FCC ACTS ON CONTROVERSIAL RADIO LICENSE TRANSFERS
Despite sharply divided Commission, FCC Mass Media Bureau approved 32 radio station license transfers in 26 markets, clearing 75% of backlog of long-standing license transfer applications. Approval sparked strong dissenting comments by Comrs. Ness and Tristani, and support by Chmn. Powell and Comr. Furchtgott-Roth. Ness said FCC should have begun systematic review of FCC licensing process at same time that decisions were announced, but Powell said implementation could be reviewed as part of pending rulemaking on radio market definitions. Stations generally were in medium and small markets. NAB Pres. Edward Fritts called announcement of action on radio licenses “welcome news.”
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With backlogs one of Powell’s major concerns, he told NAB group Mon. that question about FCC delays was timely since FCC acted on 75% of pending transfer applications. One of his goals, he said, is to prevent Commission from “avoiding inaction” on applications and petitions.
Approval of license transfers “confounds the Commission’s primary obligation to implement a federal broadcast communications policy that serves the public interest,” Tristani said, and “departed without reason from its prior standards and… set the public interest adrift on uncharted seas.” Ness said the approvals showed “the critical need for an over-arching Commission policy for processing radio license transfer applications fairly and expeditiously.”
However, Furchtgott-Roth said FCC didn’t go far enough. He said Commission also should have acted on nearly dozen other pending applications. He said delay in acting on license transfers, based on FCC policy of “flagging” some applications, was “government at its worst.” He said Telecom Act meant that if station transfer complied with Act’s numerical limits “this Commission’s ‘competitive’ analysis is at an end.”
Powell acknowledged that FCC had “struggled to find a legally sustainable basis for disposing of these cases,” noting that radio consolidation had been “unprecedented” since Telecom Act. Concentration concerns caused Mass Media Bureau to “flag” transactions that would cause high levels of concentration. Tristani said virtually all of deals approved Mon. would give 2 stations combined 75% of local ad market, and 2 of markets would end up with 2 stations controlling 100%.
Question has been whether Commission has authority to conduct separate competitive analysis, Powell said, and action has been delayed while it tried to answer question. He said he didn’t believe public interest was served by inaction, so he asked Mass Media Bureau to decide cases: “These cases did not warrant further delay.” Bureau will continue processing rest of backlog over next several weeks, he said. Furchtgott-Roth noted that some of applications had been pending since 1998.
Any FCC policy decision on numerical limits on station ownership must comply with Telecom Act, Powell said: “If the Commission determines that further competitive analysis is warranted, we will consider such changes consistent with the Act, and in a proceeding that affords full and open debate.”
Policy of “flagging” some applications was “arbitrary decision of a bureau in an agency unanswerable to any law or authority but its own,” Furchtgott-Roth said. “No rules for flagging were ever written; no rules were proposed for public comment [or] reviewed by the Commission; no rules were available for parties to review… and no rules were available to challenge in court.” He said Commission “has no power to second-guess” limits Congress set in Telecom Act.
Tristani said license transfers “appear to flatly contravene the Commission’s duty to ensure [they] serve the public interest.” She said Telecom Act didn’t remove FCC obligation to conduct public interest analysis, and approvals “raise a significant question whether the FCC has a coherent approach to determine if the public interest is served when reviewing competitive concerns in the broadcast radio context.”
Transfer approvals underscore both “breathtaking consolidation” in radio and “the critical need for an over-arching Commission policy for processing radio license transfer applications fairly and expeditiously,” Ness said. She agreed Commission still must make public interest determination on transfers, although she acknowledged it would be “inequitable” to delay pending actions while FCC devised new merger review methodology.
Actions “should not be viewed as the beginning of carte blanche approvals” of station transfers, Ness warned repeatedly, “but rather as the end of undue government delay… I sound the alarm over the growing levels of local radio ownership concentration. Applicants have pushed the regulatory envelope beyond recognition.”