15920 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

identified above and enclose a check,

payable to the Consent Decree Library,

in the amount of $3.25 for the consent

decree summary (reproduction costs at

twenty-five cents ($.25) per page).

The consent decree, which was

lodged on January 10, 1997, with the

United States District Court for the

District of Puerto Rico, resolves the

United States’ claims against the Puerto

Rico Electric Authority (‘‘PREPA’’) that

are identified in a complaint filed on

October 27, 1993. In that complaint, the

United States cited PREPA for violations

of multiple federal and Commonwealth

environmental statutes and regulations,

including: (1) the air quality and

emission limitations requirements of the

Clean Air Act, 42 U.S.C. §§ 7401–7431;

(2) the effluent limitations and National

Pollutant Discharge Elimination System

requirements of Sections 301 and 402 of

the Federal Water Pollution Control Act

(the ‘‘Clean Water Act’’), 33 U.S.C.

§§ 1311, 1342; (3) the oil pollution

prevention requirements promulgated at

40 C.F.R. Part 110 pursuant to Section

311 of the Clean Water Act; (4) the

inventory reporting requirements for

hazardous chemicals pursuant to

Section 312 of the Emergency Planning

and Community-Right-to-Know Act

(‘‘EPCRA’’), 42 U.S.C. § 11022; (5) the

hazardous substance release reporting

requirements promulgated at 40 C.F.R.

Part 302 pursuant to Section 103 of the

Comprehensive Environmental

Response, Compensation, and Liability

Act (‘‘CERCLA’’), 42 U.S.C. § 9603; (6)

the hazardous substance release

reporting requirements of Section 304 of

EPCRA; and (7) the underground storage

tank requirements promulgated at 40

C.F.R. Part 280 pursuant to Section 9003

of the Resource Conservation and

Recovery Act, 42 U.S.C. § 6991b. The

United States sought civil penalties and

injunctive relief for the violations

alleged in the complaint.

In the proposed consent decree,

PREPA agrees to pay a civil penalty of

$1.5 million; to implement

environmental projects costing $3.5

million; to spend $1 million to hire an

Environmental Review Contractor to

oversee and monitor PREPA’s

implementation and compliance with

the proposed consent decree; and to

undertake extensive injunctive relief

designed to assure PREPA’s compliance

with environmental laws and

regulations.

Bruce S. Gelber,

Deputy Section Chief, Environmental

Enforcement Section, Environment and

Natural Resources Division.

[FR Doc. 97–8532 Filed 4–2–97; 8:45 am]

BILLING CODE 4410–15–M

Notice of Lodging of Consent Decree

Pursuant To The Clean Water Act

In accordance with Departmental

Policy, 28 C.F.R. § 50.7, notice is hereby

given that a proposed consent decree in

United States versus Ronald J. Silveira,

Inc. & Silveira Cranberry Corp., Civil

No. 97–10626–RCL (D. Mass.), was

lodged with the United States District

Court for the District of Massachusetts

on March 20, 1997. The proposed

decree concerns alleged violations of

sections 301(a) and 404 of the Clean

Water Act, 33 U.S.C. §§ 1311(a) and

1344, resulting from unlawful

excavation activities and the discharge

of fill materials into approximately

90,000 square feet of wetlands located

in Berkley, Massachusetts. The wetlands

are located adjacent to an unnamed

brook, which is a tributary of the

Taunton River, located between Jerome

Street and Burt Street in Berkley.

The proposed consent decree would

provide for restoration and mitigation of

approximately 91,800 square feet of

wetlands at and near the violation site

in accordance with restoration/

mitigation plans approved by the United

States Army Corps of Engineers and

payment of a $25,000 civil penalty.

The U.S. Department of Justice will

receive written comments relating to the

proposed consent decree for a period of

thirty (30) days from the date of

publication of this notice. Comments

should be addressed to Julie S. Schrager,

Assistant United States Attorney,

District of Massachusetts, 1003 J.W.

McCormack Post Office and Courthouse,

Boston, MA 02109, and should refer to

United States versus Ronald J. Silveira,

Inc. & Silveira Cranberry Corp., Civil

No. 97–10626–RCL (D. Mass.).

The proposed consent decree may be

examined at the Clerk’s Office, United

States District Court for the District of

Massachusetts, 1003 J.W. McCormack

Post Office and Courthouse, Boston,

Massachusetts 02109.

Letitia J. Grishaw,

Chief, Environmental Defense Section,

Environment and Natural Resources Division,

United States Department of Justice.

[FR Doc. 97–8531 Filed 4–2–97; 8:45 am]

BILLING CODE 4410–15–M

Antitrust Division

Proposed Final Judgment and

Competitive Impact Statement; United

States of America versus American

Radio Systems Corporation and EZ

Communications, Inc.

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

Competitive Impact Statement have

been filed with the United States

District Court for the District of

Columbia in United States v. American

Radio Systems and EZ

Communications, Inc. Civ. Action No.

97 CV 405. 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

Compliant on February 27, 1997,

alleging that the proposed acquisition of

EZ Communications (‘‘EZ’’) by

American Radio Systems Corporation

(‘‘ARS’’) would violate Section 7 of the

Clayton Act, 15 U.S.C. § 18. The

Complaint alleges that ARS and EZ own

and operate numerous radio stations

throughout the United States, and that

after the transaction ARS would own

eight radio stations in the Sacramento,

California area, including six of the 12

stations authorized and operating as

Class B broadcast facilities in that area.

This acquisition would give ARS half of

the most competitively significant radio

signals, and a significant share of the

radio advertising market, including a

large percentage of advertising directed

to certain target audiences in

Sacramento. As a result, the

combination of these companies would

substantially lessen competition in the

sale of radio advertising time in

Sacramento, California and the

surrounding area.

The prayer for relief seeks: (a)

Adjudication that ARS’s proposed

acquisition of EZ would violate Section

7 of the Clayton Act,; (b) preliminary

and permanent injunctive relief

preventing the consummation of the

proposed acquisition; (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 ARS to complete its acquisition

of EZ, yet preserves competition in the

market for which the transaction 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

defendants to divest KSSJ–FM. Unless

the United States grants a time

extension, defendants 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,
Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices 15921

whichever is later. If defendants do not

divest KSSJ–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 defendants to ensure that,

until the divestiture mandated by the

Final Judgment has been accomplished,

KSSJ–FM will be operated

independently as a viable, ongoing

business, and kept separate and apart

from ARS’s and EZ’s other Sacramento

radio stations. Additionally, the

proposed Final Judgment provides that

if KSSJ–FM’s Class B license has not

been issued by the FCC on or before

December 31, 1997, the United States

has the right to designate one additional

ARS or EZ Class B radio station for

divestiture. 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 Sacramento.

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,

NW., Suite 4000, Washington, DC 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, NW., Washington, DC 20530

(telephone: (202) 514–2481) and at the

office of the Clerk of the United States

District Court for the District of

Columbia, 3rd Street and Constitution

Avenue, NW., Washington, DC.

Copies of any of these materials may

be obtained upon request and payment

of a copying fee.

Constance K. Robinson,

Director of Operations Antitrust Division.

United States District Court for The District

of Columbia

United States of America, Plaintiff, v.

American Radio Systems Corporation and EZ

Communications, Inc., Defendants. Civil

Action No. 1:97CV00405, 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) The parties recognize that there

could be a delay in obtaining approval

by or a ruling of a government agency

related to 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

apply 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 KSSJ–

FM Assets, or, if necessary, the Optional

ARS Station Assets, and such agreement

and the Acquirer have been approved by

plaintiff; (b) all papers necessary to

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

field 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.

(6) 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.

(7) In the event (a) plaintiff withdraws

its consent, as provide 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 alter 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. Cellim,

U.S. Department of Justice, Antitrust Division,

Merger Task Force, 1401 H. Street, N.W., Suite

4000, Washington, D.C. 20005, (202) 307–

0829.

For Defendant American Radio Systems

Corporation‘

James R. Loftis, III,

Joseph J. Simons,

Collier Shannon Rill & Scott, PLLC,

3050 K Street, N.W., Suite 400, Washington,

DC 20007, (202) 342–8480.

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.

Final Judgment

Whereas, plaintiff, the United States

of America, having filed its Complaint

herein on February 27, 1997, and

defendants American Radio Systems

Corporation (‘‘ARS’’) and EZ

Communications, Inc. (‘‘EZ’’), 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.
15922 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

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

divestitures ordered herein 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 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 ARS and EZ,

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. ARS means defendant American

Radio Systems Corporation, a Delaware

corporation with its headquarters in

Boston, Massachusetts, and includes its

successors and assigns, its subsidiaries,

and directors, officers, managers, agents

and employees acting for or on behalf of

ARS.

B. EZ means defendant EZ

Communications, Inc., a Virginia

corporation with its headquarters in

Fairfax, Virginia, and includes its

successors and assigns, its subsidiaries,

and directors, officers, managers, agents

and employees acting for or on behalf of

EZ.

C. KSSJ–FM Assets means all of the

assets, tangible or intangible, used in the

operation of KSSJ 101.9 FM radio

station in the Sacramento Area,

including but not limited to: all real

property (owned or 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 government agencies relating

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 logs and other records

maintained by defendants or that station

in connection with its business.

D. Sacramento Area means the

Sacramento, California Metro Survey

Area as identified by The Arbitron

Radio Market Report for Sacramento

(Fall 1996), which is made up of the

following counties: El Dorado, Placer,

Sacramento and Yolo.

E. Acquirer means the entity to whom

defendants divest the KSSJ–FM Assets

or the Optional ARS Station Assets

under this Final Judgment.

F. ARS Radio Station means any radio

station owned by ARS or EZ and

licensed to a community in the

Sacramento Area, other than KSSJ–FM.

G. Non-ARS Radio Station means any

radio station licensed to a community in

the Sacramento Area that is not an ARS

Radio Station.

H. Optional ARS Station Assets

means the full class B FM radio station

assets designated by plaintiff pursuant

to Section IV (B) of this Final Judgment,

and include all the assets, tangible or

intangible, used in the operation of any

one radio station with a full class B

license broadcast facility owned by ARS

or EZ, so chosen by the plaintiff, and

licensed to a community in the

Sacramento Area, other than KSSJ–FM,

including but not limited to all real

property (owned or 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

relating 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 logs and other records

maintained by defendants or that station

in connection with its business.

III. Applicability

A. The provisions of this Final

Judgment apply to the defendants, their

successors and assigns, 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 the Final Judgment by personal

service or otherwise.

B. Each defendant shall require, as a

condition of the sale or other

disposition of all or substantially all of

the assets used in its business of owning

and operating its portfolio of radio

stations in the Sacramento Area, that the

acquiring party or parties agree to be

bound by the provisions of this Final

Judgment, provided, however,

defendants need not obtain such an

agreement from an Acquirer in

connection with the divestiture of the

KSSJ–FM Assets or the Optional ARS

Station Assets.

IV. Divestiture

A. Defendants are hereby ordered and

directed, in accordance with the terms

of this Final Judgment, within six (6)

months after the filing of the complaint

in this action, or within five (5) business

days after notice of entry of this Final

Judgment, whichever is later, to divest

the KSSJ–FM Assets to an Acquirer

acceptable to plaintiff, in its sole

discretion.

B. In the event that KSSJ–FM’s class

B FM license has not been issued by the

FCC on or before December 31, 1997,

plaintiff shall thereafter have the right,

exercisable at any time during the term

of this Final Judgment, to designate the

Optional ARS Station Assets. Plaintiff’s

designation shall be communicated to

defendants in writing, which

notification shall identify one class B

FM station and accompanying assets

that shall constitute the Optional ARS

Station Assets In the event plaintiff

designates the Optional ARS Station

Assets pursuant to this Section IV(B),

defendants shall, in accordance with the

terms of this Final Judgment, within six

(6) months of written notification to

defendants of plaintiff’s designation of

the Optional ARS Station Assets, in

addition to the KSSJ–FM Assets, divest

the Optional ARS Station Assets to an

Acquirer acceptable to plaintiff, in its

sole discretion.

C. 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 KSSJ–

FM Assets and the Optional ARS

Station Assets, and shall be

accomplished in such a way as to satisfy

plaintiff, in its sole discretion, that the

KSSJ–FM Assets and Optional ARS

Station Assets can and will be used by
Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices 15923

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 Sacramento 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.

D. Defendants agree to use their best

efforts to divest the KSSJ–FM Assets

and the Optional ARS Station 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 set forth in

Section IV (A) or Section IV (b), as the

case may be, for two (2) additional thirty

(30)-day periods of time, not to exceed

sixty (60) calendar days in total in each

case.

E. In accomplishing the divestiture

ordered by this Final Judgment,

defendants promptly shall make known,

by usual and customary means, the

availability of the KSSJ–FM Assets and

the Optional ARS Station Assets.

Defendants 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. Defendants shall

make known to any person making an

inquiry regarding a possible purchase of

the KSSJ–FM Assets and the Optional

ARS Station Assets, that the assets

described in Section II (C) and Section

II (H) are being offered for sale.

Defendants shall also offer to furnish to

all bona fide prospective purchasers,

subject to customary confidentiality

assurances, all information regarding

the KSSJ–FM Assets and the Optional

ARS Station Assets customarily

provided in a due diligence process,

except such information that is subject

to attorney-client privilege or attorney

work-product privilege. Defendants

shall make available such information to

plaintiff at the same time that such

information is made available to any

other person.

F. Defendants shall permit bona fide

prospective purchasers of the KSSJ–FM

Assets or the Optional ARS Station

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.

G. Defendants shall not interfere with

any efforts by any Acquirer to employ

the general manager or any other

employee of KSSJ–FM or the Optional

ARS Station Assets.

V. Appointment of Trustee

A. In the event that defendants have

not divested the KSSJ–FM Assets or the

Optional ARS Station Assets within the

time periods specified in Section IV of

this Final Judgment, 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 KSSJ–FM

Assets or the Optional ARS Station

Assets. The trustee shall have the power

and authority to accomplish the

divestiture at the best price then

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 defendants 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 a purchaser acceptable

to plaintiff in its sole judgment, and

shall have such other powers at this

Court shall deem appropriate.

Defendants shall not object to the sale

of the KSSJ–FM Assets or the Optional

ARS Station Assets by the trustee on

any grounds other than the trustee’s

malfeasance. Any such objection by

defendants 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 defendants, 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

defendants, 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

KSSJ–FM Assets or the Optional ARS

Station 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 KSSJ–FM Assets and the Optional

ARS Station Assets, and defendants

shall develop such financial or other

information as may be necessary for the

divestiture of the KSSJ–FM Assets and

the Optional ARS Station Assets.

Defendants shall permit prospective

purchasers of the KSSJ–FM Assets and

Optional ARS Station 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 defendants, plaintiff and

the Court, setting forth the trustee’s

efforts to accomplish divestiture of the

KSSJ–FM Assets and the Optional ARS

Station 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 KSSJ–FM

Assets or the Optional ARS Station

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.

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)
15924 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

the reasons, in the trustee’s judgment,

why the required divestiture has not

been accomplished, and (3) the trustee’s

recommendations; provided, 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 defendants, 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 KSSJ–FM

Assets required by Section IV of the

Final Judgment has been accomplished.

A. Defendants shall take all steps

necessary to operate KSSJ–FM as a

separate, independent, ongoing,

economically viable and active

competitor to defendants’ other stations

in the Sacramento 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,

defendants.

B. Defendants shall use all reasonable

efforts to maintain and increase sales of

advertising time by KSSJ–FM and the

Optional ARS Station Assets, 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 KSSJ–FM and the

Optional ARS Station Assets are fully

maintained. KSSJ–FM’s and the

Optional ARS Station Assets’ 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) days’ notice of

such transfer.

D. Defendants shall not, except as part

of a divestiture approved by plaintiff,

sell any KSSJ–FM Assets or the

Optional ARS Station Assets.

E. Defendants shall take no action that

would jeopardize the sale of the KSSJ–

FM Assets or the Optional ARS Station

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 Sections IV or V

of this Final Judgment, defendants 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 defendants. 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 the KSSJ–FM Assets of the

Optional ARS Station 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) calender 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 the plaintiff provides written notice to

defendant 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

defendants 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 KSSJ–FM

Assets or the Optional ARS Station

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 KSSJ–FM Assets or the

Optional ARS Station 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 KSSJ–FM or the Optional ARS

Station Assets pursuant to Section VI 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

and divest the KSSJ–FM Assets and the

Optional ARS Station 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’’), defendants, without

providing advance notification to the

plaintiff, shall not directly or indirectly

acquire any assets of or any interest,
Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices 15925

1The Telecommunications Act of 1996 provides

that a party may own up to a maximum of eight

commercial radio stations in a radio market, not

more than five of which are in the same service

(AM or FM). However, a radio market for Federal

Communications Commission (‘‘FCC’’) purposes is

delineated by examining overlapping principal

community contours. Because ARS defined two

separate radio markets in the Sacramento area for

FCC purposes, based upon principal community

Continued

including any financial, security, loan,

equity or management interest, in any

Non-ARS Radio Station.

B. Defendants, without providing

advance notification to the plaintiff,

shall not directly or indirectly enter into

any agreement or understanding that

would allow defendants to market or

sell advertising time or to establish

advertising prices for any Non-ARS

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 ARS Radio Stations in the

Sacramento Area. Notification shall be

provided at least thirty (30) days prior

to acquiring any such interest 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 counsel

present, regarding any such matters.

B. Upon the written request of the

United 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

United 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 American Radio Systems

Corporation and EZ Communications,

Inc., by having a copy mailed, firstclass, postage prepaid, to:

James R. Loftis, III,

Joseph J. Simons,

Collier Shannon Rill & Scott, PLLC,

3050 K Street, N.W., Suit 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.

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 the proposed acquisition of

EZ of Communications (‘‘EZ’’) by

American Radio Systems Corporation

(‘‘ARS’’) would violate Section 7 of the

Clayton Act, 15 U.S.C. § 18. The

Complaint alleges that ARS and EZ own

and operate numerous radio stations

throughout the United States, and that

after the transaction ARS would own

eight radio stations in the Sacramento,

California area, including six of the 12

stations authorized and operating as

Class B broadcast facilities in that area.1
15926 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

contours, it took the position in its FCC filings and

with the Department of Justice that the 1996

Telecommunications in its FCC filings and with the

Department of Justice that the 1996

Telecommunications Act did not require divestiture

of any of the six class B FM signals that it would

own after the merger.

This acquisition would give ARS half of

the most competitively significant radio

signals, and a significant share of the

radio advertising market, including a

large percentage of advertising directed

to certain target audiences in

Sacramento. As a result, the

combination of these companies would

substantially lessen competition in the

sale of radio advertising time in

Sacramento, California and the

surrounding area.

The prayer for relief seeks: (a)

adjudication that ARS’s proposed

acquisition of EZ would violate Section

7 of the Clayton Act; (b) preliminary and

permanent injunctive relief preventing

the consummation of the proposed

acquisition; (c) an award to the United

States of the costs of this action; and (b)

such other relief as is proper.

Shortly before this suit was filed, a

proposed settlement was reached that

permits ARS to complete its acquisition

of EZ, yet preserves competition in the

market for which the transaction 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

defendants to divest KSSJ–FM. Unless

the United States grants as a time

extension, defendants must divest this

radio station either within six months

after the filing of the Complaint, or with

five (5) business days after notice of

entry of the Final Judgment, whichever

is later. If defendants do not divest

KSSJ–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 defendants to ensure that,

until the divestiture mandated by the

Final Judgment has been accomplished,

KSSJ–FM will be operated

independently as a viable, ongoing

business, and kept separate and apart

from ARS’s and EZ’s other Sacramento

radio stations. Additionally, the

proposed Final Judgment provides that

if KSSJ–FM’s Class B license has not

been issued by the FCC on or before

December 31, 1997, the United States

has the right to designate one additional

ARS or EZ Class B radio station for

divestiture. 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 Sacramento.

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 ARS is a Delaware

corporation with its headquarters in

Boston, Massachusetts. It currently

owns and operates 75 radio stations in

14 metropolitan areas in the United

States. Its 1996 revenues were

approximately $270 million. ARS owns

four radio stations authorized and

operating as Class B broadcast facilities

in the Sacramento area.

EZ is a Virginia corporation

headquartered in Fairfax, Virginia. It

owns and operates twenty-three radio

stations in seven metropolitan areas in

the United States. Its 1996 revenues

were approximately $118 million. EZ

owns two radio stations authorized and

operating as Class B broadcast facilities

in the Sacramento area.

B. Description of the Events Giving Rise

to the Alleged Violations

On August 5, 1996, ARS agreed to

purchase EZ for approximately $655

million. As is more fully discussed

below, ARS would control a significant

share of the radio advertising in

Sacramento, as well as a significant

percentage of advertising directed to

certain target audiences in Sacramento.

The proposed acquisition of EZ by ARS,

and the threatened loss of such

competition that would be caused

thereby, precipitated the government’s

suit.

C. Anticompetitive Consequences of the

Proposed Merger

1. Sale of Radio Advertising Time in

Sacramento

The Complaint alleges that the

provision of advertising time on radio

stations serving the Sacramento,

California Metro Survey Area (‘‘MSA’’)

constitutes a line of commerce and

section of the country, or relevant

market, for antitrust purposes. The

Sacramento MSA is the geographical

unit for which Arbitron furnishes radio

stations, advertisers, and advertising

agencies in Sacramento 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.

Local and national advertising that is

placed on radio stations within the

Sacramento MSA is aimed at reaching

listening audiences in the Sacramento

MSA, and radio stations outside of the

Sacramento 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

Sacramento MSA, advertisers would not

buy enough advertising time from radio

stations located outside of the

Sacramento 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 Sacramento because

such advertising is preferable to

advertising in other media for their

specific needs. For such advertisers,

radio time: may be less expensive and

most cost-efficient than other media at

reaching the advertiser’s target audience

(individuals most likely to purchase the

advertiser’s products or services); may

reach certain target audiences that

cannot be reached as effectively through

other media; or may offer promotional

opportunities to advertisers that they

cannot exploit as effectively using other

media. For these reasons and others,

many local and national advertisers in

Sacramento 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 Sacramento, the

existence of such advertisers would not

prevent radio stations from profitably

raising their prices a small but

significant amount to those advertisers

who have strong preferences for using

radio over other media for some or all

of their advertising campaigns. At a

minimum, stations could profitably

raise prices 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 among different
Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices 15927

customers, radio stations may charge

higher prices to advertisers that view

radio as particularly effective for their

needs, while maintaining lower prices

for other advertisers.

2. Harm of Competition

The Complaint alleges that ARS’s

proposed acquisition of EX would

lessen competition substantially in the

provision of radio advertising time in

the Sacramento MSA. The proposed

acquisition would create significant

market concentration, and would permit

ARS to control a substantial share of the

advertising revenues in Sacramento.

The transaction is likely to lead to

further market concentration in view of

the fact that KSSJ–FM has recently been

ungraded to a Class B FM signal, which

broadens that station’s reach and is

therefore likely to increase its (and

hence ARS’s) market share. Moreover,

the proposed merger would concentrate

many of Sacramento’s strongest radio

signals into the hands of ARS. After all

transactions are complete, ARS would

own six of the 12 stations in the

Sacramento area authorized and

operating as Class B broadcast facilities.

Because weaker signals cannot penetrate

as large as listening area, they do not

have the potential to reach as many

listeners as strong signals. All else being

equal, concentrated ownership of strong

signals is likely to create more

listenship dominance the concentrated

ownership of weaker signals.

ARS presently controls approximately

21% of radio advertising revenues in

Sacramento, and its market share would

rise to approximately 36% after the

proposed merger. According to the

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

widely-used measure of market

concentration defined and explained in

Exhibit A hereto, the pre-merger HHI in

this market is 1895, which would rise

by 998 points to 2893 after the merger.

This substantial increase in

concentration, exacerbated by the

upgrade of KSSJ–FM’s signal to Class B

and the resultant likely increase of

ARS’s future market share, will give

ARS the unilateral power to raise

advertising prices and reduce the level

of service provided to advertisers in

Sacramento.

Furthermore, the proposed

transactions would eliminate head-tohead competition between ARS and EZ

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

has a high correlation with their target

audience. If a number of stations

efficiently reach that target audience,

advertisers benefit from the competition

among such stations to offer better

prices or services. Today, several ARS

and EZ stations compete head-to-head

to reach the same audiences and, for

many local and national advertisers

buying time in Sacramento, they are

close substitutes for each other based on

their specific audience characteristics.

The proposed merger would eliminate

such competition, notably including

competition for advertisers seeking to

reach female listeners in Sacramento.

Advertisers seeking to reach female

listeners in Sacramento currently help

to ensure competitive rates by ‘‘playing

off’’ ARS stations against EZ stations.

Because the direct competition between

the ARS and EZ stations would be

eliminated by the proposed merger, and

because advertisers seeking to reach

female listeners would have inferior

alternatives to the merged entity, the

acquisition would give ARS the ability

to raise its rates and reduce the quality

of its services to a significant number of

its advertisers on its Sacramento

stations. This is particularly true

because of the merged entity’s ability to

charge different prices to different

advertisers.

Format changes are unlikely to deter

the anticompetitive consequences of the

proposed merger. If ARS raised prices or

reduced services to those advertisers

who buy time on ARS and EZ stations

because of their strength in delivering

access to certain specific audiences,

non-ARS radio stations in Sacramento

would not be induced to change their

formats to attract those audiences in

sufficiently large numbers to defeat a

price increase. 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 ARS, because they would

likely lose a substantial portion of their

existing audiences. Even if less

successful or less powerful stations did

change format, they would still be

unlikely to attract enough listeners to

provide suitable alternatives to the

merged entity.

Finally, new entry into the

Sacramento radio advertising market is

highly unlikely in response to a price

increase by the merged parties. No

unallocated radio broadcast frequencies

exist in Sacramento. Also, stations

located in adjacent communities cannot

boost their power so as to enter the

Sacramento market without interfering

with other stations on the same or

similar frequencies, a violation of

Federal Communications Commission

(‘‘FCC’’) regulations.

For these reasons, plaintiff concludes

that the merger as proposed would

substantially lessen competition in the

sale of radio advertising time in the

Sacramento MSA, eliminate actual

competition between ARS and EZ, and

result in increased rates for radio

advertising time in the Sacramento

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 Sacramento

MSA. It requires the divestiture of

KSSJ–FM, a station oriented toward

female listeners, and one of only 12

radio signals in the Sacramento area

authorized and operating as Class B FM

broadcast facilities. Class B signals are

the strongest, and therefore the most

competitively significant, radio

broadcasting signals in the Sacramento

area. Absent the divestiture, ARS would

have controlled six of 12 of

Sacramento’s Class B signals. Such

concentrated ownership of the most

competitively significant signals in the

area, coupled with the likely increase in

ARS’s revenue share following KSSJ–

FM’s signal upgrade, would enable ARS

to maintain a dominant share of

listeners that would be difficult for

competing radio stations to challenge

effectively, thereby reducing the choices

available to radio advertisers in

Sacramento, and diminishing

competition. The divestiture of KSSJ–

FM leaves ARS with five of the 12 Class

B FM signals and less than 35 percent

of the advertising revenues in

Sacramento, and puts the station in the

hands of a competitor, who will have

the competitive benefit of the station’s

signal upgrade. In particular, the

divestiture of KSSJ–FM, upgraded to a

Class B signal, will permit ARS and the

remaining radio stations in Sacramento

to compete vigorously for advertisers

seeking to reach female listeners.

Although KSSJ–FM is currently

authorized and operating as a Class B

FM station, it is still awaiting the formal

issuance of its Class B license by the

FCC. In the event that this license has

not been issued by the FCC on or before

December 31, 1997, then the proposed

Final Judgment gives plaintiff the option

to designate an additional Sacramento

Class B FM station for divestiture by

defendants.
15928 Federal Register / Vol. 62, No. 64 / Thursday, April 3, 1997 / Notices

Unless plaintiff grants an extension of

time, defendants must divest KSSJ–FM

either within six months after the Final

Judgment has been filed or within five

(5) business days after notice of entry of

the Final Judgment, whichever is later.

Until the divestitures take place, KSSJ–

FM will be operated and maintained as

an independent competitor to

defendants’ other stations in the

Sacramento MSA.

If defendants fail to divest KSSJ–FM

within the prime periods specified in

the Final Judgment, the Court, upon

application of the plaintiff, shall

appoint a trustee nominated by the

plaintiff to effect the divestiture. If a

trustee is appointed, the proposed Final

Judgment provides that defendants 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 KSSJ–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 defendants, the

plaintiff 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 plaintiff and

defendants, who will each have the

right to be heard and to make additional

recommendations.

The proposed Final Judgment requires

that defendants maintain KSSJ–FM

separate and apart from their other

stations, pending divestiture. The

Judgment also contains provisions to

ensure that KSSJ–FM will be preserved,

so that it will remain a viable, aggressive

competitor after divestiture.

The proposed Final Judgment also

prohibits defendants from entering into

certain agreements with other

Sacramento radio stations without

providing at least thirty (30) days’ notice

to the Department of Justice.

Specifically, defendants must notify the

Department before acquiring any

significant interest in another

Sacramento radio station. Such

acquisitions could raise competitive

concerns but might be too small to be

otherwise reportable under the HartScott-Rodino (‘‘HSR’’) premerger

notification statute. Moreover,

defendants may not agree to sell radio

advertising time for any other

Sacramento radio station without

providing plaintiff with notice. This

provision ensures that plaintiff will

receive advance notice of any

acquisition, or agreements, through

which defendants would increase the

amount of advertising time on radio

stations that they can sell. In particular,

this provision requires defendants to

notify plaintiff before they enter into

any joint sales agreements (‘‘JSAs’’),

where one station takes over another

station’s advertising time, or enter into

any local marketing agreements

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

another station’s broadcasting and

advertising time, in the Sacramento

MSA. Agreements whereby defendants

sell advertising for or manage other area

radio stations would effectively increase

defendants’ market share in the

Sacramento area MSA. Despite their

clear competitive significance, JSAs

probably would not be reportable to the

Department of Justice 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

Sacramento market.

The relief in the proposed Final

Judgment is intended to remedy the

anticompetitive effects of the proposed

acquisition of EZ by ARS. 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

Sacramento 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 attorney’s 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 APPA, provided that the United

States 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, N.W., Suite 4000,

Washington, D.C. 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

The plaintiff considered, as an

alternative to the proposed Final

Judgment, a full trial on the merits of its

Complaint against defendants. The

plaintiff is satisfied, however, that the

divestiture of the KSSJ–FM Assets and

other relief contained in the proposed

Final Judgment will preserve viable

competition in the sale of radio

advertising time in the Sacramento

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
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