Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices 15929

2 119 Cong. Rec. 24598 (1073). See United States

v. Gillette Co., 406 F. Supp. 713, 715 (D. Mass.

1975). A ‘‘public interest’’ determination can be

made properly on the basis of the Competitive

Impact Statement and Response to Comments filed

pursuant to the APPA. Although the APPA

authorizes the use of additional procedures, 15

U.S.C. § 16(f), those procedures are discretionary. A

court need not invoke any of them unless it believes

that the comments have raised significant issues

and that further proceedings would aid the court in

resolving those issues. See H.R. Rep. 93–1463, 93rd

Cong. 2d Sess. 8–9 (1974), reprinted in U.S.C.C.A.N.

6535, 6538.

3Bechtel, 648 F.2d at 666 (citations omitted)

(emphasis added); see BNS, 858 F.2d at 463; United

States v. National Broadcasting Co., 449 F. Supp.

1127, 1143 (C.D. Cal. 1978); Gillette, 406 F. Supp.

at 716. See also Microsoft, 56 F.3d at 1461 (whether

‘‘the remedies [obtained in the decree are] so

inconsonant with the allegations charged as to fall

outside of the ‘reaches of the public interest’ ’’)

(citations omitted).

4United States v. American Tel. and Tel Co., 552

F. Supp. 131, 151 (D.D.C. 1982), aff’d. sub nom.

Maryland v. United States, 460 U.S. 1001 (1983),

quoting Gillette Co.. 406 F. Supp. at 716 (citations

omitted); United States v. Alcan Aluminum, Ltd.,

605 F. Supp. 619, 622 (W.D. Ky. 1985).

brought by the United States be subject

to a sixty (60) day comment period, after

which the Court shall determine

whether entry of the proposed Final

Judgment ‘‘is in the public interest.’’ In

making that determination, the Court

may consider—

(1) The competitive impact of such

judgment, including termination of alleged

violations, provisions for enforcement and

modification, duration or relief sought,

anticipated effects of alternative remedies

actually considered, and any other

considerations bearing upon the adequacy of

such judgment;

(2) The impact of entry of such judgment

upon the public generally and individuals

alleging specific injury from the violations

set forth in the complaint including

consideration of the public benefit, if any, to

be derived from a determination of the issues

at trial. 15 U.S.C. § 16(e).

As the United States Court of Appeals

for the D.C. Circuit recently held, this

statute permits a court to consider,

among other things, the relationship

between the remedy secured and the

specific allegations set forth in the

government’s complaint, whether the

decree is sufficiently clear, whether

enforcement mechanisms are sufficient,

and whether the decree may positively

harm third parties. See United States v.

Microsoft, 56 F.3d 1448, 1461–62 (D.C.

Cir. 1995).

In conducting this inquiry, ‘‘[t]he

Court is nowhere compelled to go to

trial or to engage in extended

proceedings which might have the effect

of vitiating the benefits of prompt and

less costly settlement through the

consent decree process.’’ 2 Rather,

[a]bsent a showing of corrupt failure of the

governments to discharge its duty, the Court,

in making its public interest finding, should

* * * carefully consider the explanations of

the government in the competitive impact

statement and its responses to comments in

order to determine whether those

explanations are reasonable under the

circumstances.

United States v. Mid-America Dairymen,

Inc., 1977–1 Trade Cas. ¶ 61,508, at

71,980 (W.D. No. 1977).

Accordingly, with respect to the

adequacy of the relief secured by the

decree, a court may not ‘‘engage in an

unrestricted evaluation of what relief

would best serve the public.’’ United

States v. BNS, Inc., 858 F.2d 456, 462

(9th Cir. 1988), citing United States v.

Bechtel Corp., 648 F.2d 660, 666 (9th

Cir.), cert. denied, 454 U.S. 1083 (1981);

see also Microsoft, 56 F.3d at 1460–62.

Precedent requires that—

the balancing of competing social and

political interests affected by a proposed

antitrust consent decree must be left, in the

first instance, to the discretion of the

Attorney General. The court’s role in

protecting the public interest is one of

insuring that the government has not

breached its duty to the public in consenting

to the decree. The court is required to

determine not whether a particular decree is

the one that will best serve society, but

whether the settlement is ‘‘within the reaches

of the public interest.’’ More elaborate

requirements might undermine the

effectiveness of antitrust enforcement by

consent decree.3

The proposed Final Judgment, therefore,

should not be reviewed under a

standard of whether it is certain to

eliminate every anticompetitive effect of

a particular practice or whether it

mandates certainty of free competition

in the future. Court approval of a final

judgment requires a standard more

flexible and less strict than the standard

required for a finding of liability. ‘‘[A]

proposed decree must be approved even

if it falls short of the remedy the court

would impose on its own, as long as it

falls within the range of acceptability or

is ‘within the reaches of public

interest.’ ’’ 4

This is strong and effective relief that

should fully address the competitive

harm posed by the proposed merger.

VIII. Determinative Documents

There are no determinative materials

or documents within the meaning of the

APPA that were considered by the

United States in formulating the

proposed Final Judgment.

Respectfully submitted,

Dando B. Cellini,

Merger Task Force, U.S. Department of

Justice, Antitrust Division, 1401 H Street,

N.W., Suite 4000, Washington, D.C. 20530,

(202) 307–0829.

Dated: March 20, 1997.

Exhibit A—Definition of HHI and

Calculations for Market

‘‘HHI’’ means the HerfindahlHirschman Index, a commonly accepted

measure of market concentration. It is

calculated by squaring the market share

of each firm competing in the market

and then summing the resulting

numbers. For example, for a market

consisting of four firms with shares of

thirty, thirty, twenty, and twenty

percent, the HHI is 2600

(302+302+202+202=2600). The HHI takes

into account the relative size and

distribution of the firms in a market and

approaches zero when a market consists

of a large number of firms of relatively

equal size. The HHI increases both as

the number of firms in the market

decreases and as the disparity in size

between those firms increases.

Markets in which the HHI is between

1000 and 1800 points are considered to

be moderately concentrated, and those

in which the HHI is in excess of 1800

points are considered to be

concentrated. Transactions that increase

the HHI by more than 100 points in

concentrated markets presumptively

raise antitrust concerns under the

Merger Guidelines. See Merger

Guidelines § 1.51.

Certificate of Service

I, Dando B. Cellini, hereby certify

that, on March 20, 1997, I caused the

foregoing document to be served on

defendants American Radio Systems

Corporation and EZ Communications,

Inc. by having a copy mailed, first-class,

postage prepared, to:

James R. Loftis, III,

Joseph J. Simons,

Collier Shannon Rill & Scott, PLLC,

3050 K Street, NW., Suite 400, Washington,

DC 20007, (202) 342–8480, Counsel for

American Radio Systems Corporation.

Ray V. Hartwell, III,

Andrew J. Strenio, Jr.,

Hunton & Williams,

1900 K Street, NW., Washington, DC 20006–

1109, (202) 955–1639, Counsel for EZ

Communications, Inc.

Dando B. Cellini.

[FR Doc. 97–8459 Filed 4–2–97; 8:45 am]

BILLING CODE 4410–11–M

Proposed Final Judgment and

Competitive Impact Statement; United

States of America versus EZ

Communications, Inc. and Evergreen

Media Corporation

Notice is hereby given pursuant to the

Antitrust Procedures and Penalties Act,

15 U.S.C. § 16(b)-(h), that a proposed

Final Judgment, Stipulation, and
15930 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

Competitive Impact Statement have

been filed with the United States

District Court for the District of

Columbia in United States v. EZ

Communications, Inc. and Evergreen

Media Corporation Civ. Action No. 97

CV 406. The proposed Final Judgment is

subject to approval by the Court after

the expiration of the statutory 60-day

public comment period and compliance

with the Antitrust Procedures and

Penalties Act, 15 U.S.C. § 16(b)-(h).

Plaintiff filed a civil antitrust

Complaint on February 27, 1997,

alleging that a proposed swap and

acquisition of radio stations in

Charlotte, North Carolina between EZ

Communications, Inc. (‘‘EZ’’) and

Evergreen Media Corporation

(‘‘Evergreen’’) would violate Section 7 of

the Clayton Act, 15 U.S.C. § 18. The

Complaint alleges that EZ and Evergreen

both own and operate numerous radio

stations throughout the United States,

and that they each own and operate

radio stations in the Charlotte, North

Carolina metropolitan area. The

combined transactions would give EZ a

significant share of the radio advertising

market in the Charlotte metropolitan

area. As a result, the combination of

these stations would lessen competition

substantially in the sale of radio

advertising time in the Charlotte

metropolitan area.

The prayer for relief seeks: (a) An

adjudication that the proposed

transactions described in the Complaint

would violate Section 7 of the Clayton

Act; (b) preliminary and permanent

injunctive relief preventing the

consummation of such transactions; (c)

an award to the United States of the

costs of this action; and (d) such other

relief as is proper.

Shortly before this suit was filed, a

proposed settlement was reached that

permits EZ to complete its transactions

with Evergreen, yet preserves

competition in the market in which the

transactions would raise significant

competitive concerns. A Stipulation and

proposed Final Judgment embodying

the settlement were filed at the same

time the Complaint was filed.

The proposed Final Judgment orders

EZ to divest WRFX-FM, currently

owned by Evergreen. Unless the

plaintiff grants a time extension, EZ

must divest this radio station either

within six months after the filing of the

Complaint or within five (5) business

days after notice of entry of the Final

Judgment, whichever is later. If EZ does

not divest WRFX-FM within the

divestiture period, the Court shall, upon

plaintiff’s application, appoint a trustee

to sell the assets. The proposed Final

Judgment also requires EZ to ensure

that, until the divestiture mandated by

the Final Judgment has been

accomplished, WRFX-FM will be

operated independently as a viable,

ongoing business, and kept separate and

apart from defendant EZ’s other

Charlotte radio stations. Further, the

proposed Final Judgment requires

defendants to give plaintiff prior notice

regarding future radio station

acquisitions or certain agreements

pertaining to the sale of radio

advertising time in Charlotte.

A Competitive Impact Statement filed

by the United States describes the

Complaint, the proposed Final

Judgment, and remedies available to

private litigants.

Public comment is invited within the

statutory 60-day comment period. Such

comments, and the responses thereto,

will be published in the Federal

Register and filed with the Court.

Written comments should be directed to

Craig W. Conrath, Chief, Merger Task

Force, Antitrust Division, 1401 H Street,

N.W., Suite 4000, Washington, D.C.

20530 (telephone: (202) 307–0001).

Copies of the Complaint, Stipulation,

proposed final Judgment and

Competitive Impact Statement are

available for inspection in Room 215 of

the U.S. Department of Justice, Antitrust

Division, 325 7th Street, N.W.,

Washington. D.C. 20530 (telephone:

(202) 514–2481) and the office of the

Clerk of the United States District Court

for the District of Columbia, 3rd Street

and Constitution Avenue, N.W.,

Washington, D.C.

Copies of any of these materials may

be obtained upon request and payment

of a copying fee.

Constance K. Robinson,

Director of Operation Antitrust Division.

United States District Court For the District

of Columbia

United States of America, Plaintiff, v. EZ

Communications, Inc. and Evergreen Media

Corporation, Defendants. Civil Action No.

1:97CV00406, Filed 2/27/97, Judge

Oberdorfer.

Stipulation and Order

It is stipulated by and between the

undersigned parties, by their respective

attorneys, as follows:

(1) The Court has jurisdiction over the

subject matter of this action and over

each of the parties hereto, and venue of

this action is proper in the United States

District Court for the District of

Columbia.

(2) The parties stipulate that a Final

Judgment in the form hereto attached

may be filed and entered by the Court,

upon the motion of any party or upon

the Court’s own motion, at any time

after compliance with the requirements

of the Antitrust Procedures and

Penalties Act (15 U.S.C. § 16), and

without further notice to any party or

other proceedings, provided that

plaintiff has not withdrawn its consent,

which it may do at any time before the

entry of the proposed Final Judgment by

serving notice thereof on defendants

and by filing that notice with the Court.

(3) Defendants shall abide by and

comply with the provisions of the

proposed Final Judgment pending entry

of the Final Judgment, or until

expiration of time for all appeals of any

Court ruling declining entry of the

proposed Final Judgment, and shall,

from the date of the signing of this

Stipulation by the parties, comply with

all the terms and provisions of the

proposed Final Judgment as though the

same were in full force and effect as an

order of the Court.

(4) Defendants shall not consummate

the transaction sought to be enjoined by

the complaint herein before the Court

has signed this Stipulation and Order.

(5) This Stipulation shall apply with

equal force and effect to any amended

proposed Final Judgment agreed upon

in writing by the parties and submitted

to the Court. In the event that, as

contemplated by defendants, the

WRFX–FM Assets are transferred by

defendant Evergreen Media Corporation

(‘‘Evergreen’’) to defendant EZ

Communications, Inc. (‘‘EZ’’) or to a

trust approved by plaintiff and the FCC

prior to the entry of the attached Final

Judgment, then an amended Complaint

and proposed Final Judgment which do

not name Evergreen as a defendant shall

promptly be filed herein and submitted

to the Court.

(6) The parties recognize that there

could be a delay in obtaining approval

by or a ruling of a government agency

related to either the transfer of the

WRFX–FM Assets to EZ or to an

approved trust, described in paragraph

(5) above, or the divestiture required by

Section IV of the Final Judgment,

notwithstanding the good faith efforts of

defendants and any prospective

Acquirer, as defined in the Final

Judgment. In this circumstance, plaintiff

will, in the exercise of its sole

discretion, acting in good faith, give

special consideration to forbearing from

applying for the appointment of a

trustee pursuant to Section V of the

Final Judgment, or from pursuing legal

remedies available to it as a result of

such delay, provided that: (a)

defendants have entered into a

definitive agreement to divest the

WRFX–FM Assets, and such agreement

and the Acquirer have been approved by

plaintiff; (b) all papers necessary to
Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices 15931

secure any governmental approvals and/

or rulings to effectuate such divestiture

(including but not limited to FCC, SEC

and IRS approvals or rulings) have been

filed with the appropriate agency; (c)

receipt of such approvals are the only

closing conditions that have not been

satisfied or waived; and (d) defendants

have demonstrated that neither they nor

the prospective Acquirer are responsible

for any such delay.

(7) In the event (a) plaintiff withdraws

its consent, as provided in paragraph 2

above, or (b) the proposed Final

Judgment is not entered pursuant to this

Stipulation, the time has expired for all

appeals of any Court ruling declining

entry of the proposed Final Judgment,

and the Court has not otherwise ordered

continued compliance with the terms

and provisions of the proposed Final

Judgment, then the parties are released

from all further obligations under this

Stipulation, and the making of this

Stipulation shall be without prejudice to

any party in this or any other

proceeding.

(8) Defendants represent that the

divestiture ordered in the proposed

Final Judgment can and will be made,

and that defendants will later raise no

claim of hardship or difficulty as

grounds for asking the Court to modify

any of the divestiture provisions

contained therein.

Dated: February 26, 1997.

For Plaintiff United States of America

Dando B. Cellini,

U.S. Department of Justice, Antitrust Division,

Merger Task Force, 1401 H Street, NW., Suite

4000, Washington, DC 20005, (202) 307–0829.

So Ordered.

lllllllllllllllllllll

United States District Judge

For Defendant EZ Communications, Inc.

Ray V. Hartwell, III,

Andrew J. Strenio, Jr.,

Hunton & Williams,

1900 K Street, NW, Washington, DC 20006–

1109, (202) 955–1639.

For Defendant Evergreen Media

Corporation.

Bruce J. Prager,

Latham & Watkins,

885 Third Avenue, New York, NY 10022–

4802, (212) 906–1272.

Final Judgment

Whereas, plaintiff, the United States

of America, having filed its Complaint

herein on February 27, 1997, and

defendants EZ Communications, Inc.

(‘‘EZ’’) and Evergreen Media

Corporation (‘‘Evergreen’’), by their

attorneys, having consented to the entry

of this Final Judgment without trial or

adjudication of any issue of fact or law

herein, and without this Final Judgment

constituting any evidence against or an

admission by any party with respect to

any issue of law or fact herein;

And whereas, defendants have agreed

to be bound by the provisions of this

Final Judgment pending its approval by

the Court;

And whereas, the purpose of this

Final Judgment is prompt and certain

divestiture of certain assets to assure

that competition is not substantially

lessened;

And whereas, plaintiff requires

defendants to make certain divestitures

for the purpose of remedying the loss of

competition alleged in the Complaint;

And whereas, defendants have

represented to plaintiff that the

divestiture ordered herein can and will

be made and that defendants will later

raise no claims of hardship or difficulty

as grounds for asking the Court to

modify any of the divestiture provisions

contained below;

Now, therefore, before the taking of

any testimony, and without trial or

adjudication of any issue of fact or law

herein, and upon consent of the parties

hereto, it is hereby ordered, adjudged,

and decreed as follows:

I. Jurisdiction

This Court has jurisdiction over each

of the parties hereto and over the subject

matter of this action. The Complaint

states a claim upon which relief may be

granted against defendants EZ and

Evergreen, as hereinafter defined, under

Section 7 of the Clayton Act, as

amended (15 U.S.C. 18).

II. Definitions

As used in this Final Judgment:

A. EZ means defendant EZ

Communications, Inc., a Virginia

corporation with its headquarters in

Fairfax, Virginia, and includes its

successors and assigns (specifically

including without limitation American

Radio Systems Corporation (‘‘ARS’’), a

Delaware corporation headquartered in

Boston, Massachusetts, which has

agreed to acquire EZ through merger),

its subsidiaries, and directors, officers,

managers, agents and employees acting

for or on behalf of EZ.

B. Evergreen means defendant

Evergreen Media Corporation, a

Delaware corporation with its

headquarters in Irving, Texas, and

includes Evergreen’s successors and

assigns, its subsidiaries, and directors,

officers, managers, agents and

employees acting for or on behalf of

Evergreen.

C. WRFX–FM Assets means all of the

assets, tangible or intangible, used in the

operation of the WRFX 99.7 FM radio

station in the Charlotte Area, including

but not limited to all real property

(owned and leased) used in the

operation of that station; all broadcast

equipment, personal property,

inventory, office furniture, fixed assets

and fixtures, materials, supplies and

other tangible property used in the

operation of that station; all licenses,

permits, authorizations and applications

therefor issued by the Federal

Communications Commission (‘‘FCC’’)

and other governmental agencies related

to that station, all contracts, agreements,

leases and commitments of defendants

pertaining to that station and its

operations; all trademarks, service

marks, trade names, copyrights, patents,

slogans, programming materials and

promotional materials relating to that

station, and all logos and other records

maintained by defendants or that station

in connection with its business.

D. Charlotte Area means the

Charlotte, North Carolina Metro Survey

Area as identified by The Arbitron

Radio Market Report for Charlotte (Fall

1996), which is made up of the

following counties: Union, York,

Cabarrus, Rowan, Mecklenburg, Lincoln

and Gaston.

E. Acquirer means the entity to whom

defendants divest the WRFX–FM Assets

under this Final Judgment.

F. EZ Radio Station means any radio

station owned by EZ and licensed to a

community in the Charlotte Area, other

than WRFX–FM.

G. Non-EZ Radio Station means any

radio station licensed to a community in

the Charlotte area that is not an EZ

Radio Station.

III. Applicability

A. The provisions of this Final

Judgment apply to the defendants, their

successors and assigns (specifically

including without limitation ARS), their

subsidiaries, affiliates, directors,

officers, managers, agents and

employees, and all other persons in

active concert or participation with

them who shall have received actual

notice of this Final Judgment by

personal service or otherwise,

specifically including any trustee or

trustees appointed by defendants

pursuant to an FCC License Trust

Agreement or an FCC Assets Trust

Agreement applicable to the WRFX–FM

Assets.

B. The defendants shall require, as a

condition of the sale or other

disposition of all or substantially all of

the assets used in their business of

owning and operating their portfolio of

radio stations in the Charlotte Area, that

the acquiring party or parties agree to be

bound by the provisions of this Final
15932 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

Judgment; provided, however,

defendants need not obtain such an

agreement from an Acquirer in

connection with the divestiture of the

WRFX–FM Assets.

IV. Divestiture of WRFX–FM Assets

A. Defendant EZ is hereby ordered

and directed, in accordance with the

terms of this Final Judgment, within six

(6) months after the filing of the

compliant in this action, or within five

(5) business days after notice of entry of

this Final Judgment, whichever is later,

to divest the WRFX–FM Assets to an

Acquirer acceptable to plaintiff, in its

sole discretion. Unless plaintiff

otherwise consents in writing, the

divestiture pursuant to Section IV of

this Final Judgment, or by the trustee

appointed pursuant to Section V, shall

include all the WRFX–FM Assets and

shall be accomplished in such a way as

to satisfy plaintiff, in its sole discretion,

that the WRFX–FM Assets can and will

be used by an Acquirer as a viable,

ongoing commercial radio business. The

divestiture, whether pursuant to Section

IV or V of this Final Judgment, shall be

made (1) to an Acquirer that, in the sole

judgment of plaintiff, has the capability

and intent of competing effectively, and

has the managerial, operational and

financial capability to compete

effectively as a radio station operator in

the Charlotte Area; and (2) pursuant to

agreements the terms of which shall not,

in the sole judgment of plaintiff,

interfere with the ability of the Acquirer

to compete effectively.

B. Defendant EZ agrees to use its best

efforts to divest the WRFX–FM Assets,

and to obtain all regulatory approvals

necessary for such divestiture, as

expeditiously as possible. Plaintiff, in

its sole discretion, may extend the time

period for the divestiture for two (2)

additional thirty (30)-day periods of

time, not to exceed sixty (60) calendar

days in total.

C. In accomplishing the divestiture

ordered by this Final Judgment,

defendant EZ promptly shall make

known, by usual and customary means,

the availability of the WRFX–FM Assets.

Defendant EZ shall inform any person

making a bona fide inquiry regarding a

possible purchase that the sale is being

made pursuant to this Final Judgment

and provide such person with a copy of

the Final Judgment. Defendant EZ shall

make known to any person making an

inquiry regarding a possible purchase of

the WRFX–FM Assets that the assets

described in Section II (C) are being

offered for sale. Defendants also shall

offer to furnish to all bona fide

prospective purchasers, subject to

customary confidentiality assurances,

all information regarding the WRFX–FM

Assets customarily provided in a due

diligence process, except such

information that is subject to attorneyclient privilege or attorney workproduct privilege. Defendants shall

make available such information to

plaintiff at the same time that such

information is made available to any

other person.

D. Defendants shall permit bona fide

prospective purchasers of the WRFX–

FM Assets to have access to personnel

and to make such inspection of the

assets, and any and all financial,

operational or other documents and

information, as is customary in a due

diligence process.

E. Defendants shall not interfere with

any efforts by any Acquirer to employ

the general manager or any other

employee of WRFX–FM.

V. Appointment of Trustee

A. In the event that EZ has not

divested the WRFX–FM Assets within

the time period specified in Section IV

above, the Court shall appoint, on

application of plaintiff, a trustee

selected by plaintiff to effect the

divestiture of the assets.

B. After the trustee’s appointment has

become effective, only the trustee shall

have the right to sell the WRFX–FM

Assets. The trustee shall have the power

and authority to accomplish the

divestiture at the best price than

obtainable upon a reasonable effort by

the trustee, subject to the provisions of

Section V and VII of this Final Judgment

and consistent with FCC regulations,

and shall have such other powers as the

Court shall deem appropriate. Subject to

Section V (C) of this Final Judgment, the

trustee shall have the power and

authority to hire at the cost and expense

of defendant EZ any investment

bankers, attorneys or other agents

reasonably necessary in the judgment of

the trustee to assist in the divestiture,

and such professionals or agents shall

be solely accountable to the trustee. The

trustee shall have the power and

authority to accomplish the divestiture

at the earliest possible time to purchaser

acceptable to plaintiff in its sole

judgment, and shall have such other

powers as this Court shall deem

appropriate. EZ shall not object to the

sale of the WRFX–FM Assets by the

trustee on any grounds other than the

trustee’s malfeasance. Any such

objection by EZ must be conveyed in

writing to plaintiff and the trustee no

later than fifteen (15) calendar days after

the trustee has provided the notice

required under Section VII of this Final

Judgment.

C. The trustee shall serve at the cost

and expense of EZ, on such terms and

conditions as the Court may prescribe,

and shall account for all monies derived

from the sale of the assets sold by the

trustee and all costs and expenses so

incurred. After approval by the Court of

the trustee’s accounting, including fees

for its services and those of any

professionals and agents retained by the

trustee, all remaining monies shall be

paid to EZ, and the trustee’s services

shall then be terminated The

compensation of such trustee and of any

professionals and agents retained by the

trustee shall be reasonable in light of the

value of the divestiture and based on a

fee arrangement providing the trustee

with an incentive based on the price

and terms of the divestiture and the

speed with which it is accomplished.

D. Defendants shall take no action to

interfere with or impede the trustee’s

accomplishment of the divestiture of the

WRFX–FM Assets, and shall use their

best efforts to assist the trustee in

accomplishing the required divestiture,

including best efforts to effect all

necessary regulatory approvals. Subject

to a customary confidentiality

agreement, the trustee shall have full

and complete access to the personnel,

books, records and facilities related to

the WRFX–FM Assets, and defendants

shall develop such financial or other

information as may be necessary for the

divestiture of the WRFX–FM Assets.

Defendants shall permit prospective

purchasers of the WRFX–FM Assets to

have access to personnel and to make

such inspection of physical facilities

and any and all financial, operational or

other documents and information as

may be relevant to the divestiture

required by this Final Judgment.

E. After its appointment becomes

effective, the trustee shall file monthly

reports with defendant EZ, plaintiff and

the Court, setting forth the trustee’s

efforts to accomplish divestiture of the

WRFX–FM Assets as contemplated

under this Final Judgment; provided,

however, that to the extent such reports

contain information that the trustee

deems confidential, such reports shall

not be filed in the public docket of the

Court. Such reports shall include the

name, address and telephone number of

each person who, during the preceding

month, made an offer to acquire,

expressed an interest in acquiring,

entered into negotiations to acquire, or

was contacted or made an inquiry about

acquiring, any interest in the WRFX–FM

Assets, and shall describe in detail each

contact with any such person during

that period. The trustee shall maintain

full records of all efforts made to divest

these assets.
Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices 15933

F. Within six (6) months after its

appointment has become effective, if the

trustee has not accomplished the

divestiture required by Section IV of

this Final Judgment, the trustee shall

promptly file with the Court a report

setting forth (1) the trustee’s efforts to

accomplish the required divestiture, (2)

the reasons, in the trustee’s judgment,

why the required divestiture has not

been accomplished, and (3) the trustee’s

recommendations; provided, however,

that to the extent such reports contain

information that the trustee deems

confidential, such reports shall not be

filed in the public docket of the Court.

The trustee shall at the same time

furnish such reports to plaintiff and

defendant EZ, which shall each have the

right to be heard and to make additional

recommendations. The Court shall

thereafter enter such orders as it shall

deem appropriate to accomplish the

purpose of this Final Judgment, which

shall, if necessary, include extending

the term of the trustee’s appointment.

VI. Preservation of Assets/Hold Separate

Until the divestiture of the WRFX–FM

Assets required by Section IV of the

Final Judgment has been accomplished:

A. Defendants shall take all steps

necessary to operate WRFX–FM as a

separate, independent, ongoing,

economically viable and active

competitor to defendant EZ’s other

stations in the Charlotte Area, and shall

take all steps necessary to ensure that,

except as necessary to comply with

Section IV and paragraphs B and C of

this Section of the Final Judgment, the

management of said station, including

the performance of decision-making

functions regarding marketing and

pricing, will be kept separate and apart

from, and not influenced by, defendant

EZ.

B. Defendants shall use all reasonable

efforts to maintain and increase sales of

advertising time by WRFX–FM, and

shall maintain at 1996 or previously

approved levels for 1997, whichever are

higher, promotional advertising, sales,

marketing and merchandising support

for such radio station.

C. Defendants shall take all steps

necessary to ensure that the assets used

in the operation of WRFX–FM are fully

maintained. WRFX–FM’s sales and

marketing employees shall not be

transferred or reassigned to any other

station, except for transfer bids initiated

by employees pursuant to defendants’

regular, established job posting policies,

provided that defendants give plaintiff

and Acquirer ten (10) day’s notice of

such transfer.

D. Defendants shall not, except as part

of a divestiture approved by plaintiff,

sell any WRFX–FM Assets.

E. Defendants shall take no action that

would jeopardize the sale of the WRFX–

FM Assets.

F. Defendants shall appoint a person

or persons to oversee the assets to be

held separate and who will be

responsible for defendants’ compliance

with Section VI of this Final Judgment.

VII. Notification

Within two (2) business days

following execution of a binding

agreement to divest, including all

contemplated ancillary agreements (e.g.,

financing), to effect any proposed

divestiture pursuant to Section IV or V

of this Final Judgment, defendant EZ or

the trustee, whichever is then

responsible for effecting the divestiture,

shall notify plaintiff of the proposed

divestiture. If the trustee is responsible,

it shall similarly notify defendant EZ.

The notice shall set forth the details of

the proposed transaction and list the

name, address and telephone number of

each person not previously identified

who offered to, or expressed an interest

in or a desire to, acquire any ownership

interest in WRFX–FM Assets, together

with full details of same. Within fifteen

(15) calendar days of receipt by plaintiff

of such notice, plaintiff may request

from defendants, the proposed

purchaser or purchasers, any other third

party, or the trustee, if applicable,

additional information concerning the

proposed divestiture, the proposed

purchaser, and any other potential

purchaser. Defendants and the trustee

shall furnish any additional information

requested within fifteen (15) calendar

days of the receipt of the request.

Within thirty (30) calendar days after

receipt of the notice or within twenty

(20) calendar days after plaintiff has

been provided the additional

information, whichever is later, plaintiff

shall provide written notice to

defendants and the trustee, if there is

one, stating whether or not it objects to

the proposed divestiture. If plaintiff fails

to object within the period specified, or

if plaintiff provides written notice to

defendants and the trustee, if there is

one, that it does not object, then the

divestiture may be consummated,

subject only to defendants’ limited right

to object to the sale under Section V(B)

of this Final Judgment. A divestiture

proposed under Section IV shall not be

consummated if plaintiff objects to it.

Upon objection by plaintiff, or by

defendant EZ under the proviso in

Section V(B), a divestiture proposed

under Section V shall not be

consummated unless approved by the

Court.

VIII. Financing

Defendants are ordered and directed

not to finance all or any part of any

purchase by an Acquirer made pursuant

to Sections IV or V of this Final

Judgment without the prior written

consent of plaintiff.

IX. Affidavits

A. Within twenty (20) calendar days

of the filing of this Final Judgment and

every thirty (30) calendar days thereafter

until the divestiture has been

completed, whether pursuant to Section

IV or Section V of this Final Judgment,

defendants shall deliver to plaintiff an

affidavit as to the fact and manner of

defendants’ compliance with Section IV

or V of this Final Judgment. Each such

affidavit shall include, inter alia, the

name, address and telephone number of

each person who, at any time after the

period covered by the last such report,

was contacted by defendants, or their

representatives, made an offer to

acquire, expressed an interest in

acquiring, entered into negotiations to

acquire, or made an inquiry about

acquiring, any interest in the WRFX–FM

Assets, and shall describe in detail each

contact with any such person during

that period. Each such affidavit shall

also include a description of the efforts

that defendants have taken to solicit a

buyer for the WRFX–FM Assets.

B. Within twenty (20) calendar days

of the filing of this Final Judgment,

defendants shall deliver to plaintiff an

affidavit which describes in reasonable

detail all actions defendants have taken

and all steps defendants have

implemented on an on-going basis to

preserve WRFX–FM pursuant to Section

VII of this Final Judgment. Defendants

shall deliver to plaintiff an affidavit

describing any changes to the efforts

and actions outlined in their earlier

affidavit(s) filed pursuant to this Section

within fifteen (15) calendar days after

such change is implemented.

C. Defendants shall preserve all

records of all efforts made to preserve

WRFX–FM and to divest the WRFX–FM

Assets.

X. Notice

A. Unless such transaction is

otherwise subject to the reporting and

waiting period requirements of the HartScott-Rodino Antitrust Improvements

Act of 1976, as amended, 15 U.S.C. 18a

(the ‘‘HSR Act’’), EZ, without providing

advance notification to the plaintiff,

shall not directly or indirectly acquire

any assets of or any interest, including

any financial, security, loan, equity, or
15934 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

1Prior to, and independent of, the transactions

giving rise to this action, EZ and other radio station

owners had announced plans to swap radio

stations. The swaps would have eliminated existing

competition and resulted in EZ dominating the

country format—and its listeners—and SFX

Broadcasting Inc. dominating the rock format—and

management interest, in any Non-EZ

Radio Station.

B. EZ, without providing advance

notification to the plaintiff, shall not

directly or indirectly enter into any

agreement or understanding that would

allow EZ to market or sell advertising

time or to establish advertising prices

for any Non-EZ Radio Station.

C. Notification described in (A) and

(B) above shall be provided to the

United States Department of Justice in

the same format as, and per the

instructions relating to, the Notification

and Report Form set forth in the

Appendix to Part 803 of Title 16 of the

Code of Federal Regulations as

amended, except that the information

requested in Items 5–9 of the

instructions must be provided only with

respect to EZ Radio Stations in the

Charlotte Area. Notification shall be

provided at least thirty (30) days prior

to acquiring any such interest or

entering any such agreement covered in

(A) or (B) above, and shall include,

beyond what may be required by the

applicable instructions, the names of the

principal representatives of the parties

to the agreement who negotiated the

agreement, and any management or

strategic plans discussing the proposed

transaction. If within the 30-day period

after notification, representatives of the

plaintiff make a written request for

additional information, defendants shall

not consummate the proposed

transaction or agreement until twenty

(20) days after submitting all such

additional information. Early

termination of the waiting periods in

this paragraph may be requested and,

where appropriate, granted in the same

manner as is applicable under the

requirements and provisions of the HSR

Act and rules promulgated thereunder.

D. This Section shall be broadly

construed and any ambiguity or

uncertainty regarding the filing of notice

under this Section shall be resolved in

favor of filing notice.

XI. Compliance Inspection

For the purpose of determining or

securing compliance with the Final

Judgment and subject to any legally

recognized privilege, from time to time:

A. Duly authorized representatives of

the plaintiff, including consultants and

other persons retained by the plaintiff,

shall, upon written request of the

United States Attorney General, or of

the Assistant Attorney General in charge

of the Antitrust Division, and on

reasonable notice to defendants made to

their principal offices, be permitted:

(1) Access during office hours of

defendants to inspect and copy all

books, ledgers, accounts,

correspondence, memoranda and other

records and documents in the

possession or under the control of

defendants, who may have counsel

present, relating to any matters

contained in this Final Judgment; and

(2) Subject to the reasonable

convenience of defendants and without

restraint or interference from

defendants, to interview directors,

officers, employees and agents of

defendants, who may have cousel

present, regarding any such matters.

B. Upon the written request of the

Untied States Attorney General, or of

the Assistant Attorney General in charge

of the Antitrust Division, made to

defendants’ principal offices,

defendants shall submit such written

reports, under oath if requested, with

respect to any of the matters contained

in this Final Judgment as may be

requested.

C. No information or documents

obtained by the means provided in

Section IX or this Section XI shall be

divulged by any representative of the

Untied States to any person other than

a duly authorized representative of the

Executive Branch of the United States,

except in the course of legal proceedings

to which plaintiff is a party (including

grand jury proceedings), or for the

purpose of securing compliance with

this Final Judgment, or as otherwise

required by law.

D. If at the time information or

documents are furnished by a defendant

to plaintiff, and such defendant

represents and identifies in writing the

material in any such information or

documents to which a claim of

protection may be asserted under Rule

26(c)(7) of the Federal Rules of Civil

Procedure, and such defendant marks

each pertinent page of such material,

‘‘Subject to claim of protection under

Rule 26(c)(7) of the Federal Rules of

Civil Procedure,’’ then ten (10) calendar

days’ notice shall be given by plaintiff

to such defendant prior to divulging

such material in any legal proceeding

(other than a grand jury proceeding) to

which such defendant is not a party.

XII. Retention of Jurisdiction

Jurisdiction is retained by this Court

at any time for such further orders and

directions as may be necessary or

appropriate for the construction,

implementation or modification of any

provisions of this Final Judgment, for

the enforcement of compliance

herewith, and for the punishment of any

violation hereof.

XIII. Termination

Unless this Court grants an extension,

this Final Judgment will expire upon

the tenth anniversary of the date of its

entry.

XIV. Public Interest

Entry of this Final Judgment is in the

public interest.

Certificate of Service

I, Dando B. Cellini, hereby certify

that, on February 27, 1997, I caused the

foregoing documents to be served on

defendants EZ Communications, Inc.

and Evergreen Media Corporation by

having a copy mailed, first-class postage

prepaid, to:

Ray V. Hartwell, III,

Andrew J. Strenio, Jr.,

Hunton & Williams,

1900 K Street, NW, Washington, DC 20006–

1109, (202) 955–1639, Counsel for EZ

Communications, Inc.

Bruce J. Prager,

Latham & Watkins,

885 Third Avenue, New York, NY 10022–

4802, (212) 906–1272, Counsel for Evergreen

Media Corporation.

Dando B. Cellini.

Competitive Impact Statement

Plaintiff, the United States of

America, pursuant to Section 2(b) of the

Antitrust Procedures and Penalties Act

(‘‘APPA’’), 15 U.S.C. § 16(b)–(h), files

this Competitive Impact Statement

relating to the proposed Final Judgment

submitted for entry in this civil antitrust

proceeding.

I. Nature and Purpose of the Proceeding

Plaintiff filed a civil antitrust

Complaint on February 27, 1997,

alleging that a proposed swap and

acquisition of radio stations in

Charlotte, North Carolina between EZ

Communications, Inc. (‘‘EZ’’) and

Evergreen Media Corporation

(‘‘Evergreen’’) would violate Section 7 of

the Clayton Act, 15 U.S.C. § 18. The

Complaint alleges that EZ and Evergreen

both own and operate numerous radio

stations throughout the United States,

and that they each own and operate

radio stations in the Charlotte, North

Carolina metropolitan area. The

combined transactions would give EZ a

significant share of the radio advertising

market in the Charlotte metropolitan

area. As a result, the combination of

these stations would lessen competition

substantially in the sale of the radio

advertising time in the Charlotte

metropolitan area.1
Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices 15935

its listeners. These transactions were abandoned

following the Department of Justice’s investigation

into whether the swaps were a device to allocate

Charlotte’s advertisers in such a way as to lessen

competition between the two station groups.

Therefore, it was not necessary to seek relief

regarding these swaps in this Complaint.

2 In a related transaction, American Radio

Systems Corporation (‘‘ARS’’) has agreed to acquire

EZ through merger. Should the proposed merger be

consummated, ARS will succeed to EZ’s obligations

under the proposed Final Judgment.

The prayer for relief seeks: (a) an

adjudication that the proposed

transactions described in the Complaint

would violate Section 7 of the Clayton

Act; (b) preliminary and permanent

injunctive relief preventing the

consummation of such transactions; (c)

an award to the United States of the

costs of this action; and (d) such other

relief as is proper.

Shortly before this suit was filed, a

proposed settlement was reached that

permits EZ to complete its transactions

with Evergreen, yet preserves

competition in the market in which the

transactions would raise significant

competitive concerns. A stipulation and

proposed Final Judgment embodying

the settlement were filed at the same

time the Complaint was filed.2

The proposed Final Judgment orders

EZ to divest WRFX–FM, currently

owned by Evergreen. Unless the

plaintiff grants a time extension, EZ

must divest this radio station either

within six months after the filing of the

Complaint or within five (5) business

days after notice of entry of the Final

Judgment, whichever is later. If EZ does

not divest WRFX–FM within the

divestiture period, the Court shall, upon

plaintiff’s application, appoint a trustee

to sell the assets. The proposed Final

Judgment also requires EZ to ensure

that, until the divestiture mandated by

the Final Judgment has been

accomplished, WRFX–FM will be

operated independently as a viable,

ongoing business, and kept separate and

apart from defendant EZ’s other

Charlotte radio stations. Further, the

proposed Final Judgment requires

defendants to give plaintiff prior notice

regarding future radio station

acquisitions or certain agreements

pertaining to the sale of radio

advertising time in Charlotte.

The plaintiff and the defendants have

stipulated that the proposed final

Judgment may be entered after

compliance with the APPA. Entry of the

proposed Final Judgment would

terminate this action, except that the

Court would retain jurisdiction to

construe, modify, or enforce the

provisions of the proposed Final

Judgment and to punish violations

thereof.

II. The Alleged Violations

A. The Defendants

Defendant EZ is a Virginia

corporation with its headquarters in

Fairfax, Virginia. It currently operates

23 radio stations throughout the United

States, including two radio stations in

Charlotte. In 1996 EZ reported revenues

of approximately $14 million from its

Charlotte stations.

Evergreen is a Delaware corporation

headquartered in Irving, Texas. It owns

and operates 41 radio stations

nationwide, including five stations in

the Charlotte area. In 1996 Evergreen

derived approximately $22 million in

revenues from its Charlotte stations.

B. Description of the Events Giving Rise

to the Alleged Violations

On August 27, 1996, EZ entered into

an agreement to swap two of its radio

stations in Philadelphia for five of

Evergreen’s stations in Charlotte, North

Carolina. In addition, EZ agreed to

purchase another Charlotte radio station

Evergreen for $10 million. The result of

these two transactions, as is more fully

discussed below, would be to give EZ a

significant share of the radio advertising

market in Charlotte, as well as a

significant percentage of advertising

directed to certain target audiences in

Charlotte.

EZ and Evergreen previously have

competed for the business of local and

national companies seeking to advertise

in the Charlotte area. Because the

proposed transactions between EZ and

Evergreen would have eliminated this

competition, they precipitated the

government’s suit.

C. Anticompetitive Consequences of the

Proposed Transaction

1. Sale of Radio Advertising Time in

Charlotte. The Complaint alleges that

the provision of advertising time on

radio stations serving the Charlotte,

North Carolina Metro Service Area

(‘‘MSA’’) constitutes a line of commerce

and section of the country, or relevant

market, for antitrust purposes. The

Charlotte MSA is the geographical unit

for which Arbitron furnishes radio

stations, advertisers and advertising

agencies in Charlotte with data to aid in

evaluating radio audience size and

composition. Advertisers use this data

in making decisions about which radio

station or combination of radio stations

can deliver their target audiences in the

most efficient and cost-effective way.

The Charlotte MSA includes seven

countries: Union, York, Cabarrus,

Rowan, Mecklenburg, Lincoln and

Gaston.

Local and national advertising that is

placed on radio stations within the

Charlotte MSA is aimed at reaching

listening audiences within the Charlotte

MSA, and radio stations outside of the

Charlotte MSA do not provide effective

access to this audience. Thus, if there

were a small but significant

nontransitory increase in radio

advertising prices within the Charlotte

MSA, advertisers would not buy enough

advertising time from radio stations

located outside of the Charlotte MSA to

defeat the increase.

Radio stations earn their revenues

from the sale of advertising time to local

and national advertisers. Many local

and national advertisers purchase radio

advertising time in Charlotte because

they find such advertising preferable to

advertising in other media for their

specific needs. For such advertisers,

radio time (a) may be less expensive and

more cost-efficient than other media at

reaching the advertiser’s target audience

(individuals most likely to purchase the

advertiser’s products or services); (b)

may reach certain target audiences that

cannot be reached as effectively through

other media; or (c) may offer

promotional opportunities to advertisers

that they cannot exploit as effectively

using other media. For these and other

reasons, many local and national

advertisers in Charlotte who purchase

radio advertising time view radio either

as a necessary advertising medium for

them or as a necessary advertising

complement to other media.

Although some local and national

advertisers may switch some of their

advertising to other media rather than

absorb a price increase in radio

advertising time in Charlotte, the

existence of such advertisers would not

prevent radio stations from raising their

prices a small but significant amount. At

a minimum, stations could raise prices

profitably to those advertisers who view

radio either as a necessary advertising

medium for them, or as a necessary

advertising complement to other media.

Radio stations, which negotiate prices

individually with advertisers, can

identify those advertisers with strong

radio preferences. Consequently, radio

stations can charge different advertisers

different rates. Because of this ability to

price discriminate between different

customers, radio stations may charge

higher rates to advertisers that view

radio as particularly effective for their

needs, while maintaining lower rates for

other advertisers.

2. Harm to Competition. The

Complaint alleges that EZ’s proposed

station swaps and acquisition with

Evergreen would lessen competition

substantially in the provision of radio
15936 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

advertising time in the Charlotte MSA.

First, the proposed transactions would

create further market concentration in

an already highly concentrated market,

and EZ would control a substantial

share of the advertising revenues in this

market. EZ’s market share of radio

advertising revenues would increase to

55 percent after the proposed

transactions. According to the

Herfindahl-Hirschman Index (‘‘HHI’’), a

widely-used measure of market

concentration defined and explained in

Appendix A, EZ possesses a

pretransaction HHI of 2198, which

would rise by 1440 points to 3638 after

the transactions. This substantial

increase in concentration is likely to

give EZ the unilateral power to raise

advertising prices and reduce the level

of service provided to advertisers in the

Charlotte radio market.

Furthermore, the proposed

transactions would eliminate head-tohead competition between EZ and

Evergreen for advertisers seeking to

reach specific audiences. Advertisers

select radio stations to reach a large

percentage of their target audience

based upon a number of factors,

including, inter alia, the size of the

station’s audience, the characteristics of

its audience, and the geographic reach

of a station’s signal. Many advertisers

seek to reach a large percentage of their

target audience by selecting those

stations whose audience best correlates

to their target audience. Today, EZ’s two

stations and several of Evergreen’s

stations compete head-to-head to reach

the same audiences and, for many local

and national advertisers buying time in

Charlotte, the stations are close

substitutes for each other based on their

specific audience characteristics. The

proposed transactions would eliminate

such competition, notably including

competition for advertisers seeking to

reach male listeners in Charlotte.

Advertisers seeking to reach male

listeners in Charlotte currently help

ensure competitive rates by ‘‘playing

off’’ Evergreen stations against EZ

stations. Because the direct competition

between the Evergreen and EZ stations

would be eliminated by the proposed

transactions, and because advertisers

seeking to reach male listeners would

have inferior alternatives as a result of

the transactions, the transactions would

give EZ the ability to raise its rates and

reduce the quality of its services to some

of its advertisers on its Charlotte

stations. This is particularly true

because of EZ’s ability to charge

different prices to different advertisers.

Format changes are unlikely to deter

the anticompetitive consequences of

these transactions. If EZ raised prices or

lowered services to those advertisers

who buy EZ and Evergreen stations

because of their strength in delivering

access to certain specific audiences,

non-EZ radio stations in Charlotte

would not be induced to change their

formats to attract a greater share of the

same listeners and to serve better those

advertisers seeking to reach such

listeners. Successful radio stations are

unlikely to undertake a format change

solely in response to small but

significant increases in price being

charged to advertisers by a multi-station

firm such as EZ, because they would

likely lose a substantial portion of their

existing audiences. Even if less

successful stations did change format,

they still would be unlikely to attract

enough listeners to provide a suitable

alternative to EZ.

Finally, new entry into the Charlotte

radio advertising market is highly

unlikely in response to a price increase

by EZ. No unallocated radio broadcast

frequencies exist in Charlotte. Also,

stations located in adjacent

communities cannot boost their power

so as to enter the Charlotte market

without interfering with other stations

on the same or similar frequencies, a

violation of Federal Communications

Commission (‘‘FCC’’) regulations.

For all of these reasons, plaintiff

concludes that the proposed

transactions would lessen competition

substantially in the sale of radio

advertising time in the Charlotte MSA,

eliminate actual competition between

EZ and Evergreen, and result in

increased prices and reduced quality of

service for radio advertising time in the

Charlotte MSA, all in violation of

Section 7 of the Clayton Act.

III. Explanation of the Proposed Final

Judgment

The proposed Final Judgment would

preserve competition in the sale of radio

advertising time in the Charlotte MSA.

It requires the divestiture of WRFX–FM,

Charlotte’s most popular station among

male listeners. This relief will reduce

the market share in advertising revenues

EZ would have achieved through the

proposed transactions from over 55

percent to about 40 percent of the

Charlotte radio market. The divestiture

will preserve choices for advertisers and

help ensure that radio advertising rates

in Charlotte do not increase and that

services do not decline as a result of the

combined transactions.

Unless plaintiff grants an extension of

time, EZ must divest WRFX–FM either

within six months after the Complaint

has been filed or within five (5) business

days after notice of entry of the Final

Judgment, whichever is later. Until the

divestiture takes place, WRFX–FM will

be maintained as a viable and

independent competitor to EZ’s other

stations in the Charlottee MSA.

If EZ fails to divest WRFX–FM within

the time periods specified in the Final

Judgment, the Court, upon plaintiff’s

application, shall appoint a trustee

nominated by plaintiff to effect the

divestiture. If a trustee is appointed, the

proposed Final Judgment provides that

EZ will pay all costs and expenses of the

trustee and any professionals and agents

retained by the trustee. The

compensation paid to the trustee and

any persons retained by the trustee shall

be both reasonable in light of the value

of WRFX–FM, and based on a fee

arrangement providing the trustee with

an incentive based on the price and

terms of the divestiture and the speed

with which it is accomplished. After

appointment the trustee will file

monthly reports with the plaintiff,

defendant EZ and the Court, setting

forth the trustee’s efforts to accomplish

the divestiture ordered under the

proposed Final Judgment. If the trustee

has not accomplished the divestiture

within six (6) months after its

appointment, the trustee shall promptly

file with the Court a report setting forth

(1) the trustee’s efforts to accomplish the

required divestiture, (2) the reasons, in

the trustee’s judgment, why the required

divestiture has not been accomplished,

and (3) the trustee’s recommendations.

At the same time the trustee will furnish

such report to the plaintiff and

defendant EZ, who will each have the

right to be heard and to make additional

recommendations.

The proposed Final Judgment requires

that defendants maintain WRFX–FM

separate and apart from defendant EZ’s

other Charlotte stations, pending

divestiture. The Judgment also contains

provisions to ensure the WRFX–FM will

be preserved, so that this station

remains a viable, aggressive competitor

after divestiture.

The proposed Final Judgment also

prohibits EZ from entering into certain

agreements with other Charlotte radio

stations without providing at least thirty

(30) days’ notice to the Department of

Justice. Specifically, EZ must notify the

Department before acquiring any

interest in another Charlotte radio

station. Such acquisitions could raise

competitive concerns but might be too

small to be reported otherwise under the

Hart-Scott-Rodino (‘‘HSR’’) premerger

notification statute. Moreover, EZ may

not agree to sell radio advertising time

for any other Charlotte radio station

without providing plaintiff with notice.

In particular, the provision requires EZ

to notify the Department before it enters
Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices 15937

3 119 Cong. Rec. 24598 (1973). See United States

v. Gillette Co., 406 F. Supp. 713, 715 (D. Mass.

1975). A ‘‘public interest’’ determination can be

made properly on the basis of the Competitive

Impact Statement and Response to Comments filed

pursuant to the APPA. Although the APPA

authorizes the use of additional procedures, 15

U.S.C. 16(f), those procedures are discretionary. A

court need not invoke any of them unless it believes

that the comments have raised significant issues

and that further proceedings would aid the court in

resolving those issues. See H.R. Rep. 93–1463, 93rd

Cong. 2d Sess. 8–9 (1974), reprinted in U.S.C.C.A.N.

6535, 6538.

into any Joint Sales Agreements

(‘‘JSAs’’), where one station takes over

another station’s advertising time, or

any Local Marketing Agreements

(‘‘LMAs’’), where one station takes over

another station’s broadcasting and

advertising time, or other comparable

arrangements in the Charlotte area.

Agreements whereby EZ sells

advertising for or manages other

Charlotte area radio stations would

effectively increase its market share in

this MSA. Despite their clear

competitive significance, JASs probably

would not be reportable to the

Department under the HSR Act. Thus,

this provision in the proposed Final

Judgment ensures that the Department

will receive notice of and be able to act,

if appropriate, to stop any agreements

that might have anticompetitive effects

in the Charlotte market.

The relief in the proposed Final

Judgment is intended to remedy the

likely anticompetitive effects of EZ’s

proposed transactions with Evergreen in

Charlotte. Nothing in this Final

Judgment is intended to limit the

plaintiff’s ability to investigate or to

bring actions, where appropriate,

challenging other past or future

activities of defendants in the Charlotte

MSA.

IV. Remedies Available to Potential

Private Litigants

Section 4 of the Clayton Act, 15

U.S.C. § 15, provides that any person

who has been injured as a result of

conduct prohibited by the antitrust laws

may bring suit in federal court to

recover three times the damages the

person has suffered, as well as costs and

reasonable attorneys’ fees. Entry of the

proposed Final Judgment will neither

impair nor assist the bringing of any

private antitrust damage action. Under

the provisions of Section 5(a) of the

Clayton Act, 15 U.S.C. § 16(a), the

proposed Final Judgment has no prima

facie effect in any subsequent private

lawsuit that may be brought against

defendants.

V. Procedures Available for

Modification of the Proposed Final

Judgment

The plaintiff and the defendants have

stipulated that the proposed Final

Judgment may be entered by the Court

after compliance with the provisions of

the APA, provided that the plaintiff has

not withdrawn its consent. The APPA

conditions entry upon the Court’s

determination that the proposed Final

Judgment is in the public interest.

The APPA provides a period of at

least sixty (60) days preceding the

effective date of the proposed Final

Judgment within which any person may

submit to the plaintiff written comments

regarding the proposed Final Judgment.

Any person who wishes to comment

should do so within sixty (60) days of

the date of publication of this

Competitive Impact Statement in the

Federal Register. The plaintiff will

evaluate and respond to the comments.

All comments will be given due

consideration by the Department of

Justice, which remains free to withdraw

its consent to the proposed Final

Judgment at any time prior to entry. The

comments and the response of the

plaintiff will be filed with the Court and

published in the Federal Register.

Written comments should be

submitted to: Craig W. Conrath, Chief,

Merger Task Force, Antitrust Division,

United States Department of Justice,

1401 H Street, NW; Suite 4000,

Washington, DC 20530.

The proposed Final Judgment

provides that the Court retains

jurisdiction over this action, and that

the parties may apply to the Court for

any order necessary or appropriate for

the modification, interpretation or

enforcement of the Final Judgment.

VI. Alternatives to the Proposed Final

Judgment

Plaintiff considered, as an alternative

to the proposed Final Judgment, a full

trial on the merits of its Complaint

against defendants. Plaintiff is satisfied,

however, that the divestiture of WRFX–

FM and other relief contained in the

proposed Final Judgment will preserve

viable competition in the sale of radio

advertising time in the Charlotte MSA.

Thus, the proposed Final Judgment

would achieve the relief the government

would have obtained through litigation,

but avoids the time, expense and

uncertainty of a full trial on the merits

of the Complaint.

VII. Standard of Review Under the

APPA for Proposed Final Judgment

The APPA requires that proposed

consent judgments in antitrust cases

brought by the United States be subject

to a sixty (60) day comment period, after

which the Court shall determine

whether entry of the proposed Final

Judgment ‘‘is in the public interest.’’ In

making that determination, the Court

may consider—

(1) The competitive impact of such

judgment, including termination of alleged

violations, provisions for enforcement and

modification, duration or relief sought,

anticipated effects of alternative remedies

actually considered and any other

considerations bearing upon the adequacy of

such judgment;

(2) The impact of entry of such judgment

upon the public generally and individuals

alleging specific injury from the violations

set forth in the complaint including

consideration of the public benefit, if any, to

be derived from a determination of the issues

at trial. 15 U.S.A. § 16(e).

As the United States Court of Appeals

for the D.C. Circuit recently held, this

statute permits a court to consider,

among other things, the relationship

between the remedy secured and the

specific allegations set forth in the

government’s complaint, whether the

decree is sufficiently clear, whether

enforcement mechanisms are sufficient

and whether the decree may positively

harm third parties. See United States v.

Microsoft, 56 F.3d 1448, 1461–62 (D.C.

Cir. 1995).

In conducting this inquiry, ‘‘[t]he

Court is nowhere compelled to go to

trial or to engage in extended

proceedings which might have the effect

of vitiating the benefits of prompt and

less costly settlement through the

consent decree process.’’ 3 Rather,

[a]bsent a showing of corrupt failure of the

government to discharge its duty, the Court,

in making its public interest findings, should

* * * carefully consider the explanations of

the government in the competitive impact

statement and its responses to comments in

order to determine whether those

explanations are reasonable under the

circumstances.

United States v. Mid-America

Dairymen, Inc., 1977–1 Trade Cas.

¶61,508, at 71,980 (W.D. Mo. 1977).

Accordingly, with respect to the

adequacy of the relief secured by the

decree, a court may not ‘‘engage in an

unrestricted evaluation of what relief

would best serve the public.’’ United

States v. BNS, Inc., 858 F.2d 456, 462

(9th Cir. 1988), citing United States v.

Bechtel Corp., 648 F.2d 660, 666 (9th

Cir.), Cert. denied, 454 U.S. 1083 (1981);

see also Microsoft, 56 F.3d at 1460–62.

Precedent requires that—

the balancing of competing social and

political interests affected by a proposed

antitrust consent decree must be left, in the

first instance, to the discretion of the

Attorney General. The court’s role in

protecting the public interest is one of

insuring that the government has not

breached its duty to the public in consenting

to the decree. The court is required to
15938 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

4Bechtel, 648 F.2d at 666 (citations omitted)

(emphasis added); see BNS, 858 F.2d at 463; United

States v. National Broadcasting Co., 449 F. Supp.

1127, 1143 (C.D. Cal. 1978); Gillette, 406 F. Supp.

at 716. See also Microsoft, 56 F.3d at 1461 (whether

‘‘the remedies [obtained in the decree are] so

inconsonant with the allegations charged as to fall

outside of the ‘reaches of the public interest’ ’’)

(citations omitted).

5United States v. American Tel. and Tel Co., 552

F. Supp. 131, 151 (D.D.C. 1982), aff’d sub nom.

Maryland v. United States, 460 U.S. 1001 (1983),

quoting Gillette Co., 406 F. Supp. at 716 (citations

omitted); United States v. Alcan Aluminum, Ltd.,

605 F. Supp. 619, 622 (W.D. Ky. 1985).

determine not whether a particular decree is

the one that will best serve society, but

whether the settlement is ‘‘within the reaches

of the public interest.’’ More elaborate

requirements might undermine the

effectiveness of antitrust enforcement by

consent decree.4

The proposed Final Judgment,

therefore, should not be reviewed under

a standard of whether it is certain to

eliminate every anticompetitive effect of

a particular practice or whether it

mandates certainty of free competition

in the future. Court approval of a final

judgment requires a standard more

flexible and less strict than the standard

required for a finding of liability. ‘‘[A]

proposed decree must be approved even

if it falls short of the remedy the court

would impose on its own, as long as it

falls within the range of acceptability or

is ‘within the reaches of public

interest.’ ’’ 5

This is strong and effective relief that

should fully address the competitive

harm posed by the proposed

transactions.

VIII. Determinative Documents

There are no determinative materials

or documents within the meaning of the

APPA that were considered by the

plaintiff in formulating the proposed

Final Judgment.

Respectfully submitted,

Dando B. Cellini,

Merger Task Force, U.S. Department of

Justice, Antitrust Division, 1401 H Street,

N.W.; Suite 4000, Washington, D.C. 20530,

(202) 307–0829.

Dated: March 20, 1997.

Exhibit A—Definition of HHI and

Calculations for Market

‘‘HHI’’ means the HerfindahlHirschman Index, a commonly accepted

measure of market concentration. It is

calculated by squaring the market share

of each firm competing in the market

and then summing the resulting

numbers. For example, for a market

consisting of four firms with shares of

thirty, thirty, twenty and twenty

percent, the HHI is 2600 (302 + 302 + 202

+ 202 = 2600). The HHI takes into

account the relative size and

distribution of the firms in a market and

approaches zero when a market consists

of a large number of firms of relatively

equal size. The HHI increases both as

the number of firms in the market

increases and as the disparity in size

between those firms increases.

Markets in which the HHI is between

1000 and 1800 points are considered to

be moderately concentrated, and those

in which the HHI is in excess of 1800

points are considered to be

concentrated. Transactions that increase

the HHI by more than 100 points in

concentrated markets presumptively

raise antitrust concerns under the

Merger Guidelines. See Merger

Guidelines § 1.51.

Certificate of Service

I, Dando B. Cellini, hereby certify

that, on March 20, 1997, I caused the

foregoing document to be served on

defendants EZ Communications, Inc.

and Evergreen Media Corporation by

having a copy mailed, first-class,

postage prepaid, to:

Ray V. Hartwell, III,

Andrew J. Strenio, Jr.,

Hunton & Williams,

1900 K Street, NW, Washington, DC 20006–

1109, (202) 955–1639, Counsel for EZ

Communications, Inc.

Bruce J. Prager,

Latham & Watkins,

885 Third Avenue, New York, NY 10022–

4802, (212) 906–1272, Counsel for Evergreen

Media Corporation.

Dando B. Celini.

[FR Doc. 97–8460 Filed 4–2–97; 8:45 am]

BILLING CODE 4410–11–M

United States v. Western Pine

Association, et al.

Notice is hereby given that defendant

Western Wood Products Association

(‘‘WWPA’’) has filed with the United

States District Court for the Central

District of California a motion to

terminate the Consent Decree in United

States v. Western Pine Ass’n, et al., Civil

Action No. 41–1389 RJ, and that the

Department of Justice (‘‘Department’’),

in a stipulation and order also filed with

the Court, has tentatively consented to

termination of the Consent Decree but

has reserved the right to withdraw its

consent pending receipt of public

comments. The complaint in this case

(filed February 6, 1941) alleged that the

Western Pine Association (‘‘WPA’’) and

its lumber company members had

curtailed output, fixed prices, and

enforced arbitrary and unreasonable

rules and policies for standardization

and distribution of western pine lumber.

On February 6, 1941, a Consent

Decree was entered against the WPA

and its members which (1) required

WPA to make its grading services

available to both members and

nonmembers alike without

discrimination and at the actual cost of

the services rendered and (2) contained

various injunctive provisions relating to

the conduct of the WPA and its

members. Specifically, the Consent

Decree enjoined the defendants from (1)

assigning to manufacturers a maximum

production figures; (2) allocating

business; (3) fixing prices, discounts or

commissions; (4) disseminating

information concerning production,

sales, or prices; (5) refusing to quote

f.o.b.; and (6) restricting the sale of

lumber to any particular class of

customers.

The Department has lodged with the

court a memorandum setting forth the

reasons why the Government believes

that termination of the Consent Decree

would serve the public interest. Copies

of WWPA’s motion papers, the

stipulation containing the Government’s

consent, the Government’s

memorandum and all further papers

filed or lodged with the court in

connection with this motion will be

available for inspection at the Legal

Procedure Unit of the Antitrust

Division, Room 215 North, Liberty

Place, Washington, D.C. 20530, and at

the Office of the Clerk of the United

States District Court for the Central

District of California 90012. Copies of

any of these materials may be obtained

from the Antitrust Division upon

request and payment of the copying fee

set by Department of Justice regulations.

Interested persons may submit

comments regarding the proposed

termination of the decree to the

Government. Such comments must be

received by the Division with sixty (60)

days and will be filled with the court by

the Government. Comments should be

addressed to Christopher S. Crook,

Acting Chief, San Francisco Office,

Antitrust Division, Department of

Justice, 450 Golden Gate Avenue, Box

36046, San Francisco, California 91402

(Telephone: (415) 436–6660).

Rebecca P. Dick,

Deputy Director of Operations.

[FR Doc. 97–8533 Filed 4–2–97; 8:45 am]

BILLING CODE 4410–11–M

Notice Pursuant to the National

Cooperative Research and Production

Act of 1993; The Asymetrical Digital

Subscriber Line Forum

Notice is hereby given that, on

November 5, 1996, pursuant to Section