March 12, 2001

Marissa G. Repp, Esq.

Hogan & Hartson L.L.P.

555 13^th^ Street, N.W.

Washington, D.C. 20004-1109

Thomas Schattenfield, Esq.

Arent Fox Kinter Plotkin & Kahn PLLC

1050 Connecticut Ave., N.W., Suite 600

Washington, D.C. 20036-5339

Stephen Farrand, Esq.

Farrand, Cooper & Bruiners

235 Montgomery Street, Suite 1035

San Francisco, CA 94104

Gregory L. Masters, Esq.

Wiley, Rein & Fielding

1776 K Street, N.W.

Washington, D.C. 20006

> In re: KBKO(AM), Santa Barbara, CA, Fac. ID 61712

KSPE-FM, Ellwood, California, Fac. ID 61058

File Nos. BAL/BALH-19981028EE-EF

Assignment of Licenses

Dear Counsel:

The staff has under consideration: (1) the above captioned applications
proposing to assign the licenses of stations KBKO(AM), Santa Barbara,
California, and KSPE-FM, Ellwood, California, from Spectacular
Broadcasting, Inc. ("Spectacular") to Citicasters Co. ("Citicasters");
(2) U.S. Department of Justice ("DoJ") Comment filed in Response to a
November 25, 1998 Commission Public Notice ("*Public Notice*") regarding
the applications ("*DoJ Comment*"); (3) a Petition to Deny the
Applications filed by Pacific Coast Communications, L.L.C. ("Pacific
Coast")[^1]; (4) comments from the parties in response to the Public
Notice; (5) a January 11, 2001 Motion by DoJ to Withdraw the DoJ Comment
(*"DoJ Withdrawal"*); and (5) additional responsive pleadings.[^2] For
the reasons set forth below, the Petition to Deny is dismissed as moot
and the applications are granted.

*Background.* Citicasters is a wholly-owned indirect subsidiary of Clear
Channel Communications, Inc.,[^3] and is currently the licensee of four
stations licensed to Santa Barbara, two stations licensed to Santa
Maria, two stations licensed to small communities near Santa Barbara,
and three stations licensed to Los Angeles.[^4] Citicasters is operating
the two stations it here proposes to acquire pursuant to a local
marketing agreement, and its proposed acquisition of these stations is
consistent with the numerical limits in our radio local ownership rules,
47 C.F.R. §73.3555.[^5] However, the Commission "flagged" the Public
Notice announcing receipt of the applications on the grounds that the
proposed transaction might raise concerns about competition and
diversity.[^6]

In response to the Public Notice, Pacific Coast filed a Petition to Deny
the assignment applications, alleging anti-competitive effects on local
advertisers and decreased outlet, service and viewpoint diversity in the
Santa Barbara market. Specifically, Pacific Coast stated that, after the
proposed transaction, Citicasters would control an estimated 56.86% of
the local advertising revenue in the Arbitron-defined metro market for
Santa Barbara.[^7] Our independent analysis indicates that Citicasters
would control 51.6% of the advertising revenue in the Santa Barbara
market if the proposed assignment is approved.

The Department of Justice opened an investigation into the proposed
transaction and filed a Comment in this proceeding because it was
"concerned about potential competitive problems that might arise from
the proposed acquisition in the Santa Barbara, California, radio
market."[^8] However, after Citicasters complied with DoJ's "extensive
request for documents and information,"[^9] the Department withdrew its
Comment.[^10]

*Discussion.* We note initially that on January 6, 2000, Pacific Coast
filed an application to assign KRUZ(FM), the only Santa Barbara station
licensed to it, to Cumulus Licensing Corp. ("Cumulus").[^11] The
Commission approved that assignment and it was consummated on April 12,
2000.[^12] Because Pacific Coast is no longer the licensee of KRUZ(FM),
the petition to deny is dismissed as moot. *See Friends of the Earth vs.
Laidlaw Environmental Svcs. (TOC), Inc.*, 120 S.Ct. 693 (2000).
Nonetheless, we have examined the arguments Pacific Coast raised
concerning the potential competitive impact of the proposed assignment
to ensure that approval would be consistent with the public interest.
*See* 47 U.S.C. §309(d); *Stockholders of CBS, Inc.*, 11 FCC Rcd 3733,
3741 (1995), *citing*, *Booth American Co.*, 58 FCC 2d 553, 554 (1976).

The 51.6% share of advertising revenue that Citicasters' stations will
garner, while not insignificant, is consistent with levels previously
approved in other Commission cases. *See NewCity Communications, Inc.*,
12 FCC Rcd 3929 (1997) (approving transaction that would result in
proposed assignee controlling 52.4% of radio advertising revenues in the
market). Further, the combined advertising revenue of Citicasters and
Cumulus, which, upon consummation of the assignment of KKSB(FM) and
KMGQ(FM)[^13] will have the next highest radio revenue in the market,
does not, at 81.6%, pose disqualifying market concentration concerns
under our existing cases. *See AMFM, Inc.*, 15 FCC Rcd at 16070
(approving transactions in Akron, Ohio and Cedar Rapids, Iowa, where the
post-merger advertising share of the top two groups in the market would
be 82.6% and 80.8%, respectively). We also find relevant that, in
addition to Citicasters, there will remain five independent station
licensees, who own an additional seven stations in the market. Finally,
we find relevant and probative in approving this assignment, DoJ's
decision, after "obtain\[ing\] additional information" regarding the
transaction and after "further evaluation," to withdraw its
Comment.[^14]

Based upon the foregoing, we find no substantial and material question
of fact as to the effect of the proposed transaction on competition and
diversity that would warrant further inquiry. In addition, we have
reviewed the above-captioned applications and find that Citicasters is
fully qualified and that grant of the applications is consistent with
the public interest.

Accordingly, IT IS ORDERED, That, the Motion to Withdraw the U.S.
Department of Justice Comment is HEREBY GRANTED, and the Comment filed
by the U.S. Department of Justice IS DISMISSED, the petition to deny
filed by Pacific Coast Communications, L.L.C., IS DISMISSED; and the
applications to assign the licenses for stations KBKO(AM), Santa
Barbara, California, and KSPE-FM, Ellwood, California, from Spectacular
Broadcasting, Inc. to Citicasters Co. (File Nos.
BAL/BALH-19981028EE-EF)ARE GRANTED.

Sincerely,

> Linda Blair

Chief, Audio Services Division

Mass Media Bureau

[^1]: At the time the Petition to Deny was filed, Pacific Coast was the
    licensee of station KRUZ(FM), Santa Barbara.

[^2]: These documents include: Citicasters' April 16, 1999 Response to
    Petition to Deny and Comment in Response to Public Notice
    ("*Citicasters' Response*"); and Pacific Coast's May 4, 1999 Reply
    to Citicasters' Response to Petition to Deny and Comment in Response
    to Public Notice.

[^3]: At the time the instant applications were filed, Citicasters was a
    wholly owned subsidiary of Jacor Communications, Inc. ("Jacor"). On
    April 29, 1999, the Mass Media Bureau approved the transfer of
    Jacor's stock from its shareholders to Clear Channel Communications,
    Inc. *See, Shareholders of Jacor Communications, Inc.* 14 FCC Rcd
    6867 (MMB 1999) ("*Jacor Communications"*).

[^4]: The stations are: KIST-FM, KTMS(AM), KIST(AM), and KTYD(FM), Santa
    Barbara, CA; KSNI-FM and KXFM(FM), Santa Maria; KACD(AM), Thousand
    Oaks, CA; KSBL(FM), Carpinteria, CA; and KFI(AM), KIIS-FM and
    KXTA(AM), Los Angeles, CA. There is no principal community contour
    overlap between KIIS-FM and KXTA(AM) and KBKO(AM) and KSPE-FM;
    therefore, they are not relevant to any determination concerning
    Citicasters' compliance with the Commission's multiple ownership
    rules. *See* n.5, *infra.*

[^5]: Citicasters' multiple ownership showing indicates that, using the
    Commission's current definition of "radio market," there are 5
    separate radio markets created by the transaction. Market 1 consists
    of 48 stations, and Citicasters would own 3 of the stations (3 FM);
    Market 2 consists of 38 radio stations, and Citicasters would own 3
    of the stations (3 FM); Market 3 consists of 37 radio stations, and
    Citicasters would own 7 of the stations (3 AM 4 FM); Market 4
    consists of 71 radio stations, and Citicasters would own 4 of the
    stations (3 AM 1 FM); and, Market 5 consists of 71 stations, and
    Citicasters would own 3 of the stations (3 AM). *See Notice of
    Proposed Rule Making, In the Matter of Definition of Radio Markets*,
    MM Docket No. 00-244, FCC 00-427 (December 13, 2000). A single
    licensee may therefore own up to 8 stations in Markets 1, 4, and 5
    (not more than 5 of which are in the same service), and 7 stations
    in Markets 2 and 3 (with no more than 4 stations in the same
    service). *See* Telecommunications Act of 1996, Pub. L. No. 104-104,
    110 Stat. 56 (1996), §202(b)(1) *codified as* 47 C.F.R.
    §73.3555(a)(1). As demonstrated, Citicasters' proposed ownership of
    KBKO(AM) and KSPE-FM complies with the total radio and same service
    restrictions for each identified radio market.

[^6]: Public Notice, Report No. 24375 (November 25, 1998). In public
    notices announcing the filing of radio broadcast sales applications,
    the Commission currently identifies for further competitive review
    ("flags") those applications that would result in one entity
    controlling 50% or more of the advertising revenues in the relevant
    market or two entities controlling 70% or more of the advertising
    revenues in that market. *See Shareholders of AMFM, Inc.,* 15 FCC
    Rcd 16062, 16070 (2000) ("*AMFM, Inc.*"). The language used in such
    public notices is: " Based on our initial analysis of this
    application and other publicly available information, including
    advertising revenue share data from the BIA database, the Commission
    intends to conduct additional analysis of the ownership
    concentration in the relevant market. This analysis is undertaken
    pursuant to the Commission's obligation under Section 310(d) of the
    Communications Act, 47 U.S.C. Section 310(d), to grant an
    application to transfer or assign a broadcast license or permit only
    if so doing served the public interest, convenience and necessity.
    We request that anyone interested in filing a response to this
    notice specifically address the issue of concentration and its
    effect on competition and diversity in the broadcast markets at
    issue and serve the response on the parties."

[^7]: *See* Petition to Deny at 3. Pacific Coast's revenue percentages
    are based on a December 28, 1998 Affidavit of Howard Grafman, a
    principal in Pacific Coast, which is included in the Petition to
    Deny as Appendix 1.

[^8]: *See* *DoJ Withdrawal*.

[^9]: *See Citicasters' Response* at 3.

[^10]: *DoJ Withdrawal* at 2.

[^11]: See File No. 20000106AAA.

[^12]: By separate action today, the Mass Media Bureau is granting an
    application assigning the licenses for KKSB(FM), Goleta, California,
    and KMGQ(FM), Santa Barbara, California, from Engels Enterprises,
    Inc. to Cumulus. (File Nos. BALH-20000808ABU-ABV). Our decision in
    the instant case takes into consideration our action in granting
    those applications.

[^13]: See n.12, *supra*.

[^14]: *DoJ Withdrawal.*