Number of outlets: 11; 
Number of owners: 11. 

Industry segment: Multichannel video program distributor[C]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Reflects availability in the city of Charlotte. In addition to the 
newspapers in the listed sources, we found five other newspapers listed 
for Charlotte in the online version of the National Ethnic Media 
Directory, but were not able to identify the owners of all of them. 
These five newspapers are not included in the table because of this. 

[B] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[C] One cable company operates in the city of Charlotte. A 
representative household has this company available plus both satellite 
television companies. 

[End of table] 

Nashville, Tennessee (30): 

The Nashville DMA is the 30th-largest media market in the United 
States, with over 940,000 households. Covering 49 counties in Tennessee 
and Kentucky, this DMA covers a wide geographic area. Nashville is not 
among the top 25 media markets for African Americans, Asians, or 
Hispanics. In terms of average household disposable income, the DMA 
ranks 43rd among all media markets in the United States, and it ranks 
lower for television advertising revenue than for population size. 

Two of the Nashville DMA's 12 broadcast television stations are 
noncommercial public television stations. One company owns 2 of the 
commercial broadcast television stations and has a local service 
agreement to run a third station with another outlet owner. All 12 
television stations broadcast in English. 

With 52 radio outlets, Nashville has more radio stations than Miami, 
Charlotte, and Wilkes Barre/Scranton, the other three case study media 
markets in our large-size category, and radio ownership is much less 
concentrated. Twenty-four, or 69 percent, of the station owners operate 
a single station in this market; two companies own five stations each 
and the remaining nine companies own the rest. One of the group owners 
with five radio stations also has a joint sales agreement with a radio 
station owned by another company in Nashville. 

Table 13: Numbers of Outlets and Owners by Media Sector for the 
Nashville DMA: 

Industry segment: Broadcast television; 
Number of outlets: 12; 
Number of owners: 11. 

Industry segment: Radio; 
Number of outlets: 52; 
Number of owners: 35. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 2; 
Number of owners: 2. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 4; 
Number of owners: 3. 

Industry segment: Newspaper[A]: * Other[B]; 
Number of outlets: 9; 
Number of owners: 9. 

Industry segment: Newspaper[A]: Multichannel video program 
distributor[C]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Reflects availability in Nashville. In addition to the newspapers 
in the listed sources, we found one other newspaper listed for 
Nashville in the online version of the National Ethnic Media Directory. 
Since we could not identify the ownership for all of the newspapers 
found in the National Ethnic Media Directory, we did not include them 
in the case study market count tables. 

[B] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[C] One cable company operates in the city of Nashville. A 
representative household has this company available plus both satellite 
television companies. 

[End of table] 

Wilkes Barre/Scranton, Pennsylvania (53): 

The Wilkes Barre/Scranton DMA covers 17 counties in northeastern 
Pennsylvania and is the 53rd-largest media market in the country, with 
over 590,000 households. This DMA is unusual in that it has no large 
core city, but rather a series of large-and medium-size towns located 
in the valleys of this mountainous region. The DMA ranks 148th in the 
nation for average household disposable income. 

With about 350,000 fewer households than the Nashville DMA, the Wilkes 
Barre/Scranton DMA also has fewer broadcast television stations and 
radio stations. The DMA contains seven commercial stations, all of 
which are broadcast network affiliates, and one PBS affiliate. There 
are no full-power independent television stations in this media market. 
Difficulties in the local economy--and a television advertising market 
that, according to industry sources we spoke with, is smaller than 
warranted for a DMA of its population size--have encouraged cost- 
sharing arrangements between the commercial broadcast television 
stations. Two of the stations have a single owner, and this owner has a 
local service agreement with a third station. Two other stations have a 
local service agreement under which they share everything except 
programming and finances. The remaining two commercial television 
stations have a joint sales agreement. Thus, the seven commercial 
television stations in this DMA operate in three loose commercial 
groupings. 

Ten of the 14 owners of radio outlets in the Wilkes Barre/Scranton DMA, 
or 71 percent, own and operate a single radio station in the market. 
One company owns five stations, another owns four stations, and two 
companies own the remaining five stations. Because of the mountainous 
terrain in this DMA, rebroadcasting of other stations' signals occurs 
frequently. 

Table 14: Numbers of Outlets and Owners by Media Sector for the Wilkes 
Barre/Scranton DMA: 

Industry segment: Broadcast television; 
Number of outlets: 8; 
Number of owners: 7. 

Industry segment: Radio[A]; 
Number of outlets: 24; 
Number of owners: 14. 

Industry segment: Newspaper[B]: * Daily; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[B]: * Weekly; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[B]: * Other[C]; 
Number of outlets: 4; 
Number of owners: 3. 

Industry segment: Multichannel video program distributor[D]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Includes all stations identified by FCC data at or within 20 miles 
of Scranton, the largest town in this DMA. Does not include stations 
that rebroadcast the signal of another radio station. 

[B] Reflects availability in Scranton. 

[C] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[D] One cable company operates in the city of Scranton. A 
representative household has this company available plus both satellite 
television companies. 

[End of table] 

Medium-Size Media Markets: 

After the top three markets and large markets, we defined medium-size 
media markets as those containing from 150,000 to 499,999 households. 
There are 86 media markets in this size category, ranging from 
Lexington (63) to Salisbury (148). We randomly selected 4 of these 
markets for case study analysis. In addition, before making our random 
selection, we judgmentally selected the Tucson, Arizona, DMA as a test 
market for our data collection and structured interview methodology 
because of its large Hispanic population. 

Tucson, Arizona (70): 

The Tucson DMA is the 70th-largest media market in the United States, 
containing over 433,000 households. It is also the 25th-largest 
Hispanic media market in the United States, with over 115,000 Hispanic 
households. This DMA ranks 74th for average household disposable 
income. 

The Tucson DMA includes six commercial television stations affiliated 
with English-language networks, three commercial television stations 
affiliated with Spanish-language networks, and two public television 
stations. There are two duopoly owners of commercial stations--one of 
English-language stations and one of Spanish-language stations. 

Radio outlet ownership is relatively concentrated in Tucson, with one 
media company operating six radio stations in this market and two media 
companies operating five stations each. In total, 7 owners operate more 
than one station and 10 owners, or 59 percent, operate a single station 
in the market. 

The Tucson DMA has two daily newspapers, the Arizona Daily Star and the 
Tucson Citizen. They operate together under a joint operating agreement 
allowed by the Newspaper Preservation Act of 1970. 

Table 15: Numbers of Outlets and Owners by Media Sector for the Tucson 
DMA: 

Industry segment: Broadcast television; 
Number of outlets: 11; 
Number of owners: 8. 

Industry segment: Radio; 
Number of outlets: 38; 
Number of owners: 17. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 2; 
Number of owners: 2. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 2; 
Number of owners: 2. 

Industry segment: Newspaper[A]: * Other[B]; 
Number of outlets: 5; 
Number of owners: 5. 

Industry segment: Multichannel video program distributor[C]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Reflects availability in the city of Tucson. 

[B] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[C] One cable company operates in the city of Tucson. A representative 
household has this company available plus both satellite television 
companies. 

[End of table] 

Springfield, Missouri (76): 

The Springfield, Missouri, DMA includes 31 counties in Missouri and 
Arkansas and is the 76th-largest media market in the country, with just 
over 402,000 households. In terms of average household disposable 
income, this DMA ranked 183rd out of 210 media markets in the United 
States. 

Five commercial television broadcasting stations and one public 
broadcasting television station serve this DMA. Two of the commercial 
television stations have a local service agreement under which they 
share everything in their business operations except programming and 
finances, and another two commercial stations operate together under a 
shared service agreement. 

Five companies own 20 radio outlets, including two companies with 5 
radio stations each. Six owners each operate a single radio station in 
this market. One company controls the primary daily newspaper in the 
DMA and one of the weeklies in Springfield itself. 

Table 16: Numbers of Outlets and Owners by Media Sector for the 
Springfield DMA: 

Industry segment: Broadcast television; 
Number of outlets: 6; 
Number of owners: 6. 

Industry segment: Radio; 
Number of outlets: 26; 
Number of owners: 11. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 2; 
Number of owners: 2. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[A]: * Other[B]; 
Number of outlets: 2; 
Number of owners: 2. 

Industry segment: Multichannel video program distributor[C]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Reflects availability in the city of Springfield. 

[B] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[C] One cable company operates in the city of Springfield. A 
representative household has this company available plus both satellite 
television companies. 

[End of table] 

Chattanooga, Tennessee (86): 

The Chattanooga DMA covers 17 counties in Tennessee, Georgia, and North 
Carolina; includes over 347,000 households; and is the 86th- largest 
media market in the United States. This market supports six commercial 
television broadcasting stations, all affiliated with a commercial 
network, and two public television broadcasting stations. Five radio 
outlet owners control 17 radio stations, including two owners that 
control 4 stations each. Fifteen owners, or 75 percent, each operate a 
single station. There is no cable overbuilder in this DMA. 

Table 17: Numbers of Outlets and Owners by Media Sector for the 
Chattanooga DMA: 

Industry segment: Broadcast television; 
Number of outlets: 8; 
Number of owners: 8. 

Industry segment: Radio; 
Number of outlets: 32; 
Number of owners: 20. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 2; 
Number of owners: 1. 

Industry segment: Newspaper[A]: * Other; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Multichannel video program distributor[B]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Reflects availability in the city of Chattanooga. In addition to 
the newspapers in the listed sources, we found one other newspaper 
listed for Chattanooga in the online version of the National Ethnic 
Media Directory. Since we could not identify the ownership for all of 
the newspapers found in the National Ethnic Media Directory, we did not 
include them in the case study market count tables. 

[B] One cable company operates in the city of Chattanooga. A 
representative household has this company available plus both satellite 
television companies. 

[End of table] 

Cedar Rapids/Waterloo/Iowa City/Dubuque, Iowa (89): 

The Cedar Rapids/Waterloo/Iowa City/Dubuque DMA includes 21 counties in 
Iowa, contains over 333,000 households, and is the 89th- largest media 
market in the country. Like the Wilkes Barre/Scranton DMA, the Cedar 
Rapids/Waterloo/Iowa City/Dubuque DMA does not contain a single core 
urban area. However, unlike the Wilkes Barre/Scranton DMA, this DMA is 
subdivided among three radio markets. To ensure comparability with 
other case study media markets, we counted stations located in the 
Cedar Rapids radio market because Cedar Rapids has the largest 
population of the four towns. 

The Cedar Rapids/Waterloo/Iowa City/Dubuque DMA supports more broadcast 
television outlets than comparably populated media markets. There are 
six affiliates of national broadcast networks, two public television 
stations, and one independent television station, all of which 
broadcast in English. Two large national radio companies own 6 radio 
stations each, and 6 of the 11 radio outlet owners in the DMA, or 55 
percent, each operate a single radio station. There is one daily 
newspaper in Cedar Rapids. 

Table 18: Numbers of Outlets and Owners by Media Sector for the Cedar 
Rapids DMA: 

Industry segment: Broadcast television[A]; 
Number of outlets: 9; 
Number of owners: 8. 

Industry segment: Radio[B]; 
Number of outlets: 25; 
Number of owners: 11. 

Industry segment: Newspaper[C]; 
Number of outlets: [Empty]; 
Number of owners: [Empty]. 

Industry segment: * Daily; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: * Weekly; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: * Other; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Multichannel video program distributor[D]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Includes all broadcast television outlets whose signal reaches 
Cedar Rapids, the largest city in the DMA. Does not include one full-
power broadcast television station in Dubuque whose signal does not 
reach Cedar Rapids. 

[B] Includes all radio outlets within 20 miles of Cedar Rapids. 

[C] Includes all newspapers located in Cedar Rapids. 

[D] One cable company operates in the city of Cedar Rapids. A 
representative household has this company available plus both satellite 
television companies. 

[End of table] 

Myrtle Beach/Florence, South Carolina (105): 

The Myrtle Beach/Florence DMA consists of eight counties in South 
Carolina and southeastern North Carolina. With over 272,000 households, 
this DMA is the 105th-largest media market in the United States, and in 
terms of average household disposable income, it ranks 176th out of 210 
media markets. This television market DMA contains two medium-size 
towns that are geographically separated. Florence is the more populous 
of the two, so we counted the radio stations and newspapers located in 
this town. 

The Myrtle Beach/Florence media market has six broadcast television 
outlets and five owners. The duopoly owner is an educational 
association that operates two public television stations. Two 
commercial television stations operate under a local marketing 
agreement that enables them to share fixed operating costs. 

In the Florence radio market (the larger of the two radio markets in 
the Myrtle Beach/Florence DMA), there are four owners of a single 
station and two group owners. One group station owner controls five 
stations in this market, while the other controls four stations. 

Table 19: Numbers of Outlets and Owners by Media Sector for Florence: 

Industry segment: Broadcast television; 
Number of outlets: 6; 
Number of owners: 5. 

Industry segment: Radio[A]; 
Number of outlets: 13; 
Number of owners: 6. 

Industry segment: Newspaper[B]: * Daily; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[B]: * Weekly; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[B]: * Other; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Multichannel video program distributor[C]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Based on FCC data for full-power radio stations located at or 
within 20 miles of Florence. 

[B] Based on data for Florence. 

[C] One cable company operates in the city of Florence. A 
representative household has this company available plus both satellite 
television companies. 

[End of table] 

Small Media Markets: 

The smallest media markets are those with fewer than 150,000 
households. There are 61 media markets in this size category, ranging 
from Palm Springs, California (149), to Glendive, Montana (210). We 
randomly selected 4 of these markets for case study analysis. 

Terre Haute, Indiana (151): 

The Terre Haute DMA includes five counties in eastern Illinois and nine 
counties in western Indiana. There are fewer than 145,000 households in 
this market, making it the 151st-largest media market, and in terms of 
average household disposable income, it ranks 174th out of 210 media 
markets. 

Three commercial television stations and two public television stations 
operate in this market. Two of the commercial stations operate under a 
joint operating agreement that allows them to share operating costs. As 
noted, cost-sharing arrangements also existed in the other four case 
study markets where we found a large difference between the population 
rank and the average household disposable income rank. Three owners 
operate 10 radio stations in this market, including two owners that 
operate 4 stations each, and eight owners each operate a single radio 
station in this market. 

Table 20: Numbers of Outlets and Owners by Media Sector for the Terre 
Haute DMA: 

Industry segment: Broadcast television; 
Number of outlets: 5; 
Number of owners: 5. 

Industry segment: Radio; 
Number of outlets: 18; 
Number of owners: 11. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Newspaper[A]: * Other[B]; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Multichannel video program distributor[C]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Reflects availability in the city of Terre Haute. 

[B] Includes data for specialty publications, religious newspapers, and 
ethnic newspapers. 

[C] Two cable companies operate in the city of Terre Haute, but their 
service territories do not overlap. A representative household has one 
of these companies available plus both satellite television companies. 

[End of table] 

Sherman, Texas/Ada, Oklahoma (161): 

The Sherman/Ada DMA contains 10 counties in southern Oklahoma and 1 
county in northern Texas. Sherman is the largest community within this 
media market, with about 37,000 residents. This media market contains 
just over 124,000 households and is the 161st-largest media market. 
This market contains a higher proportion of Native American residents 
than any of our other case study markets. 

Although there are two broadcast television stations in this market, 
there is no public television station. The two commercial stations are 
local affiliates of two different major broadcast networks, and one of 
these stations carries a third major broadcast network on its second 
digital signal. Residents of this DMA who own a digital television thus 
have free access to three of the four major broadcast networks. 

While a distinct television market, the Sherman/Ada DMA does not 
constitute a separate radio market.[Footnote 66] Six owners operate 
more than one radio station in this market, including one owner that 
operates four stations and two owners (one of whom is the Chickasaw 
Nation) that operate three stations each. Seven owners each operate a 
single radio station in this market. 

Table 21: Numbers of Outlets and Owners by Media Sector for the 
Sherman/Ada DMA: 

Industry segment: Broadcast television; 
Number of outlets: 2; 
Number of owners: 2. 

Industry segment: Radio; 
Number of outlets: 23; 
Number of owners: 13. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Newspaper[A]: * Other; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Multichannel video program distributor[B]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Based on data for Sherman, Texas. 

[B] One cable company operates in the city of Sherman. A representative 
household has this company available plus both satellite television 
companies. 

[End of table] 

Jackson, Tennessee (174): 

The Jackson DMA includes the town of Jackson and six counties in 
Tennessee to the east and northeast of Memphis. With just over 95,000 
households, this media market is the 174th-largest in the nation. The 
DMA has two commercial broadcast television stations, both of which are 
local affiliates of major networks, and one public television station. 
Neither of the two commercial television stations broadcasts a second 
major network on its second digital signal. Five radio station owners 
operate more than one station, including two companies that operate 
four stations each and another that operates three stations in this 
market. Six owners each operate a single radio station in this market. 

Table 22: Numbers of Outlets and Owners by Media Sector for the Jackson 
DMA: 

Industry segment: Broadcast television; 
Number of outlets: 3; 
Number of owners: 3. 

Industry segment: Radio; 
Number of outlets: 21; 
Number of owners: 11. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Newspaper[A]: * Other; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Multichannel video program distributor[B]; 
Number of outlets: 4; 
Number of owners: 4. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A} Based on data for Jackson. 

[B] Two cable companies operate in the city of Jackson. A 
representative household has a choice between one of these companies or 
both satellite television companies. 

[End of table] 

Harrisonburg, Virginia (181): 

With just over 87,000 households, the Harrisonburg DMA is the smallest 
media market we selected for case study analysis. Located northwest of 
Richmond, this DMA is the 181st-largest media market in the country and 
comprises two counties in Virginia and one county in West Virginia. 
This market contains one commercial television station and one public 
television station. The commercial television station is an affiliate 
of a major broadcast network for its analog signal, but it broadcasts 
programming from two other broadcast networks and its analog affiliate 
on its digital signals. Residents of this DMA who have a digital 
television thus have free access to the programming of three broadcast 
networks. Four radio station owners operate more than one station, 
including one company that operates five stations and another that 
operates four stations in this media market. Three owners each operate 
a single station in this market. 

Table 23: Numbers of Outlets and Owners by Media Sector for the 
Harrisonburg DMA: 

Industry segment: Broadcast television; 
Number of outlets: 2; 
Number of owners: 2. 

Industry segment: Radio; 
Number of outlets: 16; 
Number of owners: 7. 

Industry segment: Newspaper[A]: * Daily; 
Number of outlets: 1; 
Number of owners: 1. 

Industry segment: Newspaper[A]: * Weekly; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Newspaper[A]: * Other; 
Number of outlets: 0; 
Number of owners: 0. 

Industry segment: Multichannel video program distributor[B]; 
Number of outlets: 3; 
Number of owners: 3. 

Source: GAO analysis of FCC data, Warren Online Cable and Television 
Factbook, and Bowker's News Media Directory. 

[A] Based on data for Harrisonburg. 

[B] One cable company operates in the city of Harrisonburg. A 
representative household has this company available plus both satellite 
television companies. 

[End of table] 

[End of section] 

Appendix III: Organizations and Individuals Interviewed: 

We conducted interviews with the following individuals and 
representatives from the following organizations. 

Table 24: Organizations and Individuals Interviewed: 

Access Tucson; 
AfraGenesis Communications; 
The Alliance for Community Media; 
American Women in Radio and Television, Inc; 
C. Edwin Baker, University of Pennsylvania Law School; 
Bear, Stearns & Co. Inc; 
Belo Corp; 
Brewer Broadcasting; 
Carolyn M. Byerly, Howard University; 
Angela J. Campbell, Georgetown University Law Center; 
Capitol Broadcasting Company, Inc; 
CBS Corporation; 
Chattanooga Times Free Press; 
Citadel Broadcasting Corporation; 
The City Paper (Nashville, Tennessee); 
Clear Channel Communications, Inc; 
Clear Channel Communications, Inc. (Tucson, Arizona, radio stations); 
Comcast Corporation; 
Benjamin Compaine, Northeastern University; 
Consumer Federation of America; 
Consumers Union; 
Council Tree Communications, Inc; 
Cox Enterprises, Inc; 
Cumulus Media Inc. (Nashville, Tennessee, radio stations); 
Democracy Now!; 
DIRECTV; 
EchoStar Communications Corporation; 
FCC Advisory Committee on Diversity for Communications in the Digital 
Age; 
Fisher Communications, Inc; 
Free Press; 
Future of Music Coalition; 
Gannett Company, Inc; 
Juan Gonzalez, New York Daily News columnist; 
James T. Hamilton, Duke University; 
Thomas W. Hazlett, George Mason University School of Law; 
Hubbard Broadcasting Inc; 
Independent Film & Television Alliance; 
Independent Press Association; 
Journal Broadcast Group (Tucson, Arizona, radio and television 
stations); 
JPMorgan Chase & Company; 
Michael L. Katz, University of California, Berkeley; 
KHRR (Tucson, Arizona, television station); 
KMSB, KTTU (Tucson, Arizona, television stations); 
KTTB-FM (Edina, Minnesota, radio station); 
KUAT (Tucson, Arizona, television station); 
KVOA (Tucson, Arizona, television station); 
KWBA (Tucson, Arizona, television station); 
KXCI (Tucson, Arizona, radio station); 
Mark Lloyd, Center for American Progress; 
Robert W. McChesney, University of Illinois at Urbana- Champaign; 
The McClatchy Company; 
Media Access Project; 
Media General, Inc; 
Minority Media and Telecommunications Council; 
Philip M. Napoli, Fordham University School of Business; 
Nashville Community Newspaper Alliance; 
Solidus Co., NashvillePost.com; 
National Association for Multi-Ethnicity in Communications; 
National Association of Black Owned Broadcasters; 
National Association of Broadcasters; 
National Cable and Telecommunications Association; 
National Federation of Community Broadcasters; 
National Hispanic Media Coalition; 
National Telecommunications and Information Administration; 
NBC Universal; 
News Corporation; 
Newspaper Association of America; 
The Newspaper Guild-Communications Workers of America; 
The New York Times Company; 
Nexstar Broadcasting Group, Inc; 
Eli M. Noam, Columbia University; 
NRG Media; 
Bruce M. Owen, Stanford University; 
Parents Television Council; 
Pennsylvania Public Television Network; 
The Philadelphia Daily News; 
The Philadelphia Inquirer; 
Project for Excellence in Journalism; 
Prometheus Radio Project; 
Prudential Financial, Inc; 
Publishers of Tucson, Arizona, area newspapers: Tucson Weekly, Inside 
Tucson Business, The Daily Territorial, Vail Sun (Wick Communications), 
Explorer, and Desert Leaf; 
The Pulse (Chattanooga, Tennessee); 
Reclaim the Media; 
LaVonda N. Reed-Huff, Syracuse University School of Law; 
The Seattle Times Company; 
ShootingStar Broadcasting, WZMY-TV (Derry, New Hampshire); 
Sinclair Broadcasting Group, Inc; 
South Central Radio Group, WJXA, WCJK (Nashville, Tennessee, radio 
stations); 
Adam D. Thierer, The Progress and Freedom Foundation; 
Time Warner, Inc; 
Times-Shamrock Communications; 
Tribune Company; 
Tucson Citizen; 
Joel Waldfogel, The Wharton School, University of Pennsylvania; 
The Walt Disney Company; 
The Washington Post Company; 
WDEF, WDOD (Chattanooga, Tennessee, radio stations); 
Steven S. Wildman, Michigan State University; 
Women in Cable Telecommunications; 
WSMV (Nashville, Tennessee, television station); 
WTCI (Chattanooga, Tennessee, television station); 
WTVC (Chattanooga, Tennessee, television station); 
WTVF (Nashville, Tennessee, television station); 
XM Satellite Radio, Inc; 
Young Broadcasting, Inc. 

Source: GAO. 

[End of table] 

[End of section] 

Appendix IV: Comments from the Federal Communications Commission: 

Federal Communications Commission: 
Washington, D.C. 20554: 

February 15, 2008: 

Ms. JayEtta Z. Hecker: 
Director, Physical Infrastructure Issues: 
United States Government Accountability Office: 
Washington, D.C. 20548: 

Re: GAO-08-383: 

Dear Ms. Hecker: 

Here are our comments on a draft copy of GAO-08-383, "Economic Factors 
Influence the Number of Media Outlets in Local Markets, While Ownership 
by Minorities and Women Appears Limited and Is Difficult to Assess." 
The report examines the current state of media ownership and recommends 
that the Commission take steps to improve the reliability of its data 
on the gender, race, and ethnicity of broadcast outlet owners. It also 
concludes that, while there are weaknesses in the Commission's current 
data, ownership of broadcast outlets by women and minorities appears 
limited. 

Strengthening the diverse and robust marketplace of ideas that is 
essential to our democracy has long been a fundamental Commission goal. 
I would like to emphasize, as the report acknowledges, that on December 
18, 2007, the Commission adopted a Report and Order and Third Further 
Notice of Proposed Rulemaking, which includes several measures designed 
to foster participation in the broadcasting industry by new entrants 
and small businesses, including minority- and women-owned businesses, 
by expanding ownership opportunities and increasing access to capital. 
For example, the item: 

* Affords eligible entities â an entity that would qualify as a small 
business consistent with Small Business Administration ("SBA") 
standards for its industry grouping, based on revenue â that acquire an 
expiring construction permit, additional time to build out the 
facility; 

* Modifies the Commission's equity/debt plus attribution standard, to 
facilitate investment in eligible entities; 

* Encourages local and regional banks to participate in SBA-guaranteed 
loan programs to facilitate broadcast and telecommunications-related 
transactions. 

* The item also specifically seeks comment on methods for enhancing the 
accuracy and reliability of data collection on the gender, race, and 
ethnicity of broadcast licensees. The Commission will take appropriate 
action after reviewing the comments received. 

I would also like to make a few observations concerning the report's 
description of the rules governing ownership of broadcast outlets 
adopted by the Commission on December 18, 2007. First and foremost, 
while the report states that the Commission "adopted several revisions 
to its media ownership rules," only the rule banning 
newspaper/broadcast cross-ownership was, in fact, revised. The 
Commission retained all other rules as they currently are in effect. 
Moreover, the report fails to note that applicants seeking to overcome 
a negative presumption about a proposed newspaper/broadcast combination 
need to demonstrate by clear and convincing evidence that post-merger, 
the merged entity will increase the diversity of independent news 
outlets (e.g., separate editorial and news coverage decisions) and 
increase competition among independent news sources in the relevant 
market. The Commission will use the following factors to inform its 
evaluation: (1) the level of concentration in the DMA; (2) a showing 
that the combined entity will significantly increase the amount of 
local news in the market; (3) a showing that the newspaper and the 
broadcast outlets each will continue to employ its own news and 
editorial staff and that each will exercise its own independent news 
judgment; and (4) the financial condition of the newspaper or broadcast 
station in the proposed combination, and if the newspaper or station is 
in financial distress, the proposed owner's commitment to invest 
significantly in newsroom operations. 

Second, the 39 percent national television ownership cap is statutory, 
having been enacted as part of the Consolidated Appropriations Act, 
2004. Similarly, the numerical limits contained in the local radio 
ownership rule track the numerical limits passed by Congress in the 
Telecommunications Act of 1996. 

Thank you for the opportunity to comment on the draft report. 

Sincerely,

Signed by: 

Monica Desai: 
Chief, Media Bureau: 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

JayEtta Z. Hecker, (202) 512-2834 or [email protected]: 

Staff Acknowledgments: 

Individuals making key contributions to this report include Michael 
Clements (Assistant Director), Carl Barden, Matt Barranca, Steve Brown, 
Ted Burik, Elizabeth Eisenstadt, Brandon Haller, Madhav Panwar, 
Friendly Vang-Johnson, and Mindi Weisenbloom. 

[End of section] 

Footnotes: 

[1] Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56, 
Section 202(h). 

[2] Prometheus Radio Project v. FCC, 373 F.3d 372 (3rd Cir. 2004), 
cert. denied, 545 U.S. 1123 (2005). The court had earlier stayed FCC's 
rules and continued the stay during the review of the rules on remand. 
The court, in rehearing, lifted its stay of a portion of the rules that 
pertained to the methodology used to define local radio markets. 

[3] GAO, Telecommunications: Preliminary Information on Media 
Ownership, GAO-08-330R (Washington, D.C.: Dec. 14, 2007). 

[4] According to Nielsen, a DMA consists of all counties whose largest 
viewing share is given to stations of the same market area. There are 
210 nonoverlapping DMAs that cover the entire continental United 
States, Hawaii, and parts of Alaska. 

[5] These markets are Miami/Fort Lauderdale, Florida (the 16th largest 
market); Charlotte, North Carolina (26); Nashville, Tennessee (30); 
Wilkes Barre/Scranton, Pennsylvania (53); Springfield, Missouri (76); 
Chattanooga, Tennessee (86); Cedar Rapids/Waterloo/Iowa City/Dubuque, 
Iowa (89); Myrtle Beach/Florence, South Carolina (105); Terre Haute, 
Indiana (151); Sherman, Texas/Ada, Oklahoma (161); Jackson, Tennessee 
(174); and Harrisonburg, Virginia (181). 

[6] These markets are New York, New York (1); Los Angeles, California 
(2); and Chicago, Illinois (3). 

[7] This market is Tucson, Arizona (70). 

[8] We did not review whether the agreements fell within the 
requirements of FCC's attribution rules. 

[9] To prepare its reports, Free Press relied on data from FCC-- 
including its database and Form 323 filings--and BIA Media Access Pro. 
The Free Press findings of relatively limited levels of ownership by 
minorities and women are generally consistent with the findings in 
three studies commissioned by FCC and a 2000 NTIA report. We did not 
evaluate the reliability of the Free Press reports. 

[10] 2006 Quadrennial Regulatory Review - Review of the Commission's 
Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 
202 of the Telecommunications Act of 1996, Report and Order and Order 
on Reconsideration, FCC 07-216, 2008 FCC LEXIS 1083 (released Feb. 4, 
2008). 

[11] The Commission's Cable Horizontal and Vertical Ownership Limits, 
Fourth Report and Order and Further Notice of Proposed Rulemaking, FCC 
07-219, 2008 FCC LEXIS 1254 (released Feb. 11, 2008). 

[12] "FCC Adopts Rules to Promote Diversification of Broadcast 
Ownership," FCC News Release, 2007 LEXIS 9663, Dec. 18, 2007. 

[13] Broadcast Localism, Report on Broadcast Localism and Notice of 
Proposed Rulemaking, FCC 07-218, 2008 FCC LEXIS 809 (released Jan. 24, 
2008). 

[14] See FY 2004 Consolidated Appropriations Act, Pub. L. No. 108-199, 
118 Stat. 3 et seq., Section 629. 

[15] "Grade B" is an FCC-defined measure of signal strength pertaining 
to the availability of an over-the-air signal with a rooftop antenna. 

[16] There is no limit on the number of AM or FM radio stations that a 
single entity can own nationwide. See Pub. L. No. 104-104, 110 Stat. 
56, Section 202(a)(c). 

[17] For purposes of this rule, major media voices include major 
newspapers and full-power television stations. 

[18] There are two limited circumstances in which this negative 
presumption would be reversed: (1) the newspaper or broadcaster is 
failed or failing or (2) the proposed transaction results in a new 
source of a significant amount of local news in a market. 

[19] Similar to Grade B contour, "Grade A" contour is a measure of 
signal strength, but is generally a smaller geographic area than the 
Grade B contour. 

[20] Newspaper-broadcast combinations that predate imposition of the 
existing ban are permitted. Companies also may seek a waiver from FCC 
to permit a newspaper-broadcast combination. 

[21] For purposes of this rule, media voices include independently 
owned and operating full-power television stations, radio stations, 
daily newspapers with a circulation that exceeds 5 percent of the 
households in the DMA, one cable system if that system is generally 
available to households in the DMA, and independently owned out-of- 
market radio stations with a minimum share as reported by Arbitron. 

[22] Time Warner Entertainment Co. v. FCC, 240 F3d 1126 (D.C. Cir. 
2001). 

[23] In addition to full-power television stations, there were 
approximately 568 Class A and 2,227 low-power television stations in 
2006. 

[24] In addition to full-power radio stations, there were approximately 
770 low-power FM stations in 2006. 

[25] Thus, nearly 95 million households subscribed to an MVPD service 
in 2006. By way of comparison, according to Nielsen Media Research, 
there were approximately 111 million television households in 2006. 

[26] See Implementation of Section 3 of the Cable Television Consumer 
Protection and Competition Act of 1992, Statistical Report on Average 
Prices for Basic Service, Cable Programming Services, and Equipment, 21 
FCC Rcd 15087 (2006). 

[27] Review of the Syndication and Financial Interest Rules, 10 FCC 
12165 (1995). 

[28] Each of these companies owns television stations that reach more 
than 20 percent of the nation's television households. 

[29] See Annual Assessment of the Status of Competition in the Market 
for the Delivery of Video Programming, 21 FCC Rcd 2503 (2006) (FCC 06- 
11). 

[30] DBS companies DirecTV and EchoStar have approximately 16.0 and 
13.1 million subscribers, respectively, placing these companies in the 
top 4 MVPD providers with Comcast and Time Warner. 

[31] These two separate companies are controlled by National Amusement. 

[32] On Nov. 13, 2007, FCC granted, subject to conditions, Clear 
Channel's application to assign its television stations to Newport 
Television LLC, which is wholly owned by affiliates of Providence 
Equity Partners, Inc. 

[33] According to the 2006 American Community Survey, nonwhite 
households account for 36 percent of households in the New York City 
metropolitan statistical area (MSA), 43 percent in the Los Angeles MSA, 
and 31 percent in the Chicago MSA. 

[34] Disposable income refers to effective buying income--a bulk 
measurement of market potential indicating the ability to buy. Average 
household effective buying income figures are from the Television 
Bureau of Advertising. 

[35] We defined a cable overbuilder as a second cable system competing 
directly with an incumbent cable operator. 

[36] For example, WZRC 1480 AM in New York broadcasts in Cantonese, 
WNVR 1030 AM in Chicago broadcasts in Polish, and KYPA 1230 AM in Los 
Angeles broadcasts in Korean. 

[37] The Tribune Company owns a daily newspaper and one or more 
broadcast outlets in both Los Angeles and Chicago. News Corporation 
owns two television stations and a daily newspaper in New York. 

[38] We defined large media markets as those containing between 500,000 
and 3 million households. 

[39] The Charlotte, Nashville, and Wilkes Barre/Scranton markets do not 
have cable competition. 

[40] We defined medium-size media markets as those containing between 
150,000 and 500,000 households. 

[41] We are using the Nielsen DMA for the case study analyses. In some 
instances, a geographically large DMA is split up into several smaller 
Arbitron radio markets. 

[42] We defined small media markets as those containing fewer than 
150,000 households. 

[43] Under FCC's attribution rules, a time brokerage agreement (also 
know as a local marketing agreement) is the sale by a licensee of 
discrete blocks of time to a "broker" that supplies the programming to 
fill that time and sell the commercial spot announcements in it. A 
joint sales agreement is an agreement with a licensee of a "brokered 
station" that authorizes a "broker" to sell advertising time for the 
"brokered station." See 47 C.F.R. 73.3555. 

[44] We did not review whether the agreements fell within the 
requirements of the attribution rules. The attribution rules determine 
what interests are cognizable under FCC's broadcast ownership rules; 
the attribution rules are not ownership limitations in themselves. 
These rules impose an affirmative obligation on licensees to determine 
whether a particular agreement is attributable and, if it is, to file 
the agreement with FCC. 

[45] The Newspaper Preservation Act of 1970 requires written consent of 
the Attorney General of the United States for future joint operating 
arrangements. Prior to granting such approval, the Attorney General 
shall determine that not more than one of the newspaper publications 
involved in the arrangement is a publication other than a failing 
newspaper, and that approval of such arrangement would effectuate the 
policy and purpose of the Act. See 15 U.S.C. Section 1801 et seq. 

[46] 1998 Biennial Regulatory Review--Streamlining of Mass Media 
Applications, Rules, and Processes; Policies and Rules Regarding 
Minority and Female Ownership of Mass Media Facilities; Report and 
Order, 13 FCC Rcd. 23056, 23096-23097 (1998). 

[47] The gender, race, and ethnicity of owners with attributable 
interest must be provided on a station's Form 323. FCC defines each 
officer, director, and owner of stock accounting for 5 percent or more 
of the issued and outstanding voting stock of a corporation as having 
an attributable interest. Where the 5 percent stock owner is itself a 
corporation, each of its stockholders, directors, and "executive" 
officers (president, vice president, secretary, treasurer, or their 
equivalents) is considered a holder of an attributable interest, unless 
an exhibit establishing that an individual director or officer will not 
exercise authority or influence in areas that will affect the corporate 
respondent or the station is submitted. 

[48] For its broadcast ownership proceeding, FCC commissioned three 
studies assessing the status of minority and women broadcast ownership; 
all three studies explored the adequacy of FCC's Form 323 data records 
and found the aggregate data to be unreliable. 

[49] Noncommercial stations are required to file a Form 323-E, which 
does not collect data on gender, race, or ethnicity. 

[50] "FCC Adopts Rules to Promote Diversification of Broadcast 
Ownership," FCC News Release, Dec. 18, 2007. 

[51] Free Press, Out of the Picture: Minority & Female TV Station 
Ownership in the United States (Washington, D.C., October 2006). 

[52] Free Press, Off the Dial: Female and Minority Radio Station 
Ownership in the United States (Washington, D.C., June 2007). 

[53] Ivy Planning Group LLC, Who's Spectrum Is It Anyway?: Historical 
Study of Market Entry Barriers, Discrimination and Changes in Broadcast 
and Wireless Licensing 1950 to Present (Rockville, MD, 2000). 

[54] U.S. Department of Commerce, Changes, Challenges, and Charting New 
Courses: Minority Commercial Broadcast Ownership in the United States 
(Washington, D.C., 2000). 

[55] FCC has recommended the adoption of a tax deferral program to 
replace the former tax certificate program that would focus on socially 
and economically disadvantaged businesses and extend the program to 
telecommunications. 

[56] Seven of 16 case study markets had more than one daily newspaper. 
However, this ratio is indicative of the selection process for our case 
study markets in which we selected the three largest DMAs (New York, 
Los Angeles, and Chicago),which each had more than one daily newspaper, 
as well as Tucson, which had a joint operating agreement between two 
daily newspapers. In markets with more than one daily newspaper, we did 
not evaluate circulation share. 

[57] Case study markets with operating agreements were Nashville (1), 
Wilkes Barre/Scranton (4), Springfield (2), Myrtle Beach/Florence (1), 
and Terre Haute (1). We also identified two operating agreements for 
radio stations in Nashville and Harrisonburg. 

[58] In smaller urban areas, we defined "close listening distance" as a 
station which was located within 20 miles of the city or a station 
located in the Arbitron radio market whose signal contour band covered 
the urban area. For very large cities, such as Miami, Los Angeles, 
Chicago, and New York, we used just the signal contour band coverage 
criteria. 

[59] These towns and counties are Sherman, Grayson County, Texas; Ada, 
Pontotoc County, Oklahoma; Ardmore, Carter County, Oklahoma; and 
Durant, Bryan County, Oklahoma. 

[60] An Arbitron radio market is a geographically contiguous area in 
which the listnership of radio stations is surveyed for ratings. 

[61] National Ethnic Media Directory, online version (San Francisco, 
California: New America Media, Pacific News Service, 2007). [hyperlink, 
http://news.newamericamedia.org/news/view_custom.html?custom_page_id=263
] (downloaded Sept. 28, 2007, through Nov. 6, 2007). 

[62] When we refer to "disposable" income, we mean effective buying 
income, and our source for this information is the Television Bureau of 
Advertising. The household average effective buying income is a bulk 
measurement of market potential that indicates the ability to buy and 
is essential for selecting, comparing, and grouping markets. 

[63] That is, a single owner within this particular market only. Most 
of the commercial radio station owners in the New York City DMA also 
own numerous stations elsewhere in the United States. 

[64] Bear Stearns & Co. Inc., Bear Stearns Radio Fact Book 2006 (New 
York, NY, 2006), p. 137. 

[65] The eight primary commercial English-language broadcast television 
networks are ABC, CBS, CW, FOX, ION, MMT, NBC, and TBN. 

[66] Determining the number of radio stations in this DMA was difficult 
because the DMA is small (too small for Arbitron to rate stations 
within it), yet it is close enough to core urban areas in surrounding 
DMAs, including the Oklahoma City, Tulsa, and Dallas/Fort Worth 
markets, to receive signals from stations that are physically located 
in these markets. We identified the four most populous counties in the 
Sherman/Ada DMA and selected the largest town within each of these four 
counties--Sherman, Grayson County, Texas; Ada, Pontotoc County, 
Oklahoma; Ardmore, Carter County, Oklahoma; and Durant, Bryan County, 
Oklahoma. Then we counted all radio stations within 20 miles of each 
town and checked the list against an atlas to make sure the station was 
physically located in a county within this DMA. 

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