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 Federal  Communications  Commission  FCC  03-  218 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of 
 Shareholders  of  Hispanic  Broadcasting  Corporation 
 (Transferor) 
 and 
 Univision  Communications,  Inc.  (Transferee) 


 For  Transfer  of  Control  of  Hispanic  Broadcasting  Corporation,  and  Certain  Subsidiaries,  Licensees 
 of  KGBT(  AM),  Harlingen,  TX  et  al. 


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 File  Nos.  BTC,  BTCH,  BTCFTB-20020723ABL-  ADS,  and  BTCH-20021125ABD- 
 ABH 
 MB  Docket  No.  02-  235 


 MEMORANDUM  OPINION  AND  ORDER 
 Adopted:  September  8,  2003  Released:  September  22,  2003 
 By  the  Commission:  Commissioners  Copps  and  Adelstein  dissenting  and  issuing  a  joint  statement. 
 I.  INTRODUCTION 
 1.  The  Commission  has  under  consideration  applications  for  consent  to  transfer  control  of  licensee  subsidiaries  holding  62  full-  service  radio  station  licenses  (16  AM  and  41  FM)  and  3  FM 
 translator  licenses  from  the  current  shareholders  of  Hispanic  Broadcasting  Corporation  (HBC)  to  Univision  Communications,  Inc.  (Univision).  1  Univision  and  its  subsidiaries  own  or  control  32  full- 


 1  A  list  of  the  stations  to  be  transferred  is  attached  as  an  appendix.  After  filing  the  instant  applications,  a  wholly 
 owned  subsidiary  acquired  the  following  additional  broadcast  radio  stations:  KIOT(  FM),  Los  Lunas,  NM;  KVVF(  FM),  Rio  Rancho,  NM;  KJFA(  FM),  Albuquerque,  NM;  and  KAJZ(  FM)  and  KKSS(  FM),  Santa  Fe,  NM. 


 On  November  25,  2002,  applications  to  transfer  control  of  these  stations  to  Univision  Communications,  Inc.  were  filed.  See  File  Nos.  BTCH-  20021125ABD-  ABH.  These  applications  are  included  in  the  appendix  and  addressed  in 
 the  instant  order. 
 On  February  24,  March  7,  and  March  24,  2003,  alternative  sets  of  applications  were  filed  seeking  consent  to  assign  and/  or  transfer  control  of  the  following  6  full  service  radio  stations  to  either  HBC  as  controlled  by  its  current 


 shareholders  or  to  HBC  as  controlled  by  Univision:  WKAQ(  AM)  and  WKAQ-  FM,  San  Juan,  PR;  WUKQ(  AM),  Ponce,  PR;  WUKQ-  FM,  Mayaguez,  PR;  KNGT(  FM),  Jackson,  CA;  and  KINV(  FM),  Georgetown,  TX.  Alternative 
 sets  of  applications  were  also  filed  for  3  booster  stations.  On  May  30,  2003,  the  staff  granted  the  applications  naming  HBC  as  currently  controlled,  and  dismissed  those  applications  naming  HBC  as  controlled  by  Univision.  See 
 File  Nos.  BALH-  20030324ADI,  BALH-  20030307ADZ,  BTC-  20030224ACH,  BTCH-  20030224ACI,  BTC-20030223ACJ,  and  BTCH-  20030224ACK.  The  applications  were  on  public  notice  for  more  than  30  days. 


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 service  television  licenses  and  a  number  of  low-  power  television  and  translator  licenses,  but  no  radio  station  licenses.  2  Univision  also  has  an  interest  in  Entravision  Communications  Corporation 
 (Entravision),  which  owns  and  controls  18  full-  service  television  and  52  full-  service  radio  licenses.  3  The  National  Hispanic  Policy  Institute  (NHPI)  has  filed  a  Petition  to  Deny  the  applications,  challenging  the 
 existing  ownership  structure  of  HBC  and  the  proposed  ownership  structure  of  the  post-  merger  Univision.  Elgin  FM  Limited  Partnership  (Elgin)  has  filed  an  informal  objection  contending,  among  other  things, 
 that  the  transaction  will  result  in  a  Spanish-  language  media  monopoly.  4  Several  amendments  to  the  applications,  as  well  as  various  oppositions,  responsive  pleadings  and  ex  parte  letters  and  comments  have 
 been  filed.  5  By  this  Memorandum  Opinion  and  Order,  we  deny  the  Petition  to  Deny  and  informal  objection  to  the  extent  set  forth  herein  and  grant  the  applications  for  transfer  of  control,  subject  to  the 
 conditions  set  forth  below.  6 


 (...  continued  from  previous  page)  The  applicants  have  subsequently  filed  an  amendment  requesting  that  these  6  full-  service  and  3  booster  stations  be 
 added  to  the  stations  under  review  in  the  instant  proceeding.  Because  the  public  has  had  30  days  to  review  the  qualifications  of  both  Univision  and  HBC  within  the  context  of  the  dismissed  applications,  during  which  time  no 
 petitions  or  pleadings  have  been  filed  challenging  Univisions  qualifications,  we  will  include  these  full-  service  and  booster  stations  in  the  instant  Memorandum  Opinion  and  Order  as  authorizations  to  be  transferred.  The  amendment 
 is  being  treated  as  a  minor  amendment  since  it  does  not  propose  additional  changes  to  the  ownership  structure  of  HBC,  other  than  the  changes  already  proposed  in  the  July  23,  2002  filing.  See  45  C.  F.  R.    73.  3578(  b);  Shareholders 
 of  American  Radio  Systems  Corporation,  13  FCC  Rcd  12,  430,  n.  1  and  3  (1998).  For  reference  purposes  only  in  the  Commissions  Broadcast  Radio  and  Television  System  database  (CDBS),  we  have  assigned  file  numbers  to  these 
 authorizations,  included  these  authorizations  in  the  appendix,  and  have  addressed  them  in  the  instant  order.  2 
 Since  filing  the  applications,  Univision  has  acquired  the  license  for  KPXF(  TV),  Porterville,  CA,  and  KTFQ(  TV),  Albuquerque,  NM,  and  applications  to  acquire  the  licenses  for  KXGR(  TV),  Green  Valley,  AZ,  and  KFTL(  TV), 


 Stockton,  CA  remain  pending.  See  File  Nos.  BAPCT-  20020730ABO,  BALCT-  20030313BCD,  BAPCT-20020109AAR,  and  BALCT-  20030429AAK.  Univision  has  also  filed  an  application  for  a  new  television  station  on 
 Channel  52  at  Blanco,  TX,  which  is  also  pending.  3 
 Including  low-  power  television  stations,  Class  A  television  stations,  and  television  translators,  Entravision  owns  or  controls  approximately  49  television  authorizations. 


 4  HBC  challenges  NHPIs  standing,  arguing  that  it  does  not  exist  as  a  legal  entity.  NHPI,  however,  filed  a  petition  to 
 deny  in  Shareholders  of  AMFM,  Inc,  in  which  the  Commission  concluded  that  NHPI  did  have  legal  standing.  See  Shareholders  of  AMFM,  Inc.,  15  FCC  Rcd  16062,  16077  (2000).  NHPI  has  also  attached  the  affidavit  of  New  York 


 State  Senator  Efrain  Gonzales,  President  of  NHPI,  who  states  that  he  resides  within  the  service  area  of  one  of  HBCs  stations,  to  which  he  listens  regularly.  This  showing  is  sufficient  to  demonstrate  standing.  Office  of 
 Communications  for  the  United  Church  of  Christ  v.  FCC,  359  F.  2d  994  (D.  C.  Cir.  1966);  Chet-  5  Broadcasting,  L.  P.,  14  FCC  Rcd  13041  (1999).  Elgins  letter,  though  styled  as  a  Petition  to  Deny,  does  not  meet  the  pleading 
 requirements  of  Section  309(  d)(  1)  of  the  Communications  Act  and,  therefore,  will  be  considered  an  informal  objection  pursuant  to  Section  73.  3587  of  the  Commissions  rules.  47  U.  S.  C.    309(  d)(  1);  47  C.  F.  R.    73.3587. 
 5  Spanish  Broadcasting  System,  Inc.  (SBS)  has  made  numerous  oral  presentations  to  Commission  staff  and,  in 
 connection  with  the  presentation,  has  filed  numerous  written  exhibits  that  have  been  made  part  of  the  record.  We  have  considered  all  written  and  oral  ex  parte  presentations  in  reaching  this  decision. 


 6  By  Public  Notices  dated  August  16,  2002  and  August  26,  2002,  respectively,  the  Media  Bureau  docketed  the 
 proceeding  under  MB  Docket  No.  02-  235  and  announced  permit-  but-  disclose  ex  parte  status.  Media  Bureau  Announces  Assignment  of  Docket  No.  to  Proceeding  Involving  Hispanic  Broadcasting  Corporation  and  Univision 


 Communications,  Inc.,  DA  02-  2026  (MB  2002);  Media  Bureau  Announces  Permit-  But-  Disclose  Ex  Parte  Status  to  Proceeding  Involving  Hispanic  Broadcasting  Corporation  and  Univision  Communications,  Inc.,  DA  02-  2082  (MB 
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 II.  BACKGROUND 
 2.  The  applicants  propose  a  merger  whereby  Univision  will  create  an  acquisition  subsidiary,  Univision  Acquisition  Corporation,  solely  for  the  purpose  of  merging  with  HBC.  Once  the  merger  is 
 complete,  Univision  Acquisition  Corporation  will  cease  to  exist,  and  HBC  will  remain  as  the  wholly  owned  subsidiary  of  Univision.  As  a  result  of  the  merger,  each  share  of  HBC  Class  A  voting  stock  and 
 each  share  of  Class  B  nonvoting  stock  will  be  exchanged  for  .85  shares  of  Univision  Class  A  voting  stock.  7  Total  consideration  for  the  merger  is  approximately  $3.5  billion. 


 3.  HBCs  Class  A  voting  stock  is  publicly  traded.  The  Tichenor  Family,  as  a  result  of  the  Tichenor  Family  Voting  Agreement,  retains  the  largest  voting  interest  with  15.8%  of  HBC  voting  stock. 
 McHenry  Tichenor  is  HBCs  President  and  Chairman  of  the  Board  of  Directors,  and  holds  an  approximately  3.8%  voting  interest  in  HBC.  Clear  Channel  Communications  (Clear  Channel),  which 
 owns  or  controls  approximately  1200  full-  service  broadcast  radio  stations  and  38  full-  service  broadcast  television  stations,  currently  holds  all  of  HBCs  Class  B  nonvoting  stock,  constituting  26%  of  its  total 
 equity.  This  nonvoting  stock  interest  can  be  converted  into  a  voting  stock  interest  only  upon  the  prior  consent  of  the  Commission.  As  discussed  in  further  detail  below,  by  this  merger  Clear  Channel  will 
 convert  its  nonvoting  stock  interest  in  HBC  into  a  3.66%  voting  stock  interest  in  Univision. 
 4.  Univision  is  a  publicly-  traded  company.  A.  Jerrold  Perenchio  is  the  single-  majority  voting  shareholder  by  virtue  of  the  fact  that  his  Class  P  common  stock  is  entitled  to  10  votes  per  share  so 
 long  as  he  continues  to  own  at  least  30%  of  the  shares  he  held  on  October  2,  1996.  8  Univision  certifies  that  Perenchio  will  have  a  57%  voting  interest  in  the  merged  entity.  9 


 5.  At  the  time  the  applications  were  filed,  Univision  held  a  9.86%  voting  stock  interest  in  Entravision.  Univision  also  owns  all  of  Entravisions  Class  C  nonvoting  stock,  which  carries  with  it  the 
 right  to  designate  two  members  to  the  Entravision  Board  of  Directors.  In  the  instant  transfer  of  control  application,  Univision  states  that  [  p]  rior  to  consummation  of  the  transaction  proposed  herein    the 


 (...  continued  from  previous  page)  2002).  The  Commission  subsequently  released  an  Order  to  govern  procedures  for  the  consideration  of  potential 
 confidential  information.  Order  Adopting  Protective  Order  in  Proceeding  Involving  Hispanic  Broadcasting  Corporation  and  Univision  Communications,  Inc.,  DA  02-  3227  (rel.  Nov.  22,  2002).  The  parties  have  also  filed 
 with  the  U.  S.  Department  of  Justice  a  letter  waiving  the  confidentiality  provisions  of  the  Hart-  Scott-  Rodino  Antitrust  Improvements  Act,  the  Antitrust  Civil  Process  Act,  and  any  other  applicable  confidentiality  provisions,  to  allow  the 
 Department  of  Justice  to  discuss  the  parties  confidential  information  with  Commission  personnel  and  to  allow  Commission  personnel  to  review  the  parties  confidential  documents.  Letter  from  Scott  Flick  and  Roy  Russo  to  John 
 Filippini,  Esq.,  U.  S.  Department  of  Justice  (Nov.  22,  2002).  7 
 HBC  and  Univision  stock  par  values  are  $.  001  and  $.  01,  respectively.  The  agreement  provides  for  an  alternate  mechanism  under  certain  circumstances,  whereby  each  share  of  HBC  Class  B  nonvoting  stock  will  be  converted  into 


 Univision  Class  B  nonvoting  stock.  See  Applications  for  Transfer  of  Control,  Exhibit  5,  n.  2.  Under  this  alternate  mechanism,  Univision  Acquisition  Corporation  will  remain  as  a  subsidiary  and  HBC  will  cease  to  exist. 
 8  Equity  and  voting  interests  held  by  foreign  entities  in  Univision  comply  with  the  alien  ownership  restrictions  set 
 forth  in  Section  310(  b)(  4)  of  the  Communications  Act,  as  determined  previously  by  the  Commission.  Univision  Holdings,  Inc.,  7  FCC  Rcd  6672,  6673-  6674  (1992). 


 9  Applications  for  Transfer  of  Control,  Exhibit  16,  at  1. 
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 [Univision]  interest  will  be  converted  to  a  non-  voting,  non-  attributable  stock  interest.  10 
 6.  On  March  26,  2003,  the  U.  S.  Department  of  Justice  (DOJ)  filed  a  Complaint  for  Injunctive  Relief  and  proposed  Consent  Decree  with  the  U.  S.  District  Court  for  the  District  of 
 Columbia.  11  As  set  forth  in  the  proposed  Consent  Decree,  the  DOJ  stated  that  it  would  not  oppose  the  merger  of  Univision  and  HBC,  if  (a)  Univisions  interest  in  Entravision  is  converted  to  a  new  class  of 
 Entravision  nonvoting  stock  with  no  rights  to  designate  members  or  otherwise  influence  the  Entravision  Board  of  Directors;  (b)  Univisions  total  equity  interest  in  Entravision  is  reduced  to  15%  of  total  equity 
 (both  voting  and  nonvoting)  in  3  years,  and  10%  of  total  equity  (both  voting  and  nonvoting)  in  6  years;  and  (c)  certain  proposed  nonvoting  shareholder  approval  rights  associated  with  the  new  class  of 
 nonvoting  stock  are  removed.  The  DOJ  has  also  set  forth  specific  provisions  meant  to  further  ensure  that  Univision  is  insulated  from  participating  in  Entravisions  radio  business. 


 III.  DISCUSSION 
 A  Radio/  Television  Cross-  Ownership  Rule 
 7.  As  a  result  of  common  control  of  Univisions  and  HBCs  licenses,  new  radio/  television  combinations  will  be  created  in  Phoenix,  AZ  (1  tv  and  2  radio);  Hanford,  CA  (1  tv  and  1  radio);  Los 


 Angeles,  CA  (2  tv  and  5  radio);  Miami,  FL  (2  tv  and  4  radio);  Chicago,  IL  (2  tv  and  3  radio);  New  York,  NY  (2  tv  and  2  radio);  Austin,  TX  (1  tv  and  1  radio),  Dallas-  Ft.  Worth,  TX  (2  tv  and  5  radio),  Houston-Galveston, 
 TX  (2  tv  and  5  radio);  San  Antonio,  TX  (1  tv  and  6  radio);  and  Waco-  Temple-  Bryan,  TX  (1  tv  and  1  radio).  12  The  San  Francisco-  San  Jose,  CA  market  will  contain  3  separate  radio/  television 
 combinations  implicating  the  radio/  television  cross-  ownership  rule,  2  in  the  San  Francisco  radio  metro  market  (2  tv  and  1  radio,  and  1  tv  and  2  radio)  and  1  in  the  San  Jose  radio  metro  market  (1  tv  and  1 
 radio).  13 


 10  Id. 
 11  United  States  of  America  v.  Univision  Communications,  Inc.  and  Hispanic  Broadcasting  Corporation,  Civil 
 Action  No.  03-  0758  (Mar.  26,  2003).  We  refer  to  the  related  Complaint  for  Injunctive  Relief,  Consent  Decree,  and  Final  Judgment  as  Consent  Decree  herein.  Most  of  the  substantive  provisions  of  the  Consent  Decree  for  purposes 


 of  the  instant  order  are  contained  in  the  Final  Judgment,  and  all  cites  contained  in  this  order  refer  to  this  document.  12 
 The  combinations  listed  in  Univisions  showing  assume  that  Univision  will  not  have  an  attributable  interest  in  Entravision  after  consummation  of  the  merger.  We  discuss  the  relationship  between  Univision  and  Entravision 


 below.  13 
 Where  a  resulting  combination  contains  stations  in  more  than  one  Arbitron  radio  metro  market,  the  voice  count  prong  of  the  radio/  television  cross-  ownership  rule  must  be  satisfied  in  each  market.  Review  of  the  Commissions 


 Regulations  Governing  Television  Broadcasting  (  Television  Ownership  Order),  14  FCC  Rcd  12903,  12952  n.  173  (1999).  Included  as  voices  are  those  radio  stations  located  outside  a  radio  metro  market,  but  with  a  reportable 
 share  in  the  market.  Id.  at  12951.  We  generally  do  not  count  radio  stations  located  in  one  Arbitron  radio  market  towards  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.  Review  of  the  Commissions  Regulations  Governing  Television  Broadcasting,  Memorandum  Opinion  and  Second  Order  on 
 Reconsideration  (  Television  Ownership  Reconsideration),  16  FCC  Rcd  1067,  1081  (2000).  However,  the  Commission  will  count  radio  stations  in  different  Arbitron  markets  towards  the  limit  that  an  entity  may  own  if  the 
 radio  stations  relevant  contour  triggers  the  rule.  Id. 
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 8.  The  current  radio/  television  cross-  ownership  rule  is  implicated  when  the  Grade  A  contour  of  a  television  station  encompasses  the  entire  community  of  license  of  a  commonly  owned  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  commonly  owned  television  station.  14  Under 
 the  numerical  ownership/  voice  count  restrictions  of  the  radio/  television  cross-  ownership  rule,  a  party  may  own  1  television  station  and  up  to  6  radio  stations  in  any  market  where  at  least  20  independently  owned 
 media  voices  remain  in  the  market  after  the  proposed  transaction.  15  If,  under  the  Commissions  local  television  ownership  rule,  a  single  entity  could  own  2  television  stations  in  the  market,  it  may  hold  either 
 2  television  and  up  to  6  radio  stations  or  1  television  and  7  radio  stations  in  that  market.  16  Second,  a  party  may  own  1  television  station  and  up  to  4  radio  stations  in  any  market  where  at  least  10  independently 
 owned  media  voices  remain  in  the  market  after  the  proposed  transaction.  17  Third,  a  party  may  own  1  television  station  and  1  radio  station  regardless  of  the  number  of  independent  voices  remaining  in  the 
 market.  18 
 9.  Univision  claims  that  in  each  of  the  local  markets  at  issue  the  proposed  combinations  will  comply  with  the  voice  count/  numerical  ownership  restrictions  of  the  radio/  television  cross-  ownership 


 rule.  This  claim,  however,  assumes  that  neither  Univisions  interest  in  Entravisions  radio  stations  nor  Clear  Channels  interest  in  HBC  is  cognizable  under  our  rules.  Attribution  of  Univisions  interest  in 
 Entravisions  radio  stations  or  Clear  Channels  interest  in  Univision  would  result  in  new  radio/  television  combinations  violating  the  voice  count/  numerical  ownership  restrictions  of  the  radio/  television  cross-ownership 
 rule  in  multiple  markets  as  well  as  possibly  implicate  the  local  broadcast  radio  multiple  ownership  rule.  19  As  discussed  below,  we  conclude  that  Univisions  interest  in  Entravisions  radio 
 stations  after  the  merger  will  be  nonattributable,  subject  to  the  representations  made  by  Univision  in  its  applications  and  related  amendments,  and  that  Clear  Channels  interest  in  Univision  after  the  merger  will 
 also  be  nonattributable.  Accordingly,  based  on  Univisions  representation  regarding  its  proposed  interest  in  Entravision,  the  applications  will  comply  with  the  radio/  television  cross-  ownership  rule.  20 


 B  Radio  Multiple  Ownership  Rule 
 14  47  C.  F.  R.    73.3555(  c)(  i)  and  (ii). 
 15  Id.    73.  3555(  c)(  2)(  i)(  A). 
 16  Id.    73.  3555(  c)(  2)(  i)(  B). 
 17  Id.    73.  3555(  c)(  2)(  ii).  A  party  may  also  own  2  television  and  4  radio  stations  where  permitted  by  the  local 
 television  ownership  rule.  18 
 Id.    73.  3555(  c)(  2).  A  party  may  also  own  2  television  and  1  radio  stations  where  permitted  by  the  local  television  ownership  rule. 


 19  As  a  result  of  the  attributable  relationship  between  Univision  and  Entravisions  television  stations,  new  tv/  radio 
 combinations  will  be  created  in  Las  Vegas,  NV  (1  tv  and  3  radio);  El  Paso,  TX  (2  tv  and  3  radio);  Albuquerque,  NM  (2  tv  and  5  radio);  Harlingen-  Westlaco-  McAllen-  Brownsville,  TX  (1  tv  and  3  radio);  and  Monterey-  Salinas  (1  tv  and 


 1  radio).  All  of  these  combinations  meet  the  voice  count/  numerical  restrictions  of  the  radio/  television  cross-ownership  rule.  Attribution  of  Univisions  interest  in  only  Entravisions  television  stations  will  not  violate  the  local 
 broadcast  television  multiple  ownership  rule.  20 
 Assuming  both  Univisions  interest  in  Entravisions  radio  stations  and  Clear  Channels  interest  in  Univision  will  be  nonattributable,  the  merger  will  result  in  no  new  radio  station  combinations. 
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 10.  On  July  2,  2003,  the  Commission  released  the  2002  Biennial  Review  Order,  completing  a  comprehensive  review  of  the  previous  broadcast  multiple  and  cross-  ownership  rules.  21  In  the  2002 
 Biennial  Review  Order,  the  Commission  stated  that  it  would  retain  the  numerical  ownership  tiers  of  the  previous  radio  multiple  ownership  rule,  22  but  that  the  current  contour-  overlap  methodology  for  defining 
 radio  markets  and  counting  stations  in  the  market  is  flawed  as  a  means  to  protect  competition  in  local  markets,  and  that  the  current  rule  improperly  ignores  competition  from  noncommercial  radio  stations  in 
 local  markets.  23  The  Commission  replaced  the  previous  signal  contour  method  for  defining  a  local  radio  market  with  a  new  method  based  on  the  Arbitron  radio  metro  market,  and  decided  to  count 
 noncommercial  radio  stations  in  the  market.  24  For  purposes  of  determining  compliance  with  the  numerical  ownership  tiers  of  the  broadcast  radio  multiple  ownership  rule,  the  Commission  stated  that  it 
 will  count  as  being  in  an  Arbitron  Metro  above-  the-  line  radio  stations  (i.  e.,  stations  that  are  listed  as  home  to  that  Metro),  as  determined  by  BIA,  and  will  also  include  in  the  market  any  other  licensed  full 
 power  commercial  or  noncommercial  radio  station  whose  community  of  license  is  located  within  the  Metros  geographic  boundary.  25  The  Commission  further  stated  that  it  would  grandfather  existing  radio 
 station  combinations,  but  would  require  applicants  to  show  compliance  with  the  radio  multiple  ownership  rule  upon  transfer  of  the  combination,  unless  the  buyer  of  the  combination  is  a  small  business  as  defined 
 by  the  2002  Biennial  Review  Order.  26 
 11.  The  effective  date  of  the  rule  changes  contained  in  the  2002  Biennial  Review  Order  was  subsequently  stayed  by  order  of  the  3  rd  Circuit  Court  of  Appeals  on  September  3,  2003.  In  the  order,  the 


 Court  stated  that  the  the  prior  ownership  rules  [will]  remain  in  effect  pending  resolution  of  these  proceedings.  27  While  the  new  rules  are  not  yet  effective,  it  appears  upon  a  review  of  the  BIA  Media 
 Access  Pro  database  that  the  applications  would  not  be  grantable  once  the  new  rules  do  take  effect.  We  find,  in  particular,  that  in  the  Houston-  Galveston,  TX,  radio  metro  market,  which  contains  more  than  45 
 radio  stations,  Univision  will  control  a  6  FM/  1  AM  combination.  Univision,  therefore,  would  own  1  more  FM  than  would  be  permissible  under  our  new  rules.  Likewise,  in  the  Albuquerque,  NM,  radio 
 metro  market,  which  contains  only  43  radio  stations,  Univision  will  control  a  5  FM  combination,  also  1  in  excess  of  the  amount  that  would  be  permissible.  Having  found  the  previous  methodology  for  defining 
 radio  markets  not  to  be  in  the  public  interest,  we  believe  it  would  not  be  in  the  public  interest  to  grant  an  application  that  would  not  comply  with  the  radio  multiple  ownership  rule  once  the  new  methodology  is 


 21  2002  Biennial  Regulatory  Review    Review  of  the  Commissions  Broadcast  Ownership  Rules  and  Other  Rules 
 Adopted  Pursuant  to  Section  202  of  the  Telecommunications  Act  of  1996,  FCC  03-  127  (released  July  2,  2003)  (2002  Biennial  Review  Order). 


 22  Id.  at    288.  Under  the  numerical  ownership  tiers,  a  company  may  own  (a)  8  radio  stations,  only  5  of  which  are 
 in  the  same  class,  in  markets  with  45  or  more  radio  stations;  (b)  7  stations,  only  4  of  which  may  be  in  the  same  class,  in  markets  with  30-  44  radio  stations;  (c)  6  radio  stations,  only  4  of  which  are  in  the  same  class,  in  markets 


 with  15-  29  radio  stations;  and  (d)  5  radio  stations,  only  3  of  which  are  in  the  same  class,  in  markets  with  14  or  fewer  radio  stations.  See  Id.  at    236. 
 23  Id.  at    239. 
 24  Id. 
 25  Id.  at    280. 
 26  Id.  at    487,  488. 
 27  Prometheus  Radio  Project  v.  Federal  Communications  Commission,  No.  03-  3388  (3d  Cir.  Sept.  3,  2003)  (per 
 curiam). 
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 applied.  Absent  the  ability  to  condition  upon  compliance  with  our  new  rules,  we  would  exercise  our  discretion  not  to  act  on  the  applications  until  the  new  rules  become  effective.  Accordingly,  we  approve 
 the  acquisition  on  the  condition  that  the  merged  firm  divest  the  radio  stations  in  Albuquerque  and  Houston,  or  otherwise  show  that  waiver  of  the  rule  is  appropriate,  within  six  months  in  the  event  that  the 
 stay  pending  appeal  in  Prometheus  Radio  Project  v.  Federal  Communications  Commission,  No.  03-  3388  (3d  Cir.  Sept.  3,  2003)  (per  curiam)  is  lifted  or  the  local  radio  ownership  rules  adopted  in  the  2002 
 Biennial  Review  Order  otherwise  go  into  effect. 
 C  NHPI  Petition  to  Deny 
 12.  NHPI  requests  that  the  Commission  designate  the  applications  for  hearing  in  order  to  explore  the  relationships  between  Clear  Channel,  HBC,  Univision,  and  Entravision.  28  According  to 


 NHPI,  the  merger  is  not  limited  to  Univision  and  HBC,  but  includes  both  Clear  Channel  and  Entravision.  29  NHPI  argues  that  the  proposed  ownership  structure  is  a  sham,  intended  to  comply,  on 
 paper,  with  the  multiple  ownership  rules,  30  but  that  the  post-  merger  ownership  structure  does  not  reflect  how  Univision  will  actually  be  operated.  NHPI  maintains  that  Clear  Channel  will  have  influence  in  the 
 post-  merger  Univision  exceeding  its  financial  interest,  and  that  Univision  will  continue  to  significantly  influence  Entravision  after  the  merger.  NHPI  therefore  requests  that  the  Commission  consider  all  Clear 
 Channel  and  Entravision  stations  in  determining  compliance  with  the  multiple  and  cross  ownership  rules.  For  the  reasons  set  forth  below,  we  deny  this  request  in  part,  concluding  that  Clear  Channel  does  not  have 
 an  attributable  interest  in  HBC,  and  will  not  have  an  attributable  interest  in  Univision  after  the  merger;  and  that  NHPI  has  failed  to  raise  a  substantial  and  material  question  of  fact  concerning  whether  Clear 
 Channel  has,  or  will,  exercise  de  facto  control  over  either  HBC  or  Univision.  We  further  conclude  that  Univision  will  not  have  an  attributable  interest  in  Entravisions  radio  stations  after  consummation  of  the 
 proposed  transaction,  but  that  Univisions  relationship  with  Entravisions  television  stations  after  the  merger  will  be  attributable. 


 1  Clear  Channel 
 (a)  Attribution 


 28  NHPI  also  requests  that  all  of  Clear  Channels  authorizations  be  designated  for  hearing  in  order  to  determine 
 whether  Clear  Channel  has  undisclosed  ownership  interests  in  various  radio  stations  and  has  concealed  this  information  from  the  Commission.  NHPI  Reply  at  16.  For  the  reasons  set  forth  herein,  we  conclude  that  the  record 


 does  not  justify  designating  Clear  Channels  authorizations  for  hearing.  29 
 SBS  made  an  identical  argument  in  a  September  30,  2002,  presentation  to  Commission  staff.  30 
 NHPI  contends  that  [  w]  here  there  is  a  basis  in  the  record  for  inferring  that  non-  voting  shareholders  will  exercise  influence  or  control  of  an  ongoing  business,  the  Commission  has  consistently  discredited  these  types  of  sham 


 applications.  NHPI  Petition  to  Deny  at  20.  The  cases  cited  by  NHPI  in  support  of  this  proposition,  however,  involved  issues  particular  to  comparative  proceedings  and  do  not,  therefore,  govern  our  consideration  of  the 
 ownership  structure  here.  See,  e.  g.,  Kist  Corp.,  102  F.  C.  C.  2d  288,  290  (1985)  (financial  investment  is  not  necessarily  an  ownership  interest  creditable  for  integration  purposes  in  determining  comparative  merits  of 
 applicant).  More  importantly,  the  cited  cases  predate  the  Attribution  Order,  which  adopted  new,  bright-  line  attribution  standards.  Review  of  the  Commissions  Regulations  Governing  Attribution  of  Broadcast  Interests 
 (Attribution  Order),  14  FCC  Rcd  12559  (1999),  recon.  granted  in  part  (Attribution  Reconsideration),  16  FCC  Rcd  1097  (2001). 
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 13.  HBC  was  formed  by  the  merger  of  Heftel  Broadcasting  Corporation  (Heftel)  and  Tichenor  Media  Systems  (Tichenor)  on  February  14,  1997.  31  As  noted  above,  Clear  Channel  currently 
 has  a  26%  nonvoting  equity  interest  in  HBC,  which  is  convertible  to  a  voting  interest  only  upon  prior  consent  of  the  Commission.  32  Clear  Channel  also  has  the  right  to  approve  certain  extraordinary  corporate 
 actions.  33  Most  recently,  in  Shareholders  of  AMFM,  Inc.,  the  Commission  held  that  Clear  Channels  interest  in  HBC  was  nonattributable  and  that,  despite  NHPIs  claims  to  the  contrary,  Clear  Channels  right 
 to  approve  these  fundamental  corporate  actions  were  permissible  investor  protections  that  neither  restrict  a  corporations  discretion  or  rise  to  the  level  of  attributable  influence.  34  Clear  Channel  has  not  entered 
 into  any  new  financial  or  contractual  relationship  with  HBC  that  would  warrant  revisiting  the  holding  of  Shareholders  of  AMFM,  Inc. 


 14.  With  respect  to  Clear  Channels  proposed  future  interest  in  Univision,  Univision  and  HBC  intend  to  convert  Clear  Channels  nonvoting  interest  in  HBC  into  a  voting  interest  in  the  post-merger 
 Univision.  In  an  August  30,  2002,  amendment,  Univision  certified  that  Clear  Channel  will  have  a  3.66%  voting  stock  interest  in  Univision  following  the  merger.  This  voting  interest  falls  below  the  5% 
 threshold  set  forth  in  the  Commissions  rules  and  is,  therefore,  a  nonattributable  voting  interest.  35  The  combination  of  total  debt  and  equity  held  by  Clear  Channel  will  also  comply  with  the  33%  threshold  set 
 forth  in  the  Equity/  Debt  Plus  (EDP)  attribution  standard.  Under  EDP,  when  an  investor  either  (1)  supplies  over  15%  of  a  stations  total  weekly  broadcast  programming  hours,  or  (2)  is  a  same-  market 
 media  entity  subject  to  the  broadcast  multiple  ownership  rules,  its  interest  in  the  licensee  or  other  media  entity  in  that  market  will  be  attributable  if  that  interest,  aggregating  both  debt  and  equity,  exceeds  33%  of 
 the  total  asset  value  of  the  licensee  or  media  entity.  36  Clear  Channel  certifies  that  the  combined  debt  and  equity  it  would  hold  in  Univision  would  not  exceed  33%  of  Univisions  total  asset  value,  and  NHPI  has 
 provided  no  information  calling  this  certification  into  question. 
 15.  Rather  than  applying  the  EDP  attribution  standard  in  this  case,  NHPI  appears  to  argue  that  EDP  is  inadequate  as  both  a  measure  of  Clear  Channels  current  influence  over  HBC  and  its  potential 


 influence  over  Univision.  We  disagree.  The  Commission  created  the  EDP  attribution  standard  to  address  the  kind  of  influence  alleged  here,  namely,  multiple  contractual  arrangements  and  relationships  that 
 confer  a  cognizable  level  of  influence  for  purposes  of  our  multiple  and  cross-  ownership  rules.  37  To  the  extent  that  NHPI  argues  that  we  should  disregard  or  alter  our  EDP  Rule  in  this  case,  we  decline  to  do  so. 


 31  Prior  to  merger  with  Tichenor,  Clear  Channel  held  both  de  jure  and  de  facto  control  over  Heftel.  Following  the 
 merger,  however,  Clear  Channel  converted  its  voting  stock  interest  in  Heftel  into  a  nonvoting  stock  interest  in  the  newly  formed  HBC.  The  conversion  of  Clear  Channels  interest  was  approved  in  a  January  1997  Letter  from  Stuart 


 B.  Bedell,  Assistant  Chief,  Audio  Services  Division,  to  Roy  Russo,  Esq.  (Jan.  13,  1997).  32 
 See  Shareholders  of  AMFM,  Inc.,  15  FCC  Rcd  at  16078.  33 
 Clear  Channels  prior  approval  is  necessary  before:  (1)  sale  or  transfer  of  all  or  substantially  all  of  HBCs  assets  or  a  merger  with  another  entity;  (2)  issuance  of  shares  of  preferred  stock;  (3)  amendment  of  the  certificate  of 


 incorporation  under  certain  circumstances;  (4)  declaration  or  payment  of  non-  cash  dividends  or  distributions;  or  (5)  amendment  to  those  provisions  in  the  articles  of  incorporation  concerning  the  corporations  capital  stock. 
 34  Shareholders  of  AMFM,  Inc.,  15  FCC  Rcd  at  16078. 
 35  47  C.  F.  R.    73.3555,  Note  2(  a). 
 36  Id.    73.  3555,  Note  2(  i). 
 37  Attribution  Order,  12  FCC  Rcd  at  12580. 
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 It  has  long  been  Commission  practice  to  make  decisions  that  alter  fundamental  components  of  broadly  applicable  regulatory  schemes  in  the  context  of  rule  making  proceedings,  not  adjudications.  38  NHPI  has 
 further  failed  to  raise  a  substantial  and  material  question  of  fact  concerning  any  other  relationship  that  would  be  relevant  in  determining  whether  Clear  Channel  has  a  cognizable  level  of  influence  over  HBC. 


 16.  NHPI,  in  particular,  argues  that  Clear  Channels  attributable  influence  over  HBC  is  demonstrated  by  the  allegations  raised  in  an  Amended  Complaint  filed  by  Spanish  Broadcasting  Systems, 
 Inc.  (SBS),  in  a  lawsuit  before  the  U.  S.  District  Court  for  the  Southern  District  of  Florida,  which  NHPI  has  attached  to  the  petition.  Though  the  Amended  Complaint  relates  mostly  to  Clear  Channels  alleged 
 anticompetitive  conduct  and  de  facto  control  of  HBC,  it  also  alleges  that  Clear  Channel  holds  an  attributable  interest  in  HBC  because  the  HBC  Board  of  Directors  retains  two  members  that  were 
 originally  appointed  by  Clear  Channel.  The  Commission,  in  the  past,  has  determined  that  an  investors  relationship  to  an  entitys  Board  of  Directors  could  result  in  an  attributable  level  of  influence  under 
 certain  circumstances.  39 
 17.  In  response  to  this  allegation,  HBC  has  provided  a  declaration  from  McHenry  Tichenor,  Jr.,  stating  that  the  nonvoting  stock  which  Clear  Channel  holds  in  HBC  affords  Clear  Channel  no  right  or 


 ability  to  vote  with  respect  to  who  shall  serve  on  HBCs  Board  of  Directors,  and  that  he,  not  Clear  Channel,  designated  the  original  members  of  HBCs  Board  of  Directors,  including  the  two  former  Clear 
 Channel  designees  cited  in  the  Amended  Complaint.  Tichenor  further  states  that  he  decided  to  ask  two  persons  who  had  served  on  the  board  of  the  pre-  merger  Heftel  entity  to  serve  on  the  HBC  Board  after 
 satisfying  [himself]  as  to  their  qualifications,  independence  and  loyalty  to  HBC.  40  Tichenor  also  states  that  since  designation  of  the  original  HBC  Board  of  Directors,  each  of  these  five  Directors  has  been  re-elected 
 to  HBCs  Board  on  six  separate  occasions,  at  the  annual  meetings  of  HBC  stockholders,  by  the  voting  stockholders  of  HBC,  and  that  Clear  Channel  is  not  a  voting  shareholder  of  HBC.  41 


 18.  Although  the  two  directors  cited  by  SBS  in  the  Amended  Complaint  do  appear  to  be  former  Clear  Channel  designees  to  the  Heftel  Board  of  Directors,  they  are  neither  Clear  Channel 
 employees  nor  executives.  Rather,  they  work  for  financial  institutions  that  provided  banking  services  for  Clear  Channel.  These  directors,  moreover,  have  been  elected  independently  to  the  HBC  board  subsequent 
 to  their  appointment  by  Clear  Channel  to  the  Heftel  Board.  We  find  that  these  directors  can  reasonably  be  expected  to  act  independently.  NHPI  has  failed  to  provide  any  evidence  supporting  its  allegation  that 
 Clear  Channel  has  been  able  to  influence  the  HBC  Board  of  Directors  through  these  directors.  We,  therefore,  conclude  that  the  presence  of  two  former  Clear  Channel  designees  on  the  HBC  board  does  not 
 justify  attribution  of  Clear  Channels  interest.  Based  on  the  information  before  us,  we  conclude  that  Clear  Channels  current  interest  in  HBC  and  its  proposed  interest  in  Univision  are  both  nonattributable. 


 (b)  De  Facto  Control 
 38  See  Sunburst  Media,  L.  P.,  17  FCC  Rcd  1366,  1368  (2002). 
 39  See,  e.  g.,  Telemundo  Communications  Group,  Inc.,  17  FCC  Rcd  6958,  6972  (2002)  (NBCs  right  to  nominate 
 members  to  the  Paxson  Communications  Corporation  Board  of  Directors;  presence  of  NBC  employees  on  Paxson  Board;  and  conduct  of  NBC-  nominated  directors  when  taken  together  indicated  that  NBCs  interest  should  be 


 attributable).  40 
 Declaration  of  McHenry  T.  Tichenor,  Jr.  at  1.  41 
 Id.  at  2. 
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 19.  In  addition  to  claiming  that  Clear  Channel  has  an  attributable  interest  in  HBC,  NHPI  argues  that  Clear  Channel  exercises  de  facto  control  over  HBC,  and  that  Clear  Channel  will  exercise  this 
 level  of  control  over  Univision  if  the  merger  is  approved.  NHPI  acknowledges  that  the  Commission  concluded  in  Shareholders  of  AMFM,  Inc.  that  Clear  Channels  interest  in  HBC  was  neither  attributable 
 nor  rose  to  the  level  of  de  facto  control.  42  NHPI  argues,  however,  that  this  holding  was  implicitly  conditioned  upon  the  Commissions  finding  that  Clear  Channel  did  not  possess  any  participatory  rights 
 in  HBC  or  its  broadcast  holdings.  43  NHPI  argues  that  Clear  Channel  has  actively  participated  in  the  affairs  of  HBC  and,  thus,  Clear  Channel  should  be  found  to  have  exercised  de  facto  control  over  HBC.  44 


 20.  We  clarify  that  Shareholders  of  AMFM,  Inc.  did  not  per  se  prohibit  all  forms  of  informal  Clear  Channel  participation  in  HBC,  regardless  of  its  nature.  The  Commissions  statement  was  rather  an 
 observation  that  Clear  Channel  did  not  possess  any  participatory  rights  deriving  from  its  status  as  an  investor,  other  than  the  right  to  participate  in  certain  fundamental  corporate  actions.  45  The  statement 
 reflected  the  Commissions  concern  that  Clear  Channel  could  have  excessive  influence  over  the  operations  of  HBC  if  Clear  Channel  had  participatory  rights  in  addition  to  those  governing  fundamental 
 corporate  actions.  NHPI  appears  to  acknowledge  that  Clear  Channel  has  no  veto  or  voting  rights  over  HBC  corporate  actions  other  than  those  approved  in  Shareholders  of  AMFM,  Inc.,  and  no  evidence  has 
 been  presented  indicating  that  such  additional  rights  exist.  The  Commission,  of  course,  considers  informal  participation  even  when  not  taken  through  a  formal  investment-  based  participatory  right,  but 
 evaluates  such  informal  participation  within  the  framework  of  our  attribution  rules  and  policies,  and  our  policies  and  precedent  governing  determinations  of  de  facto  control. 


 21.  NHPI  argues  that  new  facts  have  come  to  light  indicating  that  Clear  Channels  informal  participation  in  HBC  rises  to  the  level  of  de  facto  control.  The  Commission  analyzes  de  facto  control 
 issues  on  a  case-  by-  case  basis.  46  In  determining  whether  an  entity  has  de  facto  control  of  an  applicant  or  a  licensee,  47  we  have  traditionally  looked  beyond  legal  title  and  financial  interests  to  determine  who 
 controls  the  basic  operating  policies  of  the  station.  48  The  Commission,  in  particular,  examines  the  policies  governing  station  programming,  personnel,  and  finances.  The  Commission  has  long  held  that  a 
 licensee  may  delegate  day-  to-  day  operations  without  surrendering  de  facto  control,  so  long  as  the  licensee  continues  to  set  the  policies  governing  these  areas.  49 


 22.  In  determining  whether  NHPIs  Petition  to  Deny  justifies  designating  these  applications  for  hearing  on  the  issue  of  de  facto  control,  Section  309(  d)  of  the  Communications  Act  provides  for  a 


 42  Shareholders  of  AMFM,  Inc.,  15  FCC  Rcd  at  16078. 
 43  Id. 
 44  NHPI  Petition  to  Deny  at  10. 
 45  See,  e.  g.,  Quincy  D.  Jones,  11  FCC  Rcd  2481,  2487  (1995). 
 46  See  Chase  Broadcasting,  Inc.,  5  FCC  Rcd  1642,  1643  (1990). 
 47  Such  a  finding  would  result  in  a  violation  of  Section  310(  d)  of  the  Communications  Act.  47  U.  S.  C.    310(  d). 
 48  See  WHDH,  Inc.,  17  F.  C.  C.  2d  856,  863  (1969),  affd  sub  nom.,  Greater  Boston  Television  Corp.  v.  FCC,  444  F.  2d 
 841  (D.  C.  Cir.  1970).  49 
 WGPR,  Inc.,  10  FCC  Rcd  8140,  8142  (1995);  Choctaw  Broadcasting  Corp.,  12  FCC  Rcd  8534,  8539  (1997);  Southwest  Texas  Broadcasting  Council,  85  F.  C.  C.  2d  713,  715  (1981). 
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 two-  step  test.  50  First,  the  petition  to  deny  must  set  forth  specific  allegations  of  fact  sufficient  to  show  that  a  grant  of  the  application  would  be  prima  facie  inconsistent  with  [the  public  interest].  51  Second, 
 the  Commission  will  formally  designate  an  application  for  hearing  in  accordance  with  Section  309(  e)  of  the  Communications  Act  when,  52  based  upon  the  totality  of  the  evidence,  there  is  a  substantial  and 
 material  question  of  fact  concerning  whether  grant  of  the  application  would  serve  the  public  interest.  53 
 23.  To  satisfy  the  first  prong  of  the  test,  a  petitioning  party  must  set  forth  allegations,  supported  by  affidavit,  that  constitute  specific  evidentiary  facts,  not  ultimate  conclusionary  facts  or  mere 


 general  allegations.  54  The  Commission  determines  whether  a  petitioner  has  met  this  threshold  inquiry  in  a  manner  similar  to  a  trial  judges  consideration  of  a  motion  for  directed  verdict:  if  all  the  supporting 
 facts  alleged  in  the  affidavits  were  true,  could  a  reasonable  fact  finder  conclude  that  the  ultimate  fact  in  dispute  had  been  established.  55 


 24.  If  the  Commission  concludes  that  a  petitioner  has  satisfied  the  first  prong,  it  must  then  proceed  to  the  second  phase  of  the  inquiry  and  determine  whether,  on  the  basis  of  the  application,  the 
 pleadings  filed  or  other  matters  which  [the  Commission]  may  officially  notice,  there  is  a  substantial  and  material  question  of  fact.  56  If,  based  on  the  totality  of  the  evidence  presented  in  the  pleadings,  the 
 Commission  concludes  that  this  question  of  fact  gives  rise  to  sufficient  doubt  as  to  whether  grant  of  the  application  would  serve  the  public  interest,  the  Commission  must  designate  the  application  for  hearing.  57 
 The  Commission  is  not  required  to  rigidly  follow  this  two-  step  process,  and  can  focus  first  on  the  second  step  in  evaluating  a  petition  to  deny.  58 


 25.  NHPI  has  failed  to  raise  a  substantial  and  material  question  of  fact  regarding  Clear  Channels  potentia1  de  facto  control  over  Univision  after  the  merger.  As  noted  above,  Clear  Channel  will 
 have  a  diluted  ownership  interest  in  Univision  as  a  result  of  this  transaction  and  HBC,  as  previously  constructed,  will  cease  to  exist.  Not  only  will  Clear  Channel  have  a  small  3.66%  voting  interest  in  the 
 post-  merger  Univision,  but  Univision  will  continue  to  have  a  single-  majority  shareholder  after  the  transaction.  Nothing  NHPI  has  filed  would  explain  how  Clear  Channel  could  overcome  A.  Jerrold 
 Perenchios  de  jure  voting  control  to  exercise  de  facto  control.  In  light  of  these  facts,  NHPIs  contention 


 50  47  U.  S.  C.    309(  d). 
 51  Id.    309(  d)(  1);  Gencom  Inc.  v.  FCC,  832  F.  2d  171,  181  (D.  C.  Cir.  1987)  (Gencom);  and  Astroline 
 Communications  Co.  v.  FCC,  857  F.  2d  1556,  1562  (D.  C.  Cir.  1988)  (Astroline).  52 
 47  U.  S.  C.    309(  e).  53 
 47  U.  S.  C.    309(  d)(  2);  Gencom,  832  F.  2d  at  181;  and  Astroline,  857  F.  2d  at  1562.  54 
 United  States  v.  FCC,  652  F.  2d  72,  89  (D.  C.  Cir.  1980)  (en  banc)  (quoting  Columbus  Broadcasting  Coalition  v.  FCC,  505  F.  2d  320,  323-  24  (D.  C.  Cir.  1974)). 


 55  Gencom,  832  F.  2d  at  181. 
 56  47  U.  S.  C.    309(  d)(  2);  see  also  Gencom,  832  F.  2d  at  181. 
 57  Serafyn  v.  FCC,  149  F.  3d  1213,  1216  (D.  C.  Cir.  1998)  (quoting  Citizens  for  Jazz  on  WRVR,  Inc.  v.  FCC,  775  F.  2d 
 392,  395  (D.  C.  Cir.  1985)).  58 
 See  Mobile  Communications  Corp.  of  America  v.  FCC,  77  F.  3d  1399,  1409-  10  (D.  C.  Cir.),  cert.  denied,  519  U.  S.  823  (1996). 
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 that  Clear  Channel  will  control  Univision  after  the  merger  is  speculative  at  best.  59  We  further  conclude  that,  based  on  our  review  of  the  record  evidence,  NHPI  has  failed  to  raise  a  substantial  and  material 
 question  of  fact  justifying  designation  of  these  applications  for  hearing  on  the  issue  of  Clear  Channels  alleged  current  de  facto  control  over  HBC.  Below  we  discuss  the  evidence  contained  in  the  pleadings. 


 26.  Amended  Complaint.  NHPI  has  attached  to  its  petition  an  Amended  Complaint  filed  by  SBS  in  a  Federal  District  Court  opposing  the  merger  of  Univision  and  HBC  and,  in  particular,  alleging 
 Clear  Channel  participation  in  the  affairs  of  HBC.  SBS  states  that  Clear  Channel  and  HBC  have  attempted  to  depress  SBSs  stock  price;  have  prevented  an  initial  public  offering  of  SBS  stock;  have 
 undermined  key  SBS  employment  and  business  relationships;  have  induced  large  investors  to  sell  SBS  holdings;  and  have  attempted  to  prevent  SBS  from  acquiring  a  number  of  radio  stations  that  could 
 compete  with  Clear  Channel  and  HBC  radio  stations.  60  With  respect  to  whether  Clear  Channel  has  exercised  de  facto  control  over  HBC,  the  complaint  alleges  that  Clear  Channel  personnel  met  with  SBS 
 personnel  to  discourage  SBSs  competing  offer  for  HBC.  The  Amended  Complaint  also  alleges  that  Clear  Channel  exercised  control  over  specific  HBC  decisions  not  related  to  the  Univision/  HBC  merger, 
 including  decisions  to  purchase  particular  stations  and  decisions  over  contracts  with  national  advertising  representation  firms.  61  The  U.  S.  District  Court  dismissed  the  lawsuit  on  January  31,  2003,  finding  that 
 SBS  had  failed  to  demonstrate  injury  to  competition  in  the  relevant  market  necessary  to  make  out  a  claim  under  either  Section  1  or  2  of  the  Sherman  Act.  62  The  Court  further  declined  to  exercise  its  supplemental 
 jurisdiction  over  the  myriad  state  law  claims  raised  by  SBS. 
 27.  HBC  asserts  that  SBSs  allegations  involve  anticompetitive  conduct  and  that  the  Commission  considers  such  conduct  only  when  and  if  there  is  a  final  adjudication.  HBC  argues  that  the 


 other  causes  of  action,  which  involve  mostly  torts  or  breaches  of  contract,  involve  private  rights  that  raise  no  regulatory  concern  for  the  Commission.  With  respect  to  the  issue  of  de  facto  control,  HBC  maintains 
 that  the  Complaint  contains  unsupported  allegations  insufficient  to  support  a  petition  to  deny.  According  to  HBC,  most  of  the  allegations  are  based  on  events  that  occurred  prior  to  Commission  approval  of  the 
 Heftel-  Tichenor  merger  that  resulted  in  the  formation  of  HBC. 
 28.  The  Commission  considers  the  effect  a  merger  will  have  on  competition  in  its  public  interest  analysis,  but  does  not  generally  consider  the  kind  of  specific  acts  of  anticompetitive  conduct 


 alleged  in  the  Amended  Complaint,  especially  those  involving  causes  of  action  under  state  law,  unless  and  until  there  is  a  final  adjudication.  63  NHPI,  in  any  case,  has  provided  only  very  limited,  indirect 


 59  See,  e.  g.,  Univision  Holdings,  Inc.,  7  FCC  Rcd  at  6675.  ([  P]  etitioners  are  essentially  asserting  that  in  the  future 
 the  Buyer  will  be  operated  in  a  manner  inconsistent  with  our  requirements  or  with  the  representations  made  by  the  Buyer  in  the  applications  and  in  affidavits.  In  the  absence  of  properly  supported  specific  allegations  of  fact  to 


 support  a  contrary  conclusion,  we  do  not  assume  that  an  applicant  will  not  faithfully  carry  out  its  representations  or  that  [an  applicant]  will  be  operated  in  a  manner  that  differs  from  the  [transaction]  under  question.). 
 60  SBS  in  its  ex  parte  presentations  and  associated  attachments  also  alleges  anticompetitive  conduct  on  the  part  of 
 Clear  Channel.  SBS  has  filed  the  Amended  Complaint  as  part  of  its  ex  parte  presentation.  61 
 SBS  also  raises  these  allegations  in  its  September  30,  2002,  presentation  to  Commission  staff.  62 
 Spanish  Broadcasting  System  v.  Clear  Channel  Communications,  Inc.,  Order  Granting  Defendants  Motion  to  Dismiss,  Case  No.  02-  21755  (rel.  Jan.  31,  2003);  Sherman  Act,  15  U.  S.  C.    1  and  2. 


 63  Policy  Regarding  Character  Qualifications  in  Broadcast  Licensing  (Character  Policy),  102  F.  C.  C.  2d  1179,  1205 
 (1985). 
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 evidence  which  it  claims  supports  the  allegations  raised  by  the  Amended  Complaint,  and  the  court  dismissed  it.  Under  these  circumstances,  we  conclude  that  further  consideration  of  the  anticompetitive 
 conduct  alleged  in  the  Amended  Complaint  is  not  warranted. 
 29.  NHPI  also  fails  to  support  the  allegations  of  Clear  Channel  de  facto  control  over  HBC  with  record  evidence,  affidavit  or  sworn  testimony.  The  allegations,  therefore,  fail  to  meet  the  pleading 


 requirements  of  Section  309(  d)(  1)  of  the  Communications  Act.  64  Much  of  the  Amended  Complaint  contains  conclusory  statements  regarding  the  market  power  of  Clear  Channel  and  its  effect  on  HBC,  and 
 several  of  the  specific  allegations  relate  to  events  occurring  prior  to  the  merger  of  Heftel  and  Tichenor.  Clear  Channel  legitimately  exercised  voting  control  over  Heftel  prior  to  the  merger  with  Tichenor,  but 
 deliberately  divested  itself  of  this  interest.  As  discussed  above,  the  Commission  approved  the  Clear  Channel/  HBC  relationship  in  Shareholders  of  AMFM,  Inc.  The  record  evidence  indicates  that  Clear 
 Channels  role  in  the  negotiations  leading  up  to  the  Univision/  HBC  merger  appears  to  be  consistent  with  the  nonvoting  shareholder  rights  the  Commission  approved.  For  example,  SBS,  as  part  of  its  ex  parte 
 presentation,  submitted  an  April  18,  2002  letter  from  L.  Lowry  Mays,  Chairman  and  Chief  Executive  Officer  of  Clear  Channel,  to  Raul  Alarcon,  Chairman  and  Chief  Executive  of  SBS,  acknowledging  receipt 
 of  SBSs  proposal  to  acquire  HBC.  In  the  letter,  Mays  states  that  he  was  certain  the  HBC  board  will  seriously  consider  the  proposal,    but  that  Clear  Channel  is  a  passive  investor  and  can  have  no  voice  in 
 [approving  the  proposal]  unless  and  until  it  is  brought  to  a  vote.  65  We  conclude  that  absent  credible  substantiating  evidence  the  Amended  Complaint  does  not  establish  a  prima  facie  case  or  raise  a 
 substantial  and  material  question  of  fact  regarding  Clear  Channels  alleged  de  facto  control  over  HBC. 
 30.  Annual  Employment  Reports.  In  support  of  its  claim  of  de  facto  control,  NHPI  maintains  that  Clear  Channel  personnel  work,  or  have  worked,  at  HBC  stations.  NHPI  has  attached,  as 


 exhibits  to  the  Petition  to  Deny,  12  FCC  Form  395B  Annual  Employment  Reports  (collectively  referred  to  as  EEO  Reports)  filed  on  or  about  November  15,  2000,  pursuant  to  the  then-  existing  rules 
 implementing  the  Commissions  broadcast  equal  employment  opportunity  program.  66  NHPIs  allegation  that  Clear  Channel  personnel  work,  or  have  worked,  at  HBC  stations  is  based  on  inferences  drawn  from 
 the  information  contained  in  those  reports.  67 
 31.  An  FCC  Form  395B  Annual  Employment  Report  was  typically  filed  on  behalf  of  an  employment  unit  -  a  group  of  commonly  owned  stations  located  within  a  specific  geographic  area  that 


 shared  at  least  one  employee.  The  licensee  filing  the  report  could  have  been  the  entity  owning  any  one  of  the  stations  in  the  employment  unit.  The  Annual  Employment  Report  was  intended  to  elicit  consolidated 
 employment  figures  for  all  full  and  part-  time  employees  working  in  an  employment  unit.  Section  I  of  the  report  asked  for  the  legal  name  of  the  filing  licensee,  while  Section  IIB  requested  that  the  filing  licensee 


 64  47  U.  S.  C.    309(  d)(  1). 
 65  We  conclude  that  a  600-  page  filing  submitted  jointly  by  SBS  and  NHPI  on  April  7,  2003,  approximately  7  months 
 after  the  pleading  cycled  closed  in  this  case,  is  untimely  and  will  be  dismissed.  We  have,  moreover,  reviewed  the  filing  and  conclude  that  it  does  not  alter  any  of  the  conclusions  reached  in  this  decision. 


 66  See  Suspension  of  the  Broadcast  and  Cable  Equal  Employment  Outreach  Program  Requirements,  16  FCC  Rcd 
 2872  (2001)  (suspending  portions  of  the  broadcast  and  MVPD  EEO  rules  governing  EEO  outreach  program  and  reporting  requirements). 


 67  Clear  Channel  completed  its  purchase  of  approximately  400  stations  owned  by  AMFM,  Inc.  approximately  2   
 months  before  the  EEO  Reports  were  filed. 
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 [  l]  ist  call  sign  and  location  of  all  stations  whose  employees  are  on  this  report,  including  commonly  owned  stations  [within  a  specified  geographic  area]  which  share  one  or  more  employees.  68  Section  V  of 
 the  report  requested  data  on  full  and  part-  time  employees  working  at  an  employment  unit,  categorized  on  the  basis  of  sex  and  race. 


 32.  The  first  four  attached  EEO  Reports  list  HBC  or  its  subsidiaries  as  the  signatory  licensee,  but  list  stations  owned  by  Clear  Channel  subsidiaries  in  Section  IIB  as  belonging  to  a  common 
 employment  unit.  NHPI  argues,  therefore,  that  Clear  Channel  must  have  its  employees  at  HBC  stations.  The  remaining  8  attached  EEO  Reports  list  Clear  Channel  subsidiaries  as  signatory  licensees,  but  also  list 
 stations  owned  by  HBC  subsidiaries  in  Section  IIB  as  belonging  to  a  common  employment  unit.  In  addition  to  commingling  Clear  Channel  and  HBC  stations  in  Section  IIB,  NHPI  points  out  that  Clear 
 Channels  corporate  headquarters  is  listed  on  Section  I  of  the  attached  EEO  Reports  under  the  name  of  the  signatory  licensee.  Though  none  of  the  attached  EEO  Reports  are  signed,  NHPI  states  that  Rick  Wolfs 
 name,  acting  as  Vice-  President  and  Corporate  Counsel  of  Clear  Channel,  is  typed  below  the  certification  contained  in  Section  IV  of  the  12  reports. 


 33.  Clear  Channel  and  HBC  maintain  that  all  12  attached  EEO  Reports  contain  mistaken  information.  With  respect  to  the  8  reports  signed  by  Clear  Channel  or  one  of  its  subsidiaries,  HBC 
 maintains  that  its  stations  were  listed  by  mistake.  HBC  provides  a  declaration  from  Neal  A.  Murphy,  Corporate  Counsel  for  Clear  Channel,  who  states  that,  in  preparing  Clear  Channels  EEO  Reports,  Clear 
 Channel  personnel  used  an  internal  electronic  database  listing  all  stations  in  which  it  had  an  interest  by  geographic  market.  Murphy  states  that  the  electronic  database  listed  stations  in  which  Clear  Channel  had 
 any  interest,  regardless  of  whether  that  interest  was  attributable  under  Commission  rules,  primarily  for  the  purpose  of  disclosure  in  Clear  Channels  FCC  filings.  69  Murphy,  however,  affirmatively  certifies 
 that  the  employee  numbers  contained  in  the  attached  EEO  Reports  were  derived  from  a  separate  payroll  database  that  listed  only  Clear  Channel  employees.  70  HBC  further  certifies  that  the  EEO  Reports 
 reflected  only  the  [Clear  Channel]  employees  who  work  for  Clear  Channels  stations,  and  did  not  include  any  employees  who  work  for  HBCs  stations.  71  Clear  Channel  personnel,  according  to  Murphy, 
 compiled  the  individual  reports  by  lifting  one  of  the  entities  listed  in  the  electronic  database  from  the  relevant  geographic  market  and  transposing  it  onto  Section  1  of  the  EEO  Report.  72  The  other  stations 
 listed  in  Section  IIB  of  the  report  were  likewise  transposed  from  Clear  Channels  internal  electronic  database. 


 34.  With  respect  to  the  4  EEO  Reports  where  HBC  was  the  signatory  licensee,  HBC  and  Murphy  certify  that  the  same  process  was  followed,  and  that  the  employees  listed  in  these  reports  were 
 also  Clear  Channel  employees  working  at  Clear  Channel  stations.  Neil  Murphy  further  states  that  the  forms  attached  to  the  petition  were  filed  electronically,  and  that  HBC  itself  filed  paper  reports  that 
 reflected  its  employees.  As  support  for  this  assertion,  HBC  has  attached  its  own  Annual  Employment  Reports  for  the  same  12  markets.  All  of  the  reports  are  signed  by  McHenry  Tichenor,  Jr.,  a  principal  of 


 68  FCC  Form  395B  Broadcast  Station  Annual  Employment  Report,  IIB. 
 69  Declaration  of  Neil  A.  Murphy  at  1. 
 70  Id. 
 71  Opposition  of  HBC  at  7. 
 72  Declaration  of  Neil  Murphy  at  2. 
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 HBC,  on  or  about  September  28,  2000.  The  employment  data  contained  in  the  HBC  reports  differs  from  the  data  contained  in  those  Clear  Channel  reports  naming  HBC  subsidiaries  as  the  reporting  licensee. 
 35.  NHPI  argues  in  its  Reply  that  the  EEO  Reports  conclusively  demonstrate  that  Clear  Channel  did  have  employees  at  HBC  stations.  NHPI  asserts,  moreover,  that  HBC  has  failed  to  explain 
 why  Clear  Channel  was  filling  out  reports  for  stations  it  did  not  own.  73 
 36.  We  conclude  that  the  EEO  Reports  do  not  raise  a  substantial  and  material  question  of  fact  on  the  issue  of  Clear  Channels  alleged  de  facto  control  over  HBC.  The  fact  that  HBC  filed  its  own  EEO 


 Reports  suggests  that  Clear  Channel  mistakenly  included  HBC  licensees  in  its  reports.  The  discrepancy,  however,  between  the  figures  contained  in  the  reports  filed  by  HBC  and  Clear  Channel,  respectively, 
 appears  to  lend  support  to  Clear  Channels  argument  that  the  mistaken  reports  included  only  Clear  Channel  employees  working  at  Clear  Channel  stations.  Based  on  our  review  of  the  record,  it  appears  that 
 all  of  the  Clear  Channel  reports,  including  those  filed  for  HBC  licensees,  were  completed  using  employment  figures  for  Clear  Channel  stations  only.  Besides  the  fact  that  Clear  Channel  filed  mistaken 
 EEO  Reports,  NHPI  has  failed  to  provide  any  specific  evidence  that  Clear  Channel  employees  work  or  have  worked  at  HBC  stations.  74 


 2  Entravision 
 37.  Univision  currently  holds  an  attributable  interest  in  Entravision  through  ownership  of 


 73  NHPI  also  argues  that  a  declaration  by  Neil  Murphy  in  a  previous  case  made  no  mention  of  Clear  Channel  having 
 filed  FCC  Form  395B  Annual  Employment  Reports  listing  stations  owned  by  HBC  or  listing  stations  in  which  Clear  Channel  had  no  employees.  The  facts  at  issue  in  the  previous  case  cited  by  NHPI  are  different  than  those  presented 


 here.  We  do  not  believe,  therefore,  that  this  previous  declaration  is  inconsistent  with  the  one  filed  in  this  case.  74 
 NHPI  argues  that  Clear  Channels  active  participation  in  the  affairs  of  HBC  demonstrates  a  pattern  of  conduct  in  which  Clear  Channel  conceals,  through  numerous  material  misrepresentations  to  the  FCC,  the  actual  ownership  and 


 control  of  established  radio  station  groups,  including  HBC.  NHPI  Petition  to  Deny  at  15.  NHPI  cites  as  evidence  a  petition  to  deny  filed  on  November  8,  2001,  by  David  Ringer  against  the  license  assignment  of  WFCB(  FM), 
 Chillicothe,  Ohio  from  Secret  Communications  II,  Inc.  to  Clear  Channel.  See  File  No.  BALH-  20010918AAP.  Ringer  alleged  that  Clear  Channel  used  front  companies  to  control  stations  it  could  not  otherwise  own  under  the 
 multiple  ownership  rules,  providing  EEO  Reports  as  support  for  this  contention.  The  Commission  has  determined  that  the  facts  alleged  in  the  Ringer  petition  do  not  raise  a  substantial  and  material  question  of  fact  that  Clear  Channel 
 engaged  in  an  unauthorized  transfer  of  control  of  WFCB(  FM).  See  Secret  Communications  II,  LLC,  18  FCC  Rcd  9139,  9147  (2003).  Our  decision  here  is  consistent  with  that  determination.  We  further  find  that  the  EEO  Reports 
 cited  in  the  Chilicothe  case  are  not  directly  relevant  here  because  Clear  Channel  had  a  Local  Marketing  Agreement  (LMA)  with  the  licensee  of  WFCB(  FM).  The  Commission  has  long  permitted  brokers  to  place  employees  at 
 brokered  stations,  as  long  as  the  licensee  complies  with  its  obligation  to  retain  ultimate  control  of  station  operations  and  maintains  the  minimum  staffing  requirements  set  forth  in  the  Main  Studio  Rule.  Shareholders  of  the  Ackerley 
 Group,  Inc.,  17  FCC  Rcd  10828,  10842  (2002);  WGPR,  Inc.,  10  FCC  Rcd  at  8143;  Main  Studio  and  Program  Origination  Rules  (Clarification),  3  FCC  Rcd  5024  (1998),  recon.  denied  in  part  and  granted  in  part,  7  FCC  Rcd 
 6800  (1992).  The  Ringer  petition,  therefore,  does  not  support  the  pattern  of  conduct  alleged  by  NHPI.  NHPI  further  states  that  websites  registered  to  Clear  Channel  are  operated  by  stations  in  which  Clear  Channel  ostensibly 
 has  a  nonattributable  interest,  and  that  this  demonstrates  that  the  companies  owning  these  stations  are  fronts.  Domain  registration  is  not  necessarily  probative  of  ultimate  control  over  programming,  personnel  and  finances,  and 
 such  an  alleged  connection  in  this  case  is  speculative  and  unsupported.  See  Secret  Communications  II,  LLC,  18  FCC  Rcd  at  9148. 
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 9.86%  of  Entravisions  voting  stock,  75  as  well  as  through  its  right  to  designate  two  members  to  the  Entravision  Board  of  Directors.  As  noted  above,  Univision  states  in  the  instant  transfer  of  control 
 application  that  it  intends  to  convert  its  current  interest  into  a  non-  voting,  non-  attributable  stock  interest.  76  Following  an  informal  staff  request,  Univision  amended  its  showing  to  state  that  [  d]  irectors 
 previously  elected  to  the  Entravision  Board  by  Univision  have  resigned.  77 
 38.  NHPI,  in  its  Reply  to  the  Univisions  Opposition,  argues  that  Univision  fails  to  state  whether  it  will  modify  the  rights  of  its  Class  C  shares  so  as  not  to  be  able  to  designate  members  to,  or 


 otherwise  influence,  the  Entravision  board  in  the  future.  NHPI  also  questions  whether  Univisions  post-merger  interest  in  Entravision  would  comply  with  the  Commissions  EDP  attribution  standard.  NHPI,  in 
 particular,  contends  that  any  EDP  analysis  should  include  accounts  payable  owed  to  Univision  from  Entravision. 


 39.  On  November  29,  2002,  the  staff  released  a  letter  (  Letter  of  Inquiry)  requesting  information  to  assist  in  determining  whether  the  proposed  future  interest  in  Entravision  would  be 
 nonattributable.  The  Letter  of  Inquiry  requested  information  regarding  the  class  or  classes  of  Entravision  shares  Univision  will  hold  after  consummation  (including  those  shares  that  are  not  currently 
 voting)  and  their  rights  with  respect  to  the  Entravision  Board  of  Directors.  78  The  Letter  of  Inquiry  requested  information  regarding  any  accounts  payable  owed  to  Univision  from  Entravision,  and  a 
 showing  demonstrating  compliance  with  the  EDP  standard. 
 40.  In  response,  Univision  further  amended  its  showing  to  state  that  Univision  currently  has  no  representation  on  Entravisions  board  of  directors,  and,  prior  to  consummation  of  the  HBC  merger,  all 


 of  Univisions  stock  holdings  in  Entravision  will  be  converted  into  a  new  preferred,  nonvoting  stock  that  has  no  right  of  board  representation  or  other  board  rights.  79  Univision,  however,  represented  that  the 
 new  class  of  stock  will  have  approval  rights  over  certain  corporate  actions  consistent  with  those  previously  approved  by  the  Commission.  As  mentioned  above,  the  DOJ  entered  into  a  Consent  Decree 
 with  Univision  on  March  25,  2003,  requiring  Univision  to  remove  and/  or  modify  certain  of  these  rights.  80  As  approved  by  the  DOJ,  Univision  has  proposed  to  hold  approval  rights  only  over  (1)  merger,  sale, 
 liquidation,  and  dissolution  of  Entravision;  (2)  amendment,  alteration  or  repeal  of  the  Certificate  of  Incorporation  so  as  to  adversely  affect  the  rights  of  Univisions  stock;  (3)  issuance  or  sale  of  the  proposed 
 class  of  stock;  and  (4)  any  sale  of  a  station  affiliated  with  a  Univision-  owned  network. 
 41.  NHPI  challenges  several  of  the  originally  proposed  approval  rights,  arguing  that  they  far  exceed  the  level  of  influence  required  for  the  Commission  to  find  that  Univisions  interest  in 


 Entravision  is  attributable,  and  that  the  Commission  could  find  that  Univisions  proposed  rights  will  give  it  de  facto  control  over  Entravisions  operating  policies.  81  Univision  has,  however,  with  the 


 75  47  C.  F.  R.    73.3555,  Note  2(  a). 
 76  Applications  for  Transfer  of  Control,  Exhibit  16,  n.  1. 
 77  August  29,  2002  Amendment  at  n.  1. 
 78  November  29,  2002  Letter  of  Inquiry. 
 79  December  9,  2002,  Response  to  Letter  of  Inquiry  at  1. 
 80  Infra    6. 
 81  December  16,  2002,  Reply  of  NHPI  at  3. 
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 exception  of  the  proposed  rights  retained  following  discussions  with  the  DOJ,  removed  any  proposed  approval  rights  over  corporate  actions  from  the  new  class  of  nonvoting  stock  to  be  created  following  the 
 merger.  NHPIs  argument,  therefore,  that  the  constellation  of  originally  proposed  approval  rights  would  result  in  attributable  influence  on  the  part  of  Univision  is  moot. 


 42.  With  respect  to  the  approval  rights  that  remain,  the  Commission  has  consistently  held  that  a  nonvoting  shareholders  approval  rights  over  fundamental  corporate  matters  are  permissible  investor 
 protections  that  neither  restrict  a  corporations  discretion  or  rise  to  the  level  of  attributable  influence.  82  Such  fundamental  or  extraordinary  corporate  actions  are,  as  the  terms  imply,  those  that 
 fundamentally  alter  the  character  of  the  nonvoting  shareholders  investment.  Determining  what  rights  involve  fundamental  corporate  matters  in  any  particular  case  is  fact-  based.  In  the  past,  however,  the 
 Commission  has  allowed  nonvoting  shareholders  to  hold  several  different  protection  rights  without  forfeiting  their  nonattributable  status  due  to  the  Commissions  desire  not  to  disrupt  the  flow  of  capital  to 
 station  owners,  and  its  determination  that  such  rights  protect  the  investor  as  opposed  to  provide  an  opportunity  for  the  investor  to  influence  the  overarching  policymaking  activities,  programming  decisions 
 or  day-  to-  day  operations  of  a  station.  83  Specifically,  the  Commission  has  permitted  approval  rights  regarding  the  merger,  sale,  liquidation  or  winding  up  of  an  entity;  the  sale  of  all  or  substantially  all  of  the 
 entitys  assets;  the  amendment  of  the  Certificate  of  Incorporation;  and  the  issuance  or  sale  of  stock.  84  These  decisions  are  implicitly  premised  on  the  fact  that  such  changes  by  necessity  alter  the  fundamental 
 character  of  the  nonvoting  shareholders  investment,  and  that  some  provisions  to  protect  nonvoting  shareholders  against  such  changes  are  reasonably  necessary  to  promote  investment.  We  therefore 
 conclude  here  that  Univisions  similar  proposed  rights  in  Entravision  do  not  undermine  the  nonattributable  nature  of  Univisions  relationship  with  Entravision. 


 43.  On  March  10,  2003,  the  staff  released  a  letter  requesting  further  information  regarding  the  proposed  approval  right  over  the  sale  of  any  Entravision  station  affiliated  with  a  Univision-  owned 
 network.  In  response,  Univision  argues  that  this  proposed  approval  right  is  also  consistent  with  protections  the  Commission  has  previously  permitted.  Univision  cites,  in  particular,  the  nonvoting 
 shareholder  rights  and  other  interests  NBC  currently  holds  in  Paxson  Communications  Corporation,  which  the  Commission  approved  in  Telemundo  Communications,  Inc.  85  Univision  states  that,  among 
 several  other  rights  set  forth  in  a  1999  Investment  Agreement,  NBC  has  the  right  to  approve  the  sale  of  any  Paxson  station  in  a  top-  20  TV  market,  and  a  right  of  first  refusal  regarding  the  sale  of  any  Paxson 
 station.  According  to  Univision,  these  nonvoting  shareholder  rights  are  coupled  with  (1)  a  32%  nonvoting  equity  interest  in  Paxson  convertible  to  a  voting  interest  upon  prior  Commission  consent;  (2)  a 
 warrant  and  call  option  for  ten  years  permitting  NBC  to  acquire  a  super-  majority  voting  bloc;  (3)  Joint  Sales  Agreements  and  Time  Brokerage  Agreements  involving  individual  stations,  and  a  National  Sales 
 Agreement  for  all  Paxson  stations;  and  (4)  the  right  to  nominate  3  members  to  the  Paxson  Board  of  Directors  who  are  not  NBC  employees.  Univision  argues  that  the  rights  proposed  here  are  more  limited 
 than  those  the  Commission  permitted  NBC  to  hold,  especially  in  light  of  the  fact  that  the  proposed 


 82  Shareholders  of  AMFM,  Inc.,  15  FCC  Rcd  at  16078;  see  also  BBC  License  Subsidiary  L.  P.,  10  FCC  Rcd  7926, 
 7933  (1995);  Quincy  D.  Jones,  11  FCC  Rcd  at  2487;  Roy  M.  Speer,  11  FCC  Rcd  14147,  14155-  58  (1996).  83 
 See  Roy  M.  Speer,  11  FCC  Rcd  at  14157-  58.  84 
 See  Shareholders  of  AMFM,  Inc.,  15  FCC  Rcd  at  16078.  85 
 Telemundo  Communications,  Inc.,  17  FCC  Rcd  at  6971. 
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 nonvoting  stock  will  have  no  board  representation  rights.  Univision  further  argues  that,  in  National  Broadcasting  Company,  Inc.,  the  Commission  held  that  a  networks  combination  of  a  49%  equity  interest 
 along  with  its  provision  of  programming  did  not  create  an  attributable  interest  in  the  licensee  of  an  affiliated  station,  even  where  the  network  also  retained  a  veto  power  over  various  business  transactions, 
 including  the  sale  of  the  station  or  dissolution  of  the  licensee.  86 
 44.  Because  Entravision  owns  18  full-  service  television  stations,  almost  all  of  which  are  affiliated  with  a  Univision-  owned  network,  Univisions  approval  right  restricts  the  sale  of  almost  every 
 Entravision  television  station.  The  sale  of  any  single  one  of  these  television  stations  cannot  be  considered  a  fundamental  or  extraordinary  corporate  action.  By  contrast,  in  National  Broadcasting  Co.,  the 
 licensee  owned  only  one  television  station  and  thus  a  sale  of  that  one  station  was,  indeed,  a  fundamental  corporate  matter,  analogous  to  a  sale  of  all  or  substantially  all  of  the  licensees  assets.  Similarly,  in 
 Quincy  D.  Jones,  the  Commissions  finding  that  a  nonvoting  interest  in  the  licensee  was  nonattributable  was  explicitly  based  upon  its  interpretation  of  an  approval  right  nominally  over  the  sale  or  other 
 disposition  of  any  material  portion  of  the  licensees  assets  other  than  in  the  ordinary  course  of  business,  as  meaning  only  the  right  to  approve  where  all  or  substantially  all  of  the  licensees  assets  were  to  be 
 sold.  87  Moreover,  even  in  permitting  nonattributable  shareholders  the  right  to  participate  in  extraordinary  corporate  actions,  the  Commission  has  stated  that  those  rights  must  be  narrowly  circumscribed  for  the 
 interest  to  remain  nonattributable.  88  Here,  permitting  the  proposed  veto  right  would  enable  Univision  not  only  to  be  an  exclusive  network  program  supplier  to  virtually  all  Entravision  television  stations,  but  to 
 control  the  sale  of  virtually  any  Entravision  television  station  as  well.  Contrary  to  Univisions  argument,  the  level  of  influence  over  the  core  operations  of  Entravisions  television  stations  that  would  result  would 
 exceed  that  permitted  in  Telemundo  Communications,  Inc.,  where  NBCs  approval  right  over  station  sales  was  limited  to  the  top-  20  TV  markets.  89  In  any  event,  insofar  as  the  Commissions  order  in  Telemundo 
 Communications,  Inc.,  can  be  construed  to  be  inconsistent  with  this  or  prior  opinions,  we  decline  to  follow  it.  Accordingly,  we  conclude  that  Univisions  proposed  right  to  veto  the  sale  of  any  Entravision 
 television  station  affiliated  with  a  Univision  network  would  render  its  interest  in  Entravisions  television  stations  attributable. 


 45.  In  a  June  25,  2003,  filing,  Univision  argues  that,  even  should  we  attribute  Univisions  interest  in  Entravisions  television  stations,  the  approval  right  over  affiliate  sales  does  not  extend  to 
 Entravisions  radio  stations  and  that,  therefore,  its  interest  in  Entravisions  radio  stations  should  not  be  attributable.  Univision  also  argues  that  the  Department  of  Justices  Consent  Decree  prevents  it  from 
 exercising  any  influence  over  Entravisions  radio  business.  90  In  the  circumstances  present  here,  we  agree  that  attribution  of  Univisions  interest  in  Entravisions  television  stations  does  not  extend  to  Entravisions 
 radio  stations.  As  Univision  notes,  its  sale  approval  right  does  not  extend  to  Entravisions  radio  stations.  Moreover,  the  Consent  Decree  prohibits  Univision  from  using  or  attempting  to  use  any  rights  or  duties 


 86  March  12,  2003,  Response  to  Letter  of  Inquiry  at  2.  See,  also,  National  Broadcasting  Company,  Inc.,  6  FCC  Rcd 
 4882  (1991).  87 
 Quincy  D.  Jones,  11  FCC  Rcd  at  2847  n.  15.  88 
 Id.  at  2847.  89 
 We  note  that  in  Telemundo  Communications,  Inc.,  no  party  specifically  challenged  the  veto  right  over  the  sale  of  a  top-  20  station,  and  that  right  was  not  even  mentioned  in  the  Commissions  decision,  much  less  discussed. 


 90  June  25,  2003,  Letter  of  Univision  Communications,  Inc.,  at  11-  12. 
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 under  any  television  affiliation  agreement  or  relationship  between  Univision  and  Entravision  (including  any  duties  Univision  may  have  as  a  national  sales  representative  for  Entravision),  to  influence  Entravision 
 in  the  conduct  of  Entravisions  radio  business,  as  well  as  prohibits  Univision,  subject  to  certain  exceptions,  from  communicating  to  or  receiving  from  any  officer,  director,  manager,  employee  or  agent 
 of  Entravision  any  nonpublic  information  regarding  any  aspect  of  [Univisions]  or  Entravisions  radio  business,  including  any  plans  or  proposals  with  respect  thereto.  91  The  Consent  Decree  also  contemplates 
 an  antitrust  compliance  program,  along  with  designation  of  an  Antitrust  Compliance  Officer,  whose  responsibility  will  be  to,  on  a  continuing  basis,  supervise  the  review  of  current  and  proposed  activities  to 
 ensure  compliance  with  the  [Consent  Decree].  92  We  conclude  that  the  absence  of  the  contractual  approval  right  over  the  sale  of  Entravisions  radio  stations  and  the  Consent  Decrees  provisions 
 reasonably  prevent  Univision  from  exercising  a  cognizable  level  of  influence  over  the  core  operating  functions  of  Entravisions  radio  stations  while  those  provisions  remain  in  effect.  We  conclude,  moreover, 
 that  attribution  of  Univisions  interest  in  Entravisions  television  stations  alone  will  not  result  in  violation  of  the  Commissions  radio/  television  cross-  ownership  rule.  93 


 46.  We  recognize  that  the  Consent  Decree,  according  to  its  terms,  expires  within  10  years  after  entry  of  the  proposed  Final  Judgment  by  the  Court.  Because  we  rely  on  the  insulation  effects  of  the 
 Consent  Decree  in  reaching  our  attribution  determination  in  this  case,  we  will  require  Univision  to  notify  the  Commission  if  the  Consent  Decree  expires,  terminates,  or  the  relevant  provisions  change.  Upon  such 
 notification,  we  will  reevaluate  whether,  and  to  what  extent,  Entravision  should  be  attributed  to  Univision  and  what  further  requirements,  if  any,  we  should  impose  as  a  result  of  that  reevaluation. 


 47.  With  respect  to  whether  the  proposed  future  interest  in  Entravision  would  comply  with  the  EDP  Rule,  the  other  issue  raised  in  the  November  29,  2002,  Letter  of  Inquiry,  the  Commission,  in  the 
 Attribution  Reconsideration,  stated  that  an  applicant  may  determine  its  total  assets  by  using  the  stations  book  value  as  defined  under  standard  financial  accounting  practices,  or  some  other  value,  including  the 
 fair  market  value,  provided  the  valuation  is  reasonable.  94  In  response  to  the  November  29,  2002,  Letter  of  Inquiry,  Univision  provided  an  audited  financial  statement  for  the  year  ending  on  December  31,  2001, 
 as  well  as  unaudited  financial  statements  for  the  period  covering  January  1,  2002,  to  October  31,  2002.  These  cover  roughly  the  same  period  as  the  balance  sheets  provided  to  the  SEC  as  part  of  its  Form  10-  Q 
 filing  for  the  quarterly  period  ending  September  30,  2002.  The  balance  sheet  provided  to  the  SEC  in  the  Form  10-  Q  filing  was  unaudited.  According  to  the  calculation  provided,  which  includes  accounts  payable 
 owed  to  Unvision  from  Entravision,  Univisions  post-  merger  interest  in  Entravision  would  fall  below  the  33%  threshold  of  total  assets  set  forth  in  the  EDP  attribution  standard.  Having  reviewed  the  showing,  we 
 conclude  that  Univisions  proposed  interest  in  Entravision  would  comply  with  the  EDP  standard. 


 91  Consent  Decree,  at  7. 
 92  Id.  at  11-  12. 
 93  Even  though  the  effective  date  of  the  new  rules  has  been  stayed,  we  note,  as  an  aside,  that  attribution  of 
 Univisions  interest  in  Entravisions  television  stations  alone  will  not  implicate  the  Cross-  Media  Limits  set  forth  in  the  2002  Biennial  Review  Order. 


 94  Attribution  Reconsideration,  16  FCC  Rcd  at  1110.  [  I]  f  the  issue  arises  in  connection  with  a  transfer  or 
 assignment  application  or  an  ownership  report  filed  after  consummation  of  an  assignment  or  transfer,  the  applicant  must  use  the  sales  price  of  the  transfer  or  assignment  as  the  total  asset  value.  Id.  No  Entravision  station  is  being 


 transferred  as  a  result  of  this  merger  and,  therefore,  Univision  may  use  any  reasonable  valuation  method. 
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 48.  We  conclude  that,  based  on  the  representations  contained  in  the  responses  to  the  Letters  of  Inquiry  and  related  record  evidence,  Univision  has  adequately  demonstrated  that  its  interest  in 
 Entravisions  radio  stations  following  consummation  will  not  be  attributable  under  our  attribution  criteria.  Our  conclusion  rests  upon  Univisions  representation  that  its  voting  stock  interest  in  Entravision 
 following  consummation  will  be  less  than  5%,  which  includes  stock  held  by  officers  and  directors  of  Univision;  that  the  total  debt  and  equity  held  by  Univision  following  consummation  will  not  exceed  33% 
 of  the  total  asset  value  of  Entravision,  which  includes  debt  and  equity  held  by  officers  and  directors  of  Unvision;  and  that  Univision,  prior  to  consummation,  will  divest  itself  of  any  class  of  stock  permitting  it 
 to  designate  members  to,  or  otherwise  influence  the  Entravision  Board  of  Directors.  Though  we  find  that  Univisions  right  to  approve  any  sale  of  any  Entravision  television  station  affiliated  with  a  Univision-owned 
 network  will  render  Univisions  interest  in  Entravisions  television  stations  attributable,  we  do  not  extend  this  finding  of  attribution  to  Entravisions  radio  stations. 


 49.  NHPI  nevertheless  argues  that,  despite  the  pledges  made  in  the  application,  amendments  and  in  responses  to  the  Letters  of  Inquiry,  Univision  will  continue  to  have  significant  influence  over  the 
 business  of  Entravision  such  that  its  interest  should  be  attributable.  NHPI  cites  as  support  a  network  affiliation  agreement  between  Univision  and  Entravision  that  gives  Entravision  stations  the  exclusive 
 right  to  broadcast  Univision  programming  24  hours  a  day.  NHPI  also  states  that  Univision  acts  as  Entravisions  exclusive  national  advertising  representative  firm.  NHPI  contends  that  Entravision  has 
 acknowledged  the  importance  of  its  relationship  with  Univision  in  various  SEC  filings  and  further  questions  whether  Univision  can  reasonably  be  expected  to  alter  this  relationship  after  the  merger. 
 Univision  argues  that  its  status  as  a  program  supplier  to  Entravision  does  not,  in  itself,  warrant  attribution.  Univision  states  that,  instead,  the  Commission  applies  the  EDP  standard  to  such  relationships  in  order  to 
 determine  attribution.  95 
 50.  In  the  Attribution  Order,  the  Commission  specifically  declined  to  treat  program  supply  relationships,  such  as  network  affiliation  agreements,  as  per  se  attributable,  rather  subjecting  such 


 relationships  to  the  EDP  standard.  96  To  the  extent  it  may  be  appropriate  to  address  concerns  regarding  a  particular  affiliation  agreement,  the  Commission  does  so  within  the  context  of  the  EDP  analysis,  97  or  our 
 policies  and  precedent  involving  attribution  of  specific  interests.  The  Commission  has  also  consistently  held  that  advertising  representation  does  not  constitute  an  attributable  interest,  having  removed  such 
 interests  from  consideration  under  the  former  cross-  interest  policy  before  the  Commission  released  the  Attribution  Order.  98 


 95  47  C.  F.  R.    73.3555,  Note  2(  i). 
 96  Attribution  Order,  14  FCC  Rcd  at  12599-  600. 
 97  Id.  at  12579.  See  also  Sunburst  Media,  L.  P.,  17  FCC  Rcd  at  1368. 
 98  See  Shareholders  of  AMFM,  Inc.,  15  FCC  Rcd  at  16076.  Under  the  Golden  West  policy,  the  Commission  held 
 that  representation  of  a  station  by  a  sales  representative  owned  wholly  or  partially  by  the  licensee  of  a  competing  station  in  the  same  community  or  service  area  would  result  in  attribution.  See  Golden  West  Broadcasters,  16  FCC 


 2d  918  (1969).  However,  the  Commmission  abolished  this  policy  with  respect  to  attribution,  holding  that  market  forces  and  the  remedies  available  under  antitrust  statutes  were  sufficient  to  deter  the  anti-  competitive  practices  the 
 policy  was  meant  to  address.  See  Representation  of  Stations  by  Representatives  Owned  by  Competing  Stations  in  the  Same  Area,  87  F.  C.  C.  2d  668  (1981).  The  Commission  has  also  granted  Univision  a  permanent  waiver  of  the 
 Network  Representation  Rule,  which  prohibits  stations,  other  than  those  owned  and  operated  by  their  network,  from  (continued....) 
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 51.  A  major  program  supplier,  as  that  term  is  defined  by  the  Attribution  Order,  will  have  an  attributable  interest  if  its  combined  debt  and  equity  exceeds  33%  of  the  total  asset  value  of  the 
 licensee.  As  noted  above,  based  on  the  record  evidence,  including  the  responses  to  the  Letters  of  Inquiry,  Univision  will  not  hold  more  than  33%  of  the  total  asset  value  of  Entravision.  99  As  we  stated  before,  any 
 challenge  to  the  adequacy  of  the  EDP  standard  is  more  appropriately  raised  within  the  context  of  a  rulemaking  proceeding. 


 D  Elgin  Informal  Objection 
 52.  Elgin  FM  Limited  Partnership  owns  three  FM  broadcast  radio  stations  in  Texas  and  competes  against  stations  owned  by  HBC.  Elgin  argues  that  the  combination  of  Univision  and  HBC  will 


 essentially  create  a  Spanish  language  media  monopoly  and  will  therefore  be  anticompetitive,  negatively  affecting  existing  and  future  Spanish  language  media  operators.  100  Elgin  also  argues  that  Univisions 
 relationship  with  other  companies  in  the  Spanish  language  music  entertainment  industry  means  that  Univision  will  be  able  to  control  all  aspects  of  Spanish  language  entertainment.  101  Elgin  further  states  that 
 because  Clear  Channel  (which  will  own  a  small  percentage  of  Univision  stock  if  the  transaction  is  approved)  controls  many  large  entertainment  venues,  it  is  questionable  whether  broadcasters  unaffiliated 
 with  either  Univision,  Entravision,  or  Clear  Channel  will  have  a  reasonable  opportunity  to  be  involved  with  one  of  those  venues  if  the  transaction  is  approved.  102  Finally,  Elgin  states  that  it  will  be  difficult  for 
 independent  Spanish  language  media  operators  to  generate  the  synergies  necessary  to  compete  with  media  giants  Univision  and  Clear  Channel.  103 


 53.  With  respect  to  the  claim  that  the  transaction  is  contrary  to  the  public  interest  because  it  is  anticompetitive,  parties  who  file  petitions  to  deny  an  application  have  the  burden  of  pleading  sufficient 
 facts  to  establish  a  prima  facie  case  that  grant  of  the  application  is  contrary  to  the  public  interest.  104  General  or  conclusory  allegations  or  those  based  simply  on  belief  are  not  sufficient  to  pass  this  test.  105 
 Elgin  provides  no  support  for  its  implicit  yet  essential  contention  that  HBCs  radio  stations  and  Univisions  television  stations  compete  in  the  same  product  market.  We  have  generally  assumed,  in  our 
 competition  analyses  of  radio  transactions,  that  radio  and  television  stations  do  not  compete  in  the  same 


 (...  continued  from  previous  page)  being  represented  by  their  network  in  the  non-  network  (spot)  advertising  sales  market.  Amendment  of    73.  658(  i)  of 
 the  Commissions  Rules,  5  FCC  Rcd  7280,  7282  (1990).  99 
 To  the  extent  NHPI  is  alleging  that  Univision  has  de  facto  control  over  Entravision,  we  conclude  that  NHPI  has  failed  to  raise  a  substantial  and  material  question  of  fact  that  Univision  controls  Entravisions  programming, 


 personnel  or  finances.  100 
 Elgin  Petition  at  1-  2.  101 
 Id.  at  2.  102 
 Id.  103 
 Id.  104 
 See  47  U.  S.  C.    309(  d)(  2);  Gencom  v.  FCC,  832  F.  2d  171,  181  (D.  C.  Cir.  1987).  105 
 See  Telemundo  Communications  Group,  Inc.,  17  FCC  Rcd  at  6962;  United  States  v.  FCC,  652  F.  2d  72,  89  (D.  C.  Cir.  1980)  (en  banc). 
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 product  market,  and  the  Department  of  Justice  has  followed  a  similar  assumption.  106  Elgin  has  provided  no  basis  to  rebut  that  assumption  in  this  case.  Indeed,  Elgin  has  failed  to  show  that  Univision  and  HBC 
 compete  against  each  other  to  any  extent  for  listeners  or  advertisers.  Moreover,  Elgin  has  not  shown  that  there  are  not  other  competitors  that  would  compete  against  Univision/  HBC  in  this  alleged  market,  or  what 
 Univision/  HBCs  share  of  this  market  would  be.  In  short,  Elgin  has  not  shown  how  this  merger  potentially  would  cause  anticompetitive  harms. 


 54.  With  regard  to  Elgins  claims  that  Univision  will  be  able  to  control  Spanish  language  entertainment  as  a  whole,  Elgin  has  not  stated  how  in  particular  it  will  be  harmed.  107  For  example,  while 
 it  notes  that  Univision  owns  record  companies,  it  has  not  stated  that  it  will  no  longer  be  able  to  play  recordings  from  those  companies.  While  Elgin  also  argues  that  Clear  Channel  controls  many 
 entertainment  venues,  that  control  exists  today.  If  anything,  the  transaction    which  will  result  in  Clear  Channel  having  a  lower  percentage  of  ownership  in  the  HBC  radio  stations  than  it  has  today    makes  it 
 less  likely  that  Clear  Channel  would  improperly  favor  HBC  stations  over  those  owned  by  Elgin  and  other  HBC  competitors.  The  same  is  true  with  regard  to  Elgins  comments  about  the  Katz  Media  Group,  an 
 advertising  marketing  representative  owned  by  Clear  Channel.  The  transaction  would  appear  to  ameliorate,  not  exacerbate,  any  competition  concerns  that  arise  from  the  relationship. 


 55.  Finally,  Elgin  complains  that  it  will  be  difficult  for  independent  operators,  such  as  itself,  to  generate  the  synergies  necessary  to  compete  with  Univision.  In  general,  though,  the  increased 
 competitive  effectiveness  that  may  result  from  a  transaction  is  not  a  reason  to  disapprove  it.  108  Elgin  has  not  explained  or  provided  evidence  as  to  why  such  increased  effectiveness  would  be  anticompetitive. 


 106  See  Rules  and  Policies  Concerning  Multiple  Ownership  of  Radio  Broadcast  Stations  in  Local  Markets,  Notice  of 
 Proposed  Rulemaking,  16  FCC  Rcd  19861,  19895  (2001).  See  Infra    59.  107 
 Media  Access  Project  (MAP)  alleges  that  Univision  makes  it  very  difficult  for  competitors  to  hire  Univisions  TV  personalities  or  obtain  marquee  programming.  July  25,  2003,  Letter  of  Media  Access  Project.  On  August  21, 


 2003,  Telemundo  Communications  Group,  Inc.,  filed  an  ex  parte  letter  making  similar  allegations,  as  well  as  alleging  that  Univision  has  precluded  it  from  promoting  its  programming  on  Entravisions  radio  stations.  August 
 21,  2003,  Letter  from  Telemundo  Communications  Group,  Inc.  Telemundo  has  suggested  a  series  of  conditions  which  it  claims  will  ensure  that  Univision  will  not  engage  in  further  alleged  anticompetitive  practices.  We  are  not 
 convinced  that  the  practices  alleged  by  Telemundo  and  MAP,  even  if  true,  will  translate  into  competitive  harms  in  this  case,  since  Spanish-  language  programming  sources  are  abundant  and  growing.  Telemundo,  for  instance,  has 
 recently  announced  that  it  has  gone  from  acquiring  all  of  its  content  from  outside  sources  to  producing  70%  of  its  own  programming.  July  28,  2003,  Communications  Daily,  at  11.  According  to  CEO  James  McNamara, 
 Telemundos  relationship  with  NBC  has  transformed  Telemundo  from  an  acquirer  of  programming  to  a  producer  of  content  that  is  specifically  geared  to  U.  S.  Hispanics.  Id.  With  respect  to  promotion  of  its  programming,  Univision 
 intends  to  divest  a  significant  portion  of  its  interest  in  Entravision  as  a  result  of  the  Consent  Decree  with  the  DOJ,  and  Univision  will  further  be  prohibited  from  influencing  Entravisions  radio  business.  Infra  at    45.  Entravision 
 has  approximately  52  full-  service  radio  stations  on  which  Telemundo  can  promote  its  programming  in  the  future.  Any  argument  that  Univision  would  use  its  relationship  with  its  HBC  radio  stations  to  prevent  Telemundo  from 
 promoting  its  programming  is  speculative  and  ultimately  irrelevant,  especially  since  we  find  below  that  there  exists  no  separate  Spanish-  language  media  competition  or  diversity  market.  Consequently,  we  do  not  believe 
 Telemundos  proposed  conditions  are  necessary  to  protect  the  public  interest.  108 
 See  MCI  Telecommunciations  Corp.  and  EchoStar  110  Corp.,  Order  and  Authorization,  16  FCC  Rcd.  21608,  21625  (1999)  (  The  public  interest,  however,  is  in  ensuring  robust  competition  and  not  in  protecting  the  financial 


 interest  of  particular  firms.). 
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 E  Ex  Parte  Submissions  of  SBS 
 56.  We  have  received  several  filings  from  SBS  relating  to  the  effects  of  the  merger  on  Spanish-  language  programming  and,  in  particular,  arguing  that  the  merger,  if  approved,  would  diminish 
 the  diversity  of  sources  available  to  Spanish-  language  speakers.  109  Citing  a  Pew/  Kaiser  Survey,  SBS  states  that  11%  of  Hispanics  speak  no  English  and  29%  speak  English  just  a  little.  SBS  contends  that, 
 for  approximately  40%  of  Hispanics,  English-  language  broadcast  media  are  of  little  or  no  relevance.  110  SBS  also  has  provided  a  number  of  declarations  from  advertisers  and  marketing  firms,  which  it  claims 
 support  the  conclusion  that  the  advertising  industry  views  the  Spanish-  language  market  as  separate.  Although  the  arguments  are  not  framed  precisely,  it  appears  that  SBS  is  alleging  potential  harms  from  the 
 proposed  transaction  both  to  competition  and  diversity  within  a  putative  Spanish-  language  submarket. 
 57.  We  are  not  convinced.  SBS  has  not  established  that  there  is,  for  competition  analysis,  an  identifiable  Spanish-  language  media  market  that  would  be  adversely  affected  by  the  proposed  transaction. 
 In  fact,  SBS  apparently  made  the  opposite  point  in  its  March  31,  2003,  SEC  Form  10-  K  when  it  stated  that  [  e]  ach  of  [its]  radio  stations  compete  with  both  Spanish-  language  and  English-  language  radio 
 stations  in  the  market....  111  Further,  with  respect  to  the  diversity  of  viewpoints  available  to  viewers  and  listeners  who  speak  primarily  or  only  Spanish,  we  find  no  lack  of  available  alternatives.  Indeed,  Spanish 
 speakers  likely  have  more  media  options  available  to  them  today  than  ever  in  this  countrys  history.  We  therefore  decline  to  limit  or  condition  our  approval  of  this  transaction  on  the  basis  of  its  purported  impact 
 on  Spanish-  speaking  audiences. 
 58.  First,  with  respect  to  alleged  competitive  harms,  SBS  has  failed  to  demonstrate  that  we  should  abandon  our  longstanding  reluctance  to  define  product  markets  based  on  programming  format  or 
 language.  112  In  particular,  for  purposes  of  applying  the  broadcast  multiple  ownership  rules,  the  Commission  previously  has  held  that  Spanish-  language  programming  does  not  constitute  a  separate 
 market,  113  and  that  format  choice  should  not  be  dictated  by  government  regulation  but  left  to  market  forces.  114  The  record  in  this  proceeding  offers  no  basis  to  disturb  those  conclusions. 


 59.  As  stated  above,  we  have  generally  assumed,  in  our  competition  analyses  of  radio  transactions,  that  radio  and  television  stations  do  not  compete  in  the  same  product  market,  an  approach 


 109  The  Commission  received  ex  parte  filings  from  SBS  on  June  11,  16,  20,  23,  and  26,  2003;  July  3,  14,  16,  21,  and 
 30,  2003;  and  August  5  and  6,  2003.  The  Commission  has  also  received  numerous  pro  se  comments  from  public  interest  organizations  and  individuals. 


 110  June  20,  2003,  Letter  from  SBS,  at  2. 
 111  July  23,  2003  Letter  from  Univision,  at  4. 
 112  See,  e.  g.,  Entertainment  Formats,  60  F.  C.  C.  2d  858  (1969),  recon.  denied,  66  F.  C.  C.  2d  78  (1977);  FCC  v.  WNCN 
 Listeners  Guild,  540  U.  S.  582  (1981)  (upholding  Commission  policy  that  the  public  interest  is  best  served  by  promoting  program  diversity  through  market  forces,  and  not  by  considering  station  formats  in  ruling  on  applications 


 for  license  renewal  or  transfer).  113 
 Spanish  Radio  Network,  10  FCC  Rcd  9954,  9956  (1995).  114 
 Entertainment  Formats,  60  FCC  Rcd  at  860-  861. 
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 the  DOJ  has  generally  followed.  115  The  record  in  this  proceeding  offers  no  basis  to  disturb  this  conclusion.  We  also  note  that  our  conclusions  are  consistent  with  the  actions  of  the  Department  of 
 Justice,  Antitrust  Division  in  this  case,  which,  after  performing  its  own  investigation,  did  not  pursue  possible  market  power  allegations  with  regard  to  a  purported  Spanish-  language  television-  radio  market.  116 
 In  response  to  our  longstanding  precedent  and  the  actions  of  the  DOJ,  SBS  has  provided  only  anecdotal  evidence  that  Spanish-  language  radio  and  television  should  be  regarded  as  part  of  the  same  product 
 market  for  competition  purposes.  The  declarations  of  advertisers  and  marketing  agencies  are  similarly  unconvincing.  Demographic  statistics  raised  in  sales  presentations  do  not  demonstrate  the  existence  of  a 
 common  Spanish-  language  radio  and  television  product  market  for  purposes  of  competition  analysis,  as  illustrated  by  the  fact  that  Univision  has  also  submitted  marketing  materials  comparing  its  ratings  in  local 
 markets  to  English-  formatted  competitors.  117  Given  the  DOJs  decision,  we  see  no  reason,  within  the  context  of  this  case,  to  question  our  general  presumption  that  television  and  radio  stations  compete  in 
 separate  product  markets.  To  the  extent  SBS  is  suggesting  that  separate  Spanish-  language  radio  market  exists  that  would  be  harmed  by  the  proposed  merger,  we  are  unpersuaded.  This  transaction  will  have  no 
 effect  on  radio  concentration  because  Univision  owns  no  radio  stations.  118 
 60.  In  any  event,  even  if  we  were  to  conclude  that  Spanish-  language  programming  could  be  regarded  as  a  separate  product  market,  competitive  analysis  considers  current  market  participants  as  well 
 as  ease  of  entry  into  the  relevant  market.  With  respect  to  existing  market  participants,  we  note  that  Telemundo  is  a  direct  and  substantial  competitor  to  Univision.  And,  while  Telemundo  has  sought  to 
 impose  conditions  on  the  current  merger  based  on  asserted  competitive  concerns,  we  do  not  believe  there  is  any  real  risk  that  Telemundo  will  be  unable  to  effectively  compete  even  without  those  conditions.  119 
 Telemundo  is  a  subsidiary  of  GE/  NBC,  an  organization  with  access  to  broad  financial  resources  and  nearly  unequaled  access  to  the  talent  and  program  production  expertise  necessary  to  a  successful  network. 
 Moreover,  the  number  of  programming  services  targeting  the  Spanish  speaking  population  of  the  United  States  is  substantial  and  growing.  The  Hispanic  audience,  even  those  who  are  Spanish-  dominant,  are 
 not  limited  to  broadcast  radio  and  television  programming,  but  may  also  access  Spanish-  language  programming  via  satellite  and  cable.  The  May  2003  Rivera  Study,  cited  by  SBS  in  its  June  20,  2003, 
 filing  notes  that  new  technologies  offer  access  to  Spanish-  language  programs  that  were  simply  unavailable  until  the  recent  past.  120  Univision,  in  a  May  14,  2003,  filing,  also  points  out  that  Hispanics 
 have  multiple  Spanish-  language  options  available,  including  at  least  26  Spanish-  language  networks 
 115  Infra    53. 
 116  See  United  States  of  America  v.  Univision  Communications,  Inc.  and  Hispanic  Broadcasting  Corporation, 
 Competitive  Impact  Statement,  Civil  Action  No.  1:  03CV00758,  at  5.  117 
 See  July  23,  2003,  Letter  from  Univision,  Exhibit  1.  We  are,  for  similar  reasons,  unmoved  by  the  opinions  contained  in  the  Lehman  Brothers  Report  submitted  by  SBS  on  June  23,  2003.  Marketing  and/  or  investment 


 materials  may  include  terms  of  art,  e.  g.,  market  or  market  dominance,  but  use  them  in  a  more  pedestrian,  non-legal  sense.  A  market  that  an  investor  may  care  about  may  be  quite  different  than  an  economic  market  for 
 purposes  of  competition  analysis.  118 
 As  discussed  in  further  detail  above,  we  have  already  concluded  that  Univision  will  not  have  an  attributable  interest  in  Entravisions  radio  stations.  Infra    45. 


 119  See  n.  107,  supra. 
 120  Latino  Viewing  Choices:  Bilingual  Television  Viewers  and  the  Language  Choices  They  Make,  by  Louis  De 
 Sipio,  Ph.  D.,  The  Tomas  Rivera  Policy  Institute  (  Rivera  Study)  at  5. 
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 available  on  broadcast  television,  cable,  or  satellite.  121  Consistent  with  the  general  market  trend,  we  expect  new  cable  channels  geared  to  a  Hispanic  audience  to  be  introduced  in  the  future.  122 
 61.  Further,  with  respect  to  barriers  to  entry  into  the  alleged  Spanish-  language  market,  the  record  suggests  that  competitors  may  enter  and  exit  the  market  with  relative  ease.  Using  Arbitron  figures, 
 Univision  alleges  that  99  new  Spanish-  language  radio  stations  were  introduced  between  2001  and  2002.  123  A  separate  review  of  the  BIA  Publications  Media  Access  Pro  database  by  Commission  staff 
 reveals  that,  during  the  last  four  years,  approximately  163  full-  service  Spanish-  language  radio  stations  switched  from  an  exclusive  English-  language  format  and  approximately  77  full-  service  English-  language 
 radio  stations  switched  from  an  exclusive  Spanish-  language  format.  124  Although  it  is  unclear  how  many  of  these  format  changes  were  the  result  of  ownership  changes,  the  record  evidence,  as  well  as  the  staffs 
 own  investigation  of  the  issue,  support  the  conclusion  that  barriers  to  changing  a  stations  format  do  not  preclude  entry  of  new  Spanish-  language  radio  stations.  Thus,  even  if  there  were  a  Spanish-  language 
 market,  we  would  have  no  basis  to  conclude  that  this  proposed  transaction  would  translate  into  competitive  harms. 


 62.  With  respect  to  the  proposition  that  the  proposed  transaction  will  unreasonably  undermine  diversity  of  programming  available  to  the  Spanish-  language  community,  SBS  similarly  has 
 failed  to  make  its  case.  Although  the  effective  date  of  the  new  rules  set  forth  in  the  2002  Biennial  Review  Order  has  been  stayed  by  the  3  rd  Circuit  Court  of  Appeals,  the  reasoning  in  that  order  remains  pertinent. 
 In  that  order,  we  clarified  that  our  primary  diversity  concern  relates  to  viewpoint  diversity,  i.  e.,  do  one  or  a  few  owners  have  the  ability  to  filter  out  certain  messages  or  viewpoints.  125  Accordingly,  our  focus  in 
 reviewing  the  allegation  that  the  transaction  should  be  prohibited  or  conditioned  on  diversity  grounds  cannot  be  limited  to  its  purported  impact  on  viewpoint  diversity  provided  by  broadcast  outlets,  but  must 
 encompass  all  of  the  media  outlets  available  to  purveyors  of  viewpoints  presumably  targeted  to  Hispanics. 
 63.  The  record  evidence  does  not  demonstrate  that  the  Hispanic  audience  lacks  a  diverse  mix  of  local  or  national  programming  alternatives.  The  Rivera  Study  notes  that  Latinos  have  a  wider  palette 
 of  television  programming  options  than  does  the  population  as  a  whole.  126  Interestingly,  the  Rivera  Study  included  respondents  who  claimed  to  be  Spanish-  dominant  with  weak  English-  speaking  skills  (as 
 demonstrated  by  the  fact  that  80%  of  the  respondents  responded  to  the  survey  in  Spanish).  127  Fully 


 121  May  14,  2003,  Letter  of  Univision  Communications,  Inc.,  at  4.  Univisions  assertion  is  based  on  a  Hispanic 
 Television  Directory  available  at  www.  tvweek.  com/  hispanictv/.  122 
 See,  e.  g.,  Lifestyle  Programming:  Scripps  Plans  Spanish-  Language  Cable  Net  On  Its  How-  To  Model,  Broadcasting  and  Cable  (Sept.  23,  2002). 


 123  May  14,  2003,  Letter  of  Univision  Communications,  Inc.,  at  4. 
 124  SBSs  July  21,  2003,  filing  also  shows  that  35  existing  stations  have  converted  to  a  Spanish-  language  format  in 
 the  top  ten  Hispanic  markets  over  the  last  3  years,  which  also  indicates  a  significant  potential  for  new  entry.  July  21,  2003,  Letter  of  SBS,  at  4. 


 125  2002  Biennial  Review  Order,    19-  35. 
 126  Rivera  Study  at  1.  One  of  the  purposes  behind  the  study  was  to  explain  the  overwhelming  bilingual  viewing 
 pattern  in  the  Latino  community.  127 
 Id.  at  3. 
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 three-  quarters  of  Latinos  routinely  watch  television  in  English  and  Spanish,  and  approximately  two-thirds  of  respondents  reported  that  children  in  the  household  preferred  English-  language  programming 
 while  just  4  percent  preferred  Spanish-  language  programming.  128  Using  Nielson  and  Arbitron  data  as  support,  Univision  points  out  that  over  99%  of  all  Hispanic  television  households  in  the  United  States 
 watch  one  or  more  English-  language  broadcast  networks;  that  [  i]  n  the  markets  in  which  HBCs  stations  are  located,  an  average  of  nearly  two-  thirds  of  all  Hispanics  listen  to  English-  language  radio  stations; 
 and  that  Hispanics  spend  the  majority  (53.4%)  of  their  radio  listening  time  listening  to  English-  language  formats.  129  For  the  majority  of  Spanish-  speaking  citizens,  therefore,  the  range  of  available  outlets 
 includes  both  English  and  Spanish-  language  alternatives  and  is,  in  fact,  broader  than  that  available  to  the  larger  population. 


 64.  Even  if  we  were  to  narrow  our  focus  to  include  only  outlets  that  provide  programming  in  Spanish,  we  would  not  be  able  to  conclude  that  this  proposed  transaction  would  result  in  a  single 
 gatekeeper  for  diversity  purposes.  On  the  local  level,  there  appears  to  be  no  dearth  of  new  Spanish-language  radio  stations  entering  local  markets,  130  and,  as  discussed  above,  more  new  radio  stations  have 
 switched  to  the  Spanish-  language  format  over  the  last  four  years  than  have  switched  away  from  it.  131  Moreover,  in  communities  with  large  Hispanic  populations,  it  is  not  uncommon  to  find  one  or  more  local 
 newspapers  published  in  Spanish.  132  In  addition,  English-  language  programs  can  be  broadcast  in  Spanish  by  use  of  the  Secondary  Audio  Program  (SAP).  133  According  to  Nielsen  figures,  SAP  penetration,  as 
 defined  by  the  percentage  of  households  owning  a  SAP-  capable  device,  has  increased  from  68.  4%  in  June  2002  to  76.  1%  in  June  2003.  134  As  of  August  2000,  between  one-  third  and  one-  half  of  the  broadcast 


 128  Id.  at  1,  6.  A  1998  study  by  the  Tomas  Rivera  Policy  Institute  concluded  that  [  o]  nly  26  percent  of  respondents 
 watched  the  news  exclusively  in  Spanish,  and  that  [  a]  roughly  equal  number  watched  the  news  primarily  and  exclusively  in  English.  Talking  Back  to  Television:  Latinos  Discuss  How  Television  Portrays  Them  and  the 


 Quality  of  Programming  Options,  by  Louis  DeSipio,  Ph.  D.,  Tomas  Rivera  Policy  Institute  (1998  Rivera  Study),  at  4.  This  contrasted  sharply  with  entertainment  programming,  where  just  20%  of  respondents  watched  in  both 
 English  and  Spanish.  Id.  at  5.  129 
 May  14,  2003,  Letter  of  Univision  Communications,  Inc.,  at  4  (emphasis  in  original).  The  authors  of  the  Rivera  Study  suggest  that  [  t]  he  fact  that  bilingual  Latino  viewers  are  overwhelmingly  made  up  of  immigrants  and,  to  a 


 lesser  extent,  the  children  of  immigrants  indicates  that,  if  current  trends  continue,  U.  S.-  born  Latinos  will  move  away  from  bilingual  viewing  and  Spanish-  language  television.  Rivera  Study  at  11. 
 130  According  to  the  Neilsen  figures  cited  by  Univision,  the  number  of  Spanish-  language  radio  stations  has  increased 
 from  600  in  2001  to  699  in  2002.  Arbitron,  Radio  Today  2002  Edition  and  2003  Edition,  38,  48.  131 
 See  Infra    61.  132 
 Spanish-  speaking  residents  of  New  York  and  Miami,  for  instance,  are  served  by  general  circulation  newspapers  Hoy  and  El  Nuevo  Herald,  respectively.  As  noted  recently  in  the  Washington  Post,  Spanish-  language  newspapers 


 will  also  be  debuting  in  Dallas,  Orlando,  and  Chicago.  Spanish-  Language  Media  Expand,  Washington  Post,  Page  A1  (August  11,  2003).  Many  smaller  cities,  such  as  Lawrence,  Massachusetts,  are  also  served  by  Spanish-  language 
 newspapers.  133 
 Telemundo  has  also  recently  announced  that  it  will  provide  English-  language  closed  captioning  for  its  Spanish-language  programming  by  September  2003.  July  28,  2003,  Communications  Daily,  at  12. 


 134  The  relatively  low  levels  of  the  use  of  SAP  among  respondents  who  had  access  to  such  technology  indicates  that 
 these  respondents  do  not  perceive  that  they  are  short  of  Spanish-  language  programming  options.  Rivera  Study  at  10. 
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 stations  in  the  top  25  DMAs  were  already  broadcasting  on  the  SAP  channel.  135  As  a  result,  English-language  networks  and  their  local  affiliates  can  reach  a  large  proportion  of  Spanish  speakers  through 
 either  English-  language  programming  or  through  the  SAP  channel.  Nationally,  the  number  of  cable  and  satellite  delivered  programming  services  targeted  at  Spanish  speaking  viewers  is  large  and  growing. 


 65.  There  is,  in  sum,  no  shortage  of  media  outlets  available  to  Spanish  speaking  audiences  in  the  United  States.  Given  the  wide  variety  of  programming  alternatives  described  above,  136  as  well  as 
 Hispanic  viewing  habits  and  the  ease  of  entry  into  the  Spanish-  language  format,  we  simply  cannot  conclude  that  the  Hispanic  or  Spanish-  speaking  audience  constitutes  a  separate,  insular  diversity  or 
 competition  market. 
 IV.  CONCLUSION 
 66.  Section  310(  d)  of  the  Communications  Act  provides  that  no  station  license  shall  be  transferred  or  assigned  until  the  Commission,  upon  application,  determines  that  the  public  interest, 


 convenience,  and  necessity  will  be  served  thereby.  137  In  acting  on  such  applications,  we  generally  consider  whether  the  proposed  transaction  will  be  consistent  with  the  Communications  Act  and  our  rules 
 and,  in  addition  to  complying  with  those  rules,  whether  the  transaction  would  otherwise  serve  the  public  interest. 


 67.  We  have  reviewed  the  proposed  merger  and  related  pleadings  and  conclude  that  grant  of  the  applications  as  conditioned  herein  will  comply  with  the  Commissions  rules.  As  discussed  in  further 
 detail  above,  we  also  conclude  that  the  merger  will  not  be  anticompetitive  or  result  in  a  lack  of  diversity  and,  therefore,  will  be  consistent  with  the  public  interest.  We  conclude  that  the  applicants  are  fully 
 qualified  and  that  grant  of  the  transfer  of  control  of  HBC  broadcast  radio  stations  to  Univision,  subject  to  the  conditions  set  forth  in  this  order,  will  serve  the  public  interest,  convenience,  and  necessity. 


 68.  Accordingly,  IT  IS  ORDERED,  That  the  Petition  to  Deny  of  the  National  Hispanic  Policy  Institute  is  GRANTED  IN  PART  as  set  forth  above,  and  is  DENIED  IN  ALL  OTHER 
 RESPECTS;  and  That  the  informal  objection  of  Elgin  FM  Limited  Partnership  is  DENIED. 


 135  See  Implementation  of  Video  Description  of  Video  Programming,  15  FCC  Rcd  15230,  15238-  15239  (2000) 
 (noting  availability  of  Spanish-  language  audio  on  the  SAP  channel  for  several  programs  carried  by  each  of  the  four  major  networks). 


 136  See  Infra    60. 
 137  47  U.  S.  C.    310(  d). 
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 69.  IT  IS  ORDERED,  That  the  applications  for  consent  to  the  transfer  of  control  of  licensee  subsidiaries  of  Hispanic  Broadcasting  Corporation,  applications  BTC,  BTCH,  BTCFTB-  20020723ABL-ADS 
 and  the  additional  authorizations  listed  in  Note  1,  the  Appendix,  or  otherwise,  and  as  docketed  under  MB  02-  235,  ARE  GRANTED,  conditioned  upon  the  representations  made  by  Univision  in  the 
 applications  and  related  amendments  regarding  its  interest  in  Entravision;  upon  divestiture  of  radio  stations  in  Albuquerque  and  Houston,  as  may  be  necessary  to  come  into  compliance  with  the  rules 
 adopted  by  the  Commission  in  its  2002  Biennial  Order,  or  a  showing  that  waiver  of  those  rules  is  appropriate,  within  six  months  in  the  event  that  the  stay  pending  appeal  in  Prometheus  Radio  Project  v. 
 Federal  Communications  Commission,  No.  03-  3388  (3d  Cir.  Sept.  3,  2003)  (per  curiam)  is  lifted  or  the  local  radio  ownership  rules  adopted  in  the  2002  Biennial  Review  Order  otherwise  go  into  effect;  upon 
 notification  of  the  Commission  should  the  Consent  Decree  between  Univision  and  the  U.  S.  Department  of  Justice  expire,  terminate,  or  otherwise  be  amended;  and  upon  further  requirements  relating  to  ownership 
 compliance  that  the  Commission  may  impose  as  a  result  of  the  changed  circumstances  reported  in  such  notification. 


 FEDERAL  COMMUNICATIONS  COMMISSION 
 Marlene  Dortch 
 Secretary 
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 Appendix 
 Licenses  to  be  Transferred  from  the  Shareholders  of  Hispanic  Broadcasting  Corporation  to  Univision  Communications,  Inc. 


 Station  Community  of  License  File  Number  Facility  ID  Number 
 KGBT(  AM)  Harlingen,  TX  BTC-  20020723ABL  67067  KIWW(  FM)  Harlingen,  TX  BTCH-  20020723ABM  67072 


 KGBT-  FM  McAllen,  TX  BTCH-  20020723ABN  6662  KCOR(  AM)  San  Antonio,  TX  BTC-  20020723ABO  67069 
 KROM(  FM)  San  Antonio,  TX  BTCH-  20020723ABP  67071  KXTN(  AM)  San  Antonio,  TX  BTC-  20020723ABQ  67070 
 KXTN-  FM  San  Antonio,  TX  BTCH-  20020723ABR  67064  KLAT(  AM)  Houston,  TX  BTC-  20020723ABS  67063 
 KLAT-  FM  Winnie,  TX  BTCH-  20020723ABT  57801  KQBU-  FM  Port  Arthur,  TX  BTCH-  20020723ABU  25583 
 KRTX(  AM)  Rosenburg-Richmond,  TX  BTC-  20020723ABV  57804 
 KPTY(  FM)  Rosenburg,  TX  BTCH-  20020723ABW  57806  KLTO(  FM)  Galveston,  TX  BTCH-  20020723ABX  479 
 KAJZ(  AM)  El  Paso,  TX  BTC-  20020723ABY  67065  KBNA-  FM  El  Paso,  TX  BTCH-  20020723ABZ  67066 
 KAMA(  AM)  El  Paso,  TX  BTC-  20020723ACA  36948  WIND(  AM)  Chicago,  IL  BTC-  20020723ACB  67068 


 WOJO(  FM)  Evanston,  IL  BTCH-  20020723ACC  67073 
 KCOR-  FM  Comfort,  TX  BTCH-  20020723ACD  25469 
 KBBT(  FM)  Schertz,  TX  BTCH-  20020723ACE  3075 
 KOVE-  FM  Galveston,  TX  BTCH-  20020723ACF  19091 


 KSOL(  FM)  Santa  Clara,  CA  BTCH-  20020723ACG  19532 
 KSCA(  FM)  Glendale,  CA  BTCH-  20020723ACH  24548 
 KRCD(  FM)  Inglewood,  CA  BTCH-  20020723ACI  1025 
 KRCV(  FM)  West  Covina,  CA  BTCH-  20020723ACJ  19088 
 KLNO(  FM)  Fort  Worth,  TX  BTCH-  20020723ACK  41380 
 KISF(  FM)  Las  Vegas,  NV  BTCH-  20020723ACL  28893 
 KQMR(  FM)  Indian  Springs,  NV  BTCH-  20020723ACM  11614 
 KLNV(  FM)  San  Diego,  CA  BTCH-  20020723ACN  51515 
 KLQV(  FM)  San  Diego,  CA  BTCH-  20020723ACO  51164 
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 KHOT-  FM  Paradise  Valley,  AZ  BTCH-  20020723ACP  59422 
 KKMR(  FM)  Arizona  City,  AZ  BTCH-  20020723ACQ  2740 
 KMRR(  FM)  Globe,  AZ  BTCH-  20020723ACR  22977 
 KOMR(  FM)  Sun  City,  AZ  BTCH-  20020723ACS  55913 
 KHOV-  FM  Wickenburg,  AZ  BTCH-  20020723ACT  29021 
 KHOV-  FM1  Constellation,  AZ  BTCFTB-  20020723ACU  77422 
 KZOL(  FM)  North  Fork,  CA  BTCH-  20020723ACV  31716 
 KLTN(  FM)  Houston,  TX  BTCH-  20020723ACW  65310 


 WLXX(  AM)  Chicago,  IL  BTC-  20020723ACX  11196 
 KEMR(  FM)  San  Francisco,  CA  BTCH-  20020723ACY  70032 
 KZMR(  FM)  Santa  Cruz,  CA  BTCH-  20020723ACZ  70033  KEMR-  FM2  Sausalito,  etc.,  CA  BTCFTB-  20020723ADA  70028 


 KEMR-  FM3  Pleasanton,  CA  BTCFTB-  20020723ADB  14485  WADO(  AM)  New  York,  NY  BTC-  20020723ADC  70684 
 WCAA(  FM)  Newark,  NJ  BTCH-  20020723ADD  46978  KTNQ(  AM)  Los  Angeles,  CA  BTC-  20020723ADE  35673 
 KLVE(  FM)  Los  Angeles,  CA  BTCH-  20020723ADF  35086  WQBA(  AM)  Miami,  FL  BTC-  20020723ADG  73912 
 WAMR-  FM  Miami,  FL  BTCH-  20020723ADH  61658  WAQI(  AM)  Miami,  FL  BTC-  20020723ADI  37254 
 WRTO(  FM)  Goulds,  FL  BTCH-  20020723ADJ  37253  KDXX(  FM)  Lewisville,  TX  BTCH-  20020723ADK  57376 
 KHCK(  AM)  Dallas,  TX  BTC-  20020723ADL  57375  KESS(  AM)  Fort  Worth,  TX  BTC-  20020723ADM  34298 
 KDOS(  FM)  Robinson,  TX  BTCH-  20020723ADN  57377  KHCK-  FM  Denton,  TX  BTCH-  20020723ADO  7040 
 KDXT(  FM)  Granbury,  TX  BTCH-  20020723ADP  21599  KLSQ(  AM)  Laughlin,  NV  BTC-  20020723ADQ  36694 
 KBAE(  FM)  Llano,  TX  BTCH-  20020723ADR  87996  KVCQ(  FM)  McQueeney,  TX  BTCH-  20020723ADS  25588 


 KIOT(  FM)  Los  Lunas,  NM  BTCH-  20021125ABD  73117  KVVF(  FM)  Rio  Rancho,  NM  BTCH-  20021125ABE  65256 
 KJFA(  FM)  Albuquerque,  NM  BTCH-  20021125ABF  16750  KAJZ(  FM)  Santa  Fe,  NM  BTCH-  20021125ABG  7051 
 KKSS(  FM)  Santa  Fe,  NM  BTCH-  20021125ABH  63928  KINV(  FM)  Georgetown,  TX  BALH-  20030307AEH*  55475 
 KNGT(  FM)  Jackson,  CA  BALH-  20030307AEY*  24464  WKAQ(  AM)  San  Juan,  PR  BTC-  20030224ADP*  19099 
 WKAQ-  FM  San  Juan,  PR  BTCH-  20030224ADQ*  19098  WUKQ(  AM)  Ponce,  PR  BTC-  20030224ADR*  9352 
 WUKQ-  FM  Mayaguez,  PR  BTCH-  20030224ADS*  54818 
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 WKAQ-  FM1  Juana  Diaz,  PR  BTCFTB-  20030224ADT*  19100  WKAQ-  FM2  Fajardo,  PR  BTCFTB-  20030224ADU*  92748 
 WUKQ-  FM1  Ponce,  PR  BTCFTB-  20030224ADV*  127832 


 See  infra  Note  1.  On  May  30,  2003,  the  staff  dismissed  applications  with  the  following  file  numbers:  BALH-  20030324ADI,  BALH-  200307ADZ,  BTC-  20030224ACH,  BTCH-  20030224ACI,  BTC-20030224ACJ, 
 BTCH-  20030224ACK,  BTCFTB-  20030224ACL,  BTCFTB-  20030224ACM,  BTCFTB-20030224ACN.  The  public  will  be  able  to  reference  the  history  of  the  authorizations  by  using  the  file 
 numbers  listed  above. 
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 JOINT  STATEMENT  OF  COMMISSIONERS  JONATHAN  S.  ADELSTEIN  AND  MICHAEL  J.  COPPS,  DISSENTING 
 Re:  Applications  for  Transfer  of  Control  of  Certain  Subsidiaries  of  Hispanic  Broadcasting  Corporation  to  Univision  Communications,  Inc. 
 The  majoritys  cursory  opinion  can  be  condensed  to  a  blistering  rebuke  of  the  rights  of  Spanish  speakers  in  our  country.  Let  them  eat  English  is  todays  decree.  Djelos  comer  Ingls.  Todays 
 outcome-  driven  result  shows  that  the  public  interest  in  protection  against  excessive  media  concentration  is  really  only  about  the  mainstream  English-  speaking  population.  Its  no  bother  to  the  majority  that  the 
 proposed  merger  threatens  significant  harm  for  millions  of  Americans  who  rely  on  Spanish-  language  broadcasting  as  the  primary  means  of  accessing  news,  information  and  programming  relevant  to  civic  and 
 cultural  participation  in  our  society.  In  a  measure  of  utter  indifference  to  the  public  interest,  the  majority  decrees  that  English-  language  broadcasting  offers  adequate  choice  for  our  multicultural  society. 


 The  company  is  aptly  named  Univision    one  vision    because  that  describes  what  is  likely  from  Spanish-  language  media  from  now  on.  The  degree  of  concentration  in  Spanish-  language 
 broadcasting  resulting  from  this  transaction  threatens  to  endanger  competition,  diversity  and  localism  for  millions  of  Americans  who  speak  only  or  principally  Spanish.  Whether  they  watch  broadcast  or  cable 
 TV,  listen  to  the  radio,  buy  CDs,  or  surf  the  Internet,  they  will  face  the  monolithic  Univision    a  reach  no  other  media  company  is  anywhere  close  to  attaining  with  its  respective  audience.  The  proposed 
 transaction  creates  an  opportunity  for  a  single  media  company  to  serve  as  a  media  gatekeeper  for  millions  of  Americans. 


 The  Commission  repeatedly  has  expressed  its  commitment  to  diversity,  competition  and  localism  in  broadcasting  generally.  When  these  goals  are  severely  at  risk  for  a  segment  of  the  United  States 
 population,  the  Commission  cavalierly  decides  English-  language  broadcasting  should  satisfy  everyone. 
 Spanish  speakers  are  no  less  deserving  of  protection  from  excessive  concentration  of  media  assets  in  the  hands  of  one  entity  than  those  who  speak  English.  Latinos  are  now  the  largest  minority  group  in 
 the  United  States    38.8  million  Hispanics  live  here,  comprising  13%  of  the  total  U.  S.  population.  The  Hispanic  population  of  the  United  States  is  more  than  the  entire  population  of  Canada.  Studies  show  that 
 more  than  45  percent  of  U.  S.  Latinos  exclusively  or  predominantly  speak  Spanish.  For  this  population,  access  to  news  and  information  broadcast  in  the  English  language  simply  is  not  a  substitute  for  Spanish-language 
 broadcasting. 
 Common  sense,  empirical  evidence,  the  Department  of  Justices  conclusions  in  this  case,  the  Commissions  own  statements  as  recently  as  last  year,  and  Univisions  assertions  to  advertisers  and 
 investors  suggest  that  Spanish-  language  broadcasting  serves  a  distinct  audience.  It  is  pure  fiction  to  assert  that  advertisers  seeking  to  reach  Latinos  are  just  as  likely  to  use  English  media  as  Spanish  media,  or  that 
 Telemundo,  were  it  to  be  cut  off  from  advertising  its  shows  on  HBCs  radio  stations,  could  be  equally  effective  advertising  on  English-  language  radio  stations. 
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 Even  though  the  bulk  of  the  evidence  suggests  a  separate  market,  the  majority  has  not  compiled  the  necessary  data,  done  the  requisite  outreach  or  performed  the  strenuous  analysis  that  is  required  to 
 reach  a  definitive  conclusion.  This  case  was  an  opportunity  for  us  to  reach  out  and  tap  the  expertise  and  experience  of  those  who  do  business  with,  and  consumers  who  receive  the  services  of,  this  segment  of  our 
 media.  Once  again,  we  failed  to  hold  hearings,  talk  to  experts,  or  gather  any  data  on  our  own,  which  shows  the  lack  of  analytical  depth  in  this  item.  After  all  of  the  adverse  reaction  to  the  Commissions 
 recent  weakening  of  its  media  ownership  rules,  we  should  have  treated  this  merger  as  we  have  other  major  media  mergers,  with  public  hearings  and  an  in-  depth  analysis  of  the  practical  and  realistic  effects 
 on  Spanish  speakers  of  this  proposed  combination.  Instead,  the  Commission  once  again  fails  to  evaluate  the  public  interest  adequately  and  marches  forward  allowing  further  media  concentration. 


 Even  if,  after  conducting  the  careful  analysis  required  and  not  the  cursory  approach  taken  by  the  majority,  the  Commission  were  to  conclude  that  Spanish-  language  broadcasting  should  not  be  treated  as  a 
 separate  market,  the  unique  considerations  here  compel  special  consideration  under  our  statutory  obligation  to  find  affirmatively  that  the  transaction  serves  the  public  interest.  Every  proposed  merger 
 coming  before  the  Commission  deserves  to  be  examined  on  its  own  merits  and  within  its  own  particular  factual  and  contextual  situation,  free  from  predetermined  conclusions  of  how  some  idealized  marketplace 
 should  look.  Our  statutory  mandate  requires  that  the  Commission  must  find  the  transfer  of  licenses  in  the  public  interest    we  must  consider  the  potential  benefits  and  harms  of  a  transaction  on  the  listening  and 
 viewing  public,  accounting  for  the  unique  circumstances  of  each  particular  transaction. 
 For  millions  of  Spanish  speakers  who  rely  exclusively  or  predominantly  on  Spanish-  language  media,  this  merger  threatens  a  dramatic  loss  of  diversity,  competition  and  localism.  Spanish  speakers  are 
 just  as  worthy  as  English  speakers  of  a  diversity  of  information  sources  on  their  public  airwaves.  Once  again,  instead  of  encouraging  the  widespread  dissemination  of  ideas  by  a  diversity  of  sources  on  our 
 nations  airwaves,  the  Commission  approves  a  merger  that  will  remove  a  significant  independent  media  voice  serving  the  Hispanic  community.  Once  again,  the  FCC  ignored  the  pleas  of  thousands  of  people 
 across  the  country  urging  us  to  put  a  halt  to  more  media  consolidation.  Thousands  of  people  contacted  us  in  opposition  to  the  proposed  merger,  warning  that  the  merger  will  damage  Latino  cultures,  limit  editorial 
 voices,  restrict  the  information  flowing  to  Hispanics,  and  harm  competition  in  broadcasting  and  advertising.  These  pleas  of  the  public,  many  this  time  conveyed  in  Spanish,  should  not  be  so  cavalierly 
 ignored. 
 Opposition  to  the  merger  rang  out  from  the  National  Association  of  Hispanic  Publications;  the  largest  Latino  national  fraternity,  Lambda  Theta  Phi;  the  Hispanic  Americans  for  Fairness  in  Media;  the 
 Latin  American  Workers  Union;  the  National  Hispanic  Caucus  of  State  Legislators;  the  Hispanic  Organization  of  Latin  Actors;  the  United  Latino  Fund;  the  Latinos  and  Media  Project;  Hispanic  Religious 
 Leaders  of  South  Florida  representing  3,000  Hispanic  churches;  the  Community  Association  of  Progressive  Dominicans;  the  United  Latin  American  Foundation;  LatinoHOME;  the  Media  Access 
 Project;  the  Consumer  Federation  of  America;  Consumers  Union;  numerous  individual  churches  and  church  leaders;  several  prominent  Hispanic  academics;  and  a  number  of  advertisers  and  advertising  firms. 
 In  addition,  many  members  of  Congress  and  state  representatives  expressed  concern  about  the  combinations  impact  on  competition,  diversity  and  the  ability  of  broadcasters  to  address  the  local  needs, 
 tastes  and  interests  of  the  diverse  Hispanic  community  across  the  nation. 
 The  Applicants  claim  that  this  merger  will  give  them  the  scale  and  scope  to  compete  more  effectively  with  English-  language  media  conglomerates  for  advertising  dollars.  As  the  5  th  -largest 
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 television  network,  Univision  already  is  a  major  media  giant    well  ahead  of  UPN,  WB  and  other  networks.  Univisions  market  capitalization  is  $7.8  billion,  with  2002  net  revenues  of  more  than  $1 
 billion.  Univisions  local  stations  are  often  the  leading  station  in  their  television  market,  including  the  top  station  overall  in  top  television  markets  like  Los  Angeles  and  Miami.  138  Its  advertising  rates  are 
 commensurate  with  its  5  th  -place  ranking,  and  any  gap  in  advertising  revenues  is  narrowing  rapidly.  139  Hispanic  television  ad  revenues  grew  by  more  than  20%  in  2002,  more  than  twice  the  7.4%  growth  of  all 
 broadcast  television.  140  Univision  simply  does  not  need  extra  bulk  to  play  in  the  media  giant  arena. 
 Curiously,  while  denying  the  existence  of  a  separate  market,  the  majority  allows  Univision  to  continue  to  sell  advertising  for  its  affiliates  under  a  special  waiver  of  FCC  rules  it  obtained  in  1978  on  the 
 basis  of  the  nascent  Spanish-  language  media  market.  The  Commission  today  allows  a  $7.8  billion  company  to  continue  to  receive  special  regulatory  treatment  for  a  fledgling  entity  based  on  the  nascency 
 of  the  Spanish-  language  media  market.  One  wonders  how  the  majority  can  argue  so  strongly  that  there  is  nothing  distinct  about  Spanish-  language  broadcasting  and  then  continue  a  special  waiver  for  the  dominant 
 player  premised  upon  the  existence  of  a  separate  market. 
 Given  the  clear  loss  of  diversity  and  competition  to  consumers  who  rely  on  Spanish-  language  broadcasting,  this  merger  should  not  go  forward  without  more  careful,  sensitive  analysis.  On  the  record 
 before  us  we  cannot  conclude  that  Univision  has  met  its  burden  to  prove  that  the  license  transfer  serves  the  public  interest,  convenience,  and  necessity.  As  traffic  cop  over  media  concentration,  the  Commission 
 should  have  either  stopped  this  merger  entirely,  designated  it  for  a  hearing,  or  at  the  very  least  allowed  it  to  proceed  only  with  cautionary  conditions. 


 I.  The  Proposed  Transaction  Presents  a  Unique  Combination  of  Assets  that  Far  Surpasses  the  Influence  of  Any  Other  Media  Company 
 Attempts  to  typecast  this  merger  as  one  between  a  pure  television  company  and  a  pure  radio  company  are  tortured  and  narrow.  No  other  media  company  has  anywhere  near  the  combined  influence 
 of  Univisions  leading  television,  cable,  music,  Internet  and  radio  properties  over  its  respective  audience.  Univision  has  far  more  extensive  relationships  in  program  supply  and  distribution  than  other  media 


 1  See  Univision  2002  Annual  Report  at  6  (stating  that  three  of  its  stations    Fresno,  Los  Angeles,  and  Miami    rank 
 as  the  top  station  in  total  day  in  their  respective  markets,  English-  or  Spanish-  language,  among  adults  18  to  49  years  of  age). 


 2  See  Univision  2002  Annual  Report  at  9  (stating  that  Spanish-  language  television,  in  general,  and  [Univision],  in 
 particular,  have  benefited  and  will  continue  to  benefit  from  a  number  of  factors,  including  projected  Hispanic  population  growth,  high  Spanish-  language  retention  among  Hispanics,  increasing  Hispanic  buying  power  and 


 greater  advertising  spending  on  Spanish-  language  media.);  Andrew  Hobson,  Executive  Vice  President  of  Univision  Communications,  Univision  Earnings  Conference  Call,  Nov.  7,  2002  (Univision  Nov.  2002  Earnings  Call) 
 (explaining  that  Univisions  revenue  growth  continues  to  be  fueled  by  advertisers  growing  recognition  of  the  importance  of  the  Hispanic  community,  shown  by  strong  upfront  growth  of  20%).  See  also  Eduardo  Porter, 
 Buying  Power  of  Hispanics  is  Set  to  Soar,  Wall  Street  Journal,  Apr.  18,  2003  (noting  that  Telemundo  increased  by  half  its  number  of  national  advertisers  since  2000). 
 3  Louis  Chunovic,  Spanish-  language  TV  Hits  Stride  at  Upfront  Market,  Television  Week,  May  26,  2003,  at  16 
 (noting  that  at  the  2003  upfront  Univision  for  the  first  time  ever  broke  along  with  the  big  English-  language  broadcast  networks). 
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 companies,  and  Univision  benefits  from  practices  which  are  not  tolerated  for  other  media  companies.  Nor  does  Univision  have  any  close  competitor  to  keep  it  in  check. 
 Already,  Univisions  multifaceted  holdings  make  it  a  major  media  conglomerate.  141  Reaching  97%  of  U.  S.  Hispanic  households,  the  Univision  Network  is  the  leading  Spanish-  language  television 
 network,  with  more  than  70%  audience  share  and  twice  as  many  full-  power  affiliates  than  its  nearest  Spanish-  language  competitor.  It  has  a  higher  rating  among  Hispanic  households  than  its  next  four 
 competitors  combined.  The  Univision  Network  consistently  airs  all  twenty  of  the  top  20  programs  on  Spanish-  language  television  virtually  every  week.  Univision  also  owns  the  3  rd  -largest  Spanish  television 
 network,  Telefutura,  the  fastest  growing  television  network  in  the  country.  Univision  owns  50  TV  stations  (32  full-  power  and  18  low-  power)  which  reach  more  than  40%  of  the  country.  It  operates  the 
 leading  Spanish-  language  cable  network,  Galavision,  reaching  90%  of  Hispanic  households.  In  addition  to  its  television  production  business,  it  owns  the  countrys  leading  Latin  music  recording  and  publishing 
 company,  averaging  five  of  the  top  ten  best  selling  albums  on  the  weekly  Latin  charts.  In  addition,  Univision  owns  the  nations  leading  Spanish-  language  Internet  site,  with  an  80%  market  share. 


 Univision  enjoys  exclusive  programming  rights  in  this  country  to  the  shows  of  the  largest  producer  of  Spanish-  language  programming,  Televisa.  These  exclusive  contracts  through  2017  with  the 
 dominant  Mexican  media  conglomerate  prevent  other  outlets  from  obtaining  even  the  programming  that  Univision  does  not  air,  a  warehousing  practice  that  Commission  rules  prohibit  for  U.  S.  cable  operators. 
 Univision  has  a  similar  relationship  with  Venevision,  Venezuelas  leading  Spanish-  language  programmer.  Televisa  owns  15%  of  Univision  and  Venevision  has  an  18%  interest. 


 Univision  also  has,  and  will  continue  to  have  after  the  merger,  a  significant  ownership  interest  in  and  contractual  relations  with  Entravision.  Entravision  owns  the  largest  group  of  Univision  television 
 affiliates  and  is  second,  only  to  HBC,  in  ownership  of  Spanish-  language  radio  stations.  Through  a  special  waiver  of  Commission  rules,  Univision  also  serves  as  the  exclusive  sales  representative  for  the  sale  of  all 
 national  advertising  aired  on  Entravisions  Univision-  affiliated  television  stations  through  December  2021    a  right  that  is  denied  other  large  networks  due  to  the  inherent  conflicts  of  interest.  In  addition, 
 Univision  has  an  ownership  interest  in  Entravision,  and  for  six  years  can  maintain  an  interest  higher  than  what  the  Justice  Department  has  deemed  ultimately  acceptable  on  antitrust  grounds.  Univisions 
 contractual  relationships  with  Entravision,  as  both  a  program  supplier  and  a  national  advertising  representative;  its  ownership  interest  in  Entravision;  its  shareholder  approval  rights  with  respect  to 
 Entravision;  and  its  historic  ties  must  be  considered  in  their  totality  in  any  public  interest  calculation  of  the  proposed  transaction. 


 HBC  is  the  largest  Spanish-  language  radio  operator  in  the  U.  S.  with  67  radio  stations.  It  has  one  of  the  largest  Spanish-  language  radio  broadcast  networks,  and  maintains  a  network  of  community-  focused 
 bilingual  websites.  In  2002,  it  controlled  51%  of  Spanish-  language  radio  revenue  in  the  top  ten  markets,  according  to  BIA.  Its  annual  revenues  are  nearly  twice  that  of  its  nearest  Spanish-  language  radio 
 competitor.  HBC  ranks  as  the  top  radio  station  overall  in  several  major  markets.  142  In  its  own  words, 
 4  See  Univision  2002  Annual  Report. 
 5  Letter  from  Philip  L.  Verveer,  Counsel  to  Spanish  Broadcasting  System,  to  Marlene  H.  Dortch,  Secretary,  FCC 
 (June  16,  2003)  (SBS  June  16  Letter),  Att.  4,  HBC  Radio  Presentation,  at  24  (noting  top  rankings  in  the  general  market  in  Los  Angeles,  San  Diego,  Houston,  and  El  Paso). 
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 HBC  boasts:  In  the  Hispanic  arena  HBC  is  larger  than  Clear  Channel,  Infinity  or  ABC  in  the  general  market.  143 
 Post-  merger,  Univision  will  be  among  the  nations  most  vertically  integrated  media  conglomerates.  It  will  control  two-  thirds  of  the  advertising  dollars  targeting  the  Hispanic  population. 
 This  transaction  is  not  about  equality  of  scale    approval  of  this  merger  only  makes  it  more  likely  that  Univision  reaches  a  position  of  insurmountable  dominance  over  Spanish-  language  broadcasting  in  this 
 country. 
 II.  The  Commission  Must  Give  Special  Consideration  to  the  Mergers  Effect  on  Spanish  Speakers 
 Language  serves  as  a  communications  link,  or  a  communications  barrier,  to  cultural  and  civic  participation  in  our  multicultural  society.  Leading  scholars  universally  agree  that  language  is  central  to 
 the  creation  and  conveyance  of  culture.  The  ability  to  take  in  and  comprehend  information  is  a  prerequisite  to  participation  in  our  society.  In  the  realm  of  broadcasting,  language  serves  an  equally 
 essential  function    it  is  not  a  mere  broadcasting  format,  but  a  threshold  factor  for  whether  a  message  is  even  understood. 


 Before  granting  a  merger  drastically  reducing  diversity  of  viewpoints  to  18  million  Americans,  we  would  have  liked  to  have  seen  a  rulemaking  initiated  to  determine  whether  Spanish-  language 
 broadcasting  constitutes  a  separate  market  segment  within  a  generalized  media  market  for  purposes  of  our  media  protections.  Ideally,  this  would  have  been  considered  as  part  of  our  broader  media  ownership 
 proceeding.  Instead,  this  decision  merely  points  up  another  failure  of  that  proceeding  to  confront  crucial  media  ownership  issues.  The  threshold  existence  of  a  separate  Spanish  market  is  a  question  worthy  of  the 
 open  deliberative  process  and  judicial  review  afforded  by  a  rulemaking  proceeding. 
 Without  such  an  open,  generalized  agency  examination  of  the  important  growth  in  Spanish-language  media  and  the  distinctiveness  of  viewers  and  listeners  who  rely  exclusively  or  predominantly  on 
 Spanish-  language  broadcasting,  we  should  have  designated  this  threshold  consideration  for  a  full  hearing  in  accordance  with  our  statutory  directive.  Absent  that,  we  are  left  to  resolve  this  fundamental  question 
 on  the  basis  of  the  record  submitted  by  parties  attuned  to  this  proceeding.  As  detailed  below,  not  only  common  sense,  but  also  expert  testimony,  empirical  support,  the  Department  of  Justices  findings, 
 longstanding  Commission  precedent,  and  Univisions  own  materials  suggest  that  Spanish-  language  broadcasting  serves  a  distinct  audience.  While  not  conclusive,  the  weight  of  the  evidence  in  the  record 
 suggests  that  Spanish-  language  broadcasting,  if  not  a  separate  market  segment,  at  a  minimum  deserves  special  consideration  beyond  the  dismissive  treatment  in  this  decision. 


 This  transaction  presents  unique  public  interest  concerns  for  diversity,  competition  and  localism  in  Spanish-  language  broadcasting  that  are  not  accounted  for  under  our  media  ownership  rules.  Ironically, 
 under  both  the  old  and  the  new  media  ownership  rules,  Spanish  speakers  are  not  afforded  the  full  weight  of  protections  of  English  speakers.  Spanish  newspapers,  formerly  excluded  from  application  of  the  rules, 
 are  counted  for  cross-  ownership  purposes  under  the  new  rules  only  if  the  newspaper  is  in  the  dominant  language  of  the  community.  That  the  media  ownership  rules  fail  to  account  fully  for  language  concerns 
 shows  why  the  majoritys  preference  for  bright-  line  media  ownership  rules  may  not  sufficiently  protect 


 6  SBS  June  16  Letter,  Att.  3,  HBC  Si  Presentation  at  10. 
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 the  public  interest.  Case-  by-  case  determinations  and  full  consideration  of  special  circumstances  presented  by  transactions  like  the  one  before  us  offer  more  reliable  means  of  protecting  distinct  segments  of  the 
 public  against  undue  concentration  on  the  public  airwaves. 
 If  the  Commission  were  to  give  special  consideration  to  Spanish-  language  broadcasting,  this  does  not  banish  Spanish  speakers  to  a  regulatory  second-  class  status  tantamount  to  segregation,  as  some 
 wrongly    and  perhaps  mischievously    claim.  Instead,  it  secures  them  the  same  consumer  protections  against  excessive  consolidation  that  should  be  afforded  to  all  the  public.  The  Spanish-  speaking 
 population  deserves  to  have  localism,  competition  and  diversity  in  their  news,  information  and  entertainment.  The  Commission  is  required  to  safeguard  the  rights  of  these  Americans  just  like  the 
 English-  speaking  population. 
 In  any  event,  where  the  record  shows  substantial  questions  as  to  the  public  interest  outcome  of  applying  the  rules  to  the  particular  facts  in  issue,  we  are  statutorily  required  to  conduct  further  analysis  of 
 the  transactions  public  interest  implications.  The  Communications  Act  requires  that  we  make  an  affirmative  finding,  for  each  application  before  us,  whether  the  public  interest,  convenience,  and  necessity 
 will  be  served  by  granting  the  application.  144  Regardless  of  rote  application  of  our  media  ownership  rules,  if  special  circumstances  are  presented  to  us,  our  ultimate  statutory  obligation  is  to  consider  the  potential 
 benefits  and  harms  of  a  transaction  on  the  listening  and  viewing  public.  145 
 Given  the  unique  public  interest  considerations  here,  we  cannot  conclude  that  the  Applicants  have  shown  that  the  transaction  serves  the  public  interest.  For  millions  of  Spanish  speakers  who  rely 
 exclusively  or  predominantly  on  Spanish-  language  media,  this  merger  threatens  a  unique  loss  of  diversity,  competition  and  localism,  which  is  not  offset  by  demonstrated  countervailing  benefits. 


 A.  A  Significant  Number  of  Viewers  and  Advertisers  Rely  on  Spanish-  Language  Media 
 Extensive  evidence  in  this  proceeding  shows  a  distinct  set  of  viewers  and  listeners  who  rely  exclusively  or  predominantly  on  Spanish-  language  media.  As  the  numerous  advertising  agencies  and 
 advertisers  on  the  record  assert,  a  sizable  portion  of  the  Latino/  Hispanic  community  relies  on  Spanish-language  media  as  the  primary  source  of  its  news  and  information. 


 According  to  major  surveys,  more  than  45  percent  of  U.  S.  Hispanics  are  linguistically  Spanish-dominant,  meaning  they  exclusively  or  predominantly  speak  Spanish.  146  A  study  by  the  Pew  Hispanic 
 7  47  U.  S.  C.    310(  d),  309(  a).  See  also  47  U.  S.  C.    309(  e)  (stating  that  if  the  Commission  for  any  reason  is 
 unable  to  make  the  affirmative  finding,  it  shall  formally  designate  the  application  for  a  hearing.).  8 
 See,  e.  g.,  National  Broadcasting  Co.  v.  United  States,  319  U.  S.  190,  225  (1943)  (  In  each  case  that  comes  before  it  the  Commission  must  still  exercise  an  ultimate  judgment  whether  the  grant  of  the  license  would  serve  the  public 


 interest,  convenience,  or  necessity.    If  time  and  changing  circumstances  reveal  that  the  public  interest  is  not  served  by  application  of  the  Regulations,  it  must  be  assumed  that  the  Commission  will  act  in  accordance  with  its 
 statutory  obligations.).  See  also  Shareholders  of  AMFM,  Inc.  (Transferor)  and  Clear  Channel  Communications,  Inc.  (Transferee),  15  FCC  Rcd  16062  (2000);  Tele-  Communications,  Inc.  and  Liberty  Media  Corp.,  9  FCC  Rcd 
 4783  (CSB  1994)  (conducting  further  public-  interest  analyses).  9 
 See  also  Letter  from  Philip  L.  Verveer,  Counsel  to  Spanish  Broadcasting  System,  to  Marlene  H.  Dortch,  Secretary,  FCC  (July  14,  2003)  (SBS  July  14  Letter),  Decl.  of  Alan  Sokol  at  2  (stating  that  Spanish-  dominant 


 Hispanics  constitute  approximately  fifty  percent  of  all  US  Hispanics). 
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 Center  reports  that  47%  of  U.  S.  Hispanics    18.2  million  people    are  Spanish-  dominant,  with  40%    15.5  million    speaking  and  understanding  just  a  little  (29%)  or  no  (11%)  English.  147  Univision  itself 
 highlights  Nielsen  Media  Research  findings  that  45.9%  of  U.  S.  Hispanic  adults    17.8  million  people    are  Spanish-  dominant,  with  17%  speaking  only  and  28.  9%  speaking  mostly  Spanish.  148  Data  compiled  by 
 Nielsen  Media  Research  indicates  that  in  the  top  ten  Hispanic  markets,  from  43.7%  (Sacramento)  to  67.7%  (Miami)  of  Hispanics  are  Spanish-  dominant.  149  Univision  also  cites  census  figures  that  between 
 64.5  to  84.  9  percent  of  U.  S.  Hispanics  in  various  age  groups  speak  Spanish  at  home.  150  For  approximately  18  million  Americans,  Spanish  is  more  than  a  language  preference    it  is  the  only  language 
 in  which  news  and  information  broadcast  over  the  airwaves  are  best  comprehended. 
 This  primary  language  use  understandably  correlates  with  media  use.  Spanish-  dominant  Latinos,  as  well  as  bilingual  Latinos,  rely  heavily  upon  Spanish-  language  broadcasting,  especially  for  news  and 
 information.  151  The  Pew/  Kaiser  study  concludes  that  Spanish  language  media  are  an  important  source  of  broadcast  news  for  a  majority  of  Latinos.  152  Specifically,  38%  of  Latinos  report  that  they  usually  listen 
 to  and  predominantly  watch  Spanish-  language  news  programs,  including  one  in  four  who  only  tune  into  Spanish-  language  broadcasts,  with  an  additional  26%  watching  news  in  Spanish  and  English  equally.  153 
 A  study  by  the  Toms  Rivera  Policy  Institute  found  that  57%  of  bilingual  Spanish  speakers  watch  only  Spanish-  language  news,  with  16%  watching  only  English  news.  154  For  all  programming  categories,  24% 
 of  bilingual  viewers  watched  exclusively  or  primarily  Spanish  television.  155  In  fact,  33%  reported  viewing  Spanish-  language  networks  all  the  time,  with  an  additional  24%  viewing  them  most  of  the 
 time.  156  According  to  Nielsen,  a  substantial  share  of  viewing  in  Hispanic  homes  is  Spanish-  language  television.  157  Arbitron  reports  that  Hispanics  spend  68%  of  their  time  listening  to  Spanish  radio.  158 


 10  Letter  from  Philip  L.  Verveer,  Counsel  to  Spanish  Broadcasting  System,  to  Marlene  H.  Dortch,  Secretary, 
 FCC  (June  20,  2003)  (SBS  June  20  Letter),  citing  2002  National  Survey  of  Latinos,  Pew  Hispanic  Center/  Kaiser  Family  Foundation  (Dec.  2002)  (Pew/  Kaiser  Study),  Summary  of  Findings;  Sec.  1  at  16;  Sec.  3  at  44. 


 11  Univision,  The  U.  S.  Hispanic  Market  in  Brief  2003. 
 12  See  SBS  June  20  Letter,  citing  Nielsen  Media  Research,  Nielsen  Media  Researchs  Hispanic  Local 
 Markets.  13 
 Univision,  The  U.  S.  Hispanic  Market  in  Brief  2003.  14 
 As  Alan  Sokol,  former  Chief  Operating  Officer  of  Telemundo,  explains,  [  i]  ssues  of  language  proficiency  and  preference  make  Spanish  language  broadcasting  especially  important  for  the  consumption  of  news  and 


 information  programming  where  comprehension  of  detail  and  nuance  is  most  important.  SBS  July  14  Letter,  Sokol  Decl.  at    3. 
 15  SBS  June  20  Letter,  citing  Pew/  Kaiser  Study  Sec.  3  at  45. 
 16  Id. 
 17  Louis  DeSipio,  The  Toms  Rivera  Policy  Institute,  Latino  Viewing  Choices:  Bilingual  Television 
 Viewers  and  the  Language  Choices  They  Make  (2003)  (Toms  Rivera  Study),  at  7.  18 
 Id.  at  1.  19 
 Id.  at  8  20 
 Nielsen  Media  Research,  Nielsen  Media  Researchs  Hispanic  Local  Markets.  22 
 Arbitron,  Hispanic  Listening  Preference,  Dec.  2002. 
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 The  reliance  of  a  sizable  number  of  Latinos  on  Spanish-  language  media  is  likely  to  continue.  The  number  of  Hispanic  American  television  households  has  grown  19%  from  1996  to  2001,  while  the 
 number  of  Spanish-  dominant  Hispanic  Americans  has  grown  at  a  greater  pace,  29%,  over  the  same  time  period.  159  Indeed,  Nielsen  Media  Research  has  begun  to  monitor  and  report  the  viewing  habits  of  the 
 Hispanic  community  separately  on  a  national  level  and  within  16  local  television  markets.  In  radio,  Arbitron  has  initiated  an  effort  to  introduce  language  weighting  to  better  account  for  language  factors.  160 


 Advertisers  and  others  who  want  to  reach  the  growing  Hispanic  community  rely  uniquely  on  Spanish-  language  broadcasting.  Reflected  by  a  34%  increase  in  spending  in  Spanish-  language  media  in 
 2002,  advertisers  and  advertising  agencies  have  made  strategic  decisions  to  specialize  in  targeting  the  fast-  growing  Hispanic  audience.  161  Advertisers  have  set  aside  separate  budgets  for  Spanish-  language 
 media,  for,  as  Evan  Shouten  of  Charles  River  Associates  explains,  advertisers  cannot  effectively  substitute  Anglo  for  Spanish  language  media.  162  With  almost  $1.6  billion  in  billed  revenues  in  2001,  and 
 $2.46  billion  in  2002,  a  large  and  vibrant  community  of  advertising  agencies  now  serves  the  Spanish-language  media  market.  163  Hispanic  buying  power,  totaling  $580.5  billion  in  2002,  is  expected  to  grow  to 
 $926.1  billion  in  2007  and  $2.5  trillion  by  2020.  164  Univision  admits  that  it  is  attracting  major  consumer  product  company  advertisers,  including  companies  buying  advertising  across  all  of  its  media  platforms, 
 reflecting  that  major  advertisers  have  discovered  Spanish-  language  television  advertising  is  a  more  cost-effective  means  to  target  the  growing  Hispanic  audience  than  English-  language  broadcast  media.  165 


 Spanish-  language  broadcasting  also  serves  a  unique  role  in  reaching  Hispanic  Americans  in  the  political  process.  In  the  last  presidential  campaign,  more  than  $1.3  million  was  spent  on  Spanish-language 
 media  by  the  candidates,  while  an  additional  $2  million  was  spent  by  the  parties  national 


 23  See  Nielsen  Media  Research,  www.  nielsenmedia.  com/  ethnicmeasure/  Hispanic-american/ 
 hisp_  pop_  growth.  html.  See  also  Univision,  The  U.  S.  Hispanic  Market  in  Brief  2003,  stating  that  Spanish  will  still  be  spoken  at  home  into  the  21  st  Century. 


 24  See  SBS  June  16  Letter  at  2  (citing  Arbitron  Radio  Advisory  Council  Minutes  from  March  26-  27,  2003). 
 25  See,  e.  g.,  The  Hispanic  Market    A  Nation  within  a  Nation,  TNS  Media  Intelligence/  CMR.  See  also 
 Hispanics  Finally  Break  the  TV  Barrier,  USA  Today,  (Sept.  10,  2003),  at  A1  (quoting  ABC  Entertainment  President  Susan  Lyne,  theres  not  an  advertiser  out  there  that  hasnt  taken  notice  of  the  demographic  shift.). 


 26  Letter  of  Arthur  Belendiuk  &  Bruce  Eisen,  on  behalf  of  National  Hispanic  Policy  Institute  and  SBS,  to 
 Marlene  H.  Dortch,  Secretary,  FCC  (Apr.  7,  2003),  at  Ex.  1,  Evan  Sue  Shouten,  Charles  River  Associates,  Spanish  Language  Media:  Distinct  from  Anglo  Media,  April  3,  2003,  at    4.  See  also  Letter  from  Jeffrey  H.  Smulyan, 


 Chairman  and  CEO  of  Emmis  Communications  Corporation,  to  Secretary,  FCC,  (July  11,  2003),  at  2;  Letter  from  Philip  L.  Verveer,  Counsel  to  Spanish  Broadcasting  System,  Inc.,  to  Marlene  H.  Dortch,  Secretary,  FCC,  (June  2, 
 2003)  (SBS  June  2  Letter),  Att.  of  Castor  A.  Fernandez  (opining  that  English  language  media  and  Spanish  language  media  are  not  substitutable). 
 27  See  Letter  from  Philip  L.  Verveer,  Counsel  to  Spanish  Broadcasting  System,  Inc.,  to  Marlene  H.  Dortch, 
 Secretary,  FCC  (June  3,  2003)  (SBS  June  3  Letter).  28 
 See  Jeffrey  M.  Humphreys,  The  Multicultural  Economy  2002:  Minority  Buying  Power  in  the  New  Century,  Georgia  Business  &  Economics,  the  Selig  Center  for  Economic  Growth,  2Q  2002,  at  6. 


 29  Univision  2002  Annual  Report  at  9,  10. 
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 committees.  166  Both  sides  commissioned  Hispanic  media  consultants  to  produce  unique  ads  that  would  be  aired  only  on  Spanish-  language  television  stations.  More  than  $16  million  was  spent  on  Spanish-language 
 television  advertising  in  the  2002  election  by  gubernatorial,  Senate,  and  House  candidates.  The  political  process  reinforces  that  Spanish-  language  broadcasting  reaches  Latino/  Hispanic  Americans  in  a 
 unique  and  fundamental  way. 
 Evidence  also  suggests  that  English-  language  broadcasters  do  not  react  to  changes  in  advertising  rates  or  practices  of  Spanish-  speaking  broadcasters.  As  Jeffrey  H.  Smulyan,  Chairman  and  CEO  of 
 Emmis  Communications  Corporation  explained  on  the  record,  English  language  and  Spanish  language  radio  stations  do  not  generally  compete  with  each  other.  .  .  .  we  do  not  consider  the  Spanish  stations  rate 
 cards  in  establishing  our  sales  prices.  The  prices  they  charge  simply  do  not  have  any  influence  on  the  advertising  markets  in  which  we  operate.  167  These  viewing  habits  and  commercial  advertising  practices 
 lend  considerable  support  to  the  notion  that  a  distinct  set  of  viewers  and  advertisers  rely  on  Spanish-language  broadcasting. 


 B.  The  Department  of  Justice  Found  a  Separate  Spanish-  Language  Radio  Market 
 The  majoritys  conclusion  that  there  is  no  separate  market  for  Spanish-  language  media  contravenes  in  important  ways  the  Department  of  Justices  more  specific  findings.  The  Justice 
 Department  found  an  identifiable  Spanish-  language  radio  market  segment  which  is  already  highly  concentrated.  Were  the  Commission  to  adhere  to  the  Justice  Departments  findings,  at  a  minimum,  this 
 transaction  would  result  in  harmful  concentration  under  the  Commissions  longstanding  approach  to  broadcast  diversity  that  regards  radio  and  television  as  within  the  same  market  for  diversity  purposes. 
 The  Commissions  public  interest  examination  of  a  transactions  effect  on  viewers  is  different  from  a  pure  antitrust  analysis,  but  can  be  premised  upon  similar  market  segment  findings. 


 In  its  antitrust  review  focused  primarily  on  radio,  the  Department  of  Justice  found  that  the  Spanish-  language  radio  market  was  separate  from  the  general  radio  market.  168  After  consulting  numerous 
 advertisers  and  advertising  companies,  the  nations  antitrust  authority  found  that  local  and  national  advertisers  considered  Spanish-  language  radio  to  be  particularly  effective  or  necessary  to  reach  their 
 desired  customers,  particularly  Spanish-  speaking  consumers  who  listen  predominantly  or  exclusively  to  Spanish-  language  radio.  169  The  Department  found  that  these  advertisers  did  not  consider  English-language 
 radio  to  be  a  reasonable  substitute,  and  would  not  turn  to  English-  language  radio  if  faced  with  a  small  but  significant  increase  in  advertising  on  Spanish-  language  radio.  170  Thus,  the  provision  of 


 30  See  SBS  June  20  Letter,  citing  Adam  J.  Segal,  The  Hispanic  Priority:  The  Spanish-  Language  Television 
 Battle  for  the  Hispanic  Vote  in  the  2000  U.  S.  Presidential  Election,  Hispanic  Voter  Project,  Johns  Hopkins  University  (Jan.  2003)  and  Adam  J.  Segal,  Records  Broken:  Spanish-  Language  Television  Advertising  in  the  2002 


 Election,  Hispanic  Voter  Project,  Johns  Hopkins  University  (Nov.  2002).  31 
 Letter  from  Jeffrey  H.  Smulyan,  Chairman  and  CEO  of  Emmis  Communications  Corporation,  to  Secretary,  FCC,  (July  11,  2003),  at  1-  2. 


 32  United  States  of  America  v.  Univision  Communications  Inc.,  Civil  Action  No.  1:  03CV00758,  Complaint  for 
 Injunctive  Relief,  filed  March  26,  2003,  at    12-  15  (DOJ  Complaint).  33 
 Id.  at    14.  34 
 Id. 
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 advertising  time  on  Spanish-  language  radio  stations  was  deemed  the  relevant  product  market  for  antitrust  purposes. 
 The  majority  offers  little  explanation  for  its  failure  to  adhere  to  this  finding,  for  either  competition  or  diversity  purposes.  Curiously,  while  the  majority  gleefully  accepts  the  Department  of  Justices 
 competition-  based  analysis  that  radio  and  television  are  separate  markets,  the  same  majority  rejects  out-of-  hand  the  Departments  conclusion  on  the  existence  of  a  separate  Spanish-  language  radio  market. 


 C.  Commission  Precedent  Consistently  Has  Acknowledged  that  Spanish  Stations  Serve  a  Distinct  Audience 
 The  majoritys  cursory  analysis  also  runs  counter  to  prior  Commission  recognition  of  the  distinct  audience  served  by  broadcasters  who  broadcast  in  a  language  other  than  English.  Just  last  year,  the 
 Commission  found  that  Spanish-  language  stations  do  not  compete  directly  with  English-  language  media.  171  In  that  case,  the  Commission  granted  NBC  a  12-  month  waiver  of  the  TV  duopoly  rule  to  permit 
 common  ownership  of  three  television  stations  in  the  Los  Angeles  market.  In  doing  so,  the  Commission  reasoned  that  diversity  would  not  be  adversely  affected  in  part  because  the  two  Telemundo  stations  were 
 among  other  media  that  are  programmed  towards  the  Hispanic  audience  in  the  Los  Angeles  market,  whereas  the  NBC  station  in  that  market  broadcasts  to  a  wider  audience  exclusively  in  English.  172  The 
 Commission  further  stated  that  we  are  not  as  concerned  in  this  case  that  the  competition  for  advertising  dollars  will  be  diminished  because  the  Spanish-  language  format  of  the  Telemundo  stations  means  that 
 they  do  not  compete  directly  with  NBCs  station.  173 
 The  Commission  has  distinguished  foreign-  language  stations  generally  in  a  number  of  areas  to  account  for  distinct  characteristics  of  such  stations  or  their  audiences.  For  example,  in  the  cable  carriage 
 context,  the  Commission  has  stated  that  programs  in  foreign  languages  (e.  g.,  MacNeil/  Lehrer  in  Spanish)  are  not  duplicative  of  the  same  programs  broadcast  in  English,  because  they  target  different 
 audiences.  174  The  Commission  takes  into  account  the  relatively  more  limited  audience  of  a  foreign-language  broadcast  station  in  determining  a  stations  historical  viewing  for  the  purpose  of  modifying  its 
 cable  carriage  rights.  175  As  mentioned  above,  the  Commission  excludes  foreign-  language  newspapers  from  media  ownership  protections  unless  the  newspaper  is  in  the  dominant  language  of  the  community.  176 


 As  far  back  as  1972,  the  Commission  adopted  rules  for  cable  carriage  of  broadcast  television  signals  that  allowed  cable  systems  to  carry  distant  foreign-  language  stations  without  counting  such 


 35  Telemundo  Communications,  Inc.  (Transferor)  and  TN  Acquisition  Corp.  (Transferee),  17  FCC  Rcd  6958 
 (2002).  36 
 Id.  at  6977.  37 
 Id.  at  6978-  79  (emphasis  added).  38 
 See  Implementation  of  the  Satellite  Home  Viewer  Improvement  Act  of  1999:  Broadcast  Signal  Carriage  Issues,  Report  and  Order,  16  FCC  Rcd  1918,  1979  n.  167  (2000),  citing  Must  Carry  Order,  8  FCC  Rcd  at  2971. 


 39  See,  e.  g.,  Tele-  Media  Co.,  10  FCC  Rcd  8615,    14  (CSB  1995). 
 40  Amendment  of  Sections  73.  34,  73.  240,  and  73.  636  of  the  Commissions  Rules  Relating  to  Multiple 
 Ownership  of  Standard,  FM  and  Television  Broadcast  Stations,  50  FCC  2d  1046,    101  (1975). 
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 stations  against  their  quota  of  distant  non-  network  stations.  177  In  affirming  the  exemption  for  foreign-language  stations,  the  Commission  explained  that  to  do  otherwise  we  must  hold  that  the  average 
 television  viewer  would  find  a  film,  news  program,  or  sporting  event  of  equal  interest  regardless  of  whether  it  is  presented  in  English  or  Spanish.  Suffice  it  to  say  we  cannot  so  decide:  a  program  broadcast 
 in  a  foreign  language  is  of  little  interest  to  any  but  those  fluent  in  the  language.  178  Applying  this  principle  in  1993,  the  Commission  stated:  Unlike  the  switch  from  religious  to  commercial 
 programming,  a  language  change  makes  programming  suddenly  understandable  to  a  far  greater  audience,  who  were  previously  precluded  from  utilizing  the  stations  services.  179 


 The  Commission  had  a  similar  recognition  of  the  importance  of  language,  particularly  Spanish,  in  the  closed  captioning  context.  Originally,  the  Commission  exempted  all  non-  English  language 
 programming  from  its  requirements.  On  reconsideration,  having  been  persuaded  that  Spanish  was  different  due  to  the  size  and  the  growth  rate  of  the  countrys  Spanish  speakers,  the  Commission  concluded 
 that  Spanish-  language  programming  should  be  closed  captioned.  180  Specifically,  the  Commission  stated,  [  u]  nlike  most  other  non-  English  language  programming,  there  already  exists  a  substantial  market  for 
 Spanish-  language  programming  in  the  United  States.  181  The  majority  today  fails  to  account  for  its  abandonment  of  this  longstanding  pragmatic  understanding  of  the  primary  importance  of  a  broadcast 
 language. 
 D.  The  Applicants  Corporate  and  Marketing  Materials  Show  a  Distinct  Spanish-  Language  Market  Segment 


 In  numerous  sales  presentations  and  corporate  filings,  Univision  itself  extols  the  distinctness  of  the  Hispanic  viewer  and  Spanish-  language  media.  In  its  Annual  Report,  Univision  remarks,  major 
 advertisers  have  discovered  that  Spanish-  language  television  advertising  is  a  more  cost-  effective  means  to  target  the  growing  Hispanic  audience  than  English-  language  broadcast  media.  182  It  further  notes  that 
 the  strong  Spanish-  language  retention  among  Hispanics  indicates  that  the  Spanish-  language  media  has  been  and  will  continue  to  be  an  important  source  of  news,  sports  and  entertainment  for  Hispanics.  183 


 41  2002  Biennial  Regulatory  Review    Review  of  the  Commissions  Broadcast  Ownership  Rules  and  Other 
 Rules  Adopted  Pursuant  to  Section  202  of  the  Telecommunications  Act  of  1996,  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  MB  Docket  No.  02-  277  et  al.  (June  2,  2003);  Amendment  of  Part  74,  Subpart  K  of 


 the  Commissions  Rules  and  Regulations  Relative  to  Community  Antenna  Television  Systems,  Cable  Television  Report  and  Order,  36  FCC  2d  143,    96  (1972). 
 42  Amendment  of  Part  76,  Subparts  A  and  D  of  the  Commissions  Rules  and  Regulations  Relative  to  Adding  a 
 New  Definition  for  Specialty  Station  and  Specialty  Format  Programming  and  Amending  the  Appropriate  Signal  Carriage  Rules,  First  Report  and  Order,  58  FCC  2d  442,    24  (1976)  (emphasis  added). 


 43  Fox  Television  Stations,  Inc.,  Memorandum  Opinion  &  Order,  8  FCC  Rcd  3213  (1993),  at    7. 
 44  See  Closed  Captioning  and  Video  Description  of  Video  Programming,  Order  on  Reconsideration,  13  FCC 
 Rcd  19,  973  (1998),  at    95.  45 
 Id.  46 
 Univision  2002  Annual  Report  at  10.  47 
 Id.  at  9. 
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 In  terms  of  demographics  and  viewing  habits,  Univision  emphasizes  the  large  Spanish-  dominant  population  that  does  not  turn  to  English-  language  media.  In  promoting  its  significant  exclusive 
 audience,  Univision  notes  that  68.3%  of  its  adult  San  Francisco  audience  did  not  watch  any  English-language  stations,  like  67.7%  of  Dallas,  65.9%  of  Los  Angeles  and  52.2%  of  New  York  audiences.  184  In 
 South  Florida,  according  to  Univision,  67%  of  the  1.6  million  Hispanics  in  South  Florida  are  Spanish-dominant,  meaning  that  if  you  do  not  target  Hispanics  over  1,055,000  Hispanics  or  27%  of  the  total 
 Miami/  Fort  Lauderdale  population  will  not  be  effectively  reached  by  your  general  market  television  advertising  efforts.  185  Univision  boasts  that  its  station  delivers  a  significant  exclusive  audience.  .  . 
 51.9%  of  WLTV-  TVs  audience  does  not  watch  any  English  television  at  all  during  the  week!  186  According  to  Univision,  the  majority  of  Hispanics  prefer  to  get  information  in  Spanish  and  they  want  to 
 be  marketed  to  as  Hispanics.  187 
 Univision  also  highlights  its  unmatched  platforms  and  success  in  attracting  the  Spanish-  speaking  audience.  Univision  touts  that  the  top  78  shows  among  Hispanics  aged  18-  49  are  on  Univision.  188 
 Univision  explains  that  its  programming  is  more  culturally  relevant  to  Hispanic  audiences.  189  Univision  also  points  out  that  for  Hispanics  commercials  in  Spanish  are  five  times  more  persuasive  than 
 commercials  in  English,  including  increased  awareness  and  message  comprehension.  As  Univision  Television  Networks  president  of  entertainment  Mario  Rodriguez  explains,  Hispanics  choose  Spanish-language 
 television  over  general-  market  TV  every  hour  of  every  day  of  the  year,  and  that  happens  because  of  the  cultural  connection  and  the  cultural  relevance  available  only  here.  190 


 HBC  makes  similar  claims  with  respect  to  the  Spanish-  speaking  radio  audience:  You  cant  reach  HBC  listeners  on  general  market  stations;  191  On  average,  Spanish  radio  stations  duplicate  less 
 than  10%  with  English  language  stations;  192  and  Radio  has  a  much  stronger  story  to  tell  in  the  Hispanic  market  than  it  does  in  the  general  market.  193  Noting  that  over  70%  of  U.  S.  Hispanics  prefer  to  speak 
 Spanish  at  home,  HBC  even  states  that  a  large  segment  of  the  audience  is  driven  by  dependence  and  not  just  preference.  194  It  notes  that  Hispanics  are  not  reached  effectively  on  general  market  media  and  you 
 cannot  reach  the  U.  S.  Hispanic  effectively  with  Spanish  TV  alone.  195  The  direct  statements  of  the 
 48  SBS  June  16  Letter,  Att.  1,  at  21  Reaching  the  Lucrative  U.  S.  Hispanic  Market  Presentation.  (  Univision 
 National  Sales  Presentation).  49 
 SBS  June  16  Letter,  Att.  1,  at  21  Univision  Reaching  the  Lucrative  South  Florida  Market  Presentation.  (  Univision  South  Florida  Presentation). 


 50  Id.,  Att.  1,  Univision  South  Florida  Presentation  at  31 
 51  Id.,  Att.  2,  Univision  National  Sales  Presentation,  at  16. 
 52  Id,.  Att.  2,  Univision  National  Sales  Presentation,  at  25. 
 53  Id.,  Att.  2,  Univision  National  Sales  Presentation,  at  23. 
 54  Spanish-  Language  TV  Hits  Stride  at  Upfront  Market,  Television  Week,  May  26,  2003  at  16. 
 55  SBS  June  16  Letter,  Att.  4,  HBC  Hispanic  Radio  Presentation  at  25. 
 56  Id.,  Att.  3  HBC  Si  Presentation  at  4. 
 57  Id.,  Att.  4,  HBC  Hispanic  Radio  Presentation  at  14. 
 58  Id.,  Att.  4,  HBC  Hispanic  Radio  Presentation,  at  15;  Att.  3,  HBC  Si  Presentation  at  7. 
 59  Id.,  Att.  4,  HBC  Hispanic  Radio  Presentation,  at  38. 
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 Applicants  strongly  suggest  that  a  distinct  Spanish-  language  market  exists  to  serve  viewers  and  advertisers  who  are  not  effectively  served  by  English-  language  media. 
 E.  The  Majority  Wrongly  Presumes  that  Spanish  and  English  are  Interchangeable  for  All  Viewers 
 The  majoritys  analysis  overlooks  those  in  the  Hispanic  community  that  rely  on  Spanish-  language  media  as  more  than  a  linguistic  preference.  The  Order  barely  addresses  the  broadcasting  needs  or  desires 
 of  people  who  speak  only  or  mostly  Spanish,  and  the  effect  of  the  proposed  transaction  on  this  portion  of  our  nations  population.  The  Order  dismisses  this  population  and  boldly  asserts  that  the  majority  of 
 Spanish  speakers  watch  English-  language  media  and  thereby  have  more  media  options  than  the  general  population.  Inherent  in  this  conclusion  is  the  recognition  that  English  speakers  do  not  consume  Spanish-language 
 media,  proving  the  very  point  that  proficiency  in  a  language  is  a  threshold  consideration  for  consumption  of  broadcasting.  Even  if  Spanish  speakers  have  more  choice  of  local  news  and  information 
 sources  today  than  in  the  past,  that  is  hardly  sufficient  analysis  to  reduce  the  number  of  independent  voices  currently  available  to  them  without  further  examination  of  the  effect  of  the  transaction  on 
 competition,  localism,  and  diversity  for  those  viewers. 
 According  to  the  majority,  the  transactions  threat  to  competition  and  diversity  is  mitigated  because  many  Hispanics  are  bilingual  and  listen  to  English-  language  media.  While  this  is  undoubtedly 
 true  for  some,  it  is  not  true  for  all  and  should  not  end  our  analysis  of  this  transaction.  There  is  simply  no  denying  that  for  a  significant  portion  of  the  population,  Spanish  and  English  media  are  not 
 interchangeable.  More  than  45%  of  Spanish  speakers  living  in  the  United  States  speak  only  or  principally  Spanish.  For  them,  and  the  advertisers  that  want  to  reach  them,  English  media  is  not  an  adequate 
 alternative.  Even  for  bilingual  viewers,  only  41.  6%  report  having  Secondary  Audio  Program  (SAP)  language  translation  capability  on  their  television  sets  and  only  17%  report  using  SAP  often.  196  This 
 relatively  low  use  of  SAP  use  is  not  surprising,  given  the  inconsistent  availability  of  SAP  programming,  particularly  for  news  and  public  affairs  programming.  Despite  early  optimism,  a  number  of  broadcasters 
 that  tried  to  use  SAP  a  few  years  ago  have  now  stopped.  ABC,  for  example,  dropped  SAP  audio  track  for  World  News  Tonight  after  one  year  because  of  its  costs  and  lack  of  discernable  effect  on  viewership  in 
 Hispanic  households.  197 
 The  majority  then  falls  back  on  the  fallacy  that  language  is  just  another  format,  meaning  that  any  broadcast  station  is  potentially  substitutable  for  another.  This  ignores  the  threshold  factor  of  whether  the 
 language  in  which  the  broadcaster  transmits  its  message  is  comprehendable  to  the  listener.  Preserving  independent  Spanish-  language  sources  of  news  and  information  is  critical  because  language  itself  is 
 critical  to  the  comprehension  of  the  broadcast  message.  Programming  in  Spanish  is  not  simply  another  entertainment  format,  such  as  smooth  jazz  or  rock,  classical  or  country,  to  people  who  do  not  speak 
 English.  HBC  agrees,  stating  in  sales  materials  that  Hispanic  Radio  is  not  a  format    individual  stations  are  programmed  with  a  wide  range  of  music  and  information  formats  designed  to  appeal  to  the  local 


 60  SBS  June  20  Letter,  citing  Toms  Rivera  Study  at  4. 
 61  John  M.  Higgins,  Spanish  on  SAP  Just  Hasnt  Caught  On,  Broadcasting  &  Cable,  Mar.  24,  2003  (noting 
 that  CBS  translates  only  one  entertainment  show).  Stations  that  have  discontinued  SAP  service  include  KTVU  in  the  Bay  Area,  KENS  in  San  Antonio,  KGNS  in  Laredo,  and  WRAL  in  Raleigh. 
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 market.  198  Spanish  programming  is  comprised  of  numerous  formats,  including  regional  Mexican,  Spanish  news/  talk,  and  Tejano.  The  majoritys  reference  to  Commission  policy  on  licensee  changes  in 
 entertainment  format  is  simply  immaterial  to  the  question  of  whether  this  proposed  transaction  serves  the  public  interest.  The  language  in  which  a  station  broadcasts  translates  into  whether  its  content  or  message 
 is  heard  and  understood    whether  that  relates  to  cultural  issues  in  subtle  ways,  or  to  important  public  policy  issues  in  a  direct  and  explicit  way. 


 The  majoritys  determination  that  language  is  simply  a  format  precludes  a  more  sophisticated  examination  of  other  possible  approaches  to  broadcast  language.  For  example,  some  have  suggested  that 
 Spanish-  language  broadcasting  could  form  a  submarket  within  a  larger  general  media  marketplace.  In  examining  the  present  options  available  to  Spanish-  only  viewers  and  advertisers  wanting  to  reach  this 
 audience,  the  weight  of  the  evidence  is  that  Spanish  media  outlets  are  not  substitutable  with  English  outlets  and  instead  comprise  a  distinct  market,  or  submarket,  segment.  199  As  the  Department  of  Justice 
 found,  a  price  increase  by  an  entity  with  market  power  in  Spanish-  language  media  is  not  likely  to  be  offset  immediately  by  new  entry  into  that  market  by  English-  language  broadcasters.  Yet,  Spanish  outlets 
 could  be  encompassed  within  a  larger  media  market  for  overall  media  ownership  purposes  to  the  extent  that  over  the  long  term,  all  media  outlets  could  potentially  convert  to  a  different  broadcast  language.  This 
 recognizes  that,  over  the  long  term  and  for  bilingual  viewers,  Spanish  and  English  broadcasters  may  be  potential  competitors  and  may  compare  ratings  and  monitor  the  others  performance.  Nevertheless,  the 
 majority  fails  even  to  consider  this  approach  and  whether  it  offers  a  more  realistic  assessment  of  the  nature  of  competition  in  todays  broadcasting  environment  than  the  majoritys  one  size  fits  all 
 approach. 
 Unfortunately,  the  majority  has  not  conducted  its  market  analysis  with  any  rigor  and  therefore  has  not  done  the  analysis  necessary  to  determine  whether  Spanish-  language  media  warrants  separate  media 
 ownership  review  as  a  separate  market  or  submarket.  The  Commission  failed  to  hold  hearings,  talk  to  experts,  and  gather  any  data  on  its  own,  which  is  revealed  by  the  dismissive  approach  to  Spanish-  only 
 speakers. 
 III.  The  Merger  Threatens  a  Unique  Loss  of  Diversity  and  Competition  for  Spanish  Speakers 
 Todays  decision  delivers  an  unfortunate  setback  in  the  Commissions  application  of  its  public  interest  standard  and  reaches  an  outcome-  driven  decision  that  badly  disserves  the  U.  S.  Hispanic 
 community.  The  acquisition  of  the  leading  Spanish-  language  radio  owner  by  the  dominant  Spanish-language  media  conglomerate  will  sharply  reduce  media  competition  and  the  diversity  of  viewpoints 
 available  to  Spanish-  speaking  Americans.  The  merger  threatens  to  increase  exponentially  the  already  high  barriers  to  entry  into  Spanish-  language  media  and  to  exacerbate  a  history  of  activity  by  Univision 
 designed  to  thwart  competition  and  further  entrench  its  leading  position.  Given  the  increased 


 62  See  SBS  June  16  Letter,  Att.  3,  HBC  Si  Presentation,  at  7. 
 63  The  concept  of  a  submarket  is  used  in  other  contexts.  For  example,  the  Commission  treats  noncommercial 
 stations  differently  from  commercial  stations,  even  though  both  are  now  fully  counted  within  a  general  media  market  for  media  ownership  purposes.  This  commercial/  noncommercial  distinction  is  far  more  content-  based  than  a 


 distinction  based  on  language. 
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 concentration  in  Spanish-  language  broadcasting,  whether  considered  as  a  matter  of  diversity  or  competition,  we  cannot  conclude  that  the  application  before  us  serves  the  public  interest. 
 After  the  merger,  the  combined  entity  will  have  an  unmatched  array  of  media  platforms  commanding  two-  thirds  of  the  rapidly  rising  broadcast  advertising  dollars  targeting  the  Hispanic 
 population.  Univision  will  become  the  gatekeeper  to  Spanish-  language  consumers  in  numerous  key  markets,  with  as  much  as  80%  of  the  Spanish  television  and  radio  audience  in  many  top  Hispanic 
 markets.  In  seven  of  the  top  ten  markets,  the  merged  firms  market  share  will  exceed  60%,  and  in  two  markets  it  will  exceed  70%.  200  This  essentially  means  that  there  is  little  room  for  new,  independent 
 broadcasting  companies,  tailored  to  Hispanics,  to  emerge  and  compete. 
 The  merger  will  result  in  fewer  places  for  Spanish-  only  viewers  to  find  a  diversity  of  viewpoints  or  Univisions  competitors  to  promote  their  offerings.  Spanish-  language  media  already  is  concentrated, 
 and  this  transaction  places  diversity  even  more  at  risk.  The  top  ten  Hispanic  markets  currently  average  3.3  television  stations,  5.7  AM  stations  and  6  FM  stations.  201  Spanish-  language  newspapers  and  cable 
 networks  do  not  offset  this  loss  of  broadcast  competition  and  diversity.  More  Hispanics  watch  television  and  listen  to  radio  than  the  general  population,  and  there  is  no  daily  Spanish-  language  newspaper  in  14  of 
 the  top  20  Spanish-  language  markets.  202  Univision  itself  notes  that  fewer  Hispanic  households  subscribe  to  cable  than  the  general  U.  S.  population.  203  That  Hispanics  turn  to  television  and  radio  more  frequently 
 than  the  general  population  means  that  our  media  ownership  rules  cannot  be  presumed  to  reflect  consequences  of  cross-  media  concentration  accurately.  It  also  means  that  competitive  effects  inside  the 
 handful  of  Spanish  broadcasting  networks  take  on  greater  importance. 
 This  transaction  will  result  in  enhanced  market  power  for  Univision  to  thwart  competition  in  radio,  television,  and  other  Spanish-  language  media.  Telemundo  points  out  that  the  merged  entity  could 
 use  its  dominance  in  Spanish-  language  media  and  cross-  media  advertising  to  lock  up  Spanish-  language  advertising  revenue.  Telemundo  also  asserts  that  because  Univision  serves  as  Entravisions  sales 
 representative,  the  combined  entity  could  also  be  in  a  position  to  receive  information  concerning  advertising  rates  and  promotional  strategies  that  could  have  adverse  effects  on  Univisions  rivals. 
 Moreover,  Univisions  exclusive  programming  contracts  with  Televisa  and  Venevision  prevent  any  Univision  competitor  from  obtaining  access  even  to  the  programming  that  never  airs  on  Univisions 
 networks.  This  warehousing  of  programming,  which  the  FCC  prohibits  for  cable  operators,  deprives 


 64  See  Letter  from  Philip  L.  Verveer,  Counsel  to  SBS,  to  Marlene  H.  Dortch,  Secretary,  FCC  (June  11,  2003); 
 Letter  from  William  LeBeau,  Telemundo  Communications  Group,  Inc.,  to  Marlene  Dortch,  Secretary,  FCC  (June  27,  2003)  (Telemundo  June  27  Letter). 


 65  See  Letter  from  Philip  L.  Verveer,  Counsel  to  SBS,  to  Marlene  H.  Dortch,  Secretary,  FCC  (July  3,  2003) 
 (SBS  July  3  Letter),  at  Att.  A.  66 
 Telemundo  June  27  Letter,  Att.  at  4.  See  also  Leila  Cobo,  Regional  Mexican  Radio  Tops  Among  U.  S.  Hispanics,  Billboard,  June  21,  2003  (confirming  that  Hispanics  are  avid  radio  listeners,  far  more  than  the  general 


 population).  67 
 See  Univision  Reply  Comments  in  MB  Docket  No.  02-  277  et  al.,  at  6  (52%  of  Hispanic  television  households  in  the  top  30  markets  subscribe  to  cable  television,  compared  with  67.  8%  of  overall  U.  S.  households  that 


 subscribe  to  cable).  See  also  Toms  Rivera  Study  at  4  (  Satellite  television  is  somewhat  rarer  among  Latino  bilingual  viewers.). 
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 viewers  any  ability  to  see  certain  programming  produced  by  the  worlds  leading  producer  of  Spanish-language  programming. 
 Telemundo  further  argues  that  it  could  be  shut  out  of  the  radio  advertising  market,  a  key  promotional  avenue  for  its  television  programs.  The  rejection  of  television  advertising  by  radio  stations 
 owned  by  or  aligned  with  Univision  not  only  stifles  competition  but  also  runs  counter  to  typical  corporate  behavior  in  a  fully  functional  marketplace.  Telemundo  relies  heavily  on  radio  to  attract  new  viewers  to  its 
 television  programs,  spending  74%  of  its  total  corporate  advertising  budget  in  2002  on  radio.  204  Of  that  amount,  47%  was  spent  on  HBC  stations.  After  the  merger,  this  advertising  channel  could  potentially  be 
 foreclosed  from  Telemundo,  as  Univisions  affiliated  entities  have  done  in  the  past.  Entravision  radio  stations  in  key  markets  including  El  Paso  and  Denver  have  previously  rejected  all  Telemundo  advertising. 
 As  Univisions  largest  affiliate  group,  and  with  significant  ownership  interests  held  by  Univision,  Entravisions  interest  in  furthering  Univisions  dominance  clearly  outweighed  its  interest  in  receiving 
 proceeds  from  a  major  industry  advertiser.  This  signals  the  near  monopolistic  market  power  that  Univision  already  wields  in  Spanish-  language  broadcasting. 


 The  record  also  contains  largely  unrebutted  allegations  that  Univision  precludes  its  talent,  both  music  and  television  personalities,  from  appearing  on  rival  networks,  even  for  a  mere  interview  or  news 
 program  appearance.  205  Affidavits  on  the  record  state  that  this  practice  extended  both  to  unscheduled  or  impromptu  interviews  as  well  as  scheduled  sessions.  Even  appearances  at  industry  awards  shows  aired  on 
 rival  networks  were  passed  over  by  Univision  or  Univision-  affiliated  talent.  This  is  not  merely  a  loss  to  Telemundo  or  Univisions  other  television  rivals    it  results  in  a  loss  of  diversity  to  the  public.  These 
 restrictive  practices  are  not  tolerated  on  English-  language  media  and  run  counter  to  a  networks  interest  in  widely  promoting  the  talent  that  appears  on  shows  run  by  the  network.  This  again  signals  Univisions 
 current  market  power,  which  will  only  increase  through  outright  ownership  of  a  radio  distribution  channel. 


 These  practices  demonstrate  specific  public  interest  harms  that  could  be  exacerbated  by  the  addition  of  HBCs  radio  assets  to  Univisions  many  holdings.  Adding  radio  furthers  Univisions  ability 
 to  restrict  the  appearance  of  radio  personalities  on  rival  television  networks  or  to  shut  out  artists  at  competing  record  labels  from  promotional  opportunities  on  Univisions  radio  and  television  outlets.  For 
 Univisions  television  rivals,  the  potential  to  be  shut  out  of  radio  advertising  not  only  on  Entravision,  but  now  on  HBC  as  well,  leaves  them  without  significant  promotional  outlets,  and  removes  an  independent 
 radio  group  to  counter  Entravisions  exclusionary  tactics,  and  likewise  with  Univisions  radio  rivals.  Post-  merger,  Univision  and  Entravision  will  control  55  percent  of  the  Spanish-  language  radio  stations  in 
 Telemundos  major  markets,  with  nearly  90  percent  in  Phoenix  and  Dallas.  206 


 68  Letter  from  William  LeBeau,  Telemundo  Communications  Group,  Inc.,  to  Marlene  Dortch,  Secretary,  FCC 
 (Aug.  21,  2003)  (Telemundo  Aug.  21  Letter).  69 
 See  SBS  July  14  Letter,  Sokol  Decl.  at    16-  17  (noting  that  after  Ricky  Martin  appeared  on  Telemundo,  Univision  no  longer  gave  him  any  exposure  and  that  Univision  has  already  put  pressure  on  HBC  to  cease 


 interviewing  other  networks  personalities);  Letter  from  Andrew  Schwartzman,  Media  Access  Project,  to  FCC  Chairman  Michael  Powell  (July  25,  2003);  Telemundo  Aug.  21  Letter,  Atts.  3,  4. 
 70  Telemundo  Aug.  21  Letter,  Att.  6. 
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 Instead  of  thoroughly  analyzing  and  investigating  these  practices  and  the  likely  effect  of  the  proposed  merger,  the  majority  curtly  dismisses  them,  implying  that  Telemundo  can  fend  for  itself. 
 Allegations  of  past,  and  ongoing,  conduct  by  a  merger  applicant  detrimental  to  competition  and  the  public  interest  are  worthy  considerations  for  the  Commission  which,  if  found  true,  at  a  minimum  call  for 
 cautionary  conditions.  These  allegations  should  have  been  more  thoroughly  investigated  and  analyzed,  with  respect  to  all  of  Univisions  television  and  radio  rivals. 


 But  of  even  more  concern  than  the  mergers  effects  on  competition  is  its  impact  on  diversity.  Approximately  eighteen  million  people  speak  only  or  mostly  Spanish  in  this  country,  and  diversity  in 
 media  voices  in  that  language  will  be  greatly  reduced  after  Univision  acquires  HBC.  By  clearing  the  way  for  only  one  vision,  the  FCC  harms  the  expression  of  diverse  opinions  held  by  Latinos  across  the 
 country  and  others  seeking  to  reach  this  audience. 
 The  Commission  has  long  recognized  that  radio  and  television  compete  in  the  same  local  markets  for  diversity  purposes,  which  is  why  a  finding  otherwise  by  the  Department  of  Justice  is  not  conclusive. 
 The  proposed  merger  threatens  substantial  losses  in  diversity  in  local  markets  with  the  largest  Hispanic  American  populations.  Five  of  the  ten  largest  Hispanic  markets  have  fewer  than  four  Spanish-  language 
 TV  stations.  Postmerger,  Univision  will  combine  its  many  duopolies  and  its  other  stations  with  multiple  radio  stations  in  the  same  local  market,  often  pairing  the  leading  Spanish  TV  station  with  the  leading 
 radio  station.  Neither  the  Applicants  nor  the  majority  adequately  analyze  how  the  proposed  combination  affects  the  ability  of  Spanish  speakers  to  receive  information  from  a  number  of  independent,  diverse 
 sources. 
 That  more  than  20  Spanish-  language  satellite  and  cable  networks  serve  the  Hispanic  community  in  addition  to  the  few  Spanish-  language  broadcast  television  networks  is  not  an  adequate  answer. 
 Univision  Executive  Ray  Rodriguez  apparently  agrees,  stating  that  Hispanics  in  the  United  States  still  dont  have  enough  choices.  207  More  importantly,  just  a  few  months  ago,  the  Commission  excluded 
 satellite  and  cable  networks  from  its  cross-  ownership  analysis  in  order  to  focus  on  sources  of  local  programming,  which  the  Commission  found  paramount  in  its  diversity  analysis.  Against  that  finding,  the 
 majority  offers  no  explanation  for  why  the  availability  of  national  Spanish-  language  satellite  or  cable  networks  should  be  presumed  to  fulfill  the  right  of  Spanish  speakers  to  receive  diverse  local  news  and 
 public  affairs  programming  over  the  public  airwaves. 
 There  is  no  basis  to  believe  that  new  entry  will  ameliorate  the  harms  to  competition  and  diversity  threatened  by  the  proposed  merger.  The  Department  of  Justice  found  that  entry  of  new  Spanish-  language 
 radio  stations  would  not  be  timely,  likely,  or  sufficient,  as  station  licenses  are  scarce  and  expensive,  and  reformatting  of  stations  was  unlikely  to  offset  the  competitive  harm.  208  Rejecting  the  Department  of 
 Justices  conclusions  out-  of-  hand,  the  majority  fails  to  analyze  other  possible  approaches  adequately.  Not  only  does  the  majority  ignore  the  financial  risk,  time,  expense  and  specialized  knowledge  involved  in 
 switching  a  broadcast  station  to  a  different  broadcast  language,  it  also  assumes  without  further  analysis  that  switching  the  broadcast  language  of  a  television  station  is  just  as  easy  as  the  examples  it  cites  of 
 switching  a  radio  broadcast  language.  In  fact,  most  of  the  radio  conversions  from  English  to  Spanish  over 


 71  Univision  Nov.  2002  Earnings  Conference  Call. 
 72  DOJ  Complaint  at    27. 
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 the  past  three  years  were  accomplished  by  Spanish-  language  broadcast  incumbents,  not  new  entrants.  209  SBS  points  out  that  the  limited  availability  of  stations  and  the  expense  of  buying  an  existing  station  in  the 
 nations  top  markets,  the  difficulty  in  identifying  and  recruiting  talent,  and  the  required  knowledge  and  contacts  in  the  Spanish-  language  advertising  community  already  discourage  entry.  210  While  reformatting 
 to  a  different  broadcast  language  is  possible,  and  might  be  more  likely  over  the  long  term  with  price  increases  or  other  actions  Univision  could  take,  there  is  no  denying  that  barriers  for  a  new  entrant  are 
 significantly  raised  by  todays  action  allowing  the  combined  resources  of  Univision  and  HBC. 
 IV.  Univision  Cannot  Simultaneously  be  Both  a  Nascent  Player  and  a  Media  Giant  under  the  Commissions  Inconsistent  Regulatory  Approaches 


 As  the  majority  clears  the  way  for  the  nations  5th-  largest  network  to  acquire  the  leading  Spanish-language  radio  outlet,  Univision  continues  to  benefit  from  special  Commission  policies  it  obtained  as  a 
 fledgling  entity  serving  a  distinct  audience.  Univision  sells  advertising  for  its  affiliates  under  a  special  waiver  of  Commission  rules  it  obtained  on  the  basis  of  the  nascency  of  Spanish-  language  broadcasting. 
 English-  language  media  companies,  including  networks  that  have  less  reach  than  the  5th-  ranked  Univision,  are  prohibited  from  such  conduct  and  must  fully  comply  with  the  prohibition. 


 The  Commissions  network  representation  rule  bars  TV  station  affiliates  from  being  represented  by  their  affiliated  network  in  the  spot  sales  market  for  non-  network  advertising  time.  211  The  rule 
 addresses  two  areas  of  competitive  concern:  1)  competition  among  national  rep  firms  for  station  clients  (where  a  station  might  choose  the  networks  rep  to  improve  its  chances  of  getting  or  retaining  a  network 
 affiliation);  and  2)  competition  between  networks  and  national  spot  advertising  (to  avoid  a  basic  conflict  of  interest).  A  national  rep  firm  often  advises  its  client  stations  as  to  the  appropriate  level  of  their  national 
 spot  rates.  Without  the  rule,  a  network  could  act  in  the  networks  interest  by  assuring  reasonably  high  spot  rates  to  reduce  competition  with  network  advertising  rates.  Network-  associated  rep  firms  also  can 
 influence  station  programming  decisions  in  favor  of  the  networks  program  rather  than  a  national  spot  program. 


 In  1978,  Univision,  then  SIN  (Spanish  International  Network),  received  a  temporary  waiver  to  serve  as  national  rep  for  9  stations  in  the  sale  of  non-  network  time  on  a  national  or  regional  basis.  212  At 
 that  time,  there  were  only  12  Spanish-  language  TV  stations  in  the  country,  with  total  national  and  regional  revenues  of  less  than  $10  million.  Denying  the  waiver,  the  Commission  reasoned,  would  have  left  the 
 stations  with  no  choice  of  a  representative.  The  Commission  noted  that  the  Spanish  stations  were  fledgling  entities  just  getting  started. 


 In  fact,  the  Commission  at  that  time  stated: 


 73  SBS  July  14  Letter  at  2. 
 74  Id.  at  7,  Sokol  Decl.  at    11-  12. 
 75  47  C.  F.  R.    73.  658(  i). 
 76  Network  Representation  of  TV  Stations  in  National  Spot  Sales;  Request  of  Spanish  National  Network,  FCC 
 78-  682,  43  F.  R.  45895  (1978). 
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 There  is  one  other  aspect  of  the  matter  to  be  considered:  to  the  extent  that  the  Spanish-  speaking  population  forms  a  distinct  audience  or  market,  it  is 
 apparent  that  there  is  a  high  degree  of  control  of  the  TV  stations  serving  it,  with  SINs  principals  involved  in  six  of  the  12  or  14  stations,  10  of  them  presenting 
 SIN  programs,  and  SIN  serving  as  national  rep  for  9  of  them.  It  may  be  that  we  should  not  consider  any  change  in  the  rule,  or  waiver,  which  would  tend  to 
 increase  or  even  to  continue  this  degree  of  concentration  of  control.  213 
 In  1990,  the  Commission  made  permanent  the  temporary  waivers  it  had  granted  Spanish  station  operators.  214  It  did  so  on  the  basis  of  the  public  interest  benefits  of  encouraging  the  growth  and 
 development  of  new  networks;  fostering  foreign-  language  programming;  increasing  programming  diversity;  strengthening  competition  among  stations;  and  fostering  a  competitive  UHF  service.  215 


 As  the  5th-  largest  network,  the  Univision  Network  can  no  longer  be  considered  a  fledgling  or  emerging  network  justifying  continued  waiver  of  this  rule.  The  Univision  Network  has  led  all  other 
 networks  (Spanish  or  English,  cable  or  broadcast)  in  sustained  viewer  growth  since  1992.  216  Univision  has  a  market  capitalization  of  $7.8  billion,  with  2002  net  revenues  of  more  than  $1  billion  and  net  income 
 of  $86  million.  Hispanic  buying  power  has  increased  dramatically  since  1990,  with  the  Hispanic  population  representing  total  consumer  expenditures  of  $569  billion  in  2003  and  expected  to  account  for 
 $1  trillion  of  U.  S.  consumer  spending  by  2010.  217  According  to  Hispanic  Business  magazine,  $2.46  billion  of  total  advertising  expenditures  were  directed  towards  Spanish-  language  media  in  2002,  61.8%  of 
 which  went  to  television.  Univision  notes  that  national  spot  advertising  is  the  means  by  which  most  new  national  and  regional  advertisers  begin  marketing  to  Hispanics.  218 


 The  majority,  which  argues  so  strongly  there  is  nothing  distinct  about  Spanish-  language  broadcasting,  apparently  has  no  problems  continuing  a  special  waiver  for  the  dominant  Spanish-  language 
 media  player  premised  completely  upon  the  existence  of  a  separate  market. 
 V.  The  Majoritys  Attribution  Games  are  Harmful  Precedent 
 In  a  further  display  of  results-  driven  analysis,  the  majority  contorts  Commission  precedent  with  respect  to  nonvoting  shareholder  approval  rights  to  make  certain  that  Univisions  interest  in  Entravisions 
 radio  stations  is  not  cognizable  under  our  rules.  In  an  unusual  and  potentially  troubling  step,  the  majority  parses  the  assets  within  a  company  for  attribution  purposes,  claiming  that  the  shareholder  approval  rights 
 with  respect  to  television  are  attributable,  but  not  to  Entravisions  radio  side. 


 77  Id.  at  45898  (emphasis  added). 
 78  Amendment  of    73.  658(  i)  of  the  Commissions  Rules  Concerning  Network  Representation  of  TV  Stations  in 
 National  Spot  Sales,  FCC  90-  364,  5  FCC  Rcd  7280  (1990).  79 
 Id.  at    11.  80 
 Our  Story,  available  at  www.  univision.  net/  jsp/  en/  univision.  jsp  81 
 Univision  2002  Annual  Report  at  10.  82 
 Id.  at  13. 
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 Univisions  shareholder  approval  rights  include  the  right  to  reject  any  sale  of  a  television  station  affiliated  with  a  Univision-  owned  network.  While  the  Commission  has  held  that  a  nonvoting 
 shareholders  approval  rights  over  fundamental  corporate  matters  are  permissible  investor  protections  that  neither  restrict  a  corporations  discretion  or  rise  to  the  level  of  attributable  influence,  the  Commission 
 traditionally  applies  this  analysis  on  an  entity-  wide  basis,  not  to  only  some  assets  of  a  corporation. 
 Here,  the  majority  is  willing  to  create  another  fiction  that  Entravisions  corporate  discretion  can  be  parsed  into  various  business  lines  and  not  considered  as  a  whole.  When  the  Commission  begins 
 separately  examining  attribution  by  business  line  or  assets,  we  are  a  step  closer  to  clever  accounting  gimmicks. 


 The  majoritys  piecemeal  examination  of  de  facto  control  factors  fails  to  appreciate  the  totality  of  the  multiple  contractual  arrangements  and  other  relationships  between  Univision  and  Entravision,  as  well 
 as  the  merged  entity  and  Clear  Channel.  In  determining  whether  an  interest  is  attributable,  the  Commission  has  articulated  a  need  to  assess  the  cumulative  effect  of  all  relevant  factors,  interlocking 
 interests  and  multiple  relationships,  so  as  to  determine  whether  an  investor  holds  control  or  influence  over  the  core  operations  of  the  licensee.  219 


 The  relationships  between  Univision  and  Entravision  are  extensive  and  include:  Entravisions  network  affiliation  agreement  with  Univision  that  expires  in  2021,  Univisions  contract  to  serve  as 
 Entravisions  exclusive  advertising  representative  for  national  and  regional  spot  sales  through  2021,  Univisions  approval  rights  over  certain  corporate  actions  of  Entravision,  Entravisions  accounts  payable 
 to  Univision,  and  Univisions  nonvoting  stock  holdings  that  will  be  diluted  over  an  unusually  lengthy  Department  of  Justice  divestiture  period.  Commenters  state  that  Entravision  is  heavily  dependent  on 
 Univision  and  will  continue  to  be  after  the  merger.  Whether  these  relationships,  considered  collectively,  afford  the  opportunity  for  Univision  to  influence  the  overarching  policy  determinations,  programming 
 decisions,  or  day-  to-  day  operations  of  Entravision  requires  more  careful  analysis  than  the  singular  approach  conducted  by  the  majority. 


 Collectively,  it  appears  that  Univision  will  be  in  a  position  to  exert  tremendous  control  over  Entravision  as  a  whole  for  some  time  to  come.  Accordingly,  the  Commission  should  not  have  contorted 
 the  attribution  rules  to  exclude  Entravisions  radio  assets.  When  those  assets  are  taken  into  account,  this  transaction  results  in  dangerous  consolidation  in  several  local  markets. 


 VI.  The  Commission  Should  Promote  Minority  Broadcasting 
 Todays  decision  takes  media  consolidation  to  new  and  threatening  heights  for  those  who  receive  their  news  and  entertainment  in  Spanish.  One  company  will  be  the  gatekeeper  to  the  news  and 
 entertainment  that  this  population  will  receive  over  their  airwaves.  Having  conferred  additional  size  and  power  upon  Univision,  we  will  likely  see  advertising  rates  go  up,  small  advertisers  and  entrepreneurs 
 frozen  out,  and  any  pretense  of  diversity  fall  away  for  Spanish  speakers. 


 83  See  Review  of  the  Commissions  Regulations  Governing  Attribution  of  Broadcast  and  Cable/  MDS  Interests, 
 14  FCC  Rcd  12559,  12581  (1999). 
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 Rather  than  allowing  further  media  concentration  by  Univision,  we  should  have  focused  instead  on  ways  to  promote  minority  participation  in  our  media.  Having  failed  to  do  so  here,  we  should  fully 
 examine  the  state  of  minority  broadcasting  and  the  distinctiveness  of  Spanish-  language  broadcasting  and  take  steps  to  promote  more  widespread  minority  broadcasting,  before  the  next  wave  of  consolidation 
 makes  a  mockery  of  that  objective.  Although  they  make  up  13  percent  of  our  population,  Latinos  own  only  1.8  percent  of  all  radio  stations  and  0.1  percent  of  all  television  stations.  Hispanics  are  under-represented 
 not  only  in  boardrooms,  but  in  newsrooms  as  well.  And  those  numbers  continue  to  trend  down. 


 Three  months  ago,  this  Commission  walked  away  from  most  of  its  media  concentration  protections.  Today  we  turn  a  deaf  ear  to  the  millions  of  people  in  this  country  who  receive  their  news, 
 information,  and  entertainment  from  Spanish-  language  media.  We  tell  those  who  speak  Spanish  that  they  can  listen  to  the  English  media  if  they  want  diverse  media  sources.  We  should  quickly  begin  righting  this 
 fundamental  wrong. 
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