**Before the**

Federal Communications Commission

Washington, D.C. 20554

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | MB Docket No. 06-121         |
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| 2006 Quadrennial Regulatory      | ) | MB Docket No. 02-277         |
| Review -- Review of the          | * |                              |
| Commission's Broadcast Ownership | * | MM Docket No. 01-235         |
| Rules and Other Rules Adopted    |   |                              |
| Pursuant to Section 202 of the   | * | MM Docket No. 01-317         |
| Telecommunications Act of 1996   | * |                              |
|                                  | ) | MM Docket No. 00-244         |
| 2002 Biennial Regulatory Review  | * |                              |
| -- Review of the Commission's    | * | MB Docket No. 04-228         |
| Broadcast Ownership Rules and    |   |                              |
| Other Rules Adopted Pursuant to  | * | MM Docket No. 99-360         |
| Section 202 of the               | * |                              |
| Telecommunications Act of 1996   | ) |                              |
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| Cross-Ownership of Broadcast     | * |                              |
| Stations and Newspapers          |   |                              |
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| Multiple Ownership of Radio      | ) |                              |
| Broadcast Stations in Local      | * |                              |
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+----------------------------------+---+------------------------------+

report and order and

order on reconsideration

**Adopted: December 18, 2007 Released: February 4, 2008**

By the Commission: Chairman Martin issuing a statement; Commissioners
Copps and Adelstein dissenting and issuing separate statements;
Commissioners Tate and McDowell issuing separate statements.

Table of Contents

Heading Paragraph \#

I. introduction 1

II\. background 2

III\. newspaper/broadcast cross-ownership 13

A. Background 14

B. Discussion 18

1\. Presumption Favoring Certain Combinations in Top 20 Markets 53

2\. Presumption Against All Other Combinations 63

IV\. Radio/Television Cross-Ownership Rule 80

A. Background 81

B. Discussion 82

V. Local Television Ownership Rule 87

A. Background 88

B. Discussion 96

VI\. LOCAL RADIO OWNERSHIP RULE 110

A. Background 111

B. Discussion 113

C. Petitions for Reconsideration 136

VII\. Dual Network rule 139

VIII\. UHF DISCOUNT 142

IX\. Public Interest Obligations of Television Broadcast Licensees 145

X. Data Quality Act 146

XI\. Administrative matters 151

XII\. ordering clauses 155

Appendix A: Rule Changes

APPENDIX B: Final Regulatory Flexibility Analysis

# introduction

1.  In this Report and Order and Order on Reconsideration ("Order"), we
    conclude our 2006 Quadrennial Review of the broadcast ownership
    rules. Our review encompasses the newspaper/broadcast
    cross-ownership rule, the radio/television cross-ownership rule, the
    local television ownership rule, the local radio ownership rule, and
    the dual network rule.[^1] We review these rules under Section
    202(h) of the Telecommunications Act of 1996 ("1996 Act"),[^2] which
    requires the Commission to review its ownership rules (except the
    national television ownership limit) every four years and "determine
    whether any of such rules are necessary in the public interest as
    the result of competition."[^3] Under Section 202(h), the Commission
    "shall repeal or modify any regulation it determines to be no longer
    in the public interest." [^4] We modify the newspaper/broadcast
    cross-ownership rule, and we generally retain the other broadcast
    ownership rules currently in effect.[^5] We also address petitions
    for reconsideration of the Commission's Report and Order in its 2002
    biennial review of its broadcast ownership rules (the "*2002
    Biennial Review Order*") and the remand of that Order by the U.S.
    Court of Appeals for the Third Circuit in *Prometheus Radio Project,
    et al. v. FCC* ("*Prometheus*").[^6]

# background

2.  *History of the Proceeding.* We initiated this 2006 Quadrennial
    Review proceeding with the *Further Notice of Proposed Rule Making*
    ("*Further Notice*").[^7] In addition to inviting comment on whether
    the ownership rules remain "necessary in the public interest as the
    result of competition," under the Section 202(h) standard, the
    *Further Notice* invited comment on how to address the issues raised
    by the U.S. Court of Appeals for the Third Circuit in its
    *Prometheus* decision[^8] and those raised by the U.S. Court of
    Appeals for the District of Columbia Circuit in *Sinclair Broadcast
    Group, Inc. v. FCC*.[^9] This Order addresses all of those issues.

3.  The *Prometheus* decision reviewed the *2002 Biennial Review
    Order*,[^10] which addressed all of the Commission's broadcast
    ownership rules. The Commission concluded that neither the
    newspaper/broadcast cross-ownership rule nor the radio/television
    cross-ownership rule remained necessary in the public interest.
    Accordingly, it replaced those rules with new cross-ownership
    regulations called the cross-media limits. The Commission also
    revised its market definition and the way it counts stations for
    purposes of the local radio ownership rule, revised the local
    television ownership rule, modified the national television
    ownership cap, and retained the dual network rule. Several parties
    sought appellate review of various aspects of the *2002 Biennial
    Review Order*; others filed petitions for reconsideration.

4.  The Third Circuit stayed the effectiveness of the new rules pending
    review.[^11] In its subsequent decision on the merits, the court
    affirmed some of the Commission's decisions in the *2002 Biennial
    Review Order* and remanded others for further justification or
    modification.[^12] On September 3, 2004, in response to the
    Commission's petition for rehearing, the court allowed certain
    revisions to its local radio ownership rules -- "specifically, using
    Arbitron Metro markets to define local markets, including
    noncommercial stations in determining the size of a market,
    attributing stations whose advertising is brokered under a Joint
    Sales Agreement to a brokering station's permissible ownership
    totals, and imposing a transfer restriction (collectively, the
    'Approved Changes')" - to go into effect, but continued its stay of
    the other revisions.[^13] Accordingly, except for the Approved
    Changes, the ownership rules that were in effect prior to the *2002
    Biennial Review Order*, including the previously existing
    newspaper/broadcast cross-ownership prohibition, radio/television
    cross-ownership rule, and local television ownership rule, remain in
    effect.

5.  In response to our *Further Notice* and *Second Further Notice* in
    this proceeding, we received many comments from a broad range of
    commenters, including broadcasters, newspapers, public interest
    groups, unions, and individual citizens. While many commenters
    believe that relaxation of the media ownership rules is necessary to
    promote our goals and that the current rules must be revised or
    eliminated under the statutory standard, many other commenters
    expressed significant concerns about the general level and potential
    consequences of media consolidation, including concerns that such
    consolidation results in a loss of viewpoint diversity and
    negatively affects competition. In addition, the Commission
    conducted or commissioned ten studies and received numerous other
    studies in the record of the proceeding.[^14] The Commission also
    conducted six media ownership hearings around the country and heard
    widely divergent testimony from a number of commenters and speakers
    at open microphones as to whether the media ownership rules should
    be relaxed, retained, or even tightened.[^15] We have carefully
    reviewed these comments, as well as the studies and the
    testimony.[^16] Our approach herein is a cautious approach. By
    modestly loosening the 32-year prohibition on newspaper/broadcast
    cross-ownership, our approach balances the concerns of many
    commenters that we not permit excessive consolidation with concerns
    of other commenters that we afford some relief to assure continued
    diversity and investment in local news programming. We believe that
    the decisions we adopt today serve our public interest goals,
    appropriately take account of the current media marketplace, and
    comply with our statutory responsibilities.[^17]

6.  *Media Marketplace*. As discussed in succeeding sections in more
    detail, today's media marketplace remains a dynamic arena, albeit
    one in which the traditional "mainstream media" still maintain
    leading roles in many respects and are learning to adapt to the new
    digital and online environment. In 2002, the Commission noted the
    substantial evolution of traditional media (*i.e.*, daily newspapers
    and full-power television and radio stations) and the emergence of
    new modes of media (*e.g.*, portable devices, the Internet).[^18]
    Whereas the years immediately preceding 2002 were largely
    characterized by dramatic technological advancements, the current
    record reflects that many noteworthy developments appear more in the
    nature of technological and marketplace refinements than the advent
    of wholly new media. The online medium in particular is
    well-recognized as another platform for the delivery of audio, video
    and written content.[^19] Today, media companies both old and new
    are working to identify the best use of technology in order to
    maintain their competitive positions.[^20]

7.  Five years ago, the Commission recognized that digital technologies
    were beginning to translate into more options for consumers.[^21]
    Since that time, it has become clear that additional consumer
    choices also bring audience fragmentation.[^22] That development, in
    turn, has consequences for the business models that support the
    operation of traditional media companies -- including, but not
    limited to, those entities' gathering and disseminating of news and
    information to their local communities. The record shows that the
    number of traditional media outlets has remained largely static
    since the Commission last considered its media ownership rules,[^23]
    even as online-only outlets have grown.[^24] As a result,
    traditional media entities have been trying to find ways to maintain
    revenue growth while implementing new models of distribution.[^25]
    With attention turned to the online and digital environment,
    consolidation among owners of broadcast stations appears to have
    slowed,[^26] while the stability of once-storied newspaper
    publishing companies has become open to question.[^27]

8.  Yet while the marketplace is fragmenting and the revenue needed to
    maintain traditional media operations appears to be declining,[^28]
    the data also show that mainstream media continue to hold a major
    position in the marketplace, particularly in the markets for the
    provision of news and information. Commission-sponsored studies and
    those of third parties indicate that consumers still rely most
    heavily on broadcast television stations and daily newspapers for
    local news and other non-entertainment fare.[^29] Consumers rely on
    broadcast radio stations to a lesser extent.[^30] Moreover, studies
    focused on the specifics of Internet usage to obtain news show that
    sites operated by newspapers and broadcast television stations
    capture a significant percentage of consumer attention.[^31] This
    appears to be due in part to the power of "branding" in a
    competitive marketplace; existing newspapers and broadcasters enjoy
    the benefits of years of consumer familiarity and trust.[^32] This
    also may be due to the fact that traditional media still largely
    provide the original newsgathering and reporting on which consumers
    -- and many of the new media outlets such as aggregator sites and
    bloggers -- rely.[^33] Although the future landscape of the online
    media world is difficult to predict, for the foreseeable period
    ahead it appears that traditional media outlets will remain
    important sources of news and information, especially at the local
    level.

9.  *Policy Goals.* The media ownership rules are designed to foster the
    Commission's longstanding policies of competition, diversity, and
    localism. We set these policies out in detail in the *2002 Biennial
    Review Order*,[^34] and we reaffirm those goals. We address localism
    more fully in a separate report intended to enhance broadcasters'
    commitment to serving their local markets.[^35] In addition, in the
    *Diversity Order*, we adopt a number of measures to enhance
    diversity by promoting entry of small businesses, including those
    owned by women and minorities,[^36] and invite comment on other
    proposals to promote those goals.

10. *Section 202(h) Analysis.* Section 202(h) of the Telecommunications
    Act of 1996 requires the Commission to review quadrennially[^37] its
    broadcast ownership rules to "determine whether any of such rules
    are necessary in the public interest as a result of
    competition."[^38] The statute further requires the Commission to
    "repeal or modify any regulation it determines to be no longer in
    the public interest."[^39] In *Prometheus*, 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.'"[^40] It further concluded that the second sentence
    of Section 202(h) requires the Commission to repeal or modify any
    regulations that it has determined do not satisfy the standard set
    forth in the first sentence.[^41]

11. Moreover, the court explicitly rejected the argument that Section
    202(h) is a "one-way ratchet" that the Commission may use only to
    eliminate existing regulations, reasoning that this construction
    ignores the word "modify" and the requirement that the Commission
    act "in the public interest."[^42] Thus, the court rejected
    contentions that Section 202(h) imposes "rigid limits on the
    Commission's ability to regulate in the public interest"[^43] and
    instead held that the statute requires only that the Commission
    "'monitor the effect of \... competition \... and make appropriate
    adjustments' to its regulations."[^44] In sum, Section 202(h)
    requires us to periodically examine these rules, and repeal or
    modify them if they do not remain useful in the public
    interest.[^45] In this Order, we examine each of these rules in
    turn.

12. *Severability.* Although all of the ownership rules that we review
    in this Order are designed to further diversity, competition and/or
    localism, each serves a particular function in the media marketplace
    independently of the others. Therefore, it is our intent that each
    of those rules shall be severable. If any of the rules is
    declared invalid or unenforceable for any reason, it is our intent
    that the remaining rules shall remain in full force and effect.[^46]

# newspaper/broadcast cross-ownership

13. In this section we address the newspaper/broadcast cross-ownership
    rule to determine whether it is necessary in the public interest.
    The 1975 cross-ownership ban is the only Commission media ownership
    rule that has remained in effect without modification for over three
    decades. Today, we make a modest change in the rule that has the
    primary effect of presuming that certain limited combinations of
    newspaper and broadcast facilities in the largest markets are in the
    public interest.[^47] In this order, we take a modest step in
    loosening the complete ban on cross-ownership. We adopt a
    presumption, in the top 20 Designated Market Areas ("DMAs"), that it
    is not inconsistent with the public interest for one entity to own a
    daily newspaper and a radio station or, under the following limited
    circumstances, a daily newspaper and a television station, if (1)
    the television station is not ranked among the top four stations in
    the DMA and (2) at least eight independent "major media voices"
    remain in the DMA. In all other instances, we adopt a presumption
    that a newspaper/broadcast station combination would not be in the
    public interest, with two limited exceptions, and therefore
    emphasize that the Commission is unlikely to approve such
    transactions. Taking into account these respective presumptions, in
    determining whether the grant of a transaction that would result in
    newspaper/broadcast cross-ownership is in the public interest, the
    Commission will consider the following factors: (1) whether the
    cross-ownership will increase the amount of local news disseminated
    through the affected media outlets in the combination; (2) whether
    each affected media outlet in the combination will exercise its own
    independent news judgment; (3) the level of concentration in the
    Nielsen DMA; and (4) the financial condition of the newspaper or
    broadcast outlet, and if the newspaper or broadcast station is in
    financial distress, the proposed owner's commitment to invest
    significantly in newsroom operations. Our cautious approach
    addresses the need to support the availability and sustainability of
    local news while not significantly increasing local concentration or
    harming diversity.

## Background 

14. Adopted in 1975, the newspaper/broadcast cross-ownership rule
    prohibits common ownership of a full-power broadcast station and a
    daily newspaper when the broadcast station's service contour
    encompasses the newspaper's city of publication.[^48] In the *1998
    Biennial Review Order*, the Commission concluded that the
    newspaper/broadcast cross-ownership rule continued to serve the
    public interest because it furthered diversity, and therefore should
    be retained. [^49] The Commission noted, however, that the rule
    might not be necessary to achieve its intended public interest
    benefits under all circumstances.[^50]

15. In the *2002 Biennial Review Order*, the Commission eliminated the
    newspaper/broadcast cross-ownership ban, which did not account for
    either market size or the number of available outlets in a market,
    finding that it failed to promote competition, localism, or
    diversity.[^51] The Commission held that, because newspapers and
    broadcast stations do not compete in the same economic market,
    elimination of the ban could not harm competition.[^52] The
    Commission also found that efficiencies resulting from
    cross-ownership can actually promote localism because
    newspaper-owned television stations tend to produce local news and
    public affairs programming in greater quantity and of a higher
    quality than non-newspaper-owned stations.[^53] Furthermore, the
    Commission determined that the blanket ban was not needed to promote
    diversity given the vast array of media outlets available in many
    markets.[^54] The Commission replaced the ban with new cross-media
    limits, which were targeted more precisely at specific types of
    markets in which particular combinations could harm diversity.[^55]
    The cross-media limits were derived from the Diversity Index (the
    "DI"), which analyzed and measured the availability of outlets that
    contributed to viewpoint diversity in local media markets.[^56]

16. The Third Circuit affirmed the Commission's decision to eliminate
    the complete ban, finding the Commission's conclusions that the ban
    undermined localism and that it was unnecessary to protect
    competition or diversity to be reasonable.[^57] It agreed that the
    Commission reasonably concluded, given the conflicting evidence in
    the record on whether ownership influences viewpoint, that it did
    not have enough confidence in the proposition that commonly owned
    outlets have a uniform bias so as to warrant maintaining the
    prohibition.[^58] The court concluded, however, that the specific
    cross-media limits adopted were not supported by reasoned analysis,
    and remanded those limits for further justification or modification.
    The court found that the Commission placed too much weight on the
    Internet as a source of local news in its DI, did not support the
    equal-sized competitor assumption on which the DI was based, and
    inconsistently derived the cross-media limits from its DI
    results.[^59] Numerous parties also objected to the DI, claiming
    that its methodology and the measures based upon it were
    flawed.[^60] In addition, parties contended that because the DI was
    the basis for the cross-media limits, the deficiencies in the DI
    were fatal to the adopted limits.[^61]

17. In light of the extensive and detailed criticism of the DI, we
    tentatively concluded in the *Further Notice* that the DI is an
    inaccurate tool for measuring diversity and that some aspects of
    diversity may be difficult to quantify.[^62] We affirm that
    conclusion here, and accordingly reject any use of the DI. In
    addition, the court held that because the cross-media limits are
    based upon the DI, its deficiencies are fatal to the cross-media
    limits. Thus, on remand and reconsideration, we will not reinstate
    the cross-media limits or rely on the DI.[^63] Instead, we will
    modify the newspaper/broadcast cross-ownership rule as described
    below.

## Discussion

18. As an initial matter, we reaffirm the Commission's decision to
    eliminate the blanket ban on newspaper/broadcast cross-ownership and
    replace it with a presumption that waivers of the ban are in the
    public interest in certain limited circumstances set forth below.
    The *Prometheus* court agreed that the ban is not necessary to
    promote competition, diversity, or localism. First, the court agreed
    that the ban is not necessary to promote competition in local
    markets because most advertisers do not view newspapers and
    television stations as close substitutes.[^64] Second, the court
    agreed that the ban could undermine localism by preventing efficient
    combinations that would allow for the production of high-quality
    local news.[^65] Third, the court found that the ban is not
    necessary on grounds of diversity because of insufficient evidence
    that ownership influences viewpoint.[^66] Finally, the court
    affirmed that a complete ban is unwarranted due to the presence of
    other media sources in local markets, such as the Internet and
    cable.[^67]

19. Evidence in the record continues to support the Commission's earlier
    decision that retention of a complete ban is not necessary in the
    public interest as a result of competition, diversity, or localism.
    Many commenters agree that an absolute ban is not necessary in order
    to achieve our competition, localism, or diversity goals.[^68] We
    agree and remain unconvinced that a blanket ban would continue to
    serve the public interest, particularly in the largest markets. As
    the Commission stated in adopting the newspaper/broadcast
    cross-ownership ban in 1975, "an agency's view of the extent to
    which its public interest mandate requires it to take newspaper
    ownership into account can change over the years," and that prior
    statements "on what policy best serves the public interest does not
    mean that the agency is excused from its continuing responsibility
    to seek to further the public interest which may cause it to reach a
    different conclusion twenty-two years later."[^69] We have ample
    evidence in the record that marketplace conditions have indeed
    changed and thus justify a recalibration at this time. As discussed
    below, the record indicates that the largest markets contain a
    robust number of diverse media sources and that the diversity of
    viewpoints would not be jeopardized by certain newspaper/broadcast
    combinations. The record also shows that newspaper/broadcast
    combinations can create synergies that result in more news coverage
    for consumers. In addition, because the presumption we adopt today
    that waivers of the ban are in the public interest is generally
    limited to combinations of a single broadcast outlet and a daily
    newspaper in the largest markets, it will ensure that such synergies
    can be captured without impairing diversity. In short, our new rule
    lifts the complete ban but does so in a modest manner in order to
    ensure both that our goals of competition, localism, and diversity
    are not compromised and that we may achieve the economic benefits of
    allowing certain combinations.

20. We now adopt a presumption that generally will permit certain
    newspaper/broadcast station combinations in the largest 20 markets,
    and generally will preclude them in all other markets.[^70]
    Specifically, we establish a presumption that a waiver of the
    cross-ownership ban is in the public interest in the following
    circumstances: when a daily newspaper seeks to combine with a radio
    station in a top 20 DMA, or when a daily newspaper seeks to combine
    with a television station in a top 20 DMA and (1) the television
    station is not among the top four ranked stations in the market
    and (2) at least eight "major media voices" would remain in the DMA.
    We will continue to presume that all other proposed
    newspaper/broadcast station combinations are not in the public
    interest, subject only to two limited exceptions. In evaluating
    transactions to determine whether a waiver is warranted, we will
    look at every transaction on a case-by-case basis, mindful of these
    presumptions. We provide specific factors that the Commission will
    consider in conducting that analysis to determine whether a proposed
    combination will be in the public interest. Our cautious approach
    balances the need to support the availability and sustainability of
    local news and informational programming with the needs to preserve
    diversity and to avoid significantly increasing local ownership
    concentration.

21. *Relevant Marketplace Developments*. The Commission has tailored its
    approach to common ownership of newspapers and broadcast stations
    several times in its history as the media marketplace evolved. As
    discussed below, the current ban prohibiting the cross-ownership of
    newspapers and broadcast stations arose 32 years ago in an era when
    two mature industries -- daily newspapers and broadcasting --
    constituted the only "mass media" providing local news and
    information to most American communities. In 1975, moved by a newly
    heightened concern about media diversity at the local level, the
    Commission reversed what had been its decades-old policy of
    encouraging newspaper/broadcast combinations.[^71] The data before
    us now show that the media environment has changed considerably over
    the past three decades. The emergence of new forms of electronic
    media in recent years has come at the expense of traditional media,
    and of newspapers in particular. Changes include a diminished number
    of newspaper outlets, ebbing popularity with consumers, and a
    notable shift in the role that traditional media outlets play in
    gathering and disseminating news and information. Faced with these
    facts, we, like our predecessors, remain cognizant of our obligation
    to adjust our regulations to "adequately reflect the situation as it
    is, not was."[^72] And we are now, of course, under a statutory
    obligation to do so under Section 202(h) of the 1996 Act. We find
    that the state of the marketplace today warrants a measured
    readjustment of the newspaper/broadcast rule. We believe that our
    revised regulation will continue to serve our goal of preserving
    media diversity in local markets while also providing some
    flexibility for new, efficient combinations in appropriate
    circumstances.

22. In the early days of broadcasting, when the success of the then-new
    medium was not assured, the Commission had actively encouraged
    newspaper owners to apply for newly available licenses in their
    local communities.[^73] Regulators hoped that such established local
    media entities would bring both expertise and financial support to
    the development of broadcasting as a viable mass medium.[^74] By the
    1970s, however, the Commission determined that television and radio
    broadcasting operations had come into their own and no longer needed
    the help of local newspaper publishers to survive:

    Now, unlike \[the early days of broadcasting\], the broadcasting
    medium has matured. While not all have made profits, for the most
    part, it is the particular market situation, or the newness of the
    operation that is the cause. Thus, the special reason for
    encouraging newspaper ownership, even at the cost of a lessened
    diversity, is no longer generally operative in the way it once was.
    Nor are newspapers the sole reservoir of experience on which
    reliance has to be placed. To the extent that television (or radio)
    facilities are worth applying for, qualified and experienced
    applicants can be expected to step forward. Newspapers are not the
    only interested parties. The Commission is obliged to give
    recognition to the changes which have taken place and see to it that
    its rules adequately reflect the situation as it is, not was.[^75]

    Given these developments, and mindful of its obligations to take
    action in the public interest, the Commission's concern shifted to
    media diversity -- specifically, its "long standing policy of
    promoting diversification of ownership of the electronic mass
    communications media" on the basis that "ownership carries with it
    the power to select, to edit, and to choose the methods, manner and
    emphasis of presentation, all of which are a critical aspect of the
    Commission's concern with the public interest."[^76]

23. To that end, the Commission in its 1975 *Second Report and Order*
    concluded that it no longer served the public interest to permit one
    entity to own both a local daily newspaper and a broadcast station
    in the same community.[^77] The Commission based part of its
    rationale for adopting a cross-ownership ban on the relatively
    limited resources available at that time for the dissemination of
    ideas on a community-wide scale. In 1975, a person wishing to
    provide local news to reach a mass audience on a frequent basis in
    his or her local community had only two reliably effective
    options: (1) produce a written publication, or (2) acquire a
    full-power broadcast license. [^78] Neither option was without
    significant transaction costs that raised high hurdles against entry
    into the mass media arena.[^79] Given the then-extant harms of
    highly consolidated cross-ownership and the high barriers to entry,
    the Commission adopted the ban, which continues to this day.

24. The media marketplace today is profoundly different. In absolute
    terms, dramatic changes have occurred over several decades with
    respect to the number and types of media "voices" competing for the
    public's attention. With the increase in media voices has come a
    marked fragmentation of audience share as viewers, listeners and
    readers gravitate toward new sources of information and
    entertainment. The modern era of fragmentation began in the late
    1970s, with the emergence of what has grown to be hundreds of video
    programming channels available over cable and, later, by satellite
    distribution. Many of the media outlets now vigorously competing for
    audiences simply did not exist at the time the Commission's rule
    prohibiting newspaper/broadcast combinations was adopted. For
    example, there are currently approximately 11.6 million subscribers
    to satellite radio, a service which did not exist in 1975.[^80] In
    addition, approximately 86 percent of U.S. households subscribe to
    video service provided by an MVPD, which includes cable, SMATV
    systems, direct broadcast satellite (DBS), fiber-optic network
    service, wireless cable, and other such delivery systems that either
    did not exist or existed only in limited form in 1975.[^81]
    Moreover, increased efficiencies in the use of terrestrial broadcast
    spectrum allowed for increased numbers of television and radio
    stations on the air since 1975; the number of radio stations
    increased by approximately 76 percent, while there has been an 83.5
    percent growth in the number of television stations over the same
    period.[^82] The later dawning of the Internet as a major
    distribution channel for content has accelerated this audience
    fragmentation.[^83] As new digital technologies are being
    introduced, audiences continue to splinter, and advertising dollars
    continue to shift with the changing structure of the
    marketplace.[^84] All of these post-1975 marketplace developments
    obviate the need for an across-the-board ban on newspaper/broadcast
    combinations.

25. On its surface, the fragmented state of media audiences today seems
    a rather benign consequence of technological progress. Media
    audiences in overall terms continue to grow,[^85] as do advertising
    revenues that are generated by the various media that reach those
    audiences.[^86] In many respects, the evolution of the modern media
    marketplace has been a positive social advancement in terms of its
    potential for increased distribution of news and information.

26. How well the traditional media are adapting to the current phase of
    media evolution -- and what the consequences may be for the
    gathering and reporting of news and information -- is a matter of
    considerable debate. Some evidence suggests that while television
    originally diverted audiences from radio and newspapers, the
    Internet and handheld devices may be helping to bring audiences back
    to these traditional forms of media.[^87] In fact, unique visitors
    to newspaper websites have increased over the past several years
    from 41 million in January 2004, to 43 million in January 2005, 57
    million in January 2006, and 59 million in January 2007.[^88]

27. Other sources, however, paint a more pessimistic picture.[^89] Even
    as the population of the country has increased more than 80 percent
    in the last half-century,[^90] the number of daily newspapers being
    published and their readership have decreased significantly.[^91] In
    1975, there were more than 1,756 daily newspapers, with a total
    circulation of about 60.7 million readers.[^92] By 2005, the number
    had dropped to 1,452 daily newspapers, with a total circulation of
    53.3 million.[^93] In the six-month period ending September 2007,
    the Audit Bureau of Circulations shows further declines in
    circulation for 700 daily newspapers across the country.[^94] Of the
    top 25 papers in daily circulation, only four showed gains.
    Circulation for newspapers such as *The* *New York Times, The
    Washington Post, The Denver Post*, and *The Boston Globe* showed
    declines ranging from 3.2 percent to 10 percent.[^95]

28. The steep reduction in newspaper circulation in recent years has
    triggered a cascade of negative impacts on the media industry. One
    such effect -- which has particular import for the public interest
    -- is the recent and sharp reduction in the number of professional
    journalists employed in the newspaper industry.[^96] In 2006, the
    industry began with roughly 3,000 fewer full-time newsroom staff
    than it had at its peak of 56,400 in 2000.[^97] NAA provided
    detailed data concerning the economic pressures faced by newspapers
    in recent years, which have resulted in significant layoffs of
    professional journalists and the shuttering of news bureaus by major
    newspapers around the country.[^98] For example, Gannett announced
    in November 2007 that it would cut 45 newsroom positions (equal to 9
    percent of its staff) for its *USA Today* publication in response to
    a decline in revenue of 6.6 percent over the prior year. NAA also
    noted additional announced cuts occurring solely in or for the year
    2007 at a number of major newspapers, including *The Boston Globe*
    (24 newsroom staff cut in 2007, including two Pulitzer Prize-winning
    journalists), *The Minneapolis Star-Tribune* (50 newsroom staff cut
    in 2007), *The San-Jose Mercury News* (17 percent newsroom reduction
    in 2007), *The Rocky Mountain News* (20 newsroom staff cut in 2007),
    *The Denver Post* (16 journalists in voluntary buy-outs and 5
    journalists laid off in 2007), *The Spokesman-Review* (announcing
    8-12 layoffs in 2007), *Detroit Free Press* (announcing 16-22
    newsroom staff cuts in 2007), *Detroit News* (announcing 6 newsroom
    staff cuts in 2007), *Los Angeles Times* (70 newsroom staff cut in
    2007), *The San Francisco Chronicle* (25 percent newsroom staff
    reduction in 2007, equal to about 100 jobs), and *The Santa Cruz
    Sentinel* (8 permanent news staff terminated in July 2007), all
    reportedly due to recent economic losses at those papers. At some
    newspapers, the job layoffs have not been simply careful pruning of
    staff but rather severe reductions at -- or wholesale abandonment of
    -- news bureaus located in Washington, D.C., state capitals, and
    regional centers within their states.[^99]

29. We note that the cuts described above comprise only those announced
    for the year 2007. The record contains evidence of additional
    significant cuts in newsroom staff in prior years as well.[^100] In
    its comments in this proceeding, CWA emphasizes the conclusions
    reached in the Project for Excellence in Journalism's *2006 State of
    the Media* report, that recent job cuts in the media industry have
    been "ominous."[^101] CWA posits that the "deep cuts did not
    ultimately satisfy Wall Street" and may have even gone too far for
    purposes of retaining readers and advertisers.[^102] As we note in
    further detail below, concurrent with the loss of circulation over
    time has been a leveling off of advertising dollars available to the
    newspapers still competing in the marketplace, and an attendant
    shift of those dollars to Internet-based services.

30. The decline in newspapers' print circulation has, predictably,
    affected the advertising dollars that keep newspapers alive.
    Advertising revenues, which currently account for slightly more than
    80 percent of the industry's total revenues, steadily increased for
    decades, but appear to have leveled off after 2000.[^103]
    Unfortunately, experts believe that the future looks worse. SNL
    Kagan, for example, predicts declines in the number of daily
    newspapers, declines in circulation, and declines in all categories
    of newspaper advertising revenue, including online ad revenue,
    through 2011.[^104]

  ------- ------- ------- ------------ --------- --------- ------- ------- -------
                          **Compound                                       
                          Growth Rate                                      
                          (%)**                                            

                          **Years**    **Total   **GDP**                   
                                       Ad.**                               

                          1950-1960    5.9%      6.0%                      

                          1960-1970    4.5%      7.0%                      

                          1970-1980    10.0%     10.4%                     

                          1980-1990    8.1%      7.6%                      

                          1990-2000    4.2%      5.4%                      

                          2000-2006    -0.7%     5.1%                      
  ------- ------- ------- ------------ --------- --------- ------- ------- -------

31. Aside from declining circulations, the Internet has also had a
    particularly noteworthy effect in taking away advertising from
    newspapers, particularly classified advertising.[^105]
    Advertising-oriented websites such as craigslist,[^106] eBay,[^107]
    and Zillow[^108] have siphoned off a large amount of revenue that
    newspapers large and small have counted on for decades to provide a
    significant and relatively stable flow of revenue.[^109] For
    instance, there was a \$2.3 billion decline in classified revenues
    over five years, as reported by the NAA, from \$19.6 billion in 2000
    to \$17.3 billion in 2005. Newspapers' hold on classified
    advertising was never seriously threatened by the new media rivals
    that emerged earlier in the 20^th^ Century because neither
    broadcasting stations nor multichannel video programming
    distributors such as cable systems were well-suited to compete for
    short-term, inexpensive ads.[^110] Product- or service-oriented
    advertising websites, on the other hand, may provide as good, or
    arguably better, means for sellers, particularly small sellers, to
    reach potential buyers efficiently. Moreover, it is noteworthy that
    none of the revenues from these sites is used to directly support
    the operations of newsgathering and reporting functions. Thus, this
    revenue shift undermines local newsgathering and reporting.

32. The newspaper industry faces other problems as well. At the same
    time that advertising revenues have flattened and circulation has
    declined, newspaper operational expenses have continued to rise. An
    index of input costs for the industry has risen steadily in recent
    years; climbing from 106.3 in 2000 to 122.9 in 2005 (on an index
    that sets 1992 input costs at 100).[^111] This means that total
    input costs rose by 6.3 percent in the eight years from 1992 to 2000
    and by 15.6 percent in the five years from 2000 to 2005. Newspaper
    managers responded with renewed cost-cutting efforts, including
    reductions in professional staff.[^112]

33. In the face of these adverse financial conditions, stock prices for
    many of the major newspaper companies have fallen, and Wall Street
    analysts that follow the industry closely have expressed concern. In
    a report released May 26, 2006, Merrill Lynch analysts said, "\[W\]e
    are now concluding that the fundamental outlook for newspapers is
    even more challenging than we had previously thought; in essence
    profits generated from an almost monopolistic position within
    classifieds is being eliminated as the core listings business could
    become a loss leader for other online classified models."[^113]

34. CU disagrees that a downward trend exists in the newspaper industry
    and states that consolidation is not necessary for the economic
    well-being of media companies. CU argues that, over the last three
    years, newspaper and television properties have sold at healthy
    multiples of cash flow and are experiencing profit margins
    comparable to other media properties. CU also claims that smaller
    chains and stand-alone properties are thriving.[^114] However, we
    find that the evidence in the record, reviewed above, shows that
    that the newspaper industry is struggling. In particular, we find
    that the statistics over the past decade show an industry containing
    fewer newspapers, facing declining circulation, bringing in stagnant
    revenues, suffering from increased costs, and employing fewer
    journalists. Based on these competitive conditions, numerous
    commenters stress the need for relaxation of the newspaper/broadcast
    cross-ownership ban so that newspapers can remain competitive by
    providing information and news to consumers across other platforms,
    such as a broadcast station, and thereby strengthen the local
    newsgathering and reporting operations of both newspapers and
    broadcast stations.[^115]

35. Notwithstanding the significant challenges that face newspaper
    operators in today's media marketplace, newspapers continue to play
    a critical role in the production of news and information in our
    society.[^116] Newspapers and, to a somewhat lesser extent,
    broadcast stations still continue to serve as the most organized,
    systematic gatherers of news and information in their communities.
    Newspapers provide this news and information directly to citizens
    and also, through their online operations, offer the core content
    necessary to popular aggregator websites such as Google News and
    Yahoo News.[^117] Newspaper and broadcast content also feeds online
    outlets such as blog sites, which typically provide commentary
    rather than original news reporting.[^118] In light of the important
    role and current state of the newspaper industry, it is therefore
    critical that our rules do not unduly stifle efficient combinations
    that are likely to preserve or increase the amount and quality of
    local news available to consumers via newspaper and broadcast
    outlets.

36. Our decision to modestly relax the 32-year-old newspaper/broadcast
    cross-ownership ban is also bolstered by the way in which Internet
    use by both consumers and competitors is changing how traditional
    news media operate, not merely by fracturing their traditional
    advertising-based business models[^119] but also by altering how
    newspapers and broadcasters gather information, respond to their
    audiences, and compete for consumer attention.[^120] Although the
    ultimate impact of the Internet on the old media is difficult to
    predict, developments since the Commission last reviewed its rules
    show that the diminishment of mainstream media power over
    information flow is real.[^121]

37. As discussed above, the Commission's newspaper/broadcast
    cross-ownership ban arose in an era when daily newspapers and
    broadcast stations enjoyed relatively unrivaled power in their local
    markets to collect information and to decide what constituted "news"
    worth transmitting to their audiences.[^122] They thereby influenced
    what topics people considered important, even if they had less power
    to shape the positions people took on those topics. [^123] It is
    clear today that these "gatekeeping" aspects of the traditional
    media's role are in turmoil. The new and broader array of inputs
    from online sources[^124] available to the American public not only
    affects mainstream journalists' decisions on what to report and how
    to report it,[^125] but websites also act as competing outlets --
    even, at times, as work-around channels of information in cases
    where the mainstream media has been slow or reluctant to
    react.[^126]

38. The nearly instantaneous speed with which consumers can now
    communicate via the Internet has created a vastly improved two-way
    flow in the sharing of ideas between traditional news gatherers and
    news consumers, with a consequent power to affect the priority that
    the traditional media place on coverage of certain events and
    topics.[^127] Many previously passive consumers of news are already
    taking advantage of the opportunities the Internet allows to
    influence the newsgathering process.[^128] More than ever before,
    readers and audiences are themselves communicating with news
    gatherers to demand, directly and indirectly, coverage of specific
    topics.[^129] There are many high-profile examples of news
    organizations slow to pick up on a story which, after percolating
    among bloggers and others in the online arena, grows into an issue
    that traditional news media eventually cover.[^130] The erosion of
    newspapers' traditional gatekeeping power convinces us that
    newspaper combinations no longer pose the same threat to diversity
    that they once did. For this reason as well, a total ban on
    cross-ownership can no longer be justified as necessary to protect
    viewpoint diversity.

39. *Policy Goals.* In the *2002 Biennial Review Order*, the Commission
    concluded that efficiencies from the common ownership of two media
    outlets may increase the amount of diverse, competitive news and
    local information available to the public.[^131] We continue to find
    evidence that cross-ownership in the largest markets can preserve
    the viability of newspapers without threatening diversity by
    allowing them to spread their operational costs across multiple
    platforms. In doing so, they can improve or increase the news
    offered by the broadcaster and the newspaper. Numerous media owners
    provide examples of cost savings and shared resources leading to
    more local coverage and better quality news coverage.[^132]

40. Numerous parties cite to examples of the introduction of new or
    additional newscasts due to cross-owned combinations in
    markets.[^133] Cox offers examples of its local programming and
    community service efforts in markets where it owns same-market
    broadcast stations and newspapers.[^134] Media General notes that
    its six cross-owned stations provide between 20.5 and 32 hours of
    local news per week.[^135] Media General adds that newspapers are
    similarly launching hyper-local initiatives including new daily,
    weekly, and other special-interest publications; web publication;
    podcasting; and enlistment of "citizen journalists."[^136] Media
    General explains that several newspapers have launched free local
    publications over the past several years, which are intended to
    complement their subscription services and boost readership by
    delivering more accessible and more local content. In addition,
    Media General states that newspaper companies are also launching new
    Spanish-language publications and hyper-local inserts, such as
    *Neighbors,* which are tailored weekly magazine inserts that Belo
    Corp. distributes to 16 local communities as part of *The Dallas
    Morning News.*[^137] Gannett points to its critically acclaimed
    Phoenix combination, which provides more and better local news,
    including lengthy investigative reports, while retaining separate
    editorial viewpoints.[^138] In markets in which Belo currently owns
    and operates television duopolies, including Seattle-Tacoma and
    Phoenix, it cites to the introduction of daily newscasts for the
    first time on its stations.[^139] Media General also notes that
    newspapers are utilizing Wi-Fi and mobile technologies to give their
    readers "on-the-road" access.[^140] NAA indicates that 39 of the
    nation's top 40 daily newspapers now offer video on their websites,
    including complete newscasts. Media General and NAB cite to studies
    that demonstrate that newspaper/television combinations are likely
    to produce more news than stand-alone stations in the same
    market.[^141] NAB cites studies that found that programming
    diversity increases when group ownership increases.[^142]

41. In contrast, AFL-CIO objects to relaxation of the cross-ownership
    ban, asserting that media concentration diminishes localism in news
    media because it puts pressure on media firms to lower costs by
    decreasing local news coverage.[^143] AFL-CIO lists budget and job
    cuts that resulted from reductions in local coverage.[^144] AFL-CIO
    also cites to an example of how cross-owned media properties could
    serve as "a cross-promotional vehicle rather than as an independent
    editorial voice."[^145] CCVM contends that only independent owners,
    not large conglomerates, are able to focus on a community's needs
    and therefore many communities lack sufficient local news, political
    discussion, and diverse programming choices.[^146]

42. We have a considerable amount of empirical evidence in the record on
    both sides concerning the relationship between newspaper/broadcast
    combinations and localism. On balance, we believe the evidence
    suggests that some newspaper/broadcast cross-ownership combinations
    can enhance localism. Three Media Ownership Studies analyzed the
    effects of newspaper/broadcast cross-ownership on television news
    coverage and local content. Study 6 concluded that "local television
    newscasts for cross-owned stations contain on average about 1-2
    minutes more news coverage overall, or 4 to 8 percent more than the
    average for non-cross-owned stations."[^147] The author further
    concluded that newspaper cross-ownership is also "significantly and
    positively associated with both local news coverage and local
    political news coverage," finding that cross-owned stations show
    7-10 percent more local news than do non-cross-owned stations. The
    study author also found that on average, cross-owned stations
    broadcast about 25 percent more coverage of state and local
    politics.[^148] The author also generally noted that
    newspaper/broadcast cross-ownership is associated with more
    candidate coverage, more candidate speaking time and more coverage
    of opinion polls.[^149] Study 3 analyzed the relationship between
    the ownership structure of television stations and quantity and
    quality of television programming between 2003 and 2006, finding
    that cross-owned television stations broadcast (approximately 3.0
    percentage points) more local news programming.[^150] Study 4.1
    collected data on the news and public affairs programming provided
    by television stations and analyzed the relationship between the
    quantity of such programming and the ownership structure of each
    television station**.** [^151] After examining the programming of
    approximately 1700 stations between 2002 and 2005, the author
    concluded that cross-owned stations provided 11 percent (18 minutes)
    more news programming per day than other stations.

43. CU criticizes Studies 3, 4.1, and 6 for focusing on the effect of
    cross-ownership on the local news output of the particular
    cross-owned television station. CU argues that the studies should
    have focused on the local news output of all outlets in the entire
    market in which the cross-owned television station competes.[^152]
    Specifically, CU states that while in some cases there may be an
    increase in news output at the individual cross-owned station there
    is a decline in the amount of local news for the market as a
    whole.[^153] CU submits an analysis showing that
    newspaper/television combinations do not increase the total quantity
    of local news in the market.[^154]

44. Due to numerous difficulties with CU's analysis, we find that we
    cannot rely on its conclusions. It is not clear what measure CU used
    for total quantity of local news, but it appears that the measure is
    limited to broadcast television news, which measures only a portion
    of local news, and ignores local news from newspapers, radio, local
    cable news stations, and other sources. As a result, CU's
    measurements are incomplete, and we cannot rely upon them.
    Additionally, the thrust of CU's argument is that if cross-ownership
    does not increase total local news (as CU measures it), the ban
    should be maintained. This argument may have been formed because CU
    statistical results do not show a statistically significant effect
    of cross-ownership. This lack of statistical significance may arise
    from CU's choice of specification and measure of local news, and as
    such may be unreliable. Media General submits a critique of CU's
    criticisms that agrees with these findings.[^155] In his Econometric
    Review, Dr. Harold Furchtgott-Roth states that CU makes several
    economic and econometric mistakes that undermine the reliability of
    its results. First, he states that CU's decision to examine the
    effect of cross-ownership by aggregating to the market level is
    incorrect. CU's revised regressions fail to measure total news and
    diversity of news at the market level. In addition, he states that
    one of the strongest predictors of the quantity of broadcast news in
    a market would be the number of stations in the market. That
    variable, however, is omitted in the specifications by CU, resulting
    in regressions that are much less precise.[^156] We agree that it is
    improper to aggregate to the market level without adjusting for the
    number of outlets in the market.

45. McGannon Research Center submitted a study by Michael Yan that
    analyzes how cross-owned stations compared with non-cross-owned
    stations in the provision of local news and public affairs
    programming.[^157] The Yan Study shows that while cross-owned
    stations are more likely to have local news programming, they do not
    broadcast more local news than other stations that also provide
    local news, and that cross-ownership has no significant relationship
    with the presence or the quantity of local public affairs
    programming on commercial television.[^158] NAA submits a statement
    by Professor Jerry Hausman disagreeing with results of the Yan
    Study.[^159] Professor Hausman states that the Yan Study actually
    shows that cross-owned stations air considerably more minutes of
    local news (242 minutes over the two-week study period or
    approximately 17 minutes per day), even when the sample size is
    effectively limited through Yan's econometric model to stations that
    air local news and when other variables are taken into
    account.[^160] Professor Hausman explains that Yan's conclusion is
    misleading because the absence of statistical significance most
    likely stems only from the small size used in the Study, not from
    any lack of relationship between cross-ownership and the quantity of
    local news aired.[^161] The Commission submitted the Yan Study and
    the Hausman analysis of the Yan Study to outside peer review.[^162]
    Professor Hausman's analysis, as well as both peer review reports,
    are in agreement that Yan's econometric work does not support his
    conclusion and that the data instead provide support for the
    proposition that cross-owned stations actually supply more local
    news and more local public affairs programming, with the evidence
    strong in the case of news.

46. We recognize that there is disagreement in the studies. On balance,
    however, we conclude 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. The
    inconclusiveness of some of the data and disagreement as to the
    outcome of the studies, however, supports our decision to undertake
    a case-by-case review of particular combinations in particular
    markets, rather than providing hard, across-the-board limits. Under
    our method, we can consider facts in a particular case, with a
    presumption in favor of allowing newspaper and radio station or
    non-top four television station combinations in the top 20 markets,
    and a presumption against combinations in all other markets. A
    case-by-case approach will enable the Commission to make a more
    fully informed assessment that a proposed transaction in a
    particular market actually will increase the total amount of local
    news generated by the combined outlets.

47. The Commission found in the *2002 Biennial Review Order* that
    retaining some cross-ownership limits is necessary in order to
    ensure diversity.[^163] The *Prometheus* court agreed.[^164] We
    continue to believe that some restrictions on cross-ownership are
    necessary to protect diversity.

48. Many commenters claim that consolidation will harm diversity because
    there are no substitutes for traditional news sources. Despite the
    proliferation of new media, numerous parties contend that media
    ownership limits are needed to preserve diversity, localism, and
    competition because many of the new types of media do not serve as
    independent voices.[^165] CWA states that it is essential to retain
    the newspaper/television ban to preserve diversity and competition
    in local news, particularly because most markets have only one
    newspaper and three to four broadcast outlets.[^166]

49. We reaffirm our findings in the *2002 Biennial Review Order* that
    some cross-ownership limits are necessary to guard against "an
    elevated risk of harm to the range and breadth of viewpoints that
    may be available to the public."[^167] We are not in a position to
    conclude that ownership can never influence viewpoint. Nor are we in
    a position to quantify nontraditional media outlets' contribution to
    diversity. The record provides examples of commonly owned outlets
    exercising independent editorial control.[^168] The record also
    includes examples of existing media outlets, such as newspapers,
    introducing a new media outlet into the market, such as an Internet
    website, but using both outlets to provide the same local content
    for consumers.[^169] Therefore, our new rule is designed to promote
    diversity by presumptively prohibiting combinations in the markets
    with the fewest number of voices, while presumptively permitting
    certain combinations in the largest markets where the loss of
    diversity is not a significant risk.

50. The necessity of such cross-ownership limits for the protection of
    diversity depends on the particular nature of both the market at
    issue and the transaction at issue. An inflexible
    "one-size-fits-all" rule, such as the blanket newspaper broadcast
    cross-ownership ban, fails to recognize the diversity of media
    markets across the country as well as the diversity of media
    transactions. What may make sense for Portland, Maine, does not
    necessarily make sense for New York City. And certain combinations
    may lead to increased local news reporting and may operate with
    outlets retaining independent editorial voices while others may not.
    The revised newspaper broadcast cross-ownership rule we adopt today
    takes account of these realities.

51. In sum, the record before us reveals a state of tumult in the
    business environment that has supported the traditional local
    media's production of news and information for decades. We recognize
    that technology advancements have triggered upheavals for these
    entities' business models beyond any they have previously
    experienced. Data gathered since 2002 make plain that the roiling of
    the media environment has accelerated recently, with obvious losses
    in professional personnel employed by traditional media entities to
    gather and report news and information. Yet we also see some hopeful
    trends suggesting that the traditional media will adapt and survive
    in the new digital and online era.[^170] Against this backdrop, we
    believe that our revised newspaper/broadcast rule is an
    appropriately cautious measure. It takes into account the realities
    of the modern media marketplace and will allow newspapers and
    broadcast stations to explore synergies in certain circumstances,
    but maintains safeguards to ensure that consumers continue to enjoy
    the benefits that flow from the operation of multiple, competing
    sources of news and information.

52. We replace the blanket ban on newspaper/broadcast cross-ownership
    with a rule that establishes clear presumptions as to the limited
    circumstances when we will presume a newspaper/broadcast transaction
    will be in the public interest and thus a waiver of the ban should
    be granted.[^171] Establishing presumptions, as opposed to a bright
    line, will allow for the evaluation of proposed newspaper/broadcast
    combinations under defined circumstances on a case-by-case basis. In
    limited cases, we will presume that a proposed combination would be
    in the public interest. In the vast majority of cases, we will
    presume that a proposed combination would not be in the public
    interest, and we therefore would not permit the combination.
    Nevertheless, no matter which presumption applies, we will consider
    specific factors in determining whether permitting a particular
    combination in a particular market would be in the public interest.
    In addition, our case-by-case approach should partially alleviate
    the concerns of the newspaper industry commenters who believe the
    revised rule is too modest in scope to provide sufficient
    opportunities for cross-ownership and that it fails to recognize the
    marketplace changes since 1975.[^172] Moreover, because our rule
    presumes combinations are not consistent with the public interest in
    markets 21 and below and because we will continue to scrutinize
    combinations of newspapers and the top four television stations in
    markets 1-20, our rule will not harm diversity or localism, as
    discussed below.

### Presumption Favoring Certain Combinations in Top 20 Markets 

53. We adopt a presumption that it is not inconsistent with the public
    interest for an entity to own in the top 20 Designated Market Areas
    ("DMAs")[^173] either (a) a newspaper and a television station
    if (1) the television station is not ranked among the top four
    stations in the DMA,[^174] and (2) at least eight independent "major
    media voices" remain in the DMA; or (b) a newspaper and a radio
    station. We expect that, as a result of this presumption, a waiver
    of the newspaper/broadcast cross-ownership ban generally would be
    granted in such cases.[^175]

54. Although we concluded in the *2002 Biennial Review Order* that, on
    balance, the benefits of precision that case-by-case review of every
    transaction would provide were outweighed by the benefits of
    bright-line rules, we believe that the built-in presumptions and the
    public interest test provide adequate predictability for the
    industry, particularly when coupled with the older "bright-line"
    rules that we are retaining.[^176] The Commission previously has
    noted that bright-line rules can be over-inclusive or
    under-inclusive depending upon the particular rule at issue.[^177]
    Our approach addresses such concerns. In addition, in comparison to
    the number of applications triggering the local radio, local
    television, and radio/television ownership rules, we do not
    anticipate that there will be as many newspaper/broadcast
    applications filed; thus, the more case-specific nature of the
    review under this cross-ownership rule will not be unduly burdensome
    for the industry or the Commission.[^178]

55. *Top 20 Markets*. As an initial matter, the presumption that a
    particular newspaper/broadcast station combination is not
    inconsistent with the public interest will apply only to proposed
    combinations in the largest 20 DMAs in the country. Such
    combinations in the largest markets in the country generally raise
    fewer diversity concerns because such media markets are more vibrant
    and have more media outlets.[^179] As CU explains, "\[t\]he evidence
    in this proceeding shows quite clearly that the larger the market,
    the less concentrated the media tend to be."[^180] We admit that it
    is not possible to draw with mathematical precision the line that
    should separate those largest media markets where the positive
    presumption should apply from those smaller markets where it should
    not. In looking at the media marketplace in the largest DMAs in the
    country, however, we believe that it is most appropriate to draw the
    line at the top 20 DMAs.[^181]

56. We find notable differences between the top 20 markets and all other
    DMAs, both in terms of voices and in terms of television households.
    We evaluated the range of media outlets available in the top 20
    DMAs, and conclude that diversity in those largest markets is
    healthy and vibrant in comparison to all other DMAs. For example,
    while there are at least 10 independently owned television stations
    in 18 of the top 20 DMAs, none of the DMAs ranked 21 through 25 have
    10 independently owned television stations. Additionally, while
    seventeen of the top 20 DMAs have at least two newspapers with a
    circulation of at least 5 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 15.5 major
    voices (independently owned television stations and major
    newspapers), 87.8 total voices (all independently owned television
    stations, radio stations, and major newspapers), and approximately
    3.3 million television households.[^182] Markets 21 through 30, by
    comparison, have, on average, 9.5 major voices, 65.0 total voices,
    and fewer than 1.1 million television households, representing drops
    of 38.5 percent, 25.9 percent, and 56.3 percent from the top 20
    markets, respectively. Markets 31 through 40 and 41 through 50 have
    average numbers of voices for each category similar to markets 21
    through 30, and even fewer television households on average, 837,800
    and 679,200, respectively. Markets 50 through 210 show even more
    dramatic drops, with on average, 6.7 major voices, 31.2 total
    voices, and approximately 231,000 television households,
    representing drops of 56.4 percent, 61.7 percent, and 90.7 percent
    from the top 20 markets, respectively. The 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.

57. *Major Media Voices*. For purposes of determining the applicability
    of our presumption, we define major media voices as full-power
    commercial and noncommercial television stations and major
    newspapers[^183] because we believe that such sources are generally
    the most important and relevant outlets for news and information in
    local markets today. Indeed, there is relatively unanimous support
    for the position that consumers continue predominantly to get their
    local news from daily newspapers and broadcast television. Data
    shows that consumers rely mostly on newspapers and television for
    news and information. The record demonstrates that traditional media
    still represent the most important source for local news for the
    majority of individuals. Media Ownership Study Number 1 ("Nielsen
    Survey") indicates, for example that 38.2 percent of all respondents
    consider broadcast television stations and 30.1 percent consider
    local newspapers "the most important source of local news or local
    current affairs,"[^184] whereas only 6.7 percent of all respondents
    say the same concerning the Internet.[^185] AFL-CIO agrees, finding
    that a majority of consumers cite newspapers as the most important
    source of local news and television as the most important source of
    national news.[^186] CU attaches two studies to its comments in
    response to the *Further Notice* finding that local newspapers and
    television are the most commonly used sources for local news. CU's
    studies conclude that traditional media, television, and newspapers,
    followed by weekly newspapers and broadcast radio, are the most
    frequently used and most important sources of local and national
    news and that those that use the Internet for news and information
    overwhelmingly go to the web sites of local or national television
    sources or to the sites of daily newspapers.[^187]  Based on our
    findings, therefore, we have taken a cautious approach in
    designating which outlets to include as major media voices, the
    presence of which would support the presumption that a
    newspaper/broadcast combination will serve the public interest.
    Counting as major media voices only those outlets that consumers
    most rely on as sources of local news and information will ensure
    that we do not presume that sufficient diversity of major local news
    sources will remain in a top 20 market if such a presumption is not
    warranted.[^188]

58. We fully acknowledge that other types of outlets contribute to
    diversity. In the *2002 Biennial Review Order*, the Commission cited
    to numerous sources: cable networks, weekly and college newspapers,
    and the Internet.[^189] However, we cannot conclude that other
    voices are major sources of local news or information. Our data
    reflects only that most consumers primarily rely on newspapers and
    broadcast television for local news. For instance, several parties
    argue that cable television should count as a source of local
    news,[^190] while others discount its contribution to local
    news.[^191] The *Prometheus* court affirmed the Commission's
    decision to discount cable television as an important news source,
    but there remains little information on how to quantify its
    contribution.[^192] In addition, there is much controversy centered
    on whether and to what degree the Internet is a source for local
    news.[^193] AFL-CIO argues that the Internet merely repurposes the
    news, and should not count as a diverse voice.[^194] Conversely,
    Belo provides examples of locally oriented Internet news sources,
    including websites and blogs, some of which are offered by WFAA-TV
    and *The Dallas Morning News*, its co-owned outlets in the Dallas
    DMA. CU claims that only a small percentage of people use the
    Internet frequently for local news and information, and about half
    the web sites they visit are web sites of traditional media, which
    generally use "repurposed" content.[^195] Belo states that the
    Internet offers a vehicle for ongoing discussion and direct public
    input that is not practical to the same extent on either a local
    television station or via traditional print.[^196]

59. Because we cannot conclude that other media sources are major
    sources of local news and information, we do not include them as
    major media voices for the eight-voice count for purposes of the
    presumption in the top 20 markets. We do, however, consider them as
    contributing to diversity in local markets. To the extent that all
    of the top 20 DMAs include numerous independent sources, we are
    comfortable in our presumption that allowing a newspaper and a radio
    station or a newspaper and a non-top four television station in
    these 20 markets to combine will not harm diversity.[^197]

60. The Commission historically has used voice-count tests in other
    contexts (*e.g.*, in waiver standards for the radio-television
    cross-ownership rule) as a means of promoting diversity.[^198] Here,
    the eight independent voices component of the rule provides an
    appropriate benchmark for indicating that a minimum number of
    sources of local news and information are present before we presume
    that a combination of a newspaper and a television station is not
    inconsistent with the public interest.[^199] The standard we adopt
    today takes into account current marketplace conditions and strikes
    what we believe to be an appropriate balance between the
    efficiencies of cross-ownership and the need to safeguard diversity,
    as discussed above.[^200] We have selected the number eight for the
    major media voice count because we are comfortable that assuring
    that minimum number of major media voices in the top 20 markets --
    along with the other unquantified media outlets that are present in
    those markets -- will assure that these markets continue to enjoy an
    adequate diversity of local news and information sources. As noted
    above, there are at least 10 independently owned television stations
    and two major newspapers in the great majority of the top 20
    markets. Further, all of those markets have at least eight
    television stations and one major newspaper. As we do not want to
    allow a significant decrease in the number of independently owned
    major media voices in any of those markets, we will presume that a
    merger is in the public interest only if at least eight major media
    voices will remain post-merger.

61. *Top Four Prohibition*. The presumption in the top 20 DMAs that a
    newspaper/television combination would not be inconsistent with the
    public interest will not apply to proposed combinations between a
    daily newspaper and a television station ranked among the top four
    television stations in a DMA. In the *2002 Biennial Review Order*,
    the Commission retained its top four restriction in the local
    television ownership rule, which prohibits a combination between any
    of the top four ranked stations in a DMA. The *Prometheus* court
    agreed that the Commission was justified to limit combinations to
    those that would not create excessive market power.[^201] We
    consider a daily newspaper and the top four stations to be the most
    influential providers of local news in their markets. Thus, such
    combinations are likely to cause a greater harm to diversity in a
    market.[^202] CU/CFA/Free Press support the top four restriction,
    while others believe that there should be no cross-ownership
    restrictions in the largest markets, including allowing newspapers
    to combine with top four television stations.[^203]

62. We also believe that combinations of newspapers and non-top four
    television stations are more likely to result in the production of
    more local news in furtherance of our localism goal. Our data shows
    that stations below the top four are less likely to carry local
    news, and therefore more likely to carry "new news" as a result of a
    newspaper combination. Specifically, 86 percent of stations ranked
    first through fourth in all DMAs provide local news, averaging 2083
    minutes, while only 40 percent of stations ranked fifth and below in
    all DMAs provide some local news, averaging 458 minutes.[^204] Based
    on this data, stations ranked first through fourth provide 355
    percent more local news than stations ranked fifth and below.[^205]
    Because stations outside of the top four are less likely to have
    top-ranked local news shows and are therefore more likely to benefit
    from the extensive news gathering resources of the newspaper, we
    presume that combinations of newspapers and television stations
    ranked fifth and below are in the public interest.

### Presumption Against All Other Combinations 

63. In adopting our new newspaper/broadcast cross-ownership rule, we
    presume that it is not inconsistent with the public interest for an
    entity to own, operate or control, in one of the top 20 DMAs, a
    daily newspaper and one commercial AM or FM radio station or one TV
    broadcast station under certain circumstances. As discussed above,
    we base this presumption on the vibrancy and number of voices in the
    top 20 DMAs. In all DMAs ranked 21 and below, we adopt a presumption
    that it is inconsistent with the public interest for an entity to
    own newspaper and broadcast combinations.[^206] We adopt this
    presumption as a measure to protect competition and media
    diversity.[^207] In adopting the newspaper/broadcast cross-ownership
    rule over 30 years ago, the Commission sought to promote competition
    and diversity of viewpoints.[^208] Indeed, diversity of viewpoint
    has been especially important in the context of newspaper/broadcast
    cross-ownership, given the reliance the public has placed on these
    media as sources of local news and information.[^209] This reliance
    may be particularly acute in markets below the top 20 DMAs. As
    indicated earlier, the top 20 DMAs share a robustness in media and
    outlet diversity that is not matched in smaller markets. We are not
    certain that the degree of media consolidation that the largest,
    more competitive markets can withstand is yet mirrored in smaller
    markets, and thus, we conclude that there should be a presumption
    against newspaper/broadcast cross-ownership in markets below the top
    20.[^210] We set forth in detail below policies we will adopt to
    safeguard the public interest as we consider proposed transactions
    under the new newspaper/broadcast cross-ownership rule.[^211]

64. As the record establishes, the top 20 DMAs are media-rich, highly
    populated markets, where we believe it is appropriate to apply the
    presumption that limited newspaper/broadcast cross-ownership is not
    inconsistent with the public interest.[^212] However, in addition to
    the presumption in favor of cross-ownership, we will also evaluate
    whether a proposed transaction is in the public interest by
    considering the specific factors enumerated below. In addition,
    although the action we take today establishes a presumption against
    newspaper/broadcast cross-ownership in DMAs ranked 21 and below (and
    the less populated the DMA, the heavier the presumption against
    cross-ownership), we acknowledge the difficulty in identifying a
    definitive line to draw between markets. We also recognize the need
    to consider factors particular to each market and proposed
    transaction. Thus, just as a petitioner could rebut the presumption
    that a transaction in markets 1-20 would be in the public interest
    by showing (for example) that the resulting market would be unduly
    concentrated, applicants in markets below DMA 20 could overcome the
    relevant presumption that a merger would not be in the public
    interest by showing countervailing benefits of the proposed
    transaction. While we expect such cases to be rare, we acknowledge
    that a particular market may have unique attributes or that the
    proposed transaction may present unique advantages. In either event,
    the Commission is resolved to analyze each transaction on its
    merits. Our guiding principles, of course, will be preserving
    competition, localism, and diversity.

65. *Reversal of Negative Presumption*. In two special circumstances, we
    will reverse the negative presumption that applies to those proposed
    combinations that do not otherwise qualify for a positive
    presumption. First, we adopt a failed/failing station model, based
    upon the same criteria that we apply in the local television waiver
    criteria.[^213] Although this standard was not formalized until
    1999, the Commission has been applying this type of analysis for
    over 25 years in evaluating waivers of ownership limits.[^214] Under
    this model, if a newspaper or broadcast outlet is failed or failing,
    we would apply a positive presumption. In order to qualify as
    failed, the newspaper or broadcast outlet has to have stopped
    circulating or have been dark for at least four months immediately
    prior to the filing of the assignment or transfer of control
    application, or must be involved in court-supervised involuntary
    bankruptcy or involuntary insolvency proceedings.[^215] To qualify
    as failing, the applicant must show that (1) the broadcast station
    has had a low all-day audience share (*i.e*., 4 percent or
    lower), (2) the financial condition of the newspaper or broadcast
    station is poor (*i.e*., a negative cash flow for the previous three
    years), and (3) the combination will produce public interest
    benefits.[^216] In addition, as with requests for failed station
    waivers of the local television ownership rule, the applicant must
    show that the in-market buyer is the only reasonably available
    candidate willing and able to acquire and operate the failed or
    failing newspaper or station and that selling the newspaper or
    station to any out-of-market buyer would result in an artificially
    depressed price.[^217] The longstanding policy implementing the
    waiver criteria for television duopolies is also relevant for
    newspaper/broadcast combinations because it could permit two
    entities to merge while posing minimal harm to our diversity and
    competition goals. In such situations, the financial situation of
    one of the entities typically "hampers their ability to be a viable
    'voice' in the market":

    "These stations rarely have the resources to provide local news
    programming, and often struggle to provide significant local
    programming at all. Allowing a "failing" station to join with a
    stronger station in the market can greatly improve its ability to
    improve its facilities and programming operations, thus benefiting
    the public interest. This waiver standard may be of particular
    assistance to struggling stations in smaller markets that are not
    covered by the eight voice/top four ranked station test."[^218]

66. In the past, the Commission has also considered the financial
    survival of a newspaper outlet in deciding whether to waive the
    newspaper/broadcast cross-ownership rule. Among other things, the
    Commission considered whether, under the circumstances presented, a
    permanent waiver was necessary to effect a long-term stratagem for
    the *New York Post*'s survival.[^219]

67. Second, we also will reverse the negative presumption when a
    proposed combination results in a new source of a significant amount
    of local news in a market. Specifically, we will presume that a
    proposed newspaper/broadcast combination is not inconsistent with
    the public interest when it initiates local news programming of at
    least seven hours per week on a broadcast outlet that otherwise was
    not offering local newscasts prior to the combined operations.
    In reviewing whether broadcasters have carried out their obligations
    to serve the public interest with responsive programming, the
    Commission has historically considered their news and public affairs
    programming to be uniquely and particularly important.  A positive
    presumption under this limited circumstance will increase diversity
    of choices, provide more local programming, and allow better local
    service by media outlets. We believe that it is important, however,
    that the Commission closely monitor whether combinations taking
    advantage of this reversed presumption live up to their commitment
    to provide new local news. Therefore, broadcast station licenses
    that are approved as a result of this reversed presumption will need
    to report to the Commission annually regarding how they have
    followed through on their commitment to initiate at least seven
    hours a week of local news.

68. *Rebutting the Presumption*. To the extent that a proposed
    combination does not qualify for a positive presumption, it will
    have a high hurdle to cross to win Commission approval. Similarly,
    parties objecting to a transaction with a positive presumption will
    have a high hurdle to persuade the Commission that the transaction
    should not be approved. We 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.[^220] Our
    analysis of the following four factors will inform this
    determination: (1) the extent to which cross-ownership will serve to
    increase the amount of local news disseminated through the affected
    media outlets in the combination; (2) whether each affected media
    outlet in the combination will exercise its own independent news
    judgment; (3) the level of concentration in the Nielsen DMA; and (4)
    the financial condition of the newspaper or broadcast station, and
    if the newspaper or broadcast station is in financial distress, the
    owner's commitment to invest significantly in newsroom
    operations.[^221] We believe assessment of these factors in the
    context of each specific transfer application will enable the
    Commission to preserve and potentially increase localism and
    viewpoint diversity, while also providing the means for newspapers
    and broadcast stations to achieve the synergies available from
    cross-ownership.[^222]

69. *Increased Local News*. The record suggests that some entities
    operating both a newspaper and a broadcast television station may
    have achieved superior news operations that benefit local audiences.
    For example, Belo maintains that its experience as both the
    publisher of *The Dallas Morning News* and the owner and operator of
    WFAA-TV in Dallas has been the catalyst for increasing the amount
    and quality of local news and public affairs coverage, as well as
    the number of local news outlets available to Dallas
    residents.[^223] Belo states that the fact that it co-owned media
    outlets in Dallas permitted it to host and cover the October 2006
    gubernatorial debate and broadcast them both in English and
    Spanish.[^224] Similarly, Media General asserts that the pooling of
    news-gathering resources has significantly increased the output of
    news content, ensuring the delivery of better, faster, and deeper
    news in Tampa, Florida, where it owns *The Tampa Tribune* and
    WFLA-TV.[^225] The convergence of newspaper and broadcast outlets,
    according to Media General, has led to more news specials and
    investigative reports, more so than either outlet could have
    produced on its own.[^226] Given the record, we believe it is
    appropriate that we evaluate whether a proposed newspaper/broadcast
    combination will increase the amount of local news disseminated and
    thereby further the goal of localism.

70. We reiterate that establishing and maintaining a system of local
    broadcasting that is responsive to the unique interests and needs of
    individual communities is, as the Commission has emphasized, an
    extremely important policy goal.[^227] In the *2002 Biennial Review
    Order*, we noted that "Federal regulation of broadcasting has
    historically placed significant emphasis on ensuring that local
    television and radio stations are responsive to the needs and
    interests of their local communities."[^228] And,
    in reviewing whether broadcasters have carried out their obligations
    to serve the public interest with responsive programming, the
    Commission has historically considered their news and public affairs
    programming to be of particular importance.  We remain committed to
    promoting localism and local service by media outlets and intend
    that our actions here will foster and promote increased localism
    among media outlets. Therefore, when determining whether a
    cross-ownership combination would increase the amount of local news,
    we will be looking for a significant increase in the broadcast of
    local news. As previously discussed, we consider a significant
    increase to be at least seven hours a week of additional news in the
    market. The term "local news" includes traditional newscasts as well
    as programming that addresses issues of local political interest or
    issues of public importance in the market. In addition, we will
    examine the resources that the broadcast entity will be devoting to
    the coverage of local news, such as the hiring of additional
    reporters and newsroom staff. As noted in the previous section, our
    data show that television stations ranked fifth and below in their
    DMAs are less likely to carry local news, and therefore hold the
    potential, as a result of a merger with a newspaper, to provide
    additional news programming to the local community.[^229] It is thus
    appropriately an important factor that we will consider in
    determining whether to allow a newspaper/broadcast combination. The
    weight we afford this factor will be commensurate with the amount of
    new local news the cross-owned combination would be committing to
    airing.

71. *Independent News Judgment.* In adopting the newspaper/broadcast
    cross-ownership ban in 1975, the Commission stated that, "it is
    unrealistic to expect true diversity from a commonly owned
    station-newspaper combination. The divergency of their viewpoints
    cannot be expected to be the same as if they were antagonistically
    run."[^230] Today's record now reveals, however, that some co-owned
    newspaper/broadcast facilities are capable of maintaining separate
    editorial operations. Thus, Belo explains that although its
    television station and newspaper share newsgathering and promotional
    resources, WFAA-TV is "generally not privy" to the editorial
    positions to be taken by *The Dallas Morning News.*[^231] We agree
    that the public is not well served when the news disseminated by a
    cross-owned newspaper and broadcast station represent a mirror image
    in their coverage of issues of vital importance to the public. We
    adhere to the Commission's long-standing view that independence of
    news sources is important to civic life and the public welfare.
    Therefore, in evaluating this factor, the Commission will analyze
    whether applicants have demonstrated that their respective media
    outlets will exercise independent news and editorial judgment.[^232]
    In order to satisfy this second factor, commonly owned media outlets
    must each maintain their own separate news and editorial staff. In
    other words, the combined entity must have two separate editorial
    decisionmakers exercising independent judgment as to what news will
    be carried by each outlet. Also, the combined entity must maintain
    separation among any personnel who control editorials and
    commentaries, such as editorial boards. This requirement will help
    ensure that each outlet will make its own independent and separate
    judgment concerning what news to air and what news to publish. Other
    factors that will help demonstrate compliance with this factor
    include staff titles and descriptions of duties, facilities and
    technologies management; organizational charts; and any other proof
    that cross-owned outlets will exercise independent editorial
    decisions.[^233] Assurance of the continued exercise of independent
    news judgment by each outlet will help to indicate that a particular
    combination would not undermine the goal of diversity of viewpoint.
    We note that compliance with this factor should not preclude the
    economic and operational synergies that we aim to encourage by
    allowing certain combinations. Accordingly, maintaining editorial
    independence does not mean that a combination will be unable to take
    advantage of the potential opportunity for additional newsgathering
    that cross-ownership may provide or require that the outlets abstain
    from sharing some newsgathering inputs. It is critical, however,
    that the broadcast outlet and the newspaper separately and
    independently decide their editorial positions, what stories to air
    and publish, how to edit those stories, and whether and how
    prominently to air or display them.

72. *Market Concentration.* The third factor in our public interest
    determination is the level of concentration in the Nielsen DMA, that
    is, the extent to which media outlets in a particular market compete
    in the provision of local news and information to consumers within
    that market and the impact that the proposed combination would have
    on such concentration. Examining the level of concentration existing
    in the market at the time the Commission undertakes its review of a
    transaction serves both our diversity and competition goals. Indeed,
    such considerations informed our decision above to limit the
    positive presumption to the top 20 markets and to combinations
    involving non-top four television stations. Nevertheless, we
    recognize that circumstances unique to a particular market could
    produce a transaction that would result in a market that is too
    concentrated despite being in the top 20, as well as the opposite in
    a market below the top 20. Reviewing this factor with respect to
    each transaction will ensure that we consider this important measure
    on a case-by-case basis, taking into account both characteristics of
    the market and the nature of the proposed combination. Many
    commenters express concern about the level of concentration in local
    media markets, and the resulting effect of that concentration on the
    viability of smaller, independently owned outlets.[^234] CWA asserts
    that most markets have only three to four broadcast outlets and one
    newspaper.[^235] As such, CWA maintains that mergers between news
    outlets may harm diversity of ownership in local markets and reduce
    the number of independent voices.[^236] Other commenters have stated
    that media consolidation has spurred the financial distress of
    independently owned outlets due to a decrease in advertising
    revenue, and other negative economic factors.[^237] We believe it
    appropriate that we ascertain the level of concentration in local
    markets in assessing the public interest *bona fides* of any
    transaction that will result in newspaper/broadcast cross-ownership.

73. In evaluating this factor, we will conduct a fact-specific inquiry
    into the characteristics of the market in question as well as
    characteristics of the proposed combination. In particular, we will
    look at the number of independent voices that would remain in the
    market after the combination as well as the relative power and
    influence of those voices and the outlets that the applicant
    proposes to own. Thus, we note that proposed newspaper/radio
    combinations will generally be less likely to raise concentration
    concerns than proposed newspaper/television combinations in light of
    the fact that radio is generally not as influential a voice as is
    television.[^238] This, of course, will affect our overall analysis
    and make it less difficult for newspaper/radio combinations to
    overcome the negative presumption. We will not employ any single
    metric, such as the Diversity Index, because, as the Commission has
    learned from experience, there are too many qualitative and
    quantitative variables in evaluating different markets and
    combinations to reduce the task at hand to a precise mathematical
    formula. Measuring concentration across platforms in the local news
    and information market for the purposes of preserving diversity is
    not akin to measuring concentration in the market for automobiles or
    washing machines for antitrust purposes. Moreover, the record does
    not reveal any "silver bullet" formula in this regard. We stress,
    however, that in future adjudicative proceedings addressing proposed
    combinations parties are free to point to any metric of their
    choosing in arguing that a proposed combination either should or
    should not be approved. Some parties, for example, may wish to
    provide an analysis of concentration in the local advertising market
    or local news market. Or, as CU/CFA suggest, others may attempt to
    apply the Herfindahl-Hirschman Index (HHI) to the local media market
    in a manner informed by the Department of Justice's Merger
    Guidelines. Any such submission should, of course, include a
    thorough explanation of the metric proposed for use and why that
    metric is relevant to the task of evaluating whether a particular
    combination will or will not unduly undermine diversity and increase
    concentration in the provision of news and information in the local
    media market. Such submissions will then be subject to comment by
    others and evaluated by the Commission as part of the adjudicative
    process.

74. *Financial Condition.* We will evaluate whether a newspaper or a
    broadcast station in a proposed combination is in financial
    distress. To show financial distress, the applicant will have to
    show that either the newspaper or the broadcast station is operating
    at a loss. An applicant wishing to make a showing of financial
    distress may do so through tax filings, earnings statements, annual
    reports or other records showing that the newspaper has had several
    years of losses. The Commission may assess the reasonableness of the
    showing by comparing data regarding the newspaper's or the broadcast
    station's expenses with industry averages. In the case of a
    broadcast station, we will take into consideration factors set forth
    in our failed or failing waiver standards. Specifically, we will
    consider the situation in which a station has been struggling for an
    extended period of time both in terms of its audience share and in
    its financial performance. A failed or failing station would rarely
    have the resources to provide local news programming, and often
    struggles to provide significant local programming at all. Thus,
    allowing a "failing" or "failed" station to join with a stronger
    newspaper outlet can improve its facilities and programming
    operations, thus benefiting the public interest.[^239] With regard
    to the newspaper industry, we are cognizant of the significant
    turmoil that has erupted since we last embarked on a media ownership
    review.[^240] The rapidly evolving media environment, brought on in
    large part by new media, has wrought dramatic economic consequences
    for newspapers. The record indicates that the financial downturn for
    newspapers has in recent years been significant. NAB states that
    newspapers are suffering from declining circulation, increasing
    printing and production costs, and advertising revenues that are
    stagnant at best, in large part due to the movement of advertising
    business to other media, including Internet competitors.[^241]
    Entities that have cross-owned newspaper and broadcast facilities,
    such as Belo, Tribune, and Media General, have documented on the
    record the unstable financial circumstances in which newspapers
    currently operate.[^242] In light of this evidence, it is
    appropriate that we consider as part of our public interest analysis
    the financial condition of newspapers and broadcast facilities. We
    seek to maintain the vitality of media voices and ensure their
    continued service to the public. To the extent that our
    newspaper/broadcast cross-ownership rule forecloses a viable avenue
    for a struggling newspaper or a broadcast station to prevent the
    loss of a source of local programming, our rule would be
    undermining, rather than promoting, our goals of competition,
    localism, and diversity. Allowing a struggling newspaper or
    broadcast station to combine with a stronger outlet can, under
    certain circumstances, improve its ability to provide local news and
    information, thus benefiting the public interest.

75. In those instances where a newspaper or broadcast entity makes a
    showing of financial distress, we will look for evidence of the
    owner's commitment to invest significantly in newsroom operations as
    a result of a proposed combination. We recognize the concern
    expressed by some commenters that cross-owned entities may
    experience a cut in staff or news operations in order to maximize
    economic synergies.[^243] Indeed, the pressure to take such steps
    may be particularly acute when a newspaper is in financial distress.
    On the other hand, there is also evidence on the record
    substantiating that when newspapers and broadcast stations are
    permitted to consolidate, the combination results in an increase in
    the amount and quality of local news and public affairs programming.
    Going forward, we will evaluate whether adequate investment in
    newsroom operations will be allocated and expended in deciding
    whether to grant approval for such newspaper/broadcast combinations.
    This factor is particularly relevant where the entity is operating
    under financial constraints.[^244] Therefore, we expect applicants
    to explain in detail their plans and commitments to enhance the news
    operations of the broadcast and newspaper outlets following transfer
    of control and state when those measures will be implemented.[^245]

76. *Additional Matters*. As an initial matter, we do not require
    divestiture of the combinations grandfathered in the 1975 decision;
    rather these combinations remain grandfathered. In the context of
    the 1975 rulemaking, the Commission evaluated each of the existing
    newspaper/broadcast combinations to determine whether divestiture
    was appropriate in light of its decision to adopt the
    cross-ownership ban.  Even in that more restrictive environment, the
    Commission felt that requiring the divestiture of certain
    combinations would be harmful and that certain combinations remained
    appropriate and consistent with its localism, diversity, and
    competition goals. Thus, the Commission required divestiture only in
    the most "egregious" cases (17 out of approximately 150) and
    grandfathered or granted waivers for other existing combinations. In
    doing so, the Commission did not simply grandfather all existing
    combinations as a matter of due course; instead, it established
    standards and criteria it applied to evaluate each existing
    combination.[^246] We have no reason to disrupt those decisions.
    Similarly, all permanent waivers from the prior rule that previously
    have been granted will continue in effect under the new rule.[^247]
    Given that the Commission previously determined that these
    combinations warranted a waiver from the prior more restrictive
    rule, we see no reason why such combinations should not continue to
    receive a waiver under our less restrictive rule. Moreover, we
    believe that requiring divestitures of these combinations would
    disrupt longstanding symbiotic relationships that have provided
    tangible public interest benefits for affected communities.

77. We note that several temporary waivers of our former
    newspaper/broadcast cross-ownership rule are still pending awaiting
    the conclusion of our quadrennial review proceeding.[^248] We will
    grant a limited number of pending waiver requests to permit the
    continuance of existing combinations of a newspaper and a single
    broadcast station that were formed by acquisitions occurring after
    the date of the broadcast station's last renewal because we find
    that the public interest would be served by such waivers. We thus
    grandfather these combinations in the same manner as the Commission
    did in 1975. All of these combinations were acquired prior to 2001.
    As the Commission has previously recognized, "divestiture introduces
    the possibility of disruption for the industry and hardship for
    individual owners."[^249] One commenter notes that "there is
    potential for both harm to the public from the disruption from the
    divestiture as well as harm to employees and station and newspaper
    operations to consider in requiring divestiture."[^250]
    Specifically, in the following cases, we have determined that the
    public interest warrants a waiver in light of the synergies that
    have already been achieved from the newspaper/broadcast station
    combination,[^251] the new services provided to local communities by
    the combination, the harms (reviewed above) associated with required
    divestitures, the prolonged period of uncertainty surrounding the
    status of the newspaper/broadcast cross-ownership ban, and the
    length of time that the waiver request has been pending: Gannett's
    combination in Phoenix[^252] as well as Media General's combinations
    in Myrtle Beach-Florence, South Carolina[^253]; Columbus,
    Georgia[^254]; Panama City, Florida[^255], and the Tri-Cities,
    Tennessee/Virginia DMA.[^256]

78. Where a pending waiver request involves an existing combination
    consisting of more than one newspaper and/or more than one broadcast
    station[^257] or an entity has been granted a waiver to hold such a
    combination pending the completion of this rulemaking, [^258] we
    will afford the licensee 90 days after the effective date of this
    order to either amend its waiver/renewal request or file a request
    for permanent waiver. Because each of these combinations involves
    multiple newspapers and/or multiple broadcast stations, they
    potentially raise heightened diversity concerns, and it would be
    inappropriate to grant these requests or grandfather these
    combinations across-the-board. Rather, we will examine them on a
    case-by-case basis. In its filing with the Commission, the licensee
    should address the factors considered in this order and the impact
    that the combination has on the diversity of independent voices in
    the market, particularly as it affects news and information
    programming. We will hold pending waiver requests and renewal
    applications in abeyance until we receive an appropriate amendment.
    With respect to current temporary waivers that have been granted
    pending the completion of the rulemaking proceeding, those waivers
    will be temporarily extended pending our action on requests for
    permanent waivers filed within the time frame set forth above.

79. We also address one additional matter related to the processing of
    waiver requests. UCC argues that the modified rule will not provide
    adequate notice of proposed newspaper/broadcast combinations. We
    note that applications for Commission approval of proposed
    newspaper/broadcast combinations are subject to the local public
    notice filing requirements of Section 73.3580 of the Commission's
    rules. Nevertheless, to further ensure adequate local public notice,
    the Commission will flag such applications in its public notices as
    seeking waiver of the newspaper/broadcast cross-ownership rule
    pursuant to Section 73.3555(d) of the Commission's rules.

# Radio/Television Cross-Ownership Rule

80. As explained in more detail below, we retain the current
    radio/television cross-ownership rule. The 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.[^259] In contrast to the newspaper/broadcast
    cross-ownership ban, this rule has been substantially relaxed over
    the years.[^260]

## Background

81. In adopting the current rule in 1999, the Commission explained that
    it balanced diversity and competition concerns with the desire to
    permit broadcasters and the public to realize the benefits of common
    ownership.[^261] Some commenters argued for the rule's elimination,
    but the Commission found that it "continues to be necessary to
    promote a diversity of viewpoints in the broadcast media."[^262] In
    the *2002 Biennial Review Order*, the Commission eliminated the
    radio/television cross-ownership rule in its entirety by finding
    that it no longer remained "necessary in the public interest to
    ensure competition, diversity or localism."[^263] The Commission
    reasoned that the removal was warranted because "diversity and
    competition goals \[would\] be adequately protected by the local
    ownership rules" adopted in that proceeding.[^264] These rules
    included cross-media limits that were "specifically designed to
    protect diversity of viewpoint in those markets \[where\]
    consolidation of media ownership could jeopardize such
    diversity."[^265] The cross-media limits were challenged in
    *Prometheus*.[^266] The *Prometheus* court concluded that although
    "the Commission's decision to replace its cross-ownership rules with
    cross-media limits" was "not of itself constitutionally flawed and
    \[did\] not violate § 202(h)," it would not uphold the cross-media
    limits because the "Commission \[did\] not provide a reasoned
    analysis to support the limits that it chose."[^267]

## Discussion

82. We retain the radio/television cross-ownership rule currently in
    effect[^268] to provide protection for diversity goals in local
    markets and thereby serve the public interest. Our conclusion in the
    *2002 Biennial Review Order* that the radio/television
    cross-ownership rule was no longer necessary to ensure viewpoint
    diversity was based in large part on our adoption of the cross-media
    limits in that proceeding.[^269] Now that the court has invalidated
    the cross-media limits, we must adopt diversity protection
    provisions to act in their place, and therefore retain the current
    radio/television cross-ownership rule.[^270] In doing so, we
    reaffirm the Commission's conclusion that "fostering the
    availability of diverse viewpoints remains an important policy goal,
    and that diversity of ownership promotes diversity of
    viewpoints."[^271]

83. Several commenters urge us to maintain or tighten the
    radio/television cross-ownership rule.[^272] We agree with the AFTRA
    that the radio/television cross-ownership rule is an "essential
    tool\[\] for protecting the availability of diverse editorial
    perspectives and entertainment programs to local communities."[^273]
    We also remain mindful of radio/television combinations that could
    potentially hamper individual editorial content and therefore act to
    retain limits on such combinations.[^274] We see no reason to
    tighten the rule at this time, however, and thereby upset the
    balance the rule strikes between the protection of diverse
    viewpoints and the "efficiencies" and "public service benefits" that
    can result from "joint ownership and operation of both television
    and radio stations in the same market."[^275]

84. By the same token, we disagree with those commenters who urge us to
    further relax or eliminate the radio/television cross-ownership
    rule.[^276] The record does not indicate that local radio and
    television ownership limits provide sufficient protection to assure
    a diversity of viewpoints in those media markets.[^277] Local
    service-specific limits are chiefly concerned with competition and
    rivalry among entities providing the same service. In contrast,
    cross-ownership rules aim to maintain a vibrant marketplace of ideas
    to ensure a diversity of editorial content. What the Commission said
    in 1999 remains true today -- the fact that "\[t\]he public
    continues to rely on both radio and television for news and
    information" supports the conclusion that "the two media both
    contribute to the 'marketplace of ideas' and compete in the same
    diversity market."[^278] Because the two media "serve as substitutes
    at least to some degree for diversity purposes," there remains a
    need to retain a cross-ownership rule "to ensure that viewpoint
    diversity is adequately protected."[^279] The Commission's
    determination in the *2002 Biennial Review Order* that the
    radio/television cross-ownership rule was no longer necessary to
    provide such protection for diversity was based on the adoption of
    cross-media limits specifically designed to provide adequate
    alternative protection. Because the cross-media limits have now been
    vacated, we have determined to retain the radio/television
    cross-ownership rule to maintain the status quo.

85. We are not persuaded by Clear Channel's assertion that Congress'
    repeal of the cable/broadcast cross-ownership ban calls for us to
    now repeal the radio/television cross-ownership rule.[^280] If
    Congress had desired to repeal or modify the radio/television
    cross-ownership rule, it could have done so explicitly; its failure
    to do so leaves us free to retain or eliminate the rule as the
    public interest warrants.[^281]

86. We also reject Clear Channel's contention that the radio/television
    cross-ownership rule conflicts with the 1996 Act "to the extent"
    that such a rule would "shrink an entity's right to own radio
    stations" below the level permitted by the local radio ownership
    levels specified in Section 202(b).[^282] It is Section 202(d), not
    Section 202(b), that addresses the Commission's radio/television
    cross-ownership rule. That section only requires the Commission to
    extend its waiver policy governing its one-to-a-market ownership
    rules "to any of the top 50 markets, consistent with the public
    interest, convenience, and necessity"; in all other respects the
    Commission's authority to establish or retain a radio/television
    cross-ownership rule remains unchanged.[^283] We therefore retain
    the radio/television cross-ownership rule currently in effect in
    order to provide protection for diversity goals in local markets and
    thereby serve the public interest.

# Local Television Ownership Rule

87. We find that restrictions on common ownership of television stations
    in local markets continue to be necessary in the public interest to
    protect competition for viewers and in local television advertising
    markets. As discussed below, we conclude that, in order to preserve
    adequate levels of competition within local television markets, the
    local television ownership rule as it is currently in effect should
    be retained. Accordingly, an entity may own two television stations
    in the same DMA if: (1) the Grade B contours of the stations do not
    overlap; or (2) at least one of the stations in the combination is
    not ranked among the top four stations in terms of audience share,
    *and* at least eight independently owned and operating commercial or
    non-commercial full-power broadcast television stations would remain
    in the DMA after the combination. To determine the number of voices
    remaining after the merger, the Commission counts those broadcast
    television stations whose Grade B signal contours overlap with the
    Grade B signal contour of at least one of the stations that would be
    commonly owned.[^284]

## Background

88. Unlike the newspaper/television cross-ownership rule, which has not
    been modified since 1975, the local television ownership rule was
    relaxed as recently as 1999. In *Sinclair*, the U.S. Court of
    Appeals for the District of Columbia Circuit reviewed the
    Commission's 1999 decision modifying the local television ownership
    rule to the form currently in effect.[^285] The court held that the
    Commission had adequately explained how the rule advanced its goals
    of preserving diversity of viewpoints and competition.[^286] In
    reviewing the eight-voice count threshold, it acknowledged that the
    Commission "has wide discretion to determine where to draw
    administrative lines,"[^287] that "\[c\]hoosing the number eight and
    defining 'voices' are quintessentially matters of line drawing
    invoking the Commission's expertise in projecting market
    results\[,\]"[^288] and that the court is generally "unwilling to
    review line-drawing performed by the Commission unless a petitioner
    can demonstrate that the lines drawn \... are patently unreasonable,
    having no relationship to the underlying regulatory problem."[^289]
    While the court did not decide whether eight voices is an
    appropriate numerical limit, it held that the Commission had not
    demonstrated that the exclusion of non-broadcast media from the
    eight-voice test was "necessary in the public interest" under
    Section 202(h) of the 1996 Act.[^290] Accordingly, it remanded the
    rule for further consideration.

89. After analyzing the rule in the *2002 Biennial Review Order*, the
    Commission determined that the existing rule was not necessary to
    promote viewpoint diversity.[^291] Moreover, the Commission found
    that the restrictions did not foster its goals of localism and
    program diversity.[^292] The Commission concluded, however, that
    restrictions on local television ownership remained necessary to
    promote competition among local broadcast stations.[^293] It
    concluded that there are two potential competitive harms that may be
    caused by a single firm owning multiple television stations in a
    local market. First, multiple ownership may result in "unilateral
    effects," *i.e.,* one firm acquiring multiple licenses and finding
    it profitable to alter its competitive behavior unilaterally to the
    detriment of viewers.[^294] Second, it concluded that multiple
    ownership may lead to "coordinated effects," *i.e.,* inducing a
    joint change in competitive behavior by market participants that
    harms viewers.[^295]

90. The Commission decided in the *2002 Biennial Review Order* to revise
    the local television ownership rule to permit an entity to own up to
    two television stations in markets with 17 or fewer television
    stations, and up to three television stations in markets with 18 or
    more television stations.[^296] The Commission retained the
    prohibition on combinations involving more than one station ranked
    among the top four in the market, thus prohibiting combinations in
    markets with four or fewer television stations.[^297] The Commission
    eliminated consideration of overlapping Grade B contours,[^298]
    however, and decided to look instead only at whether a station is
    assigned by Nielsen to a DMA.[^299] The *2002 Biennial Review Order*
    also modified the Commission's criteria for waiver of the local
    television ownership rule.[^300] Although the Commission stated that
    it would continue to allow entities to seek a waiver if at least one
    of the stations in the proposed combination is failed, failing, or
    unbuilt,[^301] it removed the requirement that the waiver applicant
    demonstrate that there is no buyer outside the market willing to
    purchase the station at a reasonable price.[^302]

91. *The Prometheus Decision*. On review in *Prometheus*, the court
    upheld the Commission's determination that "broadcast media are not
    the only media outlets contributing to viewpoint diversity in local
    markets."[^303] In light of its decision to remand the Commission's
    numerical limits, the court found that it need not decide "the
    degree to which non-broadcast media compensate for lost viewpoint
    diversity to justify the modified \[local television\] rule."[^304]
    In addition, in light of evidence in the record, including evidence
    that "commonly owned television stations are more likely to carry
    local news than other stations" and studies showing that
    "consolidation generally improved audience ratings," the court
    rejected petitioners' contention "that the Commission's finding of
    localism benefits from consolidation was unsupported."[^305] The
    court also upheld the Commission's decision to retain the top
    four-ranked station restriction, stating that it "must uphold an
    agency's line-drawing decision when it is supported by evidence in
    the record."[^306] It found "ample evidence in the record" to
    support the Commission's reliance on a "cushion" of audience share
    percentage points between the fourth- and fifth-ranked stations in
    most markets to restrict combinations among the top four-ranked
    stations "as opposed to the top three or some other number."[^307]

92. Nonetheless, the court remanded the numerical limits in the new rule
    for further justification. The limits were premised on the need to
    ensure six equal-sized competitors. The size of an owner was tied to
    the number of stations owned, rather than the audience shares of
    those stations. The court held that the Commission had unreasonably
    failed to consider the audience shares of stations in setting its
    numerical limits, finding that "\[n\]o evidence supports the
    Commission's equal market share assumption, and no reasonable
    explanation underlies its decision to disregard actual market
    share."[^308] Further, although the court recognized that the
    Commission did not intend the numerical limits to be a mechanical
    application of the *DOJ/FTC Merger Guidelines*, it concluded that
    the rule was unreasonable because it would allow levels of
    concentration exceeding the 1800 HHI benchmark relied upon by the
    Commission in setting its numerical limits.[^309]

93. The court also remanded for further consideration the Commission's
    elimination of the requirement to demonstrate that no out-of-market
    buyer is reasonably available when seeking a failed, failing, or
    unbuilt television station waiver. The court found that "in
    repealing the \[rule\] without any discussion of the effect of its
    decision on minority television station ownership\[,\]" the
    Commission "entirely failed to consider an important aspect of the
    problem."[^310]

94. *Issues Raised by Commenters.* Some commenters support retention of
    the rule in its current form.[^311] Other commenters suggest that
    the current rule should be tightened.[^312] On the other hand,
    several commenters appear to prefer elimination of the rule.[^313]
    Still other commenters ask the Commission to loosen the rule in some
    manner.[^314]

95. Several commenters identify negative effects of consolidation they
    claim would result if the Commission repealed the local television
    ownership rule.[^315] Other commenters extol the competitive
    benefits that would result from the ability to merge television
    stations.[^316] Some commenters seek elimination of the top four
    prohibition.[^317] Some commenters favor a failed station
    solicitation rule,[^318] while others oppose it.[^319] Other
    commenters provide no specific guidance as to the type of rule, if
    any, that the Commission should adopt.[^320]

## Discussion

96. As discussed below, we are persuaded from the evidence in the record
    that the current rule is consistent with the public interest.
    Therefore, we will continue to allow an entity to own two television
    stations in the same DMA if: (1) the Grade B contours of the
    stations do not overlap; or (2) at least one of the stations in the
    combination is not ranked among the top four stations in terms of
    audience share, *and* at least eight independently owned and
    operating commercial or non-commercial full-power broadcast
    television stations would remain in the DMA after the combination.
    To determine the number of voices remaining after the merger, the
    Commission will continue to count those broadcast television
    stations whose Grade B signal contours overlap with the Grade B
    signal contour of at least one of the stations that would be
    commonly owned. With respect to the waiver standard for the local
    television ownership rule, we will reinstate our requirement that a
    waiver applicant demonstrate that there is no buyer outside the
    market willing to purchase the station at a reasonable price.[^321]

97. We base our decision on our assessment that the Commission's local
    television ownership rule promotes competition for viewers and
    advertisers within local television markets. The public is best
    served when numerous rivals compete for a viewing audience. In the
    video programming market, competitors profit by attracting new
    audiences and by attracting existing audiences away from their
    competitors. Competition thus provides an incentive to television
    stations to invest in better programming and to provide programming
    that is preferred by viewers. The local community benefits from
    competition among broadcast television stations in the form of
    higher quality programming provided to viewers. As the Commission
    concluded in the *2002 Biennial Review Order*, we cannot rely on
    competition from cable programmers to respond to local needs and
    interests because most cable programming is provided by cable
    networks, and those networks respond primarily to national and
    regional forces. Local broadcast television stations have incentives
    to respond to conditions in local markets, and those incentives may
    be diminished by mergers between stations that reduce competition to
    anticompetitive levels. Competition among local broadcast television
    stations is also necessary to preserve competition for advertising
    by local businesses that want to advertise their products on
    television. Lower advertising costs benefit consumers by promoting
    efficiency and by allowing firms to pass the savings on to consumers
    of the advertised products. In the *2002 Biennial Review Order,* the
    Commission determined that the exercise of market power in broadcast
    television markets would result in targeted and non-uniform price
    increases to those advertisers that do not have good substitutes for
    broadcast television, without raising prices for those advertisers
    that do have good substitutes for broadcast television.[^322]

98. We decline to tighten the local television ownership rule, as
    requested by some commenters. We recognize that owning a second
    in-market station can result in substantial savings in overhead and
    management costs and can allow the local broadcaster to innovate by
    spreading its fixed costs and operating capital over a larger number
    of operating units and to better compete with non-broadcast content
    providers for advertising dollars.[^323] We find that these
    potential significant benefits of duopolies permitted under the
    parameters of the rule, in markets with a plethora of diverse
    voices, outweigh commenters' speculative claims that duopolies harm
    diversity and competition.

99. We find that a minimum of eight independently owned-and-operated
    television stations is appropriate to ensure that there will be
    robust competition in the local television marketplace.[^324] As an
    initial matter, the "eight voices" test will ensure that each market
    includes four stations affiliated with the four major networks in
    each market (*i.e*., ABC, NBC, CBS, and Fox), plus at least an equal
    number of independently owned-and-operated broadcast television
    stations that are not affiliated with a major network. Preserving
    the independent ownership in each local market of four stations that
    are neither owned by or affiliated with a major network nor commonly
    owned with a network affiliate in that market will help to ensure
    that local television stations, spurred by competition, will provide
    dynamic and vibrant alternative fare, including local news and
    public affairs programming. Recognizing the vital competitive role
    played in local television markets by stations that are not owned by
    or affiliated with the major networks' stations, we believe that it
    is important that there be a sufficient number of such stations that
    are truly independent of the major network stations in each market
    and that will therefore vigorously compete with each of the major
    network stations for viewers. Such vibrant competition will improve
    the programming aired by both independent stations and major network
    stations. In addition, we believe that the eight voices test is
    supported by the general structure of the local television
    marketplace. While our 2003 rule was premised on maintaining the
    presence of six equal-sized competitors in the marketplace, the
    Third Circuit in *Prometheus* pointed out that this assumption of
    equal-sized competitors was flawed. Indeed, the Commission itself
    has found that there is generally a significant gap between the top
    four stations in a market and the remaining stations. In light of
    this concentration among the top four stations in most markets, we
    believe that it is prudent to require the presence of at least four
    (rather than two) competitors not affiliated with a major network in
    order to ensure vibrant competition in the local television
    marketplace.[^325] We believe that such competition will ultimately
    benefit the public by spurring more innovative programming and more
    programming responsive to local needs and interests.

100. For purposes of the local television ownership rule, we include
     only full-power television stations in counting voices because our
     primary goal in preserving the rule is to foster competition among
     local television stations. We conclude that the local television
     ownership rule is no longer necessary to foster diversity because
     there are other outlets for diversity of viewpoint in local
     markets, and a single-service ownership restriction is not
     necessary to foster diversity. Therefore, although we recognize
     that other types of media, such as radio, newspapers, cable, and
     the Internet, contribute to viewpoint diversity within local
     markets,[^326] we do not believe they should be counted as voices
     under the local television ownership rule.[^327] In *Sinclair*, the
     court found that the Commission failed to provide an adequate
     explanation for defining "voices" differently in the
     radio-television cross-ownership rule and the local television
     ownership rule.[^328] We believe that, given our conclusion that
     the local television ownership rule is necessary to preserve
     competition among broadcast television stations in local markets,
     it is appropriate to limit our voices test to television stations
     in that rule. In contrast, because the cross-ownership rules are
     designed to foster viewpoint diversity, it is appropriate within
     the context of those rules to consider additional sources of
     viewpoint diversity.[^329]

101. We recognize that the Commission concluded in the *2002 Biennial
     Review Order* that the current local television ownership rule was
     not necessary to protect competition given "the competitive impact
     of other video programming outlets" on local broadcasters.[^330] We
     now reverse that determination because we find that eliminating the
     rule could harm competition among broadcast television stations in
     local markets. CWA, for example, asserts that "the Commission has
     ample justification for retaining the rule."[^331] AFL-CIO states
     that the Commission should retain the rule currently in effect and
     asserts that failure to do so would trigger multiple station
     mergers in local markets, resulting in a loss of newscasts and
     shared news product.[^332] We agree with UCC when it states that
     competition, and not concentration of market players, leads to
     better programming.[^333] Because we are retaining the rule
     primarily to foster competition among local television stations,
     our determination regarding the continued need for the rule does
     not depend on the competitive impact of other video programming
     outlets.[^334] While other outlets contribute to the diversity of
     voices in local markets, we still find that it is necessary in the
     public interest to ensure that there are at least eight
     independently owned local television stations in order to ensure
     robust competition for local television viewers and the continued
     provision of video programming responsive to the needs and interest
     of viewers in local markets.

102. As we found in the *2002 Biennial Review Order*, we continue to
     believe that combinations of top four stations should be prohibited
     because mergers of those stations would be the most deleterious to
     competition. In the *2002 Biennial Review Order*, the Commission
     determined that mergers of stations owned by any of the top four
     firms often would result in a single firm with a significantly
     larger market share than the others.[^335] The Commission
     determined that combinations among the top four would reduce
     incentives to improve programming that appeals to mass
     audiences.[^336] We find that the top four prohibition remains
     necessary to prevent deleterious levels of concentration. The top
     four prohibition minimizes the likelihood that the market share of
     two merged stations will significantly overtake the market share of
     the largest station in a local market, which, as discussed in the
     *2002 Biennial Review Order*, could create welfare harms.[^337] We
     also find that, in general, a significant "cushion" of audience
     share percentage points continues to separate the top four stations
     from the fifth-ranked stations. As noted above, the number of
     locally owned stations remained fairly constant, with only a slight
     increase in the number of stations and a slight decrease in the
     number of owners, from 2002 to 2005. In addition, allowing two top
     four stations to merge would harm competition in the local
     broadcast television advertising market because the top four
     networks (whose affiliates tend to be the top four broadcasters in
     a given market) enjoy a large and growing advantage over other
     broadcasters with regard to advertising volume and prices.
     Accordingly, we find that comments suggesting that the rule is no
     longer justified are unpersuasive. Prohibiting mergers between the
     top four television stations in a market prevents well-established
     competitive harms.

103. In the *2002 Biennial Review Order*, we also concluded that the
     current rule potentially threatens local programming and that the
     efficiencies to be gained by relaxing the rule could result in a
     higher quantity and quality of local news and public affairs
     programming.[^338] We find that the record now before us is
     unpersuasive regarding the effects of multiple ownership on local
     programming. Some commenters argue that multiple ownership of
     television stations enhances local programming,[^339] and others
     claim the opposite.[^340] We reject as contrary to the record
     evidence UCC's contention that there is little evidence that
     corporations reinvest efficiency-enabled cost-savings into better
     local programming.[^341] Belo states that multiple ownership has
     permitted it to develop and produce innovative news products
     because it can spread its fixed costs and operating capital over a
     larger number of operating units.[^342] Entravision contends that
     group ownership creates efficiencies that enable stations to
     compete more effectively with non-broadcast content providers and
     suggests that group ownership results in expanded local news and
     additional programming responsive to local communities.[^343]
     Nexstar similarly asserts that station groups can experience
     increased efficiencies, which permit more local programming and
     community involvement.[^344] NBC states that station combinations
     advance the public interest by creating efficiencies, through
     combined resources, that result in more local news offerings.[^345]
     Given our finding that there is insufficient evidence to conclude
     that the current rule threatens local programming, we conclude that
     it serves the public interest to retain it in order to preserve
     vigorous competition among local television stations.

104. We maintain the current rule's Grade B overlap provision to avoid
     disruption to current ownership arrangements and to promote
     television service in rural areas. In the *2002 Biennial Review
     Order*, the Commission eliminated the Grade B contour test for
     allowing duopolies based on its finding that the DMA is the
     relevant geographic market in which television broadcasters
     compete.[^346] The Commission's finding was not new. When the
     Commission changed the geographic scope of the rule to DMAs in
     1999, it noted that DMAs are a better measure of actual viewing
     patterns than the Grade B signal contour standard.[^347]
     Nonetheless, the Commission kept the Grade B overlap test as part
     of the rule in 1999, noting that it was not the Commission's intent
     to further restrict the duopoly rule and that the rule without the
     Grade B provision might be more restrictive in some large DMAs,
     particularly those west of the Mississippi River.[^348] The
     Commission noted that keeping the Grade B overlap provision "avoids
     disrupting current ownership arrangements involving stations in the
     same DMA with no Grade B overlap.\"[^349] In the *2002 Biennial
     Review Order*, because the Commission significantly relaxed the
     local television ownership rule, the elimination of the Grade B
     overlap provision would have been less likely to cause disruption.
     We do not revise our decision that DMAs are the more precise
     geographic markets. Nonetheless, in the instant Order, unlike in
     the *2002 Biennial Review Order*, we are not relaxing the local
     television ownership rule, and, accordingly, to avoid disruption to
     settled expectations, we retain the Grade B overlap provision.
     Furthermore, we believe that maintaining the Grade B provision will
     promote television service in rural areas by continuing to enable
     station owners to build or purchase an additional station in a
     remote corner of the DMA, beyond the reach of their Grade B signal,
     without regard to the top four/eight voices restriction.

105. *Issues Raised by the Prometheus Court on Remand.* We find that
     with one exception, the issues remanded by the *Prometheus* court
     all regarded the new local television ownership rule adopted
     in 2003. Because we reject that rule and instead retain the
     eight-voices rule, those issues are moot. The one exception is the
     court's criticism that the Commission did not consider the
     potential impact on minority owners when it eliminated the
     out-of-market buyer requirement for the waiver standard.[^350] To
     ensure that we do not negatively impact minority owners, we now
     reinstate that requirement in the waiver standard.

106. *Issues Raised in Petitions for Reconsideration.* Various parties
     sought reconsideration of the revisions the Commission made to the
     local television ownership rule in the *2002 Biennial Review
     Order*, arguing that the Commission's analysis was flawed.[^351] As
     discussed above, others appealed these revisions and, ultimately,
     the Third Circuit remanded them to the Commission.[^352] We will
     not revisit the findings on which the Commission based its earlier
     decision to revise the local television ownership rule and we
     dismiss as moot those petitions for reconsideration. Instead, as
     required by the Third Circuit's remand and by Section 202(h), we
     reexamine this rule based on the record developed in response to
     the *Further Notice* and *Second Further Notice*.

107. We also note that a number of parties sought reconsideration of the
     Commission's decision to retain the prohibition on combinations
     that would result in a single entity owning more than one station
     that is ranked among the top four stations in the market based on
     audience share.[^353] Others appealed that prohibition and,
     ultimately, it was upheld in *Prometheus*. We discussed above our
     decision to retain the top four prohibition.

108. UCC challenged our decision to consider, among other things,
     whether a merger is needed to facilitate the digital transition in
     deciding whether a waiver of this "top four" restriction is
     justified.[^354] UCC argued that such a consideration would render
     a waiver standard meaningless because every waiver applicant could
     make such an argument. We grant UCC's petition for reconsideration.
     Given that we are adopting the rule as it existed prior to the
     *2002 Biennial Review Order*, our waiver standard will not include
     this consideration.

109. Some parties sought reconsideration of our decision to eliminate
     the failed station solicitation rule, which required an applicant
     for a waiver to provide notice of the sale of the failed, failing
     or unbuilt station to potential out-of-market buyers before it
     could sell that television station to an in-market buyer.[^355] To
     the extent these petitioners argued against this action, we grant
     their petitions for reconsideration. As discussed above, we have
     decided to reinstate this requirement, as it was part of the old
     rule, and we continue to believe that it is necessary to ensure
     that out-of-market buyers, including qualified minority
     broadcasters, have notice of, and an opportunity to bid for, a
     station before it is combined with an in-market station. A waiver
     of the rule should only be permitted when no out-of-market buyer is
     interested in purchasing the station. We think that it is
     inappropriate to assume, as the Commission did in the *2002
     Biennial Review Order*,[^356] that no out-of-market buyer will be
     interested unless an effort is made to find one.

# LOCAL RADIO OWNERSHIP RULE

110. For the reasons discussed below, we conclude that the current local
     radio ownership rule, including the market definition as revised in
     the *2002 Biennial Review Order*, remains "necessary in the public
     interest" to protect competition in local radio markets. As
     directed by the *Prometheus* court, we also provide a reasoned
     justification for our decision to retain the existing numerical
     limits on local radio ownership. In addition, we deny or dismiss a
     number of pending petitions for reconsideration of the Commission's
     action concerning the local radio ownership rule in the *2002
     Biennial Review Order*. Accordingly, an entity may own, operate, or
     control (1) up to eight commercial radio stations, not more than
     five of which are in the same service (*i.e*., AM or FM), in a
     radio market with 45 or more full-power, commercial and
     noncommercial radio stations; (2) up to seven commercial radio
     stations, not more than four of which are in the same service, in a
     radio market with between 30 and 44 (inclusive) full-power,
     commercial and noncommercial radio stations; (3) up to six
     commercial radio stations, not more than four of which are in the
     same service, in a radio market with between 15 and 29 (inclusive)
     full-power, commercial and noncommercial radio stations; and (4) up
     to five commercial radio stations, not more than three of which are
     in the same service, in a radio market with 14 or fewer full-power,
     commercial and noncommercial radio stations, except that an entity
     may not own, operate, or control more than 50 percent of the
     stations in such a market.[^357]

## Background

111. In the *2002 Biennial Review Order*, the Commission retained the
     local radio numerical limits and the AM/FM service caps that
     Congress adopted in the 1996 Act.[^358] The Commission determined,
     however, that its contour-overlap methodology for defining radio
     markets and counting stations in the market was flawed as a means
     to protect competition in local radio markets.[^359] The Commission
     therefore modified the definition of a local radio market by
     replacing the contour-overlap approach with an Arbitron Metro
     market definition where Arbitron markets exist.[^360] In addition,
     the Commission decided to include noncommercial stations when
     determining the number of radio stations in a market for purposes
     of the ownership rules.[^361] The Commission also decided to
     attribute certain radio station Joint Sales Agreements ("JSA")
     toward the brokering licensee's permissible ownership totals.[^362]
     Recognizing that there could be some existing combinations of
     broadcast stations that would exceed the revised ownership limits,
     the Commission grandfathered existing combinations of radio
     stations and of radio and television stations.[^363]

112. The *Prometheus* court upheld the Commission's decision to define
     the market using Arbitron Metros, to attribute JSAs, to count
     noncommercial stations in defining the size of a market and to
     impose restrictions on the transfer of grandfathered
     combinations.[^364] Although the *Prometheus* court affirmed the
     Commission's rationale that numerical limits help guard against
     consolidation and foster opportunities for new entrants and
     therefore upheld the use of numerical limits, the court remanded
     the Commission's decision to retain the existing numerical limits.
     The court held that the limits were unsupported by the Commission's
     rationale that they ensure five equal-sized competitors in most
     markets.[^365] The court held that the Commission had failed to
     justify five as the appropriate benchmark and did not reconcile
     that benchmark with the *DOJ/FTC Merger Guidelines* it had used to
     derive the local television ownership limits. The court also stated
     that the Commission had failed to show that the limits ensured that
     five equal-sized competitors have emerged or would emerge under the
     numerical limits.[^366] The court further faulted the Commission
     for not explaining why it could not take "actual market share" into
     account when deriving the numerical limits. Finally, the court held
     that the Commission did not support its decision to retain the AM
     subcaps.[^367]

## Discussion

113. Under Section 202(h), we consider whether the local radio ownership
     rule continues to be "necessary in the public interest as a result
     of competition." In determining whether the rule meets that
     standard, we consider whether the rule serves the public interest,
     which, in radio broadcasting, traditionally has encompassed
     competition, localism, and diversity.[^368] For the reasons
     discussed below, we conclude that the current rule meets that
     standard. We also conclude that it is appropriate to maintain the
     current numerical limits on local radio ownership based on our
     examination of the record before us.

114. *Competition.* As an initial matter, we reaffirm our finding in the
     *2002 Biennial Review Order* that the relevant geographic market
     for purposes of our local radio ownership rule is the Arbitron
     Metro market. We also reaffirm our conclusions in the *2002
     Biennial Review Order* that radio broadcasters operate in three
     relevant product markets: radio advertising, radio listening, and
     radio program production.[^369] Contrary to the arguments of
     several commenters, there continues to be a lack of persuasive
     evidence that various entertainment alternatives (*e.g.,* reading
     and watching television) are good substitutes for listening to
     radio.[^370]

115. Having discussed the relevant product and geographic markets for
     radio, we now undertake our obligation under Section 202(h) to
     determine whether the current limits on radio station ownership are
     necessary to promote the public interest in competition. We
     conclude that the current rule meets that standard.

116. We reaffirm our conclusion in the *2002 Biennial Review Order* that
     the ownership tiers in the current rule represent a reasonable
     means for promoting the public interest as it relates to
     competition, and that numerical limits on radio station ownership
     help to keep the available radio spectrum from becoming "locked up"
     in the hands of one or a few owners, thus helping to prevent the
     formation of market power in local radio markets.[^371]

117. We also conclude that retention of the existing numerical limits in
     the local radio ownership rule is necessary in the public interest.
     In so concluding, we depart from the Commission's rationale in the
     *2002 Biennial Review Order* that the existing limits are
     appropriate because they allow for roughly five equal-sized firms
     in each market.[^372] Instead, we rest our decision on our
     conclusion that relaxing the rule to permit greater consolidation
     would be inconsistent with the Commission's public interest
     objectives of ensuring that the benefits of competition and
     diversity are realized in local radio markets. Making the numerical
     limits more restrictive would be inconsistent with Congress'
     decision to relax the local radio ownership limits in the 1996
     Telecommunications Act and would disserve the public interest by
     unduly disrupting the radio broadcasting industry. Based on our
     examination of the record, we are persuaded that the current
     numerical limits strike the appropriate balance.

118. The evidence in the record indicates that retaining the numerical
     limits at the current level is necessary to protect against
     excessive market concentration. Prior to 1992, our radio ownership
     rules prohibited most radio mergers.[^373] In 1992, we relaxed our
     local radio ownership rules in recognition of the fact that our
     rules prevented some firms from achieving the economies of scale
     that they needed to survive financially.[^374] Congress further
     relaxed the local radio ownership limits in the 1996
     Telecommunications Act.[^375] Congress's 1996 radio ownership rules
     revisions have had a substantial effect on the market structure of
     radio broadcasting, resulting in further consolidation of radio
     station ownership at both the national and the local level.[^376]
     By maintaining the current numerical limits, we seek to guard
     against additional consolidation of the strongest stations in a
     market in the hands of too few owners and to ensure a market
     structure that fosters opportunities for new entry into radio
     broadcasting. The number of commercial radio station owners
     declined by 39 percent between 1996 and 2007, with most of the
     decline occurring during the first few years after the 1996
     Act.[^377] Although the average number of commercial owners across
     all Arbitron radio markets currently is 9.4, the largest commercial
     firm in each Arbitron Metro market has, on average, 46 percent of
     the market's total radio advertising revenue, and the largest two
     firms have 74 percent of the revenue.[^378] In 111 of the 299
     Arbitron Metro markets, the top two commercial station owners
     control at least 80 percent of radio advertising revenue.[^379] The
     top four commercial firms also dominate audience share.[^380] And
     evidence in the record indicates that the increase in concentration
     in commercial radio markets has resulted in appreciable, albeit
     small, increases in advertising rates.[^381] All of this data in
     the record supports the conclusion that the current numerical
     limits are not unduly restrictive and that additional consolidation
     would not serve the Commission's competitive goals.[^382]

119. We also conclude that making the numerical limits more restrictive
     is not justified based on examination of the current record.[^383]
     Prior to 1992, the local radio ownership rules did not effectively
     recognize that a certain level of consolidation can be efficient.
     Given the generally difficult economic conditions at the time, the
     inability of stations to seek efficiencies through consolidation
     may have contributed to the industry's financial difficulties. We
     do not seek to undermine the benefits that consolidation has
     brought to the financial stability of the radio industry.[^384]

120. In addition, further tightening of the local radio ownership rule
     would disrupt the marketplace by necessitating widespread
     divestitures. In this regard, the Future of Music Coalition cites
     data showing that at least one radio station owner was at the
     ownership cap in 194 of 297 Arbitron Metro markets.[^385] Requiring
     widespread divestitures would undermine settled expectations in a
     market where broadcasters needed regulatory relief to achieve the
     economies of scale necessary to compete just 10 years ago.[^386]
     Many broadcasters incurred significant financial risks by acquiring
     the additional stations permitted under this rule and are creating
     business development plans for the future based on these current
     economies of scale. Decreasing the limit would thus be a
     significant shock to the market.[^387] Moreover, it could undermine
     efficiency gains that such firms otherwise might realize from their
     current economies of scale, efficiency gains that could bolster the
     stations' financial standing and increase their ability to provide
     their local communities with quality programming. We should not
     cause such a disruption absent persuasive evidence that further
     tightening of the local radio ownership rule would serve the public
     interest more effectively than the current rule.

121. Of course, we recognize that the need for widespread divestitures
     could be avoided by grandfathering existing station combinations,
     as the Commission chose to do in the *2002 Biennial Review Order*.
     Again, however, doing so here would involve negative policy
     consequences that must be avoided if possible. Grandfathering
     existing combinations would exacerbate competitive imbalances
     enjoyed by current group owners -- those that assembled
     combinations under the current rules -- and would disfavor those
     that cannot assemble competing combinations because of new
     ownership restrictions. In other words, grandfathering would "lock
     in" the competitive advantage of the largest group owners and
     permanently disadvantage those who have not yet consolidated.
     Although the Commission previously chose to grandfather existing
     station combinations based on countervailing considerations,[^388]
     we find that doing so now is not in the public interest.

122. Furthermore, we cannot conclude that tinkering with the existing
     numerical limits is warranted merely to rationalize the specific
     numerical limits that Congress chose in 1996 in light of the strong
     countervailing considerations set forth above. Congress adopted the
     existing limits in 1996, and mandated that the Commission
     periodically examine whether they remain necessary in the public
     interest. The *Prometheus* court rejected the Commission's attempt
     to rationalize the limits that Congress chose based on game theory
     and the *DOJ/FTC Horizontal Merger Guidelines*. Had the Commission
     initially established its own numerical limits, of course, it might
     have chosen different tiers and/or different caps. Nevertheless, we
     believe that it would be inconsistent with the public interest, as
     well as with the deference that we owe to Congress's line-drawing,
     to modify those limits merely to suit a new rationale, given the
     negative policy consequences associated with such tinkering.
     Instead, we believe that retaining the current numerical limits
     strikes the appropriate balance between protecting competition in
     local radio markets and enabling radio owners to achieve
     efficiencies through consolidation of facilities.[^389]

123. We also find that the AM/FM subcaps are relevant to our
     consideration of competition issues, as well as our overall public
     interest goals in considering our media ownership rules. Thus, we
     explain our decision to retain the AM/FM subcaps below.[^390]

124. *Localism*. Our localism goal stems from our mandate to ensure that
     licensed broadcast facilities serve and are responsive to the needs
     and interests of the communities to which they are licensed. By
     preserving a healthy, competitive local radio market, the local
     radio ownership rule helps promote our interest in localism. Aside
     from the positive effect on localism that ensues from a competitive
     radio market, however, the Commission has never found that the
     local radio ownership rule significantly advances our interest in
     localism.[^391]

125. Although some parties suggest that localism has suffered as a
     result of consolidation, others forcefully argue that consolidation
     has benefited localism by giving group owners more resources to
     provide local news and public interest programming and to undertake
     initiatives responsive to the local needs and interests of the
     communities that they serve.[^392] For example, some critics of
     consolidation cite to a Future of Music Coalition Study, which
     contends that consolidation permitted under our rule reduces
     opportunities to air music from local artists.[^393] In addition,
     these commenters refute studies showing that large radio groups air
     a greater number of local programs.[^394] Some commenters point to
     specific examples of alleged failures by a large national radio
     owner to provide vital public emergency programming as evidence of
     the harm to localism caused by consolidation.[^395] In contrast,
     NAB argues that the record establishes that station groups are
     rolling out more news and talk stations and are otherwise providing
     substantial service to their local listeners; thus, NAB concludes
     that common ownership provides affirmative benefits to the public
     by increasing listening choices and enhancing local service.[^396]

126. Based on our examination of the record, the evidence does not show
     that consolidation in local markets has harmed localism. Media
     Ownership Study 4.2 finds that the existence of economies of scope
     in production and distribution is supported by the findings that
     stations owned by parents that have more pervasive radio operations
     are more likely to air informational programming. The Study also
     provides some evidence that stations with nearby owners air more
     news and more local news.[^397] We also note that the parties who
     criticize the effect of consolidation on localism often focus on
     the overall *national* size of the radio station group owner rather
     than the number of radio stations commonly owned in a local market.
     For example, several commenters criticize the practice of airing
     national music playlists by large national radio station
     groups.[^398] As we noted in the *2002 Biennial Review Order,*
     however, this criticism seems to focus more on Congress's decision
     to eliminate the national radio ownership cap, which we are not
     reviewing in this proceeding.[^399] In any event, these concerns do
     not address whether consolidation of radio stations in a *local*
     market harms localism.[^400]

127. *Diversity.* Although media other than radio play an important role
     in the dissemination of local news and public affairs information,
     the Commission previously has concluded that its competition-based
     limits on local radio ownership promote diversity by ensuring a
     sufficient number of independent radio voices and by preserving a
     market structure that facilitates and encourages new entry into the
     local media market.[^401] The Commission has declined to rely on
     format diversity to justify the local radio ownership rule.[^402]

128. Though commenters hold various opinions on this issue,[^403] our
     recent studies show that common ownership allowable under our tiers
     is not associated with reductions in format or programming
     diversity. Media Ownership Study 5 finds that consolidation of
     radio ownership does not diminish the diversity of local format
     offerings.[^404] Similarly, the results of Media Ownership Study 10
     show that the variety of radio formats available to consumers has
     held steady.[^405] Peer review finds that Media Ownership Study 5
     provides an exhaustive analysis of the data using different
     measures of programming and ways of treating the data (*e.g*.,
     looking at programming using market level averages or using
     observations on each station). Moreover, the review showed that the
     study's results were easy to replicate due to the simplicity of the
     study's econometric analyses and the transparency of the
     explanation of the specifications.[^406] Peer review of Media
     Ownership Study 10 found that the discussion of the descriptive
     statistics relied on established techniques and theoretical
     concepts and that the interpretation of the financial indicator
     trends was sensible and consistent with professional standards. The
     review also showed that the count of formats statistic was a simple
     yet plausible measure of format diversity, and that the data
     sources used for the study were generally viewed as reliable.[^407]
     Some commenters disagree with the results of these studies. For
     example, Professor Byerly and Professor Arnold contend that Media
     Ownership Study 5 shows a paucity of news programming compared to
     advertising airtime and conclude that stations are not fulfilling
     their public service obligation.[^408] UCC asserts that the studies
     demonstrate that the consolidation that has occurred in the radio
     industry since the rule was relaxed in 1996 has significantly
     reduced the number of independently owned outlets, which the
     Commission has found to be the best proxy for measuring
     diversity.[^409] However, based on our examination of the record,
     and in light of the fact that peer review confirms the validity of
     our studies, which show that our radio ownership limits do not
     decrease format diversity, we are not persuaded that common
     ownership allowable under our tiers is associated with reductions
     in format or programming diversity.

129. Based on our examination of the record, we cannot conclude that the
     local radio ownership rule is necessary to protect format
     diversity. Nevertheless, we find that retaining the current,
     competition-based numerical limits on local radio ownership will
     promote diversity indirectly for the same reasons that the
     Commission pointed to in the *2002 Biennial Review Order*. Thus, it
     is proper for us to retain the status quo, as the ownership tiers
     serve the public interest in light of competition.

130. *AM/FM Subcaps.* We also reaffirm the AM and FM ownership limits in
     the current rule. As stated above, the Third Circuit held that the
     Commission did not adequately support its decision to retain the AM
     subcap and directed the Commission to justify its approach on
     remand.[^410]

131. We sought comment on whether to retain the AM/FM subcaps in the
     *Further Notice*.[^411] Five commenters addressed the issue. Clear
     Channel, CBS, and Multicultural Radio Broadcasting oppose retention
     of both the AM and FM subcaps and believe they should be
     eliminated.[^412] Specifically, Clear Channel states that the
     elimination of the AM/FM subcaps will permit large broadcasters to
     acquire more FM stations and divest AM stations, thus fostering
     increased radio ownership by small businesses and minorities.[^413]
     Multicultural Radio Broadcasting states that it owns 45 radio
     stations, almost all of which are AM stations, providing ethnic and
     foreign language programming.[^414] However, in the Los Angeles and
     New York markets, Multicultural is prohibited from buying
     additional AM stations, though it could buy more FM stations under
     the radio ownership limits.[^415] CBS argues that "no party to this
     proceeding has made any showing that the sub-caps serve any purpose
     in the promotion of competition or diversity."[^416]

132. In contrast, UCC and Mt. Wilson both support retaining the
     caps.[^417] UCC argues that "nothing has changed the need for the
     FM subcap," as "FM stations have tremendous technological and
     economic advantages."[^418] In addition, UCC argues that "the
     digital transition does not upset, and possibly increases, these
     technological and economic advantages, as FM stations have rights
     to more spectrum and are further along in their digital
     transition."[^419] UCC also argues that retaining the AM subcap
     serves the public interest because the limit on the number of AM
     stations one entity can own both promotes new entry and fosters
     diversity.[^420] Mt. Wilson argues that "while generally AM
     stations do not command an audience size comparable to FM stations
     (irrespective of the reason), AM stations are in fact a contributor
     to the market share data for the respective broadcast entities.
     Moreover, the number of broadcast outlets available to a group
     owner can be a factor in attaining economic dominance and, further,
     stifling competition."[^421]

133. We agree with UCC that retaining the AM subcaps serves the public
     interest by promoting new entry. As we have recognized, because it
     can reach specific demographic groups more easily than other forms
     of mass media, and because of its relative affordability compared
     to other mass media, radio remains a likely avenue for new entry
     into the media business, particularly by small businesses, women,
     minorities, and entrepreneurs seeking to meet market demand by
     providing programming to underserved communities.[^422] New entry
     promotes outlet diversity, which in turn enhances diversity and the
     public interest. UCC explains in its comments that AM stations are
     generally far less expensive than FM stations, permitting entry
     with far lower capital investment.[^423] We therefore find that
     retaining the current, competition-based subcaps will promote
     diversity indirectly by facilitating and encouraging entry into the
     local media market by new and underrepresented parties, and we thus
     conclude that the AM subcaps are in the public interest.

134. We also agree with Mt. Wilson that eliminating the service limits
     would improperly ignore the significant technical and marketplace
     differences between AM and FM stations and would be inconsistent
     with our interest in protecting competition in local radio
     markets.[^424] Although, in many cases, these differences between
     AM and FM stations militate solely in favor of FM ownership limits
     due to factors such as AM stations' lesser bandwidth, inferior
     audio signal, and smaller radio audiences due to such technical
     differences, there is evidence in the record indicating that AM
     subcaps are necessary as well, as Mt. Wilson suggests. For example,
     Clear Channel points out that AM stations are ranked number one in
     11 of the top 50 Arbitron Metro markets, and that seven additional
     top-50 markets had AM stations rated among the top three
     stations.[^425] Thus, in certain local markets with top-ranked AM
     stations, the AM subcaps are necessary to prevent excessive market
     power from being concentrated in the hands of one station owner. At
     this time, we do not believe there is any reason to further relax,
     eliminate, or strengthen the AM/FM subcaps. Further loosening of
     the AM and FM ownership limits at this time would not be in the
     public interest.

135. In addition, various parties have also raised other issues in this
     proceeding that we decline to specifically address here.[^426]

## Petitions for Reconsideration

136. *Arbitron Markets.* We deny petitions for reconsideration of our
     decision to use Arbitron Metro markets to define local radio
     markets.[^427] The Third Circuit found that the decision to adopt
     the Arbitron Metro market definition was in the public interest and
     was supported by reasoned analysis.[^428] We have been successfully
     applying the new definition for over three years and see no need to
     revisit its use here.

137. *JSAs and Noncommercial Stations.* We decline to reconsider our
     decision in the *2002 Biennial Review Order* to attribute certain
     JSAs.[^429] We also decline to review our decision to include
     noncommercial radio stations in determining the size of the radio
     market. [^430] As discussed above, both of these decisions were
     upheld by the Third Circuit in *Prometheus.*[^431] We therefore
     deny petitions seeking reconsideration of these aspects of the
     *2002 Biennial Review Order*.

138. *Grandfathering/Transition Issues.* Several parties seek
     reconsideration of the Commission's grandfathering and transition
     procedures.[^432] We address all issues regarding sales of
     grandfathered combinations to eligible entities in the separate
     Order addressing ownership diversity.[^433] As to all other
     requests that we reconsider our grandfathering and transition
     policies, we decline to do so.[^434] The *Prometheus* court upheld
     our decision and lifted the stay as to the
     grandfathering/transition rules in 2004.[^435] We decline to
     reconsider our decision or to adopt additional grandfathering
     measures.[^436]

# Dual Network rule

139. The Commission's dual network rule provides: "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
     (that is, ABC, CBS, Fox, and NBC)."[^437] Thus, the rule permits
     common ownership of multiple broadcast networks, but prohibits a
     merger between or among the "top four" networks. In this Order, we
     conclude that the dual network rule remains necessary in the public
     interest as a result of competition and localism, and we therefore
     retain the rule without modification.

140. In the *2002 Biennial Review Order*, the Commission retained the
     dual network rule, concluding that it was necessary in the public
     interest to promote competition and localism.[^438] The Commission
     concluded 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.[^439] It reasoned that these
     competitive harms would reduce program output, choices, quality,
     and innovation to the detriment of viewers. The Commission also
     concluded that elimination of the dual network rule would harm
     localism by allowing a top four network merger, which would reduce
     the ability of affiliates to bargain with their network for
     favorable terms of affiliation, reducing affiliates' influence on
     network programming, and thereby diminishing the ability of the
     affiliates to serve their communities.[^440]

141. No petitions were filed asking the Commission to reconsider its
     decision to retain the rule, and no challenges were filed in
     *Prometheus*.[^441] We sought comment in the *Further Notice* on
     whether the dual network rule remains necessary in the public
     interest to promote the Commission's policy goals.[^442] Almost all
     of the few parties[^443] commenting on the rule in this proceeding
     support retaining the rule in its current form.[^444] They claim
     that the dual network rule continues to promote competition in the
     television advertising and program acquisition markets[^445] and
     helps ease market entry by new networks.[^446] They also contend
     that the rule promotes diverse programming because it prohibits the
     same companies from owning numerous media outlets,[^447] and
     promotes localism by preserving the balance of power between the
     networks and their affiliates.[^448] Other parties argue that
     relaxing or eliminating the rule would increase concentration to
     the detriment of competition, diversity, and localism.[^449] No
     specific changes to the dual network rule were proposed,[^450] and
     only two parties -- Fox and CBS -- oppose retaining the rule in any
     form.[^451] Neither of these parties has provided evidence
     convincing us that a departure from our 2002 decision to retain the
     rule in its current form is warranted. Accordingly, for the same
     reasons recited by the Commission in 2002, we continue to believe
     that the dual network rule is necessary in the public interest to
     promote competition and localism. Therefore, we retain the dual
     network rule in its current form.

# UHF DISCOUNT

142. In the *2002 Biennial Review Order*, the Commission retained the 50
     percent UHF discount, which is applied in calculating a UHF
     station's audience reach under the national television cap.[^452]
     The Commission decided, however, that when the transition to
     digital television is complete, the UHF discount would be
     eliminated for those stations owned by the four largest
     networks.[^453] Subsequently, in 2004, Congress set the national
     television ownership cap at 39 percent and excluded the national
     cap from the quadrennial review requirement in Section
     202(h).[^454] In *Prometheus*, the court mooted challenges to the
     Commission's decision to retain the discount, holding that the UHF
     discount is a rule "relating to" the national audience
     limitation.[^455] The court then stated that the Commission may
     decide the scope of its authority to modify or eliminate the UHF
     discount. In the *Further Notice*, the Commission sought comment on
     whether the holding in *Prometheus* was ambiguous with respect to
     the UHF discount rule.[^456] The Commission also asked whether it
     should retain, modify, or eliminate the UHF discount, and requested
     comment on the basis for the Commission's authority to take such
     action.[^457]

143. We find that the Commission is foreclosed from addressing the issue
     of the UHF discount in this proceeding by the 2004 Consolidated
     Appropriations Act. Although the Act did not specifically mention
     the UHF discount, the *Prometheus* court observed that the
     statutory 39 percent national cap would be altered if the UHF
     discount were modified. The court observed that the Appropriations
     Act amended Section 202(h) to exclude "any rules relating to" the
     39 percent national cap, and determined that the UHF discount was a
     rule "relating to" the national television cap. The Third Circuit
     concluded that Congress "apparently intended to insulate the UHF
     discount from periodic review," but left open the possibility that
     the Commission may consider the discount in a rulemaking "outside
     the context of Section 202(h)."[^458] Accordingly, we conclude that
     the UHF discount is insulated from review under Section 202(h).

144. As the *Prometheus* court noted, the Commission may decide, in the
     first instance, the scope of its authority to modify or eliminate
     the UHF discount outside the context of Section 202(h). The court
     noted that, prior to the *Prometheus* decision, the Commission had
     sought comment on its authority going forward to modify or
     eliminate the UHF discount in light of the Appropriations
     Act.[^459] Accordingly, we will separately address the petitions,
     comments, and replies that were filed concerning the extent of the
     Commission's authority to alter the UHF discount and the
     substantive petitions and comments as to whether the Commission
     should retain, revise, or eliminate the UHF discount.

# Public Interest Obligations of Television Broadcast Licensees

145. We note that in the pending proceeding titled *Public Interest
     Obligations of TV Broadcast Licensees,*[^460] commenters ask the
     Commission to impose additional "public interest" obligations on
     television broadcasters. Some of the issues raised in that
     proceeding have already been resolved by the Commission. For
     example, in January 2007, the Commission's new children's
     programming requirements went into effect. And, even more recently,
     the Commission adopted a requirement that all television
     broadcasters must file a standardized form on a quarterly basis
     providing information about their programming, including
     programming related to local civic affairs, local electoral
     affairs, public service announcements (whether sponsored or aired
     for free), and independently produced programming. In addition, the
     Commission has concurrently adopted a Localism Report and Notice of
     Proposed Rulemaking that addresses actions the Commission will take
     to ensure that broadcasters are meeting the needs of their local
     communities. With respect to other ideas raised in this proceeding,
     such as whether the agency should establish more specific minimum
     public interest requirements for licensees and how broadcasters
     could improve political candidates' access to television, the
     Commission declines to take any further action at this time. We
     find the need to impose additional obligations premature in light
     of the Commission's recent decision to require broadcasters to file
     enhanced disclosure reports about the programming they are
     providing to serve local communities' interests and needs.
     Nevertheless, to the extent that circumstances change, we will
     revisit this decision and initiate proceedings as appropriate.

# Data Quality Act 

146. We reject the complaints filed by Free Press, Consumer Federation
     of America, and Consumers Union (collectively, "Free Press")[^461]
     claiming that the Commission violated the Data Quality Act ("DQA")
     and guidelines issued by the Office of Management and Budget
     ("OMB") implementing the DQA.[^462] The complaints relate to 10
     media ownership studies that the Commission posted on its website
     on July 31, 2007. Although Free Press concedes that the DQA creates
     no judicially enforceable rights,[^463] it alleges that the
     Commission violated the DQA by failing to give interested parties
     sufficient time to "reproduce" the results of those studies.[^464]
     Neither the DQA nor the OMB guidelines requires a federal agency to
     allot time in a rulemaking proceeding for third parties to
     reproduce the results of studies released by the agency. Moreover,
     the facts belie the allegation that Free Press had insufficient
     time to review the studies. The Commission made available for
     inspection the bulk of the non-proprietary data underlying the
     studies beginning on July 31, 2007, and released the proprietary
     data under a Protective Order by September 6, 2007. In response to
     a request from Free Press, the Media Bureau extended the deadline
     for submitting comments on the studies from October 1 to October
     22, 2007, and extended the deadline for reply comments from October
     16 to November 1, 2007.[^465] Thus, Free Press had 46 days after
     September 6 to prepare comments and 10 more days to prepare reply
     comments. Free Press took full advantage of the extended comment
     period -- it filed nearly 2,500 pages of comments on the
     studies.[^466] We find that Free Press had adequate time to review
     the data underlying the studies and to reproduce their
     results.[^467]

147. We also reject the complaints filed by Free Press and other
     commenters[^468] that the Commission failed to comply with the peer
     review guidelines promulgated by OMB.[^469] The OMB Bulletin
     provides for the peer review of disseminations of scientific
     information containing "findings or conclusions that represent the
     official position of one or more agencies of the Federal
     government."[^470] It requires federal agencies to ensure that its
     official disseminations have met rigorous standards of quality
     control through a peer review mechanism or to put the public on
     notice that the information has not been through a rigorous quality
     review.[^471] The Bulletin expressly provides that it is intended
     to improve the internal management of the executive branch and that
     it does not create any enforceable legal rights.[^472]

148. Free Press incorrectly claims that the Commission acted contrary to
     the OMB Bulletin by releasing the 10 media ownership studies prior
     to completing peer reviews of the studies.[^473] The Commission
     posted the media ownership studies to its website on July 31, 2007,
     shortly after they were completed, in order to give the public and
     the peer reviewers access to their contents expeditiously. The
     Commission issued a Public Notice that same day requesting public
     comment on the studies.[^474] The Public Notice specifically stated
     that the studies had not yet been peer reviewed; accordingly, the
     public was accurately informed that the studies at that point did
     not necessarily meet rigorous quality review standards. In
     addition, it was clear from the disclaimers on some of the studies
     that those particular studies did not represent the agency's
     official view. In order to forestall any confusion on this point,
     the Commission has posted an explanatory disclaimer with regard to
     each of the studies on the web page that is the public's primary
     access point to them, making it clear that they do not represent
     the Commission's official views, and were not being disseminated as
     such.[^475] Furthermore, the Media Bureau extended the comment
     period on the studies until November 1, 2007. The extension of time
     allowed a total of 58 days from the posting of the peer reviews on
     September 4, 2007, and more than 90 days from the posting of the
     studies for public review and comment on July 31, 2007. We also
     note that the Commission accepts *ex parte* filings from members of
     the public past the end of the formal comment period, which gives
     parties an opportunity to supplement the record with additional
     information.[^476] Thus, the public has been afforded ample time to
     review and comment on the studies after completion of the peer
     reviews.

149. Furthermore, the record clearly indicates that the public had ample
     notice of our peer review plans, although Free Press attempts to
     make much of the fact that the peer review plans were not filed on
     a separate web page.[^477] Beginning with the initial Public Notice
     announcing the commissioning of the 10 studies on November 22,
     2006, the Commission continuously informed the public of its peer
     review process through periodic Public Notices and updates to its
     Media Ownership website. The Commission posted on its website the
     study topics (November 22, 2006); the completed studies (July 31,
     2007); the peer review charge letters (August 28, 2007); and the
     completed peer review reports (September 4, 2007). The Commission's
     July 31, 2007 Public Notice established a pleading cycle for public
     comment on the studies. The peer review charge letters and peer
     review reports were made available to the public on the
     Commission's website well before the end of the comment period. In
     addition, charge letters were posted to the web site in advance of
     the posting of the actual peer review reports. Accordingly, the
     public was adequately informed of the peer review process being
     conducted, and has had adequate opportunity to comment on the
     elements of the FCC's peer review process in this proceeding.

150. Free Press's complaint does not raise concerns about the validity
     of the Commission's peer review process, and there is no basis for
     any. The OMB Bulletin expressly provides that agencies have "broad
     discretion" to use particular peer review mechanisms suitable to a
     particular information product.[^478] The Commission has exercised
     its discretion in a reasonable manner in the course of this
     proceeding. All of the studies that the Commission requested to be
     conducted were peer reviewed by unaffiliated experts, and four of
     them were peer reviewed by multiple reviewers.[^479] One study was
     revised as a result of the peer review, and the authors of another
     study submitted new calculations with their responses to the peer
     reviews.[^480] Twenty-two quantitative studies submitted by third
     parties in the docket were peer reviewed, and the results were
     posted for further public comment. The Commission's peer review
     process has improved the quality of the studies submitted to the
     Commission for its information in this proceeding.[^481] Although
     Free Press would have preferred a far more elaborate and
     time-consuming peer review process,[^482] this process was not
     required under the OMB Bulletin nor would it have improved
     appreciably upon the Commission's robust, extended process for
     independent review and public comment.[^483]

# Administrative matters

**A. Final Regulatory Flexibility Analysis**

151. As required by the Regulatory Flexibility Act of 1980
     ("RFA"),[^484] the Commission has prepared a Final Regulatory
     Flexibility Analysis ("FRFA") relating to this *Report and Order*.
     The FRFA is set forth in Appendix B.

**B. Final Paperwork Reduction Act Analysis**

152. This *Report and Order* contains both new and modified information
     collection requirements subject to the Paperwork Reduction Act of
     1995 ("PRA"), Public Law 104-13.  It will be submitted to the
     Office of Management and Budget ("OMB") for review under Section
     3507(d) of the PRA.  OMB, the general public, and other Federal
     agencies are invited to comment on the new or modified information
     collection requirements contained in this proceeding.  In addition,
     we note that pursuant to the Small Business Paperwork Relief Act of
     2002, Public Law 107-198, *see* 44 U.S.C. § 3506(c)(4), we have
     considered how the Commission might "further reduce the information
     collection burden for small business concerns with fewer than 25
     employees." We find that the modified requirements must apply fully
     to small entities (as well as to others) to protect consumers and
     further other goals, as described in the Order.

**C. Congressional Review Act**

153. The Commission will send a copy of this *Report and Order* in a
     report to be sent to Congress and the Government Accountability
     Office, pursuant to the Congressional Review Act.[^485]

**D. Additional Information**

154. For additional information on this proceeding, please contact Royce
     Sherlock, Industry Analysis Division, Media Bureau, at (202)
     418-2330, or Mania Baghdadi, Industry Analysis Division, Media
     Bureau, at (202) 418-2330.

# ordering clauses

155. 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 *Report and Order and Order on
     Reconsideration* and the rule modifications attached hereto as
     Appendix A ARE ADOPTED, effective thirty (30) days after
     publication of the text or summary thereof in the Federal Register,
     except for those rules and requirements involving Paperwork
     Reduction Act burdens, which shall become effective immediately
     upon announcement in the Federal Register of OMB approval. It is
     our intention in adopting these rule changes that, if any of the
     rules that we retain, modify or adopt today, or the application
     thereof to any person or circumstance, are held to be unlawful, the
     remaining portions of the rules not deemed unlawful, and the
     application of such rules to other persons or circumstances, shall
     remain in effect to the fullest extent permitted by law. Thus, for
     example, if one of the ownership rules is held to be unlawful, the
     other ownership rules shall remain in effect to the fullest extent
     permitted by law, each being severable from the others.

156. IT IS FURTHER ORDERED, that the Petition for Reconsideration filed
     by Office of Communication of the United Church of Christ, Inc.,
     Black Citizens for a Fair Media, Philadelphia Lesbian and Gay Task
     Force, and Women's Institute for Freedom of the Press; and the
     Petition for Reconsideration filed by Minority Media and
     Telecommunications Council, Counsel for Diversity and Competition
     Supporters filed in MB Docket No. 02-277 ARE GRANTED to the extent
     set forth in this Order, and otherwise ARE DENIED. The Petitions
     for Reconsideration filed in MB Docket No. 02-277 by National
     Association of Black Owned Broadcasters, Inc. and The Rainbow/PUSH
     Coalition, Inc.; WTCM Radio, Inc.; WJZD, Inc.; Cumulus Media, Inc.;
     Galaxy Communications, L.P.; Mt. Wilson FM Broadcasters; Entercom
     Communications Corp.; Great Scott Broadcasting; Treasure and Space
     Coast Radio; Saga Communications, Inc.; Future of Music Coalition;
     National Organization for Women; Mid-West Family Broadcasting;
     Monterey Licenses, LLC; LIN Television Corporation and Raycom Media
     Inc.; Duff, Ackerman & Goodrich, LLC; Center for the Creative
     Community and Association of Independent Video and Filmmakers;
     Robert W. McChesney and Josh Silver of Free Press; Nexstar
     Broadcasting Group, LLC; Saga Communications, Inc.; Consumers
     Federation of America and Consumers Union; Capitol Broadcasting
     Company, Inc.; Bennco, Inc.; The Amherst Alliance and the Virginia
     Center for the Public Press are DISMISSED or DENIED as discussed in
     this Order.

157. IT IS FURTHER ORDERED, that as enumerated in paragraph 76 of the
     *Report and Order and Order on Reconsideration*,
     the grandfathering or waivers granted in the 1975
     newspaper/broadcast cross-ownership decision, *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, 50 FCC 2d 1046 (1975), are
     continued, and all permanent waivers for the prior
     newspaper/broadcast cross-ownership rule that have previously been
     granted are continued.

158. IT IS FURTHER ORDERED, that as enumerated in paragraph 77 of the
     *Report and Order and Order on Reconsideration*, waivers are
     granted to Gannett Co. Inc.'s combination in Phoenix (The Arizona
     Republic and KPNX-TV), Media General Inc.'s combination in Myrtle
     Beach-Florence, South Carolina (WBTW(TV) and the Morning News),
     Media General, Inc.'s combination in Columbus, Georgia (WRBL(TV)
     and the Opelika-Auburn News), Media General, Inc.'s combination in
     Panama City, Florida (WMBB(TV) and the Jackson County
     Floridan), and Media General's combination in the Tri-Cities,
     Tennessee/Virginia DMA (WJHL-TV and the Bristol (Virginia
     Tennessee) Herald Courier.

159. IT IS FURTHER ORDERED, that as enumerated in paragraph 78 of the
     *Report and Order and Order on Reconsideration*, licensees with a
     pending waiver request that involves an existing station
     combination consisting of more than one newspaper and/or more than
     one broadcast station will have 90 days after the effective date of
     the *Report and Order and Order on Reconsideration* to either amend
     their renewal or waiver requests or file a request for a permanent
     waiver.

160. IT IS FURTHER ORDERED, that as enumerated in paragraph 78 of the
     *Report and Order and Order on Reconsideration*, entities that have
     been granted a temporary waiver of the newspaper/broadcast
     cross-ownership rule pending the completion of this rulemaking will
     have 90 days after the effective date of the Report and Order to
     either amend their renewal or waiver requests or file a request for
     a permanent waiver.

161. IT IS FURTHER ORDERED, that the proceedings in MB Docket No.
     06-121, MB Docket No. 02-277, MM Docket No. 01-235, MM Docket No.
     01-317, MM Docket No. 00-244, and MM Docket No. 99-360 ARE
     TERMINATED.

162. IT IS FURTHER ORDERED, that the Commission's Consumer and
     Governmental Affairs Bureau, Reference Information Center, SHALL
     SEND a copy of this *Report and Order and Order on
     Reconsideration*, including the Final Regulatory Flexibility
     Analysis, to the Chief Counsel for Advocacy of the Small Business
     Administration.

     FEDERAL COMMUNICATIONS COMMISSION

     Marlene H. Dortch

     Secretary

     **APPENDIX A**

     **Rule Changes**

For the reasons described in the preamble, Part 73 of Title 47 of the
Code of Federal Regulations is amended as follows:\
\
PART 73\--RADIO BROADCAST SERVICES

1\. The authority citations for Part 73 continue to read as follows:

Authority: [47 U.S.C. §§
154](http://web2.westlaw.com/find/default.wl?rp=%2Ffind%2Fdefault.wl&vc=0&DB=1000546&DocName=47USCAS154&FindType=L&AP=&fn=_top&rs=WLW7.11&mt=Westlaw&vr=2.0&sv=Split),
[303](http://web2.westlaw.com/find/default.wl?rp=%2Ffind%2Fdefault.wl&vc=0&DB=1000546&DocName=47USCAS303&FindType=L&AP=&fn=_top&rs=WLW7.11&mt=Westlaw&vr=2.0&sv=Split),
[334](http://web2.westlaw.com/find/default.wl?rp=%2Ffind%2Fdefault.wl&vc=0&DB=1000546&DocName=47USCAS334&FindType=L&AP=&fn=_top&rs=WLW7.11&mt=Westlaw&vr=2.0&sv=Split),
and
[336](http://web2.westlaw.com/find/default.wl?rp=%2Ffind%2Fdefault.wl&vc=0&DB=1000546&DocName=47USCAS336&FindType=L&AP=&fn=_top&rs=WLW7.11&mt=Westlaw&vr=2.0&sv=Split).

2\. Section 73.3555 is amended to read as follows:

§ 73.3555 Multiple ownership.\
\
(a)(1) Local radio ownership rule. A person or single entity (or
entities under common control) may have a cognizable interest in
licenses for AM or FM radio broadcast stations in accordance with the
following limits:

\(i\) In a radio market with 45 or more full-power, commercial and
noncommercial radio stations, not more than 8 commercial radio stations
in total and not more than 5 commercial stations in the same service (AM
or FM);

\(ii\) In a radio market with between 30 and 44 (inclusive) full-power,
commercial and noncommercial radio stations, not more than 7 commercial
radio stations in total and not more than 4 commercial stations in the
same service (AM or FM);

\(iii\) In a radio market with between 15 and 29 (inclusive) full-power,
commercial and noncommercial radio stations, not more than 6 commercial
radio stations in total and not more than 4 commercial stations in the
same service (AM or FM); and

\(iv\) In a radio market with 14 or fewer full-power, commercial and
noncommercial radio stations, not more than 5 commercial radio stations
in total and not more than 3 commercial stations in the same service (AM
or FM); provided, however, that no person or single entity (or entities
under common control) may have a cognizable interest in more than 50% of
the full-power, commercial and noncommercial radio stations in such
market unless the combination of stations comprises not more than one AM
and one FM station.

\(2\) Overlap between two stations in different services is permissible
if neither of those two stations overlaps a third station in the same
service.

\(b\) 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) only
under one or more of the following conditions:

\(1\) The Grade B contours of the stations (as determined by § 73.684 of
this part) do not overlap; or

(1)(i) 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

\(ii\) 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 stations the Grade B signal contours of
which overlap with the Grade B signal contour of at least one of 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 the
Grade B signal contours of which overlap with the Grade B signal contour
of at least one of the stations in the proposed combination.

\(c\) Radio-television cross-ownership rule.

\(1\) This rule is triggered when:

\(i\) The predicted or measured 1 mV/m contour of an existing or
proposed FM station (computed in accordance with § 73.313 of this part)
encompasses the entire community of license of an existing or proposed
commonly owned TV broadcast station(s), or the Grade A contour(s) of the
TV broadcast station(s) (computed in accordance with § 73.684)
encompasses the entire community of license of the FM station; or

\(ii\) The predicted or measured 2 mV/m groundwave contour of an
existing or proposed AM station (computed in accordance with § 73.183 or
§ 73.386), encompasses the entire community of license of an existing or
proposed commonly owned TV broadcast station(s), or the Grade A
contour(s) of the TV broadcast station(s) (computed in accordance with §
73.684) encompass(es) the entire community of license of the AM station.

\(2\) An entity may directly or indirectly own, operate, or control up
to two commercial TV stations (if permitted by paragraph (b) of this
section, the local television multiple ownership rule) and 1 commercial
radio station situated as described above in paragraph (1) of this
section.   An entity may not exceed these numbers, except as follows:

\(i\) If at least 20 independently owned media voices would remain in
the market post-merger, an entity can directly or indirectly own,
operate, or control up to:

\(A\) Two commercial TV and six commercial radio stations (to the extent
permitted by paragraph (a) of this section, the local radio multiple
ownership rule); or

\(B\) One commercial TV and seven commercial radio stations (to the
extent that an entity would be permitted to own two commercial TV and
six commercial radio stations under paragraph (c)(2)(i)(A) of this
section, and to the extent permitted by paragraph (a) of this section,
the local radio multiple ownership rule).

\(ii\) If at least 10 independently owned media voices would remain in
the market post-merger, an entity can directly or indirectly own,
operate, or control up to two commercial TV and four commercial radio
stations (to the extent permitted by paragraph (a) of this section, the
local radio multiple ownership rule).

\(3\) To determine how many media voices would remain in the market,
count the following:

\(i\) TV stations: 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;

\(ii\) Radio stations:

(A)(1) Independently owned operating primary broadcast radio stations
that are in the radio metro market (as defined by Arbitron or another
nationally recognized audience rating service) of:

\(i\) The TV station\'s (or stations\') community (or communities) of
license; or

\(ii\) The radio station\'s (or stations\') community (or communities)
of license; and

\(2\) Independently owned out-of-market broadcast radio stations with a
minimum share as reported by Arbitron or another nationally recognized
audience rating service.

\(B\) When a proposed combination involves stations in different radio
markets, the voice requirement must be met in each market; the radio
stations of different radio metro markets may not be counted together.

\(C\) In areas where there is no radio metro market, count the radio
stations present in an area that would be the functional equivalent of a
radio market.

\(iii\) Newspapers: Newspapers that are published at least four days a
week within the TV station's DMA in the dominant language of the market
and that have a circulation exceeding 5% of the households in the DMA;
and

\(iv\) One cable system:  if cable television is generally available to
households in the DMA.   Cable television counts as only one voice in
the DMA, regardless of how many individual cable systems operate in the
DMA.

\(d\) Daily newspaper cross-ownership rule.  

(1)  No license for an 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 predicted or measured 2 mV/m contour of an AM station,
computed in accordance with § 73.183 or § 73.186, encompassing the
entire community in which such newspaper is published; or

\(ii\) The predicted 1 mV/m contour for an FM station, computed in
accordance with § 73.313, encompassing the entire community in which
such newspaper is published; or

\(iii\) The Grade A contour of a TV station, computed in accordance with
§ 73.684, encompassing the entire community in which such newspaper is
published.

\(2\) Paragraph (1) shall not apply in cases where the Commission makes
a finding pursuant to Section 310(d) of the Communications Act that the
public interest, convenience, and necessity would be served by
permitting an entity that owns, operates or controls a daily newspaper
to own, operate or control an AM, FM, or TV broadcast station whose
relevant contour encompasses the entire community in which such
newspaper is published as set forth in paragraph (1).

\(3\) In making a finding under paragraph (2), there shall be a
presumption that it is not inconsistent with the public interest,
convenience, and necessity for an entity to own, operate or control a
daily newspaper in a top 20 Nielsen DMA and one commercial AM, FM or TV
broadcast station whose relevant contour encompasses the entire
community in which such newspaper is published as set forth in paragraph
(1), provided that, with respect to a combination including a commercial
TV station,

\(i\) The 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).

\(4\) In making a finding under paragraph (2), there shall be a
presumption that it is inconsistent with the public interest,
convenience, and necessity for an entity to own, operate or control a
daily newspaper and an AM, FM or TV broadcast station whose relevant
contour encompasses the entire community in which such newspaper is
published as set forth in paragraph (1) in a DMA other than the top 20
Nielsen DMAs or in any circumstance not covered under paragraph (3).

\(5\) In making a finding under paragraph (2), the Commission shall
consider:

\(i\) whether the combined entity will significantly increase the amount
of local news in the market;

\(ii\) whether the newspaper and the broadcast outlets each will
continue to employ its own staff and each will exercise its own
independent news judgment;

\(iii\) the level of concentration in the Nielsen Designated Market Area
(DMA); and

\(iv\) the financial condition of the newspaper or broadcast station,
and if the newspaper or broadcast station is in financial distress, the
proposed owner's commitment to invest significantly in newsroom
operations.

\(6\) In order to overcome the negative presumption set forth in
paragraph (4) with respect to the combination of a major newspaper and a
television station, the applicant must show by clear and convincing
evidence that the co-owned major newspaper and station will increase the
diversity of independent news outlets and increase competition among
independent news sources in the market, and the factors set forth above
in paragraph (5) will inform this decision.

\(7\) The negative presumption set forth in paragraph (4) shall be
reversed under the following two circumstances:

\(i\) the newspaper or broadcast station is failed or failing; or

\(ii\) the combination is with a broadcast station that was not offering
local newscasts prior to the combination, and the station will initiate
at least seven hours per week of local news programming after the
combination.

\(e\) National television multiple ownership rule.

\(1\) No license for a commercial television broadcast station shall be
granted, transferred or assigned to any party (including all parties
under common control) if the grant, transfer or assignment of such
license would result in such party or any of its stockholders, partners,
members, officers or directors having a cognizable interest in
television stations which have an aggregate national audience reach
exceeding thirty-nine (39) percent.

\(2\) For purposes of this paragraph (e):

> \(i\) National audience reach means the total number of television
> households in the Nielsen Designated Market Areas (DMAs) in which the
> relevant stations are located divided by the total national television
> households as measured by DMA data at the time of a grant, transfer,
> or assignment of a license. For purposes of making this calculation,
> UHF television stations shall be attributed with 50 percent of the
> television households in their DMA market.
>
> \(ii\) No market shall be counted more than once in making this
> calculation.

\(3\) Divestiture. A person or entity that exceeds the thirty-nine (39)
percent national audience reach limitation for television stations in
paragraph (e)(1) of this section through grant, transfer, or assignment
of an additional license for a commercial television broadcast station
shall have not more than 2 years after exceeding such limitation to come
into compliance with such limitation. This divestiture requirement shall
not apply to persons or entities that exceed the 39 percent national
audience reach limitation through population growth.

\(f\) The ownership limits of this section are not applicable to
noncommercial educational FM and noncommercial educational TV stations.
However, the attribution standards set forth in the Notes to this
section will be used to determine attribution for noncommercial
educational FM and TV applicants, such as in evaluating mutually
exclusive applications pursuant to subpart K.

\* \* \* \* \*

Note 1 to § 73.3555: The words "cognizable interest" as used herein
include any interest, direct or indirect, that allows a person or entity
to own, operate or control, or that otherwise provides an attributable
interest in, a broadcast station.

Note 2 to [§
73.3555](http://web2.westlaw.com/find/default.wl?rp=%2Ffind%2Fdefault.wl&vc=0&DB=1000547&DocName=47CFRS73.3555&FindType=L&AP=&fn=_top&rs=WLW7.11&mt=Westlaw&vr=2.0&sv=Split):
In applying the provisions of this section, ownership and other
interests in broadcast licensees, cable television systems and daily
newspapers will be attributed to their holders and deemed cognizable
pursuant to the following criteria:

\(a\) Except as otherwise provided herein, partnership and direct
ownership interests and any voting stock interest amounting to 5% or
more of the outstanding voting stock of a corporate broadcast licensee,
cable television system or daily newspaper will be cognizable;

\(b\) Investment companies, as defined in [15 U.S.C.
80a-3](http://web2.westlaw.com/find/default.wl?rp=%2Ffind%2Fdefault.wl&vc=0&DB=1000546&DocName=15USCAS80A-3&FindType=L&AP=&fn=_top&rs=WLW7.11&mt=Westlaw&vr=2.0&sv=Split),
insurance companies and banks holding stock through their trust
departments in trust accounts will be considered to have a cognizable
interest only if they hold 20% or more of the outstanding voting stock
of a corporate broadcast licensee, cable television system or daily
newspaper, or if any of the officers or directors of the broadcast
licensee, cable television system or daily newspaper are representatives
of the investment company, insurance company or bank concerned. Holdings
by a bank or insurance company will be aggregated if the bank or
insurance company has any right to determine how the stock will be
voted. Holdings by investment companies will be aggregated if under
common management.

\(c\) Attribution of ownership interests in a broadcast licensee, cable
television system or daily newspaper that are held indirectly by any
party through one or more intervening corporations will be determined by
successive multiplication of the ownership percentages for each link in
the vertical ownership chain and application of the relevant attribution
benchmark to the resulting product, except that wherever the ownership
percentage for any link in the chain exceeds 50%, it shall not be
included for purposes of this multiplication. For purposes of paragraph
(i) of this note, attribution of ownership interests in a broadcast
licensee, cable television system or daily newspaper that are held
indirectly by any party through one or more intervening organizations
will be determined by successive multiplication of the ownership
percentages for each link in the vertical ownership chain and
application of the relevant attribution benchmark to the resulting
product, and the ownership percentage for any link in the chain that
exceeds 50% shall be included for purposes of this multiplication. \[For
example, except for purposes of paragraph (i) of this note, if A owns
10% of company X, which owns 60% of company Y, which owns 25% of
"Licensee," then X's interest in "Licensee" would be 25% (the same as
Y's interest because X's interest in Y exceeds 50%), and A's interest in
"Licensee" would be 2.5% (0.1 x 0.25). Under the 5% attribution
benchmark, X's interest in "Licensee" would be cognizable, while A's
interest would not be cognizable. For purposes of paragraph (i) of this
note, X's interest in "Licensee" would be 15% (0.6 x 0.25) and A's
interest in "Licensee" would be 1.5% (0.1 x 0.6 x 0.25). Neither
interest would be attributed under paragraph (i) of this note.\]

\(d\) Voting stock interests held in trust shall be attributed to any
person who holds or shares the power to vote such stock, to any person
who has the sole power to sell such stock, and to any person who has the
right to revoke the trust at will or to replace the trustee at will. If
the trustee has a familial, personal or extra-trust business
relationship to the grantor or the beneficiary, the grantor or
beneficiary, as appropriate, will be attributed with the stock interests
held in trust. An otherwise qualified trust will be ineffective to
insulate the grantor or beneficiary from attribution with the trust\'s
assets unless all voting stock interests held by the grantor or
beneficiary in the relevant broadcast licensee, cable television system
or daily newspaper are subject to said trust.

\(e\) Subject to paragraph (i) of this note, holders of non-voting stock
shall not be attributed an interest in the issuing entity. Subject to
paragraph (i) of this note, holders of debt and instruments such as
warrants, convertible debentures, options or other non-voting interests
with rights of conversion to voting interests shall not be attributed
unless and until conversion is effected.

(f)(1) A limited partnership interest shall be attributed to a limited
partner unless that partner is not materially involved, directly or
indirectly, in the management or operation of the media-related
activities of the partnership and the licensee or system so certifies.
An interest in a Limited Liability Company ("LLC") or Registered Limited
Liability Partnership ("RLLP") shall be attributed to the interest
holder unless that interest holder is not materially involved, directly
or indirectly, in the management or operation of the media-related
activities of the partnership and the licensee or system so certifies.

\(2\) For a licensee or system that is a limited partnership to make the
certification set forth in paragraph (f)(1) of this note, it must verify
that the partnership agreement or certificate of limited partnership,
with respect to the particular limited partner exempt from attribution,
establishes that the exempt limited partner has no material involvement,
directly or indirectly, in the management or operation of the media
activities of the partnership. For a licensee or system that is an LLC
or RLLP to make the certification set forth in paragraph (f)(1) of this
note, it must verify that the organizational document, with respect to
the particular interest holder exempt from attribution, establishes that
the exempt interest holder has no material involvement, directly or
indirectly, in the management or operation of the media activities of
the LLC or RLLP. The criteria which would assume adequate insulation for
purposes of this certification are described in the Memorandum Opinion
and Order in MM Docket No. 83-46, FCC 85-252 (released June 24, 1985),
as modified on reconsideration in the Memorandum Opinion and Order in MM
Docket No. 83-46, [FCC 86-410 (released November 28,
1986)](http://web2.westlaw.com/find/default.wl?rp=%2Ffind%2Fdefault.wl&vc=0&DB=1016&SerialNum=1986028977&FindType=Y&AP=&fn=_top&rs=WLW7.11&mt=Westlaw&vr=2.0&sv=Split).
Irrespective of the terms of the certificate of limited partnership or
partnership agreement, or other organizational document in the case of
an LLC or RLLP, however, no such certification shall be made if the
individual or entity making the certification has actual knowledge of
any material involvement of the limited partners, or other interest
holders in the case of an LLC or RLLP, in the management or operation of
the media-related businesses of the partnership or LLC or RLLP.

\(3\) In the case of an LLC or RLLP, the licensee or system seeking
insulation shall certify, in addition, that the relevant state statute
authorizing LLCs permits an LLC member to insulate itself as required by
our criteria.

\(g\) Officers and directors of a broadcast licensee, cable television
system or daily newspaper are considered to have a cognizable interest
in the entity with which they are so associated. If any such entity
engages in businesses in addition to its primary business of
broadcasting, cable television service or newspaper publication, it may
request the Commission to waive attribution for any officer or director
whose duties and responsibilities are wholly unrelated to its primary
business. The officers and directors of a parent company of a broadcast
licensee, cable television system or daily newspaper, with an
attributable interest in any such subsidiary entity, shall be deemed to
have a cognizable interest in the subsidiary unless the duties and
responsibilities of the officer or director involved are wholly
unrelated to the broadcast licensee, cable television system or daily
newspaper subsidiary, and a statement properly documenting this fact is
submitted to the Commission. \[This statement may be included on the
appropriate Ownership Report.\] The officers and directors of a sister
corporation of a broadcast licensee, cable television system or daily
newspaper shall not be attributed with ownership of these entities by
virtue of such status.

\(h\) Discrete ownership interests will be aggregated in determining
whether or not an interest is cognizable under this section. An
individual or entity will be deemed to have a cognizable investment if:

\(1\) The sum of the interests held by or through "passive investors" is
equal to or exceeds 20 percent; or

\(2\) The sum of the interests other than those held by or through
"passive investors" is equal to or exceeds 5 percent; or

\(3\) The sum of the interests computed under paragraph (h)(1) of this
note plus the sum of the interests computed under paragraph (h)(2) of
this note is equal to or exceeds 20 percent.

\(i\) Notwithstanding paragraphs (e) and (f) of this note, the holder of
an equity or debt interest or interests in a broadcast licensee, cable
television system, daily newspaper, or other media outlet subject to the
broadcast multiple ownership or cross-ownership rules ("interest
holder") shall have that interest attributed if:

\(1\) The equity (including all stockholdings, whether voting or
nonvoting, common or preferred) and debt interest or interests, in the
aggregate, exceed 33 percent of the total asset value, defined as the
aggregate of all equity plus all debt, of that media outlet; and

(2)(i) The interest holder also holds an interest in a broadcast
licensee, cable television system, newspaper, or other media outlet
operating in the same market that is subject to the broadcast multiple
ownership or cross-ownership rules and is attributable under paragraphs
of this note other than this paragraph (i); or

\(ii\) The interest holder supplies over fifteen percent of the total
weekly broadcast programming hours of the station in which the interest
is held. For purposes of applying this paragraph, the term, "market,"
will be defined as it is defined under the specific multiple or
cross-ownership rule that is being applied, except that for television
stations, the term "market," will be defined by reference to the
definition contained in the local television multiple ownership rule
contained in paragraph (b) of this section.

\(j\) "Time brokerage" (also known as "local marketing") is the sale by
a licensee of discrete blocks of time to a "broker" that supplies the
programming to fill that time and sells the commercial spot
announcements in it.

\(1\) Where two radio stations are both located in the same market, as
defined for purposes of the local radio ownership rule contained in
paragraph (a) of this section, and a party (including all parties under
common control) with a cognizable interest in one such station brokers
more than 15 percent of the broadcast time per week of the other such
station, that party shall be treated as if it has an interest in the
brokered station subject to the limitations set forth in paragraphs (a),
(c), and (d) of this section. This limitation shall apply regardless of
the source of the brokered programming supplied by the party to the
brokered station.

\(2\) Where two television stations are both located in the same market,
as defined in the local television ownership rule contained in paragraph
(b) of this section, and a party (including all parties under common
control) with a cognizable interest in one such station brokers more
than 15 percent of the broadcast time per week of the other such
station, that party shall be treated as if it has an interest in the
brokered station subject to the limitations set forth in paragraphs (b),
(c), (d) and (e) of this section. This limitation shall apply regardless
of the source of the brokered programming supplied by the party to the
brokered station.

\(3\) Every time brokerage agreement of the type described in this Note
shall be undertaken only pursuant to a signed written agreement that
shall contain a certification by the licensee or permittee of the
brokered station verifying that it maintains ultimate control over the
station's facilities including, specifically, control over station
finances, personnel and programming, and by the brokering station that
the agreement complies with the provisions of paragraphs (b), (c), and
(d) of this section if the brokering station is a television station or
with paragraphs (a), (c), and (d) if the brokering station is a radio
station.

\(k\) "Joint Sales Agreement" is an agreement with a licensee of a
"brokered station" that authorizes a "broker" to sell advertising time
for the "brokered station."

\(1\) Where two radio stations are both located in the same market, as
defined for purposes of the local radio ownership rule contained in
paragraph (a) of this section, and a party (including all parties under
common control) with a cognizable interest in one such station sells
more than 15 percent of the advertising time per week of the other such
station, that party shall be treated as if it has an interest in the
brokered station subject to the limitations set forth in paragraphs (a),
(c), and (d) of this section.

\(2\) Every joint sales agreement of the type described in this Note
shall be undertaken only pursuant to a signed written agreement that
shall contain a certification by the licensee or permittee of the
brokered station verifying that it maintains ultimate control over the
station's facilities, including, specifically, control over station
finances, personnel and programming, and by the brokering station that
the agreement complies with the limitations set forth in paragraphs (a),
(c), and (d) of this section.

Note 3 to § 73.3555: In cases where record and beneficial ownership of
voting stock is not identical (*e.g.*, bank nominees holding stock as
record owners for the benefit of mutual funds, brokerage houses holding
stock in street names for the benefit of customers, investment advisors
holding stock in their own names for the benefit of clients, and
insurance companies holding stock), the party having the right to
determine how the stock will be voted will be considered to own it for
purposes of these rules.

Note 4 to § 73.3555: Paragraphs (a) through (d) of this section will not
be applied so as to require divestiture, by any licensee, of existing
facilities, and will not apply to applications for assignment of license
or transfer of control filed in accordance with § 73.3540(f) or §
73.3541(b), or to applications for assignment of license or transfer of
control to heirs or legatees by will or intestacy, if no new or
increased concentration of ownership would be created among commonly
owned, operated or controlled media properties. Paragraphs (a) through
(d) will apply to all applications for new stations, to all other
applications for assignment or transfer, to all applications for major
changes to existing stations, and to applications for minor changes to
existing stations that implement an approved change in an FM radio
station\'s community of license or create new or increased concentration
of ownership among commonly owned, operated or controlled media
properties. Commonly owned, operated or controlled media properties that
do not comply with paragraphs (a) through (d) of this section may not be
assigned or transferred to a single person, group or entity, except as
provided in this Note or in the Report and Order in Docket No. 02-277,
released July 2, 2003 (FCC 02- 127).

Note 5 to § 73.3555: Paragraphs (b) through (e) of this section will not
be applied to cases involving television stations that are "satellite"
operations.   Such cases will be considered in accordance with the
analysis set forth in the Report and Order in MM Docket No. 87-8, FCC
91-182 (released July 8, 1991), in order to determine whether common
ownership, operation, or control of the stations in question would be in
the public interest.   An authorized and operating "satellite"
television station, the Grade B contour of which overlaps that of a
commonly owned, operated, or controlled "non-satellite" parent
television broadcast station, or the Grade A contour of which completely
encompasses the community of publication of a commonly owned, operated,
or controlled daily newspaper, or the community of license of a commonly
owned, operated, or controlled AM or FM broadcast station, or the
community of license of which is completely encompassed by the 2 mV/m
contour of such AM broadcast station or the 1 mV/m contour of such FM
broadcast station, may subsequently become a "non-satellite" station
under the circumstances described in the aforementioned Report and Order
in MM Docket No. 87-8. However, such commonly owned, operated, or
controlled "non-satellite" television stations and AM or FM stations
with the aforementioned community encompassment, may not be transferred
or assigned to a single person, group, or entity except as provided in
Note 4 of this section.   Nor shall any application for assignment or
transfer concerning such "non-satellite" stations be granted if the
assignment or transfer would be to the same person, group or entity to
which the commonly owned, operated, or controlled newspaper is proposed
to be transferred, except as provided in Note 4 of this section.

Note 6 to [§
73.3555](http://web2.westlaw.com/find/default.wl?rp=%2Ffind%2Fdefault.wl&vc=0&DB=1000547&DocName=47CFRS73.3555&FindType=L&AP=&fn=_top&rs=WLW7.11&mt=Westlaw&vr=2.0&sv=Split):
For purposes of this section a daily newspaper is one which is published
four or more days per week, which is in the dominant language in the
market, and which is circulated generally in the community of
publication. A college newspaper is not considered as being circulated
generally.

Note 7 to § 73.3555:  The Commission will entertain applications to
waive the restrictions in paragraph (b) and (c) of this section (the
local television ownership rule and the radio/television cross-ownership
rule) on a case-by-case basis. In each case, we will require a showing
that the in-market buyer is the only entity ready, willing, and able to
operate the station, that sale to an out-of-market applicant would
result in an artificially depressed price, and that the waiver applicant
does not already directly or indirectly own, operate, or control
interest in two television stations within the relevant DMA. One way to
satisfy these criteria would be to provide an affidavit from an
independent broker affirming that active and serious efforts have been
made to sell the permit, and that no reasonable offer from an entity
outside the market has been received. We will entertain waiver requests
as follows:\
\
(1) If one of the broadcast stations involved is a "failed" station that
has not been in operation due to financial distress for at least four
consecutive months immediately prior to the application, or is a debtor
in an involuntary bankruptcy or insolvency proceeding at the time of the
application.\
\
(2) For paragraph (b) of this section only, if one of the television
stations involved is a "failing" station that has an all-day audience
share of no more than four per cent; the station has had negative cash
flow for three consecutive years immediately prior to the application;
and consolidation of the two stations would result in tangible and
verifiable public interest benefits that outweigh any harm to
competition and diversity.\
\
(3) For paragraph (b) of this section only, if the combination will
result in the construction of an unbuilt station. The permittee of the
unbuilt station must demonstrate that it has made reasonable efforts to
construct but has been unable to do so.

Note 8 to § 73.3555: Paragraph (a)(1) of this section will not apply to
an application for an AM station license in the 535-1605 kHz band where
grant of such application will result in the overlap of 5 mV/m
groundwave contours of the proposed station and that of another AM
station in the 535-1605 kHz band that is commonly owned, operated or
controlled if the applicant shows that a significant reduction in
interference to adjacent or co-channel stations would accompany such
common ownership. Such AM overlap cases will be considered on a
case-by-case basis to determine whether common ownership, operation or
control of the stations in question would be in the public interest.
Applicants in such cases must submit a contingent application of the
major or minor facilities change needed to achieve the interference
reduction along with the application which seeks to create the 5 mV/m
overlap situation.

Note 9 to § 73.3555: Paragraph (a)(1) of this section will not apply to
an application for an AM station license in the 1605-1705 kHz band where
grant of such application will result in the overlap of the 5 mV/m
groundwave contours of the proposed station and that of another AM
station in the 535-1605 kHz band that is commonly owned, operated or
controlled. Paragraphs (d)(1)(i) and (d)(1)(ii) of this section will not
apply to an application for an AM station license in the 1605-1705 kHz
band by an entity that owns, operates, controls or has a cognizable
interest in AM radio stations in the 535-1605 kHz band.

Note 10 to §73.3555: Authority for joint ownership granted pursuant to
Note 9 will expire at 3 a.m. local time on the fifth anniversary for the
date of issuance of a construction permit for an AM radio station in the
1605-1705 kHz band.

**APPENDIX B**

**Final Regulatory Flexibility Analysis**

1.  As required by the Regulatory Flexibility Act of 1980, as amended
    (RFA),[^486] an Initial Regulatory Flexibility Analysis (IRFA) was
    incorporated in the Notice of Proposed Rulemaking (*NPRM*) in MB
    Docket No. 02-277.[^487] The Commission sought written public
    comment on the proposals in the *NPRM* including comment on the
    IRFA. The Commission also prepared a Supplemental Initial Regulatory
    Flexibility Analysis (Supplemental IRFA) of the possible significant
    economic impact on small entities of the proposals in the *Further
    Notice of Proposed* *Rulemaking* (*Further Notice*).[^488] The
    Commission sought written public comment on the *Further Notice*,
    including comment on the Supplemental IRFA. This present Final
    Regulatory Flexibility Analysis (FRFA) conforms to the RFA.[^489]

> **A. Need for, and Objectives of, the *Report and Order* *and Order on
> Reconsideration* (*Order*)**

163. The *Order* concludes the Commission's 2006 Quadrennial Review of
     the broadcast ownership rules. This review encompasses the
     newspaper/broadcast cross-ownership rule, the radio-television
     cross-ownership rule, the local television multiple ownership rule,
     the local radio ownership rule, and the dual network rule.[^490]
     The rules are reviewed under Section 202(h) of the
     Telecommunications Act of 1996 ("1996 Act"),[^491] which requires
     the Commission to review its ownership rules (except the national
     television ownership limit) every four years and "determine whether
     any of such rules are necessary in the public interest as the
     result of competition."[^492] Under Section 202(h), the Commission
     "shall repeal or modify any regulation it determines to be no
     longer in the public interest." [^493] The Commission modifies the
     newspaper/broadcast cross-ownership rule and retains the other
     broadcast ownership rules currently in effect.

164. The Commission's approach in this *Order* is a cautious approach
     that balances the concerns of many commenters that it not permit
     excessive consolidation, with concerns of other commenters that it
     afford some relief to assure continued diversity and investment in
     local news programming by a modest loosening of the 32 year-old
     prohibition on newspaper/broadcast cross-ownership. The Commission
     believes that the decisions it adopts in the *Order* serve our
     public interest goals, appropriately take account of the current
     media marketplace, and comply with our statutory responsibilities.

**B. Legal Basis**

165. This *Order* is adopted pursuant to 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. Summary of Significant Issues Raised by Public Comments in
> Response to the IRFA and the Supplemental IRFA**

166. The Commission received no comments in direct response to the IRFA
     and the Supplemental IRFA. However, the Commission received
     comments that discuss issues of interest to small entities. These
     comments are discussed in the section of this FRFA discussing the
     steps taken to minimize significant impact on small entities, and
     the significant alternatives considered.

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

167. 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.[^494] The RFA defines
     the term "small entity" as having the same meaning as the terms
     "small business," "small organization," and "small governmental
     entity" under Section 3 of the Small Business Act.[^495] In
     addition, the term "small business" has the same meaning as the
     term "small business concern" under the Small Business Act.[^496] 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.[^497]

168. **Television Broadcasting.** In this context, the application of
     the statutory definition to television stations is of concern. The
     Small Business Administration defines a television broadcasting
     station that has no more than \$13 million in annual receipts as a
     small business. Business concerns included in this industry are
     those "primarily engaged in broadcasting images together with
     sound."[^498] According to Commission staff review of the BIA
     Financial Network, Inc. Media Access Pro Television Database as of
     December 7, 2007, about 825 (66 percent) of the 1,250 commercial
     television stations in the United States have revenues of \$13
     million or less. However, in assessing whether a business entity
     qualifies as small under the above definition, business control
     affiliations[^499] must be included. Our estimate, therefore,
     likely overstates the number of small entities that might be
     affected by any changes to the ownership rules, because the revenue
     figures on which this estimate is based do not include or aggregate
     revenues from affiliated companies.

169. An element of the definition of "small business" is that the entity
     not be dominant in its field of operation. The Commission is unable
     at this time and in this context to define or quantify the criteria
     that would establish whether a specific television station is
     dominant in its market of operation. Accordingly, the foregoing
     estimate of small businesses to which the rules may apply does not
     exclude any television stations from the definition of a small
     business on this basis and is therefore over-inclusive to that
     extent. An additional element of the definition of "small business"
     is that the entity must be independently owned and operated. 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.

170. **Radio Broadcasting.** The Small Business Administration defines a
     radio broadcasting entity that has \$6.5 million or less in annual
     receipts as a small business.[^500] Business concerns included in
     this industry are those "primarily engaged in broadcasting aural
     programs by radio to the public."[^501] According to Commission
     staff review of the BIA Financial Network, Inc. Media Access Radio
     Analyzer Database as of December 7, 2007, about 10,500 (95 percent)
     of 11,050 commercial radio stations in the United States have
     revenues of \$6.5 million or less. We note, however, that in
     assessing whether a business entity qualifies as small under the
     above definition, business control affiliations[^502] must be
     included. Our estimate, therefore, likely overstates the number of
     small entities that might be affected by any changes to the
     ownership rules, because the revenue figures on which this estimate
     is based do not include or aggregate revenues from affiliated
     companies.

171. In this context, the application of the statutory definition to
     radio stations is of concern. 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 and in this context to define
     or quantify the criteria that would establish whether a specific
     radio station is dominant in its field of operation. Accordingly,
     the foregoing estimate of small businesses to which the rules may
     apply does not exclude any radio station from the definition of a
     small business on this basis and is therefore over-inclusive to
     that extent. 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.

172. **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.[^503] Census Bureau data for
     2002 show that there were 5,159 firms in this category that
     operated for the entire year.[^504] Of this total, 5,065 firms had
     employment of 499 or fewer employees, and an additional 42 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.

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

173. Broadcasters whose newspaper/broadcast combination is approved
     under the presumption that a proposed newspaper broadcast
     combination is consistent with the public interest when it
     initiates the programming of local newscasts of at least seven
     hours per week on a broadcast outlet that otherwise was not
     offering local newscasts prior to the combined operations must
     report to the Commission annually regarding how they have followed
     through on their commitment to initiate at least seven hours a week
     of local news. The *Order* modestly revises the newspaper/broadcast
     cross-ownership rule and otherwise retains the broadcast ownership
     rules currently in effect. With the exception of the foregoing
     reporting requirement, the *Order* imposes no increased reporting,
     recordkeeping or other compliance requirements.

> **F. Steps Taken to Minimize Significant Impact on Small Entities and
> Significant Alternatives Considered**

174. 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.[^505]

175. The *Order* modestly revises the newspaper/broadcast
     cross-ownership rule. Under the new rule, the Commission presumes a
     proposed newspaper/broadcast transaction is not inconsistent with
     the public interest if it meets the following test: (1) the market
     at issue is one of the 20 largest Nielsen Designated Market Areas
     ("DMAs"); (2) the transaction involves the combination of only one
     major daily newspaper and only one television or radio station; (3)
     if the transaction involves a television station, at least eight
     independently owned and operating major media voices (defined to
     include major newspapers and full-power TV stations) would remain
     in the DMA following the transaction; and (4) if the transaction
     involves a television station, that station is not among the top
     four ranked stations in the DMA. All other proposed
     newspaper/broadcast transactions would continue to be presumed not
     in the public interest.

176. Under the new rule, the negative presumption will be reversed in
     two circumstances. First, the newspaper or broadcast station would
     have to be considered "failed" or "failing." To be deemed "failed,"
     the newspaper or broadcast station would have to have ceased
     publication or gone dark at least four months before the filing of
     an application, or be in bankruptcy proceedings. To be treated as
     "failing," the applicant must show that (a) the broadcast station
     has had an all-day audience share of 4 percent or lower, (b) the
     newspaper or broadcast station has had a negative cash flow for the
     previous three years, (c) the combination will produce public
     interest benefits, and (d) the in-market buyer is the only
     reasonably available candidate willing and able to acquire and
     operate the newspaper or station. Second, the negative presumption
     will be reversed when the combination is with a broadcast station
     that was not offering local newscasts prior to the combination, and
     the station will initiate at least seven hours per week of local
     news programming after the combination. Under the new rule, the
     Commission would consider a negative presumption as establishing a
     high hurdle as it reviews the transactions on a case-by-case basis.
     In particular, applicants attempting to overcome a negative
     presumption about a newspaper television combination will need to
     demonstrate by clear and convincing evidence that post-merger the
     merged entity will increase the diversity of independent news
     outlets (*e.g.*, separate editorial and news coverage decisions)
     and increase competition among independent news sources in the
     relevant market. The Commission will use the following factors to
     inform its evaluation: (1) the extent to which cross-ownership will
     serve to increase the amount of local news disseminated through the
     affected media outlets in the combination; (2) whether each
     affected media outlet in the combination will exercise its own
     independent news judgment; (3) the level of concentration in the
     Nielsen DMA; and (4) the financial condition of the newspaper or
     broadcast station, and if the newspaper or broadcast station is in
     financial distress, the owner's commitment to invest significantly
     in newsroom operations. This approach will permit the Commission to
     balance the needs of the public for media and viewpoint diversity
     with its concerns about the financial health of traditional media
     outlets in the context of each particular transaction.

177. The Commission considered other alternatives, but the *Order*
     retains the other media ownership rules currently in effect. The
     Commission believes that the decisions it adopts in the *Order*
     serve our public interest goals, appropriately take account of the
     current media marketplace, and comply with our statutory
     responsibilities. It retains the radio/television cross-ownership
     rule currently in effect[^506] to provide protection for diversity
     goals in local markets and thereby serve the public interest.

178. The *Order* finds that restrictions on common ownership of
     television stations in local markets continue to be necessary in
     the public interest to protect competition for viewers and in local
     television advertising markets. The Commission concludes that, in
     order to preserve adequate levels of competition within local
     television markets, the local TV ownership rule as it is currently
     in effect should be retained. Accordingly, an entity may own two
     television stations in the same DMA if: (1) the Grade B contours of
     the stations do not overlap; or (2) at least one of the stations in
     the combination is not ranked among the top four stations in terms
     of audience share, *and* at least eight independently owned and
     operating commercial or non-commercial full-power broadcast
     television stations would remain in the DMA after the combination.
     To determine the number of voices remaining after the merger, the
     Commission counts those broadcast television stations whose Grade B
     signal contours overlap with the Grade B signal contour of at least
     one of the stations that would be commonly owned.[^507] With
     respect to the waiver standard for the local TV ownership rule, we
     will reinstate our requirement that a waiver applicant demonstrate
     that there is no buyer outside the market willing to purchase the
     station at a reasonable price. Reinstating this requirement will
     promote the market entry of small businesses, including minority-
     and women-owned businesses, because it will increase the likelihood
     that they will learn of purchasing opportunities.

179. The Commission does not revise its decision that DMAs are the more
     precise geographic markets. Nonetheless, in the instant *Order*,
     unlike in the *2002 Biennial Review Order*, we are not relaxing the
     local television ownership rule, and, accordingly, to avoid
     disruption to settled expectations, we retain the Grade B overlap
     provision. Furthermore, we believe that maintaining the Grade B
     provision will promote television service in rural areas by
     continuing to enable station owners to build or purchase an
     additional station in a remote corner of the DMA, beyond the reach
     of their Grade B signal, without regard to the top four/eight
     voices restriction.

180. The *Order* concludes that the current local radio ownership rule
     remains "necessary in the public interest" to protect competition
     in local radio markets. As directed by the *Prometheus* court, the
     Commission also provides a reasoned justification for our decision
     to retain the existing numerical limits on local radio ownership
     and the AM subcaps. In addition, we deny or dismiss a number of
     pending petitions for reconsideration of the Commission's action
     concerning the local radio ownership rule in the *2002 Biennial
     Review Order*. Accordingly, an entity may own, operate, or
     control (1) up to eight commercial radio stations, not more than
     five of which are in the same service (*i.e*., AM or FM), in a
     radio market with 45 or more full-power, commercial and
     noncommercial radio stations; (2) up to seven commercial radio
     stations, not more than four of which are in the same service, in a
     radio market with between 30 and 44 (inclusive) full-power,
     commercial and noncommercial radio stations; (3) up to six
     commercial radio stations, not more than four of which are in the
     same service, in a radio market with between 15 and 29 (inclusive)
     full-power, commercial and noncommercial radio stations; and (4) up
     to five commercial radio stations, not more than three of which are
     in the same service, in a radio market with 14 or fewer full-power,
     commercial and noncommercial radio stations, except that an entity
     may not own, operate, or control more than 50 percent of the
     stations in such a market.[^508] Retaining the AM subcap serves the
     public interest because the relative affordability of radio
     compared to other mass media makes it a likely avenue for new entry
     into the media business, particularly by small businesses.

181. For the same reasons recited by the Commission in 2002, we continue
     to believe that the dual network rule is necessary in the public
     interest to promote competition and localism. Accordingly, the
     *Order* retains the dual network rule in its current form. No
     petitions were filed asking the Commission to reconsider its
     decision to retain the rule, and no challenges were filed in
     *Prometheus*. The Commission sought comment in th*e Further Notice*
     on whether the dual network rule remains necessary in the public
     interest to promote the Commission's policy goals.[^509] Almost all
     of the few parties commenting on the rule in this proceeding
     support retaining the rule in its current form. Other parties argue
     that relaxing or eliminating the rule would increase concentration
     to the detriment of competition, diversity, and localism.[^510] No
     specific changes to the dual network rule were proposed,[^511] and
     only two parties - Fox and CBS - oppose retaining the rule in any
     form.[^512] Neither of these parties has provided evidence
     convincing us that a departure from our 2002 decision to retain the
     rule in its current form is warranted.

182. The *Order* finds that the Commission is foreclosed from addressing
     the issue of the UHF discount in this proceeding by the 2004
     Consolidated Appropriations Act. Although the Appropriations Act
     did not specifically mention the UHF discount, the *Prometheus*
     court observed that the statutory 39 percent national cap would be
     altered if the UHF discount were modified. The court observed that
     the Appropriations Act amended Section 202(h) to exclude "any rules
     relating to" the 39 percent national cap, and determined that the
     UHF discount was a rule "relating to" the national TV cap. The
     Third Circuit concluded that Congress "apparently intended to
     insulate the UHF discount from periodic review," but left open the
     possibility that the Commission may consider the discount in a
     rulemaking "outside the context of Section 202(h)."[^513]
     Accordingly, the *Order* concludes that the UHF discount is
     insulated from review under Section 202(h).

183. The *Order* notes that in the pending proceeding entitled *Public
     Interest Obligations of TV Broadcast Licensees*[^514] commenters
     ask the Commission to impose additional "public interest"
     obligations on television broadcasters. The *Order* explains that
     some of the issues raised in that proceeding have already been
     resolved by the Commission. With respect to other ideas raised in
     this proceeding such as whether the agency should establish more
     specific minimum public interest requirements for licensees and how
     broadcasters could improve political candidates' access to
     television, the Commission declines to take any further action at
     this time. Nevertheless, to the extent that circumstances change,
     the Commission agrees to revisit this decision and initiate
     proceedings as appropriate.

> **G. Report to Congress**

184. The Commission will send a copy of this *Order*, including this
     FRFA, in a report to Congress and the Government Accountability
     Office, pursuant to the Congressional Review Act.[^515] In
     addition, the Commission will send a copy of this *Order*,
     including this FRFA, to the Chief Counsel for Advocacy of the Small
     Business Administration. A copy of this *Order* and FRFA (or
     summaries thereof) will also be published in the Federal
     Register.[^516]

**STATEMENT OF**

**CHAIRMAN KEVIN J. MARTIN**

Re: *In the Matter of 2006 Quadrennial Regulatory Review*

Over the past year and a half the Commission has had to grapple with the
most contentious and divisive issue to come before it: the review of the
media ownership rules. Today's Order strikes a balance between
preserving the values that make up the foundation of our media
regulations while ensuring those regulations keep apace with the
marketplace of today.

A robust marketplace of ideas is by necessity one that reflects varied
perspectives and viewpoints. Indeed, the opportunity to express diverse
viewpoints lies at the heart of our democracy. To that end, the FCC's
media ownership rules are intended to further three core goals:
competition, diversity, and localism.

Section 202(h) of the 1996 Telecommunications Act, as amended, requires
the Commission to periodically review its broadcast ownership rules to
determine "whether any of such rules are necessary in the public
interest as a result of competition." It goes on to read, "The
Commission shall repeal or modify any regulation it determines to be no
longer in the public interest."

In 2003, the Commission conducted a comprehensive review of its media
ownership rules, significantly reducing the restrictions on owning
television stations, radio stations and newspapers in the same market
and nationally. Congress and the court overturned almost all of those
changes.

There was one exception. The court specifically upheld the Commission's
determination that the absolute ban on newspaper/broadcast
cross-ownership was no longer necessary. The court agreed that
"...reasoned analysis supports the Commission's determination that the
blanket ban on newspaper/broadcast cross-ownership was no longer in the
public interest." It has been over four years since the Third Circuit
stayed the Commission's previous rules and over three years since the
Third Circuit instructed the Commission to respond to the court with
amended rules.

It is against this backdrop that the FCC undertook a lengthy, spirited,
and careful reconsideration of our media ownership rules.

In 2003, when we last conducted a review of the media ownership rules,
many expressed concern about the process. Specifically, people
complained that there were not enough hearings, not enough studies, and
not enough opportunity for comments and public input. When we began
eighteen months ago, the Commission committed to conducting this
proceeding in a manner that was more open and allowed for more public
participation.

I believe that is what the Commission has done. First, we provided for a
long public comment period of 120 days, which we subsequently extended.
We held six hearings across the country at a cost of more than
\$200,000: one each in Los Angeles, California, Nashville, Tennessee,
Harrisburg, Pennsylvania, Tampa Bay, Florida, Chicago, Illinois, and
Seattle, Washington. And, we held two additional hearings specifically
focused on localism in Portland, Maine and in Washington, DC. The goal
of these hearings was to more fully and directly involve the American
people in the process.

We listened to and recorded thousands of oral comments, and allowed for
extensions of time to file written comments on several occasions. We've
received over 166,000 written comments in this proceeding.

We spent almost \$700,000 on ten independent studies. I solicited and
incorporated input from all of my colleagues on the Commission about the
topics and authors of those studies. We put those studies out for peer
review and for public comment and made all the underlying data available
to the public.

Although not required, I took the unusual step of sharing with the
public the actual text of the one rule I thought we should amend.
Because of the intensely controversial nature of the media ownership
proceeding and my desire for an open and transparent process, I wanted
to ensure that Members of Congress and the public had the opportunity to
review my proposal prior to any Commission action.

We cannot ignore the fact that the media marketplace is considerably
different than it was when the newspaper/broadcast cross-ownership rule
was put in place more than thirty years ago. Back then, cable was a
nascent service, satellite television did not exist and there was no
Internet. Indeed, the newspaper/broadcast cross-ownership rule is the
only rule not to have been updated in 3 decades, despite that fact that
FCC Chairmen -- both Democrat and Republican---have advocated doing so.
In fact, Chairman Reed Hundt argued for relaxation in 1996 noting, "the
newspaper/broadcast cross-ownership rule is right now impairing the
future prospects of an important source of education and information:
the newspaper industry." Application of Capital Cities/ABC, Inc.,
Memorandum Op. & Order, 11 FCC Rcd 5841, 5906 (1996). And noted above,
in 2003 the Third Circuit recognized this fact when it upheld the
Commission's elimination of the newspaper/broadcast cross-ownership ban,
affirming the Commission's determination that it was "no longer in the
public interest."

Consumers have benefited from the explosion of new sources of news and
information. But according to almost every measure, newspapers are
struggling. At least 300 daily papers have stopped publishing over the
past thirty years. Their circulation is down, and their advertising
revenue is shrinking.

Newspapers in financial difficulty oftentimes have little choice but to
scale back local news gathering to cut costs. In 2007 alone, 24 newsroom
staff at The Boston Globe were fired, including 2 Pulitzer Prize-winning
reporters; the Minneapolis Star Tribune fired 145 employees, including
50 from their newsroom; 20 were fired by the Rocky Mountain News; the
Detroit Free Press and The Detroit News announced cuts totaling 110
employees; and the San Francisco Chronicle planned to cut 25% of its
newsroom staff.

Some have suggested that it is not in the business of the FCC to
regulate newspapers and their condition should be of no concern to us.
But if that is the case, then why do we have rules about what newspapers
can or cannot own?

Without newspapers and their local news gathering efforts, we would be
worse off. We would be less informed about our communities and have
fewer outlets for the expression of independent thinking and a diversity
of viewpoints. I believe a vibrant print press is one of the
institutional pillars upon which our free society is built. In their
role as watchdog and informer of the citizenry, newspapers often act as
a check on the power of other institutions and are the voice of the
people. Allowing cross-ownership may help to forestall the erosion in
local news coverage by enabling companies to share the high fixed costs
of newsgathering across multiple media platforms.

Today's Order amends the 32-year-old absolute ban on newspaper/broadcast
cross-ownership. The revised newspaper/broadcast cross-ownership rule
would allow a newspaper to purchase a radio station in the largest 20
cities in the country or a television station in such cities---but not
one of the top four television stations---as long as 8 independent major
voices remain in the market. This relatively minor loosening of the ban
on newspaper/broadcast cross-ownership in markets where there are many
voices and sufficient competition will help strike a balance between
ensuring the quality of local news gathering while guarding against too
much concentration.

As I have previously stated, I always intended the negative presumption
for all other transactions to be a very high hurdle. As I testified
before Congress, I invited suggestions from my colleagues and those in
the public interest community as to how we could tighten that standard
so everyone would agree it was not a loophole. The edits we included in
the order were made at the suggestion of the public interest and
consumer advocacy groups to make more meaningful the presumption against
transactions in smaller markets.

I believe we did that today by expressly stating that we will require
any applicant attempting to overcome a negative presumption to
demonstrate by clear and convincing evidence that post-merger, the
merged entity will increase the diversity of independent news outlets
and increase competition among independent news sources in the relevant
market.  Our analysis of the four factors will inform this
determination.

In contrast to the FCC's actions 4 years ago and in response to many of
the public comments we received in the proceeding, we do not loosen any
other ownership rule. We do not permit companies to own any more radio
or television stations either in a single market or nationally. Indeed,
this rule change is notably more conservative in approach than the
remanded newspaper/broadcast cross-ownership rule that the Commission
adopted in 2003. That rule would have allowed transactions in the top
170 markets. The rule we adopt today would allow only a subset of
transactions in only the top 20 markets, which would still be subject to
an individualized determination that the transaction is in the public
interest.

The new rule balances the need to support the availability and
sustainability of local news while not significantly increasing local
concentration or harming diversity.

As the Commission revises its media ownership rules, we must not lose
sight of two critical public interest goals -- localism and diversity.
Indeed, I believe that it is incumbent upon the Commission to do
everything it can right now to further these goals and I am pleased the
Commission is acting on both today. As difficult as these issues are
they are some of the most important to come before us. In fact as many
have noted throughout this proceeding, promoting localism and diversity
as well as responding to the Congress and the court on the media
ownership rules themselves, have been pending before the Commission for
far too long. These issues also are ripe for decision and should not be
put off any longer.

I appreciate that some of my colleagues and I do not share the same
views on the amending the newspaper broadcast cross-ownership rule. But
I reject the claims that the process has been unfair or even too rushed.
At every step of the process during the last 18 months, whether it came
to picking dates or cities for public hearings or commissioning
independent studies, I have continually sought, albeit unsuccessfully,
consensus with my colleagues throughout this process. For instance, I
provided my colleagues a public notice announcing dates for all the
remaining hearings, including the Seattle hearing, over a month before
it was held, but they did not vote to release it. When we finally
announced the Seattle hearing date publicly a week prior to the hearing,
they objected that we hadn't provided enough notice. They also claim I
didn't listen to the comments of the people in Seattle. However, only 2
people even mentioned newspaper cross-ownership, and one in fact
supported relaxation. Indeed, the majority of people expressed concern
about consolidation generally, and I believe we are responding by *not*
changing the local TV rule, the local radio rule, the local TV/radio
rule, the national TV cap, or the national cable cap.

Unfortunately, my Democratic colleagues have been quick to say no to
whatever was proposed but never getting to yes or even putting forward
their own ideas on the substance of the issues before us.

They wanted public hearings. We agreed. And we provided six.

They asked for independent studies. We agreed.

Only one Commissioner, later in the process, suggested authors for a
study. We agreed again, and created another study for those authors to
do.

They asked for the studies to be made public. We agreed. They then
complained that the studies were posted on the web too soon.

They asked for the studies to be peer reviewed. We agreed. They asked
for peer reviews to be made public. We agreed. They then presented us
with new individuals they wanted to do additional peer reviews. We again
agreed. They then demanded an entirely separate comment cycle on just
the peer reviews.

They asked me to complete the localism hearings. We agreed. They then
wanted to complete the localism report. We again agreed. They wanted an
NPRM on localism. We again agreed. They then wanted more time for the
Commission to consider the localism issues and do a final order.

And finally, they demanded I share with the public my proposed rule. I
agreed. They then criticized me for making the proposal public in *The*
*New York Times*. They asked for time for the public to comment on my
proposal. I agreed. They then demanded a new NPRM on the proposal with
many months of comment.

This is a long way of stating the obvious. For a year and half, I have
attempted to respond to the legitimate concerns about conducting an open
and transparent process with ample opportunity for public input. At each
step along the way, as I was crossing the goal line, the goal posts were
moved.

While I have and will continue to seek consensus, I have come to the
conclusion that it won't ever be possible to ever reach consensus on the
media ownership issue. Nevertheless, it is important for the Commission
and for the American people that we render a decision on this issue. We
must respond to the court remand and to Congress which requires us to
review the rules. And we must provide certainty to the media industry
which for years has operated in a climate of uncertainty.

In sum, I believe the time has come to act. And I believe today's very
modest relaxation of the one rule not relaxed since 1975 is appropriate.

**ATTACHMENT**

**TIMELINE OF MEDIA OWNERSHIP REVIEW PROCESS**

**July 2, 2003** Commission releases 2002 Biennial Review Order

**June 24, 2004** The Third Circuit Court of Appeals issues its decision
in *Prometheus v. FCC*, affirming some Commission decisions and
remanding others for further justification or modification

**July 24, 2006** The Commission releases *Further Notice of Proposed
Rulemaking* to call for comment on the rules and to seek arguments and
factual data about their impact on competition, localism and diversity.

**September 8, 2006** FCC Announces Public Hearing in Los Angeles on
Media Ownership

**September 26, 2006** FCC Announces Details for Public Hearing on Media
Ownership in Los Angeles, CA

**September 29, 2006** FCC Announces Further Details for Public Hearing
on Media Ownership in Los Angeles, CA

**October 6, 2006** Public Hearing on Media Ownership, Los Angeles & El
Segundo, CA

**October 23, 2006** Comments due in response to July 26, 2006 Further
Notice of Proposed Rulemaking

**November 14, 2006** FCC Announces Public Hearing in Nashville,
Tennessee on Media Ownership

**November 22, 2006** FCC Names Economic Studies to Be Conducted As Part
of Media Ownership Rules Review

**December 1, 2006** FCC Announces Details for Public Hearing on Media
Ownership in Nashville, Tennessee

**December 5, 2006** FCC Announces Revised Agenda for Public Hearing

on Media Ownership in Nashville, Tennessee

**December 11, 2006** FCC Announces Further Revised Agenda for Public
Hearing on Media Ownership in Nashville, Tennessee

**December 11, 2006** Public Hearing on Media Ownership, Nashville, TN

**January 16, 2007** Reply Comments due in response to July 26, 2006
Further Notice of Proposed Rulemaking

**February 8, 2007** FCC Announces Public Hearing in Harrisburg, PA on
Media Ownership

**February 16, 2007** FCC Announces Details for Public Hearing on Media
Ownership in Harrisburg, PA

**February 21, 2007** FCC Announces Further Details for Public Hearing
on Media Ownership in Harrisburg, Pennsylvania

**February 23, 2007** Public Hearing on Media Ownership, Harrisburg, PA

**March 13, 2007** FCC Announces Public Hearing on Media Ownership in
Tampa-St. Petersburg, Florida Area

**April 13, 2007** FCC Announces Details for Public Hearing on Media
Ownership in Tampa-St. Petersburg Florida

**April 23, 2007** FCC Announces Agenda for Public Hearing on Media
Ownership in Tampa-St. Petersburg Florida

**April 26, 2007** FCC Announces Revised Agenda for Public Hearing on
Media Ownership in Tampa-St. Petersburg Florida

**April 30, 2007** Public Hearing on Media Ownership, Tampa, FL

**June 8, 2007** FCC Announces Localism Hearing in Portland, Maine June
28, 2007

**June 12, 2007** FCC Announces Details for Localism Hearing in
Portland, Maine on June 28

**June 25, 2007** FCC Announces Agenda for Public Hearing on Localism in
Portland, Maine

**June 28, 2007** FCC Holds Hearing on Localism Issues in Portland,
Maine

**July 19, 2007** FCC Announces Public Hearing on Media Ownership in
Chicago, Illinois

**July 31, 2007** FCC Releases and Seeks Comment on Research Studies on
Media Ownership

**August 1, 2007** FCC Releases Second Further Notice of Proposed
Rulemaking

**September 4, 2007** FCC Announces Details for Public Hearing on Media
Ownership in Chicago, Illinois

**September 17, 2007** FCC Announces Agenda for Public Hearing on Media
Ownership in Chicago, Illinois

**September 20, 2007** Public Hearing on Media Ownership, Chicago, IL

**September 28, 2007** Media Bureau Extends Filing Deadlines for
Comments on Media Ownership Studies

**October 1, 2007** Comments due in response to August 1, 2007 Second
Further Notice of Proposed Rulemaking

**October 16, 2007** Reply Comments due in response to August 1, 2007
Second Further Notice of Proposed Rulemaking

**October 22, 2007** Comments due in response to July 31, 2007 release
of media studies

**October 24, 2007** FCC to Hold Localism Hearing and Open Commission
Meeting, Wednesday, October 31, 2007

**October 29, 2007** FCC Announces Panelists for Public Hearing on
Localism at FCC Headquarters

**October 31, 2007** FCC Holds Public Hearing on Localism in Washington,
DC

**November 1, 2007** Reply Comments Due in response to July 31, 2007
release of media studies

**November 2, 2007** FCC Announces Public Hearing on Media Ownership in
Seattle, Washington

**November 8, 2007** FCC Announces Agenda and Witnesses for Public
Hearing on Media Ownership in Seattle, Washington

**November 9, 2007** Public Hearing on Media Ownership, Seattle, WA

**November 13, 2007** Chairman Martin Publishes Revision to
Newspaper/Broadcast Cross-Ownership Rule

**December 4, 2007** Letter sent from Secretary of Commerce, Carlos M.
Gutierrez to the Honorable Harry Reid, Senate Majority Leader,
expressing opposition to legislation that would delay FCC action on
media ownership rules

**December 11, 2007** The Commission waives the sunshine period
prohibition contained in section 1.1203 of the Commission's rules, 47
C.F.R. § 1.1203, until 5:30 pm on Friday, December 14, 2007

**December 14, 2007** Sunshine rules go into effect at 5:30pm; Last day
to comment on Chairman's proposed rule

**December 18, 2007** FCC Open Meeting

**DISSENTING STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

*Re. 2006 Quadrennial Media Ownership Review*

Today's decision would make George Orwell proud. We claim to be giving
the news industry a shot in the arm---but the real effect is to reduce
total newsgathering. We shed crocodile tears for the financial plight of
newspapers---yet the truth is that newspaper profits are about double
the S&P 500 average. We pat ourselves on the back for holding six field
hearings across the United States---yet today's decision turns a deaf
ear to the thousands of Americans who waited in long lines for an open
mike to testify before us. We say we have closed loopholes---yet we have
introduced new ones. We say we are guided by public comment---yet the
majority's decision is overwhelmingly opposed by the public as
demonstrated in our record and in public opinion surveys. We claim the
mantle of scientific research---even as the experts say we've asked the
wrong questions, used the wrong data, and reached the wrong conclusions.

I am not the only one disturbed by this illogical scenario. Congress and
the American people have done everything but march down to Southwest DC
and physically shake some sense into us. Everywhere we go, the questions
are the same: Why are we rushing to encourage more media merger frenzy
when we haven't addressed the demonstrated harms caused by previous
media merger frenzy? Women and minorities own low single-digit
percentages of America's broadcast outlets and big consolidated media
continues to slam the door in their faces. It's going to take some major
policy changes and a coordinated strategy to fix that. Don't look for
that from this Commission.

Instead we are told to be content with baby steps to help women and
minorities---but the fine print shows that the real beneficiaries will
be small businesses owned by white men. So even as it becomes abundantly
clear that the real cause of the disenfranchisement of women and
minorities is media consolidation, we give the green light to a new
round of---yes, you guessed it---media consolidation.

Local news, local music and local groups so often get shunted aside when
big media comes to town. Commissioner Adelstein and I have heard the
plaintive voices of thousands of citizens all across this land in dozens
of town meetings and public forums. From newscasters fired by chain
owners with corporate headquarters thousands of miles away to local
musicians and artists denied airtime because of big media's
homogenization of our music and our culture. From minorities reeling
from the way big media ignores their issues and caricatures them as
people to women saying the only way to redress their grievances is to
give them a shot to compete for use of the people's airwaves. From
public interest advocates fighting valiantly for a return of localism
and diversity to small, independent broadcasters who fight an uphill
battle to preserve their independence. It will require tough rules of
the road to redress our localism and diversity gaps. Do you see any such
rules being passed today? To the idea that license holders should give
the American people high quality programming in return for free use of
the public airwaves, the majority answers that we need more study of
problems that have been documented and studied to death for a decade and
more. Today's outcome is the same old same old: one more time, we're
running the fast-break for our big media friends and the four corner
stall for the public interest.

It is time for the American people to understand the game that's being
played here. Big media doesn't want to tell the full story, of course,
but I have heard first-hand from editorial page editors who have told me
they can cover any story, save one---media consolidation, and that they
have been instructed to stay away from that one. But that's another
story.

Today's story is a majority decision unconnected to good policy and not
even incidentally concerned with encouraging media to make our democracy
stronger. We are not concerned with gathering valid data, conducting
good research, or following the facts where they lead us.

Our motivations are less Olympian and our methodology far simpler---we
generously ask big media to sit on Santa's knee, tell us what it wants
for Christmas, and then push through whatever of these wishes are
politically and practically feasible. No test to see if anyone's been
naughty or nice. Just another big, shiny present for the favored few who
already hold an FCC license---and a lump of coal for the rest of us.
Happy holidays!

If you need convincing of just how non-expertly this expert agency has
been acting lately, you couldn't have a better example than the
formulation of the cross-ownership rule that the majority is adopting
today. I know it's a little detailed to see how the sausage is made, but
it's worth a listen.

On November 2, 2007---with just a week's notice---the FCC announced that
it would hold its final media ownership hearing in Seattle. Despite the
minimal warning, 1,100 citizens turned out to give intelligent and
impassioned testimony on how they believed the agency should write its
media ownership rules. Little did they know that the fix was already in,
and that the now infamous *New York Times* op-ed was in the works
announcing a highly-detailed cross-ownership proposal.

Put bluntly, those Commissioners and staff who flew out to Seattle with
staff, the sixteen witnesses, the Governor, the State Attorney General
and all the other public officials who came, plus the 1,100 Seattle
residents who had chosen to spend their Friday night waiting in line to
testify were, as Rep. Jay Inslee put it, treated like "chumps." Their
comments were not going to be part of the agency\'s formulation of a
draft rule---it was just for show, to claim that the public had been
given a chance to participate. The agency had treated the public like
children allowed to visit the cockpit of an airliner---not actually
allowed to fly the plane, of course, but permitted for a brief, false
moment to imagine that they were.

The *New York Times* op-ed appeared on November 13, the next business
day after the Seattle hearing. That same day, a unilateral public notice
was issued, providing just 28 days for people to comment on the specific
proposal, with no opportunity for replies. The agency received over 300
comments from scholars, concerned citizens, public interest advocates,
and industry associations---the overwhelming majority of which condemned
the Chairman's plan. But little did these commenters know that on
November 28, two weeks ***before*** their comments were even due, the
draft Order on newspaper-broadcast cross ownership had already been
circulated. Once again, public commenters were treated as unwitting and
unwilling participants in a Kabuki theater.

Then, last night at 9:44 pm---just a little more than twelve hours
before the vote was scheduled to be held and long after the Sunshine
period had begun---a significantly revised version of the Order was
circulated. Among other changes, the item now granted all sorts of
permanent new waivers and provided a significantly-altered new
justification for the 20-market limit. But the revised draft
mysteriously deleted the existing discussion of the "four factors" to be
considered by the FCC in examining whether a proposed combination was in
the public interest. In its place, the new draft simply contained the
cryptic words "\[Revised discussion to come\]." Although my colleagues
and I were not apprised of the revisions, *USA Today* fared better
because it apparently got an interview that enabled it to present the
Chairman's latest thinking. Maybe we really are the Federal Newspaper
Commission.

At 1:57 this morning, we received a new version of the proposed test for
allowing more newspaper-broadcast combinations. I can't say that I fully
appreciate the test's finer points given the lateness of the hour and
the fact that there was no time afforded to parse the finer points of
the new rule. But this much is clear: the new version keeps the old
loopholes and includes two new one pathways to cross ownership approval.
So please don't buy the line that the rule we adopt today involves fewer
loopholes---it adds new ones. Finally, this morning at 11:12 a.m. as I
was walking out my office door to come to this meeting, we received an
e-mail containing additional changes. The gist of one of these seems to
be that the Commission need not consider all of the "four factors" in
all circumstances.

This is not the way to do rational, fact-based, and public
interest-minded policy making. It's actually a great illustration of why
administrative agencies are required to operate under the constraints of
administrative process---and the problems that occur when they ignore
that duty. At the end of the day, process matters. Public comment
matters. Taking the time to do things right matters. A rule reached
through a slipshod process, and capped by a mad rush to the finish line,
will---purely on the merits---simply not pass the red face test. Not
with Congress. Not with the courts. Not with the American people.

It's worth stepping back for a moment from all the detail here to look
at the fundamental rationale behind today's terrible decision.
Newspapers need all the help they can get, we are told. A merger with a
broadcast station in the same city will give them access to a revenue
stream that will let them better fulfill their newsgathering mission. At
the same time, we are also assured, our rules will require "independent
news judgment" (at least among consolidators outside the top 20
markets). In other words, we can have our cake and eat it too---the
economic benefits of consolidation without the reduction of voices that
one would ordinarily expect when two news entities combine.

But how on earth can this be? To begin with, to the extent that the two
merged entities remain truly "independent," then there won't be the cost
savings that were supposed to justify the merger in the first place. On
the other hand, if independence merely means maintaining two
organizational charts for the same newsroom, then we won't have any more
reporters on the ground keeping an eye on government. Either way, we
can't have our cake and eat it, too.

Also, since when do unprofitable businesses support themselves by
merging with profitable ones---and then sink ***more*** resources into
the money-losing division simply as a public service? Think about it
this way. If any of us were employed by a struggling company, and we
suddenly learned that a Wall Street financier had obtained control,
would we (1) clap our hands with joy because we expect the new owner is
going to throw a bunch of cash our way and tell us to keep on doing what
we'd been doing, except more lavishly or (2) start to fear for our jobs
and brace for a steady diet of cost cutting?

Here's my prediction on how it will really work. Mergers will be
approved in both the top 20 and non-top-20 markets---towns big and
small---because the set of exceptions we announce today have all the
firmness of a bowl of Jell-O. Regardless of our supposed commitment to
"independent news judgment" the two entities' newsrooms will be almost
completely combined, with round after round of job cuts in order to cut
costs. It's interesting to hear the few proponents of this rule bemoan
the lost jobs that they say result from failing newspapers. Ask them
this: in this era of consolidation in so many industries, isn't cutting
jobs about the first thing a merged entity almost always does so it can
show Wall Street it is really serious about cutting costs and polishing
up the next quarterly report? These job losses are the ***result*** of
consolidation. And more consolidation will mean more lost jobs.
Newly-merged entities will attempt to increase their profit margins by
raising advertising rates and relentless cost-cutting. Herein is the
***real*** economic justification for media consolidation within a
single market.

The news isn't so good for other businesses in the consolidated market,
either. Think about the other broadcast stations there. It's just like
Wal-Mart coming to town---the existing news providers look around at the
new reality and figure out pretty fast that they ought to head for the
exit when it comes to producing news. Now, it may not be as stark as
actually cancelling the evening news---it could just mean doing more
sports or more weather or more ads during that half hour. But at the end
of the day, the combined entity is going to have a huge advantage in
producing news---and the other stations will make a reasonable
calculation to substantially reduce their investment in the business.
This is why, by the way, experts have been able to demonstrate---***in
the record before the FCC, using the FCC's own data**---*that cross
ownership leads to ***less*** total newsgathering in a local market. And
that has large and devastating effects on the diversity and vitality of
our civic dialogue.

Let's also be careful not get too carried away with the supposed premise
for all this contortionism, namely the poor state of local newspapers.
The death of the traditional news business is often greatly exaggerated.
The truth remains that the profit margins for the newspaper industry
last year averaged around 17.8%; the figure is even higher for broadcast
stations. As the head of the Newspaper Association of America put it in
a Letter to the Editor of the *Washington Post* on July 2 of this year:
"The reality is that newspaper companies remain solidly profitable and
significant generators of free cash flow." And as Member after Member
Congress has reminded us, our job is not to ensure that newspapers are
profitable---which they mostly are. Our job is to protect the principles
of localism, diversity and competition in our media.

Were newspapers momentarily discombobulated by the rise of the Internet?
Probably so. Are they moving now to turn threat into opportunity? Yes,
and with signs of success. Far from newspapers being gobbled up by the
Internet, we ought to be far more concerned with the threat of big media
joining forces with big broadband providers to take the wonderful
Internet we know down the same road of consolidation and control by the
few that has already inflicted such heavy damage on our traditional
media.

In the final analysis, the real winners today are businesses that are in
many cases quite healthy, and the real losers are going to be all of us
who depend on the news media to learn what's happening in our
communities and to keep an eye on local government. Despite all the talk
you may hear today about the threat to newspapers from the Internet and
new technologies, today's *Order* actually deals with something quite
old-fashioned. Powerful companies are using political muscle to sneak
through rule changes that let them profit at the expense of the public
interest. They are seeking to improve their economic prospects by
capturing a larger percentage of the news business in communities all
across the United States.

Let's get beyond the weeds of corporate jockeying and inking up our
rubber stamps for a new round of media consolidation to look for a
moment at what we are ***not*** doing today. That's the real story, I
think---that the important issues of minority and female ownership and
broadcast localism and how they are being short-changed by today's rush
to judgment.

[Minority and Female Ownership]{.underline}

Racial and ethnic minorities make up 33 percent of our population. They
own a scant 3 percent of all full-power commercial TV stations.  And
that number is plummeting.  Free Press recently released a study showing
that during just the past year the number of minority-owned full-power
commercial television stations declined by 8.5%, and the number of
African American-owned stations decreased ***by nearly 60%***.  It is
almost inconceivable that this shameful state of affairs could be
getting worse; yet here we are.

In most places there is something approaching unanimity that this has to
change. Broadcasters, citizens, Members of Congress, and every leading
civil rights organization agree that the status quo is not acceptable.
Each of my colleagues has recognized, I believe, that paltry levels of
minority and female ownership are a reality---which makes today's
decision all the more disappointing. There was a real opportunity to do
something meaningful today after years of neglect, and we blew it.

It didn't have to be this way. I proposed both a process and a solution.
We should have started by getting an accurate count of minority and
female ownership---the one that the Congressional Research Service and
the Government Accountability Office both just found that we didn't
have. The fact that we don't even know how many minority and female
owners there are is indicative of how low this issue is on the FCC's
list of priorities. We also should have convened an independent panel
proposed by Commissioner Adelstein, and endorsed by many, that would
have reviewed all of the proposals before us, prioritized them, and made
recommendations for implementation. We could have completed this process
in ninety days or less and then would have been ready to act.

Today's item ignores the pleas of the minority community to adopt a
definition of "Eligible Entity" that could actually help their plight.
Instead, the majority directs their policies at general "small
businesses"--- a decision that groups like Rainbow/Push and the National
Association of Black Owned Broadcasters assert will do little or nothing
for minority owners. Similarly, MMTC and the Diversity and Competition
Supporters conclude that they would rather have no package at all than
one that includes this definition. Lack of a viable definition poisons
the headwaters. Should we wonder why the fish are dying downstream?

So while I can certainly support the few positive changes in this item
that do not depend on the definitional issue---such as the adoption of a
clear non-discrimination rule---these are overshadowed by the truly
wasted opportunity to give potential minority and female owners a seat
at the table they have been waiting for and have deserved for far too
long. My fear now is that with cross ownership done, the attentions of
this Commission will turn elsewhere.

[Localism]{.underline}

At the same time that we have shamefully ignored the need to encourage
media ownership by women and minorities, we have also witnessed a
dramatic deterioration of the public interest performance of all our
licensees. We have witnessed the number of statehouse and city hall
reporters declining decade after decade, despite an explosion in state
and local lobbying. The number of channels have indeed multiplied, but
there is far less local programming and reporting being produced.

Are you interested in learning about local politics from the evening
news? About 8 percent of such broadcasts contain any local political
coverage at all, including races for the House of Representatives, and
that was during the 30 days before the last presidential election.
Interested in how TV reinforces stereotypes? Consider that the local
news is four times more likely to show a mug shot during a crime story
if the suspect is black rather than white.

The loss of localism impacts our music and entertainment, too. Just this
morning, I had an e-mail from a musician who took a trip of several
hundred miles and heard the same songs played on the car radio
everywhere he traveled. Local artists, independent creative artists and
small businesses are paying a frightful price in lost opportunity. Big
consolidated media dampens local and regional creativity, and that
begins to mess around pretty seriously with the genius of our nation.

All this is a travesty. We allow the nation\'s broadcasters to use half
a trillion dollars of spectrum---for free. In return, we require that
they serve the public interest: devoting at least some airtime for
worthy programs that inform viewers, support local arts and culture, and
educate our children---in other words, that aspire to something beyond
just minimizing costs and maximizing revenue.

Once upon a time, the FCC actually enforced this bargain by requiring a
thorough review of a licensee\'s performance every three years before
renewing the license. But during decades of market absolutism, we pared
that down to "postcard renewal," a rubber stamp every eight years with
no substantive review.

To begin with, the FCC needs to reinvigorate the license-renewal
process. We need to look at a station\'s record every three or four
years. I am disappointed that the majority so cavalierly dismisses this
idea. And we should be actually ***looking*** at this record. Did the
station show original programs on local civic affairs? Did it broadcast
political conventions? In an era where too many owners live thousands of
miles away from the communities they allegedly serve, do these owners
meet regularly with local leaders and the public to receive feedback?
Why don't we make sure that's done ***before*** we allow more
consolidation?

In 2004, the Commission opened up a Notice of Inquiry to consider ways
to improve localism by better enforcing the *quid pro quo* between the
nation's broadcasters and the public. The Notice addressed many of the
questions raised by earlier, dormant proceedings dating from years
before. Today's Localism Notice asks more questions and tees up
meritorious ideas---but again my question: why the rush to vote more
consolidation now, consolidation that has been the bane of localism, and
why put off systematic actions to redress the harms consolidation has
inflicted?

Our FCC cart is ahead of our horse. Before allowing Big Media to get
even bigger---and to start the predictable cycle of layoffs and
downsizing that is the inevitable result of, indeed the economic
rationale for, many types of mergers---we should be enforcing clear
obligations for each and every FCC licensee.

[Conclusion]{.underline}

Those who look for substantive action on these important issues
concerning localism and minorities will look in vain, I predict, once
the majority works its way on cross ownership. We are told that we
cannot deal with localism and minority ownership because that would
require ***delay***. But these questions have been before the Commission
for almost a decade---and they have been ignored year after year. These
issues could have been---should have been---teed up years ago. We begged
for that in 2003 when we sailed off on the calamitous rules proposed by
Chairman Powell and pushed through in another mad rush to judgment.
Don't tell me it can't be done. It should have been done years ago. And
we had the chance again this time around. Now, because of a situation
not of Commissioner Adelstein's or my making, we are accused of delaying
just because we want to make things better before the majority makes
them far worse. I see.

When I think about where the FCC has been and where it is today, two
conclusions:

First, the consolidation we have seen so far and the decision to treat
broadcasting as just another business has ***not*** produced a media
system that does a better job serving most Americans. Quite the
opposite. Rather than reviving the news business, it has led to
***less*** localism, ***less*** diversity of opinion and ownership,
***less*** serious political coverage, ***fewer*** jobs for journalists,
and the list goes on.

Second, I think we have learned that the purest form of commercialism
and high quality news make uneasy bedfellows. As my own hero, Franklin
Delano Roosevelt, put it in a letter to Joseph Pulitzer, "I have always
been firmly persuaded that our newspapers cannot be edited in the
interests of the general public from the counting room." So, too, for
broadcast journalism. This is not to say that good journalism is
incompatible with making a profit---I believe that both interests can
and must be balanced. But when TV and radio stations are no longer
required by law to serve their local communities, and are owned by huge
national corporations dedicated to cutting costs through economies of
scale, it should be no surprise that, in essence, viewers and listeners
have become the products that broadcasters sell to advertisers.

We could have been---should have been---here today lauding the best
efforts of government to reverse these trends and to promote a media
environment that actually strengthens American democracy rather than
weakens it. Instead, we are marking not just a lost opportunity but the
allowance of new rules that head media democracy in exactly the wrong
direction.

I take great comfort from the conclusion of another critic of the
current media system, Walter Cronkite, who said, \"America is a powerful
and prosperous nation. We certainly should insist upon, and can afford
to sustain, a media system of which we can be proud.\"

Now it's up to the rest of us. The situation isn't going to repair
itself. Big media is not going to repair it. This Commission is not
going to repair it. But the people, their elected representatives, and
attentive courts ***can*** repair it. Last time the Commission went down
this road, the majority heard and felt the outrage of millions of
citizens and Congress and then the court. Today's decision is just as
dismissive of good process as that earlier one, just as unconcerned with
what the people have said, just as heedless of the advice of our
oversight committees and many other Members of Congress, and just as
stubborn---perhaps even more stubborn---because this time it knows, or
should know, what's coming. Last time a lot of insiders were surprised
by the country's reaction. This time they should be forewarned. I hope,
I really hope, that today's majority decision will be consigned to the
fate it deserves and that one day in the not too distant future we can
look back upon it as an aberration from which we eventually recovered.
We have had a dangerous, decades-long flirtation with media
consolidation. I would welcome a little romance with the public interest
for a change.

**DISSENTING STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

*Re: 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; 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; Cross-Ownership of Broadcast Stations and Newspapers; Rules and
Policies Concerning Multiple Ownership of Radio Broadcast Stations in
Local Markets; Definition of Radio Markets; Ways to Further Section 257
Mandate and To Build on Earlier Studies; Public Interest Obligations of
TV Broadcast Licensees*

Unprecedented media consolidation in recent years has allowed giant
multinational media conglomerates to dominate growing numbers of local
news markets from coast to coast. These media giants have swallowed up
locally owned newspapers, TV and radio stations across America. This has
presented challenges to both our culture and our democracy by
undercutting the American tradition of a local press, rooted in and
responsive to their own communities.

Central to our American democracy is a rich and varied supply of news
and information. An informed citizenry requires the "uninhibited
marketplace of ideas," where there is an open exchange of communications
regarding music, news, information and entertainment programming over
the public airwaves. Broadcasters, along with newspapers, still produce,
disseminate, and ultimately control the news, information, and
entertainment programs that most inform the discourse, debate, and the
free exchange of ideas. As the Supreme Court has observed, "it is the
right of the public to receive suitable access to social, political,
esthetic, moral and other ideas and experiences."[^517] That right is
enshrined in the First Amendment to the U.S. Constitution.

By moving forward now with relaxation of the newspaper-broadcast
cross-ownership rule, the majority ignores the repeated pleas of the
American people and their representatives in Congress. There is no
time-sensitive issue that compels us to act today. In fact, we were
asked by leaders in Congress, including our oversight committees, to
defer today and conduct a more inclusive process. That we are moving
forward when the voices that matter are asking us to refrain defies the
imagination.

The FCC has never attempted such a brazen act of defiance against
Congress. Like the Titanic, we are steaming at full speed despite
repeated warnings of danger ahead. We should have slowed down rather
than put everything at risk.

The reasons for Congressional concern were underscored by the frantic
scramble to make major policy changes at the last minute to this item.
Late last night, there was a brand new proposal to provide waivers to 42
newspaper-television combinations. And not until early this morning, we
learned of massive changes to the waiver standards -- an issue of grave
concern to me and a number of leaders in Congress. The majority argues
this item is the product of long and careful deliberation. But after an
odyssey through the Commission and the Courts, massive changes and new,
previously unseen waivers were adopted in the dead of night on the eve
of a vote. That hardly inspires confidence that this was an open,
transparent and deliberative process.

The choices made by the majority are stark. The only entities asking for
relief are the very media giants we are charged with overseeing. As we
were reminded on Capitol Hill, the law does not say we are to serve
those who seek to profit by using the public airwaves. The law says we
are to serve the public interest. And the public has repeatedly told us
they are not interested in further media consolidation.

Traveling across the country, we have heard this message in community
after community. It is a nonpartisan chorus. Americans from all walks of
life and all political perspectives, whether right or left and virtually
everybody in between, do not want a handful of companies dominating
their primary sources of news, information and entertainment. American
distrust of the concentration of power is as old as our nation itself,
and is rooted in the American spirit.

The millions of Americans who have spoken up scored a solid victory in
forcing the majority to back away from further changes to the
Commission's remaining TV and radio ownership rules. Nevertheless, by
rolling back the cross-ownership rule, today's decision will open a
nationwide bazaar of consolidation that flies in the face of
overwhelming public sentiment. Today's decision says to all those people
who spoke to us across the country, in churches, synagogues and city
halls, "you were wrong. We here inside the Beltway somehow know what is
best for you \-- better than you know for yourselves." It is a big
mistake for big government to say big media is good for you.

Well, I for one believe in the people who pleaded for us to stop further
media consolidation. They have extensive experience in the field,
devouring media at an enormous rate. The statute governing media
ownership is unusually broad in allowing us leeway to define the public
interest. Of course, the FCC cannot make these decisions solely by
popular opinion, but we walk a dangerous course when three out of five
unelected bureaucrats overrule the American people, a much better judge
and jury.

People understand what study after study confirms. Despite the growth of
other media delivery systems, broadcasting and newspapers are still the
most pervasive of all platforms. When people look for local news and
information, they turn to their local newspapers and TV stations. For
example, 89 percent of people say traditional media are their most
important sources of news and current affairs.[^518] Free over-the-air
broadcasting licenses are scarce, and broadcasters still have an
enormous impact on the free exchange of ideas.

This debate is fundamentally about priorities. As we solicited the views
of citizens across the country, we did not hear a clamor for relaxation
of the cross-ownership rules. We only hear that from media company
lobbyists inside the Beltway.

The public is concerned about the lack of responsiveness of their media
outlets to what is happening in their local communities, their local
artists, their local civic and cultural affairs. They are concerned that
people of color and women own too few outlets to have their unique
voices heard over the airwaves. They are furious about the level of
sexual, violent and degrading material they are seeing and believe media
consolidation has something to do with it. And they want us to address
the public interest obligations of broadcasters first.

That is why I have insisted that we address and implement improvements
to localism and diversity of ownership [before]{.underline} -- not after
-- we address the media ownership rules.

To get it right, I called for an independent, bipartisan panel to guide
us on a course to implement improvements in the level of ownership of
media outlets by women and people of color. Many members of Congress and
leading civil rights organizations joined that call. And I have
demanded, along with many members of Congress, that we finalize the
Localism Report and implement real improvements in the responsiveness of
media outlets to local concerns first.

Instead, today we are offered half-measures, setbacks and draft
proposals in place of real improvements to diversity and localism. While
there are a few useful ideas put forth, for the most part these are
half-baked gestures clearly intended as cover for the media
consolidation agenda. Rather than take this in order, and address these
lingering crises first, the Commission moves obsessively to allow more
consolidation, notwithstanding congressional and public concern.

Most troubling, we are not dealing with the problems created by past
media consolidation -- loss of localism and diversity -- before allowing
even greater concentration. Allowing newspapers to merge with broadcast
outlets only takes more opportunities out of circulation for local
owners, women and people of color. And it even further raises the
already exorbitant price of station ownership, the biggest barrier to
new entrants and aspiring local owners.

The proposal, though portrayed as "modest," is fraught with substantive
problems that should have been addressed through more thoughtful
Commission consultation and negotiations. The majority's decision
actually opens the door to dominant local newspapers buying up broadcast
outlets in every market in America and potentially of any size.

Even if the proposal were limited to the top 20 markets, that would
account for 43 percent of U.S. households, or over 120 million
Americans. But the details reveal loopholes that would permit new
cross-owned combinations from the largest markets down to the smallest
markets, potentially affecting every American household.

There was an effort to tighten the waiver standards, but only very
little progress was made, and the implications remain unclear.
Unfortunately, we were not shown these changes until the last minute,
with little time to respond or offer improvements. Those suggestions we
offered were rejected. Despite these eleventh hour changes, the
Commission historically has been so lax in granting waivers, even under
the current stronger standards of a blanket prohibition on
cross-ownership, there is little encouragement that the new waiver
language will help. It will be open season for consolidation in markets
of all sizes for those who engage in mergers that test our determination
to hold the line on these waiver standards.

Exhibit A of a failed waiver process is what occurred just last night at
the Commission. After all the time and debate that has occurred over
this rule, we learned late last night, on the eve of this morning's
vote, that the Commission would grant waivers to six new
newspaper-broadcast combinations, and 36 grandfathered stations, for a
total of 42 new waivers. I doubt my colleagues in the majority engaged
in much deliberation on how the public interest was served in those
communities, ranging from Myrtle Beach, South Carolina to Phoenix,
Arizona. Yet this late-night decision will affect the people of these
communities profoundly on a daily basis for years to come. Anybody who
thinks our processes are open, thoughtful or deliberative should think
twice in light of these nocturnal escapades.

Exhibit B is a newly devised Chinese menu of ways to create
newspaper-broadcast combinations in markets outside of the Top 20. Under
the draft that was circulated around dawn, there are now at least three
ways to merge a newspaper with a broadcast outlet in non-top 20 markets.
Now, in addition to the rebuttable presumption factors announced in the
Chairman's November 13^th^ press release, there will be a strong
presumption in favor of more consolidation if a proposed combination
meets our existing failing stations standard or results in a new source
of local news in the market. I have serious questions about these new
proposals. For example, I have real doubts about the Commission's
willingness to enforce the seven-hour weekly news requirement. Also,
such a requirement could have a negative impact on the total amount of
news through the media. As a study from Free Press and Consumer Union
has shown, while the newspaper-broadcast combinations increase its news
output -- in this case, seven hours per week -- news production
market-wide diminishes. The Commission should more closely examine this
proposal to ensure that it will produce the desired effect.

These loopholes in the Order also undercut the assertion that the
proposal would prevent a newspaper from buying one of the top-four rated
stations in the same market. That protection does not apply in markets
below the top 20, and can be dismissed with the wave of the Commission's
hand in the larger markets. In reality, under this proposal a newspaper
could buy any TV station in any city, no matter how large.

A main public interest justification for newspaper-broadcast
cross-ownership has been the claim that relaxing the rule would create
more local news. A path-breaking study by leading consumer
organizations, using the FCC's own data, demonstrated that claim to be
wrong. They found that the data underlying an FCC-sponsored study
finding more local news by cross-owned stations actually reveals that
there is less local news in those markets as a whole, taking into
account all news outlets. It remains unclear exactly why the overall
level of local news available diminishes. Perhaps it is because other
outlets choose not to compete with the local leviathan or maybe they
lose equal access to the newspaper's investigative and news resources.
But the fact is the Commission's own data reveals the other outlets in
those cities reduce their news coverage more than the cross-owned
outlets increase it. So not only is less news produced in the market,
but an independent voice is silenced when the dominant local newspaper
swallows up a broadcast outlet. We should have examined the root causes
of this problem and addressed it before relaxing the cross-ownership
rule.

We also failed to study the relationship between inappropriate
programming for children, such as excessively sexual or violent
programs, and the concentration of media ownership. A 2005 report found
that 96 percent of all the indecency fines levied by the FCC in radio
from 2000 to 2003 (97 out of 101) were levied against four of the
nation's largest radio station ownership groups. The remaining
11,000-plus stations were responsible for just four percent of all FCC
radio indecency violations, a fraction of their national audience share.
While the radio report did not prove a causal link between ownership
concentration and broadcast indecency, I believe the Commission has an
obligation to study and understand the relationship between media
concentration -- station ownership and program ownership -- and
indecency before we permit more consolidation. Further, a study last
year by the Parents Television Council found that, in the midst of an
unprecedented wave of media consolidation between 1998 and 2006,
violence on TV during the evening hours of 8:00, 9:00 and 10:00 grew by
45, 92 and 167 percent, respectively. Commissioner Copps and I requested
a full FCC field hearing to explore the relationship between media
consolidation and the rising volume of material inappropriate for
children in the media, but not one was held.

For many years, the underpinnings of the Commission's public interest
analysis with regard to media have been to promote localism,
competition, and diversity. Yet it is clear from the record that this
decision undermines all of these goals. As a result of
newspaper-broadcast cross-ownership, there is less local news in the
market as a whole and there is less competition for stories and ideas
since two competing entities become one. There is also less diversity,
as a voice in the market is lost, and broadcast outlets are taken even
further out of reach of women and people of color.

The ostensible reason to ignore all of these detrimental consequences
was the importance of saving the newspaper industry that would otherwise
wither on the vine. As many have pointed out, we are not in the business
of guaranteeing newspaper profits. Perhaps if we were, we would better
understand why relaxing the cross-ownership rule is not the right
prescription for addressing real issues and opportunities newspapers
face as the internet rapidly becomes the means of distribution for news.
The record shows that news content is still largely generated by
newspapers and TV stations, even though the means of distribution are
changing with the emergence of broadband.

In fact, the newspaper industry is quite healthy, with profit margins of
around 20 percent, exceeding the average of S&P 500 companies.[^519] The
problem for newspapers is that those margins and revenues are declining,
and Wall Street looks askance at the trends, despite the huge continued
cash generation of newspapers. The problem is that broadcasters are also
seeing slow growth or revenue declines, again despite very healthy, if
shrinking, margins. Wall Street analysts have recognized what the
majority apparently missed. You cannot address the financial problem of
shrinking margins of newspapers by combining them with broadcast outlets
that also have shrinking margins. The real challenge for both outlets is
to better monetize their news-gathering functions from the growing
audience who views them for free on the Internet.

In the final analysis, we could have achieved a bipartisan agreement on
a reasonable process to finalize the media ownership proceeding that
addressed the many concerns raised by the public, leading consumer
advocates and Congress. I worked to achieve that goal by offering to
follow the bipartisan path laid out by Members of Congress and the
Senate Committee on Commerce, Science and Transportation.

Sadly, that was a road not taken, and Members of Congress have clearly
signaled there will be consequences for this breakdown of deference and
cooperation. We ran so many red lights it would make Mario Andretti
blush. It is now up to Congress and the courts to address the pileup
that resulted. With the encouragement of the American people, who are
certain to share the outrage over this decision, I certainly hope and
believe that others will have the final word on this issue.

Finally, I want to recognize and thank the many groups and individuals
who have provided me with important counsel during this difficult
proceeding: Free Press, Media Access Project, Consumers Union, Institute
for Public Representation, Consumer Federation of America,
Communications Workers of America, the Writers' Guilds of America, the
Media and Democracy Coalition and the tens of thousands of volunteers
and members of the public who have reached out to this Commission to
express their concerns.

**STATEMENT OF**

**COMMISSIONER DEBORAH TAYLOR TATE**

*RE: 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; 2002 Biennial Regulatory
Review-Review of the Commission's Broadcast Ownership Rules and Other
Rules Adopted Pursuant to Section 202of the Telecommunications Act of
1996; Cross Ownership of Broadcast Stations and Newspapers; Rules and
Policies Concerning Multiple Ownership of Radio Broadcast Stations in
Local Markets; Ways to Further Section 257 Mandate and To Build on
Earlier Studies; Public Interest obligations of TV Broadcast Licensees.*

As Commissioners of the Federal Communications Commission we face many
serious, far-reaching, and contentious decisions affecting this nation.
While I always strive to seek consensus, I know there will be some times
when consensus is simply not possible, and we must agree to disagree.
Today is one of those days.

I believe that the process we have engaged in over the past year and a
half, has been open, transparent, and thorough---a true example of our
vibrant democracy at work. Others may disagree. While I think we would
all prefer to be part of a unanimous decision, I do not believe waiting
would have resulted in any further agreement.

In its 2004 remand, the 3^rd^ Circuit affirmed "the power of the
Commission to regulate media ownership." In addition, Congress requires
that the Commission undertake a review of our media ownership rules
every four years. The 3^rd^ Circuit also made clear that the FCC must
not simply be a "revolving door" of notice and comment. We must act to
fulfill our obligations: "monitor the effect of . . . competition . . .
and make appropriate adjustments' to its regulations." In this Order we
conclude our 2006 Quadrennial Review, and respond to the Court's remand
of our 2002 Biennial Review Order.

I wish that I had time to truly capture and describe the places we
visited and the thousands of individuals who lined up to speak to us --
from California to Maine; Chicago to Florida; Pennsylvania to Tennessee
-- we traveled literally from sea to shining sea. In several cases, we
stayed until after midnight in order to accommodate those citizens who
took time to sit through hours of public testimony. These lengthy
hearings provided an opportunity for thousands of American citizens to
have unprecedented access to a governmental body about the role media
plays in their lives and their opinion regarding media ownership. Over
my 20-plus years of public service -- at all levels of government -- I
cannot remember a single time that an agency expended this much
institutional energy and investment on an issue, or was this open and
thorough regarding a matter of public interest. We invited comment not
only from the general public, but also from expert panels of economists;
TV, radio, and film producers; musicians; directors; professors;
students; small and large TV and radio broadcasters, and community
organizations. During the roughly year and a half of on-going hearings,
we arranged for ten media studies by experts -- preeminent economists,
academics, and researchers -- and also released all of those studies for
public comment as well as peer review by unaffiliated experts. Four of
the studies were peer reviewed by multiple reviewers.

In addition to the FCC's formal process, I also felt it was important to
seek first-hand knowledge regarding the challenges, as well as the
exciting innovations, facing broadcasters and newspapers. I toured large
and small media outlets, local broadcasters, network affiliates, and
newspapers. In addition, I spent time hearing from consumer
organizations, such as Media Access Project and the Consumer Federation
of America, as well as some of our nation's most knowledgeable
professors and economists, and Members of Congress.

Throughout this process, I was struck by the ongoing, dramatic changes
in how Americans use the media to receive news, information, and
entertainment.  Increases in broadband penetration have transformed the
Internet into a viable platform for streaming full-length video
programming, with more content moving online daily.  And our mobile
phones now provide us with stock quotes, email and news updates from
sources locally and around the globe. With the multiplicity of sources
now available at the click of a button, the historic concerns underlying
the newspaper-broadcast cross-ownership ban would seem to be alleviated.
Many academics and professionals note that developments since the
Commission last reviewed its rules show that the diminishment of
mainstream media power over information flow is real. This will only
continue as the Internet and other communications networks develop. The
diminution in the power of old media enhances the need to permit
exploration of the synergies of limited cross-ownership. The Commission
must ensure that our rules do not unduly stifle efficient communications
that are likely to preserve or increase the amount and quality of local
news available to consumers via these outlets.

As we traveled across America, one of the most prominent concerns we
heard was with regard to radio consolidation. This was especially true
at the hearing we held in my hometown of Nashville, TN\-- Music City
USA. While best known as the "Home of Country Music", Nashville is the
#2 video production locale in the country; second only to L.A. Nashville
is the home of some of the greatest songwriters and musicians in the
entire world. It provided an appropriate forum to take a look at how
ownership affects artists and their art.  I want to thank all the
Tennessee public officials, Belmont University, and so many Nashville
stars who participated: Naomi Judd, Big and Rich, George Jones, Dobie
Gray and my good friend, the late Porter Wagner. We listened and heard
from you, and many fans as well, who opposed further radio
consolidation, and today we retain the current radio ownership limits.

For those concerned about radio consolidation, it is important to note
that the industry has recently seen a number of radio giants engaging in
significant divestitures. Major companies like Clear Channel, ABC,
Entercom, and CBS have divested, or filed applications to divest,
hundreds of stations over the last few years. This is a good example of
the marketplace in action. In addition, many of the stations that were
spun off were made available to new owners through capital supplied by
the former ones. This will hopefully result in additional women and
minority owners; a good result for them, and for America's diverse
citizenry.

In addition to radio ownership, the other concern that stands out in my
mind is the content provided by today's media outlets. From concerns
about the pervasive impact media has on our children, to the lack of
diversity of programming, to the "negativity" of news coverage in
general. Some commenters took issue with a specific local station. To
those citizens, I commend you to our website, www.fcc.gov, where you can
file complaints regarding a broadcaster who may not be fulfilling their
public interest obligations, or you believe has violated other
Commission regulations. Also, we recently adopted an Enhanced Disclosure
Order, requiring local broadcasters to post their public inspection
files online, which will make it easier for individuals and citizens to
review those files to ensure that broadcasters are meeting their
regulatory responsibilities.

It was important to the process that we heard not only from passionate
members of the public who shared personal stories of how media ownership
has impacted their lives, but also from dispassionate academics and
economists who analyzed marketplace data and derived findings that
directed our inquiries. The studies examined various subjects, but
several conclusions were reached. First, there is a staggeringly low
rate of female and minority ownership in the broadcasting industry.
Today, we adopt a separate order that takes positive steps to address
that concern. Second, according to three of our media studies,
cross-ownership of newspapers and broadcast stations actually results in
more local news. Some point out the potential inconclusiveness as to the
outcome of some of the studies, but this concern lends credence to our
decision to conduct a case-by-case review of the particular
characteristics of specific combinations in specific markets, rather
than adopting a one-size-fits-all rule.

In conclusion, I think it is important to step back from the
emotionally-charged debate that has surrounded this issue over the past
few weeks, and consider the narrowness of the rule change we make today.
In this Order, we retain the limits on television ownership, radio
ownership, and radio-television cross-ownership. We retain the
newspaper-broadcast cross-ownership ban, except in the top 20 markets,
which are our most media-rich, highly-populated markets. We establish a
heavy presumption against cross-ownership in markets outside the top 20.
This was at the heart of the 3^rd^ Circuit's decision which affirmed the
elimination of the ban, upholding the Commission's conclusion that the
ban undermined localism and was unnecessary to protect diversity.

We have traveled across the country and heard from thousands of
citizens. The process has been long, but fruitful. Many wanted us to go
further in repealing the ownership restrictions, but we have chosen a
measured and cautious approach. We recognize the changing dynamics of
the media market, but also give due consideration to the weight of the
record before us. In the end, our approach is an extremely modest
change, which reflects the views of citizens as well as experts gathered
over the past 18 months.

Thank you to the Media Bureau for organizing the many public hearings
and for drafting this item. Most of all, thank you to all of those
citizens who participated in this truly monumental process. We value
your insight and hope you will continue to be part of this Commission's
work in the future.

**STATEMENT OF**

**COMMISSIONER ROBERT M. MCDOWELL**

*Re: 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; 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; Cross-Ownership of Broadcast Stations and Newspapers; Rules and
Policies Concerning Multiple Ownership of Radio Broadcast Stations in
Local Markets; Definition of Radio Markets; Ways to Further Section 257
Mandate and To Build on Earlier Studies*

Mark Twain warned us over a century ago, \"If you don\'t read the
newspaper you are uninformed. If you do read the newspaper you are
misinformed.\" Of course, Mr. Twain had no other media than newspapers
at his fingertips to glean information, opinion and, more importantly,
material for his witticisms. The 21^st^ Century's chaotic explosion of
information from broadcast radio and television, cable TV, satellite
radio and TV, the Internet and many other voices and outlets would have
given Twain an ocean of material to use to skewer his targets with his
satire. Without question, however, he would have had a blog; and I'm
sure it would have been one of the most popular blogs on the Internet.
If he were alive today, perhaps his cheerful disdain for newspapers
would have led him and his readers to bypass the papers altogether. And
that's a point at the heart of today's order: if consumers and content
providers *want* to bypass the media technologies of yesteryear in favor
of new media, they *can*. And *they are*. In fact, the evidence in the
record tells us that if you are under 30, you are probably not reading a
traditional newspaper or tuning in to your local broadcasters. You may
never do so, at least not in the way the over-30 crowd does. It is
precisely this type of paradigm shift that Congress and the courts have
charged the Commission with weighing heavily as we revise our media
ownership rules.

But before I delve into the substance of today's order, let's take a
moment to examine how we got here. The current proceeding began at my
very first open meeting as a Commissioner, 18 months ago. This
proceeding has been unprecedented in scope and thoroughness. We gathered
and reviewed over 130,000 initial and reply comments and extended the
comment deadline once. We released a Second Further Notice in response
to concerns that our initial notice was not specific enough about
proposals to increase minority and female ownership of stations. We
gathered and reviewed even more comments and replies in response to the
Second Notice. We traveled across our great nation to hear directly from
the American people during six field hearings on ownership in: Los
Angeles and El Segundo, Nashville, Harrisburg, Tampa-St. Pete, Chicago,
and Seattle. We held two additional hearings on localism, in Portland,
Maine and here in our nation's capital. In those hearings, we've heard
from 115 expert panelists on the state of ownership in those markets and
we've stayed late into the night, or early into the next morning, to
hear from concerned citizens who signed up to speak. And I want to thank
all of those who turned out to express their views.

We also commissioned and released for public comment ten economic
studies by respected economists from academia and elsewhere. These
studies examine ownership structure and its effect on the quantity and
quality of news and other programming on radio, TV and in newspapers; on
minority and female ownership in media enterprises; on the effects of
cross-ownership on local content and political slant; and on vertical
integration and the market for broadcast programming. We received and
reviewed scores more comments and replies in response. Some commenters
did not like the studies and their critiques are part of the record.

So, during my entire term as a Commissioner, we have been reviewing this
matter. But our review did not begin last year. The previous round began
in 2002. At that time, the Commission received thousands of formal
comments and millions of informal comments. The Commission held four
localism hearings across the country to gather additional evidence. The
FCC also produced twelve media ownership working group studies. We all
know that the 2002 review ended badly for the Commission -- with both
the legislative and judicial branches reacting through a Congressional
override of the national ownership cap, and a reversal and remand from
the Third Circuit in the *Prometheus* case. By the way, while the court
threw out almost all of the Commission's order, it concluded that,
"reasoned analysis supports the Commission's determination that the
blanket ban on newspaper/broadcast cross-ownership was no longer in the
public interest."

But our story didn't begin in 2002 either. In 2001, the FCC issued a
rulemaking focused on the newspaper-broadcast cross-ownership ban -- a
concept that has been around since at least 1975. Comments and replies
were gathered there too. That proceeding sprouted up as the result of a
June 2000 report from a Democrat-controlled FCC, which found that the
ban may not be necessary to protect the public interest in certain
circumstances. That report was the result of yet another proceeding,
which commenced in 1998. The 1998 proceeding stemmed from a 1996
proceeding; which was sparked by legislation; which was engendered by an
overwhelming and bi-partisan vote of a Republican-controlled Congress
and signed into law by a Democrat President.

In my 17 years of being in and around the FCC, I can't think of any
issue that has been examined more thoroughly. I can't remember any
proceeding where the Commission has solicited as much comment and given
the American people as much opportunity to be heard.

A point that gets lost in the emotion surrounding this debate is that
the directly elected representatives of the American people, the
Congress, enacted a statute that contains a presumption in favor of
modifying or repealing the ownership rules as competitive circumstances
change. Section 202(h) states that we must review the rules and
"determine whether any of such rules are necessary in the public
interest as the result of competition. The Commission shall repeal or
modify any regulation that it determines to be no longer in the public
interest." This section appears to upend the traditional administrative
law principle requiring an affirmative justification for the
modification or elimination of a rule, and it is crucial for everyone
involved in this debate to recognize this important presumption. It is
also important to remember that Section 202(h) is the most recent set of
codified instructions we have from Congress. If Congress passes
legislation to the contrary, and the President signs it into law, I will
work tirelessly to ensure that its intent is carried out. In the
meantime, however, Section 202(h) is our legal mandate. We also have a
duty to pursue the noble public policy goals of competition, diversity
and localism. Today's order accomplishes all of the above.

However, while the FCC races ahead over a twelve-year period like "a
runaway glacier," as one analyst put it, the private sector has been
busy working around the obstacles constructed by the outdated
regulations of yore. Is it any wonder that most of the energy,
creativity, capital and growth have been focused on areas that are
*less* regulated? That's what our record shows. The ironic truth is: in
many cases, media consolidation has actually become media divestiture.
Companies such as Disney, Citadel, Clear Channel and Belo actually have
been shedding properties to raise capital for new ventures. They are
directing new capital investment toward new media ventures. That's where
America's eyeballs are looking; so that's where the ad dollars are
flowing. The Hollywood writers' strike is all about the concept of
following the eyeballs and ad dollars and getting fairly compensated as
a result. Just to illustrate the point, over one-third of Americans go
online to get their news. As the FCC's own research shows, by July 2006,
107 million Americans viewed video online and about 60 percent of U.S.
Internet users download videos.[^520] YouTube alone requires more
bandwidth than the *entire Internet* did in 2000. Unregulated new
media's numbers are growing. Heavily-regulated traditional media's
numbers are shrinking.

This new media frontier is especially promising for people of color and
women. The rise of so-called "niche" markets is benefiting people who
have been underserved in the past. The low barriers to entry and low
capital requirements to get started have spawned a plethora of minority
and women oriented new media outlets such as: NetNoir.com, a minority
owned online destination that connects people interested in African
American culture and lifestyle; or iVillage.com, which provides daily
hot topics for women; or Women's eNews.com, an online source for news
and perspectives of particular concern to women. While this new era is
in its infancy, and we have a long way to go before it matures, I am
optimistic that the media ownership debates of the early 21^st^ Century
will one day fade into obscurity as technology and competition advance.

Before I go further, let me offer a personal observation. Both of my
parents were journalists. They met after World War II at the University
of Missouri's famed School of Journalism where my mom was on the
faculty. She went on to become a reporter for the *Chicago Daily News*
at a time when almost no women held such jobs. She later worked for the
*Washington Post* and was there when the cross ownership ban went into
effect in 1975. So I found it especially remarkable, when I was sorting
through her belongings after she passed away in 2005, to find a book
entitled *The Fading American Newspaper*. I've read through it and I've
come across some timely quotes. Here's one: "As journalism migrates into
new areas of communication, its practitioners, too, are on the move. The
commerce in information flourishes and quickens its tempo, new skills
are developed, and the major problem for the newspaper journalist is to
keep his readers from migrating, too." So when was this book written?
2005? 1975? No, it was written in 1960 by a former editor and journalism
professor. But the point is that there is not a general concept before
us in this proceeding that hasn't been debated for decades.

Even though the newspaper industry was already facing challenges in
1960, it has undergone dramatic change in the 32 years since the
newspaper-broadcast cross ownership ban went into effect. Now we have
five national networks, not the three I grew up with. Today we have
hundreds of cable channels cranking out a multitude of video content
produced by more, not fewer, but *more* independent voices than existed
32 years ago. Now we have two vibrant satellite TV companies, telephone
companies offering video, cable overbuilders, satellite radio, the
Internet and its millions of websites and bloggers, a plethora of
wireless devices operating in a robustly competitive wireless market
place, iPods, Wi-Fi, and much more. And that's not counting the myriad
new technologies and services that are coming over the horizon such as
those resulting from our Advanced Wireless Services auction of last
year, or the upcoming 700 MHz auction, which starts next month.
Certainly, more voices and more delivery platforms exist today than in
1975.

Consumers have more choices and more control over what they read, watch
and listen to than ever. As a result of this cacophony of voices
competing for consumer's attention, at least 300 daily newspapers have
shut their doors forever in the last 32 years because people are looking
elsewhere for their content. Newspaper circulation has declined year
after year. Since just this past spring, average daily circulation has
declined 2.6 percent. Newspapers' share of advertising revenue has
shrunk while advertising for unregulated online entities has surged.

Some argue that newspapers are making plenty of money. For many papers,
that's absolutely true, for now. As gross revenue declines year after
year, publishers cut costs to retain margins. After a while, such
cost-cutting slices into the heart of the news-gathering operation: the
newsroom and its reporters. As a result, the ability to cover more news
diminishes. Some respond by arguing that newspapers and broadcasters
should therefore live under *more* regulation than what exists today.
But who among them is offering to find ways to pay for the high costs of
their mandates? How is such a command-and-control regulatory regime
supposed to generate the funds needed to support such capital-intensive
endeavors?

With all trend lines showing newspaper top-line income falling fast, the
ultimate fate of this platform is obvious: newspapers, as we know them,
will cease to exist sooner rather than later under existing regulations.
They may disappear some day anyway, regardless of what we do today. But
why should stale government industrial policy hasten their demise? While
I agree with many of the critics of today's order that it is not the
FCC's job to "save the newspapers," or any other industry for that
matter, at the same time is it our job to leave in place an outdated
regulation that results in the *elimination* of independent voices? With
a regulation in place that is linked to the silencing of so many local
community voices, is the cross-ownership ban still in the public
interest, or is it a millstone around the neck of a drowning industry?
The statute demands an answer.

Despite a strong de-regulatory statutory presumption mandated by
Congress and an order from the Third Circuit essentially giving a green
light to lifting the ban altogether, today's order is quite modest. The
order creates a presumption in favor of lifting the ban only in the top
twenty media markets where there is tremendous competition in the
traditional media sector. Even then we only allow a combination outside
of the top four TV stations and only when at least eight independent
major media voices remain in the that market. Outside of the top twenty
markets, our rule establishes a negative presumption against permitting
the combination. In only two special circumstances will we reverse the
negative presumption: first, if a newspaper or broadcast outlet is
failed or failing; and second, when a proposed combination results in a
new source of a significant amount of local news in a market.

Where neither of these circumstances exists, we establish a four-prong
test to determine whether the negative presumption is rebutted. This
test is not pocked with loopholes as some have suggested; quite the
contrary. To determine if the presumption is overcome, we will
consider: 1) whether cross-ownership will increase the amount of local
news disseminated through the media outlets in the combination; 2)
whether each affected media outlet in the combination will exercise its
own independent news judgment; 3) the level of concentration in the
Nielsen DMA; and 4) the financial condition of the newspaper and
broadcast station, and if the newspaper or broadcast station is in
financial distress, the putative owner's commitment to invest
significantly in newsroom operations.

Lastly, we will not require divestiture of existing combinations that
were grandfathered in conjunction with the 1975 rule or that were
granted permanent waivers of the rule. Under both Democrat and
Republican chairmen, the Commission previously determined that these
combinations were in the public interest and thus warranted a waiver
under the prior rule. We should not reverse course here as we modernize
our rule. In addition, the Order grandfathers existing combinations
operating under temporary waivers where those combinations involve one
newspaper and one broadcast property in the same market. These
combinations have achieved synergies that have resulted in service to
their communities in the public interest. Requiring divestiture would be
disruptive to the individual owners, employees and to the communities
that rely on their service.

Today's order also may create new opportunities for women and people of
color. Under the current rule, minority businesses may not own a
newspaper and station in the same market. Now they can after appropriate
Commission review. Under our narrowly-tailored rules, a modernization of
the ban will create a rising tide that has the potential to float all
boats.

In the meantime, all Americans, and the rest of the world, are migrating
toward the boundless promise of new media for their news, information
and entertainment. The best news is that all Americans will benefit from
this new paradigm because new technology empowers the sovereignty of the
individual, regardless of who you are. As future policymakers examine
these issues in the years to come, I would urge them to continue to
examine the important public policy implications of this new era in the
context of these undeniable facts.

Accordingly, I support today's order.

[^1]: The Commission's broadcast ownership rules are contained in 47
    C.F.R. § 73.3555. For the local television ownership rule, the
    radio/television cross-ownership rule, and the newspaper/broadcast
    cross-ownership rule that are currently in effect, see 47 C.F.R. §
    73.3555(b)-(d) (2002); for the local radio ownership rule, see 47
    C.F.R. § 73.3555(a) (2006). The dual network rule is contained in 47
    C.F.R. § 73.658(g) (2006).

[^2]: *See* Telecommunications Act of 1996, Pub. L. No. 104-104,
    § 202(h), 110 Stat. 56, 111-112, and Consolidated Appropriations Act
    of 2004, Pub. L. No. 108-199, § 629, 118 Stat. 3 (2004) (codified at
    47 U.S.C. § 303 note (2006)) ("2004 Consolidated Appropriations
    Act").

[^3]: In 2004, Congress revised the then biennial review requirement to
    require such reviews quadrennially. Congress also eliminated the
    national television multiple ownership rule from the quadrennial
    review requirement. *See* 2004 Consolidated Appropriations Act, 118
    Stat. at 3. Consumer Federation of America and Consumers Union
    ("CFA/CU Petition") ask for reconsideration of the 2002 biennial
    review of the Commission's broadcast ownership rules concerning
    issues relating to the national television ownership limit. CFA/CU
    Petition at 5-10. Because Congress subsequently set national
    television ownership limits by statute and excluded this rule from
    the quadrennial review requirement, those arguments are moot. *See*
    *Prometheus Radio Project, et al. v. FCC*, 373 F.3d 372, 395-397 (3d
    Cir. 2004) ("*Prometheus*"). In this Order, "Petition" refers to a
    petition for reconsideration filed in response to the *2002 Biennial
    Review Order*, *see* note 6, *infra*.

[^4]: 1996 Act, 110 Stat. at 111-12.

[^5]: Although we are basically retaining the local television ownership
    rule as currently in effect, we are reinstating the failed station
    solicitation rule. *See* Part V ("Local Television Ownership Rule").

[^6]: *See* *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*,
    Report and Order and Notice of Proposed Rulemaking, MB Docket No.
    02-277, MM Docket Nos. 01-235, 01-317, 00-244, 03-130, 18 FCC Rcd
    13620 (2003), *aff\'d in part and remanded in part*, *Prometheus*,
    373 F.3d at 435*, stay modified on rehearing*, No. 03-3388 (3d Cir.
    Sept. 3, 2004) ("*Prometheus Rehearing Order*"), *cert. denied*, 545
    U.S. 1123 (2005).

[^7]: *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*, Further Notice
    of Proposed Rule Making, MB Docket Nos. 06-121, 02-277, MM Docket
    Nos. 01-235, 01-317, 00-244, 21 FCC Rcd 8834 (2006). In this Order,
    "Comments" refers to comments in response to the *Further Notice*
    that were due to be filed by October 23, 2006, and "Reply" refers to
    reply comments that were due to be filed by January 16, 2007. We
    issued a Second Further Notice of Proposed Rule Making to set forth
    in greater detail proposals offered by the Diversity and Competition
    Supporters ("DCS" or "MMTC") to promote broadcast ownership by women
    and minorities. *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*,
    Second Further Notice of Proposed Rule Making, MB Docket Nos.
    06-121, 02-277, MM Docket Nos. 01-235, 01-317, 00-244, 22 FCC Rcd
    14215 (2007) ("*Second Further Notice*"). We address those proposals
    concurrently in a separate order. *Promoting Diversification of
    Ownership in the Broadcasting Services*, Report and Order and Third
    Further Notice of Proposed Rulemaking, MB Docket No. 07-294, adopted
    Dec. 18, 2007, Press Release (FCC 07-217) ("*Diversity Order*").

[^8]: *See* *Further Notice,* 21 FCC Rcd at 8835-48, ¶¶ 1-35.

[^9]: *Sinclair Broadcast Group, Inc. v. FCC*, 284 F.3d 148, 163-65
    (D.C. Cir. 2002) ("*Sinclair*"). The *Further Notice* invited
    comment on how to address the *Sinclair* decision. *See* 21 FCC Rcd
    at 8842, ¶ 18.

[^10]: 373 F.3d at 381.

[^11]: *See Prometheus Radio Project, et al. v. FCC,* No. 03-3388 (3d
    Cir. Sept. 3, 2003), *Stay Order*, 2003 WL 22052896.

[^12]: *See generally* *Prometheus*, 373 F.3d at 389-435.

[^13]: *See Prometheus Radio Project, et al. v.* FCC, No. 03-3388 (3d
    Cir. Sept. 3, 2004) ("*Prometheus Rehearing Order*").

[^14]: See *FCC Seeks Comment on Research Studies on Media Ownership,*
    Public Notice, DA 07-3470, MB Docket No. 06-121 (rel. July 31, 2007)
    for a description of the studies. The studies are available on the
    Commission's website: http://www.fcc.gov/ownership/studies.html. In
    this Order, "Comments to Media Ownership Studies" and "Reply to the
    Media Ownership Studies" refers to comments in response to the
    Public Notice that were due to be filed by October 22, 2007 and
    reply comments that were due to be filed by November 1, 2007.

[^15]: Media Ownership hearings were held in Los Angeles and El Segundo,
    California (Oct. 3, 2006); Nashville, Tennessee (Dec. 11, 2006);
    Harrisburg, Pennsylvania (Feb. 23, 2007); Tampa, Florida (April 30,
    2007); Chicago, Illinois (Sept. 20, 2007); and Seattle, Washington
    (Nov. 9, 2007). Transcripts of the hearings are filed in MB Docket
    No. 06-121 (there is no transcript for the Nashville hearing). In
    addition, transcripts and audio webcasts of the hearings are
    available on the FCC website at
    http://www.fcc.gov/ownership/hearings.html.

[^16]: Capitol Broadcasting Company, Inc. ("Capitol") believes that the
    Commission's method of analyzing each rule individually in the *2002
    Biennial Review Order* was insufficient, and it asks the Commission
    to conduct a comprehensive analysis of the collective impact of the
    new rules. Capitol Petition at 12-13. The Commission retains the
    discretion to best determine how to conduct its proceedings, *see*
    47 U.S.C. §§ 154(i),(j), and we have conducted a comprehensive and
    thorough review of our ownership rules, considering them all
    together in one proceeding in light of our policy goals.

[^17]: The Office of Communication of the United Church of Christ, Inc.,
    Black Citizens for a Fair Media, Philadelphia Lesbian and Gay Task
    Force, and Women's Institute for Freedom of the Press ("UCC") ask
    the Commission to reconsider its refusal to require a certain
    percentage of programming time for independent producers. UCC
    Petition at 42. In addition, the American Federation of Television
    and Radio Artists ("AFTRA") and the Screen Actors Guild ("SAG") ask
    the Commission to require the networks to devote 25 percent of
    prime-time programming slots to independent programmers. AFTRA
    Comments at 24-25; SAG Comments at 9-12. Finally, the Center for the
    Creative Community and the Association of Independent Video and
    Filmmakers ("CCC") seek a rule that promotes source diversity in the
    production of television programming, arguing that 77.5 percent of
    the new television programs for 2002 were owned in whole or part by
    the four major networks. CCC Petition at 7-8, 13-16. Although we
    received some testimony, invited and received comment on the issue
    of independent producers in response to the *Further Notice*, and
    commissioned a study that addressed some aspects of the issue (see
    "Vertical Integration and the Market for Broadcast and Cable
    Television Programming," by Austan Goolsbee, University of Chicago,
    Graduate School of Business; American Bar Foundation; and National
    Bureau of Economic Research (April 2007) ("Media Ownership Study
    9"), *available at* http://www.fcc.gov/ownership/studies.html), upon
    further review of the scope of this issue, we decline to address
    those matters within this Order. We note that the rules that we are
    required to review under Section 202(h) are limited to the media
    ownership regulations addressed in this Order. Indeed, in the *2002
    Biennial Review Order*, the Commission explicitly held that this
    issue was outside the scope of the proceeding. 18 FCC Rcd at
    13864-69, ¶¶ 640-56. While the independent producer issues raised by
    these commenters may be pertinent to the broader issue of source
    diversity in the media, we find that they are more appropriately
    addressed elsewhere.

[^18]: *2002 Biennial Review Order*, 18 FCC Rcd at 13647-49, ¶¶ 86-89.

[^19]: Thus, for example, Communications Workers of America ("CWA")
    contends that the Commission should focus primarily on the ownership
    of newspapers and television stations because they continue to be
    the dominant sources of local news and information, despite the
    growth of cable, satellite, and the Internet. CWA Comments at 17-18,
    54. CWA opposes including the Internet, particularly websites owned
    by the newspaper and media outlets, as an independent source of
    local news and information in the Commission's measurements of local
    media diversity. *Id*. at 21-24, 27. It argues that the Internet
    continues to serve primarily as an alternative distribution platform
    for traditional media outlets, citing several surveys and reports
    showing that most websites merely republish, repackage, and redesign
    information originated for their newspapers and television stations.
    *Id*. at 22-27. The Office of Communication of the United Church of
    Christ, Inc., National Organization for Women ("NOW"), Media
    Alliance, Common Cause, and Benton Foundation ("UCC") contend that
    the Internet and other forms of non-traditional media do not
    displace Americans' reliance on broadcast and newspapers for news
    and should be "treated as a supplement rather than a competitor of
    traditional media." UCC Comments at 43.

[^20]: *See, e.g*., Newspaper Association of America ("NAA") Comments at
    25-27; Media General Reply at 8-12; *see also* *The State of the
    News Media 2007, Online: Audience*, Project for Excellence in
    Journalism (2007) at
    http://www.stateofthenewsmedia.org/2007/narrative_online_audience.asp?cat=2&media=4
    (Growth trends in the online audience of newspapers suggests that
    "the newspaper audience may not be shrinking, \.... But it
    reinforces the imperative that the Internet model needs to figure
    out a way to 'monetize' those readers. Otherwise the resources
    available to cover the news may shrink."). *See also, e.g*., *FCC
    Annual DTV Ancillary/ Supplementary Services Report*, 18 FCC Rcd
    23972 (2003); 47 U.S.C. § 336 (a), (e). DTV allows broadcasters to
    use part of their digital bandwidth for subscription video,
    datacasting, and other pay services. To date, the provision of
    ancillary and supplementary services has been modest.

[^21]: *2002 Biennial Review Order*, 18 FCC Rcd at 13647-49, ¶¶ 86-89.

[^22]: *See, e.g.*, NAA Comments at 40-41; Gannett Comments at 15-16;
    Cox Comments at 18-23; and Belo Comments at 18. As cable
    subscribership continues to grow, and as the total number of
    non-broadcast networks continues to increase, broadcast television
    stations' audience share continues to fall. *See, e.g.,* *Annual
    Assessment of the Status of Competition in the Market for the
    Delivery of Video Programming*, MB Docket No. 05-255, Twelfth Annual
    Report, 21 FCC Rcd 2503, 2550-51, ¶ 93 (2006) ("*2005 Video
    Competition Report*"); *Annual Assessment of the Status of
    Competition in the Market for the Delivery of Video Programming*, MB
    Docket No. 04-227, Eleventh Annual Report, 20 FCC Rcd 2755, 2804-05,
    ¶ 77 (2005) ("*2004 Video Competition Report*"); *Annual Assessment
    of the Status of Competition in the Market for the Delivery of Video
    Programming*, MB Docket No. 03-172, Tenth Annual Report, 19 FCC Rcd
    1606, 1669, ¶ 94 (2004). The introduction and increasing adoption of
    competing MVPD technologies has resulted in the decline in market
    share of cable operators in recent years. *See, e.g.,* *2005 Video
    Competition Report*, 21 FCC Rcd at 2617, Table B-1; *2004 Video
    Competition Report*, 20 FCC Rcd at 2869, Table B-1.

[^23]: *See* "Ownership Structure and Robustness of Media," by Kiran
    Duwadi, Scott Roberts, and Andrew Wise, FCC (2007) ("Media Ownership
    Study 2") at 2, *available at*
    http://www.fcc.gov/ownership/studies.html ("In the TV industry, the
    data reveal a slight increase in the number of stations and a slight
    decrease in the number of owners\.... For the radio industry, the
    number of stations increased moderately."). *See* *also* Broadcast
    Station Totals 1990 to Present, FCC, *available at*
    http://www.fcc.gov/mb/audio/totals/index.html.

[^24]: Media General Comments at 44-45; NAA Comments at 60-64; Tribune
    Comments at 22; Cox Comments at 20-23; NAB Reply at 26.

[^25]: Cox Comments at 17-18; Media General Comments at 59-60; NAA
    Comments at 25-30.

[^26]: *See* Media Ownership Study 2 at 2 ("Media ownership was fairly
    stable over the period studied. This contrasts with the previous
    \[September 2002 FCC\] study, which revealed substantial
    consolidation across most forms of media, especially following the
    1996 Telecommunications Act."). At least one major broadcasting
    company seems to suggest that it is uninterested in this rulemaking
    because its focus is elsewhere:

    > The Walt Disney Company is not advocating and does not seek any
    > relaxation of the Commission's Broadcast Ownership Rules....
    > \[T\]he Walt Disney Company owns 10 television stations that
    > collectively have a theoretical aggregate reach of less than 24%
    > of U.S. Television Households, well below the statutory cap of
    > 39%. Disney has not bought a television station in more than 10
    > years. Disney sold any interest in newspapers years ago. Disney
    > also \[has divested\] a large number of its owned radio stations.
    >
    > Given the increase in, and attractiveness of, new media outlets,
    > in Disney's view, the Commission may soon find itself considering
    > ways to incent, rather than restrict, ownership of over-the-air
    > broadcast stations.

    Walt Disney Comments at 2.

[^27]: *See, e.g*., NAA Comments at 43; Media General Comments at 65.

[^28]: *See, e.g.*, NAA Comments at 42; Tribune Comments at 34. *See*
    *also*, *e.g.*, Jonathan Levy, Marcelino Ford-Livene, and Anne
    Levine, *Broadcast Television: Survivor in a Sea of Competition*,
    OPP Working Paper No. 37 (Sept. 2002) at 26 ("OPP Working Paper No.
    37"), *available at* http://www.fcc.gov/osp/workingp.html ("the fact
    that the gap in broadcast and cable network prime time audience size
    is narrowing suggests once again that cable will continue to expand
    its advertising revenue share at the expense of broadcasting");
    Peter Appert, *Newspaper Stocks: Values or Value-Traps?*, Goldman
    Sachs: Publishing News8Views, Apr. 20, 2006, at 3 (In view of "the
    ever increasing fragmentation in the local media marketplace, we
    believe we are experiencing a permanent downward shift in valuation
    levels").

[^29]: *See* *e.g.*, How People Get News and Information, survey by
    Nielsen Media Research, Inc. (2007) ("Media Ownership Study 1"),
    *available at* http://www.fcc.gov/ownership/studies.html; Consumers
    Union, Consumer Federation of America, and Free Press ("CU
    Comments"), Attach., Study 7 "Media Usage: Traditional Outlets Still
    Dominate Local News information" by Mark Cooper**,** and CU
    Comments, Attach., Study 8 "The Internet and Local News and
    Information" by Mark Cooper**.**

[^30]: *See* NAB Comments at 53-54. *See also* CU Comments, Attach.,
    Study 7 and Study 8.

[^31]: *See* Pew Internet, Latest Trends, Internet Activities
    http://www.pewinternet.org/trends.asp (72 percent of Internet users
    report ever using the Internet to get news, and 37 percent report
    using the Internet to get news "yesterday" (the day prior to the
    date of the survey)); Pew Research Center for The People & The
    Press, "Online Papers Modestly Boost Newspaper Readership: Overview"
    (July 30, 2006), *available at*
    http://people-press.org/reports/display .php3?ReportID=282 (finding
    31 percent of people surveyed use the Internet three or more times
    per week to access news, compared to 25 percent in 2005 and 2
    percent in 1996); The State of the News Media 2007: Online:
    Audience, Project for Excellence in Journalism (2007), *available
    at* http://www.stateofthenewsmedia.org/2007
    /narrative_online_audience.asp?cat=2&media=4. *See also* Newspaper
    Websites: Total Web Audience, Newspaper Association of America,
    *available at*
    http://www.naa.org/TrendsandNumbers/Newspaper-Websites.aspx (number
    of unique visitors to newspaper websites has increased from 41
    million in January 2004 to 59 million in August 2007).

[^32]: CU Comments, Attach., Study 8.

[^33]: *See, e.g*., NAA Comments at 55-57; CU Comments at 10-13 (citing
    to their own Studies 7 and 8). State of the News Media 2006: Online:
    Content Analysis, Project for Excellence in Journalism (2006),
    *available at*
    http://www.stateofthenewsmedia.org/2006/narrative_newspapers_economics.asp?cat=4&media=3
    ("Virtually all original newsgathering, though, was still being done
    by the old media, and some of the major new Internet-only
    challengers appeared to have made less progress in content over the
    previous year than the sites of the old media.").

[^34]: 18 FCC Rcd at 13627-45, ¶¶ 17-79.

[^35]: UCC claims that the Commission also failed to ensure that any
    cost savings resulting from consolidation would be used to provide
    more and better local news and public affairs programming. UCC
    Petition at 2-10. As noted above, issues related to localism are
    being addressed in a separate localism report.

[^36]: In the *2002 Biennial Review Order*, the Commission stated that
    it would commence a separate proceeding to examine proposals to
    advance broadcast ownership opportunities for minorities and women.
    18 FCC Rcd at 13634, 13636, ¶¶ 46, 50. The *Prometheus* court,
    noting that the Commission had deferred consideration of certain
    proposals for advancing broadcast ownership by minority and
    disadvantaged businesses and for promoting diversity in broadcasting
    for a future Notice of Proposed Rulemaking, stated that "the
    Commission's rulemaking process in response to our remand order
    should address these proposals at the same time." 373 F.3d at 421
    n.59. Accordingly, we concurrently adopt the *Diversity Order*,
    which adopts a number of proposals to enhance diversity of
    ownership. A number of parties, including the MMTC, NOW, and
    National Association of Black Owned Broadcasters, Inc. and the
    Rainbow/PUSH Coalition, Inc. ("NABOB"), had petitioned for
    reconsideration of the *2002 Biennial Review Order*, arguing that
    the new rules did not address minorities and suggesting proposals
    that the Commission could adopt to enhance diversity in media
    ownership. *See, e.g.,* MMTC Petition at 10-28. In addition, UCC
    sought reconsideration of a number of issues relating to the
    Commission's promotion of its diversity goals. UCC Petition at 2-10.
    *See also* Future of Music Coalition and American Federation of
    Musicians Reply ("FMC Reply ") at 13-14, Attach., "False Premises,
    False Promises," by Peter DiCola, Research Director, Future of Music
    Coalition (Dec. 2006) ("DiCola Study") at 85-90 (proposing a new
    diversity measure). The Commission addresses these diversity
    proposals in the *Diversity Order*, *supra* note 7.

[^37]: Congress amended the statute in 2004 to make the review
    requirement quadrennial rather than biennial. *See 2004*
    Consolidated Appropriations Act, 118 Stat. at 3.

[^38]: 1996 Act, 110 Stat. at 111-12.

[^39]: *Id.*

[^40]: 373 F.3d at 394.

[^41]: *Id.*

[^42]: *Id.*

[^43]: *Id.* at 382.

[^44]: *Id.* at 391 (quoting *2002 Biennial Review Order*, 18 FCC Rcd at
    4726-27, ¶ 5).

[^45]: *Id.* at 395. The vast majority of commenters agree that
    *Prometheus* sets forth the legal standard guiding this proceeding.
    FMC recommends that the Commission use a standard of "in the public
    interest" and not "necessary in the public interest." Future of
    Music Coalition Petition at 5-6 ("FMC Petition"). Similarly, UCC
    protests the view that Section 202(h) carries a deregulatory bent.
    UCC Petition at 10-17. Clear Channel, however, continues to argue
    that we should construe "necessary" in the context of Section 202(h)
    to mean "absolutely required," "indispensable," or "essential."
    *See* Clear Channel Comments at 5-6. Both the Third Circuit and the
    D.C. Circuit explicitly rejected this proposed construction, and we
    decline to adopt it here. *See Prometheus*, 373 F.3d at 393-94;
    *Cellco Partnership v. FCC*, 357 F.3d 88, 97-98 (D.C. Cir. 2004)
    (affirming Commission's interpretation of "necessary in the public
    interest" in the context of the biennial review requirements of
    Section 11 of the Act, 47 U.S.C. § 161, and concluding that the
    definition of "necessary" was not constrained by prior court
    decisions).

[^46]: *2002 Biennial Review Order*, 18 FCC Rcd at 13874, ¶ 679.

[^47]: On November 13, 2007, the Chairman issued a news release, which
    shared with the public a proposed change to the newspaper/broadcast
    cross-ownership rule and his proposal to retain the other media
    ownership rules currently under review. He invited public comment on
    his proposals and indicated that any such comment should be filed by
    December 11, 2007, which was the day when, absent a waiver, the
    Sunshine Period would begin for the Commission's December 18
    meeting. *See* "Chairman Kevin J. Martin Proposes Revision to the
    Newspaper/Broadcast Cross-Ownership Rule" (rel. Nov. 13, 2007). In
    this Order, "12/11/07 Comments" refer to public comments submitted
    in response to the news release. Several commenters criticize the
    Chairman for seeking public comment outside the scope of agency
    procedures and question whether the news release complies with
    Administrative Procedure Act ("APA") requirements. Communications
    Workers of America and American Federation of Television & Radio
    Artists ("CWA/AFTRA 12/11/07 Comments") and Consumers Union,
    Consumer Federation of America, and Free Press ("CU 12/11/07
    Comments") request that the Commission publish the final rule in the
    Federal Register prior to its adoption. CWA/AFTRA 12/11/07 Comments
    at 2; CU 12/11/07 Comments at 36-41. *See also* Media Access Project
    ("MAP") 12/11/07 Comments at 1-2; The Office of Communications of
    the United Church of Christ, Inc., National Organization for Women,
    Media Alliance, Common Cause, Benton Foundation, Consumers Action,
    Massachusetts Consumers' Coalition, NYC Wireless, Democracy Now!,
    Wayne Caswell, and James S. Elekes ("UCC 12/11/07 Comments") at 2-4.
    We disagree and find that the Commission has satisfied the APA
    notice of proposed rulemaking requirements. The *Further Notice* was
    adequate under Section 553 of the APA, which only requires notice of
    the "terms or substance of the proposed rule *or a description of
    the subjects and issues involved*." (emphasis added). 5 U.S.C. §
    553(b)(3). Because the original NPRM was adequate for APA compliance
    purposes, it is immaterial whether the recent news release complied
    with APA requirements. Indeed, any Commissioner was free to issue a
    press release sharing with the public his or her suggested changes
    to the media ownership rule prior to the December 18 meeting.

[^48]: ^?^ For AM radio stations, the service contour is the 2mV/m
    contour, 47 C.F.R. § 73.3555(d)(1) (2002); for FM radio stations,
    the service contour is the 1mV/m contour, *id.* § 73.3555(d)(2)
    (2002); for TV stations, the service contour is the Grade A contour,
    *id.* § 73.3555(d)(3) (2002). A daily newspaper is one that is
    published in the English language four or more times per week. *Id.*
    § 73.3555 n.6. As discussed below, the rule was revised in the *2002
    Biennial Review Order*, and appears in the current print of the Code
    of Federal Regulations. The revised rule was remanded and stayed by
    the Third Circuit in *Prometheus*.

[^49]: *1998 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*, MM Docket No.
    98-35, Biennial Review Report, 15 FCC Rcd 11058, 11105, ¶ 88 (2000).

[^50]: *Id*. at 11109, ¶ 95. The Commission recognized that there may be
    instances, because of the size of a market or the size and type of
    the newspaper and broadcast outlet involved, that sufficient
    diversity and competition would remain if a newspaper/broadcast
    combination were allowed. Therefore, it initiated a rulemaking to
    develop a more complete record to determine the circumstances in
    which the cross-ownership rule may not be necessary to achieve its
    intended public interest benefits. In addition, it planned to
    examine whether the rule should be tailored to address contemporary
    market conditions.

[^51]: 18 FCC Rcd at 13748, ¶ 330.

[^52]: *Id.* at 13748-49, ¶¶ 331-32.

[^53]: *Id.* at 13753-60, ¶¶ 342-54.

[^54]: *Id.* at 13760-62, ¶¶ 355-59.

[^55]: *Id.* at 13775, ¶ 390. The cross-media limits also replaced the
    existing radio/television cross-ownership rule. *Id*. The new
    cross-media limits prohibited newspaper/broadcast and
    radio/television cross-ownership in markets with three or fewer
    television stations. *Id.* at 13797-801, ¶¶ 452-61. The revised
    rules did not, however, bar a broadcast station from starting a new
    newspaper in its market. *Id.* at 13799, ¶ 456. For purposes of
    counting the number of stations in a market under the cross-media
    limits, the Commission counted both commercial and noncommercial
    full power television stations assigned to the DMA. *Id.* at 13798,
    ¶ 454. In markets with between four and eight stations, the
    Commission held that an entity could own a combination that includes
    a newspaper and either (a) one television station and up to 50
    percent of the radio stations that could be commonly owned under the
    applicable radio cap, or (b) up to 100 percent of the radio stations
    allowed under the applicable radio cap. *Id.* at 13803, ¶ 466. In
    markets with nine or more television stations, cross-media
    combinations were permitted without limit under the cross-media
    limits, so long as they complied with the applicable local
    television and local radio ownership limits. *Id.* at 13804, ¶
    472-73.

[^56]: *Id.* at 13775-76, ¶ 391. The DI, modeled after the
    Herfindahl-Hirschman Index ("HHI") used for determining market
    concentration, assigned a weight to each type of outlet based on its
    relative use by consumers. *Id.* at 13776-79, ¶¶ 393-400.

[^57]: 373 F.3d at 398-99, 399-400.

[^58]: *Id.* at 399-400. The court also found the Commission did not
    violate Section 202(h) by concluding that (1) repealing the
    cross-ownership ban was necessary to promote competition and
    localism, and (2) retaining some limits was necessary to ensure
    diversity. Furthermore, the court held that the Commission's
    continued regulation of cross-ownership was constitutionally sound.
    *Id.* at 400-02 (citing *FCC v. Nat'l Citizens Comm. for Broad*.,
    436 U.S. 775, 801-02 (1978)) ("*NCCB*").

[^59]: *Id.* at 402-03.

[^60]: American Federation of Labor and Congress of Industrial
    Organizations and the Department for Professional Employees, AFL-CIO
    ("AFL-CIO") Comments at 56; NAA Comments at 85-89. UCC and CFA/CU
    assert that the DI is rife with flawed assumptions. Among the
    problems they assert are (a) inclusion of the Internet in the index,
    despite the fact that the major providers of Internet news and
    information own other media outlets, and (b) inclusion of outlets
    regardless of whether they offer local news, whether they reach the
    entire DMA, and whether they have reportable audience shares within
    the DMA. CFA/CU contends that the DI is not procedurally or
    substantively sound. For example, they take issue with the fact that
    certain television stations within the New York DMA, including a
    community college station and a station with a home shopping format,
    are weighted more heavily than *The New York Times* in the DI.
    Procedurally, CFA/CU fault the Commission for failing to seek public
    comment on the index. *See*, *e.g.,* CFA/CU Petition at 3-4, 14-15.

[^61]: UCC Petition at 34-38; CFA/CU Petition at 3-4.

[^62]: 21 FCC Rcd at 8848, ¶ 32.

[^63]: Because our new cross-ownership rule does not rely on the DI and
    we are abandoning the cross-media limits, we dismiss as moot the
    petitions challenging the DI and the cross-media limits.

[^64]: *See* 373 F.3d at 398.

[^65]: *Id*. at 398-99.

[^66]: *Id.* at 399-400.

[^67]: *Id.* at 400.

[^68]: Belo Comments at 17-18; Cox Comments at 5-7; Fox Comments at
    25-26; Freedom of Expression Foundation, Inc. ("FOEF") Comments at
    9-10; Media General Comments at 43-44, 63; Gannett Comments at 6-14;
    Hearst Comments at 47-48; NAA Comments at 2, 17-18; NAB Comments at
    110-11; Tribune Comments at 7-9; *see also* Remarks by Vincent
    Malcolm, Vice President and General Manager of KTLA Channel 5
    (Tribune Broadcasting Company), Media Ownership Hearing in El
    Segundo, California (Oct. 3, 2006), Transcript at 23-28; Remarks by
    Pat Roberts, President of Florida Association of Broadcasters, Media
    Ownership Hearing in Tampa, Florida (Apr. 30, 2007), Transcript at
    83; Remarks by Congressman Jim Davis, Media Ownership Hearing in
    Tampa, Florida (Apr. 30, 2007), Transcript at 95-97; Remarks by Bob
    Gremillion, President, CEO and Publisher of the South Florida
    Sentinel, Media Ownership Hearing in Tampa, Florida (Apr. 30, 2007),
    Transcript at 221-25.

    *But see* AFL-CIO Comments at 52-56 and Reply at 26; AFTRA Comments
    at 20; CWA Comments at 4, 54; CU Comments at 6, UCC Comments at 60,
    63 and Reply at 26; Joint Resolution of State, Regional and National
    Association of Free Community Papers Comments at 1; Free Community
    Papers of New England Comments at 1; Free Community Papers of
    Michigan Comments at 1; Free Community Papers of New York Comments
    at 1; Remarks by Congresswoman Maxine Waters, Media Ownership
    Hearing in Los Angeles, California (Oct. 3, 2006) Transcript at
    19-23; Remarks by The Honorable Diane Watson, Media Ownership
    Hearing in Los Angeles, California (Oct. 3, 2006) Transcript at
    23-27; Remarks by Dr. Mark Cooper, Director of Research for the
    Consumer Federation of America, Media Ownership Hearing in El
    Segundo, California (Oct. 3, 2006) Transcript at 56-60; Remarks by
    Emily Rush, Citizen Participant, Media Ownership Hearing in El
    Segundo, California (Oct. 3, 2006) Transcript at 74-76; Remarks by
    Steve Erlanger, Publisher of Hometown News, Media Ownership Hearing
    in Tampa, Florida (Apr. 30, 2007), Transcript at 51-57; Remarks by
    Professor Eric Klinenberg, New York University, Media Ownership
    Hearing in Tampa, Florida (Apr. 30, 2007), Transcript at 67-72;
    Remarks by Patrick Manteiga, Editor and Publisher of La Graceta,
    Media Ownership Hearing in Tampa, Florida (Apr. 30, 2007),
    Transcript at 73-78; Remarks by Lowel Stewart Harris, Teacher and
    Student, Media Ownership Hearing in Tampa, Florida (Apr. 30, 2007),
    Transcript at 290-92; Remarks by Lucille Griggs, Citizen
    Participant, Media Ownership Hearing in Tampa, Florida (Apr. 30,
    2007), Transcript at 295-97.

[^69]: *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, 50 FCC 2d
    1046, 1051 ¶ 20 (1975) ("*1975 Second Report & Order*"). 

[^70]: Our rules will not, however, bar a broadcast station in a market
    from starting a newspaper, as that would expand, not decrease,
    diversity. *See* *2002 Biennial Review Order*, 18 FCC Rcd at
    13798-99, ¶ 456; *see also* Letter from Mark D. Schneider, Counsel
    for Allbritton Communications Co. to Marlene H. Dortch, Secretary,
    FCC (Nov. 19, 2007).

[^71]: *See generally 1975 Second Report & Order*, 50 FCC 2d 1046.

[^72]: *Id*. at 1074-75, ¶ 100.

[^73]: *See* *Id.* at 1066, 1074-75, ¶¶ 70, 100.

[^74]: *Id*.

[^75]: *Id*. at 1074-75 ¶ 100.

[^76]: *Id.* at 1048, 1050, ¶¶ 9, 14.

[^77]: *Id.* at 1075, ¶ 101.

[^78]: The relatively limited options available to a person attempting
    to reach a wide audience within his or her community stands in stark
    contrast to the means by which new entrants today can participate in
    the marketplace of ideas in an effective way. The widespread
    availability of home publishing devices that Americans now enjoy in
    the form of personal computers, printers, and copy duplication
    equipment existed only in limited, cost-prohibitive, and primitive
    form -- if they existed anywhere at all. William Blinn
    Communications, *A Short Jaundiced History of Desktop Publishing*,
    Random Thoughts: Communications With a Purpose, July 2004,
    *available at* http://www.blinn.com/news/2004-07.pdf (visited Dec
    10, 2007). The Internet, which today stands as the premiere means by
    which ordinary citizens and startup media companies communicate with
    a worldwide audience, was in 1975 little more than a handful of
    linked university and Defense Department research computers
    transmitting relatively miniscule amounts of information, none of it
    for public consumption. Katie Hafner & Matthew Lyon, *Where Wizards
    Stay Up Late: The Origins of the Internet* 211 (1996) (MIT's
    Artificial Intelligence Lab passed only 9,925 messages over ARPANET,
    the Internet's predecessor, during the first quarter of 1976).

[^79]: The number of traditional newspapers operating in the United
    States during the period between 1945 and 1980 remained relatively
    stable, which suggests that the newspaper market was operating at or
    near capacity and generally was unlikely to support additional
    entrants. In 1947, there were 1,854 daily newspapers; in 1958, there
    were 1,778 daily newspapers; in 1970, there were 1,748; in 1980,
    there were 1,745. *Statistical Abstracts 1951-1994*, US Department
    of Commerce, Bureau of the Census, *available at*
    http://www.census.gov/prod/www/abs/statab1951-1994.html (visited
    Nov. 15, 2007). On the broadcasting side, by 1975 the Commission
    noted that it was very possible that a newspaper owner applying for
    a broadcast license in its local community might well be applying
    for the last available broadcast channel in the area, due to the
    fact that "the number of channels open for filing ha\[d\] vastly
    diminished" as compared to earlier years. *See* *1975 Second Report
    & Order*, 50 FCC 2d at 1075, ¶ 101.

[^80]: *See* NAA Comments at 24-37.

[^81]: *Id*. at 30.

[^82]: *Id*. at 24 n.84.

[^83]: Internet resources may be used as a primary source for news and
    information, or they may be used in conjunction with broadcast
    stations and newspapers. *See* John B. Horrigan*,* Pew Internet &
    American Life Project, *Online News: For many home broadband users,
    the Internet is a primary news source*. (Mar. 22, 2006), *available
    at* http://www.pewinternet.org.pdfs/PIP_News.and.Broadband.pdf. Many
    local broadcast stations and newspapers now have a dedicated website
    for their media outlets. Not only are these new online sources
    providing information to the public, they are also competing with
    traditional media for audiences and advertising revenue. Online
    advertising was up more than a third in 2006, exceeding \$16
    billion. However, according to PEJ, projections for continued growth
    in online advertising will begin to slow in 2008, and could drop to
    single digit growth before the end of the decade. Project for
    Excellence in Journalism, The State of the News Media 2007: An
    Annual Report on American Journalism: Economics, *available at*
    http://stateofthemedia.org/2007/narrative_online_economics.asp?
    cat=4& media=1.

[^84]: *See* OPP Working Paper No. 37 at 102-113. *See also* Hitwise, US
    News & Media Report at 2 (Apr. 2007), *available at*
    <http://www.hitwise.com/registration-page/us-news-media.php> ("The
    market share of visits to the top 10 News and Media websites
    declined by 3.8% from March 2006 to March 2007, indicating that news
    consumption is beginning to fragment as users expand their range of
    news sources to non-traditional news websites").

[^85]: *See* Research Central, Market Track, Trends in Television,
    Television Households, TVB.org, *available at*
    http://www.tvb.org/rcentral/mediatrendstrack/tv/tv.asp?c=tvhouseholds
    (showing the number of TV households increasing). *See also* *2005
    Video Competition Report*, 21 FCC Rcd at 2617, Table B-1; *2004
    Video Competition Report*, 20 FCC Rcd at 2869, Table B-1 (showing
    MVPD subscribers increasing); US Dept. of Commerce, Bureau of the
    Census, Statistical Abstract of the United States: 2001-2006,
    Section 24: Informal and Communications, *available at*
    http://www.census.gov/prod/www/statistical-abstract-2001_2005.html
    (visited Dec. 21, 2007).

[^86]: *See* Research Central, Market Track, Trends in Advertising
    Volume, Estimated Annual US Advertising Expenditures, 2004-2006,
    2001-2003, 1998-2000, TVB.org, *available at*
    http://www.tvb.org/rcentral
    /mediatrendstrack/Trends_In_Advertising_Volume.asp (showing total
    national and local advertising expenditures rising over time). *See
    also* NAA, *Advertising Expenditures, 1950-2006*, *available at*
    http://www.naa.org/ TrendsandNumbers/Advertising-Expenditures.aspx
    (visited Nov. 26, 2007).

[^87]: *See* Pew People and the Press Report, *Online Newspaper
    Readership Countering Print Losses* at 5-7, *available at*
    http://peoplepress.org/reports/pdf/248.pdf (visited Nov. 26, 2007);
    Project for Excellence in Journalism, *The State of the News Media
    2007, [Online:
    Audience](http://www.stateofthenewsmedia.org/2007/narrative_online_audience.asp?cat=2&media=4)*,
    *available at*
    http://www.stateofthenewsmedia.org/2007/narrative_online\_
    audience.asp?cat=2&media=4 (growth in online audience suggests that
    "the newspaper audience may not be shrinking, something also evident
    in survey data. But it reinforces the imperative that the Internet
    model needs to figure out a way to 'monetize' those readers\....
    Online news consumption may also be undercounted because people
    don't consider the places they go to be 'news' sites. More than half
    the people said they got campaign news last year from blogs,
    candidate sites, government Web sites, comedy sites, and
    interest-group sites, where often they were reading wire stories.").

[^88]: NAA, *Newspaper Websites: Total Web Audience*, *available at*
    http://www.naa.org/TrendsandNumbers/ Newspaper-Websites.aspx
    (visited Nov. 26, 2007).

[^89]: *See*, *e.g.*, NAA Comments at 41-43 ("While newspaper
    circulation has been declining at a rate of one percent each year
    since 1990, these losses accelerated in 2005 \... \[when\]
    \[c\]irculation went down 2.6 percent for daily newspapers and 3.1
    percent for Sunday newspapers." NAA describes how "\[a\]dvertising
    revenue also has taken a substantial hit" and how analysts have been
    lowering their revenue predictions for the newspaper industry. NAA
    observes the declining share price of *The New York Times*, Knight
    Ridder's "forced sale," and turmoil at the Tribune Company. *See
    also*, Tribune Comments at 33-34 (compared to every other medium of
    mass communications, newspaper readership is the only category to
    decline steadily in use since 2000).

[^90]: According to the 1990 Census, there were 151,325,798 people in
    the United States in 1950, and according to the 2000 Census there
    were 281,421,906 people in the United States, an increase of 86
    percent. *See* *1990 Census of Population and Housing*, *available
    at* http://www.census.gov/prod/www/abs/decennial/1990.htm (visited
    Dec. 27, 2007); *Population Change and Distribution 1990 to 2000*,
    *available at* http://www.census.gov/prod/2001pubs /c2kbr01-2.pdf
    (visited Dec. 10, 2007).

[^91]: Brendan Buckley, Mike Simonton, *et al*. FitchRatings, *U.S.
    Media Outlook*, Jan. 18, 2007 at 4; NAA, *The Source: Newspaper by
    the Numbers* at 22, 24; U.S. Dept. of Commerce, Bureau of the
    Census, *Abstracts 2007*, *available at*
    http://www.census.gov/prod/2006pubs/07statab/infocomm.pdf.

[^92]: U.S. Dept. of Commerce, Bureau of the Census, *Statistical
    Abstracts 1951-1994*, *available at*
    http://www.census.gov/prod/www/abs/statab1951-1994.htm (visited Nov.
    15, 2007).

[^93]: U.S. Dept. of Commerce, Bureau of the Census, *Statistical
    Abstracts 2007*, Information and Communications 711, *available at*
    http://www.census.gov/prod/2006pubs/07statab/infocomm.pdf. (visited
    Nov. 15, 2007). NAA states in its comments that as of September 30,
    2005, the total circulation of daily newspapers was approximately 55
    million, a drop from roughly 58 million in 2003. NAA Comments at 25.

[^94]: Jennifer Saba, *First FAS-FAX Numbers: Many Top Papers Take Big
    Hits*, Editor & Publisher, Nov. 5, 2007, *available at*
    http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003667950.

[^95]: This is consistent with recent trends in the industry generally.
    *See*, note 89, *supra*.

[^96]: Our concern is based on the recognition that significant
    reductions in the capacity of a newsgathering organization to
    effectively gather news carries with it the concomitant risk of
    degradation in the quality of the news output. Accordingly, we view
    reductions in the number of professional journalists employed in the
    newspaper industry as a negative effect more likely than not to
    result in a diminution of service to the public.

[^97]: *See* Project for Excellence in Journalism, *The State of the
    News Media 2007: An Annual Report on American Journalism: News
    Investment*, *available at*
    http://www.stateofthenewsmedia.org/2007/narrative\_
    newspapers_newsinvestment .asp?cat=5&media=3 (citing American
    Society of Newspaper Editors, News Employment Census --Table A,
    (rel. Apr. 25, 2006)).

[^98]: *See* Letter from Martha E. Heller, Counsel for Newspaper
    Association of America, to Marlene H. Dortch, Secretary, FCC, Attach
    at 1-4 ("NAA Dec. 11, 2007 *Ex Parte*").

[^99]: *See* *id*. (reporting, *e.g.*, that the *Pittsburgh
    Post-Gazette* cut its award-winning Washington bureau to one
    reporter, the *Sacramento Bee* closed its San Francisco and Los
    Angeles bureaus, and the *Louisville Courier-Journal* cut three
    state bureaus).

[^100]: *Id.* at 2-5. CWA cites to references in the *2006 State of the
    Media* report by the Project for Excellence in Journalism, that
    notes: "*The New York Times* cut 60 people from its newsroom, *The
    Los Angeles Times* cut 85; Knight Ridder's *San Jose Mercury News*
    cut 16 percent, *The Philadelphia Inquirer* dropped 15 percent, and
    that after cutting another 15 percent only five years earlier. As
    recently as 1990, *The Philadelphia Inquirer* had 46 reporters
    covering the city, in 2005 it had 24." CWA Comments at 46-49.

[^101]: *Id.*

[^102]: CWA Comments at 46-49. "In post-mortem after the sale \[of
    Knight-Ridder\], a Merrill Lynch analyst acknowledged that 'you
    can't cut the journalism and still put out a good paper' while a
    Goldman Sachs analyst concluded that 'financial restructuring is not
    the answer to what ails the newspaper industry.'" CWA also points
    out that "\[e\]ven Wall Street analysts, rarely opponents of
    costcutting, worried that newsroom cuts were going too far." Peter
    Appert of Goldman Sachs noted that downsizing was '"dramatic to the
    point where readers will notice' and circulation and ad losses might
    follow."' *Id*.

[^103]: *See Advertising Expenditures, 1950-2006*, Newspaper Association
    of America, at <http://www.naa.org/Trendsand>
    Numbers/Advertising-Expenditures.aspx (visited Nov. 26, 2007).
    *Newspaper Projections*, [Media Trends 2007]{.smallcaps}, SNL Kagan
    LLC, at 135.

[^104]: *Newspaper Projections*, [Media Trends 2007]{.smallcaps}, SNL
    Kagan LLC, at 138-139. SNL *Kagan* analysis and estimates are based
    on NAA, Editor and Publisher, company and industry data.

[^105]: *See* FOEF Comments at 18; Belo Comments at 18 and NAB Reply at
    87. A 2006 Merrill Lynch report raises the concern about the \$2.3
    billion decline in classified revenues, as reported by the NAA, from
    \$19.6 billion in 2000 to \$17.3 billion in 2005. The classified
    category fell from 40 percent of total advertising revenues in 2000
    to 35 percent in 2005. *Merrill Lynch Raises Alarm on Health of
    Newspaper Industry*, *available at*
    http://www.newswatch.in/news-analyses/markets-companies/4938.html
    (quoting Lauren Rich Fine, former managing director-corporate
    strategy and research, Merrill Lynch, New York (May 26, 2006). *See
    also* *Advertising Expenditures* *1950-2006*, Newspaper Association
    of America, *available at* http://www.naa.org/TrendsandNumbers
    /Advertising-Expenditures.aspx; Washington Post Company *Annual
    Report 2006*, at. 2 ("It was a poor year, however, for the business
    we are named for, *The Washington Post*. Circulation continued to
    fall and a sharp drop in classified advertising raised questions
    about the future of the business.").

[^106]: *See* *Craigslist Factsheet*,
    http://www.craigslist.org/about/factsheet.html ("Local classifieds
    and forums for 450 cities worldwide -- community moderated, and
    largely free.").

[^107]: *See* *About eBay*,
    http://pages.ebay.com/aboutebay.html?\_trksid=m40 ("eBay is The
    World\'s Online Marketplace®, enabling trade on a local, national
    and international basis. With a diverse and passionate community of
    individuals and small businesses, eBay offers an online platform
    where millions of items are traded each day.").

[^108]: *See* *About Zillow Real Estate*,
    http://www.zillow.com/corp/About.htm ("Zillow.com is an online real
    estate service dedicated to helping you get an edge in real estate
    by providing you with valuable tools and information.").

[^109]: NAA Comments at 42-43; Gannett Comments at 21-22; NAB Comments
    at 32-33.

[^110]: *See, e.g.*, Media General Comments at 5-6; FOEF Comments at 18.

[^111]: Moody's Economy.com Industry Reports, Consumer & Health Services
    Sector, Newspaper Section, at 43 (May 2006).

[^112]: *Newspaper Newsroom Workforce* *1977-2005*, The State of the
    News Media 2006, Project for Excellence in Journalism, *available
    at*
    http://www.stateofthenewsmedia.org/2007/chartland.asp?id=198&ct=line&dir=
    &sort=&col1 \_box=1&col2_box=1; Journalism.org, *The State of the
    News Media 2007*, (citing American Society of Newspaper Editors,
    News Employment Census -- Table A, released Apr. 25, 2006),
    *available at* http://www.stateofthenewsmedia.org/
    2007/narrative_newspapers_newsinvestment.asp?cat=5&media=3 (visited
    Nov. 15, 2007). *See* NAB Reply at 88; CWA Comments at 46-49.

[^113]: *See* *Merrill Lynch Raises Alarm on Health of Newspaper
    Industry*,
    http://www.newswatch.in/news-analyses/markets-companies/4938.html
    (quoting Lauren Rich Fine, former managing director-corporate
    strategy and research, Merrill Lynch, New York) (May 26, 2006).

[^114]: CU Comments at 16-17, Attach., Study 9, "Local Media and the
    Failure of the Consolidation/Conglomeration Model" by Mark Cooper at
    157-69, and Attach., Study 10 "The Special Concerns About the Impact
    of Cross Ownership on Print Journalism," by Mark Cooper and Steven
    Cooper at 196-206; *see, also*, UCC 12/11/07 Comments at 5-7.
    CWA/AFTRA contends that when media owners tap into the opportunities
    to gain readers and advertising revenue from new distribution
    platforms such as the Internet and digital television opportunities,
    they will discover new business models that will enable them to
    regain their "traditional strength in newsgathering and quality
    entertainment." CWA/AFTRA 12/11/07 Comments at 3-4.

[^115]: *See*, *e.g*., Block Comments at 6-9; Bonneville Comments at
    5-7; Cox Comments at 5-7, 17-18; Media General Comments at 94; Media
    General Reply at 8-12; NAB Comments at 29-38; NAA Comments at 41-43;
    Tribune Comments at 33-34, 82.

[^116]: CU Comments, Attach., Study 7 and Study 8; *see also* Project
    for Excellence in Journalism, *State of the Media 2007*, *available
    at*
    http://stateofthemedia.org/2007/narrative_newspapers_newsinvestment.asp
    ("Gannett charges its newsrooms with seven tasks. On the traditional
    side are a strong watchdog function and local news effort. In
    addition, though, the newsrooms are asked to develop rich databases,
    convene community conversations, develop custom content for
    consumers, and expand multimedia and varied digital content").

[^117]: Hitwise US News & Media Report at 2 (Apr. 2007), *available at*
    http://www.hitwise.com/registration-page/us-news-media.php ("Search
    engines, portal frontpages, and news aggregators were the leading
    sources of traffic to News and Media websites in March 2007. The
    share of visits to News and Media websites from search engines
    increased over the past year, with traffic from Google increasing by
    29.7 percent for Print websites and 35.9 percent for Broadcast Media
    websites."); Pew Research Center for The People & The Press, *Online
    Papers Modestly Boost Newspaper Readership*, Sec. I, (July 30,
    2006), *available at* http://people-press.org/reports/display.php3?
    ReportID=282 ("As a whole, news aggregators such as Google News,
    Yahoo News and AOL News are a major source of online news. Not only
    are they frequently volunteered as websites used most often for
    news, but nearly half (45%) of Americans who regularly get news
    online (and 18% of the public overall) say they regularly visit
    these websites to get news. Roughly a third (32%) of online news
    consumers say they regularly visit the news sites of television
    networks such as CNN.com, MSNBC.com and ABCnews.com.").

[^118]: *State of the News Media 2006: Online: Intro, Project for
    Excellence in Journalism* (2006), *available at*
    http://www.stateofthenewsmedia.org/2006/narrative_newspapers_economics.asp?cat=4&media=3
    ("Rivals on the Web that offer classified listings or aggregate
    other people's work, but produce very little journalistic content of
    their own, were continuing to steal revenues away. There still
    appears no clear path for transferring to this new medium all the
    wealth that has long financed journalism for the good of civil
    society. For now, unless things change, it appears that the
    resources devoted to skilled journalism will continue to shrink as
    the Web grows."); *id*. ("Virtually all original newsgathering,
    though, was still being done by the old media, and some of the major
    new Internet-only challengers appeared to have made less progress in
    content over the previous year than the sites of the old media.")

[^119]: *See* above at paragraphs 24-27; *see, e.g*., Belo Corp Comments
    at 18; Media General Comments at 63-66.

[^120]: *See, e.g*., Bruce A. Williams & Michael X. Delli Carpini,
    *Monica and Bill All the Time and Everywhere: The Collapse of
    Gatekeeping and Agenda Setting in the New Media Environment*, 47
    [Am. Behav. Sci.]{.smallcaps} 1208, 1210 (May 2004) ("Williams and
    Delli Carpini"); Scott Lambert, *To Post Or Not To Post: Gatekeeping
    Effects of Breaking News On Internet Newspaper Websites*, Published
    at the Symposium on Online Journalism, at 2-5 ("Lambert"); Aaron
    Delwiche, *Agenda-Setting, Opinion Leadership, and the World of Web
    Logs*, [First Monday]{.smallcaps} (2005), *available at*
    http://www.firstmonday.org/issues/issue10_12/delwiche/index.html
    ("Delwiche").

[^121]: The Internet remains a rapidly evolving medium. We expect that
    the trends supporting our conclusion that traditional media sources
    no longer enjoy the same degree of control over the gathering and
    delivery of news and information will grow stronger as the Internet
    and other communications networks develop.

[^122]: *See* Williams and Delli Carpini at 1208-1230 (discussing
    historical development of concept of journalists as "gatekeepers");
    Lambert at 2-5 (same). The gatekeeping function was identified as
    early as the 1920s by Walter Lippman, *see* Williams and Delli
    Carpini at 1210. The Commission's 1975 Order indicates that the
    agency focused on the editorial processes involved in gatekeeping.
    *1975 Second Report & Order*, 50 FCC 2d at 1050, ¶14 ("\[t\]he
    significance of ownership from the standpoint of 'the widest
    possible dissemination of information' lies in the fact that
    ownership carries with it the power to select, to edit, and to
    choose the methods, manner and emphasis of presentation, all of
    which are a critical aspect of the Commission's concern with the
    public interest").

[^123]: *See generally* Delwiche (discussing the traditional
    agenda-setting power of the press throughout most of the 20^th^
    century).

[^124]: The development of new avenues of content distribution (as
    discussed below) has had the tandem effect of encouraging amateur
    journalists (or so called "citizen journalists") to participate by
    making available raw material online. For example, video sharing
    website YouTube allows users to upload and share video content with
    anyone with an Internet connection. *See* http://www.youtube.com
    /signup?next=/my_videos (visited Nov. 19, 2007). Additionally,
    growing numbers of professional, semiprofessional, or dedicated
    amateur bloggers reporting de facto eyewitness accounts at major
    news events also contribute to the availability of news content for
    consumers. *See* James Poniewozik, *The Beast With A Billion Eyes*,
    [Time]{.smallcaps}, Dec. 25, 2006, at 64 ("Poniewozik") (discussing
    availability of front-line footage of events in war zone areas in
    Iraq).

[^125]: News media organizations are driven by two essential forces:
    first, the need to identify and then gather content that will be of
    interest to consumers; and second, the need to gather enough of that
    interesting content to fill the "news hole" of that organization's
    published or broadcast product. *See* Lambert at 2-5 (discussing
    function of news organizations in selecting news to cover and
    gathering information for publication). Traditionally, the selection
    of news source inputs -- that is, the fundamental decision-making
    process about what stories are worthy for dissemination to the
    public -- has been a largely one-way process, with editors and
    journalists using their own judgments, plus a stable circle of
    sources, to decide what stories to cover. *Id*. It has been observed
    that in the pre-Internet era, traditional media often relied upon
    active, ongoing relationships with government officials and other
    "elites" as a main source for news and information, particularly in
    the political/civic affairs sphere, which was then passed along to a
    largely passive citizenry. *See* Williams and Delli Carpini at 1208
    ("the most profound impact of the new media environment may well be
    the way it undermines the ability of any elite to play \[the\]
    central role \[of gatekeeper for politically relevant
    information\]").

[^126]: The most dramatic changes to the traditional role of media
    outlets have occurred with respect to the aggregation and
    dissemination of content. Text, video, and audio content can be and
    already is widely delivered, live or recorded, via the Internet. In
    addition, the ongoing deployment of new content delivery
    applications made specifically for use by handheld mobile devices is
    likely to further erode the market share of traditional media
    outlets, which must compete for eyes and ears with these new
    entrants in the content delivery marketplace. With respect to the
    role of broadcasters and publishers as aggregators, we note that the
    Internet is rapidly developing new ways to aggregate content,
    particularly by means that allow individual consumers to tailor the
    types and amount of content that is delivered to them. Aggregation
    sites are rapidly growing in popularity, with the most popular sites
    reaching audiences that dwarf all but the largest and most widely
    distributed traditional media outlets.

[^127]: *See* Joel David Bloom, *The Blogosphere: How a Once-Humble
    Medium Came to Drive Elite Media Discourse and Influence Public
    Policy and Elections*, presented at the Second Annual Pre-APSA
    Conference on Political Communication: *Mass Communication and Civic
    Engagement*, and at the 2003 Annual Meeting of the American
    Political Science Association, August 2003, in Philadelphia, PA,
    http://darkwing.uoregon.edu/\~jbloom/APSA03.pdf (visited Nov. 19,
    2007) ("Bloom").

[^128]: *See, e.g,* Jose Antonio Vargas*, Storming the News
    Gatekeepers*, [Wash. Post,]{.smallcaps} Nov. 27, 2007, at C1.

[^129]: *See generally* J.D. Lasica, *Blogs and Journalism Need Each
    Other*, [Nieman Reports]{.smallcaps}, Fall 2003, at 70-74 (noting
    ability of bloggers to take part in editorial selection of
    newsworthy subjects).

[^130]: *See generally* Bloom (discussing effect of online discussion on
    the evolution of news coverage of Senator Trent Lott's public
    comments on Sen. Strom Thurmond's 1948 campaign for president);
    Poniewozik at 63-64 (discussing effect of online discussion on
    several high-profile news stories in 2006).

[^131]: *2002 Biennial Review Order*, 18 FCC Rcd at 13756-57, ¶¶ 347-49.
    In the *2002 Biennial Review Order*, the Commission defined
    advertising as the primary economic market in which broadcast
    stations and newspapers derive their primary sources of revenue.
    *Id*. at 13748-49, ¶ 331. The Commission also concluded that for
    purchasers of advertising time, "newspapers, television, and radio
    are not good substitutes and therefore make up distinct product
    markets." *Id*. at 13749, ¶ 332. The relevant product market was not
    challenged on appeal. We continue to support that conclusion and
    find no reason to deviate from the defined product market. UCC
    contends that we incorrectly focused on advertising dollars, instead
    of on whether newspapers and television compete for the provision of
    local news. UCC Petition at 33-34. In the *2002 Biennial Review
    Order*, the Commission did take this into consideration and
    concluded that consumers experience print and electronic media in
    very different ways: "These differences are significant from a
    competitive standpoint both for consumers and, as described above,
    for advertisers. For consumers this means that the programming or
    content is different between newspapers and broadcast TV." 18 FCC
    Rcd at 13753, ¶ 341. In conclusion, the Commission found that
    newspaper/broadcast combinations cannot adversely affect competition
    in any relevant product market. We continue to support this
    conclusion. *Id*.

[^132]: Belo Comments at 13-16; Clear Channel Comments at 80-90; Media
    General Comments at 7-11; Morris Reply at 5-6; NAA Comments at
    66-79. *But see* CU Reply at 35. CU objects to cross-owned
    facilities sharing resources because it claims that in order to save
    costs, the consolidated company will share personnel and content
    emphasizing national, rather than local, programming. It cites the
    example of NBC's acquisition of Telemundo, which resulted in the
    closure of five local Telemundo news bureaus in areas with large
    Hispanic populations and relocation of those operations to one
    location in Dallas. *Id*. In 2003, after NBC purchased Telemundo,
    Robert Okun, Vice President and head of NBC's Washington Office,
    explained on *NewsHour with Jim Lehrer* that "in terms of a
    network-owned station on average we do 30 percent better than a
    non-network-owned station in terms of local news\.... \[W\]e would
    argue we do a heck of a good job, sometimes better than even
    independent stations." NewsHour with Jim Lehrer Transcript,
    "Showdown at the FCC," PBS, *available at*
    http://www.pbs.org/newshour/bb/media/jan-june03/FCC_05-15.html.

[^133]: Belo Comments at 22-23 (stating that television duopolies lead
    to new daily newscasts on three stations); Cox Comments at 12-17
    (citing to examples of local programming and community service
    efforts in markets where it owns newspaper/broadcast combinations);
    Gannett Comments at 26-31; Media General Comments at 3, 9-10 (citing
    to the Tampa, Florida market, where it owns a grandfathered
    newspaper/television combination and an online news publication);
    Morris Comments at 13-20; NAB Reply at 82-84 (citing numerous
    studies that found cross-ownership increases the quantity and
    quality of news and local programming).

[^134]: Cox Comments at 12-17 (citing to examples of local programming
    and news specials in the Atlanta market where it owns a
    newspaper/broadcast combination).

[^135]: Media General Reply at 6.

[^136]: *Id*. at 8. Media General defines hyper-local news as news
    coverage of local events such as video of high school sports, local
    pageants and festivals, local weather emergencies and disasters, and
    local charities. *Id*.

[^137]: *Id*. at 9.

[^138]: Gannett Comments at 26-31.

[^139]: Belo Comments at 22-23.

[^140]: Media General Reply at 9.

[^141]: Media General Comments at 23-29, App. 5, "Review of the
    Increases in Non-Entertainment Programming Provided in Markets with
    Newspaper Owned Television Stations: An Update" by Michael Baumann,
    Economists, Inc. (Oct. 2006)at 1-2. The Commission acknowledges that
    this study provides, at best, limited evidence of higher amounts of
    non-entertainment programming in markets with cross-ownership. As
    the peer review correctly notes, the study fails to adjust for
    unobserved market characteristics, and the sample is small and thus
    may not be representative of markets with and without
    cross-ownership. *See* Media General Study Peer Review by Kenneth C.
    Wilbur, Asst. Prof. of Marketing, Marshall School of Bus., Univ. of
    So. Ca., *available at* http://www.fcc.gov/mb
    /peer_review/reviews.html. Media General also cites to several
    additional materials: 1975 Commission Study, 50 FCC 2d at 1078 n.26,
    App. C, Belo Comments submitted in the *1998 Biennial Media
    Ownership* proceeding, MM Docket No. 98-35 (July 21, 1998), S.
    Robert Lichter, Ph.D., "Review of the Increases in Markets with
    Newspaper Owned Television Stations," submitted in Media General's
    Comments in MM Docket No. 01-235 (Dec. 2001), Victor B. Miller and
    Kevin R. Grunech of Bear Stearns & Co., Inc., Miller Study (cited in
    *2002 Biennial Review Order*, 18 FCC Rcd at 13761, ¶ 357, n. 800),
    and Thomas C. Spavins, *et al.* "The Measurement of Local Television
    News and Public Affairs Programs," (Sept. 2002) ("MOWG Study No. 7")
    (cited in *2002 Biennial Review Order*, 18 FCC Rcd at 13754, ¶ 343
    n. 760). *See also* NAB Comments at 117-19 (citing John C. Busterna,
    *Ownership, CATV & Expenditures for Local TV News*, 57
    [J.Q]{.smallcaps}. 287, 289 (1980) and Stanley Besen & Daniel
    O'Brien, Charles Rivers Assoc., Inc., "An Economic Analysis of the
    Efficiency Benefits from Newspaper- Broadcast Co-Ownership,"
    attached as App. B to Gannett Comments submitted in MM Docket No.
    98-35 (July 21, 1998) (finding that consumers of information may
    experience higher prices, less attractive product offerings, or
    slower innovation than if owners of broadcast stations and
    newspapers were free to operate under common ownership)).

[^142]: NAB Reply at 38-40.

[^143]: AFL-CIO Comments at 22-33. *See also* Remarks by Robert
    Dardenne, Assoc. Prof. Journalism and Media Studies, USF-St.
    Petersberg, Media Ownership Hearing in Tampa Bay, Florida (Apr. 30,
    2007), Transcript at 39-40 (questioning whether streamlined news
    operations produces better quality local news).

[^144]: AFL-CIO Comments at 22-25 (citing to newsroom cutbacks at *The
    LA Times* when bought by Tribune and layoffs at the *San Jose
    Mercury News*, *The Philadelphia Inquirer* and *The Daily News*).

[^145]: *Id*. at 26 (citing to MidWest Families Comments submitted in MM
    Docket No. 01-235, which provided examples of the results from
    radio/newspaper combinations.)

[^146]: Center for Creative Voices In Media ("CCVM") Comments at 9.

[^147]: "The Effects of Cross-Ownership on the Local Content and
    Political Slant of Local Television News," by Jeffrey Milyo, Center
    for Applied Econ., Univ. of Kansas, School of Bus. and Dept. of
    Econ. and Truman School of Public Affairs, Univ. of Missouri (Rev.
    Sept. 2007) ("Media Ownership Study No. 6"), *available at*
    http://www.fcc.gov/ownership/studies.html, at abstract. Media
    Ownership Study 6 underwent two peer reviews, one by Matthew
    Gentzkow ("Gentzkow review") and one by Kenneth Goldstein, Matthew
    Hale, and Martin Kaplan ("Goldstein, *et al*. review"). *See* Media
    Ownership Study 6 Peer Review, *available at*
    http://www.fcc.gov/mb/peer_review/peerreview.html. In response to
    the Gentzkow review, the study author submitted a revised study that
    corrected some data errors and added the average marginal effects of
    cross-ownership for all variables in the report. As such, we find
    that all issues raised in the Gentzkow review have been dealt with.
    The Goldstein, *et al*. review raises six problems with the
    conclusions of Study 6, essentially due to what the reviewers term
    "*empirical data in the study \[that\] are so limited that the
    study's conclusions do not and cannot possess the reasonable level
    of confidence necessary to provide policy makers with useful
    evidence on which to base their regulatory decisions*" (emphasis in
    the original.) We first note that, in contrast, the Gentzkow review
    found that the data for Study 6 are of "very high quality" and "give
    a rich, fine-grained picture of the news coverage of local
    television stations unlike anything that was available before." The
    Goldstein, *et al*. review then states that (1) it cannot be assumed
    that Study 6's sample of evening news is representative of stations'
    news coverage, (2) there is evidence that the quantity of news
    coverage immediately before an election is different than that over
    the entire campaign, (3) there is evidence that the quality of news
    coverage immediately before an election is different than that over
    the entire campaign, (4) Study 6's author was mistaken in coding
    state political stories as "local" stories, (5) a key indicator of
    bias went unmeasured due to the types of stories included in the
    dataset, and (6) the study emphasizes statistically weak findings
    supporting newspaper/television cross-ownership while downplaying
    "possibly stronger" findings that argue against cross-ownership.

    These criticisms, either in whole or in part, do not invalidate the
    findings of Study 6. Most importantly, the findings of Study 6
    concerning newspaper/television cross-ownership agree with Studies 3
    and 4 on this matter. Thus, Study 6 is only an exemplary snapshot
    within the larger picture of the effect of cross-ownership on news
    production. This answers criticism (6) of the Goldstein, *et al*.
    review: while it is possible to disagree with the methods or
    conclusions of Study 6, we find that it provides part of a larger
    picture and thus is useful even accepting reasonable criticism. We
    note that the author of Study 6 acknowledges the limitations of his
    data, which is sufficient for the Gentzkow review, and, we find,
    answers criticisms (1) through (3) and (5) of the Goldstein, *et
    al*. review. Criticism (4) simply involves a judgment call on what
    to define as "local" news, and we find that Study 6 made a
    reasonable judgment that may be disputed but that is not inherently
    incorrect. For these reasons, we reject the argument by the
    Institute for Public Representation that relying on Study 6 would
    violate the Data Quality Act.  *See* Letter from Angela J. Campbell,
    Institute for Public Representation, to Marlene H. Dortch,
    Secretary, Federal Communications Commission (Nov. 29, 2007) ("IPR
    Nov. 27, 2007 *Ex Parte*").  We find that Study 6 has sufficient
    "objectivity" within the meaning of the Data Quality Act, the
    implementing guidelines issued by the Office of Management and
    Budget, and our own data quality guidelines.  *See* Section X, note
    462, *infra*.

[^148]: Media Ownership Study 6 at abstract and Tables 2-5.

[^149]: *Id*. *But* *see* Further Comments of Consumers Union, Consumer
    Federation of America, and Free Press ("CU Comments on Media
    Ownership Studies") at 78, 190, 213, etc. (questioning Study 6's
    findings on the basis that it uses unrepresentative data, overstates
    (or fails to explain) findings that might be taken to support
    newspaper/television cross-ownership, and downplays findings that
    show the much more significant negative impact of radio
    cross-ownership on television station local news). As noted above,
    we reject the complaint concerning unrepresentative data because
    Study 6 represents one piece of evidence in a larger body of
    evidence. *See* note 147, *supra*. We accept that it may not
    represent the behavior of all news outlets all the time, but it does
    provide evidence consistent with overall trends and patterns for the
    period of time that it studies. In regard to the findings that the
    author of Study 6 highlighted as opposed to other findings, every
    study performs multiple regressions and must choose preferred
    specifications. The author of Study 6 reported several
    specifications and highlighted several, and the others provide
    additional evidence. CU, for example, also presents many
    specifications, some of which supported their positions, and some
    that did not, as noted by other commenters. *See* Tribune Reply to
    Media Ownership Studies at 8-12; NAA Reply to Media Ownership
    Studies at 11-15. We also note that the Gentzkow review did not find
    the methodological choices that were made by the author of Study 6
    troubling. *See* note 147, *supra*.

[^150]: "Television Station Ownership Structure and the Quantity and
    Quality of TV Programming" by Gregory S. Crawford, Dept. of Econ.,
    Univ. of Arizona (Jul. 2007) ("Media Ownership Study 3"), *available
    at* http://www.fcc.gov/ownership/studies.html) at 4. We find that
    Study 3 is reasonably reliable because peer review revealed no
    material bias in this study. *See* Media Ownership Study 3 Peer
    Review, *available at*
    http://www.fcc.gov/mb/peer_review/peerreview.html.  The peer review
    report also notes that each of the study's findings is based on data
    derived from primetime broadcasting.  We are not troubled by this
    limitation because this represents the time period when the most
    people are watching, and is thus of the greatest interest from a
    policymaking perspective.  In addition, we find that data obtained
    during sweeps is reasonably reliable because sweeps is a formalized
    national ratings period upon which advertisers base their business
    decisions, and any potential resulting biases are likely to be small
    and unlikely to affect the basic result concerning the spread of
    advertising prices.

[^151]: "The Impact of Ownership Structure on Television Stations' News
    and Public Affairs Programming," by Daniel Shiman, FCC (Rev. Sept.
    2007) ("Media Ownership Study of 4.1"), *available at*
    http://www.fcc.gov/ownership/studies.html ("Media Ownership Study
    4.1"). The study underwent three peer reviews, one by Phillip Leslie
    ("Leslie review"), one by Philip Napoli ("Napoli review"), and one
    jointly by Kenneth Goldstein, Matthew Hale, and Martin Kaplan ("GHK
    review"). *See* Media Ownership Study 4.1 Peer Review, *available
    at* http://www.fcc.gov/mb/peer_review/peerreview.html. In his peer
    review, Leslie notes the limitations of the data, provides three
    suggestions for improvement, and expresses concern about determining
    the rationale for some of the implied conclusions of the paper. In
    his response to the peer review, Shiman implemented Leslie's
    suggestions, and found that while adjusting standard errors for
    clustering is appropriate, the other suggestions yielded inferior
    models. We note that Prof. Leslie's concerns about interpreting the
    results did not focus on the television/newspaper cross-ownership
    result, except for the general concern that local and national news
    were combined in the analysis.

    The Napoli review focused on the combination of local and national
    news and public affairs minutes in the data, and how this limits the
    analysis to news and public affairs programming *distributed* by
    television stations, and not on the programming *produced* by the
    stations. Napoli also suggests employing different variables,
    expresses concern about the potential bias to the results from
    collecting data only for "sweeps" weeks, and about relying on the
    classification of programming by TMS. We believe that his concerns
    should not affect the results concerning the impact of
    television/newspaper cross-ownership on news programming. As noted
    in the Napoli review, much of the impact of sweeps weeks is on the
    content of shows, which is not measured here, and not on the
    programming schedule.

    The GHK review focused their criticisms on the implications of the
    use of unweighted total news and public affairs minutes for policy
    analysis. They claimed that: there is no basis for using scheduled
    news programming as a metric to assess diversity, competition, or
    localism; local and non-local news should be distinguished; minutes
    should be weighted according to the number of viewers; and
    non-commercial stations should be excluded from the analysis. The
    use of the quantity of scheduled news and public affairs programming
    is well-founded in the scholarly literature (*see* the bibliography
    in Study 4.1). The study included a control variable for
    non-commercial television stations, and the study results are robust
    to weighting the data by time-of-day. Because the analysis in
    Shiman's study and response were performed using accepted
    statistical practices and were peer reviewed, we find that we can
    rely on this Study. For these reasons, we reject the argument by the
    Institute for Public Representation that relying on Study 4.1 would
    violate the Data Quality Act.  *See* IPR Nov. 29, 2007 *Ex Parte*. 
    We find that Study 4.1 has sufficient "objectivity" within the
    meaning of the Data Quality Act, the implementing guidelines issued
    by the Office of Management and Budget, and our own data quality
    guidelines.  *See infra* note 462.

[^152]: CU Comments to Media Ownership Studies at 7, 87-89.

[^153]: *Id*.

[^154]: *Id*. at 87-109, and 190-208.

[^155]: Media General Reply to Media Ownership Studies, App. A,
    Econometric Review by Dr. Furchtgott-Roth, at 10-11
    ("Furchtgott-Roth Statement").

[^156]: *Id*. at 2, 10, 11-12. *See also* NAA Reply to Media Ownership
    Studies at 6-10 and Attach. 1, Statement of Kent W. Mikkelsen,
    Senior V.P., Economists Inc. at 2-6; NAB Reply to Media Ownership
    Studies at 18 ("Given the contrary results of other studies, the
    results of Consumers Union, et al.'s recent research must be treated
    with caution and evaluated carefully, especially in light of their
    speculative underpinnings and their consistent overstatement of
    statistically insignificant results.").

[^157]: The Donald McGannon Communication Research Center ("McGannon
    Research"), Attach., "Newspaper/television Cross-Ownership and Local
    News and Public Affairs on Television Stations: An Empirical
    Analysis" by Michael Z. Yan (Oct. 2006) ("Yan Study").

[^158]: Yan Study at 2.

[^159]: NAA Reply at 29-34, Attach., Statement of Professor Jerry
    Hausman, MIT, Concerning Studies Submitted in FCC MB Docket No.
    06-121 (Jan. 16, 2007) ("Hausman Statement") at ¶¶ 3-11.

[^160]: NAA Reply at 30, Hausman Statement at ¶ 14.

[^161]: *Id*., Hausman Statement at ¶ 8.

[^162]: *See* Referee Report by Stefano Della Vigna, Univ. of Ca.
    Berkeley and Statement of Charles Romeo, *available at*
    http://www.fcc.gov/mb/peer_review/reviews.html.

[^163]: *2002 Biennial Review Order*, 18 FCC Rcd at 13775-76, 13806-07,
    ¶¶ 391, 481.

[^164]: *Prometheus*, 373 F.3d at 400-01.

[^165]: *See, e.g.,* AFL-CIO Reply at 19-21.

[^166]: CWA Comments at 4, 54.

[^167]: *2002 Biennial Review Order*, 18 FCC Rcd at 13793-94, ¶ 442*;
    see also Prometheus*, 373 F.3d at 402.

[^168]: Belo Comments at 16 (stating that its cross-owned outlets
    WFAA-TV and The Dallas Morning News historically have not
    coordinated their opinions or viewpoints); FOEF Comments at 13-14
    (stating that newspaper/broadcast combinations are more likely to
    produce more public affairs programming, and such firms are unlikely
    to present a monolithic viewpoint on any or all issues of public
    importance); Media General Comments at 34-35 (stating that its
    various news and information platforms, regardless of their method
    of disseminating content, operate separately in developing their
    content.); NAA Comments at 79-85 (providing examples of programming
    and viewpoint diversity to argue that evidence reinforces the
    Commission's prior conclusion that newspaper/broadcast combinations
    do not speak with a single coordinated voice).

[^169]: CU Comments, Study 8 at 136-47; AFL-CIO Comments at 24-26,
    28-29, 32 (stating that cross-owned media properties serve as
    cross-promotional vehicles rather than as independent editorial
    voices, citing examples in Austin, Texas and Los Angeles,
    California); AFTRA Comments at 21 (stating that media conglomerates
    impose homogeneous editorial views across commonly owned
    properties).

[^170]: *See, e.g*. paragraph 26, note 87, *supra*.

[^171]: For the same reasons as discussed in the *2002 Biennial Review
    Order*, we reaffirm that for purposes of the new rule, we will
    define a daily newspaper to include non-English dailies printed in
    the primary language of the market. The former Note 6 to the
    multiple ownership rule defined a daily newspaper as "one which is
    published four or more days per week, which is in the English
    language and which is circulated generally in the community of
    publication." 47 C.F.R. § 73.3555(c) (2002). The exclusion of
    non-English language daily newspapers in areas where the dominant
    language of the market is not English creates a discrepancy in
    treatment that must be ended. In adopting the original
    newspaper/broadcast cross-ownership rule, the Commission recognized
    that the need for diversity in Puerto Rico was the same as that
    elsewhere. Since the definition of a daily newspaper was adopted in
    1975, the percentage of households in which Spanish has spoken has
    approximately doubled. *2002 Biennial Review Order*, 18 FCC Rcd
    13799-800, ¶¶ 457-58. It is appropriate, therefore, at this point in
    time, that we apply the newspaper/broadcast cross-ownership rule to
    the non-English daily papers in markets in which the language that
    they are printed in is the dominant language of their market. Those
    whose primary language is not English deserve the same protections
    of diversity and competition as do English speakers. For
    consistency, we also are making the same modification to the
    definition of newspapers for determining voices in a market for the
    radio/television cross-ownership rule. *See* 47 C.F.R. §
    73.3555(c)(3)(iii).

[^172]: Belo 12/11/07 Comments at 2-3; Gannett 12/11/07 Comments at 3-5;
    Morris 12/11/07 Comments at 4, 6; NAA 12/11/07 Comments at 7-9;
    Bonneville 12/11/07 Comments at 4. Bonneville, Shamrock, and NAA
    specifically oppose the rule for retaining restrictions on
    newspaper/radio combinations, arguing that the record shows that
    radio is not considered to be the equal of newspapers or broadcast
    television as a source of news and information. Bonneville 12/11/07
    Comments at 7-9; NAA 12/11/07 Comments at 3; Shamrock 12/11/07
    Comments at 2.

[^173]: DMAs are determined by Nielsen Media Research.

[^174]: We will consider ratings, 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, at the time the application is filed.

[^175]: We disagree with NAA's argument that inclusion of a presumption
    in the rule runs counter to *WAIT Radio v. FCC*, 418 F.2d 1153, 1157
    (D.C. Cir. 1969).  NAA 12/11/07 Comments at 12-13, n.24.  Contrary
    to NAA's suggestion, the presumption is rebuttable and allows for
    consideration of an application for exemption based on special
    circumstances.  We also disagree with criticisms that a waiver
    standard effectively opens the door to any proposed
    newspaper/broadcast combinations.  CWA/AFTRA 12/11/07 Comments at 7;
    CU 12/11/07 Comments at 13-14; MAP 12/11/07 Comments at 4-5; UCC
    12/11/07 Comments at 10-12.  The Commission must always give a hard
    look to waiver applications -- it may never close the door
    altogether -- and arguments that the waiver threshold will be too
    low under the modified rule are entirely speculative.

[^176]: *2002 Biennial Review Order*, 18 FCC Rcd at 13645, ¶ 82 (noting
    certain benefits of bright-line rules, such as certainty of outcome,
    conservation of administrative resources, reduction of
    administrative delays, and lowering of transaction costs.).

[^177]: *Id*. at 13646, ¶ 84.

[^178]: Accordingly, we disagree with commenters who argue that a
    case-by-case approach will impose undue regulatory burdens and runs
    counter to the Commission's bright-line approach to other media
    ownership rules. *See* Belo 12/11/07 Comments at 4; CU 12/11/07
    Comments at 42-43; Gannett 12/11/07 Comments at 5; NAA 12/11/07
    Comments at 13; Morris 12/11/07 Comments at 8; News Corp./Fox
    12/11/07 Comments at i; UCC 12/11/07 Comments at 12-13. We note that
    many parties support a case-by-case approach, claiming that it
    affords the Commission the opportunity to consider challenges to
    proposed transactions would otherwise be prohibited or approved
    pursuant to bright-line rules. *See*, *e.g*., CFA/CU Petition at 41;
    FOEF Comments at 31; UCC Comments at 73-74.

[^179]: NAB 12/11/07 Comments at 11 n.20.

[^180]: CU 12/11/07 Comments at 14.

[^181]: We disagree with CU that we should use Arbitron markets rather
    than DMAs for purposes of applying the rule.  *See* CU 12/11/07
    Comments 30-31.  Although the Commission analyzed radio data at the
    level of Arbitron radio Metro markets for purposes of developing the
    Diversity Index, *see 2002 Biennial Review Order*, 18 FCC Rcd at
    13789-90, ¶ 429, we decline to reinstate the cross-media limits or
    rely on the DI here.  *See supra*, paragraph 17.  Further, as the
    Commission observed in the *2002 Biennial Review Order*, "DMAs are
    exhaustive classifications, covering the entire United States, and
    it is straightforward to count the number of television stations in
    a DMA," *id.* at 13789 ¶ 428.  Thus, use of DMAs facilitates
    application of the major media voices test, which for the reasons
    discussed below focuses exclusively on newspapers and television
    stations.  In addition, television stations are generally seen
    throughout a DMA because of mandatory carriage requirements. *See*
    47 C.F.R. § 76.56 (Cable) and § 76.66 (DBS).

[^182]: Information on television stations, radio stations, and
    newspapers is from BIA's Media Access Pro Database. We note that we
    are not able to make any adjustments for radio/television
    cross-ownership in any market.

[^183]: Major newspapers are newspapers that are published at least four
    days a week within the DMA and have a circulation exceeding 5
    percent of the households in the DMA. *See* 47 C.F.R. §
    73.3555(c)(3)(iii). We disagree that the rule is inconsistent
    because it limits combinations of daily newspapers and broadcast
    stations but counts major newspapers towards the major media voices
    requirement. *See* Tribune 12/11/07 Comments. As explained above, we
    are proceeding cautiously by relaxing the existing ban on
    cross-ownership of a daily newspaper and broadcast station only in
    the largest markets with the greatest levels of viewpoint diversity.
    Counting as major media voices only those outlets that consumers
    rely upon most as sources of local news and information will ensure
    that we do not presume that sufficient diversity of major local news
    sources will remain in a top 20 market if such a presumption is not
    warranted.

[^184]: Media Ownership Study 1 at 90.

[^185]: *Id.* at 91.

[^186]: AFL-CIO Reply at 9-11.

[^187]: CU Comments, Attach., Study 7 at 128-33 and Study 8 at 134-47.
    CU's Study 7 found that, by far, newspapers and broadcast television
    are the most frequent and most important source of news and
    information followed by weekly newspapers and radio. According to
    the Study, 54 percent of the respondents most often use daily
    newspapers and television for local news, and 53 percent consider
    daily newspapers and television to be the most important source of
    local news. An additional 33 percent of the respondents answered
    that they most often use weekly newspapers and radio for local news,
    while 31 percent consider weekly newspapers and radio to be the most
    important source of local news. Therefore, according to the Study,
    at least 84 percent of the respondents look to traditional media for
    local news. CU's Study 8 finds that among the 11 percent of
    respondents who say that the Internet is their first or second most
    frequent source of news, the websites of local television and daily
    newspapers account for 51 percent of the primary sites they visit
    most frequently. The peer review for CU's Study 7 raises issues
    regarding the breadth of the Study's conclusions, but the review
    does not undermine its basic conclusions. *See* CU Study 7 Peer
    Review, Steve Wildman, Michigan State University, *available at*
    http://www.fcc.gov/mb/peer_review/reviews.html. Specifically, the
    peer review concludes that CU's Study 7 is overly broad in its
    rejection of the Nielsen Survey that it was intended to correct.
    Nonetheless, the peer review finds that CU's Study 7 provides
    valuable evidence for the Commission, specifically the fact that
    CU's Study 7 shows that the majority of Internet sites that
    consumers use for news are owned by the same major news
    organizations that own traditional broadcast media. As such, we use
    as evidence of the fundamental points that consumers continue to
    rely primarily on traditional media sources for their local news and
    that they use newer media sources as supplemental. Similarly, the
    peer review for CU's Study 8 raises questions concerning the
    phrasing and ordering of survey questions, and concerning the
    aggregation of survey responses. *See* CU Study 8 Peer Review,
    *available at* http://www.fcc.gov/mb/peer_review/reviews.html. The
    reviewer concludes that these concerns may raise questions
    concerning the conclusions of the Study. We note these concerns, and
    accept that the precision of the survey may have been reduced due to
    these problems, but we do not reject CU Study 8 in its entirety.
    Rather, we treat it as another piece of evidence that newer sources
    of information, including news web sites and blogs, are lesser
    sources of information for consumers compared to traditional sources
    of information. Because this study agrees fundamentally with other
    evidence in the record, we find that the problems raised in the peer
    review may reduce its precision but they do not completely undermine
    its results.

[^188]: We acknowledge that some concerns have been raised in regard to
    the Nielsen Survey, Media Ownership Study 1, such as the nature of
    the questions and the response rate. *See, e.g.,* Media Ownership
    Study 1 Peer Review, *available at*
    http://www.fcc.gov/mb/peer_review/peerreview.html; CU Comments to
    the Media Ownership Studies at 8-9 and 110-23 (highlighting, for
    example, that broadcast television or newspapers are the first or
    second most important source of news for 86 percent of respondents,
    whereas all other forms of media are first or second most important
    for only 14 percent of respondents); Media General Reply to the
    Media Ownership Studies at 12-24 (criticizing the study, but
    emphasizing that non-traditional outlets are important sources of
    news and should be counted as "voices"); NAA Comments to the Media
    Ownership Studies at 4-8 and Reply at 15-21 (stating that newspapers
    and television are still important sources of news but that Internet
    and other "emerging" sources are growing quickly). Nonetheless, we
    are not aware of figures showing the contrary. In fact, the peer
    review of the Nielsen Survey, Media Ownership Study 1, suggested a
    Pew Internet & American Life Project Study as an alternative source;
    the Pew Study has different percentages, but substantially the same
    results: 59 percent of respondents got news "yesterday" from local
    television, 38 percent from a local paper, but only 23 percent from
    the Internet. Pew Internet & American Life Project, "Online News:
    For Many Home Broadband Users, the Internet is a Primary News
    Source" (Mar. 22, 2006).

[^189]: *2002 Biennial Review Order*, 18 FCC Rcd at 13765, ¶ 365.

[^190]: Belo Comments at 14-15; Cox Comments at 17-18; NAA Comments at
    40-41; Media General Reply at 6, 12-14.

[^191]: AFL-CIO Comments at 15; UCC Comments at 70.

[^192]: *Prometheus*, 373 F.3d at 404-05.

[^193]: *Id*. at 405-06.

[^194]: AFL-CIO Comments at 15; *see also* AFTRA Comments at 11-13.

[^195]: CU Comments at 10-12, Attach., Study 8 at 136-47.

[^196]: Belo Comments at 11-13.

[^197]: While UCC objects that the "major voices" test and the top four
    restriction do not apply to newspaper/radio combinations, *see* UCC
    12/11/07 Comments at 15, more stringent protections are appropriate
    for newspaper/television combinations than newspaper/radio
    combinations in light of the fact, discussed above, that television
    stations are more important sources of local news for consumers.

[^198]: *See, e.g*., *Review of the Commission's Regulations Governing
    Television Broadcasting*, Report & Order, MM Docket No. 91-221, 14
    FCC Rcd 12903, 12933-36, ¶¶ 64-70 (1999) ("*Local TV Ownership
    Report and Order*"); *clarified in* Memorandum Opinion & Second
    Order on Reconsideration, 16 FCC Rcd 1067 (2001).

[^199]: In light of the characteristics of the top 20 markets and the
    adoption of the top four restriction, we reject CU's arguments,
    *see* CU 12/11/07 Comments at 24, that the voice count test used to
    determine the applicability of the presumption should take into
    account market share or be dependent on the level of local news
    programming aired by a commercial television station. Nevertheless,
    the Commission would appropriately look at such information in
    performing its case-by-case review of a proposed combination,
    particularly under the "concentration" factor discussed *infra*.

[^200]: Accordingly, we disagree with Media General's argument that the
    rule's eight independent voice component is inconsistent with the
    D.C. Circuit's decision in *Sinclair*, 284 F.3d at 164. *See* Media
    General 12/11/07 Comments at 14. *Sinclair* stands for the
    proposition that the Commission must provide a rational explanation
    for using different voice count tests for the purposes of different
    media ownership rules, not that the Commission is bound to employ
    the same test regardless of the goals it seeks to achieve.

[^201]: Evidence showed that there is a significant drop in Nielsen
    ratings between the fourth and fifth stations in a market, which
    indicates a significant difference in viewership and hence influence
    in the respective local markets. *Prometheus*, 373 F.3d at 416.

[^202]: Without submitting the relevant data, MAP asserts that nearly
    half of the television stations owned by people of color are in the
    top 20 markets and that none is rated among the top four in its
    market. Thus, MAP argues that those stations will be acquisition
    targets and the rule will have a negative impact on minority
    ownership. *See* MAP 12/11/07 Comments at 5-6. We note that our rule
    revisions will not force any owner to sell his or her station.
    Further, although we believe that it is appropriate to adopt
    measures to encourage minority ownership, as we do in the *Diversity
    Order* that we adopt today, we do not think it is appropriate to
    deny minority owners the opportunity to sell their stations in
    accordance with otherwise applicable Commission rules, *see* note 7,
    *supra*.

[^203]: NAA supports cross-ownership of newspapers and top four stations
    because it claims it is precisely those stations that are most
    capable of sustaining full-scale news operations. NAA 12/11/07
    Comments at 2, 10; *see also* CU 12/11/07 Comments at 20-23; Gannett
    12/11/07 Comments at 6; Media General 12/11/07 Comments at 18-20;
    News Corp./Fox 12/11/07 Comments at 10-11. NAA also opposes the
    cross-ownership rule because it is considerably more limiting than
    any of the other existing local broadcast ownership rules. NAA
    12/11/07 Comments at 2, 9-10.

[^204]: Staff analysis of television schedule data from TMS for May
    12-18 and November 10-16, 2005.

[^205]: *Id*. *See also* CU 12/11/07 Comments at 22 (indicating that top
    four stations are far more likely than non-top four stations to
    provide local news).

[^206]: Despite the fact that radio stations generally have less of an
    impact on local diversity than television stations, we disagree with
    commenters who argue that the retention of any limits on
    newspaper/radio cross-ownership is not justified. *See* Bonneville
    12/11/07 Comments at 1-2, 7-9, 10; Morris 12/11/07 Comments at 4-5;
    Shamrock 12/11/07 Comments at 1-2. The combination of a daily
    newspaper with one or more radio stations may have significant
    negative implications for the range of viewpoints available in a
    local market. Our action will allow licensees to realize the
    benefits of newspaper/radio cross-ownership in the largest markets,
    *see, e.g.,* Bonneville 12/11 Comments 8, n.18 (citing evidence that
    cross-owned radio stations are more likely to adopt a news format),
    while fostering viewpoint diversity in small and medium markets
    where such combinations pose a greater risk to viewpoint diversity.
    We also disagree that the newspaper/broadcast cross-ownership rule's
    numerical limit of one newspaper and one broadcast station is
    inconsistent with the radio/television cross-ownership rule's higher
    numerical limits. *See* Tribune 12/11/07 Comments at 8. The
    Commission traditionally has been more cautious in allowing
    newspaper/broadcast combinations than in allowing broadcast-only
    combinations due to the unique attributes of newspapers. Moreover,
    as discussed above, given the long history of the
    newspaper/broadcast cross-ownership rule, we conclude that it is
    appropriate to proceed cautiously in relaxing it.

[^207]: The Commission has previously explained that its cross-ownership
    and multiple ownership rules encourage "outlet" and "source"
    diversity as indirect means to achieve viewpoint diversity. *See
    2002 Biennial Review Order,* 18 FCC Rcd at 13629-30, 13632 ¶¶ 26-27,
    30, 38-39; *see also Review of the Commission's Regulations
    Governing Television Broadcast; Television Satellite Stations Review
    of Policy and Rules,* Further Notice of Proposed Rule Making, MM
    Docket Nos. 99-221 and 87-8, 10 FCC Rcd 3524, 3549-50 (1995).
    "Outlet" diversity refers to "a variety of delivery services
    (*e.g.,* broadcast stations) that select and present programming
    directly to the public"; "source" diversity refers to "a variety of
    program producers and owners." *Id.*

[^208]: The Commission stated that "\[t\]he multiple ownership rules,"
    such as the newspaper/broadcast cross-ownership rule, "rest on two
    foundations: the twin goals of diversity of viewpoints and economic
    competition." *1975 Second Report & Order*, 50 FCC 2d at 1074.
    Ensuring that the public has access to a diversity of viewpoints
    promotes First Amendment values.

[^209]: *See* paragraph 57 & note 187, *supra.* Consumers still rely
    predominantly on newspapers and television for public affairs. *Id.*
    At the Commission's media ownership hearing in Nashville, Alex
    Jones, co-owner of *The Greenville Sun,* Greenville, Tennessee,
    explained that the vast majority of "accountability news," *i.e.*,
    the news of politics, policy, public affairs, business, the news
    that is considered essential to democracy, comes from the newspaper
    and local television. Jones maintains that the reported news that
    comes from these entities is the news of verification as opposed to
    the "talk that has now gotten confused with real news." Jones
    contends that it is talk, not news, which is in extraordinary
    abundance. Jones is the Director of the Joan Shorenstein Center on
    the Press, Politics and Public Policy at Harvard University's
    Kennedy School of Government. Testimony of Alex Jones, Media
    Ownership Hearing, Nashville, Tennessee, Dec. 11, 2006.

[^210]: We therefore do not agree with commenters who urge repeal of the
    ban, particularly in small markets, due to the unique plight of
    broadcasters in these markets to retain increasingly costly news
    operations. *See, e.g.,* Media General Comments at 7-13; Shamrock
    12/11/07 Comments at 1-2; NAB Comments at 116-20.

[^211]: The policies we adopt herein incorporate the suggestions of
    commenters who, although opposed to a lifting of the ban on
    newspaper/broadcast cross-ownership, propose that any modification
    of the rule include criteria to determine whether cross-ownership
    would presumptively serve the public interest. *See, e.g.,* UCC
    Comments at 73-74.

[^212]: As with all applications seeking transfer of control or
    assignment of a broadcast license or authorization, any party may
    file a petition to deny any license transfer or assignment. 47
    U.S.C. § 309(d).

[^213]: *Local TV Ownership Report and Order*, 14 FCC Rcd at 12938-40,
    ¶¶ 79-81.

[^214]: *See, e.g.*, *1975 Second Report & Order*, 50 FCC 2d at 1085, ¶
    119 (The Commission established the following waiver standards when
    it adopted the cross-ownership rule, anticipating that requests
    would be filed. Applicants would have to show (1) an inability to
    sell the station, (2) that the only sale possible would be at an
    artificially depressed price, (3) that separate ownership and
    operation of the newspaper and the broadcast station could not be
    supported in the locality, or (4) the purposes of the rule would be
    disserved by its application); *Newspaper/Radio Cross-Ownership
    Waiver Policy*, MM Docket No. 96-197, Notice of Inquiry, 11 FCC Rcd
    13003 (1996) (The Commission considered modifying waiver criteria
    for cross-ownership rule); *Voice of the Caverns, Inc*., 4 FCC 2d
    946 (1966) (The Commission granted dual ownership of a satellite
    television station and VHF station when previous three owners were
    unable to maintain operations due to financial hardship); *Multiple
    Ownership Report and Order*, 29 Fed. Red. 7535, 7539 (1964)
    (adopting Note 4 to 47 C.F.R. § 73.636(a)(1), which creates an
    exemption to the television duopoly rule for satellite stations
    because of special financial hardship considerations); *Amendment of
    Sections 73.35, 73.240 and 73.636 of the Commission Rules Relating
    to Multiple Ownership of Standard, FM and Television Broadcast
    Stations*, Docket No. 18110, First Report & Order, 22 FCC 2d 306
    (1970) (The Commission grandfathered existing AM-FM combinations
    when it amended the multiple ownership rules "where a showing was
    made that establishes the interdependence of the stations and the
    impracticability of selling and operating them as separate
    stations).

[^215]: *See Local TV Ownership Report and Order*, 14 FCC Rcd at 12937,
    ¶ 75.

[^216]: The applicant will be required to show that the tangible and
    verifiable public interest benefits of the combination outweigh any
    harms. At the end of the station's license term, the owner of the
    combined entities must certify to the Commission that the public
    interest benefits of the combination are being fulfilled, including
    a specific, factual showing of the program-related benefits that
    have accrued to the public. Cost savings or other efficiencies,
    standing alone, will not constitute a sufficient showing. *See id*
    at 12939, ¶ 81.

[^217]: As with the showing required of failed station waiver applicants
    under the local television rule, one way to satisfy this fourth
    criterion will be to provide an affidavit from an independent broker
    affirming that active and serious efforts have been made to sell the
    station, and that no reasonable offer from an entity outside the
    market has been received. *See id* at 12938, ¶ 76.

[^218]: *Id.* at 12938-39, ¶ 79.

[^219]: *See* *Fox Television Stations, Inc*., 8 FCC Rcd 5341 (1993),
    *aff'd sub nom*. *Metropolitan Council of NAACP Branches v. FCC*, 46
    F.3d 1154 (D.C. Cir. 1995).

[^220]: Because radio is generally a less influential voice than
    television, proposed newspaper/radio combinations will not face as
    high a hurdle. Similarly, combinations involving non-major
    newspapers (*i.e*., those with a circulation of fewer than 5 percent
    of the households in the DMA) will not face as high a hurdle as
    those involving major newspapers.

[^221]: We disagree with arguments that the four factors are too vague. 
    *See generally* Media General 12/11/07 Comments; UCC 12/11/07
    Comments.  Each of the factors is discussed in detail below.  The
    Commission's application of the factors to particular cases will
    provide further guidance to interested parties over time.

[^222]: CU argues that the newspaper/broadcast cross-ownership rule is
    flawed because the factors (no top four station and eight
    independent major media voices) that must be present in the top 20
    markets to give rise to the presumption that a combination of a
    newspaper and a television station is not inconsistent with the
    public interest do not apply in the smaller markets. *See* CU
    12/11/07 Comments at 13-14. Thus, they argue that the smaller
    markets, which are the most vulnerable, are the least protected
    under the rule. *Id*. These commenters misapprehend how the rule
    will function. The factors referred to by these commenters must be
    present before we will presume that a newspaper/television station
    combination is not inconsistent with the public interest. In the
    smaller markets, all such combinations are presumed to be
    inconsistent with the public interest, so it is not necessary to
    list those factors. Moreover, in considering whether an applicant
    has presented adequate evidence to overcome the adverse presumption
    in a smaller market, one of the factors that the Commission will
    consider is the level of concentration in the DMA. In considering
    this factor, the Commission will certainly take into account whether
    the television station that the applicant seeks to co-own is a top
    four station and the number of independently owned media voices in
    the market. Thus, contrary to CU's argument, the smaller markets
    will have greater, not lesser, protection under the rule.

[^223]: Belo Comments at 13-14.

[^224]: *Id.* at 15. Belo added that it aired the debate on each of its
    Dallas and other Texas-based platforms, on DallasNews.com, the host
    television stations' associated websites, and Texas Cable News
    ("TXCN"), its 24-hour regional cable news network.

[^225]: Media General Comments at 8-10.

[^226]: *Id.* at 10-12.

[^227]: Statement of FCC Chairman Kevin Martin, Public Hearing on
    Localism, Washington, D.C. (Oct. 31, 2007).

[^228]: *2002 Biennial Review Order*, 18 FCC Rcd at 13643, ¶ 74.

[^229]: *See* paragraph 62, *supra*.

[^230]: *1975 Second Report & Order*, 50 FCC 2d at 1079-80, ¶ 111.

[^231]: Belo Comments at 17.

[^232]: *Cf.* CWA Comments at 4-5 (proposing application of public
    interest factor to cross-ownership proposals modeled after the
    Newspaper Preservation Act, an antitrust exemption which allows
    common ownership and joint operation of two newspapers under certain
    circumstances but requires that there shall be no combination of
    editorial or reportorial staffs and that editorial policies be
    independently determined) (citing 15 U.S.C. § 1801-1804).

[^233]: We stress that this factor is content neutral. In assessing
    editorial independence, the Commission will review the structure and
    operation of cross-owned newspapers and broadcast stations as it
    relates to news dissemination, not what stories are covered,
    programs are aired or articles are written.

[^234]: CWA Comments at 4; AFL-CIO Reply at 41-42; Hubbard 12/11/07
    Comments at 1-2; CWA/AFTRA 12/11/07 Comments at 4-5; Koplar
    12/11/2007 Comments at 2-3.

[^235]: CWA Comments at 4, 54-55.

[^236]: *Id.*

[^237]: Commenters indicate that larger, more consolidated media
    entities draw advertisers from smaller, independently owned media
    outlets. Because the economic model for these outlets continues to
    be primarily an ad-supported model, when advertisers shift to
    entities that can offer numerous platforms for their ads and a more
    flexible pricing structure, commenters argue that smaller outlets
    cannot compete, often relinquishing ownership of their facilities to
    larger media concerns, thus, reducing competition and viewpoint
    diversity in local markets. Alex Jones contends that relaxing
    cross-ownership would inevitably create a link between the local
    newspaper and one, or even more, of a town's handful of radio and
    television stations, thereby creating a combination that would dwarf
    all other news organizations. Testimony of Alex Jones, Media
    Ownership Hearing, Nashville, Tennessee, Dec. 11, 2006.

[^238]: *See* paragraph 57 & note 187, *supra* (discussing studies
    indicating that Americans rely on newspapers and television more
    than radio for local news and information).

[^239]: *Cf.*, *Field Communications*, 65 FCC 2d 959 (1977) (Commission
    granted a permanent waiver of the newspaper/broadcast
    cross-ownership rule primarily due to the history of financial
    losses suffered by the television station in the proposed
    transaction).

[^240]: Sarah Ellison, *Ad Woes Worsen at Big Newspapers*, [Wall St.
    J.,]{.smallcaps} Oct. 20, 2006, at B4; Sarah Ellison, *Tribune to
    Consider Radical Action*, [Wall St. J.,]{.smallcaps} Sept. 21, 2006,
    at A3. *See also supra* para. 32. In October 2007, Belo Corporation
    announced that it would spin off its newspaper assets to
    shareholders, thus separating those assets from Belo's television
    stations. Following the spin-off, Belo would hold licenses for 20
    television stations in 15 markets, reaching 14 percent of U.S.
    households and generating \$750 million in annual revenue. The
    newspaper entity, A.H. Belo, will hold newspaper and related online
    assets, including *The Dallas Morning News* and *The Providence
    Journal.* Those assets reach 3.7 million people and generate \$750
    million in annual revenue. Jon Hemingway, Belo Spin Off TV and
    Newspaper Assets, [Broad. & Cable,]{.smallcaps} Oct. 1, 2007,
    *available at* http://www.broadcasting
    cable.com/article/CA6485750.html?industryid+47171&q+A%2EH%2E+Belo
    (visited Dec. 21, 2007).

[^241]: NAB Comments at 116; *see also* Gannett Comments at 21-25
    (discussing cuts to the newsroom functions at newspapers based on
    financial pressures). Gannett states that newspaper circulation
    declined at a rate of one percent each year between 1990 and 2004.
    *Id.* at 21 n.75 (citing PEW Charitable Trusts, *State of the News
    Media Fact Sheets: Newspapers* (Mar. 2004)).

[^242]: Belo Comments at 18; Tribune Comments at 33-34; Media General
    Comments at 63. In addition, Media General states that new digital
    services and sources are having an impact on broadcast television.
    It references NBC Universal's recent announcement that it plans to
    reduce its workforce by 5 percent and provide lower cost, unscripted
    programming in the first hour of prime time in order to cut \$750
    million from its budget. Media General notes other industry
    announcements regarding restructuring or sales transactions,
    including those of CBS to sell its small-growth radio stations;
    Clear Channel's plans to sell its smaller market radio stations;
    *The* *New York Times*' intention to sell its television stations;
    and LIN TV's agreement to sell its Puerto Rican assets and take
    steps to reduce the number of staff needed to put live newscasts on
    the air. *Id*. at 65. Media General states that repeal of the 1975
    rule would help to reverse some of this negative trend by freeing
    newspaper owners and broadcasters to enter into ownership
    arrangements that would eliminate overlapping costs, while putting
    these savings into local news production to bring quality local news
    and information to the largest possible audiences in the market.
    Media General Comments at 65-66; *see also* NAA Comments at 41-43
    (indicating that a natural corollary of the increasing fragmentation
    in the news and information marketplace has been a decline in the
    prominence and economic performance of local daily newspapers and
    broadcast outlets, and no improvement is expected in 2006). NAA
    states that "\[w\]hile newspaper circulation has been declining at a
    rate of one percent each year since 1990, these losses accelerated
    in 2005.... \[when\] \[c\]irculation went down 2.6 percent for daily
    newspapers and 3.1 percent for Sunday newspapers." NAA describes how
    "\[a\]dvertising revenue...also has taken a substantial hit" and how
    analysts have been lowering their revenue predictions for the
    newspaper industry. *Id.* at 42-43.

[^243]: AFL-CIO asserts, for example, that increased concentration puts
    pressure on media firms to lower costs by decreasing local news
    coverage, and identifies in its comments the budget and job cuts
    that result from reductions in local coverage. AFL-CIO states that
    cross-owned media properties serve as a "'cross-promotional vehicle
    rather than as an independent editorial voice.'" AFL-CIO Comments at
    23-27.

[^244]: *See, e.g.,* Gannett Comments at 21-25.

[^245]: We authorize the Media Bureau to modify the necessary FCC filing
    forms in order to implement the changes we adopt herein. *See*,
    *e.g*., FCC Forms 314, 315, and 316.

[^246]: *1975 Second Report & Order*, 50 FCC 2d at 1080-84, ¶¶ 112-17.

[^247]: There are three such waivers: one involving the *New York Post*
    and WNYW-TV; one involving the *Chicago Tribune*, WGN-TV, and
    WGN(AM); and one involving WSCG-AM and *The Daily News* in
    Greenville, Michigan.

[^248]: Several commenters express concern about the status of those
    waivers and suggest resolutions, including (1) granting permanent
    waivers or grandfathered status to existing newspaper/broadcast
    combinations that were created pursuant to "footnote 25" of the 1975
    decision adopting the ban or have been granted temporary or
    conditional waivers of the restriction, or (2) adding a new note to
    § 73.3555 that would indicate that the new newspaper/broadcast
    cross-ownership rule would not apply to the cross-ownership of a
    broadcast station and a daily newspaper for which the Commission has
    previously granted a permanent waiver of any rule that would have
    otherwise prohibited such cross-ownership. Tribune 12/11/07 Comments
    at 10-11; News Corp./Fox 12/11/07 Comments at 12. In addition, Media
    General asserts that any divestitures that might result from the
    Commission's proposal could violate First and Fifth Amendment
    rights. Media General 12/11/07 Comments at 17. Tribune notes that
    forcing divestiture would potentially harm the public, company
    employees, and the combined operations of broadcast stations and
    newspapers. Tribune 12/11/07 Comments at 11.

[^249]: *1975 Second Report & Order*, 50 FCC 2d at 1078, ¶ 109.

[^250]: Tribune 12/11/07 Comments at 11.

[^251]: For example, Media General has submitted extensive evidence
    demonstrating how, during the past seven to nine years, it has
    integrated the operations of the media outlets in these DMAs to
    expand the volume of local news and information communicated to
    local residents and to improve the quality of their offerings. Media
    General Comments at 13-22. *See also id.* at App. 4A, Exhs. B-F
    (Statement of Professor Adam Clayton Powell, III, reviewing local
    convergence benefits in each of the four markets).

[^252]: Gannett Co., Inc. has owned KPNX-TV, Phoenix, Arizona and *The
    Arizona Republic* since 2000. Gannett has submitted evidence
    demonstrating how, during the past seven years, it has integrated
    the operations of the two media outlets to expand the volume of
    local news and information communicated to Phoenix residents and to
    improve the quality of its offerings. *See, e.g.,* Gannett Comments
    at 26-29. For example, combined efficiencies have enabled KPNX-TV to
    expand its local programming. *Id.* at 27. New programs include a
    weekday 4:30 p.m. newscast, a weekly travel and tourism program
    titled "Arizona Highways," and a daily news broadcast in Spanish on
    "12 News En Español" on KPNX-TV's Separate Audio Program ("SAP")
    channel. *Id.* at 26-27.

[^253]: In the Myrtle Beach-Florence, South Carolina DMA, Media General
    has owned television station WBTW(TV), which is licensed to
    Florence, South Carolina, and the *Morning News*, which is published
    in Florence, since 2000, and its waiver request has been pending for
    over three years. Media General reports that WBTW(TV) has found
    access to the archives of the *Morning News* to be crucial to
    ongoing coverage of news in the area and to the development of
    special and investigative reports, enabling WBTW(TV) to provide
    greater depth and expand its coverage of major events and issues in
    the DMA. Media General Comments at 15-16. Media General provides
    examples of the news staffs of WBTW(TV) and the *Morning News*
    collaborating on recurring features and series "that, because of
    convergence, are more informative and achieve wider distribution
    throughout the DMA." *Id*. at 16-18.

[^254]: In the Columbus, Georgia DMA, Media General has owned television
    station WRBL(TV), which is licensed to Columbus, and the
    *Opelika-Auburn News*, which is published in Opelika, Alabama, since
    2000, and its waiver request has been pending for three years. A
    WRBL(TV) reporter is permanently assigned to the station's Opelika
    bureau, which is housed in the newspaper's building. From this
    facility, WRBL(TV), which does not operate a satellite truck, has
    the capability of transmitting live video for broadcast on WRBL(TV),
    which has enabled the station to broadcast improved coverage of
    breaking news and other events occurring in the western portion of
    its DMA. *Id*. at 18.

[^255]: In Panama City, Florida, Media General has owned television
    station WMBB(TV) in Panama City, and the *Jackson County Floridan*,
    which is published in Marianna, Florida, since 2000, and its waiver
    request has been pending for over three years. During that time,
    Media General states that these outlets have worked effectively
    together to increase the coverage of local news in the DMA, offering
    examples of the two media outlets' hurricane coverage, political
    forums, and investigative reporting. *Id*. at 19-22.

[^256]: In the Tri-Cities DMA, Media General has owned television
    station WJHL-TV, which is licensed to Johnson City, Tennessee, and
    the *Bristol* (*Virginia Tennessee) Herald Courier*, which is
    published in Bristol, a city that straddles the state border, since
    1998, and its waiver request has been pending for over
    two-and-a-half years. Since 2000, WJHL-TV has added 90 minutes of
    additional local news coverage every weekday, which has enabled it
    to greatly expand its political coverage and broadcast numerous
    special reports and regularly televised series that would not be
    possible without access and input from the newspaper's staff. *Id*.
    at 13-15.

[^257]: We are aware of the following waiver/renewal applicants with
    existing combinations that fall into this category: Cox Enterprises,
    Inc. (Atlanta, Georgia, and Dayton, Ohio DMAs); Tribune-Review
    Publishing Co. (Pittsburgh, Pennsylvania DMA); Bonneville
    International Corp. (Salt Lake City, Utah DMA); and Scranton Times
    Ltd. Partnership (Wilkes Barre-Scranton, Pennsylvania DMA).

[^258]: Morris falls into this category with regard to its
    newspaper/broadcast combinations in the Amarillo, Texas, and Topeka,
    Kansas, DMAs. *See* Morris Comments at 13-21.

[^259]: 47 C.F.R. § 73.3555(c) (2002); *2002 Biennial Review Order*, 18
    FCC Rcd at 13767-68, ¶ 370. The current rule allows a party to own
    up to two television stations (provided it is permitted under the
    local television ownership rule to do so) and up to six radio
    stations (to the extent permitted under the local radio ownership
    rule) in a market where at least 20 independently owned media
    "voices" would remain post-merger. In markets where parties may own
    a combination of two television stations and six radio stations, the
    rule allows a party alternatively to own one television station and
    seven radio stations. A party may own up to two television stations
    (as permitted under the current local television ownership rule) and
    up to four radio stations (as permitted under the local radio
    ownership rule) in markets where, post-merger, at least 10
    independently owned media voices would remain. A combination of two
    television stations (as permitted under the local television
    ownership rule) and one radio station is allowed regardless of the
    number of voices remaining in the market. *Local TV Ownership Report
    and Order*, 14 FCC Rcd at 12947, ¶ 100. For purposes of applying the
    radio/television cross-ownership rules the Commission counts (1) all
    independently owned and operating full-power commercial and
    noncommercial broadcast television stations licensed to a community
    in the DMA in which the community of license of the television
    station in question is located; (2) all independently owned and
    operating commercial and noncommercial 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; (3) all independently owned daily newspapers that are
    published in the DMA at issue and that have a circulation exceeding
    5 percent of the households in the DMA; and (4) cable systems, which
    count as a single voice, provided cable service is generally
    available to television households in the DMA. *See* *id.* at
    12950-52, ¶ 111. The voice test counts more voices than the revised
    newspaper/broadcast cross-ownership rule or current local television
    ownership rule. The local television ownership rule counts only
    broadcast television stations as voices because the local television
    ownership rule is designed to preserve competition in the local
    television market. The radio/television cross-ownership rule, by
    contrast, is designed to protect viewpoint diversity and thus takes
    into account a broader range of voices than does the local
    television rule. Furthermore, we count more voices in the
    radio/television cross-ownership rule than in the
    newspaper/broadcast cross-ownership rule because newspapers and
    television station combinations involve the two most important types
    of sources for news and information. *See* CU Comments at 124
    ("newspapers and television are far and away the most important
    sources \[of local news\]"). It is thus appropriate that the
    relevant voices test applied to such combinations includes major
    voices in order to ensure that diversity in the market is
    safeguarded. The radio/television cross-ownership rule, however,
    involves combinations that include radio stations, and the record
    reflects that radio is a significantly less important source of news
    and information than newspapers or television. As a result, we
    consider additional sources of viewpoint diversity that are less
    significant than newspapers and television stations within the
    context of this rule. Moreover, given that the rule involves
    radio/television combinations, we find it appropriate to also count
    radio stations for its purposes. In this regard, we note that the
    revised newspaper/broadcast cross-ownership rule's voices test
    applies to proposed newspaper/television combinations only, not to
    newspaper/radio combinations.

[^260]: *Local TV Ownership Report and Order*, 14 FCC Rcd at 12943-44, ¶
    92.

[^261]: *Id.* at 12948, ¶ 102.

[^262]: *Id*. at 12948, ¶ 104.

[^263]: *2002 Biennial Review Order*, 18 FCC Rcd at 13768, ¶ 371.

[^264]: *Id.* at 13768, ¶ 371. *See id*. at 13775, ¶ 389 (explaining
    that the radio/television cross-ownership rule was made "unnecessary
    and anachronistic" by the Commission's adoption of cross-media
    limits).

[^265]: *Id*. at 13775, ¶ 389, *et seq*. *See generally id*. at
    13790-807, ¶¶ 432-81.

[^266]: 373 F.3d at 397.

[^267]: *Id.*

[^268]: 47 C.F.R. § 73.3555(c) (2002).

[^269]: 18 FCC Rcd at 13774-75, ¶ 389.

[^270]: CBS observes that the radio/television cross-ownership rule "was
    uncontested on appeal"; it therefore contends that the rule "is
    therefore not subject to review on remand." CBS Reply at 15. As we
    have explained, however, because the Commission eliminated the
    radio/television cross-ownership limits based on its adoption of the
    protections provided by the cross-media limits, the *Prometheus*
    court's vacatur of the Commission's cross-media limits necessarily
    revived the issue of those limits on remand. In any event, the
    Commission is under a continuing and independent obligation under
    Section 202(h) of the 1996 Act to determine quadrennially whether
    its ownership rules remain "necessary in the public interest as a
    result of competition." *See* 1996 Act, § 202(h).

[^271]: *2002 Biennial Review Order*, 18 FCC Rcd at 13774, ¶ 389. Clear
    Channel's comment that "the FCC found \[in the *2002 Biennial Review
    Order*\] that diversity is not a justifiable reason to support a
    radio/television cross-ownership rule" is in error. Clear Channel
    Comments at 84. The Commission only found its radio/television
    cross-ownership rule was not necessary to ensure viewpoint diversity
    because it was adopting "modified service-specific local ownership
    rules" and a "new cross-media limit rule" to "protect diversity of
    viewpoint in those markets in which \[it\] believe\[d\]
    consolidation of media ownership could jeopardize such diversity."
    *2002 Biennial Review Order*, 18 FCC Rcd at 13774-75, ¶ 389.

[^272]: *See* AFTRA Comments at 22-23; UCC Comments at 74-76; and
    Prometheus Reply at 42-44. *See also* Remarks by John Carlson, Radio
    Talk Show Host, KVI-AM, Media Ownership Hearing in Seattle,
    Washington (Nov. 9, 2007), Transcript at 86; Remarks of Karen Bond,
    Executive Director, National Black Coalition for Media Justice,
    Media Ownership Hearing in Chicago, Illinois (Sept. 20, 2007),
    Transcript at 79 (generally advocating against further media
    consolidation).

[^273]: AFTRA Comments at 13.

[^274]: *See id*. at 22-23.

[^275]: *See* CBS Reply at 18-19 (radio/television cross-ownership
    "allows both stations to go live in breaking news situations when
    just one outlet has a reporter on the scene"). *See also* Remarks by
    Elizabeth B. Hindman, Associate Professor, Edward R. Murrow School
    of Communication at Washington State University, Media Ownership
    Hearing in Seattle, Washington (Nov. 9, 2007), Transcript at 110
    (advocating tightening of radio/television cross- ownership rules)
    *and* Remarks by George Jones, Member, American Federation of
    Television and Radio Artists, Media Ownership Hearing in Nashville,
    Tennessee (Dec. 11, 2006) (opposing radio and television ownership
    consolidation). For the same reasons, we reject UCC's contention
    that we should ban radio/television cross-ownership entirely. UCC
    Comments at 76. Such a step would even more clearly foreclose the
    opportunity for "broadcasters and the public to realize the benefits
    of radio-television common ownership." *Local TV Ownership Report
    and Order*, 14 FCC Rcd at 12948, ¶ 102; *see also* Remarks by Joe
    Lewin, President and General Manager WHTM, Media Ownership Hearing
    in Harrisburg, Pennsylvania (Feb. 23, 2007), Transcript at 54-56
    (broadcasters face many challenges and benefit from consolidation).
    We also believe that neither the *Prometheus* nor *Sinclair*
    decisions prohibit us from reinstating the 1999 rules. *Prometheus*
    invalidated the cross-media limits, which we no longer apply. We
    also answer *Sinclair*'s critique by justifying why we count
    non-broadcast media in our cross-ownership rules and not in our
    local television rule. *See* *Sinclair*, 284 F.3d at 162; *see also*
    *supra,* text accompanying note 259 and Section V, Local Television
    Ownership Rule, paragraph 100.

[^276]: *See* Clear Channel Comments at 80-90, CBS Comments at 4-6, and
    NAB Comments at 120-124.

[^277]: Clear Channel Comments at 86-87.

[^278]: *Local TV Ownership Report and Order*, 14 FCC Rcd at 12949, ¶
    104.

[^279]: *Id*. The record shows, however, that newspapers and television
    are "far and away the most important sources" of news and
    information, with radio a distant third. *See, e.g*., CU Comments at
    11.

[^280]: Clear Channel Comments at 88.

[^281]: *See* Prometheus Reply at 44 (Congress "made a conscious
    decision to retain the restriction on television-radio cross
    ownership" when it chose to eliminate the broadcast/cable
    cross-ownership restriction).

[^282]: Clear Channel Comments at 89; *see also* NAB Reply at 91-92.

[^283]: *See* 1996 Act, § 202(d).

[^284]: 47 C.F.R. § 73.3555(b)(2)(ii) (2002) ("Count only those stations
    the Grade B signal contours of which overlap with the Grade B signal
    contour of at least one of the stations in the proposed
    combinations"). As discussed below in this section, the rule was
    revised in the *2002 Biennial Review Order*, but the revised rule,
    set forth in the current version of the Code of Federal Regulations,
    was remanded and stayed.

[^285]: *Sinclair*, 284 F.3d at 152, 163-65 (demonstrating that the
    *Sinclair* court reviewed the *Local TV Ownership Report and Order*,
    14 FCC Rcd at 12903 *et seq*.; *on recon.*, 16 FCC Rcd 1067 (2001)).

[^286]: *Sinclair*, 284 F.3d at 159-162.

[^287]: *Id*. at 162, *quoting AT&T Corp. v. FCC*, 220 F.3d 607, 627
    (D.C. Cir. 2000).

[^288]: *Id*. at 162.

[^289]: *Id*. (quoting *Cassell v. FCC*, 154 F.3d 478, 485 (D.C. Cir.
    1998) (*quoting Home Box Office, Inc. v. FCC*, 567 F.2d 9, 60 (D.C.
    Cir. 1977)).

[^290]: *Id*. at 165.

[^291]: *2002 Biennial Review Order*, 18 FCC Rcd at 13686, ¶ 171.

[^292]: *Id.* at 13668, ¶ 133*.*

[^293]: *Id*. at 13692-93, ¶¶ 189-91.

[^294]: *Id*. at 13693, ¶ 190.

[^295]: *Id*.

[^296]: *Id.* at 13668, ¶ 134.

[^297]: *Id.* As under the existing rule, the revised rule provided that
    a station's rank would be based on the station's most recent all-day
    audience share, as measured by Nielsen or any comparable
    professional and accepted rating service, at the time an application
    for transfer or assignment of license is filed. *Id*. at 13692, ¶
    186.

[^298]: *Id.* at 13692, ¶ 187. Combinations in existence as of the time
    of the *2002 Biennial Review Order* were grandfathered. *Id.* at
    13807-08, ¶¶ 482-84.

[^299]: *Id.* at 13692, ¶¶ 186-87.

[^300]: *Id.* at 13708, ¶ 225 (eliminating requirement to show that no
    out-of-market buyer is available for failed, failing and unbuilt
    station waivers); *id*. at 13710, ¶ 231 (stating that the Commission
    also would consider waivers of the local television ownership rule
    where the stations at issue are in the same DMA, but are not
    available over-the-air or via MVPDs in any of the same geographic
    areas); *id.* at 13708-10, ¶¶ 227-30 (in markets with 11 or fewer
    stations, parties can seek a waiver of the top four-ranked
    restriction by making certain showings).

[^301]: *Id.* at 13708, ¶ 225. *See* 47 C.F.R. 73.3555 Note 7 (setting
    forth the criteria that must be met in order for a station to
    qualify as "failed, failing, or unbuilt").

[^302]: *2002 Biennial Review Order*, 18 FCC Rcd at 13708, ¶ 225.

[^303]: *Prometheus,* 373 F.3d at 414.

[^304]: *Id.* at 415.

[^305]: *Id*. at 415-16.

[^306]: *Id.* at 417 (citing *Sinclair,* 284 F.3d at 162; *AT&T Corp.,*
    220 F.3d at 627).

[^307]: *Id.* at 417-18.

[^308]: *Id.* at 420.

[^309]: *Id.* at 419-20.

[^310]: *Id.* at 421 (quoting *Motor Vehicle Mfrs. Ass'n v. State Farm
    Mut. Ins. Co*., 463 U.S. 29, 43 (1983).

[^311]: *See*, *e.g.*, CWA Comments at 61.

[^312]: *See* AFL-CIO Comments at 45; AFTRA Comments at 15; CU Comments
    at 21; UCC Comments at 45-47.

[^313]: *See* Fox Comments at 18-20; Gannett Comments at 39-45; Gray
    Comments at 1-6; Sinclair 12/11/07 Comments at 4.

[^314]: *See* KTBS Comments at 1-4; Belo Comments at 18; Belo 12/11/07
    Comments at 7-8; Block Comments at 1-6; Cascade Comments at 1-3;
    Entravision Comments at 5-9; Hearst-Argyle Comments at 4, 26; KVMD
    Comments at 3-7; NAB Comments at 87; NAB 12/11/07 Comments at 15-23;
    Nexstar Comments at 22; Smaller Market Television Station
    ("SMTS")12/11/07 Comments at 8-9; SMTS Comments at 13.

[^315]: *See* Cequel Comments at 2-4 (asserting that consolidation
    increases broadcasters' negotiation leverage with cable operators,
    allowing them to seek "inflationary" retransmission consent terms);
    Children's Media Policy Coalition Comments at 9-11, 13-15 (stating
    that media consolidation reduces the availability of children's
    programming); CWA Comments at 13 (stating that consolidation results
    in job losses).

[^316]: *See, e.g.,* Belo Comments at 25; Cascade Comments at 1-3;
    Entravision Comments at 9-10; KVMD Comments at 6-7; NAB 12/11/07
    Comments at 22-23; Nexstar Comments at 14-16; SMTS 12/11/07 Comments
    at 8-9.

[^317]: *See* Gannett Comments at 46-48; Granite Comments at 2-6;
    Hearst-Argyle Comments at 33-46; Hoak Media Comments at 8-9;
    Sinclair Comments at 34-38; NAB Comments at 107.

[^318]: *See* Hearst-Argyle Comments at 30; SMTS Comments at 26.

[^319]: *See* UCC Comments at 30-32 (stating that the Commission should
    not grant waivers for failing stations, but that if it does, it
    should retain the failed station solicitation rule).

[^320]: *See* *generally* NBC Universal Comments; Equity Broadcasting
    Comments.

[^321]: We decline to broaden our waiver standard, as suggested by some
    commenters. *See* Belo 12/11/07 Comments at 8 (urging the adoption
    of a general waiver standard that would "permit a broadcaster to
    demonstrate that, regardless of market size or the number of other
    local television stations, an individual combination would benefit
    its local community"); Sinclair 12/11/07 Comments at 4 (arguing that
    a waiver should be granted whenever the applicant can demonstrate
    that no harm would be caused and that public interest benefits would
    ensue).

[^322]: *See 2002 Biennial Review Order,* 18 FCC Rcd at 13676, ¶ 152.

[^323]: *See* Belo Comments at 25; Cascade Comments at 2-3; Entravision
    Comments at 9-10; KVMD Comments at 5-7; Nexstar Comments at 10; *see
    also, e.g.,* Remarks of Joe Lewin, President and General Manager of
    WHTM-TV, Media Ownership Hearing in Harrisburg, Pennsylvania (Feb.
    23, 2007), Transcript at 51-56; Remarks of Paul Quinn, President and
    General Manager of WGAL-TV, Media Ownership Hearing in Harrisburg,
    Pennsylvania (Feb. 23, 2007), Transcript at 64-69.

[^324]: As the court in *Sinclair* stated, "\[c\]hoosing the number
    eight and defining 'voices' are quintessentially matters of line
    drawing invoking the Commission's expertise in projecting market
    results." 284 F.3d at 162.

[^325]: We note that the eight voices test is based on the unique
    characteristics of local television markets rather than general HHI
    analysis. As a result, it is not directly tied to the actual market
    shares of stations in a particular market. Nevertheless, we think
    that it is appropriate for us to consider the general
    characteristics of market structure (*i.e.*, the disparity between
    the top four stations in a market and the remaining stations) in
    formulating an appropriate rule that will promote competition.

[^326]: *See 2002 Biennial Review Order*, 18 FCC Rcd at 13668, ¶ 133.

[^327]: *But see* Nexstar Petition at 7-8 (suggesting that the
    Commission failed to consider local cable competition adequately).

[^328]: 284 F.3d at 164.

[^329]: We therefore disagree with commenters that there is no reasoned
    basis under *Sinclair* for defining voices differently for different
    ownership rules. *See* SMTS 12/11/07 Comments at 3-4; Sinclair
    12/11/07 Comments at 2-3.

[^330]: *2002 Biennial Review Order*, 18 FCC Rcd at 13668, 13671, ¶¶
    133, 140.

[^331]: CWA Comments at 61; *see also* CWA Comments at 13-15 (citing
    examples of television broadcast mergers that led to job losses); CU
    Comments at 26.

[^332]: AFL-CIO Comments at 42-44.

[^333]: UCC Comments at 53-54.

[^334]: *But see, e.g.*, NAB 12/11/07 Comments at 19-21 (asserting the
    relevance of cable and satellite viewing and advertising with
    respect to the competitive position of local television stations);
    Remarks of Paula Madison, President and General Manager of KNBC-TV,
    Media Ownership Hearing at El Segundo, California (Oct. 3, 2006),
    Transcript at 29-33 (discussing competition from cable providers).

[^335]: *See 2002 Biennial Review Order*, 18 FCC Rcd at 13695, ¶ 194.

[^336]: *Id.* at 13697, ¶ 200.

[^337]: *Id.* at 13694, ¶ 194.

[^338]: *Id*. at 13678-83, ¶¶ 155-64.

[^339]: *See, e.g.,* Belo Comments at 25; Belo 12/11/07 Comments at 7-8;
    Cascade Comments at 1-3; Entravision Comments at 9-10; KVMD Comments
    at 6-7; NAB 12/11/07 Comments at 16-19; Nexstar Comments at 14-16;
    SMTS 12/11/07 Comments at 9.

[^340]: *See, e.g.,* AFL-CIO Comments at 42-44; AFTRA Comments at 14-15;
    Remarks of James C. Joyce, Vice President, Nat'l Assoc. of Broadcast
    Employees and Technicians, CWA, Media Ownership Hearing in El
    Segundo, California (Oct. 3, 2006), Transcript at 43-47.

[^341]: UCC Comments at 50-53

[^342]: Belo Comments at 25.

[^343]: Entravision Comments at 9-10.

[^344]: Nexstar Comments at 14-16.

[^345]: NBC Reply at 8-9.

[^346]: *2002 Biennial Review Order*, 18 FCC Rcd at 13692, ¶ 187.

[^347]: *Local TV Ownership Report and Order*, 14 FCC Rcd at 12926, ¶¶
    47-48, *clarified on recon.*, 16 FCC Rcd at 1070, ¶ 9.

[^348]: *Local TV Ownership Report and Order*, 14 FCC Rcd at 12928-29,
    ¶¶ 51, 53.

[^349]: *Id.* at 12929, ¶ 53.

[^350]: *See Prometheus*, 373 F.3d at 420-21.

[^351]: CFA/CU Petition at 5, 19-20; MMTC Petition at 28-36; UCC
    Petition at 17-26; *see also* Duff, Ackerman & Goodrich Petition for
    Clarification, MB Dkt. No. 02-277 at 1-3 (seeking clarification
    that, under the revised rule, noncommercial stations that duplicate
    the programming of an in-market parent station would be excluded
    from the count of television stations).

[^352]: *Prometheus*, 373 F.3d at 418-20.

[^353]: Nexstar Petition at 1-14; LIN Television Corp. and Raycom Media,
    Inc. ("LIN/Raycom") Petition at 3-13.

[^354]: UCC Petition at 17-26.

[^355]: *Id*.; MMTC Petition at 28-36.

[^356]: *See* *2002 Biennial Review Order*, 18 FCC Rcd at 13708, ¶ 225.

[^357]: *See* 1996 Act § 202(b); 47 C.F.R. § 73.3555(a). A single AM/FM
    combination is always permitted. Note 539 of the *2002 Biennial
    Review Order*, 18 FCC Rcd at 13717, ¶ 250 n.539, specified that a
    single AM/FM combination is always permitted, citing 47 C.F.R. §
    73.3555(a)(2). That section of the Commission's rules was
    inadvertently removed by the *2002 Biennial Review Order*. We are
    taking this opportunity to reinstate this rule to state "overlap
    between two stations in different services is permissible if neither
    of those two stations overlaps a third station in the same service."

[^358]: *2002 Biennial Review Order,* 18 FCC Rcd at 13712, 13733-34, ¶¶
    239, 294. The Commission maintained the AM and FM ownership limits
    due to technical and marketplace disparities between the two
    services. *Id.* at 13733-34, ¶ 294.

[^359]: *Id.* at 13712, 13717-24, ¶¶ 239, 250-72.

[^360]: *Id.* at 13712, 13724-28, ¶¶ 239, 273-81.

[^361]: *Id.* at 13713, ¶ 239. The Commission held that its prior
    exclusion of these stations failed to account for their competitive
    impact on a radio market. *Id.* at 13730, ¶ 287. The Commission
    found that although they do not compete in the radio advertising
    market, noncommercial stations exert competitive pressure in the
    radio listening and radio program production markets. *Id*. at
    13734, ¶ 295.

[^362]: *Id.* at 13742-46, ¶¶ 316-25.

[^363]: *Id.* at 13807-09, ¶¶ 482-86.

[^364]: *Prometheus,* 373 F.3d at 421-30. Although the Commission did
    not require owners to divest their interests in stations, it held
    that parties would have to comply with the ownership rules at the
    time a transfer of control or assignment application is filed,
    unless the entity acquiring control of the combination was an
    "eligible entity," which was defined as an entity that would qualify
    as a small business consistent with Small Business Administration
    ("SBA") standards for its industry grouping. *Id.* at 13809-13, ¶¶
    487-90. The *Prometheus* court subsequently lifted the stay with
    respect to using Arbitron Metro markets to define local radio
    markets, including noncommercial stations in determining the size of
    a market, attributing stations whose advertising is brokered under a
    JSA to a brokering station's permissible ownership totals, and
    imposing a transfer restriction. *See* paragraph 4 of this Order,
    *supra*.

[^365]: *Prometheus,* 373 F.3d at 432-34 (Because the Commission "has in
    the past extolled the value of audience share data for measuring
    diversity and competition in local radio markets," its "reliance on
    the fiction of equal-sized competitors, as opposed to measuring
    their actual competitive power, is even more suspect in the context
    of the local radio rule.").

[^366]: The court noted that the Commission\'s decision to rely on a
    five-firm theory for purposes of the local radio ownership rule
    conflicts with the *DOJ/FTC Horizontal Merger Guidelines*, under
    which a market with five equal-sized competitors is considered
    "highly concentrated." The court held this conflict "suspect"
    because, elsewhere in the *2002 Biennial Review Order*, the
    Commission had relied on the *DOJ/FTC Horizontal Merger Guidelines*
    to derive its local television ownership limits. The court directed
    the Commission to address this apparent discrepancy on remand. *See
    id.* at 433-34. In addition, the Commission had cited game theory
    articles to support its finding that a market that has five or more
    relatively equal-sized firms can achieve a level of market
    performance comparable to a fragmented, structurally competitive
    market. The court directed the Commission to respond to the argument
    that these game theory articles do not rule out market structures
    other than equal-sized competitors (such as one large firm and many
    small ones) as equally competitive markets. *Id*. at 432-33.

[^367]: *Id.* at 434-35.

[^368]: Some commenters take issue with the Commission's treatment of
    localism and diversity. For example, the FMC alleges that we failed
    to treat localism and diversity as separate policy goals in the
    context of radio regulation. FMC Petition at 2-5. Instead, FMC
    argues that the Commission treated localism and diversity as
    byproducts of competition. It states that the Commission lacks
    evidence to show that competition ensures localism and diversity.
    FMC urges the Commission to establish multiple measures of localism
    and diversity to ensure that the policy goals are met. *See id*. FMC
    also contends that the Commission failed to explain how its radio
    ownership rules support localism and to define "competitive market
    performance" as it relates to localism. *See id*. at 7-8. As
    indicated by examination of paragraphs 9-12 of this Order, FMC's
    assertions are incorrect. The Commission separately analyzes the
    effectiveness of the Commission's rules in promoting each of its
    three key goals. FMC also contends that the Commission failed to
    provide enough evidence to show how radio combinations are efficient
    and that the Commission inconsistently discussed entry conditions
    for the radio industry. *Id*. at 8-9. First, economic theory
    indicates that consolidation permits a firm to achieve economies of
    scale and scope in operations. This, in turn, provides that firm
    with the capability to achieve greater efficiencies than smaller
    firms. Firms that fail to achieve such efficiencies are unlikely to
    compete successfully. [Dennis W. Carlton and Jeffrey M.
    Perloff]{.smallcaps}, [Modern industrial Organization]{.smallcaps},
    35-48 (3d ed. 2000). Second, our entry analysis is not inconsistent
    because the evidence shows that a number of transactions are still
    taking place. *See* Media Ownership Study 2 at 7; "Review of Radio
    Industry," by George Williams, FCC (2007) ("Media Ownership Study
    10"), *available at* http://www.fcc.gov/ownership/studies.html at 5.
    Thus, contrary to FMC's arguments, radio spectrum is not "locked
    up," and our ownership tiers are designed to prevent that from
    occurring.

[^369]: *See* *2002 Biennial Review Order*, 18 FCC Rcd at 13714-16, ¶¶
    243-47.

[^370]: Clear Channel Reply at 4-6, 10-13, 43-46 (citing competition
    from satellite radio, MP3 players, Internet radio stations,
    subscription-based music services from cable, DBS and IPTV
    providers, and Wi-Max); NAB Reply at 32-34, 50-52.

[^371]: *See 2002 Biennial Review Order,* 18 FCC Rcd at 13730-31, ¶ 288;
    *see also Prometheus,* 373 F.3d at 431-32.

[^372]: *See 2002 Biennial Review Order,* 18 FCC Rcd at 13731, ¶ 289;
    *see also Prometheus,* 373 F.3d at 433. Though UCC questions our
    former justification (based on a five equal-sized competitors
    theory) for retaining the existing numerical limit, we offer a new
    rationale for our decision, which renders UCC's questions on this
    issue moot. UCC Petition at 26-29.

[^373]: Before 1989, the Commission relied on interference contours to
    determine whether two commonly owned radio stations implicated the
    rule. *See* 47 C.F.R. § 73.3555(a)(1) & (a)(2) (1988). In 1989, the
    Commission began using principal community contours. In either case,
    parties could own a single AM-FM combination even if their contours
    overlapped. *See 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, 19863-64 ¶¶ 5-7 (2001); *see also*
    *Amendment of* §*73.3555 of the Commission's Rule, the Broadcast
    Ownership Rules*, MM Docket No. 87-7, First Report and Order, 4 FCC
    Rcd 1723, 1723, ¶ 1 (1989); 47 C.F.R. §73.3555(a)(1),(2) (1989)
    ("*1989 Multiple Ownership First Report and Order*").

[^374]: *See Revision of Radio Rules and Policies*, MM Docket No.
    91-140, Report and Order, 7 FCC Rcd 2755, 2757-60, ¶¶ 4-10 (1992)
    ("*1992 Radio Ownership Order*"); *see also* 47 C.F.R.
    §73.3555(a)(1) (1995). Under the 1992 rules, a party could own two
    AM and two FM radio stations in markets with 15 or more commercial
    radio stations, and three radio stations of which no more than two
    could be AM or FM stations in smaller markets. The 1992 rule also
    imposed an audience share limit on radio station combinations in the
    larger market. *See* 47 C.F.R. §73.3555(a)(1) (1995).

[^375]: 1996 Act § 202(b).

[^376]: *See* FMC Reply App., *False Premises, False Promises: A
    Quantitative History of Ownership Consolidation in the Radio
    Industry* by Peter DiCola ("FMC DiCola Study") at 50-81; AFL-CIO
    Comments at 45-47; UCC Comments at 79-80; Remarks by James Wolfe,
    President of WFXK and WJAK Radio in Jackson, Tennessee, Media
    Ownership Hearing in Nashville, Tennessee (Dec. 11, 2006) (noting
    high concentration levels in the radio industry).

[^377]: Media Ownership Study 10 at 1 (the conclusions of Media
    Ownership Study 10 are based on an analysis of the commercial
    broadcast radio industry).

[^378]: *Id.* at 2.

[^379]: *Id.* at 7 ("In the 50 largest markets, on average, the top firm
    holds 34 percent of market revenue, the second firm holds 24
    percent, and firms three and four split the next 26 percent. For the
    100 smallest markets, on average, the first firm holds 54 percent,
    the second firm holds 30 percent, and the next two firms split 13
    percent."); s*ee also* CU Reply at 19 ("at the local level, half of
    all local radio markets are effectively duopolies and almost 10
    percent are monopolies"); FMC DiCola Study at 74 ("Numeric caps at
    the current level *or even lower levels* are needed to protect the
    public, the small business community, and the political sphere
    against excessive market concentration") (emphasis in the original);
    and at 68 ("Out of 297 Arbitron markets, 232 had HHIs greater than
    1800 in Spring 2005. Sixty three more had HHIs between 1000 and
    1800. \[For the other two markets, no HHI measure was available.\]
    In sum, the majority of local radio markets have levels of
    concentration that ordinarily give rise to antitrust concerns about
    excessive market power.").

[^380]: *See 2002 Biennial Review Order,* 18 FCC Rcd at 13731, ¶ 290,
    n.616 and accompanying text; *see also* UCC Comments to Media
    Ownership Studies at 16-17 ("Study 10 \... reveals that common
    ownership of media outlets in markets is alarmingly high, with four
    firm concentration ratios averaging 97% in smaller markets and 84%
    in the 50 largest markets.") (citing Media Ownership Study 10 at
    22); CU Reply at 21-22, and Attach., Reply Study at 66-67 ("CU Reply
    Study") (showing that the top two owners have an average market
    share of 2/3, and the top four having 90 percent).

[^381]: *2002 Biennial Review Order,* 18 FCC Rcd at 13732, ¶ 290, n.620
    and accompanying text (citing MOWG Study No. 4 at 18, which
    concluded that "\[o\]verall..., local consolidation appears to
    increase the prices paid by national and regional advertising
    agencies for local radio advertising ... local concentration
    accounted for approximately 3-4% out of the 68% increase in real
    advertising rates.") *But see* "Station Ownership and Programming in
    Radio," by Tasneem Chipty, CRA International, Inc. (Jun. 2007)
    (:Media Ownership Study 5"), *available at*
    http://www.fcc.gov/ownership/studies.html at 41 (concluding that
    "\[t\]here are no differential effects of local radio consolidation
    of ownership across big and small markets."); Media Ownership Study
    10 at 15-16 ("Overall, it appears that the cost of radio advertising
    has nearly doubled since the 1996 Act was passed. By contrast, the
    CPI ... increased 29 percent during the same time period. In other
    words, the CPI increased approximately 3 percent per year during
    this time period, while the annual growth rate in radio prices was
    approximately 10 percent.").

[^382]: Thus, we decline to relax our rule as recommended by some
    commenters. Clear Channel Comments at 50-59; Clear Channel 12/11/07
    Comments at 9-12; NAB Reply at 50; NAB 12/11/2007 Comments at 24-27;
    CBS Reply at 11-13.

[^383]: UCC urges us to tighten the local radio ownership limits. UCC
    Comments to Media Ownership Studies at 39, 48. FMC urges us to
    either retain or lower the current limits. FMC Comments at 1-6.

[^384]: Our research has shown that radio firms have strong earnings,
    though they do carry high debt loads and thus experience a certain
    level of volatility in their stock market valuations. Through much
    of the period before 2000, the valuations of these radio companies
    outperformed the broad market of publicly traded companies, as
    reflected in Standard and Poor's 500 (S&P 500) index returns. After
    2000, however, the returns of radio companies, on average, have
    fallen slightly below the S&P returns. While it is not our mandate
    to assure the profits of a given media sector, we are concerned with
    financial stability insofar as it assures the continued service that
    the public has come to expect. *See* Media Ownership Study 10 at 2.
    Several parties also describe the amount of consolidation that has
    occurred under the current ownership limits. *See* Remarks of Cheryl
    Salomone, Vice President and Marketing Manager of New Northwest
    Broadcasters, Media Ownership Hearing in Seattle, Washington (Nov.
    9, 2007), Transcript at 128-32 (noting efficiencies of
    consolidation) ("Salomone Remarks"); Remarks of Bud Walters,
    President of Cromwell Radio, Media Ownership Hearing in Nashville,
    Tennessee (Dec. 11, 2006) (six of Cromwell's radio stations would be
    off the air if not for consolidation) ("Walters Remarks"); Remarks
    of Pat Roberts, President of Florida Association of Broadcasters,
    Media Ownership Hearing in Tampa, Florida (Apr. 30, 2007),
    Transcript at 65-59; Remarks of Joyce McCollough, General Manager of
    Radio Stations WLPO, WAJK, WKOT in LaSalle, Illinois, Media
    Ownership Hearing in Chicago, Illinois (Sept. 9, 2007), Transcript
    at 208-12 (touting efficiencies of consolidation) ("McCollough
    Remarks").

[^385]: *See* FMC Comments at 6-8 (citing Media Access Pro (Radio
    Version) and BIA data as of November 2005).

[^386]: *See, e.g., Costa de Ora Television, Inc. v. FCC,* 294 F.3d 123,
    129 (D.C. Cir. 2002) (discussing the Commission's decisions to let
    prior rulings stand to "'avoid disturbing settled expectations'").

[^387]: Media Ownership Study 10 notes that publicly traded commercial
    radio firms "have generally used more debt than the typical S&P 500
    company to finance operations and growth." Media Ownership Study 10
    at 11-12.

[^388]: *Cf. 2002 Biennial Review Order*, 18 FCC Rcd at 13808-09, ¶¶
    484-86 (concluding that disparity between grandfathered and
    non-grandfathered owners did not outweigh the equitable
    considerations in favor of grandfathering under the circumstances).

[^389]: Thus, for the reasons discussed above, we dismiss petitions
    urging us to tighten our radio ownership limits and to create,
    through selective divestiture, more opportunities for small
    broadcasters. Amherst Alliance and Virginia Center for the Public
    Press Petition at 6.

[^390]: For further discussion of the AM/FM subcaps, see paragraphs
    130-134 of this Order.

[^391]: *2002 Biennial Review Order,* 18 FCC Rcd at 13738, ¶ 303 (citing
    generally to the *1992 Radio Ownership Order*, 7 FCC Rcd 2755 and to
    the *1989 Multiple Ownership First Report and Order*, 4 FCC Rcd
    1723).

[^392]: *Compare* AFL-CIO Reply at iii, 16; FMC Reply at 9-10, *and*
    Lockhart Informal Reply at 4-5, *and* Mt. Wilson Comments at 15-16,
    *and* Remarks of Kevin Brinson, CEO of CWAL, Inc., Media Ownership
    Hearing in Chicago, Illinois (Sept. 20, 2007), Transcript at 159-61,
    *and* Remarks of Mike Mills, Member of R.E.M. and Member of
    Recording Artists Coalition, Media Ownership Hearing in Los Angeles
    (Oct. 3, 2006), Transcript at 63-67, *and* Remarks of Rick Carnes,
    President of Song Writers Guild of America, Media Ownership Hearing
    in Nashville, Tennessee (Dec. 11, 2006), *and* Remarks of Jenny
    Toomey, Executive Director of the Future of Music Coalition, Media
    Ownership Hearing in Nashville, Tennessee (Dec. 11, 2006), *and*
    Remarks of Mr. Carlson, Citizen Participant, Media Ownership Hearing
    in Seattle, Washington (Nov. 9, 2007), Transcript at 86-91, *and*
    Remarks of John Haer, Executive Director of Pittsburgh Local AFTRA,
    Media Ownership Hearing in Harrisburg, Pennsylvania (Feb. 23, 2007)
    Transcript at 254-55, *and* Remarks of Hannah Sassaman, Citizen
    Participant, Media Ownership Hearing in Harrisburg, Pennsylvania
    (Feb. 23, 2007) Transcript at 215-16 (arguing generally that the
    current local radio ownership rule undermines the Commission's
    localism goal), *with* Clear Channel Reply at 26-31, *and* NAB Reply
    at 53 (contending that consolidation promotes localism), *and*
    Remarks of Sue Sensenig, Hall Communications, Media Ownership
    Hearing in Harrisburg, Pennsylvania (Feb. 23, 2007) Transcript at
    102-04, *and* Walters Remarks at Media Ownership Hearing in
    Nashville; Remarks of Art Rowbotham, President of Hall
    Communications, Tampa, Florida (Apr. 30, 2007) Transcript at 69-72
    (noting the benefits of consolidation with respect to localism).

[^393]: FMC Reply at 11; FMC DiCola Study at 83-93; AFL-CIO Reply at 34
    (citing FMC Study).

[^394]: FMC Reply at 10-11 (criticizing findings in studies commissioned
    by NAB and Clear Channel).

[^395]: *See* UCC Comments at Appendix D, Citizens Speak: The Real World
    Impacts of Media Consolidations at 26 (quoting testimony from FCC
    Commissioner Jonathan Adelstein alleging that radio stations owned
    by Clear Channel failed to provide citizens in Minot, North Dakota
    with information during an emergency in 2002). Clear Channel
    responded that the failure to transmit emergency information was a
    result of the local authorities' use of outdated EBS equipment
    instead of the EAS equipment that should have been implemented in
    1997. Clear Channel Reply at 33-35. Clear Channel nevertheless
    concedes that some of its stations use voice tracking and that the
    decision to air that company-wide programming is made by an
    individual station's programming director and is primarily aired by
    stations in smaller markets. *Id.* at 33-34.

[^396]: NAB Reply at 53.

[^397]: "Ownership Structure, Market Characteristics and the Quantity of
    News and Public Affairs Programming: An Empirical Analysis of Radio
    Airplay," by Kenneth Lynch, FCC (2007) ("Media Ownership Study
    4.2"), *available at* http://www.fcc.gov/ownership/studies.html
    at 1. Peer review of this study observes that the impacts of
    ownership characteristics are generally weak, both in terms of
    statistical and economic significance, and the conclusions reflect
    these findings. *See* Media Ownership Study 4.2 Peer Review by Scott
    J. Savage at 2, *available at*
    http://www.fcc.gov/mb/peer_review/peerreview.html. Each of these
    findings is subject to some caveats. For example, each additional
    in-market station owned by the parent decreased expected news (the
    effect is not statistically significant) and increased public
    affairs programming (the effect is statistically significant).
    Overall, we conclude that there are at least some economies of scope
    that continue to benefit the radio marketplace.

[^398]: FMC Reply at 9; AFTRA Comments at 16-17; *see also* Remarks of
    Big Kenny Alfend, Recording Artist, Media Ownership Hearing in
    Nashville, Tennessee (Dec. 11, 2006); Remarks of Harold Bradley,
    Vice President of American Federation of Musicians, Media Ownership
    Hearing in Nashville, Tennessee (Dec. 11, 2006); Remarks of Dobie
    Gray, Member of AFTRA, Media Ownership Hearing in Nashville,
    Tennessee (Dec. 11, 2006).

[^399]: *2002 Biennial Review Order*, 18 FCC Rcd at 13738, ¶ 304.

[^400]: We also address localism in a separate proceeding. *Broadcast
    Localism,* Report on Broadcast Localism and Notice of Proposed
    Rulemaking, MB Docket No. 04-233, adopted Dec. 18, 2007, Press
    Release (FCC 07-218).

[^401]: *2002 Biennial Review Order,* 18 FCC Rcd at 13739, ¶¶ 305-06.

[^402]: *Id.* at 13742, ¶ 315.

[^403]: Some commenters contend that the consolidation allowable under
    the local radio rule harms diversity and creates more homogenized
    programming. *See* AFL-CIO Reply at 34-37; CU Reply at 21, 37;
    O'Donnell Informal Reply at 2-4; Remarks of Dan Navarro, Citizen
    Participant, Media Ownership Hearing in Los Angeles, California
    (Oct. 3, 2006) Transcript at 93-96; Remarks of Summer Reese, Citizen
    Participant, Media Ownership Hearing in Los Angeles, California
    (Oct. 3, 2006) Transcript at 135-38; Remarks of Craig Wiseman,
    Songwriter, Media Ownership Hearing in Nashville, Tennessee (Dec.
    11, 2006). On the other hand, Clear Channel states that
    consolidation enables radio firms to offer programming that
    audiences want to hear. Clear Channel Reply at 24-26; *see also*
    Buckley Broadcasting Reply at 5-8; Salomone Remarks at Media
    Ownership Hearing in Seattle, Transcript at 128-32; McCollough
    Remarks at Media Ownership Hearing in Chicago, Transcript at 208-12.
    NAB also touts the benefits of consolidation, arguing that changes
    within local radio markets since 1996 have enabled stations to
    provide more varied audio programming that is specifically tailored
    to meet the needs and interests of minority groups. NAB Reply at 52.
    Critics of consolidation make the additional point that minority
    owners are more likely to include programming of concern to ethnic
    and racial minorities. *See* CU Reply at 37. We note that we have
    addressed this topic specifically in a separate proceeding. *See
    Diversity Order*, note 7, *supra.*

[^404]: If anything, the market level analysis suggests that more
    concentrated markets have fewer stations with the same format
    categories, and therefore more format diversity. Similarly, large
    national radio owners offer more formats. Moreover, owners with
    several local stations offer longer, uninterrupted blocks of sports
    programming in the evening. The analysis also suggests that common
    ownership results in more diversity in actual programs aired. Based
    on an analysis of news and sports formatted stations, the study
    finds there is some overlap in actual programs aired across the two
    formats generally, but not within commonly owned station-pairs
    within the same market. Further, there are no significant
    differences in the effects of consolidation in radio on programming
    content, across big and small markets. Media Ownership Study 5 at 3.

[^405]: However, in recent years the average number of formats appears
    to have declined slightly for some of the large markets, while
    increasing slightly for most of the smaller ones. Media Ownership
    Study 10 at 8. As noted above, the conclusions of this study are
    based on an analysis of the commercial broadcast radio industry.
    Media Ownership Study 10 also notes that radio listening has
    continued to decline since 1998. *Id*. at 14-15.

[^406]: *See* Media Ownership Study 5 Peer Review, by Andrew Sweeting,
    Duke University at 1, *available at*
    http://www.fcc.gov/mb/peer_review/peerreview.html. The review also
    points out that the study results reflect correlations in the data
    between ownership and programming, and that there is no direct
    evidence of causal effects. *Id.* at 2.

[^407]: Media Ownership Study 10 Peer Review, by George S. Ford, Phoenix
    Center for Advanced Legal & Econ. Policy Studies, *available at*
    http://www.fcc.gov/mb/peer_review/peerreview.html. Ford found that,
    as a whole, the conclusions in Media Ownership Study 10 followed
    from the analysis. *Id*. at 3.

[^408]: Carolyn M. Byerly, Ph.D. and John R. Arnold, Ph.D Comments to
    Media Ownership Studies at 2. Byerly and Arnold also argue that
    Media Ownership Study 5 assumes "diversity" to mean how many
    different program formats a station airs, rather than the ideas or
    other substantive content present within those formats. They claim
    that this assumption is contrary to current understandings of the
    word, both in mass communication research and in media law. *Id*. at
    2-3.

[^409]: UCC contends that format diversity is not a good proxy for
    diversity. Nonetheless, UCC concedes that the studies show that
    format diversity is not affected much one way or another by
    consolidation. UCC Comments to Media Ownership Studies at 39. UCC
    concludes that none of the findings offer compelling public interest
    justifications for further relaxation of the radio ownership limits.
    Instead, UCC contends that the studies support further tightening of
    the limits. *Id*. at 45-48. By contrast, Clear Channel states that
    the studies overwhelmingly support its contention that relaxing, if
    not eliminating, the local radio ownership rules has affirmative
    public interest benefits in terms of diversity and localism with no
    adverse affect on competition. Clear Channel Comments to Media
    Ownership Studies at 4-8.

[^410]: *Prometheus*, 373 F.3d at 434-35.

[^411]: *Further Notice*, 21 FCC Rcd at 8843, ¶ 22.

[^412]: Clear Channel Comments at 66; Clear Channel Reply at 49; Clear
    Channel 12/11/2007 Comments at 5-8; CBS Reply at 13; Multicultural
    Radio Broadcasting Comments at 2; Multicultural Radio Broadcasting
    12/11/2007 Comments at 1.

[^413]: Clear Channel Comments at 72.

[^414]: Multicultural Radio Broadcasting Comments at 2.

[^415]: *Id*. at 3.

[^416]: CBS Reply at 13.

[^417]: UCC Comments at 84; Mt. Wilson Reply at 21.

[^418]: UCC Comments at 84.

[^419]: *Id*.

[^420]: *Id*. at 84-85. In addition, UCC argues that "retaining the AM
    subcap will foster ... diversity. Because of their inferior sound
    quality, AM stations are more likely to provide talk rather than
    music formats. Without the AM subcap, one entity in a locality could
    own a large number of the stations devoted to news or public
    affairs, considerably reducing local diversity in news and public
    affairs programming." *Id*.

[^421]: Mt. Wilson Reply at 21.

[^422]: *See 2002 Biennial Review Order*, 18 FCC Rcd at 13739, ¶ 306.

[^423]: UCC Comments at 84-85. UCC claims that if the AM subcaps were
    removed, "large companies could bid up the price of AM stations and
    further erode th\[e\] abysmally low representation" of minority and
    female radio station owners. *Id.* at 85.

[^424]: *See 2002 Biennial Review Order*, 18 FCC Rcd at 13733-34, ¶ 294.

[^425]: Clear Channel Comments at 66-73.

[^426]: *See* Stilwell Comments (urging Congress to permanently freeze
    the maximum number of radio stations an entity can own); *see also*
    Remarks by Rachel Stilwell, Media Ownership Hearing in El Segundo,
    California (Oct. 3, 2006), Transcript at 130-32; Amherst Alliance
    Supp. Comments at 1-6 (re LPFM policies); CCVM Comments at 3, 8
    (contending that a connection exists between increased consolidation
    and increased indecency complaints); FMC Reply at 14-15 (asking that
    the Commission to collect more ownership-related information from
    licensees). These issues are outside the scope of this proceeding.

[^427]: We note that a number of parties challenged the Commission's
    decision in the *2002 Biennial Review Order* to define local radio
    markets using Arbitron Metro markets instead of a contour overlap
    methodology. Some sought Commission reconsideration. *See* Cumulus
    Petition at 3, 9-15; *see also* Main Street Petition at 2-6;
    Monterey Petition at 13-14 (also arguing the two-year hold on
    changes to Arbitron markets will not prevent manipulation or abuse
    of the definition of a radio market); Saga Petition at 2, 5-7 (also
    arguing, like Monterey, that the two-year hold on changes to
    Arbitron markets will not prevent manipulation or abuse of the
    definition of a radio market); WJZD Petition at 6-8, 18 (also
    arguing that the Commission should vacate the new radio rules, issue
    an NPRM on Arbitron markets and create alternative rules for
    case-by-case analysis of radio acquisitions); WTCM Radio Petition at
    3-5. However, we note that the *Prometheus* court upheld our
    decision and lifted the stay with respect to using Arbitron markets.
    We decline to reconsider our decision or to adopt additional
    measures. *See Prometheus,* 373 F.3d at 425; *see also Prometheus
    Rehearing Order*. Furthermore, NABOB urges us to reinstitute our
    flagging policy. NABOB Petition at 8-9, NABOB Petition (Second) at
    4-6 (Oct. 9, 2003). However, we decline to do so because the
    *Prometheus* court affirmed our use of Arbitron markets, and we have
    no evidence here to make us resume the flagging policy. *See 2002
    Biennial Review Order*, 18 FCC Rcd at 13813, ¶¶ 496-97; *see also
    Prometheus Rehearing Order*. ARSO asks the Commission to use a
    different radio market definition than the Arbitron Metro definition
    for the island of Puerto Rico. ARSO Petition at 1-7. We have granted
    ARSO's waiver request to use the interim contour-overlap methodology
    pending the outcome of its Petition, which will be resolved in a
    separate proceeding. *See* Letter from Peter Doyle, Chief, Audio
    Division, Media Bureau, FCC, to Luis A. Soto*,* President, ARSO
    Radio Corp., and Luis A. Mejia, President, Bestov Broadcasting,
    Inc., 22 FCC Rcd 2549, 2553 (Feb. 9, 2007). Therefore, we dismiss
    ARSO's petition in this proceeding.

[^428]: *Prometheus,* 373 F.3d at 423, 425.

[^429]: A number of parties challenged the Commission's decision to
    attribute certain radio JSAs. Bennco Petition at 4-5; Monterey
    Petition at 3-4. While some petitioned the Commission to reconsider
    this determination, others appealed it. However, the Prometheus
    court affirmed the attribution of JSAs. *Prometheus*, 373 F.3d at
    429-30; *see also* Prometheus Rehearing Order. Thus, we decline to
    reconsider our decision and decline to adopt additional measures.
    *Cf*. Letter to David D. Oxenford, Esq. In re KEGK(FM), Wahpeton,
    North Dakota, 21 FCC Rcd 9805 (MB Sept. 1, 2006) (Triad and Monterey
    Licenses, its wholly owned subsidiary, granted six months to come
    into compliance with the local radio limit following release of FCC
    decision addressing their request that the Commission reconsider the
    decision to attribute radio JSAs.). *See also* n.432, *infra*. Mt.
    Wilson also asks us to extend JSA provisions to underwriting
    agreements with noncommercial stations and to apply our limits to
    noncommercial stations. Mt. Wilson Petition at 3, 6-7. We deny Mt.
    Wilson's petition, which we find fails to justify extending our
    ownership limits or our JSA provisions to noncommercial stations. In
    addition, Galaxy urges us to make further refinements to our method
    of counting stations for purposes of calculating numerical limits.
    Galaxy Petition at 1-6 (arguing that we should count two same-market
    stations that simulcast as one and three Class A FM stations in the
    same market as one). The *Prometheus* court upheld our decision and
    lifted the stay with respect to our station counting methodology.
    *See Prometheus,* 373 F.3d at 426, 429-30; *see also Prometheus
    Rehearing Order*. We decline to adopt Galaxy's proposals.

[^430]: Various parties sought reconsideration of the Commission's
    decision to include noncommercial radio stations in determining the
    size of a local radio market for purposes of applying the local
    radio ownership rule. FMC Petition at 10-12; Main Street Petition at
    10; NABOB Petition at 12; UCC Petition at 28-29.

[^431]: *Prometheus,* 373 F.3d at 425-26.

[^432]: *Compare* Cumulus Petition at 19 (requesting rule to permanently
    grandfather existing radio station combinations that do not comply
    with the new rules), *and* Entercom Petition at 3-8 (proposing
    exception for certain community of license changes), *and* Great
    Scott Petition at 2 (also proposing exception for certain community
    of license changes), *with* NABOB Petition at 9-12 (requesting
    reversal of the decision to grandfather existing combinations that
    exceed the local radio ownership rule and require divestiture
    instead), *and* Treasure and Space Coast Radio Petition at 7-8
    (opposing the grandfathering rule), *and* Monterey Petition
    (opposing decision to grandfather existing JSAs only until September
    4, 2005). As noted below, the *Prometheus* court upheld our decision
    and lifted the stay with respect to the grandfathering/transition
    policy, and we decline to adopt additional measures.

[^433]: *See Diversity Order*, *supra* note 7.

[^434]: We deny petitions seeking clarification of the grandfathering
    rules with respect to transfer of control due to death or departure
    of existing owners of closely held businesses because that issue is
    outside the scope of this proceeding. Mid-West Family Petition at
    2-6. We also reject Cumulus's contention that application of our
    modified radio market definition to applications pending at the time
    of the *2002 Biennial Review Order* is impermissibly retroactive.
    *See* Cumulus Petition at 17-19; c*f. Chadmoore Comm'ns, Inc. v.
    FCC,* 113 F.3d 235, 240 (D.C. Cir. 1997) (denial of an application
    in a rulemaking proceeding based on the conclusion that grant "would
    be contrary to the underlying goals of this proceeding" was not
    impermissibly retroactive because, *inter alia,* it lacked
    retroactive effect; "the Commission's action did not increase CCI's
    liability for past conduct or impose new duties with respect to
    completed transactions. Nor could it have impaired a right possessed
    by CCI because none vested on the filing of its application.")

[^435]: *Prometheus,* 373 F.3d at 426-27; *see also Prometheus Rehearing
    Order*.

[^436]: We also dismiss other petitions that raise issues that are
    outside the scope of this proceeding. *See* Mid-West Family
    Broadcasters Petition at 2-6 (asking for exceptions to transfer
    policies for grandfathered combinations); *see also* WTCM Petition
    at 16-17 (urging us to adopt "satellite status" for radio stations
    that rebroadcast "parent radio stations"). In addition, WJZD raises
    concerns with respect to petitions to deny mooted by the *2002
    Biennial Review Order*. WJZD Petition at 5-6. However, we note that
    this issue is moot because the application WJZD petitioned to deny
    was ultimately dismissed by staff on other grounds. *See 2002
    Biennial Review Order,* 18 FCC Rcd at 13813, ¶ 498 ("Petitions ...
    that contest pending applications solely on grounds of competition
    pursuant to the interim policy will be dismissed as moot."); *see
    also* Letter from Peter H. Doyle, Chief, Audio Division, Media
    Bureau, FCC, to WJZD, c/o Dennis J. Kelly, Esq. *at* 2, 5-6, DA
    05-1537 (May 26, 2005) (noting that WJZD petitioned to deny WQYZ's
    Assignment Application on February 6, 2003, but that Commission
    staff dismissed WQYZ's application on Nov. 18, 2003 and, in a
    subsequent filing, explicitly addressed WJZD's objections to WQYZ's
    new filing).

[^437]: 47 C.F.R. § 73.658(*g*).

[^438]: *2002 Biennial Review Order,* 18 FCC Rcd at 13847-58, ¶¶
    592-621.

[^439]: *Id.* at 13850-55, ¶¶ 600-10. A strategic group refers to a
    cluster of independent firms within an industry that pursue similar
    business strategies. For example, the top four networks supply their
    affiliated local stations with programming intended to attract mass
    audiences and advertisers that want to reach such large, nationwide
    audiences. By contrast, the emerging networks target more
    specialized, niche audiences similar to cable television networks.
    *Amendment of Section 73.658(g) of the Commission's Rules -- The
    Dual Network Rule*, Report and Order, 16 FCC Rcd 11114, 11122-23 ¶
    20 (2001) ("*Dual Network Order*").

[^440]: *2002 Biennial Review Order,* 18 FCC Rcd at 13855, ¶ 611.

[^441]: Media General generally opposes justifying the Commission's
    ownership rules, including the dual network rule, on viewpoint
    diversity grounds, claiming that the Commission has never
    demonstrated a link between its structural ownership rules and
    viewpoint diversity. Media General Comments at 31-32. CCC objects
    that the Commission wrongly concluded that it could not be justified
    on program diversity or viewpoint diversity grounds. CCC Petition at
    9-10.

[^442]: *Further Notice*, 21 FCC Rcd at 8848, ¶ 33.

[^443]: Seven commenters support retaining or tightening the rule
    (AFL-CIO Comments at 58-62; AFTRA Comments at 24-25; Network
    Affiliated Stations Alliance ("NASA") Comments at 6-8; SAG Comments
    at 8, 31-34; Crudele Informal Comments at 1-3; Nelson Informal
    Comments at 1; NASA Reply Comments at 5-6). Three commenters seek to
    relax or eliminate the rule (CBS Reply at 19; Fox Comments at 25
    n.88; Media General Comments at 31-32).

[^444]: *See, e.g*., AFL-CIO Comments at 58-62; NASA Comments at 6-8;
    SAG Comments at 8, 31-34; Smith Comments at 4; Crudele Informal
    Comments at 1-3; Nelson Informal Comments at 1.

[^445]: SAG Comments at 8; Crudele Informal Comments at 1-2; Nelson
    Informal Comments at 1.

[^446]: SAG Comments at 31-33. Smith asks that the rule permit the top
    four networks to operate new or other smaller networks, such as
    NBC's Telemundo. Smith Comments at 4. The Commission modified the
    rule in that respect in 2001. *Dual Network Order*, 16 FCC Rcd at
    11114, ¶ 1. After the rule was modified, Viacom, the owner of CBS,
    was allowed to purchase UPN, and NBC was allowed to purchase
    Telemundo, the second-largest Spanish-language network in the United
    States.

[^447]: Nelson Informal Comments at 3.

[^448]: Crudele Informal Comments at 1-2.

[^449]: AFL-CIO Comments at 58-62; SAG Comments at 34; Crudele Informal
    Comments at 2-3.

[^450]: One party's suggestion that the Commission should consider
    restrictions on the common ownership of broadcast and cable networks
    by a single entity is unrelated to this proceeding. Desmond Comments
    at 8.

[^451]: Fox argues that the rule is unnecessary because antitrust review
    can address the Commission's concerns about competition in the
    national advertising and program production markets. As explained
    above, our concerns here are with competitive harms that would
    reduce program output, choices, quality, and innovation to the
    detriment of viewers, and with reduced affiliate power and
    influence. We do not think that antitrust enforcement would protect
    against these harms. CBS contends that the variety of broadcast and
    cable networks available to viewers makes the rule no longer
    necessary in the public interest. We continue to believe that the
    four largest broadcast networks serve a unique role in the
    electronic media and note that no other networks, cable or
    broadcast, reach nearly as large an audience as they do. Therefore,
    we do not believe that the advent of other networks makes this rule
    unnecessary.

[^452]: 47 C.F.R. § 73.3555(e)(2)(i); *2002 Biennial Review Order*, 18
    FCC Rcd at 13845-47, ¶¶ 585-91. In applying the national television
    ownership limit, national audience reach means the total number of
    television households in the Nielsen DMA in which the relevant
    stations are located divided by the total national television
    households as measured by DMA data at the time of a grant, transfer,
    or assignment of a license. Under the UHF discount, for purposes of
    calculating a station's national audience reach, UHF television
    stations are attributed with 50 percent of the television households
    in their DMA.

[^453]: *2002 Biennial Review Order*, 18 FCC Rcd at 13847, ¶ 591.

[^454]: *See* the 2004 Consolidated Appropriations Act. Section 629(1)
    amends Section 202(c) of the 1996 Act to direct the Commission to
    modify the national television ownership limit, contained in section
    73.3555 of the Commission's rules, to specify 39 percent as the
    maximum aggregate national audience reach of any single television
    station owner. *See* 47 U.S.C. § 202(c)(1). The 2004 Consolidated
    Appropriations Act also provides that Section 202(h) "does not apply
    to any rules relating to the 39% national audience limitation." 118
    Stat. at 100.

[^455]: *Prometheus*, 373 F.3d at 396-97. The court held that "Congress
    apparently intended to insulate the UHF discount from periodic
    review, a position that is consistent with our reading of the
    legislation as endorsing the almost 20-year-old regulatory
    definition of 'national audience reach' that provides for the UHF
    discount." *Id.* at 397.

[^456]: *Further Notice*, 18 FCC Rcd at 8849, ¶ 35.

[^457]: *Id.*

[^458]: *Prometheus*, 373 F.3d at 397.

[^459]: *Id.* (citing *Media Bureau Seeks Additional Comment on UHF
    Discount in Light of Recent Legislation Affecting National
    Television Ownership Cap, Public Notice,* DA 04-320 (rel. Feb. 19,
    2004), 69 Fed. Reg. 9216-17 (Feb. 27, 2004)).

[^460]: *Public Interest Obligations of TV Broadcast Licensees*, Notice
    of Inquiry, 14 FCC Rcd 21633 (1999).

[^461]: *See* Complaint Under the Data Quality Act of Free Press,
    Consumer Federation of America, & Consumers Union (Sept. 11, 2007)
    ("First Complaint"); Second Complaint Under the Data Quality Act and
    Motion for Extension of Time of Free Press, Consumer Federation of
    America, & Consumers Union (Nov. 9, 2007) ("Second Complaint").

[^462]: Pub. L. No. 106-554 (2001), codified at 44 U.S.C. § 3516 note.
    In relevant part, the DQA required OMB to issue guidelines that
    would "ensur\[e\] and maximize\[e\] the quality, objectivity,
    utility, and integrity of information (including statistical
    information) disseminated by Federal agencies." In furtherance of
    this statutory mandate, OMB thereafter issued guidelines which, in
    turn, required each federal agency to publish its own data quality
    guidelines. *See* 67 Fed. Reg. 8452 (2002). The Commission's
    guidelines are published in *Information Quality Guidelines*, 17 FCC
    Rcd 19890 (2002).

[^463]: *See* Ex Parte of Consumer Federation of America, Consumers
    Union, and Free Press at 38 (Nov. 14, 2007) (Nov. 14 Ex Parte); *see
    also Americans for Safe Access v. U.S. Dept. of Health & Human
    Services*, 2007 WL 2141289, slip op. at 3 (N.D. Cal. July 24, 2007)
    (courts "have unanimously and persuasively rejected a right of
    judicial review" under the DQA); *Salt Institute v. Thompson*, 345
    F. Supp. 2d 589, 601 (E.D. Va. 2004), *aff'd on other grounds sub
    nom. Salt Institute v. Leavitt*, 440 F.3d 156 (4th Cir. 2006)
    ("judicial review does not exist under the \[DQA\] because there is
    no private right of action"); *see generally Alexander v. Sandoval*,
    532 U.S. 275, 286 (2001) ("Like substantive federal law itself,
    private rights of action to enforce federal law must be created by
    Congress."); *Touche Ross & Co. v. Redington*, 442 U.S. 560, 578
    (1979) (availability of private right of action depends upon
    "statutory scheme that Congress enacted into law").

[^464]: *See* First Complaint at 10-12. A study is "reproducible" if
    "independent analysis of the original or supporting data using
    identical methods would generate similar analytic results, subject
    to an acceptable degree of imprecision or error." 67 Fed. Reg. at
    8460 ¶ V.10; 17 FCC Rcd at 19897, ¶ 13.

[^465]: *See* *Media Bureau Extends Filing Deadlines for Comments on
    Media Ownership Studies*, Public Notice, DA 07-4097 (rel. Sept. 28,
    2007).

[^466]: *See* CU Comments to the Media Ownership Studies; CU Reply to
    the Media Ownership Studies.

[^467]: The Center for Regulatory Effectiveness ("CRE") also filed
    comments concerning the DQA. Specifically, CRE suggested that the
    Commission should not rely on two media ownership studies because
    they do not meet the requirements of the DQA. *See* Comments and
    Data Quality Petition of the Center for Regulatory Effectiveness
    (Oct. 12, 2007) (regarding Media Ownership Study 8, "The Impact of
    the FCC's TV Duopoly Rule Relaxation on Minority and Women Owned
    Broadcast Stations 1999-2006"); Comments of The Center for
    Regulatory Effectiveness (Oct. 12, 2007) (regarding "Do Local Owners
    Deliver More Localism?  Some Evidence From Broadcast News"). Because
    we are not relying on either of those studies in this Order, we need
    not address the merits of CRE's comments.

[^468]: The filings by Free Press on this subject include the First
    Complaint, the Second Complaint, Comments to the Media Ownership
    Studies, and the November 14 Ex Parte. *See also* Letter by
    Congresspersons Maurice D. Hinchey, Bart Stupak, Tammy Baldwin,
    Louise M. Slaughter and David Price to FCC Chairman Kevin J. Martin,
    dated September 14, 2007 ("September 14 Congressional Letter");
    Motion for Issuance of a Further Notice, or in the Alternative, an
    Extension of Time to Comment on Studies, filed by the Office of
    Communication of the United Church of Christ, Inc. (Sept. 18, 2007);
    Comments on Media Ownership Studies 4 and 6, filed by the Center for
    Regulatory Effectiveness (Oct. 12, 2007).

[^469]: *See* OMB Final Information Quality Bulletin for Peer Review, 70
    Fed. Reg. 2664 (Jan. 14, 2005) ("OMB Bulletin").

[^470]: *Id*. at 70 Fed. Reg. introduction at 2666. A concern was raised
    in the September 14 Congressional Letter that the 10 media ownership
    studies should have been considered "highly influential scientific
    assessments" under the OMB Bulletin. The OMB Bulletin provides that
    a "scientific assessment" is a very specific, intensive subset of
    "scientific information" in the Bulletin, such as a comprehensive
    review or meta-analysis of the existing studies or scholarship in an
    entire field. OMB Bulletin at Sec. I.7. After review, the Commission
    concluded that none of the 10 studies was a comprehensive review of
    media ownership policy or a meta-analysis of previous studies, and
    therefore that none of the studies came within the Bulletin's
    definition of "highly influential scientific assessment." *See* OMB
    Peer Review Bulletin, Sec. III.1. The OMB Bulletin calls for
    additional steps in the peer review of "highly influential
    scientific assessments." These include sponsoring a public meeting
    for presentations to the peer reviewers before they complete their
    review. See *id.* at V.5.

[^471]: *See* 70 Fed. Reg. at 2667.

[^472]: *Id.* at Sec. XII ("This Bulletin is intended to improve the
    internal management of the executive branch, and is not intended to,
    and does not, create any right or benefit, substantive or
    procedural, enforceable at law or in equity\....").

[^473]: *See, e.g.,* First Complaint at 8.

[^474]: *See* *FCC Seeks Comment on Research Studies on Media
    Ownership*, Public Notice, DA 07-3470 (rel. July 31, 2007).

[^475]: The disclaimer states: "The findings and conclusions in this
    report are those of the author(s) and do not necessarily represent
    the views of the Federal Communications Commission." *See*
    http://www.fcc.gov/ownership/studies.html .

[^476]: *See* 47 C.F.R. § 1.1206. Free Press claims that the peer review
    reports on third-party quantitative studies were released too late
    for the authors of those studies to incorporate the suggestions into
    their comments during the formal comment period. Along similar
    lines, Free Press claims that because the Commission released
    revised versions and additional peer reviews of the 10 studies on
    the last day of the reply comment period the public was denied the
    opportunity to incorporate the revisions into their comments. *See*
    November 14 Ex Parte at 40. However, Free Press made a substantive
    and lengthy *ex parte* filing after the close of the formal comment
    period, illustrating the utility of the Commission's *ex parte*
    procedures. Although the comment period formally closed on November
    1, 2007, Free Press made a filing of nearly 2,500 pages on November
    14, 2007. *See* *id*.

[^477]: *See, e.g.*, Free Press Complaint at 16-17.

[^478]: *Id*. at 70 Fed. Reg., introduction at 2665. *See also* Reply
    Comments on Media Ownership Studies at 8-9.

[^479]: *See* http://www.fcc.gov/ownership/studies.html.

[^480]: *See* http://www.fcc.gov/ownership/studies.html, Media Ownership
    Study 4 and Media Ownership Study 6.

[^481]: For these reasons, Free Press's claim that the Commission
    deviated from peer review and other data quality guidelines in
    gathering evidence for the record, including the 10 studies
    requested by the FCC, so that the record evidence cannot be
    considered "substantial" under the Administrative Procedures Act, is
    completely without merit. *See* Free Press Nov. 14 Ex Parte at 39.

[^482]: *See*, *e*.*g*., First Complaint at 17-19; Second Complaint at
    5.

[^483]: *See also* NAA Reply to Media Ownership Studies at 4.

[^484]: *See* 5 U.S.C. § 604. The RFA, *see* 5 U.S.C. § 601 et. seq.,
    has been amended by the Small Business Regulatory Enforcement
    Fairness Act of 1996 ("SBREFA"), Pub. L. No. 104-121, Title II, 110
    Stat. 847 (1996). The SBREFA was enacted as Title II of the Contract
    With America Advancement Act of 1996 ("CWAAA").

[^485]: 5 U.S.C. § 801(a)(1)(A).

[^486]: *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601-- 612, has
    been amended by the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857
    (1996).

[^487]: *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, Cross-Ownership
    of Broadcast Stations and Newspapers, Rules and Policies Concerning
    Multiple Ownership of Broadcast Stations in Local Markets,
    Definition of Radio Markets,* 17 FCC Rcd 18503, 18558 App. A (2002).

[^488]: *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*,
    Further Notice of Proposed Rule Making, 21 FCC Rcd 8834 (2006).

[^489]: *See* 5 U.S.C. § 604.

[^490]: The Commission's broadcast ownership rules are contained in 47
    C.F.R. § 73.3555. For the local television multiple ownership rule,
    the radio/television cross-ownership rule, and the
    newspaper/broadcast cross-ownership rule that are currently in
    effect, *see* 47 C.F.R. § 73.3555(b)-(d) (2002); for the local radio
    ownership rule, *see* 47 C.F.R. § 73.3555(a) (2006). The dual
    network rule is contained in 47 C.F.R. § 73.658(g) (2006).

[^491]: *See* Telecommunications Act of 1996, Pub. L. No. 104-104,
    § 202(h), 110 Stat. at 111-112 *and* Consolidated Appropriations Act
    of 2004, Pub. L. No. 108-199, § 629, 118 Stat. 100 (2004) (codified
    at 47 U.S.C. § 303 note (2006)).

[^492]: In 2004, Congress revised the then biennial review requirement
    to require such reviews quadrennially. Congress also eliminated the
    national television multiple ownership rule from the quadrennial
    review requirement. *See* Consolidated Appropriations Act, 2004,
    Pub. L. No. 108-199, § 629, 118 Stat. 100 (2004) (codified at 47
    U.S.C. § 303 note (2006)).

[^493]: Telecommunications Act of 1996, Pub. L. No. 104-104, § 202(h),
    110 Stat. 56, 111-12 (1996).

[^494]: 5 U.S.C. § 603(b)(3).

[^495]: *Id*. § 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 SBA
    and after opportunity for public comment, establishes one or more
    definitions of the term where appropriate to the activities of the
    agency and publishes the definition(s) in the Federal Register."

[^496]: *Id.*

[^497]: 15 U.S.C. § 632.

[^498]: 2007 NAICS Code 515120. This category description states: "This
    industry comprises establishments primarily engaged in broadcasting
    images together with sound. These establishments operate television
    broadcasting studios and facilities for the programming and
    transmission of programs to the public". U.S. Census Bureau 2007
    NAICS Definitions, Television Broadcasting.

[^499]: "\[Business concerns\] are affiliates of each other when one
    business concern controls or has the power to control the other or a
    third party or parties controls or has the power to control both."
    13 C.F.R. § 121.103(a)(1).

[^500]: *See* 2007 NAICS code 515112.

[^501]: *Id.*

[^502]: "\[Business concerns\] are affiliates of each other when one
    business concern controls or has the power to control the other or a
    third party or parties controls or has the power to control both."
    13 C.F.R. § 121.103(a)(1).

[^503]: 13 C.F.R. § 121.201; NAICS code 511110.

[^504]: U.S. Census Bureau, 2002 Economic Census, Subject Series:
    Information, "Establishment and Firm Size (Including Legal Form of
    Organization)," Table 5, NAICS code 511110 (issued Nov. 2005).

[^505]: 5 U.S.C. § 603 (c).

[^506]: 47 C.F.R. § 73.3555(c) (2002).

[^507]: 47 C.F.R. § 73.3555(b) (2002).

[^508]: *See* 1996 Act § 202(b); 47 C.F.R. § 73.3555(a).

[^509]: *Further Notice*, 21 FCC Rcd at 8848 ¶ 33.

[^510]: AFL-CIO Comments at 58-62; SAG Comments at 34; Crudele Informal
    Comments at 2-3.

[^511]: One party's suggestion that the Commission should consider
    restrictions on the common ownership of broadcast and cable networks
    by a single entity is unrelated to the dual network rule. Desmond
    Comments at 8.

[^512]: Fox argues that the rule is unnecessary because antitrust review
    can address the Commission's concerns about competition in the
    national advertising and program production markets. As explained
    above, our concerns here are with competitive harms that would
    reduce program output, choices, quality, and innovation, to the
    detriment of viewers, and with reduced affiliate power and
    influence. We do not think that antitrust enforcement would protect
    against these harms. CBS contends that the variety of broadcast and
    cable networks available to viewers makes the rule no longer
    necessary in the public interest. We continue to believe that the
    four largest broadcast networks continue to serve a unique role in
    the electronic media and note that no other networks, cable or
    broadcast, reach nearly as large an audience as they do. Therefore,
    we do not believe that the advent of other networks makes this rule
    unnecessary.

[^513]: *Prometheus*, 373 F.3d at 397.

[^514]: *Public Interest Obligations of TV Broadcast Licensees*, Notice
    of Inquiry, 14 FCC Rcd 21633 (1999).

[^515]: *See* 5 U.S.C. § 801(a)(1)(A).

[^516]: *See* 5 U.S.C. § 604 (b).

[^517]: *Red Lion Broadcasting Co. v. F.C.C.,* 395 U.S. 367, 390; 89
    S.Ct 1794, 1807 (1969).

[^518]: *See Further Comments Of Consumers Union, Consumer Federation Of
    America And Free Press at 111 (Oct. 22, 2007) (noting that these
    findings are from an FCC-commissioned survey of media usage by
    Nielsen Media Research, Inc.) (also noting that while a full 46
    percent of respondents use TV, radio and/or newspapers but no
    alternative media, a mere 1 percent of respondents use cable or the
    Internet, but none of the traditional media).*

[^519]: *See Further Comments of Consumers Union, Consumer Federation of
    America and Free Press at 48 (Dec. 11, 2007).*

[^520]: News Release, FCC, *FCC Adopts 13^th^ Annual Report to Congress
    on Video Competition and Notice of Inquiry for the 14^th^ Annual
    Report* 4 (Nov. 27, 2007).