STATEMENT OF CHAIRMAN WILLIAM E. KENNARD

*In the Matter of the Applications of Shareholders of AMFM, Inc. and
Clear Channel Communications, Inc. for Consent to Transfer of Control of
AMFM Texas Licenses*

*Limited Partnership, et. al.*

I have long been concerned about the increasing ownership concentration
in the radio industry that occurred as a result of the
Telecommunications Act of 1996. The Act dramatically relaxed rules that
had limited the number of radio stations a single company may own. These
changes in the law unleashed a frenzy of consolidation in the radio
marketplace and forever changed the economics of radio station
ownership. Small and minority broadcast owners have found it
increasingly difficult to survive in this changed environment.

As the largest radio merger in history, this transaction is in many
respects the culmination of the wave of consolidation made possible by
the Act. Because of its unprecedented size and scope, this merger
presented novel issues about consolidation and reduced competition in
local markets.

I carefully reviewed this merger to ensure that the applicants complied
with the Communications Act and the Commission's rules and to assess the
possibility for anticompetitive effects in each local radio market. The
divestitures required by the Department of Justice, along with those
required under our rules, weighed heavily in my decision. The consent
decree that Clear Channel will enter with the Justice Department
includes divestitures designed to address the anticompetitive effects of
the merger in local radio markets, including some markets where the
transfers would otherwise have complied with the numerical local
ownership limits.

And the way Clear Channel conducted these divestitures provided a
significant additional benefit, albeit unrelated to our analysis. When
Clear Channel announced this merger, its Chairman publicly and
voluntarily committed that Clear Channel would provide opportunities for
minority companies to purchase stations divested as a result of this
transaction.[^1] Clear Channel followed through on this commitment. To
complete this merger, Clear Channel will spin off approximately 40
stations to small and minority businesses. These spin-offs represent the
most significant one-time increase in minority ownership in history and
mitigate somewhat the concentration problems presented by this
combination.

Nevertheless, the spin-offs do not assuage all of my concerns about
increasing concentration in the radio marketplaceconcentration that
will increase market entry barriers for small, minority, and women
owners and make it increasingly difficult for them to compete and add
their unique voices to the airwaves. For this reason, I believe that
applicants and other proponents of radio mergers that raise competitive
concernslike applicants in the cable, wireless, common carrier, and
satellite contextsshould be required to describe the specific public
interest benefits that consumers will receive as a result of the
transaction.

The Commission should also articulate in a rulemaking its framework for
reviewing radio transfer applications that raise competition concerns
and seek the benefit of broad public comment. I have asked my fellow
Commissioners to consider a Notice of Proposed Rulemaking on this topic
and I urge them to act expeditiously on it so that the Commission can
bring more certainty, predictability and timeliness to our review of
radio transactions.

[^1]: *See \$56 Billion Merger Between Clear Channel Communications and
    AMFM Inc. to Create the World's Largest Out-of-Home Media Company*,
    Press Release, Clear Channel Communications, Inc. (October 4, 1999).