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FCC Releases Notice of Proposed Rulemaking on Media Ownership Rules

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Released: December 22, 2011

Federal Communications Commission

FCC 11-186

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

2010 Quadrennial Regulatory Review – Review of
)
MB Docket No. 09-182
the Commission’s Broadcast Ownership Rules and
)
Other Rules Adopted Pursuant to Section 202 of
)
the Telecommunications Act of 1996
)
)

Promoting Diversification of Ownership
)
MB Docket No. 07-294
In the Broadcasting Services
)

NOTICE OF PROPOSED RULEMAKING

Adopted: December 22, 2011

Released: December 22, 2011

Comment Date: [45] days after publication in the Federal Register
Reply Comment Date: [75] days after publication in the Federal Register

By the Commission: Commissioner Copps approving in part, dissenting in part and issuing a statement;
Commissioner McDowell approving in part, concurring in part and issuing a
statement; and Commissioner Clyburn issuing a statement.

TABLE OF CONTENTS

Heading
Paragraph #
I.
INTRODUCTION .................................................................................................................................. 1
II. POLICY GOALS ................................................................................................................................. 10
III. MEDIA OWNERSHIP RULE PROPOSALS...................................................................................... 25
A. Local Television Ownership Rule.................................................................................................. 25
1. Introduction ............................................................................................................................. 25
2. Background.............................................................................................................................. 28
3. Discussion................................................................................................................................ 32
B. Local Radio Ownership Rule......................................................................................................... 60
1. Introduction ............................................................................................................................. 60
2. Background.............................................................................................................................. 63
3. Discussion................................................................................................................................ 67
C. Newspaper/Broadcast Cross-Ownership Rule ............................................................................... 84
1. Introduction ............................................................................................................................. 84
2. Background.............................................................................................................................. 92
3. Discussion................................................................................................................................ 96
D. Radio/Television Cross-Ownership Rule..................................................................................... 118
1. Introduction ........................................................................................................................... 118
2. Background............................................................................................................................ 120
3. Discussion.............................................................................................................................. 123
E. Dual Network Rule ...................................................................................................................... 136
1. Introduction ........................................................................................................................... 136
2. Background............................................................................................................................ 138
3. Discussion.............................................................................................................................. 139

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IV. DIVERSITY ORDER REMAND/ELIGIBLE ENTITY DEFINITION ............................................ 147
V. MEDIA OWNERSHIP STUDIES ..................................................................................................... 171
A. Studies Relating to Competition .................................................................................................. 173
B. Studies Relating to Localism ....................................................................................................... 179
C. Studies Relating to Diversity ....................................................................................................... 185
D. Study Relating to Minority and Women Ownership Issues......................................................... 193
VI. ATTRIBUTION MATTERS.............................................................................................................. 194
VII. PROCEDURAL MATTERS............................................................................................................. 209
VIII. ORDERING CLAUSE..................................................................................................................... 217
APPENDIX A: Media Ownership Studies
APPENDIX B: Proposed Rules
APPENDIX C: Initial Regulatory Flexibility Analysis

I.

INTRODUCTION

1.
Pursuant to our statutory mandate under the Telecommunications Act of 1996,1 we seek
comment in this Notice of Proposed Rulemaking (“NPRM”) on the Commission’s media ownership rules
and proposed changes thereto. We are required by statute to review our media ownership rules every four
years to determine whether they “are necessary in the public interest as the result of competition.”2 Our
challenge in this proceeding is to take account of new technologies and changing marketplace conditions
while ensuring that our media ownership rules continue to serve our public interest goals of competition,
localism, and diversity. We also are seeking comment on economic studies analyzing the relationship
between local media market structure and the policy goals that underlie the Commission’s media
ownership rules. In addition, we seek comment in this proceeding on the aspects of the Commission’s
2008 Diversity Order3 that the Third Circuit remanded in Prometheus Radio Project v. FCC
(“Prometheus II”).4
2.
The proliferation of broadband Internet and other new technologies has had a dramatic
impact on the media marketplace. Consumers are increasingly turning to online and mobile platforms to
access news content and audio and video programming. For example, in 2010 and in the first quarter of
2011, satellite radio and TV companies, which offer both satellite and online access to content, have


1 Telecommunications Act of 1996, Pub. L. No. 104-104, § 202(h), 110 Stat. 56, 111-12 (1996) (“1996 Act”);
Consolidated Appropriations Act, 2004, Pub. L. No. 108-199, § 629, 118 Stat. 3, 99-100 (2004) (“Appropriations
Act”) (amending Sections 202(c) and 202(h) of the 1996 Act). The media ownership rules subject to this
quadrennial review are the local television ownership rule, the local radio ownership rule, the newspaper/broadcast
cross-ownership rule, the radio/television cross-ownership rule, and the dual network rule. These rules are found,
respectively, at 47 C.F.R. §§73.3555(b), (a), (d), and (c) and 47 C.F.R. §73.658(g).
2 Section 202(h) of the 1996 Act, 47 U.S.C. § 303 note. Section 202(h) of the 1996 Act further requires the
Commission to “repeal or modify any regulation it determines to be no longer in the public interest.” Id. In
Prometheus Radio Project v. FCC, 373 F.3d 372 (3d Cir. 2004) (“Prometheus I”), the Third Circuit concluded that
“necessary in the public interest” is a ‘“plain public interest’ standard under which ‘necessary’ means ‘convenient,’
‘useful,’ or ‘helpful,’ not ‘essential’ or ‘indispensable.’” Id. at 394. The court stated that “the first instruction [of §
202(h)] requires the Commission to take a fresh look at its regulations periodically in order to ensure that they
remain ‘necessary in the public interest.’” Id. at 391. In 2004, Congress revised the then-biennial review
requirement to require such reviews quadrennially. See Appropriations Act § 629, 118 Stat. at 100.
3 Promoting Diversification of Ownership in the Broadcasting Services, MB Docket No. 07-294, Report and Order
and Third Further Notice of Proposed Rulemaking, 23 FCC Rcd 5922 (2008) (“Diversity Order” and “Diversity
Third FNPRM
”).
4 Prometheus Radio Project v. FCC, 652 F.3d 431 (3d Cir. 2011) (“Prometheus II”).
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reported growth in subscribership.5 Similarly, content providers are increasingly looking to the Internet
and other new media platforms to bypass traditional media and reach consumers directly. Social media
sites are empowering individuals to share news and information in real time, becoming tools of social
interaction and revolution throughout the world.
3.
For the broadcast and newspaper industries, the growth of these new technologies both
challenges established business models and provides opportunities to reach new audiences and generate
new revenue streams. Broadcast and newspaper consumption in traditional forms is in decline, and
advertising revenues have been shrinking in recent years. Some broadcast and newspaper outlets have
contracted the size of news staffs in response. These economic realities have sounded an alarm for some
who are concerned that non-traditional media sources are not adequate substitutes for the provision of
local news and information by broadcasters subject to public interest obligations. In voicing such
concerns, some commenters have asserted that the Commission’s media ownership limitations remain
vitally important, as increased consolidation places control of programming choices in the hands of too
few owners, limiting diversity and underserving the needs of local and minority communities.6
4.
In short, the media marketplace is in transition, particularly as a result of broadband
Internet; but new media are not yet available as ubiquitously as traditional broadcast media. Our nation
has not yet reached universal deployment or adoption of broadband. Too much of the country is unserved
or underserved by broadband, and the average broadband speed available to consumers varies in different
areas and lags behind some other nations. Broadband adoption remains under 70 percent, meaning that
tens of millions of Americans do not have access to news and other programming on the Internet.7 Some
parts of the population, including minorities, people with disabilities, and low-income Americans, have
much lower rates of broadband adoption.8 Access to sufficient broadband speeds is critical for consumers
to take full advantage of today’s online programming and applications, including access to media content
through streaming technology and downloading programs. According to one estimate, more than 14
million Americans do not have access to broadband infrastructure that can support today’s applications.9
Much of the content available by streaming and downloads requires minimum broadband speeds. We are
taking important steps to close this digital divide, but much work remains.
5.
The Commission began this proceeding with a series of workshops held from November
2009 through May 2010. Participants in the workshops discussed the scope and content of the review


5 See, e.g., Martin Peers, DirecTV’s Subscriber Growth Stays Aloft, WALL STREET JOURNAL, Nov. 12, 2010,
http://online.wsj.com/article/0,,SB10001424052748703848204575608603486967076,00.html (stating that between
2006 and 2010, the two largest direct broadcast satellite television providers in the United States—DirecTV and
Dish Network—experienced subscriber growth of 21 percent and 12 percent, respectively) (visited Oct. 12, 2011);
Sirius XM Radio Inc., SiriusXM Reports First Quarter 2011 Results (press release), May 3, 2011 (stating that
subscribership for SiriusXM, the largest satellite radio provider in the United States, reached a new high of 20.6
million in the first quarter of 2011, up nine percent over the previous year).
6 See infra note 10 and accompanying text.
7 See Inquiry Concerning the Deployment of Advanced Telecommunications Capability to All Americans in a
Reasonable and Timely Fashion, and Possible Steps to Accelerate Such Deployment Pursuant to Section 706 of the
Telecommunications Act of 1996, as Amended by the Broadband Data Improvement Act, GN Docket No. 10-159,
Seventh Broadband Progress Report and Order on Reconsideration, 26 FCC Rcd 8008, 8010, ¶ 2 n.9 (2011) (stating
that 31.8 percent of U.S. households have not adopted broadband); OMNIBUS BROADBAND INITIATIVE, FCC,
CONNECTING AMERICA: THE NATIONAL BROADBAND PLAN 167 (2010) (“NATIONAL BROADBAND PLAN”), available
at
http://download.broadband.gov/plan/national-broadband-plan.pdf (stating that the national adoption rate is 65
percent).
8 NATIONAL BROADBAND PLAN at 167.
9 Id. at 129.
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process.10 Thereafter the Commission released a Notice of Inquiry (“NOI”) on May 25, 2010, seeking
comment on a wide range of issues to help us determine whether the current media ownership rules
continue to serve our policy goals.11 The NOI sought input on developments in the marketplace since the
last review and on whether we should adopt alternatives to bright-line, sector-specific rules. It also
sought comment on our fundamental goals of competition, localism, and diversity and how to balance
these goals when they conflict. In response, industry participants and representatives, public interest
groups, and members of the public filed a significant number of comments.
6.
To provide data on the impact of market structure on the Commission’s policy goals of
competition, localism, and diversity, the Commission commissioned eleven economic studies, as listed in
Appendix A, which were conducted by outside researchers and Commission staff.12 We previously
released the studies to allow parties additional time to review the data and analyses and now are seeking
formal comment on them herein.13 As discussed in Section II, the Commission reaffirms that its media
ownership rules are necessary to further the Commission’s longstanding policy goals of fostering
competition, localism, and diversity. In particular, the Commission reaffirms that a major goal of the
rules is to encourage the provision of local news, and we invite suggestions about how that goal can be
further achieved.
7.
In Prometheus II, the Court of Appeals for the Third Circuit considered appeals of the


10 The Media Bureau held six public workshops to discuss aspects of the review process. On November 2, 3, and 4,
2009, the Bureau held workshops to discuss the scope and methodology of the proceeding and the analytical
framework the Commission should use for conducting its review. See Media Ownership Workshop - Policy
Scholars’ Panel, http://www.fcc.gov/ownership/workshop-110209.html; Media Ownership Workshop - Public
Interest Group Panel, http://www.fcc.gov/ownership/workshop-110309.html; and Media Ownership Workshop -
Broadcasters & Industry Panel, http://www.fcc.gov/ownership/workshop-110409.html. On January 12, 2010, the
Bureau held a workshop to examine current financial and economic conditions and marketplace factors affecting the
media industry and how the FCC should take them into account in establishing its ownership framework. See Media
Ownership Workshop - Financial & Marketplace Issues, http://www.fcc.gov/ownership/workshop-011210.html. On
January 27, 2010, the Bureau held a workshop to examine how the media ownership rules affect the Commission’s
goal of promoting minority and female ownership and other issues relating to diversity in broadcasting. See Media
Ownership Workshop – Minority & Female Ownership, http://www.fcc.gov/ownership/workshop-012710.html. On
February 23, 2010, the Bureau held a workshop in Columbia, South Carolina on the state of local radio and
television. See Media Ownership Workshop – Local Television & Radio Marketplace Issues,
http://www.fcc.gov/ownership/workshop-022310.html. On April 20, 2010, the Bureau held a workshop in Tampa,
Florida on the impact of newspaper/broadcast cross-ownership in the media marketplace. See Media Ownership
Workshop – Newspaper/Broadcast Cross-Ownership Impact on Competition and Diversity in the Media
Marketplace, http://www.fcc.gov/ownership/workshop-042010.html. On May 21, 2010, the Bureau held a
workshop in Palo Alto, California to discuss the impact of new media on broadcast stations. See Media Ownership
Workshop – The Impact of New Media on Broadcast Stations, http://www.fcc.gov/ownership/workshop-
052110.html. Webcasts of these workshops and comments received in connection with them are included in the
record of this proceeding and are available on the Commission’s media ownership website.
11 See 2010 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
, MB Docket No. 09-182, Notice of
Inquiry, 25 FCC Rcd 6086 (2010) (“NOI”).
12 Media Bureau Announces the Release of Requests for Quotation for Media Ownership Studies and Seeks
Suggestions for Additional Studies in Media Ownership Proceeding
, MB Docket No. 09-182, Public Notice, 25 FCC
Rcd 7514 (Med. Bur. 2010).
13 FCC Releases Five Research Studies on Media Ownership and Adopts Procedures For Public Access to
Underlying Data Sets
, MB Docket No. 09-182, Public Notice, 26 FCC Rcd 8472 (Med. Bur. 2011); FCC Releases
Three Additional Research Studies on Media Ownership
, MB Docket No. 09-182, Public Notice, 26 FCC Rcd
10240 (Med. Bur. 2011); FCC Releases the Final Three Research Studies on Media Ownership, MB Docket No. 09-
182, Public Notice, 26 FCC Rcd 10380 (Med. Bur. 2011).
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Commission’s review of the media ownership rules in the 2006 Quadrennial Review Order.14 As
discussed in more detail below, the court affirmed the Commission’s decision to retain the local television
and radio rules to protect competition in local media markets.15 The court also affirmed the
Commission’s decision to retain the dual network rule based on potential harm to competition that would
result from mergers of the top four networks.16 The court also affirmed the Commission’s conclusion to
retain the radio/television cross-ownership rule as well as, in part, to retain the local radio rule based on
the benefits to the Commission’s diversity goal.17 Moreover, the Third Circuit vacated and remanded the
newspaper/broadcast cross-ownership rule as modified by the Commission in the 2006 Quadrennial
Review Order
, concluding that the Commission failed to comply with the notice and comment provisions
of the Administrative Procedures Act.18 As discussed in more detail below, the court also vacated and
remanded a number of measures adopted in the Commission’s 2008 Diversity Order, which we now
address in this proceeding.19
8.
As discussed in detail in Section III, as part of its regular review of broadcast ownership
rules required by the Communications Act, the Commission proposes the elimination of one rule and
suggests leaving the others largely unchanged. We believe that the public interest is best served by these
modest, incremental changes to our rules.20 Recognizing current market realities, we seek comment on
the following proposals:
·
Local Television Ownership Rule. We tentatively conclude that we should retain the current
local television ownership rule with minor modifications. Specifically, we propose to
eliminate the Grade B contour overlap provision of the current rule. We tentatively conclude
that we should retain the prohibition against mergers among the top-four-rated stations, the
eight-voices test, and the existing numerical limits. In addition, we seek comment on whether
to adopt a waiver standard applicable to small markets, as well as appropriate criteria for any
such standard. Also, we seek comment on whether multicasting should be a factor in
determining the television ownership limits.
·
Local Radio Ownership Rule. We propose to retain the current local radio ownership rule.
We also seek comment on modifications to the rule and whether and how the rule should
account for other audio platforms. We propose to also retain the AM/FM subcaps, and seek
comment on the impact of the introduction of digital radio. We seek comment on whether to
adopt a waiver standard and on specific criteria to adopt.
·
Newspaper/Broadcast Cross-Ownership Rule. We tentatively conclude that some
newspaper/broadcast cross-ownership restrictions continue to be necessary to protect and
promote viewpoint diversity. We propose to use Nielsen Designated Market Area (“DMA”)
definitions to determine the relevant market area for television stations, given the lack of a
digital equivalent to the analog Grade A service contour. We propose to adopt a rule that
includes elements of the 2006 rule, including the top 20 DMA demarcation point, the top-four


14 Prometheus II, 652 F.3d at 437.
15 Id. at 460-61, 462-63.
16 Id. at 463-64.
17 Id. at 456-58, 463.
18 Id. at 453. The court did not address the Commission’s substantive modifications to the rule.
19 Id. at 471.
20 The ownership rules discussed in this paragraph, are found, respectively, at 47 C.F.R. §§ 73.3555(b), (a), (d), and
(c), and 47 C.F.R. § 73.658(g).
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television station restriction, and the eight remaining voices test. We seek comment on these
proposals and whether to incorporate other specific elements and factors of the 2006 rule.
·
Radio/Television Cross-Ownership Rule. We propose to eliminate the radio/television cross-
ownership rule in favor of reliance on the local radio rule and local television rule. We
believe that the local radio and television ownership rules adequately protect our localism and
diversity goals and seek comment on this proposal.
·
Dual Network Rule. We tentatively conclude that the dual network rule remains necessary in
the public interest to promote competition and localism and should be retained without
modification.
9.
Minority and Female Ownership. As noted above, we seek comment in this proceeding on
the aspects of the Commission’s 2008 Diversity Order that the Third Circuit remanded in Prometheus II.
Specifically, the court vacated and remanded a number of measures adopted in the Diversity Order that
were designed to increase ownership opportunities for “eligible entities,” including minority- and women-
owned entities, because it determined that the Commission’s revenue-based eligible entity definition was
arbitrary and capricious.21 The court directed the Commission to address this issue in the course of the
2010 Quadrennial Review. As directed by the court, the Commission invites views on how its ownership
rules and policies can promote greater minority and women ownership of broadcast stations. The
Commission will explore a broad range of potential actions it might take to that end, consistent with
judicial precedent.22

II.

POLICY GOALS

10.
We reaffirm that media ownership rules are necessary to further the Commission’s
longstanding policy goals of fostering competition, localism, and diversity. In the NOI, the Commission
sought comment on how these goals should be defined and measured and on whether there are additional
goals we should consider.23 We did not receive many specific comments on defining, measuring, and
evaluating the performance of our policy goals, and we invite such comment again. In particular, in
Section V below, we describe and seek comment on the Commission’s 11 Media Ownership studies that
evaluate the impact of local media market structure on our policy goals.24 In addition, we invite parties to
submit their own studies evaluating the impact of particular market structures on our goals. Below, we
discuss the Commission’s competition, localism, diversity, and other policy goals. We also discuss how
we should evaluate the costs and benefits of our media ownership rules.
11.
Competition. As the Commission noted in the NOI, because broadcast content is available
for free to end users, broadcast competition cannot be assessed in the same manner as in many other
markets. Specifically, the Commission cannot examine changes in price to assess the impact of different
levels of ownership concentration.25 Accordingly, the Commission sought comment on a variety of
potential ways to assess competition in the media marketplace.26 The Commission discussed whether
competition among broadcast outlets is likely to benefit consumers by making available programming
that satisfies consumer preferences.27


21 Prometheus II, 652 F.3d at 471.
22 See infra ¶ 147.
23 NOI, 25 FCC Rcd at 6097-98, ¶ 30.
24 The Commission released the studies between June 15 and July 26. See infra note 415 and accompanying text.
25 NOI, 25 FCC Rcd at 6098, ¶ 33.
26 Id. at 6098-6100, ¶¶ 34-43.
27 Id. at 6098-99, ¶ 34.
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12.
We reaffirm our longstanding commitment to ensure that media markets are competitive.28
The Commission strives to set ownership rules that create a marketplace in which broadcast programming
meets the needs of consumers, and we believe competition is a key means to that end. Moreover, we
reaffirm the Commission’s previous findings that our local ownership rules should be analyzed in the
context of local markets.29 We find however that for the Dual Network rule, competition is appropriately
analyzed in the national advertising and programming markets.
13.
Localism. In the NOI, the Commission sought comment generally on how to define and
promote localism in the context of the media ownership rules, including whether our traditional localism
goal needs to be redefined in light of today’s media marketplace.30
14.
We reaffirm our commitment to promote localism through our media ownership rules.31
At its core, localism policy is “designed to ensure that each station treats the significant needs and issues
of the community that it is licensed to serve with the programming that it offers.”32 Our media ownership
rules, as part of the Commission’s overall regulatory framework, seek to promote a marketplace in which
broadcast stations “respond to the unique concerns and interests of the audiences within the stations’
respective service areas.”33 We continue to evaluate the extent of localism in broadcasting markets by
determining whether programming is responsive to local needs and interests. Our focus continues to be
on news and public information programming.34 We continue to believe that these types of programming
are relevant to evaluating the extent of localism as it exists in local markets. While our core commitment
to promoting localism in media remains undiminished, we also recognize that changes in the marketplace
and changes in consumer preferences may impact aspects of localism in today’s marketplace. Thus, we
believe that the appropriate definition of localism today, in the digital age, may not be the same definition
as in decades past.
15.
As a result of the growing availability of the Internet and the proliferation of wireless
technology, consumers are accessing news and public affairs programming through their computers and
electronic devices. Moreover, the potential for hyper-local websites and blogs to provide consumers with
local news and information, such as neighborhood-specific news and events, may contribute to meeting
the current or future needs and interests of local communities. As consumers continue to rely more and
more on additional, multiple sources of local news, we seek comment on whether, and how, to reevaluate
localism to account for changes in the way consumers get local news.
16.
Diversity. In the NOI, the Commission sought comment on how to define and measure


28 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
, MB Docket No. 06-121, Report and Order
and Order on Reconsideration, 23 FCC Rcd 2010, 2016-17, ¶ 9 (2008) (“2006 Quadrennial Review Order”).
29 See, e.g., 2002 Biennial Regulatory Review – Review of the Commission’s Broadcast Ownership Rules and Other
Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996
, MB Docket No. 02-277, Report and
Order and Notice of Proposed Rulemaking, 18 FCC Rcd 13620 passim (2003) (“2002 Biennial Review Order”);
2006 Quadrennial Review Order
, 23 FCC Rcd at passim.
30 NOI, 25 FCC Rcd at 6103, ¶ 54.
31 See 2002 Biennial Review Order, 18 FCC Rcd at 13643, ¶ 73.
32 Broadcast Localism, MB Docket No. 04-233, Report on Broadcast Localism and Notice of Proposed Rulemaking,
23 FCC Rcd 1324, 1327, ¶ 4 (2008) (“Broadcast Localism Report”) (citing FCC Chairman Powell Launches
“Localism in Broadcasting” Initiative,
News Release (Aug. 20, 2003), available at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-238057A1.pdf ).
33 Broadcast Localism Report, 23 FCC Rcd at 1327, ¶ 6.
34 2002 Biennial Review Order, 18 FCC Rcd at 13644, ¶ 78; Broadcast Localism Report, 23 FCC Rcd at 1326, ¶ 2.
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diversity in today’s marketplace to determine whether our current media ownership rules are meeting our
diversity goal. The Commission has relied on its media ownership rules to ensure that diverse viewpoints
and perspectives are available to the American people in the content they receive over the broadcast
airwaves.35 The policy is premised on the First Amendment, which “rests on the assumption that the
widest possible dissemination of information from diverse and antagonistic sources is essential to the
welfare of the public.”36 The Commission historically has approached the diversity goal from five
perspectives: viewpoint, outlet, program, source, and minority and female ownership diversity.37 The
Commission has regulated media ownership as a means of enhancing viewpoint diversity based on the
premise that diffuse ownership among media outlets promotes the presentation of a larger number of
viewpoints in broadcast content than would be available in the case of a more concentrated ownership
structure.38
17.
We reaffirm our belief that media ownership limits are necessary to preserve and promote
viewpoint diversity. Furthermore, we also reaffirm our conclusion that viewpoint diversity is generally
promoted by competition among independently owned media outlets.39 We believe that a key measure of
how well the Commission’s current rules promote our overall diversity goal is the availability of local
news and information, and we examine that availability as it relates to local ownership structure and the
level of civil engagement in Section V.
18.
Minority and Female Ownership. In the NOI, the Commission sought comment on a
variety of questions regarding the impact of our ownership rules on minorities and females, including
minority and female ownership of broadcast stations. The Commission asked how our localism goal
should be defined and measured as applied to historically underserved minority communities.40 The
Commission sought comment on what aspects of localism are most relevant specifically to minority
communities, as well as on the effect of consolidated ownership on the availability of a variety of diverse
viewpoints to women and minority consumers. The NOI asked if women and minorities are increasing


35 See, e.g., Amendment of Sections 73.34, 73.240, and 73.636 of the Commission’s Rules Relating to Multiple
Ownership of Standard, FM, and Television Broadcast Stations
, Docket No. 18110, Second Report and Order, 50
FCC 2d 1046, 1048, ¶ 9 (1975) (“1975 Second Report and Order”).
36 Review of the Commission’s Regulations Governing Television Broadcasting, MM Docket No. 87-8, Further
Notice of Proposed Rule Making, 10 FCC Rcd 3524, 3547, ¶ 57 (1995) (“1995 TV Broadcasting NPRM”) (quoting
Assoc’d Press v. United States, 326 U.S. 1, 20 (1945)).
37 See, e.g., 2002 Biennial Review Order, 18 FCC Rcd at 13627-37, ¶¶ 18-52. In the 2002 Biennial Review Order,
the Commission concluded that program diversity is best achieved by reliance on competition among delivery
systems rather than by government regulation and that our media ownership rules ensure competition in local
markets. Id. at 13632, ¶ 37. In addition, the Commission concluded that source diversity was not one of the
diversity goal objectives of the media ownership rules. Id. at 13633, ¶ 43. We reaffirm those conclusions.
38 The Commission previously has discussed two schools of thought on the relationship between ownership and
diversity. On one side is the notion that the more independently owned outlets there are, the greater the viewpoint
diversity. The concept is that 51 station owners will provide more diverse viewpoints than 50 station owners.
Amendment of Sections 73.34, 73.240, and 73.636 of the Commission’s Rules Relating to Multiple Ownership of
Standard, FM, and Television Broadcast Stations
, Docket No. 18110, First Report and Order, 22 FCC 2d 306, 311,
¶ 21 (1970). The second school of thought is that concentrated ownership will provide an opportunity for diverse
content. According to this view, an owner of multiple stations in a local market will provide a variety of
programming and viewpoints in order to gain the widest audience and market share. See 1995 TV Broadcasting
NPRM
, 10 FCC Rcd at 3550-51, ¶ 63. It can be questioned whether the latter approach is as likely to provide the
public with information from “diverse and antagonistic sources,” Assoc’d Press, 326 U.S. at 20. We seek comment
on this issue and on how we should account for this aspect of our diversity goal in any rules we might adopt.
39 See 2002 Biennial Review Order, 18 FCC Rcd at 13631-32, ¶¶ 36-37.
40 NOI, 25 FCC Rcd at 6104-05, ¶ 59.
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their ownership shares in companies that are content providers or in other aspects of media production
aside from station ownership.41
19.
There were only limited comments on these issues. According to Diversity and
Competition Supporters (“DCS”), significant barriers to entry for minority ownership remain in both the
traditional and new media industries.42 DCS states that minority-owned stations are more likely than non-
minority owned stations to provide programming geared toward minority audiences and that minority
communities are underserved as a result of the lack of minority media ownership.43 DCS supports
measures that facilitate minority media ownership.44
20.
We tentatively conclude that our policy goals of competition, localism, and diversity are
the appropriate framework within which to evaluate and address minority and female interests as they
relate to our media ownership rules. We seek comment on this tentative conclusion. We also seek
additional comment on how the proposed framework for each of our media ownership rules, as explained
herein, would affect minority and female ownership opportunities.
21.
Additional Policy Goals. In the NOI, the Commission sought comment on whether we
should consider any other formal policy goals, in addition to our competition, diversity, and localism
goals, in determining ownership limits in this proceeding.45 Specifically, we sought comment on whether
to consider the impact of our media ownership rules on the availability to all Americans of news and
information, including national news and information.46 We also sought comment on whether we should
consider the impact of our rules on investigative journalism, and whether any specific aspects of the
National Broadband Plan, including issues related to broadband access, are relevant to our media
ownership rules. We tentatively conclude not to adopt any other formal policy goals in this proceeding.
As described above, our longstanding policy goals of competition, localism, and diversity are broadly
defined to promote the core responsibilities of broadcast licensees. We note that our media ownership
rules seek to further consumer welfare by promoting the availability of community-responsive news and
public affairs programming from a variety of sources. We seek comment on our tentative conclusion not
to adopt any policy goals other than competition, localism, and diversity in this proceeding.
22.
Balancing the Costs and Benefits of Limiting Media Combinations. We seek information
that will help us balance the positive benefits of our ownership limits in promoting our policy goals
against the costs that specific limits may impose on consumers and firms. We have discussed in broad
terms in this section the policy goals we seek to promote. Section V presents the studies that we
commissioned to quantify the influence of our rules on the policy goals. In particular, Media Ownership
Study 2 quantifies the benefits and costs of particular media market structures on consumers.47 We seek
comment on the appropriate use of this study in quantifying the impact of our rules on consumers and


41 Id. at 6108, ¶ 72.
42 DCS Comments at 3-5, 7-9.
43 Id. at 11-14; see also id. at 12 (citing Catherine Sandoval et al., Minority Commercial Radio Ownership in 2009:
FCC Licensing and Consolidation Polices, Entry Windows, and the Nexus Between Ownership, Diversity and
Service in the Public Interest (Nov. 2, 2009) (“Sandoval et al. Minority Commercial Radio Ownership in 2009”))
(“A study published in 2009 shows that approximately 73 percent of minority-owned stations serve the community
by broadcasting minority oriented programming . . . .”).
44 DCS Comments at 18-20.
45 NOI, 25 FCC Rcd at 6109-10, ¶ 78.
46 Id.
47 Media Ownership Study 2, Consumer Valuation of Media as a Function of Local Market Structure, by Scott J.
Savage and Donald M. Waldman (“Media Ownership Study 2”).
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balancing the positive effects on consumers with any adverse effects on firms.
23.
Our studies do not address the direct impact ownership limits have on media outlets. We
seek detailed information on the benefits that would accrue to media outlets from entering into
combinations that currently are impermissible. What are the cost-savings associated with a combination
of two TV stations in markets where duopolies are not currently permitted? What are the sources of those
cost savings? Are the savings a one-time event or are they recurring? Do they vary by the size of the
market or the popularity of the TV station? We seek similar detailed estimates of cost savings for the
combination of radio stations as well as cross-media combinations between newspapers, TV stations, and
radio stations. Commenters should document to the extent possible the sources and methods of their
estimates.
24.
How should we balance the effects of our rules on consumers with those on firms, in
particular, media outlets? Should each receive equal weight? How should we account for situations in
which the costs and the benefits of a change in the rules occur at different points in time? We encourage
commenters to provide examples of the suggested balancing of our rules.

III.

MEDIA OWNERSHIP RULE PROPOSALS

A.

Local Television Ownership Rule

1.

Introduction

25.
As discussed in the NOI, in the 2006 Quadrennial Review Order, the Commission
determined that the then long-standing local television ownership rule promotes competition within local
television markets.48 Consistent with this conclusion, the Commission retained that rule. The rule allows
an entity to own two television stations in the same DMA (“duopoly rule”) only if there is no Grade B
contour overlap between the commonly owned stations, or at least one of the commonly owned stations is
not ranked among the top-four stations in the market (“top-four prohibition”) and at least eight
independently owned television stations remain in the DMA after ownership of the two stations is
combined (“eight-voices test”). The court in Prometheus II upheld the Commission’s decision in the 2006
Quadrennial Order
to retain the local television ownership rule, specifically concluding that the
Commission was justified in retaining the top-four prohibition, the eight-voices test, and the duopoly
rule.49
26.
Based on the record in this proceeding, we tentatively conclude that the local television
ownership rule, with certain modifications discussed below, remains necessary in the public interest as a
result of competition.50 We tentatively agree with the Commission’s previous determination that the local
television ownership rule is necessary to promote competition.51 While we propose to adopt a local
television ownership rule to advance our competition goal, we seek comment on whether our proposed rule
also is necessary to promote our localism and viewpoint diversity goals.
27.
As discussed in greater detail below, we propose to eliminate the Grade B contour overlap
provision of the current rule and seek comment on this proposal. We tentatively conclude that we should
retain the prohibition against mergers among the top-four-rated stations. We propose to also retain the


48 NOI, 25 FCC Rcd at 6093, ¶19; see also 2006 Quadrennial Review Order, 23 FCC Rcd at 2064, 2066, ¶¶ 97, 101.
The Commission also found that the local television ownership rule was not necessary to foster diversity because
there were other outlets for diversity of viewpoint in local markets. 2006 Quadrennial Review Order, 23 FCC Rcd
at 2065-66, ¶ 100.
49 Prometheus II, 652 F.3d at 458-61.
50 Section 202(h) of the 1996 Act, 47 U.S.C. § 303 note.
51 2006 Quadrennial Review Order, 23 FCC Rcd at 2060, ¶ 87.
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eight-voices test and the existing numerical limits, but seek comment on whether modifications to either
the voice test or numerical limits is warranted. In addition, we seek comment on whether to adopt a
waiver standard applicable to small markets, as well as appropriate criteria for any such standard. Also,
we seek comment on whether and how the digital transition and multicasting may impact television
ownership limitations. Finally, we seek comment on the impact of our proposed rule on minority and
female ownership.
2.

Background

28.
In the NOI, the Commission sought comment on whether to retain the current rule,
including the eight-voices test, the top-four prohibition, and the contour overlap definition.52 It also asked
whether relaxation of the rule is warranted in small markets to help broadcasters achieve efficiencies
sufficient to compete with other video programming providers.53
29.
Television broadcasters generally support relaxing the local television ownership rule,
asserting that they face decreased revenues, as a result of both increased competition from nonbroadcast
video programming providers and the recent economic downturn. Broadcasters assert that the efficiencies
gained from combined ownership will allow them to compete better in today’s changing marketplace.54
According to broadcasters, common ownership can increase viewpoint diversity, as owners of multiple
stations seek to capture the greatest possible audience share by diversifying their news and public interest
program offerings among co-owned properties.55 In addition, they contend that the cost savings generated
by common ownership allow stations to add local newscasts and other locally oriented programming.56
30.
Public advocacy groups, on the other hand, caution the Commission against using current
economic conditions as a justification for relaxing the local television ownership rule.57 UCC et al., for
example, assert that every U.S. industry was impacted by the declining economy and that signs suggest
that the broadcast television industry has emerged from the downturn.58 Moreover, they contend that, if
certain stations cannot survive in the current economic climate, then the public interest is best served by
allowing new entrants to become broadcasters or finding new uses for the broadcast spectrum.59 In
addition, public advocacy groups assert that further consolidation will reduce viewpoint diversity through
reductions in female and minority ownership and the loss of independent news operations.60 Contrary to
the broadcasters’ assertion, the public advocacy commenters cite to studies that have found that
consolidation does not lead to increases in local programming, suggesting that additional consolidation


52 NOI, 25 FCC Rcd at 6111, ¶ 83.
53 Id. at 6112, ¶ 84.
54 See, e.g., Nexstar Comments at 12; Belo Comments at 2.
55 See, e.g., NAB Comments at 29-30 (citing Matthew Spitzer, Television Mergers and Diversity in Small Markets, 6
J. COMPETITION L. & ECON. 705 (2010) (“Spitzer Study”)); Nexstar Comments at 11; Coalition of Smaller Market
Television Stations (“Small Market Coalition”) Comments Ex. 2, Spitzer Study.
56 See, e.g., Belo Comments at 7. Belo provides examples of increases in local news, politics, sports, and public
affairs programming that it has been able to implement as a result of efficiencies generated by its duopolies in the
Tucson and Seattle-Tacoma markets. Id. at 6-9.
57 See Free Press Comments at 7; UCC et al. Comments at 5-6.
58 UCC et al. Comments at 5-6.
59 Id. at 6-7.
60 See, e.g., CWA Comments at 15-19.
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would not serve our localism goal.61
31.
In our studies, we sought data to help us determine how best to structure a local television
ownership rule to satisfy our policy goals. Particularly relevant to the local television rule, Media
Ownership Study 1 examines whether common ownership of stations affects the amount of local news
provided by television stations in the local market.62 The study does not find significant evidence that
common ownership affects local media usage or programming.63 In addition, Media Ownership Study 4
analyzes, at both the market level and the station level, the relationship between media ownership and the
amount of local news and public affairs programming provided in a local television market.64 The study
suggests that multiple ownership in a local market does not impact the amount of local information
programming at the market level or at the station level.65 Media Ownership Study 9 provides a theoretical
analysis of the impact of media ownership structure on viewpoint diversity, finding that more independent
outlets can increase viewpoint diversity in a market.66
3.

Discussion

32.
Market. Broadcasters generally assert that they are facing increased competition from new
technologies, which has led, at least in part, to a reduction in advertising revenues, which could threaten
the financial viability of local television stations.67 Broadcasters contend, therefore, that we should modify
our local television ownership rule to permit increased common ownership in local markets.68
33.
We propose that our local television ownership rule continue to focus on promoting
competition among broadcast television stations in local television viewing markets. We tentatively
conclude that the video programming market is distinct from the radio listening market.69 We find that
local broadcast television stations compete directly with each other, particularly during the parts of the day
in which these stations do not transmit the programming of affiliated broadcast networks. We note that the
Commission previously has determined that the video programming market includes both broadcast
television stations and cable networks.70 Moreover, we recognize that viewers are increasingly able to


61 Free Press Comments at 6 (citing Consumer Union et al. Jan. 16, 2007 Reply, MB Docket No. 06-121, at 95;
Danilo Yanich, Ownership Matters: Localism, Local Television News, and the FCC (May 20, 2009) (presented at
the International Communication Association annual meeting)); AFTRA Comments at 13-14 (citing The Impact of
the FCC’s TV Duopoly Rule Relaxation on Minority and Women Owned Broadcast Stations, 1999-2006, at 2-3, by
Allen S. Hammond, IV, Barbara O’Connor, and Tracy Westen (2007) (Ownership Study 8 in the 2006 quadrennial
review proceeding)). However, NAB asserts that additional research conducted by Consumers Union et al. reached
a different conclusion, finding that ‘“duopolies may lead to more local news and public affairs.’” NAB Reply at 17
(citing Consumers Union et al. Oct. 22, 2007 Further Comments, MB Docket No. 06-121, at 98).
62 Media Ownership Study 1, Local Media Ownership and Media Quality, by Adam D. Rennhoff and Kenneth C.
Wilbur (“Media Ownership Study 1”).
63 Id. at 1.
64 Media Ownership Study 4, Local Information Programming and the Structure of Television Markets, by Jack Erb
(“Media Ownership Study 4”).
65 Id. at 28.
66 Media Ownership Study 9, A Theoretical Analysis of the Impact of Local Market Structure on the Range of
Viewpoints Supplied 2-3, by Isabelle Brocas, Juan D. Carrillo, and Simon Wilkie (“Media Ownership Study 9”).
67 NAB Comments at 63-66, 69-70.
68 Id. at 85-86.
69 See 2006 Quadrennial Review Order, 23 FCC Rcd at 2064, ¶ 97.
70 2002 Biennial Review Order, 18 FCC Rcd at 13673, ¶ 143; see also 2006 Quadrennial Review Order, 23 FCC
Rcd at 2064, ¶ 97.
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access current network programming (both broadcast and cable) and an increasing array of video
programming alternatives via the Internet, including on mobile devices. However, competition between
local television stations and cable networks may be of limited relevance, because national cable networks
generally do not alter their programming decisions based on the actions of individual local television
stations.71 Competition in local markets among local television stations and programming alternatives
available via the Internet may be similarly limited, as these alternatives compete largely in national
markets and are not likely to respond to conditions in local markets. We seek comment on whether the
development of local and hyperlocal websites should alter this analysis. We seek data in support of
alternative conclusions, for example, that nonbroadcast video programmers modify programming decisions
based on the actions of individual local television stations.
34.
We also seek comment on the impact of alternative video platforms on the continued
viability of broadcast television stations. While the growth of MVPDs and Internet delivery of video
programming is undeniable, the impact of this growth on the broadcast television industry is unclear.
While broadcast television’s share of television viewing has been on the decline, broadcast network
programming remains popular.72 Viewership, however, appears to be fractured between local affiliates,
the Internet, and other mobile platforms. Is there evidence that viewers find broadcast television stations
to be interchangeable with new technologies, or is broadcast television unique? If it is unique, what
characteristics define it as such? Should we determine that, contrary to our tentative conclusion, our local
television ownership rule should focus on promoting competition among broadcast television stations and
alternatives to broadcast television stations in local markets, we seek comment below on whether and how
to include these alternatives in the rule, either in the eight-voices test or any alternate framework we may
adopt for determining whether to permit common ownership in a local market.
35.
Moreover, we seek comment on whether the product market for review of the local
television rule should include more than video programming. For instance, some of the alternative sources
of locally oriented content, such as websites and blogs, may not be entirely in video form. Is the relevant
product market expanding from a video-only market to one that also contains non-video sources of local
news and information? We tentatively conclude that, although the relevant product market may expand
beyond video programming over time, it has not done so at this point. Evidence suggests that, in the
aggregate, Internet-only websites provide only a small amount of local news content.73 We have not seen
evidence that non-video information sources modify programming decisions based on the actions of local
television stations or vice versa. We seek comment on these tentative conclusions.
36.
Contour Overlap. The current local television ownership rule employs a Grade B contour
overlap test for determining whether to allow common ownership of television stations. The Grade B
contour is an analog contour that is no longer relevant now that television stations have completed the


71 2002 Biennial Review Order, 18 FCC Rcd at 13673, ¶ 145; 2006 Quadrennial Review Order, 23 FCC Rcd at
2064, ¶ 97.
72 For example, in the 2002-03 television season, broadcast television stations achieved a 49 share of primetime
viewing and nonbroadcast channels achieved 51 share of primetime viewing. THE NIELSEN CO., TELEVISION
AUDIENCE 2009, at 14 (2010). In the 2008-09 television season, the broadcast stations’ primetime audience share
fell to a 38, while nonbroadcast channels’ primetime audience share grew to a 62. Id. A share is the percent of all
households using television during the time period that are viewing the specified station(s) or network(s). Due to
simultaneous multiple-set viewing, Nielsen reports audience shares that exceed 100 percent when totaled. We have
normalized the reported audience shares by recalculating them on a base (or denominator) equaling 100 percent, and
adjusting the numerators accordingly.
73 Media Ownership Study 6, Less of the Same: The Lack of Local News on the Internet 23-24, by Matthew
Hindman (“Media Ownership Study 6”).
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digital transition and ceased broadcasting in analog.74 We sought comment in the NOI on whether an
overlap provision or some reliance on contours in the local television ownership rule was still necessary or
whether we should rely on geographic areas, such as a television DMAs.75 NAB asserts that we should, to
the extent feasible, maintain a contour-based approach for our local television ownership rule.76 Grant
Group asks the Commission to grandfather existing combinations in the event an alternate approach is
adopted and to permit the sale of grandfathered combinations to a single party.77
37.
We believe that eliminating the contour approach is necessary to be consistent with today’s
marketplace realities. Therefore, we tentatively conclude that we will eliminate the Grade B contour
approach and rely solely on Nielsen DMAs. Because of the Commission’s mandatory carriage
requirements,78 MVPDs generally will carry all the broadcast stations assigned to the DMA in which they
are located. These MVPDs are also likely to carry most major cable networks. Therefore, the DMA most
accurately captures the universe of broadcast and MVPD video programming available to viewers. As
such, any combination of stations in a particular DMA could have an impact on the levels of competition
in that local market. However, our current rule permits certain mergers between stations that compete in
the same market simply because of a lack of Grade B contour overlap – a factor that may not have any
significant impact on the level of competition between those stations. Therefore, we tentatively conclude
that eliminating the contour-overlap requirement in favor of the DMA-based approach would result in a
more consistent application of our local television ownership rule. Moreover, we believe that the
grandfathering provisions discussed below will preserve existing ownership combinations, thus avoiding
disruption of settled expectations and alleviating any negative impact this change could have on the
provision of television service in rural areas. We seek comment on these tentative conclusions.
38.
We note that the Commission previously adopted a geographic market definition for the
local radio rule. In the radio context, Arbitron Metro market definitions were found to be an industry
standard and to represent a reasonable definition of the geographic market within which radio stations
compete.79 Adopting Arbitron Metro markets was found to improve the Commission’s ability to preserve
and promote competition by more accurately identifying actual geographic markets; more accurately
measuring concentration levels in local markets; and providing for a more consistent application of the
local radio ownership rule.80 We have long recognized in our television ownership rule that DMAs are the
relevant geographic market in which television stations compete, and we expect that a DMA-based
approach here will achieve benefits similar to those found in adopting the Arbitron Metro market standard


74 We recognize that the Commission has developed a digital contour (NLSC), 47 C.F.R. § 73.622(e), to
approximate the same probability of service as the Grade B contour and has stated that the two are roughly
equivalent. NOI, 25 FCC Rcd at 6117, ¶ 103. However, the Commission has not adopted a digital contour that is
equivalent to the Grade A contour, which is currently used for purposes of determining compliance with the
radio/television and the newspaper/television ownership rules. For further discussion on digital contours, see id. at
6116-18, ¶¶ 102-03.
75 Id. at 6111, 6116-18, ¶¶ 83, 101-05.
76 NAB Comments at 94.
77 Grant Group Comments at 14-16.
78 47 C.F.R. § 76.56.
79 2002 Biennial Review Order, 18 FCC Rcd at 13725, ¶ 276.
80 Id. at 13712-13, 13720, ¶¶ 239, 258-60. We recognize however, that radio Metros and DMAs are not similar
geographic market definitions to the extent that only television stations may rely on MVPD carriage to extend their
coverage beyond their signal contour to an entire DMA service area. That is not the case for radio stations in
Arbitron markets, which are over-the-air signals.
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in the radio context.81 Finally, unlike Arbitron Metro markets, which do not cover large portions of the
United States and its territories, the DMA-based approach covers the entire country and includes all
television stations.82
39.
We recognize, however, that a DMA-based approach may disproportionately impact
certain DMAs that have unique characteristics. For instance, in a geographically large DMA two stations
may be so far removed from one another that the stations do not actually compete over-the-air (though
they are both carried by MVPDs throughout the DMA). While the Grade B provision of the existing rule
allowed common ownership of those stations, a DMA-based approach could prohibit common ownership.
Therefore, we seek comment on whether and how to accommodate such a situation and other types of
situations in which the Grade B provision allowed ownership of stations but a DMA-based rule would
prohibit common ownership. We seek comment on how frequently such situations arise. We tentatively
conclude to grandfather ownership of existing combinations of television stations that would exceed the
ownership limit under the proposed local television ownership rule by virtue of the change to a DMA-
based approach. Compulsory divestiture is disruptive to the industry and a hardship for individual owners,
and any benefits to our policy goals would likely be outweighed by these countervailing considerations.83
Consistent with the Commission’s previous decisions, we seek comment regarding whether to allow the
sale of combinations only if the station groups comply with the local television ownership rule in place at
the time the transfer of control or assignment application is filed.84 Are our policy goals served by
allowing grandfathered combinations to be freely transferable in perpetuity, irrespective of whether the
combination complies with the local television ownership rule?85 What is the effect on the stations if they
are sold separately? Is it possible that such a rule could have the unintended consequence of causing a
station to close? We seek comment on these tentative conclusions.
40.
Top-Four Prohibition. The top-four prohibition prevents mergers between two of the top-
four-rated stations in a local market, subject to the other provisions of the local television ownership rule.
In the previous media ownership proceeding, the Commission retained the top-four prohibition because
mergers between these stations “would be the most deleterious to competition.”86 Such mergers would
often result in a single firm obtaining a significantly larger market share than other firms in the market and
would reduce incentives for local stations to improve programming that appeals to mass audiences.87 The
Commission also found that a significant “cushion” of audience share continued to separate the top-four
stations from the fifth-ranked station.88 We tentatively conclude that retaining the top-four prohibition is


81 See 2006 Quadrennial Review Order, 23 FCC Rcd at 2067-68, ¶ 104; 2002 Biennial Review Order, 18 FCC Rcd
at 13673-74, 13691-92, ¶¶ 146, 187.
82 In instances where a station’s community of license is located in one DMA but the station is assigned by Nielsen
to another DMA the station will be considered to be within the DMA assigned by Nielsen for purposes of this rule.
In addition, Puerto Rico, Guam, and the U.S. Virgin Islands, which are not assigned a DMA by Nielsen, each will be
considered a single DMA.
83 See, e.g., 1975 Second Report and Order, 50 FCC 2d at 1080, ¶ 112 (stating that “divestiture should be limited to
use in only the most egregious cases”); see also 2002 Biennial Review Order, 18 FCC Rcd at 13808, ¶ 484.
84 See, e.g., 2002 Biennial Review Order, 18 FCC Rcd at 13809-10, ¶ 487.
85 1975 Second Report and Order, 50 FCC 2d at 1076, ¶ 103; see also 2002 Biennial Review Order, 18 FCC Rcd at
13809-10, ¶ 487. We would continue to allow pro-forma changes in ownership and involuntary changes of
ownership due to death or legal disability of the licensee. 1975 Second Report and Order, 50 FCC 2d at 1076, ¶
103.
86 2006 Quadrennial Review Order, 23 FCC Rcd at 2066, ¶ 102.
87 Id. (citing 2002 Biennial Review Order, 18 FCC Rcd at 13695, ¶ 194).
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necessary to promote competition for the reasons set forth in the 2006 Quadrennial Review Order.89 We
continue to believe that this rationale supports retention of the top-four prohibition, and we seek comment
on these tentative conclusions.
41.
We seek comment also on the impact of the top-four prohibition on our localism goal.
NAB supports mergers among the top-four stations in a local market because it argues that many of these
stations cannot afford to produce local news independently.90 Allowing these stations to combine, they
argue, could lead to increased news offerings.91 We note, however, that evidence suggests that the
majority of top-four stations are already originating substantial amounts of local news.92 Moreover, there
is generally a drop off between the fourth- and fifth-rated station in the market in the amount of local
news broadcast. 93 Based on this evidence, it is not clear that permitting mergers among top-four stations
generally would result in additional local news or other local programming.94 We seek comment on these
issues. We also seek information regarding whether the amount of local news provided between the top
four stations and any others depends upon the size of the market and a community’s ability to support
multiple news outlets.
42. In addition, we seek comment on whether we should retain the top-four prohibition to also
promote our viewpoint diversity goal. Media Ownership Study 9’s theoretical analysis shows that a
market structure with four firms — two firms presenting each viewpoint — provides efficient information
transmission, and the experimental work confirms the value of competition among outlets with similar





88 2006 Quadrennial Review Order, 23 FCC Rcd at 2067, ¶ 102. The Commission also found that mergers
involving two top-four stations would harm competition in the local broadcast television advertising market. Id.
We tentatively conclude that this market does not have a direct impact on consumers and should not be a focus of
our inquiry. We seek comment on these tentative conclusions.
89 Id. at 2066-67, ¶ 102.
90 See NAB Reply at 14-15 (citing NAB Oct. 23, 2006 Comments, MB Docket No. 06-121, at 105-06). In its 2006
comments, NAB cited to filings in the 2002 ownership review proceeding that claimed that many markets outside of
the top 50 DMAs were served by less than four local newscasts. NAB Oct. 23, 2006 Comments, MB Docket No.
06-121, at 105 (citing Nexstar Sept. 4, 2003 Petition for Reconsideration, MB Docket No. 02-277, at 9-10
(providing results of phone survey performed by Nexstar that found that “[i]n markets below the top fifty DMAs, 69
of the number four ranked stations do not produce their own news, and in markets below the top ninety DMAs, 44 of
the number three ranked stations do not produce their own local news. Even worse, in DMAs 157 and below, 15 of
the number two ranked stations are not producing local news.”); LIN & Raycom Sept. 4, 2003 Petition for
Reconsideration, MB Docket No. 02-277, at 9-10 (asserting that the study relied on by the Commission in 2002
biennial ownership proceeding to uphold the top-four prohibition actually demonstrated that many top-four rated
stations outside the largest markets are not providing local news)).
91 See NAB Reply at 14-16.
92 For instance, according to FCC staff analysis of scheduling data from Tribune Media Service (“TMS”), in 58.1
percent of television markets, four or more stations are providing at least 30 minutes of local news per day.
Furthermore, based on this analysis, of the 1614 full-power television stations in the TMS database, 849 (or 50.4
percent) provide at least 30 minutes of local news per day.
93 For example, across all Nielsen Markets, the number four rated station provides an average of 177 local news
minutes per day, while the number five rated station provides only 87 local news minutes per day. FCC staff
analysis of TMS data for the period Nov. 1, 2009 through Nov. 14, 2009 and Nielsen data for the period Oct. 29,
2009 through Nov. 25, 2009.
94 As discussed in greater detail below, with respect to a potential waiver standard applicable to small markets, we
seek comment on whether permitting common ownership in small markets, even between top-four stations, would
promote additional local news. See infra ¶ 53.
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viewpoints.95 Although we recognize the limitations of this finding for our analysis, since a top-four
prohibition does not guarantee the theoretical result,96 Media Ownership Study 9 provides some support
for maintaining at least four strong independent outlets. Furthermore, we recognize that, in some
instances, there may be other significant sources of viewpoint diversity in a market (e.g., local
newspapers or local radio stations). Nonetheless, because evidence suggests a link between more
independent television outlets and increased viewpoint diversity in a market and given the significance of
television as a source of local news and information, retaining the top-four prohibition should advance our
viewpoint diversity goal. We seek comment on Media Ownership Study 9’s findings, as well has how the
top-four prohibition impacts our viewpoint diversity goal.
43. Furthermore, we invite commenters to provide evidence demonstrating why a different
criterion might be more appropriate. For example, would it be more appropriate to impose a top-five or
the top-six prohibition in all markets or in certain markets? If so, why?
44. Unlike the other ownership rules we discuss here, the top-four component of the
Commission’s local television ownership rule relies on the in-market ranking of the stations to be
commonly owned, and this is subject to change over time. 97 Accordingly, the rule specifies that the ranks
of the stations are to be determined “[a]t the time of application to acquire or construct the station(s)….”
If, at that time, both stations are ranked among the top-four stations in the market, common ownership
would not be permitted. The Commission’s local television ownership rule intends, then, to prohibit an
entity from acquiring two top-four stations.98 However, a broadcaster that owns two television stations
located in the same market will not be required to divest a station “if the two merged stations
subsequently are both ranked among the top four stations in the market.”99 The Commission adopted this
approach to encourage licensees to improve the quality of the programming and operations of their
stations and so not to constrain commercial activity that is designed to effect such improvements.100
45. The point of applicability of the top-four prohibition at the time of an application to the
Commission creates a potential for evading the intent of the rule. Accordingly, we seek comment on
whether and, if so, how we should address circumstances in which a licensee obtains two in-market
stations, both of which are ranked among the top-four stations in the market through agreements that may
be considered the functional equivalent of a transfer of control or assignment of license in the context of
this rule, but that do not require an application or prior Commission approval. For example, an existing
licensee with two stations, one of which is among the top four stations in the market, purchases the
network affiliation of another top-four-ranked market station and airs that network’s programming on its
second, lower-ranked station. The licensees party to this transaction also exchange call signs. As a
consequence, the second, lower-ranked station becomes a top-four-ranked station and the licensee now


95 Media Ownership Study 9 at 26-27.
96 For example, a top-four prohibition does not guarantee competing pairs of firms — two firms presenting each
viewpoint — because, even with the prohibition in place, three or four firms could have the same viewpoint.
Additionally, there are many issues, and it is unlikely that media outlet viewpoints are perfectly correlated across all
of them.
97 The dual network rule, 47 C.F.R. § 73.658(g), which prohibits ownership of two top-four-ranked television
networks, relies on ranking, but the ranking is national in nature and is not subject to change over time; it is fixed
based on a date certain. The local radio rule does not consider the in-market rank of the commonly owned stations
to which it applies, nor do the cross-ownership provisions of the radio-television and newspaper-broadcast rules.
98 47 C.F.R. § 73.3555(b)(1)(i).
99 Review of the Commission’s Regulations Governing Television Broadcasting, MM Docket No. 91-221, Report
and Order, 14 FCC Rcd 12903, 12933, ¶ 64 (1999) (“1999 Ownership Order”).
100 Id. at 12933-34, ¶¶ 64-66.
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controls two top-four-ranked stations in the market, but no application has been filed and none was
required. How, if at all, should the Commission address such circumstances? Should we amend the top-
four prohibition to apply to these types of transactions? Should we focus on instances where licensees
swap network affiliations, regardless of whether other types of agreements that impact station operation
are also executed? How, if at all, should we address situations where a network offers an existing
duopoly owner (one top-four station and one station ranked outside the top four) a top-four-rated
affiliation for the lower-rated station, perhaps because the network is no longer satisfied with the existing
affiliate station and the duopoly owner has demonstrated superior station operation (i.e., earned the
affiliation on merit)? Does such a transaction undermine our local ownership rules or goals? If so, how
would we craft a rule to address such circumstances, while at the same time not unduly constraining
beneficial commercial activities?
46.
Eight-Voices Test. Under the eight-voices test, a merger between two in-market stations
will not be permitted unless there are at least eight independently owned commercial and noncommercial
televisions stations remaining in the market post merger, subject also to the top-four prohibition.101 The
Commission, in the previous media ownership proceeding, determined that it was necessary to retain the
eight-voices test in order to promote competition.102 Specifically, the Commission determined that
maintaining a minimum of eight independently owned-and-operated television stations in a market would
ensure that each market includes the four major networks (i.e., ABC, NBC, CBS, and Fox) and four
independent competitors, and thus would spur competition in program offerings, including local news and
public affairs programming.103 The Commission found that maintaining four independent competitors
was necessary to offset the competitive advantage generally held by the top four stations in a market.104
In addition, the Commission continued to count only full-power television stations as voices “because the
local television ownership rule is designed to preserve competition in the local television market.”105 We
propose to retain the eight-voices test for the reasons set forth in the 2006 Quadrennial Review Order and
seek comment on this proposal.106 Do any changes in the television marketplace warrant modification of
the eight-voices test? For example, would adopting a six- or seven-voices test better promote our
competition goal while allowing for additional common ownership?
47.
Though we propose to retain the eight-voices test, including the decision to exclude
nonbroadcast television media from the voice count, in the event we determine it is appropriate to
consider alternative sources of video programming in the local television ownership rule, we seek
comment specifically on whether market conditions have changed since the 2006 quadrennial proceeding
such that we should consider alternative sources of video programming in the voice count. If we should
consider additional sources of video programming, how should we account for those sources in the local
market? Should noncommercial stations be included in figuring out the number of voices in the market?
Or should we consider as an additional voice video programming delivered via MVPDs or Internet video


101 We note that neither the top-four prohibition nor the eight-voices test would apply under the existing rule if there
is no Grade B contour overlap between the stations in the proposed duopoly. See 47 C.F.R. § 73.3555(b).
102 2006 Quadrennial Review Order, 23 FCC Rcd at 2065, ¶ 99.
103 Id.
104 Id.
105 Id. at 2057, ¶ 80 n.259.
106 Id. at 2065, ¶ 99. We note that the current eight-voices test relies on Grade B contour overlap to determine
whether a voice is counted. Consistent with our decision to eliminate the Grade B contour overlap provision from
the local television ownership rule, we propose to also eliminate the Grade B contour overlap criterion from the
eight-voices test and rely instead on stations’ inclusion in the same DMA as a basis for applying the rule. We seek
comment on this proposal.
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programming if such programming is available to a certain portion of the local market? If so, what
should the threshold be and what source or sources of data should we rely on in determining whether the
threshold is met? Should we consider adoption rates? Should we consider, and if so how, the local or
non-local nature of the voice?
48.
As an alternative to the eight-voices test, we seek comment on whether to adopt a different
framework for determining whether to permit common ownership in a local market. For example, we
could adopt a tiered approach, similar to the local radio ownership rule, in which numerical ownership
limits are based on market rankings, such as the number of full-power television stations in the DMA or
the Nielsen DMA rank (based on television households). As discussed below, we tentatively propose to
retain the duopoly rule; therefore, any tiered approach we may adopt would be limited to two tiers (i.e.,
markets where an entity could own up to two stations and markets where an entity could own only one
station). Under such a tiered approach, how should we determine the number of stations/Nielsen DMA
rank associated with each tier? Do markets with similar numbers of television stations share particular
characteristics and, if so, what are those characteristics? Do DMAs of a similar Nielsen rank share certain
characteristics even though there may be a significant difference in the number of television stations? For
example, the Commission has previously determined that the top 20 DMAs are more vibrant and have
more media outlets than lower-ranked DMAs.107 What would be the benefits and/or drawbacks of such
an approach in the television ownership rule?
49.
If we were to adopt an approach other than the eight-voices test and determine that it is
appropriate to consider alternative sources of video programming, should we include alternative sources
of video programming in the new test, and, if so, how? For example, could video programming delivered
via MVPDs or the Internet be considered an additional market participant (i.e., the same as an additional
broadcast television station) so long as a certain portion of the market has access to one or more of these
services? In that case, what should that threshold be and what source or sources of data should we rely on
in determining whether the threshold is met? Should adoption also be considered? If we were to rely on
Nielsen DMA rank, how would we incorporate these alternative sources into our rule, as Nielsen’s
ranking system does not take such sources into account? Do DMAs of a certain size share certain
characteristics with respect to deployment and adoption of MVPDs and broadband Internet service?
50.
Numerical Limits. Under the current rule, a licensee can own up to two stations (i.e., a
duopoly) in a market, subject to the requirements discussed above. The Commission concluded in the
2006 Quadrennial Review Order that the duopoly rule remained necessary in the public interest to protect
competition despite the increase in media outlets within the last decade.108 The Commission also declined
to tighten the ownership limits, finding that the potential significant benefits from joint ownership
permitted under the current rule outweighed claims of harm to diversity and competition.109
51.
We propose to retain the current numerical limits. Based on the record in this proceeding,
we have not observed sufficient changes in the marketplace to allow an entity to own more than two
television stations in a local market. Moreover, we note that not every licensee owns the maximum
number of stations permissible under the existing duopoly rule. Therefore, if the owner of a single station
(or, singleton) believes the potential benefits of common ownership are necessary to compete effectively
in a market where additional duopolies are permitted; there are opportunities to combine with other
singletons under the existing rule. In addition, we do not believe that the record in this proceeding


107 Id. at 2041, 2064, ¶¶ 55, 64. For additional discussion of our findings regarding the top 20 DMAs in the context
of the Newspaper/Broadcast Cross-Ownership Rule, see infra ¶ 105.
108 2006 Quadrennial Review Order, 23 FCC Rcd at 2064, ¶ 97.
109 Id. at 2064-65, ¶ 98.
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supports limiting ownership to a single station in all local television markets.110 We seek comment on
these tentative conclusions. For example, is there evidence that the current rule has produced actual
harms to our policy goals such that tightening the numerical ownership limits would be justified?
Alternatively, is there evidence that existing duopolies in the largest markets require additional common
ownership to compete effectively, or that there are additional benefits in allowing existing duopolies to
acquire additional stations?
52.
Market Size Waivers. Commenters have raised concerns that prohibiting all mergers in
small markets could prevent broadcasters in these markets that may be facing severe competitive pressures
from realizing potential efficiencies that could be achieved through allowing common ownership, even of
top-rated stations, which could in turn promote our fundamental policy goals.111 Therefore, we seek
comment on whether we should adopt a waiver standard for stations in markets where our proposed rule
would limit station ownership to a single station for all licensees in the market and how such a standard
would affect our policy goals. In the event we determine such a waiver standard is appropriate, we seek
comment below on how such a standard should be structured.
53.
We seek comment specifically on whether allowing certain combinations in small markets,
even between top-four stations, would promote additional local news. The Local TV Coalition asserts that
outside of the largest markets often only a few dominant stations can afford an independent news operation
because stations in these markets earn less revenue than stations in large markets.112 Sainte Sepulveda,
which owns one station in a small market and entered into sharing agreements with another in-market
station, asserts that the savings generated by these sharing agreements are insufficient to implement a local
newsgathering and production facility.113 According to NAB, stations in small markets are earning less
profit than stations in large markets.114 In addition, NAB provides data that stations in small– and
medium– sized markets spend less on their news operations than stations in large markets both in absolute
terms and as a percentage of total station budget.115 NAB also submits data demonstrating that these
stations provide less local news content and devote less station staff to news production than stations in
large markets.116 We seek comment on whether adopting a waiver standard for small markets would


110 However, as discussed in greater detail below in paragraph 57 we seek comment on whether the ability to
multicast supports tightening of the numerical ownership limits.
111 See NAB Comments at 79-80; Coalition to Preserve Local TV Broadcasting (“Local TV Coalition”) Reply at 7-
9, 24; Small Market Coalition Comments at 1-2.
112 Local TV Coalition Reply at 9-10 (stating that in the Springfield, Missouri market (DMA 74), two of the big four
affiliates would likely lose money if they maintained independent news operations).
113 Sainte Sepulveda Comments at 5. Sainte Sepulveda is the licensee of KBVU-TV, Eureka, California. Id. at 1.
114 For instance, NAB states that the average pre-tax profits for stations in small–and medium–sized markets (DMAs
50-210) declined 63.7 percent from 1998-2008; by contrast, according to NAB, average pre-tax profits declined 50.8
percent in DMAs 1-49, though the most significant declines were sustained in DMAs 50-99 (67.1 percent) and
DMAs 150-210 (62.9 percent), with DMAs 100-149 fairing better, relatively speaking, with average declines of 39.7
percent. NAB Comments Att. C at 5, 8, 11, 14, 17.
115 NAB data indicate that stations in DMAs 1-25 spend an average of $10,830,833 (36.7 percent of total budget) on
news operations, while stations in DMAs 26-50 spend an average of $6,476,046 (28.3 percent of total budget).
NAB Comments Att. B, Mark J. Prak et al., The Economic Realities of Local Television News 2010 at 13 (“NAB
Comments Att. B”).
116 According to NAB data, in DMAs 1-25, stations on average provide 35.8 hours per week of local news
programming and devote 58 percent of station staff to news production; stations in DMAs 26-50 provide an average
of 29.3 hours per week of local news programming and 53 percent of station staff is involved in news production.
Id. at 11, 14. The data show a continuing decline in DMAs 51-100 (26.6 hours per week and 52 percent of station
staff), DMAs 101-150 (20.5 hours per week and 49 percent of station staff), and DMAs 151-210 (19.5 hours per
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promote more news offerings in these markets. In particular, we note that there is some evidence to
suggest that markets with six or fewer stations may be less able to support four local television news
operations.117 Should a market size waiver standard take this information into account? Would allowing
mergers under this proposed standard result in a loss of viewpoint diversity in those markets? If so, would
such mergers produce sufficient gains in competition and/or localism to overcome the reduction in
viewpoint diversity?
54.
We request comment also on the criteria we should adopt for any market size waiver
standard. Should we adopt some or all of our current failed/failing station waiver policy?118 What
financial documentation should we require? Alternatively, should we adopt a standard based simply on
structural considerations – the size of the market and the number of outlets? For example, should we
permit a combination if the number of independent media owners in the market post merger would be at
least two or three? If so, what independent media owners should we consider? Would this approach
create a race to merge that would reward the first to do so and foreclose other market stations from
achieving similar competitive advantages? Should we consider the combined market share of the stations
seeking to combine ownership? For example, should one of the criteria for a waiver be that the proposed
station combination would not exceed a certain percent of the audience or revenue share in the local
market? Should we require the applicants to make affirmative commitments to initiate/increase local news
offerings? If so, should we require the station owner to demonstrate compliance with that commitment
and for how long? Should we adopt specific penalties for noncompliance? What other factors should we
consider?
55.
Finally, should we consider alternative definitions of the markets in which this waiver
approach would apply? For example, should we adopt a less restrictive definition of those “small markets”
in which the rule would apply, perhaps by including those markets where a single duopoly would be
permitted under the proposed rule? We invite comment on whether these markets might benefit if top-four
combinations were permitted, with some restrictions, so that sufficient critical mass could be achieved to
support more and/or better local news and public affairs programming. For example, it may be that in such
markets the top four stations do not all produce local news and that only two or three news operations
could be supported by the market. In these circumstances, should we consider permitting mergers among
top-four stations but not between the number one and number two stations, or some variant thereof, if such
an outcome would increase the quantity and quality of local programming provided? We seek comment
on this approach and on the practical components of any rules to govern such situations.
56.
Multicasting. The digital television transition was completed on June 12, 2009.119 As a
result, all full-power television stations are now broadcasting in digital and have the ability to use their





week and 40 percent of station staff). Id. According to NAB data, in terms of actual staff size, stations in DMAs 1-
25 have an average news staff of 95 employees and stations in DMAs 26-50 have on average 74 news employees.
Id. at 14. The data also show a significant reduction in the average news staff in small and medium sized markets
(45 employees in DMAs 51-100; 36 employees in DMAs 101-150; and 20 employees in DMAs 151-210). Id.
117 For instance, according to FCC staff analysis of scheduling data from TMS, four or more stations each provide at
least 30 minutes of local news per day in 89.3 percent of markets with seven or more stations, as compared to only
22.5 percent of markets with six or fewer stations.
118 47 C.F.R. § 73.3555, Note 7.
119 The court in Prometheus II rejected Citizen Petitioners’ claim that the Commission’s decision not to consider the
digital transition in the 2006 quadrennial proceeding was arbitrary and capricious. Prometheus II, 652 F.3d at 461.
The court noted that the transition was not complete at the issuance of the 2006 Quadrennial Review Order and that
the Commission based its decision to retain the duopoly rule on a finding that the rule has not harmed competition in
local markets. Id. The court also noted that Citizen Petitioners were free to raise the issue in the 2010 quadrennial
proceeding, when the transition was complete. Id.
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available spectrum to broadcast not only their main program stream but also, if they choose, additional
program streams, an activity commonly referred to as multicasting. UCC et al. argue that the ability to
multicast justifies a return to the Commission’s previous single-station rule.120 According to UCC et al.,
multicasting allows broadcast stations to provide multiple program streams without acquiring an additional
in-market station.121 Furthermore, Time Warner Cable (“TWC”) argues that multicasting permits stations
to create “virtual duopolies” by affiliating with multiple networks and multicasting their programming.122
TWC identified a report asserting that 68 instance of dual affiliation exist that involve the Big Four
networks.123 On the other hand, Belo and NAB argue that multicasting is not a substitute for duopoly
ownership and does not justify retaining or tightening the local television ownership rule.124 They note
that multicast channels have difficulty attracting advertisers because these channels are not entitled to
must-carry rights and typically lack established programming line-ups.125 Furthermore, not all stations will
elect to air multiple program streams, instead using the available spectrum to provide mobile video, high-
quality, high-definition (“HD”) programming, or other innovative services.126
57.
With the digital transition complete, we seek comment on whether the transition has
eliminated the need for the local television ownership rule to permit common ownership in local television
markets. Specifically, does multicasting replicate the potential benefits to station owners and viewers
associated with owning a second in-market station (e.g., efficiency gains and improved programming) or
are there benefits unique to common ownership that cannot be replicated by multicasting? If we find that
multicasting does replicate the potential benefits of common ownership, both to station owners and
viewers, should we continue to permit common ownership? Should we limit the ability of station owners
to form dual affiliations involving certain networks? We seek comment on specific instances of dual
affiliation and on how such situations have impacted the markets where they occur. We note that
broadcasters are not required to use their additional spectrum to multicast, and that some stations will
instead elect to use their additional spectrum to offer other services (e.g., mobile video). How, if at all,
should that affect our decision regarding whether multicasting justifies a tightening of the duopoly rule?
We also seek comment on how multicasting is affecting stations in small markets, including specifically
whether stations in small markets have been successful in negotiating for MVPD carriage of their
subchannels and what revenue and viewer benefits these channels generate. We seek comment on whether
and how to consider multicasting with regard to any waiver standard in small markets.
58.
We note that Media Ownership Study 10, which studies the impact of the ownership rules
on multicasting, found some evidence to suggest that variations in ownership structure have little effect on
the extent of multicasting.127 Media Ownership Study 10 finds that other market characteristics, such as


120 UCC et al. Comments at 7 (referring to the pre-1999 local television ownership rule that limited ownership to a
single full-power television station in all television markets).
121 Id. at 7-8.
122 Letter from Mathew A. Brill, Latham & Watkins LLP, Counsel for Time Warner Cable (“TWC”), to Marlene H.
Dortch, Secretary, FCC, at 4 (Aug. 3, 2011).
123 Id. at n.15 (citing Price Colman, D2 Offers A1 Opportunity for Big Four Nets, TVNewsCheck, Apr. 20, 2011,
available at http://www.tvnewscheck.com/article/2011/04/20/50699/d2-offer-a1-opportunity-for-big-four-nets.)
124 Belo Comments at 9-10; NAB Reply at 17-18; but see Hearst Comments at 1 (asserting that multicast channels
should be considered voices).
125 Belo Comments at 10; NAB Reply at 17-18.
126 Belo Comments at 10-12; NAB Reply at 18.
127 Media Ownership Study 10, Broadcast Ownership Rules and Innovation 54, by Andrew S. Wise (“Media
Ownership Study 10”).
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market size and the number of television stations operating in a market, may have a greater impact on the
extent of multicasting than ownership structure.128 We seek comment on the findings of Media Ownership
Study 10.
59.
Minority and Female Ownership. According to DCS, there are still significant barriers to
entry by minority owners in both the traditional and new media industries; DCS supports measures to
facilitate minority media ownership.129 DCS states that minority-owned stations are more likely to provide
programming geared toward minority audiences and that minority communities are underserved as a result
of the lack of minority media ownership.130 We seek comment on how the proposed local television rule
would affect minority and female ownership opportunities. We seek comment on how promotion of
diverse television ownership promotes viewpoint diversity. We request commenters to provide additional
data supporting their positions.

B.

Local Radio Ownership Rule

1.

Introduction

60.
The Commission has intended the local radio ownership rule to promote competition,
diversity, and to some degree localism.131 The current local radio ownership rule, retained without
modification in the previous media ownership proceeding, allows an entity to own: (1) up to eight
commercial radio stations in radio markets with 45 or more radio stations, no more than five of which can
be in the same service (AM or FM), (2) up to seven commercial radio stations in radio markets with 30-44
radio stations, no more than four of which can be in the same service (AM or FM), (3) up to six
commercial radio stations in radio markets with 15-29 radio stations, no more than four of which can be
in the same service (AM or FM), and (4) up to five commercial radio stations in radio markets with 14 or
fewer radio stations, no more than three of which can be in the same service (AM or FM), provided that
an entity may not own more than 50 percent of the stations in such a market, except that an entity may
always own a single AM and single FM station combination.132 In Prometheus II, the Court upheld the
Commission’s decision in the last media ownership proceeding to retain the local radio ownership rule,
specifically concluding that the Commission was justified in retaining the existing numerical limits and
the AM/FM subcaps.133
61.
Based on the record in this proceeding, we tentatively conclude that the current local radio
ownership rule remains necessary in the public interest as a result of competition.134 We tentatively agree
with the Commission’s previous determination that competition-based radio ownership limits promote
viewpoint diversity “by ensuring a sufficient number of independent radio voices and by preserving a


128 Id.
129 DCS Comments at 3-5, 7-9, 18-20.
130 Id. at 11-14; see also id. at 12 (citing Sandoval et al. Minority Commercial Radio Ownership in 2009) (“A study
published in 2009 shows that approximately 73 percent of minority-owned stations serve the community by
broadcasting minority oriented programming . . . .”).
131 2006 Quadrennial Review Order, 23 FCC Rcd at 2072, 2075, 2077 ¶¶ 117, 124, 127; see also NOI, 25 FCC Rcd
at 6094, ¶ 21.
132 47 C.F.R. § 73.3555(a).
133 Prometheus II, 652 F.3d at 462-63. With respect to the AM/FM subcaps, the Court also concluded that the
Commission was “justified in declining to rely on [the transition to digital radio] in evaluating the [subcaps].” Id. at
463.
134 Section 202(h) of the 1996 Act, 47 U.S.C. § 303 note.
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market structure that facilitates and encourages new entry into the local media market.”135 We also
tentatively agree with the Commission’s previous determination that a competitive local radio market
helps to promote localism, as a competitive marketplace will lead to the selection of programming that is
responsive to the needs and interests of the local community.136 We seek comment on these tentative
conclusions.
62.
As discussed in greater detail below, we tentatively conclude that we should retain the
existing numerical ownership limits and market tiers, but still seek comment on whether to change the
existing numerical limits and/or market tiers. We also propose to retain the AM/FM subcaps, but seek
comment on the impact of the ongoing digital radio transition on the differences between AM and FM
stations. In addition, we seek comment on whether to adopt a specific waiver standard and, if so, what
criteria to apply. Finally, we seek comment on the impact of our local radio ownership rule on minority
and female ownership.
2.

Background

63.
In the NOI, we sought comment on whether the current local radio numerical ownership
limits are appropriate to achieve our policy goals and whether to account for other sources of audio
programming in the rule.137
64.
Broadcasters generally support loosening the ownership limits, contending that common
ownership of radio stations in the same market does not harm competition, as consolidation has been
shown to have no effect on advertising rates.138 In addition, broadcasters assert that radio stations can,
and do, change formats with ease, which they claim should make the possibility of coordinated behavior
among owners an insignificant concern to the Commission.139 Moreover, broadcasters argue that radio
ownership limits are not necessary to foster program diversity or localism.140 According to Clear
Channel, econometric analysis from the 2006 quadrennial review shows that group ownership of radio
stations has enhanced diversity of programs and music formats and substantially increased radio
broadcasters’ ability to serve the local needs and interests of their communities.141 Clear Channel states
that the company’s experience demonstrates that group owners have natural incentives to counter-


135 2006 Quadrennial Review Order, 23 FCC Rcd at 2077, ¶ 127 (citing 2002 Biennial Review Order, 18 FCC Rcd
at 13739, ¶¶ 305-06).
136 2006 Quadrennial Review Order, 23 FCC Rcd at 2075, ¶ 124; 2002 Biennial Review Order, 18 FCC Rcd at
13738, ¶ 304 (citing generally Revision of Radio Rules and Policies, MM Docket No. 91-140, Report and Order, 7
FCC Rcd 2755 (1992) (“1992 Radio Ownership Order”); Amendment of Section 73.3555 of the Commission’s
Rules, the Broadcast Multiple Ownership Rules
, MM Docket No. 87-7, First Report and Order, 4 FCC Rcd 1723
(1989)).
137 NOI, 25 FCC Rcd at 6112, ¶ 86.
138 See, e.g., NAB Comments at 86-90; NAB Reply at 20-22.
139 See Clear Channel Comments at 14-18.
140 See id. at 21; NAB Comments at 30.
141 Clear Channel Comments at 21-22; see also NAB Comments at 31-34, 87; NAB Reply at 22. Clear Channel’s
econometric analysis relates to the impact of common ownership on format diversity. The Commission has
previously “declined to rely on format diversity to justify the local radio ownership rule.” 2006 Quadrennial Review
Order
, 23 FCC Rcd at 2077, 2078, ¶¶ 127, 129; see also 2002 Biennial Review Order, 18 FCC Rcd at 13742, ¶ 315.
In this proceeding, we tentatively conclude that we should focus our analysis on viewpoint diversity. We seek
comment on this tentative conclusion.
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program their stations and that there are efficiencies and economies associated with higher levels of
common ownership.142
65.
Public interest groups urge the Commission to retain the local radio ownership rule and
argue that radio station ownership caps are key to preventing the concentration of economic, social, and
political power.143 Communications Workers of America (“CWA”) states that “in 1996, there were
10,257 commercial radio stations and 5,133 radio owners.”144 In 2010, “there [were] 11,202 commercial
radio stations and 3,143 owners, representing a 39 percent decrease in the number of owners since
1996.”145 Future of Media Coalition (“FMC”) argues that consolidation in the radio industry “has no
demonstrable public benefit” and that “[r]adio programming from the largest station groups remains
focused on just a few formats — many of which overlap with each other, creating further
homogenization.”146
66.
In our studies we sought data to help us determine how best to structure a local radio
ownership rule to satisfy our policy goals. Particularly relevant to the local radio rule, Media Ownership
Study 5 analyzes the quantity of radio stations that are classified as news-formatted stations in the top 300
Arbitron metro areas.147 Media Ownership Study 7 addresses radio station ownership structure and
minority-targeted programming using data on radio station formats.148
3.

Discussion

67.
Market. Broadcasters generally assert that they are facing increased competition from new
audio platforms and that this increased competition has led, at least in part, to a reduction in advertising
revenues, which could threaten the continued viability of the broadcast radio industry.149 Broadcasters
contend that Internet-based audio platforms such as Pandora and Apple’s iTunes have “transitioned — in
just a few years — from new market entrants to full-fledged competitors of terrestrial radio
broadcasters.”150 Broadcasters assert that none of the new competitors to free, over-the-air radio
broadcasting are constrained by government-imposed limits on the number of outlets that can be owned,
and therefore, limiting ownership of broadcast stations places broadcasters at a disadvantage.151 For this
reason, according to broadcasters, we should modify our local radio ownership rule to permit increased
common ownership in local markets.152
68.
We tentatively conclude that broadcast radio stations compete in the radio listening market
and that it is not appropriate, at this time, to expand the relevant market to include nonbroadcast sources


142 Clear Channel Comments at 21.
143 FMC Comments at 15-17; see also CWA Comments at 35-36; UCC et al. Comments at 9.
144 CWA Comments at 35.
145 Id. at 35-36.
146 FMC Comments at 5.
147 Media Ownership Study 5, Station Ownership and the Provision and Consumption of Radio News, by Joel
Waldfogel (“Media Ownership Study 5”).
148 Media Ownership Study 7, Radio Station Ownership Structure and the Provision of Programming to Minority
Audiences: Evidence from 2005-2009, by Joel Waldfogel (“Media Ownership Study 7”).
149 See Clear Channel Comments at 8-11, 35-37; NAB Comments at 63-64, 90.
150 Clear Channel Comments at 9.
151 See, e.g., NAB Comments at 5.
152 See Clear Channel Comments at 1; NAB Comments at 90.
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of audio programming.153 We note that the current record suggests that the audio marketplace has
changed since the last media ownership review in terms of the number of choices consumers have to
access audio programming, the number of audio programming providers, and audio programming
choices. For instance, satellite radio subscribership has grown significantly, and millions of listeners now
access audio content via the Internet.154 However, satellite radio still only serves a small portion of all
radio listeners and millions of listeners do not have broadband Internet access. Moreover, these audio
programming alternatives are national platforms that are not likely to respond to conditions in local
markets. Therefore, we propose that our local radio ownership rule continue to focus on promoting
competition among broadcast radio stations in local radio listening markets. We seek comment on these
tentative conclusions.
69.
These tentative conclusions not withstanding, we seek additional comment on the impact
of new audio technologies on the continued viability of broadcast radio stations. Broadcast radio
audiences appear stable, the recent decline in advertising has been replaced by gains in 2010, and overall
advertising revenue share is predicted to decline only slightly through 2019.155 Does the apparent
resiliency of the broadcast radio industry despite the growth of new technologies suggest that broadcast
radio is unique? If so, what characteristics of broadcast radio make it unique, and is it appropriate to
consider other technologies in our local radio ownership rule? How, if at all, do nonbroadcast sources of
audio programming contribute to our policy goals? For example, do these alternatives to broadcast radio
make programming and/or business decisions based on competitive considerations in local markets?
Should we determine that, contrary to our tentative conclusion, our local radio ownership rule should
focus on promoting competition among broadcast radio stations and alternatives to broadcast radio
stations in local radio markets, we seek comment below on whether and how to include these sources in
the rule, either in determining market size or in setting the numerical limits.
70.
Market Size Tiers. We propose to retain the current approach of numerical ownership
limits based on market size tiers. Based on the Commission’s years of experience in applying the rule, we
believe that the existing framework best ensures that the local radio ownership rule serves our policy
goals and that limiting common ownership helps to prevent the formation of market power in local
markets by ensuring that a few owners cannot “lock up” the available—limited—radio spectrum in a local
market. Moreover, this bright-line approach provides transaction participants with a clear understanding


153 This tentative conclusion is consistent with previous Commission decisions to not expand the relevant market to
include satellite radio and Internet audio streaming. See 2006 Quadrennial Review Order, 23 FCC Rcd at 2071, ¶
114; 2002 Biennial Review Order, 18 FCC Rcd at 13715, ¶ 245. The Commission has also found previously that
radio broadcasters compete in the radio advertising and radio program production markets. 2006 Quadrennial
Review Order
, 23 FCC Rcd at 2071, ¶ 114; 2002 Biennial Review Order, 18 FCC Rcd at 13713-15, 13716, ¶¶ 243-
244, 247. We tentatively conclude that these markets do not have a direct impact on consumers and should not be
the focus of our inquiry. We seek comment on these tentative conclusions.
154 ARBITRON & EDISON RESEARCH, THE INFINITE DIAL 2010: DIGITAL PLATFORMS AND THE FUTURE OF RADIO 18-
19 (2010), available at http://www.edisonresearch.com/infinite_dial_presentation_2010_revb.pdf (finding that as of
February 2010, over half the population had listened to online radio, with a weekly online radio audience of
approximately 43 million people); Sirius XM Radio Inc., SEC Form 10-K for the Year Ended December 31, 2010, at
34 (stating that as of December 31, 2010, there were 20,190,964 satellite radio subscribers, of which 13,104,972
were automobile subscribers).
155 See PEW CENTER’S PROJECT FOR EXCELLENCE IN JOURNALISM, THE STATE OF THE NEWS MEDIA 2011: AN
ANNUAL REPORT ON AMERICAN JOURNALISM, Key Findings (2011) (“STATE OF THE NEWS MEDIA 2011”), available
at
http://stateofthemedia.org (stating that 93 percent of Americans listened to at least some radio in an average week
in 2010, only a 3 percent drop in the last decade ); Radio Advertising Bureau, Radio Revenue Trends,
http://www.rab.com/public/pr/yearly.cfm (showing a 6 percent increase in broadcast radio revenue in 2010) (visited
Oct. 19, 2011); SNL KAGAN ADVERTISING FORECASTS 2010 at 21, 126 (predicting revenue growth in 2010 and
small loss in total market share through 2019).
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of which transactions comply with the ownership limitations and allows for timely processing of
assignment/transfer applications. We seek comment on these tentative conclusions.
71.
We tentatively conclude that we will continue to determine market size based on the
number of commercial and noncommercial radio stations in the relevant local market.156 This tentative
conclusion is consistent with our goal of promoting competition among local broadcast radio stations and
the Commission’s decisions in the previous two media ownership proceedings not to consider
nonbroadcast programming in the rule itself.157 However, to the extent we determine it is appropriate to
consider these alternative sources in our rule, we seek comment on whether to count these alternative
sources in defining market size to determine how many stations an entity may own, and, if so, how. To
what extent does the presence of these alternatives vary by market (e.g., Internet-based audio services) or
remain constant across markets (e.g., satellite radio)? Should we consider broadband deployment and/or
adoption in a particular local market when determining whether to count Internet-based audio services?
Should we consider fixed or wireless broadband, or both? How much online radio listening is devoted to
streams of broadcast radio stations, and how should this amount impact the weight of the impact of
internet audio streaming in local markets? Should we consider availability and/or adoption of satellite
radio in local markets?
72.
Numerical Limits. We tentatively conclude that we should retain the existing numerical
ownership limits for each existing market size tier. The Commission retained these numerical limits in
the last media ownership proceeding, finding that public interest would not be served either by relaxing
the numerical limits or by making the numerical limits more restrictive.158 In light of the degree of
consolidation in the broadcast radio market following the relaxation of the local radio ownership limits in
the 1996 Act, we continue to believe that further relaxation of the numerical limits is not appropriate.
Furthermore, we continue to believe that making the limits more restrictive would be inconsistent with
Congress’s decision to relax the ownership limits and too disruptive to the radio marketplace. In light of
these considerations, we tentatively conclude that it is appropriate to continue to retain the numerical
ownership limits adopted by Congress in the 1996 Act.
73.
We seek comment, however, on whether to adopt any changes to the numerical ownership
limits. Is there evidence that the existing limits no longer serve our policy goals or have caused specific
harm to the radio broadcast industry? Do changes in the marketplace require modification of these limits,
or do the characteristics of certain markets justify increasing the ownership limits in those markets? For
example, should we allow additional common ownership in markets with substantially more than 45
stations, now the top tier? Some larger radio markets may contain more than 100 stations, yet the
ownership limit is the same – eight stations – in each. Should we, as Clear Channel suggests, allow for
increased common ownership in larger markets by creating additional tiers?159
74.
As an alternative to considering nonbroadcast audio programming in determining the size
of a radio market, to the extent we determine it is appropriate to consider these sources in our rule, we
seek comment on whether to include these sources when setting the numerical limits and, if so, how we
would do so. For example, we could allow for ownership of an additional station in markets where


156 See 2002 Biennial Review Order, 18 FCC Rcd at 13726-28, ¶¶ 279-86 (providing geographic market definitions
for Arbitron Metros and areas not located in Arbitron Metros).
157 See 2006 Quadrennial Review Order, 23 FCC Rcd at 2071, ¶ 114; 2002 Biennial Review Order, 18 FCC Rcd at
13715, ¶ 245.
158 2006 Quadrennial Review Order, 23 FCC Rcd at 2072, ¶ 117.
159 Clear Channel suggests an increase from eight to ten in the number of stations a single entity may own in markets
with between 55 and 64 stations and from eight to twelve the number of stations that a single entity may own in
markets with 65 or more stations. Clear Channel Comments at 33.
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alternative sources of audio programming are available, even though the market tier was established
solely by the number of broadcast radio stations in the market. If we do so, how should we determine
whether such sources are available? For example, are Internet-based audio services consistently available
across markets of similar sizes? Should we take adoption rates into account? For example, satellite radio
is generally consistently available across a local market, but the number of subscribers remains low
compared to the total number of radio listeners. How should this factor into our consideration of the
impact of satellite radio in local markets?
75.
AM/FM Subcaps. In the NOI, we sought comment on whether to retain the AM/FM
subcaps.160 The Commission previously concluded that retaining the subcaps serves the public interest by
promoting new entry into broadcast radio ownership, particularly by small businesses, including
minority- and women-owned businesses.161 The Commission also concluded that technical and
marketplace differences between AM and FM stations supported retention of the subcaps, consistent with
the Commission’s goal to protect competition in local radio markets.162
76.
Those advocating elimination of the subcaps argue that recent advances in technology,
including online streaming, HD radio technology, and the use of FM translators to augment AM station
broadcast signals, have improved the ability of AM radio to compete in the marketplace.163 In addition,
they assert that many of the top stations in large and small markets are AM stations, which undercuts any
argument that AM radio will flounder if the subcaps are removed.164 Some broadcasters also assert that
lifting the subcaps will create new ownership opportunities of divested station for entities, which include
minorities, women, and small businesses, because broadcasters will buy and sell certain in-market stations
to strengthen existing station clusters.165 In addition, they state that the owners of these station clusters
would then be in better financial positions to devote additional resources to local programming.166 Mt.
Wilson, however, asserts that subcaps remain necessary to promote competition in local radio markets.167
77.
We propose to retain the current AM/FM subcaps for the reasons set forth in the 2006
Quadrennial Review Order.168 We continue to believe that this rationale supports retention of the
subcaps, and we seek comment on this proposal.
78.
In addition, we seek comment on the impact, if any, of the ongoing introduction of digital
radio on the AM/FM subcaps. AM stations face unique technical limitations with respect to FM stations,
such as lesser bandwidth and inferior audio signal fidelity. In addition, unlike FM signals, AM signal
propagation varies with the time of day (i.e., AM signals travel much farther at night than during the day),
and many AM stations are required to cease operation at sunset. As a result, FM stations tend to have
greater listenership and revenues than AM stations, though this is not necessarily true of all stations in all


160 NOI, 25 FCC Rcd at 6112, ¶ 86.
161 2006 Quadrennial Review Order, 23 FCC Rcd at 2079-80, ¶ 133.
162 Id. at 2080, ¶ 134.
163 See, e.g., Entercom Reply at 1-2; Alpha Broadcasting et al. Reply at 3-4; Letter from Lawrence R. Sidman,
Representative of Clear Channel, to Marlene H. Dortch, Secretary, FCC (Oct. 11, 2011) (Clear Channel Oct. 11 Ex
Parte).
164 Entercom Reply at 2; see also Monterey Comments at 2, 5-6; Galaxy Reply at 4.
165 Alpha Broadcasting et al. Reply at 5-6; Clear Channel Oct. 11 Ex Parte Letter at 1.
166 Id.
167 Mt. Wilson Reply at 9-10. Indeed, Mt. Wilson suggests that even more restrictive subcaps, along with
divestitures, should be adopted. Id.
168 2006 Quadrennial Review Order, 23 FCC Rcd at 2078-80, ¶¶ 130-34.
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markets. The Commission has previously stated that digital radio may help AM stations to even the
playing field with FM stations.169
79.
What is the impact of digital radio on the technological and economic differences
between AM and FM stations? We note that, unlike the digital television transition, radio stations have
no obligation to operate in digital mode.170 At present, far more FM stations have provided the
Commission with a notice of commencement of digital operations than AM stations, though the vast
majority of stations in both services have not provided such notice.171 How, if at all, should these facts
inform our analysis of the impact of digital operations on the AM/FM subcaps? At this stage, has digital
radio helped address the technical disadvantages of AM stations, such as fidelity and signal propagation,
and led to a more balanced competition between AM and FM stations generally? Is it premature to
consider the impact of digital radio, given the lack of widespread digital radio options (both AM and
FM)? How, if at all, should the lack of a deadline to operate in digital affect this decision? Should we
also consider the level of consumer adoption when determining the impact of digital operations on the
subcaps? What are the current levels of commercial availability and consumer adoption of radios capable
of receiving digital signals?
80.
Some broadcasters support elimination of the subcaps so they can acquire additional AM
stations in order to aggregate AM stations to provide full signal coverage in large geographic areas or in
areas with mountainous terrain.172 We note that the Commission recently changed the FM translator rules
“to allow AM stations to use currently authorized FM translator stations to retransmit their AM service
within their AM stations’ current coverage areas.”173 Approximately 500 AM stations are currently
retransmitting their signals via FM translators, which has allowed some AM stations to operate at night
for the first time and – according to anecdotal reports – has allowed certain AM stations to more
effectively serve their communities.174 In light of this success, we recently sought comment on whether
to extend this rebroadcast authority to new FM translators with applications for authorization on file as of
May 1, 2009.175 What has been the impact of the revised FM translator rule on the ability of AM stations
to provide expanded coverage in their service areas without the need to acquire additional AM stations?
If these stations are now able to provide expanded coverage in their service areas without acquiring
additional AM stations, is elimination of the AM/FM subcaps also necessary to address signal coverage


169 See, e.g., 2002 Biennial Review Order, 18 FCC Rcd at 13734, ¶ 294 n.628.
170 Digital Audio Broadcasting Systems and Their Impact on the Terrestrial Radio Broadcast Service, MM Docket
No. 99-325, Second Report and Order First Order on Reconsideration and Second Further Notice of Proposed
Rulemaking, 22 FCC Rcd 10344, 10351, ¶ 15 (2007).
171 Of the 9,950 licensed FM stations (commercial and educational), 1,667 have notified the Commission that they
have commenced digital operations (approximately 16.8 percent), while only 296 of the 4778 licensed AM stations
have filed such notifications (approximately 6.2 percent). FCC staff analysis of current CDBS data and broadcast
station totals as of December 31, 2010 reported in Broadcast Station Totals as of March 31, 2011, Press Release
(MB, rel. May 16, 2011) (“March 31, 2011 Broadcast Station Totals Press Release”), available at
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-306575A1.pdf.
172 See, e.g., Entercom Reply at 2.
173 Amendment of Service and Eligibility Rules for FM Broadcast Translator Stations, MB Docket No. 07-172,
Report and Order, 24 FCC Rcd 9642, 9642, ¶ 1 (2009).
174 Creation of a Low Power Radio Service, MM Docket No. 99-25, Third Further Notice of Proposed Rulemaking,
26 FCC Rcd 9986, 10000, ¶ 36 (2011) (“providing hundreds of these [AM] stations with their first nighttime
authority and the opportunity to operate viably at night. Anecdotal reports from many AM licensees repeatedly
emphasize their vastly increased ability to cover local community, governmental and school events, and, generally,
to better serve the needs of their communities.”).
175 Id. at 10000-01, ¶ 37.
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concerns? Why or why not? How, if at all, has this rule change impacted other AM
technical/competition concerns, aside from the signal coverage issue raised by some broadcasters?
81.
Market Size Waivers. The Commission has previously declined to adopt a specific waiver
standard for the local radio ownership rule; instead, parties “may seek a waiver under the ‘good cause’
waiver standard in [the Commission’s] rules.”176 Given the significant amount of common ownership
currently permitted, is a specific waiver standard warranted, or should applicants continue to be required
to justify a waiver of the rule under our general waiver standard? If we determine that a specific waiver
standard is warranted, what are appropriate waiver criteria? Should such a waiver standard apply equally
to all markets, regardless of size, or should we adopt different standards based on market size? Should we
limit the waiver standard to smaller markets? If so, what characteristics of those markets establish the
need for a specific waiver standard (to the exclusion of larger markets)?
82.
Minority and Female Ownership. As noted above, DCS suggests that significant barriers
to entry for minority ownership remain in both the traditional and new media industries. We seek
comment on DCS’ assertion that minority communities are underserved as a result of the lack of minority
media ownership, specifically as it relates to the radio market.177 Moreover, we seek comment on how
the local radio rule affects minority and female ownership opportunities. We ask that commenters be as
specific as possible when identifying particular aspects of the rule that may impact the opportunity for
minority and female entry into the radio business and ownership of broadcast stations. How is any such
impact relevant to our goals, in particular promoting viewpoint diversity?
83.
Media Ownership Study 7 analyzes the relationship between ownership structure and the
provision of radio programming targeted to African-American and Hispanic audiences.178
Acknowledging that Black and Hispanic listeners have different viewing preferences from the majority
White population, the data suggest that there is a positive relationship between minority ownership of
radio stations and the total amount of minority radio programming available in the market.179 The data do
not indicate a clear relationship between ownership concentration and programming variety, although the
cross-sectional analysis does suggest that concentration promotes variety.180 A minority-owned radio
station may not be more popular with minority audiences than a non-minority-owned radio station
providing the same minority-targeted format.181 If minority-owned stations have smaller coverage areas
they will necessarily have lower ratings and therefore appear less popular even though they may be more
popular among those consumers that can receive the signal.182 We seek comment on the methodology
and conclusions of Media Ownership Study 7 and how its conclusions should influence our decisions on
the proposed local radio rule. We request commenters to provide additional data supporting their
positions.

C.

Newspaper/Broadcast Cross-Ownership Rule

1.

Introduction

84.
Newspaper/broadcast cross-ownership was first prohibited in 1975 to preserve viewpoint


176 2002 Biennial Review Order, 18 FCC Rcd at 13746-47, ¶ 326 (citing 47 C.F.R. § 1.3).
177 DCS Comments at 11-15.
178 Media Ownership Study 7 at 1.
179 Id. at 13, 24.
180 Id. at 25.
181 See id. at 13.
182 See id.
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diversity in local markets.183 In the 2006 Quadrennial proceeding, the Commission concluded that some
limitations on newspaper/broadcast cross-ownership continued to be necessary to promote viewpoint
diversity.184 The Commission recognized, however, that certain newspaper/broadcast combinations may
promote its localism goal.185 It found that the opportunity for sharing newsgathering resources and for
realizing other efficiencies derived from economies of scale and scope may improve the ability of
commonly owned media outlets to provide local news and information.186 In the 2002 Biennial Review
Order
, the Commission determined that a ban on newspaper/broadcast cross-ownership was not necessary
to promote its competition goal.187 The Commission concluded that most advertisers do not consider
newspapers, television stations, and radio stations to be close substitutes for each other, and that therefore
newspapers and broadcast stations do not compete in the same product market.188
85.
The newspaper/broadcast cross-ownership rule prohibits common ownership of a full-
service broadcast station and a daily newspaper if: (1) a television station’s Grade A service contour
completely encompasses the newspaper’s city of publication; (2) the predicted or measured 2 mV/m
contour of an AM station completely encompasses the newspaper’s city of publication; or (3) the
predicted 1 mV/m contour for an FM station completely encompasses the newspaper’s city of
publication.189 In the 2006 Quadrennial proceeding, the Commission concluded that an absolute
prohibition on newspaper/broadcast combinations is overly broad.190 It added waiver provisions to the
rule whereby a waiver would be presumed to be not inconsistent with the public interest if a daily
newspaper in a top 20 DMA sought to combine with: (1) a radio station or (2) a television station, and (a)
the television station was not ranked among the top four stations in the DMA and (b) at least eight
independently owned and operated “major media voices” would remain in the DMA after the
combination.191 For purposes of the newspaper/television combinations, major media voices would
include full-power commercial and noncommercial television stations and major newspapers.192 For


183 1975 Second Report and Order, 50 FCC 2d at 1075, 1076, 1079-81, ¶¶ 101, 104, 111-12.
184 2006 Quadrennial Review Order, 23 FCC Rcd at 2038-39, ¶¶ 47-49; see also 2002 Biennial Review Order, 18
FCC Rcd at 13793-94, 13797-804, ¶¶ 440, 442, 452-69 (protecting diversity by prohibiting newspaper/broadcast
cross-ownership in “at-risk” markets and limiting newspaper/television cross-ownership in small- to medium-sized
markets). In 2004, the Third Circuit found that the Commission had “reasonably concluded” that restrictions on
newspaper/broadcast cross-ownership are necessary to promote diversity. Prometheus I, 373 F.3d at 400-01.
185 2006 Quadrennial Review Order, 23 FCC Rcd at 2038, ¶ 46 (finding that “the weight of evidence indicates that
cross-ownership can promote localism by increasing the amount of news and information transmitted by the co-
owned outlets”); 2002 Biennial Review Order, 18 FCC Rcd at 13753-60, 13760-61, ¶¶ 342-54, 356-58 (citing
evidence that broadcast stations owned by newspapers generally produce more and better overall local news
programming).
186 See 2006 Quadrennial Review Order, 23 FCC Rcd at 2032-33, ¶ 39 (noting that “[n]umerous media owners
provide examples of cost savings and shared resources leading to more local coverage and better quality news
coverage”); 2002 Biennial Review Order, 18 FCC Rcd at 13756-57, ¶¶ 347-49 (describing how sharing news staffs
and operational expenses can translate into improved local service). See also Media General Comments at 11
(attributing its winning a Pulitzer Prize to its ownership of both a newspaper and a television station in Bristol,
Virginia). But see AFTRA Comments at 10 (arguing that Tribune’s combining of news staffs in Hartford,
Connecticut diminished the journalistic standards of its commonly-owned newspaper and television station).
187 2002 Biennial Review Order, 18 FCC Rcd at 13753, ¶ 341.
188 Id. at 13748-53, ¶¶ 331-41; 2006 Quadrennial Review Order, 23 FCC Rcd at 2032, ¶ 39 n.131.
189 47 C.F.R. § 73.3555(d)(1).
190 2006 Quadrennial Review Order, 23 FCC Rcd at 2021-22, 2039, ¶¶ 18-19, 50.
191 47 C.F.R. § 73.3555(d)(3).
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markets below the top 20 DMAs, the Commission would presume a waiver of the newspaper/broadcast
cross-ownership rule to be inconsistent with the public interest.193
86.
Under the 2006 rule, a waiver applicant could overcome this negative presumption by
demonstrating, with clear and convincing evidence, that the merged entity would increase the diversity of
independent news outlets and the level of competition among independent news sources in the relevant
market.194 The Commission would reverse the negative presumption in two limited circumstances: (1)
when the proposed combination involved a failed/failing station or newspaper, or (2) when the proposed
combination was with a broadcast station that was not offering local newscasts prior to the combination,
and the station would initiate at least seven hours per week of local news after the combination.195
87.
Under both presumptions, the following four factors would inform the Commission’s
review of a proposed combination: (1) the extent to which cross-ownership would serve to increase the
amount of local news disseminated through the affected media outlets in the combination; (2) the ability
of each affected media outlet in the combination to employ its own staff exercise its own independent
news judgment; (3) the level of concentration in the DMA; and (4) the financial condition of the
newspaper or broadcast station, and if the newspaper or broadcast station was in financial distress, the
owner's commitment to invest significantly in newsroom operations.196
88.
In Prometheus II, the Third Circuit vacated and remanded the newspaper/broadcast cross-
ownership rule as modified by the Commission in the 2006 Quadrennial proceeding.197 The court based
its decision on its conclusion that the Commission failed to comply with the notice and comment
provisions of the Administrative Procedures Act. 198 The court did not address the Commission’s
substantive modifications to the rule.199 Because the court reinstated the former rule, the absolute ban on
newspaper/broadcast cross-ownership remains in effect, with no specific provision for waivers.200
89.
Consistent with previous Commission findings, we tentatively conclude that some
newspaper/broadcast cross-ownership restrictions continue to be necessary to protect and promote
viewpoint diversity. Research shows that newspapers and local television stations, and their affiliated
websites, are the primary sources that consumers rely on for local news.201 We continue to believe,





192 Id. at § 73.3555(d)(3)(ii); see also NOI, 25 FCC Rcd at 6095, ¶ 23.
193 47 C.F.R. § 73.3555(d)(4); see also NOI, 25 FCC Rcd at 6095-96, ¶ 24.
194 47 C.F.R. § 73.3555(d)(6).
195 Id. at § 73.3555(d)(7).
196 Id. at § 73.3555(d)(5).
197 Prometheus II, 652 F.3d at 453.
198 Id. at 445, 453.
199 Id. at 445.
200 Id. at 453 n.25.
201 See PEW RESEARCH CENTER’S PROJECT FOR EXCELLENCE IN JOURNALISM, PEW INTERNET & AMERICAN LIFE
PROJECT, AND THE KNIGHT FOUNDATION, HOW PEOPLE LEARN ABOUT THEIR LOCAL COMMUNITY (2011) (“HOW
PEOPLE LEARN ABOUT THEIR LOCAL COMMUNITY”), available at
http://www.knightfoundation.org/media/uploads/publication_pdfs/Pew_Knight_Local_News_Report_FINAL.pdf.
The survey asked consumers which source they rely upon most for news and information regarding 16 local topics.
Id. at 2, Figure 1. Newspapers ranked first, or tied for first, for 11of the 16 topics. Id. at 1, 14-15. Newspapers and
local television stations together ranked first, or tied for first, for 14 out of 16 topics. Id. at 14-15, 17. The survey
also found that 74 percent of American adults say they get local information at least weekly from a local television
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however, that a blanket prohibition on newspaper/broadcast combinations is overly broad and does not
allow for certain cross-ownership that may carry public interest benefits.202 We tentatively affirm our
earlier findings that the opportunity to share newsgathering resources and realize other efficiencies
derived from economies of scale and scope may improve the ability of commonly owned media outlets to
provide local news and information,203 and we seek comment on how cross-ownership may promote our
localism goal.204 We tentatively conclude, as the Commission found in previous ownership reviews, that
newspapers and broadcast stations do not compete in the same product market and, therefore, that the rule
is not necessary to promote our competition goal.205
90.
We continue to believe that the nation’s largest markets can accommodate some cross-
ownership without unduly harming viewpoint diversity.206 For reasons set forth below, we propose to
adopt a rule that includes elements of the 2006 rule, including the top 20 DMA demarcation point, the





news station broadcast, and/or the station’s website, the most of any source measured in the survey. Id. at 13. In
comparison, radio and local newspapers were each listed by about half of the survey respondents. Id.
202 Prometheus I, 373 F.3d at 398-400 (affirming that a blanket prohibition on newspaper/broadcast cross-ownership
is not necessary to protect diversity and may hinder opportunities to advance localism goals).
203 See 2006 Quadrennial Review Order, 23 FCC Rcd at 2032-33, ¶ 39 (noting that “[n]umerous media owners
provide examples of cost savings and shared resources leading to more local coverage and better quality news
coverage”); 2002 Biennial Review Order, 18 FCC Rcd at 13756-57, ¶¶ 347-49 (describing how sharing news staffs
and operational expenses can translate into improved local service). Media General contends that its newspaper in
Bristol, Virginia, won a Pulitzer Prize in part because of shared resources with Media General’s television station in
that market. See Media General Comments at 11; Letter from M. Anne Swanson, Dow Lohnes PLLC, Counsel for
Media General, Inc., to Marlene H. Dortch, Secretary, FCC, at 1-2 (May 20, 2010); Letter from M. Anne Swanson,
Dow Lohnes PLLC, Counsel for Media General, Inc., to Marlene H. Dortch, Secretary, FCC, at 1 (Apr. 26, 2010)
(“Media General Apr. 26 Ex Parte Letter”). See also Media General Apr. 26 Ex Parte Letter at 2 (providing
examples of how cross-ownership in Tampa, Florida, “has helped improve the delivery of breaking news, enterprise
reporting, and investigative reporting”). But see AFTRA Comments at 10 (arguing that Tribune’s combining of
news staffs in Hartford, Connecticut diminished the journalistic standards of its commonly-owned newspaper and
television station); Letter from Jim Haigh, Mid-Atlantic Community Papers Association, to Marlene H. Dortch,
Secretary, FCC, at 1 (Oct. 2, 2010) (warning that “the worst possible outcome for [the community paper] industry,
the truly local communities they serve and the greater public interest, would be the widespread formation of outsized
cross-media entities leveraging traditional advantages”).
204 We note here the observations of the Information Needs of Communities Report with regard to
newspaper/broadcast cross-ownership. STEVE WALDMAN AND THE WORKING GROUP ON INFORMATION NEEDS OF
COMMUNITIES, FCC, THE INFORMATION NEEDS OF COMMUNITIES: THE CHANGING MEDIA LANDSCAPE IN A
BROADBAND AGE 349 (2011) (“INFORMATION NEEDS OF COMMUNITIES”), available at
http://transition.fcc.gov/osp/inc-report/The_Information_Needs_of_Communities.pdf. The report was written by an
ongoing, informal working group that consisted of Commission staff, industry scholars, and consultants. Id. at 362.
As noted in the report, the views expressed in the report “do not necessarily represent the views of the Federal
Communications Commission, its Commissioners or any individual Bureaus or Offices.” Id. The report observes
that newspaper/television cross-ownership “could lead to efficiencies and improved business models that might
result in more reporting resources,” thereby promoting the Commission’s localism goal. Id. at 349. The report
cautioned, however, that cross-ownership may instead “simply improve the bottom line of a combined company
without actually increasing the resources devoted to local newsgathering.” Id. (emphasis in original).
205 2002 Biennial Review Order, 18 FCC Rcd at 13748-53, ¶¶ 331-41; 2006 Quadrennial Review Order, 23 FCC
Rcd at 2032, ¶ 39 n.131.
206 The Information Needs of Communities Report found that more television stations offer local news in large
markets than in medium and small markets. INFORMATION NEEDS OF COMMUNITIES at 100-01. It determined that
91 of the 92 markets that produced 500 minutes or less of local television news per day (when combining all the
stations) were medium or small markets. Id. at 101.
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top-four television station restriction, and the eight remaining voices test. We tentatively conclude that
viewpoint diversity is best achieved by analyzing these elements for proposed newspaper/broadcast
combinations on a case-by-case basis. We seek comment on whether alternative approaches or different
demarcations and restrictions would promote our diversity goal more effectively. For
newspaper/television combinations, we propose to use Nielsen DMA definitions to determine when the
rule is triggered, given the lack of a digital equivalent to the analog Grade A service contour.
91.
The 2006 rule contained some elements that may not be necessary to promote the public
interest. Specifically, as explained below, we seek comment on whether the detailed elements describing
what showings are required to overcome the rule’s stated presumptions and the showings required of all
applicants unnecessarily increased the rule’s subjectivity and complexity. We also seek comment on
whether to retain some or all of the factors the Commission adopted under the 2006 rule to consider in
cross-ownership transactions.207 We also solicit input on whether to formulate a specific waiver provision
that relies on clear, objective, and enforceable standards and a burden of proof standard for waiver
requests. Finally, we seek comment on the impact of our newspaper/broadcast cross-ownership proposals
on minority and female ownership opportunities.
2.

Background

92.
In the NOI, we asked whether newspaper/television combinations should be treated
differently from newspaper/radio combinations, as they are in the 2006 rule.208 We sought comment on
the impact of marketplace changes in the newspaper industry, which has seen increased competition for
audiences and declining revenues. We elicited input on the extent to which relaxing the rule could benefit
newspapers and result in a net gain of local news and information.209 In the NOI, we noted that
consumers are increasingly getting their news from online and mobile platforms and asked about the
significance of this trend for the newspaper industry.210 We sought comment on whether relief from the
2006 rule, if any, should be provided through a revised rule or a waiver standard, and the factors that
should apply under either approach.211 For example, we asked whether distinctions should be drawn
based on market size and the number of voices remaining post-transaction.212 We sought comment also
on how to evaluate the efficacy of the rule in terms of our goals and the effects on the market
participants.213
93.
Among the commenters responding to the NOI, newspaper and broadcast owners
recommend repeal or relaxation of the rule, and public advocacy groups support the rule’s retention.
Supporters of repeal or relaxation of the rule argue that cross-ownership enhances localism and supports
diverse points of view.214 They describe an evolution of the marketplace, including introduction of the


207 See supra ¶¶ 86-87.
208 NOI, 25 FCC Rcd at 6112-13, ¶ 87.
209 Id.
210 Id.
211 Id.
212 Id.
213 Id.
214 See Media General Comments at 11-12 (contending that greater resources available because of Media General’s
multiple news outlets, including television stations and newspapers, permit multi-part award-winning series while
also covering other important local developments and noting launch of additional Spanish-language publication); see
also
A. H. Belo Comments at 8-13 (detailing benefits derived from cross-ownership through its experience as owner
of a newspaper/broadcast combination in Dallas-Fort Worth); Tribune Comments at 18-68 (detailing benefits
derived from cross-ownership through its experience as owner of newspaper/broadcast combinations in five media
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Internet and other non-traditional media, such as iPhone applications, that they assert provide local and
diverse content.215 They describe serious economic challenges faced by newspapers and suggest that the
only way for them to survive is by entering combinations and creating economies of scale.216
Commenters state that: newspaper circulation is in a downward spiral since 2008, reaching its lowest
point in nearly 70 years in October 2009; advertising revenues, which traditionally make up 80 percent of
overall newspaper revenues, have dropped 43 percent from 2007 through 2009; and several newspaper
publishers have sought bankruptcy protection, while others have ended their print editions.217 They state
that the newspapers that remain in business have closed domestic and foreign bureaus, laying off
thousands of journalists.218 Newspaper Association of America (“NAA”) cites to Project for Excellence
in Journalism’s (“PEJ”) recent estimate that newspapers will devote $1.6 billion less annually to news
reporting in 2010 than they were able to do just three years ago.219
94.
Supporters of the 2006 rule– or a strengthened rule– assert that restrictions remain
necessary to protect against further concentration in an industry already characterized by concentrated
vertical ownership and consolidated local ownership.220 They argue that the 2006 rule provides
flexibility where cross-ownership efficiencies might benefit the public interest and permit combinations in
failing business situations, while requiring maintenance of separate newsrooms for the purpose of
diversity.221 They argue that the only benefits of cross-ownership are financial benefits for the owners,
which they assert arise at the cost of diversity and localism for citizens.222
95.
In our studies, we sought data to help us analyze questions related to the relevance of the
newspaper/broadcast cross-ownership rule to our policy goals. Particularly, we measured whether the
presence of cross-owned stations affects the amount of local news provided at the local market level and
at the individual station level. We also measured localism by analyzing consumer satisfaction with the
amount of local news available in markets. In addition, we studied the impact of cross-ownership on
viewpoint diversity in media markets. We seek comment on the extent to which our proposed approaches
for newspaper/television combinations are supported by data from our studies or other available data.
3.

Discussion

96.
We tentatively conclude that some restrictions on newspaper/broadcast combinations
continue to be necessary to promote viewpoint diversity within local markets. We seek comment on this
tentative conclusion. There is evidence that Americans continue to rely on local television stations and





markets); Letter from M. Anne Swanson, Dow Lohnes PLLC, Counsel for Media General, Inc., to Marlene H.
Dortch, Secretary, FCC, Att. 3 at 2 (July 21, 2011) (“Media General July 21 Ex Parte Letter”) (arguing that the
“voluminous” record on these issues over the past decade, including numerous studies, “show definite quantitative
and qualitative improvements in news performance by cross-owned TV stations”).
215 See Tribune Comments at 11, 73, 75, 81; see also Media General Comments at 13-16.
216 See Tribune Comments at 86-92; see also Media General Comments at 19; NAA Comments at 12-13, 16-17;
A.H. Belo Comments at 17-18; Media General July 21 Ex Parte Letter Att. 3 at 1-2.
217 Media General Comments at 18-19; Tribune Comments at 86; A. H. Belo Comments at 16-17.
218 A. H. Belo Comments at 17; Media General Comments at 18; NAA Comments at 16.
219 NAA Comments at 16 (citingPEW RESEARCH CENTER’S PROJECT FOR EXCELLENCE IN JOURNALISM, THE STATE
OF THE NEWS MEDIA 2010: AN ANNUAL REPORT ON AMERICAN JOURNALISM, Newspapers – Summary Essay (2010)
(“STATE OF THE NEWS MEDIA 2010”), available at http://stateofthemedia.org/2010/.
220 See CWA Comments at 30.
221 Id.
222 AFTRA Comments at 2, 9.
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newspapers for the majority of their local news, despite the rising popularity of the Internet as a platform
for access to news.223 Studies have found that approximately three-quarters of Americans obtain news
from a local television station.224 In addition, although newspaper readership has declined in recent years,
in 2010, 37 percent of Americans reported reading a newspaper the preceding day.225
97.
Although consumers are turning increasingly to the Internet for news and information
generally and seeking new platforms on which to access local news, the websites most frequently viewed
for news and information are affiliated with legacy media. In the fall of 2009, among the top roughly 200
news websites based on traffic, 67 percent were associated with legacy media, and 48 percent were
associated with newspapers in particular.226 More recently, the Information Needs of Communities
Report concluded that “from a traffic perspective, newspapers have come to dominate the Internet on the
local level.”227 Along with newspaper websites, local television news websites rank among the most
popular news websites.228 Indeed, Media Ownership Study 6 looks at online local news content and finds
very little that is not affiliated with a newspaper or television or radio station.229 Other websites offering
local news presently receive little traffic. Even where there are Internet-only local news outlets, the study
suggests that the aggregate weekly quantity of such content is about equal to a single page of a full-size
daily newspaper.230 The PEW Research Center’s Baltimore Study similarly finds that the majority of
local news content on websites unaffiliated with newspapers or broadcast stations contains only


223 HOW PEOPLE LEARN ABOUT THEIR LOCAL COMMUNITY at 14-15, 17. Overall, the survey found that local
television stations, together with their websites, are the most frequently used source for local news. Id. at 13.
224 Id. at 13 (finding that 74 percent of American adults say they get local news at least weekly from a local
television station and/or its website); KRISTEN PURCELL ET AL., PEW RESEARCH CENTER’S PROJECT FOR EXCELLENCE
IN JOURNALISM, UNDERSTANDING THE PARTICIPATORY NEWS CONSUMER: HOW INTERNET AND CELL PHONE USERS
HAVE TURNED NEWS INTO A SOCIAL EXPERIENCE (2010) (“PEW PARTICIPATORY NEWS CONSUMER”), available at
http://www.journalism.org/sites/journalism.org/files/Participatory_News_Consumer.pdf (finding that 78 percent of
Americans obtain news from a local television station on a typical day). Furthermore, according to the Information
Needs of Communities Report, 50 percent of all Americans claim to watch local television news “regularly.”
INFORMATION NEEDS OF COMMUNITIES at 76. In addition, the amount of local news aired on television stations has
increased 35 percent in the past seven years, according to a 2010 RTDNA/Hofstra University Annual Survey. Id. at
77.
225 STATE OF THE NEWS MEDIA 2011 at Newspapers Essay. The study notes that this figure is down from 39 percent
in 2008 and 43 percent in 2006. Id.
226 STATE OF THE NEWS MEDIA 2010 at Nielsen Analysis. Similarly, as we noted in the NOI, in 2008, 20 of the 25
most-visited news websites were co-owned with a cable television, broadcast television, or newspaper property.
NOI, 25 FCC Rcd at 6088-89, ¶ 6.
227 INFORMATION NEEDS OF COMMUNITIES at 55-56. A study of three cities revealed that, in each case, the city’s
long-standing newspaper was the most popular online source of local news. Id. We note that although the websites
of newspapers and local television stations rank highly in terms of online traffic, one recent survey found that
relative to other news sources, including other online sources, they do not rank among the top sources that
respondents say they rely upon for local news and information. HOW PEOPLE LEARN ABOUT THEIR LOCAL
COMMUNITY at 5, 27-28.
228 INFORMATION NEEDS OF COMMUNITIES at 76. The Report found that “[a]lthough newspapers still produce the
number one websites in most large markets, local TV stations lay claim to the top local sites in 14 markets,
including Minneapolis, Pittsburgh, Raleigh-Durham, and Salt Lake City.” Id. at 81. In addition, the Report noted
the proliferation of “hyperlocal” community websites that have been launched by local television stations. Id.
229 Media Ownership Study 6 at 11, 15.
230 Id. at 23-24.
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commentary on the stories and features that originated from traditional media outlets.231 Given the
continuing prevalence of broadcast stations and newspapers as news sources consumers rely on the most,
we tentatively find that some newspaper/broadcast restrictions remain necessary to protect viewpoint
diversity. We will continue to monitor and assess the Internet’s role in the marketplace for local news
and information in this regard. We seek comment on these tentative conclusions.
98.
The Commission has found evidence previously that some newspaper/broadcast cross-
ownership may produce increased local news.232 What benefits and efficiencies accrue from cross
ownership? Media Ownership Study 4 examines the impact of newspaper/television cross-ownership on
the amount of local television news at both the station and the market level.233 The study finds that, other
things being equal, a station that is cross-owned with a daily newspaper produces more local news than a
stand alone station. However, when the analysis is done at the market level, other things being equal, a
market with a cross-owned station offers somewhat less local news than a market without a cross-owned
station. Because there was little variation in the extent of newspaper-television cross-ownership during
the period studied, the author recognizes that the conclusions of the statistical analysis must be treated
with caution. We seek comment on how to weigh the Media Ownership Study 4 findings and how those
findings should affect our analysis. Has this rule resulted in the reduction of local news, the loss of
journalism positions, and the failure of newspapers? What challenges have newspapers faced because of
the current economy and the changing marketplace?
99.
Nielsen DMAs. As an initial matter, for television stations, we propose to apply any
ownership combination restrictions to daily newspapers and stations within the same DMA.234 We seek
comment on our tentative conclusion that we will use Nielsen DMA definitions to determine when the
cross-ownership rule is triggered, as there is no digital equivalent contour for the analog Grade A contour
specified by the current rule.235 We seek comment on the impact of changing from a contour-based rule
to a DMA-based rule. For any proposed rule, would many more newspaper/television station
combinations be implicated by the cross-ownership rule under a DMA-based approach as compared to a
contour-based approach? Are there negative consequences to switching to a DMA-based rule? What are
the benefits? Our preliminary view is that DMA market definitions would reflect circulation and viewing
areas more accurately than the current approach. However, given the large size of some DMAs, we seek
comment on whether the rule instead should be triggered only if the newspaper’s circulation extends to
the community of license of the television station.
100. To the extent the rule relies on DMAs, we propose to grandfather ownership of existing
combinations of television stations and newspapers that would conflict with the newspaper/broadcast
cross-ownership rule by virtue of the change to a DMA-based approach. Compulsory divestiture is
disruptive to the industry and a hardship for individual owners, and any benefits to our policy goals would


231 PEW RESEARCH CENTER’S PROJECT FOR EXCELLENCE IN JOURNALISM, HOW NEWS HAPPENS: A STUDY OF THE
NEWS ECOSYSTEM OF ONE AMERICAN CITY (2010), available at
http://www.journalism.org/sites/journalism.org/files/Baltimore%20Study_Jan2010_0.pdf; see also INFORMATION
NEEDS OF COMMUNITIES at 123-24 (referencing several studies to support the conclusion that “the growing number
of web outlets relies on a relatively fixed, or declining, pool of original reporting provided by traditional media”).
232 2002 Biennial Review Order, 18 FCC Rcd at 13753-60, 13760-61, ¶¶ 342-54, 356-58; 2006 Quadrennial Review
Order
, 23 FCC Rcd at 2038, ¶ 46.
233 Media Ownership Study 4 at 12.
234 This is consistent with our tentative conclusion to eliminate the use of Grade B contours in conjunction with the
local television ownership rule in favor of Nielsen DMAs. See supra ¶¶ 36-39.
235 For further discussion of digital contours, see NOI, 25 FCC Rcd at 6116-18, ¶¶ 102-05.
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likely be outweighed by these countervailing considerations.236 We seek comment on these tentative
conclusions. Are our policy goals served by allowing grandfathered combinations to be freely
transferable in perpetuity, irrespective of whether the combination complies with the newspaper/broadcast
cross-ownership rule? What is the effect on the entities if they are sold separately? Is it possible that
such a rule could have the unintended consequence of causing a station or newspaper to close?
101. Proposed Rule. In taking a fresh look at the rule, we tentatively find that a blanket rule
prohibiting all newspaper/broadcast cross-ownership within the same service area is unnecessarily broad.
We tentatively conclude that the top 20 DMA demarcation point, the top-four television station
restriction, and the eight remaining major media voices test for television/newspaper combinations
contained in the 2006 rule are the fundamental elements of a rule that will protect and promote viewpoint
diversity while also properly supporting localism most effectively. We note that these criteria are
objective standards that can be applied and enforced consistently and fairly, with low cost to the
applicants and Commission. We seek comment generally on the benefits of adopting these criteria and
specifically on their individual aspects, as detailed below.
102. We propose a rule that prohibits common ownership of a daily newspaper and (1) a full-
power commercial television station within the same DMA, (2) an AM station with a predicted or
measured 2 mV/m contour service area that encompasses the newspaper’s city of publication; or (3) an
FM station with a predicted 1 mV/m contour service area that encompasses the newspaper’s city of
publication.237 The proposed rule would presume a waiver to be consistent with the public interest if: (1)
a daily newspaper in a top 20 DMA sought to combine with a radio station, or (2) a daily newspaper
sought to combine with a full-power commercial television station in the same top 20 DMA, and: (a) the
television station is not ranked among the top four television stations in the DMA and (b) at least eight
independently owned and operated “major media voices” would remain in the DMA after the
combination.238 The rule would presume a waiver to be inconsistent with the public interest in all other
circumstances. Below we seek comment on alternative demarcation points for these three key elements
of the proposed rule (top-four television station restriction, eight remaining major media voices criterion,
top 20 DMA cutoff) and on how in practice these three constraints interact with one another.
103. We tentatively conclude that the case-by-case approach adopted as part of the 2006 rule to
consider requests for waivers of the newspaper/broadcast cross-ownership rule would best serve our goal
of promoting viewpoint diversity. This approach should provide an appropriate amount of flexibility to
allow the Commission to consider specific, individual circumstances. Presumptions either in favor of or
against a waiver can be overcome when specific facts so warrant. Under this approach, opponents to a
waiver request, even in the largest markets, maintain the ability to argue that specific circumstances
overcome a favorable presumption. In addition, parties requesting a waiver in smaller markets are not
precluded from demonstrating the benefits of that particular combination in the individual market. We
seek comment on these tentative conclusions.
104. Alternatively, we seek comment on whether a bright-line rule addressing
newspaper/broadcast cross-ownership would be preferable. Such a rule would allow common ownership
of (1) one daily newspaper in a top 20 DMA and one commercial radio station, or (2) one daily
newspaper and one full-power commercial television station in a top 20 DMA under the circumstances in


236 See, e.g., 1975 Second Report and Order, 50 FCC 2d at 1080, ¶ 112 (stating that “divestiture should be limited to
use in only the most egregious cases”); see also 2002 Biennial Review Order, 18 FCC Rcd at 13808, ¶ 484.
237 See Appendix B for the proposed rule.
238 For purposes of the waiver, major media voices would include full-power commercial and noncommercial
television stations and major newspapers. See 47 C.F.R. § 73.3555(d)(3)(ii); NOI, 25 FCC Rcd at 6095, ¶ 23.
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which the case-by-case approach proposed above would establish a favorable presumption.239 Other
combinations would be prohibited. The purpose of a bright-line rule is to create a clear-cut, readily
enforceable standard that provides consistency and certainty to the marketplace. We seek comment on
whether this approach would result in a simplified rule that would preserve essentially the same levels of
local viewpoint diversity as a case-by-case approach but reduce applicants’ costs and make the
Commission’s review of transfer and assignment applications more objective, predictable, and
expeditious. Is a bright-line formula too blunt a tool to account for variable conditions that may exist
when considering newspaper/broadcast cross-ownership waivers, even in similarly sized markets? We
note that even utilizing a bright-line rule, petitions to deny an application would not be precluded even for
a newspaper/broadcast combination within a top 20 DMA or a waiver request in other markets.240 Would
including the determinative criteria in a governing rule alleviate the need to undergo a potentially lengthy
and expensive waiver process for applications presumed to be in the public interest? If the results are
likely to be the same in most cases, is the flexibility of a tailored review process worth the additional time
and expense? We seek comment on the extent to which the structure of the bright-line approach would
diminish the likelihood of successfully opposing such a merger. Under a bright line approach, should we
adopt specific standards for waivers or rely on our generally applicable waiver standards?
105. Market Tiers. We propose to differentiate between markets in the top 20 DMAs and
markets below the top 20 DMAs. In the last review of this rule, the Commission found a “notable
difference between the top 20 markets and all other DMAs,” citing the range of media outlets available in
the top 20 DMAs and concluding that “[t]he diversity in the number and types of traditional media outlets
in the largest markets ensures that the public is well served by antagonistic viewpoints. Markets outside
of the top 20 DMAs do not feature diversity to such an extent.”241 We continue to believe that the top 20
DMAs are notably different from other markets, both in terms of voices and in terms of television and
radio households.242 Based on the range of media outlets available in the top 20 DMAs, we tentatively
conclude that diversity in those largest markets is healthy and vibrant in comparison to other DMAs. For
example, while there are at least 10 independently owned, commercial television stations in 15 of the top
20 DMAs, none of the DMAs ranked 21 through 25 has even eight independently owned, commercial
television stations. Additionally, while 15 of the top 20 DMAs have at least two newspapers with a
circulation of at least five percent of the households in that DMA, four of the five DMAs ranked 21
through 25 have only one such newspaper. Moreover, the top 20 markets, on average, have 16
independently owned television stations and major newspapers and approximately 2.5 million television
households.243 By comparison, DMAs 21 through 30 have on average nine major voices and fewer than
1.2 million television households, representing drops of 44 percent and 52 percent from the top 20
markets, respectively. DMAs 31 through 50 have average numbers of voices for each category similar to
markets 21 through 30, but even fewer television households on average, 856,700 and 694,500,
respectively. DMAs 51 through 210 show even more dramatic drops, with, on average, seven major
voices and approximately 236,000 television households, representing drops of 56 percent and 91 percent
from the top 20 DMAs, respectively. The diversity in the number and types of traditional media outlets in
the largest markets ensures that the public is well served by a variety of viewpoints. Markets outside of
the top 20 DMAs do not feature diversity to such an extent.


239 For purposes of the rule, major media voices would include full-power commercial and noncommercial
television stations and major newspapers. See 47 C.F.R. § 73.3555(d)(3)(ii); NOI, 25 FCC Rcd at 6095, ¶ 23.
240 See 47 U.S.C. § 309(d)(1).
241 2006 Quadrennial Review Order, 23 FCC Rcd at 2041-42, ¶ 56.
242 Staff analysis of BIA/Kelsey data for Dec. 31, 2009.
243 Id.
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106. We seek comment on this analysis of the distinction between the top 20 DMAs and others
and on our tentative conclusion that the viewpoint diversity level in the 20 largest DMAs is sufficient to
consider adopting a regulatory framework that would accommodate a limited amount of
newspaper/broadcast cross-ownership in those markets. We also seek comment on our continued belief
that markets below the top 20 DMAs cannot accommodate any such cross-ownership, absent particular
circumstances warranting a waiver. We ask commenters to address separately market structure
characteristics, such as the number of independent media voices, and market size characteristics, e.g., the
number of television households in the market. Market structure characteristics are directly and
separately addressed by the proposed top four television station restriction and the proposed eight
remaining major media voices criterion. Due to the high fixed costs of television program production
(including local programming in general and local news programming in particular), the number of
television households in the market affects the revenue base available to support local programming and
hence affects the quantity, quality, and diversity of local programming produced in the market,
independent of the number of media voices.244
107. In addition, we seek comment on whether a different demarcation point would more
effectively protect and promote our viewpoint diversity and localism goals. For example, would
differential treatment be warranted for newspaper/broadcast combinations in the top 30 DMAs, top 40
DMAs, top 50 DMAs, or at a different market size? Please provide specific market data to support the
proposed demarcation point. If we were to maintain the prohibition on combinations involving the top
four television stations and the requirement to retain eight major media voices in the market, what is the
impact on permitted combinations of varying the demarcation point?
108. Newspaper/Television Station Combinations: Top-Four Restriction. We propose to
prevent a daily newspaper from combining with a television station that is ranked among the top four
television stations in the DMA. We propose that the current criteria would continue to apply when
determining what qualifies as a daily newspaper245 and what qualifies as a television station ranked
among the top four stations.246 We believe that allowing a top-four station to merge with a daily
newspaper would create the greatest risk of losing an independent voice in that market. Our analysis
shows that there is a decrease in the amount of local news broadcast between the fourth and fifth ranked
stations.247 In larger markets, the fifth ranked station generally provides no more than half the amount of
local news of the fourth ranked station.248 We seek comment on this analysis and on its application to our


244 For a theoretical discussion of the relationship between product quality and market size in the presence of fixed
costs and an application to newspapers, see Berry, Steven and Joel Waldfogel; “Product Quality and Market Size
58 Journal of Industrial Economics: 1-31 (March 2010). For a discussion in the context of local television
programming, see Oberholzer-Gee, Felix and Joel Waldfogel; “Media Markets and Localism: Does News En
Espanol Boost Hispanic Voter Turnout?
” National Bureau of Economic Research Working Paper 12317 (June
2006); revised version published 99 American Economic Review: 2120-2128 (December 2009).
245 47 C.F.R. § 73.3555, Note 6 (a daily newspaper must be published at least four days a week, written in the
dominant language in the market, and circulated generally in the community of publication).
246 Id. at § 73.3555(d)(3)(i) (a television station’s ranking is determined by “the most recent all-day (9 a.m.-
midnight) audience share, as measured by Nielsen Media Research or by any comparable professional, accepted
audience ratings service”). We note that with regard to the TV duopoly rule, the ranking is determined at the time
the application to acquire or construct the station is filed. Id. at § 73.3555(b)(1)(i).
247 We have some evidence that the amount of local news drops off on the fifth-ranked television station and does so
more dramatically in higher ranked DMAs. FCC staff analysis of TMS data for the period Nov. 1, 2009 through
Nov. 14, 2009 and Nielsen data for the period Oct. 29, 2009 through Nov. 25, 2009.
248 Id. This is not to say that the absolute amount of local news provided by the fifth ranked station is insignificant
in all cases.
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proposed approaches.
109. Furthermore, we note the dominance of the four major television networks in most local
television markets. How commonly are the top four stations in a market affiliated with the four major
broadcast networks? We seek comment on the findings in Media Ownership Study 4 that television
stations affiliated with one of the four major broadcast networks tend to air more local news than other
stations and that there are about 35 additional minutes of local news programming in the market for each
additional station in the market that is affiliated with one of the four major broadcast networks.249 We
seek comment on our presumption that, therefore, the top four television stations generally contribute the
most local news and information among the television stations within a market.
110. Alternatively, we seek comment on whether a different limit is appropriate. For example,
is there evidence to support a cross-ownership restriction between newspapers and the top-five or the top-
six television stations in some markets? If so, why? Is there support to prevent combinations between
newspapers and stations affiliated with one of the four major broadcast networks? If so, why? Could
such combinations potentially harm diversity more than other combinations? Is there evidence that these
stations provide more diversity in local markets?
111. Newspaper/Television Station Combinations: Eight Major Media Voices Restriction. We
tentatively propose to prohibit transactions where less than eight independently owned and operated
“major media voices” would remain in the DMA after a transaction. We seek comment, however, on the
potential impact of eliminating this voices test. Our examination of the top 20 DMAs indicates there
would be no impact in these markets. Under the existing ownership patterns in the top 20 markets, even if
all daily newspapers combined with television stations, at least eight major media voices would remain in
the market. The existence of the eight voices test in the local television ownership rule also helps retain
independent major media voices by limiting commercial consolidation once only eight independent
television stations remain in the market. As long as these eight independent television voices remain in
the market, consolidation between newspapers and television stations will not reduce the number of major
media voices below eight. Is our assessment accurate, and if so, is there any reason to incorporate the
eight voices test into a new rule or waiver provision? Is there a reason to require a different number of
voices to remain in the DMA, and if so, how would that number better protect our diversity goal? Should
our analysis change if we do not distinguish the top 20 DMAs but adopt a different demarcation point?
For example, would there be an impact on the market if we eliminate the eight voices test and create a
separate tier for the top 30 DMAs?
112. Newspaper/Radio Station Combinations. As an alternative to our proposal above to retain
the restriction on newspaper/radio combinations,250 we also seek comment on whether we should
eliminate the newspaper/radio restriction in all markets or otherwise relax the restriction.251 We
tentatively conclude that radio stations are not the primary outlets that contribute to local viewpoint
diversity. Media Ownership Study 5 finds that at least one commercial radio station with a news and talk


249 Media Ownership Study 4 at 25; see also INFORMATION NEEDS OF COMMUNITIES at 100 (finding that most of the
television stations that do not offer local news are not affiliated with a broadcast network).
250 See supra ¶¶ 101-103.
251 We note that Minority Media and Telecommunications Council (“MMTC”) no longer opposes
newspaper/broadcast cross-ownership given the economic hardships facing so many newspapers. Transcript of Jan.
27, 2010, Media Ownership Workshop, MB Docket No. 09-182, at 206-07 (“Jan. 27 Workshop Transcript”)
(remarks of David Honig, President and Executive Director, MMTC; filed in MB Docket No. 09-182 on February
26, 2010); see also Morris Comments at 2-3 (arguing that newspaper/radio combinations raise fewer concerns than
newspaper/television combinations); CWA Comments at 25-26 (citing evidence that newspapers and television
stations remain the dominant sources of local news and information).
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format serves most markets and that a public news radio station serves about 40 percent of markets.252
Research shows, nevertheless, that consumers’ main sources for local news and information are television
stations, newspapers, and their affiliated websites.253 Moreover, we tentatively conclude that a substantial
amount of news and talk show programming on radio stations is nationally syndicated. We seek
comment on our tentative conclusion that radio stations generally are not the dominant source consumers
turn to for local news and information, as compared to newspapers and television stations. We seek
comment on whether, to the extent radio stations serve as sources of local news and information,
viewpoint diversity would be adequately protected by our proposed local radio limits. Because
consumers in markets of all sizes rely most heavily on other types of news outlets for local news and
information, is there any reason to distinguish between markets in the top 20 DMAs and those below the
top 20 DMAs for purposes of newspaper/radio combinations? Would the removal of prohibitions against
newspaper/radio combinations have any impact on the ownership, or contribution to local viewpoint
diversity, of noncommercial educational FM broadcast stations, given the restriction that they may be
licensed only to nonprofit educational organizations?254 Would common ownership between a radio
station and a newspaper increase the quality and quantity of local news programming available on radio
stations due to shared newsgathering expertise and resources?255 Could such combinations provide an
opportunity for both radio stations and newspapers that are struggling financially to become more vital
participants in the news and information marketplace and what is the likelihood of this outcome? Should
we consider a rule that prohibits newspaper-radio combinations in certain markets only when the radio
station is among the largest four in the market by audience share?
113. The proposed newspaper/broadcast cross-ownership rule retains the use of radio contours
to determine when the rule is triggered. As discussed in Section III.B, Arbitron market definitions are
used to delineate a market’s geographic boundaries for purposes of the local radio limits and we propose
to use DMAs for purposes of triggering the local TV ownership rule and the newspaper/television aspect
of the cross-ownership rule. Should we continue to use contours to determine whether the
newspaper/broadcast cross-ownership rule is triggered for newspaper/radio combinations? What are the
benefits of continuing to rely on contours only for this portion of the rule? Can retaining a contour
approach to newspaper/radio combinations be reconciled with our proposed use of geographic market
definitions for newspaper/television combinations? Alternatively, should we replace radio contours with
Arbitron market definitions for purposes of determining whether the newspaper/broadcast cross-
ownership rule is triggered for newspaper/radio combinations? Are there any specific concerns about
moving to an Arbitron market definition for this rule? Would more or fewer newspaper/radio station
combinations be implicated by the cross-ownership rule under an Arbitron-based approach as compared
to a contour-based approach? How would we handle non-Arbitron radio markets? We seek comment.
114. To the extent the rule relies on a different market area, we propose to grandfather
ownership of existing combinations of radio stations and newspapers that would conflict with the
newspaper/broadcast cross-ownership rule by virtue of the change. Compulsory divestiture is disruptive


252 Media Ownership Study 5 at 4-5; but see INFORMATION NEEDS OF COMMUNITIES at 231 (stating that the number
of cities with “all-news radio stations dropped from 50 in the 1980s to 30 in 2010”).
253 NOI, 25 FCC Rcd at 6088, ¶ 6 (citing PEW RESEARCH CENTER FOR THE PEOPLE & THE PRESS, AUDIENCE
SEGMENTS IN A CHANGING NEWS ENVIRONMENT 3 (2008), available at http://peoplepress.org/files/legacy-
pdf/444.pdf).
254 47 C.F.R. § 73.503(a).
255 See 2006 Quadrennial Review Order, 23 FCC Rcd at 2038, ¶ 46 (finding that “the weight of evidence indicates
that cross-ownership can promote localism by increasing the amount of news and information transmitted by the co-
owned outlets”); 2002 Biennial Review Order, 18 FCC Rcd at 13753-60, 13760-61, ¶¶ 342-54, 356-58 (citing
evidence that broadcast stations owned by newspapers generally produce more and better overall local news
programming).
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to the industry and a hardship for individual owners, and any benefits to our policy goals would likely be
outweighed by these countervailing considerations.256 We seek comment on these tentative conclusions.
Are our policy goals served by allowing grandfathered combinations to be freely transferable in
perpetuity, irrespective of whether the combination complies with the newspaper/radio cross-ownership
rule? What is the effect on the stations if they are sold separately? Is it possible that such a rule could
have the unintended consequence of causing a station or newspaper to close?
115. Factor Tests. The 2006 rule included a list of four factors for the Commission to analyze
when deciding whether a specific newspaper/broadcast ownership combination was in the public interest.
We seek comment on whether we should retain those factors. In 2006, the Commission stated that the
factors were intended to address “the need to support the availability and sustainability of local news
while not significantly increasing local concentration or harming diversity.”257 Specifically, the 2006 rule
required applicants to make showings regarding: (1) the amount of local news that would be produced
post-transaction; (2) the extent to which the affected media outlets would exercise independent news
judgment; (3) the level of concentration in the DMA; and (4) the financial condition of the applicant, and
if financially distressed, the applicant’s commitment to invest in newsroom operations.258 Do the factors
provide useful predictability or clarity for applicants applying for a waiver of the newspaper/broadcast
cross-ownership rule? Do factors provide specific benefits to the Commission staff reviewing
applications and waiver requests? Alternatively, are any of the factors, such as the first two factors, too
subjective, or focused on future behavior that may be too difficult to predict or enforce? Do specific
factors create unnecessary delay in the application and review process? Should the Commission exclude
all of these elements from the new rule and consider applications on a more case by case basis? If so,
should the presumptions included in the rule be interpreted as establishing a prima facie case in favor of
or against a transaction and, once established, shifting the burden of proof regarding the Commission’s
treatment of an application to those that may seek to overcome the presumption? If so, what should that
burden of proof be?259 Would a well defined exception or waiver standard, as discussed below,
sufficiently support the Commission’s consideration of specific factual scenarios related to a proposed
transaction, including for instance, the financial condition of the entities involved and/or the availability
of local news, such that the specification of these additional factors is not necessary? We seek comment.
116. Exception or Waiver. We also seek comment on whether to retain or abolish the factors
adopted in 2006 to overcome or reverse a negative presumption. Is it better to remove all factors from the
rule and rely on the Commission’s general waiver standard?260 Under the 2006 rule, a waiver applicant
could overcome a negative presumption by demonstrating, with clear and convincing evidence, that the
merged entity would increase the diversity of independent news outlets and the level of competition
among independent news sources in the relevant market.261 Is such a standard sufficiently objective and
quantifiable? The 2006 rule further stated that the Commission would reverse the negative presumption


256 See, e.g., 1975 Second Report and Order, 50 FCC 2d at 1080, ¶ 112 (stating that “divestiture should be limited to
use in only the most egregious cases”); see also 2002 Biennial Review Order, 18 FCC Rcd at 13808, ¶ 484.
257 2006 Quadrennial Review Order, 23 FCC Rcd at 2018-19, ¶ 13.
258 Id. at 2049, ¶ 68.
259 In the 2006 Quadrennial Review Order, the Commission stated that “[w]e will require any applicant attempting
to overcome a negative presumption about a major newspaper and television station combination 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.” Id. at 2049, ¶ 68.
260 See 47 C.F.R. § 1.3.
261 Id. at § 73.3555(d)(6).
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in two limited circumstances: (1) when the proposed combination involved a failed/failing station or
newspaper, or (2) when the proposed combination was with a broadcast station that was not offering local
newscasts prior to the combination, and the station would initiate at least seven hours per week of local
news after the combination.262 Is such a standard sufficiently objective and quantifiable? Should we give
special consideration to a transaction that involves a station or newspaper that is failed or failing? If so,
what showing should an applicant be required to make to qualify as failed or failing? Is a requirement
that a waiver applicant show that a proposed combination would increase the number of hours of local
news programming overly focused on future behavior that may be too difficult to predict or enforce? Are
there other factors that the Commission should adopt that would be more objective or easier to enforce
than those adopted in 2006? If so, what would be the benefits of adopting any other proposed factors and
what would be the harms? We also seek comment on whether it may be appropriate to adopt specific
factors to consider in instance in which an applicant is seeking a waiver of the restriction on combinations
involving a top-four television station or the eight voice test.263 Finally, we seek comment on whether
and why such provisions are needed given that filing a waiver petition is always an option under section
1.3 of the Commission’s rules?264
117. Minority and Female Ownership. According to DCS, there are still significant barriers to
entry by minority owners in both the traditional and new media industries; DCS supports measures to
facilitate minority media ownership.265 DCS states that minority-owned stations are more likely to
provide programming geared towards minority audiences and that minority communities are underserved
as a result of the lack of minority media ownership.266 We seek comment on how the proposed
newspaper/broadcast cross-ownership rule could affect minority and female ownership opportunities. We
seek comment on how promotion of diverse ownership promotes viewpoint diversity. We request that
commenters provide additional data supporting their positions.

D.

Radio/Television Cross-Ownership Rule

1.

Introduction

118. The current radio/television cross-ownership rule limits the number of commercial radio
and television stations an entity may own in the same market, with the degree of common ownership
permitted varying depending on the size of the relevant market.267 The rule allows common ownership of
at least two television stations and one radio station in the smallest markets, while in larger markets, a
single entity may own additional stations depending on the number of media owners in the market.268


262 Id. at § 73.3555(d)(7).
263 We note that MMTC no longer opposes newspaper/broadcast cross-ownership given the economic hardships
facing so many newspapers. Jan. 27 Workshop Transcript at 206-07 (remarks of David Honig, President and
Executive Director, MMTC).
264 See 47 C.F.R. § 1.3.
265 DCS Comments at 3-5, 7-9, 18-20.
266 Id. at 11-14; see also id. at 12 (citing Sandoval et al. Minority Commercial Radio Ownership in 2009) (“A study
published in 2009 shows that approximately 73 percent of minority-owned stations serve the community by
broadcasting minority oriented programming . . . .”).
267 An entity may own up to two television stations and four radio stations in a market, as long as at least 10
independently owned media voices would remain post-merger, and a single entity may own up to two television
stations and six radio stations, or one television station and seven radio stations, in a market as long as at least 20
independently owned media voices would remain post-merger. In all instances, entities must comply with the local
radio and local television ownership limits. 47 C.F.R. § 73.3555(c)(2).
268 The following media are counted for determining the number of voices for the purpose of applying the
radio/television cross-ownership rule: (i) all “independently owned and operating full-power broadcast TV stations
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The Commission retained the radio/television cross-ownership rule in the 2006 Quadrennial Review
Order
to ensure diversity in local markets.269 In Prometheus II, the Third Circuit upheld the
Commission’s decision to retain the rule, based in part on the Commission’s assertion in the 2006
Quadrennial Review Order
that the rule benefited viewpoint diversity.270 It noted that the Commission
supported retention of the rule in the 2006 Quadrennial proceeding with some evidence that commonly
owned stations can share the same viewpoint.271
119. Pursuant to our statutory mandate, we consider whether the radio/television cross-
ownership rule continues to be necessary to promote the public interest. We tentatively conclude that it
does not. We believe that repeal of the radio/television cross-ownership rule is not likely to increase
significantly consolidation of broadcast facilities. To the extent that repeal does allow additional
consolidation, we seek comment on whether such consolidation would result in greater efficiencies, to be
passed through to consumers in the form of enhanced programming choices or other consumer welfare
benefits. Moreover, as discussed further below, data suggest that radio/television cross-ownership does
not negatively impact the amount of local news available to consumers or the diversity of such
programming. Finally, we are persuaded by the evidence from our studies and the changes in the
marketplace that the rule is not necessary to ensure sufficient diversity in local markets. Accordingly, we
tentatively conclude that in the current media market, our goals of localism and diversity will be
adequately protected by the local radio and television ownership rules without this additional limitation.
We seek comment on these tentative conclusions. We also seek comment on whether there are any
reasons to retain the rule.
2.

Background

120. The Commission first restricted combined ownership of radio and television stations in
local markets in 1970 to foster competition and promote diversification of programming sources and
viewpoints.272 As discussed in the NOI, in 1999 the Commission relaxed the rule to balance diversity and
competition concerns against the desire to permit broadcasters and the public to realize the benefits of
common ownership.273 In the 2006 Quadrennial Review Order, the Commission retained the
radio/television cross-ownership rule, based in part on the concern that the local television and radio rules
were not sufficient to protect diversity in the media marketplace.274 After reviewing the record, the
Commission determined that radio and television both contributed to the “marketplace of ideas” and thus
competed in providing diversity.275 At the same time, the Commission acknowledged that newspapers





within the DMA of the TV station’s (or stations’) community (or communities) of license that have Grade B signal
contours that overlap with the Grade B signal contour(s) of the TV station(s) at issue;” (ii) all independently owned
and operating primary broadcast radio stations that are either licensed to a community within the Arbitron radio
Metro market in which the community of license of the television station in question is located or radio stations
outside the radio Metro market that Arbitron or another nationally recognized audience rating service lists as having
a reportable share in the Metro market; (iii) all independently owned daily newspapers that are published at least
four days a week in the DMA at issue and that have a circulation exceeding five percent of the households in the
DMA; and (iv) cable systems, which count as a single voice, provided cable service is generally available to
television households in the DMA. Id. at § 73.3555(c)(3)(i)-(iv).
269 2006 Quadrennial Review Order, 23 FCC Rcd at 2058, ¶ 82.
270 Prometheus II, 652 F.3d 456-58.
271 Id. at 35 (citing 2006 Quadrennial Review Order, 23 FCC Rcd at 2038-39, ¶ 49)
272 2002 Biennial Review Order, 18 FCC Rcd at 13768, ¶ 372.
273 NOI, 25 FCC Rcd at 6096, ¶ 26; see also 1999 Ownership Order at 12948, ¶ 102.
274 2006 Quadrennial Review Order, 23 FCC Rcd at 2059-60, ¶ 84.
275 Id.
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and television were “far and away the most important sources” of news and information, with radio “a
distant third.”276 On review, the Third Circuit upheld the Commission’s decision to retain the rule finding
that the rule continues “to ensure that viewpoint diversity is adequately protected.”277
121. In the NOI, the Commission sought comment on whether the current rule continues to be
necessary in the public interest. NAB supports repeal of the radio/television cross-ownership rule
because it believes that additional cross-ownership will allow broadcasters to better compete for
advertising and viewers with the new media sources entering the market278 and will allow them to invest
more in local news and information.279 Fox also suggests that allowing more common ownership of
different types of media in a single market could enhance localism.280 NAB, Fox, and CBS argue that, in
light of the explosion of media outlets and Internet-related media in all markets, and the resulting
fragmentation of the local audience, “repeal of the [radio/television cross-ownership] rule will not
adversely affect the availability of diverse audio and video programming and viewpoints.”281 Fox
contends that in the Internet age “all outlets have an equal capacity to reach the vast majority of citizens
(especially now that three-quarters of all American adults use the Internet).”282 In contrast, AFTRA
argues that we should maintain the radio/television cross-ownership rule to prevent further consolidation
and promote localism and diversity.283 AFTRA points out that, between 1996 and 2010, “the number of
commercial radio stations increased by about 10 percent . . . . [while] the number of station owners fell
by about 40 percent.”284 AFTRA further asserts that, during the same period, “the number of commercial
television stations increased by about 15 percent . . . . [while] the number of station owners fell by 33
percent.”285
122. In our economic studies, which we discuss in more detail in Section V below, we sought
data to help us analyze questions related to the relevance of the radio/television cross-ownership rule to
our policy goals. Particularly, we measured whether the presence of radio/television cross-ownership
affects the amount of local news provided at the local market level and at the individual station level. We


276 Id. at 2060, ¶ 84 n.279.
277 Prometheus II, 652 F.3d at 457.
278 NAB Comments at 46, 63-72.
279 Id. at 63-72.
280 Fox Comments Att. 1 at 26 (citing Prometheus I, 373 F.3d at 398).
281 NAB Comments at 77-78 (also arguing that previous ownership studies showed benefits from radio/television
cross-ownership); Fox Comments Att. 1 at 27-28; CBS Reply Att. at 27; see also CBS Reply Att. at 23-27 (outlining
changes in the media marketplace).
282 Fox Comments Att. 1 at 27. CBS and NAB similarly point to widespread Internet use as ground for repealing the
rule. CBS Reply Att. at 24 (“the number of adult Americans using the Internet rose to more than twice the level of
usage that existed five years earlier; [the number of] web pages indexed by Google has increased 537 [percent] since
2004,” and the development of the blog has added to the variety of new media alternatives); NAB Comments at 16-
17, 21 (a recent study shows “that between 2004 and 2009, the number of hours per week that Americans use the
Internet increased by 117 percent, while radio use decreased by 18 percent, . . . and television viewing remained
constant,” and argues that this supports their assertion that there are a “number of alternative outlets offering
information and entertainment to consumers”).
283 AFTRA Comments at 2-3; see generally NABOB Comments (arguing that relaxation of any of the media
ownership rules would contribute to consolidation of ownership in the broadcast industry, which would in turn
“exacerbate the lack . . . of minority ownership”).
284 AFTRA Comments at 3.
285 Id. at 4.
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also measured localism by analyzing consumer satisfaction with the amount of locally oriented
programming available in markets. In addition, we studied the impact of radio/television cross-ownership
on the amount of diverse viewpoints available in media markets.
3.

Discussion

123. Competition. As the Commission has held in the past, we do not believe this rule is
necessary to promote competition. Previously, the Commission has concluded that most advertisers do
not consider radio and television stations to be good substitutes for their advertising needs, and, therefore,
combinations of radio and television stations would not harm competition in local media markets.286 This
conclusion was based in part on Department of Justice assertions that radio advertising constitutes a
separate antitrust market.287 We continue to believe that radio and television are not good substitutes in
the advertising market.288 We seek comment on this tentative conclusion.
124. Similarly, we tentatively conclude that most consumers do not consider radio and
television stations to be substitutes for one another. That is, we believe that consumers are not likely to
switch between television viewing and radio listening based on the program content of radio and
television stations. Nor do we believe it likely that radio or television stations adjust their content in
response to changes in the other medium’s programming. Accordingly, we believe that repealing the
radio/television cross-ownership rule will not negatively impact our competition goals and seek comment
on this tentative conclusion.
125. As stated above, broadcasters argue that lifting the radio/television cross-ownership
restriction will enable them to compete better in today’s marketplace. We seek comment on whether
repealing the restriction would allow greater efficiencies through joint operations that can be passed on to
consumers through investment in programming. In addition, we seek comment on whether allowing
additional radio-television combinations would lead to consumer benefits in the form of additional
investment in radio or television news rooms, increased editorial staffs, or additional local news coverage
on radio stations.
126. We do not anticipate, however, that eliminating the radio/television cross-ownership rule
would significantly contribute to broadcast consolidation. Pursuant to the existing radio/television cross-
ownership rule, in the largest markets, entities currently may own, in combination, either two television
stations and six radio stations or one television station and seven radio stations. The local radio
ownership rule permits an entity to own a maximum of eight radio stations in a single market. Therefore,
in the largest markets, absent the current radio/television cross-ownership rule, an entity approaching the
limits of the existing cap could acquire only one additional radio station and remain in compliance with
the local radio rule. Likewise, an entity with one television station already could acquire only one
additional station in the largest markets under the current local television rule. Thus, we believe that the
effect of eliminating the radio/television cross-ownership rule will be small, and that the local radio and
local television rules will continue to prevent a significant increase in the consolidation of broadcast
facilities. We seek comment on these issues. What impact is the proposed action likely to have in small
and mid-sized markets? Are there specific examples of markets where repeal of the rule may


286 2002 Biennial Review Order, 18 FCC Rcd at 13770-71, ¶ 377.
287 Id. at 13714, ¶ 243 (citing Complaint at ¶¶ 11-14, United States v. Clear Channel Comm’ns, Inc., No.
1:00CV02063 (D.D.C. Aug. 29, 2000); Complaint at ¶ 12, United States v. EZ Comm’ns, Inc., No. 1:97CV00406
(D.D.C. Feb. 27, 1997)).
288 2002 Biennial Review Order, 18 FCC Rcd at 13672-76, ¶¶ 142-52 (observing that the record suggests that
television viewers do not consider non-video entertainment alternatives to be good substitutes for watching
television, and that advertisers do not consider radio to a substitute for reaching consumers through the medium of
television); see also CBS Reply Att. at 28-29.
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substantially contribute to broadcast consolidation?
127. Localism. As the Commission has held in the past, we do not believe this rule is necessary
to promote localism.289 We tentatively conclude that repealing the radio/television cross-ownership rule
will not negatively impact our localism goal. Again, we believe that the local television and local radio
rules, as well as the newspaper/broadcast cross-ownership rule, will sufficiently promote and protect our
localism goals. Radio and television broadcasters would continue to have the same obligation to serve
their local communities in the absence of a radio/television cross-ownership restriction. We also
recognize that consumers primarily rely on television and newspapers, and their affiliated websites, for
their local news.290 Moreover, audiences of traditional news sources have moved toward new media, with
both Internet and cable news sources growing.291 We recognize that radio stations that air nationally
syndicated news or talk show programming contribute to the overall amount of news and information
within their local market. We note that lifting the radio/television cross-ownership rule will not impact
the availability of non-commercial news radio stations. We seek comment on our tentative conclusions.
128. In the media ownership studies, we sought to develop data to inform our analysis of
whether the radio/television cross-ownership rule promotes localism. In particular, both Media
Ownership Study 1 and Media Ownership Study 4 look at whether the level of radio/television cross-
ownership in a market is associated with the amount of local television programming provided. Evidence
from the studies is mixed with respect to this question.
129. Media Ownership Study 1 examines how cross-ownership is associated with localism, as
measured by the amount of local news provided in the market.292 The study finds that cross-ownership
decreases local television news hours but raises ratings, which leads to ambiguous results.293 We seek
comment on these findings and their relevance to our analysis of whether the radio/television cross-
ownership rule is necessary to promote our localism goal.
130. Media Ownership Study 4 finds that, at the station level, radio/television cross-owned
stations appear to air more local news on average, though the impact is marginal.294 According to the
study, for every additional in-market radio station a parent owns, the television station will air 3.7 more
minutes of local news.295 We seek comment on these study findings and how they should affect our
analysis. At the local market level, however, Media Ownership Study 4 finds that increases in
radio/television cross-ownership correlate to decreases in the total amount of news minutes provided in
the market.296 As the study notes, however, due to economies of scale, this negative correlation is
partially mitigated as the average number of broadcast outlets per cross-owned station group in the market


289 2002 Biennial Review Order, 18 FCC Rcd at 13772-73, ¶¶ 383-85.
290 PEW RESEARCH CENTER FOR THE PEOPLE & THE PRESS, PRESS ACCURACY RATING HITS TWO DECADE LOW,
PUBLIC EVALUATIONS OF THE NEWS MEDIA: 1985-2009, at 4 (2009) (“PEW PRESS ACCURACY REPORT”), available
at
http://people-press.org/files/legacy-pdf/543.pdf (18 percent of respondents get most of their local news from
radio, compared to 64 percent for television).
291 NOI, 25 FCC Rcd at 6088, ¶ 6 (citing PEW PARTICIPATORY NEWS CONSUMER). We note that while cable news
ratings have generally increased over the last decade, the audience for cable news declined in 2010. STATE OF THE
NEWS MEDIA 2011 at Key Findings.
292 Media Ownership Study 1 at 1.
293 Id. at 16, 21, Table 3.
294 Media Ownership Study 4 at 28.
295 Id.
296 Id. at 24, 49.
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increases.297
131. Diversity. We tentatively conclude that the radio/television cross-ownership rule is no
longer necessary to promote the Commission’s goal of encouraging viewpoint diversity. We seek
comment on this tentative conclusion, as well as our tentative conclusion that the proposed local
television and radio rules and the newspaper/broadcast cross-ownership rule will suffice to protect and
promote our diversity goal. We also seek comment on alternatives to this tentative conclusion, including
whether or not it is necessary to retain the radio/television cross-ownership rule for diversity purposes.
We seek data to support retention of the rule, including any data that the cross-ownership rule is necessary
to ensure diverse viewpoints in local markets.
132. Overall, the media ownership studies provide little evidence that cross-ownership, to the
degree currently allowed under the radio/television cross-ownership rule, has an effect on viewpoint
diversity. Media Ownership Study 8A analyzes the impact of radio/television cross-ownership on
viewpoint diversity available in local markets by examining how consumers react to the content delivered
to them.298 The study utilizes variations in viewing patterns of local television news programs as
compared to local viewing patterns for national television news programs to develop a measure of
diversity of content on local news programs, and relates changes in viewing patterns to changes in local
media cross-ownership.299 The study finds that, in general, radio/television cross-ownership has a
negligible effect on viewpoint diversity.300 Media Ownership Study 8B examines the impact of media
ownership, including radio/television cross-ownership, on the amount of programming provided in
television news programs in three categories: politics, local programming, and issue diversity (diversity in
coverage of news topics).301 Overall, the study finds little evidence that market structure influences
diversity.302 Nonetheless, with respect to one of the three types of diversity—issue diversity—the study
finds that, for the majority of topics for which cross-ownership is statistically significant, increases in
cross-ownership are associated with greater diversity.303 We seek comment on the findings presented in
Media Ownership Study 8A and Media Ownership Study 8B. Specifically, we seek comment on how
these findings should inform our analysis of whether the radio/television cross-ownership rule remains
necessary to promote viewpoint diversity.
133. While consumers continue to rely on television and newspapers, and their affiliated
websites, for their local news,304 they increasingly turn to new media, both the Internet and cable, as news
sources.305 The recent Information Needs of Communities Report finds that the Internet has created more
diversity and choice in news and information, and that most communities have seen a rise in the number


297 Id.
298 Media Ownership Study 8A, Local Media Ownership and Viewpoint Diversity in Local Television News, by
Adam D. Rennhoff and Kenneth C. Wilbur (“Media Ownership Study 8A”).
299 Id. at 6-8.
300 Id. at 22.
301 Media Ownership Study 8B, Diversity in Local Television News 5-10, by Lisa M. George and Felix Oberholzer-
Gee (“Media Ownership Study 8B”).
302 Id. at 18.
303 Id. at 15.
304 PEW PRESS ACCURACY REPORT at 4.
305 NOI, 25 FCC Rcd at 6088, ¶ 6 (citing PEW PARTICIPATORY NEWS CONSUMER). We note that while cable news
ratings have generally increased over the last decade, the audience for cable news declined in 2010. STATE OF THE
NEWS MEDIA 2011 at Key Findings.
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and diversity of outlets, as well as more diversity in commentary and analysis.306 We seek comment on
whether these sources contribute significantly to the diversity of news sources available to consumers. As
the Third Circuit noted, the traditional media continue to be an important news source.307 Nonetheless,
Internet adoption rates continue to grow, leading to changes in how consumers get their news. Because
the primary marketplace for news is shifting, we seek comment on whether the shift in consumption of
news supports elimination of the rule. For instance, does the increase in the diversity of news outlets
provided by the Internet contribute enough to the marketplace of ideas to ensure that viewpoint diversity
would be adequately protected absent this rule? We also note that the Commission previously has
rejected the argument that the use of common facilities by cross-owned stations to gather news, traffic,
and weather would be harmful to diversity, because such cost-cutting measures allow the vital
information to be available to the public through a greater number of outlets.308 We seek comment on
how other changes in the media marketplace affect diversity.
134. We also seek comment on how elimination of the radio/television cross-ownership rule
would affect minority and female ownership opportunities. As noted, DCS asserts that significant entry
barriers continue to exist for minorities and women in both the traditional and new media industries.309
Would elimination of the radio/television cross-ownership rule have any effect on such barriers? DCS
also states that minority-owned stations are more likely to provide programming geared towards minority
audiences and that minority communities are underserved as a result of the lack of minority media
ownership.310 Would elimination of the radio/television cross-ownership rule have any effect on
programming geared toward minority audiences?
135. Digital Transition. We observe that, following the digital transition for full-power
television broadcasters in 2009, the current radio/television cross-ownership rule became at least partially
obsolete. The rule relies on analog broadcast television contours as one of its criteria.311 As broadcast
television stations have completed the transition to digital television service and ceased broadcasting in
analog, the analog contours are no longer relevant, and comparable digital contours do not exist for all of
the analog contours previously employed in the media ownership rules.312 As discussed in the NOI, while
the Commission has found the digital noise limited service contour to approximate the larger Grade B
contour, the Commission has not found an equivalent for the smaller Grade A contour, which is used to
trigger the radio/television cross-ownership rule.313 If the Commission were to apply the larger Grade B
contour, we could allow entities to own more broadcast stations than was the case with the analog


306 INFORMATION NEEDS OF COMMUNITIES at 119-20.
307 Prometheus II, 652 F.3d at 457.
308 See Applications of NewCity Communications, Inc. and Cox Radio, Inc., Memorandum Opinion and Order, 12
FCC Rcd 3929 (1997).
309 DCS Comments at 3-5, 7-9.
310 Id. at 11-14; see also id. at 12 (citing Sandoval et al. Minority Commercial Radio Ownership in 2009) (“A study
published in 2009 shows that approximately 73 percent of minority-owned stations serve the community by
broadcasting minority oriented programming . . . .”).
311 For example, the radio/television cross-ownership rule is triggered if the Grade A contour of a TV station
encompasses the entire community of license of an FM or AM station. 47 C.F.R. § 73.3555(c)(1)(i)-(ii). In
addition, for purposes of determining the number of voices that would remain in the market post-merger, the rule
counts TV stations if they are “independently owned and operating full-power broadcast TV stations within the
DMA of the TV station's (or stations’) community (or communities) of license that have Grade B signal contours
that overlap with the Grade B signal contour(s) of the TV station(s) at issue . . . .Id. at § 73.3555(c)(3)(i).
312 NOI, 25 FCC Rcd at 6116-17, ¶ 102.
313 Id. at 6116-18, ¶¶ 102-03.
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contours.314 We received no suggestions in filed comments about how to address this problem. Although
we do not base our decision to repeal the rule on the rule’s use of analog contours and the lack of digital
equivalents, the difficulty of creating a consistent rule in the digital age is a factor we have considered.
We seek comment on how we could overcome this difficulty to the extent commenters propose to
maintain restrictions on radio/television cross-ownership. In particular, if commenters favor retaining a
contour-based rule, we seek comment on what contour to utilize and how the rule should be applied.

E.

Dual Network Rule

1.

Introduction

136. Historically, the Commission has concluded that the dual network rule is necessary in the
public interest to promote competition and localism.315 In order to promote these goals, the current dual
network rule permits common ownership of multiple broadcast networks, but prohibits a merger between
or among the “top four” networks (ABC, CBS, Fox, and NBC).316 The Commission concluded in the
2002 Biennial Review Order that, given the level of vertical integration of each of the top four networks,
as well as their continued operation as a “strategic group” in the national advertising market, a top-four-
network merger would give rise to competitive concerns that the merged firm would be able to reduce its
program purchases and/or the price it pays for programming.317 The Commission reasoned that these
competitive harms would reduce program output, choices, quality, and innovation to the detriment of
viewers. The Commission also concluded that allowing a merger of any of the top four networks would
harm localism by reducing the ability of affiliates to bargain with their networks for favorable terms of
affiliation, diminishing affiliates’ influence on network programming, and thus harming the ability of the
affiliates to serve their communities.318 In the 2006 Quadrennial Review Order, the Commission
concluded that the dual network rule continued to be necessary in the public interest to promote
competition and localism.319 The U.S. Court of Appeals for the Third Circuit upheld the Commission’s
decision to retain the rule, finding that the Commission reasonably relied on several unique features of the
top four broadcast networks, such as their vertical integration and their ability to reach a larger audience
than other networks.320 The Court also found that the Commission’s description of the media marketplace
as “dynamic” and “competitive” was not inconsistent with its decision to retain the rule, in part, to avoid
the damage to competition that a merger of the top four networks would cause. 321
137. We note that since our last review significant changes have taken place in the television
marketplace. In particular, the number and popularity of non-broadcast sources for video programming
continue to grow. Nonetheless, we tentatively find that the top four broadcast networks continue to


314 Id. at 6117-18, ¶ 103.
315 See id. at 6096-97, ¶ 27; see also 2006 Quadrennial Review Order, 23 FCC Rcd at 2082, ¶ 139; 2002 Biennial
Review Order
, 18 FCC Rcd at 13858, ¶ 621.
316 The rule provides that “[a] television broadcast station may affiliate with a person or entity that maintains two or
more networks of television broadcast stations unless such dual or multiple networks are composed of two or more
persons or entities that, on February 8, 1996, were ‘networks’ as defined in [Section] 73.3613(a)(1) of the
Commission’s regulations . . . .” 47 C.F.R. § 73.658(g) (emphasis in original).
317 2002 Biennial Review Order, 18 FCC Rcd at 13850, ¶ 601. A “strategic group” refers to a cluster of independent
firms within an industry that pursue similar business strategies. Id. at 13850, ¶ 601 n.1248.
318 Id. at 13855, ¶ 611.
319 2006 Quadrennial Review Order, 23 FCC Rcd at 2084, ¶ 141.
320 Prometheus II, 652 F.3d at 464.
321 Id.
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possess characteristics that distinguish them from other broadcast and cable networks and therefore still
serve a unique role in the electronic media that justifies retaining a rule specific to them. As discussed in
more detail below, the top four broadcast networks, as compared to other broadcast and cable networks,
achieve substantially larger primetime audiences, which can then be sold at a premium to advertisers that
want to reach large, nationwide audiences. Accordingly, we tentatively find that a top-four network
merger would restrict the availability, price, and quality of primetime entertainment programming to the
detriment of consumers. We also tentatively find that a top-four network merger would substantially
lessen competition for advertising dollars in the national advertising market, which would reduce the
incentives for the networks to compete against each other for viewers by providing innovative, high
quality programming. For these reasons, we tentatively conclude that the dual network rule remains
necessary in the public interest to promote competition and should be retained without modification. We
seek comment on this tentative conclusion. We also seek comment on whether allowing a merger of any
of the top four networks would harm localism by reducing the bargaining power of affiliates, which
would consequently lessen their ability to influence network programming in ways that serve their local
communities. We also seek comment on whether allowing a merger of any of the top four networks
would promote localism.
2.

Background

138. In the NOI, the Commission sought comment on issues related to the dual network rule,
including whether the rule remains necessary to protect competition in the program acquisition and
national advertising markets.322 In the current proceeding, very few parties have addressed these issues.
Several parties suggest that the dual network rule remains important to promoting the Commission’s
policy goals.323 By contrast, both CBS and Fox assert that, in light of changes in the marketplace, the
dual network rule is no longer justified and should be eliminated.324 Specifically, CBS contends that the
Commission has failed to identify the distinguishing characteristics of the top four networks that justify a
rule specific to those networks, and that greater audience share in comparison to other broadcast and cable
networks does not adequately explain why the top four networks should be specifically singled out.325
3.

Discussion

139. Competition. Broadcast networks serve in multiple roles as an intermediary between
content creators, advertisers, and local broadcast stations. As a result, we tentatively find that the top four
broadcasters participate, and can affect competition, in more than one market. Specifically, we consider
the implications of a top-four network merger for competition in the provision of primetime entertainment
programming and competition in the sale of national advertising time.
140. Primetime network programming is generally designed to attract a mass audience, and
financing such programming, in turn, requires the substantial revenue that only a mass audience can
provide. The top four broadcast networks supply their affiliated local stations with primetime
entertainment programming intended to attract mass audiences and the advertisers that want to reach such
large, nationwide audiences. By contrast, other broadcast networks target more specialized, niche


322 NOI, 25 FCC Rcd at 6113, ¶ 89.
323 See, e.g., CWA Comments at 31 (stating that the Commission “correctly maintained the Dual Network Rule” in
the 2006 quadrennial review proceeding); Free Press Comments at 2-4, 13-14 (urging the Commission not to relax
any of its current ownership limits); Jan. 27 Workshop Transcript at 206 (remarks of David Honig, President and
Executive Director, MMTC, in opposition to modification of the dual network rule, among other rules, except to the
extent the Commission might consider adding a public interest waiver process).
324 CBS Reply Att. at 46-52; Fox Comments Att. 1 at 17 n.62.
325 CBS Reply Att. at 47-48; but see Prometheus II, 652 F.3d at 464 (finding the FCC adequately identified several
unique features of the four networks, including vertical integration and operation as a strategic group).
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audiences similar to many cable television networks.326 We recognize that, in general, consumers
substitute between broadcast and cable networks, and that cable networks earn substantial advertising
revenues. Nevertheless, we tentatively find that the primetime entertainment programming supplied by
the top four broadcast networks is a distinct product, the provision of which could be restricted if two of
the four major networks were to merge.
141. First, the audience size for primetime entertainment programming provided by each of the
top four broadcast networks remains unmatched by that of any other broadcast or cable network. The
primetime audience for all cable networks taken together is greater than that of the broadcast networks327
and that the gap in size between broadcast and cable network audiences has been narrowing over time.328
Nonetheless, the average audience size for each of the top four broadcast networks remains significantly
larger than the audience size for even the most popular cable networks. For example, over an 11-month
period in 2009-2010, the average primetime audience across the four broadcast networks was 8.61
million.329 During the same period, the highest rated cable networks were USA Network, Nickelodeon,
Disney Channel, and ESPN. Their average primetime audience was approximately 2.79 million.330 Thus,
the average broadcast network audience was more than three times larger than the average audience for
the highest rated cable networks. Additionally, during the same period, the fifth highest rated broadcast
network was Univision, which provides Spanish-language programming, and which had an average
primetime audience of 3.62 million.331 The next highest rated English-language broadcast network was
the CW, which ranked sixth overall, with an average primetime audience of 1.78 million.332 Thus, the
average primetime audience for the top four broadcast networks was more than twice as large as that of
the fifth highest rated broadcast network, and nearly five times larger than that of the next highest rated
English-language broadcast network.
142. Similarly, among individual primetime entertainment programs, the audiences for the top
four broadcast networks remain substantially larger than those for other broadcast and cable networks.
With the exception of certain individual sports events, cable network programs do not regularly rank
among the highest rated television programs. For instance, during the first three months of 2011, the
highest rated single episode of a non-sports primetime program on a cable network was an episode of
Jersey Shore, which achieved an audience of 8.87 million when it appeared on MTV during the week of


326 For example, Univision targets Hispanic viewers, and the CW network targets women between the ages of 18
and 34. See Univision Communications Inc., Media Properties – Univision Network, http://www.univision.net/corp/
en/univision.jsp (visited Oct. 19, 2011); The CW Television Network, About The CW,
http://www.cwtv.com/thecw/about-the-cw (visited Oct. 19, 2011).
327 For example, according to data from the first 28 weeks of the 2010-2011 television season (i.e., through April 3,
2011), ad-supported cable networks had a household primetime share of 60 percent, while broadcasters had a share
of 36 percent. See INFORMATION NEEDS OF COMMUNITIES at 73.
328 For example, according to FCC staff analysis of data from SNL Kagan, the difference in average primetime
rating between the top four broadcast networks and the top four cable networks was 3.41 in 2007, 3.17 in 2008, and
2.65 in 2009. Average primetime rating refers to the average percent of the universe of households viewing a
network in primetime during the average minute according to Nielsen Media Research.
329 FCC staff analysis of Nielsen data for the period Sept. 29, 2009 through Aug. 22, 2010. NBC was the lowest
rated of the top four broadcast networks, with an average audience of 7.67 million viewers.
330 FCC staff analysis of Nielsen data for the period Sept. 29, 2009 through Aug. 22, 2010. USA Network had an
average of 3.38 million viewers, Nickelodeon had 2.74 million, Disney Channel had 2.56 million, and ESPN had
2.46 million.
331 Id. We note that Univision is a Spanish-language network and may not significantly compete with the four major
broadcast networks for their viewers.
332 Id.
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January 17-23, 2011.333 Despite this sizable audience, for the week, a total of 21 non-sports programs that
aired on top-four broadcast networks achieved larger audiences.334 Primetime programs on broadcast
networks outside the top four likewise generally achieve smaller audiences than primetime programs
carried on the top four networks. For instance, for the 2009-2010 television season, no program from any
non-top-four broadcast network ranked among the 100 highest rated broadcast programs.335
143. Another indicator of the distinctiveness of the top four broadcast networks is the wide
disparity in advertising prices between the top four broadcast networks and cable networks. Some
advertisers are willing to pay a premium per viewer for programs that attract larger audiences. As the
Information Needs of Communities Report notes, despite a fragmented audience, broadcast television
networks still retain some clout, relative to most cable networks, as an effective way for advertisers to
reach large audiences.336 As evidence of this, the top four broadcast networks generally earn higher
advertising rates than cable networks. In 2009, among the top four broadcast networks, CBS had the
lowest average advertising rate, as measured in cost per thousand views (referred to as cost per mille or
“CPM”), but its CPM was still 38 percent higher than the highest CPM among non-sports cable networks
(MTV) and 178 percent higher than the CPM for the highest rated cable network (USA).337 The appeal of
the top four broadcast networks to advertisers seeking large, national audiences is also reflected in data on
net advertising revenues. The top-four broadcast network with the lowest net advertising revenue in 2009
was Fox, but it still received more than three times that of any non-top four broadcast network.338 It also


333 FCC staff analysis of week-by-week cable television ratings data from Nielsen, as provided on the website TV by
the Numbers, for the period Jan. 3, 2011 through Mar. 27, 2011. Over the entire three month period, Jersey Shore
was consistently the highest rated program on cable with an average of nearly 8 million viewers.
334 See Robert Seidman, TV Ratings Broadcast Top 25: Jets-Steelers, American Idol, Hawaii Five-O, NCIS, Modern
Family Top Week 18 Viewing
, TV BY THE NUMBERS, Jan. 25, 2011, http://tvbythenumbers.zap2it.com/2011/01/25/
tv-ratings-broadcast-top-25-jets-steelers-american-idol-hawaii-five-0-ncis-modern-family-top-week-18-
viewing/80030/ (visited Oct. 19, 2011).
335 See Bill Gorman, Final 2009-10 Broadcast Primetime Show Average Viewership, TV BY THE NUMBERS, June 16,
2010, http://tvbythenumbers.zap2it.com/2010/06/16/final-2009-10-broadcast-primetime-show-average-
viewership/54336/ (visited Oct. 19, 2011). According to Nielsen ratings data, as reported by the website TV by the
Numbers, the highest rated broadcast show that did not air on a top four network was The Vampire Diaries, which
aired on the CW network and was the 118th rated broadcast show, with an average of 3.6 million viewers during the
season. Id.
336 INFORMATION NEEDS OF COMMUNITIES at 75.
337 FCC staff analysis of data from SNL Kagan. CBS had an average CPM of $14.62, while MTV’s average was
$10.62. The highest rated cable networks, USA and Nickelodeon, had CPMs of $5.07 and $5.23, respectively.
Among the top four broadcast networks, the highest CPM belonged to Fox, with an average CPM of $27.90. The
cable network with the highest CPM was ESPN, with an average CPM of $14.07. See also SNL Kagan, Cable
Network Ad Revenue Growth Back on Track
, ECONOMICS OF ADVERTISING, Oct. 1, 2010. The average CPM for
cable networks in 2009 was $5.13, which still lagged behind the broadcast networks (i.e., it is about a third of CBS’s
average CPM). CPM data for other broadcast networks is either not available, or it is not comparable because of
their more limited schedules. For instance, the CW had a much higher reported CPM of $43.18, but its schedule did
not include the near 24-hour programming schedule of the major broadcast and cable networks. We note that
advertising rates tend to be higher during primetime.
338 FCC staff analysis of data from SNL Kagan; see also SNL KAGAN ADVERTISING FORECASTS 2010 at 30. Fox
had $2.34 billion in net advertising revenues in 2009, while NBC had the highest revenues among the top four
networks, with $3.94 billion. We note that Fox has a more limited schedule of programming, which reduces its total
advertising revenues. Meanwhile, Univision ranked fifth among broadcast networks, with $0.75 billion in net
advertising revenues, and the CW network ranked sixth with $0.56 billion.
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received double that of the highest rated non-sports cable network (USA).339
144. We disagree with the assertion by CBS that greater audience share in comparison to other
broadcast and cable networks does not justify a rule specific to the top four networks. We find that the
top four broadcast networks have a distinctive ability to attract larger primetime audiences regularly
relative to other broadcast and cable networks, which enables them to earn higher rates from advertisers
that are willing to pay a premium for such audiences. Thus, a combination between top-four broadcast
networks would reduce the choices available to advertisers seeking large, national audiences, which could
substantially lessen competition and lead the networks to pay less attention to viewer demand for
innovative, high quality programming. We therefore tentatively conclude that primetime network
entertainment programming and national television advertising are each distinctive products, the
availability, price, and quality of which could be restricted, to the detriment of consumers, if two of the
top four networks were to merge. Accordingly, we tentatively conclude that the dual network rule
remains necessary to foster competition in the provision of primetime entertainment programming and the
sale of national advertising time. We seek comment on these tentative conclusions. In particular, we seek
comment on whether the top four networks face competition from any other sources that are also capable
of delivering a large, national audience to advertisers, such that they provide a reasonable substitute for
the top four networks in the national advertising market. We also seek comment as to whether the dual
network rule is necessary to promote and protect competition in the primetime network entertainment
programming and national television advertising markets, or if antitrust laws and our public interest
standard are sufficient for reviewing any possible merger between the four networks.
145. We also seek comment on whether a merger between top-four broadcast networks would
give rise to any other potential competitive concerns. For instance, we seek comment on whether, as the
Commission has previously determined, the level of vertical integration of each of the top four networks
is such that a top-four-network merger would give rise to competitive concerns that the merged firm
would be able to reduce its program purchases and/or the price it pays for programming.340 In addition,
we seek comment on the role that the top four broadcast networks play in the provision of national news
content.341 As the Information Needs of Communities Report notes, despite their declining audiences, the
three broadcast network evening newscasts (ABC, CBS, and NBC) still draw 22 million viewers—five
times the number tuning in to the three major cable news networks (CNN, FOX, and MSNBC) during
primetime.342 We seek comment on whether a merger among the top four broadcast networks would


339 FCC staff analysis of data from SNL Kagan; see also SNL KAGAN ADVERTISING FORECASTS 2010 at 30, 50-60.
Nickelodeon received $1.0 billion, and USA received $0.89 billion. ESPN received the most of any cable network,
with $1.37 billion.
340 See 2006 Quadrennial Review Order, 23 FCC Rcd at 2082-84, ¶¶ 139-41; 2002 Biennial Review Order, 18 FCC
Rcd at 13850, ¶ 601.
341 Three of the top four networks (ABC, CBS, and NBC) provide a national early evening newscast, and all provide
Sunday morning news and analysis. In addition, Univision and Telemundo (which is affiliated with NBC) provide
Spanish-language network evening news programming. Fox and the CW network do not provide network evening
news programming. Furthermore, some cable news networks are owned by broadcast network companies. For
example, among the top four broadcast networks, both NBC and Fox are affiliated with cable news networks. NBC
is affiliated with CNBC and MSNBC, and Fox is affiliated with Fox News.
342 INFORMATION NEEDS OF COMMUNITIES at 104 (citing STATE OF THE NEWS MEDIA 2010 at Local TV Summary
Essay). Similarly, the evening newscasts of ABC, CBS, and NBC achieve much larger audiences than those of any
other broadcast network. For example, as measured by the percentage of U.S. households for their average
audiences on Monday through Friday during the first quarter of 2011, NBC Nightly News, ABC World News
Tonight, and the CBS Evening News achieved audiences of 6.3, 5.7, and 4.1, respectively. TVB Local Media
Marketing Solutions, Broadcast Network News Ratings Trend, http://www.tvb.org/measurement/4748 (select
“National News Comparison” for audience data) (visited Oct. 19, 2011). By contrast, Noticiero Univision and
Noticiero Telemundo achieved audiences of 1.1 and 0.4, respectively. Id.
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significantly restrict the availability of diverse sources of national television news. We also seek
comment on whether other sources of news—including cable television, newspapers, and the Internet—
are sufficient to ensure a diverse and competitive market for national news, or whether the dual network
rule remains necessary to protect against excessive concentration in this market. We also seek comment
as to whether the dual network rule is necessary to promote and protect competition in a national news
market and purchasing or pricing of such programming, or if antitrust laws and our public interest
standard are sufficient for reviewing any possible merger between the four networks.
146. Localism. We seek comment on the continued validity of the Commission’s previous
finding that the dual network rule is necessary to foster localism.343 In particular, we seek comment on
potential ways in which a merger among the top four broadcast networks would impair the ability of their
affiliates to serve the interests of their local communities. Specifically, does the rule remain necessary to
preserve the balance of bargaining power between the top-four networks and their affiliates? Would a
top-four network merger reduce the ability of a TV station, in bargaining with its affiliated network, to
use the availability of other top independently owned networks as a bargaining tool? Furthermore, would
the availability of fewer alternatives give an affiliate less influence on network programming decisions?
For instance, would it reduce the ability of an affiliate to engage in a dialogue with a network over the
suitability for local audiences of either the content or scheduling of network programming? We also seek
comment as to whether the dual network rule is necessary to ensure options and preserve the bargaining
power and independence of affiliates, or if antitrust laws, our public interest standard, and other
Commission rules are sufficient for reviewing any possible merger between the four networks. In
addition, we seek comment on whether the growth of alternate sources for local content should have any
impact on our decision whether the dual network rule remains necessary to promote localism.

IV.

DIVERSITY ORDER REMAND/ELIGIBLE ENTITY DEFINITION

147. We seek comment in this NPRM on issues that previously were being addressed in a
separate rulemaking proceeding focused on enhancing the diversity of ownership in the broadcast
industry, including by increasing ownership opportunities for minorities and women (the “Diversity”
proceeding). As explained below, the Third Circuit in Prometheus II remanded the measures adopted in
the Commission’s 2008 Diversity Order that relied on a revenue-based “eligible entity” standard and
emphasized that the actions required on remand from the Diversity Order should be completed “within
the course of the Commission’s 2010 Quadrennial Review of its media ownership rules.”344 Accordingly,
we seek comment in this proceeding on how the Commission should respond to the court’s remand and
on other actions we should consider to increase the level of broadcast station ownership by minorities and
women.
148. Current Diversity Initiatives. The Commission believes that promoting diversity of
ownership among broadcast licensees345 and expanding opportunities for minorities and women to


343 See 2006 Quadrennial Review Order, 23 FCC Rcd at 2082-84, ¶¶ 139-41; 2002 Biennial Review Order, 18 FCC
Rcd at 13855-56, ¶¶ 611-15.
344 Prometheus II, 652 F.3d at 472.
345 As the Supreme Court has recognized, “[s]afeguarding the public’s right to receive a diversity of views and
information over the airwaves is . . . an integral component of the FCC’s mission.” Metro Broadcasting, Inc. v.
FCC
, 497 U.S. 547, 567 (1990), overruled in part on other grounds by Adarand Constructors, Inc. v. Pena, 515
U.S. 200, 227 (1995); see also Turner Broadcasting Sys., Inc. v. FCC (Turner I), 512 U.S. 622, 663-64 (1994) (“‘[I]t
has long been a basic tenet of national communications policy that “the widest dissemination of information from
diverse and antagonistic sources is essential to the welfare of the public.”’”) (quoting U.S. v. Midwest Video Corp.,
406 U.S. 649, 668 n.27 (1972); see also 47 U.S.C. § 257(b) (directing the Commission to “promote the policies and
purposes of [this Act] favoring diversity of media voices” in carrying out its responsibilities under Section 257(a) of
the Communications Act to eliminate market barriers for entrepreneurs and small businesses); Diversity Order, 23
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participate in the broadcast industry are important parts of our mission under the Communications Act.346
We currently have a number of rules and initiatives in place that are designed to advance these objectives.
For example, although the Third Circuit remanded the provisions adopted in the Diversity Order that
relied on the eligible entity definition, it expressly upheld a number of other actions the Commission has
taken to promote diversity of ownership.347 These actions include, among others, a ban on discrimination
in broadcast transactions,348 a “zero tolerance” policy for ownership fraud,349 and a requirement that non-
discrimination provisions be included in advertising sales contracts.350 Similarly, the Prometheus II
opinion did not question the Commission’s decision to reinstate the failed station solicitation rule
(“FSSR”), which is intended to provide out-of-market buyers, including minorities and women, with
notice of a sale and an opportunity to bid on stations.351 Accordingly, these measures remain in place.





FCC Rcd at 5924, ¶ 2 (“By broadening participation in the broadcast industry, we seek to strengthen the diverse and
robust marketplace of ideas that is essential to our democracy.”).
346 See 47 U.S.C. § 309(j)(3)(B) (directing the Commission in designing systems of competitive bidding to
“disseminat[e] licenses among a wide variety of applicants, including small businesses . . . and businesses owned by
members of minority groups and women”); 47 U.S.C. § 309(j)(4)(D) (directing the Commission in prescribing
regulations concerning competitive bidding systems to “ensure that . . . businesses owned by members of minority
groups and women are given the opportunity to participate in . . . spectrum-based services, and, for such purposes,
consider the use of tax certificates, bidding preferences, and other procedures”); see also generally Omnibus
Reconciliation Act of 1993, H.R. REP. NO. 111, at 255 (1993), reprinted in 1993 U.S.C.C.A.N. 378, 582 (stating that
“the Commission should adopt regulations pursuant to this section to ensure that businesses owned by members of
minority groups and women are not in any way excluded from the competitive bidding process”); 47 U.S.C. § 151
(directing the Commission to regulate interstate and foreign communications services so that they are “available, so
far as possible, to all the people of the United States, without discrimination on the basis of race, color, religion,
national origin, or sex”); Diversity Order, 23 FCC Rcd at 5924, ¶ 1 (seeking to expand opportunities for “new
entrants and small businesses, including minority- and women-owned businesses” to own broadcasting outlets).
347 Prometheus II, 652 F.3d at 471 n.41.
348 Diversity Order, 23 FCC Rcd at 5939-40, ¶¶ 40-42 (adopting “a rule that bars discrimination on the basis of race
or gender and related protected categories in broadcast transactions” and requiring certification of compliance); see
also
47 C.F.R. § 73.2090.
349 Diversity Order, 23 FCC Rcd at 5940-42, ¶¶ 43-50 (explaining that the Commission will show no tolerance for
applications seeking a preference that are not complete and correct or that “creat[e] an appearance of qualification
that does not accord with reality[,]” will address such violations on a “fast track” basis, and will provide, when
permissible, confidentiality to whistleblowers).
350 Id. at 5940-42, ¶¶ 43-50; see also id. at 5941-42, ¶¶ 49-50 (requiring broadcasters renewing their licenses to
certify that their advertising sales contracts contain nondiscrimination clauses that prohibit all forms of
discrimination). The Commission has revised its Form 303-S license renewal application form to include this
certification requirement. FCC Form 303-S, Section II, Item 7; see also Media Bureau Announces Revisions to
License Renewal Procedures and Form 303-S; Radio License Renewal Cycle to Commence on May 2, 2011
, Public
Notice, 26 FCC Rcd 3809 (Med. Bur. 2011). The court also expressly upheld several other measures adopted by the
Commission in the Diversity Order, including the commissioning of longitudinal research on minority and women
ownership trends, enabling the Commission’s Office of Communications Business Opportunities to coordinate with
the Small Business Administration to encourage local and regional banks to make loans through SBA’s guaranteed
loan programs, the holding of “Access to Capital” conferences, and the creation of a guidebook on diversity.
Prometheus II, 652 F.3d at 471 n.41; see also Diversity Order, 23 FCC Rcd at 5939-45, ¶¶ 40-64.
351 The FSSR provides that, before selling a station to an in-market buyer, an applicant for a waiver of the local
television ownership rule or the radio/television cross-ownership rule must demonstrate that the in-market buyer is
the only entity ready, willing, and able to operate the station, and that sale to a buyer outside the market would result
in an artificially depressed price. 47 C.F.R. § 73.3555, Note 7; see also 2006 Quadrennial Review Order, 23 FCC
Rcd at 2069, ¶ 109; 1999 Ownership Order, 14 FCC Rcd at 12396-97, ¶ 74. In the 2002 Biennial Review Order, the
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149. Over the past several years, the Commission also has implemented recommendations from
the Advisory Committee on Diversity for Communications in the Digital Age (“Advisory Committee”)
designed to enhance opportunities for minorities, women, and other underrepresented groups to
participate in the broadcast industry.352 For example, based on a recommendation from the Advisory
Committee, the Commission’s Office of Communications Business Opportunities (“OCBO”) hosts annual
capitalization strategies workshops in order to facilitate lending to and investment in minority- and
women-owned entities.353 Most recently, OCBO convened a Capitalization Strategies Workshop that
focused on capital acquisition for small, women- and minority-owned businesses in broadcasting,
telecommunications, and related fields.354 In addition, as explained further below, the Commission
currently is considering a recommendation from the Advisory Committee to afford bidding credits in
license auctions to persons or entities that have overcome substantial disadvantage.355 We seek input in
this NPRM on how the Commission most effectively can expand upon its diversity initiatives at the same
time that we address the Third Circuit’s concerns and other legal considerations, including potential
impediments to affording licensing preferences to minorities and women under current standards of
constitutional law.356
150. Eligible Entity Standard and Prometheus II Remand. Aside from implementing the
initiatives noted above, the Commission also has sought to promote diversity through the measures
adopted in the Diversity Order that incorporated the eligible entity definition. As discussed below, the
Third Circuit in Prometheus II vacated and remanded each of these measures.357 Accordingly, we seek
comment on how the Commission should respond to the court’s criticisms of our previous eligibility
standard, how we should proceed with respect to the measures that previously relied on that standard, and
any other actions we should consider to advance our diversity objectives.





Commission eliminated the FSSR, finding that the buyer most likely to deliver public interest benefits by using the
failed, failing, or unbuilt station will be the owner of another station in the same market. 18 FCC Rcd at 13708, ¶
225. The Prometheus I court remanded the issue on the basis that the Commission did not consider the potential
impact on minority owners when it eliminated the rule. 373 F.3d at 420-21. In the 2006 Quadrennial Review
Order
, the Commission reinstated the FSSR to ensure that potential minority owners would not be negatively
impacted. 23 FCC Rcd at 2068, ¶ 105.
352 The Advisory Committee was created in 2003. Its mission is “to make recommendations to the Commission
regarding policies and practices that will further enhance the ability of minorities and women to participate in
telecommunications and related industries. See FCC, Advisory Committee for Diversity in the Digital Age,
http://transition.fcc.gov/DiversityFAC/ (visited Oct. 19, 2011).
353 See Letter from Julius Genachowski, Chairman, FCC, to Henry Rivera, Chairman, Advisory Committee for
Diversity in the Digital Age (Jan. 5, 2010), available at
http://transition.fcc.gov/DiversityFAC/120309/genachowski-letter.pdf.
354 The November 2010 workshop featured panel discussions with finance experts that examined capitalization
strategies for a range of media sectors, including broadband, cable, radio and television broadcast, wireless, and
wireline. Capitalization Strategies Workshop For Small, Minority- And Women-Owned Businesses Friday,
November 12, 2010, 9:00 A.M. - 5:00 P.M.
, Public Notice (OCBO, rel. Nov. 1, 2010), available at
http://transition.fcc.gov/Daily_Releases/Daily_Business/2010/db1101/DOC-302517A1.pdf.
355 Media and Wireless Telecommunications Bureaus Seek Comment on Recommendation of the Advisory
Committee on Diversity for Communications in the Digital Age for a New Auction Preference for Overcoming
Disadvantage
, GN Docket No. 10-244, Public Notice, 25 FCC Rcd 16854 (Med. Bur./Wireless Tel. Bur. 2010)
(“Auction Preference PN”).
356 See, e.g., Grutter v. Bollinger, 539 U.S. 306, 326 (2003) (holding that “strict scrutiny” applies to “all racial
classifications”); Nev. Dep’t. of Human Res. v. Hibbs, 538 U.S. 721 (2003) (applying intermediate scrutiny to
gender-based classifications).
357 Prometheus II, 652 F.3d at 471.
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151. As defined in the Diversity Order, an “eligible entity” is any entity that qualifies as a small
business under revenue-based standards that have been established by the Small Business Administration
(“SBA”).358 In adopting measures based on this definition, the Commission concluded that it would “be
effective in creating new opportunities for broadcast ownership by a variety of small businesses and new
entrants, including minorities and women.”359 The Commission also noted that adopting this “race- and
gender-neutral definition” would avoid the “constitutional difficulties” associated with a race-conscious
definition “that might create impediments to the timely implementation” of the measures adopted in the
Diversity Order.360 In response to commenters’ requests that the Commission take direct action to
increase minority and female ownership of broadcast stations,361 however, the Commission asked for
comment in the Third Further Notice of Proposed Rulemaking to the Diversity Order (the “Diversity
Third FNPRM
”) on whether it should adopt an alternative, race-conscious eligibility definition as well as
other potential definitions.362 The alternative definitions proposed in the Diversity Third FNPRM are
discussed below in paragraphs 163 and 164.
152. In Prometheus II, the Third Circuit held that the Commission’s revenue-based eligible
entity definition was arbitrary and capricious.363 While noting that other actions in the Diversity Order
“take a strong stance against discrimination and are no doubt positive,” the court found that the
Commission failed to show that measures based on the eligible entity definition “will enhance
significantly minority and female ownership, which was a stated goal of” the rulemaking proceeding in
question.364 The court further observed that, in discussing its decision to adopt this definition, the
Commission had referred “only to ‘small businesses,’ and occasionally ‘new entrants,’ as expected
beneficiaries.”365 In addition, the court expressed doubt that the Commission would be able to provide an
adequate explanation on remand of how “measures using this definition would achieve the stated goal” of
increasing broadcast ownership by minorities and women.366 In particular, the court pointed to data cited
by the Commission showing that “minorities comprise 8.5 percent of commercial radio station owners
that qualify as small businesses, but 7.78 percent of commercial radio stations as a whole — a difference
of less than 1 percent.”367 The court also noted that, in adopting the eligible entity standard, “[t]he
Commission referenced no data on television ownership by minorities or women and no data regarding


358 Diversity Order, 23 FCC Rcd at 5925, ¶ 6; see also 13 C.F.R. § 121.201. At present, the SBA defines a small
business to include a television broadcasting station that has no more than $14 million in annual receipts and a radio
broadcasting entity that has no more than $7 million in annual receipts. 13 C.F.R. § 121.201. The Commission
originally adopted this eligible entity definition in the 2002 Biennial Review Order, 18 FCC Rcd at 13810-11, ¶¶
488-89.
359 Diversity Order, 23 FCC Rcd at 5927, ¶ 9.
360 Id.
361 Id.
362 See Diversity Third FNPRM, 23 FCC Rcd at 5951-52, ¶¶ 81-85.
363 Prometheus II, 652 F.3d at 471.
364 Id.; see also id. at 470 (finding that the Commission had failed to “explain how the eligible entity definition
adopted [in the Diversity Order] would increase broadcast ownership by minorities and women”); id. at 471 (finding
that the eligible entity definition “lacks a sufficient analytical connection to the primary issue that Order was
intended to address”).
365 Id. at 470.
366 Id.
367 Id.
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commercial radio ownership by women.”368
153. Finding that the Commission had not provided a “sufficiently reasoned basis for deferring
consideration” of the alternative definitions proposed in the Diversity Third FNPRM, the court
specifically directed it to consider those proposals within the course of the 2010 Quadrennial Review.369
The Third Circuit also admonished that the Commission could not further delay its consideration of its
prior proposals simply because of the constitutional difficulties they may present.370 To the extent that the
Commission “requires more and better data” in order to complete its analysis, the court directed the
Commission to “get [such] data and conduct up-to-date studies.”371
154. Data Collection Concerning Minority and Female Ownership. Since the adoption of the
Diversity Order, the Commission actively has sought to improve the broadcast ownership information
available to it and has gathered additional data regarding the current levels of minority ownership of
broadcast stations. In 2009, the Commission implemented a number of changes to its Form 323
ownership reports to further its goal that the data reported in the form, including data regarding minority
and female broadcast ownership, are reliable, accurate, searchable, and aggregable.372 In addition, the
Commission set a new uniform biennial filing deadline for the Form 323 and expanded the class of
entities required to file the form.373 The Commission requires all full power commercial broadcast
stations and all low power television stations, including Class A stations, to file the new form biennially.
It also eliminated the exemption from the biennial reporting requirement that formerly applied to sole
proprietorships and partnerships of natural persons that are commercial broadcast licensees.374 In
addition, all attributable interest holders must now obtain unique FCC registration numbers for purposes
of filing the form in order to facilitate cross-referencing of reported ownership interests.375
155. The Commission’s first data collection that incorporates these changes reflects ownership
interests as of November 1, 2009. The deadline for filing the data with the Commission was July 8, 2010,
and on February 28, 2011 the Commission released to the public a data set compiling all of the ownership
reports that were filed.376 That release included descriptions of the data and instructions on accessing


368 Id.
369 Id. at 471.
370 Id. at 471 n.42 (“Stating that the task is difficult in light of Adarand does not constitute ‘considering’ proposals
using an SDB definition.”).
371 Id.
372 See Promoting Diversification of Ownership in the Broadcasting Services, MB Docket No. 07-294, Report and
Order and Fourth FNPRM, 24 FCC Rcd 5896 (2009) (“323 Order” and “Diversity Fourth FNPRM”), recon.
granted in part
, Memorandum Opinion and Order and Fifth Further Notice of Proposed Rulemaking, 24 FCC Rcd
13040 (2009) (“323 MO&O” and “Diversity Fifth FNPRM”). The Diversity Fourth FNPRM sought comment on
modifications to the Form 323-E ownership report for noncommercial broadcast stations to gather minority and
gender ownership data for non-commercial broadcast stations, including low power FM stations, and related matters.
See 24 FCC Rcd at 5910-11, ¶¶ 27-30. In the 323 MO&O and Diversity Fifth FNPRM, the Commission
subsequently reconsidered its decision to require licensees to report certain nonattributable interests and sought
comment on the issue. 24 FCC Rcd at 13045-47, 13049-50, ¶¶ 12-15, 22-24.
373 323 Order and Diversity Fourth FNPRM, 24 FCC Rcd at 5904-05, 5909-09, ¶¶ 14-16, 22.
374 323 Order at 5905, ¶ 16.
375 Id. at 5908, ¶ 21.
376 See Media Bureau Announces Availability of 2009 Biennial Ownership Data Set For Commercial Broadcast
Licensees
, MB Docket No. 07-294, Public Notice, 26 FCC Rcd 2024 (Med. Bur. 2011).
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them to permit interested parties to analyze and manipulate the data.377 This data set represents the first
“snapshot” of broadcast ownership data in a series of planned biennial reviews that collectively should
provide a reliable basis for analyzing ownership trends in the industry, including ownership by minorities
and women.
156. Commission staff has reviewed the 2009 biennial ownership filings of full power
commercial broadcast television stations in order to determine the number of stations controlled by
reported racial and ethnic categories.378 There were 1,394 full-power commercial television stations in
the United States as of November 1, 2009, the information collection date.379 According to the
Commission’s review of the 2009 data, 29 of these stations, or 2.1 percent, are minority owned. Of those
29 stations, 9 have Black or African-American owners, accounting for 0.6 percent of all stations.
American Indian or Alaska Native owners control 10 stations, or 0.7 percent, while Asian owners control
nine stations, or 0.6 percent. Native Hawaiian or Pacific Islanders own one station, or 0.1 percent.
Hispanic or Latino owners control 36 stations, or 2.6 percent. By comparison, our review showed that
non-Hispanic White owners control 1,021 stations, or 73.2 percent of the total stations. In addition, the
Commission was not able to categorize the race or ethnicity of the ownership for 244 stations,
representing 17.5 percent of the total stations, because at least 50 percent of the ownership of these
stations was not reportable via the Form 323. Information was unavailable for 64 stations, or 4.6 percent.
157. Several of the Media Ownership Studies provide additional analysis of these subjects.
These and other studies are discussed more fully in Section V herein. Media Ownership Study 7
considers the relationship between ownership structure and the provision of radio programming targeted
to African-American and Hispanic audiences.380 The study finds that Black and Hispanic listeners have
very different listening preferences from the White population.381 The study also finds that although most
minority-targeted stations are not minority-owned, most minority-owned stations target minority
listeners,382 and the presence of minority-owned stations in a market appears to raise the amount of
minority-targeted programming.383 Media Ownership Study 2 concludes that consumers value diversity
of opinion and community news to varying degrees that generally increase with age, education, and
income.384 The study also examined the value listeners place on multiculturalism, however, which was
found to decrease with age. The study further concludes that White male consumers generally do not
value multiculturalism.385


377 Id.
378 For purposes of this analysis, the Commission examined the race or ethnicity of owners with attributable voting
interests in the entity that ultimately owns the station license and defined a controlling interest as an interest that
exceeds 50 percent alone or in the aggregate.
379 March 31, 2011 Broadcast Station Totals Press Release.
380 Media Ownership Study 7.
381 Id. at 8-9, 24. For example, urban stations attract 51.2 percent of Black listeners, but less than five percent of
non-Black listeners. Id. at 8. Furthermore, Spanish-language stations account for 48 percent of Hispanic listening
and negligible amounts of non-Hispanic listening. Id. at 9. Overall, Spanish-language station audiences are 96
percent Hispanic. Id.
382 Id. at 10, 24.
383 Id. at 21, 24. Specifically, the study finds that markets with an additional station with a Black owner have
roughly 0.1-0.4 additional stations targeted at Black listeners, while markets with an additional station with a
Hispanic owner have roughly 0.2-0.45 additional stations targeted at Hispanic listeners.
384 See Media Ownership Study 2 at 2.
385 Id.
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158. We recognize that the data currently in the record of this proceeding are not complete and
are likely insufficient either to address the concerns raised in Prometheus II or to support race- or gender-
based actions by the Commission. Although we would prefer to be able to propose specific actions in
response to the Third Circuit’s remand of the measures relying on the eligible entity definition in this
NPRM, we believe that making legally sound proposals would not be possible based on the record before
us at this time. Accordingly, we plan to undertake the following actions in preparation for the 2014
broadcast ownership review to establish with the requisite foundation and clarity what additional policies
can be implemented promoting greater broadcast ownership diversity, including female and minority
ownership: 1) Continue to improve our data collection so that we and the public may more easily identify
the diverse range of broadcast owners, including women and minorities, in all services we license; 2)
Commission appropriately-tailored research and analysis on diversity of ownership; and 3) Conduct
workshops on the opportunities and challenges facing diverse populations in broadcast ownership. In
addition, we ask interested parties to supplement the record and provide any and all data available that can
complete a picture of the current state of ownership diversity, including minority and female ownership in
the broadcast industry and to justify any prospective actions the Commission may take on remand.
159. Options for Reconsideration of the Eligible Entity Standard. We seek comment herein on
a number of actions we could take with respect to the remanded eligible entity definition. With respect to
these proposals and any others that may be suggested, we emphasize that interested parties should
squarely address the potential legal impediments to any specific approach. We ask commenters to explain
the constitutional law analysis that would apply to, as well as the potential constitutional problems with,
any proposals for a new eligibility definition. Commenters should explain in detail, based on relevant
case law, whether and how the Commission could overcome the application of strict or intermediate
constitutional scrutiny to any race- or gender-based standard. Commenters also should explain whether
and how proposals can be supported by data and whether they can be applied in a consistent and rational
manner.
160. As an initial matter, we invite comment regarding the possibility of reinstating the
preexisting eligible entity definition. Recognizing the Third Circuit’s apparent skepticism that the
Commission would be able to demonstrate on remand that the revenue-based eligibility definition serves
our goal of increasing broadcast ownership by minorities and women,386 we ask commenters to address
whether or not there is additional evidence available that would show a stronger connection between
according licenses preferences to small businesses and promoting this goal. Is there evidence
demonstrating that there are now more small businesses, particularly those that are owned by minorities
or women, that own broadcast outlets than there were when the eligible entity standard was put in place?
We strongly encourage parties to supply any such information to the Commission. We also note the
Third Circuit’s statement that “it is hard to understand how measures using [the eligible entity] definition
would achieve the stated goal” of increasing broadcast ownership by minorities and women in light of
Commission data showing that “minorities comprise 8.5 % of commercial radio station owners that
qualify as small businesses, but 7.78 % of the commercial radio industry as a whole . . . .”387 We seek
comment on whether this comparison of minority representation in different segments of the radio
industry accurately reflects the potential impact of the eligible entity standard on minority and female
ownership. In addition, we invite input on whether it is possible that the preexisting definition would
have a more substantial impact on minority and female station ownership if we modify the licensing
preferences to which the definition applies. As discussed in more detail in paragraphs 168 through 170,
we invite commenters to propose changes to these preferences and to explain how such changes would
promote our minority and female ownership objectives.


386 Prometheus II, 652 F.3d at 470.
387 See id.
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161. Alternatively, should we consider reinstating the eligible entity definition to support other
policy objectives aside from the promotion of minority and female station ownership? For example,
should increasing station ownership by small businesses be considered an independent policy goal in this
proceeding and, if so, would readopting the preexisting eligibility definition be a reasonable and effective
means of promoting this objective?388 We also ask commenters to consider whether creating
opportunities for small businesses to participate in the broadcast industry via the eligible entity standard
would serve our traditional goals of fostering viewpoint diversity, localism, and competition. In the
Diversity Order, the Commission suggested that the use of the eligible entity standard would “result in a
wider array of programming services, including some that are responsive to local needs and interests and
audiences that are underserved.”389 In this regard, the Commission “anticipate[d] that small businesses
will be more likely than large corporations to have ties to the communities that they serve, and thus be
more attuned to local needs and interests.”390 We seek comment on this prediction and on other ways in
which the continued use of the eligible entity definition could serve our traditional policy objectives.
162. We also seek comment on whether there are other race- and gender-neutral standards for
defining eligible entities that we should consider for the measures adopted in the Diversity Order and any
others we may implement in the future. Given the Third Circuit’s conclusion that the Commission failed
to demonstrate a connection between the previous revenue-based definition and our stated diversity goals,
commenters should supply specific evidence demonstrating why a proposed definition is likely to serve
our policy objectives, especially our goal of increasing station ownership by minorities and women. In
addition, we ask commenters to discuss any potential legal problems as well as any administrative issues
associated with their proposals.
163. In the Diversity Third FNPRM, the Commission sought comment on replacing the eligible
entity standard with a standard based on the SBA’s definition of socially and economically disadvantaged
businesses (“SDBs”) used for purposes of its Business Development Program.391 African Americans,
Hispanic Americans, Asian Pacific Americans, Subcontinent Pacific Americans, and Native Americans
are presumed to qualify for the Business Development Program, and other individuals may qualify for the
program if they can show by a preponderance of the evidence that they are disadvantaged.392 We again
seek comment on this proposal in this proceeding.393 In addition, we seek comment on whether there is
an alternative race-conscious and/or gender-specific standard that we should adopt.


388 Several provisions of the Communications Act require the Commission to promote the interests of small
businesses. See, e.g., 47 U.S.C. § 309(j)(3)(B) (obligating the Commission to “disseminat[e] licenses among a wide
variety of applicants, including small businesses” in authorizing the Commission to award licenses via competitive
bidding); see also 47 U.S.C. § 257(a) (directing the Commission to identify and eliminate “market entry barriers for
entrepreneurs and other small businesses in the provision and ownership of telecommunications services and
information services . . .”); 47 U.S.C. § 614(a)(i) (establishing a “Telecommunications Development Fund” to,
among other purposes, “promote access to capital for small businesses in order to enhance competition in the
telecommunications industry”).
389 Diversity Order, 23 FCC Rcd at 5926, ¶ 7.
390 Id.
391 Diversity Third FNPRM, 23 FCC Rcd at 5950, ¶ 81.
392 13 C.F.R. §§ 124.103(b)-(c), 124.104(a). To qualify for this program, a small business must be at least 51
percent owned and controlled by a socially and economically disadvantaged individual or individuals. See id. at §
124.105; see also U.S. Small Business Administration, 8(a) Business Development, http://www.sba.gov/content/8a-
business-development-0 (visited Oct. 19, 2011).
393 See Prometheus II, 652 F.3d at 471, 472 (directing the Commission to seek comment on “proposed SDB
definitions” in the Diversity Third FNPRM on remand).
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164. To be lawful, race-based and gender-based governmental action must satisfy the Equal
Protection Clause of the Fourteenth Amendment to the United States Constitution. The Supreme Court
has established that race-based classifications are subject to strict scrutiny and may be upheld “only if
they are narrowly tailored measures that further compelling governmental interests.”394 Gender
classifications are subject to intermediate scrutiny, under which the government’s actions must be
substantially related to the achievement of an important objective.395 Commenters advocating a race-
conscious classification, therefore, should explain, based on relevant judicial precedent and empirical
data, how such a classification would satisfy the strictest level of constitutional scrutiny. To justify the
adoption of a race-conscious standard, would it be possible for the Commission to demonstrate a
compelling interest in fostering viewpoint diversity,396 redressing past discrimination,397 or some other
interest? If the Commission could establish such an interest, how could we demonstrate that a race-based
standard would be a narrowly tailored means of achieving this interest? Similarly, could the Commission
meet the relevant constitutional standards for a gender-specific standard? Commenters also should
explain what data we would need in order to adequately support a race- and/or gender-based definition.
Commenters should provide relevant data and are encouraged to submit peer-reviewed studies.
165. The Commission also sought comment in the Diversity Third FNPRM on an
“individualized full-file review” approach to awarding the preferences adopted in the Diversity Order.398
Under this proposal, applicants would be accorded licensing preferences if they could demonstrate that
they have overcome “significant social and economic disadvantages.”399 After the release of the Diversity
Third FNPRM
, the Media and Wireless Bureaus sought comment on a proposal made by the Advisory
Committee to award bidding credits in licensing auctions to applicants that demonstrate that they have
overcome a “substantial disadvantage.”400 We seek comment on the use of this type of standard for
purposes of the licensing preferences adopted in the Diversity Order. Would these standards, both of
which are based on individualized reviews to determine whether applicants have overcome considerable
disadvantages, be subject to strict judicial scrutiny and would they be able to survive this level of
constitutional analysis? Alternatively, would it be feasible for the Commission to conduct such reviews
in a race- and gender-neutral manner that would be subject to a lower level of constitutional scrutiny? If
so, would the Commission be able to satisfy the Third Circuit’s concern that the use of a race- and
gender-neutral approach may not materially advance our minority and female ownership goals? In
addition, we ask commenters to consider how we could ensure that the highly individualized reviews of
broadcast applications that would be required under a substantial disadvantage standard could be
administered in a sufficiently objective and consistent manner as well as in accordance with First
Amendment values. We also would like interested parties to comment on the Commission resources that
would be required to conduct, as a matter of course, highly fact-specific reviews of this nature. What data


394 Adarand, 515 U.S. at 227; see also Grutter, 539 U.S. at 326 (quoting Richmond v. J.A. Cronson Co., 488 U.S.
469, 493 (1989)) (“We apply strict scrutiny to all racial classifications to ‘smoke out’ illegitimate uses of race by
assuring that [government] is pursuing a goal important enough to warrant use of a highly suspect tool.”).
395 Hibbs, 538 U.S. at 721.
396 See generally Grutter, 539 U.S. 306.
397 See generally Wygant v. Jackson Bd. of Ed., 476 U.S. 267 (1986).
398 Diversity Third FNPRM, 23 FCC Rcd at 5951-52, ¶¶ 84-85.
399 See id. With regard to this proposal, which is intended to be analogous to that used by certain state university
admissions departments, the Commission noted that the overcoming of significant disadvantages could be
“predictive of success in a challenging industry and of the promotion of diversity of information and perspectives
and satisfaction of unmet needs in the industry.” Id. at 5951, ¶ 84.
400 See Auction Preference PN, 25 FCC Rcd at 16854.
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would we need to support the adoption of this type of standard? We seek comment as to the practicability
of implementing such a standard and what information would be required by the Commission to
determine potential eligibility. What privacy concerns, if any, are raised by collecting such information?
Would the Commission have statutory authority to adopt it? To the extent that additional data are needed,
commenters are encouraged to provide such information.
166. In addition, we seek comment on any other approaches we should consider. Commenters
advocating alternative proposals should explain how the proposal would satisfy the applicable level of
constitutional scrutiny, how it would advance our policy goals, how the Commission could address any
administrative burdens or practical considerations inherent in the proposed approach, and what data the
Commission would need in order to justify it. Again, commenters are strongly encouraged to supply any
relevant data to the Commission.
167. Finally, we ask commenters to consider whether we should decline to adopt any new
eligibility standard specifically aimed at increasing minority and female station ownership in light of the
record in front of the Commission in this proceeding. In particular, we ask parties to consider, on the one
hand, the Third Circuit’s dissatisfaction with our prior race- and gender-neutral approach. On the other
hand, we ask parties to consider the high constitutional hurdles the Commission would face if it were to
adopt an expressly race- or gender-based standard on remand and the data that would be necessary to
justify such a standard prior to the completion of the 2010 Quadrennial Review. While we continue to
believe that promoting minority and female ownership is an important goal, we also recognize that
implementing a program expressly aimed at this goal in the context of this proceeding would require the
support of a substantial evidentiary record that the Commission has not yet been able to amass.
Accordingly, we seek comment on how the Commission most effectively could continue to pursue its
longstanding goals of promoting diversity among broadcast licensees, and especially of fostering
broadcast ownership by minorities and women, in the event that the Commission determines that it is
unable to support a new eligibility standard in this proceeding.
168. Measures Relying on Eligible Entity Standard. In addition to seeking comment on the
eligible entity definition, we also seek comment on how the Commission should proceed with respect to
the licensing preferences that previously relied on this definition, each of which was remanded in
Prometheus II. As numbered in the Diversity Order, these measures include: (1) Revision of Rules
Regarding Construction Permit Deadlines;401 (2) Modification of Attribution Rule;402 (3) Distress Sale


401 Diversity Order, 23 FCC Rcd at 5931, ¶ 15 (revising construction permit rules to allow the sale of expiring
construction permits to eligible entities that agree to complete construction within the time remaining on the permit
or within 18 months, whichever period is greater). In response to the Prometheus II decision, on July 25, 2011, the
Media Bureau issued a Public Notice announcing the suspension of the eligible entity revisions to the construction
permit rules. Media Bureau Provides Notice of Suspension of Eligible Entity Rule Changes and Guidance on The
Assignment of Broadcast Station Construction Permits to Eligible Entities
, Public Notice, 26 FCC Rcd 10370 (Med.
Bur. 2011). The Bureau provided guidance on the treatment of final application grants, non-final application grants,
and pending applications involving the assignment of broadcast construction permits to eligible entities. MMTC has
requested that the Commission further modify this rule change by clarifying that eligible entities also will be
afforded up to 18 months for construction under expired permits for “major modifications of authorized facilities.”
Letter from David Honig, President and Executive Director, MMTC, to Marlene H. Dortch, Secretary, FCC, Att. at
3 (July 12, 2011) (MMTC July 12 Ex Parte Letter).
402 Diversity Order, 23 FCC Rcd at 5936, ¶ 31 (relaxing the equity/debt plus (EDP) attribution standard for interest
holders in eligible entities by “allow[ing] the holder of an equity or debt interest in a media outlet subject to the
media ownership rules to exceed the 33 percent threshold set forth in [the EDP standard] without triggering
attribution where such investment would enable an eligible entity to acquire a broadcast station provided: (1) the
combined equity and debt of the interest holder in the eligible entity is less than 50 percent, or (2) the total debt of
the interest holder in the eligible entity does not exceed 80 percent of the asset value of the station being acquired by
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Policy;403 (4) Duopoly Priority for Companies that Finance or Incubate an Eligible Entity;404 (5)
Extension of Divestiture Deadline in Certain Mergers;405 and (6) Transfer of Grandfathered Radio Station
Combinations to Non-Eligible Entities.406 We seek comment on whether or not the Commission, either in
this proceeding or a separate rulemaking, should attempt to reinstate any of these measures. In particular,
if the Commission decides to readopt the preexisting eligible entity definition on remand, should it also
reinstate each of the measures that rely on this definition? Alternatively, if the Commission adopts a new
standard to replace or supplement the eligible entity definition, should we apply that revised standard to
each of the above-listed measures, but otherwise reinstate them in their current form? Are there reasons
why we should either decline to readopt any of these measures on remand or make any changes to them if
we implement a new eligibility standard? We also seek comment on whether reinstating these measures,
either in their current form or with proposed changes, would be an effective means of advancing our
policy goals and whether such action would be consistent with applicable constitutional law standards.
We further invite comment on whether the Commission would need additional data in order to justify the
readoption of any of these measures and, if so, we request that such data be submitted to the
Commission.407
169. The Commission also sought comment on a number of additional measures intended to
promote diversity among broadcast licensees in the Diversity Third FNPRM.408 Several of these
proposals rely on the now vacated eligible entity definition or another proposed eligibility standard. As
set forth in the FNPRM, these proposals include: (1) Share-Time Proposals;409 (2) Retention of AM
Expanded Band Owners’ Station if One Station Is Sold to an Eligible Entity;410 (3) Structural Waivers for





the eligible entity and the interest holder does not hold any equity interest, option, or promise to acquire an equity
interest in the eligible entity or any related entity”).
403 Id. at 5939, ¶ 39 (modifying the distress sale policy by allowing a licensee that has been designated for a
revocation hearing or has a renewal application that has been designated for hearing on basic qualification issues to
sell the station to an eligible entity prior to the hearing).
404 Id. at 5943, ¶ 56 (giving an applicant for a duopoly that agrees to finance or incubate an eligible entity priority
over other applicants in the event that competing duopoly applications simultaneously are filed in the same market).
405 Id. at 5943-44, ¶¶ 57-60 (agreeing to consider requests to extend divestiture deadlines when applicants actively
have solicited bids for divested properties from eligible entities and further stating that entities granted such an
extension must sell the divested property to an eligible entity by the extended deadline or have the property placed in
an irrevocable trust for sale by an independent trustee to an eligible entity).
406 Id. at 5944-45, ¶ 61 (permitting the assignment or transfer of a grandfathered radio station combination intact to
any buyer, and not just an eligible entity as previously allowed, so long as the buyer files an application to assign the
excess stations to an eligible entity or to an irrevocable divestiture trust for the ultimate assignment to an eligible
entity within 12 months after consummation of the purchase of the grandfathered stations).
407 By contrast, if the Commission decides that it is not feasible to replace the eligible entity definition and therefore
declines to adopt any new definition on remand, then, absent further action by the Commission, each of the
measures vacated by the court would remain void. Accordingly, these measures would be rescinded by the
Commission.
408 Diversity Third FNPRM, 23 FCC Rcd at 5952-57, ¶¶ 87-101.
409 Id. at 5953, ¶ 87 (seeking comment on a proposal to grant “FM licensees that broadcast in HD using IBOC
technology the voluntary option of assigning the right to operate an HD radio stream to an SDB” and seeking
comment on a plan “to use share-time procedures to permit the bifurcation of a single channel, analog FM station
into an ‘Entertainment Station’ and a ‘Free Speech Station ’” where the “‘Free Speech Station’ would be
independently owned by an SDB”).
410 Id. at 5953, ¶¶ 90-91 (seeking comment on a proposal to extend the period during which AM licensees have been
permitted to operate on an expanded band pursuant to Section 73.3555, Notes 9 and 10 of the Commission’s rules,
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Creating Incubator Programs;411 and (4) Proposals of the National Association of Black Owned
Broadcasters and the Rainbow/PUSH Coalition.412 A number of parties filed comments on these
proposals in response to the Diversity Third FNPRM.413 With regard to the third proposal, MMTC
recently has urged the Commission to take action on a similar Minority Ownership Incubation
Proposal.414 In light of the Third Circuit’s remand, we again seek comment on the proposals in the
Diversity Third FNPRM, as well as those that have been suggested more recently, in this proceeding. In





47 CFR § 73.355, Notes 9 and 10, and to allow licensees, before a specified disposition date, to assign or transfer
control of one of the paired AM stations to a radio broadcaster that qualifies as a small business as defined by the
SBA).
411 Id. at 5955-56, ¶ 97 (seeking comment on a two-year “Trial Incubation Plan” that would allow entities that create
and maintain an incubator program for SDBs to receive a waiver of the local radio ownership rule for the acquisition
of one additional station above the existing caps rules in large markets). MMTC recently has urged the Commission
to take action on a similar Minority Ownership Incubation Proposal. See MMTC July 12 Ex Parte Letter Att. at 1.
412 “Specifically, the Rainbow/PUSH Coalition has proposed that the Commission (1) examine assignment and
transfer applications to discern potential impact on minority ownership; (2) decline to grant temporary waivers of
local ownership rules to parties proposing a transaction that would create station combinations that exceed the
ownership caps; (3) treat local marketing agreements as attributable interests; and (4) allow minorities to own station
combinations equal to the largest combination in a market in order to counterbalance the economic impact of
grandfathered holdings.” Diversity Third FNPRM, 23 FCC Rcd at 5956-57, ¶ 101; see also infra Section V.
413 See, e.g., DCS July 30, 2008 Comments, MB Docket No. 07-294, at 15 (stating that the Commission should
afford minorities a head start by initially limiting share-time rule assignments of FM HD and DTV sub-channels to
SDBs); NPR July 30, 2008 Comments, MB Docket No. 07-294, at 5-6 (stating that that the Commission should
reject the proposal to give an existing FM licensee the ability to assign a portion of its digital bit stream to an
independent third party); St. Thomas More Foundation July 30, 2008 Comments, MB Docket No. 07-294, at 4
(supporting the AM expanded band proposal and advocating for inclusion of non-profit organizations as entities
eligible for pairing under this proposal); Bryan Broadcasting et al. July 30, 2008 Comments, MB Docket No. 07-
294, at 2-6 (stating that a broadcaster operating in the expanded band should be required to transfer one of the paired
stations at the close of its five year transition period or two years from the date the Commission grants authority for
current holders of expanded band licenses to transfer one of their licenses to designated entities, whichever is later);
NAB July 30, 2008 Comments, MB Docket No. 07-294, at 4-5 (stating that the Commission should not limit any
waiver policy for incubating stations to radio stations in large markets); Venture Technologies Group July 30, 2008
Comments, MB Docket No. 07-294, at 2-3 (stating that a waiver policy for incubating stations will decrease
diversity by allowing large radio groups to avoid ownership limits); see also DCS July 30, 2008 Comments, MB
Docket No. 07-294, at 27-28 (supporting the proposals of NABOB and the Rainbow/PUSH Coalition); NAB July
30, 2008 Comments, MB Docket No. 07-294, at 12 (stating that the NABOB and Rainbow/PUSH proposal would
be vulnerable to court challenge as a race-based rule and suggesting an alternative model).
414 See MMTC July 12 Ex Parte Letter Att. at 1. Specifically, MMTC has proposed an incubation program pursuant
to which the local radio ownership rule would be waived for radio broadcasters that engage in one of six “Qualifying
Activities,” including (1) selling or donating a commercial radio station to a qualified entity; (2) entering into a local
marketing agreement with an independent programmer for a five year period for the use of an FM HD-2 or HD-3
channel; (3) financing one year of operations and providing in-kind technical and engineering assistance or
equipment that enables an eligible entity to reactivate and restore to full service a dark commercial or
noncommercial broadcast station; (4) donating a commercial or noncommercial station to an Historically Black
College or University, an Hispanic Serving Institution, an Asian American Serving Institution, or a Native American
Serving Institution; (5) “providing loans, loan guarantees, lines of credit, equity investments or other direct financial
assistance to a qualified entity to cover more than 50 [percent] of the purchase price of a radio station”; or (6)
engaging in another action that is “likely to enhance radio station ownership opportunities for qualified entities.” Id.
at 1-2. Under MMTC’s proposal, the Qualifying Activity must occur in either the same market as or a larger market
than the market for which the waiver is requested. Id. at 1. Radio broadcasters that engage in Qualifying Activities
would be eligible to receive an unlimited number of waivers of the AM and FM subcaps and a specified number of
waivers of the local radio ownership caps based on market size. Id. at 3.
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particular, we ask for input on how the court’s remand of the provisions relying on the eligible entity
definition should impact our consideration of each of these proposals. We also seek comment on whether
the adoption of these measures would advance our policy objectives and on the legal implications of
implementing these proposals. Further, we invite parties to comment on whether the Commission would
need additional data in order to justify any of these measures and encourage parties to provide any data
that may be helpful to our analysis.
170. Additional Measures to Further the Commission’s Diversity of Ownership Goals. We also
seek comment on any other measures we should consider that would advance our longstanding goal of
having a wide diversity of broadcast licensees and, more specifically, of increasing the number of
minority- and women-owned broadcast stations. In addition to the measures noted above, the Diversity
Third FNPRM
sought comment on several other proposals designed to increase participation in the
broadcast industry by new entrants and small businesses, including minority- and women-owned
businesses.415 These proposals include: (1) Opening FM Spectrum for New Entrants;416 (2) Must-Carry
for New Class A Television Stations;417 and (3) Reallocation of TV Channels 5 and 6 for FM service.418
We seek to refresh the record on these proposals in this proceeding. We also ask commenters to suggest
any additional actions the Commission should consider to advance our important diversity objectives.419
We ask commenters specifically to explain how their proposals would serve our goals and whether they
would satisfy relevant constitutional law standards.

V.

MEDIA OWNERSHIP STUDIES

171. To provide data on the impact of market structure on the Commission’s policy goals of
competition, localism and diversity, the Commission has commissioned eleven Media Ownership Studies,
which are listed in Appendix A and have now been completed. The economic studies were completed
and subject to formal peer review during the period January to July 2011. The studies, peer reviews, and
author comments on the peer reviews are available on the Commission’s media ownership website at
http://www.fcc.gov/encyclopedia/2010-media-ownership-studies.420 We invite interested parties to
submit any comments on the studies on the same comment dates indicated on the first page of this
document.


415 Diversity Order, 23 FCC Rcd at 5924, ¶ 1.
416 Diversity Third FNPRM, 23 FCC Rcd at 5956, ¶ 98 (seeking comment on a proposal to authorize FM stations to
change their community of license to any community within the same market, provided that if the community being
vacated has no other full power AM or FM station or an LPFM station that originates local programming for at least
15 percent of its airtime (a “Local Service LPFM”), then the licensee that is vacating the original community must
underwrite the cost of licensing, construction, and one full year of operation of a new Local Service LPFM to be
licensed to the original community).
417 Id. at 5956, ¶ 99 (seeking comment on whether the Commission has authority to adopt rules requiring cable
carriage of Class A television stations).
418 Id. at 5956, ¶ 100 (seeking comment on a proposal to reallocate TV Channels 5 and 6 for FM broadcasting); see
also
MMTC July 12 Ex Parte Letter Att. at 3.
419 For example, MMTC has suggested that the Commission seek to reinstate and expand its previous Tax
Certificate Policy by coordinating with the White House on draft legislation. See, e.g., MMTC July 12 Ex Parte
Letter Att. at 2.
420 We have provided the public with access to the underlying data or source material for the studies, subject to the
procedures set forth in the June 15, 2011 Protective Order. 2010 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,
MB Docket No. 09-182, Protective Order, 26 FCC Rcd 8474 (Med. Bur. 2011)
(“2010 Quadrennial Review Protective Order”).
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172. As discussed below, each of these studies defines a relevant performance metric with
respect to one or more of the three policy goals and examines how results vary across markets with
differing ownership structures. Generally, the research was designed to relate relevant performance
metrics directly to changes in ownership of broadcast facilities in local markets, the attribute of the
market that our rules directly affect. In some cases the studies found useful and important correlations.
In other cases variations were found across markets but with little correlation to local market ownership
structure. We seek comment on how to interpret and apply these results. Are there other statistical
studies available that we should consider that relate relevant performance metrics to market structure
using statistical analysis of a reasonably large sample of markets? Are there individual market case
studies available that are relevant and, if so, what role should they have in our deliberations?

A.

Studies Relating to Competition

173. With standard private goods, a study of competitive performance would normally begin
with an examination of the relationship between price and marginal cost. Broadcast television and radio
programming do not have end user prices, so this approach cannot be implemented here. This leaves two
other options. First, we can examine television viewing and radio listening on the assumption that, other
things being equal, higher viewing and listening levels in a market are associated with higher consumer
satisfaction (we value competition because it provides high levels of consumer satisfaction). Second, we
can survey consumers about their valuation of the media environment. Competition can benefit
consumers not only by delivering a valued mix of programming at a point in time, but also by promoting
innovation. Our slate of studies included both approaches to the direct assessment of consumer
satisfaction and also examines one manifestation of innovation. We tentatively conclude that these
metrics are appropriate to analyze competition and seek comment on that conclusion, as well as the
structure and conclusions of the studies described below.
174. Media Ownership Study 1 examines television audience ratings during parts of the day
when programming is locally selected (in particular, dayparts other than prime time, because most prime
time programming is network selected).421 The study found no significant relationship between variations
in viewing and variations in market structure across markets.422 We seek comment on the use of these
metrics to measure competition, as well as the results of Media Ownership Study 1.
175. Media Ownership Studies 5 and 7 each provide some analysis of variations across markets
in radio listening. Media Ownership Study 5 examines listening to news radio stations.423 It finds no
significant correlation between market structure and listening, although it does find that the addition of a
public news station has a significant impact on news listening.424 In many if not most markets, there is
not more than one public news station, so the results are plausibly understood as suggesting that adding
the first public news station in a market has a significant effect. It is not clear that adding additional
public news stations would have the same effect. We seek comment on the structure and conclusions of
Media Ownership Study 5, including how we should consider the impact of public news stations on
competition given the results of the study.
176. Media Ownership Study 7 focuses on the provision of radio programming to minority
audiences.425 It first documents the significant differences in listening patterns across the Black and


421 Media Ownership Study 1.
422 Id. at 15.
423 Media Ownership Study 5.
424 Id. at 17.
425 Media Ownership Study 7.
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White and across the Hispanic and non-Hispanic demographic groups.426 The study also examines the
impact of market structure on listening with inconclusive results.427 We seek comment on the design of
Media Ownership Study 7, as well as its results with respect to radio listening, and what, if anything,
those results can contribute to our analysis.
177. Media Ownership Study 2 utilizes survey data as a basis for estimating consumers’
willingness to pay for (i.e., valuation of) various characteristics of their media environment (diversity of
opinion, community news, multiculturalism, and advertising).428 The portion of the Media Ownership
Study 2 analysis most directly related to competition is the study of advertising and consumers’ revealed
willingness to pay for reductions in it. Some past research has interpreted the amount of advertising as a
kind of “price” that consumers must pay to receive television programming.429 The market structure
analysis in Media Ownership Study 2 focuses on the number of television voices in the market, and the
results appear to show that an increase raises the amount of advertising.430 We seek comment on whether
the characteristics used in Media Ownership Study 2 to measure consumer satisfaction adequately
measure total consumer satisfaction. In particular, we seek comment on the extent to which correlations
between market structure and the amount of advertising in a market provide a useful proxy for
competition in the marketplace. Commenters who argue that important elements of the media
environment are missing from the study are requested to indicate how consumer satisfaction is affected by
the missing elements as well as how the missing elements are likely to be correlated with the elements of
the media market structure our ownership rules can influence.
178. Media Ownership Study 10 examines how the structure of the television market has
influenced the increase in television stations’ use of multicasting.431 Innovation as evidenced by the
spread of technological advances is another area where competition in our media markets can be
observed. One could view increases in multicasting as the result of competition among television stations
in a market. The study offers two measures of multicasting: the total number of multicast channels in the
market and the average number of multicast channels per television station in the market.432 The study
finds little evidence that variations in ownership structure affect the extent of multicasting.433 Rather it
appears that other market characteristics, such as the market size and the number of television stations
operating in the market, are more relevant factors.434 We seek comment on the use of multicasting as a
metric to study innovation and competition in the market, including whether one measure used in Media
Ownership Study 10 is a more appropriate one than the other.

B.

Studies Relating to Localism

179. We sought to measure localism, in part, by looking at the effect of local market structure
on the quantity of local news and public affairs programming provided at both the market level and the


426 Id. at 8-9.
427 Id. at 23.
428 Media Ownership Study 2.
429 See, e.g., Television Station Ownership Structure and the Quantity and Quality of TV Programming, by Gregory
S. Crawford (2007) (Ownership Study 3 in the 2006 quadrennial review proceeding).
430 See Media Ownership Study 2 at 88, Table 20.
431 Media Ownership Study 10.
432 Id. at 33-34.
433 Id. at 54.
434 Id.
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station level.435 Media Ownership Study 1 examines a number of factors relating to the quantity and
quality of local information and correlates that information with the structure of the local media market.
In this study, quality is measured by using ratings as the variables to determine how much people prefer
certain types of programming, including local news programming.436 The study does not identify a
relationship between ownership structure and local news ratings or hours of programming.437 We seek
comment on how well Media Ownership Study 1 measures the degree to which the localism needs of the
local population are being served. The study defines television ratings, restricted to the evening time
period, as a reasonable measure for the quality of the local television content in the market.438 Does a
measure of the rating of local news provide a better measure of localism than a measure of all content
viewing during this period? Should our localism metric necessarily rely on consumer preference? Media
Ownership Study 1 also examines three measures of the amount of news available in the market: the
number of news formatted radio stations, the number of hours of local news, and daily newspaper
circulation.439 Is the number of news formatted radio stations an appropriate measure of localism in the
absence of information on the type of news carried by the stations? Would one expect the amount of
local news on a news formatted station to vary across markets in a predictable manner? Is the circulation
of daily newspapers in a market a reasonable measure of the availability of local content? How should it
be interpreted? What, if anything, does a high newspaper circulation level indicate about local content on
television and radio stations in the same market?
180. Media Ownership Study 4 also provides an analysis of the quantity of local television news
and public affairs programming.440 Media Ownership Study 4 finds that local news and public affairs
minutes provided in a market increases with the number of television stations and the number of Big Four
(ABC, NBC, CBS, Fox) affiliates in the market. 441 The presence of a newspaper-television combination
in a market appears to reduce total local news minutes in the market, even though the cross-owned station
itself produces more local news than otherwise comparable stations.442 At the station level, Media
Ownership Study 4 finds that radio-television cross-ownership appears to increase local news.443
Superficially Media Ownership Study 1 and Media Ownership Study 4 appear similar because each
measures the quantity of local news. We note, however, that the sources each study uses to catalog the
amount of news are different. In addition, the empirical models differ. How should the Commission
weigh each of these studies? Is one data source superior to another? Media Ownership Study 4 examines
individual station and market behavior. How should we weigh conflicting results between market
outcomes and station behavior?
181. Media Ownership Study 5 examines the prevalence of news formatted radio stations and
the listenership of those stations.444 The data for this study do not separate local and national news


435 We note that our studies do not address local content that is locally-originated, but not news related. To the
extent that locally-originated, non-news content may contribute to localism, such content is not evaluated in the
media ownership studies.
436 Media Ownership Study 1 at 11-12.
437 Id. at 15-16.
438 Id. at 11.
439 Id.
440 Media Ownership Study 4.
441 Id. at 25.
442 Id. at 27-28.
443 Id. at 28.
444 Media Ownership Study 5 at 1-2.
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programming or account for news programming on stations that are not designated as news formatted. Is
the news content of news-formatted stations sufficiently local that we can use the number of such stations
as a reliable metric for the amount of localism in a radio market? The study also analyzes usage of news,
via the overall ratings of the news-formatted radio stations. Are ratings a sufficient measure of the quality
of the local content provided by the station? We note that the study examines only radio markets defined
by Arbitron, which tend to be in the more populous areas of the country. Should we expect the more rural
areas to differ? The study concludes there are few significant relationships between news formatted
stations and ownership structure.445 The study does provide weak evidence, however, that an increase in
the size of the largest local owner group is associated with an increase in the number of news stations and
the number of different news formats offered in the market.446 We seek comment on these conclusions.
182. Media Ownership Study 6 examines the state of local news on the Internet to determine
whether the Internet provides a net increase to media diversity in local markets.447 Media Ownership
Study 6 first determines which news sites are not affiliated with a traditional media outlet such that they
can be considered a new or independent news source.448 The study provides data on online local news
sites within the top 100 U.S. television markets that reach more than a minimum threshold of traffic.
Media Ownership Study 6 concludes that there is a very limited amount of local news on the Internet that
is provided by organizations that are not broadcasters or print media organizations.449 We tentatively
conclude from Media Ownership Study 6 that, while the potential of the Internet for local, or even hyper-
local, news is great, very few such sites today reach a significant audience, at least in the top 100 markets.
We seek comment on that tentative conclusion. We also note that the analysis is based upon the most
widely visited sites. Is it possible that a sufficient number of lightly visited sites carrying content
produced by non-traditional media exist such that they act as a reservoir of local content available to
consumers? If not, are the barriers to entry into web publishing sufficiently low such that a failure by
broadcasters to provide consumers with their desired level of local news and information will attract
competitors? Does the current relative absence of competitors provide any indication of how well the
traditional media are serving the needs of consumers?
183. Media Ownership Study 3 examines public knowledge and civic participation to determine
whether consolidation results in a more or less informed public.450 Media Ownership Study 3 considers
several metrics of civic engagement, including knowledge of political candidates and issues, as potential
indicators of how well the media environment supplies information about local issues.451 It finds little
relationship between media market structure and consumers’ knowledge about presidential and
congressional candidates, interest in politics, or turnout at the polls.452 The peer reviewer raised several


445 Id. at 11-17.
446 Id. at 14.
447 Media Ownership Study 6.
448 Id. at 15-19.
449 Id. at 29-30.
450 Media Ownership Study 3, How the Ownership Structure of Media Markets affects Civic Engagement and
Political Knowledge, 2006-2008, by Lynn Vavreck, Simon Jackman, and Jeffrey B. Lewis (“Media Ownership
Study 3”).
451 Id. at 17-20, 54-55.
452 Id. at 51-53, 78-79.
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questions about the usefulness of these particular measures of civic knowledge and engagement.453 Are
the metrics reliable indicators of such characteristics? The study does find a relationship between
political participation and political advertising on television.454 Could there be a connection that Media
Ownership Study 3 did not measure between market structure and a political candidate’s decision to
advertise in that market, which influenced civic knowledge and participation? We seek comment on these
issues.
184. Finally, Media Ownership Study 2, discussed above in the Competition section, provides
the Commission with information on the relative value consumers place on our diversity and localism
goals. When examining the influence of market structure on consumer valuation, the study finds that the
number of television voices does not have an impact on the consumer’s perception of the amount of
community news provided.455 We note that the average consumer places a higher value on opinion
diversity and local news content than on content diversity.456 How should the Commission evaluate this
trade-off? Is the valuation by the average consumer the most appropriate measure or should we look at
the valuations broken down by demographic groups?

C.

Studies Relating to Diversity

185. In commissioning ownership studies on diversity, the Commission elected to measure the
availability of news and civic engagement in local markets as it relates to local market structure in a
variety of ways, as described below. We tentatively conclude that these metrics are appropriate to
analyze diversity and seek comment on that conclusion, as well as the individual studies described below.
Media Ownership Study 5 examines whether ownership structure impacts the availability and listenership
of radio stations with a news format in local radio markets, as discussed above. Markets with more news
formatted radio stations would be considered to have a greater level of program diversity. The study
concludes there is no evidence that newspaper-radio cross-ownership increases news variety or
listening.457 As discussed above, the study provides weak evidence that an increase in the size of the
largest local owner group is associated with an increase in the number of news stations and the number of
commercial news varieties present in the market.458 Are these format categories for news and information
useful measures of program diversity?
186. We also assessed diversity in Media Ownership Study 2. The study analyzes the existing
and preferred quantity of information of interest specifically to women and minorities, which it refers to
as multiculturalism.459 Analysis of the survey results allowed the researchers to estimate the value
consumers place on increased amounts of this media market characteristic.460 We tentatively conclude
that what the study labeled as multiculturalism is a useful, though not singular, indicator of the level of
program diversity in the market. The survey asked consumers about their media environments overall
rather than the characteristics of a particular medium such as radio or television. When examining the


453 Peer Review of Study 3 of the FCC Media Ownership Studies, “Report to the FCC: How the Ownership
Structure of Media Markets Affects Civic Engagement and Political Knowledge, 2006-2008,” at 4, 6-8, by Scott L.
Althaus.
454 Media Ownership Study 3 at 51-53.
455 See Media Ownership Study 2 at 88, Table 20.
456 Id. at 40.
457 Media Ownership Study 5 at 17.
458 Id. at 14.
459 Media Ownership Study 2 at 35-41.
460 Id. at 40-41.
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influence of market structure on consumer valuation, the study finds that the number of television voices
has a significantly positive impact on consumers’ valuation of opinion diversity and multiculturalism,
even after accounting for the number of stations in the market.461 Examining the effect of a combination
of two television stations in a market, the study finds such a combination leads to a loss in average
consumer welfare which is greater in smaller markets.462 The study finds that the combination does
benefit consumers due to a reduction in the perceived amount of advertising.463 While the changes in
consumer welfare from such a transaction vary significantly by market size for opinion diversity and
advertising, the effect on multiculturalism varies substantially less by market size.464 How should we
assess consumers’ satisfaction against the overall media environment when balancing the benefits of
program diversity with any possible countervailing effects?
187. Media Ownership Study 8B directly measures the diversity of content by measuring the
diversity of viewpoints discussed on local television news programs.465 The study catalogs words used in
broadcasts and then measures variation among stations in a market.466 Viewpoint diversity in this study is
considered in terms of diversity in discussions of political figures, issues, and local regions.467 How
should each of these measures of content diversity be weighted? The analysis is based on the content
available in 37 large markets.468 Would the results of this study likely hold in smaller markets? Can the
findings for television news be generalized to other sources of news, such as radio and newspapers?
188. Media Ownership Study 9 is a theoretical and experimental study of the impact of market
structure on the incentives of media outlets to withhold information from citizens when withholding could
benefit the policy position the media owner favors.469 In the past, many analyses of market structure and
diversity have focused on the idea that, to ensure a wide range of viewpoints are provided, it is important
to have multiple independent media outlets. The underlying presumption is that with many independent
outlets it is likely that the decision makers for content transmission will have varying points of view and
so varying points of view will be disseminated.
189. Media Ownership Study 9 emphasizes the importance for information transmission of
having multiple outlets with the same viewpoint, with rivalry among outlets with similar viewpoints
serving to prevent information withholding.470 The theoretical model is an abstraction, beginning with
two outlets and a single policy issue on which they can have differing viewpoints and adding additional
outlets. One conclusion is that “competition within viewpoints dramatically enhances information
revelation.”471 In the real world, there are of course multiple issues and likely more than two alternative
viewpoints per issue. Nevertheless, the analysis is valuable because it provides strong support for having
at least four independent media voices, since every issue has at least two viewpoints and two outlets per


461 See id. at 88, Table 20.
462 Id. at 50-51.
463 Id.
464 See id. at 90, Table 22.
465 Media Ownership Study 8B.
466 Id. at 5.
467 Id. at 5-8.
468 Id. at 5.
469 Media Ownership Study 9.
470 Id. at 2, 45-47.
471 Id. at 47.
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viewpoint are needed in the model to ensure information regarding a viewpoint is not withheld. The
experimental results are also suggestive, first because, broadly speaking, they confirm the theoretical
predictions, but also because they indicate the market performance improves with additional media
outlets, but that the marginal value (for information transmission) of additional outlets declines as the
number of outlets increases. We seek comment on the validity of the theoretical model and the extent to
which inferences based on it are relevant to our diversity analysis.
190. While Media Ownership Studies 5 and 8B focus on diversity measures relating to the
content of the medium, Media Ownership Study 8A measures diversity of content by observing how
consumers react to the content delivered to them.472 Can consumer behavior provide a reliable indicator
of the level of diversity? The study utilizes variations in viewing patterns of local television news
programs as compared to local viewing patterns for national television news programs to develop a
measure of diversity of content on local news programs.473 The study compares the dispersion of the
market shares of national news programs to the dispersion of the market shares of local news to
benchmark the diversity offered by local news in a market.474 It finds little correlation between viewpoint
diversity and local market ownership structure.475 We seek comment on these results.
191. Media Ownership Studies 1 and 5 measure the market share of local television news
programs and news-formatted radio stations, respectively. Media Ownership Study 1 examines variations
in viewing of local television news programming but finds little relationship to market structure.476 Can
these metrics also provide information about the diversity of content provided by the media in addition to
satisfaction with the media? Will diverse content necessarily attract a larger audience than less diverse
content, or is the effect contingent on the diversity of the population within the market? We seek
comment on whether these two studies can provide additional information on the level of diversity in a
local market.
192. Measures of civic engagement also can be used to assess the level of viewpoint diversity in
a market. For instance, if media outlets in a market supply programming with a diverse range of
viewpoints, consumers may be better informed, which can lead to increased local civic participation. As
noted above, Media Ownership Study 3 provides data relevant to this analysis. It measures civic
participation and knowledge. Does this metric also provide useful information about the level of
viewpoint diversity in the market? Several measures examined by the study may have relevance to
diversity depending on how consumers react to hearing diverse viewpoints. The study measures
consumers’ recognition of politicians.477 Is it reasonable to conclude that markets where consumers are
more likely to recognize the positions held by various politicians are markets in which more diverse
information is available? We seek comment on the relevance of civic participation for measuring the
level of viewpoint diversity in the market.

D.

Study Relating to Minority and Women Ownership Issues

193. Media Ownership Study 7 considers the relationship between ownership structure and the
provision of radio programming targeted to African-American and Hispanic audiences.478 It provides


472 Media Ownership Study 8A.
473 Id. at 8-13.
474 Id.
475 Id. at 22.
476 Media Ownership Study 1 at 15.
477 Media Ownership Study 3 at 54-78.
478 Media Ownership Study 7 at 1.
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mixed evidence on whether minority-owned radio stations better serve minority populations. This study
looks at the provision of radio programming to minority (African-American and Hispanic) audiences, as
reflected in the choices of radio stations to select formats that are popular with minority audiences.479 It
reflects that minority audiences—specifically Black and Hispanic listeners—have very different listening
preferences from the majority non-Hispanic, White population.480 For example, the study shows that a
single programming format, Urban- attracts half of black listening, while it attracts less than five percent
of nonblack listening.481 The data also suggest that there is a positive relationship between minority
ownership of radio stations and the total amount of minority-targeted radio programming available in a
market– in other words, that minority-owned stations are more likely to provide programming targeted to
minorities than are non-minority owned stations.482 The data do not indicate a clear relationship between
ownership concentration and the number of different radio formats in each market, although the cross-
sectional analysis does suggest that ownership concentration promotes a greater number of formats in the
market.483 We seek comment on this study and on the appropriate application of its analysis to our policy
goals. Are there other statistical studies available that we should consider, relating market structure and
the promotion of content that is specifically of interest to minorities and women? Do such studies use
statistical analysis of a reasonably large sample of markets? Are there individual market case studies
available that are relevant and, if so, what role is there for such case studies in our deliberations?

VI.

ATTRIBUTION MATTERS

194. The Commission’s broadcast attribution rules define which financial or other interests in a
licensee must be counted in applying the broadcast ownership rules. They seek to identify those interests
in licensees that confer on their holders a degree of “influence or control such that the holders have a
realistic potential to affect the programming decisions of licensees or other core operating functions.”484
Although we did not seek comment on attribution issues in the NOI, we do so now in order to address
issues raised in the record regarding the impact, both positive and negative, of certain agreements on our
ownership rules and fundamental policy goals.
195. We seek comment in particular regarding local news service (“LNS”) agreements and
shared service agreements (“SSAs”). An LNS agreement is defined by commenters as an agreement in
which multiple local broadcast television stations contribute certain news staff and equipment to a joint
news gathering effort coordinated by a single managing editor.485 According to commenters, an SSA is


479 Id.
480 Id. at 8-9.
481 Id. at 8.
482 Id. 20-21, 24.
483 Id. 22-23, 25.
484 Review of the Commission’s Regulations Governing Attribution of Broadcast and Cable/MDS Interests, MM
Docket No. 94-150, Report and Order, 14 FCC Rcd 12559, 12560, ¶ 1 (1999) (“1999 Attribution Order”), recon.
granted in part,
Memorandum Opinion and Order on Reconsideration, 16 FCC Rcd 1097 (2001), stayed, Order, 16
FCC Rcd 22310 (2001).
485 CWA Comments at 23; CWA Reply App. 1.1, CWA May 7, 2010 Comments, GN Docket No. 10-25, at 12
(“CWA Reply App. 1.1”); Free Press Comments at 10. CWA explains that under such an agreement a managing
editor will determine which stories the LNS will cover and the resulting story produced by the LNS is then available
for use by the participating stations. CWA Reply App. 1.1 at 12-13. CWA bases its description of LNSs on its
review of a redacted copy of a Fox/CBS LNS agreement in the Boston market and a Fox/ABC LNS agreement in
the Detroit market. Id. at 12. CWA believes these agreements to be representative of LNS agreements in general as
Fox is a party to twelve of the seventeen LNSs identified by CWA. Id. CWA distinguishes these arrangements
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an agreement, or series of agreements, in which one in-market station provides operational support and
programming for another in-market station.486 Public interest commenters contend that LNS agreements
and SSAs result in fewer independent voices and less local news content and could be used to circumvent
our rules.487 On the other hand, broadcasters assert that these agreements facilitate greater collaboration
between media outlets and permit stations to sustain labor intensive journalism, thereby offering more
communities access to local news content than could otherwise be achieved.488
196. Background. Our attribution rules currently make attributable certain local marketing
agreements (“LMAs”), also referred to as time brokerage agreements (“TBAs”), in which a broker
purchases discrete blocks of time from a licensee and supplies programming and sells advertising for the
purchased time.489 Certain joint sales agreements (“JSAs”), which “involve primarily the sale of
advertising time and not decisions concerning programming,” are also subject to attribution.490 These
agreements are not precluded by any Commission rule or policy as long as the Commission’s ownership
rules are not violated and the participating licensees maintain ultimate control over their facilities.
197. The Commission first adopted attribution rules for same-market radio LMAs in 1992.491
The Commission was concerned that absent such rules significant time brokerage under such agreements,
combined with increased common ownership permitted by revised local radio ownership rules, could
undermine the Commission’s competition and diversity goals.492 In 1999, the Commission adopted
attribution rules for television LMAs, finding that the rationale for attributing same-market radio LMAs
applied equally to same-market television LMAs, but declined to adopt attribution rules for radio or
television JSAs.493 However, the Commission, in its 2002 Biennial Report and Order, adopted attribution
rules for same-market radio JSAs, finding that JSAs may convey sufficient influence and control over
advertising to merit attribution.494 Subsequently, in 2004, the Commission initiated a rulemaking to
determine whether or not to adopt attribution rules for television JSAs; the Commission tentatively





from, and does not have issue with, traditional “pool” coverage of events, which is done to accommodate a lack of
physical space for multiple news crews. Id. at 13.
486 CWA Reply App. 1.1 at 3; Free Press Comments at 10-11.
487 CWA Comments at 32-33; CWA Reply App. 1.1 at 18-19.
488 See, e.g., Gray Comments at 14; Local TV Coalition Reply at 7; NAB Comments at 84; Nexstar Comments at 19.
489 47 C.F.R § 73.3555, Note 2(j); see also Rules and Policies Concerning Attribution of Joint Sales Agreements in
Local Television Markets
, MB Docket No. 04-256, Notice of Proposed Rulemaking, 19 FCC Rcd 15238, 15239, ¶ 4
n.7 (2004) (“2004 TV JSA Attribution NPRM”).
490 47 C.F.R § 73.3555, Note 2(k); see also Rules and Policies Concerning Multiple Ownership of Radio Broadcast
Stations in Local Markets
, MM Docket No. 01-317, Notice of Proposed Rulemaking and Further Notice of Proposed
Rulemaking, 16 FCC Rcd 19861, 19894, ¶ 82 (2001) (“Multiple Ownership of Radio Broadcast Stations in Local
Markets
”).
491 1992 Radio Ownership Order, 7 FCC Rcd at 2788-89, ¶¶ 64-67.
492 Id. at 2788-89, ¶¶ 64-66.
493 1999 Attribution Order, 14 FCC Rcd at 12597, 12612, ¶¶ 83, 122.
494 2002 Biennial Review Order, 18 FCC Rcd at 13745, ¶¶ 321-322. Comment on attribution of radio JSAs was not
sought as part of the then biennial media ownership review proceeding, instead it had been sought in a separate
proceeding regarding the local radio ownership rules (MM Docket No. 01-317) that was subsequently consolidated
with the 2002 biennial media ownership review proceeding. Id. at 13743, ¶ 316 n.688; see also Multiple Ownership
of Radio Broadcast Stations in Local Markets
, 16 FCC Rcd at 19894, ¶ 83. Since no comment had been sought on
attribution of television JSAs, the Commission declined to adopt any attribution rules for television JSAs in the 2002
Biennial Review Order
. 2002 Biennial Review Order, 18 FCC Rcd at 13743, ¶ 316 n.688.
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concluded that it should.495 No decision has been issued in that proceeding.496
198. Potential Concerns. CWA and Free Press object to LNS agreements because they believe
that collaboration under LNS agreements harms competition and reduces the amount of independently
produced local news programming available to consumers.497 These commenters are concerned that
stations will be unable to devote sufficient resources to independent journalism as a result of the staff
reductions and resource sharing resulting from the creation of an LNS.498 CWA also is concerned that
consolidating newsgathering and editorial control reduces diversity and in-depth coverage of local
news.499 Because stations are reporting the same story, CWA argues, viewers are exposed only to a single
perspective on every story covered by the LNS.500 Moreover, CWA suggests that increased
communication between stations could lead to antitrust law violations.501
199. CWA and Free Press also object to SSAs, particularly those that allow a single station to
produce the news content for multiple stations in a local market.502 According to these commenters, such
agreements result in “re-run” content being broadcast over multiple newscasts, thereby reducing the
number of independent voices available in the local community.503 Furthermore, these commenters assert
that the staff reductions that typically accompany SSAs reduce the quality, quantity, and diversity of local
news coverage.504


495 2004 TV JSA Attribution NPRM, 19 FCC Rcd at 15239, ¶ 2.
496 We also note that changes to certain other of the Commission’s cable and broadcast attribution rules, not
impacted here, are currently under consideration in a separate proceeding. See The Commission’s Cable Horizontal
and Vertical Ownership Limits
, MM Docket No. 92-264, Fourth Report and Order and Further Notice of Proposed
Rulemaking, 23 FCC Rcd 2134, 2136, ¶ 3 (2008) (“seek[ing] further comment on (1) whether to retain the single
majority shareholder attribution exemption, which currently applies to the cable and broadcast ownership rules; (2)
whether, under the cable attribution rules, a limited partner may sell programming to the partnership and retain
insulation; and (3) whether the Commission should clarify certain aspects of the cable Equity Debt (“ED”)
attribution rule, as it did for the broadcast Equity/Debt Plus attribution rule”).
497 CWA Comments at 19; CWA Reply App. 1.1 at 9-11, 14-17; Free Press Comments at 10-12. CWA recommends
we adopt certain disclosure requirements for LNS agreements. CWA Reply App. 1.1 at 24-26.
498 CWA Comments at 24-25; CWA Reply App. 1.1 at 14; Free Press Comments at 9-12. In the Philadelphia,
Pennsylvania market, for example, CWA cites to a Fox/NBC LNS, in which the stations contribute 25 newsroom
staff to the LNS, approximately 20 percent of the available personnel in each station’s newsroom. CWA Reply App.
1.1 at 14-15. Moreover, CWA claims that local Fox station, KTTV, dismissed 120 people when the station
commenced its LNS in the Los Angeles, California market. CWA Comments at 23; CWA Reply App. 1.1 at 11.
499 CWA Comments at 24-25; CWA Reply App. 1.1 at 15.
500 CWA Reply App. 1.1 at 16. In the Austin, Texas market, CWA criticizes an LNS, which consists of the local
affiliates of ABC, CBS, NBC, Fox, and MyNetwork. Id. at 15-16. CWA also cites to a recent finding that the
overall depth of coverage on routine stories – those typically covered by LNSs – is on the decline; CWA is
concerned that an increase in reliance on LNSs will accelerate this decline to the detriment of local viewers. Id. at
16.
501 Id. at 15-16.
502 CWA Comments at 22-23; CWA Reply App. 1.1 at 9-10; Free Press Comments at 10-11. CWA asks the
Commission to adopt changes to the attribution rules to make SSAs, particularly those that involve outsourcing local
news operations, attributable and to act on pending matters involving SSAs and allegations of unauthorized transfer
of control. CWA Reply App. 1.1 at 19-24.
503 CWA Comments at 22-23; CWA Reply App. 1.1 at 9-10; Free Press Comments at 10-11.
504 CWA Comments at 22; CWA Reply App. 1.1 at 10; Free Press Comments at 11-12. They note that significant
layoffs occurred following the execution of SSAs in the Honolulu, Syracuse, and Peoria-Bloomington markets.
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200. CWA and Free Press object to SSAs also because they believe broadcasters may be using
them to circumvent the Commission’s multiple ownership rules.505 CWA suggests that SSAs contain
very similar provisions to LMAs and JSAs, which are attributable under certain conditions under the
Commission’s multiple ownership rules.506 For instance, like many LMAs and JSAs, SSAs may involve
the sharing of facilities, advertising sales personnel, news production, and certain station operations, and
options to purchase the brokered station.507 CWA opposes broadcasters using SSAs to outsource (or
broker) newscasts, in asserted circumvention of the Commission’s attribution rules.508 According to
CWA, news programming accounts for an average of 45 percent of a station’s revenue; therefore, a
brokering station can unfairly acquire a significant portion of the economic benefit generated by the
brokered station without triggering the attribution rules.509 In addition, the American Cable Association
(“ACA”) argues that both SSAs and LMAs harm local competition particularly when they permit stations
to jointly negotiate retransmission consent. ACA argues that such arrangements permit local broadcast
stations to exercise additional leverage with respect to MVPDs leading to higher fees for signal carriage,
which are passed on to consumers in the form of higher rates.510 ACA suggests that broadcasters should
be precluded from including collective negotiation of retransmission consent in SSAs or LMAs,
particularly with respect to the four top-rated local stations.511
201. Potential Benefits. On the other hand, broadcasters assert that sharing arrangements
(including LNS agreements, LMAs, SSAs, and JSAs) are beneficial to local media markets, generating
local news and other services that would not be possible otherwise.512 Gray asserts that, because of the
considerable cost savings associated with its sharing agreements, it can invest in the development of
multicast programming streams, mobile video applications, and other uses of the broadcast spectrum.513





CWA Comments at 22; CWA Reply App. 1.1 at 9-10. In addition, in the Honolulu market, CWA asserts that
pursuant to an SSA, the NBC, CBS, and MyNetwork local broadcast affiliates do not originate any news
programming, but obtain news from Raycom Media. CWA Comments at 21; CWA Reply App. 1.1 at 7. Professor
Danilo Yanich conducted a study of the Honolulu market to determine the impact of this SSA on the newscasts in
the local market. See Danilo Yanich, Local TV & Shared Services Agreements: Examining News Content in
Honolulu (Feb. 2011), available at http://mediacouncil.org/wp/resources/SharedServicesStudy.pdf. By comparing
newscasts from before and after the SSA was implemented in October 2009, Professor Yanich determined that the
SSA resulted in a reduction in independent news voices in the market (as multiple stations now simulcast the same
newscasts) and that the claimed increases in news content from common operation did not materialize. Id. at 28-29.
505 CWA Comments at 19-20; CWA Reply App. 1.1 at 10; Free Press Comments at 13-14.
506 CWA Comments at 21; CWA Reply App. 1.1 at 6.
507 CWA Reply App. 1.1 at 6; Free Press Comments at 10.
508 CWA Comments at 20-21 (citing BOB PAPPER, RADIO TELEVISION DIGITAL NEWS ASS’N, TV AND RADIO
STAFFING AND NEWS PROFITABILITY SURVEY 2009 (2009) (“RTNDA Survey”), available at http://www.rtdna.org/
media/pdfs/research/TV%20and%20Radio%20Staffing%20and%20Profitability.pdf); CWA Reply App. 1.1 at 7
(citing RTNDA Survey). CWA states that the RTNDA Survey found that the amount of local news programming
across all markets averaged 26.4 hours per week (approximately 15.7 percent of total airtime). CWA Comments at
20-21; CWA Reply App. 1.1 at 7. Stations in DMAs 101-150 were found to average 22.9 hours per week
(approximately 13.6 percent of total airtime). CWA Comments at 20-21; CWA Reply App. 1.1 at 7. Ultimately,
many stations could completely outsource their news operation without exceeding the 15 percent attribution
threshold. CWA Comments at 20-21; CWA Reply App. 1.1 at 7; see also 47 C.F.R. § 73.3555, Note 2(j).
509 CWA Comments at 20-21; CWA Reply App. 1.1 at 7.
510 ACA Comments at 2,
511 Id. at 11, 21.
512 Local TV Coalition Reply at 7; Gray Comments at 14; NAB Comments at 84; Nexstar Comments at 19.
513 Gray Comments at 14-15.
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The Local TV Coalition and Nexstar note that the Commission has long held that sharing agreements
(e.g., JSAs) generate efficiencies and serve the public interest.514
202. According to the Local TV Coalition and TTBG, sharing agreements can be particularly
important in small and mid-sized markets.515 The Coalition asserts that the advertising revenue available
in most small and mid-sized markets is insufficient to support four stand-alone broadcast television news
operations.516 In such markets, the Coalition states, broadcasters budget an average of approximately $1.8
million per year for the capital and operating expenses associated with local news production.517 The
Local TV Coalition notes that unprofitable news operations, like any unprofitable business venture, likely
will be eliminated over time.518 The Local TV Coalition submits an analysis of 20 small and mid-sized
markets, which it asserts shows that one or more news operations would have been lost without the
existence of shared services agreements or common ownership of local stations.519
203. In addition, the Local TV Coalition provides numerous examples of claimed public interest
benefits from sharing agreements. For example, in the Burlington, Vermont–Plattsburgh, New York
market, the local Fox affiliate and the local ABC affiliate entered into a JSA and a SSA in 2005.520 Prior
to entering into these agreements, the Fox station had never aired a local newscast and the ABC station
had discontinued its news operation and fired 25 staffers.521 Since concluding the sharing agreements, the
Fox station now produces newscasts for both stations, resulting in 28 new jobs.522 NAB also submits
examples of broadcast television stations that increased local news programming as a result of sharing
agreements.523 Nexstar states that sharing agreements have enabled it to increase news coverage in the
Lubbock, Texas and the Peoria-Bloomington, Illinois markets, and as a result it has launched a nightly
newscast in various markets across five states that previously had no local news coverage.524 Nexstar
asserts that any layoffs associated with these agreements typically involve back-office staff and not news
personnel.525 It also asserts that any layoffs of redundant news personnel permit local broadcasters to


514 Local TV Coalition Reply at 21-22; Nexstar Reply at 14.
515 Local TV Coalition Reply at 7; TTBG Reply at 4.
516 Local TV Coalition Reply at 7.
517 Id. at 8.
518 Id. at 7.
519 Local TV Coalition Reply App. A; see also Local TV Coalition Reply at 9-11. For example, in the Springfield,
Missouri market, the Local TV Coalition states that without the existing SSA, two of the top-four stations would
have experienced significant losses in 2010 from news operations. Local TV Coalition Reply at 10; Local TV
Coalition Reply App. A at 1. In order to keep the news operations profitable, the stations entered into an SSA with a
“stronger” affiliate. Local TV Coalition Reply at 10; see also Local TV Coalition Reply App. A at 1.
520 Local TV Coalition Reply at 12.
521 Id.
522 Id. The Coalition asserts that this news operation, and the resulting jobs, would not be possible without the JSA
and SSA. Id. For additional examples of markets where the Coalition asserts that sharing agreements have
produced public interest benefits, see id. at 12-20.
523 NAB Comments Att. B at 26. For example, NAB states that pursuant to a JSA, a station in DMA 101-150
produces 19.5 hours per week of local news for another in-market station and a station in DMA 50-100 produces a
daily newscast for another local station. Id.
524 Nexstar Reply at 6, 11-12.
525 Id. at 12.
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invest more money in news production and other local programming.526 Broadcasters state that issues
concerning the joint negotiation of retransmission consent fees should be addressed in the Commission’s
retransmission consent proceeding, and not in the media ownership proceeding.527 Ultimately,
broadcasters oppose any additional regulation of sharing agreements.528
204. Request for Comment. Are LNS agreements and SSAs substantively equivalent to
agreements that are already subject to our attribution rules, and are they therefore attributable today or
should they be attributable?529 What characteristics make them different from already attributable
agreements? How, if at all, do LNS agreements and SSAs create interests in licensees that confer a
degree of “influence or control such that the holders have a realistic potential to affect the programming
decisions of licensees or other core operating functions”?530 What is the impact of agreements such as
LNS agreements and SSAs on our competition, localism, and diversity goals? Does either of these types
of agreements have a greater impact on our policy goals than the other? If so, what characteristics
account for the disparity in impact? Should we, and if so how, consider the impact of these agreements
on our policy goals when formulating our ownership rules?
205. If we determine that LNS agreements and/or SSAs should be attributable, how should we
define LNS agreements and SSAs and what attribution standard should we adopt? If we adopt new
attribution rules, should existing agreements be grandfathered? If so, how should the grandfathering be
structured? If not, how long should broadcasters have to comply with the new attribution rules? If we
determine that these arrangements should not be attributable, should we adopt disclosure requirements?
If so, what disclosure should be required?531 Such disclosures could help viewers determine the origin of
news content and help the Commission monitor the proliferation of such agreements and determine
whether to revisit the issue of attribution.
206. What benefits accrue from stations entering into LNS agreements or SSAs? What would
be the impact of a rule that would lead to the attribution of LNS agreements or SSAs? If these
agreements result in attribution, what would be the effect, if any, on the cost to produce local news, the
ability to employ journalists, and the overall quality of news programming? Is it possible that, without
such agreements, local news coverage could be reduced or that some stations will cease news production?
207. Instead of focusing on attributing certain named agreements (e.g., JSAs, LMAs, SSAs,
LNS agreements) as we have in the past, should we adopt a broader regulatory scheme that encompasses


526 Id. at 12. Nexstar also states that the airing of commonly produced newscasts does not result in running the same
news on multiple broadcast stations. Id.
527 Coalition Reply at 2-3; Fox Reply at 2; Gray Reply at 1-2; NAB Reply at 28, 31; Nexstar Reply at 14. See also
Media Bureau Seeks Comment on a Petition for Rulemaking to Amend the Commission’s Rules Governing
Retransmission Consent
, MB Docket No. 10-71, Public Notice, 25 FCC Rcd 2731 (MB, 2010) (“Retransmission
Consent Proceeding
”).
528 Local TV Coalition Reply at 21; Gray Comments at 15; NAB Comments at 84; Nexstar Reply at 10; TTBG
Reply at 4. The Local TV Coalition also argues that the media ownership proceeding is not the appropriate venue to
consider attribution issues. Local TV Coalition Reply at 23 (noting that attribution of JSAs to broadcast television
stations is currently under consideration by the Commission in MB Docket No. 04-256).
529 See Shareholders of the Ackerley Group, Inc. (Transferor) and Clear Channel Communications, Inc.
(Transferee) For Transfer of Control of the Ackerley Group, Inc. and Certain Subsidiaries
, Memorandum Opinion
and Order, 17 FCC Rcd 10828, 10841, ¶ 33 (2002) (finding that the combination of a non-attributable radio TBA
and a radio JSA, not subject to any attribution rules at the time, were “substantively equivalent” to an LMA for more
than 15 percent of the station’s weekly broadcast time and were therefore attributable).
530 1999 Attribution Order, 14 FCC Rcd at 12560, ¶ 1.
531 See, e.g., CWA Comments at 33-35; CWA Reply App. 1.1 at 24-26.
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all agreements, however styled, that relate to the programming and/or operation of broadcast stations?532
If so, how should we define the covered agreements and structure this regulatory scheme? What
characteristics of such agreements are most likely to confer a degree of “influence or control such that the
holders have a realistic potential to affect the programming decisions of licensees or other core operating
functions”?533 Should we consider the impact of these agreements on other matters of Commission
interest, such as retransmission consent negotiations? Or are these issues more appropriately considered
in another context, such as the retransmission proceeding?534
208. We strongly encourage parties to existing agreements of all of these types to respond to
this request for comment and to provide any other information they think is relevant. It is critical that the
Commission obtain accurate information on how these agreements operate in order to make a reasoned
decision on what, if any, changes should be made to the Commission’s attribution rules.

VII.

PROCEDURAL MATTERS

A.

Regulatory Flexibility Act

209. As required by the Regulatory Flexibility Act,535 the Commission has prepared an Initial
Regulatory Flexibility Analysis (“IRFA”) of the possible significant economic impact on small entities of
the policies and rules addressed in this NPRM. The IRFA is set forth in Appendix C. Written public
comments are requested on the IRFA. These comments must be filed in accordance with the same filing
deadlines for comments on the NPRM, and should have a separate and distinct heading designating them
as responses to the IRFA.

B.

Paperwork Reduction Act Analysis

210. Initial Paperwork Reduction Act Analysis. This NPRM may result in a new or revised
information collection requirement. If the Commission adopts any new or revised information collection
requirement, the Commission will publish a notice in the Federal Register inviting the public to comment
on the requirement, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C.
3501-3520). In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-
198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it might “further reduce
the information collection burden for small business concerns with fewer than 25 employees.”

C.

Ex Parte Rules

211. Permit-But-Disclose. The proceeding this Notice initiates shall be treated as a “permit-but-
disclose” proceeding in accordance with the Commission’s ex parte rules.536 Persons making ex parte
presentations must file a copy of any written presentation or a memorandum summarizing any oral
presentation within two business days after the presentation (unless a different deadline applicable to the
Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda
summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting
at which the ex parte presentation was made, and (2) summarize all data presented and arguments made


532 For instance, the Commission previously sought comment on whether to attribute television JSAs. Rules and
Policies Concerning Attribution of Joint Sales Agreements in Local Television Markets
, MB Docket No. 04-265,
Order, 19 FCC Rcd 18166 (Med. Bur. 2004).
533 1999 Attribution Order, 14 FCC Rcd at 12560, ¶ 1.
534 See Retransmission Consent Proceeding.
535 See 5 U.S.C. § 603.
536 47 C.F.R. §§ 1.1200 et seq.
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during the presentation. If the presentation consisted in whole or in part of the presentation of data or
arguments already reflected in the presenter’s written comments, memoranda or other filings in the
proceeding, the presenter may provide citations to such data or arguments in his or her prior comments,
memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or
arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given
to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must
be filed consistent with rule 1.1206(b). In proceedings governed by rule 1.49(f) or for which the
Commission has made available a method of electronic filing, written ex parte presentations and
memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through
the electronic comment filing system available for that proceeding, and must be filed in their native
format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize
themselves with the Commission’s ex parte rules.

D.

Comment Filing Procedures

212. Comments and Replies. Pursuant to sections 1.415 and 1.419 of the Commission’s rules,
47 CFR §§ 1.415, 1.419, interested parties may file comments and reply comments on or before the dates
indicated on the first page of this document. Comments may be filed using the Commission’s Electronic
Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR
24121 (1998).
§
Electronic Filers: Comments may be filed electronically using the Internet by accessing the
ECFS: http://fjallfoss.fcc.gov/ecfs2/.
§
Paper Filers: Parties who choose to file by paper must file an original and one copy of each
filing. If more than one docket or rulemaking number appears in the caption of this proceeding,
filers must submit two additional copies for each additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-
class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s
Secretary, Office of the Secretary, Federal Communications Commission.
§
All hand-delivered or messenger-delivered paper filings for the Commission’s Secretary
must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325,
Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries
must be held together with rubber bands or fasteners. Any envelopes and boxes must be
disposed of before entering the building.
§
Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority
Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.
§
U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th
Street, SW, Washington DC 20554.
213. People with Disabilities: To request materials in accessible formats for people with
disabilities (braille, large print, electronic files, audio format), send an e-mail to fcc504@fcc.gov or call
the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).
214. Availability of Documents. Comments, reply comments, and ex parte submissions will be
available for public inspection during regular business hours in the FCC Reference Center, Federal
Communications Commission, 445 12th Street, S.W., CY-A257, Washington, D.C., 20554. These
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documents will also be available via ECFS. Documents will be available electronically in ASCII,
Microsoft Word, and/or Adobe Acrobat.
215. Availability of Additional Information Regarding Media Ownership Studies. The
Commission has made available additional information pertaining to the media ownership studies, which
are listed in Appendix A. A number of the authors of the media ownership studies created data sets using
proprietary information licensed to the author or the Commission. The data sets, as well as related
materials necessary to replicate the studies’ analyses, including market data provided to the authors of the
studies as “Government Furnished Information,” are available for review and inspection by interested
parties in the public reference room at the FCC’s headquarters (Room CY-A251, 445 12th Street, SW,
Washington, D.C.) consistent with procedures contained in the Protective Order.537 Prior to reviewing the
proprietary data sets, parties are required to sign and submit the Declaration, which was released as part
of the Protective Order. Parties also may be able to obtain licenses from licensors of the underlying
proprietary data to evaluate the results of the studies and/or to develop other studies that will contribute to
the record in this proceeding.
216. Information. For additional information on this proceeding, contact Hillary DeNigro or
Benjamin Arden of the Industry Analysis Division, Media Bureau, at (202) 418-2330.

VIII.

ORDERING CLAUSE

217. Accordingly, IT IS ORDERED, that pursuant to the authority contained in Sections 1, 2(a),
4(i), 303, 307, 309, and 310 of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 152(a),
154(i), 303, 307, 309, and 310, and Section 202(h) of the Telecommunications Act of 1996, this Notice of
Proposed Rulemaking IS ADOPTED.
218. IT IS FURTHER ORDERED that the Commission’s Consumer and Governmental Affairs
Bureau, Reference Information Center, SHALL SEND a copy of the Notice of Proposed Rulemaking,
including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
Business Administration.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary


537 2010 Quadrennial Review Protective Order, 26 FCC Rcd at 8474.
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APPENDIX A

Media Ownership Studies

Media Ownership Study 1, Local Media Ownership and Media Quality, by Adam D. Rennhoff
and Kenneth C. Wilbur
Media Ownership Study 2, Consumer Valuation of Media as a Function of Local Market
Structure, by Scott J. Savage and Donald M. Waldman
Media Ownership Study 3, How the Ownership Structure of Media Markets affects Civic
Engagement and Political Knowledge, 2006-2008, by Lynn Vavreck, Simon Jackman, and
Jeffrey B. Lewis
Media Ownership Study 4, Local Information Programming and the Structure of Television
Markets, by Jack Erb
Media Ownership Study 5, Station Ownership and the Provision and Consumption of Radio
News, by Joel Waldfogel
Media Ownership Study 6, Less of the Same: The Lack of Local News on the Internet,
by Matthew Hindman
Media Ownership Study 7, Radio Station Ownership Structure and the Provision of Programming
to Minority Audiences: Evidence from 2005- 2009, by Joel Waldfogel
Media Ownership Study 8A, Local Media Ownership and Viewpoint Diversity in Local
Television News, by Adam D. Rennhoff and Kenneth C. Wilbur
Media Ownership Study 8B, Diversity in Local Television News, by Lisa M. George and Felix
Oberholzer-Gee
Media Ownership Study 9, A Theoretical Analysis of the Impact of Local Market Structure on the
Range of Viewpoints Supplied, by Isabelle Brocas, Juan D. Carrillo, and Simon Wilkie
Media Ownership Study 10, Broadcast Ownership Rules and Innovation, by Andrew S. Wise
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APPENDIX B

Proposed Rules

The Federal Communications Commission proposes to amend Part 73 of Title 47 of the Code of Federal
Regulations (CFR) as set forth below:
PART 73—Radio Broadcast Services
1. The authority citation for Part 73 continues to read as follows:
AUTHORITY: 47 U.S.C. 154, 303, 334 and 336
2. Amend § 73.3555 by removing and reserving paragraph (c) and revising paragraphs (b) and (d) to read
as follows:
§ 73.3555 Multiple ownership.
* * * * *
(b) Local television multiple ownership rule. An entity may directly or indirectly own, operate, or control
two television stations licensed in the same Designated Market Area (DMA) (as determined by Nielsen
Media Research or any successor entity) if:
(1) At the time the application to acquire or construct the station(s) is filed, at least one of the stations is
not ranked among the top four stations in the DMA, based on the most recent all-day (9:00 a.m.-
midnight) audience share, as measured by Nielsen Media Research or by any comparable professional,
accepted audience ratings service; and
(2) At least 8 independently owned and operating, full-power commercial and noncommercial TV
stations would remain post-merger in the DMA in which the communities of license of the TV stations in
question are located. Count only those TV stations with a community of license in the same DMA as the
stations in the proposed combination. In areas where there is no Nielsen DMA, count the TV stations
present in an area that would be the functional equivalent of a TV market. Count only those TV stations
with a community of license in the same area that would be the functional equivalent of a TV market as
the stations in the proposed combination.
(c) [Reserved]
(d) Daily newspaper-broadcast cross-ownership rule. (1) No license for a full power AM, FM or TV
broadcast station shall be granted to any party (including all parties under common control) if such party
directly or indirectly owns, operates or controls a daily newspaper and the grant of such license will result
in: (i) the TV station’s community of license and the entire community in which the newspaper is
published being located within the same Nielsen DMA; (ii) the predicted or measured 2 mV/m contour of
an AM station, computed in accordance with Sec. 73.183 or Sec. 73.186, encompassing the entire
community in which such newspaper is published; or (iii) the predicted 1 mV/m contour for an FM
station, computed in accordance with Sec. 73.313, encompassing the entire community in which such
newspaper is published.
(2) There is a presumption that it is consistent with the public interest, convenience, and necessity for an
entity to own, operate or control in a top 20 Nielsen DMA a daily newspaper and (1) a full power radio
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station, or (2) a full-power TV broadcast station provided that, (i) the TV station is not ranked among the
top four TV stations in the DMA, based on the most recent all-day (9 a.m.-midnight) audience share, as
measured by Nielsen Media Research or by any comparable professional, accepted audience ratings
service; and (ii) at least 8 independently owned and operating major media voices would remain in the
DMA in which the community of license of the TV station in question is located (for purposes of this
provision major media voices include full-power TV broadcast stations and major newspapers).
(4) There is a presumption that it is inconsistent with the public interest, convenience, and necessity for an
entity to own, operate or control in a DMA other than the top 20 Nielsen DMAs a daily newspaper and a
full-power TV broadcast station in the same DMA as the newspaper’s community of publication, or a
commercial AM or FM broadcast station as defined in paragraph (d)(1) of this section.
* * * * *
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APPENDIX C

Initial Regulatory Flexibility Analysis

1.
As required by the Regulatory Flexibility Act (RFA),1 the Commission has prepared this
Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small
entities by the policies and rules proposed in this Notice of Proposed Rulemaking (NPRM). Written
public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and
must be filed by the deadlines for comments provided on the first page of this NPRM. The Commission
will send a copy of this NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small
Business Administration (SBA).2 In addition, the NPRM and IRFA (or summaries thereof) will be
published in the Federal Register.3

A.

Need for, and Objectives of, the Proposed Rules

2.
Pursuant to our statutory mandate under the Telecommunications Act of 1996,4 the NPRM
seeks comment on the Commission’s media ownership rules and proposed changes thereto. As discussed
in the NPRM, we are required by statute to review our media ownership rules every four years to
determine whether they “are necessary in the public interest as the result of competition.”5 The NPRM
discusses the local television ownership rule, the local radio ownership rule, the newspaper/broadcast
cross-ownership rule, the radio/television cross-ownership rule, and the dual network rule. Our challenge
in this proceeding is to take account of new technologies and changing marketplace conditions while
ensuring that our media ownership rules continue to serve our public interest goals of competition,
localism, and diversity. The NPRM also seeks comment on economic studies analyzing the relationship
between local media market structure and the policy goals that underlie the Commission’s media
ownership rules. In addition, the NPRM seeks comment in this proceeding on the aspects of the
Commission’s 2008 Diversity Order6 that the Third Circuit remanded in Prometheus II.7
3.
We find that the public interest is best served by modest, incremental changes to our rules.


1 See 5 U.S.C. § 603. The RFA, see 5 U.S.C. §§ 601 et seq., has been amended by the Contract with America
Advancement Act of 1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the Small
Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
2 See 5 U.S.C. § 603(a).
3 See id.
4 Telecommunications Act of 1996, Pub. L. No. 104-104, § 202(h), 110 Stat. 56, 111-12 (1996) (“1996 Act”);
Consolidated Appropriations Act, 2004, Pub. L. No. 108-199, § 629, 118 Stat. 3, 99-100 (2004) (“Appropriations
Act”) (amending Sections 202(c) and 202(h) of the 1996 Act). The media ownership rules subject to this
quadrennial review are the local television ownership rule, the local radio ownership rule, the newspaper/broadcast
cross-ownership rule, the radio/television cross-ownership rule, and the dual network rule.
5 Section 202(h) of the 1996 Act, 47 U.S.C. § 303 note. Section 202(h) of the 1996 Act further requires the
Commission to “repeal or modify any regulation it determines to be no longer in the public interest.” Id. In
Prometheus Radio Project v. FCC, 373 F.3d 372 (3d Cir. 2004) (“Prometheus I”), the Third Circuit concluded that
“necessary in the public interest” is a ‘“plain public interest’ standard under which ‘necessary’ means ‘convenient,’
‘useful,’ or ‘helpful,’ not ‘essential’ or ‘indispensable.’” Id. at 394. The court stated that “the first instruction [of §
202(h)] requires the Commission to take a fresh look at its regulations periodically in order to ensure that they
remain ‘necessary in the public interest.’” Id. at 391. In 2004, Congress revised the then-biennial review
requirement to require such reviews quadrennially. See Appropriations Act § 629, 118 Stat. at 100.
6 Promoting Diversification of Ownership in the Broadcasting Services, MB Docket No. 07-294, Report and Order
and Third Further Notice of Proposed Rulemaking, 23 FCC Rcd 5922 (2008) (“Diversity Order” and “Diversity
Third FNPRM
”).
7 Prometheus Radio Project v. FCC, 652 F.3d 431 (3d Cir. 2011) (“Prometheus II”).
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Recognizing current market realities, the NPRM seeks comment on the following proposals:
·
Local Television Ownership Rule. In the NPRM, we tentatively conclude that we should
retain the current local television ownership rule with minor modifications. Specifically, the
NPRM proposes to eliminate the Grade B contour overlap provision of the current rule. We
tentatively conclude that we should retain the prohibition against mergers among the top-
four-rated stations, the eight-voices test, and the existing numerical limits. In addition, the
NPRM seeks comment on whether to adopt a waiver standard applicable to small markets, as
well as appropriate criteria for any such standard. Also, the NPRM seeks comment on
whether multicasting should be a factor in determining the television ownership limits.
·
Local Radio Ownership Rule. The NPRM proposes to retain the current local radio
ownership rule. The NPRM also seeks comment on alternative modifications to the rule and
whether and how the rule should account for other audio platforms. The NPRM also
proposes to retain the AM/FM subcaps, and seeks comment on the impact of digital radio.
The NPRM seeks comment on whether to adopt a waiver standard and on specific criteria to
adopt.
·
Newspaper/Broadcast Cross-Ownership Rule. In the NPRM, we tentatively conclude that
some newspaper/broadcast cross-ownership restrictions continue to be necessary to protect
and promote viewpoint diversity. The NPRM proposes to use Nielsen DMA definitions to
determine the relevant market area for television stations, given the lack of a digital
equivalent to the analog Grade A service contour. The NPRM proposes to adopt a rule that
includes elements of the 2006 rule, including the top 20 DMA demarcation point, the top-four
television station restriction, and the eight remaining voices test.
·
Radio/Television Cross-Ownership Rule. The NPRM proposes to eliminate the
radio/television cross-ownership rule in favor of reliance on the local radio rule and local
television rule. We believe that the local radio and television ownership rules adequately
protect our localism and diversity goals and tentatively conclude that eliminating this rule is
not likely to lead to significant additional consolidation of broadcast facilities. The NPRM
seeks comment on this.
·
Dual Network Rule. In the NPRM, we tentatively conclude that the dual network rule
remains necessary in the public interest to promote competition and localism and should be
retained without modification.
·
Diversity Order Remand/Eligible Entity Definition. We seek comment in this NPRM on
issues that previously were being addressed in a separate rulemaking proceeding focused on
enhancing the diversity of ownership in the broadcast industry, including by increasing
ownership opportunities for minorities and women. As explained in the NPRM, the Third
Circuit in Prometheus II remanded the measures adopted in the Commission’s 2008 Diversity
Order
that relied on a revenue-based “eligible entity” standard8 and emphasized that the
actions required on remand from the Diversity Order should be completed “within the course
of the Commission’s 2010 Quadrennial Review of its media ownership rules.”9 Accordingly,
we seek comment in this proceeding on how the Commission should respond to the court’s
remand and on other actions we should consider to increase the level of broadcast station
ownership by minorities and women.


8 These measures include: (1) Revisions of Rules Regarding Construction Permit Deadlines; (2) Modification of
Attribution Rules; (3) Distress Sale Policy; (4) Duopoly Priority for Companies that Finance or Incubate and
Eligible Entity; (5) Extension of Divestiture Deadline in Certain Mergers; and (6) Transfer of Grandfathered Radio
Station Combinations to Non-Eligible Entities. Diversity Order, 23 FCC Rcd at 5931, 5936, 5939, 5943-45, ¶¶ 15.
31, 39, 56-61; see also Prometheus II.
9 Prometheus II, 652 F.3d at 472.
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B.

Legal Basis

4.
The proposed action is authorized under Sections 1, 2(a), 4(i), 303, 307, 309, and 310 of
the Communications Act of 1934, as amended, 47 U.S.C. §§ 151, 152(a), 154(i), 303, 307, 309, and 310,
and Section 202(h) of the Telecommunications Act of 1996.

C.

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

5.
The RFA directs agencies to provide a description of and, where feasible, an estimate of
the number of small entities that may be affected by the proposed rules, if adopted.10 The RFA generally
defines the term “small entity” as having the same meaning as the terms “small business,” “small
organization,” and “small governmental jurisdiction.”11 In addition, the term “small business” has the
same meaning as the term “small business concern” under the Small Business Act.12 A small business
concern is one which: (1) is independently owned and operated; (2) is not dominant in its field of
operation; and (3) satisfies any additional criteria established by the SBA.13
6.
Television Broadcasting. The SBA defines a television broadcasting station as a small
business if such station has no more than $14.0 million in annual receipts.14 Business concerns included
in this industry are those “primarily engaged in broadcasting images together with sound.”15 The
Commission has estimated the number of licensed commercial television stations to be 1,382.16
According to Commission staff review of the BIA Kelsey Inc. Media Access Pro Television Database
(BIA) as of October 3, 2011, 950 (or about 73 percent) of an estimated 1,301 commercial television
stations17 in the United States have revenues of $14 million or less and, thus, qualify as small entities
under the SBA definition. The Commission has estimated the number of licensed noncommercial


10 5 U.S.C. § 603(b)(3).
11 5 U.S.C. § 601(6).
12 5 U.S.C. § 601(3) (incorporating by reference the definition of “small business concern” in 15 U.S.C. § 632).
Pursuant to the RFA, the statutory definition of a small business applies “unless an agency, after consultation with the
Office of Advocacy of the Small Business Administration and after opportunity for public comment, establishes one or
more definitions of such term which are appropriate to the activities of the agency and publishes such definition(s) in
the Federal Register.” 5 U.S.C. § 601(3).
13 15 U.S.C. § 632.
14 See 13 C.F.R. § 121.201 (NAICS Code 515120).
15 U.S. Census Bureau, 2002 NAICS Definitions, http://www.census.gov/epcd/naics02/def/NDEF515.HTM (visited
Oct. 19, 2011). This category description continues, “These establishments operate television broadcasting studios
and facilities for the programming and transmission of programs to the public. These establishments also produce or
transmit visual programming to affiliated broadcast television stations, which in turn broadcast the programs to the
public on a predetermined schedule. Programming may originate in their own studios, from an affiliated network, or
from external sources.” Id. Separate census categories pertain to businesses primarily engaged in producing
programming (e.g., Motion Picture and Video Production, NAICS code 512110; Motion Picture and Video
Distribution, NAICS Code 512120; Teleproduction and Other Post-Production Services, NAICS Code 512191; and
Other Motion Picture and Video Industries, NAICS Code 512199). 13 C.F.R. § 121.201.
16 See Broadcast Station Totals as of March 31, 2011, Press Release (MB, rel. May 16, 2011) (“March 31, 2011
Broadcast Station Totals Press Release
”), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-
306575A1.pdf.
17 We recognize that this total differs slightly from that contained in the March 31, 2011 Broadcast Station Totals
Press Release
; however, we are using BIA’s estimate for purposes of this revenue comparison.
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educational (“NCE”) television stations to be 392.18 We note, however, that, in assessing whether a
business concern qualifies as small under the above definition, business (control) affiliations19 must be
included. Our estimate, therefore, likely overstates the number of small entities that might be affected by
our action, because the revenue figure on which it is based does not include or aggregate revenues from
affiliated companies. The Commission does not compile and otherwise does not have access to
information on the revenue of NCE stations that would permit it to determine how many such stations
would qualify as small entities.
7.
In addition, an element of the definition of “small business” is that the entity not be
dominant in its field of operation. We are unable at this time to define or quantify the criteria that would
establish whether a specific television station is dominant in its field of operation. Accordingly, the
estimate of small businesses to which rules may apply does not exclude any television station from the
definition of a small business on this basis and are therefore over-inclusive to that extent. Also, as noted,
an additional element of the definition of “small business” is that the entity must be independently owned
and operated. We note that it is difficult at times to assess these criteria in the context of media entities
and our estimates of small businesses to which they apply may be over-inclusive to this extent.
8.
Radio Broadcasting. The proposed policies could apply to radio broadcast licensees, and
potential licensees of radio service. The SBA defines a radio broadcast station as a small business if such
station has no more than $7 million in annual receipts.20 Business concerns included in this industry are
those primarily engaged in broadcasting aural programs by radio to the public.21 According to
Commission staff review of the BIA Publications, Inc. Master Access Radio Analyzer Database on as of
October 3, 2011, about 10,783 (97 percent) of 11,125 commercial radio stations have revenues of $7
million or less and thus qualify as small entities under the SBA definition. We note, however, that, in
assessing whether a business concern qualifies as small under the above definition, business (control)
affiliations22 must be included. Our estimate, therefore, likely overstates the number of small entities that
might be affected by our action, because the revenue figure on which it is based does not include or
aggregate revenues from affiliated companies.
9.
In addition, an element of the definition of “small business” is that the entity not be
dominant in its field of operation. We are unable at this time to define or quantify the criteria that would
establish whether a specific radio station is dominant in its field of operation. Accordingly, the estimate
of small businesses to which rules may apply does not exclude any radio station from the definition of a
small business on this basis and therefore may be over-inclusive to that extent. Also, as noted, an
additional element of the definition of “small business” is that the entity must be independently owned
and operated. We note that it is difficult at times to assess these criteria in the context of media entities
and our estimates of small businesses to which they apply may be over-inclusive to this extent.
10.
Daily Newspapers. The SBA has developed a small business size standard for the census
category of Newspaper Publishers; that size standard is 500 or fewer employees.23 Census Bureau data


18 See March 31, 2011 Broadcast Station Totals Press Release.
19 “[Business concerns] are affiliates of each other when one concern controls or has the power to control the other
or a third party or parties controls or has to power to control both.” 13 C.F.R. § 121.103(a)(1).
20 See id. at § 121.201 (NAICS Code 515112).
21 U.S. Census Bureau, 2002 NAICS Definitions, http://www.census.gov/epcd/naics02/def/NDEF515.HTM (visited
Oct. 19, 2011).
22 “[Business concerns] are affiliates of each other when one concern controls or has the power to control the other
or a third party or parties controls or has to power to control both.” 13 C.F.R. § 121.103(a)(1).
23 Id. at § 121.201 (NAICS code 511110).
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for 2007 show that there were 4,852 firms in this category that operated for the entire year.24 Of this total,
4,771 firms had employment of 499 or fewer employees, and an additional 33 firms had employment of
500 to 999 employees. Therefore, we estimate that the majority of Newspaper Publishers are small
entities that might be affected by our action.

D.

Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements

11.
The NPRM proposes a number of rule changes that will affect reporting, recordkeeping
and other compliance requirements. Each of these changes is described below.
12.
The NPRM proposes modifications to several of the media ownership rules as set forth in
Paragraph 3 above. The proposals, if ultimately adopted, would modify several FCC forms and their
instructions: (1) FCC Form 301, Application for Construction Permit For Commercial Broadcast Station;
(2) FCC Form 314, Application for Consent to Assignment of Broadcast Station Construction Permit or
License; and (3) FCC Form 315, Application for Consent to Transfer Control of Corporation Holding
Broadcast Station Construction Permit or License. The Commission may have to modify other forms that
include in their instructions the media ownership rules or citations to media ownership proceedings,
including Form 303-s and Form 323. The impact of these changes will be the same on all entities, and we
do not anticipate that compliance will require the expenditure of any additional resources.

E.

Steps Taken to Minimize Significant Economic Impact on Small Entities, and
Significant Alternatives Considered

13.
The RFA requires an agency to describe any significant alternatives that it has considered
in reaching its proposed approach, which may include the following four alternatives (among others): (1)
the establishment of differing compliance or reporting requirements or timetables that take into account
the resources available to small entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather
than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small
entities.25
14.
The specific proposals on which the NPRM seeks comment, set forth in Paragraph 3
above, are intended to achieve our public interest goals of competition, localism, and diversity. The
NPRM seeks comment on a number of measures designed to minimize the economic impact of our
proposed rules on firms generally, as well as those intended to promote broadcast ownership opportunities
among a diverse group of owners, including small entities. For example, as part of the local radio
ownership rule, the NPRM proposes to retain the AM/FM subcaps, which limit the number of radio
stations in the same service that an entity can own. As noted in the NPRM, the Commission has
previously concluded that AM/FM subcaps serve the public interest by promoting new entry into radio
ownership, particularly by small businesses, including minority- and women-owned businesses.26
15.
The NPRM also seeks comment in this proceeding on the aspects of the Commission’s
2008 Diversity Order that the Third Circuit remanded in Prometheus II.27 Among other measures, the
NPRM seeks comment on those intended to promote broadcast ownership opportunities for small
businesses. For instance, the NPRM seeks comment regarding whether to reinstate the preexisting
revenue-based eligible entity definition, which the Commission has concluded would “be effective in
creating new opportunities for broadcast ownership by a variety of small businesses and new entrants,


24 U.S. Census Bureau, 2007 Economic Census, Sector 51: Information, Subject Series: Establishment and Firm
Size, Employment Size of Firms for the US: 2007
(rel. Nov. 19, 2010), http://factfinder.census.gov/servlet/IBQTable
?_bm=y&-geo_id=&-ds_name=EC0751SSSZ5&-_lang=en (NAICS code 511110) (visited Oct. 19, 2011).
25 See 5 U.S.C. § 603(c).
26 NPRM at ¶ 75.
27 See id. at Section IV.
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including minorities and women.”28 The NPRM also seeks comment on whether increasing station
ownership by small businesses should be an independent policy goal in this proceeding and, if so,
whether readopting the preexisting eligible entity definition would be a reasonable and effective means of
promoting this objective.29

F.

Federal Rules that May Duplicate, Overlap, or Conflict With the Proposed Rule

16.
None.


28 Diversity Order, 23 FCC Rcd at 5927, ¶ 9. As defined in the Diversity Order, an “eligible entity” is any entity
that qualifies as a small business under revenue-based standards that have been established by the Small Business
Administration (“SBA”). Id. at 5925, ¶ 6.
29 NPRM at ¶ 161.
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STATEMENT OF

COMMISSIONER MICHAEL J. COPPS

APPROVING IN PART, DISSENTING IN PART

Re: 2010 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, MB Docket
No. 09-182, Promoting Diversification of Ownership In the Broadcasting Services, MB Docket No. 07-
294, Notice of Proposed Rulemaking

As I cast perhaps my last major vote as a Member of the Federal Communications Commission, it
will come as a surprise to very few that I cannot approve of the Quadrennial Review in all of its aspects.
While I find a better level of analysis here than in previous Quadrennial Reviews, the item nevertheless
provokes my dissent because it heads down a similar road that the two previous Commissions travelled
regarding newspaper-broadcast cross-ownership. In the vast majority of cases, I do not believe that
newspaper-broadcast cross-ownership advances the public interest. It means fewer voices in the
community, less localism in the industry, and steep transactional costs that all too often lead to down-
sized or shuttered newsrooms and fired journalists. Our media, and our public policy, need to head in a
different direction. A media that more effectively nourishes genuine civic dialogue is necessary to
successful self-government.
I only wish we were in a different position than the one we find ourselves in at this moment. In
the ten-plus years that I have been at the Commission, we have witnessed dramatic media industry
consolidation, to say nothing of the extensive concentration that occurred during the preceding twenty
years. It is time to put an end to the years of public policy shortfall that have encouraged this trend. My
ideal NPRM would flash an orange caution light that change was in the works, setting the stage for a
Report and Order that would turn on a red light to many consolidation transactions, while still allowing
for exceptions in the few cases that would warrant them.
The media landscape is, as we all know, changing. In the last few years we have seen incredible
growth in the broadband realm, ripe with exciting options and opportunities. What we have not witnessed
is the breadth and depth online to replace what has been lost in “traditional” media. This becomes
critically important when you look at the hundreds of millions of dollars that no longer flow into news
operations, only a fraction of which has been replaced by Web newsgathering. Simply put, what we
currently have is an illusion of plenty. The barriers to self-publish have never been lower, but the majority
of eyeballs and clicks are still focused on too few small players. It is irresponsible to remove all
protections, both in terms of ownership and public interest obligations, in traditional media on the shaky
expectation that the new media of broadband will somehow make everything right and furnish our
citizens with the news and information they need to make informed decisions for the future of our
country. If the past is prologue here, there is no guarantee we will achieve parity in the new media
platform. Indeed, we must be extremely careful to not repeat the same mistakes in new media that we
permitted in traditional media by permitting so few to control so much. Developing a truly democratized
media online is vital to realizing the transformative power of the Internet.
The world of media has fundamentally changed, but America’s ongoing historical challenge to
provide its citizens with information infrastructure has not changed, nor has the responsibility of the FCC
to create rules to enhance the statutory mandates of localism, competition, and diversity.
This is not just my philosophy. It reflects the beliefs of millions of Americans who have
contacted us over the past ten years about the shortfalls of media policy. It also reflects the views of tens
of thousands of citizens I have personally met with around the nation. One of my principal activities as a
Commissioner has been to encourage a national dialogue on media policy. With a number of my
colleagues over the past decade, I have gone on the road to foster such discussions from Florida to
Vermont, from Portland, Oregon to Portland, Maine—and dozens of points between. What I hear
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everywhere I go is great frustration with the current media environment—frustration as too much glitzy
infotainment replaces real local news and community information; frustration with all the canned,
homogenized music that has pushed aside local and regional artists and genres; frustration with too much
shouted opinion and too little factual, investigative journalism. Just a few weeks ago, Commissioner
Clyburn and I were in Atlanta talking about these issues. I sensed an almost palpable feeling of anguish
as we listened to plea after urgent plea for more community media, more voices, and more diversity on
our airwaves.

These rules matter.

People know that something is not right and they are looking to the FCC to
make a difference. Many in Congress have let us know their concerns about an overly consolidated
media. Not to mention the fact that the Court has continued to frown upon our inaction on a host of
initiatives we should have taken by now, especially when it comes to fulfilling our obligation to provide a
more diverse media.
I am of the strong opinion that we should be farther along in correcting the inequities of minority
and women ownership of broadcast outlets. While I am pleased to see the proposal for an incubator
program teed up for comment in the NPRM before us, I would have preferred us to have already taken
action on such proposals as “Overcoming Disadvantages” and any number of other proposals submitted
over the past several years to the Commission by our Diversity Advisory Committee. These are the kinds
of actions that I believe the Third Circuit has been expecting of us for years and it is why the Court keeps
sending back FCC rules that fail to deliver. In a country now nearly one-third minority, it is shocking,
and I think embarrassing, that people of color own barely more than 3% of full-power commercial
television stations. We must make a prompt and major commitment to ownership diversity. This
certainly includes a Commission commitment to fund the necessary studies to build a record essential to
satisfying judicial scrutiny so that we can go from the kind of interim steps I have just discussed to the
even more aggressive policies that will be needed to bring diversity and justice to our media.
With the perils of consolidation on clear display in market after market, it would seem to me that
we should be closing loopholes instead of providing openings for them. I was deeply distressed to
discover, in the item’s discussion of newspaper-broadcast cross-ownership, that Chairman Martin’s
proposed rule is being considered once again, even after Congress and the Court have on numerous
occasions expressed their displeasure. Worse, the conditions that the then-majority attached to the 2008
newspaper-broadcast rule were so ridden with loopholes that an 18-wheeler could be driven through
them—yet here they are, teed up for our consideration yet again! I was strongly opposed to the four
factors that Chairman Martin proposed in the 2007-2008 proceeding, and I am opposed to considering
them again in this proceeding.
It is a very positive development that we are taking a closer look at ownership attribution,
especially the Shared Services Agreements and whether or not such agreements constitute an end-run
around our rules. We have seen a proliferation of these types of agreements in recent years, in many cases
to the detriment of independent content. Too often we see exactly the same programming being shown on
two or more channels, including the simulcast of identical newscasts. There should be exceptions for
expenses such as sharing a helicopter, but all too often the deals are, in reality, a transfer of power without
having to come before the Commission. Commenters have also flagged the issue of how these types of
agreements encroach on competition in terms of retransmission consent agreements. It is critical that the
FCC look at these arrangements from all sides and make critical decisions on how our rules should be
modified to incorporate these Shared Services Agreements. I am pleased we are heading in that direction.
As my time winds down at the Commission, I am more convinced than ever that strong action is
needed on these fronts. The record will now be open as the Quadrennial Review proceeding moves in the
months ahead to Report and Order. I hope that all stakeholders will take part in responding to this Notice
of Proposed Rulemaking. We should all remember the admonition of my mentor, Senator Fritz Hollings,
that “Decisions without you are decisions against you.” This is the time for citizens far-and-wide to tell
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us what they really think and to offer their comments and proposals for an enhanced media. We have seen
citizen input accomplish great things before; now we need to see it again. To my mind, no issue before
this Commission—no issue—rivals in importance the future of our media. No other great issue will be
successfully resolved without its being presented in all its dimensions to the American people. Our
Founding Fathers understood this and took steps to make it happen. Now it is our generation’s turn.
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STATEMENT OF

COMMISSIONER ROBERT M. McDOWELL

APPROVING IN PART, CONCURRING IN PART

Re: 2010 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, MB Docket
No. 09-182, Promoting Diversification of Ownership In the Broadcasting Services, MB Docket No. 07-
294, Notice of Proposed Rulemaking

The media marketplace has experienced a dramatic transformation over the past decade. More
relevant to this proceeding, however, significant market developments have taken place since the previous
review of our media ownership rules commenced in 2006. American consumers no longer live in a world
limited to broadcast stations and newspapers. They also receive programming via cable, satellite and the
Internet, not to mention mobile platforms. Today’s notice recognizes that the current media landscape
has more delivery platforms than just broadcasting and newspapers; however, this vibrant competition is
not reflected in the tentative conclusions. Instead, the Commission appears to be prepared to accept a
regulatory status quo by entrenching itself into an overly-cautious, wait-and-see approach regarding the
further development of new media platforms even though they have already revolutionized the market.
Perhaps the Commission’s proposed regulatory sclerosis can be explained by the history of
appellate litigation that has affected our media ownership proceedings. Even though several stakeholders
recently petitioned the Supreme Court to review the 2006 rules, no legal hurdles preventing us from
modernizing our rules to reflect the economic and technological realities of the current marketplace stand
in our way. The Commission has been aware since at least 2002 that the Internet was having a profound
effect on the media landscape. Maintaining decades-old industrial policy in this age of competition,
mobility and new media is not in the public interest, and it certainly is not what Congress intended when
it directed the Commission to repeal or modify unnecessary regulation.
While I applaud the proposal to eliminate the radio-television cross-ownership rule, I am
disappointed that we tentatively conclude to retain most of the existing media ownership rules, including
the dual network, local television and local radio ownership rules. Moreover, while the Commission does
propose an anemic relaxation of the newspaper-broadcast cross-ownership rule for the largest markets and
seeks comment on eliminating restrictions on newspaper/radio combinations, the proposals do not go
nearly far enough. We should seek comment on a much more dramatic modernization, if not complete
elimination, of the 36-year-old newspaper-broadcast cross-ownership rule. Broadcast stations and daily
newspapers are grappling with falling audience and circulation numbers, diminishing advertising
revenues, and staff reductions as online sources gain in popularity. The notion that broadcasters may
distribute their content through radio, television, the Internet, mobile devices and other unforeseen
portals, but must be prohibited by law from printing the same content on the medium of newsprint, seems
anachronistic at best. Arcane and burdensome rules should not be allowed to continue impeding, or
potentially impeding, the ability of broadcasters and newspapers to survive and thrive in the digital era.
In fact, contrary to eliminating outdated regulations, the Commission is suggesting rule changes
that would be more burdensome than existing regulations. For instance, the proposal to apply ownership
combination restrictions to daily newspapers and television stations within the same Nielsen Designated
Market Area may prohibit ownership combinations that are currently permitted. Further, I am troubled by
yet another round of inquiries – this time within the framework of our attribution rules – into shared
service agreements and other local newsgathering cooperative efforts. These arrangements are used to
reduce the costs of news production and any action taken to hinder such relationships may have
unintended consequences, such as reducing the quality and quantity of local news and exacerbating the
failure of more newspapers. We must be wary of taking actions in the name of promoting journalism,
especially if they could have the opposite effect. As I have often said, journalism does not need the
government’s “help.” That very notion raises serious constitutional concerns.
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In this notice, we also seek comment on the myriad proposals to enhance media diversity that
have been introduced over the past few years. Our query is not only understandable but necessary as well
in light of the Prometheus II decision, whereby the Third Circuit struck down many of the diversity
provisions adopted in the 2007 Diversity Order. While some are neutral, several of these proposals are
race and/or gender based. For those proposals aimed at expanding media opportunities for minorities and
women, we have to be mindful that any action the Commission would take in this area must also be
legally sustainable and satisfy the rigorous demands of the Equal Protection Clause, as interpreted under
the Supreme Court’s Adarand line of cases. As I have said several times before, the diversity studies
should be completed as soon as possible to assist us in supporting any new race- and/or gender-based
regulations and determining the best approaches to increase media diversity, in accordance with the
Constitution.
For these reasons, I vote in support of seeking comment on the diversity proposals and
eliminating the radio-television cross-ownership rule. I must concur, however, on the rest of the notice,
because I cannot agree with the tentative conclusions to retain the remainder of the media ownership rules
and have serious concerns regarding the possible attribution of agreements broadly relating to the
programming and/or operation of broadcast stations. I have not seen any data, nor is there any evidence
cited in the notice, that would support such regulation. Nevertheless, I will keep an open mind and look
forward to reviewing the submissions that are filed. I hope that stakeholders will provide comprehensive
data and information regarding the competitive nature of the media sector and the effects that the
proposed rules will have on industry and American consumers. I also remain hopeful that the
Commission will pursue the deregulatory approach mandated by Congress. In that regard, I commend the
Chairman for accepting edits to elicit information about the benefits of shared service agreements and
newspaper-broadcast cross-ownership and the possible harms that could result if the proposed rules are
adopted. Finally, I thank the staff of the Media Bureau for their hard work on this notice and the work
that still remains before them.
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STATEMENT OF

COMMISSIONER MIGNON L. CLYBURN

Re: 2010 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, MB Docket
No. 09-182, Promoting Diversification of Ownership In the Broadcasting Services, MB Docket No. 07-
294, Notice of Proposed Rulemaking

In considering this item, I experienced a myriad of emotions: Hope, fear, frustration, expectation,
and exasperation.
Media ownership affects every single person in this country, whether they realize it or not.
Everyone digests news, some casually others voraciously. Therefore, preserving journalistic integrity and
promoting a diversity of viewpoints are paramount concerns, and should remain top priorities for this
agency.
Among other things, this NPRM acknowledges that the Commission needs more data. It admits
that the factual information that the Commission currently has is incomplete if developing policies to
promote greater female and minority ownership is still a priority. I commend the Chairman for insisting
that ours is a data-driven agency, and am encouraged by the commitment to support the research
necessary to achieve, in an expeditious fashion, a comprehensive picture of the current state of female and
minority ownership.
Women, minorities and those who reside in rural areas come into my office painting a bleak
picture. They feel disconnected from the public airwaves, and their outlets rarely speak to the needs of
their communities. They echo the argument that more relaxed media ownership rules would negatively
impact diversity of ownership, but without the proper data, our agency cannot concur or refute that
troubling conclusion. Does consolidation harm chances for others to fairly compete? Is female and
minority ownership in the broadcast sector particularly lagging as compared to other industries? Is every
segment of this country getting the information its residents need? I have been told by those wishing to
serve long-neglected communities that female and minority owners have a great record when it comes to
diverse hiring, promotion and community service. But stories and anecdotes, no matter how persuasive or
discouraging, are not enough. This Commission has a duty to get a firm and informed handle on what is
actually happening in our big cities and in our small towns. We need to know how our policies are
actually affecting ALL Americans.
The FCC needs to know who owns the media. We have an obligation to more fully understand
what impact that ownership has on journalism and the critical information needs of all our communities.
The answers to these questions are crucial, and we owe it to the public to implement policies that are
informed and forward-looking.
This Commission’s responsibility to the public interest is one I take very seriously, and this falls
squarely into that mission. Our research on the media landscape cannot be done quickly enough, and with
the funds approved for Fiscal Year 2012, one less barrier stands in the way of us meeting that basic
mission.
I will continue to work with Chairman Genachowski, my colleagues at the Commission, and
other interested parties as we collect, evaluate and incorporate timely and much sought after data, which
will serve as the foundation for a sound policy framework.
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