> March 12, 2001

**STATEMENT OF CHAIRMAN MICHAEL K. POWELL**

*Re: Disposition of Applications for the Transfer of Control of Certain
Radio Licenses.*

In the 1996 Telecommunications Act, Congress eliminated the limit on the
number of radio stations a single entity could own nationally and
significantly relaxed the limits the Commission had placed on ownership
of radio stations in a local market.[^1] As a result, we have witnessed
unprecedented consolidation in the radio industry.

A genuine concern about increased levels of concentration in local radio
markets stemming from this consolidation led the Mass Media Bureau to
start "flagging" certain radio sales cases.[^2] The process was intended
to scrutinize certain applications more closely and subject those
transactions to further competitive analysis. Since commencing this
process in 1998, the Commission has struggled with the disposition of
these cases; attempting to balance the important goals of competition
and diversity with the legitimate expectation of parties that their
applications will be reviewed in a timely fashion.

The underlying difficulty in articulating a policy rationale and
establishing clear rules for a market competition analysis is that the
Commission may run afoul of the Statute. Congress established quite
plainly the number of stations that could be commonly owned in a local
market\-\-- and the proposed transfers in *all* of the flagged cases
comply with theses numerical caps. Does the Commission have the
authority to conduct a separate competition analysis and review, which
would discount these specific statutory provisions, because it has
concerns, however genuine, about the level of concentration in local
radio markets?

This is the conundrum under which the Commission has struggled to find a
legally sustainable basis for disposing of these cases. It has been
unable to do so for nearly three years. As a consequence, a substantial
number of cases have been awaiting action, some for over two years.
While I am sensitive to the issues raised by the concentration levels in
some of these cases, I do not believe the public interest is served by
inaction. Further delay is neither warranted nor just.

Therefore, after consultation with my colleagues, I asked the Bureau to
review this difficult backlog of cases and make decisions on these
transfer applications. Today, the Bureau took an important first step in
addressing this backlog; disposing of 32 transactions, approximately 75%
of the pending applications. The Bureau found that based on existing
rules and Commission precedent, these cases did not warrant further
delay. Over the coming weeks, the Bureau will continue this process of
backlog reduction with the remaining cases.

The Commission will have an opportunity in the pending rulemaking on
radio market definitions to review its implementation of the numerical
limits imposed by the Act. To the extent that the Commission's existing
rules for determining the size and the number of stations that count
toward the cap has led to higher levels of ownership than Congress
intended, we will fix that problem. If the Commission determines that
further competitive analysis is warranted, we will consider such changes
consistent with the Act and in a proceeding that affords full and open
debate on the issues.

[^1]: *See* Section 202 (a) and (b), Telecommunications Act of 1996.

[^2]: The Commission identifies for further competitive review ("flags")
    those applications that would result in one entity controlling 50%
    or more of the advertising revenues in the relevant market or two
    entities controlling 70% or more of the advertising revenues in the
    market.