[Federal Register Volume 67, Number 197 (Thursday, October 10, 2002)]
[Notices]
[Pages 63090-63092]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-25763]
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FEDERAL COMMUNICATIONS COMMISSION
[MM Docket No. 02-236; FCC 02-236]
Hilco Communications, Inc. and Cumulus Licensing Corp.
AGENCY: Federal Communications Commission.
ACTION: Notice.
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SUMMARY: In this document, the FCC designates the application to assign
the license of radio station KAYD(FM), Silsbee, Texas, from Hilco
Communications, Inc. (``Hilco'') to Cumulus Licensing Corp.
(``Cumulus''). The Commission cannot find, based on the record, that
grant of this application is consistent with the public interest,
convenience, and necessity. Accordingly, pursuant to 47 U.S.C. 309(e),
the Commission designates the application for hearing to determine
whether the public interest, convenience, and necessity will be served
by grant of the application.
DATES: See SUPPLEMENTARY INFORMATION section for document filing dates.
ADDRESSES: Please file documents with the Investigations and Hearing
Division, Enforcement Bureau, Federal Communications Commission, Room
3-B431, 445 12th Street, SW., Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: Charles W. Kelley, Chief,
Investigations and Hearing Division, Enforcement Bureau, at (202) 418-
1420.
SUPPLEMENTARY INFORMATION: This is a summary of the Federal
Communications Commission's Hearing Designation Order, MM Docket No.
02-236, adopted on August 15, 2002, and released on September 5, 2002.
The full text is available for inspection and copying during normal
business hours in the FCC Reference Information Center, Room CY-A257,
445 12th Street, SW., Washington, DC 20554. The full text may also be
purchased from the Commission's copy contractor, Qualex International,
Room CY-B402, 445 12th Street, SW., Washington, DC 20554, telephone
(202) 863-2983, facsimile (202) 863-2898, or via e-mail at
[email protected], or may be viewed via the internet at: http://
www.fcc.gov/Document-- Indexes/Media/2002--index--MB--Order.html.
Alternative formats are available to persons with disabilities by
contacting Martha Contee at (202) 418-0260 or TTY (202) 418-2555.
Synopsis of the Order
1. In March 1996, the Commission relaxed the numerical station
limits in its local radio ownership rules in accordance with Congress's
directive in section 202(b) of the Telecommunications Act of 1996.
Since then, the Commission has received applications proposing
transactions that would comply with the new limits, but that
nevertheless could produce concentration levels that raised significant
concerns about the potential impact on the public interest. In response
to these concerns, the Commission concluded that it has an independent
obligation to consider whether a proposed pattern of radio ownership
that complies with the local radio ownership limits would otherwise
have an adverse competitive effect in a particular local radio market
and thus would be inconsistent with the public interest. In August
1998, the Commission also began flagging public notices of radio
station transactions that would result in one entity controlling 50
percent or more of the advertising revenues in the relevant Arbitron
radio market or two entities controlling 70 percent or more of the
advertising revenues in that market. On November 8, 2001, we adopted
the Notice of Proposed Rulemaking in MM Docket No. 01-317, 16 FCC Rcd
19861, 66 FR 63986, December 11, 2001 (``Local Radio Ownership NPRM'').
We expressed concern that our current policies on local radio ownership
did not adequately reflect current industry conditions and had led to
unfortunate delays in the processing of assignment and transfer
applications. Accordingly, we adopted the Local Radio Ownership NPRM to
undertake a comprehensive examination of our rules and policies
concerning local radio ownership and to develop a new framework that
will be more responsive to current marketplace realities while
continuing to address our core public interest concerns of promoting
diversity and competition. In the Local Radio Ownership NPRM, we also
set forth an interim policy to guide our actions on radio assignment
and transfer of control applications pending a decision in that
proceeding. Under our interim policy, we presume that an application
that falls below the 50/70 screen will not raise competition concerns
unless a petition to deny
[[Page 63091]]
raising competition issues is filed. For applications identified by the
50/70 screen, the interim policy directs the Commission's staff to
conduct a public interest analysis, including an independent
preliminary competition analysis, and sets forth generic areas of
inquiry for this purpose. The interim policy also sets forth timetables
for staff recommendations to the Commission for the disposition of
cases that may raise competition concerns.
2. On July 31, 2001, Hilco and Cumulus filed an application
proposing to assign the license of station KAYD-FM (formerly KLOI(FM))
from Hilco to Cumulus. The application was unopposed. Cumulus currently
is the licensee of four stations in the Beaumont-Port Arthur, Texas
Arbitron metro: KIKR(AM), Beaumont, Texas, KQHN(AM), Nederland, Texas;
KQXY-FM, Beaumont, Texas; and KTCX(FM), Beaumont, Texas.
3. Section 310(d) of the Communications Act of 1934, as amended
(the ``Communications Act''), 47 U.S.C. 310(d), requires the Commission
to find that the public interest, convenience and necessity would be
served by the assignment of Hilco's radio broadcast license to Cumulus
before the assignment may occur. Under the interim policy set forth in
our Local Radio Ownership NPRM, we conduct a public interest analysis,
including but not limited to an independent preliminary competition
analysis of the proposed transaction based on publicly available
information and information in the Commission's records. Under the
interim policy, to decide whether a proposed assignment serves the
public interest, we first determine whether it complies with the
specific provisions of the Communications Act, other applicable
statutes, and the Commission's rules, including our local radio
ownership rules. If it does, we then consider any potential public
interest harms of the proposed transaction as well as any potential
public interest benefits to determine whether, on balance, the
assignment serves the public interest. The Commission's analysis of
public interest benefits and harms includes an analysis of the
potential competitive effects of the transaction, as informed by
traditional antitrust principles. However, the Commission's public
interest evaluation is not limited to competition concerns but
necessarily encompasses the broad aims of the Communications Act. These
broad aims include, among other things, ensuring the existence of an
efficient, nationwide radio communications service available to
everyone and promoting locally oriented service and diversity in media
voices. Our public interest analysis therefore includes assessing
whether the transfer will affect the quality of radio services or
responsiveness to the local needs of the community, and whether it will
result in the provision of new or additional services to listeners.
Thus, under our interim policy, where a proposed transaction raises
concerns about economic concentration, we will consider evidence that
the particular circumstances of a case may mitigate any adverse impact
that might otherwise result, as well as any evidence of benefits to
radio listeners that might result from the proposed transaction.
Ultimately, it is the potential impact of the transaction on listeners
that will determine whether we can find that, on balance, grant of a
particular radio station assignment or transfer of control application
serves the public interest.
4. Having concluded that the proposed transaction is consistent
with the numerical limits set forth in our ownership rules, we turn to
our competition analysis. Here, we find that the proposed transaction
would create a market in which the combined market share of the top two
group owners in the market would be 94.5%. We find that Cumulus has
failed to demonstrate particular circumstances in this market
sufficient to overcome a concern that this level of economic
concentration in this market will harm the public interest. To the
extent Cumulus presents generic arguments challenging the parameters of
our current competition analysis, we will address such concerns in the
context of the Local Radio Ownership NPRM and need not consider them
here. Rather, we look only to the record of this case to determine
whether there are unique facts that persuade us that grant of this
assignment application would serve the public interest despite the
apparent economic concentration it will create. On the basis of the
information before us, we are unable to make the required finding that
the public interest, convenience and necessity will be served by
granting the subject application. Accordingly, we will designate the
assignment application for hearing to determine, pursuant to 47 U.S.C.
309(e), and based on the evidence to be adduced at hearing, whether the
public interest, convenience and necessity will be served by the grant
of the application.
5. We direct the Administrative Law Judge (``ALJ'') to examine in
an evidentiary hearing the particular circumstances of the Beaumont-
Port Arthur, Texas metro to determine whether the factual assumptions
in Section III.C. of the Hearing Designation Order are correct. We
further direct the ALJ to determine, in light of his or her
conclusions, whether the transaction is likely to cause any
anticompetitive harms, and to determine what, if any, public benefits
would accrue from this transaction. Finally, we direct the ALJ to apply
these findings to determine whether, on balance, grant of the
application would serve the public interest.
6. Pursuant to 47 U.S.C. 309(e), the application to assign the
license of station KAYD-FM, Silsbee, Texas, from Hilco to Cumulus is
designated for hearing. Unless the parties timely file the joint
election to defer as set forth below, the Hearing shall be at a time
and place to be specified in a subsequent Order, to determine, in light
of the evidence to be presented in the hearing, whether the public
interest, convenience and necessity would be served by the grant of the
above-captioned assignment application (File No. BALH-20010731ACB).
7. Pursuant to 47 U.S.C. 309(e), the burden of proof with respect
to the introduction of evidence and the burden of proof with respect to
the issue specified in this Order shall be upon Hilco and Cumulus, the
applicant parties in this proceeding.
8. The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, will send copies of this Order to all
parties by Certified Mail--Return Receipt Requested.
9. To defer further consideration of the application to assign the
license of station KAYD-FM, Silsbee, Texas, from Hilco to Cumulus in
accordance with the interim policy, Hilco and Cumulus must file a joint
election to defer consideration of the application. Such election must
be filed within 20 days of the mailing of this Order pursuant to
Paragraph 8 above.
10. A copy of each document filed in this proceeding subsequent to
the date of adoption of this Order must be served on the counsel of
record appearing on behalf of the Chief, Enforcement Bureau. Parties
may inquire as to the identity of such counsel by calling the
Investigations and Hearings Division of the Enforcement Bureau at (202)
418-1420. Such service must be addressed to the named counsel of
record, Investigations and Hearings Division, Enforcement Bureau,
Federal Communications Commission, 445 12th Street, SW, Room 3-B431,
Washington, DC 20554.
11. No less than 15 days of the mailing of the Order pursuant to
Paragraph 8 above, the parties may amend their application or file such
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other information with the Media Bureau as they deem relevant to
ameliorate the competition concerns identified in this Order.
12. To avail themselves of the opportunity to be heard, Hilco and
Cumulus, pursuant to 47 CFR 1.221(c) and 1.221(e), in person or by
their respective attorneys, must file, in triplicate, a written
appearance stating an intention to appear on the date fixed for the
hearing and present evidence on the issues specified in this Order.
Such written appearance shall be filed within 20 days of the mailing of
this Order pursuant to Paragraph 8 above. Pursuant to 47 CFR 1.221(c)
of the Commission's rules, if the parties fail to file an appearance
within the specified time period, the assignment application will be
dismissed with prejudice for failure to prosecute.
13. The applicants, pursuant to 47 U.S.C. 311(a)(2), and 47 CFR
73.3594 must give notice of the hearing within the time and in the
manner prescribed, and must advise the Commission of the publication of
such notice as required by 47 CFR 73.3594(g).
14. The application to assign the licenses of station KAYD-FM,
Silsbee, Texas, from Hilco to Cumulus will be held in abeyance pending
the outcome of this proceeding.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-25763 Filed 10-9-02; 8:45 am]
BILLING CODE 6712-01-P