August 14, 1998

**JOINT STATEMENT OF**

**COMMISSIONERS SUSAN NESS AND GLORIA TRISTANI**

*Station KBYB(FM), El Dorado, Arkansas*

*File Nos. BALH-961217GH and GI*

In the Telecommunications Act of 1996, Congress significantly relaxed
the Commission-established caps on local radio ownership. The Commission
has faithfully executed that directive and will continue to do so.
However, Congress also set clear limits on the level of permissible
consolidation, such as the prohibition on any entity owning or
controlling more than fifty percent of the radio stations in smaller
markets. *See* 1996 Act, Section 202(b)(1)(D). Unfortunately, we believe
that our current rules for defining radio markets hamper our ability to
fulfill Congress\' mandate. Under our rules, for instance, it is
entirely possible that one entity could own *all* of the radio stations
that serve a particular community.

As the item notes, the issue of market definition has been raised in our
biennial ownership proceeding and we look forward to addressing it
there. For the time being, this case properly applies our rules as they
exist and we therefore accept the result.

Our current broadcast ownership rules stumble on one of the critical
steps in any meaningful competitive analysis: a clear definition of the
scope of the \"market\" in question. For purposes of counting the number
of stations in the \"market,\" the rules count any station whose
principal community contour intersects with *any* mutually overlapping
station in the proposed combination. But then when counting the number
of stations a particular entity may own within that market, the
\"market\" is limited to only those stations that overlap with *every*
station proposing to have common ownership. The end result is that there
can be no meaningful assessment of market concentration because there is
no consistent definition of the relevant market.

In this case, for instance, the Commission has found that Noalmark will
own four stations in a 15-station market, well within the six stations
permitted. But this comparison is apples to oranges: the four stations
that count against Noalmark are only those that overlap with every other
station in the proposed combination; the other 11 stations that make up
the total market by overlapping with at least one of the four stations
are ignored regardless of who owns them. Conceivably, Noalmark could own
several of those stations as well (and thus violate the six station
limit), but because those 11 do not overlap with every other Noalmark
station in the proposed combination, our rules disregard them.

It is also clear that our practice of treating any station whose
principal community contour intersects with any mutually overlapping
station in the proposed combination as part of the same \"market\" can
lead to unrealistic results. In one case, for instance, two 50 kW Class
A AM stations, licensed to Memphis, Tennessee, with principal community
contours that overlapped the principal community contour of one of the
stations in a proposed radio combination in Jonesboro, Arkansas ‑‑
approximately 68 miles away in an entirely different Arbitron market ‑‑
were counted for purposes of determining the number of stations in the
relevant radio market. *See Patteson Brothers, Inc.*, 8 FCC Rcd 7595
(1993).

We do not have any definitive answers at this point, but a logical
starting point would be to apply the same market definition both to the
number of stations in the market and to the number of stations a
particular entity actually owns within that market. Again, we look
forward to addressing this market definition issue in the context of our
biennial ownership proceeding.

In addition to the above market definition issues, this decision is
troubling because it offers no guidance as to the type of evidence the
Commission will consider in analyzing competition in a market. Published
market analysis is available for most, but not all, markets. In this
case, the petitioner simply asserted that Noalmark, the assignee, would
receive eighty percent of the available advertising revenue in the
market if the transaction were approved. We might have found the
petitioner's argument more convincing if the petitioner had supplemented
this statement with documents upon which such predictions were based, or
with verified statements from advertisers and others familiar with
advertising shares in the market.

Such evidence would be especially important in smaller markets.
Approximately half of all radio stations are located outside of
Arbitron-rated markets in communities with populations of 50,000 or
less. Revenue estimates compiled by organizations such as BIA Research,
Inc. are generally not available for the stations in these areas. For
the Commission to be able to fulfill its statutory requirement to
conclude that a license assignment or transfer is in the public interest
(*see* Section 310(d) of the Communications Act), it is vital that
parties provide us with fact-specific information about the effect of
the proposed transaction on diversity and competition in the market.