**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matter of )

)

Review of the Commission's Regulations ) MM Docket No. 91-221

Governing Television Broadcasting )

)

Television Satellite Stations Review of ) MM Docket No. 87-8

Policy and Rules )

**MEMORANDUM OPINION AND SECOND ORDER ON RECONSIDERATION**

Adopted: December 7, 2000 Released: January 19, 2001

By the Commission: Commissioner Furchtgott-Roth dissenting and issuing a
statement.

**I. INTRODUCTION**

1.  In this order, we resolve various petitions for reconsideration of
    the *Report and Order* in this proceeding,[^1] in which we amended
    our local TV multiple ownership rule and the radio/TV
    cross-ownership rule, and adopted grandfathering policies for
    certain television local marketing agreements and radio/TV
    combinations. We also clarify certain aspects of the *Report and
    Order* on our own motion.

**II. BACKGROUND**

2.  This proceeding is a broad and complex one involving several of the
    Commission's policies and rules on the cross-ownership and multiple
    ownership of broadcast stations. It began in 1991, and involved a
    series of notices, the most recent of which was guided by the
    Telecommunications Act of 1996.[^2] In the proceeding, the
    Commission has attempted to balance two of its most fundamental
    goals in broadcast ownership -- fostering competition in the markets
    in which broadcast stations compete, and preserving a diversity of
    information sources, especially at the local level -- with the
    efficiencies of common ownership and increased competition in the
    media marketplace. Harmonizing these concerns in the *Report and
    Order*, we amended the local TV multiple ownership rule, the
    radio/TV cross-ownership rule, and our standards for presumptive
    waiver of these rules. We also grandfathered certain television
    local marketing agreements (LMAs) that we determined were
    attributable ownership interests in a companion proceeding,[^3] as
    well as certain radio/TV combinations that were formed pursuant to
    waivers conditioned on the outcome of this proceeding.

3.  The Commission's previous local television multiple ownership rule,
    or "TV duopoly rule," prohibited common ownership of two TV stations
    when the Grade B contours of the stations overlapped. Our amended
    rule allows a party to own TV stations licensed to communities in
    different Designated Market Areas (DMAs) without regard to contour
    overlap. Our rule also permits a party to own two TV stations in the
    same DMA, if at least one of the stations is not among the four
    highest-ranked stations in the market, and at least eight
    independently owned and operating full-power broadcast TV stations
    would remain in the DMA after the proposed combination. In addition,
    we presume it is in the public interest to waive the amended rule if
    one of the stations in a proposed combination is a failed or failing
    station, or is not yet constructed. Once formed, whether pursuant to
    the amended duopoly rule or waiver standard, a combination may not
    be transferred unless it meets the rule or waiver standard in effect
    at the time of transfer.

4.  The Commission's previous radio/TV cross-ownership rule generally
    prohibited common ownership of a radio and TV station in the same
    geographic area. Our amended rule permits a party to own, in the
    same geographic area, one TV station (or two TV stations, if
    permitted by the duopoly rule) and: (a) up to six radio stations, if
    at least twenty independently owned media "voices" would remain in
    the market post-combination (or one TV station and seven radio
    stations in circumstances where a party could own two TV stations
    and six radio stations); (b) up to four radio stations, if at least
    ten independently owned media voices would remain in the market
    post-combination; and (c) one radio station, without regard to the
    number of independently owned media voices that would remain in the
    market post-combination. For purposes of the new rule, we count the
    following as media voices in the market: (a) radio stations, (b) TV
    stations, (c) cable systems, as one entity, if a cable system is
    generally available in the DMA, and (d) certain daily newspapers. We
    also presume it is in the public interest to waive the amended
    radio/TV cross-ownership rule if one of the stations in a proposed
    combination is a failed station. Once formed, whether pursuant to
    the amended radio/TV cross-ownership rule or waiver standard, a
    combination may not be transferred unless it satisfies the rule or
    waiver standard in effect at the time of transfer.

5.  In our companion *Attribution Report and Order*, we concluded that a
    same-market LMA constitutes an attributable ownership interest for
    the brokering station if that station brokers more than 15% of the
    brokered station's broadcast hours per week.[^4] Consistent with our
    proposal in the *Second Further Notice*, in the *Report and Order*
    we grandfathered LMAs that do not comply with our TV duopoly rule,
    if entered into prior to the adoption date of the *Second Further
    Notice*, *i.e.*, November 5, 1996. We grandfathered these LMAs
    through the conclusion of our 2004 biennial review.[^5] We required
    LMAs entered into on or after the adoption date of the *Second
    Further Notice* to comply with our new TV duopoly rule within two
    years of the adoption date of the *Report and Order*. We also
    grandfathered certain radio/TV combinations formed pursuant to
    waivers that were conditioned on the outcome of this proceeding, if
    the waivers were applied for on or before July 29, 1999, and
    ultimately approved by the Commission.

6.  We have received fourteen petitions for reconsideration of the
    *Report and Order*.[^6] These petitions seek reconsideration of both
    the TV duopoly rule and the radio/TV cross-ownership rule, as well
    as our grandfathering policies for television LMAs and waivers of
    the radio/TV cross-ownership rule that were conditioned on the
    outcome of this proceeding. Below, we address these petitions for
    reconsideration, and clarify on our own motion certain aspects of
    the *Report and Order*.

**III. DISCUSSION**

**A. Local Television Multiple Ownership Rule**

7.  Petitioners seek reconsideration of virtually all aspects of our
    amended TV duopoly rule -- its geographic scope, the requirement
    that one of the stations not be among the four highest-ranked
    stations in the DMA, the requirement that eight independently owned
    stations remain in the DMA post-combination, and our presumptive
    waiver policies. We consider the petitions below.

**1. Geographic Scope**

8.  [Background]{.underline}. As indicated above, we concluded in the
    *Report and Order* to modify our rule that disallowed common
    ownership of two TV stations if their Grade B contours overlapped.
    Instead, we decided to permit common ownership of two TV stations if
    they are licensed to communities in different DMAs.[^7]

9.  [Discussion]{.underline}. UCC asks us to reconsider our
    decision.[^8] UCC contends that DMAs can change and be manipulated
    by private parties since they are not controlled by the Commission,
    and may not always be based on viewership patterns. Commenters have
    already fully debated the issue of the geographic scope of the
    duopoly rule,[^9] and we considered and resolved this issue in the
    *Report and Order.*[^10] We explained that DMAs reflect actual
    viewing patterns, and define the "market" in a manner that is widely
    accepted and used by the advertising and broadcasting
    industries.[^11] Nielsen Media Research collects viewing data from
    TV households four times a year, assigns a particular county to a
    DMA if a majority of the viewing in that county is of stations
    located in the DMA, and then uses the viewing data to compile
    DMA-based ratings for TV shows. Advertisers use this data to make
    advertising decisions, and broadcasters use this data to make
    programming decisions. The DMA therefore reflects viewership
    patterns, and serves as the proper basis by which to define the
    geographic area for our TV duopoly rule. We recognize that a
    broadcast station may have an incentive to manipulate its DMA
    assignment in order to combine two stations, but Nielsen Media
    Research defines DMAs, and we believe that advertisers and competing
    broadcasters that rely on DMAs to make advertising and programming
    decisions have an incentive to ensure that DMA assignments are
    accurate and reliable. This does not mean that DMA assignments will
    not change, but will do so in response to marketplace changes. We
    believe this is a desirable feature of our new rule. Accordingly, we
    reaffirm our decision to allow two broadcast TV stations to combine
    if they are located in different DMAs, without regard to contour
    overlap.[^12]

**2. Market Rank/Eight Voice Test**

10. [Background]{.underline}. As indicated above, our new TV duopoly
    rule permits one party to own two stations within the same DMA, if
    two conditions are satisfied. At least one of the stations must not
    be ranked among the top four stations in the DMA, as determined by
    all-day audience share at the time the application to combine is
    filed, and at least eight independently owned and operating
    full-power broadcast TV stations must remain post-combination.

11. [Discussion]{.underline}. *Market Rank*. Sinclair asks us to
    reconsider the requirement that at least one of the TV stations in a
    proposed duopoly not be among the top four stations in the DMA.[^13]
    Sinclair argues that the requirement "makes little sense because,
    pragmatically, if a single entity owns two of the top stations in a
    market, it will not program them with the same material.
    Furthermore, network affiliates have little ability to make
    substantial changes to network programming."[^14] Sinclair thus
    appears to argue that the requirement does not promote programming
    diversity. We are not persuaded that common ownership will have no
    adverse effect on program diversity, as Sinclair suggests. Moreover,
    Sinclair overlooks that we seek to promote both competition and
    diversity with the TV duopoly rule, as we do with all of our
    multiple ownership rules.[^15] As we explained in the *Report and
    Order*, "\[t\]he 'top four ranked station' component of this
    standard is designed to ensure that the largest stations in the
    market do not combine and create potential competition concerns.
    These stations generally have a large share of the audience and
    advertising market in their area, and requiring them to operate
    independently will promote competition."[^16] Because larger
    stations generally produce local news while smaller stations often
    do not, we also explained that the requirement that both stations
    not be among the top four ranked stations did not harm, and in fact
    furthered, our diversity goal, if the combination made it possible
    for the smaller station to produce local news. We thus believe that
    our decision to require that at least one of the stations in a
    proposed duopoly not be among the top four ranked stations in the
    DMA properly harmonizes our competition and diversity goals, and we
    reject Sinclair's position to the contrary.

12. We also clarify, on our own motion, how to resolve a tie for market
    rank. Nielsen Media Research often provides audience share in whole
    numbers, with the result that two stations have the same audience
    share. In such cases, we will require duopoly applicants to submit
    more detailed information on audience share (*i.e*., estimates with
    a sufficient number of decimal places) to resolve the tie.

13. *Number of Broadcast TV Stations*. A number of petitioners ask us to
    reconsider our decision to require that eight independently owned
    and operating broadcast TV voices remain in the DMA post-merger.
    Petitioners generally contend that we did not sufficiently explain
    our rationale for selecting the number eight,[^17] and that the
    requirement does not allow combinations in smaller markets, where
    broadcasters may be most in danger of failing unless they are
    permitted to form duopolies and realize the efficiencies associated
    with combinations.[^18] No petitioner argues that we adopt a
    particular number other than eight, however.

14. We reaffirm our decision to require that eight broadcast TV stations
    remain in the market post-combination.[^19] We explained our
    competition and diversity goals in some detail in the *Report and
    Order*,[^20] and stated that the requirement that eight TV broadcast
    stations remain in the DMA post-merger "strikes what we believe to
    be an appropriate balance between permitting stations to take
    advantage of the efficiencies of television duopolies while at the
    same time ensuring a robust level of diversity."[^21] As we stated
    in the *Report and Order*, "\[o\]ur decision today is an exercise in
    line drawing -- perennially one of the most difficult yet inevitable
    challenges facing a government agency."[^22] We continue to believe
    that drawing the line at eight reasonably balances the competing
    interests at stake.

15. We reject the argument that our requirement that eight broadcast TV
    stations remain in the DMA post-combination inappropriately or
    unfairly disadvantages stations in smaller markets because of an
    alleged impossibility of sustaining a full complement of stations in
    such markets due to economic realities.[^23] As discussed in the
    *Report and Order*, we recognize that stations in smaller markets
    will not be able to take advantage of our new rule. We explained,
    however, that "we believe this is appropriate given that these
    markets start with fewer broadcast outlets, and thus a lower
    potential for providing robust diversity to viewers in such markets.
    . . . \[I\]t is in these small markets that consolidation of
    broadcast television ownership could most undermine our competition
    and diversity goals."[^24] Petitioners' concerns that stations in
    smaller markets are in danger of failing is addressed by our waiver
    policies, under which we presume it is in the public interest to
    waive the duopoly rule if a station fails or is in danger of
    failing.[^25] As we explained in the *Report and Order*, "the three
    waiver standards we adopt today . . . will, consistent with our
    competition and diversity goals, provide relief in a more tailored
    fashion for stations in smaller markets that are unable to compete
    effectively."[^26] Because we have concluded that a diversity
    "floor" of eight stations serves our competition and diversity
    goals, we likewise decline to adopt the sliding scale proposed by
    UCC, which would require a greater number of broadcast stations in
    DMAs with greater populations.[^27] We do not believe that certain
    populations should have more or less competition and diversity than
    other populations.

16. While we generally affirm the use of DMAs in determining the number
    of stations in a particular market, we will modify our decision in
    one respect.[^28] Under the current rule, all independently owned
    and operating, full-power TV stations in a DMA (whether commercial
    or non-commercial) count toward the eight-station minimum. As UCC
    points out, however, there are some geographically large DMAs where
    counting every station in the DMA may produce results at odds with
    our goal of establishing a minimum level of independent voices in a
    particular community.[^29] For instance, the Miami-Ft. Lauderdale
    DMA contains a total of 14 independent full-power TV stations. But
    two of those stations are licensed to Key West, Florida,
    approximately 120 miles from Miami. Because of the distance, neither
    of the Key West stations has a Grade B signal contour that overlaps
    with the Grade B contours of any of the other stations in the
    market, all of which transmit from or near Miami. In a situation
    such as this, we do not believe that the Key West stations
    constitute an independent "voice" to Miami viewers, nor do the Miami
    stations constitute an independent "voice" to viewers in Key West.
    However, under our current rules, a single owner could own the only
    two TV stations serving Key West by relying on the 12 stations in
    Miami, even though a viewer in Key West could not receive any of the
    Miami signals. Similarly, a potential combination in the Miami area
    could count the Key West stations as "voices" in the Miami market
    even though neither of those stations reaches the Miami area.

17. We therefore will modify our duopoly rule as follows. In counting
    the number of independently owned and operating, full-power stations
    in a market for purposes of our rule, we will count only those
    stations whose Grade B signal contour overlaps with the Grade B
    contour of at least one of the stations in the proposed
    combination.[^30] This new rule will help strengthen our eight-voice
    diversity floor in geographically large DMAs.

18. This new rule is consistent with our overall duopoly rule, which has
    always permitted common ownership of stations with no Grade B
    overlap. Indeed, in the *Report and Order*, we held that even though
    we were moving to a duopoly prohibition based on DMAs rather than
    contour overlap, we would still permit combinations between stations
    in the same DMA, regardless of the number of voices available, so
    long as there was no Grade B overlap.[^31] Where there was no Grade
    B overlap, we found that permitting stations to combine would not
    threaten our goal of preserving a minimum level of competition and
    diversity. Having reached that conclusion, we believe that its
    converse is also valid: if two stations with no Grade B overlap have
    so little impact on competition and diversity in the other's market
    that they should be permitted to combine, then neither should they
    be able to rely on the other as a source of competition and
    diversity in proposing to combine with a third station.

19. Finally, in the interest of consistency, we will adopt a similar
    modification of our one-to-a-market rule.[^32] Currently, we count
    all independently owned and operating, full-power TV stations in the
    same DMA as the TV station at issue as additional "voices" in the
    market. We will modify that rule to provide that only those
    independently owned and operating, full-power TV stations in the
    same DMA as the TV station(s) at issue, *and that have a Grade B
    signal contour that overlaps with the Grade B contour of the TV
    station(s) at issue*, will count as additional "voices" in the
    market.

20. *Exclusion of Media Other than Broadcast TV Stations*. Many
    commenters ask that if we continue to require that eight
    independently owned "voices" remain in the DMA post-combination, we
    count a host of other media, or at a minimum cable systems,
    newspapers, and radio stations, consistent with our modified
    radio/TV cross-ownership rule.[^33] On the other hand, UCC asks us
    not to count noncommercial stations.[^34]

21. We first reaffirm that we will count both commercial and
    noncommercial operating TV stations in the DMA. Although, as UCC
    argues, noncommercial stations do not compete for advertising
    dollars, they do contribute to diversity. We recognize, as UCC
    points out, that the signal of noncommercial stations may not reach
    all over-the-air viewers in a DMA. The same may be said, however, of
    *any* broadcast TV station in a DMA. In addition, this argument
    overlooks the possible extension of the broadcast TV station's
    signal through carriage by a multichannel video programming
    distributor, such as cable. Indeed, in modifying our duopoly rule,
    we explained that "DMAs reflect the fact that a station's audience
    reach, and hence its 'local market,' is not necessarily coextensive
    with the area of its broadcast signal coverage. For example, a
    station's over-the-air reach can be extended by carriage on cable
    systems and other multichannel delivery systems, as well as through
    such means as satellite and translator stations."[^35] We thus
    believe that any categorical exclusion of noncommercial stations is
    unwarranted.

22. We also reaffirm our decision *not* to count media other than
    broadcast TV stations. The issue of whether to count other media
    entities for purposes of the TV duopoly rule has been debated
    already,[^36] and was resolved in the *Report and Order*.[^37] We
    explained that we had decided to count only broadcast TV stations
    because these stations are the primary source of news and
    information for a majority of Americans, and also because the record
    was not clear on the extent to which other media are substitutes for
    broadcast TV.[^38] We reaffirm both our decision to count only
    broadcast TV stations, and our rationale for doing so. Broadcast TV
    has the power to influence and persuade unmatched by other media. In
    terms of our diversity goal, we emphasize that TV is the dominant
    source of news and information for Americans, and in the world of
    television, broadcast TV stations are the dominant source of *local*
    news and information. Other video programming distributors, such as
    cable and DBS, typically do not serve as *independent* sources of
    local information; most of any local programming they provide is
    originated by a broadcast station.[^39] We thus reaffirm that, in
    applying the eight voice standard, we will only count broadcast TV
    stations.

23. Clear Channel argues that, in counting broadcast TV stations in a
    DMA, we should include those not licensed in the DMA but with a
    reportable share in the DMA.[^40] To serve our competition goal, we
    have defined the geographic scope of our new duopoly rule with
    reference to DMAs only, because the DMA is the accepted measure of
    the market in the broadcast TV industry. We agree with UCC that
    counting stations outside the DMA undercuts the rationale for our
    decision to adopt the market-based DMA approach.[^41] We believe it
    would be inconsistent with this approach to consider stations in
    different DMAs to be in separate markets for one purpose (*i.e*.,
    the triggering circumstances of the duopoly rule), but consider them
    to be in the same market for another purpose (*i.e*., counting
    voices). We recognize, as Clear Channel points out,[^42] that in
    counting radio stations for purposes of the radio/TV cross-ownership
    rule, we include those with a reportable share in the radio market.
    However, DMAs typically cover much larger geographic areas than
    radio markets, so that a TV station with a reportable share in a DMA
    may serve a much smaller portion of that market than a radio station
    with a reportable share in a radio market.

24. In counting broadcast TV stations in the DMA, we also clarify on our
    own motion that we will not count low power TV (LPTV) stations,
    including our recently created Class A stations. On March 28,
    pursuant to the Community Broadcasters Protection Act of 1999, we
    adopted rules establishing the Class A TV service, which affords
    certain LPTV stations a form of "primary" status.[^43] Given the
    limited signal coverage of LPTV stations, including Class A
    stations,[^44] we do not believe that they have sufficient influence
    and power to qualify as a station for purposes of our requirement
    that eight broadcast TV stations remain in a market
    post-combination.[^45] Thus, we emphasize that the new duopoly rule
    requires that "at least 8 independently owned and operating
    *full-power* commercial and noncommercial TV stations" must remain
    in a DMA post-merger.[^46]

**3. Waivers**

25. [Background]{.underline}. In the *Report and Order*, we held that we
    would presume it would be in the public interest to waive our
    duopoly rule if one of the two TV stations was a "failed" station, a
    "failing" station, or an "unbuilt" station. We explained that
    stations in such circumstances are not meaningful sources of
    competition and diversity in a given market, such that their
    combination with another station not only will not erode our
    competition and diversity goals, but perhaps will generate public
    interest benefits, such as additional programming.[^47] We held that
    applicants for all three of these presumptive waivers must
    demonstrate that the in-market buyer is the only reasonably
    available candidate willing and able to operate the station, such
    that selling a station to an out-of-market buyer would result in an
    artificially depressed price.[^48] In addition, we held that, to
    qualify for a "failed" station waiver, applicants must demonstrate
    that one of the stations has been dark for at least four months or
    involved in involuntary bankruptcy or insolvency proceedings.[^49]
    To qualify for a failing station waiver, applicants must demonstrate
    that one of the stations has a low all-day audience share and has a
    poor financial condition, such as negative cash flow for the past
    three years, and that the merger will produce public interest
    benefits.[^50] To qualify for an "unbuilt" station waiver,
    applicants must demonstrate that a combination would result in the
    construction of an authorized but as yet unconstructed station, and
    that the permittee has made reasonable efforts to construct, but has
    been unable to do so.[^51]

26. [Discussion]{.underline}. Several parties ask us to reconsider some
    of the elements of our presumptive waiver standards, suggesting that
    they are too burdensome and onerous. For example, ALTV and LSOC
    contend that our failed and failing waiver standards require too
    much degradation of service before we will permit duopolies.[^52]
    They, in addition to NAB, also ask us to reconsider our requirement
    that the in-market buyer is the only reasonably available candidate
    willing and able to operate a station.[^53] NAB asks us, at a
    minimum, to eliminate this requirement for parties to LMAs.[^54]

27. We reaffirm the elements of our presumptive waiver standards. Given
    the importance of our competition and diversity goals, we believe it
    is important to ensure that waivers are available only when truly
    necessary. As we stated in the context of our failed station waiver,
    "we hope to limit the special relief awarded to failed stations to
    those situations where this relief is clearly needed."[^55] An
    essential element of proof for us to *presume* that a duopoly is in
    the public interest -- in circumstances where less than eight
    independent broadcast TV stations will remain post-combination -- is
    that one of the stations is in fact failed, failing, or
    unconstructed, for legitimate reasons, and that no out-of-market
    buyer is willing to operate the station, and that sale to such a
    buyer would result in an artificially depressed price. Were it
    otherwise, combinations would be permitted that would unnecessarily
    erode our competition and diversity goals. We do not believe that
    our requirement pertaining to out-of-market buyers amounts to an
    inappropriate comparison of potential buyers in violation of section
    310(d), as suggested by ALTV, LSOC, and NAB.[^56] Rather, we agree
    with UCC that "\[i\]n light of the mechanics of the rule, it is
    clear that the Commission is not reviewing potential buyers for a
    particular transfer. The Commission is merely setting forth a bar by
    which any licensee who wishes to waive past the eight voice/top four
    ranked standard must pass."[^57]

28. We recognize, as several petitioners suggest, that a duopoly waiver
    applicant that is a party to a several-year-old LMA may not, as a
    practical matter, now be able to show that at the time it entered
    into the LMA, it was the only buyer willing and able to operate or
    construct the failed, failing, or unbuilt station, and that sale of
    the station to an out-of-market buyer would result in an
    artificially depressed price. In the *Report and Order*, however, we
    intended to permit parties to an LMA to make a waiver showing based
    on the circumstances that existed just prior to their entering into
    the LMA.[^58] We therefore will not require a duopoly waiver
    applicant that seeks to acquire a station with which it formed an
    LMA in the past (*i.e.*, prior to the adoption date of the *Report
    and Order*, in which we announced our new policy) to prove that it
    was the only buyer willing and able to operate the station, and that
    sale of the station to an out-of-market buyer would result in an
    artificially depressed price. We expect such waiver applicants,
    however, to prove the other elements of the relevant waiver
    standard.

29. Blade and Paxson ask that we adopt a special waiver standard to
    allow holders of existing LMAs, especially grandfathered LMAs, to
    convert those arrangements to duopolies.[^59] We reject this
    proposal. Based on the fact that some parties entered into TV LMAs
    when the Commission had not expressed any unequivocal policy on
    them, we believed the equities justified affording certain parties
    some relief and so grandfathered some LMAs to permit them to remain
    in existence until at least 2004.[^60] These equity concerns have no
    place, however, in considering whether to grant LMAs special
    dispensation to convert to duopolies, because the parties never had
    any reasonable expectation of being able to do so, given the
    Commission's flat prohibition on duopolies.

30. Through an *ex parte* submission, Pegasus asks us to clarify that a
    station's demonstrated inability to fund the build-out of its DTV
    facilities on its own is, standing alone, satisfactory evidence that
    the station is failing.[^61] As indicated, all of our waiver
    standards require duopoly applicants to show that one of the
    stations is the only entity ready, willing, and able to operate the
    other station, and that sale to another buyer would result in an
    artificially depressed price.[^62] In addition, our failing station
    standard requires applicants to show that one of the stations has an
    all-day audience share of no more than four per cent and has had
    negative cash flow for three consecutive years immediately prior to
    the application, and that consolidation of the stations would result
    in tangible and verifiable public interest benefits that outweigh
    any harm to competition and diversity.[^63] We clarify that DTV
    transition costs are relevant to our consideration of whether a
    station is failing, in that we will consider how these costs have
    affected a station's cash flow, and whether consolidation with
    another in-market station would result in demonstrable public
    interest benefits, such as expedited and improved DTV service. This
    is consistent with our standards for re-evaluation of grandfathered
    LMAs in 2004, which include consideration of "the extent to which
    one station has enabled the other to convert to digital operations,
    and whether joint operation has expedited that conversion, as well
    as produced more over-the-air programming using digital
    transmission."[^64] We decline, however, to adopt a policy holding
    that a station's difficulty in funding its DTV transition is
    tantamount to its failing under all circumstances. The other
    elements of our waiver standards are necessary to protect our
    competition and diversity goals.

31. Kenkel asks us to permit combinations without a waiver where the
    duopoly involves an authorized but unconstructed station.[^65] We
    decline to do so. Given the fact-intensive nature of the criteria
    for waiver, we continue to believe that duopolies should be
    permitted without regard to voice counts not by rule, but by waiver.

32. Public interest groups ask that we reconsider our presumptive waiver
    standards as well. UCC asked that we eliminate our failing and
    unbuilt station standards for waiver of our duopoly rule, since
    among other reasons these standards are not available for waiver of
    our radio/TV cross-ownership rule.[^66] We reaffirm our decision. As
    we explained in the *Report and Order*, we amended our duopoly and
    radio/TV cross-ownership rules to differing degrees, and our
    standards for presumptive waiver vary accordingly.[^67] We amended
    our duopoly rule to a lesser extent than our radio/TV
    cross-ownership rule, but offered more standards for presumptive
    waiver of our duopoly rule than for our radio/TV cross-ownership
    rule. Our overall approach to the duopoly and radio/TV
    cross-ownership policies is consistent. We have simply struck the
    balance between combinations allowable by rule and those allowable
    by waiver at different points. Agencies have the discretion to
    decide whether to establish their policies through a case-by-case
    method or through rulemaking,[^68] and thus we have struck the
    balance between these two methods in the manner that we believe best
    serves the public interest.

33. MMTC also asks that we require applicants for duopoly waivers to
    provide "socially and economically disadvantaged small business
    concerns" (SDBs) with reasonable notice of a station's availability,
    or offer expedited processing to duopoly-eligible licensees that
    voluntarily marketed to SDBs. [^69] We decline to do so. While we
    are concerned about minority ownership, we believe, as we stated in
    the *Report and Order*, and as we state in our companion
    *Attribution Reconsideration Order*, initiatives to enhance minority
    ownership should await the evaluation of various studies sponsored
    by the Commission.[^70]

**4. Transferability**

34. [Background]{.underline}. In the *Report and Order*, we stated that,
    once formed, a duopoly could not be transferred unless it complies
    with the duopoly rule or waiver standard in effect at the time of
    transfer.[^71] This is the case whether the combination was formed
    in the first instance pursuant to the duopoly rule or waiver.

35. [Discussion]{.underline}. ALTV, LSOC, NAB, and Sinclair ask us to
    eliminate our restrictions on transfer, claiming that the transfer
    of these previously-approved combinations cannot affect our
    competition and diversity goals, and that the restrictions may
    interfere with investment in broadcast stations.[^72] Pegasus asks
    that we eliminate the restrictions for smaller markets.[^73] Various
    other petitioners ask that we permit the transfer of duopolies on
    certain conditions.[^74]

36. We reaffirm our decision not to permit the transfer of a duopoly,
    unless it meets a rule or waiver standard in effect at the time of
    transfer. Petitioners such as NAB are correct that we would not have
    permitted these combinations in the first instance unless we
    concluded that they did not compromise our competition and diversity
    goals at that time. But marketplace factors change over time. For
    example, suppose that a TV station seeks to buy a second station,
    pursuant to a failed station waiver, in a DMA where there are six
    independently owned TV stations. We approve the transaction, such
    that five independent TV stations remain. A TV station in the DMA
    then goes off the air, with the result that there are four
    independent stations in the DMA. Several years later, the
    combination has rehabilitated the previously failed station, and a
    station group with a national presence but no stations in the same
    market as the combination seeks to acquire the combination. Section
    309(d) requires us to evaluate whether this transfer serves the
    public interest, convenience, and necessity. We believe the answer
    to this statutorily-mandated inquiry is more complicated than simply
    acknowledging that we approved the combination in the past, at a
    time when the marketplace was significantly different. We recognize
    that the mere transfer of a combination may or may not adversely
    affect the competition and diversity dynamics in the market. We
    believe, however, that we struck the appropriate balance in
    harmonizing marketplace changes with our bedrock competition and
    diversity goals by not requiring combinations to divest stations
    with the ebb and flow of the market, but requiring them to comply
    with our rules and waiver policies at the time of transfer. We are
    especially concerned with maintaining competition and a diversity
    "floor" in smaller markets, and thus decline to adopt Pegasus'
    suggestion that we allow parties to transfer duopolies in those
    markets without regard to our rules or waiver policies. We reaffirm
    our decision to prohibit transfers of duopolies, unless they comply
    with our rule or waiver policies at the time of transfer.[^75]

37. Several commenters ask us to adopt additional exceptions to our
    transfer policy, on the same bases commenters asked us to adopt
    additional exceptions to our waiver policies. For example, Kenkel
    asks us to allow the transfer of a duopoly if it was created from an
    unbuilt station waiver;[^76] LIN asks us to permit the transfer of a
    duopoly if it was created from a grandfathered LMA;[^77] MMTC asks
    us to permit the transfer of a duopoly to an SDB.[^78] Aries also
    requests that we allow the transfer of a duopoly if the stations can
    demonstrate that joint operation has led to public interest
    benefits, or that sale to separate entities would result in an
    artificially depressed price.[^79] Against the backdrop of
    reaffirming our duopoly rule, standards for presumptive waiver, and
    transfer policy, we do not believe that it is appropriate to carve
    out any additional exceptions to the transfer policy. Rather, we
    believe that these exceptions, if they have merit, are better
    examined on a case-by-case basis. As requested by Aries, however, we
    do wish to clarify the answer to the question of whether duopolies
    created from LMAs may be transferred through 2004, as the LMAs can
    be. We clarify that such a duopoly, like any other duopoly, may not
    be transferred unless it satisfies the rule or waiver standard at
    the time of transfer. As explained above in the context of our
    waiver policies, we extended certain relief to grandfathered LMAs,
    based on the equities of their situation. Parties to grandfathered
    LMAs formed these arrangements and may have made significant
    investments in them before the Commission had given clear notice
    that it intended to attribute LMAs in certain circumstances. These
    parties, however, could not have formed a reasonable expectation
    that they could have converted these LMAs to duopolies, since the
    Commission prohibited duopolies at the time. Accordingly, the equity
    arguments for maintaining and transferring LMAs do not extend to
    converting or transferring duopolies created from those LMAs.

**B. Radio/TV Cross-Ownership Rule**

38. We turn next to petitions for reconsideration of our amended
    radio/TV cross-ownership rule. As with the TV duopoly rule,
    petitioners have asked us to reconsider many aspects of our policy,
    including the circumstances that trigger our rule, the application
    of our voice counts, our standards for presumptive waiver, and our
    transfer policy.

**1. Circumstances that Trigger the Rule**

39. [Background]{.underline}. In amending the *Report and Order*, we did
    not change the circumstances that trigger our radio/TV
    cross-ownership rule. Rather, we stated that "\[t\]he current
    one-to-a-market rule, and the rule we adopt today, is triggered by
    the degree of contour overlap among the stations involved."[^80]
    Thus, the rule is triggered when the Grade A contour of a TV station
    encompasses the entire community of license of an AM or FM radio
    station, or when the 2 mV\\m contour of an AM radio station, or the
    1 mV\\m contour of an FM radio station, encompasses the entire
    community of license of a TV station.[^81]

40. [Discussion]{.underline}. Several parties ask us to clarify the
    application of the rule. CBS and Clear Channel ask us to clarify
    that radio stations, even if encompassed by the Grade A contour of a
    TV station, do not trigger radio/TV cross-ownership analysis if they
    are located in separate DMAs from the TV station.[^82] Clear Channel
    and WMTW also ask us to clarify that overlapping contours of a
    single TV station and several radio stations, if the radio stations
    are in separate radio markets, constitute several distinct radio/TV
    combinations, each deserving independent analysis.[^83]

41. We clarify as follows. Although the radio/TV cross-ownership rule
    continues to be triggered by contour encompassment, we generally do
    not count stations assigned to different markets toward the limits
    of the rule when applying it. Thus, for purposes of the radio/TV
    cross-ownership rule, we generally do not count radio stations
    located in one Arbitron radio market toward the limits on the number
    of radio stations a party may own in another Arbitron radio market,
    even when the radio stations in the different markets fall within
    the Grade A contour of a commonly owned TV station. For example, the
    recent application to transfer control of CBS Corp. to Viacom, Inc.
    involved a TV station located in the Baltimore DMA and Arbitron
    radio metro, the Grade A contour of which encompassed the entire
    communities of license of several radio stations located in the
    Washington, DC DMA and Arbitron radio metro. We did not count these
    several radio stations toward CBS/Viacom's radio/TV ownership limits
    in the Baltimore market because the stations are not assigned to
    that market. [^84] We *do* count, however, a radio station assigned
    to one Arbitron radio market toward an entity's ownership limits in
    a distant market when the contour of the radio station triggers the
    rule, because the rule continues to be triggered by contour
    encompassment, and such a radio station has a presence for
    competition and diversity purposes in the distant market. For
    example, the recent CBS/Viacom transaction also involved a radio
    station assigned to the San Francisco DMA and Arbitron radio metro,
    the 2mV\\m contour of which encompassed the entire community of
    license of a proposed co-owned TV station located in the Sacramento
    DMA. We counted that San Francisco-based radio station toward
    CBS/Viacom's radio/TV ownership limits in the Sacramento market
    because the contour of that radio station triggered the rule.[^85]
    In sum, we clarify that, generally, we do not count toward an
    entity's radio/TV ownership limits in one market those radio
    stations assigned to an Arbitron radio market other than the one in
    which a commonly owned TV station is located. However, we will count
    toward an entity's radio/TV cross-ownership limits any radio station
    assigned to an Arbitron radio market other than the one in which a
    commonly owned TV station is located, if the contour of the radio
    station triggers the radio/TV cross-ownership rule. Given that
    contour encompassment continues to trigger the radio/TV
    cross-ownership rule, we believe it is necessary to recognize that
    radio stations located in one market in fact have a presence in a
    distant market, if their contours reach into the distant market and
    trigger the rule.

**2. Application of the Voice Counts**

42. [Background]{.underline}. In the *Report and Order*, we decided to
    permit common ownership of one TV station (or two, if permitted by
    the duopoly rule) and a varying number of radio stations, depending
    on the number of certain independently owned media voices that would
    remain in a given market post-combination. Specifically, pursuant to
    the amended rule, we allow the common ownership of one (or two) TV
    stations and six radio stations in the same market, if at least
    twenty independently owned media voices would remain in the market
    post-combination. In circumstances where we allow common ownership
    of two TV and six radio stations, we also allow common ownership of
    one TV and seven radio stations. Under our new rule, we allow common
    ownership of one (or two) TV stations and four radio stations in the
    same market, if at least ten independently owned media voices would
    remain in the market post-combination. We also allow common
    ownership of one (or two) TV stations and one radio station in the
    same market, without regard to the number of media voices that would
    remain post-combination. For purposes of the new radio/TV
    cross-ownership rule, we include as independently owned media voices
    in the market all independently owned and operating radio stations
    in the market, all independently owned and operating full-power TV
    stations in the market, independently owned cable systems (as one
    voice, if generally available in the TV station's DMA), and
    independently owned daily newspapers for which the circulation
    exceeds 5% of the households in the DMA.

43. [Discussion]{.underline}. Petitioners raise a number of concerns
    about the application of our voice counts. As a preliminary matter,
    Clear Channel suggests that the *Report and Order* was not clear
    about the circumstances pursuant to which one entity may own one TV
    station and seven radio stations.[^86] To the extent the *Report and
    Order* was unclear, we clarify that an entity may own such a
    combination only if it could own two TV stations and six radio
    stations, *i.e.*, only if it could satisfy the TV duopoly
    requirement that eight full-power independently owned and operating
    broadcast TV stations would remain in the DMA post-combination. We
    believe that construction of the rule to allow a combination of 1
    TV/7 radio stations only where a combination of 2 TV/6 radio is
    possible best serves our competition and diversity goals. We believe
    that a combination of eight broadcast outlets should be permissible
    only under such circumstances where the more stringent duopoly test
    can be satisfied.

44. *Broadcast Stations Counts*. UCC asks us not to count noncommercial
    broadcast stations, and that we count only those broadcast stations
    with a certain level of viewership in a DMA.[^87] We reaffirm that
    we will count noncommercial stations, for the same reasons we stated
    above in the context of our duopoly rule. We also will not require
    broadcast stations to have a certain level of viewership before
    counting them. We believe that the assignment of a broadcast station
    to a particular market, and its continued success as a going
    concern, demonstrates that a station is a source of viable
    competition and diversity in a given market, and therefore should be
    counted.

45. Consistent with our decision not to count in the duopoly context
    Class A or LPTV stations for purposes of satisfying the requirement
    that eight independent TV broadcast stations must remain in the DMA
    post-merger, we wish to clarify on our own motion that we will not
    count in the radio/TV cross-ownership context either LPTV stations,
    including Class A stations, or low power FM (LPFM) stations for
    purposes of satisfying the requirement that a certain number of
    media entities must remain in the market post-combination. As we
    explained above in the duopoly context, LPTV stations, given their
    limited signal coverage, do not have sufficient influence and power
    to qualify as a station for purposes of our policy that a certain
    minimum number of stations must remain in a market post-combination.
    Likewise, the LPFM service is designed to serve small, localized
    communities; the strict limitation on their signal reach means that
    their programming will not be available to most of the market at
    issue in a proposed radio/TV combination.[^88] Therefore, LPFM
    stations will not be counted in determining compliance with the
    requirement that a specified number of independently owned media
    voices must survive the formation of the combination at issue.

46. *Newspapers Counts*. Pursuant to our new rule, we include daily
    newspapers in our count of independently owned media voices if they
    are published in the DMA at issue and if they have a circulation in
    excess of 5% of the households in the DMA.[^89] Clear Channel asks
    us to include a newspaper that owns a number of daily newspapers
    that have an aggregate circulation equal to or greater than 5% of
    the households in the DMA.[^90] We decline to do so, because it is
    not consistent with our rationale for limiting the newspapers we
    include in our count of "media voices" to those with a circulation
    of at least 5% of the households in the DMA. As we explained in the
    *Report and Order*, "\[o\]ur intent in this regard is to include
    those newspapers that are widely available throughout the DMA and
    that provide coverage of issues of interest to a sizeable percentage
    of the population. Although we recognize that other publications
    also provide a source of diversity and competition, many of these
    are only targeted to particular communities and are not accessible
    to, or relied upon by, the population throughout the local
    market."[^91] We reaffirm both our decision and our rationale.

> **3. Waivers**

47. In the *Report and Order*, we held that we would presume it is in
    the public interest to waive the radio/TV cross-ownership rule if
    one of the stations is a failed station.[^92] NAB asks that we also
    presume that waiver of the radio/TV cross-ownership rule is in the
    public interest if one of the stations is failing or not yet
    constructed, as we did in the context of the duopoly rule.[^93] As
    we explained above, we revised our duopoly rule to a lesser extent
    than our radio/TV cross-ownership rule. We therefore presumed that
    we should waive the radio/TV cross-ownership rule to a lesser extent
    than the duopoly rule. We agree with UCC that "a waiver is a form of
    further liberalization of the rules,"[^94] and thus believe that we
    struck the appropriate balance in our duopoly and radio/TV
    cross-ownership policies, in terms of our rules and presumptive
    waiver policies. We reaffirm our approach to our revised radio/TV
    cross-ownership policy "by amending the rule to provide a greater
    degree of common ownership of radio and television stations while at
    the same time limiting waivers of this new rule to only
    extraordinary circumstances."[^95]

48. In the *Report and Order*, we also decided to grandfather any
    radio/TV combination formed pursuant to a waiver conditioned on the
    outcome of this proceeding, if applied for on or before July 29,
    1999 (the "sunshine" notice for the *Report and Order*), and
    ultimately approved by the Commission.[^96] We grandfathered these
    combinations through our 2004 biennial review, during which the
    Commission will review the radio/TV cross-ownership rule, and the
    conditional waivers.[^97] UCC asks us to reconsider our
    grandfathering decision, and require all radio/TV combinations to
    comply with our new rules and waiver policies.[^98] As we explained
    in the *Report and Order*, although the conditional waiver grantees
    knew that the continuation of any combinations they formed was
    subject to the outcome of this proceeding, we believed it was
    appropriate to grandfather the specified combinations because in
    many cases a significant period of time had passed since the
    grantees formed and made investments in their combinations.[^99] We
    reaffirm both our decision and our rationale.

**4. Transferability**

49. In the *Report and Order*, we stated that, once formed, whether
    pursuant to the amended rule or waiver standard, a radio/TV
    combination could not be transferred unless it complies with the
    radio/TV cross-ownership rule or waiver standard in effect at the
    time of transfer.[^100] Some parties ask us to reconsider our
    decision, for reasons similar to those they asked us to reconsider
    our same decision in the duopoly context.[^101] We explained that we
    believe that we have properly harmonized changes in the marketplace
    with our competition and diversity goals by, on the one hand, not
    requiring combinations to divest broadcast stations when the market
    changes such that those combinations no longer comply with our rules
    and waiver policies, and, on the other hand, requiring combinations
    to comply with these rules and waiver policies at the time of
    transfer. We reaffirm our decision.

**C. Television Local Marketing Agreements**

50. [Background]{.underline}. In our *Attribution Report and Order*, we
    adopted "a new rule to *per se* attribute television LMAs, or time
    brokerage of another television station in the same market, for more
    than fifteen percent of the brokered station's broadcast hours per
    week and to count such LMAs toward the brokering licensee's local
    ownership limits."[^102] In the *Report and Order* in this
    proceeding, we concluded, as we proposed in the *Second Further
    Notice*,[^103] to grandfather LMAs entered into before the adoption
    date of that notice (November 5, 1996) through the conclusion of our
    2004 biennial review, and to require LMAs entered into on or after
    that date to comply with our TV duopoly rule within two years of the
    adoption date of the *Report and Order* (August 5, 1999).

51. [Discussion]{.underline}. ALTV, LSOC, Pegasus, and Sinclair contend
    that we should have grandfathered *all* LMAs, and that our decision
    not to do so is contrary to section 202(g) of the Telecommunications
    Act of 1996.[^104] This issue was already fully briefed and
    developed in the record that led to the *Report and Order*,[^105]
    and we see no reason to disturb our decision or revisit our analysis
    in detail here. Section 202(g) states that "\[n\]othing in this
    section shall be construed to prohibit the origination,
    continuation, or renewal of any television local marketing agreement
    that is in compliance with the regulations of the Commission." As we
    explained in the *Report and Order*, the express terms of the
    language indicate what section 202 was *not* intended to do, *i.e*.,
    prohibit LMAs, but it does not indicate what if anything else the
    section was intended to do.[^106] We recognize that the Conference
    Report to the 1996 Act states that "\[s\]ubsection (g) grandfathers
    LMAs currently in existence upon enactment of this legislation and
    allows LMAs in the future, consistent with the Commission's rules.
    The conferees note the positive contributions of television LMAs and
    this subsection assures that this legislation does not deprive the
    public of the benefits of existing LMAs that were otherwise in
    compliance with the Commission regulations on the date of
    enactment." We agree with UCC that this language at best indicates
    that Congress intended the Commission to grandfather LMAs that were
    in existence as of the date of enactment, *i.e*., February 8,
    1996.[^107] We have grandfathered those LMAs, as well as those
    entered into almost nine months later when the Commission adopted
    the *Second Further Notice*, *i.e*., November 5, 1996. Thus, we
    reject the argument that section 202(g) compels us to grandfather
    *all* LMAs entered into prior to the effective date of our new
    rules.[^108]

52. Pegasus also requests that we grandfather LMAs if the two stations
    involved had programming relationships more extensive than an LMA
    (*e.g.*, if they were parent-satellite stations) prior to November
    5, 1996, and then their programming relationship ultimately took the
    form of an LMA after the grandfathering date.[^109] These events do
    not change the fact that any parties that entered into such LMAs did
    so after the explicit notice in the *Second Further Notice* that
    they did so at their own risk. Moreover, we do not believe that
    Pegasus has described circumstances that are likely to recur broadly
    enough to warrant an exception to our general decision not to
    grandfather LMAs entered into on or after November 5, 1996.
    Accordingly, we reaffirm that decision here.[^110]

53. Our decision not to grandfather LMAs entered into on or after the
    adoption date of the *Second Further Notice* does not constitute
    retroactive rulemaking, as Pegasus suggests.[^111] As the Supreme
    Court has stated, "\[a\] statute does not operate 'retrospectively'
    merely because it is applied in a case arising from conduct
    antedating the statute's enactment . . . or upsets expectations
    based on prior law."[^112] Likewise, as the U.S. Court of Appeals
    for the District of Columbia Circuit has stated, "\[i\]t is often
    the case that a business will undertake a certain course of conduct
    based on the current law, and will then find its expectations
    frustrated when the law changes. This has never been thought to
    constitute retroactive rulemaking, and indeed most economic
    regulation would be unworkable if all laws disrupting prior
    expectations were deemed suspect."[^113] In any event, parties to
    the non-grandfathered LMAs could not have had a reasonable
    expectation that their agreements and investments would be
    permissible, since when the Commission adopted the *Second Further
    Notice* on November 5, 1996, it gave explicit notice of its proposal
    not to grandfather non-compliant LMAs entered into on or after that
    date. We have not assessed a forfeiture or other penalty on parties
    to the non-grandfathered LMAs. We have not altered any reasonable
    expectations they had when they entered into these LMAs, or imposed
    any new duties on the parties to the LMAs. Rather, we held, after
    giving explicit notice of our proposal to do so, that non-compliant
    LMAs entered into on or after the date of that notice will not be
    grandfathered.

54. Nor does our decision not to grandfather LMAs entered into on or
    after the adoption date of the *Second Further Notice* constitute an
    unconstitutional taking of property in violation of the Fifth
    Amendment, as Sinclair suggests.[^114] As a preliminary matter, it
    is doubtful whether an LMA constitutes a cognizable "property"
    interest for takings purposes.[^115] Yet even assuming that the
    parties to LMAs could satisfy the threshold question of whether they
    have a property interest, our decision not to grandfather LMAs
    entered into after the *Second Further Notice* does not constitute a
    taking.[^116] Parties to nongrandfathered LMAs entered them after
    the Commission made the following statements in the *Second Further
    Notice*: "\[T\]elevision LMAs entered into on or after the adoption
    date of this *Notice* would be entered into at the risk of the
    contracting parties. Consequently, if these latter television LMAs
    result in a violation of any Commission ownership rule, they would
    not be grandfathered and would be accorded only a brief period in
    which to terminate."[^117] Any party that subsequently chose to
    enter into an LMA cannot now be heard to argue that the Commission's
    action -- which is well within our authority -- interfered with
    their reasonable investment-backed expectations.[^118] Indeed, we
    gave these parties an ample two-year period in which to terminate
    their LMAs in order "to avoid undue disruption of existing
    arrangements and \[to\] allow the holders of LMAs to order their
    affairs."[^119]

55. As for grandfathered LMAs, we decline MMTC's request that we
    eliminate these LMAs if by 2004 minority or SDB ownership has fallen
    by 10%.[^120] We reaffirm our approach in the *Report and Order* to
    decide the status of grandfathered LMAs in tandem with, or not later
    than, our 2004 biennial review of our broadcast cross-ownership
    rules.

**D. First Amendment Arguments**

56. [Background]{.underline}. In the *Report and Order*, we explained
    that "\[a\]ll of our broadcast cross-ownership and multiple
    ownership rules, including the 'TV duopoly' and 'one-to-a-market'
    rules at issue in this proceeding, are based on the 'twin goals' of
    competition and diversity."[^121] Our competition goal seeks to
    ensure that broadcasters do not obtain market power, to the
    detriment of advertisers, other competitors, and the public.[^122]
    Our diversity goal seeks to ensure that the public has access to
    information from a variety of diverse and antagonistic
    sources.[^123]

57. [Discussion]{.underline}. Pegasus contends that our diversity
    rationale violates the First Amendment, for a variety of
    reasons.[^124] In essence, Pegasus argues that our diversity goal,
    "standing alone" and without a scarcity of video programming
    alternatives, cannot sustain our cross-ownership and multiple
    ownership rules,[^125] and that even if this goal were sufficiently
    important for First Amendment purposes, our ownership rules are not
    sufficiently tailored to achieve that goal.[^126]

58. We disagree. Aside from the fact that Pegasus ignores the
    competition basis for our rules, our diversity goal and means of
    promoting that goal are consistent with the First Amendment. To the
    extent our ownership rules implicate First Amendment concerns, the
    Supreme Court has noted that they are content-neutral.[^127]
    According to the applicable test, "\[a\] content-neutral regulation
    will be sustained under the First Amendment if it advances important
    governmental interests unrelated to the suppression of free speech,
    and does not burden substantially more speech than necessary to
    further those interests."[^128] In the *Report and Order*, we
    explained at length the basis for our conclusion that our ownership
    rules advance the important governmental interests of competition
    and diversity, and do so in a particularly nonburdensome way for
    purposes of the First Amendment.[^129] Pegasus has not provided any
    reason for us to reconsider that conclusion. We also note that, in
    order for the rules to apply to entities and individuals, those
    entities or individuals must *already* own a broadcast outlet in the
    *same market*. Our rules and waiver policies are designed to ensure
    that others have an opportunity to own an outlet in the market
    before an entity or individual with one or more outlets already in a
    given market obtains another one. Our rules thus foster, rather than
    impede, the values underlying the First Amendment, as the Supreme
    Court has recognized.[^130]

**IV. ADMINISTRATIVE MATTERS**

59. Authority for issuance of this *Memorandum Opinion and Second Order
    on Reconsideration* is contained in sections 4(i), 303(r), 403, and
    405 of the Communications Act of 1934, as amended, 47 U.S.C. §§
    154(i), 303(r), 403, and 405.

60. *Paperwork Reduction Act Analysis*. The actions taken in this
    *Memorandum Opinion and Second Order on Reconsideration* have been
    analyzed with respect to the Paperwork Reduction Act of 1995, and
    found to impose no new or modified reporting and record-keeping
    requirements or burdens on the public.

61. *Supplemental Final Regulatory Flexibility Analysis*. As required by
    the Regulatory Flexibility Act,[^131] the Commission has prepared a
    Supplemental Final Regulatory Flexibility Analysis (Supplemental
    FRFA) of the possible impact on small entities of the rules adopted
    in this *Memorandum Opinion and Second Order on
    Reconsideration*.[^132] The Supplemental FRFA is set forth in
    Appendix C.

**V. ORDERING CLAUSES**

62. Accordingly, IT IS ORDERED that the petitions for reconsideration or
    clarification are GRANTED to the extent provided herein and
    otherwise ARE DENIED IN PART pursuant to sections 4(i), 303(r), 403,
    and 405 of the Communications Act, as amended, 47 U.S.C. §§ 154(i),
    303(r), 403, and 405, and section 1.429 of the Commission's rules,
    47 C.F.R. § 1.429(i).

63. IT IS FURTHER ORDERED that, pursuant to sections 4(i) & (j), 303(r),
    307, 308, 308, and 309 of the Communications Act of 1934, as
    amended, 47 U.S.C. §§ 154(i) & (j), 303(r), 307, 308, and 309, Part
    73 of the Commission's rules, 47 C.F.R. Part 73, IS AMENDED as set
    forth in Appendix B.

64. IT IS FURTHER ORDERED that, pursuant to the Contract with America
    Advancement Act of 1996, the rule amendments set forth in Appendix B
    SHALL BECOME EFFECTIVE sixty days after publication in the Federal
    Register.

65. IT IS FURTHER ORDERED that the Commission's Consumer Information
    Bureau, Reference Information Center, SHALL SEND a copy of this
    Memorandum Opinion and Second Order on Reconsideration in MM Docket
    Nos. 91-221 and 87-8, including the Supplemental Final Regulatory
    Flexibility Analysis, to the Chief Counsel for Advocacy of the Small
    Business Administration.

66. IT IS FURTHER ORDERED that this proceeding is TERMINATED.

> FEDERAL COMMUNICATIONS COMMISSION

Magalie Roman Salas

> Secretary

**APPENDIX A**

**PLEADINGS**

in MM Docket Nos. 91-221, 87-8

**PETITIONS FOR RECONSIDERATION**

Aries Telecommunications Corp. (Aries)

Association of Local Television Stations, Inc. (ALTV)

Blade Communications, Inc. (Blade)

CBS Corp. (CBS)

Clear Channel Communications, Inc. (Clear Channel)

Kenkel & Assocs. (Kenkel)

LIN Television Corp. (LIN)

Local Stations Ownership Coalition (LSOC)

Minority Media and Telecommunications Council (MMTC)

National Association of Broadcasters (NAB)

Paxson Communications Corp. (Paxson)

Pegasus Communication Corp. (Pegasus)

Sinclair Broadcast Group, Inc. (Sinclair)

United Church of Christ et al. (UCC)

**OPPOSITIONS TO PETITIONS FOR RECONSIDERATION**

Clear Channel Communications, Inc. (Clear Channel)

Local Station Ownership Coalition (LSOC)

National Association of Broadcasters (NAB)

United Church of Christ (UCC)

WMTW Broadcast Group, LLC (WMTW)

**REPLIES TO OPPOSITIONS TO PETITIONS FOR RECONSIDERATION**

Minority Media Telecommunications Council (MMTC)

National Association of Broadcasters (NAB)

Pegasus Communication Corp. (Pegasus)

United Church of Christ (UCC)

**APPENDIX B**

**RULES**

Part 73 of Title 47 of the U.S. Code of Federal Regulations is amended
as follows:

Part 73 RADIO BROADCAST SERVICES

1\. The authority citation for Part 73 continues to read as follows:

AUTHORITY: 47 U.S.C. §§ 154, 303, 334.

2\. Section 73.3555 is amended by revising paragraphs (b)(2)(iii) and
(c)(3)(I) and Note 7 (2) to read as follows:

§ 73.3555 Multiple Ownership.

\* \* \* \* \*

\(b\) *Local television multiple ownership rule.* An entity may directly
or indirectly own, operate, or control two television stations licensed
in the same Designated Market Area (DMA) (as determined by Nielsen Media
Research or any successor entity) only under one or more of the
following conditions: \* \* \*

\(2\) \* \* \*

\(ii\) 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*. \* \* \*

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

\(i\) [TV stations]{.underline}: 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; \* \* \*

**APPENDIX C**

**SUPPLEMENTAL FINAL REGULATORY FLEXIBILITY ANALYSIS**

As required by the Regulatory Flexibility Act (RFA),[^133] an Initial
Regulatory Flexibility Analysis (IRFA) was incorporated in the *Notice
of Proposed Rulemaking* (*Notice*),[^134] the *Further Notice of
Proposed Rule Making* (*Further Notice*),[^135] and the *Second Further
Notice of Proposed Rule Making* (*Second Further Notice*)[^136] in this
proceeding. The Commission sought written public comment on the
proposals in the *Notice,* the *Further Notice*, and the *Second Further
Notice*, including comment on the IRFAs. The comments received were
discussed in the Final Regulatory Flexibility Analysis (FRFA) contained
in the *Report and Order* in this proceeding.[^137] As described below,
this *Memorandum Opinion and Second Order on Reconsideration* grants
reconsideration of some actions taken in the *Report and Order*, and
provides clarification of other issues. This associated Supplemental
Final Regulatory Flexibility Analysis (Supplemental FRFA) addresses the
rule modifications on reconsideration and conforms to the RFA.[^138]

**Need for, and Objectives of*,* the *Memorandum Opinion and Second
Order on Reconsideration***

In the *Report and Order*, adopted August 5, 1999, the Commission
revised its local television ownership rules -- the local television
multiple ownership rule, or TV duopoly rule, and the radio/TV
cross-ownership rule -- and also adopted grandfathering policies for
certain television local marketing agreements and radio/TV combinations.
The Commission received fourteen petitions for reconsideration of the
new rules and grandfathering policies. The *Memorandum Opinion and
Second Order on Reconsideration* resolves these petitions and associated
pleadings, consistent with the Commission's overall goals in the
proceeding. These Commission's goals were to balance two of its most
fundamental goals in broadcast ownership -- fostering competition in the
markets in which broadcast stations compete, and preserving a diversity
of information sources, especially at the local level -- with the
efficiencies of common ownership and increased competition in the media
marketplace.

**Summary of Significant Issues Raised by the Public**

The comments in response to the IRFAs that addressed small business
issues were discussed in the

FRFA contained in the *Report and Order* in this proceeding. The
Commission received no

petitions for reconsideration in direct response to the FRFA.

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

The rules revisions contained in this *Memorandum Opinion and Second
Order on Reconsideration* will apply to commercial television and radio
broadcast licensees, and potential licensees and permittees. These
entities are discussed in detail in the FRFA contained in the *Report
and Order* at Section III.[^139]

**Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements**

No new recording, recordkeeping or other compliance requirements are
adopted.

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

The *Memorandum Opinion and Second Order on Reconsideration* generally
affirms and clarifies the *Report and Order*, but it also modifies the
TV duopoly and radio/TV cross-ownership rule. As explained below, this
change relates to the standard the Commission uses to determine if the
necessary circumstances are present to approve a particular combination.
As also explained below, the Commission has considered how this change
affects small entities, and taken steps to minimize significant economic
impact on them.

The duopoly rule, as revised in the *Report and Order*, permits common
ownership of two TV stations in the same market, defined by Designated
Market Areas (DMAs), if, among other things, eight independently owned
and operating full-power TV stations would remain post-merger in the DMA
in which the communities of license of the TV stations in question are
located. In its petition for reconsideration, the Office of
Communications, Inc. of the United Church of Christ *et al.* (UCC)
argued that there are some geographically large DMAs where counting
every TV station in the DMA may produce results at odds with the
Commission's goal of establishing a minimum level of diversity in a
particular community. For example, the rule, as revised in the *Report
and Order*, allows a potential duopoly to count toward the eight-station
minimum even those stations in the DMA that cannot be received over the
air by viewers in the area where the potential duopoly will be located,
because the Grade B signal contours of those stations do not reach that
area. The Commission therefore modifies the duopoly rule to count only
those stations that have a Grade B signal contour that overlaps with the
Grade B signal contour of at least one of the stations in the proposed
duopoly. In the interest of consistency, the Commission also modifies
the radio/TV cross-ownership rule to count toward the minimum number of
media entities necessary for a particular combination only those TV
stations within the DMA of TV station(s) at issue, and that have Grade B
signal contours that overlap the Grade B signal contour(s) of the TV
station(s) at issue.

The rules as revised in the *Memorandum Opinion and Second Order on
Reconsideration* strike what we believe to be the appropriate balance
between allowing broadcast stations to realize the efficiencies of
combined operations, and furthering our policy goals of competition and
diversity. The rules tighten the showing necessary for common ownership,
and thereby prevent stations in the market from obtaining and exercising
market power at the expense of smaller stations. For example, consider a
DMA that includes nine TV stations, six of which broadcast from
hypothetical City A, and the other three of which broadcast from
hypothetical City B. The signal contours of the stations in City A do
not reach viewers in City B, and vice versa. The rule, as revised in the
*Report and Order*, would permit two of the three stations in City B to
combine, with the possible result that they could obtain and exercise
market power at the expense of the third station in City B. The rule as
revised in the *Memorandum Opinion and Second Order on Reconsideration*
would not permit any of the stations in City B to combine with each
other. (It would, however, permit one station in City A to combine with
one station in City B, leaving eight TV stations in the DMA.) Thus, the
alternative considered of affirming the rule as revised in the *Report
and Order* could have enabled a smaller station's competitors to obtain
and exercise market power.

In tightening the circumstances under which two stations can combine, we
recognize that our new rule may not just protect smaller stations, but
instead may hamper their ability to combine, reduce costs, and compete
more effectively. We note, however, that the rules, as revised in the
*Report and Order*, and affirmed in the *Memorandum Opinion and Second
Order on Reconsideration*, permit struggling stations to combine when
one of them has failed or is failing, or the combination of the two
would result in the construction of an authorized but as yet
unconstructed station.

For the above reasons, we believe that the Commission has taken steps to
minimize significant economic impact on a substantial number of small
entities.

**Report to Congress**

The Commission will send a copy of this *Memorandum Opinion and Second
Order on Reconsideration*, including this Supplemental FRFA, in a report
to be sent to Congress pursuant to the Congressional Review Act.[^140]
In addition, the Commission will send a copy of this *Memorandum Opinion
and Second Order on Reconsideration*, including this Supplemental FRFA,
to the Chief Counsel for Advocacy of the Small Business Administration.
A copy of this *Memorandum Opinion and Second Order on Reconsideration*
and Supplemental FRFA (or summaries thereof) will also be published in
the Federal Register.[^141]

In the Matter of Review of the Commission's Regulations Governing
Television Broadcasting, MM Docket No. 91-221; Television Satellite
Stations Review of Policy and Rules, MM Docket No. 97-8.

Dissenting Statement of Commissioner Harold W. Furchtgott-Roth

I respectfully dissent from this Memorandum Opinion and Second Order on
Reconsideration, which generally affirms the decisions made in the
original Report and Order on local ownership of mass media entities. I
do so for the reasons given in my dissenting statement in that Report
and Order. [^142]

[^1]: Review of the Commission's Regulations Governing Television
    Broadcasting, Television Satellite Stations Review of Policy and
    Rules, MM Docket Nos. 91-221, 87-8, *Report and Order*, 14 FCC Rcd
    12903 (1999) (*Report and Order*).

[^2]: In MM Docket No. 91-221, the Commission released a *Notice of
    Inquiry*, 6 FCC Rcd 4961 (1991), a *Notice of Proposed Rulemaking*,
    7 FCC Rcd 4111 (1992), a *Further Notice of Proposed Rulemaking*, 10
    FCC Rcd 3524 (1995), and a *Second Further Notice of Proposed
    Rulemaking*, 11 FCC Rcd 21655 (1996). The proceeding originally
    included a review of not only the local TV multiple ownership rule
    and the radio/TV cross-ownership rule, but also several other
    ownership rules, such as the national TV ownership rule, but the
    review of these other rules ultimately became the subject of
    separate proceedings.

[^3]: Review of the Commission's Regulations Governing Attribution of
    Broadcast and Cable/MDS Interests, MM Docket No. 94-150, Review of
    the Commission's Regulations and Policies Affecting Investment in
    the Broadcast Industry, MM Docket No. 92-51, and Reexamination of
    the Commission's Cross-Interest Policy, MM Docket No. 87-154,
    *Report and Order*, 14 FCC Rcd 12559 (1999) (*Attribution Report and
    Order*), *on* *recon.*, FCC 00-438 (rel. Jan. 18, 2001)
    (*Attribution Reconsideration Order*). An LMA or a time brokerage
    agreement is a type of contract that generally involves the sale by
    a licensee of discrete blocks of time to a broker that then supplies
    the programming to fill that time and sells the commercial spot
    advertisements that support the programming. *See Report and Order*,
    14 FCC Rcd at 12958, ¶ 126.

[^4]: *Attribution Report and Order*, 14 FCC Rcd at 12597, ¶ 83.

[^5]: Section 202(h) of the Telecommunications Act of 1996 requires the
    Commission to review its broadcast ownership rules biennially to
    "determine whether any of such rules are necessary in the public
    interest as the result of competition," and to "repeal or modify any
    regulation it determines to be no longer in the public interest."

[^6]: The petitioners, and the abbreviated names by which they are
    referred to in this order, are identified in Appendix A. Prior to
    addressing these petitions for reconsideration in the instant order,
    we issued our first order on reconsideration in this docket. *See
    Order on Reconsideration*, 14 FCC Rcd 20571 (1999). This first order
    on reconsideration established the manner in which we process
    applications for TV duopolies and radio/TV combinations filed on the
    same day, not all of which could be granted, consistent with the
    voice counts in our revised TV duopoly and radio/TV cross-ownership
    rule.

[^7]: To ensure that our new rule is not more restrictive than our
    previous rule, we also permit two TV stations in the same DMA to
    combine if their Grade B contours do not overlap. *Report and
    Order*, 14 FCC Rcd at 12928-12929, ¶ 53. Such a combination would
    have been permissible under the previous rule.

[^8]: UCC at 4-13.

[^9]: *See Report and Order*, 14 FCC Rcd at 12924-12925, ¶¶ 43-46.

[^10]: *Id.* at 12926-1929, ¶¶ 47-53.

[^11]: *Id*. at 12926, ¶¶ 47-48.

[^12]: UCC expresses concern "that the lack of public access to A.C.
    Nielsen data will impede effective review of proposed transfers."
    UCC at 10. As a practical matter, applicants generally submit the
    necessary data from Nielsen Media Research and/or other sources to
    support their applications, and when they do not, the Mass Media
    Bureau requests that they do so. Once submitted to the Commission,
    this information is publicly available.

[^13]: Sinclair at 11.

[^14]: *Id*.

[^15]: We recognize that Sinclair, along with several other commenters,
    argues that the Commission should not consider competition concerns.
    Sinclair at 11-12. The Commission, however, has historically
    considered competition in its public interest analysis.

[^16]: *Report and Order*, 14 FCC Rcd at 12933.

[^17]: ALTV at 12-13; Blade at 18-19; LSOC 3-4; Paxson at 17-18;
    Sinclair at 6-7.

[^18]: ALTV at 28-30; Blade at 22-23; LSOC at 17-18; NAB at 3-6; Paxson
    at 21-22; Pegasus at 28-31; Sinclair at 7-8.

[^19]: As we stated in the *Report and Order*, the requirement that
    eight broadcast TV voices must remain in the DMA post-merger
    ordinarily will mean that nine such voices must be present in the
    DMA pre-merger. *See, e.g.,* 14 FCC Rcd at 12935, ¶ 70. The only
    exception to this general rule would be where the stations in a
    proposed duopoly are already parties to an attributable TV LMA in
    the DMA; under these circumstances, for purposes of the duopoly
    rule, only eight independently owned TV stations exist in the DMA,
    but the party could convert its LMA to a duopoly because that event
    would not affect the number of independently owned broadcast TV
    stations in the DMA. This is because the LMA relationship is already
    considered one voice. *See, e.g., id.* at 12934, ¶ 67.

[^20]: *Id.* at 12911-12917.

[^21]: *Id.* at 12934, ¶ 67.

[^22]: *Id*. at 12923, ¶ 40.

[^23]: ALTV at 28-30; Blade at 22-23; LSOC at 17-18; NAB at 3-6; Paxson
    at 21-22; Pegasus at 28-31; Sinclair at 7-8.

[^24]: *Report and Order*, 14 FCC Rcd at 12935, ¶ 70.

[^25]: For example, we note that Pegasus suggests that we permit
    duopolies in "smaller markets" whenever a second, separately
    programmed station is added to the market or rescued from
    bankruptcy. *See* Pegasus at 37-38. We believe that we have already
    generally accommodated this request in our waiver standards because
    we presume it is in the public interest to permit a duopoly if the
    applicant can show that one of the stations "is a debtor in an
    involuntary bankruptcy" or that "the combination will result in the
    construction of an unbuilt station." 47 C.F.R. § 73.3555 note 7.
    Under all our waiver standards, however, we require an applicant to
    show that "the in-market buyer is the only entity ready, willing,
    and able to operate the station, \[and\] that sale to an
    out-of-market applicant would result in an artificially depressed
    price." 47 C.F.R. § 73.3555, note 7. To the extent Pegasus asks us
    to eliminate these additional requirements, we decline to do so, as
    explained in section III.A. 3.

[^26]: *Report and Order*, 14 FCC Rcd at 12935, ¶ 70.

[^27]: UCC at 15-16.

[^28]: The text of our revised TV duopoly rule is set forth in Appendix
    B.

[^29]: UCC at 8.

[^30]: In this context, we will not consider satellite stations or
    translators in determining a station's Grade B signal contour.

[^31]: *Report and Order*, at ¶¶ 50-53.

[^32]: The text of our revised radio/TV cross-ownership rule is set
    forth in Appendix B.

[^33]: Aries at 13-14 (cable systems); ALTV at 2, 26-27 (cable systems,
    DBS sitemaps, MMDS systems, magazines); Blade at 12-15 (cable
    systems, newspapers, and radio stations); LSOC at 15-16 (cable
    systems); LSOC Opposition at 18-19 (cable systems, websites); NAB at
    7-11 (cable systems, DBS systems, MMDS systems, magazines, Open
    Video Systems, SMATV systems, websites); Paxson at 13-16 (cable
    systems, newspapers, radio stations, websites); Sinclair at 8-9
    (cable systems, Digital Video Discs, VCRs).

[^34]: UCC at 13-14.

[^35]: *Report and Order*, 14 FCC Rcd at 12926-12927, ¶ 48.

[^36]: *Id.* at 12932, ¶ 62 (noting that some commenters argued that the
    Commission should count broadcast and nonbroadcast media outlets in
    a market).

[^37]: *Id*. at 12934-12935, ¶¶ 68-69.

[^38]: *Id*.

[^39]: For example, most locally originated programming available on
    cable is provided by a local broadcast station, and is either
    available over-the-air, or produced especially for cable by the
    broadcast station. In either case, such programming is not an
    independent source of local information. *See* UCC Opposition at
    3-5.

[^40]: Clear Channel at 2-3; Clear Channel Opposition at 6.

[^41]: UCC Opposition at 6. In addition, we note that UCC contends that
    stations outside the DMA typically do not produce local programming
    for the DMA in question. *Id*.

[^42]: Clear Channel at 2-3; Clear Channel Opposition at 6.

[^43]: In the Matter of Establishment of a Class A Television Service,
    MM Docket No. 00-10, FCC 00-115, *Report and Order* (released April
    4, 2000).

[^44]: The maximum peak effective radiated power (ERP) of analog LPTV
    stations, including Class A stations, is 3 kW for VHF channels, and
    150 kW for UHF channels. 47 C.F.R. § 74.735(a).

[^45]: We also note that LPTV stations also do not enjoy must-carry
    rights to the same degree as full-power TV stations. 47 C.F.R. §
    73.56(b).

[^46]: 47 C.F.R. § 73.3555(b)(2)(ii) (emphasis added).

[^47]: *Report and Order*, 14 FCC Rcd at 12936, ¶ 73; *id*. at 12938, ¶
    79 (failing station waiver); *id*. at 12941, ¶ 85 (unbuilt station
    waiver).

[^48]: *Id*. at 12937-38, ¶¶ 74, 76 (failed station waiver); *id*. at
    12939, ¶ 81 (failing station waiver); *id*. at 12941, ¶ 86 (unbuilt
    station waiver).

[^49]: *Id*. at 12937-12938, ¶¶ 75-77.

[^50]: *Id*. at 12939, ¶ 81.

[^51]: *Id*. at 12941, ¶ 86.

[^52]: ALTV at 30-32; LSOC at 19-20.

[^53]: ALTV at 32-34; LSOC at 20-22; NAB at 17-18.

[^54]: NAB at 15-16.

[^55]: *Report and Order*, 14 FCC Rcd at 12938, ¶ 76.

[^56]: ALTV at 32-34; LSOC at 20-22; NAB at 17-18.

[^57]: UCC Opposition at 9.

[^58]: *Report and Order*, 14 FCC Rcd at 12965, ¶ 147.

[^59]: Blade at 23-24; Paxson at 22.

[^60]: *Report and Order*, 14 FCC Rcd at 12964-12965, ¶ 144.

[^61]: Letter from R. Clark Wadlow and Thomas P. Van Wazer, Counsel to
    Pegasus Communications Corporation, to Magalie Roman Salas,
    Secretary, FCC, Attachment at 2 (Sept. 15, 2000).

[^62]: 47 C. F.R. § 73.3555 Note 7.

[^63]: 47 C.F.R. §73.3555 Note 7(2).

[^64]: 14 FCC Rcd at 12966, ¶ 148.

[^65]: Kenkel at 2-5.

[^66]: UCC at 21-22.

[^67]: *Report and Order*, 14 FCC Rcd 12955, ¶ 118.

[^68]: *See, e.g., SEC v. Chenery Corp.,* 332 U.S. 194 (1947).

[^69]: MMTC at 12-15.

[^70]: *Report and Order*, 14 FCC Rcd at 12910, ¶ 13; *Attribution
    Reconsideration Order*, FCC 00-438, ¶ 24. These studies include:
    Christine Bechen, Allen Hammond, and Laurie Mason, *Diversity of
    Programming in the Broadcast Spectrum: Is There a Link Between Owner
    Race or Ethnicity and News and Public Affairs* *Programming?* (Dec.
    1999); William H. Bradford, *Discrimination in Capital Markets,
    Broadcast/Wireless Spectrum Service Providers and Auction Outcomes*
    (Dec. 5, 2000); Ernst & Young LLP, *FCC Econometric Analysis of
    Potential Discrimination Utilization Ratios for Minority- and
    Women-Owned Companies in FCC Wireless Spectrum Auctions* (Dec. 5,
    2000); Ivy Planning Group LLC, *Whose Spectrum Is It Anyway?
    Historical Study of Market Entry Barriers, Discrimination and
    Changes in Broadcast and Wireless Licensing 1950 to Present* (Dec.
    2000); KPMG LLP Economic Consulting Servs., *Study of the Broadcast
    Licensing Process* (Nov. 2000); KPMG LLP Economic Consulting
    Services, *Utilization Rates, Win Rates, and Disparity Ratios for
    Broadcast Licenses Awarded by the FCC* (Nov. 2000). The studies are
    available at the Commission's website at the following location:
    \<[www.fcc.gov/opportunity/meb_study](http://www.fcc.gov/opportunity/meb_study)\>.

[^71]: *Report and Order*, 14 FCC Rcd at 12933, ¶ 64; *id*. at 12938, ¶
    77; *id*. at 12940, ¶ 81; *id*. at 12941, ¶ 86.

[^72]: ALTV at 35-37; LSOC at 22-24; NAB at 19-21; Sinclair at 11.

[^73]: Pegasus at 39.

[^74]: *See infra* ¶ 31.

[^75]: As NAB points out, *see* NAB at 20-21, we note that the
    Commission, in revising its local radio ownership rules in 1992,
    decided to permit certain radio combinations if their combined
    audience share did not exceed 25%, but did not require divestiture
    at the time of transfer if the audience share then exceeded 25%.
    *See* Revision of Radio Rules and Policies, MM Docket No. 91-140,
    *Memorandum Opinion and Order and Further Notice of Proposed
    Rulemaking*, 7 FCC Rcd 6387, 6397, ¶ 48 (1992). We believe, however,
    that audience share is much more volatile than the number of
    stations in a market, and so allowing some flexibility in *maximum
    audience share*, *id*., is different from allowing flexibility in
    the *minimum number of stations*. In any event, we also note that
    the Commission, in holding that it would not generally require
    divestiture of stations if the audience share exceeded the limits of
    its revised rule, also stated that "\[t\]he Commission retains the
    right, of course, to implement any of a full range of remedies where
    its analysis suggests that ownership levels in a particular market
    might threaten the public interest. Such remedies might include . .
    . the denial of the transfer or assignment of a large station group
    to a single owner." Revision of Radio Rules and Policies, MM Docket
    No. 91-140, *Report and Order*, 7 FCC Rcd 2755, 2793 n.109 (1992).

[^76]: Kenkel at 5-6.

[^77]: LIN at 1-5.

[^78]: MMTC at 15-16.

[^79]: Aries at 6-10.

[^80]: *Report and Order*, 14 FCC Rcd at 12947, n.159.

[^81]: 47 C.F.R. § 73.3555(c)(1);14 FCC Rcd at 12947 n.159

[^82]: CBS at 2-6; Clear Channel Opposition at 8-9.

[^83]: Clear Channel Opposition at 9-10; WMTW Opposition at 2-3.

[^84]: Applications of Shareholders of CBS Corp. (Transferor) and
    Viacom, Inc. (Transferee) for Transfer of Control of CBS Corp. and
    Certain Subsidiaries, Licensees of KCBS-TV, Los Angeles, CA, *et
    al*., *Memorandum Opinion and Order*, FCC 00-155 at ¶ 31 (released
    May 3, 2000).

[^85]: *Id*. at ¶ 32.

[^86]: Clear Channel Opposition at 12-14.

[^87]: UCC at 20-21.

[^88]: LPFM stations will be authorized to operate with maximum
    facilities of 100 watts at 30 meters antenna height above average
    terrain (HAAT). 47 C.F.R. § 73.811(a). By contrast, the maximum
    effective radiated power for the most powerful full-power FM station
    is 100 kW at 600 meters HAAT. 47 C.F.R. § 73.211(b).

[^89]: 47 C.F.R. § 73.3555(c)(3)(iii); *Report and Order*, 14 FCC Rcd at
    12952, ¶ 111.

[^90]: Clear Channel Opposition at 6-7.

[^91]: *Report and Order*, 14 FCC Rcd at 12953, ¶ 113.

[^92]: We define a failed station for purposes of our radio/TV
    cross-ownership waiver policies in the same manner as we defined it
    for our TV duopoly waiver policies. *Id*. at 12954, ¶ 115.

[^93]: NAB at 12-14.

[^94]: UCC Opposition at 8.

[^95]: *Report and Order*, 14 FCC Rcd at 12948, ¶ 103.

[^96]: *Id*. at 12957, ¶ 124.

[^97]: *Id*. at 12957-12958, ¶ 124.

[^98]: UCC at 22-23.

[^99]: *Report and Order*, 14 FCC Rcd at 12958, ¶ 125.

[^100]: *Id*. at 12948, ¶ 101; *id*. at 12954, ¶ 115.

[^101]: For example, MMTC asks us to permit the transfer of radio/TV
    combinations intact to "socially and economically disadvantaged
    small business concerns" (SDBs), without regard to the rule or
    waiver policy in effect at the time of transfer. MMTC at 16-17.

[^102]: *Attribution Report and Order*, 14 FCC Rcd at 12597, ¶ 83.

[^103]: *Second Further Notice*, 11 FCC Rcd at 12694, ¶ 89.

[^104]: ALTV at 5-9; LSOC at 25-29; Pegasus at 5-8; Sinclair at 14-17.

[^105]: *Report and Order*, 14 FCC Rcd at 12959-12964, ¶¶ 130-142.

[^106]: *Id*. at 19261-12962, ¶¶ 134-136.

[^107]: UCC Opposition (to petitions for reconsideration in the
    attribution proceeding) at 6-7.

[^108]: We similarly reject the argument that we did not "grandfather,"
    but rather "sunset," LMAs entered into before the adoption date of
    the *Second Further Notice*. As we explained in the *Report and
    Order*, grandfather provisions do not necessarily involve the
    permanent exemption from the reach of a regulation or statute. 14
    FCC Rcd at 12962, ¶ 136.

[^109]: Pegasus at 41-42.

[^110]: Pegasus has described, however, unusual circumstances in the
    Wilkes Barre/Scranton DMA, involving applications that were filed
    before but granted after the grandfathering date, and stations that
    originally had a parent-satellite relationship and then followed by
    an LMA relationship, that may warrant a case-specific waiver of the
    grandfathering date. We believe these circumstances would be best
    addressed on a case-by-case basis.

[^111]: Pegasus at 8-13.

[^112]: *Landgraf v. USI Film Prods.*, 511 U.S. 265, 269 (1994).

[^113]: *Chemical Waste Management, Inc. v. EPA*, 869 F.2d 1526, 1536
    (D.C. Cir. 1989).

[^114]: Sinclair at 19-22.

[^115]: An LMA is an agreement concerning the use of a radio license, in
    which the licensee has no property interest. Section 301 of the Act
    states that "\[i\]t is the purpose of this Act, among other things,
    to maintain the control of the United States over all channels of
    radio transmission; and to provide for the use of such channels, but
    not the ownership thereof . . . and no such license shall be
    construed to create any right, beyond the terms, conditions, and
    periods of the license." 47 U.S.C. § 301. Courts have held that
    licensees have no property rights in a broadcast radio license.
    *See, e.g., Ashbacker Radio Corp. v. FCC*, 326 U.S. 327, 331 (1945)
    (stating that "\[n\]o licensee obtains any vested interest in any
    frequency"); *FCC v. Sanders Brothers Radio Station*, 309 U.S. 470,
    475 (1940) (stating that "\[t\]he policy of the Act is clear that no
    persons is to have anything in the nature of a property right as a
    result of the granting of such a license").

[^116]: The Supreme Court evaluates takings claims on an ad-hoc,
    case-by-case basis, but has identified the following as relevant
    factors: (1) the economic impact of the regulation on the claimant;
    (2) the extent to which the regulation has interfered with
    investment-backed expectations; and (3) the character of the
    governmental action. *Penn Central Transportation Co. v. New York
    City*, 438, U.S. 104, 124 (1978). Any single factor may determine
    whether there is or is not a taking. *See Ruckelshaus v. Monsanto
    Co*., 467 U.S. 986, 1005 (1984) (Court found no taking based only on
    degree of interference with investment-backed expectations because
    it found that factor alone to be "so overwhelming . . . that it
    disposes of the taking question").

[^117]: 11 FCC Rcd at 21694, ¶ 89.

[^118]: As the Supreme Court has said, " '\[c\]ontracts may create
    rights of property, but when contracts deal with a subject matter
    which lies within the control of Congress, they have a congenital
    infirmity. . . .' If the regulatory statute is otherwise within the
    powers of Congress, . . . its application may not be defeated by
    private contractual provisions. For the same reason, the fact that
    legislation disregards or destroys existing contractual rights does
    not always transform the regulation into an illegal taking."
    *Connolly v. Pension Benefit Guaranty Corp*., 475 U.S. 211, 224
    (1986) (quoting *Norman v. Baltimore & Ohio R. Co*., 294 U.S. 240,
    307-08 (1935) and otherwise citing *Bowles v. Willingham*, 321 U.S.
    503, 517 (1944); *Omnia Commercial Co. v. United States*, 216 U.S.
    502, 508-510 (1923).

[^119]: *Report and Order*, 14 FCC Rcd at 12964, ¶ 142.

[^120]: MMTC at 11-12. MMTC also asks us to eliminate "grandfathering"
    of LMAs entered into on or after November 5, 1996, if minority or
    SDB ownership has fallen by 10% by 2001. *Id*. In making such a
    request, MMTC appears to have misunderstood that parties must
    terminate all LMAs entered into on or after November 5, 1996 within
    two years of the adoption date of the *Report and Order*, *i.e*.,
    August 5, 2001, regardless of minority or SDB ownership or any other
    factors. *Report and Order*, 14 FCC Rcd at 12964, ¶ 142. Thus, we
    reject MMTC's argument as moot.

[^121]: *Report and Order*, 14 FCC Rcd at 12910, ¶ 15.

[^122]: *Id*. at 12916, ¶ 26.

[^123]: *Id*. at 12911, ¶ 17.

[^124]: Pegasus at 13-33.

[^125]: *Id*. at 13-19.

[^126]: *Id*. at 19-27.

[^127]: *See, e.g., National Citizens Committee for Broadcasting v.
    FCC*, 436 U.S. 775, 801 (noting that the newspaper/broadcast
    cross-ownership rule was content neutral).

[^128]: *Turner Broadcasting System, Inc. v. FCC*, 520 U.S. 180, 189
    (1997).

[^129]: *Report and Order*, 14 FCC Rcd at 12910-12924, ¶¶ 15-41. *See
    especially id*. at 12915, n.49.

[^130]: *Turner Broadcasting System, Inc. v. FCC*, 512 U.S. 622, 663
    (1994) ("assuring that the public has access to a multiplicity of
    information sources is a governmental purpose of the highest order,
    for it promotes values central to the First Amendment").

[^131]: 5 U.S.C. § 601 *et seq*.

[^132]: 5 U.S.C. § 604.

[^133]: ^?^ *See* 5 U.S.C. § 603. The RFA, *see* 5 U.S.C. § 601 *et.
    seq*., has been amended by the Contract With America Advancement Act
    of 1996, Pub. L. No. 104-121, 110 Stat. 847 (1996) (CWAAA). Title II
    of the CWAAA is the Small Business Regulatory Enforcement Fairness
    Act of 1996 (SBREFA).

[^134]: ^?^ Review of the Commission\'s Regulations Governing Television
    Broadcasting, Television Satellite Stations Review of Policy and
    Rules, MM Docket Nos. 91-221 & 87-8, *Notice of Proposed
    Rulemaking,* 7 FCC Rcd 4111, 4120 (1992) (*Notice*).

[^135]: ^?^ Review of the Commission\'s Regulations governing television
    Broadcasting, Television Satellite Stations, Review of Policy and
    Rules, MM Docket Nos. 91-221 & 87-7, *Further Notice of Proposed
    Rulemaking*, 10 FCC Rcd 3524, 3586 (1995) (*Further Notice*).

[^136]: ^?^ Review of the Commission\'s Regulations Governing Television
    Broadcasting, Television Satellite Stations Review of Policy and
    Rules, MM Docket Nos. 91-221 & 87-8, *Second Further Notice of
    Proposed Rulemaking*, 11 FCC Rcd. 21655, 21698-21703 (1996) (*Second
    Further Notice*).

[^137]: ^?^ *Report and Order*, 14 FCC Rcd 12,903, 12,968-12,974 (1999).

[^138]: ^?^ *See* 5 U.S.C. § 604.

[^139]: *Report and Order*, 14 FCC Rcd. at 12,969-12,973.

[^140]: *See* 5 U.S.C. § 801(a)(1)(A).

[^141]: *See* 5 U.S.C. § 604(b).

[^142]: *See* Dissenting Statement of Commissioner Harold W.
    Furchtgott-Roth, *Report & Order, Review of the Commission's
    Regulations Governing Television Broadcasting, Television Satellite
    Stations Review of Policy and Rules*, 14 FCC Rcd. 12903 (1999).